# QT Imaging Holdings, Inc.: Form 10-Q for the period ended Sep 30, 2025 - Company: [QT Imaging Holdings, Inc.](/companies/qti.md) (CIK 1844505) - Form: 10-Q - Filed: 2025-11-12 - Accepted by EDGAR: Nov 12, 2025, 07:47 ET - Period: 2025-09-30 - Accession: 0001628280-25-051332 - Inline XBRL: yes - Main document: https://www.sec.gov/Archives/edgar/data/1844505/000162828025051332/qti-20250930.htm - All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1844505/000162828025051332/ ## Figures reported in this filing Standardized XBRL line items for the period ended 2025-09-30. | Line item | Period | Value | XBRL concept | | --- | --- | ---: | --- | | Revenue | 3 months, 2025-07-01 to 2025-09-30 | $4.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax | | Revenue | 9 months, 2025-01-01 to 2025-09-30 | $10.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax | | Cost of revenue | 3 months, 2025-07-01 to 2025-09-30 | $2.4m | us-gaap:CostOfGoodsAndServicesSold | | Cost of revenue | 9 months, 2025-01-01 to 2025-09-30 | $5.2m | us-gaap:CostOfGoodsAndServicesSold | | Gross profit | 3 months, 2025-07-01 to 2025-09-30 | $1.8m | us-gaap:GrossProfit | | Gross profit | 9 months, 2025-01-01 to 2025-09-30 | $5.4m | us-gaap:GrossProfit | | Research and development | 3 months, 2025-07-01 to 2025-09-30 | $938.8k | us-gaap:ResearchAndDevelopmentExpense | | Research and development | 9 months, 2025-01-01 to 2025-09-30 | $2.7m | us-gaap:ResearchAndDevelopmentExpense | | Selling, general and administrative | 3 months, 2025-07-01 to 2025-09-30 | $2.5m | us-gaap:SellingGeneralAndAdministrativeExpense | | Selling, general and administrative | 9 months, 2025-01-01 to 2025-09-30 | $6.5m | us-gaap:SellingGeneralAndAdministrativeExpense | | Operating income | 3 months, 2025-07-01 to 2025-09-30 | −$1.7m | us-gaap:OperatingIncomeLoss | | Operating income | 9 months, 2025-01-01 to 2025-09-30 | −$3.7m | us-gaap:OperatingIncomeLoss | | Income tax | 3 months, 2025-07-01 to 2025-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit | | Income tax | 9 months, 2025-01-01 to 2025-09-30 | $2.8k | us-gaap:IncomeTaxExpenseBenefit | | Net income | 3 months, 2025-07-01 to 2025-09-30 | −$4.6m | us-gaap:NetIncomeLoss | | Net income | 9 months, 2025-01-01 to 2025-09-30 | −$19.7m | us-gaap:NetIncomeLoss | | Diluted EPS | 3 months, 2025-07-01 to 2025-09-30 | −$0.47 | us-gaap:EarningsPerShareDiluted | | Diluted EPS | 9 months, 2025-01-01 to 2025-09-30 | −$2.09 | us-gaap:EarningsPerShareDiluted | | Basic EPS | 3 months, 2025-07-01 to 2025-09-30 | −$0.47 | us-gaap:EarningsPerShareBasic | | Basic EPS | 9 months, 2025-01-01 to 2025-09-30 | −$2.09 | us-gaap:EarningsPerShareBasic | | Diluted shares (weighted) | 3 months, 2025-07-01 to 2025-09-30 | 9,601,972 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Diluted shares (weighted) | 9 months, 2025-01-01 to 2025-09-30 | 9,415,349 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Operating cash flow | 9 months, 2025-01-01 to 2025-09-30 | −$5.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities | | Capital expenditure | 9 months, 2025-01-01 to 2025-09-30 | $46.8k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment | | Cash and equivalents | at 2025-09-30 | $1.7m | us-gaap:Cash | | Current assets | at 2025-09-30 | $11.3m | us-gaap:AssetsCurrent | | Total assets | at 2025-09-30 | $12.1m | us-gaap:Assets | | Current liabilities | at 2025-09-30 | $12.7m | us-gaap:LiabilitiesCurrent | | Total liabilities | at 2025-09-30 | $21.2m | us-gaap:Liabilities | | Long-term debt | at 2025-09-30 | $15.1m | us-gaap:LongTermDebt | | Shareholders' equity | at 2025-09-30 | −$9.1m | us-gaap:StockholdersEquity | ## Management's discussion and analysis As filed, 78,116 characters. Unless otherwise indicated or the context otherwise requires, references in this report (this “Quarterly Report”) to “we,” “our,” “us,” “QT Imaging”, “QT Imaging Holdings” or the “Company” and other similar terms refer to QT Imaging Holdings, Inc. and its consolidated subsidiaries. The following discussion and analysis provides information which QT Imaging Holding’s management believes is relevant to an assessment and understanding of consolidated results of operations and financial condition. You should read the following discussion and analysis of QT Imaging Holdings’ financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report. ### Special Note Regarding Forward-Looking Statements This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, and statements in “Unregistered Sales of Equity Securities and Use of Proceeds” regarding the intended use of proceeds from the Private Placement (as such term is defined below), are forward-looking statements and the expected date of closing of the Private Placement. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek,” “may,” “might,” “plan,” “possible,” “potential,” “should, “would” and similar words and expressions are intended to identify such forward-looking statements. Such forward‑looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the “Risk Factors” section in Part II, Item 1A. of this Quarterly Report, the “Risk Factors” section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 31, 2025 (our “Annual Report”) and in any more recent filings with the SEC. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. ### Overview We are a medical device company founded in 2012 and engaged in the research, development, and commercialization of innovative body imaging systems using low energy sound. We believe that medical imaging is critical to the detection, diagnosis, and treatment of disease and that it should be safe, affordable, and accessible. Our goal is to improve global health outcomes through the development and commercialization of imaging devices that address critical healthcare challenges with accuracy and precision. With the support of nearly $18 million in financial support from the U.S. National Institutes of Health, we developed a novel, comprehensive body imaging technology that has high resolution, high sensitivity, high specificity, high positive and negative predictive values, and is safe and inexpensive. The technology is based on ultra-low frequency transmitted sound and uses a one-of-a-kind novel sound back-scatter design and inverse-scattering reconstruction to create its images. Our current QT Breast Scanner is a Class II device subject to premarket notification and clearance under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (“FDCA”). On August 23, 2016, we (formerly, QT Ultrasound LLC) submitted a Section 510(K) Summary of Safety and Effectiveness application for the QT Breast Scanner in accordance with 21 CFR 807.92 under 510(K) Number K162372. As part of meeting the general requirements for basic safety and essential performance of the QT Breast Scanner (formerly, QT Ultrasound Breast Scanner) pursuant to AAMI ES60601-1:2005/(R)2012 and A1:2012 Medical electrical equipment, testing was conducted by Intertek, an independent testing laboratory, located in Menlo Park, CA. Intertek also conducted applicable testing pursuant to IEC 60601-1-6 Edition 3.1 2013-10-Medical electrical equipment Part 1-6 General requirements for safety - Collateral Standard: Usability. In addition, we conducted, and Intertek witnessed, all applicable testing pertaining to the requirements for the safety of ultrasonic medical diagnostic and monitoring equipment and to demonstrate compliance with the “Acoustic Output Measurement Standard for Diagnostic Ultrasound Equipment”. This test on acoustic output was pursuant to IEC 60601-2-37 Edition 2.0.2007 Medical electrical equipment - Part 2-37: Particular requirements for the basic safety and essential performance of ultrasonic medical diagnostic and monitoring equipment. Finally, system verification testing was conducted to ensure that the QT Breast Scanner met all design and other requirements including but not limited to that no new issues of safety or effectiveness compared to the predicate device, SoftVue System manufactured by Delphinus Medical Technologies, were raised. Since our inception, we have devoted substantially all our financial resources to acquiring and developing the base technology for our body imaging systems, conducting research and development activities, securing related intellectual property rights, and for general corporate operations and growth. On June 6, 2017, the Food and Drug Administration (the “FDA”), in response to QT Imaging’s Section 510(K) Summary of Safety and Effectiveness premarket notification, determined that the QT Breast Scanner is substantially equivalent to the predicate device. Our use of the words “safe”, “safety”, “effectiveness”, and “efficacy” in relation to the QT Breast Scanner in this Management's Discussion and Analysis and all other documents related to us is limited to the context of the Section 510(K) Summary of Safety and Effectiveness that was reviewed and responded to by the FDA. Our strategies for commercializing the QT Breast Scanner include the following: - Create disruptive technological innovation (software, artificial intelligence, and smart physics) to improve medical imaging and thus health care quality and access. - Continue to improve our high quality, high resolution, native 3D, reproducible image quality regardless of operator or breast size/tissue type breast imaging technology, as well as the techniques for quantifiable analysis, comparison, and training. - Partner with strategic business and distribution channels to address the U.S. market for breast imaging immediately and, other regions in the future, to place the QT Breast Scanner in hospitals, radiology centers, etc. and generate awareness of the benefits of our technology. - Perform manufacturing internally to us and partner strategically for large scale manufacturing. - Expand the market by supporting additional Direct-to-Customer and Direct-to-Patient approaches to enable the ability to lower health care costs and increase access via personal medical imaging. - Provide a new social and economic opportunity for consumers to take control of some aspects of their own health care—such as imaging for minor injuries or medical conditions without needing a healthcare “gate-keeper.” - Focus our intellectual capabilities and ethical framework to become unified in our mission to improve the quality and lower the cost of health care world-wide . . . “It’s about time.” Consistent with our strategy, on May 31, 2023, we entered into a Sales Agent Agreement (the “NXC Sales Agent Agreement”) with NXC Imaging, Inc. (“NXC”) pursuant to which we appointed NXC as the non-exclusive agent for the sale of QT Imaging products and services in non-exclusive territories: the U.S., U.S. territories, and U.S. Department of Defense installations. Additionally, NXC was appointed as the exclusive servicer of QT Imaging products sold by NXC under the terms of the NXC Sales Agent Agreement. Effective June 10, 2024, the NXC Sales Agent Agreement was superseded by the NXC Distribution Agreement that was entered into with NXC on June 18, 2024. Under the NXC Distribution Agreement, NXC is appointed as the exclusive reseller to market, advertise, and resell QT Breast Scanners in the U.S. and U.S. territories. NXC will purchase for the purpose of reselling, leasing or renting QT Breast Scanners directly to its customers, but is not obligated to purchase any particular quantity of QT Breast Scanners from us. We have reserved the right to sell directly to customers as an exception. Furthermore, we may, in our sole discretion, sell the QT Breast Scanners to any other person or entity anywhere in the world without notice to NXC or NXC’s prior consent. NXC is also allowed to assign sales agents for the purpose of QT Breast Scanner sales. NXC’s purchases will be in accordance with an agreed upon product pricing schedule (subject to change upon 60 days’ prior written notice by us), provided