x
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QUARTERLY 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
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(I.R.S. Employer Identification No.)
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Incorporation or Organization)
|
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Large accelerated filer
¨
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Accelerated filer
x
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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Item 1.
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||
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Item 2.
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Item 3.
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Item 4.
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Item 1A.
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||
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Item 6.
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
2014 |
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September 30,
2013 |
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September 30,
2014 |
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September 30,
2013 |
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Service revenues
|
$
|
18,511
|
|
|
$
|
17,056
|
|
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$
|
52,647
|
|
|
$
|
47,854
|
|
Subscriber equipment sales
|
4,930
|
|
|
5,493
|
|
|
15,324
|
|
|
13,863
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|
||||
Total revenue
|
23,441
|
|
|
22,549
|
|
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67,971
|
|
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61,717
|
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||||
Operating expenses:
|
|
|
|
|
|
|
|
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|
|
|
||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
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7,868
|
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8,181
|
|
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21,926
|
|
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22,913
|
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||||
Cost of subscriber equipment sales
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3,836
|
|
|
4,148
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11,240
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|
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10,675
|
|
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Cost of subscriber equipment sales - reduction in the value of inventory
|
—
|
|
|
—
|
|
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7,317
|
|
|
—
|
|
||||
Marketing, general, and administrative
|
8,783
|
|
|
9,079
|
|
|
24,799
|
|
|
22,579
|
|
||||
Depreciation, amortization, and accretion
|
21,047
|
|
|
23,715
|
|
|
66,393
|
|
|
66,114
|
|
||||
Total operating expenses
|
41,534
|
|
|
45,123
|
|
|
131,675
|
|
|
122,281
|
|
||||
Loss from operations
|
(18,093
|
)
|
|
(22,574
|
)
|
|
(63,704
|
)
|
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(60,564
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on extinguishment of debt
|
(12,936
|
)
|
|
(63,569
|
)
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(39,615
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)
|
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(110,809
|
)
|
||||
Loss on equity issuance
|
—
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(2,733
|
)
|
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—
|
|
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(16,701
|
)
|
||||
Interest income and expense, net of amounts capitalized
|
(9,067
|
)
|
|
(16,901
|
)
|
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(33,853
|
)
|
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(39,869
|
)
|
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Derivative gain (loss)
|
166,989
|
|
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(97,534
|
)
|
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(418,663
|
)
|
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(126,911
|
)
|
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Other
|
2,586
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|
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(1,540
|
)
|
|
2,207
|
|
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(1,125
|
)
|
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Total other income (expense)
|
147,572
|
|
|
(182,277
|
)
|
|
(489,924
|
)
|
|
(295,415
|
)
|
||||
Income (loss) before income taxes
|
129,479
|
|
|
(204,851
|
)
|
|
(553,628
|
)
|
|
(355,979
|
)
|
||||
Income tax expense
|
89
|
|
|
118
|
|
|
1,255
|
|
|
341
|
|
||||
Net income (loss)
|
$
|
129,390
|
|
|
$
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(204,969
|
)
|
|
$
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(554,883
|
)
|
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$
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(356,320
|
)
|
Income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
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|
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Basic
|
$
|
0.13
|
|
|
$
|
(0.30
|
)
|
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$
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(0.61
|
)
|
|
$
|
(0.64
|
)
|
Diluted
|
0.11
|
|
|
(0.30
|
)
|
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(0.61
|
)
|
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(0.64
|
)
|
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Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
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|
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Basic
|
987,668
|
|
|
673,546
|
|
|
914,474
|
|
|
559,515
|
|
||||
Diluted
|
1,189,190
|
|
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673,546
|
|
|
914,474
|
|
|
559,515
|
|
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Comprehensive income (loss)
|
$
|
128,896
|
|
|
$
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(204,417
|
)
|
|
$
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(555,754
|
)
|
|
$
|
(356,417
|
)
|
|
September 30,
2014 |
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December 31, 2013
|
||||
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(Unaudited)
|
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(Audited)
|
||||
ASSETS
|
|
|
|
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Current assets:
|
|
|
|
|
|
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Cash and cash equivalents
|
$
|
27,221
|
|
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$
|
17,408
|
|
Accounts receivable, net of allowance of $4,977 and $7,419, respectively
|
16,217
|
|
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15,723
|
|
||
Inventory
|
29,277
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|
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31,817
|
|
||
Advances for inventory
|
196
|
|
|
9,359
|
|
||
Prepaid expenses and other current assets
|
7,456
|
|
|
7,059
|
|
||
Total current assets
|
80,367
|
|
|
81,366
|
|
||
Property and equipment, net
|
1,120,156
|
|
|
1,169,785
|
|
||
Restricted cash
|
37,918
|
|
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37,918
|
|
||
Deferred financing costs
|
66,816
|
|
|
76,436
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|
||
Intangible and other assets, net of accumulated amortization of $6,138 and $5,669, respectively
|
14,703
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|
|
7,103
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|
||
Total assets
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$
|
1,319,960
|
|
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$
|
1,372,608
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
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Current liabilities:
|
|
|
|
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|
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Current portion of long-term debt
|
$
|
7,271
|
|
|
$
|
4,046
|
|
Accounts payable, including contractor payables of $6,580 and $7,665, respectively
|
12,195
|
|
|
14,627
|
|
||
Accrued contract termination charge
|
22,238
|
|
|
24,133
|
|
||
Accrued expenses
|
25,866
|
|
|
22,700
|
|
||
Payables to affiliates
|
443
|
|
|
202
|
|
||
Derivative liabilities
|
—
|
|
|
57,048
|
|
||
Deferred revenue
|
22,191
|
|
|
17,284
|
|
||
Total current liabilities
|
90,204
|
|
|
140,040
|
|
||
Long-term debt, less current portion
|
623,770
|
|
|
665,236
|
|
||
Employee benefit obligations
|
3,146
|
|
|
3,529
|
|
||
Derivative liabilities
|
575,803
|
|
|
405,478
|
|
||
Deferred revenue
|
6,787
|
|
|
7,079
|
|
||
Debt restructuring fees
|
20,795
|
|
|
20,795
|
|
||
Other non-current liabilities
|
13,987
|
|
|
13,696
|
|
||
Total non-current liabilities
|
1,244,288
|
|
|
1,115,813
|
|
||
Commitments and contingent liabilities (Notes 7 and 8)
|
|
|
|
|
|
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Stockholders’ (deficit) equity:
|
|
|
|
|
|
||
Preferred Stock of $0.0001 par value; 100,000,000 shares authorized and none issued and outstanding at September 30, 2014 and December 31, 2013:
|
|
|
|
|
|
||
Series A Preferred Convertible Stock of $0.0001 par value; one share authorized and none issued and outstanding at September 30, 2014 and December 31, 2013
|
—
|
|
|
—
|
|
||
Voting Common Stock of $0.0001 par value; 1,200,000,000 shares authorized; 855,827,575 and 535,883,461 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively
|
86
|
|
|
54
|
|
||
Nonvoting Common Stock of $0.0001 par value; 400,000,000 shares authorized; 134,008,656 and 309,008,656 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively
|
13
|
|
|
31
|
|
||
Additional paid-in capital
|
1,499,290
|
|
|
1,074,837
|
|
||
Accumulated other comprehensive income
|
—
|
|
|
871
|
|
||
Retained deficit
|
(1,513,921
|
)
|
|
(959,038
|
)
|
||
Total stockholders’ (deficit) equity
|
(14,532
|
)
|
|
116,755
|
|
||
Total liabilities and stockholders’ (deficit) equity
|
$
|
1,319,960
|
|
|
$
|
1,372,608
|
|
|
