(Mark One)
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x
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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41-2116508
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Voting Common Stock, $.0001 par value
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The NASDAQ Stock Market
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
(Do not check if a smaller reporting
company)
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Smaller reporting company
o
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Page
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PART I
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Item 1. Business
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1
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Item 1A. Risk Factors
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13
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Item 1B. Unresolved Staff Comments
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26
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Item 2. Properties
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27
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Item 3. Legal Proceedings
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27
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Item 4. (Removed and Reserved)
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27
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PART II
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Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
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28
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Item 6. Selected Financial Data
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28
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Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
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29
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Item 7A. Quantitative and Qualitative Disclosures about Market Risk
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43
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Item 8. Financial Statements and Supplementary Data
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44
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Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
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83
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Item 9A. Controls and Procedures
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83
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Item 9B. Other Information
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84
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PART III
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Item 10. Directors and Executive Officers of the Registrant
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84
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Item 11. Executive Compensation
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84
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Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
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84
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Item 13. Certain Relationships and Related Transactions
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84
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Item 14. Principal Accounting Fees and Services
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84
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PART IV
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Item 15. Exhibits, Financial Statement Schedules
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85
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Signatures
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86
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•
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two-way voice communication and data transmissions, which we call “Duplex,” between mobile or fixed devices;
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•
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one-way data transmissions between a mobile or fixed device that transmits its location and other information and a central monitoring station, which includes the SPOT family and Simplex products.
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•
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Duplex two-way transmission products;
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•
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SPOT family of products (“SPOT”);
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•
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Simplex one-way transmission products.
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Location
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Gateway
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Independent Gateway Operators
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Argentina
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Bosque Alegre
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TE.SA.M Argentina
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Australia
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Dubbo
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Pivotal Group PTY Limited
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Australia
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Mount Isa
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Pivotal Group PTY Limited
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Australia
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Meekatharra
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Pivotal Group PTY Limited
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China
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Beijing
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China Spacecom
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Italy
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Avezzano
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Elsacom N.V.
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South Korea
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Yeo Ju
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Arion Communications Co
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Mexico
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San Martin
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Globalstar de Mexico
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Nigeria
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Kaduna
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Globaltouch (West Africa) Limited
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Peru
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Lurin
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TE.SA.M Peru
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Russia
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Khabarovsk
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GlobalTel
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Russia
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Moscow
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GlobalTel
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Russia
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Novosibirsk
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GlobalTel
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Turkey
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Ogulbey
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Globalstar Avrasya
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•
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mobile satellite services, which provide customers with connectivity to mobile and fixed devices using a network of satellites and ground facilities;
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•
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fixed satellite services, which use geostationary satellites to provide customers with voice and broadband communications links between fixed points on the earth's surface; and
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•
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terrestrial services, which use a terrestrial network to provide wireless or wireline connectivity and are complementary to satellite services.
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•
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our ability to complete the construction, delivery and launch of our second-generation satellites and, once launched, our ability to maintain their health, capacity and control;
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our ability to maintain or reduce costs until our second-generation constellation is in service;
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•
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the level of market acceptance and demand for all of our services;
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•
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our ability to introduce new products and services that meet this market demand;
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•
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our ability to retain our existing Duplex customers until we have launched our second-generation satellites;
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•
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our ability to obtain additional business using our existing spectrum resources both in the United States and internationally;
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•
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our ability to control the costs of developing an integrated network providing related products and services;
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•
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our ability to market successfully our new SPOT and Simplex products and services, especially our SPOT satellite GPS messenger, SPOT Communicator, SPOT HUG, and SPOT Connect products and services;
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our ability to develop and deploy innovative network management techniques to permit mobile devices to transition between satellite and terrestrial modes;
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our ability to limit the effects of further degradation of, and to maintain the capacity and control of, our existing first-generation satellite network;
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our ability to sell the equipment inventory on hand and under commitment to purchase from Qualcomm;
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the effectiveness of our competitors in developing and offering similar products and services and in persuading our customers to switch service providers; and
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with the addition of our retail product line, general economic conditions that affect consumer discretionary spending and consumer confidence, which have declined sharply in the recent recession.
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whether we can maintain a sufficient number of our existing two-way communications service customers;
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whether we can introduce successfully new product and service offerings; and
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whether we can continue to compete successfully against other mobile satellite service providers.
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•
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the actual size of the addressable market;
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•
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our ability to provide attractive service offerings at competitive prices to our target markets;
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•
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the cost and availability of user equipment that operate on our network;
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•
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the effectiveness of our competitors in developing and offering alternate technologies or lower priced services; and
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•
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general and local economic conditions, which have been adversely affected by the current recession.
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•
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incur or guarantee additional indebtedness;
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•
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pay dividends or make distributions to our stockholders;
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•
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make investments, acquisitions or capital expenditures;
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•
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repurchase or redeem capital stock or subordinated indebtedness;
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grant liens on our assets;
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incur restrictions on the ability of our subsidiaries to pay dividends or to make other payments to us;
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enter into transactions with our affiliates;
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merge or consolidate with other entities or transfer all or substantially all of our assets; and
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transfer or sell assets.
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•
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actual or anticipated variations in our operating results;
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•
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further failure in the performance of our current or future satellites or a delay in the launch of our second-generation satellites;
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•
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changes in financial estimates by research analysts, or any failure by us to meet or exceed any such estimates, or changes in the recommendations of any research analysts that elect to follow our common stock or the common stock of our competitors;
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•
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actual or anticipated changes in economic, political or market conditions, such as recessions or international currency fluctuations;
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•
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actual or anticipated changes in the regulatory environment affecting our industry;
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•
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actual or anticipated sales of common stock by our controlling stockholder or others;
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•
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changes in the market valuations of our industry peers; and
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•
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announcements by us or our competitors of significant acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives.
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•
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the absence of cumulative voting in the election of our directors, which means that the holders of a majority of our common stock may elect all of the directors standing for election;
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•
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the ability of our board of directors to issue preferred stock with voting rights or with rights senior to those of the common stock without any further vote or action by the holders of our common stock;
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the division of our board of directors into three separate classes serving staggered three-year terms;
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•
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the ability of our stockholders, at such time when Thermo Capital Partners LLC and its affiliates (“Thermo”) does not own a majority of our outstanding capital stock entitled to vote in the election of directors, to remove our directors only for cause and only by the vote of at least 66 2/3% of the outstanding shares of capital stock entitled to vote in the election of directors;
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•
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prohibitions, at such time when Thermo does not own a majority of our outstanding capital stock entitled to vote in the election of directors, on our stockholders acting by written consent;
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•
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prohibitions on our stockholders calling special meetings of stockholders or filling vacancies on our board of directors;
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•
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the requirement, at such time when Thermo does not own a majority of our outstanding capital stock entitled to vote in the election of directors, that our stockholders must obtain a super-majority vote to amend or repeal our amended and restated certificate of incorporation or bylaws;
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•
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change of control provisions in our Facility Agreement, which provide that a change of control will constitute an event of default and, unless waived by the lenders, will result in the acceleration of the maturity of all indebtedness under the credit agreement;
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•
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change of control provisions relating to our 5.75% Notes and 8% Notes, which provide that a change of control will permit holders of the Notes to demand immediate repayment; and
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•
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change of control provisions in our 2006 Equity Incentive Plan, which provide that a change of control may accelerate the vesting of all outstanding stock options, stock appreciation rights and restricted stock.
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Location
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Country
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Sq Feet
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Facility Use
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Owned/Leased
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El Dorado Hills, California
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USA
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11,000
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Satellite and Ground Control Center
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Leased
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Mississauga, Ontario
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Canada
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18,200
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Canada Office
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Leased
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Milpitas, California
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USA
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55,300
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Satellite and Ground Control Center
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Leased
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Covington, Louisiana
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USA
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27,000
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Corporate Office
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Leased
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Covington, Louisiana
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USA
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10,000
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SPOT Equipment Storage Facility
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Leased
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Dublin
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Ireland
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1,700
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Europe Office
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Leased
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Caracas
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Venezuela
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2,200
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Venezuela Office
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Leased
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Panama City
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Panama
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1,100
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GAT Office
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Leased
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Seletar Satellite Earth Station
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Singapore
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4,500
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Gateway
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Leased
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Clifton, Texas
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USA
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10,000
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Gateway
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Owned
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Sebring, Florida
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USA
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9,000
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Gateway
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Leased
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Barrio of Las Palmas, Cabo Rojo
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Puerto Rico
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6,000
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Gateway
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Owned
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Aussaguel
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France
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4,600
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Gateway
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Leased
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Los Velasquez, Edo Miranda
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Venezuela
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9,700
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Gateway
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Owned
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Wasilla, Alaska
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USA
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5,000
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Gateway
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Owned
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Smith Falls, Ontario
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Canada
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6,500
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Gateway
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Owned
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High River, Alberta
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Canada
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6,500
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Gateway
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Owned
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Managua
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Nicaragua
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10,900
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Gateway
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Owned
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Manaus
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Brazil
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1,900
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Gateway
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Owned
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Presidente Prudente
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Brazil
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1,300
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Gateway
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Owned
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Rio de Janeiro
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Brazil
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4,000
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Brazil Office
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Leased
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Petrolina
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Brazil
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2,500
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Gateway
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Owned
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Quarter Ended:
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High
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Low
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||||||
March 31, 2009
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$ | 0.46 | $ | 0.20 | ||||
June 30, 2009
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$ | 1.76 | $ | 0.40 | ||||
September 30, 2009
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$ | 1.09 | $ | 0.76 | ||||
December 31, 2009
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$ | 1.02 | $ | 0.64 | ||||
March 31, 2010
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$ | 1.42 | $ | 0.93 | ||||
June 30, 2010
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$ | 1.96 | $ | 1.32 | ||||
September 30, 2010
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$ | 1.90 | $ | 1.41 | ||||
December 31, 2010
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$ | 1.91 | $ | 1.39 |
Year Ended December 31,
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||||||||||||||||||||
2010
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2009
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2008
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2007
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2006
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||||||||||||||||
Statement of Operations Data:
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||||||||||||||||||||
Revenues
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$ | 67,941 | $ | 64,279 | $ | 86,055 | $ | 98,398 | $ | 136,671 | ||||||||||
Operating income (loss)
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(59,769 | ) | (53,791 | ) | (57,710 | ) | (24,632 | ) | 15,663 | |||||||||||
Other income (expense)
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(37,302 | ) | (21,148 | ) | 32,635 | (429 | ) | (6,111 | ) | |||||||||||
Income (loss) before income taxes
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(97,071 | ) | (74,939 | ) | (25,075 | ) | (25,061 | ) | 9,552 | |||||||||||
Net income (loss)
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(97,467 | ) | (74,923 | ) | (22,792 | ) | (27,925 | ) | 23,623 | |||||||||||
Balance Sheet Data (end of period):
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||||||||||||||||||||
Cash and cash equivalents
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33,017 | 67,881 | 12,357 | 37,554 | 43,698 | |||||||||||||||
Total assets
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1,386,808 | 1,266,640 | 816,878 | 512,975 | 331,701 | |||||||||||||||
Long-term debt
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664,543 | 463,551 | 238,345 | 50,000 | 417 | |||||||||||||||
Redeemable common stock
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— | — | — | — | 4,949 | |||||||||||||||
Ownership equity
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535,418 | 595,792 | 445,397 | 405,544 | 260,697 |
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•
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total revenue, which is an indicator of our overall business growth;
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•
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subscriber growth and churn rate, which are both indicators of the satisfaction of our customers;
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•
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average monthly revenue per unit, or ARPU, which is an indicator of our pricing and ability to obtain effectively long-term, high-value customers. We calculate ARPU separately for each of our Duplex, Simplex, SPOT, and IGO businesses;
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•
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operating income and EBITDA, which is an indication of our financial performance;
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•
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capital expenditures, which are an indicator of future revenue growth potential and cash requirements.