that neither NXC nor its assigned sales agents may mark-up the cost of the QT Breast Scanners more than twenty percent (20%) unless otherwise mutually agreed to between NXC and us. Each order will include information reasonably requested by us and is subject to our acceptance, after which it becomes an approved order. Any such approved orders are non-cancellable and not subject to rescheduling after acceptance by us. Any orders not accepted by us in writing are deemed rejected. On December 11, 2024, we and NXC entered into the NXC Amended Distribution Agreement, which amends and restates the NXC Distribution Agreement in its entirety, making some modifications to the NXC Distribution Agreement but retaining other terms. We further amended the Amended Distribution Agreement on March 28, 2025. The Amended Distribution Agreement has a term that runs until December 31, 2026, unless earlier terminated or extended by mutual written agreement. As of September 30, 2025, we have delivered 23 QT Breast Scanners to NXC and NXC’s customers pursuant to the NXC Sales Agent Agreement and NXC Distribution Agreement. On March 28, 2025, we entered into the Canon Manufacturing Agreement (the “Canon Manufacturing Agreement”) with Canon Medical Systems, Inc. (“CMSC”). Pursuant to the terms of the Canon Manufacturing Agreement, we appointed CMSC as the exclusive manufacturer of the QT Breast Scanners to be distributed by NXC. QTI retains the right to perform manufacturing in Novato, California. The purchase prices applicable to the purchase orders as of the date of the Canon Manufacturing Agreement shall be separately agreed between the parties in writing. The term of the Canon Manufacturing Agreement is through December 31, 2026. On August 21, 2025, the Company entered into a Distribution Agreement (the “Gulf Medical Distribution Agreement”) with Gulf Medical Co. (“GMC”), a corporation organized and existing under the laws of Saudi Arabia, for an initial term of three years (the “Initial Term”). Under the terms of the Gulf Medical Distribution Agreement, the Company shall authorize and grant to GMC the exclusive right to market, advertise and sell the QT Breast Scanners and the Cloud SaaS platform subscriptions in Saudi Arabia (the “Territory”). If GMC has met the Minimum Purchase Requirements (as defined below) during the Initial Term, the Gulf Medical Distribution Agreement shall automatically be extended for an additional one-year term. GMC agrees to meet or exceed the purchase requirements and/or revenue goals for the Approved Products set forth in the Gulf Medical Distribution Agreement (the “Minimum Purchase Requirements”) during the Initial Term. In the event GMC fails to meet these Minimum Purchase Requirements in any year during the Initial Term, the Company may, at its sole option, (a) terminate GMC’s exclusive distributorship rights for the sale and promotion of the Approved Products granted under this Agreement and appoint other distributors for the Approved Products in the Territory, or (b) terminate the Gulf Medical Distribution Agreement. Should the Company elect to so terminate GMC’s exclusive distributorship in the Territory, the Company may continue to sell the Approved Products to GMC for GMC to distribute on a non-exclusive basis in the Territory in accordance with the terms and conditions of the Gulf Medical Distribution Agreement, and GMC’s ongoing obligations with regard to its Minimum Purchase Requirements for the Approved Products shall terminate. Should the Company be unable to furnish GMC with sufficient quantities of the Approved Products, as may be requested by GMC in its Release Orders (as defined below) submitted to the Company in accordance with the terms of the Gulf Medical Distribution Agreement, then GMC’s Minimum Purchase Requirement shall be reduced by the quantity of Approved Products that the Company is unable to deliver as requested. GMC shall secure all required governmental approvals, permits, licenses, customs clearances, and authorizations required for shipment to and use of the QT Breast Scanners in the Territory. The Company shall provide training and professional services to GMC during the term of the Gulf Medical Distribution Agreement and shall retain all intellectual property rights. Except as GMC and the Company may otherwise mutually agree in writing, provided that GMC maintains a credit limit with the Company’s credit insurance provider that has been approved in writing by the Company, GMC shall pay the Company fifty percent (50%) of the total price of the Release Order upon order placement and fifty percent (50%) within 45 days from the date of shipping of the Approved Products to GMC’s designated location(s), or in any of the agreed upon payment terms. The Company has provided for a limited warranty of at least one year, and up to five years, depending on the purchase price paid by a client of GMC for an Approved Product. The Gulf Medical Distribution Agreement can be terminated only with the approval of both parties and, upon termination, GMC shall be permitted to sell any QT Breast Scanners that it holds in accordance with the Gulf Medical Distribution Agreement. We have incurred net operating losses and negative cash flows from operations since our inception and had an accumulated deficit of $51,635,448 as of September 30, 2025. During the nine months ended September 30, 2025, we incurred a net loss of $19,694,921 and used $5,857,572 of cash in operating activities. We continue to incur losses, and our ability to achieve and sustain profitability will depend on the achievement of sufficient revenues to support our cost structure. We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital. We expect to incur additional recurring administrative expenses associated as a publicly traded company, including costs associated with compliance under the Exchange Act, annual and quarterly reports to stockholders, transfer agent fees, audit fees, incremental director and officer liability insurance costs, Sarbanes-Oxley Act compliance readiness, and director and officer compensation. ### Recent Developments On January 9, 2025, we and YA II PN, LTD (“Yorkville”) entered into the Third Omnibus Amendment (the “Third Amendment”), pursuant to which, we and Yorkville agreed that for $1.5 million of the then current outstanding balance due under the $10.0 million promissory note issued to Yorkville (the “Yorkville Note”) (principal and unpaid accrued interest), the Fixed Price for conversion shall be modified to $1.752 per share, and for the remainder of the balance, the Fixed Price shall not be changed but shall remain $13.84185 per share as provided for in the Yorkville Note when we issued it on March 4, 2024. Further, the Third Amendment removed our obligation to make monthly payments to Yorkville, previously owing due to the occurrence of the Trigger Event (as defined in the Third Amendment), such that no further monthly payments will be owed during the period beginning on the date of the Third Amendment and ending on the maturity date of the Yorkville Note of March 31, 2026. In exchange for this relief, the aggregate purchase price owed to us from the first Advance (the “Advanced Proceeds”) that occurs pursuant to the terms of the Standby Equity Purchase Agreement (the “SEPA”) shall be paid by Yorkville offsetting the amount of the Advance Proceeds against an equal amount outstanding under the Yorkville Note (first towards accrued and unpaid interest, and then towards outstanding principal and the corresponding payment premium in respect of such principal amount, if applicable), and that for any subsequent Advances pursuant to the terms of the SEPA, Yorkville shall pay half of such Advance Proceeds directly to us and the other half of such Advance Proceeds shall be paid by Yorkville offsetting the amount of the Advance Proceeds against an equal amount outstanding under the Yorkville Note (first towards accrued and unpaid interest, and then towards outstanding principal and the corresponding payment premium in respect of such principal amount, if applicable). On January 9, 2025, we delivered our first Advance Notice under the SEPA for the sale of 295,000 shares of common stock. This resulted in the reduction of an additional $182,682 in principal of the Yorkville Note. On January 9, 2025, we also entered into an amendment (the “Cable Car Amendment”) with Funicular Funds, LP (“Cable Car”) to amend certain terms of the secured note purchase agreement with Cable Car (the “Cable Car Note”), including a reduction of the conversion price for the Cable Car Note to $1.752 per share. Further, the Cable Car Amendment provides that the maturity date for the Cable Car Note shall be extended to March 31, 2026, in consideration for which, we paid a fee of $90,000 to Cable Car for the extension (the “Extension Fee”), with such fee being added to the amount due and payable on such maturity date, unless the Cable Car Note is earlier converted pursuant to its terms, in which event the Extension Fee shall also be converted. No interest shall accrue or be due on the Extension Fee. Pursuant to the Cable Car Amendment, interest shall accrue on the outstanding principal balance of the Cable Car Note at an annual rate equal to 6%, with interest being calculated based on a 365-day year and the actual number of days elapsed, to the extent permitted by applicable law. Interest shall be due and payable on the maturity date for the Cable Car Note, unless the Cable Car Note is earlier converted pursuant to its terms, in which event such accrued and unpaid interest shall also be converted. On February 26, 2025, we entered into a credit agreement (the “Credit Agreement”) that provides a senior secured term loan (the “Lynrock Lake Term Loan”) with Lynrock Lake. The Credit Agreement is secured by a first priority lien on substantially all our assets and provides for a term loan in the aggregate principal amount of $10,100,000 at an interest rate of 10.0% per annum, compounded quarterly. The maturity date of the Credit Agreement is March 31, 2027. Furthermore, in connection with the Lynrock Lake Term Loan, we issued to Lynrock Lake, pursuant to the terms of a Warrant to Purchase Common Stock (the “Lynrock Lake Warrant”), a warrant to purchase 20,333,623 shares of its common stock at an exercise price of $1.20 per share. The Lynrock Lake Warrant is exercisable until February 26, 2035. Lynrock Lake may cashless exercise the Lynrock Lake Warrant. The Lynrock Lake Warrant is also subject to anti-dilution adjustments to the exercise price and the number of shares which may be purchased upon exercise of the Lynrock Lake Warrant in the event that we issue shares of common stock (or derivative securities) at a price that is either less than the $1.20 exercise price or the fair market value of a share of common stock from the immediately prior trading day. On February 26, 2025, we used a portion of the proceeds of the Lynrock Lake Term Loan to pay Yorkville an amount equal to $3,000,000 in cash and issued to Yorkville a warrant to purchase 5,000,071 shares of its common stock at an exercise price of $1.20 per share pursuant to a Warrant to Purchase Common Stock (the “Yorkville Warrant”) to fully settle and discharge our obligations under the Yorkville Note and extinguish the Yorkville Note as having been fully performed. The Yorkville Warrant is exercisable until February 26, 2030. Yorkville may cashless exercise the Yorkville Warrant. The Yorkville Warrant is also subject to adjustments in the event that our common stock undergoes a split, reverse-split or similar event. Furthermore, the Yorkville Warrant has provided the holder with piggyback registration rights. We and Yorkville also entered into that certain Termination Agreement, dated February 26, 2025 (the “Termination Agreement”), pursuant to which the parties acknowledged the termination of the SEPA effective