SUNNYVALE, Calif., July 28, 2017 /PRNewswire/ -- 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.
"Our 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. "
The 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.
The 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.
After 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.
This 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 would be unlawful.
The 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.
The company had approximately $108
million of cash, cash equivalents, restricted cash and
investments at June 30, 2017.
About Accuray
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.
Safe Harbor Statement
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 Contact:
Doug Sherk
Investor Relations, EVC Group
+1 (415) 652-9100
dsherk@evcgroup.com
Media Contact:
Beth Kaplan
Accuray
+1 (408) 789-4426
bkaplan@accuray.com
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SOURCE Accuray Incorporated