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

The unaudited condensed 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 unaudited condensed 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”). Certain information and note disclosures have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the periods presented. The results for thethree months ended* September 30, 2026*, arenot necessarily indicative of the results to be expected for the fiscal year ending* June 30, 2027*, or for any other future interim period or fiscal year.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the fiscal year ended* June 30, 2026,included in the Company’s Annual Report on Form10*-K filed with the SEC on* August 27, 2026.*

Reclassifications

Certain amounts reported in prior periods have been reclassified to conform to the current period presentation. These reclassifications include the presentation of certain operating expenses associated with the fiscal year2026 restructuring plan within restructuring charges. The reclassifications hadno effect on previously reported results of operations, financial position, cash flows, or earnings per share.

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.

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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 the Company expects this will continue to affect its net revenue. The extent of the ongoing impact of these macroeconomic events on the Company’s business, its 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 Rule5450(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, and its common stock continues to trade on Nasdaq under the symbol “ARAY”. Nasdaq has 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 1, 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 on or before 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 intends to implement a reverse stock split to increase the per-share trading price of its common stock and assist the Company in regaining compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market. On October 6, 2026,the reverse stock split was approved by the Company's stockholders. As of the filing date of this Quarterly Report on Form10*-Q, the reverse stock split hasnot been effected.

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 from the date of issuance of these unaudited condensed consolidated financial statements. 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 Amended Financing Agreement (as defined in Note8. Debt), including financial covenants regarding the consolidated fixed charge coverage ratio, consolidated leverage ratio and minimum liquidity requirements.

Failing to comply with the covenants in 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 Amended 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 isno guarantee that the Company would be able to satisfy its obligations if any of its indebtedness is accelerated.

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Use of Estimates

The preparation of unaudited condensed 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.

Significant Accounting Policies

There have beenno material changes in the Company’s significant accounting policies during thethree months ended* September 30, 2026*, compared to the significant accounting policies described in its Annual Report on Form10-K for the fiscal year ended* June 30, 2026*, filed with the SEC on* August 27, 2026.*

Recent Accounting Pronouncements

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.

Note2. Revenue

Contract Balances

The timing of revenue recognition, billings, and cash collections results in trade receivables, unbilled receivables, and deferred revenues on the unaudited condensed 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 liabilities are as follows (dollars in thousands):

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During thethree months ended* September 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 thethree months ended* September 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 thethree months ended* September 30, 2026*, the Company recognized revenue of$30.0 million, whichwas included in the deferred revenue balances as of* June 30, 2026*. During thethree months ended* September 30, 2025*, the Company recognized revenue of $28.0 million, which was included in the deferred revenue balances as of* June 30, 2025*.

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* September 30, 2026*, total remaining performance obligations amounted to$55.9 million. Of this total amount,$46.9 million is related to performance obligations for warranties, which is the estimated revenue expected to be recognized over the warranty period for systems that have been delivered (the time bands reflect management’s best estimate of the period when the Company will transfer control to the customer and* 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* September 30, 2026* (in thousands):

The Company expects to recognize as revenue the significant majority of the additional$9.0 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* September 30, 2026* and* June 30, 2026*, the balance of capitalized costs to obtain a contract was$3.9 million and$4.6 million, respectively. The Company has classified the capitalized costs to obtain a contract as a component of prepaid expenses and other current assets and other assets with respect to the current and non-current portions of capitalized costs, respectively, on the unaudited condensed consolidated balance sheets.

Amounts related to capitalized costs to obtain a contract consisted of the following (in thousands):

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Note3. Supplemental Financial Information

Balance Sheet Components

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 accounts receivable, net, and other assets on the unaudited condensed 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. 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 of the allowance for credit losses related to its financing receivables.

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

Inventories, net

Inventories consisted of the following (in thousands):

The Company's inventories on the unaudited condensed consolidated balance sheets are net of reserves.

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Prepaid and Other Current Assets

Prepaid and other current assets consisted of the following (in thousands):

Duty drawback receivables are amounts due from U.S. Customs and Border Protection under Section301 and other customs programs. These amounts represent refunds of duties previously paid and are recorded when recovery is considered probable and estimable. These receivable amounts donot include any future refund related to previously paid tariffs under the International Emergency Economic Powers Act (“IEEPA”). Debt financing costs are related to the delayed draw term loan facility and the short-term financing costs related to the revolving credit facility included in the Financing Agreement (see Note8. Debt, for more information).

