QT IMAGING HOLDINGS INC

Introduction

We are a Delaware corporation formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, recapitalization or other similar business combination with one or more businesses, which we refer to throughout this Annual Report as our initial business combination. On December 8, 2022, the Company entered into a business combination agreement with QT Imaging, Inc., a Delaware corporation (“QT Imaging”), a medical device company engaged in the research, development and commercialization of innovative body imaging systems using low energy sound, for the Company’s initial business combination. Upon consummation of the business combination with QT Imaging, on March 4, 2024, we changed our legal name to QT Imaging Holdings, Inc.

QT Imaging Holdings, Inc. is a medical device company engaged in the research, development, and commercialization of innovative body imaging systems using low energy sound. We believe that medical imaging is critical to the detection, diagnosis, monitoring and treatment of diseases, and we believe that it should be made safe, affordable and accessible. Our goal is to improve global health outcomes by leveraging imaging device technologies to tackle critical healthcare challenges with accuracy and precision without exposure to ionizing radiation.

Our management team has significant

hands-on

experience helping companies optimize their existing and new growth initiatives. We intend to share best practices and key learnings, gathered from our management team’s operating and investing experience, as well as strong relationships in the advanced medical equipment industries to help shape corporate strategies. Additionally, our management team has operated and invested in leading global advanced medical equipment companies across their corporate life cycles, and has developed deep relationships with key large multi-national organizations and investors. We believe that these relationships and our management team’s

present a significant opportunity to help drive strategic dialogue, access new customer relationships and achieve global ambitions following the completion of our initial business combination. We believe that we are providing an interesting alternative investment opportunity that capitalizes on key trends impacting the capital markets for advanced medical equipment companies.

Our Values

Most conventional imaging technologies—X-ray computed tomography (“

CT

”), MRI and positron-emission tomography (“

PET

”)—used in tertiary care require high energy, protective shielding of the patient, trained medical staff to operate the equipment, the administration of chemical agents to the patient to increase contrast and optimize visualization and specialized trained technicians to operate the equipment and ensure patient safety. Furthermore, the imaging procedures using these technologies are cumbersome, time-consuming and expensive. In addition, these conventional imaging technologies or modalities are not amenable to direct-to-consumer (“

DTC

”) or point-of-care (“

POC

”) settings or available in LRE. QT Imaging believes that its new technology can address the issues presented by these conventional imaging technologies with its accurate, safe, less expensive and easily deployable imaging systems.

The Clinical Problem

The current medical imaging technologies—CT, MRI and PET—are commonly used in advanced health care facilities in North America, Europe, Japan and South Korea, with more limited deployment in selected tertiary care facilities in other countries—usually large urban areas. These current technologies are based on advanced engineering solutions that use high energy (X-rays, positrons or nuclear magnetic resonance signals) to see inside of the human body. These technologies require large capital investments, are limited to specialized facilities and require advanced certifications for the machines and their operators to insure safe operation. These machines are also expensive to purchase and maintain. All these factors combine to restrict their deployment to advanced clinical centers and tertiary care institutions.

A Solution to Increasing the Quality of Health Care and Lowering Costs

Advances in technology offer an opportunity to provide: (a) a means for obtaining better image quality in medical images, (b) access to DTC or direct-to-practitioner (“

DTP

”) medical imaging, (c) lower cost medical imaging, (d) reduced inconvenience and risk for patients by providing a safe alternative to high-energy imaging and (e) a lower cost solution for making a medical diagnosis. QT Imaging believes that its technology is ideal for DTC, DTP and POC use because of its high performance, safety and relatively low cost. Furthermore, we believe that providing increased patient access to safe medical imaging is one important solution to increasing access and lowering the costs of medical care.

Our Competitive Strengths

We believe that our competitive strengths include the following:

Our Strategies

We believe that our strategies include the following:

QT Imaging Products & Product Road Map

The Company currently offers two products: QT Breast Scanner and QTviewer

®

.

