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
x
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Accelerated filer
¨
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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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PART I - F
INANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II - O
THER INFORMATION
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Item 1.
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Legal Proceedings.
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Item 1A.
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds.
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Item 3.
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Defaults Upon Senior Securities.
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Item 4.
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Mine Safety Disclosures.
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Item 5.
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Other Information.
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Item 6.
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Exhibits
.
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Three Months Ended
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||||||
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March 31,
2015 |
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March 31,
2014 |
||||
Revenue:
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||||
Service revenues
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$
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17,107
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$
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16,249
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Subscriber equipment sales
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3,915
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4,287
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Total revenue
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21,022
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20,536
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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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7,434
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6,938
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Cost of subscriber equipment sales
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3,131
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3,072
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Marketing, general and administrative
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8,596
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7,769
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Depreciation, amortization and accretion
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19,046
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23,332
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Total operating expenses
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38,207
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41,111
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Loss from operations
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(17,185
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)
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(20,575
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)
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Other income (expense):
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Loss on extinguishment of debt
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(65
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)
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(10,195
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)
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Interest income and expense, net of amounts capitalized
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(8,517
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)
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(10,921
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)
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Derivative loss
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(107,865
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)
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(209,370
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)
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Other
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4,133
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713
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Total other income (expense)
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(112,314
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)
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(229,773
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)
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Loss before income taxes
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(129,499
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)
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(250,348
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)
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Income tax expense
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228
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|
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193
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Net loss
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$
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(129,727
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)
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$
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(250,541
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)
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Other comprehensive loss:
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Foreign currency translation
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(1,290
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)
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(1,235
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)
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Total comprehensive loss
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$
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(131,017
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)
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$
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(251,776
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)
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Net loss per common share:
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Basic
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$
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(0.13
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)
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$
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(0.29
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)
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Diluted
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(0.13
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)
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(0.29
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)
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Weighted-average shares outstanding:
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Basic
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1,000,845
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849,321
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Diluted
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1,000,845
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849,321
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March 31,
2015 |
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December 31, 2014
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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13,655
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$
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7,121
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Accounts receivable, net of allowance of $4,727 and $4,788, respectively
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15,300
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15,015
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Inventory
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13,584
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14,734
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Prepaid expenses and other current assets
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7,283
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7,944
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Total current assets
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49,822
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44,814
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Property and equipment, net
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1,100,504
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1,113,560
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Restricted cash
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37,918
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37,918
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Deferred financing costs, net
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60,989
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63,862
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Intangible and other assets, net of accumulated amortization of $6,138 and $5,669, respectively
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9,436
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8,266
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Total assets
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$
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1,258,669
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$
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1,268,420
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Current portion of long-term debt
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$
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6,450
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$
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6,450
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Accounts payable, including contractor payables of $0 and $1,180, respectively
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5,010
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6,922
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Accrued contract termination charge
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19,023
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21,308
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Accrued expenses
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26,705
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22,342
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Payables to affiliates
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376
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481
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Deferred revenue
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21,481
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21,740
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Total current liabilities
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79,045
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79,243
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Long-term debt, less current portion
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626,653
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623,640
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Employee benefit obligations
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5,478
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5,499
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Derivative liabilities
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548,526
