ACCURAY INC 10-K/A

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ACCURAY INCORPORATED INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page No. Report of Independent Registered Public Accounting Firm (PCAOB ID 248 ) 46 Consolidated Balance Sheets 48 Consolidated Statements of Operations and Comprehensive Income (Loss) 49 Consolidated Statements of Stockholders’ Equity 50 Consolidated Statements of Cash Flows 51 Notes to Consolidated Financial Statements 53 45 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Accuray Incorporated 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, 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, except for the material weaknesses described in the third paragraph of that report, as to which the date is February 17, 2026, expressed an adverse opinion thereon. Restatement of 2025 financial statements As discussed in Note 2, the 2025 consolidated financial statements have been restated to correct a misstatement. Basis for opinion 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 46 Table of Contents 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 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 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. The transaction price of each contract is allocated to individual performance obligations based upon relative stand-alone selling price (“SSP”). The SSP of performance obligations is determined based on observable prices at which the Company separately sells the products and services. If the SSP is not directly observable, the Company will estimate the SSP considering market conditions, entity specific factors, and information about the customer or class of customer that is reasonably available. We identified the determination of the SSP of performance obligations as a critical audit matter. The principal consideration for our assessment that the determination of the SSP of performance obligations represents a critical audit matter is that the estimates made in determining SSP involve significant judgment due to the absence of directly observable data which requires the Company to make subjective assumptions used to estimate the SSP for each performance obligation. Evaluating the appropriateness of these estimates requires a high degree of auditor judgment and an increased extent of effort. Our audit procedures related to the determination of the SSP of performance obligations included the following, among others: ● We tested the design and operating effectiveness of internal controls over the Company’s determination of the SSP of performance obligations, including controls covering the validation of the completeness and accuracy of underlying data used in the analysis. ● We evaluated the appropriateness of the overall methodology used by management, including considering whether the methodology maximized the use of observable inputs available. ● We tested management’s process by evaluating key assumptions for performance obligations that do not include directly observable sales or for performance obligations that do not include sufficient directly observable sales. Specifically, we: – considered how management determined the disaggregation of distinct customer groups; – determined the appropriateness of discount rates applied to list prices based on the Company’s pricing strategy and target margins for customer groups, including comparing the discount rates to internal pricing policies; – recalculated and validated the inputs used in the calculation; – made inquiries of staff members outside of the accounting department to determine if there are factors that could have indicated a change in the Company’s go-to market strategy; – compared the SSP indicated by management’s analysis to known orders at the performance obligation level for a sample of items; and – compared SSP at the performance obligation level to the prior year and evaluated the reasons for significant relative fluctuations. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2006. San Jose, California August 28, 2025, except for the “Remaining Performance Obligations” included in Note 2, as to which the date is February 17, 2026 47 Table of Contents Accuray Incorporated Consolidated Balance Sheets (in thousands, except share and per share amounts) June 30, 2025 June 30, 2024 ASSETS Current assets: Cash and cash equivalents $ 57,416 $ 68,570 Restricted cash 574 485 Accounts receivable, net of allowance for credit losses of $ 369 and $ 2,251 as of June 30, 2025 and June 30, 2024, respectively (a) 83,192 92,001 Inventories 141,020 138,324 Prepaid expenses and other current assets (b) 33,501 23,006 Deferred cost of revenue 1,762 850 Total current assets 317,465 323,236 Noncurrent assets: Property and equipment, net 28,658 24,774 Investment in joint venture 4,612 9,826 Operating lease right-of-use assets, net 33,115 33,773 Goodwill 57,802 57,672 Restricted cash 4,144 1,337 Other assets 24,443 18,009 Total assets $ 470,239 $ 468,627 LIABILITIES AND STOCKHOLDERS ’ EQUITY Current liabilities: Accounts payable $ 34,033 $ 50,020 Accrued compensation 14,573 17,128 Operating lease liabilities 7,375 6,218 Other accrued liabilities 29,361 28,508 Customer advances 12,197 13,988 Deferred revenue 82,306 71,649 Short-term debt, net 12,734 7,756 Total current liabilities 192,579 195,267 Noncurrent liabilities: Operating lease liabilities 32,482 32,373 Long-term other liabilities 5,160 7,389 Warrant liability 8,497 — Deferred revenue 26,566 24,114 Long-term debt, net 123,786 164,400 Total liabilities 389,070 423,543 Commitments and contingencies (Note 8) Stockholders’ equity: Common stock, $ 0.001 par value; authorized: 200,000,000 shares as of June 30, 2025 and June 30, 2024, respectively; issued and outstanding: 112,643,852 and 100,194,932 shares at June 30, 2025 and June 30, 2024, respectively 113 100 Additional paid-in-capital 602,165 566,887 Accumulated other comprehensive loss ( 1,837 ) ( 4,222 ) Accumulated deficit ( 519,272 ) ( 517,681 ) Total stockholders' equity 81,169 45,084 Total liabilities and stockholders’ equity $ 470,239 $ 468,627 (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. See Note 11. (b) Included other receivable from the joint venture, an equity method investment, of $377 and $743 at June 30, 2025, and June 30, 2024, respectively. The accompanying notes are an integral part of these consolidated financial statements 48 Table of Contents Accuray Incorporated Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except per share amounts) Years Ended June 30, 2025 2024 Net revenue: Products (a) $ 237,580 $ 234,164 Services (b) 220,925 212,387 Total net revenue 458,505 446,551 Cost of revenue: Cost of products 162,569 161,061 Cost of services 148,969 142,569 Total cost of revenue (c) 311,538 303,630 Gross profit 146,967 142,921 Operating expenses: Research and development (d) 47,942 49,732 Selling and marketing 43,315 42,619 General and administrative 47,871 50,066 Total operating expenses 139,128 142,417 Income from operations 7,839 504 Income from equity method investment 4,714 1,838 Interest expense ( 12,954 ) ( 11,624 ) Gain on extinguishment of debt 1,475 — Loss from change in fair value of warrant liability ( 499 ) — Other income (expense), net 559 ( 2,538 ) Income (loss) before provision for income taxes 1,134 ( 11,820 ) Provision for income taxes 2,725 3,725 Net loss $ ( 1,591 ) $ ( 15,545 ) Net loss per share - basic and diluted $ ( 0.02 ) $ ( 0.16 ) Weighted average common shares used in computing net loss per share: Basic and diluted 102,768 98,272 Net loss $ ( 1,591 ) $ ( 15,545 ) Foreign currency translation adjustment 1,557 ( 2,445 ) Change in defined benefit pension obligation 828 ( 2,199 ) Comprehensive income (loss) $ 794 $ ( 20,189 ) (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. See Note 11. (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. See Note 11. (c) Includes cost of revenue from sales to the joint venture, an equity method investment, of $74,421 during the year ended June 30, 2025, and $59,853 during the year ended June 30, 2024. See Note 11. (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. 49 Table of Contents Accuray Incorporated Consolidated Statement of Stockholders ’ Equity (in thousands) Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity Balance at June 30, 2023 96,535 97 555,276 422 ( 502,136 ) 53,659 Issuance of common stock to employees 3,707 3 2,244 — — 2,247 Tax withholding upon vesting of restricted stock units ( 47 ) — ( 117 ) — — ( 117 ) Share-based compensation — — 9,484 — — 9,484 Net loss — — — — ( 15,545 ) ( 15,545 ) Cumulative translation adjustment — — — ( 2,445 ) — ( 2,445 ) Change in defined benefit pension obligation — — — ( 2,199 ) — ( 2,199 ) Balance at June 30, 2024 100,195 $ 100 $ 566,887 $ ( 4,222 ) $ ( 517,681 ) $ 45,084 Issuance of common stock to employees 3,612 4 1,623 — — 1,627 Tax withholding upon vesting of restricted stock units ( 45 ) — ( 90 ) — — ( 90 ) Share-based compensation — — 10,201 — — 10,201 Fair value of warrants issued with debt — — 12,822 — — 12,822 Stock issued to settle Convertible Notes 8,882 9 10,722 — — 10,731 Net loss — — — — ( 1,591 ) ( 1,591 ) Cumulative translation adjustment — — — 1,557 — 1,557 Change in defined benefit pension obligation — — — 828 — 828 Balance at June 30, 2025 112,644 $ 113 $ 602,165 $ ( 1,837 ) $ ( 519,272 ) $ 81,169 The accompanying notes are an integral part of these consolidated financial statements. 50 Table of Contents Accuray Incorporated Consolidated Statements of Cash Flows (in thousands) Years Ended June 30, 2025 2024 Cash flows from operating activities Net loss $ ( 1,591 ) $ ( 15,545 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 6,150 5,905 Share-based compensation 10,201 9,484 Amortization of debt financing costs and discount for warrants issued to lenders 1,439 955 Gain on extinguishment of debt ( 1,475 ) — Non-cash interest paid-in-kind 616 — Loss from change in fair value of warrant liability 499 — Recovery from credit losses ( 101 ) ( 479 ) Provision for write-down of inventories 2,216 6,022 Income from equity method investment ( 4,714 ) ( 1,838 ) Net deferred gross profit on sales to the JV 7,666 4,098 Provision for deferred income taxes 156 1,402 Changes in assets and liabilities: Accounts receivable 13,356 ( 15,826 ) Inventories ( 9,109 ) ( 3,998 ) Prepaid expenses and other assets ( 2,542 ) 6,116 Deferred cost of revenue ( 912 ) ( 275 ) Accounts payable ( 18,674 ) 17,365 Operating lease liabilities, net of operating lease right-of-use assets 620 321 Accrued liabilities ( 5,906 ) ( 16,506 ) Customer advances ( 2,440 ) ( 6,619 ) Deferred revenues 7,405 ( 2,486 ) Net cash provided by (used in) operating activities 2,860 ( 11,904 ) Cash flows from investing activities Purchases of property and equipment, net ( 4,272 ) ( 3,601 ) Capitalized costs for software to be sold ( 4,251 ) — Net cash used in investing activities ( 8,523 ) ( 3,601 ) Cash flows from financing activities Proceeds from the issuance of common stock to employees 1,627 2,247 Taxes paid related to net share settlement of equity awards ( 90 ) ( 117 ) Proceeds from Term Loan due 2030 150,000 — Debt financing costs ( 13,289 ) ( 81 ) Paydown of Prior Convertible Notes ( 68,500 ) — Paydown of Prior Term Loan Facility ( 64,000 ) ( 6,000 ) Borrowings under the Prior Revolving Credit Facility 27,000 5,000 Repayments under the Prior Revolving Credit Facility ( 37,000 ) ( 5,000 ) Net cash used in financing activities ( 4,252 ) ( 3,951 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,657 ( 1,354 ) Net decrease in cash, cash equivalents and restricted cash ( 8,258 ) ( 20,810 ) Cash, cash equivalents and restricted cash at beginning of period 70,392 91,202 Cash, cash equivalents and restricted cash at end of period $ 62,134 $ 70,392 The accompanying notes are an integral part of these consolidated financial statements. 