QT Breast Scanner is a fixed, mechanical scanner used to evaluate the breast without the use of either ionizing radiation or compression associated with mammography, or the injections required for breast MRI. With the QT Breast Scanner, the patient lies comfortably on a table which contains an opening through which the breast is placed in a warm water bath (see Image 1) and gently immobilized using a magnetic retention pad fixed to a magnetic rod. The QT Breast Scanner differs from the handheld ultrasound used in breast imaging in that it utilizes reflection and transmission data from

low-frequency

sound waves, providing a significant increase in diagnostic information using the speed of sound characteristics of the breast and acquiring in true 3D a very accurate rendering of the breast tissue. The QT Breast Scanner provides

sub-millimeter,

high-definition, image resolution enabling identification of normal and abnormal breast structures and the accurate depiction of the precise shape and location of findings. The technology uniquely quantifies breast density using transmission information to further personalize a patient’s management recommendations.

Surface-to-volume

ratios and volumetric doubling time growth rate characteristics can be calculated to determine significance of lesions and improve specificity of the ultrasound.

The QT Breast Scanner creates true 3D images of the patient’s breast viewable in the Quantitative Transmission Ultrasound Viewer (known as QTviewer

®

), a software product designed for healthcare professionals to view the transmission (speed of sound) and reflection images. This application can display correlated Digital Imaging and Communications in Medicine (“

DICOM

®

”) images in multiple orientations (coronal, sagittal, and axial). QTviewer can manipulate image views and analyze pixel data with various functions. The QTviewer has additional functionality which enables the us

e

r to measure mass size and volume as well as fibroglandular tissue volume.

The current version of the QT Breast Scanner

is FDA-cleared “for

use as an ultrasonic imaging system to provide reflection-mode and transmission-mode images of a patient’s breast. The device is not intended to be used as a replacement for screening mammography.”

The QT Breast Scanner has current applicability as a supplementary imaging device, not as a replacement for screening mammography; near-term applicability for determining breast density, measuring mass size and growth, and diagnosing lesions using artificial intelligence; and medium- to long-term applicability for breast screening.

Sales and Marketing

Since our inception, we have devoted substantially all our financial resources to acquiring and developing the base technology for our body imaging systems, conducting research and development activities, securing related intellectual property rights, and for general corporate operations and growth. Our first product, the QT Ultrasound Breast Scanner (which was later renamed “QT Breast Scanner”), received FDA’s 510(k) market clearance in June 2017.

The Company has undertaken some marketing initiatives outside the U.S. It currently has distribution relationship with Innovador, based in Singapore. QT Imaging will assess future sales and distribution opportunities outside of the U.S., but there can be no guarantees that QT Imaging will find additional partners on terms acceptable to QT Imaging, if at all.

QT Imaging entered into the NXC Agreement, pursuant to which QT Imaging appointed NXC as the

agent for the sale of QT Imaging products and services in

territories: the U.S., U.S. territories, and U.S. Department of Defense installations. Additionally, NXC was appointed as the exclusive servicer of QT Imaging products sold by NXC under the terms of the NXC Agreement.

Differences between QT Imaging and other ultrasound technology devices

There are several differences between QT Imaging’s current and proposed devices and HHUS, ABUS, BUST, PAI, and PAT devices.

Other devices use

Piezo-electric

transducers that provide primarily

“B-mode”

poor resolution data. There is no valid true “transmission mode” since they use shear wave. Their images have reflection and compounding artifacts. Furthermore, their images are compounded 2D slices and they do not acquire the data in 3D. The resolution of their “3D” mode, “speed” images and specificity for masses is poor and their

contrast-to-noise

ratios are low. Their images cannot differentiate calcifications so in our opinion at least 20% of all cancers, mainly DCIS and

non-invasive

cancers, are missed. They have no “functional” imaging features such as doubling time to diagnose slow-growing cancers, tissue identification and specific tissue volume segmentations. There is poor reproducibility of their measurement and volume data thus they cannot follow cancer treatments or do breast density measurements.

Very few companies undertake or sponsor comparative clinical trials and what data is produced lacks clinical usefulness in terms of sensitivity and specificity. Other than Delphinus’ secondary screening trial that we are aware of, many companies have failed to do

head-to-head

trials against mammography for primary screening. In their current iterations their technologies are not able to do body or orthopedic imaging for future growth and development.

