Nova .(NVMI)2025-02-20 11:46Debt and Financing - The company currently has short-term debt consisting of Convertible Senior Notes, with no readily available sources of other short-term or long-term debt financing [311]. Research and Development - The company participates in research and development programs sponsored by the Israeli Innovation Authority, which can provide grants covering up to 50% of pre-approved R&D expenses [318]. - The company is involved in European consortia under the Horizon 2020 & Horizon Europe programs, which facilitate cooperation between participating companies [314]. - The company must comply with local manufacturing obligations under the Innovation Law, requiring products developed with grants to be manufactured in Israel [319]. - The company has obligations related to intellectual property rights and technology transfer limitations under the Innovation Law, which may impact future business transactions [320]. Financial Position - As of December 31, 2023, the company's balance sheet included acquired intangible assets totaling approximately $39.2 million [332]. - The company’s inventory is stated at the lower of cost or net realizable value, with periodic evaluations to address slow-moving items and technological obsolescence [329]. - The company allocates the purchase price of acquired businesses to identifiable assets and liabilities based on their fair values, with any excess recorded as goodwill [330]. Revenue Recognition - The company recognizes revenue from sales of advanced process control systems, spare parts, labor hours, and service contracts under ASC 606 [325]. Taxation - The company is subject to income taxes in Israel, the United States, and various foreign jurisdictions, requiring judgment in evaluating uncertain tax positions [335]. - The company believes its tax reserves are reasonable, but final tax outcomes may differ from historical provisions and accruals [335]. - Adjustments to tax reserves are made based on changing facts, such as the closing of a tax audit [335]. - The company assesses the need for a valuation allowance against deferred tax assets by considering past operating results and future taxable income estimates [336]. - Changes in the determination of deferred tax assets will lead to adjustments in the valuation allowance, impacting the provision for income taxes [336]. Accounting Policies - Significant accounting policies and recent accounting pronouncements are discussed in Note 2 of the consolidated financial statements [337].