UNITED STATES
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Nova Ltd.
(Translation of Registrant’s name into English)
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(Jurisdiction of incorporation or organization)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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The
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3A. |
Selected Financial Data |
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3B. |
Capitalization and Indebtedness |
1 |
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3C. |
Reasons for the Offer and Use of Proceeds |
1 |
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3D. |
Risk Factors |
1 |
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39 | ||
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4.A |
History and Development of the Company |
39 |
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4.B |
Business Overview |
40 |
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4.C |
Organizational Structure |
53 |
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4.D |
Property, Plant and Equipment |
53 |
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5.A |
Operating Results |
60 |
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5.B |
Liquidity and Capital Resources |
62 |
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5.C |
Research and Development, Patents and Licenses, etc. |
63 |
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5.D |
Trend Information |
66 |
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5.E |
Critical Accounting Estimates |
66 |
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68 | ||
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6.A |
Directors and Senior Management |
68 |
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6.B |
Compensation |
73 |
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6.C |
Board Practices |
77 |
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6.D |
Employees |
85 |
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6.E |
Share Ownership |
86 |
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6.F |
Disclosure of Registrant’s Action to Recover Erroneously Awarded Compensation.
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87 |
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7.A |
Major Shareholders |
88 |
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7.B |
Related Party Transactions |
89 |
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7.C |
Interest of Experts and Counsel |
90 |
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91 | ||
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8.A |
Consolidated Statements and Other Financial Information |
91 |
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8.B |
Significant Changes |
91 |
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92 | ||
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9.A |
Offer and Listing Details |
92 |
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9.B |
Plan of Distribution |
92 |
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9.C |
Markets |
92 |
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9.D |
Selling Shareholders |
92 |
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9.E |
Dilution |
92 |
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9.F |
Expenses of the Issue |
92 |
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92 | ||
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10.A |
Share Capital |
92 |
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10.B |
Memorandum and Articles of Association |
92 |
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10.C |
Material Contracts |
92 |
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10.D |
Exchange Controls |
93 |
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10.E |
Taxation |
93 |
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10.F |
Dividends and Paying Agents |
112 |
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10.G |
Statements by Experts |
112 |
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10.H |
Documents on Display |
112 |
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10.I |
Subsidiary Information |
112 |
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10.J |
Annual Report to Security Holders |
112 |
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113 | ||
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Impact of Currency Fluctuation |
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• |
Increased cybersecurity threats and more sophisticated computer crime
could disrupt our business. |
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We depend on international sales, which expose us to foreign political
and economic risks. |
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We are subject to laws and regulations that could restrict our operations
such as economic sanctions and export restrictions. |
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Changes in global trade policies and other factors beyond our control
may adversely impact our business, financial condition and results of operations. |
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Changes in the U.S. taxation of international business activities
or the adoption of other tax reform policies could materially impact our business, results or operations and financial condition.
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We may be affected by instability in the global economy and by financial
turmoil. |
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Because we derive a significant portion of our revenues from sales
in Asia, our sales could be hurt by instability of Asian economies. |
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Our business is subject to risks related with doing business in China.
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Because of the technical nature of our business, our intellectual
property is extremely important to our business, and our inability to protect our intellectual property could harm our competitive position.
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There has been litigation involving intellectual property rights
in the semiconductor and related industries, and similar litigation could force us to divert resources to defend against such litigation
or deter our customers from purchasing our systems. |
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We may incorporate open-source technology in some of our software
and product, which may expose us to liability and have a material impact on our product development and sales. |
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We may use artificial intelligence (“AI”) technologies
which may expose us to liability and have a material impact on our product development. |
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We operate in an extremely competitive market, and if we fail to
compete effectively, our revenues and market share will decline. |
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If we do not respond effectively and on a timely basis to rapid technological
changes, our ability to attract and retain customers could be diminished, which would have an adverse effect on our sales and ability
to remain competitive. |
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The ongoing consolidation in our industry may harm us if our competitors
are able to offer a broader range of products and greater customer support than we can offer or if our main suppliers cease delivery of
important component as a result of being acquired by a larger company. |
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The markets we target are cyclical and it is difficult to predict
the length and strength of any downturn or expansion period. |
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Our operations may be delayed or interrupted and our business could
suffer if we violate environmental, safety and health, or ESH, regulations. |
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We recently implemented a new ERP system, and challenges relating
to the implementation and operation of our new system could negatively impact our business and operations. |
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Pricing and demand for our specific product lines could substantially
reduce our sales. |
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We depend on a small number of large customers, and the loss of one
or more of them could significantly lower our revenues. |
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Our inability to significantly reduce spending during a protracted
slowdown in the semiconductor industry could reduce our prospects of achieving continued profitability. |
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There can be no assurance that revenues from future products or product
enhancements will be sufficient to recover the development costs. |
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New product lines that we may introduce in the future may contain
defects, which will require us to allocate time and financial resources to correct. |
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If any of our systems fail to meet or exceed our internal quality
specifications, we cannot ship them until such time as they have met such specifications. |
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Our dependence on a single manufacturing facility per product line
magnifies the risk of an interruption in our production capabilities. |
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Our lease agreements for our Manufacturing Facilities include provisions
that exempt the landlord and others from liability for damages to our Manufacturing Facilities. |
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Shipment changes or cancellation may render our backlog not a reliable
indicator of actual sales and financial results. |
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We may not be able to successfully complete and integrate current
and/or future acquisitions. |
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We depend on continuous cooperation with Process Equipment Manufacturers
(“PEMs”) to enable sales of our systems which are integrated with the process equipment. |
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Some of our commercial agreements with PEMs and customers may include
exclusivity provisions and limitations on the use of certain intellectual property which could limit or prevent future business relationships
with third parties. |
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We depend on a limited number of suppliers, and in some cases a sole
supplier. |
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The disclosure rules regarding the use of conflict minerals may affect
our relationships with suppliers and customers. |
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Our lengthy sales cycle increases our exposure to customer delays
in orders, which may result in obsolete inventory and volatile quarterly revenues. |
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Our inability to attract, recruit, retain highly skilled key personnel.
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Conditions in Israel, including Israel’s conflicts with
certain parties in the region, as well as political and economic instability, may adversely affect our business, our results of operations
and our ability to raise additional funds. |
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Our convertible senior notes due 2030 may impact our financial results,
dilute existing shareholders, create downward pressure on the price of our ordinary shares, and restrict our ability to take advantage
of future opportunities. |
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Our capped call transactions may affect the value of our debt and
ordinary shares. |
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Currency fluctuations could harm our profit margins. |
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We received certain research and development grants, which could
impose restrictions on our ability to use technology developed under these programs. |
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Certain shareholders may control the outcome of matters submitted
to a vote of our shareholders, including the election of directors. |
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The market price of our ordinary shares may be affected by a limited
trading volume and may fluctuate significantly. |
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We may be classified as a “passive foreign investment company”
for U.S. income tax purposes, which could have significant and adverse tax consequences to U.S. shareholders. |
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The rights and responsibilities of our shareholders are governed
by Israeli law and differ in some respects from the rights and responsibilities of shareholders under U.S. law. |
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Our shares are listed for trade on more than one stock exchange. |
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As a foreign private issuer, we are subject to reporting and corporate governance requirements that differ
from those applicable to U.S. domestic companies, and the loss of this status could result in significant additional costs and expenses.
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instability in political or economic conditions, including but
not limited to inflation, recession, foreign currency exchange restrictions and devaluations, restrictive governmental controls on the
movement and repatriation of earnings and capital, and actual or anticipated military or political conflicts, particularly in emerging
markets, including but not limited to, rising inflation and elevated U.S. budget deficits and overall debt levels, can put upward pressure
on interest rates and could be among the factors that could lead to higher interest rates in the future. Higher interest rates could adversely
affect our overall business or reduce our liquidity. |
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intergovernmental conflicts or actions, including but not limited
to armed conflict, trade wars and acts of terrorism or war, including the current war between Russia and the Ukraine, as well as the growing
tensions between Taiwan and China and the Chinese actions in the South China Sea. |
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In October 2025, a ceasefire agreement was reached between Israel and Hamas, resulting in a cessation of
active hostilities between these parties. However, the situation remains volatile, and there is still a risk of renewed escalation or
spillover involving other parties in the region. As a result, we could experience disruptions in our business or business of our partners,
customers, or the economy as a whole, any of which could adversely affect and could materially adversely impact our business, results
of operations, and overall financial condition in future periods. |
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interruptions to the Company’s business with its largest customers, distributors and suppliers resulting
from but not limited to, strikes, shortage in raw materials and subcomponents due to geopolitical situation and financial instability.
For instance, trade restrictions, changes in tariffs and import and export license requirements could adversely affect our ability to
sell our products in the countries adopting or changing those restrictions, tariffs or requirements. This could reduce our sales by a
material amount. |
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trade protection measures, such as tariff increases, and import and
export licensing and control requirements; |
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potentially negative consequences from changes in tax laws;
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difficulties associated with the Chinese legal system, including
increased costs and uncertainties associated with enforcing contractual obligations in China; |
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historically, lower protection of intellectual property rights;
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changes and volatility in currency exchange rates; |
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unexpected or unfavorable changes in regulatory requirements; and
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local preference of emerging local competitors in China. |
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pending patent applications will be approved; or |
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any patents will be broad enough to protect our technology, will
provide us with competitive advantages or will not be challenged or invalidated by third parties. We also cannot assure that others will
not independently develop similar products, duplicate our products or, if patents are issued to us, design around these patents. Furthermore,
because patents may afford less protection under foreign law than is available under U.S. law, we cannot assure that any foreign patents
issued to us will adequately protect our proprietary rights. |
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result in our loss of proprietary rights; |
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subject us to significant liabilities, including triple damages in
some instances; |
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require us to seek licenses from third parties, which licenses may
not be available on reasonable terms or at all; or |
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prevent us from selling our products. |
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the contribution and value our solutions bring to our customers;
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our product innovation, quality and performance; |
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our global technical service and support; |
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the return on investment (ROI) of our equipment and its cost of ownership;
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the breadth of our product line; |
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our success in developing and marketing new products; and |
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the extendibility of our products. |
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our continuing need to invest in research and development;
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our continuing need to market our new products; and |
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our extensive ongoing customer service and support requirements worldwide.
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diverting management’s attention and other resources from our
ongoing business concerns; |
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entering markets in which we have no direct prior experience;
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improperly evaluating new services, products and markets; |
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being unable to maintain uniform standards, controls, procedures
and policies; |
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failing to comply with governmental requirements pertaining to acquisitions
of local companies or assets by foreign entities; |
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being unable to integrate new technologies or personnel; |
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incurring the expenses of any undisclosed or potential liabilities;
and |
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the departure of key management and employees. |
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We may face risks associated
with third-party distributors and agents, which could adversely affect our financial results or operations. |
| • | Smaller IC Devices. The development of advanced smaller features means a larger numbers of integrated circuits per wafer. As feature geometries decrease, the manufacturing process tolerances decreases as well, and manufacturing yield becomes increasingly sensitive to processing deviations and defects. In addition, the increased complexity means higher chance of error during manufacturing, leading to additional inline monitoring and metrology steps. |
| • | Transition to 3D Devices. The transition to ever more complex 3D Integration technology, in order to improve performance, requires complex fabrication and as a result more sophisticated metrology solutions to be capable of measuring critical dimensions and materials properties in these 3D structures. |
| • | Faster Time to Market. The accelerating rate of obsolescence of technology and the faster ramp to yield required by customers makes early achievement of high manufacturing yields a critical component of profitability and metrology has a critical role in achieving these demanding results. |
| • | Materials Engineering. In order to overcome limitations in the continued shrink of transistor dimensions, which are used to improve performance, leading manufacturers are introducing new novel materials to IC production. Introduction of new materials requires new processing and metrology solutions in the atom level and thus represents a challenging development for the semiconductor manufacturing industry. It also represents a growing demand for tighter materials control and therefore increasing demand for Materials Metrology solutions to control parameters such as composition, stress, ultra-thickness, crystallization and more. |
| • | Chemical Process Control. The strive for high yields in new and complex IC devices and advanced packaging architectures, growing costs of materials and chemicals, and tighter sustainability and environmental regulations are driving up the costs of operations and increasing the need for manufacturers to carry out chemical process control on more elements and with increasing intensity. |
| • | New Manufacturing Steps. Multiple Lithography technologies including multi-patterning and E-Beam are increasing the number of Etch and CMP process steps and EUV poses unique metrology challenges. |
| • | Foundry Model. The rising investment needed for leading edge semiconductor process development and production, as well as the proliferation of different types of devices, lead to manufacturing increasingly being outsourced to foundries. A foundry typically runs several different processes and makes numerous different semiconductor product types in one facility. Since Foundries are running multiple products at the same time, the need for process control and metrology is increasing in order to qualify multiple devices on the same wafer at the same high process quality. |
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Advanced Memory Technology (SSD). Memory manufacturers are going through technology evolution and build vertical
devices to manage layers of NAND Memory (3D NAND). Such a complex device that can hold up to hundreds of thin high aspect ratio vertical
layers requires significant changes in the manufacturing process. These changes require also many more steps to control through different
Metrology solutions and increase the overall process control intensity for these High Aspect Ratio evolving structures. |
| • |
DRAM and High Bandwidth Memory (HBM). The transition to advanced memory architectures such as DDR5 and HBM
introduces significant complexity in design and manufacturing. These technologies require extremely fine geometries, ultra-thin layers,
and precise alignment of multiple dies to achieve high bandwidth and low latency. Stacking memory dies in HBM and integrating them with
logic through through-silicon vias (TSVs) and hybrid bonding dramatically increases process steps and tightens tolerances. This evolution
introduced new metrology challenges, including accurate measurement of TSV depth, bonding quality, and layer-to-layer alignment and more.
