On March 2, 2021, the Company entered into a series of strategic transactions with Topcon, headquartered in Tokyo Japan, pursuant to which (i) the Company purchased substantially all of the tangible and intangible assets of Topcon Medical Laser Systems, Inc. (“TMLS”) related to laser products previously manufactured and sold by TMLS, including the Pattern Scanning Laser (PASCAL) products, under the tradename “PASCAL” altogether, the “PASCAL Business”, (ii) Topcon acquired an equity interest in the Company, comprised of the issuance of 1,618,122 shares of the Company’s common stock at $6.18 per share (as determined based on the average of the Nasdaq Official Closing Price of the Company’s common stock for the five trading days immediately preceding March 2, 2021), and (iii) the Company granted Topcon the exclusive right to distribute certain of its products (including the PASCAL laser products) in certain international regions (the “Exclusive Distribution Rights”) and (iv) Topcon and the Company entered into

the Manufacturing Services Agreement regarding transition of regulatory authorizations relating to, and manufacturing and supply of, the PASCAL products for a specified post-closing transition period. The transaction is expected to result in net proceeds to the Company of approximately $19.5 million (of which $17.5 million was received on March 10, 2021 with the remaining $2.0 million expected to be received later only if, as of the exclusive distribution rights start date, the Company has (A) begun the process of transferring to Topcon the exclusive distribution right in Japan, which process shall be evidenced by a copy of a written notice or letter sent by the Company to the existing distributor in Japan under which it has exercised its right of termination or non-renewal in accordance with the terms of the applicable existing distributor agreement and (B) used its commercially reasonable efforts to obtain a written acknowledgement by such existing distributor to assign and transfer all supporting documents in such existing distributor’s possession that are necessary for Topcon to effectuate the transfer of exclusive distribution rights to Topcon in Japan.). The net proceeds have been allocated on a fair value basis as follows (in thousands):

1)	Sale of equity interest (before issuance costs)	$	10,000
2)	Grant of exclusive distribution rights		14,800
3)	Purchase of tangible and intangible assets		(5,343	)
	Net Proceeds	$	19,457

The purchase of tangible and intangible assets has been recognized as an acquisition of a business with the relative fair value of the net consideration allocated to the tangible and intangible assets based on their preliminary estimated fair values as of the acquisition date.

Refer to Note 2. Summary of Significant Accounting Policies for the recognition of revenue under ASC 606 for the grant of exclusive distribution rights.

Acquisition of substantially all of TMLS’ assets including the rights to the PASCAL product.

On March 10, 2021, the Company completed the purchase of substantially all of the tangible and intangible assets of TMLS, which was an established leader in manufacturing and selling laser products under the tradename “PASCAL”. The acquisition has been recognized as an acquisition of a business and the purchase price (approximately $5.3 million) has been preliminarily allocated to tangible and identified intangible assets acquired based on their estimated fair values. As additional information becomes available, the Company may further revise the preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from March 10, 2021). Any such revisions or changes may be material.

The following table presents the preliminary allocation of the total purchase price:

	Estimated Fair Value
	(in thousands)
Inventory	$	2,319
Computers and Software		102
Manufacturing and Office Equipment		112
Other tangible assets		78
Developed Technology		900
In-process Research and Development (IPR&D)		1,000
Trade names and Trademarks		300
Customer Relationships		100
Goodwill		432
Total	$	5,343

Developed technology relates to PASCAL products, a pattern scanning laser used for retinal treatments, and was valued using the multi-period excess earnings method under the income approach. This method reflects the present value of the projected cash flows that are expected to be generated by the developed technology less charges representing the contribution of other assets to those cash flows. The economic useful life is estimated to be seven years, as determined based on the technology cycle related to the developed technology, and the estimated cash flows over the forecast period.

IPR&D pertains to an upcoming release of PASCAL products and has been valued using the multi-period excess earnings method under the income approach.

Trade names and Trademarks pertain to the “PASCAL” trade name, and the fair value was determined by applying the relief-from-royalty method under the income approach. The economic useful life is estimated to be nine years, based on the expected life of the trade name and the cash flows anticipated over the forecast period.

Customer relationships represent the fair value of future projected revenue that will be derived from sales of products to existing customers of the TMLS Business, with an estimated useful life of seven years.

Goodwill is primarily attributable to the assembled workforce and anticipated synergies and economies of scale expected from the integration of the TMLS Business. Substantially all goodwill is deductible for tax purposes.