QT IMAGING HOLDINGS, INC.QTI
QT IMAGING HOLDINGS, INC. Stock Compensation Disclosure
Stock Incentive Plans
Inducement Equity Incentive Plan
On August 22, 2025, the Company adopted the Inducement Equity Incentive Plan (the “Inducement EIP”), which authorized 108,333 shares of common stock. On November 14, 2025, the Company authorized an additional 220,000 shares of common stock under the Inducement EIP. RSUs to purchase 220,000 shares of common stock at a weighted-average fair value of $6.25 per share, were issued during the year ended December 31, 2025. There was no intrinsic value for the options outstanding as of December 31, 2025. The following table summarizes information regarding activity in the Inducement EIP during the year ended December 31, 2025:
| (Shares in thousands) | Number of Options | Weighted- Average Exercise Price | Weighted-Average Remaining Contractual Life (years) | Number of RSUs | Weighted-Average Remaining Contractual Life (years) | ||||||||||||||||||||||||
| Outstanding, January 1, 2025 | — | $ | — | — | — | — | |||||||||||||||||||||||
| Options granted | 108 | 7.47 | 9.7 | — | — | ||||||||||||||||||||||||
| RSUs granted | — | — | — | 220 | 9.9 | ||||||||||||||||||||||||
| Outstanding, December 31, 2025 | 108 | $ | 7.47 | 9.7 | 220 | 9.9 | |||||||||||||||||||||||
| Vested as of December 31, 2025 | — | — | — | — | — | ||||||||||||||||||||||||
| Expected to vest as of December 31, 2025 | 108 | $ | 7.47 | 9.7 | 220 | 9.9 | |||||||||||||||||||||||
2024 Equity Incentive Plan
On February 15, 2024, at the Annual Meeting, the GigCapital5 stockholders considered and approved the 2024 Equity Incentive Plan (the “2024 EIP”) and reserved 786,031 shares of common stock for issuance thereunder. The 2024 EIP became effective immediately upon the closing of the Business Combination on March 4, 2024. The term of the 2024 EIP is 10 years. The number of shares of common stock reserved for issuance under the 2024 EIP will automatically increase on January 1 of each year, beginning on January 1, 2025 and continuing through January 1, 2035, by 5% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Board of Directors. Under the 2024 EIP, the Company may issue stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), RSUs, and performance awards (“PAs”). The term of stock options may not exceed 10 years and is subject to vesting conditions, which is subject to the option holder’s continued service to the Company. The exercise price of any stock option award cannot be less than fair market value of the Company’s common stock, provided, however, that an incentive stock option granted to an employee who owns more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary, must have an exercise price of no less than 110% of the fair market value of the Company’s common stock and a term that does not exceed five years.
On January 1, 2025, an additional 446,137 shares of common stock were added to the 2024 EIP.
The following table summarizes information regarding activity in the 2024 EIP during the year ended December 31, 2025 (in thousands, except per share price):
| Number of Options | Weighted- Average Exercise Price | Weighted-Average Remaining Contractual Life (years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding, January 1, 2025(1)(2) | 652 | $ | 2.25 | 9.5 | $ | 2,512 | |||||||||||||||||
Granted | 641 | 2.71 | 2,173 | ||||||||||||||||||||
Exercised | (33) | 2.25 | 128 | ||||||||||||||||||||
Cancelled | (144) | 2.20 | 560 | ||||||||||||||||||||
| Outstanding, December 31, 2025 | 1,116 | $ | 2.52 | 8.4 | $ | 3,996 | |||||||||||||||||
| Exercisable as of December 31, 2025 | 557 | $ | 2.14 | 7.7 | $ | 2,204 | |||||||||||||||||
| Expected to vest as of December 31, 2025 | 559 | $ | 2.89 | 9.1 | $ | 1,792 | |||||||||||||||||
(1)Share amounts as of January 1, 2025 and prior to that date differ from those published in prior consolidated financial statements as they were retrospectively adjusted as a result of the Reverse Stock Split (As described in Note 1, The Company and Summary of Significant Accounting Policies). Specifically, the number of common stock outstanding during the periods before the Reverse Stock Split are divided by the exchange ratio of 3:1, such that each three shares of common stock were combined and reconstituted into one share of common stock effective October 23, 2025.
(2)The options outstanding as of December 31, 2024 were revised by 88,000 from the amount previously reported on the Annual Report on Form 10-K for the year ended December 31, 2024. The effect on stock-based compensation was immaterial.
The determination of the fair value of options granted under the Inducement EIP and the 2024 EIP during the years ended December 31, 2025 and 2024 was computed using the Black-Scholes option pricing model with the following weighted-average assumptions:
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||
| Stock price per share | $ | 3.40 | $ | 2.16 | |||||||
| Expected option term (years) | 5.6 | 5.7 | |||||||||
| Expected volatility | 71.4 | % | 67.9 | % | |||||||
| Risk-free rate of return | 4.0 | % | 4.3 | % | |||||||
| Expected annual dividend yield | — | % | — | % | |||||||
Weighted-average grant date fair value | $ | 2.21 | $ | 1.38 | |||||||
Option pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility is based on the analysis of volatilities of the Company’s selected public peer group over a period commensurate with the expected term of the options. The expected term of employee options represents the weighted-average period the options are expected to remain outstanding and was derived using the simplified method for awards that qualify for its “plain-vanilla” options. All awards that are outstanding are qualified for “plain-vanilla” options. The risk-free interest rate is based on the U.S. Treasury interest rates whose term in consistent with the expected life of the stock options. No dividend yield is included as the Company has not issued any dividends and does not anticipate issuing any dividends in the future.
Stock-based Compensation
The following table shows stock-based compensation expense by functional area in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024:
| Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Research and development | $ | 72 | $ | 58 | ||||||||||
| Selling, general and administrative | 729 | 232 | ||||||||||||
| $ | 801 | $ | 290 | |||||||||||
Stock-based compensation expense capitalized to inventory for years ended December 31, 2025 and 2024 was insignificant.
As of December 31, 2025, the total unrecognized compensation cost related to all nonvested stock options and RSUs was $2.7 million and the weighted-average period over which it is expected to be recognized is 3.1 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 25, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.