What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-07-28 compared with 2022-04-28 · 96 added, 76 removed, 193 unchanged (47% of the section changed)

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information to assist you in better understanding and evaluating our financial condition and results of operations.

We encourage you to read this MD&A in conjunction with our unaudited consolidated financial statements and the notes thereto for the period ended March 31, 2022 included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We encourage you to read this MD&A in conjunction with our unaudited consolidated financial statements and the notes thereto for the period ended June 30, 2022 included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

This discussion contains forward-looking statements that involve risks and uncertainties.

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We also have a CE certificate to market Optune for the treatment of GBM in the European Union ("EU"), as well as approval or local registration in the United Kingdom ("UK"), Japan and certain other countries.

Optune Lua is approved by the FDA under the Humanitarian Device Exemption ("HDE") pathway to treatment malignant pleural mesothelioma ("MPM") together with standard chemotherapies.

Optune Lua is approved by the FDA under the Humanitarian Device Exemption ("HDE") pathway for the treatment of adult patients with malignant pleural mesothelioma ("MPM") together with standard chemotherapies.

We have also received CE certification in the EU and approval or local registration to market Optune Lua in certain other countries.

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We believe the physical mechanism of action behind TTFields therapy may be broadly applicable to solid tumor cancers.

Currently, we are conducting phase 3 pivotal studies evaluating the use of TTFields in non-small cell lung cancer ("NSCLC"), ovarian cancer, brain metastases from non-small cell lung cancer ("brain metastases") and pancreatic cancer.

In 2021, we completed patient enrollment in our phase 3 pivotal NSCLC and ovarian cancer studies with data anticipated in 2022 and 2023, respectively.

Additionally, we have multiple ongoing phase 2 pilot studies evaluating the use of TTFields.

These studies are in gastric cancer, for which patient enrollment is complete, and stage 3 NSCLC, as well as testing the potential incremental survival benefit of TTFields delivered using high-intensity arrays versus standard arrays.

Currently, we are conducting phase 3 pivotal studies evaluating the use of TTFields in non-small cell lung cancer ("NSCLC"), ovarian cancer, brain metastases from NSCLC, and pancreatic cancer.

In 2021, we completed patient enrollment in our phase 3 pivotal NSCLC and ovarian cancer studies.

Additionally, we have multiple ongoing or recently completed phase 2 pilot studies evaluating the use of TTFields.

These studies are in gastric cancer and stage 3 NSCLC, as well as testing the potential incremental survival benefit of TTFields delivered using high-intensity arrays versus standard arrays.

We are also currently conducting a global phase 4 post-marketing study testing the potential survival benefit of initiating Optune concurrent with radiation therapy versus following radiation therapy in patients with newly diagnosed GBM.

We anticipate expanding our clinical pipeline over time to study the safety and efficacy of TTFields for additional solid tumor indications and combinations with other cancer treatment modalities.

We completed enrollment of the phase 3 pivotal LUNAR trial in November 2021, which began the final patient’s 12-month follow-up period and our clinical operations and data collection efforts remain on track.

Given feedback we received from all interested parties, we recognized a pivotal data release the final week of the year is not ideal for

investigators, clinicians, investors, or potential patients.

For that reason, we are moving the top-line data announcement to early Q1 2023.

In March 2022, we announced that an independent data monitoring committee ("DMC") conducted a pre-specified interim analysis for the phase 3 pivotal INNOVATE-3 study for the treatment of platinum-resistant ovarian cancer.

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The INNOVATE-3 study accrued 540 patients as of October 2021 and data will be reviewed in 2023, following an 18 month follow-up period.

The table below presents the current status of the ongoing clinical studies in our oncology pipeline and anticipated timing of final data.

In May 2022, we entered into a clinical trial collaboration agreement with MSD, a tradename of Merck & Co., Inc., ("MSD") to conduct a double-blind, placebo-controlled study of TTFields concomitant with pembrolizumab and maintenance temozolomide for the treatment of newly diagnosed GBM.

We intend to engage the FDA in pre-submission discussions in the near-term regarding the parameters of the KEYNOTE D58 trial protocol design.

In June 2022, we announced results of the phase 2 pilot EF-31 study evaluating the use of TTFields together with standard-of-care (chemotherapy alone or in combination with trastuzumab for HER2-positive patients) as first-line treatment for gastric cancer.

