0001437749-21-025110 | 10-Q | XBRL Viewer

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

1.	Organization and Capitalization

Asensus Surgical, Inc. (formerly known as TransEnterix, Inc.) (the "Company") is a medical device company that is digitizing the interface between the surgeon and the patient to pioneer a new era of Performance-Guided Surgery™ by unlocking clinical intelligence for surgeons to enable consistently superior outcomes and a new standard of surgery. The Company is focused on the market development for and commercialization of the Senhance® Surgical System, which digitizes laparoscopic minimally invasive surgery, or MIS. The Senhance System is the first and only digital, multi-port laparoscopic platform designed to maintain laparoscopic MIS standards while providing digital benefits such as haptic feedback, robotic precision, comfortable ergonomics, advanced instrumentation including 3 mm microlaparoscopic instruments, eye-sensing camera control and fully-reusable standard instruments to help maintain per-procedure costs similar to traditional laparoscopy.

The Senhance System is available for sale in Europe, the United States, Japan, Taiwan, Russia and select other countries.

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The Senhance System has a CE Mark in Europe for adult and pediatric laparoscopic abdominal and pelvic surgery, as well as limited thoracic surgeries excluding cardiac and vascular surgery.

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In the United States, the Company has received 510(k) clearance from the FDA for use of the Senhance System in general laparoscopic surgical procedures and laparoscopic gynecologic surgery in a total of 31 indicated procedures, including benign and oncologic procedures, laparoscopic inguinal, hiatal and paraesophageal hernia, sleeve gastrectomy and laparoscopic cholecystectomy (gallbladder removal) surgery.

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In Japan, the Company has received regulatory approval and reimbursement for 98 laparoscopic procedures.

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The Senhance System has received its registration certificate by the Russian medical device regulatory agency, Roszdravnadzor, allowing for its sale and utilization throughout the Russian Federation.

In 2020, the Company obtained regulatory clearance for the Senhance ultrasonic system in Taiwan and Japan. On February 12, 2020, the Company expanded its claims in the EU for the Senhance System to include pediatric patients, allowing accessibility to more surgeons and patients, as well as expanding its potential market to include pediatric hospitals in Europe. The Company anticipates the robotic precision provided by the Senhance System, coupled with the already available 3 mm diameter instruments, will prove to be an effective tool in surgery with smaller patients.

On March 13, 2020, the Company announced that it received FDA clearance for the Intelligent Surgical Unit™ (ISU™) for use with the Senhance System. The Company believes it is the first such FDA submission seeking clearance for machine vision technology in abdominal robotic surgery. On September 23, 2020, the Company announced the first surgical procedures successfully completed using the ISU. On September 1, 2021, the Company announced that it received FDA clearance for an expansion of machine vision capabilities. On January 19, 2021, the Company announced that it received CE Mark for the ISU. Lastly, on July 28, 2021, the Company announced that it received FDA clearance for 5 mm diameter articulating instruments, offering better access to difficult-to-reach areas of the anatomy by providing two additional degrees of freedom. These instruments have previously received CE Mark for use in the EU.

On October 31, 2018, the Company acquired the assets, intellectual property and highly experienced multidisciplinary personnel of MST Medical Surgical Technologies, Inc., or MST, an Israeli-based medical technology company. Through this acquisition the Company acquired MST’s AutoLap™ assets and technology, one of the only image-guided robotic scope positioning systems with FDA clearance and CE Mark. The Company believes MST’s image analytics technology will accelerate and drive meaningful Senhance System developments and allow the Company to expand the Senhance System to add augmented, intelligent vision capability. The Company sold the AutoLap assets in October 2019, while retaining the core technology.

At-the-Market Offering

On May 19, 2021, the Company entered into a Controlled Equity Offering^SM Sales Agreement (the “Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), Robert W. Baird & Co. Incorporated (“Baird”) and Oppenheimer & Co. Inc. (“Oppenheimer”). Each of Cantor, Baird and Oppenheimer are individually an “Agent” and collectively are the “Agents” under the Agreement. Also on May 19, 2021, the Company filed a prospectus supplement relating to an at-the-market offering (the “2021 ATM Offering”) by the Company of up to an aggregate of $100,000,000 of shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), which shares of Common Stock are registered under the Registration Statement on Form S-3 ASR (File No. 333-256284) and automatically effective on May 19, 2021.

Note 2 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Significant Accounting Policies [Text Block]

2.	Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its direct and indirect wholly owned subsidiaries. The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with the instructions to Form 10-Q and the standards of accounting measurement set forth in the Interim Reporting Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). Consequently, the Company has not necessarily included in this Form 10-Q all information and footnotes required for audited financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements in this Form 10-Q contain all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for a fair statement of its financial position, results of operations, and cash flows of the Company for all periods presented. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any subsequent period or for the entire year. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Fiscal 2020 Form 10-K. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in the accompanying interim condensed consolidated financial statements. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

Liquidity

The Company had an accumulated deficit of $769.5 million and working capital of $125.4 million as of September 30, 2021. The Company has not established sufficient sales revenues to cover its operating costs and believes it may require additional capital in the future to proceed with its operating plan.

The Company believes the COVID-19 pandemic will continue to negatively impact its operations and ability to implement its market development efforts, which will have a negative effect on its financial condition.

In the first quarter of 2021, the Company raised additional capital through equity offerings, including raising net proceeds of $73.4 million in a January 2021 public offering, $28.6 million in a January 2021 registered direct offering, and $27.3 million in an at-the-market offering launched in 2020 (the “2020 ATM Offering”). Also, outstanding Series B, C and D warrants were exercised in the nine months ended September 30, 2021 for aggregate proceeds to the Company of $30.6 million.

In the second quarter of 2021, the Company launched the 2021 ATM Offering and raised proceeds, net of legal costs and commissions, of $1.2 million under this offering in the nine months ended September 30, 2021.

As of September 30, 2021, the Company had cash, cash equivalents, short-term and long-term investments, excluding restricted cash, of approximately $147.9 million.

While the Company believes that its existing cash, cash equivalents, and short-term investments as of September 30, 2021 will be sufficient to sustain operations for at least the next 12 months from the issuance of these financial statements, the Company believes it may need to obtain additional financing in the future to proceed with its business plan. Management's plan to obtain additional resources for the Company may include additional sales of equity under the 2021 ATM Offering or otherwise, traditional financing, such as loans, entry into a strategic collaboration, entry into an out-licensing arrangement or provision of additional distribution rights in some or all of our markets. However, management cannot provide any assurance that the Company will be successful in accomplishing any or all of its plans.

Risk and Uncertainties

The Company is subject to risks similar to other similarly sized companies in the medical device industry. These risks include, without limitation: potential negative impacts on the Company's operations caused by the COVID-19 pandemic; the historical lack of profitability; the Company’s ability to raise additional capital; the success of its market development efforts, the liquidity and capital resources of its partners; its ability to successfully develop, clinically test and commercialize its products; the timing and outcome of the regulatory review process for its products; changes in the health care and regulatory environments of the United States, the United Kingdom, the European Union, Japan, Taiwan and other countries in which the Company operates or intends to operate; its ability to attract and retain key management, marketing and scientific personnel; its ability to successfully prepare, file, prosecute, maintain, defend and enforce patent claims and other intellectual property rights; its ability to successfully transition from a research and development company to a marketing, sales and distribution company; competition in the market for robotic surgical devices; and its ability to identify and pursue development of additional products.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include impairment considerations for long- term intangible assets, fair value estimates related to contingent consideration, warrant liabilities, stock compensation expense, revenue recognition, accounts receivable reserves, short-term and long-term investments, excess and obsolete inventory reserves, inventory classification between current and non-current, measurement of lease liabilities and corresponding right-of-use (“ROU”) assets, and deferred tax asset valuation allowances.

The COVID-19 pandemic has caused significant social and economic restrictions that have been imposed in the United States and abroad, which has resulted in significant volatility in the global economy and led to reduced economic activity. In the preparation of these financial statements and related disclosures, the Company has assessed the impact that COVID-19 has had on its estimates, assumptions, forecasts, and accounting policies. The Company continues to monitor closely the COVID-19 pandemic impact on its estimates, assumptions and forecasts used in the preparation of its financial statements. As the COVID-19 situation is unprecedented and ever evolving, future events and effects related to COVID-19 cannot be determined with precision, and actual results could significantly differ from estimates or forecasts.

Principles of Consolidation and Foreign Currency Considerations

The accompanying condensed consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, Asensus Surgical US, Inc., SafeStitch LLC, Asensus International, Inc., Asensus Surgical Italia S.r.l., Asensus Surgical Europe S.à.r.l., Asensus Surgical Taiwan Ltd., Asensus Surgical Japan K.K., Asensus Surgical Israel Ltd., Asensus Surgical Netherlands B.V., and Asensus Surgical Canada, Inc. All inter-company accounts and transactions have been eliminated in consolidation.

The functional currency of the Company’s operational foreign subsidiaries is predominantly the Euro. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for a subsidiary using a functional currency other than the U.S. dollar is included in accumulated other comprehensive income or loss as a separate component of stockholders’ equity.

The Company’s intercompany accounts are denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany receivables that the Company considers to be of a long-term investment nature are recorded as a cumulative translation adjustment in accumulated other comprehensive income or loss as a separate component of stockholders’ equity, while gains and losses resulting from the remeasurement of intercompany receivables from a foreign subsidiary for which the Company anticipates settlement in the foreseeable future are recorded in the condensed consolidated statements of operations and comprehensive loss. The net gains and losses included in net loss in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020 were not significant.

Cash and Cash Equivalents, Restricted Cash, and Investments

The Company considers all highly liquid investments with original maturities of 90 days or less at the time of purchase to be cash equivalents.

Restricted cash as of September 30, 2021 and December 31, 2020 includes $1.2 million and $1.2 million, respectively, in cash accounts held as collateral primarily under the terms of an office operating lease, credit cards, and automobile leases.

The Company’s investments as of September 30, 2021 consisted of corporate money market funds, commercial paper and corporate bonds and were classified as available-for-sale. Investments classified as available-for-sale are measured at fair value, and net unrealized gains and losses are recorded as a component of accumulated other comprehensive income (loss) on the balance sheet until realized. Realized gains and losses on sales of investment securities are determined based on the specific-identification method and are recorded in interest expense, net. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method. Such amortization and accretion is included in interest expense, net. The Company held no investments as of December 31, 2020. There were no gross realized gains or losses for the three or nine months ended September 30, 2021, and September 30, 2020. There have been no unrealized gains or losses reclassified from accumulated other comprehensive income (loss). Investments with remaining maturities at date of purchase greater than 90 days and remaining maturities as of the reporting period less than one year are classified as short-term investments. Investments with remaining maturities greater than one year are classified as long-term investments.

Concentrations and Credit Risk

The Company’s principal financial instruments subject to potential concentration of credit risk are cash and cash equivalents, and investments, including amounts held in money market funds, commercial paper, and corporate bonds. The Company places cash deposits with a federally insured financial institution. The Company maintains its cash at banks and financial institutions it considers to be of high credit quality; however, the Company’s domestic cash deposits may at times exceed the Federal Deposit Insurance Corporation’s insured limit. Balances in excess of federally insured limitations may not be insured. The Company has not experienced losses on these accounts, and management believes that the Company is not exposed to significant risks on such accounts. Investments are stated at their estimated fair values, based on quoted market prices for the same or similar instruments. The counterparties to the agreements relating to the Company’s investments consist of various major corporations, financial institutions, and government agencies of high credit standing.

