NovoCure LtdNVCR

NovoCure Ltd Commitments Disclosure

10-KFiled Feb 26, 20262 min read
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 2044. As of December 31, 2025. 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 2030.
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, 2025, are as follows:
December 31,
2025
Future minimum lease payments:
2026$12,120 
202711,491 
20288,893 
20295,313 
20305,019 
Thereafter19,874 
Total future minimum lease payments$62,710 
Less imputed interest(9,404)
Net present value of future minimum lease payments$53,306 
Current year end
Short-term lease liabilities$11,659 
Long-term lease liabilities41,647 
Net present value of future minimum lease payments$53,306 
Weighted average of remaining operating lease term (years)7.10
Weighted average of operating lease discount rate5.10 %
Lease and rental expense for the years ended December 31, 2025, 2024 and 2023 was $12,038, $9,244, and $8,196, respectively.
b.    Bank guarantee and pledges
As of December 31, 2025 and 2024 the Company pledged bank deposits of $5,114 and $4,909, 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 $5,554 and $5,285, respectively.
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") to market the Company's Products in China, Hong Kong, Macau and Taiwan ("Greater China"). Under the Zai Agreement, the Company granted Zai exclusive rights to commercialize the Company's Products in the field of oncology in Greater China. The Zai Agreement also established a development
partnership for the Company's Products 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.
d.    Purchase Obligations
As of December 31, 2025, the Company has $38,944 in purchase obligations with certain of its suppliers.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 27, 2025
2023Feb 22, 2024
2022Feb 23, 2023

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

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