Of critical importance in comparing QT Imaging’s devices against other devices are factors such as their lack of FDA clearances for general screening, their lack of comparative trials for primary breast cancer screening, and the fact that their clinical resolution, presence of artifacts, and sensitivity and specificity data are not clinically useful.

Government Regulation

Our existing product, the QT Breast Scanner, products under development, and our operations will be subject to extensive regulation by the FDA, and other federal and state authorities in the U.S., as well as comparable authorities in foreign jurisdictions. Our products do not emit radiation, but are subject to regulation as medical devices in the U.S. under the FDCA and as implemented and enforced by the FDA, and under comparable regulatory schemes in foreign jurisdictions.

Business Combination

As set forth below and in the Current Report on Form

8-K

filed with the Securities Exchange Commission (the “SEC”) dated December 12, 2022, the Company executed a Business Combination Agreement (the “Business Combination Agreement”), dated as of December 8, 2022, with QTI Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of GigCapital5 (“Merger Sub”), and QT Imaging (the transactions contemplated by the Business Combination Agreement, the “Business Combination”). Consistent with our strategy, we have identified and used general criteria and guidelines that we believe are important in evaluating the target’s business, and we conducted a thorough due diligence review that encompassed, among other things, meetings with incumbent management and employees, documenting reviews and inspection of facilities, as applicable, as well as a review of financial and other information. On March 4, 2024, the Company closed the Business Combination with QT Imaging and was renamed to QT Imaging Holdings, Inc. Below is a summary of terms of the Business Combination Agreement.

The Merger

Pursuant to the terms of the Business Combination Agreement, Merger Sub merged with and into QT Imaging (the “Merger”) and has done so, with QT Imaging as the surviving company in the Merger (the “Surviving Corporation”), and after giving effect to the Merger, the Surviving Corporation became a wholly owned subsidiary of GigCapital5, which was renamed as QT Imaging Holdings, Inc. (“QTI Holdings” or the “Combined Company”).

Subject to the terms of the Business Combination Agreement, at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of the common stock of QT Imaging, par value $0.001 per share (the “QT Imaging Common Stock”) (excluding each share of QT Imaging Common Stock held in the treasury of QT Imaging which was cancelled without any conversion of such shares of QT Imaging Common Stock held in the treasury and dissenting shares) was automatically cancelled and converted into (A) the right to receive a number of shares of common stock, par value $0.0001 per share, of GigCapital5 (the “GigCapital5 Common Stock”) calculated based on the Exchange Ratio (as defined below) and (B) the contingent right to receive a portion of additional shares of GigCapital5 Common Stock based on the performance of the Combined Company if certain requirements are achieved in accordance with the terms of the Business Combination Agreement, if, as and when payable. The “Exchange Ratio” means the quotient of (a) the Aggregate Closing Merger Consideration (as defined in the Business Combination Agreement) divided by (b) the QT Imaging Fully Diluted Capital Stock (as defined in the Business Combination Agreement). In addition, at the Effective Time, certain warrants of QT Imaging to purchase QT Imaging Common Stock were converted into a warrant to acquire a number of shares of GigCapital5 Common Stock at an adjusted exercise price per share.

The shares of the Combined Company common stock are currently listed on the Nasdaq Global Market (“Nasdaq”) under the symbol “QTI,” and the warrants trade at the OTC Markets Group Inc. under the symbols “GIAWW.”

At the Effective Time, each outstanding

QT Imaging warrant that was not exercised and exchanged prior to the Effective Time automatically, without any action on the part of the holder of an

QT Imaging warrant, in accordance with the provisions of an

QT Imaging warrant, was converted into a warrant to acquire a number of shares of GigCapital5 Common Stock at an adjusted exercise price per share (each such resulting warrant, an “Assumed Warrant”). Each Assumed Warrant was subject to the same terms and conditions as were applicable to such corresponding

QT Imaging warrant immediately prior to the Effective Time (including applicable vesting conditions), except to the extent such terms or conditions are rendered inoperative by the transactions. Accordingly, as of the Effective Time: (A) each such Assumed Warrant was exercisable solely for shares of GigCapital5 Common Stock; (B) the number of shares of GigCapital5 Common Stock subject to each Assumed Warrant was determined by multiplying the number of shares of Company common stock subject to such

