QT Imaging Holdings Announces $1M Insiders PIPE Investment

Rhea-AI Summary

QT Imaging Holdings (NASDAQ:QTI) has secured a $1M PIPE investment from company insiders, led by Board Chairman Dr. Avi Katz and CEO Dr. Raluca Dinu, along with four other board members. The deal includes the purchase of 4,383,558 unregistered shares at $0.584 per share with matching warrants at $0.672. Additionally, GigAcquisitions5, agreed to cancel a $1.56M promissory note. The share price represents a 10% premium over the 5-day VWAP. The financing, expected to close by November 29, 2024, will provide working capital as bridge funding while pursuing strategic partnerships and commercialization plans.

Positive

• Secured $1M in new funding from insider investment
• Cancellation of $1.56M promissory note debt
• Share price set at 10% premium to 5-day VWAP
• No banking fees associated with the placement

Negative

• Need for bridge funding indicates potential cash flow concerns
• Significant share dilution through issuance of 4,383,558 new shares
• Additional potential dilution from warrant exercise

Insights

Financial Analyst

This insider PIPE investment signals both confidence and potential concerns. The $1M cash injection plus $1.56M debt cancellation provides essential working capital, but the terms reveal interesting dynamics. The $0.584 share price, while showing a 10% premium to recent trading, comes with dilutive warrants at $0.672. The involvement of multiple board members, including the Chairman and CEO, demonstrates internal faith but also suggests possible challenges in securing external funding. The bridge funding nature indicates near-term cash needs while pursuing strategic partnerships.

For a company with an $11.8M market cap, this financing represents significant dilution. The timing, set for late 2024 and the mention of bridge funding while pursuing strategic partnerships suggests ongoing negotiations that require interim capital support. Investors should monitor cash burn rate and progress with the mentioned strategic partner, as these will be important for long-term viability.

NOVATO, Calif.--(BUSINESS WIRE)-- QT Imaging Holdings, Inc. (NASDAQ:QTI) a medical device company engaged in research, development, and commercialization of innovative body imaging systems (the “Company” or “QTI”) is pleased to announce an insiders private investment in public equities (PIPE) investment of $1.0 million in new funding, led by the Chairman of the Board, Dr. Avi Katz, and the Chief Executive Officer, Dr. Raluca Dinu, with participation of an additional four QTI Board of Directors members (the “Investors”). In addition, one existing creditor of the Company managed by Dr. Katz, GigAcquisitions5, LLC, agreed to surrender to the Company and cancel a promissory note that it holds with a principal amount of $1.56 million as an additional Investor. Under the terms of the securities purchase agreement entered into today, the Investors agreed to purchase 4,383,558 unregistered shares of common stock of QTI at a price of $0.584 per share, together with 4,383,558 warrants with an exercise price of $0.672 per share. The price per share represents a premium of approximately 10% to QTI common stock’s volume weighted average trading price over the last 5 days prior to today’s investment. The closing of the financing is anticipated to be on or before November 29, 2024, and it was placed directly by QTI, thus it included no associated banking fees. The proceeds are aimed solely at providing working capital for the Company as sufficient bridge funding while it continues to pursue its agreements with its previously announced strategic partner, and it successfully executes on its commercialization growth plan.

“Today’s PIPE investment proves the continuous trust of the entire QTI Board of Directors in the Company’s vision and execution, and its full commitment to supporting the QTI team to bringing its safe and accurate breast imaging technology to full commercialization,” said Dr. Avi Katz, Chairman of Board of Directors.

About QT Imaging Holdings, Inc.

QT Imaging Holdings, Inc. is a public (NASDAQ: QTI) medical device company engaged in research, development, and commercialization of innovative body imaging systems using low frequency sound waves. QT Imaging Holdings, Inc. strives to improve global health outcomes. Its strategy is predicated upon the fact that medical imaging is critical to the detection, diagnosis, and treatment of disease and that it should be safe, affordable, accessible, and centered on the patient’s experience. For more information on QT Imaging Holdings, Inc., please visit the company’s website at www.qtimaging.com.

Breast Acoustic CT™ is a trademark of an affiliate of QT Imaging Holdings, Inc.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as “will,” and “expect,” or the negative thereof or comparable terminology, and include (without limitation) statements regarding the closing of the financing, the status of negotiation of agreements with a strategic partner, plans for QT Imaging Holdings, new product development and introduction, and product sales growth and projected revenues. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. These risks include, but are not limited to: research results from the use of the Breast Acoustic CT™ Scanner, the ability of QT Imaging Holdings to sell and deploy the Breast Acoustic CT™ Scanner, the ability to extend product offerings into new areas or products, the ability to commercialize technology, unexpected occurrences that deter the full documentation and “bring to market” plan for products, trends and fluctuations in the industry, changes in demand and purchasing volume of customers, unpredictability of suppliers, the ability to attract and retain qualified personnel and the ability to move product sales to production levels. Additional factors that could cause actual results to differ are discussed under the heading “Risk Factors” and in other sections of QT Imaging Holding’s (and its predecessor, GigCapital5, Inc.) filings with the SEC, and in its other current and periodic reports filed or furnished from time to time with the SEC. All forward-looking statements in this press release are made as of the date hereof, based on information available to QT Imaging Holdings as of the date hereof, and QT Imaging Holdings assumes no obligation to update any forward-looking statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241113058868/en/

For media inquiries, please contact:

Stas Budagov

Chief Financial Officer

Stas.Budagov@qtimaging.com

Source: QT Imaging Holdings, Inc.

FAQ

What is the size of QT Imaging's (QTI) recent PIPE investment?

QT Imaging (QTI) secured a $1M PIPE investment from company insiders, including board members and executives.

What is the share price for QTI's PIPE investment?

The shares were priced at $0.584 per share, representing a 10% premium to the 5-day volume weighted average trading price.

How many warrants were issued in QTI's PIPE investment?

QTI issued 4,383,558 warrants with an exercise price of $0.672 per share.

When is QTI's PIPE investment expected to close?

The financing is anticipated to close on or before November 29, 2024.