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Note 1: Organization and Basis of Presentation
a. NovoCure Limited (including its consolidated subsidiaries, the “Company”) was incorporated in Jersey and is principally engaged in the development, manufacture and commercialization of tumor treating fields (“TTFields”) for the treatment of solid tumors. Since inception, the Company has devoted substantially all of its efforts to developing a family of products to deliver TTFields for a variety of solid tumor indications, raising capital and recruiting personnel. The Company commenced selling and marketing activities in the United States at the end of 2011, in certain countries in Europe in 2014 and in Japan in 2015.
b. On October 7, 2015, the Company completed its initial public offering (the “IPO”) by issuing 7,876,195 ordinary shares (including exercise of overallotments) and raising net proceeds of $157,534. In September 2015, the Company’s shareholders approved the restructuring of the Company’s share capital by converting the Company’s ordinary and preferred shares to no par value shares and by effecting a sub division of the issued and outstanding share capital of the Company based on a proportion of 1: 5.913 (“Share Split Ratio”), such that each ordinary and preferred share nominal value of £0.01 of the Company, was divided into 5.913 shares of such applicable class of shares of the Company each with no par value. It was also resolved to apply the Split Ratio to the Company’s outstanding options and warrants, in accordance with their terms. All share and per share information included in these consolidated financial statements has been retroactively adjusted to reflect the conversion to no par value shares and the Share Split Ratio.
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Note 2: Significant accounting policies
The consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”).
a. Use of estimates:
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, deferred taxes, tax liabilities, useful-life of field equipment and share-based compensation costs. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of net revenue and expenses during the reporting period. Actual results could differ from those estimates.
b. Financial statements in U.S. dollars:
The accompanying financial statements have been prepared in U.S. dollars in thousands.
The Company finances its operations in U.S. dollars and a substantial portion of its costs and revenues from its primary markets is incurred in U.S. dollars. As such, the Company’s management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, the functional and reporting currency of the Company is the U.S. dollar.
Transactions and balances denominated in U.S. dollars are presented at their original amounts. Monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with Accounting Standards Codification No. 830-10, “Foreign Currency Matters.” All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the consolidated statements of operations as financial income or expenses, as appropriate.
c. Principles of consolidation:
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances, including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.
d. Cash equivalents:
Cash equivalents are short-term, highly liquid investments that are readily convertible into cash with an original maturity of three months or less at the date acquired.
e. Short-term investments and restricted cash:
1. Short-term investments:
The Company accounts for investments in debt securities in accordance with ASC 320, “Investments-Debt and Equity Securities.” Management determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such determinations at each balance sheet date. For the years ended December 31, 2015 and 2014, all securities are classified as held-to-maturity since the Company has the intent and ability to hold the securities to maturity and, accordingly, debt securities are stated at amortized cost.
The amortized cost of held-to-maturity securities is adjusted for amortization of premiums and accretion of discounts to maturity and any other than temporary impairment losses. Such amortization and interest are included in the consolidated statement of operations as financial income or expenses, as appropriate.
For the three years ended December 31, 2015, no impairment losses other than temporary impairment losses have been identified.
2. Restricted cash:
The Company has restricted cash used as security for bank guarantees related to the use of Company credit cards.
f. Inventories:
Inventories are stated at the lower of cost or market. Cost is determined using the weighted average method. The Company regularly evaluates the ability to realize the value of inventory. If actual demand for the Company’s delivery systems deteriorates, or market conditions are less favorable than those projected, inventory write-offs may be required.
There were no inventory write-offs for the years ended December 31, 2015, 2014 and 2013.
g. Property and equipment:
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates:
|
|
% |
Computers and laboratory equipment |
|
15 - 33 |
Office furniture |
|
6 - 33 |
Production equipment |
|
20 |
Leasehold improvements |
|
Over the shorter of the term of the lease or its useful life |
h. Field equipment under operating leases:
Field equipment is stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the field equipment which was determined to be two years. Field equipment consists of equipment being utilized under rental agreements accounted for in accordance with ASC 840 on a monthly basis as an operating lease, as well as “service pool” equipment. Service pool equipment is equipment owned and maintained by the Company that is swapped for equipment that needs repairs or maintenance by the Company while being rented by a patient. The Company records a provision for any excess, lost or damaged equipment when warranted based on an assessment of the equipment. Write-downs for equipment are included in cost of revenues. During the years ended December 31, 2015, 2014 and 2013, write downs for $36, $12 and $19, respectively, had been identified.
i. Impairment of long-lived assets:
The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360-10, “Property, Plant and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. During the three years ended December 31, 2015, no impairment losses have been identified.
j. Other long-term assets:
Long term lease deposits in respect of office rent and vehicles under operating leases and restricted deposits are presented in other long-term assets.
k. Revenue recognition:
The TTFields delivery system (“System”) for GBM, Optune, is comprised of two main components: (1) an Electric Field Generator (the “device”) and (2) Transducer Arrays and related accessories that are disposable supplies to the device (“disposables”). Title is retained by the Company for the device and the patient is provided replacement disposables and technical support for the device during the rental period. The device and disposables are always supplied and functioning together and are not sold on a standalone basis.
Revenues are recognized when persuasive evidence of an arrangement exists, delivery of the system has occurred, the price is fixed or determinable and collectability is reasonably assured. The evidence of an arrangement generally consists of a prescription, a patient service agreement and the verification of eligibility and insurance with the patient’s third-party insurance company (“payer”). The Company generally bills third-party payers a monthly fee for use of the System by patients. As such, the Company takes assignment of benefits and risk of collection from the third-party payer. Patients have out-of-pocket costs for the amount not covered by their payer and the Company bills the patient directly for the amounts of their co-pays and deductible, subject to the Company’s patient assistance programs.
For the reported periods, all revenues are recognized when cash is collected assuming that all other revenue recognition criteria have been met, as the price is not fixed or determinable and the collectability cannot be reasonably assured. The price is not fixed or determinable since the Company does not have sufficient history with payers to reliably estimate their individual payment patterns and as such cannot reliably estimate the amount that would be ultimately collected. Once sufficient history is established and the Company can reliably estimate the amounts that would be ultimately collected per payer/payer group and the above criteria are met, the Company will recognize revenues from the use of the System on an accrual basis ratably over the lease term.
Revenues are presented net of indirect taxes, which include excise tax of $1,457 , $1,010, and $584 for the years ended December 31, 2015, 2014 and 2013, respectively, and other indirect tax of $818, $266 and $300 for the years ended December 31, 2015, 2014 and 2013, respectively.
l. Charitable care:
The Company provides Optune to patients who meet certain criteria under its charitable care policy without charge. Because the Company does not pursue collection of amounts determined to qualify as charity, they are not reported as revenue. The Company's costs of care provided under charitable care were: $1,376, $836 and $254 for the years ended December 31, 2015, 2014 and 2013, respectively. These estimates were determined by applying a ratio of costs to gross charges multiplied by the Company's gross charitable care charges.
m. Research, development and clinical trials:
Research, development and clinical trials, including direct and allocated expenses are expensed as incurred.
n. Shipping and handling costs:
The Company does not bill its customers for shipping and handling costs associated with shipping its delivery systems to its customers. These direct shipping and handling costs of $1,385, $553 and $431 for the years ended December 31, 2015, 2014 and 2013, respectively are included in selling and marketing costs.
o. Accounting for share-based payments:
The Company accounts for share-based compensation in accordance with ASC 718, “Compensation—Stock Compensation.” ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations.
The Company recognizes compensation costs net of a forfeiture rate only for those shares expected to vest using the accelerated method over the requisite service period of the award, which is generally the option vesting term of four years. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
The Company selected the Black-Scholes option-pricing model as the most appropriate fair value method for its option awards. The option-pricing model requires a number of assumptions, of which the most significant are the share price expected, expected volatility and the expected option term.