February 26, 2025. On February 26, 2025, we used a portion of the proceeds of the Lynrock Lake Term Loan to pay Cable Car an amount equal to the full principal, interest and fees amount of approximately $1,625,000 in cash to fully settle and discharge our obligations under the Cable Car Note and extinguish the Cable Car Note as having been fully performed. In connection with the issuance of the Lynrock Lake Term Loan, on February 26, 2025, the maturity dates on both the Convertible Note Payable and Working Capital Notes above were extended to October 21, 2027. On April 9, 2025, we entered into a Securities Purchase Agreement (the “First Securities Purchase Agreement”) by and between the Company, on the one hand, and Dr. Avi Katz, the Chairman of the board of directors, and Dr. Raluca Dinu, the Chief Executive Officer and a member of the board of directors, on the other hand, for the First Private Placement. On April 24, 2025, at the closing of the First Private Placement, we issued (i) 261,644 shares of common stock at a per share purchase price of $1.911, which represented 110% of the volume weighted trading price for the common stock on April 9, 2025; and (ii) warrants with a term of ten years from the initial exercise date to purchase up to an additional 523,286 shares of common stock with a per share exercise price of $2.16. The aggregate gross proceeds to us from the First Private Placement was approximately $500,000, before deducting the offering expenses payable by us, which expenses consisted solely of legal fees. On May 12, 2025, we entered into a Securities Purchase Agreement (the “Second Securities Purchase Agreement”) for the Second Private Placement in an amount of approximately $200,000, pursuant to which we issued 68,447 shares of common stock plus the Recanati Warrant to purchase 68,447 shares of common stock. The Second Private Placement provides a per share purchase price of $2.922, which represents 110% of the five-day volume weighted trading price for the common stock through May 9, 2025, and the per share exercise price of the Recanati Warrant is $3.36. On August 19, 2025 our stockholders approved the Certificate of Amendment to effect a Reverse Stock Split of the outstanding shares of our common stock, par value $0.0001 per share, at a specific ratio within a range of 2:1 to 20:1, with the specific ratio to be fixed within this range by our board of directors in its sole discretion without further stockholder approval. Our board of directors fixed the Reverse Stock Split ratio at 3:1, such that each three shares of common stock were combined and reconstituted into one share of common stock effective October 23, 2025. In connection with the Reverse Stock Split, the CUSIP number of the common stock has changed to 746962307. The common stock began trading on the QTCQB Venture Market on a reverse split-adjusted basis on October 24, 2025. We have submitted an application to relist on the Nasdaq Capital Market. Except as noted, all share, stock option, warrant, and per share information throughout these consolidated financial statements have been retroactively adjusted to reflect this Reverse Stock Split. On August 26, 2025, the Company and Lynrock Lake entered into the First Amendment to the Credit Agreement (the “Lynrock Amended Credit Agreement”) to add an additional tranche of $5.0 million (“Tranche B”) and increase the aggregate principal amount of the credit agreement with Lynrock Lake dated February 26, 2025 (the “Lynrock Lake Term Loan”) to $15.1 million. The proceeds of Tranche B were used to repurchase the Yorkville Warrant and was subsequently repaid in full, along with repayment premium and accrued interest, on October 6, 2025. On September 30, 2025, we entered into a Securities Purchase Agreement, (the “Third Securities Purchase Agreement”), by and between us, on the one hand, and certain accredited investors and qualified institutional buyers, led by Sio Capital Management, LLC, on the other hand, (together, the “Purchasers”) for a private placement (the “October 2025 Private Placement”) of securities. At the closing of the October 2025 Private Placement on October 3, 2025, we issued (i) 2,232,243 shares of our common stock, par value $0.0001 per share; (ii) Subscription Warrants ( “Subscription Warrants”) with a term of five years from the initial exercise date to purchase up to an additional 4,040,272 shares of common stock; and (iii) 5,424,083 Pre‑Funded Warrants (the “Pre-Funded Warrants”) to purchase up to an additional 1,808,055 shares of common stock, exercisable any time after its issuance. The purchase price of each share of common stock is $4.50 (the “Per Share Purchase Price”) and the purchase price for each Pre‑Funded Warrant is $4.4997 (the “Per Pre-Funded Warrant Purchase Price”). Both of these amounts were paid by the Purchasers at the closing of the October 2025 Private Placement. The aggregate gross proceeds to us from the October 2025 Private Placement was approximately $18,180,655, before deducting the offering expenses payable by us, which expenses consist solely of legal fees and the amounts provided for pursuant to a placement agency agreement In addition, the per share exercise price of each Subscription Warrant is $4.50 and the per share exercise price of each Pre-Funded Warrant is $0.0003. ### Components of Our Results of Operations ### Revenue Revenue consists of revenue from the sale of our products including the QT Breast Scanner, associated SW, accessories, and related services, which are primarily training and maintenance. For sales of products (which include the QT Breast Scanner and any accessories), revenue is recognized when a customer obtains control of the promised goods. The amount of revenue recognized reflects the consideration we expect to be entitled to receive in exchange for these goods. Service revenue is generally related to maintenance and training the customer. Service revenue is recognized at the time the related performance obligation is satisfied, in an amount that reflects the consideration that we expect to receive in exchange for those services. ### Cost of Revenue Cost of revenue consists of our product costs, including manufacturing costs, personnel costs and benefits, duties and other applicable importing costs, shipping and handling costs, packaging, warranty replacement costs, fulfillment costs and inventory obsolescence and write-offs. We expect our cost of revenue to increase in absolute dollars and decrease as a percentage of revenues over time as we shift to new manufacturing processes and vendors that we anticipate will result in greater efficiency and lower per unit costs. We expect we will continue to invest additional resources into our products to expand and further develop our offerings. The level and timing of investment in these areas could affect our cost of revenue in the future. ### Operating Expenses #### Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with the research and development of our products, which include payroll and payroll related expenses, facilities costs, depreciation expense, materials and supplies, and consultant costs. We expense all research and development costs in the periods in which such costs are incurred. Research and development activities are central to our business. We expect that our research and development expenses will increase substantially for the foreseeable future as we continue to invest in the development of the QT Breast Scanner. We cannot reasonably determine the nature, timing and costs of the efforts that will be necessary to build our Cloud SaaS platform, run clinical trials that are necessary to generate biomarker data, and reduce the bill of materials (“BOM”) and other costs to manufacture the QT Breast Scanner. Our research and development expenses may vary significantly based on factors such as, without limitation: - The timing and progress of development activities; - Our ability to maintain our current research and development programs and to establish new ones; - The receipt of regulatory approvals from applicable regulatory authorities without the need for independent clinical trials or validation; - Duration of subject participation in any trials and follow-ups; - The countries and jurisdictions in which the trials are conducted; - Length of time required to enroll eligible subjects and initiate trials; - Per trial subject costs; - Number of trials required for regulatory approval; - The timing, receipt, and terms of any marketing approvals from applicable regulatory authorities; - The success of our distribution arrangements, and our ability to establish new licensing or collaboration arrangements outside of U.S.; - The hiring and retention of research and development personnel; - Obtaining, maintaining, defending, and enforcing intellectual property rights; and - The phases of development of our product candidates. Any changes in the outcome of any of these variables with respect to the development of our products or product candidates could significantly change the costs and timing associated with the development of these products and product candidates. #### Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of personnel costs, costs related to maintenance and filings of intellectual property, and other expenses for outside professional services, including legal, consulting, investor relations, audit and accounting services. Our personnel costs consist of salaries, benefits and stock-based compensation expenses. Selling, general and administrative expenses include facilities, depreciation and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance. Selling, general and administrative expenses also include consulting expenses and costs for conferences, meetings, and other events. We anticipate that our selling, general and administrative expenses will increase to support our expanding headcount and operations, increased costs of operating as a public company, the development of a commercial infrastructure to support commercialization of our products and product candidates, increased support for existing and new distribution partner relationships, and the use of outside service providers such as insurers, consultants, lawyers, and accountants. We also expect selling expenses to increase in the near term as we promote our brand through marketing and advertising initiatives, expand market presence and hire additional personnel to drive penetration and generate leads. ### Results of Operations ### Comparison of the three months ended September 30, 2025 and 2024 | | Three Months Ended September 30, 2025 | 2024 | Change $% | | | --- | ---: | ---: | ---: | ---: | | Revenue | $4,192,101 | $955,970 | $3,236,131 | 339% | | Cost of revenue | 2,389,428 | 350,667 | 2,038,761 | 581% | | Gross profit | 1,802,673 | 605,303 | 1,197,370 | 198% | | Operating expenses: | | | | | | Research and development | 938,758 | 925,214 | 13,544 | 1% | | Selling, general and administrative | 2,515,994 | 2,007,277 | 508,717 | 25% | | Total operating expenses | 3,454,752 | 2,932,491 | 522,261 | 18% | | Loss from operations | (1,652,079) | (2,327,188) | 675,109 | 29% | | Other income (expense), net | (30,559) | 16,995 | (47,554) | (280)% | | Change in fair value of warrant liability | (80,043) | 8,805 | (88,848) | N.M. | | Change in fair value of derivative liability | — | 87,200 | (87,200) | (100)% | | Change in fair value of earnout liability | (2,230,000) | 50,000 | (2,280,000) | N.M. | | Interest expense, net | (564,725) | (1,455,306) | 890,581 | 61% | | Loss before income tax expense | (4,557,406) | (3,619,494) | (937,912) | (26)% | | Income tax expense | — | — | — | N.M. | | Net loss and comprehensive loss | $(4,557,406) | $(3,619,494) | $(937,912) | (26)% | N.M. - Not meaningful ### Revenue Revenue increased by $3,236,131 to $4,192,101 for the three months ended September 30, 2025 from $955,970 for the three months