ACCURAY INC
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 6, 2026
ARAY$0.11-11.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001437749-26-015199
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001437749-26-035560
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 84 previous paragraphs and 95 current paragraphs.
39 unchanged; 33 reworded; 20 added; 12 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 34 previous and 40 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
We are a radiation therapy company that develops, manufactures, sells and supports treatment delivery, planning, imaging and data management solutions designed to help clinical teams deliver precise radiation treatments across a broad range of clinical cases. Our portfolio includes the CyberKnife robotic platform and a differentiated helical portfolio that includes the Accuray Stellar, Radixact, Accuray Helix and Tomo C Systems, where available. We believe these solutions provide clinicians with advanced capabilities to support accuracy, flexibility, motion management, image guidance, adaptive workflows and personalized treatment delivery.
Current report
Our solutions are designed to support clinical teams during individual treatments, across the treatment workflow and throughout the patient treatment journey, from curative to palliative care. Across our robotic and helical platforms, our solutions include:
Current report
Our CyberKnife platform and helical portfolio, including Accuray Stellar, Radixact, Accuray Helix and Tomo C Systems, where available, are designed to support advanced radiation treatments such as SRS, SBRT, IMRT, IGRT and adaptive radiation therapy. These platforms are designed to support precise treatment delivery while helping clinicians manage dose to healthy tissue and organs at risk. The CyberKnife platform is also used by neurosurgeons for radiosurgery treatments involving brain and spine tumors, as well as selected neurologic and endocrine disorders, where clinically appropriate. We also provide related services, including customer support, installation, training and other professional services.
Current report
Financing Transaction
Current report
On July 29, 2026, we entered into a Securities Purchase Agreement (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”), which was funded on the date the parties entered into the Securities Purchase Agreement, and (ii) the conversion of $40.0 million of existing indebtedness held by such investors under the Financing Agreement (as defined below), 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.
Current report
Concurrently with entering into the Securities Purchase Agreement, we entered into Amendment No. 3 to the Financing Agreement (the “Third Amendment”). The Third Amendment 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 Amended 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) convert the revolving credit facility into an asset-based revolving credit facility. The Third Amendment also converted $15.0 million of outstanding term loans into borrowings under the asset-based revolving credit facility.
Current report
The issuance of the Series A Convertible Preferred Stock is subject to certain closing conditions, including stockholder approval, which was obtained on October 6, 2026 as described below, and the implementation of a reverse stock split of the Company’s common stock, at a ratio ranging from any whole number between 1-for-15 and 1-for-40 (the “Reverse Stock Split”), or such other ratio as may be approved by the Board, including at least one 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 the Third Amendment to the Financing Agreement, 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 an exercise price of $0.01 per share of common stock (the “July 2026 Penny Warrants”). Such warrants are exercisable for a period of 7 years after the date of issuance.
Current report
On October 6, 2026, our stockholders approved the proposals required to consummate the transactions contemplated by the Securities Purchase Agreement, including the issuance of Series A Convertible Preferred Stock thereunder, the increase in the number of authorized shares of common stock and the reverse stock split contemplated in connection with the transaction, with the related actions to become effective at closing.
Current report
We intend to implement the Reverse Stock Split to increase the per-share trading price of our common stock and assist us in regaining compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market.
Current report
Upon satisfaction of the remaining closing conditions, we expect to complete the transactions contemplated by the Securities Purchase Agreement dated July 29, 2026. At closing, we will issue 55,000 shares of Series A Convertible Preferred Stock for aggregate consideration of $55.0 million, consisting of the $15.0 million cash investment previously received on July 29, 2026 and the cancellation and extinguishment of $40.0 million of indebtedness under the Financing Agreement.
Current report
Concurrently with the closing, the previously issued Premium Warrants to purchase 21.5 million shares of common stock and Super Premium Warrants to purchase 6.1 million shares of common stock will be cancelled and extinguished. Previously issued Penny Warrants to purchase 25.0 million shares of common stock will remain outstanding.
Current report
Net revenue decreased $7.4 million during thethree months ended September 30, 2026, as compared to the same period in the prior fiscal year. The decrease in net revenue was product driven, reflecting reduced system shipment volume in our Americas and China regions, partially offset by higher service net revenues.
Current report
Research and development expenses, selling and marketing expenses, and general and administrative expenses decreased by$3.4 million,$3.0 million, and$2.3 million, respectively, during thethree months ended September 30, 2026, as compared to the same period in the prior fiscal year, primarily due to lower personnel-related costs, including share-based compensation, resulting from headcount reductions under the execution of the FY26 Restructuring Plan.
Current report
Goodwill Impairment
Current report
During the three months ended September 30, 2026, we recorded a non-cash goodwill impairment charge of $35.4 million, primarily due to an increase in the carrying amount of our reporting unit resulting from the gain on extinguishment of debt recognized in connection with the Recapitalization Transaction, without a corresponding increase in its estimated fair value. We estimated the fair value of our reporting unit using a combination of the income and market approaches, consistent with the methodologies used in prior periods. Following the impairment charge, the carrying amount of goodwill was $22.5 million as of September 30, 2026. Future decreases in the estimated fair value of our reporting unit or increases in its carrying amount could result in additional goodwill impairment charges.
Current report
Gain on Extinguishment of Debt
Current report
Gain on extinguishment of debt was $59.6 million during the three months ended September 30, 2026, resulting from the Recapitalization Transaction, which added a substantive contingent conversion feature to Term Loan B and the outstanding Delayed Draw Term Loan. The gain reflected the derecognition of unamortized debt discounts and debt offering costs and unamortized debt discounts attributable to previously issued warrants; the initial recognition of the replacement Convertible Term Loan B Facility and outstanding borrowings under the Convertible Delayed Draw Facility at their July 29, 2026 fair values; and the accounting effects of the related warrant amendments providing for cancellation upon closing.
