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What changed in GCT Semiconductor Holding, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of GCT Semiconductor Holding, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+544 added−444 removedSource: 10-K (2026-03-25) vs 10-K (2025-03-25)

Top changes in GCT Semiconductor Holding, Inc.'s 2025 10-K

544 paragraphs added · 444 removed · 365 edited across 3 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

88 edited+25 added−21 removed241 unchanged
Biggest changeRisks Relating to Our Industry and Regulatory Environment The semiconductor and communications industries are cyclical and have historically experienced significant fluctuations with prolonged downturns, which could impact our operating results, financial condition and cash flows. The semiconductor industry has historically exhibited a pattern of cyclicality, which at various times has included significant downturns in customer demand.
Biggest changeThere is no guarantee that shares of our Common Stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares. 23 Table of Contents Risks Relating to Our Industry and Regulatory Environment The semiconductor and communications industries are cyclical and have historically experienced significant fluctuations, including prolonged downturns and periods of supply imbalance, which could impact our operating results, financial condition and cash flows.
The foundries may allocate capacity to the production of other companies’ products while reducing deliveries to us on short or without notice. In particular, our foundries may reallocate capacity to other customers that are larger and better financed than us or that have long-term agreements with our foundry during a period of high demand.
The foundries may allocate capacity to the production of other companies’ products while reducing deliveries to us on short notice or without notice. In particular, our foundries may reallocate capacity to other customers that are larger and better financed than us or that have long-term agreements with our foundry during a period of high demand.
These factors include: • changes in financial estimates, including our ability to meet our future revenue and operating profit or loss projections; • changes in earnings estimates or recommendations by securities analysts; • fluctuations in our operating results or those of our customers, operators or other semiconductor companies; • commercial deployment and upgrade of 4G and 5G wireless networks; • economic developments in the semiconductor or mobile and wireless industries as a whole; • general economic conditions and slow or negative growth of related markets; • announcements by us or our customers or competitors of acquisitions, new products, significant contracts or orders, commercial relationships or capital commitments; • announcements regarding intellectual property litigation involving us or our competitors; • changes in the financial estimates of our competitors; • our ability to develop and market new and enhanced products on a timely basis; • changes in the pricing and costs of manufacturing; • commencement of or our involvement in litigation; • any major change in our board of directors (the “Board”) or management; • political or social conditions in the markets where we sell our products; and • changes in governmental regulations. 23 Table of Contents In addition, the stock market in general, and the market for semiconductor and other technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.
These factors include: • changes in financial estimates, including our ability to meet our future revenue and operating profit or loss projections; • changes in earnings estimates or recommendations by securities analysts; • fluctuations in our operating results or those of our customers, operators or other semiconductor companies; • commercial deployment and upgrade of 4G and 5G wireless networks; • economic developments in the semiconductor or mobile and wireless industries as a whole; • general economic conditions and slow or negative growth of related markets; • announcements by us or our customers or competitors of acquisitions, new products, significant contracts or orders, commercial relationships or capital commitments; • announcements regarding intellectual property litigation involving us or our competitors; • changes in the financial estimates of our competitors; • our ability to develop and market new and enhanced products on a timely basis; • changes in the pricing and costs of manufacturing; • commencement of or our involvement in litigation; • any major change in our board of directors (the “Board”) or management; • political or social conditions in the markets where we sell our products; and • changes in governmental regulations. 22 Table of Contents In addition, the stock market in general, and the market for semiconductor and other technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.
Our ability to compete will depend on a number of factors, including: • our ability to anticipate market and technology trends and successfully develop products that meet market needs; • our success in identifying and penetrating new markets, applications and customers; • our ability to accurately understand the price points and performance metrics of competing products in the marketplace; • our products’ performance and cost-effectiveness relative to that of competitors’ products; • our ability to develop and maintain relationships with wireless operators, base station suppliers and OEM/ODM customers; • our ability to expand international operations in a timely and cost-efficient manner; 15 Table of Contents • our ability to secure sufficient manufacturing capacity and deliver products in large volume on a timely basis at competitive prices; • our ability to participate in or influence the process for setting wireless industry standards; • our ability to conform to industry standards on a timely basis, while developing new and proprietary technologies to offer products and features previously not available in the 4G and 5G markets; • our ability to recruit design and application engineers with expertise in wireless broadband communications technologies and sales and marketing personnel; and • our ability to obtain third-party licenses for supporting technologies to develop new products.
Our ability to compete will depend on a number of factors, including: • our ability to anticipate market and technology trends and successfully develop products that meet market needs; • our success in identifying and penetrating new markets, applications and customers; • our ability to accurately understand the price points and performance metrics of competing products in the marketplace; • our products’ performance and cost-effectiveness relative to that of competitors’ products; • our ability to develop and maintain relationships with wireless operators, base station suppliers and OEM/ODM customers; 14 Table of Contents • our ability to expand international operations in a timely and cost-efficient manner; • our ability to secure sufficient manufacturing capacity and deliver products in large volume on a timely basis at competitive prices; • our ability to participate in or influence the process for setting wireless industry standards; • our ability to conform to industry standards on a timely basis, while developing new and proprietary technologies to offer products and features previously not available in the 4G and 5G markets; • our ability to recruit design and application engineers with expertise in wireless broadband communications technologies and sales and marketing personnel; and • our ability to obtain third-party licenses for supporting technologies to develop new products.
As a result of our international focus, we are subject to a number of risks, including: • increased complexity and costs of managing international operations; • longer and more difficult collection of receivables; • difficulties in enforcing contracts generally; • limited protection of our intellectual property and other assets; • restrictions on our ability to export our technology from the U.S. and other countries; • compliance with local laws and regulations and unanticipated changes in local laws and regulations, including tax laws and regulations; • complexities in the accounting and financial management of our operations; • trade and foreign exchange restrictions and higher tariffs; • travel restrictions; • timing and availability of import and export licenses and other governmental approvals, permits and licenses, including export classification requirements; • foreign currency exchange fluctuations relating to our international operating activities; • transportation delays and limited local infrastructure and disruptions, such as large scale outages or interruptions of service from utilities or telecommunications providers; • difficulties in staffing international operations; • adverse changes in economic and political conditions resulting from political instability, acts of terrorism, armed conflict, social unrest, and other circumstances impacting countries in which our or our customers operate, including as a result of any escalation of the current tensions between Taiwan and China; • the risk of government financed competition; • local business and cultural factors that differ from our normal standards and practices; • differing employment practices and labor issues; and • regional health issues and natural disasters.
As a result of our international focus, we are subject to a number of risks, including: • increased complexity and costs of managing international operations; • longer and more difficult collection of receivables; • difficulties in enforcing contracts generally; • limited protection of our intellectual property and other assets; • restrictions on our ability to export our technology from the U.S. and other countries; • compliance with local laws and regulations and unanticipated changes in local laws and regulations, including tax laws and regulations; • complexities in the accounting and financial management of our operations; • trade and foreign exchange restrictions and higher tariffs; 27 Table of Contents • travel restrictions; • timing and availability of import and export licenses and other governmental approvals, permits and licenses, including export classification requirements; • foreign currency exchange fluctuations relating to our international operating activities; • transportation delays and limited local infrastructure and disruptions, such as large scale outages or interruptions of service from utilities or telecommunications providers; • difficulties in staffing international operations; • adverse changes in economic and political conditions resulting from political instability, acts of terrorism, armed conflict, social unrest, and other circumstances impacting countries in which our or our customers operate, including as a result of any escalation of the current tensions between Taiwan and China; • the risk of government financed competition; • local business and cultural factors that differ from our normal standards and practices; • differing employment practices and labor issues; and • regional health issues and natural disasters.
We expect capital outlays and operating expenditures to increase over the next several years as we expand our operations and product development activities. We may be unable to raise additional capital on favorable terms, if at all, which would harm our ability to fund our operations and may force us to cease operation.
We expect capital outlays and operating expenditures to increase over the next several years as we expand our operations and product development activities. We may be unable to raise additional capital on favorable terms, if at all, which would harm our ability to fund our operations and may force us to cease operations.
If the rate of deployment of new networks by wireless carriers is slower than we expect, this will reduce the sales of our products and could cause original equipment manufacturers (“OEMs”) and original design manufacturers (“ODMs”) to hold excess inventory. This would harm our revenues and financial results.
If the rate of deployment of new networks by wireless carriers is slower than we expect, this could reduce sales of our products and could cause original equipment manufacturers (“OEMs”) and original design manufacturers (“ODMs”) to hold excess inventory. This would harm our revenues and financial results.
Accordingly, if we do not generate sufficient level of revenue or become profitable, we will be required to seek other sources of funding, such as issuance of equity or debt securities to raise capital. Any such financings may not be accessible on acceptable terms, if at all.
Accordingly, if we do not generate a sufficient level of revenue or become profitable, we will be required to seek other sources of funding, such as issuance of equity or debt securities to raise capital. Any such financings may not be accessible on acceptable terms, if at all.
Changes in government trade policies, including the imposition of tariffs and export restrictions, have limited and could continue to limit our ability to sell or provide our products and other items to certain customers and suppliers, which may materially adversely affect our sales and results of operations.
Changes in government trade policies, including the imposition of tariffs, sanctions and export restrictions, have limited and could continue to limit our ability to sell or provide our products and other items to certain customers and suppliers, which may materially adversely affect our sales and results of operations.