QT Imaging warrant, as in effect immediately prior to the Effective Time, by the per share merger consideration, and rounding the resulting number down to the nearest whole number of shares of GigCapital5 Common Stock; (C) the per share exercise price for the GigCapital5 Common Stock issuable upon exercise of each Assumed Warrant was determined by dividing the per share exercise price for the shares of company common stock subject to the

QT Imaging warrant, as in effect immediately prior to the Effective Time, by the per share merger consideration, and rounding the resulting exercise price up to the nearest whole cent; and (D) the holder of each

QT Imaging warrant outstanding as of immediately prior to the Effective Time was entitled to the contingent right to receive a portion of the merger consideration earnout shares, if, as and when payable. At the Effective Time, each company warrant (other than any

QT Imaging warrant) that was outstanding immediately prior to the Effective Time, whether vested or unvested, was in accordance with the provisions of such company warrant (for the avoidance of doubt, as may be amended following the date of this current report with the written approval of GigCapital5), was canceled without any conversion of such company warrant and no payment or distribution was made, and the holder of such company warrant ceased to have any rights, with respect to such company warrant.

Further, prior to the Effective Time, QT Imaging terminated each QT Imaging option that was outstanding immediately prior to the Effective Time, whether vested or unvested, without any conversion of such company options and no payment or distribution was made, and the holder of any company options ceased to have any rights, with respect to such company options.

Following the Effective Time, the board of directors of QT Imaging Holdings (the “QTI Holdings Board”) consists of seven directors classified in three classes, the initial members of which (the “Initial Post-Closing QTI Holdings Directors”) consisted of three individuals identified by GigCapital5 who will serve either in Class I, Class II or Class III, and included the chairman of the QTI Holdings Board, and three individuals identified by QT Imaging who will serve either in Class I, Class II or Class III, and one more board seat was filled by the GigCapital5 Board prior to Closing.

Incentive Plans

In connection with the Merger, the parties established, prior to the Effective Time an equity incentive award plan (the “Equity Plan”) for QTI Holdings with an award pool of GigCapital5 Common Stock equal to (i) eleven percent of the fully diluted shares of GigCapital5 Common Stock outstanding as of immediately after the Effective Time (rounded up to the nearest whole share) (the “Initial Equity Plan Pool”), which Equity Plan includes an “evergreen” provision pursuant to which such award pool will automatically increase on each January 1st that occurs within the ten year period following stockholder approval of such plan by an amount equal to five percent of the shares of GigCapital5 Common Stock outstanding as of 12:01 a.m. (Pacific Time) on such date, and which Equity Plan will be effective at and after the Effective Time. The parties expect that up to twenty-five percent of the Initial Equity Plan Pool would be reserved for issuance of awards by QTI Holdings to individuals who were employees or other service providers of QT Imaging as of the Effective Time and remain continuously employed or engaged by QTI Holdings at the time of the issuance of such awards following the Effective Time.

Approval of Extensions

The Company’s offering prospectus and Amended and Restated Certificate of Incorporation provided that the Company initially had until September 28, 2022 (the date which was 12 months after the consummation of the initial public offering (the “Offering”) to complete its initial business combination. On September 23, 2022, the Company held a special meeting of its stockholders (the “September 2022 Special Meeting”) and the Company’s stockholders approved the following proposals: (i) a proposal to amend (the “September 2022 Charter Amendment”) the Company’s Amended and Restated Certificate of Incorporation giving the Company the right to extend the date by which it has to consummate a business combination (the “Combination Period”) six (6) times for an additional one (1) month each time, from September 28, 2022 to March 28, 2023 (i.e., for a period of time ending 18 months from the consummation of its Offering) and (ii) a proposal to amend the Company’s investment management trust agreement, dated as of September 23, 2021 (the “September 2022 Trust Agreement”), by and between the Company and Continental Stock Transfer & Trust Company, allowing the Company to extend the Combination Period six (6) times for an additional one (1) month each time from September 28, 2022 to March 28, 2023 by depositing into the trust account for each

extension $160,000. The purpose of the September 2022 Charter Amendment and the September 2022 Trust Amendment is to allow the Company more time to complete its initial business combination.

