Financial Performance - The company has incurred a net loss of $15,137,515 and an accumulated deficit of $47,078,042 as of June 30, 2025[154]. - Revenue for the three months ended June 30, 2025, increased by $1,945,379 to $3,659,414, a 113% increase compared to $1,714,035 for the same period in 2024, primarily due to the sale of eight QT Breast Scanners[172]. - Cost of revenue for the same period increased by $992,853 to $1,832,337, an 118% increase from $839,484 in 2024, attributed to the higher sales volume of QT Breast Scanners[174]. - Gross profit for the three months ended June 30, 2025, was $1,827,077, reflecting a 109% increase from $874,551 in 2024[172]. - Net loss for the three months ended June 30, 2025, was $4,001,515, a 220% increase compared to a net loss of $1,248,874 in 2024[172]. - For the six months ended June 30, 2025, revenue increased by $3,381,631 to $6,457,829, a 110% increase from $3,076,198 in 2024[182]. - Cost of revenue rose by $1,377,323 to $2,818,890 for the six months ended June 30, 2025, from $1,441,567 in the prior year, reflecting the increased sales of QT Breast Scanners[184]. - Other expense, net increased by $8,531,630 to $8,739,955 for the six months ended June 30, 2025, primarily due to extinguishment losses and non-cash expenses related to the Lynrock Lake Term Loan[187]. Expenses - Research and development expenses decreased by $24,388 to $900,694 for the three months ended June 30, 2025, a 3% decrease from $925,082 in 2024[175]. - Selling, general and administrative expenses decreased by $200,179 to $1,969,362 for the three months ended June 30, 2025, a 9% decrease from $2,169,541 in 2024[176]. - Research and development expenses increased by $185,318 to $1,752,946 for the six months ended June 30, 2025, primarily due to employee compensation costs[185]. - Selling, general and administrative expenses decreased by $3,895,049 to $3,970,703 for the six months ended June 30, 2025, mainly due to reduced professional services costs[186]. - Interest expense, net decreased by $623,720 to $1,070,289 for the six months ended June 30, 2025, driven by lower interest expenses on various notes[191]. Funding and Capital Requirements - The company continues to incur losses and will need to raise additional capital to achieve profitability[154]. - The company expects cash inflows of up to $18.0 million in 2025 and $27.0 million in 2026 from the Amended Distribution Agreement with NXC[194]. - The company plans to raise additional capital through equity issuance, borrowings, and potential strategic alliances[216]. - Future funding requirements will depend on various factors, including the ability to repay debt obligations, expand manufacturing operations, and seek regulatory clearances for product candidates[217]. - If additional funds are not raised when needed, the company may be required to delay or eliminate product development efforts[221]. Product Development and Regulatory Matters - The company plans to create disruptive technological innovations to improve medical imaging quality and access[153]. - The company expects to incur significant expenses related to research and development, regulatory clearances for the QT Breast Scanner, and building a U.S. sales and marketing team[215]. - The QT Breast Scanner is a Class II device that received FDA clearance as substantially equivalent to a predicate device on June 6, 2017[150]. 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[151]. - The Canon Manufacturing Agreement with Canon Medical Systems, Inc. appoints CMSC as the exclusive manufacturer of QT Breast Scanners until December 31, 2026[152]. Cash Flow and Operating Activities - Net cash used in operating activities for the six months ended June 30, 2025, was $4,978,822, a decrease of approximately 29% compared to $6,955,081 for the same period in 2024[208][209]. - Net cash provided by financing activities for the six months ended June 30, 2025, was $5,875,716, primarily due to $10,000,000 of net proceeds from the issuance of long-term debt related to the Lynrock Lake Term Loan[212]. - Net cash used in investing activities was $46,818 for the six months ended June 30, 2025, compared to $26,977 for the same period in 2024, primarily related to the purchase of property and equipment[211]. Litigation and Compliance - The company is subject to ongoing litigation, but management is not aware of any pending claims that will have a material impact on financial statements[225]. - The company remains an emerging growth company under the JOBS Act, allowing it to delay adopting new accounting standards[226]. Debt Obligations - A senior secured term loan of $10,100,000 was secured with an interest rate of 10.0% per annum, maturing on March 31, 2027[158]. - The Lynrock Lake Term Loan was established for $10.1 million at a 10% annual interest rate, maturing on March 31, 2027[197]. - The outstanding amount of the 2020 Notes was $3,143,725 as of June 30, 2025, with accrued interest of $635,815[205]. - The total principal amount outstanding under the Working Capital Note as of December 31, 2023, is $705,000, which was issued to provide additional working capital prior to the Business Combination Agreement with GigCapital5[206].
GigCapital5(GIA) - 2025 Q2 - Quarterly Report