Under these agreements, we have agreed to design, develop and collaborate with each respective customers to test, qualify and commercialize our chipsets and also to help these customers commercialize products that use our chipsets, and these agreements impose various obligations on us to deliver results and meet certain product development milestones.
Under these agreements, we have agreed to design, develop and collaborate with each respective customer to test, qualify and commercialize our chipsets and also to help these customers commercialize products that use our chipsets, and these agreements impose various obligations on us to deliver results and meet certain product development milestones.
While we believe we have complied with our obligations under the various applicable licenses for open source software, in the event the copyright holder of any open source software were to successfully establish in court that we have not complied with the terms of a license for a particular work, we could be required to release the source code of that work to the public and/or stop distribution of that work, which may adversely affect our business, financial condition and results of operations. 22 Table of Contents We may not be able to obtain additional patents and the legal protection afforded by any additional patents may not adequately cover the full scope of our business or permit us to gain or keep competitive advantage.
While we believe we have complied with our obligations under the various applicable licenses for open source software, in the event the copyright holder of any open source software were to successfully establish in court that we have not complied with the terms of a license for a particular work, we could be required to release the source code of that work to the public and/or stop distribution of that work, which may adversely affect our business, financial condition and results of operations. 21 Table of Contents We may not be able to obtain additional patents and the legal protection afforded by any additional patents may not adequately cover the full scope of our business or permit us to gain or keep competitive advantage.
In addition, we rely substantially on investors, banks, lenders and partners in South Korea to provide loans and fundings to our operations, and our ability to secure such funding may be affected by the economic, banking and capital market conditions and trends in South Korea.
In addition, we rely substantially on investors, banks, lenders and partners in South Korea to provide loans and fundings for our operations, and our ability to secure such funding may be affected by the economic, banking and capital market conditions and trends in South Korea.
We have invested substantial time and resources in developing products that support the 5G wireless communications markets, and we have entered into various agreements and arrangements with potential customers and wireless operators to develop wireless communications products to serve the growing needs of this market.
We have invested substantial time and resources in developing products that support the 5G wireless communications market, and we have entered into various agreements and arrangements with potential customers and wireless operators to develop wireless communications products to serve the growing needs of this market.
Our share price may be volatile and, in the past, companies that have experienced volatility in the market price of our stock have been subject to securities litigation, including class action litigation. We may be the target of this type of litigation in the future.
Our share price may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities litigation, including class action litigation. We may be the target of this type of litigation in the future.
The loss of any key employees or the inability to attract, retain or motivate qualified personnel, including engineers and sales and marketing personnel, could delay the development and introduction of and harm our ability to sell our semiconductor solutions.
The loss of any key employees or the inability to attract, retain or motivate qualified personnel, including engineers and sales and marketing personnel, could delay the development and introduction of our products and harm our ability to sell our semiconductor solutions.
In addition, if the 5G networks are deployed to a lesser extent or more slowly than we currently anticipate, or if other competing semiconductor solutions achieve greater market acceptance or operators do not migrate to 5G as expected, we may not realize the expected benefits from this investment, which will have an adverse effect on our business, financial condition and results of operations.
In addition, if 5G networks are deployed to a lesser extent or more slowly than we currently anticipate, or if other competing semiconductor solutions achieve greater market acceptance or if operators do not migrate to 5G as expected, we may not realize the expected benefits from this investment, which could have an adverse effect on our business, financial condition and results of operations.
Any adverse determination in litigation or any amounts paid to settle any such actual or threatened litigation could require that us make significant payments and/or could also subject us to significant liabilities.
Any adverse determination in litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments and/or could also subject us to significant liabilities.
Among other things, it requires the following: establishing, evaluating and maintaining a system of internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the PCAOB; the preparation and distribution of periodic reports in compliance with our obligations under the federal securities laws; the establishment of internal policies, principally those relating to disclosure control and 31 Table of Contents procedures and corporate governance; instituting a more comprehensive compliance function; and the involvement to a greater degree our outside legal counsel and accountants in the above activities.
Among other things, it requires the following: establishing, evaluating and maintaining a system of internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the PCAOB; the preparation and distribution of periodic reports in compliance with our obligations under the federal securities laws; the establishment of internal policies, principally those relating to disclosure control and procedures and corporate governance; instituting a more comprehensive compliance function; and the involvement to a greater degree our outside legal counsel and accountants in the above activities.
We depend on the commercial deployment of 4th generation (“4G”) long term evolution (“LTE”) and 5G communications equipment, products and services to grow our business, and our business may be harmed if wireless carriers delay in the adoption of 5G standards, or if they deploy technologies that are not supported by our solutions.
We depend on the commercial deployment of 4th generation (“4G”) long term evolution (“LTE”) and 5G communications equipment, products and services to grow our business, and our business may be harmed if wireless carriers delay adoption of 5G standards, or deploy technologies that are not supported by our solutions.
FWA provides wireless coverage where there is no fixed line or a poor fixed line service, including rural areas, where broadband access is limited.
FWA provides wireless coverage where there is no fixed line or where fixed line service is poor, including rural areas, where broadband access is limited.
For the last several years, we have dedicated a large portion of our operating expenses to our development of 5G products, which we do not expect will result in significant product revenues before the second half of 2025.
For the last several years, we have dedicated a large portion of our operating expenses to our development of 5G products, which we do not expect will result in significant product revenues before the second half of 2026.
Specifically, regulatory and government agencies in various jurisdictions, 27 Table of Contents including the U.S., the EU, South Korea and Japan have implemented rules and regulations that limit Chinese companies from selling and distributing certain products due to concerns that China may gain access to sensitive and advanced technologies for the development and manufacturing of next-generation semiconductor products.
Specifically, regulatory and government agencies in various jurisdictions, including the U.S., the EU, South Korea and Japan have implemented rules and regulations that limit Chinese companies from selling and distributing certain products due to concerns that China may gain access to sensitive and advanced technologies for the development and manufacturing of next-generation semiconductor products.
If we are unable to continue as a going concern, our stockholders may lose some or all of their investment in the Company. 19 Table of Contents We have significant ongoing capital requirements that could have a material effect on our business and financial condition if we are unable to generate sufficient cash from operations or unable to raise capital on favorable terms.
If we are unable to continue as a going concern, our stockholders may lose some or all of their investment in the Company. We have significant ongoing capital requirements that could have a material effect on our business and financial condition if we are unable to generate sufficient cash from operations or unable to raise capital on favorable terms.
In addition, as new processes 18 Table of Contents become more prevalent, we expect to continue to integrate greater levels of functionality, as well as end customer and third-party intellectual property, into our products. However, we may not be able to achieve higher levels of design integration or deliver new integrated products on a timely basis.
In addition, as new processes become more prevalent, we expect to continue to integrate greater levels of functionality, as well as end customer and third-party intellectual property, into our products. However, we may not be able to achieve higher levels of design integration or deliver new integrated products on a timely basis.
Our business could be adversely affected by epidemics or outbreaks such as COVID-19, avian flu or H1N1 flu, also known as swine flu. An outbreak of respiratory virus in the human population, or another similar health crisis, could adversely affect the economies and 29 Table of Contents financial markets of many countries, particularly in Asia.
Our business could be adversely affected by epidemics or outbreaks such as COVID-19, avian flu or H1N1 flu, also known as swine flu. An outbreak of respiratory virus in the human population, or another similar health crisis, could adversely affect the economies and financial markets of many countries, particularly in Asia.
These ongoing efforts require us from time to time to modify the manufacturing processes for our products and to redesign some products, which in turn may result in delays in product deliveries. We periodically evaluate the benefits of migrating to new process technologies to reduce cost and improve performance.
These ongoing efforts require us from time to time to modify the manufacturing processes for our products and to redesign some products, which in turn may result in delays in product deliveries. We periodically evaluate the benefits of migrating to new 17 Table of Contents process technologies to reduce cost and improve performance.
As a result, you should not rely on period-to-period comparisons of our operating results as an indication of our future performance. In future periods, our revenue and results of operations may be below the expectations of analysts and investors, which could cause the market price of our Common Stock to decline.
As a result, you should not rely on period-to-period comparisons of our operating results as an indication of our future performance. In future 26 Table of Contents periods, our revenue and results of operations may be below the expectations of analysts and investors, which could cause the market price of our Common Stock to decline.
A “material weakness” is a significant deficiency, or a combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Our business and operations could suffer in the event of security breaches.
A “material weakness” is a significant deficiency, or a combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. 30 Table of Contents Our business and operations could suffer in the event of security breaches.
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.
If deployments of the Cat M or Cat NB standards are delayed or if competing standards for IoT 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.
Our failure to do so could have an adverse effect on our financial condition and results of operations. Changes in current laws or the imposition of new laws regulating the wireless networks and radio frequency emission could impede the sale of our products or otherwise harm our business.
Our failure to do so could have an adverse effect on our financial condition and results of operations. 24 Table of Contents Changes in current laws or the imposition of new laws regulating the wireless networks and radio frequency emission could impede the sale of our products or otherwise harm our business.
Because none of our third-party foundries has provided contractual assurances to us that ensure adequate capacity will be available to us to meet future 17 Table of Contents demand for our products, foundry capacity may not be available when we need it or at reasonable prices.
Because none of our third-party foundries has provided contractual assurances to us that ensure adequate capacity will be available to us to meet future demand for our products, foundry capacity may not be available when we need it or at reasonable prices.
In addition, given our current available cash and the need to secure additional funding, the report of our independent registered accounting firm included in this Form 10-K contains a paragraph expressing substantial doubt as to our ability to continue as a going concern.