As these architectures scale for AI, HPC, and data center applications, process control intensity rises sharply, expanding the need for
advanced metrology solutions to ensure reliability and performance. |
| • |
Advanced Packaging. The evolution in packaging to high-end performance packaging technologies such as flip
chip, fan out, 2.5D and 3D packaging as well as hybrid bonding, is driven by the need for enhanced performance with higher I/O density,
smaller pitch and a growing variety of complex packaging schemes. The advanced packaging business growth is propelled by AI and HPC-related
applications. Capital investment for High-End Performance Packaging represents a significant part of the total packaging CAPEX and is
shifting from OSATs to Integrated Device Manufacturers and Foundries as the production and process control requirements are becoming similar
to Front-End Fabs. These trends expand the TAM for process control and metrology solutions and Nova has a set of solutions targeting this
growing market. |
|
Technology |
Product Line |
Key applications |
Product families |
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• Broadband Spectrophotometry
• Scatterometry
• Spectral Reflectometry
• Imaging and Image Processing |
Dimensional Optical CD Integrated Metrology |
Critical Dimensions
Thin films
Wafer topography
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Nova i Platform |
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Dimensional Optical CD Stand-Alone Metrology |
Nova T-platform
Nova MMSR
Nova VeloCD | ||
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• Spectral Interferometry |
Nova Prism | ||
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• Spectral
Coherence Interferometry
• Spectral
Reflectometry
• White
Light Interferometry |
Film/wafers Thickness
Wafer Topography
Roughness
Critical dimensions |
Nova SemDex | |
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Nova WMC | |||
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• X-Ray Photoelectron Spectroscopy
• X-Ray Fluorescence |
X-Ray
Materials
Metrology |
Thin film
Composition
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Nova VeraFlex |
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• Secondary Ion Mass Spectrometry |
SIMS Materials
Metrology |
Composition depth-profiling |
Nova Metrion |
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• Raman Spectroscopy |
Optical Materials Metrology |
Strain
Crystallinity
Composition
Strength/Stress
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Nova Elipson |
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• Titration – various types
• CVS, CPVS, PCGA
• Spectrophotometry
• HPLC
• Dynamic Surface Tension
• pH, conductivity, density |
Chemical Process Control – Analysis and Replenishment |
Electroplating process applications in interconnect, advanced packaging |
Nova Ancolyzer
Nova AncoScene |
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• Solid dosing
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Metal Replenishment
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Powder dosing specialty metal oxide materials for electroplating applications |
Nova DMR |
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• Computational Modeling for Metrology Platforms |
Physical modeling (Modeling Software Solutions), Mathematical modeling algorithms (Software
solutions), and a combination of the two. |
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Nova MARS |
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• AI adjacent and Machine Learning
• Advanced Algorithms |
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Nova FIT for Films CD Metrology
Nova FIT for Material Metrology | |
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• Big Data Analytics
• High Power Computing |
Fleet Management (Software solutions) |
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Nova FM
Nova HPC
QED |
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Nova AncoScene – a platform for damascene copper and cobalt
plating interconnects applications offering a fully automated analysis of bath components, overall plating performance, excursions, trends
alarms and warnings, and overall process control. |
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Nova Ancolyzer –a fully automated online platform for advanced
packaging processes, that supports a wide variety of analytical techniques and is configured to specific process analysis and replenishment
requirements. |
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Nova DMR offers economical replenishment of metals in a plating bath
to significantly extend the bath chemicals’ lifetime and improve the plater utilization. The solution additionally enables manufacturers
to reduce the use of hazardous materials, and in turn, aims to enable better compliance with environmental regulations. The platform integrates
with Nova Ancolyzer and can connect directly to any process tool. |
| • |
Dimensional metrology: Nova’s suite of software modeling products is comprised of Nova MARS physical
and geometrical modeling and the Nova FIT, machine learning and modeling solutions. These solutions are supported by Nova HPC, a computational
management layer, which also serves as the foundation for Nova’s Centralized Fleet Management and Control. This comprehensive software
modeling portfolio provides customers with a complete modeling and application development solution designed for complex 3D and HAR structures
in the most advanced logic, memory and packaging technology nodes: |
| • |
Materials Metrology: Nova FIT acts as a server-based solution, when used in conjunction with the Nova VeraFlex,
to enable higher measurement throughput and higher precision for certain use cases. |
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2023 |
2024 |
2025 |
|||||||||
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Total revenues from five largest customers |
52 |
% |
53 |
% |
51 |
% | ||||||
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Range of revenues from five largest customers |
5-19 |
% |
6-18 |
% |
6-23 |
% | ||||||
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Name
of Subsidiary |
Place
of Incorporation |
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Nova Measuring Instruments, Inc. |
Delaware, U.S. |
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Nova Measuring Instruments K.K. |
Japan |
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Nova Measuring Instruments Taiwan Ltd. |
Taiwan |
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Nova Measuring Instruments Korea Ltd. |
Korea |
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Nova Measuring Instruments GmbH |
Germany |
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Nova Measuring Instruments (Shanghai) Co., Ltd. |
China |
|
Nova Measuring Instruments Singapore Pte Ltd |
Singapore |
| Sentronics Metrology GmbH* |
Germany |
|
Location |
Purpose of use |
Approximate
SQM |
Expiration date |
|
Israel
Rehovot and Ness Ziona
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Offices, manufacturing and laboratories
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18,000
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Rehovot 15,200 sqm - August 2029 with an option to extend the lease
period by two periods of five years each, subject to customary conditions. Ness Ziona 2800 sqm lease is expected to end in July 2029
|
|
US
Fremont California
|
Offices, manufacturing and laboratories |
10,800 |
August 2034 with an option to extend for an additional five years, subject to customary
conditions. |
|
Germany
Bad Urach |
Offices, manufacturing and laboratories |
6,500 |
The facility is owned by the Company and as of January 2025, has fully replaced the Pliezhausen
facility. |
|
Germany
Mannheim |
Offices, manufacturing and laboratories |
6,150 |
The facility is owned by the Company. |
|
Taiwan
Hsinchu |
Offices and laboratories |
2,000 |
Ranging between 2026 and 2031. |
|
US, China, Korea, Taiwan, Japan, Singapore |
Offices and laboratories |
Less than 2,000 each |
Ranging between 2025 and 2030. |
|
• |
Record product and service sales results. |
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• |
Record profitability and earnings per share |
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• |
Diversified customers mix, across multiple territories. |
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• |
Further expansion into advanced packaging with new and existing products.
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• |
Further market adoption of Nova’s advanced portfolio:
|
|
o |
Materials, chemical and dimensional metrology solutions. |
|
o |
Hardware and software coupling. |
|
o |
Machine learning and AI capabilities to complement physical modeling.
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o |
Holistic offering, including Integrated and Standalone metrology.
|
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• |
Continued proliferation of Nova’s advanced solutions across
the board |
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• |
Record sales of each of our product lines: optical integrated and
stand alone systems, materials metrology systems and chemical metrology systems. |
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Record sales of materials and chemical metrology solutions.
|
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• |
Continued investments in research and development programs aimed
to generate new organic growth engines for process control. |
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• |
Deepening collaboration with research institutes and customers' development
centers, utilizing a variety of our products, leading to our positioning as a long-term technology development and high-volume manufacturing
partner. |
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• |
ESG (Environment, Social and Governance) – In 2025 we worked
to update our Sustainability Plan. We are determined as a company to play a vital role in creating a world that values equality, safety
and environmental health for the benefit of future generations to come. We remain committed to proactively invest in embedding social
responsibility and sustainability as part of our culture and business management to support our values. |
|
• |
The acquisition of Sentronics, a privately held company headquartered
in Germany, closed on January 30, 2025. Sentronics is a global provider of wafer metrology tools for backend semiconductor fabrication.
Sentronics develops flexible and modular metrology tools equipped with multiple metrology sensors for a variety of critical dimension
applications, including thickness, roughness, and topography. |
|
• |
On September 5, 2025, we closed an offering of $750 million aggregate
principal amount of 0% Convertible Senior Notes due 2030 in a private offering to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended. The funds raised will be utilized for further investment in the company’s growth and
resiliency in order to enhance shareholders’ value. |
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• |
Investing in organizational development to
enhance our human capital and the strength of our global teams based on our values and culture. |
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• |
Continue to strengthen our competitive market
position, through unique innovation and technological leadership and to meet future industry challenges. |
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• |
Continue executing our well-defined strategy to reach $1B USD in
revenues by 2027. The strategy defines the Company’s growth path in revenue, customers, technology and financial performance.
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• |
Expand our total available markets by addressing new emerging metrology
applications and markets sectors, through solutions delivery to the challenging buildup of advanced Logic technology nodes, memory scaled
3D-NAND nodes, DRAM scaled devices and advanced packaging schemes at leading edge customers. |
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• |
Continue delivering metrology systems for mature technology nodes
and traditional packaging, to support new applications ramp up and expansions. |
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• |
Continue the collaborations and joint research programs with leading
semiconductor manufacturers and relevant leading research institutes. |
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• |
Continue innovation and diversification of our products through new
product introductions to extend the Company’s market leadership and total available market. |
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• |
Create synergy between our product lines towards a combined offering
for advanced applications, which require dimensional, material and chemical metrology. |
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• |
Grow our production facilities and offices footprint to meet semiconductor
demand and our strategic plans and continue to develop modern and streamlined core business processes through new ERP and Service CRM
infrastructure. |
|
• |
Build an extensive roadmap for Sentronics products to broaden our
portfolio and cater to additional applications. |
|
• |
Create synergy between Nova and Sentronics’ technologies towards a combined and enhanced offering
for advanced packaging applications. |
|
• |
Successfully completing the go‑live and stabilization of
our new ERP system. |
|
• |
Continue looking for investment opportunities to broaden our portfolio
and enrich our brand. |
|
• |
Meeting strategic, development, operational and delivery targets
considering the uncertainties around the macro-economic, geopolitical and trade restriction issues across the globe. |
|
• |
On time delivery of the required solutions to meet the current and
future needs of our existing and new customers. |
|
• |
Correctly understanding the market trends and competitive landscape
to ensure our products retain proper differentiation to win customer confidence. |
|
• |
Creating aggressive, innovative and competitive roadmap deliverables
at reasonable costs to properly control expenses. |
|
• |
Identifying the metrology evolution roadmap for future industry needs
to meet process control requirements and lead the market. |
|
• |
Achieving long-term growth targets while supporting extensive growth
in all our activities. |
|
• |
Building a solid global infrastructure and production capacity to
accommodate further growth. |
|
• |
Challenges implementing our new ERP system. |
|
• |
Optical metrology has become an enabler for the industry over the
last few years. |
|
• |
Materials metrology has been widely adopted by leading memory and
logic/foundry customers. We expect further adoption in the next few years. |
|
• |
The growing adoption of our metrology portfolio in the advanced packaging
market. |
|
• |
The growing need for chemical process control and replenishment solutions,
driven by ESG and environment sustainability trends for reduction in chemical materials waste. |
|
• |
Our unique metrology portfolio, combining optical, X-Ray and chemical
metrology for both dimensions and materials. This provides the most advanced portfolio, combining the best innovative metrology capabilities
with the best reliability and return on investment. |
|
• |
The ability to provide a unique and differentiated technology portfolio
sets us apart from the competition and adds a competitive edge to our offering. |
|
• |
Our solutions are well accepted by leading customers that allow us
to gain more market share with additional process steps and new applications. |
|
• |
Our ability to closely team with our customers allows us to predict
the industry evolution and process control challenges and by that introduce innovative metrology roadmap to solve industry needs.
