ACCURAY INC

Note1. 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”).

Risks and Uncertainties

The Company is subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, butnot 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; the conflicts in Russia-Ukraine, Iran, the Middle East and Southwest Asia, including the impact on global supply chains and oil prices as well as other geopolitical concerns, 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; imposition of 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 continue 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 fiscal year2027, 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 fiscal year2027. 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 year2024 and we expect this will continue to affect us. The extent of the ongoing impact of these macroeconomic events on the Company’s business, the Company’s 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.

On* February 2, 2026,the Company received a notice from the Nasdaq Listing Qualifications Department (the “Nasdaq Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price for the last30* consecutive business days, the Company wasno longer in compliance with Nasdaq Listing Rules5450(a)(1) (the “Bid Price Rule”) which requires listed securities to maintain a minimum bid price of*$1.00* per share. The notification hadno immediate effect on the listing of the Company’s common stock. Nasdaq provided the Company with a180 calendar days compliance period (the “Compliance Period”), or until* August 3, 2026,in which to regain compliance with the Bid Price Rule. On August 4, 2026,Nasdaq notified the Company that it had been granted an additional180*-calendar-day period, or until* February 2, 2027,to regain compliance with the Bid Price Rule. The extension was granted based on the Company’s satisfaction of the applicable requirements for continued listing, other than the bid price requirement, and the Company’s stated intention to cure the deficiency during the additional compliance period. If at any time prior to February 2, 2027,the closing bid price of the Company’s common stock is at least$1.00* per share for a minimum often consecutive business days, Nasdaq will provide written confirmation that the Company has regained compliance with the Bid Price Rule, subject to Nasdaq’s discretion. The Company submitted a transfer application and paid an application fee, and its common stock was transferred to The Nasdaq Capital Market effective as of the opening of business on* August 6, 2026,and continues to trade under the symbol “ARAY”. The Company continues to evaluate alternatives to regain compliance, including a potential reverse stock split, and intends to regain compliance within the extended compliance period. There can beno* assurance that the Company will be able to regain compliance with the Bid Price Rule or otherwise maintain compliance with Nasdaq’s continued listing requirements.

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 next12 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.

Subsequent to* June 30, 2026,the Company entered into a series of financing transactions designed to improve liquidity and provide additional financial flexibility, including the issuance of Series A Convertible Preferred Stock, the exchange of approximately $40.0 million of indebtedness, modifications to the Company’s Financing Agreement and revised covenant requirements. Management believes these actions materially improve the Company’s ability to satisfy its anticipated operating and debt service obligations over the nexttwelve* months; however, uncertainties related to macroeconomic conditions, operating performance, future borrowing availability and the satisfaction of remaining transaction closing conditions continue to present risks to the Company’s business and liquidity. See Note16, “Subsequent Events,” for additional information.

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Failing to comply with the covenants to the Amended 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* maybe 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 Amended Financing Agreement, if the Company isnot* 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 Amended 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* mayrequire the Company to obtain waivers or additional amendments to the Amended Financing Agreement in order to maintain compliance and there can beno* 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 the Amended Financing Agreement, is accelerated, the Company would be required to obtain replacement financing. There can beno assurance that the Company would be able to obtain replacement financing on acceptable terms, or at all, on a timely basis. There can beno assurance that the Company would be able to satisfy its obligations if any of its indebtedness is extended. There isno 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 ofthree 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 collateral for its cash flow hedging program, cash collateral for U.S. custom bonds, cash held in bank accounts 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 carrying values of the Term Loan Facility and Delayed Draw Facility approximate their fair values 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 and Super 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 Note6, *Fair Value Measurements,*of the notes to consolidated financial statements for further information.

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 hasnot experienced any losses in such accounts and believes that it isnot exposed to any significant risk on these balances.

For the years ended* June 30, 2026*, and2025, the JV represented 16% and 26%, respectively, of the Company’s total net revenue. For the years ended* June 30, 2026*, and* June 30, 2025*, respectively, the JV represented 14% and 33%, respectively, of the Company’s total net accounts receivables. The Company hadno other customers who represented more than10% of the Company’s total accounts receivables, as of such dates.

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 consists 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 receivables 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.

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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* mayoffer 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 maypertain to all performance obligations in a specific contract or maybe allocated to a specific performance obligation. The Company reviews payment terms extending beyondone* 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 tonot adjust for a material financing component if the gap between payment and delivery was expected, at the contract inception, to be less thanone year.

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 doesnot 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 arenot considered separate performance obligations in system sales agreements. During fiscal years2026 and2025,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 its products and services in similar circumstances and to similar customers. When SSP isnot directly observable, the Company estimates SSP using methods that maximize the use of observable inputs and consider factors such as historical selling prices, customer class, geographic market, pricing practices, discounting trends, market conditions, and other entity-specific factors. The transaction price is allocated to each performance obligation based on its relative SSP at contract inception. Consideration, including the effects of discounts, is generally allocated to the separate performance obligations on a relative SSP basis. Contract modifications are evaluated in accordance with applicable revenue recognition guidance to determine whether the modification should be accounted for as a separate contract or as part of the existing contract. When a contract modification requires reallocation of consideration to remaining performance obligations, the Company uses the SSPs applicable at the modification date.

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 arenot 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 the Company’s 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 afive 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 offive 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 isone year or less.

The Company invoices its customers based on the billing schedules in its sales arrangements. Payment terms generally vary from30 to90 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 didnot have any significant impairment losses on its contract assets for any period presented.

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Deferred Revenue and Customer Advances

Deferred revenue represents contract liabilities for amounts billed or collected from customers for which the related performance obligations havenot yet been satisfied and, therefore, revenue hasnot yet been recognized. Deferred revenue primarily consists of deferred warranty, training, maintenance services, short-shipped items, and other products and services that havenot yet been transferred to the customer. Service contracts outside of the warranty period are generally considered month-to-month contracts. Deferred revenue also includes amounts associated with warranty obligations expected to be recognized as revenue over the remaining warranty period for systems that have already been installed. Deferred revenue excludes transaction amounts associated with contracts or orders for which a contract liability hasnot been recorded as of the balance sheet date.

Customer advances represent payments received from customers in advance of product shipment or satisfaction of other contractual performance obligations in accordance with the underlying 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 arenot considered improvements and donot 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 isnot amortized but is evaluated for impairment on an annual basis and when impairment indicators are present. The Company has assessed that it hasone operating segment andone 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’s30-day average,60-day average, and closing stock price on the closest to the annual review date multiplied by the outstanding shares as of period-end. If the carrying value of the reporting unit is in excess of its fair value, an impairment* mayexist, and the Company must perform thesecond* 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 isnot impaired andno further analysis is required.

