Coughlin Stoia Geller Rudman & Robbins LLP (“Coughlin Stoia”) (http://www.csgrr.com/cases/accuray/) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Northern District of California on behalf of purchasers of Accuray Inc. (“Accuray”) (NASDAQ:ARAY) common stock pursuant or traceable to the Company’s Initial Public Offering (the “IPO”) on or about February 7, 2007, as well as purchasers of the Company’s common stock between February 7, 2007 and August 19, 2008, inclusive (the “Class Period”), seeking to pursue remedies under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (the “Securities Act”) and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Coughlin Stoia at 800/449-4900 or 619/231-1058, or via e-mail at djr@csgrr.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.csgrr.com/cases/accuray/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
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 Accuray’s “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 Accuray’s 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 Company’s 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.
Plaintiff seeks to recover damages on behalf of all purchasers of Accuray common stock during the Class Period, as well as purchasers of Accuray common stock pursuant and/or traceable to the IPO on or about February 7, 2007 (the “Class”). The plaintiff is represented by Coughlin Stoia, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Coughlin Stoia, a 190-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Coughlin Stoia Web site (http://www.csgrr.com) has more information about the firm.
Contacts:
Coughlin Stoia Geller Rudman & Robbins LLP
Samuel H. Rudman,
800-449-4900
or
David A. Rosenfeld
djr@csgrr.com