Imaging firm finally executes merger following lawsuit and months of delays
An imaging vendor has finally executed a merger deal following months of delays and a lawsuit to push along the closing.
Investment firm GigCapital Global announced the finalization of its acquisition of QT Imaging on March 4. The latter is a Novato, California-based maker of medical technology including the QT Imaging Breast Acoustic CT Scanner.
GigCapital Global, meanwhile, specializes in taking other companies from private ownership to public trading. Leaders there formed a “special purpose acquisition corporation”—a blank check, shell company listed on a stock exchange for the purpose of acquiring an entity—in late 2022. “GigCapital5 Inc.” and QT Imaging have now combined into a single company carrying a combined equity value of $151 million (according to previous estimates).
“The completion of our business combination with GigCapital5 and emergence as a publicly traded company is a landmark achievement for QT Imaging,” internist John Klock, MD, CEO and founder of QTI, said in an announcement. “One that we would not have reached without the hard work and focus of our dedicated employees and the support of our partners at GigCapital5, more so in this very difficult time for fundraising and growing micro-cap companies.”
Both sides first began discussing the proposed deal in late 2022 with hopes of closing by mid-2023. However, talks stalled and in September, GigCapital filed suit, trying to force the deal to move forward. At the time, it accused QTI of engaging in conversations with a third party that were “contrary to the exclusivity provision” of their agreement.
However, discussions eventually got back on track, with shareholders voting to approve the proposed business combination in February. The combined company was slated to receive about $41 million in gross proceeds from GigCapital5’s trust account along with $26 million more in financing, “to be raised prior to the closing of the business combination,” according to the original announcement from 2022.
QT Imaging officially started trading on the Nasdaq March 5 under the ticker symbol QTI. Shares were up more than 9% late Thursday, at about $1.40 apiece.
With nearly $18 million in support from the National Institutes of Health, along with money from private investors, QTI has developed body imaging technology based on low frequency transmitted sound. It uses a “one of a kind” novel sound back-scatter design and inverse-scattering reconstruction to create images. The company’s QT Imaging Breast Acoustic CT scanner is cleared by the FDA as an adjunct to mammography and eliminates the need for breast compression, officials noted.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.