What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-24 compared with 2025-04-24 · 125 added, 92 removed, 213 unchanged (50% 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, 2025 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, 2025 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 have also received CE certification in the EU and approval or local registration to market Optune Lua in certain other countries for the treatment of MPM.

We have also received CE certification for the use of Optune Lua for the treatment of adult patients with metastatic NSCLC concurrently with immune checkpoint inhibitors or docetaxel who have progressed on or after a platinum-based regimen.

We have initiated the local registration requirements for Optune Lua for NSCLC in Germany and are preparing for launch.

We have also received CE certification for the use of Optune Lua for the treatment of adult patients with metastatic NSCLC concurrent with PD-1/PD-L1 inhibitors or docetaxel following progression on or after a platinum-based regimen, and have launched Optune Lua for the treatment of NSCLC in Germany.

We market Optune Gio and Optune Lua in multiple countries around the globe with the majority of our revenues coming from the use of Optune Gio in the U.S., Germany, France and Japan.

We are actively evaluating opportunities to expand our international footprint.

We are actively pursuing contracts with payers to expand access to Optune Lua for patients with NSCLC and MPM and in the meantime we will bill and seek reimbursement from payers on an individual case basis, as applicable.

In June 2024, we presented results from the Phase 3 METIS clinical trial evaluating the use of TTFields therapy and best supportive care for the treatment of adult patients with 1-10 brain metastases from NSCLC following

stereotactic radiosurgery ("METIS").

We are actively pursuing coverage policies with payers to expand access to Optune Lua for patients with NSCLC and MPM and in the meantime we will bill and seek reimbursement from payers on an individual case basis, as applicable.

In May, we presented positive results from the phase 3 PANOVA-3 clinical trial ("PANOVA-3") evaluating the use of TTFields therapy with gemcitabine and nab-paclitaxel ("GnP") for locally advanced, unresectable pancreatic adenocarcinoma at the 2025 American Society of Clinical Oncology Annual Meeting.

Patients treated with TTFields therapy concomitantly with GnP exhibited a median overall survival of 16.2 months compared to 14.2 months in the control arm.

Patients treated with TTFields therapy concomitantly with GnP also demonstrated greater median pain-free survival of 15.2 months compared to 9.1 months in the control arm.

In July, we presented additional quality of life data at the 2025 European Society for Medical Oncology Gastrointestinal Cancers Congress.

Patients treated with TTFields therapy concomitantly with GnP exhibited statistically significant improvements across numerous quality of life measures including, but not limited to, time to deterioration in global health status, delay in time to deterioration due to pain and delay in time to deterioration due to pancreatic pain.

In May, the full results of the PANOVA-3 trial were published in the Journal of Clinical Oncology.

In 2024, we presented data from the Phase 3 METIS clinical trial evaluating the use of TTFields therapy and best supportive care for the treatment of adult patients (n=298) with 1-10 brain metastases from NSCLC following stereotactic radiosurgery ("METIS").

The METIS trial met its primary endpoint, demonstrating a statistically significant improvement in time to intracranial progression for patients treated with TTFields therapy and supportive care compared to patients treated with supportive care alone.

In December 2024, we announced the top-line results from the Phase 3 PANOVA-3 clinical trial evaluating the use of TTFields therapy together with gemcitabine and nab-paclitaxel for the treatment of adult patients with unresectable, locally advanced pancreatic cancer ("PANOVA-3").

The PANOVA-3 trial met its primary endpoint, demonstrating a statistically significant improvement in overall survival for patients treated with TTFields therapy, gemcitabine and nab-paclitaxel compared to patients treated with gemcitabine and nab-paclitaxel alone.

In April 2025, we announced that the results of the PANOVA-3 trial will be presented for the first time at the 2025 American Society of Clinical Oncology Annual Meeting in May 2025.

We intend to submit marketing applications to regulators in our key markets based on the results of the METIS and PANOVA-3 trials.

