Note 14. Commitments and Contingencies

In connection with our 2007 acquisition of certain intellectual property, we agreed to pay royalties upon production and sale of PHAs. The royalty is $0.05 per pound for the first 500 million pounds of PHA sold and decreases to $0.025 per pound for cumulative sales in excess of that amount until the underlying patents expire. We incurred approximately $0.1 million and $0 in royalties during the quarters ended March 31, 2021 and March 31, 2020, respectively.

In November 2015, we terminated a former executive and terminated our contract with an advisory firm (the “Advisory Contract”), pursuant to which we, through the advisory firm, engaged the individual as an executive of the Company. In December 2015, we deemed the Advisory Contract, together with all related arrangements in connection therewith, void, including any share issuances in connection with such arrangements. We filed suit against the former executive and the advisory firm during 2016, and various counterclaims were filed by the former executive and the advisory firm. During the third quarter of 2020, this matter was settled and we agreed to pay $8 million to resolve all outstanding claims, the executive agreed to the cancellation of any shares issued to such executive pursuant to the Advisory Contract and related arrangements, and the exchange of mutual releases among the parties. The remaining unpaid liability is included in accrued liabilities ($1.3 million and $1.3 million) and other long-term liabilities ($0.9 million and $1.3 million) in the Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020, respectively.

In conjunction with our planned expansion of our Winchester, Kentucky production facility, we had outstanding noncancellable purchase orders of $44.5 million at March 31, 2021. We expect to satisfy these commitments during fiscal 2021.

We may be a party to other legal claims and actions incidental to our business. We do not believe such matters, if any, are material, either individually or in the aggregate, to the Consolidated Financial Statements.