Item 1.01.
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Entry into a Material Definitive Agreement.
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Equity Line of Credit with Energy
Capital, LLC
On November 9, 2020, Senseonics Holdings,
Inc. (the “Company”), entered into an equity line agreement (the “Equity Line Agreement”) with Energy
Capital, LLC, a Florida limited liability company (“Energy Capital”), which provides that, upon the terms and subject
to the conditions and limitations set forth therein, Energy Capital is committed to purchase up to an aggregate of $12.0
million of shares of the Company’s newly designated series B convertible preferred stock (the “Series B Preferred Stock”)
at the Company’s request from time to time during the 24-month term of the Equity Line Agreement.
Under the Equity Line Agreement, beginning
January 21, 2021, subject to the satisfaction of certain conditions, including that the Company has less than $8 million of cash,
cash equivalents and other available credit (aside from availability under the Equity Line Agreement), the Company has the right,
in its sole discretion, to present Energy Capital with a purchase notice (each, a “Regular Purchase Notice”) directing Energy
Capital (as principal) to purchase shares of Series B Preferred Stock at a price of $1,000 per share (not to exceed $4.0 million
worth of shares) once per month, up to an aggregate of $12.0 million of the Company’s Series B Preferred Stock at a per share
price (the “Purchase Price”) equal to $1,000 per share of Series B Preferred Stock, with each share of Series B Preferred
Stock initially convertible into common stock (the “Common Stock”), beginning six months after the date of its issuance,
at a conversion price of $0.3951 per share, subject to customary anti-dilution adjustments, including in the event of any stock
split. The Equity Line Agreement provides that the Company shall not effect any Regular Purchase under the Equity Line Agreement
on any date where the closing price of the Company’s Common Stock on the NYSE American is less than $0.25 without the approval
of Energy Capital.
In addition, beginning on January 1, 2022,
subject to the satisfaction of certain conditions, if the full $12.0 million of Series B Preferred Stock has not been sold pursuant
to Regular Purchases, Energy Capital may, at its sole discretion, by its delivery to the Company of a Purchase Notice, from time
to time, purchase up to the amount then remaining available under the Equity Line Agreement at the Purchase Price.
In connection with the Equity Line Agreement,
the Company and Energy Capital agreed upon a form of certificate of designations (the “Certificate of Designations”)
to set forth the terms of the Series B Preferred Stock, which the Company will file with the Secretary of State of the State of
Delaware prior to the initial issuance of Series B Preferred Stock under the Equity Line Agreement. Pursuant to the Certificate
of Designations, each share of Series B Preferred Stock will initially be convertible into a number of shares of Common Stock equal
to $1,000 divided by the conversion price of $0.3951 per share, subject to customary anti-dilution adjustments, including in the
event of any stock split. The Series B Preferred Stock will rank senior to the Common Stock and pari passu with the Company’s
Series A convertible preferred stock. Upon a liquidation, dissolution or winding up of the Company, each share of Series B Preferred
Stock will be entitled to receive an amount per share equal to the greater of the purchase price paid and the amount that the holder
would have been entitled to receive at such time if the Series B Preferred Stock were converted into Common Stock (the “Series
B Liquidation Amount”). The holders will also be entitled to participate in dividends declared or paid on the Common Stock
on an as-converted basis. If the Company undergoes a change of control, each holder has the right to cause the Company to redeem
any or all of the Series B Preferred Stock for cash consideration equal to the Series B Liquidation Amount.
The holders of Series B Preferred Stock
generally will be entitled to vote with the holders of the shares of Common Stock and Series A Preferred Stock on all matters submitted
for a vote of holders of shares of Common Stock (voting together with the holders of shares of Common Stock and Series A Preferred
Stock as one class) on an as-converted basis. Additionally, certain matters will require the approval of the majority of the outstanding
Series B Preferred Stock, voting as a separate class, including (i) altering or changing adversely the powers, privileges, preferences
or rights of the Series B Preferred Stock, or (ii) amendments, modifications, repeal or waiver of any provision of the Company’s
certificate of incorporation, bylaws or of the Certificate of Designations that would adversely affect the rights, preferences,
privileges or powers of the Series B Preferred Stock.
Pursuant to the terms of the Equity Line
Agreement, the Company will use the net proceeds from the sale of the shares for working capital and general corporate purposes
and will not use such net proceeds for the repayment of any indebtedness of the Company.
The Equity Line Agreement may be terminated:
(i) upon the mutual written agreement of the parties; (ii) automatically on the date that the Company sells, and Energy Capital
purchases, the full $12.0 million of shares contemplated by the agreement; and (iii) automatically on November 9, 2022 (the “Maturity
Date”) if, for any reason or for no reason, the full $12.0 million of shares contemplated by the agreement have not been
purchased by the Maturity Date.
Energy Capital has agreed that, during
any time prior to the termination of the Equity Line Agreement, neither it nor any of its agents, representatives or affiliates
shall engage in any direct or indirect short-selling or hedging of the Company’s Common Stock which establishes a net short
position with respect to the Common Stock.
Concurrently with entry into the Equity
Line Agreement, the Company issued a warrant to Energy Capital, exercisable beginning May 9, 2021, to purchase up to 10,000,000
shares of Common Stock at an exercise price of $0.3951 per share (the “Warrant”). The Warrant expires, if unexercised,
on November 9, 2030.
The foregoing description is not complete
and is qualified in its entirety by reference to the full texts of the Equity Line Agreement, the Warrant and form of Certificate
of Designations, copies of which are filed herewith as Exhibits 10.1, 10.2, and 3.1, respectively, to this Current Report on Form 8-K and
are incorporated herein by reference.
Extension of Masters Capital Purchase Option
On November 9,
2020, the Company and with Masters Special Situations, LLC and certain affiliates thereof (collectively,
“Masters”) entered into a side letter extending the expiration date of Masters’ option to purchase up to
$27 million of shares of Series A Convertible Preferred Stock to January 11, 2021 (as previously described on the
Company’s Current Report on Form
8-K filed with the SEC on August 10, 2020). The foregoing description is not complete and is qualified in its entirety by
reference to the full text of the side letter, a copy of which is filed herewith as Exhibit 10.3 to this Current Report on
Form 8-K and is incorporated herein by reference.