ended September 30, 2024. The increase in revenue was primarily attributable to the sale of nine QT Breast Scanners in the third quarter of 2025 as compared with two scanners sold in the third quarter of 2024 due to the minimum order quantities (“MOQs”) in accordance with the amended NXC Distribution Agreement, which was executed during the fourth quarter of 2024. ### Cost of Revenue Cost of revenue increased by $2,038,761 to $2,389,428 for the three months ended September 30, 2025 from $350,667 for the three months ended September 30, 2024. The increase in cost of revenue was primarily attributable to the sale of nine QT Breast Scanners in the third quarter of 2025 as compared with two scanners sold in the third quarter of 2024. Gross margin decreased in the three months ended September 30, 2025, as compared to the same period in 2024, due to variability in the weighted average costs of inventory. ### Operating Expenses #### Research and Development Expenses Research and development expenses were flat compared to the prior year. #### Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $508,717 to $2,515,994 for the three months ended September 30, 2025 from $2,007,277 for the three months ended September 30, 2024. This change was primarily attributable to increases in professional and outside services expenses of $394,905, employee compensation expenses of $558,989, and general business expenses of $184,962, which were partially offset by decreases in insurance expense of $144,600 and an increase in allocation expenses of $498,456 from selling, general and administrative expenses to cost of revenue. #### Other income (expense), net Other income (expense), net decreased by $47,554 to expense of $30,559 for the three months ended September 30, 2025 from an income of $16,995 for the three months ended September 30, 2024. This decrease was primarily due to an adjustment of $46,387 in extinguishment loss due to the modification of the related party loan. #### Change in fair value of warrant liability Change in fair value of warrant liability changed by $88,848 to an expense of $80,043 during the three months ended September 30, 2025 from income of $8,805 during the three months ended September 30, 2024. The change in fair value of warrants during the third quarter of 2025 was primarily attributable to an increase in the market value of the public and private warrants in the 2025 period. #### Change in fair value of derivative liability Change in the fair value of derivative liability decreased by $87,200 to $0 during the three months ended September 30, 2025 from income of $87,200 during the three months ended September 30, 2024. The derivative liability was extinguished on February 26, 2025 as a result of the extinguishment of the loan with Yorkville. #### Change in fair value of earnout liability Change in the fair value of earnout liability decreased by $2,280,000 to an expense of $2,230,000 during the three months ended September 30, 2025 from income of $50,000 during the three months ended September 30, 2024. The change in the fair value of earnout liability during the 2025 period was driven by the changes to the probability of outcome related to our revenue assumptions. #### Interest expense, net Interest expense, net decreased by $890,581 to $564,725 for the three months ended September 30, 2025 from $1,455,306 for the three months ended September 30, 2024. This decrease was primarily driven by decreases in interest expense and amortization of the debt discount of $1,301,603 for the Yorkville Note, which was extinguished in February 2025, partially offset by the interest expense and amortization of debt discount of $521,243 for the Lynrock Lake Term Loan. ### Comparison of the nine months ended September 30, 2025 and 2024 | | For Nine Months Ended September 30, 2025 | 2024 | Change $% | | | --- | ---: | ---: | ---: | ---: | | Revenue | $10,649,930 | $4,032,168 | $6,617,762 | 164% | | Cost of revenue | 5,208,318 | 1,792,234 | 3,416,084 | 191% | | Gross profit | 5,441,612 | 2,239,934 | 3,201,678 | 143% | | Operating expenses: | | | | | | Research and development | 2,691,704 | 2,492,842 | 198,862 | 8% | | Selling, general and administrative | 6,486,697 | 9,873,029 | (3,386,332) | (34)% | | Total operating expenses | 9,178,401 | 12,365,871 | (3,187,470) | (26)% | | Loss from operations | (3,736,789) | (10,125,937) | 6,389,148 | 63% | | Other expense, net | (8,770,514) | (191,330) | (8,579,184) | N.M. | | Change in fair value of warrant liability | (3,581,122) | 199,624 | (3,780,746) | N.M. | | Change in fair value of derivative liability | 101,300 | 4,800,000 | (4,698,700) | (98)% | | Change in fair value of earnout liability | (2,070,000) | 2,970,000 | (5,040,000) | (170)% | | Interest expense, net | (1,635,014) | (3,149,315) | 1,514,301 | 48% | | Loss before income tax expense | (19,692,139) | (5,496,958) | 14,195,181 | 258% | | Income tax expense | 2,782 | — | 2,782 | 100% | | Net loss and comprehensive loss | $(19,694,921) | $(5,496,958) | $(14,197,963) | (258)% | 41 N.M. - Not meaningful ### Revenue Revenue increased by $6,617,762 to $10,649,930 for the nine months ended September 30, 2025 from $4,032,168 for the nine months ended September 30, 2024. The increase in revenue was primarily attributable to the sale of 23 QT Breast Scanners in the first nine months of 2025 as compared with nine scanners sold in the first nine months of 2024 due to the MOQs in accordance with the amended NXC Distribution Agreement, which was executed during the fourth quarter of 2024. ### Cost of Revenue Cost of revenue increased by $3,416,084 to $5,208,318 for the nine months ended September 30, 2025 from $1,792,234 for the nine months ended September 30, 2024. The increase in cost of revenue was primarily attributable to the sale of twenty-three QT Breast Scanners in the first nine months of 2025 as compared with nine scanners sold in the first nine months of 2024. Gross margin slightly decreased in the nine months ended September 30, 2025, as compared to the same period in 2024, due to variability in the weighted average costs of inventory. ### Operating Expenses #### Research and Development Expenses Research and development expenses increased by $198,862 to $2,691,704 for the nine months ended September 30, 2025 from $2,492,842 for the nine months ended September 30, 2024. The increase in research and development expenses was primarily attributable to employee compensation expenses of $198,578. #### Selling, General and Administrative Expenses Selling, general and administrative expenses decreased by $3,386,332 to $6,486,697 for the nine months ended September 30, 2025 from $9,873,029 for the nine months ended September 30, 2024. This change was primarily attributable to a decrease in professional and outside services expenses of $4,048,179 primarily due to the transaction expenses of $3,944,924 in the 2024 period, and an increase in the allocation of $1,168,351 from selling, general and administrative expenses to cost of revenue, partially offset by increases in employee compensation expenses of $1,573,638. #### Other expense, net Other expense, net increased by $8,579,184 to $8,770,514 for the nine months ended September 30, 2025 from $191,330 for the nine months ended September 30, 2024. The increase was primarily due to the extinguishment loss of $2,033,666 for the Yorkville Note and Cable Car Note, $6,640,384 in noncash expense incurred at issuance of the Lynrock Lake Term Loan, and $90,000 Extension Fee for the Cable Car Note during the nine months ended September 30, 2025, which was partially offset by the modification expense of $200,513 related to the decrease in exercise price of our private placement warrants and working capital note warrants in the nine months ended September 30, 2024. #### Change in fair value of warrant liability Change in fair value of warrant liability decreased by $3,780,746 to an expense of $3,581,122 during the nine months ended September 30, 2025 from income of $199,624 during the nine months ended September 30, 2024. The change in fair value of warrants during the 2025 period was primarily attributable to increases in the market value of the Lynrock Lake Warrant and Yorkville Warrant, which were issued in the first quarter of 2025 and subsequently revalued on June 11, 2025 upon modification. #### Change in fair value of derivative liability Change in the fair value of derivative liability decreased by $4,698,700 to $101,300 during the nine months ended September 30, 2025 from $4,800,000 during the nine months ended September 30, 2024. The change in fair value of derivatives during the 2025 period was primarily driven by the decline in the value of our common stock period in the 2024 period. The derivative liability was extinguished during the first quarter of 2025 as a result of the extinguishment of the loan with Yorkville. #### Change in fair value of earnout liability Change in the fair value of earnout liability decreased by $5,040,000 to an expense of $2,070,000 during the nine months ended September 30, 2025 from income of $2,970,000 during the nine months ended September 30, 2024. The change in the fair value of earnout liability during the first nine months of 2025 was primarily driven by changes to the probability of outcome related to our revenue assumptions. #### Interest expense, net Interest expense, net decreased by $1,514,301 to $1,635,014 for the nine months ended September 30, 2025 from $3,149,315 for the nine months ended September 30, 2024. The decrease is primarily driven by the extinguishment of the Yorkville Note and the Cable Car loan in February 2025, resulting in decreases in interest expense and amortization of the debt discount of $1,959,944 for the Yorkville Note, $198,060 for the Cable Car loan in the 2025 period, a decrease in $221,857 interest from the private secured convertible bridge financing extinguished in 2024, partially offset by an increase in interest expense and amortization of the debt discount of $943,073 for the Lynrock Lake Term Loan. ### Liquidity and Capital Resources ### Sources of Liquidity Liquidity describes our ability to meet financial obligations which arise during the normal course of business. To date, we have financed our operations primarily through the sale of equity securities, issuances of convertible notes and other debt, and grants from the U.S. government. We expect to derive future liquidity primarily through our revenues with customers and sale of equity securities. Our current liquidity position consists of cash on hand and certificates of deposit. Since our inception, we have incurred significant operating losses and negative cash flows. As of September 30, 2025 and December 31, 2024, we had an accumulated deficit of $51,635,448 and $31,940,527, respectively. As of September 30, 2025 and December 31, 2024, we had cash and restricted cash and cash equivalents of $1,735,400 and $1,192,104, respectively. Our primary uses of cash are for general working capital requirements, and capital expenditures. Cash flows from operations have been historically negative as we invested in product development, clinical trials, and manufacturing. We expect to be cash flow negative for the foreseeable future, although we may have quarterly results where cash flows from operations are positive. We and NXC entered into Amended Distribution Agreement, as amended on March 28, 2025, which provides us with MOQs that could result in cash inflows of up to $18.0 million in 2025 and $27.0 million in 2026. Our Canon Manufacturing Agreement with CMSC provides us the ability to scale manufacturing with favorable payment terms of net 90 days to support the delivery of MOQs under the Amended Distribution Agreement. On February 26, 2025, we entered into the Credit Agreement that provides the Lynrock Lake Term Loan with Lynrock Lake for a term loan in the aggregate principal amount of $10.1 million