Subsequent to that presentation, the routine process of cleaning and qualification of the database was concluded.

The final analysis on the fully cleaned and qualified dataset confirmed that METIS met its primary endpoint, demonstrating a statistically significant improvement in time to intracranial progression in patients randomized to receive TTFields therapy.

Patients treated with TTFields therapy and supportive care exhibited a risk reduction of 28% (HR 0.724, p=0.044), with median time to intracranial progression of 15.0 months compared to 7.5 months in patients treated with supportive care alone.

Intracranial progression rates at months 2, 6, 12, and 24 were 13.6% vs 22.1% (p=0.034), 33.7% vs 46.4% (p=0.018), 46.9% vs 59.4% (p=0.023), and 53.6% vs.

65.2% (p=0.031;

post hoc), respectively.

We are in the process of preparing FDA PMA applications for pancreatic cancer and brain metastases from NSCLC indications based on the PANOVA-3 and METIS trials, respectively.

Following pre-submission engagement with the FDA, we expect to file our PANOVA-3 application in the third quarter of 2025.

Our modular PMA shell for the METIS application has been approved by the FDA and we have filed the first 2 of 3 modules.

We expect to complete the METIS full submission by the end of 2025.

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

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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.

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.

In 2018, we granted Zai Lab (Shanghai) Co., Ltd.

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For additional information, see Note 13 to the Consolidated Financial Statements.

Effective January 1, 2025, Ashley Cordova became our Chief Executive Officer (CEO), succeeding Asaf Danziger who retired at year-end 2024.

Prior to becoming our CEO, Ms.

Cordova served as our Chief Financial Officer (CFO) since 2020.

Danziger now serves as Senior Advisor through 2026, and continues to serve on Novocure’s Board of Directors.

Also effective January 1, 2025, Christoph Brackmann became our CFO.

Brackmann joined us in October 2024 as a Senior Finance Advisor.

Prior to joining Novocure, Mr.

Brackmann served as Senior Vice President, Finance at Moderna Inc.

from October 2019 to June 2024.

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

For the three months ended March 31, 2025, our net revenues were $155.0 million.

Our net loss for the three months ended March 31, 2025 was $34.3 million.

As of March 31, 2025, we had an accumulated deficit of $1,188.4 million.

For the three and six months ended June 30, 2025, our net revenues were $158.8 million and $313.8 million.

Our net loss for the three and six months ended June 30, 2025 was $40.1 million and $74.5 million.

As of June 30, 2025, we had an accumulated deficit of $1,228.6 million.

Impact of Current Events

Conflict in Israel

On October 7, 2023, the State of Israel was attacked and is in a state of war.

Since October 2023, the State of Israel has been in a state of war.

As of the date of this filing, we believe that there is no immediate risk to our business facilities or operations.

Our supply chain teams have increased stock levels to mitigate distribution and service risks from our suppliers in Israel.

Our supply chain teams have increased stock levels to mitigate distribution and service risks from our suppliers in Israel, some of whom are single-source suppliers.

Pursuant to our policy to seek and maintain second-source suppliers wherever possible, we are in the process of obtaining second-source suppliers outside of Israel;

however we can provide no assurance that we will secure or maintain such suppliers on a timely basis.

Recent Changes to U.S.

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In recent years, in anticipation of active patient growth and new indication launches, we began onboarding additional suppliers and/or supply nodes to increase the resilience of our network.

As an example, we are in the process of adding production capacity in Mexico and Ireland.

As an example, we are in the final steps of adding production capacity in Mexico and Ireland.

This also helps us now to provide optionality around supply routes to optimize our cost structure, including the emerging tariff landscape.

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On April 9, 2025, the U.S.

temporarily delayed implementation of all new tariffs by 90 days, resulting in a 10% tariff for most countries.

If the tariffs return to the pre-April 9 rates after the pause expires, our current analysis of the global tariff environment leads us to estimate that import duties could increase by as much as $11 million in 2025.

