Titan Medical Inc. (“Titan” or the
“Company”) (TSX:TMD) (Nasdaq:TMDI), a medical
device company focused on the design, development and
commercialization of a robotic surgical system for application in
minimally invasive surgery (“MIS”), announced today that it
has filed and been receipted for an amended and restated
preliminary short form prospectus (the “A&R
Preliminary Prospectus”) with securities regulators in the
provinces of Ontario, British Columbia and Alberta. Titan has also
filed a corresponding registration statement on Form F-10 (the
“Registration Statement”) with the United States Securities
and Exchange Commission under the U.S.-Canada Multijurisdictional
Disclosure System. Each of these filings is in connection with a
proposed marketed offering of units (the “Units”) of the
Company (the “Offering”) for total gross proceeds of a
minimum of US$15,000,000 and a maximum of US$25,000,000. The
A&R Preliminary Prospectus and Registration Statement are
subject to completion and amendment.
The Offering
Bloom Burton Securities Inc. (the “Agent”) has been
engaged as the Company’s agent for the Offering and the Agent has
appointed Northland Securities, Inc. as sub-agent with respect to
the offer and sale of the Units in the United States.
Each Unit will be comprised of one common share of the Company
and one common share purchase warrant (a “Warrant”). The
Offering will be undertaken on a “best efforts” agency basis. The
Company also expects to grant to the Agent a 30-day over-allotment
option to sell up to an additional 15% of the number of Units
and/or Warrants offered in the Offering. The type of security to be
distributed, the number of Units to be distributed, the price of
each Unit and the exercise price and term of each Warrant will be
determined by negotiation between the Company and the Agent in the
context of the market with final terms to be determined at the time
of pricing.
It is expected that closing of the Offering will occur on or
about October 24, 2019, or such other date or dates as the Company
and the Agent may agree.
The net proceeds of the Offering will be used to fund continued
development work in connection with the Company’s single-port
robotic surgical system, as well as for working capital and other
general corporate purposes. Further details are disclosed in the
A&R Preliminary Prospectus, available at www.sedar.com and the Registration Statement,
available at www.sec.gov.
The Offering is subject to a number of customary conditions,
including, without limitation, receipt of all regulatory and stock
exchange approvals. The Registration Statement has not yet become
effective. The Units may not be sold nor may offers to buy be
accepted in the United States prior to the time the Registration
Statement becomes effective. This news release shall not constitute
an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of the Units, in any province, state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such province, state or jurisdiction.
Withdrawal of Previously Published Milestones
The Company also announced today that it was withdrawing all
forward-looking statements included in its continuous disclosure
documents with respect to the cost and timing of the development of
its robotic surgical system beyond the fourth quarter of 2019. The
Company’s current development plan, as disclosed in its A&R
Prospectus, is as follows:
Milestone Number
Development Milestones
Estimated
Cost
(in US million $)
Schedule for Milestone
Completion
Comments
Milestone 6
a. Complete and document preclinical live animal (swine) and
cadaver studies according to final protocols for FDA submittal
Completed
b. Verify production system operation with clinical experts under
rigorous formal (summative) human factors evaluation under
simulated robotic manipulation exercises
Q3 2019
Completed
c. Complete audits for ISO 13485 Certification
Completed
Milestone 7 a. Complete improvements to camera insertion tube and
endoscope module and verify performance
Completed
b. Begin to compile design and
verification documentation for application for Investigational
Device Exemption (IDE)
5.2(1)
Q3 2019
Completed
c. Complete pre-IRB submission
preparations for human confirmatory studies, including
communications with IRB Committees of hospitals
Completed
Milestone 8(2)
a. Obtain final independent report from
validation testing of system safety and usability for the intended
users and use environments under simulated robotic manipulation
exercises intended to replicate essential surgical tasks
Q4 2019
b. Complete User Manual for robotic system
setup by operating room staff and surgeon operation of surgeon
workstation, patient cart, instruments and accessories
4.1
c. Obtain ISO 13485 Certification(3)
Milestone 9
a. Implement and test improvements to
instruments and accessories
TBD
TBD
New
b. Perform biocompatibility testing of
instruments at independent lab
c. Perform electrical safety testing for
surgeon workstations and patient cart, including electromagnetic
compatibility (EMC) and electromagnetic interference (EMI) tests at
independent lab
d. Update application for IDE as
additional testing lab data is received and continue preparations
for human confirmatory studies
Milestone 10
a. Launch rebranded product line,
including logos with trade-mark pending, literature and
presentation templates, product and packaging labeling, and new
website
TBD
TBD
New
b. Complete system software validation
New
c. Submit IDE application to FDA
Moved from Q3 2019
Milestone 11
a. Receive IDE approval from FDA(4)
TBD
TBD
Moved from Q3
2019
b. Receive approvals from IRB Committees
of IDE hospitals
Moved from Q4 2019
c. Commence human confirmatory studies
under IDE protocols for FDA submittal
Moved from Q4 2019
Milestone 12
a. Complete human confirmatory studies and
patient follow-up and compile reports from human confirmatory
studies
Moved from Q4 2019
b. Submit 510(k) application to FDA
TBD TBD
Moved from Q4 2019
c. Submit Technical File to European
Notified Body for review for CE Mark
Moved from Q4 2019
d. Ongoing software development and
implementation
Moved from Q1 2020
e. Planning and preparation for
manufacturing and commercialization
Moved from Q1 2020
Milestone 13
a. Planning and preparation for
commercialization
TBD
TBD
Moved from Q2 2020
The Company is withdrawing all forecasts with respect to the
cost and timing of the development of its robotic surgical system
beyond the fourth quarter of 2019 because its lack of financing has
caused its primary product development supplier to limit the
development work on the Company’s robotic surgical system. This
supplier has also terminated the employment or engagement of a
significant number of the employees and contractors who had been
working with the supplier on the development of the Company’s
robotic surgical system.