Current report
On July 29, 2026, we entered into the Third Amendment, by and among the Company, the guarantors party thereto, the lenders party thereto and the other signatories party thereto, which provided for, among other things, the issuance of the July 2026 Penny Warrants to purchase up to 15,253,473 shares of common stock at an exercise price of $0.01 per share and converting the revolving credit facility to an asset-based revolving credit facility. Concurrently, we entered into the Securities Purchase Agreement, by and among the Company and certain existing investors party thereto, pursuant to which, subject to the satisfaction of certain closing conditions, 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, which was funded on the date the parties entered into 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. On October 6, 2026, the Company’s stockholders approved the proposals required to consummate the transactions contemplated by the Securities Purchase Agreement, including approvals related to the issuance of Series A Convertible Preferred Stock thereunder, the increase in the number of authorized shares of common stock and the reverse stock split contemplated in connection with the transaction. We believe these actions, including if the transactions contemplated by the Securities Purchase Agreement are consummated, improve our ability to satisfy our anticipated operating and debt service obligations over the next twelve 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 our business and liquidity. See Note 1, The Company and its Significant Accounting Policies – Risks and Uncertainties and Note 8, Debt, for additional information.
Current report
The aforementioned Warrants and the July 2026 Penny Warrants have certain anti-dilution protection provisions, including price protection anti-dilution protection in the event that we sell stock at a price below $1.00 in the case of the June 2025 Penny Warrants, the December 2025 Penny Warrants, the May 2026 Penny Warrants, and the July 2026 Penny Warrants; $1.25 in the case of the June 2025 Premium Warrants, $0.93 per share in the case of the December 2025 Premium Warrants and the May 2026 Premium Warrants; and $1.12 in the case of the December 2025 Super Premium Warrants and the May 2026 Super Premium Warrants. We agreed to issue the Warrants in connection with, and to induce the lenders to enter into, the Financing Agreement and amendments thereto, and issued the July 2026 Penny Warrants in connection with the Securities Purchase Agreement and the Third Amendment.
Current report
Net cash provided by financing activities was $10.3 million during the three months ended September 30, 2026, primarilydue to the $15.0 million in proceeds from the investor deposit obligation, partially offset by $3.8 million in repayments under the IEEPA participation agreement and $0.8 million of debt issuance costs.
Removed paragraphs (12)
Previous report
We are a radiation therapy company that develops, manufactures, sells and supports market-changing solutions that are designed to deliver radiation treatments for even the most complex cases, while making commonly treatable cases even more straightforward, to meet the full spectrum of patient needs. We believe in comparison to conventional linear accelerators, our treatment delivery, planning, and data management solutions provide better accuracy, flexibility, and control; fewer treatments with shorter treatment times; and the technology to expand beyond cancer, making it easier for clinical teams around the world to provide treatments that help patients get back to living their lives, faster.
Previous report
Our innovative technologies, the CyberKnife® and TomoTherapy® platforms, including the Radixact® System, our next generation TomoTherapy platform, are designed to deliver advanced treatments, including stereotactic radiosurgery (“SRS”), stereotactic body radiation therapy (“SBRT”), intensity modulated radiation therapy (“IMRT”), image-guided radiation therapy (“IGRT”), and adaptive radiation therapy (“ART”). The CyberKnife and TomoTherapy platforms have complementary clinical applications with the same goal: to empower our customers to deliver the most precise and accurate treatments while still minimizing dose to healthy tissue, helping to reduce the risk of side effects that may impact patients’ quality of life. Each of these systems serves patient populations treated by the same medical specialty, radiation oncology, with advanced capabilities. The CyberKnife platform is also used by neurosurgeons specializing in radiosurgery to treat patients with tumors in the brain and spine, and neurologic and/or endocrine disorders. In addition to these products, we also provide services which include post-contract customer support (warranty period services and post-warranty services), installation services, training, and other professional services.
Previous report
In March 2026, as part of the Company’s cost-management efforts under the Transformation Plan, the Compensation Committee of the Board of Directors approved the discontinuation of cash compensation for non-employee directors during the fourth quarter of fiscal year 2026.
Previous report
Net revenue decreased $8.4 million and$29.9 million during thethree and nine months ended March 31, 2026, as compared to the same periods in the prior fiscal year, primarily due to a lower volume of shipments to China and Asia Pacific regions, partially offset by a higher volume of shipments to the Americas region.
Previous report
Research and development expenses decreased by$2.5 million and$6.4 million during thethree and nine months ended March 31, 2026, respectively, as compared to the same periods in the prior fiscal year primarily due to a $1.9 million and $5.8 million decrease in compensation and benefit costs as part of the FY26 Restructuring Plan for thethree and nine months ended March 31, 2026, respectively, and lower spending for research and development projects in fiscal year 2026. In addition, the decrease in compensation and benefit costs expense during the nine months ended March 31, 2026, includes $2.9 million in labor costs that were capitalized for software development projects as compared to the prior year period.
Previous report
Selling and marketing expenses decreased by$0.7 million and $2.9 million duringthe three and nine months ended March 31, 2026, respectively, as compared to the same periods in the prior fiscal year, primarily due to lower compensation and benefit costs as part of the FY26 Restructuring Plan, and reduced spending on travel and trade shows in connection with ongoing cost-saving initiatives.
Previous report
General and administrative expenses increased by$0.5 million and during the three months ended March 31, 2026 as compared to the same period in the prior fiscal year primarily due to higher consulting and legal costs, partially offset by lower compensation and benefit costs as part of the FY26 Restructuring Plan. General and administrative expenses decreased by$2.1 million during the nine months ended March 31, 2026 as compared to the same periods in the prior fiscal year primarily due to $3.1 million in lower compensation and benefits costs as part of the FY26 Restructuring Plan, partially offset by higher bad debt expense.
Previous report
As of March 31, 2026, $18.0 million aggregate principal amount of the 2026 Notes remain outstanding and will be due on June 1,2026. We intend to predominately use proceeds from the Delayed Draw Facility to pay the remaining balance of the 2026 Notes. The 2026 Notes are classified as short-term debt on the consolidated balance sheets.