In connection with the September 2022 Special Meeting, the Company’s stockholders elected to redeem 18,985,950 shares of the Company’s common stock, which represented approximately 82.5% of the shares that were part of the public units sold in the Offering. Following such redemptions, $192,138,312 was withdrawn from the trust account on September 27, 2022.

On March 28, 2023, the Company held a special meeting (the “March 2023 Special Meeting”) and the Company’s stockholders approved to extend the date by which the Company must consummate an initial business combination from March 28, 2023 up to September 28, 2023 in

extensions. In connection with the March 2023 Special Meeting, the Company’s stockholders elected to redeem 995,049 shares of the Company’s common stock, which represented approximately 4.3% of the shares that were part of the public units sold in the Offering. Following such redemptions, $10,449,625 is being withdrawn from the trust account.

In the March 2023 Special Meeting, the Company’s stockholders approved the following proposals: (i) a proposal to amend (the “March 2023 Charter Amendment”) the Company’s Amended and Restated Certificate of Incorporation giving the Company the right to extend the date by which it has to consummate a business combination (the “Combination Period”) six (6) times for an additional one (1) month each time, from March 28, 2023 to September 28, 2023 (i.e., for a period of time ending 24 months from the consummation of its initial public offering and (ii) a proposal to amend the Company’s investment management trust agreement, dated as of September 23, 2021 (the “March 2023 Trust Agreement”), by and between the Company and Continental Stock Transfer & Trust Company, allowing the Company to extend the Combination Period six (6) times for an additional one (1) month each time from March 28, 2023 to September 28, 2023 by depositing $100,000 into the trust account for each

extension. The purpose of the March 2023 Charter Amendment and the March 2023 Trust Amendment is to allow the Company more time to complete its initial business combination.

On September 28, 2023, the Company held a special meeting (the “September 2023 Special Meeting”) and the Company’s stockholders approved to extend the date by which the Company must consummate an initial business combination from September 28, 2023 up to December 31, 2023. Also, in conjunction with the September 2023 Special Meeting, the stockholders elected to redeem 904,023 Public Shares. Following such redemptions, $9,828,000 was withdrawn from the Trust Account. As a result of this redemption, our Founder and management team beneficially own approximately 75.6% of our issued and outstanding common stock.

On December 28, 2023, the Company held a special meeting of its stockholders (the “December 2023 Special Meeting”). At the meeting, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation that extends the date by which the Company must consummate a business combination transaction from December 31, 2023 up to March 31, 2024. The certificate of amendment was filed with the Delaware Secretary of State and has an effective date of December 28, 2023.

In connection with the December 2023 Special Meeting, stockholders elected to redeem 2,385 shares of the Company’s common stock, par value $0.0001 per share, which represents approximately 0.01% of the shares that were part of the Public Units sold in the Offering. Following such redemptions, $26,201 was withdrawn from the Trust Account on January 4, 2024 and approximately $23.3 million remains in the trust account following the redemption.

First Extension

On September 26, 2022, the Company issued an unsecured,

non-interest-bearing

promissory note (the “Extension Note”) to the Sponsor for a principal amount of $160,000. The proceeds from the Extension Note were deposited into the trust account in accordance with the terms of the Company’s Amended and Restated Certificate of Incorporation. The Extension Note matures on the earlier of the date on which the Company consummates its initial business combination or the date the Company winds up and may be prepaid without penalty.

Second Extension

On October 26, 2022, the Company further amended and restated the Extension Note (the “First Restated Extension Note”) to reflect an additional principal amount of $160,000 for a collective principal amount under the First Restated Extension Note of $320,000. The Sponsor deposited such funds into the Company’s trust account with Continental Stock Transfer & Trust Company.

Third Extension

On November 28, 2022, the Company further amended and restated the First Restated Extension Note (the “Second Restated Extension Note”) to reflect an additional principal amount of $160,000 for a collective principal amount under the Second Restated Extension Note of $480,000. The Sponsor deposited such funds into the Company’s trust account with Continental Stock Transfer & Trust Company.

