Titan Medical provided an update on the previously announced review and evaluation of strategic alternatives.
As previously disclosed on November 30, 2022, Titan’s Board of Directors determined that it was in the best interests of the company and its stakeholders to undertake a review and evaluation of strategic alternatives and engaged Raymond James as the Company’s financial advisor.
At the direction of the Board, Titan’s financial advisor and members of Titan’s leadership team conducted a comprehensive outreach to over 40 potential counterparties, engaged in a number of management presentations and cooperated in confidential due diligence reviews by a subset of the potential counterparties. Unfortunately, none of the parties expressed an interest in acquiring the Company’s business and none chose to submit a proposal despite numerous extensions by the Company to the Board imposed process deadline to provide interested parties additional time and access. The specialized nature of the Company’s technology and the time to bring a product to market presented a smaller pool of potentially interested parties. A number of the parties cited the stage and focus of the Company’s technology development, the party’s financial circumstances, and a priority focus on the party’s own current business operations. Furthermore, the current economic environment and market conditions continue to provide significant challenges to potential acquirers, strategic partners and investors.
Accordingly, given the results and response of the strategic review process, the Board has determined to prioritize the sale of all or a portion of the Company’s assets, including its intellectual property portfolio of over 235 patents and patent applications. While the Company continues to seek alternatives, effective immediately, the company will initiate further cost-cutting measures including a layoff of 48 employees at the Chapel Hill operations of the Company’s wholly owned subsidiary, which includes all employees furloughed on December 6, 2022. With these cuts, the Company’s remaining 18 employees will focus on i) supporting a potential strategic transaction including a sale of the Company’s assets; ii) continuing to complete deliverables pursuant to certain contractual development and supply obligations; iii) maintaining its intellectual property portfolio; and iv) continuing corporate administrative and compliance obligations. Having regard to its working capital limitations, the company has halted all expenditures related to the development of its Enos™ single-access RAS system, including work on the investigational device exemption (IDE) filing with the U.S. Food and Drug Administration (FDA). The Company will consider further cost-cutting measures, including further reductions in workforce, as needed, based on determinations that it will make in consultation with its advisors and having regard to an ongoing strategic review process.
The company also reports that Heather Knight has resigned as a member of the Board of Directors effective February 7, 2023.
“We remain open to all strategic options, including the sale of all or a portion of the Company’s assets, in the best interests of the Company. While we truly appreciate the impact of these changes on our stakeholders including our employees, our strategic review process has led us to believe that interest remains in the Company’s assets and some of its technology. We are implementing cost reductions in an effort to preserve cash while maintaining the value of the Company’s technology and other key assets in considering any further strategic alternatives,” said Cary Vance, President and CEO of Titan Medical. “On behalf of the Board, I would like to thank Heather for her valuable input and thoughtful guidance as a Board member.”