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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

FORM 10-K

______________________________________

(Mark One)


x			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number 333-279382

______________________________________

QT Imaging Holdings, Inc.

______________________________________

(Exact Name of Registrant as Specified in its Charter)


Delaware						86-1728920
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

Dr. Raluca Dinu

Chief Executive Officer

3 Hamilton Landing, Suite 160,

Novato, CA 94949

Telephone: (650) 276-7040

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, par value $0.0001 per share			~~QTI1~~QTI			The Nasdaq Stock Market LLC

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No x

_________________

1QT Imaging Holdings, Inc. (the “Company”) has received written notice from The Nasdaq Stock Market LLC (“Nasdaq”) that it has commenced proceedings to delist the Company’s common (ticker symbol: QTI) from Nasdaq, and suspended trading in the Company’s common stock pending the completion of such proceedings. As a result, effective January 28, 2025, the Company’s common stock commenced trading in the over‑the-counter market under the symbol “QTIH”, and the trading of the common stock was upgraded to the OTCQB Venture Market on March 11, 2025.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price of the registrant’s common stock on ~~The~~the ~~Nasdaq~~OTCQB ~~Stock~~Venture Market ~~LLC~~ as of the last business day of the registrant’s most recently completed second fiscal quarter, June 30, ~~2024~~2025, was $932.25 million. Shares of common stock beneficially owned by each executive officer, director, and holder of more than 10% of the registrant’s common stock have been excluded in that such persons or entities may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date., 2712,~~653~~042,~~210~~500 shares of common stock were outstanding at March 2824, ~~2025~~2026.

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			Page
Cautionary Statement About Forward-Looking Statements			ii
Summary of Risk Factors			iviii
Part I:
Item 1: Business			1
Item 1A: Risk Factors			4934
Item 1B: Unresolved Staff Comments			9983
Item 1C: Cybersecurity			9683
Item 2: Properties			~~100~~83
Item 3: Legal Proceedings			~~100~~83
Item 4: Mine Safety Disclosures			~~100~~84
Part II
Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities			~~101~~85
Item 6: Reserved			~~101~~85
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations			~~101~~85
Item 7A: Quantitative and Qualitative Disclosures About Market Risk			~~118~~101
Item 8: Financial Statements and Supplementary Data			F-1
Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			111
Item 9A: Controls and Procedures			111
Item 9B: Other Information			112
Item 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspection			112
Part III
Item 10: Directors, Executive Officers and Corporate Governance			113
Item 11: Executive Compensation			~~121~~122
Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			~~129~~132
Item 13: Certain Relationships and Related Transactions, and Director Independence			~~131~~134
Item 14: Principal Accountant Fees and Services			~~135~~138
Part IV
Item 15. Exhibits, Financial Statement Schedules			~~136~~139
Item 16: Form 10-K Summary			~~140~~144
Signatures			~~141~~145

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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements. All statements, other than statements of present or historical fact included in or incorporated by reference in this annual report, regarding ~~the~~ future financial performance of QT Imaging Holdings, Inc. (the “Company,” “we,” “our,” “us” or “QT Imaging”), as well as the Company’s strategy, future operations, financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this annual report, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward‑-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations, assumptions, hopes, beliefs, intentions and strategies regarding future events and are based on currently available information as to the outcome and timing of future events. The Company cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company, incident to its business.

These forward-looking statements are based on information available as of the date of this annual report, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. AsAccordingly, aforward-looking ~~result~~statements ofin athis ~~number~~annual ofreport ~~known~~ and ~~unknown~~in ~~risks~~any ~~and~~document ~~uncertainties,~~incorporated herein by reference should not be relied upon as representing the Company’s ~~actual~~views ~~results~~as orof ~~performance~~any ~~may~~subsequent bedate, ~~materially~~and ~~different~~the ~~from~~Company ~~those~~does ~~expressed~~not orundertake ~~implied~~any byobligation ~~these~~to update forward-looking statements. ~~Some~~to ~~factors~~reflect ~~that~~events ~~could~~or ~~cause~~circumstances ~~actual~~after ~~results~~the todate ~~differ~~they ~~include:~~were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

~~•the~~As ~~Company’s~~a ~~ability~~result toof ~~recognize~~a ~~the~~number ~~anticipated benefits~~ of ~~the~~known ~~Business~~and ~~Combination~~unknown ~~(as~~risks ~~defined~~and ~~below)~~uncertainties, ~~which~~the ~~may~~Company’s beactual ~~affected~~results ~~by,~~or ~~among~~performance ~~other~~may ~~things,~~be ~~competition~~materially ~~and~~different ~~the~~from ~~ability~~those ofexpressed ~~the~~or ~~Company~~implied toby ~~grow~~these ~~and~~forward-looking ~~manage~~statements. ~~growth~~Some ~~profitably~~factors ~~following~~that ~~the~~could ~~closing~~cause ofactual ~~the~~results ~~Business~~to ~~Combination;~~differ include:

•changes in applicable laws or regulations;

•the outcome of any legal proceedings against the Company;

•the financial and business performance of the Company, including financial projections and business metrics and any underlying assumptions thereunder;

•the Company’s ability to successfully and timely develop, sell and expand its technology and products, and otherwise implement its growth strategy;

•risks relating to the Company’s operations and business, including information technology and cybersecurity risks, loss of customers and deterioration in relationships between the Company and its employees;

•risks related to increased competition;

•risks that the Company experiences as difficulties in managing its growth and expanding operations;

•the impact of geopolitical, macroeconomic and market conditions;

•the ability to successfully select, execute or integrate future acquisitions into the business; and

•other risks and uncertainties set forth in this annual report in the section entitled “Risk Factors” beginning on page 4934.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. Some of these risks and uncertainties may in the future be amplified by events we do not expect or cannot predict. Additionally, new risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, the forward‑looking statements in this annual report may not prove to be accurate.

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Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this annual report, whether as a result of any new information, future events, changed circumstances or otherwise. You should read this annual report completely, and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

iii

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SUMMARY OF RISK FACTORS

The below summary of risk factors provides an overview of many of the risks we are exposed to in the normal course of our business activities. As a result, the below summary risks do not contain all of the information that may be important to you, and you should read the summary risks together with the more detailed and complete discussion of risks set forth under the heading “Risk Factors” in Part I, Item 1A of this annual report, as well as elsewhere in this annual report. Additional risks, beyond those summarized below or discussed elsewhere in this annual report, may apply to our activities or operations as currently conducted or as we may conduct them in the future or in the markets in which we operate or may in the future operate.

Consistent with the foregoing, we are exposed to a variety of risks, including risks associated with the following:

Risks ~~Associated~~Related ~~with~~to Our Business, Financial Condition and Need for Additional Capital

•We have incurred significant operating losses in the past and may never achieve or maintain profitability.

•We have a limited operating history with our current offerings, which makes it difficult to evaluate our current and future business prospects and increases the risk of your investment.

•If we are unable to attract new customers on a cost-effective basis, our business will be harmed.

•We may be unable to successfully execute on our growth initiatives, business strategies, or operating plans.

•The forecasts and projections herein are based upon certain assumptions, analyses, and estimates. If these assumptions, analyses, or estimates prove to be incorrect or inaccurate, our actual results may differ materially from those forecasted or projected.

•If we fail to attract and retain qualified personnel, our business could be harmed.

•Our management team has a limited history working together operating the Company and, as a result, our past results may not be indicative of future operating performance.

•Our ability to introduce new products and features is dependent on adequate development resources. If we do not adequately fund our development efforts, we may not be able to compete effectively and our business and operating results may be harmed.

•We rely on internet infrastructure, bandwidth providers, data center providers, other third parties, and our own systems for providing solutions to our customers, and any failure or interruption in the services provided by these third parties or our own systems could expose us to litigation and negatively impact our relationships with customers, adversely affecting our brand and our business.

•We may not successfully develop or introduce new and enhanced products that achieve market acceptance, or successfully integrate acquired products or services with our existing products, and our business could be harmed and our revenue could suffer as a result.

•If we successfully commercially launch the QT Scanner 2000 Model A, (the “QT Breast Scanner”), products under development that are cleared by the U.S. Food and Drug Administration (the “FDA”) and other regulatory agencies, and they do not achieve widespread market acceptance, we will not be able to generate the revenue necessary to support our business.

•Recent changes in the United States related to payment policies for imaging procedures could have a negative impact on the utilization of our imaging services.

•In order to support the growth of our business, we may need to incur additional indebtedness under our credit facilities or seek capital through new equity or debt financings, which sources of additional capital may not be available to us on acceptable terms or at all.

Risks ~~Associated~~Related ~~with~~to Healthcare Industry Shifts and Government Regulation

•Our business is subject to extensive pre-market and post-market government regulations and if we fail to comply with present or future regulator requirements that are applicable, it may subject our company to enforcement iii

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•Our business is subject to extensive pre-market and post-market government regulations and if we fail to comply with present or future regulatory requirements that are applicable, it may subject our company to enforcement action by the FDA which may have a material adverse effect our business, financial condition and results of operations.

•Our products must be manufactured in accordance with federal, state and foreign regulations as to the methods used in, and the facilities used for, the manufacture of our products and if we, or our third-party manufacturers do not take the necessary steps to comply with applicable regulations, it could result in delays in the delivery of our products which could significantly and negative affect the supply of our products.

.Risks ~~Associated~~Related ~~with~~to ~~our~~Our Intellectual Property

•Our business relies upon a combination of patents and trade secrets to protect the intellection property related to our proprietary technologies and if we are unable to obtain and maintain intellectual property protections it could have an adverse impact on our market competitiveness and business prospects.

•Patents have a limited life span and given the amount of time required for the development, testing and regulatory review of products, patents protecting our future products might expire before or shortly after we commercialize these products which could result in us not having sufficient rights to exclude others from commercializing products similar or identical to ours for a sufficient amount of time, and as a result, we may not be able to obtain adequate protection of our patent portfolio.

Risks ~~Associated~~Related ~~with~~to Our Management

•We are highly dependent on key members of our executive management team and the loss of members of our management team could result in a delay in the implementation of our business plan and plan of operations, which could result in a material adverse effect on our business, result of operations and financial condition.

•Most of the members of our management team have limited or no experience managing a publicly traded company and may not successfully or efficiently manage our transition to being a public company subject to regulatory oversight and reporting obligations under U.S. federal securities laws and the scrutiny of our investors and these obligations could divert their attention away from the management of our business, which could affect our business, financial condition,results of operations and prospects.

Risks ~~Associated~~Related ~~with~~to Our Common Stock and Other Securities

•It is not currently anticipated that we will pay dividends on shares of common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the market price of common stock.

•Future sales of common stock may depress their stock price.

•We could become subject to product liability claims, product recalls, and warranty claims that could be expensive, divert management’s attention and harm our business reputation and financial results.

•The public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.

•We may redeem unexpired public warrants prior to their exercise at a time that is disadvantageous to the warrant holder, thereby making the public warrants worthless.

•We may issue additional shares of common stock or preferred stock, including under our equity incentive plan. Any such issuances would dilute the interest of our stockholders and likely present other risks.

•Our common stock will no longer be listed on the Nasdaq Global Market which may adversely affect our ability to raise additional financing through the public or private sale of equity securities, the ability of investors to trade our securities and the value and liquidity of our common stock.iv

•Our common stock is now quoted on the OTC Markets OTCQB Venture Market tier which is a volatile market that could depress the market price of our common stock and have an adverse impact on our ability to raise capital in the future for reasons unrelated to our operating performance.

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Part I

Item 1: Business

The following discussion reflects the business of the Company. In this section, “we,” “us,” “our,” “the Company” or “QT Imaging” below generally refers to QT Imaging Holdings, Inc. and its subsidiaries.

Background of the Business Combination

On December 8, 2022, GigCapital5, Inc. (“GigCapital5”), our legal predecessor company and a special purpose acquisition company, which was incorporated in Delaware in 2021, entered into athe ~~business combination agreement (“~~Business Combination Agreement”) with its wholly owned subsidiary, QTI Merger Sub, Inc., ~~a subsidiary of GigCapital5~~ (“Merger Sub”), and QT Imaging, Inc. When the transactions contemplated ~~under~~by the Business Combination Agreement (the “Business Combination”) closed on March 4, 2024 ~~(the “Business Combination”)~~, Merger Sub merged with and into QT Imaging, Inc., with QT Imaging, Inc. the surviving company in ~~the~~such ~~Business Combination~~merger, and after giving effect to the Business Combination, QT Imaging, Inc. became a wholly owned subsidiary of GigCapital5, which was renamed as QT Imaging Holdings, Inc.

QT Imaging, Inc. was incorporated in Delaware on December 31, 2020 by converting from its predecessor, QT Ultrasound LLC (“QT Ultrasound”), which was a limited liability company formed in 2012 to focus on the research, development, and commercialization of innovative body imaging systems using low energy sound. On that date, QT ~~Imaging,~~Ultrasound ~~Inc.~~ changed its name from QT Ultrasound LLC to QT Imaging, Inc. and revoked the limited liability company election status by the incorporation.

QT Imaging ~~Holdings, Inc.~~ is headquartered in Novato, California.

Overview

A Novel Body Imaging Technology

The Company—with the support of nearly $181 million in financial support from the U.S. National Institutes of Health—has developed a novel, comprehensive body imaging technology ~~that~~designed ~~has~~to ~~high~~produce high-resolution, ~~high~~volumetric ~~sensitivity,~~images ~~high~~of ~~specificity,~~breast ~~high~~tissue ~~positive~~using ~~and~~low-energy ~~negative~~transmitted ~~predictive values and is safe and inexpensive~~sound. The technology is based on ultra-low frequency transmitted and reflected sound waves and ~~uses~~utilizes a ~~one-of-a-kind~~proprietary ~~novel~~ sound back-scatter design ~~and~~together with inverse-scattering reconstruction algorithms to ~~create~~generate ~~its~~quantitative three-dimensional images. of tissue properties.

The Company is a medical device company founded in 2012 and engaged in the research, development, and commercialization of innovative body imaging systems using low energy sound. We believe that medical imaging, and in particular 3D imaging, is critical to the detection, diagnosis, and treatment of disease and that it should be safe, affordable and accessible. Our goal is to improve global health outcomes through the development and commercialization of imaging devices that address critical healthcare challenges with accuracy and precision.

The current standard of care for imaging in breast cancer screening, diagnosis, and treatment is far from satisfactory. Generally, the process starts with X-ray mammography, the primary screening tool for women. Mammography uses radiation, which in sufficient cumulative doses can increase the risk of cancer; isand ~~uncomfortable~~requires tobreast ~~painful~~compression, ~~for~~which ~~patients~~can asbe ituncomfortable ~~involves~~or ~~breast~~painful ~~compression~~for patients. Callbacks for adjunct screening and diagnosis include ultrasound, magnetic resonance imaging (“MRI”), and may include biopsies. This process is expensive, time consuming, and can be ~~trying~~stressful for women. ~~Also~~In addition, the ~~use~~reliance ofon ~~three~~multiple imaging modalities inreflects the ~~process~~limitations ~~speaks to the weakness~~ of any ~~one~~single modality in adequately screening for and diagnosing breast cancer.

The Company’s opportunity in breast imaging is to ~~speed~~shorten the time to diagnosis for women with cancer, and to provide ~~assurance~~reassurance for women who do not have the disease ~~with~~while adelivering ~~better~~an improved patient experience and lower cost ~~than~~compared to the current standard of care.

The ~~current QT Breast Scanner developed by the~~ Company’s istechnology aprovides ~~Class~~automated II3D ~~device~~imaging ~~subject to premarket notification and clearance under Section 510(k)~~ of the ~~Federal~~breast ~~Food,~~without ~~Drugs,~~ionizing radiation and ~~Cosmetics~~without ~~Act~~breast ~~(“FDCA”). On August 23~~compression, ~~2016,~~enabling QThigh-resolution ~~Ultrasound~~volumetric ~~submitted~~imaging ~~a Section 510(K) Summary of Safety~~ and ~~Effectiveness~~quantitative ~~application~~analysis ~~for the QT Breast Scanner in accordance with 21 CFR 807.92 under 510(K) Number K162372. As part~~ of ~~meeting~~breast ~~the general requirements for basic safety and essential performance of the QT Breast Scanner (formerly, QT Ultrasound Breast Scanner) pursuant to AAMI~~ tissue.

1The ~~This~~current isQT ~~comprised~~Breast ofScanner, ~~previous grants including grants to~~ the ~~University~~Breast ofAcoustic ~~Utah~~CT™ ~~($811~~scanner,~~000)~~ ~~and~~developed by the ~~current~~Company ~~five~~is ~~year~~a ~~grant~~Class ~~1RO1CA273700~~II ~~from~~device ~~the~~subject ~~U.S.~~to ~~National~~premarket ~~Institute~~notification ofand ~~Health~~clearance ~~for~~under ~~$2.58~~Section ~~million~~ 510(~~Quantitative~~k) ~~Ultrasound Monitoring~~ of ~~Breast~~the ~~Cancer~~Food, ~~Therapies)~~Drug, ~~which~~and ~~was~~Cosmetic ~~awarded~~Act to(the 3“FDCA”). ~~institutions:~~On ~~University~~August of23, ~~Illinois~~2016, ~~University~~QT ofUltrasound ~~Toronto~~submitted a Section 510(~~Sunnybrook~~k) ~~and~~Summary QTof ~~Imaging,~~Safety ~~which~~and ~~received~~Effectiveness ~~$1.08~~application ~~million~~for of the ~~$2.58~~QT ~~million grant.~~

1 This is comprised of previous grants including grants to the University of Utah ($811 thousand) and the current five year grant 1RO1CA273700 from the U.S. National Institute of Health for $2.58 million (Quantitative Ultrasound Monitoring of Breast Cancer Therapies), which was awarded to 3 institutions: University of Illinois, University of Toronto (Sunnybrook) and QT Imaging, which received $1.08 million of the $2.58 million grant.

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Breast Scanner in accordance with 21 CFR 807.92 under 510(k) Number K162372. As part of meeting the general requirements for basic safety and essential performance of the QT Breast Scanner (formerly, QT Ultrasound Breast Scanner) pursuant to AAMI ES60601-1:2005/(R)2012 and A1:2012 Medical ~~electrical~~Electrical ~~equipment~~Equipment, testing was conducted by Intertek, an independent testing laboratory, located in Menlo Park, CA. Intertek also conducted applicable testing pursuant to IEC 60601-1-6 Edition 3.1 2013-10-—Medical ~~electrical~~Electrical ~~equipment~~Equipment Part 1-6 General ~~requirements~~Requirements for ~~safety~~Safety—Collateral Standard: Usability. In addition, QT Ultrasound conducted, and Intertek witnessed, all applicable testing pertaining to the requirements for the safety of ultrasonic medical diagnostic and monitoring equipment and to demonstrate compliance with the “Acoustic Output Measurement Standard for Diagnostic Ultrasound Equipment”. This test on acoustic output was pursuant to IEC 60601-2-37 Edition 2.0.2007 —Medical ~~electrical~~Electrical ~~equipment~~Equipment—Part 2-37: Particular ~~requirements~~Requirements for the ~~basic~~Basic ~~safety~~Safety and ~~essential~~Essential ~~performance~~Performance of ~~ultrasonic~~Ultrasonic ~~medical~~Medical ~~diagnostic~~Diagnostic and ~~monitoring~~Monitoring ~~equipment~~Equipment. Finally, system verification testing was conducted to ensure that the QT Breast Scanner met all design and other requirements including but not limited to that no new issues of safety or effectiveness compared to the predicate device, the SoftVue System manufactured by Delphinus Medical Technologies, were raised.

On June 6, 2017, the FDA, in response to the Company’s Section 510(Kk) Summary of Safety and Effectiveness premarket notification, determined that the QT Breast Scanner is substantially equivalent to the predicate device. ~~Our~~under use of the words “safe”, “safety”, “effectiveness”, and “efficacy” in relation to the QT Breast Scanner in this annual report and all other documents related to the Company is limited to the context of the Section 510(Kk) ~~Summary~~Number ~~of Safety and Effectiveness that was reviewed and responded to by the FDA~~K162372.

~~The~~On ~~Cost~~August 31, 2022, the FDA granted a further 510(k) clearance (K220933) for the Company’s QT Scanner 2000 Model A, which enables the system to calculate quantitative measurements of breast fibroglandular tissue volume and ~~Accessibility~~the ratio of ~~Healthcare~~fibroglandular tissue volume to total breast volume based on reflection-mode and transmission-mode ultrasound images. These measurements may assist clinicians in assessing breast density and monitoring changes in breast tissue over time.

~~Medical~~On ~~imaging~~March is10, 2026, the FDA granted an ~~essential~~additional ~~part~~510(k) clearance for an enhanced configuration of ~~clinical~~the ~~diagnosis~~Company’s ~~and~~Breast isAcoustic aCT ~~requirement~~scanner ~~for~~designed ~~making~~to ~~the~~improve ~~best~~imaging ~~treatment~~coverage ~~decisions~~of ~~and~~posterior ~~improving~~breast tissue. The updated configuration incorporates a ~~person’s~~tilted ~~health.~~transmitter ~~Most~~geometry, ~~people~~which inenhances ~~the~~tomographic ~~world~~visualization ~~live~~of inbreast ~~low-resource~~tissue ~~environments~~located ~~and~~near dothe ~~not~~chest ~~have~~wall—an ~~access~~area that can be challenging to ~~advanced~~image ~~medical~~with conventional breast imaging~~—thus~~ ~~the~~approaches. ~~absence~~This ofenhancement ~~high-quality~~expands ~~medical~~the scanner’s imaging incoverage ~~low~~and ~~resource~~supports ~~environments~~more ~~(“LREs”)~~complete isvisualization aof ~~significant~~posterior ~~obstacle~~breast anatomy while continuing to ~~providing~~generate ~~basic~~volumetric ~~health~~tomographic ~~care.~~images using reflection-mode and transmission-mode ultrasound data.

~~Even~~The inCompany's ~~advanced~~Cloud ~~health~~software-as-a-service ~~care~~(“SaaS”) ~~facilities~~platform inwill serve as the ~~U.S.,~~unified ~~where~~delivery ~~adequate~~framework ~~medical~~for ~~imaging~~upcoming isartificial ~~available~~intelligence and machine learning algorithms developed by the Company. Leveraging DICOM-compatible architecture, the ~~cost~~Company ofwill ~~this~~integrate ~~medical~~these ~~imaging~~modules isthrough ~~very~~the ~~high—driving~~cloud upfor ~~healthcare~~quantitative ~~costs~~feature extraction and ~~limiting~~diagnostic ~~accessibility~~decision tosupport. ~~many~~Built ~~people~~on ~~with~~advanced ~~limited~~acoustic ~~income~~signal analysis and volumetric data fusion, ~~high~~the ~~insurance~~algorithms ~~deductibles~~will orbe ~~those~~deployed inthrough ~~LREs~~the cloud infrastructure to enable real-time or ~~rural~~near-real-time ~~areas.~~analysis of imaging data.

This approach will enable future artificial intelligence-driven capabilities, including automated lesion segmentation, volumetric tissue characterization, and computer-aided diagnostic support, to be securely delivered to connected QT Breast Scanners without requiring on-premise software updates. As quantitative biomarkers allow imaging to move beyond detection toward diagnostic and prognostic precision through quantitative imaging, the Company’s goal is to build a biomarker-driven Cloud SaaS platform that evolves the business from a hardware manufacturer into a precision imaging platform combining hardware, software, and cloud-based artificial intelligence modules.

The Purpose of the Company

Most conventional imaging technologies—including X-ray computed tomography (“CT”), MRI, and positron-emission tomography (“PET”)—~~used~~typically ~~in tertiary care~~ require ~~high~~complex ~~energy~~infrastructure, ~~protective~~specialized ~~shielding~~facilities, ofand ~~the~~highly ~~patient,~~ trained ~~medical~~personnel. ~~staff~~These tosystems ~~operate~~often ~~the~~involve ~~equipment,~~ionizing ~~the~~radiation ~~administration~~or ofcontrast ~~chemical~~ agents ~~to the patient to increase contrast~~ and ~~optimize~~require ~~visualization~~shielding and specialized ~~trained~~clinical ~~technicians~~environments. toAs ~~operate~~a ~~the equipment and ensure patient safety. Furthermore~~result, ~~the~~ imaging procedures using these technologies ~~are~~can ~~cumbersome,~~be time-consuming and expensive. Inand ~~addition, these conventional imaging technologies or modalities~~ are ~~not~~generally ~~amenable~~limited to ~~direct-to-consumer~~hospital ~~(“DTC”)~~ or ~~point-of-~~tertiary care ~~(“POC”)~~ settings ~~or available in LRE~~. ~~The Company 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.~~

These limitations restrict access to advanced imaging technologies and make deployment in decentralized or lower-resource environments challenging.

The Company believes its imaging technology platform, which uses low-energy transmitted sound to generate high-resolution three-dimensional images, can address several of these limitations. By avoiding ionizing radiation and eliminating breast compression, the Company’s systems are designed to provide a more comfortable patient experience while enabling volumetric imaging and quantitative tissue characterization.

The Company is also developing a cloud-based imaging platform designed to deliver quantitative imaging biomarkers and advanced analytics. Through collaborations with industry partners, the Company is integrating advanced visualization,

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quantitative analytics, and AI-ready imaging technologies into its Cloud SaaS infrastructure to support clinical interpretation, research workflows, and quantitative imaging analysis. This platform is designed to enable secure cloud-based delivery of Breast Acoustic CT studies with high-performance visualization and multimodality integration across breast imaging workflows.

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 Breast Cancer Solution to Increasing the Quality of Health Care and Lowering Costs

~~Advances~~Breast incancer ~~technology~~screening ~~offer~~today anrelies ~~opportunity~~primarily toon ~~provide:~~mammography 1)as athe ~~means~~front-line ~~for~~modality ~~obtaining~~within ~~better~~the ~~image~~standard ~~quality~~breast incare ~~medical images~~pathway2,3. 2)While ~~access~~mammography tohas ~~DTC~~played oran ~~direct~~essential torole ~~practitioner~~in ~~(“DTP”)~~improving ~~medical~~early ~~imaging~~detection, 3)it ~~lower~~is ~~cost~~an ~~medical~~ imaging, 4)approach ~~reduced~~that ~~inconvenience~~uses ~~and~~ionizing ~~risk~~radiation ~~for~~and, ~~patients~~in bycertain ~~providing~~diagnostic acontexts ~~safe~~such ~~alternative~~as ~~to high~~contrast-~~energy~~enhanced ~~imaging~~mammography, ~~and~~may 4)require athe ~~lower~~administration ~~cost~~of ~~solution~~iodinated ~~for making a medical diagnosis~~contrast2. The ~~Company~~modality ~~believes~~also ~~that~~requires ~~its~~specialized ~~technology~~facilities ~~is ideal for DTC, DTP~~ and ~~POC~~trained ~~use~~personnel ~~because~~to ~~of its high performance~~operate, ~~safety~~which ~~and~~can ~~relatively~~limit ~~low cost. Furthermore, we believe that providing increased patient~~ access ~~to safe medical imaging is one important solution to increasing access~~ and ~~lowering~~increase ~~the~~operational ~~costs of medical care~~costs2.

~~The~~In ~~Company~~addition, ~~intends~~mammography tocan ~~follow~~be aless ~~staged~~effective ~~entry~~for ~~into~~women ~~the~~with ~~market~~dense breast tissue, ~~beginning~~where ~~with~~image ~~clearances~~interpretation ~~already~~is inoften ~~place~~more ~~which~~challenging ~~support~~and ~~its~~results ~~use~~may asbe aninconclusive3,4. ~~adjunct~~This frequently leads to ~~mammography~~additional ~~and~~supplemental imaging—such as ultrasound or MRI—to ~~monitor~~clarify ~~treatment~~findings3,5. ~~Additionally~~As a result, ~~the~~many ~~Company~~patients ~~intends~~experience a multi-step diagnostic process that can involve repeated appointments, multiple imaging modalities, and increased out-of-pocket costs. These factors can contribute to ~~pursue~~patient aanxiety, higher recall rates, and in some cases attrition from recommended screening programs5.

2These challenges are particularly relevant for women who require regular monitoring but may be hesitant to undergo repeated imaging involving radiation or compression. Concerns regarding cumulative lifetime radiation exposure, procedural discomfort, scheduling complexity, and cost can all impact adherence to recommended screening regimens5.

The Company intends to address this gap by establishing its imaging modality as a preferred screening solution for all intermediate-risk women and high-risk younger women (under 40) identified through established risk stratification frameworks such as the Tyrer-Cuzick model5,6. Together, these patient segments represent approximately 70% of the screening population, when considering intermediate-risk populations and the large proportion of women with dense breast tissue requiring enhanced screening pathways3,6, creating a large opportunity to improve both access and outcomes in breast imaging.

The Company’s technology is designed to optimize imaging performance in dense breast tissue while offering an approach that more closely resembles MRI-style physiologic imaging, enabling the capture of multiple physiologic biomarkers in a single examination. These physiologic biomarkers reflect functional characteristics of breast tissue—such as vascular, structural, and mechanical properties—derived directly from imaging data, distinguishing them from molecular biomarkers, which are typically obtained through laboratory or tissue-based testing7. This “one scan, multiple physiologic biomarkers” approach can provide clinicians with richer functional insight into breast tissue while reducing the need for multiple follow-on tests.

Beyond the imaging hardware, the Company intends to build and deploy a SaaS precision diagnostics ecosystem around the scanner platform. This ecosystem is designed to generate elevated clinical insights for providers by analyzing physiologic biomarkers derived from the scan data. Specifically, the platform will leverage the geometric, elastic, and spectral properties of breast tissue captured during the scan to produce advanced quantitative assessments that support diagnostic interpretation, longitudinal monitoring, and clinical decision-making7. By integrating these capabilities into a

2 American College of Radiology (ACR). ACR Appropriateness Criteria®: Breast Cancer Screening.

3 Mann RM et al. “Breast cancer screening in women with extremely dense breasts.” European Society of Breast Imaging (EUSOBI) Recommendations. European Radiology.

4 Boyd NF et al. “Mammographic density and the risk and detection of breast cancer.” New England Journal of Medicine.

5 National Comprehensive Cancer Network (NCCN). NCCN Clinical Practice Guidelines in Oncology: Breast Cancer Screening and Diagnosis.

6 Pashayan N et al. “Risk-stratified screening for breast cancer.” Nature Reviews Clinical Oncology.

7 Gillies RJ, Kinahan PE, Hricak H. “Radiomics: Images are more than pictures.” Radiology.

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~~regulatory~~scalable ~~and~~software ~~commercial pathway to support the use of its technology as an alternative to breast MRI in screening younger women (under 40 years of age) at above-average risk for breast cancer. In parallel~~environment, the Company ~~will~~aims ~~then use these placements as footholds from which~~ to ~~build~~deliver ~~presence~~precision indiagnostics ~~the~~that ~~medical~~enhance ~~community~~clinical ~~and~~insight ~~acquire~~while ~~the~~continuously ~~data~~increasing ~~needed for additional FDA clearances and insurance reimbursement. In parallel with these efforts,~~ the ~~Company~~value ~~solidified~~of ~~existing~~each ~~business~~scanner ~~and distribution strategic partnerships to cover sales in US, as well as partnerships to build strong manufacturing processes to deliver the QT Breast Scanners in large scale production~~installed.

Beyond clinical performance, the platform is designed to improve reproducibility through an operator-independent imaging workflow. By minimizing operator variability, the system aims to produce more consistent and reliable imaging results across sites and patient populations.

From an economic perspective, the technology is intended to reduce the overall cost of imaging by lowering capital equipment requirements, simplifying operations, and reducing the need for highly specialized personnel. At the same time, the platform is designed to support revenue growth to providers through access to existing reimbursement pathways for baseline scans, with the potential for additional reimbursement tied to physiologic biomarker–driven precision diagnostic insights delivered through the Company’s software platform.

Equally important, the system is designed with patient experience in mind. By eliminating breast compression, ionizing radiation, and contrast injections, the scanning process is intended to be significantly more comfortable and less intimidating for patients. This patient-centric approach may improve adherence to recommended screening programs, reduce anxiety associated with repeat imaging, and support more consistent longitudinal monitoring.

The non-invasive nature of the modality also makes it particularly well suited for therapy monitoring. Because the technology does not rely on ionizing radiation—unlike modalities such as mammography or digital breast tomosynthesis—and does not require contrast agents as in MRI, there are fewer practical or clinical restrictions on how frequently patients can be scanned. This allows clinicians to monitor treatment response more frequently and with greater patient comfort, potentially enabling earlier insights into therapeutic effectiveness.

Through this strategy, the Company aims to complement the existing breast imaging ecosystem while expanding safe, accessible screening and monitoring options for a large segment of the population that remains underserved by current imaging pathways.

Our Competitive Strengths

We believe that our competitive strengths include the following:

•~~The~~the world-wide market for medical imaging is large and it has a potential to expand in the areas where the Company has differentiation;

•a non-ionizing, non-contrast dye injection imaging modality;

•an imaging modality with superior performance as compared to traditional mammogram with respect to specificity (false positive), thus less unnecessary emotional trauma for patients, reduced numbers of invasive follow-up procedures and a reduction of costs for both patient and broader society;

•an imaging modality with the potential to offer superior specificity compared to screening breast MRI for younger women (under 40 years of age) at above-average risk. By reducing false positives, it holds the potential of sparing patients from undue emotional distress, limiting unnecessary biopsies and follow-up procedures, and ultimately decreasing healthcare costs for both individuals and society;

•a lower price point than conventional high-energy imaging equipment;

•the Company’s technology can be deployed to low resources environments (“LREs”) because of its automation, small footprint, no shielding, no contrast-dye injection;

•the Company’s technology is portable and can be used in ~~POC~~point-of-care settings such as LREs;

•the Company’s technology is deployable in outdoor settings such as sports, military, and naval settings;

•the Company’s technology reduces the barriers to testing and follow up-care for women, as there is no need for specialized training and the technology is well-suited for lowering health care costs by being affordable and easily accessed;

•the Company’s technology provides optimized patient experience, as no radiation is involved, with the patient being able to be followed with no limitation to imaging frequency;

~~•the Company’s technology is well-suited for traditional tertiary care hospitals and additionally for DTC and DTP applications, that are outside these institutions;~~ 4

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•the Company’s technology is well-suited for traditional tertiary care hospitals and additionally for direct-to-consumer (“DTC”) and direct-to-practitioner (“DTP”) applications, that are outside these institutions;

•the Company’s technology is uniquely proprietary, disruptive and a one-of-a kind product that can address a variety of unmet medical needs in the medical marketplace;

•the Company’s scanner features a uniquely simple design with a small number of components, which in turn significantly reduces the cost of the bill- of~~-materials~~ ~~(“BOM”)~~materials, cost- of~~-good-sold~~ ~~(“COGS”)~~goods sold, and the total-cost-of-ownership, and enables a lower average ~~sales~~selling price ~~(“ASP”)~~ compared to other available systems, thus making it much more affordable to large mass deployments; and

•the Company’s products have potential strong revenue growth, with capital purchase supporting substantial long-term gross margin.

Our Strategies

We believe that our strategies include the following:

•~~Create~~create disruptive technological innovation (software, artificial intelligence, and smart physics) to improve medical imaging and thus health care quality and access.

3•continue to improve our high quality, high resolution, native 3D, reproducible image quality regardless of operator or breast size/tissue type breast imaging technology, as well as the techniques for quantifiable analysis, comparison, and training.

~~Table~~•build ofa ~~Contents~~biomarker-driven Cloud SaaS platform to shift from a hardware company to a precision imaging artificial intelligence platform combining hardware, software and cloud-based artificial intelligence modules. Biomarkers allow us to move beyond detection toward diagnostic and prognostic precision through quantitative imaging.

•~~Continue~~partner towith ~~improve~~strategic ~~our~~business ~~high~~and ~~quality,~~distribution ~~high~~channels ~~resolution,~~to ~~native~~address ~~3D,~~the ~~reproducible~~U.S. ~~image~~market ~~quality~~for ~~regardless~~breast ofimaging ~~operator~~immediately orand, ~~breast~~other ~~size/tissue~~regions ~~type~~in ~~breast~~the ~~imaging technology~~future, asto ~~well~~place as the ~~techniques~~QT ~~for~~Breast ~~quantifiable~~Scanner ~~analysis~~in hospitals, ~~comparison~~radiology centers, etc. and ~~training.~~generate awareness of the benefits of the Company’s technology.

•~~Partner~~perform ~~with~~small ~~strategic~~scale ~~business~~manufacturing ~~and~~internally ~~distribution channels~~ to ~~address~~ the ~~U.S.~~Company ~~market for breast imaging im-mediately~~ and, ~~other~~partner ~~regions~~strategically infor ~~the~~large ~~future,~~scale ~~to place the QT Breast Scanner in hospitals, radiology centers, etc~~manufacturing. ~~and generate awareness of the benefits of the Company’s technology.~~

•~~Perform~~expand ~~small~~the ~~scale~~market ~~manufacturing~~by ~~internally~~supporting additional DTC and DTP approaches to enable the ~~Company~~ability to lower health care costs and ~~partner~~increase ~~strategically~~access ~~for~~via ~~large~~personal ~~scale~~medical ~~manufacturing~~imaging.

•~~Expand~~provide ~~the~~a ~~market~~new bysocial ~~supporting~~and ~~additional~~economic ~~DTC~~opportunity ~~and~~for ~~DTP~~consumers ~~approaches~~ to ~~enable~~take ~~the~~control ~~ability~~of tosome ~~lower~~aspects of their own health care—such ~~costs~~as ~~and~~imaging ~~increase~~for ~~access~~minor ~~via~~injuries ~~personal~~or medical ~~imaging~~conditions without needing a healthcare “gate-keeper.”

•~~Provide~~focus aour ~~new~~intellectual ~~social~~capabilities and ~~economic~~ethical ~~opportunity~~framework ~~for consumers~~ to ~~take~~become ~~control~~unified ofin ~~some~~our ~~aspects~~mission ofto ~~their~~improve ~~own~~the ~~health~~quality ~~care—such~~and aslower ~~imaging~~the ~~for~~cost ~~minor~~of ~~injuries~~health orcare ~~medical~~world-wide... ~~conditions~~“It’s ~~without~~about ~~needing a healthcare “gate-keeper~~time.”

•~~Focus~~leverage ~~our~~on the intellectual ~~capabilities~~property and ~~ethical~~know-how ~~framework~~of tothe ~~become~~company ~~unified~~as inis ~~our~~demonstrated ~~mission~~through the first family of QT Breast Scanner commercialization, to ~~improve~~develop ~~the~~other ~~quality~~scanning ~~and~~medical ~~lower~~imaging ~~the~~products, ~~cost~~such ofas ~~health~~infant ~~care~~scanners, ~~world~~full-~~wide...~~body ~~“It’s~~scanner ~~about~~and/or ~~time~~other products.”

•Leverage on the intellectual property and know-how of the company as is demonstrated through the first family of QT Breast Scanner commercialization, to develop other scanning medical imaging products, such as infant scanners, full-body scanner and/or other products.

Industry & Market Opportunity

Doctors and hospitals are increasingly turning to medical imaging to screen for and diagnose cancer, support and monitor ongoing cancer treatment (drugs, radiation, and surgery), and offer non-invasive surgical options for patients. This has resulted in a major market opportunity—the annual worldwide medical imaging market currently is estimated to be $40 billion, with $10 billion coming from the United States.2 Global cancer screening, with an approximately $150 billion market size in 2022, is expected to grow at a compound annual growth (“CAGR”) of 12% and reach approximately $472 billion in 2033.3

Breast Imaging

Breast cancer detection and diagnostic technologies (including mammography, MRI, and ultrasound, as well as genetic testing and image guided breast biopsy) are a significant part of the medical imaging market and are estimated to represent a $4.6 billion global market in 2023 with an ongoing CAGR of 8%.4 The market is segmented by technology, primarily between ionizing breast imaging (e.g., mammography) and non-ionizing breast imaging, which includes ultrasound and MRI. The non-ionizing segment is expected to grow at a faster rate5 than the ionizing segment due to technological advances such as better segmentation of anatomical detail, higher sensitivity to small breast lesions in women with dense breast tissue6, and fewer false positives.

2 See, Fortune Business Insight, Medical Imaging Market Size, Share & COVID-19 Impact Analysis, Type (Magnetic Resonance Imaging, Computer Tomography, X-ray, Ultrasound, and Molecular Imaging), By Application (Cardiology, Neurology, Orthopedics, Gynecology, Oncology, and Others), by End User (Hospitals, Specialty Clinics, Diagnostic Imaging Centers, and Others), and Regional Forecast, 2021-2028 (Jan. 2022), available at https://www.fortunebusinessinsights.com/industry-reports/medical-imaging-equipment-market-100382.

3 See, Fortune Business Insight, Medical Imaging Market Size, Share & COVID-19 Impact Analysis, Type (Magnetic Resonance Imaging, Computer Tomography, X-ray, Ultrasound, and Molecular Imaging), By Application (Cardiology, Neurology, Orthopedics, Gynecology, Oncology, and Others), by End User (Hospitals, Specialty Clinics, Diagnostic Imaging Centers, and Others), and Regional Forecast, 2021-2028 (Jan. 2022), available at https://www.fortunebusinessinsights.com/industry-reports/medical-imaging-equipment-market-100382.

4 See, ReportLinker, Global Breast Imaging Technologies Market to Reach $5.8 Billion by 2030 (Feb. 2, 2023), available at https://finance.yahoo.com/news/global-breast-imaging-technologies-market-192600736.html?guccounter=1&guce_referrer=aHR0cHM6Ly9kdWNrZHVja2dvLmNvbS8&guce_referrer _sig=AQAAAJGTUiAxSng9741aF3B3-AT5uFrtLSoqRIo_b38QWPbYdAjvx0aejvhKoF-p3Yvh4jZ41GAPV6VDMPuYjtfUAHqMdEQhdA5buqzcGISJDID04pNvYySjQ92AlaTPNAa99CWcRem UxEbDmGEKPetyTskvCpwcWKRA8ZIWA_2Nb3mh.

5 See, GrandViewResearch, Magnetic Resonance Imaging Market Size, Share & Trends Analysis by Architecture, by Field Strength, by Application (Brain & Neurological, Vascular), by End Use, by Region, and Segment Forecasts, 2022-2030, available at https://www.grandviewresearch.com/industry-analysis/magnetic-resonance-imaging-market (last visited Feb. 10, 2023).

6 NIH, National Cancer Institute, Dense Breasts: Answers to Commonly Asked Questions (“Breasts contain glandular tissue, fibrous connective tissue, and fatty breast tissue. Breast density is a term that describes the relative amount of these different types of breast tissue as seen on a mammogram. Dense breast tissue has relatively high amounts of glandular tissue and fibrous connective tissue and relatively low amounts of fatty breast tissue.”), available at https://www.cancer.gov/types/breast/breast-changes/dense-breasts (Mar. 29, 2023).

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The current standard of care for imaging in breast cancer screening, diagnosis, and treatment is far from satisfactory and may involve certain side effects. There are adverse effects to the use of medical imaging methods such as ionizing radiation, mammography, and MRI. Generally, the process starts with X-ray mammography, the primary screening tool for women. Mammography uses radiation, which in sufficient cumulative doses can increase the risk of cancer; and is uncomfortable or too painful for patients as it involves breast compression. Another adverse effect is the inefficiency of mammography in detection of cancer in women with dense breasts. There is a psychological adverse effect of callbacks for adjunct screening and diagnosis include ultrasound, MRI, and may include biopsies. This process is expensive, time consuming, and can be mentally and physically trying for women. Also, the use of three imaging modalities in the process speaks to the weakness of any one in adequately screening for breast cancer. MRI may take place in a closed environment which may cause claustrophobia, require sedation or general anesthesia and may require injection of a heavy-metal contrast agent. The use of sedation or anesthetic drugs risks severe compromise of respiratory and cardiac function.

Regarding CT, the harmful effects of radiation used in ionizing radiation exposure raises the risk of cancer, including leukemia, breast cancer, thyroid cancer and brain cancer. These issues make MRI preferred to CT for all but trauma evaluation.

The QT Breast Scanner has no reports of adverse effects from the more than 20,000 scans performed to date. Similar to other ultrasound devices, due to the low frequency and energy of those scanners, including handheld devices, there are no known significant risks reported in general clinical practice. The QT Breast Scanner does not require potentially harmful ionizing radiation or anesthesia and is done in an open environment thereby decreasing stress and the necessity of sedation. As a result, there is the potential for increased imaging efficacy. The QT Breast Scanner does not cause breast implant displacement or rupture.

The Company’s opportunity in breast imaging is to speed the time to diagnosis for women with cancer, and to provide assurance for women who do not have the disease with a better patient experience and lower cost than the current standard of care.

While the Company believes women will embrace its technology, the Company is focused on achieving clinical adoption through the medical community, which requires continuing research on the clinical efficacy of the images rendered by the QT Breast Scanner known as a QTscan® image and development of key opinion leaders (“KOLs”) who can speak to the clinical value of its machines in practice. In addition, the Company must navigate the economics and price controls of the U.S. reimbursement system, as well as the economics and price controls of any foreign country in which the Company’s products and product candidates may receive regulatory approval. The Company is also actively working to expand its regulatory clearances to support marketing the QT Breast Scanner as an alternative to breast MRI for screening, initially targeting above average-risk younger women and ultimately aiming to provide a screening option for all women. Finally, even given the achievement of all of these objectives, there must be a “critical mass” of installed scanners –patients must be able to access the machines.

There are three primary technologies within the non-ionizing breast imaging segment: Automated Breast Ultrasound Systems or ABUS; Breast Ultrasound Tomography Systems; and Photoacoustic Imaging.

Automated Breast Ultrasound Systems (“ABUS”)

The ABUS segment is the largest and is expected to grow at a CAGR of 16% worldwide over the next five years, with more than 2,000 installations in place and a market value of $850 million by 2024.7 This growth will be driven by the advantages inherent in ABUS: quick turnaround time, affordability of devices, ease of device deployment, accurate diagnostic results, and operations without continuous operator monitoring. In addition, contextual factors including rising health awareness, government advocacy for breast cancer awareness, and an increasing prevalence of breast cancer will contribute to the expansion of this market.

ABUS technologies typically use a reflection transducer8 (5-15 MHz) and not transmitting setup, in a “motorized” arrangement. The major developers of such systems include: 1) the Acuson S2000 ABVS (sold by Siemens); 2) the Invenia System (s

7See, MarketResearch, Automated Breast Ultrasound System Market Size Outlook in 2023 and Beyond: Market Trends, Insight, Growth Opportunities, Market Share and Forecasts by Types, Applications, Countries and Companies to 2023 (Feb. 2023), available at https://www.marketresearch.com/VPA-Research-v4245/Automated-Breast-Ultrasound-System-Size-33347813/.

8 A medical reflection transducer, also known as an ultrasound transducer, is a device that converts electrical energy into sound waves, and the back again into electrical energy. It is used in medical imaging to produce images of internal organs and tissues in the body, and it is used in various medical imaging techniques such as ultrasound, echocardiography and Doppler imaging. See, e.g., ECG & ECHO Learning, The Ultrasound Transducer, available at https://ecgwaves.com/topic/the-ultrasound-transmitter-probe/ (last visited Apr. 4, 2023); see also, FDA, Ultrasound Imaging Sept. 28, 2022), https://www.fda.gov/radiation-emitting-products/medical-imaging/ultrasound-imaging.

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~~old~~Sales ~~by GE Healthcare); 3) a manual video loop AWBS System (sold by Sono-Cine);~~ and 4)Marketing ~~a motorized single transducer Sofia System (sold by Hitachi.). All of these systems produce B-mode reflection images9.~~

~~Breast~~The ~~Ultrasound~~breast ~~Tomography~~imaging ~~Systems~~market represents a substantial and growing opportunity, with the current total addressable market (TAM) valued at approximately $6 billion8,9. This market includes established modalities such as mammography, ultrasound, and MRI, which together form the backbone of breast cancer screening and diagnostics globally10,11. Within this, the accessible reimbursed markets (SAM)—covering key regions such as the United States, Organization for Economic Co-operation and Development countries, Korea, and Japan—are projected to grow from approximately $1.7 billion in 2025 to $2.6 billion by 2030, reflecting a compound annual growth rate (“CAGR”) of roughly 8–9%.

~~These~~The ~~technologies~~Company ~~use~~aims ~~traditional~~to ~~reflection~~capture ~~transducers10~~meaningful inshare anwithin ~~“array”~~this ~~configuration~~accessible ~~around~~market, ~~the~~targeting ~~breast:~~approximately 1)10% ~~Mastoscopia~~SAM ~~(Greece);~~penetration 2)by ~~the~~2030. ~~KIT~~This ~~system~~represents ~~(research~~significant ~~only)~~growth ~~from~~potential ~~Karlsruhe~~as ~~University~~the inCompany’s ~~Germany;~~innovative ~~and~~technology 3)advances the ~~Delphinus~~breast ~~System.~~imaging paradigm.

~~Photoacoustic~~Moreover, ~~Imaging~~the Company is positioned to participate in a newly emerging market segment valued at around $1 billion, focused on SaaS-enabled precision diagnostics and imaging analytics using physiologic biomarkers12,13. This emerging category reflects a broader shift toward AI-enabled quantitative imaging and precision medicine platforms, which enable more personalized treatment approaches with improved therapy guidance and monitoring capabilities12,13.

~~Photoacoustic~~To ~~imaging~~support ~~systems~~this ~~utilize~~initiative, ~~lasers~~the toCompany ~~excite~~has ~~tissues~~entered ~~and~~into ~~produce~~strategic ~~acoustic~~partnerships ~~energy~~with ~~that~~Intelerad ~~subsequently~~Medical ~~create~~Systems ~~images~~Incorporated ~~of the breast vasculature.11 Such systems include both photoacoustic tomography~~ (“~~PAT~~Intelerad”) and ~~photoacoustic~~Olea ~~imaging~~Medical S.A.S (“~~PAI~~Olea Medical”) ~~systems.~~to ~~While~~provide the ~~PAT systems allow volumetric~~ imaging byinformatics ~~reconstructing~~and ~~stacks~~advanced ofpost-processing 2Dinfrastructure ~~images,~~necessary ~~the~~for ~~PAI~~physiologic ~~systems~~biomarker ~~only~~discovery ~~allow~~and ~~superimposition~~clinical ~~of photoacoustic signal information on top of conventional B-mode ultrasound~~deployment. ~~Note~~Through ~~that~~its incombined ~~comparison~~hardware ~~to ultrasound, photoacoustic imaging systems inherently lack the ability to image the tissue anatomy~~ and ~~essentially~~software ~~only~~platform, ~~image~~ the ~~vasculature~~Company ~~(i.e., blood, which~~ is auniquely ~~strong~~positioned ~~absorber of light). For PAT systems, there is no clinical trial data available (~~to ~~our~~capitalize ~~knowledge)~~on ~~and~~both ~~no PAT systems have been approved for clinical use. For PAI systems,~~ the ~~Imagio~~expanding ~~Breast~~traditional ~~Imaging~~imaging ~~has~~market ~~been used in clinical trials~~ and isthe ~~FDA~~emerging ~~cleared~~precision todiagnostics beopportunity, ~~used~~driving astransformation anacross ~~adjunct to conventional handheld~~ breast ~~ultrasound.~~health care.

~~All~~Leverage ofCurrent ~~these~~Clearances ~~technologies face challenges~~ to ~~expansion,~~Build ~~including~~Presence ~~FDA clearances~~ and ~~insurance~~Awareness ~~reimbursement. However, the shortcomings of other imaging methods such as ionized radiation exposure, high costs and deployment challenges of MRI, and the inefficiency of mammography~~ in detection of cancer in women with dense breasts, are sufficiently compelling for industry to address these obstacles, and these shortcomings will continue to create an opportunity for development and commercialization of advanced screening systems such as the ~~Company’s.~~Medical Community

ToThe ~~our~~current ~~knowledge~~QT atBreast ~~the~~Scanner ~~time~~is ofa ~~filing~~Class ~~this~~II ~~annual~~device ~~report,~~subject weto ~~are~~premarket ~~not~~notification ~~aware~~and clearance under Section 510(k) of ~~any~~the ~~technologies~~FDCA. ~~approved~~The ~~for~~QT ~~primary~~Breast ~~screening~~Scanner ~~clearance~~is currently cleared by the FDA ~~except~~under Section 510(k) (which clearance was granted in June 2017) for ~~various~~breast ~~types~~imaging ofbut ~~technology~~not ~~related~~as toa ~~X-ray~~replacement for screening mammography – currently, the device has FDA approval and can be reimbursed in cases where additional breast imaging is necessary. This includes women who need adjunctive screening, such as: women with dense breasts or where there is a finding; high risk women below the recommended age for mammography; and women who would benefit from more frequent breast imaging, such as women undergoing treatment or women on prophylactic medication to prevent breast cancer.

~~Future~~Many ~~Market~~patients ~~Opportunities~~may find the QT Imaging modality preferable for dense breasts, implants, post therapy screening where breasts can be very sensitive to compression and where patients have concerns about the radiation dose.

~~While~~A particular opportunity for the Company’s ~~short-~~under its current clearance is to~~-medium~~ ~~term~~provide ~~focus~~a ~~will~~backup beoption onfor women who are recommended for a breast ~~scanning,~~MRI ~~future~~but ~~products~~are ~~will~~unwilling ~~open~~or ~~additional~~unable ~~markets~~to have it for cost or accessibility reasons. ~~The~~With ~~Company’s~~additional ~~Open~~clinical ~~Partial~~data ~~Angle~~comparing the clinical efficacy of the QT Breast Scanner ~~concept~~to MRIs, ~~which~~the isQT ~~currently~~Breast ~~under~~Scanner ~~development~~may become a less expensive, ismore ~~expected~~patient-friendly alternative to ~~provide~~MRIs ~~entry~~(no ~~into~~contrast-dye, ~~the~~no ~~global~~claustrophobia, ~~orthopedic~~no ~~medical~~noise). ~~imaging~~QT ~~market,~~Scanners ~~which~~will isfree ~~estimated~~MRI toscanners befor ~~$7.3~~other ~~billion~~non-breast byimaging ~~202512~~studies.

9Achieving ~~B-mode~~clinical ~~ultrasound,~~adoption ~~also~~requires ~~known~~building asawareness 2Dand ~~ultrasound,~~acceptance isin athe ~~type~~medical ofcommunity. ~~ultrasound~~The ~~imaging~~first ~~where~~step “awill ~~linear~~be ~~array~~to ofplace ~~transducers~~machines ~~simultaneously~~with ~~scans~~early aadopters ~~plane~~who ~~through~~see the ~~body~~benefits ~~that~~of ~~can~~the beCompany’s ~~viewed~~technology, asare ainterested ~~two-dimensional~~in ~~image~~using onthe ~~screen.”~~device ~~See,~~in ~~NIH~~their practice, ~~National~~are ~~Library~~willing ofto ~~Medicine,~~collect ~~Carovac~~data ~~A.,~~on ~~Smajlovic~~its F.use, ~~Junuzovic~~and ~~D.,~~will ~~Application~~publish ofresults ~~Ultrasound~~or inspeak ~~Medicine,~~to ~~19(3)~~their ~~Acta~~peers ~~Inform~~about ~~Med.~~its ~~168-171~~clinical ~~(Sept~~value. ~~2011), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3564184/.~~

10An ~~Medical~~example ~~reflection~~of ~~transducer,~~this ~~also~~strategy ~~known~~in aspractice ~~an ultrasound transducer,~~ is ~~a device that converts electrical energy into sound waves, and~~ the ~~back~~National ~~again~~Cancer ~~into~~Institute ~~electrical~~grant ~~energy.~~received Itin is2022 ~~used~~ in ~~medical~~partnership ~~imaging~~with tothe ~~produce~~University ~~images~~ of ~~internal~~Illinois ~~organs~~– ~~and~~Urbana-Champaign ~~tissues~~whereby in the ~~body,~~Company ~~and~~will itplace isa ~~used~~QT inBreast ~~various~~Scanner ~~medical~~at ~~imaging~~St. ~~techniques~~Margaret’s ~~such~~Hospital asin ~~ultrasound~~Toronto, ~~echocardiography~~Canada. ~~and~~The ~~Doppler~~objective ~~imaging.~~is ~~See,~~to ~~e.g.,~~evaluate ~~ECG~~and &measure ~~ECHO~~the ~~Learning,~~effectiveness ~~The~~of ~~Ultrasound~~the ~~Transducer,~~QTscan ~~available~~in atevaluation ~~https://ecgwaves.com/topic/the-ultrasound-transmitter-probe/~~and ~~(last~~monitoring ~~visited~~cancer ~~Apr.~~treatment 4,in ~~2023);~~comparison ~~see~~to ~~also,~~breast ~~FDA,~~MRI ~~Ultrasound~~which ~~Imaging~~is ~~Sept.~~currently ~~28,~~the ~~2022), https://www.fda.gov/radiation~~standard-~~emitting~~of-~~products/medical-imaging/ultrasound-imaging.~~care in quantitative monitoring

118 ~~Breast~~Markets ~~vasculature refers to the blood vessels that supply~~ and ~~drain blood from the breast tissue~~Markets. ~~The~~Breast ~~breast~~Imaging isMarket a– ~~highly~~Global ~~vascularized~~Forecast ~~organ,~~to ~~and~~2030. ~~the~~Industry ~~blood~~analysis ~~supply~~estimating ~~comes~~global ~~from~~breast aimaging ~~network~~market ofsize ~~arteries~~ and ~~veins~~growth ~~that run throughout the breast tissue~~trends. ~~See, NIH, National Library of Medicine, Yusuf S. Khan, Hussain Sajjad, Anatomy, Thorax, Mammary Gland, available at https://www.ncbi.nlm.nih.gov/books/NBK547666/ (last updated July 25, 2022).~~

129 ~~See,~~Grand ~~MarketWatch,~~View ~~Orthopedic~~Research. ~~Medical~~Breast Imaging Market Size, ~~Analysis~~Share ~~between~~& ~~Two~~Trends ~~International~~Analysis ~~Players~~Report. ~~through~~Global ~~Business~~and ~~Aspects~~regional ~~Way~~market ~~2026~~projections ~~(Feb.~~including 6,CAGR ~~2023),~~estimates ~~available~~for ~~at https://www.marketwatch.com/press -release/orthopedic-medical-~~imaging~~-market-size-analysis-between-top-international-players-through~~ ~~-business-aspects-way-2026-2023-02-06~~modalities.

10 American College of Radiology (ACR). ACR Appropriateness Criteria®: Breast Cancer Screening. Guidelines describing mammography, ultrasound, and MRI as core breast imaging modalities.

11 Mann RM et al. European Society of Breast Imaging (EUSOBI) recommendations for breast cancer screening. European Radiology.

12 McKinsey & Company. The Future of AI-Enabled Diagnostics in Healthcare. Discussion of imaging analytics, radiomics, and SaaS-based precision diagnostics platforms.

13 Gillies RJ, Kinahan PE, Hricak H. “Radiomics: Images Are More Than Pictures.” Radiology.

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of response to therapy. The results of the study will be published and would represent an independent validation of the clinical value of the QTscan with the imprimatur of a respected university, hospital, and the National Cancer Institute. The Company’s ~~Products~~intends &to ~~Product~~establish ~~Road~~similar ~~Map~~peer-review partnerships with respected medical organizations, practices, and practitioners in the future.

~~Current~~Sales ~~Products~~and Marketing Strategy

~~Proposed~~Building ~~Products~~on ~~Under~~its ~~Development~~clinical and technology strategy, the Company intends to drive continued growth through a focused commercial expansion plan. In the United States, the Company plans to strengthen its market presence through a hybrid commercialization model that combines strategic collaborations with targeted direct initiatives. A key component of this approach is leveraging its collaboration with NXC Imaging, Inc. (“NXC”), a wholly owned subsidiary of Canon Medical USA, Inc. (“CMSU”), and CMSU’s parent, Canon Medical Systems Corporation (“CMSC”, and collectively referred to with CMSU as “Canon”), which provides access to established sales infrastructure, market relationships, and distribution capabilities. This collaboration will be complemented by the Company’s own direct commercial initiatives aimed at expanding clinical partnerships, supporting early adopter sites, and building deeper engagement within the breast imaging community.

QTAs ~~Breast~~part ~~Scanner~~of its U.S. market development strategy, the Company also intends to undertake a multigenerational outreach and advocacy campaign focused on increasing awareness around breast health and early screening. This initiative will emphasize the theme “Women’s Health = Women’s Empowerment,” positioning proactive health management as a core component of personal and societal empowerment. The campaign is expected to leverage celebrity endorsements and thought leaders to generate earned media exposure and foster broad engagement across multiple generations of women. By combining advocacy, education, and public awareness, the Company aims to encourage earlier and more consistent participation in breast health screening while increasing visibility for new, patient-friendly imaging technologies.

~~The~~In ~~Need:~~parallel Awith ~~safe~~its U.S. growth strategy, ~~painless~~the ~~imaging~~Company ~~device~~intends ~~that~~to ~~provides~~expand ~~conclusive~~into ~~breast~~international ~~health~~markets, ~~assessment~~beginning with the Gulf Cooperation Council (GCC) region. The Company has established strategic distribution relationships with Gulf Medical Co. (“GMC”) for the Kingdom of Saudi Arabia and Al Naghi Medical Co. (“Al Naghi”) for the United Arab Emirates (the “UAE”). These partnerships are expected to provide strong regional market access through organizations with deep experience in medical technology distribution and established relationships with leading healthcare institutions.

~~Background:~~Regulatory processes for both the Kingdom of Saudi Arabia and the United Arab Emirates are already underway, and the Company expects the required certifications to be in place in the near term, enabling commercial deployment in these markets.

~~Breast~~Beyond ~~cancer~~these isinitial ~~the~~GCC ~~most~~markets, ~~commonly~~the ~~diagnosed~~Company ~~women’s~~is ~~cancer~~actively engaged in ~~the~~discussions ~~United States, according~~ to ~~the~~establish ~~National~~additional ~~Cancer~~strategic ~~Institute.~~distribution ~~The~~partnerships ~~American~~across ~~Cancer~~the ~~Society~~broader ~~estimates~~GCC ~~that~~region, inincluding ~~2022~~Kuwait, ~~287~~Qatar,~~850~~ ~~women in the United States have been diagnosed with invasive and in situ (early stage) breast cancer~~Oman, and ~~breast cancer has claimed the lives of 40,920 women~~Bahrain.13 ~~The~~These ~~American~~markets ~~Cancer~~represent ~~Society~~attractive ~~further~~opportunities ~~estimates~~due ~~that~~to ~~one~~their ~~out~~growing ofhealthcare ~~every~~infrastructure, ~~eight~~increasing ~~women~~focus ~~will~~on ~~develop~~early ~~breast~~ cancer atdetection, ~~some point during her life~~ and ~~one~~openness into ~~every~~innovative 42medical ~~women who turns 50 today will have a diagnosis of breast cancer before she turns 60~~technologies.

~~There~~Looking ~~are~~further ~~several~~ahead, ~~dominant~~the ~~screening~~Company intends to explore expansion into European and ~~diagnostic~~other ~~technologies~~international ~~that~~markets ~~are~~such ~~used~~as ~~both~~Australia ~~independently~~and New Zealand (ANZ), South Korea, South Asia, and ~~dependently~~the toAssociation ~~locate~~of ~~cancers~~Southeast atAsian anNations ~~early~~(ASEAN) ~~stage~~through ~~and~~carefully ~~improve~~selected ~~treatment~~distribution ~~outcomes~~partnerships. ~~Each~~This ofexpansion ~~the~~will ~~currently~~be ~~available~~supported ~~non~~by well-~~surgical~~orchestrated ~~modalities~~market ~~for~~creation ~~breast~~strategies, ~~cancer~~including ~~detection~~collaborations ~~has~~with ~~various~~leading clinical ~~limitations.~~institutions ~~Screening~~and ~~methods~~research organizations to generate clinical evidence, build physician awareness, and ~~technologies~~support ~~include:~~regulatory and reimbursement pathways in each geography. The Company is also working closely with Canon’s Japan operations (iwhere Canon is headquartered) ~~breast~~and ~~self-~~a prominent luminary in Japan to explore opportunities within the Japanese market. Registration activities for Europe are planned to commence later this year, with other geographies that accept EU registration to be pursued subsequently.

