S-4/A 1 tm2330351-9_s4a.htm S-4/A tm2330351-9_s4a - block - 89.6925013s
As filed with the Securities and Exchange Commission on January 31, 2024
Registration Statement No. 333-275522
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3 to
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CONCORD ACQUISITION CORP III
(Exact Name of Registrant as Specified in Its Charter)*
Delaware
(Jurisdiction of Incorporation or
Organization)
6770
Primary Standard Industrial
Classification Code Number)
86-2171699
(I.R.S. Employer
Identification Number)
477 Madison Avenue, 22nd Floor
New York, New York 10022
(212) 883-4330
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Jeff Tuder
Chief Executive Officer
Concord Acquisition Corp III
477 Madison Avenue, 22nd Floor
New York, New York 10022
(212) 883-4330
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Alan I. Annex
Jason T. Simon
Greenberg Traurig, LLP
1750 Tysons Boulevard
Suite 1000
McLean, VA 22102
(703) 749-1386
Albert Lung, Esq.
Morgan, Lewis & Bockius LLP
1400 Page Mill Road
Palo Alto, CA 94304
(650) 843-4000
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and on completion of the business combination described in the enclosed proxy statement/prospectus.
If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒
Smaller reporting company ☒
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
*
Upon the closing of the business combination referred to in the proxy statement/prospectus within this registration statement, the name of the registrant is expected to change to GCT Semiconductor Holding, Inc.

The information in this preliminary proxy statement/prospectus is not complete and may be changed. The securities described herein may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission is declared effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROXY STATEMENT/PROSPECTUS
SUBJECT TO COMPLETION, DATED JANUARY 31, 2024
PROXY STATEMENT FOR THE SPECIAL MEETING OF
CONCORD ACQUISITION CORP III
PROSPECTUS FOR
54,860,842 SHARES OF CLASS A COMMON STOCK
OF CONCORD ACQUISITION CORP III
(WHICH WILL BE RENAMED GCT SEMICONDUCTOR HOLDING, INC.)
Dear Concord Acquisition Corp III Stockholders:
On November 2, 2023, Concord Acquisition Corp III, a Delaware corporation (“Concord III”), Gibraltar Merger Sub Inc., a Delaware corporation and newly formed, wholly-owned direct subsidiary of Concord III (“Merger Sub”), and GCT Semiconductor, Inc., a Delaware corporation (“GCT”), entered into a Business Combination Agreement (as it may be amended and/or restated from time to time, the “Business Combination Agreement”). If the Business Combination Agreement and the transactions contemplated thereby are adopted and approved by GCT’s stockholders and Concord III’s stockholders, and the business combination is subsequently completed, Merger Sub will merge with and into GCT, with GCT surviving the merger and becoming a wholly-owned direct subsidiary of Concord III (the “Merger,” and collectively with the other transactions described in the Business Combination Agreement, the “Business Combination”). In connection with the consummation of the Business Combination (the “Closing”), it is expected that Concord III will change its name to GCT Semiconductor Holding, Inc. and is referred to herein as “New GCT” as of the time following such change of name.
At the Closing, each share of common stock of GCT (“GCT Common Stock”) that is issued and outstanding immediately prior to the effective time of the Merger (other than Dissenting Shares, as defined in the Business Combination Agreement) will be cancelled and converted into the right to receive shares of common stock of New GCT, par value $0.0001 per share (“New GCT Common Stock”). Each option and warrant to purchase GCT Common Stock, whether or not exercisable and whether or not vested, will automatically be converted into an option or warrant, as applicable, to purchase a number of shares of New GCT Common Stock, and each award of restricted stock units relating to a share of GCT Common Stock granted under GCT’s existing equity plans will automatically be converted into an award of restricted stock units or shares of New GCT Common Stock.
The aggregate equity consideration to be paid to GCT’s stockholders and other equity holders in the Business Combination (the “Aggregate Transaction Consideration”) will be equal to the quotient of (i) the Company Value (as defined below) divided by (ii) $10.00. Immediately prior to the Closing, all of the outstanding principal and accrued interest under the outstanding promissory notes issued by GCT that can be converted into shares of GCT Common Stock will be so converted in accordance with their terms. The “Company Value” means $350 million, minus the amount of indebtedness of GCT immediately prior to the Closing, plus the amount of GCT’s cash and cash equivalents immediately prior to the Closing, plus the aggregate exercise price of all “in-the-money” warrants of GCT outstanding immediately prior to the Closing.
Following the Closing, New GCT will issue up to an aggregate of 20,000,000 additional shares of New GCT Common Stock (the “Earnout Shares”) to the stockholders of GCT as of immediately prior to the Closing and the Financing Investors (as defined below) if the volume weighted average price of the shares of New GCT Common Stock equals or exceeds certain minimum share prices at any time during the period starting 60 days following the Closing and expiring on the fifth anniversary of the Closing (the “Earnout Period”). Such shares will also become issuable under certain circumstances if a “change in control” of New GCT occurs prior to the applicable earnout expiration date and the price per share in the change in control equals or exceeds the applicable price target.
Based on the number of shares of GCT Common Stock outstanding, the number of outstanding options and warrants of GCT, and the number of outstanding awards of restricted stock units relating to shares of GCT Common Stock granted under GCT’s existing equity plans, in each case as of January 30, 2024, the total number of shares of New GCT’s common stock expected to be issued in connection with the Business Combination is approximately 54,860,842, and holders of shares of GCT Common Stock as of immediately prior to the Closing are expected to hold, in the aggregate, approximately 68.7% of the issued and outstanding shares of New GCT’s common stock immediately following the Closing, assuming no exercise of conversion rights by Concord III’s public stockholders. Concord III’s units, Class A common stock and warrants are currently listed on the New York Stock Exchange, under the symbols “CNDB.U,” “CNDB,” and “CNDB.WS,” respectively. Concord III intends to apply to continue the listing of the shares of common stock and warrants of New GCT on the New York Stock Exchange (“NYSE”) under the symbols “GCTS” and “GCTSW”, respectively, upon the Closing. New GCT will not have units traded following the Closing, at which time each unit not previously separated will separate into its component securities.

See the section entitled “The Business Combination Agreement” on page 96 of the attached proxy statement/prospectus for further information on the consideration being paid to the stockholders of GCT in the Business Combination.
Concurrently with the execution of the Business Combination Agreement, certain investors (the “PIPE Investors”) entered into subscription agreements (the “PIPE Subscription Agreements”) pursuant to which the PIPE Investors have committed to purchase in a private placement an aggregate of 4,484,854 shares of New GCT Common Stock (the “PIPE Shares”) at a purchase price of $6.67 per share and an aggregate purchase price of approximately $29.9 million (the “PIPE Investment”). The purchase of the PIPE Shares is conditioned upon, among other things, the consummation of the Business Combination and will be consummated immediately prior to or substantially concurrently with the Closing. In addition, in connection with the execution of the Business Combination Agreement, GCT issued convertible promissory notes to certain investors (the “CVT Investors” and, collectively with the PIPE Investors, the “Financing Investors”), pursuant to which GCT borrowed an aggregate principal amount of $18.3 million (the “Note Financing” and, together with the PIPE Investment, the “Financings”), which notes will convert into shares of New GCT Common Stock at a conversion price of $6.67 per share concurrently with the Closing. See “Certain Agreements Related to the Business Combination — PIPE Subscription Agreements; Convertible Note Financing.”
Concord III is holding a special meeting in lieu of an annual meeting of its stockholders in order to obtain the stockholder approvals necessary to complete the Business Combination. At the Concord III special meeting of stockholders, which will be held in person on February 27, 2024, at 11:00 a.m., Eastern Time, at the offices of Greenberg Traurig, LLP, located at 1750 Tysons Boulevard, Suite 1000, McLean, VA 22102, unless postponed or adjourned to a later date, Concord III will ask its stockholders to adopt the Business Combination Agreement, thereby approving the Business Combination and approve the other proposals described in this proxy statement/prospectus.
As described in this proxy statement/prospectus, certain stockholders of GCT are parties to a stockholder support agreement with Concord III whereby such stockholders agreed to vote all of their shares of GCT Common Stock in favor of approving the Business Combination Agreement and the Business Combination.
After careful consideration, Concord III’s board of directors has unanimously approved the Business Combination Agreement and the Business Combination, and the other proposals described in this proxy statement/prospectus, and Concord III’s board of directors has determined that it is advisable to consummate the Business Combination. Concord III’s board of directors recommends that its stockholders vote “FOR” the proposals described in this proxy statement/prospectus.
More information about Concord III, GCT and the Business Combination is contained in this proxy statement/prospectus. Concord III and GCT urge you to read the accompanying proxy statement/prospectus, including the financial statements and annexes and other documents referred to herein, carefully and in their entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 20 OF THIS PROXY STATEMENT/PROSPECTUS.
On behalf of our board of directors, I thank you for your support and look forward to the successful completion of the Business Combination.
           , 2024 Sincerely,
Bob Diamond
Chairman of the Board of Directors
This proxy statement/prospectus is dated            , 2024 and is first being mailed to the stockholders of Concord III on or about that date.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 
CONCORD ACQUISITION CORP III
477 Madison Avenue, 22nd Floor
New York, New York 10022
NOTICE OF SPECIAL MEETING IN LIEU OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 27, 2024
To the Stockholders of Concord Acquisition Corp III:
NOTICE IS HEREBY GIVEN that a special meeting in lieu of an annual meeting of stockholders (the “special meeting”) of Concord Acquisition Corp III, a Delaware corporation (“Concord III,” “we,” “our” or “us”), which will be held on at 11:00 a.m., Eastern Time, on February 27, 2024, at the offices of Greenberg Traurig, LLP, located at 1750 Tysons Boulevard, Suite 1000, McLean, VA 22102.
You are cordially invited to attend the special meeting, which will be held for the following purposes:
1.
Proposal No. 1 — The “Business Combination Proposal” — to consider and vote on a proposal to approve and adopt the Business Combination Agreement, dated as of November 2, 2023 (as it may be amended and/or restated from time to time, the “Business Combination Agreement”), by and among Concord III, GCT Semiconductor, Inc. (“GCT”) and Gibraltar Merger Sub Inc. (“Merger Sub”), and the transactions contemplated thereby, pursuant to which Merger Sub will merge with and into GCT, with GCT surviving the merger and becoming a wholly-owned direct subsidiary of Concord III (collectively with the other transactions described in the Business Combination Agreement, the “Business Combination”);
2.
Proposal No. 2 — The “Charter Amendment Proposal” — to consider and vote on a proposal to adopt the proposed second amended and restated certificate of incorporation of Concord III (the “Proposed Certificate of Incorporation”) attached as Annex B to the proxy statement/prospectus;
3.
Proposal Nos. 3A-3E — The “Governance Proposals” — to consider and vote on, on a non-binding advisory basis, five separate governance proposals relating to the following material differences between Concord III’s current amended and restated certificate of incorporation and the proposed second amended and restated certificate of incorporation (collectively, the “Governance Proposals”):
(a)
change the name of Concord III to “GCT Semiconductor Holding, Inc.” from the current name of “Concord Acquisition Corp III” and remove certain provisions related to Concord III’s status as a special purpose acquisition company that will no longer be relevant following the closing of the Business Combination (the “Closing”) (Proposal No. 3A);
(b)
increase the number of shares of (i) common stock Concord III is authorized to issue from 220,000,000 shares to 400,000,000 shares and (ii) preferred stock Concord III is authorized to issue from 20,000,000 shares to 40,000,000 shares (Proposal No. 3B);
(c)
require the vote of at least two-thirds of the voting power of the outstanding shares of capital stock, rather than a simple majority, to remove a director from office (Proposal No. 3C);
(d)
require that special meetings of stockholders may only be called by or at the direction of the board of directors pursuant to a resolution adopted by a majority of the total number of directors, subject to any special rights of the holders of preferred stock (Proposal No. 3D); and
(e)
modify the forum selection provision to designate the U.S. federal district courts as the exclusive forum for claims arising under the Securities Act rather than providing for concurrent jurisdiction in the Court of Chancery and the federal district court for the District of Delaware for claims arising under the Securities Act (Proposal No. 3E).
4.
Proposal No. 4 — The “Election of Directors Proposal” — to consider and vote on a proposal to elect, effective at Closing, seven directors to serve staggered terms on our board of directors until the
 

 
2025, 2026 and 2027 annual meetings of stockholders, respectively, and until their respective successors are duly elected and qualified;
5.
Proposal No. 5 — The “Incentive Award Plan Proposal” — to consider and vote on a proposal to approve and adopt the incentive award plan established to be effective after the Closing of the Business Combination;
6.
Proposal No. 6 — The “Employee Stock Purchase Plan Proposal” — to consider and vote on a proposal to approve and adopt the 2024 Employee Stock Purchase Plan established to be effective after the Closing;
6.
Proposal No. 7 — The “NYSE Proposal” — to consider and vote on a proposal to issue New GCT Common Stock to (i) the holders of GCT Common Stock (the “GCT Stockholders”) in the Merger pursuant to the Business Combination Agreement, (ii) the PIPE Investors pursuant to the PIPE Subscription Agreements and (iii) the CVT Investors pursuant to the Note Financing; and
7.
Proposal No. 8 — The “Adjournment Proposal” — to consider and vote on a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.
Your attention is directed to the proxy statement/prospectus accompanying this notice (including the financial statements and annexes attached thereto) for a more complete description of the proposed Business Combination and related transactions and each of our proposals. We encourage you to read this proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Morrow Sodali LLC, at (800) 662-5200; banks and brokers can call collect at (203) 658-9400.
All Concord III stockholders are cordially invited to attend the special meeting in person at the offices of Greenberg Traurig, LLP, located at 1750 Tysons Boulevard, Suite 1000, McLean, VA 22102, on February 27, 2024 at 11:00 a.m., Eastern Time. Concord III stockholders may attend, vote and examine the list of Concord III stockholders entitled to vote at the special meeting by visiting    and entering the control number found on their proxy card, voting instruction form or notice included in their proxy materials. The special meeting will be held in in-person meeting format only. You will not be able to attend the special meeting physically. To ensure your representation at the special meeting, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares.
Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors,
Bob Diamond
           , 2024
Chairman of the Board of Directors
If you return your signed proxy without an indication of how you wish to vote, your shares will be voted in favor of each of the proposals.
All holders (the “Public Stockholders”) of shares of Concord III common stock (“Concord III Common Stock”) issued in Concord III’s initial public offering (the “Public Shares”) have the right to have their Public Shares converted into cash in connection with the proposed Business Combination. Public Stockholders are not required to affirmatively vote for or against the Business Combination Proposal, to vote on the Business Combination Proposal at all, or to be holders of record on the record date in order to have their shares converted
 

 
into cash. This means that any Public Stockholder holding Public Shares may exercise redemption rights regardless of whether they are even entitled to vote on the Business Combination Proposal.
To exercise redemption rights, holders must tender their stock to Continental Stock Transfer & Trust Company, Concord III’s transfer agent, no later than two (2) business days prior to the special meeting. You may tender your stock by either delivering your stock certificate to the transfer agent or by delivering your shares electronically using the Depository Trust Company’s Deposit Withdrawal at Custodian System. If the Business Combination is not completed, then these shares will not be converted into cash. If you hold the shares in street name, you will need to instruct your bank or broker to withdraw the shares from your account in order to exercise your redemption rights. See “Special Meeting of Concord III Stockholders — Redemption Rights” for more specific instructions.
 

 
TABLE OF CONTENTS
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F-1
 
i

 
ABOUT THIS PROXY STATEMENT/PROSPECTUS
This document, which forms part of a registration statement on Form S-4 filed with the SEC, by Concord III (File No. 333-275522) (the “Registration Statement”), constitutes a prospectus of Concord III under Section 5 of the Securities Act, with respect to the shares of New GCT Common Stock to be issued if the Business Combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Exchange Act with respect to the special meeting in lieu of an annual meeting of Concord III stockholders at which Concord III stockholders will be asked to consider and vote on a proposal to approve the Business Combination by the approval and adoption of the Business Combination Agreement, among other matters.
 
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FREQUENTLY USED TERMS
In this document:
“2024 Employee Stock Purchase Plan” means the GCT Semiconductor Holding, Inc. 2024 Employee Stock Purchase Plan, a copy of which is attached to this proxy statement/prospectus as Annex E.
“2024 Incentive Award Plan” means the GCT Semiconductor Holding, Inc. 2024 Omnibus Incentive Compensation Plan, a copy of which is attached to this proxy statement/prospectus as Annex D.
“Aggregate Transaction Consideration” means the aggregate equity consideration to be paid to GCT’s stockholders and other equity holders in the Business Combination, which will be equal to the quotient of (i) the Company Value divided by (ii) $10.00.
“broker non-vote” means the failure of a Concord III stockholder, who holds his, her or its shares in “street name” through a broker or other nominee, to give voting instructions to such broker or other nominee.
“Business Combination” means the transactions contemplated by the Business Combination Agreement.
“Business Combination Agreement” means the Business Combination Agreement, dated as of November 2, 2023, as it may be amended and/or restated from time to time, by and among Concord III, GCT and Merger Sub.
“CA2” means CA2 Co-Investment LLC.
“Closing” means the consummation of the Business Combination.
“Closing Date” means the date on which the Closing occurs.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Value” means $350 million, minus the amount of indebtedness of GCT immediately prior to the Closing, plus the amount of GCT’s cash and cash equivalents immediately prior to the Closing, plus the aggregate exercise price of all “in-the-money” warrants of GCT outstanding immediately prior to the Closing.
“Concord III” means Concord Acquisition Corp III, a Delaware corporation.
“Concord III Class A Common Stock” means Concord III’s Class A common stock, par value $0.0001 per share.
“Concord III Class B Common Stock” means Concord III’s Class B common stock, par value $0.0001 per share.
“Concord III Common Stock” means Concord III Class A Common Stock and Concord III Class B Common Stock.
“Concord III Unit” means one share of Concord III Common Stock and one-half of one Concord III Warrant.
“Concord III Warrant Agreement” means the warrant agreement, dated as of November 3, 2021, by and between Concord III and Continental Stock Transfer & Trust Company, governing Concord III’s outstanding warrants.
“Concord III Warrants” means warrants to purchase shares of Concord III Common Stock as contemplated under the Concord III Warrant Agreement, with each whole warrant exercisable for one share of Concord III Common Stock at an exercise price of $11.50 per whole share.
“CVT Investors” means investors who purchased convertible promissory notes in the Note Financing.
“DGCL” means the Delaware General Corporation Law.
“Earnout Period” means the period starting 60 days following the Closing and expiring on the fifth anniversary of the Closing.
 
iv

 
“Earnout Shares” means the aggregate of up to 20,000,000 additional shares of New GCT Common Stock to be issued to GCT Stockholders as of immediately prior to the Closing and the Financing Investors if the volume weighted average price of the shares of New GCT Common Stock equals or exceeds certain minimum share prices at any time during the Earnout Period.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“FDA” means the U.S. Food and Drug Administration.
“Financing Investors” means the CVT Investors and the PIPE Investors.
“Financings” means the PIPE Investment and the Note Financing.
“Founder Shares” means the shares of Concord III Class B Common Stock initially purchased by the Sponsor in a private placement in March 2021, and any shares of Concord III Class A Common Stock that were issued upon the conversion thereof pursuant to the amended and restated certificate of incorporation of Concord III, as amended.
“GAAP” means United States generally accepted accounting principles.
“GCT” means GCT Semiconductor, Inc., a Delaware corporation.
“GCT Board” means the board of directors of GCT.
“GCT Common Stock” means GCT’s common stock, par value $0.001 per share.
“GCT Options” means all outstanding options to purchase shares of GCT Common Stock, whether or not exercisable and whether or not vested, immediately prior to the Closing.
“GCT Stockholders” means the holders of GCT Common Stock.
“GCT Warrants” means all outstanding warrants underlying shares of GCT Common Stock immediately prior to the Closing.
“Investment Company Act” means the Investment Company Act of 1940, as amended.
“IPO” means Concord III’s initial public offering of units, consummated on November 8, 2021.
“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.
“Lock-Up Agreement” means the lock-up agreement to be entered into in connection with the Closing among New GCT and certain stockholders of GCT.
“Merger” means the merging of Merger Sub with and into GCT, with GCT surviving the Merger as a wholly-owned subsidiary of Concord III.
“Merger Sub” means Gibraltar Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of Concord III.
“Merger Sub Common Stock” means Merger Sub’s common stock, par value $0.01 per share.
“New GCT” means Concord III, to be renamed GCT Semiconductor Holding, Inc., from and after the Closing.
“New GCT Common Stock” means the common stock of New GCT, par value $0.0001 per share, to be issued upon the Closing.
“Note Financing” means the aggregate principal amount of $18.3 million under the convertible promissory notes issued by GCT to CVT Investors.
“NYSE” means the New York Stock Exchange.
“PCAOB” means the Public Company Accounting Oversight Board.
 
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“PCAOB Audited Financials” means the audited consolidated balance sheets of GCT as of December 31, 2021 and 2022, and the related audited consolidated statements of operations, redeemable convertible preferred stock and stockholders’ deficit and cash flows of GCT for each of the two years in the period ended December 31, 2022, each audited in accordance with the auditing standards of the PCAOB and auditing standards generally accepted in the United States of America and included in this proxy statement/prospectus.
“PIPE Investment” means the sale of PIPE Shares to the PIPE Investors, for a purchase price of $6.67 per share in a private placement.
“PIPE Investors” means purchasers that purchased the PIPE Shares.
“PIPE Shares” means an aggregate of 4,484,854 shares of New GCT Common Stock to be issued to PIPE Investors in the PIPE, for an aggregate purchase price of approximately $29.9 million.
“Private Warrants” means the warrants to purchase shares of Concord III Common Stock purchased in a private placement in connection with the IPO .
“prospectus” means the prospectus included in the Registration Statement on Form S-4 (Registration No. 333-275522) filed with the SEC.
“Public Shares” means shares of Concord III Common Stock issued in the IPO.
“Public Stockholders” means the holders of Public Shares.
“Public Warrants” means the warrants included in the units sold in the IPO, each of which is exercisable for one share of Concord III Class A Common Stock, in accordance with its terms.
“Registration Rights Agreement” means the registration rights agreement to be entered into in connection with the Closing by Concord III, New GCT, certain stockholders of GCT, the Sponsor and certain Concord III stockholders.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“special meeting” means the special meeting in lieu of an annual meeting of the stockholders of Concord III that is the subject of this proxy statement/prospectus.
“Sponsor” means Concord Sponsor Group III LLC, a Delaware limited liability company.
"Sponsor Earnout Shares” means the aggregate of up to 1,920,375 shares of New GCT Common Stock to be held by the Sponsors at the Closing which will be unvested and subject to forfeiture as of the Closing and will only vest if the volume weighted average price of the shares of New GCT Common Stock equals or exceeds certain minimum share prices at any time during the period starting six months following the Closing and expiring on the fifth anniversary of the Closing.
“Sponsors” means Sponsor and CA2.
“Sponsor Support Agreement” means the Sponsor Support Agreement, dated as of November 2, 2023, by and among Concord III, GCT, CA2 and the Sponsor.
“Stockholder Support Agreement” means the Stockholder Support Agreement, dated as of November 2, 2023, by and among Concord III and certain stockholders of GCT.
“Surviving Corporation” means the entity surviving the Merger as a wholly-owned subsidiary of Concord III.
“Trust Account” means the trust account that holds a portion of the proceeds of the IPO and the concurrent sale of the Private Warrants.
 
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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION
The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the special meeting of Concord III stockholders, including with respect to the proposed Business Combination. The following questions and answers may not include all the information that is important to Concord III stockholders. Stockholders are urged to read carefully this entire proxy statement/prospectus, including the financial statements and annexes attached hereto and the other documents referred to herein.
Questions and Answers About the Special Meeting of Concord III’s Stockholders and the Related Proposals
Q.
Why am I receiving this proxy statement/prospectus?
A.
Concord III has entered into the Business Combination Agreement with Merger Sub and GCT, pursuant to which Merger Sub will be merged with and into GCT, with GCT surviving the Merger as a wholly-owned direct subsidiary of Concord III. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.
At the Closing, each share of common stock of GCT that is issued and outstanding immediately prior to the effective time of the Merger (other than Dissenting Shares, as defined in the Business Combination Agreement) will be cancelled and converted into the right to receive shares of New GCT Common Stock. Each option and warrant to purchase GCT Common Stock, whether or not exercisable and whether or not vested, will automatically be converted into an option or warrant, as applicable, to purchase a number of shares of New GCT Common Stock, and each award of restricted stock units relating to a share of GCT Common Stock granted under GCT’s existing equity plans will automatically be converted into an award of restricted stock units or shares of New GCT Common Stock. See “Summary of the Proxy statement/Prospectus — Ownership of New GCT After the Closing” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
Concord III stockholders are being asked to consider and vote on the Business Combination Proposal to approve the adoption of the Business Combination Agreement and approve the Business Combination, among other proposals.
Concord III’s Class A common stock, par value $0.0001 per share (“Concord III Class A Common Stock), public warrants (“Public Warrants”) and units (“Concord III Units”) are currently listed on the NYSE under the symbols “CNDB,” “CNDB.WS” and “CNDB.U,” respectively. Concord III intends to apply to continue the listing of the New GCT Common Stock and warrants of New GCT (“New GCT Warrants”) on the NYSE under the symbols “GCTS” and “GCTSW,” respectively, upon the Closing. All outstanding Concord III Units will be separated into their component securities immediately prior to the Closing. Accordingly, New GCT will not have any units following consummation of the Business Combination, and therefore there will be no NYSE listing of the Concord III Units following the consummation of the Business Combination.
This proxy statement/prospectus and its annexes contain important information about the proposed Business Combination and the proposals to be acted upon at the special meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety. This document also constitutes a prospectus of Concord III with respect to the New GCT Common Stock issuable in connection with the Business Combination.
Q.
What matters will stockholders consider at the special meeting?
A.
At the Concord III special meeting of stockholders, Concord III will ask its stockholders to vote in favor of the following proposals (the “Concord III Proposals”):

The Business Combination Proposal — a proposal to approve and adopt the Business Combination Agreement and the Business Combination.

The Charter Amendment Proposal — a proposal to adopt the proposed second amended and restated certificate of incorporation of Concord III attached as Annex B to this proxy statement/prospectus.
 
vii

 

The Governance Proposals — to approve, on a non-binding advisory basis, separate governance proposals relating to certain material differences between Concord III’s current amended and restated certificate of incorporation and the proposed second amended and restated certificate of incorporation.

