Company: QTIWW
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001844505-25-000053
Chunk: 38

Company: QT IMAGING HOLDINGS, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 38
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 prior to the Merger, which conversion occurred concurrent with the Merger (“Private 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 

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Warrants”). The Company determined that the fair value of each Private Warrants approximates the fair value of a Public Warrant. Accordingly, the Private Warrants are valued upon observable data and have been classified as Level 2 financial instruments. As of March 31, 2025 and  December 31, 2024, a total of 889,364 Private Warrants were outstanding at an approximate fair value of $0.010 and $0.025 per warrant, respectively. See Note 10. The activity for the fair value of the warrant liability during the three months ended March 31, 2025 was as follows:Private WarrantsBeginning balance, January 1, 2025$22,234 Change in fair value(13,252)Ending balance, March 31, 2025$8,982 On February 26, 2025, the Company entered into the Credit Agreement that provides the Lynrock Lake Term Loan with Lynrock Lake. In connection with the Lynrock Lake Term Loan, the Company issued to Lynrock Lake, pursuant to the terms of a Warrant to Purchase Common Stock (the “Lynrock Lake Warrant”), a warrant to purchase 61,000,000 shares of common stock at an exercise price of $0.40 per share. The Lynrock Lake Warrant is exercisable until February 26, 2035. Lynrock Lake may cashless exercise the Lynrock Lake Warrant. The Lynrock Lake Warrant is also subject to anti-dilution adjustments to the exercise price and the number of shares which may be purchased upon exercise of the Lynrock Lake Warrant in the event that the Company issues shares of common stock (or derivative securities) at a price that is either less than the $0.40 exercise price or the fair market value of a share of common stock from the immediately prior trading day. The Company determined the fair value of the Lynrock Lake Warrant using the Black-Scholes pricing model.Significant assumptions used in the valuation of the fair value of the Lynrock Lake Warrant as of issuance on February 26,