3. Acquisition of ALF-X Surgical Robotic System 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 known as the ALF-X System and changed the name of the acquired company from Vulcanos S.r.l. to TransEnterix Italia S.r.l. Under the terms of the Purchase Agreement, the consideration consisted of the issuance of 15,543,413 shares of the Companys common stock (the Securities Consideration) and approximately $25.0 million U.S. Dollars and 27.5 million Euro in cash consideration (the Cash Consideration). The Securities Consideration was issued in full at the closing of the ALF-X Acquisition; the Cash Consideration was or will be paid in four tranches, as follows: (1) $25.0 million of the Cash Consideration was paid at closing; (2) The second tranche of the Cash Consideration (the Second Tranche) of 10.0 million shall be payable after the achievement of both of the following milestones (i) the earlier of approval from the FDA for the ALF-X System or December 31, 2016, and (ii) the Company having cash on hand of at least $50.0 million, or successfully completing a financing, raising at least $50.0 million in gross proceeds; with payment of simple interest at a rate of 9.0% per annum between the achievement of the first milestone event and the payment date; (3) The third tranche of the Cash Consideration (the Third Tranche) of 15.0 million shall be payable upon achievement of trailing revenues from sales or services contracts of the ALF-X System of at least 25.0 million over a calendar quarter; and (4) The fourth tranche of the Cash Consideration of 2.5 million shall be payable by December 31, 2016 as reimbursement for certain debt payments made by SOFAR under an existing SOFAR loan agreement. The Third Tranche will be payable even if the Second Tranche is not then payable. In addition,