QT IMAGING HOLDINGS, INC.

Previous wording

Consistent with our strategy, on May 31, 2023, we entered into a Sales Agent Agreement (the “NXC Sales Agent Agreement”) with NXC Imaging, Inc. (“NXC”) pursuant to which we appointed NXC as the non-exclusive agent for the sale of QT Imaging products and services in non-exclusive 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 Sales Agent Agreement. Effective June 10, 2024, the NXC Sales Agent Agreement was superseded by the NXC Distribution Agreement that was entered into with NXC on June 18, 2024. Under the NXC Distribution Agreement, NXC is appointed as the exclusive reseller to market, advertise, and resell QT Breast Scanners in the U.S. and U.S. territories. NXC will purchase for the purpose of reselling, leasing or renting QT Breast Scanners directly to its customers, but is not obligated to purchase any particular quantity of QT Breast Scanners from us. We have reserved the right to sell directly to customers as an exception. Furthermore, we may, in our sole discretion, sell the QT Breast Scanners to any other person or entity anywhere in the world without notice to NXC or NXC’s prior consent. NXC is also allowed to assign sales agents for the purpose of QT Breast Scanner sales. NXC’s purchases will be in accordance with an agreed upon product pricing schedule (subject to change upon 60 days’ prior written notice by us), provided that neither NXC nor its assigned sales agents may mark-up the cost of the QT Breast Scanners more than twenty percent (20%) unless otherwise mutually agreed to between NXC and us. Each order will include information reasonably requested by us and is subject to our acceptance, after which it becomes an approved order. Any such approved orders are non-cancellable and not subject to rescheduling after acceptance by us. Any orders not accepted by us in writing are deemed rejected. On December 11, 2024, we and NXC entered into the Amended Distribution Agreement, which amends and restates the NXC Distribution Agreement in its entirety, making some modifications to the NXC Distribution Agreement but retaining other terms. We further amended the Amended Distribution Agreement on March 28, 2025. The Amended Distribution Agreement has a term that runs until December 31, 2026, unless earlier terminated or extended by mutual written agreement. As of June 30, 2025, we have delivered twenty-two QT Breast Scanners to NXC and NXC’s customers pursuant to the NXC Sales Agent Agreement and NXC Distribution Agreement.

Current wording

Consistent with our strategy, on May 31, 2023, we entered into a Sales Agent Agreement (the “NXC Sales Agent Agreement”) with NXC Imaging, Inc. (“NXC”) pursuant to which we appointed NXC as the non-exclusive agent for the sale of QT Imaging products and services in non-exclusive 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 Sales Agent Agreement. Effective June 10, 2024, the NXC Sales Agent Agreement was superseded by the NXC Distribution Agreement that was entered into with NXC on June 18, 2024. Under the NXC Distribution Agreement, NXC is appointed as the exclusive reseller to market, advertise, and resell QT Breast Scanners in the U.S. and U.S. territories. NXC will purchase for the purpose of reselling, leasing or renting QT Breast Scanners directly to its customers, but is not obligated to purchase any particular quantity of QT Breast Scanners from us. We have reserved the right to sell directly to customers as an exception. Furthermore, we may, in our sole discretion, sell the QT Breast Scanners to any other person or entity anywhere in the world without notice to NXC or NXC’s prior consent. NXC is also allowed to assign sales agents for the purpose of QT Breast Scanner sales. NXC’s purchases will be in accordance with an agreed upon product pricing schedule (subject to change upon 60 days’ prior written notice by us), provided that neither NXC nor its assigned sales agents may mark-up the cost of the QT Breast Scanners more than twenty percent (20%) unless otherwise mutually agreed to between NXC and us. Each order will include information reasonably requested by us and is subject to our acceptance, after which it becomes an approved order. Any such approved orders are non-cancellable and not subject to rescheduling after acceptance by us. Any orders not accepted by us in writing are deemed rejected. On December 11, 2024, we and NXC entered into the NXC Amended Distribution Agreement, which amends and restates the NXC Distribution Agreement in its entirety, making some modifications to the NXC Distribution Agreement but retaining other terms. We further amended the Amended Distribution Agreement on March 28, 2025. The Amended Distribution Agreement has a term that runs until December 31, 2026, unless earlier terminated or extended by mutual written agreement. As of September 30, 2025, we have delivered 23 QT Breast Scanners to NXC and NXC’s customers pursuant to the NXC Sales Agent Agreement and NXC Distribution Agreement.

Previous wording

We have incurred net operating losses and negative cash flows from operations since our inception and had an accumulated deficit of $47,078,042 as of June 30, 2025. During the six months ended June 30, 2025, we incurred a net loss of $15,137,515 and used $4,978,822 of cash in operating activities. We continue to incur losses, and our ability to achieve and sustain profitability will depend on the achievement of sufficient revenues to support our cost structure. We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital.

Current wording

We have incurred net operating losses and negative cash flows from operations since our inception and had an accumulated deficit of $51,635,448 as of September 30, 2025. During the nine months ended September 30, 2025, we incurred a net loss of $19,694,921 and used $5,857,572 of cash in operating activities. We continue to incur losses, and our ability to achieve and sustain profitability will depend on the achievement of sufficient revenues to support our cost structure. We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital.

