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Item 7. Management’s Discussion and Analysis

2025-08-28 compared with 2024-09-19 · 579 added, 507 removed, 1168 unchanged (48% of the section changed)

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For a discussion of the year ended June 30, 2024 compared to the year ended June 30, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended June 30, 2024, as filed with the SEC on September 19, 2024.

Accuray Incorporated is a radiation therapy company that develops, manufactures, sells and supports market-changing solutions that are designed to deliver radiation treatments for even the most complex cases, while making commonly treatable cases even more straightforward, to meet the full spectrum of patient needs.

We are a radiation therapy company that develops, manufactures, sells and supports market-changing solutions that are designed to deliver radiation treatments for even the most complex cases, while making commonly treatable cases even more straightforward, to meet the full spectrum of patient needs.

We believe in comparison to conventional linear accelerators, our treatment delivery, planning, and data management solutions provide better accuracy, flexibility, and control;

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The CyberKnife platform is also used by neurosurgeons specializing in radiosurgery to treat patients with tumors in the brain and spine, and neurologic and/or endocrine disorders.

In addition to these products, we also provide services, which include post-contract customer support (warranty period services and post-warranty services), installation services, training, and other professional services.

In addition to these products, we also

provide services which include post-contract customer support (warranty period services and post-warranty services), installation services, training, and other professional services.

Current Economic Conditions

We are subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation;

actions taken to counter inflation, including rising interest rates;

actions taken to counter inflation, including high interest rates;

foreign currency exchange rate fluctuations;

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tightening credit markets;

geopolitical concerns, such as the Russian-Ukraine and Israel-Hamas conflicts and increasing tension between China and the U.S., including with respect to Taiwan;

geopolitical concerns, such as the Russian-Ukraine and the Middle East conflicts and increasing tension between China and the U.S., including with respect to Taiwan;

uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program;

the upcoming U.S.

presidential election;

changes in government administration policy positions;

recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries;

as well as other factors that may emerge.

In particular, we are continuing to navigate supply chain and inflation challenges and adverse foreign currency exchange rate fluctuations, all of which continues to have a negative impact on our results of operations.

In particular, we are continuing to navigate supply chain and inflation challenges both of which continues to have a negative impact on our results of operations.

We expect that our customers’ business and our business will continue to be adversely impacted, directly or indirectly, by these macroeconomic and geopolitical issues.

Delays in deliveries and installations that originated from the COVID-19 pandemic as well as its effects on the global economic environment have occurred and are expected to continue, to some degree, through the remainder of calendar year 2024, which could have a negative impact on our revenue during such period.

Inflation and the ongoing supply chain challenges and logistics costs have materially affected our gross margins and net income (loss), and we expect that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistic expenses through at least the remainder of calendar year 2024, and potentially longer.

In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our revenue during fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026.

Inflation and the ongoing supply chain challenges and logistics costs have materially affected our gross margins and net income (loss), and we expect that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistics expenses through at least calendar year 2025, and potentially longer.

In addition, the Company expects inflation and the ongoing supply chain challenges and logistics costs to impact its cash from operations through at least calendar year 2025.

In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026.

The extent of the ongoing impact of these macroeconomic events on our business, our markets and on global economic activity however, is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time.

As a global company, approximately 70% of our raw materials and product components are sourced within the U.S.

and finished products are assembled and manufactured within the U.S.

with over 80% exported throughout the world.

There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company.

If existing tariffs increase, we would expect minimal shipments to China despite customer demand.

We are working to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results will be adversely impacted through at least the first half of fiscal year 2026.

Our past results may not be indicative of our future performance, and historical trends including conversion of backlog to revenue, income (loss) from operations, net income (loss), net income (loss) per share and cash flows may differ materially.

Accordingly, management is carefully evaluating our liquidity position, communicating with and monitoring the actions of our customers and suppliers, and reviewing our near-term financial performance as the uncertainty related to these factors continues to unfold.

We also continue to evaluate our operating expenses, including our real estate needs and continue to assess our operations and how and to what extent we will continue to utilize our current real estate assets.

We also continue to evaluate our operating expenses.

Our Board of Directors and our Compensation Committee determined that no payouts pursuant to the company bonus plan would be paid for fiscal year 2025 given that we would not have been compliant with the debt covenants in effect at the beginning of fiscal year 2025 and to reduce operating expenses and conserve cash in light of the uncertain macroeconomic environment due to tariffs.

We also continue to evaluate our real estate needs and continue to assess our operations and how and to what extent we will continue to utilize our current real estate assets.

The risks related to our business, including further discussion of the impact and possible future impacts of current economic conditions on our business, are further described in the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

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The length of time between receipt of a signed contract and revenue recognition is generally governed by the time required by the customer to build, renovate or prepare the treatment room for installation of the platform.

We report our customer revenues in four geographic regions:

the Americas, EIMEA, Asia Pacific and Japan.

We report our customer revenues in five geographic regions:

the Americas, EIMEA, Japan, China and Asia Pacific.

The Americas region includes the United States, Canada and Latin America.

The EIMEA region includes Europe, India, the Middle East and Africa.

The Asia Pacific region consists of Asia, Australia and New Zealand.

The EIMEA region

includes Europe, India, the Middle East and Africa.

The Asia Pacific region consists of Asia (excluding Japan and China), Australia and New Zealand.

In the United States, we primarily market directly to customers, including hospitals and stand-alone treatment facilities, through our sales organization we also market to customers through sales agents and group purchasing organizations.

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Accuray Asia has a 49% ownership interest in the JV and the CIRC Subsidiary has a 51% ownership interest in the JV.

With the receipt of the necessary permits and licenses to operate, the JV has begun selling products in China, much like a distributor.

The JV has recently begun to manufacture and sell a locally branded “Made in China” radiotherapy device, the Tomo C radiation therapy system, in the Class B license category.

The JV sells our products in China, much like a distributor and also manufactures and sells a locally branded “Made in China” radiotherapy device, the Tomo C radiation therapy system, in the Class B license category.

We believe this strategy will allow us to best maximize both near and longer-term opportunities in China.

In September 2023, we received approval for our Class B device from the National Medical Products Administration (“NMPA”) and our Accuray Precision Treatment Planning System for the Class B

device was approved by the NMPA in June 2024.

In September 2023, we received approval for our Class B device from the National Medical Products Administration (“NMPA”) and our Accuray Precision Treatment Planning System for the Class B device was approved by the NMPA in June 2024.

The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems, including the Radixact SynC and CyberKnife S7 Systems, which received NMPA approval in January 2025.

The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems.

Restructuring

On October 25, 2023, we informed affected employees of a cost savings initiative (the “2024 restructuring initiative”) to reduce operating costs resulting in the elimination of approximately 5.9 percent of our global workforce.

In the year ended June 30, 2024, we incurred restructuring charges of $2.6 million.

These charges are cash-based and are primarily related to severance expenses and other one-time termination benefits.

We recorded the restructuring charges of the affected employees in their respective department cost center.

The restructuring charges recorded during the year ended June 30, 2024 are as follows:

cost of sales $0.2 million, research and development $1.7 million, sales and marketing $0.1 million, and general and administrative $0.6 million.

At June 30, 2024, we have completed the 2024 restructuring initiative.

There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company.

In order for the product portion of a system sales agreement to be included in backlog, it must meet the following criteria:

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Our backlog includes contractual agreements with our customers for the purchase of our CyberKnife or TomoTherapy platforms, including the Radixact Systems and related upgrades.

The amount of backlog recognized into revenue is primarily impacted by three items:

The amount of backlog recognized into revenue is primarily

impacted by three items:

cancellations, age-outs and age-ins, and foreign currency fluctuations.

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Gross orders are defined as the sum of new orders recorded during the period, adjusted for any revisions to existing orders during the period.

Gross orders increased by $31.1 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to a $34.3 million increase in CyberKnife System gross orders and upgrades partially offset by a $3.2 million decrease in TomoTherapy System gross orders and upgrades.

The increase in gross orders were primarily due to an increase in system gross orders from the EIMEA region and Latin America.

Gross orders decreased by $54.1 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, mostly due to a decrease in gross orders from the Americas region.

Our book-to-bill ratio is defined as gross orders for the period divided by product revenue for the period.

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Net orders are defined as gross orders, less cancellations, age-outs net of age-ins, foreign exchange and other adjustments during the period.

Net orders increased by $28.0 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to an increase in gross orders partially offset by unfavorable foreign exchange rate fluctuations.

Net orders decreased by $33.7 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to the decrease in gross orders, partially offset by $6.8 million in lower cancellations and $8.0 million in favorable foreign exchange currency impacts.

Results of Operations

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(Dollars in thousands)

Products (a) (c)

Products revenue as a percentage of net revenue

Service revenue as a percentage of net revenue

a) Includes sales of products to the JV, an equity method investment, of $77,497 during the year ended June 30, 2024, $55,658 during the year ended June 30, 2023, and $45,545 during the year ended June 30, 2022, respectively.

b) Includes sales of services to the JV, an equity method investment, of $15,039 during the year ended June 30, 2024, $10,919 during the year ended June 30, 2023, and $10,332 during the year ended June 30, 2022, respectively.

c) The year ended June 30, 2024 includes revenue from certain upgrades that were recorded in services net revenue during the years ended June 30, 2023 and June 30, 2022.

Products net revenue increased by $1.0 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, mostly driven by a higher average sale price per unit and certain upgrades, partially offset by lower volume of shipments of system units of our TomoTherapy System and CyberKnife System.

Products net revenue was negatively impacted by reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the Americas region during fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026.

Services net revenue decreased by $2.0 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to a $10.5 million decrease in revenue from the purchase of spare parts from customers, lower installation activity and systems activation at customer locations and certain upgrades, partially offset by a $8.5 million increase in revenue from service contracts as a result of an increase in our installed base.

Services revenue as a percentage of net revenue

a) Includes sales of products to the JV, an equity method investment, of $101,563 during the year ended June 30, 2025, and $77,497 during the year ended June 30, 2024, respectively.

b) Includes sales of services to the JV, an equity method investment, of $18,521 during the year ended June 30, 2025, and $15,039 during the year ended June 30, 2024, respectively.

Products net revenue increased by $3.4 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, mostly driven by a $5.9 million increase in revenue from upgrades, partially offset by lower revenue from unit sales due to product mix.

Services net revenue increased by $8.5 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to a $4.0 million increase in revenue from service contracts as a result of growth in our installed base and a $3.8 million increase in revenue from the purchase of spare parts from customers.

Net revenue by geographic region, which is based on the shipping location of our customer, is as follows:

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(Dollars in thousands)

Asia Pacific, excluding China

Net revenue decreased $1.1 million during the year ended June 30, 2024, as compared to the same period in the prior fiscal year primarily due to a lower volume of shipment of systems and service revenues from the Americas region, mostly offset by increase in the volume of shipment of systems from China as well as India and the Middle East within our EIMEA region.

During the year ended June 30, 2024, Japan net revenue included a $4.9 million unfavorable impact from foreign currency exchange rate fluctuations and EIMEA net revenue had a $4.2 million favorable impact from foreign currency exchange rate fluctuations.

Gross profit by sales classification is as follows:

Net revenue increased $12.0 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024.

Products net revenue increased primarily due to a higher volume of the shipment of systems in our China and APAC regions, partially offset by a decrease in the volume of the shipment of systems in our EIMEA region.

Services net revenue increased primarily in our EIMEA, China and Japan regions, partially offset by a decrease in services net revenue in our Americas region.

The decrease in net revenue from EIMEA was due to lower product sales in fiscal year 2025, which was impacted by geopolitical disruptions in the region.

Gross profit is as follows:

Years Ended June 30,

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Total gross profit as a percentage of net revenue

Gross profit decreased by $11.0 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, due to an increase of $6.2 million in service parts consumption which was partially from a supplier quality issue in fiscal year 2024, and a $4.1 million increase in the net deferred profit margin on sales to the JV.

Gross profit increased by $4.0 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, due to an increase in net revenue, partially offset by a $3.6 million increase in the net deferred gross profit on sales to the JV.

Operating Expenses

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Total operating expenses as a percentage of net revenue

Research and development expenses decreased by $7.4 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to a $5.0 million decrease in compensation and benefit costs as a result of lower headcount from the 2024 restructuring initiative in the second quarter of fiscal year 2024 and lower bonus compensation expense in fiscal year 2024.

Selling and marketing expenses decreased by $3.6 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to $2.7 million in lower compensation and benefit costs as a result of the restructuring initiative in fiscal year 2023 and lower bonus compensation expense in fiscal year 2024, and a $0.6 million decrease in consulting costs due to cost-cutting efforts, partially offset by a $0.4 million increase in trade show expenses.

General and administrative expenses increased by $1.8 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to an increase of $2.9 million in support consulting costs and $1.4 million in amortization expenses, both related to the implementation of our enterprise resource planning system in the first quarter of fiscal year 2024, a $1.3 million increase in facility expenses, a $0.6 million increase in legal and accounting expenses, and a $0.5 million increase in travel expenses, which were partially offset by $3.0 million decrease in compensation and benefit costs due to lower bonus compensation and stock-based compensation expenses in fiscal year 2024, and a decrease in bad debt expense due to a $2.0 million bad debt reserve for a specific customer recorded in the fourth quarter of fiscal year 2023.

Income on equity method investment

Research and development expenses decreased by $1.8 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to $2.5 million in lower compensation and benefits resulting from a reduction in headcount in fiscal year 2025 driven by our restructuring program in fiscal year 2024, and $1.7 million for the capitalization of internal labor for software development to be sold, partially offset by $1.1 million in higher spending for research and development projects and an a $1.0 million increase in facility and information system costs.

Selling and marketing expenses increased by $0.7 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to investments in our sales operations infrastructure and an increase in travel costs, partially offset by a $1.6 million decrease in commissions due to lower sales in the Americas and EIMEA regions in fiscal year 2025.

General and administrative expenses decreased by $2.2 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to a $2.1 million decrease in consulting costs driven by the completion of the implementation of our ERP system in fiscal year 2024 and a $1.9 million reduction in rental expense due to cost savings measures, partially offset by a $1.9 million increase in compensation and benefits that was driven by merit increases and stock-based compensation.

Income from equity method investment

Years Ended June 30,

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Income from equity method investment

Income on equity method investment decreased by $0.7 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to the JV having higher operating expenses, partially offset by an increase in the JV service revenue.

Income from the equity method investment increased by $2.9 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily as a result of an increase in revenues from the JV.

Interest expense

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(Dollars in thousands)

Interest expense

Interest expense increased $1.0 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to higher interest rates on the outstanding balances on our Credit Facilities.

Other expense, net

Contractual interest coupon

Accrued paid-in-kind interest

Amortization of debt financing costs and discount for warrants issued to lenders

Total interest expense

Interest expense increased $1.3 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to interest paid-in-kind accrued on the new Term Loan Facility and additional debt financing costs related to the new Term Loan Facility.

Gain on extinguishment of debt

We recorded a $1.5 million gain on the extinguishment of a portion of our Convertible Notes and our prior term loan facility.

The gain on extinguishment is comprised of a $2.4 million gain on the settlement of shares issued to the holders of the Convertible Notes offset by $0.9 million from the write-off of unamortized debt issuance costs.

Loss from change in fair value of warrant liability

We recorded a $0.5 million loss due to the change in the fair value of the Penny Warrants from the issuance date through June 30, 2025.

Other income (expense), net

Years Ended June 30,

(Dollars in thousands)

Foreign currency transaction loss

Total other expense, net

Other expense, net, increased by $1.4 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily driven by foreign currency transaction losses.

Interest income

Foreign currency exchange gain (loss)

Costs for foreign currency forward contracts

Total other income (expense), net

Other income (expense), net, increased by $3.1 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily driven by foreign currency transaction gains in fiscal year 2025.

Provision for income taxes

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Provision for income taxes

Provision for income taxes increased by $1.2 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to an increase in foreign earnings and deferred tax liability on unremitted foreign earnings.

