What changed in this filing

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Item 1. Financial Statements

2021-07-29 compared with 2021-04-29 · 68 added, 47 removed, 318 unchanged (27% of the section changed)

44 unchanged sentences

issued and outstanding:

103,187,460 shares and 102,334,276 shares at March 31, 2021 (unaudited) and December 31, 2020, respectively

103,641,238 shares and 102,334,276 shares at June 30, 2021 (unaudited) and December 31, 2020, respectively

Additional paid-in capital 1,044,732 1,111,435

7 unchanged sentences

dollars in thousands (except share and per share data)

Three months ended March 31, Year ended December 31,

Three months ended June 30, Six months ended June 30, Year ended December 31,

2021 2020 2021 2020 2020

Unaudited Audited

Unaudited Unaudited Audited

Net revenues $ 133,517 $ 115,925 $ 268,212 $ 217,753 $ 494,366

18 unchanged sentences

dollars in thousands

Three months ended March 31, Year ended December 31,

Three months ended June 30, Six months ended June 30, Year ended December 31,

2021 2020 2021 2020 2020

Unaudited Audited

Unaudited Unaudited Audited

Net income (loss) $ ( 14,641 ) $ 1,655 $ ( 18,769 ) $ 5,607 $ 19,808

19 unchanged sentences

Balance as of March 31, 2021(Unaudited) 103,187,460 $ 1,005,785 $ ( 1,948 ) $ ( 631,703 ) $ 372,134

Share-based compensation to employees — 27,881 — — 27,881

Proceeds from issuance of shares 17,291 2,371 — — 2,371

Exercise of options and vested RSUs 436,487 8,695 — — 8,695

Other comprehensive income (loss), net of tax benefit of $ 0

— — 829 — 829

Net income (loss) — — — ( 14,641 ) ( 14,641 )

Balance as of June 30, 2021 (Unaudited) 103,641,238 $ 1,044,732 $ ( 1,119 ) $ ( 646,344 ) $ 397,269

NOVOCURE LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

dollars in thousands (except share data)

Ordinary shares Additional

10 unchanged sentences

Balance as of March 31, 2020 (Unaudited) 100,362,973 $ 892,510 $ ( 3,629 ) $ ( 646,933 ) $ 241,948

Share-based compensation to employees — 18,770 — — 18,770

Proceeds from issuance of shares 33,075 1,667 — — 1,667

Exercise of options and vested RSUs 624,673 3,685 — — 3,685

Other comprehensive income (loss), net of tax benefit of $ 0

Net income (loss) — — — 1,655 1,655

Balance as of June 30, 2020 (Unaudited) 101,020,721 $ 916,632 $ ( 3,532 ) $ ( 645,278 ) $ 267,822

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2 unchanged sentences

dollars in thousands

Three months ended March 31, Year ended December 31,

Three months ended June 30, Six months ended June 30, Year ended December 31,

2021 2020 2021 2020 2020

Unaudited Audited

Unaudited Unaudited Audited

Cash flows from operating activities:

27 unchanged sentences

Cash, cash equivalents and restricted cash at the end of the period $ 360,587 $ 197,585 $ 360,587 $ 197,585 $ 246,173

Three months ended March 31, Year ended December 31,

NOVOCURE LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

dollars in thousands

Three months ended June 30, Six months ended June 30, Year ended December 31,

2021 2020 2021 2020 2020

Unaudited Audited

Unaudited Unaudited Audited

Supplemental cash flow activities:

14 unchanged sentences

The Company also has a License and Collaboration Agreement (the "Zai Agreement") with Zai Lab (Shanghai) Co., Ltd.

("Zai") to market Optune in Greater China.

("Zai") to market Optune in China, Hong Kong, Macau and Taiwan ("Greater China").

Financial statement preparation .

2 unchanged sentences

The preparation of these consolidated financial statements in conformity with U.S.

generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes.

generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes.

Actual results could differ materially from those estimates.

6 unchanged sentences

Similarly, the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument.

Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium.

Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under Accounting Standards Codification ("ASC Topic 815"), Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium.

Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share (EPS), which is consistent with the Company’s accounting treatment under the current standard.

10 unchanged sentences

Cash equivalents include items almost as liquid as cash, such as certificates of deposit and time deposits with maturity periods of three months or less when purchased.

As of March 31, 2021 and December 31, 2020, the Company’s cash and cash equivalents were composed of:

As of June 30, 2021 and December 31, 2020, the Company’s cash and cash equivalents were composed of:

2021 December 31,

6 unchanged sentences

The amortized cost and recorded basis of the T-bills are presented as short-term investments.