The Company’s accounts receivable are derived from sales and leases to customers located throughout the world. The Company evaluates its customers’ financial condition and, generally, requires no collateral from its customers. The Company provided reserves for potential credit losses and recorded no bad debt charges during the three and nine months ended September 30, 2021 and 2020. The Company had four customers who constituted 58% of the Company’s net accounts receivable as of September 30, 2021. The Company had seven customers who constituted 68% of the Company’s net accounts receivable at December 31, 2020. The Company had one customer who accounted for 61% of revenue in the three months ended September 30, 2021 and nine customers who accounted for 57% of revenue in the three months ended September 30, 2020. The Company had two customers who accounted for 50% of revenue in the nine months ended September 30, 2021 and nine customers who accounted for 58% of revenue in the nine months ended September 30, 2020.

Accounts Receivable

Accounts receivable are recorded at net realizable value, which includes an allowance for estimated uncollectible accounts. The allowance for uncollectible accounts was determined on a customer specific basis based on deemed collectability. The allowance for doubtful accounts was $1.7 million and $1.8 million as of September 30, 2021 and December 31, 2020, respectively.

Inventories

Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or net realizable value. Inventory costs include direct materials, direct labor, and normal manufacturing overhead. The Company records reserves, when necessary, to reduce the carrying value of inventory to its net realizable value. Management considers forecast demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles when determining excess and obsolescence and net realizable value adjustments. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Any inventory on hand at the measurement date in excess of the Company's current requirements based on anticipated levels of sales is classified as long-term on the Company's condensed consolidated balance sheets. The Company's classification of long-term inventory requires it to estimate the portion of on hand inventory that can be realized over the upcoming twelve months.

Intellectual Property

Intellectual property consists of purchased patent rights and developed technology acquired as part of previous business acquisitions. Amortization of the patent rights is recorded using the straight-line method over the estimated useful life of the patents of 10 years. Amortization of the developed technology is recorded using the straight-line method over the estimated useful life of 5 to 7 years.

The Company periodically evaluates intellectual property for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. To determine the recoverability, the Company evaluates the probability that future estimated undiscounted net cash flows will be less than the carrying amount of the assets. If such estimated cash flows are less than the carrying amount of the assets, then such assets are written down to their fair value. No impairment of intellectual property was identified during the three and nine months ended September 30, 2021 and 2020.

Property and Equipment

Property and equipment consists primarily of operating lease Senhance System assets, machinery, manufacturing equipment, demonstration equipment, computer equipment, furniture, leasehold improvements, and purchased software which are recorded at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows:

Operating lease assets – Senhance System leasing (in years)
5

Machinery, manufacturing and demonstration equipment (in years)
3 - 5

Computer equipment (in years)
3

Furniture (in years)
5

Leasehold improvements
Lesser of lease term or 3 to 10 years

Purchased Software
5

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred.

The Company reviews its property and equipment assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine the recoverability, the Company evaluates the probability that future estimated undiscounted net cash flows will be less than the carrying amount of the assets. If such estimated cash flows are less than the carrying amount of the assets, then such assets are written down to their fair value. The Company did not identify any impairment during the three and nine months ended September 30, 2021 and 2020.

Other Receivable – Employee Retention Tax Credit

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) included an Employee Retention Tax Credit (“ERTC”) provision designed to encourage employers to keep employees on their payroll. The ERTC is a refundable tax credit against certain payroll taxes paid by employers for eligible wages paid between March 13, 2020 and December 13, 2020 that meet requirements of the ERTC provision. On March 11, 2021, the American Rescue Plan Act was enacted extending the deadline of the ERTC to December 31, 2021 and expanded who is eligible to claim the credit. For the three and nine months ended September 30, 2021 we submitted an ERTC refund for $1.3 million and recorded the amount into Other Income (Expense) on the condensed consolidated statements of operations and comprehensive loss. The Company believes there is a reasonable assurance that it will comply with the relevant conditions of the employee retention credit provision of the CARES Act and that it will receive the credit.

Notes Payable – Payroll Protection Program

The Company’s policy is to account for forgivable loans received through the U.S. Small Business Administration (the “SBA”) under the CARES Act Payroll Protection Program (“PPP”), as debt in accordance with ASC 470, Debt, and other related accounting pronouncements. The forgiveness of debt, in whole or part, is recognized once the debt is extinguished, which occurs when the Company is legally released from the liability by the SBA. Any portion of debt forgiven, adjusted for accrued interest forgiven and unamortized debt issuance costs, is recorded as a gain on extinguishment of debt, and presented in the condensed consolidated statements of operations and comprehensive loss. On June 10, 2021, the Company received notification from the SBA that the principal amount of its PPP loan of $2.8 million and related interest had been forgiven.

Contingent Consideration

Contingent consideration is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones, future Euro-to-USD exchange rates, and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the condensed consolidated statements of operations and comprehensive loss.

On September 21, 2015, the Company completed the strategic acquisition, through its wholly owned subsidiary TransEnterix International, from Sofar S.p.A., an Italian company (“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 related to a milestone of €15.0 million which 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 or in the event that (i) the Company or Asensus International is acquired, (ii) the Company significantly reduce 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.

Warrant Liabilities

The Company’s Series B Warrants (see Note 9) were measured at fair value using a simulation model which took into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock, its expected volatility, holding cost and the risk-free interest rate for the term of the warrant (see Note 3). The warrant liability was revalued at each reporting period and changes in fair value were recognized in the condensed consolidated statements of operations and comprehensive loss. The selection of the appropriate valuation model and the inputs and assumptions that are required to determine the valuation requires significant judgment and requires management to make estimates and assumptions that affect the reported amount of the related liability and reported amounts of the change in fair value. Actual results could differ from those estimates, and changes in these estimates are recorded when known. All remaining outstanding Series B Warrants were exercised in the first quarter 2021.

Revenue Recognition

The Company’s revenue consists of product revenue resulting from the sale and lease of Systems, System components, instruments and accessories, and service revenue. The Company accounts for a contract with a customer when there is a legally enforceable contract between the Company and the customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. The Company's revenues are measured based on consideration specified in the contract with each customer, net of any sales incentives and taxes collected from customers that are remitted to government authorities. The Company’s System sale arrangements generally include a five-year service period; the first year of service is generally free and included in the System sale arrangement and the remaining four years are generally included at a stated service price.

The Company’s System sale arrangements generally contain multiple products and services. For these consolidated sale arrangements, the Company accounts for individual products and services as separate performance obligations if they are distinct, which is if a product or service is separately identifiable from other items in the consolidated package, and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The Company’s System sale arrangements may include a combination of the following performance obligations: system(s), system components, instruments, accessories, and system services.

For arrangements that contain multiple performance obligations, revenue is allocated to each performance obligation based on its relative estimated standalone selling price. When available, standalone selling prices are based on observable prices at which the Company separately sells the products or services; however due to limited sales to date, standalone selling prices generally are not directly observable. The Company estimates the standalone selling price using the market assessment approach considering market conditions and entity-specific factors including, but not limited to, features and functionality of the products and services, geographies, type of customer, and market conditions. The Company regularly reviews estimated standalone selling prices and updates these estimates if necessary.

The Company recognizes revenues when or as the performance obligations are satisfied by transferring control of the product or service to a customer. The Company generally recognizes revenue for the performance obligations as follows:

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System sales. For Systems and System components sold directly to end customers (including those arising from System purchases under lease rights to purchase), revenue is recognized when the Company transfers control to the customer, which is generally at the point when acceptance occurs that indicates customer acknowledgment of delivery or installation, depending on the terms of the arrangement. For Systems sold through distributors, for which distributors are responsible for installation, revenue is recognized generally at the time of shipment. The Company’s System arrangements generally do not provide a right of return. The Systems are generally covered by a one-year warranty. Warranty costs were not material for the periods presented.

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Instruments and accessories. Revenue from sales of instruments and accessories is recognized when control is transferred to the customers, which generally occurs at the time of shipment, but also occurs at the time of delivery depending on the customer arrangement.

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Service. Service revenue is recognized ratably over the term of the service period as the customers benefit from the service throughout the service period. Revenue related to services performed on a time-and-materials basis is recognized when performed.

The following table presents revenue disaggregated by type and geography:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(in thousands) (in thousands)

U.S.

Systems
$ 78 $ 101 $ 262 $ 176

Instruments and accessories
60 82 201 149

Services
105 106 307 278

Total U.S. revenue
243 289 770 603

Outside of U.S. ("OUS")

Systems
1,332 131 2,762 257

Instruments and accessories
706 122 1,351 410

Services
290 272 873 798

Total OUS revenue
2,328 525 4,986 1,465

Total

Systems
1,410 232 3,024 433

Instruments and accessories
766 204 1,552 559

Services
395 378 1,180 1,076

Total revenue
$ 2,571 $ 814 $ 5,756 $ 2,068

The Company recognizes sales by geographic area based on the country in which the customer is based. Operating lease revenue from Senhance System leasing is included as Systems in the above table and was approximately $0.3 million and $0.2 million in the three months ended September 30, 2021 and 2020, respectively, and $0.9 million and $0.4 million in the nine months ended September 30, 2021 and 2020, respectively.

Transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which the revenue has not yet been recognized. A significant portion of this amount relates to service obligations performed under the Company's system sales contracts that will be invoiced and recognized as revenue in future periods. Transaction price allocated to remaining performance obligations was approximately $2.7 million and $3.1 million as of September 30, 2021 and December 31, 2020, respectively.

The Company invoices its customers based on the billing schedules in its sales arrangements. Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the arrangements. Contract assets are included in accounts receivable and totaled $0.1 million and $0.1 million as of September 30, 2021 and December 31, 2020, respectively. Deferred revenue for the periods presented was primarily related to service obligations, for which the service fees are billed up-front, generally annually. The associated deferred revenue is generally recognized ratably over the service period. The Company did not have any significant impairment losses on its contract assets for the periods presented. Revenue recognized for the three months ended September 30, 2021 and 2020 that was included in the deferred revenue balance at the beginning of each reporting period was $0.1 million and $0.1 million, respectively. Revenue recognized for the nine months ended September 30, 2021 and 2020 that was included in the deferred revenue balance at the beginning of each reporting period was $0.5 million and $0.5 million, respectively. The aggregate amount of transaction price allocated to performance obligations that remain unsatisfied as of September 30, 2021 was $2.7 million, which is expected to be recognized as revenue over one to three years.

In connection with assets recognized from the costs to obtain a contract with a customer, the Company determined that the sales incentive programs for its sales team do not meet the requirements to be capitalized as the Company does not expect to generate future economic benefits from the related revenue from the initial sales transaction and such costs are expensed as incurred.

Senhance System Leasing

The Company enters into lease arrangements with certain qualified customers. Revenue related to arrangements including lease elements are allocated to lease and non-lease elements based on their relative standalone selling prices. Lease elements generally include a Senhance System, while non-lease elements generally include instruments, accessories, and services. For some lease arrangements, the customers are provided with the right to purchase the leased System at some point during and/or at the end of the lease term. In some arrangements lease payments are based on the usage of the System.

In determining whether a transaction should be classified as a sales-type, operating, or direct financing lease, the Company considers the following terms at lease commencement: (1) whether title of the Senhance System transfers automatically or for a nominal fee by the end of the lease term, (2) whether the present value of the minimum lease payments equals or exceeds substantially all of the fair value of the leased System, (3) whether the lease term is for the major part of the remaining economic life of the leased System, (4) whether the lease grants the lessee an option to purchase the leased System that the lessee is reasonably certain to exercise, and (5) whether the underlying System is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term. All such arrangements through September 30, 2021 are classified as operating leases.

