Form 10-Q - Quarterly report [Sections 13 or 15(d)]

GCTS Wts each whole warrant exercisable one share of Common Stock

GCTS Wts each whole warrant exercisable one share of Common Stock

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2024


☐	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: 001-41013

GCT Semiconductor Holding, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	84-2171699
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2290 North 1st Street, Suite 201 San Jose, California	95131
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (408) 434-6040

Concord Acquisition Corp III

477 Madison Avenue, 22^nd Floor

New York, New York 10022

(Former name or former address, if changed since last report)

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	GCTS	The New York Stock Exchange
Warrants, each whole warrant exercisable for one share of Common Stock for $11.50 per share	GCTSW	The New York Stock Exchange

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 ☒ No ☐

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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 10, 2024, the registrant had 45,890,164 shares of common stock, $0.0001 par value per share, outstanding.

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Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about our financial condition, results of operations, earnings outlook and our prospects. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of our management and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following:

●

our financial and business performance, including our financial projections and business metrics;

●

changes in our strategy, future operations, financial position, estimated revenues and losses, forecasts, projected costs;

●

unexpected increases in our expenses resulting from inflationary pressures and rising interest rates, including manufacturing and operating expenses and interest expenses;

●

our inability to anticipate the future market demands and future needs of our customers;

●

our ability to develop new 5^th generation (“5G”) products under collaboration agreements with our major partners;

●

the impact of component shortages, suppliers’ lack of production capacity, natural disasters or pandemics on our sourcing operations and supply chain;

●

our future capital requirements and sources and uses of cash;

●

our ability to obtain funding for its operations;

●

our anticipated financial performance, including gross margin, and the expectation that our future results of operations will fluctuate on a quarterly basis for the foreseeable future;

●

our expected capital expenditures, cost of revenue and other future expenses, and the sources of funds to satisfy the liquidity needs of the Company;

●

the outcome of any legal proceedings that may be instituted against us following completion of the Business Combination and transactions contemplated thereby;

●

our ability to maintain the listing of our Common Stock on the NYSE;

●

the risk that the Business Combination disrupts current plans and operations;

●

the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, and the ability of us to grow and manage growth profitably;

●

costs related to the Business Combination; and

●

other risks and uncertainties indicated in this Quarterly Report on Form 10-Q, including those set forth under the section entitled “Risk Factors.”

A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section entitled “Risk Factors” contained in our Form S-1 filed with the Securities and Exchange Commission (“SEC”) on April 19, 2024. These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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		Page
PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income (Loss)	3
	Condensed Consolidated Statements of Stockholders’ Deficit	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

Part II.	OTHER INFORMATION	36

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
Signatures		38

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

GCT SEMICONDUCTOR HOLDING, INC.

Condensed Consolidated Balance Sheets

(in thousands, except per share data)


	March 31, 2024		December 31, 2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	16,122	$	258
Accounts receivable, net		5,103		4,920
Inventory		1,784		1,486
Contract assets		4,313		3,439
Prepaid expenses and other current assets		5,466		2,906
Total current assets		32,788		13,009
Property and equipment, net		644		772
Operating lease right-of-use assets		1,343		1,521
Intangibles, net		187		245
Other assets		857		881
Total assets	$	35,819	$	16,428

Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	1,242	$	17,814
Contract liabilities		35		48
Accrued and other current liabilities		25,152		23,956
Borrowings		39,840		44,509
Convertible promissory notes, current		5,645		27,794
Operating lease liabilities, current		679		680
Total current liabilities		72,593		114,801
Convertible promissory notes, net of current		4,672		6,239
Net defined benefit liabilities		7,488		7,689
Long-term operating lease liabilities		674		850
Income taxes payable		2,096		2,178
Warrant liabilities		10,584		—
Other liabilities		72		108
Total liabilities		98,179		131,865
Commitments and contingencies (Note 8)
Stockholders’ deficit:
Preferred stock, par value $0.0001 per share; 40,000 and 82,352 shares authorized as of March 31, 2024 and December 31, 2023, respectively; no shares issued and outstanding as of March 31, 2024 and December 31, 2023		—		—
Common stock, par value $0.0001 per share; 400,000 and 200,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; 45,833 and 24,166 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively⁽¹⁾		5		3
Additional paid-in capital⁽¹⁾		487,006		435,752
Accumulated other comprehensive loss		(474)		(1,538)
Accumulated deficit		(548,897)		(549,654)
Total stockholders’ deficit		(62,360)		(115,437)
Total liabilities and stockholders’ deficit	$	35,819	$	16,428

(1)	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined in the Notes to the Unaudited Condensed Consolidated Financial Statements.)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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GCT SEMICONDUCTOR HOLDING, INC.

Condensed Consolidated Statements of Operations

(unaudited, in thousands, except per share amounts)


	Three Months Ended
	March 31,
	2024		2023
Net revenues:
Product	$	2,378	$	599
Service		887		2,463
Total net revenues		3,265		3,062
Cost of net revenues:
Product		654		978
Service		658		563
Total cost of net revenues		1,312		1,541
Gross profit		1,953		1,521
Operating expenses:
Research and development		5,521		902
Sales and marketing		996		836
General and administrative		2,836		1,477
Gain on extinguishment of liability		(14,636)		—
Total operating (income) expenses		(5,283)		3,215
Income (loss) from operations		7,236		(1,694)
Interest expense		(2,082)		(935)
Other (expenses) income, net		(4,338)		1,286
Income (loss) before provision for income taxes		816		(1,343)
Provision for income taxes		59		50
Net income (loss)		757		(1,393)

Net income (loss) per common share⁽¹⁾:
Basic	$	0.03	$	(0.06)
Diluted	$	0.03	$	(0.06)
Weighted-average shares used in computing net income (loss) per common shares⁽¹⁾:
Basic		25,468		23,862
Diluted		26,257		23,862

(1)

Amounts as of December 31, 2023 and before that date differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined in the Notes to the Unaudited Condensed Consolidated Financial Statements).

The accompanying notes are an integral part of these condensed consolidated financial statements.

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GCT SEMICONDUCTOR HOLDING, INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(unaudited, in thousands)


	Three Months Ended
	March 31,
	2024		2023
Comprehensive income (loss), net of taxes:
Net income (loss)	$	757	$	(1,393)
Foreign currency translation adjustment		1,064		674
Comprehensive income (loss)	$	1,821	$	(719)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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GCT SEMICONDUCTOR HOLDING, INC.

Condensed Consolidated Statements of Stockholders’ Deficit

(unaudited, in thousands)


						Accumulated
				Additional		Other					Total
	Common Stock			Paid-In		Comprehensive		Accumulated			Stockholders’
	Shares	Amount		Capital		Income (Loss)		Deficit		Deficit
Balance as of December 31, 2023	129,396	$	129	$	435,626	$	(1,538)	$	(549,654)	$	(115,437)
Reverse recapitalization	(105,230)		(126)		126		—		—		—
Balance as of December 31, 2023⁽¹⁾	24,166		3		435,752		(1,538)		(549,654)		(115,437)
Reverse recapitalization transaction, net of transaction costs and acquired liabilities	21,667		2		50,031		—		—		50,033
Stock-based compensation	—		—		1,223		—		—		1,223
Foreign currency translation adjustment	—		—		—		1,064		—		1,064
Net income	—		—		—		—		757		757
Balance as of March 31, 2024	45,833	$	5	$	487,006	$	(474)	$	(548,897)	$	(62,360)


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Income (Loss)		Deficit		Deficit
Balance as of December 31, 2022	127,761	$	128	$	433,990	$	(1,862)	$	(527,185)	$	(94,929)
Reverse recapitalization	(103,900)		(126)		126		—		—		—
Balance as of December 31, 2022⁽¹⁾	23,861		2		434,116		(1,862)		(527,185)		(94,929)
Issuance of common stock upon exercise of stock options⁽¹⁾	5		—		1		—		—		1
Stock-based compensation⁽¹⁾	—		—		2		—		—		2
Foreign currency translation adjustment	—		—		—		674		—		674
Net loss	—		—		—		—		(1,393)		(1,393)
Balance as of March 31, 2023⁽¹⁾	23,866	$	2	$	434,119	$	(1,188)	$	(528,578)	$	(95,645)

(1)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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GCT SEMICONDUCTOR HOLDING, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)


	Three Months Ended March 31,
	2024		2023
Operating activities:
Net income (loss)	$	757	$	(1,393)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		206		225
Operating lease right-of-use amortization		176		168
Finance lease right-of-use amortization		—		4
Stock-based compensation		1,223		2
Provision for credit losses		247		—
Gain on extinguishment of liability		(14,636)		—
Change in valuation of convertible promissory notes		1,203		(549)
Change in valuation of warrant liabilities		4,626		—
Changes in operating assets and liabilities:
Accounts receivable		(501)		2,144
Inventory		(298)		(651)
Contract assets		(874)		(1,769)
Prepaid expenses and other current assets		(2,292)		102
Other assets		24		35
Accounts payable		(2,713)		133
Contract liabilities		(13)		(650)
Accrued and other current liabilities		(1,067)		1,048
Net defined benefit liabilities		109		186
Income tax payable		(83)		—
Lease liabilities		(177)		(170)
Other liabilities		(330)		(345)
Net cash used in operating activities		(14,413)		(1,480)

Investing activities:
Purchases of property and equipment		—		(118)
Net cash used in investing activities		—		(118)

Financing activities:
Proceeds from exercise of stock options		—		1
Proceeds from bank borrowings		—		582
Proceeds from issuance of convertible promissory notes		16,290		—
Proceeds from reverse recapitalization and PIPE Financing, net of transaction costs		17,238		—
Repayment of bank borrowings		(3,254)		(31)
Net cash provided by financing activities		30,274		552
Effect of exchange rate changes on cash and cash equivalents		3		(52)
Net increase (decrease) in cash and cash equivalents		15,864		(1,098)
Cash and cash equivalents at beginning of year		258		1,398
Cash and cash equivalents cash at end of year	$	16,122	$	300
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,183	$	368
Cash paid for income taxes	$	3	$	3
Cash paid for amounts included in the measurement of operating leases	$	192	$	195
Issuance of common stock from conversion of convertible promissory notes and accrued interest	$	41,209	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

1.Organization and Liquidity

Description of Business

GCT Semiconductor Holdings, Inc. (formerly known as Concord Acquisition Corp III) and its wholly owned subsidiaries (collectively “GCT”, or the “Company”) is headquartered in San Jose, California with international offices in Korea, China, Taiwan, and Japan. The Company is a fabless semiconductor company that specializes in the design, manufacturing and sale of communication semiconductors, including high-speed wireless communication technologies such as 5G/4.75G/4.5G/4G transceivers and modems, which are essential for a wide variety of industrial, B2B and consumer applications.

On March 26, 2024 (the “Closing Date” or “Closing”), Concord Acquisition Corp III (“Concord III”), a Delaware corporation, consummated a series of transactions that resulted in the combination of Gibraltar Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Concord III (“Merger Sub”), and GCT Semiconductor, Inc. (hereinafter referred to as “Legacy GCT”), pursuant to a Business Combination Agreement, dated November 2, 2023 (as amended, the “Business Combination Agreement”), by and among Concord III, Merger Sub and Legacy GCT. Pursuant to the terms of the Business Combination Agreement, Merger Sub merged with and into Legacy GCT, with Legacy GCT surviving the merger as a wholly-owned subsidiary of Concord III (the “Business Combination”). On the Closing Date, Concord III changed its name from Concord III to “GCT Semiconductor Holding, Inc.”

The Business Combination was accounted for as a reverse recapitalization with Legacy GCT being the accounting acquirer and Concord III as the acquired company for accounting purposes. Accordingly, all historical financial information presented in the unaudited condensed consolidated financial statements represent the accounts of Legacy GCT. Pursuant to the Business Combination Agreement, the shares and net loss per common share prior to the Closing have been retroactively restated as shares reflecting the exchange ratio established in the Closing of approximately 0.1868.

Prior to the Business Combination, Concord III’s public shares, and public redeemable warrants, were listed on the New York Stock Exchange (“NYSE”) under the symbols “CNDB.U,” “CNDB” and “CNDB.WS,” respectively. On March 27, 2024, the Company’s common stock and public warrants began trading on the NYSE, under the symbols “GCTS” and “GCTSW,” respectively. See Note 3 for additional information. In connection with the Closing, Concord III’s Class A common stock and Class B common stock were recapitalized into a single class of common stock.

Liquidity

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business. Prior to March 31, 2024, the Company has incurred operating losses and negative cash flows from operating and had an accumulated deficit of $548.9 million as of March 31, 2024. The Company’s existing sources of liquidity as of March 31, 2024 include cash and cash equivalents of $16.1 million. The Company has historically funded operations primarily with issuances of capital stock and the incurrence of debt.

The Company received $17.2 million in cash proceeds from the reverse recapitalization and PIPE Financing (as defined in Note 3), net of transaction costs. The Company believes the proceeds received in connection with the Business Combination and other capital resources available to the Company, including sales of products and services and the Purchase Agreement (as defined in Note 17), will be sufficient to fund the Company’s operations for at 12 months after the filing date of this Quarterly Report on Form 10-Q. Over the longer term, the Company will need to raise additional capital through debt or equity financing to fund future operations until it generates positive cash flows from profitable operations. There can be no assurance that such additional debt or equity financing will be available on terms acceptable to the Company, or at all.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

2.Summary of Significant Accounting Policies and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements and accompanying notes include the accounts of the Company and its wholly owned subsidiaries, after elimination of intercompany balances and transactions. The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2023, which are included in the Company’s Form 8-K filed with the SEC on April 1, 2024. The information as of December 31, 2023 included in the condensed consolidated balance sheets was derived from those audited consolidated financial statements.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial information. The condensed consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other future annual or interim period.

Use of Estimates

The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates, and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenues and expenses. These judgments, estimates and assumptions are used for but not limited to revenue recognition, provision for credit losses, inventory obsolescence, recoverability of long-lived assets, certain accrued expenses, stock-based compensation, determination of fair value of the Company’s convertible promissory notes, common stock (prior to the reverse recapitalization), warrant labilities and stock options, and deferred income taxes including related valuation allowances. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. However, actual results could differ from these estimates, and these differences may be material.

Fair Value of Financial Instruments

The carrying amount of certain financial instruments held by the Company, such as cash equivalents, accounts receivable, contract assets and liabilities, accounts payable, and accrued and other current liabilities, approximate fair value due to their short maturities. The carrying amount of the liabilities for the convertible promissory notes represents their fair value. The carrying amounts of the Company’s bank borrowings and lease liabilities approximate fair value due to the market interest rates that these obligations bear and interest rates available to the Company.

Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2

Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3

Unobservable inputs that are supported by little or no market activity for the related assets or liabilities.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company’s Level 3 financial instruments consist of convertible promissory notes and warrant liabilities. These financial instruments were valued using valuation techniques that are considered to be a Level 3 fair value measurement.

Risk and Uncertainties

The Company is subject to certain risks and uncertainties and believes changes in any of the following areas could have a material adverse effect on the Company’s future financial position or results of operations or cash flows: new product development, including market receptivity, the ability to satisfy obligations under development agreements with major partners, litigation or claims against the Company based on intellectual property, patent, product regulation or other factors, competition from other products, general economic conditions, the ability to attract and retain qualified employees and ultimately to sustain profitable operations.

The semiconductor industry is characterized by rapid technological change, competition, competitive pricing pressures and cyclical market patterns. The Company’s financial results are affected by a wide variety of factors, such as general economic conditions specific to the semiconductor industry and the Company’s particular market, the timely implementation of new products, new manufacturing process technologies and the ability to safeguard patents and intellectual property in a rapidly evolving market. In addition, the semiconductor market has historically been cyclical and subject to significant economic downturns. As a result, the Company may experience significant period-to-period fluctuations in condensed consolidated operating results due to the factors mentioned above or other factors.

The Company’s revenue may be impacted by its ability to obtain adequate wafer supplies from foundries and back-end production capacity from the Company’s test and assembly subcontractors. The foundries with which the Company currently has arrangements may not be willing or able to satisfy all of the Company’s manufacturing requirements on a timely basis and/or at favorable prices. The Company is also subject to the risks of service disruptions, raw material shortages and price increases by its foundries. Such disruptions, shortages and price increases could harm the Company’s consolidated operating results.

Provision for Credit Losses

The provision for credit losses is based on the Company’s assessment of the collectability of its customer accounts. The Company reviews the provision for credit losses by considering certain factors such as historical experience, industry data, credit quality, age of balances and current economic conditions that may affect a customer’s ability to pay. Uncollectible receivables are written off when all efforts to collect have been exhausted and recoveries are recognized when they are recovered. The Company determined that provisions for credit losses of approximately $1.9 million and $1.6 million were necessary as of March 31, 2024 and December 31, 2023, respectively.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to the concentration of credit risk consist of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents primarily with one financial institution located in the United States and another financial institution located in Korea where amounts deposited may exceed Federal Deposit Insurance Corporation or Korea Deposit Insurance Corporation limits.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company’s accounts receivable balances are primarily derived from revenues earned from customers located in the United States, China, Korea, Japan and Taiwan. The Company performs ongoing credit evaluations of its customers’ and distributors’ financial condition and generally does not require collateral from its customers.

The Company’s net revenue and accounts receivable are concentrated among a few significant customers, which could expose the Company to financial risk in the event of adverse developments with these customers. Four customers accounted for approximately 28 percent, 19 percent, 18 percent and 13 percent of the Company’s gross accounts receivable as of March 31, 2024. Four customers accounted for approximately 27 percent, 19 percent, 14 percent and 10 percent of the Company’s gross accounts receivable as of December 31, 2023. Two customers accounted for approximately 61 percent and 24 percent of the Company’s total net revenues for the three months ended March 31, 2024. Four customers accounted for approximately 28 percent, 28 percent, 25 percent, and 10 percent of the Company’s total net revenues for the three months ended March 31, 2023.

Management closely monitors the creditworthiness and performance of these key customers and has established credit limits and terms to mitigate potential credit risks. The Company also continues to diversify its customer base and explore opportunities to reduce its reliance on a few major customers.

Foreign Currency

Financial statements of foreign subsidiaries that use the local currency as their functional currency are translated into U.S. dollars at the end-of-period exchange rates or at historical exchange rates for purposes of consolidation. Revenues and expenses are translated using average exchange rates during the period. Translation adjustments are included in accumulated other comprehensive loss within stockholders’ deficit. Gains and losses resulting from transactions denominated in a currency other than the functional currency are included in other income, net in the condensed consolidated statements of operations. The Company recognized $1.1 million and $0.7 million foreign currency exchange gains for the three months ended March 31, 2024 and 2023, respectively.

Convertible Promissory Notes

The Company has elected the fair value option to account for its outstanding convertible promissory notes. Under the fair value option, the convertible promissory notes must be recorded at their initial fair value on the date of issuance, any modification, and at the end of each reporting period end date thereafter. Changes in the estimated fair value of the convertible promissory notes are recognized as non-cash gains or losses in other income, net in the condensed consolidated statements of operations.

Contracts in Equity

The Company classifies contracts in equity, including warrants to purchase shares of the Company’s common stock, that do not meet the indexation guidance as liabilities. At the end of each reporting period, such liability classified instruments are remeasured and changes in fair value during the reporting period are recognized within the condensed consolidated statements of operations until the earlier of the exercise, settlement, or expiration.

The Company classifies contracts in equity, including the Legacy GCT Earnouts and Sponsor Earnouts (discussed in Note 3), that meet the indexation and equity classification guidance as a component of stockholders’ deficit and are not subject to fair value remeasurements.

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS” Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Recent Accounting Pronouncements Adopted

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number of accounting models for convertible instruments and allows more contracts to qualify for equity classification. The Company adopted this guidance effective January 1, 2024, and noted no material impact on the Company’s condensed consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The Company adopted this guidance effective January 1, 2024, and noted no material impact on the Company’s condensed consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring the fair value of the equity security and cannot be recognized as a separate unit of account. The ASU also requires the investor to disclose the fair value of equity securities subject to contractual sale restrictions, the nature and remaining duration of the restriction(s), and the circumstances that could cause a lapse in the restriction(s). The ASU is effective for annual and interim periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect the adoption of ASU 2022-03 will have on its condensed consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The ASU is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect the adoption of ASU 2023-07 will have on its condensed consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, companies are required to disclose additional information about income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The standard is required to be adopted on a prospective basis; however, retrospective application is permitted. The Company is currently evaluating the effect the adoption of ASU 2023-09 will have on its condensed consolidated financial statements.

3.Reverse Recapitalization

In connection with the Business Combination described in Note 1, Concord III completed the acquisition of Legacy GCT and acquired 100% of Legacy GCT’s common stock. Legacy GCT received net proceeds of $17.1 million from the PIPE Financing (as defined below). Concord III incurred total direct transaction costs of $13.1 million, which were expensed by Concord III, and of which $0.9 million related to the PIPE Financing. Legacy GCT incurred transaction costs of $8.9 million, consisting of legal, accounting, and other professional fees, which were recorded as additional paid-in capital. Each share of Legacy GCT capital stock received a deemed value of $10.00 per share after giving effect to the applicable exchange ratio of 0.1868. Upon Closing of the Business Combination, the following occurred:

●

Each share of Legacy GCT common stock issued and outstanding prior to the Closing was cancelled and converted into the right to receive a number of shares of the Company common stock at the exchange ratio of 0.1868.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

●

Each outstanding instrument of Legacy GCT stock options, restricted stock units (“RSUs”) and warrant shares were converted into equivalent Company stock options, RSUs and warrant shares with the same terms and conditions and at the exchange ratio of 0.1868.

●

Certain GCT convertible promissory notes, including the CVT Financing (see Note 7), were automatically converted into the right to receive a number of shares of the Company common stock at the conversion price of $6.67 per share (see Note 7).

The number of shares of common stock issued and outstanding immediately following consummation of the Business Combination was (in thousands):


		Shares
Common stock of Concord III outstanding prior to the Business Combination		3,941
Less: redemption of Concord III’s common stock		(3,766)
Sponsor earnout common stock outstanding prior to the Business Combination		8,625
Common stock of Concord III issued and outstanding		8,800
Common stock issued in PIPE Financing		4,530
Legacy GCT common stock		32,503
Total common stock issued and outstanding		45,833

The Business Combination was accounted for as a reverse recapitalization under U.S. GAAP because Legacy GCT was determined to be the accounting acquirer under the FASB’s Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Under this method of accounting, Concord III was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the consolidated financial statements of the Company represent a continuation of the consolidated financial statements of Legacy GCT, with the Business Combination treated as the equivalent of Legacy GCT issuing stock for the net assets of Concord III, accompanied by a recapitalization. The net assets of Concord III were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Legacy GCT.

Legacy GCT was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

●

Legacy GCT stockholders comprise a relative majority of the voting power of GCT;

●

Legacy GCT stockholders have the ability to nominate a majority of the members of the board of directors of GCT;

●

Legacy GCT’s operations prior to the Business Combination will comprise the only ongoing operations of GCT;

●

Legacy GCT’s senior management comprises the senior management of GCT;

●

GCT substantially assuming the Legacy GCT name;

●

Legacy GCT’s headquarters will become GCT’s headquarters; and

●

Concord III did not meet the definition of a business.

PIPE Financing

Concurrent with the execution of the Business Combination Agreement, certain investors (the “PIPE Investors”) entered into subscription agreements (the “PIPE Subscription Agreements”) pursuant to which the PIPE Investors had committed to purchase in a private placement an aggregate of 4,529,967 shares of Company’s Common Stock (the “PIPE Shares”) at a purchase price of $6.67 per share for an aggregate purchase price of $30.2 million (the “PIPE Financing”). The purchase of the PIPE Shares was conditioned upon the consummation of the Business Combination. The PIPE Financing was consummated immediately prior to the Closing. The Company received net proceeds of $17.1 million from the PIPE Financing.

Private Placement Warrants and Public Warrants

In November 2021, Concord III issued warrants to purchase shares of Concord III’s common stock that were assumed by the Company at the Closing of the Business Combination on the same terms and conditions: (i) 9,400,000 warrant shares that were issued in a private placement and held by the sponsor and another company (the “private placement warrants”) and (ii) 17,250,000 warrant shares that were issued in connection with the initial public offering of Concord III (the “public warrants”). Collectively these warrant shares are referred to as “private and public warrants” and included settlement provisions that precluded equity classification.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The private placement warrants were reallocated at the Closing of the Business Combination as follows: (i) 4,492,650 warrants were vested and retained by the sponsor parties, (ii) 2,087,350 warrants were reallocated from the sponsor parties to certain recipients at Legacy GCT’s discretion to incentivize investment, and (iii) 2,820,000 were forfeited by the sponsor parties.

The Company has historically accounted for the private and public warrants as liability-classified financial instruments. This conclusion is based on the applicable provisions of the private and public warrants, including their settlement terms upon a change in control or similar transactions that precluded equity classification. After the Closing, the private and public warrants remained liability-classified as the applicable provisions did not change and apply to future operations of the Company.

Legacy GCT Earnout Shares

At the Closing of the Business Combination, former Legacy GCT stockholders and other investors of Legacy GCT have the right to receive up to an aggregate of 20,000,000 shares of Company common stock (“Earnout Shares”), if at any time during the period starting 60 trading days following the Closing and expiring on the 5^th anniversary of the Closing Date: (i) with respect to 6,666,667 of the Earnout Shares, the volume weighted average price (“VWAP”) of the Company’s common stock equals or exceeds $12.50 per share for any 20 trading days within a period of 30 consecutive trading days, (ii) with respect to 6,666,666 of the Earnout Shares, the VWAP of the Company’s common stock equals or exceeds $15.00 per share for any 20 trading days within a period of 30 consecutive trading days, and (iii) with respect to 6,666,667 of the Earnout Shares, the VWAP of the Company’s common stock equals or exceeds $17.50 per share for any 20 trading days within a period of 30 consecutive trading days.