As of* June 30, 2026,the Company had recorded an IEEPA refund receivable of $3.8 million. During the quarter ended September 30, 2026*, the remaining refund claims were collected and remitted to thethird-party purchaser of the refund rights. Accordingly, no IEEPA refund receivable was outstanding as of* September 30, 2026.*

Property and equipment, net

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

Depreciation expense related to property and equipment was $1.6 million and $1.7 million during thethree months ended* September 30, 2026and2025*, respectively.

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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 the reporting unit 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, 2026quantitative 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 year ended June 30, 2026.*

During thethree months ended* September 30, 2026,the Company performed an interim goodwill impairment test due to a significant increase in the carrying amount of its reporting unit resulting from the gain on extinguishment of debt recognized in connection with the Third Amendment and Securities Purchase Agreement. The increase in the carrying amount of the reporting unit wasnot* accompanied by a corresponding increase in its estimated fair value. As a result, the carrying amount of the reporting unit exceeded its estimated fair value, and the Company recognized a non-cash goodwill impairment charge of $35.4 million during thethree months ended* September 30, 2026.*

The Company estimated the fair value of its reporting unit using a combination of the income and market approaches, consistent with the methodologies used in prior periods.

Following recognition of the impairment charge, the carrying amount of goodwill was $22.5 million as of* September 30, 2026.*Subsequent decreases in the estimated fair value of the reporting unit or increases in its carrying amount could result in additional goodwill impairment charges in future periods.

Other Assets

Other assets consisted of the following (in thousands):

Amortization expense for capitalized software costs to be sold was$0.4 million during thethree months ended* September 30, 2026*, and there wasno amortization expense for capitalized software costs to be sold during thethree months ended* September 30, 2025*. Amortization expense is recorded in cost of revenue in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss). There wereno amounts written down to net realizable value for the capitalized software costs to be sold during thethree months ended* September 30, 2026and2025*. The Company didnot identify any triggering events that would indicate a potential impairment of its definite-lived intangible and long-lived assets as of* September 30, 2026*.

Debt financing costs are primarily related to the Securities Purchase Agreement, dated* July 29, 2026,by and among the Company and certain investors of the Company (the “Securities Purchase Agreement”), including the July 2026Penny Warrants issued, that were recorded in Other Assets as of September 30, 2026until the Securities Purchase Agreement is effective upon closing, as well as related to converting the Revolving Credit Facility to an Asset-Based Revolving Credit Facility as executed in the Third Amendment (see Note8.* *Debt,*for more information).

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Other Accrued Liabilities

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

As of* June 30, 2026,the Company had recorded a payable to the purchaser of IEEPA refund rights of $3.8 million related to estimated refund claimsnot* yet received. During the quarter ended* September 30, 2026*, the remaining refund claims were collected and remitted to thethird-party purchaser of the refund rights. Accordingly, no IEEPA refund receivable was outstanding as of* September 30, 2026.*

Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss are excluded from earnings and reported as a component of stockholders’ equity. The unrealized gains or losses on cash flow hedge instruments result from changes in the Company’s cash flow hedging arrangements. The cumulative foreign currency translation adjustment results from those subsidiariesnot using the U.S. Dollar as their functional currency since the majority of their economic activities are primarily denominated in their applicable local currency. Accordingly, all assets and liabilities related to these operations are translated to the U.S. Dollar at the current exchange rates at the end of each period. Revenues and expenses are translated at average exchange rates in effect during the period.

The components of accumulated other comprehensive loss in the stockholders' equity section of the Company’s unaudited condensed consolidated balance sheets are as follows (in thousands):

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Statements of Operations

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 liabilities consisted of the following (in thousands):

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

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

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Note5. Derivative Financial Instruments

The Company measures all derivatives at fair value on the unaudited condensed 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* September 30, 2026*, and* June 30, 2026*, 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 unaudited condensed 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.

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* September 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 unaudited condensed 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):

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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 unaudited condensed 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 thethree months ended* September 30, 2026*, the gains and losses recognized due to the de-designation of cash flow hedge contracts werenot significant. As of* September 30, 2026*, the amount that will be reclassified from accumulated other comprehensive loss to earnings within the nexttwelve months is$0.9 million. As of* September 30, 2026*, outstanding cash flow hedges will mature within the next eighteen months.

