Litigation. From time to time, the Company may become involved in various legal actions involving its operations, products and technologies, including intellectual property and employment disputes. The outcomes of these legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the claimants seek damages as well as other relief, including injunctions barring the sale of products that are the subject of the lawsuit, which if granted, could require significant expenditures or result in lost revenue. The Company records a liability in the condensed consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate, the minimum amount of the range is accrued. If a loss is possible but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded.

In April 2018, a customer notified the Company that it believed it overpaid hydrophilic coating royalties to the Company from January 2009 through December 2017. During fiscal 2018, the Company recorded $1.0 million in selling, general and administrative expenses related to this claim, which was included in other accrued liabilities as of September 30, 2018. During the nine months ended June 30, 2019, the Company settled this claim and made a payment to the customer totaling $0.4 million, resulting in a reduction of selling, general and administrative expenses of $0.6 million for the nine months ended June 30, 2019.

InnoCore Technologies BV. In March 2006, the Company entered into a license agreement whereby Surmodics obtained an exclusive license to a drug delivery coating for licensed products within the vascular field which included peripheral, coronary and neurovascular biodurable stent products. The license requires an annual minimum payment of 200,000 euros (equivalent to $227,000 using a euro to US dollar exchange rate of $1.137 to the Euro as of June 30, 2019) until the last patent expires which is currently estimated to be September 2027. The total minimum future payments associated with this license are approximately $1.9 million as of June 30, 2019. The license is currently utilized by one of the Company’s drug delivery customers.

Operating Leases. The Company leases certain facilities under noncancelable operating lease agreements. Rent expense for the three and nine months ended June 30, 2019 was $0.1 million and $0.4 million, respectively. Rent expense for the three and nine months ended June 30, 2018 was $0.1 million and $0.2 million, respectively. In November 2017, the Company executed a lease for a 36,000 square feet facility in Eden Prairie, Minnesota. This facility will consolidate substantially all of our whole products solutions research and development operations into one location. Payments under the lease agreement over the ten-year lease term commenced in May 2018. In connection with this lease, the Company deposited $0.4 million into a restricted cash account, which was returned to the Company during the nine months ended June 30, 2019. Annual commitments pursuant to operating lease agreements in place as of June 30, 2019 for the remainder of fiscal 2019 and each of the next five fiscal years are as follows (in thousands):

Remainder of 2019	$	113
2020		458
2021		396
2022		391
2023		399
2024		407
Thereafter		1,526
Total minimum lease payments	$	3,690

Asset Acquisitions. In May 2018, the Company entered into an acquired certain intellectual property assets of Embolitech, LLC (the “Embolitech Transaction”). As part of the Embolitech Transaction, the Company paid the sellers $5.0 million during fiscal 2018. Additionally, the Company is obligated to pay $3.5 million in several installments beginning January 2020 and ending December 2023. These payments may be accelerated upon the occurrence of certain sales and regulatory milestones. An additional $2.0 million payment is contingent upon the achievement of certain regulatory milestones within a contingency period ending in 2033. As of June 30, 2019 and September 30, 2018, $2.1 million and $2.9 million, respectively, is included in other long-term liabilities on the condensed consolidated balance sheets related to the Embolitech Transaction. As of June 30, 2019 $1.0 million is included in other current liabilities on the condensed consolidated balance sheets related to the Embolitech Transaction.

In July 2019, the Company acquired certain intellectual property assets supporting ongoing development of the Company’s medical device pipeline. As a result of this acquisition, the Company made an upfront, nonrefundable payment of $0.8 million. In addition, the Company is obligated to pay up to $1.3 million of additional consideration upon achievement of certain strategic milestones within a contingency period ending in 2022, of which $0.2 million is guaranteed to be paid by December 2020. In the fourth quarter of fiscal 2019, the Company expects to record a charge for the acquisition of in-process research and development totaling $0.9 million related to this acquisition.