As of March 31, 2021 and December 31, 2020, the Company’s short-term investments were:

As of June 30, 2021 and December 31, 2020, the Company’s short-term investments were:

2021 December 31,

1 unchanged sentence

Short-term investments $ 549,907 $ 607,902

Quoted market prices were applied to determine the fair value of cash equivalents and short-term investments, therefore they were categorized as Level 1 in accordance with Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures.” The estimated fair value of the Company’s short-term investments as of March 31, 2021 and December 31, 2020 was $ 549,890 and $ 607,905 , respectively.

Quoted market prices were applied to determine the fair value of cash equivalents and short-term investments, therefore they were categorized as Level 1 in accordance with ASC 820, “Fair Value Measurements and Disclosures.” The estimated fair value of the Company’s short-term investments as of June 30, 2021 and December 31, 2020 was $ 549,921 and $ 607,905 , respectively.

Inventories are stated at the lower of cost or net realizable value.

The weighted average methodology is applied to determine cost.

As of March 31, 2021 and December 31, 2020, the Company’s inventories were composed of:

As of June 30, 2021 and December 31, 2020, the Company’s inventories were composed of:

2021 December 31,

9 unchanged sentences

Pledged deposits and bank guarantees.

As of March 31, 2021 and December 31, 2020, the Company pledged bank deposits of $ 1,409 and $ 1,438 , respectively, to cover bank guarantees in respect of its leases of operating facilities and obtained bank guarantees for the fulfillment of the Company’s lease and other contractual commitments of $ 1,649 and $ 1,687 , respectively .

As of June 30, 2021 and December 31, 2020, the Company pledged bank deposits of $ 1,418 and $ 1,438 , respectively, to cover bank guarantees in respect of its leases of operating facilities and obtained bank guarantees for the fulfillment of the Company’s lease and other contractual commitments of $ 1,750 and $ 1,687 , respectively .

Senior secured revolving credit facility.

1 unchanged sentence

For additional information, see Note 12(c) to the Consolidated Financial Statements in the 2020 10-K.

As of March 31, 2021, the Company had no outstanding balance borrowed under the facility.

As of June 30, 2021, the Company had no outstanding balance borrowed under the facility.

CONVERTIBLE NOTE

7 unchanged sentences

Accordingly, from and after the date of the election, upon conversion of any Notes, holders of Notes will receive, with respect to each $ 1,000 principal amount of Notes converted, cash in an amount up to $ 1,000 and the balance of the conversion value, if any, in ordinary shares (the "Conversion Shares").

The net carrying amount of the liability and equity components of the Notes as of March 31, 2021 and December 31, 2020 are as follows:

The net carrying amount of the liability and equity components of the Notes as of June 30, 2021 and December 31, 2020 are as follows:

2021 December 31,

9 unchanged sentences

Net carrying amount of equity component $ — $ 132,474

(1) An effective interest rate determines the fair value of the Notes, therefore they are categorized as Level 3 in accordance with ASC 820, "Fair Value Measurements and Disclosures." The estimated fair value of the Net carrying amount of liability component of the Notes as of March 31, 2021 and December 31, 2020 were $ 477,841 and $ 450,437 , respectively.

(1) An effective interest rate determines the fair value of the Notes, therefore they are categorized as Level 3 in accordance with ASC 820, "Fair Value Measurements and Disclosures." The estimated fair value of the Net carrying amount of liability component of the Notes as of June 30, 2021 and December 31, 2020 were $ 495,271 and $ 450,437 , respectively.

Finance expense related to the Notes was as follows:

Three months ended March 31, Year ended December 31,

Unaudited Audited

Three months ended June 30, Six months ended June 30, Year ended December 31,

2021 2020 2021 2020

Unaudited Unaudited Audited

Amortization of debt discount

1 unchanged sentence

Amortization of debt issuance costs

976 — 1,685 — 333

Total finance expense recognized

9 unchanged sentences

RSUs and PSUs granted under the 2015 Plan that are canceled before expiration become available for future grants.

As of March 31, 2021, 14,450,270 ordinary shares were available for grant under the 2015 Plan.

A summary of the status of the Company’s option plans as of March 31, 2021 and changes during the period then ended is presented below:

Three months ended March 31, 2021

As of June 30, 2021, 14,521,697 ordinary shares were available for grant under the 2015 Plan.

A summary of the status of the Company’s option plans as of June 30, 2021 and changes during the period then ended is presented below:

Six months ended June 30, 2021

of options Weighted

3 unchanged sentences

Forfeited and canceled ( 88,627 ) 58.14

Outstanding as of March 31, 2021 9,170,513 $ 31.63

Outstanding as of June 30, 2021 8,720,097 $ 32.09

Exercisable options 5,101,756 $ 18.81

For the three months ended March 31, 2021, options to purchase 404,591 ordinary shares were exercised, resulting in the issuance of 404,591 ordinary shares.

