ViewRay (VRAYQ) 8-K Index to Financial Statements

Exhibit 99.1

VIEWRAY INCORPORATED

INDEX TO FINANCIAL STATEMENTS

	Page
Balance Sheets		2
Statements of Operations		3
Statements of Convertible Preferred Stock and Stockholders’ Deficit		4
Statements of Cash Flows		5
Notes to Financial Statements		6

1

VIEWRAY INCORPORATED

Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

	March 31, 2015			December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	15,173		$	11,129
Accounts receivable		—			904
Inventory		7,325			8,238
Deposits on purchased inventory		3,484			2,798
Deferred cost of revenue		8,331			4,712
Prepaid expenses and other current assets		1,134			626
Total current assets		35,447			28,407
Property and equipment, net		3,140			2,931
Restricted cash		1,053			1,053
Intangible assets, net		222			264
Deferred offering costs		2,907			1,419
Other assets		31			31
TOTAL ASSETS	$	42,800		$	34,105
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Notes payable	$	240		$	240
Accounts payable		4,135			6,134
Accrued liabilities		4,353			4,436
Customer deposits		8,140			6,100
Deferred revenue, current portion		10,011			7,361
Long-term debt, current portion		5,627			5,493
Total current liabilities		32,506			29,764
Long-term debt, net of current portion		7,748			9,149
Convertible preferred stock warrant liability		72			138
Other long-term liabilities		631			567
TOTAL LIABILITIES		40,957			39,618
Commitments and contingencies (Note 6)
Convertible preferred stock, par value $0.01 per share; 80,710,997 and 74,460,997 shares authorized at March 31, 2015 (unaudited) and December 31, 2014; 10,212,447 and 9,295,788 shares issued and outstanding at March 31, 2015 (unaudited) and December 31, 2014; aggregate liquidation preference of $162,682 and $146,732 at March 31, 2015 (unaudited) and December 31, 2014, actual		160,839			145,110
Stockholders’ deficit:
Common stock, par value of $0.01 per share; 90,000,000 and 88,000,000 shares authorized at March 31, 2015 (unaudited) and December 31, 2014; 308,443 and 304,908 shares issued and outstanding at March 31, 2015 (unaudited) and December 31, 2014		3			3
Additional paid-in capital		1,502			1,420
Accumulated deficit		(160,501	)		(152,046	)
TOTAL STOCKHOLDERS’ DEFICIT		(158,996	)		(150,623	)
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT	$	42,800		$	34,105

The accompanying notes are an integral part of these financial statements.

2

VIEWRAY INCORPORATED

Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31,
	2015			2014
Revenue:
Product	$	99		$	—
Service		181			35
Total revenue		280			35
Cost of revenue:
Product		154			561
Service		623			169
Total cost of revenue		777			730
Gross margin		(497	)		(695	)
Operating expenses:
Research and development		2,248			2,628
Selling and marketing		964			970
General and administrative		4,323			2,923
Total operating expenses		7,535			6,521
Loss from operations		(8,032	)		(7,216	)
Interest income		1			—
Interest expense		(484	)		(500	)
Other income (expense), net		60			(2	)
Loss before provision for income taxes		(8,455	)		(7,718	)
Provision for income taxes		—			—
Net loss	$	(8,455	)	$	(7,718	)
Deemed capital contribution on repurchase of Series A preferred stock	$	—		$	9
Net loss attributable to common stockholders	$	(8,455	)	$	(7,709	)
Net loss per share attributable to common stockholders, basic and diluted	$	(27.58	)	$	(26.10	)
Weighted-average common shares used to compute net loss per share attributable to common stockholders, basic and diluted		306,597			295,388

The accompanying notes are an integral part of these financial statements.

