QT Imaging(QTI) - 2025 Q2 - Quarterly Results

Executive Summary & Company Highlights QT Imaging reported strong Q2 2025 performance, record revenue, strategic evolution into an imaging platform, and is pursuing Nasdaq uplisting Q2 2025 Performance Overview QT Imaging reported strong business momentum in Q2 2025, achieving record revenue of $3.7 million with a 50% gross margin. The company is actively pursuing an uplisting to Nasdaq and has addressed warrant liabilities - QT Imaging achieved strong business momentum in Q2 2025, reporting record revenue of $3.7 million and a 50% gross margin[1] - The Company is pursuing uplisting to Nasdaq and has addressed and removed warrant liability through amendments to warrant agreements[1] Strategic Business Evolution QT Imaging is evolving from a scanner company into a scalable imaging platform, integrating proprietary hardware, advanced image reconstruction software, and AI-powered clinical decision tools to enhance breast health precision. This transformation includes the launch of the 'QTI Cloud Platform' - QT Imaging is rapidly evolving from a scanner company into a scalable imaging platform, combining proprietary hardware, advanced image reconstruction software, and AI-powered clinical decision tools[2] - The company aims to drive greater user adoption of its scanner technology and commercialize new AI-enhanced diagnostic tools for earlier detection and improved outcomes[2] - Eight QT Imaging Breast Acoustic CT™ scanners were shipped in Q2 2025, with two more in July, building a foundation for broader adoption[2] Nasdaq Uplisting Initiative To comply with Nasdaq's minimum share price requirement for uplisting, QT Imaging is seeking stockholder support for a reverse stock split, with the Annual Meeting scheduled for August 19 - A reverse stock split is intended to comply with the minimum share price requirement for uplisting to Nasdaq[3] - Stockholders are requested to vote ahead of the Annual Meeting on August 19 to support this pivotal step[3] Second Quarter and Recent Business Developments QT Imaging achieved operational milestones, enhanced product technology, launched strategic initiatives like the QTI Cloud Platform, and strengthened its financial position in Q2 2025 Operational Achievements QT Imaging shipped eight Breast Acoustic CT™ scanners in Q2 2025, contributing to record revenue, and expanded its market presence by making its technology available to patients in Iowa for the first time - Eight QT Imaging Breast Acoustic CT™ scanners were shipped in Q2 2025, generating record revenue[6] - The Company's radiation-free, 3D breast imaging technology was made available to patients in Iowa for the first time with a scanner installation at Innovative Radiology[10] Product & Technology Enhancements QT Imaging released software update version 4.4.0, significantly reducing image processing time by leveraging NVIDIA's L40 GPU, and launched QTviewer™ version 2.8 with new features to enhance clinical efficiency and diagnostic accuracy - QTI's latest image reconstruction software update, version 4.4.0, substantially reduces QTscan™ image processing time, improving user throughput and efficiency, developed leveraging NVIDIA's L40 GPU[10] - The latest QTviewer™, version 2.8, was launched, providing new features designed to enhance clinical efficiency and diagnostic accuracy[10] Strategic Initiatives The company publicly unveiled its QTI Cloud Platform, a strategic initiative designed to transform breast health through imaging intelligence via a tiered Software as a Service (SaaS) model, expected to provide a new source of recurring revenues. Additionally, medical and clinical leadership was bolstered with key appointments - The QTI Cloud Platform was publicly unveiled, designed to transform breast health through imaging intelligence using a tiered Software as a Service (SaaS) delivery model[10] - Subscription fees from the QTI Cloud Platform are expected to provide a meaningful new source of recurring revenues[10] - Medical and clinical leadership was bolstered with the appointments of Elaine Iuanow, MD, as Chief Medical Officer and Kim Du as Senior Director of Clinical Operations[10] Financial Strengthening QT Imaging strengthened its financial position by securing $700,000 in