Company: GCTS
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0000950170-25-071424
Chunk: 18

Company: GCT Semiconductor Holding, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 18
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.LiquidityThe accompanying unaudited condensed 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. Through March 31, 2025, the Company has incurred operating losses and negative cash flows from operating activities and had an accumulated deficit of $569.0 million as of March 31, 2025. The Company’s existing sources of liquidity as of March 31, 2025 include cash and cash equivalents of $1.0 million. The Company has historically funded operations primarily with issuances of capital stock and the incurrence of debt. The Company is dependent on additional fundraising in order to sustain its ongoing operations.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. 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 March 31, 2025, the Company utilized $9.9 million of the contractual commitment amount under the Purchase Agreement.On April 1, 2025, the Company executed an at-market issuance sales agreement (“ATM Agreement”) with B. Riley Securities, Inc. and H.C. Wainwright & Co., LLC, acting as sales agents. The ATM Agreement allows the Company to sell its common stock for gross proceeds of up to $75.0 million from time to time, through at-the-market offerings or to the sales agents as principal purchasers (“ATM Offering”). The ATM Offering is being undertaken pursuant to Rule 415 and a universal shelf registration statement on Form S-3 which was declared effective by the Securities and Exchange Commission (“SEC”) on April 9, 2025. There is no commitment for future sales of additional shares under the ATM Agreement or ATM Offering.To fund its operations over the longer term, the Company will need to start generating positive cash flows, renegotiate its existing debt obligations, and raise additional capital through debt or equity financing. Management’s plans include seeking additional financing, such as issuances of equity and issuances of debt and/or convertible debt instruments. Sales of additional equity securities, convertible debt, and/or warrants by the Company could result in the dilution