Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
We are furnishing this proxy statement to the holders of our
common stock in connection with the solicitation of proxies on behalf of the Board for use at a special meeting of stockholders
to be held at our executive offices at 400 Oyster Point Boulevard, Suite 505, South San Francisco, California 94080 on Monday,
March 2, 2020 at 9:00 a.m. local time, and any adjournment thereof, for the sole purpose of seeking approval of the Reverse Split.
The purpose of the Reverse Split is to enable us to regain compliance
with Nasdaq’s $1.00 minimum bid price requirement, and to undertake additional financings in the future to the extent necessary
to support our commercial and product development efforts. We urge our stockholders to review the information set forth in this
proxy statement, particularly under the heading “Approval of the Reverse Split”
SOLICITATION OF PROXIES
We will bear the cost of soliciting proxies. In addition to
solicitation of proxies by mail, our employees, without extra remuneration, may solicit proxies personally or by telephone. We
will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding
proxy materials to beneficial owners and seeking instruction with respect thereto. We have retained ___________ to assist in the
solicitation of proxies for a fee of $______, plus reimbursement of expenses.
We mailed these proxy materials on or about January 31, 2020
to our stockholders of record and beneficial owners as of January 22, 2020, the record date for the meeting.
GENERAL INFORMATION ABOUT VOTING
Record Date
Only the holders of record of our common stock at the close
of business on the record date, January 22, 2020 (the “Record Date”), are entitled to notice of and to vote at the
meeting. On the Record Date, there were 73,733,294 shares of our common stock outstanding. Stockholders are entitled to one vote
for each share of common stock held on the record date.
Voting
When a proxy is properly executed and returned (and not subsequently
properly revoked), the shares it represents will be voted in accordance with the directions indicated thereon, or, if no direction
is indicated thereon, it will be voted:
|
·
|
FOR approval of the Reverse Split; and
|
|
|
|
|
·
|
in the discretion of the proxies with respect to any other matters properly brought before the stockholders at the meeting.
|
Votes Required for Approval
The approval of the amendment to our certificate of incorporation
to effect the Reverse Split requires the affirmative vote of the holders of a majority of the outstanding shares of our common
stock entitled to be voted at the meeting. Specifically, we will need to receive favorable votes from the holders of at least 36,866,648
shares of our common stock for approval of the Reverse Split. Abstentions are not treated as votes cast, and therefore will have
the effect of a vote against this proposal. We understand that certain brokerage firms have elected not to vote even on “routine”
matters such as the Reverse Split without your voting instructions. If your brokerage firm has made this decision and you do not
provide voting instructions, your vote will not be cast and will have the effect of a vote against the Reverse Split. Accordingly,
we urge you to provide instructions to your bank, brokerage firm, or other nominee by voting your proxy.
Broker Non-Votes
A “broker non-vote” occurs when a broker, bank,
or other holder of record holding shares for a beneficial owner does not vote on a particular proposal because that holder (i)
has not received instructions from the beneficial owner and (ii) does not have discretionary voting power for that particular item.
If you are a beneficial owner and you do not give instructions
to your broker, bank, or other holder of record, such holder of record will be entitled to vote the shares with respect to “routine”
items but will not be permitted to vote the shares with respect to “non-routine” items (those shares are treated as
“broker non-votes”). If you are a beneficial owner, your broker, bank, or other holder of record generally has discretion
to vote your shares on the proposal to approve the Reverse Split. However, we understand that certain brokerage firms have elected
not to vote even on “routine” matters such as the Reverse Split without your voting instructions. Accordingly, we urge
you to provide instructions to your bank, brokerage firm, or other nominee by voting your proxy to ensure that your shares will
be voted in accordance with your wishes at the special meeting.
Revocability of Proxies
You may revoke any proxy given in response to this solicitation
by notifying us in writing at the above address, attention: Corporate Secretary by 5 p.m. on February 28, 2020, or by voting a
subsequent proxy or in person at the annual meeting. Attendance by a stockholder at the meeting does not alone serve to revoke
a proxy. If a broker, trust, bank or other nominee holds your shares, please follow the instructions you receive from that person.
Delivery of Documents to Stockholders Sharing an Address
The SEC has adopted rules that permit companies to deliver a
single Notice of Internet Availability or a single copy of proxy materials to multiple stockholders sharing an address unless a
company has received contrary instructions from one or more of the stockholders at that address. Upon request, we will promptly
deliver a separate Notice of Internet Availability or separate copy of proxy materials to one or more stockholders at a shared
address to which a single Notice of Internet Availability or a single copy of proxy materials was delivered. Stockholders may request
a separate Notice of Internet Availability or separate copy of proxy materials by contacting our Corporate Controller either by
calling 1-650-989-2268 or by mailing a request to 400 Oyster Point Boulevard, Suite 505, South San Francisco, California 94080.
