SECURITIES AND EXCHANGE COMMISSION

(Mark One)

☒
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2017~~

2023

☐
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-37565

NovoCure Limited

(Exact Name of Registrant as Specified in Its Charter)

~~Jersey~~	~~98-1057807~~
Jersey		98-1057807
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

~~Le Masurier House~~

~~La Rue Le Masurier~~

No. 4 The Forum

Grenville Street

St. Helier, Jersey JE2 ~~4YE~~

4UF

(Address of principal executive ~~offices)~~

offices, including zip code)

+44 (0) 15 3475 6700

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, no par value	NVCR	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

☐.

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐.

☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer

☒

☐

Accelerated filer

☒

☐

Non-accelerated filer

☐

☐ ~~(Do not check if a smaller reporting company)~~

Smaller reporting company

☐

Emerging growth company

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

☒.

Indicate the number of shares outstanding of each of the ~~registrant’s~~issuer’s classes of common stock, as of the latest practicable date.

~~Class~~
Class						Outstanding as of ~~October 19, 2017~~ July 21, 2023
Ordinary shares, no par value						~~89,363,835~~106,615,874 Shares

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical facts or statements of current condition, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements contained in this report are based on our current plans, expectations, hopes, beliefs, intentions or strategies concerning future developments and their impact on us. Forward-looking statements contained in this report constitute our expectations or forecasts of future events as of the date this report was filed with the Securities and Exchange Commission (the “SEC”) and are not statements of historical fact. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Such statements may include words such as “anticipate,” “will,” “estimate,” “expect,” “project,” “intend,” “should,” “plan,” “believe,” ~~“hope,”~~“hope” and other words and terms of similar meaning in connection with any discussion of, among other things, future operating or financial performance, strategic initiatives and business strategies, regulatory or competitive environments, our intellectual property and ~~delivery system~~ research and ~~development.~~development related to our Tumor Treating Fields devices marketed under various brand names, including Optune and Optune Lua, and software and systems to support and optimize the delivery of Tumor Treating Fields (collectively, our “Products”). In particular, these forward-looking statements include, among others, statements about:

•our research and development, clinical ~~trial~~study and commercialization activities and projected expenditures;

•the further commercialization of ~~Optune®,~~ our ~~first Tumor Treating Fields (“TTFields”) delivery system,~~Products for current and ~~our other TTFields delivery system candidates;~~

future indications;

•our business strategies and the expansion of our sales and marketing ~~efforts in the United States and in other countries;~~

efforts;

•the market acceptance of ~~Optune~~our Products for current and ~~our other TTFields delivery systems~~future indications by patients, physicians, third-party payers and others in the healthcare and scientific community;

•our plans to pursue the use of ~~TTFields~~our Products for the treatment of ~~other~~ solid tumor ~~cancers;~~

cancers other than glioblastoma multiforme (“GBM”) and malignant pleural mesothelioma (“MPM”);

•our estimates regarding revenues, expenses, capital requirements and needs for additional financing;

•our ability to obtain regulatory approvals for ~~additional~~the use of our Products in indications other than GBM and ~~any future TTFields delivery systems;~~

MPM;

•our ability to acquire from third-party suppliers the supplies needed to manufacture our ~~TTFields delivery systems from third-party suppliers;~~

Products;

•our ability to manufacture adequate ~~supply;~~

supply of our Products;

•our ability to secure and maintain adequate coverage from third-party payers to reimburse us for ~~Optune or~~our Products for current and future ~~TTFields delivery systems;~~

indications;

•our ability to receive payment from third-party payers for use of our Products for current and future indications;

•our ability to obtain, maintain, ~~and~~ develop protect, defend or enforce our intellectual property position;

•our ability to manage the risks associated with business disruptions caused by natural disasters, extreme weather events, pandemics such as the COVID-19 pandemic, including the emergence of variant strains, or international conflict and other disruptions outside of our control;

•our cash needs;

and

~~our ongoing legal proceedings and tax audits; and~~

•our prospects, financial condition and results of operations.

These forward-looking statements involve a number of risks and uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these ~~forward-looking~~forward-looking statements. Factors which may cause such differences to occur include those risks and uncertainties set forth under Part I, Item 1A., “Risk Factors” ofin our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016,~~2022 filed on February 23, 2023, as well as other risks and uncertainties set forth from time to time in the reports we file with the ~~U.S. Securities and Exchange Commission~~.SEC. In our prior filings, references to NovoTTF-100L now refer to Optune Lua. We do not intend to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

TRADEMARKS

This Quarterly Report on Form 10-Q includes trademarks of NovoCure Limited and other persons. All trademarks or trade names referred to herein are the property of their respective owners.

Table of Contents

NovoCure Limited

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

1 -

Table of Contents

PART I—~~FINANCI~~ALFINANCIAL INFORMATION

Item 1. Financial Statements

~~NOVOCURE LIMITED AND SUBSIDIARIES~~


NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
	June 30, 2023		December 31, 2022
	Unaudited		Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	156,978	$	115,326
Short-term investments	783,837		854,099
Restricted cash	516		508
Trade receivables, net	70,988		86,261
Receivables and prepaid expenses	20,148		25,959
Inventories	33,023		29,376
Total current assets	1,065,490		1,111,529
LONG-TERM ASSETS:
Property and equipment, net	41,156		32,678
Field equipment, net	11,519		12,684
Right-of-use assets	26,278		23,596
Other long-term assets	14,572		11,161
Total long-term assets	93,525		80,119
TOTAL ASSETS	$	1,159,015	$	1,191,648

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

Table of Contents ~~CONSOLIDATED BALANCE SHEETS~~

~~U.S. dollars in thousands~~

September 30,

December 31,

2017

2016

Unaudited

Audited

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$
82,104

$
99,780

Short-term investments

104,453

119,854

Restricted cash

2,129

267

Trade receivables

23,000

6,339

Receivables and prepaid expenses

5,559

10,084

Inventories

24,642

25,549

Total current assets

241,887

261,873

LONG-TERM ASSETS:

Property and equipment, net

9,361

9,812

Field equipment, net

8,948

8,808

Severance pay fund

104

88

Other long-term assets

1,978

1,500

Total long-term assets

20,391

20,208

TOTAL ASSETS

$
262,278

$
282,081


NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
	June 30, 2023		December 31, 2022
	Unaudited		Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables	$	82,536	$	85,197
Other payables, lease liabilities and accrued expenses	67,551		73,580
Total current liabilities	150,087		158,777
LONG-TERM LIABILITIES:
Long-term debt, net	567,150		565,509
Deferred revenues	807		2,878
Long-term leases	20,329		18,762
Employee benefit liabilities	4,840		4,404
Other long-term liabilities	119		148
Total long-term liabilities	593,245		591,701
TOTAL LIABILITIES	743,332		750,478
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares no par value, unlimited shares authorized; issued and outstanding: 106,605,331 shares and 105,049,411 shares at June 30, 2023 (unaudited) and December 31, 2022, respectively	—		—
Additional paid-in capital	1,306,603		1,222,063
Accumulated other comprehensive income (loss)	(1,981)		(2,433)
Retained earnings (accumulated deficit)	(888,939)		(778,460)
TOTAL SHAREHOLDERS' EQUITY	415,683		441,170
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,159,015	$	1,191,648

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

~~- 2 -~~

Table of Contents~~NOVOCURE LIMITED AND SUBSIDIARIES~~

~~CONSOLIDATED BALANCE SHEETS~~

~~U.S. dollars in thousands (except share data)~~

September 30,

December 31,

2017

2016

Unaudited

Audited

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Trade payables

$
14,143

$
18,356

Other payables and accrued expenses

26,842

18,526

Total current liabilities

40,985

36,882

LONG-TERM LIABILITIES:

Long-term loan, net of discount and issuance costs

97,049

96,231

Employee benefit liabilities

2,489

2,590

Other long-term liabilities

5,070

4,033

Total long-term liabilities

104,608

102,854

TOTAL LIABILITIES

145,593

139,736

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:

Share capital -

-

-

Ordinary shares no par value, unlimited shares authorized; issued and outstanding:
89,355,679 shares and 87,066,446 shares at September 30, 2017 (unaudited) and
December 31, 2016, respectively

Additional paid-in capital

689,460

664,154

Accumulated other comprehensive loss

(1,462
)

(1,883
)
Accumulated deficit

(571,313
)

(519,926
)
Total shareholders' equity

116,685

142,345

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$
262,278

$
282,081


NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
	Three months ended June 30,				Six months ended June 30,				Year ended December 31,
	2023		2022		2023		2022		2022
	Unaudited				Unaudited				Audited
Net revenues	$	126,051	$	140,866	$	248,233	$	278,413	$	537,840
Cost of revenues	34,018		28,503		63,632		56,230		114,867
Gross profit	92,033		112,363		184,601		222,183		422,973

Operating costs and expenses:
Research, development and clinical studies	55,427		57,075		115,131		99,309		206,085
Sales and marketing	58,488		44,750		109,657		82,634		173,658
General and administrative	40,778		31,666		82,722		62,174		132,753
Total operating costs and expenses	154,693		133,491		307,510		244,117		512,496

Operating income (loss)	(62,660)		(21,128)		(122,909)		(21,934)		(89,523)
Financial income (expenses), net	8,756		(2,228)		17,925		(3,937)		7,677

Income (loss) before income tax	(53,904)		(23,356)		(104,984)		(25,871)		(81,846)
Income tax	3,514		652		5,495		2,784		10,688
Net income (loss)	$	(57,418)	$	(24,008)	$	(110,479)	$	(28,655)	$	(92,534)

Basic and diluted net income (loss) per ordinary share	$	(0.54)	$	(0.23)	$	(1.04)	$	(0.27)	$	(0.88)
Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share	106,289,073		104,627,789		105,979,791		104,408,164		104,660,476

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

~~- 3 -~~

Table of Contents~~NOVOCURE LIMITED AND SUBSIDIARIES~~


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
U.S. dollars in thousands
	Three months ended June 30,				Six months ended June 30,				Year ended December 31,
	2023		2022		2023		2022		2022
	Unaudited				Unaudited				Audited
Net income (loss)	$	(57,418)	$	(24,008)	$	(110,479)	$	(28,655)	$	(92,534)
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustments	529		680		829		1,010		1,425
Unrealized gain (loss) from debt securities	68		(769)		425		(769)		(445)
Pension benefit plan	113		(678)		(802)		833		(244)
Total comprehensive income (loss)	$	(56,708)	$	(24,775)	$	(110,027)	$	(27,581)	$	(91,798)


NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
U.S. dollars in thousands (except share data)
	Ordinary shares	Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings (accumulated deficit)		Total shareholders' equity

Balance as of December 31, 2022 (audited)	105,049,411	$	1,222,063	$	(2,433)	$	(778,460)	$	441,170

Share-based compensation to employees	—	39,084		—		—		39,084
Exercise of options and vested RSUs	1,137,751	5,211		—		—		5,211
Other comprehensive income (loss), net of tax benefit of $0	—	—		(258)		—		(258)
Net income (loss)	—	—		—		(53,061)		(53,061)
Balance as of March 31, 2023 (Unaudited)	106,187,162	$	1,266,358	$	(2,691)	$	(831,521)	$	432,146

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

Table of Contents ~~CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~U.S. dollars in thousands (except share and per share data)~~

Three months ended September 30,

Nine months ended September 30,

Year ended
December 31,

2017

2016

2017

2016

2016

Unaudited

Unaudited

Audited

Net revenues

$
50,109

$
21,674

$
123,365

$
52,646

$
82,888

Cost of revenues

15,153

11,118

39,969

28,897

39,870

Impairment of field equipment

-

-

-

6,412

6,412

Gross profit

34,956

10,556

83,396

17,337

36,606

Operating costs and expenses:

Research, development and clinical trials

9,273

10,233

28,055

32,996

41,467

Sales and marketing

16,387

15,865

47,503

43,771

59,449

General and administrative

15,215

12,723

42,660

38,010

51,007

Total operating costs and expenses

40,875

38,821

118,218

114,777

151,923

Operating loss

(5,919
)

(28,265
)

(34,822
)

(97,440
)

(115,317
)
Financial expenses, net

2,156

2,189

6,785

3,293

6,147

Loss before income tax expense

(8,075
)

(30,454
)

(41,607
)

(100,733
)

(121,464
)
Income tax expense

3,423

3,174

9,110

8,944

10,381

Net loss

$
(11,498
)

$
(33,628
)

$
(50,717
)

$
(109,677
)

$
(131,845
)

Basic and diluted net loss per ordinary share

$
(0.13
)

$
(0.39
)

$
(0.57
)

$
(1.29
)

$
(1.54
)

Weighted average number of ordinary shares used in
computing basic and diluted net loss per share

89,125,646

85,774,874

88,265,835

85,153,644

85,558,448




	Ordinary shares	Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings (accumulated deficit)		Total shareholders' equity

Balance as of December 31, 2021 (audited)	103,971,263	$	1,099,589	$	(3,169)	$	(685,926)	$	410,494

Share-based compensation to employees	—	25,045		—		—		25,045
Exercise of options and vested RSUs	587,825	3,148		—		—		3,148
Other comprehensive income (loss), net of tax benefit of $0	—	—		1,841		—		1,841
Net income (loss)	—	—		—		(4,647)		(4,647)
Balance as of March 31, 2022 (Unaudited)	104,559,088	$	1,127,782	$	(1,328)	$	(690,573)	$	435,881

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

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)~~

~~U.S. dollars in thousands~~

Three months ended September 30,

Nine months ended September 30,

Year ended
December 31,

2017

2016

2017

2016

2016

Unaudited

Unaudited

Audited

Net loss

$
(11,498
)

$
(33,628
)

$
(50,717
)

$
(109,677
)

$
(131,845
)
Other comprehensive income (loss), net of tax :

Change in foreign currency translation adjustments

(2
)

8

8

64

10

Pension benefit plan

279

(409
)

413

(644
)

(388
)
Total comprehensive loss

$
(11,221
)

$
(34,029
)

$
(50,296
)

(110,257
)

$
(132,223
)

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

~~- 4 -~~

Table of Contents~~NOVOCURE LIMITED AND SUBSIDIARIES~~


NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
	Three months ended June 30,				Six months ended June 30,				Year ended December 31,
	2023		2022		2023		2022		2022
	Unaudited				Unaudited				Audited
Cash flows from operating activities:
Net income (loss)	$	(57,418)	$	(24,008)	$	(110,479)	$	(28,655)	$	(92,534)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	2,721		2,654		5,443		5,264		10,624
Accrued Interest	1,170		(602)		50		(823)		(2,216)
Asset write-downs and impairment of field equipment	136		216		262		351		955
Share-based compensation	32,740		25,823		71,824		50,868		106,955
Foreign currency remeasurement loss (gain)	914		943		787		1,192		(3,256)
Decrease (increase) in accounts receivables	6,941		2,257		21,452		(5,204)		2,547
Amortization of discount (premium)	(5,075)		827		(9,131)		1,511		(1,536)
Decrease (increase) in inventories	(1,452)		(209)		(4,170)		(5,013)		(4,342)
Decrease (increase) in other long-term assets	(1,920)		2,356		(386)		4,219		7,107
Increase (decrease) in accounts payables and accrued expenses	207		7,649		(10,257)		(7,160)		14,257
Increase (decrease) in other long-term liabilities	(1,701)		(2,144)		(4,859)		(4,475)		(7,773)
Net cash provided by (used in) operating activities	$	(22,737)	$	15,762	(39,464)		12,075		30,788

Cash flows from investing activities:
Purchase of property, equipment and field equipment	$	(6,931)	$	(4,131)	(13,019)		(9,224)		(21,358)
Proceeds from maturity of short-term investments	314,597		437,034		640,884		716,034		1,179,289
Purchase of short-term investments	(321,563)		(277,146)		(559,475)		(568,463)		(1,297,888)
Net cash provided by (used in) investing activities	$	(13,897)	$	155,757	68,390		138,347		(139,957)

Cash flows from financing activities:
Proceeds from issuance of shares, net	$	2,883	$	2,759	2,883		2,759		5,224

Repayment of long-term debt	(3)		(7)		(10)		(14)		(28)
Exercise of options	4,622		1,984		9,833		5,132		10,295
Net cash provided by (used in) financing activities	$	7,502	$	4,736	12,706		7,877		15,491

Effect of exchange rate changes on cash, cash equivalents and restricted cash	$	(13)	$	(120)	28		(145)		(97)

Increase (decrease) in cash, cash equivalents and restricted cash	(29,145)		176,135		41,660		158,154		(93,775)
Cash, cash equivalents and restricted cash at the beginning of the period	186,639		191,628		115,834		209,609		209,609

Cash, cash equivalents and restricted cash at the end of the period	$	157,494	$	367,763	$	157,494	$	367,763	$	115,834

Table of Contents ~~CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY~~

~~U.S. dollars in thousands (except share data)~~

Ordinary shares

Additional
paid-in

Accumulated
other
comprehensive

Accumulated

Total shareholders'

Shares

capital

loss

deficit

equity

Balance as of December 31, 2015 (audited)

83,778,581

$
640,406

$
(1,505
)

$
(388,081
)

$
250,820

Share-based compensation to employees

-

21,441

-

-

21,441

Exercise of options and warrants

3,195,477

993

-

-

993

Issuance of shares in connection with employee stock
   purchase plan

92,388

616

-

-

616

Tax benefit from share-based award activity

-

698

-

-

698

Other comprehensive loss, net of tax benefit of $38

-

-

(378
)

-

(378
)
Net loss

-

-

-

(131,845
)

(131,845
)
Balance as of December 31, 2016 (audited)

87,066,446

$
664,154

$
(1,883
)

$
(519,926
)

$
142,345

Share-based compensation to employees

-

20,760

-

-

20,760

Exercise of options and warrants

2,172,266

3,095

-

-

3,095

Cumulative effect adjustment resulting from ASU
   2016-09 adoption (see Note 1)

-

670

-

(670
)

-

Issuance of shares in connection with employee stock
   purchase plan

116,967

781

-

-

781

Other comprehensive income, net of tax benefit of $57

-

-

421

-

421

Net loss

-

-

-

(50,717
)

(50,717
)
Balance as of September 30, 2017 (unaudited)

89,355,679

$
689,460

$
(1,462
)

$
(571,313
)

$
116,685


NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

Supplemental cash flow activities:
Cash paid during the period for:
Income taxes paid (refunded), net	$	5,831	$	1,854	$	7,543	$	3,027	$	5,480
Interest paid	$	—	$	1	$	1	$	2	$	41
Non-cash activities:
Right-of-use assets obtained in exchange for lease liabilities	$	2,333	$	279	$	5,784	$	3,859	$	12,117

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

~~- 5 -~~

Table of Contents

NOVOCURE LIMITED AND SUBSIDIARIES

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~U.S. dollars in thousands~~

Three months ended September 30,

Nine months ended September 30,

Year ended
December 31,

2017

2016

2017

2016

2016

Unaudited

Unaudited

Audited

Cash flows from operating activities:

Net loss

$
(11,498
)

$
(33,628
)

$
(50,717
)

$
(109,677
)

$
(131,845
)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:

Depreciation and amortization

2,053

1,553

5,524

4,063

5,652

Asset write-downs and impairment of field equipment

72

10

206

6,440

6,446

Increase in accrued interest expense

-

222

-

222

-

Share-based compensation to employees

8,629

5,626

20,760

16,719

22,139

Excess tax benefits from share-based award activity

-

-

-

-

(698
)
Increase in trade receivables

(9,112
)

-

(16,661
)

-

(6,339
)
Amortization of discount

17

81

226

25

155

Decrease (increase) in receivables and prepaid expenses

5,986

694

4,525

(1,514
)

243

Decrease (increase) in inventories

504

(2,757
)

907

(10,378
)

(11,955
)
Increase in other long-term assets

(238
)

(526
)

(532
)

(804
)

(692
)
Increase (decrease) in trade payables

983

(6,765
)

(4,213
)

(2,621
)

1,601

Increase in other payables and accrued expenses

4,830

1,651

8,308

2,407

6,647

Increase in employee benefit liabilities, net

113

80

352

350

97

Increase in other long-term liabilities

208

263

1,079

901

957

Net cash provided by (used in) operating activities

$
2,547

$
(33,496
)

$
(30,236
)

$
(93,867
)

$
(107,592
)

Cash flows from investing activities:

Purchase of property and equipment

$
(544
)

$
(1,715
)

$
(1,951
)

$
(5,055
)

$
(5,674
)
Purchase of field equipment

(1,208
)

(3,113
)

(3,469
)

(9,213
)

(11,990
)
Decrease (increase) in restricted cash

(592
)

27

(1,861
)

15

(180
)
Proceeds from maturity of short-term investments

-

120,000

120,000

270,000

270,000

Purchase of short-term investments

-

(119,613
)

(104,006
)

(239,341
)

(239,341
)
Net cash provided by (used in) investing activities

$
(2,344
)

$
(4,414
)

$
8,713

$
16,406

$
12,815

Cash flows from financing activities:

Proceeds from issuance of shares, net

$
-

$
-

$
781

$
-

$
616

Proceeds from long-term loan, net

-

72,870

19

72,887

72,887

Excess tax benefits from share-based award activity

-

-

-

-

698

Repayment of other long-term loan

(19
)

(17
)

(56
)

(52
)

(70
)
Exercise of options and warrants

1,732

-

3,095

961

993

Net cash provided by financing activities

$
1,713

$
72,853

$
3,839

$
73,796

$
75,124

Effect of exchange rate changes on cash and cash equivalents

$
(2
)

$
8

$
8

$
64

$
10

Increase (decrease) in cash and cash equivalents

1,914

34,951

(17,676
)

(3,601
)

(19,643
)
Cash and cash equivalents at the beginning of the period

80,190

80,871

99,780

119,423

119,423

Cash and cash equivalents at the end of the period

$
82,104

$
115,822

$
82,104

$
115,822

$
99,780

Supplemental cash flow activities:

Cash paid during the period for:

Income taxes

$
2,335

$
4,624

$
7,237

$
7,793

$
9,447

Interest

$
2,561

$
1,880

$
7,603

$
3,813

$
6,595

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

~~- 6 -~~

~~NOVOCURE LIMITED AND SUBSIDIARIES~~

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

Organization. NovoCure Limited (including its consolidated subsidiaries, the ~~“Company”~~"Company") was incorporated in the Bailiwick of Jersey and is principally engaged in the development, manufacture and commercialization of Tumor Treating Fields ~~(“TTFields”~~("TTFields") devices, including Optune and Optune Lua (collectively, our "Products"), for the treatment of solid ~~tumors.~~tumor cancers. The Company markets Optune and Optune Lua in multiple countries around the globe with the majority of revenues coming from the use of Optune in the U.S., Germany and Japan. The Company also has ~~regulatory approvals~~a License and ~~clearances~~Collaboration Agreement (the "Zai Agreement") with Zai Lab (Shanghai) Co., Ltd. ("Zai") to market Optune in ~~certain countries for Optune, its first TTFields delivery system, to treat adult patients with glioblastoma (“GBM”~~China, Hong Kong, Macau and Taiwan ("Greater China").

Financial statement preparation. The accompanying unaudited consolidated financial statements include the accounts of the Company ~~and its consolidated subsidiaries,~~ and intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement ~~presentation.~~presentation for the periods presented. The preparation of these unaudited consolidated financial statements in conformity with U.S. generally accepted accounting principles ~~(“GAAP”~~("GAAP") requires management to make estimates and assumptions that affect the amounts reported in these unaudited consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. These unaudited consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016~~2022 (the ~~“2016 10-K”~~"2022 10-K") filed with the Securities and Exchange Commission ~~(the “SEC”)~~ on February 23, ~~2017.~~

2023.

The significant accounting policies applied in the audited annual consolidated financial statements of the Company as disclosed in the ~~2016~~2022 10-K are applied consistently in these unaudited interim consolidated financial ~~statements, except~~statements.

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NOTE 2: CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash equivalents include items almost as ~~noted below:~~

~~Recently Adopted Accounting Pronouncements~~. 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, 2023 and December 31, 2022, the Company’s cash and cash equivalents and short-term investments were composed of:


	June 30, 2023
	Unaudited
	Fair value level	Adjusted cost basis		Unrealized gains		Unrealized losses		Fair market value		Recorded basis		Cash and cash equivalents		Short-term investments
Cash		$	9,995	$	—	$	—	$	9,995	$	9,995	$	9,995	$	—
Money market funds	Level 1	139,983		—		—		139,983		139,983		139,983		—
Certificate of deposits and term deposits	Level 2	251,090		—		—		251,090		251,090		7,000		244,090
HTM securities (1)
U.S. Treasury bills	Level 1	$	140,031	$	12	$	(136)	139,907		140,031		$	—	$	140,031
Government and governmental agencies	Level 2	$	25,282	$	1	$	(60)	25,223		25,282		$	—	$	25,282
Corporate debt securities	Level 2	$	374,434	$	43	$	(665)	373,812		374,434		$	—	$	374,434

		$	539,747	$	56	$	(861)	$	538,942	$	539,747	$	—	$	539,747

Total		$	940,815	$	56	$	(861)	$	940,010	$	940,815	$	156,978	$	783,837


	December 31, 2022
	Audited
	Fair value level	Adjusted cost basis		Unrealized gains		Unrealized losses		Fair market value		Recorded basis		Cash and cash equivalents		Short-term investments
Cash		$	9,697	$	—	$	—	$	9,697	$	9,697	$	9,697	$	—
Money market funds	Level 1	105,629		—		—		105,629		105,629		105,629		—
Certificate of deposits and term deposits	Level 2	316,946		—		—		316,946		316,946		—		316,946
HTM securities (1)
U.S. Treasury bills	Level 1	$	188,030	$	8	$	(540)	187,498		188,030		$	—	$	188,030
Government and governmental agencies	Level 2	$	44,357	$	12	$	(12)	44,357		44,357		$	—	$	44,357
Corporate debt securities	Level 2	$	304,766	$	1,066	$	(587)	305,245		304,766		$	—	$	304,766

		$	537,153	$	1,086	$	(1,139)	$	537,100	$	537,153	$	—	$	537,153

Total		$	969,425	$	1,086	$	(1,139)	$	969,372	$	969,425	$	115,326	$	854,099

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(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.

In ~~March 2016,~~November 2022, the ~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation-Stock Compensation (Topic 718): Improvements~~Company transferred all of its available-for-sale portfolio to ~~Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 affect all entities that issue share-based payment awards to their employees and involve multiple aspects~~HTM as part of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. ~~The Company adopted ASU 2016-09 during the quarter ended March 31, 2017,~~Company's investment strategy. Such transfers are made at which time it changed its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective basis with a cumulative effect adjustment to accumulated deficit of $670 as of January 1, 2017. In addition, excess tax benefits for share-based payments are now presented ~~as an operating activity in the statements of cash flows~~ ~~rather than financing~~ ~~activity. The changes have been applied prospectively in accordance with the ASU and prior periods have not been adjusted.~~

~~Recent Accounting Pronouncements.~~ In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. The Company is currently evaluating the requirements of the new standard to insure that it has processes, systems and internal controls in place to collect the necessary information to implement the standard, which will be effective as of January 1, 2018. Currently, the Company anticipates using a portfolio approach to apply the standard to portfolios of contracts with similar characteristics and anticipates that it will apply the cumulative catch-up transition method which requires the application of the provisions of the new standard as offair value at the date of ~~adoption with~~transfer. The net unrealized loss on these securities at the ~~cumulative effect~~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 ~~retrospective application of the provisions~~securities as an adjustment ~~through retained earnings. While~~to the yield. As of June 30, 2023 and December 31, 2022, the unamortized unrealized loss balances were $20 and $445, respectively, and are reported in accumulated other comprehensive income (loss).

In accordance with ASC 820, "Fair Value Measurements and Disclosures," the Company measures its money market funds at fair value. The fair value of the money market funds and HTM securities, which is ~~still~~presented for disclosure purposes, is classified within Level 1 or Level 2. 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, 2023 and December 31, 2022, all investments mature in ~~the process of completing its assessment on the impact this guidance will have on its consolidated financial statements and related disclosures, the~~one year or less.

Unrealized losses from debt securities are primarily attributable to changes in interest rates. The Company does not ~~anticipate that the adoption of this standard will have a material impact on its financial position, results of operations or cash flows.~~

In April 2016, FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. ASU 2016-10 covers two specific topics: performance obligations and licensing. This amendment includes guidance on immaterial promised goods or services, shipping or handling activities, separately identifiable performance obligations, functional or symbolic intellectual property licenses, sales-based and usage-based royalties, license restrictions (time, use, geographical) and licensing renewals. In addition, in May 2016, FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which is intended to not change the core principle of the guidance in Topic 606, but rather affect only the narrow aspects of Topic 606 by reducing the potential for diversity in practice at initial application and by reducing the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. The Company is currently evaluating the impact of the adoption of both revenue standards on its consolidated financial statements.

In February 2016, FASB issued ASU 2016-02-Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply

~~- 7 -~~

~~a dual approach, classifying leases as either finance or operating leases~~believe any remaining unrealized losses represent impairments based on the ~~principle~~evaluation of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of their classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASC 842 supersedes the previous leases standard, ASC 840. The standard is effective on January 1, 2019, with early adoption permitted. The Company currently anticipates adopting the new standard effective January 1, 2019 and is evaluating the impact of the adoption of this standard on its consolidated financial statements.

~~In May 2017, FASB issued ASU 2017-09,~~ ~~Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting.~~ ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. ~~The Company is evaluating the impact of ASU~~ ~~2017-09~~.

~~NOTE 2: SHORT-TERM INVESTMENTS~~

The Company invests in marketable U.S. Treasury Bills (“T-bills”) that are classified as held-to-maturity securities. The amortized cost and recorded basis of the T-bills are presented as short-term investments in the amount of $104,453 and $119,854 as of September 30, 2017 and December 31, 2016, respectively, and their estimated fair value as of September 30, 2017 and December 31, 2016 was $104,419 and $119,825, respectively.

available evidence.

NOTE 3: INVENTORIES

Inventories are stated at the lower of cost or ~~market.~~net realizable value. The weighted average methodology is applied to determine cost. As of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company’s inventories were composed of:


	June 30, 2023		December 31, 2022
	Unaudited		Audited
Raw materials	$	6,431	$	4,314
Work in progress	10,803		9,321
Finished products	15,789		15,741
Total	$	33,023	$	29,376

September 30,

December 31,

2017

2016

Unaudited

Audited

Raw materials

$
5,936

$
5,243

Work in progress

10,621

8,292

Finished products

8,085

12,014

Total

$
24,642

$
25,549

NOTE 4: COMMITMENTS AND CONTINGENT LIABILITIES

Operating Leases. The facilities of the Company are leased under various operating lease agreements for periods, including options for extensions, ending no later than ~~2024.~~2044. The Company also leases motor vehicles under various operating leases, which expire on various dates, the latest of which is in ~~2020.~~

2026.

Pledged deposits and bank guarantees. As of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company pledged bank deposits of ~~$1,051~~ $2,346and ~~$807,~~$2,296, respectively, to cover bank guarantees in respect of its leases of operating facilities and obtained bank guarantees ~~by the bank~~ for the fulfillment of the Company’s lease and other contractual commitments of ~~$1,212~~ $2,700and ~~$955, respectively.~~

$2,459, respectively.

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 the our secured leverage ratio from 2.75% to 3.25% above the applicable

Table of Contents

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 ~~January 2017, two~~June 2023, a putative class action ~~lawsuits were~~lawsuit was filed against the Company, its ~~directors~~Executive Chairman and ~~certain of~~ its ~~officers, as well as the underwriters in the Company’s October 2015 initial public offering.~~Chief Executive Officer. The ~~complaints,~~complaint, which ~~purport~~purports to be brought on behalf of a class of persons and/or entities who purchased or otherwise acquired ordinary shares of the Company ~~pursuant and/or traceable to the registration statement and prospectus issued in connection with the Company’s initial public offering,~~from January 5, 2023 through June 5, 2023, allege material misstatements and/or omissions in the Company’s ~~initial~~ public offering materials in alleged violation of the federal securities laws and seek compensatory damages, among other remedies. The two actions have been consolidated and the plaintiffs filed a consolidated amended complaint on May 31, 2017. The court granted the defendants’ motion to bifurcate the motion to dismiss into two stages: a threshold motion to dismiss for lack of personal jurisdiction, lack of subject matter jurisdiction, and insufficient process and service of process; and, if the matter is not dismissed following that threshold motion, a subsequent merits motion to dismiss regarding whether the allegations in the amended complaint state a claim under the securities laws. The defendants filed the threshold motion to dismiss on July 31, 2017, and the plaintiffs filed an oppositionstatements with respect to the ~~threshold motion to dismiss on September 29, 2017.~~results from its phase 3 LUNAR clinical trial. The Company believes that the ~~amended complaint~~action is without merit and plans to defend the ~~consolidated lawsuits~~lawsuit vigorously. ~~The~~As of June 30, 2023, the Company has not

~~- 8 -~~

accrued any amounts in respect of ~~these lawsuits,~~this claim, as ait believes liability is not probable and the amount of any potential liability cannot be reasonably estimated.

NOTE 5: ~~SHARE CAPITAL~~

~~For~~CONVERTIBLE NOTE

On November 5, 2020, the ~~nine months ended September 30, 2017, warrants to purchase 1,418,711 ordinary shares with an exercise price~~Company issued $575,000 aggregate principal amount of ~~$3.59 per share were cashlessly exercised, resulting~~0% Convertible Senior Notes due 2025 (the “Notes”).

The Notes mature on November 1, 2025, unless earlier repurchased, redeemed or converted as set forth in the ~~issuance~~Notes. As of ~~803,138 ordinary shares. Also, warrants~~June 30, 2023, the conditions allowing holders of the Notes to ~~purchase 6,498 ordinary shares~~convert were not met. The Notes are therefore not convertible as of June 30, 2023 and are classified as long-term liability.

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


	June 30, 2023		December 31, 2022
	Unaudited		Audited
Liability component, net:
Principal amount	$	575,000	$	575,000
Unamortized issuance costs	(7,850)		(9,491)
Net carrying amount of liability component (1)	$	567,150	$	565,509

(1) An effective interest rate determines the fair value of the Notes, therefore they are categorized as Level 3 in accordance with ~~an exercise price~~ASC 820. The estimated fair value of ~~$3.59 per share~~the net carrying amount of liability component of the Notes as of June 30, 2023 and December 31, 2022 were ~~exercised for cash. For~~$473,001 and $455,091, respectively.

Finance expense related to the ~~nine months ended September 30, 2017, options to purchase 1,370,810 ordinary shares were exercised, resulting in the issuance of 1,364,645 ordinary shares.~~

Notes was as follows:


	Three months ended June 30,				Six months ended June 30,				Year ended December 31, 2022
	2023		2022		2023		2022
	Unaudited				Unaudited				Audited
Amortization of debt issuance costs	826		820		1,641		1,630		3,293
Total finance expense recognized	$	826	$	820	$	1,641	$	1,630	$	3,293

NOTE 6: ~~EQUITY INCENTIVE~~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 ~~stock~~share units (“RSUs”), ~~performance~~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. Options granted under the 2015 Plan that are ~~cancelled~~canceled or forfeited before expiration become available for future grants. RSUs granted under the 2015 Plan generally vest ~~in equal installments~~ over a ~~three-year~~three year period. PSUs granted under the 2015 Plan generally vest between a three- and six-year period as performance targets are

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attained. RSUs and PSUs granted under the 2015 Plan that are canceled before expiration become available for future grants. As of ~~September~~June 30, ~~2017,~~ ~~9,563,985~~2023, 18,945,024 ordinary shares were available for grant under the 2015 Plan.

A summary of the status of the Company’s option plans as of ~~September~~June 30, ~~2017~~2023 and changes during the period then ended is presented below:


	Nine months ended September 30, 2017						Six months ended June 30, 2023
	Unaudited						Unaudited
	Number of options			Weighted average exercise price			Number of options	Weighted average exercise price
Outstanding at beginning of year		11,377,354		$	9.76	Outstanding at beginning of year	8,786,364	$	37.27
Granted		5,117,088			9.96	Granted	779,388	74.07
Exercised		(1,370,810	)		2.31	Exercised	(704,027)	13.93
Forfeited and cancelled		(310,693	)		12.39
Outstanding as of September 30, 2017		14,812,939			10.46
Forfeited and canceled						Forfeited and canceled	(239,866)	75.47
Outstanding as of June 30, 2023						Outstanding as of June 30, 2023	8,621,859	$	41.44

Exercisable options		6,119,710			8.17	Exercisable options	6,862,376	$	30.57

Vested and expected to vest		14,812,939		$	10.46

For the six months ended June 30, 2023, options to purchase 704,027 ordinary shares were exercised, resulting in the issuance of 704,027 ordinary shares.

A summary of the status of the Company’s RSUs and PSUs as of ~~September~~June 30, ~~2017~~2023 and changes during the period then ended is presented ~~below:~~

below.


	Nine months ended September 30, 2017						Six months ended June 30, 2023
	Unaudited						Unaudited
	Number of RSUs			Weighted average grant date fair value price			Number of RSU/PSUs	Weighted average grant date fair value
Unvested at beginning of year		-		$	-	Unvested at beginning of year	5,377,459	$	66.87
Granted		1,661,619			9.64	Granted	1,267,758	76.04
Vested		-			-	Vested	(770,163)	84.96
Forfeited and cancelled		(10,400	)		7.15	Forfeited and cancelled	(121,741)	92.59
Unvested as of September 30, 2017		1,651,219		$	9.66
Unvested as of June 30, 2023 (1)						Unvested as of June 30, 2023 (1)	5,753,313	65.95

~~- 9 -~~

(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, 2023, in accordance with ASC 718 "Compensation — Stock Compensation" as follows:


June 30, 2023
Number of PSUs	Fair value at grant date per PSU		Total fair value at grant date
2,703,852	$	48.16	$	130,218
189,029	76.97		14,550
124,701	80.59		10,050
7,605	87.66		667
10,532	94.94		1,000
161,912	114.26		18,500
3,197,631			$	174,985

Table of Contents

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

In September 2015, the Company adopted an employee share purchase plan (“ESPP”) to encourage and enable eligible employees to acquire ownership of the Company’s ordinary shares purchased through accumulated payroll deductions on an after-tax basis. 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 ~~will be~~are construed in a manner consistent with the requirements of such section. ~~The Company began its offerings under the ESPP on August 1, 2016.~~ As of ~~September~~June 30, ~~2017, 2,328,171~~2023, 4,787,003 ordinary shares were available to be purchased by eligible employees under the ~~ESPP and 209,355 shares had been issued under the~~ ESPP.

The fair value of ~~all equity-based~~share-based awards was estimated using the Black-Scholes ~~option-pricing~~ model ~~with~~for all equity grants. For market condition awards, the Company also applied the Monte-Carlo simulation model. The Company assessed fair value using the following underlying ~~assumptions, excluding market condition awards for which fair value was estimated using the Monte Carlo option-pricing model:~~

assumptions:


	Nine months ended September 30,			Year ended December 31,		Six months ended June 30,				Year ended December 31, 2022
	2017	2016		2016		2023		2022
	Unaudited			Audited		Unaudited				Audited
Stock Option Plans					Stock Option Plans
Expected term (years)	5.5-6.25	6.25		6.25	Expected term (years)	5.50-6.00		5.33-5.83		5.33-5.83
Expected volatility	56.74%-59.45%	59.80%-61.65%		58.40%-61.70%	Expected volatility	63%-67%		60%-62%		60%-62%
Risk-free interest rate	1.97%-2.23%	1.23%-1.88%		1.23%-1.88%	Risk-free interest rate	3.48%-4.10%		1.58%-3.04%		1.58%-4.23%

Dividend yield	0.00%	0.00%		0.00%	Dividend yield	0.00	%	0.00	%	0.00	%
ESPP					ESPP
Expected term (years)	0.50		0.42	0.42	Expected term (years)	0.50		0.50		0.50
Expected volatility	76.37%-82.00%	70.45%		70.45%	Expected volatility	56	%	51	%	51%-77%
Risk-free interest rate	0.62%-1.13%	0.40%		0.40%	Risk-free interest rate	4.76	%	0.19	%	0.19%-2.52%

Dividend yield	0.00%	0.00%		0.00%	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~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022, and the year ended December 31, ~~2016~~2022 was:


	Three months ended June 30,				Six months ended June 30,				Year ended December 31, 2022
	2023		2022		2023		2022
	Unaudited				Unaudited				Audited
Cost of revenues	$	2,023	$	1,029	$	4,029	$	1,981	$	4,690
Research, development and clinical studies	8,537		7,624		20,316		14,425		30,790
Sales and marketing	10,213		6,802		21,857		13,457		28,826
General and administrative	11,967		10,368		25,622		21,005		42,649
Total share-based compensation expense	$	32,740	$	25,823	$	71,824	$	50,868	$	106,955

Three months ended September 30,

Nine months ended September 30,

Year ended
December 31,

2017

2016

2017

2016

2016

Unaudited

Unaudited

Audited

Cost of revenues

$
79

$
160

$
353

$
471

$
623

Research, development and clinical trials

972

776

2,645

2,378

3,155

Sales and marketing

1,874

1,249

4,264

3,888

5,111

General and administrative

5,704

3,441

13,498

9,982

12,552

Total share-based compensation expense

$
8,629

$
5,626

$
20,760

$
16,719

$
21,441

NOTE 7: Basic and diluted net income (loss) per ordinary share

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.

Table of Contents

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, 2022
	2023		2022		2023		2022
	Unaudited				Unaudited				Audited
Net income (loss) attributable to ordinary shares as reported used in computing basic and diluted net income (loss) per share	$	(57,418)	$	(24,008)	$	(110,479)	$	(28,655)	$	(92,534)

Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share	106,289,073		104,627,789		105,979,791		104,408,164		104,660,476






Weighted anti-dilutive shares outstanding which were not included in the diluted calculation	8,483,336		7,746,398		7,733,239		7,790,467		7,272,606

Basic and diluted net income (loss) per ordinary share	$	(0.54)	$	(0.23)	$	(1.04)	$	(0.27)	$	(0.88)

Table of Contents

NOTE 7:8: SUPPLEMENTAL INFORMATION

The Company operates in a single reportable segment.

The following table presents long-lived assets by location:

	September 30,		December 31,
	2017		2016			June 30, 2023		December 31, 2022
	Unaudited		Audited			Unaudited		Audited
United States	$	10,942	$	11,981	United States	$	35,229	$	30,012
Israel					Israel	7,678		7,180
Switzerland		5,057		4,346	Switzerland	6,106		5,084
Israel		1,884		1,915
Japan					Japan	994		1,063
Germany					Germany	1,079		762
Others	426			378	Others	1,589		1,261
Total	$	18,309	$	18,620
Total long lived assets					Total long lived assets	$	52,675	$	45,362

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,

2017

2016

2017

2016

2016

Unaudited

Unaudited

Audited

United States

$
35,300

$
18,131

$
95,826

$
46,264

$
72,771

EMEA (*)

14,757

3,519

27,316

6,296

10,028

Japan

52

24

223

86

89

Total

$
50,109

$
21,674

$
123,365

$
52,646

$
82,888

(*) including Germany

$
14,664

$
1,766

26,880

2,659

$
9,799


	Three months ended June 30,				Six months ended June 30,				Year ended December 31, 2022
	2023		2022		2023		2022
	Unaudited				Unaudited				Audited
United States	$	86,958	$	108,203	$	172,186	$	205,619	$	406,894
Germany	15,744		10,347		30,864		29,585		46,120
Japan	7,861		8,272		16,530		17,022		32,781
Greater China (1)	6,751		5,933		12,066		10,301		21,332
Others	8,737		8,111		16,587		15,886		30,713
Total net revenues	$	126,051	$	140,866	$	248,233	$	278,413	$	537,840

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

Item 2. Management’s Discussion and Analysis ofof Financial Condition and Results of Operations

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 ~~September~~June 30, ~~2017~~2023 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. ~~As a result of many factors, such as those set forth~~Please refer to the information under ~~Part I, Item 1A, “Risk Factors”, of our Annual Report on Form 10-K for~~ the ~~fiscal year ended December 31, 2016 (the “2016 10-K”), our actual results may differ materially from those anticipated~~heading “Cautionary Note Regarding Forward-Looking Statements” elsewhere in ~~these forward-looking statements.~~this report. References to the words “we,” “our,” “us,” and the “Company” in this report refer to NovoCure Limited, including its consolidated subsidiaries.

~~Overview~~

We are a commercial stage oncology company developing a profoundly different cancer treatment centered on a proprietary therapy called Tumor Treating Fields (“TTFields”), the use of electric fields tuned to specific frequencies to disrupt solid tumor cancer cell division. Our key priorities are to accelerate commercial adoption of Optune, our first commercial TTFields delivery system, for the treatment of glioblastoma (“GBM”)

Critical Accounting Policies and ~~to advance programs testing the efficacy and safety of TTFields in multiple solid tumor indications through our clinical pipeline.~~

We were founded in 2000 and operated as a development stage company through December 31, 2011. We initially received U.S. Food and Drug Administration (“FDA”) approval for Optune in 2011 for use as a monotherapy treatment for adult patients with GBM following confirmed recurrence after chemotherapy. In October 2015, we received FDA approval to market Optune for the treatment of adult patients with newly diagnosed GBM in combination with temozolomide, a chemotherapy drug. We have also received approval to market Optune in Germany, Austria, Switzerland, Israel, Japan and certain other countries. To date, we have focused on commercializing Optune in the United States, Germany, Austria, Switzerland, Israel and Japan, which we refer to collectively as our currently active markets.

In April 2017, we announced final analyses of the full 695 patient dataset with a median follow-up of 40 months from our phase 3 pivotal trial of Optune in combination with temozolomide for patients with newly diagnosed GBM. For patients treated with Optune in combination with temozolomide versus patients treated with temozolomide alone, the two-year survival rate increased from 30 percent to 43 percent and the five-year survival rate increased from five percent to 13 percent. In September 2017, we announced results from health-related quality of life analyses from this same phase 3 pivotal trial. Patients treated with Optune in combination with temozolomide were able to maintain quality of life for longer compared to patients treated with temozolomide alone. These data further support our belief that Optune plus temozolomide is an essential combination treatment for patients with newly diagnosed GBM.

We continue to work with payers to expand access to Optune for patients with newly diagnosed and recurrent GBM. As of September 30, 2017, more than 210 million Americans have available coverage for the use of Optune for newly diagnosed and/or recurrent GBM. Additionally, we have signed contracts to establish Optune as an in-network benefit for more than 178 million American lives. The percentage of our U.S. active patient population who are beneficiaries of the Medicare fee-for-service program, which has denied coverage for our claims to date, continues to range from 20 to 25 percent.

In Germany, we are able to bill healthcare payers for individual cases and each case is evaluated individually on its merits and under the payer’s specific rules for such cases. In the third quarter 2017, approximately half of German claims were approved for reimbursement. In September 2017, the German Federal Joint Committee, or G-BA, published its decision to support a clinical trial studying Optune for the treatment of newly diagnosed GBM. The proposed trial design will examine the benefit of starting Optune concurrent with radiation therapy and temozolomide prior to the initiation of maintenance temozolomide in accordance with Section 137e of the German Healthcare Provision Act. We anticipate that we will share the costs for the conduct of the clinical trial with the G-BA. The statutory health insurance funds will reimburse treatment costs, including the cost of Optune for clinical trial patients. The G-BA decision is an important first step in the process to secure national reimbursement for Optune in Germany.

In August 2017, we signed a contract with the Federation of Austrian Social Insurance Institutions to grant reimbursement for Optune. All 18 Austrian insurance funds have agreed to participate in the contract, marking our first national reimbursement decision. We are currently working to implement the contract and believe that our first payments for Austrian claims will begin in the fourth quarter 2017.

In April 2017, we submitted our applicate to the Federal Office of Public Health in Switzerland to secure a defined reimbursement rate for Optune based upon the long-term analysis of the EF-14 clinical trial data. We now believe a Swiss reimbursement decision will come no earlier than 2018. Until we secure a defined reimbursement rate, payment is not guaranteed.

~~- 12 -~~

In March 2017, we received Japanese Ministry of Health, Labour and Welfare (“MHLW”) approval for the second generation Optune. In March 2017, we filed an application to request a defined reimbursement rate for Optune based on the December 2016 regulatory approval of Optune to treat newly diagnosed GBM. We are currently in active reimbursement discussions with the MHLW and believe that a reimbursement decision will come before the end of 2017.

We have researched the biological effects of TTFields extensively. Because TTFields are delivered regionally, act only on dividing cells (a biological process known as mitosis) and are frequency-tuned to target cells of a specific size, we believe there is minimal damage to healthy cells. We believe our pre-clinical and clinical research demonstrates that TTFields’ mechanism of action affects fundamental aspects of cell division and may have broad applicability across a variety of solid tumors. We have demonstrated in pre-clinical studies that TTFields can offer additive or synergistic benefits in combination with radiation, chemotherapy and immunotherapy, which may lead to greater efficacy than radiation, chemotherapy and immunotherapy alone, without significantly increasing the side effects when used in combination with other cancer treatments.

We are currently planning or conducting clinical trials evaluating the use of TTFields in brain metastases, non-small-cell lung cancer (“NSCLC”), pancreatic cancer, ovarian cancer and mesothelioma. We anticipate expanding our clinical pipeline over time to study the safety and efficacy of TTFields for additional solid tumor indications. The table below presents the current status of our clinical pipeline and our expected next milestone for each.

In May 2017, we received humanitarian use device (HUD) designation for the use of TTFields for the treatment of pleural mesothelioma. The HUD designation is the first step in obtaining a Humanitarian Device Exemption (HDE) for the treatment of pleural mesothelioma with TTFields. An approved HDE would allow us to market TTFields in combination with standard of care chemotherapy as a treatment for pleural mesothelioma in the United States.

In October 2016, we enrolled the first patient in our METIS trial, a phase 3 pivotal trial testing the effectiveness of stereotactic radiosurgery plus TTFields compared to stereotactic radiosurgery alone in patients with brain metastases resulting from NSCLC. In September 2017, the FDA approved an IDE supplement amending the protocol for the METIS trial. The protocol amendment is designed to accelerate the pace of enrollment by expanding the eligible patient population. Among other updates, the protocol now allows for the enrollment of patients with infratentorial brain metastases, based upon new scientific information to support a specialized array layout to treat infratentorial tumors.

We own all commercialization rights to TTFields in oncology. Our robust global patent and intellectual property portfolio consists of over 120 issued patents, with numerous additional patent applications pending worldwide. The patents have expected expiration dates between 2021 and 2035. We have also filed approximately 50 additional patent applications that, if issued, may protect aspects of our platform beyond 2035. We believe we will maintain exclusive rights to market TTFields for all solid tumor indications in our key markets through the life of our patents.

We were incorporated in the Bailiwick of Jersey in 2000. Our U.S. operations are located in Portsmouth, New Hampshire, Malvern, Pennsylvania, and New York City. Additionally, we have offices in Germany, Switzerland, Israel and Japan, and a research center in Israel. We completed our initial public offering of our ordinary shares in October 2015. Our ordinary shares are quoted on the NASDAQ Global Select Market under the symbol “NVCR.”

~~Financial Overview.~~ We expect to continue to incur significant expenses and operating losses for at least the next several years. We expect our research, development and clinical trials expenses to increase in connection with our ongoing activities, and as additional indications enter late-stage clinical development. In addition, we expect to incur significant commercialization expenses for product sales, marketing, manufacturing and distribution. We may need additional funding to support the continuation of our operating activities. Until we can generate substantial revenues (which may not occur), we expect to finance our cash needs through our existing cash, cash equivalents, short-term investments, equity issuances or additional debt, and possibly also from collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. We will need to generate significant revenues to achieve profitability, and we may never do so.

~~- 13 -~~

~~Critical accounting policies and estimates~~

Estimates

In accordance with U.S. ~~GAAP,~~generally accepted accounting principles (“GAAP”), in preparing our financial statements, we must make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of net revenues and expenses during the reporting period. We develop and periodically change these estimates and assumptions based on historical experience and on various other factors that we believe are reasonable under the circumstances. Actual results may differ from these estimates.

The critical accounting policies requiring estimates, assumptions and judgments that we believe have the most significant impact on our consolidated financial statements can be found in our ~~2016~~2022 10-K. For additional information, see Note 1 to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report. There ~~have been~~were no other material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our ~~2016~~2022 10-K.

~~Results~~

We are a global oncology company with a proprietary platform technology called Tumor Treating Fields ("TTFields"), which are electric fields that exert physical forces to kill cancer cells via a variety of ~~Operations~~

~~We account for revenue when all revenue recognition criteria have been met or when cash is collected.~~ ~~Revenue recognized in a given period may include a mixture of accrued revenue, cash collections from amounts billed in prior periods and cash collections from amounts billed in the current period. We report certain operating statistics~~mechanisms. Our key priorities are to ~~provide additional insight into the~~drive commercial ~~performance~~adoption of Optune, our commercial TTFields device, and to advance clinical and product development programs intended to extend overall survival in ~~our currently active markets.~~

~~The number~~some of ~~active patients on~~ the most aggressive forms of cancer.

Optune is ~~our principal revenue driver. Growth in~~approved by the ~~number~~U.S. Food and Drug Administration ("FDA") under the Premarket Approval ("PMA") pathway for the treatment of active patients is a factor of both treatment duration and new patient starts. Median treatment duration differs based upon the clinical diagnosis of the patient. For the three months ended September 30, 2017, more than 60% of prescriptions received were foradult patients with newly diagnosed ~~GBM. The conversion~~glioblastoma ("GBM") together with temozolomide, a chemotherapy drug, and for adult patients with GBM following confirmed recurrence after chemotherapy as monotherapy treatment. We also have a CE certificate to market Optune for the treatment of ~~prescriptions to new patients~~GBM in the European Union ("EU"), as well as approval or local registration in the United Kingdom ("UK"), Japan, Canada and certain other countries. Optune Lua is ~~driven~~approved by the ~~prescription fill rate~~FDA under the Humanitarian Device Exemption ("HDE") pathway to treatment 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. We market Optune and Optune Lua in multiple countries around the globe with the majority of our revenues coming from the use of Optune in the U.S., Germany and Japan. We are actively evaluating opportunities to expand our international footprint.

In March 2023, we announced the reimbursement and availability of Optune together with temozolomide for the treatment of adult patients with newly diagnosed GBM in France. The order registering Optune on the List of Reimbursable Product and Services became effective March 15, 2023 and we are now treating patients.

We believe the physical mechanisms of action behind TTFields therapy may be broadly applicable to solid tumor cancers. In June 2023, we presented positive results from the phase 3 LUNAR study evaluating the use of TTFields together with standard therapies for the treatment of metastatic NSCLC following platinum-failure. The LUNAR study met its primary endpoint with a statistically significant and clinically meaningful 3-month improvement in median overall survival ("OS") with TTFields therapy added to standard therapies (HR=0.74, P=0.035). Patients randomized to receive TTFields together with standard therapies demonstrated median OS of 13.2 months compared to 9.9 months in patients treated with standard therapies alone. Patients randomized to receive TTFields and physician’s choice immune checkpoint inhibitor ("ICI") (n=66) demonstrated a median OS of 18.5 months, a profound extension compared to the median OS of 10.8 months demonstrated by patients that received ICI alone (n=68; HR=0.63; P=0.03). Patients randomized to receive TTFields and docetaxel (n=71) had a positive survival trend with a median OS of 11.1 months vs 8.7 months (n=71). TTFields therapy was well-tolerated with no added

systemic toxicities and few grade 3 (no grade 4 or 5) device-related adverse events. These data are expected to serve as the basis for a PMA submission to the FDA in the second half of 2023.

We are planning to launch several additional trials intended to further explore the use of TTFields therapy in the treatment of NSCLC. In July 2023, the FDA accepted the investigation device exemption for the LUNAR-2 clinical trial ("LUNAR-2"), a randomized, phase 3 study testing the safety and effectiveness of TTFields concomitant with pembrolizumab and platinum-based chemotherapy in patients with metastatic NSCLC. The two primary endpoints of LUNAR-2 are overall survival and progression-free survival. LUNAR-2 is designed to accrue 734 patients with a 21-month follow-up following the enrollment of the last patient.

In addition to our NSCLC studies, we are conducting phase 3 studies evaluating the use of TTFields in the treatment of ovarian cancer, brain metastases from NSCLC ("brain metastases") and pancreatic cancer. We are also conducting a global phase 3 study testing the potential survival benefit of initiating Optune concurrent with radiation therapy versus following radiation therapy in patients with newly diagnosed GBM.

In July 2023, we announced that an independent data monitoring committee ("DMC") conducted a pre-specified interim analysis for the phase 3 PANOVA-3 study for the treatment of unresectable, locally advanced pancreatic cancer. As part of the interim analysis, the DMC reviewed the safety and efficacy data for all locally advanced pancreatic cancer patients enrolled in the study. The interim analysis resulted in a DMC recommendation that the study should continue to final analysis. The PANOVA-3 study accrued 556 patients as of February 2023 and data will be reviewed in 2024, following an 18-month follow-up period.

In March 2023, we announced the final patient enrolled in the pivotal METIS study evaluating the efficacy of TTFields therapy following stereotactic radiosurgery for the treatment of patients with brain metastases from NSCLC. Following the completion of enrollment, patients will be followed for a minimum of 12 months with final data anticipated in 2024.

We have one ongoing pilot study evaluating the use of TTFields in the treatment of stage 3 NSCLC and are designing several additional pilot and pivotal studies in partnership with oncology leaders to further explore the capabilities of TTFields. We anticipate expanding our clinical pipeline over time to ~~fill.~~ study the safety and efficacy of TTFields for additional solid tumor indications and combinations with other cancer treatment modalities.

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

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. One of these initiatives is the launch of new arrays, which are thinner, lighter and more flexible. We plan to submit for regulatory approval in the U.S. via PMA supplement in the second half of this year.

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.

In 2018, we granted Zai Lab (Shanghai) Co., Ltd. ("Zai") a license to commercialize Optune in China, Hong Kong, Macau and Taiwan ("Greater China") under a License and Collaboration Agreement (the "Zai Agreement"). The Zai Agreement also establishes a development partnership intended to accelerate the ~~twelve~~development of TTFields in multiple solid tumor cancer indications. For additional information, see Note 12 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the "2022 10-K").

We view our operations and manage our business in one operating segment. For the three and six months ended ~~September~~June 30, ~~2017,~~2023, our ~~prescription fill rate~~net revenues were $126.1 million and $248.2 million, respectively. Our net loss for the three and six months ended June 30, 2023 was ~~between 70-75%.~~

~~The following table includes certain~~$57.4 million and $110.5 million, respectively. As of June 30, 2023, we had an accumulated deficit of $888.9 million. Our net loss resulted primarily from increasing investments designed to support our commercial ~~operating statistics for~~business, geographic expansion and aspre-commercial activities associated with potential future indication launches.

On May 5, 2023, the World Health Organization (“WHO”) declared the end of the ~~periods presented.~~

September 30,

Operating statistics

2017

2016

Active patients at period end (1)

United States

1,234

783

EMEA (2) (*)

448

202

Japan (2)

1

-

1,683

985

(*) including Germany

331

146

Three months ended September 30,

Nine months ended September 30,

2017

2016

2017

2016

Prescriptions received in period (3)

United States

805

569

2,293

1,800

EMEA (2) (*)

270

120

731

301

Japan (2)

1

1

5

1

1,076

690

3,029

2,102

(*) including Germany

202

87

553

221

~~(1)~~

An “active patient” is a patient who is on Optune 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 treatmentCOVID-19 pandemic as a public health emergency of international concern, however the WHO maintains that the virus remains a global health threat. Since the pandemic began, we have followed the guidance of the WHO, the U.S. Centers for Disease Control and Prevention, and local health authorities in ~~less than 60 days.~~

~~(2)~~

As we enter each new market, our commercial activities focus initially on establishing the required in-market infrastructure, certifying physicians to prescribe Optune and obtaining a defined reimbursement pathway. Once established, our commercial efforts turn to increasing adoption.

~~(3)~~

A “prescription received” is a commercial order for Optune that is received from a physician certified to treat patients with Optune for a patient not previously on Optune. Orders to renew or extend treatment are not included in this total.

~~- 14 -~~

~~Net revenues.~~ ~~Substantially~~ all of our active markets and will continue to do so. The COVID-19 pandemic did not have a material impact on our financial results through the second quarter of 2023. The pandemic is not having a direct impact on our day-to-day operations; however, we are still observing lingering impacts that might continue to impact our business and clinical studies in the future. For example, in many locations staffing levels at clinical trial sites have not returned to pre-pandemic levels, and our ability to conduct and monitor clinical studies may be impacted.

Given the aggressive nature of the cancers that we treat, we believe that the fundamental value proposition of the TTFields platform remains unchanged. We continue to evaluate and plan for the potential effects of a possible COVID-19 resurgence on our business moving forward. The extent to which the COVID-19 pandemic may impact our business and clinical studies in the future will depend on further developments, which are highly uncertain and cannot be predicted with confidence. The COVID-19 pandemic may also have the effect of heightening many of the other risks described in our risk factors disclosed in our 2022 10-K.

Commentary on Results of Operations

Net revenues. Our revenues are primarily derived from patients using our ~~TTFields delivery system, marketed as Optune~~Products in our ~~currently~~ active markets. We charge ~~patients or their third-party healthcare payers directly~~for treatment with our Products on a monthly ~~basis and bear the financial risk of securing payment in the United States and Europe.~~

~~The following is a summary of gross billings and revenues recorded on an accrual basis and a cash basis by quarters (unaudited):~~

2017

2016

U.S. dollars in millions

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Gross billings

$
101.9

$
87.2

$
73.2

$
63.8

$
57.5

$
54.0

$
45.5

Accrual basis revenue

$
35.7

$
19.1

$
14.7

$
8.5

$
0.0

$
0.0

$
0.0

Cash basis revenue for therapy provided in the period

3.1

5.7

5.9

6.3

8.9

7.6

5.6

Cash basis revenue for therapy provided in previous periods

11.3

13.6

14.3

15.5

12.7

10.3

7.4

Net revenues

$
50.1

$
38.4

$
34.9

$
30.2

$
21.7

$
17.9

$
13.1

~~We began recognizing a portion of our~~basis. Our potential net revenues per patient are determined by our ability to secure payment, the monthly fee we collect and the number of months that the patient remains on ~~an accrual basis in the fourth quarter 2016. Prior~~therapy.

We also receive revenues pursuant to the ~~third quarter 2017,~~ ~~all of~~Zai Agreement. For additional information regarding the ~~net revenues recognized on an accrual basis represent charges~~Zai Agreement, see Note 12 to ~~certain U.S.-based third-party payers.~~ ~~Beginning~~the Consolidated Financial Statements in the third quarter 2017, net revenues recognized on an accrual basis represent charges to certain U.S.-based third-party payers and certain German payers. In the period of transition from cash-based to accrual-based revenue recognition, there is a one-time impact to net revenues as net revenues in the current period may also include revenues from gross billings from previous periods. In the table above, gross billings reflect the total charges for active patients on Optune without any deductions or adjustments for payer discounts, patient financial assistance, charitable care or other similar items. The subsequent table line items detail the three sources of net revenue in the applicable reporting period.

our 2022 10-K.

Cost of revenues.We contract with third parties to manufacture our Products. Our cost of revenues is ~~comprised~~ primarily ~~of (i) cost~~comprised of the following:

•disposable ~~transducer arrays purchased from third-party manufacturers, (ii)~~ arrays;

•depreciation expense for the field equipment, including the electric field generator used by ~~patients~~patients;

•patient support and ~~(iii)~~other personnel ~~warranty~~costs; and

•overhead costs, such as facilities, freight and depreciation of property, plant and equipment associated with managing our inventory, warehousing and order fulfillment functions.

Operating ~~Expenses.~~ expenses. Our operating expenses consist of research, development and clinical ~~trials,~~studies, sales and marketing and general and administrative expenses. Personnel costs are a significant component for each category

of operating expenses and consist of wages, benefits and bonuses. Personnel costs also include share-based compensation.

Financial ~~expenses, net.~~income (expenses), net.Financial ~~expenses,~~income (expenses), net primarily consists of ~~interest expense and related debt issuance costs under our~~ ~~Term Loan Credit Facility (as defined below)~~, 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. dollar. We ~~view~~have historically held substantially all of our cash balances in U.S. dollar denominated accounts to minimize the risk of translational currency exposure.

Results of Operations

The following discussion provides an analysis of our results of operations and ~~manage~~reasons for material changes therein for the three and six months ended June 30, 2023 as compared to the three and six months ended June 30, 2022. The tables contained in this section report U.S. dollars in thousands (except share, patient, and prescription data). The following table sets forth our consolidated statements of operations data:


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
	Unaudited				Unaudited
Net revenues	$	126,051	$	140,866	$	248,233	$	278,413
Cost of revenues	34,018		28,503		63,632		56,230
Gross profit	92,033		112,363		184,601		222,183

Operating costs and expenses:
Research, development and clinical studies	55,427		57,075		115,131		99,309
Sales and marketing	58,488		44,750		109,657		82,634
General and administrative	40,778		31,666		82,722		62,174
Total operating costs and expenses	154,693		133,491		307,510		244,117

Operating income (loss)	(62,660)		(21,128)		(122,909)		(21,934)
Financial income (expenses), net	8,756		(2,228)		17,925		(3,937)

Income (loss) before income taxes	(53,904)		(23,356)		(104,984)		(25,871)
Income taxes	3,514		652		5,495		2,784
Net income (loss)	$	(57,418)	$	(24,008)	$	(110,479)	$	(28,655)

Basic and diluted net income (loss) per ordinary share	$	(0.54)	$	(0.23)	$	(1.04)	$	(0.27)
Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share	106,289,073		104,627,789		105,979,791		104,408,164

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


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
	Unaudited				Unaudited
Cost of revenues	$	2,023	$	1,029	$	4,029	$	1,981
Research, development and clinical studies	8,537		7,624		20,316		14,425
Sales and marketing	10,213		6,802		21,857		13,457
General and administrative	11,967		10,368		25,622		21,005
Total share-based compensation expense	$	32,740	$	25,823	$	71,824	$	50,868

Key performance indicators

We believe certain commercial operating statistics are useful to investors in evaluating our commercial business as they help our management team and investors evaluate and compare the adoption of our Products from period to period. 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 ~~one~~less than 60 days. Prescriptions are a leading indicator of demand. A "prescription received" is a commercial order for Optune or Optune Lua that is received from a physician certified to treat patients with our Products for a patient not previously on Optune or Optune Lua. Orders to renew or extend treatment are not included in this total.

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


	June 30,
Operating statistics	2023	2022
Active patients at period end
United States (1)	2,200	2,229
Germany	499	458
Japan	352	346
Others	520	421
Total	3,571	3,454


	Three months ended June 30,		Six months ended June 30,
	2023	2022	2023	2022
Prescriptions received in period
United States (1)	981	954	2,032	1,889
Germany	204	216	412	436
Japan	92	95	164	197
Others	279	118	444	245
Total	1,556	1,383	3,052	2,767

(1) United States includes data for Canada for 2022. For 2023, Canada is included in "Others".

There were 16 active MPM patients on therapy as of June 30, 2023 and 25 MPM prescriptions were received in the three months ended June 30, 2023.

Three and six months ended June 30, 2023 compared to three and six months ended June 30, 2022


	Three months ended June 30,						Six months ended June 30,
	2023		2022		% Change		2023		2022		% Change
Net revenues	$	126,051	$	140,866	(11)	%	$	248,233	$	278,413	(11)	%

Net revenues. Net revenues decreased 11% to $126.1 million for the three months ending June 30, 2023 from $140.9 million for the same period in 2022, and decreased 11% to $248.2 million for the six-month period ended June 30, 2023 from $278.4 million for the same period in 2022. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, our net revenues were $50.1~~2023, the decrease resulted primarily from $13.4 million and ~~$123.4~~$18.8 million, respectively, in reduced collections from previously denied or appealed claims in the U.S. Net revenues for the three-month period ended June 30, 2023 were also impacted by a reduction of $5.5 million resulting from variations in approval patterns in the U.S. compared to the same period in 2022, offset by a $5.4 million increase resulting from variations in approval rates in Germany as more patients are meeting coverage criteria in the market.

We believe the outstanding denied and ~~our~~appealed claims that were most accessible were largely exhausted in 2022 and the remaining outstanding claims will take time to collect. As a result, we expect future net ~~loss~~revenue to more closely reflect core drivers: number of active patients on therapy, duration of therapy, and net realized price per month. We continue to actively appeal and pursue the remaining previously denied claims, but the cadence and size of these collections are difficult to predict.


	Three months ended June 30,						Six months ended June 30,
	2023		2022		% Change		2023		2022		% Change
Cost of revenues	$	34,018	$	28,503	19	%	$	63,632	$	56,230	13	%

Cost of revenues. Our cost of revenues for the three months ended June 30, 2023 was ~~$11.5~~$34.0 million, an increase of 19% from $28.5 million for the same period in 2022, and $63.6 million for the six months ended June 30, 2023, an increase of 13% from $56.2 million for the same period in 2022. For the three and six months ended June 30, 2023, the increase in cost of revenues was primarily due to increased costs of $3.5 million and ~~$50.7~~$6.5 million, ~~respectively. Our net loss~~respectively, in patient support capacity in anticipation of treating larger patient populations in new cancer indications and new geographic regions.

Gross margin was 73% for the three months ended June 30, 2023 compared to 80% for the three months ended June 30, 2022. Gross margin was 74% for the six months ended June 30, 2023 and 80% for the six months ended June 30, 2022. Excluding sales to Zai, cost of revenues per active patient per month was $2,878 for the three months ended June 30, 2023, an increase of 20% from $2,391 for the same period in 2022, primarily due to increased patient support capacity. 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. Product sales to Zai totaled $3.6 million and $6.3 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 includes $8.6~~2023 compared to $3.4 million and ~~$20.8~~$5.3 million ~~respectively, in non-cash share-based compensation expense. As of September 30, 2017, we had an accumulated deficit of $571.3 million.~~

~~Three~~for the three and six months ended ~~September~~June 30, ~~2017 compared~~2022. We expect that our gross margins will continue to ~~three months ended September 30, 2016~~

~~(All dollar figures in tables are in thousands unless otherwise indicated)~~

Three months ended September 30,

2017

2016

Change

% Change

Net revenues

$
50,109

$
21,674

$
28,435

131
%

~~Net revenues.~~ ~~Net revenues increased $28.4 million, or 131%,~~be impacted by current and future product enhancements, such as the ongoing launch of next generation arrays. We continue to ~~$50.1~~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.


	Three months ended June 30,						Six months ended June 30,
	2023		2022		% Change		2023		2022		% Change
Research, development and clinical studies	$	55,427	$	57,075	(3)	%	$	115,131	$	99,309	16	%
Sales and marketing	58,488		44,750		31	%	109,657		82,634		33	%
General and administrative	40,778		31,666		29	%	82,722		62,174		33	%
Total operating expenses	$	154,693	$	133,491	16	%	$	307,510	$	244,117	26	%

Research, development and clinical study expenses. Research, development and clinical study expenses decreased 3% to $55.4 million for the three months ended ~~September~~June 30, ~~2017~~2023 from ~~$21.7~~$57.1 million for the same period in 2022, and increased 16% to $115.1 million for the six-month period ended June 30, 2023 from $99.3 million in the same period in 2022. For the three months ended June 30, 2023, the change resulted primarily from reduced costs associated with recently completed clinical studies. For the six months ended June 30, 2023, the increase was primarily driven by an $6.9 million increase in engineering, regulatory affairs and preclinical costs, a $3.5 million increase in pre-launch activities related to new clinical trials, and an increase of $5.3 million in other personnel expenses. 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 31% to $58.5 million for the three months ended ~~September~~June 30, ~~2016. This~~2023 from $44.7 million for the same period in 2022, and increased 33% to $109.7 million for the six-month period ended June 30, 2023 from $82.6 million for the same period in 2022. For the three and six months ended June 30, 2023, these changes were primarily due to increase of $7.0 million and $12.0 million, respectively, in costs associated with geographic expansion and pre-launch activities intended to increase awareness in TTFields in anticipation of future approvals in new indications, as well as increased personnel costs of $3.4 million and $8.4 million, respectively. 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 increased 29% to $40.8 million for the three-month period ended June 30, 2023 from $31.7 million for the same period in 2022, and increased 33% to $82.7 million for the six months ended June 30, 2023 from $62.2 million for the same period in 2022. For the three and six months ended June 30, 2023, these changes were primarily due increases in personnel and project expenses to support potential new indication launches, new geographic launches, supply chain expansion and information technology enhancements of $9.1 million and $20.5 million, respectively.


	Three months ended June 30,						Six months ended June 30,
	2023		2022		% Change		2023		2022		% Change
Financial income (expenses), net	$	8,756	$	(2,228)	(493)	%	$	17,925	$	(3,937)	(555)	%

Financial income (expenses), net. Financial income increased 493% to $8.7 million in income for the three months ended June 30, 2023 from $2.2 million of expenses for the same period in 2022 and financial income increased 555% to $17.9 million in income for the six months ended June 30, 2023 from $3.9 million in expenses for the same period in 2022. For the three-month period ending June 30, 2023, the change from 2022 was primarily due to ~~an increase of $17.2~~$8.6 million in ~~commercial sales of Optune in the United States~~increased interest income and ~~an increase of $11.3~~$2.3 million in ~~commercial sales of Optune~~reduced foreign exchange rate expenses. For the six-month period ending June 30, 2023, the change from 2022 was primarily due to $17.9 million in ~~our other currently active markets, as well as the transition to accrual-based revenue recognition for a portion of our billings.~~

~~- 15 -~~

~~Cost of revenues.~~ ~~Our cost of revenues~~ increased ~~by $4.0~~interest income and $3.8 million in reduced foreign exchange expenses.


	Three months ended June 30,						Six months ended June 30,
	2023		2022		% Change		2023		2022		% Change
Income taxes	$	3,514	$	652	439	%	$	5,495	$	2,784	97	%

Income taxes. Income taxes increased $2.9 million, or ~~36%,~~439% to ~~$15.2~~$3.5 million for the three months ended ~~September~~June 30, ~~2017~~2023 from ~~$11.1~~$0.7 million for the ~~three~~same period in 2022, and income taxes increased $2.7 million, or 97% to $5.5 million

for the six months ended ~~September~~June 30, ~~2016. The increase resulted primarily~~2023 from the cost of shipping transducer arrays to a higher volume of commercial patients, as well as an increase in field equipment depreciation. Cost of revenues includes $0.1 million of non-cash share-based compensation.

~~Operating Expenses.~~

Three months ended September 30,

2017

2016

Change

% Change

Research, development and clinical trials

$
9,273

$
10,233

$
(960
)

(9
%)
Sales and marketing

16,387

15,865

522

3
%
General and administrative

15,215

12,723

2,492

20
%
Total operating expenses

$
40,875

$
38,821

$
2,054

5
%

Non-cash expenses:

Share-based compensation expense

$
8,550

$
5,466

$
3,084

56
%
Other non-cash expenses

600

708

(108
)

(15
%)
Total non-cash expenses

$
9,150

$
6,174

$
2,976

48
%

Total operating expenses, net of non-cash expenses *

$
31,725

$
32,647

$
(922
)

(3
%)

*	~~This non-GAAP metric has been included because management believes that it provides for a more accurate year to year comparison of our operating expenses without the impact of non-cash items.~~

~~Research, development and clinical trials expenses.~~ ~~Research, development and clinical trials expenses decreased $1.0 million, or 9%, to $9.3~~$2.8 million for the ~~three months ended September 30, 2017 from $10.2 million for the three months ended September 30, 2016.~~same period in 2022. The change is primarily due to a decrease in clinical trial expenses resulting from the conclusion of our EF-14 phase 3 pivotal trial in newly diagnosed GBM, a decrease in expenses related to the approval of our second generation Optune and a decrease in medical grants driven principally by timing, partially offset by an increase in clinical trial expenses for our LUNAR and METIS trials. These expenses include $1.0 million of non-cash share-based compensation.

~~Sales and marketing expenses.~~ Sales and marketing expenses increased $0.5 million, or 3%, to $16.4 million for the three months ended September 30, 2017 from $15.9 million for the three months ended September 30, 2016. The change was primarily due to an increase of $1.7 million in personnel costs, including an increase of $0.7 million in non-cash share-based compensation, and an increase of $0.4 million in commercial shipping charges, reflecting our expanding commercial operations in the United States and Germany. This was partially offset by a decrease of $1.6 million in marketing expenses primarily related to advertising and professional services for the launch of our second generation Optune and the communication of our inclusion in the updated National Comprehensive Cancer Network (NCCN) Clinical Practice Guidelines in Oncology for Central Nervous System Cancer (“NCCN Guidelines”). These expenses include $1.9 million of non-cash share-based compensation.

~~General and administrative expenses.~~ General and administrative expenses increased $2.5 million, or 20%, to $15.2 million for the three months ended September 30, 2017 from $12.7 million for the three months ended September 30, 2016. The change was primarily due to an increase of $2.5 million in personnel costs, including an increase of $2.3 million in share based compensation. Personnel costs included $5.7 million of non-cash share-based compensation expense, including equity awards granted to our executive chairman and expenses related to our employee share purchase plan (“ESPP”).

~~Financial expenses, net.~~ ~~Financial expenses remained consistent at $2.2 million for both the three months ended September 30, 2017 and the three months ended September 30, 2016.~~

Three months ended September 30,

2017

2016

Change

% Change

Income tax expenses

$
3,423

$
3,174

$
249

8
%

~~Income taxes.~~ Income taxes increased $0.2 million, or 8%, to $3.4 million for the three months ended September 30, 2017 from $3.2 million for the three months ended September 30, 2016. The increase was primarily a result ofincreases reflect a change in the mix of applicable statutory tax rates in ~~certain non-US~~active jurisdictions.

~~- 16 -~~

~~Nine months ended September 30, 2017 compared~~

Non-GAAP financial measures

We also measure our performance using a non-GAAP measurement of earnings before interest, taxes, depreciation, amortization and shared-based compensation (“Adjusted EBITDA”). We believe Adjusted EBITDA is useful to ~~nine months ended September 30, 2016~~

~~(All dollar figures~~investors in ~~tables are in thousands unless otherwise indicated)~~

Nine months ended September 30,

2017

2016

Change

% Change

Net revenues

$
123,365

$
52,646

$
70,719

134
%

~~Net revenues.~~ ~~Net revenues increased~~evaluating our operating performance because it helps investors evaluate and compare the results of our operations from period to period by ~~$70.7~~removing the impact of earnings attributable to our capital structure, tax rate and material non-cash items, specifically share-based compensation.

We calculate Adjusted EBITDA as operating income before financial expenses and income taxes, net of depreciation, amortization and share-based compensation. The following table reconciles net income (loss), which is the most directly comparable GAAP operating performance measure, to Adjusted EBITDA.


	Three months ended June 30,						Six months ended June 30,
	2023		2022		% Change		2023		2022		% Change
Net income (loss)	$	(57,418)	$	(24,008)	139	%	$	(110,479)	$	(28,655)	286	%
Add: Income tax	3,514		652		439	%	5,495		2,784		97	%
Add: Financial expenses (income), net	(8,756)		2,228		(493)	%	(17,925)		3,937		(555)	%
Add: Depreciation and amortization	2,721		2,654		3	%	5,443		5,264		3	%
EBITDA	$	(59,939)	$	(18,474)	224	%	$	(117,466)	$	(16,670)	605	%
Add: Share-based compensation	32,740		25,823		27	%	71,824		50,868		41	%
Adjusted EBITDA	$	(27,199)	$	7,349	(470)	%	$	(45,642)	$	34,198	(233)	%

Adjusted EBITDA decreased by $34.5 million, or ~~134%~~470%, to ~~$123.4~~a loss of $27.2 million for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2023 from ~~$52.6~~income of $7.3 million for the ~~nine months ended September 30, 2016. This was primarily due to an increase of $49.6 million~~same period in ~~commercial sales of Optune in the United States~~2022, and ~~an increase of $21.2 million in commercial sales of Optune in our other currently active markets, as well as the transition to accrual-based revenue recognition for a portion of our billings.~~

~~Cost of revenues.~~ ~~Our cost of revenues (excluding the impairment of field equipment described below) increased~~decreased by ~~$11.1 million, or 38%~~233%, to ~~$40.0~~a loss of $45.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 from ~~$28.9~~income of $34.2 million for the ~~nine months ended September 30, 2016. The~~same period in 2022. This decrease was primarily attributable to increased growth investments intended to expand our capacity to treat larger patient populations, to enhance commercial capabilities and to increase ~~resulted primarily from the cost~~awareness of ~~shipping transducer arrays to a higher volume~~TTFields in anticipation of ~~commercial patients, as well as an increase~~potential future approvals in ~~field equipment depreciation. Cost of revenues include $0.4 million of non-cash share-based compensation.~~

We received FDA approval on our PMA supplement application to market our second generation Optune in the United States in July 2016. In the second quarter 2016, we recorded an impairment loss with respect to the write-off of first generation Optune field equipment (finished goods and production stage) in the amount of $6.4 million that was not recoverable and was presented in cost of revenues. We do not expect the conversion to our second generation Optune to result in an additional material impairment charge in the future.

~~Operating Expenses.~~

Nine months ended September 30,

2017

2016

Change

% Change

Research, development and clinical trials

$
28,055

$
32,996

$
(4,941
)

(15
%)
Sales and marketing

47,503

43,771

3,732

9
%
General and administrative

42,660

38,010

4,650

12
%
Total operating expenses

$
118,218

$
114,777

$
3,441

3
%

Non-cash expenses:

Share-based compensation expense

$
20,407

$
16,248

$
4,159

26
%
Other non-cash expenses

1,749

2,023

(274
)

(14
%)
Total non-cash expenses

$
22,156

$
18,271

$
3,885

21
%

Total operating expenses, net of non-cash expenses

$
96,062

$
96,506

$
(444
)

(0
%)

*	~~This non-GAAP metric has been included because management believes that it provides for a more accurate year to year comparison of our operating expenses without the impact of non-cash items.~~

~~Research, development and clinical trials expenses.~~ Research, development and clinical trials expenses decreased $4.9 million, or 15%, to $28.1 million for the nine months ended September 30, 2017 from $33.0 million for the nine months ended September 30, 2016 . The change is primarily due to a decrease in clinical trial expenses resulting from the conclusion of our EF-14 phase 3 pivotal trial in newly diagnosed GBM, a decrease in expenses related to the approval of our second generation Optunenew indications, and a ~~decrease~~reduction in medical grants driven principally by timing, partially offset by an increase in clinical trial expenses for our LUNAR and METIS trials. These expenses include $2.6 million of non-cash share-based compensation.

~~Sales and marketing expenses.~~ Sales and marketing expenses increased $3.7 million, or 9%, to $47.5 million for the nine months ended September 30, 2017 from $43.8 million for the nine months ended September 30, 2016. The change was primarily due to an increase of $6.1 million in personnel costs, including $0.4 million of non-cash share-based compensation, and an increase of $1.2 million in commercial shipping charges, reflecting our expanding commercial operations in the United States and Germany. This was partially offset by a decrease of $1.6 million in marketing expenses primarily related to advertising and professional services for the launch of our second generation Optune and the communication of our inclusion in the updated NCCN Guidelines. These expenses include $4.3 million of non-cash share-based compensation.

~~- 17 -~~

~~General and administrative expenses.~~ General and administrative expenses increased $4.7 million, or 12%, to $42.7 million for the nine months ended September 30, 2017 from $38.0 million for the nine months ended September 30, 2016. The change was primarily due to an increase of $5.6 million in personnel costs, including $3.5 million in share based compensation, partially offset by a decrease of $0.9 million in professional services and other expenses. Personnel costs included $13.5 million of non-cash share-based compensation expense, including equity awards granted to our executive chairman and expenses related to our ESPP.

~~Financial expenses, net.~~ Financial expenses, net increased by $3.5 million, or 106%, to $6.8 million for the nine months ended September 30, 2017 from $3.3 million for the nine months ended September 30, 2016. The change was primarily due to an increase in interest expense, including amortization expense of the discount and deferred issuance costs, related to our July 2016 withdrawal of the remaining $75 million in available funds under the term loan credit facility that we,revenue as borrower, entered into with BioPharma Secured Investments III Holdings Cayman LP, as lender, in January 2015, amended as of December 2016, February 2017 and September 2017 (collectively, the “Term Loan Credit Facility”).

described above.

Nine months ended September 30,

2017

2016

Change

% Change

Income tax expenses

$
9,110

$
8,944

$
166

2
%

Liquidity and Capital Resources

~~Sources~~

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

~~Since inception,~~June 30, 2023, we had an accumulated deficit of $888.9 million. To date, we have primarily financed our operations ~~primarily~~ through the issuance and sale of equity and the proceeds from long-term loans. ~~As of September~~

At June 30, ~~2017,~~2023, we had ~~received a total of $715.9~~$940.8 million ~~from these activities. As of September 30, 2017, we had an accumulated deficit of $571.3 million since inception.~~

~~Our net losses were $50.7 million for the nine months ended September 30, 2017 and $131.8 million for the year ended December 31, 2016. Our net losses primarily resulted from costs incurred~~ in connection with our pre-clinical and clinical trial programs, costs incurred in our commercial launch efforts, and general and administrative costs necessary to operate as a multi-national oncology business.

~~As of September 30, 2017, we had $82.1 million of~~ cash, ~~and~~ cash equivalents and ~~$104.5~~short-term investments, a decrease of $28.6 million ~~of short-term investments.~~compared to $969.4 million at December 31, 2022. We believe our cash, ~~and~~ cash equivalents and ~~short term~~short-term investments as of ~~September~~June 30, ~~2017,~~2023 are sufficient for our operations for at least the next ~~twelve~~12 months ~~taking into consideration~~based on our existing business plan and our ability to control the timing of significant expense ~~commitments and our upcoming milestone payment obligation discussed below.~~

In the first quarter of 2018, we anticipate making a milestone payment of $5.5 million (the “Milestone Payment”) to the Technion Research and Development Foundation (“Technion”) pursuant to the settlement agreement dated February 10, 2015 (the “Settlement Agreement”). Pursuant to the Settlement Agreement, we are obligated to pay the Milestone Payment to Technion in the quarter following the quarter in which we achieve $250.0 million of cumulative net sales (as defined in the Settlement Agreement) (the “Net Sales Milestone”).commitments. We ~~anticipate achieving the Net Sales Milestone in the fourth quarter of 2017. We previously accrued for the anticipated Milestone Payment in the fourth quarter of 2016.~~

~~We also~~ expect that our ~~research, development and clinical trials expenses, sales and marketing expenses and general and administrative~~ operating expenses will continue to increase over the next several ~~years.~~years and may outpace our gross profit as we prepare to expand into additional indications beyond GBM. As a result, we may need to raise additional capital ~~in the future~~ to fund our operations.

~~- 18 -~~

Nine months ended September 30,

2017

2016

Net cash used in operating activities

$
(30,236
)

$
(93,867
)
Net cash provided by investing activities

8,713

16,406

Net cash provided by financing activities

3,839

73,796

Net decrease in cash and cash equivalents

(17,684
)

(3,665
)
Effect of exchange rates on cash and cash equivalents

8

64

Changes in short-term investments

(15,994
)

(30,277
)
Net decrease in cash, cash equivalents and short-term investments

$
(33,670
)

$
(33,878
)
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:


	Six months ended June 30,
	2023		2022		Change		% Change
Net cash provided by (used in) operating activities	$	(39,464)	$	12,075	$	(51,539)	(427)	%
Net cash provided by (used in) investing activities	68,390		138,347		(69,957)		(51)	%
Net cash provided by financing activities	12,706		7,877		4,829		61	%
Effect of exchange rate changes on cash and cash equivalents	28		(145)		173		(119)	%
Net increase (decrease) in cash, cash equivalents and restricted cash	$	41,660	$	158,154	$	(116,494)	(74)	%

Operating ~~activities~~

activities. Net cash used in or provided by operating activities ~~primarily~~ represents our net ~~loss~~income (loss) for the periods ~~presented. Adjustments to net loss for non-cash items include~~presented, share-based compensation and depreciation and ~~amortization, accrued interest and impairments.~~amortization. Operating cash flows are also impacted by changes in ~~operating assets and liabilities, principally trade receivables, prepaid expenses, inventories, trade payables and accrued expenses.~~

working capital.

Net cash used in operating activities ~~was $30.2~~increased by $51.5 million from $12.1 million net cash provided by operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017, as compared~~2022 to ~~$93.9~~$39.5 million net cash used in operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2016, reflecting~~2023. This increase was a ~~net loss of $50.7 million and a change of $6.2 million in our net operating assets and liabilities, partially offset by non-cash charges of $26.7 million.~~

~~The change in our net operating assets and liabilities was primarily the~~ result of ~~an increase in other payables of $8.3 million, a decrease in other receivables of $4.5 million, an increase in other long-term liabilities and employee benefit liabilities,~~ net ~~of $1.4 million, and a decrease in inventories of $0.9~~income decreasing $81.8 million, offset by a $24.4 million decrease in working capital, an increase of $11.0 million in ~~trade receivables~~cash to non-cash based expenses primarily consisting of ~~$16.7 million, a decrease in trade payables of $4.2 million,~~shared-based compensation and an increase of $4.6 million in other ~~long-term assets~~long term assets. The decrease in working capital includes a $26.7 million decrease in accounts receivable offset by a decrease of ~~$0.5 million. Non-cash charges included $20.8 million of share-based compensation, $5.7 million of depreciation and amortization and $0.2~~$3.1 million in ~~impairments.~~

accounts payable.

Investing ~~activities~~

activities. Our investing activities consist primarily of ~~capital expenditures to purchase property and equipment and field equipment, as well as~~ investments in and redemptions of our short-term ~~investments.~~

investments as well as investments in property and equipment.

Net cash provided by investing activities was ~~$8.7~~$68.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$16.4~~$138.3 million provided by investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2016, reflecting an increase~~2022. The $68.4 million net cash provided by investing activities for the six months ended June 30, 2023 was primarily attributable to ~~our receipt~~$81.4 million of ~~$120.0 million~~net proceeds from the maturity of short-term investments ~~partially offset~~and the purchase of $13.0 million of property and equipment. The $138.3 million net cash provided by investing activities for the six months ended June 30, 2022 was primarily attributable to $147.6 million of net proceeds in short-term investments and by the purchase of ~~$104.0 million of new short-term investments, purchases of $3.5 million of field equipment, purchases of $2.0~~$9.2 million of property and ~~equipment, and a $1.9 million increase in restricted cash.~~

equipment.

Financing ~~activities~~

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 ~~$3.8~~$12.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, as compared to ~~$73.8~~$7.9 million provided by financing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2016, reflecting~~2022. The net cash provided by financing activities for the six months ended June 30, 2023 and June 30, 2022 included proceeds ~~received~~ from the exercise of ~~warrants and~~ options ~~and our ESPP.~~

~~Our material outstanding indebtedness consists of our Term Loan Credit Facility. As of September 30, 2017,~~under the Company's stock option plan.

On November 5, 2020, we issued $575.0 million aggregate principal ~~balance~~amount of ~~amounts outstanding under~~0% Convertible Senior Notes due 2025 (the “Notes”). The Notes are senior unsecured obligations. The Notes do not bear regular interest, and the ~~Term Loan Credit Facility was $100.0 million. We~~principal amount of the Notes will not accrete. The Notes are convertible at an initial conversion rate of 5.9439 ordinary shares per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $168.24 per ordinary share. The Notes are convertible at the option of the holders upon the satisfaction of certain other conditions and during certain periods, and if the Company exercises its right to redeem the Notes as permitted or required by the indenture. On or after August 1, 2025 until the close of the business on the business day immediately preceding the maturity date, holders may ~~prepay~~convert all or any portion of their Notes at the ~~term loans, in whole,~~conversion rate at any time irrespective of the foregoing conditions.

In January 2021, we irrevocably elected to settle all conversions of Notes by a combination of cash and ~~must prepay~~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.

For more information, see Note 10a. to the Consolidated Financial Statements in the ~~event~~2022 10-K.

Term loan credit facility

On November 6, 2020, we entered into a new three-year $150.0 million senior secured revolving credit facility with a syndicate of a change of control, in each case, subject to a pay-down fee, prepayment premium and/or make-whole payment. Interest on the outstanding loan is 10% annually, payable quarterly in arrears. The pay-down fee on all principal payments to be paid on the date such payments are made is 0.75% and the pre-payment fee ifrelationship banks (the "2020 Credit Facility"). On February 17, 2023, we ~~prepay outstanding loan amounts prior~~gave irrevocable notice to the ~~first, second or third year from the initial funding date is 3.0%, 2.0% or 1.0%, respectively.~~

~~- 19 -~~

~~All obligations~~administrative agent under the ~~Term Loan~~2020 Credit Facility that we terminated all commitments, effective February 22, 2023. This effectively terminated the 2020 Credit Facility, as our ability to borrow and our 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.

The commitments under the 2020 Credit Facility were guaranteed by certain of our ~~current~~subsidiaries and ~~future domestic direct and indirect subsidiaries. In addition, the obligations under the Term Loan Credit Facility are~~ secured by a ~~first-priority security~~first lien on our and certain of our subsidiaries’ assets. Outstanding loans bore interest per annum at a sliding scale based on the our secured leverage ratio from 2.75% to 3.25% above the applicable interbank borrowing reference rate for the currency in ~~substantially all~~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 ~~the property~~a minimum fixed charge coverage ratio and ~~assets of,~~specifying a maximum senior secured net leverage ratio, as well as ~~the equity interests owned by, us and the other guarantors. On March 28, 2017, the Term Loan Credit Facility was amended as~~customary events of ~~February 21, 2017 to increase to $1.5 million the limit in the Company’s pledges and deposits security liability for reimbursement or indemnification obligations in respect~~default which include a change of letters of credit or bank guarantees for the benefit of the Company’s landlords. On September 29, 2017, the Term Loan Credit Facility was amended as of September 27, 2017 to increase the limit on the Company’s cash held at any financial institution to secure one or more letters of credit issued by such financial institution in respect of leased premises to $1.5 million, to increase the limit on the aggregate balance in certain of the Company’s operating accounts to $2.5 million, and to add certain provisions enabling the Company’s use of storage facilities to facilitate distribution of products to patients.

~~The Term Loan Credit Facility has a minimum liquidity covenant,~~control, which ~~is tested quarterly. In addition, we must meet certain pro forma net sales requirements. The Term Loan Credit Facility also contains other customary covenants.~~

are no longer applicable.

Contractual Obligations and Commitments

There ~~were~~have been no material changes from the information disclosed in our ~~commitments under contractual obligations during the three months ended September 30, 2017.~~

The total amount of unrecognized tax benefits for uncertain tax positions was $3.5 million and $2.4 million at September 30, 2017 and December 31, 2016, respectively. Payment of these obligations would result from settlements with taxing authorities. Discussions with the taxing authorities are ongoing and we cannot estimate with reasonable certainty the timing or amount of any such payments.

2022 10-K.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under ~~SEC~~U.S. Securities and Exchange Commission (“SEC”) rules.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes from the information disclosed in our ~~Annual Report on Form 10-K for the year ended December 31, 2016.~~

2022 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of ~~the design and operation of~~ our disclosure controls and procedures as of ~~September~~June 30, ~~2017.~~2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of ~~September~~June 30, ~~2017,~~2023, our Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~September~~June 30, ~~2017,~~2023, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2017,~~2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~- 20 -~~

Item 1. Legal Proceedings

In ~~January 2017, two~~June 2023, a putative class action ~~lawsuits were~~lawsuit was filed against the Company, its ~~directors~~Executive Chairman and ~~certain of~~ its ~~officers, as well as the underwriters in the Company’s October 2015 initial public offering.~~Chief Executive Officer. The ~~complaints,~~complaint, which ~~purport~~purports to be brought on behalf of a class of persons and/or entities who purchased or otherwise acquired ordinary shares of the Company ~~pursuant and/or traceable to the registration statement and prospectus issued in connection with the Company’s initial public offering,~~from January 5, 2023 through June 5, 2023, allege material misstatements and/or omissions in the Company’s ~~initial~~ public offering materials in alleged violation of the federal securities laws and seek compensatory damages, among other remedies. The two actions have been consolidated and the plaintiffs filed a consolidated amended complaint on May 31, 2017. The court granted the defendants’ motion to bifurcate the motion to dismiss into two stages: a threshold motion to dismiss for lack of personal jurisdiction, lack of subject matter jurisdiction, and insufficient process and service of process; and, if the matter is not dismissed following that threshold motion, a subsequent merits motion to dismiss regarding whether the allegations in the amended complaint state a claim under the securities laws. The defendants filed the threshold motion to dismiss on July 31, 2017, and the plaintiffs filed an oppositionstatements with respect to the ~~threshold motion to dismiss on September 29, 2017.~~results from its phase 3 LUNAR clinical trial. The Company believes that the ~~amended complaint~~action is without merit and plans to defend the ~~consolidated lawsuits~~lawsuit vigorously. ~~The Company has not accrued any amounts~~

In addition, from time to time, we are involved in ~~respect~~various legal proceedings, claims, investigations and litigation that arise in the ordinary course of our business. Litigation is inherently uncertain. Accordingly, we cannot predict with certainty the outcome of these ~~lawsuits, as~~matters. After considering a ~~liability~~number of factors, including (but not limited to) the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, management believes that the ultimate disposition of these legal actions will not ~~probable and the amount~~materially affect its consolidated financial position or results of ~~any potential liability cannot be reasonably estimated.~~

operations.

Item 1A. Risk Factors

There have been no material changes to our risk factors disclosed in ~~our Annual Report on Form 10-K for~~Part I, Item 1A “Risk Factors” in the ~~year ended December 31, 2016.~~

2022 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In July 2017, an investor in our 2007 Series E preferred shares offering exercised warrants to purchase 1,293 ordinary shares with an exercise price of $3.59 per share. We believe that this issuance was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act regarding transactions not involving a public offering.

Item 3. Defaults Upon Senior Securities

Item 4. Mine Safety Disclosures

Item 5. Other Information

~~None.~~

~~- 21 -~~

Securities Trading Plans of Executive Officers and Directors

Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables prearranged transactions in securities in a manner that avoids concerns about initiating transactions at a future date while possibly in possession of material nonpublic information. Our Insider Trading Policy permits our executive officers and directors to enter into trading plans designed to comply with Rule 10b5-1.

The following table describes contracts, instructions or written plans for the purchase or sale of our securities that are intended to satisfy the affirmative defense conditions of Rule 10b5–1(c) promulgated under the Securities Exchange Act of 1934, as amended (each a "Rule 10b5-1 Plan") adopted by our executive officers and directors during the three month period ending June 30, 2023:

Name and Title

Date of Adoption

Duration of Rule 10b5-1 Plan

Aggregate Number of Securities to be Purchased Pursuant to the Rule 10b5-1 Plan

Aggregate Number of Securities to be Sold Pursuant to the Rule 10b5-1 Plan

Uri Weinberg, Chief Innovation Officer

June 9, 2023

1/2/2024-12/31/2024

37,474

92,859

Kinyip Gabriel Leung, Director

June 8, 2023

9/7/2023-8/31/2024

18,136

70,136

During the three-month period ending June 30, 2023, none of our executive officers or directors terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

EXHIBIT INDEX

Exhibit

Incorporated by Reference

Filed
Number

Exhibit Description

Form

Date

Number

Herewith
10.1

Third Amendment to Loan and Security Agreement, dated as of September 27, 2017, by and between the Company and BioPharma Secured Investments III Holdings Cayman LP

8-K

10/5/17

10.1

31.1

Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended


X
31.2

Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended


X
32.1*

Certification of Principal Executive Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350


X
32.2*

Certification of Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350


X
99.1

NovoCure Limited Policy on Recoupment of Incentive Compensation

8-K

8/1/17

99.1

101.INS

XBRL Instance Document

X
101.SCH

XBRL Taxonomy Extension Schema Document

X
101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

X
101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

X
101.LAB

XBRL Taxonomy Extension Label Linkbase Document

X
101.PRE

XBRL Extension Presentation Linkbase Document

X

~~The certifications attached as Exhibits 32.1~~

Exhibit
Number

Incorporated by Reference

Filed
Herewith

Exhibit Description

Form

Date

Number

31.1

Certification of Principal Executive Officer Required Under Rule 13a-14(a) and ~~32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing~~15d-14(a) of ~~NovoCure Limited under the Securities Act of 1933, as amended, or~~ the Securities Exchange Act of 1934, as amended ~~whether made before or after~~

31.2

Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the ~~date~~Securities Exchange Act of ~~this Form 10-Q, irrespective~~1934, as amended

32.1*

Certification of ~~any general incorporation language~~Principal Executive Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350

32.2*

Certification of Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Extension Presentation Linkbase Document

104

Cover Page Interactive Date File (formatted as Inline XBRL and contained in ~~such filing.~~

Exhibit 101)

~~- 22 -~~

* The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of NovoCure Limited under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.

Table of Contents ~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	~~NovoCure Limited~~
		NovoCure Limited
~~Date: October 26, 2017~~		~~/s/ Wilco Groenhuysen~~
Date: July 27, 2023		~~Wilco Groenhuysen~~ /s/ Ashley Cordova
		Ashley Cordova Chief Financial Officer
	(principal financial and accounting officer and duly authorized officer)

~~- 23 -~~

	~~Page~~
		Page
Cautionary Note Regarding Forward Looking Statements			ii i
Trademarks			ii

PART I—FINANCIAL INFORMATION

Item 1.		Financial Statements			2
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			12 17
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			20 26
Item 4.		Controls and Procedures			20 26

PART II—OTHER INFORMATION

Item 1.		Legal Proceedings			21 27
Item 1A.		Risk Factors			21 27
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			21 27
Item 3.		Defaults Upon Senior Securities			21 27
Item 4.		Mine Safety Disclosures			21 27
Item 5.		Other Information			21 27
Item 6.		Exhibits			22 28

		Signatures		23 29

	Three months ended September 30,						Nine months ended September 30,						Year ended December 31,
	2017			2016			2017			2016			2016
	Unaudited						Unaudited						Audited
Net revenues	$	50,109		$	21,674		$	123,365		$	52,646		$	82,888
Cost of revenues		15,153			11,118			39,969			28,897			39,870
Impairment of field equipment		-			-			-			6,412			6,412

Gross profit		34,956			10,556			83,396			17,337			36,606

Operating costs and expenses:
Research, development and clinical trials		9,273			10,233			28,055			32,996			41,467
Sales and marketing		16,387			15,865			47,503			43,771			59,449
General and administrative		15,215			12,723			42,660			38,010			51,007

Total operating costs and expenses		40,875			38,821			118,218			114,777			151,923

Operating loss		(5,919	)		(28,265	)		(34,822	)		(97,440	)		(115,317	)
Financial expenses, net		2,156			2,189			6,785			3,293			6,147

Loss before income tax expense		(8,075	)		(30,454	)		(41,607	)		(100,733	)		(121,464	)
Income tax expense		3,423			3,174			9,110			8,944			10,381

Net loss	$	(11,498	)	$	(33,628	)	$	(50,717	)	$	(109,677	)	$	(131,845	)

Basic and diluted net loss per ordinary share	$	(0.13	)	$	(0.39	)	$	(0.57	)	$	(1.29	)	$	(1.54	)

Weighted average number of ordinary shares used in computing basic and diluted net loss per share		89,125,646			85,774,874			88,265,835			85,153,644			85,558,448

	Ordinary shares		Additional paid-in		Accumulated other comprehensive			Accumulated			Total shareholders'
	Shares		capital		loss			deficit			equity

Balance as of December 31, 2015 (audited)		83,778,581	$	640,406	$	(1,505	)	$	(388,081	)	$	250,820
Share-based compensation to employees		-		21,441		-			-			21,441
Exercise of options and warrants		3,195,477		993		-			-			993
Issuance of shares in connection with employee stock purchase plan		92,388		616		-			-			616
Tax benefit from share-based award activity		-		698		-			-			698
Other comprehensive loss, net of tax benefit of $38		-		-		(378	)		-			(378	)
Net loss		-		-		-			(131,845	)		(131,845	)
Balance as of December 31, 2016 (audited)		87,066,446	$	664,154	$	(1,883	)	$	(519,926	)	$	142,345

Share-based compensation to employees		-		20,760		-			-			20,760
Exercise of options and warrants		2,172,266		3,095		-			-			3,095
Cumulative effect adjustment resulting from ASU 2016-09 adoption (see Note 1)		-		670		-			(670	)		-
Issuance of shares in connection with employee stock purchase plan		116,967		781		-			-			781
Other comprehensive income, net of tax benefit of $57		-		-		421			-			421
Net loss		-		-		-			(50,717	)		(50,717	)
Balance as of September 30, 2017 (unaudited)		89,355,679	$	689,460	$	(1,462	)	$	(571,313	)	$	116,685

	2017						2016
U.S. dollars in millions	Q3		Q2		Q1		Q4		Q3		Q2		Q1
Gross billings	$	101.9	$	87.2	$	73.2	$	63.8	$	57.5	$	54.0	$	45.5

Accrual basis revenue	$	35.7	$	19.1	$	14.7	$	8.5	$	0.0	$	0.0	$	0.0
Cash basis revenue for therapy provided in the period		3.1		5.7		5.9		6.3		8.9		7.6		5.6
Cash basis revenue for therapy provided in previous periods		11.3		13.6		14.3		15.5		12.7		10.3		7.4
Net revenues	$	50.1	$	38.4	$	34.9	$	30.2	$	21.7	$	17.9	$	13.1

Exhibit		Incorporated by Reference			Filed
Number	Exhibit Description	Form	Date	Number	Herewith
10.1	Third Amendment to Loan and Security Agreement, dated as of September 27, 2017, by and between the Company and BioPharma Secured Investments III Holdings Cayman LP	8-K	10/5/17	10.1
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended				X
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended				X
32.1*	Certification of Principal Executive Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350				X
32.2*	Certification of Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350				X
99.1	NovoCure Limited Policy on Recoupment of Incentive Compensation	8-K	8/1/17	99.1
101.INS	XBRL Instance Document				X
101.SCH	XBRL Taxonomy Extension Schema Document				X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document				X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				X
101.PRE	XBRL Extension Presentation Linkbase Document				X