Distribution Agreement

9 Months Ended

Sep. 30, 2018

7.	Distribution Agreement

In connection with the distribution agreement entered into in December 2014, between the Company and Itochu Corporation, or Itochu, the Company received a distribution fee of $4.0 million in three installments from Itochu for serving as the Company’s exclusive distributor for the sale and delivery of its MRIdian systems within Japan. In August 2016, the Company started recognizing distribution rights revenue ratably over the remaining term of the exclusive distribution agreement of approximately 8.5 years. A time-elapsed method is used to measure progress because control is transferred evenly over the remaining contractual period. The distribution rights revenue was $118 thousand for each of the three months ended September 30, 2018 and 2017, and $356 thousand for each of the nine months ended September 30, 2018, and 2017.