Titan Medical Inc. will convert Longtai Medical Inc.'s $2 million distributorship deposit to equity by issuing 16,892,000 units at 15 Canadian cents apiece.

Each unit will comprise 1 common share and 1 common share purchase warrant exercisable at 20 cents apiece, 60 months after the offering's closing.

Closing of the offering is subject to all necessary regulatory approvals, including Toronto Stock Exchange approval.

Following completion of the offering, Longtai Medical will become Titan Medical's largest shareholder.

The distributorship deposit is part of an Oct. 30, 2015, letter agreement that allows the companies to negotiate distribution rights to Titan. The deposit was previously set to be refunded in full to Longtai Medical.