Company: QTIWW
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001844505-25-000038
Chunk: 76

Company: QT IMAGING HOLDINGS, INC.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 76
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 of our assets; and 

•sell certain assets.

Our loan agreement with Lynrock Lake also contains two financial covenants. These financial covenants are (i) a minimum qualified cash covenant of $500,000, and (ii) a minimum shipments and associated revenue and accounts receivable covenant for each quarter with amounts of at least 80% of the forecasted amount in the Company’s previously announced distribution agreement. The Company is also required within twelve (12) months of the entry into the Credit Agreement (unless such time period is extended by Lynrock Lake in its reasonable discretion) to create, or cause to be created, a holding company structure reasonably satisfactory to Lynrock Lake.

Any of these restrictions could limit our ability to plan for or react to market conditions and could otherwise restrict corporate activities. Any failure to comply with these covenants could result in a default under our secured credit facility or instruments governing any future indebtedness of ours. Additionally, our obligations to Lynrock Lake are secured by substantially all of our assets. Upon a default, unless waived, Lynrock Lake could elect to foreclose on our assets pledged to it to secure our obligations under our credit agreement and force us into bankruptcy or liquidation. In addition, a default under our secured loan could trigger a cross default under agreements governing any future indebtedness. Our results of operations may not be sufficient to service our indebtedness and to fund our other expenditures, and we may not be able to obtain financing to meet these requirements. If we experience a default under our loan agreement with Lynrock Lake or instruments governing our future indebtedness, our business, financial condition, and results of operations may be adversely impacted. 

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We are highly dependent on the successful development, marketing and sale of our breast imaging device and on other products and product candidates which are still in the development stage. 

Our breast imaging technology is the basis of our business. The QT Breast Scanner is currently deployed in a limited number of cancer and other health centers, and is undergoing field testing and broad acceptance is uncertain. As a result, the success of our business plan is highly dependent on acceptance of our products, and on our ability to develop, manufacture and commercialize the technology and related products and services and our failure to do so could cause our business to fail. As part of our effort to build the sales and marketing capabilities of the Company, on May 31, 2023, QT Imaging entered into the NXC Sales Agent Agreement, pursuant to which QT Imaging appointed NXC as the non