##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 001-33452
 TomoTherapy Incorporated
  Wisconsin
(State of Other Jurisdiction of Incorporation or Organization)
    
    39-1914727
(I.R.S. Employer Identification No.)1240 Deming Way, Madison, Wisconsin
(Address of principal executive offices)
    
    53717
(Zip Code)
 (608) 824-2800
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock
    
    NASDAQ Global Select Market
 Securities registered pursuant to section 12(g) of the Act: None
 o þ
 o þ
 þ o
 o
  Large accelerated filer oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### Table of Contents



EXPLANATORY NOTE
 Report of Management on Internal Control over Financial Reporting
    2




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##### 



TomoTherapy Incorporated
INDEX
 PagePart IIItem 6. Selected Financial Data
    
    
    4Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    6Item 8. Financial Statements and Supplementary Data
    
    
    27Item 9A. Controls and Procedures
    
    
    59Part IVItem 15. Exhibits and Financial Statement Schedules
    
    
    60Signatures
    
    
    64EX-23.1EX-23.2EX-31.1EX-31.2EX-32.1EX-32.2
  3




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PART II
 
 Item 6. Selected Financial Data
  Consolidated Balance Sheet data (in thousands):
 As of December 31,2008 (4)
    
    2007
    
    2006
    
    2005
    
    2004(Restated)Cash and equivalents
    
    $
    65,967
    
    
    $
    191,780
    
    
    $
    20,137
    
    
    $
    30,396
    
    
    $
    1,950Short-term investments
    
    
    88,825
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Receivables, net
    
    
    41,259
    
    
    
    44,108
    
    
    
    19,050
    
    
    
    14,235
    
    
    
    5,036Inventories, net
    
    
    63,983
    
    
    
    53,171
    
    
    
    40,026
    
    
    
    28,283
    
    
    
    15,740Working capital (deficit)
    
    
    185,228
    
    
    
    211,449
    
    
    
    7,446
    
    
    
    7,792
    
    
    
    (4,187
    )Total assets
    
    
    296,428
    
    
    
    325,142
    
    
    
    109,314
    
    
    
    82,303
    
    
    
    29,069Deferred revenue and customer deposits
    
    
    43,633
    
    
    
    35,338
    
    
    
    43,307
    
    
    
    49,281
    
    
    
    16,133Long-term debt (including current maturities)
    
    
    727
    
    
    
    841
    
    
    
    875
    
    
    
    214
    
    
    
    283Redeemable convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    212,663
    
    
    
    166,402
    
    
    
    84,234Total shareholders equity (deficit)
    
    
    213,594
    
    
    
    239,657
    
    
    
    (184,117
    )
    
    
    (151,406
    )
    
    
    (83,720
    )
 Consolidated Statement of Operations data (in thousands except per share data):
 Years Ended December 31,2008 (4)
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(Restated)Revenue
    
    $
    204,589
    
    
    $
    232,810
    
    
    $
    156,102
    
    
    $
    75,754
    
    
    $
    45,460Income (loss) before income tax, noncontrolling
interests and
cumulative effect of change in accounting principle
    
    
    (33,659
    )
    
    
    16,450
    
    
    
    7,731
    
    
    
    317
    
    
    
    3,032Income tax expense (benefit)
    
    
    6,931
    
    
    
    5,788
    
    
    
    (7,184
    )
    
    
    78
    
    
    
    151Noncontrolling interests
    
    
    7,102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cumulative effect of change in accounting principle (1)
    
    
    
    
    
    
    
    
    
    
    (2,140
    )
    
    
    
    
    
    
    Net income (loss)
    
    
    (33,488
    )
    
    
    10,662
    
    
    
    12,775
    
    
    
    239
    
    
    
    2,881Accretion of redeemable convertible preferred stock (2)
    
    
    
    
    
    
    (237,582
    )
    
    
    (46,253
    )
    
    
    (68,075
    )
    
    
    (41,960
    )Net loss attributable to common shareholders
    
    $
    (33,488
    )
    
    $
    (226,920
    )
    
    $
    (33,478
    )
    
    $
    (67,836
    )
    
    $
    (39,079
    )Basic and diluted net loss per share attributable to
common shareholders
    
    $
    (0.67
    )
    
    $
    (6.35
    )
    
    $
    (3.78
    )
    
    $
    (8.48
    )
    
    $
    (5.40
    )Weighted average common shares used in computing basic
and diluted net loss per share attributable to common
shareholders
    
    
    50,199
    
    
    
    35,731
    
    
    
    8,856
    
    
    
    7,996
    
    
    
    7,234Pro forma basic net income per share (3)
    
    
    
    
    
    $
    0.24
    
    
    $
    0.36
    
    
    
    
    
    
    
    Pro forma diluted net income per share (3)
    
    
    
    
    
    $
    0.21
    
    
    $
    0.32
    
    
    
    
    
    
    
    Pro forma weighted average number of shares used in
computing basic net income per share (3)
    
    
    
    
    
    
    45,028
    
    
    
    35,366
    
    
    
    
    
    
    
    Pro forma weighted average number of shares used in
computing diluted net income per share (3)
    
    
    
    
    
    
    49,919
    
    
    
    40,130
    
    
    
    
    
    
    
    
 4




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(1)
    
    Represents impact of the adoption of Staff Position 150-5, Issuers Accounting under Financial
Accounting Standards Board (FASB) Statement No. 150 for Freestanding Warrants and Other Similar
Instruments on Shares That Are Redeemable(FSP 150-5). Pursuant to FSP 150-5, we were required to
classify our outstanding warrants to purchase preferred stock as a liability on our balance sheet
and record adjustments to their fair value in our statements of operations at the end of each
reporting period. For the year ended December 31, 2006, the impact of the change in accounting
principle was to decrease net income by $3.1 million, consisting of a $2.2 million cumulative
effect adjustment for the change in accounting principle as of January 1, 2006, when the Company
adopted FSP 150-5, and $0.9 million of expense that was recorded in other income (expense), net to
reflect the increase in fair value between January 1, 2006 and December 31, 2006. The warrants were
subject to revaluation at each balance sheet date and any change in fair value was recognized as a
component of other income (expense), net, until the completion of the Companys initial public
offering when the preferred warrants converted to common stock warrants.(2)
    
    Accretion of redeemable convertible preferred stock represents the impact attributable to the
increase in the fair market value of shares of our redeemable convertible preferred stock prior to
their conversion into shares of our common stock upon the closing of our initial public offering.
The holders of Series A, B, C and D preferred stock had the option to put their stock back to us at
the greater of (i) the original purchase price plus accrued dividends, or (ii) the fair market
value of the stock. The holders of Series E preferred stock had the option to put their stock back
to us at the original purchase price plus accrued dividends. The put option and the related
accretion of the preferred stock terminated upon the completion of our initial public offering when
all of our issued and outstanding shares of preferred stock converted to common stock.(3)
    
    Pro forma net income per share gives effect to the conversion upon the closing of our initial
public offering of all of our issued and outstanding shares of preferred stock on a one-for-one
basis into shares of our common stock.(4)
    
    The Company determined that its financial statements as of December 31, 2008 and for the year
then ended required restatement to correct errors in the accounting for income taxes. See Note C to our consolidated
financial statements for further information relating to the restatement. 5




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion should be read together with our audited consolidated financial
statements and the notes to those financial statements, which are included in this report. This
report may contain or incorporate by reference forward-looking statements made pursuant to the safe
harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements reflect managements expectations,
estimates, and assumptions, based on information available at the time of the statement or, with
respect to any document incorporated by reference, available at the time that such document was
prepared. Forward-looking statements include, but are not limited to, statements regarding future
events, plans, goals, objectives, prospects, and expectations. Forward-looking statements are
often, but not always, made through the use of words such as believe, anticipate, should,
intend, plan, will, likely, expect, estimate, project, and similar expressions.
Forward-looking statements are not guarantees of future performance and involve risks,
uncertainties, and other factors, including, but not limited to, those discussed below under
Factors Affecting Our Financial Performance and those in the section entitled Risk Factors
under Part I, Item 1A of this Annual Report on Form 10-K , which may cause our actual results,
performance or achievements to be materially different from any future results, performance, or
achievements expressed or implied by those statements. We undertake no obligation to, and
expressly disclaim any such obligation to, update or revise any forward-looking statements to
reflect changed assumptions, the occurrence of anticipated or unanticipated events or changes to
future results over time or otherwise, except as required by law.
 Restatement
  Overview
     6




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Factors Affecting Our Financial Performance
  Incoming Orders
      Backlog
   7




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Revenue
    
    
    Shipments of the Hi Art system generally occur 9 to 12 months after the order is
received. Timing of deliveries can be affected by factors out of our control such as
construction delays at customer project sites and customer credit issues. We generally
recognize revenue from a system sale upon customer acceptance, which usually occurs
three to four weeks after delivery. Each installation represents a significant
percentage of our revenue for a particular quarter.
    
    Our geographic mix of customers may impact our average selling prices. Increased
sales of the Hi Art system outside of North America have tended to favorably impact our
gross margins due to higher average selling prices in these markets. We intend to
continue to expand our international selling efforts, although we cannot be certain that
favorable pricing trends will continue nor can we be certain of how foreign currency
exchange rates will impact our financial results in the future.
    
    Our ability to demonstrate the clinical benefits of the Hi Art system compared to
competing systems is a factor in our ability to influence the market demand for the Hi
Art system. To compete effectively, we may need to offer additional features that could
require substantial internal resources to develop.
    
    Our focus on sales to for-profit, multi-center customers in the United States may
require us to lower selling prices, as these customers tend to be more price-conscious.
In addition, we have a limited history of working with these for-profit, multi-center
customers. Orders from these customers may remain in backlog longer than those from
customers who place single unit orders, as units sold to multi-center customers tend to
install sequentially over a longer period of time.
    
