What changed in this filing

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Item 1. Financial Statements

2024-10-30 compared with 2024-07-25 · 83 added, 46 removed, 441 unchanged (23% 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

2 unchanged sentences

CURRENT LIABILITIES:

Convertible note

$ 557,333 $ —

Trade payables 91,319 94,391

3 unchanged sentences

Convertible note

556,508 568,822

Senior secured credit facility, net

9 unchanged sentences

issued and outstanding:

108,013,830 shares and 107,075,754 shares at June 30, 2024 (unaudited) and December 31, 2023, respectively

108,100,392 shares and 107,075,754 shares at September 30, 2024 (unaudited) and December 31, 2023, respectively

Additional paid-in capital 1,454,367 1,353,468

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,

2024 2023 2024 2023 2023

18 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,

2024 2023 2024 2023 2023

28 unchanged sentences

Balance as of June 30, 2024 (Unaudited) 108,013,830 $ 1,422,903 $ ( 3,515 ) $ ( 1,057,638 ) $ 361,750

Share-based compensation to employees — 31,364 — — 31,364

Exercise of options and vested RSUs 86,562 100 — — 100

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

— — ( 1,863 ) — ( 1,863 )

Net income (loss) — — — ( 30,570 ) ( 30,570 )

Balance as of September 30, 2024 (Unaudited) 108,100,392 $ 1,454,367 $ ( 5,378 ) $ ( 1,088,208 ) $ 360,781

Ordinary shares Additional

17 unchanged sentences

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

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,

2024 2023 2024 2023 2023

86 unchanged sentences

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 June 30, 2024 and December 31, 2023, the Company’s cash and cash equivalents and short-term investments were composed of:

June 30, 2024

As of September 30, 2024 and December 31, 2023, the Company’s cash and cash equivalents and short-term investments were composed of:

September 30, 2024

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

23 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, all investments mature in one year or less.

As of September 30, 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 June 30, 2024 and December 31, 2023, the Company’s inventories were composed of:

As of September 30, 2024 and December 31, 2023, the Company’s inventories were composed of:

September 30,

2024 December 31,

9 unchanged sentences

Pledged deposits and bank guarantees.

As of June 30, 2024 and December 31, 2023, the Company pledged bank deposits of $ 2,797 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 $ 3,155 and $ 3,216 , respectively.

As of September 30, 2024 and December 31, 2023, the Company pledged bank deposits of $ 2,350 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 $ 2,720 and $ 3,216 , respectively.

In addition, € 15,000 ($ 16,741 ) of the Company's short term investments are pledged to a bank as guarantee for the Company's due execution of cash concentration agreements.

3 unchanged sentences

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

As of June 30, 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.

As of September 30, 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.

LONG-TERM DEBT, NET

2 unchanged sentences

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

As of June 30, 2024, the conditions allowing holders of the Notes to convert were not met.

The Notes are therefore not convertible as of June 30, 2024 and are classified as long-term liability.

As of September 30, 2024, the conditions allowing holders of the Notes to convert were not met.

In June 2024 the Company redeemed $ 14,055 of Notes in consideration of $ 12,913 .

The gain from redemption was reported as finance income in accordance with ASC 470 "Debt with Conversion and Other Options".

The net carrying amount of the liability of the Notes as of June 30, 2024 and December 31, 2023 are as follows:

The net carrying amount of the liability of the Notes as of September 30, 2024 and December 31, 2023 are as follows:

September 30,

2024 December 31,

4 unchanged sentences

Net carrying amount of liability component (1) $ 557,333 $ 568,822

Presented as:

Short-term liability (2)

$ 557,333 $ —

Long-term liability

$ — $ 568,822

(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 June 30, 2024 and December 31, 2023 were $ 507,158 and $ 515,962 , respectively.

The estimated fair value of the net carrying amount of liability component of the Notes as of September 30, 2024 and December 31, 2023 were $ 523,068 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.

1 unchanged sentence

Interest expense is recognized at an annual effective interest rate of 0.59 % over the contractual term of the Notes.

(2) In January 2021, the Company elected to settle all conversions of Notes by a combination of cash and its ordinary shares and the cash portion per $ 1,000 principal amount of Notes for all conversion settlements shall be $ 1,000 .

Holders have the right to convert Notes beginning in August 2025.

Since any conversion will result in the payment of cash as described above, the liability has been reclassified as current.

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,

2024 2023 2024 2023

15 unchanged sentences

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.

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.

2 unchanged sentences

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

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.

1 unchanged sentence

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.

As of June 30, 2024 the Company had borrowed the Tranche A Loan in the principal amount of $ 100,000 .

As of September 30, 2024 the Company had borrowed the Tranche A Loan in the principal amount of $ 100,000 .

September 30,

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 June 30, 2024 and December 31, 2023 were $ 114,187 and $ 0 , respectively.

The estimated fair value of the net carrying amount of liability component of the Notes as of September 30, 2024 and December 31, 2023 were $ 115,011 and $ 0 , 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 Facility 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,

2024 2023 2024 2023

2 unchanged sentences

Amortization of debt issuance costs

187 — 227 — —

Total finance expense recognized

2 unchanged sentences

The Company’s net revenues by geographic region, based on the patient’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,

2024 0 2023 2024 2023 2023

2 unchanged sentences

Germany 16,990 14,683 47,834 45,547 60,210

14,267 — 24,755 — 11,736

France 15,243 4,157 39,998 4,157 11,736

Japan 8,581 7,588 24,062 24,118 31,668

4 unchanged sentences

Total net revenues $ 155,095 $ 127,321 $ 443,954 $ 375,554 $ 509,338

(1) For periods ending prior to December 31, 2023, net revenue for France is included in "Other international markets".