If the pause continues through the end of 2025, we estimate an $8 million impact.

The global tariff environment is changing rapidly, and we cannot be assured that we will not ultimately be negatively impacted further by these changes.

temporarily delayed implementation of the new tariffs with respect to most countries until August 1, 2025, resulting in a 10% tariff for most countries.

On July 12, 2025, President Trump announced that tariffs on certain goods from Mexico and the European Union would be subject to 30% tariffs beginning on August 1, 2025, subject to ongoing negotiations with the U.S.

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

Following these efforts to date, if the tariffs return to the pre-April 9 rates after the pause expires and the July 12 announced tariffs go into effect, our current analysis of the global tariff environment leads us to estimate that import duties could increase by up to approximately $7 million in 2025.

For the three months ended June 30, 2025, we expensed an additional $1.3 million in duties as a result of the higher tariff rates.

The global tariff environment is changing rapidly, and we cannot be assured that we will not ultimately be negatively impacted further by these changes.

Commentary on Results of Operations

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Financial income (expenses), net .

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

gains (losses) from foreign currency transactions.

Financial income (expenses), net primarily consists of interest income from cash balances and short-term investments, credit facility interest expense and related debt issuance costs, 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, 2025 as compared to the three months ended March 31, 2024.

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, 2025 as compared to the three and six months ended June 30, 2024.

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,

2025 2024 2025 2024

Unaudited Unaudited

Net revenues $ 158,805 $ 150,356 $ 313,799 $ 288,859

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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,

2025 2024 2025 2024

Unaudited Unaudited

Cost of revenues $ 973 $ 1,698 $ 2,075 $ 3,446

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The following table includes certain commercial operating statistics for and as of the end of the periods presented.

CNS Lung Total CNS Lung Total

Optune Gio Optune Lua Total Optune Gio Optune Lua Total

Active patients at period end (1)

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4,194 137 4,331 3,937 26 3,963

Three months ended March 31,

CNS Lung Total CNS Lung Total

Three months ended June 30,

Optune Gio Optune Lua Total Optune Gio Optune Lua Total

Prescriptions received in period (2)

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1,598 143 1,741 1,608 26 1,634

(1) Lung includes both active patients in NSCLC and MPM.

Worldwide, there were 44 and 26 active MPM patients on therapy as of as of March 31, 2025 and 2024 and 62 active NSCLC patients on therapy as of as of March 31, 2025.

(2) Lung includes both prescriptions for NSCLC and MPM.

Worldwide, 35 and 19 MPM prescriptions were received in the three months ended March 31, 2025 and 2024 and 92 NSCLC prescriptions were received in the three months ended March 31, 2025.

Three months ended March 31, 2025 compared to three months ended March 31, 2024

Three months ended March 31,

2025 2024 % Change

Six months ended June 30,

Optune GIo Optune Lua Total Optune Gio Optune Lua Total

Prescriptions received in period (2)

United States 1,871 207 2,078 1,933 14 1,947

International markets:

Germany 397 58 455 388 24 412

France 386 — 386 362 — 362

Japan 219 — 219 199 — 199

Other international 333 5 338 350 7 357

International markets - Total 1,335 63 1,398 1,299 31 1,330

3,206 270 3,476 3,232 45 3,277

(1) Optune Lua includes both active patients in NSCLC and MPM.

Worldwide, there were 43 and 25 active MPM patients on therapy as of as of June 30, 2025 and 2024 and 94 and 1 active NSCLC patient(s) on therapy as of as of June 30, 2025 and 2024.

(2) Optune Lua includes both prescriptions for NSCLC and MPM.

Worldwide, 22 , 57 , 24 and 43 MPM prescriptions were received in the three and six months ended June 30, 2025 and 2024 and 121 , 213 , 2 and 2 NSCLC prescriptions were received in the three and six months ended June 30, 2025 and 2024.