|
|
• |
Our diversified portfolio, which is a result of continuous investment
in research and development, is becoming more attractive to our customers. |
|
• |
Extending our solutions’ base to include hardware and software
elements in a coupled offering. |
|
• |
Successful track record in completing and integrating inorganic products,
as a result of M&A, which allows us to diversify our product offering to expand our addressable markets. |
|
• |
Well controlled and efficient operating model to support our profitable
growth and operational resiliency. |
|
|
2023 |
2024 |
2025 |
|||||||||
|
|
||||||||||||
|
Revenues from product sales |
78 |
% |
80 |
% |
80 |
% | ||||||
|
Revenues from services |
22 |
% |
20 |
% |
20 |
% | ||||||
|
Total revenues |
100 |
% |
100 |
% |
100 |
% | ||||||
|
|
||||||||||||
|
Cost of products sale |
32 |
% |
31 |
% |
32 |
% | ||||||
|
Cost of services |
12 |
% |
11 |
% |
11 |
% | ||||||
|
Total cost of revenues |
43 |
% |
42 |
% |
43 |
% | ||||||
|
|
||||||||||||
|
Gross profit |
57 |
% |
58 |
% |
57 |
% | ||||||
|
|
||||||||||||
|
Operating expenses: |
||||||||||||
|
Research and development expenses, net |
17 |
% |
16 |
% |
16 |
% | ||||||
|
Sales and marketing expenses |
10 |
% |
10 |
% |
9 |
% | ||||||
|
General and administrative expenses |
4 |
% |
4 |
% |
3 |
% | ||||||
|
Total operating expenses |
31 |
% |
30 |
% |
29 |
% | ||||||
|
|
||||||||||||
|
Operating profit |
26 |
% |
28 |
% |
29 |
% | ||||||
|
|
||||||||||||
|
Financial income (expense), net |
4 |
% |
4 |
% |
6 |
% | ||||||
|
Income before income taxes |
30 |
% |
32 |
% |
34 |
% | ||||||
|
Income tax expenses |
4 |
% |
5 |
% |
5 |
% | ||||||
|
|
||||||||||||
|
Net income |
26 |
% |
27 |
% |
29 |
% | ||||||
|
|
2023 |
2024 |
2025 |
|||||||||||||||||||||
|
|
Domestic |
Abroad |
Domestic |
Abroad |
Domestic |
Abroad |
||||||||||||||||||
|
Electronic equipment |
2,086 |
2,867 |
1,313 |
3,077 |
3,228 |
8,404 |
||||||||||||||||||
|
Office furniture and equipment |
360 |
499 |
29 |
202 |
95 |
2,323 |
||||||||||||||||||
|
Leasehold improvements |
2,994 |
2,457 |
91 |
843 |
670 |
6,092 |
||||||||||||||||||
|
Land and buildings |
- |
5,925 |
- |
11,660 |
- |
6,886 |
||||||||||||||||||
|
Total |
5,440 |
11,748 |
1,433 |
15,782 |
3,993 |
23,705 |
||||||||||||||||||
|
• |
Local Manufacturing Obligation.
The terms of the grants under the Innovation Law require that we manufacture the products developed with these grants in Israel. Under
the regulations promulgated under the Innovation Law, the products may be manufactured outside Israel by us or by another entity only
if prior approval is received from the IIA (such approval is not required for the transfer of less than 10% of the manufacturing capacity
in the aggregate, as declared to be manufactured out of Israel in the applications for funding, in which case a notice should be provided
to the IIA). This approval may be given only if we abide by all the provisions of the Innovation Law and related regulations. Ordinarily,
as a condition to obtaining approval to manufacture outside Israel, we would be required to pay royalties at an increased rate (usually
1% in addition to the standard rate and increased royalties cap between 120% and 300% of the grants, depending on the manufacturing volume
that is performed outside Israel). |
|
• |
Know-How transfer limitation.
The Innovation Law restricts the ability to transfer know-how funded by the IIA outside of Israel, including by way of a license to a
non-Israeli entity. Transfer of IIA funded know-how outside of Israel requires prior approval of the IIA. The IIA approval to transfer
know-how created, in whole or in part, in connection with an IIA-funded project to third party outside Israel is subject to payment of
a redemption fee to the IIA calculated according to a formula provided under the Innovation Law that is based, in general, on the ratio
between the aggregate IIA grants to the company’s aggregate investments in the project that was funded by these IIA grants, multiplied
by the transaction consideration, taking into account depreciation mechanism, and less royalties already paid to the IIA. The regulations
promulgated under the Innovation Law establish a maximum payment of the redemption fee paid to the IIA under the above mentioned formulas
and differentiates between two situations: (i) in the event that the company sells its IIA funded know-how, in whole or in part, or is
sold as part of an M&A transaction, and subsequently ceases to conduct business in Israel, the maximum redemption fee under the above
mentioned formulas will be no more than six times the total grants received (plus accrued interest) for development of the know-how being
transferred, or the entire amount received from the IIA, as applicable; (ii) in the event that following the transactions described above
(i.e., asset sale of IIA funded know-how or transfer as part of an M&A transaction) the company undertakes to continue its R&D
activity in Israel (for at least three years following such transfer and maintain at least 75% of its R&D staff employees it had for
the six months before the know-how was transferred, while keeping the same scope of employment for such R&D staff), then the company
is eligible for a reduced cap of the redemption fee of no more than three times the amounts received (plus accrued interest) for the applicable
know-how being transferred, or the entire amount received from the IIA, as applicable. No assurance can be given that approval of any
such transfer, if requested, will be granted and what will be the amount of the redemption fee payable. |
|
• |
Licensing arrangements.
Under the terms of the Innovation Law, licensing know how developed under the IIA programs outside of Israel, requires prior consent of
IIA and payment of license fees to IIA, calculated in accordance with the licensing rules promulgated under the Innovation Law. The payment
of the license fees does not discharge the company from the obligation to pay royalties or other payments due to IIA in accordance with
Innovation Law. |
|
Name
|
Age
|
Position
|
|
Eitan Oppenhaim (4) |
60 |
Chairman of the Board of Directors |
|
Avi Cohen (1)(2) (4) |
72 |
Director |
|
Raanan Cohen (2)(3) |
70 |
Director |
|
Zehava Simon (1)(2)(3)(4) |
67 |
Director |
|
Sarit Sagiv (1)(2) |
57 |
Director |
|
Yaniv Garty (3)(4) |
58 |
Director |
|
Rami Hadar (4) |
63 |
Director |
|
Gabriel Waisman |
55 |
President & CEO |
|
Guy Kizner
|
42 |
Chief Financial Officer |
|
Shay Wolfling
|
54 |
Chief Technology Officer |
|
Adrian S. Wilson |
54 |
President of US subsidiary & General Manager Material Metrology
Division |
|
Effi Aboody |
55 |
Corporate VP and General Manager Dimensional Metrology Division
|
|
Thomas Schütt |
54 |
General Manager Chemical Metrology Division |
|
(1) |
Member of the audit committee |
|
(2) |
Member of the compensation committee |
|
(3) |
Member of the nominating governance and sustainability committee |
|
(4) |
Member of the strategy and M&A committee |
|
As of December 31, |
2023 |
2024 |
2025 |
|||||||||
|
Total Personnel |
1,202 |
1,383 |
1,612 |
|||||||||
|
Located in Israel |
516 |
586 |
604 |
|||||||||
|
Located abroad |
686 |
797 |
1,008 |
|||||||||
|
In operations |
287 |
293 |
344 |
|||||||||
|
In research and development |
477 |
585 |
682 |
|||||||||
|
In global business |
318 |
375 |
449 |
|||||||||
|
In general and administration |
120 |
130 |
137 |
|||||||||
|
Name |
Number of Ordinary
Shares Beneficially
Owned |
Percentage of Ordinary
Shares
Beneficially Owned |
||||||
|
FMR LLC (1)
|
2,899,018 |
9.12 |
% | |||||
|
Menora Mivtachim Holdings Ltd.
(2) |
2,095,542 |
6.59 |
% | |||||
|
Migdal Insurance & Financial Holdings Ltd.
(3) |
2,377,339 |
7.48 |
% | |||||
|
Harel Insurance Investments & Financial Services Ltd.
(4) |
3,153,440 |
9.92 |
% | |||||
|
BlackRock, Inc. (5)
|
1,604,125 |
5.04 |
% | |||||
|
|
(1) |
The information is based upon Amendment no. 5 to Schedule 13G/A filed
with the SEC by FMR LLC, and subsidiaries on August 6, 2025 regarding holdings as of June 30, 2025. |
|
|
(2) |
The information is based upon the shareholder notification provided
to the Company by Menora Mivtachim Holdings Ltd., Menora Mivtachim Pensions and Gemel Ltd., Menora Mivtahim Insurance Ltd., Menora Mivtachim
Vehistadrut Hamehandesim Nihul Kupot Gemel Ltd. and Shomera Insurance Company Ltd. on January 11, 2026 regarding holdings as of December
31, 2025. |
|
|
(3) |
The information is based upon Schedule 13G filed with the SEC by
Migdal Insurance & Financial Holdings Ltd., Migdal Insurance Company Ltd., Migdal Sal Domestic Equities, Migdal Mutual Funds Ltd.,
on November 13, 2025 regarding holdings as of September 30, 2025. |
|
|
(4) |
The information is based upon Amendment no. 12 Schedule 13G/A filed
with the SEC by Harel Insurance Investments & Financial Services Ltd. on February 9, 2026 regarding holdings as of February 5,
2026. |
|
(5) |
The information is based upon the Schedule 13G filed with the SEC
by BlackRock, Inc. on October 17, 2025 regarding holds as of September 30, 2025. |
|
Tax Year |
Development Region “A” |
Other Areas within Israel |
|
2011-2012 |
10% |
15% |
|
2013 |
7% |
12.5% |
|
2014-2016 |
9% |
16% |
|
2017 onwards* |
7.5% |
16% |
|
• |
An individual citizen or resident of the U.S. (as determined under
U.S. federal income tax rules); |
|
• |
a corporation (or another entity taxable as a corporation for U.S.
federal income tax purposes) created or organized in or under the laws of the U.S., any state thereof, or the District of Columbia;
|
|
• |
an estate, the income of which is subject to U.S. federal income
taxation regardless of its source; or |
|
• |
a trust, if (a) a U.S. court is able to exercise primary supervision
over its administration and one or more U.S. persons have the authority to control all of its substantial decisions; or (b) the trust
has in effect a valid election in effect under applicable Treasury Regulations (as defined below) to be treated as a United States person.