and repaid the secured Cable Car Note, and fully settled its obligations under the Yorkville Note and terminated the Yorkville SEPA by paying $3.0 million in cash and issuing a 5-year warrant, which if the Reverse Stock Split had occurred prior to the time of such issuance, would have been warrants for 5,000,071 shares. Net of these payments, we had $5.4 million of net proceeds for working capital purposes. On April 24, 2025, we received an additional $500,000 from related persons in exchange for the issuance of shares of common stock plus warrants for the purchase of common stock in the First Private Placement for working capital purposes. On May 12, 2025, we entered into a subscription agreement for the Second Private Placement in an amount of approximately $200,000 that closed on May 12, 2025, pursuant to which we issued shares of common stock plus warrants for the purchase of common stock. The proceeds of the Second Private Placement will be used for working capital purposes. On August 21, 2025, the Company entered into the Gulf Medical Distribution Agreement with GMC, a corporation organized and existing under the laws of Saudi Arabia, for an initial term of three years. Under the terms of the Gulf Medical Distribution Agreement, the Company shall authorize and grant to GMC the exclusive right to market, advertise and sell the QT Breast Scanners and the Cloud SaaS platform subscriptions in the Territory. If GMC has met the Minimum Purchase Requirements during the Initial Term, which could result in cash inflows of $11.2 million to $12.3 million in 2026, the Distribution Agreement shall automatically be extended for an additional one-year term. GMC agrees to meet or exceed the Minimum Purchase Requirements during the Initial Term. In the event GMC fails to meet these Minimum Purchase Requirements in any year during the Initial Term, the Company may, at its sole option, (a) terminate GMC’s exclusive distributorship rights for the sale and promotion of the Approved Products granted under this Agreement and appoint other distributors for the Approved Products in the Territory, or (b) terminate the Distribution Agreement. Should the Company elect to so terminate GMC’s exclusive distributorship in the Territory, the Company may continue to sell the Approved Products to GMC for GMC to distribute on a non-exclusive basis in the Territory in accordance with the terms and conditions of the Distribution Agreement, and GMC’s ongoing obligations with regard to its Minimum Purchase Requirements for the Approved Products shall terminate. Should the Company be unable to furnish GMC with sufficient quantities of the Approved Products, as may be requested by GMC in its Release Orders submitted to the Company in accordance with the terms of the Distribution Agreement, then GMC’s Minimum Purchase Requirement shall be reduced by the quantity of Approved Products that the Company is unable to deliver as requested. GMC shall secure all required governmental approvals, permits, licenses, customs clearances, and authorizations required for shipment to and use of the QT Breast Scanners in the Territory. The Company shall provide training and professional services to GMC during the term of the Distribution Agreement and shall retain all intellectual property rights. Except as GMC and the Company may otherwise mutually agree in writing, provided that GMC maintains a credit limit with the Company’s credit insurance provider that has been approved in writing by the Company, GMC shall pay the Company fifty percent (50%) of the total price of the Release Order upon order placement and fifty percent (50%) within 45 days from the date of shipping of the Approved Products to GMC’s designated location(s), or in any of the agreed upon payment terms. The Company has provided for a limited warranty of at least one year, and up to five years, depending on the purchase price paid by a client of GMC for an Approved Product. The Distribution Agreement can be terminated only with the approval of both parties and, upon termination, GMC shall be permitted to sell any QT Breast Scanners that it holds in accordance with the Distribution Agreement. On September 30, 2025, we entered into the Third Securities Purchase Agreement, by and between us, on the one hand, and certain accredited investors and qualified institutional buyers, led by the Purchasers for the October 2025 Private Placement. At the closing of the October 2025 Private Placement on October 3, 2025, we issued (i) 2,232,243 shares of our common stock; (ii) Subscription Warrants with a term of five years from the initial exercise date to purchase up to an additional 4,040,272 shares of common stock; and (iii) 5,424,083 Pre-Funded Warrants to purchase up to an additional 1,808,055 shares of common stock, exercisable any time after its issuance. The purchase price of each share of common stock is $4.50 and the purchase price for each Pre-Funded Warrant is $4.4997. Both of these amounts were paid by the Purchasers at the closing of the October 2025 Private Placement. The aggregate gross proceeds to us from the October 2025 Private Placement was $18,180,655, before deducting the offering expenses payable by us, which expenses consist solely of legal fees and the amounts provided for pursuant to a placement agency agreement In addition, the per share exercise price of each Subscription Warrant is $4.50 and the per share exercise price of each Pre-Funded Warrant is $0.0003. We believe that the cash received for the Lynrock Lake Term Loan, from the related persons in the First Private Placement and the Second Private Placement, and from the October 2025 Private Placement, as well as the additional revenue anticipated from MOQs per the Amended Distribution Agreement and the Gulf Medical Distribution Agreement, will be sufficient to fund our current operating plan for at least the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of our spending to support research and development activities, the timing and cost of establishing additional sales and marketing capabilities, and the timing and cost to introduce new and enhanced products. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. Any additional debt financing obtained by us in the future could also involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Additionally, if we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of the Company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. ### Lynrock Lake Term Loan On February 26, 2025, we entered into the Credit Agreement that provides the Lynrock Lake Term Loan with Lynrock Lake. The Credit Agreement is secured by a first priority lien on substantially all of our assets and provides for a term loan in the aggregate principal amount of $10,100,000 at an interest rate of 10.0% per annum, compounded quarterly. The maturity date of the Credit Agreement is March 31, 2027. The Lynrock Lake Term Loan shall be repaid on the maturity date in an amount equal to the aggregate principal amount outstanding, together with all accrued and unpaid principal and any outstanding and payable fees. Subject to the payment of the Make-Whole Amount (as defined in the Credit Agreement), we may at any time prior to the maturity date optionally prepay the term loan, in full or in part, upon irrevocable written notice of three business days prior to the proposed prepayment; provided that if such prepayment is to be funded with the proceeds of a refinancing or disposition, such notice of prepayment may be revoked if the financing or disposition is not consummated; provided further, that any such prepayment made in connection with, or in anticipation of, a Change of Control (as defined in the Credit Agreement) will also be subject to a prepayment premium equal to 20% of the amount of principal being prepaid (the “Prepayment Premium”). Partial prepayments of the term loan shall be in an aggregate principal amount of $250,000 or a whole multiple thereof. Subject to the payment of the Make-Whole Amount (as defined in the Credit Agreement), at the option of Lynrock Lake, we will make mandatory repayments of the term loan upon the following occurrences: - If on any date we or any of our subsidiaries will receive any cash proceeds from any Extraordinary Receipt (as defined in the Credit Agreement) in an amount equal to or exceeding $250,000 in the aggregate, we shall prepay the term loan within 5 business days of receipt of such cash proceeds, in an amount equal to 100% percent of the cash proceeds of such Extraordinary Receipt; - If any indebtedness will be incurred by us or any subsidiary thereof (excluding any indebtedness that the Credit Agreement permits us to incur), an amount equal to 100% of the net cash proceeds thereof shall be applied on the date of incurrence or receipt toward the prepayment of the term loan; - If on any date we or any of our subsidiaries will receive net cash proceeds in an amount equal to or exceeding (i) $250,000 in any single transaction or series of related transactions or (ii) $250,000 in the aggregate for all transactions during the term of the Credit Agreement from any Asset Sale (as defined in the Credit Agreement) or Recovery Event (as defined in the Credit Agreement) then we or our subsidiary shall prepay the term loan, on or prior to the date which is five business days after the date of the realization or receipt by us or our subsidiary in an amount equal to 100% percent of such proceeds; and - Subject to the payment of the Prepayment Premium in addition to the Make-Whole Amount (as defined in the Credit Agreement), in the event that a Change of Control (as defined in the Credit Agreement) will occur, we shall prepay all of the outstanding term loan, on or prior to the date which is two business days after the date of such Change of Control (as defined in the Credit Agreement). There are no requirements to make any prepayment in the event that we sell any of our capital stock. In addition, at the option of Lynrock Lake, we shall also make mandatory repayments of the term loan on a monthly basis, no later than five business days after the end of each month (provided that such date for payment is prior to the maturity date), if we or our subsidiaries receive payment of accounts receivable on or after January 1, 2026, in an amount equal to 15% percent of the aggregate amount of payments of accounts receivable actually received during such prior month, net of any cost of collection incurred not in the ordinary course of business. No Make-Whole Amount (as defined in the Credit Agreement) or Prepayment Premium is due or payable on any such mandatory prepayment as a result of receipt of accounts receivable on or after January 1, 2026. As of September 30, 2025, Lynrock Lake has not elected the repayment option in the amount equal to 15% percent of the aggregate amount of payments of accounts receivable actually received on or after January 1, 2026. Furthermore, in connection with the Lynrock Lake Term Loan, we issued to Lynrock Lake, pursuant to the terms of a Warrant to Purchase common stock, the Lynrock Lake Warrant to purchase 20,333,623 shares of common stock at an exercise price of $1.20 per share. The Lynrock Lake Warrant is exercisable until February 26, 2035. Lynrock Lake may cashless exercise the Lynrock Lake Warrant. The Lynrock Lake Warrant is also subject to anti-dilution adjustments to the exercise price and the number of shares which may be purchased upon exercise of the Lynrock Lake Warrant in the event that we issue shares of common stock (or derivative securities) at a price that is either less than the $1.20 exercise price or the fair market value of a share of common stock from the immediately prior trading day. The fair value of the Lynrock Warrant at issuance amounted to $16,496,084. Upon issuance of the Lynrock Lake Term Loan, we recorded a loss of $6,640,384, including debt issuance costs of $244,300, in