Provision for income taxes decreased by $1.0 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to lower foreign earnings and lower deferred tax liabilities on unremitted foreign earnings not considered permanently reinvested.

Liquidity and Capital Resources

At June 30, 2025, we had $57.4 million in cash and cash equivalents.

Cash from operations could be affected by various risks and uncertainties, including, but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, instability in the banking sector and the risks included in Part I, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least the remainder of calendar year 2024, if not longer.

Cash from operations could be affected by various risks and uncertainties, including, declines in our revenue, particularly without a corresponding decrease in our expenses, the

timing of payments from our customers and our expenditures, as well as but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, and the risks included in Part I, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least calendar year 2025.

In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted net revenue since fiscal year 2024, and we expect that this will continue to have an impact through fiscal year 2026.

Based on our cash and cash equivalents balance, available debt facilities, current business plan and revenue prospects, we believe we will have sufficient cash resources and anticipated cash flows to fund our operations for at least the next 12 months.

However, we continue to critically review our liquidity and anticipated capital requirements in light of the significant uncertainty created by macroeconomic conditions.

On October 25, 2023, we informed affected employees of the 2024 restructuring initiative.

During the year ended June 30, 2024, we incurred a charge of $2.6 million.

As of June 30, 2024, we have completed the 2024 restructuring initiative.

Our liquidity and cash flows have been and could continue to be materially impacted by current macroeconomic factors, including facility closures, supply chain disruptions, inflation, foreign currency exchange rate fluctuations, increased volatility in the financial markets, uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program, the upcoming U.S.

presidential election, instability in the banking sector, tightening of credit markets which could

impact debt availability.

Our liquidity and cash flows have been and could continue to be materially impacted by factors other than our cash from operations and factors that are not in our control, such as current macroeconomic factors, including facility closures, supply chain disruptions, inflation, foreign currency exchange rate fluctuations, increased volatility in the financial markets, uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program, changes in government administration policy positions, recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries, and tightening of credit markets which could impact debt availability.

These factors have and could continue to negatively impact our business operations and cash flows for the foreseeable future, including reductions in revenue, decreases in gross margin and delays in payments from customers, as well as declines or delays in the conversion of backlog to revenue.

Certain of our revenue may not be collectible to the extent our customers suffer financial difficulty and, in fiscal 2023, we increased our bad debt reserve to account for potentially uncollectible revenue.

For example, in the United States, one customer declared bankruptcy in fiscal 2023 causing us to increase our bad debt reserve due to the expectation that they will be unable to pay us.

Accordingly, there remain uncertainties as to how the current macroeconomic environment will impact our business, results of operations, access to sources of liquidity and financial condition in the future.

As a result, we are unable to predict with certainty the impacts of these factors on our ability to maintain compliance with the financial covenants contained in the credit and security agreements related to our credit facilities.

In May 2021, we issued $100.0 million aggregate principal amount of 3.75% Convertible Senior Notes due 2026 under an indenture between us and The Bank of New York Mellon Trust Company, N.A., as trustee.

Concurrently, with the issuance of the notes, in May 2021, we entered into a senior secured credit agreement with Silicon Valley Bank, individually as a lender and agent, and the other lenders (the “Existing Credit Agreement”), which provides for a five-year $80 million term loan facility (the "Term Loan Facility") and a $40 million revolving credit facility (the “Revolving Credit Facility”).

As of June 30, 2024, we had an outstanding balance under the Term Loan Facility of $64.0 million and Revolving Credit Facility of $10.0 million.

During the year ended June 30, 2024, the weighted average effective interest rate on the Term Loan Facility was 8.6% and weighted average effective interest rate on the Revolving Credit Facility, including the unused commitment fee, was 9.5%.

See Note 9, " Debt" to the Notes to the consolidated financial statements for further information regarding the Existing Credit Agreement and 3.75% Convertible Senior Notes due 2026.

Also see Note 8, "Commitments and Contingencies " to the Notes to the consolidated financial statements for further information regarding our cash commitments related to our debt.

We may also experience other, unexpected impacts to our business, including matters discussed in the Part I, Item 1A titled “Risk Factors.” While we were in compliance with such covenants for the period ended June 30, 2024, failure to meet the covenant requirements in the future could cause us to be in default and the maturity of the related debt could be accelerated and become immediately payable.

These restrictions could adversely affect our ability to finance our future operations or capital needs, withstand a future downturn in our business or the economy in general, engage in business activities, including future opportunities that may be in our interest, and plan for or react to market conditions or otherwise execute our business strategies.

Our ability to comply with the covenants and other terms governing the Credit Facilities will depend in part on our future operating performance.

In addition, because substantially all of our assets are pledged as a security under the Credit Facilities, if we are not able to cure any default or repay outstanding borrowings, such assets are subject to the risk of foreclosure by our lenders.

This may require us to obtain waivers or amendments to the credit and security agreement in order to maintain compliance and there can be no certainty that any such waiver or amendments will be available, or what the cost of such waiver or amendment, if obtained, would be.

For example, in April 2024, the Company entered into the Third Amendment (the “ Third Amendment”) to the Existing Credit Agreement to update the calculation of Consolidated EBITDA (as defined in the Existing Credit Agreement) to maintain compliance with the debt covenants as of March 31, 2024.

If we are unable to obtain necessary waivers or amendment and the debt under such credit facility is accelerated, we would be required to obtain replacement financing at prevailing market rates, which may not be favorable to us.

There is no guarantee that we would be able to satisfy our obligations if any of our indebtedness is accelerated.

Additionally, the undistributed earnings of our foreign subsidiaries at June 30, 2024, for all countries except Japan, France, Switzerland and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise.

Certain of our revenue may not be collectible to the extent our customers suffer financial difficulty.

There remain uncertainties as to how the current macroeconomic environment will impact our business, results of operations, access to sources of liquidity and financial condition in the future.

As a result, we are unable to predict with certainty the impact of these factors on our ability to maintain compliance with the financial covenants contained in the Financing Agreement (as defined below).

On June 6, 2025, we entered into a senior secured credit agreement (the “Financing Agreement”) by and among the Company, as borrower (the “Borrower”), TCW Asset Management Company LLC, a leading global asset manager (“TCW”), as collateral agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and as administrative agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”, and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”), and certain other parties signatory thereto.

The Financing Agreement provides for (a) $150 million of new five-year term loan facilities (the “Term Loan Facilities”), (b) a new $20 million delayed draw term loan facility (the “Delayed Draw Facility”) and (c) a new $20 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facilities and Delayed Draw Facility, the “Facilities”).

The proceeds of the Term Loan Facilities were used to fully refinance our existing senior secured indebtedness, which provided for a five-year $80 million term loan facility (the "Prior Term Loan Facility") and a $40 million revolving credit facility (the “Prior Revolving Credit Facility”), and which had $58.0 million and $17.0 million of outstanding balances of the Prior Term Loan Facility and Prior Revolving Credit Facility, respectively, and to fund the aggregate cash payment of approximately $68.5 million as part of the Exchange (as defined below) of a portion of the Company’s 3.75% Convertible Senior Notes due 2026 (the “Convertible Notes”).

The proceeds of the Delayed Draw Facility may be used to fund any future repurchases of outstanding Convertible Notes.

The proceeds of loans drawn under the Revolving Credit Facility will be used to fund the general working capital needs and general corporate purposes of the Company and its subsidiaries.

The Facilities’ stated maturity date is June 6, 2030.

On June 6, 2025, concurrently with its entry into the Financing Agreement, the Company issued detachable warrants to purchase the Company’s common stock to certain of its lenders (the “Warrant Holders”) under the Financing Agreement.

The Warrant Holders were issued warrants to purchase (i) 17,180,710 shares of common stock with an exercise price of $1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 (the “Premium Warrants”) and (ii) 6,247,531 shares of common stock with an exercise price of $0.01 per share (“Penny Warrants” and together with the Premium Warrants, the “Warrants”), exercisable immediately and expiring on June 6, 2032.

No Penny Warrants were exercised as of June 30, 2025.

Pursuant to the terms of the Financing Agreement, if the Company uses the Delay Draw Facility, the Company will be obligated to issue additional detachable warrants on terms substantially similar to the Warrants to certain of its lenders under the Financing Agreement.

The Warrants have certain anti-dilution protection provisions, including price protection anti-dilution protection in the event that we sell stock at a price below $1.00 in the case of the Penny Warrants and $1.25 in the case of the Premium

We agreed to issue the Warrants in connection with, and to induce the lenders to enter into, the Financing Agreement.

Interest on the borrowings under the Facilities is payable in arrears on the applicable interest payment date at an interest rate equal to, at the Company’s option, either:

(i) a term SOFR-based rate (subject to a 2.00% per annum floor), plus an applicable margin of 8.50%, per annum or (ii) a base rate (subject to a 3.00% per annum floor), plus an applicable margin of 7.50% per annum .

The agreement provides the option for payment-in-kind (“PIK”) interest up to 6.00% per annum (subject to an increase in applicable margin of 1 / 3 of 1.00% per annum for each 1.00% per annum of interest elected to be paid in kind), which PIK interest will be capitalized on the applicable interest payment date and will be added to the then-outstanding principal amount of the term loan.

In June 2025, we accrued $0.6 million in PIK interest and we elected the maximum PIK option for the first interest payment date of fiscal year 2026.

The Financing Agreement requires the Borrower to pay the lenders with commitments under the Revolving Credit Facility an unused commitment fee equal to 0.50% per annum of the average unused portion of the Revolving Credit Facility.

Commitments and Contingencies to the consolidated financial statements for future cash payments related to the Term Loan Facilities.

In addition, on June 5, 2025, we entered into separate, privately-negotiated exchange agreements with a limited number of existing holders of the Convertible Notes (the “Convertible Noteholders”) to exchange (the “Exchange”) approximately $82.0 million aggregate principal amount of the Convertible Noteholders’ existing Convertible Notes for (i) an aggregate of 8,881,579 shares of the Company’s common stock (the “Shares”), valued at $1.52 per share based on the closing stock price on June 5, 2025, or $13.5 million in the aggregate and (ii) an aggregate cash payment of approximately $68.5 million.

On June 11, 2025, we issued the Shares to the Convertible Noteholders valued at $1.25 per share based on the closing stock price on June 11, 2025, which resulted in a $2.4 million gain.

Following the closing of the Exchange, approximately $18.0 million aggregate principal amount of the Convertible Notes remain outstanding and will be due on June 1, 2026.

We intend to use operating cash to pay the remaining balance of the Convertible Notes, but we can also access the $20.0 million Delayed Draw Facility to fund the repayment if necessary.

The Convertible Notes are classified as short-term debt on consolidated balance sheets.

Additionally, the undistributed earnings of our foreign subsidiaries as of June 30, 2025, for all countries except Japan, France, Switzerland and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise.

Future repatriation of our foreign earnings could be subject to income taxes.

As of June 30, 2024, we had $9.5 million of cash and cash equivalents at our foreign subsidiaries.

As of June 30, 2025, we had $10.5 million of cash and cash equivalents at our foreign subsidiaries that are considered to be indefinitely reinvested.

If such funds were repatriated, there will be additional foreign tax withholdings imposed, depending on the country from which the funds were repatriated.

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Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Cash Flows From Operating Activities

Net cash used in operating activities was $11.9 million during the year ended June 30, 2024, resulting primarily from a $21.9 million decrease from the net changes in assets and liabilities, and a net loss of $15.5 million offset by a $25.6 million increase in non-cash items.

• Non-cash items primarily consisted of share-based compensation expense of $9.5 million, provision for inventories write-down of $6.0 million, depreciation and amortization expense of $5.9 million, and a $4.1 million increase in the net deferred profit margin on sales to the JV, partially offset by income from our equity method investment of $1.8 million.

Net cash provided by operating activities was $2.9 million during the year ended June 30, 2025, resulting primarily from an increase of $22.7 million in non-cash items partially offset by a decrease of $18.2 million in the net changes in assets and liabilities.

• Non-cash items primarily consisted of share-based compensation expense of $10.2 million, a $7.7 million increase in the net deferred gross profit on sales to the JV, $6.2 million in depreciation and amortization expense, partially offset by $4.7 million in income from our equity method investment.

• The major contributors to the decrease in net changes of assets and liabilities during the year ended June 30, 2025 were as follows:

a $16.5 million decrease in accrued liabilities primarily due to the payment of value added tax payables and a decrease in accrued bonus compensation;

a $15.8 million increase in accounts receivable primarily due to an increase in system sales during the fourth quarter of fiscal year 2024;

a $6.6 million decrease in customer advances due to delivery of orders, a $4.0 million increase in inventories primarily due to increased costs for parts;

a $2.5 million decrease in deferred revenue primarily due to the timing of revenue recognition, partially offset by a $17.4 million increase in accounts payable due to the timing of payments, and a $6.1 million decrease in prepaid and other assets primarily due to a decrease in value added tax receivables partially offset by a $2.5 million dividend receivable from our JV.

a $18.7 million decrease in accounts payable due to the timing of payments, and a $9.1 million increase in inventories primarily due to increased costs for parts, partially offset by a $13.4 million decrease in accounts receivable primarily due to improved collections fiscal year 2025.

Cash Flows From Investing Activities

Net cash used in investing activities was $3.6 million during the year ended June 30, 2024, was due to the purchase of property and equipment.

Net cash used in investing activities was $8.5 million during the year ended June 30, 2025, was due to spending $4.3 million for the purchase of property and equipment and $4.2 million in costs for capitalized investments for software to be sold.

Cash Flows From Financing Activities

Net cash used in financing activities was $4.0 million during the year ended June 30, 2024 and was due to the scheduled payment of $6.0 million of the principal amount outstanding on our Term Loan Facility partially offset by $2.2 million in proceeds from the issuance of common stock to employees from employee stock plans.

We borrowed $5.0 million on our Revolving Credit Facility in May 2024, and then repaid the $5.0 million in June 2024.

Net cash used in financing activities was $4.3 million during the year ended June 30, 2025 and was due to paying $13.1 million in debt financing costs, which included $4.8 million in debt discount costs, for the new Term Loan Facility.

The $150.0 million of proceeds from the new Term Loan Facility was used to refinance the Convertible Notes, Prior Term Loan Facility and Prior Revolving Credit Facility.

As part of the refinancing, the Company paid $68.5 million to settle a portion of the Convertible Notes, and $58.0 million and $17.0 million to fully settle the outstanding balances of the Prior Term Loan Facility and Prior Revolving Credit Facility, respectively.

Operating Capital and Capital Expenditure Requirements

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• Number and timing of acquisitions and other strategic transactions;

• Servicing and maturity of our current future indebtedness, including interest rates;

• Our ability to refinance our current indebtedness in a timely manner, and servicing and maturity of our current and future indebtedness, including interest rates;

• The implementation of our cost savings initiatives, including the reduction of our workforce;

• The impact of inflation on our expenses;

• The unpredictable impact of the macroeconomic environment, including on collections, supply chain, and logistics.

• The impact of the macroeconomic environment, including on collections, supply chain, and logistics.

We believe that our current cash and cash equivalents balance will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months.

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Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to the delivery of goods or performance of services.

Our long-term material cash requirements include lease obligations.

Our long-term material cash requirements include principal and interest payments and lease obligations.

See Note 4, “Leases” to the Notes to the consolidated financial statements for further information.

We experienced rising costs for certain materials, including increased logistics and duties costs that adversely affected our gross margins and net income (loss), and had a material effect on our business, financial condition and results of operations for fiscal years 2023 and 2024.

We expect that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistic expenses in fiscal year 2025 as we are unable to pass all of these increased costs to our customers.

In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least the remainder of calendar year 2024, if not longer.

In recent years, we experienced rising costs for certain materials, including increased logistics and duties costs that adversely affected our gross margins and net income (loss), and had a material effect on our business, financial condition and results of operations.

