Titan Medical Announces Filing of Amended and Restated Preliminary Prospectus and Withdrawal of Previously Published Milestones
Titan Medical Inc. 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.
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 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.
