QT Imaging and Kopin Corporation Report Q2 2024 Financial Results

QT Imaging Announces Second Quarter 2024 Financial Results

QT Imaging Holdings, Inc. (NASDAQ: QTI) ("QT Imaging" or the "Company"), a medical device company engaged in research, development, and commercialization of innovative body imaging systems, today announced financial results for the second quarter of 2024. "QT Imaging's team completed the first full quarter in the life of our young public company. We continued to deliver against our plan for the engineering and clinical feasibility study to solidify the intended partnership for large scale manufacturing. Additionally, we shipped four Breast Acoustic CT scanners throughout the quarter, three of them via partnership with our strategic distribution partner, increasing the number of commercial locations offering QT Imaging technology in the U.S. to five. This reflects our commitment to expanding the medical imaging market opportunities beyond hospitals and imaging centers, by supporting direct-to-provider approaches to enable the ability to lower health care costs and increase access via personal medical imaging, " said QT Imaging CEO, Dr. Raluca Dinu. "Additionally, we are very proud to report on our partnership with the University of Oklahoma (OU) and the OU Health Stephenson Cancer Center to advance and scale innovative research in medical imaging and to improve precision in cancer detection and treatment. We look forward to collaborating with OU and OU Health Stephenson Cancer Center investigators and clinicians to develop AI/ML-based algorithms tailored for our inherent 3D images to ease clinical workflows. QT Imaging technology's ability to safely image frequently for disease progression as well as its ability to assess volumetric breast density without exposing the patient to radiation are at the forefront of this partnership." 2024 is a transitional year as the Company stabilizes the business and focuses on commercialization anchored in strategic business partnerships. The Company plans to deliver its revenue at the same pace in the second half of 2024 as during the first half of the year, with an expected higher gross margin due to the weighted average cost of existing inventory. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "potential," "seem," "seek," "future," "outlook," and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the QT Imaging Breast Acoustic CT™ Scanner, including its commercialization, manufacturing (including large scale) and further development, plans for QT Imaging, new product development and introduction, product sales growth and projected revenues, QT Imaging's industry, future events, and other statements that are not historical facts. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. These statements are based on various assumptions, whether or not identified herein, and on the current expectations of QT Imaging's management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by you or any other investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond our control. These forward-looking statements are subject to a number of risks and uncertainties, including those relating to: the ability of the Company to sell and deploy the QT Imaging Breast Acoustic CT™ Scanner; the ability to extend product offerings into new areas or products; the ability to commercialize technology; unexpected occurrences that deter the full documentation and "bring to market" plan for products; trends and fluctuations in the industry; changes in demand and purchasing volume of customers; unpredictability of suppliers; the ability to attract and retain qualified personnel and the ability to move product sales to production levels; changes in domestic and foreign business, market, financial, political, and legal conditions; the uncertainty of projected financial information; delays caused by factors outside of our control; changes in our ability to successfully receive purchase orders and generate revenue under our existing contracts with partners and distributors; our ability to realize the benefits of the strategic partnerships; the identified material weakness in our internal controls over financial reporting (including the timeline to remediate the material weakness); the rollout of the business and the timing of expected business milestones; the effects of competition on our future business; our ability to obtain and access financing in the future; our ability to pay our debt obligations as they come due; and those factors discussed in the Company's reports and other documents filed with the SEC, including under the heading "Risk Factors." If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that QT Imaging presently does not know or that QT Imaging currently believes are immaterial which could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect QT Imaging's expectations, plans or forecasts of future events and views as of the date of this release. QT Imaging anticipates that subsequent events and developments will cause QT Imaging's assessments to change. However, while QT Imaging may elect to update these forward-looking statements at some point in the future, QT Imaging specifically disclaims any obligation to do so. Accordingly, undue reliance should not be placed upon the forward-looking statements. Non-GAAP Financial Measures The financial information and data contained in this press release is unaudited. Some of the financial information and data contained in this press release, such as EBITDA and Adjusted EBITDA, have not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). To supplement our unaudited condensed consolidated financial statements, which are prepared and presented in accordance with GAAP in our press release, we also report certain non-GAAP financial measures. A "non-GAAP financial measure" refers to a numerical measure of a company's historical or future financial performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in such company's financial statements. Non-GAAP financial measures should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis. Because not all companies use identical calculations, our presentation of non-GAAP measures may not be comparable to other similarly titled measures of other companies. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP and should not be considered measures of QT Imaging's liquidity. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of certain items, as defined in our non-GAAP definitions below, which are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be different from non-GAAP financial measures used by other companies, even where similarly titled, limiting their usefulness for comparison purposes and therefore should not be used to compare QT Imaging's performance to that of other companies. We endeavor to compensate for the limitation of the non-GAAP financial measures presented by also providing the most directly comparable GAAP measures and descriptions of the reconciling items and adjustments to derive the non-GAAP financial measures. We believe these non-GAAP financial measures provide investors and analysts with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key measures used by management to operate and analyze our business over different periods of time. EBITDA is defined as loss before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted for equity-based compensation, net change in fair value of the derivative, earnout and warrant liabilities, and transaction expenses. Similar excluded expenses may be incurred in future periods when calculating these measures. QT Imaging believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. QT Imaging believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating projected operating results and trends and in comparing QT Imaging's financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's condensed consolidated financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expense and income items are excluded or included in determining these non-GAAP financial measures. Management uses EBITDA and Adjusted EBITDA as a non-GAAP performance measure which is defined in the accompanying tables and is reconciled to net loss, the most directly comparable GAAP measure, in the tables above. The Company does not reconcile forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measure (or otherwise describe such forward-looking GAAP measure) because it is not able to forecast the most directly comparable measure calculated and presented in accordance with GAAP without unreasonable effort. Certain elements of the composition of the GAAP amounts are not predictable, making it impracticable for the Company to forecast. As a result, no guidance for the Company's net income (loss) income or reconciliation of the Company's Adjusted EBITDA guidance is provided. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a potentially significant impact on its future net income (loss) income. We present reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures in the tables above. About QT Imaging QT Imaging Holdings, Inc. is a public (NASDAQ: QTI) medical device company engaged in research, development, and commercialization of innovative body imaging systems using low frequency sound waves. QT Imaging Holdings, Inc. strives to improve global health outcomes. Its strategy is predicated upon the fact that medical imaging is critical to the detection, diagnosis, and treatment of disease and that it should be safe, affordable, accessible, and centered on the patient's experience. For more information on QT Imaging Holdings, Inc., please visit the company's website at www.qtimaging.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20240808190805/en/

Kopin Corporation Reports Financial Results for the Second Quarter 2024

Kopin Corporation (Nasdaq: KOPN), a leading provider of application-specific optical solutions and high-performance microdisplays for defense, enterprise, consumer, and medical products, today reported financial results for the second quarter ended June 29, 2024. Commenting on the quarterly results, Michael Murray, Chief Executive Officer, stated, "The second quarter was highlighted by continued sales momentum of our products for defense applications, delivering year over year growth of 106% and five new customer development orders which provide significant multi-million dollar per year production revenue opportunities in the future. This progress has validated our strategy that we began last year to reset the course within Kopin to focus on defense products. Additionally, as we continue our output ramp on our thermal weapon sight contracts, our sustained focus on operational excellence resulted in enhanced margins for this critical product line and the company. "As we move into the second half of the year, we expect continued growth from new customers and projects, which during the second quarter included the development award for the U.S. Army's Next Generation-Short Range Interceptor (NG-SRI) system, which is expected to replace the Stinger Missile. We were selected to design, develop, and produce the targeting eye piece for the program, won by Lockheed Martin. The program is expected to move into full rate production in 2027, which we estimate could provide Kopin with tens of millions in revenue, in peak annual production. "Kopin was also selected for several new Phase One development contracts including with the U.S. Army to research optical approaches for Visual Augmentation Systems to improve performance, and lessen cognitive dissonance and nausea. We also received a development contract with the U.S. Navy to research and produce a means to reduce the size and weight of the optics needed in advanced sensor systems. In addition to these research and development awards, we partnered with market leading firms like Wilcox Industries on several new dismounted soldier products and demonstrated our progress on our innovative AI enabled NeuralDisplay™ hardware and software architecture. "Looking ahead we expect to continue accelerating our growth with a strong order book of new and long-standing customers and expect to see the benefits of our efforts with new designs and opportunities. We are leveraging our increased emphasis on business development to expand into new international markets. We continue to believe Kopin is well positioned to deliver long-term growth for our shareholders," concluded Murray. Second Quarter Financial Results Total revenues for the second quarter