Previous report
On April 13, 2026, we entered into aparticipation agreement with a third-party pursuant to which we agreed to sell our claims for refunds of previously paid tariffs imposed under the IEEPA. Under the terms of the participation agreement, the third-party purchased the $9.0 million of our refund claims for $6.6 million. Additionally, on April 21, 2026, we submitted approximately $9.0 million of tariff refund claims through CBP’s Consolidated Administration and Processing of Entries portal, of which $8.9 million were reported as having an accepted submission status of the date of this Quarterly Report on Form 10-Q
Previous report
Cash Flows from Operating Activities
Previous report
Cash Flows from Investing Activities
Previous report
Net cash provided by financing activities was $3.4 million during the nine months ended March 31, 2026, due to $5.0 million of net borrowings from the Revolving Credit Facility, offset by $1.2 million in principal payments on our Term Loan Facility and 2026 Notes.
Reworded paragraphs (33)
Previous wording
The following discussion and analysis of our financial condition as of March 31, 2026, and results of operations for the three and nine months ended March 31, 2026 and 2025 should be read together with our unaudited condensed consolidated financial statements and related notes included in this report. Statements made in this Form 10-Q report that are not statements of historical fact are forward-looking statements that are subject to the“safe harbor”* provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report relate, but are not limited, to: our future results of operations and financial position, including the sufficiency of cash resources and expected cash flows to fund future operations, including the next 12 months; our expectations regarding backlog, age-ins and age-outs, cancellations of contracts and foreign currency impacts; the anticipated drivers of our future capital requirements; expectations regarding our strategy in China and our China joint venture as well as its expected impact on our business; expectations regarding the market in China for radiation oncology systems; expectations regarding the effects of the global macroeconomic conditions on our financial results and business as well as the business of our customers and suppliers; expectations regarding the impact of changes in government administration policy positions; expectations regarding delays in deliveries and installations and its impact on our business; expectations regarding inflation, supply chain challenges and heightened logistics costs and its impact on our business, including gross margins and net income (loss); expectations regarding revenue from the Americas region; expectations regarding the timing of deliveries and revenue conversion; our expectations regarding the adequacy of our manufacturing facilities; the anticipated risks associated with our foreign operations and fluctuations in the U.S. Dollar and foreign currencies as well as our ability to mitigate such risks; potential changes in tariffs export controls, trade sanctions, and other trade policies; expectations related to the effect of the GILTI tax and the One Big Beautiful Bill Act on the company; expectations related to our convertible notes and credit facilities; expectations related to our leases; the amount of unrecognized tax amounts; the sufficiency of our cash, cash equivalents and investments to meet our anticipated cash needs for working capital and capital expenditures and our business strategy, plans and objectives. Forward-looking statements generally can be identified by words such as*“anticipates,”* “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “may,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements involve risks and uncertainties. If any of these risks or uncertainties materialize, or if any of our assumptions prove incorrect, actual results …
Excerpt shortened here; the source contains the full paragraph.
Current wording
The following discussion and analysis of our financial condition as of September 30, 2026, and results of operations for the three months ended September 30, 2026 and 2025 should be read together with our unaudited condensed consolidated financial statements and related notes included in this report. Statements made in this Quarterly Report on Form 10-Q that are not statements of historical fact are forward-looking statements that are subject to the“safe harbor”* provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report relate, but are not limited, to: our future results of operations and financial position, including the sufficiency of cash resources and expected cash flows to fund future operations, including the next 12 months, and our ability to satisfy our anticipated operating and debt service obligations; our expectations regarding backlog, age-ins and age-outs, cancellations of contracts and foreign currency impacts; the anticipated drivers of our future capital requirements; the expected timing, completion, accounting treatment and anticipated benefits of the transactions contemplated by the Securities Purchase Agreement and the Third Amendment (each as defined below), including the issuance of the Series A Convertible Preferred Stock; our ability to regain and maintain compliance with Nasdaq continued listing requirements; the anticipated benefits of the Transformation Plan (as defined below); expectations regarding our strategy in China and our China joint venture as well as its expected impact on our business; expectations regarding the market in China for radiation oncology systems; expectations regarding the effects of the global macroeconomic conditions on our financial results and business as well as the business of our customers and suppliers; expectations regarding the impact of changes in government administration policy positions; expectations regarding delays in deliveries and installations and its impact on our business; expectations regarding inflation, supply chain challenges and heightened logistics costs and its impact on our business, including gross margins and net income (loss); expectations regarding revenue from the Americas region; expectations regarding the timing of deliveries and revenue conversion; our expectations regarding the adequacy of our manufacturing facilities; the anticipated risks associated with our foreign operations and fluctuations in the U.S. Dollar and foreign currencies as well as our ability to mitigate such risks; potential changes in tariffs, export controls, trade sanctions, and other trade policies; expectations related to the effect of the GILTI tax and the One Big Beautiful Bill Act on us; expectations related to our credit facilities and other indebtedness, including our ability to comply with the covenants thereunder, the availability of borrowings thereunder and the impact of changes in interest rates on our interest expense; expect…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We are subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation; actions taken to counter inflation, including high interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; the recent escalation of conflict in Iran, the Middle East and Southwest Asia, including the impact on global supply chains and oil prices, as well as other geopolitical concerns, such as the Russia-Ukraine conflict, and 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; new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries; and other factors that may emerge. We are 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.
Current wording
We are subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation; actions taken to counter inflation, including high interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; the conflicts in Iran, the Middle East and Southwest Asia, including the impact on global supply chains and oil prices, as well as other geopolitical concerns, such as the Russia-Ukraine conflict, and 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; new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries; and other factors that may emerge. We are also continuing to navigate supply chain and inflation challenges, both of which continue to be a significant headwind that affects our results of operations.
Previous wording
We expect that the business of our customers and our own business will continue to be adversely impacted, directly or indirectly, by these macroeconomic and geopolitical issues. For example, we had product shipments planned in the third quarter of fiscal year 2026 to certain customers in the Middle East, North Africa and Pakistan that have been delayed indefinitely due to geopolitical disruption in the Middle East and continued pressure in China, which is also impacting our service revenue in those regions. 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 our gross margins and net income (loss), and we 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 year 2026, and potentially longer. In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2026. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026. The extent of the ongoing impact of these macroeconomic events on our business, our markets and on global economic activity however, is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time.
