GCTS 10-K & 10-Q changes, risk factors and insider trading

Investing in our securities involves risks. Before you make a decision to buy our securities, in addition to the risks and uncertainties discussed above under “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the specific risks set forth herein. If any of these risks actually occur, it may materially harm our business, financial condition, liquidity and results of operations. As a result, the market price of our securities could decline, and you could lose all or part of your investment. 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. 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.

We may encounter difficulties or challenges in satisfying our obligations under our 5G development agreements and mayin notscaling beand ablesustaining to meet the anticipated timeline for commencing shipmentcommercialization of our 5G chipsets, which may adversely affect our ability to generate revenue.

We have entered into 5G development and collaboration agreements with certain customers and operators, including a development and collaboration agreement with a Tier 1 wireless communications operator. Under these agreements, we have agreed to design, develop and collaborate with each respective customerscustomer 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. InWe thehave eventcompleted thatcertain wedevelopment completemilestones theand performancecommenced initial commercial shipments of our obligations5G chipsets to select customers. As we continue to perform under these agreements and areexpand able to commercialize and sell our products,commercialization, we may receive significant revenues and fees as a result of such agreements,fees, including but are not limited to, milestone payments upon the achievement of specified business and development objectives as well asand follow-on sales of our chipsets to ODM/ and OEM suppliers whenas products (using our chipset)chipsets related to these development agreements begins to ramp. In addition, we have previously announced that we expect to commence volume shipment of 5G chipsetsramp in the first half of 2025, which will enable us to generate significant revenue and improve our financial performance.volume.

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 andactivities, lack of cooperation by the customers or partners.partners and lack of success of our customers’ products in the marketplace. Any of these factors may adversely affect our ability to monetize these agreements and meet our anticipated product development timeline, including delays in volume shipment of 5G products, which in turn will adversely affect our financial results and results of operations.

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 our 5G solutions, our financial performance willcould be adversely affected.

We have invested substantial time and resources in developing products that support the 5G wireless communications markets,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. IfAlthough we failhave tocommenced accuratelyinitial predictcommercialization market requirements or market demand for 5G, or ifof our solutions5G are not successfully developed or adopted bysolutions, our customers,future thengrowth depends on our ability to generateaccurately revenueanticipate willcustomer berequirements, harmed.application use cases, pricing sensitivity, and end-market demand, and to scale adoption of our solutions over time. 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 if operators do not migrate to 5G as expected, we may not realize the expected benefits from this investment, which willcould have an adverse effect on our business, financial condition and results of operations.

Our products focustarget onprimarily certain segments of 5Gthe 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 conditionscondition willcould be negatively impacted. For example, our products are applicable to the FWA market, which is an innovative use case that employs 4G and 5G radio spectrum to provide wireless broadband connectivity between multiple locations and fixed points, such as a mobile network cell tower and a wireless device in a subscriber’s home. FWA provides wireless coverage where there is no fixed line or a poorwhere fixed line service,service is poor, including rural areas, where broadband access is limited. 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 market.markets. 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 slowingslowdown in demand for these applications may reduce our ability to sell our products. 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 infrastructuresinfrastructure or systems that utilize M2M wireless communications. These and other factors could adversely affect our business operations and financial conditions.condition.

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 upon the continued commercial deployment of 4G and 5G wireless communications equipment, products and services based on our technology. Deployment of new networks by wireless carriers requires significant capital expenditures, well in advance of any revenue from such networks. If the rate of deployment of new networks by wireless carriers is slower than we expect, this willcould 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. 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 ThingsIoT devices. If deployments of the Cat M or Cat NB standards are delayed or if competing standards for Internet of ThingsIoT 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. In addition, our OEM/ODM customers may experience difficulties, delays and other challenges in the transition from 4G to 5G markets, including loss of business opportunities because wireless operators decide to switch suppliers during this transition, which may cause such OEM/ODM customers to reduce demand from us. If the transition from 4G to 5G market encounters disruption or delay, or if the roll off of our 4G business occurs faster than anticipated and /or the loss of our 4G business is not immediately replaced by our 5G sales, it may have an adverse effect on our operating result and financial condition.

accurate prediction of the growth of the Internet of ThingsIoT markets and the timing of commercial availability of 4G and 5G networks;

We sell our products to OEM/ODM customers either directly or indirectly through distributors. We depend on a small number of customers for a large percentage of our annual revenue. For the year ended December 31, 2024,2025, four customers accounted for 74% of our total revenues and for year ended December 31, 2023,2024, twofour customers accounted for 38%73% of our total revenues.

We currently do not have long-term capacity agreements with our main foundries, UMC and Samsung, primarily because historically we have placed only a limited quantity of orders. Accordingly, our foundries are not obligated to perform services or supply wafers to us for any specific period, in any specific quantities, or at any specific price, except as may be provided in a particular purchase order. Foundry capacity allocated to us has in the past been reduced due to strong demand by other foundry customers. The ability of our foundry vendors to provide us with semiconductor products is limited by available capacity and existing obligations. 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. 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. In addition, we expect that we may need to secure additional capacity from our foundries in the immediate future to support increasing demand for our products, and there is no guarantee that we will be able to secure this increased capacity to meet our needs.