Nine Months Ended
|
||||||
|
September 30,
2014 |
|
September 30,
2013 |
||||
Cash flows provided by (used in) operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(554,883
|
)
|
|
$
|
(356,320
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation, amortization, and accretion
|
66,393
|
|
|
66,114
|
|
||
Change in fair value of derivative assets and liabilities
|
418,663
|
|
|
126,067
|
|
||
Stock-based compensation expense
|
2,312
|
|
|
1,850
|
|
||
Amortization of deferred financing costs
|
7,591
|
|
|
6,256
|
|
||
Provision for bad debts
|
1,688
|
|
|
1,359
|
|
||
Reduction in the value of inventory
|
7,317
|
|
|
—
|
|
||
Noncash interest and accretion expense
|
13,511
|
|
|
22,341
|
|
||
Loss on extinguishment of debt
|
39,615
|
|
|
110,809
|
|
||
Loss on equity issuance
|
—
|
|
|
16,701
|
|
||
Discount on future shares issued to vendor
|
748
|
|
|
—
|
|
||
Other, net
|
1,426
|
|
|
605
|
|
||
Unrealized foreign currency (gain) loss
|
(3,017
|
)
|
|
635
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(2,699
|
)
|
|
(4,001
|
)
|
||
Inventory
|
4,403
|
|
|
4,253
|
|
||
Prepaid expenses and other current assets
|
(961
|
)
|
|
(1,353
|
)
|
||
Other assets
|
(2,028
|
)
|
|
874
|
|
||
Accounts payable and accrued expenses
|
1,317
|
|
|
4,617
|
|
||
Payables to affiliates
|
242
|
|
|
73
|
|
||
Other non-current liabilities
|
193
|
|
|
(996
|
)
|
||
Deferred revenue
|
5,044
|
|
|
2,450
|
|
||
Net cash provided by operating activities
|
6,875
|
|
|
2,334
|
|
||
Cash flows (provided by) used in investing activities:
|
|
|
|
|
|
||
Second-generation satellites, ground and related launch costs (including interest)
|
(3,862
|
)
|
|
(37,732
|
)
|
||
Property and equipment additions
|
(2,203
|
)
|
|
(1,225
|
)
|
||
Investment in business
|
—
|
|
|
(496
|
)
|
||
Restricted cash
|
—
|
|
|
8,838
|
|
||
Net cash used in investing activities
|
(6,065
|
)
|
|
(30,615
|
)
|
||
Cash flows provided by (used in) financing activities
|
|
|
|
|
|
||
Borrowings from Facility Agreement
|
—
|
|
|
672
|
|
||
Proceeds from contingent equity agreement
|
—
|
|
|
1,071
|
|
||
Payments to reduce principal amount of exchanged 5.75% Notes
|
—
|
|
|
(13,544
|
)
|
||
Payments for 5.75% Notes not exchanged
|
—
|
|
|
(6,250
|
)
|
||
Payments to lenders and other fees associated with exchange
|
—
|
|
|
(2,482
|
)
|
||
Proceeds from equity issuance to related party
|
—
|
|
|
51,500
|
|
||
Payments of deferred financing costs
|
(164
|
)
|
|
(16,904
|
)
|
||
Proceeds from issuance of common stock and exercise of warrants
|
9,303
|
|
|
8,979
|
|
||
Net cash provided by financing activities
|
9,139
|
|
|
23,042
|
|
||
Effect of exchange rate changes on cash
|
(136
|
)
|
|
90
|
|
||
Net increase (decrease) in cash and cash equivalents
|
9,813
|
|
|
(5,149
|
)
|
||
Cash and cash equivalents, beginning of period
|
17,408
|
|
|
11,792
|
|
||
Cash and cash equivalents, end of period
|
$
|
27,221
|
|
|
$
|
6,643
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Cash paid for:
|
|
|
|
|
|
||
Interest
|
$
|
10,335
|
|
|
$
|
11,445
|
|
Income taxes
|
95
|
|
|
28
|
|
||
Supplemental disclosure of non-cash financing and investing activities:
|
|
|
|
|
|
||
Increase in non-cash capitalized accrued interest for second-generation satellites and ground costs
|
1,237
|
|
|
3,691
|
|
||
Capitalization of the accretion of debt discount and amortization of prepaid financing costs
|
1,973
|
|
|
4,716
|
|
||
Payments made in convertible notes and common stock
|
12,910
|
|
|
4,240
|
|
||
Principal amount of debt converted into common stock
|
76,040
|
|
|
23,570
|
|
||
Reduction of debt discount and deferred financing costs due to conversion of debt
|
28,073
|
|
|
13,164
|
|
||
Increase (reduction) in accrued second-generation satellites and ground costs
|
1,887
|
|
|
(9,688
|
)
|
||
Reduction in carrying amount of Thermo Loan agreement due to amendment
|
—
|
|
|
(35,026
|
)
|
||
Fair value of common stock issued upon conversion of debt
|
269,826
|
|
|
—
|
|
||
Reduction in derivative liability due to conversion of debt
|
182,051
|
|
|
—
|
|
||
Extinguishment of principal amount of 5.75% Notes
|
—
|
|
|
(71,804
|
)
|
||
Issuance of principal amount of 8.00% Notes Issued in 2013
|
—
|
|
|
54,611
|
|
||
Issuance of common stock to exchanging note holders
|
—
|
|
|
12,127
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
Globalstar System:
|
|
|
|
|
|
||
Space component
|
|
|
|
|
|
||
Second-generation satellites in service
|
$
|
1,212,040
|
|
|
$
|
1,212,099
|
|
Prepaid long-lead items
|
17,040
|
|
|
17,040
|
|
||
Second-generation satellite, on-ground spare
|
32,459
|
|
|
32,365
|
|
||
Ground component
|
48,126
|
|
|
48,378
|
|
||
Construction in progress:
|
|
|
|
|
|
||
Space component
|
11
|
|
|
—
|
|
||
Ground component
|
129,489
|
|
|
116,377
|
|
||
Other
|
1,811
|
|
|
1,115
|
|
||
Total Globalstar System
|
1,440,976
|
|
|
1,427,374
|
|
||
Internally developed and purchased software
|
15,794
|
|
|
14,931
|
|
||
Equipment
|
12,670
|
|
|
12,385
|
|
||
Land and buildings
|
3,719
|
|
|
3,768
|
|
||
Leasehold improvements
|
1,662
|
|
|
1,644
|
|
||
Total property and equipment
|
1,474,821
|
|
|
1,460,102
|
|
||
Accumulated depreciation
|
(354,665
|
)
|
|
(290,317
|
)
|
||
Total property and equipment, net
|
$
|
1,120,156
|
|
|
$
|
1,169,785
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30, 2014
|
|
September 30, 2013
|
|
September 30, 2014
|
|
September 30, 2013
|
||||||||
Interest cost eligible to be capitalized
|
$
|
10,508
|
|
|
$
|
13,119
|
|
|
$
|
34,123
|
|
|
$
|
38,851
|
|
Interest cost recorded in interest expense, net
|
(8,557
|
)
|
|
(10,151
|
)
|
|
(28,365
|
)
|
|
(24,302
|
)
|
||||
Net interest capitalized
|
$
|
1,951
|
|
|
$
|
2,968
|
|
|
$
|
5,758
|
|
|
$
|
14,549
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30, 2014
|
|
September 30, 2013
|
|
September 30, 2014
|
|
September 30, 2013
|
||||||||
Depreciation Expense
|
$
|
20,653
|
|
|
$
|
23,931
|
|
|
$
|
65,040
|
|
|
$
|
65,622
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||||||||||
|
Principal
Amount
|
|
Carrying
Value
|
|
Principal
Amount
|
|
Carrying
Value
|
||||||||
Facility Agreement
|
$
|
586,342
|
|
|
$
|
586,342
|
|
|
$
|
586,342
|
|
|
$
|
586,342
|
|
Thermo Loan Agreement
|
66,106
|
|
|
30,307
|
|
|
60,383
|
|
|
22,854
|
|
||||
8.00% Convertible Senior Notes Issued in 2013
|
23,032
|
|
|
14,392
|
|
|
46,971
|
|
|
26,291
|
|
||||
8.00% Convertible Senior Unsecured Notes Issued in 2009
|
—
|
|
|
—
|
|
|
51,652
|
|
|
33,795
|
|
||||
Total Debt
|
675,480
|
|
|
631,041
|
|
|
745,348
|
|
|
669,282
|
|
||||
Less: Current Portion
|
7,271
|
|
|
7,271
|
|
|
4,046
|
|
|
4,046
|
|
||||
Long-Term Debt
|
$
|
668,209
|
|
|
$
|
623,770
|
|
|
$
|
741,302
|
|
|
$
|
665,236
|
|
|
Outstanding Warrants
|
|
Strike Price
|
||||||||||
|
September 30,
2014 |
|
December 31,
2013 |
|
September 30,
2014 |
|
December 31,
2013 |
||||||
Contingent Equity Agreement (1)
|
37,088,418
|
|
|
41,467,980
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
Thermo Loan Agreement (2)
|
—
|
|
|
4,205,608
|
|
|
—
|
|
|
0.01
|
|
||
5.0% Notes (3)
|
8,000,000
|
|
|
8,000,000
|
|
|
0.32
|
|
|
0.32
|
|
||
8.00% Notes Issued in 2009 (4)
|
—
|
|
|
39,842,813
|
|
|
—
|
|
|
0.32
|
|
||
|
45,088,418
|
|
|
93,516,401
|
|
|
|
|
|
|
|
(1)
|
Pursuant to the terms of the Contingent Equity Agreement, the Company has issued to Thermo warrants to purchase shares of common stock pursuant to the annual availability fee and subsequent reset provisions in the Contingent Equity Agreement. These warrants have a
five
-year exercise period from issuance. These warrants were issued between June 2009 and June 2012, and the exercise periods expire between June 2014 and June 2017. As of
September 30, 2014
, Thermo had exercised warrants to purchase approximately
4.4 million
of these shares prior to the expiration of the associated warrants.
|
(2)
|
As consideration for the Loan Agreement with Thermo, the Company issued Thermo warrants to purchase shares of common stock. The exercise period of the warrants issued in connection with the Thermo Loan Agreement was five years from issuance, which expired in June 2014. Thermo exercised all of these warrants in the second quarter of 2014.
|
(3)
|
The
5.0%
Warrants are exercisable until June 2016, which is
five years
after their issuance.
|
(4)
|
The exercise period for the
8.00%
Warrants began on December 19, 2009 and ended on June 14, 2014. All
8.00%
Warrants were exercised in the second quarter of 2014.
|
•
|
At the closing of the exchange transaction and thereafter each week until no later than July 31, 2013, an amount sufficient to enable the Company to maintain a consolidated unrestricted cash balance of at least
$4.0 million
;
|
•
|
At the closing of the exchange transaction,
$25.0 million
to satisfy all cash requirements associated with the exchange transaction, including agreed principal and interest payments to the holders of the
5.75%
Notes as contemplated by the Exchange Agreement, with any remaining portion being retained by the Company for working capital and general corporate purposes;
|
•
|
Contemporaneously with, and as a condition to the closing of, any restructuring of the Facility Agreement,
$20.0 million
(less any amount contributed pursuant to the commitment described above with respect to the Company’s minimum cash balance);
|
•
|
Subject to the prior closing of the Facility Agreement restructuring, on or prior to December 26, 2013,
$20.0 million
; and
|
•
|
Subject to the prior closing of the Facility Agreement restructuring, on or prior to December 31, 2014,
$20.0 million
, less the amount by which the aggregate amount of cash received by the Company under the first, third and fourth commitments described above exceeds
$40 million
.
|
|
September 30,
2014 |
|
December 31, 2013
|
||||
Intangible and other assets:
|
|
|
|
|
|
||
Interest rate cap
|
$
|
72
|
|
|
$
|
185
|
|
Total intangible and other assets
|
$
|
72
|
|
|
$
|
185
|
|
Derivative liabilities, current:
|
|
|
|
|
|
||
Warrants issued with 8.00% Notes Issued in 2009
|
$
|
—
|
|
|
$
|
(57,048
|
)
|
Derivative liabilities, non-current:
|
|
|
|
|
|
||
Compound embedded derivative with 8.00% Notes Issued in 2009
|
$
|
—