Current wording
We expect that the business of our customers and our own business will continue to be adversely impacted, directly or indirectly, by these macroeconomic and geopolitical issues. For example, we had product shipments planned in the second half of fiscal year 2026 to certain customers in the Middle East, North Africa and Pakistan that have been delayed indefinitely due to geopolitical disruption in the Middle East, which is also impacting our service revenue in those regions. We also continue to experience pressure in China. 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 our gross margins and net income (loss), and we currently expect that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistics expenses through at least fiscal year 2027, and potentially longer. In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2027. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to affect us. The extent of the ongoing impact of these macroeconomic events on our business, our markets and on global economic activity, however, is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time.
Previous wording
As a global company, approximately 70% of our raw materials and product components are sourced within the U.S. and finished products are assembled and manufactured within the U.S. with over 80% exported throughout the world. There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. If existing tariffs increase, we would expect minimal shipments to China despite customer demand. We continue to work to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results have been adversely impacted in the past and may continue to be adversely impacted in the future.
Current wording
As a global company, approximately 70% of our raw materials and product components are sourced within the U.S. and finished products are assembled and manufactured within the U.S. with over 80% exported throughout the world. There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to result in incremental costs to us. If existing tariffs increase, we would expect minimal shipments to China despite customer demand. We continue to work to implement mitigations to the tariff policy impacts; however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results have been adversely impacted in the past and may continue to be adversely impacted in the future.
Previous wording
Generating revenue from the sale of our platforms is a lengthy process. Selling our platforms, from first contact with a potential customer to a signed sales contract that meets our backlog criteria (as discussed below) varies significantly and generally spans between six months and 30 months. The length of time between receipt of a signed contract and revenue recognition is generally governed by the time required by the customer to build, renovate or prepare the treatment room for installation of the platform. We report our customer revenues in five geographic regions: the Americas, EIMEA, Japan, China and Asia Pacific. The Americas region includes the United States, Canada and Latin America. The EIMEA region includes Europe, India, the Middle East and Africa. The Asia Pacific region consists of Asia (excluding Japan and China), Australia and New Zealand.
Current wording
Generating revenue from the sale of our platforms is a lengthy process. The time required to sell our platforms, from first contact with a potential customer to a signed sales contract that meets our backlog criteria (as discussed below) varies significantly and generally spans between six months and 30 months. The length of time between receipt of a signed contract and revenue recognition is generally governed by the time required by the customer to build, renovate or prepare the treatment room for installation of the platform. We report our customer revenues in five geographic regions: the Americas, EIMEA, Japan, China and Asia Pacific. The Americas region primarily includes the United States, Canada and Latin America. The EIMEA region includes Europe, India, the Middle East and Africa. The Asia Pacific region consists of Asia (excluding Japan and China), Australia and New Zealand.
Previous wording
In the United States, we primarily market directly to customers, including hospitals and stand-alone treatment facilities, through our sales organization we also market to customers through sales agents and group purchasing organizations. Outside the United States, we market to customers directly and through use of distributors and sales agents. In addition to our offices in the United States, we have international offices in Morges, Switzerland; Hong Kong, China; Shanghai, China and Tokyo, Japan and direct sales staff in most countries in Western Europe, Japan, India and Canada. In addition, we have distributors in Europe, Russia, the Middle East, Africa, the Asia Pacific region, and Latin America.
Current wording
In the United States, we primarily market directly to customers, including hospitals and stand-alone treatment facilities, through our sales organization; we also market to customers through sales agents and group purchasing organizations. Outside the United States, we market to customers directly and through use of distributors and sales agents. In addition to our offices in the United States, we have international offices in Morges, Switzerland; Hong Kong, China; Shanghai, China and Tokyo, Japan and direct sales staff in most countries in Western Europe, Japan, Korea, India and Canada. In addition, we have distributors in Europe, Russia, the Middle East, Africa, the Asia Pacific region, and Latin America.
Previous wording
There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. We continue to work to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results are expected to be adversely impacted through fiscal year 2026.
Current wording
There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to result in incremental costs to us. We continue to work to implement mitigations to the tariff policy impacts; however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results are expected to be adversely impacted through fiscal year 2027.
Previous wording
In fiscal year 2026, the Company announced a comprehensive strategic, operational, and organizational, transformation plan (the "Transformation Plan”). The Transformational Plan initiatives are designed to increase operating margins, enhance organizational responsiveness and agility, and position the Company for sustainable, profitable growth. In connection with the Transformation Plan, in December 2025, the Company announced the first phase of the Transformation Plan, which is designed to realign its organization to produce sharper accountability, tighter cost control, and faster execution. The actions taken by the Company are intended to right-size the Company’s cost structure, outsource selected non-core activities while building internal global centers of excellence, reallocate engineering resources, and better position the commercial organization to drive sales growth and enhance competitiveness. The organizational realignment element of the plan focuses on four major areas: streamlining the Company’s commercial structure, centralizing and globalizing core functions, elevating the global heads of service and product development to report directly to the CEO, and optimizing the Company's workforce and footprint. In parallel, the Company is also outsourcing selected non-core activities, rationalizing facilities, implementing programs to improve direct and indirect spend efficiency, and reallocating engineering resources to focus on high ROI programs and integration of third party solutions.
Current wording
In fiscal year 2026, the Company announced a comprehensive strategic, operational, and organizational transformation plan (the “Transformation Plan”). The Transformation Plan initiatives are designed to increase operating margins, enhance organizational responsiveness and agility, and position the Company for sustainable, profitable growth. In connection with the Transformation Plan, in December 2025, the Company announced the first phase of the Transformation Plan, which is designed to realign its organization to produce sharper accountability, tighter cost control, and faster execution. The actions taken by the Company are intended to right-size the Company’s cost structure, outsource selected non-core activities while building internal global centers of excellence, reallocate engineering resources, and better position the commercial organization to drive sales growth and enhance competitiveness. The organizational realignment element of the plan focuses on four major areas: streamlining the Company’s commercial structure, centralizing and globalizing core functions, elevating the global heads of service and product development to report directly to the CEO, and optimizing the Company's workforce and footprint. In parallel, the Company is also outsourcing selected non-core activities, rationalizing facilities, implementing programs to improve direct and indirect spend efficiency, and reallocating engineering resources to focus on high ROI programs and integration of third-party solutions.