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.commitments. There can be no assurance that we will be able to negotiate these agreements successfully or in a timely fashion, or that any agreements we enter into will provide us with favorable pricing or sufficient capacity to meet our customer demand. Our failure to secure suitable long-term capacity agreements with our foundries may limit our ability to expand our market and may have an adverse effect on our business, financial condition and results of operations.

The semiconductor business experiences ongoing competitive pricing pressure from customers and competitors. Accordingly, any increase in the cost of our products, whether by adverse changes in purchase price or adverse manufacturing cost, will reduce our gross margins and operating profit. In general, we do not have long-term supply agreements with our foundry, test, assembly and other vendors other than a framework agreement with UMC. As a result, we typically negotiate pricing on a purchase order basis. Therefore, we may not be able to obtain price reductions or anticipate or prevent future price increases from our suppliers. 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.results, including our ability to reduce net loss and achieve profitability. See “Risk Related to Our Finances- We have a history of losses, and we may not achieve or sustain profitability in the future, on a quarterly or annual basis.”

We began operations in 1998 and have incurred losses on an annual basis since inception. We have incurred and will continue to incur significant operating losses. For the years ended December 31, 20242025 and 2023,2024, we had a net loss of $12.4$43.4 million and $22.5$12.4 million, respectively, and used cash in operating activities of $31.0$30.7 million and $8.8$31.0 million, respectively. We had short-term debt in the amount of $37.6$56.6 million and $72.3$37.6 million, including convertible promissory notes and borrowings as of December 31, 20242025 and 2023,2024, respectively. As of December 31, 20242025 and 2023,2024, we had an accumulated deficit of $562.0$605.4 million and $549.7$562.0 million, respectively and negative working capital of approximately $43.3$67.7 million and $101.8$43.3 million. 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. As a result, we could experience cash flow management problems, unexpected fluctuations in our results of operations and other difficulties, any of which would make it difficult for us to meet our debt obligations and achieve and maintain profitability.

Our consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary if we are unable to obtain adequate financing in the future. 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. The failure to raise additional capital or otherwise obtain funding for our operation will have a material adverse effect on our business, results of operations and financial position. 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. If we are unable to continue as a going concern, our stockholders may lose some or all of their investment in the Company.

Our business requires significant capital investment to carry out extensive research and development in order to remain competitive. At the same time, demand for our products is highly variable and there have been downturns. If our cash on hand, net proceeds from financing activities and cash generated from operations are not sufficient to fund our operations and capital requirements, we may be required to limit our growth, or enter into financing arrangements at unfavorable terms, any of which could harm our business and financial condition. 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.operations. We regularly consider fund raising opportunities and may decide, from time to time, to raise capital based on various factors, including market conditions and our plans of operation. We may experience difficulties in accessing the capital markets due to external factors beyond our control, such as volatility in the equity markets, the trading price and volume of our stock and general economic and market conditions both in the United States and abroad. We have utilized, and may continue to utilize, equity financing transactions, including at-the-market offerings and registered direct offerings, to raise capital. While these financing alternatives provide us with additional flexibility, our ability to raise capital through such transactions depends on market conditions, investor demand, and the trading price and liquidity of our common stock, and such transactions may result in significant dilution to existing stockholders. In addition, we rely substantially on investors, banks, lenders and partners in South Korea to provide loans and fundings tofor 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. While we currentlyhave haveentered into equity financing arrangements, including an equity line of credit (“ELOC”) that allows us to issue and sellother upequity tooffering $50 million of shares of common stock,structures, our ability to raise capital under thethese ELOCarrangements hasmay beenbe limitedconstrained due to the lowerby trading volume and volatility of tradingvolume, price ofvolatility, ourcontractual commonlimitations, stock.or market conditions. Additionally, we anticipate that strategic alliances and partnerships will be an important source of revenue and possible financing for us going forward. If we are unable to develop alliances with or otherwise attract investment from strategic partners, or if strategic partners are not willing to enter into transactions with us on favorable terms, our business and financial condition could be harmed.

As of December 31, 2024,2025, we have outstanding convertible promissory notes and borrowings with a total principal amount of $42.6$62.6 million, of which $37.6$56.6 million is contractually due within 12 months from the reporting date. We may also incur substantial additional indebtedness. Our indebtedness could have important consequences, including the following:

Prior to our Business Combination, our Common Stock was not traded in a public market. WeOur cannotcommon predictstock theis extentpublicly totraded, whichbut athere can be no assurance that an active or liquid trading market will developbe or how liquid that market might become.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. These factors include:

The semiconductor and communications industries are cyclical and have historically experienced significant fluctuationsfluctuations, withincluding prolonged downturns,downturns and periods of supply imbalance, which could impact our operating results, financial condition and cash flows.

Recently,Recent downturns in the semiconductor industry have been attributed to a variety of factorsfactors, including theglobal macroeconomic uncertainty, global/regional pandemic (i.e., SARS, COVID-19 pandemic, ongoing), trade disputes between the United States and China,geopolitical tensions, weakness in end-market demand and pricing foracross semiconductors acrosssemiconductor applications, and excess inventory.inventory levels. In addition,recent sinceperiods, the endportions of 2022, the semiconductor industry hashave experienced adownturns downturndriven due toby inventory corrections and reduced consumerdemand demands.in certain end markets, while other segments have experienced increased investment and growth. These downturnsmixed industry conditions have directly impacted our business, as well as our suppliers, distributorsdistributors, and end customers.

Changes in government trade policies, including the imposition of tariffstariffs, 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.

Legislative or regulatory initiatives related to climate changechange, as well as physical effects of climate-related events, could haveadversely a material adverse effect onaffect our business.

Our share price may be volatile and, in the past, companies that have experienced volatility in the market price of ourtheir stock have been subject to securities litigation, including class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could have a material 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 uswe make significant payments and/or could also subject us to significant liabilities.

Our Charter provide,and Bylaws provide that: unless we consentsconsent in writing to the selection of an alternative forum, (i) (a) any derivative action or proceeding brought on behalf of us,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 oursthe Company to ourthe Company or ourits stockholders, (c) any action asserting a claim against usthe Company or ourits 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 usthe 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. Nothing in our Charter or Bylaws precludes stockholders that assert claims under the Exchange Act from bringing such claims in federal court to the extent that the Exchange Act confers exclusive federal jurisdiction over such claims, subject to applicable law.

We believe our future success will depend in large part upon our ability to attract, retain and motivate highly skilled management, engineering, sales and marketing personnel. 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. We believe that our future success is dependent on the contributions of our senior management members, some of whom do not have any employment agreements. If any of these individuals were to leave unexpectedly, we could face substantial difficulty in hiring qualified successors and could experience a loss in productivity during the search for any such successor and while any successor is integrated into our business and operations.

Being a public company will increaseincreases our expensesoperating costs and administrative workloadburdens and will exposeexposes us to risks relating to compliance with public company reporting requirements, including the evaluation of our internal control over financial reporting required byunder Section 404 of the Sarbanes-Oxley Act of 2002.

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. Complying with these laws and regulations requires the time and attention of our Board and management and increases our expenses. 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 are required to complyprovide withmanagement’s assessment of the effectiveness of our internal control over financial reporting under Section 404 in our annual report for the year ending December 31, 2024.(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. In addition, failure to comply with Section 404 or the report by us of a material weakness may cause investors to lose confidence in our consolidated financial statements or the trading price of our Common Stock to decline. If we fail to remediate any material weakness, our consolidated financial statements may be inaccurate, our access to the capital markets may be restricted and the trading price of our Common Stock may decline.

AsWe a public company, we will beare required to report, among other things,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. A “control deficiency” exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A “significant deficiency” is a control deficiency, or combination of control deficiencies, that adversely affects the ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles that results in more than a remote likelihood that a misstatement of financial statements that is more than inconsequential will not be prevented or detected. 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.

Attempts by others to gain unauthorized access to our information technology systems are becoming more sophisticated.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. Hackers may also develop and deploy viruses, worms and other malicious software programs that attack or otherwise exploit security vulnerabilities in our systems or products. Cybersecurity incidents may also arise from insider threats, inadvertent employee actions, or vulnerabilities in third-party software, cloud services, or service providers. Attacks may create system disruptions, cause shutdowns or result in the corruption of our engineering data, which could result in delays in product development or software updates and harmadversely affect our business. Cybersecurity incidents could also disrupt our manufacturing operations, supply chain, customer support, or other business processes. Additionally, the theft, unauthorized use or publication of our intellectual property and/or confidential business information could harm our competitive position, reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business. 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.result, including contractual claims, litigation, or regulatory investigations. We could also suffer monetary and other losses, including reputational harm, whichand costsloss of customer confidence, and we may not be able to recover.recover all such costs or losses through insurance or other means. 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.effects for an extended period of time. While we have identified some incidents involving attempts at unauthorized access,access weto our systems and are not aware of any that have succeeded.been Whilesuccessful, we havecannot not experienced any cybersecurity breaches that materially affected our operations, there is no guaranteeassure that we will not occurexperience a cybersecurity incident that could materially affect our operations in the future. 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. Further, cybersecurity incidents affecting third parties could lead to interruptions in their operations, delays in their product development or procurement activities, or reduced demand for our products. We expect to continue to devote resources to the security of our information technology systems.

This discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024, and related notes included in this Annual Report on Form 10-K.10-K (the “Annual Report”). This discussion may contain forward-looking statementsstatements, including, but not limited to, our expectations or predictions of future financial or business performance or conditions. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. You should read the sections in this Annual Report titled “Risk Factors” and “Special Note of Forward-Looking Statements” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by these forward-looking statements. Unless otherwise indicated, the terms “GCT,” “the Company,” “we,” “us,” or “our” refer to GCT Semiconductor Holding Inc., a Delaware corporation, together with our consolidated subsidiaries.

We are a fabless semiconductor company that specializes in the design, manufacturingmanufacturing, 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. We have successfully developed and supplied communication semiconductor chipsets and modules to leading wireless operators worldwide, as well as to original design manufacturers (“ODMs”) and original equipment manufacturers (“OEMs”) for portable wireless routers (e.g., Mobile Router (“MiFi”)), indoor and outdoor fixed wireless routers (e.g., customer premise equipment (“CPE”)), industrial machine-to-machine (“M2M”) applications and smartphones.

Our current product portfolio includes RF and modem chipsets based on 4th generation (“4G”), known as Long Term Evolution (“LTE”), technology offering a variety of chipsets differentiated by speed and functionality. These include 4G LTE, 4.5G LTE Advanced (twice the speed of LTE), and 4.75G LTE Advanced-Pro (four times the speed of LTE) chipsets. The Company also develops and sells cellular Internet of Things (“IoT”) chipsets for low-speed mobile networks such as eMTC/NB- IOT/Sigfox, and other network protocols. 5G chipset added to portfolio recently with commercial shipments in the fourth fiscal quarter of 2025.

Even as more and more applications are deployed on 5G networks, we nonethelessbelieve anticipate continuedthat demand for our existing 4G LTE product lineup (4.75G/4.5G/4G, etc.) forwill the foreseeable future,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. We expectcommenced introductionour first production shipments of our 5G products beginning in the firstlast halfquarter of 2025. Also, we expect the average sales prices for our 5G chipset to be approximately four times that of our 4G chipset, resulting in a significant increase in revenue and gross margins. We plan to continuously expand our product lineup to support 5G chipsets for future applications such as vehicle-to-everything standard (e.g., C-V2X), 5G-based satellite communication (e.g., Non-Terrestrial Network), and 5G-based IoT standard (e.g., RedCap). Our current chipset products are used in a wide variety of applications, including fixed wireless subscriber terminals (e.g., CPE), mobile wireless routers (e.g., Mobile Router/MiFi), various communication modules and devices, and industrial products.

Since inception, we have financed our operations primarily through cash receipts from customers, the issuance of convertible promissory notes, borrowings, and the issuance of capital stock, and the exercise of stock options.stock.

Our business depends upon the continued commercial deployment of 4G and 5G wireless communications equipment, products, and services based on GCT’s technology. Deployment of new networks by wireless carriers requires significant capital expenditures well in advance of any revenue from such networks. If the rate of deployment of new networks by wireless carriers is slower than our expectation, this will reduce the sales of its products andfor coulduse causeon these networks by OEMs and ODMs tothat holduse excessGCT inventory.technology. This would harm our revenues and our financial results. The worldwide commercial deployment and adoption of the narrow band LTE variants, Cat M and Cat NB, are expected to further expand further the markets for Internet of ThingsIoT devices. If deployments of the Cat M or Cat NB standards are delayed or if competing standards for Internet of ThingsIoT 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. 5G RedCap and eRedCap appear to be of great interest to wireless carriers, although adoption is limited at this early stage. If an alternative were to appear in the short-to-mid-term this could result in reduced long-term demand for our RedCap and eRedCap chipsets. It should also be noted that RedCap and eRedCap is expected to be a replacement for CatM, Cat1bis and some Cat4 thus eventually reducing demand for the LTE IoT chipsets.

accurate prediction of the growth of the Internet of ThingsIoT markets and the timing of commercial availability of 4G and 5G networks;

DownturnsRecent downturns in the semiconductor industry have been attributed to a variety of factors, including theglobal COVID‑19macroeconomic pandemic,uncertainty, ongoingglobal/regional pandemic (i.e., SARS, COVID-19), trade disputes between the United States and China,geopolitical tensions including tariffs, weakness in end-market demand and pricing foracross semiconductors acrosssemiconductor applications, and excess inventory.inventory levels. In addition,recent fromperiods, the endportions of 2022, the semiconductor industry have experienced adownturns downturndriven due toby inventory corrections and reduced consumerdemand demands.in certain end markets, while other segments have experienced increased investment and growth. These downturnsmixed industry conditions have directly impacted GCT’sour business, as well as our suppliers, distributors, and end customers. More recently the semiconductor industry has normalized however there have been lingering effects that continue to effect certain segments including that for 4G LTE, where channel inventories continue to exist and where demand has been reduced due to expedited customer transition from 4G LTE to 5G.

Because a significant portion of our expenses are fixed in the near term or are incurred in advance of anticipated sales, we may not be able to reduce our expenses rapidly enough to offset any unanticipated shortfall in revenue. If this situation were to occur, it could adversely affect our operating results, cash flow, and financial condition. 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,United Microelectronics Corporation, Samsung and TSMC,Taiwan Semiconductor Manufacturing Corporation, for the manufacturing and supplies of its wafers and products. We do not have any formal foundry agreements that guarantee a minimum level of manufacturing capacity. In times of significant increasing demand for capacity, these foundries may experience production shortages and may not allocate sufficient manufacturing capacity to us. If this happens, we may not be able to produce sufficient quantities of our products to meet the increased demand. Any disruption in our supply chain can make it more difficult for us to obtain sufficient wafer, assembly, and test resources from our subcontract manufacturers. Any factor adversely affecting the semiconductor industry in general, or the particular segments of the industry that our products target, may adversely affect our ability to generate revenue and impact our operating results.

In addition, a shortage of manufacturing capacity can also impact the product development strategies of our major customers, which may, in turn, affect our business operations. For example, in 2022, the supply shortage caused our largest customer to change its priority on product development from 4G to the next generation of 5G products,products (at a time when our 5G product was not available), which resulted in the reduction of 4G activity and a decline in demand for our products. Our business is expected to increase again with this customer after the launch of our 5G products.

Our cost of net revenues consists of product and service costs. The cost of product net revenues consists of direct and indirect costs related to the manufacturing of our products. Direct costs include wafer costs and costs of assembly and testing performed by third-party contract manufacturers. Indirect costs consist of provisions for excessexcess, 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. Shipping and handling costs incurred for inventory purchases related to the units sold and costs of product shipments are also recorded in the cost of net product revenues. Service costs consist of non-recurring engineering costs for service projects.

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 developmentR&D services received in prior years.

Comparison ofFor the Years Ended December 31, 20242025 and 20232024

Net revenues decreased by $6.9$6.3 million, or 43%,69%, from $16.0 million for the year ended December 31, 2023 to $9.1 million for the year ended December 31, 2024.2024 Theto decrease$2.9 million for the year ended December 31, 2025. This change was due to a decrease of $6.2$3.6 million in product sales and a decrease of $0.7$2.6 million in service revenue.revenues.

ServiceProduct revenuessales decreased by $0.7$3.6 million, or 14%,76%, from $5.1$4.8 million for the year ended December 31, 20232024 to $4.4$1.1 million for the year ended December 31, 2024.2025. ThisThe decrease was due to the timing and scopesales of our service5G projectsplatforms forcontributed LTE$3.9 products.million to our product sales during the year ended December 31, 2024, and there were no 5G platform sales during the year ended December 31, 2025.

Cost of net revenues decreasedincreased by $5.2$0.6 million, or 56%,16%, from $9.3 million for the year ended December 31, 2023 to $4.1 million for the year ended December 31, 2024,2024 drivento primarily$4.7 bymillion for the reductionyear inended ourDecember product31, sales.2025.

Service costs decreased by $0.4$0.9 million, or 22%,57%, from $2.0 million for the year ended December 31, 2023 to $1.5 million for the year ended December 31, 2024.2024 to $0.7 million for the year ended December 31, 2025. This decrease in service costs was drivencommensurate primarily bywith the reductionlevel inof direct costs as we were engaged inour service projectsproject with lower scope.activity.

Research and development expenses increaseddecreased by $6.6$3.3 million, or 62%19% from $10.7 million for the year ended December 31, 2023 to $17.3 million for the year ended December 31, 2024,2024 primarilyto in$14.0 connectionmillion withfor ourthe developmentyear projects.ended December 31, 2025. This increase reflects our 5G development program launched during 2024 andchange was primarily duedriven by the completion of a 5G chip design project, which led to a $4.1$3.3 million reduction in professional services from Alpha, and a $1.6 million decrease in the project-specific intellectual property expenses incurred in 2024. This reduction was partially offset by a $0.9 million increase in researchpersonnel-related andcosts development expenses mainly relateddue to professional services provided by Alpha related to the design of 5G chip products, a $2.0 millionan increase in development expenses related to our new 5G chip products,headcount, a $0.5$0.3 million increase in stock-based compensation expense due to issuance and vesting of share-based awards, and a $0.4 million increase in allocated overheads, partially offset by a $0.2 million decrease in pre-production costs and aengineering $0.2supplies millionrelated reductionto inour support5G and maintenance.initiatives.

Interest expense decreasedincreased by $2.4$2.2 million, or 38%,56%, from $6.2 million for the year ended December 31, 2023 to $3.9 million for the year ended December 31, 2024.2024 to $6.0 million for the year ended December 31, 2025. The decrease of $2.4 millionincrease was primarily due to the conversionincrease of significant amounts ofin outstanding convertible notes upon the closing of the Business Combination.debt.

Gain (Loss) on foreignForeign currencyCurrency transactions,Transactions, net

Gain on foreignForeign currency transactions increasedresulted byin $4.4a million,loss orof 1,663%, from $0.3$0.8 million for the year ended December 31, 20232025 toand a gain of $4.7 million for the year ended December 31, 2024. ThisThe increaseprimary offactor $4.4behind millionthese wasfluctuations 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 ofis our debtterm areloans portfolio, which is largely denominated in the South Korean Wons,won. theseThe trends have resultedloss in significant realized and unrealized gains during the year ended December 31, 2024.2025 was driven by the depreciation of the U.S. dollar against the South Korean won, while the gain in the year ended December 31, 2024 was attributable to the appreciation of the U.S. dollar against the South Korean won.

LossThe from changeschange in fair value of convertiblecommon promissorystock noteswarrant wasliabilities $1.4resulted in a $0.9 million gain for the year ended December 31, 20232025 and $1.5a $2.2 million gain for the year ended December 31, 2024. These lossesgains was primarily driven by changes in each year were derived from the fair value measurement and related assumptions, 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 yearrespective ended December 31, 2024.periods.

Since inception, we have financed our operations primarily through cash receipts from customers, the issuance of convertible promissory notes, borrowings, the issuance of capital stock, and 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”).options.

With limited exceptions, we have incurredincurred, and expect that we willto continue to incurincur, significant operating losses. For the years ended December 31, 20242025 and 2023,2024, we had a net loss of $12.4$43.4 million and $22.5$12.4 million, respectively, and used cash in operating activities of $31.0$30.7 million and $8.8$31.0 million, respectively. As of December 31, 20242025 and 2023,2024, we had an accumulated deficit of $562.0$605.4 million and $549.7$562.0 million, respectively. Our consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assetsassets, or on the amounts and classification of liabilitiesliabilities, that might be necessary if we are unable to obtain adequate financing in the future. We undertake various activities to finance our operations, as further discussed below.

This discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements as of and for the three and six months ended MarchJune 31,30, 2026 and related notes appearing elsewhere in this quarterly report on Form 10-Q (“Quarterly Report”) and our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 and related notes included in our Form 10‑K (“Annual Report”), filingfiled with the Securities and Exchange Commission (“SEC”) on March 25, 2026.

Our current product portfolio includes RF and modem chipsets based on 4th generation (“4G”), known as Long Term Evolution (“LTE”), technology offering a variety of chipsets differentiated by speed and functionality. These include 4G LTE, 4.5G LTE Advanced (twice the speed of LTE), and 4.75G LTE Advanced-Pro (four times the speed of LTE) chipsets. The Company also develops and sells cellular Internet of Things (“IoT”) chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols. 5G chipset was added to our portfolio recently, with commercial shipments in the fourth fiscal quarter of 2025.

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. We commenced our first production shipments of our 5G products in the last quarter of 2025. Also,We wealso expect the average sales prices for our 5G chipset to be approximately four times that of our 4G chipset, resulting in a significant increase in revenue and gross margins. We plan to continuously expand our product lineup to support 5G chipsets for future applications such as vehicle-to-everything standard (e.g., C-V2X), 5G-based satellite communication (e.g., Non-Terrestrial Network), and 5G-based IoT standard (e.g., RedCap). Our current chipset products are used in a wide variety of applications, including fixed wireless subscriber terminals (e.g., CPE), mobile wireless routers (e.g., Mobile Router/MiFi), various communication modules and devices, and industrial products.

Our business depends upon the continued commercial deployment of 4G and 5G wireless communications equipment, products, and services based on GCT’s technology. Deployment of new networks by wireless carriers requires significant capital expenditures well in advance of any revenue from such networks. If the rate of deployment of new networks by wireless carriers is slower than our expectation, this will reduce the sales of products for use on these networks by OEMs and ODMs that use GCT technology. This would harm our revenues and our financial results. The worldwide commercial deployment and adoption of the narrow bandnarrowband LTE variants, Cat M and Cat NB, are expected to further expand the markets for IoT devices. 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. 5G RedCap and eRedCap appear to be of great interest to wireless carriers, although adoption is limited at this early stage. If an alternative were to appear in the short-to-mid-term this could result in reduced long-term demand for our RedCap and eRedCap chipsets. It should also be noted that RedCap and eRedCap isare expected to be a replacementreplacements for CatM, Cat1bis and some Cat4 thus eventually reducing demand for the LTE IoT chipsets.

The markets in which weour customers and our customerswe compete or plan to compete are characterized by rapidly changing technologies, industry standards, and technological obsolescence. Our ability to compete successfully depends on our ability to design, develop, market, and support new products and enhancements on a timely and cost-effective basis. A fundamental shift in technologies in any of our target markets, such as the 5G wireless communications markets, could harm our competitive position within these markets. Our failure to anticipate these shifts, develop new technologies, or react to changes in existing technologies could delay our development of new products, which could result in product obsolescence, decreased revenue, and loss of design wins.

Recent downturns in the semiconductor industry have been attributed to a variety of factors, including global macroeconomic uncertainty, trade and geopolitical tensionstensions, including tariffs, weakness in end-market demanddemand, and pricing across semiconductor applications. In recent periods, portions of the semiconductor industry have experienced downturns driven by inventory corrections and reduced demand in certain end markets, while other segments have experienced increased investment and growth. These mixed industry conditions have impacted our business, as well as our suppliers, distributors, and end customers.

Because a significant portion of our expenses are fixed in the near term or are incurred in advance of anticipated sales, we may not be able to reduce our expenses rapidly enough to offset any unanticipated shortfall in revenue. If this situation were to occur, it could adversely affect our operating results, cash flow, and financial condition. 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 suppliessupply of itsour wafers and products. We do not have any formal foundry agreements that guarantee a minimum level of manufacturing capacity. In times of significantsignificantly increasing demand for capacity, these foundries may experience production shortages and may not allocate sufficient manufacturing capacity to us. If this happens, we may not be able to produce sufficient quantities of our products to meet the increased demand. Any disruption in our supply chain can make it more difficult for us to obtain sufficient wafer, assembly, and test resources from our subcontract manufacturers. Any factor adversely affecting the semiconductor industry in general, or the particular segments of the industry that our products target, may adversely affect our ability to generate revenue and impact our operating results.

Our cost of net revenues consists of product and service costs. The cost of product net revenues consists of direct and indirect costs related to the manufacturing of our products. Direct costs include wafer costs and costs of assembly and testing performed by third-party contract manufacturers. Indirect costs consist of provisions for excess, slow movingslow-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. Shipping and handling costs incurred for inventory purchases related to the units sold and costs of product shipments are also recorded in the cost of net product revenues. Service costs consist of non-recurring engineering costs for service projects.