    The Hi Art system is a major capital equipment item that represents a significant
purchase for most of our customers. If the global economy continues its downward trend,
our customers may choose to delay some of their capital spending, and, as a result, our
incoming orders and subsequent revenue recognition may be materially adversely affected.
  Service revenue.
   8




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Cost of revenue
   Component supply and cost.
 Service and support expenses.
 Warranty.
  Research and development expenses
   Selling, general and administrative expenses
   9




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Nonoperating expenses
  Interest income
  Income tax expense (benefit)
 Multiple taxing jurisdictions and projected financial earnings or losses.
 Deferred tax asset valuation allowance. Accounting for Income Taxes
 Noncontrolling interests
  10




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Results of Operations
  Years ended December 31,2008
    
    2007
    
    2006(Restated)Revenue
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of revenue
    
    
    75.8
    
    
    
    62.8
    
    
    
    65.8Gross profit
    
    
    24.2
    
    
    
    37.2
    
    
    
    34.2Operating expenses:Research and development
    
    
    20.8
    
    
    
    14.7
    
    
    
    13.7Selling, general and administrative
    
    
    22.7
    
    
    
    18.2
    
    
    
    14.8Total operating expenses
    
    
    43.5
    
    
    
    32.9
    
    
    
    28.5Income (loss) from operations
    
    
    (19.3
    )
    
    
    4.3
    
    
    
    5.7Other income (expense)
    
    
    2.8
    
    
    
    2.8
    
    
    
    (0.7
    )Income (loss) before income tax, noncontrolling interests and cumulative
effect
of change in accounting principle
    
    
    (16.5
    )
    
    
    7.1
    
    
    
    5.0Income tax expense (benefit)
    
    
    3.4
    
    
    
    2.5
    
    
    
    (4.6
    )Income (loss) before noncontrolling interests and cumulative effect of change
in accounting principle
    
    
    (19.9
    )
    
    
    4.6
    
    
    
    9.6Noncontrolling interests
    
    
    3.5
    
    
    
    0.0
    
    
    
    0.0Income (loss) before cumulative effect of change in accounting principle
    
    
    (16.4
    )
    
    
    4.6
    
    
    
    9.6Cumulative effect of change in accounting principle
    
    
    0.0
    
    
    
    0.0
    
    
    
    (1.4
    )Net income (loss)
    
    
    (16.4
    )%
    
    
    4.6
    %
    
    
    8.2
    %
 Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
 Revenue
  Years ended December 31,2008
    
    2007Product revenue
    
    $
    174,929
    
    
    
    86
    %
    
    $
    213,900
    
    
    
    92
    %Service and other revenue
    
    
    29,660
    
    
    
    14
    
    
    
    18,910
    
    
    
    8$
    204,589
    
    
    
    100
    %
    
    $
    232,810
    
    
    
    100
    %
  Years ended December 31,2008
    
    2007North America
    
    $
    135,977
    
    
    
    67
    %
    
    $
    129,493
    
    
    
    56
    %Europe
    
    
    49,588
    
    
    
    24
    
    
    
    61,337
    
    
    
    26Asia-Pacific
    
    
    19,024
    
    
    
    9
    
    
    
    41,980
    
    
    
    18$
    204,589
    
    
    
    100
    %
    
    $
    232,810
    
    
    
    100
    %
   11




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Cost of revenue
     Research and development expenses
  Years ended December 31,2008
    
    2007
    
    $ Change
    
    % ChangeHi Art R&D
    
    $
    33,616
    
    
    $
    30,304
    
    
    $
    3,312
    
    
    
    11
    %Proton Project / CPAC R&D
    
    
    8,941
    
    
    
    4,000
    
    
    
    4,941
    
    
    
    124$
    42,557
    
    
    $
    34,304
    
    
    $
    8,253
    
    
    
    24
    %
  12




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Selling, general and administrative expenses
  Share-based compensation
 Share-Based Payment
 Other income (expense)
  Income tax expense
  Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
 Revenue
  Years ended December 31,2007
    
    2006Product revenue
    
    $
    213,900
    
    
    
    92
    %
    
    $
    147,974
    
    
    
    95
    %Service and other revenue
    
    
    18,910
    
    
    
    8
    
    
    
    8,128
    
    
    
    5$
    232,810
    
    
    
    100
    %
    
    $
    156,102
    
    
    
    100
    %
  Years ended December 31,2007
    
    2006North America
    
    $
    129,493
    
    
    
    56
    %
    
    $
    88,937
    
    
    
    57
    %Europe
    
    
    61,337
    
    
    
    26
    
    
    
    33,586
    
    
    
    22Asia-Pacific
    
    
    41,980
    
    
    
    18
    
    
    
    33,579
    
    
    
    21$
    232,810
    
    
    
    100
    %
    
    $
    156,102
    
    
    
    100
    %
  13




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Cost of revenue
   Research and development expenses
  Years ended December 31,2007
    
    
    2006
    
    
    $ Change
    
    
    % ChangeHi Art R&D
    
    $
    30,304
    
    
    $
    21,397
    
    
    $
    8,907
    
    
    
    42
    %Proton Project / CPAC R&D
    
    
    4,000
    
    
    
    
    
    
    
    4,000
    
    
    
    100$
    34,304
    
    
    $
    21,397
    
    
    $
    12,907
    
    
    
    60
    %
  Selling, general and administrative expenses
  14




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Share-based compensation
  Other income (expense)
  Income tax expense (benefit)
  Liquidity and Capital Resources
  Financial Condition
  December 31, 2008Unrealized
    
    
    UnrealizedCost basis
    
    
    gains
    
    
    losses
    
    
    Fair ValueU.S. Government and Agency securities
    
    $
    69,317
    
    
    $
    1,963
    
    
    $
    
    
    
    $
    71,280Corporate bonds
    
    
    17,692
    
    
    
    62
    
    
    
    (209
    )
    
    
    17,545$
    87,009
    
    
    $
    2,025
    
    
    $
    (209
    )
    
    $
    88,825
  Cash Flows
 Cash flows from operating activities
  15




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Cash flows from investing activities
    16




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Cash flows from financing activities
     Loans and Available Borrowings
    Contractual Obligations and Commitments
  Payment Due by PeriodLess Than
    
    
    1-3
    
    
    3-5
    
    
    More ThanTotal
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsOperating lease obligations
    
    $
    21,778
    
    
    $
    3,487
    
    
    $
    6,992
    
    
    $
    6,058
    
    
    $
    5,241Notes payable (including interest)
    
    
    770
    
    
    
    152
    
    
    
    488
    
    
    
    130
    
    
    
    Twin Peak acquisition payments
    
    
    2,160
    
    
    
    810
    
    
    
    1,350
    
    
    
    
    
    
    
    Minimum purchase agreement
    
    
    6,972
    
    
    
    2,789
    
    
    
    4,183
    
    
    
    
    
    
    
    $
    31,680
    
    
    $
    7,238
    
    
    $
    13,013
    
    
    $
    6,188
    
    
    $
    5,241
 17




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Pending Litigation
   Operating Capital and Capital Expenditure Requirements
  
    
    Revenue generated by sales of the Hi Art system and service plans;
    
    Costs associated with our sales and marketing initiatives and manufacturing activities;
    
    The performance of the systems operating in the field and cost of maintaining those
systems;
    
    The level of investment needed in our service and support infrastructure;
    
    Costs of our research and development activities; and
    
    Effects of competing technological and market developments.
   18




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Off-Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
   Revenue Recognition
 Revenue
Recognition Revenue Arrangements with
Multiple Deliverables
     Software Revenue Recognition Software Revenue Recognition with Respect to Certain Agreements.
 19




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Allowance for Doubtful Accounts
  Inventories
  Warranty Obligations
  Income Taxes
 Accounting for Income Taxes .
  20




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, Accounting for Uncertainty in Income
Taxes  an Interpretation of FASB Statement No. 109
 Investments
 Fair Value Measurements Effective Date of FASB Statement No. 157
 
    
    Level 1  Quoted prices in active markets for identical assets or liabilities.
    
    Level 2  Inputs other than Level 1 that are observable, either directly or
indirectly, such as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities.
    
    Level 3  Unobservable inputs that are supported by little or no market activity
and that are significant to the fair value of the assets or liabilities.
  Investment in CPAC
 Consolidated Financial Statements
 Share-Based Compensation
 Share-Based Payment
  21




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
    
    The issuance price of our series of preferred shares to third parties;
    
    Recent third-party transactions in our common stock;
    
    Valuations performed by an independent valuation firm;
    
    The liquidation preference and other rights of the preferred shares;
    
    Our revenue backlog and financial performance;
    
    Trends in the market for public companies involved in similar lines of business; and
    
    The fact that the option grants involved illiquid securities of a private company.
 22




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Valuation of
Privately-Held-Company Equity Securities Issued as Compensation
  Valuation Methodologies Employed by Virchow Krause
     23




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Significant Factors in Determining the Fair Value as of Each Grant Date
  Number of
    
    
    
    
    
    Fair Value
    
    IntrinsicOptions
    
    Exercise
    
    Estimated
    
    ValueDate of Grant
    
    Granted
    
    Price
    
    per Share
    
    per ShareJanuary 2006
    
    
    34
    
    
    $
    4.99
    
    
    $
    4.99
    
    
    $
    May 2006
    
    
    47
    
    
    
    5.35
    
    
    
    5.35
    
    
    
    July 2006
    
    
    109
    
    
    
    5.35
    
    
    
    5.35
    
    
    
    October 2006
    
    
    190
    
    
    
    6.75
    
    
    
    6.75
    
    
    
    November 2006
    
    
    3
    
    
    
    6.75
    
    
    
    6.75
    
    
    
    December 2006
    
    
    1,958
    
    
    
    6.75
    
    
    
    8.40
    
    
    
    1.65
   
    
    On December 29, 2005, we sold 2,356,435 shares of Series E convertible preferred stock
at $5.94 per share, representing net proceeds of $13.9 million. We engaged Virchow Krause
to perform an independent valuation of our common stock based on this preferred stock
transaction. Virchow Krause determined that our common stock was valued at $4.99 per share
as of December 29, 2005. This valuation was then used for the option grants made in January
2006.
    
    In the second quarter of 2006, our Board of Directors determined that an updated
independent valuation should be obtained. Therefore, we engaged Virchow Krause to perform a
valuation of all classes of our capital stock. Virchow Krause issued a report dated May 16,
2006, which concluded that our common stock was valued at $5.35 per share as of March 31,
2006. This valuation was then used for the option grants made in May and July 2006. We
believe that there were no material events and no material changes in our financial
condition or prospects during this period that would have resulted in a change in the
valuation of a share of our common stock.
    
    On October 23, 2006, the Chairman of our Board of Directors, T. Rockwell Mackie, sold
an aggregate of 190,400 shares of common stock to two independent investors, and our then
President, Paul Reckwerdt, sold 190,400 common shares to a single independent investor. The
purchase price of all these shares was $6.75 per share resulting in aggregate proceeds of
$1.3 million to each seller. Given the significant size of the transactions and the fact
that these shares were sold to independent third parties, we concluded that our common
stock should be valued at $6.75 per share as of October 23, 2006. Both the buyers and
sellers had knowledge of the possibility that we would undertake an initial public
offering. Stock option grants were made based on this price in October and November 2006.
    