51 Table of Contents Accuray Incorporated Consolidated Statements of Cash Flows (continued) (in thousands) Years Ended June 30, 2025 2024 Supplemental Disclosure of Cash Flow Information Cash paid for income taxes $ 3,870 $ 1,749 Cash paid for interest $ 9,737 $ 10,520 Supplemental non-cash disclosure: Fair value of stock issued to settle Convertible Notes $ 11,102 $ — Fair value of warrants issued with debt $ 21,105 $ — Unpaid purchase of property and equipment at end of year $ 888 $ 445 Unpaid capitalized software costs at end of year $ 258 $ — Transfers from inventory to property and equipment $ 3,709 $ 3,438 Transfer of inventory to other assets $ 1,218 $ — Transfer of lease liabilities to leasehold improvements $ 1,251 $ 2,593 Transfer of other assets to property and equipment $ 242 $ — Dividend receivable from joint venture $ 2,453 $ 2,460 The accompanying notes are an integral part of these consolidated financial statements. 52 Table of Contents Accuray Incorporated Notes to Consolidated Financial Statements Note 1. The Company and its Significant Accounting Policies The Company Accuray Incorporated (together with its subsidiaries, the “Company” or “Accuray”) designs, develops and sells advanced radiosurgery and radiation therapy systems for the treatment of tumors throughout the body. The Company is incorporated in Delaware and is headquartered in Madison, Wisconsin. The Company has primary offices in the United States, Switzerland, China, Hong Kong, and Japan, and conducts its business worldwide. Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Reclassifications Certain amounts in the notes to consolidated financial statements have been reclassified to conform to current year presentation. Such reclassifications had no impact on the Company’s consolidated financial statements. Risks and Uncertainties 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 high interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; 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; 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. 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. 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 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 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. 53 Table of Contents 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. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company. Actual results could differ materially from those estimates. Foreign Currency The Company’s international subsidiaries use their local currencies as their functional currencies. For those subsidiaries, assets and liabilities are translated at exchange rates in effect at the balance sheet date and income and expense accounts at the average exchange rate. Resulting translation adjustments are excluded from the determination of net income or loss and are recorded in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Net foreign currency exchange transaction gains or losses are included as a component of other expense, net, in the Company’s consolidated statements of operations and comprehensive income (loss). Cash, Cash Equivalents and Restricted Cash The Company considers currency on hand, demand deposits, time deposits, and all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. 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 for certificates 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 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. 54 Table of Contents Concentration of Credit Risk and Other Risks and Uncertainties The Company’s cash and cash equivalents are primarily deposited with several major financial institutions. At times, deposits in these institutions exceed the amount of insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant risk on these balances. The Company had 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 as 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. In most cases, if a supplier was unable to deliver these components, the Company believes that it would be able to find other sources for these components subject to any regulatory qualifications, if required. Accounts Receivable Accounts receivable consist of amounts billed and unbilled from customers and are recorded at the invoiced amount. The Company performs ongoing credit evaluations of its customers and maintains reserves for potential credit losses based upon the expected collectability of all accounts receivable. Accounts receivable are deemed past due in accordance with the contractual terms of the agreement. The Company writes off accounts receivable when they are determined to be uncollectible. Inventories Inventories are stated at the lower of cost (on a first‑in, first‑out basis) or net realizable value. Excess and obsolete inventories are written down based on historical sales and forecasted demand, as judged by management. Revenue Recognition The Company’s revenue consists of product revenue resulting from the sale of systems, system upgrades and service revenue. The Company accounts for a contract with a customer when there is a legally enforceable contract between the Company and its customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. The Company’s revenues are measured based on the consideration specified in the contract with each customer, net of any discounts and taxes collected from customers that are remitted to government authorities. The Company’s revenue is primarily derived from sales of CyberKnife and TomoTherapy platforms and services, which include post-contract customer support (“PCS”), installation services, training and other professional services. The majority of the Company's revenue arrangements consist of multiple performance obligations, which can include system, upgrades, installation, training, services, construction, and consumables. For bundled arrangements, the Company accounts 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 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. These discounts may pertain to all performance obligations in a specific contract or may be allocated to a specific performance obligation. The Company reviews payment terms extending beyond one year. 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. 55 Table of Contents The Company offers customers the opportunity to trade in their older systems for a discount off the purchase of a new system. The Company generally does not provide specific trade-in prices or upgrade rights at the time of purchase of the original system. Trade-in or upgrade transactions are based on the fair value of the products when sold and are separately negotiated, taking into consideration circumstances existing at the time the trade-in or upgrade is delivered. Accordingly, implied trade-ins and upgrades discounts are not considered separate performance obligations in system sales agreements. During fiscal years 2025 and 2024, no fair value has been assigned to any of the systems that were traded-in. The stand-alone selling price ("SSP") of performance obligations is determined based on observable prices at which the Company separately sells the products and services. If the SSP is not directly observable, then the Company estimates the SSP considering market conditions, entity-specific factors, and information about the customer or class of customer that is reasonably available. The contract consideration allocation is based on the SSP at contract inception and updated should a significant contract modification occur. The consideration (net of any discounts) is allocated among separate products and services in a bundle based on their relative SSPs. Contract modifications typically add additional goods or services or change pricing. For such modifications, the most recent SSP is used for reallocation to the remaining performance obligations. The Company recognizes revenue for certain performance obligations at the point in time when control is transferred, such as the delivery and right to use the products and upgrades occurs. Service revenue is recognized over the term of the service period as the customer benefits from the services throughout the service period. Revenue related to services that are not part of a service contract and performed on a time-and-materials basis are recognized when performed. Service contracts comprise a single stand-ready performance obligation satisfied over time as our customers simultaneously receive and consume benefits from the Company's performance. This performance obligation constitutes a series of services that are substantially the same and provided over time using the same measure of progress. Revenues derived from these arrangements are recognized over time using an output method based upon the passage of time as this provides a faithful depiction of the pattern of transfer of control. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer when the Company expects to generate future economic benefits from the related revenue-generating contracts. The Company capitalizes incremental contract acquisition costs, and amortizes such costs over a five year period, the period which the Company expects to benefit, based on historical service renewal rates, and expectations of future customer renewals. Most of the Company’s contract costs are associated with its internal sales force compensation program and a portion of its employee bonus program. The Company capitalizes and amortizes the incremental costs of obtaining a contract, primarily related to certain bonuses and sales commissions. The capitalized bonuses and sales commissions are amortized over a period of five years commencing upon the initial transfer of control of the system to the customer. The pattern of amortization is commensurate with the pattern of transfer of control of the performance obligations to the customer. The amortization of these contract assets is included in cost of sales, research and development, sales and marketing, and general and administrative expenses based on department headcount allocations in the consolidated statements of operations. The Company elected to use the practical expedient and expense as incurred commissions related to service renewals and upgrades because the amortization period is one year or less. The Company invoices its customers based on the billing schedules in its sales arrangements. Payment terms vary from 30 to 90 days, or longer, from the date of invoice. Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative standalone selling price of the related performance obligations satisfied, and the contractual billing terms. Deferred revenue for periods presented primarily relates to service contracts where the service fees are billed up-front, generally quarterly or annually, prior to services being performed. The associated deferred revenue is generally recognized over the term of the service period. The Company did not have any significant impairment losses on its contract assets for any period presented. Deferred Revenue and Customer Advances Deferred revenue represents the amount billed under an arrangement in excess of the amount of revenue recognized. 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. Deferred revenue includes deferred warranty expected to be recognized over the remaining warranty period for systems already installed. 56 Table of Contents Customer advances represent payments made by customers in advance of product shipment per the agreed upon contract terms. Property and Equipment Property and equipment are stated at cost and are depreciated using the straight‑line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated on a straight‑line basis over the remaining term of the lease or the estimated useful life of the asset, whichever is shorter. Machinery and equipment are depreciated over five years. Furniture and fixtures are depreciated over four years. Computer and office equipment and computer software are depreciated over three years. Repairs and maintenance costs, which are not considered improvements and do not extend the useful life of the property and equipment, are expensed as incurred. Software Capitalization Costs 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. Capitalized costs for internal use software are amortized on a straight-line basis over its estimated useful life, which is generally five years. Costs related to the preliminary project stage, post-implementation, training and maintenance are expensed as incurred. 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. Costs for the development of software the Company plans to sell is recorded in Other assets on the consolidated balance sheets. Impairment of Long ‑ Lived Assets The Company reviews long-lived assets, including intangible assets, equity method investment in the JV, property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable using pretax undiscounted cash flows. Impairment, if any, is measured as the amount by which the carrying value of a long-lived asset exceeds its fair value. Goodwill Goodwill is not amortized but is evaluated for impairment on an annual basis and when impairment indicators are present. The Company has assessed that it has one operating segment and one reporting unit, and the consolidated net assets, including existing goodwill and other intangible assets, are considered to be the carrying value of the reporting unit. The Company estimates the fair value of the reporting unit based on the Company’s closing stock price on the trading day closest to the annual review date multiplied by the outstanding shares on that date. If the carrying value of the reporting unit is in excess of its fair value, an impairment may exist, and the Company must perform the second step of the analysis, in which the estimated fair value of the goodwill is compared to its carrying value to determine the impairment charge, if any. If the estimated fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired and no further analysis is required. There was no impairment of goodwill identified in the fiscal years ended June 30, 2025 and 2024. Shipping and Handling The Company’s billings for shipping and handling for product shipments to customers are included in cost of products. Shipping and handling costs incurred for inventory purchases are capitalized in inventory and expensed in cost of products. 57 Table of Contents Research and Development Costs Costs related to research, design and development of products are charged to research and development expense as incurred. These costs include direct compensation, benefits, and other headcount related costs for research and development personnel, costs for materials used in research and development activities, costs for outside services, and allocated portions of facilities and other corporate costs. The Company has entered into research and clinical study arrangements with selected hospitals, cancer treatment centers, academic institutions and research institutions worldwide. These agreements support the Company’s internal research and development capabilities. Share ‑ Based Compensation The Company issues share‑based compensation awards to employees and directors in the form of stock options, restricted stock units (“RSUs”), performance units (“PSUs”) and employee stock purchase plan (“ESPP”) awards (collectively, “awards”). The exercise price of stock options granted is equal to the market value of the Company’s common stock on the date of grant. Share‑based compensation for stock options and ESPP awards are measured on the date of grant using a Black‑Scholes option pricing model. Share‑based compensation expense for RSUs and PSUs is measured based on the value of the Company’s common stock on the date of grant. The Company measures and recognizes compensation expense for all stock‑based awards based on the awards’ fair value. Share‑based compensation expense for stock options, RSUs, and the ESPP awards is recognized on a straight‑line basis over the service period of the award. Share-based compensation expense for PSUs is recognized on a straight-line basis over the period of time for the performance conditions to be satisfied and only for those awards expected to vest. Forfeitures are recorded as they occur. Warrants 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 The Company is involved in various lawsuits, claims and proceedings that arise in the ordinary course of business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company reviews these provisions quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. 58 Table of Contents Earnings Per Common Share 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. Dilutive potential common shares include outstanding share awards. Potentially dilutive shares of the Company’s common stock are excluded from the computation of diluted net loss per share for loss periods presented because including them would have been anti-dilutive. Dilutive earnings per share is the same as basic earnings per share for the periods in which the Company had a net loss because the inclusion of outstanding common stock would be anti-dilutive. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share attributable to stockholders is as follows (in thousands): Years Ended June 30, 2025 2024 Numerator: Net loss used to compute basic and diluted loss per share $ ( 1,591 ) $ ( 15,545 ) Denominator: Weighted average shares used to compute basic and diluted loss per share 102,768 98,272 Basic and dilutive net loss per share $ ( 0.02 ) $ ( 0.16 ) Anti-dilutive share-based awards, excluded 12,236 14,052 Anti-dilutive warrants 17,181 — 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 (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 were 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). Leases The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use assets, lease liabilities, current, and lease liabilities, long-term in the consolidated balance sheet. Right-of-use asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in the consolidated statements of operations. 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. The Company elected a practical expedient to account for lease and non-lease components together as a single lease component. 59 Table of Contents Equity Method Investment The Company has an equity investment in CNNC Accuray (Tianjin) Medical Technology Co. Ltd., the Company’s JV. The Company applies the equity method of accounting to its ownership interest in the JV as the Company has the ability to exercise significant influence over the JV but lacks controlling financial interest and is not the primary beneficiary. The Company's investment in the JV is measured at cost and adjusted for the Company’s share of the JV's income or loss, intra-entity profits, dividend distributions, currency translation adjustments, and impairments, if any. The Company recognizes its proportionate share of income or loss from the JV on a one -quarter lag due to the timing of the availability of the JV’s financial records. 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. The JV's equity method goodwill is not amortized but is evaluated for impairment on an annual basis and when impairment indicators are present. Our impairment analysis considers qualitative and quantitative factors that may have a significant impact on the JV's fair value. Qualitative factors include the investee's financial condition and business outlook, industry and sector performance, operational and financing cash flow activities, and other relevant factors affecting the JV. When indicators of impairment exist, we prepare quantitative assessments of the fair value of our non-marketable equity investments, which require judgment and the use of estimates, including discount rates, investee revenue and costs, and comparable market data, among others. Income Taxes The Company is required to estimate its income taxes in each of the tax jurisdictions in which it operates prior to the completion and filing of tax returns for such periods. This process involves estimating actual current tax expense together with assessing temporary differences in the treatment of items for tax purposes versus financial accounting purposes that may create net deferred tax assets and liabilities. The Company accounts for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax bases of the Company’s assets and liabilities and their financial statement reported amounts. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses, research and development credit carryforwards and other deferred tax assets. The Company records a valuation allowance to reduce its deferred tax assets to the amount the Company believes is more likely than not to be realized. Because of the uncertainty of the realization of the deferred tax assets, the Company has recorded a full valuation allowance against its domestic and certain foreign net deferred tax assets. The calculation of unrecognized tax benefits involves dealing with uncertainties in the application of complex global tax regulations. Management regularly assesses the Company’s tax positions in light of legislative, bilateral tax treaty, regulatory and judicial developments in the countries in which the Company does business. The Company anticipates there will be no material changes in uncertain tax positions in the next 12 months. Accumulated Other Comprehensive 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. The changes in foreign currency exchange rate translation and net changes related to the defined benefit pension plan are excluded from earnings and reported as a component of stockholders’ equity. The foreign currency translation adjustment results from those subsidiaries not using the United States dollar as their functional currency since the majority of their economic activities are denominated in their applicable local currency. Accordingly, all assets and liabilities related to these operations are translated at the current exchange rates at the end of each period, whereas revenues and expenses are translated at average exchange rates in effect during the period. The resulting cumulative translation adjustments are recorded directly to the accumulated other comprehensive loss account in stockholders’ equity. 