3. Acquisition of Senhance 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 now known as the Senhance 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 Senhance Acquisition; the Cash Consideration was or will be paid in four tranches, as follows: (1) $25.0 million of the Cash Consideration, which was paid at closing. (2) On December 30, 2016, the Company and Sofar entered into an Amendment to the Purchase Agreement (the Amendment) to restructure the terms of the second tranche of the Cash Consideration (the Second Tranche). Under the Amendment, the Second Tranche was restructured to be paid through the (A) the issuance of 3,722,685 shares of the Companys common stock with an aggregate fair market value of 5.0 million and (B) the payment of 5.0 million in cash upon the occurrence of either (i) receipt of clearance from the FDA for the Senhance System; or (ii) the Company having cash on hand of at least $50.0 million, or (iii) successfully completing a financing, raising at least $50.0 million in gross proceeds after September 2015, exclusive of any financing proceeds related to the December 2016 purchase agreement between the Company and Lincoln Park Capital Fund, LLC; with payment of simple interest at a rate of 9.0% per annum beginning on December 31, 2016. The Five Million Euro (5,000,000) cash payment began to accrue simple interest at a rate of 9% per annum beginning on December 31, 2016 and continued to accrue interest until November 15, 2017 when it was paid in full. (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 Senhance System of at least 25.0 million over a calendar quarter. (4) The fourth tranche of the Cash Consideration of 2.5 million was payable in installments by December 31 of each year as reimbursement for certain debt payments made by Sofar under an existing Sofar loan agreement in such year, with payments beginning as of December 31, 2016. As of September 30, 2018, the Company had paid 2.1 million of the fourth tranche. The Third Tranche payments will be accelerated in the event that (i) the Company or TransEnterix International is acquired, (ii) the Company significantly reduces or suspends selling efforts of the Senhance System, or (iii) the Company acquires a business that offers alternative products that are directly competitive with the Senhance System. The Purchase Agreement contains customary representations and warranties of the parties and the parties have customary indemnification obligations, which are subject to certain limitations described further in the Purchase Agreement. The Senhance Acquisition was accounted for as a business combination utilizing the methodology prescribed in ASC 805. The purchase price for the Senhance Acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair values.