Previous wording

On January 9, 2025, we and YA II PN, LTD (“Yorkville”) entered into the Third Omnibus Amendment (the “Third Amendment”), pursuant to which, we and Yorkville agreed that for $1.5 million of the then current outstanding balance due under the $10.0 million promissory note issued to Yorkville (the “Yorkville Note”) (principal and unpaid accrued interest), the Fixed Price for conversion shall be modified to $0.584 per share, and for the remainder of the balance, the Fixed Price shall not be changed but shall remain $4.61395 per share as provided for in the Yorkville Note when we issued it on March 4, 2024. Further, the Third Amendment removed our obligation to make monthly payments to Yorkville, previously owing due to the occurrence of the Trigger Event (as defined in the Third Amendment), such that no further monthly payments will be owed during the period beginning on the date of the Third Amendment and ending on the maturity date of the Yorkville Note of March 31, 2026. In exchange for this relief, the aggregate purchase price owed to us from the first Advance (the “Advanced Proceeds”) that occurs pursuant to the terms of the Standby Equity Purchase Agreement (the “SEPA”) shall be paid by Yorkville offsetting the amount of the Advance Proceeds against an equal amount outstanding under the Yorkville Note (first towards accrued and unpaid interest, and then towards outstanding principal and the corresponding payment premium in respect of such principal amount, if applicable), and that for any subsequent Advances pursuant to the terms of the SEPA, Yorkville shall pay half of such Advance Proceeds directly to us and the other half of such Advance Proceeds shall be paid by Yorkville offsetting the amount of the Advance Proceeds against an equal amount outstanding under the Yorkville Note (first towards accrued and unpaid interest, and then towards outstanding principal and the corresponding payment premium in respect of such principal amount, if applicable). On January 9, 2025, we delivered our first Advance Notice under the SEPA for the sale of 885,000 shares of common stock. This resulted in the reduction of an additional $182,682 in principal of the Yorkville Note.

Current wording

On January 9, 2025, we and YA II PN, LTD (“Yorkville”) entered into the Third Omnibus Amendment (the “Third Amendment”), pursuant to which, we and Yorkville agreed that for $1.5 million of the then current outstanding balance due under the $10.0 million promissory note issued to Yorkville (the “Yorkville Note”) (principal and unpaid accrued interest), the Fixed Price for conversion shall be modified to $1.752 per share, and for the remainder of the balance, the Fixed Price shall not be changed but shall remain $13.84185 per share as provided for in the Yorkville Note when we issued it on March 4, 2024. Further, the Third Amendment removed our obligation to make monthly payments to Yorkville, previously owing due to the occurrence of the Trigger Event (as defined in the Third Amendment), such that no further monthly payments will be owed during the period beginning on the date of the Third Amendment and ending on the maturity date of the Yorkville Note of March 31, 2026. In exchange for this relief, the aggregate purchase price owed to us from the first Advance (the “Advanced Proceeds”) that occurs pursuant to the terms of the Standby Equity Purchase Agreement (the “SEPA”) shall be paid by Yorkville offsetting the amount of the Advance Proceeds against an equal amount outstanding under the Yorkville Note (first towards accrued and unpaid interest, and then towards outstanding principal and the corresponding payment premium in respect of such principal amount, if applicable), and that for any subsequent Advances pursuant to the terms of the SEPA, Yorkville shall pay half of such Advance Proceeds directly to us and the other half of such Advance Proceeds shall be paid by Yorkville offsetting the amount of the Advance Proceeds against an equal amount outstanding under the Yorkville Note (first towards accrued and unpaid interest, and then towards outstanding principal and the corresponding payment premium in respect of such principal amount, if applicable). On January 9, 2025, we delivered our first Advance Notice under the SEPA for the sale of 295,000 shares of common stock. This resulted in the reduction of an additional $182,682 in principal of the Yorkville Note.

Previous wording

On January 9, 2025, we also entered into an amendment (the “Cable Car Amendment”) with Funicular Funds, LP (“Cable Car”) to amend certain terms of the secured note purchase agreement with Cable Car (the “Cable Car Note”), including a reduction of the conversion price for the Cable Car Note to $0.584 per share. Further, the Cable Car Amendment provides that the maturity date for the Cable Car Note shall be extended to March 31, 2026, in consideration for which, we shall pay a fee of $90,000 to Cable Car for the extension (the “Extension Fee”), with such fee being added to the amount due and payable on such maturity date, unless the Cable Car Note is earlier converted pursuant to its terms, in which event the Extension Fee shall also be converted. No interest shall accrue or be due on the Extension Fee. Pursuant to the Cable Car Amendment, interest shall accrue on the outstanding principal balance of the Cable Car Note at an annual rate equal to 6%, with interest being calculated based on a 365-day year and the actual number of days elapsed, to the extent permitted by applicable law. Interest shall be due and payable on the maturity date for the Cable Car Note, unless the Cable Car Note is earlier converted pursuant to its terms, in which event such accrued and unpaid interest shall also be converted.

Current wording

On January 9, 2025, we also entered into an amendment (the “Cable Car Amendment”) with Funicular Funds, LP (“Cable Car”) to amend certain terms of the secured note purchase agreement with Cable Car (the “Cable Car Note”), including a reduction of the conversion price for the Cable Car Note to $1.752 per share. Further, the Cable Car Amendment provides that the maturity date for the Cable Car Note shall be extended to March 31, 2026, in consideration for which, we paid a fee of $90,000 to Cable Car for the extension (the “Extension Fee”), with such fee being added to the amount due and payable on such maturity date, unless the Cable Car Note is earlier converted pursuant to its terms, in which event the Extension Fee shall also be converted. No interest shall accrue or be due on the Extension Fee. Pursuant to the Cable Car Amendment, interest shall accrue on the outstanding principal balance of the Cable Car Note at an annual rate equal to 6%, with interest being calculated based on a 365-day year and the actual number of days elapsed, to the extent permitted by applicable law. Interest shall be due and payable on the maturity date for the Cable Car Note, unless the Cable Car Note is earlier converted pursuant to its terms, in which event such accrued and unpaid interest shall also be converted.