Initial analysis was conducted with a median follow-up period of 8.6 months.

The primary endpoint, confirmed objective response rate, was 50%.

Median progression-free survival was 7.8 months.

Duration of response was 10.3 months.

Median overall survival had not yet been reached with a one-year survival rate of 72%.

We look forward to further exploration of these potential benefits as we look ahead to a randomized phase 3 clinical study.

In June 2022, we announced the first patient has been enrolled in the phase 2 pilot KEYNOTE B36 study, conducted in collaboration with MSD.

KEYNOTE B36 is designed to evaluate the safety and effectiveness of TTFields together with pembrolizumab for the treatment of locally advanced or metastatic intrathoracic NSCLC that expresses PD-L1.

In June 2022, by mutual agreement with GT Medical Technologies, Inc., we suspended indefinitely our joint plans to conduct a phase 2 pilot study to test the safety and effectiveness of neo-adjuvant TTFields followed by resection, GammaTile Therapy, and adjuvant TTFields for recurrent GBM.

The table below presents the current status of the ongoing clinical studies in our oncology pipeline and anticipated timing of data readout.

Our therapy is delivered through a medical device and we continue to advance our Products with the intention to extend survival and maintain quality of life for patients.

We have several product development programs underway that are designed to optimize TTFields delivery to the target tumor and enhance patient ease of use.

Our intellectual property portfolio contains hundreds of issued patents and numerous patent applications pending worldwide.

Our intellectual

property portfolio contains hundreds of issued patents and numerous patent applications pending worldwide.

We believe we possess global commercialization rights to our Products in oncology and are well-positioned to extend those rights into the future as we continue to find innovative ways to improve our Products.

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We view our operations and manage our business in one operating segment.

For the three months ended March 31, 2022, our net revenues were $137.5 million.

Our net loss for the three months ended March 31, 2022 was $4.6 million.

As of March 31, 2022, we had an accumulated deficit of $690.6 million.

Our net loss resulted primarily from net revenue growth which was more than offset by increasing investments in sales and marketing initiatives that support our growing commercial business, geographic expansion and pre-commercial activities associated with potential future indication launches.

For the three and six months ended June 30, 2022, our net revenues were $140.9 million and $278.4 million, respectively.

Our net loss for the three and six months ended June 30, 2022 were $24.0 million and $28.7 million, respectively.

As of June 30, 2022, we had an accumulated deficit of $714.6 million.

Our net loss resulted primarily from net revenue growth which was more than offset by increasing investments in research, development and clinical trial initiatives and sales and marketing initiatives that support our ongoing exploration of the benefits of TTFields across numerous cancer indications, as well as geographic expansion and pre-commercial activities associated with potential future indication launches.

Impact of COVID-19

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Since the pandemic began, we have been following the guidance of the WHO, the U.S.

Centers for Disease Control and Prevention, and local health authorities in all of our active markets and we have adjusted the way we conduct business to adapt to

the evolving situation.

The COVID-19 pandemic did not have a material impact on our financial results through the first quarter of 2022.

Centers for Disease Control and Prevention, and local health authorities in all of our active markets and we have adjusted the way we conduct business to adapt to the evolving situation.

The COVID-19 pandemic did not have a material impact on our financial results through the second quarter of 2022.

The pandemic has had and is having an impact on our day-to-day operations, which varies by region based on factors such as geographical spread, stage of containment and recurrence of the pandemic in each region.

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For example, outside the U.S., localized lockdowns are causing disruptions in the ability to monitor clinical studies.

In the first quarter of 2022 we were impacted by staff disruptions and turnover internally and at treatment sites, clinical study sites and third-party providers, either directly as a result of illness or indirectly as a result of vaccine mandates and other changes in terms of employment.

TTFields is an emerging modality in cancer care and requires significant educational effort to drive awareness and acceptance of our therapy.

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Financial expenses, net .

Financial expenses, net primarily consists of credit facility interest expense and related debt issuance costs, interest income from cash balances and short-term investments and gains (losses) from foreign currency transactions.

Financial expenses, net primarily consists of debt issuance costs, interest income from cash balances and short-term investments and gains (losses) from foreign currency transactions.

Our reporting currency is the U.S.

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Results of Operations

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021.

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three and six months ended June 30, 2022 as compared to the three and six months ended June 30, 2021.

The tables contained in this section report U.S.