60 Table of Contents 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 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 annual periods beginning after December 15, 2024, with early adoption permitted. The Company plans to adopt ASU 2023 - 09 on July 1, 2025. The ASU requires retrospective application to all prior periods presented in the financial statements. The Company is currently assessing the timing and impact of adopting the updated provisions. Note 2. Revenue Contract Balances The timing of revenue recognition, billings, and cash collections results in trade receivables, unbilled receivables, and deferred revenues on the consolidated balance sheets. The Company may offer longer or extended payment terms of more than one year for qualified customers in some circumstances. At times, revenue recognition occurs before the billing, resulting in an unbilled receivable, which represents a contract asset. The contract asset is a component of accounts receivable and other assets for the current and non-current portions, respectively. When the Company receives advances or deposits from customers before revenue is recognized, this results in a contract liability. It can take two or more years from the time of order to revenue recognition due to the Company’s long sales cycle. 61 Table of Contents Changes in the contract assets and contract liabilities are as follows (dollars in thousands): Change June 30, 2025 June 30, 2024 $ % Contract assets: Unbilled accounts receivable – current (1) $ 11,823 $ 19,131 ( 7,308 ) ( 38 ) Interest receivable – current (2) 284 305 ( 21 ) ( 7 ) Long-term accounts receivable (3) 3,777 2,859 918 32 Interest receivable – non-current (3) 172 432 ( 260 ) ( 60 ) Contract liabilities: Customer advances 12,197 13,988 ( 1,791 ) ( 13 ) Deferred revenue – current 82,306 71,649 10,657 15 Deferred revenue – non-current 26,566 24,114 2,452 10 ( 1 ) Included in accounts receivable on the consolidated balance sheets ( 2 ) Included in prepaid expenses and other current assets on the consolidated balance sheets ( 3 ) Included in other assets on the consolidated balance sheets During the year ended June 30, 2025, contract assets changed primarily due to changes in the timing of billings that occurred after revenues were recognized, and changes in transactions with payment terms exceeding 12 months. 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, 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 (as Restated) Remaining performance obligations represent the aggregate amount of transaction price allocated to performance obligations that are unsatisfied, or partially unsatisfied. Service contracts that are considered cancellable are generally considered 30 to 60 day contracts and are not included in the remaining performance obligations. As of June 30, 2025, total remaining performance obligations amounted t o $ 60.9 million. Of th is total amount, $ 46.4 million is rel ated to performance obligations for warranties, w hich is the estimated revenue expected to be recognized over t he warranty pe riod for systems that have been delivered (the time bands reflect management’s best estimate of the period when the Company will transfer control to the customer and may change based on timing of shipment, readiness of customers’ facilities for installation, installation requirements, and availability of products). The Company has elected the practical expedient to not disclose the unsatisfied performance obligations of contracts with an original expected duration of one year or less. The following table represents the Company's expected revenue recognition based on the remaining performance obligations for warranties as of June 30, 2025 ( in thousands): Fiscal years 2026 2027 2028 Thereafter Warranty $ 20,004 $ 16,781 $ 7,652 $ 1,943 62 Table of Contents The Company expects to recognize as revenue the significant majority of the additional $ 14.5 million of remaining  performance obligations, which are primarily related to deferred training and system installations as revenue over the next 12 months. The Company also has open system sales orders, upgrade sales orders and customer credits that are excluded from the above remaining performance obligation balances because they do not include substantive termination penalties at order execution and therefore do not meet the definition of a remaining performance obligation in accordance with ASC 6 06, Revenue from Contracts with Customers . The contract inception date in accordance with Step 1 of ASC 606 for these system and upgrade sales orders has been determined to be shortly before shipment of the system, when the customer becomes obligated to pay the non-refundable contract balance. Subsequent to the initial issuance of these financial statements, the Company identified errors within this footnote primarily due to the Company reevaluating its methodology for determining whether open system order, upgrade sales orders, and customer credits represent remaining performance obligations in accordance with ASC 606, Revenue from Contracts with Customers . Based on the level of customer deposits at the order inception relative to the total order value and the Company’s historical cancellation experience, the Company concluded that these balances do not include substantive termination penalties. As a result, such orders should be excluded from the Company’s remaining performance obligations. The Company corrected these errors for the year ended June 30, 2025, reducing the total remaining performance obligations from $ 818.2 million (as previously reported) to $ 60.9 million, reflecting the exclusion of $ 776.9 million of open system sales orders, $ 18.1 million of open upgrade orders, and $ 26.4 million of customer credits. The previously reported $ 64.1 million remaining performance obligations and system installations has been revised to $ 14.5 million and the previously reported $ 64.1 million of performance obligations for warranties has been revised to $ 46.4 million. Capitalized Contract Costs As of June 30, 2025, and 2024, the balance of capitalized costs to obtain a contract was $ 7.3 million and $ 9.6 million, respectively. 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, 2025 2024 Capitalized contract costs $ 852 $ 2,958 Amortization of capitalized contract costs 2,726 4,068 Impairment loss on capitalized contracts 421 128 Note 3. Supplemental Financial Information Consolidated Balance Sheets Financing receivables A financing receivable is a contractual right to receive money, on demand or on fixed or determinable dates, that is recognized as an asset on the Company’s balance sheets. The Company’s financing receivables, consisting of its accounts receivable with contractual maturities of more than one year, are included in other assets on the consolidated balance sheets. The Company evaluates the credit quality of a customer at contract inception and monitors credit quality over the term of the underlying transactions. The Company performs a credit analysis for all new orders and reviews payment history, current order backlog, financial performance of the customers and other variables that augment or mitigate the inherent credit risk of a particular transaction. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the contract term and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits. Actual cash collections may differ from the contracted maturities due to early customer buyouts, refinancing, or defaults. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near‑term risk of non‑payment. The Company performs an assessment each quarter on the allowance for credit losses related to its financing receivables. 63 Table of Contents A summary of the Company’s financing receivables is presented as follows (in thousands): June 30, 2025 June 30, 2024 Financing receivable $ 3,842 $ 2,871 Allowance for credit losses — — Total, net $ 3,842 $ 2,871 Reported as: Current $ 1,082 $ 1,340 Non-current 2,760 1,531 Total, net $ 3,842 $ 2,871 Inventories Inventories consisted of the following (in thousands): June 30, 2025 June 30, 2024 Raw materials $ 49,001 $ 57,699 Work-in-process 14,844 13,629 Finished goods 77,175 66,996 Total inventories $ 141,020 $ 138,324 The Company's inventories on the consolidated balance sheets are net of reserves. Prepaid and Other Current Assets Prepaid and other current assets consisted of the following (in thousands): June 30, 2025 June 30, 2024 Value added tax receivables $ 11,381 $ 4,026 Prepaid commissions 4,388 5,288 Capitalized contract costs 1,949 1,876 Income tax receivable 841 368 Debt financing costs 470 — Dividend receivable from JV 2,453 2,460 Other prepaid assets 5,560 5,018 Other current assets 6,459 3,970 Total prepaid and other current assets $ 33,501 $ 23,006 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). 64 Table of Contents Property and Equipment, net Property and equipment, net consisted of the following (in thousands): June 30, 2025 June 30, 2024 Machinery and equipment $ 49,147 $ 45,539 Leasehold improvements 32,491 30,994 Software 11,534 11,308 Computer and office equipment 6,797 6,347 Furniture and fixtures 1,959 1,719 Construction in progress 4,641 2,550 106,569 98,457 Less: Accumulated depreciation ( 77,911 ) ( 73,683 ) Total property and equipment, net $ 28,658 $ 24,774 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. Goodwill Activity related to goodwill consisted of the following (in thousands): As of June 30, 2025 2024 Balance at the beginning of the period $ 57,672 $ 57,681 Currency translation adjustment 130 ( 9 ) Balance at the end of the period $ 57,802 $ 57,672 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 not 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 Other assets consisted of the following (in thousands): June 30, 2025 June 30, 2024 Capitalized software costs to be sold $ 10,252 $ 4,683 Capitalized contract costs 5,359 7,768 Long-term accounts receivable 3,777 2,859 Purchased intangible assets, net 15 59 Deferred tax asset 756 659 Debt financing costs 669 — Other long-term assets 3,615 1,981 Total other assets $ 24,443 $ 18,009 65 Table of Contents 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 not 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 Other accrued liabilities consisted of the following (in thousands): June 30, 2025 June 30, 2024 Value added tax liabilities $ 12,408 $ 5,048 Commissions due to third parties 573 5,202 Refunds due to customers 3,581 6,079 Accrued royalties 3,082 2,939 Accrued consulting 1,648 1,238 Interest payable 967 485 Income tax payable 973 1,206 Other liabilities 6,129 6,311 Total other accrued liabilities $ 29,361 $ 28,508 Consolidated Statements of Operations Interest expense consisted of the following (in thousands) Years Ended June 30, 2025 2024 Contractual interest coupon $ ( 10,221 ) $ ( 10,552 ) Accrued paid-in-kind interest ( 616 ) - Amortization for financing costs and discount for warrants issued to lenders ( 1,439 ) ( 956 ) Other ( 678 ) ( 116 ) Total interest expense $ ( 12,954 ) $ ( 11,624 ) Other income (expense), net, consisted of the following (in thousands): Years Ended June 30, 2025 2024 Interest income $ 1,192 $ 1,231 Foreign currency exchange gain (loss) 1,573 ( 2,046 ) Costs for foreign currency forward contracts ( 2,376 ) ( 1,811 ) Other, net 170 88 Total other income (expense), net $ 559 $ ( 2,538 ) Note 4. Leases 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 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. 