net proceeds from two Private Investment in Public Entity (PIPE) investments, with significant contributions from Board members and Mr. Leon Recanati - Financial position strengthened via $700,000 in net proceeds from two Private Investment in Public Entity (PIPE) investments[6] - $500,000 of the PIPE investments were fully funded by QT Imaging Board members, and $200,000 by Mr. Leon Recanati, Vice Chairman of the Israel Cancer Association[6][7] Summary of Second Quarter 2025 Financial Results QT Imaging reported Q2 2025 revenue of $3.7 million with a 50% gross margin, improved Adjusted EBITDA, but a net loss impacted by warrant liability changes Revenue and Gross Margin QT Imaging reported Q2 2025 revenue of $3.7 million, marking significant year-over-year and sequential growth, primarily driven by increased scanner shipments. Gross margin remained strong at 50%, with a slight decline attributed to inventory cost variability Q2 2025 Revenue and Growth | Metric | Q2 2025 | YoY Growth | QoQ Growth | | :----- | :------ | :--------- | :--------- | | Revenue | $3.7M | 113% | 31% | - The year-over-year increase in revenue was primarily attributable to the shipment of eight QT Breast Acoustic CT™ scanners in Q2 2025, compared to four in Q2 2024[10] Q2 Gross Margin | Metric | Q2 2025 | Q2 2024 | | :---------- | :------ | :------ | | Gross Margin | 50% | 51% | - The slight decline in gross margin was primarily attributable to variability in the weighted average cost related to the Company's existing inventory during the quarter[10] Operating Expenses and Net Loss Total operating expenses for Q2 2025 improved by 7% year-over-year. However, the company reported a net loss of $4.0 million, significantly impacted by a $2.8 million change in the fair value of warrant liability and interest expenses Q2 Operating Expenses and Net Loss | Metric | Q2 2025 | Q2 2024 | Change | | :------------------- | :------------- | :------------- | :----- | | Total Operating Expenses | $2.9 million | $3.1 million | -7% | | Net Loss | $(4.0) million | $(1.2) million | | - The net loss for Q2 2025 includes a $2.8 million change in the fair value of warrant liability, a $0.2 million change in the fair value of earnout liability, and interest expenses of $0.4 million[10][11] Non-GAAP Adjusted EBITDA & Cash Position QT Imaging's Non-GAAP Adjusted EBITDA improved significantly to $(0.8) million in Q2 2025 from $(2.1) million in Q2 2024. The company's cash balance increased to $4.3 million as of August 6, 2025, following collections for scanner shipments Q2 Non-GAAP Adjusted EBITDA | Metric | Q2 2025 | Q2 2024 | | :----------------- | :------------- | :------------- | | Non-GAAP Adjusted EBITDA | $(0.8) million | $(2.1) million | Cash Position | Date | Cash Balance | | :------------- | :----------- | | June 30, 2025 | $2.0 million | | August 6, 2025 | $4.3 million | - Net cash used in operating activities during Q2 2025 was $1.5 million, compared to $1.0 million in Q2 2024[14] Amendments to Warrant Agreements QT Imaging amended warrant agreements with Lynrock Lake and Yorkville on June 11, 2025, revising treatment upon acquisition and resulting in equity-classified warrants Lynrock Lake Warrant Amendment On June 11, 2025, QT Imaging and Lynrock Lake amended their warrant agreement to revise the treatment of warrants upon an acquisition, ensuring the holder receives equivalent consideration in certain acquisition scenarios. This amendment resulted in equity-classified warrants for accounting purposes - The Lynrock Lake Warrant was amended on June 11, 2025, to revise the treatment of warrants upon an Acquisition, ensuring the holder receives equivalent consideration in Cash/Public Acquisition scenarios[14] - The Amended Lynrock Lake Warrant is exercisable until February 26, 2035, and resulted in equity-classified warrants for accounting purposes[14] Yorkville Warrant Amendment Also on June 11, 2025, the Yorkville Warrant was amended to revise its treatment upon an acquisition and to provide the holder with demand registration rights. Similar to the Lynrock Lake amendment, this also resulted in equity-classified warrants - The Yorkville Warrant was amended on June 11, 2025, to revise the treatment of warrants upon an Acquisition and to provide the holder with