Senseonics unit closes on up to $50 million secured term loans

By Mary-Katherine Stinson

Lexington, Ky., Sept. 11 – Senseonics Holdings Inc. and wholly owned subsidiary Senseonics, Inc. entered into loan and security agreement on Sept. 8 with Hercules Capital, Inc. as administrative agent and collateral agent under which up to $50 million of senior secured term loans will be made available to Senseonics, according to an 8-K filed with the Securities and Exchange Commission.

The facility consists of an initial term loan of $25 million, which was funded on the effective date, and two additional tranches of term loans in the amounts of up to $10 million and $15 million, respectively, which will become available to Senseonics upon satisfaction of certain terms and conditions.

The loans under the agreement mature on Sept. 1, 2027.

The loans bear interest at an annual rate equal to the greater of the prime rate plus 140 basis points and 9.9%, repayable in monthly interest-only payments through Sept. 1, 2026 initially and continuing to the maturity date if the company satisfies the interest-only extension conditions.

At the company’s option, it may prepay all or any of the outstanding borrowings subject to a prepayment fee equal to 3% of the principal amount being prepaid if the prepayment occurs within one year of the effective date, 2% of the principal amount being prepaid during the second year and 1% of the principal amount being prepaid after two years prior to maturity.

The company paid a $375,000 facility fee upon closing and will pay additional facility charges in connection with any borrowing of the tranche 2 or tranche 3 loans totaling 0.5% of that tranche.

There is an end-of-term fee in an amount equal to 6.95% of the total principal amount of loan advances made under the agreement, which is due and payable on the earliest to occur of maturity, the date Senseonics prepays the outstanding loans in full and the date that the secured obligations become due and payable.

Financial covenants require Senseonics to hold unrestricted cash equal to 30% of the outstanding loan amount in addition to a performance covenant requiring the company to generate net product revenue on a trailing six-month basis more than a certain percentage beginning July 1, 2024.

In connection with the agreement, the company will issue warrants to certain lenders to purchase 832,362 shares of common stock at $0.6007 per share at any time through the earlier of the seventh anniversary of issuance and the completion of certain acquisition transactions. The company also agreed to issue additional seven-year term warrants upon the funding of the remaining tranches, which would be exercisable for a total number of shares equal to 2% of the funded loan amount divided by the exercise price of $0.6007 per share.

Senseonics Holdings is a Germantown, Md.-based medical technology company.

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