66 Table of Contents The following table provides information related to the Company’s operating leases (in thousands): Years Ended June 30, 2025 2024 Operating lease costs (1) $ 8,980 $ 9,146 Short-term operating lease costs 286 305 Cash paid for amounts included in the measurement of lease liabilities 8,011 9,013 ( 1 ) Excludes expenses related to short-term lease operating costs. Operating lease right-of-use assets and operating lease obligations are represented in the table below (in thousands): June 30, 2025 June 30, 2024 Beginning balance operating lease right-of-use assets $ 33,773 $ 25,853 Lease assets added 4,624 14,389 Amortization for the year ( 5,282 ) ( 6,469 ) Ending balance operating lease right-of-use assets $ 33,115 $ 33,773 Beginning balance operating lease obligations $ 38,591 $ 27,753 Lease liabilities added 5,726 16,775 Repayment and interest accretion ( 4,460 ) ( 5,937 ) Ending balance operating lease obligations $ 39,857 $ 38,591 Current portion of operating lease obligations $ 7,375 $ 6,218 Noncurrent portion of operating lease obligations $ 32,482 $ 32,373 The weighted-average remaining lease term and weighted-average discount rate for operating leases were as follows: June 30, 2025 June 30, 2024 Weighted average remaining lease term (in years) 7.8 8.2 Weighted average discount rate 10.4 % 10.4 % Maturities of operating lease liabilities as of June 30, 2025, are presented in the table below (in thousands): Year Ending June 30, Amount 2026 $ 7,201 2027 8,257 2028 7,135 2029 5,515 2030 4,789 Thereafter 24,948 Total operating lease payments 57,845 Less: imputed interest ( 17,988 ) Present value of operating lease liabilities $ 39,857 67 Table of Contents Table of Contents Note 5. Derivative Financial Instruments The Company utilizes foreign currency forward contracts with reputable financial institutions to manage its exposure of fluctuations in foreign currency exchange rates on certain intercompany balances and foreign currency denominated cash, customer receivables and liabilities. The Company does not use derivative financial instruments for speculative or trading purposes. These forward contracts are not designated as hedging instruments for accounting purposes. 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. The Company intends to exchange foreign currencies for U.S. Dollars at maturity. The Company enters into forward currency exchange contracts to hedge its overseas operating expenses and other liabilities when deemed appropriate. The notional amount of the Company's outstanding forward currency exchange contracts consisted of the following (in thousands): As of June 30, 2025 2024 Swiss Franc $ 7,438 $ 59,392 Japanese Yen 8,700 7,762 Euro 11,431 2,755 Indian Rupee 7,485 8,916 Chinese Yuan 5,491 5,156 Korean Won 1,306 1,735 Canadian Dollar — 1,510 British Pound 1,617 730 Total outstanding forward currency exchange contracts $ 43,468 $ 87,956 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): Years ended June 30, 2025 2024 Foreign currency exchange gain (loss) on forward contracts $ 655 $ ( 613 ) Note 6. Fair Value Measurements Fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels of inputs that may be used to measure fair value, as follows: Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: ● Quoted prices for similar assets or liabilities in active markets; ● Quoted prices for identical or similar assets in non-active markets; ● Inputs other than quoted prices that are observable for the asset or liability; and ● Inputs that are derived principally from or corroborated by other observable market data. 68 Table of Contents Level 3 — Unobservable inputs that cannot be corroborated by observable market data and require the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. 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: Years Ended 2025 2024 Balance at the beginning of the period $ — $ — Issuance of Penny warrants on June 6, 2025 7,998 — Change in fair value 499 — Balance at the end of the period $ 8,497 $ — 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, 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. 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 Company’s convertible debt is measured on a recurring basis using Level 2 based upon observable inputs. 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 Carrying Value Fair Value Carrying Value Fair Value 3.75% Convertible Notes due June 1, 2026 $ 17,893 $ 17,322 $ 98,782 $ 85,762 Term Loan Facilities due 2030 118,627 118,627 — — Prior Term Loan Facility — — 63,374 63,374 Prior Revolving Credit Facility — — 10,000 10,000 Total $ 136,520 $ 135,949 $ 172,156 $ 159,136 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. 69 Table of Contents 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. Note 7. Debt The Company's outstanding debt as of June 30, 2025 and June 30, 2024 is as follows (in thousands): As of June 30, 2025 2024 Term Loan Facilities due 2030 $ 150,000 $ — Convertible Senior Notes due June 1, 2026 18,000 100,000 Prior Term Loan Facility - 64,000 Prior Revolving Credit Facility - 10,000 Total debt 168,000 174,000 Paid-in-kind interest 616 - Unamortized debt financing costs ( 11,101 ) ( 1,844 ) Unamortized discount for warrants issued to lenders ( 20,995 ) - Total debt, net 136,520 172,156 Reported as: Short-term debt, net $ 12,734 $ 7,756 Long-term debt, net 123,786 164,400 Total debt, net $ 136,520 $ 172,156 A summary of interest expense on the Company’s outstanding debt is as follows (in thousands): Year ended June 30, 2025 2024 Contractual interest coupon $ 10,221 $ 10,552 Accrued paid-in-kind interest 616 - Amortization of debt financing costs and discount for warrants issued to lenders 1,439 956 Total interest expense on debt $ 12,276 $ 11,508 A summary of weighted average effective interest rate on the Company’s debt is as follows: Year ended June 30, 2025 2024 Term Loan Facility due 2030 22.0 % — Convertible Senior Notes due June 1, 2026 4.3 % 4.3 % Prior Term Loan Facility 8.6 % 8.6 % Prior Revolving Credit Facility 9.1 % 9.5 % 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. 70 Table of Contents 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. 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”) 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. 71 Table of Contents The Company paid $ 13.1 million in debt financing 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. (See Note 9. 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 holders 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. 72 Table of Contents Table of Contents Note 8. Commitments and Contingencies 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, Long-Term Debt (1) 2026 $ 33,943 2027 21,787 2028 21,650 2029 21,403 2030 172,186 Total $ 270,969 ( 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 Convertible Notes that would impact cash payments is noted in the preceding table. Purchase Commitments The Company’s purchase commitments and obligations include all open purchase orders and contractual obligations in the ordinary course of business, including commitments with contract manufacturers and suppliers, for which the Company has not received the goods or services and acquisition and licensing of intellectual property. A majority of these purchase obligations are due within a year. Although open purchase orders are considered enforceable and legally binding, the terms generally allows the Company the option to cancel, reschedule, and adjust its requirements based on the Company’s business needs prior to the delivery of goods or performance of services, and hence, these purchase orders have not been included in the table above. Indemnities and Commitments The Company enters into standard indemnification agreements with its landlords and all superior mortgages and their respective directors, officers’ agents, and employees in the ordinary course of business. Pursuant to these agreements, the Company will indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the landlords, in connection with any loss, accident, injury, or damage by any third‑party with respect to the leased facilities. The term of these indemnification agreements is from the commencement of the lease agreements until termination of the lease agreements. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, historically, the Company has not incurred claims or costs to defend lawsuits or settle claims related to these indemnification agreements. The Company has not recorded any liability associated with its indemnification agreements as it is not aware of any pending or threatened actions that represent probable losses as of June 30, 2025. Guarantees As of June 30, 2025 and June 30, 2024, the Company had various bank guarantees totaling approximately $ 1.5 million and $ 1.1 million, respectively, primarily related to a bidding process with customers. 73 Table of Contents Royalty Agreements The Company enters into software license agreements with third parties that may require royalty payments for each license used. 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, 2025 2024 Royalty expense $ 1,716 $ 1,913 Royalty payments 1,573 1,371 Software License Indemnity Under the terms of the Company’s agreements with its customers, the Company agrees that in the event the certain Company software sold under such agreement infringes upon any patent, copyright, trademark, or any other proprietary right of a third‑party, it will indemnify its customer licensees against any loss, expense, or liability from any damages that may be awarded against its customer. The Company includes this infringement indemnification in its agreements with customers where Company software is licensed. In the event the customer cannot use the software or service due to infringement and the Company cannot obtain the right to use, replace or modify the license in a commercially feasible manner so that it no longer infringes, then the Company may terminate the license and provide the customer a refund of the fees paid by the customer for the infringing license or service. The Company has not recorded any liability associated with this indemnification, as it is not aware of any pending or threatened actions that represent probable losses as of June 30, 2025. Litigation From time to time, the Company is involved in legal proceedings, including claims, investigations, and inquiries, arising in the ordinary course of its business. The Company records a provision for a loss when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. To the extent that there is a reasonable possibility that a loss exceeding amounts already recognized may be incurred and the amount of such additional loss would be material, we will either disclose the estimated additional loss or state that such an estimate cannot be made. Currently, management believes the Company does not have any probable and reasonably estimable material losses related to any current legal proceedings and claims. Although occasional adverse decisions or settlements may occur, management does not believe that an adverse determination with respect to any of these claims would individually, or in the aggregate, materially and adversely affect the Company’s financial condition or operating results. Litigation is inherently unpredictable and is subject to significant uncertainties, some of which are beyond the Company’s control. 