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The following table sets forth our consolidated statements of operations data:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2022 2021 2022 2021

Unaudited Unaudited

Net revenues $ 140,866 $ 133,517 $ 278,413 $ 268,212

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The following table details the share-based compensation expense included in costs and expenses:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2022 2021 2022 2021

Unaudited Unaudited

Cost of revenues $ 1,029 $ 827 $ 1,981 $ 1,560

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The number of active patients on therapy is our principal revenue driver.

An "active patient" is a patient who

is receiving treatment under a commercial prescription order as of the measurement date, including patients who may be on a temporary break from treatment and who plan to resume treatment in less than 60 days.

An "active patient" is a patient who is receiving treatment under a commercial prescription order as of the measurement date, including patients who may be on a temporary break from treatment and who plan to resume treatment in less than 60 days.

Prescriptions are a leading indicator of demand.

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Total 3,454 3,487

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2022 2021 2022 2021

Prescriptions received in period

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Total 1,383 1,450 2,767 2,852

(1) North America includes data for the United States and Canada for the first quarter of 2022 and the United States only for all other periods.

There were 10 active MPM patients on therapy as of March 31, 2022 and 9 MPM prescriptions were received in the three months ended March 31, 2022.

Three months ended March 31, 2022 compared to three months ended March 31, 2021

Three months ended March 31,

2022 2021 % Change

(1) North America includes data for the United States and Canada for 2022 and the United States only for 2021.

There were 8 active MPM patients on therapy as of June 30, 2022 and 11 MPM prescriptions were received in the three months ended June 30, 2022.

Three and six months ended June 30, 2022 compared to three and six months ended June 30, 2021

Three months ended June 30, Six months ended June 30,

2022 2021 % Change 2022 2021 % Change

Net revenues $ 140,866 $ 133,517 6 % $ 278,413 $ 268,212 4 %

Net revenues.

Net revenues increased 2% to $137.5 million for the three-month period ended March 31, 2022 from $134.7 million for the same period in 2021.

The increase resulted primarily from an increase of 95 active patients in our currently active markets, representing 3% growth.

Additionally, for the quarter ended March 31, 2022, net revenue per active patient per month was positively impacted by increased collections for previously denied and appealed claims in the U.S., offset by a negative impact in Germany following contract negotiations with several large German payers.

Net revenues increased 6% to $140.9 million for the three month period ending June 30, 2022 from $133.5 million for the same period in 2021, and increased 4% to $278.4 million for the six month period ended June 30, 2022 from $268.2 million for the same period in 2021.

The increase resulted primarily from an increase in active patients in the U.S.

and Japan and increased collections for previously denied and appealed claims in the U.S.

The increase was partially offset by a reduction in German active patient numbers and approval rates as a result of updated coverage criteria, and the impact of foreign exchange rate fluctuations.

We continue to actively appeal and pursue previously denied claims, but the cadence and size of these collections are impossible to predict.

Three months ended March 31,

2022 2021 % Change

Three months ended June 30, Six months ended June 30,

2022 2021 % Change 2022 2021 % Change

Cost of revenues $ 28,503 $ 28,599 — % $ 56,230 $ 54,984 2 %

Cost of revenues.

Our cost of revenues increased by 5% to $27.7 million for the three months ended March 31, 2022 from $26.4 million for the same period in 2021.

For the three month period, the increase in cost of revenues

was primarily due to the cost of shipping transducer arrays to a higher volume of commercial patients and increasing shipments of equipment to Zai Lab.

Our cost of revenues for the three month period ended June 30, 2022 was $28.5 million, virtually unchanged from $28.6 million for the same period in 2021.

Cost of revenues for the six months ended June 30, 2022 increased by 2% to $56.2 million from $55.0 million for the same period in 2021.

For the six month period ended June 30, 2022, the increase in cost of revenues was primarily driven by increased shipments to Zai and the cost of shipping arrays to a higher average volume of commercial patients, offset by lower manufacturing costs per array.

We continue to focus on opportunities to increase efficiencies and scale within our supply chain.

This includes evaluating new materials, manufacturers, and processes that could lead to lower costs.

Gross margin was 80% for the three months ended March 31, 2022 and 80% for the three months ended March 31, 2021.

Excluding sales to Zai, cost of revenues per active patient per month was $2,413 for the three months ended March 31, 2022, virtually unchanged from $2,415 for the same period in 2021, with increasing supply chain efficiencies offsetting the impact of broader economic challenges.