Three and six months ended June 30, 2025 compared to three and six months ended June 30, 2024

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

2025 2024 % Change 2025 2024 % Change

Net revenues $ 158,805 $ 150,356 6 % $ 313,799 $ 288,859 9 %

Net revenues.

Net revenues increased 12% to $155.0 million for the three months ending March 31, 2025 from $138.5 million for the same period in 2024.

For the three months ended March 31, 2025, the increase resulted from active patient growth of 11% and reimbursement improvements across geographic markets.

In EMEA, the increase primarily resulted from $7.4 million from continued growth in France, a $3.0 million increase in Germany due to active patient and approval rate increases, and a $3.0 million increase from other European active markets due to active patient growth and receipt of aged collections.

In the U.S., net revenues for the period increased $2.6 million from the same period in 2024.

Net revenues increased 6% to $158.8 million for the three months ending June 30, 2025 from $150.4 million for the same period in 2024.

For the three months ended June 30, 2025 the net revenue increase primarily resulted from a $4.2 million increase from continued growth in France, a $4.0 million increase in Germany from active patient growth and reimbursement improvements, and a $3.0 million increase from the remaining international markets.

Included in these gains is $3.8 million of exchange rate benefits.

This increase was partially offset by $1.5 million less revenue in the United States related to a reduction in one-time benefits for prior period claims.

In addition, net revenues from Greater China were $1.3 million less than prior year.

Recognized revenue from Optune Lua in the quarter was $2.4 million, including $1.3 million from MPM, and $1.1 million from NSCLC.

Three months ended March 31,

2025 2024 % Change

For the six months ended June 30, 2025, the increase primarily resulted from an $11.5 million increase from continued growth in France, a $6.9 million increase in Germany from active patient growth and reimbursement improvements, and a $6.9 million increase from the remaining international markets driven by active patient growth.

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

2025 2024 % Change 2025 2024 % Change

Cost of revenues $ 41,472 $ 34,654 20 % $ 79,993 $ 68,343 17 %

Cost of revenues.

For the three months ended March 31, 2025, the increase in cost of revenues was primarily due to 11% growth in active patients and higher average array costs driven by the new array roll-out and the NSCLC launch.

Excluding sales to Zai, cost of revenues per active patient per month was $2,794 for the three months ended March 31, 2025, an increase of 3% from $2,715 for the same period in 2024, primarily due to higher average array costs driven by the new array roll-out and the NSCLC launch.

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.

For the three and six months ended June 30, 2025, the increase in cost of revenues was primarily due to 9% growth in active patients, higher average array costs driven by the new array roll-out, the NSCLC launch and increased tariffs.

Excluding sales to Zai, cost of revenues per active patient per month was $2,970 for the three months ended June 30, 2025, an increase of 10% from $2,692 for the same period in 2024, primarily due to higher average array costs driven by the new array roll-out and the NSCLC launch.

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.

This quarterly figure is then divided by three to estimate the monthly cost of revenues per active patient.

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.

Cost of products sold to Zai totaled $3.3 million for the three months ended March 31, 2025 compared to $2.7 million for the three months ended March 31, 2024.

Gross margin was 75% for the three months ended March 31, 2025 compared to 76% for the three months ended March 31, 2024.

The reduction in gross margin is due to the aforementioned cost of revenue increase and the completion of the Zai up front license and milestone fees recognition.

Cost of products sold to Zai totaled $3.2 million and $6.5 million for the three and six months ended June 30, 2025 compared to $3.1 million and $5.9 million for the three and six months ended June 30, 2024.

Gross margin was 74% for the three months ended June 30, 2025 compared to 77% for the three months ended June 30, 2024.

The reduction in gross margin is primarily due to the aforementioned increase in cost of revenues.

We expect that our gross margins will continue to be impacted by current and future product enhancements, such as the launch of our new arrays in the U.S.

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Operating Expenses.

