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Although I noticed the potential issue with issuing news while the offering is still open, we also have been harping on them forever about transparency and communications. If they didn't announce news (Nicholson), we would complain about the lack of news. If they announced the news as they did, we still tend to complain that the timing wasn't optimal. I'm as guilty as everyone else here... We just need to keep things like this in mind. Sometimes our requests are simply not possible!
Going back to the SEDAR filing on June 27, it said: "It is expected that the first closing of the Offering will occur on June 29, 2017."
This implies more than one closing for the offering; the rest of the terms (including pricing) appear to carry over to any subsequent closings unless they were to file another amended prospectus.
ST gone on (a well earned) vacation this week?
I had not seen this analysis before! Great find, and big thanks for finding and sharing!
I will note that this was published before the latest pricing models were announced (est. $1.2M per system vs. earlier estimates of $950K). I don't know if system pricing was a factor in determining percentages of purchase within the stated market opportunities. If so sales numbers (systems) could be reduced due to increased pricing, but revenues could still be greater due to the price increase.
In any case, the analysis could be considered as another validation of SPORT as an eventual competitor in the market.
If they are correct, absolute worst case of appx. 1200 systems sold in 15 years at $1.2M each is $1.44B in system sales revenue. Add in service contracts at close to $100K/yr and assume 7.5 years average per system (5 year lifespan, fewer replacements, longer retention due to lesser utilization in smaller facilities, etc... Ballpark numbers, but viable) is almost another billion for service contracts. Reusables and disposables per case, estimate about $1000 per procedure, and average maybe 500 cases per year/per system... $500K per system/per year times 1200 systems times 7.5 years per system = $4.5B additional revenue over those 15 years. About $7B in revenue for 15 years is the absolute worst case according to that analysis. Top end is more than double those numbers.
What is the stock worth market cap) for a company destined to do $10B or more in sales? (That's conservatively averaging worst and best case scenarios, $7B to $15B or more... Okay, that's over 15 years, so just under $700M/year.) If a fair market cap was 3 to 5 years of revenue (we'll say 4 on average) that would be $3B in market capitalization, or about $12 per share (all very loose ballpark numbers; it's very late and my neighbor opened a bottle of Johnnie Walker Blue so... I helped him out with that).
I would say to buy all you can at anything under twelve cents a share and you should be sitting on a hundred bagger investment!
I'm not worried at all. Three of us received the same email replies from Mr. McNally, removing my concern about this. And I believe that if he sat with SPORT once or twice and tinkered enough to get a feel for it (i.e. during his brief Bloomberg-stated tenure), he would have already provided 95% of his feedback for improvements. With seven others listed on the SAB, there surely has been and will continue to be plenty of input and affirmation of the design. If Dr. Patel is part of the team (as I believe), he will only strengthen it further.
"Initial design freeze" is completely normal. They have to draw a line in the proverbial sand and decide that is what will be tested. They will still be looking for ways to improve the product, and there are always some things that surface during any intensive test phase such as pre-clinicals. Changes made after that point need to be well documented and an additional determination has to be made as to how each change will affect device performance, and what regression testing is appropriate afterwards. Otherwise, they would have to re-test the entire system even though the change was rather isolated to one area of performance. That would be a huge schedule hit.Initial design freeze just says "Here is our baseline" and they can move forward.
Some companies have issues getting to initial design freeze because every engineer or marketing guy who brings a good idea to the table wants to see it implemented. There is no end to creative input for a complex design, but if a company keeps modifying the design, they can never get to test.
Strive for excellence. If you strive for perfection, you will never get there.
An advantage to UCLA (or UCSD) would be to have a training center with West Coast presence... but I guess most of these guys do plenty of travelling anyway, so what's another couple flights? I thought I saw a slide or some info somewhere (maybe an older presentation I was looking at earlier yesterday) indicating anticipated cost to train three surgeons would be $275K. Does that sound like a reasonable figure?