Gross margin was 80% for the three months ended June 30, 2022 compared to 79% for the three months ended June 30, 2021.Gross margin was 80% for the six months ended June 30, 2022 and 79% for the six months ended June 30, 2021.

Excluding sales to Zai, cost of revenues per active patient per month was $2,391 for the three months ended June 30, 2022, a decrease of 5% from $2,520 for the same period in 2021, with increasing supply chain optimization and cost reduction initiatives more than offsetting the impact of broader economic challenges.

Cost of revenues per active patient is calculated by dividing the cost of revenues for the quarter less equipment sales to Zai for the quarter by the average of the active patients at the end of the prior quarter and the ending active patients in the current quarter.

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Sales to Zai are deducted because they are sold at cost and in anticipation of future royalties from Zai, and Zai patient counts are not included in our active patient population.

Product sales to Zai totaled $1.9 million for the three months ended March 31, 2022 compared to $1.5 million for the three months ended March 31, 2021.

Product sales to Zai totaled $3.4 million and $5.3 million for the three and six months ended June 30, 2022 compared to $2.4 million and $3.9 million for the three and six months ended June 30, 2021.

Operating Expenses.

Three months ended March 31,

2022 2021 % Change

Three months ended June 30, Six months ended June 30,

2022 2021 % Change 2022 2021 % Change

Research, development and clinical studies $ 57,075 $ 50,315 13 % $ 99,309 $ 96,231 3 %

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Research, development and clinical study expenses.

Research, development and clinical study expenses decreased 8% to $42.2 million for the three-month period ended March 31, 2022 from $45.9 million in the same period in 2021, primarily driven by a reduction in direct clinical study costs.

Direct clinical study costs historically represent approximately 30% of total research and development expenses and can fluctuate quarter-to-quarter, dependent on the amount of clinical research organization services delivered and clinical materials procured within a given quarter.

Research, development and clinical study expenses increased 13% to $57.1 million for the three month period ended June 30, 2022 from $50.3 million for the same period in 2021, and increased 3% to $99.3 million for the six month period ended June 30, 2022 from $96.2 million in the same period in 2021, primarily driven by an increase in direct clinical study costs for both the three and six month

Direct clinical study costs can fluctuate quarter-to-quarter, dependent on the amount of clinical research organization services delivered and clinical materials procured within a given quarter.

Sales and marketing expenses.

Sales and marketing expenses increased 21% to $37.9 million for the three-month periods ended March 31, 2022 from $31.4 million for the same period in 2021.

For the three month period, the change was primarily due to an increase in market research and strategic planning activities intended to enhance our commercial capabilities in anticipation of potential future approvals in new indications, including NSCLC and ovarian cancer.

Sales and marketing expenses increased 31% to $44.7 million for the three months ended June 30, 2022 from $34.1 million for the same period in 2021, and increased 26% to $82.6 million for the six month period ended June 30, 2022 from $65.5 million for the same period in 2021.

For the three and six month period ended June 30, 2022, the change was primarily due to an increase in market research and strategic planning activities intended to enhance our commercial capabilities in anticipation of potential future approvals in new indications, including NSCLC and ovarian cancer.

Additionally, we are investing in market access capabilities in order to evaluate opportunities, identify optimal access pathways, and successfully gain reimbursement in new geographies.

General and administrative expenses.

General and administrative expenses decreased 2% to $30.5 million for the three months ended March 31, 2022 from $31.1 million for the same period in 2021.

For the three month periods, the change was primarily due to a decrease in personnel costs.

Three months ended March 31,

2022 2021 % Change

General and administrative expenses decreased 3% to $31.7 million for the three months ended June 30, 2022 from $32.8 million for the same period in 2021, and decreased 3% to $62.2 million for the six months ended June 30, 2022 from $63.9 million for the same period in 2021.

For the three and six month periods, the change was primarily due to a decrease in personnel costs.

Three months ended June 30, Six months ended June 30,

2022 2021 % Change 2022 2021 % Change

Financial expenses (income), net $ 2,228 $ 940 137 % $ 3,937 $ 3,586 10 %

Financial expenses, net.

Financial expenses decreased 35% to $1.7 for the three months ended March 31, 2022 from $2.6 for the same period in 2021.

