What changed in this filing

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Item 1. Financial Statements

2021-10-28 compared with 2021-07-29 · 60 added, 34 removed, 352 unchanged (21% of the section changed)

3 unchanged sentences

dollars in thousands (except share data)

September 30,

2021 December 31, 2020

19 unchanged sentences

dollars in thousands (except share data)

September 30,

2021 December 31, 2020

18 unchanged sentences

issued and outstanding:

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

103,817,566 shares and 102,334,276 shares at September 30, 2021 (unaudited) and December 31, 2020, respectively

Additional paid-in capital 1,073,532 1,111,435

7 unchanged sentences

dollars in thousands (except share and per share data)

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

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2021 2020 2021 2020 2020

20 unchanged sentences

dollars in thousands

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

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2021 2020 2021 2020 2020

28 unchanged sentences

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

Share-based compensation to employees — 25,758 — — 25,758

Exercise of options and vested RSUs 176,328 3,042 — — 3,042

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

— — 219 — 219

Net income (loss) — — — ( 13,124 ) ( 13,124 )

Balance as of September 30, 2021 (Unaudited) 103,817,566 $ 1,073,532 $ ( 900 ) $ ( 659,468 ) $ 413,164

NOVOCURE LIMITED AND SUBSIDIARIES

19 unchanged sentences

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

Share-based compensation to employees — 20,121 — — 20,121

Exercise of options and vested RSUs 707,606 9,514 — — 9,514

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

— — 296 — 296

Net income (loss) — — — 9,284 9,284

Balance as of September 30, 2020 (Unaudited) 101,728,327 $ 946,267 $ ( 3,236 ) $ ( 635,994 ) $ 307,037

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

2 unchanged sentences

dollars in thousands

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

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2021 2020 2021 2020 2020

32 unchanged sentences

dollars in thousands

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

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2021 2020 2021 2020 2020

42 unchanged sentences

CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

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

Cash equivalents include items almost as liquid as cash with maturity periods of three months or less when purchased.

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

September 30,

2021 December 31,

2 unchanged sentences

Money market funds 422,082 214,335

Treasury bills 239,987 —

Total cash and cash equivalents $ 689,837 $ 234,674

The Company also invests in marketable U.S.

Treasury Bills (“T-bills”) that are classified as held-to-maturity securities.

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

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

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

September 30,

2021 December 31,

Unaudited Audited

Treasury bills $ 199,948 607,902

Term deposits 44,000 —

Short-term investments $ 243,948 607,902

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 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.

The Company invests in marketable U.S.

Treasury Bills (“T-bills”) that are classified as held-to-maturity securities.

The amortized cost and recorded basis of the T-bills are presented as cash and cash equivalents and short-term investments according their maturity periods.

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 September 30, 2021 and December 31, 2020 was $ 243,964 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 June 30, 2021 and December 31, 2020, the Company’s inventories were composed of:

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

September 30,

2021 December 31,

9 unchanged sentences

Pledged deposits and bank guarantees.

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 .

As of September 30, 2021 and December 31, 2020, the Company pledged bank deposits of $ 1,408 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 $ 1,747 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 June 30, 2021, the Company had no outstanding balance borrowed under the facility.

As of September 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 June 30, 2021 and December 31, 2020 are as follows:

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

September 30,

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 June 30, 2021 and December 31, 2020 were $ 495,271 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 September 30, 2021 and December 31, 2020 were $ 476,789 and $ 450,437 , respectively.

Finance expense related to the Notes was as follows:

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

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2021 2020 2021 2020

15 unchanged sentences

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

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

As of September 30, 2021, 14,467,854 ordinary shares were available for grant under the 2015 Plan.

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

Nine months ended September 30, 2021

of options Weighted

3 unchanged sentences

Forfeited and canceled ( 101,320 ) 60.64

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

Outstanding as of September 30, 2021 8,625,486 $ 32.61

Exercisable options 5,153,158 $ 19.35

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

For the nine months ended September 30, 2021, options to purchase 918,859 ordinary shares were exercised, resulting in the issuance of 918,859 ordinary shares.

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

Nine months ended September 30, 2021

of RSU/PSUs Weighted

4 unchanged sentences

Forfeited and cancelled ( 52,283 ) 89.79

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

Unvested as of September 30, 2021 (1) 4,458,832 65.44

(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 September 30, 2021, in accordance with ASC 718 as follows:

September 30, 2021

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

4 unchanged sentences

94,813 $ 114.26 10,833

2,929,756 $ 150,551

These PSUs will be expensed over the performance period when the vesting conditions become probable in accordance with ASC 718.

1 unchanged sentence

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

As of September 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:

Six months ended June 30, Year ended December 31,

Nine months ended September 30, Year ended December 31,

Unaudited Audited

9 unchanged sentences

Risk-free interest rate 0.05 %- 0.09 %

0.17 %- 1.57 %

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 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,

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

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2021 2020 2021 2020

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

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2021 2020 2021 2020

13 unchanged sentences

The following table presents long-lived assets by location:

September 30,

2021 December 31,

8 unchanged sentences

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

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

Three months ended September 30, Nine months ended September 30, Year ended December 31,

2021 2020 2021 2020

8 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