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441,550
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Deferred revenue
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6,517
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6,572
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Debt restructuring fees
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20,795
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20,795
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Other non-current liabilities
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11,233
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12,205
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Total non-current liabilities
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1,219,202
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1,110,261
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Commitments and contingent liabilities (Notes 7 and 8)
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Stockholders’ (deficit) equity:
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Preferred Stock of $0.0001 par value; 100,000,000 shares authorized and none issued and outstanding at March 31, 2015 and December 31, 2014
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—
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—
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Series A Preferred Convertible Stock of $0.0001 par value; one share authorized and none issued and outstanding at March 31, 2015 and December 31, 2014
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—
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—
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Voting Common Stock of $0.0001 par value; 1,200,000,000 shares authorized; 869,594,366 and 864,378,563 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively
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87
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86
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Nonvoting Common Stock of $0.0001 par value; 400,000,000 shares authorized; 134,008,656 shares issued and outstanding at March 31, 2015 and December 31, 2014
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13
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13
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Additional paid-in capital
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1,516,141
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1,503,619
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Accumulated other comprehensive loss
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(4,188
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)
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(2,898
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)
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Retained deficit
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(1,551,631
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)
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(1,421,904
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)
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Total stockholders’ (deficit) equity
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(39,578
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)
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78,916
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Total liabilities and stockholders’ equity
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$
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1,258,669
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$
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1,268,420
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Three Months Ended
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||||||
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March 31,
2015 |
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March 31,
2014 |
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Cash flows provided by (used in) operating activities:
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|
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Net loss
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$
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(129,727
|
)
|
|
$
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(250,541
|
)
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Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
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|
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Depreciation, amortization and accretion
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19,046
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|
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23,332
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|
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Change in fair value of derivative assets and liabilities
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107,865
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|
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209,370
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|
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Stock-based compensation expense
|
818
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|
628
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Amortization of deferred financing costs
|
2,336
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2,541
|
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Provision for bad debts
|
690
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|
|
597
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Noncash interest and accretion expense
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2,578
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|
|
4,078
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Loss on extinguishment of debt
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65
|
|
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10,195
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Other, net
|
304
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|
|
864
|
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Unrealized foreign currency (gain) loss
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(4,030
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)
|
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(1,090
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)
|
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Changes in operating assets and liabilities:
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|
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|
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Accounts receivable
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(1,309
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)
|
|
(865
|
)
|
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Inventory
|
794
|
|
|
2,087
|
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Prepaid expenses and other current assets
|
201
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|
|
(695
|
)
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Other assets
|
(476
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)
|
|
(629
|
)
|
||
Accounts payable and accrued expenses
|
3,641
|
|
|
2,897
|
|
||
Payables to affiliates
|
(105
|
)
|
|
30
|
|
||
Other non-current liabilities
|
(163
|
)
|
|
(119
|
)
|
||
Deferred revenue
|
(7
|
)
|
|
1,119
|
|
||
Net cash provided by operating activities
|
2,521
|
|
|
3,799
|
|
||
Cash flows provided by (used in) investing activities:
|
|
|
|
|
|
||
Second-generation ground-related costs (including interest)
|
(4,018
|
)
|
|
(1,366
|
)
|
||
Property and equipment additions
|
(1,790
|
)
|
|
(428
|
)
|
||
Net cash used in investing activities
|
(5,808
|
)
|
|
(1,794
|
)
|
||
Cash flows provided by (used in) financing activities
|
|
|
|
|
|
||
Proceeds from issuance of stock to Terrapin
|
10,000
|
|
|
—
|
|
||
Payments of deferred financing costs
|
—
|
|
|
(164
|
)
|
||
Proceeds from issuance of common stock and exercise of warrants
|
61
|
|
|
310
|
|
||
Net cash provided by financing activities
|
10,061
|
|
|
146
|
|
||
Effect of exchange rate changes on cash
|
(240
|
)
|
|
36
|
|
||
Net increase in cash and cash equivalents
|
6,534
|
|
|
2,187
|
|
||
Cash and cash equivalents, beginning of period
|
7,121
|
|
|
17,408
|
|
||
Cash and cash equivalents, end of period
|
$
|
13,655
|
|
|
$
|
19,595
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Cash paid for:
|
|
|
|
|
|
||
Interest
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes
|
—
|
|
|
29
|
|
||
|
|
|
|
||||
Supplemental disclosure of non-cash financing and investing activities:
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Increase in non-cash capitalized accrued interest for second-generation ground-related costs
|
474
|
|
|
445
|
|
||
Capitalization of the accretion of debt discount and amortization of prepaid financing costs
|
761
|
|
|
642
|
|
||
Payments made in convertible notes and common stock
|
427
|
|
|
813
|
|
||
Principal amount of debt converted into common stock
|
237
|
|
|
15,856
|
|
||
Reduction of debt discount and deferred financing costs due to conversion of debt
|
84
|
|
|
7,351
|
|
||
Fair value of common stock issued upon conversion of debt
|
1,086
|
|
|
59,064
|
|
||
Reduction in derivative liability due to conversion of debt
|
868
|
|
|
40,173
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Globalstar System:
|
|
|
|
|
|
||
Space component
|
|
|
|
|
|
||
Second-generation satellites in service
|
$
|
1,211,904
|
|
|
$
|
1,211,904
|
|
Prepaid long-lead items
|
17,040
|
|
|
17,040
|
|
||
Second-generation satellite, on-ground spare
|
32,481
|
|
|
32,481
|
|
||
Ground component
|
46,646
|
|
|
47,595
|
|
||
Construction in progress:
|
|
|
|
|
|
||
Space component
|
58
|
|
|
30
|
|
||
Ground component
|
146,876
|
|
|
141,789
|
|
||
Other
|
3,216
|
|
|
2,458
|
|
||
Total Globalstar System
|
1,458,221
|
|
|
1,453,297
|
|
||
Internally developed and purchased software
|
15,039
|
|
|
15,392
|
|
||
Equipment
|
12,686
|
|
|
12,647
|
|
||
Land and buildings
|
3,371
|
|
|
3,590
|
|
||
Leasehold improvements
|
1,677
|
|
|
1,620
|
|
||
Total property and equipment
|
1,490,994
|
|
|
1,486,546
|
|
||
Accumulated depreciation
|
(390,490
|
)
|
|
(372,986
|
)
|
||
Total property and equipment, net
|
$
|
1,100,504
|
|
|
$
|
1,113,560
|
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Interest cost eligible to be capitalized
|
$
|
10,116
|
|
|
$
|
12,254
|
|
Interest cost recorded in interest expense, net
|
(7,925
|
)
|
|
(10,413
|
)
|
||
Net interest capitalized
|
$
|
2,191
|
|
|
$
|
1,841
|
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Depreciation expense
|
$
|
18,903
|
|
|
$
|
23,009
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
Principal
Amount
|
|
Carrying
Value
|
|
Principal
Amount
|
|
Carrying
Value
|
||||||||
Facility Agreement
|
$
|
582,296
|
|
|
$
|
582,296
|
|
|
$
|
582,296
|
|
|
$
|
582,296
|
|
Thermo Loan Agreement
|
70,219
|
|
|
35,656
|
|
|
68,154
|
|
|
32,971
|
|
||||
8.00% Convertible Senior Notes Issued in 2013
|
22,561
|
|
|
15,151
|
|
|
22,799
|
|
|
14,823
|
|
||||
Total Debt
|
675,076
|
|
|
633,103
|
|
|
673,249
|
|
|
630,090
|
|
||||
Less: Current Portion
|
6,450
|
|
|
6,450
|
|
|
6,450
|
|
|
6,450
|
|
||||
Long-Term Debt
|
$
|
668,626
|
|
|
$
|
626,653
|
|
|
$
|
666,799
|
|
|
$
|
623,640
|
|
|
Outstanding Warrants
|
|
Strike Price
|
||||||||||
|
March 31,
2015 |
|
December 31,
2014 |
|
March 31,
2015 |
|
December 31,
2014 |
||||||
Contingent Equity Agreement (1)
|
30,191,866
|
|
|
30,191,866
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
5.0% Warrants (2)
|
8,000,000
|
|
|
8,000,000
|
|
|
0.32
|
|
|
0.32
|
|
||
|
38,191,866
|
|
|
38,191,866
|
|
|
|
|
|
|
|
(1)
|
Pursuant to the terms of a Contingent Equity Agreement with Thermo (See Note 3: Long-Term Debt and Other Financing Arrangements in the Consolidated Financial Statements in the 2014 Annual Report for a complete description of the Contingent Equity Agreement), the Company 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 through June 2017. As of
March 31, 2015
, Thermo had exercised warrants to purchase approximately
11.3 million
of these shares prior to the expiration of the associated warrants.