13Through ~~See,~~this ~~American~~coordinated ~~Cancer~~approach—combining ~~Society~~technology innovation, ~~Breast~~precision ~~Cancer~~diagnostic ~~Facts~~software &capabilities, ~~Figures~~strong commercial partnerships, ~~available~~and atstrategic ~~https://www.cancer.org/research/cancer~~geographic expansion—the Company aims to build a scalable global platform for next-~~facts-statistics/~~generation breast~~-cancer-facts-figures.html~~ ~~(last~~imaging ~~visited~~and ~~Feb~~diagnostics. ~~10, 2023).~~

Use an Installed Base as a Platform to Expand Awareness and Produce Additional Data for Clinical Acceptance, Reimbursement, and Additional FDA Clearances

Part of the challenge of achieving clinical acceptance and adoption of the Company’s technology is data that proves the efficacy of the QTscan relative to the current standard of care for breast imaging in screening, diagnosis and treatment. The rollout of QT Breast Scanners as described in the previous section will provide multiple means of collecting this data for clinicians, which can also be used to support reimbursement and expanded FDA clearances of the QT Breast Scanner as an alternative to screening breast MRI in younger women (under 40 years of age) with above average risk of breast cancer.

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~~examination~~Data collection and ~~clinical~~analysis, ~~breast~~support ~~examination;~~reimbursement ~~(ii)~~and ~~mammography,~~expanding ~~including~~FDA ~~screening~~clearances ~~mammography~~are time-consuming, ~~diagnostic~~but ~~mammography,~~with ~~and~~the ~~mammography~~help ~~with~~of ~~computer~~the ~~aided~~installations ~~detection;~~that ~~(iii)~~will ~~Hand-Held~~be ~~Ultrasound~~accelerated ~~(“HHUS”)~~through ~~and~~the ~~(iv)~~placement ~~MRI~~programs detailed above, the Company believes that it can achieve these objectives with maximum efficiency.

~~Mammography~~Market isSegments the dominant imaging modality in today’s standard of care. The American Cancer Society recommends that women of average risk have the option to begin mammography at age 40, get mammograms every year from age 45-54, and have mammography every other year starting at age 55.14 Despite those recommendations, only 65% of women over 40 in the United States have had a mammogram in the previous two years, and only 58% of women between 40 and 49 had a mammogram in the previous two years,15 even though screening mammography is 100% covered under the Affordable Care Act. This is in part due to the limitations of mammography, both in terms of sensitivity and reliability for dense breast tissue, where 10-15% of cases have inconclusive results requiring further testing, as well as concerns about safety. Mammography is also problematic in women who have breast implants. For these women, problems include painful mammograms, delayed detection of cancer from interference in imaging breast tissue, and an unwillingness to perform mammograms due to fear of implant rupture, dislocation or capsular contracture.

~~The~~As ~~Company’s~~the ~~goal~~installed isbase tofor ~~provide~~QT ~~highly~~Breast ~~accurate~~Scanners expands, ~~100%~~and ~~safe~~as discussed above, ~~radiation-free~~the Company intends to tailor its marketing efforts towards three segments as it builds awareness and ~~painless~~acceptance ~~breast~~for its imaging ~~that~~technology. ~~can~~All beare ~~used~~important ~~to:~~for success, and each requires its own strategy and messaging.

~~1)identify~~•Patients. ~~cancer~~This ~~early~~is the end-user/consumer – the women who are dissatisfied with the current scanning model. The Company intends to ~~minimize~~approach ~~invasiveness~~patients through multiple channels, beginning with outreach efforts to recruit key influencers and ~~increase~~opinion ~~effectiveness~~leaders. ofThese ~~treatment;~~individuals would be recruited through networking and education via targeted interest groups and would become advocates of the benefits of the Company’s technology to their respective groups.

~~2)eliminate~~•Medical ~~unnecessary~~Professionals/Radiologists. ~~intervention~~In ~~(additional~~addition ~~imaging~~to marketing to women, the Company launched an intensive campaign aimed at the medical community. This is a more difficult effort than that aimed at women – from the provider perspective, the need for multiple scans and ~~biopsies)~~callbacks that are a negative for ~~women~~patients ~~with~~are ~~benign~~actually ~~breast~~seen ~~conditions~~as an economic positive as additional patient visits generate a significant amount of revenue. This is true for both institutions and radiologists, ~~most~~and ~~notably~~neither ~~cysts~~have a great incentive to deviate from the current status quo.

~~The~~NXC ~~Product,~~Distribution ~~QT Breast Scanner~~ Agreement

The QTCompany ~~Breast~~is ~~Scanner~~supported isby a ~~fixed~~strong distribution and business partnership with NXC. On May 13, ~~stationary~~2023, ~~mechanical~~QT ~~scanner~~Imaging ~~used~~entered into the “NXC Sales Agent Agreement” with NXC, pursuant to ~~evaluate~~which QT Imaging appointed NXC as the ~~breast~~non-exclusive ~~without~~agent for the ~~use~~sale of ~~either~~the ~~ionizing~~QT ~~radiation~~Breast orScanner ~~compression~~and ~~associated~~related ~~with~~services ~~mammography,~~in ornon-exclusive territories: the ~~injections~~U.S., ~~required~~U.S. ~~for~~territories, ~~breast~~and ~~MRI~~U.S. ~~With~~Department of Defense installations. Additionally, NXC was appointed as the exclusive servicer of the QT Breast ~~Scanner,~~Scanners ~~the~~sold ~~patient~~by ~~lies~~NXC ~~comfortably~~under onthe aterms ~~table~~of ~~which~~the ~~contains~~NXC anSales ~~opening~~Agent ~~through~~Agreement. ~~which~~Under the ~~breast~~NXC isSales ~~immersed~~Agent inAgreement, aQT ~~warm~~Imaging ~~water~~had ~~bath~~the ~~(see~~right ~~Image~~to 1)set the price for its products and ~~gently~~agreed ~~immobilized~~to ~~using~~pay NXC a ~~magnetic~~commission ~~retention~~based ~~pad~~on ~~fixed~~the purchase order price charged to a ~~magnetic~~customer. ~~rod~~Pursuant to the NXC Sales Agent Agreement, NXC was responsible for promotion and sale of the QT Breast Scanner and related services within the designated territory, as well as servicing the QT Breast Scanners sold by NXC. The initial term of the NXC Sales Agent Agreement was for three years.

Subsequently, effective June 10, 2024, the Company and NXC replaced the NXC Sales Agent Agreement with the “NXC Distribution Agreement”. 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 the Company. The Company has reserved the right to sell directly to customers as an exception. Furthermore, the Company may, in its 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 the Company), 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 the Company. Each order will include information reasonably requested by the Company and is subject to the Company’s acceptance, after which it becomes an approved order. Any such approved orders are non-cancellable and not subject to rescheduling after acceptance by the Company. Any orders not accepted by the Company in writing are deemed rejected.

~~Image~~On October 29, 2024, the Company and NXC entered into Amendment No. 1 to the Distribution Agreement (the “First Amendment”) to expand Section 20 of the NXC Distribution Agreement to provide that NXC shall be obligated to inform its customers who purchase the QT Breast Scanner (the “Equipment”) that such customers shall not (i) use, copy, distribute, display, perform, or prepare derivative works of any materials accompanying or embodied in the Equipment (except to the extent expressly permitted by such customer’s license to such Equipment and its documentation) or (ii) use any Seller Marks (as defined in the NXC Distribution Agreement), in each case without the Company’s prior written consent. Further, the First Amendment provides that upon any unauthorized use of the Seller Marks or materials accompanying the Equipment by any customer, NXC shall promptly inform the Company and provide all reasonably requested assistance in termination such unauthorized use.

Surrounding the warm water bath is a dual modality reflection and transmission ultrasound array that rotates 360 degrees around the breast (see Image 2 & Image 3) to produce 3D images. The ultrasound array produces low energy, low frequency sound waves (non-radiation “pressure waves”) through the breast and reflecting from the breast, with both collecting volumetric (3D) data. Reflection data is collected on the transducer facing side, and the transmission data is collected on the back side of the breast. The transmission data quantitatively measures the velocity of these pressure waves through the breast. This information can be used to generate a true 3D image of the breast and all its tissues. 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

14 See, American Cancer Society, American Cancer Society Recommendations for the Early Detection of Breast Cancer, available at https://www.cancer.org/content/cancer/en/research/infographics-gallery/breast-cancer-screening-guideline.html (last visited Feb. 10, 2023).

15 U.S. Department of Health and Human Services, “Health, United States, 2016”, Table 70.

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On December 11, 2024, the Company and ~~volumetric~~NXC ~~doubling~~entered ~~time~~into ~~growth~~the ~~rate~~Amended ~~characteristics~~and ~~can~~Restated beDistribution ~~calculated~~Agreement to(the ~~determine~~“Amended ~~significance~~NXC ofDistribution ~~lesions~~Agreement”), which amends and ~~improve~~restates ~~specificity~~the NXC Distribution Agreement in its entirety. The Amended NXC Distribution Agreement provides for the following modifications to the NXC Distribution Agreement, with the balance of terms (including those added by the ~~ultrasound.~~First Amendment) remaining materially unchanged:

~~The~~Sale ~~transducer array in the water bathImage 2 Schematic~~ of ~~rotating ultrasound transmitterImage 3~~Equipment

~~The~~Under QTterms ~~Breast Scanner creates true 3D images~~ of the ~~patient’s~~Amended ~~breast~~NXC ~~viewable~~Distribution Agreement, in the ~~Quantitative~~event ~~Transmission~~that ~~Ultrasound~~CMSC ~~Viewer~~enters ~~(known~~into asan ~~QTviewer®),~~OEM amanufacturing ~~software~~agreement, ~~product~~then ~~designed~~fulfillment ~~for~~by ~~healthcare~~the ~~professionals~~parties to ~~view~~such ~~the~~manufacturing ~~transmission~~agreement ~~(speed~~ of ~~sound)~~their ~~and~~respective ~~reflection~~obligations ~~images.~~under ~~This~~such ~~application~~manufacturing ~~can~~agreement ~~display~~shall ~~correlated~~be ~~Digital~~a ~~Imaging~~condition ~~and~~to ~~Communications~~NXC inbeing ~~Medicine~~the ~~(“DICOM®”)~~exclusive ~~images~~reseller into ~~multiple orientations (coronal~~market, ~~sagittal~~advertise, and ~~axial).~~resell ~~QTviewer~~the ~~can~~Equipment ~~manipulate~~in ~~image~~the ~~views~~U.S. and ~~analyze pixel data with various functions~~U.S. ~~The QTviewer has additional functionality which enables the user to measure mass size and volume as well as fibroglandular tissue volume~~territories.16

~~Image~~Minimum 4Order ~~below~~Quantities ~~is a still image of the viewer for a patient with a cyst. The transmission (top 3 panels)~~ and ~~reflection (bottom 3 panels) images as seen in coronal, axial, and sagittal representations.~~ Pricing

~~Image~~The 4Amended NXC Distribution Agreement provides that no later than five days prior to the end of each calendar quarter, NXC shall provide to us a forecast of the anticipated purchases of Equipment during the subsequent twelve-month period. The Amended NXC Distribution Agreement further provides that the forecast for 2025 and 2026 shall be no less than the minimum order quantities (“MOQs”) set forth in an exhibit to the Amended NXC Distribution Agreement, by quarter and by year. Furthermore, all purchase orders from NXC shall be for no less than the MOQs, which NXC must order on the quarterly and annual basis as set forth in an exhibit to the Amended NXC Distribution Agreement. However, in the event that the Company and CMSC do not enter into an OEM manufacturing agreement, then the MOQs shall be non-binding only in the event that the Company cannot fulfill the manufacture and delivery volumes required for NXC to meet the MOQs.

~~The~~Should QTNXC ~~Breast~~fail ~~Scanner~~to issubmit ~~the~~a ~~current~~purchase ~~version~~order offor ~~the~~no QTless ~~Breast~~than ~~Scanner~~the ~~and~~MOQs isin ~~FDA-cleared~~any ~~“for~~quarterly ~~use~~or asannual anperiod, ~~ultrasonic~~then ~~imaging~~the ~~system~~Company tomay ~~provide~~invoice ~~reflection-mode~~NXC and ~~transmission-mode~~NXC ~~images~~shall ofpay athe ~~patient’s~~Company ~~breast.~~for ~~The~~the ~~device~~difference isbetween ~~not~~the ~~intended~~Equipment topurchased beand ~~used~~the asMOQs ~~a replacement~~ for ~~screening~~such ~~mammography~~period.~~”17~~

16NXC’s ~~See,~~purchases ~~American~~will ~~Association~~be ~~for~~in ~~Cancer~~accordance ~~Research,~~with R.a ~~Natesan,~~product J.pricing ~~Wiskin,~~schedule S.attached ~~Lee,~~to B.the HNXC Distribution Agreement as an exhibit (subject to change upon 60 days’ prior written notice by the Company). ~~Malik,~~The ~~Quantitative~~Amended ~~Assessment~~NXC Distribution Agreement removed the cap on markup by NXC on its resale of ~~Breast~~the ~~Density:~~cost ~~Transmission~~of ~~Ultrasound~~the isEquipment ~~Comparable~~that towas ~~Mammography~~provided ~~with~~for ~~Tomosynthesis~~by ~~(Dec.~~the 3,NXC ~~2019)~~Distribution Agreement, ~~available~~such that NXC may set the resale price for customers at ~~https://aacrjournals~~its sole discretion.~~org/cancerpreventionresearch/article/12/12/871/47203/Quantitative-Assessment-of-Breast-Density.~~

17Payment ~~U.S Department of Health and Human Services, Food and Drug Administration, 510(k) number K162372.~~Terms

Except as otherwise set forth in an applicable Approved Order, the Amended NXC Distribution Agreement provides that we will invoice NXC upon shipment of the Equipment and NXC shall pay the invoice by net thirty days from shipment of the Equipment.

After Sale Service

The Amended NXC Distribution Agreement obligates us to continue to provide technical support, spare parts, and necessary know-how in order for NXC to continue to service and support Equipment for at least five years after installation of the Equipment at a customer site. The Amended NXC Distribution Agreement also deleted a provision in the NXC Distribution Agreement that required NXC to request each of its customers to have a qualified or trained breast radiologist.

Limited Warranty

The Amended NXC Distribution Agreement contains limited warranties with respect to the Equipment and relevant spare parts, to remain in effect (a) for Equipment for the shorter of fifteen months from the shipment of the Equipment or twelve months from the date of customer acceptance of installed Equipment, and (b) the relevant spare parts for the shorter of twelve months from the date of their shipment and six months from the date that their completion is installed.

Non-Solicitation

The Amended NXC Distribution Agreement contains a non-solicitation provision stating that we agree, during the term thereof and for a period of three years after, we shall not, directly or indirectly: (a) interfere with or attempt to interfere with any relationship between NXC and any of its distributors, agents, employees, consultants, independent contractors, agents or representatives, (b) solicit the business or accounts of NXC, or (c) divert or attempt to direct from NXC any business or interfere with any relationship between the NXC or any of its clients, suppliers, customers or other business relations; provided, however, that we may engage with the end customers that have acquired the Equipment to the extent necessary to enable such end customers to utilize the Equipment. Furthermore, to the extent not otherwise prohibited by

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~~The~~law, QTeach ~~Breast~~party ~~Scanner~~agrees ~~has~~that, ~~current~~during ~~applicability~~the asterm aof ~~supplementary~~the ~~imaging~~Amended ~~device~~NXC ~~(not~~Distribution asAgreement and for a ~~replacement~~period ~~for~~of ~~screening~~three ~~mammography);~~years ~~near-term~~after, ~~applicability~~each party shall not, directly or indirectly solicit for ~~determining~~employment ~~breast~~the ~~density,~~employees ~~measuring~~of ~~mass~~the ~~size~~other ~~and~~except ~~growth,~~to ~~and~~the ~~diagnosing~~extent ~~lesions~~that ~~using~~such ~~artificial~~solicitation ~~intelligence;~~is ~~and~~done ~~medium-~~through toa ~~long-term~~general ~~applicability~~advertisement ~~for~~or ~~breast~~solicitation ~~screening~~that asis ~~shown~~not inspecifically ~~Table~~targeting 1.the employees of the other.

Use of the QT Breast Scanner

Value it Adds

QT Timeframe*

Supplementary imaging

Adjunct to screening mammography (not a replacement), particularly for women with dense breasts to identify masses missed by mammography or provide additional information on masses seen, with the potential to reduce unnecessary procedures

Current

Fibroglandular Tissue Volume & the Ratio of Fibroglandular Tissue Volume to Total Breast Volume

Ability to quantify this ratio (a risk factor for breast cancer), without compression or radiation of mammography

Current

Mass Size and Growth

Ability to measure response to treatment and assess mass stability

Short term

A.I.-Based Mass Diagnostics

Reduce unnecessary procedures (biopsies, additional imaging) by identifying lesion type

Short term

Screening for High-Risk Young Women

Provide young women a safe, comfortable, accurate method to screen for breast cancer, as an alternative for breast MRI

Medium term

Table 1

Term

~~__________________~~The Amended NXC Distribution Agreement extends the term from December 31, 2025 until December 31, 2026, unless earlier terminated or extended by mutual written agreement.

*Note:On March 28, 2025, the ~~foregoing~~Company entered into the First Amendment to Amended and Restated Distribution Agreement (the “First Amendment to A&R Distribution Agreement”). The First Amendment to A&R Distribution Agreement amends certain provisions of the Amended NXC Distribution Agreement. It provides, among other things, that the Company reserve the right to sell the Equipment directly to a third party as an exception, and any such direct sale by the Company shall occur after a prior written notification to NXC and shall count towards the MOQs, provided that if a third party is ~~based~~a oncompetitor of NXC as defined in the First Amendment to A&R Distribution Agreement or an existing customer of NXC or NXC’s reseller or sales agent at the time when the Company seek to sell the Equipment directly to the third party, the Company may not sell the Equipment to such third party. It also provides that NXC shall provide the Company with the forecast of the anticipated purchases of Equipment during the subsequent twelve-month period no later than forty-five days prior to the end of each calendar quarter, rather than five days prior to the end of each calendar quarter. No changes are made to the amount of the MOQs by the First Amendment to A&R Distribution Agreement, but the MOQs shall not be binding if at any time (a) the Company cannot fulfill the manufacturing and delivery volumes required for NXC to meet the quarterly MOQs, including due to (i) failures or other circumstances attributable to the Company including, but not limited to, issues relating to design or performance of the Equipment (e.g., failure of the Equipment to meet its published specifications), orders by the FDA or another governmental organization to temporarily or permanently suspend shipments, and to activities or operations of the Company, or (ii) a final non-appealable judgment that would impair the Company’s ~~current~~ability ~~estimates~~to fulfill such manufacturing and distribution volumes as a result of (A) intellectual property infringement made by a third party relating to the ~~timeframe~~Equipment isor ~~subject~~(B) other legal proceedings against the Company; or (b) the Company engage with any competitor or existing customers of NXC or its reseller or sales agent to ~~change~~sell the Equipment in violation of the terms of the Amended NXC Distribution Agreement, as amended. Furthermore, the First Amendment to A&R Distribution Agreement provides that in the event NXC is prevented from selling the Equipment due to ~~various~~actions ~~factors~~of or attributable to the Company, ~~including~~the ~~those~~Company ~~described~~and NXC will discuss in good faith. The Company also agreed to introduce at least one new product improvement per year to the ~~“Risk~~Equipment, ~~Factors”~~that ~~section~~the Company will also timely correct all Equipment bugs or other defects as necessary to address performance issues, and ~~elsewhere~~that inany ~~this~~increases ~~annual~~of ~~report~~the price of the Equipment shall be upon mutual agreement of the parties. Also, in the event of an Equipment Recall (as such term is defined in the First Amendment to A&R Distribution Agreement), the First Amendment to A&R Distribution Agreement provides both parties shall promptly consult and cooperate with the other party, including with respect to the appropriate action to be taken in connection with such Equipment Recall, and mutually agree to appropriately modify the MOQs for the respective quarter or until the Equipment Recall is corrected with mutual agreement with NXC.

~~Breast~~Gulf ~~Scanner~~Medical ~~Clinical~~Distribution ~~Images~~Agreement

~~The~~On ~~images~~August ~~below~~21, 2025, the Company entered into a distribution agreement (~~Image~~the 5“Gulf ~~and~~Medical ~~Image~~Distribution 6Agreement”) ~~compare~~with anGMC. ~~artist’s~~Under ~~depiction~~the terms of the ~~normal~~Gulf ~~breast~~Medical ~~anatomic~~Distribution ~~features~~Agreement, ~~(top)~~the ~~and~~Company ~~QTscan®~~shall ~~images~~authorize ~~rendered~~and bygrant ~~the~~to QTGMC ~~Breast~~the ~~Scanner~~exclusive ofright ato ~~normal~~market, ~~human~~advertise ~~breast~~and ~~(below)~~sell ~~showing~~ the ~~skin,~~QT ~~fat,~~Breast ~~breast~~Scanner ~~duct~~ and ~~glandular~~other ~~(terminal)~~products ~~units~~and ofservices covered by the ~~living~~Gulf ~~breast.~~Medical ~~The~~Distribution ~~Cooper’s~~Agreement ~~ligaments,~~(the ~~ducts,~~“GMC ~~and~~Approved ~~glandular~~Products”) ~~structures~~in ~~are~~the ~~not~~Kingdom ~~visible~~of inSaudi ~~conventional~~Arabia ~~breast~~(the ~~screening~~“GMC ~~imaging~~Territory”).

~~Schematic~~The ~~anatomy~~term of the ~~breast~~Gulf Medical Distribution Agreement commenced on August 21, 2025, and shall remain in force through August 21, 2028 (the “Initial Term”). If GMC has met the GMC Minimum Purchase Requirements (as defined below) during the Initial Term, the Gulf Medical Distribution Agreement shall automatically be extended for an additional one-year term. GMC agrees to meet or exceed the purchase requirements and/or revenue goals for the GMC Approved Products set forth in the Gulf Medical Distribution Agreement (the “GMC Minimum Purchase Requirements”) during the Initial Term. In the event GMC fails to meet these Minimum Purchase Requirements in any year during the Initial Term, the Company may, at its sole option, (a) terminate GMC’s exclusive distributorship rights for the sale and promotion of the GMC Approved Products granted under the Gulf Medical Distribution Agreement and appoint other distributors for the GMC Approved Products in the GMC Territory, or (b) terminate the Gulf Medical Distribution Agreement. Should the Company elect to so terminate GMC’s exclusive distributorship in the GMC Territory, the Company may continue to sell the GMC Approved Products to GMC for GMC to distribute on a non-exclusive basis in the GMC Territory in accordance with the terms and conditions of the Gulf Medical Distribution Agreement, and GMC’s ongoing obligations with regard to

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~~Image~~the 5GMC Minimum Purchase Requirements for the GMC Approved Products shall terminate. Should the Company be unable to furnish GMC with sufficient quantities of the GMC Approved Products, as may be requested by GMC in its GMC Release Orders (as defined below) submitted to the Company in accordance with the terms of the Gulf Medical Distribution Agreement, then the GMC Minimum Purchase Requirement shall be reduced by the quantity of GMC Approved Products that the Company is unable to deliver as requested.

~~Transmission~~GMC ~~(left)~~shall ~~and~~secure ~~reflection~~all ~~tomograms~~required ofgovernmental ~~the~~approvals, ~~breast.~~permits, ~~The~~licenses, ~~white~~customs clearances, and ~~black~~authorizations ~~squares~~required infor ~~the~~shipment ~~speed~~to ofand ~~sound~~use ~~image~~of ~~(left)~~the ~~mark~~QT ~~fat~~Breast ~~and~~Scanners ~~glandular~~in ~~tissue,~~the ~~respectively~~GMC Territory. ~~Single~~The ~~and~~Company ~~double~~shall ~~black~~provide ~~arrows~~training ~~mark~~and ~~ductal~~professional ~~tissue~~services ~~and~~to ~~skin,~~GMC ~~respectively.~~during ~~Reflection~~the ~~image~~term ~~(right):~~of ~~Single~~the ~~white~~Gulf ~~arrows~~Medical ~~mark~~Distribution ~~the~~Agreement ~~connective~~and ~~tissue~~shall ~~identified~~retain asall ~~Cooper’s~~intellectual ~~ligaments.~~property rights.

~~Image~~At 6any time during the term of the Gulf Medical Distribution Agreement, GMC may submit to the Company a blanket purchase order (the “GMC Blanket Purchase Order”) with any client’s requirements for the GMC Approved Products for review and written acceptance by the Company. Thereafter, over the course of the client’s project GMC may submit to the Company one or more release orders for GMC Approved Products to meet the client’s requirements under the applicable GMC Blanket Purchase Order (each, a “GMC Release Order”). If the Company reasonably anticipates being able to meet such requirements, such order shall be deemed approved so long as it conforms to the terms of the Gulf Medical Distribution Agreement. Any terms and conditions in an order that are inconsistent with or in addition to the terms and conditions of the Gulf Medical Distribution Agreement shall be rejected and considered null and of no effect, unless expressly agreed to by the Company in writing. Upon receipt and acceptance of each order, the Company will provide the minimum number of days to ship the QT Breast Scanners and then deliver the QT Breast Scanners to the destinations designated in such orders. GMC will bear all risks of loss or damage to the QT Breast Scanners upon delivery to the designated destinations.

~~Two~~The ~~key~~Company ~~metrics~~will deliver the GMC Approved Products to GMC’s destination(s) designated in ~~breast~~the ~~imaging~~applicable ~~are~~GMC ~~sensitivity~~Release Order. The Company may make partial shipments, to be separately invoiced and ~~specificity.~~paid ~~Mammography~~for ~~has~~when ~~well-recognized~~due ~~challenges~~and ~~with~~GMC ~~sensitivity~~may innot ~~dense~~reject ~~breasts~~partial shipments. ~~Image~~Any 7delay ~~below~~in ~~compares~~delivery ~~the~~of ~~same~~any ~~breast~~installation ~~across~~of ~~different~~GMC ~~imaging~~Approved ~~modalities.~~Products Inwill ~~addition~~not relieve GMC of its obligation to ~~demonstrating~~accept ~~differences~~the inremaining ~~image~~deliveries. ~~quality~~GMC ~~across~~will ~~modalities~~be solely responsible for all shipping, itpackaging, ~~represents~~duties, afees, ~~case~~brokerage, ~~where~~insurance aand ~~mass~~customs ~~was~~clearance ~~not~~and ~~visible~~export ondocumentation, ~~mammography~~as ~~but~~applicable, isand ~~visible~~for onpayment of all costs and charges related thereto, except that the ~~MRI~~Company will arrange the initial packaging and ~~QTscan~~shipping.

~~Image~~All 7quotations, estimates, invoices and payments for GMC Approved Products that GMC purchases from the Company shall be in United States Dollars. Except as GMC and the Company may otherwise mutually agree in writing, provided that GMC maintains a credit limit with the Company’s credit insurance provider that has been approved in writing by the Company, GMC shall pay the Company fifty percent (50%) of the total price of the GMC Release Order upon order placement and fifty percent (50%) within 45 days from the date of shipping of the GMC Approved Products to GMC’s designated location(s), or in any of the agreed upon payment terms. For certain orders as agreed upon by the Parties, GMC shall deliver an irrevocable letter of credit to the Company to secure payment, with such irrevocable letter of credit for any particular order to be based upon the size of the order. GMC will pay all sales, use and other taxes due on sales of GMC Approved Products in the GMC Territory. GMC is not responsible for any taxes outside the GMC Territory.

The Company ~~recently~~has ~~conducted~~provided afor ~~mini study looking specifically at the ability of its technology to identify masses in dense breasts compared to mammography. Forty cases were selected in which there was~~ a ~~finding~~limited onwarranty ~~the QTscan. The cases were selected from a “Case Collection Study to Determine the Accuracy, Call Back and Cancer Detection Rates~~ of ~~QT Ultrasound in Breast Imaging (ACCRUE)” sponsored by QT Ultrasound LLC. This is available~~ at ~~ClinicalTrials.gov~~least ~~Identifier:~~one ~~NCT03052166. Two cases were subsequently excluded as there was not a corresponding mammogram~~year, ~~leaving~~and 38up cases for comparison. The ACCRUE study was a prospective, multicenter, multi-arm case collection study which followed an adaptive design with an initially planned total enrollment of approximately 600 cases to ~~include~~five ~~both benign and malignant cases~~years, ~~representative~~depending of all tissue densities. The study type was observational with an actual enrolment of 755 participants starting in April 2017. The end date was initial December 31, 2019, but actual completion date was January 1, 2020. There were three cohort groups: Cohort A-The group of asymptomatic subjects who have been given BI-RADS 1 or 2 based on ~~their~~the ~~most~~purchase ~~recent~~price ~~standard~~paid ofby ~~care assessment. All subjects received~~ a QTclient ~~Ultrasound scan. Cohort B-The group~~ of ~~asymptomatic~~GMC ~~women~~for ~~who have been given BIRADS categories 4 or 4a, 4b, 4c or 5 based on their most recent standard of care assessment. All subjects received~~ a QTGMC ~~Ultrasound~~Approved ~~scan~~Product. Cohort C -The group of women who have been given BI-RADS categories 1, 2, 3, 4 or (4a, 4b, 4c), 5 or 6 based on their most recent standard of care assessment. All subjects received a QT Ultrasound scan. Subjects are assigned to Cohort C when it has been determined they cannot be assigned to Cohort A or Cohort B. The mammograms were interpreted by board-certified breast radiologists. In 32 of those cases, abnormalities identified using the QTscan were not identified on the mammogram. Image 8 (following) is one of

The Gulf Medical Distribution Agreement can be terminated only with the approval of both parties and, upon termination, GMC shall be permitted to sell any QT Breast Scanners that it holds in accordance with the Gulf Medical Distribution Agreement.

On February 25, 2026, the Company amended the Gulf Medical Distribution Agreement (the “Amended Gulf Medical Distribution Agreement”) to require GMC to pay the Company fifty percent (50%) of the total price of the GMC Release Order upon order placement and fifty percent (50%) within 45 days from the date of shipping of the GMC Approved Products to GMC’s designated location(s), or in any of the agreed upon payment terms. For certain orders as agreed upon by the Company and GMC, GMC shall deliver an irrevocable letter of credit to the Company to secure payment, with such irrevocable letter of credit for any particular order to be based upon the size of the order. The second payment of the fifty percent (50%) will be 30 days following customer acceptance if GMC provides secure payment through an irrevocable letter of credit from an acceptable financial institution. The Amended Gulf Medical Distribution Agreement also established pricing for approved products sold on purchase orders on the Company’s form.

Al Naghi Distribution Agreement

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~~those~~On ~~cases~~January 19, ~~where~~2026, athe ~~solid~~Company ~~mass~~entered ~~was~~into ~~identified~~an onexclusive ~~the~~distribution ~~QTscan~~agreement ~~but not visible on~~ (the ~~mammogram.~~“Al ~~The~~Naghi ~~scope,~~Distribution ~~size~~Agreement”) ~~and~~for ~~design~~the ofCompany’s ~~these~~QTI ~~clinical~~Breast ~~studies~~Acoustic ~~are~~CT ~~conducted~~scanners inand ~~accordance~~QTI ~~with~~Cloud ~~the~~SaaS ~~provisions~~Platform of (the ~~International~~“Al ~~Conference~~Naghi onApproved ~~Harmonization~~Products”) ~~Guidelines~~in ~~for~~the ~~Good~~UAE ~~Clinical Practice and~~ (the ~~Declaration~~“Al ofNaghi ~~Helsinki.~~Territory”) Inwith ~~some~~Al ~~instances~~Naghi, ~~the~~a ~~Company~~leading ordistributor ~~one~~ of ~~its~~medical ~~affiliates~~devices. ~~sponsored~~The orAl ~~designed~~Naghi ~~the~~Distribution ~~clinical~~Agreement ~~studies~~provides ~~and~~for ~~the~~committed, ~~Company’s~~minimum ~~employees~~order ~~analyzed~~quantities orof ~~authored~~seven ~~the~~scanners ~~results,~~in ~~findings,~~2026 or(starting ~~articles.~~in ~~This~~the ~~was~~second anquarter ~~exploratory study~~ of ~~limited~~2026), ~~scope~~increasing ~~in order~~ to ~~determine~~16 ifscanners ~~further~~in ~~studies~~2027 ~~were~~and ~~warranted.~~20 ~~The~~scanners ~~study~~in ~~was~~2028, ~~not powered~~ for ~~statistical~~a ~~analysis,~~total ~~but~~minimum ~~provided~~of ~~information~~43 toscanners ~~support~~representing arevenue ~~broader~~of ~~study.~~more ~~The~~than ~~full~~$24 ~~studies are available at www~~million.~~qtultrasound.com/dense-breast-mass/.~~

~~Example~~The term of the Al Naghi Distribution Agreement commenced on January 19, 2026, and shall remain in force until January 19, 2029 (the “Al Naghi Initial Term”). If Al Naghi has met the Al Naghi Minimum Purchase Requirements (as defined below) during the Al Naghi Initial Term, the Al Naghi Distribution Agreement shall automatically be extended for an additional one-year term. Al Naghi agrees to meet or exceed the purchase requirements and/or revenue goals for the Al Naghi Approved Products set forth in the Al Naghi Distribution Agreement (the “Al Naghi Minimum Purchase Requirements”) during the Al Naghi Initial Term. In the event Al Naghi fails to meet these Al Naghi Minimum Purchase Requirements in any year during the Al Naghi Initial Term, the Company may, at its sole option, (a) ~~QTscan~~terminate ~~mass~~Al Naghi’s exclusive distributorship rights for the sale and promotion of the Al Naghi Approved Products granted under the Al Naghi Distribution Agreement and appoint other distributors for the Al Naghi Approved Products in the Al Naghi Territory, or (~~right~~b) ~~not~~terminate ~~seen~~the Al Naghi Distribution Agreement. Should the Company elect to so terminate Al Naghi’s exclusive distributorship in the Al Naghi Territory, the Company may continue to sell the Al Naghi Approved Products to Al Naghi for Al Naghi to distribute on xa non-~~ray~~exclusive ~~mammography~~basis in the Al Naghi Territory in accordance with the terms and conditions of the Al Naghi Distribution Agreement, and Al Naghi’s ongoing obligations with regard to the Al Naghi Minimum Purchase Requirements for the Al Naghi Approved Products shall terminate. Should the Company be unable to furnish Al Naghi with sufficient quantities of the Al Naghi Approved Products, as may be requested by Al Naghi in the Al Naghi Release Orders (~~left~~as defined below) submitted to the Company in accordance with the terms of the Al Naghi Distribution Agreement, then the Al Naghi Minimum Purchase Requirement shall be reduced by the quantity of Al Naghi Approved Products that the Company is unable to deliver as requested.

~~Image~~Al 8Naghi shall secure all required governmental approvals, permits, licenses, customs clearances, and authorizations required for shipment to and use of the QT Breast Scanners in the Al Naghi Territory. The Company shall provide training and professional services to Al Naghi during the term of the Al Naghi Distribution Agreement and shall retain all intellectual property rights.

~~Some~~At any time during the term of the ~~following~~Al ~~additional~~Naghi ~~studies~~Distribution ~~were~~Agreement, ~~not~~Al ~~conducted~~Naghi bymay submit to the Company ora ~~specifically~~blanket ~~related~~purchase toorder (the ~~QTscan.~~“Al ~~However,~~Naghi Blanket Purchase Order”) with any client’s requirements for the Al Naghi Approved Products for review and written acceptance by the Company. orThereafter, ~~one~~over the course of ~~its~~the ~~affiliates~~client’s ~~sponsored~~project, orAl ~~designed~~Naghi may submit to the ~~clinical~~Company ~~studies~~one or more release orders for Al Naghi Approved Products to meet the ~~Company~~client’s ~~employees~~requirements ~~analyzed~~under orthe ~~authored~~applicable ~~the~~Al ~~results~~Naghi Blanket Purchase Order (each, ~~findings~~a “Al Naghi Release Order”). If the Company reasonably anticipates being able to meet such requirements, orsuch ~~articles~~order ~~which~~shall be deemed approved so long as it conforms to the terms of the Al Naghi Distribution Agreement. Any terms and conditions in an order that are ~~generally~~inconsistent ~~applicable~~with or in addition to the terms and conditions of the Al Naghi Distribution Agreement shall be rejected and considered null and of no effect, unless expressly agreed to by the Company orin writing. Upon receipt and acceptance of each order, the ~~QTscan~~Company will provide the minimum number of days to ship the QT Breast Scanners and then deliver the QT Breast Scanners to the destinations designated in such orders. Al Naghi will bear all risks of loss or damage to the QT Breast Scanners upon delivery to the designated destinations.

1The Company will deliver the Al Naghi Approved Products to Al Naghi’s destination(s) designated in the applicable Al Naghi Release Order.~~M.P.~~ ~~Andre,~~The CCompany ~~Barker,~~may Nmake ~~Sekhon~~partial shipments, Jto ~~Wiskin,~~be Dseparately ~~Borup,~~invoiced Kand paid for when due and Al Naghi may not reject partial shipments. ~~Callahan:~~Any ~~Pre-clinical~~delay ~~experience~~in ~~with~~delivery ~~full-wave~~of ~~inverse~~any ~~scattering~~installment of Al Naghi Approved Products will not relieve Al Naghi of its obligation to accept the remaining deliveries. Al Naghi will be solely responsible for ~~breast~~all ~~imaging:~~shipping, ~~Sound~~packaging, ~~speed~~duties, ~~sensitivity~~fees, ~~Acoustical~~brokerage, ~~Imaging~~insurance ~~29:73-80~~and customs clearance and export documentation, ~~Springer~~as applicable, ~~Dordrecht~~and for payment of all costs and charges related thereto, ~~2009.~~except that the Company will arrange the initial packaging and shipping.

~~The~~All ~~Andre~~quotations, etestimates, alinvoices ~~study~~and ~~was~~payments for Al Naghi Approved Products that Al Naghi purchases from the Company shall be in United States Dollars. Except as Al Naghi and the Company may otherwise mutually agree in writing, provided that Al Naghi maintains a ~~pilot~~credit ~~clinical~~limit ~~study~~with ~~not~~the ~~conducted~~Company that has been approved in writing by the Company, Al Naghi shall pay the Company fifty percent (50%) of the total price of the Release Order upon order placement and ~~there~~fifty ispercent no(50%) ~~comparator.~~within ~~The~~45 ~~number~~days from the date of ~~participants~~shipping ~~was~~of ~~fewer~~the ~~than~~Al ~~20.~~Naghi ~~This~~Approved ~~was~~Products ato ~~registry~~Al ~~study~~Naghi’s ~~not~~designated alocation(s), ~~comparative~~or ~~trial~~in any of the agreed upon payment terms. ~~There~~For ~~were~~certain noorders ~~serious~~as ~~adverse~~agreed ~~events~~upon ~~and~~by nothe ~~statistical~~parties, ~~analysis~~Al ~~was~~Naghi ~~needed~~shall deliver an irrevocable letter of credit to the Company to secure payment, ~~since~~with ~~there~~such ~~was~~irrevocable noletter ~~comparator.~~of credit for any

2.J. Wiskin; D. Borup; S. Johnson; M. Berggren; D. Robinson; J. Smith; J. Chen; Y. Parisky; John Klock, ‘Inverse scattering and refraction corrected reflection for breast cancer imaging’, Jan D’hooge; Stephen A. McAleavey, Eds., Proc. SPIE, 7629, 2010.

The Wiskin et al study was a pilot clinical study involving the participation of Dr. Klock. There is no comparator. The number of participants was fewer than 20. This was a registry study not a comparative trial. There were no serious adverse events and no statistical analysis was needed, since there was no comparator.

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~~3.Pellegretti,~~particular P,order Sto ~~Dellepiane,~~be M.based ~~Vicari,~~upon M.the ~~Zani,~~size M.of ~~Weigel,~~the Dorder. ~~Borup,~~Al J.Naghi ~~Wiskin,~~will U.pay ~~Saueressig,~~all ~~E. Kotter~~sales, use and M.other ~~Langer~~taxes Adue ~~Clinical~~on ~~Experience~~sales of aAl ~~Prototype~~Naghi ~~Automated~~Approved ~~Breast~~Products ~~Ultrasound~~in ~~System~~the ~~Combining~~UAE. ~~Transmission~~Al ~~and~~Naghi ~~Reflection~~is 3Dnot ~~Imaging,~~responsible ~~UFFC~~for ~~2011-IEEE~~any ~~International~~taxes ~~Ultasonics~~outside ~~Symposium~~the ~~Oct~~UAE. ~~18-21, 2011, Session P3Ab, b Tomography.~~

The ~~Pellegretti~~Company ethas alprovided ~~study~~for ~~was~~ a ~~pilot~~limited ~~clinical~~warranty ~~study~~of ~~not~~at ~~conducted~~least byone ~~the~~year, ~~Company~~ and ~~there~~up isto nofive ~~comparator.~~years, ~~The~~depending ~~number~~on ofthe ~~participants~~purchase ~~was~~price ~~fewer~~paid ~~than~~by ~~20. This was~~ a ~~registry~~client ~~study~~of ~~not~~Al aNaghi ~~comparative~~for ~~trial.~~an ~~There~~Al ~~were~~Naghi noApproved ~~serious adverse events and no statistical analysis was needed, since there was no comparator~~Product.

~~4.Andre,~~During M.its ~~PhD~~validity period, ~~James~~the ~~Wiskin,~~Al ~~PhD,~~Naghi ~~Haydee~~Distribution ~~Ojeda-Fournier,~~Agreement ~~MD,~~can ~~Linda~~be ~~Olson,~~terminated ~~MD,~~only ~~David~~with ~~Borup,~~the ~~PhD,~~approval ~~Melissa~~of ~~Ledgerwood,~~both ~~B.S.~~parties and, ~~Steven~~upon ~~Johnson~~termination, ~~PhD,~~Al ~~“Quantitative~~Naghi 3Dshall ~~Whole~~be ~~Breast~~permitted ~~Imaging~~to ~~with~~sell ~~Transmission~~any ~~and~~QT ~~Reflection~~Breast ~~Ultrasound”~~Scanners ~~AAPM~~that ~~Ultrasound~~it ~~Imaging~~holds ~~Symposium~~in ~~Breast~~accordance ~~Imaging~~with ~~and~~the ~~Guidance~~Al ofNaghi ~~Interventions~~Distribution Agreement.

~~This~~Selectively ~~Andre~~Consider etOffshore alMarketing study was a pilot clinical study not conducted by the Company and there is no comparator. The number of participants was fewer than 20. This was a registry study not a comparative trial. There were no serious adverse events and no statistical analysis was needed, since there was no comparator. Opportunities

~~5.J.~~In ~~Wiskin~~2026, D.the ~~Borup,~~Company Kwill remain focused on realizing and maximizing its potential in the U.S. ~~Callahan~~market as well as in the markets of the Kingdom of Saudi Arabia and the UAE, Ywhile also exploring additional distribution arrangements in other GCC countries that accept U.S. ~~Parisky,~~product Jregistration. ~~Smith~~The Company plans to pursue commercialization in Europe and countries recognizing EU registration starting at the end of 2026 and continuing through 2027, Mutilizing selective distribution arrangements. ~~André~~Additionally, opportunistic sales agency–based deals will continue to be pursued in countries accepting U.S. ~~Johnson~~registration, ~~Inverse~~with ~~scattering~~the ~~Results,~~objective ~~Acoustical~~of ~~Imaging~~establishing ~~30,~~key ppopinion leaders (KOLs) to drive market creation and evidence generation. ~~61-68,~~These ~~Springer,~~opportunistic ~~Dordrecht~~deals will be carefully curated, ~~2011.~~as they may require specialized service support models through existing distribution partners.

~~This~~Coverage ~~Wiskin et al study was a pilot clinical study not conducted by the Company~~ and there is no comparator. The number of participants was fewer than 20. This was a registry study not a comparative trial. There were no serious adverse events and no statistical analysis was needed, since there was no comparator. Reimbursement

~~6.Andre,~~Over Mthe past few years, J.the ~~Wiskin~~growth etrate ~~al.,~~of ~~AIUM~~advanced ~~Annual~~imaging ~~Convention,~~volumes ~~New~~has ~~York,~~slowed ~~2011,~~in ~~“Quantitative~~part 3due to additional patient-~~Dimensional~~related ~~Whole~~cost-~~Breast~~sharing ~~Imaging~~programs ~~With~~and ~~Transmission~~an ~~and~~increasing ~~Reflection~~trend ~~Ultrasound”,~~of ~~Advanced~~third-party ~~Breast~~payors ~~Imaging~~intensifying ~~Symposium~~their utilization management efforts, ~~Moderators:~~for M.example, ~~Andre~~through ~~and~~benefit P.managers ~~Carson,~~who Phrequire prior authorizations to control the growth rate of imaging services generally.D. The Company expects that these trends will continue.

~~This~~By ~~Andre~~way etof alexample, ~~study~~in ~~was~~the U.S., the Protecting Access to Medicare Act of 2014 required the Centers for Medicare & Medicaid Services (“CMS”), in conjunction with medical specialty societies, to adopt appropriate use criteria (“AUC”) for certain advanced diagnostic imaging services, including MRI, CT, nuclear medicine (including PET). Beginning in 2020, payment is made to the furnishing professional for an applicable advanced diagnostic imaging service only if the claim indicates that the ordering professional consulted a ~~pilot~~qualified clinical ~~study~~decision ~~not~~support ~~conducted~~mechanism, as identified by the ~~Company~~Department of Health and ~~there~~Human isServices no(“HHS”), ~~comparator~~as to whether the ordered service adheres to the applicable AUC. ~~The~~Applicable ~~number~~settings ofinclude ~~participants~~physician ~~was~~offices, ~~fewer~~hospital ~~than~~outpatient 20departments, including emergency departments, ambulatory surgical centers and independent diagnostic testing facilities. ~~This~~Advanced ~~was~~imaging aservices ~~registry~~ordered ~~study~~by ~~not~~certain aphysicians ~~comparative~~identified ~~trial~~as having outlier-ordering partners will be subject to prior authorization for applicable imaging services provided to Medicare beneficiaries. ~~There~~The ~~were~~outlier nomethodology ~~serious~~used ~~adverse~~by ~~events~~CMS ~~and~~will nobe ~~statistical~~subject ~~analysis~~to ~~was~~future ~~needed,~~notice ~~since~~and ~~there~~comment ~~was~~rulemaking nobefore ~~comparator~~the prior authorization component is implemented. The Company cannot predict the full impact of this project.

~~7.John~~The CCompany is pursuing a phased, multi-year strategy to establish appropriate Current Procedural Terminology (“CPT”) coding and reimbursement pathways for its QT Breast Scanner and related technology. ~~Klock~~In 2026, ~~Elaine~~the ~~Iuanow~~Company will continue to use the unlisted CPT code 76999, ~~Bilal~~supported ~~Malik~~by robust documentation and clinical evidence, ~~Nancy~~to Afacilitate payer education and reimbursement on a case-by-case basis. ~~Obuchowski~~In parallel, ~~James~~the ~~Wiskin~~Company has submitted an application for a New Technology Ambulatory Payment Classification (“New Tech APC”) to the CMS in September 2025, seeking hospital outpatient reimbursement under the Medicare Outpatient Prospective Payment System (“OPPS”) framework. This approach will allow the Company to expand clinical use while building the necessary data and ~~Mark~~adoption ~~Lenox~~to support formal code creation. ~~Anatomy-Correlated~~In ~~Breast~~November ~~Imaging~~2025, the Company applied for a Category III CPT code from the American Medical Association (“AMA”), which is designed to support emerging technologies and ~~Visual~~procedures ~~Grading~~while ~~Analysis~~further ~~Using~~evidence ~~Quantitative~~is ~~Transmission~~gathered. ~~Ultrasound~~On Feb 23, 2026, the AMA CPT (Current Procedural Terminology) Editorial Panel approved a new Category III CPTTM code for 3D quantitative transmission volumetric ultrasound tomography of the breast. The ~~International~~new ~~Journal~~Category III code, X579T, represents a significant milestone in the clinical and commercial advancement of ~~Biomedical~~QT Imaging’s ~~Volume~~technology, ~~2016~~recognizing the distinct clinical service enabled by its radiation-free, ~~Article~~compression-free, ID3D ~~7570406~~breast imaging platform. The new CPT code ensures standardized reporting of this emerging imaging service, 9supporting ~~pages~~data ~~http://dx~~collection, utilization tracking and continued evaluation by clinicians, payers and health systems.~~doi~~ The code is scheduled for release on July 1, 2026, with an effective date of January 1, 2027.~~org/10.1155/2016/7570406~~ This staged strategy reflects a deliberate and structured path toward eventual Category I CPT code status, ensuring alignment with payer requirements, coding norms, and clinical integration milestones.

This Klock et al study was a comparative clinical study of QT Breast Imaging vs standard X-ray mammography done at the request of the FDA, therefore it was not a clinical outcome study. The number of participants was fewer than 20. All images were anonymized. This was a registry study not a comparative outcome trial of patient results. There were no serious adverse events and no statistical analysis was needed, since the study was a simple one requested by the FDA to see the trends-analysis of the QT versus the Mammography in identifying structures in the breast.

8.Bilal Malik Ph.D.*, John Klock M.D., James Wiskin Ph.D., and Mark Lenox Ph.D. Objective breast tissue image classification using Quantitative Transmission ultrasound tomography. Nature Sci. Rep. 6, 38857; doi: 10.1038/srep38857 (2016). https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5146962/

This Malik et al study was a comparative clinical study of the Company vs standard tissue pathological analysis to determine the precise structure/image correlations of QT Breast Imaging. The study was not a clinical outcome study. The number of participants was fewer than 20. All images were anonymized. This was not a comparative outcome trial of patient results. There were no serious adverse events and no statistical analysis was needed, since the study was a simple one to determine tissue pathology correlations with the QT images.

9.Elaine Iuanow, MD, Kathleen Smith, MBA, Nancy A. Obuchowski PhD†, Jennifer Bullen MS† and John C. Klock, MD. Accuracy of Cyst vs. Solid Diagnosis in the Breast Using Quantitative Transmission (QT) Ultrasound. Academic Radiology 2017 Vol 24:1148-1153; doi: 10.1016/j.acra.2017.03.024. Epub 2017 May 23; PubMed ID 28549870. Academic Radiology has posted the study in full for free. http://www.healthimaging.com/topics/womens-health/breast-imaging/and-coming-ultrasound-technology-shows-prowess-mammography-adjunct.

This Iuanow et al study was a comparative clinical study of the Company vs standard tissue biopsy analysis to validate the structure/image correlations of QT Breast Imaging, therefore it was not a clinical outcome study. The number of

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~~participants~~Third-party ~~was~~payors ~~fewer~~may ~~than~~impose ~~20.~~limits ~~All~~on ~~images~~coverage ~~were~~or ~~anonymized.~~reimbursement ~~This~~for ~~was~~diagnostic imaging services, including denying reimbursement for tests that do not afollow ~~comparative~~recommended ~~outcome~~diagnostic ~~trial~~procedures ofor ~~patient~~can ~~results~~only be billed using an unlisted or miscellaneous code. ~~There~~To ~~were~~the noextent ~~serious~~the ~~adverse~~Company’s ~~events~~customers will depend on third-party payors, unfavorable coding, coverage and noreimbursement ~~statistical~~policies ~~analysis~~may ~~was~~constrict ~~needed~~the profit margins of the Company’s provider customers, ~~since~~which may force us to lower the ~~study~~Company’s ~~was~~fees ato ~~simple~~attract ~~one~~and retain customers. If the Company is required to ~~determine~~request ~~tissue~~new ~~pathology~~billing ~~correlations~~codes ~~with~~that more precisely identify and describe the QTCompany’s ~~images~~imaging services, coverage is limited or reimbursement rates are inadequate, a healthcare provider might find it financially unattractive to own diagnostic imaging systems. It is possible that third-party payor coding, coverage and reimbursement policies will affect the need or prices for the Company’s products in the future, which could significantly affect the Company’s financial performance and the Company’s ability to conduct the Company’s business.

~~10.John~~Industry C& ~~Klock,~~Market ~~Elaine~~Opportunity Iuanow, Kathleen Smith, Nancy A and Obuchowski Visual Grading Assessment of Quantitative Transmission Ultrasound Compared to Digital X-ray Mammography and Hand-held Ultrasound in Identifying Ten Breast Anatomical Structures. BAOJ Clinical Trials 3: 015. (2017). https://bioaccent.org/clinical-trials/clinical-trials15.pdf

~~This~~Doctors ~~Klock~~and ethospitals alincreasingly ~~study~~rely ~~was~~on amedical ~~comparative~~imaging ~~clinical~~to ~~study~~screen offor QTand ~~Breast~~diagnose ~~Imaging~~cancer, vsguide ~~standard~~and ~~X-ray~~monitor ~~mammography~~treatment ~~and~~such ~~breast~~as ~~examination~~drugs, ~~using~~radiation, ~~handheld~~and ~~ultrasound~~surgery, ~~done~~and atenable ~~the~~minimally ~~request~~invasive ofprocedures. ~~the~~As ~~FDA~~a result, ~~therefore~~medical itimaging ~~was~~represents ~~not~~ a ~~clinical~~substantial ~~outcome~~market ~~study~~opportunity. The ~~number~~global ofmedical ~~participants~~imaging ~~was~~market ~~fewer~~is ~~than~~estimated ~~20.~~at ~~All~~more ~~images~~than ~~were~~$40 ~~anonymized.~~billion ~~This~~annually, ~~was~~with aroughly ~~registry~~$10 ~~study~~billion ~~not~~attributable ato ~~comparative~~the ~~outcome~~United ~~trial of patient results~~States.14 ~~There~~Global ~~were~~cancer noscreening, ~~serious~~with ~~adverse~~an ~~events~~approximately ~~and~~$160 nobillion ~~statistical~~market ~~analysis~~size ~~was~~in ~~needed~~2025, ~~since~~is ~~the~~expected ~~study was a simple one requested by the FDA~~ to ~~see~~grow ~~the~~at ~~trends-analysis~~a CAGR of ~~the~~12% QTand ~~versus~~reach ~~the~~approximately ~~Mammography~~$470 inbillion ~~identifying structures~~ in ~~the breast~~2033. 15

~~11.Bilal~~Breast ~~Malik,~~Imaging Alyson Terry, John Klock and Mark Lenox. Sensitivity of Quantitative Transmission ultrasound to detection of microcalcifications. SPIE (International Society for Optics and Photonics) Meeting Houston Texas February 20, 2018.

~~This~~Breast ~~Malik~~cancer etdetection aland ~~study~~diagnostic ~~was~~technologies a(including ~~pilot~~mammography, ~~clinical~~MRI, ~~study~~and ~~involving~~ultrasound, ~~the~~as ~~participation~~well ofas ~~Dr.~~genetic ~~Klock.~~testing ~~There~~and isimage noguided ~~comparator.~~breast ~~The~~biopsy) ~~number~~are a significant part of ~~participants~~the ~~was~~medical ~~fewer~~imaging ~~than~~market ~~20.~~and ~~All~~are ~~images~~estimated ~~were~~to ~~anonymized~~represent a $6.04 ~~This~~billion ~~was~~global amarket ~~registry~~in ~~study~~2025, ~~not~~is aprojected ~~comparative~~to ~~outcome~~reach ~~trial~~$13.2 billion in 2034, with an ongoing CAGR of ~~patient~~roughly ~~results~~9%.16 ~~There~~The ~~were~~market nois ~~serious~~segmented ~~adverse~~by ~~events~~technology, ~~and~~primarily nobetween ~~statistical~~ionizing ~~analysis~~breast ~~was~~imaging ~~needed~~(e.g., ~~since~~mammography) ~~the~~and ~~study~~non-ionizing ~~was~~breast aimaging, ~~simple~~which ~~one~~includes ~~requested~~ultrasound byand ~~the~~MRI. ~~FDA~~The non-ionizing segment is expected to ~~see~~grow at a faster rate17 than the ~~trends-analysis~~ionizing segment due to technological advances such as better segmentation of ~~the~~anatomical QTdetail, ~~versus~~higher ~~the~~sensitivity ~~Mammography~~to insmall ~~identifying~~breast ~~structures~~lesions in ~~the~~women with dense breast tissue18, and fewer false positives.

12The current standard of care for imaging in breast cancer screening, diagnosis, and treatment is far from satisfactory and may involve certain side effects.~~Malik~~ BThere are adverse effects to the use of medical imaging methods such as ionizing radiation, ~~Klock~~mammography, JCand MRI. ~~Breast~~Generally, ~~Cyst~~the ~~Fluid~~process ~~Analysis~~starts ~~Correlations~~with X-ray mammography, the primary screening tool for women. Mammography uses radiation, which in sufficient cumulative doses can increase the risk of cancer; and is uncomfortable or too painful for patients as it involves breast compression. Another adverse effect is the inefficiency of mammography in detection of cancer in women with ~~Speed~~dense breasts. There is a psychological adverse effect of ~~Sound~~callbacks ~~Using~~for ~~Transmission~~adjunct ~~Ultrasound~~screening and diagnosis include ultrasound, ~~Academic~~MRI, ~~Radiology~~and ~~26:76-85~~may include biopsies. This process is expensive, ~~Jan~~time ~~2019~~consuming, ~~https://www~~and can be mentally and physically trying for women.~~sciencedirect~~ Also, the use of three imaging modalities in the process speaks to the weakness of any one in adequately screening for breast cancer.~~com/science/article/pii/S1076633218301788~~ MRI may take place in a closed environment which may cause claustrophobia, require sedation or general anesthesia and may require injection of a heavy-metal contrast agent. The use of sedation or anesthetic drugs risks severe compromise of respiratory and cardiac function.

~~This~~Regarding ~~Malik~~CT, etthe alharmful ~~study~~effects ~~was a comparative clinical study~~ of ~~the~~radiation ~~Company~~used vsin ~~standard~~ionizing ~~tissue~~radiation ~~biopsy~~exposure ~~chemical~~raises ~~and cytological analysis to validate~~ the ~~structure/image~~risk ~~correlations~~ of QTcancer, ~~Breast~~including ~~Imaging~~leukemia, ~~therefore~~breast itcancer, ~~was~~thyroid ~~not~~cancer aand ~~clinical~~brain ~~outcome study~~cancer. ~~The~~These ~~number~~issues ofmake ~~participants~~MRI ~~was~~preferred fewer than 20. All images were anonymized. This was not a comparative outcome trial of patient results. There were no serious adverse events and no statistical analysis was needed, since the study was a simple one to ~~determine~~CT ~~tissue~~for ~~pathology~~all ~~correlations~~but ~~with~~trauma ~~the QT images~~evaluation.

~~13.J~~14 ~~Wiskin~~See, Be.g. ~~Malik~~Fortune Business Insights, RMedical ~~Natesan~~Imaging Market Size, MShare ~~Lenox.~~& ~~Quantitative~~Industry ~~Assessment~~Analysis, ofBy ~~Breast~~Type ~~Density~~(MRI, ~~Using~~CT, ~~Transmission~~X-ray, Ultrasound, ~~Tomogaphy.~~Molecular ~~Medical~~Imaging), ~~Physics~~By ~~VolXXX~~Application, By End User, and Regional Forecast, 2025–2032 (updated 2024), available at: https://~~doi~~www.~~org/10~~fortunebusinessinsights.~~1002~~com/mpindustry-reports/medical-imaging-equipment-market-100382.~~13503~~

~~This~~15 ~~Wiskin~~See, ete.g. alFortune ~~study~~Business ~~was~~Insights, aMedical ~~comparative~~Imaging ~~clinical~~Market ~~study~~Size, ofShare ~~the~~& ~~Company~~Industry vsAnalysis, ~~standard~~By ~~breast~~Type ~~density~~(Magnetic ~~measurements~~Resonance ~~using~~Imaging, Computed Tomography, X-ray, ~~mammography~~Ultrasound, toand ~~validate~~Molecular ~~the~~Imaging), ~~software~~By ~~used~~Application to(Cardiology, ~~determine~~Neurology, ~~breast~~Orthopedics, ~~fibroglandular~~Gynecology, ~~volumes~~Oncology, inand ~~women.~~Others), ItBy ~~was~~End ~~not~~User a(Hospitals, ~~clinical~~Specialty ~~outcome~~Clinics, ~~study.~~Diagnostic ~~The~~Imaging ~~number~~Centers, ofand ~~participants~~Others), ~~was~~and ~~fewer~~Regional ~~than~~Forecast, ~~30.~~2026-2034 ~~All images were anonymized~~(Feb. ~~This was not a comparative outcome trial of patient results. There were no serious adverse events and no statistical analysis was needed~~2026), ~~since~~available ~~the~~at: ~~study was a simple one to determine tissue pathology correlations with the QT images~~https://www. fortunebusinessinsights.com/industry-reports/medical-imaging-equipment-market-100382.

~~14.Natesan~~16 RSee, ~~Wiskin~~Fortune ~~JW,~~Business ~~Lee S~~Insights, ~~Malik~~Breast B.Imaging ~~Quantitative~~Market ~~assessment~~Size, ofShare ~~breast~~& ~~density:~~Industry ~~transmission~~Analysis, ~~ultrasound~~By isProduct, ~~comparable~~Technology, toEnd ~~mammography~~User, ~~with~~and ~~tomosynthesis.~~Regional ~~Cancer~~Forecast, ~~Prevention~~2026–2034 ~~Research~~(2025), ~~12:871-826~~available ~~2019. Doi~~at: ~~10.1158/1940-6207.CAPR-19-068~~ https://~~cancerpreventionresearch~~www.~~aacrjournals~~fortunebusinessinsights.~~org~~com/~~content~~industry-reports/~~early/2019/10/23/1940~~breast-~~6207.CAPR~~imaging-19market-~~0268~~ 100218.

~~This~~17 ~~Natesan~~See, etGrand alView ~~study~~Research, ~~was~~Magnetic aResonance ~~comparative~~Imaging ~~clinical~~Market ~~study~~Size, ofShare ~~the~~& ~~Company~~Trends vsAnalysis ~~standard~~by ~~breast~~Architecture, ~~density~~by ~~measurements~~Field ~~using~~Strength, ~~X-ray~~by ~~mammography~~Application to(Brain ~~validate~~& ~~the~~Neurological, ~~software~~Vascular), ~~used~~by toEnd ~~determine~~Use, ~~breast~~by ~~fibroglandular~~Region, ~~volumes~~and inSegment ~~women.~~Forecasts, It2025-2030, ~~was~~available ~~not~~at: ~~a clinical outcome study~~https://www. ~~The number of participants was fewer than 50~~grandviewresearch. ~~All images were anonymized. This was not a comparative outcome trial of patient results. There were no serious adverse events and the statistical~~ com/industry-analysis/magnetic-resonance-imaging-market ~~was~~(last avisited ~~Pearson Correlation Coefficient of QT fibroglandular volume versus the Volpara breast volume as shown below:~~ 2026).