In addition, given our current available cash and the need to secure 18 Table of Contents additional funding, the report of our independent registered accounting firm included in this Form 10-K contains a paragraph expressing substantial doubt as to our ability to continue as a going concern.
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 25 Table of Contents wireless network operators.
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.
Our Charter provide, that: unless we consents in writing to the selection of an alternative forum, (i) (a) any derivative action or proceeding brought on behalf of us, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, 30 Table of Contents other employee or stockholder of ours to our or our stockholders, (c) any action asserting a claim against us or our current or directors, officers, employees, or stockholders arising pursuant to any provision of DGCL, the Charter or Bylaws (as either may be amended or restated) or as to which DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (d) any action asserting a claim against us or our current or former directors, officers, employees, or stockholders governed by the internal affairs doctrine of the law of the State of Delaware shall, to the fullest extent permitted by law, be brought by any stockholder (including a beneficial owner) exclusively in the Court of Chancery of the State of Delaware or, solely if such court does not have subject matter jurisdiction thereof, in the United States District Court for the District of Delaware; and (ii) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Our Charter and Bylaws provide that: unless we consent in writing to the selection of an alternative forum, (i) (a) any derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Company to the Company or its stockholders, (c) any action asserting a claim against the Company or its current or former directors, officers, employees, or stockholders arising pursuant to any provision of the DGCL, the Charter or Bylaws (as either may be amended or restated) or as to which DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (d) any action asserting a claim against the Company or our current or former directors, officers, employees, or stockholders governed by the internal affairs doctrine of the law of the State of Delaware shall, to the fullest extent permitted by law, be brought by any stockholder (including a beneficial owner) exclusively in the Court of Chancery of the State of Delaware or, solely if such court does not have subject matter jurisdiction thereof, in the United States District Court for the District of Delaware; and (ii) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
These arrangements are motivated primarily by the opportunity to engage customers and at the same time, jointly progress our own research and development activities with the associated development compensation. During the years ended December 31, 2024 and 2023, we recognized $4.4 million and $5.1 million, respectively, related to these NRE contracts and as a service revenue.
These arrangements are motivated primarily by the opportunity to engage customers and at the same time, jointly progress our own research and development activities with the associated development compensation. During the years ended December 31, 2025 and 2024, we recognized $1.7 million and $4.4 million, respectively, related to these NRE contracts and as a service revenue.
However, the FWA market and related demand may be impacted by various factors, including the growth of fixed line services (especially fiber optic lines), the costs and benefits of deploying FWA infrastructure and regulatory requirements for implementing FWA solutions. Each of these factors may adversely affect our ability to 13 Table of Contents sell products into such market.
However, the FWA market and related demand may be impacted by various factors, including the growth of fixed line services (especially fiber optic lines), the costs and benefits of deploying FWA infrastructure and regulatory requirements for implementing FWA solutions. Each of these factors may adversely affect our ability to sell products into such markets.
However, we may encounter difficulties and challenges in meeting our obligations under these development agreements and our anticipated timeline for product shipments, such as delays in testing and qualifying our products, technical issues in the development and manufacturing products, lack of resources and funding to support the development efforts, the rise of competitive technologies and products that cause the customers or partners to shift focus and attention elsewhere, lack of funding to support development activities and lack of cooperation by the customers or partners.
However, we may encounter difficulties and challenges in meeting our obligations under these development agreements and our anticipated timeline and volumes for product shipments, such as delays in testing and qualifying our products, technical issues in the development and manufacturing of our products, lack of resources and funding to support the development and commercialization efforts, the rise of competitive technologies and products that cause the customers or partners to shift focus and attention elsewhere, lack of funding to support development activities, lack of cooperation by the customers or partners and lack of success of our customers’ products in the marketplace.
As we continue to grow our business, we intend to negotiate long-term supply agreements with our main foundries in order to secure capacity commitment.
As we continue to grow our business, we intend to negotiate long-term supply agreements with our main foundries in order to secure capacity commitments.
If we do not successfully defend or settle an intellectual property 21 Table of Contents claim, we could be liable for significant monetary damages and could be prohibited from continuing to use certain technology, business methods, content or brands, and from making, selling or incorporating certain components or intellectual property into the products and services we offer.
If we do not successfully defend or settle an intellectual property claim, we could be liable for significant monetary damages and could be prohibited from continuing to use certain technology, business methods, content or brands, and from making, selling or incorporating certain components or intellectual property into the products and services we offer.
For example, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
For example, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations 29 Table of Contents thereunder.
Furthermore, the growth of M2M applications depends on various factors that drive demand, including decisions by businesses, institutions, and regulatory authorities to implement and permit establishment of infrastructures or systems that utilize M2M wireless communications. These and other factors could adversely affect our business operations and financial conditions.
Furthermore, the growth of M2M applications depends on various factors that drive demand, including decisions by businesses, institutions, and regulatory authorities to implement and permit the establishment of infrastructure or systems that utilize M2M wireless communications. These and other factors could adversely affect our business operations and financial condition.
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.
The worldwide commercial deployment and adoption of narrow band LTE variants, Cat M and Cat NB, are expected to expand further the markets for IoT devices.
There is no assurance that our manufacturing suppliers will be able to deliver raw materials, goods and services to us at reasonable prices and the required volume. These and other related factors could impair our ability to meet our customers’ needs and have an adverse effect on our operating results.
There is no assurance that our manufacturing suppliers will be able to deliver raw materials, goods and services to us at reasonable prices and the required volume. These and other related factors could impair our ability to meet our customers’ needs and have an adverse effect on our operating results, including our ability to reduce net loss and achieve profitability.
From time to time we may be subject to claims of infringement, misappropriation or other violation of patents or other intellectual property rights and related litigation.
From time to time we may be subject to claims of infringement, misappropriation or other violation of patents or other intellectual property rights and related 20 Table of Contents litigation.
The ability of our foundry vendors to provide us with semiconductor products is limited by available capacity and existing obligations.
The ability of our 16 Table of Contents foundry vendors to provide us with semiconductor products is limited by available capacity and existing obligations.
General Risks Related to the Company The loss of any of our key personnel could seriously harm our business, and our failure to attract or retain specialized technical, management or sales and marketing talent could impair our ability to grow our business.
The loss of any of our key personnel could seriously harm our business, and our failure to attract or retain specialized technical, management or sales and marketing talent could impair our ability to grow our business.
Our products focus on certain segments of 5G wireless markets, including fixed wireless access (“FWA”), mobile broadband and machine-to-machine (“M2M”) applications, and if these markets do not develop or grow as quickly as expected, or if other products or technologies displace or reduce the demands of such market segments, our business operations and financial conditions will be negatively impacted.
Our products target primarily certain segments of the wireless markets, including fixed wireless access (“FWA”), mobile broadband and machine-to-machine (“M2M”) applications, and if these markets do not develop or grow as quickly as expected, or if other products or technologies displace or reduce the demands of such market segments, our business operations and financial condition could be negatively impacted.
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. 14 Table of Contents 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.
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 IoT 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 13 Table of Contents • the ability to obtain licenses to use third-party technology to support the development of our products.
Similarly, the mobile broadband market can be affected by the demand for mobile devices, such as smartphones, wireless modems, and portable wireless devices, and a slowing demand for these applications may reduce our ability to sell our products.
Similarly, the mobile broadband market can be affected by demand for mobile devices, such as smartphones, wireless modems, and portable wireless devices, and a slowdown in demand for these applications may reduce our ability 12 Table of Contents to sell our products.
Attempts by others to gain unauthorized access to our information technology systems are becoming more sophisticated. These attempts, which might be related to industrial or other espionage, include covertly introducing malware to our computers and networks and impersonating authorized users, among others.
Attempts by others to gain unauthorized access to our information technology systems are becoming more sophisticated and more frequent. These attempts, which might be related to industrial or other espionage, include covertly introducing malware to our computers and networks and impersonating authorized users, among others. These attempts may also include phishing, social engineering, credential theft, and ransomware attacks.
If the 5th generation (“5G”) market does not develop or develops more slowly than expected, or if we fail to accurately predict market requirements or market demand for 5G solutions, our financial performance will be adversely affected.
If the 5G market develops more slowly than expected, or if we fail to accurately predict market requirements or demand for our 5G solutions, our financial performance could be adversely affected.
In addition, while we were able to negotiate with our lenders of commercial loans to extend the maturity dates or modify payment schedules, there is no guarantee that we will be successful in negotiating such terms in the future, and failure to do so may result in defaults under the loans, which will have an adverse effect on our financial conditions and results of operations. 20 Table of Contents Risks Relating to Our Intellectual Property Our failure to protect our intellectual property rights adequately could impair our ability to compete effectively or to defend ourselves from litigation.
In addition, while we were able to negotiate with our lenders of commercial loans to extend the maturity dates or modify payment schedules, there is no 19 Table of Contents guarantee that we will be successful in negotiating such terms in the future, and failure to do so may result in defaults under the loans, which will have an adverse effect on our financial conditions and results of operations.
If the economy declines as a result of the recent economic, political and social turmoil, including any potential default or downgrade in the rating of United States debt obligations, or if there are further terrorist attacks in the United States or elsewhere, we may experience decreases in the demand for our products and services, which may harm our operating results. 26 Table of Contents Rapidly changing standards could make our semiconductor solutions obsolete, which would cause our operating results to suffer.
