Company: GCTS
Filing Date: 2025-04-23
Form Type: S-3
Source: 0001104659-25-038103
Chunk: 74

Company: GCT Semiconductor Holding, Inc.
Filing Date: 2025-04-23
Form: S-3
Chunk 74
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 gain or loss in an amount equal to the difference between the fair market value of the Common Stock represented
by the Warrants deemed surrendered and the U.S. Holder’s tax basis in the Warrants deemed surrendered. In this case, a U.S. Holder’s
tax basis in the Common Stock received would equal the sum of the U.S. Holder’s initial investment in the Warrants exercised and
the exercise price of such Warrants. 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; however, in either case the holding period
will not include the period during which the U.S. Holder held the Warrants.

Due to
the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. Holder’s holding
period would commence with respect to the Common Stock received, there can be no assurance which, if any, of the alternative tax consequences
and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders are urged to consult their
tax advisors regarding the tax consequences of a cashless exercise.

Sale, Exchange, Redemption or Expiration of a Warrant

Upon
a sale, exchange (other than by exercise), redemption (other than a redemption for Common Stock), or expiration of a Warrant, a U.S. Holder
will recognize taxable gain or loss in an amount equal to the difference between (1) the amount realized upon such disposition or
expiration and (2) the U.S. Holder’s tax basis in the Warrant. Such gain or loss will generally be treated as long-term capital
gain or loss if the Warrant is held by the U.S. Holder for more than one year at the time of such disposition or expiration. If a
Warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis
in the Warrant. The deductibility of capital losses is subject to certain limitations.

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A redemption
of Warrants for Common Stock described in this prospectus under “Description of Securities - Warrants” should
be treated as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code. Accordingly, you should
not recognize any gain or loss on the redemption of W