Previous wording
The actions also included a restructuring of the Company’s workforce (the “FY26 Restructuring Plan”) that resulted in the elimination of approximately 3% of the global workforce during the three months ended September 30, 2025, and the elimination of approximately 15% of the global workforce during three months ended December 31, 2025. Certain employees notified during the three months ended December 31, 2025, have various termination dates during the quarterly periods ended March 31, 2026, and June 30, 2026. Restructuring charges also include third-party implementation and other costs that were directly tied to the execution of the FY26 Restructuring Plan, as well as asset impairments for certain capitalized assets as a result of the FY26 Restructuring Plan. Total restructuring charges during the three and nine months ended March 31, 2026, were $6.5 million and $15.4 million respectively. Restructuring charges for the FY26 Restructuring Plan are expected to be approximately $17 million in fiscal year 2026. The FY26 Restructuring Plan is expected to be substantially completed by June 30, 2026.
Current wording
The actions also included a restructuring of the Company’s workforce (the “FY26 Restructuring Plan”) that resulted in the elimination of approximately 3% of the global workforce during the three months ended September 30, 2025, and the elimination of approximately 15% of the global workforce during the three months ended December 31, 2025. Certain employees notified during the three months ended December 31, 2025, had various termination dates during the quarterly periods ended March 31, 2026, and June 30, 2026. Restructuring charges also include third-party implementation and other costs that were directly tied to the execution of the FY26 Restructuring Plan, as well as asset impairments for certain operating lease right-of-use assets and capitalized assets as a result of the FY26 Restructuring Plan. Total restructuring charges during fiscal year 2026 were $16.2 million. Total restructuring charges during the three months ended September 30, 2026, were $0.4 million. The FY26 Restructuring Plan was substantially completed by September 30, 2026.
Previous wording
Gross orders decreased by $22.6 million and $49.1 million during the three and nine months ended March 31, 2026, respectively, as compared to thesame periods in the prior fiscal year, primarily due to a decrease in orders for our TomoTherapy Systems.
Current wording
Gross orders decreased by $19.7 million during the three months ended September 30, 2026, as compared to thesame period in the prior fiscal year, primarily due to a decrease in orders for our TomoTherapy Systems.
Previous wording
Our book-to-bill ratio is defined as gross orders for the period divided by product revenue for the period. Our book-to-bill ratio was 1.0 and 1.2 for the three and nine months ended March 31, 2026, respectively, as compared to 1.2 and 1.2 for the three and nine months ended March 31, 2025, respectively. A book-to-bill ratio greater than 1.2 generally indicates strong demand for our products. This metric allows management to monitor our business development efforts to ensure we grow our backlog and our business over time. Given that book-to-bill ratio is an operational measure and that our methodology for calculating book-to-bill ratio does not meet the definition of a non-GAAP measure, as that term is defined by the Securities and Exchange Commission, a quantitative reconciliation for book-to-bill ratio is not required nor provided.
Current wording
Our book-to-bill ratio is defined as gross orders for the period divided by product revenue for the period. Our book-to-bill ratio was 0.7 for the three months ended September 30, 2026, as compared to 1.1 for the three months ended September 30, 2025. A book-to-bill ratio greater than 1.2 generally indicates strong demand for our products. This metric allows management to monitor our business development efforts to ensure we grow our backlog and our business over time. Given that book-to-bill ratio is an operational measure and that our methodology for calculating book-to-bill ratio does not meet the definition of a non-GAAP measure, as that term is defined by the Securities and Exchange Commission, a quantitative reconciliation for book-to-bill ratio is not required nor provided.
Previous wording
Net orders are defined as gross orders less cancellations, age-outs net of age-ins, foreign currency impacts and other adjustments during the period. Net orders decreased by$24.1 million and$70.8 million during thethree and nine months ended March 31, 2026, respectively, as compared to the same periods in the prior fiscal year, primarily due to a decrease in gross orders, and a decrease in age-ins.
Current wording
Net orders are defined as gross orders less cancellations, age-outs net of age-ins, foreign currency impacts and other adjustments during the period. Net orders decreased by $19.2 million during the three months ended September 30, 2026, as compared to the same period in the prior fiscal year, primarily due to a decrease in gross orders.
Previous wording
Results of Operations—** Three and Nine Months Ended March 31, 2026 and 2025**
Current wording
Results of Operations—** Three Months Ended September 30, 2026 and 2025**
Previous wording
Products net revenue decreased by$7.6 million and$35.0 million during thethree and nine months ended March 31, 2026, respectively, as compared to the same periods in the prior fiscal year, due to a lower volume of shipments.
Current wording
Products net revenue decreased by$9.8 million during thethree months ended September 30, 2026, as compared to the same period in the prior fiscal year, primarily due to a lower volume of units, predominantly within the Americas and China.
Previous wording
Services net revenue decreased by$0.8 million during the three months ended March 31, 2026, as compared to the same period in the prior fiscal year, primarily due to a $1.2 million negative impact to service revenue as a result of the Middle East conflict, partially offset by an increase in contract revenues as a result of an increase in our install base. Services net revenue increased by$5.1 million during thenine months ended March 31, 2026 as compared to the same period in the prior fiscal year, primarily due to higher contract revenues resulting from an increase in our installed base, partially offset by a decrease in demand from customers for the purchase of spare parts.
Current wording
Services net revenue increased by$2.4 million during the three months ended September 30, 2026, as compared to the same period in the prior fiscal year, primarily due to higher contract revenues resulting from both an increase in our installed base and higher contract renewal rates driven by ongoing pricing initiatives.
Previous wording
Gross profit decreased by $6.3 million and $31.6 million during the three and nine months ended March 31, 2026, respectively, as compared to the same periods in the prior fiscal year, primarily due to a decrease in product unit sales and product mix. The decrease in gross profit as a percentage of revenue during thethree and nine months ended March 31, 2026, as compared to the same periods in the prior fiscal year, was primarily due tohigher net parts consumption of $3.2 million, as well as higher than average logistics and duties costs.