Fourth Extension

On December 27, 2022, the Company further amended and restated the Second Restated Extension Note (the “Third Restated Extension Note”) to reflect an additional principal amount of $160,000 for a collective principal amount under the Third Restated Extension Note of $640,000. The Sponsor deposited the additional principal amount of $160,000 into the Company’s trust account with Continental Stock Transfer & Trust Company.

Fifth Extension

On January 26, 2023, the Company further amended and restated the Third Restated Extension Note (the “Fourth Restated Extension Note”) to reflect an additional principal amount of $160,000 for a collective principal amount under the Fourth Restated Extension Note of $800,000. The Sponsor deposited the additional principal amount of $160,000 into the Company’s trust account with Continental Stock Transfer & Trust Company.

Sixth Extension

On February 27, 2023, the Company further amended and restated the Fourth Restated Extension Note (the “Fifth Restated Extension Note”) to reflect an additional principal amount of $160,000 for a collective principal amount under the Fifth Restated Extension Note of $960,000. The Sponsor deposited the additional principal amount of $160,000 into the Company’s trust account with Continental Stock Transfer & Trust Company.

Seventh Extension

On March 28, 2023, following the approval of the March 2023 Charter Amendment and the March 2023 Trust Amendment, the Company further amended and restated the Fifth Restated Extension Note (the “Sixth Restated Extension Note”) to reflect an additional principal amount of $100,000 for a collective principal amount under the Sixth Restated Extension Note of $1,060,000. The Sponsor deposited the additional principal amount of $100,000 into the Company’s trust account with Continental Stock Transfer & Trust Company.

Eighth Extension

On May 19, 2023, the Company further amended and restated the Sixth Restated Extension Note (the “Seventh Restated Extension Note”) to reflect an additional principal amount of $100,000 for a collective principal amount under the Seventh Restated Extension Note of $1,160,000. The Sponsor deposited the additional principal amount of $100,000 into the Company’s trust account with Continental Stock Transfer & Trust Company.

Ninth Extension

On June 6, 2023, the Company further amended and restated the Seventh Restated Extension Note (the “Eighth Restated Extension Note”) to reflect an additional principal amount of $100,000 for a collective principal amount under the Eighth Restated Extension Note of $1,260,000. The Sponsor deposited the additional principal amount of $100,000 into the Company’s trust account with Continental Stock Transfer & Trust Company.

Tenth Extension

On June 27, 2023, the Company further amended and restated the Eighth Restated Extension Note (the “Ninth Restated Extension Note”) to reflect an additional principal amount of $100,000 for a collective principal amount under the Ninth Restated Extension Note of $1,360,000. The Sponsor deposited the additional principal amount of $100,000 into the Company’s trust account with Continental Stock Transfer & Trust Company.

Eleventh Extension

On July 26, 2023, the Company further amended and restated the Ninth Restated Extension Note (the “Tenth Restated Extension Note”) to reflect an additional principal amount of $100,000 for a collective principal amount under the Tenth Restated Extension Note of $1,460,000. The Sponsor deposited the additional principal amount of $100,000 into the Company’s trust account with Continental Stock Transfer & Trust Company.

Twelfth Extension

On August 28, 2023, the Company further amended and restated the Tenth Restated Extension Note (the “Eleventh Restated Extension Note”) to reflect an additional principal amount of $100,000 for a collective principal amount under the Eleventh Restated Extension Note of $1,560,000. The Sponsor deposited the additional principal amount of $100,000 into the Company’s trust account with Continental Stock Transfer & Trust Company.