Revenue related to lease elements from operating lease arrangements is generally recognized on a straight-line basis over the lease term or based upon System usage and is presented as product revenue. Revenue related to lease elements from operating lease arrangements was approximately $0.3 million and $0.2 million for the three months ended September 30, 2021 and 2020, respectively, and $0.9 million and $0.4 million for the nine months ended September 30, 2021 and 2020, respectively.

Cost of Revenue

Cost of revenue consists of contract manufacturing, materials, labor, and manufacturing overhead incurred internally to produce the products. Shipping and handling costs incurred by the Company are included in cost of revenue. During the three months ended September 30, 2021 and 2020, the Company recorded $0.1 million and $0 million, respectively, of expenses for inventory obsolescence related to certain System components. During the nine months ended September 30, 2021 and 2020, the Company recorded $0.4 million and $0 million, respectively, of expenses for inventory obsolescence related to certain System components.

Research and Development Costs

Research and development expenses primarily consist of engineering, product development and regulatory expenses, incurred in the design, development, testing and enhancement of our products. Research and development costs are expensed as incurred.

Stock-Based Compensation

The Company recognizes expenses for share-based awards exchanged for services rendered equal to the estimated fair value of these awards over the requisite service period. The Company recognizes as expense, the grant-date fair value of stock options and other stock-based compensation issued to employees and non-employee directors over the requisite service periods, which are typically the vesting periods. The Company uses the Black-Scholes-Merton model to estimate the fair value of our stock options. The volatility assumption used in the Black-Scholes-Merton model is based on the Company’s historical volatility. The expected term of options granted has been determined based upon the simplified method, because the Company does not have sufficient historical information regarding its options to derive the expected term. Under this approach, the expected term is the mid-point between the weighted average of vesting period and the contractual term. The risk-free interest rate is based on U.S. Treasury rates whose term is consistent with the expected life of the stock options. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero. The Company estimates forfeitures based on its historical experience and adjust the estimated forfeiture rate based upon actual experience. For awards with performance conditions, we begin recognizing compensation expense when it becomes probable that the performance condition will be attained.

The fair value of restricted stock units is determined by the market price of the Company’s common stock on the date of grant.

The Company records as expense the fair value of stock-based compensation awards, including stock options and restricted stock units. Compensation expense for stock-based compensation was approximately $3.0 million and $1.9 million for the three months ended September 30, 2021 and 2020, respectively, and was approximately $6.6 million and $5.8 million for the nine months ended September 30, 2021 and 2020, respectively.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets or liabilities for the temporary differences between financial reporting and tax basis of the Company’s assets and liabilities, and for tax carryforwards at enacted statutory rates in effect for the years in which the asset or liability is expected to be realized. The effect on deferred taxes of a change in tax rates is recognized in income during the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amounts expected to be realized. The Company has elected to account for global intangible low-taxed income (“GILTI”) as a period expense in the year the tax is incurred.

The Company recognizes the financial statement benefit of an income tax position only after determining that the relevant taxing authority would more likely than not sustain the position following audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority. The Company recognizes interest accrued related to unrecognized tax benefits and penalties in the provision for income taxes.

Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require application of significant judgment. The Company is subject to U.S. federal and various state, local and foreign jurisdictions. Due to the Company’s net operating loss carryforwards, the Company may be subject to examination by authorities for all previously filed income tax returns.

Comprehensive Loss

Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Segments

The Company operates in one business segment—the research, development and sale of medical device robotics to improve minimally invasive surgery. The Company’s chief operating decision maker (determined to be the Chief Executive Officer) does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results.

Approximately 77% and 27% of the Company’s total consolidated assets are located within the U.S. as of September 30, 2021 and December 31, 2020, respectively. The remaining assets are mostly located in Europe and are primarily related to the Company’s facility in Italy, and include intellectual property, inventories, property and equipment, cash, prepaid expenses, operating lease right-of-use assets, accounts receivable, restricted cash, net deferred tax assets, and other current and long-term assets of $45.5 million and $56.8 million as of September 30, 2021 and December 31, 2020, respectively. Total assets outside of the United States amounted to 23% and 73% of total consolidated assets as of September 30, 2021 and December 31, 2020, respectively. Long-term assets in the U.S. were 58% and 11%, Switzerland were 23% and 41%, and Italy were 17% and 48%, as of September 30, 2021 and December 31, 2020, respectively. The Company recognizes sales by geographic area based on the country in which the customer is based. For the three months ended September 30, 2021 and 2020, 9% and 36%, respectively, of net revenue were generated in the United States; while 82% and 46%, respectively, were generated in Europe; and 9% and 18% were generated in Asia. For the nine months ended September 30, 2021 and 2020, 13% and 29%, respectively, of net revenue were generated in the United States; while 55% and 50%, respectively, were generated in Europe; and 32% and 21% were generated in Asia.

Impact of Recently Issued Accounting Standards

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740, Income Tax and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 effective January 1, 2021; the adoption did not result in a material impact on the Company's financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is designed to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. When determining such expected credit losses, the guidance requires companies to apply a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This guidance is effective on a modified retrospective basis for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The guidance is not expected to have a material impact on the Company's financial statements and related disclosures.

In August 2020, the FASB issued ASU 2020-06 Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (subtopic 815-40) guidance on the accounting for convertible debt instruments and contracts in an entity’s own equity. The guidance simplifies the accounting for convertible instruments by reducing the various accounting models that can require the instrument to be separated into a debt component and equity component or derivative component. Additionally, the guidance eliminated certain settlement conditions previously required to be able to classify a derivative in equity. The new guidance is effective on a modified or full retrospective basis for fiscal years beginning after December 15, 2023, including interim periods with those fiscal years. The Company is currently evaluating the impact on the condensed consolidated financial statements upon adoption.

The Company has evaluated all other issued and unadopted ASUs and believes the adoption of these standards will not have a material impact on its condensed consolidated statements of operations and comprehensive loss, balance sheets, or statements of cash flows.

Note 3 - Fair Value

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Text Block]

3.	Fair Value

The Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis. These assets and liabilities include cash and cash equivalents, restricted cash, investments, contingent consideration and warrant liabilities. ASC 820-10 (“Fair Value Measurement Disclosure”) requires the valuation using a three-tiered approach, which requires that fair value measurements be classified and disclosed in one of three tiers. These tiers are: Level 1, defined as quoted prices in active markets for identical assets or liabilities; Level 2, defined as valuations based on observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable input data; and Level 3, defined as valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. The Company did not have any transfers of assets and liabilities between Level 1, Level 2, and Level 3 of the fair value hierarchy during the three and nine months ended September 30, 2021 and 2020.

For assets and liabilities recorded at fair value, it is the Company’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy. Fair value measurements for assets and liabilities where there exists limited or no observable market data and therefore, are based primarily upon estimates, are often calculated based on the economic and competitive environment, the characteristics of the asset or liability and other factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values. The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.

As prescribed by U.S. GAAP, the Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. An adjustment to the pricing method used within either Level 1 or Level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy.

The determination of where an asset or liability falls in the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures and based on various factors, it is possible that an asset or liability may be classified differently from period to period. However, the Company expects changes in classifications between levels will be rare.

The carrying values of accounts receivable, prepaid expense, other current assets, accounts payable, and certain accrued expenses as of September 30, 2021 and December 31, 2020 approximate their fair values due to the short-term nature of these items. The Company’s notes payable balance also approximates fair value as of December 31, 2020, as the interest rate on the notes payable approximates the rates available to the Company as of this date.

The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

	September 30, 2021
	(in thousands)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets measured at fair value
Cash and cash equivalents⁽¹⁾	$	59,779	$	-	$	-	$	59,779
Restricted cash		1,153		-		-	$	1,153
Short-term investments		-		57,972		-	$	57,972
Long-term investments		-		30,142		-	$	30,142
Total assets measured at fair value	$	60,932	$	88,114	$	-	$	149,046
Liabilities measured at fair value
Contingent consideration	$	-	$	-	$	4,949	$	4,949
Total liabilities measured at fair value	$	-	$	-	$	4,949	$	4,949

⁽¹⁾Includes investments that are readily convertible to cash with original maturities of 90 days or less.

	December 31, 2020
	(in thousands)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets measured at fair value
Cash and cash equivalents	$	16,363	$	-	$	-	$	16,363
Restricted cash		1,166		-		-		1,166
Total assets measured at fair value	$	17,529	$	-	$	-	$	17,529
Liabilities measured at fair value
Contingent consideration	$	-	$	-	$	3,936	$	3,936
Warrant liabilities		-		-		255		255
Total liabilities measured at fair value	$	-	$	-	$	4,191	$	4,191

The Company’s financial liabilities consisted of contingent consideration payable to Sofar related to the Senhance Acquisition in September 2015. This liability is reported as Level 3 as estimated fair value of the contingent consideration related to the acquisition requires significant management judgment or estimation and is calculated using the income approach, using various revenue and cost assumptions, and applying a probability to each outcome. The increase in fair value of the contingent consideration of $0.3 million and $1.0 million for the three and nine months ended September 30, 2021, respectively was primarily due to the passage of time partially offset by a higher discount rate, decreased volatility, and changes in the Euro-to-USD exchange rates. The increase in fair value of the contingent consideration of $0.5 million and $1.8 million for the three and nine months ended September 30, 2020, respectively was primarily due to the passage of time. Adjustments associated with the change in fair value of contingent consideration are included in the Company’s condensed consolidated statements of operations and comprehensive loss. The Company uses a probability-weighted income approach for estimating the fair value of the contingent consideration. The significant unobservable inputs used in this approach include estimates of amounts and timing of stated milestones, volatility, and the discount rate.

On April 28, 2017, the Company sold 24.9 million units (the “Units”), each consisting of approximately 0.077 shares of the Company's Common Stock, a Series A warrant to purchase approximately 0.077 shares of Common Stock with an exercise price of $13.00 per share (the “Series A Warrants”), and a Series B warrant to purchase approximately 0.058 shares of Common Stock with an exercise price of $13.00 per share (the “Series B Warrants,” together with the Series A Warrants, the “Warrants”), at an offering price of $1.00 per Unit. All of the Series A Warrants were exercised prior to the expiration date of October 31, 2017. As of December 31, 2020, 567,660 Series B Warrants were outstanding with an exercise price of $0.35 per share. All outstanding Series B Warrants were exercised in the first quarter 2021.