(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 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,

2024 0 2023 2024 2023 2023

5 unchanged sentences

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

September 30,

2024 December 31,

3 unchanged sentences

Deferred revenues (short-term contract liabilities) ( 14,866 ) ( 16,224 )

During the six months ended June 30, 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.

During the nine months ended September 30, 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

In September 2015, the Company adopted the 2015 Omnibus Incentive Plan (the “2015 Plan”).

Under the 2015 Plan, the Company can issue various types of equity compensation awards such as share options, restricted shares, performance shares, restricted share units (“RSUs”), performance-based share units (“PSUs”), long-term cash awards and other share-based awards.

Under the 2015 Plan, the Company can issue various types of equity compensation awards such as share options, restricted

shares, performance shares, restricted share units (“RSUs”), performance-based share units (“PSUs”), long-term cash awards and other share-based awards.

Options granted under the 2015 Plan generally have a two-year or four-year vesting period and expire ten years after the date of grant.

3 unchanged sentences

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

As of June 30, 2024, no ordinary shares were available for grant under the 2015 Plan (see below).

As of September 30, 2024, no ordinary shares were available for grant under the 2015 Plan (see below).

In April 2024, the Company adopted the 2024 Omnibus Incentive Plan (the "2024 Plan"), which replaced the 2015 Plan, effective June 5, 2024 (the "Effective Date") following approval from the Company's shareholders.

6 unchanged sentences

RSUs and PSUs granted under the 2015 Plan and 2024 Plan that are canceled before expiration become available for future grants under the 2024 Plan.

As of June 30, 2024, no awards have been granted under the 2024 Plan and 9,270,636 ordinary shares were available for grant under the 2024 Plan.

A summary of the status of the Company’s option plans as of June 30, 2024 and changes during the period then ended is presented below:

Six months ended June 30, 2024

As of September 30, 2024, 9,581,731 ordinary shares were available for grant under the 2024 Plan.

A summary of the status of the Company’s option plans as of September 30, 2024 and changes during the period then ended is presented below:

Nine months ended September 30, 2024

of options Weighted

3 unchanged sentences

Forfeited and canceled ( 719,823 ) 50.14

Outstanding as of June 30, 2024 11,529,010 $ 32.51

Outstanding as of September 30, 2024 11,432,755 $ 31.92

Exercisable options 6,804,138 $ 35.14

A summary of the status of the Company’s RSUs and PSUs as of June 30, 2024 and changes during the period then ended is presented below.

Six months ended June 30, 2024

A summary of the status of the Company’s RSUs and PSUs as of September 30, 2024 and changes during the period then ended is presented below.

Nine months ended September 30, 2024

of RSU/PSUs Weighted

4 unchanged sentences

Forfeited and cancelled ( 1,252,395 ) 39.97

Unvested as of June 30, 2024 (1) 13,635,457 29.44

(1) Includes PSUs that have a mix of service, market and other milestone performance vesting conditions which are vested upon achievements of performance milestones that are not probable as of June 30, 2024, in accordance with ASC 718 "Compensation — Stock Compensation" as follows:

June 30, 2024

Unvested as of September 30, 2024 (1) 13,353,625 29.33

(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, 2024, in accordance with ASC 718 "Compensation — Stock Compensation" as follows:

September 30, 2024

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

5 unchanged sentences

15,210 87.66 1,333

3,694,807 $ 172,445

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, 2024, 5,557,123 ordinary shares were available to be purchased by eligible employees under the ESPP.

As of September 30, 2024, 5,557,123 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:

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 5.13 %- 5.23 %

4.76 %- 5.38 %

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

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

2024 2023 2024 2023

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,

2024 2023 2024 2023

12 unchanged sentences

The following table presents long-lived assets by location:

September 30,

2024 December 31,

8 unchanged sentences

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.) for the three and six months ended June 30, 2024 and the year ended December 31, 2023, as follows:

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

The Company incurred restructuring costs (including severance pay, garden leave payments, etc.) for the three and nine months ended September 30, 2024 and the year ended December 31, 2023, as follows:

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

2024 2023 2024 2023

8 unchanged sentences

$ — $ — $ 5,455 $ — $ 2,753

These restructuring costs were offset by accrual reversals for the three and six months ended June 30, 2024 and the year ended December 31, 2023 in the amount of $ 0 , $ 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 and six months ended June 30, 2024 and the year ended December 31, 2023 in the amount of $ 330 , $ 1,991 and $ 9,313 , respectively, which relate to the terminated employees' exits from the Company’s equity incentive plan.

These restructuring costs were offset by accrual reversals for the three and nine months ended September 30, 2024 and the year ended December 31, 2023 in the amount of $ 0 , $ 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 and nine months ended September 30, 2024 and the year ended December 31, 2023 in the amount of $ 0 , $ 1,991 and $ 9,313 , respectively, which relate to the terminated employees' exits from the Company’s equity incentive plan.

SUBSEQUENT EVENT

On October 15, 2024, the Company issued a press release announcing that that the U.S.

Food and Drug Administration (FDA) has approved Optune Lua® for concurrent use with PD-1/PD-L1 inhibitors or docetaxel, for the treatment of adult patients with metastatic non-small cell lung cancer who have progressed on or after a platinum-based regimen.

As a result of this approval, the Company expects to expense approximately $ 33,157 related to the vesting of PSUs granted to an executive officer.

See Note 7 above.

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