Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2018	Feb. 21, 2019	Jun. 30, 2018
Document Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	NVCR
Entity Registrant Name	Novocure Ltd
Entity Central Index Key	0001645113
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		94,994,588
Entity Public Float			$ 1,752,641,027

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 140,622	$ 78,592
Short-term investments	105,256	104,719
Restricted cash	2,134	2,126
Trade receivables, net	36,523	29,567
Receivables and prepaid expenses	14,279	8,105
Inventories	22,555	22,025
Total current assets	321,369	245,134
Long-term assets:
Property and equipment, net	8,442	9,031
Field equipment, net	6,924	9,036
Severance pay fund	113	111
Other long-term assets	2,945	1,986
Total long-term assets	18,424	20,164
Total assets	339,793	265,298
Current liabilities:
Trade payables	26,708	17,206
Other payables and accrued expenses	37,852	32,996
Total current liabilities	64,560	50,202
Long-term liabilities:
Long-term loan, net of discount and issuance costs	149,268	97,342
Deferred revenues	9,929	0
Employee benefit liabilities	2,683	2,453
Other long-term liabilities	1,094	1,737
Total long-term liabilities	162,974	101,532
Total liabilities	227,534	151,734
Commitments and contingencies	0	0
Shareholders’ equity:
Ordinary shares - No par value, Unlimited shares authorized; Issued and outstanding: 93,254,185 shares and 89,478,032 shares at December 31, 2018 and December 31, 2017 respectively;	0	0
Additional paid-in capital	757,314	697,165
Accumulated other comprehensive loss	(1,400)	(1,343)
Accumulated deficit	(643,655)	(582,258)
Total shareholders’ equity	112,259	113,564
Total liabilities and shareholders’ equity	$ 339,793	$ 265,298

Consolidated Balance Sheets (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Common stock, par value
Common stock, shares authorized	Unlimited	Unlimited
Common stock, shares issued	93,254,185	89,478,032
Common stock, shares outstanding	93,254,185	89,478,032

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Net revenues	$ 248,069	$ 177,026	$ 82,888
Cost of revenues	80,048	55,609	39,870
Impairment of field equipment			6,412
Gross profit	168,021	121,417	36,606
Operating costs and expenses:
Research, development and clinical trials	50,574	38,103	41,467
Sales and marketing	77,663	63,528	59,449
General and administrative	73,456	59,114	51,007
Total operating costs and expenses	201,693	160,745	151,923
Operating income (loss)	(33,672)	(39,328)	(115,317)
Financial income (expenses), net	(12,270)	(9,169)	(6,147)
Income (loss) before income taxes	(45,942)	(48,497)	(121,464)
Income taxes	17,617	13,165	10,381
Net income (loss)	$ (63,559)	$ (61,662)	$ (131,845)
Basic and diluted net income (loss) per ordinary share	$ (0.69)	$ (0.70)	$ (1.54)
Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share	91,828,043	88,546,719	85,558,448

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net income (loss)	$ (63,559)	$ (61,662)	$ (131,845)
Other comprehensive income (loss), net of tax :
Change in foreign currency translation adjustments	27	8	10
Pension benefit plan	(84)	532	(388)
Total comprehensive income (loss)	$ (63,616)	$ (61,122)	$ (132,223)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Ordinary Shares	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings (Accumulated Deficit)
Balance at Dec. 31, 2015	$ 250,820		$ 640,406	$ (1,505)	$ (388,081)
Balance (in shares) at Dec. 31, 2015		83,778,581
Share-based compensation to employees	21,441		21,441
Exercise of options and warrants	993		993
Exercise of options and warrants (in shares)		3,195,477
Issuance of shares in connection with employee stock purchase plan	616		616
Issuance of shares in connection with employee stock purchase plan(in shares)		92,388
Tax benefit from share-based award activity	698		698
Other comprehensive income (loss), net of tax (benefit) expense of $38, $68, and $10 for the years ended December 2016, 2017 and 2018	(378)			(378)
Net income (loss)	(131,845)				(131,845)
Balance at Dec. 31, 2016	142,345		664,154	(1,883)	(519,926)
Balance (in shares) at Dec. 31, 2016		87,066,446
Cumulative effect adjustment resulting from ASU 2016-09 adoption (See Note 2)			670		(670)
Share-based compensation to employees	27,116		27,116
Exercise of options and warrants	3,685		3,685
Exercise of options and warrants (in shares)		2,244,153
Issuance of shares in connection with employee stock purchase plan	1,540		1,540
Issuance of shares in connection with employee stock purchase plan(in shares)		167,433
Other comprehensive income (loss), net of tax (benefit) expense of $38, $68, and $10 for the years ended December 2016, 2017 and 2018	540			540
Net income (loss)	(61,662)				(61,662)
Balance at Dec. 31, 2017	113,564		697,165	(1,343)	(582,258)
Balance (in shares) at Dec. 31, 2017		89,478,032
Share-based compensation to employees	39,846		39,846
Exercise of options and warrants	18,468		18,468
Exercise of options and warrants (in shares)		3,688,781
Proceeds from issuance of shares	1,835		1,835
Proceeds from issuance of shares (in shares)		87,372
Cumulative effect adjustment resulting from ASC 606 adoption (See note 2)	2,162				2,162
Other comprehensive income (loss), net of tax (benefit) expense of $38, $68, and $10 for the years ended December 2016, 2017 and 2018	(57)			(57)
Net income (loss)	(63,559)				(63,559)
Balance at Dec. 31, 2018	$ 112,259		$ 757,314	$ (1,400)	$ (643,655)
Balance (in shares) at Dec. 31, 2018		93,254,185

Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Other comprehensive income (loss), tax (benefit) expense	$ (10)	$ 68	$ (38)
Series J Preferred Stock
Share issuance expenses				$ 319
Over-Allotment
Share issuance expenses				$ 15,742

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net income (loss)	$ (63,559)	$ (61,662)	$ (131,845)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	9,006	7,677	5,652
Asset write-downs and impairment of field equipment	407	241	6,446
Share-based compensation	39,846	27,116	22,139
Excess tax benefits from share-based award activity			(698)
Decrease (increase) in trade receivables, net	(4,151)	(23,228)	(6,339)
Amortization of discount, net	1,022	252	155
Decrease (increase) in receivables and prepaid expenses	(6,174)	1,979	243
Decrease (increase) in inventories	(529)	3,524	(11,955)
Decrease (increase) in other long-term assets	(949)	(554)	(692)
Increase (decrease) in trade payables	9,503	(1,150)	1,601
Increase (decrease) in other payables and accrued expenses	4,210	14,460	6,647
Increase (decrease) in employee benefit liabilities, net	133	440	97
Increase (decrease) in other long-term liabilities	9,370	(2,229)	957
Net cash provided by (used in) operating activities	(1,865)	(33,134)	(107,592)
Cash flows from investing activities:
Purchase of property and equipment	(2,916)	(2,459)	(5,673)
Purchase of field equipment	(3,795)	(4,907)	(11,990)
Proceeds from maturity of short-term investments	255,000	120,000	270,000
Purchase of short-term investments	(253,782)	(104,006)	(239,341)
Net cash provided by (used in) investing activities	(5,493)	8,628	12,996
Cash flows from financing activities:
Proceeds from issuance of shares, net	1,835	1,540	616
Proceeds from long-term loan, net	149,150		72,887
Repayment of long-term loan	(100,000)
Excess tax benefits from share-based award activity			698
Proceeds from issuance of other long-term loans		19
Repayment of other long-term loans	(84)	(76)	(70)
Exercise of options and warrants	18,468	3,685	993
Net cash provided by financing activities	69,369	5,168	75,124
Effect of exchange rate changes on cash and cash equivalents	27	8	10
Increase (decrease) in cash, cash equivalents and restricted cash	62,038	(19,330)	(19,462)
Cash, cash equivalents and restricted cash at the beginning of the year	80,718	100,048	119,510
Cash, cash equivalents and restricted cash at the end of the year	142,756	80,718	100,048
Cash paid during the year for:
Income taxes	20,350	10,286	9,447
Interest	$ 13,334	$ 10,162	$ 6,595

Organization and Basis of Presentation

12 Months Ended

Dec. 31, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Basis of Presentation

Note 1: Organization and basis of presentation

NovoCure Limited (including its consolidated subsidiaries, the “Company”) was incorporated in the Bailiwick of Jersey and is principally engaged in the development, manufacture and commercialization of Optune for the treatment of a variety of solid tumors. The Company has regulatory approvals and clearances in certain countries for Optune to treat adult patients with glioblastoma (“GBM”).

Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

Note 2: Significant accounting policies

The consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”).

a. Use of estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, deferred taxes, tax liabilities, useful-life of field equipment, revenue recognition and the estimations required in accrual base accounting, 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, except for share and per-share data.

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 U.S. dollar is the currency of the primary economic environment in which NovoCure Limited and certain subsidiaries operate. The Company’s reporting currency is U.S. dollars.

Transactions and balances denominated in U.S. dollars are presented at their original amounts. Monetary accounts maintained in currencies other than the U.S. dollar are re-measured into dollars in accordance with Accounting Standards Codification (ASC) 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.

For a subsidiary whose functional currency has been determined to be its local currency, assets and liabilities are translated at year-end exchange rates and statement of operations items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders' equity.

c. Principles of consolidation:

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances, including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.

d. Cash equivalents:

Cash equivalents are short-term, highly liquid investments that are readily convertible into cash with an original maturity of three months or less at the date acquired.

e. Short-term investments and restricted cash:

1. Short-term investments:

The Company accounts for investments in debt securities in accordance with ASC 320, “Investments-Debt and Equity Securities.” Management determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such determinations at each balance sheet date. For the years ended December 31, 2018 and 2017, all securities are classified as held-to-maturity since the Company has the intent and ability to hold the securities to maturity and, accordingly, debt securities are stated at amortized cost.

The amortized cost of held-to-maturity securities is adjusted for amortization of premiums and accretion of discounts to maturity and any other than temporary impairment losses. Such amortization and interest are included in the consolidated statement of operations as financial income or expenses, as appropriate.

For the three years ended December 31, 2018, no impairment losses have been identified.

2. Restricted cash:

The Company has restricted cash used as security for the use of Company credit cards, presented in short-term assets. Additionally, the Company has pledged bank deposits to cover bank guarantees related to facility rental agreements, fleet lease agreements and customs payments presented in other long-term assets (see Note 12).

f. Trade receivables:

The Company’s trade receivables balance contains billed and unbilled commercial activities. As needed, the Company records an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. The Company periodically reviews its customers’ credit risk and payment history. To date, the Company has not experienced any credit losses related to counter-party risk.

g. Inventories:

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. The Company regularly evaluates its ability to realize the value of inventory. If the inventories are deemed damaged, if actual demand for the Company’s delivery systems deteriorates, or if market conditions are less favorable than those projected, inventory write-offs may be required.

Inventory write-offs of $684, $489 and $774, respectively, were recorded for the years ended December 31, 2018, 2017 and 2016.

h. Property and equipment:

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates:

		%
Computers and laboratory equipment		15 - 33
Office furniture		6 - 33
Production equipment		20
Leasehold improvements		Over the shorter of the term of the lease or its useful life

i. Field equipment:

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 18 to 36 months. Field equipment is equipment being utilized under service agreements, and accounted for in accordance with ASC 840 on a monthly basis as an operating lease. The Company records a write-off provision for any excess, lost or damaged equipment when warranted based on an assessment of the equipment. Write-offs for equipment are included in cost of revenues. During the years ended December 31, 2018, 2017 and 2016, write-offs for $350, $ 195 and $6,436, respectively, were recorded (see Note 7).

j. Impairment of long-lived assets:

The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360-10, “Property, Plant and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. During the three years ended December 31, 2018, no impairment losses have been identified other than the impairment of field equipment described below in Note 7.

k. Other long-term assets:

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

l. Revenue recognition:

Optune is comprised of two main components: (1) an electric field generator and (2) transducer arrays and related accessories. We retain title to the electric field generator, and the patient is provided replacement transducer arrays and technical support for the device during the term of treatment. The electric field generator and transducer arrays are always supplied and function together and are not sold on a standalone basis.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), an updated standard on revenue recognition and issued subsequent amendments to the initial guidance in March 2016, April 2016, May 2016 and December 2016 within ASU 2016-08, 2016-10, 2016-12 and 2016-20, respectively (collectively, “ASC 606”). The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods and services to patients in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. In addition, the new standard requires expanded disclosures. The Company has adopted the standard effective January 1, 2018 using the modified retrospective method for all contracts. The reported results for 2018 reflect the application of ASC 606 guidance while the reported results for 2017 were prepared under the guidance of ASC 605, Revenue Recognition (ASC 605). The amount of revenue recognized in 2018 reflects the consideration to which the Company expects to be entitled to receive in exchange for Optune.

The Company uses the portfolio approach to apply the standard to portfolios of contracts with similar characteristics.

To recognize revenue under ASC 606, the Company applies the following five steps:

1. Identify the contract with a patient. A contract with a patient exists when (i) the Company enters into an enforceable contract with a patient that defines each party’s rights regarding delivery of and payment for Optune, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for Optune is probable based on the payer’s intent and ability to pay the promised consideration. The evidence of a contract generally consists of a prescription, a patient service agreement and the verification of the assigned payer for the contract and intention to collect.

2. Identify the performance obligations in the contract. Optune contracts include the lease of the device, the supply obligation of disposable transducer arrays and technical support for the term of treatment. To the extent a contract includes multiple promised products and/or services, the Company must apply judgment to determine whether those products and/or services are capable of being distinct in the context of the contract. If these criteria are not met the promised products and/or services are accounted for as a combined performance obligation. In the Company’s case, Optune’s device, support, and disposables are provided as one inseparable package of monthly treatment for a single monthly fee.

3. Determine the transaction price. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for providing Optune to the patient. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company has agreements with many payers that define explicit discounts off the gross transaction price. In addition to the explicit discounts negotiated with each payer, the Company expects to receive, in aggregate for a given portfolio, less than the gross revenue net of explicit discounts. ASC 606 requires that the Company recognize this variable consideration as an implicit discount in the billing period. The implicit discount includes both an estimate of claims that will pay at an amount less than billed and an estimate of claims that will not pay within a given time horizon. The implicit discount adjustments to the transaction price are due to concessions, not collectability concerns driven by payer credit risk.

4. Allocate the transaction price to performance obligations in the contract. If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. As discussed above, there is a combined performance obligation under the Company’s contracts and, therefore, the monthly transaction price determined for the performance obligation will be recognized over time ratably over the monthly term of the treatment.

5. Recognize revenue when or as the Company satisfies a performance obligation. The Company satisfies performance obligations over time as discussed above. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised service to a patient. The patient consumes the benefits of Optune treatment on a daily basis over the monthly term. As this criterion is met, the revenues will be recognized over the monthly term.

At adoption of ASC 606, trade receivables increased by $2,807, deferred revenues increased by $645 and the Company recorded a cumulative impact to its accumulated deficit of $2,162.

The impact of the Company’s adoption of ASC 606 compared to ASC 605 on the consolidated statements of income for the three months and year ended December 31, 2018 was as follows: net revenue decreased by $4,054 and $8,683, respectively; net loss increased by $4,136 and $8,679, respectively; and our basic and diluted net loss per ordinary share increased by $0.04 and $0.09, respectively. The impact of the Company’s adoption of ASC 606 compared to ASC 605 on the balance sheet as of December 31, 2018 was a decrease in trade receivables of $6,288, an increase to other payables and accrued expenses (deferred revenues net of tax provision) of $1,052 and an accumulated deficit as of December 31, 2018 of $6,517.