18 National Cancer Institute, Dense Breasts: Answers to Commonly Asked Questions (“Breasts contain glandular tissue, fibrous connective tissue, and fatty breast tissue. Breast density describes the relative amount of these tissues as seen on a mammogram, available at: https://www.cancer.gov/types/breast/screening/dense-breasts (Dec. 2, 2025).

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~~15.Wiskin,~~The ~~J.,~~QT ~~Malik~~Breast Scanner has no reports of adverse effects from the more than 30,000 Bscans performed to date. Similar to other ultrasound devices, ~~Borup~~due to the low frequency of the waves of those scanners, D.there etare alno known significant risks reported in general clinical practice. ~~Full~~The ~~wave~~QT 3DBreast ~~inverse~~Scanner ~~scattering~~does ~~transmission~~not ~~ultrasound~~require ~~tomography~~potentially harmful ionizing radiation or anesthesia and is done in an open environment thereby decreasing stress and the ~~presence~~necessity of ~~high contrast~~sedation. ~~Sci~~The ~~Rep~~QT ~~10,~~Breast ~~20166~~Scanner ~~(2020).~~does ~~https://doi~~not cause breast implant displacement or rupture.~~org/10.1038/s41598-020-76754-3.~~

~~This~~The ~~Wiskin et al study was a comparative clinical study of the~~ Company’s vsopportunity ~~standard~~in ~~MRI~~breast imaging ofis ~~human knees.~~ to ~~validate~~speed the ~~performance~~time ~~of the Company~~ to ~~standard~~diagnosis ~~orthopedic~~for ~~MRI~~women ~~imaging.~~with Itcancer, ~~was~~and ~~not~~to aprovide ~~clinical~~assurance ~~outcome~~for ~~study.~~women ~~The~~who ~~number~~do ofnot ~~participants~~have ~~was~~the ~~fewer~~disease ~~than~~with ~~30. All images were anonymized. This was not~~ a ~~comparative~~better ~~outcome trial of~~ patient ~~results.~~experience ~~There were no serious adverse events~~ and nolower ~~statistical~~cost ~~analysis~~than ~~was needed, since~~ the ~~study~~current ~~was~~standard aof ~~simple one to determine tissue pathology correlations with the QT images~~care.

~~16.Wiskin~~While J,the ~~Malik~~Company B,believes ~~Ruoff~~women Cwill embrace its technology, ~~Pirshaffiey~~the NCompany is focused on achieving clinical adoption through the medical community, ~~Klock~~which J.requires ~~Whole~~continuing ~~body~~research ~~imaging~~on ~~using~~the ~~low~~clinical ~~frequency~~efficacy ~~transmission~~of ~~ultrasound.~~the ~~Academic~~images ~~Radiology~~rendered ~~2023~~by ~~https://www.academicradiology.org/article/S1076-6332~~the QT Breast Scanner known as a QTscan® image and development of key opinion leaders (23“KOLs”)~~00033-8/fulltext~~ who can speak to the clinical value of its machines in practice.

~~This~~There ~~Wiskin~~are etthree alprimary ~~study~~technologies ~~was~~within ~~a comparative clinical study of~~ the ~~Company vs standard 3~~non-~~Tesla~~ionizing ~~MRI~~breast imaging ofsegment: 4Automated ~~neonatal~~Breast ~~piglets~~Ultrasound asSystems ~~surrogates~~or ~~for~~ABUS ~~human~~(as ~~newborn~~defined ~~infants.~~below); ~~This~~Breast ~~study~~Ultrasound ~~was~~Tomography ~~done~~Systems; to validate the performance of the Company to standard MRI imaging. It was not a clinical outcome study. This was a piglet study. No statistical analysis was needed, since the study was a simple one to determine tissue pathology correlations with the QT images and ~~with~~Photoacoustic ~~MRI images~~Imaging.

~~17.Bilal~~Automated ~~Malik,~~Breast ~~PhD, Elaine Iuanow, MD, John Klock, MD. An Exploratory Multi-reader, Multi-case Study Comparing Transmission~~ Ultrasound toSystems Mammography on Recall Rates and Detection Rates for Breast Cancer Lesions. Academic Radiology Vol 29 – Supplement 1 S10-S18, Jan 1, 2022. doi:https://doi.org/10.1016/j.acra.2020.11.0.11 and https://www.academicradiology.org/article/S1076-6332(20“ABUS”)~~30646-2/fulltext~~

InABUS ~~this~~are ~~Malik~~an etemerging aland ~~study,~~rapidly ~~three-dimensional~~growing ~~Quantitative~~segment ~~Transmission~~of ~~(“QT”) ultrasound imaging was used for~~ the ~~detection and diagnosis of~~ breast ~~cancer~~imaging market. QTABUS ~~ultrasound~~systems ~~has~~are ~~high~~designed ~~resolution and high contrast~~ to ~~noise~~improve ~~ratio,~~cancer ~~making it effective in evaluating breast tissue. This study compared radiologists’ performance of noncancer recall rates and lesion~~ detection ~~rates using QT Ultrasound versus full-field digital mammography (“FFDM”)~~ in awomen cross section of female subjects. In this multi-reader multi-case (“MRMC”) study, we examined retrospective data from two clinical trials conducted at five sites. All subjects received FFDM and QT scans within 90 days. Data were analyzed in a reader study with ~~full~~dense ~~factorial design involving 22 radiologists and 108~~ breast ~~cases~~tissue ~~(42~~by ~~normal,~~providing ~~39 pathology-confirmed benign~~standardized, ~~and 27 pathology~~operator-~~confirmed~~independent ~~cancer cases). The main results used a random~~whole-~~reader~~breast ~~random-case~~ultrasound ~~analysis~~imaging ~~adjusted~~as ~~for location bias performed after~~ a ~~primary~~supplement ~~predefined~~to ~~random-reader fixed-case analysis~~mammography. ~~The~~Increasing ~~readers’~~recognition ~~mean rate~~ of ~~detecting~~the ~~lesions~~limitations of ~~any~~mammography ~~type~~for ~~was~~women 4%with ~~higher~~dense ~~(p-value~~breasts, >along ~~0.05)~~ with ~~the~~regulatory ~~Company.~~requirements ~~The~~for ~~mean~~breast ~~non-cancer~~density ~~recall~~notification ~~rate~~in ~~improved~~many ~~significantly~~jurisdictions, ~~showing~~has adriven ~~decrease~~growing ofclinical ~~16%~~adoption ~~with~~of QTABUS ~~(p-value > 0~~technology.~~03),~~ atAs ~~the expense of~~ a 2%result, ~~decrease in~~ the ~~mean~~global ~~cancer~~ABUS ~~recall~~market ~~rate~~is ~~(p-value~~estimated ~~> 0.05) in comparison~~ to ~~FFDM.~~exceed ~~Combining~~$1 ~~performance~~billion onin ~~cancer~~the mid-2020s and ~~noncancer~~is ~~recall~~projected ~~rates,~~to ~~the~~grow ~~mean~~at ~~area~~a ~~under~~CAGR ~~the receiver operator curve~~ of ~~confidence~~roughly ~~scores improved significantly by 10~~13–16% ~~with~~in QTthe ~~(p-value~~coming =years, ~~0.01).~~reflecting ~~This~~continued ~~MRMC~~expansion ~~study~~of ~~indicated~~breast ~~that QTscan improves non-~~cancer ~~recall~~screening ~~rates~~programs ~~without~~and ~~substantially~~demand ~~affecting~~for ~~cancer~~supplemental ~~recall~~imaging ~~rates~~modalities. 19

ABUS technologies typically use a reflection transducer20 (5-15 MHz) and not transmitting setup, in a “motorized” arrangement. The major developers of such systems include: 1) the Acuson S2000 ABVS (sold by Siemens); 2) the Invenia System (sold by GE Healthcare); 3) a manual video loop AWBS System (sold by Sono-Cine); and 4) a motorized single transducer Sofia System (sold by Hitachi.). All of these systems produce B-mode reflection images21.

Breast Ultrasound Tomography Systems

These technologies use traditional reflection transducers22 in an “array” configuration around the breast: 1) Mastoscopia (Greece); 2) the KIT system (research only) from Karlsruhe University in Germany; and 3) the Delphinus System.

Photoacoustic Imaging

Photoacoustic imaging systems utilize lasers to excite tissues and produce acoustic energy that subsequently create images of the breast vasculature.23 Such systems include both photoacoustic tomography (“PAT”) and photoacoustic imaging (“PAI”) systems. While the PAT systems allow volumetric imaging by reconstructing stacks of 2D images, the PAI systems only allow superimposition of photoacoustic signal information on top of conventional B-mode ultrasound. Note that in comparison to ultrasound, photoacoustic imaging systems inherently lack the ability to image the tissue anatomy and

19 See, Future Market Insights, Automated Breast Ultrasound Systems Market Outlook 2025–2035, available at:

https://www.futuremarketinsights.com/reports/automated-breast-ultrasound-system-market (2025).

20 A medical reflection transducer, also known as an ultrasound transducer, is a device that converts electrical energy into sound waves, and the back again into electrical energy. It is used in medical imaging to produce images of internal organs and tissues in the body, and it is used in various medical imaging techniques such as ultrasound, echocardiography and Doppler imaging. See, e.g., ECG & ECHO Learning, The Ultrasound Transducer, available at https://ecgwaves.com/topic/the-ultrasound-transmitter-probe/ (last visited Apr. 4, 2023); see also, FDA, Ultrasound Imaging Sept. 28, 2022), https://www.fda.gov/radiation-emitting-products/medical-imaging/ultrasound-imaging.

21 B-mode ultrasound, also known as 2D ultrasound, is a type of ultrasound imaging where “a linear array of transducers simultaneously scans a plane through the body that can be viewed as a two-dimensional image on screen.” See, NIH, National Library of Medicine, Carovac A., Smajlovic F., Junuzovic D., Application of Ultrasound in Medicine, 19(3) Acta Inform Med. 168-171 (Sept. 2011), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3564184/.

22 Medical reflection transducer, also known as an ultrasound transducer, is a device that converts electrical energy into sound waves, and the back again into electrical energy. It is used in medical imaging to produce images of internal organs and tissues in the body, and it is used in various medical imaging techniques such as ultrasound, echocardiography and Doppler imaging. See, e.g., ECG & ECHO Learning, The Ultrasound Transducer, available at https://ecgwaves.com/topic/the-ultrasound-transmitter-probe/ (last visited Apr. 4, 2023); see also, FDA, Ultrasound Imaging Sept. 28, 2022), https://www.fda.gov/radiation-emitting-products/medical-imaging/ultrasound-imaging.

23 Breast vasculature refers to the blood vessels that supply and drain blood from the breast tissue. The breast is a highly vascularized organ, and the blood supply comes from a network of arteries and veins that run throughout the breast tissue. See, NIH, National Library of Medicine, Yusuf S. Khan, Hussain Sajjad, Anatomy, Thorax, Mammary Gland, available at https://www.ncbi.nlm.nih.gov/books/NBK547666/ (last updated July 25, 2022).

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~~STATISTICAL~~essentially ~~ANALYSIS—The~~only ~~data~~image ~~were analyzed for~~ the ~~entire~~vasculature ~~cohort of 108 breast cases~~ (~~42 normal~~i.e., ~~39 pathology-confirmed benign~~blood, ~~and~~which 27is ~~pathology-confirmed cancer cases) using two general approaches:~~ a ~~random-reader~~strong ~~fixed-cases~~absorber ~~(“RRFC”)~~of ~~analysis and a random-readers random cases (“RRRC”~~light) ~~analysis~~. ~~RRFC~~For ~~analysis~~PAT ~~generalizes~~systems, tothere ~~the~~is ~~population~~no ofclinical ~~readers,~~trial ~~but~~data isavailable ~~specific~~ (to ~~the~~our ~~particular~~knowledge) ~~case set~~ and isno ~~termed~~PAT ~~random-reader~~systems ~~fixed-cases~~have ~~analysis.~~been Inapproved ~~comparison,~~for ~~RRRC~~clinical ~~analysis~~use. ~~generalizes~~For ~~both~~PAI ~~the~~systems, ~~case set and~~ the ~~population~~Imagio ofBreast ~~readers.~~Imaging ~~The~~has ~~RRRC~~been ~~analysis~~used ~~was~~in ~~expected~~clinical totrials ~~provide~~and ~~results~~is ~~more~~FDA ~~generalizable~~cleared to ~~new~~be ~~readers~~used ~~reading~~as ~~new~~an ~~cases,~~adjunct ~~but with wider confidence levels compared~~ to ~~the~~conventional ~~RRFC~~handheld ~~analysis~~breast ultrasound.

~~For~~All ~~both approaches, performance comparisons between QT and FFDM were summarized in terms~~ of ~~mean differences between readers and 95% confidence intervals (“CI”) for~~ these ~~differences~~technologies ~~with~~face ~~p-values~~challenges ~~determining~~to ~~the~~expansion, ~~degree~~including ofFDA ~~statistical~~clearances ~~significance. The performance metrics included non-cancer~~ and ~~cancer~~insurance ~~recall rates and detection rates for all lesions~~reimbursement. ~~In addition~~However, the ~~study~~shortcomings ~~analyzed~~of ~~the~~other ~~mean~~imaging ~~area~~methods ~~under~~such ~~the receiver operator curve (“ROC-AUC”) based on the readers’ confidence scores~~ as aionized ~~statistically~~radiation ~~efficient~~exposure, ~~approach~~high tocosts ~~evaluating the cancer~~ and ~~noncancer~~deployment ~~performance~~challenges ~~metrics combined into a single measurement. These analyses were performed according to the method~~ of ~~Obuchowski~~MRI, &and ~~Rockette with Hillis adjustment to~~ the ~~degrees~~inefficiency of ~~freedom.~~mammography ~~The~~in ~~RRRC~~detection ~~analysis~~ of ~~ROC-AUC~~cancer ~~was~~in ~~performed~~women with ~~the~~dense ~~software~~breasts, ~~package~~are ~~ORDBM~~sufficiently ~~MRMC~~compelling ~~2.5,~~for ~~written~~industry byto ~~Stephen~~address L,these ~~Kevin M. Schwartz~~obstacles, and ~~Kevin~~these S.shortcomings ~~Berbaum.~~will ~~The~~continue ~~trapezoidal/Wilcoxon~~to ~~method~~create ~~for~~an ~~curve~~opportunity ~~fitting and jackknifing~~ for ~~the~~development covariance estimation were used in the analysis. All other statistical analyses were performed in the statistical computing environment R version 3.4.0 or higher. No statistical adjustments were made for multiple analyses. The ground truth was established by one-year follow-up mammogram results for the normal cases and ~~pathology~~commercialization ~~results~~of ~~for~~advanced ~~the~~screening ~~benign~~systems ~~and~~such ~~cancer cases. All RRFC and RRRC results were adjusted post-hoc for location bias, considering recalls~~ as ~~correct only when~~ the ~~decisions were based on the correct ground-truth lesions~~Company’s. This adjustment is indicated because the severity of location bias is dissimilar for the two imaging modalities. Therefore, the study was adjusted for location bias to avoid favoring the modality with higher false-positive rates.

~~Leveraging~~Company’s ~~the~~Products ~~speed~~& ofProduct ~~sound~~Roadmap attribute of transmission ultrasound, the QTscan offers advantages in specificity as well. Image 9 below compares the same breast on mammography and the QTscan. While the mass may be visible in mammography, mammography cannot be specific about whether the mass is malignant or benign. The QTscan identifies the mass as a benign cyst based on speed of sound as well as morphology.18

~~Example~~QT ofBreast aScanner ~~cyst visible on the QTscan (right) not sees on x-ray mammography (left)~~

~~Image~~The 9Need: A safe, painless imaging device that provides conclusive breast health assessment

~~18 See, HealthImaging, Up-and-coming Ultrasound Technology Shows Prowess as Mammography Adjunct (May 24, 2017), available at https~~Background://healthimaging.com/topics/medical-imaging/womens-imaging/and-coming-ultrasound-technology-shows-prowess-mammography (providing a link to Academic Radiology, through which the study is accessible free of charge at https://www.academicradiology.org/article/S1076-6332(17)30207-6/fulltext).

Breast cancer is the most commonly diagnosed women’s cancer in the United States, according to the National Cancer Institute. The American Cancer Society estimates that in 2022, 287,850 women in the United States have been diagnosed with invasive and in situ (early stage) breast cancer, and breast cancer has claimed the lives of 40,920 women.24 The American Cancer Society further estimates that one out of every eight women will develop breast cancer at some point during her life and one in every 42 women who turns 50 today will have a diagnosis of breast cancer before she turns 60.

There are several dominant screening and diagnostic technologies that are used both independently and dependently to locate cancers at an early stage and improve treatment outcomes. Each of the currently available non-surgical modalities for breast cancer detection has various clinical limitations. Screening methods and technologies include: (i) breast self-examination and clinical breast examination; (ii) mammography, including screening mammography, diagnostic mammography, and mammography with computer aided detection; (iii) Hand-Held Ultrasound (“HHUS”) and (iv) MRI.

24 See, American Cancer Society, Breast Cancer Facts & Figures, available at https://www.cancer.org/research/cancer-facts-statistics/breast-cancer-facts figures.html (last visited Feb. 10, 2023).

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~~Image~~Mammography 10is ~~below~~the isdominant aimaging ~~case~~modality in today’s standard of ~~lobular~~care. ~~carcinoma~~The American Cancer Society recommends that women of average risk have the option to begin mammography at age 40, get mammograms every year from age 45-54, and have mammography every other year starting at age 55.25 AsDespite ~~with~~those recommendations, only 65% of women over 40 in the United States have had a mammogram in the previous ~~cases~~two years, ~~note~~and ~~that~~only 58% of women between 40 and 49 had a mammogram in the ~~QTscan~~previous ~~offers~~two ~~comparable~~years,26 ~~image~~even ~~quality~~though screening mammography is 100% covered under the Affordable Care Act. This is in part due to the limitations of mammography, both in terms of sensitivity and ~~diagnostic~~reliability ~~information~~for dense breast tissue, where 10-15% of cases have inconclusive results requiring further testing, as anwell ~~MRI~~as concerns about safety. Mammography is also problematic in women who have breast implants. For these women, ~~but~~problems ~~without~~include ~~the~~painful ~~high~~mammograms, ~~cost~~delayed ~~associated~~detection ~~with~~of ~~MRI~~cancer orfrom ~~patient~~interference ~~experience~~in ~~issues~~imaging ~~associated~~breast ~~with~~tissue, ~~claustrophobia~~and an unwillingness to perform mammograms due to fear of implant rupture, ~~radition~~dislocation or ~~injection~~capsular contracture.

~~Example~~The ofCompany’s agoal ~~cancer~~is ~~not~~to ~~seen~~provide onhighly ~~x-ray~~accurate, ~~mammography~~100% ~~(far left)~~safe, ~~hand~~radiation-~~held~~free ~~ultrasound (middle left)~~ and ~~non-enhancing~~painless onbreast ~~MRI~~imaging ~~with~~that ~~gadolinium~~can ~~injection~~be ~~(middle~~used ~~right)~~to: ~~is clearly visible in the QTscan (far right).~~

~~Image~~1)identify 10cancer early to minimize invasiveness and increase effectiveness of treatment; and

~~While~~2)eliminate ~~the~~unnecessary ~~preceding~~intervention ~~cases~~(additional ~~describe~~imaging and ~~demonstrate~~biopsies) ~~certain~~for ~~advantages~~women ofwith ~~the~~benign ~~QTscan,~~breast ~~due to limitations in print quality, case studies are best viewed on a high-quality monitor~~conditions. ~~Please visit the Company’s website to view additional case studies and image comparisons—https://www.qtimaging.com/casestudies/.~~

~~Comparison~~The ofProduct, ~~the~~ QT Breast Scanner ~~with currently available devices19~~

19The AQT ~~medical~~Breast ~~device~~Scanner ~~articulating arm~~ is a ~~mechanical~~fixed, ~~arm~~stationary, ormechanical ~~support~~scanner ~~structure~~ used into ~~medical~~evaluate ~~procedures~~the tobreast ~~position~~without orthe ~~hold~~use ~~surgical~~of ~~instruments,~~either ~~cameras,~~ionizing radiation or ~~other~~compression ~~medical~~associated ~~equipment.~~with ~~The~~mammography, ~~arm~~or ~~typically~~the ~~consists~~injections ofrequired ~~several~~for ~~articulated~~breast ~~segments~~MRI. orWith ~~joints~~the ~~that~~QT ~~can~~Breast beScanner, ~~adjusted~~the ~~and~~patient ~~locked~~lies incomfortably ~~place~~on ~~to achieve~~ a ~~specific~~table ~~position~~which orcontains ~~orientation.~~an ~~Medical~~opening ~~device~~through ~~articulating~~which ~~arms~~the ~~are~~breast ~~commonly~~is ~~used~~immersed in ~~minimally~~a ~~invasive~~warm ~~surgeries,~~water ~~such~~bath as(see ~~laparoscopy~~Image or1) ~~endoscopy,~~and ~~where~~gently ~~precise~~immobilized ~~control~~using ~~and~~a ~~positioning~~magnetic ofretention ~~instruments~~pad ~~are~~fixed ~~essential~~to ~~for~~a ~~successful~~magnetic ~~outcomes~~rod.

The QT Breast Scanner

Image 1

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 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

25 See, American Cancer Society, American Cancer Society Recommendations for the Early Detection of Breast Cancer, available at https://www.cancer.org/content/cancer/en/research/infographics-gallery/breast-cancer-screening-guideline.html (last visited Feb. 10, 2023).

26 U.S. Department of Health and Human Services, “Health, United States, 2016”, Table 70.

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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.

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.

Image 2: Schematic of transmission and reflections modes

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 user to measure mass size and volume as well as fibroglandular tissue volume.27

27 See, American Association for Cancer Research, R. Natesan, J. Wiskin, S. Lee, B. H. Malik, Quantitative Assessment of Breast Density: Transmission Ultrasound is Comparable to Mammography with Tomosynthesis (Dec. 3, 2019), available at https://aacrjournals.org/cancerpreventionresearch/article/12/12/871/47203/Quantitative-Assessment-of-Breast-Density.

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~~There~~Image ~~are~~3 ~~several~~below ~~differences~~is ~~between~~a still image of the QTviewer ~~Breast~~for ~~Scanner~~a patient with a lesion. The transmission (top panel) and ~~HHUS,~~reflection ~~ABUS,~~(bottom ~~BUST~~panel) images as seen in coronal, ~~PAI~~axial, and ~~PAT~~sagittal ~~devices~~representations.

~~Other~~Image ~~devices~~3 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~~The ~~few~~QT ~~companies~~Breast ~~undertake~~Scanner oris ~~sponsor~~the ~~comparative~~current ~~clinical~~version ~~trials~~of ~~and~~the ~~what~~QT ~~data~~Breast Scanner and is ~~produced~~FDA-cleared ~~lacks~~“for ~~clinical~~use ~~usefulness~~as inan ~~terms~~ultrasonic ofimaging ~~sensitivity~~system to provide reflection-mode and ~~specificity.~~transmission-mode ~~Other~~images ~~than~~of ~~Delphinus~~a patient’s ~~secondary~~breast. ~~screening~~The ~~trial~~QT ~~that~~Scanner we2000 ~~are~~Model ~~aware~~A ~~of,~~software ~~many~~also ~~companies~~calculates ~~have~~the ~~failed~~breast fibroglandular tissue volume (FGV) value and the ratio of FGV to dototal ~~head~~breast volume (TBV) value as determined from reflection-tomode and transmission-~~head~~mode ~~trials~~ultrasound ~~against~~images ~~mammography~~of ~~for~~a ~~primary~~patient’s breast. The device is not intended to be used as a replacement for screening mammography.”28 InThe ~~their~~QT Breast Scanner has current ~~iterations~~applicability ~~their~~as ~~technologies~~a ~~are~~supplementary imaging device (not ~~able~~as a replacement for screening mammography) and for determining the ratio of fibroglandular tissue volume to dototal ~~body~~breast orvolume ~~orthopedic~~which ~~imaging~~is a measure of breast density; near-term applicability for ~~future~~automatic segmentation of lesions followed by measuring lesion stability/growth, and ~~development~~diagnosing lesions using artificial intelligence; and medium- to long-term applicability for breast cancer screening as shown in Table 1.

OfUse ~~critical~~of ~~importance~~the inQT ~~comparing~~Breast Scanner Value it Adds Supplementary imaging Serves as an adjunct to screening mammography (not a replacement), particularly for women with dense breast tissue. It may help identify lesions missed on mammography or provide additional information of detected findings, with the ~~Company’s~~potential ~~devices~~to ~~against~~reduce ~~other~~unnecessary ~~devices~~procedures ~~are~~Fibroglandular ~~factors~~Tissue ~~such~~Volume as& ~~their~~the ~~lack~~Ratio of ~~FDA~~Fibroglandular ~~clearances~~Tissue Volume to Total Breast Volume Ability to quantify this ratio (an independent risk factor for ~~general~~breast ~~screening~~cancer), ~~their~~without ~~lack~~the need for breast compression or ionizing radiation used in mammography Automatic volumetric segmentation of ~~comparative~~lesions ~~trials~~Enables ~~for~~automated ~~primary~~segmentation of breast ~~cancer~~tissue ~~screening,~~structures and ~~the~~lesions ~~fact~~to ~~that~~assist ~~their~~with ~~clinical~~quantitative ~~resolution,~~image ~~presence~~analysis. Mass Size and Growth Allows longitudinal monitoring of ~~artifacts~~breast lesions, ~~and~~enabling ~~sensitivity~~assessment of treatment and ~~specificity~~assessment ~~data~~of ~~are~~lesion ~~not~~stability ~~clinically~~or ~~useful~~progression A.I.-Based Mass Diagnostics Reduce unnecessary procedures (biopsies, additional imaging) by identifying lesion type Screening for High-Risk Young Women Provide young women a safe and comfortable method to screen for breast cancer, as an alternative for breast MRI

~~Description~~Table ~~of Future Products and Services~~ 1

~~The~~Cloud ~~Company~~SaaS believes that its Open Partial Angle Scanner concept, under development, will provide entry into the global orthopedic and infant medical imaging markets as described below. The following discussion and description of product candidates and their respective potential applications and uses is a discussion of the Company’s future products and product candidates, all of which are still in development stages and the Company can provide no assurance regarding when, if ever, these products and product candidates may be brought to market, or when, if ever, the Company would seek FDA premarket clearance or approval of a PMA application. As such, the discussion below contains information that is forward-looking in nature and investors are cautioned not to place undue reliance on these forward-looking statements. Platform

~~Proposed~~QTI Precision Pathway creates value around each QT ~~Orthopedic~~Breast Scanner by combining the hardware system with a SaaS-based subscription membership program. By integrating software updates, advanced analytics, secure collaboration, and enterprise-grade workflow tools into a recurring subscription model, the program enables institutions to maximize the

~~The~~28 ~~Need—In-office~~U.S ~~orthopedic~~Department of Health and ~~extremity~~Human ~~imaging~~Services, ~~joint~~Food and ~~internal~~Drug ~~soft~~Administration, ~~tissue~~510(k) ~~diagnosis~~number K253898.

Background:

The Company believes musculoskeletal conditions are the most common reasons for doctor visits, lost productivity, and disability in the United States. Among these, arthritis (osteoarthritis and rheumatoid arthritis) and back or spinal problems are the first and second leading causes of disability among adults. As the U.S. adult population ages, the prevalence of these conditions appears to be increasing, resulting in concomitant increases in healthcare resource utilization. According to the American Productivity Audit, pain of musculoskeletal origin (including back-pain, arthritis-related pain, and pain due to other musculoskeletal conditions) was reported by 7.2% of the workforce as having occurred over the previous two weeks.20 The knee is the most commonly injured joint by adolescent athletes with an estimated 2.5 million sports-related injuries presenting to emergency departments (“EDs”) annually.21 Additionally, there are more than one million joint replacements per year in the U.S. with over 790,000 knee replacements done by physicians.

The differential diagnosis of nonspecific musculoskeletal complaints is challenging, and the use of imaging modalities is often required to establish a diagnosis, guide treatment, or monitor disease progression. MRI is a widely used medical technology and is often employed as the preferred imaging tool for disorders of the musculoskeletal system, as it can better delineate soft tissue structures than either plain X rays or CT despite being costlier and having a longer procedural time

20 See, JAMA, Lost Productive Time and Cost Due to Common Pain Conditions in the U.S. Workforce (Nov. 12, 2003), available at https://jamanetwork.com/journals/jama/fullarticle/197628.

21 See, American College of Rheumatology, Joint Replacement Surgery, available at https://www.rheumatology.org/I-Am-A/Patient-Caregiver/Treatments/Joint-Replacement-Surgery#:~:text=Approximately%20790%2C000%20total%20knee%20replacements,in%20any%20area %20of%20medicine (last visited Feb. 10, 2023).

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~~compared~~clinical, with CT. Currently there is no optimal imaging technology for imaging implanted orthopedic prosthetic devices. MRI and CT scanners produce confounding artifacts that make these devices less than satisfactory for this application. As previously discussedoperational, ~~CT employs ionizing radiation~~ and ~~MRI~~economic ~~frequently~~utility ~~requires heavy-metal injection. In addition, the closed environment~~ of antheir ~~MRI~~scanners iswhile ~~challenging~~providing ~~for~~predictable ~~many~~costs ~~patients~~ and ~~intolerable~~scalable ~~for~~digital ~~others~~capabilities.

~~Ultrasonography~~QTI isPrecision aPathway ~~noninvasive~~is ~~imaging modality used for the assessment of the musculoskeletal system. It can provide clinically useful information on~~ a ~~wide~~tiered ~~range~~software ofmembership ~~pathologic~~program ~~conditions~~designed ~~affecting~~to ~~components~~enhance of the ~~knee joint~~clinical, ~~including the tendons~~operational, ~~ligaments,~~and ~~muscles,~~economic ~~synovial~~performance ~~space,~~of ~~articular~~QT ~~cartilage,~~Breast ~~and~~Scanner ~~surrounding soft tissues~~installations. ~~Color~~It ~~and~~provides ~~power~~structured ~~Doppler~~access ~~techniques can be used~~ to ~~measure~~software ~~neovascularization~~updates, ~~within~~analytical ~~the synovial lining of the joints~~tools, ~~tendons,~~advanced ~~and soft-tissue masses. The advantages of ultrasound include low cost~~visualization, ~~portability,~~collaborative ~~real-time~~data ~~assessment~~platforms, ~~no radiation~~ and ~~facilitated~~workflow ~~side-by-side~~optimization ~~comparisons~~features. ~~Its~~The ~~major~~tiered ~~disadvantage~~structure isallows ~~its~~customers ~~operator-dependence:~~to italign ~~requires~~system ~~trained~~capabilities ~~experienced hands~~ with ~~appropriate~~the ~~high-resolution~~scale ~~equipment.~~and ~~Ultrasound~~complexity ~~examinations~~ of ~~the~~their ~~knee~~clinical ~~joint are usually performed using a high-frequency linear transducer (7.5–12 MHz). It is mostly used to diagnose tendon, ligament~~ or ~~muscle~~research ~~injury and cartilage and meniscal lesions~~environment.

~~The~~Via ~~Proposed~~this ~~Products—~~platform, QT ~~Imaging~~Breast ~~Platform~~scanner systems remain technologically current via periodic software updates delivered through a centralized platform. Updates apply to both system software and the associated QTviewer components. Updates to the QTI Olea Viewer platform are provided only when the customer maintains an active subscription at the applicable membership level. Software updates generally include version upgrades for ~~extremity~~previously purchased features, ~~infant~~while baseline quantitative analysis capabilities—such as reflection, transmission, density measurement, and ~~whole-body~~doubling time—are included during the membership period. Additional analytical or imaging capabilities introduced after system purchase, based on geometric, elastic, and spectral physiologic biomarkers or other advanced features, may require a separate one-time scanner purchase and/or an annual QTI Olea Viewer subscription to enable associated workflows.

~~The~~Participation ~~proposed~~requires QTcustomers ~~Orthopedic~~to ~~Scanner~~execute ~~for~~applicable ~~Extremity~~data ~~Imaging~~access ~~(Image 11~~ and ~~Image~~privacy ~~12) will use the open~~agreements, ~~partial~~including ~~angle~~a ~~configuration~~QTI ~~with~~Business ~~the~~Associate ~~same~~Agreement ~~platform~~where ~~technology~~required, ~~as the QT Breast Scanner. Using transmission~~ and ~~reflection~~to ~~ultrasound,~~permit ~~the~~secure ~~system~~remote ~~generates high definition (sub-millimeter) extremity images that provide unique visual information about the physical structures within the human musculoskeletal~~ system. ~~The~~access ~~new~~for ~~image~~software ~~information~~updates ~~is expected to provide a safe (no radiation or injection), effective, inexpensive,~~ and ~~non-invasive~~technical ~~diagnostic imaging tool for assessing musculoskeletal health~~support. ~~With~~Customers ~~the~~are QTalso ~~Orthopedic~~responsible ~~Scanner,~~for ~~the~~maintaining ~~patient~~required ~~sits~~annual ~~comfortably on a chair in front of the~~ scanner ~~that~~maintenance contains an opening through which the arm or leg is placed. The extremity is gently immobilized using an inflatable rubber cuff. On the other side of the rubber cuff there is a warm water bath with an ultrasound armature that rotates 325 degrees around the extremity to ~~produce~~remain 3Deligible ~~images.~~for ~~The~~updates ~~QT Orthopedic Scanner will differ from conventional ultrasound in that it will utilize reflection~~ and ~~transmission~~related data from sound waves, providing a significant increase in diagnostic information using the speed of sound characteristics of the bones and muscles and any prosthetic devices and generating a true 3D rendering of the extremityservices. The QT Orthopedic Scanner will provide sub-millimeter image resolution called a QTscan which will enable identification of normal and abnormal structures and the accurate depiction of the precise shape and location of findings.

The ~~proposed~~program QTis ~~Orthopedic~~designed ~~Scanner~~to ~~being~~support ~~applied~~both individual site deployments and enterprise-level implementations. Institutions can expand participation as operational needs evolve, allowing additional sites or capabilities to ~~hip~~be ~~imaging~~incorporated without disrupting existing workflows.

~~Image~~The 11membership framework also provides a predictable economic model for managing software lifecycle costs, with pricing scalable to system utilization and institutional growth.

QTI Precision Share is a secure, enterprise-grade knowledge-sharing platform powered by Intelerad’s image management technology. It enables seamless collaboration and structured data exchange to accelerate innovation in quantitative imaging biomarkers, enhance patient care through improved access to validated biomarkers, and support next-generation precision diagnostics via collaborative research and real-world evidence generation.

QTI Precision Share is integrated at different levels across the QTI Precision Pathway tiers, with Advanced and Enterprise tiers offering connectivity and workflow integration with the QTI Olea Viewer platform.

QTI Olea Viewer, powered by Olea Medical’s multimodality platform, delivers an integrated environment for next-generation quantitative imaging biomarkers. It unifies advanced visualization, intelligent reporting, and automated precision diagnostics into a single ecosystem, providing clinicians with deeper insights, streamlined workflows, and data-driven decision support.

Seamlessly connected to QTI Precision Share, the QTI Olea Viewer supports secure, enterprise-grade collaboration. Updates require an active subscription at the applicable membership level and are included in Advanced and Enterprise tiers, with server allocations and pricing aligned to the membership.

Membership Value by Tier

Core Membership: The Core tier is foundational and must be purchased for every QTI Breast Scanner covered under the QTI Precision Pathway. It provides ongoing system software updates and baseline quantitative capabilities to maintain long-term system relevance and compatibility with evolving technology standards.

Operational Membership: Operational membership includes all Core benefits and adds connected viewing, collaborative interpretation, and structured data sharing across sites. It includes access to enhanced pricing benefits and membership in QTI Precision Share at the Operational level, enabling workflow coordination and secure data exchange.

Advanced Membership: Advanced membership includes all Operational benefits and expands analytical capabilities with an advanced portfolio of quantitative biomarkers, automated analysis tools, and enhanced reporting. It provides integrated connectivity between QTI Precision Share and the QTI Olea Viewer for up to two servers. Customers must maintain an annual QTI Olea Viewer subscription, with preferred pricing available for additional servers. Advanced membership also includes enhanced program discounts and QTI Precision Share at the Advanced level.

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~~The~~Enterprise ~~proposed~~Membership: QTEnterprise ~~Orthopedic~~membership ~~Scanner~~includes ~~being~~all ~~applied~~Advanced benefits and is designed for institution-wide deployment, supporting multi-user access, high-volume processing, and enterprise-grade analytics. It provides connectivity between QTI Precision Share and the QTI Olea Viewer for all servers within the enterprise, with preferred subscription pricing for additional servers. Enterprise membership includes QTI Precision Share at the Enterprise level and access to ~~shoulder~~enhanced ~~imaging~~program discounts.

~~Image~~In 12summary, the Company believes that QTI Precision Pathway, combined with QTI Precision Share and the QTI Olea Viewer, enhances the long-term value of installed QT Breast Scanners by enabling continuous technological improvements, supporting interoperability, and providing a flexible framework for expanding digital and analytical capabilities over time.

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Image reconstruction of the ultrasound data is done with proprietary partial-angle segmentation software that uses the quantitative speed of sound data to highlight specific tissues for 3D visualization called a QTscan as shown in Image 13.

Volume reconstructions of the knee from QTScan data

Image 13

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Clinical Images

In response to a request by the FDA to include Visual Grading Analysis studies in our applications, the Company has conducted an analysis comparing the image quality of the QTScan to MRI in which readers independently scored the image quality of 10 anatomical knee structures with MRI and the QTscan. In this Visual Grading Analysis, readers scored the transmission ultrasound images as equivalent or better than the MRI imaging in more than 90% of knees structure images reviewed. Image 14 below shows the QTScan of the knee (left) next to the MRI imaging of the knee (right). Note the higher contrast in the QTscan compared to the MRI. This exercise was conducted as part of our FDA application process and has not been published.

QTScan (left) and MRI imaging (right) of a human knee

Image 14

The following, Image 15 shows QTScan of the same knee from different views. Note the high contrast and detail in the QTScan image.

Image 15

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Image 16 below shows QTScan of a human knee (left) compared with MRI views of the same knee (right). Note the higher contrast and detail in the QT image.

QTScan (left) and MRI imaging (right) of a human knee

Image 16

Image 17 below is another set of QTScan views of the same knee. Note the meniscus and cartilage detail in the QTscan images, which cannot be seen on an MRI.

QTscan of a human knee

Image 17

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The Company has conducted partial-angle reconstruction studies comparing the image quality of 325-degree rotation (open angle) to 360-degree (full rotation) reconstructions (Image 18). The image quality is maintained in the partial-angle reconstruction.

360-degree rotation view (left) vs partial angle reconstruction (right) of the human knee

Image 18

Advantages of proposed QT Orthopedic Scanner

Compared to existing orthopedic imaging systems such as MRI and CT, the proposed QT Orthopedic Scanner will offer the following advantages:

•The QT Orthopedic Scanner may be faster at image acquisition, resulting in quicker diagnosis and treatment.

•In-office and same day orthopedic imaging

•The QT Orthopedic Scanner would not require build-out of a dedicated facility with magnetic field shielding and liquid helium supply (where needed).

•The QT Orthopedic Scanner may be less expensive to deploy than an MRI or CT device and may be less costly to maintain because the technology is simpler in design, has less components, does not utilize ionizing radiation, helium, and we anticipate will be less expensive to manufacture and maintain.

Proposed QT Infant Scanner—Whole Body Imaging

The Need: Currently there are very limited techniques for imaging infants. The QT Infant Scanner is in the development phase.

Background:

Medical imaging is an extremely valuable tool in diagnosing infants and children but poses specific challenges that the proposed QT Infant Scanner would address. At present neonatal and pediatric imaging is severely limited as described below.

CT uses ionizing radiation, which poses greater risk for the pediatric than adult population. The risk associated with ionizing radiation is “higher than in adults. Also, children have longer life expectancy; therefore, they have a greater

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potential for manifestation of possible harmful effects of radiation.”22 Ionizing radiation exposure in childhood in particular raises risk of cancer, including leukemia, breast cancer, thyroid cancer and brain cancer, where higher risk is associated with exposure any time before age two23. This makes MRI preferred to CT for all but trauma evaluation.

MRI requires sedation or general anesthesia and may require injection of a heavy-metal contrast agent. The use of sedation or anesthetic drugs risks severe compromise of respiratory and cardiac function and injection of contrast is usually contraindicated in seriously ill children due to the high risk of organ failure from the administration of these contrast agents.

Finally, pediatric patients are particularly sensitive to environment given an infant or child’s inability to fully comprehend the nature and purpose of medical imaging. The presence of a parent or caregiver can increase imaging efficacy, but is limited in a closed environment (e.g., MRI) or an unsafe environment (e.g., any modality using ionizing radiation).

The proposed QT Infant Scanner will address all three of these issues as it will not require ionizing radiation or anesthesia and the open environment would allow a trusted adult to be present, decreasing the necessity of sedation and increasing imaging efficacy.

Although prior literature from the Company may have indicated a specific timeframe for proof of concept and rollout, there is currently no specific timeframe for the submission of premarket notification to the FDA for approval of the QT Infant Scanner. Our submission to the FDA for all products and product candidates may depend upon a number of factors and variables, including the amount of capital that we have; the completion of the clinical prototype scanner; the results from the initial pre-clinical imaging studies and comparisons with MRI; the development of an FDA-strategy-for-submission, including but not limited to pre-sub-meetings with the FDA; determining the appropriate device classification and whether it meets criteria for a 510(k) pathway, and final preparation of the FDA application.

22 See, National Library of Medicine, Problems and Preferences in Pediatric Imaging (Oct. 2015), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4693383/.

23 WHO, Ionizing Radiation, Health Effects and Protective Measures (Apr. 29, 2016), available at https://www.who.int/news-room/fact-sheets/detail/ionizing-radiation-health-effects-and-protective-measures.

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The Proposed Product—QT Infant Scanner

The imaging from the proposed QT Infant Scanner (the “Open Partial Angle Scanner”) Imaging (Image 19) will be based on the same platform transmission ultrasound technology as the breast and extremity scanners, and uses the Company’s Open Partial Angle Scanner concept.

The Open Partial Angle Scanner will be applied to infant body imaging in the proposed QT Infant Scanner (concept drawing)

Image 19

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Clinical Images

The Company has not imaged infants but has demonstrated its ability to image the body through imaging of neonatal pigs. Comparative images for QTscan vs MRI are shown below for a neonatal pig (Image 20). Note the higher contrast and more detail in the QTscan (left).

Whole Body QTscan Whole Body MRI Scan

Newborn piglet whole body imaging using the Company’s technology.

Image 20

Other anatomic detail in the newborn pig’s heart and lungs are shown in Images 21, 22, 23 and 24 using the Company’s technology.

Image 21 (left), Image 22 (center) and Image 23 (right)

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Piglet Lung Imaging

Image 24

The Company has done partial-angle image reconstruction internal studies comparing the image quality of 325-degree rotation (open angle) to 360-degree (full rotation) reconstructions of a piglet’s pelvis (Image 25). We believe the image quality is maintained in the partial-angle reconstruction.

All views (left) vs partial angle reconstruction (right) of the piglet pelvis

Image 25

The Company’s Image Guided Procedures

The Need: In addition to using the Open Partial Angle Scanner as the proposed QT Infant Scanner, it can also be used for a variety of other image guided procedures including:

•Breast biopsy of small lesions (<5mm)

•Orthopedic biopsy of bones, joints, muscle or connective tissues

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•Orthopedic injections

•Stem cell injections

•Soft tissue ablation

•Real-time non-radiation imaging of vascular procedures

•Angiography without radiation

•Cryoablation for early-stage breast cancer.

Cryoablation—An example of the Company’s potential contribution

Cryoablation24 is currently approved for treatment of benign and malignant soft tissue tumors by the FDA. Currently, there are no specific technologies that have FDA approval for breast tumors, although there are over 100,000 such procedures done in the U.S. annually.25,26 Eighty-five percent of breast cancer is localized at the time of diagnosis (62% have early stage confined to the breast and 23% have pre-cancerous In Situ carcinoma).27

Cryoablation for cancer is typically used when surgery isn’t an option. Cryoablation is sometimes used as a treatment for many types of cancer, including:

•Bone cancer.

•Breast cancer.

•Cervical cancer.

•Eye cancer.

•Kidney cancer.

•Liver cancer.

•Lung cancer.

•Prostate cancer.

Mastectomy has no advantage over local removal of breast cancer in terms of survival28 and the trend is towards less invasive or disfiguring treatments for treating the primary tumor in the breast. Cryoablation is an emerging modality of treatment with a number of different indications for use.29 Systems such as the Galil Cryoablation System30 are used in clinical practice for a variety of applications. In one study cancer recurred in only one of 180 women treated with cryoablation for low-risk breast cancers.31 There are a number of ongoing trials in this area32, and cryoablation is offered for low-risk breast cancers at more than 20 tertiary cancer centers in the U.S.33

24 Cryoablation is a process that uses extreme cold to destroy abnormal tissue. According to the Mayo Clinic: During cryoablation, a thin, wandlike needle called a cryoprobe is inserted through the skin. The cryoprobe is placed directly into the cancer. A gas is pumped into cryoprobe to freeze the tissue. Then the tissue is allowed to thaw. The freezing and thawing process is repeated several times

25 See, National Library of Medicine, Office-Based Cryoablation of Breast Fibroadenomas with Long-term Follow-up (Sept. 15, 2005), available at https://pubmed.ncbi.nlm.nih.gov/16174156/.

26 See, the American Society of Breast Surgeons, Consensus Guideline on the Use of Transcutaneous and Percutaneous Ablation for the Treatment of Benign and Malignant Tumors of the Breast (Oct. 16, 2018), available at https://www.breastsurgeons.org/docs/statements/Consensus-Guideline-on-the-Use-of-Transcutaneous-and-Percutaneous-Methods-for-the-Treatment-of-Benign-and-Malignant-Tumors-of-the-Breast.pdf.

27 See, ASCO, Breast Cancer: Statistics (Jan. 2022), available at https://www.cancer.net/cancer-types/breast-cancer/statistics.

28 See, JAMA Network, Use of and Mortality After Bilateral Mastectomy Compared with Other Surgical Treatments for Breast Cancer in California, 1998-2011 (Sept. 3, 2014), available at https://jamanetwork.com/journals/jama/fullarticle/1900512.

29 See, DovePress, Cryoablation in the Management of Breast Cancer: Evidence to Date (July 23, 2019), available at https://www.dovepress.com/cryoablation-in-the-management-of-breast-cancer-evidence-to-date-peer-reviewed-fulltext-article-BCTT.

30 See, Boston Scientific, Cryoablation available at https://www.bostonscientific.com/en-US/products/cryoablation.html.

31 InterventionalNews, Cryoablation Shows Promise in Treating Low-Risk Breast Cancer (Jan. 8, 2019), available at https://interventionalnews.com/cryoablation-breast-cancers/.

32 U.S. National Library of Medicine, Cryoablation Therapy in Treating Patients with Invasive Ductal Breast Cancer, available at https://clinicaltrials.gov/ct2/show/NCT00723294 (last visited Feb. 10, 2023).

33 Healio, Cryoablation May be Promising Alternative to Surgery for Low-Risk Breast Cancer (Mar. 4, 2019), available at https://www.healio.com/hematology-oncology/breast-cancer/news/online/%7Be2c51338-c13b-44f6-8690-b01307340d21%7D/cryoablation-may-be-promising-alternative-to-surgery-for-low-risk-breast-cancer.

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Cryoablation of early-stage breast cancer is an exciting opportunity unique to the Company. Breast cancer cells are about 20 microns wide. A 1-cm cancer has about 100 million cells, a 0.5-cm cancer has about 10 million cells, and a 1-mm cancer has about 100 thousand cells.34 The Company’s imaging can see the glandular structure of the breast and can see as few as a couple of thousand cells. These cancers of several hundred thousand cells are very low risk to the woman and are also easily eliminated35. There are currently limited ways to treat these small cancers using image guided procedures. The Company could offer a solution to this problem.

The Product

The product for image-guided procedures would be the Open Partial Angle Scanner augmented with enhanced software. The Open Breast Scanner is shown in Image 26 below (concept drawing).

The Open Partial Angle Scanner for Breast Imaging

Image 26

34 National Library of Medicine, Disappearing Breast Cancers (Apr. 2012), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3320224/.

35 See, AJR, Robert C. Ward, Ana P. Lourenco & Martha B. Mainiero, Ultrasound-Guided Breast Cancer Cryoablation, 213 Am. J. Roentgenol. 3, 716-722 (2019), available at https://www.ajronline.org/doi/10.2214/AJR.19.21329.

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The Open Partial Angle Scanner or Open Breast Scanner will be able to operate with the same accuracy as the full 360º rotation all views breast scan, as shown below (Image 27):

All views breast reconstruction (left) vs open angle breast reconstruction (right) of the same human breast

Image 27

Furthermore, the images reconstructed of scans performed on the open-angle scanner do not show any significant artifacts in the presence of an intervening device (e.g., a needle) (Image 28).

Top view (left panel) and frontal view (right panel)

An ablation needle shown in a human cadaver breast using the Company’s platform

Image 28

Manufacturing

~~The~~Prior to the third fiscal quarter of 2025, the Company’s products ~~are~~have ~~manufactured~~solely inbeen ~~small~~manufactured ~~scale~~ in Novato, California. With the entry into the Canon Manufacturing Agreement as discussed below, the Company ~~will~~is, bebeginning with the third fiscal quarter of 2025, manufacturing the QT ~~Brast~~Breast Scanners in parallel between Novato, California and using ~~Canon Medical Systems Corporation (“~~CMSC”) as a contract manufacturer pursuant to the Canon Medical Agreement ~~Starting with the second half of 2025~~. The products are designed under the FDA’s design control guidelines and manufactured in accordance with the Company’s quality management system.

The Company’s devices are made up of custom designed components and off-the-shelf components, both of each are supplied by the Company’s approved vendors in the U.S.

32For those QT Breast Scanners manufactured by the Company in Novato, California, the subassemblies are manufactured at the Company and verified prior to the final assembly of the device. The controls software and image reconstruction software are loaded on the imaging devices at the Company’s facility in Novato. Prior to shipping, 100% of the products are verified for functionality, performance, and safety.

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Currently all subassemblies are manufactured at the Company and verified prior to the final assembly of the device. The controls software and image reconstruction software are loaded on the imaging devices at the Company’s facility in Novato. Prior to shipping, 100% of the products are verified for functionality, performance, and safety.

The Company intends to scale up its production by initially using CMSC, and may also look at strategic original equipment manufacturing (“OEM”) agreements for large production throughput.

The suppliers that the Company purchases from and engages with are limited to those that are approved by our Quality Assurance department, which maintains an Approved Supplier List. The Company categorizes suppliers into three groups: (i) non-critical, (ii) important, and (iii) critical. For example, our “non-critical” suppliers include general distributors and/or suppliers of commercially available “off-the-shelf” items such as mechanical and electrical standard hardware, blank label stock, seals and labeling pouches, and our “important” suppliers include custom component suppliers, test facility providers and consultants.

Before a supplier is classified as “critical,” the Company assesses the supplier’s: (a) specific or proprietary core competencies, (b) tooling costs and lead time, and (c) product delivery lead time. Any supplier whose processes or products are required by the Company to be validated are classified as “critical.” Another factor that the Company considers is the lead time to approve an alternative supplier. As of the date of this annual report, although there are various suppliers in the U.S. and abroad that can produce high quality ultrasound transducers for the Company, the Company has only engaged in the supplier validation and approval process with one such supplier which manufactures ultrasound transducer subcomponents in accordance with the Company’s specifications. Because the Company has validated this supplier, but has not undertaken the significant commitment of resources to validate and approve other such suppliers of ultrasound transducers, despite the fact that the Company could choose to do so, it considers this supplier as being “critical” on our Approved Supplier List but not a principal supplier. In addition, as of the date of this annual report, the Company does not have written agreements in place with this critical supplier, and is operating under an individual purchase order platform, on an as-needed-basis; however, the Company may enter into such agreements in the future.

Canon Letter of Intent

QT Imaging entered into the Canon Letter of Intent with ~~Canon Medical USA, Inc. (“~~CMSU”) and CMSC pursuant to which CMSC purchased and acquired two QT Breast Scanners in the first half of 2024. The Canon Letter of Intent provided that CMSC would conduct, and pursuant to the Feasibility Study Agreement (as described below), CMSC conducted, feasibility studies on the QT Breast Scanners that it acquired, including product quality validation, development and manufacturing studies, clinical evaluation, regulatory investigation and marketing validation (the “Feasibility Study”) The Feasibility Study was completed in the second half of 2024.

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The Canon Letter of Intent provided that upon successful conclusion of the Feasibility Study, we and CMSC intended to engage in a good faith discussion to develop a binding OEM manufacturing agreement with CMSC, which we have now done, as discussed below.

CMSC will also use QT Breast Scanners that it acquired to perform clinical trials towards the possibility of it pursuing the regulatory approval process in Japan.

CMSC and QT Imaging have also discussed other potential terms between them.

Feasibility Study Agreement with Canon Medical Systems Corporation

On March 28, 2024, the Company entered into the Feasibility Study Agreement with ~~CMSC~~Canon. The term of the Feasibility Study Agreement commenced on March 28, 2024 and by its terms, remained in force until the end of December 2024. In connection with the Feasibility Study Agreement, ~~CMSC~~Canon initiated studies to evaluate the business, technical, and clinical values of the Company’s QT ~~Breast~~ Scanner including ~~the~~product ~~Feasibility~~quality ~~Study~~validation, development and manufacturing studies, clinical evaluation, regulatory investigation, and market validation. ~~CMSC~~Canon has no right to reverse engineer the QT ~~Breast~~ Scanner and may only modify and disassemble the QT ~~Breast~~ Scanner as necessary to conduct the Feasibility Study.

Under the terms of the Feasibility Study Agreement, QTthe ~~Imaging~~Company provided support for the Feasibility Study as agreed with CMSC from time to time during the term of the Feasibility Study Agreement and used its commercially reasonable efforts to facilitate the feasibility study. Both parties confirmed that the support provided by the Company did not result in significant costs to the Company, as it only provided technical materials and knowledge that it already possessed and did not involve the creation of new materials or engineering. Each party was responsible for covering its own expenses related to the Feasibility Study and the support, except if the parties agreed in writing otherwise, one party shall pay to the other party an amount reasonable under the circumstances.

~~All~~The Feasibility Study Agreement provided that all know-how and intellectual property embodied in the QT Breast Scanner are owned by QTthe ~~Imaging~~Company and all rights not expressly granted to QTthe ~~Imaging~~Company are reserved.

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Canon Manufacturing Agreement

On March 28, 2025, the Company entered into ~~a manufacturing agreement (~~the “Canon Manufacturing Agreement”) with CMSC. Pursuant to the terms of the Canon Manufacturing Agreement, the Company ~~appoints~~appointed CMSC as the exclusive manufacture of the QT Breast Scanners to be distributed by NXC ~~Imaging, a wholly-owned subsidiary of CMSU (“NXC”)~~ pursuant to the Amended NXC Distribution Agreement ~~(as defined below)~~. CMSC’s manufacturing of the QT Breast Scanners shall not include the final testing process for the QT Breast Scanners, and CMSC shall not have any responsibility for the QT Breast Scanner as a manufacturer of medical equipment for FDA purposes.

In order for CMSC to manufacture the QT Breast Scanners, the Company shall sell components to CMSC in a timely manner, in accordance with agreed-upon terms and conditions. The Company shall cooperate with and support CMSC to allow CMSC to procure components through its own supply chain. The parties shall negotiate in good faith specific procedures to phase out CMSC’s purchase of components from the Company, with the target date of the fourth quarter of 2025, although this is not a commitment. The terms for purchasing components (or subassemblies), including components for service, by the Company from CMSC shall be mutually agreed upon by the parties.

The Company shall provide forecasts ~~(each, a “Forecast”)~~ to CMSC in accordance with the “Forecast Policy” attached to the Canon Manufacturing Agreement. No later than forty-five days prior to the end of each calendar quarter, CMSC will notify the Company in writing if CMSC is unable to deliver a sufficient number of QT Breast Scanners to satisfy the ~~Forecast~~forecast for the following quarter. If CMSC is unable to deliver a sufficient number of QT Breast Scanners due to CMSC’s willful misconduct, CMSC will sell back to the Company all components necessary for the Company to engage in ~~the~~Novato ~~manufacture~~Manufacturing of the QT Breast Scanners for the following quarter at the Company’s facility in Novato, California ~~(hereinafter referred to as “Novato Manufacturing”)~~ sufficient to cover the QT Breast Scanner shortfall back at the same purchase price that CMSC paid to purchase such components. CMSC shall bear risk of loss, all fees and shipping costs for the components incurred in connection with such Novato Manufacturing.

No later than forty days prior to the end of each calendar quarter, the Company shall notify CMSC in writing indicating whether or not the Company wishes to engage in Novato Manufacturing of the QT Breast Scanners for the following quarter for the purpose of meeting the ~~Forecast~~forecast for such quarter. If the Company provides such notice to CMSC within the 40-day period, stating that the Company wishes to engage in Novato Manufacturing, the Company may purchase from CMSC (if the Company does not already have) any components held by CMSC necessary as determined by the Company for the Company to be able to manufacture the QT Breast Scanners via the Novato Manufacturing, at the same purchase price that CMSC paid to the Company to purchase such components. The Company shall bear all risk of loss, fees and shipping costs for the components incurred in connection with the Novato Manufacturing.

From time to time during the term of the Canon Manufacturing Agreement, but no later than thirty days prior to the delivery date specified in the purchase order, the Company may issue to CMSC a purchase order for any of the QT Breast Scanners necessary to meet the Forecast, for the actual quantities to be delivered by CMSC. Each purchase order shall specify delivery dates that respect the “Forecast Policy.” The purchase prices applicable to the purchase orders as of the date of the Canon Manufacturing Agreement shall be separately agreed between the parties in writing. CMSC may reject any purchase order that requests delivery dates that are not in compliance with such Forecast Policy. Unless the Company is manufacturing QT Breast Scanners as Novato Manufacturing, any failure by CMSC, as a result of CMSC’s conduct, to manufacture and deliver QT Breast Scanners as specified in an accepted purchase order necessary to satisfy the Forecasts later than seventy-five days from the delivery date as specified in the accepted purchase order shall result in liquidated damages per missed or delayed QT Breast Scanner of $220,000, with NXC not being obligated to pay for the missed MOQ sale. Such failure by CMSC shall also not provide any grounds for NXC to terminate the Amended Distribution Agreement or otherwise cancel the binding nature of the MOQs (as defined below) as provided in the Amended Distribution Agreement (as described below). All title to and risk of loss of the QT Breast Scanners shall pass from CMSC to the Company when the QT Breast Scanners have been delivered to the Company in Novato, California, under the Incoterms 2020 trade term, DDP. The Company shall make payment of the QT Breast Scanners to CMSC within ninety days after the issuing date of an original copy of the invoice to be issued by CMSC.22

Prior to the delivery of the QT Breast Scanners, CMSC shall inspect and test all the QT Breast Scanners in accordance with the outgoing test procedures to be approved in writing by the Company and as specified in the specifications or otherwise to be separately agreed upon between the parties in writing. The Company shall perform the visual, quantity and/or quality inspection of the QT Breast Scanners upon their receipt. If any of the QT Breast Scanners delivered is found deficient in quantity (as set forth in the accepted purchase order), or is defective in material and workmanship or inconformity with the specifications, and such deficiency, defect or non-conformity is caused by CMSC, the Company may submit a written claim notice to CMSC with sufficient supporting evidence, including but not limited to photographs and reasonably detailed explanation. CMSC shall, at its sole discretion, either (i) deliver additional QT Breast Scanners to

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~~fulfil the required quantity or deliver replacement of the QT Breast Scanners, or (ii) offer an equitable reduction in the purchase~~ price ofthat ~~the QT Breast Scanners delivered, subject to mutual agreement between the parties.~~ CMSC ispaid ~~providing a warranty on the QT Breast Scanners that they shall be free from defects in material and workmanship and conform~~ to the ~~specifications for a period of (i) twelve months from the delivery date of each QT Breast Scanner from the~~ Company to ~~NXC,~~purchase orsuch ~~(ii) twelve months from the installation date for the QT Breast Scanners directly sold to end users by the Company~~components. If ~~any~~The ~~defects in material and workmanship, or non-conformity of the specifications occur during the warranty period and the~~ Company ~~provides a timely claim, CMSC~~ shall, atbear ~~its~~all ~~sole~~risk ~~discretion (i) send a replacement~~ of ~~a part(s)~~loss, ~~(ii)~~fees ~~send a brand new QT Breast Scanner as a replacement, (iii) repair the defective QT Breast Scanner(s)~~ and ~~return~~shipping ~~them~~costs tofor the ~~Company,~~components orincurred ~~(iv)~~in ~~refund~~connection ~~the~~with ~~equivalent price to~~ the ~~purchase~~Novato ~~price~~Manufacturing. CMSC shall only be responsible for recalls resulting from the manufacturing process of the QT Breast Scanners or materials and parts procured by CMSC (other than materials and parts procured from the Company).

~~All~~From ~~intellectual~~time ~~property~~to ~~rights,~~time ~~including~~during ~~but~~the ~~not~~term ~~limited~~of tothe ~~patents,~~Canon ~~copyrights,~~Manufacturing ~~know‑how~~Agreement, ~~and~~but ~~trade~~no ~~secrets~~later ~~(the~~than ~~“IPR”),~~thirty ~~which~~days ~~each~~prior ~~party~~to ~~has~~the ~~owned~~delivery ~~before~~date ~~entry~~specified ~~into~~in the ~~Canon~~purchase ~~Manufacturing~~order, ~~Agreement~~the orCompany ~~develops~~may ~~separately~~issue ~~from~~to ~~the~~CMSC ~~performance~~a ofpurchase ~~the~~order ~~manufacture~~for any of the QT Breast Scanners ~~under~~necessary ~~this~~to ~~agreement,~~meet ~~shall~~the ~~remain~~forecast, for the ~~exclusive~~actual ~~property~~quantities ofto ~~the~~be ~~Company~~delivered orby CMSC ~~respectively~~. ~~All~~ ~~IPR~~Each inpurchase ~~and~~order toshall ~~any~~specify ~~invention,~~delivery ~~whether~~dates ~~patentable~~that orrespect ~~not,~~the ~~conceived~~“Forecast ~~and~~Policy.” ~~reduced~~The topurchase ~~practice~~prices inapplicable to the ~~performance~~purchase oforders ~~the~~as ~~manufacture~~ of the QTdate ~~Breast~~of ~~Scanners under~~ the Canon Manufacturing Agreement shall be ~~owned~~separately ~~solely~~agreed bybetween the parties in writing. CMSC; ~~provided,~~may ~~that~~reject toany ~~the~~purchase ~~extent~~order that ~~such~~requests ~~invention~~delivery isdates ~~based~~that onare ~~the~~not ~~Company’s~~in ~~confidential~~compliance ~~information~~with ~~and~~such isForecast ~~exercised~~Policy. onUnless the Company is manufacturing QT Breast Scanners ~~which~~as ~~are~~Novato ~~manufactured~~Manufacturing, any failure by CMSC, ~~and~~as ~~delivered~~a toresult ~~the~~of ~~Company~~CMSC’s conduct, ~~such~~to asmanufacture ~~manufacturing~~and ~~process~~deliver ~~flow,~~QT ~~CMSC~~Breast ~~agrees~~Scanners ~~not~~as tospecified ~~assert~~in ~~any~~an ~~IPR~~accepted inpurchase ~~and~~order necessary to ~~such~~satisfy ~~invention~~the ~~against~~forecasts ~~the~~later ~~Company,~~than ~~its~~seventy-five ~~affiliates~~days ~~and~~from ~~customers~~the delivery date as tospecified in the QTaccepted ~~Breast~~purchase ~~Scanners. All~~order ~~IPR~~shall toresult ~~and~~ in ~~any~~liquidated ~~invention,~~damages ~~whether~~per ~~patentable~~missed or ~~not~~delayed QT Breast Scanner of $220 thousand, ifwith ~~agreed~~NXC ~~between~~not ~~the~~being ~~parties~~obligated to ~~have~~pay ~~been~~for ~~conceived~~the ~~and~~missed ~~reduced~~MOQ tosale. ~~practice~~Such ~~jointly~~failure by CMSC shall also not provide any grounds for NXC to terminate the ~~Company~~Amended ~~and~~NXC ~~CMSC~~Distribution inAgreement or otherwise cancel the ~~performance~~binding nature of the ~~manufacture~~MOQs as provided in the Amended NXC Distribution Agreement. All title to and risk of loss of the QT Breast Scanners shall bepass ~~owned~~from ~~jointly~~CMSC ~~and~~to ~~equally~~the byCompany when the ~~Company~~QT ~~and~~Breast ~~CMSC,~~Scanners ~~and~~have ~~both~~been ~~parties~~delivered ~~shall~~to ~~have~~the Company in Novato, California, under the ~~right~~Incoterms to2020 ~~use~~trade term, ~~utilize~~DDP. ~~and~~The ~~exploit~~Company ~~such~~shall ~~IPR~~make inpayment ~~accordance~~of ~~with~~the ~~applicable~~QT ~~laws~~Breast ~~involved~~Scanners ~~without~~to aCMSC ~~prior~~within ~~consent~~ninety days after the issuing date of oran ~~any~~original ~~payment~~copy orof ~~consideration~~the invoice to ~~the~~be ~~other~~issued ~~party~~by CMSC.