Previous wording

On February 26, 2025, we entered into a credit agreement (the “Credit Agreement”) that provides a senior secured term loan (the “Lynrock Lake Term Loan”) with Lynrock Lake. The Credit Agreement is secured by a first priority lien on substantially all our assets and provides for a term loan in the aggregate principal amount of $10,100,000 at an interest rate of 10.0% per annum, compounded quarterly. The maturity date of the Credit Agreement is March 31, 2027. Furthermore, in connection with the Lynrock Lake Term Loan, we 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 its 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 we issue 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.

Current wording

On February 26, 2025, we entered into a credit agreement (the “Credit Agreement”) that provides a senior secured term loan (the “Lynrock Lake Term Loan”) with Lynrock Lake. The Credit Agreement is secured by a first priority lien on substantially all our assets and provides for a term loan in the aggregate principal amount of $10,100,000 at an interest rate of 10.0% per annum, compounded quarterly. The maturity date of the Credit Agreement is March 31, 2027. Furthermore, in connection with the Lynrock Lake Term Loan, we issued to Lynrock Lake, pursuant to the terms of a Warrant to Purchase Common Stock (the “Lynrock Lake Warrant”), a warrant to purchase 20,333,623 shares of its common stock at an exercise price of $1.20 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 we issue shares of common stock (or derivative securities) at a price that is either less than the $1.20 exercise price or the fair market value of a share of common stock from the immediately prior trading day.

Previous wording

On February 26, 2025, we used a portion of the proceeds of the Lynrock Lake Term Loan to pay Yorkville an amount equal to $3,000,000 in cash and issued to Yorkville a warrant to purchase 15,000,000 shares of its common stock at an exercise price of $0.40 per share pursuant to a Warrant to Purchase Common Stock (the “Yorkville Warrant”) to fully settle and discharge our 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 our common stock undergoes a split, reverse-split or similar event. Furthermore, the Yorkville Warrant has provided the holder with piggyback registration rights. We and Yorkville also entered into that certain Termination Agreement, dated February 26, 2025 (the “Termination Agreement”), pursuant to which the parties acknowledged the termination of the SEPA effective February 26, 2025.

Current wording

On February 26, 2025, we used a portion of the proceeds of the Lynrock Lake Term Loan to pay Yorkville an amount equal to $3,000,000 in cash and issued to Yorkville a warrant to purchase 5,000,071 shares of its common stock at an exercise price of $1.20 per share pursuant to a Warrant to Purchase Common Stock (the “Yorkville Warrant”) to fully settle and discharge our 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 our common stock undergoes a split, reverse-split or similar event. Furthermore, the Yorkville Warrant has provided the holder with piggyback registration rights. We and Yorkville also entered into that certain Termination Agreement, dated February 26, 2025 (the “Termination Agreement”), pursuant to which the parties acknowledged the termination of the SEPA effective February 26, 2025.

Previous wording

We cannot reasonably determine the nature, timing and costs of the efforts that will be necessary to complete the enhancements ofthe QT Breast Scanner. Our research and development expenses may vary significantly based on factors such as, without limitation:

Current wording

Cloud SaaS platform, run clinical trials that are necessary to generate biomarker data, and reduce the bill of materials (“BOM”) and other costs to manufacture the QT Breast Scanner. Our research and development expenses may vary significantly based on factors such as, without limitation:

Previous wording

Revenue increased by $1,945,379 to $3,659,414 for the three months ended June 30, 2025 from $1,714,035 for the three months ended June 30, 2024. The increase in revenue was primarily attributable to the sale of eight QT Breast Scanners in the second quarter of 2025 as compared with four scanners sold in the second quarter of 2024 due to the minimum order quantities (“MOQs”) in accordance with the amended NXC Distribution Agreement, which was executed during the fourth quarter of 2024.

Current wording

Revenue increased by $3,236,131 to $4,192,101 for the three months ended September 30, 2025 from $955,970 for the three months ended September 30, 2024. The increase in revenue was primarily attributable to the sale of nine QT Breast Scanners in the third quarter of 2025 as compared with two scanners sold in the third quarter of 2024 due to the minimum order quantities (“MOQs”) in accordance with the amended NXC Distribution Agreement, which was executed during the fourth quarter of 2024.

Previous wording

Cost of revenue increased by $992,853 to $1,832,337 for the three months ended June 30, 2025 from $839,484 for the three months ended June 30, 2024. The increase in cost of revenue was primarily attributable to the sale of eight QT Breast Scanners in the second quarter of 2025 as compared with four scanners sold in the second quarter of 2024. Gross margin slightly declined in the three months ended June 30, 2025, as compared to the same period in 2024, due to variability in the weighted average costs of inventory.

Current wording

Cost of revenue increased by $2,038,761 to $2,389,428 for the three months ended September 30, 2025 from $350,667 for the three months ended September 30, 2024. The increase in cost of revenue was primarily attributable to the sale of nine QT Breast Scanners in the third quarter of 2025 as compared with two scanners sold in the third quarter of 2024. Gross margin decreased in the three months ended September 30, 2025, as compared to the same period in 2024, due to variability in the weighted average costs of inventory.