For the three month periods, the decrease was primarily due to increased interest income and foreign exchange rate fluctuations.

Three months ended March 31,

2022 2021 % Change

Financial expenses increased 137% to $2.2 million for the three months ended June 30, 2022 from $0.9 million for the same period in 2021, and increased 10% to $3.9 for the six months ended June 30, 2022 from $3.6 for the same period in 2021.

For the three and six month periods, the increase was primarily due to increased foreign exchange rate fluctuations offset by interest income.

Foreign exchange rate expenses increased to $3.4 million for the three months ended June 30, 2022 from income of $0.3 million for the same period in 2021, and increased 166% to $4.8 million for the six months ended June 30, 2022 from $1.8 million for the same period in 2021.

Three months ended June 30, Six months ended June 30,

2022 2021 % Change 2022 2021 % Change

Income taxes $ 652 $ 1,406 (54) % $ 2,784 $ 2,800 (1) %

Income taxes.

Income taxes increased by $0.7 million, or 53% to $2.1 million for the three months ended March 31, 2022 compared to a tax expense of $1.4 million for the same period in 2021.

For the three months ended March 31, 2022 the increase reflects a change in the mix of applicable statutory tax rates in active jurisdictions.

Income taxes decreased 54% to $0.7 million for the three months ended June 30, 2022 from $1.4 million for the same period in 2021, and was unchanged at $2.8 million for the six months ended June 30, 2022 compared to the same period in 2021.

For the three months ended June 30, 2022 the increase reflects a change in the mix of applicable statutory tax rates in active jurisdictions.

Non-GAAP financial measures

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The following table reconciles net income (loss), which is the most directly comparable GAAP operating performance measure, to Adjusted EBITDA.

Three months ended March 31,

2022 2021 % Change

Three months ended June 30, Six months ended June 30,

2022 2021 % Change 2022 2021 % Change

Net income (loss) $ (24,008) $ (14,641) 64 % $ (28,655) $ (18,769) 53 %

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Adjusted EBITDA $ 7,349 $ 18,066 (59) % $ 34,198 $ 39,211 (13) %

Adjusted EBITDA for the three months ended March 31, 2022 was $26.8 million.

Net income was roughly flat compared to the same period in 2021, which reflects an increase in net revenue generated in the period, offset by investments in research and development, sales and marketing, and other operational activities intended to maximize future growth opportunities.

Adjusted EBITDA increased by 27% from $21.1 million for the same period in 2021, which was primarily driven by a change in the mix of cash and non-cash based expenses in the form of share-based compensation.

Adjusted EBITDA decreased by 59% to $7.3 million for the three months ended June 30, 2022 from $18.1 million for the same period in 2021, and decreased by 13% to $34.2 million for the six months ended June 30, 2022 from $39.2 million for the same period in 2021.

The changes in both periods were primarily due to a decrease in net income driven by increased investment in research, development and clinical studies and sales and marketing intended to maximize future growth opportunities.

Liquidity and Capital Resources

We have incurred significant losses and cumulative negative cash flows from operations since our founding in 2000.

As of March 31, 2022, we had an accumulated deficit of $690.6 million.

As of June 30, 2022, we had an accumulated deficit of $714.6 million.

To date, we have primarily financed our operations through the issuance and sale of equity and the proceeds from long-term loans.

At March 31, 2022, we had $932.3 million in cash, cash equivalents and short-term investments, a decrease of $5.4 million compared to $937.7 million at December 31, 2021.

We believe our cash, cash equivalents and short-term investments as of March 31, 2022 are sufficient for our operations for at least the next 12 months based on our existing business plan and our ability to control the timing of significant expense commitments.

At June 30, 2022, we had $948.5 million in cash, cash equivalents and short-term investments, an increase of $10.8 million compared to $937.7 million at December 31, 2021.

We believe our cash, cash equivalents and short-term investments as of June 30, 2022 are sufficient for our operations for at least the next 12 months based on our existing business plan and our ability to control the timing of significant expense commitments.

We expect that our research, development and clinical study expenses, sales and marketing expenses and general and administrative expenses will continue to increase over the next several years and may outpace our gross profit.

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The following summary of our cash flows for the periods indicated has been derived from our unaudited consolidated financial statements, which are included elsewhere in this Quarterly Report:

Three months ended March 31,

Six months ended June 30,

2022 2021 Change % Change

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Operating cash flows are also impacted by changes in working capital.