On September 26, 2022, the Company issued a convertible,

bearing, unsecured promissory note (the “Working Capital Note”) to the Sponsor for a principal amount of $65,000. The Working Capital Note was subsequently amended and restated eleven more times on October 26, 2022 (an additional $65,000 added to the Working Capital Note), November 28, 2022 (an additional $65,000 added to the Working Capital Note), December 27, 2022 (an additional $65,000 added to the Working Capital Note), January 25, 2023 (an additional $65,000 added to the Working Capital Note), February 27, 2023 (an additional $350,000 added to the Working Capital Note), March 28, 2023 (an additional $130,000 added to the Working Capital Note), April 27, 2023 (an additional $65,000 added to the Working Capital Note), June 26, 2023 (an additional $130,000 added to the Working Capital Note), July 25, 2023 (an additional $65,000 added to the Working Capital Note), October 27, 2023 (an additional $381,360 added to the Working Capital Note) and December 13, 2023 (an additional $53,640 added to the Working Capital Note), respectively, for a collective principal amount of $1,500,000. The Working Capital Note was issued to provide the Company with additional working capital during the Extension and was not deposited into the Trust Account. The Working Capital Note is convertible at the Sponsor’s election upon the consummation of the initial business combination. Upon such election, the convertible note will convert, at a price of $10.00 per unit, into units identical to the Private Placement Units issued in connection with the Offering. An aggregate of 150,000 Private Placement Units of the Company would be issued if the entire principal balance of the Working Capital Note is converted. Each Private Placement Unit consists of one share of the Company’s common stock, par value $0.0001 per share, and one redeemable warrant. The warrants constituting a part of the Private Placement Units would be exercisable, subject to the terms and conditions of the warrant and during the exercise period as provided in the warrant agreement governing the warrants. The Company has relied upon Section 4(a)(2) of the Securities Act, in connection with the issuance and sale of the convertible promissory note, as it was issued to a sophisticated investor without a view to distribution and was not issued through any general solicitation or advertisement.

On February 15, 2024, the Company amended and restated the Second Non-Convertible Working Capital Note (the “Third Non-Convertible Working Capital Note”) to reflect an additional principal amount of $35,000 extended by the Sponsor to the Company for a collective principal amount under the Third Non-Convertible Working Capital Note of $297,247. The Third Non-Convertible Working Capital Note was issued to provide the Company with additional working capital and will not be deposited into the Trust Account. The Third Non-Convertible Working Capital Note bears no interest and is repayable in full upon the consummation of the Business Combination by the Company.

Lack of Business Diversification

For an indefinite period of time after consummation of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By consummating our initial business combination with only a single entity, our lack of diversification may:

Competition

Although we expected to encounter intense competition from entities other than blank check companies having a business objective similar to ours, including private equity groups, venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions, as described above we were successful in completing the Business Combination. Having completed our Business Combination, there will be, in all likelihood, intense competition from competitors of the target business. We cannot assure you that, subsequent to the Business Combination, we will have the resources or ability to compete effectively.

Intellectual Property

We believe that our intellectual property rights are valuable and important to our business. We rely on a combination of patents, copyrights, trademarks, trade secrets, know-how, contractual provisions, and confidentiality procedures to protect our intellectual property rights.

We seek to protect our proprietary inventions relevant to our business through patent protection in the United States and abroad. In addition to the protection provided by our intellectual property rights, we enter into proprietary information and invention assignment agreements or similar agreements with our employees, consultants, and contractors. We further control the use of our proprietary technology and intellectual property rights through provisions in our agreements with customers.

Legal Proceedings

We are subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of business. As of December 31, 2023, the Company was not a party to any material legal proceedings.

Employees

Prior to the closing of the Business Combination, we had three executive officers. These individuals were not obligated to devote any specific number of hours to our matters and intended to devote only as much time as they deem necessary to our affairs. The amount of time they devoted in any time period varied based on whether a target business had been selected for the business combination and the stage of the business combination process the Company is in. Accordingly, once a suitable target business to acquire had been located, management spent more time investigating such target business and negotiating and processing the business combination (and consequently spend more time on our affairs) than had been spent prior to locating a suitable target business. Our executive officers devoted such amount of time as they reasonably believe is necessary to our business. We did not have any full-time employees prior to the consummation of the Business Combination.

Periodic Reporting and Financial Information

We have registered our units, common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, this Annual Report contains financial statements audited and reported on by our independent registered public accountants.

We will provide stockholders with audited financial statements of the prospective target business as part of any proxy solicitation materials or tender offer documents sent to stockholders to assist them in assessing the target business. These financial statements will need to be prepared in accordance with or reconciled to accounting principles generally accepted in the United States (“GAAP”) or international financial reporting standards, as issued by the International Accounting Standards Board (“IFRS”).

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form

10-K

for the year ended December 31, 2023. Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of Company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use, or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.