Stockholders at a shared address who receive multiple Notices of Internet Availability or multiple copies of proxy materials may
request to receive a single Notice of Internet Availability or a single copy of proxy materials in the future in the same manner
as described above.
***
If you have any questions or require any assistance with voting
your shares, please contact our proxy solicitor at the numbers listed below:
[Proxy Solicitor]
Stockholders call toll free:
Banks and brokers call collect:
APPROVAL OF THE REVERSE SPLIT
General
Our Board has approved, subject to stockholder approval, an
amendment to our certificate of incorporation to effect a Reverse Split of our issued and outstanding common stock within a range
from 1-for-4 to 1-for-10. The primary reasons for the Reverse Split are (i) to enable us to regain compliance with the $1.00 minimum
bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) and (ii) to provide additional shares for issuance in connection
with future financings and other business purposes. Our common stock will be delisted from Nasdaq if we do not receive stockholder
approval to effect the Reverse Split.
The form of the proposed amendment to our certificate of incorporation
to effect the Reverse Split will be substantially as set forth on Annex B (subject to any changes required by applicable law).
If approved by our stockholders, the Reverse Split proposal would permit (but not require) our Board to effect the Reverse Split
at any time prior to March 17, 2020 by a ratio of not less than 1-for-4 and not more than 1-for-10, with the exact ratio to be
set within this range as determined by our Board in its sole discretion. We believe that enabling our Board to set the ratio within
the stated range will provide us with the flexibility to implement the Reverse Split in a manner designed to maximize the anticipated
benefits for our stockholders. In determining a ratio, if any, following the receipt of stockholder approval, our Board may consider,
among other things, factors such as:
|
·
|
Nasdaq’s minimum bid price requirement;
|
|
|
|
|
·
|
the historical trading price and trading volume of our common stock;
|
|
|
|
|
·
|
the number of shares of our common stock outstanding;
|
|
|
|
|
·
|
the then-prevailing trading price and trading volume of our common stock and the anticipated impact of the Reverse Split on
the trading market for our common stock; and
|
|
|
|
|
·
|
prevailing general market and economic conditions.
|
The amendment to our certificate of incorporation to effect
the Reverse Split will include only the Reverse Split ratio determined by our Board to be in the best interests of our stockholders
and all of the other proposed amendments at different ratios will be abandoned.
Unless specifically stated, share amounts and share prices have
not been adjusted in this proxy statement to give effect to the proposed Reverse Split.
Reasons for the Reverse Split
Our common stock is currently quoted on Nasdaq Capital Market.
On September 19, 2019, we received a letter from the Listing Qualifications staff of Nasdaq notifying us that we were no longer
in compliance with the minimum bid price requirement for continued listing on Nasdaq. Nasdaq Listing Rule 5550(a)(2) requires listed
companies to maintain a minimum bid price of $1.00 per share. The letter noted that the bid price of our common stock was below
$1.00 for the 30-day period ending September 18, 2019. The notification letter advised us that we had 180 days, or until March
17, 2020, to regain compliance with the minimum bid price requirement by having a closing bid price of at least $1.00 per share
for a minimum of 10 consecutive business days. Our goal, through the Reverse Split, is to increase our stock price so that it enables
us to satisfy the minimum bid price requirement within the timeframe allotted by Nasdaq.
On the Record Date, after giving effect to shares that are reserved
for issuance pursuant to outstanding options, warrants, convertible notes and our 2015 Omnibus Equity Incentive Plan (the “2015
Plan”), we had only 5,114,400 shares of common stock available for issuance under our current certificate of incorporation.
In addition, on January 9, 2020, we completed a private placement of warrants to purchase 8,700,000 shares of common stock (the
“Placement Warrants”) for which no shares have been reserved and, therefore, the Placement Warrants will not be exercisable
unless and until we have additional shares available for issuance. In the future, we will need to raise additional funds in order
to complete the Phase 4 clinical trials required by the FDA as part of its approval of Probuphine, as well as to fund our research
and development programs. Because the Reverse Split will result in a reduction in the total share count of our outstanding securities,
including those underlying our equity incentive plans, but will not affect the total number of shares of common stock authorized
by the certificate of incorporation, the Reverse Split will result in an increase in the number of shares available for issuance
upon exercise of the Placement Warrants and in connection with future financing efforts, as well as any potential business or product
acquisitions that we might wish to pursue in the future. See the discussion under “Effect on Authorized but Unissued Shares
of Common Stock” for a more detailed discussion.