3

VIEWRAY INCORPORATED

Statements of Convertible Preferred Stock and Stockholders’ Deficit

(In thousands, except share data)

(Unaudited)

	Convertible Preferred Stock				Common Stock				Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Deficit
	Shares		Amount		Shares		Amount
Balance at December 31, 2014		9,295,788	$	145,110		304,908	$	3	$	1,420	$	(152,046	)	$	(150,623	)
Issuance of common stock from option exercises (unaudited)		—		—		3,535		—		8		—			8
Stock-based compensation (unaudited)		—		—		—		—		74		—			74
Issuance of Series C Preferred, net of issuance cost of $221,100 (unaudited)		916,659		15,729		—		—		—		—			—
Net loss (unaudited)		—		—		—		—		—		(8,455	)		(8,455	)
Balance at March 31, 2015 (unaudited)		10,212,447	$	160,839		308,443	$	3	$	1,502	$	(160,501	)	$	(158,996	)

The accompanying notes are an integral part of these financial statements.

4

VIEWRAY INCORPORATED

Statements of Cash Flows

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(8,455	)	$	(7,718	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		288			240
Stock-based compensation		74			64
Change in fair value of convertible preferred stock warrant liability		(66	)		—
Inventory lower of cost and market adjustment		—			561
Amortization of debt discount and interest accrual		115			24
Changes in operating assets and liabilities:
Accounts receivable		904			—
Inventory		913			(2,140	)
Deposits on purchased inventory		(686	)		(2,105	)
Deferred costs		(3,619	)		—
Prepaid expenses and other current assets		(508	)		(89	)
Accounts payable		(2,853	)		1,201
Accrued expenses and other long-term liabilities		(401	)		(134	)
Customer deposits and deferred revenue		4,690			—
Net cash used in operating activities		(9,604	)		(10,096	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(489	)		(293	)
Change in restricted cash balance		—			350
Net cash provided by (used in) investing activities		(489	)		57
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible preferred stock, net		15,729			—
Proceeds from the exercise of stock options		8			—
Payments of issuance of long-term debt, net		(1,328	)		—
Repurchase of Series A convertible preferred stock		—			(37	)
Payments of costs related to the initial public offering		(272	)		—
Net cash provided by (used in) financing activities		14,137			(37	)
NET INCREASE (DECREASE) IN CASH		4,044			(10,076	)
CASH — BEGINNING OF PERIOD		11,129			26,529
CASH — END OF PERIOD	$	15,173		$	16,453
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	379		$	320
Cash paid for taxes	$	—		$	—
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Purchase of fixed assets in accounts payable	$	28		$	76
Deferred offering cost in accrued liabilities	$	1,216		$	—

The accompanying notes are an integral part of these financial statements.

5

VIEWRAY INCORPORATED

Notes to Financial Statements

(Unaudited)

1. Background and Organization

ViewRay Incorporated, or the Company, designs, manufactures and markets MRIdian, the first and only MRI-guided radiation therapy system to image and treat cancer patients simultaneously.

Since inception, the Company has devoted substantially all of its efforts towards research and development, initial selling and marketing activities, raising capital and preparing for the manufacturing and shipment of MRIdian systems. In May 2012, the Company was granted clearance from the U.S. Food and Drug Administration, or FDA, to sell MRIdian. In November 2013, the Company received its first clinical acceptance of a MRIdian at a customer site, and the first patient was treated with that system in January 2014. The Company received permission to affix the CE mark in November 2014.

2. Summary of Significant Accounting Policies

The accompanying financial statements reflect the application of certain significant accounting policies, as described below and elsewhere in the accompanying notes to the financial statements.

Basis of Presentation

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and pursuant to the rules and regulation of the Securities and Exchanges Commission, or SEC. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation of the Company’s unaudited financial statements have been included. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015 or any future period. These unaudited financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2014.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Such estimates include, but are not limited to, allocation of revenue to its multiple deliverable elements, inventory write-downs to reflect net realizable value, assumptions used in the valuation of stock-based awards, accrued losses from purchase commitments, and valuation allowances against deferred tax assets. Actual results could differ from those estimates.

Inventory

Inventory consists of purchased components for assembling MRIdian systems and other direct and indirect costs associated with MRIdian system installation. Inventory is stated at the lower of cost or market value. All inventories expected to be placed in service during the Company’s normal operating cycle for the delivery and assembly of MRIdian systems, including items expected to be on hand for more than one year, are classified as current assets.

Effective January 1, 2015, the Company made a voluntary change to its accounting policy for inventory cost basis. Under the previous accounting policy, the Company recorded inventory items on a first-in, first-out basis through specific identification. Purchased components were assigned to each MRIdian system at original cost. Under the new accounting policy, the Company recorded inventory at weighted average cost basis.

