QT Imaging(QTI) - 2023 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Financial Statements (Unaudited) The unaudited statements show a Q1 2023 net loss of $1.47 million and a stockholders' deficit improvement to -$8.7 million Condensed Balance Sheets Condensed Balance Sheet Summary (Unaudited) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | $32,296,352 | $41,945,571 | | Cash and marketable securities held in Trust Account | $31,670,407 | $41,561,656 | | Total Liabilities | $9,188,568 | $13,418,199 | | Deferred underwriting fee payable | $2,760,000 | $9,200,000 | | Common stock subject to possible redemption | $31,828,698 | $41,606,846 | | Total Stockholders' Deficit | ($8,720,914) | ($13,079,474) | Condensed Statements of Operations and Comprehensive Loss Condensed Statement of Operations (Unaudited) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Revenues | $0 | $0 | | General and administrative expenses | $1,767,358 | $612,883 | | Loss from operations | ($1,767,358) | ($612,883) | | Interest income on Trust Account | $443,280 | $17,513 | | Net loss and comprehensive loss | ($1,472,888) | ($369,935) | | Net loss per common share, basic and diluted | ($0.28) | ($0.06) | Condensed Statements of Stockholders' Deficit - The total stockholders' deficit improved from $(13,079,474) at the end of 2022 to $(8,720,914) as of March 31, 2023, primarily driven by a $6,440,000 adjustment for waived deferred underwriting fees, partially offset by the net loss of $1,472,888 for the quarter[15] Condensed Statements of Cash Flows Condensed Statement of Cash Flows Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2023 | | :--- | :--- | | Net cash used in operating activities | ($546,879) | | Net cash provided by investing activities | $10,309,449 | | Net cash used in financing activities | ($9,484,625) | | Net increase in cash | $277,945 | - Investing activities were driven by $10.7 million in cash withdrawn from the Trust Account, while financing activities primarily consisted of $10.4 million used for the redemption of Public Units[18] Notes to Unaudited Condensed Financial Statements - The Company is a special purpose acquisition company (SPAC) whose activities relate to its formation, IPO, and identifying a target for a Business Combination[21][22] - On December 8, 2022, the Company entered into a Business Combination Agreement with QT Imaging, Inc[43] - The deadline to complete a business combination has been extended to September 28, 2023, contingent on the Sponsor making monthly deposits into the Trust Account[31][37] - The company's liquidity condition and potential mandatory liquidation raise substantial doubt about its ability to continue as a going concern[39][40] - On March 20, 2023, underwriter Wells Fargo waived its portion of the deferred underwriting fees, totaling $6,440,000[27][89] - Subsequent to the quarter end, the company's stock was delisted from the NYSE and commenced trading on Nasdaq on April 26, 2023, and the company received additional loans from its Sponsor[106][107][109] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the SPAC's merger agreement, a Q1 2023 net loss of $1.47 million, and liquidity concerns amid shareholder redemptions - The company is a SPAC that entered into a Business Combination Agreement with QT Imaging, Inc, a medical device company, on December 8, 2022[114] Results of Operations Comparison | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net Loss | $1,472,888 | $369,935 | | Key Drivers | Increased operating expenses ($1.77M vs $0.61M) | Lower operating expenses | - As of March 31, 2023, the company had approximately $31.7 million remaining in the trust account following redemptions of 995,049 shares in March 2023 and 18,985,950 shares in September 2022[125][126] - The company's ability to continue as a going concern is subject to substantial doubt due to the risk of mandatory liquidation if a business combination is not completed by the September 28, 2023 deadline[151] - To fund operations and extensions, the company has received an aggregate of $1,060,000 under an Extension Note and $805,000 under a convertible Working Capital Note from its Sponsor as of March 31, 2023[138][139] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide the information requested under this item - As a smaller reporting company, GigCapital5, Inc is not required to provide quantitative and qualitative disclosures about market risk[168] Item 4. Controls and Procedures Management concluded disclosure controls were effective as of March 31, 2023, with no material changes to internal controls - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[170] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[171] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings nor is it aware of any such threatened proceedings - The company is not currently subject to any material legal proceedings[173] Item 1A. Risk Factors A new risk factor addresses the potential failure of the post-combination company to meet Nasdaq's initial listing requirements - A supplemental risk factor was added regarding the possibility that Nasdaq may not list the securities of the post-combination company[175] - Failure to list on Nasdaq could result in reduced liquidity, a "penny stock" designation, and a decreased ability to raise future financing[177] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details unregistered sales to the Sponsor and the use of IPO proceeds, leaving $356,141 in working capital as of March 31, 2023 - The company sold 5,735,000 Founder Shares and 795,000 Private Placement Units to its Sponsor in unregistered transactions exempt under Section 4(a)(2) of the Securities Act[178][180][181] - Gross proceeds from the IPO and private placement totaled $237.95 million, with $232.3 million placed into the Trust Account[186][187][188] - As of March 31, 2023, after redemptions and expenses, $356,141 in cash remained outside the Trust Account for working capital purposes[191] Item 3. Defaults Upon Senior Securities This item is not applicable to the company - Not Applicable[192] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not Applicable[193] Item 5. Other Information The company reported no information for this item - None[194] Item 6. Exhibits This section lists filed exhibits, including officer certifications and Inline XBRL documents - The exhibits filed with the report include officer certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and Inline XBRL data files[196]