Titan Medical Inc. Current report of foreign issuer pursuant to Rules 13a-16 and 15d-16 Amendments

Current report of foreign issuer pursuant to Rules 13a-16 and 15d-16 Amendments

SHARE CAPITAL (Tables)

SHARE CAPITAL (Tables)

3 Months Ended

Mar. 31, 2021

Titan has reserved and set aside up to 15% of the issued and outstanding Common Shares for the granting of stock options and restricted share units to eligible employees, officers, consultants, and advisors. The Company’s compensation plan includes the Share Unit Plan (the “SU Plan”), the Deferred Unit Plan (the “DSU Plan”), the Stock Option Plan (the “Option Plan”), collectively the “Compensation Plan”. At March 31, 2021, 10,216,272 Common Shares were remaining available to issue under the Compensation Plan.

Common shares outstanding			109,527,690
Available for issuance under the Compensation Plan	15	%	16,429,153
Reserved for current compensation grants			6,212,881
Remainder available to reserve for future grants			10,216,272

Summary of Stock-Based Compensation Expense

For the three months ended March 31, 2021, $769 of stock-based compensation expense was recorded (March 31, 2020: $229).

Options		427
RSUs		342
Stock-based compensation expense	$	769

Summary of Options and Restricted Share Units

Options and the terms of each issue over the three months ended March 31, 2021, are outlined below:

Grant date / recipient	Number of options	Exercise price	Vesting conditions	Contractual life of options
March 3, 2021, options A	1,590,000	$2.21	Options vest as to ¼ of the total number of options granted on the first anniversary of the grant date, and monthly for the remaining 36 months	7 years
March 3, 2021, options B	159,000	$2.21	Options vest as to ¼ of the total number of options granted, on each of four anniversaries of the grant date	7 years
March 3, 2021, options C	50,000	$2.21	Achievement of milestones	7 years
March 3, 2021, options D	2,262	$2.21	Options vest immediately	7 years

Summary of Options Outstanding

A summary of the status of the Company’s outstanding stock options as of March 31, 2021, is presented in the following table:

Stock options outstanding	CANADIAN DOLLARS					US DOLLARS
	Number stock options			Weighted Average Exercise Price		Number of stock options			Weighted Average Exercise Price
Balance at January 1, 2021		833,965		$	5.10		2,089,805		$	1.13
Granted		-			-		1,801,262			2.21
Exercised		-			-		(19,568	)		0.73
Expired / forfeited		(20,443	)		6.84		-			-
Balance at March 31, 2021		813,522		$	4.22		3,871,499		$	1.64

Summary of Inputs Used in Measurement of Fair Values at Grant Date of Share Based Option Plan

The grant date fair value of the option plans was measured based on the Black-Scholes option pricing model. Expected volatility was estimated by considering historic average share price volatility. The weighted average inputs in the original currency of the grants used in the measurement of fair values of the options at the grant date for the quarter ended March 31, 2021 is as follows:

Stock options issued		March 31, 2021
Exercise price		$2.21
Expected option life		3.7 years
Risk free interest rate		0.45%
Expected volatility		151.29%
Expected dividends		Nil

Schedule of Warrants Issued and Outstanding

As at March 31, 2021, the Company has 9,912,633 equity warrants that are issued, outstanding and exercisable (December 31, 2020: 2,131,716). These equity warrants expire between January 26, 2023, and November 6, 2025, (December 31, 2020: equity warrants had expiry dates between April 12, 2020, and November 6, 2025). Due to the equity classification, the equity warrants are not revalued each reporting period.

	Equity warrant units outstanding
Balance at January 1, 2021		2,131,716
January 2021 Equity Offering		4,227,911
February 2021 Equity Offering		5,463,592
Exercised		(1,318,675	)
Expired		(591,911	)
Equity warrants as at March 31, 2021		9,912,633

RSUs [Member]

Statement Line Items [Line Items]

Summary of Options and Restricted Share Units

During the quarter, the Company granted 1,527,860 RSUs pursuant to its Share Unit Plan. RSUs are notional share units exchangeable for common shares of the Company upon vesting.

Grant date / recipient	Vesting conditions	Number of RSUs
February 24, 2021 RSUs A	RSUs vest as to ¼ of the total number of units granted, on each of four anniversaries from the grant date	1,360,000
February 24, 2021 RSUs B	RSUs vest on the earliest of the Company’s next annual general meeting of the shareholder’s and 12 months from the grant date	136,752
February 24, 2021 RSUs C	RSUs vested immediately	31,108
Total RSUs granted in the quarter		1,527,860