Prior to the IPO, the fair value of ordinary shares underlying the options was historically determined by management and the board of directors. Because there was no public market for the Company’s ordinary shares, the board of directors determined fair value of an ordinary share at the time of grant of the option by considering a number of objective and subjective factors including operating and financial performance, the lack of liquidity of share capital, general and industry specific economic outlook and valuations performed amongst other factors. For the period from January 1, 2015 through the IPO and for the two years ended December 31, 2014, the Company’s board of directors determined the fair value of ordinary shares for the reported periods, among other factors, based on valuations performed using the hybrid method, which is the hybrid between the probability weighted expected return method (PWERM) and the option pricing method, as the Company began to consider IPO activities commencing in January 2012.
The computation of expected volatility is based on actual historical share price volatility of comparable companies. Expected term of options granted is calculated using the average between the vesting period and the contractual term to the expected term of the options in effect at the time of grant. The Company has historically not paid dividends and has no foreseeable plans to pay dividends and, therefore, uses an expected dividend yield of zero in the option pricing model. The risk-free interest rate is based on the yield of U.S. treasury bonds with equivalent terms.
p. Fair value of financial instruments:
The carrying amounts of cash and cash equivalents, short-term investments, restricted cash, receivables and prepaid expenses, trade payables and other accounts payable and accrued expenses approximate their fair value due to the short-term maturity of such instruments. Based upon the borrowing terms and conditions currently available to the Company, the carrying values of the long-term loans approximate fair value.
The Company accounts for certain assets and liabilities at fair value under ASC 820, “Fair Value Measurements and Disclosures.” Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.
The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety.
The three levels of inputs that may be used to measure fair value are as follows:
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data; and
Level 3 - Unobservable inputs which are supported by little or no market activity.
The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of instrument, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the instrument are categorized as Level 3.
q. Basic and diluted net loss per share:
The Company applies the two class method as required by ASC 260-10, “Earnings Per Share.” ASC 260-10 requires the income or loss per share for each class of shares (ordinary and preferred shares) to be calculated assuming 100% of the Company’s earnings are distributed as dividends to each class of shares based on their contractual rights. No dividends were declared or paid during the reported periods.
According to the provisions of ASC 260-10, the Company’s preferred shares are not participating securities in losses and, therefore, are not included in the computation of net loss per share.
Basic and diluted net loss per share is computed based on the weighted average number of ordinary shares outstanding during each year. Diluted loss per share is computed based on the weighted average number of ordinary shares outstanding during the period, plus dilutive potential shares considered outstanding during the period, in accordance with ASC 260-10. Basic and diluted net loss per ordinary share was the same for each period presented as the inclusion of all potential ordinary shares (all preferred shares, options and warrants) outstanding was anti-dilutive.
r. Income taxes:
The Company accounts for income taxes in accordance with ASC 740-10, “Income Taxes.” ASC 740-10 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, to reduce deferred tax assets to their estimated realizable value, if needed.
The Company established reserves for uncertain tax positions based on the evaluation of whether or not the Company’s uncertain tax position is “more likely than not” to be sustained upon examination. The Company records interest and penalties pertaining to its uncertain tax positions in the financial statements as income tax expense.
s. Concentration of risks:
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, restricted cash and short-term investments.
Cash and cash equivalents and restricted cash are invested in major banks or financial institutions in Jersey, the United States, Israel, Luxemburg, Switzerland, Japan and Germany. Such investments may be in excess of insured limits and are not insured in other jurisdictions. Generally, these investments may be redeemed upon demand and, therefore, bear minimal risk.
The Company has no off-balance sheet concentrations of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.
In 2015, two payers represented $5,595 and $2,512 or 17% and 8% of net revenues, respectively. In 2014, the same two payers represented $2,372 and $2,014 or 15% and 12% of net revenues, respectively and in 2013, the same two payers represented $2,056 and $1,160 or 18% and 10% of net revenues, respectively.
t. Severance pay:
The majority of the Company’s employees in Israel have subscribed to Section 14 of Israel’s Severance Pay Law, 5723-1963 (“Section 14”). Pursuant to Section 14, the Company’s employees covered by this section are entitled to monthly deposits at a rate of 8.33% of their monthly salary, made on their behalf by the Company. Payments in accordance with Section 14 release the Company from any future severance liabilities in respect of those employees. Neither severance pay liability nor severance pay fund under Section 14 for such employees is recorded on the Company’s consolidated balance sheet.
With regard to employees in Israel that are not subject to Section 14, the Company’s liability for severance pay is calculated pursuant to Israeli Severance Pay Law, based on the most recent salary of the relevant employees multiplied by the number of years of employment as of the balance sheet date. These employees are entitled to one month’s salary for each year of employment or a portion thereof. The Company’s liability for these employees is fully provided for through monthly deposits to the employees’ pension and management insurance policies and an accrual. The value of these deposits is recorded as an asset on the Company’s consolidated balance sheet.
The carrying value of the deposited funds is based on the cash surrender value and includes profits accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to the Israeli Severance Pay Law. Severance pay expense for the years ended December 31, 2015, 2014 and 2013 amounted to $356, $307 and $288, respectively.
u. Retirement and pension plans:
The Company has a 401(k) retirement savings plan for its U.S. employees. Each eligible employee may elect to contribute a portion of the employee’s compensation to the plan. The Company does not make any matching contributions to the plan.
The Company has a defined benefit plan with a pension fund for its Swiss employees, whereby the employee and the Company contribute to the pension fund. The Company accounts for its obligation, in accordance with ASC 715, "Compensation – Retirement Benefits" (see note 9).
The pension expense for the years ended December 31, 2015, 2014 and, 2013 was $404, $205 and $70, respectively.
v. Contingent liabilities:
The Company accounts for its contingent liabilities in accordance with ASC 450, “Contingencies.” A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. As of December 31, 2015 and 2014, the Company was not a party to any ligation that could have a material adverse effect on the Company’s business, financial position, results of operations or cash flows.
w. Other comprehensive loss:
The Company accounts for comprehensive loss in accordance with ASC 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive loss and its components. Comprehensive loss generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The accumulated other comprehensive loss, net of taxes, at December 31, 2015 relates to a pension liability.
x. Recently issued accounting pronouncements:
In November 2015, the Financial Accounting Standards Board ("FASB") issued an accounting standards update for income taxes, which requires deferred tax assets and liabilities to be classified as noncurrent on the consolidated balance sheets. The new accounting guidance is effective for annual reporting periods beginning after December 15, 2016 and interim periods therein. Early adoption is permitted for all entities as of the beginning of interim or annual reporting periods. The Company early adopted the new guidance for the year ended December 31, 2015 and has applied the amendment on a prospective basis.
In April 2015, the FASB amended the existing accounting standards for imputation of interest. The amendments require that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by these amendments. The Company is required to adopt the guidance in the first quarter of fiscal 2017. Early adoption is permitted. The amendments should be applied retrospectively with the adjusted balance sheet of each individual period presented, in order to reflect the period-specific effects of applying the new guidance. The Company early adopted the new guidance for the year ended December 31, 2015.The adoption of this standard resulted in a reclassification of the debt issuance costs of $1.4 million for the year ended December 31, 2015, from Other long-term assets to Long-term loan, net of discount and issuance costs on the consolidated balance sheet. There was no impact to the consolidated statements of operations, comprehensive loss or cash flows.
In May 2014, the FASB amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued an accounting standard update for a one-year deferral of the effective date, with an option of applying the standard on the original effective date, which for the Company is the first quarter of fiscal 2017. In accordance with this deferral, the Company is required to adopt these amendments no later than the first quarter of fiscal 2018. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is continuing to evaluate the impact of these amendments and the transition alternatives on its consolidated financial statements.
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Note 3: Cash and Cash equivalents and Short-term investments
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a. |
Cash and cash equivalents: |
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Cash |
|
$ |
75,421 |
|
|
$ |
47,614 |
|
Money market funds |
|
|
44,002 |
|
|
|
- |
|
U.S. treasury bills |
|
|
- |
|
|
|
9,999 |
|
Total cash and cash equivalents |
|
$ |
119,423 |
|
|
$ |
57,613 |
|
|
b. |
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 $150,001 and $44,999, as of December 31, 2015 and 2014, respectively and their estimated fair value as of December 31, 2015 and 2014 was $149,978 and $44,999, respectively.