    Management did not obtain an independent valuation report for the grants made on
December 7, 2006 because management did not believe that there had been any material change
in our financial condition or prospects between October 23, 2006 and December 7, 2006.
However, after further consideration of an independent valuation study completed by Virchow
Krause in March 2007 with respect to the fair value of our common stock as of December 31,
2006, management and our Board of Directors concluded that the stock options granted on
December 7, 2006 were granted with an exercise price of $1.65 per share less than the fair
value of our common stock on December 7, 2006 as established by the December 31, 2006
valuation.
  Convertible Preferred Stock Warrant Liability
  24




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##### Table of Contents



Valuation of Privately-Held-Company Equity Securities Issued as
Compensation.
 Redeemable Convertible Preferred Stock
  Recent Accounting Pronouncements
  The Fair Value Option for Financial Assets and
Financial Liabilities
 25




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##### Table of Contents



Business Combinations Accounting and Reporting of Noncontrolling Interest in Consolidated Financial
Statements, an amendment of ARB No. 51
 Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133
 Determination of the Useful
Life of Intangible Assets . Goodwill and Other Intangible Assets
 The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles
 26




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 TomoTherapy Incorporated and Subsidiaries
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    28Consolidated Balance Sheets
    
    
    29Consolidated Statements of Operations
    
    
    30Consolidated Statements of Temporary Equity and Shareholders Equity (Deficit)
    
    
    31Consolidated Statements of Cash Flows
    
    
    32Notes to Consolidated Financial Statements
    
    
    33
 27




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 TomoTherapy Incorporated
     Internal Control  Integrated Framework )
 /s/
GRANT THORNTON LLP 
 28




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##### Table of Contents



TOMOTHERAPY INCORPORATED AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 December 31,2008
    
    
    2007(Restated)ASSETSCash and equivalents
    
    $
    65,967
    
    
    $
    191,780Short-term investments
    
    
    88,825
    
    
    
    Receivables, net
    
    
    41,259
    
    
    
    44,108Inventories, net
    
    
    63,983
    
    
    
    53,171Deferred tax assets
    
    
    496
    
    
    
    3,433Prepaid expenses and other current assets
    
    
    1,890
    
    
    
    1,622Total current assets
    
    
    262,420
    
    
    
    294,114Property and equipment, net
    
    
    22,157
    
    
    
    19,894Deferred tax assets
    
    
    
    
    
    
    4,492Other non-current assets, net
    
    
    11,851
    
    
    
    6,642TOTAL ASSETS
    
    $
    296,428
    
    
    $
    325,142LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable
    
    $
    7,804
    
    
    $
    17,655Accrued expenses
    
    
    18,324
    
    
    
    21,699Accrued warranty
    
    
    7,431
    
    
    
    7,973Deferred revenue
    
    
    28,139
    
    
    
    15,517Customer deposits
    
    
    15,494
    
    
    
    19,821Total current liabilities
    
    
    77,192
    
    
    
    82,665Other non-current liabilities
    
    
    3,487
    
    
    
    2,820Total liabilities
    
    
    80,679
    
    
    
    85,485COMMITMENTS AND CONTINGENCIES (Note F)Noncontrolling interests
    
    
    2,155
    
    
    
    SHAREHOLDERS EQUITYPreferred stock, $1 par value, 10,000,000 shares authorized at December 31, 2008 and December 31, 2007; no shares
issued and outstanding at December 31, 2008 and December 31, 2007
    
    
    
    
    
    
    Common stock, $.01 par value, 200,000,000 shares authorized at December 31, 2008 and December 31, 2007;
52,065,400 and 52,063,768 shares issued and outstanding at December 31, 2008 and 49,742,209 and 49,740,577 shares
issued and outstanding at December 31, 2007
    
    
    506
    
    
    
    497Additional paid-in capital
    
    
    659,379
    
    
    
    652,688Treasury stock, 1,632 shares at cost
    
    
    
    
    
    
    Accumulated other comprehensive income (loss)
    
    
    202
    
    
    
    (523
    )Accumulated deficit
    
    
    (446,493
    )
    
    
    (413,005
    )Total shareholders equity
    
    
    213,594
    
    
    
    239,657TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    296,428
    
    
    $
    325,142
  29




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##### Table of Contents



TOMOTHERAPY INCORPORATED AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 Years Ended December 31,2008
    
    
    2007
    
    
    2006(Restated)Revenue
    
    $
    204,589
    
    
    $
    232,810
    
    
    $
    156,102Cost of revenue
    
    
    155,083
    
    
    
    146,137
    
    
    
    102,653Gross profit
    
    
    49,506
    
    
    
    86,673
    
    
    
    53,449Operating expenses:Research and development
    
    
    42,557
    
    
    
    34,304
    
    
    
    21,397Selling, general and administrative
    
    
    46,336
    
    
    
    42,307
    
    
    
    23,119Total operating expenses
    
    
    88,893
    
    
    
    76,611
    
    
    
    44,516Income (loss) from operations
    
    
    (39,387
    )
    
    
    10,062
    
    
    
    8,933Other income (expense):Interest income
    
    
    4,754
    
    
    
    6,056
    
    
    
    1,292Interest expense
    
    
    (49
    )
    
    
    (221
    )
    
    
    (1,172
    )Other income (expense), net
    
    
    1,023
    
    
    
    553
    
    
    
    (1,322
    )Total other income (expense)
    
    
    5,728
    
    
    
    6,388
    
    
    
    (1,202
    )Income (loss) before income tax, noncontrolling interests and
cumulative effect of change in accounting principle
    
    
    (33,659
    )
    
    
    16,450
    
    
    
    7,731Income tax expense (benefit)
    
    
    6,931
    
    
    
    5,788
    
    
    
    (7,184
    )Income (loss) before noncontrolling interests and
cumulative effect of change in accounting principle
    
    
    (40,590
    )
    
    
    10,662
    
    
    
    14,915Noncontrolling interests
    
    
    7,102
    
    
    
    
    
    
    
    Income (loss) before cumulative effect of change in accounting principle
    
    
    (33,488
    )
    
    
    10,662
    
    
    
    14,915Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (2,140
    )Net income (loss)
    
    
    (33,488
    )
    
    
    10,662
    
    
    
    12,775Accretion of redeemable convertible preferred stock
    
    
    
    
    
    
    (237,582
    )
    
    
    (46,253
    )Net loss attributable to common shareholders
    
    $
    (33,488
    )
    
    $
    (226,920
    )
    
    $
    (33,478
    )Net loss per share attributable to common shareholders:Basic and diluted
    
    $
    (0.67
    )
    
    $
    (6.35
    )
    
    $
    (3.78
    )Weighted average common shares outstanding used in computing
net loss per share attributable to common shareholders:Basic and diluted
    
    
    50,199
    
    
    
    35,731
    
    
    
    8,856
  30




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##### Table of Contents



TOMOTHERAPY INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF TEMPORARY EQUITY
AND SHAREHOLDERS EQUITY (DEFICIT)
(In thousands)
 Temporary Equity
    
    
    Shareholders Equity (Deficit)AccumulatedRedeemable Convertible
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    Other
    
    
    
    
    
    
    TotalPreferred Stock
    
    
    Common Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    Accumulated
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Income (loss)
    
    
    Deficit
    
    
    Equity (Deficit)Balance at December 31, 2005
    
    
    25,221
    
    
    $
    166,402
    
    
    
    8,438
    
    
    $
    84
    
    
    $
    1,013
    
    
    $
    
    
    
    $
    (152,503
    )
    
    $
    (151,406
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,775
    
    
    
    12,775Accretion of preferred stock to redemption value
    
    
    
    
    
    
    46,253
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (46,253
    )
    
    
    (46,253
    )Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    826
    
    
    
    9
    
    
    
    970
    
    
    
    
    
    
    
    
    
    
    
    979Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    232
    
    
    
    
    
    
    
    
    
    
    
    232Reclassification of warrants to liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (444
    )
    
    
    
    
    
    
    
    
    
    
    (444
    )Issuance costs for Series E preferred stock
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2006
    
    
    25,221
    
    
    
    212,663
    
    
    
    9,264
    
    
    
    93
    
    
    
    1,771
    
    
    
    
    
    
    
    (185,981
    )
    
    
    (184,117
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,662
    
    
    
    10,662Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (523
    )
    
    
    
    
    
    
    (523
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,139Accretion of preferred stock to redemption value
    
    
    
    
    
    
    237,582
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (237,582
    )
    
    
    (237,582
    )Exercise of stock options .
    
    
    
    
    
    
    
    
    
    
    2,850
    
    
    
    28
    
    
    
    3,155
    
    
    
    
    
    
    
    
    
    
    
    3,183Exercise of common stock warrants
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercise of preferred stock warrants
    
    
    456
    
    
    
    3,993
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of contingent common shares
    
    
    
    
    
    
    
    
    
    
    1,289
    
    
    
    13
    
    
    
    91
    
    
    
    
    
    
    
    (104
    )
    
    
    Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,318
    
    
    
    
    
    
    
    
    
    
    
    3,318Income tax benefit related to stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,763
    
    
    
    
    
    
    
    
    
    
    
    4,763Reclassification of warrant liability to equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    165
    
    
    
    
    
    
    
    
    
    
    
    165Initial public offering, net of issuance costs of
$2.7 million
    
    
    
    
    
    
    
    
    
    
    10,603
    
    
    
    106
    
    
    
    184,575
    
    
    
    
    
    
    
    
    
    
    
    184,681Issuance of common stock under
employee stock purchase plan
    
    
    
    
    
    
    
    
    
    
    55
    
    
    
    
    
    
    
    869
    
    
    
    
    
    
    
    
    
    
    
    869Conversion of redeemable convertible preferred
stock
    
    
    (25,677
    )
    
    
    (454,238
    )
    
    
    25,677
    
    
    
    257
    
    
    
    453,981
    
    
    
    
    
    
    
    
    
    
    
    454,238Balance at December 31, 2007
    
    
    
    
    
    
    
    
    
    
    49,741
    
    
    
    497
    
    
    
    652,688
    
    
    
    (523
    )
    
    
    (413,005
    )
    
    
    239,657Net loss (Restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,488
    )
    
    
    (33,488
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    725
    
    
    
    
    
    
    
    725Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,763
    )Issuance of common stock under
employee stock purchase plan
    
    
    
    
    
    
    
    
    
    
    270
    
    
    
    3
    
    
    
    537
    
    
    
    
    
    
    
    
    
    
    
    540Issuance of restricted stock
    
    
    
    
    
    
    
    
    
    
    1,494
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    555
    
    
    
    6
    
    
    
    1,415
    
    
    
    
    
    
    
    
    
    
    
    1,421Exercise of common stock warrants
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    8Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,731
    
    
    
    
    
    
    
    
    
    
    
    4,731Balance at December 31, 2008 (Restated)
    
    
    
    
    
    $
    
    
    
    
    52,064
    
    
    $
    506
    
    
    $
    659,379
    
    
    $
    202
    
    
    $
    (446,493
    )
    
    $
    213,594
  31




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##### Table of Contents



TOMOTHERAPY INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Years Ended December 31,2008
    
    
    2007
    
    
    2006(Restated)Cash flows from operating activities:Net income (loss)
    
    $
    (33,488
    )
    
    $
    10,662
    
    
    $
    12,775Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:Depreciation and amortization
    
    
    8,682
    
    
    
    6,503
    
    
    
    3,053Share-based compensation
    
    
    4,731
    
    
    
    3,318
    
    
    
    232Excess tax benefit from share-based compensation
    
    
    
    
    
    
    (4,763
    )
    
    
    Deferred income tax provision (benefit)
    
    
    7,269
    
    
    
    3,544
    
    
    
    (7,797
    )Noncontrolling interests
    
    
    (7,102
    )
    
    
    
    
    
    
    Other noncash items
    
    
    308
    
    
    
    877
    
    
    
    2,995Changes in operating assets and liabilities:Receivables
    
    
    1,271
    
    
    
    (25,058
    )
    
    
    (4,815
    )Inventories
    
    
    (10,269
    )
    
    
    (13,145
    )
    
    
    (11,743
    )Other assets
    
    
    (416
    )
    
    
    (608
    )
    
    
    (176
    )Accounts payable
    
    
    (9,836
    )
    
    
    3,695
    
    
    
    6,618Accrued expenses
    
    
    (4,718
    )
    
    
    10,222
    
    
    
    6,350Accrued warranty
    
    
    (542
    )
    
    
    2,666
    
    
    
    2,384Deferred revenue
    
    
    12,466
    
    
    
    (4,687
    )
    
    
    9,110Customer deposits
    
    
    (4,815
    )
    
    
    (3,282
    )
    
    
    (15,084
    )Other liabilities
    
    
    295
    
    
    
    
    
    
    
    Net cash provided by (used in) operating activities
    
    
    (36,164
    )
    
    
    (10,056
    )
    
    
    3,902Cash flows from investing activities:Purchases of property and equipment
    
    
    (7,596
    )
    
