Company: QTIWW
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001628280-25-051332
Chunk: 43

Company: QT IMAGING HOLDINGS, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 43
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, 2025Fair value of common stock$1.20 $1.50 Exercise price$1.20 $1.20 Expected warrant term (years) 10.0 9.7 Expected volatility51.6 %39.2 %Risk-free rate of return4.3 %4.4 %Expected annual dividend yield— %— %The activity for the fair value of the Lynrock Lake Warrant during the three and nine months ended September 30, 2025 were as follows:Lynrock Lake WarrantBeginning balance, January 1, 2025$— Fair value at issuance16,496,084Change in fair value606,186 Ending balance, March 31, 202517,102,270 Change in fair value2,294,669 Reclassification of warrant liability upon warrant modification(19,396,939)Ending balance, June 30, 2025 and September 30, 2025$— On February 26, 2025, the Company issued to Yorkville a warrant to purchase 5,000,071 shares of common stock at an exercise price of $1.20 per share pursuant to the “Yorkville Warrant to fully settle and discharge the Company’s obligations under the Yorkville Note and extinguish the Yorkville Note as having been fully performed. The Yorkville Warrant is exercisable until February 26, 2030. Yorkville may cashless exercise the Yorkville Warrant. The Yorkville Warrant is also subject to adjustments in the event that the Company’s common stock undergoes a split, reverse-split or similar event. Furthermore, the Yorkville Warrant has provided the holder with piggyback registration rights. On June 11, 2025, the Yorkville Warrant was amended to update the provisions that would trigger cash settlement such that, when such events occur, the holders of the warrants receive the same form of consideration as the underlying stockholders. According to ASC 815-40, Derivatives and Hedging: Contracts in an Entities Own Equity, equity classification is permitted for an instrument that requires net-cash settlement if the holders of the contract’s underlying shares receive the same form of consideration in transactions outside the company’s control. Consequently, upon modification, the warrants were revalued and then reclassified to additional paid-in capital on the condensed consolidated balance sheets. The Company determined the fair value of the Yorkville Warrant using the Black