|
|
|
$
|
(66,022
|
)
|
Compound embedded derivative with 8.00% Notes Issued in 2013
|
(109,896
|
)
|
|
(109,794
|
)
|
||
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
(465,907
|
)
|
|
(229,662
|
)
|
||
Total derivative liabilities, non-current:
|
(575,803
|
)
|
|
(405,478
|
)
|
||
Total derivative liabilities, current and non-current
|
$
|
(575,803
|
)
|
|
$
|
(462,526
|
)
|
|
Three Months Ended
|
||||||
|
September 30, 2014
|
|
September 30, 2013
|
||||
Interest rate cap
|
$
|
(7
|
)
|
|
$
|
(30
|
)
|
Warrants issued with 8.00% Notes Issued in 2009
|
—
|
|
|
(6,323
|
)
|
||
Compound embedded derivative with 8.00% Notes Issued in 2009
|
—
|
|
|
(29,986
|
)
|
||
Contingent put feature embedded in the 5.0% Convertible Senior Notes
|
—
|
|
|
848
|
|
||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
43,050
|
|
|
(25,590
|
)
|
||
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
123,946
|
|
|
(36,453
|
)
|
||
Total derivative gain (loss)
|
$
|
166,989
|
|
|
$
|
(97,534
|
)
|
|
Nine Months Ended
|
||||||
|
September 30, 2014
|
|
September 30, 2013
|
||||
Interest rate cap
|
$
|
(113
|
)
|
|
$
|
86
|
|
Warrants issued with 8.00% Notes Issued in 2009
|
(67,523
|
)
|
|
(28,949
|
)
|
||
Compound embedded derivative with 8.00% Notes Issued in 2009
|
(16,406
|
)
|
|
(37,233
|
)
|
||
Contingent put feature embedded in the 5.0% Convertible Senior Notes
|
—
|
|
|
2,133
|
|
||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
(98,376
|
)
|
|
(26,495
|
)
|
||
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
(236,245
|
)
|
|
(36,453
|
)
|
||
Total derivative loss
|
$
|
(418,663
|
)
|
|
$
|
(126,911
|
)
|
|
Fair Value Measurements at September 30, 2014:
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
Balance
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate cap
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
72
|
|
Total assets measured at fair value
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
72
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
$
|
—
|
|
|
$
|
—
|
|
|
(109,896
|
)
|
|
$
|
(109,896
|
)
|
|
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
—
|
|
|
—
|
|
|
(465,907
|
)
|
|
(465,907
|
)
|
||||
Total Derivative Liabilities
|
—
|
|
|
—
|
|
|
(575,803
|
)
|
|
(575,803
|
)
|
||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liability for contingent consideration
|
—
|
|
|
—
|
|
|
(1,149
|
)
|
|
(1,149
|
)
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(576,952
|
)
|
|
$
|
(576,952
|
)
|
Balance at June 30, 2014
|
$
|
(775,361
|
)
|
Earnout payments made related to liability for contingent consideration
|
585
|
|
|
Change in fair value of contingent consideration
|
(189
|
)
|
|
Derivative adjustment related to conversions and exercises
|
31,017
|
|
|
Unrealized gain, included in derivative gain (loss)
|
166,996
|
|
|
Balance at September 30, 2014
|
$
|
(576,952
|
)
|
Balance at December 31, 2013
|
$
|
(464,449
|
)
|
Earnout payments made related to liability for contingent consideration
|
1,583
|
|
|
Change in fair value of contingent consideration
|
(809
|
)
|
|
Derivative adjustment related to conversions and exercises
|
305,274
|
|
|
Unrealized loss, included in derivative gain (loss)
|
(418,551
|
)
|
|
Balance at September 30, 2014
|
$
|
(576,952
|
)
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
Accrued interest
|
$
|
5,750
|
|
|
$
|
1,200
|
|
Accrued compensation and benefits
|
2,552
|
|
|
3,927
|
|
||
Accrued property and other taxes
|
5,366
|
|
|
5,744
|
|
||
Accrued customer liabilities and deposits
|
2,822
|
|
|
2,663
|
|
||
Accrued professional and other service provider fees
|
1,826
|
|
|
705
|
|
||
Accrued liability for contingent consideration
|
1,149
|
|
|
1,922
|
|
||
Accrued commissions
|
974
|
|
|
1,316
|
|
||
Accrued telecommunications expenses
|
918
|
|
|
649
|
|
||
Accrued second-generation constellation costs
|
1,887
|
|
|
—
|
|
||
Other accrued expenses
|
2,622
|
|
|
4,574
|
|
||
Total accrued expenses
|
$
|
25,866
|
|
|
$
|
22,700
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
Long-term accrued interest
|
$
|
259
|
|
|
$
|
451
|
|
Asset retirement obligation
|
1,158
|
|
|
1,083
|
|
||
Deferred rent and capital lease obligations
|
433
|
|
|
456
|
|
||
Liabilities related to the Cooperative Endeavor Agreement with the State of Louisiana
|
1,594
|
|
|
1,575
|
|
||
Uncertain income tax positions
|
6,704
|
|
|
5,918
|
|
||
Foreign tax contingencies
|
3,839
|
|
|
4,213
|
|
||
Total noncurrent liabilities
|
$
|
13,987
|
|
|
$
|
13,696
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
General and administrative expenses
|
$
|
174
|
|
|
$
|
74
|
|
|
$
|
236
|
|
|
$
|
229
|
|
Non-cash expenses
|
137
|
|
|
137
|
|
|
411
|
|
|
411
|
|
||||
Loss on equity issuance
|
—
|
|
|
2,404
|
|
|
—
|
|
|
16,373
|
|
||||
Loss on extinguishment of debt related to amendment and restatement of Thermo Loan Agreement
|
—
|
|
|
66,088
|
|
|
—
|
|
|
$
|
66,088
|
|
|||
Total
|
$
|
311
|
|
|
$
|
68,703
|
|
|
$
|
647
|
|
|
$
|
83,101
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Accumulated other comprehensive income (loss), June 30, 2014 and 2013 and December 31, 2013 and 2012, respectively
|
$
|
493
|
|
|
$
|
(2,408
|
)
|
|
$
|
871
|
|
|
$
|
(1,758
|
)
|
Other comprehensive income (loss) :
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
(493
|
)
|
|
553
|
|
|
(871
|
)
|
|
(97
|
)
|
||||
Accumulated other comprehensive income (loss), September 30, 2014 and 2013, respectively
|
$
|
—
|
|
|
$
|
(1,855
|
)
|
|
$
|
—
|
|
|
$
|
(1,855
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Grants of restricted stock awards and restricted stock units
|
201
|
|
|
14
|
|
|
607
|
|
|
852
|
|
Grants of options to purchase common stock
|
134
|
|
|
1,224
|
|
|
595
|
|
|
1,829
|
|
Total
|
335
|
|
|
1,238
|
|
|
1,202
|
|
|
2,681
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||
Service:
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
12,267
|
|
|
$
|
11,660
|
|
|
$
|
35,000
|
|
|
$
|
33,666
|
|
Canada
|
4,077
|
|
|
3,446
|
|
|
10,946
|
|
|
9,123
|
|
||||
Europe
|
1,655
|
|
|
1,185
|
|
|
4,407
|
|
|
2,736
|
|
||||
Central and South America
|
440
|
|
|
625
|
|
|
1,886
|
|
|
1,918
|
|
||||
Others
|
72
|
|
|
140
|
|
|
408
|
|
|
411
|
|
||||
Total service revenue
|
$
|
18,511
|
|
|
$
|
17,056
|
|
|
$
|
52,647
|
|
|
$
|
47,854
|
|
Subscriber equipment:
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
2,510
|
|
|
3,688
|
|
|
8,340
|
|
|
8,756
|
|
||||
Canada
|
1,418
|
|
|
1,201
|
|
|
4,187
|
|
|
2,964
|
|
||||
Europe
|
540
|
|
|
327
|
|
|
1,628
|
|
|
1,228
|
|
||||
Central and South America
|
437
|
|
|
177
|
|
|
930
|
|
|
712
|
|
||||
Others
|
25
|
|
|
100
|
|
|
239
|
|
|
203
|
|
||||
Total subscriber equipment revenue
|
$
|
4,930
|
|
|
$
|
5,493
|
|
|
$
|
15,324
|
|
|
$
|
13,863
|
|
Total revenue
|
$
|
23,441
|
|
|
$
|
22,549
|
|
|
$
|
67,971
|
|
|
$
|
61,717
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
Long-lived assets:
|
|
|
|
|
|
||
United States
|
$
|
1,114,934
|
|
|
$
|
1,164,358
|
|
Canada
|
318
|
|
|
247
|
|
||
Europe
|
470
|
|
|
408
|
|
||
Central and South America
|
3,510
|
|
|
3,595
|
|
||
Others
|
924
|
|
|
1,177
|
|
||
Total long-lived assets
|
$
|
1,120,156
|
|
|
$
|
1,169,785
|
|
|
Three Months Ended September 30, 2014
|
|
Weighted average common shares outstanding:
|
|
|
Basic shares outstanding
|
987,668
|
|
Incremental shares from assumed exercises of:
|
|
|
Stock options, restricted stock, restricted stock units and ESPP
|
7,340
|
|
8% Convertible Senior Notes Issued in 2013
|
39,625
|
|
Thermo Loan Agreement
|
109,469
|
|
Warrants
|
45,088
|
|
Diluted shares outstanding
|
1,189,190
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
19,258
|
|
|
$
|
1,494
|
|
|
$
|
6,389
|
|
|
$
|
(8,630
|
)
|
|
$
|
18,511
|
|
Subscriber equipment sales
|
71
|
|
|
3,471
|
|
|
5,118
|
|
|
(3,730
|
)
|
|
4,930
|
|
|||||
Total revenue
|
19,329
|
|
|
4,965
|
|
|
11,507
|
|
|
(12,360
|
)
|
|
23,441
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
2,903
|
|
|
2,653
|
|
|
2,563
|
|
|
(251
|
)
|
|
7,868
|
|
|||||
Cost of subscriber equipment sales
|
31
|
|
|
2,962
|
|
|
4,823
|
|
|
(3,980
|
)
|
|
3,836
|
|
|||||
Cost of subscriber equipment sales - reduction in the value of inventory
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Marketing, general and administrative
|
1,906
|
|
|
3,850
|
|
|
4,408
|
|
|
(1,381
|
)
|
|
8,783
|
|
|||||
Depreciation, amortization, and accretion
|
19,180
|
|
|
1,879
|
|
|
6,974
|
|
|
(6,986
|
)
|
|
21,047
|
|
|||||
Total operating expenses
|
24,020
|
|
|
11,344
|
|
|
18,768
|
|
|
(12,598
|
)
|
|
41,534
|
|
|||||
Loss from operations
|
(4,691
|
)
|
|
(6,379
|
)
|
|
(7,261
|
)
|
|
238
|
|
|
(18,093
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(12,936
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,936
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(9,001
|
)
|
|
(10
|
)
|
|
(57
|
)
|
|
1
|
|
|
(9,067
|
)
|
|||||
Derivative gain
|
166,989
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166,989
|
|
|||||
Equity in subsidiary earnings
|
(12,653
|
)
|
|
(884
|
)
|
|
—
|
|
|
13,537
|
|
|
—
|
|
|||||
Other
|
1,782
|
|
|
409
|
|
|
364
|
|
|
31
|
|
|
2,586
|
|
|||||
Total other income (expense)
|
134,181
|
|
|
(485
|
)
|
|
307
|
|
|
13,569
|
|
|
147,572
|
|
|||||
Income (loss) before income taxes
|
129,490
|
|
|
(6,864
|
)
|
|
(6,954
|
)
|
|
13,807
|
|
|
129,479
|
|
|||||
Income tax expense
|
100
|
|
|
7
|
|
|
(18
|
)
|
|
—
|
|
|
89
|
|
|||||
Net income (loss)
|
$
|
129,390
|
|
|
$
|
(6,871
|
)
|
|
$
|
(6,936
|
)
|
|
$
|
13,807
|
|
|
$
|
129,390
|
|
Comprehensive income (loss)
|
$
|
129,390
|
|
|
$
|
(6,871
|
)
|
|
$
|
(7,430
|
)
|
|
$
|
13,807
|
|
|
$
|
128,896
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Service revenues
|
$
|
18,726
|
|
|
$
|
2,478
|
|
|
$
|
4,940
|
|
|
$
|
(9,088
|
)
|
|
$
|
17,056
|
|
Subscriber equipment sales
|
127
|
|
|
4,254
|
|
|
1,070
|
|
|
42
|
|
|
5,493
|
|
|||||
Total revenue
|
18,853
|
|
|
6,732
|
|
|
6,010
|
|
|
(9,046
|
)
|
|
22,549
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
3,125
|
|
|
3,126
|
|
|
1,941
|
|
|
(11
|
)
|
|
8,181
|
|
|||||
Cost of subscriber equipment sales
|
90
|
|
|
3,334
|
|
|
1,819
|
|
|
(1,095
|
)
|
|
4,148
|
