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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2024
Stock-Based Compensation |
Stock-Based Compensation | 11. Stock-Based Compensation 2011 Incentive Compensation Plan Legacy GCT’s 2011 Incentive Compensation Plan (the “2011 Plan”) permitted the grant of options, stock awards, and RSUs. In connection with the Closing of the Business Combination, the 2011 Plan was terminated, the remaining unallocated shares reserved under the 2011 Plan were cancelled. In March 2024, each award of Legacy GCT stock options and RSUs were converted into equivalent Company stock options and RSUs with the same terms and conditions under the plan described below. 2024 Incentive Compensation Plan In March 2024, the Company adopted the 2024 Omnibus Incentive Compensation Plan (the “2024 Plan”), under which 3,983,334 shares of common stock were initially reserved for issuance. The 2024 Plan permits the grant of stock options, stock appreciation rights, stock awards, RSUs, dividend equivalent rights, cash awards, and other awards to employees and non-employees, including members of the board of directors, consultants, or advisors. Stock options outstanding under the 2024 Plan were as follows (in thousands, except per share amounts and years):
|  | Number of Options Outstanding |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Lif (in Years) |  |  | Aggregate Intrinsic Value |
Balance as of December 31, 2023 |  |  | 3,579 |  |  | $ | 0.02 |  |  |  | 5.5 |  |  | $ | 4,045 |
Reverse recapitalization |  |  | (2,911 | ) |  |  | 0.09 |  |  |  | — |  |  |  | — |
Balance as of December 31, 2023(1) |  |  | 668 |  |  |  | 0.11 |  |  |  | 5.5 |  |  |  | 4,045 |
Exercised |  |  | (118 | ) |  |  | 0.11 |  |  |  |  |  |  |
Balance as of September 30, 2024 |  |  | 550 |  |  | $ | 0.11 |  |  |  | 4.6 |  |  | $ | 1,785 |
Vested and expected to vest as of September 30, 2024 |  |  | 550 |  |  | $ | 0.11 |  |  |  | 4.6 |  |  | $ | 1,785 |
Exercisable as of September 30, 2024 |  |  | 533 |  |  | $ | 0.11 |  |  |  | 4.5 |  |  | $ | 1,729 |
(1) Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (see Note 3). No options were granted during the nine months ended September 30, 2024. As of September 30, 2024, unrecognized compensation cost related to stock options was nominal. The aggregate intrinsic value of 117,670 options exercised during the three months ended September 30, 2024 was $0.3 million. Founder Awards to Board of Directors In 2021, an aggregate of 90,000 shares of common stock were transferred to three members of Concord III’s board of directors (“Founder Shares”). The Founder Shares contained double-trigger vesting, which required continuous service and a liquidity event for any shares to vest. As the required conditions were met upon the Closing, the Company recognized $0.9 million of stock-based compensation upon the Closing in March 2024. Restricted Stock Units In December 2023, various employees and directors of Legacy GCT were granted 392,000 RSUs that contain both a performance condition based upon a liquidity event and a service vesting condition such that (subject to the liquidity event condition being satisfied) the RSUs vest in four equal annual installments from the grant date (“2023 RSUs”). The liquidity condition was met upon the Closing. In June 2024, the Company granted to the members of its board of directors certain share-based awards with a fixed monetary amount of $0.7 million equally allocated among six grantees (“2024 RSUs”). The number of shares issuable to each grantee under the 2024 RSUs is calculated by dividing one-fourth of the allocated fixed monetary amount by the closing price of the Company’s common stock at the end of each fiscal quarter between April 1, 2024 and March 31, 2025. The RSUs will vest on March 31, 2025, subject to the grantees’ continuous service to the Company and will be settled in common stock on various dates in 2026 and 2027. The 2024 RSUs are initially classified as a liability and reclassified to equity up to the monetary amount for which the number of shares to be issued becomes determinable. Through September 30, 2024, this determination was made for 80,916 shares based on the closing price of the Company’s common stock as of each fiscal quarter-end after the grant date. In August 2024, the Company granted various employees 140,000 RSUs that vest in four equal annual installments subject to continuous service. RSUs outstanding under the 2024 Plan were as follows (in thousands, except per share amounts):
|  | Number of RSUs Outstanding |  |  | Weighted Average Grant Date Fair Value |
Balance as of December 31, 2023 |  |  | 2,100 |  |  | $ | 1.15 |
Reverse recapitalization |  |  | (1,708 | ) |  |  | 5.01 |
Balances as of December 31, 2023(1) |  |  | 392 |  |  | $ | 6.16 |
Granted |  |  | 221 |  |  |  | 3.69 |
Cancelled |  |  | (2 | ) |  |  | 6.16 |
Balance as of September 30, 2024 |  |  | 611 |  |  | $ | 5.26 |
(1) Amounts as of December 31, 2023 differ from those in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (see Note 3). The Company recognized $0.6 million and $1.2 million of stock-based compensation during the three and nine months ended September 30, 2024, respectively, related to the outstanding RSUs. As of September 30, 2024, there was $2.3 million of unrecognized compensation cost related to RSUs, which is expected to be recognized on a straight-line basis over a weighted average period of 3.0 years. Any unvested RSUs are forfeited upon separation from the Company. Forfeitures are accounted for as they occur. Stock-Based Compensation The following table summarizes stock-based compensation included in the Company’s condensed consolidated statements of operations:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Cost of revenues |  |  | 33 |  |  |  | — |  |  |  | 33 |  |  |  | — |
Research and development |  |  | 135 |  |  |  | 1 |  |  |  | 389 |  |  |  | 3 |
Sales and marketing |  |  | 36 |  |  |  | 1 |  |  |  | 108 |  |  |  | 3 |
General and administrative |  |  | 369 |  |  |  | 1 |  |  |  | 1,589 |  |  |  | 2 |
Total |  | $ | 573 |  |  | $ | 3 |  |  | $ | 2,119 |  |  | $ | 8 |

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