Toronto-based Titan’s actions stem from a November announcement of a strategic review, including the exploration of a sale. A week later, the surgical robot maker implemented cost-cutting measures that included the furloughing of 40 employees.
Last month, the company issued an update that it met with strategic buyers and investors at the J.P. Morgan Healthcare Conference.
A week ago, Titan said its board determined to prioritize the sale of all or a portion of its assets. That includes its IP portfolio of more than 235 patents and patent applications. It added further cost-cutting measures that included a layoff of 48 employees at its Chapel Hill-based subsidiary. Those layoffs included all employees furloughed in December.
The layoffs left Titan with 18 remaining employees. Due to working capital limitations, Titan halted all expenditures related to the development of its Enos surgical robot. That included work on its FDA investigational device exemption (IDE) filing.
Along with these decisions, the company said Heather Knight resigned as a member of its board on Feb. 7. Titan remains open to all strategic options.
“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.”
Titan enforces more layoffs
Six days after the 48-employee cut, Titan today announced four senior layoffs. Each individual remains available to assist the company as independent consultants, Titan said.
Tammy Carrea, VP of quality and regulatory affairs, departed, along with Kristen Galfetti, VP of investor relations and corporate communications. So, too, did Eric Heinz, VP of market and corporate development, and Chris Seibert, VP of upstream marketing.
“I would like to thank Tammy, Kristen, Eric and Chris for their contributions to Titan Medical and their continued professionalism,” Vance said. “This was an extremely difficult decision, and I am grateful that each of these talented individuals will continue to be available in consulting roles to assist the company during the strategic review process.”
Update on Titan’s Nasdaq listing
In addition to serving on the board, Knight served on Titan’s audit committee. Following her resignation, the company no longer complies with Nasdaq’s audit committee requirement. Titan’s audit committee now only consists of two members who both serve as independent directors. Nasdaq mandates the committee must feature at least three members, all of whom are independent.
The market provided Titan a cure period to regain compliance. This could go through the company’s next annual shareholders’ meeting or Feb. 7, 2024. If the next annual shareholders’ meeting is held before Aug. 7, 2023, Titan must comply no later than that day.
While the company’s efforts remain on its asset sales, it has a long history of troubles with Nasdaq listing requirements.
At the end of December 2022, Titan received notification of potential delisting from the Nasdaq market. The Nasdaq Listing Qualifications Staff notified the company of its continued non-compliance with the $1 minimum bid price requirement. Based on this non-compliance (as of Dec. 26, 2022), Nasdaq may delist Titan securities unless the surgical robotics company requests a hearing.
Titan Medical underwent the same process in 2020. Nasdaq sent the company a delisting determination letter in May of that year.
In June of this year, Titan received an additional 180 days to regain compliance with listing requirements. That extension period ended on Dec. 26.
Shares of TMDI dropped by 20% to approximately 15¢ apiece in the late afternoon today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — rose 10.5%.