(Mark One)
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x
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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41-2116508
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Securities registered pursuant to section 12(b) of the Act:
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Title of each class
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Name of exchange on which registered
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Voting Common Stock
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NYSE MKT
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting
company)
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Smaller reporting company
¨
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Page
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PART I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits, Financial Statement Schedules
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Signatures
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•
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two-way voice communication and data transmissions (“Duplex”) using mobile or fixed devices; and
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•
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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.
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Location
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Gateway
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Independent Gateway Operators
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Argentina
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Bosque Alegre
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TE.SA.M Argentina
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Australia
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Dubbo
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Pivotel Group PTY Limited
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Australia
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Mount Isa
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Pivotel Group PTY Limited
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Australia
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Meekatharra
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Pivotel Group PTY Limited
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South Korea
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Yeo Ju
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Globalstar Asia Pacific
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Mexico
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San Martin
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Globalstar de Mexico
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Nigeria
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Kaduna
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Globaltouch (West Africa) Limited
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Peru
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Lurin
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TE.SA.M Peru
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Russia
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Khabarovsk
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GlobalTel
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Russia
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Moscow
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GlobalTel
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Russia
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Novosibirsk
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GlobalTel
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Turkey
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Ogulbey
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Globalstar Avrasya
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•
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MSS, which provide customers with connectivity to mobile and fixed devices using a network of satellites and ground facilities;
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•
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fixed satellite services, which use geostationary satellites to provide customers with voice and broadband communications links between fixed points on the earth's surface; and
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•
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terrestrial services, which use a terrestrial network to provide wireless or wireline connectivity and are complementary to satellite services.
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•
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our ability to maintain the health, capacity and control of our satellites;
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•
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our ability to maintain the health of our ground network;
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•
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our ability to influence the level of market acceptance and demand for all of our services;
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•
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our ability to introduce new products and services that meet this market demand;
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•
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our ability to retain current customers and obtain new customers;
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•
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our ability to obtain additional business using our existing spectrum resources both in the United States and internationally;
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•
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our ability to control the costs of developing an integrated network providing related products and services;
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•
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our ability to market successfully our Duplex, SPOT and Simplex products and services;
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•
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our ability to develop and deploy innovative network management techniques to permit mobile devices to transition between satellite and terrestrial modes;
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•
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our ability to sell the equipment inventory on hand;
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•
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the cost and availability of user equipment that operates on our network;
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•
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the effectiveness of our competitors in developing and offering similar products and services and in persuading our customers to switch service providers; and
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•
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our ability to provide attractive service offerings at competitive prices to our target markets.
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•
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difficulties in penetrating new markets due to established and entrenched competitors;
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•
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difficulties in developing products and services that are tailored to the needs of local customers;
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•
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lack of local acceptance or knowledge of our products and services;
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•
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lack of recognition of our products and services;
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•
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unavailability of or difficulties in establishing relationships with distributors;
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•
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significant investments, including the development and deployment of dedicated gateways, as some countries require physical gateways within their jurisdiction to connect the traffic coming to and from their territory;
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•
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instability of international economies and governments;
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•
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changes in laws and policies affecting trade and investment in other jurisdictions;
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•
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compliance with the Foreign Corrupt Practices Act and the UK Bribery Act;
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•
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exposure to varying legal standards, including intellectual property protection in other jurisdictions;
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•
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difficulties in obtaining required regulatory authorizations;
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•
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difficulties in enforcing legal rights in other jurisdictions;
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•
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local domestic ownership requirements;
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•
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requirements that operational activities be performed in-country;
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•
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changing and conflicting national and local regulatory requirements; and
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•
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foreign currency exchange rates and exchange controls.
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•
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actual or anticipated variations in our operating results;
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•
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failure in the performance of our current or future satellites;
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•
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changes in financial estimates by research analysts, or any failure by us to meet or exceed any such estimates, or changes in the recommendations of any research analysts that elect to follow our common stock or the common stock of our competitors;
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•
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actual or anticipated changes in economic, political or market conditions, such as recessions or international currency fluctuations;
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•
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actual or anticipated changes in the regulatory environment affecting our industry, including final rulemaking by the FCC related to our TLPS proceeding;
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•
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actual or anticipated sales of common stock by our controlling stockholder or others;
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•
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changes in the market valuations of our industry peers; and
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•
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announcement by us or our competitors of significant acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives.