~~The~~Prior ~~Company~~to ~~hereby~~the ~~grants~~delivery toof the QT Breast Scanners, CMSC ashall ~~personal~~inspect and ~~exclusive~~test ~~license~~all the QT Breast Scanners in accordance with the outgoing test procedures to ~~use,~~be ~~utilize~~approved ~~(including~~in ~~copy,~~writing ~~amend,~~by ~~revise~~the Company and ~~modify)~~as ~~and~~specified ~~exercise~~in the ~~IPR~~specifications ~~owned~~or byotherwise to be separately agreed upon between the parties in writing. The Company ~~solely~~shall ~~for~~perform ~~enabling~~the itvisual, toquantity ~~manufacture~~and/or quality inspection of the QT Breast Scanners ~~sold~~upon totheir ~~NXC~~receipt. ~~and~~If ~~provide~~any ~~maintenance~~of ~~support~~the ~~for~~QT ~~them,~~Breast ~~provided~~Scanners ~~that~~delivered ~~(i)~~is ~~such~~found ~~exclusive~~deficient ~~license~~in ~~may~~quantity be(as ~~sublicensed~~set toforth ~~NXC~~in ~~and~~the ~~other~~accepted ~~subsidiaries~~purchase oforder), ~~CMSC~~or is defective in material and~~/or~~ ~~authorized~~workmanship ~~maintenance~~or ~~companies~~inconformity (with the specifications, and such ~~authorization~~deficiency, todefect beor ~~provided~~non-conformity inis ~~writing~~caused by CMSC, the Company may submit a written claim notice to CMSC with sufficient supporting evidence, including but not limited to bephotographs ~~unreasonably~~and ~~refused~~reasonably detailed explanation. CMSC shall, ~~withheld~~at its sole discretion, oreither ~~delayed~~(i) ~~that~~deliver ~~provide~~additional ~~maintenance~~QT ~~services~~Breast onScanners anto ~~outsourced~~fulfil ~~basis (~~the ~~“Approved~~required ~~Parties”)~~quantity ~~solely~~or ~~for~~deliver replacement of the QT Breast Scanners, ~~distributed~~or by(ii) ~~NXC~~offer ~~pursuant~~an toequitable ~~the~~reduction ~~Amended~~in ~~Distribution~~the ~~Agreement,~~purchase ~~whether~~price orof ~~not~~ the QT Breast Scanners ~~are~~delivered, ~~distributed~~subject ~~before,~~to ~~on,~~mutual oragreement ~~after~~between the ~~entry~~parties. ~~into~~CMSC ~~the~~is ~~Canon~~providing ~~Manufacturing~~a ~~Agreement;~~warranty ~~otherwise~~on ~~such~~the ~~license~~QT Breast Scanners that they shall be ~~non-exclusive,~~free ~~non‑sublicensable~~from defects in material and ~~non-transferable,~~workmanship and conform to the specifications for a period of (iii) ~~CMSC~~twelve ~~shall~~months ~~refrain~~ from ~~using~~the ~~its~~delivery ~~license~~date of each QT Breast Scanner from the Company to ~~amend~~NXC, ~~revise~~or ~~and~~(ii) ~~modify~~twelve months from the installation date for the QT Breast Scanners, ~~including~~directly sold to end users by the ~~source~~Company. ~~code(s)~~If any defects in material and workmanship, or non-conformity of ~~software~~the ~~(which~~specifications occur during the warranty period and the Company provides a timely claim, CMSC shall, beat ~~held~~its insole ~~escrow~~discretion ~~pursuant~~(i) tosend ~~the~~a ~~terms~~replacement of a ~~separate~~part(s), ~~escrow~~(ii) ~~agreement~~send ~~among~~a ~~the~~brand ~~parties~~new ~~and~~QT anBreast ~~escrow~~Scanner ~~agent~~as a replacement, (iii) repair the ~~“Escrow~~defective ~~Agreement”~~QT Breast Scanner(s)), ~~unless~~and return them to the Company, ~~becomes~~or ~~party~~(iv) refund the equivalent price to anthe ~~event~~purchase price. CMSC shall only be responsible for recalls resulting from the manufacturing process of ~~any~~the ~~bankruptcy~~QT Breast Scanners or ~~other~~materials ~~insolvency~~and ~~proceeding~~parts procured by CMSC (aother ~~“QTI~~than ~~Bankruptcy”~~materials and parts procured from the Company).

IfAll ~~there~~intellectual isproperty ~~a QTI Bankruptcy~~rights, ~~CMSC~~including ~~may~~but ~~use~~not ~~its~~limited ~~license~~to inpatents, ~~accordance~~copyrights, ~~with~~know-how, ~~the~~and ~~following: in~~trade secrets (the ~~event~~“IPR”), ofwhich aeach ~~QTI~~party ~~Bankruptcy~~has ~~and~~owned ~~rejection~~before orentry ~~termination~~into of the Canon Manufacturing Agreement inor adevelops ~~QTI~~separately ~~Bankruptcy,~~from ~~all~~the ~~source~~performance ~~code(s)~~of ~~will be released by~~ the ~~escrow agent to CMSC and CMSC may exercise its rights to amend, revise and modify such source code(s) (A) to enable CMSC to~~ manufacture ~~(x)~~of upthe ~~to 100~~ QT Breast Scanners tounder bethis ~~sold~~agreement, toshall ~~NXC~~remain orthe ~~(y)~~exclusive inproperty of the ~~event~~Company ~~that~~or ~~100~~CMSC QTrespectively. ~~Breast~~All ~~Scanners~~IPR ~~have~~in ~~yet~~and to beany ~~sold to NXC by December 31~~invention, ~~2026,~~whether QTpatentable ~~Breast~~or ~~Scanners until December 31~~not, ~~2026,~~conceived ~~whichever occurs earlier,~~ and ~~(B)~~reduced to ~~enable~~practice ~~CMSC~~in ~~and~~ the ~~Approved~~performance ~~Parties until the earlier~~ of ~~(i)~~ the ~~end~~manufacture of the ~~five-year lifetime of the~~ QT Breast Scanners ~~sold~~under ~~to NXC pursuant to~~ the ~~Amended~~Canon ~~Distribution~~Manufacturing Agreement ~~and~~shall ~~(ii)~~be ~~December~~owned ~~31,~~solely ~~2031~~by ~~(such~~CMSC; ~~earlier date~~provided, ~~the~~that ~~“Maintenance Term”)~~ to ~~support~~ the ~~continuous~~extent ~~workable~~that ~~operation,~~such ~~but~~invention ~~not~~is ~~for~~based ~~upgrades~~on orthe ~~improvement~~Company’s ofconfidential ~~performance,~~information ofand QTis ~~Breast~~exercised ~~Scanners that were distributed by NXC before,~~ on, ~~or after~~ the ~~Canon~~QT ~~Manufacturing~~Breast ~~Agreement.~~Scanners ~~Following~~which ~~the~~are ~~expiration~~manufactured ofby ~~the Maintenance Term,~~ CMSC ~~shall~~and ~~return~~delivered to the Company, orsuch ~~its~~as ~~successor~~manufacturing ~~physical~~process ~~material~~flow, ~~released to~~ CMSC byagrees ~~the~~not ~~escrow agent and use commercially reasonable efforts~~ to ~~erase~~assert ~~electronically~~any ~~submitted~~IPR ~~material~~in ~~released~~and to itsuch byinvention against the ~~escrow agent~~Company, ~~provided,~~its ~~however,~~affiliates ~~that~~and ~~CMSC~~customers ~~shall~~as ~~be permitted~~ to ~~retain~~the ~~information~~QT ~~stored~~Breast ~~on backup or archival media pursuant to bona fide security measures or for legal compliance~~Scanners. In ~~the~~All ~~event~~IPR ~~that prior~~ to aand ~~QTI~~in ~~Bankruptcy~~any invention, ~~CMSC~~whether ~~terminates~~patentable ~~the~~or ~~Canon Manufacturing Agreement~~not, ~~other~~if ~~than~~agreed ~~because~~between the ~~Company~~parties ~~has substantially failed~~ to ~~comply~~have ~~with~~been ~~any~~conceived ~~provision of the Canon Manufacturing Agreement~~ and ~~that~~reduced ~~such~~to ~~non-compliance~~practice ~~has~~jointly ~~not~~by ~~been~~the ~~cured~~Company ~~within~~and ~~thirty~~CMSC ~~business~~in ~~days from~~ the ~~date~~performance of the ~~Company’s~~manufacture ~~receipt~~ of the ~~written~~QT ~~notice~~Breast ~~from~~Scanners ~~CMSC, in the event of a QTI Bankruptcy there~~ shall be noowned ~~release~~jointly ofand ~~source~~equally ~~code(s). Furthermore,~~by in the ~~event~~Company ~~that~~and ~~prior to a QTI Bankruptcy~~CMSC, ~~CMSC~~and ~~terminates~~both ~~this~~parties ~~agreement~~shall ~~because~~have the ~~Company~~right ~~has substantially failed~~ to ~~comply~~use, ~~with~~utilize ~~any provision of the Canon Manufacturing Agreement~~ and ~~that~~exploit such ~~non-compliance~~IPR ~~has~~in ~~not~~accordance ~~been~~with ~~cured~~applicable ~~within~~laws ~~thirty~~involved ~~business~~without ~~days~~a ~~from~~prior ~~the~~consent ~~date~~ of ~~the~~or ~~Company’s~~any ~~receipt~~payment ofor ~~the~~consideration ~~written~~to ~~notice~~the ~~from~~other ~~CMSC and there is a subsequent QTI~~ party.

35The Company grants to CMSC a personal and exclusive license to use, utilize (including copy, amend, revise and modify) and exercise the IPR owned by the Company solely for enabling it to manufacture the QT Breast Scanners sold to NXC and provide maintenance support for them, provided that (i) such exclusive license may be sublicensed to NXC and other subsidiaries of CMSC and/or authorized maintenance companies (with such authorization to be provided in writing by the Company, but not to be unreasonably refused, withheld, or delayed) that provide maintenance services on an outsourced

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~~Bankruptcy,~~basis (the ~~usage~~“Approved byParties”) ~~CMSC~~solely offor the ~~source~~QT ~~code~~Breast ~~released~~Scanners todistributed ~~CMSC~~by NXC pursuant to ~~this~~the ~~Article~~Amended ~~9.3.2~~NXC ~~shall~~Distribution beAgreement, ~~limited~~whether toor ~~subpart~~not ~~(B)~~the ~~set~~QT ~~forth~~Breast inScanners ~~the~~are ~~first~~distributed ~~sentence~~before, ~~of this paragraph. Furthermore~~on, ifor after the ~~Company~~entry ~~terminates~~into the Canon Manufacturing Agreement; inotherwise ~~the~~such ~~event~~license ~~that~~shall be nonexclusive, non-sublicensable and non-transferable, and (ii) CMSC ~~substantially~~shall ~~fails~~refrain tofrom ~~comply~~using ~~with~~its ~~any~~license ~~provision~~to ofamend, revise and modify the ~~Canon~~QT ~~Manufacturing~~Breast ~~Agreement~~Scanners, ~~and~~including ~~that~~the ~~such~~source ~~non‑compliance~~code(s) ~~has~~of ~~not~~software ~~been~~(which ~~cured~~shall ~~within~~be ~~thirty~~held ~~business~~in ~~days~~escrow ~~from~~pursuant to the ~~date~~terms of ~~its~~a ~~receipt~~separate ofescrow agreement among the ~~written~~parties ~~notice~~and ~~from~~an escrow agent (the ~~Company~~“Escrow Agreement”)), ~~then~~unless ~~there~~the ~~shall~~Company bebecomes noparty ~~release~~to an event of ~~source~~any ~~code~~bankruptcy or other insolvency proceeding (s)a to“QTI ~~CMSC~~Bankruptcy”).

If there is a QTI Bankruptcy, CMSC may use its license in accordance with the following: in the event of a QTI Bankruptcy and rejection or termination of the Canon Manufacturing Agreement in a QTI Bankruptcy, all source code(s) will be released by the escrow agent to CMSC and CMSC may exercise its rights to amend, revise and modify such source code(s) (A) to enable CMSC to manufacture (x) up to 100 QT Breast Scanners to be sold to NXC or (y) in the event that 100 QT Breast Scanners have yet to be sold to NXC by December 31, 2026, QT Breast Scanners until December 31, 2026, whichever occurs earlier, and (B) to enable CMSC and the Approved Parties until the earlier of (i) the end of the five-year lifetime of the QT Breast Scanners sold to NXC pursuant to the Amended NXC Distribution Agreement and (ii) December 31, 2031 (such earlier date, the “Maintenance Term”) to support the continuous workable operation, but not for upgrades or improvement of performance, of QT Breast Scanners that were distributed by NXC before, on, or after the Canon Manufacturing Agreement. Following the expiration of the Maintenance Term, CMSC shall return to the Company or its successor physical material released to CMSC by the escrow agent and use commercially reasonable efforts to erase electronically submitted material released to it by the escrow agent, provided, however, that CMSC shall be permitted to retain information stored on backup or archival media pursuant to bona fide security measures or for legal compliance. In the event that prior to a QTI Bankruptcy, CMSC terminates the Canon Manufacturing Agreement, other than because the Company has substantially failed to comply with any provision of the Canon Manufacturing Agreement and that such non-compliance has not been cured within thirty business days from the date of the Company’s receipt of the written notice from CMSC, in the event of a QTI Bankruptcy there shall be no release of source code(s). Furthermore, in the event that prior to a QTI Bankruptcy, CMSC terminates this agreement because the Company has substantially failed to comply with any provision of the Canon Manufacturing Agreement and that such non-compliance has not been cured within thirty business days from the date of the Company’s receipt of the written notice from CMSC and there is a subsequent QTI Bankruptcy, the usage by CMSC of the source code released to CMSC pursuant to this Article 9.3.2 shall be limited to subpart (B) set forth in the first sentence of this paragraph. Furthermore, if the Company terminates the Canon Manufacturing Agreement in the event that CMSC substantially fails to comply with any provision of the Canon Manufacturing Agreement and that such non-compliance has not been cured within thirty business days from the date of its receipt of the written notice from the Company, then there shall be no release of source code(s) to CMSC.

Unless earlier terminated in accordance with the terms of the Canon Manufacturing Agreement, this agreement shall remain effective until December 31, 2026. In case both parties mutually agree the extension of the Canon Manufacturing Agreement in writing, the Canon Manufacturing Agreement shall be extended for one year after the expiration of the Canon Manufacturing Agreement. In the event of “Change of Control” of a party, either party shall have the right to, at its sole discretion, terminate the Canon Manufacturing Agreement in its entirety upon forty-five business days’ prior written notice to the other party. Such notice shall be provided prior to the expiration of the then current term of the Canon Manufacturing Agreement. In the event of the termination or expiration of the Canon Manufacturing Agreement, CMSC will honor all of the outstanding accepted purchase orders, and both parties will cooperate to fulfill such orders. In the event that either party substantially fails to comply with any provision of the Canon Manufacturing Agreement and that such non-compliance has not been cured within thirty business days from the date of its receipt of the written notice from the other party, then the other party shall have the right to terminate the Canon Manufacturing Agreement upon giving a written notice. The Canon Manufacturing Agreement also provides other grounds for its termination prior to December 31, 2026, including by CMSC if NXC’s sales of the QT Breast Scanner are adversely affected due to any failures or other circumstances attributable to the Company that the Company is or is reasonably expected to be unable to remedy (including but not limited to Epidemic Failures; the submission of Medical Device Reports (MDRs) to the FDA regarding the QT Breast Scanner; any action by the Company (either voluntarily or upon an order or request by the FDA) to conduct a Field Correction, Market Withdrawal, Stock Recovery, or Recall (as such terms are defined by the FDA); any action by the Company or any regulatory authority to temporarily suspend shipments or manufacturing of QT Breast Scanners; or issues related to the Company’s business operations) within six months from the date of the onset of such an event. For these purposes, “Epidemic Failures” means a malfunctioning of five or more QT Breast Scanners collectively presumed to have a common underlying cause based on a reasonable evaluation. Following a termination or expiration of the Canon Manufacturing Agreement, the provisions with respect to the grants of licenses to the IPR of the Company will survive up to the earlier of (a) the end of the five-year lifetime of the QT Breast Scanners sold to NXC and (b) December 31, 2031.

~~The foregoing description is qualified in its entirety by reference to the Canon Manufacturing Agreement, a copy of which is attached hereto as Exhibit 10.46 and incorporated herein by reference.~~24

Sales and Marketing

The Company’s primary sales and marketing efforts in the short-to-medium term will be to focus on the $3 billion breast imaging market in United States supported by the exclusive partnership with our distribution partner, NXC Imaging.

Leverage Current Clearances to Build Presence and Awareness in the Medical Community

The current QT Breast Scanner is a Class II device subject to premarket notification and clearance under Section 510(k) of the FDCA. The QT Breast Scanner is currently cleared by the FDA under Section 510(k) (which clearance was granted in June 2017) for breast imaging but not as a replacement for screening mammography – currently, the device has FDA approval and can be reimbursed in cases where additional breast imaging is necessary. This includes women who need adjunctive screening, such as: women with dense breasts or where there is a finding; high risk women below the recommended age for mammography; and women who would benefit from more frequent breast imaging, such as women undergoing treatment or women on prophylactic medication to prevent breast cancer.

Many patients may find QT Imaging modality preferable for dense breasts, implants, post therapy screening where breasts can be very sensitive to compression and where patients have concerns about the radiation dose.

A particular opportunity for the Company under its current clearance is to provide a backup option for women who are recommended for a breast MRI but are unwilling or unable to have it for cost or accessibility reasons. With additional clinical data comparing the clinical efficacy of the QT Breast Scanner to MRIs, the QT Breast Scanner may become a less expensive, more patient-friendly alternative to MRIs (no contrast-dye, no claustrophobia, no noise). QT Scanners will free MRI scanners for other non-breast imaging studies.

Achieving clinical adoption requires building awareness and acceptance in the medical community. The first step will be to place machines with early adopters who see the benefits of the Company’s technology, are interested in using the

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~~device~~Clinical ~~in their practice, are willing to collect data on its use, and will publish results or speak to their peers about its clinical value.~~ Studies

AnThe ~~example~~Company ofhas ~~this~~conducted ~~strategy~~or incollaborated ~~practice~~on isseveral ~~the~~clinical ~~National~~studies ~~Cancer~~to ~~Institute~~evaluate ~~grant received in 2022 in partnership with~~ the ~~University~~imaging performance of ~~Illinois – Urbana-Champaign whereby~~ the Company ~~will place a QT Breast Scanner at St. Margaret~~’s ~~Hospital~~Breast inAcoustic ~~Toronto,~~CT ~~Canada~~scanner. ~~The~~These ~~objective~~include isclinical tostudies ~~evaluate~~that ~~and~~compared ~~measure~~ the ~~effectiveness~~Company’s oftechnology ~~the~~with ~~QTscan~~standard ~~in evaluation and monitoring cancer treatment in comparison to~~ breast ~~MRI~~imaging ~~which~~modalities: ~~is currently the standard~~full-~~of-care~~field indigital ~~quantitative~~mammography ~~monitoring~~(“FFDM”), ofdigital ~~response~~breast totomosynthesis ~~therapy.~~(“DBT”), ~~The results of the study will be published~~ and ~~would~~MRI. ~~represent~~We anhighlight ~~independent~~several ~~validation~~ of the ~~clinical~~most ~~value~~significant ofstudies ~~the~~below, ~~QTscan~~which ~~with~~span ~~the~~three ~~imprimatur~~related areas of aperformance: ~~respected~~recall ~~university~~rates, ~~hospital,~~diagnostic ~~and the National Cancer Institute. The Company intends to establish similar peer-review partnerships with respected medical organizations~~characterization, ~~practices,~~ and ~~practitioners~~supplemental ~~in the future~~screening.

~~Sales~~Recall ~~and Marketing Strategy~~ Rates:

~~The~~Background: ~~Company’s~~Mammography ~~sales~~has ~~efforts~~a ~~are~~low ~~supported~~positive bypredictive ~~partnership~~value. ~~with~~Overlying ~~strategic~~fibroglandular ~~sales~~tissue ~~and~~can ~~distributors~~mask ~~partners~~a cancer, especially for women with ~~solid~~dense ~~channels~~breasts. It can also cause summation artifacts, resulting in ~~the~~false-positive ~~industry~~findings and ~~large~~more ~~sales organizations~~recalls. ~~The~~Studies ~~Company~~show ~~will~~that ~~scale~~mammography ~~scanner~~leads ~~placements~~to inunnecessary ~~hospitals,~~follow-up ~~imaging~~procedures ~~centers~~— such as handheld ultrasound or MRIs and biopsies — leading to unnecessary patient anxiety, costs, and ~~health~~time. ~~centers~~For ~~via~~every ~~such~~1,000 ~~partnerships~~screening mammograms, 150 women are called back for more tests but only three are diagnosed with cancer. Given the need to reduce unnecessary recalls, the Company evaluated the recall rates of the Company’s Breast Acoustic CT scanner compared with mammography.

~~Use an Installed Base as a Platform to Expand Awareness and Produce Additional Data for Clinical Acceptance, Reimbursement, and Additional FDA Clearances~~ Study:

~~Part~~1. Bilal ofMalik, ~~the~~PhD, ~~challenge~~Elaine ofIuanow, ~~achieving~~MD, ~~clinical acceptance~~ and ~~adoption~~John ofKlock, ~~the~~MD. ~~Company’s~~An ~~technology~~Exploratory isMulti-reader, ~~data~~Multi-case ~~that~~Study ~~proves~~Comparing ~~the~~Transmission ~~efficacy~~Ultrasound ~~of the QTscan relative~~ to ~~the~~Mammography ~~current~~on ~~standard~~Recall ofRates ~~care for breast imaging in screening, diagnosis~~ and ~~treatment.~~Detection ~~The~~Rates ~~rollout~~for ~~of QT~~ Breast ~~Scanners~~Cancer asLesions. ~~described~~Academic inRadiology ~~the~~Vol ~~previous~~29 ~~section~~– ~~will~~Supplement ~~provide~~1 ~~multiple means of collecting this data for clinicians~~S10-S18, ~~which~~Jan ~~can~~2022; ~~also be used to support reimbursement~~ https://doi.org/10.1016/j.acra.2020.11.0.11 and ~~expanded~~https://www.academicradiology.org/article/S1076-6332(20)30646-2/fulltext. ~~FDA~~In ~~clearances~~consultation ofwith ~~the~~Cytel ~~QT Breast Scanner as an alternative to screening breast MRI in younger women~~ (~~under~~Cambridge, 40MA), ~~years~~the ofCompany ~~age)~~designed, ~~with~~conducted, ~~above~~and ~~average~~funded ~~risk~~this ofretrospective ~~breast cancer~~trial.

~~Data~~An ~~collection~~exploratory, ~~and analysis~~multi-reader, ~~support~~multi-case ~~reimbursement~~study evaluated radiologists’ performance on lesion detections and ~~expanding~~non-cancer ~~FDA~~recall ~~clearances~~rates ~~are~~for ~~time~~the Company’s Breast Acoustic CT platform versus standard full-~~consuming~~field digital mammography, ~~but~~using ~~with~~retrospective ~~the~~data ~~help~~from oftwo ~~the~~case ~~installations~~collection ~~that~~clinical ~~will~~trials beconducted ~~accelerated~~at ~~through~~five ~~the~~sites ~~placement~~between ~~programs~~2006-2018. ~~detailed~~All ~~above,~~subjects ~~the~~received ~~Company~~both ~~believes~~FFDM ~~that~~and itQTscans ~~can~~within ~~achieve~~90 ~~these~~days. ~~objectives~~Data were analyzed in a reader study with ~~maximum~~full ~~efficiency~~factorial design involving 22 radiologists and 108 breast cases (42 normal, 39 pathologically-confirmed benign, and 27 pathologically-confirmed cancer).

~~Market~~This ~~Segments~~MRMC study found that the readers’ mean rate of detecting lesions of any type was 4% higher (p-value > 0.05) with QTscans compared with FFDM. The study also found that QTscans significantly decreased the mean non-cancer recall rate by 16% (p-value = 0.03) at the expense of a 2% decrease in the mean cancer recall rate (p-value > 0.05), compared with FFDM. In summary, this exploratory MRMC study indicates that QTscans improve non-cancer recall rates without substantially affecting cancer recall rates.

AsDiagnostic the installed base for QT Breast Scanners expands, and as discussed above, the Company intends to tailor its marketing efforts towards three segments as it builds awareness and acceptance for its imaging technology. All are important for success, and each requires its own strategy and messaging. Characterization:

•Background: Patients. ~~This~~often isgo ~~the~~through ~~end~~follow-~~user/consumer~~up –procedures, ~~the~~such ~~women~~as ~~who~~a HHUS scan, to identify whether screening mammography (FFDM or DBT) findings are ~~dissatisfied~~due ~~with~~to a cyst or solid lesion. HHUS can improve cancer detection, particularly for the ~~current~~peripheral ~~scanning~~regions ~~model~~of the breast and axilla. ~~The~~However, ~~Company~~HHUS ~~intends~~is tonot ~~approach~~suitable ~~patients~~for ~~through~~primary ~~multiple~~breast ~~channels~~screening, ~~beginning~~and ~~with~~its ~~outreach~~2D ~~efforts~~nature leads to ~~recruit~~a ~~key~~low ~~influencers~~specificity and ~~opinion~~high ~~leaders.~~number ~~These~~of ~~individuals~~false ~~would~~positives. beHHUS ~~recruited~~is ~~through~~also ~~networking~~very ~~and~~operator ~~education~~dependent, ~~via~~with ~~targeted~~reproducibility ~~interest~~issues ~~groups~~that ~~and~~impact ~~would~~diagnostic ~~become~~accuracy. ~~advocates~~Thus, ofan ~~the~~alternative, ~~benefits~~more ofaccurate, ~~the~~automated ~~Company’s~~imaging ~~technology~~modality is needed to ~~their~~distinguish ~~respective~~between ~~groups~~cysts and solids.

~~•Medical~~Many ~~Professionals/Radiologists.~~patients Inalso ~~addition~~require toadditional ~~marketing~~follow-up ~~to women~~imaging, ~~the~~such ~~Company~~as ~~launched~~ an ~~intensive~~MRI, ~~campaign~~to ~~aimed~~further atidentify ~~the~~and ~~medical~~characterize ~~community.~~lesions ~~This~~in isorder ato ~~more~~distinguish ~~difficult~~between ~~effort~~benign ~~than~~and ~~that~~malignant ~~aimed~~masses. atFor ~~women~~example, –mass ~~from~~morphology ~~the~~(such ~~provider~~as ~~perspective,~~irregularity ~~the~~and ~~need~~circulatory), ~~for~~dimensions, ~~multiple scans~~ and ~~callbacks~~characteristics ~~that~~ are acommonly ~~negative~~used ~~for~~to ~~patients~~differentiate ~~are~~benign ~~actually~~from ~~seen~~malignant asbreast anmasses. ~~economic~~Critical ~~positive~~to asdiagnosis ~~additional~~and ~~patient~~treatment ~~visits~~decisions, ~~generate~~alternative abreast ~~significant~~imaging ~~amount~~options ofare ~~revenue.~~needed ~~This is true~~ for ~~both~~mass ~~institutions~~characterization ~~and~~when ~~radiologists,~~an ~~and~~MRI ~~neither~~is ~~have~~not afeasible ~~great~~due ~~incentive~~ to ~~deviate~~availability ~~from~~or ~~the~~patient ~~current status quo~~contraindications.

~~NXC~~Studies: ~~Distribution Agreement~~

We2. Elain ~~are~~Iuanow, ~~supported~~MD, byKathleen aSmith, ~~strong~~MBA, ~~distribution~~Nancy ~~and business partnership with NXC~~A. On ~~May 13~~Obuchowski, ~~2023~~PhD, QTJennifer ~~Imaging~~Bullen, ~~entered~~MS, ~~into~~and ~~the~~John ~~NXC~~C. ~~Sales Agent Agreement with NXC~~Klock, ~~pursuant~~MD. toAccuracy ~~which~~of QTCyst ~~Imaging~~Versus ~~appointed~~Solid ~~NXC~~Diagnosis asin the ~~non-exclusive~~Breast ~~agent~~Using ~~for~~Quantitative ~~the~~Transmission ~~sale of the~~ (QT) ~~Breast~~Ultrasound. ~~Scanner~~Academic ~~and~~Radiology ~~related~~Vol ~~services~~24, inIssue ~~non-exclusive~~9, ~~territories:~~Sept ~~the~~2017; Uhttps://doi.Sorg/10.~~, U~~1016/j.Sacra.2017.03.024 ~~territories,~~ and Uhttps://www.Sacademicradiology. ~~Department of Defense installations~~org/article/S1076-6332(17)30207-6/fulltext. ~~Additionally,~~This ~~NXC~~work was ~~appointed~~performed ~~as the exclusive servicer of the QT Breast Scanners sold~~ by ~~NXC under~~ the ~~terms~~Company ~~of the NXC Sales Agent Agreement. Under the NXC Sales Agent Agreement, QT Imaging had the right to set the price for its products~~ and agreed to pay NXC a commission based on the purchase order price charged to a customer. Pursuant to the NXC Sales Agent Agreement, NXC was responsible for promotion and sale of the QT Breast Scanner and related services within the designated territory, as well as servicing the QT Breast Scanners sold by NXC. The initial term of the NXC Sales Agent Agreement was for three years.

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~~Subsequently, effective June 10, 2024, we and NXC replaced~~ the ~~NXC~~Cleveland ~~Sales~~Clinical ~~Agent Agreement with the NXC Distribution Agreement~~Foundation. ~~Under~~It ~~the~~was ~~NXC~~supported ~~Distribution~~by ~~Agreement, NXC is appointed as~~ the ~~exclusive~~Company ~~reseller to market, advertise,~~ and ~~resell~~a QTgrant 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~~National toCancer ~~sell~~Institute ~~directly to customers as an exception~~R01CA138536. 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.

OnA ~~October~~retrospective 29multi-reader, ~~2024,~~multi-case wereceiver ~~and~~operating ~~NXC~~characteristics ~~entered~~study ~~into~~evaluated ~~Amendment No. 1 to~~ the ~~Distribution~~diagnostic ~~Agreement~~accuracy ~~(the~~in ~~“First~~determining ~~Amendment”)~~whether toa ~~expand~~breast ~~Section~~lesion 20is ofa ~~the~~cyst ~~NXC~~versus ~~Distribution~~a ~~Agreement~~solid, tousing ~~provide that NXC shall be obligated to inform its customers who purchase~~ the QTCompany’s Breast ~~Scanner~~Acoustic ~~(the~~CT ~~“Equipment”)~~platform ~~that~~as ~~such~~an ~~customers~~adjunct ~~shall~~to ~~not~~mammography. ~~(i)~~Fourteen ~~use,~~readers ~~copy,~~performed ~~distribute~~blinded, ~~display,~~randomized ~~perform,~~reads orwith ~~prepare~~digital ~~derivative~~mammography ~~works~~and ofQTscan ~~any~~images ~~materials~~— ~~accompanying~~assigning orboth ~~embodied~~a inbinary ~~the~~classification ~~Equipment~~of ~~(except~~cyst toversus ~~the~~solid ~~extent expressly permitted by such customer’s license to such Equipment~~ and ~~its~~a ~~documentation)~~confidence orscore (~~ii)~~0-100; ~~use~~where ~~any~~0 ~~Seller~~represents ~~Marks~~0% ~~(as~~confidence ~~defined~~that inlesion ~~the~~is ~~NXC~~solid ~~Distribution~~or ~~Agreement),~~100% inthat ~~each~~it ~~case~~is ~~without~~a ~~our prior written consent~~cyst). ~~Further,~~A ~~the~~95% ~~First~~bootstrap ~~Amendment~~confidence ~~provides~~interval ~~that~~(CI) ~~upon~~was ~~any~~also ~~unauthorized~~computed ~~use~~for of the ~~Seller~~readers’ ~~Marks~~mean orreceiver ~~materials~~operating ~~accompanying~~characteristic ~~the~~area, ~~Equipment by any customer~~sensitivity, ~~NXC shall promptly inform us~~ and ~~provide all reasonably requested assistance in termination such unauthorized use~~specificity.

OnUsing ~~December~~the 11readers’ binary classification of cyst or solid lesions, ~~2024~~this MRMC study found that the mean sensitivity was 93.3% (95% CI: 83.7, we99.5) and ~~NXC~~the ~~entered~~mean ~~into~~specificity ~~the~~was ~~Amended~~85.8% ~~Distribution~~(95% ~~Agreement~~CI: 70.1, ~~which~~98.5). ~~amends~~When ~~and~~the ~~restates~~readers’ confidence scores were used to distinguish a cyst versus a solid, the ~~NXC~~mean ~~Distribution~~receiving ~~Agreement~~operating incharacteristics ~~its~~area ~~entirety~~was 0.92 ~~The~~(95% ~~Amended~~CI: ~~Distribution~~0.927, ~~Agreement~~0.985). ~~provides~~In ~~for~~summary, ~~the~~this ~~following~~MRMC ~~modifications~~study todemonstrates ~~the~~that ~~NXC~~QTscans ~~Distribution~~are ~~Agreement~~highly accurate at diagnosing a cyst versus a solid lesion, ~~with~~suggesting ~~the~~that ~~balance~~QTI oftechnology ~~terms~~can ~~(including~~be ~~those~~used ~~added~~as byan ~~the~~adjunct ~~First~~to ~~Amendment)~~mammography ~~remaining~~to ~~materially~~improve ~~unchanged:~~specificity in breast evaluation.

~~Sale~~3. Maria L. Anzola, David Alberico, Joyce Yip, James Wiskin, Bilal Malik, Raluca Dinu, Belinda Curpen, Michael L. Oelze, and Gregory J. Czarnota. Quantitative Volumetric Analysis Using 3D Ultrasound Tomography for Breast Mass Characterization. Tomography 2025, 11, 111; https://doi.org/10.3390/tomography11100111 and https://www.mdpi.com/2379-139X/11/10/111. This study was conducted by the Sunnybrook Health Sciences Centre in Toronto, Canada and registered on ClinicalTrials.gov (NCT06175078). It was funded by the National Institute of ~~Equipment~~Health grant RO1CA273700-01.

~~Under~~This ~~terms~~prospective, ofsingle-center, ~~the~~observational, ~~Amended~~early ~~Distribution~~validation ~~Agreement,~~study inevaluated the ~~event~~use ~~that~~of ~~CMSC~~QTscans ~~enters~~in ~~into~~detecting, ancharacterizing, ~~OEM~~and ~~manufacturing~~measuring ~~agreement,~~the ~~then~~volume ~~fulfillment~~of bybreast ~~the~~masses ~~parties~~in comparison to ~~such~~MRI. ~~manufacturing~~The ~~agreement~~study was conducted in a cohort of ~~their~~20 ~~respective~~female ~~obligations~~patients: ~~under~~16 ~~such~~patients ~~manufacturing~~with ~~agreement~~biopsy-proven ~~shall~~malignant bebreast atumors ~~condition~~and to4 ~~NXC~~patients ~~being~~with ~~the~~biopsy-proven ~~exclusive~~benign ~~reseller~~lesions. toThe ~~market,~~comparative ~~advertise,~~analysis between QTscans and ~~resell~~MRI ~~the~~evaluated ~~Equipment~~key inquantifying ~~the~~metrics ~~U.S.~~for breast mass characterization, including breast mass morphology, dimensions, and Ucharacteristics.S. ~~territories.~~

~~Minimum~~This ~~Order~~study’s ~~Quantities~~findings indicate some differences in lesion characterization between the two imaging modalities. Nevertheless, QTscans demonstrated good performance in identifying relatively small tumors, multiple lesions, satellite lesions, intraductal extensions, and ~~Pricing~~calcifications, as well as offering valuable diagnostic insights. MRI with contrast offered a broader distribution in size classification, providing useful insight into areas for continued development and optimization for QTI technology. In summary, the study found good overall agreement between MRI and QTscans for assessing breast mass volume in most cases. These results suggest that QTscans could excel in specific diagnostic scenarios — particularly when evaluating advanced or multifocal disease — and may serve as an important alternative breast imaging option when MRI is not feasible due to availability or patient contraindications.

~~The~~Supplemental ~~Amended~~Imaging: Distribution Agreement provides that no later than five days prior to the end of each calendar quarter, NXC shall provide to us a forecast of the anticipated purchases of Equipment during the subsequent twelve-month period. The Amended Distribution Agreement further provides that the forecast for 2025 and 2026 shall be no less than the Minimum Order Quantities (the “MOQs”) set forth in an exhibit to the Amended Distribution Agreement, by quarter and by year. Furthermore, all purchase orders from NXC shall be for no less than the MOQs, which NXC must order on the quarterly and annual basis as set forth in an exhibit to the Amended Distribution Agreement. However, in the event that the we and CMSC do not enter into an OEM manufacturing agreement, then the MOQs shall be non-binding only in the event that we cannot fulfill the manufacture and delivery volumes required for NXC to meet the MOQs.

~~Should~~Background: ~~NXC~~Mammography ~~fail~~(FFDM toand ~~submit~~DBT) aare ~~purchase~~the ~~order~~standard screening modality for nobreast ~~less~~cancer. ~~than~~In addition, supplemental screening with MRI is also standard for women at elevated risk of breast cancer — based on risk factors such as a personal or family history, first-degree family genetics, history of radiation to the ~~MOQs~~chest inbefore ~~any~~age ~~quarterly~~30, and/or ~~annual~~having ~~period~~dense breasts. In the US, ~~then~~40%-50% weof ~~may~~women ~~invoice~~ages ~~NXC~~40-74 have dense breasts, and ~~NXC~~it’s ~~shall~~even ~~pay~~more uscommon for ~~the~~young ~~difference~~women. ~~between~~Having ~~the~~dense ~~Equipment~~breasts ~~purchased~~means that a women’s breasts have a higher portion of glands, ducts, and connective tissue compared to fatty tissue, which makes it more difficult for a mammogram to detect cancer. Although MRIs can locate breast lesions missed by mammography and in younger women, breast MRIs also have limitations. In particular, some women cannot get breast MRIs because they are allergic to the ~~MOQs~~gadolinium-based contrast agents, have impaired renal function, or are pregnant or breast feeding. An alternate breast imaging modality is needed for ~~such~~supplemental ~~period~~screening, particular for women with high risk.

NXC’s purchases will be in accordance with a product pricing schedule attached to the Distribution Agreement as an exhibit (subject to change upon 60 days’ prior written notice by us). The Amended Distribution Agreement removed the cap on markup by NXC on its resale of the cost of the Equipment that was provided for by the NXC Distribution Agreement, such that NXC may set the resale price for customers at its sole discretion.Studies:

~~Payment~~4. Yulei ~~Terms~~Jiang, PhD, Elaine Iuanow, MD, Bilal Malik, PhD, and John Klock, MD. A Multireader Multicase (MRMC) Receiver Operating Characteristic (ROC) Study Evaluating Noninferiority of Quantitative Transmission (QT) Ultrasound to Digital Breast Tomosynthesis (DBT) on Detection and Recall of Breast Lesions. Academic Radiology Volume 31, Issue 6, June 2024; https://doi.org/10.1016/j.acra.2023.12.038 and https://www.academicradiology.org/article/S1076-6332(23)00716-X/fulltext. This study was conducted by the Company and the University of Chicago. It was funded in part by the National Cancer Institute grant RO1CA138536.

Except as otherwise set forth in an applicable Approved Order, the Amended Distribution Agreement provides that we will invoice NXC upon shipment of the Equipment and NXC shall pay the invoice by net thirty days from shipment of the Equipment.26

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This prospective, case-collection study was conducted at four clinical sites. It enrolled adult women with either normal or abnormal mammograms who received a standard clinical digital breast tomosynthesis followed by a QTscan within 90 days. The study collected and analyzed a total of 177 single-breast image cases (66 with cancer atypia or solid mass and 111 normal or with nonsolid benign abnormality). After ~~Sale~~receiving ~~Service~~QTI training, 24 radiologists interpreted the 177 cases for QTscans first and then for DBT synthesized 2D-views two weeks later. The readers reported up to three findings per case, identifying a recall or no recall decision and confidence score of that decision for each finding. A MRMC ROC analysis was performed to test for the noninferiority of QTscans to DBT. The sensitivity and specificity were estimated from the readers’ call-back versus no call-back decisions.

~~The~~This ~~Amended~~MRMC ~~Distribution~~ROC ~~Agreement~~study ~~obligates~~demonstrated usthat tothe ~~continue~~Company’s Breast Acoustic CT scanner is noninferior to ~~provide~~DBT ~~technical~~in ~~support,~~terms ~~spare~~of ~~parts,~~ROC analysis and ~~necessary~~the ~~know-how~~Area inUnder ~~order~~the Curve (mean AUC for ~~NXC~~QTscan toof ~~continue~~0.746 tovs. ~~service~~0.700 ~~and~~for ~~support~~DBT; ~~Equipment~~p-value < 0.05). While sensitivity slightly decreased for atQTscans ~~least~~(70.6% ~~five~~for ~~years~~QTscans ~~after~~vs. ~~installation~~85.2% offor ~~the~~DBT), ~~Equipment~~specificity atimproved asignificantly ~~customer~~(60.1% ~~site~~for QTscans vs. ~~The~~37.2% ~~Amended~~for ~~Distribution~~DBT). ~~Agreement~~The study also ~~deleted~~showed athe ~~provision~~recall inrate ~~the~~of ~~NXC~~benign ~~Distribution~~cysts ~~Agreement~~improved substantially. In summary, this MRMC observer performance study demonstrates that ~~required~~QTscans ~~NXC~~improve torecall ~~request~~and ~~each~~lesion ofdetection ~~its~~with ~~customers~~higher tospecificity ~~have~~and less false positives compared with DBT, suggesting QTI technology’s potential as a ~~qualified~~supplemental orimaging ~~trained~~tool, ~~breast~~particularly ~~radiologist~~for women too young to undergo mammography.

~~Limited~~5. Zohaib ~~Warranty~~Lakhani MD, Chidi Nwachukwu MD, Francisco Maldonado MD, Gina Hesley MD, Tiffany Sae-Kho MD, Sharmilla Giri MS, Nicolas Larson MS PhD, Matthew Urban PhD, Taylor Pierson RT(R)(M)(BS), and Christine Lee MD PhD. Comparison of Quantitative Transmission Imaging and MRI for High-Risk Screening of Breast Cancer: A Pilot Study. Conference Abstract. This study was conducted by Mayo Clinic in Rochester, MN (CLS-20587117) and registered at Mayo Clinic (https://www.mayo.edu/research/clinical-trials/cls-20587117) and ClinicalTrials.gov (NCT07216274).

~~The~~This ~~Amended~~prospective ~~Distribution~~pilot ~~Agreement~~study ~~contains~~evaluated ~~limited~~the ~~warranties~~effectiveness ~~with~~of ~~respect~~QTscans tocompared ~~the~~with ~~Equipment~~MRI ~~and~~as ~~relevant~~a ~~spare~~supplemental ~~parts,~~screening totool ~~remain~~for inpatients ~~effect~~with (a) ~~for~~high ~~Equipment~~risk ~~for~~of ~~the~~breast ~~shorter~~cancer. The study enrolled 26 women with an elevated lifetime risk of ~~fifteen~~breast ~~months~~cancer (>20%) from ~~the~~July ~~shipment~~to ofOctober, 2025. All patients underwent a bilateral breast MRI and QTscan, where the ~~Equipment~~QTscan orwas ~~twelve~~performed ~~months~~within ~~from~~30 days of the ~~date~~MRI. Images of ~~customer~~both ~~acceptance~~modalities were independently interpreted by four breast radiologists with 2-24 years of ~~installed~~experience. ~~Equipment~~For each finding, the radiologists recorded imaging characteristics, size, and location and assigned a Breast Imaging Reporting and Data System (bBI-RADS) ~~the~~score. ~~relevant~~Agreement ~~spare~~between ~~parts~~paired ~~for~~MRI ~~the~~and ~~shorter~~QTscan ofBI-RADS ~~twelve~~scores ~~months~~was ~~from~~evaluated for the ~~date~~ordinal of(BI-RADS ~~their~~1-5) ~~shipment~~ and ~~six~~the ~~months~~binary ~~from~~categories ~~the~~of ~~date~~negative ~~that~~(BI-RADS ~~their~~1-2) ~~completion~~or ispositive ~~installed~~(BI-RADS 3-5).

~~Non~~In this study, the radiologists recorded up to three imaging findings per breast with a total of 104 breast images analyzed for the entire cohort of 26 patients. Across both imaging modalities, 71/104 breast images had no findings, 30/104 had one finding, and 3/104 had two findings. The study found exact BI-~~Solicitation~~RADS agreement between QTscan and MRI in 34/52 breasts (65%), with a weighted Cohen’s kappa of 0.28 (-0.093, 0.594). It observed binary agreement in 47/52 breasts (90%) with unweighted Cohen’s kappa of 0.23 (-0.083, 0.781). One BI-RADS 4 MRI finding with benign pathology on biopsy was classified as BI-RADS 3 on a QTscan. In summary, this pilot study demonstrated that the high absolute agreement between MRI and QTscans, suggesting their comparable effectiveness in identifying positive findings.

The Amended Distribution Agreement contains a non-solicitation provision stating that we agree, during the term thereof and for a period of three years after, we shall not, directly or indirectly: (a) interfere with or attempt to interfere with any relationship between NXC and any of its distributors, agents, employees, consultants, independent contractors, agents or representatives, (b) solicit the business or accounts of NXC, or (c) divert or attempt to direct from NXC any business or interfere with any relationship between the NXC or any of its clients, suppliers, customers or other business relations; provided, however, that we may engage with the end customers that have acquired the Equipment to the extent necessary to enable such end customers to utilize the Equipment. Furthermore, to the extent not otherwise prohibited by law, each party agrees that, during the term of the Amended Distribution Agreement and for a period of three years after, each party shall not, directly or indirectly solicit for employment the employees of the other except to the extent that such solicitation is done through a general advertisement or solicitation that is not specifically targeting the employees of the other.

Term

The Amended Distribution Agreement extends the term from December 31, 2025 until December 31, 2026, unless earlier terminated or extended by mutual written agreement.

On March 28, 2025, we entered into Amendment No. 1 to the Amended and Restated Distribution Agreement (the “First Amendment to A&R Distribution Agreement”). The First Amendment to A&R Distribution Agreement amends certain provisions of the Amended Distribution Agreement. It provides, among other things, that we reserve the right to sell the Equipment directly to a third party as an exception, and any such direct sale by us shall occur after a prior written notification to NXC and shall count towards the MOQs, provided that if a third party is a competitor of NXC as defined in the First Amendment to A&R Distribution Agreement or an existing customer of NXC or NXC’s reseller or sales agent at the time when we seek to sell the Equipment directly to the third party, we may not sell the Equipment to such third party. It also provides that NXC shall provide us with the forecast of the anticipated purchases of Equipment during the subsequent twelve-month period no later than forty-five days prior to the end of each calendar quarter, rather than five days prior to the end of each calendar quarter. No changes are made to the amount of the MOQs by the First Amendment to A&R Distribution Agreement, but the MOQs shall not be binding if at any time (a) we cannot fulfill the manufacturing and delivery volumes required for NXC to meet the quarterly MOQs, including due to (i) failures or other circumstances attributable to us including, but not limited to, issues relating to design or performance of the Equipment (e.g., failure of the Equipment to meet its published specifications), orders by the FDA or another governmental organization to temporarily or permanently suspend shipments, and to activities or operations of QTI, or (ii) a final non-appealable judgment that would impair our ability to fulfill such manufacturing and distribution volumes as a result of (A) intellectual property infringement made by a third party relating to the Equipment or (B) other legal proceedings against us; or (b) we engage with any competitor or existing customers of NXC or its reseller or sales agent to sell the Equipment in violation of the terms of the Amended Distribution Agreement, as amended. Furthermore, the First Amendment to A&R Distribution Agreement provides that in the event NXC is prevented from selling the Equipment due to actions of or attributable to us, we and NXC will discuss in good faith. We also agreed to introduce at least one new product improvement per year to the Equipment, that we will also timely correct all Equipment bugs or other defects as necessary to address performance issues, and that any increases of the price of the Equipment shall be upon mutual agreement of the parties. Also, in the event of an Equipment Recall (as such term is defined in the First Amendment to A&R Distribution Agreement), the First Amendment to A&R Distribution Agreement provides both parties shall promptly consult and cooperate with the other party, including with respect to the appropriate action to be taken in connection with such Equipment Recall, and mutually agree to

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appropriately modify the MOQs for the respective quarter or until the Equipment Recall is corrected with mutual agreement with NXC.

The foregoing description is qualified in its entirety by reference to the First Amendment to A&R Distribution Agreement, a copy of which is attached hereto as Exhibit 10.47 and incorporated herein by reference.

Selectively Consider Offshore Marketing Opportunities

Although we have primarily focused our resources on the U.S. market, QT Imaging did commence some marketing initiatives outside the U.S. Pursuant to the Innovador Distribution Agreement between QT Imaging and Innovador, dated November 2, 2022, QT Imaging appointed Innovador as QT Imaging’s distributor for much of Asia. The Asia market is attractive as the incidence of dense breast tissue in Asian women36 is higher than that in the U.S. women37.The territory for the Innovador Distribution Agreement includes Singapore, Malaysia, Thailand, Indonesia, Philippines, Myanmar, Vietnam, Cambodia, Laos, Brunei, India, Pakistan, Sri Lanka, Bangladesh, Nepal, Mongolia, Taiwan, Hong Kong, and Macau. Under the Innovador Distribution Agreement, QT Imaging is responsible for developing and manufacturing its products and supporting Innovador’s product registration and sales and marketing efforts, and Innovador is responsible for product registration, market development, sales & marketing, distribution, and service of the QT Imaging products. Under the Innovador Distribution Agreement, Innovador provides QT Imaging with nonbinding forecasts of the volume of QT Imaging’s products it expects to sell each year. Innovador takes possession of any machines it purchases.

The initial term of the Innovador Distribution Agreement is three years. Either party may terminate the Innovador Distribution Agreement if the counterparty breaches the agreement, engages in fraudulent conduct, becomes insolvent or is adjudicated bankrupt, or fails to function as a viable and operative concern or to conduct its operations in the normal course of business.

Government Regulation

Our existing product, the QT Breast Scanner, products under development, and our operations are 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.

FDA Regulation of Medical Devices

The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices to ensure that medical devices distributed within the U.S. are safe and effective for their intended uses and otherwise meet the requirements of the FDCA.

FDA Premarket Clearance and Approval Requirements

Subject to certain exceptions, each medical device commercially distributed in the U.S. requires either FDA clearance of a 510(k) premarket notification, or approval of a pre-market approval application (“PMA”). Under the FDCA, medical devices are classified into one of three classes-Class I, Class II or Class III-depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to ensure its safety and effectiveness. Class I includes devices with the lowest risk to the patient and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance with the applicable portions of Quality System Regulation (“QSR”), facility registration and product listing, reporting of adverse medical events and truthful and non-misleading labeling, advertising and promotional materials. Class II devices are subject to the FDA’s General Controls, and special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device. These special controls can include performance standards, post-market surveillance, patient registries and FDA guidance documents.

36 See, American Journal of Roentgenology, Mammographic Breast Density and Race (Apr. 2007), Table 1, available at https://www.ajronline.org/doi/10.2214/AJR.06.0619#:~:text=This%20study%20shows%20that%20Asians.

37 See, CDC, What does it Mean to Have Dense Breasts, available at https://www.cdc.gov/breast-cancer/about/dense-breasts.html?CDC_AAref_Val=https://www.cdc.gov/cancer/breast/basic_info/dense-breasts.htm (last visited Jan. 4, 2024).

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~~510(k)~~devices ~~premarket~~are ~~notification~~classified isinto ~~generally~~one ~~known~~of asthree ~~510(k)~~classes-Class ~~clearance.~~I, ~~Devices~~Class ~~deemed~~II byor Class III-depending on the ~~FDA~~degree toof ~~pose~~risk associated with each medical device and the ~~greatest~~extent ~~risks,~~of ~~such~~manufacturer asand ~~life~~regulatory ~~sustaining,~~control ~~life~~needed ~~supporting~~to orensure ~~some~~its ~~implantable~~safety ~~devices,~~and oreffectiveness. Class I includes devices ~~that~~with ~~have~~the alowest ~~new~~risk ~~intended~~to ~~use,~~the orpatient ~~use~~and ~~advanced~~are ~~technology~~those ~~that~~for iswhich ~~not~~safety ~~substantially~~and ~~equivalent~~effectiveness can be assured by adherence to ~~that~~the ofFDA’s aGeneral ~~legally~~Controls ~~marketed~~for ~~device~~medical devices, ~~are~~which ~~placed~~include incompliance ~~Class~~with ~~III~~the applicable portions of Quality System Regulation (“QSR”), ~~requiring~~facility ~~approval~~registration and product listing, reporting of aadverse ~~PMA.~~medical ~~Some~~events ~~pre-amendment~~and ~~devices~~truthful ~~are~~and ~~unclassified~~non-misleading labeling, ~~but~~advertising and promotional materials. Class II devices are subject to the FDA’s ~~premarket~~General ~~notification~~Controls, and ~~clearance~~special ~~process~~controls inas ~~order~~deemed necessary by the FDA to beensure ~~commercially~~the ~~distributed~~safety and effectiveness of the device. These special controls can include performance standards, post-market surveillance, patient registries and FDA guidance documents.

While most Class I devices are exempt from the 510(k) premarket notification requirement, manufacturers of most Class II devices are required to submit to the FDA a premarket notification under Section 510(k) of the FDCA requesting permission to commercially distribute the device. The FDA’s permission to commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance. Devices deemed by the FDA to pose the greatest risks, such as life sustaining, life supporting or some implantable devices, or devices that have a new intended use, or use advanced technology that is not substantially equivalent to that of a legally marketed device, are placed in Class III, requiring approval of a PMA. Some pre-amendment devices are unclassified, but are subject to the FDA’s premarket notification and clearance process in order to be commercially distributed.

510(k) Clearance Marketing Pathway

The current QT Breast Scanner is a Class II device, and wethe ~~expect~~Company expects products under development such as the QT Infant Scanner and the QT Orthopedic Scanner will also be Class II devices subject to premarket notification and clearance under section 510(k) of the FDCA. To obtain 510(k) clearance, wethe Company must submit to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a predicate device already on the market. A predicate device is a legally marketed device that is not subject to premarket approval, i.e., a device that was legally marketed prior to May 28, 1976 (pre-amendments device), and for which a PMA is not required, a device that has been reclassified from Class III to Class II or I, or a device that was found substantially equivalent through the 510(k) process. The FDA’s 510(k) clearance process usually takes from three to twelve months, but often takes longer. The FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence. In addition, the FDA collects user fees for certain medical device submissions and annual fees and for medical device establishments. For fiscal year 2025, the small business user fee for a 510(k) premarket notification application is $9,280. If the FDA agrees that the device is substantially equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially market the device. If the FDA determines that the device is “not substantially equivalent” to a previously cleared device, the device is automatically designated as a Class III device. The device sponsor must then fulfill more rigorous PMA requirements, or can request a risk-based classification determination for the device in accordance with the “de novo” process, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.

After a device receives 510(k) marketing clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification in its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval or de novo reclassification. The FDA requires each manufacturer to determine whether the proposed change requires submission of a 510(k), a de novo request or a PMA in the first instance, but the FDA can review any such decision and disagree with a manufacturer’s determination. If the FDA disagrees with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until 510(k) marketing clearance or until PMA approval is obtained or a de novo request is granted. Also, in these circumstances, the manufacturer may be subject to significant regulatory fines or penalties.

Over the last several years, the FDA has proposed reforms to its 510(k) clearance process, and such proposals could include increased requirements for clinical data and a longer review period, or could make it more difficult for manufacturers to utilize the 510(k) clearance process for their products. For example, in November 2018, the FDA officials announced forthcoming steps that the FDA intends to take to modernize the premarket notification pathway under Section 510(k) of the FDCA. Among other things, the FDA announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates. These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k) clearance pathway, and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate devices that are more than 10 years old. In May 2019, the FDA solicited public feedback on these proposals. The FDA requested public feedback on whether it should consider certain actions that might require new authority, such as whether to sunset certain older devices that were used as predicates under the 510(k) clearance pathway. These proposals have not yet been finalized or adopted, and the FDA may work with Congress to implement such proposals through legislation.

More recently, in September 2019, the FDA finalized guidance describing an optional “safety and performance based” premarket review pathway for manufacturers of “certain, well-understood device types” to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety and performance criteria established by the FDA, thereby obviating the need for manufacturers to compare the safety and performance of their medical devices to specific predicate devices in the clearance process. The FDA intends to develop and maintain a list of device types appropriate for the “safety and performance based” pathway and will continue to develop product-specific guidance documents that identify the performance criteria for each such device type, as well as the testing methods recommended in the guidance documents, where feasible.28

PMA Approval Pathway

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Ifthat ~~any~~were ofused ~~our products are classified~~ as ~~Class~~predicates ~~III, they will be subject to a PMA approval process. At this time, we believe, but cannot be certain, that our devices will be approved~~ under ~~Class II, thus avoiding~~ the time consuming and expensive PMA approval pathway. Class III devices require PMA approval before they can be marketed, although some pre-amendment Class III devices for which the FDA has not yet required a PMA are cleared through the 510(k) ~~process.~~clearance ~~The PMA process is more demanding than the 510(k) premarket notification process~~pathway. InThese aproposals ~~PMA,~~have ~~the~~not ~~manufacturer~~yet ~~must~~been ~~demonstrate~~finalized ~~that~~or ~~the device is safe and effective~~adopted, and the PMA must be supported by extensive data, including data from preclinical studies and human clinical trials. The PMA must also contain a full description of the device and its components, a full description of the methods, facilities and controls used for manufacturing and proposed labeling. Following receipt of a PMA, the FDA determines whether the application is sufficiently complete to permit a substantive review. If the FDA accepts the application for review, it has 180 days under the FDCA to complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take up to several years. An advisory panel of experts from outside the FDA may bework ~~convened~~with toCongress ~~review and evaluate the application and provide recommendations~~ to ~~the~~implement ~~FDA~~such asproposals tothrough ~~the approvability of the device~~legislation. The FDA may or may not accept the panel’s recommendation. In addition, the FDA will generally conduct a pre-approval inspection of the applicant or its third-party manufacturers’ or suppliers’ manufacturing facility or facilities to ensure compliance with the QSR.

~~The~~More ~~FDA~~recently, ~~will~~in ~~approve~~September 2019, the ~~new~~FDA ~~device~~finalized ~~for~~guidance ~~commercial~~describing ~~distribution~~an ifoptional it“safety ~~determines that the data~~ and ~~information~~performance inbased” ~~the~~premarket ~~PMA~~review ~~constitute~~pathway ~~valid~~for ~~scientific~~manufacturers ~~evidence~~of ~~and~~“certain, ~~that~~well-understood ~~there is reasonable assurance that the~~ device istypes” ~~safe~~to ~~and~~demonstrate ~~effective~~substantial ~~for~~equivalence ~~its~~under ~~intended~~the ~~use~~510(sk). ~~The~~clearance ~~FDA~~pathway ~~may~~by ~~approve~~showing athat ~~PMA~~such ~~with~~device ~~post-approval~~meets ~~conditions~~objective ~~intended to ensure the~~ safety and ~~effectiveness~~performance ofcriteria established by the ~~device~~FDA, ~~including,~~thereby ~~among~~obviating ~~other~~the ~~things,~~need ~~restrictions~~for onmanufacturers ~~labeling,~~to ~~promotion,~~compare ~~sale~~the ~~and~~safety ~~distribution~~ and ~~collection~~performance of ~~long-term~~their ~~follow-up~~medical ~~data~~devices ~~from~~to ~~patients~~specific predicate devices in the ~~clinical~~clearance ~~study that supported PMA approval or requirements to conduct additional clinical studies post-approval~~process. The FDA ~~may~~intends ~~condition~~to ~~PMA~~develop ~~approval~~and onmaintain ~~some~~a ~~form~~list of ~~post-market~~device ~~surveillance~~types ~~when~~appropriate ~~deemed~~for ~~necessary to protect~~ the ~~public health or to provide additional~~ “safety and ~~efficacy~~performance ~~data~~based” ~~for~~pathway ~~the~~and ~~device~~will incontinue ato ~~larger~~develop ~~population~~product-specific orguidance ~~for~~documents athat ~~longer~~identify ~~period of use. In such cases,~~ the ~~manufacturer~~performance ~~might~~criteria ~~be required to follow certain patient groups~~ for aeach ~~number~~such ofdevice ~~years~~type, ~~and~~as towell ~~make~~as ~~periodic reports to~~ the ~~FDA~~testing onmethods ~~the~~recommended ~~clinical~~in ~~status of those patients. Failure to comply with~~ the ~~conditions~~guidance ~~of approval can result in material adverse enforcement action~~documents, ~~including~~where ~~withdrawal of the approval~~feasible.

Certain changes to an approved device, such as changes in manufacturing facilities, methods or quality control procedures, or changes in the design performance specifications, which affect the safety or effectiveness of the device, require submission of a PMA supplement. PMA supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered by the original PMA and may not require as extensive clinical data or the convening of an advisory panel. Certain other changes to an approved device require the submission of a new PMA, such as when the design change causes a different intended use, mode of operation, and technical basis of operation, or when the design change is so significant that a new generation of the device will be developed, and the data that were submitted with the original PMA are not applicable for the change in demonstrating a reasonable assurance of safety and effectiveness. We do not currently expect any of our products to be marketed pursuant to a PMA.