|
|||||
Marketing, general and administrative
|
2,008
|
|
|
4,666
|
|
|
3,774
|
|
|
(1,369
|
)
|
|
9,079
|
|
|||||
Depreciation, amortization, and accretion
|
19,645
|
|
|
4,914
|
|
|
6,485
|
|
|
(7,329
|
)
|
|
23,715
|
|
|||||
Total operating expenses
|
24,868
|
|
|
16,040
|
|
|
14,019
|
|
|
(9,804
|
)
|
|
45,123
|
|
|||||
Loss from operations
|
(6,015
|
)
|
|
(9,308
|
)
|
|
(8,009
|
)
|
|
758
|
|
|
(22,574
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(63,569
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,569
|
)
|
|||||
Loss on equity issuance
|
(2,733
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,733
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(16,636
|
)
|
|
(3
|
)
|
|
(262
|
)
|
|
—
|
|
|
(16,901
|
)
|
|||||
Derivative loss
|
(97,534
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(97,534
|
)
|
|||||
Equity in subsidiary earnings
|
(17,090
|
)
|
|
(1,729
|
)
|
|
—
|
|
|
18,819
|
|
|
—
|
|
|||||
Other
|
(1,343
|
)
|
|
(171
|
)
|
|
(21
|
)
|
|
(5
|
)
|
|
(1,540
|
)
|
|||||
Total other income (expense)
|
(198,905
|
)
|
|
(1,903
|
)
|
|
(283
|
)
|
|
18,814
|
|
|
(182,277
|
)
|
|||||
Loss before income taxes
|
(204,920
|
)
|
|
(11,211
|
)
|
|
(8,292
|
)
|
|
19,572
|
|
|
(204,851
|
)
|
|||||
Income tax expense
|
49
|
|
|
6
|
|
|
63
|
|
|
—
|
|
|
118
|
|
|||||
Net (loss) income
|
$
|
(204,969
|
)
|
|
$
|
(11,217
|
)
|
|
$
|
(8,355
|
)
|
|
$
|
19,572
|
|
|
$
|
(204,969
|
)
|
Comprehensive (loss) income
|
$
|
(204,969
|
)
|
|
$
|
(11,217
|
)
|
|
$
|
(7,803
|
)
|
|
$
|
19,572
|
|
|
$
|
(204,417
|
)
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
56,627
|
|
|
$
|
4,859
|
|
|
$
|
17,279
|
|
|
$
|
(26,118
|
)
|
|
$
|
52,647
|
|
Subscriber equipment sales
|
387
|
|
|
10,966
|
|
|
9,271
|
|
|
(5,300
|
)
|
|
15,324
|
|
|||||
Total revenue
|
57,014
|
|
|
15,825
|
|
|
26,550
|
|
|
(31,418
|
)
|
|
67,971
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
7,958
|
|
|
7,101
|
|
|
7,289
|
|
|
(422
|
)
|
|
21,926
|
|
|||||
Cost of subscriber equipment sales
|
243
|
|
|
8,578
|
|
|
9,415
|
|
|
(6,996
|
)
|
|
11,240
|
|
|||||
Cost of subscriber equipment sales - reduction in the value of inventory
|
7,258
|
|
|
19
|
|
|
40
|
|
|
—
|
|
|
7,317
|
|
|||||
Marketing, general and administrative
|
5,501
|
|
|
11,994
|
|
|
10,910
|
|
|
(3,606
|
)
|
|
24,799
|
|
|||||
Depreciation, amortization, and accretion
|
57,636
|
|
|
9,589
|
|
|
20,113
|
|
|
(20,945
|
)
|
|
66,393
|
|
|||||
Total operating expenses
|
78,596
|
|
|
37,281
|
|
|
47,767
|
|
|
(31,969
|
)
|
|
131,675
|
|
|||||
Loss from operations
|
(21,582
|
)
|
|
(21,456
|
)
|
|
(21,217
|
)
|
|
551
|
|
|
(63,704
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(39,615
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,615
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(33,598
|
)
|
|
(30
|
)
|
|
(226
|
)
|
|
1
|
|
|
(33,853
|
)
|
|||||
Derivative loss
|
(418,663
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(418,663
|
)
|
|||||
Equity in subsidiary earnings
|
(42,471
|
)
|
|
(5,100
|
)
|
|
—
|
|
|
47,571
|
|
|
—
|
|
|||||
Other
|
1,250
|
|
|
400
|
|
|
643
|
|
|
(86
|
)
|
|
2,207
|
|
|||||
Total other income (expense)
|
(533,097
|
)
|
|
(4,730
|
)
|
|
417
|
|
|
47,486
|
|
|
(489,924
|
)
|
|||||
Loss before income taxes
|
(554,679
|
)
|
|
(26,186
|
)
|
|
(20,800
|
)
|
|
48,037
|
|
|
(553,628
|
)
|
|||||
Income tax expense
|
204
|
|
|
34
|
|
|
1,017
|
|
|
—
|
|
|
1,255
|
|
|||||
Net (loss) income
|
$
|
(554,883
|
)
|
|
$
|
(26,220
|
)
|
|
$
|
(21,817
|
)
|
|
$
|
48,037
|
|
|
$
|
(554,883
|
)
|
Comprehensive (loss) income
|
$
|
(554,883
|
)
|
|
$
|
(26,220
|
)
|
|
$
|
(22,688
|
)
|
|
$
|
48,037
|
|
|
$
|
(555,754
|
)
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Service revenues
|
$
|
50,351
|
|
|
$
|
8,544
|
|
|
$
|
13,320
|
|
|
$
|
(24,361
|
)
|
|
$
|
47,854
|
|
Subscriber equipment sales
|
287
|
|
|
10,018
|
|
|
13,264
|
|
|
(9,706
|
)
|
|
13,863
|
|
|||||
Total revenue
|
50,638
|
|
|
18,562
|
|
|
26,584
|
|
|
(34,067
|
)
|
|
61,717
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
8,233
|
|
|
7,947
|
|
|
6,791
|
|
|
(58
|
)
|
|
22,913
|
|
|||||
Cost of subscriber equipment sales
|
90
|
|
|
8,048
|
|
|
14,323
|
|
|
(11,786
|
)
|
|
10,675
|
|
|||||
Marketing, general and administrative
|
4,555
|
|
|
11,710
|
|
|
9,895
|
|
|
(3,581
|
)
|
|
22,579
|
|
|||||
Depreciation, amortization, and accretion
|
52,538
|
|
|
15,936
|
|
|
17,167
|
|
|
(19,527
|
)
|
|
66,114
|
|
|||||
Total operating expenses
|
65,416
|
|
|
43,641
|
|
|
48,176
|
|
|
(34,952
|
)
|
|
122,281
|
|
|||||
Loss from operations
|
(14,778
|
)
|
|
(25,079
|
)
|
|
(21,592
|
)
|
|
885
|
|
|
(60,564
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(110,809
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110,809
|
)
|
|||||
Loss on equity issuance
|
(16,701
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,701
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(38,728
|
)
|
|
(39
|
)
|
|
(1,098
|
)
|
|
(4
|
)
|
|
(39,869
|
)
|
|||||
Derivative loss
|
(126,911
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(126,911
|
)
|
|||||
Equity in subsidiary earnings
|
(47,313
|
)
|
|
(2,794
|
)
|
|
—
|
|
|
50,107
|
|
|
—
|
|
|||||
Other
|
(909
|
)
|
|
(170
|
)
|
|
(124
|
)
|
|
78
|
|
|
(1,125
|
)
|
|||||
Total other income (expense)
|
(341,371
|
)
|
|
(3,003
|
)
|
|
(1,222
|
)
|
|
50,181
|
|
|
(295,415
|
)
|
|||||
Loss before income taxes
|
(356,149
|
)
|
|
(28,082
|
)
|
|
(22,814
|
)
|
|
51,066
|
|
|
(355,979
|
)
|
|||||
Income tax expense
|
171
|
|
|
35
|
|
|
135
|
|
|
—
|
|
|
341
|
|
|||||
Net (loss) income
|
$
|
(356,320
|
)
|
|
$
|
(28,117
|
)
|
|
$
|
(22,949
|
)
|
|
$
|
51,066
|
|
|
$
|
(356,320
|
)
|
Comprehensive (loss) income
|
$
|
(356,320
|
)
|
|
$
|
(28,117
|
)
|
|
$
|
(23,046
|
)
|
|
$
|
51,066
|
|
|
$
|
(356,417
|
)
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Elimination
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
22,921
|
|
|
$
|
912
|
|
|
$
|
3,388
|
|
|
$
|
—
|
|
|
$
|
27,221
|
|
Accounts receivable
|
4,582
|
|
|
6,151
|
|
|
5,227
|
|
|
257
|
|
|
16,217
|
|
|||||
Intercompany receivables
|
727,100
|
|
|
436,281
|
|
|
23,711
|
|
|
(1,187,092
|
)
|
|
—
|
|
|||||
Inventory
|
4,122
|
|
|
12,419
|
|
|
12,736
|
|
|
—
|
|
|
29,277
|
|
|||||
Advances for inventory
|
125
|
|
|
28
|
|
|
43
|
|
|
—
|
|
|
196
|
|
|||||
Prepaid expenses and other current assets
|
4,374
|
|
|
278
|
|
|
2,804
|
|
|
—
|
|
|
7,456
|
|
|||||
Total current assets
|
763,224
|
|
|
456,069
|
|
|
47,909
|
|
|
(1,186,835
|
)
|
|
80,367
|
|
|||||
Property and equipment, net
|
1,111,237
|
|
|
3,697
|
|
|
6,277
|
|
|
(1,055
|
)
|
|
1,120,156
|
|
|||||
Restricted cash
|
37,918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,918
|
|
|||||
Intercompany notes receivable
|
13,006
|
|
|
—
|
|
|
4,885
|
|
|
(17,891
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
(241,579
|
)
|
|
4,216
|
|
|
29,382
|
|
|
207,981
|
|
|
—
|
|
|||||
Deferred financing costs
|
66,816
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66,816
|
|
|||||
Intangible and other assets, net
|
11,999
|
|
|
671
|
|
|
2,047
|
|
|
(14
|
)
|
|
14,703
|
|
|||||
Total assets
|
$
|
1,762,621
|
|
|
$
|
464,653
|
|
|
$
|
90,500
|
|
|
$
|
(997,814
|
)
|
|
$
|
1,319,960
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current portion of long-term debt
|
$
|
7,271
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,271
|
|
Accounts payable
|
8,112
|
|
|
2,045
|
|
|
2,038
|
|
|
—
|
|
|
12,195
|
|
|||||
Accrued contract termination charge
|
22,238
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,238
|
|
|||||
Accrued expenses
|
11,122
|
|
|
7,195
|
|
|
7,549
|
|
|
—
|
|
|
25,866
|
|
|||||
Intercompany payables
|
492,868
|
|
|
552,218
|
|
|
144,152
|
|
|
(1,189,238
|
)
|
|
—
|
|
|||||
Payables to affiliates
|
443
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
443
|
|
|||||
Deferred revenue
|
2,885
|
|
|
16,092
|
|
|
3,214
|
|
|
—
|
|
|
22,191
|
|
|||||
Total current liabilities
|
544,939
|
|
|
577,550
|
|
|
156,953
|
|
|
(1,189,238
|
)
|
|
90,204
|
|
|||||
Long-term debt, less current portion
|
623,770
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
623,770
|
|
|||||
Employee benefit obligations
|
3,147
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
3,146
|
|
|||||
Intercompany notes payable
|
—
|
|
|
—
|
|
|
15,448
|
|
|
(15,448
|
)
|
|
—
|
|
|||||
Derivative liabilities
|
575,803
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
575,803
|
|
|||||
Deferred revenue
|
6,330
|
|
|
457
|
|
|
—
|
|
|
—
|
|
|
6,787
|
|
|||||
Debt restructuring fees
|
20,795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,795
|
|
|||||
Other non-current liabilities
|
2,369
|
|
|
293
|
|
|
11,325
|
|
|
—
|
|
|
13,987
|
|
|||||
Total non-current liabilities
|
1,232,214
|
|
|
750
|
|
|
26,772
|
|
|
(15,448
|
)
|
|
1,244,288
|
|
|||||
Stockholders’ equity
|
(14,532
|
)
|
|
(113,647
|
)
|
|
(93,225
|
)
|
|
206,872
|
|
|
(14,532
|
)
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,762,621
|
|
|
$
|
464,653
|
|
|
$
|
90,500
|
|
|
$
|
(997,814
|
)
|
|
$
|
1,319,960
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Elimination
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
12,935
|
|
|
$
|
676
|
|
|
$
|
3,797
|
|
|
$
|
—
|
|
|
$
|
17,408
|
|
Accounts receivable
|
5,925
|
|
|
5,022
|
|
|
4,602
|
|
|
174
|
|
|
15,723
|
|
|||||
Intercompany receivables
|
651,251
|
|
|
414,508
|
|
|
18,280
|
|
|
(1,084,039
|
)
|
|
—
|
|
|||||
Inventory
|
1,161
|
|
|
14,375
|
|
|
16,281
|
|
|
—
|
|
|
31,817
|
|
|||||
Advances for inventory
|
9,287
|
|
|
28
|
|
|
44
|
|
|
—
|
|
|
9,359
|
|
|||||
Prepaid expenses and other current assets
|
4,316
|
|
|
311
|
|
|
2,432
|
|
|
—
|
|
|
7,059
|
|
|||||
Total current assets
|
684,875
|
|
|
434,920
|
|
|
45,436
|
|
|
(1,083,865
|
)
|
|
81,366
|
|
|||||
Property and equipment, net
|
1,152,734
|
|
|
11,621
|
|
|
6,889
|
|
|
(1,459
|
)
|
|
1,169,785
|
|
|||||
Restricted cash
|
37,918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,918
|
|
|||||
Intercompany notes receivable
|
13,629
|
|
|
—
|
|
|
4,285
|
|
|
(17,914
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
(209,592
|
)
|
|
7,242
|
|
|
—
|
|
|
202,350
|
|
|
—
|
|
|||||
Deferred financing costs
|