In the event of a future transaction that results in a change in control in which shares of Company common stock are converted into the right to receive cash or other consideration having a value equal to or in excess of a triggering event, then the Legacy GCT Earnout Shares subject to the applicable triggering event that have not been previously issued will be issued to the Legacy GCT stockholders effective as of immediately prior to the consummation of such transaction. In the event of a transaction that results in a change in control in which shares of Company common stock are converted into the right to receive cash or other consideration having a value less than a triggering event, then the Earnout Shares subject to the applicable triggering event that have not been previously issued will be forfeited.

The Legacy GCT Earnout shares have been recognized at fair value of approximately $108.8 million upon the Closing and classified within stockholders’ deficit as the Legacy GCT Earnout shares are indexed to the common stock and are otherwise not precluded from equity classification based on their settlement provisions. The fair value of the Legacy GCT Earnout Shares was determined based on a valuation using a Monte Carlo simulation with key inputs and assumptions such as stock price, term, dividend yield, risk-free rate, and volatility. Due to the fact that the Business Combination is accounted for as a reverse recapitalization, the Legacy GCT Earnout shares are treated as a deemed dividend. Due to the fact that the Company does not have any retained earnings, the Company recorded the corresponding entries to additional paid-in capital and therefore have a net nil impact on stockholders’ deficit during the period ended March 31, 2024. In future reporting periods, the Company will monitor that the Legacy GCT Earnout shares meet the equity classification criteria until expiration or settlement.

Sponsor Earnout Shares

Concurrently with entering into the Business Combination Agreement, the sponsor parties and the Company entered into that certain sponsor support agreement, as amended, modified or supplemented (the “Sponsor Support Agreement”). Pursuant to the terms of the Sponsor Support Agreement, the sponsor parties have the right to receive an aggregate of 1,920,375 shares of the Company common stock multiplied by the Sponsor Earnout Ratio (as defined in the Sponsor Support Agreement) (“Sponsor Earnout Shares”), if at any time during the period starting 6 months following the Closing and expiring on the 5^th anniversary of the Closing Date: (i) with respect to one-third of the Sponsor Earnout Shares, the VWAP of the Company’s common stock equals or exceeds $12.50 per share for any 20 trading days within a period of 30 consecutive trading days, (ii) with respect to one-third of the Sponsor Earnout Shares, the VWAP of the Company’s common stock equals or exceeds $15.00 per share for any 20 trading days within a period of 30 consecutive trading days, and (iii) with respect to one-third of the Sponsor Earnout Shares, the VWAP of the Company’s common stock equals or exceeds $17.50 per share for any 20 trading days within a period of 30 consecutive trading days. Notwithstanding the foregoing, in no event shall the number of Sponsor Earnout Shares be less than 570,796.

The Sponsor Earnout Shares have been recognized at fair value of approximately $10.4 million upon the Closing and classified within stockholders’ deficit as the Sponsor Earnout Shares are indexed to the common stock and are otherwise not precluded from equity

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

classification based on their settlement provisions. The fair value of the Sponsor Earnout Shares was determined based on a valuation using a Monte Carlo simulation with key inputs and assumptions such as stock price, term, dividend yield, risk-free rate, and volatility. Since the Business Combination is accounted for as a reverse recapitalization, the issuance of the Sponsor Earnout Shares are treated as a deemed dividend. Since the Company does not have retained earnings, the issuance of the Sponsor Earnout Shares at the Closing is recorded within additional paid-in capital and has a net nil impact on stockholders’ deficit during the period ended March 31, 2024. In future reporting periods, the Company will monitor that the Sponsor Earnout shares meet the equity classification criteria until expiration or settlement.

4.Disaggregation of Revenue

Disaggregation of revenues from contracts with customers is as follows (in thousands):


	Three Months Ended March 31, 2024
	Product Revenues		Service Revenues		Total
Timing of revenue recognition
At a point in time	$	2,378	$	—	$	2,378
Over time		—		887		887
Total	$	2,378	$	887	$	3,265


	Three Months Ended March 31, 2023
	Product Revenues		Service Revenues		Total
Timing of revenue recognition
At a point in time	$	599	$	—	$	599
Over time		—		2,463		2,463
Total	$	599	$	2,463	$	3,062

Net revenues categorized by customer location are as follows (in thousands):



	Three Months Ended March 31,
		2024		2023
Korea	$	2,000	$	—
Germany		796		—
United States		389		1,968
China		80		1,094
Total	$	3,265	$	3,062

Contract Assets and Liabilities

Details of contract assets and liabilities is as follows (in thousands):

(*)	The balances are included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Net revenues recognized in relation to contract liabilities are as follows as of the periods indicated (in thousands):


	March 31, 2024		March 31, 2023
Net revenues recognized that were included in the contract liabilities balance at the beginning of the period	$	12	$	650

5.Fair Value of Measurements

Fair value hierarchy classifications of the financial instruments that are measured at fair value on a recurring basis are as follows (in thousands):


	March 31, 2024
	Level 1		Level 2		Level 3		Total

Convertible promissory notes	$	—	$	—	$	10,317	$	10,317
Warrant liabilities		—		—		10,584		10,584



	December 31, 2023
	Level 1		Level 2		Level 3		Total

Convertible promissory notes	$	—	$	—	$	34,033	$	34,033

Valuation techniques and the inputs

The table below presents valuation techniques and inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy (in thousands):


	Valuation techniques	Inputs	March 31, 2024		December 31, 2023
Convertible promissory notes, current	Discounted Cash Flow Model (“DCF”)	Discount rate, risk-free rate, credit spread, contractual cash flows	$	5,645
	PWERM (“Probability-Weighted Expected Return Method”)	Scenario of initial public offering (“IPO”) and merger & acquisition (“M&A”)			$	27,794
Convertible promissory notes, net of current	Binomial Lattice Model (“BLM”)	Stock price, volatility, remaining term, risk-free rate, credit spread		4,672
	PWERM	Scenario of initial public offering (“IPO”) and merger & acquisition (“M&A”)				6,239
Warrant liabilities – private and public warrants	Black Scholes Merton Model (“BSM”) or BLM	Exercise price, term to expiration, volatility, risk-free rate		9,150		—
Warrant liabilities - other				1,434		—

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

As of March 31, 2024, the key inputs for the convertible promissory notes, current using the DCF were as follows: remaining term of 0.25 years and a discount rate of 10.2%. As of March 31, 2024, the key inputs for the convertible promissory notes, net of current using the BLM were as follows: stock price of $6.58, volatility of 32.2%, remaining term of 1.9 years, risk-free rate of 4.6%, and credit spread of 5.0%.

As of March 31, 2024, the key inputs for the private placement warrants using the BSM were as follows: exercise price of $11.50 per share, term to expiration of 5 years, volatility range of 19.4% and a risk-free rate of 4.2%. As of March 31, 2024, the key inputs for the public warrants using the BLM were as follows: exercise price of $11.50 per share and term to expiration of 5.0 years. As of March 31, 2024, the key inputs for the warrant liabilities – other using the BSM were as follows: an exercise price of $5.00 per share, or $10.00 per share or $18.75 per share, term to expiration ranging from 0.4 years to 2.6 years, volatility ranging from 29.5% to 32.7%, and a risk-free rate ranging from 4.4% to 5.4%.

As of December 31, 2023, the PWERM was used as Legacy GCT was a private company. After the Closing, and as of March 31, 2024, the valuation techniques used reflect that the Business Combination was consummated.

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities (in thousands):


	Three Months Ended March 31,
	2024		2023
Convertible promissory notes fair value - beginning of period	$	34,033	$	31,166
Change in fair value of convertible promissory notes		1,203		(549)
Conversion of convertible promissory notes		(41,209)		—
Borrowing of convertible promissory notes		16,290		—
Convertible promissory notes fair value - end of period	$	10,317	$	30,617


	Three Months Ended March 31,
	2024		2023
Warrant Liabilities Fair value - beginning of period	$	—	$	—
Private and public warrants assumed at Closing		5,958		—
Change in fair value of warrant liabilities		4,626		—
Warrant Liabilities Fair value - end of period	$	10,584	$	—

The gains and losses from fair value re-measurement of Level 3 financial liabilities are recorded as other income, net in the condensed consolidated statements of operations.

6.Balance Sheet Components

Inventory

Inventories consists of the following (in thousands):


	March 31,		December 31,
	2024		2023
Raw materials	$	414	$	448
Work-in-process		498		601
Finished goods		872		437
Total inventory	$	1,784	$	1,486

There were no write-downs of inventory into cost of net revenues for the three months ended March 31, 2024 and 2023.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Prepaid expenses and other assets

Prepaid expenses and other assets consist of the following (in thousands):


	March 31,		December 31,
	2024		2023
Prepaid expenses	$	3,345	$	433
Prepaid inventory		1,429		279
Lease deposit		413		434
Other receivables and current assets		279		117
IPO expenses		—		1,643
Prepaid expenses and other current assets	$	5,466	$	2,906

Accrued and other current liabilities

Accrued and other current liabilities consist of the following (in thousands):


	March 31,		December 31,
	2024		2023
Payroll and related expenses	$	9,830	$	9,880
Accrued payables		7,853		6,319
Other taxes payable		3,399		158
Current portion of interest payable		3,395		6,915
Professional fees		444		499
Royalty and license fee		60		58
Product warranty		64		55
Other		107		72
Accrued and other current liabilities	$	25,152	$	23,956

7.Debt

The Company’s outstanding debt was as follows (in thousands):


	March 31,				December 31,
	2024				2023
	Principal		Fair Value		Principal		Fair Value
Convertible promissory notes:
Historical convertible promissory notes	$	5,630	$	5,645	$	35,347	$	34,033
2023 & 2024 convertible promissory notes		5,000		4,672		—		—
Borrowings:
KEB Hana Bank		6,682		6,682		6,980		6,980
IBK Industrial Bank		6,831		6,831		7,135		7,135
Note payable (one individual investor)		1,000		1,000		1,000		1,000
M-Venture Investment, Inc.		7,425		7,425		7,756		7,756
Anapass, Inc, related party		9,653		9,653		10,082		10,082
i Best Investment Co., Ltd		7,425		7,425		10,082		10,082
Kyeongho Lee, related party		824		824		1,474		1,474
Total debt	$	50,470		50,157	$	79,856		78,542
Less: current portion				(45,485)				(72,303)
Debt, net of current portion			$	4,672			$	6,239

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company elected the fair value option for the 2023 & 2024 convertible promissory notes and the historical convertible promissory notes (see Note 5). The Company’s other borrowings approximate their fair value because interest rates are at prevailing market rates and/or the short-term nature of the remaining obligations. See Note 14 for additional information on related parties.

Expected future minimum principal payments under the Company’s total debt is as follows as of March 31, 2024 (in thousands):


	Convertible
	Notes
Years	Payable		Borrowing		Total
2024, remainder	$	5,630	$	39,840	$	45,470
2025		—		—		—
2026		5,000		—		5,000
Total debt	$	10,630	$	39,840	$	50,470

Convertible Promissory Notes

Historical Convertible Promissory Notes

Between 2017 and 2022, the Company issued convertible promissory notes to various investors with maturity dates ranging from October 2020 to April 2025. The annual interest rates varied between 4.0% and 7.0%. In November 2023, the Company entered into an amendment with certain convertible promissory noteholders to modify the conversion terms such that these notes were automatically convertible upon a special purpose acquisition company (“SPAC”) transaction. In March 2024, upon the Closing of the Business Combination, an aggregate principal and interest amount of $32.1 million converted into 4,258,223 shares of common stock at a conversion price of $10.00. As of March 31, 2024, the remaining principal and interest amount of $7.9 million was outstanding and related to two noteholders where conversion is at each noteholder’s discretion and at a conversion price of $3.50 per share. In April 2024, the Company repaid one of the convertible promissory notes (see Note 17).

2023 & 2024 Convertible Promissory Notes

In November 2023, February 2024 and March 2024, the Company issued convertible promissory notes to certain investors (the “CVT Investors”), pursuant to which the CVT Investors agreed to lend to the Company an aggregate principal amount of $13.3 million. These notes had maturity dates ranging from November 2026 to March 2027, bore an interest rate of 5.0% and were automatically convertible upon IPO or SPAC transaction. In March 2024, upon the Closing of the Business Combination, an aggregate principal and interest amount of $13.4 million converted into 2,004,535 shares of common stock at a conversion price of $6.67. As of March 31, 2024, none of the notes issued to CVT Investors remain outstanding.

In February 2024, the Company issued a convertible promissory note to a strategic investor for a principal amount of $5.0 million, which matures in February 2026 and bears an interest rate of 5.0% per annum. On or after the earlier of (i) six months from the issuance date of the convertible promissory note and (ii) the Closing of the Business Combination, the noteholder may demand that the Company convert all principal and interest due under the convertible promissory note into shares of Company’s common stock, at a conversion price of $10.00 per share. This note includes customary representations, warranties, and events of default, as well as a covenant relating to the performance of obligations by the Company related to the Company’s 5G activity. As of March 31, 2024, the remaining principal and interest amount of $5.0 million was outstanding.

Borrowings Pursuant to Term Loan and Security Agreements

KEB Hana Bank

In July 2016, the Company entered into an unsecured term loan agreement with KEB Hana Bank pursuant to which it borrowed KRW 9.0 billion ($6.7 million), bearing a variable interest rate (2.6% initial annual interest rate and 5.2% as of March 31, 2024), paid monthly, and maturing in July 2017. The terms of such unsecured term loan agreement have been extended annually for additional one-year terms since 2017, and the maturity date is July 2024. Anapass, Inc., a related party, provided certificates of deposit as collateral to KEB Hana

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Bank to secure the Company’s obligations under this loan (see Note 8). As of March 31, 2024, the remaining principal and interest amount of $6.7 million was outstanding.

IBK Industrial Bank

In January 2017, the Company entered into a term loan agreement with IBK Industrial Bank pursuant to which the Company borrowed KRW 9.2 billion ($6.8 million). The term loan has a maturity date in November 2024 and bears an annual interest rate of 4.9%. As of March 31, 2024, the remaining principal and interest amount of $6.8 million was outstanding.

Note Payable (One Individual Investor)

In June 2021, the Company entered into a note payable agreement with an individual investor pursuant to which the Company borrowed $1.0 million. The note has a maturity date in June 2024 and bears an annual interest rate of 4.0%. In April 2022, the Company entered into an amendment with this one individual investor to remove the conversion right from the note payable. As of March 31, 2024, the remaining principal and interest amount of $1.1 million was outstanding.

M-Venture Investment, Inc.

In October 2021, the Company entered into a term loan and security agreement with M-Venture Investment, Inc. pursuant to which the Company borrowed KRW 5.0 billion ($3.7 million) and repaid KRW 0.6 billion ($0.4 million) and KRW 0.4 billion ($0.3 million) in 2021 and 2022, respectively, such that KRW 4.0 billion ($3.0 million) remained outstanding. The term loan has a maturity date in October 2024 and bears an annual interest rate of 6.5%. As of March 31, 2024, the remaining principal and interest amount of $3.1 million was outstanding.

In April 2022, the Company entered into a term loan and security agreement with M-Venture Investment, Inc. pursuant to which the Company borrowed amounts in two draws of KRW 1.0 billion ($0.7 million) and KRW 5.0 billon ($3.7 million), respectively. The term loan has a maturity date in April 2024 and each respective draw bears an annual interest rate of 6.5% and 8.7%. As of March 31, 2024, the remaining principal and interest amount of $4.8 million was outstanding.

In April 2024, the Company executed amendments with M-Venture Investment, Inc. (see Note 17).

Anapass, Inc., Related Party

In July 2016, the Company entered into a loan agreement with Anapass, Inc. pursuant to which the Company borrowed KRW 6.0 billion ($4.5 million) in a term loan. Interest only payments are due monthly at 5.5% per annum and the principal amount of the term loan is due on the maturity date of July 2024. The loan is collateralized by the Company’s assets as described under the Assets Pledged as Collateral (see Note 8). As of March 31, 2024, the remaining principal and interest amount of $4.5 million was outstanding.

In May and September 2022, the Company entered into two term loan agreements with Anapass, Inc. pursuant to which the Company borrowed KRW 3.0 billion ($2.2 million) and KRW 4.0 billion ($3.0 million) in term loans. The term loans have respective maturity dates in May 2024 and September 2024 and both bear an annual interest rate of 5.5%. As of March 31, 2024, the remaining principal and interest amount of $5.2 million was outstanding.

i Best Investment Co., Ltd

From 2022 and 2023, the Company entered into multiple term loans and security agreements with i Best Investment Co., Ltd pursuant to which it borrowed principal amounts in six draws with an aggregate principal balance of KRW 14.0 billion ($10.3 million). All of the term loans have a maturity date in June 2024 and bear an annual interest rate of 6.5%. In December 2023, the Company made a $0.8 million repayment of the outstanding principal and interest on its second draw. In March 2024, the Company made a $2.3 million repayment of the outstanding principal and interest amount of its fourth draw. As of March 31, 2024, the remaining principal and interest amounts outstanding were as follows: $3.3 million outstanding on its first draw, $1.6 million outstanding on its third draw, $2.3 million outstanding on its fifth draw and $0.8 million on its sixth draw.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Kyeongho Lee, Related Party

From 2017 and 2021, the Company entered into multiple promissory note and term loan agreements with Kyeongho Lee pursuant to which the Company borrowed (a) KRW 500.0 million ($0.4 million), and KRW 500.0 million ($0.4 million) in promissory notes, and (b) KRW 1.0 billion ($0.7 million) and KRW 110.0 million ($0.1 million) in term loans. The promissory notes have a maturity date in November 2024 and bear an annual interest rate varying from 7.5% and 9.0%. During the three months ended March 31, 2024, the Company repaid in full one of the term loans. The term loan has a maturity date in May 2024 and bears an annual interest rate of 0.0%. As of March 31, 2024, the remaining principal and interest amount of $0.7 million and $82,000 was outstanding as it related to the promissory notes and a term loan, respectively.

8.Commitments and Contingencies

Litigation

The Company is subject to various claims arising in the ordinary course of business. Although no assurance can be given, the Company believes that it is not a party to any litigation of which the outcome, if determined adversely, would individually, or in the aggregate, be reasonably expected to have a material adverse effect on the business, consolidated operating results, cash flows or financial position of the Company as of March 31, 2024.

Third parties have from time to time claimed, and others may claim in the future, that the Company has infringed their past, current or future intellectual property rights. These claims, whether meritorious or not, could be time consuming, result in costly litigation, require expensive changes in the Company’s methods of doing business or could require the Company to enter into costly royalty or licensing agreements, if available. As a result, these claims could harm the Company’s business, consolidated operating results, cash flows, and financial position.

Purchase Commitment

The Company has certain commitments for outstanding purchase orders related to the manufacture of certain wafers utilized by the Company and other services that, once the wafers are placed into production, are noncancelable. Otherwise, these production agreements are cancellable at any time with the Company required to pay all costs incurred through the cancellation date. However, the Company has rarely cancelled these agreements once production has started. As of March 31, 2024, the Company had no outstanding noncancelable purchase commitments for these production agreements.

In July 2020, the Company entered into a research and development agreement with Samsung Electronics Co., Ltd (“Samsung”). According to the agreement, the Company would design 5G chip products and Samsung would provide development and intellectual property support, mass production set up support including mask sets for manufacturing and engineering sample chip supply to the Company for a specific product. The total fee amount for the research and development (“R&D”) services pursuant to the agreement was $21.1 million. The Company bore the risk of R&D failure and was obligated to pay the $21.1 million total fee based on milestones defined in the agreement, of which $11.7 million was due based on development milestones and $9.4 million of additional NRE (“non-recurring engineering”) was to be paid within a maximum of 4 years after the planned product first shipment date. The Company recognized R&D expenses based on an estimate of the percentage completion of services provided by Samsung during the respective financial reporting period. In the first quarter 2024, Samsung agreed to unconditionally release the Company from payment for work Samsung had completed to date because it had not met certain of the development milestones and due to a change in Samsung’s business strategy. As a result, the Company recognized a gain of $14.6 million upon such unconditional release of its liability to Samsung. During the period ended March 31, 2024, the parties mutually agreed that the agreement had expired and there were no remaining obligations of either party under the agreement.

In February 2024, the Company and Alpha Holdings Co., Ltd. (“Alpha”) entered into a foundry product development agreement related to 5G chip development for a total fee of $7.6 million. The Company bears the risk of R&D failure and is obligated to pay the fee based on milestones defined in the agreement. The Company recognizes R&D expenses based on an estimate of the percentage completion of services provided by Alpha during the respective financial reporting period. For the three months ended March 31, 2024, the Company recorded $3.5 million in R&D expenses related to services provided by Alpha. The aggregate unpaid amount related to this agreement is $5.0 million as of March 31, 2024.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Assets Pledged as Collateral

The Company has provided collateral to Anapass, Inc., a related party (see Note 14), for borrowings from KEB Hana Bank, IBK Industrial Bank and Anapass, Inc. in the amount of $6.7 million, $6.8 million and $9.7 million, respectively, as of March 31, 2024, and $7.0 million, $7.1 million and $10.1 million, respectively, as of December 31, 2023 (see Note 7).

The following table includes a summary of the collateral provided to Anapass, Inc. (in thousands):


	March 31,		December 31,		Secured
	2024		2023		Creditor
Cash and cash equivalents	$	16,122	$	254
Accounts receivable		5,118		4,920
Inventory		1,784		1,486	Anapass, Inc.
Property and equipment		1,988		352
Intangible assets and others		187		199

9.Common Stock

In connection with the Closing of the Business Combination, the Company increased its total number of authorized shares to 440,000,000 shares, consisting of 400,000,000 shares of common stock and 40,000,000 shares of preferred stock.

The Company has reserved shares of common stock for issuance as follows (in thousands):


	March 31	December 31
	2024	2023
Warrants	26,724	2,894
Shares available for future grant from 2024 plan	3,983	—
Convertible promissory notes	800	1,835
Options issued and outstanding	668	668
Shares available for future grant from 2024 ESPP	600	—
RSUs outstanding	392	392
Shares available for future grant from 2011 plan	—	113
Total	33,167	5,902

10.Warrants

The following table represents a summary of warrants to purchase shares of the Company’s common stock that are outstanding (in thousands, except for exercise price):


Issue Date	March 31, 2024	Exercise Price	Expiration
August 2021	299	$ 10.00 - $18.75	(1)
September 2021	300	$ 5.00	(1)
February 2023 - June 2023	2,115	$ 10.00 - $18.75	(1)
July 2023	80	$ 10.00	(1)
October 2023	100	$ 10.00	(1)
Private and public warrants	23,830	$ 11.50	March 26, 2029
Total	26,724

(1)	Within 3 years from the date of issuance.

See Note 3 with respect to further details on the private and public warrants and Note 5 with respect to valuation techniques and assumptions because the warrants are all liability-classified and subject to fair value measurement each reporting period.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

11.Stock-Based Compensation

2011 Incentive Compensation Plan

Legacy GCT’s 2011 Incentive Compensation Plan (the “2011 Plan”) permitted the grant of options, stock awards, and RSUs. In connection with the Closing of the Business Combination, the 2011 Plan was terminated, the remaining unallocated shares reserved under the 2011 Plan were cancelled and no new awards will be granted under the 2011 Plan.

Each award of Legacy GCT stock options and RSUs were converted into equivalent Company stock options and RSUs with the same terms and conditions under the plan described below.

2024 Incentive Compensation Plan

In connection with the Closing of the Business Combination, the Company adopted the 2024 Incentive Compensation Plan (the “2024 Plan”) under which 3,983,334 shares of common stock were initially reserved for issuance, subject to approval by the Company’s boards of directors. The 2024 Plan permits the grant of stock options, stock appreciation rights, stock awards, restricted stock units, dividend equivalent right, cash awards and other awards to employees, non-employee directors, non-employee members of the board of directors, or consultants or independent advisors.

Stock options outstanding under the 2024 Plan were as follows (in thousands, except per share amounts and years):


				Weighted
				Average
	Number of	Weighted-		Remaining
	Options	Average		Contractual Life	Aggregated
	Outstanding	Exercise Price		(in Years)	Intrinsic Value
Balance as of December 31, 2023	3,579	$	0.02	5.5	$	4,405
Reverse recapitalization	(2,911)		0.09	—		—
Balance as of December 31, 2023⁽¹⁾	668	$	0.11	5.5		4,405
Granted	—		—	—		—
Exercised	—		—	—		—
Cancelled	—		—	—		—
Balance as of March 31, 2024	668		0.11	5.3		5,543
Vested as of March 31, 2024	667	$	0.11	5.3		5,532
Exercisable as of March 31, 2024	634	$	0.11	5.1		5,256

(1)	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (see Note 3).

There were no options granted during the three months ended March 31, 2024 and 2023. As of March 31, 2024, unrecognized compensation cost related to stock options was nominal.

Founder Awards to Board of Directors

In 2021, an aggregate of 90,000 founder shares of common stock were transferred to three members of Concord III’s board of directors. The shares contained both a performance condition based upon a liquidity event and a service vesting condition. As the liquidity and services conditions were met upon the Closing of the Business Combination, the Company recognized $0.9 million of stock-based compensation during the three months ended March 31, 2024.

Restricted Stock Units

In December 2023, various employees and directors of Legacy GCT were granted RSUs that contain both a performance condition based upon a liquidity event and a service vesting condition such that the RSUs vest in four equal annual installments from the grant

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

date. Any unvested RSUs are forfeited upon separation from the Company. The liquidity condition was met upon the Closing of the Business Combination and the Company recognized $0.3 million of stock-based compensation.

RSUs outstanding under the 2024 Plan were as follows (in thousands, except per share amounts):


		Weighted
	Number of RSUs	Average Grant
	Outstanding	Date Fair Value
Balance as of December 31, 2023	2,100	$	1.15
Reverse recapitalization	(1,708)		5.01
Balances as of December 31, 2023⁽¹⁾	392	$	6.16
Granted	—		—
Vested	—		—
Cancelled	—		—
Balance as of March 31, 2024	392	$	6.16

(1)	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (see Note 3).

