A Medical Device Daily
Two law firms reported filing class action lawsuits on behalf of those who purchased the common stock of Accuray (Sunnyvale, California) between February 7, 2007 and August 19, 2008. Also included are those who purchased common stock pursuant or traceable to the company's initial public offering (on or about Feb. 7, 2007.
Izard Nobel (San Diego) and Coughlin Stoia Geller Rudman & Robbins (New York) filed the suits.
The complaint charges that defendants violated federal securities laws by failing to disclose material information concerning contracts in Accuray's "backlog." Specifically, defendants failed to disclose the following: (i) Accuray changed its definition of backlog to include both contingent and non-contingent contracts at the time of the IPO; (ii) beginning in the fiscal quarter ending March 31, 2007, Accuray would report backlog that consisted of both contingent and non-contingent backlog; (iii) defendants materially overstated Accuracy's backlog; (iv) Accuray reported as backlog orders for the CyberKnife system that did not have a high probability of being booked as revenue; (v) a significant portion of commissions paid to sales personnel were earned prior to those potential sales being booked as revenue; and (vi) Accuray sales personnel entered into contingent contracts for CyberKnife systems that did not have a high probability of being booked as revenue.
On Aug. 19, 2008, Accuray reported its fiscal fourth quarter and full year 2008 financial results for the period ended June 28, 2008. 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 nearly $127 million in backlog during the last three quarters of fiscal 2008 the lawsuit charges.