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•
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the absence of cumulative voting in the election of our directors, which means that the holders of a majority of our common stock may elect all of the directors standing for election;
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•
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the ability of our board of directors to issue preferred stock with voting rights or with rights senior to those of the common stock without any further vote or action by the holders of our common stock;
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•
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the division of our board of directors into three separate classes serving staggered three-year terms;
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•
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the ability of our stockholders, at such time when Thermo does not own a majority of our outstanding capital stock entitled to vote in the election of directors, to remove our directors only for cause and only by the vote of at least 66 2/3% of the outstanding shares of capital stock entitled to vote in the election of directors;
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•
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prohibitions, at such time when Thermo does not own a majority of our outstanding capital stock entitled to vote in the election of directors, on our stockholders acting by written consent;
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•
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prohibitions on our stockholders calling special meetings of stockholders or filling vacancies on our board of directors;
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•
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the requirement, at such time when Thermo does not own a majority of our outstanding capital stock entitled to vote in the election of directors, that our stockholders must obtain a super-majority vote to amend or repeal our amended and restated certificate of incorporation or bylaws;
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•
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change of control provisions in our Facility Agreement, which provide that a change of control will constitute an event of default and, unless waived by the lenders, will result in the acceleration of the maturity of all indebtedness under the credit agreement;
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•
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change of control provisions relating to our 8.00% Notes Issued in 2013, which provide that a change of control will permit holders of the notes to demand immediate repayment; and
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•
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change of control provisions in our 2006 Equity Incentive Plan, which provide that a change of control may accelerate the vesting of all outstanding stock options, stock appreciation rights and restricted stock.
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Location
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Country
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Square Feet
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Facility Use
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Owned/Leased
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Milpitas, California
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USA
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31,690
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Satellite and Ground Control Center
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Leased
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Covington, Louisiana
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USA
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29,000
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Corporate Offices
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Leased
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Managua
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Nicaragua
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10,900
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Gateway
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Owned
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Clifton, Texas
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USA
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10,000
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Gateway
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Owned
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Mississauga, Ontario
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Canada
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9,876
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Canada Office
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Leased
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Los Velasquez, Edo Miranda
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Venezuela
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9,700
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Gateway
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Owned
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Sebring, Florida
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USA
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9,000
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Gateway
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Leased
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Aussaguel
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France
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7,500
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Satellite Control Center and Gateway
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Leased
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Smith Falls, Ontario
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Canada
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6,500
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Gateway
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Owned
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High River, Alberta
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Canada
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6,500
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Gateway
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Owned
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Barrio of Las Palmas, Cabo Rojo
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Puerto Rico
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6,000
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Gateway
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Owned
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Wasilla, Alaska
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USA
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5,000
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Gateway
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Owned
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Seletar Satellite Earth Station
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Singapore
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4,500
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Gateway
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Leased
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Petrolina
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Brazil
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2,500
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Gateway
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Owned
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Gaborone
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Botswana
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2,000
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Gateway
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Leased
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Manaus
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Brazil
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1,900
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Gateway
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Owned
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El Dorado Hills, California
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USA
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1,586
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Satellite and Ground Control Center
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Leased
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Rio de Janeiro
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Brazil
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1,313
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Brazil Office
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Leased
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Presidente Prudente
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Brazil
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1,300
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Gateway
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Owned
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Dublin
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Ireland
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1,280
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Ireland Office
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Leased
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Panama City
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Panama
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1,100
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Panama Office
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Leased
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Gaborone
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Botswana
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270
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Botswana Office
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Leased
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Quarter Ended:
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High
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Low
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||||
March 31, 2014
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$
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2.72
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$
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1.67
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June 30, 2014
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$
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4.28
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$
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2.43
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September 30, 2014
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$
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4.46
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$
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3.66
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December 31, 2014
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$
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3.09
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$
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1.71
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||||
March 31, 2015
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$
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3.56
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$
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2.20
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June 30, 2015
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$
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3.35
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$
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2.11
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September 30, 2015
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$
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2.36
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$
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1.45
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December 31, 2015
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$
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2.18
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$
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1.43
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December 31,
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||||||||||||||||||
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2015
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2014
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2013
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2012
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2011
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||||||||||
Statement of Operations Data (year ended):
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|||||
Revenues
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$
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90,490
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$
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90,064
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|
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$
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82,711
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$
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76,318
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$
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72,827
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Operating loss
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(66,604
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)
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(95,895
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)
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(87,396
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)
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(94,993
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)
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(73,235
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)
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|||||
Other income (expense)
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140,318
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|
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(366,090
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)
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(502,582
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)
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(16,792
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)
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|
18,202
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|||||
Income (loss) before income taxes
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73,714
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|
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(461,985
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)
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(589,978
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)
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(111,785
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)
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(55,033
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)
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|||||
Net income (loss)
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72,322
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(462,866
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)
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(591,116
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)
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(112,198
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)
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(54,924
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)
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|||||
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||||||||||
Balance Sheet Data (end of period):
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|||||
Cash and cash equivalents
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7,476
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|
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7,121
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17,408
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11,792
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9,951
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|
|||||
Property and equipment, net
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1,077,560
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1,113,560
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1,169,785
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1,215,156
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1,217,718
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|||||
Total assets
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1,232,921
|
|
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1,268,420
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|
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1,372,608
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1,403,775
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1,420,405
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|
|||||
Current maturities of long-term debt
|
32,835
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|
|
6,450
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|
|
4,046
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|
|
655,874
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|
|
—
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|||||
Long-term debt, less current maturities
|
606,192
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|
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623,640
|
|
|
665,236
|
|
|
95,155
|
|
|
723,888
|
|
|||||
Stockholders’ equity
|
237,131
|
|
|
78,916
|
|
|
116,755
|
|
|
494,544
|
|
|
533,795
|
|
•
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total revenue, which is an indicator of our overall business growth;
|
•
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subscriber growth and churn rate, which are both indicators of the satisfaction of our customers;
|
•
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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
|
•
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capital expenditures, which are an indicator of future revenue growth potential and cash requirements.