As of March 31, 2024, there was $2.1 million of unrecognized compensation cost related to RSUs, which is expected to be recognized on a straight-line basis over a weighted average period of 3.7 years.

12.Income Taxes

For the three months ended March 31, 2024 and 2023, the Company recorded income tax expense of $59,000 and $50,000, respectively. The effective tax rate is 7.2% and 3.7% for the three months ended March 31, 2024 and 2023, respectively.

For financial reporting purposes, the Company’s effective tax rate used for the interim periods is based on the estimated full-year income tax rate. For the three months ended March 31, 2024, the Company’s effective tax rate differs from the statutory rate primarily due to the valuation allowance recorded against the net deferred tax asset balance.

As of March 31, 2024 the Company had unrecognized tax benefits of $3.1 million of which $1.7 million would currently affect the Company’s effective tax rate if recognized due to the Company’s deferred tax assets being fully offset by a valuation allowance. The Company does not anticipate that the amount of unrecognized tax benefits relating to tax positions existing as of March 31, 2024 will significantly increase or decrease within the next twelve months. There was no interest expense or penalties related to unrecognized tax benefits recorded as of March 31, 2024.

A number of years may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its reserves for income taxes reflect the most likely outcome. The Company adjusts these reserves, as well as the related interest, in light of changing facts and circumstances. Settlement of any particular position could require the use of cash.

Currently the Company is not under examination by any taxing authority.

13.Employee Benefit Plans

Under Korean law, the Company is required to make severance payments to Korean employees leaving its employment. The Company’s severance pay liability to its Korean employees, which is a function of the salary of each employee’s years of employment and severance factor, is reflected in the accompanying condensed consolidated balance sheets as the net defined benefit liabilities on an accrual basis.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The net liability for severance payments as of (in thousands):


	March 31, 2024		December 31, 2023
Liability for severance payments, beginning	$	7,764	$	7,997
Deposit		(276)		(308)
Liability for severance payments, ending	$	7,488	$	7,689

14.Related Party Transactions

A summary of balances and transactions with the related parties who are stockholders of the Company were as follows as of (in thousands):


	March 31, 2024				December 31, 2023
	Anapass		Kyeongho Lee		Anapass		Kyeongho Lee
Borrowings	$	9,653	$	824	$	10,082	$	1,474
Other current liabilities		106		87		212		182

For each of the three months ended March 31, 2024 and 2023, the Company recorded $0.1 million of interest expense with Anapass, Inc. in the condensed consolidated statements of operations. During the three months ended March 31, 2024 and 2023, the Company recorded $22,000 and $26,000, respectively, of interest expense with Kyeongho Lee in the condensed consolidated statements of operations.

15.Segments and Information

The Company operates in one segment. Revenue information by geographic region is presented in Note 4 to these condensed consolidated financial statements. Long-lived assets by geographic region were as follows as of (in thousands):


	March 31, 2024		December 31, 2023
South Korea	$	1,170	$	1,363
United States		817		930
Total long-lived assets	$	1,987	$	2,293

16.Net Income (Loss) Per Share

The following table summarizes the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts):


	Three Months Ended March 31,
	2024		2023
Numerator:
Net income (loss), basic and diluted	$	757	$	(1,393)
Denominator:
Weighted-average common shares outstanding, basic		25,468		23,862
Add: effect of dilutive securities		789		—
Weighted-average common shares outstanding, diluted		26,257		23,862
Net income (loss) per share, basic and diluted
Basic	$	0.03	$	(0.06)
Diluted	$	0.03	$	(0.06)

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The following outstanding potentially dilutive common stock equivalents were excluded from the computation of diluted net income (loss) per share for the periods indicated because including them would have been antidilutive (in thousands):


	March 31,
	2024	2023
Warrants	26,724	995
Convertible promissory notes	5,543	1,809
Options	—	885
Total	32,267	3,689

17.Subsequent Events

Purchase Agreement and Registration Rights Agreement

In April 2024, the Company entered into a common stock purchase agreement (the “Purchase Agreement”) and a related registration rights agreement (the “Registration Rights Agreement”) with B. Riley Principal Capital II, LLC (“B. Riley Principal Capital II”). Upon the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement, the Company has the right, in its sole discretion, to sell to B. Riley Principal Capital II, from time to time, up to $50.0 million in aggregate gross purchase price of shares of the Company’s common stock, subject to certain limitations contained in the Purchase Agreement, during the term of 24 months. Pursuant to the Registration Rights Agreement, the Company is required to file a registration statement on Form S-1 to register the resale of shares of common stock that are sold to B. Riley Principal Capital II under the Purchase Agreement. Sales of common stock by the Company to B. Riley Principal Capital II pursuant to the Purchase Agreement, and the timing of any such sales, are solely at the option of the Company, and the Company is under no obligation to sell any securities to B. Riley Principal Capital II under the Purchase Agreement.

M-Venture Investment, Inc.

In April 2024, the Company executed an amendment with M-Venture Investment, Inc. for the KRW 4.0 billion ($3.0 million) term loan outstanding, pursuant to which the Company repaid KRW 2.0 billion ($1.5 million) in April 2024 and extended the maturity date from October 2024 to May 2024 (see Note 7).

In April 2024, the Company executed an amendment with M-Venture Investment, Inc. for the KRW 6.0 billion ($4.4 million) term loan outstanding, pursuant to which the maturity date for both draws were amended. The maturity date for the principal amount of KRW 1.0 billion ($0.7 million) was extended from April 2024 to June 2024. The maturity date for the principal amount of KRW 5.0 billion ($3.7 million) was extended from April 2024 to July 2024 (see Note 7).

Historical Convertible Promissory Notes

In April 2024, the Company repaid in full a historical convertible promissory note that was issued in 2021 with a principal amount of $0.6 million (see Note 7).

Share Reserve

In May 2024, the board of directors of the Company approved 3,983,334 shares as the maximum number of shares of Common stock that may be issued pursuant to 2024 Plan, and 600,000 shares as reserved share amount of 2024 Employee Stock Purchase Plan.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

On March 26, 2024 (the “Closing Date” or “Closing”), GCT Semiconductor, Inc. (“Legacy GCT”) and Concord Acquisition Corp III, a Delaware corporation (“Concord III”), consummated the Merger pursuant to the Business Combination Agreement and Concord III changed its name to GCT Semiconductor Holding, Inc. (“GCT”). As a result, the financial statements of Legacy GCT are now the financial statements of GCT. This discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2024 and related notes appearing elsewhere in this Quarterly Report and Legacy GCT’s audited consolidated financial statements as of and for the years ended December 31, 2023 and 2022 and related notes included in our Form 8-K filing with the Securities and Exchange Commission (“SEC”) on April 1, 2024.

This discussion may contain forward-looking statements including, but not limited to, our expectations or predictions of future financial or business performance or conditions. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. You should read the sections in this Quarterly Report titled “Risk Factors” and “Special Note of Forward-Looking Statements” of a discussion of important factors that could cause actual results to differ materially from the results described in or implied by these forward-looking statements. Unless otherwise indicated, the terms “GCT,” “the Company,” “we,” “us,” or “our” refer to GCT Semiconductor Holding Inc., a Delaware corporation, together with our consolidated subsidiaries.

Overview

We are a fabless semiconductor company that specialize in the design, manufacturing and sale of communication semiconductors, including high-speed wireless communication technologies such as 5G/4.75G/4.5G/4G transceivers (“RF”) and modems, which are essential for a wide variety of industrial, B2B and consumer applications. We have successfully developed and supplied communication semiconductor chipsets and modules to leading wireless operators worldwide, as well as to original design manufacturers (“ODMs”) and original equipment manufacturers (“OEMs”) for portable wireless routers (e.g., Mobile Router/MiFi), indoor and outdoor fixed wireless routers (e.g., CPE), industrial M2M applications and smartphones.

We oversee sales, marketing, and accounting operations from our headquarters in San Jose, California. The Company conducts product design, development, and customer support through our wholly owned subsidiaries located in South Korea, one of which serves as our research and development center. In addition, we utilize separate sales offices for local technical support and sales in Taiwan, China, and Japan.

Our current product portfolio includes RF and modem chipsets based on 4^th generation (“4G”), known as Long Term Evolution (“LTE”), technology offering a variety of chipsets differentiated by speed and functionality. These include 4G LTE, 4.5G LTE Advanced (twice the speed of LTE), and 4.75G LTE Advanced-Pro (four times the speed of LTE) chipsets. The Company also develops and sells cellular Internet of Things (“IoT”) chipsets for low-speed mobile networks such as eMTC/NB- IOT/Sigfox, and other network protocols.

To date, our operations have been funded by the Business Combination and primarily through the issuance of historical convertible promissory notes, borrowings, and capital stock.

Business Combination

On the Closing Date, Concord III, a Delaware corporation, consummated a series of transactions that resulted in the combination of Gibraltar Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Concord III (“Merger Sub”), and Legacy GCT, pursuant to a Business Combination Agreement, dated November 2, 2023 (the “Business Combination Agreement”), by and among Concord III, Merger Sub and Legacy GCT. Pursuant to the terms of the Business Combination Agreement, Merger Sub merged with and into Legacy GCT, with Legacy GCT surviving the merger as a wholly-owned subsidiary of Concord III (the “Business Combination”). On the Closing Date, Concord III changed its name from Concord III to “GCT Semiconductor Holding, Inc.”

The Business Combination was accounted for as a reverse recapitalization, with Legacy GCT being the accounting acquirer and Concord III being the acquired company for financial reporting purposes. As a result, Legacy GCT’s consolidated financial statements for historical periods will be included in GCT’s future periodic reports filed with the SEC.

The Company received $17.2 million cash proceeds from the reverse recapitalization and private investment from public equity financing (“PIPE Financing”), net of transaction costs. Total direct and incremental transaction costs of Concord III and Legacy GCT

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were $22.0 million and treated as a reduction of the cash proceeds, of which $8.9 million was deducted from additional paid-in capital for underwriting, accounting, legal and other fees, and the remaining balance of $13.1 million was expensed in the period incurred by Concord III.

Key Factors Affecting Our Performance

We believe that our future success and financial performance depend on a number of factors that present significant opportunities for our business but also pose risks and challenges, including those in the section titled “Risk Factors” of this Quarterly Report.

Commercial Deployment of 4G LTE and 5G Market

Our business depends upon the continued commercial deployment of 4G and 5G wireless communications equipment, products, and services based on GCT’s technology. Deployment of new networks by wireless carriers requires significant capital expenditures well in advance of any revenue from such networks. If the rate of deployment of new networks by wireless carriers is slower than our expectation, this will reduce the sales of its products and could cause OEMs and ODMs to hold excess inventory. This would harm our revenues and our financial results. The worldwide commercial deployment and adoption of the narrow band LTE variants, Cat M and Cat NB, are expected to expand further the markets for Internet of Things devices. If deployments of the Cat M or Cat NB standards are delayed or if competing standards for Internet of Things devices become favored by wireless carriers, we may not be able to successfully increase sales of our Cat M and Cat NB products, which would harm our revenues and financial results.

Development of New Products

The markets in which we and our customers compete or plan to compete are characterized by rapidly changing technologies, industry standards, and technological obsolescence. Our ability to compete successfully depends on our ability to design, develop, market, and support new products and enhancements on a timely and cost-effective basis. A fundamental shift in technologies in any of our target markets, such as the 5G wireless communications markets, could harm our competitive position within these markets. Our failure to anticipate these shifts, develop new technologies, or react to changes in existing technologies could delay our development of new products, which could result in product obsolescence, decreased revenue, and loss of design wins.

The success of our new products will depend on accurate forecasts of long-term market demand, customer and consumer requirements, and future technological developments, as well as a variety of specific implementation factors, including:

●

accurate prediction of the size and growth of the 4G and 5G markets;

●

accurate prediction of the growth of the Internet of Things markets and the timing of commercial availability of 4G and 5G networks;

●

accurate prediction of changes in device manufacturer requirements, technology, industry standards or consumer expectations, demands, and preferences;

●

timely and efficient completion of product design and transfer to manufacturing, assembly and test, and securing sufficient manufacturing capacity to allow us to continue to timely and efficiently deliver products to our customers;

●

market acceptance, adequate consumer demand, and commercial production of the products in which our mobile and wireless broadband semiconductor solutions are incorporated;

●

the quality, performance, and reliability of the product as compared to competing products and technologies;

●

effective marketing, sales, and service; and

●

the ability to obtain licenses to use third-party technology to support the development of our products.

If we fail to introduce new products that meet the demands of our customers or our target markets, or if we fail to penetrate new markets, our revenue will likely decrease over time, and our financial condition could suffer.

Semiconductor and Communications Industry

The semiconductor industry has historically exhibited a pattern of cyclicality, which at various times has included significant downturns in customer demand. Cyclical downturns can result in substantial declines in semiconductor demand, production overcapacity, high inventory levels, and accelerated erosion of average selling prices. Such downturns result from a variety of market forces, including

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constant and rapid technological change, quick product obsolescence, price erosion, evolving standards, short product life cycles, and wide fluctuations in product supply and demand.

Recently, downturns in the semiconductor industry have been attributed to a variety of factors, including the COVID-19 pandemic, ongoing trade disputes between the United States and China, weakness in demand and pricing for semiconductors across applications, and excess inventory. In addition, since the end of 2022, the semiconductor industry has experienced a downturn due to inventory corrections and reduced consumer demands. These downturns have directly impacted GCT’s business, suppliers, distributors, and end customers. While we expect a gradual recovery of the broader semiconductor markets in the remainder of 2024, there is no guarantee that such recovery will occur or that the extent of recovery will be at a pace as initially anticipated.

Because a significant portion of our expenses are fixed in the near term or are incurred in advance of anticipated sales, we may not be able to reduce our expenses rapidly enough to offset any unanticipated shortfall in revenue. If this situation were to occur, it could adversely affect our operating results, cash flow, and financial condition. In addition, the semiconductor industry has periodically experienced increased demand and production constraints. As a fabless semiconductor company, we rely exclusively on third-party foundries, including certain major semiconductor foundries such as UMC, Alpha and TSMC, for the manufacturing and supplies of its wafers and products. We do not have any formal foundry agreements that guarantee a minimum level of manufacturing capacity. In times of significant increasing demand for capacity, these foundries may experience production shortages and may not allocate sufficient manufacturing capacity to us. If this happens, we may not be able to produce sufficient quantities of our products to meet the increased demand. Any disruption in our supply chain can make it more difficult for us to obtain sufficient wafer, assembly, and test resources from our subcontract manufacturers. Any factor adversely affecting the semiconductor industry in general, or the particular segments of the industry that our products target, may adversely affect our ability to generate revenue and impact our operating results.

In addition, a shortage of manufacturing capacity can also impact the product development strategies of our major customers, which may, in turn, affect our business operations. For example, in 2022, the supply shortage caused our largest customer to change its priority on product development from 4G to the next generation of 5G products, which resulted in the reduction of 4G activity and a decline in demand for our products. Our business is expected to increase again with this customer after the launch of 5G products and the recovery of 4G business in 2024 as supply and inventory return to a more normal level.

In the past, the wireless communications industry has experienced pronounced downturns, and these cycles may continue in the future. A future decline in global economic conditions could have adverse, wide-ranging effects on demand for our products and for the products of our customers, particularly wireless communications equipment manufacturers or other members of the wireless industry, such as wireless network operators. Inflation, deflation, and economic recessions that adversely affect the global economy and capital markets also adversely affect our customers and our end consumers. For example, our customers’ ability to purchase or pay for our products and services, obtain financing, and upgrade wireless networks could be adversely affected, which may lead to many networking equipment providers slowing their research and development activities, canceling, or delaying new product development, reducing their inventories, and taking a cautious approach to acquiring our products, which would have a significant negative impact on our business. If this situation were to occur, it could adversely affect our operating results, cash flow, and financial condition. In the future, any of these trends may also cause our operating results to fluctuate significantly from year to year, which may increase the volatility of our stock price.

Public Company Costs

As a result of the Business Combination, we became the successor to an SEC-registered and NYSE-listed company, which requires us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We have incurred, and expect to continue to incur, additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance premiums, which are substantial, director fees, and additional internal and external accounting, legal and administrative resources.

Key Components of Results of Operations

Net Revenues

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Product Revenues

Our product sales are generated from the sale of mobile semiconductor products. Product revenues are recognized at a point in time once control has been transferred to a customer, which is generally at the time of shipment.

Service Revenues

Our service revenues are generated from the sale of mobile semiconductor platform solutions aimed at the 4G LTE and 5G industries, development services and technical advice and maintenance services. Service revenues are generally recognized over time as the customer obtains control of the promised services.

Cost of Net Revenues

Our cost of net revenues consists of product and service costs. The cost of product net revenues consists of direct and indirect costs related to the manufacturing of our products. Direct costs include wafer costs and costs of assembly and testing performed by third-party contract manufacturers. Indirect costs consist of provisions for excess and obsolete inventory, royalties, allocated overhead for employee costs and facility costs, warranty, and the amortization of our production mask sets and certain intangible assets. Shipping and handling costs incurred for inventory purchases related to the units sold and costs of product shipments are also recorded in the cost of net product revenues. Service costs consist of non-recurring engineering costs for service projects.

Operating Expenses

Research and Development Expenses

Our research and development (“R&D”) expenses consist of costs incurred to develop our products and services. These expenses consist of personnel costs, including salaries, employee benefit costs, and stock-based compensation for employees engaged in R&D activities, software costs, computing costs, hardware and experimental supplies, and expenses for outside engineering consultants. We expense all R&D costs in the periods in which they are incurred.

Sales and Marketing Expenses

Our sales and marketing (“S&M”) expenses consist of employee-related expenses, including salaries, commissions, employee benefits costs, and stock-based compensation for all employees engaged in marketing, sales, and sales support. S&M expenses also include local and centralized advertising costs and the infrastructure required to support our marketing efforts. We expense S&M costs in the periods in which they are incurred.

General and Administrative Expenses

Our general and administrative (“G&A”) expenses consist of various components not related to R&D or S&M, such as personnel costs, regulatory fees, promotion expenses, costs associated with maintaining and filing intellectual property, meals and entertainment expenses, travel expenses, insurance expenses, and other expenditures related to external professional services including legal, engineering, marketing, human resources, audit, and accounting services. Personnel costs include salaries, benefits, and stock-based compensation. As we continue to grow and expand our workforce and operations, and considering the increased costs associated with operating as a public company, we anticipate that our G&A expenses will increase in the foreseeable future.

Gain on Extinguishment of Liability

Gain on extinguishment of liability relates to the release by a vendor due to a contract termination during the period of amounts payable by us for research and development services received in prior years.

Interest Expense

Interest expense primarily consists of interest and amortization of related debt issuance costs related to our borrowings and convertible promissory notes.

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Other (Expenses), Income, Net

Other income, net consists of foreign currency gains and losses, changes in fair value of convertible promissory notes, gains and losses associated with the redemption of convertible notes, and other miscellaneous income (expense).

Results of Operations

The following tables set forth our results of operations for the periods indicated. The period-to-period comparison of financial results is not necessarily indicative of future results. The following table sets forth our historical results for the periods indicated and the changes between periods (in thousands):


	Three Months Ended March 31,
	2024		2023		$ change		% change
Net revenues:
Product	$	2,378	$	599	$	1,779	297	%
Service		887		2,463		(1,576)	(64)	%
Total net revenues		3,265		3,062		203	7	%
Cost of net revenues:
Product		654		978		(324)	(33)	%
Service		658		563		95	17	%
Total cost of net revenues		1,312		1,541		(229)	(15)	%
Gross profit		1,953		1,521		432	28	%
Operating expenses:
Research and development		5,521		902		4,619	512	%
Sales and marketing		996		836		160	19	%
General and administrative		2,836		1,477		1,359	92	%
Gain on extinguishment of liability		(14,636)		—		14,636	100	%
Total operating expenses		(5,283)		3,215		(8,498)	(264)	%
Income (loss) from operations		7,236		(1,694)		8,930	527	%
Interest expense		(2,082)		(935)		1,147	123	%
Other (expenses) income, net		(4,338)		1,286		(5,624)	(437)	%
Income (loss) before provision for income taxes		816		(1,343)		2,159	(161)	%
Provision for income taxes		59		50		9	18	%
Net income (loss)	$	757	$	(1,393)	$	2,150	(154)	%

Net Revenues

Net revenues increased by $0.2 million, or 7%, to $3.3 million for the three months ended March 31, 2024 from $3.1 million for the three months ended March 31, 2023. The increase was primarily due to an increase of $3.1 million in LTE platform sales and service revenue, and were partially offset by a reduction in LTE sales and service revenue due to customers transitioning from 4G to 5G and the conclusion of several large service projects during the three months ended March 31, 2023.

Product sales increased by $1.8 million, or 297%, to $2.4 million for the three months ended March 31, 2024 from $0.6 million for the three months ended March 31, 2023. The increase was primarily due to a $2.3 million increase in platform product sales, primarily 4.75G and 5G reference development platforms and boards that began being sold in the second quarter of 2023. This increase was partially offset by a $0.5 million decrease in sales of certain of our products, including 4G and 4.5G units.

The reduction in certain of our product sales in 2024 was primarily due to our largest customer changing its priority on product development from 4G to the next generation 5G products during 2023, which resulted in the reduction of 4G activity and decline for demand during the three months ended March 31, 2024. Our net revenues are expected to increase with this customer after we launch our 5G products.

Service revenues decreased by $1.6 million, or 64%, to $0.9 million for the three months ended March 31, 2024 from $2.5 million for the three months ended March 31, 2023. The decrease was primarily due to a $2.4 million reduction in LTE related service revenues due to several large projects nearing completion. This decrease was partially offset mainly by an increase of service revenues related to

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platform product sales, primarily 4.75G and 5G reference development platforms and boards that began being sold in the second quarter of 2023.

Cost of Net Revenues

Cost of net revenues decreased by $0.2 million, or 15%, to $1.3 million for the three months ended March 31, 2024 from $1.5 million for the three months ended March 31, 2023. These decreases were primarily due to lower sales of LTE units which was partially offset by an increase in sales of the LTE platform.

Product costs decreased by $0.3 million, or 33%, to $0.7 million for the three months ended March 31, 2024 from $1.0 million for the three months ended March 31, 2023. The decrease was primarily driven by a $0.3 million decrease in direct product costs as we sold fewer units and a $0.4 million decrease in royalty related costs. This decrease was partially offset by a $0.3 million increase in direct and indirect costs related to LTE platform sales, which began in the second quarter of 2023.

Service costs increased by $0.1 million, or 17%, to $0.7 million for the three months ended March 31, 2024 from $0.6 million for the three months ended March 31, 2023. The increase was primarily due to an increase of $0.5 million in service costs recognized in relation to new projects, which was partially offset by a $0.4 million decrease in service costs related to projects nearing conclusion.

Our gross margin improved to 60% for the three months ended March 31, 2024 from 50% for the three months ended March 31, 2023 primarily due to the increase in higher margin platforms sales. This change in mix was the primary factor that improved our product gross margin to 72% in 2024 from (63)% in 2023. Our service gross margins fell to 26% in 2024 compared to 77% in 2023 due to increased service costs related to new projects.

Research and Development Expenses

Research and development expenses increased by $4.6 million, or 512%, to $5.5 million for the three months ended March 31, 2024 from $0.9 million for the three months ended March 31, 2023. This increase was primarily due to a $2.4 million increase in research and development expenses mainly related to services provided by Alpha to design 5G chip products, $1.1 increase in expensed intellectual property (“IP”) costs related to services provided by Alpha to design 5G chip products, $0.7 million increase in expensed IP costs related to our LTE platform for which sales began in the second quarter of 2023 and a $0.4 million increase in R&D personnel costs due to our heavier focus on research and development activities as sales of our LTE platform continued to increase.

Sales and Marketing Expenses

Sales and marketing expenses increased by $0.2 million, or 19%, to $1.0 million for the three months ended March 31, 2024 from $0.8 million for the three months ended March 31, 2023. The $0.2 million increase was primarily due to several immaterial increases in various costs for the three months ended March 31, 2024.

General and Administrative Expenses

General and administrative expenses increased by $1.4 million, or 92%, to $2.8 million for the three months ended March 31, 2024 from $1.5 million for the three months ended March 31, 2023. The increase was primarily due to a $1.0 million increase in stock-based compensation related to the vesting of equity awards after performance conditions were met on the closure of the merger and a $0.2 million increase in other expenses related to debt fees.

Gain on Extinguishment of Liability

Gain on extinguishment of liability was $14.6 million for the three months ended March 31, 2024 due to the release by a vendor in the three months ended March 31, 2024 of amounts payable by us for research and development services received in prior years. There was no similar transaction that took place during the three months ended March 31, 2023.

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Interest Expense

Interest expense increased by $1.1 million, or 123%, to $2.1 million for the three months ended March 31, 2024 from $0.9 million for the three months ended March 31, 2023. The increase of $1.1 million was primarily due to new debt acquired during the fourth quarter of 2023 and the first quarter of 2024 as well as interest rate increases in the first quarter of 2024 for existing debt agreements.

Other (Expenses) Income, Net

Other (expenses) income, net decreased by $5.6 million, or 437%, to $4.3 million other expenses, net for the three months ended March 31, 2024 from $1.3 million other income, net for the three months ended March 31, 2023. The $5.6 million decrease was primarily due to the loss in fair value remeasurement of our warrants and convertible promissory notes recognized during the three months ended March 31, 2024.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily through cash receipts from customers, the issuance of convertible promissory notes, borrowings, issuance of capital stock and the exercise of stock options.

Except for the three months ended March 31, 2024, we have incurred and expect that we will continue to incur significant operating losses. For the three months ended March 31, 2024 and 2023, we had a net income of $0.8 million and a net loss of $1.4 million, respectively. For the three months ended March 31, 2024 and 2023, we had cash used in operating activities of $14.4 million and $1.5 million, respectively. As of March 31, 2024, we had an accumulated deficit of $548.9 million.

