Full Press Release Details
Enhances Capital Structure Through Convertible Debt Transactions
Facilitate Reduction of Short-term Debt and Potential Dilution to Shareholders
Calif., July 28, 2017 - Accuray Incorporated (NASDAQ: ARAY) has entered into privately negotiated agreements
with a limited number of existing holders of the company's outstanding convertible notes to exchange an aggregate of
approximately $47 million principal amount of the company's 3.50% convertible senior notes due 2018 and 3.50% Series A convertible
senior notes due 2018 (the "Existing Notes") for $53 million aggregate principal amount of newly issued 3.75% convertible
senior notes due 2022 (the "New Notes"). The company has also entered into agreements to privately sell $32 million
aggregate principal amount of the New Notes for cash to certain other investors, and intends to use the proceeds from the cash
issuance to repurchase approximately $28 million of additional Existing Notes from holders.
goal in executing these convertible debt transactions was to significantly reduce potential share dilution, while also reducing
short term debt and effectively extending the maturity date of a certain portion of our notes by over four years," said
Joshua Levine, President and Chief Executive Officer. "These transactions have strengthened Accuray's ability to repay
the remaining existing notes in cash at maturity rather than refinancing the notes through transactions that may be significantly
more dilutive than the existing notes. As a result of the enhanced financial flexibility these transactions afford, we believe
we have the ability to further invest in our business to drive growth and value creation. "
company's exchange offer, the cash issuance and the repurchase are expected to close on August 7, 2017, subject to customary
closing conditions. The repurchase is conditioned on the closing of the cash issuance.
New Notes will be senior unsecured obligations and pay interest semiannually in arrears at a rate of 3.75% per annum on January
15 and July 15 of each year, beginning on January 15, 2018. Prior to April 15, 2022, the New Notes will be convertible at the
option of the holder into cash, shares of the company's common stock or a combination thereof, at the company's election,
under certain conditions and thereafter at any time to and including the business day immediately preceding the maturity date.
The New Notes mature on July 15, 2022, unless earlier converted or repurchased. The initial conversion rate for the New Notes
is 174.8252 shares of the company's common stock per $1,000 principal amount of the New Notes (subject to certain adjustments),
which is equivalent to a conversion price of approximately $5.72 per share, representing an approximately 30% conversion premium
based on the last reported sale price of the company's common stock of $4.40 per share on July 27, 2017, as reported on
The NASDAQ Global Select Market.
completion of the convertible debt transactions, the company expects to continue to explore opportunities to better position itself
to repay or refinance the remaining $40 million of its Existing Notes with a key focus around minimizing dilution. This may include
the company paying cash amounts
due at maturity of the Existing Notes by using a portion of its existing cash on hand. The company
may also incur new debt such as further exchanges with holders of the company's Existing Notes, issuances of other equity-linked
debt securities or additional new secured bank borrowings with a focus of minimizing shareholder dilution.
press release shall not constitute an offer to sell or a solicitation of an offer to buy the New Notes or any other securities,
and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale
offer and sale of the New Notes and any shares of the company's common stock issuable upon conversion have not been registered
under the Securities Act or any state securities laws. The New Notes may not be offered or sold in the United States except pursuant
to an exemption from the registration requirements of the Securities Act and any applicable state securities laws.
company had approximately $108 million of cash, cash equivalents, restricted cash and investments at June 30, 2017.
Accuray Incorporated (NASDAQ: ARAY) is a radiation oncology company that develops, manufactures, and sells precise, innovative
tumor treatment solutions that set the standard of care with the aim of helping patients live longer, better lives. The company's
leading-edge technologies deliver the full range of radiation therapy and radiosurgery treatments.
This press release contains forward-looking statements, including statements regarding potential changes to the company's
capital structure, the terms of the New Notes, the exchange offer, the cash issuance, and the repurchase. These statements are
subject to risks and uncertainties that could cause actual results to differ materially from those described in or implied by
the forward-looking statements, including, without limitation, whether or not the company will be able to consummate the exchange
offer, the cash issuance or the repurchase on the timelines or with the terms anticipated, if at all. Forward-looking statements
are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not
limited to the risks detailed from time to time under the heading "Risk Factors" in the company's report on
Form 10-K, filed on August 24, 2016, the company's reports on Form 10-Q, filed on November 1, 2016, February 3, 2017, and
May 5, 2017, and as updated periodically with the company's other filings with the SEC. Forward-looking statements speak
only as of the date the statements are made and are based on information available to the company at the time those statements
are made and/or management's good faith belief as of that time with respect to future events. The company assumes no obligation
to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors
affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should
not put undue reliance on any forward-looking statements.
Investor Relations, EVC Group