Financial Performance - The company has incurred a net loss of $11,136,000 for the three months ended March 31, 2025, and has an accumulated deficit of $43,076,527[140]. - Revenue for Q1 2025 increased by 105% to $2,798,415 compared to $1,362,163 in Q1 2024, primarily due to the sale of six QT Breast Scanners[158]. - Cost of revenue rose by 64% to $986,553 in Q1 2025 from $602,083 in Q1 2024, attributed to the increased sales of QT Breast Scanners[160]. - Gross profit for Q1 2025 was $1,811,862, a 138% increase from $760,080 in Q1 2024[158]. - Net loss for Q1 2025 was $11,136,000, a significant increase from a loss of $628,590 in Q1 2024, reflecting an increase in other expenses[158]. - The company had an accumulated deficit of $43,076,527 as of March 31, 2025, up from $31,940,527 at the end of 2024[169]. Funding and Capital Requirements - The company continues to incur losses and will need to raise additional capital to achieve profitability[140]. - The company expects to incur significant expenses for research and development, particularly for the QT Breast Scanner, and plans to raise capital through equity issuance and borrowings[189]. - The company anticipates that future funding requirements will depend on various factors, including growth rate and timing of expenditures[190]. - Future funding requirements may increase significantly based on factors such as debt obligations, manufacturing expansion, and regulatory clearances for the QT Breast Scanner[191]. - The company expects to finance cash needs through a combination of public or private equity offerings, debt financings, and strategic partnerships[193]. - If additional funds are not raised, the company may need to delay or reduce product development and commercialization efforts[195]. Agreements and Partnerships - The company entered into a Distribution Agreement with NXC Imaging, appointing NXC as the exclusive reseller of QT Breast Scanners in the U.S. and U.S. territories[137]. - The company has entered into a Manufacturing Agreement with Canon Medical Systems, appointing them as the exclusive manufacturer of QT Breast Scanners[138]. - The Amended Distribution Agreement with NXC could generate cash inflows of up to $18 million in 2025 and $27 million in 2026[170]. - The company plans to build a U.S. sales and marketing team and has appointed NXC as the exclusive agent for the QT Breast Scanner in the U.S.[189]. Loans and Financial Obligations - The company has a senior secured term loan of $10,100,000 with an interest rate of 10.0% per annum, maturing on March 31, 2027[144]. - The Lynrock Lake Term Loan provided $10.1 million in principal, with $5.4 million net proceeds available for working capital after settling obligations[171]. - The Lynrock Lake Term Loan has an aggregate principal amount of $10,100,000 with an interest rate of 10.0% per annum, maturing on March 31, 2027[173]. - As of March 31, 2025, the outstanding amount of the Lynrock Lake Term Loan was $697, net of the unamortized debt discount of $10,099,303[179]. - The company recorded a loss of $6,640,384 upon issuance of the Lynrock Lake Term Loan, including debt issuance costs of $244,300[179]. - As of March 31, 2025, the outstanding amount of the 2020 Notes was $3,143,725 with accrued interest of $592,887[181]. Operational Insights - The company has delivered fourteen QT Breast Scanners to NXC and its customers as of March 31, 2025[137]. - The company expects to remain cash flow negative for the foreseeable future, although it may achieve positive cash flows in certain quarters[169]. - Net cash used in operating activities for the three months ended March 31, 2025 was $3,536,799, a decrease from $5,975,515 for the same period in 2024[185]. - Net cash provided by financing activities for the three months ended March 31, 2025 was $5,352,198, primarily due to $10,000,000 of net proceeds from the Lynrock Lake Term Loan[187]. Legal and Compliance - The company is subject to occasional lawsuits and claims, but management is not aware of any pending claims that will materially impact financial statements[199]. - The company leases its operating facilities in Novato, California, under a non-cancelable operating lease through May 31, 2027[198]. - The company is classified as an emerging growth company (EGC) under the JOBS Act, allowing it to delay adopting new accounting standards[200]. - The company will remain an EGC until it meets certain revenue or filing criteria, including total annual gross revenue of at least $1.235 billion[203]. - The company has no off-balance sheet arrangements during the periods presented[197]. Strategic Goals - The company plans to create disruptive technological innovations to improve medical imaging quality and access[139]. - The company aims to expand its market by supporting Direct-to-Customer and Direct-to-Patient approaches to lower healthcare costs[139]. - The company has modified the conversion price for its promissory note with Yorkville to $0.584 per share[142]. - The Lynrock Lake Warrant allows for the purchase of 61,000,000 shares at an exercise price of $0.40 per share, exercisable until February 26, 2035[178]. - The company may need to relinquish valuable rights to technologies or revenue streams if it raises funds through collaborations or licensing arrangements[194]. - The company is unable to estimate exact operating capital requirements due to numerous risks and uncertainties associated with manufacturing and commercialization of products[191].
QT Imaging(QTI) - 2025 Q1 - Quarterly Report