The Company determined that a triggering event had occurred as of* March 31, 2026,primarily due to a significant decline in its stock price during thethird* quarter of fiscal2026, most notably in late* March 2026,which resulted in a decrease in its market capitalization. Accordingly, the Company performed a quantitative goodwill impairment test as of March 31, 2026.*The fair value of the reporting unit was estimated using a combination of the income approach, which incorporates projections of future revenues, expenses, and cash flows discounted to their present values, and the market approach. Based on the results of the quantitative impairment test, the estimated fair value of the reporting unit exceeded its carrying amount; therefore,no goodwill impairment charge was recorded.

During thefourth quarter of fiscal2026, the Company’s stock price continued to decline, with the most significant deterioration occurring during the final week of the fiscal year ended* June 30, 2026.The decline in stock price further reduced the Company's market capitalization and didnot* recover within a reasonable period subsequent to year-end. As a result, the Company concluded that an additional triggering event had occurred as of* June 30, 2026and performed asecond* quantitative goodwill impairment test as of that date. Consistent with the* March 31, 2026assessment, the fair value of the reporting unit was estimated using a combination of the income approach and market approach. Based on the results of the June 30, 2026,*quantitative impairment test, the estimated fair value of the reporting unit exceeded its carrying amount and, accordingly,no goodwill impairment charge was recorded.

Therefore,no impairment of goodwill was identified during the fiscal years ended* June 30, 2026and2025*.

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.

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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”), restricted stock awards (“RSAs”), performance stock units (“PSUs”), performance stock awards (“PSAs”) 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 has issued warrants to the lenders of its long-term debt (See Note9.“*Stockholders’ Equity” for more information).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 ASC480* (“ASC480”) and Derivatives and Hedging ASC815 (“ASC815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC480, meet the definition of a liability pursuant to ASC480, and whether the warrants meet all of the requirements for equity classification under ASC815, 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 donot 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 ASC815, the Premium Warrants and Super Premium Warrants qualify for equity treatment. The fair value of the Premium Warrants and Super Premium Warrants was estimated using a Black-Scholes method. The Penny Warrants donot 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).

Accounting guidance dictates that shares issuable for little orno 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 orno 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**30,2026.* Approximately 7.4 million and 0.4 million Penny Warrant shares are included in the weighted average shares to calculate basic and diluted earnings per share during the years ended* June 30, 2026,and2025,* respectively. As of* June 30, 2026,*no warrants have been exercised.

On* July 29, 2026,the Company entered into the Securities Purchase Agreement, pursuant to which, subject to the satisfaction of certain closing conditions, certain existing investors agreed, among other things, to cancel certain existing warrants held by such investors, including warrants previously issued in connection with the Financing Agreement. In connection with the Securities Purchase Agreement, the Company entered into AmendmentNo.* 3 to the Financing Agreement, pursuant to which the Company issued additional warrants that provide for the purchase of approximately 15.3 million shares of the Company's common stock at an exercise price of $0.01 per share. Because these transactions occurred subsequent to* June 30, 2026,they arenot* reflected in the warrants outstanding as of* June 30, 2026,or in the computation of basic and diluted earnings per share for fiscal2026.* See Note16, Subsequent Events, for additional information.

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.

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):

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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 of12 months or less at inception arenot 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 donot 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.

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 isnot 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 aone-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 tothird parties.

The JV's equity method goodwill isnot amortized but is evaluated for impairment on an annual basis and when impairment indicators are present. The Company’s 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 the Company’s 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 thannot 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 beno material changes in uncertain tax positions in the next12 months.

Effective* July 1, 2025,the Company adopted ASU2023*-09,* Income Taxes (Topic740): Improvements to Income Tax Disclosures*. As a result of the adoption, the Company expanded its annual income tax disclosures, including enhanced disaggregation of the effective tax rate reconciliation, pretax income by jurisdiction, and income taxes paid by jurisdiction, where applicable. The adoption didnot impact the recognition or measurement of income tax balances and hadno effect on the Company’s consolidated financial position, results of operations or cash flows.

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Accumulated Other Comprehensive Income (Loss)

The components of comprehensive income (loss) consist of net income (loss), unrealized gain (loss) from cash flow hedges, changes in foreign currency exchange rate translation, and net changes related to a defined benefit pension plan. The unrealized gains or losses on cash flow hedge instruments results from changes in our cash flow hedging arrangements. 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 subsidiariesnot 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.

Recent Accounting Pronouncements

Accounting Pronouncements - Adopted

In* December 2023,the FASB issued ASU2023*-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. The accounting standard was adopted for this Annual Report on Form10-K on a prospective basis. See Note12. *Income Taxes,*for more information.

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 ASU2024*-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* March 2025,the FASB issued ASU2025*-05, Financial Instruments—Credit Losses (Topic326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The standard simplifies the application of the current expected credit loss ("CECL") model for trade accounts receivable and contract assets by providing a practical expedient for estimating expected credit losses. The amendments are intended to reduce the cost and complexity associated with applying CECL while maintaining decision-useful information for financial statement users. The update is effective for fiscal years beginning after* December 15, 2025,including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact that adoption of ASU2025*-05 will have on its consolidated financial statements and related disclosures.

Note2. 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* mayoffer longer or extended payment terms of more thanone* 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 taketwo or more years from the time of order to revenue recognition due to the Company’s long sales cycle.

Changes in the contract assets and contract liabilities are as follows (dollars in thousands):

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During the year ended* June 30, 2026*, 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 exceeding12 months. During the year ended* June 30, 2026*, 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, 2026* and* June 30, 2025*, the Company recognized revenues of $64.0 million and $62.4 million, respectively, which were included in the deferred revenue balances at* June 30, 2025*, and* June 30, 2024*, respectively.

Remaining Performance Obligations

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 considered30 to60 day contracts and arenot included in the remaining performance obligations below.

As of* June 30, 2026*, total remaining performance obligations amounted to $60.7 million. Of this total amount, $49.4 million 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 when the Company will transfer control to the customer and* maychange based on timing of shipment, readiness of customers’ facilities for installation, installation requirements, and availability of products). The Company has elected the practical expedient tonot* disclose the unsatisfied performance obligations of contracts with an original expected duration ofone 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, 2026* (in thousands):

The Company expects to recognize as revenue the significant majority of the additional $11.3 million of remaining performance obligations, which are primarily related to deferred training and system installations, over the next 12 months. The Company also has open system orders, upgrade sales orders, and customer credits that are excluded from the above remaining performance obligation balances primarily because they donot include substantive termination penalties at order execution and therefore donot meet the definition of a remaining performance obligation in accordance with ASC606, Revenue from Contracts with Customers. The contract inception date in accordance with Step1 of ASC606 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.

Capitalized Contract Costs

As of* June 30, 2026*, and2025, the balance of capitalized costs to obtain a contract was $4.6 million and $7.3 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.

Note3. Supplemental Financial Information

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 thanone 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.

