Company: GCTS
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0000950170-25-044438
Chunk: 10

Company: GCT Semiconductor Holding, Inc.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 7
Chunk 10
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 of $4.4 million was largely driven by foreign exchange fluctuations, specifically the appreciation of the US dollar against the Korean Won during the fourth quarter of 2024. Since significant amounts of our debt are denominated in Korean Wons, these trends have resulted in significant realized and unrealized gains during the year ended December 31, 2024.

Change in fair value of common stock warrant liabilities

During the year ended December 31, 2024, we recognized a gain of $2.2 million from changes in the fair value of common stock warrant liabilities. This gain was primarily driven by the reduction in our common stock price during this period. There were no gains or losses from the warrant liabilities measurement during the year ended December 31, 2023 since the statements of operations during this period are those of Legacy GCT, which did not have liability-classified warrants.

Change in fair value of convertible promissory notes

Loss from changes in fair value of convertible promissory notes was $1.4 million for the year ended December 31, 2023 and $1.5 million for the year ended December 31, 2024. These losses in each year were derived from the fair value measurement and related assumptions, 

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specifically changes in the probability of different settlement scenarios during the year ended December 31, 2023, and remeasurement of the convertible notes prior to their settlement in our common stock during the year ended December 31, 2024.

Loss from initial recognition of common stock forward liability

We recognized a loss from initial recognition of common stock forward liability of $0.6 million during the year ended December 31, 2024, which represents the initial fair value of the financial instrument issued under the Purchase Agreement with B. Riley. There were no similar transactions during the year ended December 31, 2023.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily through cash receipts from customers, the issuance of convertible promissory notes, borrowings, issuance of capital stock, the exercise of stock options, and more recently, the sale of our common stock pursuant to an equity line of credit as described below (“ELOC”).

With limited exceptions, we have incurred and expect that we will continue to incur significant operating losses. 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