Current wording
Gross profit decreased by $0.9 million during the three months ended September 30, 2026, as compared to the same period in the prior fiscal year, primarily due to a decrease in product unit sales. The increase in gross profit as a percentage of revenue during thethree months ended September 30, 2026, as compared to the same period in the prior fiscal year, was driven by a shift in revenue mix towards higher-margin service revenue.
Previous wording
Income from equity method investment, which relates to our JV, decreased by$1.9 million and$2.5 million during thethree and nine months ended March 31, 2026, respectively, as compared to the same periods in the prior fiscal year, primarily due to decrease in revenue due toless shipments from our JV to its end customers.
Current wording
Income from equity method investment, which relates to our JV, decreased by$0.3 million during thethree months ended September 30, 2026, as compared to the same period in the prior fiscal year, primarily due to a decrease in JV gross profit due to fewer shipments from our JV to its end customers.
Previous wording
Interest expense increased$5.5 million and$15.5 million during thethree and nine months ended March 31, 2026, respectively, as compared to the same periods in the prior fiscal year, primarily due toour electing of non-cash interest-paid-in-kind during the current fiscal year and higher debt issuance costs as a result of debt financing costs and additional amortization costs related to issuance of warrants.
Current wording
Interest expense increased$3.8 million during thethree months ended September 30, 2026, as compared to the same period in the prior fiscal year, primarilydue to higher paid-in-kind interest and higher debt issuance costs as a result of amendment financing costs and additional amortization costs related to the issuance of warrants.
Previous wording
Gain from change in fair value of warrant liability
Current wording
Loss from change in fair value of warrant liability
Previous wording
Our Penny Warrants are accounted for as a liability with the changes in the fair value of the warrants recognized in the statement of operations and comprehensive loss. During thethree and nine months ended March 31, 2026, we recorded a gain of$3.4 million and$7.2 million, respectively, due to a decrease in the share price of our common stock during the periods.
Current wording
Our Penny Warrants are accounted for as a liability with the changes in the fair value of the warrants recognized in the statement of operations and comprehensive income (loss). During thethree months ended September 30, 2026, we recorded a loss of$0.7 million due to an increase in the share price of our common stock during the period.
Previous wording
Other income (expense), net increased during thethree and nine months ended March 31, 2026, as compared to the same periods in the prior fiscal year, primarily due to favorable foreign currency transactions resulting from our cash flow hedging activities and a decrease in costs for hedging activities.
Current wording
Other income (expense), net increased by $0.5 million during thethree months ended September 30, 2026, as compared to the same period in the prior fiscal year, primarily dueto favorable foreign currency transactions resulting from our cash flow hedging activities.
Previous wording
At March 31, 2026, we had $38.1 million incash and cash equivalents, excluding restricted cash. Cash from operations could be affected by various risks and uncertainties, including declines in our revenue, particularly without a corresponding decrease in our expenses, the timing of payments from our customers and our expenditures, as well as but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, and the risks included in Part II, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2026. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026. Based on our cashand cash equivalents balance, available debt facilities, current business plan and revenue prospects, we believe we will have sufficient cash resources and anticipated cash flows to fund our operations for at least the next 12 months. However, we continue to critically review our liquidity and anticipated capital requirements in light of the significant uncertainty created by macroeconomic conditions.
Current wording
At September 30, 2026, we had $42.3 million incash and cash equivalents. Cash from operations could be affected by various risks and uncertainties, including declines in our revenue, particularly without a corresponding decrease in our expenses, the timing of payments from our customers and our expenditures, as well as, but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, and the risks included in Part II, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2027. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to affect us. Based on our cashand cash equivalents balance, available debt facilities, current business plan and revenue prospects, we believe we will have sufficient cash resources and anticipated cash flows to fund our operations for at least the next 12 months. However, we continue to critically review our liquidity and anticipated capital requirements in light of the significant uncertainty created by macroeconomic conditions.
Previous wording
On June 6, 2025, we entered into a senior secured credit agreement (the “Financing Agreement”) by and among the Company, as borrower (the “Borrower”), TCW Asset Management Company LLC, a leading global asset manager (“TCW”), as collateral agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and as administrative agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”, and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”), and certain other parties signatory thereto. The Financing Agreement provides for (a) $150 million of new five-year term loan facility (the “Term Loan Facility”), (b) a new $20 million delayed draw term loan facility (the “Delayed Draw Facility”) and (c) a new $20 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility and Delayed Draw Facility, the “Facilities”). The proceeds of the Delayed Draw Facility may be used to fund any future repurchases of outstanding 3.75% Convertible Senior Notes due 2026 (“2026 Notes”). In December 2025, we entered into amendments to the Financing Agreement. The first amendment to the Financing Agreement (the "First Amendment") provided for the inclusion of certain restricted cash balances in the liquidity covenant in the Financing Agreement. The second amendment to the Financing Agreement (the "Second Amendment") provided for (i) the removal of the leverage condition we must meet to draw down on the Delayed Draw Facility; (ii) the reduction of the capacity of the Delayed Draw Facility to $18.25 million; and (iii) the delay of the commencement of the requirement for us to meet the fixed charge coverage ratio and leverage ratio to December 31, 2026. In addition, we agreed to pay $2.4 million in additional fees and amounts available to be drawn under the revolving credit facility were reduced to $15.0 million through December 31, 2026.