Balance Sheet Hedging Arrangements

The Company uses foreign currency forward contracts designated as balance sheet hedges with approved financial institutions to manage its exposure to fluctuations in foreign currency exchange rates on certain intercompany balances and foreign currency denominated cash, customer receivables and liabilities. These balance sheet hedging arrangements arenot designated as hedging instruments for accounting purposes. The periods of these balance sheet hedges range up to approximately three months and the notional amounts are intended to be consistent with changes in the underlying exposures.

The notional amount of the Company's outstanding balance sheet hedge contracts consisted of the following (in thousands):

Gains or losses on derivative financial instruments

Gains and losses on the Company's balance sheet and cash flow hedges are recorded in other income (expense), net, on the Company's unaudited condensed consolidated statements of operations and comprehensive income (loss). The following table provides information about the gain or loss associated with the Company’s derivative financial instruments (in thousands):

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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:

Items Measured at Fair Value on a Recurring Basis

Warrant Liabilities

The Penny Warrants (as defined in Note10) are accounted for as a liability with the changes in fair value of the warrants recognized in the statement 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 hedgesare measured on a recurring basis using Level2 based upon observable inputs. The fair value of the Company's cash flow hedges was $0.9 million and $1.6 million as of* September 30, 2026* and* June 30, 2026,respectively. As of September 30, 2026* and * June 30, 2026*, the fair value of the Company's foreign currency forward contracts designated as balance sheet hedges werenot material.

The fair value of the Company's convertible debt resulting from the* July 29, 2026Recapitalization Transaction is classified in the level2* hierarchy. See Note8. Debtfor further details.

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Note7. Commitments and Contingencies

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 there is a reasonable possibility that a loss exceeding amounts already recognized* maybe incurred and the amount of such additional loss would be material, the Company 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.

Indemnities

Under the terms of the Company’s software license agreements with its customers, the Company agrees that in the event the software sold infringes upon any patent, copyright, trademark, or any other proprietary right of athird-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 all of its software license agreements and selected managed services arrangements. 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 or service 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* September 30, 2026*.

The Company enters into standard indemnification agreements with its landlords and all superior mortgagees 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 anythird-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* September 30, 2026*.

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Guarantees

As of* September 30, 2026*, and* June 30, 2026*, the Company had various bank guarantees totaling $1.9 million in both periods, primarily related to bidding processes with customers.

Royalty Agreement

The Company enters into software license agreements withthird parties that require royalty payments for each license used. In connection with such agreements, the Company records royalty costs in cost of revenue or deferred cost of revenue. The Company had approximately $3.2 million and $3.3 million in accrued royalty payments as of* September 30, 2026*, and* June 30, 2026*, respectively, related to royalty agreements. 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,had 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):

The restructuring activities associated with theFY26 Restructuring Plan were substantially completed as of* September* 30, 2026.

Recapitalization Transaction- Investor Deposit and Closing Contingencies

On* July 29, 2026,the Company entered into the Securities Purchase Agreement (as defined below), pursuant to which the Company agreed to sell 55,000 shares of the Company’s Series A Convertible Preferred Stock for an aggregate purchase price of $55.0 million. The aggregate purchase price will be paid in the form of (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 under the Financing Agreement (See Note8.* Debt, for more information). Issuance of the Series A Convertible Preferred Stock is subject to applicable closing conditions, including requisite stockholder approvals relating to the issuance of the securities contemplated by the Securities Purchase Agreement and approval and implementation of the reverse stock split.

If the Securities Purchase Agreement doesnot close and is terminated in accordance with its terms, the $15.0 million cash investment becomes a secured obligation under the Amended Financing Agreement, together with an additional $15.0 million non-approval fee, resulting in an aggregate contingent secured obligation of $30.0 million. As of* September 30, 2026,management assessed the likelihood of the conditions that would trigger the non-approval fee, including failure to obtain the requisite stockholder approvals. Based on that assessment, management concluded that the accounting effect attributable to the contingent fee was immaterial, andno* material amount was recognized for the non-approval fee.