Deferred revenues include amounts invoiced for days of therapy to be provided in future periods. Unbilled revenues include revenues recognized for therapy provided and not invoiced in the reported period, and are presented as part of accounts receivable.

Revenues are presented net of indirect taxes of $1,698, $ 1,239 and $ 972 for the years ended December 31, 2018, 2017 and 2016, respectively.

Net revenues in 2018 also include amounts recognized pursuant to the Zai Agreement. For additional information, see Note 12.

m. Charitable care:

The Company provides Optune treatment at no charge to patients who meet certain criteria under its charitable care policy. Because the Company does not pursue collection of amounts determined to qualify as charity, they are not reported as revenue. The Company's costs of care provided under charitable care were $2,762, $1,483 and $ 1,675 for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts were determined by applying charitable care as a percentage of total billings to total cost of goods sold.

n. Shipping and handling costs:

The Company does not separately bill its customers for shipping and handling costs associated with shipping Optune to its customers. These direct shipping and handling costs of $2,936, $5,322 and $3,389 for the years ended December 31, 2018, 2017 and 2016, respectively are included in Sales and Marketing costs.

o. Accounting for share-based payments:

The Company accounts for share-based compensation in accordance with ASC 718, “Compensation—Stock Compensation.” ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations.

The Company recognizes compensation costs for the value of awards granted using the accelerated method over the requisite service period of the award, which is generally the restricted share unit vesting term of three years and option vesting term of four years, respectively.

The Company selected the Black-Scholes model as the most appropriate fair value method for all equity awards and the Employee Share Purchase Plan (the “ESPP”). For market condition awards, the Company also applied the Monte-Carlo simulation model. The Black-Scholes model requires a number of assumptions, of which the most significant are the share price, expected volatility and the expected equity award term.

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.

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

p. Fair value of financial instruments:

The carrying amounts of cash and cash equivalents, short-term investments, restricted cash, receivables and prepaid expenses, trade receivables, trade payables and other accounts payable and accrued expenses approximate their fair value due to the short-term maturity of such instruments. Based upon the borrowing terms and conditions currently available to the Company, the carrying values of the long-term loans approximate fair value.

The Company accounts for certain assets and liabilities at fair value under ASC 820, “Fair Value Measurements and Disclosures.” Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety.

The three levels of inputs that may be used to measure fair value are as follows:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;

Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data; and

Level 3 - Unobservable inputs which are supported by little or no market activity.

The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of instrument, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the instrument are categorized as Level 3.

q. Basic and diluted net loss per share:

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 options and warrants) outstanding was anti-dilutive.

r. Income taxes:

The Company accounts for income taxes in accordance with ASC 740-10, “Income Taxes.” ASC 740-10 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, to reduce deferred tax assets to their estimated realizable value, if needed.

The Company established reserves for uncertain tax positions based on the evaluation of whether or not the Company’s uncertain tax position is “more likely than not” to be sustained upon examination. The Company records interest and penalties pertaining to its uncertain tax positions in the financial statements as income tax expense.

s. Concentration of risks:

Our cash, cash equivalents, short-term investments and trade receivables are potentially subject to a concentration of risk. Cash, cash equivalents and short-term investments are invested at top tier financial institutions globally. As such these investments may be in excess of insured limitations or not insured in certain 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 2018, one payer represented $22,959, or 9%, of net revenues. In 2017, the same payer represented $15,479, or 9%, of net revenues. In 2016, the same payer represented $10,393, or 13%, of net revenues. Credit risk with respect to trade receivables is limited.

t. Retirement, pension and severance plans:

The Company has a 401(k) retirement savings plan for its U.S. employees. Each eligible employee may elect to contribute a portion of the employee’s compensation to the plan. As of December 31, 2018, the Company has not made any matching contributions to this plan.

The Company has a defined benefit plan with a pension fund for its Swiss employees, whereby the employee and the Company contribute to the pension fund. The Company accounts for its obligation, in accordance with ASC 715, "Compensation – Retirement Benefits" (see Note 9).

The pension expense for the years ended December 31, 2018, 2017 and, 2016 was $882, $ 1,036 and $529, respectively.

Israeli law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The Company contributes to employee pension plans to fund its severance liabilities. According to Section 14 of Israel Severance Pay Law, the Company makes deposits on behalf of its employees with respect to the Company’s severance liability and therefore no obligation is provided for in the financial statements. Severance pay liabilities with respect to employees who are not subject to Section 14, are provided for in the financial statements based upon the number of years of service and the latest monthly salary and the related deposits are recorded as an asset based on the cash surrender value. Severance expense for the years ended December 31, 2018, 2017 and 2016 amounted to $526, $506 and $430, respectively.

u. Contingent liabilities:

The Company accounts for its contingent liabilities in accordance with ASC 450, “Contingencies.” A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. As of December 31, 2018 and 2017, the Company was not a party to any ligation that could have a material adverse effect on the Company’s business, financial position, results of operations or cash flows.

v. Other comprehensive income (loss):

The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income". ASC 220 establishes standards for the reporting and display of comprehensive income (loss) and its components. Comprehensive income (loss) generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The accumulated other comprehensive income (loss), net of taxes, relates to a pension liability and foreign currency translation adjustments.

w. Recently adopted accounting pronouncements:

ASC 606 – see Note 2(i).

ASC 718 – see Note 2(o).

In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments for debt prepayment or extinguishment costs, the maturing of a zero coupon bond, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions from certain equity method investees and beneficial interests obtained in a financial asset securitization. ASU 2016-15 designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. The retrospective transition method, requiring adjustment to all comparative periods presented, is required unless it is impracticable for some of the amendments, in which case those amendments would be prospectively as of the earliest date practicable. The Company adopted the standard effective as of January 1, 2018, and the adoption of this standard did not have a material impact on the Company's consolidated financial statements.

In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This standard requires the presentation of the statement of cash flows to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. The standard is effective for fiscal years and the interim periods within those fiscal years beginning after December 15, 2017. The Company adopted the standard retrospectively to all periods presented effective as of January 1, 2018.

In March 2017, FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost under FASB ASC Topic 715, Retirement Benefits. Accordingly, as of January 1, 2017, the Company reports the current service cost component of net periodic benefit cost in Compensation and benefits on the Company's Consolidated Statements of Income, and reports the other components of net periodic benefit recovery as a separate line item outside of Operating income on the Company's Consolidated Statements of Income. These changes in presentation do not result in any changes to net income or earnings per share. Details of the components of net periodic benefit costs are provided in Note 9 (Pensions and employees benefit obligations). The ASU also prospectively restricts capitalization of net periodic benefit costs to the current service cost component when applicable. This restriction has no impact on the Company's financial statements, since the Company does not capitalize any portion of service cost.

x. Recently issued accounting pronouncements:

In February 2016, FASB issued ASU 2016-02-Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of their classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASC 842 supersedes the previous leases standard, ASC 840. The standard is effective on January 1, 2019, with early adoption permitted. The Company adopted the new standard effective January 1, 2019. While the Company is continuing to assess the potential impacts of ASU 2016-02, the Company estimates that the adoption of ASU 2016-02 will result in the recognition of right-of-use assets and lease liabilities for operating leases of approximately $15,733 on its Consolidated Balance Sheets for operation leases and it does not expect an impact on its consolidated statements of operations or debt.

In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. ASU 2016-13 also applies to employee benefit plan accounting, with an effective date of the first quarter of fiscal 2020. The amendments in this update are effective for fiscal years beginning after December 31, 2019, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements, footnote disclosures and employee benefit plans’ accounting.