    
    (8,320
    )
    
    
    (10,974
    )Purchases of test systems
    
    
    (2,777
    )
    
    
    (2,963
    )
    
    
    (4,671
    )Purchases of short-term investments
    
    
    (87,009
    )
    
    
    
    
    
    
    Other investing activities
    
    
    (2,217
    )
    
    
    (487
    )
    
    
    (378
    )Net cash used in investing activities
    
    
    (99,599
    )
    
    
    (11,770
    )
    
    
    (16,023
    )Cash flows from financing activities:Proceeds from notes payable
    
    
    
    
    
    
    
    
    
    
    900Payments on notes payable
    
    
    (114
    )
    
    
    (34
    )
    
    
    (25
    )Proceeds from initial public offering, net of issuance costs
    
    
    
    
    
    
    184,681
    
    
    
    Proceeds from issuance of preferred stock
    
    
    
    
    
    
    
    
    
    
    8Proceeds from employee stock purchase plan
    
    
    540
    
    
    
    869
    
    
    
    Proceeds from exercises of stock options and warrants
    
    
    1,429
    
    
    
    3,713
    
    
    
    979Proceeds from issuance of CPAC common stock
    
    
    9,257
    
    
    
    
    
    
    
    Excess tax benefit from share-based compensation
    
    
    
    
    
    
    4,763
    
    
    
    Net cash provided by financing activities
    
    
    11,112
    
    
    
    193,992
    
    
    
    1,862Effect of exchange rate changes on cash and equivalents
    
    
    (1,162
    )
    
    
    (523
    )
    
    
    Increase (decrease) in cash and equivalents
    
    
    (125,813
    )
    
    
    171,643
    
    
    
    (10,259
    )Cash and equivalents at beginning of year
    
    
    191,780
    
    
    
    20,137
    
    
    
    30,396Cash and equivalents at end of year
    
    $
    65,967
    
    
    $
    191,780
    
    
    $
    20,137Supplemental disclosure of cash flow information:Interest paid
    
    $
    70
    
    
    $
    233
    
    
    $
    97Income taxes paid
    
    
    386
    
    
    
    1,165
    
    
    
    172Supplemental disclosure of noncash investing activities and financing
activities:Leasehold improvements funded by landlord
    
    $
    143
    
    
    $
    524
    
    
    $
    Reclassification of preferred stock warrants to liability
    
    
    
    
    
    
    
    
    
    
    444Reclassification of preferred stock warrants to equity
    
    
    
    
    
    
    3,630
    
    
    
    
  32




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE A  DESCRIPTION OF BUSINESS
 Organization
  Initial Public Offering
  Follow-on Public Offering
  NOTE B  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Use of Estimates
  Principles of Consolidation
 Consolidated Financial Statements
 33




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##### Table of Contents



Fair Value of Financial Instruments
  Cash and equivalents
  Investments
   December 31, 2008Unrealized
    
    
    UnrealizedCost basis
    
    
    gains
    
    
    losses
    
    
    Fair ValueU.S. Government and Agency securities
    
    $
    69,317
    
    
    $
    1,963
    
    
    $
    
    
    
    $
    71,280Corporate bonds
    
    
    17,692
    
    
    
    62
    
    
    
    (209
    )
    
    
    17,545$
    87,009
    
    
    $
    2,025
    
    
    $
    (209
    )
    
    $
    88,825
  December 31, 2008Cost basis
    
    
    Fair ValueDue in one year or less
    
    $
    16,676
    
    
    $
    16,815Due after one year through five years
    
    
    70,333
    
    
    
    72,010$
    87,009
    
    
    $
    88,825
 Fair Value Measurements Effective Date of FASB Statement No. 157
 
    
    Level 1  Quoted prices in active markets for identical assets or liabilities.
    
    Level 2  Inputs other than Level 1 that are observable, either directly or
indirectly, such as quoted prices for similar assets or liabilities, quoted prices in
markets that are not active, or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities.
    
    Level 3  Unobservable inputs that are supported by little or no market activity
and that are significant to the fair value of the assets or liabilities.
 34




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##### Table of Contents



Concentration of Credit Risk and Other Risks and Uncertainties
    Accounts Receivable
   Inventories
  35




---



##### Table of Contents



December 31,2008
    
    
    2007Raw materials
    
    $
    47,721
    
    
    $
    41,405Work-in-process
    
    
    5,614
    
    
    
    8,722Finished goods
    
    
    10,648
    
    
    
    3,044$
    63,983
    
    
    $
    53,171
 Property and Equipment
  December 31,2008
    
    
    2007Furniture and equipment
    
    $
    11,019
    
    
    $
    8,659Computer equipment
    
    
    6,292
    
    
    
    5,533Computer software
    
    
    5,140
    
    
    
    4,867Leasehold improvements
    
    
    9,784
    
    
    
    9,150In process
    
    
    2,704
    
    
    
    12034,939
    
    
    
    28,329Less: Accumulated depreciation and amortization
    
    
    (12,782
    )
    
    
    (8,435
    )$
    22,157
    
    
    $
    19,894
  Furniture and equipment
    
    5 to 10 yearsComputer equipment and software
    
    3 to 5 yearsLeasehold improvements
    
    Lesser of useful life or the remaining lease term
  Long-lived Assets
 Accounting for the Impairment on Disposal
of Long-lived Assets
  Accrued Expenses
  December 31,2008
    
    
    2007(Restated)Commissions, severance and payroll-related
    
    $
    6,290
    
    
    $
    6,597Bonuses
    
    
    108
    
    
    
    5,249Other
    
    
    11,926
    
    
    
    9,853$
    18,324
    
    
    $
    21,699
 36




---



##### Table of Contents



Warranty Cost
   December 31,2008
    
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    7,973
    
    
    $
    5,307
    
    
    $
    2,923Charged to cost of revenue
    
    
    11,049
    
    
    
    12,600
    
    
    
    10,138Adjustments related to change in estimate
    
    
    1,180
    
    
    
    (86
    )
    
    
    (244
    )Actual product warranty expenditures
    
    
    (12,771
    )
    
    
    (9,848
    )
    
    
    (7,510
    )Balance, end of period
    
    $
    7,431
    
    
    $
    7,973
    
    
    $
    5,307
 Revenue Recognition
 Revenue
Recognition Revenue Arrangements with
Multiple Deliverables
    37




---



##### Table of Contents



Software Revenue Recognition Software Revenue Recognition with Respect to Certain Agreements.
  Shipping and Handling Costs
 Accounting for Shipping and Handling Fees and Costs,
 Research and Development Costs
  Software Development Costs
  Advertising Expenses
  Share-Based Compensation
 Share-Based
Payment
 38




---



##### Table of Contents



Years ended December 31,2008
    
    
    2007
    
    
    2006Cost of revenue
    
    $
    820
    
    
    $
    634
    
    
    $
    136Research and development
    
    
    1,464
    
    
    
    1,049
    
    
    
    61Selling, general and administrative
    
    
    2,447
    
    
    
    1,635
    
    
    
    35Income tax benefit
    
    
    
    
    
    
    (449
    )
    
    
    (41
    )$
    4,731
    
    
    $
    2,869
    
    
    $
    191
 Foreign Currency
  Income Taxes
 Accounting for Income
Taxes .
 , Accounting for Uncertainty
in Income Taxes  an Interpretation of FASB Statement No. 109
 Other Comprehensive Income (Loss)
  39




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##### Table of Contents



Years ended December 31,2008
    
    
    2007
    
    
    2006Foreign currency translation adjustments
    
    $
    (401
    )
    
    $
    (523
    )
    
    $
    Net unrealized investment gain (loss), net of tax
    
    
    1,126
    
    
    
    
    
    
    
    $
    725
    
    
    $
    (523
    )
    
    $
    
 Stock Split
  Net Income (Loss) Per Share of Common Stock
  Years ended December 31,2008
    
    
    2007
    
    
    2006(Restated)Basic and diluted:Income (loss) before cumulative effect of change in
accounting principle
    
    $
    (0.67
    )
    
    $
    0.30
    
    
    $
    1.68Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (0.24
    )Net income (loss)
    
    $
    (0.67
    )
    
    $
    0.30
    
    
    $
    1.44Net loss attributable to common shareholders
    
    $
    (0.67
    )
    
    $
    (6.35
    )
    
    $
    (3.78
    )Weighted average common shares outstanding used in
computing net loss per share attributable to common
shareholders:Basic and diluted
    
    
    50,199
    
    
    
    35,731
    
    
    
    8,856
    Years ended December 31,2008
    
    2007
    
    2006Stock options and warrants
    
    
    5,776
    
    
    
    6,338
    
    
    
    9,622Restricted stock
    
    
    1,472
    
    
    
    
    
    
    
    Preferred stock (as if converted)
    
    
    
    
    
    
    
    
    
    
    25,221Contingent common shares
    
    
    
    
    
    
    
    
    
    
    1,2897,248
    
    
    
    6,338
    
    
    
    36,132
 40




---



##### Table of Contents



Years ended December 31,2008
    
    
    2007
    
    
    2006(Restated)HistoricalNumerator:Net loss attributable to common shareholders
    
    $
    (33,488
    )
    
    $
    (226,920
    )
    
    $
    (33,478
    )Denominator for basic and diluted net loss per share:Weighted-average shares of common stock outstanding
    
    
    50,199
    
    
    
    35,731
    
    
    
    8,856Net loss attributable to common shareholders per share  basic and
diluted
    
    $
    (0.67
    )
    
    $
    (6.35
    )
    
    $
    (3.78
    )Pro forma (unaudited)Numerator:Net loss attributable to common shareholders
    
    
    
    
    
    $
    (226,920
    )
    
    $
    (33,478
    )Pro forma adjustment to add back accretion of redeemable
convertible preferred stock
    
    
    
    
    
    
    237,582
    
    
    
    46,253Pro forma net income
    
    
    
    
    
    $
    10,662
    
    
    $
    12,775Denominator for pro forma basic net income per share:Weighted-average shares of common stock outstanding
    
    
    
    
    
    
    35,731
    
    
    
    8,856Pro forma adjustments to reflect assumed conversion of preferred
stock (as if converted)
    
    
    
    
    
    
    8,845
    
    
    
    25,221Pro forma adjustment to reflect assumed conversion of contingent
common shares (as if converted)
    
    
    
    
    
    
    452
    
    
    
    1,289Shares used to compute pro forma basic net income per share
    
    
    
    
    
    
    45,028
    
    
    
    35,366Pro forma basic net income per share
    
    
    
    
    
    $
    0.24
    
    
    $
    0.36Denominator for pro forma diluted net income per share:Weighted-average shares of common stock outstanding
    
    
    
    
    
    
    35,731
    
    
    
    8,856Pro forma adjustments to reflect assumed conversion of preferred
stock (as if converted)
    
    
    
    
    
    
    8,845
    
    
    
    25,221Pro forma adjustment to reflect assumed conversion of contingent
common shares (as if converted)
    
    
    
    
    
    
    452
    
    
    
    1,289Pro forma adjustments to reflect assumed exercise of warrants and
stock options using treasury stock method
    
    
    
    
    
    
    4,891
    
    
    
    4,764Shares used to compute pro forma diluted net income per share
    
    
    
    
    
    
    49,919
    
    
    
    40,130Pro forma diluted net income per share
    
    
    
    
    