Three months ended March 31,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Research, development and clinical studies $ 55,833 $ 54,955 2 % $ 109,610 $ 106,553 3 %

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Research, development and clinical study expenses.

Research, development and clinical study expenses increased 4% to $53.8 million for the three months ended March 31, 2025 from $51.6 million for the same period in 2024.

For the three months ended March 31, 2025, the change was primarily due to a $2.5 million increase in direct clinical trial expenses related to the ramp up of the LUNAR-2, LUNAR-4, and KEYNOTE D58 trials.

Research, development and clinical study expenses increased 2% to $55.8 million for the three months ended June 30, 2025 from $55.0 million for the same period in 2024.

For the three and six months ended June 30, 2025, the change was primarily due to a $1.9 and $2.6 million increase in engineering costs and a $1.8 million and $4.3 million increase in direct clinical trial expenses related to the ramp up of the LUNAR-2 and KEYNOTE D58 trials, partially offset by $3.7 and $6.1 million lower share-based compensation expenses in the three and six periods.

Total research and development expenses can fluctuate quarter-to-quarter dependent upon the amount of clinical research organization services delivered, clinical materials procured and the number of trials actively underway within a given quarter.

Sales and marketing expenses.

Sales and marketing expenses increased 1% to $55.8 million for the three months ended March 31, 2025 from $55.2 million for the same period in 2024.

For the three months ended March 31, 2025, the change was primarily driven by higher costs associated with the expansion of the sales force for NSCLC,

Sales and marketing expenses increased 1% to $57.1 million for the three months ended June 30, 2025 from $56.6 million for the same period in 2024.

For the three months ended June 30, 2025, the change was primarily driven by $3.0 million higher costs associated with the expansion of the sales force for NSCLC and $1.7 million of higher marketing and market access expenses mostly attributable to the NSCLC launches, partially offset by $4.5 million in lower share-based compensation expenses.

For the six months ended June 30, 2025, the change was primarily driven by $7.3 million higher costs associated with the expansion of the sales force for NSCLC, partially offset by $7.1 million lower share-based compensation expenses.

General and administrative expenses.

General and administrative expenses increased 13% to $44.8 million for the three-month period ended March 31, 2025 from $39.5 million for the same period in 2024.

For the three months ended March 31, 2025, these changes were primarily due to a $2.3 million one-time expense to retire a production line related to supply chain optimization efforts and higher personnel and professional service expenses to support the NSCLC launch and preparations for potential future indications.

Three months ended March 31,

2025 2024 % Change

General and administrative expenses increased 17% to $44.0 million for the three-month period ended June 30, 2025 from $37.7 million for the same period in 2024.

For the three months ended June 30, 2025, these changes were primarily due to $3.3 million higher share-based compensation expenses and higher personnel and professional service expenses to support the NSCLC launch and preparations for potential future indications.

For the six-month period ended June 30, 2025, the change was primarily due to $4.4 million of higher share-based compensation expenses, a $2.3 million one-time expense to retire a production line related to supply chain optimization efforts, and higher personnel and professional service expenses to support NSCLC launches and potential future indications.

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

2025 2024 % Change 2025 2024 % Change

Financial income (expenses), net $ 4,542 $ 10,851 (58) % $ 12,112 $ 20,729 (42) %

Financial income (expenses), net.

Financial income decreased $2.3 million or 23%, to $7.6 million for the three months ended March 31, 2025 from $9.9 million in income for the same period in 2024, primarily due to $2.6 million in higher interest expenses related to our senior secured credit facility,

Three months ended March 31,

2025 2024 % Change

Financial income decreased $ 6.3 million or 58%, to $4.5 million for the three months ended June 30, 2025 from $10.9 million in income for the same period in 2024, primarily due to a $2.9 million decrease in interest income on our investments, an increase of $1.5 million of foreign exchange expenses and a non-recurring gain of $1.1 million from the early redemption of our convertible note in the same period in 2024.