In August 2018, FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The implementation costs incurred in a hosting arrangement that is a service contract should be presented as a prepaid asset in the balance sheet and expensed over the term of the hosting arrangement to the same line item in the statement of income as the costs related to the hosting fees. The guidance in this ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted including adoption in any interim period. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after adoption. The Company is currently evaluating the impact that the standard will have on its consolidated financial statements and related disclosures.

In August 2018, FASB issued ASU 2018-14—Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 improves disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This standard is effective for fiscal years ending after December 15, 2020, for public business entities. Early adoption is permitted. An entity should apply the amendments in this ASU on a retrospective basis to all periods presented. The Company is currently evaluating the impact that the standard will have on its consolidated financial statements and related disclosures.

Cash and Cash Equivalents and Short Term Investments

12 Months Ended

Dec. 31, 2018

Cash Cash Equivalents And Short Term Investments [Abstract]

Cash and Cash equivalents and Short-term investments

Note 3: Cash and Cash equivalents and Short-term investments

a.

Cash and cash equivalents:

Cash equivalents include items almost as liquid as cash, such as certificates of deposit and time deposits with maturity periods of three months or less when purchased.

	December 31,
	2018		2017
Cash	$	9,197	$	5,522
Money market funds		131,425		73,070
Total cash and cash equivalents	$	140,622	$	78,592

b.

Short-term investments

The Company invests in marketable U.S. Treasury Bills (“T-bills”) that are classified as held-to-maturity securities. The amortized cost and recorded basis of the T-bills are presented as short-term investments.

	December 31,
	2018		2017
Short-term investments	$	105,256	$	104,719

The estimated fair value of our short-term investments as of December 31, 2018 and 2017 was $105,266 and $104,655, respectively.

Receivables and Prepaid Expenses

12 Months Ended

Dec. 31, 2018

Receivables And Prepaid Expenses [Abstract]

Receivables and Prepaid Expenses

Note 4: Receivables and prepaid expenses

The following table sets forth the Company’s receivables and prepaid expenses:

	December 31,
	2018		2017
Advances to and receivables from suppliers	$	4,565	$	2,924
Government authorities		6,106		2,006
Prepaid expenses		3,531		2,890
Others		77		285
	$	14,279	$	8,105

Inventories

12 Months Ended

Dec. 31, 2018

Inventory Disclosure [Abstract]

Inventories

Note 5: Inventories

The following table sets forth the Company’s inventories:

	December 31,
	2018		2017
Raw materials	$	870	$	4,276
Work in process		8,667		8,435
Finished goods		13,018		9,314
	$	22,555	$	22,025

Property and Equipment, Net

12 Months Ended

Dec. 31, 2018

Property Plant And Equipment [Abstract]

Property and Equipment, Net

Note 6: Property and equipment, net

The following table sets forth the Company’s property and equipment, net:

	December 31,
	2018			2017
Cost:
Computers and laboratory equipment	$	12,220		$	10,833
Office furniture		2,308			2,303
Production equipment		1,228			1,222
Leasehold improvements		4,192			3,614
Total cost	$	19,948		$	17,972
Accumulated depreciation and amortization		(11,506	)		(8,941	)
Depreciated cost	$	8,442		$	9,031

Depreciation expense was $1,967, $1,968 and $ 1,673 for the years ended December 31, 2018, 2017 and 2016, respectively.

The Company capitalized software costs according to FASB ASC 350-40, "Accounting for the costs of Computer Software Developed or Obtained for Internal Use". As of December 31, 2018 and 2017, the Company capitalized an accumulated amount of $6,256 and $5,576, respectively. Amortization for the year ended December 31, 2018 and 2017 was $1,486 and $1,226, respectively.

Field Equipment, Net

12 Months Ended

Dec. 31, 2018

Field Equipment [Abstract]

Field Equipment, Net

Note 7: Field equipment, net

The following table sets forth the Company’s field equipment, net:

	December 31,
	2018			2017
Field equipment	$	17,380		$	15,020
Accumulated depreciation		(10,456	)		(5,984	)
Field equipment, net	$	6,924		$	9,036

Depreciation expense was $5,553, $4,483 and $3,248 for the years ended December 31, 2018, 2017 and 2016, respectively. Write downs of $350, $195, and $6,436 were identified for the years ended December 31, 2018, 2017 and 2016, respectively.

The Company made the second generation Optune system available to all patients in the United States in 2016 and manufacturing of the first generation Optune system has been terminated. In 2016, the Company recorded an impairment loss with respect to the write-down of first generation Optune system field equipment in the amount of $6,412 (finished goods and production stage goods in the amount of $4,830 and $1,582, respectively) presented in cost of revenues.

Other Payables and Accrued Expenses

12 Months Ended

Dec. 31, 2018

Payables And Accruals [Abstract]

Other Payables and Accrued Expenses

Note 8: Other payables and accrued expenses

The following table sets forth the Company’s other payables and accrued expenses:

	December 31,
	2018		2017
Employees and payroll accruals	$	16,717	$	13,283
Taxes payable and others		12,263		9,110
Provision for settlement (Note 12)		-		5,500
Deferred revenues		8,840		4,959
Other		32		144
	$	37,852	$	32,996

Employee Benefit Obligations

12 Months Ended

Dec. 31, 2018

Compensation And Retirement Disclosure [Abstract]

Employee Benefit Obligations

Note 9: Employee benefit obligations

The Company sponsors a defined benefit plan (the “Swiss Plan”) for all its employees in Switzerland for retirement benefits, as well as benefits on death or long-term disability. The liability in respect of the Swiss Plan is the projected benefit obligation calculated using the projected unit credit method. The projected benefit obligation as of December 31, 2018 represents the actuarial present value of the estimated future payments required to settle the obligation that is attributable to employee service rendered before that date. Swiss Plan assets are recorded at fair value. Pension expense is presented in the payroll expenses in the various functions in which the employees are engaged. Actuarial gains and losses arising from differences between the actual and the expected return on the Swiss Plan assets are recognized in accumulated other comprehensive income (loss) and amortized over the requisite service period. The Swiss Plan is part of a collective pension foundation managed by a top tier insurance company. The Company’s exposure under the Swiss Plan is insured. The Company has financial exposure under the Swiss Plan only in the event that the insurance company does not meet its obligations. The Company and the employees pay retirement contributions, which are defined as a percentage of the employees’ covered salaries. Interest is credited to the employees’ account at the minimum rate provided in the Swiss Plan, which represents the Swiss Plan’s primary asset. The targeted allocation for these funds is as follows:

Asset Allocation by Category as of December 31, 2018:
Asset Category:	Asset allocation (%)
Debt Securities		28
Real Estate		22
Equity Securities		28
Others		22
Total		100

The following table sets forth the Swiss Plan’s funded status and amounts recognized in the consolidated financial statements for the year ended December 31, 2018 and 2017:

	December 31,
	2018			2017
Change in Benefit Obligation
Projected benefit obligation at beginning of year	$	10,317		$	8,241
Interest cost		64			54
Company service cost		820			878
Employee contributions		486			417
Prior service cost		-			(314	)
Benefits paid		475			341
Actuarial loss		87			700
Projected benefit obligation at end of year	$	12,249		$	10,317
Change in Plan Assets
Fair value of plan assets at beginning of year	$	8,243		$	5,978
Actual return on plan assets		3			882
Employer contributions		729			625
Employee contributions		486			417
Benefits paid		475			341
Fair value of plan assets at end of year	$	9,936		$	8,243
Funded Status at End of year
Excess of obligation over assets	$	(2,313	)	$	(2,074	)
Change in Accrued Benefit Liability
Accrued benefit liability at beginning of year	$	(2,074	)	$	(2,263	)
Company contributions made during year		729			625
Net periodic benefit cost for year		(874	)		(1,036	)
Net decrease (increase) in accumulated other comprehensive loss		(94	)		600
Accrued benefit liability at end of year	$	(2,313	)	$	(2,074	)

	December 31,
	2018			2017
Non - current plan assets	$	9,936		$	8,243
Non - current liability		12,249			10,317
Accrued benefit liability at end of year	$	(2,313	)	$	(2,074	)
Projected Benefit Payments
Projected year 1	$	206		$	166
Projected year 2		205			168
Projected year 3		1,158			172
Projected year 4		195			1,124
Projected year 5		200			163
Projected year 6-10	$	2,859		$	1,053

The fair value of the plan assets is the estimated cash surrender value of the insurance contract at December 31, 2018. The level of inputs used to measure fair value was Level 2.

