Stockholders v Accuray Inc.
Stockholders File Lawsuit Against Accuray Inc.
According to a press release dated July 22, 2009, the complaint charges Accuray and certain of its officers and directors with violations of the Securities Act and the Exchange Act. Accuray designs, develops, and sells the CyberKnife system, an image-guided robotic radio surgery system for the treatment of solid tumors. The CyberKnife system combines continuous image-guidance technology with a compact linear accelerator to deliver high doses of radiation to a tumor from different directions.
The complaint alleges that, during the Class Period, defendants misrepresented and failed to disclose material information concerning the quality and realistic likelihood of fulfillment of contracts in Accurays backlog, a figure representing the direct revenue that Accuray expects to receive from the sale and servicing of the CyberKnife system.
Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (i) at the time of Accurays IPO, Accuray changed its definition of backlog to include both contingent and non-contingent contracts; (ii) beginning in the fiscal quarter ending March 31, 2007 (at the time of the IPO), Accuray would report backlog that consisted of both contingent and non-contingent backlog, thereby increasing the total reported backlog; (iii) defendants materially overstated the amount of the Companys backlog; (iv) Accuray reported as backlog orders for the CyberKnife system that did not have a substantially high probability of being booked as revenue; (v) a significant portion of commissions paid to CyberKnife sales personnel were earned prior to those potential sales being booked as revenue; (vi) Accuray sales personnel entered into contingent contracts for CyberKnife systems that did not have a substantially high probability of being booked as revenue; (vii) Accuray did not have adequate internal controls and procedures to ensure that potential orders reported as backlog had a substantially high probability of being booked as revenue; and (viii) based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its backlog, earnings, operations and prospects.
On August 19, 2008, Accuray announced its fiscal fourth quarter and full year 2008 financial results for the period ended June 28, 2008 in a press release titled Accuray Announces Results for the Fourth Quarter and Fiscal Year End 2008; 28 New Contracts Valued at $115.5 Million Signed in Fourth Quarter. That same day, Accuray held a conference call with analysts and reiterated the financial results in the press release and revealed that Accuray removed another $39 million from backlog. Thus, Accuray removed approximately $127 million in backlog during the last three quarters of fiscal 2008.
If you bought Accuray Inc. securities and would like to obtain information about the Accuray Inc. lawsuit, then you are invited to call Kahn Swick Foti, LLC toll free at (866) 467-1400 to speak with an attorney or visit www.ksfcounsel.com.