For the Three Months Ended MarchJune 31,30, 2026 and 2025

Net revenues increaseddecreased by $1.4$0.2 million, from $0.5$1.2 million for the three months ended MarchJune 31,30, 2025 to $1.9$1.0 million for the three months ended MarchJune 31,30, 2026. This change was due to ana increasedecrease of $0.4 million in product sales and $1.0$0.2 million in service revenues.

Service revenues increaseddecreased by $1.0$0.2 million, from $0.4$0.8 million for the three months ended MarchJune 31,30, 2025 to $1.4$0.6 million for the three months ended MarchJune 31,30, 2026. The increasedecrease was primarily due to the addition of 5G revenue during the three months ended March 31, 2026, which contributed $1.4 million to our service revenue, and there was no 5G service revenue during the three months ended March 31, 2025. This increase was partially offset by a $0.4$0.8 million decrease in LTE service revenue as our service project portfolio shifted to 5G service offerings.offerings, partially offset by a $0.6 million increase in 5G service revenue.

Cost of net revenues increased by $0.6$0.4 million, from $0.4$0.8 million for the three months ended MarchJune 31,30, 2025 to $1.0$1.2 million for the three months ended MarchJune 31,30, 2026. This increase was primarily driven by higher direct costs resulting from increased unit volume.

Product costs increased by $0.7$0.5 million, from $0.2$0.6 million for the three months ended MarchJune 31,30, 2025 to $0.9$1.0 million for the three months ended MarchJune 31,30, 2026. The increase was primarily attributable to a $0.4 million increase in higher platformmanufacturing costs fordriven LTEby the ramp-up of 5G production and 5Grelated products, to support increased sales volumes. Additionally,reduced production overheadyields, andas depreciationwell chargesas increased bya $0.2 million eachincrease duringin the three months ended March 31, 2025, which was primarilydepreciation related to 5G equipmentmask and overheads.sets.

Changes in service costs were nominal.not material.

Research and development expenses decreased by $0.9$0.2 million, from $4.1$3.5 million for the three months ended MarchJune 31,30, 2025 to $3.2$3.3 million for the three months ended MarchJune 31,30, 2026. ThisThe decrease was primarily driven by a $0.5 million reduction in project-specific intellectual property expenses incurred in the first fiscal quarter of 2026 and a $0.4 million reduction in professional services provided by Alpha for the design of 5G chip products after the completion of this development project in the second quarter of 2025.2025, and a $0.1 million decrease in stock-based compensation expense. These decreases were partially offset by a $0.4 million increase in payroll-related costs.

Sales and marketing expenses remained consistent at $1.2$1.1 million and $1.1$1.0 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Interest expense increaseddecreased by $0.7$0.3 million, from $1.1$1.5 million for the three months ended MarchJune 31,30, 2025 to $1.8$1.2 million for the three months ended MarchJune 31,30, 2026. This increase was2026, primarily due to thelower penalties incurred on ouraverage outstanding loansdebt thatbalances areresulting pastfrom theirdebt maturityrepayments dates.made since June 30, 2025.

Gain (Loss) on Foreign Currency Transactions, net

Foreign currency transactions resulted in a gain of $2.6$0.8 million for the three months ended MarchJune 31,30, 2026 and a nominalloss gainof $3.2 million for the three months ended MarchJune 31,30, 2025. The primary factor behind these fluctuations is our term loans portfolio, which is largely denominated in the South Korean won. The gain inDuring the firstsecond quarter of 2026 was driven by higher appreciation of the U.S. dollar against2025, the South Korean won comparedappreciated toagainst the firstU.S. dollar, resulting in foreign currency losses, while during the second quarter of 2025.2026, the South Korean won depreciated against the U.S. dollar, resulting in foreign currency gains.

Losses from changes in fair value of convertible promissory notes were $1.3$1.5 million and nominal$0.2 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. ThisThe increase in expense was primarily attributable to the change in fair value of the Indigo Note recognized prior to its conversion during the first fiscal quarter of 2026 reflected the fair value adjustment of the notes and the associated discount at the time of settlement of common stock.2026.

With limited exceptions, we have incurred, and expect to continue to incur, significant operating losses. For the threesix months ended MarchJune 31,30, 2026,2026 and 2025, we had a net loss of $9.9$30.2 million.million and $20.5 million, respectively. For the threesix months ended MarchJune 31,30, 2026,2026 and 2025, we used $7.4$24.0 million and $16.6 million in cash in operating activities.activities, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $615.3$635.6 million. Our unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or on the amounts and classification of liabilities, that might be necessary if we are unable to obtain adequate financing in the future. We undertake various activities to finance our operations, as further discussed below.

In April 2025, we executedentered into an at-market issuance sales agreement (“ATM Agreement”) with B. Riley Securities, Inc. and H.C. Wainwright & Co., LLC, acting as sales agents.agents, The ATM Agreement allows uspursuant to which we may sell shares of our 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”). In June 2026, we amended the ATM Agreement to increase the maximum aggregate gross proceeds from $75.0 million to $120.0 million. As there is no commitment for future sales of additional shares under the ATMat-market Agreementissuance sales agreement or the ATM Offering, we cannot predict how much, if any, additional proceeds may be realized. During the threesix months ended MarchJune 31,30, 2026, we received net proceeds of approximately $12.3$53.8 million in cash related to the ATM Offering.