Certain Risks Associated with the Reverse Split
There are numerous factors and contingencies that could affect
our stock price following the proposed Reverse Split, including the status of the market for our stock at the time, our reported
results of operations in future periods, and general economic, market and industry conditions. Accordingly, the market price of
our common stock may not be sustainable at the direct arithmetic result of the Reverse Split. If the market price of our common
stock declines after the Reverse Split, our total market capitalization (the aggregate value of all of our outstanding common stock
at the then existing market price) after the split will be lower than before the split.
The Reverse Split may result in some stockholders owning “odd
lots” of less than 100 shares of our common stock on a post-split basis. Odd lots may be more difficult to sell, or require
greater transaction costs per share to sell, than shares in “round lots” of even multiples of 100 shares.
Effect on Holders of Outstanding Common Stock
Depending on the ratio for the Reverse Split determined by our
Board, a minimum of four and a maximum of 10 shares of existing common stock (“Old Shares”) will be combined into one
new share of common stock (“New Shares”). The table below shows, as of the Record Date, the approximate number of outstanding
New Shares that would result from the listed hypothetical Reverse Split ratios (without giving effect to the treatment of fractional
shares):
Reverse Split Ratio
|
Approximate Number of New Shares Following the Reverse Split
|
1-for-4
|
18,433,324
|
1-for-6
|
12,288,883
|
1-for-8
|
9,216,662
|
1-for-10
|
7,373,330
|
The Reverse Split will affect all holders of our common stock
uniformly and will not affect any stockholder’s percentage ownership interest in Titan, except that as described below in
“Fractional Shares,” record holders of Old Shares otherwise entitled to a fractional share as a result of the Reverse
Split will be rounded up to the next whole number.
After the effective date of the Reverse Split (the “Effective
Time”), our common stock will have new Committee on Uniform Securities Identification Procedures (“CUSIP”) numbers,
which is a number used to identify our equity securities, and stock certificates with the older CUSIP numbers will need to be exchanged
for stock certificates with the new CUSIP numbers by following the procedures described below. After the Reverse Split, we will
continue to be subject to the periodic reporting and other requirements of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). Our common stock will continue to be listed on Nasdaq under the symbol “TTNP”, subject
to our continued compliance with Nasdaq’s requirements for continued listing, including the minimum bid price and minimum
stockholders’ equity requirements.
Holders of Common Stock (i.e. stockholders who hold in street
name)
Upon the implementation of the Reverse Split, we intend to treat
shares held by stockholders through a bank, broker, custodian or other nominee in the same manner as registered stockholders whose
shares are registered in their names. Banks, brokers, custodians or other nominees will be instructed to effect the Reverse Split
for their beneficial holders holding our common stock in street name. However, these banks, brokers, custodians or other nominees
may have different procedures than registered stockholders for processing the Reverse Split. Stockholders who hold shares of our
common stock with a bank, broker, custodian or other nominee and who have any questions in this regard are encouraged to contact
their banks, brokers, custodians or other nominees.
Registered “Book-Entry” Holders of Common Stock
(i.e. stockholders that are registered on the transfer agent’s books and records but do not hold stock certificates)
Certain of our registered holders of common stock may hold some
or all of their shares electronically in book-entry form with the transfer agent. These stockholders do not have stock certificates
evidencing their ownership of the common stock. They are, however, provided with a statement reflecting the number of shares registered
in their accounts.
Stockholders who hold shares electronically in book-entry form
with the transfer agent will not need to take action (the exchange will be automatic) to receive whole shares of post-Reverse Split
common stock, subject to adjustment for treatment of fractional shares.
Holders of Certificated Shares of Common Stock
Stockholders holding shares of our common stock in certificated
form will be sent a transmittal letter by our transfer agent after the Effective Time. The letter of transmittal will contain instructions
on how a stockholder should surrender his, her or its certificate(s) representing shares of our common stock (the “Old Certificates”)
to the transfer agent in exchange for certificates representing the appropriate number of whole shares of post-Reverse Split common
stock (the “New Certificates”). No New Certificates will be issued to a stockholder until such Stockholder has surrendered
all Old Certificates, together with a properly completed and executed letter of transmittal, to the transfer agent. No stockholder
will be required to pay a transfer or other fee to exchange his, her or its Old Certificates. Stockholders will then receive a
New Certificate(s) representing the number of whole shares of common stock that they are entitled to as a result of the Reverse
Split, subject to the treatment of fractional shares described below. Until surrendered, we will deem outstanding Old Certificates
held by stockholders to be cancelled and only to represent the number of whole shares of post-Reverse Split common stock to which
these stockholders are entitled, subject to the treatment of fractional shares. Any Old Certificates submitted for exchange, whether
because of a sale, transfer or other disposition of stock, will automatically be exchanged for New Certificates. If an Old Certificate
has a restrictive legend on the back of the Old Certificate(s), the New Certificate will be issued with the same restrictive legends
that are on the back of the Old Certificate(s).
STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND
SHOULD NOT SUBMIT ANY STOCK CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Fractional Shares
No scrip or fractional share certificates will be issued in
connection with the Reverse Split. Stockholders who otherwise would be entitled to receive fractional shares because they hold
a number of Old Shares not evenly divisible will be entitled, upon surrender of certificate(s) representing these shares, to a
number of New Shares rounded up to the nearest whole number. The ownership of a fractional interest will not give the stockholder
any voting, dividend or other rights except to have his or her fractional interest rounded up to the nearest whole number when
the New Shares are issued.
Effect on Options, Warrants, Convertible Notes and Shares
Reserved for Issuance under Equity Compensation Plans
All outstanding options and warrants to purchase shares of our
common stock as well as the number of shares issuable upon conversion of outstanding convertible notes and those available for
issuance under the 2015 Plan will be adjusted proportionately as a result of any Reverse Split. Holders of options, warrants and
convertible notes, who upon exercise of their options or warrants or conversion of their notes would otherwise be entitled to receive
fractional shares, because they hold options which upon exercise would result in a number of shares of common stock not evenly
divisible by the Reverse Split ratio determined by the Board, will receive a number of shares of common stock rounded up to the
nearest whole number.
The table below shows, as of the Record Date, the approximate
number of shares of common stock underlying options and warrants (including the Placement Warrants) that would result from the
listed hypothetical Reverse Split ratios (without giving effect to the treatment of fractional shares):
Reverse Split Ratio
|
Approximate Number of Underlying Shares Following the Reverse Split
|
1-for-4
|
11,393,607
|
1-for-6
|
7,595,738
|
1-for-8
|
5,696,804
|
1-for-10
|
4,557,443
|
In addition, the number of shares of common stock authorized
for issuance under the 2015 Plan will be reduced based on the Reverse Split ratio. Because we have previously undertaken not to
issue additional shares under our prior equity incentive plans, the Reverse Split will not have any impact on the availability
of shares under such plans.
Effect on Authorized but Unissued Shares of Common Stock
Currently, we are authorized to issue up to a total of 125,000,000
shares of common stock. On the Record Date, there were outstanding: (i) 73,733,294 shares of our common stock, (ii) warrants (excluding
the Placement Warrants”) to purchase 40,963,267 shares of our common stock issued with a weighted average exercise price
of $0.43 per share, (iii) options to purchase 1,188,388 shares of our common stock with a weighted average exercise price of $6.24
per share and (iv) debt convertible into 3,422,777 shares of our common stock. This leaves only 5,692,279 shares of our authorized
common stock available for future issuance, both for equity financings and equity compensation.
Implementation of the Reverse Split would not change the total
authorized number of shares of common stock. However, the reduction in the issued and outstanding shares, and the corresponding
adjustment of shares issuable pursuant to warrants and options, which would be decreased by a factor of between four and 10, would
provide more authorized shares available for future issuance. It would also enable us to reserve the shares of common stock underlying
the Placement Warrants. Because holders of our common stock have no preemptive rights to purchase or subscribe for any unissued
stock of our company, the issuance of additional shares in the future of authorized common stock that will become newly available
as a result of the implementation of the Reverse Split will reduce the current stockholders’ percentage ownership interest
in the total outstanding shares of common stock.
We expect to issue additional equity capital in the future to
support Probuphine commercial operations, fund the required Phase IV clinical programs and further our research and development
programs. The additional available shares that the proposed Reverse Split will provide will allow us to pursue any such financing.
However, there are no specific plans, arrangements, agreements or understandings regarding the issuance of any of the authorized
shares that will become available upon completion of the Reverse Split.
Accounting Matters
The amendment to our certificate of incorporation will not change
the par value of our common stock, which will remain at $0.001. As a result, on the effective date of the Reverse Split, the stated
capital on our balance sheet attributable to our common stock will be reduced in proportion to the Reverse Split ratio (for example,
in a one-for-5 Reverse Split, the stated capital attributable to our common stock will be reduced to one-fifth of its existing
amount) and the additional paid-in capital account shall be credited with the amount by which the stated capital is reduced. The
per share net income or loss and net book value of our common stock will also be increased because there will be fewer shares outstanding.
The Reverse Split will not affect total stockholders’ equity on our balance sheet.
THE BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL
OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO EFFECT THE REVERSE SPLIT.