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Note 4: Receivables and prepaid expenses
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Advances and receivables from suppliers |
|
$ |
7,323 |
|
|
$ |
4,262 |
|
Government authorities |
|
|
1,955 |
|
|
|
501 |
|
Prepaid expenses |
|
|
1,290 |
|
|
|
853 |
|
Others |
|
|
231 |
|
|
|
95 |
|
|
|
$ |
10,799 |
|
|
$ |
5,711 |
|
|
Note 5: Inventories
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Raw materials |
|
$ |
3,518 |
|
|
$ |
526 |
|
Work in process |
|
|
4,618 |
|
|
|
1,280 |
|
Finished goods |
|
|
5,458 |
|
|
|
1,640 |
|
|
|
$ |
13,594 |
|
|
$ |
3,446 |
|
|
Note 6: Property and equipment, net
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Cost: |
|
|
|
|
|
|
|
|
Computers and laboratory equipment |
|
$ |
6,734 |
|
|
$ |
3,745 |
|
Office furniture |
|
|
1,245 |
|
|
|
995 |
|
Production equipment |
|
|
857 |
|
|
|
- |
|
Leasehold improvements |
|
|
1,653 |
|
|
|
1,343 |
|
Total cost |
|
$ |
10,489 |
|
|
$ |
6,083 |
|
Accumulated depreciation and amortization |
|
|
(3,937 |
) |
|
|
(2,351 |
) |
Depreciated cost |
|
$ |
6,552 |
|
|
$ |
3,732 |
|
Depreciation expense was $1,348, $886 and $520 for the years ended December 31, 2015, 2014 and 2013, respectively.
In 2015, the Company implemented a new ERP system and capitalized costs incurred related to the system according to FASB ASC 350-40, "Accounting for the costs of Computer Software Developed or Obtained for Internal Use". As of December 31, 2015, the Company capitalized an accumulated amount of $2,803. Amortization for the year ended December 31, 2015 was $250.
|
Note 7: Field equipment, net
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Field equipment |
|
$ |
9,226 |
|
|
$ |
3,942 |
|
Less: accumulated depreciation |
|
|
(3,197 |
) |
|
|
(1,925 |
) |
Field equipment, net |
|
$ |
6,029 |
|
|
$ |
2,017 |
|
Depreciation expense was $1,555, $1,076 and 696 for the years ended December 31, 2015, 2014 and 2013, respectively.
|
Note 8: Other payables and accrued expenses
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Employees and payroll accruals |
|
$ |
8,258 |
|
|
$ |
5,846 |
|
Taxes payable and others |
|
|
2,850 |
|
|
|
693 |
|
Provision for settlement |
|
|
- |
|
|
|
1,000 |
|
Other |
|
|
764 |
|
|
|
97 |
|
|
|
$ |
11,872 |
|
|
$ |
7,636 |
|
|
Note 9: Employee benefit obligations
The Company sponsors a defined benefit plan (the “Swiss Plan”) for all its employees in Switzerland for retirement benefits, as well as benefits on death or long-term disability. The liability in respect of the Swiss Plan is the projected benefit obligation calculated using the projected unit credit method. The projected benefit obligation as of December 31, 2015 represents the actuarial present value of the estimated future payments required to settle the obligation that is attributable to employee service rendered before that date. Swiss Plan assets are recorded at fair value. Pension expense is presented in the payroll expenses in the various functions in which the employees are engaged. Actuarial gains and losses arising from differences between the actual and the expected return on the Swiss Plan assets are recognized in accumulated other comprehensive income (loss) and amortized over the requisite service period. The plan is part of a collective pension foundation run by an insurance company. The Company and the employees pay retirement contributions, which are defined as a percentage of the employees’ covered salaries. The foundation, in turn, has all its risks (disability, death, longevity) and future benefits managed and guaranteed by the insurance company. Interest is credited to the employees’ account at the minimum rate provided in the Swiss Plan, payment which is guaranteed by the insurance contract, which represents the Swiss Plan’s primary asset. The targeted allocation for these funds is as follows:
Asset Allocation by Category as of December 31, 2015: |
|
|
|
|
Asset Category: |
|
Asset allocation (%) |
|
|
Debt Securities |
|
|
75 |
|
Real Estate |
|
|
16 |
|
Equity Securities |
|
|
3 |
|
Others |
|
|
6 |
|
Total |
|
|
100 |
|
The following table sets forth the Swiss Plan’s funded status and amounts recognized in the consolidated financial statements for the year ended December 31, 2015:
|
|
December 31, |
|
|
|
|
2015 |
|
|
Change in Benefit Obligation |
|
|
|
|
Projected benefit obligation at beginning of year |
|
$ |
- |
|
Interest cost |
|
|
47 |
|
Company service cost |
|
|
312 |
|
Employee contributions |
|
|
189 |
|
Prior service cost |
|
|
158 |
|
Benefits paid |
|
|
4,023 |
|
Actuarial loss |
|
|
1,494 |
|
Projected benefit obligation at end of year |
|
$ |
6,223 |
|
Change in Plan Assets |
|
|
|
|
Fair value of plan assets at beginning of year |
|
$ |
- |
|
Actual return on plan assets |
|
|
(63 |
) |
Employer contributions |
|
|
284 |
|
Employee contributions |
|
|
189 |
|
Benefits paid |
|
|
4,023 |
|
Fair value of plan assets at end of year |
|
$ |
4,433 |
|
|
|
|
|
|
Funded Status at End of year |
|
|
|
|
Excess of obligation over assets |
|
$ |
(1,790 |
) |
|
|
|
|
|
Change in Accrued Benefit Liability |
|
|
|
|
Accrued benefit asset/(liability) at beginning of year |
|
$ |
- |
|
Company contributions made during year |
|
|
284 |
|
Net periodic benefit cost for year |
|
|
(404 |
) |
Net decrease in accumulated other comprehensive loss |
|
|
(1,670 |
) |
Accrued benefit liability at end of year |
|
$ |
(1,790 |
) |
|
|
|
|
|
|
|
December 31, |
|
|
|
|
2015 |
|
|
Non - current plan assets |
|
$ |
4,433 |
|
Non - current liability |
|
|
6,223 |
|
Accrued benefit liability at end of year |
|
$ |
(1,790 |
) |
Projected Benefit Payments |
|
|
|
|
2016 |
|
$ |
8 |
|
2017 |
|
|
13 |
|
2018 |
|
|
19 |
|
2019 |
|
|
25 |
|
2020 |
|
|
32 |
|
2021 - 2024 |
|
$ |
264 |
|
The fair value of the plan assets is the estimated cash surrender value of the insurance contract at December 31, 2015. The level of inputs used to measure fair value was Level 2.
|
|
Year ended December 31, |
|
|
|
|
2015 |
|
|
Net Periodic Benefit Cost |
|
|
|
|
Service cost |
|
$ |
312 |
|
Interest cost |
|
|
47 |
|
Expected return on plan assets |
|
|
(38 |
) |
Amortization of prior service costs |
|
|
14 |
|
Amortization of transition obligation |
|
|
69 |
|
Total net periodic benefit cost |
|
$ |
404 |
|
|
|
|
|
|
Weighted average assumptions: |
|
|
|
|
Discount rate as of December 31 |
|
|
1.00% |
|
Expected long-term rate of return on assets |
|
|
1.00% |
|
Rate of compensation increase |
|
|
1.00% |
|
Mortality and disability assumptions (*) |
|
BVG 2010 GT |
|
(*) Mortality data used for actuarial calculation.
|
Note 10: Long-term loan, net of discount and issuance costs
In January 2013, the Company entered into a Credit Agreement (the “Credit Agreement”) with the lenders named therein (the “Lenders”) for a three-year term (the “Credit Facility”). Upon the closing of the Credit Agreement in January 2013, the Company withdrew the full $52,000 and issued the Lenders 975,644 warrants to purchase preferred H shares (converted to Ordinary shares as described in note 14a) at an exercise price of $18.77 per share. The Credit Facility accrued an 11% per year payment-in-kind interest charge, capitalized as additional principal quarterly, and a quarterly cash coupon of 3-month US$ LIBOR, subject to a LIBOR floor of 0.5% plus 1.5% per annum. The Company recorded the relative fair value of the warrants of $2,864 as shareholder’s equity and as a discount to the related loan outstanding. The total discount of $4,927 (including an original issue discount of $2,000) and additional deferred issuance costs of $500 in respect of the loan are amortized to interest expense over the three-year term using the effective interest method.