On* October 6, 2026,stockholders approved the requisite transaction proposals, including the issuance of the securities contemplated by the Securities Purchase Agreement, the increase in authorized common shares, and the reverse stock split. Such stockholder approval didnot,* by itself, constitute completion of the transaction. The closing remains subject to (i) implementation and effectiveness of the reverse stock split, (ii) filing of the Certificate of Designations, (iii) exchange of the required closing deliverables and (iv) satisfaction of other customary closing conditions.

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Note8. Debt

The Company's net carrying value of outstanding debt as of* September 30, 2026*, and* June 30, 2026*, 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 (“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). 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") provided 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 millionin 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.

Recapitalization Transaction

On* July 29, 2026,the Company entered into AmendmentNo.* 3 to the Financing Agreement (the “Third Amendment” and together with the Financing Agreement, the First Amendment and the Second Amendment, the "Amended Financing Agreement") and concurrently, entered into the Securities Purchase Agreement (collectively, the “Recapitalization Transaction”) with certain existing investors as described below. The Third Amendment modified the Company’s existing debt arrangements, including converting the Revolving Credit Facility to an asset-based revolving credit facility (the “Asset-Based Revolving Credit Facility”), modifying certain financial covenants, including minimum liquidity requirements, and providing a covenant holiday through* December 31, 2027with respect to certain financial covenants. The Third Amendment converted$15.0* million of the existing Term Loan A (as defined in the Financing Agreement) principal into an Asset-Based Revolving Credit Facility with the same lender and increased the revolving credit commitment from $15.0 million to $30.0 million. The Company accounted for this change as a separate unit of account and as a debt modification under ASC470-50, Debt-Modification and Extinguishments,withno gain or loss recognized. The Third Amendment also provides for an additional $5.0 million delayed draw term loan commitment, subject to specified conditions.

The Securities Purchase Agreement entered into on* July 29, 2026provides for the issuance of $55.0 million of Series A Convertible Preferred Stock paid in the form of (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 under the Financing Agreement. If the Securities Purchase Agreement doesnot* close and is terminated in accordance with its terms, the $15.0 million cash investment becomes a secured obligation under the Financing Agreement, together with an additional $15.0 million non-approval fee, resulting in an aggregate contingent secured obligation of $30.0 million. In connection with entering into the Securities Purchase Agreement on* July 29, 2026,the Company issued the July 2026Penny Warrants (as defined below) to the investors party thereto. The Securities Purchase Agreement provides that, upon closing, the previously issued and outstanding June 2025Premium Warrants, December 2025Premium Warrants, December 2025Super Premium Warrants, May 2026Premium Warrants and May 2026Super Premium Warrants (each as defined below) will automatically be cancelled and extinguished. As of September 30, 2026,*the issuance of the Series A Convertible Preferred Stock, the conversion of the $40.0 million of existing indebtedness into Series A Convertible Preferred Stock, and cancellation of the amended Premium and Super Premium Warrants remained subject to the applicable closing conditions, including implementation of the reverse stock split.

The Company concluded that the Recapitalization Transaction added a substantive contingent conversion feature to Term Loan B (as defined in the Financing Agreement) and the outstanding Delayed Draw Term Loan and, accordingly, accounted for the changes as an extinguishment of the existing debt on* July 29, 2026under ASC470*-50. The Company recognized a gain on extinguishment of $59.6 million, presented separately in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The gain reflected the derecognition of the existing Term Loan B and outstanding Delayed Draw Term Loan, including the write-off of $9.3 million of unamortized debt discounts and debt offering costs and $22.0 million of 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.

The Company also recorded the fair value of the obligation associated with the*$15.0* million cash investment received in exchange for its contingent obligation to issue15,000 shares of Series A Convertible Preferred Stock at a purchase price of $1,000 per share and with a liquidation preference based on the accreted value or the as-converted to common stock value (the "Convertible Investor Deposit Obligation"). If the Securities Purchase Agreement doesnot close and is terminated in accordance with its terms, the*$15.0* million cash investment becomes a secured obligation under the Amended Financing Agreement, together with an additional*$15.0* million non-approval fee, resulting in an aggregate contingent secured obligation of*$30.0* million. As of* September 30, 2026,management assessed the likelihood of the conditions that would trigger the non-approval fee, including failure to obtain the requisite stockholder approvals. Based on that assessment, management concluded that the accounting effect attributable to the contingent fee was immaterial, andno* material amount was recognized for the fee. The fair value adjustment associated with the Convertible Investor Deposit Obligation was also included in the gain on extinguishment of debt calculation.