Gross margins and net income (loss) may continue to be adversely affected by increased material costs and freight and logistics expenses through at least calendar year 2025, and potentially longer, as we are unable to pass all of these increased costs to our customers.

In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least calendar year 2025.

Continued pressure from inflationary factors, such as further increases in the cost of materials for our products, cost of labor, interest rates, overhead costs, logistics and duties costs could further exacerbate these effects and harm our business, operating results, and financial condition.

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The methods, estimates and judgments that we use in applying our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain.

Management believes the critical accounting policies and estimates are those related to revenue recognition and the assessment of stand-alone selling price ("SSP"), allowance for credit losses, valuation of inventories, and the valuation of equity method investments.

Management believes the critical accounting policies and estimates are those related to revenue recognition and the assessment of stand-alone selling price ("SSP"), and the valuation of inventories.

Revenue Recognition and the Assessment of Stand-Alone Selling Price

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For sale arrangements that contain multiple performance obligations, we account for individual products and services separately if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer.

The SSP is determined based on observable prices at which we separately sell the products and services.

The SSP is determined based on observable prices at which we separately

sell the products and services.

If the SSP is not directly observable, then we will estimate the SSP considering market conditions, entity-specific factors, and information about the customer or class of customer that is reasonably available.

Allowance for Credit Losses

We evaluate the creditworthiness of our customers prior to authorizing shipment for all major sale transactions.

On no-less than a quarterly basis, we evaluate aged items in the accounts receivable aging report and provide an allowance in an amount we deem adequate for anticipated credit losses.

If our evaluation of our customers’ financial conditions does not reflect our future ability to collect all outstanding receivables, additional provisions may be needed and our operating results could be negatively affected.

Valuation of Inventories

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We regularly review inventory quantities on hand and adjust for excess and obsolete inventory based primarily on historical usage rates and our estimates of product demand to support future sales and service.

If our demand forecast for specific products is greater than

actual demand and we fail to reduce purchasing and manufacturing output accordingly, we could be required to write off inventory beyond the current reserve, which would negatively impact our gross margin.

Valuation of Equity Method Investments

We have an equity method investment in CNNC Accuray (Tianjin) Medical Technologies Co.

Ltd., our joint venture in China.

Our equity method investment is held at cost and adjusted for impairment when it would be deemed to be impaired.

We monitor this investment for events or circumstances indicative of a potential impairment, and we make appropriate reductions in carrying value if we determine that an impairment charge is required, based primarily on the financial condition or near term prospects of the investee.

If our demand forecast for specific products is greater than actual demand and we fail to reduce purchasing and manufacturing output accordingly, we could be required to write off inventory beyond the current reserve, which would negatively impact our gross margin.

QUANTITATIVE & QUALITAT IVE DISCLOSURES ABOUT MARKET RISK

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Interest Rate Risk

Our debt obligations consist of a variety of financial instruments that expose us to interest rate risk, including, but not limited to the Credit Facilities and our 3.75% Convertible Senior Notes due 2026.

The interest rates on the 3.75% Convertible Senior Notes due 2026 are fixed and the interest rate on the Credit Facilities are at variable rates, which are tied to a “prime rate” and the Secured Overnight Financing Rate (“SOFR”).

As of June 30, 2024, the Credit Facilities included borrowings under the Term Loan Facility of $64.0 million, and borrowings under the Revolving Credit Facility of $10.0 million.

The interest on the borrowings under the Credit Facilities is payable at an annual interest rate of reserve-adjusted, 90-day term SOFR (subject to a 0.50% floor) plus a margin between 2.50% and 3.25%.

If the amount outstanding under the Credit Facilities remained at this level for the next 12 months and interest rates increased or decreased by a 50 basis point change, our annual interest expense would increase or decrease, respectively, approximately $0.4 million.

Our debt obligations consist of a variety of financial instruments that expose us to interest rate risk, including, but not limited to the Financing Agreement and our Convertible Notes.

The interest rates on the Convertible Notes are fixed and the interest rate on the Term Loan Facilities are tied to a variable rate.

As of June 30, 2025, the Financing Agreement included borrowings under the Term Loan Facility of $150.0 million.

The interest on the borrowings under the Financing Agreement is payable at the Company’s option, either:

If the amount outstanding under the Financing Agreement remained at this level for the next 12 months and interest rates increased or decreased by a 50 basis point change, our annual interest expense would increase or decrease, respectively, approximately $0.8 million.

Refer to Note 7, Debt to our consolidated financial statements included in this Annual Report on Form 10-K for a discussion regarding our debt obligations.

Equity Price Risk

On May 13, 2021, we issued approximately $100.0 million aggregate principal amount of 3.75% Convertible Senior Notes due 2026.

Upon conversion, we can settle the obligation by issuing our common stock, cash or a combination thereof at an initial conversion rate equal to 170.5611 shares of common stock per $1,000 principal amount of the 3.75% Convertible Senior Notes due 2026, which is equivalent to a conversion price of approximately $5.86 per share of common stock, subject to adjustment.

There is no equity price risk if the share price of our common stock is below $5.86 upon conversion of the 3.75% Convertible Senior Notes due 2026.

For every $1 that the share price of our common stock exceeds $5.86, we expect to issue an additional $17.1 million in cash or shares of our common stock, or a combination thereof, if all of the 3.75% Convertible Senior Notes due 2026 are converted.

On May 13, 2021, we issued approximately $100.0 million aggregate principal amount of Convertible Notes.

Upon conversion, we can settle the obligation by issuing our common stock, cash or a combination thereof at an initial conversion rate equal to 170.5611 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to a conversion price of approximately $5.86 per share of common stock, subject to adjustment.

On June 5, 2025, as part of the Financing Agreement, we paid $82.0 million to the Convertible Note holders.

As of June, 30, 2025, the Company currently has $18.0 million Convertible Notes outstanding.

There is no equity price risk if the share price of our common stock is below $5.86 upon conversion of the Convertible Notes.

For every $1 that the share price of our common stock exceeds $5.86, we expect to issue an additional $3.1 million in cash or shares of our common stock, or a combination thereof, if all of the remaining Convertible Notes are converted.

FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA

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Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Stockholders’ Equity

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Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Accuray Incorporated (a Delaware corporation) and subsidiaries (the “Company”) as of June 30, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended June 30, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of June 30, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated September 19, 2024 expressed an adverse opinion.

We have audited the accompanying consolidated balance sheets of Accuray Incorporated (a Delaware corporation) and subsidiaries (the “Company”) as of June 30, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the two years in the period ended June 30, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of June 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated August 28, 2025 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Determination of standalone selling price

As described further in note 1 to the financial statements, the Company’s contracts with customers often include multiple performance obligations.

As described further in note 1 to the consolidated financial statements, the Company’s contracts with customers often include multiple performance obligations.

The Company applies the five steps of Financial Accounting Standards Board Topic 606, Revenue from Contracts with Customers , in the determination of revenue to be recognized, with step four related to the allocation of the transaction price to multiple performance obligations.

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• compared SSP at the performance obligation level to the prior year and evaluated the reasons for significant relative fluctuations.

Going concern analysis

As described further in note 1 to the financial statements, the Company’s ability to comply with its debt covenants will depend on its future operating performance.

To assess its ability to meet obligations as they come due and assess future compliance with debt covenants for at least twelve months from the issuance date of the financial statements, the Company has forecasted future financial results which requires significant judgment and estimation.

We identified the going concern assessment as a critical audit matter.

The principal consideration for our determination that the going concern assessment represents a critical audit matter is that evaluating the appropriateness of the significant judgments and estimates in the Company's forecasted financial results requires a high degree of auditor judgment.

Our audit procedures related to the going concern assessment included the following, among others:

• We compared the Company’s historical forecasted financial results to actual results to assess the Company’s ability to accurately forecast.

• We evaluated the Company’s forecasted financial results and ability to meet obligations as they come due for at least twelve months from the issuance date of these financial statements by:

▪ Evaluating the reasonableness of management’s key assumptions, including assessing the Company’s ability to achieve forecasted results through increased revenues, increased gross profit, and cost reductions in the normal course of business.

▪ Comparing the Company’s forecasted future financial results to (1) historical results and previous forecasts, (2) internal communications to management and the Board of Directors.

▪ Testing the sensitivity analyses performed by the Company.

• We evaluated the completeness of the Company’s future obligations and evaluated consistency of evidence obtained in other areas of the audit.

• We obtained and inspected the amended debt covenants executed subsequent to June 30, 2024 with the Company’s lender.

/s/ GRANT THORNTON LLP

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San Jose, California

September 19, 2024

August 28, 2025

Accuray Incorporated

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Total current assets

Noncurrent assets:

Property and equipment, net

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Operating lease right-of-use assets, net

Intangible assets, net

Restricted cash

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Deferred revenue

Short-term debt, net of unamortized debt costs

Short-term debt, net

Total current liabilities

Long-term liabilities:

Noncurrent liabilities:

Operating lease liabilities

Long-term other liabilities

Warrant liability

Deferred revenue

Long-term debt, net of unamortized debt costs

Long-term debt, net

Total liabilities

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Stockholders’ equity:

Preferred stock, $ 0.001 par value;

5,000,000 shares;

no shares issued and outstanding

Common stock, $ 0.001 par value;

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Additional paid-in-capital

Accumulated other comprehensive income (loss)

Accumulated other comprehensive loss

Accumulated deficit

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(a) Included accounts receivable from the joint venture, an equity method investment, of $ 28,452 and $ 25,339 at June 30, 2025, and June 30, 2024, respectively.

(b) Included other receivable from the joint venture, an equity method investment, o f $ 743 and $ 100 a t June 30, 2024, and June 30, 2023 , respectively.

(b) Included other receivable from the joint venture, an equity method investment, o f $ 377 and $ 743 at June 30, 2025, and June 30, 2024 , respectively.

The accompanying notes are an integral part of these consolidated financial statements

Accuray Incorporated

Consolidated Statements of Oper ations and Comprehensive Loss

Consolidated Statements of Oper ations and Comprehensive Income (Loss)

(in thousands, except per share amounts)

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Income from operations

Income on equity method investment

Income from equity method investment

Interest expense

Other expense, net

Loss before provision for income taxes

Gain on extinguishment of debt

Loss from change in fair value of warrant liability

Other income (expense), net

Income (loss) before provision for income taxes

Provision for income taxes

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Change in defined benefit pension obligation

Comprehensive loss

(a) Includes sales of products to the joint venture, an equity method investment, of $ 77,497 during the year ended June 30, 2024, $ 55,658 during the year ended June 30, 2023, and $ 45,545 during the year ended June 30, 2022 , respectively.

(b) Includes sales of services to the joint venture, an equity method investment, of $ 15,039 during the year ended June 30, 2024, $ 10,919 during the year ended June 30, 2023, and $ 10,332 during the year ended June 30, 2022 , respectively.

(c) Includes cost of revenue from sales to the joint venture, an equity method investment, of $ 59,853 during the year ended June 30, 2024, $ 37,772 during the year ended June 30, 2023, and $ 35,237 during the year ended June 30, 2022, respectively.

(d) Includes charge backs to the joint venture, an equity method investment, related to research and development of $ 942 during the year ended June 30, 2024, $ 1,463 during the year ended June 30, 2023, and $ 2,336 during the year ended June 30, 2022, respectively.

Comprehensive income (loss)

(a) Includes sales of products to the joint venture, an equity method investment, of $ 101,563 during the year ended June 30, 2025, and $ 77,497 during the year ended June 30, 2024 .

(b) Includes sales of services to the joint venture, an equity method investment, of $ 18,521 during the year ended June 30, 2025, and $ 15,039 during the year ended June 30, 2024.

(c) Includes cost of revenue from sales to the joint venture, an equity method investment, of $ 74,421 during the yea r ended June 30, 2025, and $ 59,853 during the year ended June 30, 2024 .

(d) Includes charge backs to the joint venture, an equity method investment, related to research and development of $ 1,482 during the year ended June 30, 2025 and $ 942 during the year ended June 30, 2024 .

The accompanying notes are an integral part of these consolidated financial statements.

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Balance at June 30, 2023

Cumulative adjustment due to adoption of ASU No.

Issuance of common stock to employees

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Share-based compensation

Cumulative translation adjustment

Change in defined benefit pension obligation

Balance at June 30, 2023

Issuance of common stock to employees

Tax withholding upon vesting of restricted stock units

Share-based compensation

Fair value of warrants issued with debt

Stock issued to settle Convertible Notes

Cumulative translation adjustment

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Share-based compensation

Amortization of debt issuance costs

Provision for (recovery from) credit losses

Amortization of debt financing costs and discount for warrants issued to lenders

Gain on extinguishment of debt

Non-cash interest paid-in-kind

Loss from change in fair value of warrant liability

Recovery from credit losses

Provision for write-down of inventories

(Gain) loss on disposal of property and equipment

Income on equity method investment

Net deferred profit margin on sales to the JV

Income from equity method investment

Net deferred gross profit on sales to the JV

Provision for deferred income taxes

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Purchases of property and equipment, net

Purchase of intangible assets

Capitalized costs for software to be sold

Net cash used in investing activities

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Taxes paid related to net share settlement of equity awards

Debt issuance costs

Repayment of convertible notes

Paydown under Term Loan Facility

Borrowings under the Revolving Credit Facility

Repayments under the Revolving Credit Facility

Proceeds from Term Loan due 2030

Debt financing costs

Paydown of Prior Convertible Notes

Paydown of Prior Term Loan Facility

Borrowings under the Prior Revolving Credit Facility

Repayments under the Prior Revolving Credit Facility

Net cash used in financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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Supplemental non-cash disclosure:

Fair value of stock issued to settle Convertible Notes

Fair value of warrants issued with debt

Unpaid purchase of property and equipment at end of year

Receivable for the sale of property and equipment

Leasehold improvement from lease incentive

Unpaid capitalized software costs at end of year

Transfers from inventory to property and equipment

Transfer of inventory to other assets

Transfer of lease liabilities to leasehold improvements

Transfer of other assets to property and equipment

Dividend receivable from joint venture

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The Company is subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation;

actions taken to counter inflation, including rising interest rates;

actions taken to counter inflation, including high interest rates;

foreign currency exchange rate fluctuations;

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tightening credit markets;

geopolitical concerns, such as the Russia-Ukraine and Israel-Hamas conflicts and increasing tension between China and the U.S., including with respect to Taiwan;

geopolitical concerns, such as the Russia-Ukraine and Middle East conflicts and increasing tension between China and the U.S., including with respect to Taiwan;

uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program;

the upcoming U.S.

presidential election;

changes in government administration policy positions;

recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries;

and other factors that may emerge.

In particular, the Company is also continuing to navigate supply chain and inflation challenges, and adverse foreign currency exchange rate fluctuations, all of which continues to be a significant headwind that affects the Company’s results of operations.

The Company is also continuing to navigate supply chain and inflation challenges, both of which continues to be a significant headwind that affects the Company’s results of operations.

The Company expects that the business of its customers and its own business will continue to be adversely impacted, directly or indirectly, by these macroeconomic and geopolitical issues.

Delays in deliveries and installations that originated from the COVID-19 pandemic and its effects on the global economic environment may continue, to some degree, through the remainder of calendar year 2024, which could have a negative impact on our revenue during such period.

In addition, ongoing supply chain challenges and logistics costs, including difficulties in obtaining a sufficient supply of component materials and increased component costs, have adversely affected the Company's gross margins and net income (loss), and the Company’s current expectations are that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistic expenses through at least the remainder of calendar year 2024, if not longer.

In addition, the Company expects inflation and the ongoing supply chain challenges and logistics costs to impact its cash from operations through at least the remainder of calendar year 2024, if not longer.

Furthermore, certain parts required for the manufacturing and servicing of the Company's products, such as electronic components, are scarce and could be difficult to source, even at increased prices, if the supplier were adversely affected by macroeconomic and geopolitical issues.