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A summary of the Company’s financing receivables is presented as follows (in thousands):

Inventories

Inventories consisted of the following (in thousands):

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):

IEEPA refund receivables represent amounts recoverable from U.S. Customs and Border Protection (“CBP”) under the International Emergency Economic Powers Act (“IEEPA”). On* April 21, 2026,the Company submitted approximately $8.9 million previously paid tariff refund claims, which were reported by CBP as having an accepted submission status. As of June 30, 2026,an additional $0.4 million of interest was reported by the CBP, resulting in a total refund claim balance of approximately $9.3 million. As of June 30, 2026,the Company had received $5.5 million of cash refunds, including interest, which the Company is obligated to pay to thethird*-party purchaser of these refund rights withinfive business days. As of* June 30, 2026,all previously submitted claims remained in liquidation status. Based on its assessment of the underlying claims and the status of the refund process, the Company concluded that recovery of the previously paid IEEPA tariffs was probable and reasonably estimable. Accordingly, the Company recorded an IEEPA refund receivable of approximately $3.8 million as of June 30, 2026,*representing the $9.3 million of approved refund claims, including interest, net of $5.5 million of refunds received as of that date.

Debt financing costs are related to the revolving credit facility included in the Financing Agreement (see Note7. Debt, for more information).

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Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

Depreciation expense related to property and equipment was $6.7 million, and $6.1 million during the years ended* June 30, 2026*, and2025, respectively.

Goodwill

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

The Company performed its annual goodwill impairment test in the quarter ended* December 31, 2025,and determined that there wasno impairment to goodwill. The Company determined that a triggering event occurred due to a significant decline in its stock price, most notably in late March 2026,which resulted in a decrease in its market capitalization and as a result, on March 31, 2026,the Company performed a quantitative goodwill impairment test. The fair value of goodwill in the quantitative impairment test was determined using a combination of an income approach, which estimates fair value based upon projections of future revenues, expenses, and cash flows discounted to their respective present values, and a market approach. The quantitative impairment test determined that the fair value of its reporting unit exceeded its respective carrying amount and thereforeno* goodwill impairment was recorded.

During thefourth quarter of fiscal2026, the Company’s stock price continued to decline, with the most significant deterioration occurring during the final week of the fiscal year ended* June 30, 2026.The decline in stock price further reduced the Company’s market capitalization and didnot* recover within a reasonable period subsequent to year-end. As a result, the Company concluded that an additional triggering event had occurred as of* June 30, 2026and performed asecond* quantitative goodwill impairment test as of that date. Consistent with the* March 31, 2026assessment, the fair value of the reporting unit was estimated using a combination of the income approach and market approach. Based on the results of the June 30, 2026*quantitative impairment test, the estimated fair value of the reporting unit exceeded its carrying amount and, accordingly,no goodwill impairment charge was recorded.

Therefore, no impairment of goodwill was identified during the fiscal years ended* June 30, 2026and2025*.

Other Assets

Other assets consisted of the following (in thousands):

Duty drawback receivables are amounts due from U.S. Customs and Border Protection under Section301, Section122 and other customs programs. During fiscal2026, based on updated information and developments related to the status and expected timing of collection of certain claims, the Company reassessed its estimate of when the related amounts are expected to be realized. As a result, a portion of all duty drawback receivables were classified as long-term as of* June 30, 2026.*This reclassification reflects a change in estimate regarding the expected timing of collection.

The amortization expense or amounts written down to net realizable value for the capitalized software costs to be sold during the year ended* June 30, 2026* was $1.2 million. There wasno amortization expense or amounts written down to net realizable value for the year ended* June 30, 2025*. The Company didnot identify any triggering events that would indicate a potential impairment of its definite-lived intangible and long-lived assets as of* June 30, 2026*. Debt financing costs are related to the $20 million revolving credit facility included in the Financing Agreement (see Note7. Debt, for more information).

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Other Accrued Liabilities

Other accrued liabilities consisted of the following (in thousands):

On* April 13, 2026,the Company entered into a participation agreement with athird* party pursuant to which it agreed to transfer its rights to refunds of previously paid tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). Under the terms of the agreement, thethird party paid $6.6 million in exchange for approximately $9.3 million of asserted refund claims, including interest. The transaction didnot qualify for derecognition under ASC860, Transfers and Servicing, and was therefore accounted for as a financing arrangement. Accordingly, the $6.6 million of proceeds received was recognized as a liability. The Company is required to remit any IEEPA tariff refunds received, including related interest, to thethird-party purchaser withinfive business days of receipt.

Financing costs associated with the arrangement are recognized using the effective interest method, which accretes the initial liability to the expected amount payable upon settlement of the underlying refund claims. During thefourth quarter of fiscal2026, the Company recognized $2.4 million of financing costs, increasing the carrying amount of the liability from the initial proceeds of $6.6 million to the estimated settlement amount of $9.0 million. As of* June 30, 2026,the Company recorded an aggregate liability of $6.6 million related to IEEPA tariffs. This amount consisted of $2.8 million of refunds received that hadnot* yet been remitted to thethird-party purchaser, which was included in accounts payable, and $3.8 million of estimated refunds for amountsnot yet received, which was included in other accrued liabilities.

Interest expense consisted of the following (in thousands)

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

Note4. 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 arenot* reasonably certain to be exercised, and therefore arenot factored into the determination of lease payments.

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

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Operating lease right-of-use assets and operating lease obligations are represented in the table below (in thousands):

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

Maturities of operating lease liabilities as of* June 30, 2026*, are presented in the table below (in thousands):

Note5. Derivative Financial Instruments

The Company measures all derivatives at fair value on the consolidated balance sheets. The accounting for gains and losses resulting from changes in the fair value of those derivatives depends upon the use of the derivative and whether it qualifies for hedge accounting are as follows (in thousands):

As of* June 30, 2026* and* June 30, 2025* the fair value of the Company’s derivativesnot designated as hedging instruments werenot material. The Company records its derivative financial instruments on a gross basis within the consolidated balance sheets.

Cash Flow Hedging Arrangements

The Company uses foreign currency forward contracts designated as cash flow hedges to manage its exposure to the variability of future cash flows that are denominated in a foreign currency. For derivative instruments designated as cash flow hedges, the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into income in the same period or periods in which the hedged item affects earnings. In order for the Company to receive hedge accounting treatment, the cash flow hedge must be highly effective in offsetting changes in the fair value of the hedged item and the relationship between the hedging instrument and the associated hedged item must be formally documented at the inception of the hedge relationship. Hedge effectiveness is formally assessed, both at hedge inception and on an ongoing basis, to determine whether the derivatives used in hedging transactions are highly effective in offsetting changes in the value of the hedged items and whether they are expected to continue to be highly effective in future periods.

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The Company formally documents relationships between hedging instruments and associated hedged items. This documentation includes: identification of the specific foreign currency asset, liability or forecasted transaction being hedged; the nature of the risk being hedged; the hedge objective; and the method of assessing hedge effectiveness. If an anticipated transaction is deemedno longer likely to occur, the corresponding derivative instrument is de-designated as a hedge and any associated unrealized gains and losses in accumulated other comprehensive loss are recognized in income or expense at that time. Any future changes in the fair value of the instrument are recognized in current income or expense. The Company is required to maintain a minimum cash collateral balance of $2.0 million for its outstanding cash flow hedge derivatives to fund the anticipated settlement of its open positions. As of* June 30, 2026*, the Company has $2.0 million in cash collateral for its cash flow hedge derivatives recorded in long-term restricted cash on the consolidated balance sheets.