The fair values of the Convertible Term Loan B Facility, Convertible Delayed Draw Facility and Convertible Investor Deposit Obligation at* July 29, 2026were $54.3 million, $7.9 million and $8.0 million, respectively, which approximates their fair values as of September 30, 2026.*

On* October 6, 2026,*the Company’s stockholders approved the proposals required to consummate the transactions contemplated by the Securities Purchase Agreement, including the issuance of the Series A Convertible Preferred Stock, 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.

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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 above, on* July 29, 2026,*the Company entered into the Third Amendment, pursuant to which the lenders waived such default and modified certain financial covenants, including the minimum liquidity requirement.

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.

In connection with entering into the Financing Agreement, the Second Amendment, the Third Amendment as well as upon drawing upon the Delayed Draw Facility, the Company issued detachable warrants to purchase the Company’s common stock to certain of its lenders under the Amended Financing Agreement.

The Company was in compliance with its covenants and other requirements of the Amended Financing Agreement as of* September 30, 2026*.

Warrants

On* June 6, 2025,concurrently with its entry into the Financing Agreement, the Company issued detachable warrants to purchase the Company’s common stock to certain of its lenders (the “Warrant Holders”) under the Financing Agreement. The Warrant Holders were issued warrants to purchase (i)17,180,710 shares of common stock with an exercise price of $1.68 per share, exercisable on and after December 7, 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, which are exercisable immediatelyand expire June 6, 2032*(the* “June 2025*Penny Warrants”).

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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 andafter June 16, 2026and expiring on December15,* 2**032 (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 immediatelyand 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 Facility 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.” At the issuance date, the May 2026Super Premium Warrants and May 2026*Premium Warrants were valued at $0.7 million in aggregate.

On* July 29, 2026,in connection with entering into the Recapitalization Transaction, the Company issued to investors party to the Securities Purchase Agreement warrants (the “July 2026Penny Warrants”) to purchase up to an aggregate of 15,253,473 shares of common stock, at an exercise price of $0.01 per share of common stock. The warrants are exercisable for a period of7* years after the date of issuance. The Securities Purchase Agreement provides that, upon closing, the previously issued and outstanding* June 2025Premium Warrants, December 2025Premium Warrants, December 2025Super Premium Warrants, May 2026Premium Warrants and May 2026*Super Premium Warrants will automatically be cancelled and extinguished.

On* October 6, 2026,the Company’s 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. The transaction hasnot* closed, and the cancellation of the* June 2025Premium Warrants, the December 2025Premium Warrants and the December 2025Super Premium Warrants hasnot* occurred.

As of* September 30, 2026*,no warrants have been exercised.

Note9. Stock Incentive Plans

The following table presents details of share-based compensation expenses, by functional line item, noted within the Company's unaudited condensed consolidated statements of operations and comprehensive income (loss) (in thousands):

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* 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.

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Note10. Net Income (Loss) Per Common Share

Basic earnings per share is computed based on the weighted average number of shares of common stock and Penny Warrants (as defined below) 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. Diluted 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 potentially dilutive securities would be anti-dilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per common share is as follows (in thousands, except for per share amounts):

Warrants Issued in Connection with the Long-term Debt

The Company has issued warrants to the lenders of itslong-term debt (See Note8. Debt, for more information). 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. The* June 2025Penny Warrants, December 2025Penny Warrants, May 2026Penny Warrants, and July**2026* Penny Warrants (collectively, the "Penny Warrants") are considered shares issuable for little orno cash consideration upon the satisfaction of certain conditions and are considered outstanding common shares to be included in the computation of basic and diluted earnings per share. Approximately 20.3 million Penny Warrant shares are included in the weighted average shares to calculate basic and diluted earnings per share during thethree months ended* September 30, 2026*. As of* September 30, 2026*, no warrants have been exercised.

Note11. Segment Information

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 in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Significant segment expenses regularly provided to the CODM are consolidated research and development expenses, selling 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.

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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. Revenues attributed to a country or region are based on the shipping address of the Company’s customers. Additionally, the Company typically recognizes revenue at a point in time for product revenue and recognizes revenue over time for service revenue.

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.

