What changed in this filing

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Item 1. Financial Statements

2024-05-02 compared with 2023-10-26 · 117 added, 110 removed, 310 unchanged (42% of the section changed)

3 unchanged sentences

dollars in thousands (except share data)

September 30,

2024 December 31, 2023

19 unchanged sentences

dollars in thousands (except share data)

September 30,

2024 December 31, 2023

7 unchanged sentences

Long-term debt, net 569,652 568,822

Deferred revenues — 2,878

Long-term leases 25,608 27,420

8 unchanged sentences

issued and outstanding:

106,748,270 shares and 105,049,411 shares at September 30, 2023 (unaudited) and December 31, 2022, respectively

107,603,774 shares and 107,075,754 shares at March 31, 2024 (unaudited) and December 31, 2023, respectively

Additional paid-in capital 1,387,765 1,353,468

7 unchanged sentences

dollars in thousands (except share and per share data)

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

Three months ended March 31, Year ended December 31,

2024 2023 2023

Unaudited Unaudited Audited

Unaudited Audited

Net revenues $ 138,503 $ 122,182 $ 509,338

16 unchanged sentences

dollars in thousands

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

Three months ended March 31, Year ended December 31,

2024 2023 2023

Unaudited Unaudited Audited

Unaudited Audited

Net income (loss) $ ( 38,760 ) $ ( 53,061 ) $ ( 207,043 )

19 unchanged sentences

Balance as of March 31, 2024 (Unaudited) 107,603,774 $ 1,387,765 $ ( 4,147 ) $ ( 1,024,263 ) $ 359,355

Share-based compensation to employees — 32,740 — — 32,740

Proceeds from issuance of shares 81,730 2,883 — — 2,883

Exercise of options and vested RSUs 336,439 4,622 — 4,622

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

— — 710 — 710

Net income (loss) — — — ( 57,418 ) ( 57,418 )

Balance as of June 30, 2023 (Unaudited) 106,605,331 $ 1,306,603 $ ( 1,981 ) $ ( 888,939 ) $ 415,683

Share-based compensation to employees — 26,346 — — 26,346

Exercise of options and vested RSUs 142,939 1,171 — — 1,171

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

— — ( 11 ) — ( 11 )

Net income (loss) — — — ( 49,485 ) ( 49,485 )

Balance as of September 30, 2023 (Unaudited) 106,748,270 $ 1,334,120 $ ( 1,992 ) $ ( 938,424 ) $ 393,704

Ordinary shares Additional

10 unchanged sentences

Balance as of March 31, 2023 (Unaudited) 106,187,162 $ 1,266,358 $ ( 2,691 ) $ ( 831,521 ) $ 432,146

Share-based compensation to employees — 25,823 — — 25,823

Proceeds from issuance of shares 46,709 2,759 — — 2,759

Exercise of options and vested RSUs 121,888 1,984 — — 1,984

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

— — ( 767 ) — ( 767 )

Net income (loss) — — — ( 24,008 ) ( 24,008 )

Balance as of June 30, 2022 (Unaudited) 104,727,685 $ 1,158,348 $ ( 2,095 ) $ ( 714,581 ) $ 441,672

Share-based compensation to employees — 26,305 — — 26,305

Exercise of options and vested RSUs 215,256 4,211 — — 4,211

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

— — ( 211 ) — ( 211 )

Net income (loss) — — — ( 26,576 ) ( 26,576 )

Balance as of September 30, 2022 (Unaudited) 104,942,941 $ 1,188,864 $ ( 2,306 ) $ ( 741,157 ) $ 445,401

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

2 unchanged sentences

dollars in thousands

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

Three months ended March 31, Year ended December 31,

2024 2023 2023

Unaudited Unaudited Audited

Unaudited Audited

Cash flows from operating activities:

6 unchanged sentences

Foreign currency remeasurement loss (gain) 613 ( 127 ) 161

Decrease (increase) in accounts receivables 2,642 11,522 24,094 6,318 2,547

Decrease (increase) in accounts receivables and prepaid expenses

( 3,275 ) 14,511 29,414

Amortization of discount (premium) ( 5,381 ) ( 4,056 ) ( 23,084 )

18 unchanged sentences

Cash, cash equivalents and restricted cash at the end of the period $ 457,363 $ 186,639 $ 242,564

NOVOCURE LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

dollars in thousands

Supplemental cash flow activities:

6 unchanged sentences

Total cash, cash equivalents and restricted cash $ 457,363 $ 186,639 $ 242,564

NOVOCURE LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

dollars in thousands

Non-cash activities:

Right-of-use assets obtained in exchange for lease liabilities $ 282 $ 3,451 $ 18,063

Purchase of property incurred but unpaid at period end $ 1,062 $ — $ 1,714

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

24 unchanged sentences

The Company has no off-balance sheet concentrations of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

Recently announced accounting pronouncements.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2023-07.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2023-09 .

CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash equivalents include items almost as liquid as cash, with maturity periods of three months or less when purchased, and short-term investments include items with maturity dates between three months and one year when purchased.

As of September 30, 2023 and December 31, 2022, the Company’s cash and cash equivalents and short-term investments were composed of:

September 30, 2023

As of March 31, 2024 and December 31, 2023, the Company’s cash and cash equivalents and short-term investments were composed of:

March 31, 2024

Fair value level Adjusted cost basis Unrealized gains Unrealized losses Fair market value Recorded basis Cash and cash equivalents Short-term investments (2)

4 unchanged sentences

Treasury bills Level 1 $ 139,373 $ 72 $ — 139,445 139,373 $ 109,742 $ 29,631

Government and governmental agencies Level 2 $ 24,596 $ — $ ( 15 ) 24,581 24,596 $ — $ 24,596

Corporate debt securities Level 2 $ 293,905 $ 297 $ ( 5 ) 294,197 293,905 $ — $ 293,905

13 unchanged sentences

(1) Changes in fair value of held-to-maturity ("HTM") securities are presented for disclosure purposes as required by ASC 320 "Investments — Debt Securities" and are recorded as finance expenses only if the unrealized loss is identified as a credit loss.

(2) Pursuant to a bank guaranty, $ 15,862 of short-term investments are pledged.

In November 2022, the Company transferred all of its available-for-sale portfolio to HTM as part of the Company's investment strategy.

Such transfers are made at fair value at the date of transfer.

The net unrealized loss on these securities at the date of transfer was $ 911 .

These securities continue to be reported in accumulated comprehensive income (loss) and are amortized over the remaining lives of the securities as an adjustment to the yield.

As of September 30, 2023 and December 31, 2022, the unamortized unrealized loss balances were $ 5 and $ 445 , respectively, and are reported in accumulated other comprehensive income (loss).

(2) Pursuant to a bank guaranty agreement, $ 16,189 of short-term investments are pledged.

In accordance with ASC 820, "Fair Value Measurements and Disclosures," the Company measures its money market funds at fair value.

1 unchanged sentence

This is because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

As of September 30, 2023 and December 31, 2022, all investments mature in one year or less.

As of March 31, 2024 and December 31, 2023, all investments mature in one year or less.

Unrealized losses from debt securities are primarily attributable to changes in interest rates.

2 unchanged sentences

The weighted average methodology is applied to determine cost.

As of September 30, 2023 and December 31, 2022, the Company’s inventories were composed of:

September 30,

As of March 31, 2024 and December 31, 2023, the Company’s inventories were composed of:

2024 December 31,

9 unchanged sentences

Pledged deposits and bank guarantees.

As of September 30, 2023 and December 31, 2022, the Company pledged bank deposits of $ 2,643 and $ 2,296 , 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 $ 2,991 and $ 2,459 , respectively.

As of March 31, 2024 and December 31, 2023, the Company pledged bank deposits of $ 2,798 and $ 2,848 , 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 $ 3,157 and $ 3,216 , respectively.

In addition, € 15,000 ($ 16,189 ) of the Company's short term investments are pledged to a bank as guarantee for the Company's due execution of cash concentration agreements.

Senior secured revolving credit facility.

On November 6, 2020, the Company entered into a three-year $ 150,000 senior secured revolving credit facility ("2020 Credit Facility") with a syndicate of relationship banks.

On February 17, 2023, the Company gave irrevocable notice to the administrative agent under the 2020 Credit Facility that the Company terminated all commitments, effective February 22, 2023.

This effectively terminated the 2020 Credit Facility, as the Company's ability to borrow and the Company's obligations to comply with all covenants ended on such date.

The liens and guaranties in favor of the lenders are released.

There was no early termination fee payable and the Company had no outstanding balance borrowed under the 2020 Credit Facility.

The commitments under the 2020 Credit Facility were guaranteed by certain of the Company's subsidiaries and secured by a first lien on the Company's and certain of its subsidiaries’ assets.

Outstanding loans bore interest per annum at a sliding scale based on a secured leverage ratio from 2.75 % to 3.25 % above the applicable interbank borrowing reference rate for the currency in which the loan is denominated.

Additionally, the 2020 Credit Facility contained 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 contained 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, which are no longer applicable.

Legal Proceedings.