The Election of Directors Proposal — a proposal to elect the directors comprising the board of directors of Concord III following the Closing.

The Incentive Award Plan Proposal — a proposal to approve and adopt the incentive award plan established to be effective after the Closing.

The Employee Stock Purchase Plan Proposal — a proposal to approve and adopt the employee stock purchase plan established to be effective after the Closing.

The NYSE Proposal — a proposal to issue New GCT Common Stock to (i) the GCT stockholders in the Merger pursuant to the Business Combination Agreement, (ii) the PIPE Investors pursuant to the PIPE Subscription Agreements and (iii) the CVT Investors pursuant to the Note Financing.

The Adjournment Proposal — a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote.
Q.
Are any of the proposals conditioned on one another?
A.
The Charter Amendment Proposal, Election of Directors Proposal, Incentive Award Plan Proposal, Employee Stock Purchase Plan Proposal and NYSE Proposal are all conditioned on the approval of the Business Combination Proposal. The Governance Proposals and the Adjournment Proposal are not conditioned on, and therefore do not require the approval of, the Business Combination Proposal and Business Combination to be effective. It is important for you to note that in the event that any of the Business Combination Proposal, Charter Amendment Proposal, Incentive Award Plan Proposal, Employee Stock Purchase Plan Proposal or NYSE Proposal is not approved, then Concord III will not consummate the Business Combination. The Business Combination is not conditioned on the approval of the Election of Directors Proposal. If Concord III does not consummate the Business Combination and fails to complete an initial business combination by August 8, 2024 or obtain the approval of Concord III stockholders to extend the deadline for Concord III to consummate an initial business combination, then Concord III will be required to dissolve and liquidate.
Q.
What will happen upon the consummation of the Business Combination?
A.
On the Closing Date, Merger Sub will merge into GCT, whereupon Merger Sub will cease to exist and GCT will continue as the Surviving Corporation and become a direct wholly-owned subsidiary of Concord III. The Merger will have the effects specified under Delaware law. The Aggregate Transaction Consideration to be paid in the Business Combination will be equal to the quotient of (i) the Company Value divided by (ii) $10.00.
Q.
Why is Concord III proposing the Business Combination Proposal?
A.
Concord III was organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Concord III is not limited to any particular industry or sector.
Concord III received $351,900,000 from its initial public offering (the “IPO”) (including net proceeds from the exercise by the underwriters of their over-allotment option), sale of the private warrants (the “Private Warrants”) and the promissory notes (the “Sponsor Loans”) executed with Concord Sponsor Group III LLC (the “Sponsor”) and CA2 Co-Investment LLC (“CA2,” together with the Sponsor, the “Sponsors”), which was placed into the Trust Account immediately following the IPO. In accordance with Concord III’s amended and restated certificate of incorporation, the funds held in the Trust Account will be released upon the consummation of the Business Combination. The Business
 
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Combination Agreement provides that the Sponsor Loans will be canceled at the Closing. See the question entitled “What happens to the funds held in the Trust Account upon consummation of the Business Combination?
On May 4, 2023, Concord III’s stockholders approved a proposal to amend its amended and restated certificate of incorporation to extend the date by which it had to consummate a business combination from May 8, 2023 to November 8, 2023, or such earlier date as may be determined by the Concord III’s board of directors (the “First Extension”). In connection with the votes to approve the First Extension, the holders of 30,460,066 shares of Concord III Class A Common Stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.42 per share, for an aggregate redemption amount of approximately $317.4 million, leaving approximately $42.1 million in the Trust Account immediately following the First Extension.
On November 7, 2023, Concord III’s stockholders approved a proposal to further amend its amended and restated certificate of incorporation, as amended, to extend the date by which it has to consummate a business combination from November 8, 2023 to August 8, 2024, or such earlier date as may be determined by the Concord III’s board of directors (the “Second Extension”). In connection with the votes to approve the Second Extension, the holders of 98,573 shares of Concord III Class A Common Stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.70 per share, for an aggregate redemption amount of approximately $1.1 million, leaving approximately $42.2 million in the Trust Account immediately following the Second Extension.
There currently are 12,566,361 shares of Concord III Common Stock issued and outstanding, consisting of 3,941,361 Public Shares and 8,625,000 Founder Shares. In addition, there currently are 26,650,000 Concord III warrants issued and outstanding, consisting of 17,250,000 Public Warrants and 9,400,000 Private Warrants. Each whole Concord III Warrant entitles the holder thereof to purchase one share of Concord III Common Stock at a price of $11.50 per share. The Public Warrants will become exercisable 30 days after the completion of a business combination, and expire at 5:00 p.m., New York City time, five years after the completion of a business combination or earlier upon redemption or liquidation. The Private Warrants, however, are non-redeemable so long as they are held by their initial purchasers or their permitted transferees.
Under Concord III’s amended and restated certificate of incorporation, Concord III must provide all Public Stockholders with the opportunity to have their Public Shares converted to cash upon the consummation of Concord III’s initial business combination in conjunction with a stockholder vote.
Q.
Who is GCT?
A.
GCT was founded in Silicon Valley, California in 1998 and is a fabless semiconductor company that specializes in the design, manufacturing 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, B2B and consumer applications. GCT has 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., CPE), industrial M2M applications and smartphones. See “Information About GCT.”
Q.
How much dilution may non-redeeming Concord III stockholders experience in connection with the Business Combination and what equity stake will current Concord III stockholders and GCT Stockholders have in New GCT after the Closing?
A.
Our Public Stockholders are not required to vote “FOR” the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Stockholders are reduced as a result of redemptions by Public Stockholders.
If a Public Stockholder exercises its redemption rights, such exercise will not result in the loss of any Public Warrants that it may hold. We cannot predict the ultimate value of the Concord III Warrants
 
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following the consummation of the Business Combination, but assuming that 3,941,361 shares of Concord III Class A Common Stock held by our Public Stockholders were redeemed (maximum redemption scenario), the 17,250,000 retained outstanding Public Warrants would have an aggregate value of approximately $1.5 million, based on the price per Public Warrant of $0.0839 on January 26, 2024, the most recent practicable date prior to the date of this proxy statement/ prospectus. In addition, on January 26, 2024, the most recent practicable date prior to the date of this proxy statement/prospectus, the price per share of Concord III Class A Common Stock closed at $10.59. If the shares of Concord III Class A Common Stock are trading above the exercise price of $11.50 per warrant, the warrants are considered to be “in the money” and are therefore more likely to be exercised by the holders thereof (when they become exercisable). This in turn increases the risk to the non-redeeming Public Stockholders that the warrants will be exercised, which would result in immediate dilution to the non-redeeming Public Stockholders.
The tables below illustrate the anticipated relative ownership of the Public Stockholders, the initial stockholders (being the Sponsors, CA2 and the independent directors of Concord III), the PIPE Investors, the CVT Investors, current GCT equityholders and certain third parties that entered into non-redemption agreements with Concord III and the Sponsor (the “NRA Investors”) upon completion of the Business Combination without and after giving effect to the additional dilution that may be caused by the issuance of Earnout Shares, the exercise of the outstanding Public Warrants or Private Warrants, or any issuance pursuant to the 2024 Incentive Award Plan or 2024 Employee Stock Purchase Plan under various redemption scenarios. All scenarios present the number of Public Shares held after giving effect to the redemption of 98,573 shares of Concord III Class A Common Stock in November 2023. In the no redemption scenario as described below in the sensitivity table, the residual equity value owned by the non-redeeming Public Stockholders is assumed to be the deemed value of $10.00 per share and the implied total equity value of New GCT following the Business Combination, assuming no dilution from any additional dilution sources described in the table below, would be $500.3 million. As a result of the respective redemption amounts in the 50% redemption and maximum redemption scenarios as described below in the sensitivity table, the implied total equity value of New GCT following the Business Combination, assuming no dilution from any additional dilution sources described in the table below, would be (a) $47.2 million in the 50% redemption scenario, and (b) $44.2 million in the maximum redemption scenario. Additionally, the sensitivity table below sets forth the potential additional dilutive impact of each of the additional dilution sources in each redemption scenario, as described further in Notes 10 through 14 below. Stockholders will experience additional dilution to the extent New GCT issues any such additional shares after the Closing. 
Holders
No
Redemption
Scenario(1)
% of
Total
50%
Redemption
Scenario(2)
% of
Total
Maximum
Redemption
Scenario(3)
% of
Total
Public Stockholders
3,941,361 7.9% 1,970,681 4.2%
Concord III Initial Stockholders(4)
5,444,267 10.9% 4,536,855 9.6% 3,523,892 8.0%
GCT Equityholders(5)
34,378,722 68.7% 34,378,722 72.9% 34,378,722 77.8%
PIPE Investors
4,484,854 9.0% 4,484,854 9.5% 4,484,854 10.2%
NRA Investors
1,781,626 3.6% 1,781,626 3.8% 1,781,626 4.0%
Total Shares Outstanding, Excluding Additional Dilution
Sources(6)
50,030,830 100% 47,152,738 100% 44,169,094 100%
Total Equity Value Post-Redemptions(7)
$ 500,308,300 $ 471,527,380 $ 441,690,940
 
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Additional Dilution Sources
No
Redemption
Scenario(1)
% of
Total(8a)
Per
Share
Value(8b)
50%
Redemption
Scenario(2)
% of
Total(8a)
Per
Share
Value(8b)
Maximum
Redemption
Scenario (3)
% of
Total(8a)
Per
Share
Value(8b)
Earnout Shares(9)
20,000,000 28.6% $ 7.14 20,000,000 29.8% $ 7.02 20,000,000 31.2% $ 6.88
Public Warrants(10)
17,250,000 25.6% $ 10.38 17,250,000 26.8% $ 10.40 17,250,000 28.1% $ 10.42
Private Warrants(11)
6,580,000 11.6% $ 10.17 6,580,000 12.2% $ 10.18 6,580,000 13.0% $ 10.19
Equity Incentive Plan(12)
4,403,083 8.1% $ 9.19 4,115,274 8.0% $ 9.20 3,816,909 8.0% $ 9.20
Employee Stock Purchase
Plan(13)
600,000 1.2% $ 9.88 600,000 1.3% $ 9.87 600,000 1.3% $ 9.87
Total Additional Dilution Sources(14)
48,833,083 49.4% $ 7.83 48,545,274 50.7% $ 7.79 48,246,909 52.2% $ 7.74
Note: Percentages may not sum due to rounding.
(1)
This scenario assumes that no shares of Concord III Class A Common Stock are redeemed by the Public Stockholders.
(2)
This scenario assumes that 1,970,681 shares of Concord III Class A Common Stock are redeemed by the Public Stockholders.
(3)
This scenario assumes that 3,941,361 shares of Concord III Class A Common Stock are redeemed by the Public Stockholders.
(4)
Interests shown give effect to (i) the transfer by the Sponsors to NRA Investors of 999,665 Founder Shares immediately following consummation of the Business Combination pursuant to certain non-redemption agreements entered into by the Sponsor, (ii) the forfeiture by the Sponsors of an aggregate of 781,961 Founder Shares immediately following consummation of the Business Combination pursuant to certain non-redemption agreements entered into by the Sponsor and (iii) the transfer by the Sponsors of an aggregate of 1,399,107 shares of New GCT Common Stock to GCT’s existing stockholders and investors in the Financings at the Closing. Interests shown include 1,920,375, 1,012,963 and zero Founder Shares currently beneficially owned by the Sponsors which will become Sponsor Earnout Shares at the Closing under the no redemption, 50% redemption and maximum redemption scenarios, respectively.
(5)
Amount includes the conversion of the outstanding GCT common shares, GCT convertible promissory notes and CVT convertible promissory notes under the three redemption scenarios. Amount excludes the issuance of exchanged GCT Stock Options of 612,572 shares, GCT Warrants of 299,999 shares, and Earnout Shares of 20,000,000 under the three redemption scenarios. The GCT Stock Options and GCT Warrants will be converted into equivalent New GCT options and warrants with the same terms and conditions. The Earnout Shares will vest based on achieving the GCT Earnout Targets (as defined herein), which is based on the dollar VWAP of New GCT Common Stock or upon the equivalent per share consideration received as part of a Change in Control transaction.
(6)
The share amounts held by the Public Stockholders and the initial stockholders set forth in the first table above are based on 12,566,361 shares of Concord III Common Stock, of which 12,566,360 were shares of Concord III Class A Common Stock and one was a share of Concord III Class B Common Stock, issued and outstanding as of December 21, 2023. The share amounts and ownership percentages set forth in the first table above do not take into account the additional sources of dilution set forth in the second table above. Stockholders will experience additional dilution to the extent New GCT issues any such additional shares after the Closing.
(7)
This assumes that the total shares outstanding have a value of $10.00 per share.
(8a)
The Percentage of Total with respect to each additional dilution source set forth below, including the Total Additional Dilution Sources, includes the full amount of shares issuable with respect to the applicable additional dilution source in both the numerator and denominator.
(8b)
Calculation of value per share assumes the issuance of the maximum amount of shares of New GCT Common Stock in connection with the additional dilution sources, as described in Notes 10 through 14 below. In addition, calculation of value per share in the rows entitled “Public Warrants” and “Private Warrants” are based on the applicable Total Equity Value Post-Redemptions in the
 
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No Redemption Scenario, the 50% Redemption Scenario and the Maximum Redemption Scenario plus the full exercise of the applicable maximum number of Concord III Warrants at $11.50 per share for a total cash exercise price of approximately $198.4 million in the row entitled “Public Warrants,” or approximately $75.7 million in the row entitled “Private Warrants,” respectively. Calculation of value per share in the row entitled “Total Additional Dilution Sources” is based on the applicable Total Equity Value Post-Redemptions in the No Redemption Scenario, the 50% Redemption Scenario and the Maximum Redemption Scenario plus the full exercise of the applicable maximum number of Concord III Warrants at $11.50 per share in the rows entitled “Public Warrants” and “Private Warrants.”
(9)
This row assumes that all 20,000,000 Earnout Shares potentially issuable to GCT equityholders (upon the realization of all of the benchmark share prices in the earnout) are issued to GCT equityholders and assumes that no additional shares of New GCT Common Stock are issued between the Closing and the realization of all of the benchmark share prices in the earnout.
(10)
This row assumes exercise of all Public Warrants outstanding as of September 30, 2023, to purchase 17,250,000 shares of Concord III Class A Common Stock.
(11)
This row gives effect to the forfeiture of an aggregate of 2,820,000 Private Warrants by the Sponsors as of the Closing.
(12)
This row assumes the issuance of all shares of New GCT Common Stock reserved for issuance under the 2024 Incentive Award Plan following the consummation of the Business Combination.
(13)
This row assumes the issuance of all shares of New GCT Common Stock reserved for issuance under the 2024 Employee Stock Purchase Plan following the consummation of the Business Combination.
(14)
This row assumes the issuance of all shares of New GCT Common Stock in connection with each of the additional dilution sources, as described further in Notes 9 through 13 above, which equals 48,833,083 shares of New GCT Common Stock in the no redemption scenario, 48,545,274 shares of New GCT Common Stock in the 50% redemption scenario, or 48,246,909 shares of New GCT Common Stock in the maximum redemption scenario, in each case, following the consummation of the Business Combination.
The numbers of shares and percentage interests set forth in the tables above are based on a number of assumptions described in the footnotes to the tables and that neither Concord III nor GCT issues any additional equity securities prior to the Business Combination, including in the potential Financings. If the actual facts differ from our assumptions, the numbers of shares and percentage interests set forth above will be different.
Q.
What is the expected per share value of the cash to be received by New GCT in the Business Combination?
A.
The net cash contributed to the balance sheet of New GCT in the Business Combination will depend upon the extent to which Public Stockholders elect to exercise their redemption rights. Although the parties to the Business Combination have deemed the value of New GCT Common Stock to be equal to $10.00 per share for determining the number of shares of New GCT Common Stock issuable to holders of GCT Common Stock, the cash value per share of New GCT Common Stock will be substantially less than $10.00 per share. Set forth below is a calculation of the net cash per New GCT Common Stock resulting from the proceeds of the Trust Account and the Financings in a no redemption scenario, 50% redemption scenario and maximum redemption scenario. Such calculations are based upon (i) cash held in the Trust Account as of September 30, 2023 of approximately $10.69 per Public Share (rounded to the nearest cent) and (ii) estimated transaction expenses of approximately $32.3 million. The calculations do not assume the receipt of any debt or equity financing in connection with the Closing, other than the Financings, or the issuance of any shares as a result of any such other debt or equity financing.
 
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Assuming No
Redemption(1)
Assuming 50%
Redemption(2)
Assuming
Maximum
Redemption(3)
(Amounts in thousands, except for shares and per share amounts)
Concord III Class A Common Stock not redeemed
3,941,361 1,970,681
Gross Cash Proceeds of Trust Account at $10.69 per share
$ 42,133,149 $ 21,066,579
Gross Cash Proceeds from Note Financing
$ 18,300,000 $ 18,300,000 $ 18,300,000
Gross Cash Proceeds from PIPE Investments
$ 29,913,976 $ 29,913,976 $ 29,913,976
Total Gross Cash Proceeds
$ 90,347,125 $ 69,280,555 $ 48,213,976
Estimated Transaction Expenses
$ 32,302,000 $ 32,302,000 $ 32,302,000
Net Cash Proceeds
$ 58,045,125 $ 36,978,555 $ 15,911,976
Total Shares Outstanding
50,030,830 47,152,738 44,169,094
Net Cash Proceeds per share of New GCT Common Stock
Outstanding
$ 1.16 $ 0.78 $ 0.36
(1)
This scenario assumes that no Concord III Class A Common Stock are redeemed by Public Stockholders.
(2)
This scenario assumes that 1,970,681 shares of Concord III Class A Common Stock are redeemed by Public Stockholders.
(3)
This scenario assumes that 3,941,361 shares of Concord III Class A Common Stock are redeemed by Public Stockholders.
The table below sets forth the effective underwriting fee incurred in connection with the Business Combination in each redemption scenario.
Assuming
No
Redemptions
% of
Trust
Account
Assuming
50%
Redemptions
% of
Trust
Account
Assuming
Maximum
Redemptions
% of
Trust
Account
Deferred Underwriting Fee(1)
$ 5,083,575 12.1% $ 5,083,575 24.1% $ 5,083,575 n/a(2)
(1)
Cowen and Company, LLC (“TD Cowen”) will be entitled to $4,660,950 of deferred underwriting commissions upon consummation of the Business Combination. AmeriVet will be entitled to $422,625 of deferred underwriting commissions upon consummation of the Business Combination. On December 8, 2023, Citigroup Global Markets Inc. (“Citi”) waived its entitlement to its portion of the deferred underwriting fee, which was $6,991,425.
(2)
The amount of the deferred underwriting fee payable exceeds the amount remaining in the Trust Account in this scenario.
Q.
Who will be the officers and directors of New GCT if the Business Combination is consummated?
A.
The Business Combination Agreement provides that, immediately following the consummation of the Business Combination, the board of directors of New GCT will be comprised of seven individuals designated as provided in the Business Combination Agreement. As of the date of this proxy statement/prospectus, there are six nominees for membership to the New GCT board of directors, including John Schlaefer, Dr. Kyeongho Lee, Robert Barker, Kukjin Chun, Hyunsoo Shin, and Jeff Tuder, leaving one vacancy to be filled. The Sponsor has the right to designate two initial directors of Concord III to the New GCT board of directors, provided that such directors designated by Sponsor are reasonably acceptable to GCT and at least one of which is an industry expert and qualifies as an independent director. The Sponsor has designated Jeff Tuder as one of the two initial directors of Concord III to the New GCT board of directors, and following the mailing of this proxy statement/prospectus to Concord III stockholders, and most likely following consummation of the Business Combination, the Sponsor will identify an additional candidate to fill the remaining directorship. Immediately following the consummation of the Business Combination, we expect that the following will be the officers of New
 
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GCT: John Schlaefer, David Yoon, Dr. Jeemee Kim and Alex Sum. See “Management of New GCT Following the Business Combination.”
Q.
What conditions must be satisfied to complete the Business Combination?
A.
There are a number of closing conditions in the Business Combination Agreement, including that Concord III’s stockholders have approved and adopted the Business Combination Agreement. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, see the section entitled “The Business Combination Agreement — Conditions to Closing.”
Q.
What happens if I sell my shares of Concord III Common Stock before the special meeting of stockholders?
A.
The record date for the special meeting of stockholders will be earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of Concord III Common Stock after the record date, but before the special meeting of stockholders, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting of stockholders.
Q.
What vote is required to approve the proposals presented at the special meeting of stockholders?
A.
The approval of the Business Combination Proposal, Governance Proposals (on an advisory basis), Incentive Award Plan Proposal, Employee Stock Purchase Plan Proposal, NYSE Proposal and Adjournment Proposal requires the affirmative vote in person or by proxy of the holders of a majority of the then outstanding shares of Concord III Common Stock present and entitled to vote at the special meeting. Accordingly, a Concord III stockholder’s failure to vote by proxy or to vote in person at the special meeting of stockholders or a broker non-vote will have no effect on these Proposals. An abstention will have the same effect as a vote against these Proposals.
The approval of the Charter Amendment Proposal requires the affirmative vote in person or by proxy of the holders of a majority of all then outstanding shares of Concord III Common Stock entitled to vote thereon at the special meeting. Accordingly, a Concord III stockholder’s failure to vote by proxy or to vote in person at the special meeting of stockholders, an abstention from voting or a broker non-vote will have the same effect as a vote against the Charter Amendment Proposal.
The approval of the election of each director nominee pursuant to the Election of Directors Proposal requires the affirmative vote of the holders of a plurality of the outstanding shares of Concord III Common Stock entitled to vote and actually cast thereon at the special meeting. Concord III’s existing certificate of incorporation provides that prior to the closing of the initial Business Combination, the holders of Concord III Class B Common Stock have the exclusive right to elect directors. The Sponsor holds the only outstanding share of Concord III Class B Common Stock. Accordingly, the Sponsor’s failure to vote by proxy or to vote in person at the special meeting of stockholders, an abstention from voting, or a broker non-vote will have the same effect as a vote against the directors in the Election of Directors Proposal.
Q.
How do Concord III’s initial stockholders intend to vote on the proposals?
A.
The Sponsor, Concord III’s directors and officers and CA2 are entitled to vote an aggregate of 68.6% of the outstanding shares of Concord III Common Stock. The Sponsor, Concord III’s directors and officers and CA2 have agreed to vote any Founder Shares and any Public Shares held by them as of the record date in favor of each of the proposals presented at the special meeting.
Q.
Do GCT’s stockholders need to approve the Business Combination?
A.
Yes. The Business Combination requires the affirmative approval of the Business Combination Agreement and the transactions contemplated therein by GCT’s stockholders. In connection with the execution of the Business Combination Agreement, certain stockholders of GCT owning approximately 56% of the voting power of GCT entered into the Stockholder Support Agreement with Concord III, pursuant to which the GCT stockholders agreed to approve the Business Combination Agreement and
 
xiv

 
the transactions contemplated thereby and subject their shares of GCT Common Stock to certain transfer restrictions. See “Certain Agreements Related to The Business Combination — Stockholder Support Agreement.”
Q.
May Concord III or Concord III’s directors, officers or advisors, or their affiliates, purchase shares in connection with the Business Combination?
A.
At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding Concord III or its securities, Concord III, Concord III’s officers, directors and advisors, the Sponsor, GCT and/or their respective affiliates may purchase Public Shares and/or Public Warrants from investors, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of Concord III Common Stock. In such transactions, the purchase price for the Concord III Common Stock is not expected to exceed the redemption price. In addition, the persons and entities described above will waive redemption rights, if any, with respect to the Concord III Common Stock they acquire in such transactions. However, any Concord III Common Stock acquired by the persons or entities described above would not vote on the Business Combination Proposal.
The purpose of such share purchases and other transactions would be to increase the likelihood that the conditions to the consummation of the Business Combination are satisfied. This may result in the completion of our Business Combination which may not otherwise have been possible.
As of the date of this proxy statement/prospectus, there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder. If such arrangements or agreements are entered into, Concord III will file with the SEC a Current Report on Form 8-K prior to the special meeting to disclose any arrangements entered into or significant purchases made by any of the aforementioned persons or entities. Any such report will include: (i) the amount of Public Shares purchased and the purchase price; (ii) the purpose of such purchases; (iii) the impact of such purchases on the likelihood that the Business Combination will be approved; (iv) the identities or characteristics of security holders who sold shares if not purchased in the open market or the nature of the sellers; and (v) the number of Public Shares for which Concord III has received redemption requests.
Q.
How many votes do I have at the special meeting of stockholders?
A.
Concord III’s stockholders are entitled to one vote at the special meeting for each share of Concord III Common Stock held of record as of the record date. As of the close of business on the record date, there were 12,566,361 outstanding shares of Concord III Common Stock.
Q.
What interests do Concord III’s current officers and directors have in the Business Combination?
A.
Concord III’s board of directors and executive officers may have interests in the Business Combination that are different from, in addition to or in conflict with, yours. Concord III’s board of directors was aware of and considered these interests to the extent such interests existed at the time, among other matters, in approving the Business Combination Agreement and in recommending that the Business Combination Agreement and the transactions contemplated thereby be adopted and approved by the stockholders of Concord III. Concord III’s board of directors concluded, after taking into account the differing interests described below, that on balance, the factors set forth above supported a favorable determination that the Business Combination Agreement and the Business Combination are advisable and in the best interests of Concord III and its stockholders. These interests include:

the beneficial ownership of the Sponsor, which is governed by a board of managers consisting of three managers, Bob Diamond, David Schamis and Jeff Tuder, of an aggregate of 16,218,333 shares of Concord III Common Stock, consisting of:

7,957,727 Founder Shares purchased by the Sponsor for an aggregate price of $25,000;

8,260,606 shares of Concord III Class A Common Stock underlying Private Warrants purchased by the Sponsor at $1.00 per warrant for an aggregate purchase price of approximately $8.26 million.
 