Previous wording

Selling, general and administrative expenses decreased by $200,179 to $1,969,362 for the three months ended June 30, 2025 from $2,169,541 for the three months ended June 30, 2024. This change was primarily attributable to decreases in professional and outside services costs of $198,188 and insurance cost of $145,857 and an increase in allocation expenses of $420,310 from selling, general and administrative expenses to cost of revenue, which was partially offset by increases in employee compensation cost of $400,290, and general business expenses of $146,088.

Current wording

Selling, general and administrative expenses increased by $508,717 to $2,515,994 for the three months ended September 30, 2025 from $2,007,277 for the three months ended September 30, 2024. This change was primarily attributable to increases in professional and outside services expenses of $394,905, employee compensation expenses of $558,989, and general business expenses of $184,962, which were partially offset by decreases in insurance expense of $144,600 and an increase in allocation expenses of $498,456 from selling, general and administrative expenses to cost of revenue.

Previous wording

Change in fair value of warrant liability decreased by $3,691,898 to an expense of $3,501,079 during the six months ended June 30, 2025 from income of $190,819 during the six months ended June 30, 2024. The change in fair value of warrants during the second quarter of 2025 was primarily attributable to increases in the market value of the Lynrock Lake Warrant and Yorkville Warrant, which were issued in the first quarter of 2025 and subsequently revalued on June 11, 2025 upon modification.

Current wording

Change in fair value of warrant liability changed by $88,848 to an expense of $80,043 during the three months ended September 30, 2025 from income of $8,805 during the three months ended September 30, 2024. The change in fair value of warrants during the third quarter of 2025 was primarily attributable to an increase in the market value of the public and private warrants in the 2025 period.

Previous wording

Change in the fair value of derivative liability decreased by $4,611,500 to $101,300 during the six months ended June 30, 2025 from $4,712,800 during the six months ended June 30, 2024. The change in fair value of derivatives during the first six months in 2024 was primarily driven by the decline in the value of our common stock. The derivative liability was extinguished during the three months ended March 31, 2025 as a result of the Termination Agreement with Yorkville.

Current wording

Change in the fair value of derivative liability decreased by $87,200 to $0 during the three months ended September 30, 2025 from income of $87,200 during the three months ended September 30, 2024. The derivative liability was extinguished on February 26, 2025 as a result of the extinguishment of the loan with Yorkville.

Previous wording

Change in the fair value of earnout liability decreased by $100,000 to $210,000 during the three months ended June 30, 2025 from $310,000 during the three months ended June 30, 2024. The change in fair value of earnout liability during the second quarter of 2024 and 2025 was primarily driven by the changes to the probability of outcome related to a formal FDA clearance for a new indication for the use of our breast scanning systems and our open angle scanner and our revenue assumptions.

Current wording

Change in the fair value of earnout liability decreased by $2,280,000 to an expense of $2,230,000 during the three months ended September 30, 2025 from income of $50,000 during the three months ended September 30, 2024. The change in the fair value of earnout liability during the 2025 period was driven by the changes to the probability of outcome related to our revenue assumptions.

Previous wording

Interest expense, net decreased by $716,148 to $378,902 for the three months ended June 30, 2025 from $1,095,050 for the three months ended June 30, 2024. This change is primarily driven by decreases in interest expense and amortization of the debt discount of $953,436 for the Yorkville Note, which was extinguished in February 2025, partially offset by the interest expense and amortization of debt discount of $328,550 for the Lynrock Lake Term Loan.

Current wording

Interest expense, net decreased by $890,581 to $564,725 for the three months ended September 30, 2025 from $1,455,306 for the three months ended September 30, 2024. This decrease was primarily driven by decreases in interest expense and amortization of the debt discount of $1,301,603 for the Yorkville Note, which was extinguished in February 2025, partially offset by the interest expense and amortization of debt discount of $521,243 for the Lynrock Lake Term Loan.

Previous wording

Comparison of the six months ended June 30, 2025 and 2024

Current wording

Comparison of the nine months ended September 30, 2025 and 2024

Previous wording

Revenue increased by $3,381,631 to $6,457,829 for the six months ended June 30, 2025 from $3,076,198 for the six months ended June 30, 2024. The increase in revenue was primarily attributable to the sale of fourteen QT Breast Scanners in the first six months of 2025 as compared with seven scanners sold in the first six months of 2024 due to the MOQs in accordance with the amended NXC Distribution Agreement, which was executed during the fourth quarter of 2024.

Current wording

Revenue increased by $6,617,762 to $10,649,930 for the nine months ended September 30, 2025 from $4,032,168 for the nine months ended September 30, 2024. The increase in revenue was primarily attributable to the sale of 23 QT Breast Scanners in the first nine months of 2025 as compared with nine scanners sold in the first nine months of 2024 due to the MOQs in accordance with the amended NXC Distribution Agreement, which was executed during the fourth quarter of 2024.

Previous wording

Cost of revenue increased by $1,377,323 to $2,818,890 for the six months ended June 30, 2025 from $1,441,567 for the six months ended June 30, 2024. The increase in cost of revenue was primarily attributable to the sale of fourteen QT Breast Scanners in the first six months of 2025 as compared with seven scanners sold in the first six months of 2024. Gross margin increased in the six months ended June 30, 2025, as compared to the same period in 2024, due to variability in the weighted average costs of inventory.