In December 2013, the Company repaid the entire outstanding Credit Facility of $58,000 of principal and accrued interest. Upon repayment of the Credit Facility, the discount and the deferred issuance costs were recorded immediately as interest expense. Financial expenses related to the Credit Facility for the year ended December 31, 2013 were $12,577.
In January 2015, the Company entered into a five-year term loan agreement (the “Loan Agreement”) with a lender to draw up to $100,000. In January 2015, the Company drew $25,000 from the lender. The Company may draw the remaining $75,000 at its option at any time through June 30, 2016. Interest on the outstanding loan is 10% annually, payable quarterly in arrears. In addition, there is a 1.5% funding fee payable on the amount drawn on the funding date, a 0.75% pay-down fee on all principal amount repayments to be paid on the date such payments of principal are made and a pre-payment fee of 3.0%, 2.0% or 1.0% if the Company prepays outstanding loan amounts prior to the first, second or third year, respectively, from the initial funding date. The entire outstanding principal loan is due on January 2020. The loan is secured by a first priority security interest in substantially all assets of the Company. The Loan Agreement sets forth certain affirmative and negative covenants with which the Company must comply on a quarterly basis commencing March 31, 2015 through the term of loan. As of December 31, 2015, the Company complies with its debt covenants.
The total discount of $491 and additional issuance costs of $1,739 are presented net of the loan and are amortized to interest expense over the five year term of the loan using the effective interest method.
|
Note 11: Other long-term liabilities
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Deferred rent liability |
|
$ |
785 |
|
|
$ |
590 |
|
Leasehold improvements financing and other (see a and b below) |
|
|
254 |
|
|
|
321 |
|
Unrecognized tax benefits (Note 13e) |
|
|
1,565 |
|
|
|
308 |
|
Provision for settlement (Note 14c) |
|
|
- |
|
|
|
867 |
|
Other |
|
|
131 |
|
|
|
- |
|
|
|
$ |
2,735 |
|
|
$ |
2,086 |
|
a. In July 2013, the Company entered into a loan agreement with the landlord of its facility in Switzerland whereby the landlord will offer a loan of up to CHF 400 for the purpose of financing leasehold improvements in the facility. As of December 31, 2015 and 2014, the Company received CHF 220 ($232) of this financing. The principal and interest is due in monthly payments from January 1, 2014 through December 31, 2018 and bears an annual interest of 5%.
b. In May 2013 and January 2014, the Company entered into an agreement with the landlord of one of its facilities in the U.S. and an agreement with a leasing company of $226 for the purpose of financing leasehold improvements in the facility and a lease of machinery, respectively. The loan and interest is due in monthly payments from June 1, 2013 through May 1, 2023 and bears an annual interest of 7%.
The above principal leasehold improvement financing repayments as of December 31, 2015 are as follows:
2016 |
|
$ |
63 |
|
2017 |
|
|
69 |
|
2018 |
|
|
73 |
|
2019 |
|
|
23 |
|
2020 |
|
|
24 |
|
Thereafter |
|
|
65 |
|
|
|
|
317 |
|
Less: current portion of long-term loans |
|
|
(63 |
) |
Long-term loans, net of current portion |
|
$ |
254 |
|
|
Note 12: Commitments and contingent liabilities
a. The facilities of the Company are leased under various operating lease agreements for periods ending no later than 2023. The Company also leases motor vehicles under various operating leases, which expire on various dates, the latest of which is in 2018.
Future minimum lease payments under non-cancelable operating leases as of December 31, 2015, are as follows:
2016 |
$ |
2,320 |
|
2017 |
|
2,171 |
|
2018 |
|
1,152 |
|
2019 |
|
987 |
|
2020 |
|
591 |
|
Thereafter |
|
1,261 |
|
|
$ |
8,482 |
|
Lease and rental expense for the years ended December 31, 2015, 2014 and 2013 was $2,194, $1,794, and $1,356, respectively.
As of December 31, 2015 and 2014 the Company pledged bank deposits of $133 and $130, respectively, to cover bank guarantees in respect of its leases of operating facilities and obtained guarantees by the bank for the fulfillment of the Company’s lease commitments of $283 and $281, respectively.
b. For an additional commitment, see note 14c.
|
Note 13: Income taxes
a. The provision (benefit) for income taxes is comprised of:
Loss before income taxes:
|
|
Year ended December 31, |
|
|||||||||
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|||
United States (U.S.) |
|
$ |
(55,087 |
) |
|
$ |
(22,015 |
) |
|
$ |
(15,698 |
) |
Non-U.S. |
|
|
(52,060 |
) |
|
|
(58,285 |
) |
|
|
(61,319 |
) |
|
|
$ |
(107,147 |
) |
|
$ |
(80,300 |
) |
|
$ |
(77,017 |
) |
Income tax expense (benefit):
|
|
Year ended December 31, |
|
|||||||||
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
891 |
|
|
$ |
65 |
|
|
$ |
(18 |
) |
Non-U.S. |
|
|
3,678 |
|
|
|
324 |
|
|
|
308 |
|
Total current |
|
|
4,569 |
|
|
|
389 |
|
|
|
290 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-U.S. |
|
|
(135 |
) |
|
|
(7 |
) |
|
|
63 |
|
Total deferred |
|
$ |
(135 |
) |
|
$ |
(7 |
) |
|
$ |
63 |
|
|
|
$ |
4,434 |
|
|
$ |
382 |
|
|
$ |
353 |
|
b. The Company is a resident taxpayer in Jersey and as such is not generally subject to Jersey tax on remitted foreign earnings. Therefore, the Company has chosen to present the note below using the notional U.S. federal income tax rate of 35% when presenting the Company's reconciliation of the income tax provision. A reconciliation of the provision for income taxes compared with the amounts at the notional federal statutory rate was:
|
|
Year ended December 31, |
|
|||||||||
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|||
Loss before income taxes |
|
$ |
(107,147 |
) |
|
$ |
(80,300 |
) |
|
$ |
(77,017 |
) |
Statutory tax rate |
|
|
35 |
% |
|
|
35 |
% |
|
|
35 |
% |
Notional U.S. federal income taxes at statutory rate |
|
$ |
(37,501 |
) |
|
$ |
(28,105 |
) |
|
$ |
(26,956 |
) |
Non-deductible expenses |
|
|
2,621 |
|
|
|
1,242 |
|
|
|
1,411 |
|
Foreign tax rate differential |
|
|
18,573 |
|
|
|
20,261 |
|
|
|
20,965 |
|
Change in valuation allowance |
|
|
19,550 |
|
|
|
7,226 |
|
|
|
4,727 |
|
Unrecognized tax expense (benefit) |
|
|
1,257 |
|
|
|
(242 |
) |
|
|
206 |
|
Other |
|
|
(66 |
) |
|
|
- |
|
|
|
- |
|
Income tax expenses |
|
$ |
4,434 |
|
|
$ |
382 |
|
|
$ |
353 |
|
Effective tax rate |
|
|
-4.14 |
% |
|
|
-0.48 |
% |
|
|
-0.46 |
% |
The Company's tax rate is affected by the tax rates in the jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction, jurisdictions with a statutory tax rate less than the U.S. tax rate of 35% and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance.
c. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
|
|
Allowance for doubtful accounts |
|
$ |
11,504 |
|
|
$ |
4,001 |
|
Revenue recognition (timing differences) |
|
|
21,972 |
|
|
|
9,042 |
|
Net operating loss carryforwards |
|
347 |
|
|
850 |
|
||
Other temporary differences |
|
952 |
|
|
482 |
|
||
Total gross deferred tax assets |
|
$ |
34,775 |
|
|
$ |
14,375 |
|
Less: valuation allowance |
|
|
(33,476 |
) |
|
|
(13,926 |
) |
Total deferred tax assets |
|
$ |
1,299 |
|
|
$ |
449 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
|
Fixed assets |
|
|
1,008 |
|
|
|
442 |
|
Total gross deferred tax liabilities |
|
$ |
1,008 |
|
|
$ |
442 |
|
Net deferred tax assets |
|
$ |
291 |
|
|
$ |
7 |
|
d. Carryforward loss:
As of December 31, 2015, the Company's Luxembourg subsidiary has $1.2 million of net operating loss carry forwards (NOLs) available for utilization in future years.
e. Accounting for uncertainty in income taxes (“ASC 740”):
A reconciliation of the beginning and ending balances of uncertain tax benefits is as follows:
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Balance at beginning of the year |
|
$ |
308 |
|
|
$ |
549 |
|
Additions for tax positions related current year |
|
|
848 |
|
|
|
79 |
|
Additions for tax positions related to prior years |
|
|
409 |
|
|
|
- |
|
Reduction related to lapse of applicable statute of limitations |
|
|
- |
|
|
|
(320 |
) |
Balance at the end of the year |
|
$ |
1,565 |
|
|
$ |
308 |
|
The Company recognizes interest and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2015, 2014 and 2013, the Company accrued $26, $2 and $20, respectively, for interest and penalties expenses related to uncertain tax positions.
f. The Company's Israeli subsidiary is currently under an income tax audit for the tax years 2011 through 2013. There are no other ongoing income tax audits.
|
Note 15: Financial expenses, net
|
|
Year ended December 31, |
|
|||||||||
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|||
Financial expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
$ |
(2,373 |
) |
|
$ |
(41 |
) |
|
$ |
(7,158 |
) |
Amortization of credit facility costs |
|
|
(329 |
) |
|
|
- |
|
|
|
(5,432 |
) |
Foreign currency transaction losses |
|
|
(356 |
) |
|
|
(104 |
) |
|
|
(157 |
) |
Others |
|
|
(177 |
) |
|
|
(142 |
) |
|
|
(78 |
) |
|
|
$ |
(3,235 |
) |
|
$ |
(287 |
) |
|
$ |
(12,825 |
) |
Financial income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
84 |
|
|
$ |
143 |
|
|
$ |
267 |
|
Total financial expenses, net |
|
$ |
(3,151 |
) |
|
$ |
(144 |
) |
|
$ |
(12,558 |
) |
|
Note 17: Subcontractor
The Company is dependent upon sole source suppliers for certain key components used in its delivery systems. The Company’s management believes that in most cases other suppliers could provide similar components at comparable terms. A change of suppliers which requires FDA or other regulatory approval, however, could cause a material delay in manufacturing and a possible loss of sales, which could adversely affect the Company’s operating results and financial position.
|
Note 18: Supplemental information
The following table presents long-lived assets by location:
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
United States |
|
|
6,600 |
|
|
|
3,468 |
|
Switzerland |
|
|
4,204 |
|
|
|
1,259 |
|
Israel |
|
$ |
1,376 |
|
|
$ |
1,009 |
|
Others |
|
|
401 |
|
|
|
13 |
|
|
|
$ |
12,581 |
|
|
$ |
5,749 |
|
The Company’s net revenues by geographic region, based on the patient’s location are summarized as follows:
|
|
Year ended December 31, |
|
|||||||||
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|||
United States |
|
|
30,961 |
|
|
|
14,951 |
|
|
|
10,330 |
|
Europe, Israel and Japan |
|
|
2,126 |
|
|
$ |
539 |
|
|
$ |
29 |
|
|
|
$ |
33,087 |
|
|
$ |
15,490 |
|
|
$ |
10,359 |
|
|
a. Use of estimates:
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, deferred taxes, tax liabilities, useful-life of field equipment and share-based compensation costs. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of net revenue and expenses during the reporting period. Actual results could differ from those estimates.
b. Financial statements in U.S. dollars:
The accompanying financial statements have been prepared in U.S. dollars in thousands.
The Company finances its operations in U.S. dollars and a substantial portion of its costs and revenues from its primary markets is incurred in U.S. dollars. As such, the Company’s management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, the functional and reporting currency of the Company is the U.S. dollar.
Transactions and balances denominated in U.S. dollars are presented at their original amounts. Monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with Accounting Standards Codification No. 830-10, “Foreign Currency Matters.” All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the consolidated statements of operations as financial income or expenses, as appropriate.
c. Principles of consolidation:
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances, including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.
d. Cash equivalents:
Cash equivalents are short-term, highly liquid investments that are readily convertible into cash with an original maturity of three months or less at the date acquired.
e. Short-term investments and restricted cash:
1. Short-term investments:
The Company accounts for investments in debt securities in accordance with ASC 320, “Investments-Debt and Equity Securities.” Management determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such determinations at each balance sheet date. For the years ended December 31, 2015 and 2014, all securities are classified as held-to-maturity since the Company has the intent and ability to hold the securities to maturity and, accordingly, debt securities are stated at amortized cost.
The amortized cost of held-to-maturity securities is adjusted for amortization of premiums and accretion of discounts to maturity and any other than temporary impairment losses. Such amortization and interest are included in the consolidated statement of operations as financial income or expenses, as appropriate.
For the three years ended December 31, 2015, no impairment losses other than temporary impairment losses have been identified.
2. Restricted cash:
The Company has restricted cash used as security for bank guarantees related to the use of Company credit cards.
f. Inventories:
Inventories are stated at the lower of cost or market. Cost is determined using the weighted average method. The Company regularly evaluates the ability to realize the value of inventory. If actual demand for the Company’s delivery systems deteriorates, or market conditions are less favorable than those projected, inventory write-offs may be required.
There were no inventory write-offs for the years ended December 31, 2015, 2014 and 2013.
g. Property and equipment:
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates:
|
|
% |
Computers and laboratory equipment |
|
15 - 33 |
Office furniture |
|
6 - 33 |
Production equipment |
|
20 |
Leasehold improvements |
|
Over the shorter of the term of the lease or its useful life |
i. Impairment of long-lived assets:
The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360-10, “Property, Plant and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. During the three years ended December 31, 2015, no impairment losses have been identified.
j. Other long-term assets:
Long term lease deposits in respect of office rent and vehicles under operating leases and restricted deposits are presented in other long-term assets.
k. Revenue recognition:
The TTFields delivery system (“System”) for GBM, Optune, is comprised of two main components: (1) an Electric Field Generator (the “device”) and (2) Transducer Arrays and related accessories that are disposable supplies to the device (“disposables”). Title is retained by the Company for the device and the patient is provided replacement disposables and technical support for the device during the rental period. The device and disposables are always supplied and functioning together and are not sold on a standalone basis.
Revenues are recognized when persuasive evidence of an arrangement exists, delivery of the system has occurred, the price is fixed or determinable and collectability is reasonably assured. The evidence of an arrangement generally consists of a prescription, a patient service agreement and the verification of eligibility and insurance with the patient’s third-party insurance company (“payer”). The Company generally bills third-party payers a monthly fee for use of the System by patients. As such, the Company takes assignment of benefits and risk of collection from the third-party payer. Patients have out-of-pocket costs for the amount not covered by their payer and the Company bills the patient directly for the amounts of their co-pays and deductible, subject to the Company’s patient assistance programs.
For the reported periods, all revenues are recognized when cash is collected assuming that all other revenue recognition criteria have been met, as the price is not fixed or determinable and the collectability cannot be reasonably assured. The price is not fixed or determinable since the Company does not have sufficient history with payers to reliably estimate their individual payment patterns and as such cannot reliably estimate the amount that would be ultimately collected. Once sufficient history is established and the Company can reliably estimate the amounts that would be ultimately collected per payer/payer group and the above criteria are met, the Company will recognize revenues from the use of the System on an accrual basis ratably over the lease term.
Revenues are presented net of indirect taxes, which include excise tax of $1,457 , $1,010, and $584 for the years ended December 31, 2015, 2014 and 2013, respectively, and other indirect tax of $818, $266 and $300 for the years ended December 31, 2015, 2014 and 2013, respectively.
l. Charitable care:
The Company provides Optune to patients who meet certain criteria under its charitable care policy without charge. Because the Company does not pursue collection of amounts determined to qualify as charity, they are not reported as revenue. The Company's costs of care provided under charitable care were: $1,376, $836 and $254 for the years ended December 31, 2015, 2014 and 2013, respectively. These estimates were determined by applying a ratio of costs to gross charges multiplied by the Company's gross charitable care charges.
m. Research, development and clinical trials:
Research, development and clinical trials, including direct and allocated expenses are expensed as incurred.
n. Shipping and handling costs:
The Company does not bill its customers for shipping and handling costs associated with shipping its delivery systems to its customers. These direct shipping and handling costs of $1,385, $553 and $431 for the years ended December 31, 2015, 2014 and 2013, respectively are included in selling and marketing costs.
o. Accounting for share-based payments:
The Company accounts for share-based compensation in accordance with ASC 718, “Compensation—Stock Compensation.” ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations.
The Company recognizes compensation costs net of a forfeiture rate only for those shares expected to vest using the accelerated method over the requisite service period of the award, which is generally the option vesting term of four years. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
The Company selected the Black-Scholes option-pricing model as the most appropriate fair value method for its option awards. The option-pricing model requires a number of assumptions, of which the most significant are the share price expected, expected volatility and the expected option term.
Prior to the IPO, the fair value of ordinary shares underlying the options was historically determined by management and the board of directors. Because there was no public market for the Company’s ordinary shares, the board of directors determined fair value of an ordinary share at the time of grant of the option by considering a number of objective and subjective factors including operating and financial performance, the lack of liquidity of share capital, general and industry specific economic outlook and valuations performed amongst other factors. For the period from January 1, 2015 through the IPO and for the two years ended December 31, 2014, the Company’s board of directors determined the fair value of ordinary shares for the reported periods, among other factors, based on valuations performed using the hybrid method, which is the hybrid between the probability weighted expected return method (PWERM) and the option pricing method, as the Company began to consider IPO activities commencing in January 2012.
The computation of expected volatility is based on actual historical share price volatility of comparable companies. Expected term of options granted is calculated using the average between the vesting period and the contractual term to the expected term of the options in effect at the time of grant. The Company has historically not paid dividends and has no foreseeable plans to pay dividends and, therefore, uses an expected dividend yield of zero in the option pricing model. The risk-free interest rate is based on the yield of U.S. treasury bonds with equivalent terms.
p. Fair value of financial instruments:
The carrying amounts of cash and cash equivalents, short-term investments, restricted cash, receivables and prepaid expenses, trade payables and other accounts payable and accrued expenses approximate their fair value due to the short-term maturity of such instruments. Based upon the borrowing terms and conditions currently available to the Company, the carrying values of the long-term loans approximate fair value.
The Company accounts for certain assets and liabilities at fair value under ASC 820, “Fair Value Measurements and Disclosures.” Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.
The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety.
The three levels of inputs that may be used to measure fair value are as follows:
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data; and
Level 3 - Unobservable inputs which are supported by little or no market activity.
The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of instrument, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the instrument are categorized as Level 3.
q. Basic and diluted net loss per share:
The Company applies the two class method as required by ASC 260-10, “Earnings Per Share.” ASC 260-10 requires the income or loss per share for each class of shares (ordinary and preferred shares) to be calculated assuming 100% of the Company’s earnings are distributed as dividends to each class of shares based on their contractual rights. No dividends were declared or paid during the reported periods.
According to the provisions of ASC 260-10, the Company’s preferred shares are not participating securities in losses and, therefore, are not included in the computation of net loss per share.
Basic and diluted net loss per share is computed based on the weighted average number of ordinary shares outstanding during each year. Diluted loss per share is computed based on the weighted average number of ordinary shares outstanding during the period, plus dilutive potential shares considered outstanding during the period, in accordance with ASC 260-10. Basic and diluted net loss per ordinary share was the same for each period presented as the inclusion of all potential ordinary shares (all preferred shares, options and warrants) outstanding was anti-dilutive.
r. Income taxes:
The Company accounts for income taxes in accordance with ASC 740-10, “Income Taxes.” ASC 740-10 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, to reduce deferred tax assets to their estimated realizable value, if needed.
The Company established reserves for uncertain tax positions based on the evaluation of whether or not the Company’s uncertain tax position is “more likely than not” to be sustained upon examination. The Company records interest and penalties pertaining to its uncertain tax positions in the financial statements as income tax expense.
s. Concentration of risks:
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, restricted cash and short-term investments.
Cash and cash equivalents and restricted cash are invested in major banks or financial institutions in Jersey, the United States, Israel, Luxemburg, Switzerland, Japan and Germany. Such investments may be in excess of insured limits and are not insured in other jurisdictions. Generally, these investments may be redeemed upon demand and, therefore, bear minimal risk.
The Company has no off-balance sheet concentrations of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.
In 2015, two payers represented $5,595 and $2,512 or 17% and 8% of net revenues, respectively. In 2014, the same two payers represented $2,372 and $2,014 or 15% and 12% of net revenues, respectively and in 2013, the same two payers represented $2,056 and $1,160 or 18% and 10% of net revenues, respectively.
t. Severance pay:
The majority of the Company’s employees in Israel have subscribed to Section 14 of Israel’s Severance Pay Law, 5723-1963 (“Section 14”). Pursuant to Section 14, the Company’s employees covered by this section are entitled to monthly deposits at a rate of 8.33% of their monthly salary, made on their behalf by the Company. Payments in accordance with Section 14 release the Company from any future severance liabilities in respect of those employees. Neither severance pay liability nor severance pay fund under Section 14 for such employees is recorded on the Company’s consolidated balance sheet.
With regard to employees in Israel that are not subject to Section 14, the Company’s liability for severance pay is calculated pursuant to Israeli Severance Pay Law, based on the most recent salary of the relevant employees multiplied by the number of years of employment as of the balance sheet date. These employees are entitled to one month’s salary for each year of employment or a portion thereof. The Company’s liability for these employees is fully provided for through monthly deposits to the employees’ pension and management insurance policies and an accrual. The value of these deposits is recorded as an asset on the Company’s consolidated balance sheet.
The carrying value of the deposited funds is based on the cash surrender value and includes profits accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to the Israeli Severance Pay Law. Severance pay expense for the years ended December 31, 2015, 2014 and 2013 amounted to $356, $307 and $288, respectively.
u. Retirement and pension plans:
The Company has a 401(k) retirement savings plan for its U.S. employees. Each eligible employee may elect to contribute a portion of the employee’s compensation to the plan. The Company does not make any matching contributions to the plan.
The Company has a defined benefit plan with a pension fund for its Swiss employees, whereby the employee and the Company contribute to the pension fund. The Company accounts for its obligation, in accordance with ASC 715, "Compensation – Retirement Benefits" (see note 9).
The pension expense for the years ended December 31, 2015, 2014 and, 2013 was $404, $205 and $70, respectively.
v. Contingent liabilities:
The Company accounts for its contingent liabilities in accordance with ASC 450, “Contingencies.” A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. As of December 31, 2015 and 2014, the Company was not a party to any ligation that could have a material adverse effect on the Company’s business, financial position, results of operations or cash flows.
w. Other comprehensive loss:
The Company accounts for comprehensive loss in accordance with ASC 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive loss and its components. Comprehensive loss generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The accumulated other comprehensive loss, net of taxes, at December 31, 2015 relates to a pension liability.
x. Recently issued accounting pronouncements:
In November 2015, the Financial Accounting Standards Board ("FASB") issued an accounting standards update for income taxes, which requires deferred tax assets and liabilities to be classified as noncurrent on the consolidated balance sheets. The new accounting guidance is effective for annual reporting periods beginning after December 15, 2016 and interim periods therein. Early adoption is permitted for all entities as of the beginning of interim or annual reporting periods. The Company early adopted the new guidance for the year ended December 31, 2015 and has applied the amendment on a prospective basis.
In April 2015, the FASB amended the existing accounting standards for imputation of interest. The amendments require that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by these amendments. The Company is required to adopt the guidance in the first quarter of fiscal 2017. Early adoption is permitted. The amendments should be applied retrospectively with the adjusted balance sheet of each individual period presented, in order to reflect the period-specific effects of applying the new guidance. The Company early adopted the new guidance for the year ended December 31, 2015.The adoption of this standard resulted in a reclassification of the debt issuance costs of $1.4 million for the year ended December 31, 2015, from Other long-term assets to Long-term loan, net of discount and issuance costs on the consolidated balance sheet. There was no impact to the consolidated statements of operations, comprehensive loss or cash flows.
In May 2014, the FASB amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued an accounting standard update for a one-year deferral of the effective date, with an option of applying the standard on the original effective date, which for the Company is the first quarter of fiscal 2017. In accordance with this deferral, the Company is required to adopt these amendments no later than the first quarter of fiscal 2018. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is continuing to evaluate the impact of these amendments and the transition alternatives on its consolidated financial statements.
h. Field equipment under operating leases:
Field equipment is stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the field equipment which was determined to be two years. Field equipment consists of equipment being utilized under rental agreements accounted for in accordance with ASC 840 on a monthly basis as an operating lease, as well as “service pool” equipment. Service pool equipment is equipment owned and maintained by the Company that is swapped for equipment that needs repairs or maintenance by the Company while being rented by a patient. The Company records a provision for any excess, lost or damaged equipment when warranted based on an assessment of the equipment. Write-downs for equipment are included in cost of revenues. During the years ended December 31, 2015, 2014 and 2013, write downs for $36, $12 and $19, respectively, had been identified.
|
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates:
|
|
% |
Computers and laboratory equipment |
|
15 - 33 |
Office furniture |
|
6 - 33 |
Production equipment |
|
20 |
Leasehold improvements |
|
Over the shorter of the term of the lease or its useful life |
|
|
a. |
Cash and cash equivalents: |
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Cash |
|
$ |
75,421 |
|
|
$ |
47,614 |
|
Money market funds |
|
|
44,002 |
|
|
|
- |
|
U.S. treasury bills |
|
|
- |
|
|
|
9,999 |
|
Total cash and cash equivalents |
|
$ |
119,423 |
|
|
$ |
57,613 |
|
|
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Advances and receivables from suppliers |
|
$ |
7,323 |
|
|
$ |
4,262 |
|
Government authorities |
|
|
1,955 |
|
|
|
501 |
|
Prepaid expenses |
|
|
1,290 |
|
|
|
853 |
|
Others |
|
|
231 |
|
|
|
95 |
|
|
|
$ |
10,799 |
|
|
$ |
5,711 |
|
|
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Raw materials |
|
$ |
3,518 |
|
|
$ |
526 |
|
Work in process |
|
|
4,618 |
|
|
|
1,280 |
|
Finished goods |
|
|
5,458 |
|
|
|
1,640 |
|
|
|
$ |
13,594 |
|
|
$ |
3,446 |
|
|
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Cost: |
|
|
|
|
|
|
|
|
Computers and laboratory equipment |
|
$ |
6,734 |
|
|
$ |
3,745 |
|
Office furniture |
|
|
1,245 |
|
|
|
995 |
|
Production equipment |
|
|
857 |
|
|
|
- |
|
Leasehold improvements |
|
|
1,653 |
|
|
|
1,343 |
|
Total cost |
|
$ |
10,489 |
|
|
$ |
6,083 |
|
Accumulated depreciation and amortization |
|
|
(3,937 |
) |
|
|
(2,351 |
) |
Depreciated cost |
|
$ |
6,552 |
|
|
$ |
3,732 |
|
|
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Field equipment |
|
$ |
9,226 |
|
|
$ |
3,942 |
|
Less: accumulated depreciation |
|
|
(3,197 |
) |
|
|
(1,925 |
) |
Field equipment, net |
|
$ |
6,029 |
|
|
$ |
2,017 |
|
|
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Employees and payroll accruals |
|
$ |
8,258 |
|
|
$ |
5,846 |
|
Taxes payable and others |
|
|
2,850 |
|
|
|
693 |
|
Provision for settlement |
|
|
- |
|
|
|
1,000 |
|
Other |
|
|
764 |
|
|
|
97 |
|
|
|
$ |
11,872 |
|
|
$ |
7,636 |
|
|
The targeted allocation for these funds is as follows:
Asset Allocation by Category as of December 31, 2015: |
|
|
|
|
Asset Category: |
|
Asset allocation (%) |
|
|
Debt Securities |
|
|
75 |
|
Real Estate |
|
|
16 |
|
Equity Securities |
|
|
3 |
|
Others |
|
|
6 |
|
Total |
|
|
100 |
|
The following table sets forth the Swiss Plan’s funded status and amounts recognized in the consolidated financial statements for the year ended December 31, 2015:
|
|
December 31, |
|
|
|
|
2015 |
|
|
Change in Benefit Obligation |
|
|
|
|
Projected benefit obligation at beginning of year |
|
$ |
- |
|
Interest cost |
|
|
47 |
|
Company service cost |
|
|
312 |
|
Employee contributions |
|
|
189 |
|
Prior service cost |
|
|
158 |
|
Benefits paid |
|
|
4,023 |
|
Actuarial loss |
|
|
1,494 |
|
Projected benefit obligation at end of year |
|
$ |
6,223 |
|
Change in Plan Assets |
|
|
|
|
Fair value of plan assets at beginning of year |
|
$ |
- |
|
Actual return on plan assets |
|
|
(63 |
) |
Employer contributions |
|
|
284 |
|
Employee contributions |
|
|
189 |
|
Benefits paid |
|
|
4,023 |
|
Fair value of plan assets at end of year |
|
$ |
4,433 |
|
|
|
|
|
|
Funded Status at End of year |
|
|
|
|
Excess of obligation over assets |
|
$ |
(1,790 |
) |
|
|
|
|
|
Change in Accrued Benefit Liability |
|
|
|
|
Accrued benefit asset/(liability) at beginning of year |
|
$ |
- |
|
Company contributions made during year |
|
|
284 |
|
Net periodic benefit cost for year |
|
|
(404 |
) |
Net decrease in accumulated other comprehensive loss |
|
|
(1,670 |
) |
Accrued benefit liability at end of year |
|
$ |
(1,790 |
) |
|
|
|
|
|
|
|
December 31, |
|
|
|
|
2015 |
|
|
Non - current plan assets |
|
$ |
4,433 |
|
Non - current liability |
|
|
6,223 |
|
Accrued benefit liability at end of year |
|
$ |
(1,790 |
) |
Projected Benefit Payments |
|
|
|
|
2016 |
|
$ |
8 |
|
2017 |
|
|
13 |
|
2018 |
|
|
19 |
|
2019 |
|
|
25 |
|
2020 |
|
|
32 |
|
2021 - 2024 |
|
$ |
264 |
|
The fair value of the plan assets is the estimated cash surrender value of the insurance contract at December 31, 2015. The level of inputs used to measure fair value was Level 2.
|
|
Year ended December 31, |
|
|
|
|
2015 |
|
|
Net Periodic Benefit Cost |
|
|
|
|
Service cost |
|
$ |
312 |
|
Interest cost |
|
|
47 |
|
Expected return on plan assets |
|
|
(38 |
) |
Amortization of prior service costs |
|
|
14 |
|
Amortization of transition obligation |
|
|
69 |
|
Total net periodic benefit cost |
|
$ |
404 |
|
|
|
|
|
|
Weighted average assumptions: |
|
|
|
|
Discount rate as of December 31 |
|
|
1.00% |
|
Expected long-term rate of return on assets |
|
|
1.00% |
|
Rate of compensation increase |
|
|
1.00% |
|
Mortality and disability assumptions (*) |
|
BVG 2010 GT |
|
(*) Mortality data used for actuarial calculation.
|
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Deferred rent liability |
|
$ |
785 |
|
|
$ |
590 |
|
Leasehold improvements financing and other (see a and b below) |
|
|
254 |
|
|
|
321 |
|
Unrecognized tax benefits (Note 13e) |
|
|
1,565 |
|
|
|
308 |
|
Provision for settlement (Note 14c) |
|
|
- |
|
|
|
867 |
|
Other |
|
|
131 |
|
|
|
- |
|
|
|
$ |
2,735 |
|
|
$ |
2,086 |
|
The above principal leasehold improvement financing repayments as of December 31, 2015 are as follows:
2016 |
|
$ |
63 |
|
2017 |
|
|
69 |
|
2018 |
|
|
73 |
|
2019 |
|
|
23 |
|
2020 |
|
|
24 |
|
Thereafter |
|
|
65 |
|
|
|
|
317 |
|
Less: current portion of long-term loans |
|
|
(63 |
) |
Long-term loans, net of current portion |
|
$ |
254 |
|
|
Future minimum lease payments under non-cancelable operating leases as of December 31, 2015, are as follows:
2016 |
$ |
2,320 |
|
2017 |
|
2,171 |
|
2018 |
|
1,152 |
|
2019 |
|
987 |
|
2020 |
|
591 |
|
Thereafter |
|
1,261 |
|
|
$ |
8,482 |
|
|
a. The provision (benefit) for income taxes is comprised of:
Loss before income taxes:
|
|
Year ended December 31, |
|
|||||||||
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|||
United States (U.S.) |
|
$ |
(55,087 |
) |
|
$ |
(22,015 |
) |
|
$ |
(15,698 |
) |
Non-U.S. |
|
|
(52,060 |
) |
|
|
(58,285 |
) |
|
|
(61,319 |
) |
|
|
$ |
(107,147 |
) |
|
$ |
(80,300 |
) |
|
$ |
(77,017 |
) |
a. The provision (benefit) for income taxes is comprised of:
Income tax expense (benefit):
|
|
Year ended December 31, |
|
|||||||||
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
891 |
|
|
$ |
65 |
|
|
$ |
(18 |
) |
Non-U.S. |
|
|
3,678 |
|
|
|
324 |
|
|
|
308 |
|
Total current |
|
|
4,569 |
|
|
|
389 |
|
|
|
290 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-U.S. |
|
|
(135 |
) |
|
|
(7 |
) |
|
|
63 |
|
Total deferred |
|
$ |
(135 |
) |
|
$ |
(7 |
) |
|
$ |
63 |
|
|
|
$ |
4,434 |
|
|
$ |
382 |
|
|
$ |
353 |
|
A reconciliation of the provision for income taxes compared with the amounts at the notional federal statutory rate was:
|
|
Year ended December 31, |
|
|||||||||
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|||
Loss before income taxes |
|
$ |
(107,147 |
) |
|
$ |
(80,300 |
) |
|
$ |
(77,017 |
) |
Statutory tax rate |
|
|
35 |
% |
|
|
35 |
% |
|
|
35 |
% |
Notional U.S. federal income taxes at statutory rate |
|
$ |
(37,501 |
) |
|
$ |
(28,105 |
) |
|
$ |
(26,956 |
) |
Non-deductible expenses |
|
|
2,621 |
|
|
|
1,242 |
|
|
|
1,411 |
|
Foreign tax rate differential |
|
|
18,573 |
|
|
|
20,261 |
|
|
|
20,965 |
|
Change in valuation allowance |
|
|
19,550 |
|
|
|
7,226 |
|
|
|
4,727 |
|
Unrecognized tax expense (benefit) |
|
|
1,257 |
|
|
|
(242 |
) |
|
|
206 |
|
Other |
|
|
(66 |
) |
|
|
- |
|
|
|
- |
|
Income tax expenses |
|
$ |
4,434 |
|
|
$ |
382 |
|
|
$ |
353 |
|
Effective tax rate |
|
|
-4.14 |
% |
|
|
-0.48 |
% |
|
|
-0.46 |
% |
Significant components of the Company’s deferred tax assets and liabilities are as follows:
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
|
|
Allowance for doubtful accounts |
|
$ |
11,504 |
|
|
$ |
4,001 |
|
Revenue recognition (timing differences) |
|
|
21,972 |
|
|
|
9,042 |
|
Net operating loss carryforwards |
|
347 |
|
|
850 |
|
||
Other temporary differences |
|
952 |
|
|
482 |
|
||
Total gross deferred tax assets |
|
$ |
34,775 |
|
|
$ |
14,375 |
|
Less: valuation allowance |
|
|
(33,476 |
) |
|
|
(13,926 |
) |
Total deferred tax assets |
|
$ |
1,299 |
|
|
$ |
449 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
|
Fixed assets |
|
|
1,008 |
|
|
|
442 |
|
Total gross deferred tax liabilities |
|
$ |
1,008 |
|
|
$ |
442 |
|
Net deferred tax assets |
|
$ |
291 |
|
|
$ |
7 |
|
A reconciliation of the beginning and ending balances of uncertain tax benefits is as follows:
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Balance at beginning of the year |
|
$ |
308 |
|
|
$ |
549 |
|
Additions for tax positions related current year |
|
|
848 |
|
|
|
79 |
|
Additions for tax positions related to prior years |
|
|
409 |
|
|
|
- |
|
Reduction related to lapse of applicable statute of limitations |
|
|
- |
|
|
|
(320 |
) |
Balance at the end of the year |
|
$ |
1,565 |
|
|
$ |
308 |
|
|
|
|
Year ended December 31, |
|
|||||||||
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|||
Financial expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
$ |
(2,373 |
) |
|
$ |
(41 |
) |
|
$ |
(7,158 |
) |
Amortization of credit facility costs |
|
|
(329 |
) |
|
|
- |
|
|
|
(5,432 |
) |
Foreign currency transaction losses |
|
|
(356 |
) |
|
|
(104 |
) |
|
|
(157 |
) |
Others |
|
|
(177 |
) |
|
|
(142 |
) |
|
|
(78 |
) |
|
|
$ |
(3,235 |
) |
|
$ |
(287 |
) |
|
$ |
(12,825 |
) |
Financial income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
84 |
|
|
$ |
143 |
|
|
$ |
267 |
|
Total financial expenses, net |
|
$ |
(3,151 |
) |
|
$ |
(144 |
) |
|
$ |
(12,558 |
) |
|
The following table presents long-lived assets by location:
|
|
December 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
United States |
|
|
6,600 |
|
|
|
3,468 |
|
Switzerland |
|
|
4,204 |
|
|
|
1,259 |
|
Israel |
|
$ |
1,376 |
|
|
$ |
1,009 |
|
Others |
|
|
401 |
|
|
|
13 |
|
|
|
$ |
12,581 |
|
|
$ |
5,749 |
|
The Company’s net revenues by geographic region, based on the patient’s location are summarized as follows:
|
|
Year ended December 31, |
|
|||||||||
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|||
United States |
|
|
30,961 |
|
|
|
14,951 |
|
|
|
10,330 |
|
Europe, Israel and Japan |
|
|
2,126 |
|
|
$ |
539 |
|
|
$ |
29 |
|
|
|
$ |
33,087 |
|
|
$ |
15,490 |
|
|
$ |
10,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|