Current wording
On June 6, 2025, we entered into a senior secured credit agreement (the “Financing Agreement”) by and among the Company, as borrower (the “Borrower”), TCW Asset Management Company LLC (“TCW”), as collateral agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and as administrative agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent,” and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”), and certain other parties signatory thereto. The Financing Agreement provides for (a) $150 million of new five-year term loan facility (the “Term Loan Facility”), (b) a new $20 million delayed draw term loan facility (the “Delayed Draw Facility”) and (c) a new $20 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility and Delayed Draw Facility, the “Facilities”). The proceeds of the Delayed Draw Facility were permitted to be used to fund repurchases of our then-outstanding 3.75% Convertible Senior Notes due 2026 (“2026 Notes”). The Facilities mature on June 6, 2030. In December 2025, we entered into amendments to the Financing Agreement. The first amendment to the Financing Agreement (the "First Amendment") provided for the inclusion of certain restricted cash balances in the liquidity covenant in the Financing Agreement. The second amendment to the Financing Agreement (the "Second Amendment") provided for (i) the removal of the leverage condition we must meet to draw down on the Delayed Draw Facility; (ii) the reduction of the capacity of the Delayed Draw Facility to $18.3 million; and (iii) the delay of the commencement of the requirement for us to meet the fixed charge coverage ratio and leverage ratio to December 31, 2026. In addition, we agreed to pay $2.4 million in additional fees and amounts available to be drawn under the Revolving Credit Facility were reduced to $15.0 million through December 31, 2026.
Previous wording
On June 6, 2025, concurrently with our entry into the Financing Agreement, we issued detachable warrants to purchase our common stock to certain of our lenders (the “Warrant Holders”) under the Financing Agreement. The Warrant Holders were issued warrants to purchase (i) 17,180,710 shares of common stock with an exercise price of $1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 (the “June 2025 Premium Warrants”) and (ii) 6,247,531 shares of common stock with an exercise price of $0.01 per share, which are exercisable immediately and expire June 6, 2032 (the “June 2025 Penny Warrants” and together with the June 2025 Premium Warrants, the “ June 2025 Warrants”). On December 15, 2025, concurrently with our entry into the Second Amendment, we issued detachable warrants to purchase our common stock to the Warrant Holders under the Amended Financing Agreement. 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, 2026 and expiring on December 15, 2032 (the “December 2025 Super Premium Warrants”), (ii) 2,187,661 shares of common stock with an exercise price of $1.25 per share, exercisable on andafter June 16, 2026 and expiring on December 15, 2032 (the “December 2025 Premium Warrants”), and (iii)1,750,129 shares of common stock with an exercise price of $0.01 per share, which areexercisable immediately and expire on December 15, 2032 ( the "December 2025 Penny Warrants" and together with the December 2025 Premium Warrants and December 2025 Super Premium Warrants, the "December 2025 Warrants"). Pursuant to the terms of the Amended Financing Agreement if the Company uses the Delayed Draw Facility, the Company will be obligated to issue additional detachable warrants on terms substantially similar to the December 2025 Warrants to certain of its lenders under the Amended Financing Agreement. As of March 31, 2026, no warrants have been exercised.
Current wording
On June 6, 2025, concurrently with our entry into the Financing Agreement, we issued detachable warrants to purchase our common stock to certain of our lenders (the “Warrant Holders”) under the Financing Agreement. The Warrant Holders were issued warrants to purchase (i) 17,180,710 shares of common stock with an exercise price of $1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 (the “June 2025 Premium Warrants”) and (ii) 6,247,531 shares of common stock with an exercise price of $0.01 per share, which are exercisable immediately and expire June 6, 2032 (the “June 2025 Penny Warrants” and together with the June 2025 Premium Warrants, the “June 2025 Warrants”). On December 15, 2025, concurrently with our entry into the Second Amendment, we issued detachable warrants to purchase our common stock to the Warrant Holders under the Financing Agreement. 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, 2026 and expiring on December 15, 2032 (the “December 2025 Super 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, 2026 and expiring on December 15, 2032 (the “December 2025 Premium 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 2025 Penny Warrants” and together with the December 2025 Premium Warrants and December 2025 Super Premium Warrants, the "December 2025 Warrants"). Pursuant to the terms of the Financing Agreement, as amended, we were obligated to issue additional detachable warrants to the Warrant Holders upon drawing on the Delayed Draw Facility, which we did in May 2026, as described below. As of September 30, 2026, no warrants have been exercised.
Previous wording
Interest on the borrowings under the Facilities is payable in arrears on the applicable interest payment date at an interest rate equal to, at the Company’s option, either: (i) a term SOFR-based rate (subject to a 2.00%per annum floor), plus an applicable margin of 8.50%, per annum* or (ii) a base rate (subject to a 3.00%per annum floor), plus an applicable margin of 7.50% per annum.The agreement provides the option for payment-in-kind (“PIK”) interest up to 6.00% *per annum (subject to an increase in applicable margin of 1/3 of 1.00% per annum for each 1.00% per annum of interest elected to be paid in kind), which PIK interest will be capitalized on the applicable interest payment date and will be added to the then-outstanding principal amount of the term loan. In June 2025, we accrued $0.6 million in PIK interest and we elected the maximum PIK option for the first interest payment date of fiscal year 2026. The Financing Agreement requires the Borrower to pay the lenders with commitments under the Revolving Credit Facility an unused commitment fee equal to 0.50% per annum of the average unused portion of the Revolving Credit Facility. See Note 7.Commitments and Contingenciesof our Annual Report on Form 10-K filed with the SEC on August 28, 2025 for future cash payments related to the Term Loan Facility.
Current wording
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 (“PIK”) interest up to 6.00% per annum (subject to an increase in applicable margin of 1/3 of 1.00% per annum for each 1.00% per annum of interest elected to be paid in kind), which PIK interest will be capitalized on the applicable interest payment date and will be added to the then-outstanding principal amount of the Term Loan Facility or Delayed Draw Facility, as applicable. The Financing Agreement requires the Borrower to pay the lenders with commitments under the Revolving Credit Facility an unused commitment fee equal to 0.50% per annum of the average unused portion of the Revolving Credit Facility. See Note 8. Commitments and Contingencies of our Annual Report on Form 10-K filed with the SEC on August 27, 2026, for future cash payments related to the Term Loan Facility.
Previous wording
Additionally, the undistributed earnings of our foreign subsidiaries as of March 31, 2026, for all countries except Japan, France, Switzerland, Germany and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise. Future repatriation of our foreign earnings could be subject to income taxes. As of March 31, 2026, we had $8.8 million of cash and cash equivalents at our foreign subsidiaries. If such funds were repatriated, there will be additional foreign tax withholdings imposed depending on the country from which the funds were repatriated.
