In January 2019, the Company’s wholly-owned subsidiary, Accuray Asia Limited (“Accuray Asia”), entered into an agreement with CNNC High Energy Equipment (Tianjin) Co., Ltd. (the “CIRC Subsidiary”), a wholly-owned subsidiary of China Isotope & Radiation Corporation, to form a joint venture, CNNC Accuray (Tianjin) Medical Technology Co. Ltd. (the “JV”), to manufacture and

sell radiation oncology systems in China. As of March 31, 2024, the Company owned a 49% interest in the JV, which is reported as an investment in joint venture on the Company’s unaudited condensed consolidated balance sheets.

The Company applies the equity method of accounting to its ownership interest in the JV as the Company has the ability to exercise significant influence over the JV but lacks controlling financial interest and is not the primary beneficiary. The Company recognizes the 49% proportionate share of the JV income (loss) on a one-quarter lag due to the timing of the availability of the JV’s financial records. The Company recognizes revenue on sales to the JV in the current period, eliminating a portion of profit to the extent goods sold have not been sold through by the JV to an end customer at the end of such reporting period.

The following table shows the reconciliation between the carrying value of the Company's investment in the JV and its proportional share of the underlying equity in net assets of the JV (in thousands):


	March 31, 2024			June 30, 2023
Carrying value of investment in joint venture	$	13,586		$	15,128
Deferred intra-entity profit margin		7,893			5,737
Equity method goodwill		(4,720	)		(4,720	)
Proportional share of equity investment in joint venture	$	16,759		$	16,145

As of March 31, 2024, the Company’s carrying value of the investment in the JV was decreased for the Company's proportional share of the JV's currency translation adjustment by $0.5 million. As of June 30, 2023, the Company’s carrying value of the investment in the JV for the Company's proportional share of the JV's currency translation adjustment was not material.

Summarized financial information of the JV is as follows (in thousands):


	Three Months Ended December 31,				Nine Months Ended December 31,
Statement of Operations Data:	2024		2023		2024		2023
Revenue	$	45,173	$	36,831	$	99,485	$	87,554
Gross profit		7,401		6,931		16,014		15,246
Net income		2,091		4,159		2,098		1,991
Net income attributable to the Company		1,024		2,027		1,028		960


Summarized Balance Sheet Data:	As of December 31, 2023		As of December 31, 2022
Assets
Current assets	$	107,893	$	88,010
Non-current assets		13,417		17,364
Total assets	$	121,310	$	105,374
Liabilities and Stockholders' Equity
Current liabilities	$	86,554	$	74,990
Non-current liabilities		134		547
Stockholders' equity		34,622		29,837
Total liabilities and stockholders' equity	$	121,310	$	105,374

The following table shows the activity of the Company’s net revenue recognized from intra-entity profit margin from sales (in thousands):


	Three Months Ended March 31,						Nine Months Ended March 31,
	2024			2023			2024			2023
Sales recognized from released deferred intra-entity profit margin	$	662		$	1,071		$	6,975		$	7,486
Deferred intra-entity profit margin from sales		(3,112	)		(3,390	)		(9,131	)		(8,819	)
Net revenue deferred from intra-entity profit margin from sales (1)	$	(2,450	)	$	(2,319	)	$	(2,156	)	$	(1,333	)

(1)

Profit earned by the Company from the JV is eliminated through cost of goods sold until it is realized; such profits would generally be considered realized when the inventory has been sold through to third parties.