Our condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary if we are unable to obtain adequate financing in the future.

We received $17.2 million in cash proceeds from the reverse recapitalization and PIPE Financing, net of transaction costs. As a result of the cash proceeds received in connection with the Business Combination and other capital resources available to us, including sales of our products and services and the Purchase Agreement (as defined below), we believe we have sufficient cash to fund our operations for at least the next 12 months from the filing of this Quarterly Report on Form 10-Q.

In April 2024, we entered into a common stock purchase agreement (the “Purchase Agreement”) and a related registration rights agreement (the “Registration Rights Agreement”) with B. Riley Principal Capital II, LLC (“B. Riley Principal Capital II”) to provide for an “equity line of credit” Pursuant to the Purchase Agreement and subject to the satisfaction of certain conditions, including the effectiveness of a resale registration statement, we have the right, in our sole discretion, to sell to B. Riley Principal Capital II, from time to time, up to $50.0 million in aggregate gross purchase price of shares of our common stock, subject to certain limitations contained in the Purchase Agreement, during the term of 24 months. Pursuant to the Registration Rights Agreement, the Company is required to file a registration statement on Form S-1 to register the resale of shares of common stock that are sold to B. Riley Principal Capital II under the Purchase Agreement. Sales of common stock by the Company to B. Riley Principal Capital II pursuant to the Purchase Agreement, and the timing of any such sales, are solely at the option of the Company, and the Company is under no obligation to sell any securities to B. Riley Principal Capital II under the Purchase Agreement.

In addition, we have outstanding convertible promissory notes and borrowings as of March 31, 2024 for a total principal amount of $50.5 million, of which $45.5 million is contractually due within 12 months of the balance sheet date.

While a portion of the cash proceeds received in connection with the Business Combination was expended to support our 5G activity and fund other operational expenses, management expects that further and significant ongoing operating expenditures will be necessary to successfully implement our business plan and market our products. With the start of manufacturing, shipments and commercialization of our first 5G chipset expected during 2024, we anticipate significant related expenditures in the form of production-related costs, including mask sets, wafers, and design service fees, and most such costs will be incurred prior to the commencement of manufacturing and production. If we do not have sufficient funds to make such payments, or if we cannot extend the terms of our existing commercial loans or to raise additional capital, the payments can be delayed, which may adversely affect our business operations and financial performance. For a more detailed description of such risks, please see the section entitled “Risk Factors” disclosed in our Registration Statement on Form S-1 filed with the SEC on April 19, 2024.

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We intend to mitigate the risk of any working capital deficit by continuing to seek and execute appropriate actions to secure funding as a publicly traded company, including extension and refinancing of existing loans, securing equity line of credit, and public or private equity offerings, debt financings, and other means. We have historically been able to raise capital through the issuance and sale of equity and equity-linked instruments, such as redeemable convertible preferred stock, convertible promissory notes, and borrowings, although no assurance can be provided that we would continue to be successful in doing so in the future.

We expect to use such additional liquidity and the cash and cash equivalents available to us after the Closing to finance the following activities:

●

Cost of mass production of 5G and other products, including masks, wafers and design house fees;

●

Acquisition of IP and tool enhancement to develop next generation of product;

●

Hiring of additional personnel in engineering and sales and marketing functions; and

●

Improvement of engineering equipment.

While we believe that we have a reasonable basis for our expectation and we will be available to raise additional funds, we cannot provide assurance that we will be able to complete additional financing in a timely manner. Should we enter into definitive collaboration and/or joint venture agreements or engage in business combinations in the future, we may be required to seek additional financing.

Cash flow Comparison for the Three Months Ended March 31, 2024 and 2023

The following table summarizes our cash flows for the periods indicated (in thousands):


	Three Months Ended March 31,
	2024		2023
Cash used in operating activities	$	(14,413)	$	(1,480)
Cash used in investing activities		—		(118)
Cash provided by financing activities		30,274		552
Effect of exchange rate changes on cash		3		(52)
Net increase (decrease) in cash	$	15,864	$	(1,098)

Operating Activities

Cash used in operating activities of $14.4 million during the three months ended March 31, 2024 was primarily attributable to our net income of $0.8 million, offset by $7.0 million in non-cash adjustments and $8.2 million change in our operating assets and liabilities. Non-cash adjustments consisted primarily of $14.6 million gain from the extinguishment of a liability, partially offset by $4.6 million loss from the change in fair value of warrant liabilities, $1.2 million loss from the change in fair value of convertible promissory notes, $1.2 million in stock-based compensation, $0.2 million in depreciation and amortization charges, $0.2 million in operating lease right-of-use amortization and $0.2 million in provision for credit losses. The change in our operating assets and liabilities primarily resulted from a decrease of $4.1 million in our accounts payable, accrued and other current liabilities and other liabilities due to the payment of costs incurred related to our Business Combination, an increase of $2.3 million in our prepaid expenses and other current assets related to timing of payments for inventory and manufacturing of wafers, an increase of $0.9 million in our contract assets due to unbilled services provided under certain projects, an increase of $0.5 million in our accounts receivable primarily due to slower collections from certain customers, an increase of $0.3 million in our inventory due to lower sales, and a decrease of $0.2 million in our lease liabilities.

Cash used in operating activities of $1.5 million during the three months ended March 31, 2023 was primarily attributable to our net loss of $1.4 million and $0.2 million in non-cash adjustments, partially offset by $0.1 million change in our operating assets and liabilities. Non-cash adjustments consisted primarily of $0.5 million gain from the change in fair value of convertible promissory notes, partially offset by $0.2 million in depreciation and amortization and $0.2 million operating lease right-of-use amortization. The change in our operating assets and liabilities primarily resulted from a decrease of $2.1 million in our accounts receivable corresponding to lower revenues and an increase of $0.8 million in our accounts payable, accrued and other current liabilities and other liabilities related to the timing of payments, partially offset by an increase of $1.8 million in our contract assets due to unbilled services provided under certain projects, an increase of $0.7 million in inventory due to lower sales, and a decrease of $0.7 million in our contract liabilities due to the provision of our services under certain projects.

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Investing Activities

There was no activity related to investing activities during the three months ended March 31, 2024.

Cash used in investing activities of $0.1 million during the three months ended March 31, 2023 related to the purchases of property and equipment.

Financing Activities

Cash provided by financing activities of $30.3 million during the three months ended March 31, 2024 consisted of $17.2 million from proceeds received from the reverse recapitalization and PIPE Financing, net of transaction costs, $16.3 million in proceeds from the issuance of convertible promissory notes, partially offset by $3.2 million repayment of our bank borrowings.

Cash provided by financing activities of $0.6 million during the three months ended March 31, 2023 primarily related to net proceeds from bank borrowings.

Commitments and Contractual Obligations

We have material commitments and contractual obligations including leases, purchase commitments, and research and development agreements. We have various operating leases, under which we lease office equipment and office space. The operating leases have various expiration dates through 2026.

We have certain commitments for outstanding purchase orders related to the manufacture of certain wafers utilized by the Company and other services, and we have entered into a material research and development agreement. See Note 8, to our unaudited condensed consolidated financial statements included in herein for more information regarding our additional commitments and contractual obligations.

We have certain debt agreements in place related to convertible promissory notes and borrowings. See Note 7, to our unaudited condensed consolidated financial statements included in herein for more information regarding our debt arrangements.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements and the related notes thereto included herein are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts and related disclosures in our condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience and various other factors that we believe to be reasonable under the circumstances, which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions due to the inherent uncertainty involved in making those estimates, and any such differences may be material.

There have been no material changes to our critical accounting estimates from those described under in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Judgements and Estimates disclosed in our Form 8-K filing with the SEC on April 1, 2024, , except that from the Closing we have certain contracts in our own equity that are subject to liability classification and remeasurement each reporting periods.

Revenue Recognition

Our revenues are generated by the sale of mobile semiconductor solutions consisting of products and platform solutions aimed at the LTE and 5G industries, development services, and technical advice and maintenance services.

The timing of revenue recognition and the amount of revenue recognized in each case depends on various factors, including the specific terms of each arrangement and the nature of the underlying performance obligations. Revenues from sales of our products are recognized upon transfer of control to the customer, which is generally at the time of shipment. Service revenues from development services, technical advice, and maintenance services are generally recognized over time as these performance obligations are satisfied.

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We make estimates of potential future returns and sales allowances related to current period product revenue. We analyze historical return rates and changes in customer demand when evaluating the adequacy of returns and sales allowances. Although we believe we have a reasonable basis for our estimates, such estimates may differ from actual returns and sales allowances. These differences may materially impact reported net product revenues and amounts ultimately collected on accounts receivable.

Provision for Credit Losses

Accounts receivable balances are primarily derived from revenues earned from customers located in the United States, China, Korea, Japan, and Taiwan. We perform ongoing credit evaluations of the financial conditions of our customers and distributors, and generally do not require collateral from our customers. We continuously monitor collections and payments from customers and maintain a provision for credit losses based upon the collectability of our customer accounts. We review the provision by considering certain factors such as historical experience, industry data, credit quality, age of balances and current economic conditions that may affect a customer’s ability to pay. Uncollectible receivables are written off when all efforts to collect have been exhausted and recoveries are recognized when they are recovered. While such credit losses have historically been minimal, within our expectations and the provisions established, we cannot guarantee that we will continue to experience the same credit loss rates that we had in the past. A significant change in the liquidity or financial position of any of our significant customers could have a material adverse effect on the collectability of our accounts receivable and our future operating results. The provision for credit losses was $1.9 million and $1.6 million as of March 31, 2024 and December 31, 2023, respectively.

Fair Value of Convertible Promissory Notes

We have made an election to account for our convertible promissory notes under the fair value option, the convertible promissory notes are recorded at their initial fair value on the date of issuance and then are adjusted to fair value upon any modification and at each balance sheet date thereafter. Changes in the estimated fair value of the convertible promissory notes are recognized as non-cash gains or losses in the condensed consolidated statements of operations within other income, net.

Our convertible promissory notes are valued using a discounted cash flow (“DCF”) model or binomial lattice model (“BLM”) and prior to the Business Combination were valued using a combination of an option pricing model and Probability-Weighted Expected Return Method (“PWERM”), which are considered to be a Level 3 fair value measurements. Significant assumptions used in the DCF include the remaining term and discount rate. Significant assumptions used in the BLM include volatility, remaining term, risk-free rate and credit spread. The PWERM is a scenario-based methodology that estimates the fair value based using an analysis of future values for the Company that assumes various outcomes. The value is based on the probability-weighted present value of expected future investment returns considering each of the possible outcomes available. The future value under each outcome is discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability-weighted to arrive at an indication of value. Significant assumptions used in the PWERM include volatility, discount rate, and the probability of a future liquidity event.

Contracts in Own Equity – Fair Value of Warrants

We classify contracts in equity, including warrants to purchase shares of the Company’s common stock, that do not meet the indexation guidance as liabilities. At the end of each reporting period, these liability-classified instruments are remeasured using an option pricing model or BLM. Significant assumptions are used in determining the fair value of our warrants and include volatility and the risk-free rate.

Recent Accounting Pronouncements

See Note 2 to our condensed consolidated financial statements included herein for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one yet, of their potential impact on our financial condition and results of operations.

JOBS Act Accounting Smaller Reporting Company Elections

We are an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies.

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We have elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our condensed consolidated financial statements may or may not be comparable to companies that comply with new or revised accounting pronouncements as of public companies’ effective dates.

We are also a “smaller reporting company,” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company.

We have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies, and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non- affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company, as defined by Rule 12b-2 under the Securities and Exchange Act of 1934, as amended (the Exchange Act) and in Item 10(f)(1) of Regulation S-K and are not required to provide the information under this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of March 31, 2024, management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of March 31, 2024, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently a party to any material legal proceedings. From time to time, we may, however, in the ordinary course of business become involved in legal proceedings. Regardless of outcome, litigation could have a material adverse effect on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors, and there can be no assurances that favorable outcomes will be obtained.

ITEM 1A. Risk Factors.

There have been no material changes to the risk factors we previously disclosed in our Registration Statement on Form S-1 filed with the SEC on April 19, 2024. Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently consider immaterial to our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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ITEM 6. Exhibits.


		Exhibit Index
Exhibit No.		Description
10.1‡*		Employment Agreement, dated March 8, 2024, by and between GCT Semiconductor, Inc. and Edmond Cheng, Chief Financial Officer of the Registrant.
10.2*		Letter Agreement to Sponsor Support Agreement, dated March 26, 2024, by and among GCT Semiconductor, Inc., Concord Acquisition Corp III, GCT Semiconductor, Inc., Concord Sponsor Group III LLC and CA2 Co-Investment LLC.
10.3‡*		Convertible Promissory Note, dated February 26, 2024, by and between GCT Semiconductor, Inc. and Gogo Business Aviation LLC, a Delaware limited liability company.
10.4‡*		Foundry Product Development Agreement, dated February 26, 2024, by and between GCT Semiconductor, Inc. and Alpha Holdings Co., Ltd.
10.5		Common Stock Purchase Agreement, dated April 23, 2024 by and between GCT Semiconductor Holding, Inc. and B. Riley Principal Capital II, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on April 24, 2024).
10.6		Registration Rights Agreement, dated April 23, 2024 by and between GCT Semiconductor Holding, Inc. and B. Riley Principal Capital II, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on April 24, 2024).
31.1		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of the Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of the Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Filed herewith

‡Portions of this exhibit are redacted in accordance with Regulation S-K Item 601(b)(10)(iv).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GCT Semiconductor Holding, Inc.

Date: May 14, 2024	By:	/s/ John Schlaefer
	Name:	John Schlaefer
	Title:	Chief Executive Officer

	GCT Semiconductor Holding, Inc.

Date: May 14, 2024	By:	/s/ Edmond Cheng
	Name:	Edmond Cheng
	Title:	Chief Financial Officer

Exhibit 10.1

CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY [***], HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

GCT Semiconductor, Inc.2290 N. First st. suite 201, San Jose, CA 95131 Tel. 408.434.6040 Fax.408.4346050

March 6, 2024

Edmond Cheng

[***]

RE: Employment offer; Employment Agreement

Dear Edmond:

On behalf of GCT Semiconductor, Inc. (“Company”), I am pleased to offer you full-time employment beginning March 18 2024 (“Start Date”), subject to the following terms and conditions.

1.Position

You will be employed by the Company with the position of Chief Financial Officer (“CFO”). In this position, you will report to the Chief Executive Officer (“CEO”) and you shall have such duties and responsibilities as are customary for a CFO and as may be assigned by the CEO or the Board of Directors of the Company.

While remote work is allowed, you will need to travel to the Company’s San Jose, California, headquarter offices, as is required to fulfill your duties and responsibilities and to manage your team. Also, your position will require travel from time-to-time elsewhere throughout the United States and internationally such as to our offices in Korea, Japan and China.

As an employee of the Company, you will be expected to comply with the Company’s personnel and other policies including, but not limited to, the Company’s policy prohibiting discrimination and unlawful harassment, insider trading, conflicts of interest and violation of applicable laws in the course of performing services to the Company. As an executive employee and officer of the Company you will be expected to administer and enforce these policies, with support from Human Resources and the Company’s legal counsel.

As a full-time employee, the Company requires that you devote your full business time, attention, skills and efforts to the duties and responsibilities of your position. You agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting, or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. It is understood that you will be assisting your former employer (Cenntro Electric Group, Ltd.) in their transition to a new CFO immediately following your departure. In this effort you will be engaged as a consultant for this purpose for approximately three (3) from your start date and this period will overlap with your initial fulltime employment at GCT. While we will accommodate this arrangement, you agree that you will perform your duties as a full-time CFO with GCT without interruption, and that your activities in such transition will not interfere with your obligations and duties with respect to GCT.

	Mr. Edmond Cheng
	March 7, 2024
	Employment Agreement
	Page 2 of 4

2.Cash Compensation

Salary. As a full-time employee in the regular exempt position of CFO, you will earn an annual salary of $285,000, less applicable deductions and withholdings, payable in accordance with the Company’s regular payroll schedule. Generally, your salary rate will be reviewed, and may be adjusted in the discretion of the Company, on an annual basis.

Bonuses. In this position, you also will be eligible to earn a bonus annually with a targeted incentive rate of 25% of your base salary, beginning with fiscal and calendar year 2024. Whether to grant a bonus, and in what amount, are determinations to be made in the discretion of the Board or the Compensation Committee based on a variety of factors including, but not limited to, achievement of objectives established for the Company and for your position, and your overall job performance. In order to receive any bonus award, you must be employed through the end of the calendar year and still be employed by the Company at the time it makes bonus payments, generally during the first quarter of the following calendar year. Also you will be paid a one time sign-on bonus of $25,000 no later that 30 days after the Start Date. This bonus will need to be reimbursed fully to the Company if, for any reason, your employment with the Company lasts less than one year from the Start Date.

3.Benefits

You shall be eligible to participate in all of the employee benefits and benefit plans that the Company generally makes available to its full-time regular employees, subject to the terms and conditions of such benefits and benefit plans, subject to any statutory requirements or limitations. These benefits include, but are not limited to, group health plans, life, disability and AD&D insurances, a 401k Retirement Savings Plan, and vacation/paid time off.

You will accrue four weeks (20 days) paid vacation per year beginning with calendar year 2024 (pro-rated for the initial year), but you may never have an accrued balance in excess of five weeks (25 days) of vacation. Once you reach that maximum balance, you will cease accruing vacation until you use some of your balance thereby bringing it below the maximum allowed.

You also will be eligible to participate in any other benefits and benefits plans that the Company makes available from time-to-time to its executive level employees. Detailed information about the benefits presently available will be provided to you upon request or after you accept this offer.

4.Equity

It will be recommended to the Board that you are granted 76 000 Restricted Stock Units (RSUs) of the Company’s common stock post SPAC transaction closing (the “RSUs”). The RSUs will be evidenced by a restricted stock unit issuance agreement and will be subject to the terms and conditions of that agreement and the Company’s equity incentive plan under which the RSUs are granted.

Such terms and conditions will include, but not be limited to a vesting schedule pursuant to which 25% of the Option shares will vest each year of service over a four (4) -year period of service measured from the vesting commencement date.

	Mr. Edmond Cheng
	March 7, 2024
	Employment Agreement
	Page 3 of 4

5.“At Will” Employment

Employment with the Company is “at-will”. This means that it is not for any specified period of time and can be terminated by you or by the Company at any time, with or without advance notice, and for any or no particular reason or cause This “at-will” nature of your employment shall remain unchanged during your tenure as an employee, and can only be changed by an express written agreement that is signed by you and by the Company’s Chief Executive Officer .

6.Conditions of Offer

This offer, and any employment pursuant to this offer, is conditioned upon the following:

●

Your ability to provide satisfactory documentary proof of your identity and right to work in the United States of America on your first day of employment. Enclosed is the INS Form 1-9, Employment Eligibility Verification, the second page of which includes a description of acceptable documentary proof.

●

Your signed agreement to, and ongoing compliance with, the terms of the enclosed Proprietary Information & Inventions Assignment Agreement without modification (“PIIA”).

●

Your return of the enclosed copy of this letter, after being signed by you without modification, ^lno later than March 13 2024 after which time this offer will expire.

●

By signing and accepting this offer, you represent and warrant that: (i) you are not subject to any pre-existing contractual or other legal obligation with any person, company or business enterprise that may be an impediment to your employment with, or your providing services to, the Company as its employee; (ii) you have not and shall not bring onto Company premises, or use in the course of your employment with the Company, any confidential or proprietary information of another person, company or business enterprise to whom you previously provided services; and (iii) you are not relying on any representations, promises or agreements not expressly contained in this letter.

Entire Agreement

If you accept this offer, and the conditions of this offer are satisfied, this letter and the written agreements referenced in this letter (including, but not limited to, the PIIA) shall constitute the complete agreement between you and the Company with respect to the initial terms and conditions of your employment (“Employment Agreement”). Any representations, promises or agreements, whether written or oral, not contained in or contrary to those contained in this Employment Agreement that may have been made to you are expressly cancelled and replaced by this Employment

¹Any agreed-upon modification will be in writing in a revised offer letter.

	Mr. Edmond Cheng
	March 7, 2024
	Employment Agreement
	Page 4 of 4

Agreement. Except as otherwise specified in this Employment Agreement, the terms and conditions of your employment pursuant to this Employment Agreement may not be changed, except by a express writing signed by the Company’s Chief Executive Officer or Chairman of the Board. The Company’s successors and assigns shall be bound by this Employment Agreement.

We look forward to you accepting this offer and a mutually rewarding relationship. If you accept this offer, please date and sign below, on the enclosed copy of this letter and return a scanned copy to me via email, no later than March 13, 2024. Please retain the original of this letter for your records.

Sincerely,

John Schlaefer

President and Chief Executive Officer

Encls.: Copy of letter

Proprietary Information & Inventions Assignment Agreement

INS Form 1-9, Employment Eligibility Verification

I have read, I understand, and voluntarily accept the above offer:

Date:	3/8 ,2024		s Edmond Cheng
			Edmond Cheng

Exhibit 10.2

March 26, 2024

Re: Sponsor Earnout

Ladies and Gentlemen:

Reference is made to that certain Sponsor Support Agreement (as the same has been or may be amended, modified, supplemented, or waived from time to time, the "Sponsor Support Agreement"), dated as of November 2, 2023, by and among Concord Sponsor Group III LLC, a Delaware limited liability company ("Sponsor"), CA2 Co-Investment LLC, a Delaware limited liability company ("CA2" and, together with Sponsor, the "Sponsor Parties"), Concord Acquisition Corp III, a Delaware corporation ("SPAC"), and GCT Semiconductor, Inc., a Delaware corporation (the "Company"). Capitalized terms used but not defined herein shall have the meanings set forth in the Sponsor Support Agreement.

This letter agreement (this "Letter Agreement") confirms the parties' understanding of, and agreement regarding, Article 5 (Sponsor Earnout) of the Sponsor Support Agreement. The parties hereby understand and agree as follows:

(1)

For purposes of determining (a) the Sponsor Earnout Ratio, (b) the number of Sponsor Earnout Shares and (c) the number of Sponsor Unretained Earnout Shares, the amount of SPAC Funding shall be:

calculated as the amount equal to: (x) the funds remaining in the Trust Account at the Closing after giving effect to the exercise of Redemption Rights (and reversals) by holders of SPAC Common Stock (which amount shall be set forth on Schedule 1 hereto on the Closing Date), plus (y) an amount equal to $10,000,000, plus (z) the aggregate proceeds provided to SPAC or the Company (or any of their subsidiaries) pursuant to any debt or equity financing with investors or lenders that are introduced by or affiliated with the Sponsor Parties (the "Qualified Financing") during the period starting on the Closing Date and ending 120 days after the Closing Date. For the avoidance of doubt, (a) the Qualified Financing shall not include any debt or equity financing with any Company Insiders or any financing pursuant to any "at-the-market" or "equity line of credit" agreements, and (b) neither of the Sponsor Parties shall have any obligation to provide any financing to the Company or take any action, including investor introductions, with respect to any type of financing by the Company; and

ii.

determined as of the date that is 121 days after the Closing Date; provided that, for the avoidance of doubt, in no event shall the number of Sponsor Earnout Shares be less than 570,796; and

(2)

The forfeiture of Sponsor Unretained Earnout Shares, if any, by the Sponsor Parties, as contemplated by Section 5(g) of the Sponsor Support Agreement, shall take place on (and not before) the date that is 121 days after the Closing Date (and, for the avoidance of doubt, shall not take place concurrently with the Closing).

All other terms and conditions of the Sponsor Support Agreement shall remain in full force and effect. This Letter Agreement shall be governed by all provisions of the Sponsor Support Agreement unless context requires otherwise, including all provisions concerning construction, enforcement and

governing law. This Letter Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

[Signature Page Follows.]

IN WITNESS WHEREOF, the Sponsor Parties, SPAC and the Company have caused this Letter Agreement to be executed as of the date first written above.

	CONCORD SPONSOR GROUP III LLC

	By	s Timothy Kacani
	Name:	Timothy Kacani
	Title:	Authorized Signatory

	CA2 CO-INVESTMENT LLC

	By
	Name:
	Title:

	CONCORD ACQUISITION CORP III

	By
	Name:	Jeff Tuder
	Title:	Chief Executive Officer

	GCT SEMICONDUCTOR, INC.

	By
	Name:	John Schlaefer
	Title:	Chief Executive Officer

[Signature Page to Letter Agreement]

IN WITNESS WHEREOF, the Sponsor Parties, SPAC and the Company have caused this Letter Agreement to be executed as of the date first written above.

	CONCORD SPONSOR GROUP III LLC

	By
	Name:	Timothy Kacani
	Title:	Authorized Signatory

	CA2 CO-INVESTMENT LLC

	By	s Stephen Lasota
	Name:	Stephen Lasota
	Title:	CFO

	CONCORD ACQUISITION CORP III

	By
	Name:	Jeff Tuder
	Title:	Chief Executive Officer

	GCT SEMICONDUCTOR, INC.

	By
	Name:	John Schlaefer
	Title:	Chief Executive Officer

[Signature Page to Letter Agreement]

IN WITNESS WHEREOF, the Sponsor Parties, SPAC and the Company have caused this Letter Agreement to be executed as of the date first written above.


	CONCORD SPONSOR GROUP III LLC

	By
	Name:	Timothy Kacani
	Title:	Authorized Signatory

	CA2 CO-INVESTMENT LLC

	By
	Name:
	Title:

	CONCORD ACQUISITION CORP III

	By	s Jeff Tuder
	Name:	Jeff Tuder
	Title:	Chief Executive Officer

	GCT SEMICONDUCTOR, INC.

	By
	Name:	John Schlaefer
	Title:	Chief Executive Officer

[Signature Page to Letter Agreement]

IN WITNESS WHEREOF, the Sponsor Parties, SPAC and the Company have caused this Letter Agreement to be executed as of the date first written above.


