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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 September 30, 2025


☐	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	86-2171699
(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

Not Applicable

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 November 7, 2025, the registrant had 57,099,558 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 ability to develop new 5th generation (“5G”) products under collaboration agreements with our major partners;

•

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

•

macroeconomic conditions, including labor disputes, depreciation of the U.S. dollar, volatility in the capital markets, inflationary impacts and disruptions to the global supply chain;

•

the imposition of duties and tariffs and other trade barriers and retaliatory countermeasures implemented by the U.S. and other governments;

•

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

•

increase in supply chain costs, including raw materials, sourcing, transportation and energy;

•

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

•

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

•

our ability to meet the prospective delivery time for our products and fulfill customer orders;

•

our future capital requirements and sources and uses of cash;

•

our ability to cover our future capital expenditures and to pay down our near-term debt obligations;

•

our ability to obtain funding and raise capital for our operations;

•

our ability to access the capital markets and credit markets;

•

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;

•

our ability to maintain the listing of our common stock on the NYSE;

•

technology, cybersecurity, and data privacy risks;

•

intense market competition;

•

geopolitical conditions, including political instability in the U.S. and Korea, unrest and sanctions, war, conflict, including the ongoing conflicts between Russia and Ukraine, conflicts in the Middle East, and increasing tensions between China and Taiwan;

•

legislative and regulatory risks, including those relating to the recent enactment of the One Big Beautiful Bill Act and the impact of a continued shutdown of the U.S. government;

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•

uncertainties and risks relating to new trade regulations, including tariffs and export control regulations;

•

reputational risks; and

•

other risks and uncertainties indicated or referenced 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 Annual Report on Form 10‑K filed with the Securities and Exchange Commission (“SEC”) on March 25, 2025. 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.

Table of Contents


		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 Loss	3
	Condensed Consolidated Statements of Stockholders’ Deficit	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37

Part II.	OTHER INFORMATION	38

Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
Signatures		41

iii

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

GCT SEMICONDUCTOR HOLDING, INC.

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except per share amounts)


	September 30, 2025			December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	8,343		$	1,435
Accounts receivable, net		3,686			5,740
Inventory		1,905			2,977
Contract assets		5,631			5,107
Prepaid expenses and other current assets		2,302			2,332
Total current assets		21,867			17,591
Property and equipment, net		1,582			869
Operating lease right-of-use assets		412			849
Intangibles, net		10			65
Other assets		404			523
Total assets	$	24,275		$	19,897
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	1,053		$	1,031
Contract liabilities		11			48
Accrued and other current liabilities		20,970			21,205
Common stock forward liability		4			315
Borrowings		59,413			37,626
Convertible promissory notes, current		5,287			—
Operating lease liabilities, current		372			697
Total current liabilities		87,110			60,922
Convertible promissory notes, net of current		—			4,947
Net defined benefit liabilities		7,913			7,055
Long-term operating lease liabilities		63			177
Income taxes payable		2,330			2,076
Warrant liabilities		6,923			3,750
Other liabilities		85			285
Total liabilities		104,424			79,212
Commitments and contingencies (Note 7)
Stockholders’ deficit:
Preferred stock, par value $0.0001 per share; 40,000 shares authorized as of September 30, 2025 and December 31, 2024; no shares issued and outstanding as of September 30, 2025 and December 31, 2024		—			—
Common stock, par value $0.0001 per share; 400,000 shares authorized as of September 30, 2025 and December 31, 2024; 56,465 and 47,987 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		6			5
Additional paid-in capital		515,603			501,195
Accumulated other comprehensive income		630			1,518
Accumulated deficit		(596,388	)		(562,033	)
Total stockholders’ deficit		(80,149	)		(59,315	)
Total liabilities and stockholders’ deficit	$	24,275		$	19,897

The accompanying notes are an integral part of these unaudited 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 September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Net revenues:
Product	$	148		$	1,715		$	647		$	4,111
Service		282			895			1,461			3,232
Total net revenues		430			2,610			2,108			7,343
Cost of net revenues:
Product		1,419			710			2,208			1,522
Service		61			274			484			1,321
Total cost of net revenues		1,480			984			2,692			2,843
Gross profit (loss)		(1,050	)		1,626			(584	)		4,500
Operating expenses:
Research and development		3,258			4,210			10,868			13,895
Sales and marketing		1,048			949			3,187			2,921
General and administrative		3,898			2,379			9,947			8,075
Gain on extinguishment of liability		—			—			—			(14,636	)
Total operating expenses		8,204			7,538			24,002			10,255
Loss from operations		(9,254	)		(5,912	)		(24,586	)		(5,755	)
Interest expense		(1,783	)		(667	)		(4,385	)		(3,509	)
Gain (loss) on foreign currency transactions, net		1,320			(1,044	)		(1,876	)		1,244
Change in fair value of common stock forward liability		16			—			311			(586	)
Change in fair value of common stock warrant liabilities		(3,812	)		759			(3,173	)		2,761
Change in fair value of convertible promissory notes		(164	)		(165	)		(340	)		(1,354	)
Other income (expenses), net		6			(31	)		16			(21	)
Loss before provision for income taxes		(13,671	)		(7,060	)		(34,033	)		(7,220	)
Provision for income taxes		178			61			322			187
Net loss	$	(13,849	)	$	(7,121	)	$	(34,355	)	$	(7,407	)
Net loss per common share:
Basic and diluted	$	(0.25	)	$	(0.16	)	$	(0.67	)	$	(0.19	)
Weighted average common shares outstanding:
Basic and diluted		55,462			45,645			51,619			38,418

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

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GCT SEMICONDUCTOR HOLDING, INC.

Condensed Consolidated Statements of Comprehensive Loss

(unaudited, in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Comprehensive loss, net of taxes:
Net loss	$	(13,849	)	$	(7,121	)	$	(34,355	)	$	(7,407	)
Foreign currency translation adjustment		855			(1,180	)		(888	)		592
Comprehensive loss	$	(12,994	)	$	(8,301	)	$	(35,243	)	$	(6,815	)

The accompanying notes are an integral part of these unaudited 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, 2024		47,987		$	5	$	501,195		$	1,518		$	(562,033	)	$	(59,315	)
Issuance of common stock under common stock purchase agreement		74			—		189			—			—			189
Issuance of common stock upon exercise of stock options		173			—		19			—			—			19
Release of vested restricted stock units		19			—		—			—			—			—
Shares withheld related to net share settlement of restricted stock units		(6	)		—		(11	)		—			—			(11	)
Stock-based compensation		—			—		511			—			—			511
Foreign currency translation adjustment		—			—		—			(51	)		—			(51	)
Net loss		—			—		—			—			(6,968	)		(6,968	)
Balance as of March 31, 2025		48,247			5		501,903			1,467			(569,001	)		(65,626	)
Issuance of common stock under common stock purchase agreement		1			—		1			—			—			1
Issuance of common stock under at-market agreement		298			—		471			—			—			471
Issuance of common stock and common stock warrants in a registered direct offering		7,006			1		9,893			—			—			9,894
Issuance of common stock upon exercise of stock options		14			—		2			—			—			2
Release of vested restricted stock units		218			—		—			—			—			—
Stock-based compensation		—			—		512			—			—			512
Foreign currency translation adjustment		—			—		—			(1,692	)		—			(1,692	)
Net loss		—			—		—			—			(13,538	)		(13,538	)
Balance as of June 30, 2025		55,784			6		512,782			(225	)		(582,539	)		(69,976	)
Issuance of common stock under at-market agreement		590			—		950			—			—			950
Issuance of common stock upon exercise of stock options		1			—		—			—			—			—
Release of vested restricted stock units		90			—		—			—			—			—
Stock-based compensation		—			—		1,871			—			—			1,871
Foreign currency translation adjustment		—			—		—			855			—			855
Net loss		—			—		—			—			(13,849	)		(13,849	)
Balance as of September 30, 2025		56,465		$	6	$	515,603		$	630		$	(596,388	)	$	(80,149	)

The accompanying notes are an integral part of these unaudited 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		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	)
Issuance of common stock under common stock purchase agreement		679			—		3,388		—			—			3,388
Issuance of commitment shares in connection with common stock purchase agreement		57			—		—		—			—			—
Issuance of common stock to underwriter		110			—		667		—			—			667
Stock-based compensation		—			—		323		—			—			323
Foreign currency translation adjustment		—			—		—		708			—			708
Net loss		—			—		—		—			(1,043	)		(1,043	)
Balance as of June 30, 2024		46,679			5		491,384		234			(549,940	)		(58,317	)
Issuance of common stock under common stock purchase agreement		1,422			—		5,541		—			—			5,541
Issuance of common stock and common stock warrants in a private placement		742			—		2,240		—			—			2,240
Issuance of common stock upon exercise of stock options		118			—		13		—			—			13
Forfeiture of unvested sponsor earnout shares		(1,350	)		—		—		—			—			—
Stock-based compensation		—			—		573		—			—			573
Foreign currency translation adjustment		—			—		—		(1,180	)		—			(1,180	)
Net loss		—			—		—		—			(7,121	)		(7,121	)
Balance as of September 30, 2024		47,611		$	5	$	499,751	$	(946	)	$	(557,061	)	$	(58,251	)

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

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GCT SEMICONDUCTOR HOLDING, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)


	Nine Months Ended September 30,
	2025			2024
Operating activities:
Net loss	$	(34,355	)	$	(7,407	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		506			528
Amortization of right-of-use assets		520			463
Stock-based compensation		2,894			2,119
Issuance of common stock to underwriter		—			667
Change in provision for credit losses		1,352			(547	)
Change in fair value of common stock forward liability		(311	)		586
Change in fair value of warrant liabilities		3,173			(2,761	)
Change in fair value of convertible promissory notes		340			1,354
Gain on extinguishment of liability		—			(14,636	)
Changes in operating assets and liabilities:
Accounts receivable		702			(895	)
Inventory		1,072			(1,624	)
Contract assets		(524	)		(1,659	)
Prepaid expenses and other current assets		423			(21	)
Other assets		119			70
Accounts payable		22			(2,328	)
Contract liabilities		(37	)		463
Accrued and other current liabilities		1,163			(3,040	)
Net defined benefit liabilities		953			674
Income taxes payable		(449	)		35
Lease liabilities		(823	)		(455	)
Other liabilities		(192	)		(275	)
Net cash used in operating activities		(23,452	)		(28,689	)
Investing activities:
Purchases of property and equipment		(1,143	)		(185	)
Net cash used in investing activities		(1,143	)		(185	)
Financing activities:
Proceeds from borrowings		21,763			3,696
Proceeds from issuance of common stock under common stock purchase agreement		190			7,814
Proceeds from issuance of common stock under at-market agreement		1,470			—
Proceeds from issuance of common stock and common stock warrants in a private placement		—			2,240
Proceeds from issuance of common stock and common stock warrants in a registered direct offering		11,000			—
Proceeds from exercise of stock options		21			13
Payment of common stock issuance costs		(1,155	)		—
Tax withholding on restricted stock units		(11	)		—
Proceeds from reverse recapitalization and PIPE Financing, net of transaction costs		—			17,238
Proceeds from issuance of convertible promissory notes		—			16,290
Repayments of borrowings		(2,212	)		(14,065	)
Repayments of convertible promissory notes		—			(1,630	)
Net cash provided by financing activities		31,066			31,596
Effect of exchange rate changes on cash and cash equivalents		437			(1,168	)
Net increase in cash and cash equivalents		6,908			1,554
Cash and cash equivalents at beginning of period		1,435			258
Cash and cash equivalents at end of period	$	8,343		$	1,812
Supplemental disclosure of cash flow information:
Cash paid for interest	$	4,336		$	3,059
Cash paid for income taxes	$	236		$	212
Cash paid for operating leases	$	560		$	562
Non-cash financing activities:
Issuance of common stock from conversion of convertible promissory notes	$	—		$	41,209
Settlement of common stock forward liability in equity	$	—		$	135
Proceeds from issuance of common stock withheld for outstanding payables	$	—		$	975
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	74		$	54

The accompanying notes are an integral part of these unaudited 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 Holding, 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 South 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, business-to-business (“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. (“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 identified as the acquired company for accounting purposes. Subsequent to the Business Combination, the shares and net loss per common share information 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. 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 unaudited 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. Through September 30, 2025, the Company has incurred operating losses and negative cash flows from operating activities and had an accumulated deficit of $596.4 million as of September 30, 2025. The Company’s existing sources of liquidity as of September 30, 2025 include cash and cash equivalents of $8.3 million. The Company has historically funded operations primarily with issuances of capital stock and the incurrence of debt. The Company is dependent on additional fundraising in order to sustain its ongoing operations.

In April 2024, the Company executed a common stock purchase agreement (“Purchase Agreement”) with B. Riley Principal Capital II, LLC (“B. Riley”). Pursuant to the Purchase Agreement, the Company has the right, but not the obligation, to sell, from time to time, B. Riley up to $50.0 million worth of shares of the Company’s common stock at its request, at any time prior to June 2026, subject to compliance with the required conditions and limitations. Through September 30, 2025, the Company utilized $9.9 million of the contractual commitment amount under the Purchase Agreement.

On April 1, 2025, the Company executed an at-market issuance sales agreement (“ATM Agreement”) with B. Riley Securities, Inc. and H.C. Wainwright & Co., LLC, acting as sales agents. The ATM Agreement allows the Company to sell its common stock for gross proceeds of up to $75.0 million from time to time, through at-the-market offerings or to the sales agents as principal purchasers (“ATM Offering”). During the three and nine months ended September 30, 2025, the Company received net proceeds of approximately $1.0 million and $1.4 million in cash related to the ATM Offering, respectively (see Note 8).

On May 15, 2025, the Company entered into securities purchase agreements (“RDO Purchase Agreements”) with certain institutional investors (“Purchasers”) pursuant to which, the Company sold shares of common stock and warrants to purchase common stock to the Purchasers and received net proceeds of $9.9 million. The registered direct offering (“RDO”) closed on May 16, 2025 (see Note 8).

To fund its operations over the longer term, the Company will need to start generating positive cash flows, renegotiate its existing debt obligations, and raise additional capital through debt or equity financing. Management’s plans include seeking additional financing, such as issuances of equity and issuances of debt and/or convertible debt instruments. Sales of additional equity securities, convertible debt, and/or warrants by the Company could result in the dilution of the interests of existing stockholders. The Company will require

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

significant additional financing to meet its planned capital needs and is pursuing opportunities to obtain additional financing through equity and/or debt alternatives. There can be no assurance that such additional debt or equity financing will be available on terms acceptable to the Company or at all. These factors raise substantial doubt about the Company’s ability to continue as a going concern beyond twelve months after the date that these unaudited condensed consolidated financial statements are issued. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

2. Summary of Significant Accounting Policies and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The unaudited 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 unaudited 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 annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these interim unaudited 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, 2024, which are included in the Company’s Form 10‑K filed with the SEC on March 25, 2025.

The information as of December 31, 2024 included in the unaudited condensed consolidated balance sheets was derived from the audited consolidated financial statements. Certain amounts reported in the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2024 have been reclassified to conform to the current year’s presentation.

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 unaudited condensed consolidated results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any other future annual or interim period.

There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Use of Estimates

The preparation of the accompanying unaudited 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, deferred income taxes and related valuation allowances, inventory obsolescence, recoverability of long-lived assets, certain accrued expenses, stock-based compensation, determination of the fair value of the Company’s financial instruments, including convertible promissory notes, warrant liabilities, stock options, and common stock forward liability. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. Actual results could differ from these estimates, and these differences may be material.

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: 5G and other 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 5G and other 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

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Company may experience significant period-to-period fluctuations in the unaudited condensed consolidated operating results due to the abovementioned 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 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 collectibility 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 has recorded provisions for credit losses of approximately $2.6 million and $1.2 million as of September 30, 2025 and December 31, 2024, respectively.

Revenue Recognition

The Company’s revenues are generated by the sale of 4G and 5G mobile semiconductor solutions consisting of product and platform solutions aimed at the 4G LTE and 5G NR (New Radio) wireless communications industry, and related development services and technical advice and maintenance services. To determine when revenues are recognized, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligation in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when or as the Company satisfies a performance obligation.

The revenues from product sales are identified and determined pursuant to purchase orders. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the product, which is generally at the time of shipment.

Service revenues are identified and determined based on each service agreement and recognized over time or at a point in time, depending on the evaluation of when the customer obtains control of the promised goods or services, which is generally as services are rendered. For contracts that include multiple performance obligations, the Company allocates revenue to each performance obligation based on estimates of the relative stand-alone selling price that the Company would charge the customer for each promised product or service.

All product revenue presented in the unaudited condensed consolidated statements of operations is recognized at a point in time, and all service revenue is recognized over time.

Concentration of Credit Risk

The Company’s financial instruments subject to credit risk concentration 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 located in South Korea, where amounts deposited may exceed Federal Deposit Insurance Corporation or Korea Deposit Insurance Corporation limits. The Company’s accounts receivable balances are primarily derived from revenues recognized from customers located in the United States, China, South Korea, Japan, and Taiwan. The Company performs ongoing credit evaluations of the financial condition of its customers and distributors and generally does not require collateral.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company’s net revenues and accounts receivable are concentrated among a few significant customers, which could expose the Company to financial risk in the event of adverse developments. The following represents the concentration of the Company’s gross accounts receivable among key customers to the extent their share exceeds 10%:


Customer	September 30, 2025			December 31, 2024
Customer B		15	%		13	%
Customer F		24	%		22	%
Customer H		15	%		13	%
Customer K		30	%		27	%

The following table includes customers that individually accounted for more than 10% of the Company’s net revenues in the periods indicated:


	Three Months Ended September 30,						Nine Months Ended September 30,
Customer	2025			2024			2025			2024
Customer A			*%			*%		21	%			*%
Customer B		10	%		—	%			*%		—	%
Customer F		—	%		57	%		—	%		20	%
Customer K		—	%		—	%		—	%		27	%
Customer L			*%			*%			*%		12	%
Customer M		19	%		24	%		31	%		25	%
Customer O		47	%		—	%		24	%		—	%
Customer P		14	%		—	%			*%		—	%

*Less than 10%.

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 diversifying its customer base and exploring 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 reporting period. Translation adjustments are included in accumulated other comprehensive income or loss within stockholders’ deficit.

Gains and losses resulting from transactions denominated in a currency other than the functional currency are presented separately in the unaudited condensed consolidated statements of operations.

For the three and nine months ended September 30, 2025, the Company recognized realized foreign currency exchange losses of zero and $0.4 million, respectively. For the three and nine months ended September 30, 2025, the Company recognized unrealized foreign currency exchange gains of $1.3 million and losses of $1.4 million, respectively.

For the three and nine months ended September 30, 2024, the Company recognized realized foreign currency exchange gains of $0.1 million and $0.5 million, respectively. For the three and nine months ended September 30, 2024, the Company recognized unrealized foreign currency exchange losses of $1.1 million and gains of $0.8 million, respectively.

Convertible Promissory Notes

The Company has elected the fair value option to account for its outstanding convertible promissory notes, with changes in estimated fair value presented separately under the corresponding caption in the unaudited condensed consolidated statements of operations. Through September 30, 2025, there were no changes in the instrument-specific credit risk that are required to be presented as a component of other comprehensive loss.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Other Comprehensive Income (Loss)

Other comprehensive income (loss) includes all changes within equity that are not the result of transactions with stockholders. Accumulated other comprehensive income (loss) includes foreign currency translation adjustments arising from the consolidation of the Company’s foreign subsidiaries.

Common Stock Warrants

Common stock warrants are classified as liabilities if they do not meet equity classification requirements based on their settlement mechanism upon a change of control and similar transactions. The corresponding liability is remeasured at fair value while the common stock warrants remain outstanding, with changes in fair value presented separately in the unaudited condensed consolidated statements of operations. Common stock warrants that meet equity classification requirements are credited to stockholders’ deficit on their issuance dates and are not subsequently remeasured.

Segment Information

The Company operates in one operating and reportable segment, providing fabless semiconductor products to customers. The Company’s chief operating decision-maker is its Chief Executive Officer. Since the Company operates in a single operating and reportable segment represented by the entire entity, significant segment expenses are provided to the chief operating decision-maker using the same basis as presented in the unaudited condensed consolidated statements of operations. When evaluating the Company’s financial performance and making strategic decisions, the chief operating decision-maker utilizes consolidated revenue, operating expenses, other income and expenses, and net loss. The chief operating decision-maker regularly reviews assets, liabilities, income, expenses, and profitability measures at the same level and categorization as presented in the Company’s unaudited condensed consolidated financial statements.

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 using private company timelines. 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 unaudited 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.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), 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. ASU 2023-09 is effective for the Company as an emerging growth filer for annual periods beginning after December 15, 2025, 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 of the adoption of ASU 2023-09 on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public entities to provide disaggregated disclosures of certain expense captions presented on the face of the income statement into specific categories within the notes to the consolidated financial statements. ASU 2024-03 is effective for the Company’s annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The ASU may be applied either on a prospective or retrospective basis. The Company is currently evaluating the impact of the adoption of ASU 2024-03 on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”), which provides a practical expedient to measure expected credit losses on accounts receivable and contract assets. ASU 2025-05 is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the timing of the adoption and the impact of ASU 2025-05 on its consolidated financial statements and related disclosures.

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) (“ASU 2025-07”). The guidance refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. The guidance also provides clarification under Topic 606 for share-based noncash consideration from a customer in a revenue contract. The amendments in ASU 2025-07 are effective for fiscal years beginning after December 15, 2026, and interim reporting periods, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2025-07 on its consolidated financial statements and related disclosures.

3. Disaggregation of Revenue

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


	Three Months Ended September 30,					Nine Months Ended September 30,
	2025			2024		2025		2024
United States	$	286		$	837	$	1,330	$	2,565
Taiwan		21			195		443		195
Germany		(4	)		46		138		916
China		67			32		137		167
South Korea		60			1,500		60		3,500
Total	$	430		$	2,610	$	2,108	$	7,343

Contract Assets and Liabilities

Net revenues recognized during the nine months ended September 30, 2025 and 2024 for the amounts included in the contract liabilities balance at the beginning of the respective annual periods were not material in each period.

4. Fair Value of Measurements

Recurring Fair Value Measurements

The following financial instruments are measured at fair value on a recurring basis (in thousands):


	September 30, 2025
	Level 1		Level 2		Level 3		Total
Liabilities:
Convertible promissory notes	$	—	$	—	$	5,287	$	5,287
Warrant liabilities		—		—		6,923		6,923
Common stock forward liability		—		—		4		4


	December 31, 2024
	Level 1		Level 2		Level 3		Total
Liabilities:
Convertible promissory notes	$	—	$	—	$	4,947	$	4,947
Warrant liabilities		—		—		3,750		3,750
Common stock forward liability		—		—		315		315

Valuation Techniques and 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

         September 30, 2025

         December 31, 2024

Convertible promissory notes, current

Binomial Lattice Model (“BLM”)

Stock price, volatility, remaining term, risk-free rate, credit spread

5,287

4,947

Warrant liabilities

Black Scholes Merton 
Model (“BSM”) or BLM

Exercise price, term to expiration, volatility, risk-free rate

6,923

3,750

Common stock forward liability

Discounted Cash Flow (“DCF”)

Various utilization scenarios, risk-free rate, remaining term

4

315

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GCT SEMICONDUCTOR HOLDING, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

As of September 30, 2025, the key inputs for the convertible promissory notes measured using the BLM were as follows: stock price of $1.52, implied volatility of 109.70%, remaining term of 0.4 years, risk-free rate of 3.90%, and credit spread of 5.70%.

As of September 30, 2025, the key inputs used to measure the public and private placement warrants using the BLM and BSM were as follows: exercise price of $11.50 per share, term to expiration of 3.5 years, volatility of 109.70%, and a risk-free rate of 3.61%. As of September 30, 2025, the key inputs for the other warrant liabilities using the BSM were as follows: an exercise price of $10 per share, or $18.75 per share, term to expiration ranging from 0.4 years to 1.1 years, volatility ranging from 73.20% to 81.70%, and a risk-free rate ranging from 3.64% to 3.86%.

As of September 30, 2025, the key inputs for the common stock forward valuation using the DCF model were as follows: a remaining term of 0.6 years and future risk-free rate estimates ranging from 3.79% to 4.20% for this period.

The following table sets forth a summary of the changes in the fair value of the convertible promissory notes (in thousands):


As of December 31, 2024	$	4,947
Change in fair value		19
As of March 31, 2025		4,966
Change in fair value		157
As of June 30, 2025		5,123
Change in fair value		164
As of September 30, 2025	$	5,287

The following table sets forth a summary of the changes in the fair value of the warrant liabilities (in thousands):


As of December 31, 2024	$	3,750
Change in fair value		(1,649	)
As of March 31, 2025		2,101
Change in fair value		1,010
As of June 30, 2025		3,111
Change in fair value		3,812
As of September 30, 2025	$	6,923

The following table sets forth a summary of the changes in the fair value of the common stock forward liability (in thousands):


As of December 31, 2024	$	315
Change in fair value		(295	)
As of March 31, 2025		20
Change in fair value		—
As of June 30, 2025		20
Change in fair value		(16	)
As of September 30, 2025	$	4

5. Balance Sheet Components

Inventory

Inventories consist of the following (in thousands):


	September 30,		December 31,
	2025		2024
Raw materials	$	646	$	1,005
Work-in-process		317		224
Finished goods		942		1,748
Total inventory	$	1,905	$	2,977

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GCT Semiconductor Holding, Inc. 10-Q