|
|
• |
persons who own, directly, indirectly or constructively, 10% or more (by voting power
or value) of our outstanding voting shares; |
|
• |
persons who hold the ordinary shares as part of a hedging, straddle or conversion transaction;
|
|
• |
persons whose functional currency is not the U.S. dollar; |
|
• |
persons who acquire their ordinary shares in a compensatory transaction; |
|
• |
broker-dealers; |
|
• |
insurance companies; |
|
• |
regulated investment companies; |
|
• |
real estate investment companies; |
|
• |
qualified retirement plans, individual retirement accounts and other
tax-deferred accounts; |
|
• |
traders who elect to mark-to-market their securities; |
|
• |
tax-exempt organizations; |
|
• |
banks or other financial institutions; |
|
• |
persons subject to special tax accounting rules as a result of any
item of gross income with respect to ordinary shares being taken into account in an applicable financial statement; |
|
• |
U.S. expatriates and certain former citizens and long-term residents
of the United States; and |
|
• |
Persons subject to any alternative minimum tax. |
|
• |
fails to furnish its taxpayer identification number, or TIN, which,
for an individual, is ordinarily his or her social security number; |
|
• |
furnishes an incorrect TIN; |
|
• |
is notified by the IRS that it is subject to backup withholding because
it has previously failed to properly report payments of interest or dividends; or |
|
• |
fails to certify, under penalties of perjury, that it has furnished
a correct TIN and that the IRS has not notified the U.S. holder that it is subject to backup withholding. |
|
• |
pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect our transactions and asset dispositions; |
| • |
provide reasonable assurance that transactions are recorded as necessary
to permit the preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations of our management and directors; and |
| • |
provide reasonable assurance regarding the prevention or timely detection
of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. Due to its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate. |
|
|
2024 |
2025 |
||||||
|
Audit Fees |
776,000 |
1,296,000 |
||||||
|
Tax Fees |
23,000 |
197,000 |
||||||
|
Other Fees |
172,000 |
33,000 |
||||||
|
Total |
971,000 |
1,526,000 |
||||||
|
Period |
(a) Total Number of Ordinary Shares Purchased |
(b) Average Price Paid per Ordinary Share |
(c) Total Number of Ordinary Shares Purchased as Part of Publicly Announced Plans or Programs |
(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) |
||||||||||||
|
April 2025 |
93,029 |
214.99 |
506,530 |
28.47 |
||||||||||||
|
November 2025 |
53,471 |
280.52 |
560,001 |
13.47 |
||||||||||||
Item 16J. Insider Trading Plans (10b5-1)
|
|
•
|
risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;
|
|
|
•
|
a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;
|
|
|
•
|
|
|
|
•
|
a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.
|
|
Page
|
|
|
Reports of Independent Registered Public Accounting Firm (PCAOB ID No.
|
F-3 - F-5
|
|
F-6
|
|
|
F-7
|
|
|
F-8
|
|
|
F-9
|
|
|
F-10
|
|
|
F-11 - F-43
|
![]() |
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road, Building A,
Tel-Aviv 6492102, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
|
Valuation of excess and obsolete inventory reserve
|
||
|
Description of the Matter
|
The Company’s inventories totaled $183.7 million as of December 31, 2025. As described in Note 2i to the consolidated financial statements, the Company assesses the value of inventories, including raw materials, service inventory, work-in-process and finished goods, in each reporting period, and values its inventories at the lower of cost or net realizable value. Reserves for potential excess and obsolete inventory are made based on management's analysis of inventory levels, future sales forecasts, market conditions and the expected consumption.
Auditing management's estimates for valuation of inventories involved subjective auditor judgment due to the significant assumptions made by management about the future salability of the inventories. These assumptions include the assessment, by inventory category (raw materials, service inventory, work-in-process and finished goods), of future usage and market demand for the Company's products.
|
|
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company's excess and obsolete inventory reserve process, including management's assessment of the underlying assumptions and data.
Our substantive audit procedures included evaluating the significant assumptions stated above and the accuracy and completeness of the underlying data management used to value excess and obsolete inventory. We compared the cost of on-hand inventories to management's sales forecast. We also assessed the historical accuracy of management's estimates and performed sensitivity analyses over the significant assumptions to evaluate the changes in the obsolete and excess inventory estimates that would result from changes in the underlying assumptions.
|
![]() |
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road, Building A,
Tel-Aviv 6492102, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
ASSETS
|
||||||||
|
Current assets
|
||||||||
|
Cash and cash equivalents
|
|
|
||||||
|
Short-term interest-bearing bank deposits
|
|
|
||||||
|
Marketable securities (Note 4)
|
|
|
||||||
|
Trade accounts receivable, net of allowance of $
|
|
|
||||||
|
Inventories (Note 5)
|
|
|
||||||
|
Other current assets (Note 6)
|
|
|
||||||
|
Total current assets
|
|
|
||||||
|
Non-current assets
|
||||||||
|
Marketable securities (Note 4)
|
|
|
||||||
|
Interest-bearing bank deposits and restricted cash
|
|
|
||||||
|
Deferred tax assets (Note 15)
|
|
|
||||||
|
Severance pay funds (Note 10)
|
|
|
||||||
|
Operating lease right-of-use assets (Note 12)
|
|
|
||||||
|
Property, plant and equipment, net (Note 7)
|
|
|
||||||
|
Intangible assets, net (Note 8)
|
|
|
||||||
|
Goodwill
|
|
|
||||||
|
Other long-term assets
|
|
|
||||||
|
Total non-current assets
|
|
|
||||||
|
TOTAL ASSETS
|
|
|
||||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
|
Current liabilities
|
||||||||
|
Convertible senior notes, net (Note 11)
|
|
|
||||||
|
Trade accounts payable
|
|
|
||||||
|
Deferred revenues
|
|
|
||||||
|
Operating lease current liabilities (Note 12)
|
|
|
||||||
|
Other current liabilities (Note 9)
|
|
|
||||||
|
Total current liabilities
|
|
|
||||||
|
Non-Current liabilities
|
||||||||
|
Convertible senior notes, net (Note 11)
|
|
|
||||||
|
Accrued severance pay (Note 10)
|
|
|
||||||
|
Operating lease long-term liabilities (Note 12)
|
|
|
||||||
|
Deferred tax liability (Note 15)
|
|
|
||||||
|
Other long-term liabilities
|
|
|
||||||
|
Total non-current liabilities
|
|
|
||||||
|
Commitments and contingencies (Note 13)
|
||||||||
|
TOTAL LIABILITIES
|
|
|
||||||
|
SHAREHOLDERS’ EQUITY (Note 14)
|
||||||||
|
Ordinary shares,
|
||||||||
|
Additional paid-in capital
|
|
|
||||||
|
Accumulated other comprehensive loss
|
|
(
|
)
|
|||||
|
Retained earnings
|
|
|
||||||
|
Total shareholders’ equity
|
|
|
||||||
|
Total liabilities and shareholders’ equity
|
|
|
||||||
|
Year ended December 31,
|
||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Revenues:
|
||||||||||||
|
Products
|
|
|
|
|||||||||
|
Services
|
|
|
|
|||||||||
|
Total revenues
|
|
|
|
|||||||||
|
Cost of revenues:
|
||||||||||||
|
Products
|
|
|
|
|||||||||
|
Services
|
|
|
|
|||||||||
|
Total cost of revenues
|
|
|
|
|||||||||
|
Gross profit
|
|
|
|
|||||||||
|
Operating expenses:
|
||||||||||||
|
Research and development, net (Note 2S)
|
|
|
|
|||||||||
|
Sales and marketing
|
|
|
|
|||||||||
|
General and administrative
|
|
|
|
|||||||||
|
Total operating expenses
|
|
|
|
|||||||||
|
Operating income
|
|
|
|
|||||||||
|
Financial income, net (Note 17)
|
|
|
|
|||||||||
|
Income before taxes on income
|
|
|
|
|||||||||
|
Income tax expenses (Note 15)
|
|
|
|
|||||||||
|
Net income
|
|
|
|
|||||||||
|
Earnings per share:
|
||||||||||||
|
Basic
|
|
|
|
|||||||||
|
Diluted
|
|
|
|
|||||||||
|
Shares used in calculation of earnings per share (in thousands):
|
||||||||||||
|
Basic
|
|
|
|
|||||||||
|
Diluted
|
|
|
|
|||||||||
|
Year ended December 31,
|
||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Net income
|
|
|
|
|||||||||
|
Other comprehensive income (loss), net of tax:
|
||||||||||||
|
Cumulative Translation Adjustment
|
|
(
|
)
|
|
||||||||
|
Available-for-sale investments (Note 4):
|
||||||||||||
|
Unrealized gain on available-for-sale marketable securities, net
|
|
|
|
|||||||||
|
Cash flow hedges (Note 17):
|
||||||||||||
|
Unrealized gain (loss) from cash flow hedges
|
|
(
|
)
|
(
|
)
|
|||||||
|
Less: reclassification adjustment for net gain (loss) included in net income
|
(
|
)
|
(
|
)
|
|
|||||||
|
Other comprehensive income (loss)
|
|
(
|
)
|
|
||||||||
|
Total comprehensive income
|
|
|
|
|||||||||
|
Accumulated
|
||||||||||||||||||||
|
Ordinary
|
Additional
|
Other
|
Total
|
|||||||||||||||||
|
Shares
|
Paid-in
|
Comprehensive
|
Retained
|
Shareholders’
|
||||||||||||||||
|
Number
|
Capital
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||
|
Balance as of January 1, 2023
|
|
|
(
|
)
|
|
|
||||||||||||||
|
Issuance of shares upon exercise of options
|
|
|
|
|
|
|||||||||||||||
|
Issuance of shares upon vesting of RSU
|
|
|
|
|
|
|||||||||||||||
|
Share based compensation
|
-
|
|
|
|
|
|||||||||||||||
|
Shares repurchase at cost
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||
|
Other comprehensive loss
|
-
|
|
|
|
|
|||||||||||||||
|
Net income
|
-
|
|
|
|
|
|||||||||||||||
|
Balance as of December 31, 2023
|
|
|
(
|
)
|
|
|
||||||||||||||
|
Issuance of shares upon exercise of options
|
|
|
|
|
|
|||||||||||||||
|
Issuance of shares upon vesting of RSU
|
|
|
|
|
|
|||||||||||||||
|
Issuance of shares upon conversion of convertible senior notes
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||
|
Share based compensation
|
-
|
|
|
|
|
|||||||||||||||
|
Shares repurchase at cost
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||
|
Other comprehensive loss
|
-
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
|
Net income
|
-
|
|
|
|
|
|||||||||||||||
|
Balance as of December 31, 2024
|
|
|
(
|
)
|
|
|
||||||||||||||
|
Issuance of shares upon exercise of options
|
|
|
|
|
|
|||||||||||||||
|
Issuance of shares upon vesting of RSU
|
|
|
|
|
|
|||||||||||||||
|
Issuance of shares upon conversion of convertible senior notes
|
|
|
|
|
|
|||||||||||||||
|
Purchase of capped calls
|
-
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||
|
Share based compensation
|
-
|
|
|
|
|
|||||||||||||||
|
Shares repurchase at cost
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||
|
Other comprehensive loss
|
-
|
|
|
|
|
|||||||||||||||
|
Net income
|
-
|
|
|
|
|
|||||||||||||||
|
Balance as of December 31, 2025
|
|
|
|
|
|
|||||||||||||||
|
Year ended December 31,
|
||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Cash flows from operating activities:
|
||||||||||||
|
Net income
|
|
|
|
|||||||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
|
Depreciation of property, plant and equipment
|
|
|
|
|||||||||
|
Amortization of intangible assets
|
|
|
|
|||||||||
|
Amortization of premium and accretion of discount on marketable securities, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Amortization of debt issuance costs
|
|
|
|
|||||||||
|
Share-based compensation
|
|
|
|
|||||||||
|
Net effect of exchange rate fluctuation
|
(
|
)
|
|
|
||||||||
|
Changes in assets and liabilities:
|
||||||||||||
|
Trade accounts receivables, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Inventories
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Other current and long-term assets
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Deferred tax assets, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Operating lease right-of-use assets
|
|
|
|
|||||||||
|
Trade accounts payables
|
(
|
)
|
|
(
|
)
|
|||||||
|
Deferred revenues
|
(
|
)
|
|
|
||||||||
|
Operating lease liabilities
|
|
(
|
)
|
(
|
)
|
|||||||
|
Other current and long-term liabilities
|
|
|
(
|
)
|
||||||||
|
Accrued severance pay, net
|
|
|
(
|
)
|
||||||||
|
Net cash provided by operating activities
|
|
|
|
|||||||||
|
Cash flows from investment activities:
|
||||||||||||
|
Acquisition of subsidiary, net of acquired cash
|
(
|
)
|
|
|
||||||||
|
Change in short-term and long-term interest-bearing bank deposits
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Investment in marketable securities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Proceed from maturities of marketable securities
|
|
|
|
|||||||||
|
Proceed from sales of marketable securities
|
|
|
|
|||||||||
|
Purchase of property, plant and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Cash flows from financing activities:
|
||||||||||||
|
Proceeds from issuance of convertible senior notes
|
|
|
|
|||||||||
|
Issuance costs of convertible senior notes
|
(
|
)
|
|
|
||||||||
|
Purchase of capped calls
|
(
|
)
|
|
|
||||||||
|
Issuance costs of capped calls
|
(
|
)
|
|
|
||||||||
|
Conversion of convertible senior notes
|
(
|
)
|
(
|
)
|
|
|||||||
|
Shares repurchase
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Proceeds from exercise of options
|
|
|
|
|||||||||
|
Net cash provided by (used in) financing activities
|
|
(
|
)
|
|
||||||||
|
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
|
|
(
|
)
|
(
|
)
|
|||||||
|
Decrease in cash, cash equivalents and restricted cash
|
|
|
(
|
)
|
||||||||
|
Cash, cash equivalents and restricted cash - beginning of year
|
|
|
|
|||||||||
|
Cash, cash equivalents and restricted cash - end of year
|
|
157,779
|
|
|||||||||
|
Supplemental disclosure of non-cash activities:
|
||||||||||||
|
Operating right-of-use assets recognized with corresponding operating lease liabilities
|
|
|
|
|||||||||
|
Accrued purchase of property, plant and equipment
|
|
|
|
|||||||||
|
Supplemental disclosure of cash flow information:
|
||||||||||||
|
Cash paid during the year for income taxes
|
|
|
|
|||||||||
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
| A. |
Principles of Consolidation and Basis of Presentation
|
| B. |
Use of Estimates in the Preparation of Financial Statements
|
| C. |
Financial Statements in U.S. Dollars
|
| D. |
Cash, Cash Equivalents and Restricted Cash
|
|
As of December 31,
|
||||||||||||
|
2025
|
2024
|
2023
|
||||||||||
|
Cash and cash equivalents
|
|
|
|
|||||||||
|
Long term restricted cash
|
|
|
|
|||||||||
|
Cash, cash equivalents and restricted cash
|
|
|
|
|||||||||
| E. |
Short-Term Interest-Bearing Bank Deposits
|
| F. |
Marketable Securities
|
| G. |
Trade Accounts Receivables
|
| H. |
Business Combination
|
| I. |
Inventories
|
| • |
Raw materials - using the moving average cost method, with specific items valued on a first-in, first-out (FIFO) basis.