In June 2023, a putative class action lawsuit was filed against the Company, its Executive Chairman and its Chief Executive Officer.

The complaint, which purports to be brought on behalf of a class of persons and/or entities who purchased or otherwise acquired ordinary shares of the Company from January 5, 2023 through June 5, 2023, allege material misstatements and/or omissions in the Company’s public statements with respect to the results from its phase 3 LUNAR clinical trial.

The complaint, later amended to add our Chief Financial Officer as a defendant, which purports to be brought on behalf of a class of persons and/or entities who purchased or otherwise acquired ordinary shares of the Company from January 5, 2023 through June 5, 2023, alleges material misstatements and/or omissions in the Company’s public statements with respect to the results from its phase 3 LUNAR clinical trial.

The Company believes that the action is without merit and plans to defend the lawsuit vigorously.

As of September 30, 2023, the Company has not accrued any amounts in respect of this claim, as it believes liability is not probable and the amount of any potential liability cannot be reasonably estimated.

As of March 31, 2024, the Company has not accrued any amounts in respect of this claim, as it believes liability is not probable and the amount of any potential liability cannot be reasonably estimated.

CONVERTIBLE NOTE

1 unchanged sentence

The Notes mature on November 1, 2025, unless earlier repurchased, redeemed or converted as set forth in the Notes.

As of September 30, 2023, the conditions allowing holders of the Notes to convert were not met.

The Notes are therefore not convertible as of September 30, 2023 and are classified as long-term liability.

The net carrying amount of the liability of the Notes as of September 30, 2023 and December 31, 2022 are as follows:

September 30,

As of March 31, 2024, the conditions allowing holders of the Notes to convert were not met.

The Notes are therefore not convertible as of March 31, 2024 and are classified as long-term liability.

The net carrying amount of the liability of the Notes as of March 31, 2024 and December 31, 2023 are as follows:

2024 December 31,

5 unchanged sentences

(1) An effective interest rate determines the fair value of the Notes, therefore they are categorized as Level 3 in accordance with ASC 820.

The estimated fair value of the net carrying amount of liability component of the Notes as of September 30, 2023 and December 31, 2022 were $ 480,791 and $ 455,091 , respectively.

The estimated fair value of the net carrying amount of liability component of the Notes as of March 31, 2024 and December 31, 2023 were $ 525,865 and $ 515,962 , respectively.

The net carrying amount of the liability is represented by the principal amount of the Notes, less total issuance costs plus any amortization of issuance costs.

2 unchanged sentences

Finance expense related to the Notes was as follows:

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

2023 2022 2023 2022

Unaudited Unaudited Audited

Three months ended March 31, Year ended December 31,

Unaudited Audited

Amortization of debt issuance costs

2 unchanged sentences

$ 830 $ 815 $ 3,313

REVENUE RECOGNITION

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

Three months ended March 31, Year ended December 31,

2024 2023 2023

United States $ 90,543 $ 85,228 $ 349,743

International markets:

Germany 15,747 15,120 60,210

Japan 7,817 8,669 31,668

Other international markets 19,459 7,850 44,493

International markets - Total 43,023 31,639 136,371

Greater China (1) 4,937 5,315 23,224

Total net revenues $ 138,503 $ 122,182 $ 509,338

(1) For additional information, see Notes 12 and 13 to the Consolidated Financial Statements in the 2023 10-K.

The Company's net revenues by performance period are as follows:

Three months ended March 31, Year ended December 31,

2024 2023 2023

Net revenues recognized in the reporting period from performance obligations satisfied in:

Reporting period $ 129,256 $ 117,338 $ 492,089

Previous periods 9,247 4,844 17,249

Total net revenues $ 138,503 $ 122,182 $ 509,338

Contract balances

The following table provides information about trade receivables, unbilled receivables and contract liabilities from contracts with customers:

2024 December 31,

Unaudited Audited

Trade receivables $ 60,401 $ 56,970

Unbilled receivables $ 4,690 $ 4,251

Deferred revenues (short-term contract liabilities) ( 15,870 ) ( 16,224 )

During the three months ended March 31, 2024 and 2023 and the year ended December 31, 2023 the Company recognized $ 16,224 , $ 18,028 and $ 18,028 , respectively, which were included in the deferred revenues (short-term contract liability) balance at January 1, 2024 and 2023.

SHARE OPTION PLANS AND ESPP

4 unchanged sentences

RSUs granted under the 2015 Plan generally vest over a three-year period.

PSUs granted under the 2015 Plan generally vest between a three - and six-year period as performance targets are attained.

granted under the 2015 Plan generally vest between a three - and six-year period as performance targets are attained.