The notional amount of the Company’s foreign currency forward contracts that were entered into to hedge forecasted revenues and designated as cash flow hedges (in thousands):

The amount of the gains and losses on derivative instruments designated as cash flow hedges and the classification of those gains and losses within the consolidated financial statements were as follows (in thousands):

Gains and losses reclassified from accumulated other comprehensive loss are recorded in other income and expense on the Company’s statement of operations and comprehensive loss. During the year ended* June 30, 2026*, the gains and losses recognized due to the de-designation of cash flow hedge contracts werenot significant. As of* June 30, 2026* the amount that will be reclassified from accumulated other comprehensive loss to earnings within the nexttwelve months is $1.6 million. As of* June 30, 2026* outstanding cash flow hedges will mature within the next eighteen months.

Balance Sheet Hedging Arrangements

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 doesnot use derivative financial instruments for speculative or trading purposes. These forward contracts arenot designated as hedging instruments for accounting purposes. 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):

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The Company entered into the foreign currency forward contracts on* June 30, 2026* and* June 30, 2025*. There isno significant change in the Company’s mark-to-market analysis, and therefore, there wasno 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 instrumentsnot designated as hedging instruments (in thousands):

Note6. 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 containsthree levels of inputs that* may*be used to measure fair value, as follows:

Level1**—* *Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.

Level2**—* Other observable inputs available at the measurement date, other than quoted prices included in Level1,* either directly or indirectly, including:

Level3**—* *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 Note9) are accounted for as a liability with the changes in fair value of the warrants are recognized in the statements of operations and comprehensive income (loss). The estimated fair value of the Penny Warrants liabilities represent Level2 measurements because the fair value of the warrant is being implied based on market trades of the Company’s stock.

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

Other Fair Value Disclosures

The Company’s open foreign currency forward contracts designated as cash flow hedges and balance sheet hedges are measured on a recurring basis using Level2 based upon observable inputs. As of* June 30, 2026*, the fair value of the Company’s cash flow hedges was $1.6 million. The Company didnot have open foreign currency forward contracts designated as cash flow hedges as of* June 30, 2025*. As of* June 30, 2026and June 30, 2025*, the fair value of the Company's foreign currency forward contracts designated as balance sheet hedges werenot material.

The following table summarizes the carrying value of the Company’s debt, net of debt financing costs, (in thousands):

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The Company’s Term Loan Facility and Delayed Draw Facility (as defined in Note7) reflect the bank quoted market rates, which the Company considers to be a Level2 fair value measurement. The Company’s convertible debt is measured on a recurring basis using Level2 based upon observable inputs. The carrying value and fair value of the Term Loan Facility and Delayed Draw Facility net of $22.4 million and $21.0 million as of* June 30, 2026and2025,* respectively, for the fair value of the warrants issued to the lenders to purchase the Company’s common stock.

The Premium Warrants and Super Premium Warrants (as defined in Note9) 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 aggregate issuance-date fair values of $17.2 million and $12.8 million at* June 30, 2026and June 30, 2025,respectively, arenot* 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 arenot observable in the market, the fair value measurement of the Premium Warrants and Super Premium Warrants represent a Level3 measurement.

Note7. Debt

The Company’s outstanding debt as of* June 30, 2026* and* June 30, 2025* is as follows (in thousands):

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

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

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.

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Financing Agreement

On* June 6, 2025,the Company entered into a newfive-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. TCW is considered a related party due to its relationship with the Company as a beneficial owner of more than 5% of the Company’s common stock. 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 (the “Revolving Credit Facility” and, together with the Term Loan Facility and Delayed Draw Facility, the “Facilities”). The Financing Agreement contains restrictions and covenants applicable to the Company and its subsidiaries. The Company paid $13.1 million in debt financing fees (including a $5.4 million Original Issue Discount Fee). As of June 30, 2025,*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.

In* December 2025,the Company entered into amendments to the Financing Agreement. Thefirst* amendment to the Financing Agreement (“First Amendment”) provided for the inclusion of certain restricted cash balances in the liquidity covenant in the Financing Agreement. Thesecond amendment to the Financing Agreement (“Second Amendment”) and the Financing Agreement as amended by the First Amendment and Second Amendment (the “Amended Financing Agreement”) provide for (i) removal of the leverage condition the Company must meet to draw down on the Delayed Draw Facility; (ii) reduction of the capacity of the Delayed Draw Facility to $18.3 million; and (iii) the delay of the commencement of the requirement for the Company to meet the fixed charge coverage ratio and leverage ratio to* December 31, 2026.In addition, the Company agreed to pay an additional $2.4 million in fees and amounts available to be drawn under the revolving credit facility were reduced to $15.0 million through December 31, 2026.*

In* May 2026,*the Company borrowed an aggregate principal amount of $18.3 million under the Delayed Draw Facility. The Company agreed to pay an additional $0.3 million in fees to fund the Delayed Draw Facility.

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

The Company’s obligations under the Amended Financing Agreement are secured byfirst-priority liens on substantially all assets of the Company and certain of its direct and indirect subsidiaries, subject to certain exceptions.

The Amended 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 Amended Financing Agreement) to be greater than a certain specified ratio for each fiscal quarter during the term of the Amended Financing Agreement, (ii) the fixed charge coverage ratio (as defined in the Amended Financing Agreement) to be less than a certain specified ratio for each fiscal quarter during the term of the Amended Financing Agreement or (iii) liquidity (as defined in the Amended Financing Agreement) to be less than a certain specified threshold for each month during the term of the Amended Financing Agreement. As of* June 30, 2026,the Company wasnot* in compliance with the minimum liquidity covenant contained in the Amended Financing Agreement. As noted below, on* July 29, 2026,the Company entered into AmendmentNo.* 3 to the Financing Agreement, pursuant to which the lenders waived such default and modified certain financial covenants, including the minimum liquidity requirement. See Note16, Subsequent Events, for additional information.

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

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 Amended 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.

As part of the Financing Agreement, the Amended Financing Agreement and drawing upon the Delayed Draw Facility, the Company issued detachable warrants to purchase the Company’s common stock to certain of its lenders (“Warrant Holders”) under the Financing Agreement. See Note9. Stockholders’* Equity,* for more information on the warrants issued to the Warrant Holders.