The Company believes that this change is preferable because it will be more efficient for the Company to keep track of its inventory cost. The first-in, first-out cost basis through specific identification accounting policy was manageable at the time since the Company had limited MRIdian system installations (one MRIdian system installation during the year ended December 31, 2013, and another two MRIdian system installation during the year ended December 31, 2014). However, due to the Company’s growing business and sales, the number of planned MRIdian system installation has been increasing. Purchased components are no longer assigned to specific MRIdian system installation. Along with the Company’s increased components purchasing activities, the new accounting policy will significantly reduce the Company’s burden and cost of inventory management.

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In accordance with applicable accounting literature, a change in inventory cost basis is treated as a change in accounting principle and requires retrospective application. The accounting policy change has no cumulative effect on the Company’s annual statements of operations prior to January 1, 2015, and immaterial effect on the Company’s interim statements of operations for the year ended December 31, 2014. The immaterial impact of the accounting policy change on the Company’s statement of operations for the three months ended March 31, 2014 is an increase of $37 thousand to the total cost of revenue, loss from operations, and let loss. Therefore, no retrospective adjustment of the Company’s annual financial statements are required, and the Company’s statements of operations for the three months ended march 31, 2014 is not revised for the immaterial impact from the accounting policy change.

3. Going Concern

The Company’s unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company currently has limited working capital, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

4. Balance Sheet Components

Property and Equipment

Property and equipment consisted of the following (in thousands):

	March 31, 2015			December 31, 2014
	(Unaudited)
Prototype	$	6,432		$	6,342
Machine and equipment		4,431			4,214
Leasehold improvements		1,301			1,270
Furniture and fixtures		295			263
Software		732			647
Property and equipment, gross		13,191			12,736
Less: accumulated depreciation and amortization		(10,051	)		(9,805	)
Property and equipment, net	$	3,140		$	2,931

Depreciation and amortization expense related to property and equipment was $246 thousand and $198 thousand during the three months ended March 31, 2015 and 2014.

Intangible Assets

Intangible assets consisted of the following (in thousands):

	March 31, 2015			December 31, 2014
	(Unaudited)
Intangible assets – license cost	$	500		$	500
Accumulated amortization		(278	)		(236	)
Intangible assets, net	$	222		$	264

7

Intangible amortization expense was $42 thousand in both periods during the three months ended March 31, 2015 and 2014, which were recorded in general and administrative expenses in the statements of operations.

At March 31, 2015, the estimated future amortization expense of purchased intangible assets was as follows (in thousands):

Year Ending December 31,	Estimated Future Amortization Expense
The remainder of 2015	$	125
2016		97
Total amortization expense	$	222

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

	March 31, 2015		December 31, 2014
	(Unaudited)
Accrued payroll and related benefits	$	2,014	$	1,652
Accrued accounts payable		657		946
Sales tax and medical device excise tax payable		177		499
Accrued legal and accounting		1,164		901
Accrued interest		131		142
Other		210		296
Total accrued liabilities	$	4,353	$	4,436

Deferred Revenue

Deferred revenue consisted of the following (in thousands):

	March 31, 2015			December 31, 2014
	(Unaudited)
Deferred revenue:
Product	$	9,750		$	6,919
Services		261			442
Total deferred revenue		10,011			7,361
Less: current portion of deferred revenue		(10,011	)		(7,361	)
Noncurrent portion of deferred revenue	$	—		$	—

5. Fair Value of Financial Instruments

The Company’s financial instruments that are carried at fair value consist of Level 1 assets and Level 3 liabilities. Level 1 assets include highly liquid bank deposits and money market funds, which were not material at March 31, 2015 and December 31, 2014. Level 3 liabilities consist of the convertible preferred stock warrant liability. The convertible preferred stock warrant liability was valued using the Black-Scholes option-pricing model. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value of the warrant (see Note 7).

