Titan Medical inks $24m private placement deal with Chinese distributor Longtai

Titan Medical (CVE:TMD) last week said it agreed to a private placement deal with a subsidiary of Chinese medical device distributor Ningbo Long Hengtai International Trade Co. that could wind up being worth more than $24 million.

Toronto-based Titan Medical said the deal with Canada-based Longtai Medical involves an initial, $4 million private placement priced at $1.23 per share, expected to close Nov. 15.

The agreement also includes the right to negotiate for an exclusive distribution deal for the “Sport” single-port orifice robot-assisted surgery platform Titan is developing. Longtai put up a $2 million deposit toward the distribution deal, which will be repaid if the talks don’t come to fruition in about 6 months, and agreed to another, $4 million private placement priced at the 5-day volume-weighted average price less a 12.5% discount.

If the deal is consummated, Titan will keep $1.4 million of the deposit and Longtai will make another $15 million investment, Titan said.

“The investment proceeds will be used for the establishment and support of a Titan operation office and facility in the Asia Pacific region; establishment of a training program for the Sport system; sales and marketing of the Sport system,” Titan said.

In July, Titan announced plans for a $45 million follow-on offering. The next month the company reported 2nd-quarter losses of $8.3 million for the 3 months ended June 30, up 21.7% from last year. Losses per share clocked in 8¢, up 1¢ from the same period in 2014. Research & development costs grew 200% to nearly $8.3 million.

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