Current wording

Cost of revenue increased by $3,416,084 to $5,208,318 for the nine months ended September 30, 2025 from $1,792,234 for the nine months ended September 30, 2024. The increase in cost of revenue was primarily attributable to the sale of twenty-three QT Breast Scanners in the first nine months of 2025 as compared with nine scanners sold in the first nine months of 2024. Gross margin slightly decreased in the nine months ended September 30, 2025, as compared to the same period in 2024, due to variability in the weighted average costs of inventory.

Previous wording

Research and development expenses increased by $185,318 to $1,752,946 for the six months ended June 30, 2025 from $1,567,628 for the six months ended June 30, 2024. The increase in research and development expenses was primarily attributable to employee compensation cost of $236,432, which was partially offset by decrease in patents amortization cost of $90,139.

Current wording

Research and development expenses increased by $198,862 to $2,691,704 for the nine months ended September 30, 2025 from $2,492,842 for the nine months ended September 30, 2024. The increase in research and development expenses was primarily attributable to employee compensation expenses of $198,578.

Previous wording

Selling, general and administrative expenses decreased by $3,895,049 to $3,970,703 for the six months ended June 30, 2025 from $7,865,752 for the six months ended June 30, 2024. This change was primarily attributable to a decrease in professional and outside services costs of $4,443,084, primarily due to the transaction expenses of $3,944,924 in the 2024 period, and an increase in the allocation of $669,896 from selling, general and administrative expenses to cost of revenue, partially offset by increases in employee compensation costs of $1,014,649.

Current wording

Selling, general and administrative expenses decreased by $3,386,332 to $6,486,697 for the nine months ended September 30, 2025 from $9,873,029 for the nine months ended September 30, 2024. This change was primarily attributable to a decrease in professional and outside services expenses of $4,048,179 primarily due to the transaction expenses of $3,944,924 in the 2024 period, and an increase in the allocation of $1,168,351 from selling, general and administrative expenses to cost of revenue, partially offset by increases in employee compensation expenses of $1,573,638.

Previous wording

Other expense, net increased by $8,531,630 to $8,739,955 for the six months ended June 30, 2025 from $208,325 for the six months ended June 30, 2024. This increase was primarily due to the extinguishment loss of $2,033,666 for the Yorkville Note and Cable Car Note, $6,640,384 of non-cash expense incurred at issuance of the Lynrock Lake Term Loan, and $90,000 from the Extension Fee for the Cable Car Note during the six months ended June 2025, which was partially offset by the modification expense of $200,513 related to the decrease in exercise price of our private placement warrants and working capital note warrants during the six months ended June 2024.

Current wording

Other expense, net increased by $8,579,184 to $8,770,514 for the nine months ended September 30, 2025 from $191,330 for the nine months ended September 30, 2024. The increase was primarily due to the extinguishment loss of $2,033,666 for the Yorkville Note and Cable Car Note, $6,640,384 in noncash expense incurred at issuance of the Lynrock Lake Term Loan, and $90,000 Extension Fee for the Cable Car Note during the nine months ended September 30, 2025, which was partially offset by the modification expense of $200,513 related to the decrease in exercise price of our private placement warrants and working capital note warrants in the nine months ended September 30, 2024.

Previous wording

Change in fair value of warrant liability decreased by $3,010,292 to an expense of $2,796,350 during the three months ended June 30, 2025 from income of $213,942 during the three months ended June 30, 2024. The change in fair value of warrants during the second quarter of 2025 was primarily attributable to increases in the market value of the Lynrock Lake Warrant and Yorkville Warrant, which were issued in the first quarter of 2025 and subsequently revalued on June 11, 2025 upon modification.

Current wording

Change in fair value of warrant liability decreased by $3,780,746 to an expense of $3,581,122 during the nine months ended September 30, 2025 from income of $199,624 during the nine months ended September 30, 2024. The change in fair value of warrants during the 2025 period was primarily attributable to increases in the market value of the Lynrock Lake Warrant and Yorkville Warrant, which were issued in the first quarter of 2025 and subsequently revalued on June 11, 2025 upon modification.

Previous wording

Change in the fair value of derivative liability decreased by $1,729,700 to $0 during the three months ended June 30, 2025 from $1,729,700 during the three months ended June 30, 2024. The change in fair value of derivatives during the first quarter of 2024 was primarily driven by the decline in the value of our common stock. The derivative liability was extinguished on February 26, 2025 as a result of the Termination Agreement with Yorkville.

Current wording

Change in the fair value of derivative liability decreased by $4,698,700 to $101,300 during the nine months ended September 30, 2025 from $4,800,000 during the nine months ended September 30, 2024. The change in fair value of derivatives during the 2025 period was primarily driven by the decline in the value of our common stock period in the 2024 period. The derivative liability was extinguished during the first quarter of 2025 as a result of the extinguishment of the loan with Yorkville.

Previous wording

Change in the fair value of earnout liability decreased by $2,760,000 to $160,000 during the six months ended June 30, 2025 from $2,920,000 during the six months ended June 30, 2024. The change in fair value of earnout liability during the first six months of 2024 and 2025 was primarily driven by the decline in the value of our common stock and changes to the probability of outcome related to a formal FDA clearance for a new indication for the use of our breast scanning systems and our open angle scanner and our revenue assumptions.

Current wording

Change in the fair value of earnout liability decreased by $5,040,000 to an expense of $2,070,000 during the nine months ended September 30, 2025 from income of $2,970,000 during the nine months ended September 30, 2024. The change in the fair value of earnout liability during the first nine months of 2025 was primarily driven by changes to the probability of outcome related to our revenue assumptions.