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. Note 9. Stockholders ’ Equity Common Stock 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. 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 Warrants. We agreed to issue the Warrants in connection with, and to induce the lenders to enter into, the Financing Agreement. 74 Table of Contents 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. Treasury 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 Defined Pension Benefit Obligation Total Balance at June 30, 2023 $ ( 2,332 ) $ 2,754 $ 422 Other comprehensive loss ( 2,445 ) ( 2,199 ) ( 4,644 ) Balance at June 30, 2024 $ ( 4,777 ) $ 555 $ ( 4,222 ) Other comprehensive loss 1,557 828 2,385 Balance at June 30, 2025 $ ( 3,220 ) $ 1,383 $ ( 1,837 ) Note 10. Stock Incentive Plan and Employee Stock Purchase Plan As of June 30, 2025, the Company had two outstanding stock incentive plans: the 2016 Equity Incentive Plan ( “2016 Plan”) and the 2007 Incentive Award Plan ( “2007 Plan”). The 2016 Plan permits the granting of stock options, stock appreciation rights, restricted stock awards, performance shares, performance units, and RSUs. The vesting of RSUs granted under the 2016 Plan are primarily service‑based (over the requisite service period) while the vesting of performance units granted under the 2016 Plan consist of PSUs. Only employees of the Company are eligible to receive incentive stock options. Non‑employees may be granted non‑qualified stock options. 75 Table of Contents Stock options granted under the 2016 Plan have an exercise price of at least 100% of the fair market value of the underlying stock on the grant date. The stock options have 10 -year contractual terms and generally become exercisable for 25 % of the option shares one year from the date of grant and then ratably over the following 36 months. Service‑based RSUs granted generally vest 25 % of the share units covered by the grant on each of the first through fourth anniversaries of the date of the grant, subject to the continued service of the grantee through each such date. RSUs granted to the Board of Directors vest over one year. 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. As of June 30, 2025, the 2007 Plan continued to remain in effect; however, the Company can no longer grant equity awards under such plans. The following table summarizes the share‑based compensation charges included in the Company’s consolidated statements of operations and comprehensive loss (in thousands): Years ended June 30, 2025 2024 Cost of revenue - product $ 634 $ 866 Cost of revenue - service 709 509 Research and development 1,508 1,456 Selling and marketing 2,167 1,905 General and administrative 5,183 4,748 Total $ 10,201 $ 9,484 The following table summarizes the share‑based compensation charges for the Company’s equity awards (in thousands): Years ended June 30, 2025 2024 Stock options $ 344 $ 741 Restricted stock units 7,948 7,307 Performance stock units 1,166 386 Employee stock purchase plan 743 1,050 Total $ 10,201 $ 9,484 Stock Options 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. The expected volatility is derived from the Company’s historical stock volatility over a period approximately equal to the expected term of the options. The risk‑free interest rate is based on the U.S. Treasury constant maturity rate on the date of grant. The dividend yield assumption is based on the Company’s history and expectation of no dividend payouts. 76 Table of Contents A summary of option activity under the Company’s incentive plan is presented below (in thousands except per share and term amounts): Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value (1) Balance at June 30, 2024 5,270 $ 3.40 2.95 $ — Options granted — — Options exercised — — Options forfeited/expired ( 3,431 ) $ 3.59 Balance at June 30, 2025 1,839 $ 3.03 5.62 $ — Vested or expected to vest at June 30, 2025 1,839 $ 3.03 5.62 $ — Exercisable at June 30, 2025 1,662 $ 3.13 5.48 $ — 1. 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 $ 1.37 and $ 1.82 on June 30, 2025 and June 30, 2024, 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 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. 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 was zero for the years ended June 30, 2025, and 2024. As of June 30, 2025, there was $ 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): Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Outstanding Weighted Average Exercise Price $1.96 – $1.96 200 7.00 $ 1.96 150 $ 1.96 $2.08 – $2.08 556 6.92 $ 2.08 429 $ 2.08 $2.60 – $2.60 397 4.34 $ 2.60 397 $ 2.60 $4.10 – $4.46 553 4.64 $ 4.32 553 $ 4.32 $4.52 – $4.52 133 6.00 $ 4.52 133 $ 4.52 Total outstanding 1,839 5.62 $ 3.03 1,662 $ 3.13 77 Table of Contents Restricted Stock and Performance Stock The following table summarizes the activity of RSUs and PSUs (in thousands, except fair value per share): Unvested Restricted Stock Restricted Stock Units Performance Stock Units Total Number of Shares Underlying Stock Awards Weighted Average Grant Date Fair Value Per Share Unvested at June 30, 2024 5,969 2,813 8,782 $ 2.66 Granted 4,343 1,235 5,578 $ 2.13 Vested ( 2,752 ) — ( 2,752 ) $ 2.68 Cancelled/forfeited ( 394 ) ( 817 ) ( 1,211 ) $ 3.39 Unvested at June 30, 2025 7,166 3,231 10,397 $ 2.29 Restricted Stock Units The grant date fair value of the RSUs granted was $ 9.2 million and $ 9.7 million 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 period of 1.4 years. Performance Stock Units The grant date fair value of PSUs granted was $ 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, was $ 0.4 million. 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 Under the Company’s Amended and Restated 2007 Employee Stock Purchase Plan, or ESPP, qualified employees are permitted to purchase the Company’s common stock at 85 % of the lower of the fair market value of the common stock on the commencement date of each six month offering period, or the fair market value on the specified purchase date. Employees’ payroll deductions may not exceed 10% of their salaries. Employees may purchase up to 2,500 shares per each six month offering period, provided that the value of the shares purchased in any calendar year may not exceed $ 25,000 , as calculated pursuant to the purchase plan. The Company estimates the fair value of ESPP shares at the date of grant using the Black‑Scholes option pricing model. The weighted average assumptions were as follows: Years Ended June 30, 2025 2024 Risk–free interest rate 4.12 % - 4.43 % 5.05 % - 5.39 % Dividend yield —% —% Expected term 0.5 - 1.0 0.5 - 1.0 Expected volatility 44.02 % - 83.32 % 37.22 % - 61.48 % The risk‑free rate for the expected term of the ESPP option was based on the U.S. Treasury constant maturity rate for each offering period; expected volatility was based on the historical volatility of the Company’s common stock; and the expected term was based upon the offering period of the ESPP. 78 Table of Contents 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 of $ 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 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. Note 11. Joint Venture In January 2019, the Company’s wholly-owned subsidiary, Accuray Asia Limited (“Accuray Asia”), entered into an agreement with CNNC High Energy Equipment (Tianjin) Co., Ltd. (the “CIRC Subsidiary”), a wholly-owned subsidiary of China Isotope & Radiation Corporation, to form a joint venture, CNNC Accuray (Tianjin) Medical Technology Co. Ltd. (the “JV”), to manufacture and sell radiation oncology systems in China. As of June 30, 2025, the Company owned a 49 % interest in the JV, which is reported as an investment in joint venture on the Company’s consolidated balance sheets. The Company applies the equity method of accounting to its ownership interest in the JV as the Company has the ability to exercise significant influence over the JV but lacks controlling financial interest and is not the primary beneficiary. The Company recognizes the 49 % proportionate share of the JV income or loss on a one -quarter lag due to the timing of the availability of the JV’s financial records. 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. 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. 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): June 30, 2025 June 30, 2024 Carrying value of investment in joint venture $ 4,612 $ 9,826 Deferred intra-entity profit margin 17,501 9,835 Dividend declared 2,453 - Equity method goodwill ( 4,720 ) ( 4,720 ) Proportional share of equity investment in joint venture $ 19,846 $ 14,941 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 was 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 impairment was identified as of June 30, 2025 and June 30, 2024. 79 Table of Contents Summarized financial information of the JV is as follows (in thousands): Statement of Operations Data: Twelve Months Ended March 31, 2025 Twelve Months Ended March 31, 2024 Revenue $ 160,213 $ 114,942 Gross profit $ 29,438 $ 22,137 Net income $ 9,617 $ 3,750 Net income attributable to the Company $ 4,714 $ 1,838 Summarized Balance Sheet Data: As of March 31, 2025 As of March 31, 2024 Assets Current assets $ 172,109 $ 102,500 Non current assets 16,426 12,425 Total assets $ 188,535 $ 114,925 Liabilities and Stockholders' Equity Current liabilities $ 146,587 $ 79,300 Non current liabilities 1,334 113 Stockholder's equity 40,614 35,512 Total liabilities and stockholders' equity $ 188,535 $ 114,925 The following table shows the activity of the Company’s deferred intra-entity profit margin from sales to the JV (in thousands): Years Ended June 30, 2025 2024 Deferred gross profit recognized on sales to the JV $ ( 16,738 ) $ ( 9,061 ) Deferred gross profit on sales to the JV 24,404 13,159 Net deferred gross profit on sales to the JV (1) $ 7,666 $ 4,098 ( 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. Note 12. Income Taxes 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, 2025 2024 Domestic $ ( 12,908 ) $ ( 25,184 ) Foreign 14,042 13,364 Total income (loss) before provision for income taxes $ 1,134 $ ( 11,820 ) 80 Table of Contents The provision for income taxes consisted of the following (in thousands): Years Ended June 30, 2025 2024 Current: Federal $ — $ — State 4 133 Foreign 2,565 2,190 Total current $ 2,569 $ 2,323 Deferred: Federal — — State — — Foreign 156 1,402 Total deferred 156 1,402 Total provision for income taxes $ 2,725 $ 3,725 A reconciliation of income taxes at the statutory federal income tax rate to the provision for income taxes included in the accompanying consolidated statements of operations and comprehensive loss is as follows (in thousands): Years Ended June 30, 2025 2024 U.S. federal taxes (benefit): At federal statutory rate $ 238 $ ( 2,482 ) State tax, net of federal benefit 4 133 Share-based compensation expense 1,028 629 Research and development credits ( 14 ) ( 209 ) Foreign taxes 203 219 Deferred tax on foreign earnings 558 952 Global intangible low-taxed income 1,471 1,335 Equity in earnings of unconsolidated affiliates ( 990 ) ( 386 ) Chane in valuation of warrants 105 — Change in valuation allowance ( 113 ) 3,202 Other non-deductible permanent items 235 332 Total provision for income taxes $ 2,725 $ 3,725 81 Table of Contents Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred tax assets (liabilities) were as follows (in thousands): June 30, 2025 2024 Deferred tax assets: Federal and state net operating losses $ 61,745 $ 66,463 Accrued expenses and reserves 3,128 4,523 Lease liability 6,475 6,332 Deferred revenue 3,681 3,269 Research and development credits 26,678 26,669 Share-based compensation expense 1,416 1,405 Capitalized research and development 23,795 19,464 Unicap 527 541 Fixed assets and intangibles 250 644 Section 163(j) interest 3,244 2,776 Other 374 6 Total deferred tax assets 131,313 132,092 Deferred tax liabilities: Contract acquisition costs ( 857 ) ( 1,228 ) Right of use assets ( 5,124 ) ( 5,288 ) Deferred tax on foreign earnings ( 2,120 ) ( 2,499 ) Total deferred tax liabilities ( 8,101 ) ( 9,015 ) Valuation allowance ( 125,287 ) ( 125,944 ) Net deferred tax liabilities $ ( 2,075 ) $ ( 2,867 ) As of June 30, 2025, the Company had $ 260.9 million and $ 119.9 million in federal and state net operating loss carryforwards, respectively. 