Financial Performance - The company has incurred a net loss of $19,694,921 and an accumulated deficit of $51,635,448 as of September 30, 2025[169]. - Revenue increased by $3,236,131 to $4,192,101 for the three months ended September 30, 2025, compared to $955,970 for the same period in 2024, primarily due to the sale of nine QT Breast Scanners in Q3 2025 versus two in Q3 2024[194]. - The net loss for the three months ended September 30, 2025, was $4,557,406, a 26% increase from the net loss of $3,619,494 in Q3 2024[193]. - Revenue increased by $6,617,762 to $10,649,930 for the nine months ended September 30, 2025, representing a 164% increase compared to the same period in 2024[205]. - The company recorded a net loss of $19,694,921 for the nine months ended September 30, 2025, adjusted for various non-cash expenses[235]. - For the nine months ended September 30, 2024, the company reported a net loss of $5,496,958, with significant non-cash expenses including $3,718,349 related to common stock issued for services[237]. Expenses and Costs - Cost of revenue rose to $2,389,428 in Q3 2025 from $350,667 in Q3 2024, reflecting an increase of 581%[193]. - Gross profit for the three months ended September 30, 2025, was $1,802,673, up 198% from $605,303 in the same period of 2024[193]. - Selling, general and administrative expenses rose by 25% to $2,515,994 in Q3 2025, compared to $2,007,277 in Q3 2024[193]. - Total operating expenses increased by 18% to $3,454,752 in Q3 2025 from $2,932,491 in Q3 2024[193]. - Cost of revenue increased by $3,416,084 to $5,208,318 for the nine months ended September 30, 2025, a 191% increase from the prior year[206]. - Gross profit for the nine months ended September 30, 2025, was $5,441,612, up 143% from $2,239,934 in 2024[204]. - Selling, general and administrative expenses decreased by $3,386,332 to $6,486,697 for the nine months ended September 30, 2025, a 34% reduction compared to the previous year[208]. - Interest expense, net decreased by $1,514,301 to $1,635,014 for the nine months ended September 30, 2025, a 48% decrease from $3,149,315 in 2024[213]. - The change in 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[212]. Funding and Capital - The company continues to incur losses and will need to raise additional capital to achieve profitability[169]. - 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[216]. - The Gulf Medical Distribution Agreement with GMC could result in cash inflows of $11.2 million to $12.3 million in 2026 if Minimum Purchase Requirements are met[217]. - The company anticipates that cash received from various private placements will be sufficient to fund its operating plan for at least the next 12 months[220]. - The company plans to raise additional capital through equity issuance, borrowings, and strategic alliances, which may dilute existing stockholder interests[243]. - Future funding needs will depend on various factors, including debt repayment, manufacturing expansion, and regulatory progress[242]. - The company entered into a credit agreement for a senior secured term loan of $10,100,000 at an interest rate of 10.0% per annum, maturing on March 31, 2027[174]. - The company raised $18,180,655 from the October 2025 Private Placement, issuing 2,232,243 shares of common stock at a price of $4.50 per share[219]. - The Lynrock Amended Credit Agreement increased the aggregate principal amount of the Lynrock Lake Term Loan to $15.1 million[229]. Agreements and Partnerships - The company received nearly $18 million in financial support from the U.S. National Institutes of Health for the development of its body imaging technology[161]. - The company entered into a Distribution Agreement with Gulf Medical Co. for exclusive rights to market QT Breast Scanners in Saudi Arabia for an initial term of three years[168]. - The NXC Distribution Agreement allows NXC to market and resell QT Breast Scanners in the U.S. and U.S. territories[165]. - The Canon Manufacturing Agreement with Canon Medical Systems, Inc. appoints CMSC as the exclusive manufacturer of QT Breast Scanners through December 31, 2026[166]. Operational Insights - The company has delivered 23 QT Breast Scanners to NXC and its customers as of September 30, 2025[165]. - The company expects to incur additional recurring administrative expenses associated with being a publicly traded company[170]. - The company aims to create disruptive technological innovations to improve medical imaging and healthcare quality[167]. - The company is subject to risks associated with manufacturing and commercialization, which could significantly increase operating capital requirements[243]. - The company has no off-balance sheet arrangements and leases its operating facilities under a non-cancelable lease through May 31, 2027[248][249]. - The company is classified as an emerging growth company, allowing it to delay adopting new accounting standards until certain conditions are met[251]. Stock and Debt Management - The company has modified the conversion price for a $10 million promissory note with Yorkville to $1.752 per share for part of the outstanding balance[171]. - A reverse stock split at a ratio of 3:1 was approved, effective October 23, 2025, with shares trading on a reverse split-adjusted basis starting October 24, 2025[181]. - The company issued warrants to purchase 20,333,623 shares of common stock at an exercise price of $1.20 per share in connection with the Lynrock Lake Term Loan[174]. - As of September 30, 2025, the outstanding amount of the Lynrock Lake Term Loan was $5,272,879, net of unamortized debt discount of $9,827,121, and accrued interest of $670,193[228]. - As of September 30, 2025, the outstanding amount of the 2020 Notes was $3,190,112, with accrued interest of $679,215[232]. - The company repaid the Tranche B loan of $5.0 million on October 6, 2025, plus accrued interest and a 6% premium[230].
QT Imaging(QTI) - 2025 Q3 - Quarterly Report