Accuray Incorporated (NASDAQ: ARAY) announced on July 29, 2026, that it has entered into definitive agreements with TCW Asset Management Company LLC to restructure its capital stack and secure additional liquidity. The company will exchange $40 million in aggregate principal amount of its term loan for convertible preferred stock and receive a $15 million cash investment from TCW. This financial restructuring aims to deleverage the balance sheet, provide operational runway, and support Accuray’s transition into the second phase of its transformation plan, which focuses on differentiated innovation and cost reduction.

The agreements encompass six major components designed to enhance financial flexibility and governance. Under the deleveraging provision, TCW will exchange $40 million of term loan principal for shares of convertible preferred stock with an equivalent aggregate liquidation preference of $40 million. These shares are convertible into common stock at a conversion price of $.50 per share, representing an approximately 105.4% premium to Accuray’s common stock trading price as of the close of trading on July 28, 2026. The preferred stock will accrue dividends at a rate of 8% per annum. Concurrently, TCW will invest $15 million in cash for additional shares of the convertible preferred stock. Furthermore, TCW has agreed to make available a delayed draw term loan of up to $5 million in aggregate principal amount, subject to certain conditions.

To provide Accuray with additional time to execute its strategic priorities, certain financial covenants in the existing term loan will be waived through December 31, 2027. The first covenant testing date is set for March 31, 2028. Governance changes include reducing the size of the Board of Directors from eight to seven members. TCW retains the right to appoint two directors; Steven Mayer and Chan Galbato will serve as TCW designees. Beverly Huss and Anne Le Grand stepped down from the board concurrently with the execution of the agreements, and a new independent director will be added. Accuray also agreed to implement a reverse stock split applicable to its common shares, with the ratio to be determined later. The transactions remain subject to customary closing conditions, including stockholder approval of the reverse stock split and certain equity issuances.

Accuray intends to leverage these financial improvements to accelerate innovation through strategic partnerships. The company entered into non-binding letters of intent (LOIs) with Samsung HME America, Inc., dba NeuroLogica Corp., to address volumetric imaging technologies, and with RaySearch Laboratories AB (publ) to develop advanced adaptive radiation therapy. Both LOIs are nonbinding, and final terms remain subject to further negotiations. Additionally, Accuray continues to expand its collaboration with Tata Consultancy Services (TCS) to improve product development and service capabilities, having recently finalized onboard remote diagnostics to enhance system uptime.

Strategic Technology and Operational Focus

Accuray’s transformation phase two is anchored in three areas: differentiated innovation, lowering cost structure, and expanded market reach. The company continues to roll out internally developed technologies across its installed base, including ClearRT Helical kVCT Imaging for high-quality visualization, Synchrony Motion Management for real-time tumor tracking, and enhancements to the VOLO Optimizer software platform. Steve La Neve, Accuray’s CEO, stated that the agreements provide increased financial flexibility and a stronger balance sheet, allowing the company to focus on customers and stakeholders while rewarding shareholder confidence.

What the Numbers Show

The structure of the TCW agreement highlights a significant shift in Accuray’s capital composition, prioritizing balance sheet stability over immediate dilution of common equity. By converting $40 million of debt into preferred stock at a substantial premium ($.50 conversion price vs. recent trading levels), Accuray reduces interest-bearing liabilities while deferring common equity dilution until the stock appreciates significantly. The 8% dividend on preferred stock replaces fixed debt obligations with a potentially more flexible payout structure, contingent on profitability. The covenant holiday until March 31, 2028, provides a critical buffer, allowing management to focus on executing the new partnership-driven growth strategy without the immediate pressure of compliance testing.

BTIG has suspended its Neutral rating on Accuray (NASDAQ: ARAY). The firm removed the rating following a recent review of the stock.

Rating Action

The suspension affects the Neutral rating previously assigned to Accuray. BTIG did not provide a new rating or price target in the update.