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All of the above Founder Shares and warrants would become worthless if Concord III does not complete a business combination within the applicable time period, as the Sponsor has waived any right to redemption with respect to these shares. Such shares and warrants have an aggregate market value of approximately $84.3 million and $700,000, respectively, based on the closing price of Concord III Class A Common Stock of $10.59 and the closing price of Concord III Warrants of $0.0839 on the NYSE on January 26, 2024;

the beneficial ownership of Concord III’s independent directors, Peter Ort, Thomas King and Larry Leibowitz, who each hold 30,000 Founder Shares with a total market value of approximately $318,000 based on the closing price of Concord III Class A Common Stock of $10.59 on the NYSE on January 26, 2024. The Founder Shares would become worthless if Concord III does not complete a business combination within the applicable time period, as the independent directors have waived any right to redemption with respect to these shares;

the fact that given the differential in the purchase price that the Sponsors paid for the Founder Shares as compared to the price of Concord III Units sold in the IPO and the substantial number of shares of Concord III Class A Common Stock held by the initial stockholders upon conversion of the Founder Shares, they and their affiliates may earn a positive rate of return on their investment, even if Public Stockholders experience a negative rate of return following the completion of the Business Combination, including if the share price of New GCT Common Stock after the Closing falls as low as $1.09 per share, as the market value of the 8,625,000 Founder Shares would be approximately equal to the initial stockholders’ initial investment in Concord III;

the economic interests in the Sponsor held directly or indirectly by certain of Concord III’s officers and directors, including Bob Diamond and Jeff Tuder, which gives them an indirect pecuniary interest in the securities of Concord III, including the Founder Shares and Private Warrants held by the Sponsor and which interest will become worthless if Concord III does not consummate an initial business combination within the applicable time period;

As of September 30, 2023, there was no balance outstanding in Working Capital Loans extended by the Sponsor to Concord III pursuant to the Sponsor Promissory Note. Other than repayment of Working Capital Loans in connection with the consummation of the Business Combination, there are presently no fees that will be paid and no out-of-pocket expenses that would be reimbursed to the Sponsor upon consummation of the Business Combination;

the continued right of the Sponsor to hold Concord III Class A Common Stock and the shares of Concord III Class A Common Stock to be issued to the Sponsor upon exercise of its Private Warrants following the Business Combination, subject to certain lock-up periods and forfeiture pursuant to the Sponsor Support Agreement;

the fact that the Sponsor and Concord III’s executive officers and directors, for no compensation, have agreed not to redeem any shares of Concord III held by them in connection with a stockholder vote to approve the Business Combination and to vote any shares of Concord III Common Stock held by them in favor of the Business Combination Proposal;

the fact that if the Trust Account is liquidated, including in the event Concord III is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Concord III to ensure that the proceeds in the Trust Account are not reduced below $10.20 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Concord III has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Concord III, but only if such a vendor or target business has not executed a waiver (other than Concord III’s independent public accountants) of any and all rights to amounts held in the Trust Account;

the fact that Jeff Tuder, the current Chief Executive Officer and a director of Concord III, is expected to become a director of New GCT after the consummation of the Business Combination. As such, in the future he will receive any cash fees, stock options, stock awards or other remuneration that the New GCT board of directors determines to pay to him for his services as a director;
 
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Concord III’s existing certificate of incorporation provides that the doctrine of corporate opportunity will not apply with respect to Concord III or any of its officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have. Concord III does not believe that the pre-existing fiduciary duties or contractual obligations of its officers and directors materially impacted its search for an acquisition target. In the course of their other business activities, Concord III’s officers and directors may become aware of other investment and business opportunities which may be appropriate for presentation to Concord III as well as the other entities with which they are affiliated. Concord III’s management has pre-existing fiduciary duties and contractual obligations and if there is a conflict of interest in determining to which entity a particular business opportunity should be presented, any entity with whom Concord III’s management has a pre-existing fiduciary obligation will be presented the opportunity before Concord III is presented with it. Concord III does not believe, however, that the fiduciary duties or contractual obligations of Concord III’s officers or directors or waiver of corporate opportunity materially affected Concord III’s search for a business combination. Concord III is not aware of any such corporate opportunity not being offered to Concord III and does not believe the renouncement of Concord III’s interest in any such corporate opportunities impacted Concord III’s search for an acquisition target; and

the continued indemnification of current directors and officers of Concord III and the continuation of directors’ and officers’ liability insurance after the Business Combination.
These interests may influence Concord III’s board of directors in making their recommendation that you vote in favor of the approval of the Business Combination Proposal. The existence of financial and personal interests of the Sponsor, board of directors and executive officers of Concord III may mean that they may be incentivized to recommend, approve and/or complete the Business Combination, or an alternative business combination, with a less favorable target company or on terms less favorable to Public Stockholders and holders of Public Warrants than they would otherwise recommend, approve or complete, as the case may be, rather than allow Concord III to wind up having failed to consummate a business combination and lose their entire investment. Further, because of these interests, the Sponsor, board of directors and executive officers of Concord III could benefit from the completion of a business combination that is not favorable to Public Stockholders and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to Public Stockholders rather than liquidate. You should also read the section entitled “The Business Combination — Interests of Concord III’s Directors and Officers in the Business Combination.”
Q.
Did Concord III’s board of directors obtain a third-party valuation or fairness opinion in determining whether to proceed with the Business Combination?
A.
Concord III’s board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. Concord III’s board of directors believes that based upon the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders. Concord III’s board of directors also determined, without seeking a valuation from a financial advisor, that GCT’s fair market value was at least 80% of Concord III’s net assets, excluding any taxes payable on interest earned. Accordingly, investors will be relying on the judgment of Concord III’s board of directors as described above in valuing GCT’s business and assuming the risk that Concord III’s board of directors may not have properly valued such business.
Q.
What happens if the Business Combination Proposal is not approved?
A.
If the Business Combination Proposal is not approved and Concord III does not consummate a business combination by August 8, 2024, or amend its amended and restated certificate of incorporation to extend the date by which Concord III must consummate an initial business combination, Concord III will be required to dissolve and liquidate the Trust Account.
 
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Q.
Do I have conversion or redemption rights?
A.
If you are a holder of Public Shares, you have the right to demand that Concord III convert your Public Shares into a pro rata portion of the cash held in the Trust Account, which holds the proceeds of the IPO, calculated as of two business days prior to the consummation of the Business Combination, upon the consummation of the Business Combination. We refer to these rights to demand conversion of the Public Shares as “redemption rights.” Holders of the outstanding Public Warrants do not have redemption rights with respect to such warrants in connection with the Business Combination. The Sponsors and each of Concord III’s officers and directors have agreed to waive their redemption rights with respect to their Founder Shares and any Public Shares that they may have acquired during or after the IPO, in connection with the completion of Concord III’s initial business combination. None of such persons received any specific consideration for agreeing not to seek redemption of such shares. These shares will be excluded from the pro rata calculation used to determine the per share conversion price. For illustrative purposes, based on funds in the Trust Account of approximately $42.4 million as of December 31, 2023, the estimated per share conversion price would have been approximately $10.76. This is greater than the $10.00 IPO price of Concord III Units. Additionally, Public Shares properly tendered for conversion will only be converted if the Business Combination is consummated; otherwise, holders of such shares will only be entitled to a pro rata portion of the Trust Account, including interest (which interest will be net of taxes payable by Concord III), in connection with the liquidation of the Trust Account.
Q.
Will how I vote affect my ability to exercise redemption rights?
A.
No. You may exercise your redemption rights whether you vote your Public Shares for or against the Business Combination Proposal or do not vote your shares. As a result, the Business Combination Proposal can be approved by stockholders who will convert their Public Shares and no longer remain stockholders, leaving stockholders who choose not to convert their Public Shares holding shares in a company with a less liquid trading market, fewer stockholders, less cash and the potential inability to meet the listing standards of the NYSE.
Q.
How do I exercise my redemption rights?
A.
A holder of Public Shares may exercise redemption rights regardless of whether it votes for or against the Business Combination Proposal or does not vote on such proposal at all, or if it is a holder of Public Shares on the record date. If you are a holder of Public Shares and wish to exercise your redemption rights, you must demand that Concord III convert your Public Shares into cash, and deliver your Public Shares to Continental Stock Transfer & Trust Company, Concord III’s transfer agent, physically or electronically using The Depository Trust Company’s (“DTC”) Deposit/Withdrawal at Custodian (“DWAC”) System no later than two (2) business days prior to the special meeting. Any holder of Public Shares seeking conversion will be entitled to a full pro rata portion of the amount then in the Trust Account, less any owed but unpaid taxes on the funds in the Trust Account. Such amount will be paid promptly upon consummation of the Business Combination. As of December 31, 2023, Concord III has no accrual of federal income taxes payable for the year ended December 31, 2023.
Any request for conversion, once made by a holder of Public Shares, may be withdrawn at any time prior to the time the vote is taken with respect to the Business Combination Proposal at the special meeting. If you deliver your shares for conversion to Concord III’s transfer agent and later decide prior to the special meeting not to elect conversion, you may request that Concord III’s transfer agent return the shares (physically or electronically). You may make such request by contacting Concord III’s transfer agent at the address listed under the question “Who can help answer my questions?” below.
Any written demand of redemption rights must be received by Concord III’s transfer agent at least two (2) business days prior to the vote taken on the Business Combination Proposal at the special meeting. No demand for conversion will be honored unless the holder’s stock has been delivered (either physically or electronically) to the transfer agent.
If you are a holder of Public Shares (including through the ownership of Concord III Units) and you exercise your redemption rights, it will not result in the loss of any Concord III Warrants that you may
 
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hold (including those contained in any Concord III Units you hold). Your Concord III Warrants will become exercisable to purchase one share of Concord III Common Stock for a purchase price of $11.50 beginning the later of 30 days after consummation of the Business Combination or 12 months from the closing of the IPO.
Q.
What are the U.S. federal income tax consequences of exercising my redemption rights?
A.
The U.S. federal income tax consequences of exercising your redemption rights depend on your particular facts and circumstances. See the section entitled “Material U.S. Federal Income Tax Considerations of the Redemption rights and the Business Combination — U.S. Federal Income Tax Considerations of the Conversion to Holders of Concord III Class A Common Stock.”
Q.
If I hold Concord III Warrants, can I exercise redemption rights with respect to my warrants?
A.
No. Holders of Concord III Warrants do not have any redemption rights with respect to such warrants. Assuming maximum redemptions of 3,941,361 shares of Concord III Class A Common Stock and based on the closing price of such Concord III Warrants of $0.07 on NYSE as of January 30, 2024, the aggregate value that can be retained by Public Stockholders who have properly exercised their redemption rights is $1,207,500. The actual market price of Concord III Warrants may be higher or lower on the date that a holder of Concord III Warrants seeks to sell or exercise such Concord III Warrants. Additionally, Concord III cannot assure the holders of Concord III Warrants that they will be able to sell their Concord III Warrants in the open market as there may not be sufficient liquidity in such Concord III Warrants when a holder thereof desires to sell. Further, while the level of redemptions of Concord III Class A Common Stock will not directly change the value of Concord III Warrants, as Concord III Warrants will remain outstanding regardless of the level of redemptions, as redemptions of Concord III Class A Common Stock increase, a holder of Concord III Warrants will ultimately own a greater interest in Concord III (or, after completion of the Business Combination, New GCT) because there would be fewer shares of Concord III Class A Common Stock (or, after completion of the Business Combination, shares of New GCT Common Stock) outstanding overall. Further, the potential for the issuance of a substantial number of shares of Concord III Class A Common Stock (or, after completion of the Business Combination, shares of New GCT Common Stock) upon exercise of Concord III Warrants (or, after completion of the Business Combination, New GCT Warrants) could make New GCT less attractive to investors. Any such issuance will increase the number of issued and outstanding shares of Concord III Class A Common Stock (or, after completion of the Business Combination, shares of New GCT Common Stock) and reduce the value of the outstanding Concord III Class A Common Stock (or, after completion of the Business Combination, New GCT Common Stock). Therefore, the outstanding Concord III Warrants (or, after completion of the Business Combination, New GCT Warrants) could have the effect of depressing the market price of Concord III Class A Common Stock (or, after completion of the Business Combination, New GCT Common Stock).
Q.
Do I have appraisal rights if I object to the proposed Business Combination?
A.
No. There are no appraisal rights available to holders of shares of Concord III Common Stock in connection with the Business Combination.
Q.
What happens to the funds held in the Trust Account upon consummation of the Business Combination?
A.
If the Business Combination is consummated, the funds held in the Trust Account will be released to pay (i) Concord III stockholders who properly exercise their redemption rights and (ii) expenses incurred by GCT and Concord III in connection with the Business Combination, to the extent not otherwise paid prior to the Closing. Any additional funds available for release from the Trust Account will be used for general corporate purposes of Concord III and GCT following the Business Combination.
Q.
What happens if the Business Combination is not consummated?
A.
There are certain circumstances under which the Business Combination Agreement may be terminated. See the section entitled “The Business Combination Agreement — Termination” for information regarding the parties’ specific termination rights.
 
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If, as a result of the termination of the Business Combination Agreement or otherwise, Concord III is unable to complete a business combination by August 8, 2024 or obtain the approval of Concord III stockholders to extend the deadline for Concord III to consummate an initial business combination, Concord III’s amended and restated certificate of incorporation provides that Concord III will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the issued and outstanding Public Shares, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish rights of the Public Stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and Concord III’s board of directors in accordance with applicable law, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. See the sections entitled “Risk Factors — Concord III may not be able to consummate an initial business combination within the required time period, in which case it would cease all operations except for the purpose of winding up and it would redeem the Public Shares and liquidate” and “— Concord III’s stockholders may be held liable for claims by third parties against Concord III to the extent of distributions received by them upon redemption of their shares.” The Sponsor has waived any right to any liquidation distribution with respect to the Founder Shares.
In the event of liquidation, there will be no distribution with respect to outstanding Concord III Warrants. Accordingly, the Concord III Warrants will expire worthless.
Q.
When is the Business Combination expected to be completed?
A.
It is currently anticipated that the Business Combination will be consummated promptly following the special meeting of stockholders, provided that all other conditions to the consummation of the Business Combination have been satisfied or waived.
For a description of the conditions to the completion of the Business Combination, see the section entitled “The Business Combination Agreement — Conditions to Closing.
Q.
What do I need to do now?
A.
You are urged to carefully read and consider the information contained in this proxy statement/prospectus, including the financial statements and annexes attached hereto, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.
Q.
How do I vote?
A.
If you were a holder of record of Concord III Common Stock on February 5, 2024, the record date for the special meeting of stockholders, you may vote with respect to the applicable proposals in person at the special meeting or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.
Voting by Mail.   By signing the proxy card and returning it in the enclosed postage-paid envelope, you are authorizing the individuals named on the proxy card to vote your shares of Concord III Common Stock at the special meeting in the manner you indicate. Concord III encourages you to sign and return the proxy card even if you plan to attend the special meeting so that your shares will be voted if you are unable to attend the special meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by 5:00 p.m. Eastern Time on February 26, 2024.
 
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Voting at the Special Meeting.   If your shares of Concord III Common Stock are registered directly in your name, you are considered the stockholder of record and you have the right to vote in person at the special meeting. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the special meeting and vote in person, you will need to contact your broker, bank or nominee to obtain a legal proxy that will authorize you to vote these shares. For additional information, please see the section entitled “The Special Meeting of Concord III Stockholders.”
Q.
What will happen if I abstain from voting or fail to vote at the special meeting?
A.
At the special meeting of stockholders, Concord III will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, an abstention will have the same effect as a vote “against” the Business Combination Proposal, Charter Amendment Proposal, Governance Proposals, Incentive Award Plan Proposal, Employee Stock Purchase Plan Proposal, NYSE Proposal, Election of Directors Proposal and Adjournment Proposal. Failure to vote by proxy or to vote in person at the special meeting will have the same effect as a vote “against” the Charter Amendment Proposal and will have no effect on the other proposals.
Q.
What will happen if I sign and return my proxy card without indicating how I wish to vote?
A.
Signed and dated proxies received by Concord III without an indication of how the stockholder intends to vote on a proposal will be voted in favor of each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the special meeting.
Q.
Do I need to attend the special meeting of stockholders to vote my shares?
A.
No. You are invited to attend the special meeting to vote on the proposals described in this proxy statement/prospectus. However, you do not need to attend the special meeting of stockholders to vote your shares. Instead, you may submit your proxy by signing, dating and returning the applicable enclosed proxy card(s) in the pre-addressed postage-paid envelope. Your vote is important. Concord III encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus.
Q.
If I am not going to attend the special meeting of stockholders, should I return my proxy card instead?
A.
Yes. Whether you plan to attend the special meeting or not, please read and consider the information contained in this proxy statement/prospectus carefully and vote your shares of Concord III Common Stock by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.
Q.
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
A.
No. If your broker holds your shares in its name and you do not give the broker voting instructions, under the applicable stock exchange rules, your broker may not vote your shares on any of the Concord III Proposals. If you do not give your broker voting instructions and the broker does not vote your shares, this is referred to as a “broker non-vote.” Broker non-votes will not be counted for purposes of determining the presence of a quorum at the special meeting of stockholders. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide. However, in no event will a broker non-vote have the effect of exercising your redemption rights for a pro rata portion of the Trust Account, and therefore no shares as to which a broker non-vote occurs will be converted in connection with the proposed Business Combination.
 
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Q.
May I change my vote after I have mailed my signed proxy card?
A.
Yes. You may change your vote by sending a later-dated, signed proxy card to Concord III’s secretary at the address listed below prior to the vote at the special meeting of stockholders, or attend the special meeting and vote in person. You also may revoke your proxy by sending a notice of revocation to Concord III’s secretary, provided such revocation is received prior to the vote at the special meeting. If your shares are held in street name by a broker or other nominee, you must contact the broker or nominee to change your vote.
Q.
What should I do if I receive more than one set of voting materials?
A.
You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.
Q.
What is the quorum requirement for the special meeting of stockholders?
A.
A quorum will be present at the special meeting of stockholders if a majority of the Concord III Common Stock outstanding and entitled to vote at the meeting is represented in person or by proxy.
As of the record date for the special meeting, 6,283,181 shares of Concord III Common Stock would be required to achieve a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy (or your broker, bank or other nominee submits one on your behalf) or if you vote in person at the special meeting of stockholders. Abstentions will be counted towards the quorum requirement. If there is no quorum, a majority of the shares represented by stockholders present at the special meeting or by proxy may authorize adjournment of the special meeting to another date.
As of the date of this proxy statement/prospectus, the Sponsor, Concord III’s directors and officers and CA2 hold an aggregate of approximately 68.6% of the issued and outstanding shares of Concord III Common Stock, which will count towards this quorum. As a result, as of the record date for the special meeting, in addition to the shares of the Sponsor, Concord III’s directors and officers and CA2, no additional Public Shares would be required to be present at the special meeting to achieve a quorum.
Q.
What happens to the Concord III Warrants I hold if I vote my shares of Concord III Common Stock against approval of the Business Combination Proposal and validly exercise my redemption rights?
A.
Properly exercising your redemption rights as a Concord III stockholder does not result in either a vote “FOR” or “AGAINST” the Business Combination Proposal. If the Business Combination is not completed, you will continue to hold your Concord III Warrants, and if Concord III does not otherwise consummate an initial business combination by August 8, 2024 or obtain the approval of Concord III stockholders to extend the deadline for Concord III to consummate an initial business combination, Concord III will be required to dissolve and liquidate, and your Concord III Warrants will expire worthless.
Q.
Who will solicit and pay the cost of soliciting proxies?
A.
Concord III will pay the cost of soliciting proxies for the special meeting. Concord III has engaged Morrow Sodali LLC to assist in the solicitation of proxies for the special meeting. Concord III has agreed to pay Morrow Sodali LLC a fee of $15,000. Concord III will reimburse Morrow Sodali LLC for reasonable out-of-pocket expenses and will indemnify Morrow Sodali LLC and its affiliates against certain claims, liabilities, losses, damages and expenses. Concord III also will reimburse banks, brokers
 
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and other custodians, nominees and fiduciaries representing beneficial owners of shares of Concord III Common Stock for their expenses in forwarding soliciting materials to beneficial owners of Concord III Common Stock and in obtaining voting instructions from those owners. Concord III’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.
Q.
Who can help answer my questions?
A.
If you have questions about the stockholder proposals, or if you need additional copies of this proxy statement/prospectus or the proxy card you should contact our proxy solicitor at:
Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford CT 06902
Telephone: Toll-Free (800) 662-5200 or (203) 658-9400
Banks and brokers can call collect at: (203) 658-9400
Email: CND.info@investor.morrowsodali.com
You may also contact Concord III at:
Concord Acquisition Corp III
477 Madison Avenue, 22nd Floor
New York, NY 10022
(212) 883-4330
Attention: Secretary
To obtain timely delivery, Concord III’s stockholders and warrantholders must request the materials no later than five business days prior to the special meeting.
You may also obtain additional information about Concord III from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”
If you intend to seek conversion of your Public Shares, you will need to send a letter demanding conversion and deliver your stock (either physically or electronically) to Concord III’s transfer agent prior to 5:00 p.m., New York time, on the second business day prior to the special meeting of stockholders. If you have questions regarding the certification of your position or delivery of your stock, please contact:
Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
Attention: Mark Zimkind
E-mail: mzimkind@continentalstock.com
 
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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the Business Combination and the proposals to be considered at the special meeting, you should read this proxy statement/prospectus carefully and in its entirety, including the annexes. See also the section entitled “Where You Can Find More Information.”
Parties to the Business Combination
Concord III
Concord III is a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, referred to throughout this proxy statement/prospectus as its initial business combination. Concord III may pursue its initial business combination in any business, industry or geographic region. Upon the Closing, Concord III intends to change our name from “Concord Acquisition Corp III” to “GCT Semiconductor Holding, Inc.”
Concord III Class A Common Stock, Concord III Warrants and Concord III Units, consisting of one share of Concord III Common Stock and one-half Concord III Warrant, are traded on the NYSE under the ticker symbols “CNDB,” “CNDB.WS” and “CNDBU,” respectively. We intend to apply to continue the listing of the New GCT Common Stock and New GCT Warrants on the NYSE under the symbols “GCTS” and “GCTSW,” respectively, upon the Closing. The Concord III Units will automatically separate into the component securities upon consummation of the Business Combination and, as a result, will no longer trade as a separate security.
The mailing address of Concord III’s principal executive office is 477 Madison Avenue, 22nd Floor, New York, New York 10022, and its telephone number is (212) 883-4330. For more information about Concord III, see the sections entitled “Information About Concord III” and “Concord III Management’s Discussion and Analysis of Financial Condition and Results of Operation.”
GCT
GCT was founded in Silicon Valley, California in 1999 and is a fabless semiconductor company that specializes in the design, manufacturing 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, B2B and consumer applications. GCT has 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., CPE), industrial M2M applications and smartphones.
The mailing address of GCT’s principal executive office is 2290 North 1st Street, Suite 201 San Jose, CA 95131, and its telephone number is +1 (408) 434-6040. For more information about GCT, see the sections entitled “Information About GCT” and “GCT Management’s Discussion and Analysis of Financial Condition and Results of Operation.”
The Business Combination
The Business Combination Agreement
On November 2, 2023, Concord III, GCT and Merger Sub entered into the Business Combination Agreement, pursuant to which Merger Sub will be merged with and into GCT, with GCT surviving the Merger as a direct wholly-owned subsidiary of Concord III. The Business Combination Agreement contains customary representations and warranties, covenants, closing conditions, termination fee provisions and other terms relating to the Business Combination and the other transactions contemplated thereby.
The Aggregate Transaction Consideration will be equal to the quotient of (i) the Company Value divided by (ii) $10.00. Immediately prior to the Closing, all of the outstanding principal and accrued interest under
 
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the outstanding promissory notes issued by GCT that can be converted into shares of GCT Common Stock will be so converted in accordance with their terms.
At the Closing, each share of common stock of GCT that is issued and outstanding immediately prior to the effective time of the Merger (other than Dissenting Shares, as defined in the Business Combination Agreement) will be cancelled and converted into the right to receive a number of shares of New GCT Common Stock equal to an exchange ratio determined by dividing the number of shares of New GCT Common Stock, constituting the Aggregate Transaction Consideration by the Company Fully-Diluted Number (as defined in the Business Combination Agreement) (the “Exchange Ratio”).
At the Closing, each option and warrant to purchase GCT Common Stock, whether or not exercisable and whether or not vested, will automatically be converted into an option or warrant, as applicable, to purchase a number of shares of New GCT Common Stock in the manner set forth in the Business Combination Agreement.
At the Closing, each award of restricted stock units relating to a share of GCT Common Stock granted under GCT’s existing equity plans will automatically be converted into an award of restricted stock units covering the number of shares of New GCT Common Stock in the manner set forth in the Business Combination Agreement.
For more information about the Business Combination Agreement and the Business Combination and other transactions contemplated thereby, see the sections entitled “Proposal No. 1 — The Business Combination Proposal” and “The Business Combination Agreement.”
Earnout
Following the Closing, New GCT will issue up to an aggregate of 20,000,000 additional shares of New GCT Common Stock to the stockholders of GCT as of immediately prior to the Closing and the Financing Investors if the volume weighted average price (the “VWAP”) of the shares of New GCT Common Stock equals or exceeds certain minimum share prices at any time during the period starting 60 days following the Closing and expiring on the fifth anniversary of the Closing, as follows:

6,666,667 shares if the VWAP of the shares of New GCT Common Stock equals or exceeds $12.50 for any 20 trading days within a period of 30 consecutive trading days during the Earnout Period;

6,666,666 shares if the VWAP of the shares of New GCT Common Stock equals or exceeds $15.00 for any 20 trading days within a period of 30 consecutive trading days during the Earnout Period; and

6,666,667 shares if the VWAP of the shares of New GCT Common Stock equals or exceeds $17.50 for any 20 trading days within a period of 30 consecutive trading days during the Earnout Period.
Such shares will also become issuable under certain circumstances if a “change of control” of New GCT occurs prior to the applicable earnout expiration date and the price per share in the change of control equals or exceeds the applicable price target. For more information, see the section entitled “The Business Combination — Earnout.”
Conditions to Closing
The consummation of the Business Combination is subject to customary closing conditions, including, among others: (i) approval by Concord III’s and GCT’s respective stockholders, (ii) no law, regulation, judgment, decree, executive order or award enjoining or prohibiting the consummation of the Business Combination, (iii) Concord III having at least $5,000,001 of net tangible assets upon the consummation of the Closing, (iv) the effectiveness of this Registration Statement, (v) receipt of approval for listing on the NYSE of the shares of New GCT Common Stock to be issued in connection with the Business Combination, (vi) no material adverse effect with respect to Concord III or GCT having occurred and continuing, (vii) the accuracy of the parties’ respective representations and warranties (subject to specified materiality thresholds) and the material performance of the parties’ respective covenants and other obligations and (viii) the PIPE Investors having invested at least $25,000,000 in the PIPE Financing.
For more information, see the section entitled “The Business Combination — Conditions to Closing.”
 
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Termination
The Business Combination Agreement may be terminated at any time prior to the effective time of the Merger: (i) by mutual written consent of Concord III and GCT; (ii) by either Concord III or GCT (a) if the effective time of the Merger has not occurred on or before September 30, 2024 (or such later date as Concord III’s deadline to consummate a business combination shall be extended to, if applicable) (the “Outside Date”), (b) if a governmental entity has enacted, issued, promulgated, enforced or entered any injunction, order, decree or ruling that is final and nonappealable and has the effect of making the consummation of the Transactions, including the Merger, illegal or otherwise preventing or prohibiting consummation of the Transactions, including the Merger, (c)(1) if, at Concord III Stockholders’ Meeting, approval of Concord III Stockholder Matters is not obtained by reason of failure to obtain the requisite vote for approval or (2) if GCT does not deliver approval of the Transactions by the requisite holders of its capital stock within ten business days after the date of the Business Combination Agreement or (d) in the event of certain uncured breaches by the other party; or (iii) by Concord III, by written notice to GCT, if the Required Financials have not been delivered to Concord III by GCT within 45 days of the date of the Business Combination Agreement.
For more information, see the section entitled “The Business Combination Agreement — Termination,” “— Effect of Termination” and “— Termination Fee.”
Amendments to the Charter
Pursuant to the Business Combination Agreement, at the Effective Time, Concord III’s amended and restated certificate of incorporation will be further amended and restated to:

change Concord III’s name to “GCT Semiconductor Holding, Inc.” and remove certain provisions related to Concord III’s status as a special purpose acquisition company that will no longer be relevant following the Closing;

increase the number of authorized shares of Concord III Common Stock to 400,000,000 and the number of authorized shares of Concord III’s preferred stock to 40,000,000 shares;

require a supermajority vote for the removal of directors for cause;

require that special meetings of stockholders may only be called by the board of directors pursuant to a resolution adopted by a majority of the total number of directors, subject to any special rights of the holders of preferred stock; and

modify the forum selection provision to designate the U.S. federal district courts as the exclusive forum for claims arising under the Securities Act rather than providing for concurrent jurisdiction in the Court of Chancery and the federal district court for the District of Delaware for claims arising under the Securities Act.
For more information about these amendments to Concord III’s amended and restated certificate of incorporation, see the sections entitled “Proposal No. 2 — The Charter Amendment Proposal” and “Proposal Nos. 3A-3E — The Governance Proposals.”
Certain Agreements Related to the Business Combination Agreement
PIPE Subscription Agreements; Convertible Note Financing
Concurrently with the execution of the Business Combination Agreement, the PIPE Investors entered into the PIPE Subscription Agreements pursuant to which the PIPE Investors have committed to purchase in a private placement an aggregate of 4,484,854 shares of New GCT Common Stock at a purchase price of $6.67 per share and an aggregate purchase price of approximately $29.9 million. The purchase of the PIPE Shares is conditioned upon, among other things, the consummation of the Business Combination and will be consummated immediately prior to or substantially concurrently with the Closing. The PIPE Shares to be issued pursuant to the PIPE Subscription Agreements have not been registered under the Securities Act, and will be issued in reliance on the availability of an exemption from such registration.
 
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In addition, in connection with the execution of the Business Combination Agreement, GCT issued convertible promissory notes to the CVT Investors, pursuant to which GCT borrowed an aggregate principal amount of $18.3 million, which notes will convert into shares of New GCT Common Stock (“Note Financing Shares”) at a conversion price of $6.67 per share concurrently with the Closing. The purchase price of PIPE Shares and the conversion price of Note Financing Shares are substantially below the redemption price, which could have a negative impact on the value of the New GCT Common Stock after the Closing. In addition, Concord III’s warrants include certain down-round provisions under which their exercise price may be reduced, if (a) Concord III issues additional shares of Concord III Class A Common Stock or securities convertible into or exercisable or exchangeable for shares of Concord III Class A Common Stock for capital raising purposes in connection with the closing of its initial business combination at an issue price or effective issue price of less than $9.20 per share of Concord III Class A Common Stock (the “Newly Issued Price”), (b) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of an initial business combination on the date of the consummation of such initial business combination (net of redemptions), and (c) the volume weighted average trading price of Concord III Class A Common Stock during the twenty (20) trading day period starting on the trading day prior to the day on which Concord III consummates an initial business combination (such price, the “Market Value”) is below $9.20 per share, the price per share (including in cash or by payment of warrants pursuant to a “cashless exercise,” to the extent permitted) at which shares of the Concord III Class A Common Stock may be purchased at the time a warrant is exercised will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. Those adjustment provisions may be triggered by the issuance of the PIPE Shares and/or the Note Financing Shares. However, since the Market Value will not be available until twenty (20) trading days after the trading day prior to the day on which Concord III consummates an initial business combination, we cannot confirm whether the issuance of the PIPE Shares and/or the Note Financing Shares will trigger the adjustment provisions discussed above until then. Any such adjustments, if triggered, or the potential for such adjustments could make it more difficult for us to raise capital, cause the market price of New GCT securities to decline significantly or cause a higher level of redemptions in connection with our Business Combination.
For more information about the PIPE Subscription Agreements and the Note Financing, see the section entitled “Certain Agreements Related to the Business Combination — PIPE Subscription Agreements; Convertible Note Financing.”
Stockholder Support Agreement
In connection with the execution of the Business Combination Agreement, Concord III entered into a support agreement (the “Stockholder Support Agreement”) with certain stockholders of GCT pursuant to which such stockholders have, among other things, agreed to (i) provide their written consent to adopt and approve the Business Combination Agreement and all other documents and transactions contemplated thereby within 10 business days as of the date of the Business Combination Agreement and (ii) subject their shares of GCT Common Stock to certain transfer restrictions.
For more information about the Stockholder Support Agreement, see the section entitled “Certain Agreements Related to the Business Combination — Stockholder Support Agreement.”
Sponsor Support Agreement
Concurrently with the execution and delivery of the Business Combination Agreement, Concord III entered into a sponsor support agreement (the “Sponsor Support Agreement”) with GCT, the Sponsor and CA2. Pursuant to the Sponsor Support Agreement, the Sponsor and CA2 have, among other things, agreed to vote all of their shares of Concord III’s common stock in favor of the approval of the Business Combination, including the Merger, not to redeem any of their shares of Concord III Common Stock and to waive their anti-dilution protections with respect to their Founder Shares.
In addition, the Sponsor and CA2 agreed that up to an aggregate of 1,920,375 Sponsor Earnout Shares will be unvested and subject to forfeiture as of the Closing and will only vest if, during the period starting 6 months following the Closing and expiring on the fifth anniversary of the Closing, with respect to
 
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one-third of the Sponsor Earnout Shares, the VWAP of New GCT Common Stock equals or exceeds $12.50, with respect to one-third of the Sponsor Earnout Shares, the VWAP of New GCT Common Stock equals or exceeds $15.00 and with respect to one-third of the Sponsor Earnout Shares, the VWAP of New GCT Common Stock equals or exceeds $17.50, in each case for any 20 trading days within a period of 30 consecutive trading days and as such share price targets may be adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like. Any Sponsor Earnout Shares that remain unvested after the fifth anniversary of the Closing will be forfeited. The number of Sponsor Earnout Shares is determined based on the aggregate amount of (i) funds remaining in Concord III’s trust account at the Closing, after giving effect to the exercise of redemption rights, (ii) any proceeds of the PIPE Financing that is not provided by existing stockholders of GCT or investors introduced by existing stockholders of GCT or by GCT or its affiliates and (iii) net proceeds available to New GCT as of the Closing pursuant to any debt financing. If the aggregate of such amounts is equal to or greater than $40 million, then 1,920,375 shares of New GCT Common Stock to be held by the Sponsor and CA2 at the Closing will be Sponsor Earnout Shares. Any portion of the 1,920,375 shares of New GCT Common Stock to be held by the Sponsor and CA2 at the Closing that are not Sponsor Earnout Shares (the “Sponsor Unretained Earnout Shares”) will be allocated by GCT as described below.
The Sponsor and CA2 further agreed that (i) 1,399,107 shares of New GCT Common Stock to be held by them at the Closing, (ii) any Sponsor Unretained Earnout Shares and (iii) up to an aggregate of 2,820,000 Private Warrants to be held by them at Closing (the “Incentive Warrants”), will be allocated by GCT to GCT’s existing stockholders and investors in the Financings, and transferred to such stockholders and investors at the Closing (without any vesting conditions). The number of Incentive Warrants is determined based on the aggregate amount of proceeds raised on or prior to the Closing pursuant to any (i) PIPE Financing in excess of $25,000,000 and (ii) Note Financing, in each case, that is provided by existing stockholders of GCT or investors introduced by existing stockholders of GCT or by GCT or its affiliates. If the aggregate of such amounts is equal to or greater than $25 million, then 2,820,000 Private Placement Warrants to be held by Sponsor and CA2 at Closing will be deemed Incentive Warrants.
The Sponsor and CA2 also agreed (i) to forfeit up to an additional 2,820,000 Private Placement Warrants held by them, to the extent not allocated prior to the Closing to prospective investors in the Financings or to holders of shares of Concord III’s Class A common stock who agree not to redeem their shares in connection with any extension of Concord III’s deadline to consummate an initial business combination, and (ii) to forgive all amounts outstanding under the loans in the aggregate amount of $6.9 million made by them to Concord III in connection with the IPO.
For more information about the Sponsor Support Agreement, see the section entitled “Certain Agreements Related to the Business Combination — Sponsor Support Agreement.”
Registration Rights Agreement
The Business Combination Agreement provides that, in connection with the Closing, New GCT, certain stockholders of GCT, the Sponsor and certain stockholders of Concord III will enter into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which New GCT will agree to register for resale certain shares of New GCT Common Stock and other equity securities that are held by the parties thereto from time to time.
For more information about the Registration Rights Agreement, see the section entitled “Certain Agreements Related to the Business Combination — Registration Rights Agreement/”
Lock-Up Agreement
The Business Combination Agreement provides that, in connection with the Closing, New GCT and certain stockholders of GCT, including its directors, officers, affiliates and holders of more than 5% of outstanding shares of GCT Common Stock as of the Closing, will enter into a lock-up agreement (the “Lock-Up Agreement”), pursuant to which such stockholders will agree to not effect any sale or other transfer of New GCT Common Stock, subject to certain customary exceptions set forth in the Lock-Up Agreement, during the period commencing at the Closing and ending on the earlier of (i) one year following the Closing, (ii) such date as New GCT completes a liquidation, merger, share exchange, reorganization or
 
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other similar transaction that results in all of New GCT’s stockholders having the right to exchange their shares of New GCT Common Stock for cash, securities or other property or (iii) the date on which the last sale price of New GCT Common Stock equals or exceeds $12.00 per share (as adjusted for share splits, share consolidations, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing.
For more information about the Registration Rights Agreement, see the section entitled “Certain Agreements Related to the Business Combination — Lock-up Agreement/”
Reasons for the Approval of the Business Combination
After careful consideration, Concord III’s board of directors recommends that Concord III stockholders vote “FOR” each Concord III Proposal being submitted to a vote of the Concord III stockholders at the Concord III special meeting of stockholders.
For a description of Concord III’s reasons for the approval of the Business Combination and the recommendation of Concord III’s board of directors, see the section entitled “The Business Combination — Concord III’s Board of Directors’ Reasons for the Approval of the Business Combination.”
Redemption Rights
Under Concord III’s amended and restated certificate of incorporation, holders of Public Shares may demand that Concord III convert such shares into cash at the applicable conversion price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to Concord III to pay its franchise and income tax obligations, by (b) the total number of shares of Concord III Common Stock included as part of the Concord III Units issued in the IPO. For illustrative purposes, based on funds in the Trust Account of approximately $42.4 million as of December 31, 2023, the estimated per share conversion price would have been approximately $10.76.
If a holder exercises its redemption rights and the Business Combination is consummated, then Concord III will convert such holder’s Public Shares into a pro rata portion of funds deposited in the Trust Account and such holder will no longer own these shares following the Business Combination. Such a holder will be entitled to receive cash for its Public Shares only if it properly demands conversion and delivers its shares (either physically or electronically) to Concord III’s transfer agent in accordance with the procedures described herein. See the section entitled “The Special Meeting of Concord III Stockholders — Redemption Rights” for the procedures to be followed if you wish to convert your Public Shares into cash.
Ownership of New GCT After the Closing
It is anticipated that, upon the Closing of the Business Combination, the GCT Stockholders will own approximately 68.7% of the outstanding New GCT Common Stock, the Public Stockholders will retain an ownership interest of approximately 7.9% in New GCT and Concord III’s initial stockholders will retain an ownership interest of approximately 10.9% in New GCT, assuming no redemptions by the Public Stockholders.
The following summarizes the pro forma ownership of New GCT Common Stock following the Business Combination under each of the no redemption, 50% and maximum redemption scenarios:
Holders
No
Redemption
Scenario(1)
% of
Total
50%
Redemption
Scenario(2)
% of
Total
Maximum
Redemption
Scenario(3)
% of
Total
Public Stockholders
3,941,361 7.9% 1,970,681 4.2%
Concord III Initial Stockholders(4)
5,444,267 10.9% 4,536,855 9.6% 3,523,892 8.0%
GCT Equityholders(5)
34,378,722 68.7% 34,378,722 72.9% 34,378,722 77.8%
PIPE Investors
4,484,854 9.0% 4,484,854 9.5% 4,484,854 10.2%
 
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Holders
No
Redemption
Scenario(1)
% of
Total
50%
Redemption
Scenario(2)
% of
Total
Maximum
Redemption
Scenario(3)
% of
Total
NRA Investors
1,781,626 3.6% 1,781,626 3.8% 1,781,626 4.0%
Total Shares Outstanding, Excluding Additional Dilution Sources(6)
50,030,830 100% 47,152,738 100% 44,169,094 100%
Total Equity Value Post-Redemptions(7)
$ 500,308,300 $ 471,527,380 $ 441,690,940
Additional Dilution Sources
No
Redemption
Scenario(1)
% of
Total(8a)
Per
Share
Value(8b)
50%
Redemption
Scenario(2)
% of
Total(8a)
Per
Share
Value(8b)
Maximum
Redemption
Scenario(3)
% of
Total(8a)
Per
Share
Value(8b)
Earnout Shares(9)
20,000,000 28.6% $ 7.14 20,000,000 29.8% $ 7.02 20,000,000 31.2% $ 6.88
Public Warrants(10)
17,250,000 25.6% $ 10.38 17,250,000 26.8% $ 10.40 17,250,000 28.1% $ 10.42
Private Warrants(11)
6,580,000 11.6% $ 10.17 6,580,000 12.2% $ 10.18 6,580,000 13.0% $ 10.19
Equity Incentive Plan(12)
4,403,083 8.1% $ 9.19 4,115,274 8.0% $ 9.20 3,816,909 8.0% $ 9.20
Employee Stock Purchase Plan(13)
600,000 1.2% $ 9.88 600,000 1.3% $ 9.87 600,000 1.3% $ 9.87
Total Additional Dilution Sources(14)
48,833,083 49.4% $ 7.83 48,545,274 50.7% $ 7.79 48,246,909 52.2% $ 7.74
Note: Percentages may not sum due to rounding.
(1)
This scenario assumes that no shares of Concord III Class A Common Stock are redeemed by the Public Stockholders.
(2)
This scenario assumes that 1,970,681 shares of Concord III Class A Common Stock are redeemed by the Public Stockholders.
(3)
This scenario assumes that 3,941,361 shares of Concord III Class A Common Stock are redeemed by the Public Stockholders.
(4)
Interests shown give effect to (i) the transfer by the Sponsors to NRA Investors of 999,665 Founder Shares immediately following consummation of the Business Combination pursuant to certain non- redemption agreements entered into by the Sponsor, (ii) the forfeiture by the Sponsors of an aggregate of 781,961 Founder Shares immediately following consummation of the Business Combination pursuant to certain non-redemption agreements entered into by the Sponsor and(iii) the transfer by the Sponsors of an aggregate of 1,399,107 shares of New GCT Common Stock to GCT’s existing stockholders and investors in the Financings at the Closing. Interests shown include 1,920,375, 1,012,963 and zero Founder Shares currently beneficially owned by the Sponsors which will become Sponsor Earnout Shares at the Closing under the no redemption, 50% redemption and maximum redemption scenarios, respectively.
(5)
Amount includes the conversion of the outstanding GCT common shares, GCT convertible promissory notes and CVT convertible promissory notes under the three redemption scenarios. Amount excludes the issuance of exchanged GCT Stock Options of 612,572 shares, GCT Warrants of 299,999 shares, and Earnout Shares of 20,000,000 under the three redemption scenarios. The GCT Stock Options and GCT Warrants will be converted into equivalent New GCT options and warrants with the same terms and conditions. The Earnout Shares will vest based on achieving the GCT Earnout Targets (as defined herein), which is based on the dollar VWAP of New GCT Common Stock or upon the equivalent per share consideration received as part of a Change in Control transaction.
(6)
The share amounts held by the Public Stockholders and the initial stockholders set forth in the first table above are based on 12,566,361 shares of Concord III Common Stock, of which 12,566,360 were shares of Concord III Class A Common Stock and one was a share of Concord III Class B Common Stock, issued and outstanding as of December 21, 2023. The share amounts and ownership percentages set forth in the first table above do not take into account the additional sources of dilution set forth in the second table above. Stockholders will experience additional dilution to the extent New GCT issues any such additional shares after the Closing.
(7)
This assumes that the total shares outstanding have a value of $10.00 per share.
 
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(8a)
The Percentage of Total with respect to each additional dilution source set forth below, including the Total Additional Dilution Sources, includes the full amount of shares issuable with respect to the applicable additional dilution source in both the numerator and denominator.
(8b)
Calculation of value per share assumes the issuance of the maximum amount of shares of New GCT Common Stock in connection with the additional dilution sources, as described in Notes 9 through 14 below. In addition, calculation of value per share in the rows entitled “Public Warrants” and “Private Warrants” are based on the applicable Total Equity Value Post-Redemptions in the No Redemption Scenario, the 50% Redemption Scenario and the Maximum Redemption Scenario plus the full exercise of the applicable maximum number of Concord III Warrants at $11.50 per share for a total cash exercise price of approximately $198.4 million in the row entitled “Public Warrants,” or approximately $75.7 million in the row entitled “Private Warrants,” respectively.Calculation of value per share in the row entitled “Total Additional Dilution Sources” is based on the applicable Total Equity Value Post-Redemptions in the No Redemption Scenario, the 50% Redemption Scenario and the Maximum Redemption Scenario plus the full exercise of the applicable maximum number of Concord III Warrants at $11.50 per share in the rows entitled “Public Warrants” and “Private Warrants.”
(9)
This row assumes that all 20,000,000 Earnout Shares potentially issuable to GCT equityholders (upon the realization of all of the benchmark share prices in the earnout) are issued to GCT equityholders and assumes that no additional shares of New GCT Common Stock are issued between the Closing and the realization of all of the benchmark share prices in the earnout.
(10)
This row assumes exercise of all Public Warrants outstanding as of September 30, 2023, to purchase 17,250,000 shares of Concord III Class A Common Stock.
(11)
This row gives effect to the forfeiture of an aggregate of 2,820,000 Private Warrants by the Sponsors as of the Closing.
(12)
This row assumes the issuance of all shares of New GCT Common Stock reserved for issuance under the 2024 Incentive Award Plan following the consummation of the Business Combination.
(13)
This row assumes the issuance of all shares of New GCT Common Stock reserved for issuance under the 2024 Employee Stock Purchase Plan following the consummation of the Business Combination.
(14)
This row assumes the issuance of all shares of New GCT Common Stock in connection with each of the additional dilution sources, as described further in Notes 9 through 13 above, which equals 48,833,083 shares of New GCT Common Stock in the no redemption scenario, 48,545,274 shares of New GCT Common Stock in the 50% redemption scenario, or 48,246,909 shares of New GCT Common Stockin the maximum redemption scenario, in each case, following the consummation of the Business Combination.
The numbers of shares and percentage interests set forth in the tables above are based on a number of assumptions described in the footnotes to the tables and that neither Concord III nor GCT issues any additional equity securities prior to the Business Combination, including in the potential Financings.If the actual facts differ from our assumptions, the numbers of shares and percentage interests set forth above will be different.
Please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
Recommendation of the Concord III Board of Directors
The Concord III board of directors has unanimously determined that the Business Combination, on the terms and conditions set forth in the Business Combination Agreement, is advisable and in the best interests of Concord III and its stockholders and has directed that the proposals set forth in this proxy statement/prospectus be submitted to its stockholders for approval at the special meeting on the date and at the time and place set forth in this proxy statement/prospectus. The Concord III board of directors unanimously recommends that Concord III’s stockholders vote “FOR” the Business Combination Proposal, “FOR” the Charter Amendment Proposal, “FOR” each of the Governance Proposals, “FOR” the Election of Directors Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal “FOR” the NYSE Proposal and “FOR” the Adjournment Proposal, if presented. See “The
 
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Business Combination — Recommendation of the Concord III Board of Directors” and “The Business Combination — Concord III’s Board of Directors’ Reasons for the Approval of the Business Combination.”
Concord III’s Special Meeting of Stockholders
See “Questions and Answers About the Special Meeting of Concord III’s Stockholders and the Related Proposals” above and “The Special Meeting of Concord III Stockholders” below for information regarding the special meeting.
The Sponsor and Concord III’s Directors and Officers Have Financial Interests in the Business Combination
In considering the recommendation of Concord III’s board of directors to vote in favor of the Business Combination, stockholders should be aware that, aside from their interests as stockholders, the Sponsor and our directors and officers have interests in the Business Combination that are different from, or in addition to, those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include:

the beneficial ownership of the Sponsor, which is governed by a board of managers consisting of three managers, Bob Diamond, David Schamis and Jeff Tuder, of an aggregate of 16,218,333 shares of Concord III Common Stock, consisting of:

7,957,727 Founder Shares purchased by the Sponsor for an aggregate price of $25,000;

8,260,606 shares of Concord III Class A Common Stock underlying Private Warrants purchased by the Sponsor at $1.00 per warrant for an aggregate purchase price of approximately $8.26 million.
All of the above Founder Shares and warrants would become worthless if Concord III does not complete a business combination within the applicable time period, as the Sponsor has waived any right to redemption with respect to these shares. Such shares and warrants have an aggregate market value of approximately $84.3 million and $700,000, respectively, based on the closing price of Concord III Class A Common Stock of $10.59 and the closing price of Concord III Warrants of $0.0839 on the NYSE on January 26, 2024;

the beneficial ownership of Concord III’s independent directors, Peter Ort, Thomas King and Larry Leibowitz, who each hold 30,000 Founder Shares with a total market value of approximately $318,000 based on the closing price of Concord III Class A Common Stock of $10.59 on the NYSE on January 26, 2024. The Founder Shares would become worthless if Concord III does not complete a business combination within the applicable time period, as the independent directors have waived any right to redemption with respect to these shares;

the fact that given the differential in the purchase price that the Sponsors paid for the Founder Shares as compared to the price of Concord III Units sold in the IPO and the substantial number of shares of Concord III Class A Common Stock held by the initial stockholders, they and their affiliates may earn a positive rate of return on their investment, even if Public Stockholders experience a negative rate of return following the completion of the Business Combination, including if the share price of New GCT Common Stock after the Closing falls as low as $1.09 per share, as the market value of the 8,625,000 Founder Shares would be approximately equal to the initial stockholders’ initial investment in Concord III;

the economic interests in the Sponsor held directly or indirectly by certain of Concord III’s officers and directors, including Bob Diamond and Jeff Tuder, which gives them an indirect pecuniary interest in the securities of Concord III, including the Founder Shares and Private Warrants held by the Sponsor and which interest will become worthless if Concord III does not consummate an initial business combination within the applicable time period;

As of September 30, 2023, there was no balance outstanding in Working Capital Loans extended by the Sponsor to Concord III pursuant to the Sponsor Promissory Note. Other than repayment of
 
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Working Capital Loans in connection with the consummation of the Business Combination, there are presently no fees that will be paid and no out-of-pocket expenses that would be reimbursed to the Sponsor upon consummation of the Business Combination;

the continued right of the Sponsor to hold Concord III Class A Common Stock and the shares of Concord III Class A Common Stock to be issued to the Sponsor upon exercise of its Private Warrants following the Business Combination, subject to certain lock-up periods and forfeiture pursuant to the Sponsor Support Agreement;

the fact that the Sponsor and Concord III’s executive officers and directors, for no compensation, have agreed not to redeem any shares of Concord III held by them in connection with a stockholder vote to approve the Business Combination and to vote any shares of Concord III Common Stock held by them in favor of the Business Combination Proposal;

the fact that if the Trust Account is liquidated, including in the event Concord III is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Concord III to ensure that the proceeds in the Trust Account are not reduced below $10.20 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Concord III has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Concord III, but only if such a vendor or target business has not executed a waiver (other than Concord III’s independent public accountants) of any and all rights to amounts held in the Trust Account;

the fact that Jeff Tuder, the current Chief Executive Officer and a director of Concord III, is expected to become a director of New GCT after the consummation of the Business Combination. As such, in the future he will receive any cash fees, stock options, stock awards or other remuneration that the New GCT board of directors determines to pay to him for his services as a director;

Concord III’s existing certificate of incorporation provides that the doctrine of corporate opportunity will not apply with respect to Concord III or any of its officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have. Concord III does not believe that the pre-existing fiduciary duties or contractual obligations of its officers and directors materially impacted its search for an acquisition target. In the course of their other business activities, Concord III’s officers and directors may become aware of other investment and business opportunities which may be appropriate for presentation to Concord III as well as the other entities with which they are affiliated. Concord III’s management has pre-existing fiduciary duties and contractual obligations and if there is a conflict of interest in determining to which entity a particular business opportunity should be presented, any entity with whom Concord III’s management has a pre-existing fiduciary obligation will be presented the opportunity before Concord III is presented with it. Concord III does not believe, however, that the fiduciary duties or contractual obligations of Concord III’s officers or directors or waiver of corporate opportunity materially affected Concord III’s search for a business combination. Concord III is not aware of any such corporate opportunity not being offered to Concord III and does not believe the renouncement of Concord III’s interest in any such corporate opportunities impacted Concord III’s search for an acquisition target; and

the continued indemnification of current directors and officers of Concord III and the continuation of directors’ and officers’ liability insurance after the Business Combination.
The existence of financial and personal interests of the Sponsor, board of directors and executive officers of Concord III may mean that they may be incentivized to recommend, approve and/or complete the Business Combination, or an alternative business combination, with a less favorable target company or on terms less favorable to Public Stockholders and holders of Public Warrants than they would otherwise recommend, approve or complete, as the case may be, rather than allow Concord III to wind up having failed to consummate a business combination and lose their entire investment. Further, because of these interests, the Sponsor, board of directors and executive officers of Concord III could benefit from the completion of a business combination that is not favorable to Public Stockholders and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to Public Stockholders rather than liquidate.
 
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Certain Other Interests in the Business Combination
In addition to the interests of Concord III’s board of directors and executive officers in the Business Combination, TD Cowen and certain of its affiliates have financial interests that are different from, or in addition to, the interests of Concord III stockholders.
TD Cowen was an underwriter in the IPO, and upon consummation of the Business Combination, TD Cowen will be entitled to $4,660,950 of deferred underwriting commissions. Such deferred commissions relate solely to TD Cowen’s services in connection with the IPO, rather than any services provided in connection with the Business Combination, and were fully earned upon completion of the IPO. TD Cowen agreed to waive its rights to the deferred underwriting commissions held in the Trust Account in the event Concord III does not complete an initial business combination within the time period set forth in the second amended and restated certificate of incorporation. Accordingly, if the Business Combination, or any other initial business combination, is not consummated by that time and Concord III is therefore required to be liquidated, TD Cowen will not receive any of the deferred underwriting commissions and such funds will be returned to the Public Stockholders upon its liquidation. TD Cowen has provided certain advisory services to Concord III in connection with the Business Combination, and TD Cowen and certain related parties are entitled to indemnification against liabilities from Concord III in connection with its rendering of such advisory services. TD Cowen is not entitled to receive any additional fees for providing those advisory services.
CA2, an affiliate of TD Cowen, currently holds 577,273 Founder Shares and 1,139,394 Private Warrants, which were purchased in connection with the IPO. There are no redemption rights or liquidating distributions from the Trust Account with respect such Founder Shares, or Private Warrants, which will expire worthless if Concord III does not consummate an initial business combination by August 8, 2024. If the Business Combination is consummated, CA2 may earn a positive rate of return on its investment in Concord III. In addition, CA2 issued a Sponsor Loan to Concord III in the principal amount of $836,364. Such Sponsor Loan may be repaid or converted into Sponsor Loan Warrants at a conversion price of $1.00 per warrant, at CA2's discretion. Pursuant to the Sponsor Support Agreement, CA2 agreed to forgive all amounts outstanding under such Sponsor Loan at the Closing. Therefore, no Sponsor Loan Warrants will be issued in connection with the Closing.
Summary Risk Factors
You should consider all the information contained in this proxy statement/prospectus in deciding how to vote for the proposals presented in this proxy statement/prospectus. In particular, you should consider the risk factors described under “Risk Factors” beginning on page 17.
Such risks include, but are not limited to:
Risks related to GCT’s business, including that:

If the 5G market does not develop or develops more slowly than expected, or if GCT fails to accurately predict market requirements or market demand for 5G solutions, GCT’s financial performance will be adversely affected.

GCT’s products target primarily certain segments in the 5G markets, including fixed wireless access, mobile broadband, and machine-to-machine (M2M) applications, and if these markets do not develop or grow as anticipated, GCT’s financial performance will be adversely affected.

GCT depends on the commercial deployment of 4G LTE and 5G communications equipment, products and services to grow GCT’s business, and GCT’s business may be harmed if wireless carriers delay in the adoption of 5G standards, or if they deploy technologies that are not supported by GCT’s solutions.

GCT relies on a small number of customers for a significant percentage of its revenue, and the loss of, or a reduction in, orders from these customers could result in a substantial decline in its revenue.
Risks related to GCT’s industry and regulatory environment, including that:

The semiconductor and communications industries are cyclical and have historically experienced significant fluctuations with prolonged downturns, which could impact GCT’s operating results, financial condition and cash flows.
 
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The wireless and consumer electronics industry is characterized by short product cycles, significant fluctuations in supply and demand, and rapidly changing technologies, and GCT may not be able to meet these challenges successfully or consistently.

The large amount of capital required to obtain radio frequency licenses, deploy and expand wireless networks and obtain new subscribers could slow the growth of the wireless communications industry and adversely affect GCT’s business.

GCT’s business depends on international customers, suppliers and operations in Asia, which subjects it to additional risks, including increased complexity and costs of managing international operations and geopolitical instability.
Risks related to GCT’s intellectual property rights, including that:

GCT’s failure to protect its intellectual property rights adequately could impair its ability to compete effectively or to defend itself from litigation.

The enforcement and protection of GCT’s intellectual property may be expensive, could fail to prevent misappropriation or unauthorized use of its intellectual property, could result in the loss of its ability to enforce one or more patents, and could be adversely affected by changes in patent laws, by laws in certain foreign jurisdictions that may not effectively protect GCT’s intellectual property and by ineffective enforcement of laws in such jurisdictions.

GCT may not be able to obtain additional patents and the legal protection afforded by any additional patents may not adequately cover the full scope of its business or permit it to gain or keep competitive advantage.
Risks related to ownership of GCT’s common stock and GCT’s corporate structure, including that:

The market price of GCT’s common stock may be volatile, which could cause the value of your investment to decline.

Delaware law and GCT’s amended and restated certificate of incorporation and bylaws contain provisions that could delay or discourage takeover attempts that stockholders may consider favorable.

Dr. Kyeongho Lee, Chairman of the Board and founder of GCT, owns a significant portion of its outstanding voting stock and exerts significant influence over its business and affairs.
General Risks related to GCT, including that:

The loss of any of GCT’s key personnel could seriously harm GCT’s business, and GCT’s failure to attract or retain specialized technical, management or sales and marketing talent could impair GCT’s ability to grow GCT’s business.

Being a public company will increase GCT’s expenses and administrative workload and will expose it to risks relating to evaluation of its internal controls over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002.

Adverse outcomes in tax disputes could subject GCT to tax assessments and potential penalties.

GCT’s business and operations could suffer in the event of security breaches.

In preparing its financial statements GCT makes certain assumptions, judgments and estimates that affect amounts reported in its consolidated financial statements, which, if not accurate, may significantly impact its financial results.
Risks related to Concord III and the Business Combination, including that:

Concord III’s Sponsor, executive officers and directors have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement/prospectus;

Concord III stockholders will have a reduced ownership and voting interest after the Business Combination and will exercise less influence over management;
 
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There can be no assurance that New GCT’s common stock will be approved for listing on the NYSE or that New GCT will be able to comply with the continued listing standards of the NYSE;

Subsequent to the consummation of the Business Combination, New GCT may be required to take write-downs or write-offs, or New GCT may be subject to restructuring, impairment or other charges that could have a significant negative effect on New GCT’s financial condition, results of operations and the price of New GCT’s securities, which could cause you to lose some or all of your investment;

Concord III’s board of directors did not obtain a third-party valuation or fairness opinion in determining whether to proceed with the Business Combination and, as a result, the terms may not be fair from a financial point of view to the Public Stockholders;

Concord III’s stockholders may be held liable for claims by third parties against Concord III to the extent of distributions received by them upon redemption of their shares;

We have identified material weaknesses in our internal control over financial reporting as of September 30, 2023.
Risks related to ownership of the New GCT Common Stock following the Business Combination, including that:

New GCT may experience significant fluctuations in our results of operations, including as a result of seasonality, making it difficult to project future results;

Future sales of common stock after the consummation of the Business Combination may cause the market price of New GCT’s common stock to drop significantly, even if New GCT’s business is doing well;

New GCT’s audited financial position and results of operations may differ materially from the unaudited pro forma financial information presented to investors;

New GCT may be subject to securities or class action litigation, which is expensive and could divert management attention;
Other general risk factors, including that:

While GCT and Concord III work to complete the Business Combination, GCT management’s focus and resources may be diverted from operational matters and other strategic opportunities.
Expected Accounting Treatment for the Proposed Transactions
The Business Combination is expected to be accounted for as a reverse recapitalization in accordance with U.S. GAAP because GCT has been determined to be the accounting acquirer under all redemption scenarios presented. Under this method of accounting, Concord III, which is the legal acquirer, will be treated as the accounting acquiree for financial reporting purposes and GCT, which is the legal acquiree, will be treated as the accounting acquirer. Accordingly, the consolidated assets, liabilities and results of operations of GCT will become the historical financial statements of New GCT, and Concord III’s assets, liabilities and results of operations will be consolidated with GCT’s beginning on the Closing Date. For accounting purposes, the financial statements of New GCT will represent a continuation of the financial statements of GCT with the Merger being treated as the equivalent of GCT issuing stock for the net assets of Concord III, accompanied by a recapitalization. The net assets of Concord III will be stated at historical costs and no goodwill or other intangible assets will be recorded. Operations prior to the Business Combination will be presented as those of GCT in future reports of New GCT.
 
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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Capitalized terms under this section not otherwise defined in this proxy statement/prospectus have the respective meanings ascribed to them in the Business Combination Agreement.
The following selected unaudited pro forma condensed combined financial data (the “selected pro forma information”) gives effect to the Business Combination and other events contemplated by the Business Combination Agreement as described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” included in this proxy statement/prospectus. On November 2, 2023, Concord III and GCT executed the Business Combination Agreement. Pursuant to the terms of the Business Combination Agreement, Concord III will acquire GCT through the statutory merger of Merger Sub with and into GCT, with GCT surviving the merger as a wholly owned subsidiary of Concord III. The estimated aggregate transaction consideration of 31,148,558 shares will be calculated as the Company Value of approximately $311.5 million divided by $10.00 per share. The Company Value is computed as $350.0 million plus the Company Closing Cash and Company Aggregate In-the-Money Warrant Exercise Price less the Company Closing Indebtedness. At the effective time of the Business Combination, each share of GCT Common Stock will be automatically converted into the right to receive the number of shares of New GCT Common Stock equal to the Per Share Exchange Ratio, calculated in accordance with the terms of the Business Combination Agreement. As of November 2, 2023, GCT currently estimates the Per Share Exchange Ratio to be approximately 0.1836.
The Business Combination is expected to be accounted for as a reverse recapitalization in accordance with GAAP, as GCT has been determined to be the accounting acquirer under all redemption scenarios presented. The unaudited pro forma condensed combined balance sheet as of September 30, 2023 combines the historical unaudited condensed consolidated balance sheet of GCT with the historical unaudited condensed balance sheet of Concord III on a pro forma basis as if the Business Combination and the other events contemplated by the Business Combination Agreement, summarized elsewhere in this proxy statement/prospectus, had been consummated on September 30, 2023. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2023 combines the historical unaudited condensed consolidated statement of operations of GCT for the nine months ended September 30, 2023 and the historical unaudited condensed statement of operations of Concord III for the nine months ended September 30, 2023, giving effect to the Business Combination as if the Business Combination and other events contemplated by the Business Combination Agreement had been consummated on January 1, 2022. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022 combines the historical audited statement of operations of Concord III for the year ended December 31, 2022, with the historical audited consolidated statement of operations of GCT for the year ended December 31, 2022, giving effect to the Business Combination as if the Business Combination and other events contemplated by the Business Combination Agreement had been consummated on January 1, 2022.
The selected pro forma information has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information of New GCT appearing elsewhere in this proxy statement/prospectus and the accompanying notes, in the section titled “Unaudited Pro Forma Condensed Combined Financial Information.” The unaudited pro forma condensed combined financial information is derived from, and should be read in conjunction with, the historical financial statements of Concord III and GCT and related notes included elsewhere in this proxy statement/prospectus. The selected pro forma information has been presented for informational purposes only and is not necessarily indicative of what New GCT’s financial position or results of operations actually would have been had the Business Combination and the other transactions contemplated by the Business Combination Agreement been completed as of the dates indicated. In addition, the selected pro forma information does not purport to project the future financial position or operating results of New GCT. Concord III and GCT have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” The adjustments reflected in the selected pro forma
 
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information have been identified and presented to provide relevant information necessary for an accurate understanding of New GCT upon consummation of the Business Combination, the PIPE Investment, conversion of Note Financing upon Closing, the issuance of the Earnout Shares and Sponsor Earnout Shares upon achieving specified earnout targets, the allocation of Company Insider Incentive Shares and Company Insider Incentive Warrants, Sponsor Shares and Private Placement Warrant transactions.
During November 2023, Concord III Public Stockholders elected to redeem an additional 98,573 shares at $10.70 per share for total redemption proceeds of $1.1 million (the “November Partial Redemption”), after which 3,941,361 shares of Concord III Common Stock subject to redemption remained outstanding. Under the 50% Redemptions, 75% Redemptions, and Maximum Redemptions scenarios, the pro forma condensed combined financial information assumes a $10.67 per share redemption amount based on the September 30, 2023 Concord III redemption value per share. Each of the below scenarios includes the concurrent closing of the $29.9 million PIPE Investment and closing of the $18.3 million Note Financing that will convert into Concord III Class A Common Stock to Company Insider Investors and either the transfer or forfeiture of 5,191,108 Sponsor Shares, resulting in 3,433,892 shares held by the Sponsor. The selected pro forma information is presented after giving effect to the Business Combination and other events contemplated by the Business Combination Agreement presented under the following four scenarios:

No Redemptions:   This scenario includes the November Partial Redemptions and assumes that no other Concord III Public Stockholders exercise their redemption rights with respect to the outstanding Concord III Class A Common Stock subject to possible redemption and that 3,941,361 shares of Concord III Class A Common Stock subject to possible redemption remain outstanding after the completion of the Business Combination (adjusting for the number of remaining shares) to the 50% Redemptions, 75% Redemptions, and Maximum Redemptions scenarios below.

50% Redemptions:   This scenario includes the November Partial Redemptions and assumes that holders of an additional 1,970,681 shares, or 50% of the remaining shares outstanding held by Concord III Public Stockholders, will exercise their redemption rights for aggregate redemption proceeds of $21.0 million.

75% Redemptions:   This scenario includes the November Partial Redemptions and assumes that holders of an additional 2,956,021 shares, or 75% of the remaining shares outstanding held by Concord III Public Stockholders, will exercise their redemption rights for aggregate redemption proceeds of $31.5 million.

Maximum Redemptions:   This scenario includes the November Partial Redemptions and assumes that Concord III Public Stockholders holding the remaining 3,941,361 shares of Concord III Class A Common Stock subject to possible redemption will exercise their redemption rights for aggregate redemption proceeds of $42.1 million. The Maximum Redemptions scenario is based on the maximum number of redemptions that may occur.
The following summarizes the pro forma shares of New GCT Common Stock issued and outstanding immediately after the Business Combination under the four scenarios:
 
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Pro Forma Combined
No
Redemptions
50%
Redemptions
75%
Redemptions
Maximum
Redemptions
Shares
%
Shares
%
Shares
%
Shares
%
Concord III Public stockholders – Class A Common Stock(1)
3,941,361 8.2% 1,970,681 4.3% 985,341 2.2% 0.0%
Concord III Class B Common Stock(2)
6,704,625 14.0% 6,704,625 14.5% 6,704,625 14.9% 6,704,625 15.2%
Former GCT stockholders(3)
32,979,615 68.5% 32,979,615 71.5% 32,979,615 73.0% 32,979,615 74.7%
PIPE investors
4,484,854 9.3% 4,484,854 9.7% 4,484,854 9.9% 4,484,854 10.1%
Pro forma total shares of the Post-Combination Company Common Stock outstanding at Closing(4)
48,110,455 100.0% 46,139,775 100.0% 45,154,435 100.0% 44,169,094 100.0%
(1)
Amount excludes 98,573 shares of Class A Common Stock redeemed as a result of the November Partial Redemptions under the four redemption scenarios. Amount excludes the outstanding Public Warrants of 17,250,000 under the four redemption scenarios.
(2)
In November 2023, Concord III and the Sponsor entered into non-redemption agreements with certain holders of Class A Common Stock in exchange for them agreeing not to redeem their shares of Class A Common Stock, and the Sponsor and the holders of Class B Common Stock converted an aggregate of 8,624,999 shares of Class B Common Stock to shares of A Common Stock in accordance with the Existing Certificate of Incorporation (the “Class B Conversion”). Following the Class B Conversion, there was one share of Class B Common Stock outstanding, which is held by the Sponsor. The above share information is presented based on the equity structure in place prior to the Class B Conversion effectiveness.
Amount includes 3,433,892 Sponsor shares vested at Closing, 90,000 shares transferred to the Concord III Board of Directors, 1,260,358 shares transferred by the Sponsor to Concord III investors and 521,268 shares to be issued to Concord III Public Stockholders as an incentive for Concord III extension under the non-redemption agreements (“NRA Shares”), and 1,399,107 Company Insider Incentive Shares to be transferred to Company Insider recipients upon the Closing. Amount excludes Sponsor shares forfeited of 0, 907,412, 1,412,165, and 1,916,913 under the No Redemptions scenario, 50% Redemptions scenario, 75% Redemptions scenario, and Maximum Redemptions scenario, respectively. The number of Sponsors Shares forfeited at Closing is calculated as the ratio of the SPAC Funding (after giving effect to the exercise of Redemption Rights and any proceeds received from the PIPE Financing and CVT Convertible Notes not provided by GCT Insiders) divided by $40.0 million. The Sponsor Earnout Ratio is then multiplied by 1,920,375 (maximum number of Sponsor Earnout Shares) to determine the outstanding Sponsor Earnout Shares at Closing that are subject to the Sponsor Earnout Targets. Amount excludes Sponsor Earnout Shares of 1,920,375, 1,012,963, 508,210, and 0, under the No Redemptions scenario, 50% Redemptions scenario, 75% Redemptions scenario, and Maximum Redemptions scenario, respectively. For the Sponsor Shares not forfeited at Closing, the Sponsor Earnout Shares will vest in one third increments based on achieving any of the three Sponsor Earnout Targets, which is solely based on the volume-weighted average price (“VWAP”) of New GCT Common Stock. Upon the Closing, all shares of Concord III Class B Common Stock will convert to shares of Concord III Class A Common Stock.
Amount excludes 3,760,000 Private Warrants to be held by the Sponsor and affiliates, Company Insider Incentive Warrants of 2,618,537 to be issued to Company Insider recipients, and 201,463 Private Warrants to be issued to Concord III Public Stockholders as an incentive for Concord III extension under the four redemption scenarios. The Sponsor will forfeit 2,820,000 Private Warrants at the Closing.
(3)
Amount includes the conversion of the outstanding GCT common shares and GCT convertible promissory notes based on the per share exchange ratio of 0.1836, in addition to 2,743,628 shares of New GCT Common Stock to be issued upon the conversion of CVT convertible promissory notes under
 
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the four redemption scenarios. Amount excludes the issuance of exchanged GCT Stock Options of 612,572 shares, GCT Warrants of 299,999 shares, and Earnout Shares of 20,000,000 under the four redemption scenarios. The GCT Stock Options and GCT Warrants will be converted into equivalent New GCT options and warrants with the same terms and conditions. The Earnout Shares will vest based on achieving the GCT Earnout Targets, which is based on the dollar VWAP of New GCT Common Stock or upon the equivalent per share consideration received as part of a Change in Control transaction.
(4)
The amounts included in the table do not include the potentially dilutive shares that could be issued for the following outstanding instruments: GCT Stock Options, Earnout Shares, GCT Warrants, Public Warrants, Sponsor Earnout Shares, Company Insider Incentive Warrants, Public Stockholder Incentive Warrants, and Sponsor Warrants. Further details are described in the Unaudited Pro Forma Condensed Combined Financial Information within Note 3.
If the outcomes are different from these assumptions, then the amounts and shares outstanding in the unaudited pro forma condensed combined financial information will be different, and those changes could be material.
The following summarizes the selected pro forma information under the scenarios presented:
Pro Forma Combined
No
Redemptions
50%
Redemptions
75%
Redemptions
Maximum
Redemptions
(in thousands, except shares and per share data)
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data – Nine Months Ended September 30, 2023
Net revenues
$ 11,839 $ 11,839 $ 11,839 $ 11,839
Operating expenses
18,917 18,917 18,917 18,917
Loss from operations
(14,038) (14,038) (14,038) (14,038)
Net loss
(14,041) (14,041) (14,041) (14,041)
Net loss per share – basic and diluted
$ (0.29) $ (0.30) $ (0.31) $ (0.32)
Weighted average shares – basic and diluted
48,110,455 46,139,775 45,154,435 44,169,094
Selected Unaudited Pro Forma Condensed Combined
Statement of Operations Data – Year Ended December 31,
2022
Net revenues
$ 16,669 $ 16,669 $ 16,669 $ 16,669
Operating expenses
35,909 35,909 35,909 35,909
Loss from operations
(30,856) (30,856) (30,856) (30,856)
Net loss
(17,144) (17,144) (17,144) (17,144)
Net loss per share – basic and diluted
$ (0.36) $ (0.37) $ (0.38) $ (0.39)
Weighted average shares – basic and diluted
48,110,455 46,139,775 45,154,435 44,169,094
Selected Unaudited Pro Forma Condensed Combined Balance
Sheet Data – As of September 30, 2023
Total current assets
$ 71,793 $ 50,766 $ 40,252 $ 29,739
Total assets
75,729 54,702 44,188 33,675
Total current liabilities
83,272 83,272 83,272 83,272
Total liabilities
94,790 94,790 94,790 94,790
Total stockholders’ deficit
(19,061) (40,088) (50,602) (61,115)
 
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS AND RISK FACTOR SUMMARY
Certain statements in this proxy statement/prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our, our management team’s, GCT’s and GCT’s management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

our ability to consummate the Business Combination;

the expected benefits of the Business Combination;

New GCT’s financial and business performance following the Business Combination, including GCT’s financial projections and business metrics;

changes in GCT’s strategy, future operations, financial position, estimated revenues and losses, forecasts, projected costs, prospects and plans;

unexpected increases in GCT’s expenses resulting from inflationary pressures and rising interest rates, including manufacturing and operating expenses and interest expenses;

GCT’s inability to anticipate the future market demands and future needs of its customers;

the impact of component shortages, suppliers’ lack of production capacity, natural disasters or pandemics on GCT’s sourcing operations and supply chain;

GCT’s future capital requirements and sources and uses of cash;

GCT’s ability to obtain funding for its operations;

anticipated financial performance, including gross margin, and the expectation that New GCT’s future results of operations will fluctuate on a quarterly basis for the foreseeable future;

expected capital expenditures, cost of revenue and other future expenses, and the sources of funds to satisfy the liquidity needs of New GCT;

the expected U.S. federal income tax impact of the Business Combination; and

the outcome of any known and unknown litigation and regulatory proceedings.
These forward-looking statements are based on information available as of the date of this proxy statement/prospectus, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
You should not place undue reliance on these forward-looking statements in deciding how to vote your proxy or instruct how your vote should be cast on the proposals set forth in this proxy statement/prospectus. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

the risk that the Business Combination may not be completed in a timely manner or at all, which may adversely affect the price of New GCT’s securities;

the risk that the Business Combination may not be completed by Concord III’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by Concord III;
 
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the failure to satisfy the conditions to the consummation of the Business Combination, including the adoption of the Business Combination Agreement by the stockholders of Concord III and GCT;

the lack of a third party valuation in determining whether to pursue the Business Combination;

the occurrence of any event, change or other circumstance that could give rise to the termination of the Business Combination Agreement;

the effect of the announcement or pendency of the Business Combination on GCT’s business relationships, performance, and business generally;

risks that the Business Combination disrupts GCT’s current plans and potential difficulties in GCT’s employee retention as a result of the Business Combination;

the outcome of any legal proceedings that may be instituted against GCT or against Concord III related to the Business Combination Agreement or the Business Combination;

the ability to maintain the listing of Concord III’s securities on the NYSE;

the price of Concord III’s securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which GCT plans to operate, variations in performance across competitors, changes in laws and regulations affecting GCT’s business and changes in the combined capital structure;

the ability to implement business plans, forecasts, and other expectations after the completion of the Business Combination, and identify and realize additional opportunities;

the risk of downturns and the possibility of rapid change in the highly competitive industry in which GCT operates;

the risk that GCT and its current and future collaborators are unable to successfully develop and commercialize GCT’s products or services, or experience significant delays in doing so;

the risk that GCT may never achieve or sustain profitability;

the risk that GCT will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all;

the risk that New GCT experiences difficulties in managing its growth and expanding operations;

the risk that third-party suppliers and manufacturers are not able to fully and timely meet their obligations;

the risk of product liability or regulatory lawsuits or proceedings relating to GCT’s products and services;

the risk that GCT is unable to secure or protect its intellectual property;

the risk that New GCT’s securities will not be approved for listing on the NYSE or if approved, maintain the listing; and

other risks and uncertainties described in this proxy statement/prospectus, including those under the section entitled “Risk Factors.”
 
