Company: QTIWW
Filing Date: 2025-01-16
Form Type: S-1
Source: 0001628280-25-001723
Chunk: 378

Company: QT IMAGING HOLDINGS, INC.
Filing Date: 2025-01-16
Form: S-1
Chunk 378
---
 align='center'>(Unaudited)</div>

prior to the Merger, which conversion occurred concurrent with the Merger (“Working Capital Note Warrants”) are subject to treatment as a liability, as the transfer of the warrants to anyone other than the purchasers or their permitted transferees would result in these warrants having substantially the same terms as the warrants included in the public units that were issued by GigCapital5 prior to the Merger (“Public Warrants”). The Company determined that the fair value of each Private Placement Warrant and the Working Capital Note Warrants approximates the fair value of a Public Warrant. Accordingly, the Private Placement Warrants and Working Capital Note Warrants are valued upon observable data and have been classified as Level 2 financial instruments. As of September 30, 2024 , a total of 889,364 Private Placement Warrants and Working Capital Note Warrants were outstanding at an approximate fair value of $ 0.011 per warrant. See Note 11.

The activity for the fair value of the warrant liability during the three and nine months ended September 30, 2024 was as follows:

| Beginning balance, January 1, 2024       |     | Warrant Liability |        — |
|:-----------------------------------------|:----|:------------------|---------:|
| Net liabilities assumed from GigCapital5 |     |                   |    8,894 |
| Change in fair value                     |     |                   |   23,123 |
| Ending balance, March 31, 2024           |     |                   |   32,017 |
| Increase due to warrant modification     |     |                   |  200,513 |
| Change in fair value                     |     |                   | -213,942 |
| Ending balance, June 30, 2024            |     |                   |   18,588 |
| Change in fair value                     |     |                   |   -8,805 |
| Ending balance, September 30, 2024       |     | $                 |    9,783 |

The effect of the modification of the Private Placement Warrants and the Working Capital Note Warrants as further described in Note 11 was included within other income (expense), net in the condensed consolidated statements of operations and comprehensive loss during the nine months ended September 30, 2024.

Earnout Liability

The fair value of the Merger Consideration Earnout shares was calculated using a Monte Carlo simulation. The simulation used as significant inputs the Company