Financial income decreased $8.6 million or 42%, to $12.1 million for the six months ended June 30, 2025 from $20.7 million in income for the same period in 2024, primarily due to $3.3 million in higher interest expenses related to our senior secured credit facility, a reduction of $3.2 million in interest income received from our investments and the non-recurring gain of $1.1 million from the early redemption of our convertible note described above.

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

2025 2024 % Change 2025 2024 % Change

Income taxes $ 5,160 $ 10,646 (52) % $ 9,184 $ 17,764 (48) %

Income taxes .

Income taxes decreased 43% to $4.0 million for the three months ended March 31, 2025 from $7.1 million for the same period in 2024.

The change is driven primarily by an increase in tax benefits from share-based compensation deductions in the period.

Income taxes decreased 52% to $5.2 million for the three months ended June 30, 2025 from $10.6 million for the same period in 2024, and decreased 48% to $9.2 million for the six months ended June 30, 2025 from $17.8 million for the same period in 2024.

The changes are driven primarily by an increase in tax benefits from share-based compensation deductions in the periods.

In July 2025, the United States tax code was amended, including significant changes primarily focused on the permanent extension of certain business and international tax provisions enacted as part of the 2017 Tax Cuts and Jobs Act.

Except for certain provisions, the amendments are effective for tax years beginning on or after January 1, 2025 and include, among other things:

(i) bonus depreciation that will allow for full expensing of qualified property;

and (ii) immediate deductibility of domestic research or experimental expenditures.

We are evaluating the impact of the tax law changes and currently estimate a decrease in tax expense of approximately $1.7 million related to the six months ended June 30, 2025.

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,

2025 2024 % Change

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

2025 2024 % Change 2025 2024 % Change

Net income (loss) $ (40,139) $ (33,375) 20 % $ (74,458) $ (72,135) 3 %

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Adjusted EBITDA $ (9,934) $ 1,108 (997) % $ (14,922) $ (3,513) 325 %

Adjusted EBITDA decreased by 8% to $(5.0) million for the three months ended March 31, 2025 from $(4.6) million for the same period in 2024.

For three months ended March 31, 2025, the change in adjusted EBITDA was primarily driven by revenue growth from increasing active patients and reimbursement improvements globally.

Adjusted EBITDA decreased to a loss of $9.9 million for the three months ended June 30, 2025 from profit of $1.1 million for the same period in 2024.

For three months ended June 30, 2025, the change in adjusted EBITDA was

primarily driven by revenue growth from increasing active patients.

The revenue increase drove a $1.6 million increase in gross profit.

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

As of March 31, 2025, we had an accumulated deficit of $1,188.4 million.

As of June 30, 2025, we had an accumulated deficit of $1,228.6 million.

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

At March 31, 2025, we had $929.1 million in cash, cash equivalents and short-term investments, a decrease of $30.7 million compared to $959.9 million at December 31, 2024, primarily caused by by net cash used in operations and used in investing activities.

We believe our cash, cash equivalents and short-term investments as of March 31, 2025 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, 2025, we had $911.5 million in cash, cash equivalents and short-term investments, a decrease of $48.3 million compared to $959.9 million at December 31, 2024, primarily caused by net cash used in operations.

We believe our cash, cash equivalents and short-term investments as of June 30, 2025 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 operating expenses will continue to increase over the next several years and may outpace our gross profit as we prepare to expand into additional indications beyond CNS and Lung.

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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,

2025 2024 Change % Change

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Operating cash flows are also impacted by changes in working capital as a result of collections from trade receivables and payments of accounts payables.

Net cash used in operating activities increased by $4.1 million from $31.6 million net cash used in operating activities for the three months ended March 31, 2024 to $35.7 million net cash used in operating activities for the three months ended March 31, 2025.

This was a result of a $4.4 million reduction in net loss, offset by an $8.0 million decrease in expenses consisting of $4.5 million of shared-based compensation and $3.9 million of accrued interest, a $2.8 million increase in working capital primarily driven by a $5.3 million increase in accounts receivable offset by an $1.8 million increase in accounts payable and accrued expenses, and a decrease of $1.4 million in other long term assets and an increase of $0.6 million in other long-term liabilities.

Net cash used in operating activities increased by $18.3 million from $33.3 million net cash used in operating activities for the six months ended June 30, 2024 to $51.6 million net cash used in operating activities for the six months ended June 30, 2025.

This was a result of a $2.3 million increase in net loss, a $10.2 million decrease of share-based compensation, a $2.4 million increase of accrued interest, a $2.3 million increase in asset write downs and impairment of field equipment, a $12.1 million increase in working capital primarily driven by a $5.6 million decrease in accounts payable and accrued expenses, a $4.7 million increase in accounts receivable, a $1.8 million increase in inventories, and an increase of $2.1 million in other long term assets offset by an increase of $3.4 million in other long-term liabilities.

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 $6.5 million for the three months ended March 31, 2025, compared to $246.2 million provided by investing activities for the three months ended March 31, 2024.

The $6.5 million net cash used in investing activities for the three months ended March 31, 2025 was primarily attributable to $4.1 million of net proceeds of short term investments and the purchase of $10.6 million of property and equipment.

The $246.2 million net cash provided by investing activities for the three months ended March 31, 2024 was primarily attributable to $258.0 million of net proceeds from maturity of short term investments and by the purchase of $11.8 million of property and equipment.

Net cash provided by investing activities was $29.5 million for the six months ended June 30, 2025, compared to $128.2 million used in investing activities for the six months ended June 30, 2024.

The $29.5 million net cash provided by investing activities for the six months ended June 30, 2025 was primarily attributable to $45.6 million of net proceeds of short term investments and the purchase of $16.1 million of property and equipment.

The $128.2 million net cash used in investing activities for the six months ended June 30, 2024 was primarily attributable to $105.0 million of net purchase of short-term investments and by the purchase of $23.2 million of property and equipment.

Financing activities.

Net cash provided by financing activities was $5.2 million for the three months ended March 31, 2025, as compared to $0.2 million provided by financing activities for the three months ended March 31, 2024, attributable to the exercise of options under the Company's share option plan.

Net cash provided by financing activities was $7.6 million for the six months ended June 30, 2025, as compared to $87.5 million provided by financing activities for the six months ended June 30, 2024, attributable for $97.2 million to the proceeds of senior secured debt, offset for $12.9 million for the partial repayment of the convertible loan and to the the exercise of options under the Company's share option plan.

Convertible Notes

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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) we have received positive results from our PANOVA-3 phase 3 clinical trial or (B) our trailing net revenues for the most recently completed four quarters as reported in our financial statements filed with the U.S.

Under the Loan Agreement, the Borrower is required to give notice of its intent 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 give notice of its intent to draw an additional $100.0 million of the Facility (the "Tranche C Loan") if (i) (A) we have received positive results from our PANOVA-3 phase 3 clinical trial or (B) our trailing net revenues for the most recently completed four quarters as reported in our 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 Notes 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) we receive an approval or clearance from the U.S.

Food and Drug Administration for our Tumor Treating Fields device

for a pancreatic cancer indication or (ii) Trailing Four Quarters of Net Revenue is greater than $625.0 million.

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

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

The closing date of each of the Tranche B Loan, Tranche C Loan and Tranche D Loan is ninety (90) days after we give the respective notice of our intent to draw.

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

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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 we are 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.

The Loan Agreement contains a

financial covenant only if the Tranche C Loan and/or Tranche D Loan are funded, in which case we are 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, 2025 we have borrowed the Tranche A Loan in the principal amount of $100,000 and on that date we gave notice of intent to draw the Tranche B Loan, which will close on September 26, 2025.

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