Company: GCTS
Filing Date: 2025-04-23
Form Type: S-3
Source: 0001104659-25-038103
Chunk: 73

Company: GCT Semiconductor Holding, Inc.
Filing Date: 2025-04-23
Form: S-3
Chunk 73
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 are described
under “U.S. Holders-Taxation of Distributions,” above. After the application of those rules, any remaining tax basis
of the U.S. Holder in the redeemed Common Stock should be added to the U.S. Holder’s adjusted tax basis in its remaining stock,
or, if it has none, to the U.S. Holder’s adjusted tax basis in its Warrants or possibly in other stock constructively owned by it.

Exercise of a Warrant

Except
as discussed below with respect to the cashless exercise of a Warrant, a U.S. Holder will not recognize gain or loss upon the exercise
of a Warrant. The U.S. Holder’s tax basis in the share of our Common Stock received upon exercise of the Warrant will generally
be an amount equal to the sum of the U.S. Holder’s initial investment in the Warrant and the exercise price of such Warrant. It
is unclear whether a U.S. Holder’s holding period for the Common Stock received upon exercise of the Warrant would commence on the
date of exercise of the Warrant or the day following the date of exercise of the Warrant; however, in either case the holding period will
not include the period during which the U.S. Holder held the Warrants.

The tax
consequences of a cashless exercise of a Warrant are not clear under current tax law. A cashless exercise may be nontaxable, either because
the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes.
In either situation, a U.S. Holder’s tax basis in the Common Stock received would generally equal the holder’s tax basis in
the Warrant. If the cashless exercise were treated as not being a realization event, it is unclear whether a U.S. Holder’s holding
period for the Common Stock would commence on the date of exercise of the Warrant or the day following the date of exercise of the Warrant.
If, however, the cashless exercise were treated as a recapitalization, the holding period of the Common Stock would include the holding
period of the Warrant.

It is
also possible that a cashless exercise could be treated as a taxable exchange in which gain or loss is recognized. In such event, a U.S.
Holder would be deemed to have surrendered a number of Warrants having a fair market value equal to the exercise price. The U.S. Holder
would recognize capital