NOVOCURE LTD, 10-Q filed on 10/27/2015
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2015
Oct. 22, 2015
Document Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Sep. 30, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q3 
 
Trading Symbol
NVCR 
 
Entity Registrant Name
Novocure Ltd 
 
Entity Central Index Key
0001645113 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Non-accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
83,618,701 
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
CURRENT ASSETS:
 
 
Cash and cash equivalents
$ 110,324 
$ 57,613 
Short-term investments
26,999 
44,999 
Restricted cash
166 
61 
Receivables and prepaid expenses
10,164 
5,711 
Inventories
11,149 
3,446 
Total current assets
158,802 
111,830 
LONG-TERM ASSETS:
 
 
Property and equipment, net
6,106 
3,732 
Field equipment, net
4,516 
2,017 
Severance pay fund
75 
70 
Deferred IPO costs
2,577 
Other long-term assets
1,705 
227 
Total long-term assets
14,979 
6,046 
TOTAL ASSETS
173,781 
117,876 
CURRENT LIABILITIES:
 
 
Trade payables
15,235 
10,033 
Other payables and accrued expenses
10,680 
7,636 
Total current liabilities
25,915 
17,669 
LONG-TERM LIABILITIES:
 
 
Long-term loan, net of discount
24,554 
Accrued severance pay
248 
246 
Other long-term liabilities
1,840 
2,086 
Total long-term liabilities
26,642 
2,332 
TOTAL LIABILITIES
52,557 
20,001 
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
 
 
Ordinary shares—unlimited no par value shares authorized; Issued and outstanding: 12,432,293 shares and 13,431,414 shares at September 30, 2015 (unaudited), and December 31, 2014, respectively;
Preferred shares—unlimited no par value shares authorized; Issued and outstanding: 62,744,517 shares and 58,676,017 shares at September 30, 2015 (unaudited), and December 31, 2014, respectively;
Additional paid-in capital
476,377 
374,375 
Accumulated deficit
(355,153)
(276,500)
Total shareholders' equity
121,224 
97,875 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 173,781 
$ 117,876 
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Statement Of Financial Position [Abstract]
 
 
Common stock, no par value
   
   
Common stock, shares authorized
Unlimited 
Unlimited 
Common stock, shares issued
12,432,293 
13,431,414 
Common stock, shares outstanding
12,432,293 
13,431,414 
Preferred stock, no par value
   
   
Preferred stock, shares authorized
Unlimited 
Unlimited 
Preferred stock, shares issued
62,744,517 
58,676,017 
Preferred stock, shares outstanding
62,744,517 
58,676,017 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Income Statement [Abstract]
 
 
 
 
Net revenues
$ 8,953 
$ 4,374 
$ 20,704 
$ 11,689 
Cost of revenues
5,659 
2,586 
14,306 
7,406 
Gross profit
3,294 
1,788 
6,398 
4,283 
Operating costs and expenses:
 
 
 
 
Research, development and clinical trials
10,211 
9,276 
32,903 
29,191 
Sales and marketing
8,916 
5,384 
24,137 
16,439 
General and administrative
8,405 
5,033 
22,748 
15,800 
Total operating costs and expenses
27,532 
19,693 
79,788 
61,430 
Operating loss
(24,238)
(17,905)
(73,390)
(57,147)
Financial expenses, net
(809)
(53)
(2,277)
(91)
Loss before income tax expense
(25,047)
(17,958)
(75,667)
(57,238)
Income tax expense
976 
362 
2,986 
528 
Net loss
$ (26,023)
$ (18,320)
$ (78,653)
$ (57,766)
Basic and diluted net loss per Ordinary share
$ (2.09)
$ (1.45)
$ (6.21)
$ (4.67)
Weighted average number of Ordinary shares used in computing basic and diluted net loss per share
12,431,586 
12,594,483 
12,666,455 
12,377,832 
CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $)
In Thousands, except Share data
Total
USD ($)
Ordinary Shares
Preferred Shares
Additional Paid-in Capital
USD ($)
Accumulated Deficit
USD ($)
Balance at Dec. 31, 2013
$ 171,779 
 
 
$ 367,597 
$ (195,818)
Balance (in shares) at Dec. 31, 2013
 
11,891,421 
58,676,017 
 
 
Share-based compensation to employees
4,624 
 
 
4,624 
 
Exercise of options and warrants
2,154 
 
 
2,154 
 
Exercise of options and warrants (in shares)
 
1,539,993 
 
 
 
Net loss
(80,682)
 
 
 
(80,682)
Balance at Dec. 31, 2014
97,875 
 
 
374,375 
(276,500)
Balance (in shares) at Dec. 31, 2014
 
13,431,414 
58,676,017 
 
 
Share-based compensation to employees
7,372 
 
 
7,372 
 
Exercise of options and warrants
31 
 
 
31 
 
Exercise of options and warrants (in shares)
 
6,089 
 
 
 
Issuance of Series J preferred shares, net1
94,599 
 
 
94,599 
 
Issuance of Series J preferred shares, net (in shares)
 
 
4,068,500 
 
 
Issuance of shares and options in respect of settlement, net of fair value of shares provided as indemnification (in shares)
 
(1,005,210)
 
 
 
Net loss
(78,653)
 
 
 
(78,653)
Balance at Sep. 30, 2015
$ 121,224 
 
 
$ 476,377 
$ (355,153)
Balance (in shares) at Sep. 30, 2015
 
12,432,293 
62,744,517 
 
 
CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY(Parenthetical) (Series J Preferred Stock, USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Series J Preferred Stock
 
Share issuance expenses
$ 319 
CONDENSED INTERIM CONSOLIDATED CASH FLOWS (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash flows from operating activities:
 
 
Net loss
$ (78,653)
$ (57,766)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
Depreciation
2,005 
1,464 
Asset write-downs and impairment
42 
19 
Accrued interest expense
154 
Share-based compensation to employees
7,372 
3,354 
Amortization of discount (premium)
231 
(17)
Increase in receivables and prepaid expenses
(4,453)
(73)
Increase in inventories
(7,703)
(804)
Decrease in other long-term assets
79 
20 
Increase (decrease) in trade payables
4,597 
(3,395)
Increase in other payables and accrued expenses
2,892 
462 
Increase (decrease) in severance pay, net
(3)
49 
Increase (decrease) in other long-term liabilities
(323)
59 
Net cash used in operating activities
(73,763)
(56,628)
Cash flows from investing activities:
 
 
Purchase of property and equipment
(3,613)
(443)
Purchase of field equipment
(3,547)
(891)
Decrease (increase) in restricted cash
(105)
1,035 
Proceeds from maturity of short-term investments
77,000 
69,000 
Purchase of short-term investments
(58,992)
(107,981)
Net cash provided by (used in) investing activities
10,743 
(39,280)
Cash flows from financing activities:
 