Do Mayo and Columbia have resources similar to Nicholson regarding training lab space, simulation software expertise, etc.?
Saw the AGM last night - didn't have time to submit any comments at that time or to dig into a couple of their comments, but you folks seem to have covered most of it!
I few times I paused the video and jotted down some notes from the slides; unfortunately, the notes are sitting in my kitchen while I am sitting at a bench at work.
One thing that struck me from one of their slides is that all three training/pre-clinical sites are selected and as of June 15, all were still in the contracting phase. Also, one of the three is in Europe. Britain would help with language barriers, but it only said Europe on the slide. Dr. Advincula could be a great asset if he had an expanded role with Titan at Columbia as the second U.S. site, and his focus appears to be geared a little more to the GYN side than the surgeon in Florida who had recently had our attention with 10K prostates completed robotically. Dr. Valvo is right in Rochester, a reasonable drive from Toronto, which could make them a very convenient choice. He has over 7000 robotic procedures under his belt.
Apparently they have since signed the contract with FH/Nicholson and made that announcement. Honestly, I am hoping they can delay the announcements of the other two. As much as we would all love to hear more good news, we are currently locked into the $.11 price range by the offering, so more good news can't move the needle that far yet. Once the offering is fully wrapped, there is a better chance that good news will affect the PPS in a positive manner.
I did find it curious how Mr. McNally stood next to Mr. Randall as if he expected Randall to veer off course and might need to be kept on track, or might need to cut him off if he went down the wrong path! Kind of kidding there, but it did seem unusual. He certainly didn't feel the need to do that with the others. Maybe this is a reflection of his confidence in his team, which seems to mirror our thoughts on each of them as well. Reading the bios on Dr. Genova and Mr. Jensen, it looked as though both were very strong at their selected positions, but hearing them talk, even with prepared notes, still showed their own confidence in what they bring to the table, and that should inspire further confidence in shareholders as well. These two are the guys that will get the i's dotted and t's crossed. They presented a clear path (at a high level) to regulatory approval. I did find it interesting that the last data dump to the FDA would occur a couple months after initial 510K submittal, but apparently that is fairly normal. Maybe it gives them time to react to early feedback on the submission and tie up any loose ends while keeping the overall schedule as tight as possible.
The design changes discussed seem to be well underway; I did not get the feeling they would have any impact on the timeline, especially given the repeated mention of this being Gen 1 of SPORT. The foot pedal tray position should not be an overly complicated change (might need to shift some internals in order to move the pedals further from the surgeon). The camera revisions are likely to be more complex but everything will still move forward with the existing hardware until the new subsystem is ready to deploy. Their big advantage here is the modular design of the system so that they can replace a camera and maybe download updated software to support it, but it will have been well tested prior to deployment and other pre-clinical activities do not need to wait for one module to be swapped out. Mr. McNally repeated referred to Design for Manufacturing, and they really appear to have taken DFM to heart and are now at a point where they can already reap the benefits of such a design strategy.
Overall thoughts... Good meeting and good presentation. Nothing substantially new or groundbreaking, but a solid affirmation that the positive things most of us believe are well aligned with reality, and I will move forward with solid confidence in my investment.
All you will get is opinions here, which may vary widely. I'll share mine with that caveat (just my opinion).
You are looking for just under $5/share in your inquiry. I feel that some forces somewhere are artificially suppressing the price per share, and will continue to do so until it breaks out of their control, either due to some particular news event or a major milestone, such as FDA approval or maybe even just design freeze - then price can start to climb organically. I would ballpark the $5 mark as being at least 18 to 24 months away, worst case 36 months or so. However, if Titan gets bought out, all bets are off regarding price, but if value is considered (tech, patents, progress toward regulatory approvals, etc.) we could see close to $5 at time of sale.
Again, all just my own opinion.
And welcome to the message board as a contributor!
Looking forward to getting home to decipher the AGM video! Not sure where everyone is today; the participation here has been a little lighter than usual. On AGM day, I expect things should pick up this evening.