If the economy declines as a result of the recent economic, political and social turmoil, including any potential default or downgrade in the rating of United States debt obligations, or if there are further terrorist attacks in the United States or elsewhere, we may experience decreases in the demand for our products and services, which may harm our operating results.
We expect to incur significant expenses related to the research and development of our products and expansion of our business. Furthermore, the rapidly evolving wireless communications markets in which we sell our products, as well as other factors, make it difficult for us to forecast quarterly and annual revenue accurately.
Furthermore, the rapidly evolving wireless communications markets in which we sell our products, as well as other factors, make it difficult for us to forecast quarterly and annual revenue accurately.
As of December 31, 2024, we have outstanding convertible promissory notes and borrowings with a total principal amount of $42.6 million, of which $37.6 million is contractually due within 12 months from the reporting date. We may also incur substantial additional indebtedness.
As of December 31, 2025, we have borrowings with a total principal amount of $62.6 million, of which $56.6 million is contractually due within 12 months from the reporting date. We may also incur substantial additional indebtedness.
In addition, we may incur significant costs to respond to or defend against adverse government proceedings, and these actions may divert our management’s attention and resources. Enforcement actions and sanctions could harm our business, operating results and financial condition.
In addition, we may incur significant costs to respond to or defend against adverse government proceedings, and these actions may divert our management’s attention and resources.
As a public company, we are required to comply with additional laws and regulations, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act, and related rules of the SEC and requirements of the NYSE. We were not required to comply with these laws and requirements as a private company.
As a public company, we are required to comply with additional laws and regulations, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act, and related rules of the SEC and requirements of the NYSE. Complying with these laws and regulations requires the time and attention of our Board and management and increases our expenses.
It is possible that any of our major customers could terminate its purchasing arrangements with us or significantly reduce or delay the amount of our products that it orders, purchase products from our competitors or develop its own products internally.
Additionally, consolidation among OEMs in some of our markets could result in an increased concentration in our sources of revenue. It is possible that any of our major customers could terminate its purchasing arrangements with us or significantly reduce or delay the amount of our products that it orders, purchase products from our competitors or develop its own products internally.
As a public company, we will be required to report, among other things, control deficiencies that constitute a “material weakness” or changes in internal controls that materially affect, or are reasonably likely to materially affect, internal control over financial reporting.
We are required to disclose control deficiencies that constitute a “material weakness” or changes in internal controls that materially affect, or are reasonably likely to materially affect, internal control over financial reporting.
Many U.S.-based companies have encountered substantial intellectual property infringement in foreign countries, including countries where we sell products. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. The legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and evolving.
Even if foreign patents are granted, effective enforcement in foreign countries may not be available. The legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and evolving.
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 constant and rapid technological change, quick product obsolescence, price erosion, evolving standards, short product life cycles and wide fluctuations in product supply and demand.
Such downturns result from a variety of market forces including constant and rapid technological change, quick product obsolescence, price erosion, evolving standards, short product life cycles and wide fluctuations in product supply and demand.
Risks Related to Our Business We may encounter difficulties or challenges in satisfying our obligations under our 5G development agreements and may not be able to meet the anticipated timeline for commencing shipment of 5G chipsets, which may adversely affect our ability to generate revenue.
Risks Related to Our Business We may encounter difficulties or challenges in satisfying our obligations under our 5G development agreements and in scaling and sustaining commercialization of our 5G chipsets, which may adversely affect our ability to generate revenue.
Governments and foreign regulators may adopt standards with which our semiconductor solutions are not compatible, favor alternative technologies or adopt stringent regulations that would impair or make commercially unviable the deployment of our semiconductor solutions. In addition, products that implement existing standards may be challenged as infringing upon third-party intellectual property rights and may become obsolete.
Governments and foreign regulators may adopt standards with which our semiconductor solutions are not compatible, favor alternative technologies or adopt stringent regulations that would impair or make commercially unviable the deployment of our semiconductor solutions.
We are required to comply with Section 404 in our annual report for the year ending December 31, 2024. If we fail to comply with the requirements of Section 404 in a timely manner, we might be subject to sanctions or investigation by regulatory agencies such as the SEC.
We are required to provide management’s assessment of the effectiveness of our internal control over financial reporting under Section 404(a). If we fail to comply with the requirements of Section 404 in a timely manner, we might be subject to sanctions or investigation by regulatory agencies such as the SEC.
As a result, our quarterly operating results are difficult to predict, even in the near term, which may result in our revenue and results of operations being below the expectations of analysts and investors, and which could cause the market price of the stock to decline. 28 Table of Contents Our business depends on international customers, suppliers and operations in Asia, which subjects us to additional risks, including increased complexity and costs of managing international operations and geopolitical instability.
As a result, our quarterly operating results are difficult to predict, even in the near term, which may result in our revenue and results of operations being below the expectations of analysts and investors, and which could cause the market price of the stock to decline.
Additionally, the risks and uncertainties described in this Annual Report on Form 10-K or in any document incorporated by reference herein or therein are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may become material and adversely affect our business.
Additionally, the risks and uncertainties described in this Annual Report on Form 10-K (the “Annual Report”) or in any document incorporated by reference herein or therein are not the only risks and uncertainties that we face.
We rely on, and expect to continue to rely on, customers and suppliers located primarily in the Asia-Pacific region. We also have, and will continue to have, research and development facilities in Korea and sales offices in China, Japan, Korea and Taiwan.
We also have, and will continue to have, research and development facilities in Korea and sales offices in China, Japan, Korea and Taiwan.
We cannot predict the extent to which a trading market will develop or how liquid that market might become. The trading price of our Common Stock can be volatile and subject to wide fluctuations in price in response to various factors, some of which are beyond our control.
Our common stock is publicly traded, but there can be no assurance that an active or liquid trading market will be maintained. The trading price of our Common Stock can be volatile and subject to wide fluctuations in price in response to various factors, some of which are beyond our control.
In addition, our customers, partners and suppliers may experience cybersecurity attacks that may indirectly affect our ability to conduct business with them or result in cybersecurity breaches in our network, which may adversely affect our business operations. We expect to continue to devote resources to the security of our information technology systems. It em 1B. Unresolved Staff Comments. None.
In addition, our customers, partners and suppliers may experience cybersecurity attacks that may indirectly affect our ability to conduct business with them or result in cybersecurity breaches in our network, which may adversely affect our business operations.
Being a public company will increase our expenses and administrative workload and will expose us to risks relating to evaluation of our internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002.
Being a public company increases our operating costs and administrative burdens and exposes us to risks relating to compliance with public company reporting requirements, including the evaluation of our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002.
If our foundry vendors do not achieve satisfactory yields or quality, our reputation, customer relationships and financial performance could be harmed. The fabrication of chipsets is a complex and technically demanding process. Minor deviations in the manufacturing process can cause substantial decreases in yields, and in some cases, cause production to be suspended.
The fabrication of chipsets is a complex and technically demanding process. Minor deviations in the manufacturing process can cause substantial decreases in yields, and in some cases, cause production to be suspended. Our foundry vendor could, from time to time, experience manufacturing defects and reduced manufacturing yields.
We seek to detect and investigate all security incidents and to prevent their recurrence, but in some cases, we might be unaware of an incident or its magnitude and effects. While we have identified some incidents involving attempts at unauthorized access, we are not aware of any that have succeeded.
We seek to detect and investigate all security incidents and to prevent their recurrence, but in some cases, we might be unaware of an incident or its magnitude and effects for an extended period of time.
Our foundry vendor could, from time to time, experience manufacturing defects and reduced manufacturing yields. Changes in manufacturing processes or the inadvertent use of defective or contaminated materials by our foundry vendor could result in lower than anticipated manufacturing yields or unacceptable performance.
Changes in manufacturing processes or the inadvertent use of defective or contaminated materials by our foundry vendor could result in lower than anticipated manufacturing yields or unacceptable performance. Many of these problems are difficult to detect at an early stage of the manufacturing process and may be time consuming and expensive to correct.
To the extent that any security breach results in inappropriate disclosure of our customers’ or business partners’ confidential information, we may incur liability as a result. We could also suffer monetary and other losses, including reputational harm, which costs we may not be able to recover.
To the extent that any security breach results in inappropriate disclosure of our customers’ or business partners’ confidential information, we may incur liability as a result, including contractual claims, litigation, or regulatory investigations.
For the years ended December 31, 2024 and 2023, we had a net loss of $12.4 million and $22.5 million, respectively, and used cash in operating activities of $31.0 million and $8.8 million, respectively.
For the years ended December 31, 2025 and 2024, we had a net loss of $43.4 million and $12.4 million, respectively, and used cash in operating activities of $30.7 million and $31.0 million, respectively. We had short-term debt in the amount of $56.6 million and $37.6 million, including borrowings as of December 31, 2025 and 2024, respectively.
The enactment of legislation implementing changes in the U.S. taxation of international business activities or the adoption of other tax reform policies could materially impact our financial position and results of operations. The U.S. government has made public statements indicating that it has made international tax reform a priority, and key members of the U.S.
Enforcement actions and sanctions could harm our business, operating results and financial condition. 28 Table of Contents The enactment of legislation implementing changes in the U.S. taxation of international business activities or the adoption of other tax reform policies could materially impact our financial position and results of operations.
We design our semiconductor solutions to conform to standards set by industry standard bodies, including the Institute of Electrical and Electronics Engineers, Inc., or IEEE, and the 3rd Generation Partnership Project, or 3GPP. We also depend on industry groups, such as the WiMAX Forum, to certify and maintain certification of our semiconductor solutions.