A summary of the status of the Company’s RSUs and PSUs as of March 31, 2021 and changes during the period then ended is presented below.

Three months ended March 31, 2021

For the six months ended June 30, 2021, options to purchase 798,511 ordinary shares were exercised, resulting in the issuance of 798,511 ordinary shares.

A summary of the status of the Company’s RSUs and PSUs as of June 30, 2021 and changes during the period then ended is presented below.

Six months ended June 30, 2021

of RSU/PSUs Weighted

4 unchanged sentences

Forfeited and cancelled ( 40,380 ) 83.60

Unvested as of March 31, 2021 (1) 4,544,204 64.69

(1) Includes PSUs that have a mix of service, market and other milestone performance vesting conditions which are vested upon achievements of performance milestones which are not probable, as of March 31, 2021, in accordance with ASC 718 as follows:

March 31, 2021

PSUs Fair value at grant date per PSU Total fair value at gtant date

Unvested as of June 30, 2021 (1) 4,486,706 65.02

(1) Includes PSUs that have a mix of service, market and other milestone performance vesting conditions which are vested upon achievements of performance milestones which are not probable, as of June 30, 2021, in accordance with ASC 718 as follows:

June 30, 2021

PSUs Fair value at grant date per PSU Total fair value at grant date

2,703,852 $ 48.16 $ 130,218

6 unchanged sentences

In the United States, the ESPP is intended to be an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code and the provisions of the ESPP are construed in a manner consistent with the requirements of such section.

As of March 31, 2021, 5,006,367 ordinary shares were available to be purchased by eligible employees under the ESPP.

As of June 30, 2021, 4,989,076 ordinary shares were available to be purchased by eligible employees under the ESPP.

The fair value of share-based awards was estimated using the Black-Scholes model for all equity grants.

1 unchanged sentence

We assessed fair value using the following underlying assumptions:

Three months ended March 31, Year ended December 31,

Six months ended June 30, Year ended December 31,

Unaudited Audited

1 unchanged sentence

Expected term (years) 5.50 - 6.00

6.25 5.50 - 6.00

Expected volatility 60 %- 62 %

1 unchanged sentence

0.39 %- 0.86 %

0.30 %- 0.86 %

Dividend yield 0.00 % 0.00 % 0.00 %

3 unchanged sentences

Dividend yield 0.00 % 0.00 % 0.00 %

The total non-cash share-based compensation expense related to all of the Company’s equity-based awards recognized for the three months ended March 31, 2021 and 2020 and the year ended December 31, 2020 was:

Three months ended March 31, Year ended December 31,

Unaudited Audited

The total non-cash share-based compensation expense related to all of the Company’s equity-based awards recognized for the three and six months ended June 30, 2021 and 2020 and the year ended December 31, 2020 was:

Three months ended June 30, Six months ended June 30, Year ended December 31,

2021 2020 2021 2020

Unaudited Unaudited Audited

Cost of revenues $ 827 $ 559 $ 1,560 $ 1,149 $ 2,221

7 unchanged sentences

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per ordinary share:

Three months ended March 31, Year ended December 31,

Unaudited Audited

Net income (loss) attributable to ordinary shares as reported $ ( 4,128 ) $ 3,952 $ 19,808

Net income (loss) used in computing basic net income (loss) per share $ ( 4,128 ) $ 3,952 $ 19,808

Adjustment needed in calculating diluted net income (loss) per share — — —

Net income (loss) used in computing diluted net income (loss) per share $ ( 4,128 ) $ 3,952 $ 19,808

Three months ended June 30, Six months ended June 30, Year ended December 31,

2021 2020 2021 2020

Unaudited Unaudited Audited

Net income (loss) attributable to ordinary shares as reported used in computing basic and diluted net income (loss) per share $ ( 14,641 ) $ 1,655 $ ( 18,769 ) $ 5,607 $ 19,808

Weighted average number of ordinary shares used in computing basic net income (loss) per share 103,484,866 100,718,893 103,061,557 100,298,230 100,930,866

20 unchanged sentences

The Company’s revenues by geographic region, based on the customer’s location, are summarized as follows:

Three months ended March 31, Year ended December 31,

Unaudited Audited

Three months ended June 30, Six months ended June 30, Year ended December 31,

2021 2020 2021 2020

Unaudited Unaudited Audited

United States $ 87,139 $ 81,209 $ 173,047 $ 150,468 $ 340,782

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements