Company Overview - GCT Semiconductor Holding, Inc. is a leading fabless designer and supplier of advanced 5G and 4G LTE semiconductor solutions [6] - The company's solutions enable fast and reliable 4G LTE connectivity for various commercial devices, including CPEs, mobile hotspots, routers, M2M applications, and smartphones [6] - GCT's system-on-chip solutions integrate radio frequency, baseband modem, and digital signal processing functions, providing complete 4G and 5G platform solutions with small form factors, low power consumption, high performance, high reliability, and cost-effectiveness [6] Upcoming Events - GCT's management team will present at the 2025 Annual Gateway Conference on September 3rd at 9:00 a.m. Pacific Time at the Four Seasons Hotel in San Francisco, CA [2] - The presentation will be available as a webcast and GCT executives will be available for one-on-one meetings on September 3-4 [2] - GCT will also participate in the H.C. Wainwright 27th Annual Global Investment Conference on September 8th at the Lotte New York Palace Hotel, NY, with executives available for one-on-one meetings throughout the day [4]

Core Insights - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List, indicating a significant negative outlook for these companies [1][2][3] Company Summaries - **SoundThinking, Inc. (SSTI)**: A public safety technology company that provides solutions and advisory services for law enforcement. The Zacks Consensus Estimate for its current year earnings has been revised downward by 80.8% over the last 60 days [1] - **INPLAY OIL CP (IPOOF)**: Engaged in exploring, developing, and producing oil and natural gas, primarily in western Canada. The Zacks Consensus Estimate for its current year earnings has been revised downward by almost 78.3% over the last 60 days [2] - **GCT Semiconductor Holding, Inc. (GCTS)**: A fabless designer and supplier of advanced semiconductor solutions for LTE, IoT, and 5G technologies. The Zacks Consensus Estimate for its current year earnings has been revised downward by almost 62.5% over the last 60 days [3]

Financial Performance - GCT Semiconductor Holding, Inc. reported a quarterly loss of $0.26 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.14, and compared to a loss of $0.02 per share a year ago, indicating a significant decline in performance [1] - The company posted revenues of $1.18 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 47.7%, and down from $1.47 million in the same quarter last year [2] - Over the last four quarters, GCT Semiconductor has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - GCT Semiconductor shares have lost approximately 41.6% since the beginning of the year, contrasting with the S&P 500's gain of 8.4% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.11 on revenues of $6.97 million, and for the current fiscal year, it is -$0.48 on revenues of $20.92 million [7] Industry Outlook - The Electronics - Semiconductors industry, to which GCT Semiconductor belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact GCT Semiconductor's stock performance [5]

Financial Data and Key Metrics Changes - Net revenues decreased by $300,000 or 19% from $1,500,000 for the three months ended June 30, 2024, to $1,200,000 for the three months ended June 30, 2025 [7] - Cost of net revenues increased by $300,000 or 47% from $500,000 for the three months ended June 30, 2024, to $2,800,000 for the three months ended June 30, 2025 [8] - Gross margin decreased to 32% for the three months ended June 30, 2025, from 63% for the three months ended June 30, 2024 [8] Business Line Data and Key Metrics Changes - Service revenue decreased by $700,000, partially offset by an increase of $400,000 in product sales driven by four GS chipset sales [7] - Research and development expenses decreased by $700,000 or 16% from $4,200,000 for the three months ended June 30, 2024, to $3,500,000 for the three months ended June 30, 2025 [9] - General and administrative expenses increased by $600,000 or 20% from $2,900,000 for the three months ended June 30, 2024, to $3,400,000 for the three months ended June 30, 2025 [9] Market Data and Key Metrics Changes - The average selling price of the five GS chipset is expected to be roughly four times that of traditional four GS products [6] Company Strategy and Development Direction - The company is focused on the commercialization of its five GS chipset, with initial samples delivered to lead customers and production expected to commence in the third quarter [4][5] - Collaboration with Iridium Communications and G plus D aims to enhance the five G platform and expand into non-terrestrial network space [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a stronger end of the year as five GS chipset sales are expected to commence soon [6] - The company anticipates operational efficiencies to improve as revenue increases with the transition to five GS product sales [8] Other Important Information - The company ended the quarter with cash and cash equivalents of $1,300,000, net accounts receivable of $3,800,000, and net inventory of $3,000,000 [10] - The company received $11,000,000 in gross proceeds from a registered direct offering, primarily used for five GS chipset sampling and debt retirement [10] Q&A Session Summary - No questions were raised during the Q&A session, and the meeting concluded without any inquiries [14]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section provides GCT Semiconductor's unaudited condensed consolidated financial statements and detailed notes for Q2 2025 and prior periods [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details GCT Semiconductor's assets, liabilities, and stockholders' deficit for the reported periods Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | **Assets** | | | | Total current assets | $15,746 | $17,591 | | Total assets | $17,619 | $19,897 | | **Liabilities** | | | | Total current liabilities | $74,044 | $60,922 | | Total liabilities | $87,595 | $79,212 | | **Stockholders' Deficit** | | | | Total stockholders' deficit | $(69,976) | $(59,315) | - Total assets decreased by **$2,278 thousand** from December 31, 2024, to June 30, 2025, primarily due to a decrease in current assets[15](index=15&type=chunk) - Total liabilities increased by **$8,383 thousand**, driven by a significant increase in current liabilities, particularly borrowings and current convertible promissory notes[15](index=15&type=chunk) - Stockholders' deficit worsened by **$10,661 thousand**, reflecting accumulated losses[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents GCT Semiconductor's revenues, expenses, and net loss for the reported periods Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total net revenues | $1,182 | $1,468 | $1,678 | $4,733 | | Gross profit | $378 | $921 | $466 | $2,874 | | Total operating expenses | $7,970 | $8,000 | $15,798 | $2,717 | | Loss from operations | $(7,592) | $(7,079) | $(15,332) | $157 | | Net loss | $(13,538) | $(1,043) | $(20,506) | $(286) | | Basic and diluted net loss per common share | $(0.26) | $(0.02) | $(0.41) | $(0.01) | - Net revenues decreased by **19%** for the three months ended June 30, 2025, and by **65%** for the six months ended June 30, 2025, compared to the respective prior-year periods[17](index=17&type=chunk) - Net loss significantly increased to **$(13,538) thousand** for Q2 2025 from **$(1,043) thousand** for Q2 2024, and to **$(20,506) thousand** for YTD 2025 from **$(286) thousand** for YTD 2024[17](index=17&type=chunk) - Operating expenses for the six months ended June 30, 2025, increased by **481%** to **$15,798 thousand**, largely due to the absence of a significant gain on extinguishment of liability recognized in the prior year[17](index=17&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents GCT Semiconductor's comprehensive income or loss, including foreign currency adjustments Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(13,538) | $(1,043) | $(20,506) | $(286) | | Foreign currency translation adjustment | $(1,692) | $708 | $(1,743) | $1,772 | | Comprehensive income (loss) | $(15,230) | $(335) | $(22,249) | $1,486 | - Comprehensive loss significantly increased for both the three and six months ended June 30, 2025, primarily driven by the increased net loss and negative foreign currency translation adjustments[20](index=20&type=chunk) [Condensed Consolidated Statements of Stockholders' Deficit](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) This section details changes in GCT Semiconductor's stockholders' deficit for the reported periods Condensed Consolidated Statements of Stockholders' Deficit (in thousands) | Metric (in thousands) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Common Stock (shares) | 47,987 | 55,784 | | Common Stock (amount) | $5 | $6 | | Additional Paid-In Capital | $501,195 | $512,782 | | Accumulated Other Comprehensive Income (Loss) | $1,518 | $(225) | | Accumulated Deficit | $(562,033) | $(582,539) | | Total Stockholders' Deficit | $(59,315) | $(69,976) | - The total stockholders' deficit increased from **$(59,315) thousand** at December 31, 2024, to **$(69,976) thousand** at June 30, 2025, primarily due to net losses incurred[23](index=23&type=chunk) - Additional paid-in capital increased by **$11,587 thousand**, reflecting proceeds from common stock issuances, including a registered direct offering and at-market agreement[23](index=23&type=chunk) - Common stock shares outstanding increased from **47,987 thousand** to **55,784 thousand**, driven by various equity issuances[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents GCT Semiconductor's cash flows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(16,589) | $(24,062) | | Net cash used in investing activities | $(209) | $(131) | | Net cash provided by financing activities | $16,128 | $27,860 | | Net increase (decrease) in cash and cash equivalents | $(169) | $3,777 | | Cash and cash equivalents at end of period | $1,266 | $4,035 | - Net cash used in operating activities decreased from **$(24,062) thousand** in H1 2024 to **$(16,589) thousand** in H1 2025[26](index=26&type=chunk) - Net cash provided by financing activities decreased from **$27,860 thousand** in H1 2024 to **$16,128 thousand** in H1 2025, reflecting lower proceeds from reverse recapitalization and convertible notes compared to the prior year[26](index=26&type=chunk) - Cash and cash equivalents at the end of the period decreased to **$1,266 thousand** as of June 30, 2025, from **$4,035 thousand** as of June 30, 2024[26](index=26&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of GCT Semiconductor's accounting policies and financial components [1. Organization and Liquidity](index=11&type=section&id=1.%20Organization%20and%20Liquidity) GCT Semiconductor, a fabless 5G/4G company, faces going concern doubts due to a **$582.5 million accumulated deficit** and **$1.3 million cash**, despite recent equity funding - GCT Semiconductor Holding, Inc. is a fabless semiconductor company focused on 5G/4G communication technologies[28](index=28&type=chunk) - The company completed a reverse recapitalization on March 26, 2024, and its common stock trades on the NYSE under 'GCTS'[29](index=29&type=chunk)[30](index=30&type=chunk) - As of June 30, 2025, the company had an accumulated deficit of **$582.5 million** and cash and cash equivalents of **$1.3 million**, indicating substantial doubt about its going concern ability[31](index=31&type=chunk) - Common Stock Purchase Agreement (B. Riley): Right

[Company Announcement & Overview](index=1&type=section&id=Company%20Announcement%20%26%20Overview) [Introduction & Key Highlights](index=1&type=section&id=Introduction%20%26%20Key%20Highlights) GCT Semiconductor announced Q2 2025 results, highlighting 5G chipset sample deliveries and an $11 million offering for 5G development - GCT Semiconductor has delivered initial **5G chipset samples** to key customers and is preparing for mass production and volume shipments in the second half of fiscal year 2025[1](index=1&type=chunk)[3](index=3&type=chunk) - The company completed an **$11 million** registered direct offering, with proceeds allocated for 5G chipset sampling and debt repayment[3](index=3&type=chunk)[5](index=5&type=chunk) [Second Quarter 2025 Financial Snapshot](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Snapshot) GCT Semiconductor's Q2 2025 saw a year-over-year decline in net revenue and a significant drop in gross margin Second Quarter 2025 Financial Snapshot | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Change (%) | | :----- | :--------------------- | :--------------------- | :--------- | | Net Revenue | $1.2 | $1.5 | -19.0% | | Gross Margin | 32.0% | 62.7% | -30.7 percentage points | [Business Developments & Strategy](index=1&type=section&id=Business%20Developments%20%26%20Strategy) [2025GCT – Year of 5G Program Update and other Highlights](index=1&type=section&id=2025GCT%20%E2%80%93%20Year%20of%205G%20Program%20Update%20and%20other%20Highlights) GCT's 'Year of 5G' program advances with 5G chipset evaluations, sample deliveries, and supply chain coordination - Successfully completed initial **5G chipset evaluations** and initiated supply chain coordination for mass production[5](index=5&type=chunk) - Delivered initial **5G chipset samples** to key customers, including Orbic North America and Airspan Networks, with more samples to follow for initial demand[5](index=5&type=chunk) [Strategic Collaborations & Capital Activities](index=1&type=section&id=Strategic%20Collaborations%20%26%20Capital%20Activities) GCT expanded market reach through Iridium and Giesecke+Devrient partnerships, raising $11 million for 5G and debt - Partnered with Iridium Communications Inc. to integrate **Iridium NTN Direct℠ services** into GCT's GDM7243SL chipset, expanding into the non-terrestrial market[5](index=5&type=chunk) - Collaborated with Giesecke+Devrient to launch innovative **eSIM solutions** for IoT devices[5](index=5&type=chunk) - Completed an **$11 million** registered direct offering, with net proceeds partially used for 5G chipset sampling and debt repayment[5](index=5&type=chunk) [Financial Performance & Position](index=2&type=section&id=Financial%20Performance%20%26%20Position) [Detailed Second Quarter 2025 Financial Results](index=5&type=section&id=Detailed%20Second%20Quarter%202025%20Financial%20Results) GCT Semiconductor reported a **$13.5 million** net loss in Q2 2025, due to revenue decline, foreign exchange losses, and higher interest expense Consolidated Statements of Operations (Three Months Ended June 30, Thousands USD) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :-------------------- | :------ | :------ | :--------- | | Total Net Revenue | $1,182 | $1,468 | -19.5% | | Product Revenue | $408 | $18 | +2166.7% | | Service Revenue | $774 | $1,450 | -46.6% | | Gross Profit | $378 | $921 | -59.0% | | Total Operating Expenses | $7,970 | $8,000 | -0.4% | | Operating (Loss) | $(7,592) | $(7,079) | -7.2% | | Interest Expense | $(1,532) | $(760) | +101.6% | | Foreign Exchange Transaction (Loss) Net | $(3,217) | $816 | N/A (from gain to loss) | | Net Loss | $(13,538) | $(1,043) | +1197.9% | | Basic and Diluted Loss Per Share | $(0.26) | $(0.02) | +1200.0% | [Liquidity and Capital Resources](index=2&type=section&id=Liquidity) GCT's June 30, 2025 liquidity included cash, receivables, and inventory, supplemented by ATM offering and S-3 registration capacity Liquidity Position (As of June 30, 2025) | Asset Category | Amount (Millions USD) | | :------------- | :-------------------- | | Cash and Cash Equivalents | $1.3 | | Net Accounts Receivable | $3.8 | | Inventory | $3.0 | - The company has access to an effective **ATM offering program of up to $75 million** and approximately **$114 million** remaining under its **$200 million S-3 registration statement**[6](index=6&type=chunk) [Outlook & Corporate Information](index=2&type=section&id=Outlook%20%26%20Corporate%20Information) [5G Outlook](index=2&type=section&id=5G%20Outlook) GCT Semiconductor expects to begin production of initial 5G chipsets in Q3 2025, with mass shipments planned for Q4 2025 - Production of finalized initial **5G chipsets** is anticipated to commence in Q3 2025[7](index=7&type=chunk) - Mass shipments of **5G chipsets** are projected to begin in Q4 2025[7](index=7&type=chunk) [About GCT Semiconductor Holding, Inc.](index=2&type=section&id=About%20GCT%20Semiconductor%20Holding%2C%20Inc.) GCT Semiconductor is a leading fabless designer and supplier of advanced 5G and 4G LTE semiconductor solutions for commercial devices - GCT is a leading fabless designer and supplier of advanced **5G and 4G LTE semiconductor solutions**[10](index=10&type=chunk) - Its system-on-chip solutions integrate RF, baseband modem, and digital signal processing functions, offering complete **4G and 5G platform solutions**[10](index=10&type=chunk) [Conference Call & Investor Relations](index=2&type=section&id=Conference%20Call) GCT Semiconductor will host an August 12, 2025 conference call and webcast to discuss business and financial results, with investor contacts provided - A conference call and webcast are scheduled for **Tuesday, August 12, 2025, at 4:30 PM ET**, to discuss business updates and financial results[8](index=8&type=chunk) - Investor Relations contact: Gateway Group, Ralf Esper, GCT@gateway-grp.com. Media contact: media@gctsemi.com[14](index=14&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=2&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section cautions on forward-looking statements, highlighting inherent risks and uncertainties that may cause actual results to differ - Forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially from expected outcomes[13](index=13&type=chunk) - Factors include the company's ability to develop 5G products, fulfill partnership obligations, manage growth, raise sufficient capital, and meet market demand[13](index=13&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets show a decrease in total assets and an increase in total liabilities from December 2024 to June 2025 Consolidated Balance Sheet Highlights (Thousands USD) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------ | :---------------- | :----- | | Total Assets | $17,619 | $19,897 | $(2,278) | | Total Liabilities | $87,595 | $79,212 | $8,383 | | Total Stockholders' Deficit | $(69,976) | $(59,315) | $(10,661) | | Current Assets | $15,746 | $17,591 | $(1,845) | | Current Liabilities | $74,044 | $60,922 | $13,122 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated statements of operations show a significant increase in net loss for both periods, driven by revenue decline and increased expenses Consolidated Statements of Operations (Six Months Ended June 30, Thousands USD) | Metric | 2025 | 2024 | YoY Change | | :-------------------- | :----- | :----- | :--------- | | Total Net Revenue | $1,678 | $4,733 | -64.6% | | Product Revenue | $499 | $2,396 | -79.2% | | Service Revenue | $1,179 | $2,337 | -49.6% | | Gross Profit | $466 | $2,874 | -83.8% | | Total Operating Expenses | $15,798 | $2,717 | +481.5% | | Operating (Loss) | $(15,332) | $157 | N/A (from gain to loss) | | Net Loss | $(20,506) | $(286) | +7069.9% | | Basic and Diluted Loss Per Share | $(0.41) | $(0.01) | +4000.0% |

Group 1: Earnings Performance - GCT Semiconductor Holding, Inc. reported a quarterly loss of $0.15 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.10, representing an earnings surprise of -50% [1] - The company posted revenues of $0.5 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 73.48%, compared to revenues of $3.27 million a year ago [2] - Over the last four quarters, GCT Semiconductor has surpassed consensus EPS estimates only once [2] Group 2: Stock Performance and Outlook - GCT Semiconductor shares have declined approximately 27.9% since the beginning of the year, while the S&P 500 has gained 0.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.11 on revenues of $3.2 million, and -$0.25 on revenues of $37.18 million for the current fiscal year [7] Group 3: Industry Context - The Electronics - Semiconductors industry, to which GCT Semiconductor belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact GCT Semiconductor's stock performance [5] - The Zacks Rank for GCT Semiconductor is currently 2 (Buy), suggesting that the shares are expected to outperform the market in the near future [6]

Financial Data and Key Metrics Changes - Net revenues decreased by $2.8 million or 85% from $3.3 million for the three months ended March 31, 2024, to $500,000 for the three months ended March 31, 2025 [8] - Cost of net revenues decreased by $900,000 or 69% from $1.3 million for the three months ended March 31, 2024, to $400,000 for the three months ended March 31, 2025 [9] - Gross margin decreased to 18% for the three months ended March 31, 2025, from 60% for the three months ended March 31, 2024 [10] Business Line Data and Key Metrics Changes - The decrease in net revenues was primarily due to low five gs platform shipments in the first fiscal quarter of 2025, compared to two five gs platform shipments in the first fiscal quarter of 2024 [9] - Research and development expenses decreased by $1.4 million or 26% from $5.5 million for the three months ended March 31, 2024, to $4.1 million for the three months ended March 31, 2025 [11] - Sales and marketing expenses increased by $100,000 or 12% from $1 million for the three months ended March 31, 2024, to $1.1 million for the three months ended March 31, 2025 [11] Market Data and Key Metrics Changes - The company anticipates that the average selling price of its five gs chipset will be approximately four times higher than that of its current four gs offering [7] - The company expects to benefit from higher global market demand and market prices in the five gs chip market once five gs chipset sales commence [9] Company Strategy and Development Direction - The company has officially begun the five gs product era and is focused on customer sampling starting this month, leading to volume shipments in Q3 and beyond [4] - The company has accelerated and prioritized partnerships and customer programs focused on five gs, including collaborations with Globalstar, Aramco Digital, Samsung, and Kyocera [4] - A letter of intent has been signed with Orbit North America to jointly develop and supply a mobile hotspot and FWA gateway utilizing a Verizon certified five gs module [5] Management Comments on Operating Environment and Future Outlook - Management expressed excitement about the impact of five gs on the company's income statement and balance sheet starting from the second half of the year [7] - Management emphasized that the current results are transitional and not representative of expected performance once five gs chipset sales begin [7] - The company is focused on driving innovation and supporting the global transition to five gs solutions, aiming for substantial growth based on the five gs chipset launch [13] Other Important Information - The company closed the quarter with cash and cash equivalents of $1 million, net accounts receivable of $4.5 million, and net inventory of $3.1 million [12] - The company has filed shelf registrations providing up to $200 million in capacity, enhancing financial flexibility [12] Q&A Session Summary Question: Can you talk about the relationship with Orbit on the five gs mobile hotspot for Verizon? - Management expressed excitement about the Orbit relationship, noting that they expect to be part of Verizon's mid-tier space and will be sampling products this quarter [18][19] Question: Can you provide more details on the sampling and commercial shipments for five gs? - Management indicated that six primary customers will be sampling first, with plans to work with as many customers as possible to move forward into the second half of the year [25][26] Question: How is the supply chain prepared for volume production? - Management stated that the supply chain is ready for the transition to five gs, as they have been working with the same partners for four gs [27] Question: Any insights on OpEx as the company moves into more intensive sampling and volume shipments? - Management does not expect OpEx to increase at the same scale as revenue in the second half of the year, with most major R&D investments already made [29]