other income (expense), net within the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2025. As of September 30, 2025, the outstanding amount of the Lynrock Lake Term Loan was $5,272,879 net of the unamortized debt discount of $9,827,121, and accrued interest of $670,193. On August 26, 2025, the Company and Lynrock Lake entered into the Lynrock Amended Credit Agreement to add Tranche B to the loan and increase the aggregate principal amount of the Lynrock Lake Term Loan to $15.1 million. The proceeds of Tranche B were used to repurchase the Yorkville Warrant for an aggregate price of $5.0 million. On October 6, 2025, the Company repaid the Tranche B loan in the amount of $5.0 million, plus accrued interest and a 6% premium. ### Related Party Convertible Notes Payable In July 2020, we issued three convertible notes to three of its stockholders for advances up to $3,500,000 in principal (the “2020 Notes”) and bearing annual interest of 5% on any amounts drawn. An additional note was issued in March 2022 as part of the 2020 Notes, but with an annual interest rate of 8%. All principal and interest payments are due on or before July 1, 2025. The 2020 Notes are convertible, at the holder’s option, into shares of common stock at the lower of $43.77 per share or the offering price in a financing of at least $5,000,000 in equity from unaffiliated parties. As of September 30, 2025, an aggregate of 88,402 shares of common stock would be issued if the entire principal and interest under the 2020 Notes was converted. In connection with the issuance of the Lynrock Lake Term Loan, on February 26, 2025, the maturity date on the these convertible notes was extended to October 21, 2027. As of September 30, 2025 and December 31, 2024, the outstanding amount of the 2020 Notes was $3,190,112 and $3,143,725, respectively, and accrued interest of $679,215 and $550,430, respectively. ### Related Party Working Capital Loan On May 3, 2023, we issued a promissory note (the “Working Capital Note”) to a stockholder for a principal amount of $250,000. The Working Capital Note was subsequently amended and restated six times on June 12, 2023 to add an additional principal amount of $100,000, August 15, 2023 to add an additional principal amount of $75,000, August 29, 2023 to add an additional principal amount of $100,000, September 12, 2023 to add an additional principal amount of $75,000, September 15, 2023 to add an additional principal amount of $50,000, and October 26, 2023 to add an additional principal amount of $55,000, for an aggregate principal amount outstanding as of December 31, 2023 under the Working Capital Note of $705,000. The Working Capital Note was issued to provide us with additional working capital during the period prior to consummation of the Business Combination Agreement with GigCapital5. The Working Capital Note is interest-free and originally matured on the earlier of (i) the date on which we consummated the Business Combination with GigCapital5, Inc.; (ii) the date we wind up; or (iii) December 31, 2023. On March 4, 2024, the Working Capital Note was agreed to be amended and subordinated pursuant to and in accordance with the terms of the Business Combination Agreement. Effective on the closing of the Business Combination, the Working Capital Note cannot be repaid prior to the repayment or conversion of the Yorkville Note issued to Yorkville. In connection with the issuance of the Lynrock Lake Term Loan, on February 26, 2025, the maturity date on the Working Capital Note was extended to October 1, 2027. As of September 30, 2025 and December 31, 2024, the outstanding balance of the Working Capital Note was $705,000. ### Cash Flows The following table provides information regarding our cash flows for the periods presented: | | Nine Months Ended September 30, 2025 | 2024 | | --- | ---: | ---: | | Net cash used in operating activities | $(5,857,572) | $(8,806,402) | | Net cash used in investing activities | (46,818) | (34,590) | | Net cash provided by financing activities | 6,447,686 | 10,220,475 | | Net increase in cash and restricted cash and cash equivalents | $543,296 | $1,379,483 | ### Net Cash Used In Operating Activities Net cash used in operating activities was $5,857,572 for the nine months ended September 30, 2025 as compared to $8,806,402 for the nine months ended September 30, 2024. The primary use of our cash was to fund research and development and general and administrative expenses. Net cash used for the nine months ended September 30, 2025 consisted of a net loss of $19,694,921, adjusted for non-cash expenses primarily including depreciation and amortization of $115,474, stock-based compensation of $518,721, loss on issuance of the Lynrock Lake Term Loan of $6,640,384, debt extinguishment loss of $2,080,053, debt modification expense of $90,000, non-cash interest of $749,097, non-cash operating lease income of $31,012, increase in fair value of warrant liability of $3,581,122, decrease in fair value of derivative liability of $101,300, increase in fair value of earnout liability of $2,070,000, and a net decrease of $1,875,190 from changes in operating assets and liabilities. The net change in operating assets and liabilities was primarily due an increase in accounts receivable of $3,176,587, an increase in prepaid expenses and other current assets of $298,286, and an increase in inventory of $2,101,508, partially offset primarily by an increase in accrued expenses and other current liabilities of $1,856,098, an increase in accounts payable of $1,071,550, and an increase in other liabilities of $798,979. Net cash used for the nine months ended September 30, 2024 consisted of a net loss of $5,496,958, adjusted for non-cash expenses including depreciation and amortization of $204,283, stock-based compensation of $166,187, warrant modification expense of $200,513, fair value of common stock issued in exchange for services and in connection with non-redemption agreements of $3,718,349, a loss of $206,000 related to issuance of common stock in connection with a stock subscription agreement, non-cash interest of $2,404,031, non-cash operating lease income of $20,652, decrease in fair value of warrant liability of $199,624, decrease in fair value of derivative liability of $4,800,000, decrease in fair value of earnout liability of $2,970,000, and a $2,219,821 decrease from net changes in operating assets and liabilities. The net change in operating assets and liabilities was primarily due to an increase in accounts receivable of $256,886, an increase in prepaid expenses and other current assets of $459,804, a decrease in accounts payable of $2,061,853, a decrease in accrued expenses and other liabilities of $768,614, and a decrease in deferred revenue of $327,778, partially offset by a decrease in inventory of $1,525,857, and an increase in other liabilities of $129,257. ### Net Cash Used In Investing Activities Net cash used in investing activities was $46,818 for the nine months ended September 30, 2025 as compared to $34,590 for the nine months ended September 30, 2024. The use of net cash used in investing activities for both periods was related to the purchase of property and equipment. ### Net Cash Provided By Financing Activities During the nine months ended September 30, 2025, net cash provided by financing activities was $6,447,686 primarily due to $15,000,000 of net proceeds received from issuance of long-term debt related to the Lynrock Lake Term Loan, net proceeds from the sale of common stock and warrants of $679,241, proceeds from warrant exercises of $531,622, and proceeds from stock option exercises of $74,839, partially offset by the repayment of long-term debt of $4,688,016 related to the Yorkville Note, Cable Car Note, warrant repurchase payment of $5,000,000 to Yorkville, and payment of $150,000 for deferred issuance costs. During the nine months ended September 30, 2024, net cash provided by financing activities was $10,220,475, primarily due to $10,525,000 of net proceeds received from issuance of long-term debt related to the Yorkville Pre-Paid Advance and the Cable Car Note, cash proceeds of $500,000 received from issuance of common stock pursuant to a subscription agreement, and net proceeds of $1,238,530 received from the business combination of QT Imaging, Inc. and GigCapital5, Inc. (the “Merger”), partially offset by repayment of debt of $2,043,055. ### Future Funding Requirements We expect to incur increased significant expenses in connection with our ongoing activities, particularly as we continue the research and development of our products and product candidates, seek expanded regulatory clearances for the QT Breast Scanner, and build a U.S. sales and marketing team. As part of the effort to build the sales and marketing capabilities in the United States, QT Imaging entered into the Amended Distribution Agreement, pursuant to which QT Imaging appointed NXC as the exclusive agent for the sale of the QT Breast Scanner in the U.S. and U.S. territories. We expect to incur additional costs associated with operating as a public company. Our future funding requirements, both short-and long-term, will depend on many factors, including, without limitation: - Having the cash to repay our debt obligations as they come due; - Expand our current manufacturing operations and expand existing and build new partnerships with contract manufacturing third-party vendors; - Purchase inventory for our planned shipments; - Expand or enhance our distribution with third-party distribution channels outside of the U.S.; - The progress and results of our trials and interpretation of those results by the FDA (and other regulatory authorities, as required); - Seek regulatory clearances for product candidates and expanded regulatory clearance for the QT Breast Scanner; - The cost of operating as a public company, including hiring additional personnel as well as increased director and officer insurance premiums, audit and legal fees, investor relations fees and expenses related to compliance with public company reporting requirements under the Exchange Act and rules implemented by the SEC and Nasdaq; and - The costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending our intellectual property-related claims. We plan to continue to incur substantial costs in order to conduct research and development activities necessary to develop a commercialized product. Additional capital will be needed to undertake these activities and commercialization efforts. We intend to raise such capital through the issuance of additional equity, borrowings and potential strategic alliances with other companies. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If such financing is not available at adequate levels or on acceptable terms, we could be required to significantly reduce operating expenses and delay, reduce the scope of or eliminate some of our development programs or our commercialization efforts, out-license intellectual property rights to our product candidates and sell unsecured assets, or a combination of the foregoing, any of which may have a material adverse effect on our business, results of operations, financial condition and/or our ability to fund our scheduled obligations on a timely basis, or at all. Because of the numerous risks and uncertainties associated with manufacturing, research, development and commercialization of products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including, without limitation: - The timing, receipt and amount of revenues from the sales of the QT Breast Scanner and related products and services, or any future approved or cleared products and product candidates, if any; - The cost of future activities, including product sales, medical affairs, marketing, manufacturing and distribution for the QT Breast Scanner; - The costs, timing, and outcomes of regulatory review of applications for expanded clearances for the QT Breast Scanner; - The scope, progress, results and costs of researching, developing and manufacturing our product candidates or any future product candidates, and conducting studies and clinical trials; - The timing of, and the costs involved in, obtaining regulatory approvals or clearances for our product candidates or any future product candidates; - The cost of manufacturing our product candidates or any future product candidates and any products we successfully commercialize, including costs associated with building out our manufacturing capabilities; - The cost and time needed to attract and retain skilled personnel to support our continued growth; - Our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such agreements that we may enter into; and - The costs associated with being a public company. Additionally, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for future trials and other research and development activities. Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic partnerships or marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. In addition, debt financing would result in increased fixed payment obligations. If we raise funds through collaborations, strategic partnerships or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or products, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or eliminate our product development or future commercialization efforts, or grant rights to develop and market products that we would otherwise prefer to develop and market ourselves. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish these plans and secure sources of financing and attain profitable operations. If we are unable to obtain adequate capital, we could be forced to cease operations. See the section entitled “*Risk Factors”* for additional factors and risks associated with our capital requirements. ### Off-Balance Sheet Arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements. ### Contractual Obligations We lease our operating facilities in Novato, California, under a non-cancelable operating lease through May 31, 2027. There are no options or rights to extend the term of this lease. ### Contingencies ### Litigation We are subject to occasional lawsuits, investigations and claims arising out of the normal course of business. As of the date the condensed consolidated financial statements were available to be issued, management is not aware of any pending claims that will have a material impact on our condensed consolidated financial statements. ### Emerging Growth Company We are an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company, or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an EGC, we intend to rely on such exemptions, we are not required to, among other things: (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd- Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (United States) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation. We will remain an EGC under the JOBS Act until the earliest of (i) the last day of our first fiscal year following the fifth anniversary of the Closing of the Business Combination, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the date on which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 promulgated under the Exchange Act, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three-years. ### Critical Accounting and Estimates See Part II, Item 7 “Critical Accounting and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2024. ### Recent Accounting Pronouncements ### Recent Accounting Pronouncements Not Yet Adopted See Note 1 to the unaudited condensed consolidated financial statements for a discussion of recent accounting pronouncements. ## Market risk As filed, 163 characters. We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item. ## Controls and procedures As filed, 4,301 characters. *Disclosure Controls and* Procedures The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, refers to controls and other procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. #### Evaluation of Disclosure Controls and Procedures As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2025. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective. #### Material Weaknesses Identified In connection with the audit of the consolidated financial statements as of and for the fiscal year ended December 31, 2024, we identified a misstatement in the condensed consolidated financial statements for the three-month period ended March 31, 2024, six-month period ended June 30, 2024 and nine-month period ended September 30, 2024 as a result of the material weakness related to technical accounting previously identified for the quarter ended March 31, 2024. We have made significant progress in our remediation efforts during the year ended December 31, 2024 and the quarter ended March 31, 2025, which included implementing technology, hiring personnel, and other activities, including engaging external resources and, as a result, have remediated the material weakness related to technical accounting as of March 31, 2025. #### Changes in Internal Control Over Financial Reporting During the three months ended September 30, 2025, the Company implemented internal controls for the review of technical accounting analyses prepared by third-party technical accounting experts related to significant and non-standard transactions. There were no other changes in our internal control over financial reporting that occurred in the three months ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. #### Inherent Limitations on Effectiveness of Controls The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting. ## Risk factors As filed, 20,272 characters. As of the date of this Quarterly Report on Form 10-Q, we supplement the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ending December 31, 2024 (the “Annual Report”) with the following risk factors. Any of these risk factors disclosed in our Annual Report or herein could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC. The forward-looking statements contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors: - our being a development-stage company with limited operating history and significant losses; - our ability to successfully execute our business model, including market acceptance of our planned products and product candidates at acceptable prices; - our ability to have our products accepted by hospitals, clinics and medical professionals, including radiologists, and to have a sufficient number of radiologists who are trained and can review the images generated by the QT Breast Scanner; - the ability to repay our debt cash obligations as they come due; - the occurrence of a pandemic, epidemic, or outbreak of infectious disease that may materially or adversely affect our business, financials, and product development; - our ability to raise additional capital; - the effect of the Company’s debt agreements on its flexibility in operating the business; - our ability to sustain revenue growth or profitability; - our plan to do business globally is subject to additional risks and uncertainties; - the success of key supplier or distribution agreements; - the effects of tariffs or other restrictions related to “trade wars”; - the risk of incurring uninsured losses; - the ability to maintain the confidentiality and integrity of the Company’s data and other sensitive information; - the ability of the business to respond to changes in general economic conditions; - the occurrence of technological changes; - our success in recruiting and retaining key employees; - the ability to manage growth effectively; - our ability to compete and adapt in our industry; - the outcome of any legal proceedings that may be instituted against our business and other litigation and regulatory risks; - the ability to obtain additional clearances and approvals from the FDA for current and future products; - the effect of unanticipated changes in effective tax rates on operations and financials; - the ability to adequately protect the Company’s intellectual property rights; - the impact of the terms and conditions of licenses and sublicenses granted by third-parties; - our management team’s limited experience managing a public company; - our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business; - the effect of the issuance of additional shares of common stock on our stock price; - future sales, or perception of future sales, of common stock on our stock price; - our governing documents’ effect on stock price and stockholders’ ability to gain favorable judicial forums; - the effect of the Company’s warrants on the market price of the common stock; - our ability to enforce covenants not to compete; - the uncertainty of industry data, projections and estimates; - the effect of write-downs and write-offs that the Company may be required to take; - the ability to maintain internal controls over financial reports; and - the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this Quarterly Report. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. ***We are a development-stage company with limited operating history and significant losses since inception which may make it difficult to evaluate prospects for our future viability and predict our future performance. We may never be able to effectuate our business plan or achieve any meaningful revenue or reach profitability.*** We have a limited operating history and only a preliminary and unproven business plan upon which investors may evaluate our prospects. We have not yet demonstrated the commercial viability at scale of our breast imaging technology platform. QT Scanner 2000 Model A, (the “QT Breast Scanner”) is deployed at facilities in the United States and abroad, but we have not demonstrated scale of deployment and manufacturing necessary to achieve commercial viability despite having clearance from the FDA for breast imaging with the QT Breast Scanner. Even if we are able to do so, we may not be able to manufacture the QT Breast Scanner device at the costs needed to support our business model. Even if we are able to commercialize some of our products or product candidates, there can be no assurance that we will generate significant revenues or ever achieve profitability. We expect to continue to incur significant sales and marketing, research and development, regulatory and other expenses as we expand our marketing efforts to increase adoption of our products, expand existing relationships, obtain regulatory approvals for our product candidates, conduct clinical studies on our existing and planned product candidates and develop new product candidates or add new features to our existing products. There is no assurance that our distribution partners will succeed in selling and servicing devices in sufficient volumes to help the company meet its business plan, revenue objectives or profitability. Furthermore, even if our technology and product become commercially viable and deployed at scale, we may not generate sufficient revenue necessary to support our business. We may never successfully stimulate market interest in our QT Breast Scanner in the near-to-mid-term at any level or at all, which may cause our business to fail. The medical imaging industry is also highly competitive, and our technology, products, services or business models may not achieve widespread market acceptance. If we are unable to address any issues mentioned above, or encounter other problems, expenses, difficulties, complications, and delays in connection with the starting and expansion of our business, our entire business may fail, in which case you may lose your entire investment. We have a history of net losses and negative cash flow from operations since inception and we expect such losses and negative cash flows from operations to continue in the foreseeable future. As of September 30, 2025 