Titan Medical Inc. (“Titan” or the “Company”) (TSX: TMD)
(Nasdaq: TMDI), a medical device company focused on the design and
development of surgical technologies for robotic single access
surgery, today announced the release of its annual financial
results for the years ended December 31, 2020 and 2019. During the
year ended December 31, 2020, the Company generated revenue of
$20.0 million, resulting from development and license agreements
with Medtronic plc, and raised aggregate net proceeds of
approximately $22.0 million from equity financings and
approximately $2.7 million from the exercise of warrants. The
Company also received a $1.5 million 8% senior secured loan from an
affiliate of Medtronic.
On December 31, 2020, the Company had cash and cash equivalents
of approximately $25.5 million, compared to approximately $0.8
million on December 31, 2019. Since December 31, 2020, the Company
has received approximately $10.0 million from the exercise of
warrants and net proceeds of approximately $10.2 million from a
financing which closed on January 26, 2021. The Company’s cash
position was $42.5 million on January 31, 2021. In addition, the
Company has also announced another financing with aggregate gross
proceeds of $20.0 million, which is expected to close by the end of
February 2021.
“The progress made in the second half of 2020 resulted in an
incredible year of accomplishments to position Titan for success.
Recently announced financing arrangements and warrant exercises add
to that progress, further strengthening our cash position to
support the development of the Enos™ robotic single access surgical
system, as we prepare to commence human clinical studies.” said
David McNally, President and Chief Executive Officer of Titan.
“During 2020, we also executed a license agreement and a
separate development and license agreement with Medtronic,
resulting in the Company’s first revenue of $20.0 million, by way
of license payments. We believe Titan is in an excellent position
to validate our vision of providing an innovative single access
robotic surgical system. We are proud of our progress and recognize
that our success is a direct result of the commitment and hard work
of our entire team.”
Business highlights for the fourth quarter of 2020 and recent
weeks include:
- On October 7, 2020, the Company announced the election of Paul
Cataford, Anthony J. Giovinazzo, and Cary G. Vance as independent
members to its board of directors.
- On October 26, 2020, the Company announced the achievement of a
$10.0 million technical milestone under a development and license
agreement with Medtronic.
- David McNally, President and CEO of Titan, presented a
corporate overview and the Enos surgical system to a live virtual
audience at the Benzinga Global Small Cap conference on December 9,
2020.
- On December 24, 2020, the Company received written notification
from The Nasdaq Stock Market LLC that it had cured the bid price
deficiency and regained full compliance with all applicable
criteria for continued listing and trading on The Nasdaq Capital
Market.
- On December 30, 2020, the Company announced that it received a
written response from the U.S. Food & Drug Administration to
its Request for Information in accordance with Section 513(g) of
the U.S. Federal Food, Drug and Cosmetic Act, indicating that while
the FDA's response does not constitute a classification decision,
based on information provided to the agency, the Enos system is
appropriate for classification through the De Novo pathway.
- On January 26, 2021, the Company announced the closing of an
offering of 6,451,613 units of the Company sold on a "bought deal"
basis whereby Bloom Burton Securities Inc. acted as underwriter for
the offering and exercised its over-allotment option in full for an
additional 967,741 units resulting in aggregate gross proceeds to
the Company of approximately $11.5 million.
- On February 2, 2021, the Company announced it had entered into
an agreement with underwriters Bloom Burton Securities Inc.
pursuant to which Bloom Burton agreed to purchase, on a "bought
deal" basis, 6,250,000 units of the Company at a price of $2.40 per
Unit for aggregate gross proceeds of $15.0 million.
- On February 3, 2021, the Company announced it had entered into
an agreement with Bloom Burton Securities Inc. to increase the
amount of its previously announced offering of February 2, 2021, to
8,335,000 units of the Company at a price of $2.40 for aggregate
gross proceeds of $20.0 million.
- On February 16, 2021, the Company launched “Titan Living Labs”,
a new media-rich addition to its website providing access to
stories behind the design, engineering and innovative technologies
employed by Titan Medical’s engineering team for the Enos surgical
system.
Financial results for the twelve months ended December 31, 2020
include:
Net and comprehensive loss for the year ended December 31, 2020,
was $24.2 million or $0.36 per share, compared to a net and
comprehensive loss of $41.9 million, or $1.37 per share, for the
year ended December 31, 2019. These figures included research and
development expenditures of $7.7 million for 2020 and $51.4 million
for 2019, as well as a non-cash loss on change in the fair value of
warrants of $27.9 million in 2020 and a non-cash gain on change in
fair value of warrants of $19.8 million in 2019. The Company also
had an aggregate gain on settlements with suppliers of $2.5 million
in 2020.
