GCT Semiconductor Holding, Inc.(GCTS) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements This section presents the unaudited condensed financial statements for Concord Acquisition Corp III, detailing a net income of $8.2 million primarily from warrant revaluation and significant trust account assets Condensed Balance Sheets As of March 31, 2022, total assets were $353.4 million, primarily trust account securities, with total liabilities at $27.9 million and a stockholders' deficit of $26.4 million Condensed Balance Sheet Highlights (unaudited) | Account | March 31, 2022 (USD) | December 31, 2021 (USD) | | :--- | :--- | :--- | | Assets | | | | Cash | $719,805 | $1,214,555 | | Marketable securities and cash held in Trust Account | $352,030,864 | $351,921,694 | | Total Assets | $353,431,812 | $353,856,716 | | Liabilities & Stockholders' Deficit | | | | Warrant liability | $10,393,500 | $18,655,000 | | Total liabilities | $27,930,246 | $36,532,165 | | Common stock subject to possible redemption | $351,900,000 | $351,900,000 | | Total stockholders' deficit | $(26,398,434) | $(34,575,449) | Condensed Statements of Operations (Unaudited) For the three months ended March 31, 2022, the company reported a net income of $8.2 million, primarily from a non-operating gain on warrant liability and sponsor loans Statement of Operations Summary (For the Three Months ended March 31, 2022) | Item | Amount (USD) | | :--- | :--- | | Formation and operating costs | $(326,655) | | Interest earned on investment held in Trust Account | $109,170 | | Change in fair value of warrant liability and sponsor loans | $8,394,500 | | Net income | $8,177,015 | | Basic and diluted net income per share | $0.19 | Condensed Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) The stockholders' deficit improved from $(34.6) million to $(26.4) million during Q1 2022, driven by the $8.2 million net income - The stockholders' deficit decreased from $(34.6) million on January 1, 2022, to $(26.4) million on March 31, 2022, as a direct result of the $8.2 million in net income for the quarter[12] Condensed Statements of Cash Flows (Unaudited) For Q1 2022, the company experienced a net cash outflow of $494,750 from operating activities, reducing the cash balance to $719,805 Cash Flow Summary (For the Three Months ended March 31, 2022) | Category | Amount (USD) | | :--- | :--- | | Net cash used in operating activities | $(494,750) | | Net cash provided by financing activities | $0 | | Net change in cash | $(494,750) | | Cash, beginning of the period | $1,214,555 | | Cash, end of the period | $719,805 | Notes to Financial Statements The notes detail the company's status as a blank check company, its IPO proceeds, trust account, warrant accounting, and management's substantial doubt about its going concern ability - The company is a blank check company formed for the purpose of effecting a business combination and had not commenced any operations as of March 31, 2022[19][20] - The company completed its IPO on November 8, 2021, raising gross proceeds of $345 million, with $351.9 million placed in a trust account[22][28] - The company has until May 8, 2023 (18 months from IPO), with possible extensions up to November 8, 2023, to complete a business combination, or it will be forced to liquidate[34][40] - Management has determined that the mandatory liquidation feature raises substantial doubt about the Company's ability to continue as a going concern[40] - Warrants are accounted for as a liability at fair value and are re-measured at each balance sheet date, with changes in fair value recognized in the statement of operations[67] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's pre-business combination status, attributing Q1 2022 net income to warrant revaluation, and expresses substantial doubt about its going concern ability - The company has not engaged in any operations or generated any revenues to date, with activities limited to organizational tasks and searching for a business combination[131] - For Q1 2022, the company had a net income of $8,177,015, primarily from an $8,394,500 gain on the change in fair value of warrant liability and sponsor loans[132] - As of March 31, 2022, the company had approximately $720,000 of cash held outside the Trust Account available for working capital purposes[138] - Management has determined that the mandatory liquidation requirement if a business combination is not completed by the deadline (starting May 8, 2023) raises substantial doubt about the company's ability to continue as a going concern[140] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the registrant is not required to provide market risk disclosures - As a smaller reporting company, the registrant is not required to provide the information otherwise required under this item[146] Controls and Procedures Management concluded disclosure controls and procedures were ineffective as of March 31, 2022, due to a material weakness in accounting for complex financial instruments - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective as of March 31, 2022[149] - The ineffectiveness was due to a material weakness in internal control over financial reporting concerning the accounting for complex financial instruments[149] - The company is implementing remediation efforts, including enhancing access to accounting literature and increasing communication with personnel and third-party professionals[151] PART II. OTHER INFORMATION Legal Proceedings The company reported no legal proceedings - None[153] Risk Factors This section highlights potential adverse impacts from proposed SEC rules on SPACs and substantial doubt about the company's going concern ability - Proposed SEC rules issued on March 30, 2022, regarding SPACs may materially adversely affect the company's ability to negotiate and complete its initial business combination and may increase related costs and time[156] - The company's proximity to its liquidation date (starting May 8, 2023, if not extended) raises substantial doubt about its ability to continue as a 'going concern'[157] Unregistered Sales of Equity Securities and Use of Proceeds This section details proceeds from the IPO, which generated $345 million, and a simultaneous private placement of warrants totaling $9.4 million - On November 8, 2021, the company completed its IPO of 34,500,000 units at $10.00 per unit, generating gross proceeds of $345,000,000[158] - Simultaneously with the IPO, the company sold 9,400,000 private placement warrants at $1.00 per warrant, generating total proceeds of $9,400,000[159] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[161] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[162] Other Information The company reported no other information - None[163] Exhibits This section lists exhibits filed with the quarterly report, including SOX certifications and Inline XBRL financial data files - The report includes certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Sections 302 and 906, along with Inline XBRL documents[165]