 
Proceeds from issuance of preferred shares, net
94,599 
Proceeds from issuance of long-term loan, net
22,886 
Proceeds from issuance of other long-term loans
54 
Repayment of other long-term loan
(47)
(64)
Deferred IPO costs
(1,733)
Purchase of shares
(5)
Exercise of options and warrants
31 
Net cash provided by (used in) financing activities
115,731 
(9)
Increase (decrease) in cash and cash equivalents
52,711 
(95,917)
Cash and cash equivalents at the beginning of the period
57,613 
175,894 
Cash and cash equivalents at the end of the period
110,324 
79,977 
Cash paid during the period for:
 
 
Interest
1,683 
21 
Income taxes, net
823 
230 
Non-cash financing activities:
 
 
Deferred IPO costs
$ 844 
$ 0 
General
General

NOTE 1:- GENERAL

NovoCure Limited (including its consolidated subsidiaries, the “Company”) was incorporated in Jersey (Channel Islands) 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 for Optune, its first approved delivery system, in the United States at the end of 2011, and began commercial launch in Europe during 2014 and in Japan during the second half of 2015.

NovoCure Limited wholly owns the following subsidiaries: Novocure Luxembourg Sarl (“Novocure Luxembourg”) and Novocure (Israel) Ltd. (“Ltd.”). Novocure Luxembourg wholly owns Novocure GmbH, NovoCure Limited’s Swiss subsidiary (“Novocure Switzerland”) and Novocure GmbH, the German subsidiary of NovoCure Limited (“Novocure Germany”). Novocure Switzerland wholly owns Novocure Inc. (“Inc.”), the U.S. subsidiary, and  Novocure KK, the Japanese subsidiary. Inc. wholly owns Novocure (USA) LLC.

The Company’s research and development activity is conducted by Ltd. and clinical trials are managed on behalf of the Company mainly by Ltd., Novocure Switzerland and Inc. Novocure KK markets TTFields and will conduct clinical trials in Japan. Inc. is marketing and selling TTFields in the United States Novocure Switzerland manages the global supply chain operations for the Company, manages clinical trials conducted outside the United States and Japan and manages the marketing of TTFields in Europe. Novocure Germany supports and markets TTFields in Germany.

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”).  Following this approval, each ordinary and preferred share, nominal value £0.01 per share, was divided into 5.913 shares of such applicable class of shares of the Company, each with no par value per share. The Split Ratio to the Company’s outstanding options and warrants, in accordance with their terms. All 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.

Significant Accounting Policies
Significant Accounting Policies

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies applied in the audited annual consolidated financial statements of the Company are applied consistently in these unaudited interim financial statements

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. As of September 30, 2015, 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 nine-months period ended September 30, 2014 and 2015 (unaudited), no other than temporary impairment losses have been identified.

2. The Company has restricted cash as of September 30, 2015 of $166 (unaudited) used as security to cover bank guarantees in respect of use of Company credit cards in the Swiss operations.

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 nine-month periods ended September 30, 2014 and 2015 (unaudited).

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

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 nine-month periods ended September 30, 2014 and 2015 (unaudited) $12 and $32, respectively, write-downs 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 nine-month periods ended September 30, 2014 and 2015 (unaudited), no impairment losses have been identified.

j. Long-term lease deposits:

Long-term lease deposits in respect of office rent and vehicles under operating leases are presented in other long-term assets.

h. 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 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 $752 and $1,446 for the nine months ended September 30, 2014 and 2015 (unaudited), respectively and sales tax of $206 and $424 for the nine months ended September 30, 2014 and 2015 (unaudited), respectively.

i. Research, development and clinical trials:

Research, development and clinical trials, including direct and allocated expenses are expensed as incurred.

j. 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 shipping and handling costs of $405 and $891 for the nine-month period ended September 30, 2014 and 2015 (unaudited), respectively, are included in selling and marketing costs.

k. 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.

The fair value of ordinary shares underlying the options has historically been determined by management and the board of directors. Because there has been no public market for the Company’s ordinary shares, the board of directors has 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. The fair value of the underlying ordinary shares will be determined by the board of directors until such time as the Company’s ordinary shares are listed on an established share exchange or national market system. 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 initial public offering (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.

l. 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.

m. 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.

n. 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 reverse. The Company provides a valuation allowance, to reduce deferred tax assets to their estimated realizable value, if needed.

ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing a minimum recognition threshold for a tax position taken or expected to be taken in a tax return that is required to be met before being recognized in the financial statements. ASC 740 also provides guidance on measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition.

o. 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 (Channel Islands), 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 the nine month period ended September 30, 2015, one payer represented $3,951 or 18% of net revenues, respectively. In the nine month period ended September 30, 2014, the same payer represented $1,890 or 15% of revenues, respectively.

p. Retirement plans and severance pay:

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 an occupational benefit plan with a private pension fund for its Swiss employees, whereby the employee and the Company contribute to the pension fund.

The pension expense for the nine months periods ended September 30, 2014 and 2015 (unaudited) was $155 and $218, respectively.

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, Ltd.’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 nine months periods ended September 30, 2014 and 2015 amounted to $239 and $218, respectively.

q. 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 September 30, 2015, the Company was not a party to any litigation that could have a material adverse effect on the Company’s business, financial position, results of operations or cash flows.

Recently Issued Accounting Pronouncement

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, an updated standard on revenue recognition. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and US GAAP. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements. ASU 2014-09 was initially effective for annual and interim reporting periods beginning after December 15, 2016 and may be adopted either on a full retrospective or modified retrospective approach. On July 9, 2015, the FASB approved a one - year deferral of the effective date of the ASU. The revised effective date is for annual reporting periods beginning after December 15, 2017 and interim periods therein, with early adoption permitted as of the original effective date. The Company is evaluating the impact of implementation of this standard on its consolidated financial statements.

Unaudited Interim Consolidated Financial Statements
Unaudited Interim Consolidated Financial Statements

NOTE 3:- UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries, intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto for the fiscal year ended December 31, 2014, included in the Company’s Prospectus filed pursuant to Rule 424(b)(1) of the Securities Act on October 2, 2015 with the SEC.

Short Term Investments
Short Term Investments

NOTE 4:- SHORT TERM INVESTMENTS

The Company invests in marketable US 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 and their estimated fair value as of December 31, 2014 was $44,999.As of September 30, 2015 (unaudited), the amortized cost of the T-bills was $26,999 and the estimated fair value was $27,002.