Rapidly changing standards could make our semiconductor solutions obsolete, which would cause our operating results to suffer. We design our semiconductor solutions to conform to standards set by industry standard bodies, including the Institute of Electrical and Electronics Engineers, Inc., or IEEE, and the 3rd Generation Partnership Project, or 3GPP.
In the event that we complete the performance of our obligations and are able to commercialize and sell our products, we may receive significant revenues and fees as a result of such agreements, including but are not limited to, milestone payments upon the achievement of specified business and development objectives as well as follow-on sales of our chipsets to ODM/OEM suppliers when products (using our chipset) related to these development agreements begins to ramp.
As we continue to perform under these agreements and expand commercialization, we may receive revenues and fees, including milestone payments upon the achievement of specified business and development objectives and follow-on sales of our chipsets to ODM and OEM suppliers as products using our chipsets ramp in volume.
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.
Recent downturns in the semiconductor industry have been attributed to a variety of factors, including global macroeconomic uncertainty, global/regional pandemic (i.e., SARS, COVID-19), trade and geopolitical tensions, weakness in end-market demand and pricing across semiconductor applications, and excess inventory levels.
The failure of our patents to adequately protect our technology might make it easier for our competitors to offer similar products or technologies. Our foreign patent protection is generally not as comprehensive as our U.S. patent protection and may not protect our intellectual property in some countries where our products are sold or may be sold in the future.
Our foreign patent protection is generally not as comprehensive as our U.S. patent protection and may not protect our intellectual property in some countries where our products are sold or may be sold in the future. Many U.S.-based companies have encountered substantial intellectual property infringement in foreign countries, including countries where we sell products.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

12 edited+2 added−2 removed7 unchanged
Biggest changeAs of December 31, 2024, we have not identified any cybersecurity threats that have materially affected our business strategy, results of operations, or financial condition. However, we recognize that future incidents could have a material adverse effect on our business, financial condition, results of operations, cash flows, or reputation.
Biggest changeHowever, we recognize that future incidents could have a material adverse effect on our business, financial condition, results of operations, cash flows, or reputation. For further discussion of cybersecurity risks, please refer to the “ Risk Factors ” section under the heading “ General Risks Related to the Company. ” It em 2. Properties.
It em 4. Mine Safety Disclosures. Not applicable. 33 Table of Contents PART II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Common Stock and Public Warrants are currently listed on the New York Stock Exchange under the symbols “GCTS” and “GCTSW,” respectively.
It em 4. Mine Safety Disclosures. Not applicable. 32 Table of Contents PART II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Common Stock and Public Warrants are currently listed on the New York Stock Exchange under the symbols “GCTS” and “GCTSW,” respectively.
The CFO provides regular updates to the Board, Audit Committee, and executive management on the status of our cybersecurity posture and any material threats. 32 Table of Contents Our cybersecurity program employs industry-standard methodologies to manage cybersecurity risks, including secure network infrastructure design, continuous security updates, and automated alerts for suspicious activities.
The CFO provides regular updates to the Board, Audit Committee, and executive management on the status of our cybersecurity posture and any material threats. Our cybersecurity program employs industry-standard methodologies to manage cybersecurity risks, including secure network infrastructure design, continuous security updates, and automated alerts for suspicious activities.
Significant incidents are escalated to a team of business leaders, including our Chief Executive Officer, and Chief Financial Officer, who work with our incident response team to assess and address the situation. The Audit Committee oversees management’s response to significant incidents and ensures compliance with disclosure requirements.
Significant incidents are escalated to a team of business leaders, including our Chief Executive Officer and CFO, who work with our incident response team to assess and address the situation. The Audit Committee oversees management’s response to significant incidents and ensures compliance with disclosure requirem ents.
We also have an 850 square-foot facility in Shanghai, China, for sales and technical support personnel under a lease that expires in July 2026 and a 1,200 square-foot facility in Shenzhen, China, which accommodates sales and technical support personnel, under a lease that expires in May 2025. We do not own any real property.
We also have an approximately 850 square-foot facility in Shanghai, China, for sales and technical support personnel under a lease that expires in July 2026 and an approximately 720 square-foot facility in Shenzhen, China, which accommodates sales and technical support personnel, under a lease that expires in June 2028. We do not own any real property.
Holders of Record On March 20, 2025, there were 123 holders of record of our common stock and 5 holders of record of our warrants. Such numbers do not include beneficial owners holding our securities through nominee names. Dividends We have not paid any cash dividends on Common Stock to date.
Holders of Record On March 19, 2026, there were 78 holders of record of our common stock and 21 holders of record of our warrants. Such numbers do not include beneficial owners holding our securities through nominee names. Dividends We have not paid any cash dividends on Common Stock to date.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report. Recent Sales of Unregistered Securities None.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report. Recent Sales of Unregistered Securities There have been no other unregistered sales of equity securities during the year ended December 31, 2025.
Our IT Director who has extensive experience in information systems and cybersecurity, leads our cybersecurity strategy, policy, standards, architecture, and processes. The IT Director reports to the Chief Financial Officer (“CFO”).
The board of directors (the “Board”) oversees our cybersecurity risk management process, and the Audit Committee has the authority and power to provide specific oversight of cybersecurity matters. Our IT Director who has extensive experience in information systems and cybersecurity, leads our cybersecurity strategy, policy, standards, architecture, and processes. The IT Director reports to the Chief Financial Officer (“CFO”).
We have a 100 square-foot facility in Taipei, Taiwan, which houses sales and technical support personnel, under a lease that expires in June 2025.
We have an approximately 56,500 square-foot facility in Seoul, Korea, which accommodates a research and development center under a lease expiring in December 2026. We have an approximately 100 square-foot facility in Taipei, Taiwan, which houses sales and technical support personnel, under a lease that expires in July 2026.
To maintain high security standards, we leverage third-party tools and services that adhere to industry best practices, including multi-layer authentication. Despite our efforts, we acknowledge that cybersecurity threats are constantly evolving, and we remain vigilant in our efforts to protect our information systems and data.
Our incident response procedures include coordination with relevant third-party service providers, as applicable, to assess and address incidents that may impact our systems or data. To maintain high security standards, we leverage third-party tools and services that adhere to industry best practices, including multi-layer authentication.
These assessments evaluate the likelihood of the occurrence and potential impact of such threats, as well as the adequacy of our existing policies, procedures, systems, and controls. The Board oversees our cybersecurity risk management process, and the Audit Committee has the authority and power to provide specific oversight of cybersecurity matters.
These assessments evaluate the likelihood of the occurrence and potential impact of such threats, as well as the adequacy of our existing policies, procedures, systems, and controls. These assessments also consider cybersecurity risks associated with certain third-party service providers that have access to our systems or data.
For further discussion of cybersecurity risks, please refer to the “ Risk Factors ” section under the heading “ General Risks Related to the Company. ” It em 2. Properties. Our principal executive offices are located in San Jose, California, and consist of approximately 5,900 square feet under a lease that expires in October 2026.
Our principal executive offices are located in San Jose, California, and consist of approximately 5,900 square feet under a lease that expires in October 2026. This facility accommodates our product marketing and finance and administrative activities as well as a small research and development team.
Removed
This facility accommodates our product marketing and finance and administrative activities as well as a small research and development team. We have a 56,500 square-foot facility in Seoul, Korea, which accommodates a research and development center under a lease expiring in December 2025 that renews annually.
Added
Despite our efforts, we acknowledge that cybersecurity threats are constantly evolving, and we remain vigilant in our efforts to protect our information systems and data. 31 Table of Contents As of December 31, 2025 , we have not identified any cybersecurity threats that have materially affected our business strategy, results of operations, or financial condition.
Removed
Issuer Repurchases of Equity Securities During the quarter ended December 31, 2024, we did not repurchase any equity securities.
Added
Issuer Repurchases of Equity Securities During the fourth quarter ended December 31, 2025, we did not repurchase any equity securities. Performance Graph We are a “smaller reporting company,” as defined by Item 10(f)(1) of Regulation S-K, and therefore are not required to provide the information required by paragraph (e) of Item 201 of Regulation S-K.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

265 edited+152 added−56 removed160 unchanged
Biggest changeConsolidated Stateme nts of Stockholders’ Deficit (in thousands) Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital Income Deficit Deficit Balance as of December 31, 2022 127,761 $ 128 $ 433,990 $ ( 1,862 ) $ ( 527,185 ) $ ( 94,929 ) Effect of 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 210 1 22 — — 23 Issuance of common stock from conversion of promissory notes and accrued interest 15 — 72 — — 72 Issuance of common stock from warrant exercise 80 — 1,499 — — 1,499 Stock-based compensation — — 43 — — 43 Foreign currency translation adjustment — — — 324 — 324 Net loss — — — — ( 22,469 ) ( 22,469 ) Balance as of December 31, 2023 (1) 24,166 $ 3 $ 435,752 $ ( 1,538 ) $ ( 549,654 ) $ ( 115,437 ) 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 ) Effect of 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 Issuance of common stock under common stock purchase agreement 2,364 — 9,790 — — 9,790 Issuance of commitment shares in connection with common stock purchase agreement 57 — — — — — Issuance of common stock to underwriter 110 — 667 — — 667 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 133 — 15 — — 15 Release of vested restricted stock units 98 — — — — — Forfeiture of unvested sponsor earnout shares ( 1,350 ) — — — — — Stock-based compensation — — 2,700 — — 2,700 Foreign currency translation adjustment — — — 3,056 — 3,056 Net loss — — — — ( 12,379 ) ( 12,379 ) Balance as of December 31, 2024 47,987 $ 5 $ 501,195 $ 1,518 $ ( 562,033 ) $ ( 59,315 ) (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 Consolidated Financial Statements).