If such parts become unavailable to the Company, it would not be able to manufacture or service our products, which would adversely impact revenue, gross margins, and net income (loss).

In addition, ongoing supply chain challenges and logistics costs, including difficulties in obtaining a sufficient supply of component materials and increased component costs, have adversely affected the Company's gross margins and net income (loss), and the Company currently expects that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistics expenses through at least calendar year 2025, and potentially longer.

In addition, the Company expects inflation and the ongoing supply chain challenges and logistics costs to impact its cash from operations through at least calendar year 2025.

In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted net revenue since fiscal year 2024, and the Company expects this will continue to have an impact through fiscal year 2026.

The extent of the ongoing impact of these macroeconomic events on our business, our markets and on global economic activity, however, is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time.

The Company’s past results may not be indicative of its future performance, and historical trends, including conversion of

backlog to revenue, income (loss) from operations, net income (loss), net income (loss) per share and cash flows may differ materially.

The Company’s past results may not be indicative of its future performance, and historical trends, including conversion of backlog to revenue, income (loss) from operations, net income (loss), net income (loss) per share and cash flows may differ materially.

The Company continues to critically review its liquidity and anticipated capital requirements in light of the significant uncertainty created by geopolitical and macroeconomic conditions.

Based on the Company’s cash and cash equivalents balance, available debt facilities, current business plan and revenue prospects, the Company believes that it will have sufficient cash resources and anticipated cash flows to fund its operations for at least the next 12 months.

The Company, however, is unable to predict with certainty the impact of geopolitical and macroeconomic conditions, including its effect on the global supply chain, inflation and foreign currency exchange rates, will have on its ability to maintain compliance with the debt covenants contained in the credit agreement related to its Credit Facilities (the "Credit Agreement"), including financial covenants regarding the consolidated fixed charge coverage ratio and consolidated senior net leverage ratio.

On April 25, 2024, the Company entered into a Third Amendment (the “Third Amendment”) to the Credit Agreement to update the calculation of Consolidated EBITDA (as defined in the Credit Agreement) to maintain compliance with the debt covenants as of March 31, 2024.

The Company was in compliance with such covenants at June 30, 2024.

Failing to comply with the covenants to the Credit Agreement, as amended, could adversely affect the Company’s ability to finance its future operations or capital needs, withstand a future downturn in its business or the economy in general, engage in business activities, including future opportunities that may be in its interest, and plan for or react to market conditions or otherwise execute its business strategies.

The Company’s ability to comply with the covenants and other terms governing the Credit Facilities will depend in part on its future operating performance.

In addition, because substantially all of the Company’s assets are pledged as a security under the Credit Facilities, if the Company is not able to cure any default or repay outstanding borrowings, such assets are subject to the risk of foreclosure by the Company’s lenders.

Failure to meet the covenant requirements in the future could cause the Company to be in default and the maturity of the related debt could be accelerated and become immediately payable.

This may require the Company to obtain waivers or additional amendments to the Credit Agreement in order to maintain compliance and there can be no certainty that any such waiver or amendment will be available, or what the cost of such waiver or amendment, if obtained, would be.

If the Company is unable to obtain necessary waivers or amendments and the debt under such credit facility is accelerated, the Company would be required to obtain replacement financing at prevailing market rates, which may not be favorable to the Company.

Based on the balance of the Company’s cash and cash equivalents, available debt facilities, current business plan and revenue prospects, the Company believes that it will have sufficient cash resources and anticipated cash flows to fund its operations for at least the next 12 months.

The Company, however, is unable to predict with certainty the impact that geopolitical and macroeconomic conditions, including their effect

on the global supply chain, inflation and foreign currency exchange rates, will have on its ability to maintain compliance with the covenants contained in the Financing Agreement (as defined below), including financial covenants regarding the consolidated fixed charge coverage ratio, consolidated leverage ratio and minimum liquidity requirements.

Failing to comply with the covenants to the Financing Agreement could adversely affect the Company’s ability to finance its future operations or capital needs, withstand a future downturn in its business or the economy in general, engage in business activities, including future opportunities that may be in its interest, and plan for or react to market conditions or otherwise execute its business strategies.

The Company’s ability to comply with the covenants and other terms governing the Financing Agreement will depend in part on its future operating performance.

In addition, because substantially all of the Company’s assets are pledged as collateral under the Financing Agreement, if the Company is not able to cure any default or repay outstanding borrowings, such assets are subject to the risk of foreclosure by the Company’s lenders.

Failure to satisfy the covenants and other terms governing the Financing Agreement in the future could cause the Company to be in default and the maturity of the related debt could be accelerated and become immediately payable.

This may require the Company to obtain waivers or additional amendments to the Financing Agreement in order to maintain compliance and there can be no certainty that any such waiver or amendment will be available, or what the cost of such waiver or amendment, if obtained, would be.

If the Company is unable to obtain necessary waivers or amendments and the debt under such credit facility is accelerated, the Company would be required to obtain replacement financing.

There can be no assurance that the Company would be able to obtain replacement financing on acceptable terms, or at all, on a timely basis.

There can be no assurance that the Company would be able to satisfy its obligations if any of its indebtedness is extended.

There is no guarantee that the Company would be able to satisfy its obligations if any of its indebtedness is accelerated .

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Cash and cash equivalents are held in various financial institutions in the United States and internationally.

Restricted cash primarily consists of cash held in bank accounts which are under the control of the lender to the Credit Facilities, ce rtificates of deposit held as guarantees in connection with customer contracts and corporate leases, and funds held as guarantees for Value‑Added Tax (“VAT”) obligations in a foreign jurisdiction.

Restricted cash primarily consists of cash held in bank accounts which are for ce rtificates of deposit held as guarantees in connection with customer contracts and corporate leases, and funds held as guarantees for Value‑Added Tax (“VAT”) obligations in a foreign jurisdiction.

Fair Value Measurements

The carrying values of the Company’s financial instruments including cash equivalents, restricted cash, accounts receivable, and accounts payable, are approximately equal to their respective fair values due to the relatively short‑term nature of these instruments.

The Company’s Credit Facilities approximated fair value due to variable interest rate charged on the borrowings, which reprice frequently.

The Company’s Term Loan Facilities approximated fair value due to variable interest rate charged on the borrowings, which reprice frequently.

The Company’s convertible debt is measured on a recurring basis.

The Company’s Premium Warrants were recorded at their relative fair value in additional paid-in capital at the time of issuance,

and its warrant liabilities are remeasured to their respective fair value each reporting period.

See Note 6, Fair Value Measurements, of the notes to consolidated financial statements for further information.

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The Company h ad one customer that represented 10 % or more of total net revenue for the years ended June 30, 2025 and 2024 , respectively.

The Company had one customer a s of June 30, 2024 and June 30, 2023 , respectively, that accounted for more than 10 % of accounts receivable, net.

The Company had one customer a s of June 30, 2025 and 2024, respectively, that accounted for more than 10 % of accounts receivable, net.

Single‑source suppliers presently provide the Company with several components.

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The Company’s products are generally sold without a right of return, and the Company’s contracts generally provide a fixed transaction price.

The Company may offer incentives in the form of discounts, including volume system discounts,

which are included in the contract and used to calculate the final fixed price of the arrangement.

The Company may offer incentives in the form of discounts, including volume system discounts, which are included in the contract and used to calculate the final fixed price of the arrangement.

These discounts may pertain to all performance obligations in a specific contract or may be allocated to a specific performance obligation.

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If it is determined that a material financing component exists, we recognize this as interest income over time.

The Company applies the practical expedient to not adjust for a material financing component if the gap between payment and delivery was expected, at the contract inception, to be less than one year.

The Company applies the practical expedient to not adjust for a material

financing component if the gap between payment and delivery was expected, at the contract inception, to be less than one year.

The Company offers customers the opportunity to trade in their older systems for a discount off the purchase of a new system.

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It primarily consists of unfulfilled obligations from open contracts for which performance has already started including short-shipped items, deferred warranty, training, maintenance services and other unperformed or incomplete performance obligations.

Service contracts outside of the warranty period, for maintenance services, in general, are considered month-to-month contracts.

Service contracts outside of the warranty period, for maintenance services, in general, are considered

month-to-month contracts.

Deferred revenue includes deferred warranty expected to be recognized over the remaining warranty period for systems already installed.

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Software Capitalization Costs

Costs for the development of new software products and the substantial enhancements to existing software products for internal use are capitalized when it is considered probable that the software will be fully developed and used to perform its intended function.

Certain costs for the development of new software products and the substantial enhancements to existing software products for internal use are capitalized when it is considered probable that the software will be fully developed and used to perform its intended function.

Capitalized costs for the development of internal use software are included in property, plant and equipment, net on the consolidated balance sheets.

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Costs related to the preliminary project stage, post-implementation, training and maintenance are expensed as incurred.

Costs for the development of software the Company plans to sell, lease or market on its own or as part of another product is capitalized once technological feasibility is achieved.

Certain costs for the development of software the Company plans to sell, lease or market on its own or as part of another product is capitalized once technological feasibility is achieved.

The Company will capitalize costs until the product is ready to be sold, at which time, it will amortize the capitalized costs over the estimated useful life.

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Forfeitures are recorded as they occur.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Distinguishing Liabilities from Equity ASC 480 (“ASC 480”) and Derivatives and Hedging ASC 815, (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued warrants that meet all of the criteria for equity classification, the warrants are recorded at their relative fair value in additional paid-in capital at the time of issuance.

For issued warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and remeasured at each balance sheet date thereafter.

In accordance with the guidance contained in ASC 815, the Premium Warrants (as defined in Note 7) qualify for equity treatment.

The fair value of the Premium Warrants was estimated using a Black-Scholes method (see Note 9 “ Stockholders’ Equity ” for more information).

The Penny Warrants (as defined in Note 7) do not qualify as equity and are recorded as a liability at fair value.

Changes in the estimated fair value of the Penny Warrants are recognized as a non-cash gain or loss on the statements of operations and comprehensive income (loss).

Loss Contingencies

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Earnings Per Common Share

Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding during the period.

Basic earnings per share is computed based on the weighted average number of shares of common stock and warrants outstanding during the period.

Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period.

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Anti-dilutive share-based awards, excluded

Anti-dilutive warrants

Warrants Issued in Connection with the Long-term Debt

The Company issued approximately 6.2 million detachable warrants with an exercise price of $ 0.01 per share (“Penny Warrants”) and 17.2 million detachable warrants with an exercise price of $ 1.68 per share (“Premium Warrants”) to the lenders of our long-term debt (See Note 9.

Stockholders’ Equity, for more information).

Accounting guidance dictates that shares issuable for little or no cash consideration upon the satisfaction of certain conditions shall be considered outstanding common shares and included in the computation of basic earnings per share.

Since the Penny Warrants are issuable for little or no consideration, they are considered outstanding and are included in the weighted average shares to calculate basic and diluted earnings per share for the year ended June 30, 2025.

Outstanding Convertible Notes—Diluted Share Impact

Due to the optional cash settlement feature and management’s intent to settle the principal amount thereof, in cash, the shares of common stock issuable upon conversion of the outstanding principal amount of the 3.75 % Convertible Senior Notes due 2026 and the 3.75 % Convertible Senior Notes due 2022 (collectively, the “Notes”) are included in the calculation of diluted net income (loss) per share only if their inclusion is dilutive for periods during which the Notes were outstanding.

The shares of common stock issuable upon conversion of the outstanding principal amount of the Notes as of June 30, 2024, 2023 and 2022 were 17.1 million, 17.1 million and 17.6 million, respectively, and were not included in the basic and diluted net loss per common share as the effect of adding the shares were anti-dilutive.

See Note 9, Debt, of the consolidated financial statements for more information about the Notes.

Due to the optional cash settlement feature and management’s intent to settle the principal amount thereof, in cash, the shares of common stock issuable upon conversion of the outstanding principal amount of the 3.75 % Convertible Senior Notes due 2026 (the “Notes”) are included in the calculation of diluted net income (loss) per share only if their inclusion is dilutive for periods during which the Notes were outstanding.

The shares of common stock issuable upon conversion of the outstanding principal amount of the Notes as of June 30, 2025, and 2024 wer e 3.1 million, and 17.1 million, respectively, and were not included in the basic and diluted net loss per common share as the effect of adding the shares were anti-dilutive (See Note 7.

Debt, for more information).

The Company is the lessee in a lease contract when the Company obtains the right to use the asset.

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The Company determines the lease term by agreement with lessor, including lease renewal and extension.

As the leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

As the leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the

present value of future payments.

The Company elected a practical expedient to account for lease and non-lease components together as a single lease component.

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The Company anticipates there will be no material changes in uncertain tax positions in the next 12 months.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Compre hensive Income (Loss)

The components of comprehensive income (loss) consist of net income (loss), changes in foreign currency exchange rate translation and net changes related to a defined benefit pension plan.

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Recent Accounting Pronouncements

Accounting Pronouncements - Adopted

In November 2023, the FASB issued ASU 2023-07 to improve reportable segment disclosures.

The ASU is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses.

The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources.

The ASU also requires all annual disclosures to be disclosed in interim periods.

The update is effective for annual periods beginning after December 15, 2023 and interim periods within annual periods beginning after December 15, 2024.

The Company adopted ASU 2023-07 on July 1, 2024.

The Company assessed the impact of this update and it did not have a material impact on its consolidated financial statement disclosure requirements.

Accounting Pronouncements - Not Yet Effective

In December 2023, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard update (“ASU”) 2023-09 to improve the transparency and usefulness of income tax disclosures.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued accounting standard update (“ASU”) 2024-03 requiring additional disclosure of the nature of expenses included in the income statement.

The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

The update is effective for annual periods beginning after December 15, 2026.

The Company plans to adopt ASU 2024-03 on July 1, 2027.

The requirements will be applied prospectively with the option for retrospective application.

Early adoption is permitted.

The Company is currently assessing the impact of adopting the updated provisions.

In December 2023, the FASB issued ASU 2023-09 to improve the transparency and usefulness of income tax disclosures.

The accounting standard expands disclosures to the entity’s income tax rate reconciliation table and requires cash taxes paid disaggregated by jurisdiction.

These changes will be applied on a prospective basis.

The update is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The update is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company plans to adopt ASU 2023-09 on July 1, 2025.

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The Company is currently assessing the timing and impact of adopting the updated provisions.

In November 2023, the FASB issued ASU 2023-07 to improve reportable segment disclosures.

The ASU is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses.

The ASU also requires all annual disclosures to be disclosed in interim periods.

The update will be effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted ASU 2023-07 on July 1, 2024.

The Company has assessed the impact of this update and it believes that it will not have a material impact on its consolidated financial statement disclosure requirements.

Contract Balances

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During the year ended June 30, 2025, contract liabilities changed due to changes in the timing of revenue recognition as a result of changes in shipping timing, modifications to the transaction price, reduced customer deposits for system sales, and for which the warranty was deferred.

During the years ended June 30, 2024 and June 30, 2023, the Company recognized revenues of $ 75.3 million, $ 84.9 million, and $ 81.2 million respectively, which were included in the deferred revenue balances at June 30, 2023, June 30, 2022 and June 30, 2021, respectively.

During the years ended June 30, 2025 and June 30, 2024, the Company recognized revenues of $ 62.4 million and $ 75.3 million, respectively, which were included in the deferred revenue balances at June 30, 2024, and June 30, 2023, respectively.

Remaining Performance Obligations

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The Company has classified the capitalized costs to obtain a contract as a component of prepaid expenses and other current assets and other assets with respect to the current and non-current portions of capitalized costs, respectively, on the consolidated balance sheets.

Years Ended June 30,

Capitalized contract costs

Amortization of capitalized contract costs

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Allowance for credit losses

In the fourth quarter of fiscal year 2024, the Company wrote-off $ 0.8 million in financing receivables and related allowance for credit loss because the Company determined it would no longer be able to collect from the customer.