The final remeasurement upon exercise of the Series B warrants was on February 8, 2021 and all Series B warrants have been exercised as of September 30, 2021. The change in fair value of the Series B warrants for the nine months ended September 30, 2021 and 2020 was an increase of $2.0 million and an increase of $0.2 million, respectively and was included in the Company’s condensed consolidated statements of operations and comprehensive loss. The increase in fair value of the Series B warrants of $2.0 million for the nine months ended September 30, 2021 was primarily due to an increase in share price, a lower discount rate, increased volatility, and the passage of time. No change in fair value was recorded for the three months ended September 30, 2021. The change in fair value of the Series B warrants for the three months ended September 30, 2020 was an decrease of $0.1 million. The following table presents the inputs and valuation methodologies used for the Company’s fair value of the Series B warrants:

	December 31,
Series B Warrants	2020

Valuation methodology	Black-Scholes-Merton
Term (years)		1.32
Risk free rate		0.10	%
Dividends		-
Volatility		150.97	%
Share price	$	0.63

The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements for contingent consideration as of September 30, 2021 and December 31, 2020:

Weighted Average (range, if applicable)

Valuation

Significant

September 30,

December 31,

Methodology

Unobservable Input

2021

2020

Contingent consideration

Probability weighted income approach

Milestone dates

2025

2029

2024

2029

Discount rate

9.5%

Volatility

70%

71.0%

The following table summarizes the change in fair value, as determined by Level 3 inputs for the warrants and the contingent consideration for the nine months ended September 30, 2021:

	Fair Value Measurement at Reporting Date (Level 3)
	(in thousands)
	Common stock warrants			Contingent consideration
Balance at December 31, 2020	$	255		$	3,936
Exercise of warrants		(2,236	)		-
Change in fair value		1,981			1,013
Balance at September 30, 2021	$	-		$	4,949

Current portion	$	-		$	-
Long-term portion		-			4,949
Balance at September 30, 2021	$	-		$	4,949

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Note 4 - Investments

9 Months Ended

Sep. 30, 2021

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

4.	Investments

The aggregate fair values of investment securities along with unrealized gains and losses determined on an individual investment security basis and included in other comprehensive income are as follows:

	September 30, 2021
	(in thousands)

	Amortized Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Short-term investments		Long-term investments
Commerical Paper	$	28,712	$	-	$	(12	)	$	28,700	$	28,700	$	-
Corporate Bonds		59,455		-		(41	)		59,414		29,272		30,142
Total Investments	$	88,167	$	-	$	(53	)	$	88,114	$	57,972	$	30,142

The following table summarizes the contractual maturities of the Company’s available-for-sale investments, as of September 30, 2021:

	Amortized Cost		Fair Value
Mature in less than one year	$	57,997	$	57,972
Mature in one to two years		30,170	$	30,142
Total	$	88,167	$	88,114

Actual maturities may differ from contractual maturities, because certain borrowers have the right to call or prepay certain obligations. There were no sales of investments or gross realized gains or losses for the three and nine months ended September 30, 2021 and September 30, 2020, respectively.

Note 5 - Inventories

9 Months Ended

Sep. 30, 2021

Inventory Disclosure [Text Block]

5.	Inventories

The components of inventories are as follows:

	September 30, 2021		December 31, 2020
	(in thousands)
Finished goods	$	11,154	$	10,749
Raw materials		6,763		8,098
Total inventories	$	17,917	$	18,847

Current portion	$	11,954	$	10,034
Long-term portion		5,963		8,813
Total inventories	$	17,917	$	18,847

During the three and nine months ended September 30, 2021, the Company recorded a $0.1 million and a $0.4 million charge for inventory obsolescence related to certain system components, respectively. There were no such write-downs or charges for the three and nine months ended September 30, 2020.

Note 6 - Intellectual Property

9 Months Ended

Sep. 30, 2021

Intangible Assets Disclosure [Text Block]

6.	Intellectual Property

The components of gross intellectual property, accumulated amortization, and net intellectual property as of September 30, 2021 and December 31, 2020 are as follows:

	September 30, 2021
	(in thousands)
	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Impact		Net Carrying Amount
Developed technology	$	68,838	$	(57,207	)	$	947	$	12,578
Technology and patents purchased		400		(192	)		34		242
Total intellectual property	$	69,238	$	(57,399	)	$	981	$	12,820

	December 31, 2020
	(in thousands)
	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Impact		Net Carrying Amount
Developed technology	$	68,838	$	(51,734	)	$	4,872	$	21,976
Technology and patents purchased		400		(168	)		59		291
Total intellectual property	$	69,238	$	(51,902	)	$	4,931	$	22,267

The weighted average remaining useful life of the developed technology and technology and patents purchased was 1.7 years and 5.6 years, respectively as of September 30, 2021.

Note 7 - Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Text Block]

7.	Income Taxes

Income taxes have been accounted for using the asset and liability method in accordance with ASC 740 “Income Taxes”. The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate method. The Company estimates an annual effective tax rate of 0.0% for the year ending December 31, 2021. This rate does not include the impact of any discrete items. The Company’s effective tax rate for the three months ended September 30, 2021 and 2020 was (0.2)% and 0.0%, respectively. The Company’s effective tax rate for the nine months ended September 30, 2021 and 2020 was 0% and 3.0%, respectively.

The Company incurred losses for the three and nine month periods ended September 30, 2021 and is forecasting additional losses through the year, resulting in an estimated net loss for both financial statement and tax purposes for the year ending December 31, 2021. Due to the Company’s history of losses, there is not sufficient evidence to record a net deferred tax asset associated with the U.S., Luxembourg, Swiss, Italian, Taiwanese, and Canadian operations. Accordingly, a full valuation allowance has been recorded related to the net deferred tax assets in those jurisdictions.

Income tax benefit on the condensed consolidated statement of operations and comprehensive loss is comprised of deferred tax benefit and current tax expense (benefit). The deferred tax benefit during the three months ended September 30, 2021 and 2020, was approximately $0.0 million and $0.0 million, respectively. The deferred tax benefit during the nine months ended September 30, 2021 and 2020, was approximately $0.0 million and $1.4 million, respectively. The current tax expense (benefit) during the three months ended September 30, 2021 and 2020, was approximately $0.03 million and $0.0 million, respectively. The current tax expense (benefit) during the nine months ended September 30, 2021 and 2020, was approximately $0.00 million and $0.04 million, respectively.

At September 30, 2021, the Company had no unrecognized tax benefits that would affect the Company’s effective tax rate.

The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income (“GILTI”), states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to account for GILTI as a period expense in the year the tax is incurred. The Company does not expect a GILTI inclusion for 2021; no GILTI tax has been recorded for the three or nine months ended September 30, 2021 or 2020.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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Note 8 - Notes Payable - Payroll Protection Program

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Text Block]

8.	Notes Payable – Payroll Protection Program

The CARES Act was passed in the United States and signed into law on March 7, 2020 and was amended on June 5, 2020 through the enactment of the Paycheck Protection Program Flexibility Act. On April 27, 2020, Asensus Surgical US, Inc., a wholly owned subsidiary of the Company, received funding under a promissory note dated April 18, 2020 (the “Promissory Note”), evidencing an unsecured non-recourse loan in the principal amount of $2,815,200 under the PPP provisions of the CARES Act. The PPP is administered by the U.S. Small Business Administration (the “SBA”). The Promissory Note was made through City National Bank of Florida, a national banking association (the “Lender”). The Company accounted for the PPP loan as debt and included the principal amount within notes payable on the condensed consolidated balance sheet.

The Promissory Note had a two-year term, maturing on April 27, 2022, and bore interest at 1.00% per annum. The Promissory Note could be forgiven partially or fully if the proceeds were used for covered payroll, rent and utility costs incurred during the “Covered Period,” which was the 24-week period beginning on the date the Company received the PPP loan proceeds from the Lenders, and if at least 60% of the proceeds were used for covered payroll costs. All or a portion of the Promissory Note could be forgiven by the SBA upon application by the Company and documentation of expenditures in accordance with the SBA requirements. If the Promissory Note was not forgiven, payments can be deferred until 10 months after the end of the Company’s Covered Period, . The Promissory Note contained customary events of default relating to, among other things, payment defaults, and breach of representations and warranties, or other provisions of the Promissory Note. The Promissory Note was classified as long-term except for the portion to be paid within twelve months of the year end, which was classified as current.

The Company submitted its application for forgiveness of the Promissory Note in full to the Lender on February 10, 2021. On June 10, 2021, the Company received notification from the SBA that the principal amount of $2.8 million and related interest had been forgiven. Gain on extinguishment of debt of $2.8 million was recognized for the nine months ended September 30, 2021 on the condensed consolidated statement of operations and comprehensive loss.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Note 9 - Equity Offerings

9 Months Ended

Sep. 30, 2021

Stockholders' Equity Note Disclosure [Text Block]

9.	Equity Offerings

On August 12, 2019, the Company entered into a Controlled Equity Offering Sales Agreement (the “2019 Sales Agreement”), with Cantor Fitzgerald & Co., (“Cantor”), and commenced an at-the-market offering (the “2019 ATM Offering”) pursuant to which the Company could sell from time to time, at its option, up to an aggregate of $25.0 million shares of the Company’s common stock, through Cantor, as sales agent. Sales of the common stock under the 2019 ATM Offering were made under the Company’s previously filed and currently effective shelf registration statement on Form S-3. The aggregate compensation payable to Cantor was 3.0% of the aggregate gross proceeds from each sale of the Company’s common stock. Under the 2019 ATM Offering, the Company raised gross proceeds of $7.2 million and net proceeds of $7.0 million during the year ended December 31, 2019, and an additional $11.6 million of gross proceeds and $11.2 million of net proceeds during the year ended December 31, 2020.

On October 9, 2020, the Company filed a prospectus supplement relating to an at-the-market offering with Cantor pursuant to which the Company could sell from time to time, at its option, up to an aggregate of $40.0 million of shares of the Company’s common stock, through Cantor as sales agent, pursuant to the 2019 Sales Agreement (the “2020 ATM Offering”). Sales of the common stock were made on the Company’s shelf registration statement on Form S-3, which was declared effective by the SEC on February 10, 2020. The aggregate compensation payable to Cantor was 3.0% of the aggregate gross proceeds from each sale of the Company’s common stock. The Company terminated this agreement in January 2021.

The following table summarizes the total sales under the 2020 ATM Offering for the nine months ended September 30, 2021 (in thousands except for share and per share amounts):

	For the Nine Months Ended September 30, 2021
Total shares of common stock sold		19,120,037

Average price per share	$	1.47

Gross proceeds	$	28,100
Commissions earned by Cantor	$	843
Net proceeds	$	27,257

On May 19, 2021, the Company entered into a Controlled Equity OfferingSales Agreement (the “2021 Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), Robert W. Baird & Co. Incorporated (“Baird”) and Oppenheimer & Co. Inc. (“Oppenheimer”). Each of Cantor, Baird and Oppenheimer are individually an “Agent” and collectively are the “Agents” under the Agreement. Also on May 19, 2021, the Company commenced an at-the-market offering (the “2021 ATM Offering”) pursuant to which the Company could sell from time to time, at its option, up to an aggregate of $100.0 million shares of the Company’s common stock. The aggregate compensation payable to the Agents was 3.0% of the aggregate gross proceeds from each sale of the Company’s common stock.

The following table summarizes the total sales under the 2021 ATM Offering for the nine months ended September 20, 2021 (in thousands except for share and per share amounts):

	For the Nine Months Ended September 30, 2021
Total shares of common stock sold		352,880

Average price per share	$	3.47

Gross proceeds	$	1,224
Commissions earned by Agents	$	37
Net proceeds	$	1,187

On March 10, 2020, the Company closed the March 2020 Public Offering and sold an aggregate of 14,121,766 Class A Units at a public offering price of $0.68 per Class A Unit and 7,937,057 Class B Units at a public offering price of $0.68 per Class B Unit. Each Class A Unit consisted of one share of the Company’s common stock, one warrant to purchase one share of common stock that expired on the first anniversary of the date of issuance (collectively, the “Series C Warrants”), and one warrant to purchase one share of common stock that expires on the fifth anniversary of the date of issuance (collectively, the “Series D Warrants”). Each Class B Unit consisted of one share of Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), convertible into one share of common stock, a Series C Warrant to purchase one share of common stock and a Series D Warrant to purchase one share of common stock. The Class A Units and Class B Units had no stand-alone rights and were not certificated or issued as stand-alone securities. The shares of common stock, Series A Preferred Stock, Series C Warrants and Series D Warrants are immediately separable. In addition, the underwriter for the public offering exercised an overallotment option and purchased 3,308,823 Series C Warrants and 3,308,823 Series D Warrants.