Previous wording

Interest expense, net decreased by $623,720 to $1,070,289 for the six months ended June 30, 2025 from $1,694,009 for the six months ended June 30, 2024. This change is primarily driven by decreases in interest expense and amortization of the debt discount of $658,341 for the Yorkville Note, $221,857 for the private secured convertible bridge financing closed in November 2023 (the “Bridge Loan”), $52,498 for the convertible promissory note agreement with USCG (the “Convertible Notes Payable”) issued in June 2021, $89,354 for the Cable Car loan, which was partially offset by an increase in interest expense and amortization of the debt discount of $421,830 for the Lynrock Lake Term Loan.

Current wording

Interest expense, net decreased by $1,514,301 to $1,635,014 for the nine months ended September 30, 2025 from $3,149,315 for the nine months ended September 30, 2024. The decrease is primarily driven by the extinguishment of the Yorkville Note and the Cable Car loan in February 2025, resulting in decreases in interest expense and amortization of the debt discount of $1,959,944 for the Yorkville Note, $198,060 for the Cable Car loan in the 2025 period, a decrease in $221,857 interest from the private secured convertible bridge financing extinguished in 2024, partially offset by an increase in interest expense and amortization of the debt discount of $943,073 for the Lynrock Lake Term Loan.

Previous wording

Since our inception, we have incurred significant operating losses and negative cash flows. As of June 30, 2025 and December 31, 2024, we had an accumulated deficit of $47,078,042 and $31,940,527, respectively. As of June 30, 2025 and December 31, 2024, we had cash and restricted cash and cash equivalents of $2,042,180 and $1,192,104, respectively. Our primary uses of cash are for general working capital requirements, and capital expenditures. Cash flows from operations have been historically negative as we invested in product development, clinical trials, and manufacturing. We expect to be cash flow negative for the foreseeable future, although we may have quarterly results where cash flows from operations are positive.

Current wording

Since our inception, we have incurred significant operating losses and negative cash flows. As of September 30, 2025 and December 31, 2024, we had an accumulated deficit of $51,635,448 and $31,940,527, respectively. As of September 30, 2025 and December 31, 2024, we had cash and restricted cash and cash equivalents of $1,735,400 and $1,192,104, respectively. Our primary uses of cash are for general working capital requirements, and capital expenditures. Cash flows from operations have been historically negative as we invested in product development, clinical trials, and manufacturing. We expect to be cash flow negative for the foreseeable future, although we may have quarterly results where cash flows from operations are positive.

Previous wording

90 days to support the delivery of MOQs under the Amended Distribution Agreement. On February 26, 2025, we entered into the Credit Agreement that provides the Lynrock Lake Term Loan with Lynrock Lake for a term loan in the aggregate principal amount of $10.1 million and repaid the secured Cable Car Note, and fully settled its obligations under the Yorkville Note and terminated the Yorkville SEPA by paying $3.0 million in cash and issuing a 5-year warrant for 15 million shares. Net of these payments, we had $5.4 million of net proceeds for working capital purposes. On April 24, 2025, we received an additional $500,000 from related persons in exchange for the issuance of shares of common stock plus warrants for the purchase of common stock in another Private Investment in Public Entity (“PIPE”) for working capital purposes. On May 12, 2025, we entered into a subscription agreement for another PIPE investment in an amount of approximately $200,000 that closed on May 12, 2025, pursuant to which we will issue shares of common stock plus warrants for the purchase of common stock. The proceeds of this PIPE investment will be used for working capital purposes. We believe that the cash received for the Lynrock Lake Term Loan and from the related persons in the April 2025 and May 2025 PIPE investments, and the additional revenue anticipated from MOQs per the Amended Distribution Agreement will be sufficient to fund our current operating plan for at least the next 12 months.

Current wording

We and NXC entered into Amended Distribution Agreement, as amended on March 28, 2025, which provides us with MOQs that could result in cash inflows of up to $18.0 million in 2025 and $27.0 million in 2026. Our Canon Manufacturing Agreement with CMSC provides us the ability to scale manufacturing with favorable payment terms of net 90 days to support the delivery of MOQs under the Amended Distribution Agreement. On February 26, 2025, we entered into the Credit Agreement that provides the Lynrock Lake Term Loan with Lynrock Lake for a term loan in the aggregate principal amount of $10.1 million and repaid the secured Cable Car Note, and fully settled its obligations under the Yorkville Note and terminated the Yorkville SEPA by paying $3.0 million in cash and issuing a 5-year warrant, which if the Reverse Stock Split had occurred prior to the time of such issuance, would have been warrants for 5,000,071 shares. Net of these payments, we had $5.4 million of net proceeds for working capital purposes. On April 24, 2025, we received an additional $500,000 from related persons in exchange for the issuance of shares of common stock plus warrants for the purchase of common stock in the First Private Placement for working capital purposes. On May 12, 2025, we entered into a subscription agreement for the Second Private Placement in an amount of approximately $200,000 that closed on May 12, 2025, pursuant to which we issued shares of common stock plus warrants for the purchase of common stock. The proceeds of the Second Private Placement will be used for working capital purposes.