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, 2025, the Company had federal and state research and development tax credits of $ 28.5 million and $ 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. Under the Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of our net operating loss and research tax credit carryforwards to offset taxable income may be limited based on cumulative changes in ownership. Although ownership changes have occurred in the prior years, the carryovers should be available for utilization by the Company before they expire, provided the Company generates sufficient future taxable income. An analysis of the impact of this provision through March 31, 2022 has been performed and it was determined that no ownership change has occurred after December 2009. Based on the available objective evidence and history of losses, the Company has established a 100% valuation allowance against its combined domestic net deferred tax assets because of uncertainty surrounding the realization of such deferred tax assets. 82 Table of Contents Certain income earned by controlled foreign corporations (“CFCs”) must be included currently in the gross income of the CFCs United States shareholder. The income required to be included in gross income is referred to as global intangible low tax income (“GILTI”) and is defined under IRC Section 951A as the excess of the shareholder’s net CFC tested income over the net deemed tangible income return. The GILTI inclusion amount has been absorbed by net operating loss carryforwards. The Company has made a policy decision to record GILTI tax as a current-period expense when incurred. One of the provisions under the Tax Cuts and Jobs Act that became effective in tax years beginning after December 31, 2021 required the capitalization and amortization of research and experimental expenditures. The change in this United States tax law did not have an impact on the Company's consolidated financial statements. The Company will continue to evaluate the impact of this tax law change on future periods. 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. The aggregate changes in the balance of gross unrecognized tax benefits were as follows (in thousands): Years Ended June 30, 2025 2024 Balance at beginning of year $ 22,044 $ 21,565 Tax positions related to current year: Additions 1,165 1,064 Tax positions related to prior years: Additions — — Reductions ( 560 ) ( 585 ) Balance at end of year $ 22,649 $ 22,044 The calculation of unrecognized tax benefits involves dealing with uncertainties in the application of complex global tax regulations. Management regularly assesses the Company’s tax positions with respect to legislative, bilateral tax treaty, regulatory and judicial developments in the countries in which the Company does business. The reduction in prior year's tax positions primarily relates to lapses of applicable statutes of limitations. The Company anticipates there will be no material changes in uncertain tax positions in the next 12 months. As of June 30, 2025, the amount of gross unrecognized tax benefits was $ 22.6 million, of which $ 21.8 million would 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. As of June 30, 2025 and 2024, the Company’s cumulative accrued interest and penalties related to uncertain tax positions, was not material. The Company files income tax returns in the United States federal, various states, and foreign jurisdictions. Due to tax attributes being carried forward and utilized during open years, the statute of limitations remains open for the U.S. federal jurisdiction and domestic states for tax years from 2006 and forward. The statutes of limitation with respect to the foreign jurisdictions where the Company files income tax returns vary from jurisdiction to jurisdiction and range from 3 to 10 years and the material foreign jurisdictions are France, Switzerland and Japan. 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 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. 83 Table of Contents Note 13. Retirement Plans Employee Benefit Plan The Company’s employee savings and retirement plan is qualified under Section 401 (k) of the United States Internal Revenue Code. Employees may make voluntary, tax‑deferred contributions to the 401 (k) Plan up to the statutorily prescribed annual limit. 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 contributed $ 2.2 million and $ 2.1 million to the 401 (k) Plan during the years ended June 30, 2025 and 2024, respectively. Defined Benefit Pension Obligation The Company has established a defined benefit pension plan for its employees in its Switzerland subsidiary. The plan provides benefits to employees upon retirement, death or disability. The Company uses June 30 as the year‑end measurement date for this plan. Obligations and Funded Status The following table presents the funded status of the defined benefit pension plan (in thousands): June 30, 2025 2024 Change in benefit obligation: Benefit obligation—beginning of fiscal year $ 24,059 $ 19,388 Service cost 1,553 1,245 Interest cost 322 381 Plan participants’ contributions 1,806 3,548 Actuarial loss 1,493 2,236 Foreign currency changes 3,275 ( 124 ) Settlements — ( 2,434 ) Amendments ( 131 ) — Benefit and expense payments ( 1,436 ) ( 181 ) Benefit obligation—end of fiscal year $ 30,941 $ 24,059 Change in plan assets: Plan assets—beginning of fiscal year $ 21,329 $ 18,761 Employer contributions 1,353 1,265 Actual return on plan assets 2,502 467 Plan participants’ contributions 1,806 3,548 Foreign currency changes 2,996 ( 97 ) Settlements — ( 2,434 ) Benefit and expense payments ( 1,437 ) ( 181 ) Plan assets—end of fiscal year $ 28,549 $ 21,329 Funded status $ ( 2,392 ) $ ( 2,730 ) Amounts recognized within the consolidated balance sheets: Long-term other liabilities $ ( 2,392 ) $ ( 2,730 ) Net amount recognized $ ( 2,392 ) $ ( 2,730 ) 84 Table of Contents The following table presents the amounts recognized in accumulated other comprehensive loss (before tax) for the defined benefit pension plan (in thousands): June 30, 2025 2024 Net actuarial gain $ 1,128 $ 428 Prior service credit 254 127 Total gain recognized in accumulated other comprehensive loss $ 1,382 $ 555 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): June 30, 2025 2024 Projected benefit obligation $ 30,941 $ 24,059 Accumulated benefit obligation $ 22,747 $ 20,946 Fair value of plan assets $ 28,549 $ 21,329 Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Loss The following table shows the components of the Company’s net periodic benefit costs and the other amounts recognized in other comprehensive loss, before tax, related to the Company’s defined benefit pension plan (in thousands): Year ended June 30, 2025 2024 Net Periodic Benefit Costs: Service cost $ 1,553 $ 1,245 Interest cost 322 381 Expected returns on assets ( 330 ) ( 284 ) Amortization of prior service credit ( 24 ) ( 24 ) Amortization of net gain — ( 92 ) Gain on settlement — ( 65 ) Net periodic benefit costs 1,521 1,161 Other Amounts Recognized in Other Comprehensive Loss: Net (gain) loss arising during the year ( 715 ) 2,019 Prior service credit 26 24 Amortization of prior service credit ( 139 ) — Amortization of net gain — 91 Effect of settlement — 65 Total (gain) loss recognized in other comprehensive loss ( 828 ) 2,199 Total recognized in net periodic benefit costs and other comprehensive loss $ 693 $ 3,360 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): 2026 Net loss $ — Prior service cost 32 Accumulated other comprehensive income $ 32 85 Table of Contents Assumptions The assumptions used to determine net periodic benefit cost and to compute the expected long‑term return on assets for the Company’s defined benefit pension plan were as follows: Fiscal Years 2025 2024 Net Periodic Benefit Costs: Discount rate 1.20 % 1.30 % Rate of compensation increase 1.75 % 1.75 % Expected long-term return on assets 1.50 % 1.50 % The assumptions used to measure the benefit obligation for the Company’s defined benefit pension plan were as follows: June 30, 2025 2024 Benefit Obligation: Discount rate 1.20 % 1.30 % Rate of compensation increase 1.75 % 1.75 % Contributions and Future Benefit Payments The Company made contributions of approximately $ 1.4 million and $ 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 approximately $ 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): Year Ending June 30, Future Benefits 2026 $ 1,745 2027 1,530 2028 1,580 2029 1,648 2030 2,564 Thereafter 10,841 Total estimated future benefit payments $ 19,908 Plan Assets The plan assets are invested in insurance contracts with Copré Collective Foundation based in Lausanne, Switzerland at the end of fiscal years 2025 and 2024. In fiscal 2025 and 2024, the risks of death and disability are reinsured with Zurich Life Insurance. The Copré Foundation for Occupational Benefits (“Copré Foundation”) defines and is responsible for the asset strategy and invests the plan assets for the Company. The Copré Foundation invests the plan assets in insurance contracts which can be measured at Level 2 in the fair value hierarchy. In fiscal 2025 and 2024, the expected interest rate for mandatory retirement savings was 1.5 % and 1.5 %, respectively. The technical administration and management of the savings account are guaranteed by the Copré Foundation. Insurance benefits due are paid directly to the entitled persons by the Copré Foundation. Accuray International Sàrl has committed itself to pay the annual contributions and costs due under the pension fund regulations. 