demand registration rights[14][15] - The Amended Yorkville Warrant is exercisable until February 26, 2030, and resulted in equity-classified warrants for accounting purposes[15] Financial Outlook QT Imaging reiterates its 2025 and 2026 revenue projections of $18 million and $27 million, respectively, based on committed orders and distribution agreements 2025-2026 Revenue Projections QT Imaging reiterates its revenue projections, targeting $18 million in 2025 and $27 million in 2026, based on committed orders and minimum order quantities under its distribution agreement with NXC Imaging, Inc Revenue Projections | Year | Projected Revenue | Projected Scanner Shipments | | :--- | :---------------- | :-------------------------- | | 2025 | $18 million | 40 scanners | | 2026 | $27 million | 60 scanners | - These targets are in accordance with committed orders and minimum order quantities per the Amended Distribution Agreement with NXC Imaging, Inc., a wholly owned subsidiary of Canon Medical Systems USA[16] Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including statements of operations, EBITDA reconciliation, balance sheets, and cash flows for relevant periods Statements of Operations The unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 are presented below, detailing revenue, cost of revenue, operating expenses, and net loss Summary of Results for the Three and Six Months Ended June 30, 2025 and 2024 | | Three Months Ended | | Six Months Ended | | | --- | --- | --- | --- | --- | | | June 30, | | June 30, | | | $ thousands (except share and per share amounts) | 2025 | 2024 | 2025 | 2024 | | Revenue | $ 3,659 $ | 1,714 $ | 6,458 $ | 3,076 | | Cost of revenue | 1,832 | 839 | 2,819 | 1,442 | | Gross profit | 1,827 | 875 | 3,639 | 1,634 | | Operating expenses: | | | | | | Research and development | 901 | 925 | 1,753 | 1,567 | | Selling, general and administrative | 1,969 | 2,170 | 3,971 | 7,866 | | Loss from operations | (1,043) | (2,220) | (2,085) | (7,799) | | Interest expense, net | (379) | (1,095) | (1,070) | (1,694) | | Other income (expense), net | 9 | (187) | (8,740) | (208) | | Change in fair value of warrant liability | (2,796) | 214 | (3,501) | 191 | | Change in fair value of derivative liability | — | 1,729 | 101 | 4,713 | | Change in fair value of earnout liability | 210 | 310 | 160 | 2,920 | | Loss before income tax expense | (3,999) | (1,249) $ | (15,135) $ | (1,877) | | Income tax expense | 3 | — | 3 | — | | Net loss | (4,002) | (1,249) $ | (15,138) $ | (1,877) | | Less: deemed dividend related to the modification of equity | | | | | | classified warrants | — | (5,186) | — | (5,186) | | Net loss attributable to common stockholders | $ (4,002) $ | (6,435) $ | (15,138) $ | (7,063) | | Basic and diluted net loss per share | $ (0.14) $ | (0.30) $ | (0.54) $ | (0.41) | | Weighted average shares outstanding | 28,352,574 | 21,440,447 | 27,936,371 | 17,333,000 | EBITDA and Adjusted EBITDA Reconciliation The unaudited reconciliation of Net Loss to EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024 is provided, along with explanatory notes for the adjustments EBITDA and Adjusted EBITDA for the Three and Six Months Ended June 30, 2025 and 2024 | | Three Months Ended | | Six Months Ended | | | --- | --- | --- | --- | --- | | | June 30, | | June 30, | | | $ thousands | 2025 | 2024 | 2025 | 2024 | | Net loss | $ (4,002) $ | (1,249) $ | (15,138) $ | (1,877) | | Interest expense, net | 379 | 1,095 | 1,070 | 1,694 | | Income tax expense | 3 | — | 3 | — | | Depreciation and amortization | 38 | 86 | 76 | 185 | | EBITDA | (3,582) | (68) | (13,989) | 2 | | Adjustments: | | | | | | Stock-based compensation | 219 | — | 320 | 39 | | Warrant modification | — | 201 | — | 201 | | Debt modification and extinguishment expenses | (1) — | — | 2,124 | — | | (2) Change in fair value of warrants | 2,796 | (214) | 3,501 | (191) | | (3) Change in fair value of derivatives | — | (1,729) | (101) | (4,713) | | (4) Change in fair value of earnout liability | (210) | (310) | (160) | (2,920) | | (5) Transaction expenses | — | — | — | 4,301 | | (6) Debt issuance expense | — | — | 6,640 | — | | Adjusted EBITDA | $ (777) $ | (2,120) $ | (1,665) $ | (3,281) | - Notes provide details on debt modification/extinguishment expense, change in fair