|
(2)
|
In June 2011, the Company issued warrants (the “
5.0%
Warrants”) to purchase
15.2 million
shares of its voting common stock in connection with the issuance of its 5.0% Convertible Senior Unsecured Notes. During 2013, a portion of the
5.0%
Warrants were exercised to purchase
7.2 million
shares of common stock. The remaining
5.0%
Warrants are exercisable until June 2016, which is
five years
after their issuance. See
5.0% Convertible Senior Notes
in Note 3: Long-Term Debt and Other Financing Arrangements in the Consolidated Financial Statements in the 2014 Annual Report for a complete description of the
5.0%
Warrants.
|
|
March 31,
2015 |
|
December 31, 2014
|
||||
|
|
|
|
|
|
||
Intangible and other assets - Interest rate cap
|
$
|
24
|
|
|
$
|
46
|
|
|
|
|
|
||||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
$
|
(97,208
|
)
|
|
$
|
(79,040
|
)
|
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
(451,318
|
)
|
|
(362,510
|
)
|
||
Total derivative liabilities
|
$
|
(548,526
|
)
|
|
$
|
(441,550
|
)
|
|
Three Months Ended
|
||||||
|
March 31, 2015
|
|
March 31, 2014
|
||||
Interest rate cap
|
$
|
(22
|
)
|
|
$
|
(48
|
)
|
Warrants issued with 8.00% Notes Issued in 2009
|
—
|
|
|
(35,797
|
)
|
||
Compound embedded derivative with 8.00% Notes Issued in 2009
|
—
|
|
|
(23,087
|
)
|
||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
(19,035
|
)
|
|
(47,957
|
)
|
||
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
(88,808
|
)
|
|
(102,481
|
)
|
||
Total derivative loss
|
$
|
(107,865
|
)
|
|
$
|
(209,370
|
)
|
|
|
|
|
|
March 31, 2015
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
Balance
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate cap
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
24
|
|
Total assets measured at fair value
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(97,208
|
)
|
|
$
|
(97,208
|
)
|
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
—
|
|
|
—
|
|
|
(451,318
|
)
|
|
(451,318
|
)
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(548,526
|
)
|
|
$
|
(548,526
|
)
|
|
December 31, 2014
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
Balance
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate cap
|
$
|
—
|
|
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
46
|
|
Total assets measured at fair value
|
$
|
—
|
|
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
46
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(79,040
|
)
|
|
$
|
(79,040
|
)
|
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
—
|
|
|
—
|
|
|
(362,510
|
)
|
|
(362,510
|
)
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(441,550
|
)
|
|
$
|
(441,550
|
)
|
|
March 31, 2015
|
||||||||||||
|
Stock Price
Volatility
|
|
Risk-Free
Interest
Rate
|
|
Note
Conversion
Price
|
|
|
Market Price of Common Stock
|
|||||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
70% - 95%
|
|
0.9
|
%
|
|
$
|
0.73
|
|
|
|
$
|
3.33
|
|
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
50% - 100%
|
|
1.8
|
%
|
|
$
|
0.73
|
|
|
|
$
|
3.33
|
|
|
December 31, 2014
|
||||||||||||
|
Stock Price
Volatility
|
|
Risk-Free
Interest
Rate
|
|
Note
Conversion
Price
|
|
|
Market Price of Common Stock
|
|||||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
70% - 100%
|
|
1.2
|
%
|
|
$
|
0.73
|
|
|
|
$
|
2.75
|
|
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
50% - 100%
|
|
2.1
|
%
|
|
$
|
0.73
|
|
|
|
$
|
2.75
|
|
Balance at December 31, 2014
|
$
|
(441,550
|
)
|
Derivative adjustment related to conversions and exercises
|
867
|
|
|
Unrealized loss, included in derivative gain (loss)
|
(107,843
|
)
|
|
Balance at March 31, 2015
|
$
|
(548,526
|
)
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Accrued interest
|
$
|
5,244
|
|
|
$
|
827
|
|
Accrued compensation and benefits
|
2,355
|
|
|
2,597
|
|
||
Accrued property and other taxes
|
6,142
|
|
|
6,727
|
|
||
Accrued customer liabilities and deposits
|
3,547
|
|
|
3,358
|
|
||