Previous wording

• If on any date we or any of our subsidiaries will receive any cash proceeds from any Extraordinary Receipt (as defined in the Credit Agreement) in an amount equal to or exceeding $250,000 in the aggregate, we shall prepay the term loan within five business days of receipt of such cash proceeds, in an amount equal to 100% percent of the cash proceeds of such Extraordinary Receipt;

Current wording

• If on any date we or any of our subsidiaries will receive any cash proceeds from any Extraordinary Receipt (as defined in the Credit Agreement) in an amount equal to or exceeding $250,000 in the aggregate, we shall prepay the term loan within 5 business days of receipt of such cash proceeds, in an amount equal to 100% percent of the cash proceeds of such Extraordinary Receipt;

Previous wording

Furthermore, in connection with the Lynrock Lake Term Loan, we issued to Lynrock Lake, pursuant to the terms of a Warrant to Purchase common stock, the Lynrock Lake 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 we issue 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 fair value of the Lynrock Warrant at issuance amounted to $16,496,084.

Current wording

Furthermore, in connection with the Lynrock Lake Term Loan, we issued to Lynrock Lake, pursuant to the terms of a Warrant to Purchase common stock, the Lynrock Lake Warrant to purchase 20,333,623 shares of common stock at an exercise price of $1.20 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 we issue shares of common stock (or derivative securities) at a price that is either less than the $1.20 exercise price or the fair market value of a share of common stock from the immediately prior trading day. The fair value of the Lynrock Warrant at issuance amounted to $16,496,084.

Previous wording

Upon issuance of the Lynrock Lake Term Loan, we recorded a loss of $6,640,384, including debt issuance costs of $244,300, in other income (expense), net within the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2025.

Current wording

Upon issuance of the Lynrock Lake Term Loan, we recorded a loss of $6,640,384, including debt issuance costs of $244,300, in other income (expense), net within the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2025.

Previous wording

As of June 30, 2025, the outstanding amount of the Lynrock Lake Term Loan was $71,601 net of the unamortized debt discount of $10,028,399, and accrued interest of $350,229.

Current wording

As of September 30, 2025, the outstanding amount of the Lynrock Lake Term Loan was $5,272,879 net of the unamortized debt discount of $9,827,121, and accrued interest of $670,193.

Previous wording

In July 2020, we issued three convertible notes to three of its stockholders for advances up to $3,500,000 in principal (the “2020 Notes”) and bearing annual interest of 5% on any amounts drawn. An additional note was issued in March 2022 as part of the 2020 Notes, but with an annual interest rate of 8%. All principal and interest payments are due on or before July 1, 2025. The 2020 Notes are convertible, at the holder’s option, into shares of common stock at the lower of $14.59 per share or the offering price in a financing of at least $5,000,000 in equity from unaffiliated parties. As of June 30, 2025, an aggregate of 259,052 shares of common stock would be issued if the entire principal and interest under the 2020 Notes was converted. In connection with the issuance of the Lynrock Lake Term Loan, on February 26, 2025, the maturity date on the these convertible notes was extended to October 21, 2027.

Current wording

In July 2020, we issued three convertible notes to three of its stockholders for advances up to $3,500,000 in principal (the “2020 Notes”) and bearing annual interest of 5% on any amounts drawn. An additional note was issued in March 2022 as part of the 2020 Notes, but with an annual interest rate of 8%. All principal and interest payments are due on or before July 1, 2025. The 2020 Notes are convertible, at the holder’s option, into shares of common stock at the lower of $43.77 per share or the offering price in a financing of at least $5,000,000 in equity from unaffiliated parties. As of September 30, 2025, an aggregate of 88,402 shares of common stock would be issued if the entire principal and interest under the 2020 Notes was converted. In connection with the issuance of the Lynrock Lake Term Loan, on February 26, 2025, the maturity date on the these convertible notes was extended to October 21, 2027.

Previous wording

As of June 30, 2025 and December 31, 2024, the outstanding amount of the 2020 Notes was $3,143,725 and accrued interest of $635,815 and $550,430, respectively.

Current wording

As of September 30, 2025 and December 31, 2024, the outstanding amount of the 2020 Notes was $3,190,112 and $3,143,725, respectively, and accrued interest of $679,215 and $550,430, respectively.

Previous wording

Net cash used in operating activities was $4,978,822 for the six months ended June 30, 2025 as compared to $6,955,081 for the six months ended June 30, 2024. The primary use of our cash was to fund research and development and general and administrative expenses. Net cash used for the six months ended June 30, 2025 consisted of a net loss of $15,137,515, adjusted for non-cash expenses primarily including depreciation and amortization of $75,924, stock-based compensation of $319,926, loss on issuance of the Lynrock Lake Term Loan of $6,640,384, debt extinguishment loss of $2,033,666, debt modification expense of $90,000, non-cash interest of $547,820, non-cash operating lease income of $18,725, increase in fair value of warrant liability of $3,501,079, decrease in fair value of derivative liability of $101,300, decrease in fair value of earnout liability of $160,000, and the net change in operating assets and liabilities of $2,770,081. The net change in operating assets and liabilities was primarily due an increase in accounts receivable of $3,584,191, an increase in prepaid expenses and other current assets of $1,226,752, and an increase in inventory of $90,379, partially offset primarily by an increase in accrued expenses and other current liabilities of $938,963, an increase in accounts payable of $771,743, and an increase in other liabilities of $435,614.