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

Disaggregation of Long-Lived Assets

Information regarding geographic areas in which the Company has long-lived assets, which consist 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* September 30, 2026*, and* June 30, 2026*.

Note12. 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 September 30, 2026*, the Company owned a 49% interest in the JV, which is reported as an investment in joint venture on the Company’s unaudited condensed 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 begun to manufacture and sell a locally branded “Made in China” radiotherapy device, the Tomo C radiation therapy system, in the Class B license category. The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems, including the Radixact SynC and 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* September 30, 2026*, and* June 30, 2026*, 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$0.6 million and$0.3 million, respectively. In* June 2026,the JV declared a $1.4 million dividend to the Company which was paid in July 2026.There wereno dividends declared as of September 30, 2026*.

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

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The following table shows the activity of the Company’s net revenue recognized from intra-entity gross profit from sales (in thousands):

Note13. Income Tax

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

On a quarterly basis, the Company provides for income taxes based upon an estimated annual effective income tax rate. The Company's income tax expense during thethree months ended* September 30, 2026and2025*, wasprimarily related to foreign taxes.

In connection with the* July 2026debt recapitalization, the Company recognized a gain on debt extinguishment for financial reporting purposes that mayresult in differences between the book and tax basis of the debt. These differences could give rise to deferred tax liabilities. The Company maintains a full valuation allowance against its U.S. deferred tax assets, and any resulting deferred tax liabilities could affect income tax expense depending on the availability of tax attributes and applicable limitations under Section382* of the Internal Revenue Code.

On* July 4, 2025,new federal tax legislation was enacted, introducing significant changes to U.S. corporate income tax law. Key provisions include the optional expensing of domestic research and development costs under Section174,* modifications to business interest deductions under Section163(j), and changes to international tax rules such as GILTI. Some provisions are effective retroactively to* January 1, 2025,while others phase in through2027.* Due to the full valuation allowance maintained against the Company’s U.S. deferred tax assets, the enactment of this legislation didnot have a material impact on the Company’s income tax provision for the quarter ended* September 30, 2026*. Any required updates to deferred tax balances or related disclosures will be reflected in the Company’s annual financial statements, as applicable. At* June 30, 2026,the Company’s gross unrecognized tax benefits were $22.8 million, of which $21.8 million wouldnot* affect income tax expense before consideration of any valuation allowance. The Company doesnot expect its unrecognized tax benefits to change significantly during fiscal year2027. Interest and penalties accrued on unrecognized tax benefits are recorded as a component of income tax expense.

Note14. 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.

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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 (“PRSAs”) 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.

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 vested on October 31, 2026.*

The Company recorded $0.1 million for consulting fees and the incentive target bonus for services provided by Dedication Capital and Mr. Mayer during thethree months ended* September 30, 2026*. The Company recorded $0.3 million in stock compensation expense during thethree months ended* September 30, 2026*, for the RSAs and PRSAs. The Company includes the consulting fees and incentive target bonus paid or payable to Dedication Capital and 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.

• Financing Agreement*

TCW (as defined in Note8) is considered a related party due to its beneficial ownership of more than 5% of the Company's outstanding common stock. The Company is party to a Financing Agreement with TCW, acting as collateral agent and administrative agent for the lenders. See Note8, Debt, for additional information regarding the Financing Agreement and related amendments. Affiliates of TCW are also investors party to the Securities Purchase Agreement and, on* July 29, 2026,received July 2026*Penny Warrants to purchase 15,253,473 shares of common stock. Affiliates of TCW funded the full $15.0 million cash investment and hold the full $40.0 million of indebtedness to be exchanged for Series A Convertible Preferred Stock.

** Note15. Subsequent Events**

On* October 6, 2026,the Company’s stockholders approved the proposals required to consummate the transactions contemplated by the Securities Purchase Agreement, including the issuance of securities thereunder, the increase in the number of authorized shares of common stock, and the reverse stock split. Stockholder approval didnot,* by itself, result in the closing of the transaction. The closing remains subject to (i) implementation and effectiveness of the reverse stock split, (ii) filing of the Certificate of Designations, (iii) exchange of the required closing deliverables and (iv) satisfaction of other customary closing conditions.

As of the date these unaudited condensed consolidated financial statements were issued, the Securities Purchase Agreement hasnot closed.

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