value of warrant liability (driven by stock price increase), decrease in fair value of derivative liability, earnout liability valuation, transaction expenses, and loss on issuance of Lynrock Lake Term Loan[23] Balance Sheets The unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, are presented, showing assets, liabilities, and stockholders' deficit Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 | | | June 30, | | December 31, | | --- | --- | --- | --- | --- | | $ in thousands | | 2025 | | 2024 | | Assets | | | | | | Current assets: | | | | | | Cash | $ | 2,022 | $ | 1,172 | | Restricted cash and cash equivalents | | 20 | | 20 | | Accounts receivable, net | | 3,651 | | 67 | | Inventory | | 3,231 | | 3,141 | | Prepaid expenses and other current assets | | 1,744 | | 517 | | Total current assets | | 10,668 | | 4,917 | | Non-current assets: | | | | | | Property and equipment, net | | 167 | | 196 | | Operating lease right-of-use assets | | 758 | | 935 | | Other assets | | 39 | | 39 | | Total assets | $ | 11,632 | $ | 6,087 | | Liabilities and Stockholders' Deficit | | | | | | Current liabilities: | | | | | | Accounts payable | $ | 1,596 | $ | 803 | | Accrued expenses and other current liabilities | | 4,211 | | 3,550 | | Current maturities of long-term debt | | 37 | | 4,986 | | Deferred revenue | | 34 | | 49 | | Operating lease liabilities, current | | 429 | | 406 | | Total current liabilities | | 6,307 | | 9,794 | | Non-current liabilities: | | | | | | Long-term debt | | 72 | | 9 | | Related party notes payable | | 3,849 | | 3,849 | | Operating lease liabilities | | 437 | | 657 | | Warrant liability | | 26 | | 22 | | Derivative liability | | — | | 304 | | Earnout liability | | 280 | | 440 | | Other liabilities | | 986 | | 550 | | Total liabilities | | 11,957 | | 15,625 | | Stockholders' deficit: | | | | | | Common stock | | 3 | | 3 | | Additional paid-in capital | | 46,751 | | 22,400 | | Accumulated deficit | | (47,079) | | (31,941) | | Total stockholders' deficit | | (325) | | (9,538) | | Total liabilities and stockholders' deficit | $ | 11,632 | $ | 6,087 | Statements of Cash Flows The unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024, detail cash flows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 | | | | Six Months Ended June 30, | | | --- | --- | --- | --- | --- | | $ in thousands | | 2025 | | 2024 | | Cash flows from operating activities: | | | | | | Net loss | $ | (15,138) | $ | (1,877) | | Adjustment to reconcile net loss to net cash used in operating activities: | | | | | | Depreciation and amortization | | 76 | | 185 | | Stock-based compensation | | 320 | | 39 | | Warrant modification expense | | — | | 201 | | Loss on issuance of the Lynrock Lake Term Loan | | 6,640 | | — | | Debt extinguishment loss | | 2,034 | | — | | Debt modification expense | | 90 | | — | | Provision for credit losses | | — | | 1 | | Fair value of common stock issued in exchange for services and in connection with non-redemption agreements | | — | | 3,718 | | Loss on issuance of common stock in connection with a subscription agreement | | — | | 206 | | Non-cash interest | | 548 | | 1,201 | | Non-cash operating lease income | | (19) | | (12) | | Change in fair value of warrant liability | | 3,501 | | (191) | | Change in fair value of derivative liability | | (101) | | (4,713) | | Change in fair value of earnout liability | | (160) | | (2,920) | | Changes in operating assets and liabilities: | | | | | | Accounts receivable | | (3,584) | | (669) | | Inventory | | (90) | | 1,353 | | Prepaid expenses and other current assets | | (1,227) | | (554) | | Accounts payable | | 772 | | (2,281) | | Accrued expenses and other current liabilities | | 939 | | 52 | | Deferred revenue | | (15) | | (316) | | Other liabilities | | 435 | | (378) | | Net cash used in operating activities | | (4,979) | | (6,955) | | Cash flows from investing activities: | | | | | | Purchases of property and equipment | | (47) | | (27) | | Net cash used in investing activities | | (47) | | (27) | | Cash flows from financing activities: | | | | | | Proceeds from sale of common stock and warrants | | 700 | | — | | Proceeds from issuance of common stock pursuant to subscription agreement, net of issuance costs | | — | | 500 | | Proceeds from long-term debt, net