    $
    0.21
    
    
    $
    0.32Pro forma outstanding anti-dilutive securities not included in diluted
earnings per share calculationStock options and warrants
    
    
    
    
    
    
    173
    
    
    
    2,152
 41




---



##### Table of Contents



Segment Information
 Disclosures about Segments of an Enterprise and Related Information,
  Years ended December 31,2008
    
    
    2007
    
    
    2006Product revenue
    
    $
    174,929
    
    
    $
    213,900
    
    
    $
    147,974Service and other revenue
    
    
    29,660
    
    
    
    18,910
    
    
    
    8,128$
    204,589
    
    
    $
    232,810
    
    
    $
    156,102
  Years ended December 31,2008
    
    
    2007
    
    
    2006North America
    
    $
    135,977
    
    
    $
    129,493
    
    
    $
    88,937Europe
    
    
    49,588
    
    
    
    61,337
    
    
    
    33,586Asia-Pacific
    
    
    19,024
    
    
    
    41,980
    
    
    
    33,579$
    204,589
    
    
    $
    232,810
    
    
    $
    156,102
 Change in Accounting Principle
 Issuers Accounting under FASB
Statement No. 150 for Freestanding Warrants and Other Similar Instruments on Shares That Are
Redeemable
 Recent Accounting Pronouncements
 Fair Value Measurements Effective Date of FASB Statement No. 157
 42




---



##### Table of Contents



The Fair Value Option for Financial Assets and
Financial Liabilities
 Business Combinations Accounting and Reporting of Noncontrolling Interest in Consolidated Financial
Statements, an amendment of ARB No. 51
 Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133
 Determination of the Useful
Life of Intangible Assets . Goodwill and Other Intangible Assets
 The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles
 NOTE C  RESTATEMENTS AND REVISIONS
 Restatements
  43




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CONSOLIDATED BALANCE SHEETS
(In thousands)
 December 31, 2008As Originally
    
    
    
    
    
    
    AsReported
    
    
    Adjustment
    
    
    RestatedASSETSCash and equivalents
    
    $
    65,967
    
    
    $
    
    
    
    $
    65,967Short-term investments
    
    
    88,825
    
    
    
    
    
    
    
    88,825Receivables, net
    
    
    41,259
    
    
    
    
    
    
    
    41,259Inventories, net
    
    
    63,983
    
    
    
    
    
    
    
    63,983Deferred tax assets
    
    
    
    
    
    
    496
    
    
    
    496Prepaid expenses and other current assets
    
    
    1,890
    
    
    
    
    
    
    
    1,890Total current assets
    
    
    261,924
    
    
    
    496
    
    
    
    262,420Property and equipment, net
    
    
    22,157
    
    
    
    
    
    
    
    22,157Other non-current assets, net
    
    
    11,851
    
    
    
    
    
    
    
    11,851TOTAL ASSETS
    
    $
    295,932
    
    
    $
    496
    
    
    $
    296,428LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable
    
    $
    7,804
    
    
    $
    
    
    
    $
    7,804Accrued expenses
    
    
    18,471
    
    
    
    (147
    )
    
    
    18,324Accrued warranty
    
    
    7,431
    
    
    
    
    
    
    
    7,431Deferred revenue
    
    
    28,139
    
    
    
    
    
    
    
    28,139Customer deposits
    
    
    15,494
    
    
    
    
    
    
    
    15,494Total current liabilities
    
    
    77,339
    
    
    
    (147
    )
    
    
    77,192Other non-current liabilities
    
    
    7,207
    
    
    
    (3,720
    )
    
    
    3,487TOTAL LIABILITIES
    
    
    84,546
    
    
    
    (3,867
    )
    
    
    80,679Noncontrolling interests
    
    
    2,155
    
    
    
    
    
    
    
    2,155SHAREHOLDERS EQUITYCommon stock
    
    
    506
    
    
    
    
    
    
    
    506Additional paid-in capital
    
    
    658,416
    
    
    
    963
    
    
    
    659,379Accumulated other comprehensive income (loss)
    
    
    202
    
    
    
    
    
    
    
    202Accumulated deficit
    
    
    (449,893
    )
    
    
    3,400
    
    
    
    (446,493
    )TOTAL SHAREHOLDERS EQUITY
    
    
    209,231
    
    
    
    4,363
    
    
    
    213,594TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY
    
    $
    295,932
    
    
    $
    496
    
    
    $
    296,428
 CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
 Year ended December 31, 2008As Originally
    
    
    
    
    
    
    AsReported
    
    
    Adjustment
    
    
    RestatedLoss before income tax and noncontrolling interests
    
    $
    (33,659
    )
    
    $
    
    
    
    $
    (33,659
    )Income tax expense
    
    
    10,331
    
    
    
    (3,400
    )
    
    
    6,931Loss before noncontrolling interests
    
    
    (43,990
    )
    
    
    3,400
    
    
    
    (40,590
    )Noncontrolling interests
    
    
    7,102
    
    
    
    
    
    
    
    7,102Net loss
    
    $
    (36,888
    )
    
    $
    3,400
    
    
    $
    (33,488
    )Net loss per share  basic and diluted
    
    $
    (0.73
    )
    
    $
    0.06
    
    
    $
    (0.67
    )
 44




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##### Table of Contents



Revisions
  TOMOTHERAPY INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS
(In thousands)
 December 31, 2007As Originally
    
    
    
    
    
    
    AsReported
    
    
    Adjustment
    
    
    RevisedASSETSTotal current assets
    
    $
    294,114
    
    
    
    
    
    
    $
    294,114Property and equipment, net
    
    
    19,894
    
    
    
    
    
    
    
    19,894Deferred tax assets
    
    
    6,027
    
    
    
    (1,535
    )
    
    
    4,492Other non-current assets, net
    
    
    6,642
    
    
    
    
    
    
    
    6,642TOTAL ASSETS
    
    $
    326,677
    
    
    $
    (1,535
    )
    
    $
    325,142LIABILITIES AND SHAREHOLDERS EQUITYTotal current liabilities
    
    $
    82,665
    
    
    
    
    
    
    $
    82,665Other non-current liabilities
    
    
    5,318
    
    
    
    (2,498
    )
    
    
    2,820TOTAL LIABILITIES
    
    
    87,983
    
    
    
    (2,498
    )
    
    
    85,485SHAREHOLDERS EQUITYCommon stock
    
    
    497
    
    
    
    
    
    
    
    497Additional paid-in capital
    
    
    651,725
    
    
    
    963
    
    
    
    652,688Accumulated other comprehensive income (loss)
    
    
    (523
    )
    
    
    
    
    
    
    (523
    )Accumulated deficit
    
    
    (413,005
    )
    
    
    
    
    
    
    (413,005
    )TOTAL SHAREHOLDERS EQUITY
    
    
    238,694
    
    
    
    963
    
    
    
    239,657TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY
    
    $
    326,677
    
    
    $
    (1,535
    )
    
    $
    325,142
 CONSOLIDATED STATEMENTS OF CASH FLOWS 
(In thousands)
 Year
Ended December 31, 2007As Originally
    
    
    
    
    
    
    AsReported
    
    
    Adjustment
    
    
    RevisedCash
flows from operating activities:Net income
    
    $
    10,662
    
    
    $
    
    
    
    $
    10,662Excess tax benefit from share-based compensation
    
    
    (3,800
    )
    
    
    (963
    )
    
    
    (4,763
    )Other operating activities
    
    
    (15,955
    )
    
    
    
    
    
    
    (15,955
    )Net cash used in operating activities
    
    
    (9,093
    )
    
    
    (963
    )
    
    
    (10,056
    )Net cash used in investing activities
    
    
    (11,770
    )
    
    
    
    
    
    
    (11,770
    )Cash
flows from financing activities:Excess tax benefit from share-based compensation
    
    
    3,800
    
    
    
    963
    
    
    
    4,763Other financing activities
    
    
    189,229
    
    
    
    
    
    
    
    189,229Net cash provided by financing activities
    
    
    193,029
    
    
    
    963
    
    
    
    193,992Effect of exchange rate changes on cash and equivalents
    
    
    (523
    )
    
    
    
    
    
    
    (523
    )Increase in cash and equivalents
    
    
    171,643
    
    
    
    
    
    
    
    171,643Cash and equivalents at beginning of year
    
    
    20,137
    
    
    
    
    
    
    
    20,137Cash and equivalents at end of year
    
    $
    191,780
    
    
    $
    
    
    
    $
    191,780
 NOTE D  LONG-TERM DEBT AND NOTES PAYABLE
   45




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Years ended December 31,2009
    
    $
    1332010
    
    
    1372011
    
    
    3302012
    
    
    1022013
    
    
    25Thereafter
    
    
    $
    727
 NOTE E  INCOME TAXES
  Years Ended December 31,2008
    
    
    2007
    
    
    2006(Restated)Current:Federal
    
    $
    12
    
    
    $
    1,269
    
    
    $
    172State
    
    
    (396
    )
    
    
    841
    
    
    
    441Foreign
    
    
    46
    
    
    
    134
    
    
    
    Total current
    
    
    (338
    )
    
    
    2,244
    
    
    
    613Deferred
    
    
    7,269
    
    
    
    3,544
    
    
    
    (7,797
    )Total provision (benefit) for income tax
    
    $
    6,931
    
    
    $
    5,788
    
    
    $
    (7,184
    )
  Years Ended December 31,2008
    
    2007
    
    2006(Restated)Provision at statutory rate
    
    
    (35.0
    )%
    
    
    35.0
    %
    
    
    35.0
    %Permanent differences
    
    
    3.1
    %
    
    
    5.2
    %
    
    
    2.1
    %State income taxes, net of federal effect
    
    
    (1.8
    )%
    
    
    2.2
    %
    
    
    5.9
    %Change in valuation allowance including
federal net operating losses and credits
    
    
    69.9
    %
    
    
    1.7
    %
    
    
    (135.4
    )%Change in statutory rate for deferred taxes
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    (3.6
    )%Nondeductible warrant expense
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    4.3
    %Research and development credits
    
    
    (3.7
    )%
    
    
    (6.6
    )%
    
    
    0.0
    %Other
    
    
    (5.3
    )%
    
    
    (2.3
    )%
    
    
    (1.2
    )%Effective income tax rate
    
    
    27.2
    %
    
    
    35.2
    %
    
    
    (92.9
    )%
 46




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##### Table of Contents



Years Ended December 31,2008
    
    
    2007(Restated)Deferred tax assets:Federal and state operating loss carryforwards
    
    $
    8,625
    
    
    $
    1,441Tax credit carryforwards
    
    
    1,768
    
    
    
    840Warranty and bad debt reserves
    
    
    3,537
    
    
    
    4,029Inventory
    
    
    4,815
    
    
    
    3,375Employee benefits
    
    
    2,232
    
    
    
    666Other
    
    
    712
    
    
    
    484Total deferred tax assets
    
    
    21,689
    
    
    
    10,835Deferred tax liabilities:Tax depreciation in excess of book depreciation
    
    
    694
    
    
    
    654Unrealized gains
    
    
    690
    
    
    
    Patents
    
    
    418
    
    
    
    235Other
    
    
    1,038
    
    
    
    495Total deferred tax liabilities
    
    
    2,840
    
    
    
    1,384Net deferred tax asset
    
    
    18,849
    
    
    
    9,451Valuation allowance
    
    
    (19,355
    )
    
    
    (1,526
    )$
    (506
    )
    
