Form 8-K - Current report

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report: September 1, 2023

(Date of earliest event reported)

 

TITAN PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-13341		94-3171940
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

400 Oyster Point Blvd., Suite 505, South San Francisco, CA 94080

(Address of principal executive offices, including zip code)

 

650-244-4990

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		TTNP		Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

Asset Purchase Agreement

 

On September 1, 2023 (the “Closing Date”), Titan Pharmaceuticals, Inc. (the “Titan” or the “Company”) closed on the previously announced sale of certain ProNeura assets including Titan’s portfolio of drug addiction products, in addition to other early development programs based on the ProNeura drug delivery technology (the “ProNeura Assets”). As previously reported by the Company, on July 26, 2023, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Fedson, Inc., a Delaware corporation (“Fedson”) for the sale of the ProNeura Assets. The Company’s addiction portfolio consists of the Probuphine and Nalmefene implant programs. The ProNeura Assets constituted only a portion of Titan’s assets. On August 25, 2023, the Company entered into an Amendment and Extension Agreement (the “Amendment”) to the Asset Purchase Agreement, pursuant to which Fedson agreed to purchase the ProNeura Assets from the Company for a purchase price of $2 million, consisting of (i) $500,000 in readily available funds, to be paid in full on the Closing Date (the “Closing Cash”), (ii) $500,000 in the form of a promissory note due and payable on October 1, 2023 (the “Cash Note”) and (iii) $1,000,000 in the form of a promissory note due and payable on January 1, 2024 (the “Escrow Note”). On the Closing Date, Fedson delivered to the Company a written guaranty by a principal of Fedson of all of Fedson’s obligations under both the Cash Note and Escrow Note.

 

The foregoing description of the Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Asset Purchase Agreement, which was filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on July 28, 2023. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amendment, which was filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on August 30, 2023.

 

Item 2.01. Completion of Acquisition or Disposition of Assets

 

The information set forth above under Item 1.01 of this Current Report on Form 8-K is hereby incorporated into this Item 2.01 by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(b) Pro Forma Financial Information.

 

The following unaudited pro forma condensed financial statements of the Company are attached hereto as Exhibit 99.1 and incorporated herein by reference:

 

	●	Unaudited pro forma condensed balance sheet as of June 30, 2023;
	●	Unaudited pro forma condensed statements of operations for the six months ended June 30, 2023 and the year ended December 31, 2022; and
	●	Notes to the unaudited pro forma condensed financial information.

 

(d) Exhibits

 

Exhibit No.		Description
99.1		Unaudited Pro Forma Condensed Financial Statements
104		Cover Page Interactive Data (embedded within the Inline XBRL document).

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	TITAN PHARMACEUTICALS, INC.
	By:	/s/ Katherine Beebe DeVarney, Ph.D.
		Katherine Beebe DeVarney, Ph.D. President and Chief Operating Officer

 

Date:

September 8, 2023

 

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Exhibit 99.1

 

TITAN PHARMACEUTICALS, INC.

UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION

 

On September 1, 2023, Titan Pharmaceuticals, Inc. (“Titan” or the “Company”) completed the sale of certain ProNeura Assets, for approximately $2.0 million, comprised of approximately $0.5 million of cash proceeds, the Cash Note for $0.5 million and the Escrow Note for $1.0 million.

 

The sale constitutes a significant disposition for the purposes of Item 2.01 of Current Report on Form 8-K. The unaudited pro forma condensed balance sheet as of June 30, 2023 gives effect to the transaction as if it had occurred on June 30, 2023. The transaction accounting adjustments for the disposition consist of those necessary to account for the disposition.  In addition, we have included unaudited pro forma condensed statements of operations for the six months ended June 30, 2023 and the year ended December 31, 2022.

 

The unaudited pro forma condensed balance sheet has been derived from the historical consolidated balance sheet prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and is presented based on information currently available. The unaudited pro forma condensed balance sheet is intended for informational purposes only and is not intended to represent the Company’s financial position had the disposition and related events occurred on the date indicated. Our actual financial condition may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

 

 

 

 

TITAN PHARMACEUTICALS, INC.

 

PRO FORMA CONDENSED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share data)

 

		June 30, 2023				Transfer Accounting				June 30, 2023
			Historical				Adjustments				Pro forma
Assets
Current assets:
Cash and cash equivalents		$	105			$	500			$	605
Restricted cash			17				-				17
Receivables			9				-				9
Inventory			-				-				-
Prepaid expenses and other current assets			229				-				229
Discontinued operations - current assets			32				-				32
Notes receivable, current			-				1,500				1,500
Current assets held for sale			106				(106	)			-
Total current assets			498				1,894				2,392
Property and equipment, net			9				-				9
Other assets			48				-				48
Operating lease right-of-use assets, net			124				-				124
Noncurrent assets held for sale			133				(133	)			-
Total assets		$	812			$	1,761			$	2,573
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable		$	597			$	-			$	597
Accrued clinical trials expenses			3				-				3
Other accrued liabilities			676				74				750
Operating lease liability, current			128				-				128
Deferred grant revenue			16				-				16
Discontinued operations – current liabilities			190				-				190
Current liabilities held for sale			236				(236	)			-
Total current liabilities			1,846				(162	)			1,684
Operating lease liability, noncurrent			-				-				-
Total liabilities			1,846				(162	)			1,684
Commitments and contingencies (Note 6)
Stockholders’ equity (deficit):
Common stock, at amounts paid-in, $0.001 par value per share; 225,000,000 shares authorized, 15,016,295 shares issued and outstanding at June 30, 2023 and December 31, 2022.			15				-				15
Additional paid-in capital			388,473				-				388,473
Accumulated deficit			(389,522	)			1,923				(387,599	)
Total stockholders’ equity (deficit)			(1,034	)			1,923				889
Total liabilities and stockholders’ equity (deficit)		$	812			$	1,761			$	2,573