Current wording
Additionally, the undistributed earnings of our foreign subsidiaries as of September 30, 2026, for all countries except Japan, France, Switzerland, Germany and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise. Future repatriation of our foreign earnings could be subject to income taxes. As of September 30, 2026, we had $10.2 million ofcash and cash equivalents at our foreign subsidiaries. If such funds were repatriated, there may be additional foreign tax withholdings imposed depending on the country from which the funds were repatriated.
Previous wording
Our cash flows for the nine months ended March 31, 2026 and 2025 are summarized as follows (in thousands):
Current wording
Our cash flows for the three months ended September 30, 2026 and 2025 are summarized as follows (in thousands):
Previous wording
Net cash used in operating activities during the nine months ended March 31, 2026, was due to a net loss of $47.3 million, offset by $20.6 million from non-cash items and $17.2 million from the net changes of assets and liabilities.
Current wording
Net cash used in operating activities during the three months ended September 30, 2026 was $3.8 million due to net income of $10.1 million, more than offset by $12.4 million from non-cash items and $1.5 million from the net changes of assets and liabilities.
Previous wording
Net cash used in investing activities was $10.9 million during the nine months ended March 31, 2026, due to spending $5.4 million for the purchase of property and equipment and $5.5 million for capitalized investments for software to be sold.
Current wording
Net cash used in investing activities was $5.0 million during the three months ended September 30, 2026, due to spending $4.9 million for capitalized investments for software to be sold, and $0.1 million for the purchase of property and equipment.
Previous wording
We believe that our current cash and cash equivalents balance will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months. If these sources of cash and cash equivalents are insufficient to satisfy our liquidity requirements, or we believe market conditions are favorable, we may seek to sell additional equity or debt securities or enter into additional credit facilities. The sale of additional equity or convertible debt securities could result in dilution to our stockholders. If additional funds are raised through the issuance of debt securities, these securities could have rights senior to those associated with our common stock and could contain covenants that would restrict our operations. Additional financing may not be available at all, or in amounts or on terms acceptable to us. If we are unable to obtain this additional financing, we may be required to reduce the scope of our planned product development and marketing efforts.
Current wording
While we believe that based on our cash and cash equivalents balance, available debt facilities, current business plan and revenue prospects, we will have sufficient cash resources and anticipated cash flows to meet our anticipated cash needs for at least the next twelve months, the timing and amount of our working capital and capital expenditure requirements may vary significantly depending on numerous factors, including the risk factors described in Part II, Item 1A, “Risk Factors.” If these sources of cash and cash equivalents are insufficient to satisfy our liquidity requirements, or we believe market conditions are favorable, we may seek to sell additional equity or debt securities or enter into additional credit facilities. The sale of additional equity or convertible debt securities could result in dilution to our stockholders. If additional funds are raised through the issuance of debt securities, these securities could have rights senior to those associated with our common stock and could contain covenants that would restrict our operations. Additional financing may not be available at all, or in amounts or on terms acceptable to us. If we are unable to obtain this additional financing, we may be required to reduce the scope of our planned product development and marketing efforts.
Previous wording
We presented our contractual obligations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. Our contractual obligations consist of debt, operating leases, purchase commitments, and other contractual obligations. There have been no material changes to these obligations outside the ordinary course of business during the nine months ended March 31, 2026 as compared to the contractual obligations disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended June 30, 2025.
Current wording
We presented our contractual obligations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026. Our contractual obligations consist of debt, operating leases, purchase commitments, and other contractual obligations. There have been no material changes to these obligations outside the ordinary course of business during the three months ended September 30, 2026 as compared to the contractual obligations disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended June 30, 2026.
Previous wording
In recent years, we experienced rising costs for certain materials, including increased logistics and duties costs that adversely affected our gross margins and net income (loss), and had a material effect on our business, financial condition and results of operations. Gross margins and net income (loss) may continue to be adversely affected by increased material costs and freight and logistics expenses through at least fiscal year 2026, as we are unable to pass all of these increased costs to our customers. In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2026. Continued pressure from inflationary factors, such as further increases in the cost of materials for our products, cost of labor, interest rates, overhead costs, logistics and duties costs could further exacerbate these effects and harm our business, operating results, and financial condition.
Current wording
In recent years, we experienced rising costs for certain materials, including increased logistics and duties costs that adversely affected our gross margins and net income (loss), and had a material effect on our business, financial condition and results of operations. Gross margins and net income (loss) may continue to be adversely affected by increased material costs and freight and logistics expenses through at least fiscal year 2027, and potentially longer, as we are unable to pass all of these increased costs to our customers. In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2027. Continued pressure from inflationary factors, such as further increases in the cost of materials for our products, cost of labor, interest rates, overhead costs, logistics and duties costs could further exacerbate these effects and harm our business, operating results, and financial condition.
Previous wording
During the nine months ended March 31, 2026, there were no material changes to the critical accounting policies and estimates, previously disclosed in Part II, Item 7, of our Annual Report on Form 10-K filed with the SEC on August 28, 2025, as amended by the Company’s Annual Report on Form 10-K/A filed with the SEC on February 17, 2026.
Current wording
During the three months ended September 30, 2026, there were no material changes to the critical accounting policies and estimates, previously disclosed in Part II, Item 7, of our Annual Report on Form 10-K filed with the SEC on August 27, 2026.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
On May 18, 2026, in connection with drawing upon the Delayed Draw Facility, we issued detachable warrants to purchase our common stock to the Warrant Holders, which comprised of 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, 2026 and expiring on May 18, 2033 (the “May 2026 Super Premium Warrants”), (ii) 2,135,721 shares of common stock with an exercise price of $1.25 per share, exercisable on and after November 19, 2026 and expiring on May 18, 2033 (the “May 2026 Premium 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 2026 Penny Warrants” and together with the May 2026 Super Premium Warrants, the May 2026 Premium Warrants, the June 2025 Warrants and the December 2025 Warrants, the “Warrants”).
Current report — wording carried from elsewhere
Cash Flows Used in Operating Activities
Current report — wording carried from elsewhere
Cash Flows Used in Investing Activities