The shares of Series A Preferred Stock ranked on par with the shares of the common stock, in each case, as to dividend rights and distributions of assets upon liquidation, dissolution or winding up of the Company. With certain statutory exceptions, as described in the Series A Preferred Stock Certificate of Designation, the shares of Series A Preferred Stock had no voting rights. Each share of Series A Preferred Stock was convertible at any time at the holder’s option into one share of common stock, which conversion ratio was subject to adjustment for stock splits, stock dividends, distributions, subdivisions and combinations and other similar transactions as specified in the Series A Preferred Stock Certificate of Designation. The Company recorded a beneficial conversion feature of $0.4 million as a deemed dividend included in additional paid-in capital and an immediate charge to earnings available to common stockholders for the year ended December 31, 2020. All of the shares of Series A Preferred Stock were converted to common stock by the holders by June 30, 2020. Upon conversion, the Company recorded $0.3 million as a deemed dividend as an immediate charge to earnings available to common stockholders for the year ended December 31, 2020. In accordance with the Series A Preferred Stock Certificate of Designation, the shares of Series A Preferred Stock regained the status of authorized and unissued shares of preferred stock.

The net proceeds to the Company from the March 2020 Public Offering were approximately $13.5 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. All shares of Series A Preferred Stock were converted into 7.9 million shares of common stock prior to June 30, 2020. Approximately 4.9 million Series C Warrants were exercised during the year ended December 31, 2020, generating net proceeds of $3.3 million. The Class A Units, the Class B Units, the Series A Preferred Stock, the Series C Warrants and the Series D Warrants (together with the shares of common stock underlying the shares of Series A Preferred Stock and such warrants) were offered under the Company’s previously filed Registration Statement on Form S-3, which registration statement expired in May 2020. The Company filed a new registration statement on Form S-1 covering the exercise of the outstanding Series C Warrants and Series D Warrants, which was declared effective by the SEC on May 27, 2020.

On July 6, 2020, the Company completed an underwritten public offering of 42,857,142 shares of its common stock, including the underwriter’s full exercise of an over-allotment option, at the public offering price per share of $0.35 per share, generating net proceeds of approximately $13.6 million. Following the offering, the exercise price of the outstanding Series B Warrants was adjusted to $0.35 per share and the number of shares of common stock underlying such warrants increased to 567,660 shares.

On January 12, 2021, the Company sold in a registered direct offering, 25,000,000 shares of common stock at a purchase price per share of $1.25 for aggregate gross proceeds of $31.25 million, and net proceeds of $28.6 million.

On January 29, 2021, the Company completed an underwritten public offering of 26,545,832 shares of its common stock, including the underwriter’s full exercise of an over-allotment option on February 1, 2021, at the public offering price of $3.00 per share, for aggregate gross proceeds of $79.6 million and net proceeds of approximately $73.4 million.

During the nine months ended September 30, 2021, the Company issued 45,317,101 shares of common stock upon the exercise of Series B, C, and D warrants for aggregate proceeds of $30.6 million.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Note 10 - Basic and Diluted Net Loss Per Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Text Block]

10.

Basic and Diluted Net Loss per Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed giving effect to all potential dilutive common shares that were outstanding during the period when the effect is dilutive. Potential dilutive common shares consist of incremental shares issuable upon exercise of stock options, restricted stock units, warrants and preferred stock. For the nine months ended September 30, 2020, the effects of the Series A Preferred Stock beneficial conversion charge and conversion are included in the calculation of net loss attributable to common stockholders. No adjustments have been made to the weighted average outstanding common shares figures for the nine months ended September 30, 2021 or 2020 as the assumed exercise of outstanding options, warrants and restricted stock units would be anti-dilutive.

Potential common shares not included in calculating diluted net loss per share are as follows:

	September 30,
	2021		2020
Stock options		5,089,464		4,285,880
Stock warrants		1,013,383		46,498,909
Nonvested restricted stock units		3,891,249		2,915,014
Total		9,994,096		53,699,803

Note 11 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Text Block]

11.

Commitments and Contingencies

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 €25.0 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):

Fiscal Year
Remainder of 2021	$	271
2022		983
2023		728
2024		635
2025		635
Thereafter		3,004
Total minimum lease payments	$	6,256
Less: Amount of lease payments representing interest		(1,697	)
Present value of future minimum lease payments	$	4,559

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.

Note 12 - Subsequent Events

9 Months Ended

Sep. 30, 2021

Subsequent Events [Text Block]

12.

Subsequent Events

In October 2021, a subsidiary of the Company, Asensus Surgical Italia S.r.L., entered into a lease agreement for new research, development, and demonstration space in Milan, Italy. The lease is expected to commence in the fourth quarter of 2021, has an initial lease term of 87 months following commencement, and includes a tenant option to extend the lease term for up to an additional six-year period. Quarterly base rent payments begin fifteen months after the commencement date and are subject to annual escalations beginning in the third year. Total base rent payments over the initial 87-month term shall be approximately $1.7 million. A proportionate share of building operating costs, ad valorem property taxes, value-added tax are also due quarterly.

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its direct and indirect wholly owned subsidiaries. The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with the instructions to Form 10-Q and the standards of accounting measurement set forth in the Interim Reporting Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). Consequently, the Company has not necessarily included in this Form 10-Q all information and footnotes required for audited financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements in this Form 10-Q contain all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for a fair statement of its financial position, results of operations, and cash flows of the Company for all periods presented. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any subsequent period or for the entire year. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Fiscal 2020 Form 10-K. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in the accompanying interim condensed consolidated financial statements. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

Substantial Doubt about Going Concern [Policy Text Block]

Liquidity

The Company had an accumulated deficit of $769.5 million and working capital of $125.4 million as of September 30, 2021. The Company has not established sufficient sales revenues to cover its operating costs and believes it may require additional capital in the future to proceed with its operating plan.

The Company believes the COVID-19 pandemic will continue to negatively impact its operations and ability to implement its market development efforts, which will have a negative effect on its financial condition.

In the first quarter of 2021, the Company raised additional capital through equity offerings, including raising net proceeds of $73.4 million in a January 2021 public offering, $28.6 million in a January 2021 registered direct offering, and $27.3 million in an at-the-market offering launched in 2020 (the “2020 ATM Offering”). Also, outstanding Series B, C and D warrants were exercised in the nine months ended September 30, 2021 for aggregate proceeds to the Company of $30.6 million.

In the second quarter of 2021, the Company launched the 2021 ATM Offering and raised proceeds, net of legal costs and commissions, of $1.2 million under this offering in the nine months ended September 30, 2021.

As of September 30, 2021, the Company had cash, cash equivalents, short-term and long-term investments, excluding restricted cash, of approximately $147.9 million.

While the Company believes that its existing cash, cash equivalents, and short-term investments as of September 30, 2021 will be sufficient to sustain operations for at least the next 12 months from the issuance of these financial statements, the Company believes it may need to obtain additional financing in the future to proceed with its business plan. Management's plan to obtain additional resources for the Company may include additional sales of equity under the 2021 ATM Offering or otherwise, traditional financing, such as loans, entry into a strategic collaboration, entry into an out-licensing arrangement or provision of additional distribution rights in some or all of our markets. However, management cannot provide any assurance that the Company will be successful in accomplishing any or all of its plans.

Risk And Uncertainties, Policy [Policy Text Block]

Risk and Uncertainties

The Company is subject to risks similar to other similarly sized companies in the medical device industry. These risks include, without limitation: potential negative impacts on the Company's operations caused by the COVID-19 pandemic; the historical lack of profitability; the Company’s ability to raise additional capital; the success of its market development efforts, the liquidity and capital resources of its partners; its ability to successfully develop, clinically test and commercialize its products; the timing and outcome of the regulatory review process for its products; changes in the health care and regulatory environments of the United States, the United Kingdom, the European Union, Japan, Taiwan and other countries in which the Company operates or intends to operate; its ability to attract and retain key management, marketing and scientific personnel; its ability to successfully prepare, file, prosecute, maintain, defend and enforce patent claims and other intellectual property rights; its ability to successfully transition from a research and development company to a marketing, sales and distribution company; competition in the market for robotic surgical devices; and its ability to identify and pursue development of additional products.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include impairment considerations for long- term intangible assets, fair value estimates related to contingent consideration, warrant liabilities, stock compensation expense, revenue recognition, accounts receivable reserves, short-term and long-term investments, excess and obsolete inventory reserves, inventory classification between current and non-current, measurement of lease liabilities and corresponding right-of-use (“ROU”) assets, and deferred tax asset valuation allowances.

The COVID-19 pandemic has caused significant social and economic restrictions that have been imposed in the United States and abroad, which has resulted in significant volatility in the global economy and led to reduced economic activity. In the preparation of these financial statements and related disclosures, the Company has assessed the impact that COVID-19 has had on its estimates, assumptions, forecasts, and accounting policies. The Company continues to monitor closely the COVID-19 pandemic impact on its estimates, assumptions and forecasts used in the preparation of its financial statements. As the COVID-19 situation is unprecedented and ever evolving, future events and effects related to COVID-19 cannot be determined with precision, and actual results could significantly differ from estimates or forecasts.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation and Foreign Currency Considerations

The accompanying condensed consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, Asensus Surgical US, Inc., SafeStitch LLC, Asensus International, Inc., Asensus Surgical Italia S.r.l., Asensus Surgical Europe S.à.r.l., Asensus Surgical Taiwan Ltd., Asensus Surgical Japan K.K., Asensus Surgical Israel Ltd., Asensus Surgical Netherlands B.V., and Asensus Surgical Canada, Inc. All inter-company accounts and transactions have been eliminated in consolidation.

The functional currency of the Company’s operational foreign subsidiaries is predominantly the Euro. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for a subsidiary using a functional currency other than the U.S. dollar is included in accumulated other comprehensive income or loss as a separate component of stockholders’ equity.

The Company’s intercompany accounts are denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany receivables that the Company considers to be of a long-term investment nature are recorded as a cumulative translation adjustment in accumulated other comprehensive income or loss as a separate component of stockholders’ equity, while gains and losses resulting from the remeasurement of intercompany receivables from a foreign subsidiary for which the Company anticipates settlement in the foreseeable future are recorded in the condensed consolidated statements of operations and comprehensive loss. The net gains and losses included in net loss in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020 were not significant.

Cash and Cash Equivalents, Restricted Cash, and Investments, Policy [Policy Text Block]

Cash and Cash Equivalents, Restricted Cash, and Investments

The Company considers all highly liquid investments with original maturities of 90 days or less at the time of purchase to be cash equivalents.

Restricted cash as of September 30, 2021 and December 31, 2020 includes $1.2 million and $1.2 million, respectively, in cash accounts held as collateral primarily under the terms of an office operating lease, credit cards, and automobile leases.

The Company’s investments as of September 30, 2021 consisted of corporate money market funds, commercial paper and corporate bonds and were classified as available-for-sale. Investments classified as available-for-sale are measured at fair value, and net unrealized gains and losses are recorded as a component of accumulated other comprehensive income (loss) on the balance sheet until realized. Realized gains and losses on sales of investment securities are determined based on the specific-identification method and are recorded in interest expense, net. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method. Such amortization and accretion is included in interest expense, net. The Company held no investments as of December 31, 2020. There were no gross realized gains or losses for the three or nine months ended September 30, 2021, and September 30, 2020. There have been no unrealized gains or losses reclassified from accumulated other comprehensive income (loss). Investments with remaining maturities at date of purchase greater than 90 days and remaining maturities as of the reporting period less than one year are classified as short-term investments. Investments with remaining maturities greater than one year are classified as long-term investments.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentrations and Credit Risk

The Company’s principal financial instruments subject to potential concentration of credit risk are cash and cash equivalents, and investments, including amounts held in money market funds, commercial paper, and corporate bonds. The Company places cash deposits with a federally insured financial institution. The Company maintains its cash at banks and financial institutions it considers to be of high credit quality; however, the Company’s domestic cash deposits may at times exceed the Federal Deposit Insurance Corporation’s insured limit. Balances in excess of federally insured limitations may not be insured. The Company has not experienced losses on these accounts, and management believes that the Company is not exposed to significant risks on such accounts. Investments are stated at their estimated fair values, based on quoted market prices for the same or similar instruments. The counterparties to the agreements relating to the Company’s investments consist of various major corporations, financial institutions, and government agencies of high credit standing.

The Company’s accounts receivable are derived from sales and leases to customers located throughout the world. The Company evaluates its customers’ financial condition and, generally, requires no collateral from its customers. The Company provided reserves for potential credit losses and recorded no bad debt charges during the three and nine months ended September 30, 2021 and 2020. The Company had four customers who constituted 58% of the Company’s net accounts receivable as of September 30, 2021. The Company had seven customers who constituted 68% of the Company’s net accounts receivable at December 31, 2020. The Company had one customer who accounted for 61% of revenue in the three months ended September 30, 2021 and nine customers who accounted for 57% of revenue in the three months ended September 30, 2020. The Company had two customers who accounted for 50% of revenue in the nine months ended September 30, 2021 and nine customers who accounted for 58% of revenue in the nine months ended September 30, 2020.

Receivable [Policy Text Block]

Accounts Receivable

Accounts receivable are recorded at net realizable value, which includes an allowance for estimated uncollectible accounts. The allowance for uncollectible accounts was determined on a customer specific basis based on deemed collectability. The allowance for doubtful accounts was $1.7 million and $1.8 million as of September 30, 2021 and December 31, 2020, respectively.

Inventory, Policy [Policy Text Block]

Inventories

Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or net realizable value. Inventory costs include direct materials, direct labor, and normal manufacturing overhead. The Company records reserves, when necessary, to reduce the carrying value of inventory to its net realizable value. Management considers forecast demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles when determining excess and obsolescence and net realizable value adjustments. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Any inventory on hand at the measurement date in excess of the Company's current requirements based on anticipated levels of sales is classified as long-term on the Company's condensed consolidated balance sheets. The Company's classification of long-term inventory requires it to estimate the portion of on hand inventory that can be realized over the upcoming twelve months.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Intellectual Property

Intellectual property consists of purchased patent rights and developed technology acquired as part of previous business acquisitions. Amortization of the patent rights is recorded using the straight-line method over the estimated useful life of the patents of 10 years. Amortization of the developed technology is recorded using the straight-line method over the estimated useful life of 5 to 7 years.

The Company periodically evaluates intellectual property for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. To determine the recoverability, the Company evaluates the probability that future estimated undiscounted net cash flows will be less than the carrying amount of the assets. If such estimated cash flows are less than the carrying amount of the assets, then such assets are written down to their fair value. No impairment of intellectual property was identified during the three and nine months ended September 30, 2021 and 2020.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment consists primarily of operating lease Senhance System assets, machinery, manufacturing equipment, demonstration equipment, computer equipment, furniture, leasehold improvements, and purchased software which are recorded at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows:

Operating lease assets – Senhance System leasing (in years)	5
Machinery, manufacturing and demonstration equipment (in years)	3	-	5
Computer equipment (in years)	3
Furniture (in years)	5
Leasehold improvements	Lesser of lease term or 3 to 10 years
Purchased Software	5

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred.

The Company reviews its property and equipment assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine the recoverability, the Company evaluates the probability that future estimated undiscounted net cash flows will be less than the carrying amount of the assets. If such estimated cash flows are less than the carrying amount of the assets, then such assets are written down to their fair value. The Company did not identify any impairment during the three and nine months ended September 30, 2021 and 2020.

Employer Retention Tax Credit, Policy [Policy Text Block]

Other Receivable – Employee Retention Tax Credit

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) included an Employee Retention Tax Credit (“ERTC”) provision designed to encourage employers to keep employees on their payroll. The ERTC is a refundable tax credit against certain payroll taxes paid by employers for eligible wages paid between March 13, 2020 and December 13, 2020 that meet requirements of the ERTC provision. On March 11, 2021, the American Rescue Plan Act was enacted extending the deadline of the ERTC to December 31, 2021 and expanded who is eligible to claim the credit. For the three and nine months ended September 30, 2021 we submitted an ERTC refund for $1.3 million and recorded the amount into Other Income (Expense) on the condensed consolidated statements of operations and comprehensive loss. The Company believes there is a reasonable assurance that it will comply with the relevant conditions of the employee retention credit provision of the CARES Act and that it will receive the credit.

Debt, Policy [Policy Text Block]

Notes Payable – Payroll Protection Program

The Company’s policy is to account for forgivable loans received through the U.S. Small Business Administration (the “SBA”) under the CARES Act Payroll Protection Program (“PPP”), as debt in accordance with ASC 470, Debt, and other related accounting pronouncements. The forgiveness of debt, in whole or part, is recognized once the debt is extinguished, which occurs when the Company is legally released from the liability by the SBA. Any portion of debt forgiven, adjusted for accrued interest forgiven and unamortized debt issuance costs, is recorded as a gain on extinguishment of debt, and presented in the condensed consolidated statements of operations and comprehensive loss. On June 10, 2021, the Company received notification from the SBA that the principal amount of its PPP loan of $2.8 million and related interest had been forgiven.

Contingent Consideration [Policy Text Block]

Contingent Consideration

Contingent consideration is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones, future Euro-to-USD exchange rates, and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the condensed consolidated statements of operations and comprehensive loss.

On September 21, 2015, the Company completed the strategic acquisition, through its wholly owned subsidiary TransEnterix International, from Sofar S.p.A., an Italian company (“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 related to a milestone of €15.0 million which 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 or in the event that (i) the Company or Asensus International is acquired, (ii) the Company significantly reduce 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.

Warrant Liabilities [Policy Text Block]

Warrant Liabilities

The Company’s Series B Warrants (see Note 9) were measured at fair value using a simulation model which took into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock, its expected volatility, holding cost and the risk-free interest rate for the term of the warrant (see Note 3). The warrant liability was revalued at each reporting period and changes in fair value were recognized in the condensed consolidated statements of operations and comprehensive loss. The selection of the appropriate valuation model and the inputs and assumptions that are required to determine the valuation requires significant judgment and requires management to make estimates and assumptions that affect the reported amount of the related liability and reported amounts of the change in fair value. Actual results could differ from those estimates, and changes in these estimates are recorded when known. All remaining outstanding Series B Warrants were exercised in the first quarter 2021.

Revenue [Policy Text Block]

Revenue Recognition

The Company’s revenue consists of product revenue resulting from the sale and lease of Systems, System components, instruments and accessories, and service revenue. The Company accounts for a contract with a customer when there is a legally enforceable contract between the Company and the customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. The Company's revenues are measured based on consideration specified in the contract with each customer, net of any sales incentives and taxes collected from customers that are remitted to government authorities. The Company’s System sale arrangements generally include a five-year service period; the first year of service is generally free and included in the System sale arrangement and the remaining four years are generally included at a stated service price.

The Company’s System sale arrangements generally contain multiple products and services. For these consolidated sale arrangements, the Company accounts for individual products and services as separate performance obligations if they are distinct, which is if a product or service is separately identifiable from other items in the consolidated package, and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The Company’s System sale arrangements may include a combination of the following performance obligations: system(s), system components, instruments, accessories, and system services.

For arrangements that contain multiple performance obligations, revenue is allocated to each performance obligation based on its relative estimated standalone selling price. When available, standalone selling prices are based on observable prices at which the Company separately sells the products or services; however due to limited sales to date, standalone selling prices generally are not directly observable. The Company estimates the standalone selling price using the market assessment approach considering market conditions and entity-specific factors including, but not limited to, features and functionality of the products and services, geographies, type of customer, and market conditions. The Company regularly reviews estimated standalone selling prices and updates these estimates if necessary.

The Company recognizes revenues when or as the performance obligations are satisfied by transferring control of the product or service to a customer. The Company generally recognizes revenue for the performance obligations as follows:

•

System sales. For Systems and System components sold directly to end customers (including those arising from System purchases under lease rights to purchase), revenue is recognized when the Company transfers control to the customer, which is generally at the point when acceptance occurs that indicates customer acknowledgment of delivery or installation, depending on the terms of the arrangement. For Systems sold through distributors, for which distributors are responsible for installation, revenue is recognized generally at the time of shipment. The Company’s System arrangements generally do not provide a right of return. The Systems are generally covered by a one-year warranty. Warranty costs were not material for the periods presented.

•

Instruments and accessories. Revenue from sales of instruments and accessories is recognized when control is transferred to the customers, which generally occurs at the time of shipment, but also occurs at the time of delivery depending on the customer arrangement.

•

Service. Service revenue is recognized ratably over the term of the service period as the customers benefit from the service throughout the service period. Revenue related to services performed on a time-and-materials basis is recognized when performed.

The following table presents revenue disaggregated by type and geography:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)				(in thousands)
U.S.
Systems	$	78	$	101	$	262	$	176
Instruments and accessories		60		82		201		149
Services		105		106		307		278
Total U.S. revenue		243		289		770		603

Outside of U.S. ("OUS")
Systems		1,332		131		2,762		257
Instruments and accessories		706		122		1,351		410
Services		290		272		873		798
Total OUS revenue		2,328		525		4,986		1,465

Total
Systems		1,410		232		3,024		433
Instruments and accessories		766		204		1,552		559
Services		395		378		1,180		1,076
Total revenue	$	2,571	$	814	$	5,756	$	2,068

The Company recognizes sales by geographic area based on the country in which the customer is based. Operating lease revenue from Senhance System leasing is included as Systems in the above table and was approximately $0.3 million and $0.2 million in the three months ended September 30, 2021 and 2020, respectively, and $0.9 million and $0.4 million in the nine months ended September 30, 2021 and 2020, respectively.

Transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which the revenue has not yet been recognized. A significant portion of this amount relates to service obligations performed under the Company's system sales contracts that will be invoiced and recognized as revenue in future periods. Transaction price allocated to remaining performance obligations was approximately $2.7 million and $3.1 million as of September 30, 2021 and December 31, 2020, respectively.

The Company invoices its customers based on the billing schedules in its sales arrangements. Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the arrangements. Contract assets are included in accounts receivable and totaled $0.1 million and $0.1 million as of September 30, 2021 and December 31, 2020, respectively. Deferred revenue for the periods presented was primarily related to service obligations, for which the service fees are billed up-front, generally annually. The associated deferred revenue is generally recognized ratably over the service period. The Company did not have any significant impairment losses on its contract assets for the periods presented. Revenue recognized for the three months ended September 30, 2021 and 2020 that was included in the deferred revenue balance at the beginning of each reporting period was $0.1 million and $0.1 million, respectively. Revenue recognized for the nine months ended September 30, 2021 and 2020 that was included in the deferred revenue balance at the beginning of each reporting period was $0.5 million and $0.5 million, respectively. The aggregate amount of transaction price allocated to performance obligations that remain unsatisfied as of September 30, 2021 was $2.7 million, which is expected to be recognized as revenue over one to three years.

In connection with assets recognized from the costs to obtain a contract with a customer, the Company determined that the sales incentive programs for its sales team do not meet the requirements to be capitalized as the Company does not expect to generate future economic benefits from the related revenue from the initial sales transaction and such costs are expensed as incurred.

Lessor, Leases [Policy Text Block]

Senhance System Leasing

The Company enters into lease arrangements with certain qualified customers. Revenue related to arrangements including lease elements are allocated to lease and non-lease elements based on their relative standalone selling prices. Lease elements generally include a Senhance System, while non-lease elements generally include instruments, accessories, and services. For some lease arrangements, the customers are provided with the right to purchase the leased System at some point during and/or at the end of the lease term. In some arrangements lease payments are based on the usage of the System.

In determining whether a transaction should be classified as a sales-type, operating, or direct financing lease, the Company considers the following terms at lease commencement: (1) whether title of the Senhance System transfers automatically or for a nominal fee by the end of the lease term, (2) whether the present value of the minimum lease payments equals or exceeds substantially all of the fair value of the leased System, (3) whether the lease term is for the major part of the remaining economic life of the leased System, (4) whether the lease grants the lessee an option to purchase the leased System that the lessee is reasonably certain to exercise, and (5) whether the underlying System is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term. All such arrangements through September 30, 2021 are classified as operating leases.

Revenue related to lease elements from operating lease arrangements is generally recognized on a straight-line basis over the lease term or based upon System usage and is presented as product revenue. Revenue related to lease elements from operating lease arrangements was approximately $0.3 million and $0.2 million for the three months ended September 30, 2021 and 2020, respectively, and $0.9 million and $0.4 million for the nine months ended September 30, 2021 and 2020, respectively.

Cost of Goods and Service [Policy Text Block]

Cost of Revenue

Cost of revenue consists of contract manufacturing, materials, labor, and manufacturing overhead incurred internally to produce the products. Shipping and handling costs incurred by the Company are included in cost of revenue. During the three months ended September 30, 2021 and 2020, the Company recorded $0.1 million and $0 million, respectively, of expenses for inventory obsolescence related to certain System components. During the nine months ended September 30, 2021 and 2020, the Company recorded $0.4 million and $0 million, respectively, of expenses for inventory obsolescence related to certain System components.

Research and Development Expense, Policy [Policy Text Block]

Research and Development Costs

Research and development expenses primarily consist of engineering, product development and regulatory expenses, incurred in the design, development, testing and enhancement of our products. Research and development costs are expensed as incurred.

Share-based Payment Arrangement [Policy Text Block]

Stock-Based Compensation

The Company recognizes expenses for share-based awards exchanged for services rendered equal to the estimated fair value of these awards over the requisite service period. The Company recognizes as expense, the grant-date fair value of stock options and other stock-based compensation issued to employees and non-employee directors over the requisite service periods, which are typically the vesting periods. The Company uses the Black-Scholes-Merton model to estimate the fair value of our stock options. The volatility assumption used in the Black-Scholes-Merton model is based on the Company’s historical volatility. The expected term of options granted has been determined based upon the simplified method, because the Company does not have sufficient historical information regarding its options to derive the expected term. Under this approach, the expected term is the mid-point between the weighted average of vesting period and the contractual term. The risk-free interest rate is based on U.S. Treasury rates whose term is consistent with the expected life of the stock options. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero. The Company estimates forfeitures based on its historical experience and adjust the estimated forfeiture rate based upon actual experience. For awards with performance conditions, we begin recognizing compensation expense when it becomes probable that the performance condition will be attained.

The fair value of restricted stock units is determined by the market price of the Company’s common stock on the date of grant.

The Company records as expense the fair value of stock-based compensation awards, including stock options and restricted stock units. Compensation expense for stock-based compensation was approximately $3.0 million and $1.9 million for the three months ended September 30, 2021 and 2020, respectively, and was approximately $6.6 million and $5.8 million for the nine months ended September 30, 2021 and 2020, respectively.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets or liabilities for the temporary differences between financial reporting and tax basis of the Company’s assets and liabilities, and for tax carryforwards at enacted statutory rates in effect for the years in which the asset or liability is expected to be realized. The effect on deferred taxes of a change in tax rates is recognized in income during the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amounts expected to be realized. The Company has elected to account for global intangible low-taxed income (“GILTI”) as a period expense in the year the tax is incurred.

The Company recognizes the financial statement benefit of an income tax position only after determining that the relevant taxing authority would more likely than not sustain the position following audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority. The Company recognizes interest accrued related to unrecognized tax benefits and penalties in the provision for income taxes.

Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require application of significant judgment. The Company is subject to U.S. federal and various state, local and foreign jurisdictions. Due to the Company’s net operating loss carryforwards, the Company may be subject to examination by authorities for all previously filed income tax returns.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Loss

Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Segment Reporting, Policy [Policy Text Block]

Segments

The Company operates in one business segment—the research, development and sale of medical device robotics to improve minimally invasive surgery. The Company’s chief operating decision maker (determined to be the Chief Executive Officer) does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results.

Approximately 77% and 27% of the Company’s total consolidated assets are located within the U.S. as of September 30, 2021 and December 31, 2020, respectively. The remaining assets are mostly located in Europe and are primarily related to the Company’s facility in Italy, and include intellectual property, inventories, property and equipment, cash, prepaid expenses, operating lease right-of-use assets, accounts receivable, restricted cash, net deferred tax assets, and other current and long-term assets of $45.5 million and $56.8 million as of September 30, 2021 and December 31, 2020, respectively. Total assets outside of the United States amounted to 23% and 73% of total consolidated assets as of September 30, 2021 and December 31, 2020, respectively. Long-term assets in the U.S. were 58% and 11%, Switzerland were 23% and 41%, and Italy were 17% and 48%, as of September 30, 2021 and December 31, 2020, respectively. The Company recognizes sales by geographic area based on the country in which the customer is based. For the three months ended September 30, 2021 and 2020, 9% and 36%, respectively, of net revenue were generated in the United States; while 82% and 46%, respectively, were generated in Europe; and 9% and 18% were generated in Asia. For the nine months ended September 30, 2021 and 2020, 13% and 29%, respectively, of net revenue were generated in the United States; while 55% and 50%, respectively, were generated in Europe; and 32% and 21% were generated in Asia.

New Accounting Pronouncements, Policy [Policy Text Block]

Impact of Recently Issued Accounting Standards

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740, Income Tax and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 effective January 1, 2021; the adoption did not result in a material impact on the Company's financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is designed to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. When determining such expected credit losses, the guidance requires companies to apply a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This guidance is effective on a modified retrospective basis for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The guidance is not expected to have a material impact on the Company's financial statements and related disclosures.

In August 2020, the FASB issued ASU 2020-06 Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (subtopic 815-40) guidance on the accounting for convertible debt instruments and contracts in an entity’s own equity. The guidance simplifies the accounting for convertible instruments by reducing the various accounting models that can require the instrument to be separated into a debt component and equity component or derivative component. Additionally, the guidance eliminated certain settlement conditions previously required to be able to classify a derivative in equity. The new guidance is effective on a modified or full retrospective basis for fiscal years beginning after December 15, 2023, including interim periods with those fiscal years. The Company is currently evaluating the impact on the condensed consolidated financial statements upon adoption.

The Company has evaluated all other issued and unadopted ASUs and believes the adoption of these standards will not have a material impact on its condensed consolidated statements of operations and comprehensive loss, balance sheets, or statements of cash flows.

Note 2 - Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Property Plant and Equipment Useful Life [Table Text Block]

Operating lease assets – Senhance System leasing (in years)	5
Machinery, manufacturing and demonstration equipment (in years)	3	-	5
Computer equipment (in years)	3
Furniture (in years)	5
Leasehold improvements	Lesser of lease term or 3 to 10 years
Purchased Software	5

Disaggregation of Revenue [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)				(in thousands)
U.S.
Systems	$	78	$	101	$	262	$	176
Instruments and accessories		60		82		201		149
Services		105		106		307		278
Total U.S. revenue		243		289		770		603

Outside of U.S. ("OUS")
Systems		1,332		131		2,762		257
Instruments and accessories		706		122		1,351		410
Services		290		272		873		798
Total OUS revenue		2,328		525		4,986		1,465

Total
Systems		1,410		232		3,024		433
Instruments and accessories		766		204		1,552		559
Services		395		378		1,180		1,076
Total revenue	$	2,571	$	814	$	5,756	$	2,068

Note 3 - Fair Value (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	September 30, 2021
	(in thousands)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets measured at fair value
Cash and cash equivalents⁽¹⁾	$	59,779	$	-	$	-	$	59,779
Restricted cash		1,153		-		-	$	1,153
Short-term investments		-		57,972		-	$	57,972
Long-term investments		-		30,142		-	$	30,142
Total assets measured at fair value	$	60,932	$	88,114	$	-	$	149,046
Liabilities measured at fair value
Contingent consideration	$	-	$	-	$	4,949	$	4,949
Total liabilities measured at fair value	$	-	$	-	$	4,949	$	4,949

	December 31, 2020
	(in thousands)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets measured at fair value
Cash and cash equivalents	$	16,363	$	-	$	-	$	16,363
Restricted cash		1,166		-		-		1,166
Total assets measured at fair value	$	17,529	$	-	$	-	$	17,529
Liabilities measured at fair value
Contingent consideration	$	-	$	-	$	3,936	$	3,936
Warrant liabilities		-		-		255		255
Total liabilities measured at fair value	$	-	$	-	$	4,191	$	4,191

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

	December 31,
Series B Warrants	2020

Valuation methodology	Black-Scholes-Merton
Term (years)		1.32
Risk free rate		0.10	%
Dividends		-
Volatility		150.97	%
Share price	$	0.63

Weighted Average (range, if applicable)

Valuation

Significant

September 30,

December 31,

Methodology

Unobservable Input

2021

2020

Contingent consideration

Probability weighted income approach

Milestone dates

2025

2029

2024

2029

Discount rate

9.5%

Volatility

70%

71.0%

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Fair Value Measurement at Reporting Date (Level 3)
	(in thousands)
	Common stock warrants			Contingent consideration
Balance at December 31, 2020	$	255		$	3,936
Exercise of warrants		(2,236	)		-
Change in fair value		1,981			1,013
Balance at September 30, 2021	$	-		$	4,949

Current portion	$	-		$	-
Long-term portion		-			4,949
Balance at September 30, 2021	$	-		$	4,949

Note 4 - Investments (Tables)

9 Months Ended

Sep. 30, 2021

Debt Securities, Available-for-sale [Table Text Block]

	September 30, 2021
	(in thousands)

	Amortized Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Short-term investments		Long-term investments
Commerical Paper	$	28,712	$	-	$	(12	)	$	28,700	$	28,700	$	-
Corporate Bonds		59,455		-		(41	)		59,414		29,272		30,142
Total Investments	$	88,167	$	-	$	(53	)	$	88,114	$	57,972	$	30,142

	Amortized Cost		Fair Value
Mature in less than one year	$	57,997	$	57,972
Mature in one to two years		30,170	$	30,142
Total	$	88,167	$	88,114

Note 5 - Inventories (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Inventory, Current [Table Text Block]

	September 30, 2021		December 31, 2020
	(in thousands)
Finished goods	$	11,154	$	10,749
Raw materials		6,763		8,098
Total inventories	$	17,917	$	18,847

Current portion	$	11,954	$	10,034
Long-term portion		5,963		8,813
Total inventories	$	17,917	$	18,847

Note 6 - Intellectual Property (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	September 30, 2021
	(in thousands)
	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Impact		Net Carrying Amount
Developed technology	$	68,838	$	(57,207	)	$	947	$	12,578
Technology and patents purchased		400		(192	)		34		242
Total intellectual property	$	69,238	$	(57,399	)	$	981	$	12,820

	December 31, 2020
	(in thousands)
	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Impact		Net Carrying Amount
Developed technology	$	68,838	$	(51,734	)	$	4,872	$	21,976
Technology and patents purchased		400		(168	)		59		291
Total intellectual property	$	69,238	$	(51,902	)	$	4,931	$	22,267

Note 9 - Equity Offerings (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Sales Under Sales Agency Agreement [Table Text Block]

	For the Nine Months Ended September 30, 2021
Total shares of common stock sold		19,120,037

Average price per share	$	1.47

Gross proceeds	$	28,100
Commissions earned by Cantor	$	843
Net proceeds	$	27,257

	For the Nine Months Ended September 30, 2021
Total shares of common stock sold		352,880

Average price per share	$	3.47

Gross proceeds	$	1,224
Commissions earned by Agents	$	37
Net proceeds	$	1,187

Note 10 - Basic and Diluted Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	September 30,
	2021		2020
Stock options		5,089,464		4,285,880
Stock warrants		1,013,383		46,498,909
Nonvested restricted stock units		3,891,249		2,915,014
Total		9,994,096		53,699,803

Note 11 - Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2021

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Fiscal Year
Remainder of 2021	$	271
2022		983
2023		728
2024		635
2025		635
Thereafter		3,004
Total minimum lease payments	$	6,256
Less: Amount of lease payments representing interest		(1,697	)
Present value of future minimum lease payments	$	4,559

Note 1 - Organization and Capitalization (Details Textual) - USD ($)	Sep. 30, 2021	May 19, 2021	Dec. 31, 2020
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.001		$ 0.001
The 2021 ATM Offering [Member]
Stock Offering Agreement, Maximum Share Value		$ 100,000,000
Common Stock, Par or Stated Value Per Share (in dollars per share)		$ 0.001

Note 2 - Summary of Significant Accounting Policies 1 (Details Textual) $ in Thousands, € in Millions				3 Months Ended			9 Months Ended			12 Months Ended
	Jun. 10, 2021 USD ($)	Jan. 29, 2021 USD ($)	Jan. 12, 2021 USD ($)	Sep. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2021 EUR (€)	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Retained Earnings (Accumulated Deficit), Ending Balance				$ (769,493)			$ (769,493)			$ (722,912)
Working Capital				125,400			125,400
Proceeds from Warrant Exercises							30,600
Cash, Cash Equivalents, Short-term and Long-term Investments, Excluding Restricted Cash				147,900			147,900
Restricted Cash and Cash Equivalents, Noncurrent, Total				1,200			1,200			1,200
Debt Securities, Available-for-sale, Total				88,114			88,114			0
Debt Securities, Available-for-sale, Realized Gain (Loss), Total				0		$ 0	0		$ 0
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax, Total				0		0	0		0
Accounts Receivable, Allowance for Credit Loss, Ending Balance				1,700			1,700			1,800
Property, Plant and Equipment, Including Purchased Software, Impairment Charges				0		0	0		0
Other Income, Employer Retention Tax Credit				1,311		0	1,311		0
Business Combination, Contingent Consideration, Liability, Total				4,949			$ 4,949			3,936
Period Of Service Sale Arrangement (Year)							5 years	5 years
Period of Service Sale Arrangement at Stated Service Price (Year)							4 years	4 years
Operating Lease, Lease Income, Total				300		200	$ 900		400
Revenue, Remaining Performance Obligation, Amount				2,700			2,700			3,100
Contract with Customer, Asset, after Allowance for Credit Loss, Current, Total				100			100			100
Contract with Customer, Liability, Revenue Recognized				100		100	500		500
Inventory Write-down				100		0	377		0
Share-based Payment Arrangement, Expense				3,000		1,900	$ 6,600		5,800
Number of Operating Segments							1	1
Assets, Total				199,759			$ 199,759			78,258
Non-US [Member]
Assets, Total				45,500			45,500			$ 56,800
Senhance Surgical Robotic System Acquisition[Member]
Business Combination, Contingent Consideration, Liability, Total				4,900			$ 4,900
Business Combination, Contingent Consideration, Liability, Related Milestone \| €								€ 15
Paycheck Protection Program CARES Act [Member]
Debt Instrument, Decrease, Forgiveness	$ 2,800
Minimum [Member] \| Senhance Surgical Robotic System Acquisition[Member]
Business Combination Contingent Consideration Arrangements Target Revenue \| €								€ 25
Patents [Member]
Finite-Lived Intangible Asset, Useful Life (Year)							10 years	10 years
Developed Technology Rights [Member] \| Minimum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)							5 years	5 years
Developed Technology Rights [Member] \| Maximum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)							7 years	7 years
Intellectual Property [Member]
Impairment of Intangible Assets, Finite-lived				$ 0		$ 0	$ 0		$ 0
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Four Customers [Member]
Number of Major Customers							4	4
Concentration Risk, Percentage							58.00%	58.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Seven Customers [Member]
Number of Major Customers										7
Concentration Risk, Percentage										68.00%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| One Customer [Member]
Number of Major Customers				1
Concentration Risk, Percentage				61.00%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Nine Customers [Member]
Number of Major Customers						9			9
Concentration Risk, Percentage						57.00%			58.00%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Two Customers [Member]
Number of Major Customers							2	2
Concentration Risk, Percentage							50.00%	50.00%
Revenue Benchmark [Member] \| Geographic Concentration Risk [Member] \| UNITED STATES
Concentration Risk, Percentage				9.00%		36.00%	13.00%	13.00%	29.00%
Revenue Benchmark [Member] \| Geographic Concentration Risk [Member] \| Europe [Member]
Concentration Risk, Percentage				82.00%		46.00%	55.00%	55.00%	50.00%
Revenue Benchmark [Member] \| Geographic Concentration Risk [Member] \| Asia [Member]
Concentration Risk, Percentage				9.00%		18.00%	32.00%	32.00%	21.00%
Assets, Total [Member] \| Geographic Concentration Risk [Member] \| UNITED STATES
Concentration Risk, Percentage							77.00%	77.00%		27.00%
Assets, Total [Member] \| Geographic Concentration Risk [Member] \| Non-US [Member]
Concentration Risk, Percentage							23.00%	23.00%		73.00%
Long-lived Assets [Member] \| Geographic Concentration Risk [Member] \| UNITED STATES
Concentration Risk, Percentage							58.00%	58.00%		11.00%
Long-lived Assets [Member] \| Geographic Concentration Risk [Member] \| SWITZERLAND
Concentration Risk, Percentage							23.00%	23.00%		41.00%
Long-lived Assets [Member] \| Geographic Concentration Risk [Member] \| ITALY
Concentration Risk, Percentage							17.00%	17.00%		48.00%
Public Offering [Member]
Proceeds from Issuance of Common Stock		$ 79,600			$ 73,400
Registered Direct Offering [Member]
Proceeds from Issuance of Common Stock			$ 28,600		28,600
ATM Offering [Member]
Proceeds from Issuance of Common Stock					$ 27,300		$ 1,200

Note 2 - Summary of Significant Accounting Policies 2 (Details Textual) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01	Sep. 30, 2021
Minimum [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year)	1 year
Maximum [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year)	3 years

Note 2 - Summary of Significant Accounting Policies - Estimated Useful Lives of Assets (Details)	9 Months Ended
	Sep. 30, 2021
Operating Lease Assets [Member]
Property and equipment, estimated useful lives (Year)	5 years
Machinery, Manufacturing and Demonstration Equipment [Member] \| Minimum [Member]
Property and equipment, estimated useful lives (Year)	3 years
Machinery, Manufacturing and Demonstration Equipment [Member] \| Maximum [Member]
Property and equipment, estimated useful lives (Year)	5 years
Computer Equipment [Member]
Property and equipment, estimated useful lives (Year)	3 years
Furniture and Fixtures [Member]
Property and equipment, estimated useful lives (Year)	5 years
Leasehold Improvements [Member] \| Minimum [Member]
Property and equipment, estimated useful lives (Year)	3 years
Leasehold Improvements [Member] \| Maximum [Member]
Property and equipment, estimated useful lives (Year)	10 years
Purchased Software [Member]
Property and equipment, estimated useful lives (Year)	5 years

Note 2 - Summary of Significant Accounting Policies - Revenue Disaggregated by Type and Geography (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenue	$ 2,571	$ 814	$ 5,756	$ 2,068
Systems [Member]
Revenue	1,410	232	3,024	433
Instruments and Accessories [Member]
Revenue	766	204	1,552	559
Service [Member]
Revenue	395	378	1,180	1,076
UNITED STATES
Revenue	243	289	770	603
UNITED STATES \| Systems [Member]
Revenue	78	101	262	176
UNITED STATES \| Instruments and Accessories [Member]
Revenue	60	82	201	149
UNITED STATES \| Service [Member]
Revenue	105	106	307	278
Non-US [Member]
Revenue	2,328	525	4,986	1,465
Non-US [Member] \| Systems [Member]
Revenue	1,332	131	2,762	257
Non-US [Member] \| Instruments and Accessories [Member]
Revenue	706	122	1,351	410
Non-US [Member] \| Service [Member]
Revenue	$ 290	$ 272	$ 873	$ 798

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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Note 3 - Fair Value (Details Textual) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended	9 Months Ended
	Apr. 28, 2017	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability		$ 278	$ 502		$ 1,013	$ 1,770
Number of Units Sold (in shares)	24,900,000
Number of Shares in Each Unit (in shares)	0.077
Shares Issued, Price Per Share (in dollars per share)	$ 1.00
Fair Value Adjustment of Warrants		$ (0)	$ (63)	$ 2,000	$ 1,981	$ 206
Series A Warrant [Member]
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right (in shares)	0.077
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 13.00
Series B Warrant [Member]
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right (in shares)	0.058
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 13.00	$ 0.35			$ 0.35		$ 0.35
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number, Ending Balance (in shares)							567,660

Note 3 - Fair Value - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($)
$ in Thousands

Sep. 30, 2021

Dec. 31, 2020

$ 59,779

^[1]

$ 16,363

1,153

1,166

57,972

30,142

149,046

17,529

4,949

3,936

4,949

4,191

Fair Value, Inputs, Level 1 [Member]

255

59,779

^[1]

16,363

1,153

1,166

60,932

17,529

Fair Value, Inputs, Level 2 [Member]

^[1]

57,972

30,142

88,114

Fair Value, Inputs, Level 3 [Member]

^[1]

4,949

3,936

$ 4,949

4,191