Mr. Paul Cataford reports

TITAN MEDICAL REPORTS OPERATING AND FINANCIAL RESULTS FOR THE SECOND QUARTER 2023

Titan Medical Inc. today released its financial results for the three and six months ended June 30, 2023.

Recent activities:

• On May 26 and June 5, respectively, the company announced IP licensing transactions for total upfront payments of $15.5-million.
• On May 29, as a result of the strategic review process announced on Nov. 30, 2022, the board of directors of Titan approved a strategic transition in the company's business from the development and commercialization of robotic-assisted surgeries (RAS) technologies to evaluating new opportunities to further develop and licence its intellectual property. Titan continues to retain the rights necessary to develop and commercialize RAS technologies, should it choose to do so, including the two-instrument Enos single-access RAS system and, as announced on Jan. 9, 2023, a three-instrument single-access RAS system that builds on the Enos System technologies.
• On May 29, the company announced executive leadership team changes effective June 1, 2023, reflecting the company's strategic transition and to reduce operating expenses in the business, including the appointment of Paul Cataford as interim president and chief executive officer, and Chien Huang as chief financial officer.

Financial highlights

The company has improved its cash position with proceeds of $15.5-million from two IP licensing transactions announced on May 26 and June 5.

As of June 30, 2023, Titan had cash of $10.6-million, compared with $3.3-million on Dec. 31, 2022. Working capital improved to $7.4-million as at June 30, 2023, compared with a deficit of $3.9-million as at Dec. 31, 2022. In addition, the company has reduced its outstanding financial obligations to vendors by $4.1-million from the first quarter of 2023.

Revenue was $16.7-million for the three months ended June 30, 2023, compared with nil for the comparative period ended June 30, 2022. In the current period, the company recognized $15.0-million in revenue from the non-exclusive licensing agreement with Intuitive and Medtronic as the agreement allow both Intuitive and Medtronic to use the company's intellectual property as it exists when the licence is granted. The company also recognized $1.7-million of revenue for the completion of the final deliverables on the purchase order for Medtronic.

Research and development expenses were $400,000 for the three months ended June 30, 2023, compared with $9.5-million for the three months ended June 30, 2022. R&D expenses were $800,000 for the six months ended June 30, 2023, compared with $19.1-million for the six months ended June 30, 2022.

The decrease in R&D expenses is related to the strategic review. In the three and six months ended June 30, 2023, the company implemented cost-cutting measures that significantly reduced R&D expenses.

Generaland administrative expenses were $4.3-million for the three months ended June 30, 2023, compared with $3.1-million for the three months ended June 30, 2022. The increase in G&A expenses in the current period is related to a severance charge of $1.4-million, transaction costs of $1.5-million and increased stock-based compensation, offset by a reduction in costs due to cost-cutting measures.

The company's interim financial statements and management discussions and analysis (MD&A) are available at SEDAR+.

About Titan Medical Inc.

Titan Medical, a medical technology company headquartered in Toronto, Ont., has developed an expansive patent portfolio related to the enhancement of robotic-assisted surgery, including through a single access point, and is currently focused on evaluating new opportunities to further develop and license its intellectual property.

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