Clinical Trials

Clinical trials are almost always required to support a PMA and are sometimes required to support a 510(k) submission. All clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s investigational device exemption (“IDE”) regulations which govern investigational device labeling, prohibit promotion of the investigational device and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant risk” to human health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application to the FDA, which must become effective prior to commencing human clinical trials. If the device under evaluation does not present a significant risk to human health, then the device sponsor is not required to submit an IDE application to the FDA before initiating human clinical trials, but must still comply with abbreviated IDE requirements when conducting such trials. A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject. An IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound. The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies the Company that the investigation may not begin. If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit a clinical trial to proceed under a conditional approval.

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Regardless of the degree of risk presented by the medical device, clinical studies must be approved by, and conducted under the oversight of, an Institutional Review Board (“IRB”) for each clinical site. The IRB is responsible for the initial and continuing review of the IDE, and may pose additional requirements for the conduct of the study. If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a specific number of investigational sites with a specific number of patients, as approved by the FDA. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent and labeling and record-keeping requirements. Acceptance of an IDE application for review does not guarantee that the FDA will allow the IDE to become effective and, if it does become effective, the FDA may or may not determine that the data derived from the trials support the safety and effectiveness of the device or warrant the continuation of clinical trials. An IDE supplement must be submitted to, and approved by, the FDA before a sponsor or investigator may make a change to the investigational plan that may affect its scientific soundness, study plan or the rights, safety or welfare of human subjects.

During a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, trial monitoring, selecting clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them. The clinical investigators in the clinical study are also subject to FDA regulations and must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition of the investigational device and comply with all reporting and recordkeeping requirements. Additionally, after a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits.

Post-Market Regulation

After a device is cleared or approved for marketing, numerous and pervasive regulatory requirements continue to apply. These include:

•establishment registration and device listing with the FDA;

•QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process;

•labeling regulations and FDA prohibitions against the promotion of investigational products, or the promotion of “off-label” uses of cleared or approved products;

•requirements related to promotional activities;

•clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of certain modifications to PMA-approved devices;

•medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur;

•correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health;

•the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.

~~Our~~The Company’s manufacturing processes are required to comply with the applicable portions of the QSR, which cover the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation and servicing of finished devices intended for human use. The QSR also requires, among other things, maintenance of a device master file, device history file and complaint files. As a manufacturer, the Company will be subject to periodic scheduled or unscheduled inspections by the FDA. The Company’s failure to maintain compliance with the QSR requirements could result in the shut-down of, or restrictions on, the Company’s manufacturing operations and the recall or seizure of its products, which would have a material adverse effect on the Company’s business. The discovery of previously unknown problems with any of the Company’s products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.

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manufacturer, we will be subject to periodic scheduled or unscheduled inspections by the FDA. Our failure to maintain compliance with the QSR requirements could result in the shut-down of, or restrictions on, our manufacturing operations and the recall or seizure of our products, which would have a material adverse effect on our business. The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.

The FDA has broad regulatory compliance and enforcement powers. If the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions:

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•warning letters, untitled letters, fines, injunctions, consent decrees and civil penalties;

•recalls, withdrawals or administrative detention or seizure of our products;

•operating restrictions or partial suspension or total shutdown of production;

•withdrawing 510(k) clearances or PMA approvals that have already been granted;

•refusal to grant export approvals for our products; or

•criminal prosecution.

Healthcare Regulatory Laws

Within the U.S., ~~our~~the Company’s products and ~~our~~its customers will be subject to extensive regulation by a wide range of federal and state agencies that govern business practices in the medical device industry. These laws include federal and state anti-kickback, fraud and abuse, false claims, transparency and anti-corruption statutes and regulations. Internationally, other governments also impose regulations in connection with their healthcare reimbursement programs and the delivery of healthcare items and services.

U.S. federal healthcare fraud and abuse laws will generally apply to ~~our~~the Company’s activities, among other reasons because wethe ~~expect~~Company expects that ~~our~~its products will be covered under federal healthcare programs such as Medicare and Medicaid. The U.S. federal healthcare program Anti-Kickback Statute (the “Anti‑-Kickback Statute”) is particularly relevant because of its broad applicability. Specifically, the Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in exchange for, or to induce, either the referral of an individual, or the furnishing, arranging for or recommending a good or service for which payment may be made in whole or part under federal healthcare programs, such as the Medicare and Medicaid programs. Almost any financial interaction with a healthcare provider, patient or customer will implicate the Anti-Kickback Statute. Statutory exceptions and regulatory safe harbors protect certain interactions if specific requirements are met. However, only those interactions that represent fair market value exchanges generally are protected by a safe harbor or exception. The government can exercise enforcement discretion in taking action against unprotected activities. Further, a person or entity does not need to have actual knowledge of the Anti-Kickback Statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act or federal civil money penalties statute. Penalties for Anti-Kickback Statute violations may include both criminal penalties such as imprisonment and civil sanctions such as fines, imprisonment and possible exclusion from Medicare, Medicaid and other federal healthcare programs. Exclusion would mean that diagnostic tests using ~~our~~the Company’s products would no longer be eligible for reimbursement under federal healthcare programs.

Many states have adopted laws similar to the Anti-Kickback Statute. Some of these state prohibitions apply to referral of patients for healthcare items or services reimbursed by any payor, not only federal healthcare programs. Insurance companies may also bring a private cause of action for treble damages against a manufacturer for a pattern of causing false claims to be filed under the federal Racketeer Influenced and Corrupt Organizations Act.

Another development affecting the healthcare industry is the increased use of the federal Civil False Claims Act and, in particular, actions brought pursuant to the False Claims Act’s “whistleblower” or “qui tam” provisions. The False Claims Act imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a federal healthcare program. The qui tam provisions of the False Claims Act allow a private individual to bring actions on behalf of the federal government alleging that the defendant has submitted a false claim to the federal government, and to share in any monetary recovery. In recent years, the number of suits brought against healthcare providers by private individuals has increased dramatically. In addition, various states have enacted false claim laws analogous to the Civil False Claims Act, although many of these state laws apply where a claim is submitted to any third-party payor and not merely a federal healthcare program.

44The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), among other things, created two new federal crimes: healthcare fraud and false statements relating to healthcare matters. The HIPAA healthcare fraud statute prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private payors. A violation of this statute is a felony and may result in fines, imprisonment and/or exclusion from government-sponsored programs. The HIPAA false statements statute prohibits, among other things, knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation in connection with the delivery of or payment for healthcare benefits, items or

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~~submitted~~services. aA ~~false~~violation ~~claim~~of tothis ~~the~~statute ~~federal~~is ~~government,~~a felony and tomay ~~share~~result in ~~any~~fines ~~monetary~~and/or ~~recovery~~imprisonment. InSimilar ~~recent~~to ~~years,~~ the ~~number~~federal ofAnti-Kickback ~~suits brought against healthcare providers by private individuals has increased dramatically. In addition~~Statute, ~~various~~a ~~states~~person ~~have~~or ~~enacted~~entity ~~false~~does ~~claim~~not ~~laws~~need ~~analogous~~ to ~~the~~have ~~Civil~~actual ~~False~~knowledge ~~Claims Act, although many~~ of ~~these~~the ~~state~~statutes ~~laws~~or ~~apply~~specific ~~where~~intent ~~a claim is submitted~~ to ~~any~~violate ~~third-party~~them ~~payor~~in ~~and~~order ~~not~~to ~~merely~~have committed a ~~federal healthcare program~~violation.

~~The~~Laws ~~Health~~and ~~Insurance~~regulations ~~Portability~~have ~~and~~also ~~Accountability~~been ~~Act~~enacted ofby ~~1996~~the ~~(“HIPAA”),~~federal ~~among~~government ~~other~~and ~~things,~~various ~~created~~states ~~two~~to ~~new~~regulate ~~federal~~the ~~crimes:~~sales ~~healthcare~~and ~~fraud~~marketing ~~and~~practices ~~false~~of ~~statements~~medical ~~relating~~device toand ~~healthcare~~pharmaceutical ~~matters~~manufacturers. The ~~HIPAA~~laws ~~healthcare~~and ~~fraud~~regulations ~~statute~~generally ~~prohibits,~~limit ~~among~~financial ~~other~~interactions ~~things,~~between ~~knowingly~~manufacturers and ~~willfully~~healthcare ~~executing~~providers, orrequire ~~attempting~~pharmaceutical toand ~~execute,~~medical adevice ~~scheme~~companies to ~~defraud~~comply ~~any~~with ~~healthcare~~voluntary ~~benefit~~compliance ~~program,~~standards ~~including~~issued ~~private~~by ~~payors.~~industry Aassociations ~~violation~~and ofthe ~~this~~relevant ~~statute~~compliance isguidance apromulgated ~~felony~~by ~~and~~the ~~may~~U.S. ~~result~~federal ingovernment ~~fines, imprisonment~~ and/or ~~exclusion~~require ~~from~~disclosure ~~government-sponsored~~to ~~programs.~~the ~~The~~government ~~HIPAA~~and/or ~~false~~public ~~statements~~of ~~statute~~financial ~~prohibits,~~interactions ~~among~~(so-called ~~other~~“sunshine ~~things,~~laws”). ~~knowingly~~Many ~~and~~of ~~willfully~~these ~~falsifying,~~laws ~~concealing~~and orregulations ~~covering~~contain upambiguous arequirements ~~material fact~~ or ~~making~~require ~~any~~administrative ~~materially~~guidance ~~false,~~for ~~fictitious~~implementation. orManufacturers ~~fraudulent~~must ~~statement~~adopt orreasonable ~~representation~~interpretations inof ~~connection~~requirements ~~with~~if ~~the~~there ~~delivery~~is ofambiguity orand ~~payment~~those ~~for~~interpretations ~~healthcare~~could ~~benefits,~~be ~~items or services~~challenged. AGiven ~~violation~~the lack of ~~this~~clarity ~~statute is a felony and may result~~ in ~~fines~~laws and~~/or~~ ~~imprisonment.~~their ~~Similar~~implementation, to the ~~federal~~Company’s ~~Anti-Kickback~~activities ~~Statute,~~could abe ~~person~~subject ~~or entity does not need~~ to ~~have~~the ~~actual~~penalty ~~knowledge~~provisions of the ~~statutes~~pertinent orfederal ~~specific~~and ~~intent~~state tolaws ~~violate~~and ~~them in order to have committed a violation~~regulations.

Laws and regulations have also been enacted by the federal government and various states to regulate the sales and marketing practices of medical device and pharmaceutical manufacturers. The laws and regulations generally limit financial interactions between manufacturers and healthcare providers, require pharmaceutical and medical device companies to comply with voluntary compliance standards issued by industry associations and the relevant compliance guidance promulgated by the U.S. federal government and/or require disclosure to the government and/or public of financial interactions (so-called “sunshine laws”). Many of these laws and regulations contain ambiguous requirements or require administrative guidance for implementation. Manufacturers must adopt reasonable interpretations of requirements if there is ambiguity and those interpretations could be challenged. Given the lack of clarity in laws and their implementation, our activities could be subject to the penalty provisions of the pertinent federal and state laws and regulations.

Coverage and Reimbursement

Over the past few years, the growth rate of advanced imaging volumes has slowed in part due to additional patient-related cost-sharing programs and an increasing trend of third-party payors intensifying their utilization management efforts, for example, through benefit managers who require prior authorizations to control the growth rate of imaging services generally. We expect that these trends will continue.

By way of example, in the U.S., the Protecting Access to Medicare Act of 2014 required CMS, in conjunction with medical specialty societies, to adopt appropriate use criteria (“AUC”) for certain advanced diagnostic imaging services, including MRI, CT, nuclear medicine (including PET). Beginning in 2020, payment is made to the furnishing professional for an applicable advanced diagnostic imaging service only if the claim indicates that the ordering professional consulted a qualified clinical decision support mechanism, as identified by the Department of Health and Human Services (“HHS”), as to whether the ordered service adheres to the applicable AUC. Applicable settings include physician offices, hospital outpatient departments, including emergency departments, ambulatory surgical centers and independent diagnostic testing facilities. Advanced imaging services ordered by certain physicians identified as having outlier-ordering partners will be subject to prior authorization for applicable imaging services provided to Medicare beneficiaries. The outlier methodology used by CMS will be subject to future notice and comment rulemaking before the prior authorization component is implemented. We cannot predict the full impact of this project.

Third-party payors may impose limits on coverage or reimbursement for diagnostic imaging services, including denying reimbursement for tests that do not follow recommended diagnostic procedures or can only be billed using an unlisted or miscellaneous code. To the extent our customers will depend on third-party payors, unfavorable coding, coverage and reimbursement policies may constrict the profit margins of our provider customers, which may force us to lower our fees to attract and retain customers. If we are required to request new billing codes that more precisely identify and describe our imaging services, coverage is limited or reimbursement rates are inadequate, a healthcare provider might find it financially unattractive to own diagnostic imaging systems. It is possible that third-party payor coding, coverage and reimbursement policies will affect the need or prices for our products in the future, which could significantly affect our financial performance and our ability to conduct our business.

Healthcare Reform

In the U.S. and certain foreign jurisdictions, there have been, and wethe ~~expect~~Company expects there will continue to be, a number of legislative and regulatory changes to the healthcare system. In March 2010, the Patient Protection and Affordable Care Act, and the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) was signed into law and substantially changed the way healthcare is financed by both governmental and private insurers in the United States. The ACA contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement adjustments and fraud and abuse changes. Additionally, the ACA imposed, among other things, a new federal excise tax on the sale of certain medical devices, which, through a series of legislative amendments, was suspended, effective January 1, 2016, and subsequently repealed altogether on December 20, 2019, provided incentives to programs that increase the federal government’s comparative effectiveness research and implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models. Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and the Company expects there will be additional challenges and amendments to the ACA in the future.

45Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and the Company expects there will be additional challenges and amendments to the ACA in the future. By way of example, in 2017, Congress enacted the Tax Cuts and Jobs Act (the “TCJA”), which eliminated the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” On December 14, 2018, a Texas U.S. District Court Judge ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the TCJA, the remaining provisions of the ACA are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the 5th Circuit ruled that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. However, the decision of the U.S. Court of Appeals for the 5th Circuit was appealed to the U.S. Supreme Court. On June 17, 2021, the U.S. Supreme Court held that the states that initially commenced the challenge to the ACA didn’t have standing to challenge the law, effectively ending this challenge. But it remains possible that future challenges to the ACA may be brought, and it is unclear how any future decisions and other efforts to repeal and replace the ACA will impact the ACA.

~~Table~~Other legislative changes have been proposed and adopted in the United States since the ACA was enacted, including aggregate reductions of ~~Contents~~Medicare payments to providers of 2% per fiscal year and reduced payments to several types of Medicare providers. The Company believes the overall escalating cost of medical products and services being paid for by the government and private health insurance has led to, and will continue to lead to, increased pressures on the healthcare and medical device industry to reduce the costs of products and services.

and the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) was signed into law and substantially changed the way healthcare is financed by both governmental and private insurers in the United States. The ACA contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement adjustments and fraud and abuse changes. Additionally, the ACA imposed, among other things, a new federal excise tax on the sale of certain medical devices, which, through a series of legislative amendments, was suspended, effective January 1, 2016, and subsequently repealed altogether on December 20, 2019, provided incentives to programs that increase the federal government’s comparative effectiveness research and implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models. Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.

Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future. By way of example, in 2017, Congress enacted the Tax Cuts and Jobs Act (the “TCJA”), which eliminated the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” On December 14, 2018, a Texas U.S. District Court Judge ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the TCJA, the remaining provisions of the ACA are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the 5th Circuit ruled that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. However, the decision of the U.S. Court of Appeals for the 5th Circuit was appealed to the U.S. Supreme Court. On June 17, 2021, the U.S. Supreme Court held that the states that initially commenced the challenge to the ACA didn’t have standing to challenge the law, effectively ending this challenge. But it remains possible that future challenges to the ACA may be brought, and it is unclear how any future decisions and other efforts to repeal and replace the ACA will impact the ACA.

Other legislative changes have been proposed and adopted in the United States since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year and reduced payments to several types of Medicare providers. We believe the overall escalating cost of medical products and services being paid for by the government and private health insurance has led to, and will continue to lead to, increased pressures on the healthcare and medical device industry to reduce the costs of products and services.

Data Privacy and Security

Medical device companies may be subject to U.S. federal and state and foreign health information privacy, security and data breach notification laws, which may govern the collection, use, disclosure and protection of health-related and other personal information. In the U.S., HIPAA imposes privacy, security and breach reporting obligations with respect to individually identifiable health information upon “covered entities” (health plans, health care clearinghouses and certain health care providers), and their respective business associates, individuals or entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity. HIPAA and its respective implementing regulations, including the final omnibus rule published on January 25, 2013, imposes specified requirements relating to the privacy, security and transmission of individually identifiable health information. HIPAA mandates the reporting of certain breaches of health information to HHS, affected individuals and if the breach is large enough, the media. Entities that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information (“PHI”), a complaint about privacy practices or an audit by HHS, may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. The Health Information Technology and Clinical Health Act also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions.

Even when HIPAA does not apply, according to the Federal Trade Commission (the “FTC”), failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C § 45(a). The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards. The 31

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~~FTC’s~~specified ~~guidance~~requirements ~~for~~relating ~~appropriately~~to ~~securing~~the ~~consumers’~~privacy, ~~personal~~security and transmission of individually identifiable health information. isHIPAA ~~similar~~mandates the reporting of certain breaches of health information to ~~what~~HHS, affected individuals and if the breach is ~~required~~large enough, the media. Entities that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information (“PHI”), a complaint about privacy practices or an audit by HHS, may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. The Health Information Technology and Clinical Health Act also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA ~~Security~~laws ~~Rule~~and seek attorney’s fees and costs associated with pursuing federal civil actions.

InEven ~~addition,~~when ~~certain~~HIPAA ~~state~~does ~~and~~not ~~non-U.S. laws~~apply, ~~such~~according asto the ~~European~~Federal ~~Union’s~~Trade ~~General~~Commission ~~Data Protection Regulation~~ (~~2016/679)~~the (“~~GDPR~~FTC”), ~~govern~~failing ~~the~~to ~~privacy~~take ~~and~~appropriate ~~security~~steps ofto ~~health~~keep ~~information~~consumers’ inpersonal ~~certain~~information ~~circumstances,~~secure ~~some~~constitutes ofunfair ~~which~~acts ~~are~~or ~~more~~practices ~~stringent than HIPAA and many of which differ from each other~~ in ~~significant ways and may not have the same effect, thus complicating compliance efforts. Further, “business associates,” defined as independent contractors~~ or ~~agents~~affecting ofcommerce ~~covered entities that create, receive, maintain or transmit protected health information~~ in ~~connection~~violation ~~with~~of ~~providing~~Section 5(a) ~~service for or on behalf~~ of athe ~~covered~~Federal ~~entity,~~Trade ~~are~~Commission ~~also subject to certain HIPAA privacy and security standards. Failure to comply with these laws~~Act, ~~where~~15 ~~applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation~~U.S.C ~~For~~§ ~~example, California recently enacted legislation, the California Consumer Privacy Act~~ 45(~~“CCPA”~~a)~~, which went into effect January 1, 2020~~. The ~~CCPA,~~FTC ~~among~~expects ~~other~~a ~~things,~~company’s ~~creates new~~ data ~~privacy~~security ~~obligations~~measures ~~for~~to ~~covered~~be ~~companies~~reasonable and ~~provides~~appropriate ~~new~~in ~~privacy~~light ~~rights~~of ~~to California residents, including~~ the ~~right~~sensitivity toand ~~opt~~volume ~~out~~ of ~~certain~~consumer ~~disclosures of their~~ information. ~~The~~it ~~CCPA also creates a private right of action with statutory damages for certain data breaches~~holds, ~~thereby potentially increasing risks associated with a data breach. Although~~ the ~~law~~size ~~includes~~and ~~limited~~complexity ~~exceptions,~~of ~~including~~its ~~for PHI maintained by a covered entity or~~ business ~~associate~~, itand ~~may~~the ~~regulate~~cost ~~or impact our expected processing~~ of ~~personal~~available ~~information~~tools ~~depending~~to onimprove ~~the~~security ~~context. In Europe, the GDPR went into effect in May 2018~~ and ~~introduces~~reduce ~~strict~~vulnerabilities. ~~requirements~~Individually ~~for~~identifiable ~~processing~~health ~~the~~information ~~personal~~is ~~data~~considered ofsensitive ~~European Union~~ data ~~subjects. Companies~~ that ~~must~~merits ~~comply~~stronger ~~with~~safeguards. ~~the~~The ~~GDPR~~FTC’s ~~face~~guidance ~~increased~~for ~~compliance~~appropriately ~~obligations~~securing ~~and~~consumers’ ~~risk,~~personal ~~including~~information ~~more~~is ~~robust~~similar ~~regulatory enforcement of data protection requirements and potential fines for noncompliance of up~~ to ~~€20~~what ~~million or 4% of the annual global revenues of the noncompliant company, whichever~~ is ~~greater.~~required ~~The~~by ~~State of Israel has also implemented data protection laws and regulations, including~~ the ~~Israeli~~HIPAA ~~Protection~~Security ~~of Privacy Law of 1981~~Rule.

In addition, certain state and non-U.S. laws, such as the European Union’s General Data Protection Regulation (2016/679) (“GDPR”), govern the privacy and security of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. Further, “business associates,” defined as independent contractors or agents of covered entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity, are also subject to certain HIPAA privacy and security standards. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. For example, California recently enacted legislation, the California Consumer Privacy Act (“CCPA”), which went into effect January 1, 2020. The CCPA, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information. The CCPA also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. Although the law includes limited exceptions, including for PHI maintained by a covered entity or business associate, it may regulate or impact the Company’s expected processing of personal information depending on the context. In Europe, the GDPR went into effect in May 2018 and introduces strict requirements for processing the personal data of European Union data subjects. Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater. The State of Israel has also implemented data protection laws and regulations, including the Israeli Protection of Privacy Law of 1981.

Foreign Regulation

As wethe ~~plan~~Company plans to market and deploy the QT Breast Scanner and products under development broadly across the globe, wethe Company will be subject to regulations applicable to medical and radiation-emitting devices in the jurisdictions in which wethe ~~operate~~Company operates, which regulations vary among countries. While some countries’ regulations may not impose barriers to marketing and selling ~~our~~the Company’s products or only require certain notification, others may require that wethe ~~obtain~~Company obtains the clearance, registration or approval of a specified regulatory body. The process for obtaining such clearance, registration or approvals may involve additional testing and time. Furthermore, complying with foreign regulatory requirements can be expensive and time-consuming, and wethe Company will need to seek for regulatory clearances or approvals in each country in which wethe ~~plan~~Company plans to market ~~our~~the Company’s products. In addition, depending on the country, if wethe ~~modify~~Company ~~our~~modifies the Company’s products, wethe Company may need to apply for additional regulatory clearances or approvals before wethe ~~are~~Company is permitted to sell the modified product. Also, for maintaining ~~our~~the Company’s authorizations in a particular country, wethe Company will need to continue meeting quality and safety standards required in such country. The Company may seek additional regulatory approvals outside of the U.S. but as of the date of this registration statement/prospectus, wethe doCompany does not have sufficient information to determine when, if ever, the Company will receive regulatory approval from any other jurisdictions.

Following entry into the Gulf Medical Distribution Agreement, the Company has also begun the regulatory approval process with the Saudi FDA (“SFDA”), and is doing the same with the United Arab Emirates FDA (“MOHAP”), which

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has been given in March 2026. The Company also intends to do the same in the European Union in 2026 to obtain a CE Mark.

Finally, while regulatory clearance or approval by the FDA does not ensure registration, clearance or approval by regulatory authorities in other countries, registration or regulatory clearance or approval in one country, or denial thereof, may have effects on the regulatory process in others.

Intellectual Property, Patents & Trademarks

QT Imaging has multiple U.S., PCT, and European patents and 5patent applications and 4 registered U.S. trademarks. QT Imaging does not disclose its proprietary reconstruction algorithm technology. The details regarding this intellectual property is shown below.

The table below shows our utility patents and utility patent applications:

JURISDICTION

NUMBER

TITLE

DATEFILED

DATEGRANTED

EXPIRATIONDATE

OWNER

US8827 908B2

APPARATUS FOR ULTRASOUND IMAGING

6/30/2011

9/9/2014

6/29/2032

QT Imaging, Inc. and Esaote SpA

US9392 994B2

APPARATUS AND METHOD FOR ULTRASOUND IMAGING WITH CONTRAST AGENTS

4/5/2011

7/19/2016

11/19/2034

QT Imaging, Inc. and Esaote SpA

US7771 360B2

BREAST SCANNING SYSTEM

4/8/2004

8/10/2010

6/10/2029

QT ~~Ultrasound~~Imaging, ~~LLC~~Inc.

US8366 617B2

BREAST SCANNING SYSTEM

5/14/2008

2/5/2013

11/18/2031

QT Imaging, Inc.

US7699 783B2

METHOD FOR IMAGING AND TREATING A BREAST

6/15/2005

4/20/2010

1/23/2027

QT Imaging, Inc.

EP DE FR GB

EP1765 176B1

METHOD OF IMAGING AND APPARATUS FOR IMAGING AND TREATING A BREAST

6/16/2005

12/19/2012

6/16/2025

QT Imaging, Inc.

EP DE FR GB ES IT NL

EP2148 612B1

BREAST SCANNING SYSTEM

5/14/2008

1/6/2021

5/14/2028

QT Imaging, Inc.

US1076 5402B2

AUTOMATIC LATERALITY IDENTIFICATION FOR ULTRASOUND TOMOGRAPHY SYSTEMS

11/23/2016

9/8/2020

12/1/2038

QT Imaging, Inc.

US8246 543B2

IMAGING METHOD UTILIZING ATTENUATION AND SPEED PARAMETERS IN INVERSE SCATTERING TECHNIQUES

5/14/2008

8/21/2012

3/8/2031

QT Imaging, Inc.

EP3843 627A4

APPLICATION OF MACHINE LEARNING TO ITERATIVE AND MULTIMODALITY IMAGE RECONSTRUCTION

8/30/2019

PENDING

QT Imaging, Inc.

US1117 0544B2

APPLICATION OF MACHINE LEARNING TO ITERATIVE AND MULTIMODALITY IMAGE RECONSTRUCTION

8/30/2019

11/9/2021

8/30/2039

QT Imaging, Inc.

US1043 3818B2

COLOR CODING AN IMAGE FOR IDENTIFYING ANATOMY USING QUANTITATIVE TRANSMISSION ULTRASOUND TOMOGRAPHY

12/8/2017

10/8/2019

6/12/2038

QT Imaging, Inc.

18/888,547

MEDICAL IMAGING TECHNIQUES INCLUDING ADAPTIVERECONSTRUCTION

9/18/2024

PENDING

QT Imaging, Inc.

PCT

US2025/47006

MEDICAL IMAGING TECHNIQUES INCLUDING ADAPTIVERECONSTRUCTION

9/18/2025

PENDING

QT Imaging, Inc.

18/955,499

EVALUATION OF TOPOLOGICAL COMPLEXITY AND GENERATION OFQUANTITATIVE MARKERS IN MEDICAL IMAGES

11/21/2024

PENDING

QT Imaging, Inc.

PCT

US2025/56419

EVALUATION OF TOPOLOGICAL COMPLEXITY AND GENERATION OFQUANTITATIVE MARKERS IN MEDICAL IMAGES

11/20/2025

PENDING

QT Imaging, Inc.

4733

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JURISDICTION

NUMBER

TITLE

DATEFILED

DATEGRANTED

EXPIRATIONDATE

OWNER

~~US8366 617B2~~19/051,161

~~BREAST~~TILTED ~~SCANNING~~TRANSMITTER ~~SYSTEM~~WITH ADDITIONAL K-SPACE COVERAGE

52/1411/~~2008~~2025

~~2/5/2013~~PENDING

~~11/18/2031~~

QT ~~Ultrasound LLC~~Imaging, ~~CVUS Clinical Trials LLC~~Inc.

US7699 783B2

METHOD FOR IMAGING AND TREATING A BREAST

6/15/2005

4/20/2010

1/23/2027

QT Ultrasound LLC

PCT

US2026/14963

IMAGING SYSTEMS HAVING A REFLECTIONS ARRAY WITH VARIABLE POTITION AND DIMENSION

2/11/2026

PENDING

QT Imaging, Inc.

EP DE FR GB

EP1765 176B1

METHOD OF IMAGING AND APPARATUS FOR IMAGING AND TREATING A BREAST

6/16/2005

12/19/2012

6/16/2025

Biotex Pharma Investments LLC

PCT

US2026/14962

ADAPTABLE C-SHAPED SCAN HEAD WITH MEMBRANE-DEFINED VARIABLE APERTURE

2/11/2026

PENDING

QT Imaging, Inc.

EP DE FR GB ES IT NL

EP2148 612B1

BREAST SCANNING SYSTEM

5/14/2008

1/6/2021

5/14/2028

QT Ultrasound LLC

PCT

US2026/14961

IMAGING APPARATUS AND METHODS USING A MEMBRANE-DEFINED VARIABLE APERTURE WITH PARTIAL AND SYNTHETIC ROTATION

2/11/2026

PENDING

QT Imaging, Inc.

EP DE FR GB

EP1610 687B1

BREAST SCANNING SYSTEM

4/9/2004

1/23/2019

4/9/2024

QT Ultrasound LLC

US1076 5402B2

AUTOMATIC LATERALITY IDENTIFICATION FOR ULTRASOUND TOMOGRAPHY SYSTEMS

11/23/2016

9/8/2020

12/1/2038

QT Ultrasound LLC

US8246 543B2

IMAGING METHOD UTILIZING ATTENUATION AND SPEED PARAMETERS IN INVERSE SCATTERING TECHNIQUES

5/14/2008

8/21/2012

3/8/2031

QT Ultrasound LLC, CVUS Clinical Trials LLC

EP3843 627A4

APPLICATION OF MACHINE LEARNING TO ITERATIVE AND MULTIMODALITY IMAGE RECONSTRUCTION

8/30/2019

PENDING

QT Imaging, Inc.

US1117 0544B2

APPLICATION OF MACHINE LEARNING TO ITERATIVE AND MULTIMODALITY IMAGE RECONSTRUCTION

8/30/2019

11/9/2021

8/30/2039

QT Imaging, Inc.

US1043 3818B2

COLOR CODING AN IMAGE FOR IDENTIFYING ANATOMY USING QUANTITATIVE TRANSMISSION ULTRASOUND TOMOGRAPHY

12/8/2017

10/8/2019

6/12/2038

QT Ultrasound LLC

18/888,547

MEDICAL IMAGING TECHNIQUES INCLUDING ADAPTIVERECONSTRUCTION

9/18/2024

PENDING

QT Imaging, Inc.

18/955,499

EVALUATION OF TOPOLOGICAL COMPLEXITY AND GENERATION OFQUANTITATIVE MARKERS IN MEDICAL IMAGES

11/21/2024

PENDING

QT Imaging, Inc.

The table below shows our registered U.S. trademarks and trademark applications.

TRADEMARKS

SERIAL NO

REGISTRATION

FILING DATE

Published forOpposition

Registration date

QT ULTRASOUND

86295291

4729168

5/29/2014

10/21/2014

4/28/2015

QT Imaging, Inc.

QTVIEWER

5586707

87067439

6/10/2016

5/16/2017

10/16/2018

QT Imaging, Inc.

QTSCAN

87129339

5851942

8/5/2016

5/23/~~5017~~2017

9/3/2019

QT Imaging, Inc.

QTBREASTHEALTH

88059928

5991966

7/31/2018

9/24/2019

2/18/2020

QT Imaging, Inc.

VOLOGRAPHY

90329042

7183396

11/19/2020

6/8/2021

10/3/2023

QT Imaging, Inc.

QT IMAGING

98800489

In the publication period

10/14/2024

QT Imaging, Inc.

Breast Acoustic CT

98414186

In the publication period

2/21/2024

QT Imaging, Inc.

Breast ACT

98414157

In the publication period

2/21/2024

QT Imaging, Inc.

Breast Acoustic Computed Tomography

98414202

In the publication period

2/21/2024

QT Imaging, Inc.

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The Company is monitoring research laboratories, commercial companies or universities developing ultra-low frequency transmitted sound imaging using inverse scattering image reconstruction. Therefore, the Company believes that its patent and proprietary position is currently substantial and a very valuable asset.

Employees

As of December 31, ~~2024~~2025, QTthe ~~Imaging~~Company had 2132 employees~~. Of these~~, 20of ~~are~~which ~~full-time~~25 ~~employees, 16~~ work in research, development, manufacturing, regulatory and operations, and 57 work in general and administrative capacities. 12In addition, 31 are full-time employees and 27 employees are located in Novato, CA. None of QT Imaging’s employees are represented by a labor union or are subject to a collective bargaining agreement.

Corporate and Available Information

Our corporate headquarters are located in Novato, California pursuant to a lease agreement that will expire on May 31, 2027. We believe that these facilities will be adequate for our near-term needs. If required, we believe that suitable additional or alternative space would be available in the future on commercially reasonable terms.

Our corporate website address is www.qtimaging.com. Information contained on our website is not a part of or incorporated by reference into this annual report or any other document we file with the SEC, and the inclusion of our website address in this annual report is inactive textual reference only.

Item 1A: Risk Factors

An investment in our common stock involves a high degree of risk. In addition to the other information contained in this annual report, including the matters addressed under the heading “Cautionary Statement Regarding Forward-Looking Statements” and “Summary of Risk Factors,” together with all of the other information contained in this annual report, including our consolidated financial statements and the related notes thereto and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our other public filings, in evaluating our business. The risk factors described below are not intended to be exhaustive and are not the only risks facing us. Additional risks not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, results of operations and cash flows in future periods or are not identified because they are generally common to businesses. The occurrence of one of more of the events or circumstances described in these risk factors, along or in combination with other events or circumstances, could harm our business, financial condition, results of operations, and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. The following discussion should be read in conjunction with the respective consolidated financial statements of the Company, and the notes to the consolidated financial statements included therein.

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of operations, and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. The following discussion should be read in conjunction with the respective consolidated financial statements of the Company, and the notes to the consolidated financial statements included therein.

Risks Related to Our Business, Financial Condition, and Need for Additional Capital

We are a development-stage company with limited operating history and significant losses since inception which may make it difficult to evaluate prospects for our future viability and predict our future performance. We may never be able to effectuate our business plan or achieve any meaningful revenue or reach profitability.

We have a limited operating history and only a preliminary and unproven business plan upon which investors may evaluate our prospects. We have ~~not yet~~ demonstrated the commercial viability ~~at scale~~ of our breast imaging ~~technology~~ platform. ~~The QT Breast Scanner is deployed~~ at ~~facilities~~scales inof ~~the~~tens ~~United~~of ~~States~~scanners ~~and abroad,~~ but ~~we have~~ not yet demonstrated ~~scale~~the ~~of deployment and manufacturing necessary to achieve~~ commercial viability ~~despite~~on ~~having~~larger ~~clearance~~scales. ~~from~~The ~~the~~QT ~~FDA~~Breast ~~for~~Scanner ~~breast~~is ~~imaging~~deployed ~~with~~at facilities in the QTUnited ~~Breast~~States ~~Scanner~~and abroad. Even if we are able to do so, we may not be able to manufacture the QT Breast Scanner device at the costs needed to support our business model. Even if we are able to commercialize some of our products or product candidates, there can be no assurance that we will generate significant revenues or ever achieve profitability. We expect to continue to incur significant sales and marketing, research and development, regulatory and other expenses as we expand our marketing efforts to increase adoption of our products, expand existing relationships, obtain regulatory approvals for our product candidates, conduct clinical studies on our existing and planned product candidates and develop new product candidates or add new features to our existing products. There is no assurance that our distribution partners will succeed in selling and servicing devices in sufficient volumes to help the company meet its business plan, revenue objectives or profitability.

Furthermore, even if our technology and product become commercially viable and deployed at scale, we may not generate sufficient revenue necessary to support our business. We may never successfully stimulate market interest in our QT Breast Scanner in the near-to-mid-term at any level or at all, which may cause our business to fail. The medical imaging industry is also highly competitive, and our technology, products, services or business models may not achieve widespread market acceptance. If we are unable to address any issues mentioned above, or encounter other problems, expenses, difficulties, complications, and delays in connection with the starting and expansion of our business, our entire business may fail, in which case you may lose your entire investment.

49We have a history of net losses and negative cash flow from operations since inception and we expect such losses and negative cash flows from operations to continue in the foreseeable future. As of December 31, 2025 and 2024, we had an accumulated deficit of approximately $53.0 million and $31.9 million, respectively. For the years ended December 31, 2025 and 2024, we incurred net losses attributable to the Company of approximately $21.1 million and $9.0 million, respectively. For the years ended December 31, 2025 and 2024, we used cash in operations of $9.0 million and $10.0 million, respectively. We anticipate our losses will continue to increase from current levels because we expect to incur additional costs related to developing our business, including research and development costs, manufacturing costs, employee-related costs, costs of complying with government regulations, intellectual property development and prosecution costs, marketing and promotion costs, capital expenditures, general and administrative expenses, and costs associated with operating as a public company.

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imaging industry is also highly competitive, and our technology, products, services or business models may not achieve widespread market acceptance. If we are unable to address any issues mentioned above, or encounter other problems, expenses, difficulties, complications, and delays in connection with the starting and expansion of our business, our entire business may fail, in which case you may lose your entire investment.

We have a history of net losses and negative cash flow from operations since inception and we expect such losses and negative cash flows from operations to continue in the foreseeable future. As of December 31, 2024 and 2023, we had working capital deficit of $4.9 million and $2.5 million, respectively, and an accumulated deficit of approximately $31.9 million and $17.8 million, respectively. For the years ended December 31, 2024 and 2023, we incurred net losses attributable to the Company of approximately $9.0 million and $6.1 million, respectively. For the years ended December 31, 2024 and 2023, we used cash in operations of $10.0 million and $2.7 million, respectively. We anticipate our losses will continue to increase from current levels because we expect to incur additional costs related to developing our business, including research and development costs, manufacturing costs, employee-related costs, costs of complying with government regulations, intellectual property development and prosecution costs, marketing and promotion costs, capital expenditures, general and administrative expenses, and costs associated with operating as a public company.

Our ability to generate revenue from our operations and ultimately achieve profitability will depend on factors including but not limited to whether we can complete the development and commercialization of our QT Breast Scanner breast imaging technology and our future products, whether we can manufacture the QT Breast Scanner and future products on a commercial scale in such amounts and at such costs as we anticipate, and whether we can achieve market acceptance of our products, services and business models. The net losses that we incur may fluctuate significantly from period to period. As a result of these increased expenditures, we will need to generate significant additional revenue in order to offset our operating expenses and achieve and sustain profitability. Accordingly, we may not achieve or maintain profitability, and we may continue to incur significant losses in the future. Even if we achieve profitability, we cannot be sure that we will remain profitable for any substantial period of time. If we do not achieve or sustain profitability, it will be more difficult for us to finance our business and accomplish our strategic objectives, either of which would have a material adverse effect on our business, financial condition, results of operations and prospects and may cause the market price of the common stock to decline.

We may not be able to successfully execute our business model.

We are a company with limited operating history and we may not have the necessary resources, expertise and experience to successfully execute our business model on a global scale, such as obtaining the necessary approvals or clearances from the regulatory agencies of our target markets. Our ability to execute our model is dependent on a number of factors, including the ability of our senior management team to execute our model, our ability to incentivize, train and support international distribution partners in different geographic regions, our ability to begin or maintain our pace of product development, manufacturing and commercialization, our ability to meet the changing needs of the medical imaging market, and the ability of our employees to perform at a high-level. If we are unable to execute our model, or if our model does not drive the growth that we anticipate, or if our market opportunity is not as large as we have estimated, it could adversely affect our business and our prospects.

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manufacturing and commercialization, our ability to meet the changing needs of the medical imaging market, and the ability of our employees to perform at a high-level. If we are unable to execute our model, or if our model does not drive the growth that we anticipate, or if our market opportunity is not as large as we have estimated, it could adversely affect our business and our prospects.

We have a limited operating history. If we successfully commercially launch the QT Breast Scanner, products under development that are cleared by the FDA and other regulatory agencies, and they do not achieve widespread market acceptance, we will not be able to generate the revenue necessary to support our business.

We have a limited operating history ~~and~~of ~~have~~two noyears ~~history~~as ofa ~~successfully~~public ~~marketing~~company, and limited market adoption our breast-imaging technology, the QT Breast Scanner or any other product using our 3D transmission ultrasound technology. We may fail to generate significant interest in the QT Breast Scanner, or other imaging products using our technology. These and other factors, including the following, may affect the rate and level of market acceptance:

•effectiveness of the sales and marketing efforts of us, and our distribution partners;

•perception by medical professionals and patients of the convenience, safety, efficiency and benefits of the QT Breast Scanner or products under development using our technology, compared to competing methods of medical imaging;

•opposition from certain industry leaders, which may limit our ability to promote the QT Breast Scanner or products under development that are cleared by the FDA and other regulatory agencies, and to penetrate into the medical imaging market in the U.S. or other geographical areas;

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•the level of commitment and support that we receive from our partners, such as cloud storage providers, as well as medical professionals such as radiologists;

•coverage determinations and reimbursement levels of third-party payors;

•the changing and volatile U.S. and global economic environments~~, including as a result of the COVID-19 pandemic~~;

•timing of market introduction of competing products, and the sales and marketing initiatives of such products;

•press and blog coverage, social media coverage, and other publicity and public relations factors by others; and

•lack of financing or other resources to successfully develop and commercialize our technology and implement our business plan.

If cleared or approved for marketing by the FDA or other regulatory agencies, depending on the approved clinical indication, the QT Breast Scanner and products under development will be competing with existing and future imaging products and similar offerings. The technology underlying the QT Breast Scanner may be perceived as inferior or inaccurate and patients may be unwilling to undergo medical screening using the QT Breast Scanner or other products under development using our technology. Moreover, patients and medical professionals may be unwilling to depart from the current medical imaging technology. Medical professionals tend to be slow to change their medical diagnostic practices because of perceived liability risks arising from the use of new technology or products, and they may not recommend medical imaging using the QT Breast Scanner or other products under development using our technology until there is long-term clinical evidence to convince them to alter or modify their existing imaging methods. Our efforts to educate patients, radiologists and other members of the medical community on the benefits of our products require significant resources and may not be successful. Our efforts to educate the marketplace may require more resources than are required by conventional technologies marketed by our competitors. In the event that the QT Breast Scanner or other products under development using our technology are the subject of guidelines, clinical studies or scientific publications that are unfavorable or damaging, or otherwise call into question their benefits, we may have difficulty in convincing market participants to adopt our products. In addition, ~~medical professionals, patients, providers of medical imaging services and third-party~~ payors may not adopt or reimburse the use of the QT Breast Scanner or products under development in the near term or at all. Among other things, we need radiologists or other medical professionals to be trained to read the images that the QT Breast Scanner generates, and there are a limited number of such professionals currently trained and even fewer who are capable of providing such training. If we are unable to have a sufficient number of trained readers, then clinics will be less likely to purchase QT Breast Scanners as they will have difficulty using them to provide services to patients.

If we are unable to achieve or maintain an adequate level of market acceptance, we may not generate significant revenue or become profitable and our business, financial condition, results of operations and prospects would be significantly harmed.

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The success of our business model is subject to numerous risks and uncertainties.

We expect sales to hospitals, academic medical centers, cancer centers, and imaging centers to be our primary end customers. We may not be successful in achieving these goals for various reasons, including:

•the process of manufacturing and deploying the QT Breast Scanner and our products under development is a complex, multi-step process that depends on factors outside our control, and could cause us to expend significant time and resources prior to earning associated revenues;

•the manufacturing cost of the QT Breast Scanner and our products under development may be higher than we expect, may increase significantly, or may increase at a higher rate than anticipated;

•the manufacturing of the QT Breast Scanner and our future products may take longer than we expected, and we may have insufficient manufacturing capacity and experience delays in manufacturing and deployment, which would have a negative impact on the timing of our revenues;

•deployment and full utilization of the QT Breast Scanner may not be achieved if insurance and other reimbursements and patient co-pays are not sufficient to defray costs incurred in providing and interpreting scans by hospital imaging centers, cancer centers or other women’s health-care centers that purchase our devices and services, and we may not be able to sustain these relationships unless our devices can be profitable to these providers;

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•a QT Breast Scanner device may perform fewer scans per day than our estimates due to a number of factors, including low market acceptance rate, technical failures and downtime, service disruptions, outages or other performance problems, which would have a negative impact on our revenues and our ability to recover costs; and

•our customers may not be able to find or retain a sufficient number of radiologists to review the images generated by the QT Breast Scanner device especially as we deploy additional systems and the volume of scans increases. There are currently a limited number of such radiologist professionals currently trained and even fewer who are capable of providing such training. If we are unable to have a sufficient number of trained readers, then clinics will be less likely to purchase QT Breast Scanners as they will have difficulty using them to provide services to patients.

Any of the above factors may negatively affect the successful commercialization and implementation of our business model, causing our business to fail.

The proceeds received in the Business Combination and since then, in the November 2024 private placement issuance of stock (the “Private Placement”) and the February 2025 note financing, will only fund operations for a limited time and we will need to obtain additional financing to continue operations and execute our business plans. If we are unable to obtain such financing, we may be unable to complete the development and commercialization of our technology and our products and services.

Our operations have consumed substantial amounts of cash since inception. Our net losses attributable to the Company were $8,984,880 and $6,098,951 for the years ended December 31, 2024 and 2023, respectively. In addition, significant resources were invested in the development of our QT Breast Scanner breast imaging technology prior to the June 2012 acquisition of the assets of TechniScan, a currently inactive medical device company based in Utah. Following the purchase of the TechniScan assets, QT Ultrasound completed the clinical trials needed to obtain FDA clearance. Approximately $39 million was invested in TechniScan (including $15.2 million in grants from the U.S. National Institutes of Health). Approximately $87 million has been invested in the Company and its predecessors since 2012 to fund asset acquisitions, product development, clinical trials, and FDA clearances. In November 2024, we raised $1 million in new cash proceeds in the Private Placement to fund continuing operations. On February 26, 2025, the Company borrowed $10.1 million from Lynrock Lake Master Fund LP (“Lynrock Lake”), of which $4.6 million was used to repay long-term debt and the remaining $5.5 million will be used for working capital needs.

We anticipate that our future cash requirements will continue to be significant and we will need to obtain additional financing beyond that provided by the Business Combination, the Private Placement and the loan from Lynrock Lake to implement our business plan as described in this annual report as these amounts will only fund operations for a limited time. Specifically, we may need to raise additional funds to complete the manufacture, shipping, installation and deployment of the QT Breast Scanner breast imaging product, as well as to support the continued research and development of this product and the development of other imaging products and product candidates for infant and orthopedic imaging applications, and to build contingencies for unforeseen events. Such financings could include equity financing, which may be dilutive to stockholders, or debt financing, which would likely restrict our ability to borrow from other sources. In addition, such securities may contain rights, preferences or privileges senior to those of the rights of the stockholders of the Company. Additional funds may not be available when we need them, on terms attractive to us, or at all.

If adequate funds are not available on a timely basis, we may be required to curtail the development of our technology, products or services, or materially delay, curtail, reduce or terminate our research and development and commercialization activities. We could be forced to sell or dispose of our rights or assets. Any inability to raise adequate funds on commercially reasonable terms could have a material adverse effect on our business, financial condition, results of operation and prospects, including the possibility that a lack of funds could cause our business to fail and liquidate with little or no return to investors.

We may need to raise additional capital, which may not be available on favorable terms, if at all, and which may cause dilution to stockholders, restrict our operations or adversely affect our ability to operate our business.

Our ability to raise additional capital may be significantly affected by general market conditions, the market price of our common stock, our financial condition, uncertainty about the future commercial success of our products, regulatory developments, the status and scope of our intellectual property, any ongoing arbitration or litigation, our compliance with applicable laws and regulations and other factors, many of which are outside our control. We cannot be certain that we will be able to obtain additional financing on favorable terms or at all. If we are unable to obtain needed financing on acceptable terms, or otherwise, we may not be able to implement our business plan, which could have a material adverse effect on our business, financial condition and results of operations, including a decline in the trading price of our common stock. Any additional equity financings could result in additional dilution to our then existing stockholders. In addition, we may enter into additional financings that restrict our operations or adversely affect our ability to operate our business and, if we issue equity, debt or other securities to raise additional capital or restructure or refinance our existing indebtedness, the new equity, debt or other securities may have rights, preferences and privileges senior to those of our existing stockholders.

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business, financial condition and results of operations, including a decline in the trading price of our common stock. Any additional equity financings could result in additional dilution to our then existing stockholders. In addition, we may enter into additional financings that restrict our operations or adversely affect our ability to operate our business and, if we issue equity, debt or other securities to raise additional capital or restructure or refinance our existing indebtedness, the new equity, debt or other securities may have rights, preferences and privileges senior to those of our existing stockholders.

Our ability to generate the amount of cash needed to pay interest and principal on any indebtedness and our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors beyond our control.

Our ability to make scheduled payments on, or to refinance our obligations under, any indebtedness depends on our financial and operating performance and prevailing economic and competitive conditions. Certain of these financial and business factors, many of which may be beyond our control, are described above.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, raise additional equity capital, or restructure our debt. However, there is no assurance that such alternative measures may be successful or permitted under the agreements governing our indebtedness and, as a result, we may not be able to meet our scheduled debt service obligations. Even if successful, actions taken to improve short-term liquidity to meet our debt service and other obligations could harm our long-term business prospects, financial condition, and results of operations.

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We cannot guarantee that we will be able to refinance our indebtedness or obtain additional financing on satisfactory terms or at all, including due to existing guarantees on our assets or our level of indebtedness and the debt incurrence restrictions imposed by the agreements governing our indebtedness. Further, the cost and availability of credit are subject to changes in the economic and business environment. If conditions in major credit markets deteriorate, our ability to refinance our indebtedness or obtain additional financing on satisfactory terms, or at all, may be negatively affected.

Our debt agreements contain restrictions that may limit our flexibility in operating our business.

The loan agreement with Lynrock Lake Master Fund LP (“Lynrock Lake”) and related documents contain, and instruments governing any future indebtedness of ours would likely contain, a number of covenants that will impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things:

•create liens on certain assets;

•incur additional debt;

•consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and

•sell certain assets.

~~Our~~Any ~~loan~~of ~~agreement~~these ~~with~~restrictions ~~Lynrock~~could ~~Lake~~limit ~~also~~our ~~contains~~ability ~~two~~to ~~financial~~plan ~~covenants~~for or react to market conditions and could otherwise restrict corporate activities. ~~These~~Any ~~financial~~failure to comply with these covenants ~~are~~could ~~(i)~~result in a ~~minimum~~default ~~qualified~~under ~~cash~~our ~~covenant~~secured credit facility or instruments governing any future indebtedness of ~~$500~~ours. Additionally,~~000,~~ ~~and~~our ~~(ii)~~credit facility is secured by substantially all of our assets. Upon a ~~minimum~~default, ~~shipments~~unless ~~and~~waived, ~~associated~~the ~~revenue~~lenders ~~and~~under ~~accounts~~our ~~receivable~~secured ~~covenant~~credit ~~for~~facility ~~each~~could ~~quarter~~elect ~~with~~to ~~amounts~~terminate oftheir atcommitments, ~~least~~cease ~~80%~~making offurther ~~the~~loans, ~~forecasted~~foreclose ~~amount~~on inour ~~the~~assets ~~Company’s~~pledged ~~previously~~to ~~announced~~such ~~distribution~~lenders to secure our obligations under our credit agreement and force us into bankruptcy or liquidation. ~~The~~In ~~Company~~addition, isa ~~also~~default ~~required~~under ~~within~~our ~~twelve~~secured ~~(12)~~credit ~~months~~facility could trigger a cross default under agreements governing any future indebtedness. Our results of ~~the~~operations ~~entry~~may ~~into~~not ~~the~~be ~~Credit~~sufficient ~~Agreement~~to ~~(unless~~service ~~such~~our ~~time~~indebtedness ~~period~~and isto ~~extended~~fund byour other expenditures, and we may not be able to obtain financing to meet these requirements. In February 2026, we obtained waivers from Lynrock Lake in ~~its~~connection ~~reasonable~~with ~~discretion)~~non-compliance to ~~create,~~certain orof ~~cause~~our debt covenants related to beinformation ~~created,~~reporting during the first three quarters of 2025. If we experience a ~~holding~~default ~~company~~under ~~structure~~our ~~reasonably~~secured ~~satisfactory~~credit tofacility ~~Lynrock~~or ~~Lake~~instruments governing our future indebtedness, our business, financial condition, and results of operations may be adversely impacted.

Any of these restrictions could limit our ability to plan for or react to market conditions and could otherwise restrict corporate activities. Any failure to comply with these covenants could result in a default under our secured credit facility or instruments governing any future indebtedness of ours. Additionally, our obligations to Lynrock Lake are secured by substantially all of our assets. Upon a default, unless waived, Lynrock Lake could elect to foreclose on our assets pledged to it to secure our obligations under our credit agreement and force us into bankruptcy or liquidation. In addition, a default under our secured loan could trigger a cross default under agreements governing any future indebtedness. Our results of operations may not be sufficient to service our indebtedness and to fund our other expenditures, and we may not be able to obtain financing to meet these requirements. If we experience a default under our loan agreement with Lynrock Lake or instruments governing our future indebtedness, our business, financial condition, and results of operations may be adversely impacted.

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We are highly dependent on the successful development, marketing and sale of our breast imaging device and on other products and product candidates which are still in the development stage.

Our breast imaging technology is the basis of our business. The QT Breast Scanner is currently deployed in a limited number of cancer and other health centers, and is undergoing field testing and broad acceptance is uncertain. As a result, the success of our business plan is highly dependent on acceptance of our products, and on our ability to develop, manufacture and commercialize the technology and related products and services and our failure to do so could cause our business to fail. As part of our effort to build the sales and marketing capabilities of the Company, on May 31, 2023, QTthe ~~Imaging~~Company entered into the NXC Sales Agent Agreement, pursuant to which QTthe ~~Imaging~~Company appointed NXC as the non-exclusive agent for the sale of the QTCompany ~~Breast~~products ~~Scanner~~and services in non-exclusive territories: the U.S., U.S. territories, and U.S. Department of Defense installations. Subsequently, effective June 10, 2024, we replaced the NXC Sales Agent Agreement with the NXC Distribution Agreement, and since then, on December 11, 2024, we and NXC entered into the Amended NXC Distribution Agreement, which we further amended on March 28, 2025. Under the terms of the Amended NXC Distribution Agreement, NXC shall provide tous QTwith ~~Imaging~~ a ~~Forecast~~forecast of the anticipated purchases of QT Breast Scanners during the subsequent twelve month period. The Amended NXC Distribution Agreement further provides that the ~~Forecast~~forecast for ~~2025 and~~ 2026 shall be no less than the MOQs set forth in an exhibit to the Amended NXC Distribution Agreement, by quarter and by year. Furthermore, all purchase orders from NXC shall be for no less than the MOQs, which NXC must order on the quarterly and annual basis as set forth in an exhibit to the Amended NXC Distribution Agreement.

Successful commercialization of medical imaging devices is a complex and uncertain process, dependent on the efforts of management, manufacturers, local operators, integrators, medical professionals, third-party payors, as well as general economic conditions, among other factors. Any factor that adversely impacts the development and commercialization of our imaging technology or related products and services, including the QT Breast Scanner, will have a negative impact on our business, financial condition, results of operations and prospects. Some potential factors that could adversely impact the development and commercialization of our imaging technology or related products and services include:

•our inability to achieve sufficient market acceptance by hospitals and clinics, providers of medical imaging services, medical professionals such as radiologists, third-party payors, and others in the medical community;

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•our inability to compete with existing medical imaging technology companies with ultrasound, mammography and MRI systems, who have well entrenched market-share worldwide and significantly more resources than we do;

•our inability to hire, train and retain qualified sales and marketing personnel;

•our inability to establish, maintain and expand our sales, marketing and distribution networks;

•our inability to obtain and/or maintain necessary regulatory approvals; and

•our inability to effectively protect our intellectual property.

Our inability to successfully obtain additional clearances or approval from the FDA and other regulatory agencies worldwide, and commercialize the QT Breast Scanner and related products and services, and/or successfully develop, secure clearances and approvals, and commercialize additional products or any enhancements to the products which we may develop would have a material adverse effect on our business, financial condition, results of operations and prospects.

Products utilizing our technology may need to be approved or cleared by the FDA and similar regulatory agencies worldwide. We may not receive additional clearances and approvals from the FDA for the QT Breast Scanner, or may be delayed in receiving the necessary approval or clearance for our future products, which would adversely affect business, financial condition, results of operations and prospects.

On October 31, 2018, the FDA granted the Company’s Breakthrough Device designation request (Q181785) for the QT Breast Scanner. Unlike traditional breast imaging modalities, the QT Breast Scanner has no radiation, no injections, and no compression, potentially offering new opportunities for earlier and more frequent screening for young women at high risk for breast cancer who have no available FDA-cleared screening options. The Company has the following regulatory clearances:

•“The QT Breast Scanner is for use as an ultrasonic imaging system to provide reflection-mode and transmission-mode images of a patient’s breast. The QT Breast Scanner software also calculates the breast fibroglandular volume and total breast volume. The device is not intended to be used as a replacement for screening mammography”—FDA 510(k) K162372 and K220933

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•“The QT Breast Scanner Model 2000A satisfies the requirements of the Certification Mark of the ECM [CE Mark Certification of the European Union]—No. 0P210730.QTUTQ02”

The Company has initiated engagement with the FDA to determine the most appropriate regulatory pathway for its premarket submission and to align on the clinical studies necessary to support such submission. The regulatory review process is inherently iterative, and the FDA may provide additional feedback requiring modifications or further evidence in response to the Company's initial submission. There can be no assurance that the Company will obtain the necessary regulatory clearances or approvals in a timely or cost-effective manner, or at all. The process of seeking FDA clearance or approval is resource-intensive, time-consuming, and subject to significant uncertainty. Delays, unexpected costs, or failure to obtain such regulatory authorizations could materially and adversely affect the Company's ability to commercialize its technology and generate revenue. Furthermore, even if regulatory clearance or approval is obtained, the Company’s products will remain subject to extensive post-market regulatory requirements, including compliance with quality system regulations, post-market surveillance, and reporting obligations. Any failure to comply with these requirements, or the identification of previously unknown issues related to the approved product, manufacturing processes, or manufacturers, could result in administrative or judicial enforcement actions by regulatory authorities, including but not limited to warning letters, fines, injunctions, product recalls, market withdrawal, or civil and criminal penalties. Even if the products containing our technology receive the required regulatory clearance or approval, such products will remain subject to extensive regulatory requirements. If we fail to comply with the regulatory requirements of the FDA and other applicable U.S. and foreign regulatory authorities (as described below), or previously unknown problems with any approved commercial products, manufacturers or manufacturing processes are discovered, we could be subject to administrative or judicially imposed sanctions. Even if we obtain FDA approval of our product candidates, or new indications for our products, market acceptance of our products in the healthcare community, including physicians, patients and third-party payors will depend on many factors, including, without limitation: our ability to provide incremental clinical and economic data that shows the safety and clinical efficacy and cost-effectiveness of, and patient benefits from, our products and product candidates; whether our products and product candidates are included on insurance coverage plans; the willingness and ability of patients and the healthcare community to adopt new technologies; the pricing and reimbursement of our products relative to other products; and the marketing and distribution support for our products and product candidates.

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Following entry into the Gulf Medical Distribution Agreement, the Company has also begun the regulatory approval process with the SFDA, and has done the same with the MOHAP, from which the Company received approval on March 17, 2026. The Company also intends to do the same in the European Union in 2026 to obtain a CE Mark.

In addition, the cost of compliance with new laws or regulations governing our technology or future products could adversely affect our business, financial condition, results of operations and prospects. New laws or regulations may impose restrictions or obligations on us that could force us to redesign our technology or other future products or services, and may impose restrictions that are not possible or practicable to comply with, which could cause our business to fail. See “—Risks Related to Healthcare Industry Shifts and Government Regulation.”

Our industry is highly competitive and is subject to technological change, which may result in new products or solutions that are superior to our technology or other future products we may bring to market from time to time.

The medical imaging industry is rapidly evolving and subject to intense and increasing competition. To compete successfully and to be able to establish and maintain a competitive position in current and future technologies, we will need to demonstrate the advantages of our technology over well-established alternative solutions, products and technologies, such as HHUS, ABUS, mammography and MRI, as well as newer methods of medical imaging and early detection. We believe that effectively engaging market interest for the QT Breast Scanner can be challenging. To achieve this, we will need to raise or develop financial resources, technical expertise, marketing, distribution or support capabilities and we may not be successful in doing so. Many of our current and potential competitors have substantially greater financial, manufacturing, marketing and technical resources than we do. Larger competitors may have substantially larger sales and marketing operations than we or our partners have or plan to have and may have greater name recognition. This may allow those competitors to spend more time with potential customers and to focus on a larger number of potential customers, which would give them a significant advantage over the sales and marketing team we would use and our distributors in making sales.

Larger competitors may also have broader product lines, which enable them to offer customers bundled purchase contracts and quantity discounts. These competitors may have more experience than we have in research and development, marketing, manufacturing, preclinical testing, conducting clinical studies, obtaining FDA and foreign regulatory approvals and marketing approved products. Our competitors may discover technologies and techniques, or enter into partnerships and collaborations, to develop competing products that are more effective or less costly than our products or the products we may develop. There can be no assurance that other companies will not succeed in developing or marketing devices and products that are more effective than our technology or products or that would render our technology or products obsolete or noncompetitive. Academic institutions, government agencies, and other public and private research organizations may seek patent protection regarding potentially competitive products or technologies and may establish exclusive collaborative or licensing relationships with our competitors. Our competitors may be better equipped than we are to respond to competitive pressures. Competition will likely intensify. To our knowledge at the time of filing this annual report, we are not aware of any technologies approved for primary screening clearance by the FDA except for various types of technology related to X-ray mammography.

55We expect to depend on third parties to manufacture a portion of the QT Breast Scanners that we sell and products under development and to supply certain component parts. Our reliance on third-party manufacturers and suppliers involves certain risks that may result in, among others, increased costs, quality or compliance issues, or failure to timely manufacture the QT Breast Scanner and products under development, any of which could materially harm our business.

~~Table~~If cleared, we expect to rely on third-party suppliers for the commercial production of ~~Contents~~the QT Breast Scanner and products under development. Our current ability to successfully produce the QT Breast Scanner is limited and if our attempts at commercialization and deployment are successful, we will need the resources of well-established contract manufacturers to manufacture the QT Breast Scanner and products under development at scale. We have entered into the Canon Manufacturing Agreement with CMSC for the manufacture of the QT Breast Scanner in Japan but production under that agreement has been limited to date. In addition, we are dependent on a number of key suppliers for components and sub-assemblies to be able to successfully manufacture the QT Breast Scanner and products under development in limited quantities, and any disruption in the supply of these components and sub-assemblies will have a material impact on our business. Our dependence on such third-party manufacturers and suppliers involves a number of risks, including:

or licensing relationships with our competitors. Our competitors may be better equipped than we are to respond to competitive pressures. Competition will likely intensify. To our knowledge at the time of filing this annual report, we are not aware of any technologies approved for primary screening clearance by the FDA except for various types of technology related to X-ray mammography.

We expect to depend on third parties to manufacture the QT Breast Scanner and products under development and to supply certain component parts. Our reliance on third-party manufacturers and suppliers involves certain risks that may result in, among others, increased costs, quality or compliance issues, or failure to timely manufacture the QT Breast Scanner and products under development, any of which could materially harm our business.