Inventories
Inventories

NOTE 5:- INVENTORIES (in thousands)

 

 

 

September 30,

 

 

December 31,

 

 

 

2015

 

 

2014

 

 

 

Unaudited

 

 

Audited

 

Raw materials

 

$

3,095

 

 

$

526

 

Work in progress

 

 

3,154

 

 

 

1,280

 

Finished products

 

 

4,900

 

 

 

1,640

 

Total

 

$

11,149

 

 

$

3,446

 

 

Long - Term Loan, Net of Discount
Long - Term Loan, Net of Discount

NOTE 6:- LONG - TERM LOAN, NET OF DISCOUNT

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 10.0% 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 September 30, 2015, the Company was in compliance with its debt covenants.

The total discount of $491 presented net of the loan and additional deferred issuance costs of approximately $1,739 in respect of the loan (presented in other long-term assets in the balance sheet) are amortized to interest expense over the five year term of the loan using the effective interest method.

Commitments and Contingent Liabilities
Commitments and Contingent Liabilities

NOTE 7:- COMMITMENTS AND CONTINGENT LIABILITIES

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 2017.

As of December 31, 2014 and September 30, 2015 (unaudited), the Company pledged bank deposits of $130 and $133 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 $281 and $283, respectively.

 

Share Capital
Share Capital

NOTE 8:- SHARE CAPITAL

Series J Preferred shares investment round

In June 2015, the Company issued 4,068,500 Series J convertible preferred shares at $23.33 per share to certain investors for a total consideration of $94,599 (net of issuance expenses of $319). The Series J preferred shares are senior to the other series of preferred shares on payment of the liquidation preference (equal to $23.33 per share), but otherwise have similar participating preferred rights, dividend rights and voting rights of the other series of preferred shares.

Settlement agreement

In February 2015, the Company entered into a settlement agreement (the “Agreement”) with a third party with respect to a resolution of certain potential disputes regarding intellectual property developed by the Company’s founder and historically assigned to the Company. In exchange for a release of potential disputes from the third party, the Company paid $1,000. on execution of the Agreement and will pay an additional $1,000. (“Additional Payment”) at the earliest of (i) 18 months after signing of the Agreement, (ii) an initial public offering (“IPO”) and (iii) the earlier of consummation of a merger/acquisition (“M&A”) or achievement of a Cumulative Net Sales milestone of $250,000. (as defined pursuant to the Agreement), The Additional Payment was paid in October 2015from the proceeds of the Company’s IPO . The Company will pay an additional $5,500 on the earlier of (i) achievement of the Cumulative Net Sales milestone per above and (ii) consummation of an M&A. In addition, the Company agreed to issue 1,005,210 ordinary shares (the “Issued Shares”) to the third party and grant options to the third party to purchase 1,005,210 ordinary shares (the “Granted Options”) that are fully vested and at no cost.  The options terminate at the earlier of (i) 12 months subsequent to the IPO and (ii) immediately prior to an M&A.

In February 2015, the Company contemporaneously entered into a Letter of Agreement (“Letter of Agreement”) with the founder mentioned above and a related party (together, the “Founder”). Pursuant to the Letter of Agreement, in furtherance to a previous indemnification provided by the Founder in 2009, in connection with the intellectual property he assigned to the Company and the Agreement signed above, the Founder agreed to indemnify the Company for the compensation incurred to the third party by providing 2,010,420 ordinary shares which were redeemed and cancelled (the “Redeemed Shares”) in March 2015 to the Company at $5, and may be obligated to pay an additional $2,000. in cash to the Company  upon its request out of the net proceeds from the sale of any ordinary shares by the Founder in a private transaction or - following the consummation of the IPO in an open market transaction if the closing price of the ordinary shares is at least 80% of the price per share for which the ordinary shares were sold in the IPO (after deducting underwriting discounts and commissions and offering expenses). In March 2015, the Company issued the Issued Shares and Granted Options to the third party.

Accordingly, for the year ended December 31, 2014, the Company recorded a provision for a net settlement expense of $1,867. in general and administrative expense, in accordance with ASC 450 reflecting the present value of the cash obligation of $2,000. and the fair value of the Issued Shares and Granted Options to the third party, net of the fair value of the consideration provided by the Founder (Redeemed Shares), which amounted to nil as presented in the statement of shareholder’s equity, in connection with the indemnification provided and the Letter of Agreement.

Share Options
Share Options

NOTE 9:- SHARE OPTIONS

In 2003, the Company and its shareholders approved and adopted the 2003 Share Option Plan (the “2003 Plan”), which provided for the grant of options to the Company’s officers, directors, employees and advisors. The options granted generally have a four-year vesting period and expire ten years after the date of grant Since March 2013, when the 2003 Plan expired, the Company has made grants pursuant to the 2013 Share Option Plan (as described below) and, following completion of the IPO in October 2015, all future equity grants will be made under the 2015 Omnibus Incentive Plan (as described below). However, any awards granted under the 2003 Plan that are outstanding as of the IPO will continue to be subject to the terms and conditions of the 2003 Plan and the applicable option award agreement.

In 2013, the Company and its shareholders approved and adopted our 2013 Share Option Plan (the “2013 Plan”) , which provided for the grant of options to the Company’s officers, directors, employees and advisors. In February and March 2015, the Company’s board of directors and its shareholders approved an increase in the number of ordinary shares reserved for grant of options pursuant to the 2013 Plan by 2,956,500 ordinary shares to 13,198,224 ordinary shares. The options granted generally have a four-year vesting period and expire ten years after the date of grant.   Following completion of the IPO, no further awards will be granted under the 2013 Plan and instead, future equity grants will be made under the 2015 Omnibus Incentive Plan, but awards granted under the 2013 Plan that are outstanding as of the IPO shall continue to be subject to the terms and conditions of the 2013 Plan.

NOTE 9:- SHARE OPTIONS (Cont.)

In August 2015, the Company’s board of directors adopted and established the 2015 Omnibus Incentive Plan (the “ 2015 Plan”). The Company’s shareholders approved the 2015 Plan in September 2015. Under the 2015 Plan, the Company can issue various types of equity compensation awards such as restricted shares, performance shares, restricted stock units, performance units, long-term cash award and other share-based awards.

The options granted generally have a four-year vesting period and expire ten years after the date of grant. Options granted under the 2015 Plan that are cancelled or forfeited before expiration become available for future grant.

In September 2015, the Company’s compensation committee granted options to purchase 921,488 ordinary shares to certain of the Company's employees pursuant to the 2015 Plan, conditioned upon the consummation of the IPO (see Note 11). The per share exercise price of these options is equal to the price per share at which the shares were sold to the public ($22). These awards are subject to continued employment and generally vest over four years.

