Fallen Titan: Surgical robot maker delisted from Nasdaq amid mass layoffs, failed sell-off

After more than a year spent trying to coax its share price out of penny stock territory—to no avail—Titan Medical has been kicked off the Nasdaq.

The stock, which has traded under the ticker symbol “TMDI” since June 2018, will be removed from the stock exchange when the markets open Friday, March 10, Titan announced Thursday.

The delisting won’t be officially complete until two weeks after the trading halt, when Nasdaq will file a form with the U.S. Securities and Exchange Commission. During that period, Titan can appeal the delisting decision by submitting a written request for a hearing with the stock exchange and paying a fee of $15,000, though the company said Thursday that it “has not yet determined whether to file an appeal.”

The Nasdaq’s ruling doesn’t affect Titan’s position on the Toronto Stock Exchange. Additionally, as soon as it’s removed from the Nasdaq on Friday, Titan said it expects to be eligible to trade on the over-the-counter market in the U.S., an alternative to the major exchanges for companies that don’t meet eligibility requirements.

The delisting is a long time coming. Titan’s first warning came in the final days of 2021, after its stock had failed to rise above a trading price of $1 for 30 consecutive business days—in violation of the Nasdaq’s minimum requirements.

Titan was given six months to regain compliance; after it was unable to surpass the $1 mark by mid-2022, it secured an extension of another six months to come back into the Nasdaq’s good graces. Alas, its efforts remained unsuccessful: Throughout 2022, the stock didn’t rise above 60 cents per share until December—and even then, it remained stubbornly below the $1 threshold.

At the end of 2022, the Nasdaq moved forward with officially delisting the stock, but Titan was able to delay the removal until after a requested appeal. That hearing took place Feb. 16 and resulted in this week’s delisting decision.

Interestingly, during the appeal period at the start of this year, Titan’s share price was the highest it’s been since November 2021, even briefly crossing the $1 mark in the second week of January, though not for long enough to regain Nasdaq compliance. Since then, however, the stock has plummeted, reaching an all-time low of $0.13 per share in mid-February—and slipping back down toward that point Thursday after the delisting news broke.

The saga echoes another delisting drama that surrounded Titan in 2020 but that resulted in a much happier ending. Then, though Titan’s stock once again fell below the required $1 minimum for more than a month, prompting a Nasdaq warning in May of that year, it was able to regain full compliance by the end of the year.

Titan’s latest trading troubles came as the company’s finances dwindled throughout the last year—and the Nasdaq crackdown hasn’t been the only consequence.

In November, Titan began looking for “strategic alternatives” including a sale of some or all of the company’s assets, a merger or another “significant transaction” to help stem its unmanageable costs. That search came up short, it announced in February, though the company said it would keep trying to sell off its assets.

Alongside the strategic review, Titan took drastic cost-cutting measures: After furloughing 40 employees—about 60% of its workforce—in December, the devicemaker said in February that it would permanently lay off all of those workers and a handful of others. A few days later, Titan announced that four of its 10 executives had also been cut from the roster, though all four agreed to stay on as independent consultants throughout the ongoing strategic review.

At the start of all the turmoil, Titan had remained hopeful that it could continue development of its Enos single-access robotic surgery system even with a bare-bones staff. A November 2022 earnings report still suggested that the surgical robot could be ready for clinical trials in 2023, with the expected subsequent FDA clearance allowing for a commercial rollout as soon as early 2025.

But the company has since changed its tune: Alongside the layoffs announced last month, Titan said the remaining dozen or so employees would focus solely on readying its assets for a sale.