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Year Ended
December 31, 2010
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Year Ended
December 31, 2009
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|||||||||||||||
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Revenue
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% of
Total
Revenue
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Revenue
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% of
Total
Revenue
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||||||||||||
Service Revenue:
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||||||||||||||||
Duplex
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$
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23,294
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34
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%
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$
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29,517
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46
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%
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||||||||
SPOT
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14,756
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22
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9,557
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15
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||||||||||||
Simplex
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4,583
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7
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3,873
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6
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||||||||||||
IGO
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1,140
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2
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1,191
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2
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||||||||||||
Other
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7,164
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10
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6,090
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9
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||||||||||||
Total
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50,937
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75
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50,228
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78
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Year Ended
December 31, 2010
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Year Ended
December 31, 2009
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|||||||||||||||
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Revenue
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% of
Total
Revenue
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Revenue
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% of
Total
Revenue
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||||||||||||
Subscriber Equipment Sales:
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||||||||||||||||
Duplex
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$ |
2,174
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3
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%
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$
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3,086
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5
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%
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|||||||
SPOT
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8,934
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13
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6,561
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10
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||||||||||||
Simplex
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5,582
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8
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557
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1
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||||||||||||
Other
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314
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1
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3,847
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6
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||||||||||||
Total
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17,004
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25
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14,051
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22
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Year Ended December 31,
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||||||||
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2010
|
2009
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||||||
Average number of subscribers for the period:
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||||||||
Duplex
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97,708
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103,429
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||||||
SPOT
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125,576
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80,190
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||||||
Simplex
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120,253
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109,044
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||||||
IGO
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60,433
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69,940
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||||||
ARPU (monthly):
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||||||||
Duplex
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$
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19.87
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$
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23.78
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||||
SPOT
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9.79
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9.93
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||||||
Simplex
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3.18
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2.96
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||||||
IGO
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1.57
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1.42
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December 31,
|
||||||||
2010
|
2009
|
|||||||
Ending number of subscribers:
|
||||||||
Duplex
|
95,879 | 99,027 | ||||||
SPOT
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151,752 | 103,514 | ||||||
Simplex
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131,313 | 115,383 | ||||||
IGO
|
52,483 | 64,723 | ||||||
Other
|
7,826 | 7,947 | ||||||
Total
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439,253 | 390,594 |
Year Ended
December 31, 2009
|
Year Ended
December 31, 2008
|
|||||||||||||||
|
Revenue
|
% of
Total
Revenue
|
Revenue
|
% of
Total
Revenue
|
||||||||||||
Service Revenue:
|
||||||||||||||||
Duplex
|
$ | 29,517 | 46 | % | $ | 46,173 | 54 | % | ||||||||
Simplex
|
3,873 | 6 | 3,689 | 4 | ||||||||||||
SPOT
|
9,557 | 15 | 2,673 | 3 | ||||||||||||
IGO
|
1,191 | 2 | 3,096 | 4 | ||||||||||||
Other
|
6,090 | 9 | 6,163 | 7 | ||||||||||||
Total Service Revenue
|
50,228 | 78 | 61,794 | 72 |
Year Ended
December 31, 2009
|
Year Ended
December 31, 2008
|
|||||||||||||||
|
Revenue
|
% of
Total
Revenue
|
Revenue
|
% of
Total
Revenue
|
||||||||||||
Subscriber Equipment Sales:
|
|
|
||||||||||||||
Duplex
|
$ | 3,086 | 5 | % | $ | 9,955 | 11 | % | ||||||||
Simplex
|
557 | 1 | 79 | — | ||||||||||||
SPOT
|
6,561 | 10 | 9,398 | 11 | ||||||||||||
Other
|
3,847 | 6 | 4,829 | 6 | ||||||||||||
Total Subscriber Equipment Sales
|
14,051 | 22 | 24,261 | 28 |
Year Ended December 31,
|
||||||||
|
2009
|
2008
|
||||||
Average number of subscribers for the period:
|
||||||||
Duplex
|
103,429 | 114,044 | ||||||
Simplex
|
109,044 | 92,028 | ||||||
SPOT
|
80,190 | 24,200 | ||||||
IGO
|
69,940 | 78,478 | ||||||
ARPU (monthly):
|
||||||||
Duplex
|
$ | 23.78 | $ | 33.74 | ||||
Simplex
|
$ | 2.96 | $ | 3.34 | ||||
SPOT
|
$ | 9.93 | $ | 9.20 | ||||
IGO
|
$ | 1.42 | $ | 3.29 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Ending number of subscribers:
|
||||||||
Duplex
|
99,027 | 107,753 | ||||||
Simplex
|
115,383 | 103,447 | ||||||
SPOT
|
103,514 | 51,749 | ||||||
IGO
|
64,723 | 73,763 | ||||||
Other
|
7,947 | 7,618 | ||||||
Total
|
390,594 | 344,330 |
Statements of Cash Flows
|
Year Ended
December 31,
2010
|
Year Ended
December 31,
2009
|
Year Ended
December 31,
2008
|
|||||||||
Net cash used by operating activities
|
$
|
(23,338
|
)
|
$
|
(18,423
|
)
|
$
|
(30,585
|
)
|
|||
Net cash used in investing activities
|
(205,391
|
)
|
(311,692
|
)
|
(258,581
|
)
|
||||||
Net cash from financing activities
|
194,670
|
386,756
|
252,533
|
|||||||||
Effect of exchange rate changes on cash
|
(805
|
)
|
(1,117
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)
|
11,436
|
|||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
$
|
(34,864
|
)
|
$
|
55,524
|
$
|
(25,197
|
)
|
Payments
through
December 31,
|
Estimated Future Payments
|
|||||||||||||||||||
Capital Expenditures
|
2010
|
2011
|
2012
|
Thereafter
|
Total
|
|||||||||||||||
Thales Alenia Second-Generation Satellites
|
$ | 592 | $ | 28 | $ | — | $ | — | $ | 620 | ||||||||||
Thales Alenia Satellite Operations Control Centers
|
$ | 14 | $ | 1 | $ | — | $ | — | $ | 15 | ||||||||||
Arianespace Launch Services
|
$ | 192 | $ | 24 | $ | — | $ | — | $ | 216 | ||||||||||
Launch Insurance
|
$ | 12 | $ | 28 | $ | — | $ | — | $ | 40 | ||||||||||
Other Capital Expenditures and Capitalized Labor
|
$ | 29 | $ | 5 | $ | — | $ | — | $ | 34 | ||||||||||
Total
|
$ | 839 | $ | 86 | $ | — | $ | — | $ | 925 |
Payments
through
December 31,
|
Estimated Future Payments
|
|||||||||||||||||||
Capital Expenditures
|
2010
|
2011
|
2012
|
Thereafter
|
Total
|
|||||||||||||||
Hughes second-generation ground component
(including research and development expense)
|
$ | 50 | $ | 37 | $ | 16 | $ | 1 | $ | 104 | ||||||||||
Oceus Networks- ground network
|
$ | 2 | $ | 6 | $ | 15 | $ | 5 | $ | 28 | ||||||||||
Total
|
$ | 52 | $ | 43 | $ | 31 | $ | 6 | $ | 132 |
|
•
|
a $563.3 million tranche for future payments to and to reimburse us for amounts we previously paid to Thales Alenia Space for construction of our second-generation satellites. Such reimbursed amounts were used by us (a) to make payments to Arianespace for launch services, Hughes Networks Systems LLC for ground network equipment, software and satellite interface chips and Oceus Networks (formally known as Ericsson Federal Inc.) for ground system upgrades, (b) to provide up to $150 million for our working capital and general corporate purposes and (c) to pay a portion of the insurance premium to COFACE; and
|
|
•
|
a $23 million tranche that will be used to make payments to Arianespace for launch services and to pay a portion of the insurance premium to COFACE.
|
|
•
|
we not permit our capital expenditures (other than those funded with cash proceeds from insurance and condemnation events, equity issuances or the issuance of our stock to acquire certain assets) to exceed $234.0 million in 2010 and $391.0 million in 2009 (with unused amounts permitted to be carried over to subsequent years)
|
|
•
|
following the Contingent Equity release date, we maintain a minimum liquidity of $5.0 million;
|
|
•
|
we achieve for each period the following minimum adjusted consolidated EBITDA (as defined in the Facility Agreement):
|
Period
|
Minimum Amount
|
||
1/1/10-12/31/10
|
$
|
(15.0) million
|
|
7/1/10-6/30/11
|
$
|
(15.0) million
|
|
1/1/11-12/31/11
|
$
|
2.5 million
|
|
7/1/11-6/30/12
|
$
|
17.5 million
|
|
1/1/12-12/31/12
|
$
|
55.0 million
|
|
7/1/12-6/30/13
|
$
|
65.0 million
|
|
1/1/13-12/31/13
|
$
|
78.0 million
|
|
•
|
beginning with the period of July 1, 2011 through December 31, 2012, we maintain a minimum debt service coverage ratio of 1.00:1, gradually increasing to a ratio of 1.50:1 through 2019; and
|
|
•
|
beginning in 2012, we maintain a maximum net debt to adjusted consolidated EBITDA ratio of 9.90:1, gradually decreasing to 2.50:1 through 2019.
|
|
•
|
to make payments to complete the procurement of our first 24 second-generation satellites and
upgrading our satellite operations control centers
;
|
|
•
|
to make payments related to our three remaining launches for the first 24 second-generation satellites (the remaining 18 satellites);
|
|
•
|
to make payments related to the construction of our Control Network Facility and second-generation ground component;
|
|
•
|
to fund our commited working capital;
|
|
•
|
to fund future operations; and
|
|
•
|
to make payments to procure and deploy our second 24 second-generation satellites and to upgrade our gateways and other ground facilities.
|
|
•
|
cash on hand at December 31, 2010 ($33.0 million);
|
|
•
|
cash from our Facility Agreement ($26.7 million was available at December 31, 2010);
|
|
•
|
additional debt and equity offerings not yet arranged;
|
|
•
|
cash available under our contingent equity account ($60 million was available at December 31, 2010); and
|
|
•
|
operating cash flows (if any).
|
|
•
|
to make payments to procure and deploy our second 24 second-generation satellites and upgrading our gateways and other ground facilities;
|
|
•
|
to fund our working capital and operations, including any growth in our business; and
|
|
•
|
to fund repayment of our indebtedness, both principal and interest, when due.
|
Contractual Obligations:
|
2011
|
2012
|
2013
|
2014
|
2015
|
Thereafter
|
Total
|
|||||||||||||||||||||
Long-term debt obligations (1)
|
$ | — | $ | 34,287 | $ | 60,440 | $ | 64,050 | $ | 67,886 | $ | 569,335 | $ | 795,998 | ||||||||||||||
Interest on long-term debt (2)
|
19,031 | 21,968 | 27,083 | 30,142 | 30,163 | 117,984 | 246,371 | |||||||||||||||||||||
Escrow payments on long-term debt (3) | — | 35,902 | 35,902 | — | — | — | 71,804 | |||||||||||||||||||||
Operating lease obligations
|
2,053 | 1,576 | 1,289 | 733 | 657 | 1,623 | 7,931 | |||||||||||||||||||||
Purchase obligations (4) (5) (6)
|
123,548 | 31,228 | 4,375 | 793 | — | — | 159,944 | |||||||||||||||||||||
Pension obligations
|
846 | 868 | 890 | 904 | 893 | 4,580 | 8,981 | |||||||||||||||||||||
Total
|
$ | 145,478 | $ | 125,829 | $ | 129,979 | $ | 96,622 | $ | 99,599 | $ | 693,522 | $ | 1,291,029 |
(1)
|
All of the indebtedness may be accelerated upon default of related covenants. See “Note 4: Borrowings” of the Consolidated Financial Statements in this Report. Amounts include payment in kind interest.
|
(2)
|
Approximately $586 million of our debt bears interest at a floating rate and, accordingly, we estimated our interest costs in future years.
|
(3)
|
The Facility Agreement requires that we fund a convertible note reserve account by March 1, 2012 equal to 50% and by March 1, 2013 equal to 100% of the notional purchase price of the 5.75% Notes to secure our obligations. As of December 31, 2010, the estimated notional purchase price was $71.8 million, which we assume will be paid in 2013. However, failure to fund this account if excess cash flow, as defined, is not available is not considered an event of default under the Facility Agreement.
|
(4)
|
As stated above, we are currently negotiating with Thales to amend the current contract to purchase an additional 23 satellites. The negotiations are underway to define a new quantity of satellites with associated terms and conditions. Since the results of these negotiations are unknown at this time, we have not included these obligations in the above table.
|
(5)
|
The purchase obligations for the construction of our first 24 second-generation satellites and the Control Network facility are converted to U.S. dollars using an exchange rate of €1.00 = $1.42.
|
(6)
|
Amounts based on when cash payment is scheduled to made. |
Page
|
||
Audited consolidated financial statements of Globalstar, Inc.
|
|
|
Report of Crowe Horwath LLP, independent registered public accounting firm
|
45
|
|
Consolidated balance sheets at December 31, 2010 and 2009
|
46
|
|
Consolidated statements of operations for the years ended December 31, 2010, 2009 and 2008
|
47
|
|
Consolidated statements of comprehensive loss for the years ended December 31, 2010, 2009 and 2008
|
48
|
|
Consolidated statements of ownership equity for the years ended December 31, 2010, 2009 and 2008
|
49
|
|
Consolidated statements of cash flows for the years ended December 31, 2010, 2009 and 2008
|
50
|
|
Notes to consolidated financial statements
|
51
|
December 31,
|
||||||||
|
2010
|
2009
|
||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
33,017
|
$
|
67,881
|
||||
Restricted cash
|
2,064
|
—
|
||||||
Accounts receivable, net of allowance of $5,971 (2010), and $5,735 (2009)
|
13,671
|
9,392
|
||||||
Inventory
|
55,635
|
61,719
|
||||||
Advances for inventory
|
9,431
|
9,332
|
||||||
Prepaid expenses and other current assets
|
5,061
|
5,404
|
||||||
Total current assets
|
118,879
|
153,728
|
||||||
Property and equipment, net
|
1,150,470
|
964,921
|
||||||
Other assets:
|
||||||||
Restricted cash
|
34,276
|
40,473
|
||||||
Deferred financing costs
|
59,870
|
69,647
|
||||||
Goodwill
|
—
|
2,703
|
||||||
Intangible and other assets, net
|
23,313
|
35,168
|
||||||
Total assets
|
$
|
1,386,808
|
$
|
1,266,640
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
26,434
|
$
|
76,661
|
||||
Accrued expenses
|
48,162
|
30,520
|
||||||
Payables to affiliates
|
710
|
541
|
||||||
Deferred revenue
|
19,150
|
19,911
|
||||||
Current portion of long term debt
|
—
|
2,259
|
||||||
Total current liabilities
|
94,456
|
129,892
|
||||||
Long term debt
|
664,543
|
463,551
|
||||||
Employee benefit obligations
|
4,727
|
4,499
|
||||||
Derivative liabilities
|
60,819
|
49,755
|
||||||
Deferred revenue
|
3,875
|
2,549
|
||||||
Other non-current liabilities
|
22,970
|
20,602
|
||||||
Total non-current liabilities
|
756,934
|
540,956
|
||||||
Stockholders’ equity:
|
||||||||
Preferred Stock of $0.0001 par value. 100,000,000 shares authorized and none issued and outstanding at December 31, 2010 and 2009:
|
||||||||
Series A Preferred Convertible Stock of $0.0001 par value. One share authorized and none issued and outstanding at December 31, 2010 and 2009
|
—
|
—
|
||||||
Voting Common Stock of $0.0001 par value. 865,000,000 shares authorized; 290,683,000 and 274,384,000 shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively
|
29
|
27
|
||||||
Nonvoting Common Stock of $0.0001 par value. 135,000,000 shares authorized; 19,276,000 and 16,750,000 shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively
|
2
|
2
|
||||||
Additional paid-in capital
|
736,455
|
700,814
|
||||||
Accumulated other comprehensive loss
|
(268
|
) |
(1,718
|
)
|
||||
Retained deficit
|
(200,800
|
) |
(103,333
|
)
|
||||
Total stockholders’ equity
|
535,418
|
595,792
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,386,808
|
$
|
1,266,640
|
Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
Revenue:
|
||||||||||||
Service revenue
|
$
|
50,937
|
$
|
50,228
|
$
|
61,794
|
||||||
Subscriber equipment sales
|
17,004
|
14,051
|
24,261
|
|||||||||
Total revenue
|
67,941
|
64,279
|
86,055
|
|||||||||
Operating expenses:
|
||||||||||||
Cost of services (exclusive of depreciation, amortization and accretion shown separately below)
|
31,172
|
36,204
|
37,132
|
|||||||||
Cost of subscriber equipment sales:
|
||||||||||||
Cost of subscriber equipment sales
|
13,182
|
9,881
|
17,921
|
|||||||||
Reduction in the value of equipment
|
10,862
|
913
|
405
|
|||||||||
Total cost of subscriber equipment sales
|
24,044
|
10,794
|
18,326
|
|||||||||
Marketing, general, and administrative
|
41,827
|
49,210
|
61,351
|
|||||||||
Reduction in the value of assets
|
3,249
|
—
|
—
|
|||||||||
Depreciation, amortization and accretion
|
27,418
|
21,862
|
26,956
|
|||||||||
Total operating expenses
|
127,710
|
118,070
|
143,765
|
|||||||||
Operating loss
|
(59,769
|
)
|
(53,791
|
)
|
(57,710
|
)
|
||||||
Other income (expense):
|
||||||||||||
Gain on extinguishment of debt
|
—
|
—
|
41,411
|
|||||||||
Interest income
|
424
|
502
|
4,713
|
|||||||||
Interest expense
|
(5,021
|
)
|
(6,730
|
)
|
(5,733
|
)
|
||||||
Derivative loss
|
(29,975
|
)
|
(15,585
|
)
|
(3,259
|
)
|
||||||
Other
|
(2,730
|
)
|
665
|
(4,497
|
)
|
|||||||
Total other income (expense)
|
(37,302
|
)
|
(21,148
|
)
|
32,635
|
|||||||
Loss before income taxes
|
(97,071
|
)
|
(74,939
|
)
|
(25,075
|
)
|
||||||
Income tax expense (benefit)
|
396
|
(16
|
)
|
(2,283
|
)
|
|||||||
Net loss
|
$
|
(97,467
|
)
|
$
|
(74,923
|
)
|
$
|
(22,792
|
)
|
|||
Loss per common share:
|
||||||||||||
Basic
|
$
|
(0.34
|
)
|
$
|
(0.58
|
)
|
$
|
(0.27
|
)
|
|||
Diluted
|
(0.34
|
)
|
(0.58
|
)
|
(0.27
|
)
|
||||||
Weighted-average shares outstanding:
|
||||||||||||
Basic
|
285,316
|
128,130
|
85,478
|
|||||||||
Diluted
|
285,316
|
128,130
|
85,478
|
Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
Net loss
|
$
|
(97,467
|
)
|
$
|
(74,923
|
)
|
$
|
(22,792
|
)
|
|||
Other comprehensive loss:
|
||||||||||||
Minimum pension liability adjustment
|
(84
|
)
|
407
|
(3,516
|
)
|
|||||||
Net foreign currency translation adjustment
|
1,534
|
4,179
|
(6,199
|
)
|
||||||||
Total comprehensive loss
|
$
|
(96,017
|
)
|
$
|
(70,337
|
)
|
$
|
(32,507
|
)
|
Common
Shares
|
Common
Stock
Amount
|
Preferred
Shares
|
Preferred
Stock
Amount
|
Additional
Paid-In
Capital
|
Accumulated
Other
Comprehensive
Loss
|
Retained
(Deficit)
|
Total
|
|||||||||||||||||||||||||
Balances – December 31, 2007
|
83,693
|
$
|
8
|
—
|
$
|
—
|
$
|
407,743
|
$
|
3,411
|
$
|
(5,618
|
)
|
$
|
405,544
|
|||||||||||||||||
Conversion of Notes
|
25,811
|
3
|
—
|
—
|
6,524
|
—
|
—
|
6,527
|
||||||||||||||||||||||||
Issuance of restricted stock awards and recognition of stock-based compensation
|
2,051
|
—
|
—
|
—
|
12,608
|
—
|
—
|
12,608
|
||||||||||||||||||||||||
Issuance of common stock in relation to Brazil acquisition
|
883
|
—
|
—
|
—
|
6,000
|
—
|
—
|
6,000
|
||||||||||||||||||||||||
Contribution of services
|
—
|
—
|
—
|
—
|
449
|
—
|
—
|
449
|
||||||||||||||||||||||||
Issuance of common stock under the Share Loan Facility, net
|
24,168
|
3
|
—
|
—
|
520
|
—
|
—
|
523
|
||||||||||||||||||||||||
Issuance of convertible notes, net of deferred taxes of $22,417 and issuance costs of $1,762
|
—
|
—
|
—
|
—
|
29,978
|
—
|
—
|
29,978
|
||||||||||||||||||||||||
Adoption of accounting guidance related to share loan agreement
|
—
|
—
|
—
|
—
|
16,275
|
—
|
—
|
16,275
|
||||||||||||||||||||||||
Other comprehensive loss
|
—
|
—
|
—
|
—
|
—
|
(9,715
|
)
|
—
|
(9,715
|
)
|
||||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
(22,792
|
)
|
(22,792
|
)
|
||||||||||||||||||||||
Balances – December 31, 2008
|
136,606
|
$
|
14
|
—
|
$
|
—
|
$
|
480,097
|
$
|
(6,304
|
)
|
$
|
(28,410
|
)
|
$
|
445,397
|
||||||||||||||||
Issuance of restricted stock awards and recognition of stock-based compensation
|
7,112
|
—
|
—
|
10,341
|
—
|
—
|
10,341
|
|||||||||||||||||||||||||
Conversion of Revolving Credit Facility to Common Shares
|
10,000
|
1
|
—
|
—
|
7,799
|
—
|
—
|
7,800
|
||||||||||||||||||||||||
Conversion of Term Loan and Revolving Credit Facility to Preferred Series A Stock (net of offering costs)
|
—
|
—
|
1
|
—
|
180,052
|
—
|
—
|
180,053
|
||||||||||||||||||||||||
Conversion of Preferred Series A Stock to Common Shares
|
126,174
|
13
|
(1
|
)
|
—
|
—
|
—
|
—
|
12
|
|||||||||||||||||||||||
Issuance of common stock to Thermo
|
1,391
|
—
|
—
|
—
|
1,000
|
—
|
—
|
1,000
|
||||||||||||||||||||||||
Contribution of services
|
—
|
—
|
—
|
—
|
337
|
—
|
—
|
337
|
||||||||||||||||||||||||
Warrants issued associated with Subordinated loan
|
—
|
—
|
—
|
—
|
5,215
|
—
|
—
|
5,215
|
||||||||||||||||||||||||
Common stock issued in connection with conversions of 8% Notes
|
10,175
|
1
|
—
|
—
|
10,473
|
—
|
—
|
10,474
|
||||||||||||||||||||||||
Issuance of common stock in connection with interest payments related to 8% Notes
|
246
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Return of common stock under share loan facility
|
(6,868
|
)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||
Issuance of stock in connection with acquisition
|
6,298
|
—
|
—
|
—
|
5,500
|
—
|
—
|
5,500
|
||||||||||||||||||||||||
Other comprehensive income
|
—
|
—
|
—
|
—
|
—
|
4,586
|
—
|
4,586
|
||||||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
(74,923
|
)
|
(74,923
|
)
|
||||||||||||||||||||||
Balances – December 31, 2009
|
291,134
|
$
|
29
|
—
|
$
|
—
|
$
|
700,814
|
$
|
(1,718
|
)
|
$
|
(103,333
|
)
|
$
|
595,792
|
||||||||||||||||
Issuance of restricted stock awards and recognition of stock-based compensation
|
4,183
|
1
|
—
|
—
|
1,269
|
—
|
—
|
1,270
|
||||||||||||||||||||||||
Contribution of services
|
—
|
—
|
—
|
—
|
168
|
—
|
—
|
168
|
||||||||||||||||||||||||
Warrants issued associated with Contingent Equity Agreement
|
—
|
—
|
—
|
—
|
11,940
|
—
|
—
|
11,940
|
||||||||||||||||||||||||
Common stock issued in connection with conversions of 8% Notes
|
3,246
|
—
|
—
|
—
|
3,415
|
—
|
—
|
3,415
|
||||||||||||||||||||||||
Warrants exercised associated with the 8% Notes
|
8,110
|
1
|
—
|
—
|
15,233
|
—
|
—
|
15,234
|
||||||||||||||||||||||||
Conversion of Thermo debt to equity
|
2,526
|
—
|
—
|
—
|
2,426
|
—
|
—
|
2,426
|
||||||||||||||||||||||||
Issuance of stock in connection with contingent consideration
|
760
|
—
|
—
|
—
|
1,190
|
—
|
—
|
1,190
|
||||||||||||||||||||||||
Other comprehensive income
|
—
|
—
|
—
|
—
|
—
|
1,450
|
—
|
1,450
|
||||||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
(97,467
|
)
|
(97,467
|
)
|
||||||||||||||||||||||
Balances – December 31, 2010
|
309,959
|
$
|
31
|
—
|
$
|
—
|
$
|
736,455
|
$
|
(268
|
)
|
(200,800
|
)
|
$
|
535,418
|
Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
$
|
(97,467
|
)
|
$
|
(74,923
|
)
|
$
|
(22,792
|
)
|
|||
Adjustments to reconcile net loss to net cash from operating activities:
|
||||||||||||
Depreciation, amortization, and accretion
|
27,418
|
21,862
|
26,956
|
|||||||||
Stock-based compensation expense
|
878
|
9,947
|
12,482
|
|||||||||
Change in fair value of derivative assets and liabilities
|
29,975
|
15,585
|
3,259
|
|||||||||
Gain on conversion of convertible notes
|
—
|
—
|
(41,411)
|
|||||||||
Provision for bad debts
|
774
|
824
|
1,818
|
|||||||||
Interest income on restricted cash
|
(3
|
)
|
(115
|
)
|
(4,015
|
)
|
||||||
Equity losses in investee
|
927
|
1,928
|
249
|
|||||||||
Amortization of deferred financing costs
|
3,355
|
4,056
|
2,913
|
|||||||||
Impairment of assets
|
16,014
|
913
|
405
|
|||||||||
Non-cash expenses related to debt conversion
|
—
|
—
|
508
|
|||||||||
Other, net
|
164
|
669
|
(870
|
)
|
||||||||
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||||||
Accounts receivable
|
(5,201
|
)
|
1,405
|
(128
|
)
|
|||||||
Inventory
|
(1,402
|
)
|
4,057
|
(14,111
|
)
|
|||||||
Prepaid expenses and other current assets
|
526
|
895
|
2,137
|
|||||||||
Other assets
|
(4,217
|
)
|
(4,704
|
)
|
(1,805
|
)
|
||||||
Accounts payable
|
(155
|
)
|
(8,584
|
)
|
6,825
|
|||||||
Payables to affiliates
|
163
|
(2,967
|
)
|
2,261
|
||||||||
Accrued expenses and employee benefit obligations
|
2,953
|
8,348
|
(5,123
|
)
|
||||||||
Other non-current liabilities
|
1,428
|
796
|
(965
|
)
|
||||||||
Deferred revenue
|
532
|
1,585
|
822
|
|||||||||
Net cash used in operating activities
|
(23,338
|
)
|
(18,423
|
)
|
(30,585
|
)
|
||||||
Cash flows from investing activities:
|
||||||||||||
Second-generation satellites, ground and related launch costs
|
(201,124
|
)
|
(321,827
|
)
|
(274,130
|
)
|
||||||
Property and equipment additions
|
(7,286
|
)
|
(2,271
|
)
|
(11,956
|
)
|
||||||
Proceeds from sale of property and equipment
|
—
|
—
|
141
|
|||||||||
Investment in businesses
|
(1,110
|
)
|
(1,823
|
)
|
(2,620
|
)
|
||||||
Cash acquired on purchase of subsidiary
|
—
|
—
|
1,839
|
|||||||||
Restricted cash
|
4,129
|
14,229
|
28,145
|
|||||||||
Net cash used in investing activities
|
(205,391
|
)
|
(311,692
|
)
|
(258,581
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Borrowings from long term debt
|
—
|
—
|
100,000
|
|||||||||
Proceeds from revolving credit loan, net
|
—
|
7,750
|
16,050
|
|||||||||
Borrowings from 5.75% Notes
|
—
|
—
|
150,000
|
|||||||||
Borrowings from 8.00% Notes
|
—
|
55,000
|
—
|
|||||||||
Borrowings from Facility Agreement
|
188,417
|
371,219
|
—
|
|||||||||
Borrowings from subordinated loan agreement
|
—
|
25,000
|
—
|
|||||||||
Borrowings under short-term loan
|
—
|
2,259
|
—
|
|||||||||
Deferred financing cost payments
|
(70
|
)
|
(63,047
|
)
|
(4,893
|
)
|
||||||
Payments for interest rate cap instrument
|
—
|
(12,425
|
)
|
—
|
||||||||
Payments related to interest rate swap derivative margin account
|
—
|
—
|
(9,144
|
)
|
||||||||
Proceeds from exercise of warrants, net
|
6,249
|
—
|
—
|
|||||||||
Issuance of common stock
|
74
|
1,000
|
520
|
|||||||||
Net cash from financing activities
|
194,670
|
386,756
|
252,533
|
|||||||||
Effect of exchange rate changes on cash
|
(805
|
)
|
(1,117
|
)
|
11,436
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
(34,864
|
)
|
55,524
|
(25,197
|
)
|
|||||||
Cash and cash equivalents, beginning of period
|
67,881
|
12,357
|
37,554
|
|||||||||
Cash and cash equivalents, end of period
|
$
|
33,017
|
$
|
67,881
|
$
|
12,357
|
||||||
Supplemental disclosure of cash flow information:
|
||||||||||||
Cash paid for:
|
||||||||||||
Interest
|
$
|
17,193
|
$
|
15,379
|
$
|
15,987
|
||||||
Income taxes
|
$
|
111
|
$
|
308
|
$
|
1,001
|
||||||
Supplemental disclosure of non-cash financing and investing activities:
|
||||||||||||
Conversion of debt to Series A Convertible Preferred Stock
|
$
|
—
|
$
|
180,177
|
$
|
—
|
||||||
Accrued launch costs and second-generation satellites costs
|
$
|
(37,590
|
)
|
$
|
58,055
|
$
|
14,762
|
|||||
Conversion of note receivable to equity in investee company
|
$
|
—
|
$
|
7,500
|
$
|
—
|
||||||
Vendor financing of second-generation Globalstar System
|
$
|
—
|
$
|
—
|
$
|
57,200
|
||||||
Capitalization of accrued interest for second-generation satellites and launch costs
|
$
|
5,086
|
$
|
7,185
|
$
|
15,964
|
||||||
Capitalized interest paid in common stock and 8% Notes
|
$
|
3,790
|
$
|
7,257
|
$
|
—
|
||||||
Capitalization of the accretion of debt discount
|
$
|
7,085
|
$
|
5,776
|
$
|
5,934
|
||||||
Amortization of prepaid finance costs
|
$
|
16,171
|
$
|
8,103
|
$
|
1,766
|
||||||
Conversion of Convertible Senior Notes into common stock
|
$
|
6,335
|
$
|
10,738
|
$
|
78,196
|
|
•
|
two-way voice communication and data transmissions (which we call “Duplex”) between mobile or fixed devices;
|
|
•
|
one-way data transmissions between a mobile or fixed device that transmits its location or other telemetry information and a central monitoring station (which includes the SPOT family and Simplex products).
|
|
•
|
Duplex two-way transmission products;
|
|
•
|
SPOT family of products (“SPOT”);
|
|
•
|
Simplex one-way transmission products
|
Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
Balance at beginning of period
|
$
|
5,735
|
$
|
5,205
|
$
|
4,177
|
||||||
Provision, net of recoveries
|
519
|
824
|
1,818
|
|||||||||
Write-offs
|
(283
|
)
|
(294
|
)
|
(790
|
)
|
||||||
Balance at end of period
|
$
|
5,971
|
$
|
5,735
|
$
|
5,205
|
Globalstar System:
|
|
|
Space component
|
6.5 years from commencement of service for the 8 spare satellites
|
|
15 years from the commencement of service for the second-generation satellites
|
||
Ground component
|
Up to periods of 15 years from commencement of service
|
|
Furniture, fixtures & equipment
|
3 to 10 years
|
|
Leasehold improvements
|
Shorter of lease term or the estimated useful lives of the improvements
|
|
Buildings
|
18 years
|
December 31,
|
||||||||
|
2010
|
2009
|
||||||
Globalstar System:
|
||||||||
Space component
|
$ | 171,888 | $ | 132,982 | ||||
Ground component
|
49,818 | 31,623 | ||||||
Construction in progress:
|
||||||||
Second-generation satellites, ground and related launch costs
|
994,156 | 852,466 | ||||||
Other
|
2,794 | 1,223 | ||||||
Furniture and office equipment
|
25,621 | 20,316 | ||||||
Land and buildings
|
4,359 | 4,308 | ||||||
Leasehold improvements
|
1,406 | 823 | ||||||
|
1,250,042 | 1,043,741 | ||||||
Accumulated depreciation
|
(99,572 | ) | (78,820 | ) | ||||
|
$ | 1,150,470 | $ | 964,921 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
Interest Capitalized
|
$ | 47,122 | $ | 35,887 |
December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Depreciation Expense
|
$ | 24,435 | $ | 21,805 | $ | 26,775 |
December 31,
2010
|
December 31,
2009
|
|||||||
Facility Agreement
|
$
|
559,637
|
$
|
371,219
|
||||
8.00% Convertible Senior Unsecured Notes
|
21,014
|
17,396
|
||||||
5.75% Convertible Senior Unsecured Notes
|
58,465
|
53,359
|
||||||
Subordinated loan
|
25,427
|
21,577
|
||||||
Total long term debt
|
$
|
664,543
|
$
|
463,551
|
|
•
|
a $563.3 million tranche for future payments and to reimburse the Company for amounts it previously paid to Thales Alenia Space for construction of its second-generation satellites. Such reimbursed amounts will be used by the Company (a) to make payments to the Launch Provider for launch services, Hughes for ground network equipment, software and satellite interface chips and Ericsson for ground system upgrades, (b) to provide up to $150 million for the Company’s working capital and general corporate purposes and (c) to pay a portion of the insurance premium to COFACE; and
|
|
•
|
a $23 million tranche that will be used to make payments to the Launch Provider for launch services and to pay a portion of the insurance premium to COFACE.
|
Fair value of compound embedded derivative
|
$
|
23,542
|
||
Fair value of Warrants
|
12,791
|
|||
Debt
|
18,667
|
|||
Face Value of 8.00% Notes
|
$
|
55,000
|
|
•
|
Any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have beneficial ownership of all shares that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of voting stock representing 50% of more (or if such person is Thermo Capital Partners LLC, 70% or more) of the total voting power of all outstanding voting stock of the Company;
|
|
•
|
The Company consolidates with, or merges with or into, another person or the Company sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any person;
|
|
•
|
The adoption of a plan of liquidation or dissolution of the Company; or
|
|
•
|
The Company’s common stock (or other common stock into which the Notes are then convertible) is not listed on a United States national securities exchange or approved for quotation and trading on a national automated dealer quotation system or established automated over-the-counter trading market in the United States.
|
Effective Date
Make Whole Premium (Increase in Applicable Base Conversion Rate)
|
|||||||||||||||
Stock Price on
Effective Date
|
April 15, 2008
|
April 1, 2009
|
April 1, 2010
|
April 1, 2011
|
April 1, 2012
|
April 1, 2013
|
|||||||||
$
|
4.15
|
74.7818
|
74.7818
|
74.7818
|
74.7818
|
74.7818
|
74.7818
|
||||||||
$
|
5.00
|
74.7818
|
64.8342
|
51.4077
|
38.9804
|
29.2910
|
33.8180
|
||||||||
$
|
6.00
|
74.7818
|
63.9801
|
51.4158
|
38.2260
|
24.0003
|
0.4847
|
||||||||
$
|
7.00
|
63.9283
|
53.8295
|
42.6844
|
30.6779
|
17.2388
|
0.0000
|
||||||||
$
|
8.00
|
55.1934
|
46.3816
|
36.6610
|
26.0029
|
14.2808
|
0.0000
|
||||||||
$
|
10.00
|
42.8698
|
36.0342
|
28.5164
|
20.1806
|
11.0823
|
0.0000
|
||||||||
$
|
20.00
|
18.5313
|
15.7624
|
12.4774
|
8.8928
|
4.9445
|
0.0000
|
||||||||
$
|
30.00
|
10.5642
|
8.8990
|
7.1438
|
5.1356
|
2.8997
|
0.0000
|
||||||||
$
|
40.00
|
6.6227
|
5.5262
|
4.4811
|
3.2576
|
1.8772
|
0.0000
|
||||||||
$
|
50.00
|
4.1965
|
3.5475
|
2.8790
|
2.1317
|
1.2635
|
0.0000
|
||||||||
$
|
75.00
|
1.4038
|
1.1810
|
0.9358
|
0.6740
|
0.4466
|
0.0000
|
||||||||
$
|
100.00
|
0.4174
|
0.2992
|
0.1899
|
0.0985
|
0.0663
|
0.0000
|
|
•
|
If the actual stock price on the effective date is between two stock prices in the table or the actual effective date is between two effective dates in the table, the amount of the base conversion rate adjustment will be determined by straight-line interpolation between the adjustment amounts set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day year;
|
|
•
|
If the actual stock price on the effective date exceeds $100.00 per share of the Company’s common stock (subject to adjustment), no adjustment to the base conversion rate will be made; and
|
|
•
|
If the actual stock price on the effective date is less than $4.15 per share of the Company’s common stock (subject to adjustment), no adjustment to the base conversion rate will be made.
|
|
•
|
To pay, within one business day after the relevant payment date, to the Company an amount equal to any cash dividends that the Company pays on the Borrowed Shares; and
|
|
•
|
To pay or deliver to the Company, upon termination of the loan of Borrowed Shares, any other distribution, in liquidation or otherwise, that the Company makes on the Borrowed Shares.
|
2011
|
$
|
—
|
||
2012
|
32,683
|
|||
2013
|
57,699
|
|||
2014
|
61,168
|
|||
2015
|
64,806
|
|||
Thereafter
|
490,534
|
|||
Total
|
$
|
706,890
|
The Facility Agreement requires that the Company fund the convertible note reserve account by March 1, 2012 equal to 50% and by March 1, 2013 equal to 100% of the notional purchase price of the 5.75% Notes. As of December 31, 2010 the estimated notional purchase price was $71.8 million. However, failure to fund this account if excess cash flow, as defined, is not available is not considered an event of default under the Facility Agreement.
|
December 31, 2010
|
December 31, 2009
|
|||||||||
|
Balance Sheet
Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
||||||
Interest rate cap
|
Intangible and other assets, net
|
$ | 1,000 |
Intangible and other assets, net
|
$ | 6,801 | ||||
Compound embedded conversion option with 8.00% Notes
|
Derivative liabilities
|
(23,008 | ) |
Derivative liabilities
|
(14,235 | ) | ||||
Warrants issued with 8.00% Notes
|
Derivative liabilities
|
(29,924 | ) |
Derivative liabilities
|
(27,711 | ) | ||||
Warrants issued in conjunction with contingent equity agreement
|
Derivative liabilities
|
(7,887 | ) |
Derivative liabilities
|
(7,809 | ) | ||||
Total
|
$ | (59,819 | ) | (42,954 | ) |
Year ended December 31,
|
||||||||||
|
2010
|
2009
|
||||||||
|
Location of
Loss
recognized in
Statement of
Operations
|
Amount of
Loss
recognized on
Statement of
Operations
|
Location of
Gain (loss)
recognized in
Statement of
Operations
|
Amount of
Gain (loss)
recognized on
Statement of
Operations
|
||||||
Interest rate cap
|
Derivative loss, net
|
$ | (5,801 | ) |
Derivative loss, net
|
$ | (5,624 | ) | ||
Compound embedded conversion option with 8.00% Notes
|
Derivative loss, net
|
(10,676 | ) |
Derivative loss, net
|
2,997 | |||||
Warrants issued with 8.00% Notes
|
Derivative loss, net
|
(11,197 | ) |
Derivative loss, net
|
(14,920 | ) | ||||
Warrants issued in conjunction with contingent equity agreement
|
Derivative loss, net
|
(2,301 | ) |
Derivative loss, net
|
1,962 | |||||
Total
|
$ | (29,975 | ) |
|
$ | (15,585 | ) |
Level 1:
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
Level 2:
|
Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;
|
Level 3:
|
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
|
Fair Value Measurements at December 31, 2010 using
|
||||||||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
Balance |
|||||||||||||
Other assets:
|
||||||||||||||||
Interest rate cap
|
$ | — | $ | 1,000 | $ | — | $ | 1,000 | ||||||||
Total other assets measured at fair value
|
— | $ | 1,000 | — | 1,000 | |||||||||||
Other non-current liabilities:
|
||||||||||||||||
Liability for contingent consideration
|
— | — | (6,019 | ) | (6,019 | ) | ||||||||||
Compound embedded conversion option with 8.00% Notes
|
— | — | (23,008 | ) | (23,008 | ) | ||||||||||
Warrants issued with 8.00% Notes
|
— | — | (29,924 | ) | (29,924 | ) | ||||||||||
Warrants issued with contingent equity agreement
|
— | — | (7,887 | ) | (7,887 | ) | ||||||||||
Total non-current liabilities measured at fair value
|
$ | — | $ | — | $ | (66,838 | ) | $ | (66,838 | ) |
Fair Value Measurements at December 31, 2009 using
|
||||||||||||||||
(Level 1)
|
(Level 2) | (Level 3) |
Total
Balance
|
|||||||||||||
Other assets: | ||||||||||||||||
Interest rate cap
|
$ | — | $ | 6,801 | $ | — | $ | 6,801 | ||||||||
Total other assets measured at fair value
|
— | $ | 6,801 | — | 6,801 | |||||||||||
Other non-current liabilities:
|
||||||||||||||||
Compound embedded conversion option with 8.00% Notes
|
— | — | (14,235 | ) | (14,235 | ) | ||||||||||
Warrants issued with 8.00% Notes
|
— | — | (27,711 | ) | (27,711 | ) | ||||||||||
Warrants issued with contingent equity agreement
|
— | — | (7,809 | ) | (7,809 | ) | ||||||||||
Total non-current liabilities measured at fair value
|
$ | — | $ | — | $ | (49,755 | ) | $ | (49,755 | ) |
Balance at December 31, 2009
|
$
|
(49,755
|
)
|
|
Contingent equity liability issued in 2010
|
(9,717
|
)
|
||
Derivative adjustment related to conversions and exercises
|
10,192
|
|||
Contingent equity liability reclassed to equity
|
11,940
|
|||
Contingent consideration
|
(6,019
|
)
|
||
Unrealized loss, included in derivative loss, net
|
(23,479
|
)
|
||
Balance at December 31, 2010
|
$
|
(66,838
|
)
|
Balance at December 31, 2008
|
$
|
—
|
||
Issuance of compound embedded conversion option and warrant liabilities
|
(42,333
|
)
|
||
Derivative adjustment related to conversions
|
2,539
|
|||
Unrealized loss, included in derivative loss, net
|
(9,961
|
)
|
||
Balance at December 31, 2009
|
$
|
(49,755
|
)
|
Fair Value Measurements at December 31, 2010 using
|
||||||||||||||||
Quoted
Prices
|
||||||||||||||||
in Active
|
Significant
|
|||||||||||||||
Markets for
|
Other
|
Significant
|
||||||||||||||
Identical
|
Observable
|
Unobservable
|
||||||||||||||
Instruments
|
Inputs
|
Inputs
|
||||||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total Losses
|
|||||||||||||
Other assets:
|
||||||||||||||||
Investment in Open Range Communications
|
$ | — | $ | — | $ | — | $ | 1,903 | ||||||||
Goodwill
|
— | — | — | 2,703 | ||||||||||||
Property and equipment, net
|
— | — | 1,150,470 | 450 | ||||||||||||
Prepaid expenses and other current assets
|
— | — | 5,061 | 97 | ||||||||||||
Total other assets measured at fair value
|
$ | — | $ | — | $ | 1,155,531 | $ | 5,153 |
December 18,
2009
|
||||
Accounts receivable
|
$
|
1,176
|
||
Inventory
|
2,897
|
|||
Property and equipment
|
931
|
|||
Intangible Assets
|
7,600
|
|||
Goodwill
|
2,703
|
|||
Total assets acquired
|
$
|
15,307
|
||
Accounts payable and other accrued liabilities
|
2,311
|
|||
Total liabilities assumed
|
$
|
2,311
|
||
Net assets acquired
|
$
|
12,996
|
December 31, 2010
|
December 31, 2009
|
|||||||||||||||||||||||
Gross
|
Accumulated
|
Net
|
Gross
|
Accumulated
|
Net
|
|||||||||||||||||||
Amount
|
Amortization
|
Balance
|
Amount
|
Amortization
|
Balance
|
|||||||||||||||||||
Developed technology
|
$ | 5,300 | $ | (1,062 | ) | $ | 4,238 | $ | 5,300 | $ | — | $ | 5,300 | |||||||||||
Customer relationships
|
2,100 | (242 | ) | 1,858 | 2,100 | — | 2,100 | |||||||||||||||||
Trade name
|
200 | (200 | ) | — | 200 | — | 200 | |||||||||||||||||
Total
|
$ | 7,600 | $ | (1,504 | ) | $ | 6,096 | $ | 7,600 | $ | — | $ | 7,600 |
Years Ending December 31,
|
||||
2011
|
$ | 123,548 | ||
2012
|
31,228 | |||
2013
|
4,375 | |||
2014
|
793 | |||
2015
|
— | |||
Thereafter
|
— | |||
Total purchase commitments
|
$ | 159,944 |
Years Ending December 31,
|
||||
2011
|
$
|
2,053
|
||
2012
|
1,576
|
|||
2013
|
1,289
|
|||
2014
|
733
|
|||
2015
|
657
|
|||
Thereafter
|
1,623
|
|||
Total minimum lease payments
|
$
|
7,931
|
December 31,
|
||||||||
|
2010
|
2009
|
||||||
Accrued interest
|
$
|
8,938
|
$
|
7,434
|
||||
Accrued compensation and benefits
|
5,562
|
3,404
|
||||||
Accrued property and other taxes
|
4,424
|
3,939
|
||||||
Customer deposits
|
3,060
|
2,581
|
||||||
Accrued professional fees
|
1,692
|
1,641
|
||||||
Accrued earnout
|
2,708
|
1,910
|
||||||
Accrued commissions
|
441
|
391
|
||||||
Accrued telecommunications expenses
|
221
|
478
|
||||||
Warranty reserve
|
56
|
150
|
||||||
Accrued second-generation construction and launch costs
|
16,460
|
4,109
|
||||||
Other accrued expenses
|
4,600
|
4,483
|
||||||
|
$
|
48,162
|
$
|
30,520
|
Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
Balance at beginning of period
|
$
|
150
|
$
|
101
|
$
|
235
|
||||||
Provision
|
109
|
96
|
67
|
|
||||||||
Utilization
|
(203
|
)
|
(47
|
)
|
(201
|
)
|
||||||
Balance at end of period
|
$
|
56
|
$
|
150
|
$
|
101
|
Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
General and administrative expenses
|
$ | 371 | $ | 146 | $ | 219 | ||||||
Non-cash expenses
|
169 | 337 | 449 |
|
December 31,
|
|||||||
|
2010
|
2009
|
||||||
Purchases
|
$ | 2,241 | $ | 3,991 |
For the Year Ended December 31,
|
||||||||
|
2010
|
2009
|
||||||
Change in projected benefit obligation: | ||||||||
Projected benefit obligation, beginning of year
|
$
|
14,434
|
$
|
13,453
|
||||
Service cost
|
78
|
50
|
||||||
Interest cost
|
789
|
755
|
||||||
Actuarial (gain) loss
|
762
|
983
|
||||||
Benefits paid
|
(788
|
)
|
(807
|
)
|
||||
Projected benefit obligation, end of year
|
$
|
15,275
|
$
|
14,434
|
||||
Change in fair value of plan assets:
|
||||||||
Fair value of plan assets, beginning of year
|
$
|
9,935
|
$
|
8,671
|
||||
Actual return (loss) on plan assets
|
1,116
|
1,728
|
||||||
Employer contributions
|
285
|
343
|
||||||
Benefits paid
|
(788
|
)
|
(807
|
)
|
||||
Fair value of plan assets, end of year
|
$
|
10,548
|
$
|
9,935
|
||||
Funded status, end of year- net liability
|
$
|
(4,727
|
)
|
$
|
(4,499
|
)
|
For the Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
Net periodic benefit cost: | ||||||||||||
Service cost
|
$ | 78 | $ | 50 | $ | — | ||||||
Interest cost
|
789 | 755 | 759 | |||||||||
Expected return on plan assets
|
(723 | ) | (634 | ) | (843 | ) | ||||||
Amortization of unrecognized net loss
|
285 | 296 | 16 | |||||||||
Total net periodic benefit cost
|
$ | 429 | $ | 467 | $ | (68 | ) |
For the Year Ended December 31,
|
||||||||
|
2010
|
2009
|
||||||
Amounts recognized: | ||||||||
Funded status, end of year- net liability
|
$
|
(4,727
|
)
|
$
|
(4,499
|
)
|
||
Unrecognized net actuarial loss in accumulated other comprehensive loss
|
4,857
|
4,773
|
||||||
Net amount recognized in retained earnings
|
$
|
130
|
$
|
274
|
For the Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
Benefit obligation assumptions: | ||||||||||||
Discount rate
|
5.25 | % | 5.60 | % | 5.75 | % | ||||||
Rate of compensation increase
|
N/A | N/A | N/A | |||||||||
Net period benefit cost assumptions:
|
||||||||||||
Discount rate
|
5.60 | % | 5.75 | % | 6.00 | % | ||||||
Expected rate of return on plan assets
|
7.50 | % | 7.50 | % | 7.50 | % | ||||||
Rate of compensation increase
|
N/A | N/A | % | N/A |
At December 31,
|
||||||||
2010
|
2009
|
|||||||
Equity securities
|
58 | % | 57 | % | ||||
Debt securities
|
29 | % | 40 | % | ||||
Other investments
|
13 | % | 3 | % | ||||
Total
|
100 | % | 100 | % |
Years Ending December 31,
|
||||
2011
|
$ | 846 | ||
2012
|
868 | |||
2013
|
890 | |||
2014
|
904 | |||
2015
|
893 | |||
2016 – 2020
|
$ | 4,580 |
Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
Current:
|
||||||||||||
Federal tax (benefit)
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
State tax
|
73
|
85
|
21
|
|||||||||
Foreign tax
|
323
|
(101
|
)
|
(1,302
|
)
|
|||||||
Total
|
396
|
(16
|
)
|
(1,281
|
)
|
|||||||
Deferred:
|
||||||||||||
Federal and state tax (benefit)
|
—
|
—
|
|
(2,763
|
)
|
|||||||
Foreign tax (benefit)
|
—
|
—
|
1,761
|
|
||||||||
Total
|
—
|
—
|
|
(1,002
|
)
|
|||||||
Income tax expense (benefit)
|
$
|
396
|
$
|
(16
|
)
|
$
|
(2,283
|
)
|
Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
U.S. income (loss)
|
$
|
(90,865
|
)
|
$
|
(69,490
|
)
|
$
|
(6,628
|
)
|
|||
Foreign income (loss)
|
(6,206
|
)
|
(5,449
|
)
|
(18,447
|
)
|
||||||
Total income (loss) before income taxes
|
$
|
(97,071
|
)
|
$
|
(74,939
|
)
|
$
|
(25,075
|
)
|
December 31,
|
||||||||
|
2010
|
2009
|
||||||
Federal and foreign net operating loss and credit carry-forwards
|
$
|
173,338
|
$
|
134,756
|
||||
Property and equipment and other long term
|
34
|
3,786
|
||||||
Accruals and reserves
|
9,229
|
9,855
|
||||||
Deferred tax assets before valuation allowance
|
182,601
|
148,397
|
||||||
Valuation allowance
|
(182,601
|
)
|
(148,397
|
)
|
||||
Net deferred income tax assets
|
$
|
—
|
$
|
—
|
Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
Provision at U.S. statutory rate of 35%
|
$
|
(33,975
|
)
|
$
|
(26,227
|
)
|
$
|
(6,106
|
)
|
|||
State income taxes, net of federal benefit
|
(5,378
|
)
|
(4,086
|
)
|
60
|
|
||||||
Change in valuation allowance
|
34,205
|
25,776
|
1,698
|
|||||||||
Effect of foreign income tax at various rates
|
691
|
594
|
759
|
|||||||||
Permanent differences
|
(231
|
)
|
579
|
1,322
|
||||||||
Other (including amounts related to prior year tax matters)
|
5,084
|
3,348
|
|
(16
|
)
|
|||||||
Total
|
$
|
396
|
|
$
|
(16
|
)
|
$
|
(2,283
|
)
|
2010
|
||||
Gross unrecognized tax benefits at January 1, 2010
|
$
|
78,780
|
||
Gross increases based on tax positions related to current year
|
572
|
|
||
Gross increases based on tax positions related to prior years
|
457
|
|||
Reductions to tax positions related to prior years Audit settlements paid during 2010
|
—
|
|||
Gross unrecognized tax benefits at December 31, 2010
|
$
|
79,809
|
Revenues
|
||||||||||||
Year Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
Service:
|
||||||||||||
United States
|
$
|
31,684
|
$
|
29,994
|
$
|
32,092
|
||||||
Canada
|
11,760
|
12,774
|
19,500
|
|||||||||
Central and South America
|
3,979
|
4,778
|
5,947
|
|||||||||
Europe
|
3,119
|
2,338
|
3,521
|
|||||||||
Others
|
395
|
344
|
734
|
|||||||||
Total service revenue
|
50,937
|
50,228
|
61,794
|
|||||||||
Subscriber equipment:
|
||||||||||||
United States
|
12,038
|
5,395
|
12,513
|
|||||||||
Canada
|
2,599
|
2,815
|
6,886
|
|||||||||
Central and South America
|
1,292
|
1,584
|
2,601
|
|||||||||
Europe
|
1,045
|
800
|
1,895
|
|||||||||
Others
|
30
|
3,457
|
366
|
|||||||||
Total subscriber equipment revenue
|
17,004
|
14,051
|
24,261
|
|||||||||
Total revenue
|
$
|
67,941
|
$
|
64,279
|
$
|
86,055
|
Long-Lived Assets
|
||||||||
December 31,
|
||||||||
|
2010
|
2009
|
||||||
Long-lived assets:
|
||||||||
United States
|
$
|
1,142,618
|
$
|
955,105
|
||||
Central and South America
|
5,125
|
6,879
|
||||||
Canada
|
437
|
650
|
||||||
Europe
|
142
|
26
|
||||||
Others
|
2,148
|
2,261
|
||||||
Total long-lived assets
|
$
|
1,150,470
|
$
|
964,921
|
For the Year Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Risk free interest rate
|
<1
|
% |
<1
|
% | 1–3 | % | ||||||
Expected life (years)
|
4 - 6 | 2-10 | 2-10 | |||||||||
Volatility
|
80 | % | 60-120 | % | 60-120 | % | ||||||
Weighted average grant-date fair value
|
$ | 1.03 | $ | 0.57 | $ | 0.21 |
Weighted Average
|
||||||||
Options
|
Fair Value
|
|||||||
Non-vested at December 31, 2007
|
—
|
—
|
||||||
Granted
|
2,464,744
|
0.22
|
||||||
Vested
|
(520,835
|
)
|
0.21
|
|||||
Forfeited
|
—
|
—
|
||||||
Non-vested at December 31, 2008
|
1,943,909
|
0.23
|
||||||
Granted
|
3,600,000
|
0.55
|
||||||
Vested
|
(2,157,501
|
)
|
0.49
|
|||||
Forfeited
|
(1,264,744
|
)
|
0.24
|
|||||
Non-vested at December 31, 2009
|
2,121,664
|
0.50
|
||||||
Granted
|
2,007,330
|
0.93
|
||||||
Vested
|
(421,664
|
)
|
0.31
|
|||||
Forfeited
|
(31,566
|
)
|
0.83
|
|||||
Non-vested at December 31, 2010
|
3,675,764
|
$
|
0.76
|
|||||
Exercisable at December 31, 2010
|
3,220,000
|
$
|
0.76
|
For the Year Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Cost of services (includes research and development)
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Marketing, general and administrative
|
0.7
|
2.9
|
0.3
|
|||||||||
Total compensation expense
|
0.7
|
2.9
|
0.3
|
|||||||||
Income tax benefit
|
(0.1
|
)
|
(0.3
|
)
|
(0.1
|
)
|
||||||
Total compensation expense, net of tax
|
$
|
0.6
|
$
|
2.6
|
$
|
0.2
|
Weighted Average
|
||||||||
Shares
|
Fair Value
|
|||||||
Outstanding at December 31, 2007
|
1,618,743 | 11.06 | ||||||
Granted
|
2,297,173 | 4.12 | ||||||
Vested
|
(1,387,668 | ) | 3.44 | |||||
Forfeited
|
(44,836 | ) | 9.71 | |||||
Outstanding at December 31,2008
|
2,483,412 | 8.92 | ||||||
Granted
|
9,076,652 | 0.88 | ||||||
Vested
|
(7,818,773 | ) | 0.79 | |||||
Forfeited
|
(179,562 | ) | 8.77 | |||||
Outstanding at December 31, 2009
|
3,561,729 | 6.29 | ||||||
Granted
|
3,271,358 | 1.35 | ||||||
Vested
|
(4,896,726 | ) | 1.33 | |||||
Forfeited
|
(823,499 | ) | 7.18 | |||||
Outstanding at December 31, 2010
|
1,112,862 | $ | 12.94 |
For the Year Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Cost of services (includes research and development)
|
$
|
(0.2
|
)
|
$
|
2.2
|
$
|
2.9
|
|||||
Marketing, general and administrative
|
0.4
|
4.8
|
9.3
|
|||||||||
Total compensation expense
|
0.2
|
7.0
|
12.2
|
|||||||||
Income tax benefit
|
—
|
|
(0.7
|
)
|
(0.6
|
)
|
||||||
Total compensation expense, net of tax
|
$
|
0.2
|
$
|
6.3
|
$
|
11.6
|
December 31,
|
||||||||
|
2010
|
2009
|
||||||
Accumulated minimum pension liability adjustment
|
$
|
(4,857
|
)
|
$
|
(4,773
|
)
|
||
Accumulated net foreign currency translation adjustment
|
4,589
|
3,055
|
||||||
Total accumulated other comprehensive loss
|
$
|
(268
|
)
|
$
|
(1,718
|
)
|
Quarter Ended
|
||||||||||||||||
2010
|
March 31
|
June 30
|
Sept. 30
|
Dec. 31
|
||||||||||||
|
(In thousands, except per share amounts)
|
|||||||||||||||
Total revenue
|
$
|
15,571
|
$
|
17,622
|
$
|
18,223
|
$
|
16,525
|
||||||||
Net loss
|
$
|
(35,642
|
)
|
$
|
(19,249
|
)
|
$
|
(24,493
|
)
|
$
|
(18,083
|
)
|
||||
Basic loss per common share
|
$
|
(0.13
|
)
|
$
|
(0.07
|
)
|
$
|
(0.09
|
)
|
$
|
(0.05
|
)
|
||||
Diluted loss per common share
|
$
|
(0.13
|
)
|
$
|
(0.07
|
)
|
$
|
(0.09
|
)
|
$
|
(0.05
|
)
|
||||
Shares used in basic per share calculations
|
275,370
|
282,080
|
287,502
|
291,818
|
||||||||||||
Shares used in diluted per share calculations
|
275,370
|
282,080
|
287,502
|
291,818
|
2009
|
Quarter Ended
|
|||||||||||||||
|
March 31
|
June 30
|
Sept. 30
|
Dec. 31
|
||||||||||||
|
(In thousands, except per share amounts)
|
|||||||||||||||
Total revenue
|
$
|
15,163
|
$
|
15,716
|
$
|
17,521
|
$
|
15,879
|
||||||||
Net loss
|
$
|
(21,758
|
)
|
$
|
(13,762
|
)
|
$
|
(5,519
|
)
|
$
|
(33,884
|
)
|
||||
Basic loss per common share
|
$
|
(0.20
|
)
|
$
|
(0.12
|
)
|
$
|
(0.04
|
)
|
$
|
(0.22
|
)
|
||||
Diluted loss per common share
|
$
|
(0.20
|
)
|
$
|
(0.12
|
)
|
$
|
(0.04
|
)
|
$
|
(0.22
|
)
|
||||
Shares used in basic per share calculations
|
111,308
|
116,580
|
127,525
|
155,151
|
||||||||||||
Shares used in diluted per share calculations
|
111,308
|
116,580
|
127,525
|
155,151
|
(a)
|
The following documents are filed as part of this report:
|
|
(1)
|
Financial Statements and Reports of Independent Registered Public Accounting Firm
|
Reports of Independent Registered Public Accounting Firm
|
45
|
|
Consolidated balance sheets at December 31, 2010 and 2009
|
46
|
|
Consolidated statements of loss for the years ended December 31, 2010, 2009, and 2008
|
47
|
|
Consolidated statements of comprehensive loss for the years ended December 31, 2010, 2009, and 2008
|
48
|
|
Consolidated statements of ownership equity for the years ended December 31, 2010, 2009, and 2008
|
49
|
|
Consolidated statements of cash flows for the years ended December 31, 2010, 2009, and 2008
|
50
|
|
Notes to consolidated financial statements
|
51
|
|
(2)
|
Financial Statement Schedules
|
|
(3)
|
Exhibits
|
GLOBALSTAR, INC.