|
| • |
Service inventory, work in process and finished goods - using the moving average cost method, with specific items valued on a first-in, first-out (FIFO) and actual production cost basis (materials, labor and indirect manufacturing costs).
|
| J. |
Property, Plant and Equipment
|
|
Years
|
|||
|
Electronic equipment
|
|
||
|
Office furniture and equipment
|
|
||
|
Buildings
|
|
||
|
|
Over the shorter of the term of the lease (including its extension periods) or the useful life of the asset
|
| K. |
Goodwill and Intangible Assets
|
|
Weighted Average Useful Life (Years)
|
|||
|
Technology
|
|
||
|
Customer relationships
|
|
| L. |
Implementation costs incurred in cloud computing arrangement that is a service contract:
|
| M. |
Impairment of Long-Lived Assets
|
| N. |
Accrued Warranty Costs
|
| O. |
Derivative Financial Instruments
|
| P. |
Leases
|
| Q. |
Convertible Senior Notes
|
| R. |
Revenue Recognition
|
| S. |
Research and Development
|
| T. |
Income Taxes
|
| U. |
Share-Based Compensation
|
| V. |
Earnings per Share
|
|
Year ended December 31,
|
||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Net income for basic earnings per share
|
|
|
|
|||||||||
|
Amortization of debt issuance costs related to the Convertible Notes, net of tax
|
|
|
|
|||||||||
|
Net income for diluted earnings per share
|
|
|
|
|||||||||
|
Basic weighted-average shares outstanding
|
|
|
|
|||||||||
|
Dilutive effect of share-based compensation
|
|
|
|
|||||||||
|
Dilutive effect of Convertible Senior Notes
|
|
|
|
|||||||||
|
Diluted weighted average shares outstanding
|
|
|
|
|||||||||
|
Earnings per share:
|
||||||||||||
|
Basic
|
|
|
|
|||||||||
|
Diluted
|
|
|
|
|||||||||
| W. |
Concentrations of Credit Risk
|
| X. |
Fair Value Measurements
|
| Y. |
New Accounting Pronouncements
|
|
Fair Value
|
Amortization period
|
||||
|
Cash and Cash Equivalents
|
|
||||
|
Trade accounts receivable, net
|
|
||||
|
Inventories
|
|
||||
|
Other current assets
|
|
||||
|
Property, plant and equipment, net
|
|
||||
|
Technology
|
|
|
|||
|
Customer Relationships
|
|
|
|||
|
Goodwill
|
|
||||
|
Total assets acquired
|
|
||||
|
Deferred Tax Liability
|
(
|
)
|
|||
|
Other liabilities assumed
|
(
|
)
|
|||
|
Total liabilities assumed
|
(
|
)
|
|||
|
Net assets acquired
|
|
||||
|
Matures within one year:
|
Matures after one year:
|
Total
|
||||||||||||||||||||||||||
|
Corporate
|
Governmental
|
Corporate
|
Governmental
|
|||||||||||||||||||||||||
|
bonds
|
bonds
|
Total
|
bonds
|
bonds
|
Total
|
|||||||||||||||||||||||
|
Unrealized Gain
|
||||||||||||||||||||||||||||
|
Amortized Cost
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Unrealized Gain
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Fair Value
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Unrealized Loss Less than 12 months
|
||||||||||||||||||||||||||||
|
Amortized Cost
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Unrealized Loss
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
|
Fair Value
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Unrealized Loss 12 Months or Greater
|
||||||||||||||||||||||||||||
|
Amortized Cost
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Unrealized Loss
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
|
Fair Value
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Total
|
|
|
|
|
|
|
|
|||||||||||||||||||||
The following is a summary of marketable securities amortized cost, unrealized gains, unrealized losses, and fair value as of December 31, 2024:
|
Matures within one year:
|
Matures after one year:
|
Total
|
||||||||||||||||||||||||||
|
Corporate
|
Governmental
|
Corporate
|
Governmental
|
|||||||||||||||||||||||||
|
bonds
|
bonds
|
Total
|
bonds
|
bonds
|
Total
|
|||||||||||||||||||||||
|
Unrealized Gain
|
||||||||||||||||||||||||||||
|
Amortized Cost
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Unrealized Gain
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Fair Value
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Unrealized Loss Less than 12 months
|
||||||||||||||||||||||||||||
|
Amortized Cost
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Unrealized Loss
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||
|
Fair Value
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Unrealized Loss 12 Months or Greater
|
||||||||||||||||||||||||||||
|
Amortized Cost
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Unrealized Loss
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||||||
|
Fair Value
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Total
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NOTE 5 - INVENTORIES
| A. |
Composition:
|
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
Raw materials
|
|
|
||||||
|
Service inventory
|
|
|
||||||
|
Work in process
|
|
|
||||||
|
Finished goods
|
|
|
||||||
|
|
|
|||||||
| B. |
In the years ended December 31, 2025, 2024 and 2023 , the Company wrote down inventories in a total amount of $
|
NOTE 6 - OTHER CURRENT ASSETS
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
Prepaid expenses
|
|
|
||||||
|
Governmental institutions
|
|
|
||||||
|
Cloud computing arrangement implementation costs
|
|
|
||||||
|
Governments grants receivables
|
|
|
||||||
|
Hedging derivative
|
|
|
||||||
|
Other
|
|
|
||||||
|
|
|
|||||||
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
Cost:
|
||||||||
|
Electronic equipment
|
|
|
||||||
|
Office furniture and equipment
|
|
|
||||||
|
Leasehold improvements
|
|
|
||||||
|
Land and building
|
|
|
||||||
|
|
|
|||||||
|
Accumulated depreciation:
|
||||||||
|
Electronic equipment
|
|
|
||||||
|
Office furniture and equipment
|
|
|
||||||
|
Leasehold improvements
|
|
|
||||||
|
Land and building
|
|
|
||||||
|
|
|
|||||||
|
Net book value
|
|
|
||||||
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
Original amount:
|
||||||||
|
Technology
|
|
|
||||||
|
Customer relationships
|
|
|
||||||
|
|
|
|||||||
|
Accumulated amortization:
|
||||||||
|
Technology
|
|
|
||||||
|
Customer relationships
|
|
|
||||||
|
|
|
|||||||
|
Net book value
|
|
|
||||||
|
|
Year ended December 31,
|
|||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Technology
|
|
|
|
|||||||||
|
Customer relationships
|
|
|
|
|||||||||
|
|
|
|
||||||||||
|
Year ending December 31,
|
||||
|
2026
|
|
|||
|
2027
|
|
|||
|
2028
|
|
|||
|
2029
|
|
|||
|
2030
|
|
|||
|
2031 and thereafter
|
|
|||
|
Total
|
|
|||
| A. | Consists of: |
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
Accrued salaries and fringe benefits
|
|
|
||||||
|
Accrued warranty costs (See B below)
|
|
|
||||||
|
Governmental institutions
|
|
|
||||||
|
Governments grants payables
|
|
|
||||||
|
Other
|
|
|
||||||
|
|
|
|||||||
| B. | Accrued Warranty Costs: |
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
Other current liabilities
|
|
|
||||||
|
Other long-term liabilities
|
|
|
||||||
|
|
|
|||||||
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
Balance as of beginning of year
|
|
|
||||||
|
Services provided under warranty
|
(
|
)
|
(
|
)
|
||||
|
Changes in provision
|
|
|
||||||
|
Balance as of end of year
|
|
|
||||||
| 1. |
During any calendar quarter commencing after the calendar quarter ending on March 31, 2021 (and only during such calendar quarter), if the last reported sale price of the Company’s ordinary shares for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to
|
| 2. |
During the five business day period after any 10 consecutive trading day period (“measurement period”) in which the trading price, determined pursuant to the terms of the Convertible Notes, per $
|
| 3. |
If the Company calls such Convertible Notes for redemption in certain circumstances, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
|
| 4. |
Upon the occurrence of specified corporate events.
|
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
Principal amount
|
|
|
||||||
|
Unamortized issuance costs
|
|
(
|
)
|
|||||
|
Net carrying amount
|
|
|
||||||
| 1. |
During any calendar quarter commencing after the calendar quarter ending on December 31, 2025 (and only during such calendar quarter), if the last reported sale price of the Company’s ordinary shares for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to
|
| 2. |
During the five business day period after any 10 consecutive trading day period (“measurement period”) in which the trading price, determined pursuant to the terms of the Convertible Notes, per $
|
| 3. |
If the Company calls such Convertible Notes for redemption in certain circumstances, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
|
| 4. |
Upon the occurrence of specified corporate events.
|
|
As of
December 31,
|
||||
|
2 0 2 5
|
||||
|
Principal amount
|
|
|||
|
Unamortized issuance costs
|
(
|
)
|
||
|
Net carrying amount
|
|
|||
NOTE 12 - LEASES
|
Year
|
||||
|
2026
|
|
|||
|
2027
|
|
|||
|
2028
|
|
|||
|
2029
|
|
|||
|
2030
|
|
|||
|
2031 and thereafter
|
|
|||
|
Total lease payments
|
|
|||
|
Less imputed interest
|
(
|
)
|
||
|
Total
|
|
|||
| A. |
Rights of Shares:
|
| B. |
Share Repurchase:
|
| C. |
Equity Based Incentive Plans:
|
|
Year ended December 31,
|
||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Cost of Revenues:
|
||||||||||||
|
Product
|
|
|
|
|||||||||
|
Service
|
|
|
|
|||||||||
|
Research and Development
|
|
|
|
|||||||||
|
Sales and Marketing
|
|
|
|
|||||||||
|
General and Administrative
|
|
|
|
|||||||||
|
Total
|
|
|
|
|||||||||
|
2025
|
||||||||
|
Share
Options
|
Weighted Average
Exercise Price
|
|||||||
|
Outstanding - beginning of year
|
|
|
||||||
|
Exercised
|
(
|
)
|
|
|||||
|
Cancelled
|
(
|
)
|
|
|||||
|
Outstanding - year end
|
|
|
||||||
|
Options exercisable at year end
|
|
|
||||||
|
Range of
Exercise Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||
|
(US dollars)
|
(in years)
|
(US dollars)
|
(US dollars)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|||||||||||||||||||
|
2025
|
||||||||
|
Number of RSUs
|
Weighted average grant date fair value (USD)
|
|||||||
|
Unvested - beginning of year
|
|
|
||||||
|
Granted
|
|
|
||||||
|
Vested
|
(
|
)
|
|
|||||
|
Canceled
|
(
|
)
|
|
|||||
|
Unvested at year end
|
|
|
||||||
| A. |
Israeli Taxation
|
| 1. |
The tax rate on a company in Development area A, effective January 1, 2014 is
|
| 2. |
The tax rate on dividend distributed, generated from "preferred income" or by a company that has an approved enterprise increased effective January 1, 2014 from
|
| B. |
U.S. Taxation
|
| C. | Deferred Taxes: |
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
Deferred tax assets:
|
||||||||
|
Net operating loss carryforwards
|
|
|
||||||
|
Tax credits carryforward
|
|
|
||||||
|
Reserve and allowances
|
|
|
||||||
|
Operating lease liabilities
|
|
|
||||||
|
Research and development
|
|
|
||||||
|
Gross tax assets
|
|
|
||||||
|
Valuation allowance
|
(
|
)
|
(
|
)
|
||||
|
Total tax assets
|
|
|
||||||
|
Deferred tax liabilities:
|
||||||||
|
Intangible assets acquired
|
(
|
)
|
(
|
)
|
||||
|
Operating lease right-of-use assets
|
(
|
)
|
(
|
)
|
||||
|
Reserve and allowances
|
(
|
)
|
(
|
)
|
||||
|
Total deferred tax liabilities
|
(
|
)
|
(
|
)
|
||||
|
Net deferred tax assets
|
|
|
||||||
|
Year ended December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
Domestic
|
|
|
||||||
|
Foreign
|
|
|
||||||
|
|
|
|||||||
| D. |
Income before taxes on income included in the consolidated statements of operations:
|
|
|
Year ended December 31,
|
|||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Domestic
|
|
|
|
|||||||||
|
Foreign (mainly US and Germany)
|
|
|
|
|||||||||
|
|
|
|
||||||||||
| E. |
Income tax expenses (tax benefits) included in the consolidated statements of operations:
|
|
|
Year ended December 31,
|
|||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Domestic
|
|
|
|
|||||||||
|
Foreign (mainly US and Germany)
|
|
|
|
|||||||||
|
|
|
|
||||||||||
|
Current
|
|
|
|
|||||||||
|
Deferred
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
|
|
|
||||||||||
| F. | Tax Reconciliation: |
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||||||||||||||
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||
|
Income before taxes on income
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
|
|
||||||||||||||||||||||||
|
Israel Statutory Tax Rate
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
|
Foreign tax effects:
|
(
|
)
|
(
|
)%
|
(
|
)
|
(
|
)%
|
(
|
)
|
(
|
)%
|
||||||||||||
|
United States
|
||||||||||||||||||||||||
|
Foreign Derived Intangible Income benefit
|
(
|
)
|
(
|
)%
|
(
|
)
|
(
|
)%
|
(
|
)
|
(
|
)%
|
||||||||||||
|
Tax credits
|
(
|
)
|
(
|
)%
|
(
|
)
|
(
|
)%
|
(
|
)
|
(
|
)%
|
||||||||||||
|
Other
|
(
|
)
|
(
|
)%
|
(
|
)
|
(
|
)%
|
|
|
%
|
|||||||||||||
|
Other foreign jurisdictions
|
|
|
%
|
|
|
%
|
(
|
)
|
(
|
)%
|
||||||||||||||
|
Effect of benefited income New Technological in Israel
|
(
|
)
|
(
|
)%
|
(
|
)
|
(
|
)%
|
(
|
)
|
(
|
)%
|
||||||||||||
|
Non-taxable or Non-deductible Items |
% | ( |
) | ( |
)% | % | ||||||||||||||||||
|
Changes in Unrecognized Tax Benefits
|
(
|
)
|
(
|
)%
|
|
|
%
|
(
|
)
|
(
|
)%
|
|||||||||||||
|
Effective Tax Rate
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
| G. | Tax Paid: |
|
|
Year ended December 31,
|
|||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Domestic (Israel)
|
|
|
|
|||||||||
|
Foreign:
|
||||||||||||
|
United States
|
|
|
|
|||||||||
|
Germany
|
|
|
|
|||||||||
|
Other
|
|
|
|
|||||||||
|
Total
|
|
|
|
|||||||||
| H. |
Effective Tax Rates:
|
| I. |
Tax Assessments:
|
| J. |
Undistributed earnings of foreign subsidiaries:
|
| K. |
Uncertain Tax Positions:
|
|
As of December 31,
|
||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Balance at the beginning of the year
|
|
|
|
|||||||||
|
Increase (decrease) related to prior year tax positions
|
(
|
)
|
|
(
|
)
|
|||||||
|
Increase related to current year tax positions
|
|
|
|
|||||||||
|
Balance at the end of the year*
|
|
|
|
|||||||||
| L. | Income from Other Sources in Israel: |
| A. |
Segments
|
| B. |
Sales by Geographic Area (as Percentage of Total Sales):
|
|
Year ended December 31,
|
||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
%
|
%
|
%
|
||||||||||
|
China
|
|
|
|
|||||||||
|
Taiwan, R.O.C.
|
|
|
|
|||||||||
|
Korea
|
|
|
|
|||||||||
|
USA
|
|
|
|
|||||||||
|
Other
|
|
|
|
|||||||||
|
Total
|
|
|
|
|||||||||
| C. | Sales by Major Customers (as Percentage of Total Sales): |
|
Year ended December 31,
|
||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
%
|
%
|
%
|
||||||||||
|
Customer A
|
|
|
|
|||||||||
|
Customer B
|
|
|
|
|||||||||
| D. |
Long-lived assets by geographic location:
|
|
As of December 31,
|
||||||||
|
2 0 2 5
|
2 0 2 4
|
|||||||
|
%
|
%
|
|||||||
|
Israel
|
|
|
||||||
|
US
|
|
|
||||||
|
Germany
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total long-lived assets (*)
|
|
|
||||||
| A. |
Hedging Activities
|
| B. |
Derivative Instruments
|
|
Derivative Assets Reported in Other Current Assets
|
Derivative Liabilities Reported in Other Current Liabilities
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 5
|
2 0 2 4
|
|||||||||||||
|
Derivatives designated as hedging instruments in cash flow hedge
|
|
|
|
|
||||||||||||
|
Year ended December 31,
|
||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Cost of revenues:
|
||||||||||||
|
|
(
|
)
|
(
|
)
|
|
|||||||
|
|
(
|
)
|
(
|
)
|
|
|||||||
|
|
(
|
)
|
(
|
)
|
|
|||||||
|
Operating expenses:
|
||||||||||||
|
|
(
|
)
|
(
|
)
|
|
|||||||
|
|
(
|
)
|
(
|
)
|
|
|||||||
|
|
(
|
)
|
(
|
)
|
|
|||||||
|
|
(
|
)
|
(
|
)
|
|
|||||||
|
Loss (gain) on derivative instruments
|
(
|
)
|
(
|
)
|
|
|||||||
|
Year ended December 31,
|
||||||||||||
|
2 0 2 5
|
2 0 2 4
|
2 0 2 3
|
||||||||||
|
Interest income
|
|
|
|
|||||||||
|
Amortization of issuance costs related to the Convertible Senior Notes (Note 10)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Exchange rate gain (loss), net
|
|
(
|
)
|
|
||||||||
|
Discrete tax reserve release linkage impact
|
(
|
)
|
|
|
||||||||
|
Bank charges
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Total
|
|
|
|
|||||||||
Number | Description |
101.INS | Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
101.SCH | Inline XBRL Taxonomy Extension Schema |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase |
104 | Cover page formatted as Inline XBRL and contained in Exhibit 101 |
NOVA LTD. | ||
By: | /s/ Gabriel Waisman Gabriel Waisman President and Chief Executive Officer | |
|
3
|
|
|
4
|
|
|
5
|
|
| 7 | |
| 8 | |
|
9
|
|
| 9 | |
| 10 | |
| 10 |
| 1. |
Introduction
|
| 2. |
Objectives
|
| 2.1. |
To closely align the interests of the Executive Officers with those of Nova’s shareholders in order to enhance shareholder value;
|
| 2.2. |
To align a significant portion of the Executive Officers’ compensation with Nova’s short and long-term goals and performance;
|
| 2.3. |
To provide the Executive Officers with a structured compensation package, including competitive salaries, performance-motivating cash and equity incentive programs and benefits, and to be able to present to each
Executive Officer an opportunity to advance in a growing organization;
|
| 2.4. |
To strengthen the retention and the motivation of Executive Officers in the long term;
|
| 2.5. |
To provide appropriate awards in order to incentivize superior individual excellency and corporate performance; and
|
| 2.6. |
To maintain consistency in the way Executive Officers are compensated.
|
| 3. |
Compensation Instruments
|
| 3.1. |
Base salary;
|
| 3.2. |
Benefits;
|
| 3.3. |
Cash bonuses;
|
| 3.4. |
Equity based compensation;
|
| 3.5. |
Change of control provision; and
|
| 3.6. |
Retirement and termination terms.
|
| 4. |
Overall Compensation - Ratio Between Fixed and Variable Compensation
|
| 4.1. |
This Policy aims to balance the mix of “Fixed Compensation” (comprised of base salary and benefits) and “Variable Compensation” (comprised of cash bonuses and equity-based compensation) in order to, among other
things, appropriately incentivize Executive Officers to meet Nova’s short- and long-term goals while taking into consideration the Company’s need to manage a variety of business risks.
|
| 4.2. |
The total annual bonus and equity-based compensation of each Executive Officer shall not exceed 90% of the total compensation package of such Executive Officer on an annual basis.
|
| 5. |
Inter-Company Compensation Ratio
|
| 5.1. |
In the process of drafting and updating this Policy, Nova’s Board and Compensation Committee have examined the ratio between employer cost associated with the engagement of the Executive Officers, including
directors, and the average and median employer cost associated with the engagement of Nova’s other employees (including contractor employees as defined in the Companies Law) (the “Ratio”).
|
| 5.2. |
The possible ramifications of the Ratio on the daily working environment in Nova were examined and will continue to be examined by Nova from time to time in order to ensure that levels of executive compensation,
as compared to the overall workforce will not have a negative impact on work relations in Nova.
|
| 6. |
Base Salary
|
| 6.1. |
A base salary provides stable compensation to Executive Officers and allows Nova to attract and retain competent executive talent and maintain a stable management team. The base salary varies among Executive
Officers, and is individually determined according to the educational background, prior vocational experience, qualifications, company’s role, business responsibilities and the past performance of
each Executive Officer.
|
| 6.2. |
Since a competitive base salary is essential to Nova’s ability to attract and retain highly skilled professionals, Nova will seek to establish a base salary that is competitive with base salaries paid to
Executive Officers in a peer group of other companies operating in technology sectors which are similar in their characteristics to Nova’s, as much as possible, while considering, among others, such companies’ size and characteristics
including their revenues, profitability rate, number of employees and operating arena (in Israel or globally), the list of which shall be reviewed and approved by the Compensation Committee at least every two years. To that end, Nova shall
utilize as a reference, comparative market data and practices, which will include a compensation survey that compares and analyses the level of the overall compensation package offered to an Executive Officer of the Company with
compensation packages in similar positions to that of the relevant officer) in such companies. Such compensation survey may be conducted internally or through an external independent consultant. Information on such compensation survey shall
be included in the proxy statement published in connection with the annual general meeting of Nova’s shareholders.
|
| 6.3. |
The Compensation Committee and the Board may periodically consider and approve base salary adjustments for Executive Officers. The main considerations for salary adjustment are similar to those used in initially
determining the base salary, but may also include change of role or responsibilities, recognition for professional achievements, regulatory or contractual requirements, budgetary constraints or market trends. The Compensation Committee and
the Board will also consider the previous and existing compensation arrangements of the Executive Officer whose base salary is being considered for adjustment. Any limitation herein based on the base salary shall be calculated based on the
monthly base salary applicable at the time of consideration of the respective grant or benefit.
|
| 7. |
Benefits
|
| 7.1. |
The following benefits may be granted to the Executive Officers in order, among other things, to comply with legal requirements:
|
| 7.1.1. |
Vacation days in accordance with market practice;
|
| 7.1.2. |
Sick days in accordance with market practice;
|
| 7.1.3. |
Convalescence pay according to applicable law;
|
| 7.1.4. |
Monthly remuneration for a study fund, as allowed by applicable law and with reference to Nova’s practice and the practice in peer group companies;
|
| 7.1.5. |
Nova shall contribute on behalf of the Executive Officer to an insurance policy or a pension fund, as allowed by applicable law and with reference to Nova’s policies and procedures and the practice in peer group
companies; and
|
| 7.1.6. |
Nova shall contribute on behalf of the Executive Officer towards work disability insurance, as allowed by applicable law and with reference to Nova’s policies and procedures and to the practice in peer group
companies.
|
| 7.2. |
Non-Israeli Executive Officers may receive other similar, comparable or customary benefits as applicable in the relevant jurisdiction in which they are employed. Such customary benefits shall be determined based
on the methods described in Section 6.2 of this Policy (with the necessary changes and adjustments).
|
| 7.3. |
In the event of relocation of an Executive Officer to another geography, such Executive Officer may receive other similar, comparable or customary benefits as applicable in the relevant jurisdiction in which he
or she is employed or additional payments to reflect adjustments in cost of living. Such benefits shall include reimbursement for out of pocket one-time payments and other ongoing expenses, such as housing allowance, car allowance, and home
leave visit, etc.
|
| 7.4. |
Nova may offer additional benefits to its Executive Officers, which will be comparable to customary market practices, such as, but not limited to: cellular and land line phone benefits, company car and travel
benefits, reimbursement of business travel including a daily stipend when traveling and other business related expenses, insurances, other benefits (such as newspaper subscriptions, academic and professional
studies), etc., provided, however, that such additional benefits shall be determined in accordance with Nova’s policies and procedures.
|
| 8. |
Annual Cash Bonuses - The Objective
|
| 8.1. |
Compensation in the form of an annual cash bonus is an important element in aligning the Executive Officers’ compensation with Nova’s objectives and business goals. Therefore, a pay-for-performance element, as
payout eligibility and levels are determined based on actual financial and operational results, in addition to other factors the Compensation Committee may determine, as well as individual performance.
|
| 8.2. |
An annual cash bonus may be awarded to Executive Officers upon the attainment of pre-set periodical objectives and individual targets determined by the Compensation Committee (and, if required by law, by the
Board) at the beginning of each calendar year, or upon engagement, in case of newly hired Executive Officers, taking into account Nova’s short and long-term goals, as well as its compliance and risk management policies. The Compensation
Committee and the Board shall also determine applicable minimum thresholds (based on annual budget revenue and/or positive non-GAAP operating income) that must be met for entitlement to the annual cash bonus (all or any portion thereof) and
the formula for calculating any annual cash bonus payout, with respect to each calendar year, for each Executive Officer. In special circumstances, as determined by the Compensation Committee and the Board (e.g., regulatory changes,
significant changes in Nova’s business environment, a significant organizational change and a significant merger and acquisition events), the Compensation Committee and the Board may modify the objectives and/or their relative weights
during the calendar year.
|
| 8.3. |
The total annual cash bonuses awarded to all of Nova’s Executive Officers shall not exceed 10% of Nova’s non-GAAP operating income.
|
| 8.4. |
In the event the employment of an Executive Officer is terminated prior to the end of a fiscal year, the Company may pay such Executive Officer a full annual cash bonus or a prorated one. Such bonus will become
due on the same scheduled date for annual cash bonus payments by the Company.
|
| 8.5. |
The actual annual cash bonus to be awarded to Executive Officers shall be approved by the Compensation Committee and the Board.
|
| 9. |
Annual Cash Bonuses - The Formula
|
| 9.1. |
The annual cash bonus of Nova’s Executive Officers, other than the chief executive officer (the “CEO”), will be based on performance objectives and a discretionary
evaluation of the Executive Officer’s overall performance by the CEO and subject to minimum thresholds. The performance objectives will be approved by Nova’s CEO at the commencement of each calendar year (or upon engagement, in case of
newly hired Executive Officers or in special circumstances as indicated in Section 8.2 above) on the basis of, but not limited to, company, division and individual objectives. The performance measurable objectives, which include the
objectives and the weight to be assigned to each achievement in the overall evaluation, will be based on:
|
| 9.1.1. |
Overall company performance measures, which are based on actual financial and operational results, such as revenues, sales, operating income and cash flow. At least 30% of the annual cash bonus of Nova’s
Executive Officers will be based on overall company performance measures; and
|
| 9.1.2. |
Divisional objectives which may include operational objectives, such as market share, initiation of new markets and products and operational efficiency, customer focus objectives, such as system availability
requirements and customer satisfaction, project milestones objectives, such as product implementation in production, product acceptance and new product penetration, and investment in human capital objectives, such as employee satisfaction,
employee retention and employee training and leadership programs.
|
| 9.2. |
The target annual cash bonus that an Executive Officer, other than the CEO, will be entitled to receive for any given calendar year, will not exceed 100% of such Executive Officer’s annual base salary.
|
| 9.3. |
The maximum annual cash bonus including for overachievement performance that an Executive Officer, other than the CEO, will be entitled to receive for any given calendar year, will not exceed 150% of such
Executive Officer’s annual base salary.
|
| 9.4. |
The annual cash bonus of Nova’s CEO will be mainly based on performance measurable objectives and subject to minimum thresholds as provided in Section 8.2 above. Such performance measurable objectives will be
determined annually by Nova’s Compensation Committee (and, if required by law, by Nova’s Board) at the commencement of each calendar year (or upon engagement, in case of newly hired CEO or in special circumstances as indicated in Section
8.2 above) on the basis of, but not limited to, company and personal objectives. These performance measurable objectives, which include the objectives and the weight to be assigned to each achievement in the overall evaluation, will be
categorized as described below:
|
| 9.4.1. |
Between 40%-60% will be based on overall company performance measures, which are based on actual financial and operational results, such as revenues, sales, operating income and cash flow; and
|
| 9.4.2. |
Between 20%-50% will be based on goals set forth in the Company’s annual operating plan and long-term plan, such as expansion of the Company’s organic growth engines and achieving strategic technology objectives.
|
| 9.5. |
The less significant part of the annual cash bonus granted to Nova’s CEO, and in any event not more than 30% of the annual cash bonus, may be based on a discretionary evaluation of the CEO’s overall performance
by the Compensation Committee and the Board based on quantitative and qualitative criteria.
|
| 9.6. |
Information on the CEO’s performance measurable objectives shall be included in the proxy statement published in connection with the annual general meeting of Nova’s shareholders.
|
| 9.7. |
The target annual cash bonus that the CEO will be entitled to receive for any given calendar year, will not exceed 150% of his or her annual base salary.
|
| 9.8. |
The maximum annual cash bonus including for overachievement performance that the CEO will be entitled to receive for any given calendar year, will not exceed 200% of his or her annual base salary.
|
| 10. |
Other Bonuses
|
| 10.1. |
Special Bonus. Nova may grant its Executive Officers a special bonus as an award for special achievements (such as in connection with mergers and acquisitions, offerings, achieving target budget or
business plan under exceptional circumstances or special recognition in case of retirement) at the CEO’s discretion (and in the CEO’s case, at the Board’s discretion), subject to any additional approval as may be required by the Companies
Law (the “Special Bonus”). The Special Bonus will not exceed 30% of the Executive Officer’s total compensation package on an annual basis. A Special Bonus can be paid, in whole or in part, in equity
in lieu of cash and the value of any such equity component of a Special Bonus shall be determined in accordance with Section 13.3 below.
|
| 10.2. |
Signing Bonus. Nova may grant a newly recruited Executive Officer a signing bonus at the CEO’s discretion (and in the CEO’s case, at the Board’s discretion), subject to any additional approval as may be
required by the Companies Law (the “Signing Bonus”). The Signing Bonus will not exceed twelve (12) monthly entry base salaries of the Executive Officer.
|
| 10.3. |
Relocation Bonus. Nova may grant its Executive Officers a special bonus in the event of relocation of an Executive Officer to another geography (the “Relocation Bonus”).
The Relocation bonus will include customary benefits associated with such relocation and its monetary value will not exceed 30% of the Executive Officer’s annual base salary.
|
| 11. |
Compensation Recovery (“Clawback”)
|
| 11.1. |
In the event of an accounting restatement, Nova shall be entitled to recover from its Executive Officers the bonus compensation or performance-based equity compensation in accordance with the clawback policy
adopted by the Company from time to time under the applicable stock exchange rules.
|
| 11.2. |
Nothing in this Section 11 derogates from any other “Clawback” or similar provisions regarding disgorging of profits imposed on Executive Officers by virtue of applicable securities laws or a separate contractual
obligation.
|
| 12. |
The Objective
|
| 12.1. |
The equity-based compensation for Nova’s Executive Officers is designed in a manner consistent with the underlying objectives in determining the base salary and the annual cash bonus, with its main objectives
being to enhance the alignment between the Executive Officers’ interests with the long-term interests of Nova and its shareholders, and to strengthen the retention and the motivation of Executive Officers in the long term. In addition,
since equity-based awards are structured to vest over several years, their incentive value to recipients is aligned with longer-term strategic plans.
|
| 12.2. |
The equity-based compensation offered by Nova is intended to be in a form of share options and/or other equity based awards, such as RSUs, in accordance with the Company’s equity incentive plan in place as may be
updated from time to time.
|
| 12.3. |
Equity-based compensation awarded by the Company to employees, Executive Officers or directors shall not be, in the aggregate, in excess of 10% of the Company’s share capital on a fully diluted basis at the date
of the grant.
|
| 12.4. |
All equity-based incentives granted to Executive Officers shall be subject to vesting periods in order to promote long-term retention of the awarded Executive Officers. Unless determined otherwise in a specific
award agreement or in a specific compensation plan approved by the Compensation Committee and the Board, grants to Executive Officers other than directors shall vest gradually over a period of between three (3) to five (5) years or based on
performance. The exercise price of options shall be determined in accordance with Nova’s Equity-Based Compensation Policy, the main terms of which shall be disclosed in the annual report of Nova.
|
| 12.5. |
All other terms of the equity awards shall be in accordance with Nova’s incentive plans and other related practices and policies. Accordingly, the Board may, following approval by the Compensation Committee,
extend the period of time for which an award is to remain exercisable and make provisions with respect to the acceleration of the vesting period of any Executive Officer’s awards, including, without limitation, in connection with a
corporate transaction involving a change of control, subject to any additional approval as may be required by the Companies Law.
|
| 13. |
General Guidelines for the Grant of Awards
|
| 13.1. |
The equity-based compensation shall be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, role
and the personal responsibilities of the Executive Officer.
|
| 13.2. |
In determining the equity-based compensation granted to each Executive Officer, the Compensation Committee and Board shall consider the factors specified in Section 13.1 above, and in any event the total fair
market value of an annual equity-based compensation at the time of grant (not including bonus paid in equity in lieu of cash) shall not exceed: (i) with respect to the CEO – the lower of 650% of the CEO’s annual base salary or 0.2% of the
market capitalization of the Company; and (ii) with respect to each of the other Executive Officers - 300% of such Executive Officer’s annual base salary.
|
| 13.3. |
The fair market value of the equity-based compensation for the Executive Officers will be determined according to acceptable valuation practices at the time of grant.
|
| 13.4. |
The Company may satisfy tax withholding obligations related to equity-based compensation by net issuance, sale-to-cover or any other mechanism as determined by the Board from time to time.
|
| 14. |
Advanced Notice Period
|
| 15. |
Adjustment Period
|
| 16. |
Additional Retirement and Termination Benefits
|
| 17. |
Non-Compete Grant
|
| 18. |
Limitation Retirement and Termination of Service Arrangements
|
| 19. |
Exculpation
|
| 20. |
Insurance and Indemnification
|
| 20.1. |
Nova may indemnify its directors and Executive Officers to the fullest extent permitted by applicable law, for any liability and expense that may be imposed on the director or the Executive Officer, as provided
in the indemnity agreement between such individuals and Nova, all subject to applicable law and the Company’s articles of association.
|
| 20.2. |
Nova will provide directors’ and officers’ liability insurance (the “Insurance Policy”) for its directors and Executive Officers as follows:
|
| 20.2.1. |
The limit of liability of the insurer shall not exceed the greater of $60 million or 30% of the Company’s shareholders equity based on the most recent financial statements of the Company at the time of approval
by the Compensation Committee; and
|
| 20.2.2. |
The Insurance Policy, as well as the limit of liability and the premium for each extension or renewal shall be approved by the Compensation Committee (and, if required by law, by the Board) which shall determine
that the sums are reasonable considering Nova’s exposures, the scope of coverage and the market conditions and that the Insurance Policy reflects the current market conditions, and it shall not materially affect the Company’s profitability,
assets or liabilities.