Accrued professional and other service provider fees
|
2,370
|
|
|
1,925
|
|
||
Accrued liability for contingent consideration
|
54
|
|
|
481
|
|
||
Accrued commissions
|
857
|
|
|
686
|
|
||
Accrued telecommunications expenses
|
1,392
|
|
|
1,135
|
|
||
Accrued second-generation constellation costs
|
1,901
|
|
|
1,531
|
|
||
Accrued inventory in transit
|
953
|
|
|
1,189
|
|
||
Other accrued expenses
|
1,890
|
|
|
1,886
|
|
||
Total accrued expenses
|
$
|
26,705
|
|
|
$
|
22,342
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Long-term accrued interest
|
$
|
254
|
|
|
$
|
131
|
|
Asset retirement obligation
|
1,213
|
|
|
1,184
|
|
||
Deferred rent and capital lease obligations
|
375
|
|
|
404
|
|
||
Liabilities related to the Cooperative Endeavor Agreement with the State of Louisiana
|
1,268
|
|
|
1,391
|
|
||
Uncertain income tax positions
|
5,658
|
|
|
6,061
|
|
||
Foreign tax contingencies
|
2,465
|
|
|
3,034
|
|
||
Total other non-current liabilities
|
$
|
11,233
|
|
|
$
|
12,205
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2015
|
|
2014
|
||||
General and administrative expenses
|
$
|
164
|
|
|
$
|
30
|
|
Non-cash expenses
|
137
|
|
|
137
|
|
||
Total
|
$
|
301
|
|
|
$
|
167
|
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Accumulated other comprehensive income (loss), beginning of period
|
$
|
(2,898
|
)
|
|
$
|
871
|
|
Other comprehensive income (loss) :
|
|
|
|
|
|
||
Foreign currency translation adjustments
|
(1,290
|
)
|
|
(1,235
|
)
|
||
Accumulated other comprehensive loss, end of period
|
$
|
(4,188
|
)
|
|
$
|
(364
|
)
|
|
Three Months Ended March 31,
|
||||
|
2015
|
|
2014
|
||
Grants of restricted stock awards and restricted stock units
|
29
|
|
|
29
|
|
Grants of options to purchase common stock
|
113
|
|
|
293
|
|
Total
|
142
|
|
|
322
|
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Revenues:
|
|
|
|
||||
Service:
|
|
|
|
||||
United States
|
$
|
11,715
|
|
|
$
|
10,880
|
|
Canada
|
3,433
|
|
|
3,233
|
|
||
Europe
|
1,202
|
|
|
1,351
|
|
||
Central and South America
|
614
|
|
|
663
|
|
||
Others
|
143
|
|
|
122
|
|
||
Total service revenue
|
$
|
17,107
|
|
|
$
|
16,249
|
|
Subscriber equipment:
|
|
|
|
||||
United States
|
1,588
|
|
|
2,314
|
|
||
Canada
|
1,161
|
|
|
1,282
|
|
||
Europe
|
533
|
|
|
532
|
|
||
Central and South America
|
633
|
|
|
159
|
|
||
Others
|
—
|
|
|
—
|
|
||
Total subscriber equipment revenue
|
$
|
3,915
|
|
|
$
|
4,287
|
|
Total revenue
|
$
|
21,022
|
|
|
$
|
20,536
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Long-lived assets:
|
|
|
|
|
|
||
United States
|
$
|
1,096,027
|
|
|
$
|
1,108,675
|
|
Canada
|
326
|
|
|
357
|
|
||
Europe
|
357
|
|
|
413
|
|
||
Central and South America
|
3,092
|
|
|
3,309
|
|
||
Others
|
702
|
|
|
806
|
|
||
Total long-lived assets
|
$
|
1,100,504
|
|
|
$
|
1,113,560
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
18,915
|
|
|
$
|
907
|
|
|
$
|
5,102
|
|
|
$
|
(7,817
|
)
|
|
$
|
17,107
|
|
Subscriber equipment sales
|
58
|
|
|
3,449
|
|
|
2,498
|
|
|
(2,090
|
)
|
|
3,915
|
|
|||||
Total revenue
|
18,973
|
|
|
4,356
|
|
|
7,600
|
|
|
(9,907
|
)
|
|
21,022
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
3,020
|
|
|
3,040
|
|
|
3,099
|
|
|
(1,725
|
)
|
|
7,434
|
|
|||||
Cost of subscriber equipment sales
|
(18
|
)
|
|
3,306
|
|
|
2,446
|
|
|
(2,603
|
)
|
|
3,131
|
|
|||||
Marketing, general and administrative
|
1,947
|
|
|
3,722
|
|
|
2,927
|
|
|
—
|
|
|
8,596
|
|
|||||
Depreciation, amortization, and accretion
|
18,549
|
|
|
298
|
|
|
5,881
|
|
|
(5,682
|
)
|
|
19,046
|
|
|||||
Total operating expenses
|
23,498
|
|
|
10,366
|
|
|
14,353
|
|
|
(10,010
|
)
|
|
38,207
|
|
|||||
Loss from operations
|
(4,525
|
)
|
|
(6,010
|
)
|
|
(6,753
|
)
|
|
103
|
|
|
(17,185
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(8,336
|
)
|
|
(10
|
)
|
|
(171
|
)
|
|
—
|
|
|
(8,517
|
)
|
|||||
Derivative loss
|
(107,865
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(107,865
|
)
|
|||||