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RISK FACTORS
You should carefully review and consider the following risk factors and the other information contained in this proxy statement/prospectus, including the financial statements and notes to the financial statements included herein, in evaluating the Business Combination and the proposals to be voted on at the special meeting. Certain of the following risk factors apply to the business and operations of GCT and will also apply to the business and operations of New GCT following the completion of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have a material adverse effect on the business, cash flows, financial condition and results of operations of New GCT following the Business Combination. While this “Risk Factors” section identifies all material risk factors currently known by Concord III and GCT applicable to an investment in New GCT, the risks discussed below may not prove to be exhaustive and are based on certain assumptions made by Concord III and GCT that later may prove to be incorrect or incomplete. Concord III and GCT may face additional risks and uncertainties that are not presently known to such entity, or that are currently deemed immaterial, which may also impair the business or financial condition of New GCT. Unless the context requires otherwise, references to “GCT” in this section are to the business and operations of GCT prior to the Business Combination and the business and operations of New GCT as directly or indirectly affected by GCT by virtue of New GCT’s ownership of the business of GCT through its ownership of the Surviving Corporation following the Business Combination.
Risks Related to GCT’s Business
If the 5G market does not develop or develops more slowly than expected, or if GCT fails to accurately predict market requirements or market demand for 5G solutions, GCT’s financial performance will be adversely affected.
GCT has invested substantial time and resources in developing products that support the 5G wireless communications markets, and it has 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. If GCT fails to accurately predict market requirements or market demand for 5G, or if GCT’s solutions are not successfully developed or adopted by GCT’s customers, then GCT’s ability to generate revenue will be harmed. In addition, if the 5G networks are deployed to a lesser extent or more slowly than GCT currently anticipates, or if other competing semiconductor solutions achieve greater market acceptance or operators do not migrate to 5G as expected, GCT may not realize the expected benefits from this investment, which will have an adverse effect on GCT’s business, financial condition and results of operations.
GCT’s products target primarily certain segments in the 5G markets, including fixed wireless access, mobile broadband, and machine-to-machine (M2M) applications, and if these markets do not develop or grow as anticipated, GCT’s financial performance will be adversely affected.
GCT’s products focus on certain segments of 5G 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, GCT’s business operations and financial conditions will be negatively impacted. For example, GCT’s 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 poor fixed line service, 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 GCT’s ability to sell products into such market. 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 slowing demand for these applications may reduce GCT’s ability to sell its products. Furthermore, the growth of M2M applications depends on various factors that drive demand, including
 
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decisions by businesses, institutions, and regulatory authorities to implement and permit establishment of infrastructures or systems that utilize M2M wireless communications. These and other factors could adversely affect GCT’s business operations and financial conditions.
GCT depends on the commercial deployment of 4G LTE and 5G communications equipment, products and services to grow GCT’s business, and GCT’s business may be harmed if wireless carriers delay in the adoption of 5G standards, or if they deploy technologies that are not supported by GCT’s solutions.
GCT 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 GCT expects, this will reduce the sales of its products and could cause OEMs and ODMs to hold excess inventory. This would harm GCT’s revenues and its 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 Things devices. If deployments of the Cat M or Cat NB standards are delayed or if competing standards for Internet of Things devices become favored by wireless carriers, GCT may not be able to successfully increase sales of its Cat M and Cat NB products, which would harm its revenues and financial results.
GCT may encounter difficulties or challenges in meeting its obligations under its 5G development agreements with major customers and wireless operators, which may adversely affect its ability to generate revenue.
GCT has 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, GCT has agreed to design, develop and collaborate with each respective customers to test, qualify and commercialize GCT’s chipsets and also to help these customers commercialize products that use GCT Chipsets, and these agreements impose various obligations on GCT to deliver results and meet certain product development milestones. In the event that GCT completes the performance of its obligations and is able to commercialize and sell its products, GCT may receive significant revenues and fees as a result of such agreements, including but are not limited to, milestone payments upon the achievement of specified business and development objectives as well as follow-on sales of GCT’s chipsets to ODM/OEM suppliers when products (using GCT’s chipset) related to these development agreements begins to ramp.
However, GCT may encounter difficulties and challenges in meeting its obligations under these development agreements, such as delays in testing and qualifying its products, technical issues in the development and manufacturing products, lack of resources and funding to support the development efforts, the rise of competitive technologies and products that cause the customers or partners to shift focus and attention elsewhere, and lack of cooperation by the customers or partners. Any of these factors may adversely affect GCT’s ability to monetize these agreements, which in turn will adversely affect its financial results and results of operations.
If GCT is unsuccessful in developing and selling new products or in penetrating new markets, GCT’s business and operating results would suffer.
The markets in which GCT and GCT’s customers compete or plan to compete are characterized by rapidly changing technologies and industry standards and technological obsolescence. GCT’s ability to compete successfully depends on GCT’s 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 GCT’s target markets, such as the 5G wireless communications markets, could harm GCT’s competitive position within these markets. GCT’s failure to anticipate these shifts, develop new technologies or react to changes in existing technologies could delay GCT’s development of new products, which could result in product obsolescence, decreased revenue and loss of design wins.
The development of new technologies and products generally requires substantial investment before they become commercially viable, and GCT has created a roadmap to build and increase GCT’s product offerings. Under this roadmap, GCT intends to continue making substantial investments to develop new technologies and products, and GCT’s development efforts may not be successful, and GCT’s new technologies
 
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and products may not produce meaningful revenue. For example, GCT currently invests significant resources to develop 5G semiconductor solutions. GCT may be required, on a case by case basis, to invest additional resources to develop multiple chip solutions in response to changing market demand. If the semiconductor solutions GCT develop fail to meet market or customer requirements or do not achieve market acceptance, GCT may not be able to execute GCT’s roadmap successfully. In addition, GCT’s products have long sales cycles that involve numerous steps, and during this time GCT may expend substantial financial resources and management time and effort without any assurance that product sales will result. GCT’s sales cycle typically begins when one of GCT’s products has been provided to GCT’s end customers for evaluation, and thereafter it can take 12 or more months to achieve successful commercialization. The anticipated long sales cycle for GCT’s products makes it difficult to predict the quarter in which sales may occur.
The success of GCT’s new products will depend on accurate forecasts of long-term market demand, customer and consumer requirements and future technological developments, as well as a variety of specific implementation factors, including:

accurate prediction of the size and growth of the 4G and 5G markets;

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

accurate prediction of changes in device manufacturer requirements, technology, industry standards or consumer expectations, demands and preferences;

timely and efficient completion of product design and transfer to manufacturing, assembly and test, and securing sufficient manufacturing capacity to allow GCT to continue to timely and efficiently deliver products to GCT’s customers;

market acceptance, adequate consumer demand and commercial production of the products in which GCT’s mobile and wireless broadband semiconductor solutions are incorporated;

the quality, performance and reliability of the product as compared to competing products and technologies;

effective marketing, sales and service; and

the ability to obtain licenses to use third-party technology to support the development of GCT’s products.
If GCT fails to introduce new products that meet the demands of GCT’s customers or GCT’s target markets, or if GCT fails to penetrate new markets, GCT’s revenue will likely decrease over time and GCT’s financial condition could suffer.
If customers do not design GCT’s semiconductor solutions into their product offerings or if GCT’s customers’ product offerings are not commercially successful, GCT would have difficulty selling GCT’s semiconductor solutions and GCT’s business would suffer.
GCT sells its semiconductor solutions both directly and indirectly through distributors to OEM/ODM customers. GCT’s OEM/ODM customers incorporate GCT’s semiconductor solutions in their products and include GCT’s semiconductor solutions in the products they supply to their customers. GCT’s semiconductor solutions are generally incorporated into GCT’s customers’ products at the design stage. As a result, GCT relies on OEM/ODM customers to design GCT’s semiconductor solutions into the products they sell. Without these design wins, GCT’s business would be materially and adversely affected. GCT often incurs significant expenditures on the development of a new semiconductor solution without any guarantees that an OEM/ODM customer will select GCT’s semiconductor solution for design into its own product. Once an OEM/ODM customer designs a competitor’s semiconductor into its product offering, it becomes significantly more difficult for GCT to sell its semiconductor solutions to that customer because changing suppliers involves significant cost, time, effort and risk for the customer. Furthermore, even if an OEM/ODM customer designs one of GCT’s semiconductor solutions into its product offering, GCT cannot be assured that its product will be commercially successful and that GCT will receive any revenue from that
 
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customer. If GCT’s customers’ products incorporating GCT’s semiconductor solutions fail to meet the demands of their customers or otherwise fail to achieve market acceptance, GCT’s revenue and business may suffer.
In addition, GCT employs a dual-pronged approach to the market that focuses on both operators and OEM/ODM customers in order to facilitate design wins of GCT’s products. Under this approach, GCT relies on key relationships with wireless operators to help create strong endorsement of GCT’s products to OEM/ODM customers. If GCT is not able to develop and maintain GCT’s relationships with wireless operators, GCT’s sales of products to OEM/ODM customers would likely be adversely affected. Further, if GCT is not able to provide wireless operators with access to leading OEMs/ODMs that can deliver GCT’s solutions in volume, or if these operators choose not to work with GCT’s OEM/ODM customers, it may make it more difficult for GCT to achieve design wins and cause a delay in the deployment of GCT’s products, which may have an adverse effect on GCT’s business, financial condition and results of operations.
If GCT is unable to compete effectively, GCT may not increase or maintain GCT’s revenue or market share.
Competition in the wireless semiconductor business continues to increase at a rapid pace as consumers, businesses and governments realize the market potential of wireless products and services. To remain competitive, companies must have highly trained engineering talent and make significant capital investments over long development cycles. GCT may not be able to compete successfully against current or potential competitors. If GCT does not compete successfully, GCT’s revenue and market share may decline. GCT faces or expects to face competition from established semiconductor companies such as Altair Semiconductor (a Sony Corporation subsidiary), ASR, HiSilicon Technologies (a Huawei subsidiary), Mediatek, Qualcomm Incorporated, Samsung Electronics Co. Ltd., Unisoc (includes Spreadtrum Communications and RDA) and Sequans Communications S.A.
Some of GCT’s competitors have longer operating histories and customer relationships, significant legacy products and technologies, greater resources and brand recognition, more industry influence and a larger customer base than GCT. This may allow them to respond more quickly than GCT to new or emerging technologies or changes in customer requirements and to provide backward compatibility in their products as required by some operators. In addition, these competitors may have greater credibility with GCT’s existing and potential customers. Moreover, GCT’s competitors may have been doing business with customers for a longer period of time and have established relationships, which may provide them with information regarding future trends and requirements that may not be available to GCT. In addition, some of GCT’s larger competitors may be able to provide greater incentives to customers through rebates, marketing funds and similar programs. Some of GCT’s competitors may also adopt aggressive or predatory pricing policies to offset what GCT believes are the performance and cost advantages of GCT’s solutions. GCT’s competitors with multiple product lines may bundle their products to offer a broader product portfolio or integrate wireless functionality into other products that GCT does not sell, which may make it difficult for GCT to gain or maintain market share.
GCT’s ability to compete will depend on a number of factors, including:

GCT’s ability to anticipate market and technology trends and successfully develop products that meet market needs;

GCT’s success in identifying and penetrating new markets, applications and customers;

GCT’s ability to accurately understand the price points and performance metrics of competing products in the marketplace;

GCT’s products’ performance and cost-effectiveness relative to that of competitors’ products;

GCT’s ability to develop and maintain relationships with wireless operators, base station suppliers and OEM/ODM customers;

GCT’s ability to expand international operations in a timely and cost-efficient manner;

GCT’s ability to secure sufficient manufacturing capacity and deliver products in large volume on a timely basis at competitive prices;
 
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GCT’s ability to participate in or influence the process for setting wireless industry standards;

GCT’s ability to conform to industry standards on a timely basis, while developing new and proprietary technologies to offer products and features previously not available in the 4G and 5G markets;

GCT’s ability to recruit design and application engineers with expertise in wireless broadband communications technologies and sales and marketing personnel; and

GCT’s ability to obtain third-party licenses for supporting technologies to develop new products.
GCT’s potential competitors may also establish cooperative relationships among themselves or with third parties, acquire companies that provide similar products to GCT’s, or consolidate with other competitors. As a result, new competitors or alliances between GCT’s competitors may emerge that could acquire significant market share. In addition, future development efforts by GCT’s competitors could render GCT’s products obsolete. Any of these factors, alone or in combination with others, could harm GCT’s business and result in a loss of market share, an increase in pricing pressure or inability to achieve and sustain profitability.
GCT may not be able to manage the growth of its business, including the hiring of a sufficient number of qualified personnel and enhancing its operational infrastructures.
GCT’s future operating results depend to a large extent on GCT’s ability to successfully manage any expansion and growth. To manage GCT’s growth successfully and handle the responsibilities of being a public company, GCT believes it must effectively, among other things:

recruit, hire, train and manage additional qualified engineers for GCT’s research and development activities, especially in the positions of design engineering, product and test engineering, and applications engineering;

add additional sales personnel and expand sales offices;

add additional finance and accounting personnel;

implement and improve GCT’s administrative, financial and operational systems, procedures and controls; and

enhance GCT’s information technology support for enterprise resource planning and design engineering by adapting and expanding GCT’s systems and tool capabilities, and properly training new hires as to their use.
GCT is increasing its investment in research and development, sales and marketing, general and administrative and other functions to grow GCT’s business. GCT is likely to incur the costs associated with these increased investments earlier than achieving some of the anticipated benefits, and the return on these investments, if any, may be lower than GCT expects, may develop more slowly than GCT expects or may not materialize. If GCT is unable to manage GCT’s growth effectively, GCT may not be able to take advantage of market opportunities or develop new products, and GCT may fail to satisfy customer requirements, maintain product quality, execute GCT’s business plan, or respond to competitive pressures.
GCT relies on a small number of customers for a significant percentage of its revenue, and the loss of, or a reduction in, orders from these customers could result in a substantial decline in its revenue.
GCT sells its products to OEM/ODM customers either directly or indirectly through distributors. GCT depends on a small number of customers for a large percentage of GCT’s annual revenue. Sales to GCT’s five largest OEM/ODM end customers (including direct sales and indirect sales through distributors) accounted for approximately 74% and 83% of GCT’s total revenue during the fiscal year ended December 31, 2022 and 2021, respectively, and 78% for the nine months ended September 30, 2023. Sales through GCT’s six largest distributors accounted for approximately 48% and 52% of GCT’s total revenue for the year ended December 31, 2022 and 2021, respectively, and 29% for the nine months ended September 30, 2023. GCT entered into distribution agreements with such distributors and each of these agreements is currently effective and will remain effective unless terminated early by either party by providing advance written notice to the other party.
 
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GCT expects that sales to a limited number of customers will continue to account for a significant percentage of GCT’s revenue for the foreseeable future. Additionally, consolidation among OEMs in some of GCT’s markets could result in an increased concentration in GCT’s sources of revenue. It is possible that any of GCT’s major customers could terminate its purchasing arrangements with GCT or significantly reduce or delay the amount of GCT’s products that it orders, purchase products from GCT’s competitors or develop its own products internally. The loss of, or a reduction in, orders from any major customer could cause a decline in revenue and adversely affect GCT’s business, financial condition and results of operations.
GCT may fail to forecast customer demand for GCT’s products accurately, which may result in product shortages, delays in product shipments or excess or insufficient product inventory.
All of GCT’s sales are made on a purchase order basis which permit GCT’s customers to cancel, change or delay product purchase commitments with little or no notice to GCT and without penalty. Because production lead times often exceed the amount of time required to fulfill orders, GCT often must manufacture in advance of orders, relying on a demand forecast to project volumes and product mix. GCT’s ability to accurately forecast demand can be adversely affected by a number of factors, including inaccurate forecasting by GCT’s customers, changes in market conditions, adverse changes in GCT’s product order mix and demand for GCT’s customers’ products. Even after an order is received, GCT’s customers may cancel or reduce these orders, or require GCT to reduce the prices of GCT’s product. In addition, a customer may delay an order for GCT’s products even after it has been placed. These cancellations, reductions, or price changes may subject GCT to a number of risks, including the following:

GCT’s projected sales will not materialize on schedule or at all;

unanticipated reduction in revenue and net profit; and

increase in excess or obsolete inventory which GCT may be unable to sell to other customers.
Alternatively, if GCT is unable to project customer requirements accurately, GCT may not manufacture sufficient semiconductor solutions, which could lead to delays in product shipments and lost sales opportunities in the near term, as well as force GCT’s customers to identify alternative sources, which could affect GCT’s ongoing relationships with these customers. In the past, GCT has experienced customers significantly increasing their orders with little or no advance notice. If GCT does not fulfill customer demands in a timely manner, GCT’s customers may cancel their orders, or may decide not to order from GCT in the future. In addition, GCT may be subject to customer claims for cost of replacement. Either underestimating or overestimating demand could lead to insufficient, excess or obsolete inventory, which could harm GCT’s business, financial condition, results of operations, as well as GCT’s customer relationships.
GCT does not have long-term capacity agreements with GCT’s foundries and they may not allocate sufficient capacity to allow GCT to meet future demands for GCT’s products, and there is no guarantee that GCT will be able to secure capacity agreements in the future.
GCT currently does not have long-term capacity agreements with GCT’s main foundries, UMC and Samsung LSI, primarily because historically GCT has placed only a limited quantity of orders. Accordingly, GCT’s foundries are not obligated to perform services or supply wafers to GCT 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 GCT has in the past been reduced due to strong demand by other foundry customers. The ability of GCT’s foundry vendors to provide GCT with semiconductor products is limited by available capacity and existing obligations. Because none of GCT’s third-party foundries has provided contractual assurances to GCT that ensure adequate capacity will be available to GCT to meet future demand for GCT’s products, foundry capacity may not be available when GCT need it or at reasonable prices. The foundries may allocate capacity to the production of other companies’ products while reducing deliveries to GCT on short or without notice. In particular, GCT’s foundries may reallocate capacity to other customers that are larger and better financed than GCT or that have long-term agreements with GCT’s foundry during a period of high demand. In addition, GCT expects that GCT may need to secure additional capacity from GCT’s foundries in the immediate future to support increasing demand for GCT’s products, and there is no guarantee that GCT will be able to secure this increased capacity to meet its needs.
 
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As GCT continues to grow GCT’s business, GCT intends to negotiate long-term supply agreements with GCT’s main foundries in order to secure capacity commitment. There can be no assurance that GCT will be able to negotiate these agreements successfully or in a timely fashion, or that any agreements GCT enter into will provide GCT with favorable pricing or sufficient capacity to meet GCT’s customer demand. GCT’s failure to secure suitable long-term capacity agreements with GCT’s foundries may limit GCT’s ability to expand GCT’s market and may have an adverse effect on GCT’s business, financial condition and results of operations.
Any increase in the manufacturing cost of GCT’s products could reduce GCT’s gross margins and operating profit.
The semiconductor business experiences ongoing competitive pricing pressure from customers and competitors. Accordingly, any increase in the cost of GCT’s products, whether by adverse changes in purchase price or adverse manufacturing cost, will reduce GCT’s gross margins and operating profit. In general, GCT does not have long-term supply agreements with GCT’s foundry, test, assembly and other vendors other than a framework agreement with UMC. As a result, GCT typically negotiates pricing on a purchase order basis. Therefore, GCT may not be able to obtain price reductions or anticipate or prevent future price increases from GCT’s suppliers. There is no assurance that GCT’s manufacturing suppliers will be able to deliver raw materials, goods and services to GCT at reasonable prices and the required volume. These and other related factors could impair GCT’s ability to meet GCT’s customers’ needs and have an adverse effect on GCT’s operating results.
If GCT’s foundry vendors do not achieve satisfactory yields or quality, GCT’s reputation, customer relationships and financial performance could be harmed.
The fabrication of chipsets is a complex and technically demanding process. Minor deviations in the manufacturing process can cause substantial decreases in yields, and in some cases, cause production to be suspended. GCT’s foundry vendor could, from time to time, experience manufacturing defects and reduced manufacturing yields. Changes in manufacturing processes or the inadvertent use of defective or contaminated materials by GCT’s foundry vendor could result in lower than anticipated manufacturing yields or unacceptable performance. Many of these problems are difficult to detect at an early stage of the manufacturing process and may be time consuming and expensive to correct. Poor yields from GCT’s foundry vendor, or defects, integration issues or other performance problems in GCT’s products could cause GCT significant customer relations and business reputation problems, harm GCT’s financial results and result in financial or other damages to GCT’s customers. GCT’s customers could also seek damages from GCT for their losses. A product liability claim brought against GCT, even if unsuccessful, would likely be time consuming and costly to defend.
GCT’s semiconductor solutions are manufactured at a limited number of locations. If GCT experiences manufacturing problems at a particular location, GCT would be required to transfer manufacturing to a backup location or supplier. Converting or transferring manufacturing from a primary location or supplier to a backup fabrication facility could be expensive and may not be completed for an extended period of time. During such a transition, GCT would be required to meet customer demand from GCT’s then-existing inventory, as well as any partially finished goods that can be modified to the required product specifications. GCT does not seek to maintain sufficient inventory to address a lengthy transition period because GCT believes it is not economical to keep more than minimal inventory on hand. As a result, GCT may not be able to meet customer needs during a transition, which could delay shipments, cause a production delay or stoppage for GCT’s customers, result in a decline in GCT’s sales and damage GCT’s customer relationships. In addition, a significant portion of GCT’s sales are to customers that practice just-in-time order management from their suppliers which gives GCT a very limited amount of time to process and complete these orders. As a result, delays in GCT’s production or shipping by the parties to whom GCT outsource these functions could reduce GCT’s sales, damage GCT’s customer relationships and GCT’s reputation in the marketplace, any of which could harm GCT’s business, results of operations and financial condition.
GCT may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries or increased costs.
GCT currently uses standard 110-nanometer, 40-nanometer and 28-nanometer standard RF, mixed-signal and digital CMOS production processes. GCT is also developing GCT’s next generation of products
 
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using 8-nanometer process technology. To remain competitive, GCT expects to continue to transition GCT’s semiconductor products to progressively smaller geometries and to achieve higher levels of design integration. These ongoing efforts require GCT from time to time to modify the manufacturing processes for GCT’s products and to redesign some products, which in turn may result in delays in product deliveries. GCT periodically evaluates the benefits of migrating to new process technologies to reduce cost and improve performance. GCT may face difficulties, delays and increased expenses as GCT transitions its products to new processes and potentially to new foundries. GCT depends on GCT’s relationships with its existing wafer foundries to transition to new processes successfully. There is no assurance that these foundries will be able to effectively manage the transition or that GCT will be able to maintain GCT’s relationship with them or develop relationships with new foundries. In addition, as new processes become more prevalent, GCT expects to continue to integrate greater levels of functionality, as well as end customer and third-party intellectual property, into GCT’s products. However, GCT may not be able to achieve higher levels of design integration or deliver new integrated products on a timely basis. If GCT or GCT’s wafer foundries experience significant delays in transitioning to smaller geometries or fail to efficiently implement transitions and new processes, GCT could experience reduced manufacturing yields, delays in product deliveries and increased costs, any or all of which could harm GCT’s relationships with GCT’s customers, and GCT’s business, financial condition and operating results.
The complexity of GCT’s semiconductor solutions could result in unforeseen delays or expenses from undetected defects, errors or bugs in hardware or software, which could reduce the market acceptance for GCT’s new semiconductor solutions.
Highly complex semiconductor solutions, such as GCT’s, frequently contain defects, errors and bugs when they are first introduced or as new versions are released. GCT has in the past and may in the future experience these defects, errors and bugs. If any of GCT’s semiconductor solutions have reliability, quality, or compatibility problems, GCT may not be able to successfully correct these problems in a timely manner or at all. In addition, if any of GCT’s proprietary features contain defects, errors or bugs when first introduced or as new versions are released, GCT may be unable to correct these problems. Consequently, GCT’s reputation may be damaged and customers may be reluctant to buy GCT’s semiconductor solutions, which could harm GCT’s ability to retain existing customers and attract new customers, as well as GCT’s financial results. In addition, these defects, errors or bugs could interrupt or delay sales to GCT’s customers. If any of these problems are not found until after GCT has commenced commercial production of a new semiconductor solution, GCT may be required to incur additional development costs and product recalls, repairs or replacement costs. These problems may also result in claims against GCT by GCT’s customers or others.
GCT has a history of losses, and GCT may not achieve or sustain profitability in the future, on a quarterly or annual basis.
GCT began operations in 1998 and has incurred losses on an annual basis since inception. GCT experienced net losses of $26.8 million and $26.4 million during the years ended December 31, 2021 and 2022, respectively and $12.3 million for the nine months ended September 30, 2023. As of September 30, 2023, GCT had an accumulated deficit of approximately $539.5 million and negative working capital of approximately $99.6 million. GCT had short-term debt in the amount of $18.3 million in borrowings as of December 31, 2022 and $43.6 million in borrowings as of September 30, 2023. GCT expects to incur significant expenses related to the research and development of GCT’s products and expansion of GCT’s business. Furthermore, the rapidly evolving wireless communications markets in which GCT sells its products, as well as other factors, make it difficult for GCT to forecast quarterly and annual revenue accurately. As a result, GCT could experience cash flow management problems, unexpected fluctuations in GCT’s results of operations and other difficulties, any of which would make it difficult for GCT to meet its debt obligations and achieve and maintain profitability.
In addition, as a public company, GCT will also incur significant legal, accounting and other expenses that GCT did not incur as a private company. As a result of these increased expenditures, GCT will be required to generate and sustain substantially increased revenue to achieve profitability. However, GCT may not be able to generate sufficient level of revenue to achieve or maintain profitability, in which case it will
 
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continue to incur significant losses in the future. GCT’s inability to achieve and sustain profitability may have an adverse effect on the market price of GCT’s common stock.
In addition, GCT has incurred significant operating losses and needs to raise additional capital to meet its obligations and sustain its operations. The audit report of GCT’s independent registered public accounting firm for the year ended December 31, 2022 and 2021 contains a statement that GCT’s historic operating losses, negative cash flow and negative working capital raise substantial doubt about its ability to continue as a going concern. Management’s evaluation of the events and conditions and its plans regarding these matters are described in Note 1 of GCT’s consolidated financial statements included elsewhere in this prospectus. Accordingly, if GCT does not generate sufficient level of revenue or become profitable, it 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 GCT’s operation will have a material adverse effect on GCT’s business, results of operations and financial position, and may adversely affect GCT’s ability to continue as a going concern.
Risks Related to GCT’s Industry and Regulatory Environment
The semiconductor and communications industries are cyclical and have historically experienced significant fluctuations with prolonged downturns, which could impact GCT’s operating results, financial condition and cash flows.
The semiconductor industry has historically exhibited a pattern of cyclicality, which at various times has included significant downturns in customer demand. Cyclical downturns can result in substantial declines in semiconductor demand, production overcapacity, high inventory levels and accelerated erosion of average selling prices. Such downturns result from a variety of market forces including constant and rapid technological change, quick product obsolescence, price erosion, evolving standards, short product life cycles and wide fluctuations in product supply and demand.
Recently, downturns in the semiconductor industry have been attributed to a variety of factors including the COVID-19 pandemic, ongoing trade disputes between the United States and China, weakness in demand and pricing for semiconductors across applications, and excess inventory. In addition, since the end of 2022, the semiconductor industry has experienced a downturn due to inventory corrections and reduced consumer demands. These downturns have directly impacted GCT’s business, suppliers, distributors and end customers.
Because a significant portion of GCT’s expenses is fixed in the near term or is incurred in advance of anticipated sales, GCT may not be able to reduce its expenses rapidly enough to offset any unanticipated shortfall in revenue. If this situation were to occur, it could adversely affect GCT’s operating results, cash flow and financial condition. Furthermore, the semiconductor industry has periodically experienced increased demand and production constraints. If this happens in the future, GCT may not be able to produce sufficient quantities of its products to meet the increased demand. GCT may also have difficulty in obtaining sufficient wafer, assembly and test resources from GCT’s subcontract manufacturers. Any factor adversely affecting the semiconductor industry in general, or the particular segments of the industry that GCT’s products target, may adversely affect GCT’s ability to generate revenue and could negatively impact GCT’s operating results.
The wireless communications industry has, in the past, experienced pronounced downturns, and these cycles may continue in the future. A future decline in global economic conditions could have adverse, wide-ranging effects on demand for GCT’s products and for the products of GCT’s customers, particularly wireless communications equipment manufacturers or other members of the wireless industry, such as wireless network operators. Inflation, deflation and economic recessions that adversely affect the global economy and capital markets also adversely affect GCT’s customers and end consumers. For example, GCT’s customers’ ability to purchase or pay for GCT’s products and services, obtain financing and upgrade wireless networks could be adversely affected, which may lead to many networking equipment providers slowing their research and development activities, canceling or delaying new product development, reducing their inventories and taking a cautious approach to acquiring GCT’s products, which would have a significant negative impact on GCT’s business. If this situation were to occur, it could adversely affect GCT’s operating
 
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results, cash flow and financial condition. In the future, any of these trends may also cause GCT’s operating results to fluctuate significantly from year to year, which may increase the volatility of the price of GCT’s stock.
The wireless and consumer electronics industry is characterized by short product cycles, significant fluctuations in supply and demand, and rapidly changing technologies, and GCT may not be able to meet these challenges successfully or consistently.
A substantial portion of GCT’s products is incorporated into wireless and consumer electronics industry. The wireless and consumer electronics industry into which GCT sell its products are characterized by high growth, short product cycles, significant fluctuations in supply and demand, and rapidly changing technologies. In order to remain competitive, wireless and consumer electronics manufacturers must continuously develop new technologies, deliver new products and otherwise adjust their business strategies to meet these challenges. GCT may not be able to implement the necessary measures timely, or if at all, to mitigate these industry-wide forces. For example, GCT may not be able to timely reduce its expenses to offset the impact of lower revenue in a cyclical downturn due to a reduction in demand, or it may be difficult for GCT to quickly shift the direction of GCT’s research and development efforts in response to new market requirements. GCT’s failure to do so could have an adverse effect on its financial condition and results of operations.
Changes in current laws or the imposition of new laws regulating the wireless networks and radio frequency emission could impede the sale of GCT’s products or otherwise harm GCT’s business.
Wireless networks can only operate in the frequency bands, or spectrum, allowed by regulators and in accordance with rules governing how the spectrum can be used. The Federal Communications Commission, or the FCC, in the United States, as well as regulators in foreign countries, have broad jurisdiction over the allocation of frequency bands for wireless networks. GCT therefore relies on the FCC and international regulators to provide sufficient spectrum and usage rules. For example, countries such as China, Taiwan, Japan, or Korea heavily regulate all aspects of their wireless communication industries and may restrict spectrum allocation or usage. If further restrictions were to be imposed over the frequency range where GCT’s semiconductor solutions are designed to operate, GCT may have difficulty in selling GCT’s products in those regions. In addition, GCT’s semiconductor solutions operate in the 2 and 3 gigahertz, or GHz, band, which in some countries is also used by government and commercial services such as military and commercial aviation. The FCC and European regulators have traditionally protected government uses of the 2 and 3 GHz bands by setting power limits and indoor and outdoor designation and requiring that wireless local area networking devices not interfere with other users of the band such as government and civilian satellite services. Changes in current laws or regulations or the imposition of new laws and regulations in the United States or elsewhere regarding the allocation and usage of the 2 and 3 GHz band on GCT, GCT’s customers or the industries in which GCT operates may materially and adversely impact the sale of GCT’s products and GCT’s business, financial condition and results of operations.
The large amount of capital required to obtain radio frequency licenses, deploy and expand wireless networks and obtain new subscribers could slow the growth of the wireless communications industry and adversely affect GCT’s business.
GCT’s growth is dependent upon the increased use of wireless communications services that utilize GCT’s technology. In order to provide wireless communications services, wireless operators must obtain rights to use specific radio frequencies. The allocation of frequencies is regulated in the United States and other countries throughout the world, and limited spectrum space is allocated to wireless communications services. Industry growth may be affected by the amount of capital required to obtain licenses to use new frequencies, deploy wireless networks to offer voice and data services, expand wireless networks to grow voice and data services and obtain new subscribers. The significant cost of licenses, wireless networks and subscriber additions may slow the growth of the industry if wireless operators are unable to obtain or service the additional capital necessary to implement or expand 4G/5G wireless networks. GCT’s growth could be adversely affected if this occurs.
 
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GCT may experience a decrease in market demand due to uncertain economic conditions in the United States and in international markets, which has been further exacerbated by the concerns of terrorism, war and social and political instability.
Economic growth in the United States and international markets has slowed significantly. The uncertainty in the economic environment may contribute to the volatility in the United States stock markets, which has experienced significant fluctuations recently. In addition, terrorist attacks in the United States and turmoil in the Middle East, including the recent war between Israel and Hamas, have increased the uncertainty in the United States economy and may contribute to a decline in economic conditions, both domestically and internationally. Terrorist acts and similar events, or war in general, could contribute further to a slowdown of the market demand for goods and services, including demand for GCT’s products. If the economy declines as a result of the recent economic, political and social turmoil, including any potential default or downgrade in the rating of United States debt obligations, or if there are further terrorist attacks in the United States or elsewhere, GCT may experience decreases in the demand for GCT’s products and services, which may harm GCT’s operating results.
Rapidly changing standards could make GCT’s semiconductor solutions obsolete, which would cause GCT’s operating results to suffer.
GCT designs its semiconductor solutions to conform to standards set by industry standards bodies, including the Institute of Electrical and Electronics Engineers, Inc., or IEEE, and the 3rd Generation Partnership Project, or 3GPP. GCT also depends on industry groups, such as the WiMAX Forum, to certify and maintain certification of GCT’s semiconductor solutions. If GCT’s customers adopt new or competing industry standards with which GCT’s semiconductor solutions are not compatible, or such industry groups fail to adopt standards with which GCT’s semiconductor solutions are compatible, GCT’s existing semiconductor solutions would become less desirable to GCT’s customers and GCT’s sales would suffer. The emergence of markets for GCT’s products is affected by a variety of factors beyond GCT’s control. In particular, GCT’s semiconductor solutions are designed to conform to current specific industry standards. Competing standards may emerge that are preferred by GCT’s customers, which could also reduce GCT’s sales and require GCT to make significant expenditures to develop new semiconductor solutions. Governments and foreign regulators may adopt standards with which GCT’s semiconductor solutions are not compatible, favor alternative technologies or adopt stringent regulations that would impair or make commercially unviable the deployment of GCT’s semiconductor solutions. In addition, products that implement existing standards may be challenged as infringing upon third-party intellectual property rights and may become obsolete.
Changes in, and the regulatory implementation of, tariffs or other government trade policies or political conditions could reduce demand for GCT’s products, limit its ability to sell its products to certain customers or its ability to comply with applicable laws and regulations.
Changes in government trade policies, including the imposition of tariffs and export restrictions, have limited and could continue to limit GCT’s ability to sell or provide its products and other items to certain customers and suppliers, which may materially adversely affect GCT’s sales and results of operations.
The U.S. or foreign governments have taken and may continue to take administrative, legislative or regulatory action that could materially interfere with GCT’s ability to export, reexport, import and transfer products and other items to certain countries, particularly China. For example, the imposition of tariffs has resulted in higher duties owed on certain products that are imported from China to the United States.
Furthermore, GCT has experienced and may continue to experience restrictions on its ability to export, reexport, and transfer GCT’s products and other items to certain foreign customers and suppliers where exports, reexports, or transfers of products require export licenses or are prohibited by government action. The U.S. government has in the past imposed export restrictions that effectively banned American companies from exporting, reexporting, and transferring products to certain of GCT’s customers, and imposed significant restrictions on the ability to obtain export licenses for its products. Such restrictions could have a continuing negative impact on GCT’s future revenue and results of operations. In addition, GCT’s customers or suppliers affected by U.S. government sanctions or threats of sanctions may respond by developing their own solutions to replace GCT’s products or by adopting GCT’s foreign competitors’
 
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solutions and products. Importantly, governments like China have the ability to impose countermeasures in reaction to increasing U.S. government sanctions and restrictions imposed on their companies which may impact GCT’s operations and future revenue as the compliance landscape becomes more challenging.
GCT cannot predict what further actions may ultimately be taken with respect to tariffs, export restrictions or other trade measures between the U.S. and China or other countries, what products or entities may be subject to such actions, or what actions may be taken by other countries in response. The loss of foreign customers or suppliers or the imposition of restrictions on GCT’s ability to sell or transfer products to such customers or suppliers as a result of tariffs, export restrictions or other U.S. regulatory actions could materially adversely affect GCT’s sales, business and results of operations.
GCT’s ability to compete is affected by certain regulatory developments that historically has benefited GCT’s products, including regulatory restrictions against distribution of similar products by Chinese companies, and changes in such regulatory requirement may adversely affect GCT’s sales.
GCT’s ability to compete and sell its products may be affected by certain regulatory developments that restrict other competitors to sell into the same markets as those served by GCT’s products. Specifically, regulatory and government agencies in various jurisdictions, including the U.S., the EU, South Korea and Japan have implemented rules and regulations that limit Chinese companies from selling and distributing certain products due to concerns that China may gain access to sensitive and advanced technologies for the development and manufacturing of next-generation semiconductor products. Such regulations may include export control regulations, restriction on transfer of intellectual property and other restrictions on commercial activities and strategic transactions by Chinese companies. While GCT has benefited from such regulations in the past, there is no guarantee that these regulations will continue. If regulatory and government agencies decide to relax or modify these regulations to permit more companies that compete with GCT to enter into the same market, GCT’s business operations and financial performance may be adversely affected.
GCT’s operating results may fluctuate from period to period and difficulty in predicting GCT’s quarterly operating results could cause the market price of GCT’s common stock to decline.
GCT’s revenue and operating results have fluctuated significantly from period to period in the past and will do so in the future. As a result, you should not rely on period-to-period comparisons of GCT’s operating results as an indication of GCT’s future performance. In future periods, GCT’s revenue and results of operations may be below the expectations of analysts and investors, which could cause the market price of the common stock to decline.
Factors that may cause GCT’s operating results to fluctuate include but are not limited to:

changes in the size, growth or growth prospects of the 5G markets;

timing and success of commercial deployments of and upgrades to 4G and the next generation 5G wireless networks;

GCT’s ability to develop and sell new products and penetrate into new markets;

GCT’s ability to successfully design and release new products in a timely manner that meet GCT’s customers’ needs;

the timing of customer orders and the delivery of GCT’s products;

the timing of product announcements by competitors or GCT;

changes in the competitive dynamics of GCT’s market, including new entrants or pricing pressures, and GCT’s ability to compete in the 4G LTE and 5G markets;

changes in the pricing of GCT’s products and any discounts or rebates that GCT offers to customers;

costs associated with litigation, especially related to intellectual property and securities class actions;

costs associated with any violation of the U.S. Foreign Corrupt Practices Act, the United Kingdom Bribery Act, or other similar foreign laws;
 
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reductions in orders and cancellations by GCT’s major customers;

changes in manufacturing costs, including wafer, test and assembly costs;

the impact of rising inflation and interest rates on consumer demand for electronic products;

availability of adequate manufacturing capacity for GCT’s products; and

general economic conditions globally and in regions where GCT operates.
Moreover, sales of GCT’s semiconductor solutions fluctuate from period to period due to cyclicality in the semiconductor industry and the short product life cycles and wide fluctuations in product supply and demand characteristics of this industry. GCT expects these cyclical conditions to continue. Due to GCT’s limited operating history, GCT has yet to experience an established pattern of seasonality. However, business activities in Asia generally slowdown in the first quarter of each year during the lunar new year period, which could harm GCT’s sales and results of operations during the period. GCT’s expense levels are relatively fixed in the short-term and are based, in part, on GCT’s future revenue projections. If revenue levels are below GCT’s expectations, GCT may experience declines in margins and profitability or incur a loss from its operations. As a result, GCT’s quarterly operating results are difficult to predict, even in the near term, which may result in GCT’s revenue and results of operations being below the expectations of analysts and investors, and which could cause the market price of the stock to decline.
Risks Related to Intellectual Property Rights
GCT’s failure to protect its intellectual property rights adequately could impair its ability to compete effectively or to defend itself from litigation.
GCT’s intellectual property rights and those of its subsidiaries, including trademarks, patents, copyrights, trade secrets and domain names, are important to its business and that of its subsidiaries. GCT cannot guarantee that its intellectual property rights will not be infringed or that registrations already granted will not be subject to invalidity claims by third parties in administrative or judicial proceedings. GCT relies on applicable laws and regulations, as well as a variety of administrative procedures, to protect its intellectual property.
Furthermore, contractual arrangements and other measures taken by GCT to protect its intellectual property may not prevent third parties from infringing or misappropriating its intellectual property or from independently developing intellectual property rights equivalent to or greater than GCT’s. In addition, GCT may not discover or determine the extent of any unauthorized use of its intellectual property rights. Any failure to adequately protect or enforce its intellectual property rights, or significant costs incurred in doing so, would materially harm its business.
In addition, if any of its intellectual property rights are challenged in court and in the event of an unfavorable court decision, GCT and its subsidiaries may be prohibited from continuing to use them. If GCT and its subsidiaries are unable to protect its property rights, this may have a material adverse effect on its business.
The enforcement and protection of GCT’s intellectual property may be expensive, could fail to prevent misappropriation or unauthorized use of its intellectual property, could result in the loss of its ability to enforce one or more patents, and could be adversely affected by changes in patent laws, by laws in certain foreign jurisdictions that may not effectively protect GCT’s intellectual property and by ineffective enforcement of laws in such jurisdictions.
GCT relies primarily on patent, trademark, trade secret and similar laws, as well as nondisclosure and confidentiality agreements, international treaties and other methods, to protect its intellectual property and proprietary information. Enforcing GCT’s intellectual property against misappropriation, infringement or unauthorized use may be costly, difficult and time consuming. GCT cannot be certain that the steps it has taken and will take in the future will prevent the misappropriation, infringement or unauthorized use of its products, technologies or intellectual property, particularly in foreign countries where the laws may not protect its rights as fully or as readily as United States laws or where the enforcement of such laws may be lacking or ineffective.
 
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GCT generally enters into confidentiality agreements with its employees, consultants, strategic partners and any other third party it does business with, where its relationship with such parties may entail disclosure of its confidential information. GCT also tries to control access to and distribution of its technologies, documentation and other proprietary information. Despite these efforts, internal or external parties may attempt to copy, disclose, obtain or use GCT’s products or technology without its authorization. Also, former employees may seek employment with GCT’s business partners, customers or competitors, and may improperly use its proprietary information for the benefit of or in connection with their new employer.
GCT may be subject to claims of infringement or misappropriation of third-party intellectual property rights, and any such infringement or other intellectual property claim made against GCT, whether or not it has merit, could be time-consuming, result in costly litigation, cause product delays, or require GCT to enter into royalty or licensing agreements.
GCT’s competitors and other third parties hold numerous patents related to technology used in its industry, and may hold or obtain patents, copyrights, trademarks or other intellectual property rights that could prevent, limit, or interfere with GCT’s ability to make, use, develop, sell or market GCT’s products and services, which could make it more difficult for GCT to operate its business. From time to time GCT may be subject to claims of infringement, misappropriation or other violation of patents or other intellectual property rights and related litigation. Regardless of their merit, responding to such claims can be time consuming, can divert management’s attention and resources, and may cause GCT to incur significant expenses in litigation or settlement, and GCT cannot be certain that it would be successful in defending against any such claims in litigation or other proceedings. If GCT does not successfully defend or settle an intellectual property claim, it could be liable for significant monetary damages and could be prohibited from continuing to use certain technology, business methods, content or brands, and from making, selling or incorporating certain components or intellectual property into the products and services GCT offers. As a result, GCT could be forced to redesign its products and services, and/or to establish and maintain alternative branding for GCT’s products and services. To avoid litigation or being prohibited from marketing or selling the relevant products or services, GCT could seek a license from the applicable third party, which could require it to pay significant royalties, licensing fees, or other payments, increasing GCT’s operating expenses. If a license is not available at all or not available on reasonable terms, GCT may be required to develop or license a non-violating alternative, either of which could be infeasible or require significant effort and expense. If GCT cannot license or develop a non-violating alternative, GCT would be forced to limit or stop sales of its offerings and may be unable to effectively compete. Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of GCT Common Stock. Any of these results could materially and adversely affect its business, financial condition and results of operations and prospects. Finally, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention, any of which could have a material adverse effect on GCT’s business, financial condition and results of operations.
GCT’s failure to comply with obligations under open source licenses could require GCT to release GCT’s source code to the public or cease distribution of GCT’s products, which could harm GCT’s business, financial condition and results of operations.
Some of the software used with GCT’s products, as well as that of some of GCT’s customers, may be derived from so-called “open source” software that is generally made available to the public by its authors and/or other third parties. This open source software is often made available to GCT under licenses, such as the GNU General Public License, which impose certain obligations on GCT in the event GCT were to make available derivative works of the open source software. These obligations may require GCT to make source code for the derivative works available to the public, and/or license such derivative works under a particular type of license, rather than the forms of license customarily used to protect GCT’s intellectual property. In addition, there is little or no legal precedent for interpreting the terms of certain of these open source licenses, including the determination of which works are subject to the terms of such licenses. While GCT believes it has complied with its obligations under the various applicable licenses for open source software, in the event the copyright holder of any open source software were to successfully establish in court that GCT had not complied with the terms of a license for a particular work, GCT could be required to
 
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release the source code of that work to the public and/or stop distribution of that work, which may adversely affect GCT’s business, financial condition and results of operations.
GCT’s failure to protect its intellectual property rights adequately could impair its ability to compete effectively or to defend itself from litigation.
GCT relies primarily on patent, copyright, trademark and trade secret laws, as well as confidentiality and non-disclosure agreements and other methods, to protect GCT’s proprietary technologies and know-how. As of September 30, 2023, GCT holds 35 US patents, 35 Korean patents, 13 Taiwanese patents, 4 Japanese patents, 6 Chinese patents, and 7 patents issued in other countries. Even if the pending patent applications are granted, the rights granted to GCT may not be meaningful or provide GCT with any commercial advantage. For example, these patents could be opposed, contested, circumvented or designed around by GCT’s competitors or be declared invalid or unenforceable in judicial or administrative proceedings. The failure of GCT’s patents to adequately protect GCT’s technology might make it easier for GCT’s competitors to offer similar products or technologies. GCT’s foreign patent protection is generally not as comprehensive as GCT’s U.S. patent protection and may not protect GCT’s intellectual property in some countries where GCT’s products are sold or may be sold in the future. Many U.S.-based companies have encountered substantial intellectual property infringement in foreign countries, including countries where GCT sells products. Even if foreign patents are granted, effective enforcement in foreign countries may not be available.
The legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and evolving. There is no assurance that others will not develop or patent similar or superior technologies, products or services, or that GCT’s patents, trademarks and other intellectual property will not be challenged, invalidated or circumvented by others.
Unauthorized copying or other misappropriation of GCT’s proprietary technologies could enable third parties to benefit from GCT’s technologies without paying GCT for doing so, which could harm GCT’s business. Monitoring unauthorized use of GCT’s intellectual property is difficult and costly. Although GCT is not aware of any unauthorized use of GCT’s intellectual property in the past, it is possible that unauthorized use of GCT’s intellectual property may have occurred or may occur without GCT’s knowledge. There is no assurance that the steps GCT has taken will prevent unauthorized use of GCT’s intellectual property. GCT’s failure to effectively protect GCT’s intellectual property could reduce the value of GCT’s technology in licensing arrangements or in cross-licensing negotiations. GCT may in the future need to initiate infringement claims or litigation. Litigation, whether GCT is a plaintiff or a defendant, can be expensive, time-consuming and may divert the efforts of GCT’s technical staff and managerial personnel, which could harm GCT’s business, whether or not such litigation results in a determination favorable to GCT. If GCT is unable to protect GCT’s proprietary rights or if third parties independently develop or gain access to GCT’s or similar technologies, GCT’s business, revenue, reputation and competitive position could be harmed.
GCT may not be able to obtain additional patents and the legal protection afforded by any additional patents may not adequately cover the full scope of its business or permit it to gain or keep competitive advantage.
GCT’s ability to obtain additional patents is uncertain and the legal protection afforded by these patents may not adequately protect its rights or permit it to gain or keep competitive advantage. In addition, the specific content required of patents and patent applications that are necessary to support and interpret patent claims can be uncertain due to the complex nature of the relevant legal, scientific and factual issues. Changes in either patent laws or interpretations of patent laws in the United States or elsewhere may diminish the value of GCT’s intellectual property or narrow the scope of its patent protection. Even if patents are issued regarding GCT’s products and processes, GCT’s competitors may challenge the validity of those patents.
GCT may not be able to obtain reimbursements from GCT’s customers for costs related to research and development activities.
In connection with product development agreements with certain customers, GCT received non-recurring engineering (“NRE”) fees to reimburse costs incurred in the research, development and design of GCT’s products. These arrangements are motivated primarily by the opportunity to engage
 
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customers and at the same time, jointly progress GCT’s own research and development activities with the associated development compensation. GCT uses these NRE amounts to defray a portion of GCT’s research and development expenses, and it has the effect of reducing GCT’s operating expenses. During the years ended December 31, 2021 and 2022 and the nine months ended September 30, 2023, GCT recognized $6.5 million, $3.7 million, and $3.2 million, respectively, related to these NRE contracts and as a service revenue. Generally, these NRE reimbursements are paid upon the completion of specified milestones in GCT’s product development contracts. However, there is no guarantee that GCT will be able to satisfy these milestones, and failure to do so may delay or prevent GCT from receiving NRE fees. In addition, there is no assurance that GCT will be able to negotiate or obtain NRE reimbursements in future product development agreements, and failure to receive and recognize NRE reimbursements, and any significant reduction in the amount of NRE reimbursements GCT receive, could increase GCT’s operating expenses and adversely affect GCT’s results of operations.
GCT relies upon third parties for supporting technology that is integrated into some of GCT’s products, and if GCT is unable to continue to use this technology and future technology, GCT’s ability to sell technologically advanced products would be limited.
GCT relies on third parties for supporting technology that is integrated into some of GCT’s products. If GCT is unable to continue to use or license on reasonable terms third-party technologies used in some of GCT’s products, GCT may not be able to secure alternatives on a timely basis and GCT’s business could be harmed. Even if GCT is able to secure an alternative license to replace the loss of an existing technology, GCT’s transition to this new technology may require additional time and expenses. Any delay or incurrence of additional costs could have an adverse effect on GCT’s business, financial condition and results of operations.
GCT’s business depends on international customers, suppliers and operations in Asia, which subjects it to additional risks, including increased complexity and costs of managing international operations and geopolitical instability.
GCT relies on, and expects to continue to rely on, customers and suppliers located primarily in the Asia-Pacific region. GCT also have, and will continue to have, research and development facilities in Korea and sales offices in China, Japan, Korea and Taiwan. As a result of GCT’s international focus, GCT is subject to a number of risks, including:

increased complexity and costs of managing international operations;

longer and more difficult collection of receivables;

difficulties in enforcing contracts generally;

limited protection of GCT’s intellectual property and other assets;

restrictions on GCT’s ability to export GCT’s technology from the U.S. and other countries;

compliance with local laws and regulations and unanticipated changes in local laws and regulations, including tax laws and regulations;

complexities in the accounting and financial management of GCT’s operations;

trade and foreign exchange restrictions and higher tariffs;

travel restrictions;

timing and availability of import and export licenses and other governmental approvals, permits and licenses, including export classification requirements;

foreign currency exchange fluctuations relating to GCT’s international operating activities;

transportation delays and limited local infrastructure and disruptions, such as large scale outages or interruptions of service from utilities or telecommunications providers;

difficulties in staffing international operations;
 
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adverse changes in economic and political conditions resulting from political instability, acts of terrorism, armed conflict, social unrest, and other circumstances impacting countries in which GCT or GCT’s customers operate, including as a result of any escalation of the current tensions between Taiwan and China;

the risk of government financed competition;

local business and cultural factors that differ from GCT’s normal standards and practices;

differing employment practices and labor issues; and

regional health issues and natural disasters.
In addition, although GCT does not conduct any business in North Korea, any future increase in political or military tensions between South Korea and North Korea, or between the U.S. and North Korea, may adversely affect GCT’s business, financial condition and results of operations.
GCT’s business operations could be significantly harmed by natural disasters or global epidemics.
GCT has research and development facilities located in San Jose, California which could suffer significant business disruption due to earthquakes. A significant portion of GCT’s products is manufactured by third-party contractors located in the Pacific Rim region, including Taiwan. The risk of an earthquake or tsunami in Taiwan and elsewhere in the Pacific Rim region is significant due to the proximity of major earthquake fault lines to the facilities of GCT’s foundry vendors and assembly and test subcontractors. In the event of an earthquake, GCT’s customers and suppliers may be affected by rolling blackouts, decreased access to raw materials and limited ability to ship inventory. If these conditions persist, GCT may experience delay or cancellation of orders from GCT’s customers if they are unable to obtain adequate supplies of components needed for the manufacture of their products that incorporate GCT’s components. GCT may also experience shortages of key materials required for the assembly of GCT’s own products, which could limit GCT’s ability to manufacture and ship these products. In either event, GCT’s net sales and results of operations could be adversely affected. GCT is not currently covered by insurance against business disruption caused by earthquakes.
GCT’s business could be adversely affected by epidemics or outbreaks such as COVID-19, avian flu or H1N1 flu, also known as swine flu. An outbreak of respiratory virus in the human population, or another similar health crisis, could adversely affect the economies and financial markets of many countries, particularly in Asia. Moreover, any related disruptions to transportation or the free movement of persons could hamper GCT’s operations and force GCT to close GCT’s offices temporarily.
The occurrence of any of the foregoing or other natural or man-made disasters could cause damage or disruption to GCT, GCT’s employees, operations, distribution channels, markets and customers, which could result in significant delays in deliveries or substantial shortages of GCT’s products and adversely affect GCT’s business results of operations, financial condition, or prospects.
Failure to comply with governmental laws and regulations could harm GCT’s business.
GCT’s business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, federal securities laws and tax laws and regulations. In certain jurisdictions, these regulatory requirements are more stringent than in the United States. It is expected that new environmental laws and regulations will impact GCT’s products and operations, and although GCT cannot predict the ultimate impact of any such changes, they may increase GCT’s operating and manufacturing costs or result in increased penalties, which could harm GCT’s business. Noncompliance with applicable regulations or requirements could subject GCT to investigations, sanctions, mandatory product recalls, enforcement actions, fines, damages, civil and criminal penalties or injunctions. If any governmental sanctions are imposed, or if GCT do not prevail in any possible civil or criminal litigation, GCT’s business, operating results and financial condition could be adversely affected. In addition, GCT may incur significant costs to respond to or
 
