Company: QTIWW
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001844505-25-000083
Chunk: 34

Company: QT IMAGING HOLDINGS, INC.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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 Under this method of accounting, GigCapital5 was treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of QT Imaging issuing shares of the net assets of GigCapital5, accompanied by a recapitalization. The shares and net loss per common share prior to the Merger have been retroactively restated as shares reflecting the exchange ratio established in the Merger (approximately 0.3427 shares of the Company's common stock for each share of QT Imaging common stock). The net liabilities of GigCapital5 have been recognized at carrying value, with no goodwill or other intangible assets recorded. QT Imaging has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:• QT Imaging's stockholders have a majority of the voting power of the Company;• The majority of QT Imaging's board of directors continued to serve as directors of the Company;• The majority of QT Imaging's management continued to serve as management of the Company;• QT Imaging comprises the ongoing operations of the Company; and• QT Imaging is the larger entity based on historical business activity and the larger employee base.The following summarizes the elements of the Merger to the condensed consolidated statements of stockholders’ deficit and cash flows, including the transaction funding, sources, and uses of cash: RecapitalizationCash in GigCapital5 Trust Account, net of redemptions$13,952,525 Plus: cash in GigCapital5 operating bank account4,829Less: Payments made pursuant to non-redemption agreements(10,791,550)Less: GigCapital5 transaction costs paid from Trust(1,073,667)Less: Repayment of GigCapital5 related party notes(853,607)Net cash proceeds from GigCapital51,238,530Assumed net liabilities from GigCapital5, including the initial recognition of the earnout liability, excluding net cash proceeds(14,177,695)Net impact of the Merger on the condensed consolidated statement of stockholders' deficit$(12,939,165)

3.       Fair Value Measurements

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and