As of September 30, 2015 (unaudited),  11,057,024 ordinary shares are available for grant under the 2015 Plan after taking into account the grants made in September 2015 conditioned upon the consummation of the IPO (see Note 11).

A summary of the status of the Company’s option plans as of September 30, 2015 (unaudited) and changes during the period then ended is presented below:

 

 

 

Period ended

September 30, 2015 (unaudited)

 

 

 

Number

of options

 

 

Weighted

average

exercise

price

 

 

Aggregate

intrinsic value

 

Outstanding at beginning of period

 

 

7,426,159

 

 

$

3.98

 

 

 

 

 

Granted

 

 

2,718,127

 

 

 

17.02

 

 

 

 

 

Exercised

 

 

(2,512

)

 

 

7.36

 

 

 

 

 

Forfeited and cancelled

 

 

(191,276

)

 

 

8.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at end of period

 

 

9,950,498

 

 

$

7.46

 

 

$

144,651

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable options

 

 

5,163,286

 

 

$

2.86

 

 

$

98,819

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and expected to vest

 

 

8,968,053

 

 

$

5.96

 

 

$

143,856

 

 

NOTE 9:- SHARE OPTIONS (Cont.)

The options outstanding as of September 30, 2015 (unaudited) have been separated into ranges of exercise prices, as follows:

 

Exercise price

 

Number

of options

outstanding

as of

September 30,

2015

 

 

Weighted

average

remaining

contractual

term

 

 

Number

of options

exercisable

as of

September 30,

2015

 

 

Weighted

average

remaining

contractual

term

 

 

 

 

 

 

 

(years)

 

 

 

 

 

 

(years)

 

0.01

 

 

98,995

 

 

 

0.46

 

 

 

98,995

 

 

 

0.46

 

0.17

 

 

1,403,857

 

 

 

0.96

 

 

 

1,403,857

 

 

 

0.96

 

0.23

 

 

440,531

 

 

 

3.68

 

 

 

440,531

 

 

 

3.68

 

0.38

 

 

488,331

 

 

 

5.04

 

 

 

488,331

 

 

 

5.04

 

3.44

 

 

1,779,072

 

 

 

6.13

 

 

 

1,350,491

 

 

 

6.12

 

6.72

 

 

940,424

 

 

 

6.93

 

 

 

687,525

 

 

 

6.93

 

6.83

 

 

92,227

 

 

 

7.20

 

 

 

46,390

 

 

 

7.20

 

7.03

 

 

613,174

 

 

 

7.39

 

 

 

306,570

 

 

 

7.39

 

7.04

 

 

137,321

 

 

 

7.72

 

 

 

69,311

 

 

 

7.72

 

7.28

 

 

167,921

 

 

 

7.90

 

 

 

79,366

 

 

 

7.90

 

7.48

 

 

504,365

 

 

 

8.39

 

 

 

127,555

 

 

 

8.39

 

7.52

 

 

116,769

 

 

 

8.49

 

 

 

29,186

 

 

 

8.49

 

7.58

 

 

52,032

 

 

 

8.74

 

 

 

13,006

 

 

 

8.74

 

7.73

 

 

431,053

 

 

 

9.02

 

 

 

22,172

 

 

 

8.87

 

14.37

 

 

1,616,012

 

 

 

9.41

 

 

 

-

 

 

 

-

 

15.60

 

 

146,926

 

 

 

9.57

 

 

 

-

 

 

 

-

 

22.00 (1)

 

 

921,488

 

 

 

10.00

 

 

 

-

 

 

 

-

 

 

 

 

9,950,498

 

 

 

6.62

 

 

 

5,163,286

 

 

 

4.63

 

 

(1)

conditioned upon the consummation of the IPO (see above).

As of September 30, 2015 (unaudited), there was unrecognized compensation cost of $13,932, which is expected to be recognized over a weighted average period of approximately 3.15 years.

The total non – cash share-based compensation expense related to all of the Company’s equity-based awards, recognized for the three and nine months ended September 30, 2015 and 2014 (unaudited) was comprised as follows:

 

 

 

Three months ended

September 30,

 

 

Nine months ended

September 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

Unaudited

 

 

Unaudited

 

Cost of revenues

 

$

35

 

 

$

14

 

 

$

54

 

 

$

31

 

Research, development and clinical trials

 

 

668

 

 

 

254

 

 

 

1,717

 

 

 

543

 

Sales and marketing

 

 

571

 

 

 

262

 

 

 

1,550

 

 

 

807

 

General and administrative

 

 

1,654

 

 

 

675

 

 

 

4,051

 

 

 

1,973

 

Total share-based compensation expense

 

$

2,928

 

 

$

1,205

 

 

$

7,372

 

 

$

3,354

 

 

Supplemental Information
Supplemental Information

NOTE 10:- SUPPLEMENTAL INFORMATION

The Company operates in a single reportable segment.

The following table presents long-lived assets by location:

 

 

 

September 30,

 

 

December 31,

 

 

 

2015

 

 

2014

 

 

 

Unaudited

 

 

Audited

 

Europe, Middle East and Africa

 

 

 

 

 

 

 

 

Israel

 

$

1,156

 

 

$

1,009

 

Switzerland

 

 

2,972

 

 

 

1,259

 

Other

 

 

425

 

 

 

13

 

Total Europe, Middle East and Africa

 

 

4,553

 

 

 

2,281

 

United States

 

 

6,069

 

 

 

3,468

 

Total

 

$

10,622

 

 

$

5,749

 

 

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,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

Unaudited

 

 

Unaudited

 

Europe, Middle East and Africa

 

$

407

 

 

$

258

 

 

$

994

 

 

$

286

 

United States

 

 

8,546

 

 

 

4,116

 

 

 

19,710

 

 

 

11,403

 

Total

 

$

8,953

 

 

$

4,374

 

 

$

20,704

 

 

$

11,689

 

 

Subsequent Events
Subsequent Events

NOTE 11:- SUBSEQUENT EVENTS

IPO. On October 7, 2015, the Company completed the IPO of its ordinary shares, which resulted in the sale of 7,500,000 ordinary shares at a price of $22.00 per ordinary share. The Company received net proceeds from the IPO of approximately $150,500, net of underwriting discounts and commissions and estimated offering expenses. In connection with the closing of the IPO, all of the Company’s outstanding preferred shares were converted into ordinary shares of the Company on a one-to-one basis.  The underwriters for the IPO have an option, exercisable through October 31, 2015, to purchase up to 1,125,000 additional ordinary shares to cover over-allotments, if any.  On October 19, 2015, following the partial exercise by the underwriters of their option, the Company sold an additional 376,195 ordinary shares at a price of $22.00 per share and received net proceeds of approximately $7,700, net of underwriting discounts and commissions.