In each of the two emails I received from Mr. McNally last week, he mentioned the AGM video (as a response to my inquiries) and that it would be posted by the end of this week.
Mighty quiet day overall here on IHub! Everyone on vacation?
Is it ironic that this will be tested for 510K submission on pigs, and then the first human would possibly be referred to in the vernacular as a Guinea Pig?
I ran some ballpark buyout numbers in a post about 2 weeks ago... Post 56283.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=132595569
As for someone else developing another competing device or buying us out, keep in mind that the patent issue is worsened for the other company by the fact that Titan already has a number of patents in robotic surgery, therefore it would be more difficult to tiptoe around these additional patents with a separate, competitive design. Buying Titan means you own that intellectual property instead of having to work around it. Also, time to market would be cut back by years compared to developing a competitive device. That opportunity to get in the marketplace a couple years earlier by buying us would potentially be worth several billion dollars of earlier revenue and very little development cost to boot. Somebody would have to be stupid to NOT buy Titan if they could, but I personally would still rather see them go it alone.
I don't think FDA approval is that big an incentive for a large company to buy Titan, if anyone were to buy them. The technology is pretty sound, and the IP appears to be locked down pretty tightly as well. I don't believe the FDA concerns themselves with patent infringement issues so much as safety and efficacy. Given the understanding they all would have regarding the technology, any company could be interested in buying us out at any time because the risk items (technology and IP protection) are pretty well taken care of already, and safety and efficacy are not an issue for any organization willing to put the resources into finalizing development to meet these criteria. The efficacy is inherent in the design and is apparent. Safety includes things like redundant sub-systems where needed, maybe dual algorithms with comparisons before allowing any potentially critical movement, and regulatory requirements such as EMI/EMC/ESD compliance etc. Whether Titan completes all these aspects (majority of them must already be done to head to a clinical site like Nicholson Center) or if someone else buys them, it just means a sugar daddy is footing the rest of the bills to completion. If anything, FDA approval disincentivizes someone from buying them because Titan can demand much more money at that stage, plus they would be starting their marketing under the Titan name. If they are to be bought, the buying company would want to get marketing up and running with their own name and with their own pre-established distribution chains - much easier than transitioning and having to swallow the additional stranded costs.
If that is true, it's almost a shame that they didn't sit on the Nicholson announcement until the offering closes, at which point it could have a more positive effect on PPS.
ST, I assume that was you who put the new news on our iHub title page? If so, nice job... Wish everyone was that responsive with revising their web pages!
We need PPS high enough that the RS puts us in NASDAQ territory... This should be a good start!
Another observation from the article...
"We are creating a platform with the potential that we can give every patient access to the outcomes of the best surgeon."
The implication here is some sort of telesurgery, where the primary surgeon is in some remote location relative to the patient. Does anyone from the medical community have insights to share on issues like state-to-state licensing for physicians and surgeons? Will some far-reaching federal regulations be required to allow a surgeon in one state to operate robotically in a different state? Maybe some federal license to allow surgeons to operate in any state? I'm not sure exactly how it all works, but I thought the individual states regulated the licensing for doctors.
I'm thinking some of Verb's goals might require legislative support!
I have never been a big proponent of the whole Verb/Titan marriage proposition, but there will always remain a few possible ties which could be market space coincidences or could be something more. And I'm not trying to open up a hornet's nest here, so hopefully this merits a quick answer or two and we can move on.
My question to any of the surgeons out there... This article discusses improved access to the thoracic cavity, low anterior resection, and access to all four quadrants. Can any of you provide a professional opinion as to why the SPORT design either could meet all of these descriptions, or possible reasons it could not meet them all?
Thank you!
All just my opinion here...