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

As of September 30, 2023, 18,729,954 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, 2023 and changes during the period then ended is presented below:

Nine months ended September 30, 2023

As of March 31, 2024, 11,027,556 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, 2024 and changes during the period then ended is presented below:

Three months ended March 31, 2024

of options Weighted

3 unchanged sentences

Forfeited and canceled ( 180,377 ) 58.72

Outstanding as of September 30, 2023 8,619,882 $ 41.31

Outstanding as of March 31, 2024 11,789,068 $ 32.61

Exercisable options 6,990,097 $ 34.67

For the nine months ended September 30, 2023, options to purchase 787,569 ordinary shares were exercised, resulting in the issuance of 787,569 ordinary shares.

A summary of the status of the Company’s RSUs and PSUs as of September 30, 2023 and changes during the period then ended is presented below.

Nine months ended September 30, 2023

A summary of the status of the Company’s RSUs and PSUs as of March 31, 2024 and changes during the period then ended is presented below.

Three months ended March 31, 2024

of RSU/PSUs Weighted

4 unchanged sentences

Forfeited and cancelled ( 337,925 ) 74.50

Unvested as of September 30, 2023 (1) 5,827,181 64.60

(1) Includes PSUs that have a mix of service, market and other milestone performance vesting conditions which are vested upon achievements of performance milestones that are not probable as of September 30, 2023, in accordance with ASC 718 "Compensation — Stock Compensation" as follows:

September 30, 2023

Unvested as of March 31, 2024 (1) 13,903,851 29.98

(1) Includes PSUs that have a mix of service, market and other milestone performance vesting conditions which are vested upon achievements of performance milestones that are not probable as of March 31, 2024, in accordance with ASC 718 "Compensation — Stock Compensation" as follows:

March 31, 2024

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

5 unchanged sentences

3,777,949 $ 178,226

3,361,441 $ 188,127

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 September 30, 2023, 4,787,003 ordinary shares were available to be purchased by eligible employees under the ESPP.

As of March 31, 2024, 5,735,791 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

The Company assessed fair value using the following underlying assumptions:

Nine months ended September 30, Year ended December 31,

Three months ended March 31, Year ended December 31,

Unaudited Audited

9 unchanged sentences

Risk-free interest rate 5.13 % 4.76 % 4.76 %- 5.38 %

0.19 %- 2.52 %

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 nine months ended September 30, 2023 and 2022, and the year ended December 31, 2022 was:

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

2023 2022 2023 2022

Unaudited Unaudited Audited

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, 2024 and 2023, and the year ended December 31, 2023 was:

Three months ended March 31, Year ended December 31,

Unaudited Audited

Cost of revenues $ 1,747 $ 2,006 $ 6,587

5 unchanged sentences

Basic net income (loss) per share is computed based on the weighted average number of ordinary shares outstanding during each period.

Diluted net income per share is computed based on the weighted average number of ordinary shares outstanding during the period, plus potential dilutive shares (deriving from options, RSUs, PSUs, convertible notes and the ESPP) considered outstanding during the period, in accordance with ASC 260-10 "Earnings Per Share", as determined under the if-converted method.

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

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

2023 2022 2023 2022

Unaudited Unaudited Audited

Three months ended March 31, Year ended December 31,

Unaudited Audited

Net income (loss) attributable to ordinary shares as reported used in computing basic and diluted net income (loss) per share $ ( 38,760 ) $ ( 53,061 ) $ ( 207,043 )

10 unchanged sentences

The following table presents long-lived assets by location:

September 30,

2024 December 31,

3 unchanged sentences

Switzerland 10,940 7,733

Japan 965 1,063

Germany 1,039 762

Others 6,240 5,179

Total long lived assets $ 70,828 $ 62,863

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

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

Restructuring

In November 2023, the Company announced a series of actions to strengthen and optimize its business operations to support near-term growth drivers and long-term value creation.

The plan included a reduction in headcount of approximately 200 employees or 13 % of the Company's then current workforce.

The Company incurred restructuring costs (including severance pay, garden leave payments, etc.) in the amount of $ 2,031 and $ 6,231 for the three months ended March 31, 2024 and the year ended December 31, 2023, respectively, as follows:

Three months ended March 31, Year ended December 31,

Unaudited Audited

Cost of revenues $ 52 $ 262

Research, development and clinical studies 275 2,070

Sales and marketing 1,539 2,404

General and administrative 164 1,495

Total restructuring cost

$ 2,031 $ 6,231

Unaudited Unaudited Audited

United States $ 86,243 $ 102,651 $ 258,429 $ 308,270 $ 406,894

Germany 14,683 6,780 45,547 36,366 46,120

Japan 7,588 7,865 24,118 24,887 32,781

Greater China (1) 6,756 6,164 18,822 16,465 21,332

Others 12,051 7,538 28,638 23,423 30,713

Total net revenues $ 127,321 $ 130,998 $ 375,554 $ 409,411 $ 537,840

(1) For additional information, see Note 12 to the Consolidated Financial Statements in the 2022 10-K.