86 Table of Contents The contract of affiliation between the Company and the Copré Collective Foundation can be terminated by either side. In the event of a termination, recipients of retirement and survivors’ benefits would remain with the collective foundation. The Company commits itself to transfer its active insured members and recipients of disability benefits to the new employee benefits institution, thus releasing the Copré Collective Foundation from all obligations. Note 14. Segment Disclosure 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 (“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. Therefore, the information below is presented only for revenues and long‑lived tangible assets by geographic areas. Disaggregation of Revenues 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 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 (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 net revenue by geographic region (in thousands): Years ended June 30, 2025 2024 Americas $ 88,768 $ 90,156 EIMEA 144,264 168,611 China 124,475 103,412 Japan 53,622 55,682 Asia Pacific 47,376 28,690 Total net revenues $ 458,505 $ 446,551 The following summarizes countries that represent more than ten percent of the Company’s net revenues (in thousands): Years ended June 30, 2025 2024 United States 16 % 18 % China 27 % 23 % Japan 12 % 12 % Rest of world 45 % 47 % Total net revenues 100 % 100 % 87 Table of Contents Disaggregation of long-lived assets 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): June 30, 2025 June 30, 2024 Americas $ 49,466 $ 46,570 EIMEA 9,220 9,327 China 1,577 1,211 Japan 999 1,304 Asia Pacific 511 135 Total long-lived assets $ 61,773 $ 58,547 The long-lived assets in the Americas region are located in the United States as of June 30, 2025, and June 30, 2024. Note 15. Restatement of Quarterly Financial Information (Unaudited) As disclosed in Note 2. Revenue , subsequent to the initial issuance of the financial statements, the Company reevaluated its methodology for determining whether open system orders, upgrade orders and customer credits represent remaining performance obligations in accordance with ASC 606, Revenue from Contracts with Customers and determined that there were errors in its disclosure of RPOs during the quarterly periods ending March 31, 2025, December 31, 2024, and September 30, 2024 ( collectively, the “Errors”). Accordingly, the Company has restated its RPO disclosures included in Note 2. Revenue in its unaudited quarterly financial statements for quarterly periods as described below: For the period ended September 30, 2024 Remaining performance obligations represent the aggregate amount of transaction price allocated to performance obligations that are unsatisfied, or partially unsatisfied. Service contracts that are considered cancellable are generally considered 30 to 60 day contracts and are not included in the remaining performance obligations. As of September 30, 2024, total remaining performance obligations amounted to $ 58.8 million. Of this total amount, $ 41.8 million is related to performance obligations for warranties, which is the estimated revenue expected to be recognized over the warranty period for systems that have been delivered (the time bands reflect management’s best estimate of the period when the Company will transfer control to the customer and may change based on timing of shipment, readiness of customers’ facilities for installation, installation requirements, and availability of products). The Company has elected the practical expedient to not disclose the unsatisfied performance obligations of contracts with an original expected duration of one year or less. The following table represents the Company's expected revenue recognition based on the remaining performance obligations for warranties as of September 30, 2024 ( in thousands): Fiscal years 2025 2026 2027 Thereafter Warranty $ 14,738 $ 15,942 $ 8,529 $ 2,610 The Company expects to recognize as revenue the significant majority of the additional $ 17.0 million of remaining  performance obligations, which are primarily related to deferred training and system installations as revenue over the next 12 months. The Company also has open system sales orders, upgrade sales orders and customer credits that are excluded from the above remaining performance obligation balances primarily because they do not include substantive termination penalties at order execution and therefore do not meet the definition of a remaining performance obligation in accordance with ASC 6 06, Revenue from Contracts with Customers . The contract inception date in accordance with Step 1 of ASC 606 for these system and upgrade sales orders has been determined to be shortly before shipment of the system, when the customer becomes obligated to pay the non-refundable contract balance. 88 Table of Contents The Company corrected the Errors, reducing the total remaining performance obligations from $ 902.4 million (as previously reported) to $58.8 million, reflecting the exclusion of $ 791.9 million of open system sales orders and $ 21.0 million of upgrade sales orders, and $ 30.7 million of customer credits. The previously reported $ 840.2 million of remaining performance obligations related to open system sales, upgrades, training and other miscellaneous items has been revised to $ 17.0 million and the previously reported $ 62.2 million of performance obligations for warranties has been revised to $ 41.8 million. For the period ended December 31, 2024 Remaining performance obligations represent the aggregate amount of transaction price allocated to performance obligations that are unsatisfied, or partially unsatisfied. Service contracts that are considered cancellable are generally considered 30 to 60 day contracts and are not included in the remaining performance obligations. As of December 31, 2024, total remaining performance obligations amounted to $ 55.4 million. Of this total amount, $ 41.7 million is related to performance obligations for warranties, w hich is the estimated revenue expected to be recognized over th e warranty period for systems that have been delivered (the time bands reflect management’s best estimate of the period when the Company will transfer control to the customer and may change based on timing of shipment, readiness of customers’ facilities for installation, installation requirements, and availability of products). The Company has elected the practical expedient to not disclose the unsatisfied performance obligations of contracts with an original expected duration of one year or less. The following table represents the Company's expected revenue recognition based on the re maining performance obligations for warranties as of December 31, 2024 ( in thousands): Fiscal years 2025 2027 2028 Thereafter Warranty $ 9,691 $ 18,257 $ 11,106 $ 2,610 The Company expects to recognize as revenue the significant majority of the additional $ 13.8 million of remaining  performance obligations, which are primarily related to deferred training and system installations as revenue over the next 12 months. The Company also has open system sales orders, upgrade sales orders and customer credits that are excluded from the above remaining performance obligation balances primarily because they do not include substantive termination penalties at order execution and therefore do not meet the definition of a remaining performance obligation in accordance with ASC 6 06, Revenue from Contracts with Customers . The contract inception date in accordance with Step 1 of ASC 606 for these system and upgrade sales orders has been determined to be shortly before shipment of the system, when the customer becomes obligated to pay the non-refundable contract balance. The Company corrected the Errors, reducing the total remaining performance obligations from $ 886.7 million (as previously reported) to $ 55.4 million, reflecting the exclusion of $ 781.9 million of open system sales orders and $ 20.5 million of upgrade sales orders and $ 28.9 million of customer credits. The previously reported $ 826.4 million of remaining performance obligations related to open system sales, upgrades, training and other miscellaneous items has been revised to $ 13.8 million and the previously reported $ 60.3 million o f performance obligations for warranties has been revised to $ 41.7 million. 89 Table of Contents For the period ended March 31, 2025 Remaining performance obligations represent the aggregate amount of transaction price allocated to performance obligations that are unsatisfied, or partially unsatisfied. Service contracts that are considered cancellable are generally considered 30 to 60 day contracts and are not included in the remaining performance obligations. As of March 31, 2025, total remaining performance obligations amounted to $ 56.9 million. Of this total amount, $ 42.3 million related is related to performance obligations for warranties, w hich is the estimated revenue expected to be recognized over the warranty period for systems that have been delivered (the time bands reflect management’s best estimate of the period when the Company will transfer control to the customer and may change based on timing of shipment, readiness of customers’ facilities for installation, installation requirements, and availability of products). The Company has elected the practical expedient to not disclose the unsatisfied performance obligations of contracts with an original expected duration of one year or less. The following table represents the Company's expected revenue recognition based on the rem aining performance obligations for warranties a s of March 31, 2025 ( in thousands): Fiscal years 2025 2026 2027 Thereafter Warranty $ 5,027 $ 21,141 $ 13,475 $ 2,673 The Company expects to recognize as revenue the significant majority of the additional $ 14.6 million of remaining  performance obligations, which are primarily related to deferred training and system installations as revenue over the next 12 months. The Company also has open system sales orders, upgrade sales orders and customer credits that are excluded from the above remaining performance obligation balances primarily because they do not include substantive termination penalties at order execution and therefore do not meet the definition of a remaining performance obligation in accordance with ASC 6 06, Revenue from Contracts with Customers . The contract inception date in accordance with Step 1 ASC 606 for these system and upgrade sales orders has been determined to be shortly before shipment of the system, when the customer becomes obligated to pay the non-refundable contract balance. The Company corrected the Errors, reducing the total remaining performance obligations from $ 886.1 million (as previously reported) to $ 56.9 million, reflecting the exclusion of $ 780.5 million of open system sales orders and $ 20.5 million of upgrade sales orders and $ 28.3 million o f customer credits. The previously reported $ 826.1 million of remaining performance obligations related to open system sales, upgrades, training and other miscellaneous items has been revised to $ 14.6 million and the previously reported $ 60.0 million of performance obligations for warranties h as been revised to $ 42.3 million. 90 Table of Contents