of issuance costs | | 10,000 | | 10,525 | | Repayment of long-term debt | | (4,674) | | (65) | | Repayment of bridge loans | | — | | (800) | | Payment of deferred issuance costs | | (150) | | — | | Proceeds from the Merger, net of transaction costs | | — | | 1,238 | | Net cash provided by financing activities | | 5,876 | | 11,398 | | Net increase in cash and restricted cash and cash equivalents | | 850 | | 4,416 | | Cash and restricted cash and cash equivalents at the beginning of period | | 1,192 | | 185 | | Cash and restricted cash and cash equivalents at the end of the period | $ | 2,042 | $ | 4,601 | Legal & Regulatory Disclosures This section provides disclosures on forward-looking statements, information for stockholders regarding the Annual Meeting, and explanations of non-GAAP financial measures Forward-Looking Statements This section contains forward-looking statements regarding QT Imaging's future plans, products, and financial performance, which are subject to various risks and uncertainties. Actual results may differ materially from these statements, and the company disclaims any obligation to update them - The press release contains forward-looking statements about the QT Imaging Breast Acoustic CT™ Scanner, its commercialization, the evolution into a scalable imaging platform, the QTI Cloud Platform, and projected revenues[27] - These statements involve risks and uncertainties, and actual results may differ materially due to factors such as the ability to sell and deploy scanners, extend product offerings, commercialize technology, and changes in market conditions[27] - QT Imaging disclaims any obligation to update these forward-looking statements, and undue reliance should not be placed upon them[28] Additional Information & Solicitation Participants Stockholders are urged to review the proxy statement and other SEC filings for important information regarding the Annual Meeting. Information about the company's directors and executive officers, who may be deemed participants in the proxy solicitation, is also available - Stockholders are urged to read the proxy statement and other SEC filings for important information about the matters to be addressed at the Annual Meeting[29] - Information about the Company's directors and executive officers, who may be deemed participants in the solicitation of proxies, is set forth in the definitive proxy statement filed with the SEC[30] Non-GAAP Financial Measures Explanation This section clarifies the use of non-GAAP financial measures like EBITDA and Adjusted EBITDA, emphasizing they are supplemental to GAAP measures and should not be considered in isolation. It defines these measures and explains management's rationale for their use, while also highlighting their inherent limitations - Non-GAAP financial measures (EBITDA, Adjusted EBITDA) are presented to supplement GAAP financial statements and should not be considered in isolation or as a substitute for GAAP measures[31][32] - EBITDA is defined as loss before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA further adjusts for stock-based compensation, changes in fair value of liabilities, transaction expenses, and debt-related expenses[35] - Management uses these non-GAAP measures to provide useful supplemental information, enable period-over-period comparisons, and offer greater transparency, despite their inherent limitations and potential differences from other companies' calculations[34][35][36] About QT Imaging QT Imaging Holdings, Inc. is a medical device company focused on developing and commercializing innovative body imaging systems using low-frequency sound waves Company Overview QT Imaging Holdings, Inc. is a medical device company focused on research, development, and commercialization of innovative body imaging systems using low-frequency sound waves. Its mission is to improve global health outcomes by providing safe, affordable, accessible, and patient-centered medical imaging - QT Imaging Holdings, Inc. is a medical device company engaged in research, development, and commercialization of innovative body imaging systems using low frequency sound waves[39] - The company's strategy is to improve global health outcomes by making medical imaging safe, affordable, accessible, and patient-centered[39]