Equity in subsidiary earnings
|
(10,663
|
)
|
|
4
|
|
|
—
|
|
|
10,659
|
|
|
—
|
|
|||||
Other
|
1,806
|
|
|
526
|
|
|
1,747
|
|
|
54
|
|
|
4,133
|
|
|||||
Total other income (expense)
|
(125,123
|
)
|
|
520
|
|
|
1,576
|
|
|
10,713
|
|
|
(112,314
|
)
|
|||||
Income (loss) before income taxes
|
(129,648
|
)
|
|
(5,490
|
)
|
|
(5,177
|
)
|
|
10,816
|
|
|
(129,499
|
)
|
|||||
Income tax expense
|
79
|
|
|
23
|
|
|
126
|
|
|
—
|
|
|
228
|
|
|||||
Net income (loss)
|
$
|
(129,727
|
)
|
|
$
|
(5,513
|
)
|
|
$
|
(5,303
|
)
|
|
$
|
10,816
|
|
|
$
|
(129,727
|
)
|
Comprehensive income (loss)
|
$
|
(129,727
|
)
|
|
$
|
(5,513
|
)
|
|
$
|
(6,593
|
)
|
|
$
|
10,816
|
|
|
$
|
(131,017
|
)
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Service revenues
|
$
|
18,409
|
|
|
$
|
1,824
|
|
|
$
|
4,678
|
|
|
$
|
(8,662
|
)
|
|
$
|
16,249
|
|
Subscriber equipment sales
|
45
|
|
|
3,131
|
|
|
1,899
|
|
|
(788
|
)
|
|
4,287
|
|
|||||
Total revenue
|
18,454
|
|
|
4,955
|
|
|
6,577
|
|
|
(9,450
|
)
|
|
20,536
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
2,637
|
|
|
2,063
|
|
|
2,295
|
|
|
(57
|
)
|
|
6,938
|
|
|||||
Cost of subscriber equipment sales
|
—
|
|
|
2,429
|
|
|
1,920
|
|
|
(1,277
|
)
|
|
3,072
|
|
|||||
Marketing, general and administrative
|
1,689
|
|
|
3,952
|
|
|
3,208
|
|
|
(1,080
|
)
|
|
7,769
|
|
|||||
Depreciation, amortization, and accretion
|
19,322
|
|
|
4,626
|
|
|
6,609
|
|
|
(7,225
|
)
|
|
23,332
|
|
|||||
Total operating expenses
|
23,648
|
|
|
13,070
|
|
|
14,032
|
|
|
(9,639
|
)
|
|
41,111
|
|
|||||
Loss from operations
|
(5,194
|
)
|
|
(8,115
|
)
|
|
(7,455
|
)
|
|
189
|
|
|
(20,575
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(10,195
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,195
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(10,824
|
)
|
|
(11
|
)
|
|
(86
|
)
|
|
—
|
|
|
(10,921
|
)
|
|||||
Derivative loss
|
(209,370
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(209,370
|
)
|
|||||
Equity in subsidiary earnings
|
(14,929
|
)
|
|
(2,114
|
)
|
|
—
|
|
|
17,043
|
|
|
—
|
|
|||||
Other
|
25
|
|
|
(53
|
)
|
|
865
|
|
|
(124
|
)
|
|
713
|
|
|||||
Total other income (expense)
|
(245,293
|
)
|
|
(2,178
|
)
|
|
779
|
|
|
16,919
|
|
|
(229,773
|
)
|
|||||
Loss before income taxes
|
(250,487
|
)
|
|
(10,293
|
)
|
|
(6,676
|
)
|
|
17,108
|
|
|
(250,348
|
)
|
|||||
Income tax expense
|
54
|
|
|
8
|
|
|
131
|
|
|
—
|
|
|
193
|
|
|||||
Net (loss) income
|
$
|
(250,541
|
)
|
|
$
|
(10,301
|
)
|
|
$
|
(6,807
|
)
|
|
$
|
17,108
|
|
|
$
|
(250,541
|
)
|
Comprehensive (loss) income
|
$
|
(250,541
|
)
|
|
$
|
(10,301
|
)
|
|
$
|
(8,045
|
)
|
|
$
|
17,111
|
|
|
$
|
(251,776
|
)
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
9,206
|
|
|
$
|
1,086
|
|
|
$
|
3,363
|
|
|
$
|
—
|
|
|
$
|
13,655
|
|
Accounts receivable
|
4,638
|
|
|
5,290
|
|
|
4,970
|
|
|
402
|
|
|
15,300
|
|
|||||
Intercompany receivables
|
781,109
|
|
|
446,687
|
|
|
33,638
|
|
|
(1,261,434
|
)
|
|
—
|
|
|||||
Inventory
|
2,014
|
|
|
7,324
|
|
|
4,246
|
|
|
—
|
|
|
13,584
|
|
|||||
Prepaid expenses and other current assets
|
2,785
|
|
|
307
|
|
|
4,191
|
|
|
—
|
|
|
7,283
|
|
|||||
Total current assets
|
799,752
|
|
|
460,694
|
|
|
50,408
|
|
|
(1,261,032
|
)
|
|
49,822
|
|
|||||
Property and equipment, net
|
1,092,982
|
|
|
3,045
|
|
|
5,210
|
|
|
(733
|
)
|
|
1,100,504
|
|
|||||
Restricted cash
|
37,918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,918
|
|
|||||
Intercompany notes receivable
|
13,006
|
|
|
—
|
|
|
11,945
|
|
|
(24,951
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
(266,658
|
)
|
|
(365,320
|
)
|
|
31,093
|
|
|
600,885
|
|
|
—
|
|
|||||
Deferred financing costs
|
60,989
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,989
|
|
|||||
Intangible and other assets, net
|
7,846
|
|
|
468
|
|
|
1,134
|
|
|
(12
|
)
|
|
9,436
|
|
|||||
Total assets
|
$
|
1,745,835
|
|
|
$
|
98,887
|
|
|
$
|
99,790
|
|
|
$
|
(685,843
|
)
|
|
$
|
1,258,669