8

The convertible preferred stock warrant was issued in December 2013 and, was still outstanding at March 31, 2015 and December 31, 2014. The following table sets forth the fair value of the Company’s financial liabilities by level within the fair value hierarchy (in thousands):

	At March 31, 2015
	Level 1		Level 2		Level 3		Total
	(Unaudited)
Convertible preferred stock warrant liability	$	—	$	—	$	72	$	72
	At December 31, 2014
	Level 1		Level 2		Level 3		Total
Convertible preferred stock warrant liability	$	—	$	—	$	138	$	138

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities (in thousands):

	Three Months Ended March 31, 2015
	(Unaudited)
Fair value, beginning of period	$	138
Change in fair value of Level 3 financial liabilities		(66	)
Fair value, end of period	$	72

The gains and losses from re-measurement of Level 3 financial liabilities are recorded as part of other income (expense), net in the statements of operations.

6. Commitments and Contingencies

Operating Leases

The Company leases office space in Oakwood Village, Ohio and Mountain View, California under non-cancellable operating leases. At December 31, 2014, the future minimum payments for the operating leases are as follows (in thousands):

Year Ending December 31,	Future Minimum Payments
2015	$	1,086
2016		1,113
2017		1,106
2018		963
2019 and thereafter		823
Total future minimum payments	$	5,091

Contingencies

The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount.

In the normal course of business, the Company may become involved in legal proceedings. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The

9

accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees and other directly related costs expected to be incurred. At March 31, 2015 and December 31, 2014, the Company was not involved in any material legal proceedings.

Purchase Commitments

At March 31, 2015, the Company had no outstanding firm purchase commitments.

7. Convertible Preferred Stock

In January 2015, the Company issued an aggregate of 54,591 shares of Series C convertible preferred stock to a new investor at a price of $17.40 per share for a total gross consideration of $950 thousand.

In February 2015, the Company issued 862,068 shares of Series C convertible preferred stock to another investor at a price of $17.40 per share for total gross consideration of $15.0 million.

The rights, privileges and preferences of the issued Series C convertible preferred stock in January and February 2015 are the same as the Series C convertible preferred stock outstanding as of December 31, 2014.

Convertible preferred stock as of March 31, 2015 and December 31, 2014 consisted of the following (in thousands, except share data):

	March 31, 2015
	Shares Authorized		Shares Issued and Outstanding		Aggregate Liquidation Preference		Net Carrying Value
	(Unaudited)
Series A		398,500		54,496	$	3,004	$	3,003
Series B		60,500,000		7,498,571		113,405		112,080
Series C		19,812,497		2,659,380		46,273		45,756
Total		80,710,997		10,212,447	$	162,682	$	160,839
	December 31, 2014
	Shares Authorized		Shares Issued and Outstanding		Aggregate Liquidation Preference		Net Carrying Value
Series A		398,500		54,496	$	3,004	$	3,003
Series B		60,500,000		7,498,571		113,405		112,080
Series C		13,562,497		1,742,721		30,323		30,027
Total		74,460,997		9,295,788	$	146,732	$	145,110

8. Convertible Preferred Stock Warrant

The Company has an outstanding convertible preferred stock warrant related to a 2013 debt financing whereby the Company issued a warrant to purchase 43,103 shares of Series C convertible preferred stock. The convertible preferred stock warrant was recorded as a liability and is adjusted to fair value at each balance sheet date, with the change in fair value being recorded as a component of other income (expense), net in the statements of operations. Upon issuance, the fair value of the warrant was estimated to be $158 thousand. The Company recorded a gain of $66 thousand related to the change in fair value of preferred stock warrant liability as part of other income (expense), net in the accompanying statements of operations for the three months ended March 31, 2015. The change in fair value of the preferred stock warrant liability was immaterial during the three months ended March 31, 2014.