ended June 29, 2024, were $12.3 million, compared to $10.5 million for the second quarter ended July 1, 2023, an 18% increase. Year-over-year product revenues increased 84%, with defense product revenues increasing by $5.4 million or 106% year over year, while industrial product revenues decreased by $0.3 million or 30% year over year. Second quarter 2024 funded research and development revenues declined by $2.7 million or 70% as certain defense development programs were successfully completed and are now moving into low-rate initial production. Cost of Product Revenues for the second quarter of 2024 were $8.7 million, or 79% of net product revenues, compared with $5.7 million, or 95% of net product revenues for the second quarter of 2023. The decrease in cost of product revenue as a percent of net product revenues for the three months ended June 29, 2024, as compared to the three and six months ended July 1, 2023 was due to a decrease in expected rework costs, attributed in part to sustained improvements in labor hours/unit, improved work instructions, reduced scrap rates and lower customer acceptance reject rates. We estimate that the lower estimated rework cost improved gross margins by approximately $1.3 million for the three months ended June 29, 2024. Research and Development (R&D) expenses for the second quarter of 2024 were $1.8 million compared to $3.1 million for the second quarter of 2023, a decrease of 41% from the prior year. Customer-funded R&D expense declined $1.5 million in the second quarter of 2024 as compared to the second quarter of 2023, while internal R&D increased $0.2 million year over year. The decline in customer-funded R&D programs was due to decreased spending on specific U.S. defense programs and programs previously in development were successfully completed. Internal R&D expense increased due to an increase in process improvements and NeuralDisplay™ advancements. Selling, General and Administration (SG&A) expenses were $7.3 million for the second quarter of 2024, compared to $6.5 million for the second quarter of 2023. The increase for the three months ended June 29, 2024, as compared to the three months ended July 1, 2023, was primarily due to an increase in legal fees of $1.2 million, partially offset by a decrease in credit loss expense of $0.2 million. Included in SG&A was legal fees associated with the BlueRadios lawsuit of $3.1 million for the second quarter of 2024 and $1.9 million for the second quarter of 2023. The Net Loss for the second quarter of 2024 was ($5.9) million, or ($0.05) per share, compared with ($8.2) million, or ($0.07) per share, for the second quarter of 2023. All amounts above are estimates and readers should refer to our Form 10-Q for the quarter ended June 29, 2024, for final disposition as well as important risk factors. Earnings Call and Webcast Kopin management will host the conference call, followed by a question and answer session. Date: Thursday, August 8, 2024 Time: 8:30 AM Eastern Time (5:30 AM Pacific Time) U.S. dial-in number: 888-349-0106 International number: 412-902-0131 Webcast: Q2 2024 Webcast Link The Company will also provide a link at https://www.kopin.com/investors/ for those who wish to stream the call via webcast. Please call the conference telephone number 5-10 minutes prior to the start time. A telephonic replay of the conference call will also be available through August 15, 2024. Kopin Corporation is a leading developer and provider of innovative display and optical technologies sold as critical components and subassemblies for defense, industrial and consumer products. Kopin's technology portfolio includes ultra-small Active-Matrix Liquid Crystal displays (AMLCD), Liquid Crystal on Silicon (LCOS) displays and Organic Light Emitting Diode (OLED) displays, MicroLED (µLED) displays, a variety of optics, and low-power ASICs. For more information, please visit Kopin's website at www.kopin.com. Kopin is a trademark of Kopin Corporation. Forward-Looking Statements Statements in this press release may be considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are subject to the safe harbor created by such sections. Words such as "expects," "believes," "can," "will," "estimates," and variations of such words and similar expressions, and the negatives thereof, are intended to identify such forward-looking statements. We caution readers not to place undue reliance on any such "forward-looking statements," which speak only as of the date made, and advise readers that these forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions by us that are difficult to predict. Various factors, some of which are beyond our control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These forward-looking statements may include statements with respect to our expectation of five new customer development orders providing significant multi-million dollar per year production revenue opportunities in the future; our expectation of continued growth from new customers and projects; our expectation that the U.S. Army's Next Generation-Short Range Interceptor (NG-SRI) system will move into full rate production in 2027 and can provide Kopin with tens of millions in revenue in peak annual production; our expectation of continuing to accelerate our growth with a strong order book of new and long-standing customers; our expectation to see the benefits of our efforts with new designs and opportunities; and our belief that Kopin is well positioned to deliver long-term growth for our shareholders. All such forward-looking statements, whether written or oral, and whether made by us or on our behalf, are expressly qualified by these cautionary statements and any other cautionary statements that may accompany the forward-looking statements. In addition, we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release, except as may otherwise be required by the federal securities laws. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management's expectations are described in Part I, Item 1A. Risk Factors; Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations; and other parts of our Annual Report on Form 10-K for the fiscal year ended December 30, 2023, or as updated from time to time our Securities and Exchange Commission filings.