On* July 29, 2026,the Company entered into AmendmentNo.* 3 to the Financing Agreement and the Securities Purchase Agreement with certain existing investors. Among other matters, the transaction provided for, subject to certain closing conditions, the issuance of $55.0 million of Series A Convertible Preferred Stock, paid in the form of (i) $15.0 million in cash, which amount was paid on the date the parties entered into the Securities Purchase Agreement, and (ii) the conversion of $40.0 million of existing indebtedness held by existing investors under the Financing Agreement, with such existing indebtedness to be cancelled and extinguished in exchange for shares of Series A Preferred Stock issued at the closing of the Securities Purchase Agreement. In addition, AmendmentNo. 3 to the Financing Agreement, among other things, modified certain financial covenants, including minimum liquidity requirements, provided a covenant holiday through* December 31, 2027,and converted the revolving credit facility to an asset-based lending structure. See Note16,* Subsequent Events, for additional information regarding these transactions.

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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 Note9.* Stockholders’* Equity,* for more information). Holders of the remaining $18.0 million aggregate principal amount of the Convertible Notes didnot receive cash or shares of common stock in the Exchange mentioned above and the original terms of such Convertible Notes werenot 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 was recorded as a loss on extinguishment of debt in fiscal2025.

Holders of the remaining Convertible Notes* mayconvert their notes at any time on or after March 6, 2026until 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,* maybe 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 mayrequire 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, butnot* including, the fundamental change repurchase date. As of* June 30, 2025,the if-converted value of the remaining Convertible Notes didnot* exceed the outstanding principal amount.

The remaining $18.0 million aggregate principal amount of the Convertible Notes was paid off on the* June 1, 2026*due date.

Note8. Commitments and Contingencies

Debt Commitments

The Company is required to make quarterly principal and interest payments on the Term Loan Facility and the Delayed Draw Facility. Future minimum principal payments and interest on the Term Loan Facility and Delayed Draw Facility (as defined in Note7. Debt), as of* June 30, 2026*, are as follows (in thousands):

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 hasnot 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 havenot 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 hasnot incurred claims or costs to defend lawsuits or settle claims related to these indemnification agreements. The Company hasnot recorded any liability associated with its indemnification agreements as it isnot aware of any pending or threatened actions that represent probable losses as of* June 30, 2026.*

Guarantees

As of* June 30, 2026* and* June 30, 2025*, the Company had various bank guarantees totaling approximately $1.9 million and $1.5 million, respectively, primarily related to a bidding process with customers.

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Royalty Agreements

The Company enters into software license agreements withthird parties that* mayrequire royalty payments for each license used. The Company records royalty costs in cost of revenue or deferred cost of revenue. The Company had approximately $3.3 million and $3.1 million accrued liabilities as of June 30, 2026and2025*, respectively, related to this agreement. The following table provides information about the Company’s royalty expense and royalty payments (in thousands):

Restructuring

In fiscal year2026, the Company implemented a restructuring plan (“FY26 Restructuring Plan”). TheFY26 Restructuring Plan included the elimination of approximately 3% of the global workforce during thethree months ended* September 30, 2025,and the elimination of approximately 15% of the global workforce during thethree* months ended* December 31, 2025.Certain employees notified during thethree* months ended* December 31, 2025,have various termination dates during the quarterly periods ended March 31, 2026,and June 30, 2026.Restructuring charges also includethird*-party implementation and other costs that were directly tied to the execution of theFY26 Restructuring Plan and asset impairments for certain operating lease right-of-use assets and capitalized assets as a result of theFY26 Restructuring Plan.

The following table summarizes the restructuring charges (in thousands):

The following table summarizes the restructuring charge liability (in thousands):

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* maybe 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 itno* longer infringes, then the Company* mayterminate the license and provide the customer a refund of the fees paid by the customer for the infringing license or service. The Company hasnot* recorded any liability associated with this indemnification, as it isnot aware of any pending or threatened actions that represent probable losses as of* June 30, 2026*.

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* maybe 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 doesnot* have any probable and reasonably estimable material losses related to any current legal proceedings and claims. Although occasional adverse decisions or settlements* mayoccur, management doesnot* 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.

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Note9. Stockholders’** Equity**

Common Stock

The Company has 200.0 million shares authorized as of* June 30, 2026and2025*. As of* June 30, 2026*, there were 122.5 million shares issued and 119.4 million shares outstanding. As of* June 30, 2025*, there were 115.8 million shares issued and 112.6 million shares outstanding.

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 (i)17,180,710 shares of common stock with an exercise price of $1.68 per share, exercisable on and after December 7, 2025and expiring on June 6, 2032 (the “June 2025Premium Warrants”) and (ii)6,247,531 shares of common stock with an exercise price of $0.01 per share ( “June 2025Penny Warrants”) exercisable immediately and expiring on June 6, 2032.At the issuance date, the June 2025*Premium Warrants were valued at $13.1 million.

On* December 15, 2025,concurrently with its entry into the Second Amendment, the Company issued detachable warrants to purchase the Company’s common stock to the Warrant Holders. The Warrant Holders were issued warrants to purchase (i)3,062,726 shares of common stock with an exercise price of $1.50 per share, exercisable on and after June 16, 2026and expiring on December 15, 2032 (the “December 2025Super Premium Warrants”), (ii)2,187,661 shares of common stock with an exercise price of $1.25 per share, exercisable on and after June 16, 2026and expiring on December 15, 2032 (the “December 2025Premium Warrants”), and (iii)1,750,129 shares of common stock with an exercise price of $0.01 per share, which are exercisable immediately and expire on December 15, 2032 (the “December 2025Penny Warrants”). At the issuance date, the December 2025Super Premium Warrants and December 2025*Premium Warrants were valued at $3.7 million in aggregate.

On* May 18, 2026,the Company accessed the Delayed Draw Loan and issued detachable warrants to purchase the Company’s common stock to the Warrant Holders. The Warrant Holders were issued warrants to purchase (i)2,990,010 shares of common stock with an exercise price of $1.50 per share, exercisable on and after November 19, 2026and expiring on May18,* 2033 (the* “May 2026Super Premium Warrants”), (ii)2,135,721 shares of common stock with an exercise price of $1.25 per share, exercisable on and after November19,* 2026 and expiring on* May 18, 2033 (the “May 2026Premium Warrants”), and (iii)1,708,577 shares of common stock with an exercise price of $0.01 per share, which are exercisable immediately and expire on May 18, 2033 (the “May 2026Penny Warrants”). The June 2025Premium Warrants, June 2025Penny Warrants, the December 2025Super Premium Warrants, the December 2025Premium Warrants, the December 2025Penny Warrants, the May 2026Super Premium Warrants, the May 2026Premium Warrants and the May 2026Penny Warrants are collectively referred to as the “Warrants.”No Warrants were exercised as of June 30, 2026.At the issuance date, the May 2026Super Premium Warrants and May 2026*Premium Warrants were valued at $0.7 million in aggregate.

The Company determined that the* June 2025Premium Warrants, December 2025Super Premium Warrants, December 2025Premium Warrants, May 2026Super Premium Warrants, and the May 2026Premium Warrants (collectively, the “Premium Warrants”) qualified as freestanding instruments that met all of the criteria for equity classification. The Premium Warrants were treated as a debt discount and will amortize the debt discount using the effective interest rate method over the life of the loan as interest expense. The Company determined that the June 2025Penny Warrants, the December 2025Penny Warrants, and the May 2026Penny Warrants (collectively “Penny Warrants”) qualified for liability classification. The fair value of the Penny Warrants at the issuance date is recorded as a debt discount (see Note6.* Fair value Measurements, for more information). The Company will amortize the debt discount using the effective interest rate method over the life of the debt as interest expense.