Warrant Exercises- In October 2015, certain investors exercised warrants for an aggregate of 565,696 ordinary shares.  Total purchase price received by the Company related to the warrant exercises was $2,003.

Significant Accounting Policies (Policies)

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. As of September 30, 2015, 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 nine-months period ended September 30, 2014 and 2015 (unaudited), no other than temporary impairment losses have been identified.

2. The Company has restricted cash as of September 30, 2015 of $166 (unaudited) used as security to cover bank guarantees in respect of use of Company credit cards in the Swiss operations.

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 nine-month periods ended September 30, 2014 and 2015 (unaudited).

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

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 nine-month periods ended September 30, 2014 and 2015 (unaudited), no impairment losses have been identified.

j. Long-term lease deposits:

Long-term lease deposits in respect of office rent and vehicles under operating leases are presented in other long-term assets.

h. 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 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 $752 and $1,446 for the nine months ended September 30, 2014 and 2015 (unaudited), respectively and sales tax of $206 and $424 for the nine months ended September 30, 2014 and 2015 (unaudited), respectively.

i. Research, development and clinical trials:

Research, development and clinical trials, including direct and allocated expenses are expensed as incurred.

j. 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 shipping and handling costs of $405 and $891 for the nine-month period ended September 30, 2014 and 2015 (unaudited), respectively, are included in selling and marketing costs.

k. 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.

The fair value of ordinary shares underlying the options has historically been determined by management and the board of directors. Because there has been no public market for the Company’s ordinary shares, the board of directors has 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. The fair value of the underlying ordinary shares will be determined by the board of directors until such time as the Company’s ordinary shares are listed on an established share exchange or national market system. 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 initial public offering (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.

l. 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.

m. 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.

n. 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 reverse. The Company provides a valuation allowance, to reduce deferred tax assets to their estimated realizable value, if needed.

ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing a minimum recognition threshold for a tax position taken or expected to be taken in a tax return that is required to be met before being recognized in the financial statements. ASC 740 also provides guidance on measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition.

o. 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 (Channel Islands), 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 the nine month period ended September 30, 2015, one payer represented $3,951 or 18% of net revenues, respectively. In the nine month period ended September 30, 2014, the same payer represented $1,890 or 15% of revenues, respectively.

p. Retirement plans and severance pay:

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 an occupational benefit plan with a private pension fund for its Swiss employees, whereby the employee and the Company contribute to the pension fund.

The pension expense for the nine months periods ended September 30, 2014 and 2015 (unaudited) was $155 and $218, respectively.

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, Ltd.’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 nine months periods ended September 30, 2014 and 2015 amounted to $239 and $218, respectively.

q. 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.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, an updated standard on revenue recognition. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and US GAAP. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements. ASU 2014-09 was initially effective for annual and interim reporting periods beginning after December 15, 2016 and may be adopted either on a full retrospective or modified retrospective approach. On July 9, 2015, the FASB approved a one - year deferral of the effective date of the ASU. The revised effective date is for annual reporting periods beginning after December 15, 2017 and interim periods therein, with early adoption permitted as of the original effective date. The Company is evaluating the impact of implementation of this standard 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 nine-month periods ended September 30, 2014 and 2015 (unaudited) $12 and $32, respectively, write-downs had been identified.

Significant Accounting Policies (Tables)
Property and Equipment at Cost Using Straight-Line Method

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

Leasehold improvements

 

Over the shorter of the term of the lease or its useful life

 

Inventories (Tables)
Schedule of Inventories

 

 

 

September 30,

 

 

December 31,

 

 

 

2015

 

 

2014

 

 

 

Unaudited

 

 

Audited

 

Raw materials

 

$

3,095

 

 

$

526

 

Work in progress

 

 

3,154

 

 

 

1,280

 

Finished products

 

 

4,900

 

 

 

1,640

 

Total

 

$

11,149

 

 

$

3,446

 

 

Share Options (Tables)

A summary of the status of the Company’s option plans as of September 30, 2015 (unaudited) and changes during the period then ended is presented below:

 

 

 

Period ended

September 30, 2015 (unaudited)

 

 

 

Number

of options

 

 

Weighted

average

exercise

price

 

 

Aggregate

intrinsic value

 

Outstanding at beginning of period

 

 

7,426,159

 

 

$

3.98

 

 

 

 

 

Granted

 

 

2,718,127

 

 

 

17.02

 

 

 

 

 

Exercised

 

 

(2,512

)

 

 

7.36

 

 

 

 

 

Forfeited and cancelled

 

 

(191,276

)

 

 

8.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at end of period

 

 

9,950,498

 

 

$

7.46

 

 

$

144,651

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable options

 

 

5,163,286

 

 

$

2.86

 

 

$

98,819

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and expected to vest

 

 

8,968,053

 

 

$

5.96

 

 

$

143,856

 

 

The options outstanding as of September 30, 2015 (unaudited) have been separated into ranges of exercise prices, as follows:

 

Exercise price

 

Number

of options

outstanding

as of

September 30,

2015

 

 

Weighted

average

remaining

contractual

term

 

 

Number

of options

exercisable

as of

September 30,

2015

 

 

Weighted

average

remaining

contractual

term

 

 

 

 

 

 

 

(years)

 

 

 

 

 

 

(years)

 

0.01

 

 

98,995

 

 

 

0.46

 

 

 

98,995

 

 

 

0.46

 

0.17

 

 

1,403,857

 

 

 

0.96

 

 

 

1,403,857

 

 

 

0.96

 

0.23

 

 

440,531

 

 

 

3.68

 

 

 

440,531

 

 

 

3.68

 

0.38

 

 

488,331

 

 

 

5.04

 

 

 

488,331

 

 

 

5.04

 

3.44

 

 

1,779,072

 

 

 

6.13

 

 

 

1,350,491

 

 

 

6.12

 

6.72

 

 

940,424

 

 

 

6.93

 

 

 

687,525

 

 

 

6.93

 

6.83

 

 

92,227

 

 

 

7.20

 

 

 

46,390

 

 

 

7.20

 

7.03

 

 

613,174

 

 

 

7.39

 

 

 

306,570

 

 

 

7.39

 

7.04

 

 

137,321

 

 

 

7.72

 

 

 

69,311

 

 

 

7.72

 

7.28

 

 

167,921

 

 

 

7.90

 

 

 

79,366

 

 

 

7.90

 

7.48

 

 

504,365

 

 

 

8.39

 

 

 

127,555

 

 

 

8.39

 

7.52

 

 

116,769

 

 

 

8.49

 

 

 

29,186

 

 

 

8.49

 

7.58

 

 

52,032

 

 

 

8.74

 

 

 

13,006

 