|
||
By:
|
||
/s/ P
eter J. Dalton
|
||
Date: March 31, 2011
|
|
|
Peter J. Dalton
|
||
Chief Executive Officer
|
Signature
|
Title
|
|
|
||
/s/ James Monroe III
|
Chairman of the Board | |
James Monroe III
|
||
|
||
/s/ Peter J. Dalton
|
Chief Executive Officer and Director
|
|
Peter J. Dalton
|
(Principal Executive Officer) | |
|
||
/s/ Dirk Wild
|
Senior Vice President and Chief Financial Officer
|
|
Dirk Wild
|
(Principal Financial Officer) | |
/s/ Joseph Barnett
|
Vice President and Chief Accounting Officer
|
|
Joseph Barnett
|
(Principal Accounting Officer)
|
|
/s/ William A. Hasler
|
|
|
William A. Hasler
|
Director | |
/s/ James F. Lynch
|
|
|
James F. Lynch
|
Director | |
/s/ John Kneuer
|
|
|
John Kneuer
|
Director | |
/s/ J. Patrick McIntyre
|
|
|
J. Patrick McIntyre
|
Director | |
/s/ Richard S. Roberts
|
|
|
Richard S. Roberts
|
Director |
Exhibit
Number
|
Description
|
|
2.1*
|
Asset Purchase Agreement among Axonn L.L.C., Spot LLC and Globalstar, Inc. dated December 18, 2009 (Exhibit 2.2 to Form 10-K filed March 12, 2010)
|
|
3.1*
|
Amended and Restated Certificate of Incorporation of Globalstar, Inc. (Exhibit 3.1 to Form 8-K filed September 29, 2009)
|
|
3.2*
|
Amended and Restated Bylaws of Globalstar, Inc. (Exhibit 3.2 to Form 10-Q filed December 18, 2006)
|
|
4.1*
|
Indenture between Globalstar, Inc. and U.S. Bank, National Association as Trustee dated as of April 15, 2008 (Exhibit 4.1 to Form 8-K filed April 16, 2008)
|
|
4.2*
|
First Supplemental Indenture between Globalstar, Inc. and U.S. Bank, National Association as Trustee dated as of April 15, 2008, including Form of Global 5.75% Convertible Senior Note due 2028 (Exhibit 4.2 to Form 8-K filed April 16, 2008)
|
|
4.3*
|
Amendment to First Supplemental Indenture between Globalstar, Inc. and U.S. Bank, National Association as Trustee dated as of December 1, 2008 (Exhibit 4.3 to Form 10-K filed March 31, 2009)
|
|
4.4*
|
Second Supplemental Indenture between Globalstar, Inc. and U.S. Bank, National Association as Trustee dated as of June 19, 2009 (Exhibit 4.1 to Form 8-K filed June 19, 2009)
|
|
4.5*
|
Form of 8.00% Senior Unsecured Convertible Note (Exhibit 4.2 to Form 8-K filed June 17, 2009)
|
|
4.6*
|
Form of Warrant issued June 19, 2009 (Exhibit 4.1 to Form 8-K filed June 17, 2009)
|
|
4.7*
|
Form of Warrant for issuance to Thermo Funding Company LLC pursuant to the Contingent Equity Agreement dated as of June 19, 2009 (Exhibit 4.1 to Form 10-Q filed August 10, 2009)
|
|
4.8*
|
Form of Warrant for issuance to Thermo Funding Company LLC pursuant to the Loan Agreement dated as of June 25, 2009 (Exhibit 4.2 to Form 10-Q filed August 10, 2009)
|
|
4.9*
|
Form of Amendment to Warrant to Purchase Common Stock (Exhibit 4.1 to Current Report on Form 8-K filed June 4, 2010)
|
|
10.1*†
|
Satellite Products Supply Agreement by and between QUALCOMM Incorporated and New Operating Globalstar LLC dated as of April 13, 2004 (Exhibit 10.6 to Form S-1, Amendment No. 4, filed October 17, 2006)
|
|
10.2*†
|
Amendment No. 1 to Satellite Products Supply Agreement by and between QUALCOMM Incorporated and Globalstar LLC dated as of May 25, 2005 (Exhibit 10.7 to Form S-1, Amendment No. 4, filed October 17, 2006)
|
10.3*†
|
Amendment No. 2 to Satellite Products Supply Agreement by and between QUALCOMM Incorporated and Globalstar LLC dated as of May 25, 2005 (Exhibit 10.8 to Form S-1, Amendment No. 4, filed October 17, 2006)
|
|
10.4*†
|
Amendment No. 3 to Satellite Products Supply Agreement by and between QUALCOMM Incorporated and Globalstar LLC dated as of September 30, 2005 (Exhibit 10.9 to Form S-1, Amendment No. 4, filed October 17, 2006)
|
|
10.5*
|
Amendment No. 4 to Satellite Products Supply Agreement by and between QUALCOMM Incorporated and Globalstar, Inc. dated as of August 15, 2006 (Exhibit 10.5 to Form 10-K filed March 31, 2009)
|
|
10.6*†
|
Amendment No. 5 to Satellite Products Supply Agreement by and between QUALCOMM Incorporated and Globalstar, Inc. dated as of November 20, 2007 (Exhibit 10.6 to Form 10-K filed March 31, 2009)
|
10.7*
|
Amendment No. 6 to Satellite Products Supply Agreement by and between QUALCOMM Incorporated, Globalstar, Inc. and Globalstar Canada Satellite Company dated as of November 20, 2007 (Exhibit 10.7 to Form 10-K filed March 31, 2009)
|
|
10.8*†
|
Amendment No. 7 to Satellite Products Supply Agreement by and between QUALCOMM Incorporated, Globalstar, Inc. and Globalstar Canada Satellite Company dated as of October 27, 2008 (Exhibit 10.8 to Form 10-K filed March 31, 2009)
|
|
10.9*†
|
Amendment No. 8 to Satellite Products Supply Agreement by and between QUALCOMM Incorporated, Globalstar, Inc. and Globalstar Canada Satellite Company dated as of August 18, 2009 (Exhibit 10.4 to Form 10-Q filed May 7, 2010)
|
|
10.10*†
|
Amendment No. 9 to Satellite Products Supply Agreement by and between QUALCOMM Incorporated, Globalstar, Inc. and Globalstar Canada Satellite Company dated as of February 24, 2010 (Exhibit 10.5 to Form 10-K filed March 31, 2009)
|
|
10.11*†
|
Amended and Restated Satellite Construction Contract between Globalstar, Inc. and Thales Alenia Space dated June 3, 2009 (Exhibit 10.2 to Form 10-Q filed August 10, 2009)
|
|
10.12*†
|
Amendment No.1 to Amended and Restated Satellite Construction Contract between Globalstar, Inc. and Thales Alenia Space France dated January 18, 2010 (Exhibit 10.10 to Form 10-K filed March 12, 2010)
|
10.13*†
|
Amendment No.2 to Amended and Restated Satellite Construction Contract between Globalstar, Inc. and Thales Alenia Space France dated January 18, 2010 (Exhibit 10.11 to Form 10-K filed March 12, 2010)
|
|
10.14
|
Amendment No.3 to Amended and Restated Satellite Construction Contract between Globalstar, Inc. and Thales Alenia Space France dated August 23, 2010
|
|
10.15*†
|
Control Network Facility Construction Contract by and between Alcatel Alenia Space France and Globalstar, Inc. dated March 22, 2007 (Exhibit 10.1 to Form 10-Q filed May 15, 2007)
|
|
10.16*†
|
Amended and Restated Launch Services Agreement by and between Globalstar, Inc. and Arianespace dated March 9, 2010 (Exhibit 10.1 to Form 10-Q filed May 7, 2010)
|
|
10.17*
|
Second Amended and Restated Credit Agreement by and among Globalstar, Inc., the lenders referred to therein, and Thermo Funding Company LLC as Administrative Agent dated as of December 17, 2007 (Exhibit 10.23 to Form 10-K filed March 17, 2008)
|
|
10.18*
|
Letter Agreement regarding Second Amended and Restated Credit Agreement by and among Thermo Funding Company LLC and Globalstar, Inc. dated September 29, 2008 (Exhibit 10.2 to Form 10-Q filed November 10, 2008)
|
|
10.19*
|
First Amendment to Second Amended and Restated Credit Agreement by and among Thermo Funding Company LLC and Globalstar, Inc. dated December 18, 2008 (Exhibit 10.22 to Form 10-K filed March 31, 2009)
|
|
10.20*
|
Share Lending Agreement by and among Globalstar, Inc., Merrill Lynch International and Merrill Lynch, Pierce, Fenner & Smith Incorporated dated as of April 10, 2008 (Exhibit 10.2 to Form 8-K filed April 16, 2008)
|
|
10.21*
|
Amendment to Share Lending Agreement by and among Globalstar, Inc. and Merrill Lynch International (through Merrill Lynch, Pierce, Fenner & Smith Incorporated) dated as of December 18, 2008 (Exhibit 10.24 to Form 10-K filed March 31, 2009)
|
|
10.22*
|
Pledge and Escrow Agreement by and among Globalstar, Inc., U.S. Bank, National Association as Trustee, and U.S. Bank, National Association as Escrow Agent dated April 15, 2008 (Exhibit 10.1 to Form 8-K filed April 16, 2008)
|
|
10.23*†
|
Contract between Globalstar, Inc. and Hughes Network Systems LLC dated May 1, 2008 (Exhibit 10.1 to Form 10-Q filed August 11, 2008)
|
|
10.24*
|
Amendment No.2 to Contract between Globalstar, Inc. and Hughes Network Systems LLC effective as of August 28, 2009 (Amendment No. 1 Superseded.) (Exhibit 10.2 to Form 10-Q filed November 6, 2009)
|
|
10.25*
|
Amendment No.3 to Contract between Globalstar, Inc. and Hughes Network Systems LLC effective as of September 21, 2009 (Exhibit 10.3 to Form 10-Q filed November 6, 2009)
|
|
10.26* †
|
Amendment No.4 to Contract between Globalstar, Inc. and Hughes Network Systems LLC dated as of March 24, 2010 (Exhibit 10.2 to Form 10-Q filed May 7, 2010)
|
10.27*†
|
Purchase Agreement by and between Globalstar, Inc. and Ericsson Federal Inc. dated October 1, 2008 (Exhibit 10.1 to Form 10-Q filed November 10, 2008)
|
|
10.28*†
|
Amendment No.1 to Purchase Agreement by and between Globalstar, Inc. and Ericsson Federal Inc. dated as of December 1, 2009 (Exhibit 10.28 to Form 10-K filed March 12, 2010)
|
|
10.29* †
|
Amendment No.2 to Purchase Agreement by and between Globalstar, Inc. and Ericsson Federal Inc. dated as of March 30, 2010 (Exhibit 10.3 to Form 10-Q filed May 7, 2010)
|
|
10.30 †
|
Amendment No.3 to Purchase Agreement by and between Globalstar, Inc. and Oceus Networks (fka Ericsson Federal Inc.) dated as of December 10, 2010
|
|
10.31*
|
COFACE Facility Agreement between Globalstar, Inc., BNP Paribas, Societe Generale, Natixis, Calyon and Credit Industrial et Commercial date June 5, 2009 conformed to include amendments through October 28, 2010 (Exhibit 10.1 to Form 10-Q/A filed November 10, 2010)
|
|
10.32*
|
Amendment #4 to Facility Agreement dated December 22, 2010 (Exhibit 10.1 to Current Report on Form 8-K filed January 7, 2011)
|
|
10.33* | Amendment #5 to Facility Agreement dated March 16, 2011 (Exhibit 10.1 to Form 8-K Current Report on filed March 21, 2011) | |
10.34*
|
Conversion Agreement between Globalstar, Inc. and Thermo Funding Company LLC dated as of June 19, 2009 (Exhibit 10.3 to Form 10-Q filed August 10, 2009)
|
|
10.35*
|
Contingent Equity Agreement between Globalstar, Inc. and Thermo Funding Company LLC dated as of June 19, 2009 (Exhibit 10.4 to Form 10-Q filed August 10, 2009)
|
|
10.36*
|
Loan Agreement between Globalstar, Inc. and Thermo Funding Company LLC dated as of June 25, 2009 (Exhibit 10.5 to Form 10-Q filed August 10, 2009)
|
10.37*
|
Amended and Restated Globalstar, Inc. 2006 Equity Incentive Plan (Annex A to Definitive Proxy Statement filed March 31, 2008)
|
|
10.38*†
|
Designated Executive Incentive Compensation Memorandum Agreement by and among Globalstar LLC, Fuad Ahmad, Anthony J. Navarra, Megan Fitzgerald, Robert Miller, Dennis Allen, and Steven Bell (Exhibit 10.10 to Form S-1, Amendment No. 4, filed October 17, 2006)
|
|
10.39*
|
Non-Qualified Stock Option Award Agreement between Globalstar, Inc. and Peter J. Dalton (Exhibit 10.18 to Form S-1, Amendment No. 5, filed October 27, 2006)
|
|
10.40*
|
Form of Designated Executive Award Agreement under the Globalstar, Inc. 2006 Equity Incentive Plan (Exhibit 10.1 to Form 10-Q filed August 14, 2007)
|
|
10.41*
|
Form of Restricted Stock Units Agreement for Non-U.S. Designated Executives under the Globalstar, Inc. 2006 Equity Incentive Plan (Exhibit 10.2 to Form 10-Q filed August 14, 2007)
|
|
10.42*
|
Form of Notice of Grant and Restricted Stock Agreement under the Globalstar, Inc. 2006 Equity Incentive Plan (Exhibit 10.29 to Form 10-K filed March 17, 2008)
|
10.43*
|
Form of Non-Qualified Stock Option Award Agreement for Members of the Board of Directors under the Globalstar, Inc. 2006 Equity Incentive Plan (Exhibit 10.1 to Form 8-K filed November 20, 2008)
|
|
10.44*
|
Award Agreement between Globalstar, Inc. and Peter J. Dalton dated September 23, 2009 (Exhibit 10.1 to Form 8-K filed September 29, 2009)
|
|
10.45
|
Form of Stock Option Award Agreement for use with executive officers
|
|
12.1
|
Ratio of Earnings to Fixed Charges
|
|
21.1
|
Subsidiaries of Globalstar, Inc.