As for when PPS will rise, I can't even take a stab at it. I don't fully understand marker makers' motivation and they appear to be largely in control. Beyond their control, we need good news and I still believe some good spin goes a long way as well. The AGM video should be out next week, and we will surely have a lot to discuss. If we try to nit-pick management over minutia in the presentation, it won't help anything. If there are some good solid facts presented and we do our due diligence to substantiate their claims, it wouldn't surprise me to see a run into the .20s in the next couple weeks, which could be the start of the trend. If the trend holds, .50+ could be easy by the end of the year. With a few more milestone announcements on schedule, it will be easier to convince others that Titan is the real deal now.
Maybe we could start a new trend by convincing people to buy and give blocks of Titan stock as Christmas gifts! Better anticipated returns than any savings bond in history!
There is also the unknown as to timing of the reverse split, and if anyone finds that concept scary... I think we need the uplisting but we need a natural rise in PPS first to ensure the minimum PPS is a lock.
As for me, I'll be 54 later this year, and most of my holdings are in IRAs. I have 6 years before I can hit those without penalty. Even if I hit $5M by then, I would expect to keep TITXF in the IRA for additional growth (think ISRG over the past 20 years!). 10% of my Titan is om a Scottrade account. If my total was $5M in 4 years, then my Scottrade shares are worth $500K, which would carry me VERY comfortably for the last 2 years until I can start my IRA drawdown. I'd say therefore at least 4 years for me personally. But if I can figure a way to retire earlier than that, I'll be very tempted to do so. I can't wait to leave the rat race to the rats!
My wife and I still have 3 IRAs, a 403B, and two pensions, but no crystal ball. We'll get there one way or another!
RS shouldn't matter; it will be market cap divided by outstanding shares. I think one of the most critical aspects of ultimate share price will therefore be dilution, and dilution will be controlled by share prices at the times of fundraising. If it hovers eternally around $.10/share and they need to raise $50M, that's 535 million more shares (the extra 35M shares is the 7% feed for Burton). If we get to $.50/share before next fundraising, it's only 107M more shares of dilution, so our percentage of ownership will stay higher.
If RS in the meantime, the numbers all scale uniformly based on the ratio, and the end results will be the same percentage of market cap. I think my 350,000 shares worked out to be .0012 of outstanding shares, or 0.12% of the company. If market cap goes to (random number) $4B, I'll have about $5M before taxes with no further dilution. Assuming dilution will double the current outstanding shares, I'll have $2.5M before taxes. With you 300K shares, you would be about 14% below that. If market cap is $2B, cut those numbers in half. If $8B, double them. ISRG market cap is just shy of $35B right now.The assumption is that newcomers to the market (Titan. TRXC, etc.) will not so much cut into the total market as expand it; all the projections are for the robotic surgical market to grow (to around $20B/year by 2020 or something like that). There is room for several companies to have multi-billion dollar market caps.
Of course, it also depends upon program success, and upon your willingness to ride it out. I assume some folks are going to want out when they turn even a slight profit because the roller coaster ride has been just a bit too intense! But that's just when it should start getting fun again!
Is it possible to tell if individual stock purchases are being made by market makers? Just curious; we have long speculated that they are suppressing our PPS but can this be verified?
Don't hide for too long, Times! I would guess late next week the AGM video will give a lot of the info we really need.
If I had to make a recommendation, I would say to wait until next week when the AGM video comes out. That should give us a lot of information to digest, interpret, discuss... and hopefully it will also answer a lot of questions! Until then, most of the discussion on this board will be re-hashed history and fairly meaningless conjecture about the future.
I might have to put together a spreadsheet of the timelines from iterative SEDAR filings to track what might be shifting in the schedule. I do way too much stuff with spreadsheets!
What has anyone done differently? Mr. Barker led the charge last fall to find the new upper management team. Mr. McNally's track record of successful products (successful in their marketplaces and successful for their stockholders) should muster some faith in his ability to execute, as should his record so far with Titan, having a plan and meeting the milestones while rebuilding part of the team and getting them up to speed as well. Mr. Brar, old guard, but who wants to argue about his ability to execute? He didn't win an "Everyone gets a trophy" trophy; he won the "Only the most qualified person in his field gets this trophy" trophy. Marketing and Business Development? Planning stages; can't market and sell a medical device without FDA approval so they haven't had a chance to show us their capabilities in full, but two of the three have substantial history with Intuitive, and Intuitive has sold a lot of product, so maybe they have a clue about how to do that. Much of the stuff that went by the wayside was for Amadeus.