Financial Data and Key Metrics Changes - Net revenues decreased by $2,800,000 or 85% from $3,300,000 for the three months ended March 31, 2024, to $500,000 for the three months ended March 31, 2025 [8] - Cost of net revenues decreased by $900,000 or 69% from $1,300,000 for the three months ended March 31, 2024, to $2,400,000 for the three months ended March 31, 2025 [10] - Gross margin decreased to 18% for the three months ended March 31, 2025, from 60% for the three months ended March 31, 2024 [11] Business Line Data and Key Metrics Changes - The decrease in net revenues was primarily due to a reduction of $2,300,000 in product sales and a decrease of $500,000 in service revenue [9] - The gross margin for product sales was at negative 120%, mainly due to low volume of product sales [11] Market Data and Key Metrics Changes - The company anticipates that the average selling price of the new 5G chipset will be approximately four times higher than that of the current 4G offering [7] - The company expects to benefit from higher global market demand and market prices in the 5G chip market once sales commence [10] Company Strategy and Development Direction - The company has officially begun the 5G product era and is focused on customer sampling starting this month, leading to volume shipments in Q3 and beyond [4] - The company has accelerated partnerships with renowned partners like Globalstar, Aramco Digital, Samsung, and Kyocera to enhance its 5G initiatives [4][5] - A letter of intent has been signed with Orbit North America to jointly develop and supply a mobile hotspot and FWA gateway utilizing a Verizon certified 5G module [5] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the impact of 5G on the company's income statement and balance sheet starting from the second half of the year [7] - The company is focused on driving innovation and supporting the global transition to 5G solutions, aiming for substantial growth based on the 5G chipset launch [12] Other Important Information - The company closed the quarter with cash and cash equivalents of $1,000,000, net accounts receivable of $4,500,000, and net inventory of $3,100,000 [11] - The company has filed shelf registrations providing up to $200,000,000 in capacity, including a $75,000,000 at-the-market facility to enhance financial flexibility [11] Q&A Session Summary Question: Follow-up on the partnership with Orbit for the 5G mobile hotspot - Management expressed excitement about the Orbit relationship, indicating it will involve collaboration for multiple operators and products [16][18] Question: Details on the sampling and commercial shipments for 5G - Management confirmed that sampling will commence with six primary customers, with plans to move into commercial shipments in the second half of the year [23][25] Question: Supply chain readiness for volume production - Management indicated confidence in the supply chain's capability to transition to volume production, leveraging existing relationships [26] Question: Operational expenses outlook for the second half of the year - Management stated that operational expenses are not expected to scale at the same rate as revenue, with tight cost control processes in place [28]

Financial Performance - Net revenues for Q1 2025 were $0.5 million, an 84.8% decrease from $3.3 million in Q1 2024[6] - Gross margin decreased to 17.7%, down 42.1 percentage points from 59.8% in the previous year[6] - Total operating expenses increased by 248.2% to $7.8 million, compared to a gain of $(5.3) million in Q1 2024[14] - Net loss for Q1 2025 was $(7.0) million, a 1020.5% decrease from net income of $0.8 million in Q1 2024[14] - Total assets decreased to $17.5 million as of March 31, 2025, down from $19.9 million in the previous year[18] Future Outlook - The company expects 5G chipset sampling to commence at the end of May 2025, with volume shipments anticipated to increase in the second half of the year[8] - The average selling price of 5G products is expected to be approximately four times that of 4G offerings, positively impacting revenue and gross margin[3] Financial Flexibility - The company has filed a shelf registration providing up to $200 million in capacity, including a $75 million at-the-market facility, enhancing financial flexibility[3] - Cash and cash equivalents as of March 31, 2025, were $1.0 million, with net accounts receivable of $4.5 million and inventory of $3.1 million[7] Strategic Partnerships - A letter of intent was signed with Orbic North America to jointly develop a mobile hotspot and FWA gateway utilizing a Verizon-certified 5G module[5]