Biggest changeConsolidated Stateme nts of Stockholders’ Deficit (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 Issuance of common stock under common stock purchase agreement 2,364 — 9,790 — — 9,790 Issuance of commitment shares in connection with common stock purchase agreement 57 — — — — — Issuance of common stock to underwriter 110 — 667 — — 667 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 133 — 15 — — 15 Release of vested restricted stock units 98 — — — — — Forfeiture of unvested sponsor earnout shares ( 1,350 ) — — — — — Stock-based compensation — — 2,700 — — 2,700 Foreign currency translation adjustment — — — 3,056 — 3,056 Net loss — — — — ( 12,379 ) ( 12,379 ) 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 75 — 190 — — 190 Issuance of common stock under at-market agreement 1,405 — 2,210 — — 2,210 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 189 — 21 — — 21 Release of vested restricted stock units 577 — — — — — Issuance of common stock upon conversion of convertible promissory notes 904 — 1,097 — — 1,097 Shares withheld related to net share settlement of restricted stock units ( 6 ) — ( 11 ) — — ( 11 ) Stock-based compensation — — 6,330 — — 6,330 Foreign currency translation adjustment — — — ( 337 ) — ( 337 ) Net loss — — — — ( 43,372 ) ( 43,372 ) Balance as of December 31, 2025 58,137 $ 6 $ 520,925 $ 1,181 $ ( 605,405 ) $ ( 83,293 ) The accompanying notes are an integral part of these consolidated financial statements. 51 Table of Contents GCT SEMICONDUCTOR HOLDING, INC.
Financing Activities Cash provided by financing activities of $36.5 million during the year ended December 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, $11.9 million in proceeds from borrowings, $8.5 million proceeds received from issuance of common stock to B.
Cash provided by financing activities of $36.5 million during the year ended December 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, $11.9 million in proceeds from borrowings, $8.5 million proceeds received from issuance of common stock to B.
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.
At the end of each reporting period, these liability-classified instruments are remeasured using an option-pricing model or the BLM. Significant assumptions are used in determining the fair value of our warrants and include volatility and the risk-free rate.
Liquidity The accompanying 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.
Liquidity The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets, liabilities, and commitments in the normal course of business.
The Sponsor Earnout Shares were recognized at a fair value of approximately $ 10.4 million upon the Closing and classified within the stockholders’ deficit as they are indexed solely to the Company’s common stock and are otherwise not precluded from equity classification based on their settlement provisions.
The Sponsor Earnout Shares were recognized at a fair value of approximately $ 10.4 million upon the Closing and classified within stockholders’ deficit as they are indexed solely to the Company’s common stock and are otherwise not precluded from equity classification based on their settlement provisions.
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.
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 the Company’s common stock, at a conversion price of $ 10.00 per share.
In June 2024, the Company repaid in full of the term loans with a principal amount of $ 1.4 million outstanding on its third draw. In July 2024, the Company executed an amendment with i Best Investment Co., Ltd. to extend the maturity date from August 2024 to February 2025 for its first draw, fifth draw and sixth draw.
In June 2024, the Company repaid in full the term loans with a principal amount of $ 1.4 million outstanding on its third draw. In July 2024, the Company executed an amendment with i Best Investment Co., Ltd. to extend the maturity date from August 2024 to February 2025 for its first draw, fifth draw and sixth draw.
Common stock warrants that meet equity classification requirements are credited to stockholders’ deficit on their issuance dates and are not subsequently remeasured. Certain Equity Contracts The Company’s promises to potentially issue additional shares in the future based on certain market conditions, including the Legacy GCT Earnout Shares and the Sponsor Earnout Shares, are discussed in Note 3.
Common stock warrants that meet equity classification requirements are credited to stockholders’ deficit on their issuance dates and are not subsequently remeasured. Certain Equity Contracts The Company’s outstanding promises to potentially issue additional shares in the future based on certain market conditions, including the Legacy GCT Earnout Shares and the Sponsor Earnout Shares, are discussed in Note 3.
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 December 31, 2024 , none of the notes issued to CVT Investors remain outstanding.
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 December 31, 2025 , none of the notes issued to CVT Investors remain outstanding.
As of December 31, 2024, the Company had 600,000 shares authorized for issuance under the 2024 ESPP, and no offering periods started. 2024 Incentive Compensation Plan In March 2024, the Company adopted the 2024 Omnibus Incentive Compensation Plan (the “2024 Plan”), under which 3,983,334 shares of common stock were initially reserved for issuance.
As of December 31, 2025, the Company had 600,000 shares authorized for issuance under the 2024 ESPP, and no offering periods had started. 2024 Omnibus Incentive Compensation Plan In March 2024, the Company adopted the 2024 Omnibus Incentive Compensation Plan (the “2024 Plan”), under which 3,983,334 shares of common stock were initially reserved for issuance.
All participating securities are excluded from basic weighted average shares outstanding. In computing diluted net loss, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. Diluted net loss per share is computed by dividing net loss by diluted weighted average shares outstanding, including potentially dilutive securities, unless anti-dilutive.
All participating securities are excluded from basic weighted average shares outstanding. In computing diluted net loss per common share, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. Diluted net loss per common share is computed by dividing net loss by diluted weighted average shares outstanding, including potentially dilutive securities, unless anti-dilutive.
Attestation Report of Registered Public Accounting Firm This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting due to an exemption established by the JOBS Act for “emerging growth companies.” Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Attestation Report of Registered Public Accounting Firm This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting due to an exemption established by the JOBS Act for “emerging growth companies.” Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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.
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 IoT 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.
Notes to Consolidated Financial Statements Other Comprehensive Income (Loss) Other comprehensive income (loss) include 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.
Notes to Consolidated Financial Statements Accumulated Other Comprehensive Income (Loss) Accumulated 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.
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.
These notes had maturity dates ranging from November 2026 to March 2027 , bore an annual interest rate of 5.0 %, and were automatically convertible upon IPO or SPAC transaction.
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 December 31, 2024.
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 December 31, 2025.
Contract Assets and Liabilities Contract assets primarily represent revenue earnings over time for which the Company does not have an unconditional right to payment based on the terms of the contracts, which generally are not yet billable. The Company does not have impairment losses associated with customer contract asset balances during the years ended December 31, 2024 and 2023.
Contract Assets and Liabilities Contract assets primarily represent revenue earnings over time for which the Company does not have an unconditional right to payment based on the terms of the contracts, which generally are not yet billable. The Company does not have impairment losses associated with customer contract asset balances during the years ended December 31, 2025 and 2024.
The Company’s management believes that, based on a number of factors, it is more likely than not, that all or some portion of the deferred tax assets will not be realized; and accordingly, for the year ended December 31, 2024 and 2023, the Company has provided a valuation allowance against the Company’s U.S. net deferred tax assets.
The Company’s management believes that, based on a number of factors, it is more likely than not, that all or some portion of the deferred tax assets will not be realized; and accordingly, for the year ended December 31, 2025 and 2024, the Company has provided a valuation allowance against the Company’s U.S. net deferred tax assets.
As of December 31, 2024 and 2023, the Company’s foreign subsidiaries operated at a cumulative deficit for U.S. earnings and profit purposes. In the event the Company is required to repatriate funds from outside of the U.S., such repatriation would be subject to local laws, customs, and tax consequences.
As of December 31, 2025 and 2024, the Company’s foreign subsidiaries operated at a cumulative deficit for U.S. earnings and profit purposes. In the event the Company is required to repatriate funds from outside of the U.S., such repatriation would be subject to local laws, customs, and tax consequences.
Gain on Extinguishment of Liability Gain on extinguishment of liability was $14.6 million for the year ended December 31, 2024 due to the release by a vendor of amounts payable by us for research and development services received in prior years. No similar transactions took place during the year ended December 31, 2023.
Gain on Extinguishment of Liability Gain on extinguishment of liability was $14.6 million for the year ended December 31, 2024 due to the release by a vendor of amounts payable by us for research and development services received in prior years. No similar transactions took place during the year ended December 31, 2025.
(a Delaware corporation) and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive loss, stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
(a Delaware corporation) and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, comprehensive loss, stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).
Subsequent to the Closing, the outstanding Private Placement Warrants and Public Warrants remained liability-classified as the applicable provisions precluding classification in equity did not change as a result of the Business Combination. Refer to Note 10 for information about the warrants outstanding as of December 31, 2024.
Subsequent to the Closing, the outstanding Private Placement Warrants and Public Warrants remained liability-classified as the applicable provisions precluding classification in equity did not change as a result of the Business Combination. Refer to Note 10 for information about the warrants outstanding as of December 31, 2025.
The number of shares issuable to each grantee under the 2024 RSUs is calculated by dividing one-fourth of the allocated fixed monetary amount by the closing price of the Company’s common stock at the end of each fiscal quarter between April 1, 2024 and March 31, 2025.
The number of shares issuable to each grantee under the 2025 RSUs is calculated by dividing one-fourth of the allocated fixed monetary amount by the closing price of the Company’s common stock at the end of each fiscal quarter between April 1, 2025 and March 31, 2026.
Our management has assessed the effectiveness of our internal control over financial reporting December 31, 2024. In making this assessment, management applied its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on this assessment, our management has concluded that as of December 31, 2024, our internal control over financial reporting was effective.
Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management applied its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on this assessment, our management has concluded that as of December 31, 2025, our internal control over financial reporting was effective.
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.
Fair Value of Convertible Promissory Notes We have made an election to account for certain 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.
The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use net operating losses may be limited as prescribed under Internal Revenue Code Section 382 (“IRC Section 382”).
The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use net operating losses may be limited as prescribed under Internal Revenue Code Section 382 (“Section 382”).
Total direct and incremental transaction costs of Concord III and Legacy GCT 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 35 Table of Contents underwriting, accounting, legal and other fees, and the remaining balance of $13.1 million was expensed in the period incurred by Concord III.
Total direct and incremental transaction costs of Concord III and Legacy GCT 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.
We continuously monitor collections and payments from customers and maintain a provision for credit losses based upon the collectibility 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 43 Table of Contents customer’s ability to pay.
We continuously monitor collections and payments from customers and maintain a provision for credit losses based upon the collectibility 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.
Service revenues from development services, technical advice, and maintenance services are generally recognized over time as these performance obligations are satisfied. 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.
Service revenues from development services, technical advice, and maintenance services are generally recognized over time as these performance obligations are satisfied. We estimate 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.
The Company files income tax returns in the U.S. federal jurisdiction, California and in many foreign jurisdictions. The Company’s tax years for 2021 and forward are subject to examination by the U.S. tax authorities. The Company’s tax years for 2020 and forward are subject to examination by various state tax authorities.
The Company files income tax returns in the U.S. federal jurisdiction, California and in many foreign jurisdictions. The Company’s tax years for 2022 and forward are subject to examination by the U.S. tax authorities. The Company’s tax years for 2021 and forward are subject to examination by various state tax authorities.
In January 2025, the Company entered into a term loan agreement with Kyeongho Lee pursuant to which the Company borrowed KRW 6.5 billion ($ 4.5 million) with a maturity date in February 2025 and an annual interest rate of 12 %, which remains outstanding as of the issuance date of these consolidated financial statements (see Note 17).
In January 2025, the Company entered into a term loan agreement with Kyeongho Lee pursuant to which the Company borrowed KRW 6.5 billion ($ 4.4 million) with a maturity date in February 2025 and an annual interest rate of 12 %, which remains outstanding as of the issuance date of these consolidated financial statements.
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 December 31, 2024, the Company utilized $ 9.7 million of the contractual commitment amount under the Purchase Agreement.
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 December 31, 2025, the Company utilized $ 9.9 million of the contractual commitment amount under the Purchase Agreement.
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. In addition, the sale of additional equity securities could result in dilution to our stockholders.
While we believe we have a reasonable basis for our expectations and will be able to raise additional funds, we cannot provide assurance that we will be able to complete additional financing in a timely manner. In addition, the sale of additional equity securities could result in dilution to our stockholders.
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.
Business Combination On March 26, 2024 (the “Closing Date”), 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.
Of this amount $ 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 estimates that there will be no material changes in its uncertain tax positions existing as of December 31, 2024 in the next twelve months.
Of this amount $ 1.9 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 estimates that there will be no material changes in its uncertain tax positions existing as of December 31, 2025 in the next twelve months.
However, the Company does not have a history of cancelling these agreements once production has started. As of December 31, 2024 , the Company had outstanding noncancellable purchase commitments for these production agreements of $ 0.2 million. Samsung Agreement Liability Release In July 2020, the Company entered into a research and development agreement with Samsung Electronics Co., Ltd (“Samsung”).
However, the Company does not have a history of cancelling these agreements once production has started. As of December 31, 2025, the Company had outstanding noncancellable purchase commitments for these production agreements of $ 0.1 million . Samsung Agreement Liability Release In July 2020, the Company entered into a research and development agreement with Samsung Electronics Co., Ltd (“Samsung”).
Income Taxes Determining the provision for income taxes, income taxes payable, and deferred tax assets and liabilities involves judgment. The Company calculates and provides for income taxes in each of the tax jurisdictions in which it operates, which involves estimating current tax exposures as well as making judgments regarding the recoverability of deferred tax assets in each jurisdiction.
Income Taxes Determining the provision for income taxes, other taxes payable, and deferred tax assets and liabilities involves judgment. The Company calculates and provides for income taxes in each of the tax jurisdictions in which it operates, which involves estimating current tax exposures and making judgments regarding the recoverability of deferred tax assets in each jurisdiction.
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, common stock of Legacy GCT prior to the reverse recapitalization, warrant liabilities, stock options, and common stock forward liability.
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.
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.
I n 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.
While we believe that we will be able to secure additional capital and funding in the next 12 months to sustain our operations, the report of our independent registered accounting firm included in this Form 10-K contains a paragraph expressing substantial doubt as to our ability to continue as a going concern.
While we believe we will be able to secure additional capital and funding in the next 12 months to sustain our operations, the report of our independent registered accounting firm included in this Form 10-K includes a paragraph expressing substantial doubt about our ability to continue as a going concern.
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. 53 Table of Contents GCT SEMICONDUCTOR HOLDING, INC.
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.
Overview We are 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 (“RF”) and modems, which are essential for a wide variety of industrial, B2B and consumer applications.
Overview We are 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 (“RF”) and modems, which are essential for a wide variety of industrial, business-to-business (“B2B”) and consumer applications.
During the year ended December 31, 2024, the Company recognized an impairment charge of $ 0.8 million related to certain balances classified as other assets, which has been presented as a separate line item within the consolidated statement of operations. No impairment charges were recorded for the year ended December 31, 2023 .
During the year ended December 31, 2024, the Company recognized an impairment charge of $ 0.8 million related to certain balances classified as other assets. This charge has been presented as a separate line item within the consolidated statement of operations. No impairment charges were recorded for the year ended December 31, 2025.
During the years ended December 31, 2024 and 2023 , the product warranty reserve activity and balances were not material. Concentration of Credit Risk The Company’s financial instruments subject to credit risk concentration consist of cash and cash equivalents and accounts receivable.
During the years ended December 31, 2025 and 2024 , the product warranty activity and related reserve balances were not material. Concentration of Credit Risk The Company’s financial instruments subject to credit risk concentration consist of cash and cash equivalents and accounts receivable.
KEB Hana Bank In July 2016, the Company entered into an unsecured term loan agreement with KEB Hana Bank, pursuant to which it borrowed 9.0 billion in KRW ($ 6.7 million), bearing a variable interest rate (initial annual interest rate of 2.6 % and interest ranging between 3.5 - 4.9 % as of December 31, 2024 ), paid monthly, and maturing in July 2017 .
KEB Hana Bank In July 2016, the Company entered into an unsecured term loan agreement with KEB Hana Bank, pursuant to which it borrowed 9.0 billion in KRW ($ 6.7 million), bearing a variable interest rate (initial annual interest rate of 2.6 % and annual interest rates ranging between 3.1 %- 4.0 % as of December 31, 2025 ), paid monthly, and maturing in July 2017 .
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the periods ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.
Loss on Impairment of Long-Lived Assets Loss on impairment of intangible assets was $0.8 million for the year ended December 31, 2024 due to impairment charges for certain long-lived assets that were determined to be not recoverable. No impairment charges were recorded for the year ended December 31, 2023.
Loss on Impairment of Long-Lived Assets Loss on impairment of intangible assets was $0.8 million for the year ended December 31, 2024 due to impairment charges for certain long-lived assets that were determined to be not recoverable.
The Company is a fabless semiconductor company that specializes in the design, manufacturing, and sale of communication semiconductors, including high-speed wireless communication technologies such as 5G/4.75G/4.5G/4G transceivers and modems, which are essential for a wide variety of industrial, B2B and consumer applications.
The Company is a fabless semiconductor company that specializes in the design, manufacturing, and sale of communication semiconductors, including high-speed wireless communication technologies such as 5G/4.75G/4.5G/4G transceivers and modems, which are essential for a wide variety of industrial, business-to-business (“B2B”) and consumer applications.
We expect to use such additional liquidity and the cash and cash equivalents available to us after the Closing to finance the following activities: • Cost of mass production of 5G and other products, including masks, wafers and design house fees; • Acquisition of IP and tool enhancement to develop next generation of product; • Hiring of additional personnel in engineering and sales and marketing functions; and • Improvement of engineering equipment.
We expect to use additional liquidity and our available cash and cash equivalents to finance the following activities: • Cost of mass production of 5G and other products, including masks, wafers, and design house fees; • Acquisition of IP and tool enhancement to develop the next generation of product; • Hiring of additional personnel in engineering, sales, and marketing functions; and • Improvement of engineering equipment.
In April 2022, the Company entered into a term loan and security agreement with M-Venture Investment, Inc., pursuant to which the Company borrowed amounts in two draws of KRW 1.0 billion ($ 0.7 million) and KRW 5.0 billion ($ 3.7 million), respectively.
Notes to Consolidated Financial Statements 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 billion ($ 3.7 million), respectively.
In February 2025, the Company executed an amendment with i Best Investment Co., Ltd. to extend the maturity date from February 2025 to May 2025 for its first draw and fifth draw (see Note 17).
In February 2025, the Company executed an amendment with i Best Investment Co., Ltd. to extend the maturity date from February 2025 to May 2025 for its first draw and fifth draw.
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.