Inventories consisted of the following (in thousands):

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Income tax receivable

Debt financing costs

Dividend receivable from JV

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Total prepaid and other current assets

Debt financing costs are related to the $ 20 million delayed draw term loan facility and the short-term financing costs related to the $ 20 million revolving credit facility included in the Financing Agreement (see Note 7.

Debt , for more information).

Property and Equipment, net

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Total property and equipment, net

At June 30, 2024, software includes $ 8.1 million in capitalized costs for the completed transition of the Company's new enterprise resource planning system in August 2023.

At June 30, 2023, construction in progress included $ 7.5 million in capitalized costs for the development of internal use software.

The Company will depreciate the cost associated with the enterprise resource planning system over five years.

Depreciation expense related to property and equipment was $ 5.8 million, $ 4.4 million and $ 5.4 million, during the years ended June 30, 2024, 2023 and 2022, respectively.

Depreciation expense related to property and equipment was $ 6.1 million, and $ 5.8 million during the years ended June 30, 2025, and 2024, respectively.

Activity related to goodwill consisted of the following (in thousands):

As of June 30,

Balance at the beginning of the period

Currency translation adjustment

Balance at the end of the period

The Company performed its annual goodwill impairment test in the quarter ended December 31, 2024, and determined that there was no impairment to goodwill.

The Company did no t identify any triggering events that would indicate a potential impairment of its goodwill as of June 30, 2025.

The Company will continue to monitor its recorded goodwill for indicators of impairment every fiscal quarter.

Other assets consisted of the following (in thousands):

Capitalized software costs to be sold

Capitalized contract costs

Long-term accounts receivable

Capitalized software costs to be sold

Purchased intangible assets, net

Deferred tax asset

Debt financing costs

Other long-term assets

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There was no amortization expense or amounts written down to net realizable value for the capitalized software costs to be sold during the years ended June 30, 2025 and 2024, respectively.

Amortization expense related to purchased intangible assets during the year ended June 30, 2025, was not material and during the year ended June 30, 2024, was $ 0.2 million.

The Company’s purchased intangible assets at June 30, 2025, will be fully amortized in fiscal year 2026 .

The Company did no t identify any triggering events that would indicate a potential impairment of its definite-lived intangible and long-lived assets as of June 30, 2025.

Debt financing costs are related to the $ 20 million revolving credit facility included in the Financing Agreement (see Note 7.

Debt , for more information).

Other Accrued Liabilities

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Refunds due to customers

Accrued consulting

Accrued royalties

Accrued consulting

Interest payable

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Total other accrued liabilities

Treasury Stock

The Company records treasury stock at cost.

Treasury stock is comprised of shares of common stock purchased by the Company in the secondary market.

As of June 30, 2024, and June 30, 2023 , the Company had 3.1 million shares of treasury stock valued at $ 14.1 million.

Trea sury stock is included in Additional paid-in capital on the consolidated balance sheets.

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated other comprehensive income (loss) by component (in thousands):

Cumulative Translation Adjustment

Balance at June 30, 2022

Other comprehensive loss

Balance at June 30, 2023

Other comprehensive loss

Balance at June 30, 2024

Consolidated Statements of Operations

Other expense, net consisted of the following (in thousands):

Interest expense consisted of the following (in thousands)

Years Ended June 30,

Foreign currency transaction loss

Total other expense, net

Restructuring Charges

In the second quarter of fiscal year 2024, the Company informed affected employees of a cost savings initiative to reduce operating expenses resulting in the elimination of approximately 5.9 percent of the Company’s global workforce.

The Company recorded restructuring charges of $ 2.6 million in restructuring charges during fiscal year 2024.

These charges are cash-based and are primarily related to severance expenses and other one-time termination benefits.

At June 30, 2024, the Company has completed the cost savings initiative.

In the second quarter of fiscal year 2023, the Company announced a cost savings initiative designed to reduce operating costs.

This cost savings initiative resulted in the reduction of the Company’s global workforce by 4.5 %.

The Company recorded $ 2.7 million in restructuring charges during fiscal year 2023.

These charges were cash-based charges, primarily related to severance expenses and other one-time termination benefits.

The Company did not have any remaining accruals related to this cost savings initiative as of June 30, 2023.

Contractual interest coupon

Accrued paid-in-kind interest

Amortization for financing costs and discount for warrants issued to lenders

Total interest expense

Other income (expense), net, consisted of the following (in thousands):

Years Ended June 30,

Interest income

Foreign currency exchange gain (loss)

Costs for foreign currency forward contracts

Total other income (expense), net

The Company has operating leases for corporate offices and warehouse facilities worldwide.

Additionally, the Company leases cars and copy machines that are considered operating leases.

Some of the Company’s leases are non-cancellable operating lease agreements with various expiration dates through June 2035.

Some of the Company’s leases are non-cancellable operating lease agreements with various expiration dates through August 2035.

Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised, and therefore are not factored into the determination of lease payments.

The following table provides information related to the Company’s operating leases (in thousands):

Years Ended June 30,

Operating lease costs (1)

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Noncurrent portion of operating lease obligations

The weighted-average remaining lease term and weighted-average discount rate for operating leases were as follows:

Weighted average remaining lease term (in years)

Weighted average discount rate

Maturities of operating lease liabilities as of June 30, 2025, are presented in the table below (in thousands) :

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Present value of operating lease liabilities

Weighted average remaining lease term (in years)

Weighted average discount rate

Goodwill and Purchased Intangible Assets

The Company's carrying amount of its goodwill is as follows (in thousands):

As of June 30,

Balance at the beginning of the period

Currency translation adjustment

Balance at the end of the period

The Company performed its annual goodwill impairment test in the second quarter of fiscal year 2024 and determined that there was no impairment to goodwill.

In the third quarter of fiscal year 2024, the Company determined that its decline in cash flows and a downward adjustment to the fiscal year 2024 annual guidance constituted triggering events for the impairment of goodwill, and it determined that there was no impairment to goodwill as of March 31, 2024.

In the fourth quarter of fiscal

year 2024, the Company determined that the triggering events present at March 31, 2024, were still present at June 30, 2024.

The Company performed an interim goodwill impairment test and it determined that there was no impairment to goodwill as of June 30, 2024.

The Company will continue to monitor its recorded goodwill for indicators of impairment every fiscal quarter.

Purchased Intangible Assets

The Company’s carrying amount of acquired intangible assets, net, consisted of the following (in thousands):

As of June 30, 2024

As of June 30, 2023

Patent license

Other intangibles

Total intangible assets

The Company did not identify any triggering events that would indicate potential impairment of its definite‑lived intangible and long‑lived assets as of June 30, 2024, and 2023.

Amortization expense related to purchased intangible assets during the years ended June 30, 2024, 2023, and 2022, was $ 0.2 million, $ 0.2 million and $ 0.1 million, respectively.

The estimated future amortization expense of purchased intangible assets as of June 30, 2024 is as follows (in thousands):

Year Ending June 30,

Total estimated future amortization expense

Derivative Financial Instruments

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These forward contracts are not designated as hedging instruments for accounting purposes.

Principal hedged currencies primarily include the Japanese Yen, Swiss Franc, Indian Rupee and Euro.

Principal hedged currencies primarily include the Japanese Yen, Swiss Franc, and Euro.

The periods of these forward contracts range up to approximately three months and the notional amounts are intended to be consistent with changes in the underlying exposures.

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As of June 30,

British Pound

Canadian Dollar

British Pound

Total outstanding forward currency exchange contracts

The Company entered into the foreign exchange forward contracts on June 30, 2024 and June 30, 2023, and therefore, there was no amount recorded on the balance sheets.

Gains and losses on the Company's foreign currency forward contracts are recorded in Other expense, net, on the Company's consolidated statements of operations.

The Company entered into the foreign currency forward contracts on June 30, 2025 and June 30, 2024.

There is no significant change in our mark-to-market analysis, and therefore, there was no amount recorded on the balance sheets.

Gains and losses on the Company's foreign currency forward contracts are recorded in Other expense, net, on the Company's consolidated statements of operations and comprehensive income (loss).

The following table provides information about the gain or loss associated with the Company’s derivative financial instruments not designated as hedging instruments (in thousands):

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These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

Assets and Liabilities That Are Measured at Fair Value

Items Measured at Fair Value on a Recurring Basis

Warrant Liabilities

The Penny Warrants (as defined in Note 7) are accounted for as a liability with the changes in fair value of the warrants are recognized in the statement of operations and comprehensive income (loss).

The fair value of the Penny Warrants at issuance date was based on the closing listed stock price on June 6, 2025, and remeasured based on the listed market price of

such warrants at June 30, 2025.

The estimated fair value of the Penny Warrants liabilities represent Level 2 measurements because the fair value of the warrant is being implied based on market trades of the stock.

The following table shows the changes in fair value of the Penny Warrants:

Balance at the beginning of the period

Issuance of Penny warrants on June 6, 2025

Change in fair value

Balance at the end of the period

Other Fair Value Disclosures

At June 30, 2025, the Company had open currency forward contracts to purchase or sell foreign currencies with a stated, or notional, value of $ 43.5 million.

The fair value of the forward contract based upon the June 30, 2024 exchange rate was

$ 87.7 million, which it considers to be a Level 2 fair value measurement.

The fair value of the forward contract based upon the June 30, 2025 exchange rate was $ 43.3 million, which it considers to be a Level 2 fair value measurement.

At June 30, 2024, the Company had open currency forward contracts to purchase or sell foreign currencies with a stated, or notional, value of $ 88.0 million.

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The Company’s convertible debt is measured on a recurring basis using Level 2 based upon observable inputs.

The Company's Revolving Credit Facility and Term Loan Facility (as defined in Note 9) collectively (the “Credit Facilities”) reflect the bank quoted market rates, which the Company considers to be a Level 2 fair value measurement.

The Company believes that the carrying value of the Credit Facilities approximates its estimated fair value based on the effective interest rate, compared to the current market rate available to the Company at quarter-end.

The following table summarizes the carrying value, net of debt costs, and estimated fair value of the 3.75 % Convertible Senior Notes due 2026, the Term Loan Facility, and the Revolving Credit Facility, (in thousands):

The Company's Term Loan Facilities due 2030 (as defined in Note 7) reflect the bank quoted market rates, which the Company considers to be a Level 2 fair value measurement.

The Company believes that the carrying value of the Prior Term Loan Facility and Revolving Credit Facility approximates its estimated fair value based on the effective interest rate, compared to the current market rate available to the Company at quarter-end.

The following table summarizes the carrying value, net of debt financing costs, and the fair value of the 3.75 % Convertible Senior Notes due 2026, Term Loan Facilities due 2030, the Prior Term Loan Facility, and the Prior Revolving Credit Facility, (in thousands):

June 30, 2025

June 30, 2024

3.75 % Convertible Notes Due 2026

Term Loan Facility

Revolving Credit Facility

3.75 % Convertible Notes due June 1, 2026

Term Loan Facilities due 2030

Prior Term Loan Facility

Prior Revolving Credit Facility

The carrying value and fair value of the Term Loan Facilities due 2030 excludes $ 21.0 million for the fair value of the warrants issued to the lenders to purchase the Company’s common stock.

The Premium Warrants (as defined in Note 7) met all of the criteria for equity classification and were recorded at their relative fair value in additional paid-in capital at the time of issuance.

The fair value of $ 12.8 million is not subject to remeasurement and was estimated using a Black-Scholes method, which incorporates significant unobservable inputs, including expected volatility, risk-free interest rate and expected term.

As these inputs are not observable in the market, the fair value measurement of the Premium Warrants represent a Level 3 measurement.

The Company's outstanding debt as of June 30, 2025 and June 30, 2024 is as follows (in thousands):

As of June 30,

Term Loan Facilities due 2030

Convertible Senior Notes due June 1, 2026

Prior Term Loan Facility

Prior Revolving Credit Facility

Paid-in-kind interest

Unamortized debt financing costs

Unamortized discount for warrants issued to lenders

Total debt, net

Short-term debt, net

Long-term debt, net

Total debt, net

A summary of interest expense on the Company’s outstanding debt is as follows (in thousands):

Year ended June 30,

Contractual interest coupon

Accrued paid-in-kind interest

Amortization of debt financing costs and discount for warrants issued to lenders

Total interest expense on debt

A summary of weighted average effective interest rate on the Company’s debt is as follows:

Year ended June 30,

Term Loan Facility due 2030

Convertible Senior Notes due June 1, 2026

Prior Term Loan Facility

Prior Revolving Credit Facility

The weighted average effective interest rate includes coupon interest rates, paid-in-kind interest, the amortization of debt financing costs, and the amortization of the discount for warrants issued to lenders.

Financing Agreement June 2025

On June 6, 2025, the Company entered into a new five-year senior secured credit agreement, due June 6, 2030, (the “Financing Agreement”) by and among the Company, as borrower (the “Borrower”), TCW Asset Management Company LLC, a leading global asset manager (“TCW”), as collateral agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and as administrative agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”, and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”), and certain other parties signatory thereto.

The Financing Agreement provides for a $ 150 million term loan (the “Term Loan Facility”), a $ 20 million delayed draw term loan facility (the “Delayed Draw Facility”), and a $ 20 million revolving credit facility (“Revolving Credit Facility”).

The proceeds of the Term Loan Facilities were used to fully refinance the Company’s existing senior secured indebtedness, which provided for a five-year $ 80 million term loan facility (the "Prior Term Loan Facility") and a $ 40 million revolving credit facility (the “Prior Revolving Credit Facility”), and which had $ 58.0 million and $ 17.0 million of outstanding balances of the Prior Term Loan

Facility and Prior Revolving Credit Facility, respectively, and to fund the aggregate cash payment of approximately $ 68.5 million as part of the Exchange (as defined below) of a portion of the Company’s 3.75 % Convertible Senior Notes due 2026 (the “Convertible Notes”).

The proceeds of the Delayed Draw Facility may be used to fund any future repurchases of outstanding Convertible Notes.

The proceeds of loans drawn under the Revolving Credit Facility will be used to fund the general working capital needs and general corporate purposes of the Company and its subsidiaries.

In connection with the repayment of the Prior Term Loan Facility and the Prior Revolving Credit Facility, the Company wrote-off $ 0.4 million in unamortized debt issuance costs which is recorded as a loss on extinguishment of debt .

As of June 30, 2025, no proceeds were drawn on the Revolving Credit Facility.

The Company will be able to access the Delayed Draw Down Facility from the date financial reports are delivered under the Financing Agreement for the fiscal quarter ending December 31, 2025 through June 6, 2026, if certain the total leverage ratio of the Company is not greater than 5.25 :1.00 and certain other conditions, as described in the Financing Agreement, are met.

The proceeds from the Delayed Draw Facility may be used to fund the remaining $ 18.0 million outstanding Convertible Notes due June 1, 2026.

The Borrower’s obligations under the Financing Agreement are secured by first-priority liens on substantially all assets of the Borrower, subject to certain exceptions.

The Financing Agreement requires the Borrower to cause certain of its direct and indirect subsidiaries to, within 90 days of the closing date of the Financing Agreement, grant first-priority liens on substantially all of their assets, in each case, subject to certain exceptions.

Interest on the borrowings under the Facilities is payable in arrears on the applicable interest payment date at an interest rate equal to, at the Company’s option, either:

(i) a term SOFR -based rate (subject to a 2.00 % per annum floor), plus an applicable margin of 8.50 %, per annum or (ii) a reference rate ( subject to a 3.00 % per annum floor), plus an applicable margin of 7.50 % per annum .

The agreement provides the option for payment-in-kind interest (“PIK”) up to 6.00 % per annum (subject to an increase in applicable margin of 1 / 3 of 1.00 % per annum for each 1.00 % per annum of interest elected to be paid in kind which PIK interest will be capitalized on the applicable interest payment date and will be added to the then-outstanding principal amount of the term loans.

The Financing Agreement requires the Borrower to pay the lenders with commitments under the Revolving Credit Facility an unused commitment fee equal to 0.50 % per annum of the average unused portion of the Revolving Credit Facility.