	CONCORD SPONSOR GROUP III LLC

	By
	Name:	Timothy Kacani
	Title:	Authorized Signatory

	CA2 CO-INVESTMENT LLC

	By
	Name:
	Title:

	CONCORD ACQUISITION CORP III

	By
	Name:	Jeff Tuder
	Title:	Chief Executive Officer

	GCT SEMICONDUCTOR, INC.

	By	s John Schlaefer
	Name:	John Schlaefer
	Title:	Chief Executive Officer

[Signature Page to Letter Agreement]

SCHEDULE 1

The amount of funds remaining in the Trust Account at the Closing after giving effect to the exercise of Redemption Rights (and reversals) by holders of SPAC Common Stock:

$1,889,259.94

Exhibit 10.3

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR EXEMPT FROM SUCH REGISTRATION AND QUALIFICATION REQUIREMENTS. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS NOTE HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS OF ALL PARTIES TO THIS NOTE ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION BEING AVAILABLE.

GCT SEMICONDUCTOR, INC.

CONVERTIBLE PROMISSORY NOTE

$5,000,000.00

February 26, 2024 (the “Issuance Date”)

1.Principal and Interest. GCT Semiconductor, Inc., a Delaware corporation (the “Company”), for value received, hereby promises to pay to the order of [***] (the “Holder”) the amount of $5,000,000.00 (the “Principal Amount”). This Convertible Promissory Note (the “Note”) shall bear simple interest at the rate of 5.0% per annum from the date of issuance until repayment of the Note or conversion of the Note as set forth in Section 5 hereof. Interest on this Note shall be computed on the basis of a 365 day year and actual days elapsed.

2.Maturity. The outstanding principal amount of and all accrued but unpaid interest on this Note shall be due and payable on the second anniversary of the date hereof (the “Maturity Date”).

3.Payment; Prepayment. All payments shall be made in lawful money of the United States of America at such place as the Holder hereof may from time to time designate in writing to the Company. Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal. Prepayment of this Note may be made by the Company at any time with or without the consent of Holder.

4.Termination; Cancellation. The obligations of the Company pursuant to this Note shall remain in full force and effect until the unpaid principal and accrued interest shall have been indefeasibly paid in full in immediately available funds in accordance with the terms hereof or until the conversion of this Note in accordance with the terms hereof, at which time this Note shall automatically terminate without any further action required. Upon conversion or repayment of this Note as provided herein, the Holder shall surrender this Note to the Company for cancellation.

5.Conversion.

(a)Conversion upon Demand at Holder’s discretion. While any principal amount is outstanding under this Note, the Holder may demand conversion of the principal and interest on this Note on or after the earlier of (i) the completion of the SPAC Transaction (as defined below) and (ii) the six-month anniversary of the Issuance Date. Upon written demand by the Holder made to the Company in accordance with this Section 5(a), the outstanding principal amount of and all accrued but unpaid interest on this Note shall be converted into fully paid and non-assessable shares of the Company’s Common Stock at a conversion price equal to $10.00 per share. A “SPAC Transaction” is a transaction or series of related transactions by merger, consolidation, share exchange or otherwise with the “special purpose acquisition company”, including Concord Acquisition Corp., III, or an affiliate or subsidiary thereof (collectively, the “SPAC”), pursuant to which the Company’s Common Stock (or similar securities of the SPAC) is listed publicly on the Nasdaq Stock Market, the New York Stock Exchange or another exchange or marketplace approved by the Board of Directors and the shares of capital stock of the Company outstanding immediately prior to such transaction continue to represent, or are converted into or exchanged for shares of common stock (or similar securities) that represent, immediately following such combination, at least a majority, by voting power, of the common stock (or similar securities) of the surviving or parent entity (such transaction or series of related transactions.

(b)Conversion upon Demand in Equity Financing. If, prior to repayment of this Note, the Company issues and sells shares of a new series of its preferred stock to investors in a private financing or series of related private financings (a “Next Equity Financing”), then the Company shall inform the Holder of the Next Equity Financing at least fourteen (14) days prior to the targeted initial closing of the Next Equity Financing. Upon written demand by the Holder made to the Company at least seven (7) days prior to the targeted initial closing of the Next Equity Financing, the outstanding principal amount of and all accrued but unpaid interest on the Note shall be converted into fully paid and non-assessable shares of the capital stock issued at the per share price of securities sold in the Next Equity Financing, on the same terms and conditions as the investors in the Next Equity Financing. For subsequent closings in the Next Equity Financing, the notice provisions set forth in this Section 5(b) shall not apply; if the Holder elects to convert in the Next Equity Financing, then the Company shall convert this Note at the next closing date.

(c)Change of Control. In the event that a Change of Control (as defined below) is consummated prior to the repayment or conversion of this Note, the Holder, in the Holder’s sole discretion, may declare that this Note shall be due and payable immediately prior to the closing of the Change of Control, and the Holder shall be entitled to receive in payment thereof an amount equal to the sum of outstanding principal amount of the Note and all accrued but unpaid interest thereon. For the purposes of this Note, “Change of Control” shall mean, other than a SPAC Transaction, (i) a liquidation, dissolution or winding up of the Company, (ii) an acquisition of the

Company by another person or entity by means of any transaction or series of related transactions to which the Company is a party (including, without limitation, a merger, consolidation or other corporate reorganization), other than an acquisition in which the shares of capital stock held by stockholders of the Company immediately prior to such acquisition continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately after such acquisition and by virtue of the acquisition, a majority of the total outstanding voting power of the surviving or acquiring person or entity or the parent entity thereof, or (iii) a transaction or series of related transactions to which the Company is a party (whether by merger, consolidation, stock acquisition or otherwise) in which a majority of the total outstanding voting power of the Company is transferred. Notwithstanding the foregoing sentence, a transaction shall not constitute a Change of Control if the primary purpose is to change the jurisdiction of the Company’s incorporation, create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction, or is a bona fide equity financing transaction.

(d)Conversion Procedures. On the date of conversion of this Note, the outstanding principal amount of and all accrued but unpaid interest on this Note through the date of conversion shall be converted without any further action by the Holder and whether or not the Note is surrendered to the Company. The Company shall not be obligated to issue certificates evidencing the shares of capital stock of the Company into which this Note may convert unless (i) this Note is delivered to the Company or the Holder notifies the Company that this Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with this Note, and (ii) in the event of a conversion pursuant to a Next Equity Financing, the Holder has executed such documents and agreements as are required of investors generally in such financings. The Company shall, as soon as practicable thereafter, issue and deliver certificates representing the number of shares of capital stock of the Company in accordance with the provisions hereof.

(e)No Fractional Shares. No fractional shares of capital stock of the Company shall be issued upon conversion of this Note. In lieu of such fractional shares, the Company shall pay to the Holder in cash the amount that is not so converted.

(f)Payment of Accrued Interest. Notwithstanding the conversion of this Note, the Company, in its discretion, may, at the time of conversion, elect to pay all or a portion of the accrued but unpaid interest on this Note in cash.

6.Representations, Warranties and Covenants.

(a) GCT represents and warrants to [***].

(b)GCT covenants and agrees with [***] that GCT shall:

(i)as soon as practicable, but in no event later than [***]; and

(ii)use best efforts to ensure that [***].

For purposes of this Section 6, the following definitions shall apply:

[***].

“GCT” means GCT SEMICONDUCTOR, INC. and GCT RESEARCH, INC., jointly and severally.

[***].

“Knowledge” means the knowledge of Chief Executive Officer or an executive officer of [***] review of related correspondence.

“Principal Amount” means the principal amount of $5,000,000.00 paid to GCT by [***] pursuant hereto.

“Project” means the development of the relevant 5G chipsets by GCT.

[***].

7.Events of Default. If there shall be any Event of Default (as defined below), at the option and upon the declaration of the Holder and upon written notice to the Company (which election and notice shall not be required in the case of an Event of Default under clauses (ii) or (iii) below), this Note shall accelerate and the entire principal amount of and all accrued but unpaid interest on this Note shall become due and payable. The occurrence of any one or more of the following shall constitute an “Event of Default”: (i) the Company fails to pay timely any of the principal amount of or any accrued interest or other amounts due under this Note on the date the same become due and payable, and such failure to pay is not cured within thirty (30) days after the occurrence thereof; (ii) the Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing; (iii) an involuntary petition is filed against the Company (unless such petition is dismissed or discharged within ninety (90) days) under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of the Company; (iv) any representation, warranty, certification, or other statement of fact made or deemed made by or on behalf of the Company pursuant to Section 6 of this Note, proves to have been false or misleading in any material respect on or as of the date made or deemed made; or (v) the Company fails to perform or observe any covenant, term, condition, or agreement contained in Section 6.

8.Assignment. Subject to the restrictions on transfer described in Section 10 hereof, the rights and obligations of the Company and the Holder of this Note shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties. Effective upon any such assignment, any party to whom such rights, interests and obligations were assigned by the Holder shall have all of the Holder’s rights, interests and obligations hereunder as if such party were the original Holder of this Note.

9.Amendments and Waivers. Any term of this Note may be amended and the observance of any term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively) upon the written consent of the Company and the Holder. Any amendment or waiver so effected shall be binding upon each holder of this Note then outstanding

(including securities into which this Note has been converted), each future holder of all such securities, and the Company.

10.Transfer of this Note.

(a)This Note may be transferred only upon its surrender to the Company for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, this Note shall be reissued to, and registered in the name of, the transferee, or a new Note for like principal amount and interest shall be issued to, and registered in the name of, the transferee. The balance of this Note shall be paid solely to the registered holder of this Note. Such payment in full shall constitute full discharge of the Company’s obligation to pay such amounts.

(b)Notwithstanding Section 10(a), without the prior written consent of the Company, (i) the Holder shall not transfer this Note to anyone other than an affiliate (as defined in Rule 144 under the Securities Act of 1933, as amended) of the Holder for one (1) year following the issuance of this Note to the initial Holder, and (ii) the Company shall not be obligated to process a transfer of this Note unless the minimum amount of principal proposed to be transferred is equal to or greater than $500,000, provided, however, that the restriction on transfer set forth in clause (i) shall not apply from and after a Change of Control.

11.Notices. All notices required or permitted hereunder shall be given in writing, addressed to the respective party at the address set forth on such party’s signature page herein.

12.No Stockholder Rights. This Note shall not confer upon the Holder any rights as a stockholder of the Company, including, without limitation, the right to vote, consent or receive notice as a stockholder in respect of actions or meetings of stockholders, or the right to receive dividends, until this Note has been converted.

13.Governing Law. This Note shall be governed by and construed under the laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California.

14.Expenses. The Company and the Holder shall each bear its own legal costs and other expenses with respect to this Note.

15.Loss, Theft or Destruction of Note. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft or destruction of this Note and of indemnity or security reasonably satisfactory to it, the Company shall issue and deliver, in lieu of this Note, a new Note which shall carry the same rights to interest carried by this Note, stating that such new Note is issued in replacement of this Note, making reference to the original date of issuance of this Note (and any successors hereto) and dated as of such cancellation.

16.Usury. This Note is hereby expressly limited so that in no event whatsoever shall the amount paid or agreed to be paid to the Holder hereunder exceed that permissible under applicable law. If at any time the performance of any provision of this Note involves a payment exceeding the limit that may be validly charged under applicable law, then the obligation to be performed shall be automatically reduced to such limit.

17.Confidentiality. The Company and the Holder shall keep strictly confidential this Note (including, without limitation, the existence or subject matter of this Note) and the terms contained herein. The Holder shall not, and shall not authorize or permit any of its affiliates, consultants, engineers, contractors, subcontractors, lenders, investors, partners, accountants, financial partners, employees, agents, directors, officers, attorneys, and surveyors (collectively, “Holder’s Representatives” to, orally or in writing publicly disclose, issue any press release or make any other public statement, or otherwise communicate with third parties, concerning the existence of this Note or any of the transactions or the terms or subject matter of any of the foregoing, without obtaining the prior written approval of the Company. Notwithstanding the foregoing, the Company and the Holder may make disclosures of any information, without any requirement for notice to or consent from such other party: (a) as and when mandated by applicable law; (b) if the information is in the public domain, provided that the public nature of the information is not due to the breach of such party’s obligations under this Note; and (c) to the Holder’s Representatives to the extent reasonably necessary in order to facilitate the Holders purchase of the Note, in which event the Holder shall be responsible for the Holder’s Representatives maintaining the confidentiality of such information. If the Holder or any of the Holder’s Representatives are requested or required (by oral question, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process ) to disclose any information required to be kept confidential hereunder, the Holder shall, to the extent legally permissible, promptly notify the Company in writing of such request or requirement as soon as reasonably practicable so that the Company may seek an appropriate protective order or waiver in compliance with provisions of this Note and, if in the absence of a protective order or the receipt of a waiver hereunder, the Holder or any of the Holder’s Representatives are, in the judgment of the Holder’s internal or external counsel, compelled to disclose such confidential information or else stand liable for contempt or suffer other censure or significant penalty, the Holder may disclose only such of the confidential information to the party compelling disclosure as is required by law or regulation.

18.Issue Date. The provisions of this Note shall be construed and shall be given effect in all respects as if this Note had been issued and delivered by the Company on the earlier of the date hereof or the date of issuance of any Note for which this Note is issued in replacement.

19.Titles and Subtitles. The titles and subtitles used herein are used for convenience only and are not to be considered in construing or interpreting this Note.

20.Delays. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right.

21.Counterparts; Manner of Delivery. This Note may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

22.Severability. If any provision of this Note is held to be illegal or unenforceable under applicable law, such provision shall be excluded from this Note and the balance of this Note shall

be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

(Remainder of page intentionally left blank, signature page follows)

IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date first above written.

	GCT Semiconductor, Inc.

	Signed:

	[***]

SIGNATURE PAGE TO CONVERTIBLE PROMISSORY NOTE

IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date first above written.


	Agreed to and accepted:

	[***]

	Signed:

	[***]

SIGNATURE PAGE TO CONVERTIBLE PROMISSORY NOTE

Exhibit 10.4

CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY [***], HAS BEEN
EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT
IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS
PRIVATE OR CONFIDENTIAL.

Foundry Product Development Agreement

This Foundry Product Development Agreement (the “Development Agreement”) is made and entered into, as of February 26, 2024 (the “Execution Date”), by and between GCT Semiconductor, Inc., a company existing under the laws of the State of Delaware, USA, having its principal place of business at 2290 North 1st Street, Suite 201, San Jose, CA 95131 USA (the “Entrustor”) and Alpha Holdings Co., Ltd., a company existing under the laws of the Republic of Korea, having its registered office at 2nd-4th floors, 225-12, Pangyoyeok-ro, Bundang-gu, Seongnam-si, Gyeonggi-do, Korea (the “Entrustee”). The Entrustor and the Entrustee may be referred to herein individually as a “Party” and collectively as the “Parties”.

Article 1 (Purpose)

The purpose of the Development Agreement is to set forth the general matters necessary for the Entrustee to develop and deliver the Products to the Entrustor based on the information provided by the Entrustor to the Entrustee.

Article 2 (Definitions)

①	“Fab” means the manufacturing plant owned by Samsung Electronics Co., Ltd. (“Samsung Electronics” or “Samsung”) used for the purposes of this Development Agreement.

②	“PG-out” means the completion of the work to convert the design pattern layout for the Products into data usable by the mask production equipment.

③	“SOW” is the abbreviation of the Statement of Work, which refers to the attachment that sets forth the details of a particular Product to be developed under this Development Agreement, and shall become effective upon signing or affixing of their names and seals by the Parties.

④	“Development” means any and all activities under this Development Agreement, other than the Mass Production performed by the Entrustee for a particular Product, including the activities of producing masks and producing prototypes for Quality Verification, as detailed in the SOW.

⑤	"Prototype" means a work product from the Product Development phase, which is a Product manufactured for the purpose of the Quality Verification procedures to proceed with the Mass Production.

⑥	“Mass Production” means the mass production of the Products for which the Quality Verification has been completed in accordance with Article 3(2)4 of this Development Agreement.

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⑦	“Product” means the semiconductor product that is the work product of the Development performed by the Entrustee under the terms and conditions of this Development Agreement.

⑧

“Affiliate” means an entity that, directly or indirectly, controls, is controlled by, or is under common control with a Party to this Agreement, but only for so long as such control exists, and where “control” shall mean ownership of more than 50% of the stock or other equity interests entitled to vote for the election of directors or an equivalent governing body

⑨	“Quality Verification” means that process outlined in Article 3(2)4 of this Development Agreement resulting in a Quality Confirmation Notice.

Article 3 (Development and Mass Production)

①	The Products to be developed by the Entrustee and the details thereof shall be as set forth in the SOW.

②	The Development of the Products shall be conducted in the following order:

The Entrustor shall design the Products that it intends to order by using the [***] provided by the Entrustee, and verify whether the Products so designed are producible in Samsung Electronics’ Fab.

The Entrustor shall provide the design data for which the above verification has been completed to the Entrustee in the form set forth in the relevant SOW.

The Entrustee shall perform the Development activities set forth in the relevant SOW based on the design data and produce and supply to the Entrustor the Prototypes in the quantity set forth in the relevant SOW. Provided that, if any separate agreement is made by and between the Parties, the quantity and schedule of the Prototypes may be adjusted.

Quality Verification: The Entrustor shall conduct a quality inspection (inspection on the functions of the Prototypes) on the Prototypes supplied by the Entrustee [***] to verify whether they meet the product specification (the “Product Specification”) specified in each SOW and review the possibility of Mass Production of the Products, and notify the Entrustee whether to approve them in writing (the “Quality Confirmation Notice”) by delivering the result of the review. Provided that, if Entrustor fails to give the Entrustee a Quality Confirmation Notice [***] of receipt of the Products, the Entrustor shall be deemed to have approved the quality of the Products.

If it is necessary to modify or supplement the Products or the Products do not meet the Product Specification, the Parties may negotiate production of additional Prototypes and additional costs.

Article 4 (Development Costs)

①	The development costs shall be paid by Entrustor to the Entrustee as set forth in the SOW, and the development costs set forth in the SOW shall include the costs for []*.

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②	The following costs shall not be included in the development costs, and if such costs are incurred, such costs shall be determined through consultation between the Parties:

Any costs that may arise if it becomes necessary to [***]; and

Any and all other costs arising from any [***]

Article 5 (Ownership)

①	The masks produced by the Entrustee through the Development shall be the property of the Entrustor. Provided that, the Entrustor may not take the produced masks off the premises of Samsung Electronics’ place of business without the consent of Samsung Electronics.

②	The Entrustee may use the Entrustor-owned masks produced through the Development only for the following purposes:

Production of the Products to achieve the purpose of Development and Mass Production under Article 3 of the Development Agreement; and

Supply of the Products subject to Mass Production to distributors designated in each SOW

③	In any of the following cases, and only with the written consents of Entrustor, the Entrustee may destroy the Products as well as the masks and other information and after the destruction thereof, the Entrustee shall notify the Entrustor in writing of the completion of the destruction:

If there is no Mass Production order for the Products [***] from the date of completion of approval for the quality of the Products Developed through each SOW;

If the annual sales of the Entrustee for the Products are less than [***] from the time when one year has passed after the Mass Production of the Products; or

If there is no Mass Production order [***] after the PG-out.

Article 6 (Product Liability and Compliance with Laws)

①

The Entrustor shall assume the responsibility for any problems arising from the design of the Entrustor. Upon agreement on the Mass Production of the Products by the Parties, only if the Products subject to Mass Production fail to meet the Product Specification in material aspects due to any problem with the process of Samsung Electronics (“Defect”) and is reported through the Entrustor, the Entrustee shall exchange the Products with such Defect with the Products of good quality. Provided that, if such exchange is impossible, the Entrustee may return the supply price of the Products to the Entrustor as agreed between the Parties.

②	The Entrustee shall assist the Entrustor in good faith to promptly resolve any error and all other issues arising from the []* provided by the Entrustee during the Entrustor’s design process for the Products.

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③

The Entrustee shall bear a liability for defects in the portion of Development with respect to the masks and Prototypes produced during the Development phase for the Products. For the other defects in Development, Entrustee shall, at its own cost, replace or otherwise remedy it to proivide defect-free Product.

④

[***]

⑤	The Entrustor may not export the Products to any place i) prohibited by the laws of the Republic of Korea or ii) prohibited by the laws of the United States..

⑥	The Entrustor may not use the Products in any area that may cause harm to life or body, or damage to property.

Article 7 (Intellectual Property Rights)

①

The intellectual property rights relating to the design of the Products performed by the Entrustor shall be vested in the Entrustor. Provided that, the intellectual property rights relating to the technology and information of the Entrustee contained in the Products and those arising from the Development process shall belong to the Entrustee. The Entrustor may not use the technology and information of the Entrustee for any purpose other than the design of the Products produced in Samsung Electronics’ Fab, and shall be liable for any damage incurred by the Entrustee due to any violation of the foregoing.

②

If any litigation or other legal action is filed by a third party against the Entrustee in connection with the Products due to the design of the Products performed by the Entrustor, the Entrustor shall undertake the defense in the litigation, etc. at its own expense and shall take the liability for any damage incurred by the Entrustee.

③

If any litigation or other legal action is filed by a third party against the Entrustor in connection with the Products due to the Development performed by the Entrustee, the Entrustee shall undertake the defense in the litigation, etc. at its own expense and shall take the liability for any damage incurred by the Entrustor. However, the foregoing provision shall not apply if the Entrustee has used and applied the relevant intellectual property rights to the Products at the specific instruction or request of the Entrustor and those instructions resulted in the use of the IP in a manner that caused violation of the relevant intellectual property rights.

④

Each Party may not modify, alter or use for any other design the technical materials and information of the other Party used for the Products at its discretion without the prior written consent of the other Party, and any breach of the foregoing shall be deemed as default on the obligations under Article 12(1).

With respect to the IPs used for the Products, other than the deliverables by Entrustor set forth in Paragraph C of the SOW, the Entrustee warrants that it has obtained the license to the IPs from the relevant third parties and that it legally holds the rights and licenses necessary for Samsung Electronics to develop and produce the Products and for Entrustor to further use and sell the Product as a part of its product for sale to it’s customer base.

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Article 8 (Confidentiality)

①

Each Party shall use the other Party’s trade secrets, technical information, know-how, and other confidential information provided by the other Party in connection with the Development Agreement or obtained in the course of performance hereof (the “Confidential Information”) only for the purposes of the Development Agreement and shall not use such information for any other purpose without the prior written consent of the other Party.

②

Each Party may disclose the relevant Confidential Information only to the officers and employees who need to access the other Party’s materials in connection with the Development Agreement (the “Relevant Officers and Employees”), and the Party disclosing the other Party’s Confidential Information shall ensure that the officers and employees who access the disclosed Confidential Information will be aware of, and comply with the confidentiality obligations under the Development Agreement. In connection with the performance of this Development Agreement, the Party that has obtained the other Party’s Confidential Information may not disclose any Confidential Information to its officers and employees, other than the Relevant Officers and Employees without the prior written consent of the other Party.

Notwithstanding anything in Article 8 of the Agreement to the contrary, Entrustor may disclose the Confidential Information solely to its affiliates listed below (“Permitted Affiliates”); provided that Entrustor shall be liable for any breach by such Permitted Affiliates of the terms hereof as if such breach was committed by Entrustor and such right granted with respect to Confidential Information under this Agreement shall cease if such Permitted Affiliates are no longer its affiliate as defined under Article 8 of this Agreement:

GCT Research, Inc.”

③	If either Party is required to disclose the other Party’s Confidential Information to a third party, the Party must obtain the prior written consent of the other Party and enter into a separate confidentiality agreement with the third party based on the Development Agreement.

④	Any information falling under any of the following cases shall not be considered as Confidential Information under this Article:

(i)

Any publicly announced information;

(ii)

Any information that has become publicly known without being published by, or any intentional misconduct or negligence of the receiving Party after disclosure by the disclosing Party under the Development Agreement;

(iii)

Any information that is already in the possession of the receiving Party at the time of receipt thereof and can be proven, through objective evidence, not to have been obtained from the disclosing Party under confidentiality obligations;

(iv)

Any information that has been duly obtained from a third party who is not under the confidentiality obligations under the Development Agreement without any confidentiality obligations;

(v)

Any information independently developed by the receiving Party without using the Confidential Information of the disclosing Party; or

(vi)

Any information provided by the disclosing Party without imposing any confidentiality obligations.

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⑤

The confidentiality obligations under this Article shall survive for [***] after the provision of Confidential Information, irrespective of the reason therefor, including completion of performance of, cancellation or termination of the Development Agreement, and the Entrustor’s confidentiality obligations with respect to the PDK and the DK provided by the Entrustee shall continue in perpetuity. Provided that, the Entrustor may request separate stricter confidentiality obligations with respect to any particular information to be delivered through the relevant SOW if necessary, and in that case, such confidentiality obligations shall prevail over those under this Article.

Article 9 (Press Report and Use of Title)

①	If either Party intends to cite the execution of the Development Agreement or the terms and conditions thereof, or report or provide information thereon to newspapers, magazines, or other press media, the Party shall obtain the prior written consent of the other Party.

②	If either Party intends to use the other Party’s trade name, trademark or other title for any purpose such as advertising, sales promotion or promotion, the Party shall obtain the prior written consent of the other Party.

Article 10 (Notification Obligation)

①	Upon the occurrence of any of the following events, either Party shall notify the other Party without delay of:

Any event falling under any subparagraph of Article 11(1); or

Any material change in the address, representative, trade name, or other commercial transaction matters.

②

Any and all notices and documents in connection with the Development Agreement shall be sent by fax or mail (including email) to the following addresses. In the event of any change in the address for notification, the relevant Party shall notify the other Party of such change without delay, and the other Party shall send all notices and documents to the changed address.

Notice to Entrustor

[***]

Notice to the Entrustee

[***]

Article 11 (Cancellation or Termination of Agreement)

①	Upon the occurrence of any of the following events to a Party, the other Party may cancel or terminate the Development Agreement or the SOW by giving written notice to the Party without giving any separate notice demanding any action:

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If notes or checks issued by the Party are dishonored, or the Party is subject to suspension of transactions by its primary financial institution;

If the business of the Party is revoked or suspended etc. by the supervisory authorities;

If the Party is subject to provisional attachment, provisional disposition or compulsory execution, etc. by a third party and it is objectively deemed difficult for the Party to perform the Development Agreement; or

If an application for, or a decision on commencement of bankruptcy (including workout) or rehabilitation proceedings have been filed or made.

②

Upon any violation by a Party of any material matter under the Development Agreement or the SOW, the other Party may cancel or terminate the Development Agreement or the SOW by giving written notice to the violating Party, if such violation is not corrected within a period of [***] after giving a notice demanding such correction.

③	Cancellation or termination of the Development Agreement or the SOW shall not affect any claim for damages.

Article 12 (Liability for Indemnification)

①	If either Party breaches, neglects or delays the performance of its obligations under the Development Agreement, the breaching Party shall be solely responsible for such default and make compensation for any damage arising therefrom and take all appropriate actions requested by the other Party.

②	Except for []* of the Development Agreement, the total liability of the Parties under the Development Agreement in connection with a particular SOW shall not exceed []*.

Article 13 (Payment of Development Costs following Cancellation of Development)

If the Parties mutually agree on the cancellation of the Development of the Products prior to the supply of the Prototypes by the Entrustee to the Entrustor during the Development of the Products in accordance with the schedule under the SOW, the Parties shall settle the development costs through mutual consultation.

Article 14 (Term)

①

The term of this Development Agreement shall be [***]. Provided that, the term of the Development Agreement shall be extended [***] from the expected date of expiration thereof, if either Party gives a notice for such extension no later than one (1) month prior to the expiration thereof, and the Development Agreement shall expire if no such notice is sent. Provided that, if there is any SOW with respect to which the development costs under Article 4 of the SOW [***] as of the date of expiration of the Development Agreement, or if there is any SOW with respect to Product Liability under Article 6 of this agreement that have not been resolved as of the date of expiration of the this agreement, the Development Agreement shall be deemed to remain effective until [***].

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②	Articles 1, 2, 4 through 9, 12, 14(2), 15 and 16 of the Development Agreement shall survive the expiration of the term under Paragraph (1) or the termination of the Development Agreement.

Article 15 (Disputes, Governing Law and Jurisdiction)

①

This Development Agreement and all other agreements and documents executed or prepared under this Development Agreement and the rights and obligations of the parties thereto shall be governed by and construed in accordance with the [***]. Any matters not set forth in this Development Agreement or any discrepancy in interpretation shall be determined by consultation between the Parties in accordance with applicable laws and commercial practices.

②	If any dispute arises in connection with this Development Agreement, the Parties shall use their best efforts to resolve such dispute amicably through mutual consultation.

③	Notwithstanding Paragraph (2), any dispute arising in connection with the Development Agreement shall be subject to the jurisdiction []*.

Article 16 (Miscellaneous)

①	The terms and conditions of this Development Agreement may only be amended or modified by a written instrument to which the Parties have affixed their names and seals.

②

Neither Party may assign, provide as security or otherwise dispose of any of its rights and obligations arising under the Development Agreement to any third party in whole or in part without the written consent of the other Party, which consent shall not be unreasonably withheld or delay Provided that, upon the consents of Entrustor, the Entrustee may entrust the performance of the Development Agreement to a third party (the “Sub-Entrustee”), and in such case, the Entrustee may provide the Sub-Entrustee with the Confidential Information of the Entrustor after entering into a confidentiality agreement equivalent to the terms and conditions relating to confidentiality contained in this Development Agreement with the Sub-Entrustee. Also notwithstanding the forgoing either Party may assign all of its rights and obligations under this Agreement to a party that agrees in writing to be bound in connection with a merger, acquisition, or sale of all or substantially all of its assets. Any assignment or delegation in violation of this Article 16 shall be null and void. Subject to the foregoing restrictions, this Agreement will inure to the benefit of the successors and permitted assigns of the Parties.

③

This Development Agreement sets forth all agreements between the Parties with respect to the Development, production and delivery of the Products and supersedes any oral or written agreement between the Parties with respect to the Development, production and delivery of the Products prior to the execution of the Development Agreement.

Appendix. SOW

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[Signature page follows]

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IN WITNESSETH WHEREOF, the Parties have executed two copies of this Agreement, each affixed with their names and seals, and each copy shall be kept by each Party.

February 26, 2024


The Entrustor		The Entrustee
GCT Semiconductor, Inc.		Alpha Holdings Co., Ltd.
2290 North First Street, Suite 201		2F-4F, 225-12, Pangyoyeok-ro, Bundang-gu,
San Jose, CA 95131, USA		Seongnam-SI, Gyeonggi-do (Jetema, 671,
[]*		Sampyeong-dong)
		[]*

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EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Schlaefer, certify that:

I have reviewed this Quarterly Report on Form 10-Q of GCT Semiconductor Holding, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 14, 2024


	/s/ John Schlaefer
	John Schlaefer
	Chief Executive Officer
	(Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Edmond Cheng, certify that:

I have reviewed this Quarterly Report on Form 10-Q of GCT Semiconductor Holding, Inc.;

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 14, 2024


	/s/ Edmond Cheng
	Edmond Cheng
	Chief Financial Officer
	(Principal Financial Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, John Schlaefer, Chief Executive Officer of GCT Semiconductor Holding, Inc. (the “Company”), certify that:

the Quarterly Report on Form 10-Q of the Company for the three months ended March 31, 2024 as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 14, 2024


	/s/ John Schlaefer
	John Schlaefer
	Chief Executive Officer
	(Principal Executive Officer)

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Edmond Cheng, Chief Financial Officer of GCT Semiconductor Holding, Inc. (the “Company”), certify that:

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 14, 2024


	/s/ Edmond Cheng
	Edmond Cheng
	Chief Financial Officer
	(Principal Financial Officer)

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2024	May 10, 2024
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-41013
Entity Registrant Name	GCT Semiconductor Holding, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-2171699
Entity Address, Address Line One	2290 North 1st Street, Suite 201
Entity Address, City or Town	San Jose
Entity Address State Or Province	CA
Entity Address, Postal Zip Code	95131
City Area Code	408
Local Phone Number	434-6040
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		45,890,164
Entity Central Index Key	0001851961
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false
Class A common stock
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	GCTS
Security Exchange Name	NYSE
Warrants, each whole warrant exercisable for one share
Title of 12(b) Security	Warrants, each whole warrant exercisable for one share of Common Stock for $11.50 per share
Trading Symbol	GCTSW
Security Exchange Name	NYSE

Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands

Mar. 31, 2024

Dec. 31, 2023

Current assets:

Cash and cash equivalents

$ 16,122

$ 258

Accounts receivable, net

5,103

4,920

Inventory

1,784

1,486

Contract assets

4,313

3,439

Prepaid expenses and other current assets

5,466

2,906

Total current assets

32,788

13,009

Property and equipment, net

644

772

Operating lease right-of-use assets

1,343

1,521

Intangibles, net

187

245

Other assets

857

881

Total assets

35,819

16,428

Current liabilities:

Accounts payable

1,242

17,814

Contract liabilities

Accrued and other current liabilities

25,152

23,956

Borrowings

39,840

44,509

Convertible promissory notes, current

5,645

27,794

Operating lease liabilities, current

679

680

Total current liabilities

72,593

114,801

Convertible promissory notes, net of current

4,672

6,239

Net defined benefit liabilities

7,488

7,689

Long-term operating lease liabilities

674

850

Income taxes payable

2,096

2,178

Warrant liabilities

10,584

Other liabilities

108

Total liabilities

98,179

131,865

Commitments and contingencies (Note 8)

Stockholders' deficit:

Preferred stock, par value $0.0001 per share; 40,000 and 82,352 shares authorized as of March 31, 2024 and December 31, 2023, respectively; no shares issued and outstanding as of March 31, 2024 and December 31, 2023

Common stock, par value $0.0001 per share; 400,000 and 200,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; 45,833 and 24,166 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively(1)

^[1]

Additional paid-in capital(1)

^[1]

487,006

435,752

Accumulated other comprehensive loss

(474)

(1,538)

Accumulated deficit

(548,897)

(549,654)

Total stockholders' deficit

(62,360)

(115,437)

^[1]

Total liabilities and stockholders' deficit

$ 35,819

$ 16,428

[1]	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined in the Notes to the Unaudited Condensed Consolidated Financial Statements.)

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Condensed Consolidated Balance Sheets
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	40,000,000	82,352,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 0.0001	$ 0.0001
Common stock, shares authorized	400,000,000	200,000,000
Common stock, shares issued	45,833,000	24,166,000
Common stock, shares outstanding	45,833,000	24,166,000

Condensed Consolidated Statements of Operations - USD ($)
shares in Thousands

3 Months Ended

Mar. 31, 2024

Mar. 31, 2023

Net revenues:

Total net revenues

$ 3,265,000

$ 3,062,000

Cost of net revenues:

Total cost of net revenues

1,312,000

1,541,000

Gross profit

1,953,000

1,521,000

Operating expenses:

Research and development

5,521,000

902,000

Sales and marketing

996,000

836,000

General and administrative

2,836,000

1,477,000

Gain on extinguishment of liability

(14,636,000)

Total operating (income) expenses

(5,283,000)

3,215,000

Income (loss) from operations

7,236,000

(1,694,000)

Interest expense

(2,082,000)

(935,000)

Other (expenses) income, net

(4,338,000)

1,286,000

Income (loss) before provision for income taxes

816,000

(1,343,000)

Provision for income taxes

59,000

50,000

Net income (loss)

757,000

(1,393,000)

Net loss attributable to common stockholders

757,000

(1,393,000)

Net income (loss), diluted

$ 757,000

$ (1,393,000)

Net income (loss) per common share - basic

^[1]

$ 0.03

$ (0.06)

Net income (loss) per common share - diluted

^[1]

$ 0.03

$ (0.06)

Weighted-average common shares outstanding, basic

^[1]

25,468

23,862

Weighted-average shares used in computing net income (loss) per common shares - diluted

^[1]

26,257

23,862

Product

Net revenues:

Total net revenues

$ 2,378,000

$ 599,000

Cost of net revenues:

Total cost of net revenues

654,000

978,000

Service

Net revenues:

Total net revenues

887,000

2,463,000

Cost of net revenues:

Total cost of net revenues

$ 658,000

$ 563,000

[1]	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined in the Notes to the Unaudited Condensed Consolidated Financial Statements.)

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Comprehensive income (loss), net of taxes:
Net income (loss)	$ 757	$ (1,393)
Foreign currency translation adjustment	1,064	674
Comprehensive income (loss)	$ 1,821	$ (719)

Condensed Consolidated Statements of Stockholders' Deficit - USD ($)
shares in Thousands, $ in Thousands

Common Stock

Previously reported

Common Stock

Revision of prior period, adjustment

Common Stock

Additional Paid-in Capital

Previously reported

Additional Paid-in Capital

Revision of prior period, adjustment

Additional Paid-in Capital

Accumulated Other Comprehensive Income (Loss)

Previously reported

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Previously reported

Accumulated Deficit

Previously reported

Total

Balance as at beginning at Dec. 31, 2022

$ 128

$ (126)

$ 2

^[1]

$ 433,990

$ 126

$ 434,116

^[1]

$ (1,862)

^[1]

$ (527,185)

^[1]

$ (94,929)

^[1]

Balance as at beginning (in shares) at Dec. 31, 2022

127,761

(103,900)

23,861

^[1]

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options

^[1]

Issuance of common stock upon exercise of stock options (in shares)

^[1]

Stock-based compensation

^[1]

Foreign currency translation adjustment

674

Net income (loss)

(1,393)

Balance as at end at Mar. 31, 2023

^[1]

$ 2

434,119

(1,188)

(528,578)

(95,645)

Balance as at end (in shares) at Mar. 31, 2023

^[1]

23,866

Balance as at beginning at Dec. 31, 2023

$ 129

$ (126)

$ 3

^[1]

$ 435,626

$ 126

435,752

^[1]

$ (1,538)

(1,538)

^[1]

$ (549,654)

(549,654)

^[1]

$ (115,437)

^[1]

Balance as at beginning (in shares) at Dec. 31, 2023

129,396

(105,230)

24,166

^[1]

24,166

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Reverse recapitalization transaction, net of transaction costs and acquired liabilities

$ 2

50,031

$ 50,033

Reverse recapitalization transaction, net of transaction costs and acquired liabilities (in shares)

21,667

Stock-based compensation

1,223

Foreign currency translation adjustment

1,064

Net income (loss)

757

Balance as at end at Mar. 31, 2024

$ 5

$ 487,006

$ (474)

$ (548,897)

$ (62,360)

Balance as at end (in shares) at Mar. 31, 2024

45,833

[1]	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined in the Notes to the Unaudited Condensed Consolidated Financial Statements.)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Operating activities:
Net income (loss)	$ 757	$ (1,393)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	206	225
Operating lease right-of-use amortization	176	168
Finance lease right-of-use amortization		4
Stock-based compensation	1,223	2
Provision for credit losses	247
Gain on extinguishment of liability	(14,636)
Change in valuation of convertible promissory notes	1,203	(549)
Change in valuation of warrant liabilities	4,626
Changes in operating assets and liabilities:
Accounts receivable	(501)	2,144
Inventory	(298)	(651)
Contract assets	(874)	(1,769)
Prepaid expenses and other current assets	(2,292)	102
Other assets	24	35
Accounts payable	(2,713)	133
Contract liabilities	(13)	(650)
Accrued and other current liabilities	(1,067)	1,048
Net defined benefit liabilities	109	186
Income tax payable	(83)
Lease liabilities	(177)	(170)
Other liabilities	(330)	(345)
Net cash used in operating activities	(14,413)	(1,480)
Investing activities:
Purchases of property and equipment		(118)
Net cash used in investing activities		(118)
Financing activities:
Proceeds from exercise of stock options		1
Proceeds from bank borrowings		582
Proceeds from issuance of convertible promissory notes	16,290
Proceeds from reverse recapitalization and PIPE Financing, net of transaction costs	17,238
Repayment of bank borrowings	(3,254)	(31)
Net cash provided by financing activities	30,274	552
Effect of exchange rate changes on cash and cash equivalents	3	(52)
Net increase (decrease) in cash and cash equivalents	15,864	(1,098)
Cash and cash equivalents at beginning of year	258	1,398
Cash and cash equivalents cash at end of year	16,122	300
Supplemental disclosure of cash flow information:
Cash paid for interest	1,183	368
Cash paid for income taxes	3	3
Cash paid for amounts included in the measurement of operating leases	192	$ 195
Issuance of common stock from conversion of convertible promissory notes and accrued interest	$ 41,209

Organization and Liquidity

3 Months Ended

Mar. 31, 2024

Organization and Liquidity

Organization and Liquidity

1.Organization and Liquidity

Description of Business

Liquidity

Summary of Significant Accounting Policies and Basis of Presentation

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies and Basis of Presentation

Summary of Significant Accounting Policies and Basis of Presentation

2.Summary of Significant Accounting Policies and Basis of Presentation

Principles of Consolidation and Basis of Presentation

Use of Estimates

Fair Value of Financial Instruments

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2

Level 3

Unobservable inputs that are supported by little or no market activity for the related assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Risk and Uncertainties

Provision for Credit Losses

Concentration of Credit Risk

Foreign Currency

Convertible Promissory Notes

Contracts in Equity

Emerging Growth Company Status

Recent Accounting Pronouncements Adopted

Recent Accounting Pronouncements Not Yet Adopted

Reverse Recapitalization

3 Months Ended

Mar. 31, 2024

Reverse Recapitalization

Reverse Recapitalization

3.Reverse Recapitalization

●

The number of shares of common stock issued and outstanding immediately following consummation of the Business Combination was (in thousands):


		Shares
Common stock of Concord III outstanding prior to the Business Combination		3,941
Less: redemption of Concord III’s common stock		(3,766)
Sponsor earnout common stock outstanding prior to the Business Combination		8,625
Common stock of Concord III issued and outstanding		8,800
Common stock issued in PIPE Financing		4,530
Legacy GCT common stock		32,503
Total common stock issued and outstanding		45,833

Legacy GCT was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

●

Legacy GCT stockholders comprise a relative majority of the voting power of GCT;

●

Legacy GCT stockholders have the ability to nominate a majority of the members of the board of directors of GCT;

●

Legacy GCT’s operations prior to the Business Combination will comprise the only ongoing operations of GCT;

●

Legacy GCT’s senior management comprises the senior management of GCT;

●

GCT substantially assuming the Legacy GCT name;

●

Legacy GCT’s headquarters will become GCT’s headquarters; and

●

Concord III did not meet the definition of a business.

PIPE Financing

Private Placement Warrants and Public Warrants

Legacy GCT Earnout Shares

Sponsor Earnout Shares

Disaggregation of Revenue

3 Months Ended

Mar. 31, 2024

Disaggregation of Revenue

Disaggregation of Revenue

4.Disaggregation of Revenue

Disaggregation of revenues from contracts with customers is as follows (in thousands):


	Three Months Ended March 31, 2024
	Product Revenues		Service Revenues		Total
Timing of revenue recognition
At a point in time	$	2,378	$	—	$	2,378
Over time		—		887		887
Total	$	2,378	$	887	$	3,265


	Three Months Ended March 31, 2023
	Product Revenues		Service Revenues		Total
Timing of revenue recognition
At a point in time	$	599	$	—	$	599
Over time		—		2,463		2,463
Total	$	599	$	2,463	$	3,062

Net revenues categorized by customer location are as follows (in thousands):



	Three Months Ended March 31,
		2024		2023
Korea	$	2,000	$	—
Germany		796		—
United States		389		1,968
China		80		1,094
Total	$	3,265	$	3,062

Contract Assets and Liabilities

Details of contract assets and liabilities is as follows (in thousands):

(*)	The balances are included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets.

Net revenues recognized in relation to contract liabilities are as follows as of the periods indicated (in thousands):


	March 31, 2024		March 31, 2023
Net revenues recognized that were included in the contract liabilities balance at the beginning of the period	$	12	$	650

Fair Value of Measurements

3 Months Ended

Mar. 31, 2024

Fair Value of Measurements

Fair Value of Measurements

5.Fair Value of Measurements

Fair value hierarchy classifications of the financial instruments that are measured at fair value on a recurring basis are as follows (in thousands):


	March 31, 2024
	Level 1		Level 2		Level 3		Total

Convertible promissory notes	$	—	$	—	$	10,317	$	10,317
Warrant liabilities		—		—		10,584		10,584



	December 31, 2023
	Level 1		Level 2		Level 3		Total

Convertible promissory notes	$	—	$	—	$	34,033	$	34,033

Valuation techniques and the inputs

The table below presents valuation techniques and inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy (in thousands):


	Valuation techniques	Inputs	March 31, 2024		December 31, 2023
Convertible promissory notes, current	Discounted Cash Flow Model (“DCF”)	Discount rate, risk-free rate, credit spread, contractual cash flows	$	5,645
	PWERM (“Probability-Weighted Expected Return Method”)	Scenario of initial public offering (“IPO”) and merger & acquisition (“M&A”)			$	27,794
Convertible promissory notes, net of current	Binomial Lattice Model (“BLM”)	Stock price, volatility, remaining term, risk-free rate, credit spread		4,672
	PWERM	Scenario of initial public offering (“IPO”) and merger & acquisition (“M&A”)				6,239
Warrant liabilities – private and public warrants	Black Scholes Merton Model (“BSM”) or BLM	Exercise price, term to expiration, volatility, risk-free rate		9,150		—
Warrant liabilities - other				1,434		—

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities (in thousands):


	Three Months Ended March 31,
	2024		2023
Convertible promissory notes fair value - beginning of period	$	34,033	$	31,166
Change in fair value of convertible promissory notes		1,203		(549)
Conversion of convertible promissory notes		(41,209)		—
Borrowing of convertible promissory notes		16,290		—
Convertible promissory notes fair value - end of period	$	10,317	$	30,617


	Three Months Ended March 31,
	2024		2023
Warrant Liabilities Fair value - beginning of period	$	—	$	—
Private and public warrants assumed at Closing		5,958		—
Change in fair value of warrant liabilities		4,626		—
Warrant Liabilities Fair value - end of period	$	10,584	$	—

The gains and losses from fair value re-measurement of Level 3 financial liabilities are recorded as other income, net in the condensed consolidated statements of operations.

Balance Sheet Components

3 Months Ended

Mar. 31, 2024

Balance Sheet Components

Balance Sheet Components

6.Balance Sheet Components

Inventory

Inventories consists of the following (in thousands):


	March 31,		December 31,
	2024		2023
Raw materials	$	414	$	448
Work-in-process		498		601
Finished goods		872		437
Total inventory	$	1,784	$	1,486

There were no write-downs of inventory into cost of net revenues for the three months ended March 31, 2024 and 2023.

Prepaid expenses and other assets

Prepaid expenses and other assets consist of the following (in thousands):


	March 31,		December 31,
	2024		2023
Prepaid expenses	$	3,345	$	433
Prepaid inventory		1,429		279
Lease deposit		413		434
Other receivables and current assets		279		117
IPO expenses		—		1,643
Prepaid expenses and other current assets	$	5,466	$	2,906

Accrued and other current liabilities

Accrued and other current liabilities consist of the following (in thousands):


	March 31,		December 31,
	2024		2023
Payroll and related expenses	$	9,830	$	9,880
Accrued payables		7,853		6,319
Other taxes payable		3,399		158
Current portion of interest payable		3,395		6,915
Professional fees		444		499
Royalty and license fee		60		58
Product warranty		64		55
Other		107		72
Accrued and other current liabilities	$	25,152	$	23,956

Debt

3 Months Ended

Mar. 31, 2024

Debt

Debt

7.Debt

The Company’s outstanding debt was as follows (in thousands):


	March 31,				December 31,
	2024				2023
	Principal		Fair Value		Principal		Fair Value
Convertible promissory notes:
Historical convertible promissory notes	$	5,630	$	5,645	$	35,347	$	34,033
2023 & 2024 convertible promissory notes		5,000		4,672		—		—
Borrowings:
KEB Hana Bank		6,682		6,682		6,980		6,980
IBK Industrial Bank		6,831		6,831		7,135		7,135
Note payable (one individual investor)		1,000		1,000		1,000		1,000
M-Venture Investment, Inc.		7,425		7,425		7,756		7,756
Anapass, Inc, related party		9,653		9,653		10,082		10,082
i Best Investment Co., Ltd		7,425		7,425		10,082		10,082
Kyeongho Lee, related party		824		824		1,474		1,474
Total debt	$	50,470		50,157	$	79,856		78,542
Less: current portion				(45,485)				(72,303)
Debt, net of current portion			$	4,672			$	6,239

Expected future minimum principal payments under the Company’s total debt is as follows as of March 31, 2024 (in thousands):


	Convertible
	Notes
Years	Payable		Borrowing		Total
2024, remainder	$	5,630	$	39,840	$	45,470
2025		—		—		—
2026		5,000		—		5,000
Total debt	$	10,630	$	39,840	$	50,470

Convertible Promissory Notes

Historical Convertible Promissory Notes

2023 & 2024 Convertible Promissory Notes

Borrowings Pursuant to Term Loan and Security Agreements

KEB Hana Bank

Bank to secure the Company’s obligations under this loan (see Note 8). As of March 31, 2024, the remaining principal and interest amount of $6.7 million was outstanding.

IBK Industrial Bank

Note Payable (One Individual Investor)

M-Venture Investment, Inc.

In April 2024, the Company executed amendments with M-Venture Investment, Inc. (see Note 17).

Anapass, Inc., Related Party

i Best Investment Co., Ltd

Kyeongho Lee, Related Party

Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies.

Commitments and Contingencies

8.Commitments and Contingencies

Litigation

Purchase Commitment

Assets Pledged as Collateral

The following table includes a summary of the collateral provided to Anapass, Inc. (in thousands):


	March 31,		December 31,		Secured
	2024		2023		Creditor
Cash and cash equivalents	$	16,122	$	254
Accounts receivable		5,118		4,920
Inventory		1,784		1,486	Anapass, Inc.
Property and equipment		1,988		352
Intangible assets and others		187		199

Common Stock

3 Months Ended

Mar. 31, 2024

Common Stock

Common Stock

9.Common Stock

The Company has reserved shares of common stock for issuance as follows (in thousands):


	March 31	December 31
	2024	2023
Warrants	26,724	2,894
Shares available for future grant from 2024 plan	3,983	—
Convertible promissory notes	800	1,835
Options issued and outstanding	668	668
Shares available for future grant from 2024 ESPP	600	—
RSUs outstanding	392	392
Shares available for future grant from 2011 plan	—	113
Total	33,167	5,902

Warrants

3 Months Ended

Mar. 31, 2024

Warrants

Warrants

10.Warrants

The following table represents a summary of warrants to purchase shares of the Company’s common stock that are outstanding (in thousands, except for exercise price):


Issue Date	March 31, 2024	Exercise Price	Expiration
August 2021	299	$ 10.00 - $18.75	(1)
September 2021	300	$ 5.00	(1)
February 2023 - June 2023	2,115	$ 10.00 - $18.75	(1)
July 2023	80	$ 10.00	(1)
October 2023	100	$ 10.00	(1)
Private and public warrants	23,830	$ 11.50	March 26, 2029
Total	26,724

(1)	Within 3 years from the date of issuance.

Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Stock-Based Compensation

11.Stock-Based Compensation

2011 Incentive Compensation Plan

Each award of Legacy GCT stock options and RSUs were converted into equivalent Company stock options and RSUs with the same terms and conditions under the plan described below.

2024 Incentive Compensation Plan

Stock options outstanding under the 2024 Plan were as follows (in thousands, except per share amounts and years):


				Weighted
				Average
	Number of	Weighted-		Remaining
	Options	Average		Contractual Life	Aggregated
	Outstanding	Exercise Price		(in Years)	Intrinsic Value
Balance as of December 31, 2023	3,579	$	0.02	5.5	$	4,405
Reverse recapitalization	(2,911)		0.09	—		—
Balance as of December 31, 2023⁽¹⁾	668	$	0.11	5.5		4,405
Granted	—		—	—		—
Exercised	—		—	—		—
Cancelled	—		—	—		—
Balance as of March 31, 2024	668		0.11	5.3		5,543
Vested as of March 31, 2024	667	$	0.11	5.3		5,532
Exercisable as of March 31, 2024	634	$	0.11	5.1		5,256

(1)	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (see Note 3).

There were no options granted during the three months ended March 31, 2024 and 2023. As of March 31, 2024, unrecognized compensation cost related to stock options was nominal.

Founder Awards to Board of Directors

Restricted Stock Units

RSUs outstanding under the 2024 Plan were as follows (in thousands, except per share amounts):


		Weighted
	Number of RSUs	Average Grant
	Outstanding	Date Fair Value
Balance as of December 31, 2023	2,100	$	1.15
Reverse recapitalization	(1,708)		5.01
Balances as of December 31, 2023⁽¹⁾	392	$	6.16
Granted	—		—
Vested	—		—
Cancelled	—		—
Balance as of March 31, 2024	392	$	6.16

(1)	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (see Note 3).

Income Taxes

3 Months Ended

Mar. 31, 2024

Income Taxes

Income Taxes

12.Income Taxes

Currently the Company is not under examination by any taxing authority.

Employee Benefit Plans

3 Months Ended

Mar. 31, 2024

Employee Benefit Plans

Employee Benefit Plans

13.Employee Benefit Plans

The net liability for severance payments as of (in thousands):


	March 31, 2024		December 31, 2023
Liability for severance payments, beginning	$	7,764	$	7,997
Deposit		(276)		(308)
Liability for severance payments, ending	$	7,488	$	7,689

Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions

Related Party Transactions

14.Related Party Transactions

A summary of balances and transactions with the related parties who are stockholders of the Company were as follows as of (in thousands):


	March 31, 2024				December 31, 2023
	Anapass		Kyeongho Lee		Anapass		Kyeongho Lee
Borrowings	$	9,653	$	824	$	10,082	$	1,474
Other current liabilities		106		87		212		182

Segments and Information

3 Months Ended

Mar. 31, 2024

Segments and Information

Segments and Information

15.Segments and Information


	March 31, 2024		December 31, 2023
South Korea	$	1,170	$	1,363
United States		817		930
Total long-lived assets	$	1,987	$	2,293

Net Income (Loss) Per Share

3 Months Ended

Mar. 31, 2024

Net Income (Loss) Per Share

Net Income (Loss) Per Share

16.Net Income (Loss) Per Share

The following table summarizes the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts):


	Three Months Ended March 31,
	2024		2023
Numerator:
Net income (loss), basic and diluted	$	757	$	(1,393)
Denominator:
Weighted-average common shares outstanding, basic		25,468		23,862
Add: effect of dilutive securities		789		—
Weighted-average common shares outstanding, diluted		26,257		23,862
Net income (loss) per share, basic and diluted
Basic	$	0.03	$	(0.06)
Diluted	$	0.03	$	(0.06)


	March 31,
	2024	2023
Warrants	26,724	995
Convertible promissory notes	5,543	1,809
Options	—	885
Total	32,267	3,689

Subsequent Events

3 Months Ended

Mar. 31, 2024

Subsequent Events

Subsequent Events

17.Subsequent Events

Purchase Agreement and Registration Rights Agreement

M-Venture Investment, Inc.

Historical Convertible Promissory Notes

In April 2024, the Company repaid in full a historical convertible promissory note that was issued in 2021 with a principal amount of $0.6 million (see Note 7).

Share Reserve

Summary of Significant Accounting Policies and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies and Basis of Presentation

Principles of Consolidation and Basis of Presentation

Use of Estimates

Fair Value of Financial Instruments

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2

Level 3

Unobservable inputs that are supported by little or no market activity for the related assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Risk and Uncertainties

Provision for Credit Losses

Concentration of Credit Risk

Foreign Currency

Convertible Promissory Notes

Contracts in Equity

Emerging Growth Company Status

Recent Accounting Pronouncements Adopted

Recent Accounting Pronouncements Not Yet Adopted

Reverse Recapitalization (Tables)

3 Months Ended

Mar. 31, 2024

Reverse Recapitalization

Number of shares of common stock issued and outstanding immediately following consummation of the Business Combination

The number of shares of common stock issued and outstanding immediately following consummation of the Business Combination was (in thousands):


		Shares
Common stock of Concord III outstanding prior to the Business Combination		3,941
Less: redemption of Concord III’s common stock		(3,766)
Sponsor earnout common stock outstanding prior to the Business Combination		8,625
Common stock of Concord III issued and outstanding		8,800
Common stock issued in PIPE Financing		4,530
Legacy GCT common stock		32,503
Total common stock issued and outstanding		45,833

Disaggregation of Revenue (Tables)

3 Months Ended

Mar. 31, 2024

Organization and Liquidity

Schedule of disaggregation of revenues from contracts with customers and categorized by customer location

Disaggregation of revenues from contracts with customers is as follows (in thousands):


	Three Months Ended March 31, 2024
	Product Revenues		Service Revenues		Total
Timing of revenue recognition
At a point in time	$	2,378	$	—	$	2,378
Over time		—		887		887
Total	$	2,378	$	887	$	3,265


	Three Months Ended March 31, 2023
	Product Revenues		Service Revenues		Total
Timing of revenue recognition
At a point in time	$	599	$	—	$	599
Over time		—		2,463		2,463
Total	$	599	$	2,463	$	3,062

Net revenues categorized by customer location are as follows (in thousands):



	Three Months Ended March 31,
		2024		2023
Korea	$	2,000	$	—
Germany		796		—
United States		389		1,968
China		80		1,094
Total	$	3,265	$	3,062

Schedule of contract assets and liabilities and net revenues recognized in relation to contract liabilities

Details of contract assets and liabilities is as follows (in thousands):

(*)	The balances are included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets.

Schedule of net revenues and gross accounts receivable concentration

Net revenues recognized in relation to contract liabilities are as follows as of the periods indicated (in thousands):


	March 31, 2024		March 31, 2023
Net revenues recognized that were included in the contract liabilities balance at the beginning of the period	$	12	$	650

Fair Value of Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value of Measurements

Schedule of classifications of the financial instruments that are measured at fair value on a recurring basis

Fair value hierarchy classifications of the financial instruments that are measured at fair value on a recurring basis are as follows (in thousands):


	March 31, 2024
	Level 1		Level 2		Level 3		Total

Convertible promissory notes	$	—	$	—	$	10,317	$	10,317
Warrant liabilities		—		—		10,584		10,584



	December 31, 2023
	Level 1		Level 2		Level 3		Total

Convertible promissory notes	$	—	$	—	$	34,033	$	34,033

Schedule of valuation techniques and inputs used in the fair value measurement

The table below presents valuation techniques and inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy (in thousands):


	Valuation techniques	Inputs	March 31, 2024		December 31, 2023
Convertible promissory notes, current	Discounted Cash Flow Model (“DCF”)	Discount rate, risk-free rate, credit spread, contractual cash flows	$	5,645
	PWERM (“Probability-Weighted Expected Return Method”)	Scenario of initial public offering (“IPO”) and merger & acquisition (“M&A”)			$	27,794
Convertible promissory notes, net of current	Binomial Lattice Model (“BLM”)	Stock price, volatility, remaining term, risk-free rate, credit spread		4,672
	PWERM	Scenario of initial public offering (“IPO”) and merger & acquisition (“M&A”)				6,239
Warrant liabilities – private and public warrants	Black Scholes Merton Model (“BSM”) or BLM	Exercise price, term to expiration, volatility, risk-free rate		9,150		—
Warrant liabilities - other				1,434		—

Schedule of changes in the fair value of the Company's Level 3 financial liabilities

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities (in thousands):


	Three Months Ended March 31,
	2024		2023
Convertible promissory notes fair value - beginning of period	$	34,033	$	31,166
Change in fair value of convertible promissory notes		1,203		(549)
Conversion of convertible promissory notes		(41,209)		—
Borrowing of convertible promissory notes		16,290		—
Convertible promissory notes fair value - end of period	$	10,317	$	30,617


	Three Months Ended March 31,
	2024		2023
Warrant Liabilities Fair value - beginning of period	$	—	$	—
Private and public warrants assumed at Closing		5,958		—
Change in fair value of warrant liabilities		4,626		—
Warrant Liabilities Fair value - end of period	$	10,584	$	—

Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2024

Balance Sheet Components

Schedule of Inventory


	March 31,		December 31,
	2024		2023
Raw materials	$	414	$	448
Work-in-process		498		601
Finished goods		872		437
Total inventory	$	1,784	$	1,486

Schedule of Prepaid expenses and other assets


	March 31,		December 31,
	2024		2023
Prepaid expenses	$	3,345	$	433
Prepaid inventory		1,429		279
Lease deposit		413		434
Other receivables and current assets		279		117
IPO expenses		—		1,643
Prepaid expenses and other current assets	$	5,466	$	2,906

Schedule of Accrued and other current liabilities


	March 31,		December 31,
	2024		2023
Payroll and related expenses	$	9,830	$	9,880
Accrued payables		7,853		6,319
Other taxes payable		3,399		158
Current portion of interest payable		3,395		6,915
Professional fees		444		499
Royalty and license fee		60		58
Product warranty		64		55
Other		107		72
Accrued and other current liabilities	$	25,152	$	23,956

Debt (Tables)

3 Months Ended

Mar. 31, 2024

Debt

Schedule of borrowings

The Company’s outstanding debt was as follows (in thousands):


	March 31,				December 31,
	2024				2023
	Principal		Fair Value		Principal		Fair Value
Convertible promissory notes:
Historical convertible promissory notes	$	5,630	$	5,645	$	35,347	$	34,033
2023 & 2024 convertible promissory notes		5,000		4,672		—		—
Borrowings:
KEB Hana Bank		6,682		6,682		6,980		6,980
IBK Industrial Bank		6,831		6,831		7,135		7,135
Note payable (one individual investor)		1,000		1,000		1,000		1,000
M-Venture Investment, Inc.		7,425		7,425		7,756		7,756
Anapass, Inc, related party		9,653		9,653		10,082		10,082
i Best Investment Co., Ltd		7,425		7,425		10,082		10,082
Kyeongho Lee, related party		824		824		1,474		1,474
Total debt	$	50,470		50,157	$	79,856		78,542
Less: current portion				(45,485)				(72,303)
Debt, net of current portion			$	4,672			$	6,239

Schedule of maturities of borrowings

Expected future minimum principal payments under the Company’s total debt is as follows as of March 31, 2024 (in thousands):


	Convertible
	Notes
Years	Payable		Borrowing		Total
2024, remainder	$	5,630	$	39,840	$	45,470
2025		—		—		—
2026		5,000		—		5,000
Total debt	$	10,630	$	39,840	$	50,470

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies.

Schedule of collateral provided to Anapass, Inc

The following table includes a summary of the collateral provided to Anapass, Inc. (in thousands):


	March 31,		December 31,		Secured
	2024		2023		Creditor
Cash and cash equivalents	$	16,122	$	254
Accounts receivable		5,118		4,920
Inventory		1,784		1,486	Anapass, Inc.
Property and equipment		1,988		352
Intangible assets and others		187		199

Common Stock (Tables)

3 Months Ended

Mar. 31, 2024

Common Stock

Summary of shares reserved for shares authorized but unissued common stock

The Company has reserved shares of common stock for issuance as follows (in thousands):


	March 31	December 31
	2024	2023
Warrants	26,724	2,894
Shares available for future grant from 2024 plan	3,983	—
Convertible promissory notes	800	1,835
Options issued and outstanding	668	668
Shares available for future grant from 2024 ESPP	600	—
RSUs outstanding	392	392
Shares available for future grant from 2011 plan	—	113
Total	33,167	5,902

Warrants (Tables)

3 Months Ended

Mar. 31, 2024

Warrants

Summary of warrants

The following table represents a summary of warrants to purchase shares of the Company’s common stock that are outstanding (in thousands, except for exercise price):


Issue Date	March 31, 2024	Exercise Price	Expiration
August 2021	299	$ 10.00 - $18.75	(1)
September 2021	300	$ 5.00	(1)
February 2023 - June 2023	2,115	$ 10.00 - $18.75	(1)
July 2023	80	$ 10.00	(1)
October 2023	100	$ 10.00	(1)
Private and public warrants	23,830	$ 11.50	March 26, 2029
Total	26,724

(1)	Within 3 years from the date of issuance.

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Summary of stock option activity

Stock options outstanding under the 2024 Plan were as follows (in thousands, except per share amounts and years):


				Weighted
				Average
	Number of	Weighted-		Remaining
	Options	Average		Contractual Life	Aggregated
	Outstanding	Exercise Price		(in Years)	Intrinsic Value
Balance as of December 31, 2023	3,579	$	0.02	5.5	$	4,405
Reverse recapitalization	(2,911)		0.09	—		—
Balance as of December 31, 2023⁽¹⁾	668	$	0.11	5.5		4,405
Granted	—		—	—		—
Exercised	—		—	—		—
Cancelled	—		—	—		—
Balance as of March 31, 2024	668		0.11	5.3		5,543
Vested as of March 31, 2024	667	$	0.11	5.3		5,532
Exercisable as of March 31, 2024	634	$	0.11	5.1		5,256

(1)	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (see Note 3).

Summary of RSUs activity

RSUs outstanding under the 2024 Plan were as follows (in thousands, except per share amounts):


		Weighted
	Number of RSUs	Average Grant
	Outstanding	Date Fair Value
Balance as of December 31, 2023	2,100	$	1.15
Reverse recapitalization	(1,708)		5.01
Balances as of December 31, 2023⁽¹⁾	392	$	6.16
Granted	—		—
Vested	—		—
Cancelled	—		—
Balance as of March 31, 2024	392	$	6.16

(1)	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (see Note 3).

Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2024

Employee Benefit Plans

Summary of net liability for severance payments

The net liability for severance payments as of (in thousands):


	March 31, 2024		December 31, 2023
Liability for severance payments, beginning	$	7,764	$	7,997
Deposit		(276)		(308)
Liability for severance payments, ending	$	7,488	$	7,689

Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2024

Related Party Transactions

Summary of balances and transactions with the related parties

A summary of balances and transactions with the related parties who are stockholders of the Company were as follows as of (in thousands):


	March 31, 2024				December 31, 2023
	Anapass		Kyeongho Lee		Anapass		Kyeongho Lee
Borrowings	$	9,653	$	824	$	10,082	$	1,474
Other current liabilities		106		87		212		182

Segments and Information (Tables)

3 Months Ended

Mar. 31, 2024

Segments and Information

Summary of long-lived assets by geographic region


	March 31, 2024		December 31, 2023
South Korea	$	1,170	$	1,363
United States		817		930
Total long-lived assets	$	1,987	$	2,293

Net Income (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2024

Net Income (Loss) Per Share

Summary of computation of basic and diluted net loss per share

The following table summarizes the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts):


	Three Months Ended March 31,
	2024		2023
Numerator:
Net income (loss), basic and diluted	$	757	$	(1,393)
Denominator:
Weighted-average common shares outstanding, basic		25,468		23,862
Add: effect of dilutive securities		789		—
Weighted-average common shares outstanding, diluted		26,257		23,862
Net income (loss) per share, basic and diluted
Basic	$	0.03	$	(0.06)
Diluted	$	0.03	$	(0.06)

Schedule of Potentially dilutive securities that were excluded from the computation of diluted net loss per common share


	March 31,
	2024	2023
Warrants	26,724	995
Convertible promissory notes	5,543	1,809
Options	—	885
Total	32,267	3,689

Organization and Liquidity (Details) $ in Thousands	3 Months Ended
Organization and Liquidity (Details) $ in Thousands	Mar. 31, 2024 USD ($)	Mar. 26, 2024	Dec. 31, 2023 USD ($)
Organization and Liquidity
Exchange ratio		0.1868
Accumulated deficit	$ (548,897)		$ (549,654)
Cash and cash equivalents	16,122		$ 258
Cash proceeds from the reverse recapitalization and PIPE Financing	$ 17,238

Summary of Significant Accounting Policies and Basis of Presentation - Provision for Credit Losses (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Organization and Liquidity
Provisions for credit losses	$ 1.9	$ 1.6

Summary of Significant Accounting Policies and Basis of Presentation - Concentration of Revenues and Accounts Receivable (Details) - customer	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Revenue \| Two customers
The Company and Summary of Significant Accounting Policies
Number of customers	2
Revenue \| Four customers
The Company and Summary of Significant Accounting Policies
Number of customers		4
Revenue \| Customer concentration \| Customer A
The Company and Summary of Significant Accounting Policies
Concentration risk percentage	61.00%	28.00%
Revenue \| Customer concentration \| Customer B
The Company and Summary of Significant Accounting Policies
Concentration risk percentage	24.00%	28.00%
Revenue \| Customer concentration \| Customer C
The Company and Summary of Significant Accounting Policies
Concentration risk percentage		25.00%
Revenue \| Customer concentration \| Customer D
The Company and Summary of Significant Accounting Policies
Concentration risk percentage		10.00%
Accounts receivable \| Four customers
The Company and Summary of Significant Accounting Policies
Number of customers	4	4
Accounts receivable \| Customer concentration \| Customer A
The Company and Summary of Significant Accounting Policies
Concentration risk percentage	28.00%	27.00%
Accounts receivable \| Customer concentration \| Customer B
The Company and Summary of Significant Accounting Policies
Concentration risk percentage	19.00%	19.00%
Accounts receivable \| Customer concentration \| Customer C
The Company and Summary of Significant Accounting Policies
Concentration risk percentage	18.00%	14.00%
Accounts receivable \| Customer concentration \| Customer D
The Company and Summary of Significant Accounting Policies
Concentration risk percentage	13.00%	10.00%

Summary of Significant Accounting Policies and Basis of Presentation - Foreign Currency (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Organization and Liquidity
Foreign currency transactions	$ 1.1	$ 0.7

Reverse Recapitalization - Business Combination (Details) $ / shares in Units, $ in Millions	Mar. 26, 2024 USD ($) $ / shares
Concord III
Reverse Recapitalization [Line Items]
Transaction costs incurred in acquisition	$ 13.1
Concord III \| PIPE financing
Reverse Recapitalization [Line Items]
Transaction costs incurred in acquisition	0.9
Legacy G C T
Reverse Recapitalization [Line Items]
Transaction costs incurred in acquisition	$ 8.9
Legacy G C T \| Concord III
Reverse Recapitalization [Line Items]
Percentage of ownership acquired	100.00%
Net proceeds received on acquisition	$ 17.1
Share price in business acquisition \| $ / shares	$ 10.00
Stock exchange ratio	0.1868
Legacy G C T \| Concord III \| Convertible debt
Reverse Recapitalization [Line Items]
Conversion price \| $ / shares	$ 6.67

Reverse Recapitalization - Number of shares of common stock issued and outstanding post Business Combination (Details) - shares shares in Thousands	Mar. 26, 2024	Mar. 31, 2024	Dec. 31, 2023
Reverse Recapitalization
Common stock, shares outstanding		45,833	24,166
Total common stock issued and outstanding	45,833	45,833	24,166
Sponsor Earnout Shares
Reverse Recapitalization
Sponsor earnout common stock outstanding prior to the Business Combination	8,625
PIPE financing
Reverse Recapitalization
Common stock issued in PIPE Financing	4,530
Concord III
Reverse Recapitalization
Common stock, shares outstanding	3,941
Less: redemption of Concord I I I's common stock	(3,766)
Common stock of Concord I I I issued and outstanding	8,800
Legacy G C T
Reverse Recapitalization
Legacy GCT common stock	32,503

Reverse Recapitalization - Reverse Recapitalization (Details)	Mar. 26, 2024 USD ($)
Concord III \| Legacy G C T
Reverse Recapitalization [Line Items]
Goodwill and intangible assets	$ 0

Reverse Recapitalization - PIPE Financing (Details) - PIPE financing $ / shares in Units, $ in Millions	Mar. 26, 2024 USD ($) $ / shares shares
Reverse Recapitalization [Line Items]
Number of shares issued \| shares	4,529,967
Issue price per share \| $ / shares	$ 6.67
Value of shares issued	$ 30.2
Net proceeds from PIPE financing	$ 17.1

Reverse Recapitalization -Private Warrants and Public warrants (Details) - shares	1 Months Ended	3 Months Ended
	Nov. 30, 2021	Mar. 31, 2024
Reverse Recapitalization [Line Items]
Number of warrants issued		26,724,000
Concord III \| Private placement warrants
Reverse Recapitalization [Line Items]
Number of warrants issued	9,400,000
Concord III \| Public warrants
Reverse Recapitalization [Line Items]
Number of warrants issued	17,250,000
Legacy G C T \| Private placement and public warrants \| Sponsor
Reverse Recapitalization [Line Items]
Number of warrants vested and retained	4,492,650
Number of warrants reallocated to others	2,087,350
Number of warrants forfeited	2,820,000

Reverse Recapitalization - Legacy GCT and Sponsor Earn out Shares (Details) - Legacy G C T $ / shares in Units, $ in Millions	Mar. 26, 2024 USD ($) $ / shares shares
Earnout shares
Reverse Recapitalization [Line Items]
Number of shares issued	20,000,000
Threshold trading days calculated for issuing shares	60 days
Fair value of shares issued \| $	$ 108.8
Impact on stockholder's equity \| $	$ 0.0
Earnout shares \| VWAP of the Company's common stock equals or exceeds $12.50 per share
Reverse Recapitalization [Line Items]
Number of shares issued	6,666,667
Threshold trading days calculated for issuing shares	20 days
Consecutive threshold trading days calculated for issuing shares	30 days
Threshold VWAP of stock to trigger earn out shares \| $ / shares	$ 12.50
Earnout shares \| VWAP of the Company's common stock equals or exceeds $15.00 per share
Reverse Recapitalization [Line Items]
Number of shares issued	6,666,666
Threshold trading days calculated for issuing shares	20 days
Consecutive threshold trading days calculated for issuing shares	30 days
Threshold VWAP of stock to trigger earn out shares \| $ / shares	$ 15.00
Earnout shares \| VWAP of the Company's common stock equals or exceeds $17.50 per share
Reverse Recapitalization [Line Items]
Number of shares issued	6,666,667
Threshold trading days calculated for issuing shares	20 days
Consecutive threshold trading days calculated for issuing shares	30 days
Threshold VWAP of stock to trigger earn out shares \| $ / shares	$ 17.50
Sponsor Earnout Shares
Reverse Recapitalization [Line Items]
Number of shares issued	1,920,375
Threshold trading days calculated for issuing shares	6 months
Fair value of shares issued \| $	$ 10.4
Impact on stockholder's equity \| $	$ 0.0
Sponsor Earnout Shares \| Minimum
Reverse Recapitalization [Line Items]
Number of shares issued	570,796
Sponsor Earnout Shares \| VWAP of the Company's common stock equals or exceeds $12.50 per share
Reverse Recapitalization [Line Items]
Number of shares issued	640,125
Threshold trading days calculated for issuing shares	20 days
Consecutive threshold trading days calculated for issuing shares	30 days
Threshold VWAP of stock to trigger earn out shares \| $ / shares	$ 12.50
Sponsor Earnout Shares \| VWAP of the Company's common stock equals or exceeds $15.00 per share
Reverse Recapitalization [Line Items]
Number of shares issued	640,125
Threshold trading days calculated for issuing shares	20 days
Consecutive threshold trading days calculated for issuing shares	30 days
Threshold VWAP of stock to trigger earn out shares \| $ / shares	$ 15.00
Sponsor Earnout Shares \| VWAP of the Company's common stock equals or exceeds $17.50 per share
Reverse Recapitalization [Line Items]
Number of shares issued	640,125
Threshold trading days calculated for issuing shares	20 days
Consecutive threshold trading days calculated for issuing shares	30 days
Threshold VWAP of stock to trigger earn out shares \| $ / shares	$ 17.50

Disaggregation of Revenue - Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue
Revenues from contracts with customers	$ 3,265	$ 3,062
At a point in time
Disaggregation of Revenue
Revenues from contracts with customers	2,378	599
Over time
Disaggregation of Revenue
Revenues from contracts with customers	887	2,463
Product Revenues
Disaggregation of Revenue
Revenues from contracts with customers	2,378	599
Product Revenues \| At a point in time
Disaggregation of Revenue
Revenues from contracts with customers	2,378	599
Service Revenues
Disaggregation of Revenue
Revenues from contracts with customers	887	2,463
Service Revenues \| Over time
Disaggregation of Revenue
Revenues from contracts with customers	$ 887	$ 2,463

Disaggregation of Revenue - Net revenues categorized by customer location (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue
Revenues from contracts with customers	$ 3,265	$ 3,062
Korea
Disaggregation of Revenue
Revenues from contracts with customers	2,000
Germany
Disaggregation of Revenue
Revenues from contracts with customers	796
United States
Disaggregation of Revenue
Revenues from contracts with customers	389	1,968
China
Disaggregation of Revenue
Revenues from contracts with customers	$ 80	$ 1,094

Disaggregation of Revenue - Contract assets and liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue
Contract assets	$ 4,313	$ 3,439
Assets recognized for costs incurred to fulfill a contract (*)	13	12
Contract liabilities	35	48
Revenues recognized that were included in the contract liabilities	$ 12	$ 650

Fair Value of Measurements (Details) - Recurring - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Fair Value of Measurements
Convertible promissory notes	$ 10,317	$ 34,033
Warrant liabilities	10,584
Level 3
Fair Value of Measurements
Convertible promissory notes	10,317	$ 34,033
Warrant liabilities	$ 10,584

Fair Value of Measurements - Valuation techniques and the inputs (Details) $ in Thousands	Mar. 31, 2024 USD ($) $ / shares Y	Dec. 31, 2023 USD ($)
Binomial Lattice Model ("BLM") \| Exercise price \| Public warrants
Fair Value of Measurements
Warrant liabilities, measurement input \| $ / shares	11.50
Binomial Lattice Model ("BLM") \| Term to expiration \| Public warrants
Fair Value of Measurements
Warrant liabilities, measurement input \| Y	5.0
Black Scholes Merton Model ("BSM") or BLM \| Exercise price \| Private placement warrants
Fair Value of Measurements
Warrant liabilities, measurement input \| $ / shares	11.50
Black Scholes Merton Model ("BSM") or BLM \| Term to expiration \| Private placement warrants
Fair Value of Measurements
Warrant liabilities, measurement input \| Y	5
Black Scholes Merton Model ("BSM") or BLM \| Volatility \| Private placement warrants
Fair Value of Measurements
Warrant liabilities, measurement input	0.194
Black Scholes Merton Model ("BSM") or BLM \| Risk-free rate \| Private placement warrants
Fair Value of Measurements
Warrant liabilities, measurement input	0.042
Convertible promissory notes, current \| Discounted Cash Flow Model ("DCF") \| Level 3
Fair Value of Measurements
Fair value \| $	$ 5,645
Convertible promissory notes, current \| Discounted Cash Flow Model ("DCF") \| Discount factor
Fair Value of Measurements
Convertible promissory notes, measurement input	0.102
Convertible promissory notes, current \| Discounted Cash Flow Model ("DCF") \| Remaining term
Fair Value of Measurements
Convertible promissory notes, measurement input \| Y	0.25
Convertible promissory notes, current \| PWERM \| Level 3
Fair Value of Measurements
Fair value \| $		$ 27,794
Convertible promissory notes, net of current \| PWERM \| Level 3
Fair Value of Measurements
Fair value \| $		$ 6,239
Convertible promissory notes, net of current \| Binomial Lattice Model ("BLM") \| Level 3
Fair Value of Measurements
Fair value \| $	$ 4,672
Convertible promissory notes, net of current \| Binomial Lattice Model ("BLM") \| Stock price
Fair Value of Measurements
Convertible promissory notes, measurement input \| $ / shares	6.58
Convertible promissory notes, net of current \| Binomial Lattice Model ("BLM") \| Remaining term
Fair Value of Measurements
Convertible promissory notes, measurement input \| Y	1.9
Convertible promissory notes, net of current \| Binomial Lattice Model ("BLM") \| Credit spread
Fair Value of Measurements
Convertible promissory notes, measurement input	0.050
Convertible promissory notes, net of current \| Binomial Lattice Model ("BLM") \| Volatility
Fair Value of Measurements
Convertible promissory notes, measurement input	0.322
Convertible promissory notes, net of current \| Binomial Lattice Model ("BLM") \| Risk-free rate
Fair Value of Measurements
Convertible promissory notes, measurement input	0.046
Warrant liabilities - private and public warrants \| Black Scholes Merton Model ("BSM") or BLM \| Level 3
Fair Value of Measurements
Fair value \| $	$ 9,150
Warrant liabilities - other \| Level 3
Fair Value of Measurements
Fair value \| $	$ 1,434
Warrant liabilities - other \| Black Scholes Merton Model ("BSM") or BLM \| Exercise price \| Minimum
Fair Value of Measurements
Warrant liabilities, measurement input \| $ / shares	5.00
Warrant liabilities - other \| Black Scholes Merton Model ("BSM") or BLM \| Exercise price \| Weighted average
Fair Value of Measurements
Warrant liabilities, measurement input \| $ / shares	10.00
Warrant liabilities - other \| Black Scholes Merton Model ("BSM") or BLM \| Exercise price \| Maximum
Fair Value of Measurements
Warrant liabilities, measurement input \| $ / shares	18.75
Warrant liabilities - other \| Black Scholes Merton Model ("BSM") or BLM \| Term to expiration \| Minimum
Fair Value of Measurements
Warrant liabilities, measurement input \| Y	0.4
Warrant liabilities - other \| Black Scholes Merton Model ("BSM") or BLM \| Term to expiration \| Maximum
Fair Value of Measurements
Warrant liabilities, measurement input \| Y	2.6
Warrant liabilities - other \| Black Scholes Merton Model ("BSM") or BLM \| Volatility \| Minimum
Fair Value of Measurements
Warrant liabilities, measurement input	0.295
Warrant liabilities - other \| Black Scholes Merton Model ("BSM") or BLM \| Volatility \| Maximum
Fair Value of Measurements
Warrant liabilities, measurement input	0.327
Warrant liabilities - other \| Black Scholes Merton Model ("BSM") or BLM \| Risk-free rate \| Minimum
Fair Value of Measurements
Warrant liabilities, measurement input	0.044
Warrant liabilities - other \| Black Scholes Merton Model ("BSM") or BLM \| Risk-free rate \| Maximum
Fair Value of Measurements
Warrant liabilities, measurement input	0.054

Fair Value of Measurements - Changes in the fair value (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Fair Value of Measurements
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other (expenses) income, net	Other (expenses) income, net
Convertible promissory notes
Fair Value of Measurements
Fair value as of beginning of period	$ 34,033	$ 31,166
Change in fair value	1,203	(549)
Conversion	(41,209)
Borrowing	16,290
Fair value as of end of period	10,317	$ 30,617
Warrant liabilities
Fair Value of Measurements
Assumed at closing	5,958
Change in fair value	4,626
Fair value as of end of period	$ 10,584

Balance Sheet Components - Inventory (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Inventory
Raw materials	$ 414		$ 448
Work-in-process	498		601
Finished goods	872		437
Total inventory	1,784		$ 1,486
Write-downs of inventory	$ 0	$ 0

Balance Sheet Components - Prepaid expenses and other assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Balance Sheet Components
Prepaid expenses	$ 3,345	$ 433
Prepaid inventory	1,429	279
Lease deposit	413	434
Other receivables and current assets	279	117
IPO expenses		(1,643)
Prepaid expenses and other current assets	$ 5,466	$ 2,906

Balance Sheet Components - Accrued and other current liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Balance Sheet Components
Payroll and related expenses	$ 9,830	$ 9,880
Accrued payables	7,853	6,319
Other taxes payable	3,399	158
Current portion of interest payable	3,395	6,915
Professional fees	444	499
Royalty and license fee	60	58
Product warranty	64	55
Other	107	72
Accrued and other current liabilities	$ 25,152	$ 23,956

Debt - Outstanding debt (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Borrowings
Borrowings	$ 50,470	$ 79,856
Fair Value	50,157	78,542
Less: current portion	(45,485)	(72,303)
Debt, net of current portion	4,672	6,239
Historical convertible promissory notes
Borrowings
Borrowings	5,630	35,347
Fair Value	5,645	34,033
2023 & 2024 convertible promissory notes
Borrowings
Borrowings	5,000
Fair Value	4,672
Borrowings
Borrowings
Borrowings	39,840
Borrowings \| KEB Hana Bank
Borrowings
Borrowings	6,682	6,980
Fair Value	6,682	6,980
Borrowings \| IBK Industrial Bank
Borrowings
Borrowings	6,831	7,135
Fair Value	6,831	7,135
Borrowings \| Note payable (one individual investor)
Borrowings
Borrowings	1,000	1,000
Fair Value	1,000	1,000
Borrowings \| M-Venture Investment, Inc.
Borrowings
Borrowings	7,425	7,756
Fair Value	7,425	7,756
Borrowings \| Anapass, Inc, related party
Borrowings
Borrowings	9,653	10,082
Fair Value	9,653	10,082
Borrowings \| i Best Investment Co., Ltd
Borrowings
Borrowings	7,425	10,082
Fair Value	7,425	10,082
Borrowings \| Kyeongho Lee
Borrowings
Borrowings	824	1,474
Fair Value	$ 824	$ 1,474

Debt - Expected future minimum principal payments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Borrowings
2024, remainder	$ 45,470
2025	0
2026	5,000
Total	50,470	$ 79,856
Convertible Notes
Borrowings
2024, remainder	5,630
2025	0
2026	5,000
Total	10,630
Borrowings
Borrowings
2024, remainder	39,840
2025	0
Total	$ 39,840

Debt - Convertible Promissory Notes (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) item $ / shares shares	Feb. 29, 2024 USD ($)	Dec. 31, 2023 USD ($)
Borrowings
Amount outstanding	$ 50,470		$ 79,856
Historical convertible promissory notes
Borrowings
Amount of debt converted	$ 32,100
Number of shares issued on conversion of debt \| shares	4,258,223
Amount of principal and interest outstanding	$ 7,900
Number of noteholders \| item	2
Conversion price \| $ / shares	$ 3.50
Amount outstanding	$ 5,630		$ 35,347
Historical convertible promissory notes \| Minimum
Borrowings
Interest rate (as a percent)	4.00%
Historical convertible promissory notes \| Maximum
Borrowings
Interest rate (as a percent)	7.00%
2023 & 2024 convertible promissory notes
Borrowings
Amount outstanding	$ 5,000
2023 & 2024 convertible promissory notes \| CVT Investors
Borrowings
Principal amount	$ 13,300
Interest rate (as a percent)	5.00%
Amount of debt converted	$ 13,400
Number of shares issued on conversion of debt \| shares	2,004,535
Conversion price \| $ / shares	$ 6.67
Amount outstanding	$ 0
2023 & 2024 convertible promissory notes \| Strategic investor
Borrowings
Principal amount	$ 5,000	$ 5,000
Interest rate (as a percent)	5.00%
Term for conversion	6 months
Conversion price \| $ / shares	$ 10.00

Debt - Borrowings Pursuant to Term Loan and Security Agreements (Details) ₩ in Millions	1 Months Ended		3 Months Ended			12 Months Ended
	Dec. 31, 2023 USD ($)	Jul. 31, 2016 USD ($)	Mar. 31, 2024 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 KRW (₩)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 KRW (₩)	Dec. 31, 2017 USD ($)	Dec. 31, 2023 KRW (₩)	Dec. 31, 2022 KRW (₩)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 KRW (₩)	May 31, 2022 USD ($)	May 31, 2022 KRW (₩)	Apr. 30, 2022 USD ($)	Apr. 30, 2022 KRW (₩)	Dec. 31, 2021 KRW (₩)	Oct. 31, 2021 USD ($)	Oct. 31, 2021 KRW (₩)	Jun. 30, 2021 USD ($)	Dec. 31, 2019	Dec. 31, 2017 KRW (₩)	Jan. 31, 2017 USD ($)	Jan. 31, 2017 KRW (₩)	Jul. 31, 2016 KRW (₩)
Borrowings
Amount outstanding	$ 79,856,000		$ 50,470,000
Borrowings
Borrowings
Amount outstanding			$ 39,840,000
KEB Hana Bank \| Borrowings
Borrowings
Principal amount		$ 6,700,000,000																							₩ 9,000.0
Annual interest rate		2.60%	5.20%
Additional extension term (in years)								1 year
Amount outstanding	6,980,000		$ 6,682,000
IBK Industrial Bank \| Borrowings
Borrowings
Principal amount																							$ 6,800,000	₩ 9,200.0
Interest rate (as a percent)			4.90%
Amount outstanding	7,135,000		$ 6,831,000
Note payable (one individual investor) \| Borrowings
Borrowings
Principal amount																				$ 1,000,000.0
Interest rate (as a percent)			4.00%
Amount of principal and interest outstanding			$ 1,100,000
Amount outstanding	1,000,000		1,000,000
M-Venture Investment, Inc. \| Borrowings
Borrowings
Amount outstanding	7,756,000		$ 7,425,000
M-Venture Investment, Inc. \| Term loan and security agreement, one
Borrowings
Principal amount																		$ 3,700,000	₩ 5,000.0
Interest rate (as a percent)			6.50%
Amount outstanding			$ 3,100,000			$ 3,000,000.0				₩ 4,000.0
Amount repaid				$ 400,000	₩ 600.0	300,000	₩ 0.4
M-Venture Investment, Inc. \| Term loan and security agreement, two
Borrowings
Amount outstanding			$ 4,800,000
M-Venture Investment, Inc. \| Term loan and security agreement, two, draw one
Borrowings
Principal amount															$ 700,000	₩ 1,000.0
Interest rate (as a percent)			6.50%
M-Venture Investment, Inc. \| Term loan and security agreement, two, draw two
Borrowings
Principal amount															$ 3,700,000	₩ 5,000.0
Interest rate (as a percent)			8.70%
Anapass, Inc, related party \| Borrowings
Borrowings
Amount outstanding	10,082,000		$ 9,653,000
Anapass, Inc, related party \| Term loan and security agreement, one
Borrowings
Principal amount		$ 4,500,000																							₩ 6,000.0
Interest rate (as a percent)		5.50%																							5.50%
Amount outstanding			$ 4,500,000
Anapass, Inc, related party \| Term loan and security agreement, two
Borrowings
Interest rate (as a percent)			5.50%
Amount outstanding			$ 5,200,000
Anapass, Inc, related party \| Term loan and security agreement, two, draw one
Borrowings
Principal amount													$ 2,200,000	₩ 3,000.0
Anapass, Inc, related party \| Term loan and security agreement, two, draw two
Borrowings
Principal amount											$ 3,000,000.0	₩ 4,000.0
i Best Investment Co., Ltd \| Borrowings
Borrowings
Principal amount	$ 10,300,000					$ 10,300,000			₩ 14,000.0	₩ 14,000.0
Interest rate (as a percent)	6.50%					6.50%			6.50%	6.50%
Amount outstanding	$ 10,082,000		7,425,000
i Best Investment Co., Ltd \| Term loan and security agreement, draw one
Borrowings
Amount outstanding			3,300,000
i Best Investment Co., Ltd \| Term loan and security agreement, draw two
Borrowings
Amount repaid	800,000
i Best Investment Co., Ltd \| Term loan and security agreement, draw three
Borrowings
Amount outstanding			1,600,000
i Best Investment Co., Ltd \| Term loan and security agreement, draw four
Borrowings
Amount repaid			2,300,000
i Best Investment Co., Ltd \| Term loan and security agreement, draw five
Borrowings
Amount outstanding			2,300,000
i Best Investment Co., Ltd \| Term loan and security agreement, draw six
Borrowings
Amount outstanding			800,000
Kyeongho Lee \| Borrowings
Borrowings
Amount outstanding	$ 1,474,000		824,000
Kyeongho Lee \| Promissory notes
Borrowings
Principal amount				400,000				$ 400,000									₩ 500,000.0					₩ 500,000.0
Amount outstanding			$ 700,000
Kyeongho Lee \| Promissory notes \| Minimum
Borrowings
Interest rate (as a percent)								9.00%													9.00%	9.00%
Kyeongho Lee \| Promissory notes \| Maximum
Borrowings
Interest rate (as a percent)								7.50%													7.50%	7.50%
Kyeongho Lee \| Term loans
Borrowings
Principal amount				$ 100,000				$ 700,000									₩ 110,000.0					₩ 1,000.0
Interest rate (as a percent)			0.00%
Amount outstanding			$ 82,000

Commitments and Contingencies - Purchase Commitment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Feb. 29, 2024	Dec. 31, 2023
Purchase Commitment
Research and development expense	$ 5,521	$ 902
Unpaid recorded expenses included in accounts payable	1,242			$ 17,814
Research and development agreement with Samsung
Purchase Commitment
Outstanding purchase commitments	0
Total fee amount	21,100
Fee amount to be paid over development milestones	11,700
Additional NRE to be paid as fee amount	$ 9,400
Period for payment of additional NRE	4 years
Gain on release of unconditional liability	$ 14,600
Research And Development Agreement With Alpha Holdings Co., Ltd
Purchase Commitment
Total fee amount			$ 7,600
Research and development expense	3,500
Aggregated unpaid amount	$ 5,000

Commitments and Contingencies - Assets Pledged as Collateral (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Borrowings
Borrowings	$ 50,470	$ 79,856
Cash and cash equivalents	16,122	258
Accounts receivable	5,103	4,920
Inventory	1,784	1,486
Property and equipment	644	772
KEB Hana Bank \| Related party \| Assets pledged as collateral \| Borrowings
Borrowings
Borrowings	6,700	7,000
IBK Industrial Bank \| Related party \| Assets pledged as collateral \| Borrowings
Borrowings
Borrowings	6,800	7,100
Anapass, Inc. \| Related party \| Assets pledged as collateral \| Borrowings
Borrowings
Borrowings	9,700	10,100
Cash and cash equivalents	16,122	254
Accounts receivable	5,118	4,920
Inventory	1,784	1,486
Property and equipment	1,988	352
Intangible assets and others	$ 187	$ 199

Common Stock (Details) - shares	Mar. 31, 2024	Dec. 31, 2023
Common Stock
Total shares Authorized	440,000,000
Common stock, shares authorized	400,000,000	200,000,000
Preferred Stock, Shares Authorized	40,000,000	82,352,000

Common Stock - Shares authorized (Details) - shares shares in Thousands	Mar. 31, 2024	Dec. 31, 2023
Common Stock
Shares of authorized but unissued common stock	33,167	5,902
Warrants
Common Stock
Shares of authorized but unissued common stock	26,724	2,894
Shares available for future grant from 2024 plan
Common Stock
Shares of authorized but unissued common stock	3,983
Convertible promissory notes
Common Stock
Shares of authorized but unissued common stock	800	1,835
Options issued and outstanding
Common Stock
Shares of authorized but unissued common stock	668	668
Shares available for future grant from 2024 ESPP
Common Stock
Shares of authorized but unissued common stock	600
RSUs outstanding
Common Stock
Shares of authorized but unissued common stock	392	392
Shares available for future grant from 2011 plan
Common Stock
Shares of authorized but unissued common stock		113

Warrants (Details) shares in Thousands	3 Months Ended
Warrants (Details) shares in Thousands	Mar. 31, 2024 $ / shares shares
Warrants
Number of warrants issued \| shares	26,724
Warrants expiration term	3 years
August 2021
Warrants
Number of warrants issued \| shares	299
August 2021 \| Maximum
Warrants
Exercise price of warrants	$ 18.75
August 2021 \| Minimum
Warrants
Exercise price of warrants	$ 10.00
September 2021
Warrants
Number of warrants issued \| shares	300
Exercise price of warrants	$ 5.00
February 2023 ~ June 2023
Warrants
Number of warrants issued \| shares	2,115
February 2023 ~ June 2023 \| Maximum
Warrants
Exercise price of warrants	$ 18.75
February 2023 ~ June 2023 \| Minimum
Warrants
Exercise price of warrants	$ 10.00
July 2023
Warrants
Number of warrants issued \| shares	80
Exercise price of warrants	$ 10.00
October 2023
Warrants
Number of warrants issued \| shares	100
Exercise price of warrants	$ 10.00
:Public And Private Placement Warrants [Member]
Warrants
Number of warrants issued \| shares	23,830
Exercise price of warrants	$ 11.50

Stock-Based Compensation (Details)	Mar. 31, 2024 shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Additional shares of common stock reserved for issuance	90,000
2024 Incentive Compensation Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares of common stock reserved for issuance	3,983,334

Stock-Based Compensation - Stock option activities (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended	15 Months Ended
	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2024
Number of Stock Options Outstanding
Balances as of beginning	392
Reverse recapitalization		(1,708)
Balances as of end	392	392	392
Weighted-Average Exercise Price
Balances as of beginning (in dollars per share)	$ 6.16
Reverse recapitalization (in dollars per share)		5.01
Balances as of end (in dollars per share)	$ 6.16	$ 6.16	$ 6.16
Employee Stock Option
Shares Available for Grant
Options granted			0
Number of Stock Options Outstanding
Balances as of beginning	3,579
Granted			0
Balances as of end	668	3,579	668
Vested as of end	667		667
Vested and expected to be vest as of end	634		634
Weighted-Average Exercise Price
Balances as of beginning (in dollars per share)	$ 0.02
Balances as of end (in dollars per share)	0.11	$ 0.02	$ 0.11
Vested as of end (in dollars per share)	0.11		0.11
Vested and expected to be vest as of end (in dollars per share)	$ 0.11		$ 0.11
Weighted Average Remaining Contractual Life (Years)
Options Outstanding Weighted Average Remaining Contractual Life	5 years 3 months 18 days	5 years 6 months
Vested as of December 31, 2023	5 years 3 months 18 days
Vested and expected to be vest as of December 31, 2023	5 years 1 month 6 days
Balance as if beginning Aggregated Intrinsic Value	$ 5,543	$ 4,405	$ 5,543
Vested as of Aggregated Intrinsic Value	5,532		5,532
Exercisable as of Aggregated Intrinsic Value	$ 5,256		$ 5,256
Employee Stock Option \| Retrospectively adjusted
Number of Stock Options Outstanding
Balances as of beginning	668
Reverse recapitalization		(2,911)
Balances as of end		668
Weighted-Average Exercise Price
Balances as of beginning (in dollars per share)	$ 0.11
Reverse recapitalization (in dollars per share)		0.09
Balances as of end (in dollars per share)		$ 0.11
Weighted Average Remaining Contractual Life (Years)
Options Outstanding Weighted Average Remaining Contractual Life		5 years 6 months
Balance as if beginning Aggregated Intrinsic Value		$ 4,405
RSUs
Number of Stock Options Outstanding
Balances as of beginning	2,100
Balances as of end		2,100
Weighted-Average Exercise Price
Balances as of beginning (in dollars per share)	$ 1.15
Balances as of end (in dollars per share)		$ 1.15

Stock-Based Compensation - Restricted Stock Units (Details) $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($)
The Company and Summary of Significant Accounting Policies
stock-based compensation	$ 0.9
RSUs
The Company and Summary of Significant Accounting Policies
Unrecognized compensation cost related to RSUs	$ 2.1
Expected weighted average period for recognition of unrecognized compensation cost related to RSUs	3 years 8 months 12 days
stock-based compensation	$ 0.3

Income Taxes (Details) - USD ($)	3 Months Ended
Income Taxes (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Income Taxes
Income tax expense	$ 59,000	$ 50,000
Effective tax rate	7.20%	3.70%
Unrecognized tax benefits	$ 3,100,000
Unrecognized tax benefits effective tax rate	1,700,000
Interest expense or penalties related to unrecognized tax benefits	$ 0

Income Taxes - Reconciliation of the unrecognized tax benefits (Details) $ in Millions	Mar. 31, 2024 USD ($)
Income Taxes
Amount of unrecognized tax benefits that, if recognized, would affect effective tax rate	$ 1.7

Employee Benefit Plans - Net liability for severance payments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Employee Benefit Plans
Liability for severance payments, beginning	$ 7,764	$ 7,997
Deposit	(276)	(308)
Liability for severance payments, ending	$ 7,488	$ 7,689

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Related Party Transactions
Other	$ 107		$ 72
Interest expense	2,082	$ 935
Related party \| Anapass
Related Party Transactions
Borrowings	9,653		10,082
Other	106		212
Interest expense	100	100
Related party \| Kyeongho Lee
Related Party Transactions
Borrowings	824		1,474
Other	87		$ 182
Interest expense	$ 22,000	$ 26,000

Segments and Information (Details)	3 Months Ended
Segments and Information (Details)	Mar. 31, 2024 segment
Segments and Information
Number of operating segment	1

Segments and Information - Long-lived assets by geographic region (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Segments and Geographical Information
Total long-lived assets	$ 1,987	$ 2,293
United States
Segments and Geographical Information
Total long-lived assets	817	930
Korea
Segments and Geographical Information
Total long-lived assets	$ 1,170	$ 1,363

Net Income (Loss) Per Share - Computation of basic and diluted net loss per share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands

3 Months Ended

Mar. 31, 2024

Mar. 31, 2023

Numerator:

Net income (loss), basic

$ 757

$ (1,393)

Net income (loss), diluted

$ 757

$ (1,393)

Denominator:

Weighted-average common shares outstanding, basic

^[1]

25,468

23,862

Add: effect of dilutive securities

789

Weighted-average common shares outstanding, diluted

^[1]

26,257

23,862

Net income (loss) per share, basic and diluted

Net income (loss) per common share - basic

^[1]

$ 0.03

$ (0.06)

Net income (loss) per common share - diluted

^[1]

$ 0.03

$ (0.06)

[1]	Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined in the Notes to the Unaudited Condensed Consolidated Financial Statements.)

Net Income (Loss) Per Share - Computation of outstanding potentially dilutive common stock (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities that were excluded from the computation of diluted net loss per common share	32,267	3,689
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities that were excluded from the computation of diluted net loss per common share	26,724	995
Convertible promissory notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities that were excluded from the computation of diluted net loss per common share	5,543	1,809
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities that were excluded from the computation of diluted net loss per common share		885

Subsequent Events (Details) - Subsequent event $ in Millions, ₩ in Billions	1 Months Ended
	May 31, 2024 shares	Apr. 30, 2024 USD ($)	Apr. 30, 2024 KRW (₩)	Apr. 30, 2024 KRW (₩)
Historical convertible promissory notes notes.
Subsequent Events
Principal amount \| $		$ 0.6
Share Reserve
Subsequent Events
Maximum number of shares of Common stock \| shares	3,983,334
Share Reserve \| 2024 Employee Stock Purchase Plan
Subsequent Events
Reserve share \| shares	600,000
M-Venture Investment, Inc.
Subsequent Events
Term loan outstanding		3.0		₩ 4.0
Principal amount of loan extended maturity date from April 2024 to June 2024		0.7		1.0
M-Venture Investment, Inc. \| Term loans
Subsequent Events
Term loan outstanding		4.4		6.0
Repayment of short term loan		1.5	₩ 2.0
Principal amount of loan extended maturity date from April 2024 to July 2024		$ 3.7		₩ 5.0
B. Riley Principal Capital II, LLC
Subsequent Events
Period for issuance of stock		24 months	24 months
Common stock purchase agreement \| B. Riley Principal Capital II, LLC
Subsequent Events
Maximum aggregate amount of stock issuance \| $		$ 50.0

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 757	$ (1,393)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Contract assets

Assets recognized for costs incurred to fulfill a contract (*)

Contract liabilities