	Year ended December 31,
	2018			2017
Net Periodic Benefit Cost
Service cost	$	820		$	878
Interest cost (income)		69			62
Expected return on plan assets		(54	)		(42	)
Amortization of prior service costs		65			124
Amortization of transition obligation		(18	)		14
Total net periodic benefit cost	$	882		$	1,036

Weighted average assumptions:
Discount rate as of December 31	0.90%			0.60%
Expected long-term rate of return on assets	0.90%			0.60%
Rate of compensation increase	1.00%			1.00%
Mortality and disability assumptions (*)	BVG 2015 GT			BVG 2015 GT

(*)	Mortality data used for actuarial calculation.

Long-Term Loan, Net of Discount and Issuance Costs

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Long-Term Loan, Net of Discount and Issuance Costs

Note 10: Long-term loan, net of discount and issuance costs

On February 7, 2018, the Company and certain of its subsidiaries entered into a Loan and Security Agreement (“2018 Loan Agreement”) with BioPharma Credit PLC pursuant to which such lender made a term loan to the Company in the principal amount of $150 million (the “2018 Credit Facility”). The term loan, which was drawn in full upon execution of the 2018 Loan Agreement, bears interest at 9.0% per annum, payable quarterly in arrears. The Company used a portion of the proceeds of the 2018 Credit Facility to repay in full the Company’s obligations under its then-existing term loan credit facility and is using the remaining proceeds to fund general corporate purposes.

The 2018 Credit Facility will mature on February 7, 2023, at which time any unpaid principal and accrued unpaid interest in respect of the term loan will be due and payable. The Company may prepay the term loan, in full, at any time. The Company must prepay the term loan (i) in full or in part upon the entry into certain licensing arrangements and (ii) in full in the event of a change of control. In each case, any prepayment (whether permitted or mandatory) is subject to a prepayment premium and/or make-whole payment. The pre-payment fee if the Company prepays outstanding loan amounts prior to February 7, 2021 is 2.0% and is 1.0% if made after the February 7, 2021 but prior to February 7, 2022.

All obligations under the 2018 Credit Facility are guaranteed by the Company’s current and future direct and indirect subsidiaries. In addition, the obligations under the 2018 Credit Facility are secured by a first-priority security interest in substantially all of the property and assets of, as well as the equity interests owned by, the Company and certain of the other guarantors. The 2018 Credit Facility contains other customary covenants.

Total net issuance costs of the 2018 Credit Facility, which were $731 as of December 31, 2018, are presented net of the 2018 Credit Facility proceeds and are amortized to interest expense over the five year term of the loan using the effective interest method.

On February 7, 2018, the Company’s 2015 term loan credit facility was terminated upon the Company’s repayment in full of the term loan issued thereunder. The un-amortized discount in the amount of $1,160 and issuance costs in the amount of $1,399 were fully amortized and included in the Company’s finance expenses in the first quarter of 2018.

Other Long-term Liabilities

12 Months Ended

Dec. 31, 2018

Other Liabilities Disclosure [Abstract]

Other Long-term Liabilities

Note 11: Other long-term liabilities

	December 31,
	2018		2017
Deferred rent liability	$	773	$	746
Leasehold improvements financing and other (see a and b below)		94		128
Unrecognized tax benefits (Note 13e)		103		244
Deferred tax liability		124		-
Term Loan Credit Facility repayment fee (Note 10)		-		619
	$	1,094	$	1,737

(1). In July 2013, the Company entered into a loan agreement with the landlord of its facility in Switzerland whereby the landlord will offer a loan of up to CHF 400 for the purpose of financing leasehold improvements in the facility. As of December 31, 2018 and 2017, the Company received CHF 220 ($232) of this financing. The principal and interest is due in monthly payments from January 1, 2014 through December 31, 2018 and bears an annual interest of 5%. As of December 31, 2018, the loan was fully repaid.

(2). In May 2013, the Company entered into an agreement with the landlord of one of its facilities in the United States and in January 2014, the Company entered into an agreement with a leasing company for an aggregate of $226 for the purpose of financing leasehold improvements in the facility and a lease of machinery, respectively. The loan and interest is due in monthly payments from June 1, 2013 through May 1, 2023 and bears an annual interest of 7%.

The above principal leasehold improvement financing repayments as of December 31, 2018 are as follows:

2019	$	31
2020		29
2021		26
2022		27
2023		12
		125
Less: current portion of long-term loans		(31	)
Long-term loans, net of current portion	$	94

Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

Note 12: Commitments and contingent liabilities

a.

Operating Leases. The facilities of the Company are leased under various operating lease agreements for periods ending no later than 2024. The Company also leases motor vehicles under various operating leases, which expire on various dates, the latest of which is in 2021.

Future minimum lease payments under non-cancelable operating leases as of December 31, 2018, are as follows:

2019	$	3,807
2020		3,053
2021		2,549
2022		2,282
2023		1,530
Thereafter		323
	$	13,544

Lease and rental expense for the years ended December 31, 2018, 2017 and 2016 was $4,033, $3,474, and $2,748, respectively.

As of December 31, 2018 and 2017 the Company pledged bank deposits of $1,143 and $1,038, 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 $1,299 and $1,202, respectively.

b.

Technion Settlement Agreement

In the first quarter of 2018, the Company made the final milestone payment of $5.5 million (the “Milestone Payment”) to the Technion Research and Development Foundation (“Technion”) pursuant to the settlement agreement dated February 10, 2015 (the “Settlement Agreement”). Pursuant to the Settlement Agreement, and in exchange for a release of potential disputes regarding intellectual property developed by our founder and previously assigned to us, the Company was obligated to pay the Milestone Payment to Technion in the quarter following the quarter in which the Company achieved $250.0 million of cumulative net sales (as defined in the Settlement Agreement) (the “Net Sales Milestone”). The Company met the Net Sales Milestone in the fourth quarter of 2017.

c.

Zai License and Collaboration Agreement

On September 10, 2018, the Company entered into a License and Collaboration Agreement (the “Zai Agreement”) with Zai Lab (Shanghai) Co., Ltd. (“Zai”). Under the Zai Agreement, the Company granted Zai exclusive rights to commercialize Optune in the field of oncology in China, Hong Kong, Macau and Taiwan (“Greater China”). The Zai Agreement also established a development partnership for Optune in multiple solid tumor indications. In partial consideration for the license grant to Zai for Greater China, the Company was entitled to a non-refundable, up-front license fee in the amount of $15 million (the “License Fee”). The Agreement also provides for certain development, regulatory and commercial milestone payments totaling up to $78 million. Furthermore, pursuant to the Agreement Zai will pay the Company tiered royalties at percentage rates from 10 up to the mid-teens on the net sales of the licensed products in Greater China. Zai is purchasing licensed products for commercial use exclusively from the Company at the Company’s fully burdened manufacturing cost.

Zai paid the License Fee in the fourth quarter of 2018. Net of withholding taxes, the Company received $12.7 million.

The Company recognizes revenue pursuant to the License Agreement with Zai in accordance with ASC 606, "Revenue Recognition from Customers". The License Fee, net of withholding taxes, is deferred and recognized over related six year performance period. The License Fee will be recognized on a straight-line basis, resulting in revenue of $767 for the year ended December 31, 2018. The deferred portion of the License Fee is presented in the balance sheet as deferred revenues, under Other Payables and Accrued Expenses and Long-term Liabilities, respectively. Revenue from any future milestone payments will be recognized upon the achievement of such milestones, in accordance with ASC 606, “Gain Contingencies". Revenue from any future royalty payments will be recognized in accordance with ASC 606.

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Note 13: Income taxes

a.	Tax provision

The provision (benefit) for income taxes from continuing operations is comprised of:

Income (loss) before income taxes:

	Year ended December 31,
	2018			2017			2016
United States (U.S.)	$	(114,890	)	$	(77,654	)	$	(80,972	)
Non-U.S.		68,948			29,157			(40,492	)
	$	(45,942	)	$	(48,497	)	$	(121,464	)

Income taxes expense (benefit):

	Year ended December 31,
	2018		2017			2016
Current:
U.S.	$	6,701	$	8,491		$	6,501
Non-U.S.		10,568		5,028			3,863
Total current		17,269		13,519			10,364
Deferred:
U.S.	$	-	$	(3	)	$	1
Non-U.S.		348		(351	)		16
Total deferred		348		(354	)		17
Total income taxes provision	$	17,617	$	13,165		$	10,381

b.

Theoretical tax

For purposes of comparability, the Company used the notional U.S. federal income tax rate of 21% for the 2018 tax year and 35% for the 2017 and 2016 tax years when presenting the Company's reconciliation of the income tax provision. The Company is a resident taxpayer in Jersey and as such is not generally subject to Jersey tax on remitted foreign earnings. A reconciliation of the provision for income taxes compared with the amounts at the notional federal statutory rate was:

	Year ended December 31,
	2018			2017			2016
U.S statutory income taxes rate		21.0	%		35.0	%		35.0	%
Non-deductible expenses		(2.2	)		(6.8	)		(2.5	)
Foreign taxes rate differential		13.2			15.1			(14.2	)
Change in valuation allowance (1)		(62.3	)		(11.9	)		(30.0	)
State income taxes (1)		(4.5	)		18.7			2.3
Share based compensation		(4.5	)		(4.5	)		1.2
Change in unrecognized taxes expense		0.3			(0.8	)		(0.7	)
Other (1)		0.7			(71.9	)		0.4
Effective taxes rate		(38.3	)%		(27.1	)%		(8.5	)%

_____________________________

(1)

For additional information, see the table below reflecting the net impact of the TCJA.

The Company's tax rate is affected by the tax rates in the jurisdictions outside the U.S. in which the Company operates. The jurisdictional location of earnings is a significant component of our effective tax rate as the tax rates outside of the U.S. generally differ from the U.S. tax rate of 21% for the 2018 tax year and 35% for the 2017 and 2016 tax years, and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance.

In 2017, the Tax Cuts and Jobs Act of 2017 (the “TCJA”) was signed into law in the U.S. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017. In accordance with ASC 740, the Company recorded $34.8 million of deferred tax expense in connection with the remeasurement of certain deferred tax assets and liabilities. This was fully offset by a valuation allowance. Accordingly, there was no net impact on the Company’s income tax expense for the year ended December 31, 2017. The Company’s subsidiary in the United States does not have any foreign subsidiaries and, therefore, the remaining provisions of the TCJA have no material impact on the Company's results of operations. December 22, 2018 marked the end of the measurement period for purposes of SAB 118, and the Company concluded that no change was required to its initial assessment.

The table below reflects the net impact of the TCJA:

	Year ended December 31, 2017
	ETR before TCJA			US Tax Cuts & Jobs Act Impact			Reported ETR
U.S statutory income taxes rate		35.0	%		0.0	%		35.0	%
Non-deductible expenses		(6.8	)		0.0			(6.8	)
Foreign taxes rate differential		15.1			0.0			15.1
Change in valuation allowance		(83.4	)		71.5			(11.9	)
State income taxes		12.8			5.9			18.7
Share based compensation		2.0			(6.5	)		(4.5	)
Change in unrecognized taxes expense		(0.9	)		0.1			(0.8	)
Other		(0.9	)		(71.0	)		(71.9	)
Effective taxes rate		(27.1	)%		0.0	%		(27.1	)%

c. Deferred income tax

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,
	2018			2017
Deferred tax assets:
Allowance for doubtful accounts	$	-		$	6,797
Revenue recognition		99,316			60,099
Net operating loss carryforwards		843			972
Share based compensation		10,886			7,544
Deferred revenue		1,643			1,340
Other temporary differences		1,384			1,147
Total gross deferred taxes assets	$	114,072		$	77,899
Less: valuation allowance		(112,360	)		(75,804	)
Total deferred taxes assets	$	1,712		$	2,095
Deferred tax liabilities:
Fixed assets		1,427			1,486
Total gross deferred taxes liabilities	$	1,427		$	1,486

Net deferred taxes assets	$	285		$	609

d. Carryforward loss:

As of December 31, 2018, the Company has $3.2 million of net operating loss carry forwards (NOLs) available for utilization in Luxembourg in future years.

e. Uncertain tax benefits:

A reconciliation of the beginning and ending balances of uncertain tax benefits is as follows:

	December 31,
	2018			2017		2016
Balance at beginning of the year	$	2,827		$	2,400	$	1,565
Additions (reductions) for taxes positions related current year		(141	)		55		1,088
Additions (reductions) for taxes positions related to prior years		(2,583	)		372		58
Additions (reductions) related to lapse of applicable statute of limitations		-			-		(311	)
Balance at the end of the year	$	103		$	2,827	$	2,400

The Company recognizes interest and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2018, 2017 and 2016, the Company accrued $2, $ 95 and $31, respectively, for interest and penalties expenses related to uncertain tax positions.

The Company's Israeli subsidiary concluded a federal income tax audit for the tax year 2013-2016. There are no other ongoing income tax audits.

Share Capital

12 Months Ended

Dec. 31, 2018

Share Based Compensation Allocation And Classification In Financial Statements [Abstract]

Share Capital

Note 14: Share capital

Share capital is composed as follows:

	Issued and outstanding
	Number of shares
	December 31,
	2018		2017
Ordinary shares no par value		93,254,185		89,478,032

a. Warrants:

As part of the Series D and E Convertible Preferred share investment agreements, the investors received warrants to purchase ordinary shares. The Company accounted for these warrants as equity instruments based on the guidance of ASC 815, “Derivatives and Hedging”, ASC 480-10, “Distinguishing Liabilities from Equity”, its related FASB staff positions, ASC 815-40 “Contracts in Entity’s Own Stock” and the AICPA Technical Practice Aid for accounting for preferred shares and warrants, including the roadmap for accounting for freestanding financial instruments indexed to, and potentially settled in, a company’s own stock.

Significant terms of the warrants to purchase ordinary shares that were issued to purchasers of the Series D and E Convertible Preferred shares are as follows as of December 31, 2018 and 2017:

	Warrants for ordinary shares
	December 31,				Exercise price
Expiration date	2018		2017		per share
January 22, 2018		-		203,241	$	3.59
July 21, 2018		-		304,863	$	3.59
		-		508,104

In the years ended December 31, 2018 and 2017, warrants to purchase 504,225 and 1,418,711 ordinary shares, respectively, were cashlessly exercised, resulting in the issuance of 437,081 and 803,138 ordinary shares, respectively. Also, in the year ended December 31, 2018 and 2017 warrants to purchase 3,879 and 6,498 ordinary shares, respectively, with an exercise price of $3.59 per share were exercised for cash.

Pursuant to a credit facility that the Company entered into in January 2013 (the “Credit Agreement”) which was fully paid in December 2013, the Company issued to the lenders under the Credit Agreement 975,644 warrants to purchase Series H Convertible Preferred shares at an exercise price of $18.77 per share. The warrants were exercised on a cashless basis in January 2016, resulting in the issuance of 315,155 ordinary shares.

b. Share option plans and ESPP:

Until the IPO in October 2015, the Company maintained and granted option awards under the 2003 Share Option Plan (the “2003 Plan”) and the 2013 Equity Incentive Share Option Plan (the “2013 Plan”) for the Company’s officers, directors, employees and advisors. The 2003 Plan and the 2013 Plan terminated as of the IPO as to future awards, but they continue to govern option awards previously granted thereunder.

In September 2015, the Company adopted 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 (“RSUs”), 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 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 grants. RSUs granted under the 2015 Plan vest in equal installments over a three-year period.

On December 31, 2018, in accordance with the terms of the 2015 Plan, the number of shares available for issuance under the 2015 Plan automatically increased by 4% of the Company’s outstanding ordinary shares as of December 30, 2018. As a result, the number of shares available for issuance under the 2015 Plan increased from 23,307,208 shares to 27,035,515 shares. As of December 31, 2018, 13,843,105 ordinary shares are available for grant under the 2015 Plan.

In September 2015, the Company adopted an ESPP to encourage and enable eligible employees to acquire ownership of the Company’s ordinary shares purchased through accumulated payroll deductions on an after-tax basis. The ESPP is intended to be an “employee stock purchase plan” within the meaning of Section 423 of the Code and the provisions of the ESPP will be construed in a manner consistent with the requirements of such section. The Company began its offerings under the ESPP on August 1, 2016. The Company issued 347,193 ordinary shares for the plan periods ended through December 31, 2018.

On December 31, 2018, in accordance with the terms of the ESPP, the number of shares available for purchase by eligible employees who participate in the ESPP automatically increased by 1% of the Company’s outstanding ordinary shares outstanding on December 30, 2018. As of December 31, 2018, 3,122,410 ordinary shares are available for offering under the ESPP.

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

	Year ended December 31,
	2018	2017	2016
Stock Option Plans
Expected term (years)	5.50-6.25	5.50-6.25		6.25
Expected volatility	52%-55%	57%-59%	58%-62%
Risk-free interest rate	2.70%-2.99%	1.97%-2.23%	1.23%-1.88%
Dividend yield	0.00%	0.00%	0.00%
ESPP
Expected term (years)	0.50	0.50	0.42
Expected volatility	45%-53%	76%-82%	70%
Risk-free interest rate	1.61%-2.14%	0.62%-1.13%	0.4%
Dividend yield	0.00%	0.00%	0.00%

A summary of the status of the Company’s options to purchase ordinary shares as of December 31, 2018 and changes during the year ended on that date is presented below:

	Year ended December 31, 2018
	Number of options			Weighted average exercise price		Aggregate intrinsic value
Outstanding at beginning of year		14,806,027		$	10.64
Granted		2,520,502		$	23.73
Exercised		(2,693,236	)	$	6.89
Forfeited and cancelled		(195,078	)	$	15.09
Outstanding at end of year		14,438,215		$	13.56	$	287,706
Exercisable options		6,090,628		$	11.04	$	136,695

A summary of the status of the Company’s RSUs as of December 31, 2018 and changes during the year ended on that date is presented below:

	Year ended December 31, 2018
	Number of RSUs			Weighted average grant date fair value price		Aggregate intrinsic value
Unvested at beginning of year	$	1,651,219		$	9.66
Granted		535,220			23.32
Vested		(556,563	)		9.90
Forfeited and cancelled		(16,679	)		15.79
Unvested at end of year		1,613,197		$	14.04	$	54,010

The total equity-based compensation expense related to all of the Company’s equity-based awards recognized for the years ended December 31, 2018, 2017 and 2016, was comprised as follows:

	Year ended December 31,
	2018		2017		2016
Cost of revenues	$	1,261	$	467	$	623
Research, development and clinical trials		4,709		3,587		3,155
Sales and marketing		7,393		3,784		5,111
General and administrative		26,483		19,278		12,552
Total share-based compensation expense	$	39,846	$	27,116	$	21,441

As of December 31, 2018, there were unrecognized compensation costs of $43,315, which are expected to be recognized over a weighted average period of approximately 2.60 years.

The weighted average grant date exercise price of the Company’s options granted during the years ended December 31, 2018, 2017 and 2016 were $23.73, $10.53 and $7.37 per share, respectively.

The weighted average grant date fair values of the Company’s options forfeited and cancelled during the years ended December 31, 2018, 2017 and 2016 were $15.09, $12.54 and $9.72, respectively.

The aggregate intrinsic values for the options exercised during the years ended December 31, 2018, 2017 and 2016 were $57,813, $17,945 and $7,637, respectively. The aggregate intrinsic value is calculated as the difference between the per share exercise price and the deemed fair value of the Company’s ordinary shares for each share subject to an option multiplied by the number of shares subject to options at the date of exercise. The Company deemed the fair value of the Company’s ordinary shares to be $33.48, $20.20 and $7.85 per share as of December 31, 2018, 2017, and 2016, respectively.

The options outstanding as of December 31, 2018 are as follows:

Exercise price	Number of options outstanding		Weighted average remaining contractual term		Number of options exercisable		Weighted average remaining contractual term
$			(years)				(years)
0.23 - 1.00		46,045		1.28		46,045		1.28
1.01 - 7.00		1,741,728		3.43		1,664,228		3.23
7.01 - 11.00		3,358,859		7.16		1,477,492		5.91
11.01 - 16.00		4,725,204		7.43		1,745,554		6.76
16.01 - 20.00		298,637		8.57		71,502		8.57
20.01 - 27.50		3,661,651		8.57		1,073,462		6.98
27.51 - 35.00		606,091		9.53		12,345		9.42
		14,438,215		7.27		6,090,628		5.61

Financial Expenses, Net

12 Months Ended

Dec. 31, 2018

Interest And Debt Expense [Abstract]

Financial Expenses, Net

Note 15: Financial expenses, net

The following table sets forth the Company’s total financial expenses, net:

	Year ended December 31,
	2018			2017			2016
Financial expenses:
Interest expense	$	(13,491	)	$	(10,261	)	$	(5,937	)
Amortization of credit facility costs		(2,777	)		(1,111	)		(667	)
Foreign currency transaction losses		(398	)		-			(396	)
Others		(242	)		(321	)		(318	)
	$	(16,908	)	$	(11,693	)	$	(7,318	)
Financial income:
Amortization of treasury bills premium	$	1,986		$	859		$	512
Foreign currency transaction gains		-			549			-
Interest income		2,652			1,116			659
	$	4,638		$	2,524		$	1,171
Total financial expenses, net	$	(12,270	)	$	(9,169	)	$	(6,147	)

Basic and Diluted Net Loss Per Share

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Basic and Diluted Net Loss Per Share

Note 16: Basic and diluted net loss per share

The following table sets forth the computation of the Company’s basic and diluted net loss per ordinary share:

	Year ended December 31,
	2018			2017			2016
Net income (loss) attributable to ordinary shares as reported	$	(63,559	)	$	(61,662	)	$	(131,845	)
Shares used in computing net income (loss) per ordinary share, basic and diluted		91,828,043			88,546,719			85,558,448
Net income (loss) per ordinary share, basic and diluted	$	(0.69	)	$	(0.70	)	$	(1.54	)

For the years ended December 31, 2018, 2017 and 2016, all outstanding preferred shares, options and warrants have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive.

Subcontractor

12 Months Ended

Dec. 31, 2018

Subcontractor [Abstract]

Subcontractor

Note 17: Subcontractor

In certain markets and for certain key components, the Company is currently dependent upon sole source suppliers used in its delivery systems. The Company’s management believes that in most cases other suppliers could provide similar components at comparable terms. A change of suppliers which requires FDA or other regulatory approval, however, could cause a material delay in manufacturing and a possible loss of sales, which could adversely affect the Company’s operating results and financial position.

Supplemental Information

12 Months Ended

Dec. 31, 2018

Geographic Areas Long Lived Assets [Abstract]

Supplemental Information

Note 18: Supplemental information

The following table presents long-lived assets by location:

	December 31,
	2018		2017		2016
United States	$	8,289	$	10,372	$	11,981
Switzerland		2,513		5,114		4,346
Israel		2,236		2,081		1,915
Germany		1,054		190		49
Others		1,274		310		329
	$	15,366	$	18,067	$	18,620

The Company’s net revenues by geographic region, based on the patient’s location are summarized as follows:

	Year ended December 31,
	2018		2017		2016
United States	$	168,414	$	134,688	$	72,771
EMEA (*)		73,304		42,035		10,028
Japan		6,351		303		89
	$	248,069	$	177,026	$	82,888

(*) including Germany	$	67,849	$	40,215	$	9,799

Selected Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2018

Selected Quarterly Financial Information [Abstract]

Selected Quarterly Financial Information (Unaudited)

Note 19: Selected quarterly financial information (Unaudited)

The following table sets forth selected financial information for the Company:

	2018
	Three months ended
	December 31			September 30			June 30			March 31
Net revenues	$	69,674		$	64,756		$	61,514		$	52,125
Gross profit	$	46,646		$	45,807		$	41,681		$	33,887
Operating income (loss)	$	(8,664	)	$	(5,246	)	$	(7,085	)	$	(12,677	)
Net income (loss)	$	(15,631	)	$	(11,694	)	$	(15,510	)	$	(20,724	)
Basic and diluted net income (loss) per ordinary share	$	(0.17	)	$	(0.13	)	$	(0.17	)	$	(0.23	)
Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share		93,083,298			92,911,375			91,331,862			89,985,612

	2017
	Three months ended
	December 31			September 30			June 30			March 31
Net revenues	$	53,661		$	50,109		$	38,376		$	34,880
Gross profit	$	38,021		$	34,956		$	25,224		$	23,216
Operating income (loss)	$	(4,506	)	$	(5,919	)	$	(15,530	)	$	(13,373	)
Net income (loss)	$	(10,945	)	$	(11,498	)	$	(21,174	)	$	(18,045	)
Basic and diluted net income (loss) per ordinary share	$	(0.12	)	$	(0.13	)	$	(0.24	)	$	(0.21	)
Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share		89,389,364			89,125,646			88,218,868			87,452,983

	2016
	Three months ended
	December 31			September 30			June 30			March 31
Net revenues	$	30,242		$	21,674		$	17,919		$	13,053
Gross profit	$	19,268		$	10,556		$	1,710		$	5,071
Operating income (loss)	$	(17,877	)	$	(28,265	)	$	(37,237	)	$	(31,938	)
Net income (loss)	$	(22,168	)	$	(33,628	)	$	(40,612	)	$	(35,437	)
Basic and diluted net income (loss) per ordinary share	$	(0.26	)	$	(0.39	)	$	(0.48	)	$	(0.42	)
Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share		86,760,316			85,774,874			85,274,683			84,397,164

Subsequent Event

12 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

Subsequent Event

Note 20: Subsequent Event.

The Company has been informed that, on February 3, 2019, a civil claim was filed in the District Court in Haifa, Israel, by Ofir Paz (“Paz”), a former member of the Company’s Board of Directors, and EES Investments Ltd., a company wholly owned by Paz (together with Paz, “Plaintiff”) against the Company and Prof. Yoram Palti. Plaintiff claims that he is entitled to 210,000 ordinary shares pursuant to an alleged 2003 verbal agreement between Plaintiff and Prof. Palti, who was also a member of the Company’s Board of Directors at that time, for Plaintiff’s contribution to the advancement of the Company’s business and the consummation of a third party investment in the Company. Plaintiff is asking the court to issue an order (i) providing that he is the holder of 210,000 ordinary shares of the Company, or alternatively (ii) providing that he is entitled to receive from the Company and Prof. Palti 210,000 shares of the Company, and (iii) ordering that the Company’s register of shareholders be amended to reflect his ownership of such shares.

To date, the claim has not been duly served with us. We believe that the complaint is without merit and plans to defend against this claim vigorously. We have not accrued any amounts in respect of these claims, as a liability is not probable and the amount of any potential liability cannot be reasonably estimated.

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Significant Accounting Policies [Line Items]

Use of Estimates

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, revenue recognition and the estimations required in accrual base accounting, 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.

Financial Statements in U.S. Dollars

b. Financial statements in U.S. dollars:

The accompanying financial statements have been prepared in U.S. dollars in thousands, except for share and per-share data.

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 U.S. dollar is the currency of the primary economic environment in which NovoCure Limited and certain subsidiaries operate. The Company’s reporting currency is U.S. dollars.

Transactions and balances denominated in U.S. dollars are presented at their original amounts. Monetary accounts maintained in currencies other than the U.S. dollar are re-measured into dollars in accordance with Accounting Standards Codification (ASC) 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.

For a subsidiary whose functional currency has been determined to be its local currency, assets and liabilities are translated at year-end exchange rates and statement of operations items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders' equity.

Principles of Consolidation

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.

Cash Equivalents

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.

Short-term Investments and Restricted Cash

e. Short-term investments and restricted cash:

1. Short-term investments:

The Company accounts for investments in debt securities in accordance with ASC 320, “Investments-Debt and Equity Securities.” Management determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such determinations at each balance sheet date. For the years ended December 31, 2018 and 2017, all securities are classified as held-to-maturity since the Company has the intent and ability to hold the securities to maturity and, accordingly, debt securities are stated at amortized cost.

The amortized cost of held-to-maturity securities is adjusted for amortization of premiums and accretion of discounts to maturity and any other than temporary impairment losses. Such amortization and interest are included in the consolidated statement of operations as financial income or expenses, as appropriate.

For the three years ended December 31, 2018, no impairment losses have been identified.

2. Restricted cash:

The Company has restricted cash used as security for the use of Company credit cards, presented in short-term assets. Additionally, the Company has pledged bank deposits to cover bank guarantees related to facility rental agreements, fleet lease agreements and customs payments presented in other long-term assets (see Note 12).

Trade Receivables

f. Trade receivables:

The Company’s trade receivables balance contains billed and unbilled commercial activities. As needed, the Company records an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. The Company periodically reviews its customers’ credit risk and payment history. To date, the Company has not experienced any credit losses related to counter-party risk.

Inventories

g. Inventories:

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. The Company regularly evaluates its ability to realize the value of inventory. If the inventories are deemed damaged, if actual demand for the Company’s delivery systems deteriorates, or if market conditions are less favorable than those projected, inventory write-offs may be required.

Inventory write-offs of $684, $489 and $774, respectively, were recorded for the years ended December 31, 2018, 2017 and 2016.

Property and Equipment

h. Property and equipment:

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates:

		%
Computers and laboratory equipment		15 - 33
Office furniture		6 - 33
Production equipment		20
Leasehold improvements		Over the shorter of the term of the lease or its useful life

Impairment of Long-Lived Assets

j. Impairment of long-lived assets:

The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360-10, “Property, Plant and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. During the three years ended December 31, 2018, no impairment losses have been identified other than the impairment of field equipment described below in Note 7.

Other Long-Term Assets

k. Other long-term assets:

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

Revenue Recognition