Company: QTIWW
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001844505-25-000053
Chunk: 61

Company: QT IMAGING HOLDINGS, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 61
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,034 $100,716 $38,984 No stock-based compensation expense was capitalized to inventory for three months ended March 31, 2025 and 2024.As of March 31, 2025, the total unrecognized compensation cost related to all nonvested stock options was $577,952 and the weighted-average period over which it is expected to be recognized is 1.7 years.

12.    Income Taxes

For the interim periods, the Company estimates its annual effective income tax rate and applies the estimated rate to the year-to-date income or loss before taxes. The Company also computes the tax provision or benefit related to items reported separately and recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur. The Company’s effective tax rate is 0% for the three months ended March 31, 2025 and 2024. The Company expects that its effective tax rate for the full year 2024 will be 0%.

13.    Related Party Transactions

Convertible Notes PayableIn July 2020, the Company issued three convertible notes to three of its stockholders for advances up to $3,500,000 in principal (the “2020 Notes”) and bearing annual interest of 5% on any amounts drawn. An additional note was issued in March 2022 as part of the 2020 Notes, but with an annual interest rate of 8%. All principal and interest payments are due on or before July 1, 2025. The 2020 Notes are convertible, at the holder’s option, into shares of common stock of the Company at the lower of $14.59 per share or the offering price in a financing of at least $5,000,000 in equity from unaffiliated parties. As of March 31, 2025, an aggregate of 256,109 shares of common stock would be issued if the entire principal and interest under the 2020 Notes was converted. Management assessed whether the embedded features in the 2020 Notes should have been bifurcated from the debt host and concluded that none of the features were required to be accounted for separately from the debt instruments. In connection with the issuance of the Lynrock Lake Term Loan, on February 26, 2025, the maturity date on these convertible notes payable was extended to October 21, 2027.

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As of March 31, 2025 and December 31, 2024,