The Warrant Holders were issued warrants to purchase (i) 17,180,710 shares of common stock with an exercise price of $ 1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 (the “Premium Warrants”) and (ii) 6,247,531 shares of common stock with an exercise price of $ 0.01 per share (“Penny Warrants”) exercisable immediately and expiring on June 6, 2032.

The Company determined that the Premium Warrants qualified as freestanding instruments that met all of the criteria for equity classification.

The Premium Warrants were valued at $ 13.1 million at the issuance date and were recorded as a debt discount to the Term Loan Facility (see Note 9.

Stockholders’ Equity, for more information).

The Company will amortize the debt discount using the effective interest rate method over the life of the Term Loan Facility as interest expense.

The Company determined that the Penny Warrants qualified for liability classification.

The Company calculated the fair value of the Penny Warrants to be $ 8.0 million at the issuance date and were recorded as a debt discount (see Note 6.

Fair value Measurements, for more information).

The Company will amortize the debt discount using the effective interest rate method over the life of the Term Loan Facility as interest expense.

The Company pa id $ 13.1 million in debt f inancing fees (including a $ 5.4 million Original Issue Discount Fee).

Approximately $ 1.2 million of the debt financing fees are associated with the Delayed Draw Facility and Revolving Credit Facility and are included in prepaid and current assets and other assets on the consolidated balances sheets.

The debt financing fees will be amortized using the effective interest rate method over the life of the Term Loan Facility as interest expense.

The Financing Agreement contains restrictions and covenants applicable to the Company and its subsidiaries.

Among other requirements, the Company may not permit (i) the total leverage ratio (as defined in the Financing Agreement) to be greater than a certain specified ratio for each fiscal quarter during the term of the Financing Agreement, (ii) the fixed charge coverage ratio (as defined in the Financing Agreement) to be less than a certain specified ratio for each fiscal quarter during

the term of the Financing Agreement or (iii) liquidity (as defined in the Financing Agreement) to be less than a certain specified threshold for each month during the term of the Financing Agreement.

The Company was in compliance with its covenants and other requirements of the Financing Agreement as of June 30, 2025.

The Financing Agreement also contains customary covenants that limit, among other things, the ability of the Company and its subsidiaries to (i) incur indebtedness, (ii) incur liens on their property, (iii) pay dividends or make other distributions, (iv) sell their assets, (v) make certain loans or investments, (vi) merge or consolidate, (vii) voluntarily repay or prepay certain indebtedness and (viii) enter into transactions with affiliates, in each case subject to certain exceptions.

The Financing Agreement contains customary representations and warranties and events of default.

3.75% Convertible Senior Notes due June 1, 2026

In May 2021, the Company issued $ 100.0 million aggregate principal amount of its 3.75 % Convertible Senior Notes due June 1, 2026 (the “Convertible Notes”) under an indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.

On June 5, 2025, the Company entered into separate, privately-negotiated exchange agreements with a limited number of existing holders of the Convertible Notes (the “Convertible Noteholders”) to exchange (the “Exchange”) approximately $ 82.0 million aggregate principal amount of the Convertible Noteholders’ existing Convertible Notes for (i) an aggregate of 8,881,579 shares of the Company’s common stock (the “Shares”), valued at $ 1.52 per share based on the closing stock price on June 5, 2025, or $ 13.5 million in the aggregate and (ii) an aggregate cash payment of approximately $ 68.5 million.

Shareholders’ Equity, for more information).

Holders of the remaining $ 18.0 million aggregate principal amount of the Convertible Notes did not receive cash or shares of common stock in the Exchange mentioned above and the original terms of such Convertible Notes were not modified.

In connection with the repayment of the Convertible Notes in the Exchange, the Company wrote-off $ 0.5 million in unamortized debt issuance costs which is recorded as a loss on extinguishment of debt.

Holders of the remaining Convertible Notes may convert their notes at any time on or after March 6, 2026 until the close of the business day immediately preceding the maturity date.

Prior to June 1, 2026, the remaining h olders of the Convertible Notes may convert their notes only under certain circumstances.

Upon conversion, the Company will have the right to pay cash, or deliver shares of common stock of the Company or a combination thereof, at the Company’s election.

The initial conversion rate is 170.5611 shares of the Company’s common stock per $ 1,000 principal amount (which represents an initial conversion price of approximately $ 5.86 per share of the Company’s common stock).

The conversion rate, and therefore, the conversion price, is subject to adjustment, as further described below.

Holders of the remaining Convertible Notes who convert their notes in connection with a “make-whole fundamental change,” as defined in the indenture, may be entitled to a make-whole premium in the form of an increase in the conversion rate.

Additionally, in the event of a “fundamental change,” as defined in the indenture, holders of the remaining Convertible Notes may require the Company to purchase all or a portion of their note at a fundamental change repurchase price equal to 100 % of the principal amount of the Convertible Notes, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date.

As of June 30, 2025 and June 30, 2024, the if-converted value of the remaining Convertible Notes did not exceed the outstanding principal amount.

Commitments and Contingencies

Long‑term Debt Commitments

The Company is required to make semi‑annual interest payments on the 3.75 % Convertible Senior Notes due 2026, principal and interest payments on the Term Loan Facility and interest payments on the Revolving Credit Facility.

See Note 9, Debt , of the consolidated financial statements for more information.

Future minimum long‑term principal payments and interest on the 3.75 % Convertible Senior Notes due 2026 and Credit Facilities (as defined below), including short-term portion, as of June 30, 2024, are as follows (in thousands):

Debt Commitments

The Company is required to make semi‑annual interest payments on the Convertible Notes, principal and interest payments on the Term Loan Facility.

Future minimum principal payments and interest on the Convertible Notes and Term Loan Facility (as defined in Note 7.

Debt ), as of June 30, 2025, are as follows (in thousands):

Year Ending June 30,

(1) These amounts represent principal and interest cash payments over the contractual life of the debt obligations, including anticipated interest payments that are not recorded on the Company’s consolidated balance sheet.

Any conversion, premium, redemption or purchase of the Notes that would impact cash payments is noted in the preceding table.

Any conversion, premium, redemption or purchase of the Convertible Notes that would impact cash payments is noted in the preceding table.

Purchase Commitments

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The Company enters into software license agreements with third parties that may require royalty payments for each license used.

In connection with such agreements, the Company recorded royalty costs of $ 1.9 million, $ 2.3 million and $ 1.9 million for the years ended June 30, 2024, 2023 and 2022, respectively, which were recorded in cost of revenue or deferred cost of revenue.

The Company records royalty costs in cost of revenue or deferred cost of revenue.

The Company had approximately $ 3.1 million and $ 2.9 million accrued liabilities as of June 30, 2025 and 2024 , respectively, related to this agreement.

The following table provides information about the Company’s royalty expense and royalty payments (in thousands):

Years Ended June 30,

Royalty expense

Royalty payments

Software License Indemnity

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Should any of these estimates and assumptions change or prove to have been incorrect, the Company could incur significant charges related to legal matters that could have a material impact on its results of operations, financial position, and cash flows.

The Company's outstanding debt as of June 30, 2024 and June 30, 2023 is as follows (in thousands):

June 30, 2024

June 30, 2023

Principal Amount

Unamortized Debt Costs

Net Carrying Amount

Principal Amount

Unamortized Debt Costs

Net Carrying Amount

3.75% Convertible Senior Notes due 2026

Term Loan Facility

Revolving Credit Facility

Short-term debt

Long-term debt

3.75% Convertible Senior Notes due July 2026

In May 2021, the Company issued $ 100.0 million aggregate principal amount of its 3.75 % Convertible Senior Notes due 2026 (the “ 3.75 % Convertible Notes due 2026”) under an indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.

The aggregate principal amount of the 3.75 % Convertible Notes due 2026 totaling $ 97.1 million was issued to certain holders of the Company’s outstanding 3.75 % Convertible Notes due 2022 in exchange for approximately $ 82.1 million aggregate principal amount of 3.75 % Convertible Notes due 2022, and $ 2.9 million of 3.75 % Convertible Notes due 2026 were issued to certain other qualified new investors for cash (such transactions the “Exchange and Subscription Transactions”).

Holders of the 3.75 % Convertible Notes due 2026 may convert their notes at any time on or after March 6, 2026 until the close of the business day immediately preceding the maturity date.

Prior to June 6, 2026, holders of the 3.75 % Convertible Notes due 2026 may convert their notes only under certain circumstances.

Upon conversion, the Company will have the right to pay cash, or deliver shares of common stock of the Company or a combination thereof, at the Company’s election.

The conversion rate, and therefore, the conversion price, is subject to adjustment, as further described below.

Holders of the 3.75 % Convertible Notes due 2026 who convert their notes in connection with a “make-whole fundamental change,” as defined in the indenture, may be entitled to a make-whole premium in the form of an increase in the conversion rate.

Additionally, in the event of a “fundamental change,” as defined in the indenture, holders of the 3.75 % Convertible Notes due 2026 may require the Company to purchase all or a portion of their note at a fundamental change repurchase price equal to 100 % of the principal amount of the 3.75 % Convertible Notes due 2026, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date.

As of June 30, 2024 and June 30, 2023 , the if-converted value of the 3.75 % Convertible Notes due 2026 did not exceed the outstanding principal amount.

Credit Facilities

On May 6, 2021, the Company entered into a senior secured credit agreement (the “Credit Agreement”) with Silicon Valley Bank, individually as a lender and agent (“Agent”), and the other lenders from time to time parties thereto (together with Silicon Valley Bank as a lender, the “Lenders”), which provides for a new five-year $ 80 million term loan (the “Term

Loan Facility”) and a $ 40 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”).

The interest on the borrowings under the Credit Facilities is payable in arrears on the applicable interest payment date, at an annual interest rate of reserve-adjusted, 90-day term SOFR ( subject to a 0.50 % floor) plus a margin between 2.50 % and 3.25 % margin, determined by the Consolidated Senior Net Leverage Ratio (as defined in the Credit Agreement).

The Credit Agreement requires the Company to pay the Lenders an unused commitment fee equal to the average unused portion of the Revolving Credit Facilit y.

The Company pays a rate of 0.25 % to 0.40 % per annum of the average unused portion of the Revolving Credit Facility, determined by the Consolidated Senior Net Leverage Ratio (as defined in the Credit Agreement).

If all or a portion of the loans under the Term Loan Facility are prepaid, then the Company will be required to pay a fee equal to 1 % of the aggregate amount of the loans so prepaid, subject to certain exceptions.

During the year ended June 30, 2024 , the weighted average effective interest rate on the Term Loan Facility was 8.6 % and weighted average effective interest rate on the Revolving Credit Facility, including the unused commitment fee, was 9.5 %.

The Credit Agreement contains restrictions and covenants applicable to the Company and its subsidiaries.

Among other requirements, the Company may not permit the Fixed Charge Coverage Ratio (as defined in the Credit Agreement) to be less than a certain specified ratio for each fiscal quarter during the term of the Credit Agreement or the consolidated senior net leverage ratio to be greater than a certain specified ratio for each fiscal quarter during the term of the Credit Agreement.

On April 25, 2024, the Company entered into the Third Amendment to update the calculation of Consolidated EBITDA (as defined in the Credit Agreement) to maintain compliance with the debt covenants as of March 31, 2024.

As of June 30, 2024, the Company was in compliance with its covenants under the Credit Agreement.

The Credit Agreement also contains customary covenants that limit, among other things, the ability of the Company and its subsidiaries to (i) incur indebtedness, (ii) incur liens on their property, (iii) pay dividends or make other distributions, (iv) sell their assets, (v) make certain loans or investments, (vi) merge or consolidate, (vii) voluntarily repay or prepay certain indebtedness and (viii) enter into transactions with affiliates, in each case subject to certain exceptions.

The Credit Agreement contains customary representations and warranties and events of default.

A summary of interest expense on the Credit Facilities and the Notes is as follows (in thousands):

Year ended June 30,

Interest expense related to contractual interest coupon

Interest expense related to amortization of debt issuance costs

Stockholders’ Equity

The Company has 200.0 million shares authorized as of June 30, 2025 and 2024 and 112.6 million and 100.2 million shares issued and outstanding as of June 30, 2025 and 2024, respectively.

Common stock purchase warrants issued in connection with long-term debt

On June 6, 2025, concurrently with its entry into the Financing Agreement, the Company issued detachable warrants to purchase the Company’s common stock to certain of its Warrant Holders under the Financing Agreement.

The Warrant Holders were issued warrants to purchase 17,180,710 Premium Warrants with an exercise price of $ 1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 and 6,247,531 Penny Warrants with an exercise price of $ 0.01 per share exercisable immediately and expiring on June 6, 2032 .

No Penny Warrants were exercised as of June 30, 2025.

The Warrants have certain anti-dilution protection provisions, including price protection anti-dilution protection in the event that we sell stock at a price below $ 1.00 in the case of the Penny Warrants and $ 1.25 in the case of the Premium Warrants.

We agreed to issue the Warrants in connection with, and to induce the lenders to enter into, the Financing Agreement.

The Warrants and the shares of common stock issuable upon the exercise of such Warrants have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be sold absent registration or an applicable exemption from the registration requirements of the Securities Act.

Based in part upon the representations of each holder in each warrant, the offering and sale of each warrant is exempt from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

The Premium Warrants were valued at $ 13.1 million using a relative fair value method and is recorded in additional paid-in capital.

Further, $ 0.3 million in financing fees incurred in connection with the issuance of the Premium Warrants is recorded in a contra-equity account.

Common shares issued to Convertible Note holders

On June 5, 2025, the Convertible Noteholders agreed to Exchange approximately $ 82.0 million aggregate principal amount of the Convertible Noteholders’ existing Convertible Notes for (i) an aggregate of 8,881,579 Shares, valued at $ 1.52 per share based on the closing stock price on June 5, 2025, or $ 13.5 million in the aggregate and (ii) an aggregate cash payment of approximately $ 68.5 million.

On June 11, 2025, the Exchange was consummated and the Company issued the Shares to the Convertible Noteholders.

On their issuance date, the Shares were valued at $ 1.25 per share based on the closing stock price on June 11, 2025, or $ 11.1 million in the aggregate.

The decrease in stock price from the agreement date to the issuance date resulted in a $ 2.4 million gain, which was recorded as a gain on extinguishment of debt.

The Company paid approximately $ 0.4 million in fees to issue the common shares which was recorded as a permanent adjustment to paid-in-capital.

Treasury Stock

The Company records treasury stock at cost.

Treasury stock is comprised of shares of common stock purchased by the Company in the secondary market.

As of June 30, 2025, and June 30, 2024 , the Company had 3.1 million shares of treasury stock valued at $ 14.1 million.

Trea sury stock is included in Additional paid-in capital on the consolidated balance sheets.

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated other comprehensive income (loss) by component (in thousands):

Cumulative Translation Adjustment

Balance at June 30, 2023

Other comprehensive loss

Balance at June 30, 2024

Other comprehensive loss

Balance at June 30, 2025

Stock Incentive Plan and Employee Stock Purchase Plan

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PSUs granted generally vest at the end of a three year performance period and the amount of shares that vest are based on the Company's actual performance relative to predefined performance conditions.

The Board of Directors has the discretion to use different vesting schedules.

The Board of Directors

has the discretion to use different vesting schedules.

As of June 30, 2025, the 2007 Plan continued to remain in effect;

2 unchanged sentences

Years ended June 30,

Cost of revenue

Cost of revenue - product

Cost of revenue - service

Research and development

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Stock Options

The fair value of each option is estimated at the date of grant using the Black‑Scholes option pricing formula with the following assumptions:

Years Ended June 30,

Risk–free interest rate

2.71 % - 3.21 %

Dividend yield

Expected term

Expected volatility

54.1 % - 57.3 %

The Company did not grant any stock options to its employees in the years ended June 30, 2024 and 2023.

Determining Fair Value of Stock Options

The fair value of each grant of stock options was determined by the Company using the methods and assumptions discussed below.

Each of these inputs is subjective and generally requires significant judgment to determine.

The Company estimates the fair value of its stock options using the Black‑Scholes option‑pricing model.

The Company did not grant any stock options during the years ended June 30, 2025 and June 30, 2024.

The fair value of stock options grants are determined by using the Black‑Scholes option‑pricing model.

This fair value is then amortized over the requisite service periods of the awards.

The Company estimates the expected term of stock option by taking the average of the vesting term and the contractual term of the option, as illustrated by the simplified method.

The Company estimates the expected term of stock option by taking the average of the vesting term and the contractual term of the option.

The expected volatility is derived from the Company’s historical stock volatility over a period approximately equal to the expected term of the options.

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Exercisable at June 30, 2025

The aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the exercise price and the closing price of Accuray common stock of $ 1.82 a nd $ 3.87 on June 28, 2024 and June 30, 2023 , respectively, The amount represents what would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise as of that date.

There were no options granted during the years ended June 30, 2024 and 2023.

The grant date fair value of options granted during the year ended June 30, 2022 was $ 0.9 million.

The total intrinsic value of options exercised during the year ended June 30, 2024 was not material and the total intrinsic value of options exercised during the year ended June 30, 2022 was $ 0.3 million.

respectively, The amount represents what would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise as of that date.

There were no options exercised during the year ended June 30, 2025.

The total cash received from option exercises during the year ended June 30, 2024 and June 30, 2022 was $ 0.3 million and $ 1.2 million, respectively.

Tax benefits from tax deductions for exercised options and disqualifying dispositions in excess of the deferred tax asset, attributable to share compensation costs for such options, are credited to additional paid‑in capital.

The benefits are recognized against income taxes.

Realized excess tax benefits related to stock options exercises was zero for each of the years ended June 30, 2024, 2023 and 2022.

As of June 30, 2024, there was $ 0.6 million o f unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average per iod of 0.9 years.

The total intrinsic value of options exercised during the year ended June 30, 2024 was not material.

The total cash received from option exercises during the year ended June 30, 2024 was $ 0.3 million.

As of June 30, 2025, there wa s $ 0.2 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 0.5 years.

The following table summarizes information about outstanding and exercisable options at June 30, 2025 (in thousands, except years and exercise price):

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Restricted Stock Units

The grant date fair value of the RSUs gran ted was $ 9.7 million, $ 7.2 millio n and $ 12.0 million for the years ended June 30, 2024, 2023 and 2022, respectively.

The aggregate fair market value of the RSUs that vested during the years ended June 30, 2024, 2023 and 2022, wa s $ 5.9 million, $ 4.5 million and $ 6.4 million, respectively.

The grant date fair value of the RSUs granted was $ 9.2 million a nd $ 9.7 millio n during the years ended June 30, 2025 and 2024, respectively.

The aggregate fair market value of the RSUs that vested during the years ended June 30, 2025 and 2024, was $ 5.5 million and $ 5.9 million, respectively.

As of June 30, 2025, there was $ 11.5 million of unrecognized compensation cost related to the RSUs, which is expected to be recognized over a weighted average perio d of 1 .4 years.

Performance Stock Units

The grant date fair value of PSUs granted was $ 3.3 million, $ 2.4 million and $ 3.7 million for the years ended June 30, 2024, 2023 and 2022, respectively.

The grant date fair value of PSUs granted w as $ 2.8 million and $ 3.3 million during the years ended June 30, 2025 and 2024, respectively.

There were no PSUs that vested during the year ended June 30, 2025 because the performance conditions were not met.

The aggregate fair value of the PSUs that vested during the year ended June 30, 2024, w as $ 0.4 million .

There were no PSUs that vested during the years ended June 30, 2023 and 2022.

As of June 30, 2024, there was $ 2.6 million of unrecognized compensation cost related to the PSUs, which is expected to be recognized over a weighted average perio d of 2.0 years.

As of June 30, 2025, there was $ 2.9 million of unrecognized compensation cost related to the PSUs, which is expected to be recognized over a weighted average period of 1.7 years.

Employee Stock Purchase Plan

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5.05 % - 5.39 %

0.10 % - 2.16 %

Dividend yield

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37.22 % - 61.48 %

35.49 % - 54.33 %

The risk‑free rate for the expected term of the ESPP option was based on the U.S.

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and the expected term was based upon the offering period of the ESPP.

The Company issue d 1.1 million, 1.3 million and 1.1 million shares under the ESPP during fiscal 2024, 2023 and 2022, respectively, at a weighted average purchase price per share of $ 1.79 , $ 1.75 and $ 2.51 , respectively.

As of June 30, 2024, total unrecognized compensation cost related to th e ESPP plan was $ 0.7 million, which the Company expects to recognize over a weighted average period of 0.9 years.

The Company issued 1.2 million and 1.1 million shares under the ESPP during the years ended June 30, 2025 and 2024, respectively, at a weighted average purchase price per share o f $ 1.37 and $ 1.79 , respectively.

As of June 30, 2025, total unrecognized compensation cost related to the ESPP plan was $ 0.6 million, which the Company expects to recognize over a weighted average period of 0.9 years.

Common Stock Available For Issuance

In November 2023, the Company’s stockholders approved amending and restating the 2016 Plan to increase the number of shares of the Company’s common stock available for issuance by 5.0 million shares.

At June 30, 2024, the Company h ad 2.5 million shares of common stock reserved for issuance under the stock incentive plans and 3.8 million shares of common stock reserved for issuance under the employee stock purchase plan.

In November 2024, the Company’s stockholders approved to increase the number of shares of common stock available for issuance by 5.0 million shares under its Amended and Restated 2016 Equity Incentive Plan, and to increase the number of shares of common stock available for issuance by 2.5 million shares under its Amended and Restated Accuray Incorporated 2007 Employee Stock Purchase Plan.

At June 30, 2025, the Company had 5.2 million shares of common stock reserved for issuance under the stock incentive plans and 2.6 million shares of common stock reserved for issuance under the employee stock purchase plan.

Joint Venture

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The Company recognizes revenue on sales to the JV in the current period of control transfer, eliminating a portion of profit to the extent goods sold have not been sold through by the JV to an end customer by the end of each reporting period.

With the receipt of the necessary permits and licenses to operate, the JV has begun to manufacture and sell a locally branded “Made in China” radiotherapy device, the Tomo C radiation therapy system, in the Class B license category.

January 2025.

The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems.

The following table shows the reconciliation between the carrying value of the Company's investment in the JV and its proportional share of the underlying equity in net assets of the JV (in thousands):

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Deferred intra-entity profit margin

Dividend declared

Equity method goodwill

Proportional share of equity investment in joint venture

As of June 30, 2024, the Company’s carrying value of the investment in the JV for the Company's proportional share of the JV's currency translation adjustment was decreased by $ 0.6 million.

In June 2024, the JV declared a $ 2.5 million dividend to the Company payable in fiscal year 2025.

The Company recorded this dividend as a reduction to its carrying value in the JV.

At June 30, 2023, the Company’s carrying value of the investment in the JV was increased for the Company's proportional share of the investee's currency translation adjustment was not material.

As of June 30, 2025 and June 30, 2024, the Company’s carrying value of the investment in the JV for the Company's proportional share of the JV's currency translation adjustment wa s decreased by $ 0.4 million and $ 0.6 million, respectively .

In June 2025, the JV declared a $ 2.5 million dividend to the Company that was paid in July 2025.

In June 2024, the JV declared a $ 2.5 million dividend to the Company paid in fiscal year 2025.

The Company records the dividends as a reduction to its carrying value in the JV.

No i mpairment was identified as of June 30, 2025 and June 30, 2024.

5 unchanged sentences

March 31, 2024

Twelve Months Ended

March 31, 2022

Net income attributable to the Company

11 unchanged sentences

Years Ended June 30,

Deferred intra-entity profit margin recognized on sales to the JV

Deferred intra-entity profit margin on sales to the JV

Net deferred profit margin on sales to the JV (1)

Deferred gross profit recognized on sales to the JV

Deferred gross profit on sales to the JV

Net deferred gross profit on sales to the JV (1)

(1) Profit earned by the Company from the JV is eliminated through cost of goods sold until it is realized;

such profits would generally be considered realized when the inventory has been sold through to third parties.

Loss before provision for income taxes on the accompanying statements of operations and comprehensive loss included the following components (in thousands):

Income (loss) before provision for income taxes on the accompanying statements of operations and comprehensive loss included the following components (in thousands):

Years Ended June 30,

Total loss before provision for income taxes

Total income (loss) before provision for income taxes

The provision for income taxes consisted of the following (in thousands):

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Global intangible low-taxed income

Equity in earnings of unconsolidated affiliates

Chane in valuation of warrants

Change in valuation allowance

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Capitalized research and development

Fixed assets/intangibles

Fixed assets and intangibles

Section 163(j) interest

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The federal and state carryforwards expire in varying amounts beginning in 2029 for federal and 2026 for state purposes.

In addition, as of June 30, 2024 , the Company had federal and state research and development tax credits of $ 28.4 million and $ 22.8 million, respectively.

In addition, as of June 30, 2025, the Company had federal and state research and development tax cre dits of $ 28.5 million an d $ 22.8 million, respectively.

If not utilized, the federal research credits will begin to expire in 2026, the California research credits have no expiration date and the other state research credits will begin to expire in 2026.

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The Company will continue to evaluate the impact of this tax law change on future periods.

At June 30, 2024, t he Company has $ 2.5 million of deferred tax liability related to withholding tax expected to be paid on the remittance of unrepatriated distributable reserves in France, Japan and Switzerland.

At June 30, 2025 , the Company has $ 2.1 million of deferred tax liability related to withholding tax expected to be paid on the remittance of unrepatriated distributable reserves in France, Japan and Switzerland.

At June 30, 2025 , the Company has undistributed earnings of certain foreign subsidiaries of $ 11.8 million that it has indefinitely invested, and on which it has not recognized deferred taxes.

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The Company anticipates there will be no material changes in uncertain tax positions in the next 12 months.

As of June 30, 2024 , the amount of gross unrecognized tax benefits was $ 22.0 million, of which $ 21.6 million would not affect income tax expense before consideration of any valuation allowance.

As of June 30, 2025, the amount of gross unrecognized tax benefits was $ 22.6 million, of which $ 21.8 million w ould not affect income tax expense before consideration of any valuation allowance.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

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The Company is also subject to examination of its income tax returns by the Internal Revenue Service (“IRS”) and other foreign tax authorities, and in some cases the Company has received additional tax assessments which have not been significant.

The Company is under audit by the Indian tax authorities for the fiscal year 2021 and 2023 and we do not expect a material impact on the consolidated financial statements.

The Company is under audit by the Indian tax authorities for the fiscal year 2021 and we do not expect a material impact on the consolidated financial statements.

On July 4, 2025, new federal tax legislation was enacted, introducing significant changes to U.S.

corporate income tax law.

Key provisions include the optional expensing of domestic research and development costs under Section 174, modifications to business interest deductions under Section 163(j), and changes to international tax rules such as GILTI.

Some provisions are effective retroactively to January 1, 2025, while others phase in through 2027.

As the legislation was

enacted after the balance sheet date, its effects are not reflected in the financial statements for the fiscal period ended June 30, 2025.

The Company is currently evaluating the potential impact, including implications for deferred tax assets and related disclosures in the subsequent period.

Retirement Plans

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The Company makes discretionary matching contributions to the 401(k) Plan on behalf of employees up to the limit determined by the Board of Directors.

The Company contribute d $ 2.1 million, $ 2.2 million and $ 2.3 million to the 401(k) Plan during the years ended June 30, 2024, 2023 and 2022, respectively.

The Company contribu ted $ 2.2 million an d $ 2.1 million to the 401(k) Plan during the years ended June 30, 2025 and 2024, respectively.

Defined Benefit Pension Obligation

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Net amount recognized

The following table presents the amounts recognized in accumulated other comprehensive income (loss) (before tax) for the defined benefit pension plan (in thousands):

The following table presents the amounts recognized in accumulated o ther comprehensive loss (before tax) for the defined benefit pension plan (in thousands):

Net actuarial gain

Prior service credit

Total recognized in accumulated other comprehensive income (loss)

Total gain recognized in accumulated other comprehensive loss

The following table presents the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for this defined benefit pension plan where accumulated benefit obligation exceeded the fair value of plan assets (in thousands):

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Expected returns on assets

Amortization of prior service cost (credit)

Amortization of prior service credit

Amortization of net gain

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Net (gain) loss arising during the year

Prior service cost (credit)

Amortization of prior service cost (credit)

Prior service credit

Amortization of prior service credit

Amortization of net gain

Effect of settlement

Total recognized in other comprehensive (gain) loss

Total recognized in net periodic benefit costs and other comprehensive income (loss)

Total (gain) loss recognized in other comprehensive loss

Total recognized in net periodic benefit costs and other comprehensive loss

The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during fiscal year 2026 related to the Company’s defined benefit pension plan are as follows (in thousands):

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Contributions and Future Benefit Payments

The Company made contributions of approximately $ 1.3 million, $ 1.3 million and $ 1.2 million to the defined benefit pension plan during fiscal years 2024, 2023 and 2022 , respectively.

The Company expects total contributions to the defined benefit pension plan for fiscal year 2025 will be approximately $ 1.3 million.

The Company made contributions of approximate ly $ 1.4 million a nd $ 1.3 million to the defined benefit pension plan during fiscal years 2025 and 2024, respectively.

The Company expects total contributions to the defined benefit pension plan for fiscal year 2026 will be approximat ely $ 1.5 million.

Estimated future benefit payments expected to be paid by the defined benefit pension plan at June 30, 2025 are as follows (in thousands):

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The Copré Foundation invests the plan assets in insurance contracts which can be measured at Level 2 in the fair value hierarchy.

In fiscal 2024 and 2023 , the expected interest rate for mandatory retirement savings was 1.5 % and 1.0 %, respectively.

In fiscal 2025 and 2024, the expected interest rate for mandatory retirement savings was 1.5 % a nd 1.5 %, respectively.

The technical administration and management of the s avings account are guaranteed by the Copré Foundation.

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The Company has one operating and reporting segment (oncology systems group), which develops, manufactures and markets proprietary medical devices used in radiation therapy for the treatment of cancer patients.

The Company’s Chief Executive Officer, its Chief Operating Decision Maker, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

The Company’s Chief Executive Officer , its Chief Operating Decision Maker (“CODM”), assesses financial performance by reviewing a reporting package based on consolidated results of the Company when making decisions about allocating resources and assessing performance.

The CODM evaluates performance based on net revenues, gross profit, and operating income which are consistent with what is reported on the consolidated statements of comprehensive income (loss).

Significant segment expenses regularly provided to the CODM are consolidated research and development expenses, sales and marketing, and general and administrative expenses as reported on the consolidated financial statements.

In addition, the CODM regularly reviews the budget and forecast-to-actual variances to evaluate performance and to make decisions about allocating capital and other resources.

The Company does not assess the performance of its individual product lines on measures of profit or loss, or asset-based metrics.

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The Company disaggregates its revenues from contracts by geographic region, as the Company believes this best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors.

The Company reports its customer revenues in four geographic regions:

the Americas, EIMEA, Asia Pacific and Japan.

The Company reports its customer revenues in five geographic regions:

the Americas, EIMEA, Japan, China and Asia Pacific.

The Americas region primarily includes the United States, Canada, and Latin America.

The EIMEA region includes Europe, India, the Middle East and Africa.

The Asia Pacific region consists of Asia, Australia and New Zealand.

The Asia Pacific region consists of Asia (excluding Japan and China), Australia and New Zealand.

Additionally, the Company typically recognizes revenue at a point in time for product revenue and recognizes revenue over time for service revenue.

