Mr. Chien Huang reports

TITAN MEDICAL REPORTS FISCAL YEAR 2023 RESULTS

Titan Medical Inc. has released financial results for the fiscal year ended Dec. 31, 2023.

Recent activities:

• On Aug. 14, 2023, the company announced the appointment of Dr. Daniel O'Brien, MD, MBA, PhD, to its board of directors.
• On Aug. 21, 2023, the company announced a licensing agreement with Auris Health Inc., a Johnson & Johnson medtech company.
• On Oct. 18, 2023, the company announced it had changed its auditor from BDO Canada LLP to MNP LLP.
• On March 18, 2024, the company announced it has entered into a definitive amalgamation agreement with Conavi Medical Inc. to combine the companies in an all-stock transaction. Under the terms of the definitive agreement, a newly incorporated and wholly owned subsidiary of the company and Conavi will amalgamate, and the shareholders of Conavi will be issued common shares of the company based on an exchange ratio to be determined pursuant to the definitive agreement. Titan Medical is focused on the execution of the transaction, but the transaction remains subject to a number of conditions precedent set forth in the definitive agreement, including the approval of the company shareholders and the Conavi shareholders, and the approval of the TSX Venture Exchange for the listing of the common shares following closing of the transaction.

Financial highlights

As of Dec. 31, 2023, Titan Medical had cash of $7.5-million, compared with $3.3-million on Dec. 31, 2022. Working capital improved to $5.5-million as at Dec. 31, 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 $5.7-million from Dec. 31, 2022.

Revenue was $17.6-million for the year ended Dec. 31, 2023, compared with nil for the year ended Dec. 31, 2022. In the current period, the company recognized $15.5-million in revenue from the asset purchase and non-exclusive licence agreement with Medtronic and the Intuitive licence agreement, as the agreements allow both Medtronic and Intuitive to use certain of 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 under a development and preclinical supply agreement.

Research and development expenses were $300,000 for the year ended Dec. 31, 2023, compared with $33.0-million for the year ended Dec. 31, 2022. The decrease in R&D expenses is related to the company's cost-cutting measures that significantly reduced R&D expenses. In the comparative period, being the year ended Dec. 31, 2022, R&D expenses were related to the development of the Enos system and transferring key components of the Enos system to manufacturing.

General and administrative expenses were $8.4-million for the year ended Dec. 31, 2023, compared with $11.8-million for the year ended Dec. 31, 2022, but for severance payments of $1.1-million incurred in connection with the termination of employees as part of the company's business reduction plan and $900,000 of transactional bonus related to the licensing agreement, G&A would have been $6.4-million for the year ended Dec. 31, 2023, and cost-cutting measures would have reduced the G&A by $5.4-million compared with the previous year.

The company's 2023 audited consolidated financial statements and management's discussion and analysis are available at SEDAR+.

About Titan Medical Inc.

Titan Medical (Toronto Stock Exchange: TMD and OTC: TMDIF), a medical technology company incorporated under the Business Corporations Act (Ontario) and headquartered in Toronto, Ont., has developed an expansive patent portfolio related to the enhancement of robotic-assisted surgery (RAS), including through a single access point, and is currently focused on evaluating new opportunities to further develop and license its intellectual property while pursuing the completion of its agreed-upon merger with Conavi.

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