76,436
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,436
|
|
|||||
Intangible and other assets, net
|
3,964
|
|
|
1,028
|
|
|
2,125
|
|
|
(14
|
)
|
|
7,103
|
|
|||||
Total assets
|
$
|
1,759,964
|
|
|
$
|
454,811
|
|
|
$
|
58,735
|
|
|
$
|
(900,902
|
)
|
|
$
|
1,372,608
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current portion of long-term debt
|
$
|
4,046
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
4,046
|
|
|
Accounts payable
|
9,906
|
|
|
2,041
|
|
|
2,680
|
|
|
—
|
|
|
14,627
|
|
|||||
Accrued contract termination charge
|
24,133
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,133
|
|
|||||
Accrued expenses
|
6,160
|
|
|
8,203
|
|
|
8,337
|
|
|
—
|
|
|
22,700
|
|
|||||
Intercompany payables
|
435,707
|
|
|
521,763
|
|
|
128,496
|
|
|
(1,085,966
|
)
|
|
—
|
|
|||||
Payables to affiliates
|
202
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
202
|
|
|||||
Derivative liabilities
|
57,048
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,048
|
|
|||||
Deferred revenue
|
1,843
|
|
|
13,094
|
|
|
2,347
|
|
|
—
|
|
|
17,284
|
|
|||||
Total current liabilities
|
539,045
|
|
|
545,101
|
|
|
141,860
|
|
|
(1,085,966
|
)
|
|
140,040
|
|
|||||
Long-term debt, less current portion
|
665,236
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
665,236
|
|
|||||
Employee benefit obligations
|
3,529
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,529
|
|
|||||
Intercompany notes payable
|
—
|
|
|
—
|
|
|
15,772
|
|
|
(15,772
|
)
|
|
—
|
|
|||||
Derivative liabilities
|
405,478
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
405,478
|
|
|||||
Deferred revenue
|
6,583
|
|
|
496
|
|
|
—
|
|
|
—
|
|
|
7,079
|
|
|||||
Debt restructuring fees
|
20,795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,795
|
|
|||||
Other non-current liabilities
|
2,543
|
|
|
297
|
|
|
10,856
|
|
|
—
|
|
|
13,696
|
|
|||||
Total non-current liabilities
|
1,104,164
|
|
|
793
|
|
|
26,628
|
|
|
(15,772
|
)
|
|
1,115,813
|
|
|||||
Stockholders’ equity
|
116,755
|
|
|
(91,083
|
)
|
|
(109,753
|
)
|
|
200,836
|
|
|
116,755
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,759,964
|
|
|
$
|
454,811
|
|
|
$
|
58,735
|
|
|
$
|
(900,902
|
)
|
|
$
|
1,372,608
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
6,066
|
|
|
$
|
728
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
6,875
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Second-generation satellites, ground and related launch costs
|
(3,862
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,862
|
)
|
|||||
Property and equipment additions
|
(1,357
|
)
|
|
(492
|
)
|
|
(354
|
)
|
|
—
|
|
|
(2,203
|
)
|
|||||
Net cash used in investing activities
|
(5,219
|
)
|
|
(492
|
)
|
|
(354
|
)
|
|
—
|
|
|
(6,065
|
)
|
|||||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of common stock and exercise of warrants
|
9,303
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,303
|
|
|||||
Payment of deferred financing costs
|
(164
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(164
|
)
|
|||||
Net cash used in financing activities
|
9,139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,139
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(136
|
)
|
|
—
|
|
|
(136
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
9,986
|
|
|
236
|
|
|
(409
|
)
|
|
—
|
|
|
9,813
|
|
|||||
Cash and cash equivalents at beginning of period
|
12,935
|
|
|
676
|
|
|
3,797
|
|
|
—
|
|
|
17,408
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
22,921
|
|
|
$
|
912
|
|
|
$
|
3,388
|
|
|
$
|
—
|
|
|
$
|
27,221
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net cash provided used in operating activities
|
$
|
426
|
|
|
$
|
814
|
|
|
$
|
1,094
|
|
|
$
|
—
|
|
|
$
|
2,334
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Second-generation satellites, ground and related launch costs
|
(37,732
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,732
|
)
|
|||||
Property and equipment additions
|
—
|
|
|
(706
|
)
|
|
(519
|
)
|
|
—
|
|
|
(1,225
|
)
|
|||||
Investment in businesses
|
(496
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(496
|
)
|
|||||
Restricted cash
|
8,838
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,838
|
|
|||||
Net cash from investing activities
|
(29,390
|
)
|
|
(706
|
)
|
|
(519
|
)
|
|
—
|
|
|
(30,615
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Borrowings from Facility Agreement
|
672
|
|
|
|
|
|
|
|
|
672
|
|
||||||||
Borrowings from contingent equity account
|
1,071
|
|
|
|
|
|
|
|
|
1,071
|
|
||||||||
Proceeds from issuance of common stock and stock options
|
8,979
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,979
|
|
|||||
Payments to reduce principal amount of exchanged 5.75% Notes
|
(13,544
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,544
|
)
|
|||||
Payments to reduce principal amount of 5.75% Notes not exchanged
|
(6,250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,250
|
)
|
|||||
Payments to lenders and other fees associated with exchange
|
(2,482
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,482
|
)
|
|||||
Proceeds from equity issuance to related party
|
51,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,500
|
|
|||||
Payment of deferred financing costs
|
(16,904
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,904
|
)
|
|||||
Net cash used in financing activities
|
23,042
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,042
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(5,922
|
)
|
|
108
|
|
|
665
|
|
|
—
|
|
|
(5,149
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
10,220
|
|
|
251
|
|
|
1,321
|
|
|
—
|
|
|
11,792
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
4,298
|
|
|
$
|
359
|
|
|
$
|
1,986
|
|
|
$
|
—
|
|
|
$
|
6,643
|
|
•
|
two-way voice communication and data transmissions, which we call “Duplex,” using mobile or fixed devices; and
|
•
|
one-way data transmissions using a mobile or fixed device that transmits its location and other information to a central monitoring station, which includes certain SPOT and Simplex products.
|
•
|
total revenue, which is an indicator of our overall business growth;
|
•
|
subscriber growth and churn rate, which are both indicators of the satisfaction of our customers;
|
•
|
average monthly revenue per user, 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 type of our Duplex, Simplex, SPOT and IGO revenue;
|
•
|
operating income and adjusted EBITDA, which are both indicators of our financial performance; and
|
•
|
capital expenditures, which are an indicator of future revenue growth potential and cash requirements.
|
|
Three months ended
September 30, 2014 |
|
Three months ended
September 30, 2013 |
|
Nine months ended
September 30, 2014 |
|
Nine months ended
September 30, 2013 |
||||||||||||||||||||
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||||||||
Service Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Duplex
|
$
|
7,687
|
|
|
33
|
%
|
|
$
|
6,235
|
|
|
28
|
%
|
|
$
|
20,504
|
|
|
30
|
%
|
|
$
|
16,443
|
|
|
27
|
%
|
SPOT
|
7,491
|
|
|
32
|
|
|
6,969
|
|
|
31
|
|
|
21,566
|
|
|
32
|
|
|
20,908
|
|
|
34
|
|
||||
Simplex
|
1,986
|
|
|
8
|
|
|
2,147
|
|
|
9
|
|
|
6,078
|
|
|
9
|
|
|
5,596
|
|
|
9
|
|
||||
IGO
|
214
|
|
|
1
|
|
|
251
|
|
|
1
|
|
|
789
|
|
|
1
|
|
|
739
|
|
|
1
|
|
||||
Other
|
1,133
|
|
|
5
|
|
|
1,454
|
|
|
6
|
|
|
3,710
|
|
|
6
|
|
|
4,168
|
|
|
6
|
|
||||
Total
|
$
|
18,511
|
|
|
79
|
%
|
|
$
|
17,056
|
|
|
75
|
%
|
|
$
|
52,647
|
|
|
78
|
%
|
|
$
|
47,854
|
|
|
77
|
%
|
|
Three months ended
September 30, 2014 |
|
Three months ended
September 30, 2013 |
|
Nine months ended
September 30, 2014 |
|
Nine months ended
September 30, 2013 |
||||||||||||||||||||
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||||||||
Equipment Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Duplex
|
$
|
1,800
|
|
|
8
|
%
|
|
$
|
2,124
|
|
|
10
|
%
|
|
$
|
4,856
|
|
|
7
|
%
|
|
$
|
5,156
|
|
|
9
|
%
|
SPOT
|
1,603
|
|
|
7
|
|
|
1,217
|
|
|
5
|
|
|
4,685
|
|
|
7
|
|
|
3,081
|
|
|
5
|
|
||||
Simplex
|
1,557
|
|
|
7
|
|
|
1,856
|
|
|
8
|
|
|
4,838
|
|
|
7
|
|
|
4,751
|
|
|
8
|
|
||||
IGO
|
130
|
|
|
—
|
|
|
189
|
|
|
1
|
|
|
739
|
|
|
1
|
|
|
665
|
|
|
1
|
|
||||
Other
|
(160
|
)
|
|
(1
|
)
|
|
107
|
|
|
1
|
|
|
206
|
|
|
—
|
|
|
210
|
|
|
—
|
|
||||
Total
|
$
|
4,930
|
|
|
21
|
%
|
|
$
|
5,493
|
|
|
25
|
%
|
|
$
|
15,324
|
|
|
22
|
%
|
|
$
|
13,863
|
|
|
23
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Average number of subscribers for the period (three and nine months ended):
|
|
|
|
|
|
|
|
|
|
||||||
Duplex (1)
|
63,774
|
|
|
84,821
|
|
|
74,904
|
|
|
84,775
|
|
||||
SPOT (2)
|
232,658
|
|
|
218,416
|
|
|
228,816
|
|
|
230,722
|
|
||||
Simplex
|
269,110
|
|
|
215,691
|
|
|
252,709
|
|
|
202,907
|
|
||||
IGO
|
38,944
|
|
|
39,859
|
|
|
38,995
|
|
|
40,353
|
|
||||
ARPU (monthly):
|
|
|
|
|
|
|
|
|
|||||||
Duplex (1)
|
$
|
40.18
|
|
|
$
|
24.50
|
|
|
$
|
30.42
|
|
|
$
|
21.55
|
|
SPOT (2)
|
10.73
|
|
|
10.64
|
|
|
10.47
|
|
|
10.07
|
|
||||
Simplex
|
2.46
|
|
|
3.32
|
|
|
2.67
|
|
|
3.06
|
|
||||
IGO
|
1.83
|
|
|
2.10
|
|
|
2.25
|
|
|
2.03
|
|
||||
Number of subscribers (end of period):
|
|
|
|
|
|
|
|
||||||||
Duplex
|
65,645
|
|
|
85,219
|
|
|
65,645
|
|
|
85,219
|
|
||||
SPOT
|
235,737
|
|
|
220,363
|
|
|
235,737
|
|
|
220,363
|
|
||||
Simplex
|
274,065
|
|
|
217,655
|
|
|
274,065
|
|
|
217,655
|
|
||||
IGO
|
38,639
|
|
|
39,560
|
|
|
38,639
|
|
|
39,560
|
|
||||
Other
|
5,806
|
|
|
6,631
|
|
|
5,806
|
|
|
6,631
|
|
||||
Total
|
619,892
|
|
|
569,428
|
|
|
619,892
|
|
|
569,428
|
|
(1)
|
In 2014 we initiated a process to deactivate certain subscribers in our Duplex subscriber base who were either suspended or non-paying. We deactivated approximately 26,000 subscribers during the first quarter of 2014. For the three and nine months ended September 30, 2013, excluding these 26,000 deactivated subscribers from prior period metrics, average subscribers would have been 58,161 and 58,115, respectively, and ARPU would have been $35.73 and $31.44, respectively. For the nine months ended September 30, 2014, excluding these 26,000 deactivated subscribers from prior period metrics, average subscribers would have been 61,574 and ARPU would have been $37.00.
|
(2)
|
In 2013 we initiated a process to deactivate certain suspended subscribers in our SPOT subscriber base. We deactivated approximately 36,000 subscribers during the first quarter of 2013. For the nine months ended September 30, 2013, excluding these 36,000 deactivated subscribers from prior period metrics, average subscribers would have been 212,672 and ARPU would have been $10.92.
|
|
Nine Months Ended
|
||||||
|
September 30,
2014 |
|
September 30,
2013 |
||||
Net cash provided by operating activities
|
$
|
6,875
|
|
|
$
|
2,334
|
|
Net cash used in investing activities
|
(6,065
|
)
|
|
(30,615
|
)
|
||
Net cash provided by financing activities
|
9,139
|
|
|
23,042
|
|
||
Effect of exchange rate changes on cash
|
(136
|
)
|
|
90
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
9,813
|
|
|
$
|
(5,149
|
)
|
•
|
We not exceed maximum capital expenditures of $42.3 million for the full year 2014, $18.8 million for the full year 2015, $13.2 million for the full year 2016 and $15.0 million for each year thereafter. Pursuant to the terms of the Facility Agreement, if, in any relevant period, the capital expenditures are less than the permitted amount for that relevant period, a permitted excess amount may be added to the maximum amount of capital expenditures in the next period;
|
•
|
We maintain at all times a minimum liquidity balance of $4.0 million;
|
•
|
We achieve for each period the following minimum adjusted consolidated EBITDA (as defined in the Facility Agreement):
|
Period
|
|
Minimum Amount
|
||
7/1/14-12/31/14
|
|
$
|
14.1
|
million
|
1/1/15-6/30/15
|
|
$
|
17.0
|
million
|
7/1/15-12/31/15
|
|
$
|
23.5
|
million
|
•
|
Beginning in July 2013, we maintain a minimum debt service coverage ratio of 1.00:1; and
|
•
|
We maintain a maximum net debt to adjusted consolidated EBITDA ratio of 62.00:1, gradually decreasing to 2.50:1 through 2022.
|
|
|
Payments through
|
|
Estimated Future Payments
|
||||||||||||||||||||
Capital Expenditures
|
|
September 30,
2014 |
|
Remaining
2014
|
|
2015
|
|
2016
|
|
Thereafter
|
|
Total
|
||||||||||||
Thales Second-Generation Satellites
|
|
$
|
622,690
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
622,690
|
|
|
Arianespace Launch Services
|
|
216,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
216,000
|
|
||||||
Launch Insurance
|
|
39,903
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,903
|
|
||||||
Other Capital Expenditures and Capitalized Labor
|
|
54,631
|
|
|
5,851
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,482
|
|
||||||
Total
|
|
$
|
933,224
|
|
|
$
|
5,851
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
939,075
|
|
|
|
Payments through
|
|
Estimated Future Payments
|
||||||||||||||||||||
Capital Expenditures
|
|
September 30,
2014 |
|
Remaining
2014
|
|
2015
|
|
2016
|
|
Thereafter
|
|
Total
|
||||||||||||
Hughes second-generation ground component (including research and development expense)
|
|
$
|
93,090
|
|
|
$
|
1,569
|
|
|
$
|
9,744
|
|
|
$
|
1,610
|
|
|
$
|
—
|
|
|
$
|
106,013
|
|
Ericsson ground network
|
|
6,049
|
|
|
6,774
|
|
|
13,676
|
|
|
5,643
|
|
|
—
|
|
|
32,142
|
|
||||||
Other Capital Expenditures
|
|
1,583
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,583
|
|
||||||
Total
|
|
$
|
100,722
|
|
|
$
|
8,343
|
|
|
$
|
23,420
|
|
|
$
|
7,253
|
|
|
$
|
—
|
|
|
$
|
139,738
|
|
•
|
Updates have been made to the valuation model to correct the identified error.
|
•
|
Additional analysis and review procedures will be performed by the independent valuation firm and discussed with management.
|
•
|
Management implemented additional review procedures over the outputs of the valuation model.
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1†
|
|
Purchase Agreement by and between Globalstar, Inc. and Ericsson Inc. effective as of July 22, 2014
|
|
|
|
10.2†
|
|
Amendment No.12 to Contract between Globalstar, Inc. and Hughes Network Systems LLC dated as of October 16, 2014
|
|
|
|
31.1
|
|
Section 302 Certification of the Chief Executive Officer
|
|
|
|
31.2
|
|
Section 302 Certification of the Chief Financial Officer
|
|
|
|
32.1
|
|
Section 906 Certification of the Chief Executive Officer
|
|
|
|
32.2
|
|
Section 906 Certification of the Chief Financial Officer
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
†
|
Portions of the exhibits have been omitted pursuant to a request for confidential treatment filed with the Commission. The omitted portions have been filed with the Commission.
|
|
|
GLOBALSTAR, INC.
|
|
|
|
|
|
By:
|
|
|
/s/ James Monroe III
|
Date: November 6, 2014
|
|
|
|
|
James Monroe III
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
1. Scope of Agreement
|
3
|
|
2. Order of Precedence
|
4
|
|
3. Options
|
4
|
|
4. Term
|
5
|
|
5. Statement of Work
|
5
|
|
6. Performance Schedule
|
6
|
|
7. Acceptance
|
6
|
|
8. Access to Work in Progress
|
8
|
|
9. Delivery, Title and Risk of Loss
|
8
|
|
10. Prices and Fees
|
9
|
|
11. Out-of-Pocket Expenses
|
9
|
|
12. Taxes and Duties
|
9
|
|
13. Invoicing and Payment
|
10
|
|
14. Intellectual Property Rights
|
11
|
|
15. Intellectual Property Rights Indemnity
|
13
|
|
16. Indemnification and Insurance
|
15
|
|
17. Globalstar-Furnished Facilities
|
16
|
|
18. Warranty
|
16
|
|
19. Confidentiality
|
17
|
|
20. Limitation of Liability
|
18
|
|
21. Termination for Cause
|
18
|
|
22. Termination for Convenience/ Stop Work Orders
|
19
|
|
23. Government Authorizations
|
20
|
|
24. Restriction of Hazardous Substances (“ROHS”); Waste Electrical and ElectronicEquipment (“WEEE”); and Packaging and PackagingWaste
|
22
|
|
25. Assignment of Agreement
|
23
|
|
26. Key Personnel
|
23
|
|
27. Communication and Authority
|
24
|
|
28. Dispute Resolution
|
25
|
|
29. Changes
|
25
|
|
30. Public Release of Information
|
26
|
|
31. Force Majeure
|
27
|
|
32. Relationship
|
28
|
|
Exhibit D
|
Statement of Work for Globalstar 2
nd
Generation Gateway Core Network Development
|
•
|
Solution Design: payment terms to be outlined in a Statement of Work
|
•
|
Time & Material Professional Services: monthly in arrears based on actual hours
|
•
|
Program Management – monthly invoicing in arrears
|
•
|
Technical Management – monthly invoicing in arrears
|
•
|
Testing and Verification Services – monthly invoicing in arrears
|
•
|
System Integration Services – monthly invoicing in arrears
|
•
|
New feature development or Right-To-Use (e g HPA) – payment terms to be outlined in a Statement of Work
|
•
|
Hardware/Software – 100% on delivery to a US destination
|
•
|
Installation and Integration services for each site will be invoiced on a monthly basis for each site
|
•
|
In-Service Support Services – Quarterly in advance
|
•
|
Training: 100% upon course completion
|
A.
|
Each party shall during the term of this Agreement and for a period of five (5) years thereafter, keep secret and confidential all know-how or other business,
|
B.
|
Reserved
|
C.
|
The foregoing provisions of this Article shall not apply to know‑how and information which:
|
(a)
|
information or evidence of compliance as may from time to time be required by any EU Member State Government relating to the Hardware;
|
(b)
|
Hardware or component design;
|
(c)
|
marking and labeling Hardware; and
|
(d)
|
EU audit requests of Globalstar.
|
Position
|
Name
|
Program Manager
|
[*]
|
System Integration and Services
|
[*]
|
(a)
|
If the parties have reached agreement about the adjustments to be made in the Agreement, the parties shall execute a formal amendment to the Agreement and Ericsson shall proceed with implementation as agreed; or
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1.
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[This paragraph If applicable] The revised Exhibit X, [Description of Exhibit], dated _____________ and attached hereto replaces Exhibit X, [Description of exhibit] of the original Contract.
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2.
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The new Pricing Schedule, Exhibit Y, for additional work to be performed under the Contract for [description of work] attached hereto, is hereby incorporated into the Contract.
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3.
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[This paragraph If applicable] The new Statement of Work, Exhibit Z, for additional work to be performed under the Contract for [description of work], attached hereto, is hereby incorporated into the Contract.
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4.
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[This paragraph If applicable] The new Statement of Compliance - Requirements, Exhibit T, for additional work to be performed under the Contract for [description of work], attached hereto, is hereby incorporated into the Contract.
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Node
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Product group
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Part Number
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Product Name
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Description
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North America
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France
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Brazil
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CSCF
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CSCF|ESAPC 13B|HSS|MTAS
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ROJ 208 844/3
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Printed Board Assemb
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GEP3
-
HD600
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[*]
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[*]
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[*]
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CSCF|HSS|MTAS|SAPC
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ROJ 208 814/2
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Printed Board Assemb
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GEP2
-
12GB
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[*]
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CSCF|HSS|MTAS|SAPC
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ROJ 208 815/2
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Printed Board Assemb
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GEP2
-
12G
-
SAS
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[*]
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CSCF|HSS|MTAS|SAPC|SBG
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ROJ 208 368/10
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Printed Board Assemb
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MXB5
-
LE PIU
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[*]
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CUDB
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CUDB 11B|PG 7.0
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ROJ 208 465/1
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Printed Board Assemb
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NWI
-
E 450A
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[*]
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CUDB 11B|ESAPC 13B|PG 7.0
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BFB 140 13/2
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Plug
-
in Unit
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PFM LOD
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[*]
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GGSN
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EPG 2012A
-
M
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1/ROA 219 7793
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Printed Board Assemb
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SFP 1000Base
-
T
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[*]
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[*]
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[*]
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EPG 2012A
-
M
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ROA 219 7813/3
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Printed Board Assemb
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M120 Control Board, Spare
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[*]
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[*]
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[*]
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EPG 2012A
-
M
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ROA 219 7814/3
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Printed Board Assemb
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Routing Engine Board, Redundant and Spare
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[*]
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[*]
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[*]
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EPG 2012A
-
M
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ROA 219 7815/1
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Printed Board Assemb
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M120 Flexible PIC Concentrator (accepts
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[*]
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[*]
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[*]
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EPG 2012A
-
M
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ROA 219 7817/1
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Printed Board Assemb
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Forwarding Engine Board (FEB)
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[*]
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[*]
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[*]
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EPG 2012A
-
M
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ROA 219 7819/1
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Printed Board Assemb
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4 Port Gigabit Ethernet PIC
-
Type 2
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[*]
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[*]
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[*]
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EPG 2012A
-
M
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ROA 219 7820/1
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Printed Board Assemb
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Multi Services 400 PIC, Type 2
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[*]
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[*]
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[*]
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EPG 2012A
-
M
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ROA 219 7821/1
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Printed Board Assemb
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GGSN3 Services PIC Type
-
2
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[*]
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[*]
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[*]
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EPG 2012A
-
M
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BMR 910 426/3
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D.c. Converter
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M120 DC Power Entry Module, Spare
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[*]
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[*]
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[*]
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GGSN
-
MPG 2010A
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1/ROA 219 7793
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Printed Board Assemb
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SFP 1000Base
-
T
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[*]
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GGSN
-
MPG 2010A
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BMR 910 426/3
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D.c. Converter
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M120 DC Power Entry Module, Spare
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[*]
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GGSN
-
MPG 2010A
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ROA 219 7813/3
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Printed Board Assemb
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M120 Control Board, Spare
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[*]
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GGSN
-
MPG 2010A
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ROA 219 7814/3
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Printed Board Assemb
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Routing Engine Board, Redundant and Spare
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[*]
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GGSN
-
MPG 2010A
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ROA 219 7815/1
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Printed Board Assemb
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M120 Flexible PIC Concentrator (accepts
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[*]
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GGSN
-
MPG 2010A
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ROA 219 7817/1
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Printed Board Assemb
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Forwarding Engine Board (FEB)
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[*]
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GGSN
-
MPG 2010A
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ROA 219 7819/1
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Printed Board Assemb
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4 Port Gigabit Ethernet PIC
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Type 2
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[*]
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GGSN
-
MPG 2010A
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ROA 219 7820/1
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Printed Board Assemb
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Multi Services 400 PIC, Type 2
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[*]
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GGSN
-
MPG 2010A
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ROA 219 7821/1
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Printed Board Assemb
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GGSN3 Services PIC Type
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2
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[*]
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HLR
-
FE
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HLR
-
FE
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BFB 140 13/1
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Plug
-
in Unit
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PFM HOD
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[*]
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HLR
-
FE
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ROJ 208 385/1
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Printed Board Assemb
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EXB5
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[*]
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HLR
-
FE
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BFD 508 020/1
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Equipped Magazine
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EGEM Subrack+Backplane no PIU
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[*]
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HLR
-
FE
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BFD 509 08/6
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Fan
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FAN
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[*]
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HLR
-
FE
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ROJ 208 817/2
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Printed Board Assemb
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CPUB2
-
24QC
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[*]
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HLR
-
FE
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ROJ 208 841/21
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Printed Board Assemb
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APUB2
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[*]
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HLR
-
FE
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ROJ 208 882/2
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Printed Board Assemb
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GED
-
DVD
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[*]
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HSS
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CSCF|ESAPC 13B|HSS|MTAS
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ROJ 208 844/3
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Printed Board Assemb
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GEP3
-
HD600
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[*]
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CSCF|HSS|MTAS|SAPC
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ROJ 208 814/2
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Printed Board Assemb
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GEP2
-
12GB
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[*]
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CSCF|HSS|MTAS|SAPC
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ROJ 208 815/2
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Printed Board Assemb
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GEP2
-
12G
-
SAS
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[*]
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CSCF|HSS|MTAS|SAPC|SBG
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ROJ 208 368/10
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Printed Board Assemb
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MXB5
-
LE PIU
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[*]
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MTAS
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CSCF|ESAPC 13B|HSS|MTAS
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ROJ 208 844/3
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Printed Board Assemb
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GEP3
-
HD600
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[*]
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[*]
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[*]
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CSCF|HSS|MTAS|SAPC
|
ROJ 208 814/2
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Printed Board Assemb
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GEP2
-
12GB
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[*]
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Node
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Product group
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Part Number
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Product Name
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Description
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Quantity of Spares
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North America
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France
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Brazil
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CSCF|HSS|MTAS|SAPC
|
ROJ 208 815/2
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Printed Board Assemb
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GEP2-12G-SAS
|
[*]
|
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CSCF|HSS|MTAS|SAPC|SBG
|
ROJ 208 368/10
|
Printed Board Assemb
|
MXB5-LE PIU
|
[*]
|
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PG
|
CUDB 11B|PG 7.0
|
ROJ 208 465/1
|
Printed Board Assemb
|
NWI-E 450A
|
[*]
|
|
|
|
CUDB 11B|ESAPC 13B|PG 7.0
|
BFB 140 13/2
|
Plug-in Unit
|
PFM LOD
|
[*]
|
|
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SAPC
|
CUDB 11B|ESAPC 13B|PG 7.0
|
BFB 140 13/2
|
Plug-in Unit
|
PFM LOD
|
[*]
|
[*]
|
[*]
|
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CSCF|ESAPC 13B|HSS|MTAS
|
ROJ 208 844/3
|
Printed Board Assemb
|
GEP3-HD600
|
[*]
|
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CSCF|HSS|MTAS|SAPC
|
ROJ 208 814/2
|
Printed Board Assemb
|
GEP2-12GB
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[*]
|
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CSCF|HSS|MTAS|SAPC
|
ROJ 208 815/2
|
Printed Board Assemb
|
GEP2-12G-SAS
|
[*]
|
|
|
|
CSCF|HSS|MTAS|SAPC|SBG
|
ROJ 208 368/10
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Printed Board Assemb
|
MXB5-LE PIU
|
[*]
|
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SBG
|
SBG
|
ROJ 208 135/20
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Printed Board Assemb
|
ISER GigE FX SX
|
[*]
|
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SBG
|
ROJ 208 813/2
|
Printed Board Assemb
|
GEP2-12GB4F
|
[*]
|
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SBG
|
ROJ 208 841/1
|
Printed Board Assemb
|
GEP_SCD2GBS
|
[*]
|
|
|
|
CSCF|HSS|MTAS|SAPC|SBG
|
ROJ 208 368/10
|
Printed Board Assemb
|
MXB5-LE PIU
|
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SBG
|
BFB14013/2
|
Plug-in Unit
|
PFM LOD
|
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SBG
|
ROJ208135/20
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Printed Board Assemb
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ISER GigE FX SX
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SBG
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ROJ208371/4
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Printed Board Assemb
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MPP4-GE
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SBG
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ROJ208386/2
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Printed Board Assemb
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SCXB2
|
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SBG
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ROJ208840/3
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Printed Board Assemb
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GEP3-HD300
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SBG
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ROJ208841/2
|
Printed Board Assemb
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GEP2-4-QC-HD
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SE100
|
SMARTEDGE 100
|
BFL 901 027/1
|
Subrack
|
CHASSIS DC, SE100
|
[*]
|
[*]
|
[*]
|
|
SMARTEDGE 100
|
ROA 128 3207/1
|
Printed Board Assemb
|
2XGBIT ETH, COPPER MEDIA IF, SE100
|
[*]
|
[*]
|
[*]
|
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|
|
SGSN MME
|
SGSN-MME 2013A MKVIII
|
KDU 137 557/5
|
Converter
|
O/E conv.; 6x1G, 6x10G
|
[*]
|
[*]
|
[*]
|
|
SGSN-MME 2013A MKVIII
|
RDH 102 44/1
|
Optical Transceiver
|
TRX MM 1000Base-SX LC-SFP -5/+85C (1400421-0010)
|
[*]
|
[*]
|
[*]
|
|
SGSN-MME 2013A MKVIII
|
RDH 102 50/1
|
Optical Transceiver
|
SFP+ MM 10GB-SR/SW 2-300m 850nm 0/+70C VCSEL 3.3V
|
[*]
|
[*]
|
[*]
|
|
SGSN-MME 2010A MKVI
|
ROJ 208 137/1
|
Printed Board Assemb
|
FSBv4
|
[*]
|
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|
SGSN-MME 2010A MKVI
|
ROJ 208 138/1
|
Printed Board Assemb
|
PEBv4
|
[*]
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SGSN-MME 2010A MKVI
|
ROJ 208 143/1
|
Printed Board Assemb
|
IBTEv4
|
[*]
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SGSN-MME 2010A MKVI
|
ROJ 208 143/10
|
Printed Board Assemb
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IBASv4
|
[*]
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SGSN-MME 2010A MKVI
|
ROJ 208 143/2
|
Printed Board Assemb
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IBENv4
|
[*]
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SGSN-MME 2010A MKVI
|
ROJ 208 143/9
|
Printed Board Assemb
|
IBS7v4
|
[*]
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Extreme
|
X460
|
16408
|
Switch
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Summit X460-48tDC
|
[*]
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1.
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Each party traveling on Globalstar business is responsible for ensuring that all of his or her travel and other business expenses are necessary and proper and that such expenses are minimized.
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2.
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Globalstar expects all persons traveling at its expense to use good business judgment in order to assure that no unnecessary expenses are incurred, and that necessary expenses are limited to amounts that are directly related to and materially advance the business purpose of the travel.
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3.
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Globalstar expects all persons traveling at its expense to utilize Internet vendors, promotional packages, alternative travel hours and arrival / departure locations, as well as reduced fares with restrictions and limited availability whenever consistent with the business purpose of the travel.
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4.
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The traveler should, in a timely manner, make all the necessary reservations in the traveler’s own name.
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5.
|
In the absence of valid business reasons to the contrary, early reservations are encouraged in those instances in which they are likely to reduce costs. Except in cases where a trip is likely to be cancelled, the lowest available non-refundable fares should be utilized. If changes in itinerary are required, the change fees will be reimbursed.
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6.
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Coach (i.e. economy) air travel, for both domestic and international travel, at the lowest fare basis available to the traveler for an itinerary that is conducive to the business nature of the travel, is authorized. For any flight more than six hours, travel may be arranged so as to arrive the day before the commencement of work.
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7.
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All expenses associated with personal activities (e.g., stopovers, side trips and non-business related activities) are the personal responsibility of the traveler.
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8.
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All incremental costs of spouses or other traveling companions accompanying the traveler are the responsibility of the traveler.
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9.
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Commercial ground transportation costs in excess of the higher of local taxi or rental car costs is not authorized.
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10.
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Lodging arrangements should be appropriate for business and should not exceed moderate cost for the local area.