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current portion of long-term debt
|
$
|
6,450
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,450
|
|
Accounts payable
|
1,616
|
|
|
1,668
|
|
|
1,726
|
|
|
—
|
|
|
5,010
|
|
|||||
Accrued contract termination charge
|
19,023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,023
|
|
|||||
Accrued expenses
|
11,633
|
|
|
6,924
|
|
|
8,148
|
|
|
—
|
|
|
26,705
|
|
|||||
Intercompany payables
|
530,407
|
|
|
572,697
|
|
|
163,862
|
|
|
(1,266,966
|
)
|
|
—
|
|
|||||
Payables to affiliates
|
376
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
376
|
|
|||||
Deferred revenue
|
2,448
|
|
|
15,821
|
|
|
3,212
|
|
|
—
|
|
|
21,481
|
|
|||||
Total current liabilities
|
571,953
|
|
|
597,110
|
|
|
176,948
|
|
|
(1,266,966
|
)
|
|
79,045
|
|
|||||
Long-term debt, less current portion
|
626,653
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
626,653
|
|
|||||
Employee benefit obligations
|
5,478
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,478
|
|
|||||
Intercompany notes payable
|
3,830
|
|
|
—
|
|
|
15,148
|
|
|
(18,978
|
)
|
|
—
|
|
|||||
Derivative liabilities
|
548,526
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
548,526
|
|
|||||
Deferred revenue
|
6,192
|
|
|
325
|
|
|
—
|
|
|
—
|
|
|
6,517
|
|
|||||
Debt restructuring fees
|
20,795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,795
|
|
|||||
Other non-current liabilities
|
1,986
|
|
|
296
|
|
|
8,951
|
|
|
—
|
|
|
11,233
|
|
|||||
Total non-current liabilities
|
1,213,460
|
|
|
621
|
|
|
24,099
|
|
|
(18,978
|
)
|
|
1,219,202
|
|
|||||
Stockholders’ (deficit) equity
|
(39,578
|
)
|
|
(498,844
|
)
|
|
(101,257
|
)
|
|
600,101
|
|
|
(39,578
|
)
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,745,835
|
|
|
$
|
98,887
|
|
|
$
|
99,790
|
|
|
$
|
(685,843
|
)
|
|
$
|
1,258,669
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
3,166
|
|
|
$
|
672
|
|
|
$
|
3,283
|
|
|
$
|
—
|
|
|
$
|
7,121
|
|
Accounts receivable
|
4,470
|
|
|
5,265
|
|
|
4,955
|
|
|
325
|
|
|
15,015
|
|
|||||
Intercompany receivables
|
755,482
|
|
|
441,525
|
|
|
23,967
|
|
|
(1,220,974
|
)
|
|
—
|
|
|||||
Inventory
|
2,018
|
|
|
8,424
|
|
|
4,292
|
|
|
—
|
|
|
14,734
|
|
|||||
Prepaid expenses and other current assets
|
3,465
|
|
|
303
|
|
|
4,176
|
|
|
—
|
|
|
7,944
|
|
|||||
Total current assets
|
768,601
|
|
|
456,189
|
|
|
40,673
|
|
|
(1,220,649
|
)
|
|
44,814
|
|
|||||
Property and equipment, net
|
1,105,670
|
|
|
3,002
|
|
|
5,776
|
|
|
(888
|
)
|
|
1,113,560
|
|
|||||
Restricted cash
|
37,918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,918
|
|
|||||
Intercompany notes receivable
|
13,006
|
|
|
—
|
|
|
8,285
|
|
|
(21,291
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
(265,249
|
)
|
|
4,734
|
|
|
30,552
|
|
|
229,963
|
|
|
—
|
|
|||||
Deferred financing costs
|
63,862
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63,862
|
|
|||||
Intangible and other assets, net
|
6,707
|
|
|
541
|
|
|
1,031
|
|
|
(13
|
)
|
|
8,266
|
|
|||||
Total assets
|
$
|
1,730,515
|
|
|
$
|
464,466
|
|
|
$
|
86,317
|
|
|
$
|
(1,012,878
|
)
|
|
$
|
1,268,420
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current portion of long-term debt
|
$
|
6,450
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,450
|
|
Accounts payable
|
3,310
|
|
|
1,755
|
|
|
1,857
|
|
|
—
|
|
|
6,922
|
|
|||||
Accrued contract termination charge
|
21,308
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,308
|
|
|||||
Accrued expenses
|
6,638
|
|
|
7,213
|
|
|
8,491
|
|
|
—
|
|
|
22,342
|
|
|||||
Intercompany payables
|
508,503
|
|
|
563,183
|
|
|
153,067
|
|
|
(1,224,753
|
)
|
|
—
|
|
|||||
Payables to affiliates
|
481
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
481
|
|
|||||
Derivative liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Deferred revenue
|
3,185
|
|
|
15,378
|
|
|
3,177
|
|
|
—
|
|
|
21,740
|
|
|||||
Total current liabilities
|
549,875
|
|
|
587,529
|
|
|
166,592
|
|
|
(1,224,753