|
| 20.3. |
Upon circumstances to be approved by the Compensation Committee (and, if required by law, by the Board), Nova shall be entitled to enter into a “run off” Insurance Policy of up to seven (7) years, with the same
insurer or any other insurance, as follows:
|
| 20.3.1. |
The limit of liability of the insurer shall not exceed the greater of $60 million or 30% of the Company’s shareholders equity based on the most recent financial statements of the Company at the time of approval
by the Compensation Committee; and
|
| 20.3.2. |
The Insurance Policy, as well as the limit of liability and the premium for each extension or renewal shall be approved by the Compensation Committee (and, if required by law, by the Board) which shall determine
that the sums are reasonable considering the Company’s exposures covered under such policy, the scope of cover and the market conditions, and that the Insurance Policy reflects the current market conditions and that it shall not materially
affect the Company’s profitability, assets or liabilities.
|
| 20.4. |
Nova may extend the Insurance Policy in place to include cover for liability pursuant to a future public offering of securities. The Insurance Policy, as well as the additional premium shall be approved by the
Compensation Committee (and if required by law, by the Board) which shall determine that the sums are reasonable considering the exposures pursuant to such public offering of securities, the scope of cover and the market conditions and that
the Insurance Policy reflects the current market conditions, and it does not materially affect the Company’s profitability, assets or liabilities.
|
| 21. |
The following benefits may be granted to the Executive Officers in addition to, or in lieu of, the benefits applicable in the case of any retirement or termination of service upon a “Change of Control” or, where
applicable, in the event of a Change of Control following which the employment of the Executive Officer is terminated or adversely adjusted in a material way:
|
| 21.1. |
Vesting acceleration of outstanding options or other equity-based awards;
|
| 21.2. |
Extension of the exercising period of options or vesting of other equity-based awards for Nova’s Executive Officer for a period of up to one (1) year in case of an Executive Officer other than the CEO and two (2)
years in case of the CEO, following the date of employment termination; and
|
| 21.3. |
Up to an additional six (6) months of continued base salary and benefits following the date of employment termination (the “Additional Adjustment Period”). For avoidance of
doubt, such additional Adjustment Period shall be in addition to the advance notice and adjustment periods pursuant to Sections 14 and 15 of this Policy, but subject to the limitation set forth in Section 18 of this Policy.
|
| 21.4. |
A cash bonus not to exceed 150% of the Executive Officer’s annual base salary in case of an Executive Officer other than the CEO and 200% in case of the CEO.
|
| 24. |
Members of the Board and its chairperson may be entitled to receive an annual cash retainer for their service on the Board. Additional payments may be made to Board members for their service on the audit,
compensation, nominating, or other committees of the Board, as well as for their service as chairpersons of such committees. Members of the Board and its chairperson may also be granted (i) annual equity-based awards and (ii) welcome
equity-based awards. Any payment or award under this Section 23 shall be approved as required by applicable law. The compensation of the Company’s external directors, if elected, shall be in accordance with the Companies Regulations
(Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as amended by the Companies Regulations (Relief for Public Companies Traded on Stock Exchange Outside of Israel), 5760-2000, as such regulations may be
amended from time to time.
|
| 24. |
The compensation of the Company’s external directors, if elected, shall be in accordance with the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as
amended by the Companies Regulations (Relief for Public Companies Traded on Stock Exchange Outside of Israel), 5760-2000, as such regulations may be amended from time to time.
|
| 25. |
Notwithstanding the provisions of Section 22 above, in special circumstances, such as in the case of a professional director, an expert director or a director who makes a unique contribution to the Company, such
director’s compensation may be different than the compensation of all other directors.
|
| 26. |
In addition, members of the Board may be entitled to reimbursement of expenses when traveling abroad on behalf of Nova.
|
| 27. |
It is hereby clarified that the compensation stated under Section H will not apply to directors who serve as Executive Officers.
|
| 28. |
Nothing in this Policy shall be deemed to grant any of Nova’s Executive Officers or employees or any third party any right or privilege in connection with their employment by the Company. Such rights and
privileges shall be governed by the respective personal employment agreements or other separate compensation agreements entered into between Nova and the recipient of such rights and privileges. The Board may determine that none or only
part of the payments, benefits and perquisites detailed in this Policy shall be granted, and is authorized to cancel or suspend a compensation package or part of it.
|
| 29. |
An Immaterial Change in the Terms of Employment of an Executive Officer other than the CEO may be approved by the CEO, provided that the amended terms of employment are in accordance with this Policy. An
“Immaterial Change in the Terms of Employment” means a change in the terms of employment of an Executive Officer with an annual total cost to the Company not exceeding an amount equal to two (2) monthly base salaries of such employee.
|
| 30. |
In the event that new regulations or law amendment in connection with Executive Officers and directors compensation will be enacted following the adoption of this Policy, Nova may follow such new regulations or
law amendments, even if such new regulations are in contradiction to the compensation terms set forth herein.
|
|
As of the end of 2025:
|
||
|
Name of Subsidiary
|
|
Country of Incorporation
|
|
Nova Measuring Instruments, Inc.
|
|
Delaware, U.S.
|
|
Nova Measuring Instruments K.K.
|
|
Japan
|
|
Nova Measuring Instruments Taiwan Ltd.
|
|
Taiwan
|
|
Nova Measuring Instruments Korea Ltd.
|
|
Korea
|
|
Nova Measuring Instruments GmbH
|
|
Germany
|
|
Nova Measuring Instruments (Shanghai) Co., Ltd
|
China
|
|
|
Nova Measuring Instruments Singapore Pte Ltd
|
Singapore
|
|
|
Sentronics Metrology GmbH*
|
Germany
|
|
|
NOVA LTD.
INSIDER TRADING COMPLIANCE POLICY
|
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Contents
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Page
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1
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2
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2
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5
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7
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8
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10
|
|
| I. |
Introduction and Persons Covered by this Policy
|
| ● |
purchases of the Company’s securities from the Company or sales of the Company’s securities to the Company;
|
| ● |
exercises of share options or other equity awards or the surrender of shares to the Company in payment of the exercise price or in satisfaction of any tax withholding obligations in a manner permitted by the
applicable equity award agreement, or vesting of equity-based awards that, in each case, do not involve a market sale of the Company’s securities (the “cashless exercise” of a
Company share option through a broker does involve a market sale of the Company’s securities, and therefore would not qualify under this exception); or
|
| ● |
purchases or sales of the Company’s securities made pursuant to a plan adopted to comply with the Rule 10b5-1 under Securities Exchange Act of 1934, as amended (“Rule 10b5-1” and the “Exchange Act”, respectively) pursuant to the policies set forth below. For more information about Rule 10b5-1 trading plans, see Section VI
below.
|
| III. |
Explanation of Insider Trading
|
| A. |
What Information is Material?
|
| B. |
What is Nonpublic?
|
| C. |
Who is an Insider?
|
| D. |
Trading by Persons Other Than Insiders
|
| E. |
Penalties for Engaging in Insider Trading
|
| ● |
SEC and ISA administrative sanctions;
|
| ● |
securities industry self-regulatory organization sanctions;
|
| ● |
civil injunctions;
|
| ● |
damage awards to private plaintiffs;
|
| ● |
disgorgement of all profits;
|
| ● |
civil fines for the violator of up to three times the amount of profit gained or loss avoided;
|
| ● |
civil fines for the employer or other controlling person of a violator;
|
| ● |
criminal fines for individual violators; and
|
| ● |
jail sentences.
|
| F. |
Size of Transaction and Reason for Transaction Do Not Matter
|
| G. |
Presumption on Use of Material Nonpublic Information by Key Insiders
|
| IV. |
Statement of Procedures to Prevent Insider Trading
|
| A. |
Blackout Periods
|
| B. |
Pre-Clearance of All Trades by All Officers, Directors and Certain Key Employees
|
| C. |
Post-Termination Transactions
|
| D. |
Termination
|
| V. |
Additional Prohibited Transactions
|
| A. |
Short Sales
|
| B. |
Publicly Traded Options
|
| C. |
Hedging Transactions
|
| D. |
Purchases of the Company’s Securities on Margin; Pledging the Company’s Securities to Secure Margin or Other Loans
|
| E. |
Director and Executive Officer Cashless Exercises
|
| F. |
Standing Orders
|
| G. |
Partnership Distributions
|
| H. |
Gifts
|
| ● |
has been submitted to and pre-approved in writing and in advance by (i) both the Chief Executive Officer and the Chief Financial Officer or (i) either the Chief Executive Officer or the Chief Financial Officer
and one the Company's directors (the "Authorized Officers").
|
| ● |
includes a “Cooling Off Period” as required under Rule 10b5-1, which are as follows as of the date of adoption of this Policy:
|
| o |
for directors and officers that extends to the later of 90 days after adoption or modification of a Rule 10b5-1 trading plan or two (2) business days after filing the Form 20-F or Form 6-K with financial results
covering the fiscal quarter in which the Rule 10b5-1 trading plan was adopted, up to a maximum of 120 days; and
|
| o |
for employees and any other persons, other than the Company, that extends 30 days after adoption or modification of a Rule 10b5-1 trading plan;
|
| ● |
for directors and officers, includes a representation in the Rule 10b5-1 trading plan that the directors or officers is (1) not aware of any material nonpublic information about the Company or its securities; and
(2) adopting the Rule 10b5-1 trading plan in good faith and not as part of a plan or scheme to evade Rule 10b-5;
|
| ● |
has been entered into in good faith at a time when the individual was not in possession of material nonpublic information about the Company and not otherwise in a blackout period, and the person who entered into
the Rule 10b5-1 trading plan has acted in good faith with respect to the Rule 10b5-1 trading plan;
|
| ● |
either (1) specifies the amounts, prices, and dates of all transactions under the Rule 10b5-1 trading plan; or (2) provides a written formula, algorithm, or computer program for determining the amount, price, and
date of the transactions, and (3) prohibits the individual from exercising any subsequent influence over the transactions; and
|
| ● |
complies with all other applicable requirements of Rule 10b5-1.
|
| VII. |
Section 16: Insider Reporting Requirements (Applicable to Directors and Certain Officers)
|
| • |
Refrain from entering any trade order in the Company’s securities (except for transactions under pre-approved Rule 10b5-1 trading plans) without first verifying with the Company that the transaction was
pre-cleared and without complying with any applicable brokerage firm compliance procedures (including, as applicable, Rule 144 procedures).
|
| • |
Report before the close of business on the day of execution of the transaction to the Company (in writing via e-mail to the Compliance Officer, and if receipt is not verified in writing by the Company, also
verify receipt by telephone) the complete details of every transaction involving the Company’s securities, including gifts, transfers, pledges and all transactions under Rule 10b5-1 and other trading plans, including: the date of the
transaction, the type of transaction, the number of securities involved, and the applicable price.
|
| (i) |
directors
|
| (ii) |
officers, Corp vice presidents reporting directly to the Chief Executive Officer and headquarter personnel who have access to sensitive group information on a consolidated basis outside of the quarterly blackout
periods, in each case under (ii) as identified from time to time by the Chief Financial Officer must be pre-cleared by the Compliance Officer and in his absence the Chief Financial Officer.
|
| Signature |
Date |
| Signature |
Date |
| 1. |
I have reviewed this Annual Report of Nova Ltd.
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of
the company as of, and for, the periods presented in this report;
|
| 4. |
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
| a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
| c. |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
|
| d. |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to
materially affect, the company’s internal control over financial reporting; and
|
| 5. |
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of company’s board
of directors (or persons performing the equivalent function):
|
| a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and
|
| b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
| 1. |
I have reviewed this Annual Report of Nova Ltd.
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of
the company as of, and for, the periods presented in this report;
|
| 4. |
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
| a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
| c. |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
|
| d. |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to
materially affect, the company’s internal control over financial reporting; and
|
| 5. |
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of company’s board
of directors (or persons performing the equivalent function):
|
| a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and
|
| b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
| 1. |
This Annual Report on Form 20-F of Nova Ltd. (the “Company”) for the period ended December 31, 2025 (the “Report”) fully complies with the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended; and
|
| 2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Gabriel Waisman
Gabriel Waisman
President and Chief Executive Officer |
| 1. |
This Annual Report on Form 20-F of Nova Ltd. (the “Company”) for the period ended December 31, 2025 (the “Report”) fully complies with the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended; and
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| 2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Guy Kizner
Guy Kizner
Chief Financial Officer |