Restructuring costs paid during the period

$ 5,128 $ 2,753

These restructuring costs were offset by accrual reversals for the three months ended March 31, 2024 and the year ended December 31, 2023 in the amount of $ 369 and $ 3,041 , respectively, which relate to the terminated employees' exits from the Company’s cash incentive plans.

These restructuring costs were further offset by forfeited equity-based compensation expense reversals for the three months ended March 31, 2024 and the year ended December 31, 2023 in the amount of $ 1,661 and $ 9,313 , respectively, which relate to the terminated employees' exits from the Company’s equity incentive plan.

SUBSEQUENT EVENT

On May 1, 2024 Novocure Luxembourg S.a.r.l.

("Borrower"), a wholly-owned subsidiary of the Company, entered into a new five-year senior secured credit facility of up to $ 400.0 million (the "Facility") with BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP (collectively, the "Lenders"), BioPharma Credit PLC, as collateral agent for the Lenders, and the guarantors party to such agreement (the "Loan Agreement").

The Facility may be drawn in up to four drawings.

The Loan Agreement provides for an initial term loan in the principal amount of $ 100.0 million (the "Tranche A Loan"), which was funded to the Borrower on May 1, 2024 (the "Tranche A Funding Date").

Under the Loan Agreement, the Borrower is required to draw $ 100.0 million on the Facility on or before June 30, 2025 (the "Tranche B Loan"), subject to customary conditions precedent as set forth in the Loan Agreement.

Not later than December 31, 2025, the Borrower has the option to draw an additional $ 100.0 million of the Facility (the "Tranche C Loan") if (i) (A) the Company has received positive results from its PANOVA-3 phase 3 clinical trial or (B) the Company's trailing net revenues for the most recently completed four quarters as reported by the Company in its financial statements filed with the U.S.

Securities and Exchange Commission ("Trailing Four Quarters of Net Revenue") are greater than $ 575.0 million and (ii) the Company's Convertible Notes due 2025 are extinguished in full and are no longer outstanding.

Not later than March 31, 2026, the Borrower has the option to draw an additional $ 100.0 million of the Facility (the "Tranche D Loan") if (i) the Company receives an approval or clearance from the U.S.

Food and Drug Administration for the Company's Tumor Treating Fields device for a pancreatic cancer indication or (ii) Trailing Four Quarters of Net Revenue is greater than $ 625.0 million.

The obligations under the Loan Agreement are guaranteed by certain of the Company's subsidiaries and secured by a first lien on the Borrower's and certain of the Company's other subsidiaries’ assets.

Outstanding term loans under the Loan Agreement will bear interest at an annual rate equal to 6.25 % plus the three-month SOFR (subject to a 3.25 % floor), payable quarterly in arrears and calculated on the basis of actual days elapsed in a 360-day year.

The Borrower must pay 2.5 % of additional consideration on each principal draw, with payment for the Tranche A Loan and the Tranche B Loan paid on the Tranche A Funding Date, and payments for the Tranche C Loan and the

Tranche D Loan on their respective funding dates.

Principal under the Facility will be repaid in eight equal quarterly repayments commencing with the third quarter of 2027 and continuing each quarter thereafter, with the final payment of outstanding principal due on the fifth anniversary of the Tranche A Funding Date.

Voluntary prepayment of all, but not less than all, of the term loans outstanding is permitted at any time, subject to make-whole and prepayment premiums as set forth in the Loan Agreement.

Prepayment of all term loans outstanding, subject to make-whole and prepayment premiums, is due and payable upon a change-in-control as defined in the Loan Agreement.

Make-whole and prepayment premiums are due and payable for the Tranche B Loans for any voluntary prepayment of the term loans outstanding, upon a change-in-control (as defined in the Loan Agreement), and upon any acceleration of the maturity date, in each case regardless of whether the Tranche B Loan is drawn.

The Loan Agreement contains a financial covenant only if the Tranche C Loan and/or Tranche D Loan are funded, in which case the Company is required to maintain at least Trailing Four Quarters of Net Revenue of at least $ 500.0 million, calculated on a trailing twelve-month basis as of the end of each fiscal quarter, beginning with the first quarter of 2027 based on year-end 2026 audited financial statements.

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