We base our estimates on historical experience and other factors we believe are reasonable under the circumstances, which form the basis for judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
In July 2024, the number of Sponsor Earnout Shares subject to the market-based vesting condition was reduced to 570,796 shares of the Company’s common stock, as the sponsor parties did not meet the required performance condition for the entire grant. The remaining 1,349,579 shares previously included in the outstanding common stock were forfeited.
In July 2024, the number of Sponsor Earnout Shares subject to the market-based vesting condition was reduced to 570,796 shares of the Company’s common stock, as the sponsor parties did not meet the required performance condition for the entire grant. The remaining 1,349,579 shares previously included in the outstanding common stock were forfeited during the year ended December 31, 2024.
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, and the remaining unallocated shares reserved under the 2011 Plan were cancelled.
Stock-Based Compensation Amended and Restated 2011 Incentive Compensation Plan The Amended and Restated 2011 Incentive Compensation Plan of Legacy GCT (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, and the remaining unallocated shares reserved under the 2011 Plan were cancelled.
In March 2024, we received $17.2 million in cash proceeds from the reverse recapitalization and PIPE Financing, net of transaction costs in connection with the closing of the Business Combination. In April 2024, we entered into the ELOC under a common stock purchase agreement (the “Purchase Agreement”) and a related registration rights agreement (the “Registration Rights Agreement”) with B.
Business Combination and PIPE Financing In March 2024, we received $17.2 million in cash proceeds from the reverse recapitalization and PIPE Financing, net of transaction costs in connection with the closing of the Business Combination. In April 2024, we entered into the Purchase Agreement and a related registration rights agreement (the “Registration Rights Agreement”) with B.
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.
Our net revenues are comprised of product and service revenues. 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.
The balances related to contract fulfillment were immaterial as of December 31, 2024 and 2023 . 5.
The balances related to contract fulfillment were immaterial as of December 31, 2025 and 2024 . 5.
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.
The worldwide commercial deployment and adoption of the narrow band LTE variants, Cat M and Cat NB, are expected to further expand the markets for IoT devices.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID: 207 ) 46 Consolidated Financial Statements: Consolidated Balance Sheets 47 Consolidated Statements of Operations 48 Consolidated Statements of Comprehensive Loss 49 Consolidated Statements of Stockholder’s Deficit 50 Consolidated Statements of Cash Flows 51 Notes to Consolidated Financial Statements 52 45 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of GCT Semiconductor Holding, Inc.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID: 207 ) 47 Consolidated Financial Statements: Consolidated Balance Sheets 48 Consolidated Statements of Operations 49 Consolidated Statements of Comprehensive Loss 50 Consolidated Statements of Stockholder s ’ Deficit 51 Consolidated Statements of Cash Flows 52 Notes to Consolidated Financial Statements 53 46 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of GCT Semiconductor Holding, Inc.
Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. It em 9B. Other Information. (a) On March 21, 2025, GCT Research, Inc.
Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. It em 9B. Other Information. (a) On March 25, 2026, GCT Semiconductor Holding, Inc.
We have certain debt agreements in place related to convertible promissory notes and borrowings. See Note 7, to our consolidated financial statements included in this Form 10-K for more information regarding our debt arrangements.
See Note 8 to our consolidated financial statements included in this Form 10-K 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 consolidated financial statements included in this Form 10-K for more information regarding our debt arrangements.
Notes to Consolidated Financial Statements with the Business Combination treated as the equivalent of Legacy GCT issuing its common stock for the net assets of Concord III, accompanied by a recapitalization, and the net assets of Concord III were recorded at historical cost, with no goodwill or other intangible assets recorded.
Accordingly, 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 its common stock for the net assets of Concord III, accompanied by a recapitalization, and the net assets of Concord III were recorded at historical cost, with no goodwill or other intangible assets recorded.
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, Samsung and TSMC, for the manufacturing and supplies of its wafers and products.
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 United Microelectronics Corporation, Samsung and Taiwan Semiconductor Manufacturing Corporation, for the manufacturing and supplies of its wafers and products.
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.
Actual results may differ from these estimates under different assumptions or conditions due to inherent uncertainty in making them, and any such differences may be material.
Indirect costs consist of provisions for excess and obsolete inventory, royalties, allocated overhead for employee costs and facility costs, warranty and the amortization of the Company’s production mask sets and certain intangible assets.
Indirect costs consist of provisions for excess, slow moving 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.
Even as more and more applications are deployed on 5G networks, we nonetheless anticipate continued demand for our existing 4G LTE product lineup (4.75G/4.5G/4G, etc.) for the foreseeable future, because 4G products are expected to coexist in the market with 5G products at lower price points for some time in the same way that 3rd generation (“3G”) products coexisted with 4G products when 4G networks were first deployed.
Even as more and more applications are deployed on 5G networks, we believe that demand for our existing 4G LTE product lineup (4.75G/4.5G/4G, etc.) will continue, because 4G products are expected to coexist in the market with 5G products at lower price points for some time in the same way that 3rd generation (“3G”) products coexisted with 4G products when 4G networks were first deployed.
Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued 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.
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.
The term loan has a maturity date in December 2025 and bears an annual interest rate of 6.5 %. In March 2025, the Company entered into a term loan agreement with Anapass, Inc. pursuant to which the Company borrowed KRW 4.5 billion ($ 3.1 million) with an annual interest rate of 6.5 %.
The term loan has a maturity date in March 2026 and bears an annual interest rate of 6.5 %. In July 2025, the Company entered into a term loan agreement with Anapass, Inc. pursuant to which the Company borrowed KRW 3.0 billion ($ 2.1 million).
Notes to Consolidated Financial Statements Product Warranty The Company provides customers with warranty claims for certain products, generally lasting 12 months from the time of sale, and warranty-related services are not considered a separate performance obligation.
Product Warranty The Company provides customers with warranty claims for certain products, generally lasting 12 months from the time of sale, and warranty-related services are not considered a separate performance obligation.
JOBS Act Accounting and 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.
JOBS Act Accounting and Emerging Growth Company Elections We are an “emerging growth company (“EGC”),” as defined in the JOBS Act. Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies.
The term loan bears an annual interest rate of 6.5 %. In April 2024, the Company executed an amendment with M-Venture Investment, Inc., pursuant to which the Company repaid KRW 2.0 billion ($ 1.5 million) in April 2024. In May 2024, the Company repaid the term loan in full.
The term loan bears an annual interest rate of 6.5 %. In April 2024, the Company executed an amendment with M-Venture Investment, Inc., pursuant to which the Company repaid KRW 2.0 billion ($ 1.5 million) in April 2024. In May 2024, the Company repaid the term loan in full. 68 Table of Contents GCT SEMICONDUCTOR HOLDING, INC.
Due to the Company’s net carryover of unused operating losses, all years remain subject to future examination by tax authorities As of December 31, 2024, the Company asserts to indefinitely reinvest undistributed earnings to ensure sufficient working capital and further expansion of existing operations outside the U.S.
Due to the Company’s net carryover of unused operating losses, all years remain subject to future examination by tax authorities As of December 31, 2025, the Company asserts that it will indefinitely reinvest undistributed earnings to ensure sufficient working capital and further expand existing operations outside the U.S.
Notes to Consolidated Financial Statements Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
The Company is currently evaluating the effect of the adoption of ASU 2023-09 on its consolidated financial statements.
The Company is currently evaluating the effect of the adoption of ASU 2023-09 on its consolidated financial statements and related disclosures.
Contract liabilities are classified as current in the consolidated balance sheets when the revenue recognition associated with the related customer payments and invoicing is expected to occur within one year of the balance sheet date and as long-term when the revenue recognition associated with the related customer payments and invoicing is expected in more than once year from the balance sheet date. 55 Table of Contents GCT SEMICONDUCTOR HOLDING, INC.
Contract liabilities are classified as current in the consolidated balance sheets when the revenue recognition associated with the related customer payments and invoicing is expected to occur within one year of the balance sheet date and as long-term when the revenue recognition associated with the related customer payments and invoicing is expected in more than once year from the balance sheet date.
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.
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 R&D services received in prior years.
As of December 31, 2024 , the Company had federal and state research credit carryforwards of approximately $ 2.7 million and $ 2.5 million, respectively. The federal research credit carryforwards will begin to expire in 2025 while the California research credits carryforward have an indefinite life.
As of December 31, 2025, the Company had federal and state research credit carryforwards of approximately $ 2.8 million and $ 2.6 million , respectively. The federal research credit carryforwards will begin to expire in 2027 while the California research credits carryforward have an indefinite life.
Through December 31, 2024, the Company has incurred operating losses and negative cash flows from operating activities and had an accumulated deficit of $ 562.0 million as of December 31, 2024. The Company’s existing sources of liquidity as of December 31, 2024 include cash and cash equivalents of $ 1.4 million .
Through December 31, 2025, the Company has incurred operating losses and negative cash flows from operating activities and had an accumulated deficit of $ 605.4 million as of December 31, 2025. The Company’s existing sources of liquidity as of December 31, 2025 include cash and cash equivalents of $ 0.6 million .
In addition, companies are required to disclose additional information about income taxes paid. ASU 2023-09 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.
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.
During each of the years ended December 31, 2024 and 2023, the Company recognized a downward adjustment related to the carrying value of the inventory of $ 0.4 million , included in cost of net revenues. Once inventory has been written down below cost, it is not subsequently written up.
During the years ended December 31, 2025 and 2024, the Company recognized a reduction related to the carrying value of the inventory of $ 1.1 million and $ 0.4 million , respectively, included in cost of net revenues. Once inventory has been written down below cost, it is not subsequently written up.

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