10

The key terms of the outstanding convertible preferred stock warrant and the convertible preferred stock warrant liability at March 31, 2015 and December 31, 2014 were as follows (in thousands):

	Issuance Date	Expiration Date	Exercise Price Per Share		Shares		Fair Value of Warrant
							March 31, 2015		December 31, 2014
							(Unaudited)
Series C Warrant	December 2013	The later of December 2023 or five years after an IPO	$	17.40		43,103	$	72	$	138

The Company used the Black-Scholes option-pricing model to estimate the fair value of the convertible preferred stock warrant with the following assumptions:

	March 31, 2015	December 31, 2014
	(Unaudited)
Series C Warrant:
Expected term (in years)	0.5 – 1.2		5.3
Expected volatility	25.0%		30.0	%
Risk-free interest rate	0.3% - 0.6%		1.7	%
Expected dividend yield	0%		0	%

9. Stock-Based Compensation

A summary of the Company’s stock option activity and related information is as follows:

				Options Outstanding
	Shares Available for Grant			Number of Stock Options Outstanding			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
											(In thousands)
Balance at December 31, 2014		99,198			1,428,099		$	2.27		7.7	$	8,356
Granted (unaudited)		(35,238	)		35,238			8.12
Exercised (unaudited)		—			(3,535	)		2.21
Cancelled (unaudited)		19,104			(19,104	)		3.89
Balance at March 31, 2015 (unaudited)		83,064			1,440,698		$	2.38		7.5	$	1
Vested and exercisable at March 31, 2015 (unaudited)					852,081		$	2.15		6.7	$	1
Vested and expected to vest at March 31, 2015 (unaudited)					1,095,630		$	2.27		7.1	$	1

The weighted-average grant date fair value of options granted to employees during the three months ended March 31, 2015 and 2014 was $4.08 per share. No options were granted during the three months ended March 31, 2014. The grant date fair value of options vested during the three months ended March 31, 2015 and 2014 was $61 thousand and $100 thousand.

Aggregate intrinsic value represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. The aggregate intrinsic value of options exercised was insignificant during the three months ended March 31, 2015 and 2014.

At March 31, 2015, total unrecognized compensation cost related to stock-based awards granted to employees, net of estimated forfeitures, was $714 thousand which is expected to be recognized over a weighted-average period of 2.8 years.

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Determination of Fair Value

The determination of the fair value of stock options on the date of grant using an option-pricing model is affected by the estimated fair value of the Company’s common stock, as well as assumptions regarding a number of complex and subjective variables. The variables used to calculate the fair value of stock options using the Black-Scholes option-pricing model include actual and projected employee stock option exercise behaviors, expected price volatility of the Company’s common stock, the risk-free interest rate and expected dividends. Each of these inputs is subjective and generally requires significant judgment to determine.

Fair Value of Common Stock

The fair value of the common stock underlying the stock-based awards was determined by the Company’s board of directors, with input from management and third-party valuations.

Expected Term

The expected term represents the period that the Company’s option awards are expected to be outstanding. The Company considers several factors in estimating the expected term of options granted, including the expected lives used by a peer group of companies within the Company’s industry that the Company considers to be comparable to its business and the historical option exercise behavior of its employees, which the Company believes is representative of future behavior.

Expected Volatility

As the Company does not have a trading history for its common stock, the expected stock price volatility for the Company’s common stock was estimated by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of several public companies in the Company’s industry which were the same as the comparable companies used in the common stock valuation analysis. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of its own share price becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be used in the calculation.

Risk-Free Interest Rate

The risk-free interest rate is based on the zero coupon U.S. Treasury notes, with maturities similar to the expected term of the options.

Expected Dividend Yield

The Company does not anticipate paying any dividends in the foreseeable future and, therefore, uses an expected dividend yield of zero in the Black-Scholes option-valuation model.

In addition to the Black-Scholes assumptions discussed immediately above, the estimated forfeiture rate also has a significant impact on the related stock-based compensation. The forfeiture rate of stock options is estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and records stock-based compensation expense only for those awards that are expected to vest.

12

For the three months ended March 31, 2015, the weighted average fair value of employee stock options was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions. There were no option grants during the three months ended March 31, 2014.

		March 31, 2015
	��	(Unaudited)
Expected term (in years)			6.0
Expected volatility			52.3	%
Risk-free interest rate			1.6	%
Expected dividend yield			0	%

Stock-Based Compensation Expense

Total stock-based compensation expense recognized in the Company’s statements of operations is classified as follows (in thousands):

	Three Months Ended March 31,
	2015		2014
	(Unaudited)
Research and development	$	25	$	7
Selling and marketing		5		2
General and administrative		44		34
Total stock-based compensation expense	$	74	$	43

During the three months ended March 31, 2015 and 2014, there were no stock-based compensation expenses capitalized as a component of inventory or recognized in cost of revenue. Stock-based compensation relating to stock-based awards granted to consultants was insignificant for the three months ended March 31, 2015 and 2014.