    $
    7,925
      47




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##### Table of Contents



Accounting for Contingencies
  December 31,2008
    
    
    2007Balance, beginning of period
    
    $
    3,009
    
    
    $
    1,765Additions based on tax positions related to the period
    
    
    1,053
    
    
    
    1,244Balance, end of period
    
    $
    4,062
    
    
    $
    3,009
 NOTE F  COMMITMENTS AND CONTINGENCIES
  Pending Litigation
   48




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##### Table of Contents



Operating leases
    Years ended December 31,2009
    
    $
    3,4872010
    
    
    3,5712011
    
    
    3,4212012
    
    
    3,0862013
    
    
    2,972Thereafter
    
    
    5,241$
    21,778
 NOTE G  TEMPORARY EQUITY AND SHAREHOLDERS EQUITY (DEFICIT)
 Redeemable Convertible Preferred Stock
  Warrants
  Issuers Accounting under
FASB Statement No. 150 for Freestanding Warrants and Other Similar Instruments on Shares That Are
Redeemable
  49




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##### Table of Contents



Contingent Common Shares
 Application of Issue No 98-5 to Certain Convertible Instruments .
 NOTE H  STOCK INCENTIVE PLANS
   Incentive Stock Options
    
    Restricted StockWeighted-Shares
    
    Number of
    
    Weighted-
    
    
    
    
    
    AverageAvailable
    
    Options
    
    Average
    
    Number of
    
    Grant Datefor Grant
    
    Outstanding
    
    Exercise Price
    
    Shares
    
    Fair ValueBalance at December 31, 2005
    
    
    1,309
    
    
    
    7,702
    
    
    $
    2.06
    
    
    
    
    
    
    $
    Authorized
    
    
    3,264
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Granted
    
    
    (2,341
    )
    
    
    2,341
    
    
    
    6.63
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    (826
    )
    
    
    1.18
    
    
    
    
    
    
    
    Cancelled
    
    
    61
    
    
    
    (61
    )
    
    
    3.04
    
    
    
    
    
    
    
    Balance at December 31, 2006
    
    
    2,293
    
    
    
    9,156
    
    
    
    3.30
    
    
    
    
    
    
    
    Granted
    
    
    (232
    )
    
    
    232
    
    
    
    20.65
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    (2,850
    )
    
    
    1.12
    
    
    
    
    
    
    
    Cancelled
    
    
    16
    
    
    
    (207
    )
    
    
    4.80
    
    
    
    
    
    
    
    Balance at December 31, 2007
    
    
    2,077
    
    
    
    6,331
    
    
    
    4.24
    
    
    
    
    
    
    
    Granted
    
    
    (1,860
    )
    
    
    340
    
    
    
    8.26
    
    
    
    1,520
    
    
    
    6.02Exercised or Issued
    
    
    
    
    
    
    (555
    )
    
    
    2.56
    
    
    
    (21
    )
    
    
    2.56Cancelled
    
    
    49
    
    
    
    (342
    )
    
    
    6.95
    
    
    
    (27
    )
    
    
    6.10Balance at December 31, 2008
    
    
    266
    
    
    
    5,774
    
    
    $
    5.17
    
    
    
    1,472
    
    
    $
    6.02Exercisable at December 31, 2008
    
    
    
    
    
    
    3,437
    
    
    $
    4.37
    
    
    
    
    
    
    $
    
 50




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##### Table of Contents



Incentive Stock Options
    
    Restricted StockWeighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    AverageNumber of
    
    Grant Date
    
    Number of
    
    Grant DateShares
    
    Fair Value
    
    Shares
    
    Fair ValueBalance at December 31, 2005
    
    
    4,996
    
    
    $
    2.89
    
    
    
    
    
    
    $
    Granted
    
    
    2,341
    
    
    
    6.63
    
    
    
    
    
    
    
    Vested
    
    
    (1,544
    )
    
    
    2.55
    
    
    
    
    
    
    
    Forfeited
    
    
    (133
    )
    
    
    3.31
    
    
    
    
    
    
    
    Balance at December 31, 2006
    
    
    5,660
    
    
    
    4.52
    
    
    
    
    
    
    
    Granted
    
    
    232
    
    
    
    20.65
    
    
    
    
    
    
    
    Vested
    
    
    (1,373
    )
    
    
    3.28
    
    
    
    
    
    
    
    Forfeited
    
    
    (98
    )
    
    
    6.25
    
    
    
    
    
    
    
    Balance at December 31, 2007
    
    
    4,421
    
    
    
    5.71
    
    
    
    
    
    
    
    Granted
    
    
    340
    
    
    
    8.26
    
    
    
    1,520
    
    
    
    6.02Vested
    
    
    (2,189
    )
    
    
    5.19
    
    
    
    (32
    )
    
    
    6.10Forfeited
    
    
    (235
    )
    
    
    7.91
    
    
    
    (16
    )
    
    
    6.10Balance at December 31, 2008
    
    
    2,337
    
    
    $
    6.36
    
    
    
    1,472
    
    
    $
    6.02
  Number of
    
    
    Remaining
    
    
    Number of
    
    
    Weighted-Options
    
    
    Contractual Life
    
    
    Options
    
    
    AverageRange of Exercise Price
    
    Outstanding
    
    
    (Years)
    
    
    Exercisable
    
    
    Exercise Price$0.10 - $2.38
    
    
    242
    
    
    
    5.01
    
    
    
    242
    
    
    $
    0.86$2.82
    
    
    1,590
    
    
    
    6.05
    
    
    
    1,032
    
    
    
    2.82$3.09 - $3.46
    
    
    1,444
    
    
    
    3.33
    
    
    
    1,038
    
    
    
    3.46$4.50 - $6.10
    
    
    254
    
    
    
    4.29
    
    
    
    112
    
    
    
    5.43$6.75
    
    
    1,877
    
    
    
    3.92
    
    
    
    950
    
    
    
    6.75$9.76 - $27.20
    
    
    367
    
    
    
    4.95
    
    
    
    63
    
    
    
    20.175,774
    
    
    
    4.48
    
    
    
    3,437
    
    
    
    4.37Aggregate intrinsic value (in thousands)
    
    $
    368
    
    
    
    
    
    
    $
    368
    
    
    On December 29, 2005, the Company sold 2,356,435 shares of Series E convertible
preferred stock at $5.94 per share for net proceeds of $13.9 million. Using this
information, the Company engaged an independent valuation firm, Virchow Krause to
perform a valuation of its common shares based on this preferred stock transaction. The
independent valuation
 51




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##### Table of Contents



report concluded that the common stock was valued at $4.99 per share as of December 29, 2005.
This valuation was then used for the option grant made in January 2006.
    
    In the second quarter of 2006, the Companys Board of Directors determined that an
updated independent valuation should be performed. The Company engaged the same
independent valuation firm that completed the valuation for the January 2006 grants to
perform a valuation of all classes of stock. The independent valuation firm, Virchow
Krause issued a report dated May 16, 2006, which concluded that the Companys common
stock was valued at $5.35 per share as of March 31, 2006. This valuation was then used
for the option grants made in May and July 2006.
    
    On October 23, 2006, the Chairman of the Companys Board of Directors, T. Rockwell
Mackie, sold an aggregate of 190,400 shares of common stock to two third-party
investors, and then President, Paul Reckwerdt, sold 190,400 common shares to a single
third-party investor. The purchase price of all these shares was $6.75 per share
resulting in aggregate proceeds of $1.3 million to each seller. Given the significant
size of the transactions and the fact that these shares were sold to third-party
investors, the Company concluded that its common stock should be valued at $6.75 per
share as of this date. Stock option grants were made based on this price in October,
November and early December 2006. Subsequent to the December 7, 2006 option grant date,
the Companys Board of Directors determined based upon an independent valuation
performed as of December 31, 2006, that the fair value per share was $8.40.
   Number of
    
    
    
    
    
    Fair Value
    
    IntrinsicOptions
    
    Exercise
    
    Estimated
    
    ValueDate of Grant
    
    Granted
    
    Price
    
    per Share
    
    per ShareJanuary 2006
    
    
    34
    
    
    $
    4.99
    
    
    $
    4.99
    
    
    $
    May 2006
    
    
    47
    
    
    
    5.35
    
    
    
    5.35
    
    
    
    July 2006
    
    
    109
    
    
    
    5.35
    
    
    
    5.35
    
    
    
    October 2006
    
    
    190
    
    
    
    6.75
    
    
    
    6.75
    
    
    
    November 2006
    
    
    3
    
    
    
    6.75
    
    
    
    6.75
    
    
    
    December 2006
    
    
    1,958
    
    
    
    6.75
    
    
    
    8.40
    
    
    
    1.65
 Accounting for Stock Issued to Employees
  52




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##### Table of Contents



Years Ended December 31,2008
    
    2007
    
    2006Expected term (years)
    
    
    4.25
    
    
    
    4.25
    
    
    
    4.25Risk-free interest rate
    
    
    1.6
    %
    
    
    3.4
    %
    
    
    4.5
    %Expected volatility
    
    
    46-53
    %
    
    
    45-46
    %
    
    
    65
    %Expected dividend
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected forfeiture rate
    
    
    5.5
    %
    
    
    5.5
    %
    
    
    2.9
    %Weighted-average fair value at grant date
    
    $
    8.26
    
    
    $
    20.65
    
    
    $
    8.01
 NOTE I  RETIREMENT PLAN
  NOTE J  EMPLOYEE STOCK PURCHASE PLAN
   NOTE K  RELATED PARTY TRANSACTIONS
    53




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##### Table of Contents



NOTE L  INVESTMENT IN COMPACT PARTICLE ACCELERATION CORPORATION
    CONSOLIDATING BALANCE SHEETS
(In thousands)
(unaudited)
 December 31, 2008TomoTherapy
    
    CPAC
    
    Adjustments
    
    Consolidated(Restated)
    
    
    
    
    
    (Restated)Current assets
    
    $
    261,794
    
    
    $
    806
    
    
    $
    (180
    )
    
    $
    262,420Investment in affiliate
    
    
    1,901
    
    
    
    
    
    
    
    (1,901
    )
    
    
    Other non-current assets, net
    
    
    33,353
    
    
    
    2,556
    
    
    
    (1,901
    )
    
    
    34,008TOTAL ASSETS
    
    $
    297,048
    
    
    $
    3,362
    
    
    $
    (3,982
    )
    
    $
    296,428Current liabilities
    
    $
    77,051
    
    
    $
    321
    
    
    $
    (180
    )
    
    $
    77,192Other non-current liabilities
    
    
    3,465
    
    
    
    22
    
    
    
    
    
    
    
    3,487Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    2,155
    
    
    
    2,155Common stock
    
    
    506
    
    
    
    178
    
    
    
    (178
    )
    
    
    506Additional paid-in capital
    
    
    661,280
    
    
    
    10,980
    
    
    
    (12,881
    )
    
    
    659,379Accumulated other comprehensive loss
    
    
    202
    
    
    
    
    
    
    
    
    
    
    
    202Accumulated deficit
    
    
    (445,456
    )
    
    
    (8,139
    )
    
    
    7,102
    
    
    
    (446,493
    )TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    297,048
    
    
    $
    3,362
    
    
    $
    (3,982
    )
    
    $
    296,428
 54




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##### Table of Contents



CONSOLIDATING STATEMENTS OF OPERATIONS
(In thousands)
(unaudited)
 Year ended December 31, 2008TomoTherapy
    