The Warrants have certain anti-dilution protection provisions, including price protection anti-dilution protection in the event that the Company sells stock at a price below $1.00 per share in the case of the Penny Warrants, $1.25 per share in the case of the* June 2025Premium Warrants, $0.93 per share in case of the December 2025Premium Warrants and the May 2026*Premium Warrants, and $1.12 per share in case of the Super Premium Warrants.

The Warrants and the shares of common stock issuable upon the exercise of such Warrants havenot been registered under the Securities Act of1933, 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 Section4(a)(2) of the Securities Act and/or Rule506 of Regulation D promulgated under the Securities Act.

On* July 29, 2026,in connection with the Securities Purchase Agreement and AmendmentNo.* 3 to the Financing Agreement, the Company entered into agreements with certain holders of the Warrants described above providing for the cancellation of such Warrants upon the closing of the Securities Purchase Agreement. Pursuant to AmendmentNo. 3 to the Financing Agreement, the Company issued additional warrants to such holders to purchase up to approximately 15.3 million shares of common stock at an exercise price of $0.01 per share. The Company will evaluate the accounting impact of the warrant modifications and replacement warrants upon closing of the transactions and will record any resulting accounting effects in the applicable reporting period. For additional information regarding the warrant modification transactions and related financing arrangements, see Note16, Subsequent Events.

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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.

As noted above, the remaining $18.0 million aggregate principal amount of the Convertible Notes was paid off on the* June 1, 2026*due date.

Accumulated Other Comprehensive Income (Loss)

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

Note10. Stock Incentive Plan and Employee Stock Purchase Plan

As of* June 30, 2026*, the Company hadtwo outstanding stock incentive plans: the2026 Equity Incentive Plan (“2026 Plan”) and the2007 Incentive Award Plan (“2007 Plan”). The2026 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 the2026 Plan are primarily service‑based (over the requisite service period) while the vesting of performance units granted under the2026 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.

Stock options granted under the2026 Plan have an exercise price of at least100% 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 sharesone 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 thefirst throughfourth 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 overone year. PSUs granted generally vest at the end of athree 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, 2026*, the2007 Plan continued to remain in effect; however, the Company canno 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):

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The following table summarizes the share‑based compensation charges for the Company’s equity awards (in thousands):

The above Restricted stock units and Performance stock units also include RSAs and PSAs.

Stock Options

The Company didnot grant any stock options during the years ended* June 30, 2026* and* June 30, 2025*.

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 ofno dividend payouts.

A summary of option activity under the Company’s incentive plan is presented below (in thousands except per share and term amounts):

There wereno options exercised during the years ended* June 30, 2026* and* June 30, 2025*. 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 waszero for the years ended* June 30, 2026*, and2025. As of* June 30, 2026*, there wereno unrecognized compensation costs related to unvested stock options.

The following table summarizes information about outstanding and exercisable options at* June 30, 2026* (in thousands, except years and exercise price):

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Restricted Stock and Performance Stock

The following table summarizes the activity of RSUs and PSUs (in thousands, except fair value per share):

Restricted Stock

The grant date fair value of the RSUs granted was $6.0 million and $9.2 million during the years ended* June 30, 2026and2025*, respectively. The aggregate fair market value of the RSUs that vested during the years ended* June 30, 2026and2025*, was $3.9 million and $5.5 million, respectively. As of* June 30, 2026*, there was $6.8 million of unrecognized compensation cost related to the RSUs, which is expected to be recognized over a weighted average period of 1.6 years. RSAs are included in the RSU amounts presented in the table above. The grant date fair value of RSAs granted during the year ended* June 30, 2026* was $1.5 million. No RSA awards were granted during the year ended* June 30, 2025*. The aggregate fair market value of the RSAs that vested during the year ended* June 30, 2026* was $0.4 million. There wereno RSAs that vested during the year ended* June 30, 2025*. As of* June 30, 2026*, there was $0.2 million of unrecognized compensation cost related to the RSAs, which is expected to be recognized over a weighted average period of 0.4 years.

Performance Stock

The grant date fair value of PSUs granted was $2.4 million and $2.8 million during the years ended* June 30, 2026and2025*, respectively. There wereno PSUs that vested during the year ended* June 30, 2026* and* June 30, 2025* because the performance conditions werenot met. As of* June 30, 2026*, there was $1.4 million of unrecognized compensation cost related to the PSUs, which is expected to be recognized over a weighted average period of 1.8 years. PSAs are included in the PSU amounts presented in the table above. The grant date fair value of PSAs granted during the year ended* June 30, 2026* was $1.4 million. No PSA awards were granted during the year ended* June 30, 2025*. The wereno PSAs that vested during the years ended* June 30, 2026and2025*. As of* June 30, 2026*, there was $0.6 million of unrecognized compensation cost related to the PSAs, which is expected to be recognized over a weighted average period of 1.1 years.

Employee Stock Purchase Plan

Under the Company’s Amended and Restated2007 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 eachsix month offering period, or the fair market value on the specified purchase date. Employees’ payroll deductions* maynot* exceed10% of their salaries. Employees* maypurchase up to 2,500 shares per eachsix* month offering period, provided that the value of the shares purchased in any calendar year* maynot* 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:

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.

The Company issued 1.0 million and 1.2 million shares under the ESPP during the years ended* June 30, 2026and2025*, respectively, at a weighted average purchase price per share of $0.65 and $1.37, respectively. As of* June 30, 2026*, total unrecognized compensation cost related to the ESPP plan was $0.2 million, which the Company expects to recognize over a weighted average period of 0.9 years.

Common Stock Available For Issuance

In* November 2025,the Company’s stockholders approved the2026* Equity Incentive Plan (the*“2026* Plan”) whereby a maximum of 3,896,000 shares of common stock were reserved for issuance, plus the shares remaining in the share reserve under the Company’s2016 Equity Incentive Plan (the*“2016* Equity Incentive Plan”) immediately before the effective date of the2026 Plan and shares subject to outstanding awards granted under the2016 Plan that would be added to the2026 Plan on or after the effective date of the2026 Plan. At* June 30, 2026*, the Company had 10.8 million shares of common stock reserved for issuance under the stock incentive plans and 1.6 million shares of common stock reserved for issuance under the employee stock purchase plan.

Note11. 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, 2026*, 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.

