Shares of Accuray Incorporated (NASDAQ:ARAY) fell 19.4% after the medical device company announced a complex financial strategy that has raised concerns among investors. The company revealed plans to exchange $82.0 million in principal of its 3.75% senior convertible notes maturing in 2026 for approximately 8.88 million common shares, along with a cash payment of around $68.6 million to noteholders.

The exchange, scheduled to be completed on June 11, 2025, is subject to standard closing conditions. Additionally, Accuray has entered into a new senior secured credit agreement, securing $150 million in term loans, a $20 million delayed-draw term loan facility, and a $20 million revolving credit line. The proceeds from these facilities, along with available cash, will be used to repay existing debt under a 2021 agreement with Silicon Valley Bank.

The new financing agreement offers two interest rate options: a term SOFR-based rate with a 2.00% floor plus an 8.50% margin, or a base rate with a 3.00% floor plus a 7.50% margin. Up to 6.00% of the interest may be paid in kind, potentially increasing the principal balance of the loans.

In terms of corporate governance, Accuray announced the appointment of Steven F. Mayer to its Board of Directors as part of a governance agreement with TCW Asset Management Company LLC, the collateral agent and administrative agent for the lenders.

Suzanne Winter, Accuray’s President and CEO, expressed optimism about the new financing agreement, emphasizing its alignment with the company’s strategic priorities, which include transforming radiotherapy care and enhancing shareholder value. Winter highlighted the company’s expanded portfolio of solutions and stated that the new capital structure would improve liquidity and operational flexibility.

As part of the restructuring, Accuray issued several warrants to the lenders, with exercise prices ranging from $0.01 to $1.68 and expirations in 2032. These warrants include anti-dilution provisions and are subject to certain registration rights.

The complexity of this financial restructuring has clearly unsettled investors, as reflected in the significant decline in Accuray’s share price. While the company’s strategic moves aim to strengthen its financial position and support long-term growth, the market’s immediate reaction signals investor apprehension over potential share dilution and the cost of the new capital.

Accuray Share Price

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