We expect to rely on third-party suppliers for the commercial production of the QT Breast Scanner and products under development. Our current ability to successfully produce the QT Breast Scanner is limited and if our attempts at commercialization and deployment are successful, we will need the resources of well-established contract manufacturers to manufacture the QT Breast Scanner and products under development at scale and have contracted with CMSC as described in this annual report. In addition, we are dependent on a number of key suppliers for components and sub-assemblies to be able to successfully manufacture the QT Breast Scanner and products under development in limited quantities, and any disruption in the supply of these components and sub-assemblies will have a material impact on our business. Our dependence on such third-party manufacturers and suppliers involves a number of risks, including:

•insufficient capacity or delays in meeting our demand;

•inadequate manufacturing yields, inferior quality and excessive costs;

•inability to manufacture products that meet the agreed upon specifications;

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•inability to obtain an adequate supply of materials;

•trade restrictions and changes in tariffs;

•inability to comply with the relevant regulatory requirements for the manufacturing process;

•limited warranties on products supplied to us;

•inability to comply with our contractual obligations;

•potential increases in prices; and

•increased exposure to potential misappropriation of our intellectual property.

If any of our manufacturers or suppliers breach their agreements, are unable to meet their contractual or quality requirements, or become unwilling to perform for any reason, we may be unable, or may be unable in a timely manner, to locate alternative acceptable manufacturers or suppliers and enter into favorable agreements with them.

In addition, if we are required to change the manufacturer of a critical component of our products, we will be required to verify that the new manufacturer maintains facilities, procedures and operations that comply with our quality and applicable regulatory requirements, which could further impede our ability to manufacture our products in a timely manner. Transitioning to a new supplier could be time-consuming and expensive, may result in interruptions in our operations and product delivery, could affect the performance specifications of our products or could require that we modify the design of those systems. If the change in manufacturer results in a significant change to any product, a new clearance or approval from the FDA or similar international regulatory authorization may be necessary before we implement the change, which could cause substantial delays. The occurrence of any of these events could harm our ability to meet the demand for our products in a timely or cost-effective manner. See “—Risks Related to Healthcare Industry Shifts and Government Regulation.”

We may experience development or manufacturing problems and higher costs, or delays that could limit our revenue, if any, or increase our losses.

Developing manufacturing procedures for new products requires developing specific production processes for those products. Developing such processes could be time consuming, and any unexpected difficulty in doing so could delay the successful commercialization and deployment of the QT Breast Scanner and products under development. Moreover, difficulties associated with adapting our technology and product design to the proprietary process technology and design rules of outside manufacturers can lead to reduced yields. Since low yields may result from either design or process technology failures, yield problems may not be effectively determined or resolved until an actual product exists that can be analyzed and tested to identify process sensitivities relating to the design rules that are used. As a result, yield problems may not be identified until well into the production process, and resolution of yield problems may require cooperation between our manufacturers and us. This risk could be compounded by any future offshore location of our manufacturers, increasing the effort and time required to identify, communicate and resolve manufacturing yield problems. Manufacturing defects that we do not discover during the manufacturing or testing process may lead to costly product recalls. These risks may lead to increased costs or delayed product delivery, which would harm our profitability and customer relationships. Furthermore, our, our manufacturers’ or our suppliers’ production processes and assembly methods may have to change to accommodate any significant, future expansion of our manufacturing capacity, which may increase the manufacturing costs, delay production of our products, reduce our product margin, require supplemental filings with the FDA or other regulatory authorities, any of which may adversely impact our business. If we are unable to keep up with demand for our products by successfully manufacturing and shipping our products in a timely manner, our revenue could be impaired, and market acceptance for our products could be adversely affected.

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technology failures, yield problems may not be effectively determined or resolved until an actual product exists that can be analyzed and tested to identify process sensitivities relating to the design rules that are used. As a result, yield problems may not be identified until well into the production process, and resolution of yield problems may require cooperation between our manufacturers and us. This risk could be compounded by any offshore location of CMSC, increasing the effort and time required to identify, communicate and resolve manufacturing yield problems. Manufacturing defects that we do not discover during the manufacturing or testing process may lead to costly product recalls. These risks may lead to increased costs or delayed product delivery, which would harm our profitability and customer relationships. Furthermore, our, our manufacturers’ or our suppliers’ production processes and assembly methods may have to change to accommodate any significant, future expansion of our manufacturing capacity, which may increase the manufacturing costs, delay production of our products, reduce our product margin, require supplemental filings with the FDA or other regulatory authorities, any of which may adversely impact our business. If we are unable to keep up with demand for our products by successfully manufacturing and shipping our products in a timely manner, our revenue could be impaired, and market acceptance for our products could be adversely affected.

We plan to do business globally, including in certain countries where we might have limited resources and would be subject to additional regulatory burdens and other risks and uncertainties.

We expect to do business globally, including in North America and certain countries in Asia, Europe, Africa and South America. Commercialization of the QT Breast Scanner and products under development in foreign markets, either directly or through third parties, is subject to additional risks and uncertainties, including:

•reimbursement and insurance coverage;

•our inability to find agencies, dealers or distributors in specific countries or regions;

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•our inability to directly control commercial activities of third parties;

•limited resources to be deployed to a specific jurisdiction;

•the burden of complying with complex and changing regulatory, tax, accounting and legal requirements;

•different medical imaging practice and customs in foreign countries affecting acceptance in the marketplace;

•import or export licensing and other requirements that could impair our ability to compete in international markets or subject our company to liability if we violate such laws and regulations;

•longer accounts receivable collection times;

•longer lead times for shipping;

•language barriers for technical training;

•reduced protection of intellectual property rights in some foreign countries;

•foreign currency exchange rate fluctuations; and

•interpretations of contractual provisions governed by foreign laws in the event of a contract dispute.

Sales of the QT Breast Scanner and products under development in foreign markets could also be adversely affected by the imposition of governmental controls, political and economic instability, trade restrictions and changes in tariffs, any of which may adversely affect our business, financial condition, results of operations and prospects.

IfWe conduct business in the ~~future~~Kingdom weof ~~are~~Saudi ~~approved~~Arabia ~~for~~ and ~~are~~the ~~otherwise~~UAE ~~able~~and tomilitary ~~commercialize~~conflicts ~~any~~and ofgeopolitical ~~our~~instability ~~products~~in orthe ~~services,~~Middle ~~but are unable to obtain adequate reimbursement or insurance coverage from third-party payors~~East, weincluding ~~may~~U.S. ~~not~~and beIsraeli ~~able~~military toactions ~~generate~~against ~~significant revenue~~Iran, incould ~~which~~disrupt ~~case~~global wemarkets ~~may~~and ~~need~~adversely toaffect ~~obtain~~our ~~additional~~business ~~financing.~~and finances.

~~Coding~~Armed conflicts and ~~coverage~~heightened ~~determinations~~geopolitical astensions ~~well~~in asthe ~~reimbursement~~Middle ~~levels~~East, including ongoing U.S. and ~~conditions~~Israeli ~~are~~military ~~important~~operations against Iran launched on February 28, 2026, pose risks to the ~~commercial~~global ~~success~~economy and to our business, particularly as we have distribution arrangements in the Kingdom of anSaudi ~~imaging~~Arabia ~~product~~and orthe ~~offering~~UAE. Iran has retaliated across the Gulf region, including attacks against targets in Qatar, the UAE, Kuwait, Bahrain and the Kingdom of Saudi Arabia. A significant escalation of hostilities in this or other global conflicts may have a material adverse impact on our business. The ~~future~~current ~~availability~~military conflict may affect our ability to continue our projects in these regions due to lack of ~~insurance~~resources, ~~coverage~~local support, and ~~reimbursement~~safety for ~~newly~~the ~~approved~~workers ~~medical~~of ~~devices~~our isdistribution ~~highly~~partners. ~~uncertain,~~Any ~~and~~disruption to our ~~future~~ability ~~business~~to distribute our products to this region will belikely ~~greatly~~result ~~impacted~~in byan impact on our finances. Furthermore, although the ~~level~~length and impact of ~~reimbursement~~the ~~provided~~ongoing byconflict ~~third-party~~is ~~payors~~in the Middle East is highly unpredictable, it could lead to global market disruptions. The Inescalation of the conflict in the Middle East and the resulting measures that have been taken, and could be taken in the future, by the United States, ~~third-party~~NATO ~~payors~~(or ~~decide~~member ~~which~~countries), ~~imaging~~the ~~products~~European Union, Israel and ~~services~~its ~~they~~neighboring ~~will~~states ~~cover,~~and ~~how~~other ~~much~~countries ~~they~~have ~~will~~created ~~pay~~global ~~and~~security ~~whether~~concerns ~~they~~that ~~will~~could ~~continue~~have ~~reimbursement~~a lasting impact on regional and global economies. For ~~Third-party~~example, ~~payors~~any ~~may~~disruption ~~not~~to ~~cover~~the flow of oil through the Strait of Hormuz or ~~provide~~other ~~adequate~~critical ~~reimbursement~~shipping ~~for~~lanes, ~~imaging~~could ~~services~~result ~~using~~in a rapid and sustained increase in global oil and energy prices, which would increase transportation and logistics costs and the QTcost ~~Breast~~of ~~Scanner~~petroleum-based production materials. Higher energy and fuel prices would also be disruptive for the global economy and our ~~products~~end ~~under~~user ~~development~~customers. In addition, ~~assuming~~an weescalation ~~are~~of ~~able~~military toaction ~~fully~~in ~~develop~~the ~~and~~Middle ~~obtain~~East ~~all~~could ~~regulatory~~disrupt ~~approvals~~global shipping routes, increase transit times and ~~clearances~~freight costs, and create broader supply chain bottlenecks similar to ~~market~~those itexperienced during prior periods of global disruption. Any macroeconomic deterioration resulting from an escalation in Middle Eastern hostilities could compound the existing challenges facing our business and could have a material adverse effect on our business, financial condition, results of operations, and liquidity.

57 The extent and duration of the ongoing conflict, resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale. Any such disruptions may also have the effect of heightening many of the other risks described in this section. If these disruptions or other matters of global

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~~United~~concern ~~States~~continue or other geographies. To date, we have not had any discussions with any third-party payors, including any regulatory agencies administering any government funded healthcare programs, regarding the coding, coverage or reimbursement for ~~imaging~~an ~~services~~extensive ~~using~~period ~~the QT Breast Scanner or other products under development. Accordingly, unless government and other third-party payors provide coverage and reimbursement for the use~~ of ~~our products and services~~time, ~~patients may not use them, which would cause investors~~ to ~~lose their entire investment. A primary trend in~~ the ~~United~~extent ~~States~~that ~~healthcare~~we ~~industry and elsewhere is cost containment. Government authorities and other third-party payors~~ have ~~attempted~~material tooperations ~~control costs by limiting coverage and the amount of reimbursement for particular products and services. Reimbursement may not be available,~~ or ~~continue~~assets toin ~~be available, for imaging services using the QT Breast Scanner, our Medical Scan as~~ a ~~Service,~~conflict ~~other products under development or any other products we may develop in the future. Even if reimbursement is available~~zone, ~~such~~they ~~reimbursement~~ may ~~not~~ be adequate. We also will be subject to foreign reimbursement policies in the international markets we expect to enter. Decisions by health insurers or other third-party payors in these markets not to cover, or to discontinue reimbursing, our products could materially ~~and~~ adversely ~~affect our business~~affected. ~~If such decisions are made, they could also have a negative impact on our ability to generate revenues, in which case we may need to obtain additional financing.~~

If in the future we are approved for and are otherwise able to commercialize any of our products or services, but are unable to obtain adequate reimbursement or insurance coverage from third-party payors, we may not be able to generate significant revenue, in which case we may need to obtain additional financing.

Coding and coverage determinations as well as reimbursement levels and conditions are important to the commercial success of an imaging product or offering. The Company achieved approval of a new Category III CPT code, X579T, for 3D quantitative transmission volumetric ultrasound tomography of the breast from the AMA. This code recognizes the distinct clinical service enabled by the Company’s Breast Acoustic CT system’s radiation-free, compression-free, 3D breast imaging platform, and becomes effective January 1, 2027. The future availability of insurance coverage and reimbursement for newly approved medical devices is highly uncertain, and our future business will be greatly impacted by the level of reimbursement provided by third-party payors. In the United States, third-party payors decide which imaging products and services they will cover, how much they will pay and whether they will continue reimbursement. Third-party payors may not cover or provide adequate reimbursement for imaging services using the QT Breast Scanner and our products under development, assuming we are able to fully develop and obtain all regulatory approvals and clearances to market it in the United States or other geographies. To date, we have not had any discussions with any third-party payors, including any regulatory agencies administering any government funded healthcare programs, regarding the coding, coverage or reimbursement for imaging services using the QT Breast Scanner or other products under development. Accordingly, unless government and other third-party payors provide coverage and reimbursement for the use of our products and services, patients may not use them, which would cause investors to lose their entire investment. A primary trend in the United States healthcare industry and elsewhere is cost containment. Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular products and services. Reimbursement may not be available, or continue to be available, for imaging services using the QT Breast Scanner, our SaaS Cloud Platform, other products under development or any other products we may develop in the future. Even if reimbursement is available, such reimbursement may not be adequate. We also will be subject to foreign reimbursement policies in the international markets we expect to enter. Decisions by health insurers or other third-party payors in these markets not to cover, or to discontinue reimbursing, our products could materially and adversely affect our business. If such decisions are made, they could also have a negative impact on our ability to generate revenues, in which case we may need to obtain additional financing.

Recent changes in the United States related to payment policies for imaging procedures could have a negative impact on the utilization of our imaging services.

In the United States, over the past several years, the ~~Centers for Medicare & Medicaid Services (“~~CMS”), the federal agency responsible for administering the Medicare program, has implemented numerous changes to payment policies for imaging procedures in both the hospital setting and non-hospital settings, which include physician offices and freestanding imaging facilities. Some of these changes have had a negative impact on utilization of imaging services. Examples of these changes include:

•limiting payments for imaging services in physician offices and free-standing imaging facility settings based upon rates paid to hospital outpatient departments;

•reducing payments for certain imaging procedures when performed together with other imaging procedures in the same family of procedures on the same patient on the same day in the physician office and free-standing imaging facility setting;

•making significant revisions to the methodology for determining the practice expense component of the Medicare payment applicable to the physician office and free-standing imaging facility setting which results in a reduction in payment; and

•revising payment policies and reducing payment amounts for imaging procedures performed in the hospital outpatient setting.

We also expect increased regulation and oversight of advanced diagnostic testing. One provision in the Protecting Access to Medicare Act requires CMS to develop AUC that professionals must consult when ordering advanced diagnostic imaging services MRI, CT, nuclear medicine (including position emission tomography) and other advanced diagnostic imaging services that the Secretary of HHS may specify). Beginning in 2020, payment will be made to the furnishing professional for an applicable advanced diagnostic imaging service only if the claim indicates that the ordering professional consulted a qualified clinical decision support mechanism, as identified by HHS, as to whether the ordered service adheres to the applicable AUC. To the extent that these types of changes have the effect of reducing the aggregate number of diagnostic medical imaging procedures performed in the United States, our business, results of operations, financial condition and cash flows would be adversely affected.

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to the applicable AUC. To the extent that these types of changes have the effect of reducing the aggregate number of diagnostic medical imaging procedures performed in the United States, our business, results of operations, financial condition and cash flows would be adversely affected.

Billing complexities associated with obtaining payment or reimbursement may negatively affect our revenue, cash flow and profitability.

Billing for imaging services is complex. Payment is provided by individual patients and from a variety of payors, such as commercial insurance carriers, managed care organizations and governmental programs. Each payor typically has different billing requirements, and the billing requirements of many payors have become increasingly stringent.

Among the factors complicating our customers’ ability to bill and receive reimbursement from third-party payors are:

•disputes among payors as to which party is responsible for payment;

•disparity in coverage among various payors;

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•disparity in information and billing requirements among payors; and

•incorrect or missing billing information, which is required to be provided by the ordering physician.

In addition, we may be required to seek new billing codes for imaging services using the QT Breast Scanner, and regulatory authorities may not approve the creation of separate codes. Additionally, even if we are successful, these billing codes or the payment amounts associated with such codes may change in the future.

Any key supplier or distribution agreements that we have established or may establish in the future may not be successful or we may otherwise not realize the anticipated benefits from these agreements. We do not control third parties with whom we have or may have agreements, and we will rely on them to achieve results which may be significant to us. In addition, any current or future agreements may place the development and commercialization of our technology outside our control, may require us to relinquish important rights or may otherwise be on terms unfavorable to us.

We have entered into certain key distribution ~~and manufacturing~~ agreements, and expect to enter into additional, key supplier and distribution agreements with respect to the research, development, manufacture and commercialization of our technology with different relevant industry participants, including, among others, manufacturers of sub-assemblies and boards, cloud storage providers, distribution partners engaged in selling, marketing and servicing our products in their respective countries, and others as we develop our products including integrators, radiologists, cloud storage and third-party payors. See “~~Business-Sales~~The ~~and~~Company’s ~~Marketing~~Business—Key Agreements.” We refer to these third parties that we have agreements with or engage with for future potential agreements as collaborators. For a discussion of the Company’s Approved Supplier List and engagements with suppliers, see “Business- — Manufacturing.” Any future potential relationships with collaborators may require us to rely on external consultants, advisors, and experts for assistance in several key functions, including research and development, manufacturing, regulatory and intellectual property. We cannot and will not control these third parties, but we may rely on them to achieve results, which may be significant to us. Relying upon these collaborative arrangements for our technology subjects us to a number of risks, including:

•we may not be able to control the amount and timing of resources that our collaborators may devote to our technology;

•should a collaborator fail to comply with applicable laws, rules or regulations when performing services for us, we could be held liable for such violations;

•our collaborators may have a shortage of qualified personnel, particularly radiologists who can review the medical images generated by the QT Breast Scanner and products and services under development, especially as we deploy additional devices and new products and the volume of scans increases;

•we may be required to relinquish important rights, such as marketing and distribution rights;

•business combinations or significant changes in a collaborator’s business strategy may adversely affect a collaborator’s willingness or ability to complete its obligations under any arrangement;

•under certain circumstances, a collaborator could move forward with a competing product developed either independently or in collaboration with others, including our competitors;

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•our current or future collaborators may utilize our proprietary information in a way that could expose us to competitive harm;

•our collaborators could obtain ownership or other control over intellectual property that is material to our business; and

•collaborative arrangements are often terminated or allowed to expire, which could delay the ability to commercialize our technology.

In addition, if disputes arise between us and any of our collaborators, it could result in the delay or termination of the development, manufacturing or commercialization of products containing our technology, lead to protracted and costly legal proceedings, or cause collaborators to act in their own interest, which may not be in our interest. As a result, the collaborative arrangements that we may enter into, may not achieve their intended goals.

If any of these scenarios materialize, they could have a material adverse effect on our business, financial condition, results of operations and prospects.

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We also may have other future products where it is desirable or essential to enter into agreements with a collaborator who has greater financial resources or different expertise than us, but for which we are unable to find an appropriate collaborator or are unable to do so on favorable terms. If we fail to enter into such collaborative agreements on favorable terms, it could materially delay or impair our ability to develop and commercialize, and increase the costs of development and commercialization of, our technology.

Even if we obtain all necessary FDA approvals, our products and product candidates may not achieve or maintain market acceptance.

Even if we obtain FDA approval of our products and product candidates, market acceptance of our products in the healthcare community, including physicians, patients and third-party payors, will depend on many factors, including:

•our ability to provide incremental clinical and economic data that shows the safety and clinical efficacy and cost-effectiveness of, and patient benefits from, our products;

•the availability of alternative products;

•whether our products or the use thereof are included on insurance company formularies or coverage plans;

•the willingness and ability of patients and the healthcare community to adopt our technologies;

•customer demand;

•liability risks generally associated with the use of new product candidates;

•the training required to use new product candidates;

•perceived inadequacy of evidence supporting clinical benefits or cost-effectiveness over existing alternatives;

•the convenience and ease of use of our products relative to other treatment methods;

•the pricing and reimbursement of our products relative to other treatment methods; and

•the marketing and distribution support for our products.

Even if we obtain all necessary FDA approvals, our products may fail to achieve market acceptance. If our products achieve market acceptance, they may not maintain that market acceptance over time if competing products or technologies are introduced that are received more favorably or are more cost-effective. Failure to achieve or maintain market acceptance would limit our ability to generate revenue and would have a material adverse effect on our business, financial condition, results of operations and prospects.

The outcome of any future claims and litigation could have a material adverse impact on our business, financial condition and results of operations.

We may, from time to time, be subject to claims and may become party to litigation in the normal course of business, including class action lawsuits. Such claims and litigation proceedings may be brought by third parties, including our customers, competitors, advisors, service providers, partners or collaborators, employees, and governmental or regulatory bodies. The final outcome of these claims and litigation, including any settlements, may be significant and may differ substantially from our expectations. We may not be able to determine the amount of any potential losses and other costs we may incur due to the inherent uncertainties of litigation and settlement negotiations. In the event we are required or decide to pay amounts in connection with any claims or lawsuits, such amounts could be significant and could have a material adverse impact on our liquidity, business, financial condition and results of operations.

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customers, competitors, advisors, service providers, partners or collaborators, employees, and governmental or regulatory bodies. The final outcome of these claims and litigation, including any settlements, may be significant and may differ substantially from our expectations. We may not be able to determine the amount of any potential losses and other costs we may incur due to the inherent uncertainties of litigation and settlement negotiations. In the event we are required or decide to pay amounts in connection with any claims or lawsuits, such amounts could be significant and could have a material adverse impact on our liquidity, business, financial condition and results of operations.

We could become subject to product liability claims, product recalls, and warranty claims that could be expensive, divert management’s attention and harm our business reputation and financial results.

Our business exposes us to potential liability risks that are inherent in the marketing and sale of products used in patient care. We may be held liable if the QT Breast Scanner or our products and services under development causes injury or death or is found otherwise unsuitable during usage. The QT Breast Scanner and products and services currently under development incorporate sophisticated components and computer software. Complex software can contain errors, particularly when first introduced. In addition, new products or enhancements may contain undetected errors or performance problems that, despite testing, are discovered only after installation. Patients could allege or possibly prove defects of our products or other products that integrate our technology.

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A product liability claim, regardless of its merit or eventual outcome, could result in significant legal defense costs and divert management’s attention. Regardless of merit or eventual outcome, liability claims may result in:

•injury to our reputation;

•costs of related litigation and substantial monetary awards to patients and others;

•decreased demand for our products and services;

•loss of revenue; and

•the inability to commercialize future products.

Any of these outcomes may have an adverse effect on our business, financial condition and results of operations, and may increase the volatility of our share price.

The coverage limits of our insurance policies we may choose to purchase to cover related risks may not be sufficient to cover future claims. If sales of the QT Breast Scanner and other products and services under development suffer future product liability claims, we may be unable to maintain product liability insurance at satisfactory rates or with adequate amounts or at all. A product liability claim, any product recalls or excessive warranty claims, whether arising from defects in design or manufacture or otherwise, could negatively affect our sales or require a change in the design or manufacturing process, any of which could harm our relationship with our customers and partners, and have a material adverse impact on our reputation and business, financial condition, results of operations and prospects.

In addition, if the QT Breast Scanner or other products integrating our technology are defective, we, our future customers or partners may be required to notify regulatory authorities and/or to recall the products and discontinue any services See “ —Risks Related to Healthcare Industry Shifts and Government Regulation—Our products may cause or contribute to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition and results of operations. The discovery of serious safety issues with our products, or a recall of our products either voluntarily or at the direction of the FDA or another governmental authority, could have a negative impact on us.” Any recall would divert management’s attention and financial resources and harm our reputation with customers, patients, medical professionals and third-party payors. A recall involving the QT Breast Scanner or our products under development, would be particularly harmful to our business. The adverse publicity resulting from any of these actions could adversely affect the perception of our customers or partners. These investigations or recalls, especially if accompanied by unfavorable publicity, could result in our incurring substantial costs, losing revenues and damaging our reputation, each of which would harm our business, financial condition, results of operations and prospects.

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We do not expect to carry any business interruption insurance or any other insurance (except for director and officer, property and product liability insurance). As a result, we may incur uninsured losses, increasing the possibility that you would lose your entire investment in our company.

Our products and services are in the medical imaging field and so may be subject to claims. We are not immune from product liability or other product claim risks, and we may not be able to maintain insurance on acceptable terms against such risks or that such insurance will be sufficient to protect us against potential claims or that insurance will be available in the future in amounts sufficient to protect us. A product liability claim or other claim, as well as any claims for uninsured liabilities or in excess of insured liabilities, could have a material adverse effect on our business, financial condition, results of operations and prospects.

The mishandling or the perceived mishandling of sensitive information, or the occurrence of data security breaches, could harm our business.

We expect that the QT Breast Scanner and our products under development will enable us to accumulate a significant amount of highly sensitive and/or confidential information, including medical images and other medical information. These images could be received by our customers or collaborators, such as radiologists and other professionals at cancer screening and other healthcare facilities, to increase the probability of early disease detection. While employee contracts generally contain standard confidentiality provisions, our employees, customers or collaborators may not properly handle or process sensitive or confidential data. The improper handling of sensitive or confidential data, or even the perception of such mishandling (whether or not valid), or other security lapses by us, our customers or collaborators, could reduce demand for such products or otherwise expose us to financial or reputational harm or legal liability. In addition, any security breach, including personal data breaches, or incident, including cybersecurity incidents, that we experience could result in unauthorized access to, misuse of, or unauthorized acquisition of the sensitive or confidential information and data (including medical information), the loss, corruption, or alteration of this data, interruptions in our operations, or damage to our systems. Any such incidents could expose us to claims, litigation, regulatory or other governmental investigations, administrative fines and potential liability. An increasing number of digital platforms have disclosed breaches of their security, some of which have involved sophisticated and highly targeted attacks on portions of their services. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not foreseeable or recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, public perception of the effectiveness of our security measures and brand could be harmed and our results of operations could be negatively affected. Data security breaches and other incidents may also result from non-technical means (e.g., actions by employees or contractors). Any compromise of our security could result in a violation of applicable security, privacy or data protection, consumer and other laws, regulatory or other governmental investigations, enforcement actions, and legal and financial exposure, including potential contractual liability. Any such compromise could also result in damage to our reputation and a loss of confidence in our security and privacy or data protection measures. Any of these effects could materially and adversely affect our business, financial condition and results of operations.

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In addition, any security breach, including personal data breaches, or incident, including cybersecurity incidents, that we experience could result in unauthorized access to, misuse of, or unauthorized acquisition of the sensitive or confidential information and data (including medical information), the loss, corruption, or alteration of this data, interruptions in our operations, or damage to our systems. Any such incidents could expose us to claims, litigation, regulatory or other governmental investigations, administrative fines and potential liability. An increasing number of digital platforms have disclosed breaches of their security, some of which have involved sophisticated and highly targeted attacks on portions of their services. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not foreseeable or recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, public perception of the effectiveness of our security measures and brand could be harmed and our results of operations could be negatively affected. Data security breaches and other incidents may also result from non-technical means (e.g., actions by employees or contractors). Any compromise of our security could result in a violation of applicable security, privacy or data protection, consumer and other laws, regulatory or other governmental investigations, enforcement actions, and legal and financial exposure, including potential contractual liability. Any such compromise could also result in damage to our reputation and a loss of confidence in our security and privacy or data protection measures. Any of these effects could materially and adversely affect our business, financial condition and results of operations.

Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security.

Our ability to execute our business strategy depends, in part, on the continued and uninterrupted performance of our IT systems, which support our operations. Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from, among others, computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization or similar disruptive problems. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product development programs. Any such security breach may compromise information stored on our networks and may result in significant data losses or theft of personally identifiable information. A cybersecurity breach could also hurt our reputation by adversely affecting the patients’ perception of the security of their information. A number of proposed and enacted federal, state and international laws and regulations obligate companies to notify individuals of security breaches involving particular personally identifiable information, which could result from breaches experienced by us or by third parties, including collaborators, vendors, contractors or other organizations with which we expect to form strategic relationships. In addition, a cybersecurity attack could result in other negative consequences, including disruption of our internal operations, increased cyber security protection costs, lost revenue, regulatory actions or litigations.

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Cyber-attacks and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to our competitive position.

Increased sophistication and activities of perpetrators of cyber-attacks have resulted in an increase in information security risks in recent years. Hackers develop and deploy viruses, worms, and other malicious software programs that attack products and services and gain access to networks and data centers. In addition to extracting sensitive information, such attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information. The prevalent use of mobile devices also increases the risk of data security incidents. If we experience difficulties maintaining existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations.

Additionally, these systems contain valuable proprietary and confidential information and may contain personal data of our customers. While we believe we have taken reasonable steps to protect such data, techniques used to gain unauthorized access to data and systems, disable or degrade service, or sabotage systems, are constantly evolving, and we may be unable to anticipate such techniques or implement adequate preventative measures to avoid unauthorized access or other adverse impacts to such data or our systems. In addition, some of our third-party service providers and partners also collect and/or store our sensitive information and our customers’ data on our behalf, and these service providers and partners are subject to similar threats of cyber-attacks and other malicious internet-based activities, which could also expose us to risk of loss, litigation, and potential liability. A security breach could result in disruptions of our internal systems and business applications, harm to our competitive position from the compromise of confidential business information, or subject us to liability under laws that protect personal data. Additionally, actual, potential or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants. Specifically, as cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities. Any of these consequences would adversely affect our revenue and margins. Additionally, even if we purchase cybersecurity insurance coverage, we cannot be certain that such coverage will be adequate for data security liabilities actually incurred, will cover any indemnification claims against us relating to any incident, will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our reputation, business, prospects, results of operations and financial condition.

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increasing costs, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants. Specifically, as cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities. Any of these consequences would adversely affect our revenue and margins. Additionally, even if we purchase cybersecurity insurance coverage, we cannot be certain that such coverage will be adequate for data security liabilities actually incurred, will cover any indemnification claims against us relating to any incident, will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our reputation, business, prospects, results of operations and financial condition.

We are exposed to data and cybersecurity risks that could result in data breaches, service interruptions, ransomware and demands, harm to our reputation, protracted and costly litigation or significant liability.

In connection with the products and services that we provide, we collect, use, store, transmit and otherwise process certain confidential, proprietary and sensitive information, including personally identifiable information and PHI of customers, employees and others. We rely on the efficient, uninterrupted and secure operation of complex information technology systems and networks to operate our business and securely store, transmit and otherwise process such information. In the normal course of business, we also share information with our service providers and other third parties. A failure to safeguard the integrity, confidentiality, availability and authenticity of personal information, customer data and our proprietary data from cyber-attacks, unauthorized access, fraudulent activity (e.g., check “kiting” or fraud, wire fraud or other dishonest acts), data breaches, ransomware and other security incidents that we, our third-party service providers or our customers may experience may lead to modification, destruction, loss of availability or theft of critical and sensitive data pertaining to us, our customers or other third parties. While we have taken extensive precautions to protect such confidential, proprietary and sensitive information, including personal information, these risks were heightened due to our remote workforce due to the COVID-19 pandemic, and there can be no assurance that such actions will be sufficient to prevent cyber-attacks or security breaches or mitigate all potential risks to our systems, networks and data, particularly with the recent proliferation of ransomware attacks around the world. All such protective measures, as well as additional measures that may be required to comply with rapidly evolving data privacy and security standards and protocols imposed by law, regulation, industry standards or contractual obligations, have and will continue to cause us to incur substantial expenses. Failure to timely upgrade or maintain computer systems, software and networks as necessary could also make us or our third-party service providers susceptible to breaches and unauthorized access and misuse. We may be required to expend significant additional resources to modify, investigate or remediate vulnerabilities or other exposures arising from data and cybersecurity risks.

Improper access to our or our third-party service providers’ systems or databases could result in the theft, publication, deletion or modification of confidential, proprietary or sensitive information, including personal information. An actual or perceived breach of our security systems or those of our third-party service providers may require notification under applicable data privacy regulations or contractual obligations. The accidental or unauthorized access to or disclosure, loss, destruction, disablement, corruption or encryption of, use or misuse of or modification of our, our customers’ or other third parties’ confidential, proprietary or sensitive information, including personal information, by us or our third-party service providers could result in significant fines, penalties, orders, sanctions and proceedings or actions against us by governmental bodies and other regulatory authorities, customers or third parties, which could materially and adversely affect our business, financial condition and results of operations. Any such proceeding or action, and any related indemnification obligations, could damage our reputation, force us to incur significant expenses in defense of such proceeding or action, distract our management, increase our costs of doing business or result in the imposition of financial liability.

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~~third-party~~applicable ~~service~~data ~~providers~~privacy ~~may~~regulations beor ~~unable~~contractual toobligations. ~~anticipate~~The ~~these~~accidental ~~techniques~~ or ~~detect~~unauthorized anaccess ~~incident~~to or disclosure, ~~assess~~loss, ~~its~~destruction, ~~severity~~disablement, corruption or ~~impact~~encryption of, ~~react~~use or ~~appropriately~~misuse ~~respond~~of inor amodification ~~timely~~of ~~manner~~our, our customers’ or ~~implement~~other ~~adequate~~third ~~preventative~~parties’ ~~measures.~~confidential, ~~Our~~proprietary ~~systems~~or ~~are~~sensitive ~~also~~information, ~~subject~~including topersonal ~~compromise~~information, ~~from~~by ~~internal~~us ~~threats,~~or ~~such~~our asthird-party ~~theft~~service providers could result in significant fines, ~~misuse~~penalties, ~~unauthorized~~orders, ~~access~~sanctions orand ~~other~~proceedings ~~improper~~or actions byagainst ~~employees,~~us ~~service~~by ~~provides~~governmental bodies and other regulatory authorities, customers or third parties, ~~with~~which ~~otherwise~~could ~~legitimate~~materially ~~access~~and toadversely affect our ~~systems~~business, orfinancial ~~databases.~~condition ~~The~~and ~~latency~~results of aoperations. ~~compromise~~Any issuch ~~often~~proceeding ~~measured~~or ~~in months~~action, ~~but~~and ~~could~~any berelated ~~years~~indemnification obligations, ~~and~~could wedamage ~~may~~our ~~not~~reputation, beforce ~~able~~us to ~~detect~~incur asignificant ~~compromise~~expenses in adefense ~~timely~~of ~~manner.~~such proceeding or action, distract our management, increase our costs of doing business or result in the imposition of financial liability.

Despite our efforts to ensure the integrity, confidentiality, availability, and authenticity of our proprietary systems and information, it is possible that we may not be able to anticipate or to implement effective preventive measures against all cyber threats. No security solution, strategy, or measures can address all possible security threats or block all methods of penetrating a network or otherwise perpetrating a security incident. The risk of unauthorized circumvention of our security measures or those of our third-party providers, customers and partners has been heightened by advances in computer and software capabilities and the increasing sophistication of hackers, including those operating on behalf of nation-state actors, who employ complex techniques involving the theft or misuse of personal and financial information, counterfeiting, “phishing” or social engineering incidents, account takeover attacks, denial or degradation of service attacks, malware, fraudulent payment and identity theft. Because the techniques used by hackers change frequently and are increasingly complex and sophisticated, and new technologies may not be identified until they are launched against a target, we and our third-party service providers may be unable to anticipate these techniques or detect an incident, assess its severity or impact, react or appropriately respond in a timely manner or implement adequate preventative measures. Our systems are also subject to compromise from internal threats, such as theft, misuse, unauthorized access or other improper actions by employees, service provides and other third parties with otherwise legitimate access to our systems or databases. The latency of a compromise is often measured in months, but could be years, and we may not be able to detect a compromise in a timely manner.

Due to applicable laws and regulations or contractual obligations, we may also be held responsible for any failure or cybersecurity breaches attributed to our third-party service providers as they relate to the information that we share with them. Although we generally have agreements relating to data privacy and security in place with our third-party service providers, they are limited in nature and we cannot guarantee that such agreements will prevent the accidental or unauthorized access to or disclosure, loss, destruction, disablement, corruption or encryption of, use or misuse of or modification of confidential, proprietary or sensitive information, including personal information, or enable us to obtain reimbursement from third-party service providers in the event we should suffer incidents resulting in accidental or unauthorized access to or disclosure, loss, destruction, disablement or encryption of, use or misuse of or modification of confidential, proprietary or sensitive information, including personal information. In addition, because we do not control our third-party service providers and our ability to monitor their data security is limited, we cannot ensure the security measures they take will be sufficient to protect confidential, proprietary or sensitive information (including personal information).

Regardless of whether a security incident or act of fraud involving our solutions is attributable to us or our third-party service providers, such an incident could, among other things, result in improper disclosure of information, harm our reputation and brand, reduce the demand for our products and services, lead to loss of customer business or confidence in the effectiveness of our security measures, disrupt normal business operations or result in our systems or products and services being unavailable. In addition, such incidents may require us to spend material resources to investigate or correct the incident and to prevent future security incidents, expose us to uninsured liability, increase our risk of regulatory scrutiny, expose us to protracted and costly litigation, trigger indemnity obligations, result in damages for contract breach, divert the attention of management from the operation of our business and otherwise cause us to incur significant costs or liabilities, any of which could affect our financial condition, results of operations and reputation. Moreover, there could be public announcements regarding any such incidents and any steps we take to respond to or remediate such incidents, and if securities analysts or investors perceive these announcements to be negative, it could, among other things, have a substantial adverse effect on the price of our common stock. In addition, our remediation efforts may not be successful. Further, any adverse findings in security audits or examinations could result in reputational damage to us, which could reduce the use and acceptance of our solutions, cause our customers to cease doing business with us or have a significant adverse impact on our revenue and future growth prospects. Furthermore, even if not directed at us specifically, attacks on other financial institutions could disrupt the overall functioning of the financial system or lead to additional regulation and oversight by federal and state agencies, which could impose new and costly compliance obligations.

If we fail to maintain properly the integrity or availability of our data or successfully consolidate, integrate, upgrade or expand our existing information systems, or if our technology products do not operate as intended, our business could be materially and adversely affected. 49

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~~periodically~~If ~~consolidate,~~we ~~integrate,~~fail ~~upgrade~~to ~~and~~maintain ~~expand~~properly ~~our~~the ~~information~~integrity ~~systems’~~or ~~capabilities~~availability ~~as a result~~ of ~~technology~~our ~~initiatives,~~data ~~recently~~or ~~enacted~~successfully ~~regulations~~consolidate, ~~changes in our system platforms and integration of new business acquisitions. Our process of consolidating the number of systems we operate~~integrate, ~~upgrading~~upgrade ~~and~~or ~~expanding~~expand our ~~information~~existing ~~systems’ capabilities, enhancing our systems and developing new systems to keep pace with continuing changes in~~ information ~~processing technology may not be successful. Failure to protect, consolidate and integrate our~~ systems ~~successfully could result in higher than expected costs and diversion of management’s time and energy~~, which could materially and adversely affect our results of operations, financial position and cash flows. Certain of our businesses sell and install software products which may contain unexpected design defects or ~~may~~if ~~encounter unexpected complications during installation or when used with other technologies utilized by the customer. A failure of~~ our technology products todo not operate as intended, ~~and in a seamless fashion with other products could materially and adversely affect~~ our ~~results~~business of operations, financial position and cash flows. Uncertain and rapidly evolving U.S. federal and state, non-U.S. and international laws and regulations related to health data and the health information technology market may alter the competitive landscape or present compliance challenges and could be materially and adversely ~~affect the configuration of our information systems and platforms, and our ability to compete in this market~~affected.

Our business depends on the integrity and timeliness of the data we use to serve our members, customers and health care professionals and to operate our business. If the data we rely upon to run our businesses is found to be inaccurate or unreliable or if we fail to maintain or protect our information systems and data integrity effectively, we could experience failures in our health, wellness and information technology products; lose existing customers; have difficulty attracting new customers; experience problems in determining medical cost estimates and establishing appropriate pricing; have difficulty preventing, detecting and controlling fraud; have disputes with customers, physicians and other health care professionals; become subject to regulatory sanctions, penalties, investigations or audits; incur increases in operating expenses; or suffer other adverse consequences. The volume of health care data generated, and the uses of data, including electronic health records, are rapidly expanding. Our ability to implement new and innovative services, automate and deploy new technologies to simplify administrative processes and clinical decision making, price our products and services adequately, provide effective service to our customers and consumers in an efficient and uninterrupted fashion, provide timely payments to care providers, and report accurately our results of operations depends on the integrity of the data in our information systems. In addition, connectivity among technologies is becoming increasingly important and recent trends toward greater consumer engagement in health care require new and enhanced technologies, including more sophisticated applications for mobile devices. Our information systems require an ongoing commitment of significant resources to maintain, protect and enhance existing systems and develop new systems to keep pace with continuing changes in information processing technology, evolving systems and regulatory standards and changing customer preferences. We periodically consolidate, integrate, upgrade and expand our information systems’ capabilities as a result of technology initiatives, recently enacted regulations, changes in our system platforms and integration of new business acquisitions. Our process of consolidating the number of systems we operate, upgrading and expanding our information systems’ capabilities, enhancing our systems and developing new systems to keep pace with continuing changes in information processing technology may not be successful. Failure to protect, consolidate and integrate our systems successfully could result in higher than expected costs and diversion of management’s time and energy, which could materially and adversely affect our results of operations, financial position and cash flows. Certain of our businesses sell and install software products which may contain unexpected design defects or may encounter unexpected complications during installation or when used with other technologies utilized by the customer. A failure of our technology products to operate as intended and in a seamless fashion with other products could materially and adversely affect our results of operations, financial position and cash flows. Uncertain and rapidly evolving U.S. federal and state, non-U.S. and international laws and regulations related to health data and the health information technology market may alter the competitive landscape or present compliance challenges and could materially and adversely affect the configuration of our information systems and platforms, and our ability to compete in this market.

If significant tariffs or other restrictions related to “trade wars” are placed on U.S. made products or any related counter-measures are taken by any of the countries in which we operate or expect to operate, our revenue and results of operations may be materially harmed.

We have entered into the Canon Manufacturing Agreement with CMSC for the manufacture of the QT Breast Scanner in Japan, and may also have agreements we expect to enter into with manufacturers and/or suppliers in Asia for the volume production of components, sub-assemblies or the full assembly of the QT Breast Scanner and other products under development. If significant tariffs or other restrictions are placed by the United States government on imports or any related counter-measures are taken by the countries in which we have such manufacturing and outsourcing agreements, our business, financial condition and results of operations may be materially harmed. Alternatively, we may seek to shift production outside of the affected countries subject to tariffs or other restrictions, resulting in significant costs and disruption to our operations and business. Our business could also be impacted by retaliatory trade measures taken by other countries in response to existing or future tariffs, causing us to raise prices or make changes to our operations, any of which could materially harm our business, financial condition and results of operations.

Our business may be impacted by changes in general economic conditions.

Our business is subject to risks arising from changes in domestic and global economic conditions, including adverse economic conditions in markets in which we operate, which may harm our business. For example, the COVID-19 pandemic caused significant volatility and uncertainty in U.S. and international markets. Similar volatility and uncertainty could result from the imposition of tariffs and other trade restrictions intended to have an impact on global supply chains, which may harm our business. If our manufacturers and supplies cannot supply us with materials and product at the cost that we have planned upon, we could see increased expense in the production of the QT Breast Scanner. If our future customers significantly reduce spending in areas in which our technology and products are utilized, or prioritize other expenditures over our technology and products, our business, financial condition, results of operations and prospects would be materially adversely affected.

Disruption to the global economy could also result in a number of follow-on effects on our business, including a possible slow-down resulting from lower customer expenditures; inability of customers to pay for products, solutions or services on time, if at all; more restrictive export regulations which could limit our potential customer base; negative impact on our liquidity, financial condition and share price, which may impact our ability to raise capital in the market, obtain financing and secure other sources of funding in the future on terms favorable to us. 50

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customers significantly reduce spending in areas in which our technology and products are utilized, or prioritize other expenditures over our technology and products, our business, financial condition, results of operations and prospects would be materially adversely affected.

Disruption to the global economy could also result in a number of follow-on effects on our business, including a possible slow–down resulting from lower customer expenditures; inability of customers to pay for products, solutions or services on time, if at all; more restrictive export regulations which could limit our potential customer base; negative impact on our liquidity, financial condition and share price, which may impact our ability to raise capital in the market, obtain financing and secure other sources of funding in the future on terms favorable to us.

In addition, the occurrence of catastrophic events, such as hurricanes, storms, earthquakes, tsunamis, floods, medical epidemics and other catastrophes that adversely affect the business climate in any of our markets could have a material adverse effect on our business, financial condition and results of operations.

Technological change may adversely affect sales of our products and may cause our products to become obsolete.

The medical device market is characterized by extensive research and development, and rapid technological change. Technological progress or new developments in our industry could adversely affect clinical adoption of QT Breast Scanner and our other products under development, which could be rendered obsolete because of future innovations by our competitors with traditional methods like MRI, HHUS or mammography. We may be limited by resources, including qualified personnel, funds for capital investments, and other constraints from offering improvements to our products and services and our business, operating results and financial condition will suffer as a result.

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Employee attrition may have an adverse impact on our business, results of operations or internal controls.

Our ability to attract, retain and develop qualified and experienced employees, including key executives and other talent, is critical for us to meet our business objectives. We compete with many other businesses to attract and retain employees. It is possible that we could experience loss of key personnel for a variety of causes. If we do not adequately plan for succession of key roles or if we are not successful in attracting or retaining new talent, our performance or internal control over financial reporting could be adversely impacted.

We plan to expand our operations and may not be able to manage our growth effectively, which could strain our resources and delay or derail implementation of our business objectives.

We will need to significantly expand our operations to implement our longer-term business plan and growth strategies, including building and expanding our internal organizational infrastructure to manage the regulatory approval process with the FDA for our product candidates. We will also be required to manage and form new relationships with various strategic partners, technology licensors, customers, manufacturers and suppliers, consultants and other third parties. This expansion and these new relationships will require us to significantly improve or replace our existing managerial, operational and financial systems, and procedures and controls; to improve the coordination between our various corporate functions; and to manage, train, motivate and maintain a growing employee base. The time and costs to effectuate these steps may place a significant strain on our management personnel, systems and resources, particularly if there are limited financial resources and skilled employees available at the time. We cannot assure that we will institute, in a timely manner or at all, the improvements to our managerial, operational and financial systems, procedures and controls necessary to support our anticipated increased levels of operations and to coordinate our various corporate functions, or that we will be able to properly manage, train, motivate and retain our anticipated increased employee base. If we cannot manage our growth initiatives, we will be unable to commercialize our products on a large-scale in a timely manner, if at all, and our business could fail.

If we do not manage our growth or control costs related to growth, our financial condition, results of operations and future growth prospects will suffer.

Our existing systems, facilities, procedures and personnel may not be adequate to support our future growth and operations. We intend to grow our business by expanding our customer base, sales force, and product offerings. Growth could place significant strain on our management, employees, operations, financial systems, and other resources. To accommodate significant growth, we could be required to open additional facilities, expand and improve or information systems and procedures, and hire, train, motivate and manage a growing workforce, all of which would increase our costs. Further, we may not succeed in our plans to accelerate or manage growth by expanding operations, personnel and other resources, or achieve results that are timely and profitable.

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If we are unable to anticipate or keep pace with changes in the marketplace and the direction of technological innovation and customer demands, our technology may become less useful or obsolete and our operating results and financial condition will suffer.

Companies offering traditional medical imaging systems, such as General Electric, Siemens, Philips, Hologic, Varian, Fuji, Canon and Hitachi, are better established in the market than we are, have greater corporate, financial, operational, sales and marketing resources than we do, or have more experience in research and development than we have. Successful developments by these companies using 3D ultralow frequency transmitted sound imaging or other technologies by competitors resulting in new approaches for medical imaging, including technologies, products or services that are more effective or commercially attractive, could make our technology less useful or obsolete. We may also face opposition from certain industry leaders, who may have political influence and the ability to delay deployment of QT Breast Scanner and other products under development in certain geographical areas.

Our competitive position also depends on our ability to:

•generate widespread awareness, acceptance and adoption of our technology and future products or services;

•develop new or enhanced technologies or features that improve the convenience, efficiency, safety or perceived safety, and productivity of our technology and future products or services;

•properly identify customer needs and deliver new products or services or product enhancements to address those needs;

•limit the time required from prototype development to commercial production;

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•limit the timing and cost of regulatory approvals;

•attract and retain qualified personnel and collaborators;

•protect our inventions with patents or otherwise develop proprietary products and processes; and

•secure sufficient capital resources to expand both our continued research and development, and sales and marketing efforts.

If our technology is not, or our future products or services are not, competitive based on these or other factors, our business would be harmed.

We may be unable to sustain revenue growth or profitability.

Our ability to increase revenue in future periods will depend on our ability to successfully penetrate our target markets and increase sales of our products which will, in turn, depend in part on our success in growing our customer base and obtaining reorders from those customers. New products and services will also need to be developed and approved or cleared by the FDA and foreign regulatory agencies. Our ability to become profitable and sustain profitability is highly dependent on our ability to sustain revenue growth and to successfully manage our costs. We are also subject to potential headwinds—adverse economic conditions in the markets we serve, political turmoil, pandemic and disease, acts of God, and other unforeseen factors beyond our control that may affect our ability to sustain revenue and profitability.

Our marketing efforts, including any social media marketing efforts that we may implement in the future, may expose ~~our~~us ~~company~~ to additional regulatory scrutiny, including from the FTC and other consumer protection agencies and regulators.

In addition to the laws and regulations enforced by the FDA, advertising for various services and for non-restricted medical devices is subject to federal truth-in-advertising laws enforced by the FTC, as well as comparable state consumer protection laws. The Company’s efforts to promote its prescription products via direct-to-consumer marketing and social media initiatives may subject us to additional scrutiny of its practices. For example, the FTC and other consumer protection agencies scrutinize all forms of advertising (whether in digital or traditional formats) for business services, consumer-directed products, and non-restricted medical devices to ensure that advertisers are not making false, misleading or unsubstantiated claims or failing to disclose material relationships between the advertiser and its products’ endorsers, among other potential issues. The FDA oversees the advertising and promotional labeling for restricted medical devices and ensures, among other things, that there is effective communication of, and a fair and balanced presentation of, the risks and benefits of such high-risk medical devices.

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Under the Federal Trade Commission Act (“FTC Act”), the FTC is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; and (c) gather and compile information and conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce. The FTC has very broad enforcement authority, and failure to abide by the substantive requirements of the FTC Act and other consumer protection laws can result in administrative or judicial penalties, including civil penalties, injunctions affecting the manner in which the Company would be able to market services or products in the future, or criminal prosecution. Any plans to increase our advertising activities that may be subject to these federal and state truth-in-advertising laws. Any actual or perceived non-compliance with those laws could lead to an investigation by the FTC or a comparable state agency, or could lead to allegations of misleading advertising by private plaintiffs. Any such action against us would disrupt the Company’s business operations, cause damage to our reputation, and result in material adverse effects on our business and financial performance.

The FDA requires that promotional labeling be truthful and not misleading, including with respect to any comparative claims made about competing products or technologies. In addition to FDA implications, the use of comparative claims also present risk of a lawsuit by the competitor under federal and state false advertising and unfair competition statutes (e.g., the Lanham Act) or unfair and deceptive trade practices law, and possibly also state libel law. Such a suit may seek injunctive relief against further advertising, a court order directing corrective advertising, and compensatory and punitive damages where permitted by law. Further, notwithstanding the ultimate outcome of any Lanham Act or similar complaint, the Company’s reputation and relationship with certain customers or distribution partners may be harmed as a result of the allegations related to its products or its business practices more generally.

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Risks Related to Healthcare Industry Shifts and Government Regulation

We are subject to extensive government regulation, which could restrict the development, marketing, sale and distribution of our products and services, and could cause us to incur significant costs.

The Company’s ultrasound imaging products and associated services are subject to extensive pre-market and post-market regulation by the FDA and various other federal, state, local and foreign government authorities. Government regulation of medical devices is meant to assure their safety and effectiveness, and includes requirements for, among other things: design, development and manufacturing; testing, labeling, content and language of instructions for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and distribution; pre-market clearance and approval; conformity assessment procedures; record keeping procedures; advertising and promotion; recalls and field safety corrective actions; post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to occur, could lead to death or serious injury; post-market approval studies; and product import and export.

The Company is also subject to numerous post-marketing regulatory requirements, which include quality system regulations related to the manufacture of the Company’s devices, labeling regulations and medical device reporting regulations. The last of these regulations requires us to report to the FDA if our devices cause or contribute to a death or serious injury, or malfunction in a way that would likely cause or contribute to a death or serious injury if the malfunction recurred. If we fail to comply with present or future regulatory requirements that are applicable, it may subject our company to enforcement action by the FDA, such as: warning or untitled letters; fines; injunctions; consent decrees; civil penalties; customer notifications; termination of distribution; recalls or seizures of products; administrative detention of medical devices believed to be adulterated or misbranded; delays in the introduction of products into the market; operating restrictions; total or partial suspension of production; refusal to grant future clearances or approvals for new products, new intended uses or modifications to our products; withdrawals or suspensions of current approvals, resulting in prohibitions on sales of our products; and in the most serious cases, criminal prosecution or penalties. The occurrence of any of these events may have a material adverse effect on the Company’s business, financial condition and results of operations.

The laws and regulations to which the Company and its products are subject are complex and subject to periodic changes. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales. See “Business-Government Regulation” for a more detailed description of laws and regulations that affect our business and operations.

Failure to comply with applicable regulation in the United States and in the countries where we will sell and distribute our products could harm our business.

QT Breast Scanner and other future products we develop are subject to extensive regulation in the U.S. and elsewhere, including by the FDA and its foreign counterparts, the U.S. Department of Justice (the “DOJ”) and the U.S. Health and Human Services-Office of the Inspector General (the “OIG”). The FDA and foreign regulatory agencies regulate, among other things, with respect to medical devices: design, development and manufacturing; testing, labeling, content and language of instructions for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and distribution; pre-market clearance and approval; conformity assessment procedures; record keeping procedures; advertising and promotion; recalls and field safety corrective actions; post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to occur, could lead to death or serious injury; post-market approval studies; and product import and export.

The regulations for products like QT Breast Scanner, products under development and have tended to become more stringent over time. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales for any approved product. Failure to comply with applicable regulations could jeopardize our ability to sell our future products, if cleared or approved, and result in enforcement actions such as: warning or untitled letters; fines; injunctions; consent decrees; civil penalties; customer notifications; termination of distribution; recalls or seizures of products; administrative detention of medical devices believed to be adulterated or misbranded; delays in the introduction of products into the market; operating restrictions; total or partial suspension of production; refusal to grant future clearances or approvals for new products, new intended uses or modifications to our products; withdrawals or suspensions of current approvals, resulting in prohibitions on sales of our products; and in the most serious cases, criminal prosecution or penalties. The occurrence of any of these events would have a material adverse effect on our business, financial condition and results of operations and could result in stockholders losing their entire investment. 53

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other things, with respect to medical devices: design, development and manufacturing; testing, labeling, content and language of instructions for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and distribution; pre-market clearance and approval; conformity assessment procedures; record keeping procedures; advertising and promotion; recalls and field safety corrective actions; post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to occur, could lead to death or serious injury; post-market approval studies; and product import and export.

We may not receive, or may be delayed in receiving, the necessary clearances or approvals for our future products, and failure to timely obtain necessary clearances or approvals for our future products would adversely affect our ability to grow our business.

See “Business-Government Regulation” for a more detailed description of laws and regulations that affect our business and operations. In the United States, before we can market a new medical device, or a new use of, new claim for or significant modification to an existing product, we must first receive either clearance under Section 510(k) of the FDCA or approval of a PMA from the FDA, unless an exemption applies. Clinical data are sometimes required to support a pre-market approval application. In the process of obtaining PMA approval, the FDA must determine that a proposed device is safe and effective for its intended use based, in part, on extensive data, including, but not limited to, technical, pre-clinical, clinical trial, manufacturing and labeling data. The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices. While we do not expect our products to be marketed under a PMA, should the FDA require we submit to a PMA approval process for any of our products, our business could suffer due to increased costs and timelines to receive such approvals.

If the FDA requires us to submit new 510(k) notifications or PMA applications for modifications to our previously cleared products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties. If the FDA requires us to go through a lengthier, more rigorous examination for future products or modifications to existing products than we had expected, product introductions or modifications could be delayed or canceled, which could adversely affect our ability to grow our business.

The FDA can delay, limit or deny clearance or approval of a medical device for many reasons, including:

•our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our product candidates are safe or effective for their intended uses;

•the disagreement of the FDA or the applicable foreign regulatory body with the design or implementation of our clinical trials or the interpretation of data from pre-clinical studies or clinical trials;

•serious and unexpected adverse effects experienced by participants in our clinical trials;

•the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required;

•our inability to demonstrate that the clinical and other benefits of the device outweigh the risks;

•the manufacturing process or facilities we use may not meet applicable requirements; and

•the potential for approval policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data or regulatory filings insufficient for clearance or approval.

In order to sell our products in member countries of the European Economic Area (“EEA”), our products must comply with the essential requirements of the EU Medical Devices Directive (Council Directive 93/42/EEC). Compliance with these requirements is a prerequisite to be able to affix the Conformité Européene (“CE”) mark to our products, without which they cannot be sold or marketed in the EEA. To demonstrate compliance with the essential requirements we must undergo a conformity assessment procedure, which varies according to the type of medical device and its classification. Except for low-risk medical devices (Class I non-sterile, non-measuring devices), where the manufacturer can issue a European Community (“EC”) Declaration of Conformity based on a self-assessment of the conformity of its products with the essential requirements of the EU Medical Devices Directive, a conformity assessment procedure requires the intervention of an organization accredited by a member state of the EEA to conduct conformity assessments, or a Notified Body. Depending on the relevant conformity assessment procedure, the Notified Body would typically audit and examine the technical file and the quality system for the manufacture, design and final inspection of our devices. The Notified Body issues a certificate of conformity following successful completion of a conformity assessment procedure conducted in relation to the medical device and its manufacturer and their conformity with the essential requirements. This certificate entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EC Declaration of Conformity. 54

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~~authorities,~~In ~~and~~order ~~medical~~to ~~device~~sell ~~stakeholders~~our toproducts ~~come~~in ~~into~~member ~~compliance~~countries ~~with~~of the ~~new~~European ~~requirements.~~Economic AArea ~~one-year~~(“EEA”), ~~delay~~our ofproducts must comply with the ~~compliance~~essential ~~date~~requirements of the ~~MDR~~EU ~~was~~Medical ~~implemented~~Devices inDirective ~~response~~(Council Directive 93/42/EEC). Compliance with these requirements is a prerequisite to ~~the~~be ~~COVID-19~~able ~~pandemic,~~to ~~and~~affix the ~~directive~~Conformité ~~entered~~Européene ~~into~~(“CE”) ~~application~~mark onto ~~May~~our 26products, ~~2021~~without which they cannot be sold or marketed in the EEA. ~~Compared~~To todemonstrate compliance with the ~~earlier~~essential ~~regulatory~~requirements ~~framework~~we ofmust ~~Medical~~undergo ~~Device~~a ~~Directive~~conformity ~~(“MDD”)~~assessment procedure, which varies according to the ~~MDR~~type ~~promotes~~of amedical ~~shift~~device ~~from~~and ~~the~~its ~~pre~~classification. Except for low-~~approval~~risk ~~stage~~medical devices (~~i.e.~~Class I non-sterile, ~~the~~non-measuring ~~path~~devices), towhere CEthe ~~Marking)~~manufacturer tocan issue a ~~life-cycle~~European ~~approach~~Community ~~and~~(“EC”) ~~places~~Declaration ~~greater~~of ~~emphasis~~Conformity based on ~~clinical~~a ~~data~~self-assessment ~~and~~of ~~clinical~~the ~~evaluations~~conformity toof ~~assure~~its ~~the~~products ~~safety~~with ~~and~~the ~~performance~~essential requirements of ~~new~~the ~~medical~~EU ~~devices.~~Medical ~~Moreover~~Devices Directive, a conformity assessment procedure requires the ~~MDR~~intervention ~~includes~~of ~~elements~~an ~~intended~~organization toaccredited ~~strengthen~~by a member state of the ~~conformity~~EEA ~~assessment~~to ~~procedures,~~conduct ~~assert~~conformity ~~greater~~assessments, ~~control~~or ~~over~~a ~~notified~~Notified ~~bodies~~Body. ~~and~~Depending ~~their~~on ~~standards,~~the ~~increase~~relevant ~~overall~~conformity ~~system~~assessment ~~transparency~~procedure, ~~and~~the ~~impose~~Notified ~~more~~Body ~~robust~~would ~~device~~typically ~~vigilance~~audit ~~requirements~~and onexamine ~~manufacturers~~the technical file and ~~distributors.~~the ~~The~~quality ~~new~~system ~~rules~~for ~~and~~the ~~procedures~~manufacture, ~~that~~design ~~have~~and ~~been~~final ~~created~~inspection ~~under~~of ~~the~~our ~~overhauled~~devices. ~~European~~The ~~regulations~~Notified ~~will~~Body ~~likely~~issues ~~result~~a incertificate ~~increased~~of ~~regulatory~~conformity ~~oversight~~following successful completion of ~~all~~a ~~medical~~conformity ~~devices~~assessment ~~marketed~~procedure conducted in relation to the ~~European~~medical ~~Union,~~device and ~~this~~its ~~may,~~manufacturer inand ~~turn,~~their ~~increase~~conformity with the ~~costs,~~essential ~~time~~requirements. ~~and~~This ~~requirements~~certificate ~~that~~entitles ~~need~~the manufacturer to beaffix ~~met~~the inCE ~~order~~mark to ~~place~~its anmedical ~~innovative~~devices orafter ~~high-risk~~having ~~medical~~prepared ~~device~~and onsigned ~~the~~a ~~EEA~~related ~~market.~~EC Declaration of Conformity.

The Company cannot be certain that it will be successful in meeting and continuing to meet the requirements to market a medical device in the EEA under the new regulatory framework called the MDR. The MDR went into force in May 2017 but allowed a three-year transition period until May 2020 for Member States, regulatory authorities, and medical device stakeholders to come into compliance with the new requirements. A one-year delay of the compliance date of the MDR was implemented in response to the COVID-19 pandemic, and the directive entered into application on May 26, 2021. Compared to the earlier regulatory framework of Medical Device Directive, the MDR promotes a shift from the pre-approval stage (i.e., the path to CE Marking) to a life-cycle approach and places greater emphasis on clinical data and clinical evaluations to assure the safety and performance of new medical devices. Moreover, the MDR includes elements intended to strengthen the conformity assessment procedures, assert greater control over notified bodies and their standards, increase overall system transparency, and impose more robust device vigilance requirements on manufacturers and distributors. The new rules and procedures that have been created under the overhauled European regulations will likely result in increased regulatory oversight of all medical devices marketed in the European Union, and this may, in turn, increase the costs, time and requirements that need to be met in order to place an innovative or high-risk medical device on the EEA market.

As a general rule, demonstration of conformity of medical devices and their manufacturers with the essential requirements must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use. Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use, that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device are supported by suitable evidence. If we fail to remain in compliance with applicable European laws and directives, we would be unable to continue to affix the CE mark to our products, which would prevent us from selling them within the EEA. Approval and CE marking procedures vary between countries and can involve additional product testing and additional administrative review periods. The time required to obtain approval or CE mark in other countries might differ from that required to obtain FDA clearance. The regulatory approval or CE marking process in other countries may include all of the risks detailed above regarding FDA clearance in the United States. Regulatory approval or the CE marking of a product in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval or a CE mark in one country may negatively impact the regulatory process in others. Failure to obtain regulatory approval or a CE mark in other countries or any delay or setback in obtaining such approval could have the same adverse effects described above regarding FDA clearance in the United States.

