Senseonics Holdings, Inc. (SENS) Earnings Call Transcript & Summary

Hello, everyone, and welcome to the 2020 Annual Meeting of Stockholders for Senseonics Holdings, Inc. Before we get started, I would like to go over a few items so you know how to participate in the meeting. [Operator Instructions] Today's meeting is being recorded. I would now like to introduce Stephen DeFalco, Chairman of the Board of Directors of Senseonics Holdings, Inc. Please go ahead.

Good morning. I'm Stephen DeFalco, and I'm serving as the Chairman of this Annual Meeting of the Stockholders of Senseonics Holdings, Inc. I'm very happy to welcome you to the Senseonics' 2020 Stockholders Meeting. We are holding this annual meeting virtually this year instead of in person as a result of heightened health and safety concerns due to the ongoing COVID-19 pandemic. Before I call the meeting to order, I'd like to introduce to you the members of the Board and the company who are with us today. The other members of the Board here today are Dr. Steven Edelman, Dr. Timothy Goodnow, Dr. Francine Kaufman, Dr. Justin Klein, Douglas Prince and Douglas Roeder. Our other company representatives here today are Dr. Abhi Chavan, Dr. Mukul Jain, Kenneth Horton, Mirasol Panlilio, Nick Tressler and Dr. Katherine Tweden. I would also like to introduce Dan Kotter and Serim Kumralbas of Ernst & Young, our independent registered public accounting firm, who are available to respond to appropriate questions. Finally, I would also like to introduce Darren DeStefano and William DuVal of Cooley LLP, our outside corporate counsel. The meeting will now officially come to order. We will proceed with the formal business of the meeting as set forth in your notice of annual meeting and proxy statement. After the formal part of the meeting, we will give you an opportunity to ask any questions you may have. The agenda and rules of conduct for the meeting have been provided on the meeting website. As stated in the rules of conduct, only validated stockholders may ask text questions in the designated field on the meeting website. To allow us to answer questions from as many stockholders as possible, stockholders will only be permitted to ask one question and only one question germane to our business of the meeting will be answered as time permits. Will the secretary please report at this time with respect to the mailing of the notice of the meeting and the stockholders list.

I have at this meeting a complete list of the stockholders of record of a common stock on May 15, 2020, the record date for this meeting. I also have an affidavit certifying that on May 25, 2020, a notice of Annual Meeting of Stockholders of the company was deposited in the U.S. mail to all stockholders record at the close of business on May 15, 2020.

At this time, I'd like to appoint [ Johnson Stifel ] to act as inspector of elections at this meeting. [ Johnson Stifel ] has taken and subscribed the customary oath of office to execute his duties with strict impartiality. We will file his oath with the records of the meeting. His function is to decide upon the qualification of voters, accept their votes and when balloting on all matters is completed, to tally the final votes. Will the secretary please report at this time with respect to the existence of a quorum?

I have been informed by the inspector of election that proxies have been received for 170,346,590 of the 224,262,081 shares of common stock outstanding on the record date, which represents approximately 76% of the total number of outstanding shares. This constitutes a quorum for the meeting today, and we may now carry out the official business of the meeting. If you have not already voted your shares, you may vote online prior to the closing of the polls. The polls will be closed for voting after I go through each of the proposals to be voted on.

We will now proceed with the formal business of this meeting. There are 5 proposals to be considered by the stockholders at this meeting. We will review all of the proposals and then entertain any appropriate questions or discussion under the rules of the order of the meeting. It is now 10:05 on Tuesday, June 30, and the polls are now open for voting on all matters to be presented. The polls will be closed to voting after we go through the matters to be voted on. The first item of business is the election of 2 Class I directors to serve until the 2023 Annual Meeting and until their successors are elected. The nominees for Class I directors are Dr. Timothy Goodnow and Dr. Francine Kaufman. The second item of business is the approval of the compensation paid to the company's named executive officers as described in the proxy statement. The third item of business is the stockholders' preferred frequency of advisory votes on executive compensation. The fourth item of business today is ratification of the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020. The fifth item of business is the approval of the issuance of more than 20% of the company's outstanding company stock upon conversion to the first lien secured notes, second lien secured notes and warrants issued in April 2020 as required by and in accordance with the New York Stock Exchange American Rule 713. If any stockholders would like to make a comment or questions regarding these proposals, please submit your comment or question to the web portal. There are no questions. That was the final proposal for today's meeting. The secretary will now describe the voting procedures.

You may vote your shares online at this time by following the instructions that you received in your confirmation of registration e-mail. You do not need to vote in person if you have already sent in your signed proxy or voted via telephone or online before the meeting and you do not want to change your vote. Any stockholder who has not yet voted or who wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Each share of common stock is entitled to 1 vote. [Voting]

The time is now 10:08 a.m., and the polls are now closed for voting.

May we have the results of the voting?

The report of the inspector of election covering the proposals presented at this meeting is as follows: The first proposal, to elect Francine R. Kaufman and Timothy T. Goodnow as our Class I directors, is carried. The second proposal, to approve on an advisory basis the executive compensation of our named executive officers is carried. The third proposal, the frequency of stockholder advisory votes on executive compensation is every 1 year. The fourth proposal, to select Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020, is ratified. The fifth proposal, to approve the issuance of more than 20% of our common -- of our outstanding common stock upon conversion of the first lien secured notes, second lien secured notes and warrants in April 2020, is carried. We expect to report our preliminary voting results or, if available to us on a timely basis, our final voting results on a current report on Form 8-K to be filed with the SEC within 4 business days after the end of this meeting. If not earlier reported, we expect to report our final voting results in an amendment to our Form 8-K within 4 business days after the final results are known to us.

This concludes the formal portion of today's meeting, and I will now turn the meeting over to Dr. Tim Goodnow.

Thank you, Stephen, and thank you to everyone who joined us today. Now we would like to open things up for shareholder questions or comments. We will take shareholder questions that are being entered today on the web portal. Please note, we will attempt to answer as many questions as the time allows but only questions that are germane to the meeting and within the rules of conduct posted for the meeting will be addressed. I would also like to note that I understand that there may be substantial interest in our strategic process. We updated everyone on the process during our recent earnings call and are not providing any further information today. When we have a further update to give, we will certainly do that publicly. But today, we cannot entertain questions on the process or its status. Operator?

[Operator Instructions]

There appear to be no questions. Is there any opposition to concluding this meeting? As there are no other questions and as we are -- there were no opposition to concluding this meeting, we'd like to conclude.

This concludes the 2020 Annual Meeting. Thank you to all stockholders for attending the meeting. Enjoy the rest of your day.