Conavi Medical Inc. entered into a letter of intent to acquire Titan Medical Inc. (TSX:TMD) in a reverse merger transaction on December 23, 2023. Conavi Medical Inc. entered into a definitive amalgamation agreement to acquire Titan Medical Inc. for $69.8 million in a reverse merger transaction on March 17, 2024. Under the terms of the Agreement, Titan will acquire all of the issued and outstanding shares of Conavi and in exchange Conavi shareholders will be issued common shares of Titan (the ?Combined Entity Shares?). The exchange ratio will be determined using the pre-money valuation of Conavi of $69,840,000 (minus the amounts of certain trade payables and Conavi?s transaction expenses). In connection with the transaction, Titan expects to delist its common shares from the Toronto Stock Exchange (the ?TSX?) and apply to have them listed instead on the TSX Venture Exchange (the ?TSXV?). Titan Medical Inc. will change its name to Conavi Medical Inc., or such other name as Conavi may determine and the Titan Board may approve. Under the terms of the Agreement, Titan will effect a consolidation of the Titan shares based on a ratio of pre-consolidation shares to post-consolidation shares to be mutually agreed upon. In case of termination of agreement, Conavi shall be entitled to a fee of CAD 350,000 ($0.26 million) while Titan shall be entitled to a fee of CAD 1,000,000 ($0.74 million). As a condition to the completion of the transaction, Conavi will complete a concurrent financing of subscription receipts for minimum gross proceeds of $15 million up to a maximum of $20 million. Concurrent with the completion of the transaction, all officers and certain directors of Titan will resign and be replaced by nominees and appointees put forth by Conavi.

The completion of the transaction is subject to the satisfaction of various conditions as are standard for a transaction of this nature, including, but not limited to the receipt of all requisite regulatory, TSX, and TSXV approvals and all government approvals, authorizations or consents; the absence of any material change or change in a material fact or a new material fact affecting Titan or Conavi; the approvals of both the Titan Shareholders and the Conavi shareholders; the completion of the Concurrent Financing for aggregate gross proceeds of at least $15,000,000; Titan shall have minimum net cash of at least $5 million immediately prior to closing the transaction; the TSX shall have approved the delisting of the Titan Shares and the TSX-V shall have approved the transaction and conditionally approved for listing the Titan Shares issuable pursuant to the transaction and the the key third party consents shall have been obtained. There can be no assurance that the transaction will be completed on the terms proposed above or at all. Concurrently with signing the agreement, the directors and officers of Conavi have agreed to support the proposed transaction and have either entered into or are expected to enter into lock-up agreements with Titan to vote in favour of the transaction at the special meeting of Conavi shareholders. All of the directors and officers of Titan have agreed to support the proposed transaction and have each entered into lock-up agreements with Conavi to vote in favour of the transaction at the Titan shareholder meeting. The Titan Board unanimously approved the entering into of the agreement. The Titan Board recommends that Titan shareholders vote in favour of the transaction. The Conavi Board has approved the transaction and unanimously determined to recommend approval of the transaction to the Conavi shareholders. The transaction is anticipated to close on or around July 15, 2024.

In connection with the transaction, Raymond James Ltd. is acting as financial advisor to Titan. Raymond James also provided a fairness opinion to the board of directors of Titan. Manoj Pundit of Borden Ladner Gervais LLP is acting as legal counsel to Titan. Matthew Atkey and Cheryl Reicin of Mintz LLP is acting as legal counsel to Conavi Medical.