COMMITMENTS AND CONTINGENCIES
|9 Months Ended|
Sep. 30, 2021
|COMMITMENTS AND CONTINGENCIES.|
|COMMITMENTS AND CONTINGENCIES||
16. COMMITMENTS AND CONTINGENCIES
From time to time, the Company may face legal claims or actions in the normal course of business. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to its legal proceedings. While the outcome of these claims cannot be predicted with certainty, management does not believe the outcome of any current legal proceedings will have a material adverse impact on the Company’s condensed consolidated financial statements.
The Company has entered into legally binding agreements with certain suppliers to purchase materials used in the manufacturing of the Company’s products. As of September 30, 2021, the Company had outstanding purchase orders with contract manufacturers in the amount of $32.6 million which are not included in the condensed consolidated balance sheets.
The Company has also entered into licensing and royalty agreements with certain manufacturing and software companies and universities related to the use of patented technology. Under the terms of each agreement, the Company has made initial, one-time payments of $0.3 million and is obligated to pay a set percentage, ranging from 2.75% - 13%, of all consideration received by the Company for sales of related products and services, until the agreements are terminated at various dates through 2037. The Company’s aggregate minimum annual commitment under these contracts is $0.5 million. During the three and nine months ended September 30, 2021 and 2020, the Company recorded immaterial licensing and royalty fees.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef