OR Nurse, TMDI will pay back the loan b/c they offered all of their IP as collateral (06.04.2020 Announcement and below). Don't know what to make of that negotiation. It's the BIGGEST and most lopsided "notice me" point of reference I've ever come across in loan/contracting terms and conditions. 3 oddities stick out in my mind (IMO) 1 - it wasn't necessary to put up all the IP for collateral, if the real reason for this loan was to settle the consultant lawsuit. I call BS. 2 - TMDI didn't need to take that loan, in that form under any circumstances. They could have gone just about anywhere to get $1.5M, or paid off the consultant lawsuit with part of the 18$ offering. And what would TMDI be getting if TMDI is paying for "intellectual property related expenses" to define the purpose of the loan.(as shown below) Since when does MDT handle TMDI IP expenses? 3 - If the loan is collateralized, then why not include an early payoff provision? This just doesn't make any sense, based on the form and structure unless TMDI was willing to take themselves off the game board for an extended, fixed period of time.
"To support development, Titan has received a senior secured loan of U.S. $1.5 million from Medtronic which was announced on April 29, 2020. The loan, which will be increased by an amount equal to certain legal, transaction and intellectual property related expenses pursuant to the definitive agreements, will be evidenced by an amended and restated promissory note, and will bear interest at the rate of 8% per annum. The loan is repayable on June 4, 2023, or upon the earlier completion of the last milestone under the development and license agreement or a Change of Control of Titan (as defined in the note). Until repayment of the loan, Medtronic may have one non-voting observer attend meetings of Titan’s Board of Directors. The loan will be secured by way of a security agreement entered into by Titan and pursuant to which Titan has granted a security interest in favor of Medtronic in all of Titan’s present and future property including all personal property, inventory, equipment and intellectual property."
The entire scenario and timeline for this loan is an iceberg. You see some of it, but not the important parts. Good question(s).
Good luck to all. Regards,BK
