This One Filing Means TITAN MEDICAL INC COM NPV (OTCMKTS:TITXF) Just Became More Attractive

TITAN MEDICAL INC COM NPV (OTCMKTS:TITXF) took a hit a couple of weeks ago on the news that it is set to raise capital through equity issue, dipping from in and around $0.25 a share to Friday-last lows of $0.15 apiece. With a fresh week underway, however, the company looks to be bottoming out post-announcement and has drawn our attention as a potential rebound play.We also got a short form prospectus as part of the issue filing, which has served up some much-needed insight into time frames and cash requirement going forward.Here is a look at what stands out as important from said prospectus, and what we expect next from Titan.By way of a brief introduction to this one, the company has developed a surgical robot called SPORT that it is currently attempting to get to market in the US and Europe. Just as with a drug, a medical device like this has to go through a stringent development process and pathway, and it is along this pathway that Titan, with SPORT, currently finds itself.We won't go into too much detail on the product here, as this is one that we have looked at on quite a number of occasions in the past. Readers looking to catch up can do so here.What we will say, however, is that it is a robot designed to aid in the execution of minimally invasive surgery (MIS), defined as being able to perform body cavity operations through an incision no bigger than 25 mm in diameter. It's heavily protected from an intellectual property perspective, and the company is building on this IP all the time, with the latest example of this being this European patent grant.So, last time we covered this one, we noted that the company is moving towards commercialization, but it is doing so in a very limp-like fashion. Capital concerns mean it has to raise a little bit of money, use that cash to get to a near-term development milestone, then raise again and repeat. This repeatedly dilutive strategy is contributing to some pretty negative sentiment and is why – we think – the company is trading at its current price; prospective shareholders see the repeated raises (once every few months) and are put off by the potential for a never-ending capital necessity.As noted above, the recently filed prospectus goes a long way toward clearing of this uncertainty, and is what we see as being key to the company's recovery going forward. In summary, management is raising a little over $15 million to get it through to the end of 2017. For the first half of 2018, the company will again need around $15 million. Titan expects to submit for marketing approval (by way of 501(K) Class 2) by the end of 2018, and total cost between now and submission is estimated to come in at $70 million. This means Titan will probably need around $40 million to get it through to end 2018, once it's raised the above noted two tranches of $15 million.That's not great, but it's not terrible either.This is a very large market – The size of the market for robotic surgical systems is estimated by Grand View to grow from approximately US$7.5 billion in 2014 to US$17.9 billion by 2022 – and a regulatory green light can quickly lead to the company recouping a large portion of its development costs. To put that another way, it's a capital-intensive type of company at this stage, and shareholders (through dilution) are on the hook for this requirement. Once the product hits the shelves, however, there's more than enough market potential to mitigate entirely this dilutive impact by through market cap appreciation.There are also a number of catalysts set to hit press this year that could help offset any dilution nearer term. Primarily, these relate software development for the product and human form testing. Systems design is set for completion during the third quarter. Performance verification (animal testing) will begin and complete during the fourth quarter. This latter is a big one as it clears the way for a defined path to market in both the US and Europe.So, the bottom line here is that the latest raise is just the start of a $70 million push, but that we have this shortfall defined (quantitatively) is a very important, and fresh, input for this company's stock thesis. We think this definition is going to translate to more market willing to take a stake in SPORT's (and by proxy, Titan's) future in surgical tech, and that current price looks incredibly cheap when considered against what this company could be priced at in twenty-four months.Get the whole picture: check out all of our TITXF coverage here.We will be updating our subscribers as soon as we know more. For the latest updates on TITXF, sign up below!Disclosure: We have no position in TITXF and have not been compensated for this article.