Discontinued Operations

6 Months Ended

Jun. 30, 2018

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

4. Discontinued Operations

In connection with the Globus Transaction, the Company entered into a product manufacture and supply agreement (the “Supply Agreement”) with Globus, pursuant to which the Company supplies to Globus certain of its implants and instruments (the “Products”), previously offered for sale by the Company in international markets at agreed-upon prices for a minimum term of three years, with the option for Globus to extend the term for up to two additional twelve month periods subject to Globus meeting specified purchase requirements. In accordance with authoritative guidance, sales to Globus are reported under continuing operations as the Company has continuing involvement under the Supply Agreement.

During the three months ended June 30, 2018, the Company recorded $1.6 million in revenue and $1.5 million in cost of revenue from the Supply Agreement in continuing operations and during the six months ended June 30, 2018, the Company recorded $3.7 million in revenue and $3.5 million in cost of revenue from the Supply Agreement in continuing operations. Included in the results of continuing operations for the three months ended June 30, 2017 are revenues of $2.4 million and cost of revenue of $2.1 million and for the six months ended June 30, 2017 revenues of $6.9 million and cost of revenue of $5.9 million from the Supply Agreement. The Company recorded an immaterial amount and $0.1 million in general and administrative expenses pertaining to discontinued operations on the Company’s condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2018 and 2017, respectively.

In addition, on September 1, 2016, the Company entered into a five-year term credit, security and guaranty agreement with Globus (the “Globus Facility Agreement”), as further described in Note 5, pursuant to which Globus agreed to loan the Company up to $30 million, subject to the terms and conditions set forth in the Globus Facility Agreement, as amended.