An entire device went by the wayside to make way for a sleeker, better device that isn't just an also-ran trying to mimic the established technology from someone else, but something relatively revolutionary and better on so many levels than currently marketed offerings.
While noting that we are down to $.09, that statement has a few flaws. I'm seeing a bid of over $.096, almost 7% higher than the $.09 you stated, and that ignores the bid of $.126. Both figures are pre-market dreamers and have little to no basis in reality. And the bid just came up to $.1061 anyway.
There are things we could validly complain about, but I think the list you chose is a little light on validity. As much as you seem to be trying to spin these things to the negative side, there are more optimistic ways of looking at those same "facts".
Please don't interpret this as a personal attack; it is not meant that way. I am merely trying to show that there is a different way of viewing the same basic points and it doesn't have to be all bad. As I have stated before, I certainly share everyone's frustration but most of that is really just due to share price and dilution, which are largely beyond control of us or the management team. It's hard to say for sure who is to blame, but blaming the old management team is just arbitrary venting which reduces people's confidence if they don't do their own analysis. And blaming the current team doesn't seem to have much merit, as they have said what they plan to do and so far, they have been doing it. And that's what they have been doing differently than the old regime. Any goals that weren't "hit" on time were tasks for which they have completed what they needed to do, and the lawyers are tying up the legal language before making the announcements.
At 8:33PM Eastern (yesterday) I got a reply to my inquiry which I had sent to Mr. Barker. He forwarded it to Mr. McNally, who appears to have sent pretty much the same message to me, Adrock, and Kswiss (after all, we had the same questions - a reasonable thing to do).
I replied, asking to what extent I should share the info contained therein, as he did mention that they prefer to limit public disclosure on Dr. Patel until they receive permission. I will only confirm that I got the same basic message as the others and the wording is such that I believe he is being truthful.
As for the AGM video (last year's was posted during the first week of August), they are actively reviewing the edited version in preparation for uploading during the coming week, at which point they will also be updating the Board of Directors information. The new team seems to be a little more responsive than the old team in that regard as well.
To Times Yours, I understand your frustration, but we can't logically blame or even distrust the current management team because of the actions (or inaction) of the old team. The new team finally closed the door on Longtai; launching in Asia first would have been incredibly difficult to support, and who knows what they would have been giving up for that deal - probably a LOT more than the $20M we'd have received up front. Turnover on the SAB should be expected; these are all very busy professionals who have things to do and lives to live - this doesn't worry me at all. We still have our SAB and like any staff of any business, turnover is also an opportunity to hone the skill set to best match the needs of the company. As for timing of the RS vs. the announcement, I have no relevant experience in that realm, so I have to trust that they are doing what needs to be done to keep things rolling and to get into a better near-term position.
Other than all that... Good morning everyone!
I have written to Mr. Barker to inquire about Dr. Patel's status. I will share the results when results become available.
I chose to write to Mr. Barker due to his responsiveness and pleasant, cooperative demeanor when we wrote to the company last year.
Good morning ST and everyone else!
I'm ready!
Another nice find! Cleared for takeoff? Let's hope so! I'm done taxiing around the airport.
On the bright side for me, my order filled in Scottrade so I hit my 50K shares there and another 300K in the IRAs. 350K total, I'm done...
Now, it's time to climb!
A new topic...
Happy Independence Day to all! And a belated Happy Canada Day to those of you North of the border!
I have evidence that this stock is about to make its breakout. That would be the account balance on my Scottrade account. I came across just enough cash to put that account at the 50K share mark (I have 37500 there and the rest in my IRAs), so I placed an order yesterday morning for 12,500 shares at .11 (an All or Nothing order so I don't get hit with multiple transaction fees) and it did not fill.
I am interpreting this as solid proof that the stock is going to run up from here, so that the magical 50K mark remains unattainable. For others, you may interpret that merely as coincidence, but the way my luck runs, I would have to say that the PPS is going to take off from here just to spite me and my feeble goal of 50K in Scottrade.
Best of luck to all!
So how do the pessimists among us put a negative spin on THAT???
The BOD investing in this offering was completely voluntary. If there was a reasonable chance of this program going south, they would have just flushed $217,000.00 down the toilet. Even if they suspect PPS will fall, they can't get out because of insider trading regulations; they would just have to take the beating. Why would they risk ANYTHING unnecessarily unless they felt it was to their benefit? And it is only to their benefit if this project succeeds.
That information was recently published in the prospectus with their SEDAR filings. You can access it as will and view it with as cynical a perspective as you can muster.
I wouldn't call it chump change. Sure, a million total from the board would have been nice to see, but there is a certain randomness to it as well. It's like fast food workers deciding they should all be paid $15 an hour and expecting to be taken seriously. Hmmm... $15/hour... they must have felt $20/hour would be seen as TOO greedy, so $15 is good. It required no actual thought, no math nor data... If they said $14.93/hour, there might have been some data points utilized to derive that figure, and maybe it would be a justifiable number. But $15 is just some random BS made up number, which, in reality, is not unlike our suggestion for $1M contribution from the BOD.
I don't know each BOD member's financial situation - Surely Robin Leach would never have created an episode about any of them, and a 90 foot yacht probably doesn't await them at one of their numerous waterfront villas. Instead they could have kids in college, a couple nasty divorces behind them leaving ridiculous alimony payments... Our suggestion of them chipping in a cool milly would certainly have been above and beyond what constitutes a show of good faith, and sounds great as a nice round number. But the board of directors is now how big? 6 or 7? Plopping down $30 to $40K out of pocket because us yahoos on a message board want to see a "show of faith" effort from the BOD seems like a pretty good results in my honest opinion.
Yup. All 22 members of the Board of Directors put in 10K each.
Do math gooder, not like me does english!
The problem with market cap is evident right now... We have an artificially suppressed PPS making our market cap look like crap, when we all know the value in the technology is huge by comparison. Uplist and get this moving beyond such easy control of the MMs and market cap should begin to reflect real value.
Would have liked to see the BOD kick in more than $217K, but it is still a show of faith in my book.
I prefer the "go it alone" scenario myself but the management team history seems geared more toward hit the market and get bought. I did a quick ballpark run up of costs to date for SPORT and came in at roughly $400M so far, with close to another $100M when you add the $70M of getting to the finish line and add in things like marketing and building a sales team, contracting vendors for volume production, etc. If we call it $500M actual cost to get to market including regulatory approvals, that alone should put us in the $1.5B to $2B range in value. If early units get the rave reviews they should for things like cost, ease of operation, lower per-case costs, and availability to a wider range of customers (smaller hospitals and local surgi-centers as well as bigger hospitals who like the added flexibility, portability, and maybe some that are sick of getting screwed by ISRG), that could easily drive company value into the $4-5B range within a year or two of initial sales. As usual, just my opinion, but I think there is a solid rationale for this, not just a gut feeling.
Some hospitals love their ISRG reps and some really really don't. Merely having a rep who the hospital doesn't like can have them running for a better option at the drop of a hat, once the better option exists. Titan should be that better option.
To get to the original question, without RS we are sitting on about 300M shares, and an average figure from the above scenarios is $3B, so $10/share at current share count, or maybe $8/share with further dilution to reach the finish line. I would love to retire in 4 years.
I thought Plexus was doing our software, Ximedica was predominantly doing our hardware. That would explain the shift in focus if the hardware design is near completion and software now is the next big push.