Current wording

Net cash used in operating activities was $5,857,572 for the nine months ended September 30, 2025 as compared to $8,806,402 for the nine months ended September 30, 2024. The primary use of our cash was to fund research and development and general and administrative expenses. Net cash used for the nine months ended September 30, 2025 consisted of a net loss of $19,694,921, adjusted for non-cash expenses primarily including depreciation and amortization of $115,474, stock-based compensation of $518,721, loss on issuance of the Lynrock Lake Term Loan of $6,640,384, debt extinguishment loss of $2,080,053, debt modification expense of $90,000, non-cash interest of $749,097, non-cash operating lease income of $31,012, increase in fair value of warrant liability of $3,581,122, decrease in fair value of derivative liability of $101,300, increase in fair value of earnout liability of $2,070,000, and a net decrease of $1,875,190 from changes in operating assets and liabilities. The net change in operating assets and liabilities was primarily due an increase in accounts receivable of $3,176,587, an increase in prepaid expenses and other current assets of $298,286, and an increase in inventory of $2,101,508, partially offset primarily by an increase in accrued expenses and other current liabilities of $1,856,098, an increase in accounts payable of $1,071,550, and an increase in other liabilities of $798,979.

Previous wording

Net cash used for the six months ended June 30, 2024 consisted of a net loss of $1,877,464, adjusted for non-cash expenses including depreciation and amortization of $184,775, stock-based compensation of $38,984, warrant modification expense of $200,513, fair value of common stock issued in exchange for services and in connection with non-redemption agreements of $3,718,349, issuance of common stock in connection with a stock subscription agreement of $206,000, non-cash interest of $1,200,670, non-cash operating lease expense of $11,876, decrease in fair value of warrant liability of $190,819, decrease in fair value of derivative liability of $4,712,800, decrease in fair value of earnout liability of $2,920,000, and the net change in operating assets and liabilities of $2,792,703. The net change in operating assets and liabilities was primarily due an increase accounts receivable of $669,138, an increase in prepaid expenses and other current assets of $553,691, a decrease in accounts payable of $2,280,535, a decrease in other liabilities of $377,772, and a decrease in deferred revenue of $315,873, partially offset by a decrease in inventory of $1,352,734, and an increase in accrued expenses and other liabilities of $51,572.

Current wording

Net cash used for the nine months ended September 30, 2024 consisted of a net loss of $5,496,958, adjusted for non-cash expenses including depreciation and amortization of $204,283, stock-based compensation of $166,187, warrant modification expense of $200,513, fair value of common stock issued in exchange for services and in connection with non-redemption agreements of $3,718,349, a loss of $206,000 related to issuance of common stock in connection with a stock subscription agreement, non-cash interest of $2,404,031, non-cash operating lease income of $20,652, decrease in fair value of warrant liability of $199,624, decrease in fair value of derivative liability of $4,800,000, decrease in fair value of earnout liability of $2,970,000, and a $2,219,821 decrease from net changes in operating assets and liabilities. The net change in operating assets and liabilities was primarily due to an increase in accounts receivable of $256,886, an increase in prepaid expenses and other current assets of $459,804, a decrease in accounts payable of $2,061,853, a decrease in accrued expenses and other liabilities of $768,614, and a decrease in deferred revenue of $327,778, partially offset by a decrease in inventory of $1,525,857, and an increase in other liabilities of $129,257.

Previous wording

Net cash used in investing activities was $46,818 for the six months ended June 30, 2025 as compared to $26,977 for the six months ended June 30, 2024. The use of net cash used in investing activities for both periods was related to the purchase of property and equipment.

Current wording

Net cash used in investing activities was $46,818 for the nine months ended September 30, 2025 as compared to $34,590 for the nine months ended September 30, 2024. The use of net cash used in investing activities for both periods was related to the purchase of property and equipment.

Previous wording

During the six months ended June 30, 2025, net cash provided by financing activities was $5,875,716, primarily due to $10,000,000 of net proceeds received from issuance of long-term debt related to the Lynrock Lake Term Loan and proceeds from the sale of common stock and warrants of $700,000, partially offset by the repayment of long-term debt of

Current wording

During the nine months ended September 30, 2025, net cash provided by financing activities was $6,447,686 primarily due to $15,000,000 of net proceeds received from issuance of long-term debt related to the Lynrock Lake Term Loan, net proceeds from the sale of common stock and warrants of $679,241, proceeds from warrant exercises of $531,622, and proceeds from stock option exercises of $74,839, partially offset by the repayment of long-term debt of $4,688,016 related to the Yorkville Note, Cable Car Note, warrant repurchase payment of $5,000,000 to Yorkville, and payment of $150,000 for deferred issuance costs.

Previous wording

During the six months ended June 30, 2024, net cash provided by financing activities was $11,398,512, primarily due to $10,525,000 of net proceeds received from issuance of long-term debt related to the Yorkville Pre-Paid Advance and the Cable Car Note, net proceeds of $1,238,530 received from the business combination of QT Imaging and GigCapital5 (the “Merger”), and cash proceeds of $500,000 received from issuance of common stock pursuant to a subscription agreement, partially offset by repayment of the Bridge Loan of $800,000, and repayments against the PPP Loans of $65,018.

Current wording

During the nine months ended September 30, 2024, net cash provided by financing activities was $10,220,475, primarily due to $10,525,000 of net proceeds received from issuance of long-term debt related to the Yorkville Pre-Paid Advance and the Cable Car Note, cash proceeds of $500,000 received from issuance of common stock pursuant to a subscription agreement, and net proceeds of $1,238,530 received from the business combination of QT Imaging, Inc. and GigCapital5, Inc. (the “Merger”), partially offset by repayment of debt of $2,043,055.

Previous wording

See Note 1 to the unaudited condensed consolidated financial statements for a discussion of recently adopted accounting standards.

Current wording

See Note 1 to the unaudited condensed consolidated financial statements for a discussion of recent accounting pronouncements.