The net and comprehensive loss for the three months ended
December 31, 2020 was $20.6 million, compared with a net and
comprehensive gain of $2.4 million, for the three months ended
December 31, 2019. The comparative increase in comprehensive loss
was primarily due to an increase in non-cash loss on the fair value
of warrants of $29.8 million, and an increase of $3.4 million in
research and development expenses after the Company secured
additional financing, offset by $10.0 million in revenue from the
development and license agreement with Medtronic, all in the three
months ended December 31, 2020.
Cash and cash equivalents as of December 31, 2020 were $25.5
million, compared with cash and cash equivalents of $0.8 million as
of December 31, 2019. At December 31, 2020, current liabilities,
excluding warrant liability, were $6.6 million compared with $11.4
million as of December 31, 2019.
At December 31, 2020, the Company had working capital of $20.4
million compared to a working capital deficit of $9.7 million at
December 31, 2019.
The Company has disclosed in its management’s discussion and
analysis in respect of the 2020 annual financial year (“2020
MD&A”) that during the preparation of its financial statements
for the year ended December 31, 2020, management became aware of
certain errors in the calculation of asset and liability balances
and the appropriate IFRS application and disclosure required for an
amendment to a contract with an external development firm. After
adjusting the financial statements of the Company as at and for the
year ended December 31, 2020, the Company has concluded that the
audited consolidated financial statements as at and for the year
ended December 31, 2020 present fairly, in all material respects,
the Company’s financial position, results of operations, changes in
equity and cash flows in accordance with IFRS.
As the 2020 MD&A outlines, the Company identified a material
weakness in its controls in 2020 and has developed a remediation
plan which includes the following: i) engagement of one or more
qualified and independent consulting firms with subject matter
experts to assist with the Company’s internal accounting and
reporting over complex accounting issues; ii) implementation of
business information systems to support the work associated with
the valuation and reporting of the warrant liabilities and other
equity-based securities; and iii) the hiring of additional
resources.
The consolidated financial statements for the year ended
December 31, 2020, and December 31, 2019, have been prepared in
accordance with International Financial Reporting Standards and
International Accounting Standards as issued by the International
Accounting Standards Board (“IASB”) and interpretations
(collectively “IFRS”) and may be viewed at www.sedar.com and at
www.sec.gov.
Investor Audio Webcast Information
Titan Medical will host an investor audio webcast at 4:30 p.m.
ET today (February 22, 2021) to discuss the Company’s annual
financial results for the years ended December 31, 2020 and 2019,
and business highlights. The webcast can be accessed in the
Investor Relations section on the Company’s website at
www.titanmedicalinc.com.
About Titan
Titan Medical Inc., a medical device company headquartered in
Toronto, is focused on developing robotic assisted technologies for
application in single access surgery. The Enos™ system, by Titan
Medical, is being developed with dual 3D and 2D high-definition
vision systems, multi-articulating instruments, and an ergonomic
surgeon workstation. With the Enos system, Titan intends to
initially pursue gynecologic surgical indications.
Certain of Titan’s robotic assisted surgical technologies and
related intellectual property have been licensed to Medtronic plc,
while retaining world-wide rights to commercialize the technologies
for use with the Enos system.
Enos™ is a trademark of Titan Medical Inc.
For more information, visit 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, including references to: the Company being focused on
the design and development of surgical technologies for robotic
single access surgery; the Company’s 2020 accomplishments position
the Company for success; the Company’s preparation to commence
human clinical studies; the Company’s belief that it is in an
excellent position to validate its vision of providing an
innovative single access robotic surgical system; the FDA’s
indication that the Enos system is appropriate for classification
through the De Novo pathway; the Company’s financing with aggregate
gross proceeds of $20.0 million; the expected engagement of one or
more qualified and independent consulting firms, the expected
implementation of business information systems to support the work
associated with the valuation and reporting of the warrant
liabilities and other equity-based securities, and the expected
hiring of additional resources; the Enos system being developed
with dual 3D and 2D high-definition vision systems,
multi-articulating instruments, and an ergonomic surgeon
workstation; Titan’s intention to initially pursue gynecologic
surgical indications with the Enos system; the license of certain
of Titan’s robotic assisted surgical technologies and related
intellectual property to Medtronic plc, while retaining world-wide
rights to commercialize the technologies for use with the Enos
system. These statements 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
Report on Form 20-F for the fiscal year ended December 31, 2019 and
the Company’s 2020 annual management’s discussion and analysis
(which may be viewed at www.sedar.com and at www.sec.gov). 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210222005537/en/
Monique L. Delorme Chief Financial Officer +1-416-548-7522
investors@titanmedicalinc.com
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