|
|
23.1
|
Consent of Crowe Horwath LLP
|
|
24.1
|
Power of Attorney (included as part of signature page)
|
|
31.1
|
Section 302 Certification of Chief Executive Officer
|
|
31.2
|
Section 302 Certification of Chief Financial Officer
|
|
32.1
|
Section 906 Certification
|
*
|
Incorporated by reference.
|
†
|
Portions of the exhibit have been omitted pursuant to a request for confidential treatment filed with the Commission. The omitted portions have been filed with the Commission.
|
AMENDMENT N
°
3
TO THE
CONTRACT
GINC-C-06- 0300
BETWEEN GLOBALSTAR, INC.
|
AND THALES
|
ALENIA SPACE FRANCE
|
|
AMENDMENT N
°
3
TO THE
CONTRACT
GINC-C-06- 0300
BETWEEN GLOBALSTAR, INC.
|
AND THALES
|
ALENIA SPACE FRANCE
|
|
1.1
|
Article 1. Definitions.
|
-
|
"Associated Services" means the supplementary launch services specified in Launch Services Agreement.
|
-
|
"Launch Campaign" means, with respect to each launch, the period beginning from the date of arrival of individuals of Purchaser or Purchaser's contractors, subcontractors and suppliers at any tier or Purchaser Ground Support Equipment (GSE) to the Launch Site or from the date on which Purchaser begins autonomous operations on the Satellite, whichever is earlier, until the date on which Purchaser completes placement of all Purchaser GSE into a stand-by or storage phase condition or until the date on which all Purchaser GSE is removed from the Launch Site
|
-
|
"Launch Mission" means the mission assigned to the Launch Vehicle as defmed in Launch Services Agreement.
|
-
|
"Launch Vehicle" shall generally mean each vehicle provided by the Launch Services Providers on which one or more Spacecraft are to be launched. The List of possible Launch Vehicles is included in section 1.1 of Exhibit A. For the 24 first Spacecraft to be launched, it shall mean a vehicle belonging to the SOYUZ launch vehicle family chosen by ARIANESPACE, to perform the Launch Mission as defined in. the Launch Services Agreement signed between the Purchaser and ARIANESPACE.
|
1.2
|
Article 34 General Provisions.
|
AMENDMENT N
°
3 TO THE CONTRACT GINC-C-06- 0300 BETWEEN GLOBALSTAR, INC.
|
AND THALES
|
ALEN1A SPACE FRANCE
|
|
AMENDMENT N
°
4 TO THE CONTRACT GINC-C-06- 0300 BETWEEN GLOBALSTAR, INC.
|
AND THALES
|
ALEN1A SPACE FRANCE
|
|
Globalstar, Inc.
|
Thales Alenia Space France
|
By: /s/ Paul Rosati
|
By: /s/ Le Bourlout Isabelle
|
Name: Paul Rosati
|
Name: Le Bourlout Isabelle
|
Title: Contracts Manager
|
Title: Director Contract Office
|
Date: 23 August 2010
|
Date: 23 August 2010
|
Globalstar, Inc.
|
|
|
1.
|
The Exhibit A-2, Pricing Schedule, attached hereto, is hereby incorporated into the Contract.
|
|
2.
|
The updated Exhibit B, Termination Liability Schedule, attached hereto, replaces Exhibit B, Termination Liability Schedule of Amendment No. 1.
|
|
3.
|
The Exhibit B-1, Termination Liability Schedule, attached hereto, is hereby incorporated into the Contract.
|
Globalstar – Change Order No. 3 – Globalstar Core Network Contract # GINC-C-08-0400
|
Page 2 of 4
|
|
4.
|
The updated Exhibit C, Payment Milestones, attached hereto, replaces Exhibit C, Payment Milestones of Amendment No.1.
|
|
5.
|
The Exhibit C-1, Payment Milestones, is hereby incorporated into the Contract.
|
|
6.
|
The Exhibit D-2, Statement of Work for the Tandem Switch for Globalstar Nigeria, attached hereto, is hereby incorporated into the Contract.
|
|
7.
|
The Exhibit E, Statement of Compliance of the original Contract shall apply to the Tandem Switch for Globalstar Nigeria in the same manner it applies to other Products or Core Network components purchased under the original Contract.
|
|
(a)
|
[*]; and
|
|
(b)
|
[*].
|
|
8.
|
With respect to Article 1, Scope of Agreement and Article 5, Statement of Work of the Contract, the Work that Ericsson shall deliver under the Contract is amended to include the Tandem Switch for Globalstar Nigeria as set forth above.
|
|
9.
|
With respect to Article 10, Prices and Fees of the Contract, the Total Purchase Price is amended to be a firm fixed-price of Twenty Eight Million Two Hundred Fifty Three Thousand One Hundred Sixty Six United States Dollars (US$28,253,166).
|
Globalstar – Change Order No. 3 – Globalstar Core Network Contract # GINC-C-08-0400
|
Page 3 of 4
|
Globalstar, Inc.
|
|
ERICSSON FEDERAL INC.
|
GLOBALSTAR, INC.
|
|||
By:
|
/s/ David Thompson
|
By:
|
/s/ Paul Rosati
|
|
Name:
|
David Thompson
|
Name:
|
Paul Rosati
|
|
Title:
|
CFO
|
Title:
|
Contracts Manager
|
Globalstar – Change Order No. 3 – Globalstar Core Network Contract # GINC-C-08-0400
|
Page 4 of 4
|
Globalstar, Inc. | Participant | ||||
By: |
|
|
|||
|
|
||||
Its: |
|
|
|||
Date | |||||
Address
|
|||||
Performance Goal
|
Performance
Period
|
Options Vesting
|
|
Award No. 1 | |||
Award No. 2
|
Year Ended December 31,
|
||||||||||||||||||||
2006
|
2007
|
2008
|
2009
|
2010
|
||||||||||||||||
Earnings:
|
||||||||||||||||||||
Income (loss) from continuing operations
|
$
|
23,623
|
$
|
(27,925
|
)
|
$
|
(22,792
|
)
|
$
|
(74,923
|
)
|
$
|
(97,467
|
)
|
||||||
Fixed charges
|
1,611
|
9,359
|
43,923
|
42,757
|
52,283
|
|||||||||||||||
Income tax expense (benefit)
|
(14,071
|
)
|
2,864
|
(2,283
|
)
|
(16
|
)
|
396
|
||||||||||||
Loss (income) in equity investee
|
—
|
—
|
176
|
73
|
2,829
|
|||||||||||||||
Less: capitalized interest
|
(884
|
)
|
(196
|
)
|
(38,050
|
)
|
(35,887
|
)
|
(47,122
|
)
|
||||||||||
Total earnings
|
$
|
10,279
|
$
|
(15,898
|
)
|
$
|
(19,026
|
)
|
$
|
(67,996
|
)
|
$
|
(89,081
|
)
|
||||||
Fixed Charges:
|
||||||||||||||||||||
Interest expense
|
$
|
587
|
$
|
9,023
|
$
|
5,733
|
$
|
6,730
|
$
|
5,021
|
||||||||||
Estimated interest component of rental expense(1)
|
140
|
140
|
140
|
140
|
140
|
|||||||||||||||
Capitalized interest
|
884
|
196
|
38,050
|
35,887
|
47,122
|
|||||||||||||||
Total fixed charges
|
$
|
1,611
|
$
|
9,359
|
$
|
43,923
|
$
|
42,757
|
$
|
52,283
|
||||||||||
Ratio of Earnings to Fixed Charges
|
6.38
|
x
|
*
|
*
|
*
|
*
|
*
|
For these periods, earnings were inadequate to cover fixed charges. The excess of fixed charges over earnings for those years was as follows: $25.3 million for the year ended December 31, 2007; $55.3 million for the year ended December 31, 2008; $110.8 million for the year ended December 31, 2009; and $141.4 for the year ended December 31, 2010.
|
(1)
|
Represents our estimate of the interest component of operation lease rental expense.
|
Subsidiary
|
Organized Under Laws of
|
% of Voting
Securities
Owned by
Immediate
Parent
|
||||
GSSI, LLC
|
Delaware
|
100 | % | |||
ATSS Canada, Inc.
|
Delaware
|
100 | % | |||
Globalstar Brazil Holdings, L.P.
|
Delaware
|
100 | % | |||
Globalstar do Brasil Holdings Ltda.
|
Brazil
|
100 | % | |||
Globalstar do Brazil, S.A.
|
Brazil
|
100 | % | |||
Globalstar Satellite Services Pte., Ltd
|
Singapore
|
100 | % | |||
Globalstar Satellite Services Pty., Ltd
|
South Africa
|
100 | % | |||
Globalstar C, LLC
|
Delaware
|
100 | % | |||
Mobile Satellite Services B.V.
|
Netherlands
|
100 | % | |||
Globalstar Europe, S.A.R.L.
|
France
|
100 | % | |||
Globalstar Europe Satellite Services, Ltd.
|
Ireland
|
100 | % | |||
Globalstar Leasing LLC
|
Delaware
|
100 | % | |||
Globalstar Licensee LLC
|
Delaware
|
100 | % | |||
Globalstar Security Services, LLC
|
Delaware
|
100 | % | |||
Globalstar USA, LLC
|
Delaware
|
100 | % | |||
GUSA Licensee LLC
|
Delaware
|
100 | % | |||
Globalstar Canada Satellite Co.
|
Nova Scotia, Canada
|
100 | % | |||
Globalstar de Venezuela, C.A.
|
Venezuela
|
100 | % | |||
Globalstar Colombia, Ltda.
|
Colombia
|
100 | % | |||
Globalstar Caribbean Ltd.
|
Cayman Islands
|
100 | % | |||
Globalstar Republica Dominicana, S.A. (Dormant)
|
Dominican Republic
|
100 | % | |||
GCL Licensee LLC
|
Delaware
|
100 | % | |||
Globalstar Americas Acquisitions, Ltd.
|
British Virgin Islands
|
100 | % | |||
Globalstar Americas Holding Ltd.
|
British Virgin Islands
|
100 | % | |||
Globalstar Gateway Company S.A.
|
Nicaragua
|
100 | % | |||
Globalstar Americas Telecommunications Ltd.
|
British Virgin Islands
|
100 | % | |||
Globalstar Honduras S.A.
|
Honduras
|
100 | % | |||
Globalstar Nicaragua S.A.
|
Nicaragua
|
100 | % | |||
Globalstar de El Salvador, SA de CV
|
El Salvador
|
100 | % | |||
Globalstar Panama, Corp.
|
Panama
|
100 | % | |||
Globalstar Guatemala S.A.
|
Guatemala
|
100 | % | |||
Globalstar Belize Ltd.
|
Belize
|
100 | % | |||
Astral Technologies Investment Ltd.
|
British Virgin Islands
|
100 | % | |||
Astral Technologies Nicaragua S.A.
|
British Virgin Islands
|
100 | % | |||
SPOT LLC.
|
Colorado
|
100 | % |
|
|
1.
|
I have reviewed this annual report on Form 10-K of Globalstar, Inc.;
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 31, 2011
|
|
By:
|
/s/ Peter J. Dalton
|
|
Peter J. Dalton
Chief Executive Officer
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Globalstar, Inc.;
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 31, 2011
|
|
By:
|
/s/ Dirk Wild
|
|
Dirk Wild
Chief Financial Officer
|
Dated: March 31, 2011
|
||
By:
|
/s/ Peter J. Dalton
|
|
Peter J. Dalton
|
||
Chief Executive Officer
|
||
Dated: March 31, 2011
|
||
By:
|
/s/ Dirk Wild
|
|
Dirk Wild
|
||
Chief Financial Officer
|