Company: QTIWW
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001844505-25-000038
Chunk: 237

Company: QT IMAGING HOLDINGS, INC.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7
Chunk 237
---
2024 was primarily due to a loss on debt extinguishment of $383,511 related to the conversion of the Extension Note, and a modification expense of $200,513 related to the decrease in exercise price of our private placement warrants and working capital note warrants. The expense for the year ended December 31, 2023 was primarily due to a debt extinguishment loss of $376,086 related to an amendment and issuance of the senior secured convertible promissory note to US Capital as part of the Bridge Loan (as defined below), and an induced conversion expense of $168,356 related to the conversion of the principal balance and accrued interest of the 2020 Notes into 100,000 shares of QT Imaging common stock during the year ended December 31, 2023.

Change in fair value of warrant liability

Change in fair value of warrant liability was $187,173 for the year ended December 31, 2024. The change in fair value of warrants relates to the liability classified private placement warrants and working capital note warrants and reflects the decrease of the publicly traded price per warrant during the year ended December 31, 2024.

Change in fair value of derivative liability

Change in the fair value of derivative liability was $4,817,600 for the year ended December 31, 2024. The change in fair value of derivatives was primarily driven by the decline in the value of our common stock during the year ended December 31, 2024.

Change in fair value of earnout liability

Change in the fair value of earnout liability was $3,230,000 for the year ended December 31, 2024. The change in fair value of derivatives was primarily driven by the decline in the value of our common stock during the year ended 

108

December 31, 2024. The earnout liability relates to the contingent consideration for the Merger Earnout Consideration Shares pursuant to the Business Combination Agreement dated December 8, 2022, as amended in September of 2023. We did not have an earnout liability for the year ended December 31, 2023.

Interest expense, net

Interest expense, net increased by $3,952,955 to $4,497,781 for the year ended December 31, 2024 from $544,826 for the year ended December 31, 2023. This change is primarily driven by an increase in the amortization of debt discount of $3,568,137 for the Bridge