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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 isnot the primary beneficiary. The Company recognizes the 49% proportionate share of the JV income or loss on aone-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 havenot 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 been manufacturing and selling 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 CyberKnifeS7 Systems, which received NMPA approval in* January 2025.*

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):

As of* June 30, 2026* and* June 30, 2025*, 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 increased by $0.3 million and decreased $0.4 million, respectively. In* June 2026,the JV declared a $1.4 million dividend to the Company paid in July2026*. In* June2025*, the JV declared a $2.5 million dividend to the Company paid in* July**2025.* The Company records the dividends as a reduction to its carrying value in the JV. No impairment was identified as of* June 30, 2026* and* June 30, 2025*.

Summarized financial information of the JV is as follows (in thousands):

The following table shows the activity of the Company’s deferred intra-entity profit margin from sales to the JV (in thousands):

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Note12. Income Taxes

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

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

The Company adopted ASU2023-09, Improvements to Income Tax Disclosures, on a prospective basis beginning with the year ended* June 30, 2026.The following table presents required disclosures pursuant to ASU2023*-09 and reconciles the U.S. statutory federal income tax amount and rate to the Company's effective income tax amount and rate for the fiscal year ended* June 30, 2026 (*in thousands, except for percentages):

The following table presents the required disclosures prior to the Company's adoption of ASU2023-09 and reconciles the U.S. statutory federal income tax rate to the Company's effective income tax rate as follows:

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Upon adoption of ASU2023-09, cash paid for income taxes, net of refunds received, were as follows (in thousands):

The amount of cash paid for income taxes during the year ended* June 30, 2025*was $3.9 million.

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):

The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company's history of operating losses, the Company has concluded that it is more likely thannot that the benefit of its domestic deferred tax assets willnot be realized. The valuation allowance increased by $8.8 million during the year ended* June 30, 2026,primarily due to increases in deferred tax assets related to net operating loss carryforwards and U.S. limitations on the deductibility of interest expense. The valuation allowance decreased by $0.7 million during the year ended June 30, 2025,*primarily due to a decrease in deferred tax assets related to net operating loss carryforwards, partially offset by an increase in deferred tax assets related to capitalized research and development expenditures.

As of* June 30, 2026*, the Company had $276.9 million and $124.5 million in federal and state net operating loss carryforwards, respectively. The federal and state carryforwards expire in varying amounts beginning in2029 for federal and2027 for state purposes.

In addition, as of* June 30, 2026*, the Company had federal and state research and development tax credits of $27.9 million and $23.1 million, respectively. Ifnot utilized, the federal and certain other state research credits expire on an annual basis. The California research credits haveno expiration date.

Under the Internal Revenue Code (“IRC”) Sections382 and383, annual use of the Company’s net operating loss and research tax credit carryforwards to offset taxable income* maybe 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, 2022has been performed and it was determined thatno* ownership change has occurred after* December 2009.*

H.R.1, enacted on* July 4, 2025,introduced provisions that modified the Internal Revenue Code (“IRC”), The legislation includes significant revisions to U.S. corporate income tax laws, including, among other provisions, restoring the option for immediate expensing of certain U.S.-based research and development expenditures and making permanent the ability to claimfirst*-year bonus depreciation on qualified property. The legislation also modifies certain aspects of U.S. taxation of foreign earnings, including changes to the taxation of Net CFC Tested Income (formerly referred to as global intangible low-taxed income (“GILTI”)) and foreign-derived deduction eligible income, as well as revisions to foreign tax credit rules. The enactment of the legislation didnot have a material impact on the Company’s consolidated financial statements due to the Company’s cumulative losses and full valuation allowance position.

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At* June 30, 2026*, the Company has $1.9 million of deferred tax liability related to withholding tax expected to be paid on the remittance of unrepatriated distributable reserves in France, Japan, Switzerland and China. At* June 30, 2026*, the Company has undistributed earnings of certain foreign subsidiaries of $13.5 million that it has indefinitely invested, and on which it hasnot recognized deferred taxes.

The aggregate changes in the balance of gross unrecognized tax benefits were as follows (in thousands):

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. As of* June 30, 2026*, the amount of gross unrecognized tax benefits was $22.8 million, of which $21.8 million wouldnot 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, 2026and2025*, the Company’s cumulative accrued interest and penalties related to uncertain tax positions, wasnot 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 2007 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 from3 to10 years and the material foreign jurisdictions are France, Switzerland and Japan.

The Company is subject to examination of its income tax returns by the Internal Revenue Service ("IRS") and various foreign tax authorities. In certain jurisdictions, the Company has received additional tax assessments,none of which has been material. The Company is currently under examination by the Indian tax authorities for fiscal year 2021. The Company has also received a notice from the IRS regarding an examination of its U.S. federal income tax returns for the fiscal years ended* June 30, 2024and2025.* The Company doesnot expect the resolution of these examinations to have a material effect on its consolidated financial statements.

Note13. Retirement Plans

Employee Benefit Plan

The Company’s employee savings and retirement plan is qualified under Section401(k) of the United States Internal Revenue Code. Employees* maymake voluntary, tax‑deferred contributions to the401*(k) Plan up to the statutorily prescribed annual limit. The Company makes discretionary matching contributions to the401(k) Plan on behalf of employees up to the limit determined by the Board of Directors. The Company contributed $1.7 million and $2.2 million to the401(k) Plan during the years ended* June 30, 2026and2025*, 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.

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Obligations and Funded Status

The following table presents the funded status of the defined benefit pension plan (in thousands):

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

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

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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):

The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during fiscal year2027 related to the Company’s defined benefit pension plan are as follows (in thousands):

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:

The assumptions used to measure the benefit obligation for the Company’s defined benefit pension plan were as follows:

Contributions and Future Benefit Payments

The Company made contributions of approximately $1.4 million to the defined benefit pension plan during both fiscal2026 and fiscal2025. The Company expects total contributions to the defined benefit pension plan for fiscal year2027 will be approximately $1.2 million.

Estimated future benefit payments expected to be paid by the defined benefit pension plan at* June 30, 2026* are as follows (in thousands):

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Plan Assets

The plan assets are invested in insurance contracts with Copré Collective Foundation based in Lausanne, Switzerland at the end of fiscal years2026 and2025. In fiscal2026 and2025, the risks of death and disability were 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 Level2 in the fair value hierarchy. In each of fiscal2026 and2025, the expected interest rate for mandatory retirement savings was 1.5%. 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.

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.

Note14. Segment Disclosure

The Company hasone 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 doesnot 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 infive 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):

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

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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):

The long-lived assets in the Americas region are located in the United States as of* June 30, 2026*, and* June 30, 2025*.

Note15. Related Party

Consulting Agreement

On* October**18,* 2025, the Company entered into a consulting agreement (the “Agreement”) with Dedication Capital, LLC (“Dedication Capital”), an affiliate of Steven F. Mayer, a member of the board of directors (the “Board”) of the Company. Pursuant to the Agreement, Mr. Mayer, the chief executive officer of Dedication Capital, was appointed as Transformation Board Sponsor, providing consulting services to the Company over a period ofone year. Mr. Mayer’s services will include, among other things, responsibility for leading the Company’s planning and execution of certain strategic, organizational, cultural, and operational initiatives and transformation in consultation with the Company’s Chief Executive Officer (“CEO”), onboarding the CEO and consulting with the CEO on other matters, and establishing the composition and duties of a transformation office.