and December 31, 2024, we had working deficit of $1.5 million and $4.9 million, respectively, and an accumulated deficit of approximately $51.6 million and $31.9 million, respectively. For the three months ended September 30, 2025 and 2024, we incurred net losses of approximately $4.6 million and $3.6 million, respectively. For the nine months ended September 30, 2025 and 2024, we incurred net losses of approximately $19.7 million and $5.5 million, respectively. For the nine months ended September 30, 2025 and 2024, we used cash in operations of $5.9 million and $8.8 million, respectively. We anticipate our losses will continue to increase from current levels because we expect to incur additional costs related to developing our business, including research and development costs, manufacturing costs, employee-related costs, costs of complying with government regulations, intellectual property development and prosecution costs, marketing and promotion costs, capital expenditures, general and administrative expenses, and costs associated with operating as a public company. Our ability to generate revenue from our operations and ultimately achieve profitability will depend on factors including but not limited to whether we can complete the development and commercialization of our QT Breast Scanner breast imaging technology and our future products, whether we can manufacture the QT Breast Scanner and future products on a commercial scale in such amounts and at such costs as we anticipate, and whether we can achieve market acceptance of our products, services and business models. The net losses that we incur may fluctuate significantly from period to period. As a result of these increased expenditures, we will need to generate significant additional revenue in order to offset our operating expenses and achieve and sustain profitability. Accordingly, we may not achieve or maintain profitability, and we may continue to incur significant losses in the future. Even if we achieve profitability, we cannot be sure that we will remain profitable for any substantial period of time. If we do not achieve or sustain profitability, it will be more difficult for us to finance our business and accomplish our strategic objectives, either of which would have a material adverse effect on our business, financial condition, results of operations and prospects and may cause the market price of the common stock to decline. ***Future sales, or the perception of future sales, of common stock by us or our existing stockholders in the public market could cause the market price for our common stock to decline.*** The sale of substantial amounts of shares of common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. All shares issued as merger consideration in the Business Combination are freely tradable without registration under the Securities Act of 1933, as amended (the “Securities Act”) and without restriction by persons other than our “affiliates” (as defined under Rule 144), including our directors, executive officers and other affiliates, and certain other former QT Imaging stockholders. We have registered in a resale registration statement on Form S-1 declared effective by the SEC on May 22, 2024, securities held by certain our stockholders which have the right, subject to certain conditions, to require us to register the sale of their shares of common stock under the Securities Act, pursuant to the terms of a registration statement that we entered into with GigAcquisitions5 and certain other security holders of GigCapital5 and QT Imaging (the “GigCapital5 Registration Rights Agreement”). We have also registered in a resale registration statement on From S-1 declared effective by the SEC on February 5, 2025, the securities sold in the Private Placement as the purchaser received the right, subject to certain conditions, to require us to register the sale of their shares of common stock under the Securities Act, pursuant to the terms of a registration statement that we entered into (“PIPE Registration Rights Agreement”). The sale of a large number of shares by these stockholders could cause the prevailing market price of shares of common stock to decline. Significant sales of shares of common stock may have negative pressure on the public trading price of our common stock. The shares already registered for resale currently represent over 50% of the total number of shares outstanding, based on the number of shares of common stock outstanding as of August 6, 2025. Even though the current trading price is significantly below our initial public offering price, based on the closing price of the common stock on August 6, 2025, certain of our stockholders may have an incentive to sell their shares because they will still profit on sales due to the lower prices at which they purchased their shares as compared to the public investors. For example, members of our founding stockholder, GigAcquisitions5, who received a distribution of shares from GigAcquisitions5 for which there is an effective resale registration statement, have a cost basis in up to 1,911,696 shares of common stock that were acquired at an effective purchase price of $0.0130776 per share, and, therefore, based on the closing price of the common stock on November 7, 2025, could earn an aggregate profit of approximately $12,402,795 from the resale of such shares. To the extent that the selling security holders under any of our registration statements on Form S-1 sell their shares or are perceived by the market as intending to sell them, the market price of shares of common stock could drop significantly. These factors could also make it more difficult for us to raise additional funds through future offerings of shares of common stock or other securities. As of September 30, 2025, we had 7,886,173 warrants outstanding that were exercisable for cash at an exercise price of $6.90 per share, and an additional 1,458,314 warrants outstanding that became exercisable for cash on May 22, 2025 with an exercise price of $2.016 per share. On February 26, 2025, we issued a warrant to purchase 20,333,623 shares of common stock to Lynrock Lake, which is exercisable on a "cashless basis" with an exercise price of $1.20 per share as part of the $10.1 million term loan received from Lynrock Lake. The exercise of any of this warrant would result in the issuance of shares which could then be sold. On April 24, 2025, we issued warrants in a private placement with a term of ten years from the initial exercise date to purchase up to an additional 523,286 shares of common stock with a per share exercise price of $2.16 that became exercisable on October 24, 2025. On May 12, 2025, we issued warrants in a private placement with a term of five years from the initial exercise date to purchase up to 68,447 shares of common stock with a per share exercise price of $3.36 that become exercisable on November 12, 2025. In addition, the shares of common stock that will be issued upon exercise of stock options already granted pursuant to the terms of, or those shares of common stock reserved for future issuance under the 2024 Equity Incentive Plan and Inducement Equity Incentive Plan will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements and, in some cases, limitations on volume and manner of sale applicable to affiliates under Rule 144, as applicable. We have filed a registration statement on Form S-8 under the Securities Act to register shares of common stock or securities convertible into or exchangeable for shares of common stock issued pursuant to our equity incentive plans, and may in the future file additional registration statements on Form S-8. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market. ***Certain of the Company’s warrants are accounted for as a warrant liability and were recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of the common stock.*** As of September 30, 2025, 296,445 private warrants were outstanding. These warrants became exercisable 30 days after completion of the Business Combination and are exercisable now that we have an effective registration statement under the Securities Act covering the shares of common stock of the Company issuable upon exercise for so long as a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their warrants on a cashless basis under certain circumstances). Furthermore, the Company may redeem outstanding warrants in certain circumstances; provided, however, that these warrants will not be redeemable by the Company so long as they are held by the initial purchasers or any of its permitted transferees, to which the initial purchaser transferred the private warrants in June 2024. Under GAAP, the Company is required to evaluate contingent exercise provisions of these warrants and then their settlement provisions to determine whether they should be accounted for as a warrant liability or as equity. Any settlement amount not equal to the difference between the fair value of a fixed number of the Company’s equity shares and a fixed monetary amount precludes these warrants from being considered indexed to its own stock, and therefore, from being accounted for as equity. As a result of the provision that these warrants, when held by someone other than the initial purchasers or their permitted transferees, will be redeemable by the Company, the requirements for accounting for these warrants as equity are not satisfied. Therefore, the Company is required to account for these warrants as a warrant liability and record (a) that liability at fair value, and (b) any subsequent changes in fair value as of the end of each period for which earnings are reported. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock. On February 26, 2025, the Company issued to Lynrock Lake, pursuant to the terms of the Lynrock Lake Warrant, a warrant to purchase 20,333,623 shares of common stock at an exercise price of $1.20 per share. The Lynrock Lake Warrant is exercisable until February 26, 2035. Lynrock Lake may cashless exercise the Lynrock Lake Warrant. The Lynrock Lake Warrant is also subject to anti-dilution adjustments to the exercise price and the number of shares which may be purchased upon exercise of the Lynrock Lake Warrant in the event that the Company issues shares of common stock (or derivative securities) at a price that is either less than the $1.20 exercise price or the fair market value of a share of common stock from the immediately prior trading day. As of September 30, 2025, the Lynrock Lake Warrant to purchase 20,333,623 shares of common stock was outstanding. On February 26, 2025, the Company issued to Yorkville a warrant to purchase 5,000,071 shares of its common stock at an exercise price of $1.20 per share pursuant to the Yorkville Warrant. The Yorkville Warrant is exercisable until February 26, 2030. Both the Lynrock Lake Warrant and Yorkville Warrant were initially classified as a warrant liability. On June 11, 2025, the Lynrock Lake Warrant was amended to update the provisions that would trigger cash settlement such that, when such events occur, the holders of the warrants receive the same form of consideration as the underlying stockholders. According to ASC 815-40, *Derivatives and Hedging: Contracts in an Entities Own Equity*, equity classification is permitted for an instrument that requires net-cash settlement if the holders of the contract’s underlying shares receive the same form of consideration in transactions outside the Company’s control. Consequently, upon modification, the warrants were revalued and then reclassified to additional paid-in capital on the condensed consolidated balance sheets. On August 26, 2025, the Company repurchased the Yorkville Warrant for an aggregate price of $5.0 million. Filed Nov 12, 2025. Source: SEC EDGAR, the filing index for accession 0001628280-25-051332. Last ingested by Listed: Oct 24, 2026, 15:16 ET. No prices; not investment advice.