Net cash provided by operating activities decreased by $21.5 million from $17.8 million net cash provided by operating activities for the three months ended March 31, 2021 to $3.7 million net cash used in operating activities for the three months ended March 31, 2022.

This decrease was a result of net income being roughly flat compared to the same period in 2021, with a $27.8 million increase in working capital, including a $12.2 million decrease in accounts payables and accrued expenses, $12.1 million increase in accounts receivables and $3.5 million increase in inventories, partially offset by a $6.2 million change in the mix from cash to non-cash based expenses.

Net cash provided by operating activities decreased by $31.9 million from $44.0 million net cash provided by operating activities for the six months ended June 30, 2021 to $12.1 million net cash provided by operating activities for the six months ended June 30, 2022.

This decrease was a result of net income decreasing by $9.9 million compared to the same period in 2021, with a $24.4 million increase in working capital, including a $9.7 million decrease in accounts payables and accrued expenses, $12.9 million increase in accounts receivables and $5.4 million increase in inventories, partially offset by a $2.4 million change in the mix from cash to non-cash based expenses.

Investing activities.

Our investing activities consist primarily of investments in and redemptions of our short-term investments as well as investments in property and equipment.

Net cash used in investing activities was $17.4 million for the three months ended March 31, 2022, compared to $54.2 million provided by investing activities for the three months ended March 31, 2021.

The net cash used in investing activities for the three months ended March 31, 2022 was primarily attributable to $12.3 million of net purchase of short-term investments, and the purchase of $5.1 million of property and equipment.

The net cash provided by investing activities for the three months ended March 31, 2021 was primarily attributable to $58.2 million of net proceeds from maturity of short-term investments, partially offset by the purchase of $4.0 million of property and equipment.

Net cash provided by investing activities was $138.3 million for the six months ended June 30, 2022, compared to $51.6 million provided by investing activities for the six months ended June 30, 2021.

The net cash provided by investing activities for the six months ended June 30, 2022 was primarily attributable to $147.6 million of net proceeds from maturity of short-term investments, offset by the purchase of $9.2 million of property and equipment.

The net cash provided by investing activities for the six months ended June 30, 2021 was primarily attributable to $58.2 million of net proceeds from maturity of short-term investments, partially offset by the purchase of $6.6 million of property and equipment.

Financing activities.

To date, our primary financing activities have been the sale of equity and the proceeds from long-term loans.

Net cash provided by financing activities was $3.1 million for the three months ended March 31, 2022, as compared to $8.0 million provided by financing activities for the three months ended March 31, 2021.

The net cash provided by financing activities for the three months ended March 31, 2022 and March 31, 2021 included proceeds from the exercise of options under the Company's stock option plan.

Net cash provided by financing activities was $7.9 million for the six months ended June 30, 2022, as compared to $19.0 million provided by financing activities for the six months ended June 30, 2021.

The net cash provided by financing activities for the six months ended June 30, 2022 and June 30, 2021 included proceeds from the issuance of shares as well as proceeds from the exercise of options under the Company's employee stock purchase plan and stock option plan.

Convertible Notes

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In January 2021, we irrevocably elected to settle all conversions of Notes by a combination of cash and our ordinary shares and that the cash portion per $1,000 principal amount of Notes for all conversion settlements shall be $1,000.

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 our ordinary shares

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 our ordinary shares

For more information, see Note 10a.

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Additionally, the 2020 Credit Facility contains a fee for the unused revolving credit commitments at a sliding scale based on our secured leverage ratio from 0.35% to 0.45%.

The 2020 Credit Facility contains financial covenants requiring maintenance of a minimum fixed charge coverage ratio and specifying a maximum senior secured net leverage ratio, as well as customary events of default which include a change of control.

As of March 31, 2022, we were in compliance with such covenants.

As of March 31, 2022, we had no outstanding balance borrowed under the 2020 Credit Facility.

The 2020 Credit Facility contains financial covenants requiring maintenance of a minimum fixed charge coverage

ratio and specifying a maximum senior secured net leverage ratio, as well as customary events of default which include a change of control.

As of June 30, 2022, we were in compliance with such covenants.

As of June 30, 2022, we had no outstanding balance borrowed under the 2020 Credit Facility.

Contractual Obligations and Commitments

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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 2. Management’s Discussion and Analysis