 

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TITAN PHARMACEUTICALS, INC.

 

PRO FORMA CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share amount)

(unaudited)

 

		Six Months Ended								Six Months Ended
		June 30, 2023				Transaction Accounting				June 30, 2023
		Historical				Adjustments				Pro forma
Revenues:
License revenue		$	1			$	-			$	1
Grant revenue			180				-				180
Total revenues			181				-				181
Operating expenses:
Research and development			1,003				-				1,003
General and administrative			2,463				-				2,463
Total operating expenses			3,466				-				3,466
Loss from operations			(3,285	)			-				(3,285	)
Other income (expense):
Interest income			29				-				29
Other expense, net			(5	)			-				(5	)
Gain on sale of assets			-				1,923				1,923
Other income (expense), net			24				1,923				1,947
Net loss		$	(3,261	)		$	1,923			$	(1,338	)
Basic and diluted net loss per common share		$	(0.22	)		$	0.13			$	(0.09	)
Weighted average shares used in computing basic and diluted net loss per common share			15,016				15,016				15,016

 

 

3

 

 

TITAN PHARMACEUTICALS, INC.

 

PRO FORMA CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share amount)

(unaudited)

 

		Year Ended								Year Ended
		December 31, 2022				Transaction Accounting				December 31, 2022
		Historical				Adjustments				Pro forma
Revenues:
License revenue		$	60			$	-			$	60
Grant revenue			497				-				497
Total revenues			557				-				557
Operating expenses:
Research and development			4,758				-				4,758
General and administrative			6,034				-				6,034
Total operating expenses			10,792				-				10,792
Loss from operations			(10,235	)			-				(10,235	)
Other income (expense):
Interest income			53				-				53
Other expense, net			(24	)			-				(24	)
Gain on sale of assets			-				1,865				1,865
Other income (expense), net			29				1,865				1,894
Net loss		$	(10,206	)		$	1,865			$	(8,341	)
Basic and diluted net loss per common share		$	(0.76	)		$	0.14			$	(0.62	)
Weighted average shares used in computing basic and diluted net loss per common share			13,434				13,434				13,434

 

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TITAN PHARMACEUTICALS, INC.

NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS

(unaudited)

 

Note 1. Basis of Presentation

 

The Company's historical consolidated balance sheet has been adjusted in the preparation of the unaudited pro forma condensed balance sheet to reflect only the transaction accounting adjustments related to the sale of the ProNeura Assets. The pro forma balance sheet as of June 30, 2023 gives effect to the disposition as if it were completed on June 30, 2023.

 

Note 2. Pro forma Adjustments

 

The following adjustments have been reflected in the unaudited pro forma condensed combined financial statements:

 

(a) Pro forma adjustment represents a total purchase price of approximately $2.0 million comprised of approximately $0.5 million estimated cash proceeds from the sale at the closing of the transaction, the $0.5 million Cash Note due on October 1, 2023 and the $1.0 million Escrow Note due on January 1, 2024.

 

(b) Pro forma adjustment reflects closing transaction costs of approximately $74,000.

 

(c) Pro forma adjustments reflect the elimination of assets and liabilities attributable to the ProNeura Assets included in the sale as if it had occurred on June 30, 2023.

 

(d) Pro forma adjustment reflects an additional portion related to the estimated pre-tax gain on the sale of approximately $1.9 million, which was calculated as follows:

 

		(in thousands)
Estimated consideration of the disposition, net of transaction costs (1)		$	1,926
Assets of the businesses			(239	)
Liabilities of the businesses			236
Pre-tax gain on the disposition		$	1,923

 

(1) Reflects the estimated net cash consideration received, inclusive of items identified in (a) and other customary adjustments identified in (b), as if the transaction had closed on June 30, 2023.

 

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Cover	Sep. 01, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 01, 2023
Entity File Number	001-13341
Entity Registrant Name	TITAN PHARMACEUTICALS, INC.
Entity Central Index Key	0000910267
Entity Tax Identification Number	94-3171940
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	400 Oyster Point Blvd.
Entity Address, Address Line Two	Suite 505
Entity Address, City or Town	South San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94080
City Area Code	650
Local Phone Number	244-4990
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	TTNP
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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