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defend against adverse government proceedings, and these actions may divert GCT’s management’s attention and resources. Enforcement actions and sanctions could harm GCT’s business, operating results and financial condition.
The enactment of legislation implementing changes in the U.S. taxation of international business activities or the adoption of other tax reform policies could materially impact GCT’s financial position and results of operations.
The U.S. government has made public statements indicating that it has made international tax reform a priority, and key members of the U.S. Congress have conducted hearings and proposed new legislation. Recent changes to U.S. tax laws, including limitations on the ability of taxpayers to claim and utilize foreign tax credits and the deferral of certain tax deductions until earnings outside of the United States are repatriated to the United States, as well as changes to U.S. tax laws that may be enacted in the future, could impact the tax treatment of GCT’s foreign earnings. Due to the large and expanding scale of GCT’s international business activities, any changes in the U.S. taxation of such activities may increase GCT’s worldwide effective tax rate and harm GCT’s financial condition, and results of operations.
Risks Related to Ownership of GCT’s Common Stock and GCT’s Corporate Structure
The market price of GCT’s common stock may be volatile, which could cause the value of your investment to decline.
Prior to this Business Combination, GCT Common Stock has not been traded in a public market. GCT cannot predict the extent to which a trading market will develop or how liquid that market might become. The trading price of New GCT Common Stock following the Business Combination is therefore likely to be highly volatile and could be subject to wide fluctuations in price in response to various factors, some of which are beyond GCT’s control. These factors include:

changes in financial estimates, including GCT’s ability to meet GCT’s future revenue and operating profit or loss projections;

changes in earnings estimates or recommendations by securities analysts;

fluctuations in GCT’s operating results or those of GCT’s customers, operators or other semiconductor companies;

commercial deployment and upgrade of 4G and 5G wireless networks;

economic developments in the semiconductor or mobile and wireless industries as a whole;

general economic conditions and slow or negative growth of related markets;

announcements by GCT or GCT’s customers or competitors of acquisitions, new products, significant contracts or orders, commercial relationships or capital commitments;

announcements regarding intellectual property litigation involving GCT or GCT’s competitors;

changes in the financial estimates of GCT’s competitors;

GCT’s ability to develop and market new and enhanced products on a timely basis;

changes in the pricing and costs of manufacturing;

commencement of or GCT’s involvement in litigation;

any major change in GCT’s board of directors or management;

political or social conditions in the markets where GCT sell GCT’s products; and

changes in governmental regulations.
In addition, the stock market in general, and the market for semiconductor and other technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. These fluctuations may be
 
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even more pronounced in the trading market shortly following this Business Combination. These broad market and industry factors may cause the market price of GCT Common Stock to decrease, regardless of GCT’s actual operating performance. These trading price fluctuations may also make it more difficult for GCT to use GCT Common Stock as a means to make acquisitions or to use options to purchase GCT’s common stock to attract and retain employees. In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against GCT, could result in substantial costs and a diversion of GCT’s management’s attention and resources for GCT’s business operations.
If securities analysts or industry analysts downgrade GCT’s stock, publish negative research or reports, or do not publish reports about GCT’s business, GCT’s stock price and trading volume could decline.
The trading market for GCT Common Stock will be influenced by the research and reports that industry or securities analysts publish about GCT, GCT’s business and GCT’s market. If one or more analysts adversely change their recommendation regarding GCT’s stock or GCT’s competitors’ stock, GCT’s stock price could decline. If one or more analysts cease coverage of GCT or fail to regularly publish reports on GCT, GCT could lose visibility in the financial markets, which in turn could cause GCT’s stock price or trading volume to decline.
Delaware law and GCT’s amended and restated certificate of incorporation and bylaws contain provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
Provisions in GCT’s amended and restated certificate of incorporation and bylaws, as they will be in effect upon the completion of this Business Combination, may have the effect of delaying or preventing a change of control or changes in GCT’s management. These provisions include the following:

the right of the board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or due to the resignation or departure of an existing board member;

the prohibition of cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;

the requirement for the advance notice of nominations for election to the board of directors or for proposing matters that can be acted upon at a stockholders’ meeting;

the ability of GCT’s board of directors to alter GCT’s bylaws without obtaining stockholder approval;

the ability of the board of directors to issue, without stockholder approval, up to 10,000,000 shares of preferred stock with terms set by the board of directors, which rights could be senior to those of GCT Common Stock;

the elimination of the rights of stockholders to call a special meeting of stockholders and to take action by written consent in lieu of a meeting; and

the required approval of at least a majority of the shares entitled to vote at an election of directors to remove directors without cause.
In addition, because GCT is incorporated in Delaware, GCT is governed by the provisions of Section 203 of the DGCL. These provisions may prohibit large stockholders, particularly those owning 15% or more of GCT’s outstanding voting stock, from merging or combining with GCT. These provisions in GCT’s amended and restated certificate of incorporation and bylaws and under Delaware law could discourage potential takeover attempts and could reduce the price that investors might be willing to pay for shares of GCT Common Stock in the future and could result in GCT’s market price being lower than it would without these provisions.
GCT does not intend to pay dividends on GCT Common Stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of GCT Common Stock.
GCT does not intend to declare and pay dividends on GCT’s capital stock for the foreseeable future. GCT currently intends to invest GCT’s future earnings, if any, to fund GCT’s growth. Therefore, you are
 
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not likely to receive any dividends on your common stock for the foreseeable future and the success of an investment in shares of GCT Common Stock will depend upon any future appreciation in their value. There is no guarantee that shares of GCT Common Stock will appreciate in value or even maintain the price at which GCT’s stockholders have purchased their shares.
Dr. Kyeongho Lee, Chairman of the Board and founder of GCT, owns a significant portion of its outstanding voting stock and exerts significant influence over its business and affairs.
Dr. Kyeongho Lee, Chairman of the Board and co-founder of GCT, is also the chairman of the board and major shareholders of Anapass, Inc. (“Anapass”), which beneficially owns approximately 27% of issued and outstanding GCT Common Stock. His significant ownership will, for the foreseeable future, enable them to control GCT’s management and affairs, and most matters requiring stockholder approval, including the election of directors, financing activities, a merger or sale of GCT’s assets and other significant corporate transactions. Anapass and Mr. Lee may, at their discretion, elect to exercise these or similar rights at any time. This concentration of ownership could have the effect of delaying or preventing a change in GCT’s control or otherwise discouraging a potential acquirer from attempting to obtain control of GCT. In addition, due to Mr. Lee’s controlling position with respect to both Anapass and GCT, which may result on potential conflict of interest or appearance of conflict of interest and may adversely affect the rights of minority stockholders of GCT.
General Risks Related to GCT
The loss of any of GCT’s key personnel could seriously harm GCT’s business, and GCT’s failure to attract or retain specialized technical, management or sales and marketing talent could impair GCT’s ability to grow GCT’s business.
GCT believes GCT’s future success will depend in large part upon its 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 and harm GCT’s ability to sell its semiconductor solutions. GCT believes that GCT’s future success is dependent on the contributions of its senior management members, some of whom do not have any employment agreements. If any of these individuals were to leave unexpectedly, GCT 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 GCT’s business and operations.
GCT’s key technical and engineering personnel represent a significant asset and serve as the source of GCT’s technological and product innovations. GCT plans to recruit design and application engineers with expertise in wireless communications technologies. GCT may not be successful in attracting, retaining and motivating sufficient numbers of technical and engineering personnel to support GCT’s anticipated growth.
In addition, to expand GCT’s customer base and increase sales to existing customers, GCT will need to hire additional qualified sales and marketing personnel. The competition for qualified marketing, sales, technical and engineering personnel in GCT’s industry is very intense. If GCT is unable to hire, train and retain qualified marketing, sales, technical and engineering personnel in a timely manner, GCT’s ability to grow its business will be impaired. In addition, if GCT is unable to retain its existing sales personnel, GCT’s ability to maintain or grow its current level of revenue will be adversely affected.
Being a public company will increase GCT’s expenses and administrative workload and will expose it to risks relating to evaluation of its internal controls over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002.
As a public company, GCT will need 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. GCT was not required to comply with these laws and requirements as a private company. Complying with these laws and regulations will require the time and attention of GCT’s board of directors and management and will increase GCT’s expenses. Among other things, GCT will need to: design, establish,
 
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evaluate and maintain a system of internal controls 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; prepare and distribute periodic reports in compliance with GCT’s obligations under the federal securities laws; establish new internal policies, principally those relating to disclosure controls and procedures and corporate governance; institute a more comprehensive compliance function; and involve to a greater degree GCT’s outside legal counsel and accountants in the above activities.
GCT is in the process of evaluating its internal control systems to allow management to report on its internal controls over financial reporting. GCT plans to perform the system and process evaluation and testing (and any necessary remediation) required to comply with the management certification requirements of Section 404 of the Sarbanes-Oxley Act. GCT will be required to comply with Section 404 in its annual report for the year ending December 31, 2023. However, GCT cannot be certain as to the timing of completion of its evaluation, testing and remediation actions or the impact of the same on its operations. Furthermore, upon completion of this process, GCT may identify control deficiencies of varying degrees of severity under applicable SEC and PCAOB rules and regulations that remain unremediated.
If GCT fails to implement the requirements of Section 404 in a timely manner, GCT 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 GCT of a material weakness may cause investors to lose confidence in its financial statements or the trading price of GCT Common Stock to decline. If GCT fails to remediate any material weakness, GCT’s financial statements may be inaccurate, its access to the capital markets may be restricted and the trading price of GCT Common Stock may decline.
As a public company, GCT will be required to report, among other things, control deficiencies that constitute a “material weakness” or changes in internal controls that materially affect, or are reasonably likely to materially affect, internal controls 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.
Adverse outcomes in tax disputes could subject GCT to tax assessments and potential penalties.
From time to time, GCT is subject to tax audits that could result in tax assessments and potential penalties, particularly with respect to claimed research tax credits due to the judgment involved in determining which projects meet the tax code’s criteria for innovation and fundamental research.
GCT’s business and operations could suffer in the event of security breaches.
Attempts by others to gain unauthorized access to GCT’s information technology systems are becoming more sophisticated. These attempts, which might be related to industrial or other espionage, include covertly introducing malware to GCT’s computers and networks and impersonating authorized users, among others. Hackers may also develop and deploy viruses, worms and other malicious software programs that attack or otherwise exploit security vulnerabilities in GCT’s systems or products. Attacks may create system disruptions, cause shutdowns or result in the corruption of GCT’s engineering data, which could result in delays in product development or software updates and harm GCT’s business. Additionally, the theft, unauthorized use or publication of GCT’s intellectual property and/or confidential business information could harm its competitive position, reduce the value of its investment in research and development and other strategic initiatives or otherwise adversely affect its business. To the extent that any security breach results in inappropriate disclosure of GCT’s customers’ or business partners’ confidential information, GCT may incur liability as a result. GCT could also suffer monetary and other losses, including reputational harm, which costs it may not be able to recover. GCT seeks to detect and investigate all security incidents and to prevent their recurrence, but in some cases, GCT might be unaware of an incident or its magnitude and effects. While GCT has identified some incidents involving attempts at unauthorized access, it is not aware of any
 
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that have succeeded. While GCT has not experienced any cybersecurity breaches that materially affected its operations, there is no guarantee that it will not occur in the future. In addition, GCT’s customers, partners and suppliers may experience cybersecurity attacks that may indirectly affect GCT’s ability to conduct business with them or result in cybersecurity breaches in GCT’s network, which may adversely affect GCT’s business operations. GCT expects to continue to devote resources to the security of its information technology systems.
In preparing its financial statements GCT makes certain assumptions, judgments and estimates that affect amounts reported in its consolidated financial statements, which, if not accurate, may significantly impact its financial results.
In preparing its financial statements, GCT makes assumptions, judgments and estimates for a number of items. These assumptions, judgments and estimates are drawn from historical experience and various other factors that GCT believes are reasonable under the circumstances as of the date of the consolidated financial statements. Actual results could differ materially from GCT’s estimates, and such differences could significantly impact its financial results.
Risks Related to Concord III and the Business Combination
Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to Concord III.
Concord III’s independent directors and executive officers beneficially own shares of Concord III Common Stock and Concord III Warrants that will be worthless if the Business Combination is not approved. Such interests may have influenced their decision to approve the Business Combination.
Concord III’s independent directors and certain of Concord III’s executive officers and/or their affiliates beneficially own or have a pecuniary interest in shares of Concord III Common Stock and Concord III Warrants that the Sponsor purchased prior to the IPO. Concord III’s independent directors and executive officers and their affiliates have no redemption rights with respect to these securities in the event a business combination is not effected in the required time period. Therefore, if the Business Combination or another business combination is not completed by August 8, 2024, such securities held by such persons will be worthless. Such shares and warrants had an aggregate market value of approximately $84.3 million and $700,000, respectively based upon the closing prices of Concord III Class A Common Stock and Concord III Warrants on the NYSE on January 26, 2024. Furthermore, members of the Concord III board of directors are entitled to reimbursement for all out-of-pocket expenses incurred by them on Concord III’s behalf incident to identifying, investigating and consummating a business combination to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless a business combination is consummated. In addition, in order to fund working capital deficiencies or finance transaction costs in connection with our initial business combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, make Working Capital Loans to us as may be required. If we complete our initial business combination, we would repay such loaned amounts, without interest, upon consummation of the business combination. If our initial business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. On May 3, 2022, we entered into a non-convertible promissory note (the “Sponsor Promissory Note”) with the Sponsor, pursuant to which we may borrow up to an aggregate principal amount of $350,000. The Sponsor Promissory Note is non-interest bearing and due on the earlier of August 8, 2024 and the date on which we consummate our initial business combination (and as such, such loan is expected to be repaid in connection with the Closing). As of September 30, 2023, there was no balance outstanding under the Sponsor Promissory Note. See the section entitled “The Business Combination — Interests of Concord III’s Directors and Officers in the Business Combination.”
These financial interests may have influenced the decision of Concord III’s directors to approve the Business Combination and to continue to pursue the Business Combination. In considering the recommendations of the Concord III board of directors to vote for the Business Combination Proposal and other proposals, Public Stockholders should consider these interests.
 
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Concord III’s Sponsor, executive officers and directors have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement/prospectus.
When considering Concord III’s board of directors’ recommendation that our stockholders vote in favor of the approval of the Business Combination Proposal, Concord III’s stockholders should be aware that certain of Concord III’s Sponsor, executive officers and directors have interests in the Business Combination that may be different from, or in addition to, the interests of Concord III’s stockholders. These interests include:

the beneficial ownership of the Sponsor, which is governed by a board of managers consisting of three managers, Bob Diamond, David Schamis and Jeff Tuder, of an aggregate of 16,218,333 shares of Concord III Common Stock, consisting of:

7,957,727 Founder Shares purchased by the Sponsor for an aggregate price of $25,000;

8,260,606 shares of Concord III Class A Common Stock underlying Private Warrants purchased by the Sponsor at $1.00 per warrant for an aggregate purchase price of approximately $8.26 million.
All of the above Founder Shares and warrants would become worthless if Concord III does not complete a business combination within the applicable time period, as the Sponsor has waived any right to redemption with respect to these shares. Such shares and warrants have an aggregate market value of approximately $84.3 million and $700,000, respectively, based on the closing price of Concord III Class A Common Stock of $10.59 and the closing price of Concord III Warrants of $0.0839 on the NYSE on January 26, 2024;

the beneficial ownership of Concord III’s independent directors, Peter Ort, Thomas King and Larry Leibowitz, who each hold 30,000 Founder Shares with a total market value of approximately $318,000 based on the closing price of Concord III Class A Common Stock of $10.59 on the NYSE on January 26, 2024. The Founder Shares would become worthless if Concord III does not complete a business combination within the applicable time period, as the independent directors have waived any right to redemption with respect to these shares;

the fact that given the differential in the purchase price that the Sponsors paid for the Founder Shares as compared to the price of Concord III Units sold in the IPO and the substantial number of shares of Concord III Class A Common Stock held by the initial stockholders, they and their affiliates may earn a positive rate of return on their investment, even if Public Stockholders experience a negative rate of return following the completion of the Business Combination, including if the share price of New GCT Common Stock after the Closing falls as low as $1.09 per share, as the market value of the 8,625,000 Founder Shares would be approximately equal to the initial stockholders’ initial investment in Concord III;

the economic interests in the Sponsor held directly or indirectly by certain of Concord III’s officers and directors, including Bob Diamond and Jeff Tuder, which gives them an indirect pecuniary interest in the securities of Concord III, including the Founder Shares and Private Warrants held by the Sponsor and which interest will become worthless if Concord III does not consummate an initial business combination within the applicable time period.

As of September 30, 2023, there was no balance outstanding in Working Capital Loans extended by the Sponsor to Concord III pursuant to the Sponsor Promissory Note. Other than repayment of Working Capital Loans in connection with the consummation of the Business Combination, there are presently no fees that will be paid and no out-of-pocket expenses that would be reimbursed to the Sponsor upon consummation of the Business Combination;

the continued right of the Sponsor to hold Concord III Class A Common Stock and the shares of Concord III Class A Common Stock to be issued to the Sponsor upon exercise of its Private Warrants following the Business Combination, subject to certain lock-up periods and forfeiture pursuant to the Sponsor Support Agreement;
 
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the fact that the Sponsor and Concord III’s executive officers and directors, for no compensation, have agreed not to redeem any shares of Concord III held by them in connection with a stockholder vote to approve the Business Combination and to vote any shares of Concord III Common Stock held by them in favor of the Business Combination Proposal;

the fact that if the Trust Account is liquidated, including in the event Concord III is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Concord III to ensure that the proceeds in the Trust Account are not reduced below $10.20 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Concord III has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Concord III, but only if such a vendor or target business has not executed a waiver (other than Concord III’s independent public accountants) of any and all rights to amounts held in the Trust Account; and

the fact that Jeff Tuder, the current Chief Executive Officer and a director of Concord III, is expected to become a director of New GCT after the consummation of the Business Combination. As such, in the future he will receive any cash fees, stock options, stock awards or other remuneration that the New GCT board of directors determines to pay to him for his services as a director;

Concord III’s existing certificate of incorporation provides that the doctrine of corporate opportunity will not apply with respect to Concord III or any of its officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have. Concord III does not believe that the pre-existing fiduciary duties or contractual obligations of its officers and directors materially impacted its search for an acquisition target. In the course of their other business activities, Concord III’s officers and directors may become aware of other investment and business opportunities which may be appropriate for presentation to Concord III as well as the other entities with which they are affiliated. Concord III’s management has pre-existing fiduciary duties and contractual obligations and if there is a conflict of interest in determining to which entity a particular business opportunity should be presented, any entity with whom Concord III’s management has a pre-existing fiduciary obligation will be presented the opportunity before Concord III is presented with it. Concord III does not believe, however, that the fiduciary duties or contractual obligations of Concord III’s officers or directors or waiver of corporate opportunity materially affected Concord III’s search for a business combination. Concord III is not aware of any such corporate opportunity not being offered to Concord III and does not believe the renouncement of Concord III’s interest in any such corporate opportunities impacted Concord III’s search for an acquisition target; and

the continued indemnification of current directors and officers of Concord III and the continuation of directors’ and officers’ liability insurance after the Business Combination.
These interests may have influenced Concord III’s directors in making their recommendation that you vote in favor of the Business Combination Proposal, and the transactions contemplated thereby. The existence of financial and personal interests of the Sponsor, board of directors and executive officers of Concord III may mean that they may be incentivized to recommend, approve and/or complete the Business Combination, or an alternative business combination, with a less favorable target company or on terms less favorable to Public Stockholders and holders of Public Warrants than they would otherwise recommend, approve or complete, as the case may be, rather than allow Concord III to wind up having failed to consummate a business combination and lose their entire investment. Further, because of these interests, the Sponsor, board of directors and executive officers of Concord III could benefit from the completion of a business combination that is not favorable to Public Stockholders and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to Public Stockholders rather than liquidate.
Certain of Concord III’s officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by Concord III and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented.
Until Concord III consummates its initial business combination, it intends to engage in the business of identifying and combining with one or more businesses. The Sponsor and Concord III’s officers and directors
 
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are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business, including other special purpose acquisition companies with a class of securities registered under the Exchange Act.
Concord III’s officers and directors also may become aware of business opportunities which may be appropriate for presentation to Concord III and the other entities to which they owe certain fiduciary or contractual duties. Concord III’s amended and restated certificate of incorporation provides that it renounces interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as Concord III’s director or officer and such opportunity is one Concord III is legally and contractually permitted to undertake and would otherwise be reasonable for Concord III to pursue, and to the extent the director or officer is permitted to refer that opportunity to Concord III without violating any legal obligation.
In the absence of the “corporate opportunity” waiver in Concord III’s charter, certain candidates would not be able to serve as an officer or director. Concord III believes it substantially benefits from having representatives who bring significant, relevant and valuable experience to Concord III’s management and, as a result, the inclusion of the “corporate opportunity” waiver in Concord III’s amended and restated certificate of incorporation provides it with greater flexibility to attract and retain the officers and directors that it feels are the best candidates.
However, the personal and financial interests of Concord III’s directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. The different timelines of competing business combinations could cause Concord III’s directors and officers to prioritize a different business combination over finding a suitable acquisition target for Concord III’s business combination. Consequently, Concord III’s directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in the Concord III’s stockholders’ best interest, which could negatively impact the timing for a business combination. Concord III is not aware of any such conflicts of interest and does not believe that any such conflicts of interest impacted Concord III’s search for an acquisition target.
Concord III stockholders will have a reduced ownership and voting interest after the Business Combination and will exercise less influence over management.
Upon the issuance of the New GCT Common Stock to GCT Stockholders in connection with the Business Combination, current Public Stockholders’ percentage ownership will be diluted. The percentage of New GCT Common Stock that will be owned by Public Stockholders as a group will vary based on the number of Public Shares for which the holders thereof request redemption in connection with the Business Combination. To illustrate the potential ownership percentages of Public Stockholders under different redemption levels, based on the number of issued and outstanding shares of Concord III Common Stock and GCT capital stock on December 20, 2023, and based on the Concord III Class A Common Stock to be issued in the Business Combination without giving effect to the issuance of Earnout Shares or of any shares issuable upon exercise of the Concord III Warrants, Public Stockholders, as a group, and the Sponsors and their affiliates and directors and officers of Concord III, as a group, will own (1) if there are no redemptions of Public Shares, 7.9% and 10.9%, respectively, of New GCT Common Stock expected to be outstanding immediately after the Business Combination or (2) if there are redemptions of 3,941,361 shares of Concord III Class A Common Stock, which represents the maximum amount of redemptions, 0% and 8.0% respectively, of New GCT Common Stock expected to be outstanding immediately after the Business Combination. The percentage of New GCT Common Stock that will be owned by Public Stockholders will be further diluted by the issuance of Earnout Shares, the exercise of Concord III Warrants, or any issuance pursuant to the 2024 Incentive Award Plan or 2024 Employee Stock Purchase Plan. Assuming the issuance of the maximum amount of shares of New GCT Common Stock in connection with each of the above-enumerated dilution sources as well as the exercise of the Public Warrants at the closing of Business Combination, Public Stockholders, as a group, and Concord III’s initial stockholders, as a group, will own (1) if there are no redemptions of Public Shares, 4.0% and 5.5%, respectively, of New GCT Common Stock expected to be outstanding immediately after the Business Combination or (2) if there are redemptions of 3,941,361 shares of Concord III Class A Common Stock, which represents the maximum amount of
 
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redemptions, 0% and 3.8%, respectively, of New GCT Common Stock expected to be outstanding immediately after the Business Combination. To the extent that any shares are issued in the PIPE Investment, Public Stockholders’ percentage ownership of New GCT’s common stock will be further diluted. Because of this, Public Stockholders, as a group, will have less influence on the board of directors, management and policies of New GCT than they now have on the board of directors, management and policies of Concord III.
There can be no assurance that New GCT Common Stock will be approved for listing on the NYSE or that New GCT will be able to comply with the continued listing standards of the NYSE.
In connection with the Closing, we intend to list New GCT Common Stock and warrants on the NYSE under the symbols “GCTS” and “GCTSW,” respectively. New GCT’s continued eligibility for listing may depend on the number of Public Shares that are redeemed. If, after the Business Combination, the NYSE delists New GCT’s shares from trading on its exchange for failure to meet the listing standards, New GCT and its stockholders could face significant material adverse consequences including:

a limited availability of market quotations for New GCT’s securities;

reduced liquidity for New GCT’s securities;

a determination that New GCT Common Stock is a “penny stock” which will require brokers trading in New GCT Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of New GCT Common Stock;

a limited amount of analyst coverage; and

a decreased ability to issue additional securities or obtain additional financing in the future.
The timing of the Business Combination may be affected by the regulatory process of The Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”)
CFIUS has authority to review certain direct or indirect foreign investments in U.S. businesses. Among other things, CFIUS is authorized to require foreign investors to make mandatory filings to the Committee or to self-initiate national security reviews of certain foreign direct and indirect investments in U.S. businesses if the parties to that investment choose not to file voluntarily. With respect to transactions that CFIUS believes present unresolved national security concerns, CFIUS has the authority to suspend transactions, impose mitigation measures, and/or recommend that the U.S. president block pending transactions or order divestitures of completed transactions when national security concerns cannot be mitigated. Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends on, among other factors, the nature and structure of the transaction, whether the target company is a U.S. business, the level of beneficial ownership and voting interests acquired by foreign persons, and the nature of any information, control or governance rights received by foreign persons. For example, any investment that results in “control” of a U.S. business by a foreign person is within CFIUS’s jurisdiction. CFIUS’s expanded jurisdiction under the Foreign Investment Risk Review Modernization Act of 2018 and implementing regul