10. Net Loss per Share

The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented (in thousands, except share and per share data):

	Three Months Ended March 31,
	2015			2014
	(Unaudited)
Net loss	$	(8,455	)	$	(7,718	)
Gain due to repurchase of Series A preferred stock		—			9
Net loss attributable to common stockholders	$	(8,455	)	$	(7,709	)
Weighted-average common shares used in computing net loss per share, basic and diluted		306,597			295,388
Net loss per share, basic and diluted	$	(27.58	)	$	(26.10	)

13

The following weighted-average common stock equivalents were excluded from the calculation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect:

	Three Months Ended March 31,
	2015		2014
	(Unaudited)
Convertible preferred stock (if converted)		9,750,251		8,415,379
Options to purchase common stock		1,440,159		906,650
Convertible preferred stock warrant (if converted)		43,103		43,103

11. Subsequent Events

2015 Term Loan

On June 26, 2015, the Company entered into a Term Loan Agreement, or the Term Loan, with Capital Royalty Partners II L.P and Parallel Investment Opportunities Partners II L.P or together, CRG, for up to $50.0 million of which $30.0 million was made available to the Company upon closing with the remaining $20.0 million to be available on or before June 26, 2016 at the option of the Company upon achieving certain milestones. The Company drew down the first $30.0 million on closing date. The Term Loan has a maturity date of June 26, 2020 (i.e. 5 years) and bears cash interest at a rate of 12.50% per annum to be paid quarterly during the first 3 years. After the first 3 years of interest only payment, the Company has the option to pay cash interest at a rate of 8% and deferred payment in-kind interest at 4.50% per annum. Principal payment and any deferred payment in-kind interest will be paid quarterly in equal installment following the 3^rd year through maturity date.

The Term Loan is subject to a prepayment penalty of 3% on the outstanding balance during the first 12 months following the funding of the Term Loan, 2% on the outstanding balance after year 1 but on or before year 2, 1% on the outstanding balance after year 2 but on or before year 3, and 0% on the outstanding loan if prepaid after year 3 thereafter until maturity. The Term Loan is also subject to a facility fee of 5% based on the sum of the Term Loan drawn and any outstanding payment in-kind payable on maturity date or the date such Term Loan become due for whatever reason. All direct financing costs were accounted for as a discount on the Term Loan and will be amortized to interest expense during the life of the Term Loan using the effective interest method. The Term Loan is subject to financial covenants and is collateralized by essentially all the Company’s assets and limits the Company’s ability with respect to additional indebtedness, investments or dividends, among other things, subject to customary exceptions.

On June 26, 2015, the Company paid off in full the $13.0 million outstanding term debt with Hercules using part of the proceeds received from the CRG Term Loan.

On July 23, 2015, Vesuvius Acquisition Corp., a corporation formed in the State of Delaware on July 16, 2015, or the Acquisition Sub, merged with and into ViewRay Technologies, Inc., a corporation incorporated in 2004 in the state of Florida originally under the name of ViewRay Incorporated, subsequently reincorporated in Delaware in 2007, referred to as ViewRay. Pursuant to this transaction, or the Merger, ViewRay was the surviving corporation and became a wholly-owned subsidiary. All of the outstanding stock of ViewRay was converted into shares of the surviving corporation’s common stock.

In connection with the Merger and pursuant to the Split-Off Agreement, the former shell company transferred its pre-Merger assets and liabilities to the former shell company’s pre-Merger majority stockholder, in exchange for the surrender by her and cancellation of 4,150,171 shares of the surviving corporation.

As a result of the Merger and Split-Off, the former shell company discontinued its pre-Merger business and acquired the business of ViewRay and will continue the existing business operations of ViewRay as a publicly-traded company under the name ViewRay, Inc.

The Company has evaluated subsequent events through July 23, 2015, the date on which these consolidated financial statements were issued. No significant subsequent events to this date would have had material impact on the Company’s consolidated financial statements as of and for the three months ended March 31, 2015.

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