Revenues attributed to a country or region are based on the shipping addresses of the Company’s customers.

The following summarizes revenue by geographic region (in thousands):

The following summarizes net revenue by geographic region (in thousands):

Years ended June 30,

Asia Pacific, excluding China

Total net revenues

The following summarizes countries that represent more than ten percent of the Company’s revenues (in thousands):

The following summarizes countries that represent more than ten percent of the Company’s net revenues (in thousands):

Years ended June 30,

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Information regarding geographic areas in which the Company has long-lived assets, which consists of property, plant and equipment, net, and operating lease right-of-use assets are as follows (in thousands):

Asia Pacific, excluding China

Total long-lived assets

Property and equipment, net and operating lease right-of-use assets in the Americas region are located in the United States.

Subsequent Events

On September 12, 2024, the Company entered into the Fourth Amendment (as defined in Item 9B(a) of this Annual Report on Form 10-K) to (i) change the requirements of certain financial maintenance covenants under the Credit Agreement for the fiscal quarter ending September 30, 2024, (ii) add a minimum liquidity covenant to the Credit Agreement and (iii) reduce the available revolving commitments available under the Credit Agreement to no more than $20.0 million.

The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K and determined that there are no additional events that would require adjustments to its disclosures in the consolidated financial statements.

The long-lived assets in the Americas region are located in the United States as of June 30, 2025, and June 30, 2024.

CHANGES IN AND DISAGREEMENTS WITH ACCO UNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

CONTROL S AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our interim Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a‑15(e) of the Exchange Act) as of June 30, 2024.

Based on this evaluation, our interim Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by our Annual Report on Form 10‑K, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our interim Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control over Financial Reporting

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a‑15(e) of the Exchange Act) as of the end of the period covered by our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the “Evaluation Date”).

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the Evaluation Date, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a‑15(f) of the Exchange Act.

Under the supervision and with the participation of the interim Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the guidelines established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) 2013.

Based on this evaluation, management concluded that as of June 30, 2024 our internal control over financial reporting was not effective as a result of two material weaknesses detailed below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Risk assessment

A deficiency was identified associated with the risk assessment component of the COSO framework.

This specifically related to the implementation of the SAP S/4HANA ERP system on August 1, 2023, which contributed to two material weaknesses within our system of internal control over financial reporting at the control activity level;

• The system was not designed and did not maintain effective controls to ensure that all manual journal entries consistently enforced segregation of duties in the approval process prior to being posted to the general ledger system.

• The system was not designed to and did not maintain effective controls to ensure the existence of inventory at the Madison manufacturing warehouse locations because its controls relied on a cycle count program that, due to limitations associated with the system, was not sufficiently precise.

Notwithstanding the material weaknesses, we have concluded there were no adjustments that resulted from the above material weaknesses and that the financial statements included in this Form 10-K present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

Under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the guidelines established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) 2013.

Based on this evaluation, management concluded that as of June 30, 2025 our internal control over financial reporting was effective.

The effectiveness of our internal control over financial reporting as of June 30, 2025 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report included herein.

Management is committed to addressing and remediating the material weaknesses described above and has immediately commenced developing a plan to enhance the design and operating effectiveness of our internal controls over financial reporting.

Remediation measures, which are currently ongoing, include the following:

• Enhance the ERP system to ensure systemic workflows are built for all manual journals enforcing the segregation between creation and review/posting of journals.

• Enhance the ERP system to allow for full capture of inventory with proper count timing required for an effective cycle count program, inclusive of reinforcement for proper cycle count process through policy statements, regular communications and in periodic reviews and meetings with managers and staff.

Though remediation measures are subject to continual review, we expect the remediation measures described above will contribute to addressing the identified material weaknesses.

Implementation of the remediation measures is subject to oversight by the Audit Committee of our Board of Directors, and while certain remediation measures are currently in place, the identified material weaknesses will not be considered remediated until the remediation measures have been fully designed and implemented, the applicable controls operate for a sufficient period of time, and we have concluded through testing that the newly implemented controls are operating effectively.

(d) Changes in Internal Control over Financial Reporting

Our management, with the participation of our interim Chief Executive Officer and Chief Financial Officer, has evaluated any changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2024, and has concluded that other than the material weaknesses identified with corresponding remediation measures described above, there were no changes to our internal control during such quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Remediation of Previously Disclosed Material Weaknesses

As noted in our 2024 Annual Report on Form 10-K (the “2024 Annual Report”), management identified a material weakness within our system of internal control over financial reporting due to our SAP S/4HANA ERP system not being designed for and not maintaining effective controls to ensure that all manual journal entries consistently enforced segregation of duties in the approval process prior to being posted to the general ledger system.

Remediation of this material weakness was completed during the three months ended December 31, 2024, and included establishing new controls and procedures to ensure segregation of duties is maintained between the creation, posting and approval of manual journal entries.

As of December 31, 2024, these control activities have been appropriately designed and implemented, and have operated effectively for a sufficient period of time to conclude that the previously identified material weakness has been remediated.

Also as noted in our 2024 Annual Report, management identified a second material weakness within our system of internal control over financial reporting due to our SAP S/4HANA ERP system not being designed for and not maintaining effective controls to ensure the existence of inventory at the Madison manufacturing warehouse locations because its controls relied on a cycle count program that, due to initial limitations associated with certain ERP system reports, was not sufficiently precise.

This material weakness was remediated as of March 31, 2025, which included establishing new controls to allow for full capture of inventory with proper count timing required for an effective cycle count program, inclusive of reinforcement for proper cycle count process through policy statements, regular communications and periodic reviews and meetings with managers and staff.

As of March 31, 2025, these control activities have been appropriately designed and

implemented, and have operated effectively for a sufficient period of time to conclude that the previously identified material weakness has been remediated.

Furthermore, the remediation of the two material weaknesses associated with the aforementioned control activities resulted from the remediation of the deficiency in the risk assessment component of the COSO framework disclosed in our 2024 Annual Report, which we remediated by performing a comprehensive risk analysis of the affected areas and implemented control activities that effectively managed the risks.

Management has concluded that the Company’s consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented with accounting principles generally accepted in the United States of America.

Changes in Internal Control over Financial Reporting

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated any changes in our internal control over financial reporting that occurred during the year ended June 30, 2025, and has concluded that other than the changes described above under "Remediation of Previously Disclosed Material Weaknesses" there were no changes in our internal control over financial reporting that occurred that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Internal Controls

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We have audited the internal control over financial reporting of Accuray Incorporated (a Delaware corporation) and subsidiaries (the “Company”) as of June 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, because of the effect of the material weaknesses described in the following paragraphs on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of June 30, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weaknesses have been identified and included in management’s assessment.

The Company has identified a deficiency in a principle associated with the risk assessment component of the COSO framework.

This specifically related to the implementation of the SAP S/4HANA ERP system on August 1, 2023, which contributed to two material weaknesses within the Company’s system of internal control over financial reporting at the control activity level:

The material weaknesses identified above were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and this report does not affect our report dated September 19, 2024 which expressed an unqualified opinion on those financial statements.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended June 30, 2025, and our report dated August 28, 2025 expressed an unqualified opinion on those financial statements.

Basis for opinion

9 unchanged sentences

A company’s internal control over financial reporting is a process designed 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.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

4 unchanged sentences

San Jose, California

September 19, 2024

August 28, 2025

DIRECTORS, EXECUTIVE O FFICERS AND CORPORATE GOVERNANCE

Directors, Executive Officers and Corporate Governance

The information in our 2024 Proxy Statement regarding directors and executive officers appearing under the headings “Proposal One—Election of Directors,” “Executive Officers” and “Delinquent Section 16(a) Reports” is incorporated herein by reference.

The information in our 2025 Proxy Statement regarding directors and executive officers appearing under the headings “Election of Directors,” “Executive Officers” and “Delinquent Section 16(a) Reports” is incorporated herein by reference.

In addition, the information in our 2025 Proxy Statement regarding the director nomination process, the Audit Committee financial expert and the identification of the Audit Committee members appearing under the heading “Corporate Governance and Board of Directors Matters” is incorporated herein by reference.

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PRINCIPAL ACCO UNTING FEES AND SERVICES

The information in our 2024 Proxy Statement appearing under the headings “Proposal Five—Ratification of Appointment of Independent Registered Public Accounting Firm—Audit and Non‑Audit Services” and “Proposal

Five—Ratification of Appointment of Independent Registered Public Accounting Firm—Audit Committee Pre‑Approval Policies and Procedures” is incorporated herein by reference.

The information in our 2025 Proxy Statement appearing under the headings “Ratification of Appointment of Independent Registered Public Accounting Firm—Audit and Non‑Audit Services” and “Ratification of Appointment of Independent Registered Public Accounting Firm—Audit Committee Pre‑Approval Policies and Procedures” is incorporated herein by reference.

EXHIBITS AND FINA NCIAL STATEMENT SCHEDULES

3 unchanged sentences

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Stockholders’ Equity

8 unchanged sentences

Amended and Restated Bylaws of Registrant.

Indenture between Registrant and The Bank of New York Mellon Trust Company, N.A., as trustee, dated as of August 7, 2017.

Form of Common Stock Certificate.

Form of 3.75% Convertible Senior Note due 2022 (included in Exhibit 4.3).

First Supplemental Indenture, dated as of December 4, 2017, between the Registrant and The Bank of New York Mellon Trust Company, N.A., as trustee .

Indenture, dated as of May 13, 2021, between the Registrant and The Bank of New York Mellon Trust Company, N.A., as trustee .

1 unchanged sentence

Description of the Registrant’s Securities

Form of Premium Warrant

Form of Penny Warrant

Form of DDTL Premium Warrant

Form of DDTL Penny Warrant

Office Lease between Old Sauk Trails Park Limited Partnership and TomoTherapy Incorporated, dated October 22, 2001.

First Amendment to Lease between Old Sauk Trails Park Limited Partnership and TomoTherapy Incorporated, dated May 1, 2004.

Second Amendment to Lease between Old Sauk Trails Park Limited Partnership and

Incorporated by Reference

Exhibit Description

Second Amendment to Lease between Old Sauk Trails Park Limited Partnership and Accuray, Inc FKA TomoTherapy, Inc., dated October 19, 2016.

Accuray, Inc FKA TomoTherapy, Inc., dated October 19, 2016.

Third Amendment to Lease between Old Sauk Trails Park Limited Partnership and Accuray Incorporated, dated March 27, 2020.

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Form of Accuray Incorporated Stand-Alone Inducement Stock Option Agreement for Sandeep Chalke.

TomoTherapy Incorporated 2000 Stock Option Plan, as amended, and forms of option agreements thereunder.

TomoTherapy Incorporated 2002 Stock Option Plan, as amended, and forms of option agreements thereunder.

Incorporated by Reference

Exhibit Description

TomoTherapy Incorporated 2000 Stock Option Plan, as amended, and forms of option agreements thereunder.

TomoTherapy Incorporated 2002 Stock Option Plan, as amended, and forms of option agreements thereunder.

TomoTherapy Incorporated 2007 Equity Incentive Plan, as amended, and forms of option agreements thereunder.

Form of Indemnification Agreement by and between Registrant and each of its directors and executive officers.

Executive Employment Agreement by and Between Registrant and Jesse Chew, dated January 1, 2023.

Executive Employment Agreement by and Between Registrant and Suzanne Winter, dated January 1, 2023

Executive Employment Agreement by and between Registrant and Michael Hoge, dated January 1, 2023.

Executive Employment Agreement by and between Registrant and Ali Pervaiz, dated January 1, 2023.

Executive Employment Agreement by and between Registrant and Sandeep Chalke, dated May 2, 2022.

Credit Agreement among the Registrant, as the Borrower, the several lenders from time to time party thereto, and Silicon Valley Bank, as administrative agent, lead arranger, issuing lender and swingline lender, dated as of May 6, 2021.

First Amendment to Credit Agreement among Registrant, as the Borrower, the several banks and other financial institutions or entities party hereto, and Silicon Valley Bank, as administrative agent, issuing lender and swingline lender, dated as of October 28, 2022.

Second Amendment to Credit Agreement among Registrant, as the Borrower, the several banks and other financial institutions or entities party hereto, and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as administrative agent, issuing lender and swingline lender, dated as of November 20, 2023.

Third Amendment to Credit Agreement among Registrant, as the Borrower, the several banks and other financial institutions or entities party hereto, and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as administrative agent, issuing lender and swingline lender, dated as of April 25, 2024.

Form of Exchange Agreement, dated as of May 6, 2021, between the Registrant and each signatory thereto.

Executive Employment Agreement by and Between Registrant and Jesse Chew, dated February 3, 2025.

Executive Employment Agreement by and Between Registrant and Suzanne Winter, dated February 3, 2025

Executive Employment Agreement by and between Registrant and Leonel Peralta, dated February 3,2025.

Executive Employment Agreement by and between Registrant and Ali Pervaiz, dated February 3, 2025.

Executive Employment Agreement by and between Registrant and Sandeep Chalke, dated February 3, 2025.

Letter Agreement for Interim CEO Role by and between Registrant and Sandeep Chalke, dated September 3, 2024.

Separation Agreement and General Release by and between Registrant and Michael Hoge, dated January 6, 2025

Form of Exchange Agreement

Governance Agreement, dated as of June 6, 2025, between the Registrant and TCW Asset Management Company LLC

Financing Agreement, dated as of June 6, 2025, between the Registrant as the Administrative Borrower, the guarantors listed hereto, the lenders from time to time party hereto, as lenders, TCW Asset Management Company LLC, as collateral agent and administrative agent, and Wingspire Capital LLC, as servicing agent

Form of Subscription Agreement, dated as of May 6, 2021, between the Registrant and each signatory thereto .

Incorporated by Reference

Exhibit Description

Insider Trading Policy

List of subsidiaries.

Incorporated by Reference

Exhibit Description

Consent of Grant Thornton LLP, independent registered public accounting firm.

8 unchanged sentences

* Management contract or compensatory plan or arrangement.

Confidential treatment has been granted with respect to portions of this exhibit.

Certain portions of this exhibit have been omitted because they are both not material and would be competitively harmful if publicly disclosed.

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FORM 10-K SUMMARY

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Madison, State of Wisconsin, on September 19, 2024.

ACCURAY INCORPORATED

/s/ S andeep C halke

Sandeep Chalke

Interim Chief Executive Officer

/s/ S uzanne W inter

Suzanne Winter

President and Chief Executive Officer

/s/ Ali Pervaiz

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POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Sandeep Chalke and Ali Pervaiz, and each of them, as his true and lawful attorneys‑in‑fact and agents, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10‑K, and to file the same, with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys‑in‑fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys‑ in‑ fact and agents, and any of them or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Suzanne Winter and Ali Pervaiz, and each of them, as his true and lawful attorneys‑in‑fact and agents, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10‑K, and to file the same, with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys‑in‑fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys‑ in‑ fact and agents, and any of them or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following and on the dates indicated.

/s/ S andeep C halke

Sandeep Chalke

Interim Chief Executive Officer (Principal Executive Officer)

September 19, 2024

/s/ Ali Pervaiz

Chief Financial Officer (Principal Financial and Accounting Officer)

September 19, 2024

President, Chief Executive Officer and Director

/s/ S uzanne W inter

Suzanne Winter

President, Chief Executive Officer and Director (Principal Executive Officer)

August 28, 2025

/s/ Ali Pervaiz

Senior Vice President and Chief Financial Officer (Principal Financial Officer)

August 28, 2025

/s/ Michael J.

Corporate Controller (Principal Accounting Officer)

August 28, 2025

/s/ Joseph E.

Chairperson of the Board and Director

September 19, 2024

August 28, 2025

/s/ Robert C.

September 19, 2024

August 28, 2025

/s/ Beverly A.

September 19, 2024

August 28, 2025

/s/ Mika Nishimura

Mika Nishimura

September 19, 2024

August 28, 2025

/s/ Steven F.

August 28, 2025

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis