GCTS Wts each whole warrant exercisable one share of Common Stock

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 14, 2024

 

 

GCT Semiconductor Holding, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware	001-41013	86-2171699
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2290 North 1st Street, Suite 201 San Jose, CA		95131
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (408) 434-6040

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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		GCTW		The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

 

 

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Item 2.02 Results of Operations and Financial Condition.

On November 14, 2024, GCT Semiconductor Holding, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in Item 2.02 of this Current Report, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Index

 

Exhibit Number		Description
99.1		Press Release, dated November 14, 2024, of GCT Semiconductor Holding, Inc.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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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 hereunto duly authorized.

 

		GCT SEMICONDUCTOR HOLDING, INC.
November 14, 2024		By:	/s/ Edmond Cheng
		Name:	Edmond Cheng
		Title:	Chief Financial Officer

 

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GCT Semiconductor Holding, Inc. Reports Third Quarter 2024 Financial Results

SAN JOSE, CA – November 14, 2024 – GCT Semiconductor Holding, Inc. (“GCT” or the “Company”) (NYSE: GCTS), a leading designer and supplier of advanced 5G and 4G semiconductor solutions, today reported financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Financial Summary and Recent Operational Highlights

“We are excited about the advancements we are making toward volume shipments of our 5G chipsets, which we anticipate commencing in the first half of 2025,” said John Schlaefer, Chief Executive Officer of GCT. “Since our last earnings report, we have not only continued to advance our 5G chipset development, but also progressed some of our key relationships that we expect to drive sales demand for the chips. We are excited about the collaboration under an MOU with a global tier one telecommunications supplier for the development of Fixed Wireless Access devices using our 5G chipsets.”

“While our focus is on advancing our 5G offering,” added Schlaefer, “I’m pleased to say that our product sales have started to positively rebound, and we continue to expect demand for both existing and new 4G products even now that our launch of 5G products is imminent. As stated in our last call, it is important to understand the longevity of our 4G product offering as certain use cases are ideally suited for our dedicated 4G offering.”

“During the third quarter, we have negotiated with some of our lenders and successfully extended approximately $22.6 million of current liabilities into 2025,” said Edmond Cheng, Chief Financial Officer of GCT. “We also repaid $2.5 million of bank borrowings and $1.0 million of promissory notes. In addition to the current ELOC with B. Riley Financial, and to further strengthen our financial position, we are in active discussions with our financial advisors and potential investors to pursue financing and capital-raising transactions.”

Third Quarter 2024 Financial Results

Net revenues decreased by $1.9 million, or 42%, to $2.6 million for the three months ended September 30, 2024 from $4.5 million for the three months ended September 30, 2023. The decrease was primarily attributable to a decrease of $2.3 million in product sales, partially offset by an increase of $0.4 million in service revenue.

Cost of net revenues decreased by $3.0 million, or 75%, to $1.0 million for the three months ended September 30, 2024 from $3.9 million for the three months ended September 30, 2023. Product costs decreased by $3.3 million from $4.0 million for the three months ended September 30, 2023 to $0.7 million for the three months ended September 30, 2024. The decrease was primarily driven by a decrease in direct product costs as we sold fewer units. Service costs were $0.3 million for the three months ended September 30, 2024. Service costs were nominal for the three months ended September 30, 2023.

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Gross margin increased to 62% for the three months ended September 30, 2024 from 12% for the three months ended September 30, 2023 primarily due to changes in the product mix. Specifically, we increased the share of reference platform sales and generated higher margins from our service offerings during the third fiscal quarter of 2024.

Research and development expenses increased by $1.8 million, or 78%, from $2.4 million for the three months ended September 30, 2023 to $4.2 million for the three months ended September 30, 2024. This change was primarily due to a $1.5 million increase in research and development expenses mainly related to professional services related to our 5G chip development.

Sales and marketing expenses increased by $0.2 million, or 28%, from $0.7 million for the three months ended September 30, 2023 to $0.9 million for the three months ended September 30, 2024. This increase was primarily due to personnel-related costs.

General and administrative expenses increased by $0.9 million, or 66%, from $1.4 million for the three months ended September 30, 2023 to $2.4 million for the three months ended September 30, 2024. The change was primarily due to a $0.4 million increase in stock-based compensation related to restricted stock units, a $0.4 million increase in professional and other expenses related to the public company operations, and a $0.1 million increase in personnel-related costs.

Liquidity

The Company’s existing sources of liquidity as of September 30, 2024, include cash and cash equivalents of $1.8 million, net accounts receivable of $6.4 million, and inventory of $3.1 million.

5G Outlook

The Company remains confident based on the progress of its 5G chipset development and reiterates the expectation to commence volume shipments of 5G chipsets in the first half of 2025.

Conference Call

The Company will hold a conference call and live webcast at 4:30 p.m. ET or 1:30 p.m. PST, which will be open to the public. During the conference call, the Company will review the financial results and discuss other business matters, followed by a Q&A period.

Date: Thursday, November 14, 2024

Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)

Dial-in information: Please register in advance of the call here.

Webcast (listen-only): To listen to the webcast use the following LINK.

A replay of the webcast will be available via the Investors section of the GCT website at investors.gctsemi.com.

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About GCT Semiconductor Holding, Inc.

GCT is a leading fabless designer and supplier of advanced 5G and 4G LTE semiconductor solutions. GCT’s market-proven solutions have enabled fast and reliable 4G LTE connectivity to numerous commercial devices such as CPEs, mobile hotspots, routers, M2M applications, smartphones, etc., for the world’s top wireless carriers. GCT’s system-on-chip solutions integrate radio frequency, baseband modem and digital signal processing functions, therefore offering complete 4G and 5G platform solutions with small form factors, low power consumption, high performance, high reliability, and cost-effectiveness. For more information, visit www.gctsemi.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1955. These forward-looking statements include, without limitation, the Company’s expectations with respect to its business operations; the projected financial results for Q3 2024 and 5G development; the anticipated growth of 5G markets and opportunities; the benefits of development agreements with partners; the ability for the Company to improve financial performance; the ability of the Company to raise sufficient capital to fund its operations; the ability of the Company’s technology and products to address new markets and meet customer demands; the execution of go-to-market strategies; and the anticipated size of addressable markets by the Company’s products. Words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the Company's control and are difficult to predict. Factors that may cause actual future events to differ materially from the expected results, include, but are not limited to: the ability of the Company to develop its 5G products and generate revenue; the ability to enter into and meet the obligations under partnership and collaboration agreements; the ability of the Company to grow and manage growth profitability and retain its key employees; the Company's financial and business performance, including the Company's financial projections and business metrics; changes in the Company's strategy, future operations, financial position, estimated revenues and losses, forecasts, projected costs, prospects and plans; the Company's inability to anticipate the future market demands and future needs of its customers; the impact of component shortages, suppliers' lack of production capacity, natural disasters or pandemics on the Company's sourcing operations and supply chain; the Company's future capital requirements and sources and uses of cash; the ability to implement business plans, forecasts, and other expectations, including the growth of the 5G market; the risk that the Company may not be able to repay its debt; the risk of economic downturns that affects the Company's business operation and financial performance; the risk that the Company may not be able to develop and design its products acceptable to its customers; actual or potential conflicts of interest of the Company's management with its public stockholders; and other risks and uncertainties indicated from time to time in Company’s filings with the SEC, including registration statements on Form S-1 and quarterly reports on Form 10-Q, and those disclosures under the "Risk Factors" section therein. The foregoing list of factors is not exhaustive. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

Contacts:

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GCT Semiconductor Holding, Inc.

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except per share data)

 

		September 30, 2024				December 31, 2023
Assets
Current assets:
Cash and cash equivalents		$	1,812			$	258
Accounts receivable, net			6,441				4,920
Inventory			3,110				1,486
Contract assets			5,098				3,439
Prepaid expenses and other current assets			3,545				2,906
Total current assets			20,006				13,009
Property and equipment, net			641				772
Operating lease right-of-use assets			1,065				1,521
Intangibles, net			99				245
Other assets			810				881
Total assets		$	22,621			$	16,428
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable		$	1,070			$	17,814
Contract liabilities			511				48
Accrued and other current liabilities			22,365				23,956
Common stock forward liability			451				—
Borrowings			32,819				44,509
Convertible promissory notes, current			4,008				27,794
Operating lease liabilities, current			724				680
Total current liabilities			61,948				114,801
Convertible promissory notes, net of current			4,830				6,239
Net defined benefit liabilities			8,052				7,689
Long-term operating lease liabilities			358				850
Income taxes payable			2,245				2,178
Warrant liabilities			3,197				—
Other liabilities			242				108
Total liabilities			80,872				131,865
Commitments and contingencies
Stockholders’ deficit:
Preferred stock, par value $0.0001 per share; 40,000 and 82,352 shares authorized    as of September 30, 2024 and December 31, 2023, respectively; no shares issued    and outstanding as of September 30, 2024 and December 31, 2023			—				—
Common stock, par value $0.0001 per share; 400,000 and 200,000 shares    authorized as of September 30, 2024 and December 31, 2023, respectively;    47,611 and 24,166 shares issued and outstanding as of September 30, 2024 and    December 31, 2023, respectively(1)			5				3
Additional paid-in capital(1)			499,751				435,752
Accumulated other comprehensive loss			(946	)			(1,538	)
Accumulated deficit			(557,061	)			(549,654	)
Total stockholders’ deficit			(58,251	)			(115,437	)
Total liabilities and stockholders’ deficit		$	22,621			$	16,428

 

 

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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,
		2024				2023				2024				2023
Net revenues:
Product		$	1,715			$	4,026			$	4,111			$	8,667
Service			895				450				3,232				3,172
Total net revenues			2,610				4,476				7,343				11,839
Cost of net revenues:
Product			710				3,985				1,522				5,954
Service			274				(36	)			1,321				1,006
Total cost of net revenues			984				3,949				2,843				6,960
Gross profit			1,626				527				4,500				4,879
Operating expenses:
Research and development			4,210				2,367				13,895				7,254
Sales and marketing			949				744				2,921				2,337
General and administrative			2,379				1,433				8,075				5,537
Gain on extinguishment of liability			—				—				(14,636	)			—
Total operating expenses			7,538				4,544				10,255				15,128
Loss from operations			(5,912	)			(4,017	)			(5,755	)			(10,249	)
Interest expense			(667	)			(1,220	)			(3,509	)			(4,878	)
Other income (expenses), net			(481	)			929				2,044				2,946
Loss before provision for income taxes			(7,060	)			(4,308	)			(7,220	)			(12,181	)
Provision for income taxes			61				38				187				125
Net loss		$	(7,121	)		$	(4,346	)		$	(7,407	)		$	(12,306	)
Net loss per common share(1):
Basic and diluted		$	(0.16	)		$	(0.18	)		$	(0.19	)		$	(0.51	)
Weighted-average common shares outstanding(1):
Basic and diluted			45,645				24,055				38,418				23,934

 

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v3.24.3

Document and Entity Information	Nov. 14, 2024
Entity Listings [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 14, 2024
Entity File Number	001-41013
Entity Registrant Name	GCT Semiconductor Holding, Inc.
Entity Central Index Key	0001851961
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	86-2171699
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 Emerging Growth Company	true
Entity Ex Transition Period	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Common Stock [Member]
Entity Listings [Line Items]
Title of 12(g) Security	Common Stock, par value $0.0001 per share
Trading Symbol	GCTS
Security Exchange Name	NYSE
Warrants Each Whole Warrant Exercisable For One Share Of Common Stock For 11.50 Per Share [Member]
Entity Listings [Line Items]
Title of 12(g) Security	Warrants, each whole warrant exercisable for one share of Common Stock for $11.50 per share
Trading Symbol	GCTW
Security Exchange Name	NYSE

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