GCT Semiconductor announces $11 million stock and warrant sale

SAN JOSE, Calif. - GCT Semiconductor Holding, Inc. (NYSE: GCTS), a designer and supplier of 5G and 4G semiconductor solutions, currently trading at $2.19 with a market capitalization of $106.64 million, has launched a registered direct offering of shares and warrants which is expected to close on May 16, 2025. According to InvestingPro analysis, the company shows signs of financial strain with a weak overall health score. The company is selling 7,006,370 shares of common stock and warrants to purchase up to an additional 10,509,555 shares. Each share and accompanying warrant is priced at $1.57, with the warrants exercisable at $1.71 per share six months post-issuance and expiring five years thereafter. This capital raise comes as InvestingPro data reveals the company’s challenging liquidity position, with a current ratio of 0.22 and short-term obligations exceeding liquid assets.

Roth Capital Partners is acting as the sole placement agent for the transaction. The gross proceeds from the sale are anticipated to be around $11 million, before accounting for placement agent fees and other related expenses. GCT Semiconductor intends to allocate the net proceeds for working capital and general corporate purposes.

The securities are offered via a shelf registration statement filed with the U.S. Securities and Exchange Commission (SEC) on April 1, 2025, and declared effective on April 9, 2025. The offering is made only by means of a prospectus supplement and accompanying prospectus that form part of the registration statement.

GCT Semiconductor is recognized for its fabless semiconductor solutions that have been integral to enabling 4G LTE connectivity across a range of commercial devices. The company’s solutions are known for their compact size, low power consumption, and cost-effectiveness, contributing to the global wireless carriers’ networks. Despite generating revenue of $6.36 million in the last twelve months, InvestingPro analysis indicates the company is rapidly burning through cash and remains unprofitable. For deeper insights into GCT’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The announcement includes forward-looking statements regarding the offering and the intended use of proceeds. These statements are based on the company’s current expectations and involve risks and uncertainties that could cause actual events to differ materially. These include potential delays in the closing of the offering, changes in management’s plans for the proceeds, and broader market and economic conditions.

The information provided in this article is based on a press release statement from GCT Semiconductor.

In other recent news, GCT Semiconductor Holdings Inc. reported a significant 85% decrease in net revenues for Q1 2025, totaling $500,000, compared to the previous year. The company’s gross margin also saw a substantial drop from 60% to 18%. Despite these challenges, GCT is focusing on its transition to the 5G market, with expectations of higher average selling prices for its 5G products. The company has formed strategic partnerships, including a recent letter of intent with Orbit North America to develop a mobile hotspot and gateway using its new 5G chipset. Analysts have shown interest in the potential of this partnership, which could lead to multi-product and multi-regional opportunities. GCT’s management has expressed optimism about the latter half of 2025, anticipating revenue growth driven by volume shipments of 5G chipsets. The company is also exploring operational efficiency improvements to support this transition. B. Riley Securities has taken note of these developments, with analysts inquiring about the company’s readiness for volume production and its future operational expenses.

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