Note 11 - Commitments and Contingencies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Text Block] |
Contingent Consideration On September 21, 2015, the Company completed the strategic acquisition, through its wholly owned subsidiary TransEnterix International, from Sofar, of all of the assets, employees and contracts related to the advanced robotic system for minimally invasive laparoscopic surgery now known as the Senhance System. Under the terms of the Purchase Agreement, as amended in 2016, as of September 30, 2021, the Company has accrued $4.9 million of estimated fair value of remaining contingent consideration which shall be payable upon achievement of trailing revenues from sales or services contracts of the Senhance System of at least € million over a calendar quarter.
Legal Proceedings No liability or related charge was recorded to earnings in the Company’s condensed consolidated financial statements for legal contingencies for the three or nine months ended September 30, 2021 and 2020.
Operating Leases Many of the Company’s leases include base rental periods coupled with options to renew or terminate the lease, generally at the Company’s discretion. In evaluating the lease term, the Company considers whether renewal is reasonably certain. To the extent a significant economic incentive exists to renew the lease, the option is included within the lease term. Based on the Company’s leases, renewal options generally do not provide a significant economic incentive and are therefore excluded from the lease term. The ROU asset is included in operating lease right-of-use assets, net on the condensed consolidated balance sheets. The current portion of operating lease liabilities are presented within operating lease liabilities – current portion on the condensed consolidated balance sheets and the non-current portion of operating lease liabilities are presented within noncurrent operating lease liabilities on the condensed consolidated balance sheets and represents the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate, which ranges between 6.1% and 8.5% based on the terms of the lease. The weighted average discount rate was 7.8% and 8.2% as of September 30, 2021 and December 31, 2020, respectively.
As of September 30, 2021, the right-of-use asset totaled $4.3 million and the lease liability totaled $4.6 million, of which $0.7 million is classified as current and $3.9 million is classified as non-current. Operating lease costs for the three months ended September 30, 2021 and 2020 totaled $0.4 million and $0.5 million and are included within operating expenses in the condensed consolidated statement of operations and comprehensive loss. Operating lease costs for the nine months ended September 30, 2021 and 2020 totaled $1.3 million and $1.5 million and are included within operating expenses in the condensed consolidated statement of operations and comprehensive loss. The weighted average remaining lease term for operating leases as of September 30, 2021 was 8.5 years. Total cash paid for operating leases, which is included within cash flows from operating activities within the condensed consolidated statement of cash flows, was $0.3 million and $0.4 million during the three months ended September 30, 2021 and 2020, respectively, and was $0.8 million and $1.1 million during the nine months ended September 30, 2021 and 2020, respectively.
The following table presents the minimum lease payments as of September 30, 2021 (in thousands):
License and Supply Agreements As part of the Company’s acquisition of the Senhance System in 2015, the Company assumed certain license and supply agreements. Payments under these arrangements generally become due and payable only upon the achievement of certain milestones. For instances in which the achievement of these milestones is neither probable nor reasonably estimable, such contingencies are not included in the estimated amount. The Company has also placed orders with various suppliers for the purchase of certain tooling, supplies and contract engineering and research services. Each of these orders has a duration or expected completion within the next twelve months. Commitments under these agreements amount to approximately $3.2 million in 2021, $0.1 million in 2022, $0.3 million in 2023, $0.2 million in 2024, and $0.2 million thereafter until termination in 2027. |