    CPAC
    
    Adjustments
    
    Consolidated(Restated)
    
    
    
    
    
    (Restated)Revenue
    
    $
    204,589
    
    
    $
    
    
    
    $
    
    
    
    $
    204,589Cost of revenue
    
    
    155,083
    
    
    
    
    
    
    
    
    
    
    
    155,083Gross profit
    
    
    49,506
    
    
    
    
    
    
    
    
    
    
    
    49,506Operating expenses:Research and development
    
    
    35,316
    
    
    
    7,241
    
    
    
    
    
    
    
    42,557Selling, general and administrative
    
    
    45,411
    
    
    
    925
    
    
    
    
    
    
    
    46,336Total operating expenses
    
    
    80,727
    
    
    
    8,166
    
    
    
    
    
    
    
    88,893Loss from operations
    
    
    (31,221
    )
    
    
    (8,166
    )
    
    
    
    
    
    
    (39,387
    )Other income
    
    
    5,701
    
    
    
    27
    
    
    
    
    
    
    
    5,728Loss before income tax and
noncontrolling interests
    
    
    (25,520
    )
    
    
    (8,139
    )
    
    
    
    
    
    
    (33,659
    )Income tax expense
    
    
    6,931
    
    
    
    
    
    
    
    
    
    
    
    6,931Loss before noncontrolling interests
    
    
    (32,451
    )
    
    
    (8,139
    )
    
    
    
    
    
    
    (40,590
    )Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    7,102
    
    
    
    7,102Net income (loss)
    
    $
    (32,451
    )
    
    $
    (8,139
    )
    
    $
    7,102
    
    
    $
    (33,488
    )
 NOTE M  ACQUISITION
  Business Combinations
 FinalPurchase PriceAllocation(In thousands)Tangible assets
    
    $
    883Intangible assets
    
    
    1,315Total assets acquired
    
    $
    2,198Liabilities
    
    
    (980
    )Net assets acquired
    
    $
    1,218
  55




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##### Table of Contents



NOTE N  OTHER EVENTS
   NOTE O  QUARTERLY FINANCIAL DATA (unaudited)
 Fiscal year 2008First
    
    Second
    
    Third
    
    Fourth
    
    Total(In thousands, except per share amounts)
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter (1)
    
    Year(Restated)
    
    (Restated)Revenue
    
    $
    38,900
    
    
    $
    52,021
    
    
    $
    27,374
    
    
    $
    86,294
    
    
    $
    204,589Gross profit (loss)
    
    
    8,218
    
    
    
    12,525
    
    
    
    (907
    )
    
    
    29,670
    
    
    
    49,506Income (loss) from operations
    
    
    (11,975
    )
    
    
    (11,154
    )
    
    
    (23,401
    )
    
    
    7,143
    
    
    
    (39,387
    )Net loss
    
    
    (6,172
    )
    
    
    (6,861
    )
    
    
    (12,953
    )
    
    
    (7,502
    )
    
    
    (33,488
    )Basic and diluted net loss per share
    
    $
    (0.12
    )
    
    $
    (0.14
    )
    
    $
    (0.26
    )
    
    $
    (0.15
    )
    
    $
    (0.67
    )Shares used in basic and diluted per share calculation
    
    
    50,024
    
    
    
    50,173
    
    
    
    50,244
    
    
    
    50,352
    
    
    
    50,199
 Fiscal year 2007First
    
    Second
    
    Third
    
    Fourth
    
    TotalQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    YearRevenue
    
    $
    51,163
    
    
    $
    43,715
    
    
    $
    59,221
    
    
    $
    78,711
    
    
    $
    232,810Gross profit
    
    
    21,811
    
    
    
    14,524
    
    
    
    22,070
    
    
    
    28,268
    
    
    
    86,673Income (loss) from operations
    
    
    6,031
    
    
    
    (2,261
    )
    
    
    1,320
    
    
    
    4,972
    
    
    
    10,062Net income (loss)
    
    
    3,886
    
    
    
    (653
    )
    
    
    2,583
    
    
    
    4,846
    
    
    
    10,662Net income (loss) attributable to common shareholders
    
    
    (131,062
    )
    
    
    (103,287
    )
    
    
    2,583
    
    
    
    4,846
    
    
    
    (226,920
    )Basic net income (loss) per share
    
    
    (12.13
    )
    
    
    (3.15
    )
    
    
    0.05
    
    
    
    0.10
    
    
    
    (6.35
    )Diluted net income (loss) per share
    
    $
    (12.13
    )
    
    $
    (3.15
    )
    
    $
    0.05
    
    
    $
    0.09
    
    
    $
    (6.35
    )Shares used in basic per share calculation
    
    
    10,804
    
    
    
    32,819
    
    
    
    49,130
    
    
    
    49,547
    
    
    
    35,731Shares used in diluted per share calculation
    
    
    10,804
    
    
    
    32,819
    
    
    
    54,405
    
    
    
    54,066
    
    
    
    35,731
 
 (1)
    
    During the quarter ended December 31, 2008, the Company established a 100% valuation allowance
reserve against its net deferred tax assets of $17.8 million. The Company determined that its
financial statements as of December 31, 2008 and for the year then ended required restatement to
correct  errors in the accounting for income taxes. See Note C to our consolidated financial statements for further
information relating to the restatement. 56




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 TomoTherapy Incorporated
 Internal Control  Integrated Framework
      Internal
Control  Integrated Framework
 57




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##### Table of Contents



/s/ GRANT THORNTON LLPMadison, Wisconsin  58




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##### Table of Contents



Item 9A. Controls and Procedures
 Evaluation of disclosure controls and procedures.
 Report of management on internal control over financial reporting
  Internal
Control-Integrated Framework
  Changes in internal control over financial reporting
 59




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 1.
    
    Financial StatementsThe financial statements of TomoTherapy Incorporated are set forth in Item 8 of this Report.2.
    
    Financial Statement Schedule
 SCHEDULE IIValuation and Qualifying AccountsBalance at
    
    
    
    
    
    
    
    
    
    Balance at(in thousands)
    
    
    
    beginning of
    
    
    
    
    
    
    
    
    
    end ofDecember 31,
    
    Description
    
    year
    
    Increases
    
    Deductions
    
    year2008
    
    
    Valuation allowance for deferred tax assets (Restated) (1)
    
    $
    1,526
    
    
    $
    17,877
    
    
    $
    48
    
    
    $
    19,3552007
    
    
    Valuation allowance for deferred tax assets
    
    $
    1,253
    
    
    $
    297
    
    
    $
    24
    
    
    $
    1,5262006
    
    
    Valuation allowance for deferred tax assets
    
    $
    13,137
    
    
    $
    113
    
    
    $
    11,997
    
    
    $
    1,2532008
    
    
    Reserve for excess and obsolete inventory
    
    $
    9,243
    
    
    $
    1,549
    
    
    $
    2,439
    
    
    $
    8,3532007
    
    
    Reserve for excess and obsolete inventory
    
    $
    5,261
    
    
    $
    5,973
    
    
    $
    1,991
    
    
    $
    9,2432006
    
    
    Reserve for excess and obsolete inventory
    
    $
    1,496
    
    
    $
    3,945
    
    
    $
    180
    
    
    $
    5,2612008
    
    
    Allowance for doubtful accounts receivable
    
    $
    
    
    
    $
    928
    
    
    $
    
    
    
    $
    9282007
    
    
    Allowance for doubtful accounts receivable
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2006
    
    
    Allowance for doubtful accounts receivable
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    We determined that our financial statements as of December 31, 2008 and for the year
then ended required restatement to correct errors  in the accounting for
income taxes. See Note C to our consolidated
financial statements for further information relating to the restatement.  3.
    
    ExhibitsThe exhibit list in the Index to Exhibits is incorporated herein by reference as the list of
exhibits required as part of this report.
 60




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##### Table of Contents



ExhibitNumber
    
    Description3.1 (9)
    
    Amended and Restated Articles of Incorporation of the Company3.2 (9)
    
    Amended and Restated Bylaws of the Company4.1 (2)
    
    Form of the Companys Common Stock Certificate10.1 (1)
    
    Lease Agreement, dated January 26, 2005, between the Company and Old Sauk Trails Park
Limited Partnership10.2 (1)
    
    Lease Agreement, dated October 28, 2005, between the Company and Adelphia, LLC10.3 (1)+
    
    Incentive Stock Option Plan, as amended, and forms of option agreements thereunder10.4 (1)+
    
    2000 Stock Option Plan, as amended, and forms of option agreements thereunder10.5 (1)+
    
    2002 Stock Option Plan, as amended, and forms of option agreements thereunder10.6 (1)
    
    Standard Terms and Conditions of Sale10.7 (1)
    
    International Standard Terms and Conditions of Sale10.8 (1)
    
    Tomo Lifecycle Care and Partnership Terms and Conditions10.9 (1)
    
    Logistics Services Agreement, dated September 7, 2005, between the Company and Kuehne +
Nagel, Inc.10.10 (2)
    
    Development and OEM Supply Agreement, dated January 27, 2003, between the Company and
Analogic Corporation10.11 (2)+
    
    2007 Equity Incentive Plan10.12 (2)+
    
    2007 Employee Stock Purchase Plan10.13 (2)
    
    Form of Noncompetition Agreement10.14 (2)
    
    Form of Assignment of Inventions Agreement10.15 (2)
    
    Form of Confidentiality Agreement10.16 (3)
    
    License Agreement 98-0228, dated February 22, 1999, between the Company and Wisconsin
Alumni Research Foundation10.17 (4)+
    
    Deferred Compensation Plan10.18 (5)
    
    Amendment to License Agreement 98-0228, dated April 16, 2007, between the Company and
Wisconsin Alumni Research Foundation
 61




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##### Table of Contents



ExhibitNumber
    
    Description10.19 (6)
    
    Stock Purchase Agreement, dated April 25, 2008, between Compact Particle Acceleration
Corporation and its investors10.20 (6)
    
    Shareholder Agreement, dated April 25, 2008, between Compact Particle Acceleration
Corporation and its investors10.21 (6)
    
    Investors Rights Agreement, dated April 25, 2008, between Compact Particle Acceleration
Corporation and its investors10.22 (6)
    
    Limited Exclusive License Agreement, dated February 23, 2007, between the Company and
Regents of the University of California10.23 (6)
    
    Amendment One to Limited Exclusive License Agreement, dated April 8, 2008, between the
Company and Lawrence Livermore National Security, LLC10.24 (6)
    
    Limited Exclusive Sublicense Agreement, dated April 25, 2008, between the Company and
Compact Particle Acceleration Corporation10.25 (7)
    
    Supply Agreement, dated June 25, 2008, between the Company and Hitachi Medical Corporation10.26 (8)
    
    Equity Interest Transfer Agreement, dated September 11, 2008, among the Company, Sichuan
Nanguang Vacuum Technology Incorporated Ltd., and Yao Chongguo10.27 (9)
    
    Form of Indemnification Agreement for Directors, Executive Officers, and Controller10.28 (9)+
    
    Employment Agreement, dated November 5, 2008, between the Company and Frederick A.
Robertson10.29 (9)+
    
    Employment Agreement, dated November 5, 2008, between the Company and Stephen C. Hathaway10.30 (9)+
    
    Employment Agreement, dated November 5, 2008, between the Company and Steven G. Books10.31 (9)+
    