Recent initiatives by the FDA to enhance and modernize various regulatory pathways for device products and its overall approach to safety and innovation in the medical technology industry creates the possibility of changing product development costs, requirements, and other factors and additional uncertainty for the Company’s future products and business.

Regulatory requirements may change in the future in a way that adversely affect the Company. Any change in the laws or regulations that govern the clearance and approval processes or the post-market compliance requirements relating to the Company’s current and future products and associated services could make it more difficult and costly to obtain clearance or approval for new products, or to produce, market and distribute existing products. For example, the FDA and other government agencies have been focusing on the cybersecurity risks associated with certain medical devices and encouraging device manufacturers to take a more proactive approach to assessing the cybersecurity risks of their devices both during development and on a periodic basis after the devices are in commercial distribution. These regulatory efforts could lead to new FDA requirements in the future or additional product liability or other litigation risks, if any of the Company’s products and associated services are considered susceptible to third-party tampering.

In December 2016, Congress passed the 21st Century Cures Act, which made multiple changes to the FDA’s rules for medical devices as well as for clinical trials. In August 2017, Congress passed the Medical Device User Fee reauthorization package, which affects medical device regulation both pre- and post-approval and could have certain impacts on our business. Since that time, the FDA has announced a series of efforts to modernize and streamline the 510(k) notification and regulatory review process and monitoring post-market safety, and issued a proposed rule to formalize the de novo classification process to provide clarity to innovative device developers. Changes in the FDA 510(k) process could make clearance more difficult to obtain, increase delay, add uncertainty and have other significant adverse effects on our ability to obtain and maintain clearance for the Company’s products and associated services. 55

It is unclear at this time whether and how various activities initiated or announced by the FDA to modernize the U.S. medical device regulatory system could affect the Company’s business, as some of the FDA’s new medical device safety and innovation initiatives have not been formalized and remain subject to change. For example, a 2018 Medical Device Safety Action Plan announced by former FDA Commissioner Gottlieb included a particular focus on post-market surveillance and how to respond when new safety concerns emerge once a product is on the market. The increased attention that the medical technology industry is receiving from FDA leadership that understands the challenging and rapidly

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~~changing~~could ~~nature~~lead ofto ~~the~~new ~~U.S.~~FDA ~~health~~requirements ~~care~~in ~~system creates~~ the ~~possibility~~future ofor ~~unanticipated~~additional ~~regulatory~~product ~~and~~liability or other ~~potential~~litigation ~~changes~~risks, toif any of the Company’s products and ~~its~~associated ~~overall~~services ~~business.~~are considered susceptible to third-party tampering.

Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market.

We are subject to ongoing and pervasive regulatory requirements governing, among other things, the manufacture, marketing, advertising, medical device reporting, sale, promotion, import, export, registration, and listing of devices. For example, we are required to submit periodic reports to the FDA as a condition of 510(k) clearance. These reports include information about failures and certain adverse events associated with the device after its clearance. Failure to submit such reports, or failure to submit the reports in a timely manner, could result in enforcement action by the FDA. Following its review of the periodic reports, the FDA might ask for additional information or initiate further investigation.

The regulations to which we are subject are complex and have become more stringent over time. Regulatory changes could result in restrictions on our ability to continue or expand our operations, higher than anticipated costs, or lower than anticipated sales. Even after we have obtained the proper regulatory clearance to market a device, we have ongoing responsibilities under FDA regulations and applicable foreign laws and regulations. The FDA, state and foreign regulatory authorities have broad enforcement powers. Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions:

•untitled letters or warning letters;

•fines, injunctions, consent decrees and civil penalties;

•recalls, termination of distribution, administrative detention, or seizure of our products;

•customer notifications or repair, replacement or refunds;

•operating restrictions or partial suspension or total shutdown of production;

•delays in or refusal to grant our requests for future clearances or approvals or foreign marketing authorizations of new products, new intended uses, or modifications to existing products;

•withdrawals or suspensions of product clearances or approvals, resulting in prohibitions on sales of our products;

•FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and

•criminal prosecution.

Any of these sanctions could result in higher than anticipated costs or lower than anticipated sales and have a material adverse effect on our reputation, business, financial condition and results of operations. In addition, the FDA or state or foreign authorities may change their clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions, which may prevent or delay clearance or approval of our future products under development on a timely basis. Such policy or regulatory changes could impose additional requirements upon us that could ~~delay our ability to obtain new clearances or approvals, increase the costs of compliance or restrict our ability to maintain any approvals we are able to obtain.~~

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delay our ability to obtain new clearances or approvals, increase the costs of compliance or restrict our ability to maintain any approvals we are able to obtain.

Our products must be manufactured in accordance with federal, state and foreign regulations, and we could be forced to recall our devices or terminate production if we fail to comply with these regulations.

The methods used in, and the facilities used for, the manufacture of our products must comply with the QSR, which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing and shipping of medical devices. As manufacturers of electron radiation-emitting products, we are also responsible for compliance with the radiological health regulations and certain radiation safety performance standards.

Furthermore, we are required to verify that our suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforces the QSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors. Our products are also subject to similar state regulations and various laws and regulations of foreign countries governing manufacturing.

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Our third-party manufacturers may not take the necessary steps to comply with applicable regulations, which could cause delays in the delivery of our products. In addition, failure to comply with applicable FDA or state or foreign requirements or later discovery of previously unknown problems with our products or manufacturing processes could result in, among other things: warning letters or untitled letters; fines, injunctions or civil penalties; suspension or withdrawal of approvals; seizures or recalls of our products; total or partial suspension of production or distribution; administrative or judicially imposed sanctions; the FDA’s refusal to grant pending or future clearances or approvals for our products; clinical holds; refusal to permit the import or export of our products; and criminal prosecution of us, our suppliers or our employees.

Any of these actions could significantly and negatively affect supply of our products. If any of these events occurs, our reputation could be harmed, we could be exposed to product liability claims and we could lose customers and experience reduced sales and increased costs.

We have limited experience in identifying and working with large-scale contracts with medical device manufacturers.

To achieve the levels of production necessary to commercialize the QT Breast Scanner and any other future products or product candidates, we have entered into the Canon Manufacturing Agreement with CMSC for the manufacture of the QT Breast Scanner (and will need to something similar for other future products or product candidates), and by doing so, have secured a large-scale manufacturing agreement with a contract manufacturer that complies with the manufacturing standards prescribed by various federal, state and local regulatory agencies in the U.S. and any other country of use. We have limited experience coordinating and overseeing the manufacturing of medical device products on a large-scale. Manufacturing and control problems could arise as we attempt to commercialize our products and manufacturing may not be completed in a timely manner or at a commercially reasonable cost. In addition, we may not be able to adequately finance the manufacturing and distribution of our products on terms acceptable to us, if at all. If we cannot successfully oversee and finance the manufacturing of our products after receiving regulatory approval, we may not generate sufficient revenue to become profitable.

The misuse or off-label use of our products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.

Advertising and promotion of our existing product, and products under development that obtain approval in the United States may be heavily scrutinized by the FDA, the DOJ, HHS, state attorneys general, members of Congress, and the public. In addition, advertising and promotion of any future product that obtains approval outside of the United States will be heavily scrutinized by comparable foreign regulatory authorities.

The QT Breast Scanner is, and we expect will continue to be, cleared by the requisite regulatory authorities for specific indications. We expect to train our marketing personnel and direct sales force to not promote our devices for uses outside of the FDA-approved indications for use, known as “off-label uses.” We cannot, however, prevent a physician from using our devices off-label, when in the physician’s independent professional medical judgment, he or she deems it appropriate. There may be increased risk of injury to patients if physicians attempt to use our devices off-label. Furthermore, the use of our devices for indications other than those approved by the FDA or approved by any foreign regulatory body may not effectively treat such conditions, which could harm our reputation in the marketplace among healthcare providers and patients.

If the FDA or any state or foreign regulatory body determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter, which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine or criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations. We may become subject to such actions and, if we are not successful in defending against such actions, those actions may have a material adverse effect on our business, financial condition and results of operations. Equivalent laws and potential consequences exist in foreign jurisdictions. 57

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~~patients~~If the FDA or any state or foreign regulatory body determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter, which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine or criminal penalties. AsIt ~~described~~is ~~above~~also possible that other federal, ~~product~~state ~~liability~~or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could ~~divert~~result ~~management’s~~in ~~attention~~significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our ~~core~~operations. ~~business,~~We bemay ~~expensive~~become subject to ~~defend~~such actions and, ~~result~~if inwe ~~sizeable~~are ~~damage~~not ~~awards~~successful in defending against ussuch ~~that~~actions, those actions may ~~not~~have bea ~~covered~~material byadverse ~~insurance~~effect on our business, financial condition and results of operations. Equivalent laws and potential consequences exist in foreign jurisdictions.

In addition, if our products are cleared or approved, healthcare providers may misuse our products or use improper techniques if they are not adequately trained, potentially leading to injury and an increased risk of product liability. If our devices are misused or used with improper technique, we may become subject to costly litigation by our customers or their patients. As described above, product liability claims could divert management’s attention from our core business, be expensive to defend and result in sizeable damage awards against us that may not be covered by insurance.

Our products may cause or contribute to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition and results of operations. The discovery of serious safety issues with our products, or a recall of our products either voluntarily or at the direction of the FDA or another governmental authority, could have a negative impact on us.

Our existing product and products under development that receive clearance or approval will be subject to the FDA’s medical device reporting regulations and similar foreign regulations, which require us to report to the FDA when we receive or become aware of information that reasonably suggests that one or more of our products may have caused or contributed to a death or serious injury or malfunctioned in a way that, if the malfunction were to recur, could cause or contribute to a death or serious injury. The timing of our obligation to report is triggered by the date we become aware of the adverse event as well as the nature of the event. We may fail to report adverse events of which we become aware within the prescribed timeframe. We may also fail to recognize that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of the product. If we fail to comply with our reporting obligations, the FDA or other regulatory bodies could take action, including warning letters, untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, revocation of our device clearance or approval, seizure of our products or delay in clearance or approval of future products.

The FDA and foreign regulatory bodies have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable risk to health. The FDA’s authority to require a recall must be based on a finding that there is reasonable probability that the device could cause serious injury or death. We may also choose to voluntarily recall a product if any material deficiency is found. A government-mandated or voluntary recall by us could occur as a result of an unacceptable risk to health, component failures, malfunctions, manufacturing defects, labeling or design deficiencies, packaging defects or other deficiencies or failures to comply with applicable regulations. Product defects or other errors may occur in the future.

Depending on the corrective action we take to redress a product’s deficiencies or defects, the FDA may require, or we may decide, that we will need to obtain new clearances or approvals for the device before we may market or distribute the corrected device. Seeking such clearances or approvals may delay our ability to replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with our devices, we may face additional regulatory enforcement action, including FDA warning letters, product seizure, injunctions, administrative penalties or civil or criminal fines.

Companies are required to maintain certain records of recalls and corrections, even if they are not reportable to the FDA. We may initiate voluntary withdrawals or corrections for our products in the future that we determine do not require notification of the FDA. If the FDA disagrees with our determinations, it could require us to report those actions as recalls and we may be subject to enforcement action. A future recall announcement could harm our reputation with customers, potentially lead to product liability claims against us and negatively affect our sales. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and financial results.

~~Our QT Breast Scanner technology may become obsolete.~~ 58

Our QT Breast Scanner may become obsolete prior to commercialization by new scientific or technological developments, or by others with new technologies that are more efficient, precise and/or more economical than the QT Breast Scanner or our future product candidates. Any one of our competitors could develop a more effective product which would render our technology obsolete. In addition, it is possible that competitors may use similar technologies, equipment or devices to attempt to create a product similar to the QT Breast Scanner. Further, new technological and scientific developments could cause our QT Breast Scanner and future product candidates to become obsolete. Further developments and innovation in the area of medical imaging could require us to reconfigure the QT Breast Scanner or our future product candidates, which may not be commercially feasible, or cause them to become obsolete. Lastly, our ability to achieve significant and sustained growth in our key target markets will depend upon our success in market penetration, utilization, publication, our reimbursement efforts and medical education. Our products may not remain competitive with products based on new technologies. If we fail to sell products that satisfy our customers’ demands, or respond effectively to new

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~~product~~Our ~~announcements~~QT byBreast ~~our~~Scanner ~~competitors,~~technology ~~then~~may ~~market~~become ~~acceptance of our products could be reduced and our business, results of operations and financial condition could be adversely affected~~obsolete.

Our relationships with customers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Physicians, other healthcare providers, and third-party payors will play a primary role with respect to our current products and any future products for which we obtain marketing approval. Our arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our product. Restrictions under applicable federal and state healthcare laws and regulations include the following:

•The U.S. federal healthcare program Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid. Although there are a number of statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly and practices that involve remuneration to those who prescribe, purchase, or recommend medical devices, including certain discounts, or engaging consultants as speakers or consultants, may be subject to scrutiny if they do not fit squarely within the exemption or safe harbor. Our practices may not in all cases meet all of the criteria for safe harbor protection from anti-kickback liability. Moreover, there are no safe harbors for many common practices, such as educational and research grants. Liability may be established without a person or entity having actual knowledge of the Anti-Kickback Statute or specific intent to violate it. In addition, the government may assert that a claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act. Due to the breadth of these laws, the narrowness of statutory exceptions and regulatory safe harbors available, and the range of interpretations to which they are subject, it is possible that some of our current or future practices might be challenged under one or more of these laws. The Company’s compliance with Medicare and Medicaid regulations may be reviewed by federal or state agencies, including the OIG, CMS, and DOJ, or may be subject to whistleblower lawsuits under federal and state false claims laws.

•The federal civil False Claims Act prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds, or knowingly making, using, or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government. In recent years, several healthcare companies have faced enforcement actions under the federal False Claims Act for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product or causing false claims to be submitted because of the company’s marketing the product for unapproved, and thus non-reimbursable, uses. False Claims Act liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties of tens of thousands of dollars per false claim or statement. Healthcare companies also are subject to other federal false claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs.

•The HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), imposes criminal and civil liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services. In addition, HIPAA, as amended by HITECH, and their respective implementing regulations impose obligations, including mandatory contractual terms, on covered healthcare providers, health plans, as well as their business associates, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.59

•The Physician Payment Sunshine Act, implemented as the Open Payments program, requires manufacturers of certain products reimbursed by Medicare, Medicaid, or the Children’s Health Insurance Program to track and report to the federal government payments and transfers of value that they make to physicians and teaching hospitals, certain other healthcare professionals beginning in 2022, group purchasing organizations, and

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•HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), imposes criminal and civil liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services. In addition, HIPAA, as amended by HITECH, and their respective implementing regulations impose obligations, including mandatory contractual terms, on covered healthcare providers, health plans, as well as their business associates, with respect to safeguarding the privacy, security and transmission of individually identifiable health information. The Physician Payment Sunshine Act, implemented as the Open Payments program, requires manufacturers of certain products reimbursed by Medicare, Medicaid, or the Children’s Health Insurance Program to track and report to the federal government payments and transfers of value that they make to physicians and teaching hospitals, certain other healthcare professionals beginning in 2022, group purchasing organizations, and ownership interests held by physicians and their families, and provides for public disclosures of these data. Manufacturers are required to submit annual reports to the government and failure to do so may result in civil monetary penalties for all payments, transfers of value and ownership or investment interests not reported in an annual submission, and may result in liability under other federal laws and regulations.

•Many states have adopted laws and regulations analogous to the federal laws cited above, including state anti-kickback and false claims laws, which may apply to items or services reimbursed under Medicaid and other state programs or, in several states, regardless of the payer. Several states have enacted legislation requiring medical device companies to, among other things, establish marketing compliance programs; file periodic reports with the state, including reports on gifts and payments to individual health care providers; make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities; and/or register their sales representatives. Some states prohibit specified sales and marketing practices, including the provision of gifts, meals, or other items to certain health care providers.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations involve substantial costs. Additionally, it is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. Exclusion, suspension and debarment from government funded healthcare programs would significantly impact our ability to commercialize, sell or distribute any product. If any of the physicians or other providers or entities with whom we expect to do business are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Changes in laws or regulations relating to data protection, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could materially and adversely affect our business or could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.

We may receive health information and other highly sensitive or confidential information and data of patients and other third parties, which we may compile and analyze. Collection and use of this data might raise privacy and data protection concerns, which could negatively impact our business. There are numerous federal, state and international laws and regulations regarding privacy, data protection, information security, and the collection, storing, sharing, use, processing, transfer, disclosure, and protection of personal information and other data, and the scope of such laws and regulations may change, be subject to differing interpretations, and may be inconsistent among countries and regions we intend to operate in (e.g., the U.S., the European Union and Israel), or conflict with other laws and regulations. The regulatory framework for privacy and data protection worldwide is, and is likely to remain for the foreseeable future, uncertain and complex, and this or other actual or alleged obligations may be interpreted and applied in a manner that we may not anticipate or that is inconsistent from one jurisdiction to another and may conflict with other rules or practices including ours. Further, any significant change to applicable laws, regulations, or industry practices regarding the collection, use, retention, security, or disclosure of data, or their interpretation, or any changes regarding the manner in which the consent of relevant users for the collection, use, retention, or disclosure of such data must be obtained, could increase our costs and require us to modify our services and candidate products, possibly in a material manner, which we may be unable to complete, and may limit our ability to store and process patients’ data or develop new services and features.

In particular, we will be subject to U.S. data protection laws and regulations (i.e., laws and regulations that address privacy and data security) at both the federal and state levels. The legislative and regulatory landscape for data protection continues to evolve, and in recent years there has been an increasing focus on privacy and data security issues. Numerous federal and state laws, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, and disclosure of health-related and other personal information. Failure to comply with such laws and regulations could result in government enforcement actions and create liability for us (including the imposition of significant civil or criminal penalties), private litigation and/or adverse publicity that could negatively affect our business. For instance, California enacted the CCPA on June 28, 2018, which took effect on January 1, 2020. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal data. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability, and many similar laws have been proposed at the federal level and in other states.

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to evolve, and in recent years there has been an increasing focus on privacy and data security issues. Numerous federal and state laws, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, and disclosure of health-related and other personal information. Failure to comply with such laws and regulations could result in government enforcement actions and create liability for us (including the imposition of significant civil or criminal penalties), private litigation and/or adverse publicity that could negatively affect our business. For instance, California enacted the CCPA on June 28, 2018, which took effect on January 1, 2020. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal data. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability, and many similar laws have been proposed at the federal level and in other states.

In addition, we expect to obtain health information that is subject to privacy and security requirements under HITECH and its implementing regulations. The privacy standards and security standards under HIPAA establish a set of standards for the protection of individually identifiable health information by health plans, health care clearinghouses and certain health care providers, (collectively referred to as “Covered Entities”), and the business associates with whom Covered Entities enter into service relationships pursuant to which individually identifiable health information may be exchanged. Notably, whereas HIPAA previously directly regulated only Covered Entities, HITECH makes certain of HIPAA’s privacy and security standards also directly applicable to Covered Entities’ business associates. As a result, both Covered Entities and business associates are now subject to significant civil and criminal penalties for failure to comply with privacy standards and security standards. As part of our normal operations, we expect to collect, process and retain personal identifying information regarding patients, including as a business associate of Covered Entities, so we expect to be subject to HIPAA, including changes implemented through HITECH, and we could be subject to criminal penalties if we knowingly obtain or disclose individually identifiable health information in a manner that is not authorized or permitted by HIPAA. A data breach affecting sensitive personal information, including health information, also could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business.

HIPAA requires Covered Entities (like many of our potential customers) and business associates, like us, to develop and maintain policies and procedures with respect to protected health information that is used or disclosed, including the adoption of administrative, physical and technical safeguards to protect such information. HITECH expands the notification requirement for breaches of patient-identifiable health information, restricts certain disclosures and sales of patient-identifiable health information and provides for civil monetary penalties for HIPAA violations. HITECH also increased the civil and criminal penalties that may be imposed against Covered Entities and business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and its implementing regulations and seek attorney’s fees and costs associated with pursuing federal civil actions. Additionally, certain states have adopted comparable privacy and security laws and regulations, some of which may be more stringent than HIPAA.

Internationally, many jurisdictions have or are considering enacting privacy or data protection laws or regulations relating to the collection, use, storage, transfer, disclosure and/or other processing of personal data, as well as certification requirements for the hosting of health data specifically. Such laws and regulations may include data hosting, data residency or data localization requirements (which generally require that certain types of data collected within a certain country be stored and processed within that country), data export restrictions, international transfer laws (which prohibit or impose conditions upon the transfer of such data from one country to another), or may require companies to implement privacy or data protection and security policies, enable users to access, correct and delete personal data stored or maintained by such companies, inform individuals of security breaches that affect their personal data or obtain individuals’ consent to use their personal data. For example, European legislators adopted the GDPR, which became effective on May 25, 2018, and are now in the process of finalizing the ePrivacy Regulation to replace the European ePrivacy Directive (Directive 2002/58/EC as amended by Directive 2009/136/EC). The GDPR, supplemented by national laws and further implemented through binding guidance from the European Data Protection Board, imposes more stringent European Union data protection requirements and provides for significant penalties for noncompliance. Further, the United Kingdom’s initiating a process to leave the European Union has created uncertainty with regard to the regulation of data protection in the United Kingdom. In particular, the United Kingdom has brought the GDPR into domestic law with the Data Protection Act of 2018 which will remain in force, even if and when the United Kingdom leaves the European Union.

Virtually every jurisdiction in which we expect to operate has established its own data security and privacy legal framework with which we must, and our target customers will need to, comply, including the rules and regulation mentioned above. We may also need to comply with varying and possibly conflicting privacy laws and regulations in other jurisdictions. As a result, we could face regulatory actions, including significant fines or penalties, adverse publicity and possible loss of business.

In addition, there are ongoing public policy discussions regarding whether the standards for de-identified, anonymous or pseudonymized health information are sufficient to adequately protect patient privacy. These discussions may lead to further restrictions on the use or disclosure of such information. We use a third party service provider to de-identify PHI that parties with which we work receive and may make available to us. There can be no assurance that the policy initiatives or future initiatives will not adversely affect our ability to access and use data or to develop or market current or future services, or that the third party service providers that we use to de-identify PHI will do so in a manner that is deemed compliant with any regulatory standards that currently exist or are developed in the future. There is also a risk that the third parties that license us data and enable us to receive de-identified PHI may fail to properly de-identify PHI under HIPAA or personal data under applicable state or other privacy laws, some of which may impose different standards for de-61

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While we are preparing to implement various measures intended to enable us to comply with applicable privacy or data protection laws, regulations and contractual obligations, these measures may not always be effective and do not guarantee compliance. Any failure or perceived failure by us to comply with our contractual or legal obligations or regulatory requirements relating to privacy, data protection, or information security may result in governmental investigations or enforcement actions, litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our customers, partners or patients to lose trust in us, and otherwise materially and adversely affect our reputation and business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to the businesses of our customers or partners may limit the adoption and use of, and reduce the overall demand for, our products and services. Additionally, if third parties we work with violate applicable laws, regulations, or agreements, such violations may put the data we have received at risk, could result in governmental investigations or enforcement actions, fines, litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our customers, partners or patients to lose trust in us, and otherwise materially and adversely affect our reputation and business. Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks.

Any restrictions on our ability to obtain or use data could harm our business.

Our business processes personal data, including some data related to health. When conducting clinical trials, we face risks associated with collecting trial participants’ data, especially health data, in a manner consistent with applicable laws and regulations. Any errors or defects in any third-party data or other technology could result in errors in our existing and future solutions that could harm our business and damage our reputation and cause losses in revenue, and we could be required to spend significant amounts of additional resources to fix any problems.

We may also face headwinds with limitations on the use of data in current customer contracts. We are currently evaluating those limitations and may need to renegotiate current contracts and negotiate future contracts to allow broader use of data to launch this initiative. Also, healthcare regulations concerning personal health information, including but not limited to HIPAA, HITECH, 42 CFR Part II, and their State law equivalents such as the ~~California Consumer Privacy Act (the “~~CCPA”), as recently amended and expanded by the California Privacy Rights Act (the “CPRA”), could have a significant effect on the manner in which we must handle healthcare related data, and the costs of complying with such standards could be significant.

If we do not obtain and maintain international regulatory registrations, clearances or approvals for our products, we will be unable to market and sell our products outside of the United States.

Sales of our products outside of the United States are subject to foreign regulatory requirements that vary widely from country to country. Approval procedures vary among countries and can involve additional testing. The time required to obtain approval outside of the United States may differ substantially from that required to obtain FDA approval. In addition, the FDA regulates exports of medical devices from the United States. While the regulations of some countries may not impose barriers to marketing and selling our products or only require notification, others require that we obtain the clearance or approval of a specified regulatory body. Complying with foreign regulatory requirements, including obtaining registrations, clearances or approvals, can be expensive and time-consuming, and we may not receive regulatory clearances or approvals in each country in which we plan to market our products or we may be unable to do so on a timely basis. The time required to obtain registrations, clearances or approvals, if required by other countries, may be longer than that required for FDA clearance or approval, and requirements for such registrations, clearances or approvals may significantly differ from FDA requirements. If we modify our products, we may need to apply for additional regulatory clearances or approvals before we are permitted to sell the modified product. In addition, we may not continue to meet the quality and safety standards required to maintain the authorizations that we have received. If we are unable to maintain our authorizations in a particular country, we will no longer be able to sell the applicable product in that country.

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~~failure~~differ orfrom ~~delay~~FDA inrequirements. ~~obtaining~~If ~~registration~~we ormodify our products, we may need to apply for additional regulatory ~~clearance~~clearances or ~~approval~~approvals inbefore ~~one~~we ~~country~~are permitted to sell the modified product. In addition, we may not continue to meet the quality and safety standards required to maintain the authorizations that we have received. If we are unable to maintain our authorizations in a ~~negative~~particular ~~effect~~country, onwe will no longer be able to sell the ~~regulatory~~applicable ~~process~~product in ~~others~~that country.

Regulatory clearance or approval by the FDA does not ensure registration, clearance or approval by regulatory authorities in other countries, and registration, clearance or approval by one or more foreign regulatory authorities does not ensure registration, clearance or approval by regulatory authorities in other foreign countries or by the FDA. However, a failure or delay in obtaining registration or regulatory clearance or approval in one country may have a negative effect on the regulatory process in others.

Legislative or regulatory reforms in the United States or the EU may make it more difficult and costly for us to obtain regulatory clearances or approvals for our products or to manufacture, market or distribute our products after clearance or approval is obtained.

From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the regulation of medical devices. In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions, which may prevent or delay approval or clearance of our future products under development or impact our ability to modify our currently cleared products on a timely basis. Over the last several years, the FDA has proposed reforms to its 510(k) clearance process, and such proposals could include increased requirements for clinical data and a longer review period, or could make it more difficult for manufacturers to utilize the 510(k) clearance process for their products. For example, in November 2018, FDA officials announced forthcoming steps that the FDA intends to take to modernize the premarket notification pathway under Section 510(k) of the FDCA. Among other things, the FDA announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates. These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k) clearance pathway, and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate devices that are more than 10 years old. In May 2019, the FDA solicited public feedback on these proposals. The FDA requested public feedback on whether it should consider certain actions that might require new authority, such as whether to sunset certain older devices that were used as predicates under the 510(k) clearance pathway. These proposals have not yet been finalized or adopted, and the FDA may work with Congress to implement such proposals through legislation. Accordingly, it is unclear the extent to which any proposals, if adopted, could impose additional regulatory requirements on us that could delay our ability to obtain new 510(k) clearances, increase the costs of compliance, or restrict our ability to maintain our current clearances, or otherwise create competition that may negatively affect our business.

More recently, in September 2019, the FDA finalized guidance describing an optional “safety and performance based” premarket review pathway for manufacturers of “certain, well-understood device types” to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety and performance criteria established by the FDA, thereby obviating the need for manufacturers to compare the safety and performance of their medical devices to specific predicate devices in the clearance process. The FDA intends to develop and maintain a list device types appropriate for the “safety and performance based” pathway and will continue to develop product-specific guidance documents that identify the performance criteria for each such device type, as well as the testing methods recommended in the guidance documents, where feasible. The FDA may establish performance criteria for classes of devices for which we or our competitors seek or currently have received clearance, and it is unclear the extent to which such performance standards, if established, could impact our ability to obtain new 510(k) clearances or otherwise create competition that may negatively affect our business.

In addition, FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. Any new statutes, regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of any future products or make it more difficult to obtain clearance or approval for, manufacture, market or distribute our products. We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our business in the future. Such changes could, among other things, require: additional testing prior to obtaining clearance or approval; changes to manufacturing methods; recall, replacement or discontinuance of our products; or additional record keeping.

The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be promulgated that could prevent, limit or delay regulatory clearance or approval of our future products. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval or clearance that we may have obtained and we may not achieve or sustain profitability.

On April 5, 2017, the European Parliament passed the MDR (Regulation 2017/745), which repeals and replaces the EU Medical Devices Directive. Unlike directives, which must be implemented into the national laws of the European Economic Area (EEA) Member States, the regulations would be directly applicable, i.e., without the need for adoption of EEA member state laws implementing them, in all EEA Member States and are intended to eliminate current differences in the regulation of medical devices among EEA Member States. The MDR, among other things, is intended to establish a 63

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~~uniform,~~of ~~transparent~~new requirements or policies, ~~predictable~~or ~~and~~if ~~sustainable~~we are not able to maintain regulatory ~~framework~~compliance, ~~across~~we ~~the~~may ~~EEA~~lose ~~for~~any ~~medical~~marketing ~~devices~~approval ~~and~~or ~~ensure~~clearance athat ~~high~~we ~~level~~may ofhave ~~safety~~obtained and ~~health~~we ~~while~~may ~~supporting~~not ~~innovation~~achieve or sustain profitability.

On April 5, 2017, the European Parliament passed the MDR (Regulation 2017/745), which repeals and replaces the EU Medical Devices Directive. Unlike directives, which must be implemented into the national laws of the EEA Member States, the regulations would be directly applicable, i.e., without the need for adoption of EEA member state laws implementing them, in all EEA Member States and are intended to eliminate current differences in the regulation of medical devices among EEA Member States. The MDR, among other things, is intended to establish a uniform, transparent, predictable and sustainable regulatory framework across the EEA for medical devices and ensure a high level of safety and health while supporting innovation.

The MDR become applicable three years after publication (in 2020). The new regulations will, among other things:

•strengthen the rules on placing devices on the market and reinforce surveillance once they are available;

•establish explicit provisions on manufacturers’ responsibilities for follow-up regarding the quality, performance and safety of devices placed on the market;

•improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number;

•set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and

•strengthened rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.

These modifications may have an effect on the way we conduct our business in the EEA.

Healthcare reform laws could adversely affect our products and financial condition.

During the past several years, the U.S. healthcare industry has been subject to an increase in governmental regulation at both the federal and state levels. Efforts to control healthcare costs, including limiting access to care, alternative delivery models and changes in the methods used to determine reimbursement scenarios and rates, are ongoing at the federal and state government levels.

In March 2010, former President Obama signed into law the ACA, which included measures that significantly changed the way healthcare is financed by both governmental and private insurers. While a primary goal of these healthcare reform efforts was to expand coverage to more individuals, it also involved additional regulatory mandates and other measures designed to constrain medical costs. The ACA significantly impacts the medical device industry. Among other things, the ACA:

•imposes an annual excise tax of 2.3% on any entity that manufactures or imports medical devices offered for sale in the United States, which, through a series of legislative amendments, was suspended, effective January 1, 2016 and subsequently repealed altogether on December 20, 2019;

•establishes a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research; and

•implements Medicare payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.

In addition, the ACA and related healthcare reform laws, regulations and initiatives have significantly increased regulation of managed care plans and decreased reimbursement under Medicare managed care. Moreover, to alleviate budget shortfalls, states have reduced or frozen payments to Medicaid managed care plans. We cannot accurately predict the complete impact of these healthcare reform initiatives, but they could lead to a decreased demand for medical devices and other outcomes that could adversely impact our business and financial results.

Some of the provisions of the ACA have yet to be fully implemented, and certain provisions have been subject to judicial and congressional challenges. In addition, there have been efforts by the Trump administration to repeal or replace certain aspects of the ACA and to alter the implementation of the ACA and related laws. For example, the TCJA enacted on December 22, 2017, eliminated the shared responsibility payment for individuals who fail to maintain minimum essential coverage under Section 5000A of the Internal Revenue Code of 1986, commonly referred to as the “individual mandate,” effective January 1, 2019. On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, or the Texas District Court Judge, ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the Tax Cuts and Jobs Act, the remaining provisions of the ACA are invalid as well. This decision was subsequently appealed, and on December 18, 2019, the U.S. Court of Appeals for the Fifth Circuit affirmed the decision of the district court that the individual mandate, as amended by the TCJA, was unconstitutional. The Fifth Circuit remanded the case to the district court to consider a remedy, including to consider and explain which

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December 22, 2017, eliminated the shared responsibility payment for individuals who fail to maintain minimum essential coverage under Section 5000A of the Internal Revenue Code of 1986, commonly referred to as the “individual mandate,” effective January 1, 2019. On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, or the Texas District Court Judge, ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the Tax Cuts and Jobs Act, the remaining provisions of the ACA are invalid as well. This decision was subsequently appealed, and on December 18, 2019, the U.S. Court of Appeals for the Fifth Circuit affirmed the decision of the district court that the individual mandate, as amended by the TCJA, was unconstitutional. The Fifth Circuit remanded the case to the district court to consider a remedy, including to consider and explain which provisions of the ACA are inseverable and invalid. It is unclear how this litigation, including all future hearings and appeals, and other efforts to challenge, repeal or replace the ACA, or portions thereof, will affect our future products or our business. It is possible that the ACA, as currently enacted or as it may be amended in the future, and other healthcare reform measures that may be adopted in the future, could have an adverse effect on our industry generally and on our ability to commercialize our future products and achieve profitability.

Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.

The ability of the FDA to review and clear or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the FDA have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new medical devices or modifications to cleared or approved medical devices to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

Separately, in response to the COVID-19 pandemic, on March 10, 2020 the FDA announced its intention to postpone most inspections of foreign manufacturing facilities, and on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities. Subsequently, on July 10, 2020 the FDA announced its intention to resume certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system. The FDA intends to use this risk-based assessment system to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory activities. Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic. If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Consolidation in the U.S. healthcare industry may negatively impact our results of operations.

In recent years, U.S. healthcare industry participants, including distributors, manufacturers, suppliers, healthcare providers, insurers and pharmacy chains, have consolidated or formed strategic alliances. Consolidations create larger enterprises with greater negotiating power, and also could result in the possible loss of a customer where the combined enterprise selects one distributor from two incumbents. If this consolidation trend continues, it could adversely affect our results of operations.

Failure to comply with anti-bribery and anti-corruption laws could subject us to penalties and other adverse consequences.

Since we may operate and sell our products around the world, we will be subject to the United States Foreign Corrupt Practices Act (the “FCPA”), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the United States Travel Act, and other anti-corruption and anti-bribery laws and regulations in the jurisdictions in which we currently or may do business, both domestic and abroad. These laws and regulations generally prohibit improper payments or offers of ~~improper payments to government officials, political parties, or commercial partners for the purpose of obtaining or retaining business or securing an improper business advantage.~~

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agents. We and our third-party business partners, representatives, and agents may have direct or indirect interactions with officials and employees of government agencies, or state-owned or affiliated entities and we may be held liable for the corrupt or other illegal activities of our employees or such third parties even if we do not explicitly authorize such activities. The FCPA or other applicable laws and regulations also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent improper payments. ~~While we have implemented policies and procedures~~ to ~~address~~government ~~compliance with such laws~~officials, wepolitical ~~cannot assure you that our employees or other third~~ parties, ~~working on our behalf will not engage in conduct in violation of our policies~~ or ~~applicable~~commercial ~~law~~partners for ~~which we might ultimately be held responsible. Violations of~~ the ~~FCPA~~purpose ~~and other applicable anti-corruption laws may result in whistleblower complaints, adverse media coverage, investigations, imposition~~ of ~~significant~~obtaining ~~legal fees, loss of export privileges, as well as severe criminal~~ or ~~civil~~retaining ~~sanctions,~~business ~~including suspension~~ or ~~debarment~~securing ~~from~~an ~~U.S.~~improper ~~government contracting, and we may be subject to other liabilities and adverse effects on our reputation, which could negatively affect our~~ business, ~~results of operations, financial condition, and growth prospects~~advantage. In addition, responding to any enforcement action may result in a significant diversion of management’s attention and resources and significant legal defense costs and other professional fees. Our exposure for violating these laws increases as our non-U.S. presence expands and as we increase sales and operations in foreign jurisdictions.

Corruption issues pose a risk in every country and jurisdiction, but in many countries, particularly in countries with developing economies, it may be more common for businesses to engage in practices that are prohibited by the FCPA or other applicable laws and regulations, and our activities in these countries pose a heightened risk of unauthorized payments or offers of payments by one of our employees or third-party business partners, representatives, and agents that could be in violation of various laws including the FCPA. The FCPA and other applicable anti-bribery and anti-corruption laws also may hold us liable for acts of corruption and bribery committed by our third-party business partners, representatives, and agents. We and our third-party business partners, representatives, and agents may have direct or indirect interactions with officials and employees of government agencies, or state-owned or affiliated entities and we may be held liable for the corrupt or other illegal activities of our employees or such third parties even if we do not explicitly authorize such activities. The FCPA or other applicable laws and regulations also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent improper payments. While we have implemented policies and procedures to address compliance with such laws, we cannot assure you that our employees or other third parties working on our behalf will not engage in conduct in violation of our policies or applicable law for which we might ultimately be held responsible. Violations of the FCPA and other applicable anti-corruption laws may result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, as well as severe criminal or civil sanctions, including suspension or debarment from U.S. government contracting, and we may be subject to other liabilities and adverse effects on our reputation, which could negatively affect our business, results of operations, financial condition, and growth prospects. In addition, responding to any enforcement action may result in a significant diversion of management’s attention and resources and significant legal defense costs and other professional fees. Our exposure for violating these laws increases as our non-U.S. presence expands and as we increase sales and operations in foreign jurisdictions.

Changes in accounting principles or their application to us could result in unfavorable accounting charges or effects, which could adversely affect our results of operations and growth prospects.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). In particular, we make certain estimates and assumptions related to the adoption and interpretation of these principles including the recognition of our revenue and the accounting of our stock-based compensation expense with respect to our consolidated financial statements. If these assumptions turn out to be incorrect, our financial results could materially differ from our expectations and could be materially adversely affected. A change in any of these principles or guidance, or in their interpretations or application to us, may have a significant effect on our reported results, as well as our processes and related controls, and may retroactively affect previously reported results or our forecasts, which may negatively impact our consolidated financial statements.

If our judgments or estimates relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our results of operations could fall below expectations of securities analysts and investors, resulting in a decline in our stock price.

The preparation of our consolidated financial statements in conformity with GAAP requires management to make judgments, estimates, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” the results of which form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock. Significant judgments, estimates, and assumptions used in preparing our consolidated financial statements include, or may in the future include, those related to revenue recognition, stock-based compensation, intangible assets, including goodwill, and income taxes.

We could be subject to additional tax liabilities.

We are subject to federal, state, and local income taxes in the US. Determining our provision for income taxes requires significant management judgment, and the ultimate tax outcome may be uncertain. In addition, our provision for income taxes is subject to volatility and could be adversely affected by many factors, including, among other things, changes to our operating or holding structure, changes in the amounts of earnings in jurisdictions with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in U.S. tax laws. Tax authorities may disagree with our calculation of research and development tax credits, cross-jurisdictional transfer pricing, or other matters and assess additional taxes, interest, or penalties. While we regularly assess the likely outcomes of these examinations to determine the adequacy of our provision for income taxes and we believe that our financial statements reflect adequate reserves to cover any such contingencies, there can be no assurance that the outcomes of such examinations will not have a material impact on our results of operations and cash flows. If tax authorities change applicable tax laws, our overall taxes could increase, and our financial condition or results of operations may be adversely impacted.

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~~Risks~~with ~~Related~~our calculation of research and development tax credits, cross-jurisdictional transfer pricing, or other matters and assess additional taxes, interest, or penalties. While we regularly assess the likely outcomes of these examinations to determine the adequacy of our ~~Intellectual~~provision ~~Property~~for income taxes and we believe that our financial statements reflect adequate reserves to cover any such contingencies, there can be no assurance that the outcomes of such examinations will not have a material impact on our results of operations and cash flows. If tax authorities change applicable tax laws, our overall taxes could increase, and our financial condition or results of operations may be adversely impacted.

Risks Related to Our Intellectual Property

It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.

We rely upon a combination of patents and trade secrets to protect the intellectual property related to our proprietary technologies. Our success depends significantly on our ability to obtain and maintain intellectual property protection with respect to our technology and products. Patents and other proprietary rights provide uncertain protections, and we may be unable to protect our intellectual property for reasons including those that result from complex factual and legal issues such as those that create uncertainty as to the validity, scope and enforceability of any particular patent that we hold or for which we have applied. As a result, we may be unsuccessful in defending our patents and other proprietary rights against third-party challenges, which could have a material adverse effect on our business.

Our company uses a combination of patents, trademarks and copyrights to protect our intellectual property. Although we currently have active U.S. and European patents and patents pending with the U.S. Patent & Trademark Office and have filed to obtain patent coverage for our technology in the UK, France, Germany, Italy, Netherlands and Spain, there are aspects of the technology for which patent coverage may never be sought or received. Additionally, we may in the future obtain, certain intellectual property related to our technology from third parties, and we cannot be certain that such third parties took the necessary actions to maintain such rights or that the transfer of such rights to us was proper and effective. We may, as a result, be subject to claims challenging the ownership or enforceability of such rights. Furthermore, we may not possess the resources to, or for other reasons may not choose to, pursue patent protection on every invention or in any or every country where we may eventually decide to sell our future products. Our ability to prevent others from making or selling duplicate or similar technologies will be impaired for those technologies with respect to which, and in those countries where, we have no patent protection. In addition, there is no assurance that all potentially relevant prior art relating to our patents and patent applications has been found, which can prevent a patent from issuing from a pending patent application or later invalidate or narrow the scope of an issued patent. Even if patents do successfully issue and even if such patents cover our technology, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, invalidated, or held unenforceable. Any successful challenge to these patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of our technology.

In addition, for patents that do issue based on our applications or future applications, any issued patents may not provide us with any competitive advantages. Competitors may be able to design around our patents and develop products that provide outcomes comparable or superior to ours. Any changes we make to our product or any future products, including designs that may be required for commercialization or that cause them to have what we view as more advantageous properties, may not be covered by patents and patent applications we have licensed or own, and we may be required to file new applications and/or seek other forms of protection for any such altered products if any such protection is available. In addition, the patent prosecution process is expensive, time-consuming and complicated, and we and our current or future licensors, licensees or collaborators may not be able to prepare, file, prosecute and maintain all necessary or desirable patents or patent applications at a reasonable cost or in a timely manner. It is also possible that we or our current or future licensors, licensees or collaborators will fail to identify patentable aspects of inventions before it is too late to obtain patent protection for them. In addition, if we choose to and are able to secure patent protection in countries outside the U.S., the laws of some foreign countries may not protect our intellectual property rights to the same extent as do the laws of the United States. For instance, the legal systems of some countries, including India, China and other developing countries, do not favor the enforcement of patents and other intellectual property rights. This could make it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights.

Some countries also have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, some countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired.

Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our inventions and enforce our intellectual property rights, and more generally could affect the value of our intellectual property. Our efforts to seek patent protection for our technology could be negatively impacted by any such changes, which could have a material adverse effect on our existing patent rights and our ability to protect and enforce our intellectual property in the future. In particular, our ability to stop third parties from making, using, selling, offering to sell or importing products that infringe our intellectual property will depend in part on our success in obtaining and enforcing patent claims that cover our technology, inventions and improvements. 67

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We may come to believe that third parties are infringing on, or otherwise violating, our patents or other proprietary rights. To prevent infringement or unauthorized use, we may need to file infringement and/or misappropriation suits, which are very expensive and time-consuming, could result in meritorious counterclaims against us and would distract management’s attention. Also, in an infringement or misappropriation proceeding, a court may decide that one or more of our patents is invalid, unenforceable, or both, in which case third parties may be able to use our technology without paying license fees or royalties. Even if the validity of our patents is upheld, a court may refuse to stop the other party from using the technology at issue on the grounds that the other party’s activities are not covered by our patents.

In addition to patents, we rely on trade secrets to protect our technology; however, the policies we use to protect our trade secrets may not be effective in preventing misappropriation of our trade secrets by others. In addition, confidentiality agreements executed by our employees, consultants and advisors may not be enforceable or may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or disclosure. Litigating a trade secret claim is expensive and time consuming, and the outcome may be unexpected. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop knowledge, methods and know-how that allow them to create substantially similar products or services without misappropriating our trade secrets. If we are unable to protect our trade secrets, we may be unable to prevent competitors from using our own inventions and intellectual property to compete against us, and our business may be harmed.

If we are unable to protect or enforce our patents or other proprietary rights, or if we become subject to claims or litigation alleging infringement of the patents or other proprietary rights of others, our competitiveness and business prospects may be materially damaged.

Patent and other proprietary rights are essential to our business. Our success depends to a significant degree on our ability to obtain and enforce patents and licenses to patent rights, both in the United States and in other countries. We cannot guarantee that our pending patent applications, or any future patent applications, will result in issued patents, our patents issued or licensed will not be challenged or circumvented by competitors, our patents will not be found to be invalid or the intellectual property rights of others will not prevent us from selling certain products or including key features in our products.

The patent position of a healthcare company is often uncertain and involves complex legal and factual questions. Significant litigation concerning patents and products is pervasive in our industry. Patent claims include challenges to the coverage and validity of our patents on products or processes as well as allegations that our products infringe patents held by competitors or other third parties. An unfavorable litigation outcome in any of these types of cases could result in a loss of patent protection or the ability to market products, which could lead to a significant loss of sales, or otherwise materially affect our business, results of operations, financial condition and cash flows. We also rely on trademarks, copyrights, trade secrets and know-how to develop, maintain and strengthen our competitive positions. Third parties may know, discover or independently develop equivalent proprietary information or techniques, or they may gain access to our trade secrets or publicly disclose our trade secrets.

Although our employees, consultants, parties to collaboration agreements and other business partners are generally subject to confidentiality or similar agreements to protect our confidential and proprietary information, these agreements may be breached, and we may not have adequate remedies for any breach. To the extent that our employees, consultants, parties to collaboration agreements and other business partners use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Furthermore, our intellectual property, proprietary technology and sensitive company data is potentially vulnerable to loss, damage and misappropriation from system malfunction, computer viruses and unauthorized access to our data or misappropriation or misuse thereof by those with permitted access and other events. While we have invested to protect our intellectual property, confidential information and other data, and continue to work diligently in this area, there can be no assurance that our precautionary measures have prevented or will prevent future breakdowns, breaches, cyber incidents or other events. Any of the events referenced above could have a material adverse effect on our reputation, business, results of operations, financial condition and cash flows.

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Patent terms may be inadequate to protect our competitive position on our future products for an adequate amount of time.

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our future products are obtained, once the patent life has expired, we may be open to competition from competitive products.

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Given the amount of time required for the development, testing and regulatory review of new products, patents protecting our future products might expire before or shortly after we or our future partners commercialize those products. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours for a sufficient amount of time, and, as a result, we may not be able to obtain adequate protection from our patent portfolio against competition, in spite of the time and effort invested in the commercialization of our future products.

Claims that our technology or our future products or the sale or use of our future products infringe the patents or other intellectual property rights of third parties could result in costly litigation or could require substantial time and money to resolve, even if litigation is avoided.

Because our industry is characterized by competing intellectual property, we may be subject to legal actions for violating the intellectual property rights of others, including claims that former employees, collaborators or third parties have an interest in our patents, trade secrets or other intellectual property. For example, we may have inventorship or ownership disputes arising from conflicting obligations of employees, consultants or others who are involved in developing our technology or our products.

We also may be required to participate in interference, derivation or opposition proceedings that concern disputes regarding priority of inventions disclosed in our patents. Determining whether a product infringes a patent, as well as priority of inventions and other patent-related disputes, involves complex legal and factual issues and the outcome is often uncertain. We have not conducted any significant search of patents issued to third parties, and third-party patents containing claims covering our technology or methods that predate our patents may exist. Because of the number of patents issued and patent applications filed in our technical areas or fields (including some pertaining specifically to medical imaging technologies), our competitors or other third parties may assert that our technology and the methods we employ in the use of products incorporating our technology are covered by United States or foreign patents held by them. In addition, because patent applications can take many years to issue and because publication schedules for pending applications vary by jurisdiction, there may be applications now pending of which we are unaware, and which may result in issued patents that our technology or other future products would infringe. Also, because the claims of published patent applications can change between publication and patent grant, there may be published patent applications that may ultimately issue with claims that we infringe.

As the number of competitors in the market for medical imaging technologies increases, and as the number of patents issued in this area grows, the possibility of patent infringement claims against us increases. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can, including if they have substantially greater resources. Defending against such litigation is costly and time consuming, and would distract our management from our business. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

In the event that we become subject to a patent infringement or other intellectual property lawsuit and if the relevant patents or other intellectual property were upheld as valid and enforceable and we were found to infringe or violate those rights or the terms of a license to which we are a party, we could be prevented from selling any infringing products of ours unless we could obtain a license or were able to redesign the product to avoid infringement. If we were unable to obtain a license or successfully redesign, we might be prevented from selling our technology or other future products. If we are able to redesign, we may need to invest substantial resources in the redesign process. If there is an allegation or determination that we have infringed the intellectual property rights of a competitor or other person, we may be required to pay damages, or a settlement or ongoing royalties, or we may be required to enter into cross-licenses with our competitors. In any of these circumstances, we may be unable to sell our products at competitive prices or at all, and our business, financial condition, results of operations and prospects could be harmed.

In addition, we may be required to indemnify our customers and distributors against claims relating to the infringement of intellectual property rights of third parties related to our products. Third parties may assert infringement claims against our customers or distributors. These claims may require us to initiate or defend protracted and costly litigation on behalf of our customers or distributors, regardless of the merits of these claims. If any of these claims succeed, we may be forced to pay damages on behalf of our customers or distributors, or may be required to obtain licenses for the products or services they use. If we cannot obtain all necessary licenses on commercially reasonable terms, our distributors may be forced to stop distributing our products or services, and our customers may be forced to stop using our products or services.

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~~developments~~customers or distributors, ~~which~~regardless ~~could~~of ~~have~~the amerits ~~material~~of ~~adverse~~these ~~effect~~claims. onIf ~~the~~any ~~price~~of these claims succeed, we may be forced to pay damages on behalf of our ~~common~~customers ~~stock~~or distributors, or may be required to obtain licenses for the products or services they use. If ~~securities~~we ~~analysts~~cannot orobtain ~~investors~~all ~~perceive~~necessary ~~these~~licenses ~~results~~on tocommercially bereasonable ~~negative~~terms, itour ~~could~~distributors ~~have~~may abe ~~material~~forced ~~adverse~~to ~~effect~~stop ondistributing ~~the~~our ~~price~~products ofor services, and our ~~common~~customers ~~stock~~may be forced to stop using our products or services.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during discovery. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments, which could have a material adverse effect on the price of our common stock. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.

Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated if we or our future licensors do not comply with these requirements.

Periodic maintenance fees, renewal fees, annuity fees and various other government fees on a patent and patent application are due to be paid to the patent offices and agencies in several stages over the lifetime of the patent and patent application. The U.S. Patent and Trademark Office and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. In certain circumstances, we may be required to rely on our licensing partners to take the necessary action to comply with these requirements with respect to patents or other intellectual property they have licensed to us. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance, which could include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents, can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors may be able to enter the market and compete with our products, which would have a material adverse effect on our business.

We may be subject to claims that our employees, consultants or advisers have wrongfully used or disclosed alleged trade secrets of their former employers or claims asserting ownership of what we regard as our own intellectual property.

Many of our employees, consultants and advisers, including our senior management, were previously employed at other companies that may have proprietary rights related to our business. Some of these employees, consultants and advisers, including members of our senior management, executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment. Although we try to ensure that such individuals do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s former employer. We are not aware of any such disclosures, or threatened or pending claims related to these matters, but in the future, litigation may be necessary to defend against such claims. If we fail in defending any such claims, we may lose valuable intellectual property rights or personnel, in addition to possibly paying monetary damages and being enjoined from conducting our business as contemplated. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

Additionally, a licensor, collaborator, employee, consultant, adviser or other third party may dispute our or our licensor’s ownership of certain intellectual property rights. We seek to address these concerns in our contractual agreements; however, we may not have contractual arrangements with the party in question and/or such provisions may not be effective. If these provisions prove to be ineffective, we may not be able to achieve our business objectives. If we or our licensors fail in defending any such claims, we may have to pay monetary damages and may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property, which could adversely impact our business, financial condition and results of operations.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our registered and unregistered trademarks or trade names are valuable assets and may be challenged, infringed, circumvented or declared generic or determined to infringe third party’s marks. We may not be able to protect our rights to these trademarks and trade names, which may be necessary to build name recognition among potential collaborators or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our unregistered trademarks or trade names. We have not conducted any registrability studies for possible future trademarks to assess whether such marks would be successfully registered. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. In addition, we may license our trademarks and trade names to third parties, such as distributors. Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names. Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property

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variations of our unregistered trademarks or trade names. We have not conducted any registrability studies for possible future trademarks to assess whether such marks would be successfully registered. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. In addition, we may license our trademarks and trade names to third parties, such as distributors. Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names. Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and adversely affect our competitive position, business, financial condition, results of operations and prospects.

Our rights to develop and commercialize our products may be subject to the terms and conditions of licenses and sublicenses granted to us by third parties.

We rely on licenses and sublicenses to certain patent rights and other intellectual property from third parties that are important or necessary to the development of our products, including the software modules and cloud software that are integrated into the QT Breast Scanner and products and services. These and other licenses may not provide exclusive rights to use such intellectual property in all relevant fields of use and in all territories in which we may wish to develop or commercialize our products and the underlying patents may fail to provide the intended exclusivity. As a result, we may not be able to prevent competitors from developing and commercializing competitive products in the markets that we hope to address. Moreover, we would not own at least some of the underlying intellectual property rights related to these products, and as a result our rights would be subject to the continuation and compliance with the terms of those agreements. If such in-licenses were terminated, competitors would have the freedom to develop, seek regulatory approval of, and to market, products similar or identical to ours.

In addition, these license agreements may not grant us the right to control the preparation, filing, prosecution or maintenance of patents and patent applications covering our products. Therefore, we cannot be certain that these patents and patent applications will be prepared, filed, prosecuted or maintained in a manner consistent with the best interests of our business. If our current or future licensing partners fail to file, prosecute or maintain such patents, including the payment of applicable fees, or otherwise lose rights to those patents or patent applications, the intellectual property we have licensed or exclusivity we have been granted may be reduced or eliminated, and our right to develop and commercialize any of our future products that are subject of such licensed rights, and our ability to prevent competitors from developing or commercializing such products, could be adversely affected. In addition, even where we have the right to control patent prosecution and maintenance of patents and patent applications we have licensed from third parties, we may still be adversely affected or prejudiced by actions or inactions of our licensees, our licensors and their counsel that took place prior to the date upon which we assumed control over patent prosecution.

Pursuant to the terms of such license agreements, the licensors may also have the right to control enforcement of our licensed patents or defense of any claims asserting the invalidity or unenforceability of these patents. Even if we are permitted to pursue the enforcement or defense of our licensed patents, we may require the cooperation of our future licensors or collaboration partners and any other applicable patent owners and we cannot be certain that such cooperation will be provided to us. We also cannot be certain that our licensors will allocate sufficient resources or prioritize their or our enforcement of such patents or defense of such claims to protect our interests in the licensed patents. Even if we are not a party to these legal actions, an adverse outcome could harm our business because it might prevent us from continuing to license intellectual property that we may need to operate our business. If we lose any of our licensed intellectual property, our right to develop and commercialize any of our products that are subject of such licensed rights could be adversely affected.

In addition, our future licensors may rely on third-party consultants or collaborators or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents we in-license. If other third parties have ownership rights to our in-licensed patents, they may be able to license such patents to our competitors, and our competitors could market competing products and technologies. In addition, if our licensors have not obtained adequate rights from these third parties, we may need to obtain additional rights from these third parties or we could be prevented from developing and commercializing the related products. This could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

In spite of our best efforts, our licensors might conclude that we have materially breached our license agreements and might therefore terminate the license agreements, in which event we may have to cease developing, manufacturing or marketing any product covered by these agreements and we may face other additional penalties or be required to grant our licensors additional rights. In addition, we may seek to obtain additional licenses from our licensors and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third parties (potentially including our competitors) to receive licenses to a portion of the intellectual property that is subject to our existing licenses. Any of these events could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

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obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third parties (potentially including our competitors) to receive licenses to a portion of the intellectual property that is subject to our existing licenses. Any of these events could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

We may be required to pay certain milestones and royalties and fulfill other obligations under our license agreements with third-party licensors.

We may be required to pay milestones and royalties related to our development or commercialization activities of our products utilizing the technologies licensed or sublicensed from third parties under license agreements we may enter into with them. These payments could adversely affect our overall profitability related to any future products that we may seek to develop or commercialize. In order to maintain our license rights under our license agreements, we may need to meet certain specified milestones or fulfill certain obligations, including to devote a certain amount of resources, in the development of our products. Failure to satisfy such obligations could result in the termination of our rights under such agreements.

If we choose to license our technology to third parties, this could result in disputes or otherwise limit our future operations.

We may also in the future, as one of our strategies, deploy our technology into the market and license patents and other intellectual proprietary rights to third parties. Disputes with our licensees may arise, including regarding the scope and content of these licenses. Additionally, a licensee may use our intellectual property without our permission, dispute our ownership of certain intellectual property rights or argue that our intellectual property does not cover our product. Regardless of whether we pursue legal action to enforce any such dispute, a dispute with a licensee or customer over intellectual property rights may damage our relationship with that licensee or customer and may also harm our reputation in the industry. Our ability to expand into additional fields with our technologies also may be restricted by licenses or other rights we may grant to third parties in the future, including if the licenses are exclusive, the licensee is assigned ownership of intellectual property that we develop or rights of first negotiation or refusal are granted.

We may in the future be subject to intellectual property rights claims, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.

Our success and ability to compete also depends in part on our ability to operate without infringing, misappropriating or otherwise violating the intellectual property or other proprietary rights of third parties. Companies in the technology industries, including some of our current and potential competitors, own large numbers of patents, copyrights, trademarks, and trade secrets and frequently pursue litigation based on allegations of infringement, misappropriation, or other violations of intellectual property rights. In addition, many of these companies have the capability to dedicate substantial resources to enforce their intellectual property rights and to defend claims that may be brought against them. Such litigation also may involve non-practicing patent assertion entities or companies who use their patents to extract license fees by threatening costly litigation or that have minimal operations or relevant product revenue and against whom our patents may provide little or no deterrence or protection. While we have not received any notices to date, we may receive notices in the future that claim we have infringed, misappropriated, misused, or otherwise violated other parties’ intellectual property rights, and, to the extent we become exposed to greater visibility, we face a higher risk of being the subject of intellectual property infringement, misappropriation or other violation claims, which is not uncommon with respect to software technologies in particular. There may be third-party intellectual property rights, including issued patents or pending patent applications, that cover significant aspects of our technologies, or business methods. There may also be third-party intellectual property rights, including trademark registrations and pending applications, that cover the goods and services that we offer in certain regions. We may also be exposed to increased risk of being the subject of intellectual property infringement, misappropriation, or other violation claims as a result of acquisitions and our incorporation of open source and other third-party software into, or new branding for, our software, as, among other things, we have a lower level of visibility into the development process with respect to such technology or the care taken to safeguard against infringement, misappropriation, or other violation risks. In addition, former employers of our current, former, or future employees may assert claims that such employees have improperly disclosed to us confidential or proprietary information of these former employers. Any intellectual property claims, with or without merit, are difficult to predict, could be very time-consuming and expensive to settle or litigate, could divert our management’s attention and other resources, and may not be covered by the insurance that we carry. These claims could subject us to significant liability for damages, potentially including treble damages if we are found to have willfully infringed a third party’s intellectual property rights. These claims could also result in our having to stop using technology, branding or marks found to be in violation of a third party’s rights and any necessary rebranding could result in the loss of goodwill. We could be required to seek a license for the intellectual property, which may not be available on commercially reasonable terms or at all. Even if a license were available, we could be required to pay significant royalties, which would increase our expenses. As a result, we could be required to develop alternative non-infringing technology, branding or marks, which could require significant effort and expense. If we cannot license rights or develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of one or more of

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significant royalties, which would increase our expenses. As a result, we could be required to develop alternative non-infringing technology, branding or marks, which could require significant effort and expense. If we cannot license rights or develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of one or more of our software or features, we could lose existing customers, and we may be unable to compete effectively. Any of these results would harm our business, financial condition, and results of operations.

Further, certain of our agreements with customers and other third parties may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of third-party claims of intellectual property infringement, misappropriation, or other violations of intellectual property rights, damages caused by us to property or persons, or other liabilities relating to or arising from our software, services, or other contractual obligations. Large indemnity payments could harm our business, financial condition, and results of operations. Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer and other existing customers and new customers and harm our business and results of operations.

Risks Related to Our Management

We are highly dependent on key members of our executive management team. Our inability to retain these individuals could impede our business plan and growth strategies, which could have a negative impact on our business and the value of your investment.

Our ability to implement our business plan depends on the continued services of key members of our senior management. In particular, and to a critical extent, we are dependent on the continued efforts and services of the members of management named in the “Management” section. If we lose the services of such key members of our management team, we would likely be forced to expend significant time and money in the pursuit of replacement individuals, which may result in a delay in the implementation of our business plan and plan of operations. We may not be able to find satisfactory replacements on terms that would not be unduly expensive or burdensome to us. We do not currently carry a key-man life insurance policy that would assist us in recouping our costs in the event of the death or disability of a member of our management team. The loss of members of our management team, or our inability to attract or retain other qualified individuals, could have a material adverse effect on our business, results of operations and financial condition.

Our management team has limited experience managing a public company.

Other than our Chief Executive Officer, most members of our management team have limited or no experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies in the United States. Our management team may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous scrutiny of securities analysts and investors. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of the Company. Thus, the Company may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. The development and implementation of the standards and controls necessary for the Company to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is possible that the Company will be required to expand its employee base and hire additional employees to support its operations as a public company which will increase its operating costs in future periods. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, results of operations and prospects.

Certain of our directors and/or officers may have interests that compete with ours.

Certain of our directors and/or officers currently own, operate and manage other entities, which may have similar or different objectives than ours. Such activities could detract from the time these people have to allocate to our affairs.

Our lack of adequate directors and officers insurance may also make it difficult for us to retain and attract talented and skilled directors and officers.

In the future we may be subject to litigation, including potential class action and shareholder derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. While we do have directors and officers (“D&O”) insurance it may not be sufficient in the case of litigation.

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Moreover, the cost of maintaining adequate D&O insurance coverage may increase significantly in the future, our operating results could be materially adversely affected. Likewise, if any of our current D&O insurance coverage should become unavailable to us or become economically impractical, we may need to decrease our coverage limits or increase our self-insured retention or we may be unable to renew such insurance at all. If we incur liabilities that exceed our coverage or incur liabilities not covered by our insurance, we would have to self-fund any indemnification amounts owed to our directors and officers and employees in which case our results of operations and financial condition could be materially adversely affected. Additionally, a lack of D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers to serve our company, which could adversely affect our business.