In November and December 2024, we entered into term loan agreements with Dr. Kyeongho Lee (“Kyeongho Lee”), the chairman of our board of directors, pursuant to which we borrowed $2.9 million and $2.1 million, originally maturing in December 2024 and January 2025, respectively. In October 2025, we partially repaid to Kyeongho Lee $1.4 million of the term loans originally entered into in December 2024. In January and April 2026, we partially repaid to Kyeongho Lee $0.9 million and $1.2 million of the term loan originally entered in November 2024. TheIn remainderJune 2026, we fully paid off the remaining loan of the$0.7 term loansmillion originally entered into in November and2024. The remainder of the term loan originally entered into in December 2024 areis outstanding as of MarchJune 31,30, 2026. In January 2025, we entered into a term loan agreement with Kyeongho Lee, pursuant to which we borrowed $4.4 million maturing in February 2025, which remained outstanding as of MarchJune 31,30, 2026. For the threesix months ended MarchJune 31,30, 2026, we incurred penalties of 3% of principal per month on loans in the amount of $0.6$1.1 million that are past their maturity dates, calculated daily until the principal and accrued interest are paid. Outstanding penalties payable to Kyeongho Lee as of MarchJune 31,30, 2026 are $2.7$1.5 million.

In December 2024, we entered into a term loan agreement with Anapass, Inc., our major stockholder, pursuant to which we borrowed $3.4 million maturing in December 2025. In March 2025, we entered into a term loan agreement with Anapass, Inc., pursuant to which we borrowed $3.1 million maturing in March 2026. In July 2025, we entered into a term loan agreement with Anapass, Inc., pursuant to which we borrowed $2.1 million maturing in July 2026. In July 2026, we executed an amendment with Anapass, Inc. to extend the maturity date from July 2026 to July 2027 for the term loan with a principal amount of $2.1 million. In August 2025, we entered into a term loan agreement with Anapass, Inc., pursuant to which we borrowed $1.4 million maturing in August 2026. In August 2026, we executed an amendment with Anapass, Inc. to extend the maturity date from August 2026 to August 2027 and change the annual interest rate from 6.5% to 7.0%. In September 2025, we entered into a term loan agreement with Anapass, Inc., pursuant to which we borrowed $10.7 million maturing in September 2026. In July 2025, we executed an amendment with Anapass, Inc. to extend the maturity date of a term loan, originally entered into in July 2016 with a principal of $4.5 million, from July 2025 to July 2026. In November 2025, we executed an amendment with Anapass, Inc. to extend the maturity date of a term loan, originally entered into in May 2022 with a principal of $2.2 million, from November 2025 to November 2026. In December 2025, we executed an amendment with Anapass, Inc. to extend the maturity date of the term loan originally entered into in December 2024 with a principal of $3.4 million from December 2025 to December 2026. In March 2026, we executed an amendment with Anapass, Inc. to extend the maturity date of the term loan originally entered into in March 2025 with a principal of $3.1 million from March 2026 to March 2027 and change the annual interest rate from 6.5% to 7.0%. In July 2026, we partially repaid KRW 2.0 billion ($1.3 million) of the promissory note issued to Anapass, Inc. and entered into an amendment with Anapass, Inc. to extend the maturity date of the promissory note with the remaining outstanding principal of KRW 4.0 billion ($2.6 million) from July 2026 to July 2027 and change the annual interest rate from 5.5% to 7.0%.

In December 2025, we issued two Indigo Notes, each with a principal amount of $1.0 million, and received gross proceeds of $1.9 million, reflecting the discount at issuance. In December 2025, the first Indigo Note was converted into 903,710 shares of our common stock. During the threesix months ended MarchJune 31,30, 2026, we issued three Indigo Notes, each with a principal amount of $1.0 million, and received gross proceeds of $2.8 million, reflecting the discount at issuance. During the threesix months ended MarchJune 31,30, 2026, the Indigo Notes with principal amount of $4.0 million converted into 4.4 million shares of common stock. No Indigo Notes remained outstanding as of MarchJune 31,30, 2026.

In March 2026, we entered into a convertible promissory note purchase agreement with Obsidian Global GP, LLC (“Obsidian”), which provides for the issuance of convertible promissory notes of up to $20.0 million in aggregate (“Obsidian Notes” or “Obsidian Facility”). Through MarchJune 31,30, 2026, no Obsidian Notes have been issued.

Each Obsidian Note will be issued at a purchase price equal to 96.5% of its principal amount. Each Obsidian Note will mature 24 months from its issuance date and is convertible into our common stock at any time on or before its maturity date unless redeemed by us. The conversion price is 95% of the reference price, which is calculated as the lowestaverage VWAP of our common stock over the three trading days prior to the submission of a conversion notice by Obsidian. No interest is payable on the Obsidian Notes, and we have an optional redemption right beginning 12 months following the issuance of the Obsidian Notes. Redemption between 12 and 18 months from issuance carries a 7% premium on the principal amount redeemed, increasing to 14% if redeemed between 18 months and maturity.