In consideration for the services to be provided to the Company, Dedication Capital and Mr. Mayer will receive (i) a base consulting fee of $600,000 per year (ii) a cash incentive award for fiscal year2026 and thefirst 3 ½ months of fiscal2027 totaling up to $750,000, where $375,000 is guaranteed, and (iii) equity awards granted to Mr. Mayer consisting of (a)1.25 million restricted stock awards (“RSAs”) with a grant date fair value of $1.5 million and (b)1.25 million performance-based stock awards (“PRSA”) with a grant date fair value of $0.9 million. The RSAs will vestone year from the grant date andno later than* November 28, 2026,and the PRSAs will be eligible to vest based on the Company’s stock price performance over an approximatelysix-year performance period ending on September**30,* 2031.

The Company recorded $0.5 million for consulting fees and the incentive target bonus for services provided by Dedication Capital and Mr. Mayer during the year ended* June 30, 2026*. The Company recorded $1.6 million in stock compensation expense during the year ended* June 30, 2026*, respectively, for the RSA and PRSAs. The Company includes the consulting fees and incentive target bonus provided by Mr. Mayer in restructuring expenses as these expenses are directly tied to the execution of theFY26 Restructuring Plan (as defined in Note7). The Company includes expenses for the RSAs and PRSAs in stock-based compensation expenses.

On* April 1, 2026,the Company amended the Agreement (the “Amended Agreement”). The Amended Agreement reduced the following byfifty* percent: (1) the base consulting fee for the period of* March 31, 2026through October 31, 2026, (2) the minimum amount payable under the guaranteed cash incentive award for the period ended June 30, 2026,and (3) the minimum guaranteed mid-year cash incentive award for the period ended September 30, 2026.In addition, the Company accelerated 0.9 million of the RSAs to vest on April 1, 2026,and the remaining shares will vest on October 31, 2026.*

Note16. Subsequent Events

On* July 29, 2026,*the Company entered into the Securities Purchase Agreement with certain existing investors pursuant to which the investors agreed to purchase an aggregate of 55,000 shares of Series A Convertible Preferred Stock for an aggregate purchase price of $55.0 million. The purchase price is payable as (i) $15.0 million in cash (the “Cash Investment”), paid on the signing date of the Securities Purchase Agreement, and (ii) the conversion of $40.0 million of existing indebtedness held by such investors under the Financing Agreement, with such indebtedness to be cancelled and extinguished in exchange for shares of Series A Convertible Preferred Stock at the closing of the Securities Purchase Agreement.

The issuance of the Series A Convertible Preferred Stock is subject to certain closing conditions, including stockholder approval and the implementation of a reverse stock split of the Company’s common stock, at a ratio ranging from any whole number between1-for-15 and1-for-40 (the “Reverse Stock Split”), or such other ratio as* maybe approved by the Board, including at leastone* Preferred Director (as defined below). Upon closing of the Securities Purchase Agreement, certain outstanding Warrants held by the investors party to the Securities Purchase Agreement to purchase approximately 27.6 million shares of common stock will be cancelled. In connection with entering into the Securities Purchase Agreement and AmendmentNo. 3 to the Financing Agreement described below, the Company issued to the investors under the Securities Purchase Agreement warrants to purchase up to an aggregate of approximately 15.3 million shares of common stock, at purchase price of $0.01 per share of common stock. Such warrants are exercisable for a period of 7 years after the date of issuance.

The Series A Convertible Preferred Stock will accrue dividends at 8% per annum and will be convertible at the option of the holders thereof at any time into shares of common stock at an initial conversion price of approximately $0.50 per share, as adjusted for any stock dividend, stock split, stock combination, or reclassification of the common stock, including the Reverse Stock Split. The Series A Convertible Preferred Stock will rank senior to the Company's common stock with respect to dividend and liquidation rights.

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Pursuant to the Securities Purchase Agreement, the Company decreased the size of its Board toseven members, effective upon the execution of the Purchase Agreement. Under the terms of the Purchase Agreement, following the closing, TCW shall have the right to designatetwo members of the Board (the “Preferred Directors”). TCW has initially designated Chan W. Galbato and Steven F. Mayer, both of whom are currently serving as members of the Board, to serve as the Preferred Directors. In addition, for so long as TCW is entitled to designate at leastone Preferred Director, (i) each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee of the Board shall include at leastone Preferred Director (subject to applicable independence requirements and applicable law), and (ii) the Company shallnot establish any executive committee, finance committee or other committee of the Board with material authority over any of the matters that require the approval of the holders of the Series A Convertible Preferred Stock under the Certificate of Designations unless a Preferred Director is a member of such committee (subject to certain exceptions).

Concurrently with entering into the Securities Purchase Agreement, the Company entered into AmendmentNo. 3 to the Financing Agreement. AmendmentNo. 3 amended the Financing Agreement to, among other things, (i) provide a covenant holiday with respect to certain financial covenants through* December 31, 2027, (*ii) modify the terms of the minimum liquidity requirement, (iii) increase certain fees applicable to prepayments, (iv) provide that if the Securities Purchase Agreement is terminated, the Cash Investment is deemed to be a secured obligation under the Financing Agreement and subject to repayment, together with a $15.0 million fee, upon repayment or satisfaction of the obligations (or earlier acceleration thereof), (v) provide for an additional $5.0 million delayed draw term loan commitment, subject to specified conditions, and (vi) converts the revolving credit facility into an asset-based lending facility.

If the Securities Purchase Agreement is terminated pursuant to its terms (including if stockholder approval isnot obtained for the issuance of the Series A Convertible Preferred Stock), (i) the Cash Investment will automatically be deemed to be an Obligation (as defined in the Financing Agreement) under the Financing Agreement, and (ii) the Company will be required to pay a fee in an amount equal to $15.0 million to TCW, as administrative agent under the Financing Agreement, to be allocated among the investors under the Securities Purchase Agreement in accordance with the amounts funded by such investors. Such amount shall be fully earned, non-refundable, and due on such date of termination, and payable in full in cash on the earliest to occur of (i) the final maturity date under the Financing Agreement; (ii) the date on which all Obligations that are then due and payable are indefeasibly paid in full, in cash; (iii) the date on which all or any portion of the Obligations is accelerated; or (iv) the date on which any of the Obligations is satisfied, released, paid, restructured, reorganized, replaced, reinstated, defeased or compromised, including through foreclosure (whether by judicial proceeding or otherwise), a deed in lieu of foreclosure, or a distribution of any kind made to TCW, as administrative agent under the Financing Agreement, or the lenders in full or partial satisfaction of the Obligations.

The Company is evaluating the accounting impact of these transactions, including the classification and measurement of the Series A Convertible Preferred Stock, warrants, debt conversion and debt amendment. The Company is currently unable to reasonably estimate the financial effect of these transactions on its financial statements at this time.

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