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11.
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Actual and reasonable cost of meals and reasonable and customary beverage actually consumed shall be reimbursed. Costs of indulgent or lavish dining will not be reimbursed.
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12.
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Laundry and dry cleaning charges are reimbursable only for travel assignments exceeding 3 consecutive days and then only if necessary and reasonable for business purposes.
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13.
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Service gratuities should not exceed reasonable and customary.
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14.
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All entertainment expenses (including business lunches, dinners, etc.) must serve definite business purposes with a reasonable expectation of deriving business benefits. Entertainment expenses other than dining must be authorized in advance.
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15.
|
Receipts must be originals.
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16.
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Miscellaneous expenses need a detailed explanation.
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17.
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All expenses except long-term parking and car rental need to be broken out on a daily basis.
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18.
|
Travel reimbursement must show cities to and from and purpose of travel.
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19.
|
Conference expenses must be documented with a listing of attendees and subject of discussion.
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20.
|
In-room movies and mini-bar purchases are the traveler’s expense and will not be reimbursed.
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21.
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Car rental should be a standard compact-size car. Mid-size is authorized if two or more people are traveling together.
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i.
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Domestic car rental - Globalstar will reimburse for the extra car insurance, if that is elected consistent with Ericsson policy.
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ii.
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International car rental - Globalstar will reimburse for all available extra insurance, which should be taken.
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22.
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For international travel, currency exchange rate must be documented with an exchange rate receipt or copy of web page used.
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|
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GLOBALSTAR, INC.
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HUGHES NETWORK SYSTEMS, LLC
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BY: /s/ Paul A. Monte
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BY: /s/ Sean P. Fleming
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Name: Paul A. Monte
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Name: Sean P. Fleming
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Title: Vice President, Engineering & Operations
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Title: VP & Associate General Counsel
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|
Revision
|
Issue Date
|
Scope
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A
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5/1/2008
|
Contract version
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B
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6/16/2009
|
Contract amendment
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C
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8/28/2009
|
Contract amendment
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D
|
3/24/2010
|
Contract amendment
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E
|
11/4/2011
|
Contract amendment
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F
|
2/1/2012
|
Contract amendment
|
G
|
9/4/2012
|
Contract amendment # 8
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H
|
1/18/2013
|
Contract amendment # 9
|
J
|
12/17/2013
|
Contract amendment # 11
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K
|
10/16/2014
|
Contract amendment # 12
|
SECTION
|
PAGE
|
1.0 PRICE SCHEDULE
|
1-5
|
1.1 BASELINE RAN AND UTS
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1-5
|
1.2 OPTIONS
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1-6
|
1.3 TIME AND MATERIAL (T&M) RATE
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1-7
|
2.0 PAYMENT MILESTONES AND PLAN
|
2-1
|
2.1 PAYMENT MILESTONES AND PLAN FOR RAN & UTC
|
2-1
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2.2 PAYMENT MILESTONES AND RAN FOR CN009
|
2-3
|
2.3 PAYMENT MILESTONES AND PLAN FOR AMENDMENT 12 DESIGN CHANGES
|
2-4
|
BASELINE
|
||
Line Item
|
Supplies/Services
|
Price (USD)
|
NON-RECURRING ENGINEERING (NRE)
|
$ [*]
|
|
1
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RAN Non-Recurring Engineering (NRE);
Packet RAN, with Iu-PS Rel 7, 256 Kbps return bearer, 1 Mbps forward bearer
Delivery of One Test Gateway (incl. 12 mo. Warranty)
12 months warranty & maintenance for 9 RANs, incl. 1200 hours of engineering support;
Additional Engineering at T&M Rates
(Test UTs NRE and Delivery not included)
UTS Non-Recurring Engineering (NRE): Satellite Air Interface Chip with Evaluation Platform
Remote Terminal Diagnostic & Monitoring (RTDM) Software Tool w/unlimited license
12 months warranty & maintenance |
$ [*]
|
2
|
Documentation and Program Reviews
|
Included
|
3
|
Operations and Maintenance Training
|
$ [*]
|
4
|
RAN and UTS NRE Additions
|
$ [*]
|
|
Multi-country Legal Interception
|
$
[*]
|
|
UT Diagnostic Feed
|
Included
|
|
Per-User Forward Power Control
|
Included
|
|
Multi-country certifications (Per SOW)
|
Included
|
|
Support E.911 Calling without GPS
|
$
[*]
|
|
9.6 kb/s bearer in Return Direction
|
Included
|
|
Additional Diagnostics in RTDM (Spec - Exhibit B3)
|
$
[*]
|
|
Gateway-to-Gateway Handover for handheld terminal (Delivery date 3 months after the later of RAN #2 OAT & Provisional Acceptance)
|
$
[*]
|
|
SNMP Configuration MIB
|
Included
|
|
RAN Diagnostic Specifications
|
Included
|
RECURRING
|
$ [*]
|
|
5
|
Build, delivery, installation, performance verification and testing of 9 RANS (including first article)
Each RAN equipped with 120 VEC or 480 Kb/s capacity, one FDM Channel (same FDM1 (1.25MHz) or FDM2 (2.5 MHz) in all RANs, as selected by SRR) Delivery Ex-Works Maryland, USA |
$ [*]
|
|
Design, build, delivery, installation, performance verification and testing of 9 RANs
|
$
[*]
|
|
Credit for Customer performing Installation & Commissioning for RAN #6,#7,#8 & #9
(Contractor to provide on-site supervision only for installation, performance verification and testing)
|
$
[*]
|
6
|
Critical Spare Parts - located at each RAN Site
|
Included
|
7
|
Critical Spare Parts - located at Customer Depot
|
$ [*]
|
8
|
Manufacture of prototype & pre-production Satellite Air Interface Chips for delivery to Globalstar
|
$ [*]
|
9
|
Expansion of capacity from 120 VEC/480 Kbps to 200 VEC/800 Kbps in the same FDM channel; for all 9 RANs
|
$ [*]
|
|
Expansion of capacity from 120 VEC/480 Kbps to 200 VEC/800 Kbps in the same FDM channel; for Laboratory RAN in Milpitas, CA.
|
$
[*]
|
10
|
CN006 Design Implementations
|
$ [*]
|
|
Maximal Ratio Combining RTN
|
Included
|
|
Configurability of Paging/Alerting Parameters
|
Included
|
|
Turn on Additional FDM Channels based on Traffic Demand to conserve Satellite Power
|
Included
|
|
RAN Limit CCE Transmit Power based on Type and Frequency
|
Included
|
|
Disable Gateway RFT by Operator Command, overriding RAI
|
Included
|
|
Diagnostic Tools:
(a)
Display/Logging of Decoded Control Channel Information
(b)
Display and Log Measurements made by SAIC Hardware Accelerator
(c)
RTDM can selectively block Overhead Channels
(d)
RTDM Playback
(e)
Display Radio Resource Records
|
Included
|
|
Alerting as an Optional Feature in SAIC
|
Included
|
|
Increase Output Power of Evaluation Platform by 0.75dB
|
Included
|
|
RAI Access Channel Issues to support Hot Spots
|
Included
|
|
Operator Configurable Beam Boundary Definition per Satellite
|
Included
|
|
Configurability of Frequency Search Algorithm
|
Included
|
|
TOTAL CONTRACT PRICE
|
$ [*]
|
OPTIONS
|
||
Line Item
|
Supplies/Services
|
Price (USD)
|
1
|
Unit Price for Additional RANs up to Quantity 25 (Incl. 12 mo h/w Warranty)
|
$ [*]
|
|
Option Validity Period: EDC+79 months (December 2014)
|
|
2
|
Annual Extended Software Maintenance & Support (second year onwards)
Includes RAN & RTDM Software Includes 1200 hours of engineering support (Ex-works) per year Additional engineering support available at T&M rates Start date as defined in Exhibit A, Independeent of number of RANs SOW as per Exhibit D (on-site support subject to T&M rates) Total price per year |
$ [*]
|
|
Option Validity Period: EDC+102 months
|
|
3
|
Annual Extended Hardware Warranty per RAN
Start date as defined in Exhibit A SOW as per Exhibit D (on-site support excluded) |
$ [*]
|
|
Option Validity Period: EDC+86 months
|
|
4
|
Bridge Extended Hardware Warranty per RAN per Month
Available only in the first partial year of extended warranty period of each RAN Start date as defined in Exhibit A SOW as per Exhibit D (on-site support excluded) Price per RAN per month (Monthly rate derived by dividing the prevailing option 3 price by 12 at the time of election) |
$ [*]
|
|
Option Validity Period: concurrent with Option 3
|
|
5
|
Broadcast Audio/Visual capability in the RAN
|
$ [*]
|
|
Option Validity Period: EDC+2 months
|
|
6
|
Expansion of capacity from 200 VEC/800Kbps to 875VEC/3.5Mbps in the same FDM channel; Price per RAN
|
$ [*]
|
|
Option Validity Period: EDC+73 months
|
|
7
|
Expansion of capacity from one FDM channel with 200VEC/800 Kbps to two FDM channels, 120 VEC/480Kbps in second FDM channel; Both FDM Channels operate within the same 7.5MHz of spectrum
|
$ [*]
|
|
Option Validity Period: EDC+73 months
|
|
8
|
Expansion of capacity from one FDM channel with 200VEC/800 Kbps to two FDM channels, 200 VEC/800Kbps in each FDM channel; Both FDM Channels operate within the same 7.5MHz of spectrum
|
$ [*]
|
|
Option Validity Period: EDC+73 months
|
|
9
|
Expansion of capacity from one FDM channel with 875VEC/3.5 Mbps to two FDM channels, 875 VEC/3.5Mbps in each FDM channel; Both FDM Channels operate within the same 7.5MHz of spectrum
|
$ [*]
|
|
Option Validity Period: EDC+73 months
|
|
10
|
1 Mb/s forward bearer capability in the satellite Air Interface Chip
|
|
|
NRE
|
$ [*]
|
|
Recurring incremental cost per chip
|
$ [*]
|
|
Option Validity Period: EDC+2 months
|
|
11
|
Reserved
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
License of Satellite Air Interface Chip Software & Firmware only for use in Customer's own developed Chip (one license per chip)
|
|
|
Annual quantity = 250,000
|
[*]
|
|
Annual quantity = 500,000
|
[*]
|
|
Annual quantity = 1 million +
|
[*]
|
|
Option Validity Period: EDC+96 months
|
|
13
|
Unit Pricing for One-Time Order of Satellite Air Interface Chips
Option Validity Period: exercisable one-time only; expires January 24, 2013
Subject to the following terms: one-time order; 100% payment received Contractor no later than January 24, 2013; order quantity must be in batches of 37,500 units
|
[*]
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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.
|
I am 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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my 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 my conclusion 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
(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: November 6, 2014
|
||
|
|
|
By:
|
/s/ James Monroe III
|
|
|
James Monroe III
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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.
|
I am 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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my 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 my conclusion 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
(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: November 6, 2014
|
||
|
|
|
By:
|
/s/ Rebecca S. Clary
|
|
|
Rebecca S. Clary
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
Dated: November 6, 2014
|
|
|
|
|
|
|
By:
|
/s/ James Monroe III
|
|
|
James Monroe III
|
|
|
Chief Executive Officer
|
Dated: November 6, 2014
|
|
|
|
|
|
|
By:
|
/s/ Rebecca S. Clary
|
|
|
Rebecca S. Clary
|
|
|
Chief Financial Officer
|