Risks Related to Our Ownership of Common Stock and Other Securities

The price of shares of common stock may be volatile or may decline regardless of our operating performance. You may lose some or all of your investment.

The trading price of shares of our common stock is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “Risks Related to Our Business, Financial Condition, and Need for Additional Capital” and the following:

•our operating and financial performance and prospects;

•quarterly or annual earnings or those of other companies in our industry compared to market expectations;

•conditions that impact demand for our products and/or services;

•future announcements concerning our business, our clients’ businesses or our competitors’ businesses;

•the public’s reaction to our press releases, other public announcements and filings with the SEC;

•the market’s reaction to our reduced disclosure and other requirements as a result of being an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”);

•the size of our public float;

•coverage by or changes in financial estimates by securities analysts or failure to meet their expectations;

•market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

•strategic actions by us or our competitors, such as acquisitions or restructurings;

•changes in laws or regulations which adversely affect our industry or us;

•privacy and data protection laws, privacy or data breaches, or the loss of data;

•changes in accounting standards, policies, guidance, interpretations or principles;

•changes in senior management or key personnel;

•issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock;

•changes in our dividend policy;

•adverse resolution of new or pending litigation against us; and

•changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.

These broad market and industry factors may materially reduce the market price of shares of common stock, regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of common stock is low. ~~A reduced trading volume may result now that our common stock is not trading on Nasdaq and is instead trading on the OTC Markets’ OTCQB Venture Market tier.~~ As a result, you may suffer a loss on your investment.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation. 74

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We do not intend to pay dividends on shares of common stock for the foreseeable future.

We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. As a result, we do not anticipate declaring or paying any cash dividends on shares of common stock in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our Board of Directors (the “Board”) and will depend on, among other things, our business prospects, results of operations, financial condition, cash requirements and availability, certain restrictions related to our indebtedness, industry trends and other factors that the Board may deem relevant. Any such decision will also be subject to compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness. In addition, we may incur additional indebtedness, the terms of which may further restrict or prevent us from paying dividends on common stock. As a result, you may have to sell some or all of your shares of common stock after price appreciation in order to generate cash flow from your investment, which you may not be able to do. Our inability or decision not to pay dividends, particularly when others in our industry have elected to do so, could also adversely affect the market price of shares of common stock.

If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our common stock, the price of shares of common stock could decline.

The trading market for shares of common stock will depend in part on the research and reports that third-party securities analysts publish about us and the industries in which we operate. We may be unable or slow to attract research coverage and if one or more analysts cease coverage of us, the price and trading volume of our securities would likely be negatively impacted. If any of the analysts that may cover us change their recommendation regarding our securities adversely, or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline. If any analyst that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our securities to decline. Moreover, if one or more of the analysts who cover us downgrades the common stock, or if our reporting results do not meet their expectations, the market price of shares of common stock could decline.

Our issuance of additional shares of common stock or securities convertible or exchangeable into common stock could make it difficult for another company to acquire us, may dilute your ownership of us and could adversely affect our stock price.

From time to time in the future, we may also issue additional shares of common stock or securities convertible into common stock pursuant to a variety of transactions, including acquisitions. The issuance by us of additional shares of common stock or securities convertible into common stock would dilute your ownership of us and the sale of a significant amount of such shares in the public market could adversely affect prevailing market prices of shares of common stock. In the future, we expect to obtain financing or to further increase our capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock. Issuing additional shares of our capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our existing stockholders, reduce the market price of shares of common stock, or both. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings. As a result, holders of common stock bear the risk that our future offerings may reduce the market price of shares of common stock and dilute their percentage ownership.

Future sales, or the perception of future sales, of common stock by us or our existing stockholders in the public market could cause the market price for our common stock to decline.

The sale of substantial amounts of shares of common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

All shares issued as merger consideration in the Business Combination are freely tradable without registration under the Securities Act of 1933, as amended (the “Securities Act”) and without restriction by persons other than our “affiliates” (as defined under Rule 144), including our directors, executive officers and other affiliates, and certain other former QT Imaging stockholders.75

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~~The~~All ~~Company~~shares ~~has~~issued ~~registered~~as inmerger aconsideration ~~resale~~in ~~registration statement on Form S-1 declared effective by~~ the ~~SEC~~Business onCombination ~~May~~are ~~22,~~freely ~~2024,~~tradable ~~securities~~without ~~held~~registration ~~by certain stockholders of the Company which have the right, subject to certain conditions, to require us to register the sale of their shares of common stock~~ under the Securities Act, ~~pursuant to the terms~~ of a1933, ~~registration~~as ~~statement~~amended ~~that we entered into with GigAcquisitions5 and certain other securityholders of GigCapital5 and QT Imaging~~ (the “~~GigCapital5~~Securities ~~Registration Rights Agreement~~Act”). ~~The~~and ~~Company~~without ~~has~~restriction ~~also registered in a resale registration statement on From S-1 declared effective~~ by ~~the~~persons ~~SEC~~other onthan ~~February~~our 5,“affiliates” ~~2025, the securities sold in the Private Placement~~ (as ~~the~~defined ~~purchaser~~under ~~received~~Rule ~~the right~~144), ~~subject~~including toour ~~certain conditions~~directors, toexecutive ~~require~~officers usand toother ~~register the sale of their shares of common stock under the Securities Act~~affiliates, ~~pursuant~~and tocertain ~~the~~other ~~terms~~former ofQT ofImaging ~~a registration statement that we entered into (“PIPE Registration Rights Agreement”). The sale of a large number of shares by these~~ stockholders ~~could cause the prevailing market price of shares of common stock to decline~~. ~~Significant sales of shares of common stock may have negative pressure on the public trading price of our common stock.~~

The ~~shares~~Company ~~already~~has registered ~~for~~in a resale ~~currently~~registration ~~represent~~statement ~~over~~on ~~50%~~Form ofS-1 declared effective by the ~~total~~SEC ~~number~~on May 22, 2024, securities held by certain stockholders of ~~shares~~the ~~outstanding~~Company which have the right, ~~based~~subject onto certain conditions, to require us to register the ~~number~~sale of their shares of common stock ~~outstanding~~under asthe Securities Act, pursuant to the terms of ~~March~~a ~~15,~~registration ~~2025.~~statement ~~Even~~that ~~though~~we ~~the~~entered ~~current~~into ~~trading~~with ~~price~~GigAcquisitions5 isand ~~significantly~~certain ~~below~~other security holders of GigCapital5 and QT Imaging (the “GigCapital5 Registration Rights Agreement”). The Company’s ~~initial~~has ~~public~~also ~~offering~~registered ~~price,~~in ~~based~~a resale registration statement on ~~the~~Form ~~closing~~S-1 ~~price~~declared ofeffective by the ~~common~~SEC ~~stock~~ on ~~March~~February 285, 2025, ~~certain~~the ofsecurities ~~our~~sold ~~stockholders~~in ~~may~~the ~~have~~private anplacement ~~incentive~~conducted toin ~~sell~~November ~~their~~2024 ~~shares~~as ~~because~~the ~~they~~purchasers ~~will~~received ~~still~~the ~~profit~~right, onsubject ~~sales~~to ~~due~~certain conditions, to ~~the~~require ~~lower~~us ~~prices~~to atregister ~~which~~the ~~they~~sale ~~purchased~~of their shares asof ~~compared~~common tostock under the ~~public~~Securities ~~investors.~~Act, ~~For~~pursuant ~~example,~~to ~~members~~the terms of ~~our~~a ~~founding~~registration ~~stockholder,~~statement ~~GigAcquisitions5,~~that ~~who~~we ~~received~~entered ainto ~~distribution~~(“PIPE ofRegistration ~~shares~~Rights ~~from~~Agreement”). ~~GigAcquisitions5~~We ~~for~~have ~~which~~also ~~there~~registered isin ana ~~effective~~ resale registration statement on Form S-1 declared effective by the SEC on December 31, ~~have~~2025 aadditional ~~cost~~securities ~~basis~~of the Company, including those issued in upfurther toprivate 5placements conducted during 2025,~~735,000~~ ~~shares~~as ofwell ~~common~~as ~~stock~~warrants that ~~were~~we ~~acquired~~have atissued anduring ~~effective~~2025. ~~purchase~~The ~~price~~sale of ~~$0.0043592~~a ~~per~~large ~~share,~~number ~~and~~of shares by these stockholders, ~~therefore~~or the sale of shares by warrant holders following the exercise of these warrants, ~~based~~could oncause the ~~closing~~prevailing market price of ~~the~~shares of our common stock onto ~~March~~decline. ~~28,~~Significant ~~2025,~~sales ~~could~~of ~~earn~~shares anof ~~aggregate~~our ~~profit~~common ofstock ~~approximately~~may ~~$2,985,875~~have ~~from~~negative pressure on the ~~resale~~public trading price of ~~such~~our ~~shares~~common stock.

The shares already registered for resale currently represent over 50% of the total number of shares outstanding, based on the number of shares of common stock outstanding as of March 24, 2026. Even though the current trading price is significantly below the Company’s initial public offering price, based on the closing price of the common stock on March 24, 2026, certain of our stockholders may have an incentive to sell their shares because they will still profit on sales due to the lower prices at which they purchased their shares as compared to the public investors who acquired shares during the GigCapital5 initial public offering. For example, members of our founding stockholder, GigAcquisitions5, who received a distribution of shares from GigAcquisitions5 for which there is an effective resale registration statement, have a cost basis in up to 1,911,696 shares of common stock that were acquired at an effective purchase price of $0.0130776 per share, and, therefore, based on the closing price of the common stock, could earn an aggregate profit of approximately $12,534,842 million from the resale of such shares based upon the closing stock price on March 24, 2025.

To the extent that the selling securityholders under any of our registration statements on Form S-1 sell their shares or are perceived by the market as intending to sell them, the market price of shares of common stock could drop significantly. These factors could also make it more difficult for us to raise additional funds through future offerings of shares of common stock or other securities.

AsOn ofOctober ~~December 31~~3, ~~2024~~2025, ~~the~~we ~~Company~~issued ~~had~~the ~~23,889,364~~pre-funded warrants ~~outstanding~~(the ~~that~~“Pre-Funded ~~were~~Warrants”), which are exercisable for ~~cash~~1,808,055 shares at an exercise price of $20.300003 per share. In addition, ~~and~~the anCompany ~~additional~~has ~~4,383,558~~other warrants ~~outstanding~~ that ~~would~~in ~~become~~the aggregate are exercisable for ~~cash~~34,306,749 onshares ~~May~~of ~~22,~~common ~~2025~~stock ~~with~~at anvarious exercise ~~price~~prices ofranging from $01.~~672~~20 per share. Onto ~~February~~$6.90 ~~26,~~per ~~2025,~~share. This includes the ~~Company~~warrant ~~issued~~that anwe ~~additional~~issued ~~61,000,000 warrants~~ to Lynrock Lake ~~and~~in ~~15,000,000~~connection ~~warrants~~with toour YAloan IIagreement ~~PN, Ltd. which are exercisable on a "cashless basis"~~ with anLynrock ~~exercise~~Lake ~~price of $0.40 per share as part of~~ (the ~~$10.1~~“Lynrock ~~million~~Lake ~~term~~Warrant”), ~~loan~~which ~~received~~is ~~from~~exercisable ~~Lynrock~~for ~~Lake~~20,333,623 ~~and~~shares ~~cancellation~~ of ~~debt~~common ~~with~~stock YAat IIan ~~PN, Ltd. The~~ exercise ofprice ~~any~~ of ~~these~~$1.20 ~~warrants~~per ~~would~~share, ~~result~~but inmay ~~the~~be ~~issuance~~exercised ofon ~~shares~~a ~~which~~“cashless ~~could then be sold~~basis.”

In addition, the shares of common stock that will be issued upon exercise of stock options already granted pursuant to the terms of, or those shares of common stock reserved for future issuance under the 2024 Equity Incentive Plan will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements and, in some cases, limitations on volume and manner of sale applicable to affiliates under Rule 144, as applicable. We have filed a registration statement on Form S-8 under the Securities Act to register shares of common stock or securities convertible into or exchangeable for shares of common stock issued pursuant to our equity incentive plans, and may in the future file additional registration statements on Form S-8. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market.

As a public reporting company, we are subject to rules and regulations established from time to time by the SEC regarding our internal control over financial reporting.

The Company is a public reporting company subject to the rules and regulations established from time to time by the SEC. These rules and regulations will require, among other things that the Company establish and periodically evaluate procedures with respect to its internal control over financial reporting. Reporting obligations as a public company are likely ~~to place a considerable strain on the Company’s financial and management systems, processes and controls, as well as on its personnel.~~

In addition, as a public company, the Company will be required to document and test its internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that its management can certify as to the effectiveness of the internal control over financial reporting. If the Company’s not able to implement the requirements of Section 404, including any additional requirements once the Company’s no longer an emerging growth company, in a timely manner or with adequate compliance, it may not be able to assess whether its internal control over financial reporting are effective, 76

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~~which~~to ~~may~~place ~~subject~~a ~~the~~considerable ~~Company~~strain toon ~~adverse~~the ~~regulatory~~Company’s ~~consequences~~financial and ~~could~~management ~~harm~~systems, ~~investor~~processes ~~confidence~~ and ~~the~~controls, ~~market~~as ~~price~~well ofas ~~our~~on ~~common~~its ~~stock~~personnel.

Additionally, once we are no longer an emerging growth company, we will be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. We will be an “emerging growth company” until the earlier of (1) the last day of the fiscal year (a) following September 28, 2026, the fifth anniversary of our initial public offering (“IPO”), (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. Until we cease being an emerging growth company stockholders will not have the benefit of an independent assessment of the effectiveness of our internal control environment.

As an “emerging growth company,” we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.

As an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including not being required to obtain an assessment of the effectiveness of our internal controls over financial reporting from our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

In addition, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active market for our common stock, our share price may be more volatile and the price at which our securities trade could be less than if we did not use these exemptions.

Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

The Second Amended and Restated Certificate of Incorporation of the Company (the “Charter”), the Company’s bylaws (the “Bylaws”) and Delaware law contain provisions that could have the effect of rendering more difficult, delaying, or ~~preventing an acquisition deemed undesirable by the Board. Among other things, the Charter and/or the Bylaws include the following provisions:~~

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preventing an acquisition deemed undesirable by the Board. Among other things, the Charter and/or the Bylaws include the following provisions:

•a staggered board, which means that the Board will be classified into three classes of directors with staggered three-year terms and directors will only be able to be removed from office for cause;

•limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes;

•prohibition on stockholder action by written consent, which means that our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter;

•a forum selection clause, which means certain litigation against us can only be brought in Delaware;

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•the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and

•advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law (“DGCL”), which prevents interested stockholders, such as certain stockholders holding more than 15% of our outstanding common stock, from engaging in certain business combinations unless (i) prior to the time such stockholder became an interested stockholder, the board of directors approved the transaction that resulted in such stockholder becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the common stock, or (iii) following board approval, such business combination receives the approval of the holders of at least two-thirds of our outstanding common stock not held by such interested stockholder.

Any provision of the Charter, the Bylaws or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

The Charter provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

The Charter provides that, unless we consent in writing to the selection of an alternative forum, the (i) Delaware Court of Chancery (the “Court of Chancery”) of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (A) any derivative action, suit or proceeding brought on our behalf; (B) any action, suit or proceeding asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or stockholders to us or to our stockholders; (C) any action, suit or proceeding asserting a claim arising pursuant to the DGCL, the Charter or the Bylaws; or (D) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine; and (ii) subject to the foregoing, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Notwithstanding the foregoing, such forum selection provisions shall not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in the Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

Additionally, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As noted above, the Charter provides that the federal district courts of the United States of America shall have jurisdiction over any action arising under the Securities Act. Accordingly, there is uncertainty as to whether a court would enforce such provision. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

If we do not file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of the public and private warrants, holders will only be able to exercise such warrants on a "cashless basis" and we have a large number of other warrants which are exercisable on a “cashless basis.” 78

If we do not file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of the public and private warrants at the time that holders wish to exercise such warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption from registration is available. As a result, the number of shares of common stock that holders will receive upon exercise of the public and private warrants will be fewer than it would have been had such holder exercised its warrant for cash. Further, if an exemption from registration is not available, holders would not be able to exercise on a cashless basis and would only be able to exercise their warrants for cash if a current and effective prospectus relating to the common stock issuable upon exercise of the warrants is available. Under the terms of the Warrant Agreement, dated as of September 23, 2021, between GigCapital5 and the Transfer Agent (the “Warrant Agreement”), we have agreed to use our best efforts to meet these conditions and to file and maintain a current and

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If we do not file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of the ~~warrants~~public ~~until~~and ~~the~~private ~~expiration of the~~ warrants~~. However~~, weholders ~~cannot assure you that we~~ will only be able to doexercise ~~so.~~such Ifwarrants weon ~~are~~a ~~unable~~"cashless tobasis" doand ~~so,~~we ~~the~~have ~~potential~~a ~~“upside”~~large number of ~~the~~other ~~holder’s~~warrants ~~investment~~which inare usexercisable ~~may~~on bea ~~reduced~~“cashless ~~or the warrants may expire worthless~~basis.”

InIf ~~addition~~we do not file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of the public and private warrants at the time that holders wish to exercise such warrants, they will only be able to exercise them on ~~February~~a ~~26,~~“cashless ~~2025,~~basis” weprovided ~~issued~~that an ~~additional~~exemption 61from registration is available. As a result,~~000,000~~ ~~warrants~~the tonumber ~~Lynrock~~of ~~Lake~~shares of common stock that holders will receive upon exercise of the public and ~~15,000,000~~private warrants towill YAbe IIfewer ~~PN,~~than ~~Ltd~~it would have been had such holder exercised its warrant for cash. ~~which~~Further, ~~are~~if ~~exercisable~~an exemption from registration is not available, holders would not be able to exercise on a "cashless basis" ~~with~~and anwould only be able to exercise ~~price~~their warrants for cash if a current and effective prospectus relating to the common stock issuable upon exercise of $0the warrants is available.40 ~~per~~Under ~~share~~the asterms ~~part~~of the Warrant Agreement, dated as of September 23, 2021, between GigCapital5 and the ~~$10.1~~Transfer ~~million~~Agent ~~term~~(the ~~loan~~“Warrant ~~received~~Agreement”), ~~from~~we ~~Lynrock~~have ~~Lake~~agreed to use our best efforts to meet these conditions and ~~cancellation~~to file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of ~~debt~~the ~~with~~warrants YAuntil IIthe PNexpiration of the warrants. However, ~~Ltd~~we cannot assure you that we will be able to do so.. If we are unable to do so, the potential “upside” of the holder’s investment in us may be reduced or the warrants may expire worthless.

In addition, the outstanding Lynrock Lake Warrant, which is exercisable for 20,333,623 shares of common stock, is exercisable on a “cashless basis.”

There is no guarantee that the public and private warrants will ever be in the money, and they may expire worthless and the terms of warrants may be amended.

The exercise price for the public and private warrants is $26.3090 per share of common stock. There is no guarantee that the public and private warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless.

In addition, the Company’s public and private warrants were issued in registered form under the Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and the Company. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any other change. Accordingly, the Company may amend the terms of the warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although the Company’s ability to amend the terms of the warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares and their respective affiliates and associates have of common stock purchasable upon exercise of a warrant.

Our warrants will become exercisable for the common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

Our private warrants and our public warrants issued as part of GigCapital5’s IPO are exercisable for one share of common stock at $26.3090 per share. ~~Our~~In addition, we have issued warrants in various private placements and in connection with the issuance of debt. In November 2024, we issued warrants in a private placement (the “November 2024 PIPE Warrants”) ~~are~~that ~~exercisable~~have ~~for~~an ~~one~~exercise price of $2.016 per share. The Lynrock Lake Warrant has an exercise price of $1.20 per share. The warrants with a term of ten years from the initial exercise date for the purchase of 523,286 shares of common stock atthat we issued on April 9, 2025 (the “Ten Year Common Warrants”) have an exercise price of $02.~~672~~16 per share. ~~Warrants~~The warrant with a term of five years from the initial exercise date to purchase up to an additional 68,447 shares of common stock that we ~~have~~issued on May 12, 2025 (the “Recanati Warrant”) has an exercise price of $3.36 per share, the warrants for the purchase of 2,232,243 shares of common stock that we issued inon ~~February~~October 3, 2025 pursuant to ~~Lynrock~~the ~~Lake~~terms and conditions of the Securities Purchase Agreement, dated September 30, 2025, (asthe ~~defined~~“Subscription ~~below~~Warrants”) ~~and~~have YAan IIexercise PNprice of $4.50 per share, ~~Ltd~~the ~~are~~Pre-Funded ~~exercisable~~Warrants ~~for~~have ~~one~~an ~~share~~exercise atprice of $0.400003 per share, and the warrants with term of ten years from the initial exercise date for the purchase of 48,214 shares of common stock (the “January 2026 Warrant” and together with the warrants subject to the Warrant Agreement (the “Warrant Agreement Warrants”), the Lynrock Lake Warrant, the November 2024 PIPE Warrants, the Ten Year Common Warrants, the Recanati Warrant, the Pre-Funded Warrants and the Subscription Warrants, the “Warrants”) have an exercise price of $6.43 per share. The additional shares of common stock issued upon exercise of ~~our~~the ~~warrants~~Warrants will result in dilution to the then existing holders of the common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of the common stock.

~~We have no obligation to net cash settle the warrants other than the warrants issued to Lynrock Lake and YA II PN, Ltd.~~ 79

In no event will we have any obligation to net cash settle the warrants other than the warrants issued to Lynrock Lake and YA II PN, Ltd. Furthermore, there are no contractual penalties for failure to deliver securities to the holders of the public and private warrants upon exercise of those warrants. Accordingly, those warrants may expire worthless.

Our public warrants, private warrants, and the warrants issued to Lynrock Lake and YA II PN, Ltd are, and our PIPE Warrants will become, exercisable for common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

Outstanding public warrants to purchase an aggregate of 23,000,000 shares of common stock are exercisable in accordance with the terms of the Warrant Agreement governing those securities, as well as our private warrants to purchase an aggregate of up to 889,364 shares of common stock, at an exercise price of $2.30 per share. The warrants issued to Lynrock Lake and YA II PN, Ltd to purchase an aggregate of 76,000,000 shares of common stock at an exercise price of $0.40 per share are also exercisable. In addition, the PIPE Warrants will become exercisable as of May 22, 2025 at an exercise price of $0.672 per share. To the extent such warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the holders of common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of common stock. However, there is no guarantee that the warrants will ever be in-the-money prior to their expiration. As such, the warrants may expire worthless.

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We have no obligation to net cash settle the warrants other than the Lynrock Lake Warrant

In no event will we have any obligation to net cash settle the warrants other than the warrants issued to Lynrock Lake. Furthermore, there are no contractual penalties for failure to deliver securities to the holders of the public and private warrants upon exercise of those warrants. Accordingly, those warrants may expire worthless.

Our warrants will become, exercisable for common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

The Warrant Agreement Warrants, consisting of outstanding public warrants to purchase an aggregate of 7,882,807 shares of common stock are exercisable in accordance with the terms of the Warrant Agreement entered into in September 2021 governing those securities, as well as our private warrants and working capital warrants to purchase an aggregate of up to 296,445 shares of common stock, at an exercise price of $6.90 per share. Collectively, the Warrants are exercisable for a total of 34,306,749 shares of common stock, and in addition to the Warrant Agreement Warrants with an exercise price of $6.90, the other Warrants have exercise prices ranging from $0.0003 per share for the Pre-Funded Warrants to $6.43 per share for the January 2026 Warrant. To the extent such warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the holders of common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of common stock. However, there is no guarantee that the warrants will ever be in-the-money prior to their expiration. As such, the warrants may expire worthless.

Certain of the Company’s warrants are accounted for as a warrant liability and were recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of the common stock.

As of December 31, ~~2024~~2025, an aggregate of 889,364 private warrants and working capital warrants that are Warrant Agreement Warrants, which following the 3:1 reverse stock split that occurred on October 23, 2025 (the “Reverse Stock Split”) were exercisable for 296,445 shares of common stock, were outstanding. These warrants became exercisable 30 days after completion of the Business Combination and are exercisable now that we have an effective registration statement under the Securities Act covering the shares of common stock of the Company issuable upon exercise for so long as a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their warrants on a cashless basis under certain circumstances). Furthermore, the Company may redeem outstanding warrants in certain circumstances; provided, however, that these warrants will not be redeemable by the Company so long as they are held by the initial purchasers or any of its permitted transferees, to which the initial purchaser transferred the private warrants in June 2024. Under GAAP, the Company is required to evaluate contingent exercise provisions of these warrants and then their settlement provisions to determine whether they should be accounted for as a warrant liability or as equity. Any settlement amount not equal to the difference between the fair value of a fixed number of the Company’s equity shares and a fixed monetary amount precludes these warrants from being considered indexed to its own stock, and therefore, from being accounted for as equity. As a result of the provision that these warrants, when held by someone other than the initial purchasers or their permitted transferees, will be redeemable by the Company, the requirements for accounting for these warrants as equity are not satisfied. Therefore, the Company is required to account for these warrants as a warrant liability and record (a) that liability at fair value, and (b) any subsequent changes in fair value as of the end of each period for which earnings are reported. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock.

Our common stock will no longer be listed on The Nasdaq Global Market

Our common stock is currently listed on The Nasdaq Global Market. Continued listing of the common stock on Nasdaq requires satisfying certain criteria. Violating the Nasdaq’s listing requirements or failing to meet its listing standards means that our common stock will be delisted.

On May 10, 2024, we received a written notice from the Listing Qualifications Department (the “Staff”) of Nasdaq notifying us that, for the 30 consecutive business days prior to May 6, 2024, our Market Value of Listed Securities (“MVLS”) was below the minimum of $50 million required for continued listing on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(b)(2)(A) (the “MVLS Requirement”).

Furthermore, on June 17, 2024, the Staff notified us that the minimum bid price of our common stock had been below $1.00 per share for 30 consecutive business days, and, as a result, did not comply with Listing Rule 5450(a)(1) of the Nasdaq Listed Company Manual (the “Price Rule”). In accordance with Listing Rule 5810(c)(3)(A), we were provided with 180 calendar days, or until December 16, 2024, to regain compliance with the Price Rule.

In addition, on September 10, 2024, the Staff notified us that, for the prior 31 consecutive business days, our Market Value of Publicly Held Securities (“MVPHS”) was below the minimum of $15 million required for continued listing on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(b)(2)(c) (the “MVPHS Requirement”).

Subsequently, the Staff notified us on November 6, 2024 that it had determined to commence proceedings to delist the common stock from Nasdaq due to its determination that our common stock is no longer suitable for listing because our market value of our listed securities fell below the minimum $50 million required for continued listing as set forth in MVLS Requirement, and we were unable to regain compliance with the MVLS Requirement by November 4, 2024. We proceeded to initiate an appeal (the “Appeal”) of the Staff’s determination to commence delisting of the common stock from Nasdaq, requesting that the matter be submitted to a Hearings Panel (the “Panel”) per the procedures set forth in the Nasdaq Listing Rule 5800 Series, staying the suspension of our securities and the filing of a Form 25‑NSE by the Staff pending the Panel’s decision.

While the Appeal was pending, on December 17, 2024, the Staff formally notified us that we were unable to regain compliance with the Price Rule during the provided 180-day compliance window, which the Staff stated it considers an additional basis for delisting our common stock from Nasdaq and which was to be considered in the Panel’s rendering of a decision on the Appeal.

On January 7, 2025, the Panel held a hearing on the Appeal of the Staff’s November 6, 2024 and December 17, 2024 decisions to commence proceedings to delist our common stock. On January 24, 2025, we received further notice that the Panel had denied the Appeal and that our common stock will be delisted from trading on Nasdaq based on the failure to comply with the MVLS Requirement and the Price Rule. Accordingly, our common stock was suspended from trading on

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Nasdaq effective with the open of trading on January 28, 2025. Our common stock will be delisted 10 calendar days from the date that Nasdaq files the Form 25, Notification of Removal from Listing and/or Registration, with the SEC. Commencing on January 28, 2025, our common stock commenced trading on the over-the-counter (OTC) Pink Sheets under the ticker “QTIH”, and it was upgraded to trading on the OTC Markets’ OTCQB Venture Market tier effective March 11, 2025. If in the future, it is able to qualify to list on Nasdaq under the Nasdaq’s initial listing standards, we intend to apply for listing on Nasdaq.

We do not expect the Panel’s determination to have any impact on our day-to-day operations. However, we believe that delisting of our common stock from Nasdaq may adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock. Delisting could have other negative results, including the potential loss of employee confidence, the loss of institutional investors and/or interest in significant business development opportunities.

By trading on the OTC Markets OTCQB Venture Market tier, we could face significant adverse consequences including, among others:

•a limited availability of market quotations for our securities;

•a limited amount of news and little or no analyst coverage of us;

•we would no longer qualify for exemptions from state securities registration requirements, which may require us to comply with applicable state securities laws; and

•a decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3) or obtain additional financing in the future.

In addition, an increase in the per share trading value of our common stock would be beneficial because it would:

•improve the perception of our common stock as an investment security;

•reset our stock price to more normalized trading levels in the face of potentially extended market dislocations;

•assist with future potential capital raises;

•appeal to a broader range of investors to generate greater investor interest in us; and

•reduce stockholder transaction costs because investors would pay lower commissions to trade a fixed dollar amount of our common stock if our stock price were higher than they would if our stock price were lower.

Trading on the OTCQB Venture Market tier is volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares of our common stock.

Our common stock is now quoted on the OTC Markets OTCQB Venture Market tier. Trading in securities quoted on the OTC Markets is often thin and characterized by wide fluctuations in trading prices, due to many factors, some of which may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Markets is not a stock exchange, and trading of securities on the OTC Markets is often more sporadic than the trading of securities listed on a quotation system like The Nasdaq Global Market, where our common stock has been listed since the Business Combination. These factors may result in investors having difficulty reselling any shares of our common stock.

Our common stock is quoted on the OTCQB Venture Market tier, which may have an unfavorable impact on our stock price and liquidity.

Our common stock is quoted on the OTCQB Venture Market tier. The OTCQB Venture Market tier is a significantly more limited market than Nasdaq. The quotation of our shares on the OTCQB Venture Market tier may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future. We plan to relist our common stock as soon as practicable on a national stock exchange. However, we cannot assure you

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that we will be able to meet the initial listing standards of any stock exchange, or that we will be able to maintain any such listing.

Other General Risks Applicable to the Company

Under applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees.

Our employment agreements generally include covenants not to compete. These agreements prohibit our employees, if they cease working for us, from competing directly with us or working for our competitors for a limited period. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work at all or for a sufficient duration of time to prevent members of our management team from competing with us.

We may not be able to attract and retain the highly skilled employees we need to support our planned growth.

To continue to execute our business and our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense. We may not be successful in attracting and retaining qualified personnel. If we ~~fail to attract new personnel or fail to retain and motivate our current personnel, our business, financial condition, results of operations and future growth prospects could be severely harmed.~~

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fail to attract new personnel or fail to retain and motivate our current personnel, our business, financial condition, results of operations and future growth prospects could be severely harmed.

Industry data, projections and estimates relied upon by us are inherently uncertain, subject to interpretation and may not have been independently verified.

Information concerning our industry and the markets in which we operate and intend to operate, including industry projections and estimates, is obtained from publicly available information released by independent industry and research organizations and other third-party sources. We have not independently verified any such third-party information. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate are subject to uncertainty and risk due to a variety of factors. As a result, inaccuracies in third-party information, or in the projections, may adversely impact the assumptions that are relied upon for our internal business planning and in the analysis of investors.

We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect the Company’s business, results of operations, and financial condition.

As a public company, we will incur significant legal, accounting and other expenses that the company did not incur as a private company, including costs associated with public company reporting requirements. We will also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), as well as rules implemented by the SEC and the Nasdaq. These rules and regulations are expected to increase the company’s legal and financial compliance costs and to make some activities more time consuming and costly, which may adversely affect investor confidence and could cause our business or stock price to suffer.

Certain estimates of market opportunity included in this annual report may prove to be inaccurate.

This annual report includes our internal estimates of the addressable market for our products. Market opportunity estimates, whether obtained from third-party sources or developed internally, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The estimates in this annual report relating to the size of our target market, market demand and adoption, capacity to address this demand, and pricing may prove to be inaccurate. The addressable market we estimate may not materialize for many years, if ever, and even if the markets in which we compete meet the size estimates in this annual report, our business could fail to successfully address or compete in such markets.

We may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

We may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in losses if material issues are discovered or factors that are outside of our control subsequently arise that require us to do so. Unexpected risks may arise and previously known risks may materialize in a manner not consistent with our existing risk analysis. Even though these charges may be non-cash items and may not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to be unable to obtain future financing on favorable terms or at all.

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perceptions about us or our securities. In addition, charges of this nature may cause us to be unable to obtain future financing on favorable terms or at all.

Exchange rate fluctuations between the U.S. dollar and other currencies and inflation may negatively affect our results of operations, and we may not be able to hedge our currency exchange risks successfully.

The U.S. dollar is our functional and reporting currency. Payments we receive from international distribution partners and others that purchase our products and services may be subject to currency fluctuations if the remitting party does not initiate payment in U.S. dollars. Given our general lack of currency hedging arrangements to protect us from fluctuations in the exchange rates of foreign currencies in relation to the U.S. dollar (and/or from inflation of such foreign currencies), we may be exposed to material adverse effects from such movements. Our exchange rate exposure may change over time as our business evolves and could result in increased costs or reduced revenue and could affect our actual cash flow. Changes in the relative values of currencies occur regularly and, in some instances, may have a significant impact on our operating results. The rate of inflation in countries in which we sell and service our products, or in currency exchange rates, may materially change and we might not be able to effectively mitigate these risks.

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We will incur significant increased expenses and administrative burdens as a public company, which could have an adverse effect on its business, financial condition and results of operations.

We face increased legal, accounting, administrative and other costs and expenses as a public company than the Company did as a private company. The Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, Public Company Accounting Oversight Board (United States) (the “PCAOB”) and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements require the Company to carry out activities QT Imaging has not done previously. For example, the Company created new board committees and adopted new internal controls and disclosure controls and procedures. In addition, expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify any additional material weaknesses or significant deficiencies in the internal control over financial reporting), the Company could incur additional costs rectifying those issues, and the existence of those issues could adversely affect the Company reputation or investor perceptions of it. It may also be more expensive to obtain director and officer liability insurance. Risks associated with the Company’ status as a public company may make it more difficult to attract and retain qualified persons to serve on our Board or as executive officers. The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require the Company to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.

If we identify any additional material weaknesses in the future, any such identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim consolidated financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.

We will be subject to income taxes in the United States and other jurisdictions, and our tax liabilities will be subject to the allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

•changes in the valuation of our deferred tax assets and liabilities;

•expected timing and amount of the release of any tax valuation allowances;

•tax effects of stock-based compensation;

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•costs related to intercompany restructurings;

•changes in tax laws, regulations or interpretations thereof; or

•lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.

In addition, we may be subject to audits of our income, sales and other transaction taxes by taxing authorities. Outcomes from these audits could have an adverse effect on our financial condition and results of operations.

Our only significant asset is its ownership interest in QT Imaging, Inc. and such ownership may not be sufficient to pay dividends or make distributions or loans to enable the Company to pay any dividends on the common stock or satisfy its other financial obligations.

We have no direct operations and no significant assets other than its ownership of QT Imaging, Inc. We depend on QT Imaging, Inc. for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company and to pay any dividends with respect to our common stock. The financial condition and operating requirements of QT Imaging may limit our ability to obtain cash from QT Imaging. The earnings from, or other available assets of, QT Imaging may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on the common stock or satisfy its other financial obligations.

Our ability to make distributions, loans and other payments for the purposes described above and for any other purpose may be limited by credit agreements to which the Company is party from time to time, including the existing loan agreement with Lynrock Lake, and will be subject to the negative covenants set forth therein. Any loans or other extensions of credit to QT Imaging from the Company will be permitted only to the extent there is an applicable exception to the investment covenants under this loan agreement. Similarly, any dividends, distributions or similar payments to QT Imaging from the Company will be permitted only to the extent there is an applicable exception to the dividends and distributions covenants under this loan agreement.82

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including our expenses as a publicly traded company and to pay any dividends with respect to our common stock. The financial condition and operating requirements of QT Imaging, Inc. may limit our ability to obtain cash from QT Imaging, Inc. The earnings from, or other available assets of, QT Imaging, Inc. may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on the common stock or satisfy its other financial obligations.

Our ability to make distributions, loans and other payments for the purposes described above and for any other purpose may be limited by credit agreements to which the Company is party from time to time, including the existing credit agreement with Lynrock Lake (the “Lynrock Lake Credit Agreement”), and will be subject to the negative covenants set forth therein. Any loans or other extensions of credit to QT Imaging, Inc. from the Company will be permitted only to the extent there is an applicable exception to the investment covenants under this loan agreement. Similarly, any dividends, distributions or similar payments to QT Imaging, Inc. from the Company will be permitted only to the extent there is an applicable exception to the dividends and distributions covenants under this loan agreement.

Item 1B: Unresolved Staff Comments

None

Item 1C: Cybersecurity

The operation of our business depends on our information technology systems. We rely on our information technology systems to effectively manage sales and marketing data, accounting and financial functions, inventory management, product development tasks, clinical data, customer service and technical support functions. Our information infrastructure and products are vulnerable to cyber-based attacks. We have not incurred such an attack.

Cyber-based attacks can include computer viruses, denial-of-service attacks, phishing attacks, ransomware attacks and other introduction of malware to computers and networks; unauthorized access through the use of compromised credentials; exploitation of design flaws, bugs or security vulnerabilities; intentional or unintentional acts by employees or other insiders with access privileges; and intentional acts of vandalism by third parties and sabotage.

We have developed and implemented a risk-based program focused on assessing and identifying cybersecurity risks, and managing these risks by taking cybersecurity measures to protect the confidentiality, integrity, and availability of our critical systems and information.

Our cybersecurity risk management is integrated into our overall risk management framework, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas. We have engaged an information security consultant to assist in our cybersecurity risk management program.

Our Board of Directors is primarily responsible for overseeing and governing our cybersecurity risk management program. The Audit Committee of our Board of Directors is responsible for overseeing management’s processes for identifying and mitigating risks that affect our operations, including cybersecurity risks. Senior leadership regularly briefs the full Board of Directors on our cybersecurity and information security posture and the Audit Committee is to be apprised of cybersecurity incidents deemed to pose a critical risk to our information technology (“IT”) assets or business. We rely upon in-house and third- party cybersecurity vendors to monitor our IT systems and assets and have a governance structure and processes as described above to assess, identify, manage, and report cybersecurity risks.

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We continue to assess the risks and changes in the cyber environment and invest in enhancements to our cybersecurity capabilities.

Although we have not, as of the date of this annual report, experienced a cybersecurity incident that materially affected our business, financial condition and results of operations, we can provide no assurance that we will not experience a material cybersecurity incident in the future.

Item 2: Properties

We currently maintain our corporate offices at 3 Hamilton Landing, Suite 160, Novato, CA.

Item 3: Legal Proceedings

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity.

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Item 4: Mine Safety Disclosures

Not applicable

~~100~~84

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Part II

Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

~~Our~~Through January 27, 2025, our common stock iswas ~~currently~~ listed on The Nasdaq Stock Market LLC. ~~However~~(“Nasdaq”), ~~the~~trading ~~Company~~under ~~has~~the ~~received~~ticker ~~written~~symbol ~~notice~~“QTI.” ~~from~~Upon ~~Nasdaq~~the ~~that~~completion itof ~~has commenced~~ proceedings to delist ~~the~~our ~~Company’s~~ common ~~(ticker~~stock, ~~symbol: QTI) from~~ Nasdaq, ~~and~~ suspended trading in ~~the~~our ~~Company’s~~ common stock ~~pending the completion of such proceedings. As a result~~, and effective January 28, 2025, ~~the~~our ~~Company’s~~ common stock commenced trading in the over‑the-counter market under the symbol “QTIH”,” and ~~the trading of the common stock~~ was upgraded to the OTCQB Venture Market on March 11, 2025. ~~Any~~Effective ~~over-the-counter~~January ~~market~~28, ~~quotations~~2026, upon meeting all of the Nasdaq listing requirements, our common stock ~~reflect~~was ~~inter-dealer~~uplisted ~~prices,~~from ~~without~~the ~~retail~~OTCQB ~~mark-up,~~Venture ~~mark-down,~~Market orto ~~commission~~the Nasdaq Capital Market and ~~may~~began ~~not~~trading ~~necessarily~~under ~~represent~~the ~~actual~~ticker ~~transactions~~symbol “QTI.”

As of March 2824, ~~2025~~2026, there were approximately ~~384~~369 stockholders of record of our common stock.

Dividend Policy

We have never declared or paid any cash dividend on our common stock. We currently do not expect to pay any dividends on our common stock in the foreseeable future.

Recent Unregistered Sales of Equity Securities

Please refer to the Quarterly Report on Form 10-Q and registration statement on Form S-1 that we have filed with the SEC for information regarding our Private Placement that closed on ~~November~~October 3, 2025 and the Form 8-K that we have filed with the SEC for information regarding our Private Placement that closed on January 22, ~~2024~~2026.

Recent Purchases of Equity Securities

We made no repurchases of our equity securities during the fourth quarter of the fiscal year ended December 31, ~~2024.~~2025

Equity Compensation Plans

See Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, of Part III of this Annual Report for information relating to securities authorized for issuance under our equity compensation plans.

Item 6: Reserved

Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The discussion should be read in conjunction with our audited consolidated financial statements, including the notes thereto, attached hereto.

This discussion contains forward-looking statements based upon our management’s current beliefs and expectations that involve risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those made or implied in the forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and those set forth under “Risk Factors” and elsewhere in this annual report. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which reflect our management’s analysis only as of the date hereof.

Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Condition and Results of Operations” to “we,” “our,” “us,” “QT Imaging,” ~~and~~“QT Imaging Holdings, Inc.” or the “Company” ~~refer~~and toother ~~the~~similar ~~business~~terms ~~and~~refer ~~operations~~to of QT Imaging Holdings, Inc. and its ~~subsidiary~~consolidated ~~prior~~subsidiaries. You toshould read the ~~Business~~following ~~Combination~~discussion and toanalysis of QT Imaging Holdings’ financial condition and ~~its~~results ~~subsidiaries~~of ~~after~~operations ~~the~~in ~~Business~~conjunction ~~Combination.~~with ~~Terms~~the ~~not~~audited ~~defined~~consolidated ~~herein~~financial ~~are~~statements asand ~~defined~~notes thereto contained in ~~the~~this ~~annual~~Annual ~~report~~Report.

Overview

We are a medical device company founded in 2012 and 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, and treatment of disease and that it should be safe, affordable, and accessible. Our goal is to improve global health outcomes through the development and commercialization of imaging devices that address critical healthcare challenges with accuracy and precision.

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With the support of nearly $18 .0 million in financial support from the U.S. National Institutes of Health, we developed a novel, comprehensive body imaging technology that has high resolution, high sensitivity, high specificity, high positive and negative predictive values, and is safe and inexpensive. The technology is based on ultra-low frequency transmitted sound and uses a one-of-a-kind novel sound back-scatter design and inverse-scattering reconstruction to create its images.

Our current QT Breast Scanner is a Class II device subject to premarket notification and clearance under Section 510(k) of the FDCA. On August 23, 2016, we (formerly, QT Ultrasound LLC) submitted a Section 510(K) Summary of Safety and Effectiveness application for the QT Breast Scanner in accordance with 21 CFR 807.92 under 510(K) Number K162372. As part of meeting the general requirements for basic safety and essential performance of the QT Breast Scanner (formerly, QT Ultrasound Breast Scanner) pursuant to AAMI ES60601-1:2005/(R)2012 and A1:2012 Medical electrical equipment, testing was conducted by Intertek, an independent testing laboratory, located in Menlo Park, CA. Intertek also conducted applicable testing pursuant to IEC 60601-1-6 Edition 3.1 2013-10-Medical electrical equipment Part 1-6 General requirements for safety - Collateral Standard: Usability. In addition, we conducted, and Intertek witnessed, all applicable testing pertaining to the requirements for the safety of ultrasonic medical diagnostic and monitoring equipment and to demonstrate compliance with the “Acoustic Output Measurement Standard for Diagnostic Ultrasound Equipment”. This test on acoustic output was pursuant to IEC 60601-2-37 Edition 2.0.2007 Medical electrical equipment - Part 2-37: Particular requirements for the basic safety and essential performance of ultrasonic medical diagnostic and monitoring equipment. Finally, system verification testing was conducted to ensure that the QT Breast Scanner met all design and other requirements including but not limited to that no new issues of safety or effectiveness compared to the predicate device, SoftVue System manufactured by Delphinus Medical Technologies, were raised.

InSince ~~addition~~our inception, we ~~conducted,~~have ~~and~~devoted ~~Intertek~~substantially ~~witnessed,~~ all ~~applicable~~our ~~testing~~financial ~~pertaining~~resources to ~~the~~acquiring ~~requirements~~and ~~for~~developing the ~~safety~~base oftechnology ~~ultrasonic~~for ~~medical~~our ~~diagnostic~~body ~~and~~imaging ~~monitoring~~systems, ~~equipment~~conducting research and todevelopment ~~demonstrate~~activities, ~~compliance~~securing ~~with~~related ~~the~~intellectual ~~“Acoustic~~property ~~Output~~rights, ~~Measurement~~and ~~Standard~~ for ~~Diagnostic~~general ~~Ultrasound~~corporate ~~Equipment”~~operations and growth. ~~This~~On ~~test~~June on6, ~~acoustic~~2017, ~~output~~the ~~was~~FDA, ~~pursuant~~in response to ~~IEC~~QT ~~60601-2-37~~Imaging’s ~~Edition~~Section ~~2.0.2007~~510(K) ~~Medical~~Summary ~~electrical~~of ~~equipment~~Safety -and ~~Part~~Effectiveness ~~2-37:~~premarket ~~Particular~~notification, ~~requirements~~determined ~~for~~that the ~~basic~~QT ~~safety~~Breast ~~and~~Scanner ~~essential~~is ~~performance~~substantially ofequivalent ~~ultrasonic~~to ~~medical~~the ~~diagnostic~~predicate ~~and~~device. ~~monitoring~~Our ~~equipment.~~use ~~Finally,~~of ~~system~~the ~~verification~~words ~~testing~~“safe”, ~~was~~“safety”, ~~conducted~~“effectiveness”, toand ~~ensure~~“efficacy” ~~that~~in relation to the QT Breast Scanner ~~met~~in ~~all~~this ~~design~~Management's Discussion and ~~other~~Analysis ~~requirements~~and ~~including~~all ~~but~~other ~~not~~documents ~~limited~~related to ~~that~~us nois ~~new~~limited ~~issues~~to the context of ~~safety~~the orSection ~~effectiveness~~510(K) ~~compared~~Summary toof ~~the~~Safety ~~predicate~~and ~~device,~~Effectiveness ~~SoftVue~~that ~~System~~was ~~manufactured~~reviewed byand ~~Delphinus~~responded ~~Medical~~to ~~Technologies,~~by ~~were~~the ~~raised~~FDA.

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. On June 6, 2017, FDA, in response to QT Imaging’s Section 510(K) Summary of Safety and Effectiveness premarket notification, determined that the QT Breast Scanner is substantially equivalent to the predicate device. Our use of the words “safe”, “safety”, “effectiveness”, and “efficacy” in relation to the QT Breast Scanner in this Management's Discussion and Analysis and all other documents related to us is limited to the context of the Section 510(K) Summary of Safety and Effectiveness that was reviewed and responded to by the FDA.

Our strategies for commercializing the QT Breast Scanner include the following:

•Create disruptive technological innovation (software, artificial intelligence, and smart physics) to improve medical imaging and thus health care quality and access.

•Continue to improve our high quality, high resolution, native 3D, reproducible image quality regardless of operator or breast size/tissue type breast imaging technology, as well as the techniques for quantifiable analysis, comparison, and training.

•Partner with strategic business and distribution channels to address the U.S. market for breast imaging immediately and, other regions in the future, to place the QT Breast Scanner in hospitals, radiology centers, etc. and generate awareness of the benefits of our technology.

•Perform ~~small scale~~ manufacturing internally to ~~the~~us ~~Company~~ and partner strategically for large scale manufacturing.

•Expand the market by supporting additional Direct-to-Customer and Direct-to-Patient approaches to enable the ability to lower health care costs and increase access via personal medical imaging.

•Provide a new social and economic opportunity for consumers to take control of some aspects of their own health care—such as imaging for minor injuries or medical conditions without needing a healthcare “gate-keeper.”

•Focus our intellectual capabilities and ethical framework to become unified in our mission to improve the quality and lower the cost of health care world-wide . . . “It’s about time.”

~~Consistent~~On ~~with~~June ~~our strategy~~18, ~~on May 31~~2024, ~~2023,~~ we entered into the NXC ~~Sales~~Distribution ~~Agent~~ Agreement with NXC Imaging, ~~pursuant~~Inc. (“NXC”) to ~~which~~appoint ~~we appointed~~ NXC as the ~~non-~~exclusive ~~agent~~reseller ~~for~~to ~~the~~market, ~~sale~~advertise, ofand resell QT ~~Imaging~~Breast ~~products~~Scanners ~~and services~~ in ~~non-exclusive territories:~~ the U.S., and U.S. territories,. ~~and~~NXC ~~U.S.~~will ~~Department~~purchase for the purpose of ~~Defense~~reselling, ~~installations.~~leasing ~~Additionally~~or renting QT Breast Scanners directly to its customers, ~~NXC~~but ~~was~~is ~~appointed~~not asobligated ~~the~~to ~~exclusive~~purchase ~~servicer~~any particular quantity of QT ~~Imaging~~Breast ~~products~~Scanners ~~sold~~from byus. ~~NXC~~We ~~under~~have reserved the ~~terms~~right ofto ~~the~~sell ~~NXC~~directly ~~Agreement~~to customers as an exception. ~~Effective~~Furthermore, ~~June~~we 10may, ~~2024~~in our sole discretion, sell the QT Breast Scanners to any other person or entity

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the NXC 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. ~~As of December 31, 2024, we have delivered eight QT Breast Scanners to NXC’s customers pursuant to the NXC Sales Agent Agreement and NXC Distribution Agreement.~~ On December 11, 2024, we and NXC entered into the Amended NXC 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 NXC Distribution Agreement on March 28, 2025. The Amended NXC Distribution Agreement has a term that runs until December 31, 2026, unless earlier terminated or extended by mutual written agreement. As of December 31, 2025, we have delivered 48 QT Breast Scanners to NXC and NXC’s customers pursuant to the NXC Sales Agent Agreement and Amended NXC Distribution Agreement.

WeOn ~~have~~March ~~also~~28, 2025, we entered into the Canon ~~Letter~~Manufacturing ofAgreement ~~Intent~~(the “Canon Manufacturing Agreement”) with ~~CMSU~~Canon ~~and~~Medical ~~CMSC~~Systems, ~~pursuant~~Inc. (“CMSC”). Pursuant to ~~which~~the ~~CMSC~~terms ~~purchased~~of ~~and~~the ~~acquired~~Canon ~~two~~Manufacturing QTAgreement, ~~Breast~~we ~~Scanners~~appointed inCMSC as the ~~first~~exclusive ~~half~~manufacturer of ~~2024.~~the ~~The~~QT ~~Canon~~Breast ~~Letter~~Scanners ofto ~~Intent~~be ~~provided~~distributed ~~that~~by ~~CMSC~~NXC. ~~would~~QTI ~~conduct,~~retains ~~and~~the ~~pursuant~~right to ~~the~~perform ~~Feasibility~~manufacturing ~~Study~~in ~~Agreement~~Novato, ~~CMSC~~California. ~~conducted,~~The ~~the~~purchase ~~Feasibility~~prices ~~Study~~applicable onto the QTpurchase ~~Breast~~orders ~~Scanners~~as ~~that~~of itthe ~~acquired,~~date ~~including~~of ~~product~~the ~~quality~~Canon ~~validation,~~Manufacturing ~~development~~Agreement ~~and~~shall ~~manufacturing~~be ~~studies,~~separately ~~clinical~~agreed ~~evaluation,~~between ~~regulatory~~the ~~investigation~~parties ~~and~~in ~~marketing validation~~writing. The ~~Feasibility~~term ~~Study~~of ~~was~~the ~~completed~~Canon inManufacturing ~~the~~Agreement ~~second~~is ~~half~~through ofDecember ~~2024~~31, 2026.

~~The~~On ~~Canon~~August ~~Letter~~21, 2025, we entered into the Gulf Medical Distribution Agreement with GMC, a corporation organized and existing under the laws of ~~Intent~~Saudi ~~provided~~Arabia, ~~that~~for ~~upon~~an ~~successful~~Initial ~~conclusion~~Term of three years . Under the ~~Feasibility~~terms ~~Study~~of the Gulf Medical Distribution Agreement, we shall authorize and ~~CMSC~~grant ~~intended~~to GMC the exclusive right to ~~engage~~market, advertise and sell the QT Breast Scanners and the QTI Cloud SaaS platform subscriptions in the GMC Territory. If GMC has met the GMC Minimum Purchase Requirements during the Initial Term, the Gulf Medical Distribution Agreement shall automatically be extended for an additional one-year term. GMC agrees to meet or exceed the GMC Minimum Purchase Requirements during the Initial Term. In the event GMC fails to meet these GMC Minimum Purchase Requirements in any year during the Initial Term, we may, at its sole option, (a) ~~good~~terminate ~~faith~~GMC’s ~~discussion~~exclusive distributorship rights for the sale and promotion of the Approved Products granted under this Agreement and appoint other distributors for the GMC Approved Products in the GMC Territory, or (b) terminate the Gulf Medical Distribution Agreement. Should we elect to ~~develop~~so terminate GMC’s exclusive distributorship in the Territory, we may continue to sell the GMC Approved Products to GMC for GMC to distribute on a ~~binding~~non-exclusive ~~OEM~~basis ~~manufacturing~~in ~~agreement~~the Territory in accordance with ~~CMSC~~the terms and conditions of the Gulf Medical Distribution Agreement, and GMC’s ongoing obligations with regard to its GMC Minimum Purchase Requirements for the GMC Approved Products shall terminate. Should the Company be unable to furnish GMC with sufficient quantities of the GMC Approved Products, as may be requested by GMC in its Release Orders (as defined below) submitted to us in accordance with the terms of the Gulf Medical Distribution Agreement, then GMC’s Minimum Purchase Requirement shall be reduced by the quantity of GMC Approved Products that the Company is unable to deliver as requested. GMC shall secure all required governmental approvals, permits, licenses, customs clearances, and authorizations required for shipment to and use of the QT Breast Scanners in the Territory. We shall provide training and professional services to GMC during the term of the Gulf Medical Distribution Agreement and shall retain all intellectual property rights. Except as GMC and we may otherwise mutually agree in writing, provided that GMC maintains a credit limit with our credit insurance provider that has been approved in writing by us, GMC shall pay the Company fifty percent (50%) of the total price of the GMC Release Order upon order placement and fifty percent (50%) within 45 days from the date of shipping of the GMC Approved Products to GMC’s designated location(s), or in any of the agreed upon payment terms. We have provided for a limited warranty of at least one year, and up to five years, depending on the purchase price paid by a client of GMC for a GMC Approved Product. The Gulf Medical Distribution Agreement can be terminated only with the approval of both parties and, upon termination, GMC shall be permitted to sell any QT Breast Scanners that it holds in accordance with the Gulf Medical Distribution Agreement.

On ~~March~~January 2819, ~~2024~~2026, we entered into ~~the~~an ~~Feasibility~~exclusive ~~Study~~distribution ~~Agreement~~agreement ~~with~~for ~~CMSC. The term of~~ the ~~Feasibility~~Company’s ~~Study~~Breast ~~Agreement~~Acoustic ~~commenced~~CT onscanners ~~March~~and ~~28,~~QTI ~~2024~~Cloud ~~and~~SaaS ~~remained~~Platform in ~~force until~~ the ~~end~~UAE ~~of December 2024. In connection~~ with ~~the~~Al ~~Feasibility~~Naghi ~~Study~~Medical ~~Agreement~~Co., ~~CMSC~~a ~~initiated~~leading ~~studies~~distributor toof ~~evaluate~~medical ~~the~~devices. ~~business,~~The ~~technical,~~agreement ~~and~~provides ~~clinical~~for ~~values~~MOQs of ~~our~~seven ~~ultrasound~~scanners QTin ~~Breast~~2026 ~~Scanner~~(starting ~~including~~in ~~product~~the ~~quality~~second ~~validation~~quarter), ~~development~~increasing ~~and~~to ~~manufacturing~~16 ~~studies,~~scanners ~~clinical~~in ~~evaluation,~~2027 ~~regulatory investigation,~~ and ~~market~~20 ~~validation.~~scanners ~~CMSC~~in ~~has~~2028, nofor ~~right~~a tototal ~~reverse~~minimum ~~engineer~~of ~~the~~43 QTscanners ~~Breast~~representing ~~Scanner~~revenue ~~and~~of ~~may~~more ~~only~~than ~~modify~~$24 ~~and~~million ~~disassemble~~upon ~~the~~FDA QTapproval ~~Breast~~in ~~Scanner as necessary to conduct~~ the ~~Feasibility Study~~UAE.

OnWe ~~March~~have ~~28,~~incurred ~~2025,~~net weoperating ~~entered~~losses ~~into~~and ~~the~~negative ~~Canon~~cash ~~Manufacturing~~flows ~~Agreement~~from ~~with~~operations ~~CMSC. Pursuant~~since toour ~~the~~inception ~~terms~~and ofhad ~~the~~an ~~Canon~~accumulated ~~Manufacturing~~deficit ~~Agreement,~~of we$53.0 ~~appoint~~million ~~CMSC~~ as ~~the exclusive manufacture~~ of ~~the~~December 31, ~~QT Breast Scanners to be distributed by NXC~~2025. ~~The~~ ~~purchase~~During ~~prices applicable to~~ the ~~purchase~~year ~~orders~~ended asDecember of31, ~~the~~2025, ~~date~~we ofincurred ~~the~~a ~~Canon~~net ~~Manufacturing~~loss ~~Agreement~~of ~~shall~~$21.1 bemillion ~~separately~~and ~~agreed~~used ~~between~~$9.0 ~~the~~million ~~parties~~of cash in ~~writing~~operating activities. ~~The~~ ~~term~~We ofcontinue ~~the~~to ~~Canon~~incur ~~Manufacturing~~losses, ~~Agreement~~and isour ~~through~~ability ~~December~~to ~~31,~~achieve ~~2026.~~

We have incurred net operating losses and negative cash flows from operations since our inception and had an accumulated deficit of $31,940,527 as of December 31, 2024. During the year ended December 31, 2024, we incurred a net loss of $8,984,880 and used $10,033,477 of cash in operating activities, which includes the repayment of net liabilities assumed from the business combination. 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.87

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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.

We expect to incur additional recurring administrative expenses associated as a publicly traded company, including costs associated with compliance under the Exchange Act, annual and quarterly reports to stockholders, transfer agent fees, audit fees, incremental director and officer liability insurance costs, Sarbanes-Oxley Act compliance readiness, and director and officer compensation.

Recent Developments

On ~~November~~February 1526, ~~2023~~2025, we entered into the ~~SEPA~~Lynrock Lake Credit Agreement that provides a senior secured term loan (the “Lynrock Lake Term Loan”) with ~~GigCapital5~~Lynrock Lake. The Lynrock Lake Credit Agreement is secured by a first priority lien on substantially all our assets and ~~Yorkville,~~provides ~~pursuant~~for toa ~~which,~~term ~~upon~~loan in the ~~Closing~~aggregate principal amount of $10.1 million at an interest rate of 10.0% per annum, compounded quarterly. The maturity date of the ~~Business~~Lynrock ~~Combination~~Lake Credit Agreement is March 31, 2027. Furthermore, in connection with the Lynrock Lake Term Loan, we ~~can~~issued ~~sell~~the toLynrock ~~Yorkville~~Lake upWarrant, which is a warrant to ~~$50.0~~purchase ~~million~~20,333,623 shares of our common stock at ~~our~~an ~~request~~exercise ~~any~~price ~~time~~of ~~during~~$1.20 ~~the~~per 36share. ~~months~~The ~~following~~Lynrock ~~the~~Lake ~~Closing~~Warrant ofis ~~the~~exercisable ~~Business~~until ~~Combination~~February 26, 2035. InLynrock ~~addition,~~Lake ~~pursuant~~may tocashless exercise the ~~SEPA,~~Lynrock weLake ~~were~~Warrant. ~~entitled~~The toLynrock ~~and~~Lake ~~did~~Warrant ~~request~~is aalso ~~“Pre~~subject to anti-~~Paid~~dilution ~~Advance”~~adjustments ~~from~~to ~~Yorkville~~the exercise price and ~~issued~~the ~~Yorkville~~number of shares which may be purchased upon exercise of the ~~Yorkville~~Lynrock ~~Note~~Lake Warrant in the ~~amount~~event that we issue shares of ~~$10.0~~common ~~million~~stock (or derivative securities) at a price that is either less than the ~~closing~~$1.20 ofexercise price or the ~~Business~~fair ~~Combination~~market ~~for~~value ~~such~~of ~~Pre-Paid~~a ~~Advance.~~share Asof ~~consideration~~common ~~for~~stock from the ~~Pre-Paid~~immediately prior trading day.

~~103~~On February 26, 2025, we used a portion of the proceeds of the Lynrock Lake Term Loan to pay Yorkville an amount equal to $3.0 million 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.

On February 26, 2025, we used a portion of the proceeds of the Lynrock Lake Term Loan to pay Cable Car an amount equal to the full principal, interest and fees amount of approximately $1.6 million in cash to fully settle and discharge our obligations under the Cable Car Note and extinguish the Cable Car Note as having been fully performed.

In connection with the issuance of the Lynrock Lake Term Loan, on February 26, 2025, the maturity dates on both the Convertible Note Payable and Working Capital Notes were extended to October 21, 2027.

On April 9, 2025, we entered into a Securities Purchase Agreement (the “First Securities Purchase Agreement”) by and between the Company, on the one hand, and Dr. Avi Katz, the Chairman of the board of directors, and Dr. Raluca Dinu, the Chief Executive Officer and a member of the board of directors, on the other hand, for the “April 2025 Private Placement”). On April 24, 2025, at the closing of the April 2025 Private Placement, we issued (i) 261,644 shares of common stock at a per share purchase price of $1.911, which represented 110% of the volume weighted trading price for the common stock on April 9, 2025; and (ii) the Ten Year Common Warrants with a term of ten years from the initial exercise date to purchase up to an additional 523,286 shares of common stock with a per share exercise price of $2.16. The aggregate gross proceeds to us from the April 2025 Private Placement was approximately $0.5 million, before deducting the offering expenses payable by us, which expenses consisted solely of legal fees.

On May 12, 2025, we entered into a Securities Purchase Agreement (the “Second Securities Purchase Agreement”) for the Second Private Placement in an amount of approximately $0.2 million, pursuant to which we issued 68,447 shares of common stock plus the Recanati Warrant to purchase 68,447 shares of common stock. The Second Private Placement provides a per share purchase price of $2.922, which represents 110% of the five-day volume weighted trading price for the common stock through May 9, 2025, and the per share exercise price of

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