    Employment Agreement, dated November 5, 2008, between the Company and Paul J. Reckwerdt10.32 (10)+
    
    Amendment to Noncompetition Agreement, dated December 16, 2008, between the Company and
Paul J. Reckwerdt10.33 (11)
    
    Amendment to License Agreement 98-0228, dated December 23, 2008, between the Company and
Wisconsin Alumni Research Foundation10.34 (11)
    
    Long-term Purchase Agreement, dated December 22, 2008, among the Company, e2v, Inc. and
e2v Technologies (UK) Limited10.35 (12)
    
    Manufacture and Supply Agreement, dated January 13, 2009 and effective October 8, 2008,
between the Company and Siemens AG Healthcare Sector, Components & Vacuum Technology10.37 (13)
+
    
    Employment Agreement dated November 5, 2008 between the Company and Brenda S. Furlow10.38
(13) 
    
    Loan Agreement dated December 1, 2007 between the Company and M&I Marshall & Ilsley Bank10.39
(13) 
    
    Promissory Note dated December 1, 2008 by the Company in favor of M&I Marshall & Ilsley
Bank10.40
(13) +
    
    First Amendment to Employment Agreement dated March 12, 2009 between the Company and
Stephen C. Hathaway
 62




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##### Table of Contents



ExhibitNumber
    
    Description23.1*
    
    Consent of Grant Thornton LLP, independent registered public accounting firm23.2*
    
    Consent of Virchow Krause Valuation, LLC31.1*
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 200231.2*
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.1*
    
    Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act of 200232.2*
    
    Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
 
 (1)
    
    Previously filed as an exhibit to the Companys registration statement on Form S-1 filed with
the SEC on February 12, 2007 (File No. 333-140600).(2)
    
    Previously filed as an exhibit to Amendment No. 2 to the Companys registration statement on
Form S-1 filed with the SEC on April 16, 2007 (File No. 333-140600).(3)
    
    Previously filed as an exhibit to Amendment No. 3 to the Companys registration statement on
Form S-1 filed with the SEC on April 19, 2007 (File No. 333-140600).(4)
    
    Previously filed as an exhibit to Amendment No. 3 to the Companys registration statement on
Form S-1 filed with the SEC on April 19, 2007 (File No. 333-140600) and terminated as reported
in Form 8-K filed with the SEC on February 10, 2009 (File No. 001-33452).(5)
    
    Previously filed as an exhibit to the Companys registration statement on Form S-1 filed with
the SEC on September 21, 2007 (File No. 333-146219).(6)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on April 28, 2008 (File No. 001-33452).(7)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on June 30, 2008 (File No. 001-33452).(8)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on September 17, 2008 (File No. 001-33452).(9)
    
    Previously filed as an exhibit to the Companys Quarterly Report on Form 10-Q filed with the
SEC on November 7, 2008 (File No. 001-33452).(10)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on December 17, 2008 (File No. 001-33452).(11)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on December 30, 2008 (File No. 001-33452).(12)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on January 16, 2009 (File No. 001-33452).(13)
    
    Previously filed as an exhibit to the Companys annual
report on Form  10-K filed with the SEC
on March 12, 2009 (File No. 001-33452).*
    
    Filed herewith.
    
    Confidential treatment has been requested for portions of this exhibit. These portions have
been omitted from the corresponding filing and submitted separately to the SEC.+
    
    Executive compensation plan or arrangement. 63




---



##### Table of Contents



SIGNATURES
   TomoTherapy IncorporatedBy:
    /s/  Frederick A. RobertsonFrederick A. Robertson, M.D.Chief Executive Officer and President POWER OF ATTORNEY
   Name
    
    Position/s/ Frederick A. Robertson, M.D.

Frederick A. Robertson, M.D.
    
    Chief Executive Officer, President and Director
(principal executive officer)/s/ Stephen C. Hathaway

Stephen C. Hathaway
    
    Chief Financial Officer and Treasurer
(principal financial and accounting officer)*

T. Rockwell Mackie, Ph.D.
    
    Director*

John J. Greisch
    
    Director*

Sam R. Leno
    
    Director*

John J. McDonough
    
    Director*

Cary J. Nolan
    
    Director*

Carlos A. Perez, M.D.
    
    Director*

Roy T. Tanaka
    
    Director*

Frances S. Taylor
    
    Director
 * By:
    
    /s/ Stephen C. HathawayAttorney-in-Fact, pursuant to the power of
attorney filed as part of the Original 10-K
 64




---



##### Table of Contents



ExhibitNumber
    
    Description3.1 (9)
    
    Amended and Restated Articles of Incorporation of the Company3.2 (9)
    
    Amended and Restated Bylaws of the Company4.1 (2)
    
    Form of the Companys Common Stock Certificate10.1 (1)
    
    Lease Agreement, dated January 26, 2005, between the Company and Old Sauk Trails Park
Limited Partnership10.2 (1)
    
    Lease Agreement, dated October 28, 2005, between the Company and Adelphia, LLC10.3 (1)+
    
    Incentive Stock Option Plan, as amended, and forms of option agreements thereunder10.4 (1)+
    
    2000 Stock Option Plan, as amended, and forms of option agreements thereunder10.5 (1)+
    
    2002 Stock Option Plan, as amended, and forms of option agreements thereunder10.6 (1)
    
    Standard Terms and Conditions of Sale10.7 (1)
    
    International Standard Terms and Conditions of Sale10.8 (1)
    
    Tomo Lifecycle Care and Partnership Terms and Conditions10.9 (1)
    
    Logistics Services Agreement, dated September 7, 2005, between the Company and Kuehne +
Nagel, Inc.10.10 (2)
    
    Development and OEM Supply Agreement, dated January 27, 2003, between the Company and
Analogic Corporation10.11 (2)+
    
    2007 Equity Incentive Plan10.12 (2)+
    
    2007 Employee Stock Purchase Plan10.13 (2)
    
    Form of Noncompetition Agreement10.14 (2)
    
    Form of Assignment of Inventions Agreement10.15 (2)
    
    Form of Confidentiality Agreement10.16 (3)
    
    License Agreement 98-0228, dated February 22, 1999, between the Company and Wisconsin
Alumni Research Foundation10.17 (4)+
    
    Deferred Compensation Plan10.18 (5)
    
    Amendment to License Agreement 98-0228, dated April 16, 2007, between the Company and
Wisconsin Alumni Research Foundation
 65




---



##### Table of Contents



ExhibitNumber
    
    Description10.19 (6)
    
    Stock Purchase Agreement, dated April 25, 2008, between Compact Particle Acceleration
Corporation and its investors10.20 (6)
    
    Shareholder Agreement, dated April 25, 2008, between Compact Particle Acceleration
Corporation and its investors10.21 (6)
    
    Investors Rights Agreement, dated April 25, 2008, between Compact Particle Acceleration
Corporation and its investors10.22 (6)
    
    Limited Exclusive License Agreement, dated February 23, 2007, between the Company and
Regents of the University of California10.23 (6)
    
    Amendment One to Limited Exclusive License Agreement, dated April 8, 2008, between the
Company and Lawrence Livermore National Security, LLC10.24 (6)
    
    Limited Exclusive Sublicense Agreement, dated April 25, 2008, between the Company and
Compact Particle Acceleration Corporation10.25 (7)
    
    Supply Agreement, dated June 25, 2008, between the Company and Hitachi Medical Corporation10.26 (8)
    
    Equity Interest Transfer Agreement, dated September 11, 2008, among the Company, Sichuan
Nanguang Vacuum Technology Incorporated Ltd., and Yao Chongguo10.27 (9)
    
    Form of Indemnification Agreement for Directors, Executive Officers, and Controller10.28 (9)+
    
    Employment Agreement, dated November 5, 2008, between the Company and Frederick A.
Robertson10.29 (9)+
    
    Employment Agreement, dated November 5, 2008, between the Company and Stephen C. Hathaway10.30 (9)+
    
    Employment Agreement, dated November 5, 2008, between the Company and Steven G. Books10.31 (9)+
    
    Employment Agreement, dated November 5, 2008, between the Company and Paul J. Reckwerdt10.32 (10)+
    
    Amendment to Noncompetition Agreement, dated December 16, 2008, between the Company and
Paul J. Reckwerdt10.33 (11)
    
    Amendment to License Agreement 98-0228, dated December 23, 2008, between the Company and
Wisconsin Alumni Research Foundation10.34 (11)
    
    Long-term Purchase Agreement, dated December 22, 2008, among the Company, e2v, Inc. and
e2v Technologies (UK) Limited10.35 (12)
    
    Manufacture and Supply Agreement, dated January 13, 2009 and effective October 8, 2008,
between the Company and Siemens AG Healthcare Sector, Components & Vacuum Technology10.37(13)+
    
    Employment Agreement dated November 5, 2008 between the Company and Brenda S. Furlow10.38(13)
    
    Loan Agreement dated December 1, 2007 between the Company and M&I Marshall & Ilsley Bank10.39(13)
    
    Promissory Note dated December 1, 2008 by the Company in favor of M&I Marshall & Ilsley
Bank10.40(13)+
    
    First Amendment to Employment Agreement dated March 12, 2009 between the Company and
Stephen C. Hathaway
 66




---



##### Table of Contents



ExhibitNumber
    
    Description23.1*
    
    Consent of Grant Thornton LLP, independent registered public accounting firm23.2*
    
    Consent of Virchow Krause
Valuation, LLC31.1*
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 200231.2*
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.1*
    
    Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act of 200232.2*
    
    Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
 
 (1)
    
    Previously filed as an exhibit to the Companys registration statement on Form S-1 filed with
the SEC on February 12, 2007 (File No. 333-140600).(2)
    
    Previously filed as an exhibit to Amendment No. 2 to the Companys registration statement on
Form S-1 filed with the SEC on April 16, 2007 (File No. 333-140600).(3)
    
    Previously filed as an exhibit to Amendment No. 3 to the Companys registration statement on
Form S-1 filed with the SEC on April 19, 2007 (File No. 333-140600).(4)
    
    Previously filed as an exhibit to Amendment No. 3 to the Companys registration statement on
Form S-1 filed with the SEC on April 19, 2007 (File No. 333-140600) and terminated as reported
in Form 8-K filed with the SEC on February 10, 2009 (File No. 001-33452).(5)
    
    Previously filed as an exhibit to the Companys registration statement on Form S-1 filed with
the SEC on September 21, 2007 (File No. 333-146219).(6)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on April 28, 2008 (File No. 001-33452).(7)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on June 30, 2008 (File No. 001-33452).(8)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on September 17, 2008 (File No. 001-33452).(9)
    
    Previously filed as an exhibit to the Companys Quarterly Report on Form 10-Q filed with the
SEC on November 7, 2008 (File No. 001-33452).(10)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on December 17, 2008 (File No. 001-33452).(11)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on December 30, 2008 (File No. 001-33452).(12)
    
    Previously filed as an exhibit to the Companys current report on Form 8-K filed with the SEC
on January 16, 2009 (File No. 001-33452).(13)
    
    Previously filed as an exhibit to the Companys annual report on Form 10-K filed with the SEC
on March 12, 2009 (File No. 001-33452).*
    
    Filed herewith.
    
    Confidential treatment has been requested for portions of this exhibit. These portions have
been omitted from the corresponding filing and submitted separately to the SEC.+
    
    Executive compensation plan or arrangement. 67