 

 

8.74

 

7.73

 

 

431,053

 

 

 

9.02

 

 

 

22,172

 

 

 

8.87

 

14.37

 

 

1,616,012

 

 

 

9.41

 

 

 

-

 

 

 

-

 

15.60

 

 

146,926

 

 

 

9.57

 

 

 

-

 

 

 

-

 

22.00 (1)

 

 

921,488

 

 

 

10.00

 

 

 

-

 

 

 

-

 

 

 

 

9,950,498

 

 

 

6.62

 

 

 

5,163,286

 

 

 

4.63

 

 

The total non – cash share-based compensation expense related to all of the Company’s equity-based awards, recognized for the three and nine months ended September 30, 2015 and 2014 (unaudited) was comprised as follows:

 

 

 

Three months ended

September 30,

 

 

Nine months ended

September 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

Unaudited

 

 

Unaudited

 

Cost of revenues

 

$

35

 

 

$

14

 

 

$

54

 

 

$

31

 

Research, development and clinical trials

 

 

668

 

 

 

254

 

 

 

1,717

 

 

 

543

 

Sales and marketing

 

 

571

 

 

 

262

 

 

 

1,550

 

 

 

807

 

General and administrative

 

 

1,654

 

 

 

675

 

 

 

4,051

 

 

 

1,973

 

Total share-based compensation expense

 

$

2,928

 

 

$

1,205

 

 

$

7,372

 

 

$

3,354

 

 

Supplemental Information (Tables)

The following table presents long-lived assets by location:

 

 

 

September 30,

 

 

December 31,

 

 

 

2015

 

 

2014

 

 

 

Unaudited

 

 

Audited

 

Europe, Middle East and Africa

 

 

 

 

 

 

 

 

Israel

 

$

1,156

 

 

$

1,009

 

Switzerland

 

 

2,972

 

 

 

1,259

 

Other

 

 

425

 

 

 

13

 

Total Europe, Middle East and Africa

 

 

4,553

 

 

 

2,281

 

United States

 

 

6,069

 

 

 

3,468

 

Total

 

$

10,622

 

 

$

5,749

 

 

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,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

Unaudited

 

 

Unaudited

 

Europe, Middle East and Africa

 

$

407

 

 

$

258

 

 

$

994

 

 

$

286

 

United States

 

 

8,546

 

 

 

4,116

 

 

 

19,710

 

 

 

11,403

 

Total

 

$

8,953

 

 

$

4,374

 

 

$

20,704

 

 

$

11,689

 

 

General - Additional Information (Details)
9 Months Ended
Sep. 30, 2015
USD ($)
Sep. 30, 2015
GBP (Ł)
Dec. 31, 2014
USD ($)
Organization Consolidation And Presentation Of Financial Statements [Abstract]
 
 
 
Common stock, no par value
   
 
   
Preferred stock, no par value
   
 
   
Share split ratio
5.913 
5.913 
 
Ordinary shares par value
 
Ł 0.01 
 
preferred shares par value
 
Ł 0.01 
 
Significant Accounting Policies - Additional Information (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Significant Accounting Policies [Line Items]
 
 
 
 
 
Other than temporary impairment losses on short-term investments
 
 
$ 0 
$ 0 
 
Restricted cash
166,000 
 
166,000 
 
61,000 
Inventory write-offs
 
 
 
Impairment of long-lived assets
 
 
 
Excise taxes
 
 
1,446 
752 
 
Sales taxes
 
 
424 
206 
 
Shipping and handling costs
 
 
891 
405 
 
Dividends declared
 
 
 
 
Dividends paid
 
 
 
 
Net revenues
8,953,000 
4,374,000 
20,704,000 
11,689,000 
 
Pension expense
 
 
218 
155 
 
Monthly salary contribution rate by employer
 
 
8.33% 
 
 
Severance costs
 
 
218 
239 
 
Sales Revenue Net |
Customer Concentration Risk |
Customer One
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Net revenues
 
 
3,951,000 
1,890,000 
 
Concentration risk percentage
 
 
18.00% 
15.00% 
 
Employee Stock Option
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Share-based award requisite service period
 
 
4 years 
 
 
Expected dividend yield
 
 
0.00% 
 
 
Field Equipment Under Operating Leases
 
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
 
Property and equipment useful life
 
 
2 years 
 
 
Equipment write-downs included in cost of revenue
 
 
$ 32 
$ 12 
 
Property and Equipment at Cost Using Straight-Line Method (Details)
9 Months Ended
Sep. 30, 2015
Computers and laboratory equipment |
Minimum
 
Property Plant And Equipment [Line Items]
 
Straight line depreciation rate
15.00% 
Computers and laboratory equipment |
Maximum
 
Property Plant And Equipment [Line Items]
 
Straight line depreciation rate
33.00% 
Office furniture |
Minimum
 
Property Plant And Equipment [Line Items]
 
Straight line depreciation rate
6.00% 
Office furniture |
Maximum
 
Property Plant And Equipment [Line Items]
 
Straight line depreciation rate
33.00% 
Leasehold improvements
 
Property Plant And Equipment [Line Items]
 
Straight line depreciation useful life
Over the shorter of the term of the lease or its useful life 
Short Term Investments - Additional Information (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Investments Debt And Equity Securities [Abstract]
 
 
Short-term investments
$ 26,999 
$ 44,999 
Estimated fair value of short-term investments
$ 27,002 
$ 44,999 
Inventories - Schedule of Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Inventory Disclosure [Abstract]
 
 
Raw materials
$ 3,095 
$ 526 
Work in progress
3,154 
1,280 
Finished products
4,900 
1,640 
Total
$ 11,149 
$ 3,446 
Long - Term Loan, Net of Discount - Additional Information (Details) (Term Loan, USD $)
1 Months Ended 9 Months Ended
Jan. 31, 2015
Sep. 30, 2015
Line Of Credit Facility [Line Items]
 
 
Term loan agreement, maturity period
5 years 
 
Line of credit facility, maximum borrowing capacity
$ 100,000,000 
 
Line of credit facility, current borrowing capacity
25,000,000 
 
Line of credit facility, remaining borrowing capacity
 
75,000,000 
Interest on the outstanding loan
 
10.00% 
Funding fees payable
 
1.50% 
Prepayment fee percent
 
0.75% 
Due date of outstanding principal loan
 
Jan. 31, 2020 
Frequency of payments
 
Quarterly 
Other Long-term Assets
 
 
Line Of Credit Facility [Line Items]
 
 
Total discount
 
491,000 
Additional deferred issuance costs
 
$ 1,739,000 
First Year
 
 
Line Of Credit Facility [Line Items]
 
 
Prepayment fee percent
 
3.00% 
Second Year
 
 
Line Of Credit Facility [Line Items]
 
 
Prepayment fee percent
 
2.00% 
Third Year
 
 
Line Of Credit Facility [Line Items]
 
 
Prepayment fee percent
 
1.00% 
Commitments and Contingent Liabilities - Additional Information (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Loss Contingencies [Line Items]
 
 
Operating lease expiration description
The facilities of the Company are leased under various operating lease agreements for periods ending no later than 2023. 
 