Additionally, the Company’s relationship with another service
provider has deteriorated as the service provider, on the one hand,
has noted concerns about the Company’s inability to fully pay
invoices while the Company, on the other hand, has expressed
dissatisfaction with the quality of the work performed by the
service provider. On October 4, 2019, the Company received a demand
letter from attorneys engaged by the service provider demanding
payment for all amounts the service provider believes it is owed by
the Company, being US $2,902,916 (the “Service Provider Demand
Letter”). On October 11, 2019, the Company issued a response
letter to the Service Provider Demand Letter declining the terms of
the demands set out in the Service Provider Demand Letter (the
“Company Response Letter”). Pursuant to the Company Response
Letter, Titan has requested that the service provider cease all
work on behalf of the Company.
These events will significantly impact the timing and costs
associated with the completion of the Company’s future milestones
as additional time and cost will be incurred to rehire employees
and resume product development.
About Titan
Titan Medical Inc. is focused on computer-assisted robotic
surgical technologies for application in MIS. The Company is
developing a single-port robotic surgical system comprised of a
surgeon-controlled patient cart that includes a dual-view camera
system with 3D and 2D high-definition vision options and
multi-articulating instruments for performing MIS procedures, and a
surgeon workstation that provides an advanced ergonomic interface
to the patient cart and a 3D endoscopic view inside the patient’s
body. Titan intends to initially pursue gynecologic surgical
indications for use of its single-port robotic surgical system.
For more information, please visit the Company’s website at
www.titanmedicalinc.com.
Forward-Looking Statements
This news release contains “forward-looking statements” within
the meaning of applicable Canadian and U.S. securities laws. Such
statements reflect the current expectations of management of the
Company’s future growth, results of operations, performance and
business prospects and opportunities. Wherever possible, words such
as “may”, “would”, “could”, “will”, “anticipate”, “believe”,
“plan”, “expect”, “intend”, “estimate”, “potential for” and similar
expressions have been used to identify these forward-looking
statements. These statements, including with respect to the size of
the Offering, the granting of the over-allotment option, the
closing date of the Offering and the use of the net proceeds of the
Offering, reflect management’s current beliefs with respect to
future events and are based on information currently available to
management. Forward-looking statements involve significant risks,
uncertainties and assumptions. Many factors could cause the
Company’s actual results, performance or achievements to be
materially different from any future results, performance or
achievements that may be expressed or implied by such
forward-looking statements, including, without limitation, those
listed in the “Risk Factors” section of the Company’s Annual
Information Form dated March 29, 2019 (which may be viewed at
www.sedar.com). Should one or more of
these risks or uncertainties materialize, or should assumptions
underlying the forward-looking statements prove incorrect, actual
results, performance, or achievements may vary materially from
those expressed or implied by the forward-looking statements
contained in this news release. These factors should be considered
carefully, and prospective investors should not place undue
reliance on the forward-looking statements. Although the
forward-looking statements contained in the news release are based
upon what management currently believes to be reasonable
assumptions, the Company cannot assure prospective investors that
actual results, performance or achievements will be consistent with
these forward-looking statements. Except as required by law, the
Company expressly disclaims any intention or obligation to update
or revise any forward-looking statements whether as a result of new
information, future events or otherwise.
(1) Includes accrued but unpaid research and development costs
estimated at approximately US $4.6 million, and accrued but unpaid
general and administrative costs estimated at approximately US $0.6
million. Other than payment of invoices for work previously
performed by its subcontractors, the Company does not anticipate
any other cash outflow requirements in order to complete this
Milestone.
(2) Milestones 8 constitutes the Company’s next significant
milestone and includes research and development costs estimated at
approximately US $3.2 million, and general and administrative costs
estimated at approximately US $0.9 million.
(3) The Company’s final short form prospectus dated March 28,
2019 (the “March Prospectus”) disclosed that obtaining ISO
13485 Certification was expected to occur in the third quarter of
2019 and receipt of the certification is now projected for
completion in the fourth quarter 2019.
(4) The March Prospectus disclosed that receipt of IDE approval
from the FDA was expected to occur in the third quarter of 2019.
However, as disclosed herein, the Company has withdrawn the
projections for achievement of all development milestones beyond
Milestone 8, including their timing and cost.
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version on businesswire.com: https://www.businesswire.com/news/home/20191015006147/en/
LHA Investor Relations
Kim Sutton Golodetz (212) 838-3777 kgolodetz@lhai.com or Bruce
Voss (310) 691-7100 bvoss@lhai.com
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