Titan Medical reports second quarter 2020 financial results

Titan Medical Inc., a medical device company focused on the design and development of single-port robotic surgical technologies, announces financial results for the three and six months ended June 30, 2020.

All financial results are prepared in accordance with International Accounting Standards (“IAS”) 34 on a basis consistent with the Company’s 2019 annual financial statements and are reported in U.S. dollars, unless otherwise stated. The unaudited condensed interim consolidated financial statements and management’s discussion and analysis for the period ended June 30, 2020.

David McNally, President and CEO of Titan, said, “The most significant event of the first half of 2020 was the execution of a license agreement, a development and license agreement and a senior secured note with Medtronic plc, which we announced on June 4. We are honored to have secured this relationship based on the value demonstrated in our intellectual property and technology, and the confidence in our technical know-how in single-port robotic surgery to develop, over the course of the next 12 months, technologies for the mutual benefit of each company.”

Mr. McNally continued, “Following the announcement of the agreements with Medtronic, we received a $10 million license payment in accordance with the license agreement. We then secured and announced the closing of an $18 million registered direct offering on June 11, 2020, which has allowed us to resume development of instruments for our single-port robotic surgical system, and satisfies one of the milestones under the development and licensing agreement.”

Mr. McNally concluded, “During the first half of 2020, we also reached agreement on a payment plan with one of our product development suppliers and resolved pending litigation with another service provider. We are now focused on staffing our newly created U.S. affiliate’s new facility in Chapel Hill, North Carolina in order to execute on the development milestones associated with our single-port surgical system, while continuing progress toward those associated with the development and license agreement.”

Business highlights and achievements for the first six months of 2020 and recent weeks include:

• On January 6, the Company and Cambridge Design Partnership Ltd. announced an expanded engagement for robotic instrument development.
• On January 27, the Company announced that it had received ISO 13485:2003 Certification from a European Notified Body.
• On March 27, the Company announced the closing of a registered direct offering priced at-the-market under Nasdaq rules, resulting in total gross proceeds of approximately $1.2 million.
• On April 30, the Company announced the agreement of a payment plan for outstanding amounts and resumption of development services with one of its product development suppliers.
• On May 6, the Company announced the closing of a registered direct offering priced at-the-market under Nasdaq rules, resulting in total gross proceeds of approximately $2.0 million.
• On June 4, the Company, announced a development and license agreement with Medtronic to further the development of robotic-assisted surgical technologies, as well as a separate license agreement with Medtronic in respect of certain intellectual property of the Company.
• On June 8, the Company announced a registered direct offering priced at-the-market under Nasdaq rules, resulting in total gross proceeds of approximately $18 million.
• On June 9, the Company announced the settlement of pending litigation with Naglreiter Consulting, LLC.
• On June 11, the Company announced the appointment of Phillip L. McStotts to the Company’s Board of Directors and its Audit Committee.
• On June 15, the Company announced that it established Titan Medical USA Inc. as a wholly owned U.S. subsidiary, which is based in Chapel Hill, North Carolina at a facility that will initially be used for research and development activities.
• On June 25, the Company announced that it had promoted intellectual property strategy leader Jasminder Brar to Vice President of Legal, IP and Strategic Initiatives, and General Counsel.
• On August 1, David McNally, President and CEO of Titan Medical, presented at the Society of Robotic Surgery (SRS) 2020 World Robotic Symposium in the virtual plenary session titled “Future Robotic Platforms”.
• On July 30, the Company announced that it had completed design enhancements to instruments compatible for use with its single-port robotic surgical system.

Financial results for the three and six months ended June 30, 2020 include:

• Research and development (“R&D”) expenses for the three and six months ended June 30, 2020 were $121,463 and $167,582, respectively, compared with R&D expenses of 18,360,674 and $32,769,286, respectively for the corresponding prior-year periods, as the Company suspended product development during the first half of 2020 due to insufficiency of available capital.
• Net and comprehensive losses for the three and six months ended June 30, 2020 were 1,143,199 and $1,911,242, compared with a net and comprehensive losses of 14,472,866 and $42,755,746, for the three and six months ended June 30, 2019, respectively. In addition to reduced R&D expenses, the results for both periods include recognition in June 2020 of $10 million in revenue from the license agreement with Medtronic, a gain on settlement of a supplier claim, and the impact of changes in the valuation of outstanding warrants.
• Cash and cash equivalents as of June 30, 2020 were $28,689,757, compared with cash and cash equivalents of $814,492 as of December 31, 2019. At June 30, 2020, current liabilities, excluding warrant liability were $8,471,270 compared with $11,433,967 as of December 31, 2019.
• At June 30, 2020, the Company had working capital of $21,746,851 compared to a working capital deficit of $9,684,525 at December 31, 2019.

-Business Wire