Commitments and contingent liabilities

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

a.Operating leases

The facilities of the Company are leased under various operating lease agreements for periods ending no later than 2044. The Company also has the option to extend the term of certain facility lease agreements and these are included in the calculation of right-of-use assets. The Company also leases motor vehicles under various operating leases, which expire on various dates, the latest of which is in 2025.

Under ASC 842, all leases with durations greater than 12 months, including non-cancelable operating leases, are recognized on the balance sheet. The aggregated present value of lease payments is recorded as a long-term asset titled right-of-use assets. The corresponding lease liabilities are split between other payables and long-term lease liabilities, and as of December 31, 2022, are as follows:


	December 31,
	2022
Future minimum lease payments:
2023	$	6,228
2024	5,254


2025	4,484
2026	4,085
2027	3,272
Thereafter	5,089
Total future minimum lease payments	$	28,412
Less imputed interest	(3,846)
Net present value of future minimum lease payments	$	24,566

Current year end
Short-term lease liabilities	$	5,804
Long-term lease liabilities	18,762
Net present value of future minimum lease payments	$	24,566

Weighted average of remaining operating lease term (years)	5.66

Weighted average of operating lease discount rate	5.38		%

Lease and rental expense for the years ended December 31, 2022, 2021 and 2020 was $7,108, $7,349, and $5,950, respectively.

b. Bank guarantee and pledges

As of December 31, 2022 and 2021 the Company pledged bank deposits of $2,296 and $2,350, 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 $2,459 and $2,698, respectively.

c. Senior secured revolving credit facility

On November 6, 2020, the Company entered into a new three-year $150,000 senior secured revolving credit facility with a syndicate of relationship banks (the "Credit Facility"). The Company may, subject to certain conditions and limitations, increase the revolving credit commitments outstanding under the revolving credit facility or incur new incremental term loans in aggregate principal amount not to exceed $250.0 million in total.

The commitments under the Credit Facility are guaranteed by certain of the Company's subsidiaries and secured by a first lien on the Company's and certain of the Company's subsidiaries’ assets. Outstanding loans will bear interest per annum at a sliding scale based on the Company's secured leverage ratio from 2.75% to 3.25% above the applicable interbank borrowing reference rate for the currency in which the loan is denominated. Additionally, the facility contains a fee for the unused revolving credit commitments at a sliding scale based on the Company's secured leverage ratio from 0.35% to 0.45%. The Credit Facility contains financial covenants requiring maintenance of a minimum fixed charge coverage ratio and specifying a maximum senior secured net leverage ratio, as well as customary events of default which include a change of control.

As of December 31, 2022, the Company had no outstanding balance borrowed under the Credit Facility.

On February 17, 2023, the Company gave irrevocable notice to the administrative agent under the Credit Facility that the Company terminated all commitments, effective February 22, 2023. This effectively terminated the Credit Facility, as the Company's ability to borrow and the Company's obligations to comply with all covenants ended on such date. The liens and guaranties in favor of the lenders are released. There was no early termination fee payable and as of February 22, 2023 the Company had no outstanding balance borrowed under the Credit Facility.

d. Zai License and Collaboration Agreement

On September 10, 2018, the Company entered into the Zai Agreement. 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 $15,000 (the "License Fee"). The Zai Agreement also provides for certain development, regulatory and commercial milestone payments totaling up to $78,000. Furthermore, pursuant to the Zai 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.

The Company recognizes revenue pursuant to the License Agreement with Zai in accordance with ASC 606, "Revenue Recognition from Customers." The License Fee is deferred and recognized over related six year performance period commencing September 10, 2018 ("Zai Performance Period"). Revenue from commercial milestone payments will be recognized upon the achievement of such milestones and future clinical or regulatory milestone payments will be recognized in a straight line over the applicable performance period, in accordance with ASC 606. Revenue from royalty payments are recognized in accordance with ASC 606 in the period accrued. Revenues from sales of product or rendering services are recognized upon shipping the products or rendering the services and satisfying the performance obligation.

During the year ended December 31, 2020, the Company triggered an aggregate $10,000 of milestone payments, which, with the License Fee, are deferred and recognized over the remainder of the Zai Performance Period ending in September 2024 on a straight-line basis, resulting in revenue of $4,389 $6,308 and $3,981 for the years ended December 31, 2022, 2021 and 2020, respectively.