Pledged bank deposits
$ 133 
$ 130 
Operating Lease Commitments
$ 283 
$ 281 
Motor Vehicles
 
 
Loss Contingencies [Line Items]
 
 
Operating lease expiration description
The Company also leases motor vehicles under various operating leases, which expire on various dates, the latest of which is in 2017. 
 
Maximum
 
 
Loss Contingencies [Line Items]
 
 
Operating lease agreements, expiration year
2023 
 
Maximum |
Motor Vehicles
 
 
Loss Contingencies [Line Items]
 
 
Operating lease agreements, expiration year
2017 
 
Share Capital - Additional Information (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
9 Months Ended 9 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Sep. 30, 2015
Condition One
Sep. 30, 2015
Condition Two
Mar. 31, 2015
Settlement Agreement
Feb. 28, 2015
Settlement Agreement
Dec. 31, 2014
Settlement Agreement
Dec. 31, 2014
Settlement Agreement
General and Administrative
Mar. 31, 2015
Settlement Agreement
Minimum
Feb. 28, 2015
Settlement Agreement
Condition One
Feb. 28, 2015
Settlement Agreement
Condition Two
Oct. 27, 2015
Subsequent
Settlement Agreement
Condition One
Jun. 30, 2015
Series J Preferred Stock
Share Capital [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued
 
 
 
 
 
 
 
 
 
 
 
 
 
4,068,500 
Shares issued, price per share
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 23.33 
Proceeds from issuance of preferred shares, net
$ 94,599 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
$ 94,599 
Share issuance expenses
1,733 
 
 
 
 
 
 
 
 
 
 
 
319 
Liquidation preference per share
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 23.33 
Settlement agreement date
February 2015 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement agreement terms
 
 
 
(i) 18 months after signing of the Agreement, (ii) an initial public offering (“IPO”) and (iii) the earlier of consummation of a merger/acquisition (“M&A”) or achievement of a Cumulative Net Sales milestone of $250,000. (as defined pursuant to the Agreement), The Additional Payment was paid in October 2015from the proceeds of the Company’s IPO . 
(i) achievement of the Cumulative Net Sales milestone per above and (ii) consummation of an M&A. 
 
 
 
 
 
 
 
 
 
Settlement expense
 
 
 
 
 
 
 
 
1,867 
 
1,000 
 
 
 
Settlement additional payment
 
 
 
 
 
 
 
 
 
 
1,000 
5,500 
 
 
Settlement additional amount paid
 
 
 
 
 
 
 
 
 
 
 
 
1,000 
 
Earlier Payment period after agreement
 
 
 
 
 
 
18 months 
 
 
 
 
 
 
 
Net sales milestone
 
 
 
 
 
 
250,000 
 
 
 
 
 
 
 
Common stock, shares issued
12,432,293 
 
13,431,414 
 
 
 
1,005,210 
 
 
 
 
 
 
 
Ordinary shares granted
 
 
 
 
 
 
1,005,210 
 
 
 
 
 
 
 
Earlier Period for Option Termination
 
 
 
 
 
 
12 months 
 
 
 
 
 
 
 
Stock redeemed or called during period, shares
 
 
 
 
 
 
2,010,420 
 
 
 
 
 
 
 
Stock redeemed or cancelled, price per share
 
 
 
 
 
$ 5 
 
 
 
 
 
 
 
 
Cash obligation
 
 
 
 
 
$ 2,000 
 
$ 2,000 
 
 
 
 
 
 
Percentage of closing price per share
 
 
 
 
 
 
 
 
 
80.00% 
 
 
 
 
Share Options - Additional Information (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
1 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
Options granted, ordinary shares
 
2,718,127 
Option exercise price per share
 
$ 17.02 
Unrecognized compensation cost
$ 13,932 
$ 13,932 
Unrecognized compensation cost expected recognition weighted average period
 
3 years 1 month 24 days 
2003 Plan
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
Option granted vesting period
 
4 years 
Option granted expiration period
 
10 years 
2013 Plan
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
Option granted vesting period
 
4 years 
Option granted expiration period
 
10 years 
Additional shares authorized for issuance available for grants
 
2,956,500 
Number of shares authorized available for grant
13,198,224 
13,198,224 
2015 Plan
 
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
 
Option granted vesting period
 
4 years 
Option granted expiration period
 
10 years 
Options granted, ordinary shares
921,488 
 
Option exercise price per share
$ 22 
 
Ordinary shares available for grants
11,057,024 
11,057,024 
Share Options - Stock Option Plan (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Number of options
 
Outstanding at beginning of period
7,426,159 
Granted
2,718,127 
Exercised
(2,512)
Forfeited and cancelled
(191,276)
Outstanding at end of period
9,950,498 
Exercisable options
5,163,286 
Vested and expected to vest
8,968,053 
Weighted average exercise price
 
Outstanding at beginning of period
$ 3.98 
Option exercise price per share
$ 17.02 
Exercised
$ 7.36 
Forfeited and cancelled
$ 8.39 
Outstanding at end of period
$ 7.46 
Exercisable options
$ 2.86 
Vested and expected to vest
$ 5.96 
Aggregate intrinsic value
 
Outstanding at end of period
$ 144,651 
Exercisable options
98,819 
Vested and expected to vest
$ 143,856 
Share Options - Stock Option Outstanding Separated into Ranges of Exercise Prices (Details) (USD $)
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Number of options outstanding
9,950,498 
7,426,159 
Options outstanding, weighted average remaining contractual term
6 years 7 months 13 days 
 
Number of options exercisable
5,163,286 
 
Options exercisable, weighted average remaining contractual term
4 years 7 months 17 days 
 
Exercise price 0.01
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 0.01 
 
Number of options outstanding
98,995 
 
Options outstanding, weighted average remaining contractual term
5 months 16 days 
 
Number of options exercisable
98,995 
 
Options exercisable, weighted average remaining contractual term
5 months 16 days 
 
Exercise price 0.17
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 0.17 
 
Number of options outstanding
1,403,857 
 
Options outstanding, weighted average remaining contractual term
11 months 16 days 
 
Number of options exercisable
1,403,857 
 
Options exercisable, weighted average remaining contractual term
11 months 16 days 
 
Exercise price 0.23
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 0.23 
 
Number of options outstanding
440,531 
 
Options outstanding, weighted average remaining contractual term
3 years 8 months 5 days 
 
Number of options exercisable
440,531 
 
Options exercisable, weighted average remaining contractual term
3 years 8 months 5 days 
 
Exercise price 0.38
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 0.38 
 
Number of options outstanding
488,331 
 
Options outstanding, weighted average remaining contractual term
5 years 15 days 
 
Number of options exercisable
488,331 
 
Options exercisable, weighted average remaining contractual term
5 years 15 days 
 
Exercise price 3.44
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 3.44 
 
Number of options outstanding
1,779,072 
 
Options outstanding, weighted average remaining contractual term
6 years 1 month 17 days 
 
Number of options exercisable
1,350,491 
 
Options exercisable, weighted average remaining contractual term
6 years 1 month 13 days 
 
Exercise price 6.72
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 6.72 
 
Number of options outstanding
940,424 
 
Options outstanding, weighted average remaining contractual term
6 years 11 months 5 days 
 
Number of options exercisable
687,525 
 
Options exercisable, weighted average remaining contractual term
6 years 11 months 5 days 
 
Exercise price 6.83
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 6.83 
 
Number of options outstanding
92,227 
 
Options outstanding, weighted average remaining contractual term
7 years 2 months 12 days 
 
Number of options exercisable
46,390 
 
Options exercisable, weighted average remaining contractual term
7 years 2 months 12 days 
 
Exercise price 7.03
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 7.03 
 
Number of options outstanding
613,174 
 
Options outstanding, weighted average remaining contractual term
7 years 4 months 21 days 
 
Number of options exercisable
306,570 
 
Options exercisable, weighted average remaining contractual term
7 years 4 months 21 days 
 
Exercise price 7.04
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 7.04 
 
Number of options outstanding
137,321 
 
Options outstanding, weighted average remaining contractual term
7 years 8 months 19 days 
 
Number of options exercisable
69,311 
 
Options exercisable, weighted average remaining contractual term
7 years 8 months 19 days 
 
Exercise price 7.28
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 7.28 
 
Number of options outstanding
167,921 
 
Options outstanding, weighted average remaining contractual term
7 years 10 months 24 days 
 
Number of options exercisable
79,366 
 
Options exercisable, weighted average remaining contractual term
7 years 10 months 24 days 
 
Exercise price 7.48
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 7.48 
 
Number of options outstanding
504,365 
 
Options outstanding, weighted average remaining contractual term
8 years 4 months 21 days 
 
Number of options exercisable
127,555 
 
Options exercisable, weighted average remaining contractual term
8 years 4 months 21 days 
 
Exercise price 7.52
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 7.52 
 
Number of options outstanding
116,769 
 
Options outstanding, weighted average remaining contractual term
8 years 5 months 27 days 
 
Number of options exercisable
29,186 
 
Options exercisable, weighted average remaining contractual term
8 years 5 months 27 days 
 
Exercise price 7.58
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 7.58 
 
Number of options outstanding
52,032 
 
Options outstanding, weighted average remaining contractual term
8 years 8 months 27 days 
 
Number of options exercisable
13,006 
 
Options exercisable, weighted average remaining contractual term
8 years 8 months 27 days 
 
Exercise price 7.73
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 7.73 
 
Number of options outstanding
431,053 
 
Options outstanding, weighted average remaining contractual term
9 years 7 days 
 
Number of options exercisable
22,172 
 
Options exercisable, weighted average remaining contractual term
8 years 10 months 13 days 
 
Exercise price 14.37
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 14.37 
 
Number of options outstanding
1,616,012 
 
Options outstanding, weighted average remaining contractual term
9 years 4 months 28 days 
 
Exercise price 15.60
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 15.60 
 
Number of options outstanding
146,926 
 
Options outstanding, weighted average remaining contractual term
9 years 6 months 26 days 
 
Exercise price 22.00
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Exercise price
$ 22.00 
 
Number of options outstanding
921,488 
 
Options outstanding, weighted average remaining contractual term
10 years 
 
Supplemental Information - Schedule of Long-Lived Assets by Location (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Revenues From External Customers And Long Lived Assets [Line Items]
 
 
Long-lived assets
$ 10,622 
$ 5,749 
Israel
 
 
Revenues From External Customers And Long Lived Assets [Line Items]
 
 
Long-lived assets
1,156 
1,009 
Switzerland
 
 
Revenues From External Customers And Long Lived Assets [Line Items]
 
 
Long-lived assets
2,972 
1,259 
Other
 
 
Revenues From External Customers And Long Lived Assets [Line Items]
 
 
Long-lived assets
425 
13 
Europe, Middle East and Africa
 
 
Revenues From External Customers And Long Lived Assets [Line Items]
 
 
Long-lived assets
4,553 
2,281 
United States
 
 
Revenues From External Customers And Long Lived Assets [Line Items]
 
 
Long-lived assets
$ 6,069 
$ 3,468 
Supplemental Information - Schedule of Revenues by Geographic Region (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Revenues From External Customers And Long Lived Assets [Line Items]
 
 
 
 
Net revenues
$ 8,953 
$ 4,374 
$ 20,704 
$ 11,689 
Europe, Middle East and Africa
 
 
 
 
Revenues From External Customers And Long Lived Assets [Line Items]
 
 
 
 
Net revenues
407 
258 
994 
286 
United States
 
 
 
 
Revenues From External Customers And Long Lived Assets [Line Items]
 
 
 
 
Net revenues
$ 8,546 
$ 4,116 
$ 19,710 
$ 11,403 
Subsequent Events - Additional Information (Details) (Subsequent, USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 1 Months Ended 0 Months Ended
Oct. 7, 2015
Oct. 31, 2015
Warrant
Oct. 7, 2015
IPO
Oct. 19, 2015
Over Allotment Option
Oct. 7, 2015
Over Allotment Option
Subsequent Event [Line Items]
 
 
 
 
 
Sale of ordinary shares
 
 
7,500,000 
376,195 
 
Shares issued, price per share
 
 
$ 22.00 
$ 22.00 
 
Net proceeds from stock issuance, net of underwriting discounts and commissions
 
 
$ 150,500 
 
 
Preferred stock conversion basis
In connection with the closing of the IPO, all of the Company’s outstanding preferred shares were converted into ordinary shares of the Company on a one-to-one basis. 
 
 
 
 
Common stock available for underwriters
 
 
 
 
1,125,000 
Net proceeds from stock issuance, net of underwriting discounts and commissions
 
 
 
7,700 
 
Warrants exercised for ordinary shares
 
565,696 
 
 
 
Proceeds from warrant exercises
 
$ 2,003