|
)
|
|
79,243
|
|
|||||
Long-term debt, less current portion
|
623,640
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
623,640
|
|
|||||
Employee benefit obligations
|
5,499
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,499
|
|
|||||
Intercompany notes payable
|
2,000
|
|
|
—
|
|
|
15,148
|
|
|
(17,148
|
)
|
|
—
|
|
|||||
Derivative liabilities
|
441,550
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
441,550
|
|
|||||
Deferred revenue
|
6,229
|
|
|
343
|
|
|
—
|
|
|
—
|
|
|
6,572
|
|
|||||
Debt restructuring fees
|
20,795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,795
|
|
|||||
Other non-current liabilities
|
2,011
|
|
|
294
|
|
|
9,900
|
|
|
—
|
|
|
12,205
|
|
|||||
Total non-current liabilities
|
1,101,724
|
|
|
637
|
|
|
25,048
|
|
|
(17,148
|
)
|
|
1,110,261
|
|
|||||
Stockholders’ (deficit) equity
|
78,916
|
|
|
(123,700
|
)
|
|
(105,323
|
)
|
|
229,023
|
|
|
78,916
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,730,515
|
|
|
$
|
464,466
|
|
|
$
|
86,317
|
|
|
$
|
(1,012,878
|
)
|
|
$
|
1,268,420
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
1,401
|
|
|
$
|
673
|
|
|
$
|
447
|
|
|
$
|
—
|
|
|
$
|
2,521
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Second-generation ground-related costs (including interest)
|
(4,018
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,018
|
)
|
|||||
Property and equipment additions
|
(1,404
|
)
|
|
(259
|
)
|
|
(127
|
)
|
|
—
|
|
|
(1,790
|
)
|
|||||
Net cash used in investing activities
|
(5,422
|
)
|
|
(259
|
)
|
|
(127
|
)
|
|
—
|
|
|
(5,808
|
)
|
|||||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of stock to Terrapin
|
10,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|||||
Proceeds from issuance of common stock and exercise of warrants
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|||||
Payment of deferred financing costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by financing activities
|
10,061
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,061
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(240
|
)
|
|
—
|
|
|
(240
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
6,040
|
|
|
414
|
|
|
80
|
|
|
—
|
|
|
6,534
|
|
|||||
Cash and cash equivalents at beginning of period
|
3,166
|
|
|
672
|
|
|
3,283
|
|
|
—
|
|
|
7,121
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
9,206
|
|
|
$
|
1,086
|
|
|
$
|
3,363
|
|
|
$
|
—
|
|
|
$
|
13,655
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
4,765
|
|
|
$
|
(1
|
)
|
|
$
|
(965
|
)
|
|
$
|
—
|
|
|
$
|
3,799
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Second-generation ground-related costs (including interest)
|
(1,366
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,366
|
)
|
|||||
Property and equipment additions
|
(88
|
)
|
|
(136
|
)
|
|
(204
|
)
|
|
—
|
|
|
(428
|
)
|
|||||
Net cash from investing activities
|
(1,454
|
)
|
|
(136
|
)
|
|
(204
|
)
|
|
—
|
|
|
(1,794
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of common stock and stock options
|
310
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
310
|
|
|||||
Payment of deferred financing costs
|
(164
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(164
|
)
|
|||||
Net cash used in financing activities
|
146
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
3,457
|
|
|
(137
|
)
|
|
(1,133
|
)
|
|
—
|
|
|
2,187
|
|
|||||
Cash and cash equivalents at beginning of period
|
12,935
|
|
|
676
|
|
|
3,797
|
|
|
—
|
|
|
17,408
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
16,392
|
|
|
$
|
539
|
|
|
$
|
2,664
|
|
|
$
|
—
|
|
|
$
|
19,595
|
|
•
|
two-way voice communication and data transmissions (“Duplex”) using mobile or fixed devices; and
|
•
|
one-way data transmissions ("Simplex") 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, both of which are indicators of our financial performance; and
|
•
|
capital expenditures, which are an indicator of future revenue growth potential and cash requirements.
|
|
Three Months Ended
March 31, 2015 |
|
Three Months Ended
March 31, 2014 |
||||||||||
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue |
||||||
Service Revenue:
|
|
|
|
|
|
|
|
||||||
Duplex
|
$
|
6,165
|
|
|
29
|
%
|
|
$
|
5,874
|
|
|
28
|
%
|
SPOT
|
7,515
|
|
|
36
|
|
|
7,039
|
|
|
35
|
|
||
Simplex
|
2,287
|
|
|
11
|
|
|
1,865
|
|
|
9
|
|
||
IGO
|
224
|
|
|
1
|
|
|
274
|
|
|
1
|
|
||
Other
|
916
|
|
|
4
|
|
|
1,197
|
|
|
6
|
|
||
Total
|
$
|
17,107
|
|
|
81
|
%
|
|
$
|
16,249
|
|
|
79
|
%
|
|
Three Months Ended
March 31, 2015 |
|
Three Months Ended
March 31, 2014 |
||||||||||
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue |
||||||
Equipment Revenues:
|
|
|
|
|
|
|
|
||||||
Duplex
|
$
|
1,509
|
|
|
7
|
%
|
|
$
|
1,356
|
|
|
7
|
%
|
SPOT
|
1,058
|
|
|
5
|
|
|
1,428
|
|
|
7
|
|
||
Simplex
|
1,187
|
|
|
6
|
|
|
1,239
|
|
|
6
|
|
||
IGO
|
122
|
|
|
1
|
|
|
180
|
|
|
1
|
|
||
Other
|
39
|
|
|
—
|
|
|
84
|
|
|
—
|
|
||
Total
|
$
|
3,915
|
|
|
19
|
%
|
|
$
|
4,287
|
|
|
21
|
%
|
|
March 31,
|
||||||
|
2015
|
|
2014
|
||||
Average number of subscribers for the period (three months ended):
|
|
|
|
||||
Duplex (1)
|
68,509
|
|
|
71,383
|
|
||
SPOT
|
243,448
|
|
|
222,990
|
|
||
Simplex
|
287,684
|
|
|
241,038
|
|
||
IGO
|
38,725
|
|
|
39,309
|
|
||
ARPU (monthly):
|
|
|
|
||||
Duplex (1)
|
$
|
30.00
|
|
|
$
|
27.43
|
|
SPOT
|
10.29
|
|
|
10.52
|
|
||
Simplex
|
2.65
|
|
|
2.58
|
|
||
IGO
|
1.92
|
|
|
2.32
|
|
||
Number of subscribers (end of period):
|
|
|
|
||||
Duplex
|
69,655
|
|
|
58,603
|
|
||
SPOT
|
246,579
|
|
|
224,084
|
|
||
Simplex
|
288,200
|
|
|
250,723
|
|
||
IGO
|
38,791
|
|
|
39,267
|
|
||
Other
|
5,677
|
|
|
5,819
|
|
||
Total
|
648,902
|
|
|
578,496
|
|
(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 months ended
March 31, 2014
, excluding these 26,000 deactivated subscribers from the December 2013 subscriber count, average subscribers would have been 58,053 and ARPU would have been $33.73.
|
|
Three Months Ended
|
||||||
|
March 31,
2015 |
|
March 31,
2014 |
||||
Net cash provided by operating activities
|
$
|
2,521
|
|
|
$
|
3,799
|
|
Net cash used in investing activities
|
(5,808
|
)
|
|
(1,794
|
)
|
||
Net cash provided by financing activities
|
10,061
|
|
|
146
|
|
||
Effect of exchange rate changes on cash
|
(240
|
)
|
|
36
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
6,534
|
|
|
$
|
2,187
|
|
|
|
Payments through
|
|
Estimated Future Payments
|
||||||||||||||||
Capital Expenditures
|
|
March 31,
2015 |
|
Remaining
2015
|
|
2016
|
|
Thereafter
|
|
Total
|
||||||||||
Hughes second-generation ground component (including research and development expense)(1)
|
|
$
|
95,566
|
|
|
$
|
15,516
|
|
|
$
|
756
|
|
|
$
|
—
|
|
|
$
|
111,838
|
|
Ericsson ground network
|
|
10,859
|
|
|
15,006
|
|
|
5,643
|
|
|
—
|
|
|
31,508
|
|
|||||
Other Capital Expenditures
|
|
1,667
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,667
|
|
|||||
Total
|
|
$
|
108,092
|
|
|
$
|
30,522
|
|
|
$
|
6,399
|
|
|
$
|
—
|
|
|
$
|
145,013
|
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1†
|
|
Amendment No. 1 to Purchase Agreement by and between Globalstar, Inc. and Ericsson, Inc. dated as of April 2, 2015
|
|
|
|
10.2†
|
|
2015 Key Employee Cash Bonus Plan
|
|
|
|
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 exhibit 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.
|
|
|
|
|
Date:
|
May 7, 2015
|
By:
|
/s/ James Monroe III
|
|
|
|
James Monroe III
|
|
|
|
Chairman and Chief Executive Officer (On behalf of the registrant)
|
|
|
|
|
|
|
|
/s/ Rebecca S. Clary
|
|
|
|
Rebecca S. Clary
|
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
•
|
to reward designated key employees' successful efforts to exceed the Company's financial performance goals for the designated Plan Year,
|
•
|
to align these employees' financial interests with those of the Company's stockholders, and
|
•
|
to provide these employees with a competitive, success-based bonus package.
|
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:
|
May 7, 2015
|
|
|
|
|
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:
|
May 7, 2015
|
|
|
|
|
By:
|
/s/ Rebecca S. Clary
|
|
|
Rebecca S. Clary
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
Date:
|
May 7, 2015
|
By:
|
/s/ James Monroe III
|
|
|
|
James Monroe III
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
|
Date:
|
May 7, 2015
|
By:
|
/s/ Rebecca S. Clary
|
|
|
|
Rebecca S. Clary
|
|
|
|
Chief Financial Officer (Principal Financial Officer)
|