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Year Ended
December 31, 2015
|
|
Year Ended
December 31, 2014
|
||||||||||
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Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||
Service Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||
Duplex
|
$
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27,367
|
|
|
30
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%
|
|
$
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26,990
|
|
|
30
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%
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SPOT
|
33,495
|
|
|
37
|
%
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|
29,072
|
|
|
33
|
%
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||
Simplex
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9,088
|
|
|
10
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%
|
|
8,383
|
|
|
9
|
%
|
||
IGO
|
799
|
|
|
1
|
%
|
|
1,013
|
|
|
1
|
%
|
||
Other
|
3,375
|
|
|
4
|
%
|
|
4,365
|
|
|
5
|
%
|
||
Total Service Revenues
|
$
|
74,124
|
|
|
82
|
%
|
|
$
|
69,823
|
|
|
78
|
%
|
|
Year Ended
December 31, 2015
|
|
Year Ended
December 31, 2014
|
||||||||||
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||
Equipment Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||
Duplex
|
$
|
4,911
|
|
|
5
|
%
|
|
$
|
6,199
|
|
|
7
|
%
|
SPOT
|
5,059
|
|
|
6
|
%
|
|
6,280
|
|
|
7
|
%
|
||
Simplex
|
5,327
|
|
|
6
|
%
|
|
6,582
|
|
|
7
|
%
|
||
IGO
|
971
|
|
|
1
|
%
|
|
1,078
|
|
|
1
|
%
|
||
Other
|
98
|
|
|
—
|
|
|
102
|
|
|
—
|
|
||
Total Equipment Revenues
|
$
|
16,366
|
|
|
18
|
%
|
|
$
|
20,241
|
|
|
22
|
%
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Average number of subscribers for the year ended:
|
|
|
|
|
|
||
Duplex
(1)
|
72,205
|
|
|
75,763
|
|
||
SPOT
|
253,108
|
|
|
231,106
|
|
||
Simplex
|
295,363
|
|
|
259,260
|
|
||
IGO
|
38,847
|
|
|
39,005
|
|
||
|
|
|
|
||||
ARPU (monthly):
|
|
|
|
|
|||
Duplex
(1)
|
$
|
31.59
|
|
|
$
|
29.69
|
|
SPOT
|
11.03
|
|
|
10.48
|
|
||
Simplex
|
2.56
|
|
|
2.69
|
|
||
IGO
|
1.71
|
|
|
2.16
|
|
||
|
|
|
|
||||
Number of subscribers end of year:
|
|
|
|
|
|||
Duplex
|
77,047
|
|
|
67,362
|
|
||
SPOT
|
265,898
|
|
|
240,317
|
|
||
Simplex
|
303,559
|
|
|
287,167
|
|
||
IGO
|
39,035
|
|
|
38,658
|
|
||
Other
|
2,788
|
|
|
5,716
|
|
||
Total
|
688,327
|
|
|
639,220
|
|
(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 year ended December 31, 2014, excluding these 26,000 deactivated subscribers from prior period metrics, average subscribers would have been
62,433
and ARPU would have been
$36.03
.
|
•
|
During the fourth quarter of 2014, we recorded a reduction in the value of inventory of $14.4 million. We recognized these charges after evaluating our Duplex inventory and estimating the timing of new product launches. Our assessment indicated that there was an excess of Duplex equipment included in inventory on hand based on our current sales run-rate.
|
•
|
During the second quarter of 2014, we recorded a reduction in the value of inventory of $7.3 million following cancellation of our contract with Qualcomm related to finished goods and raw materials previously accounted for as advances for inventory on our consolidated balance sheet. We cancelled this contract in March 2013, and we entered into an agreement with Qualcomm in July 2014 whereby we paid $0.1 million to Qualcomm for all remaining finished goods and raw materials held at Qualcomm. Our future business plan contemplates using Hughes-based technology in future product development. As a result, much of the raw material held by Qualcomm is not likely to be used in the future production of additional inventory and their value was impaired.
|
•
|
Holders of
$6.5 million
principal amount of 8.00% Notes Issued in 2013 converted their notes into our common stock, resulting in a loss on extinguishment of debt of
$2.3 million
on the issuance of
10.9 million
shares of voting common stock. The fair value of the shares issued to these holders exceeded the derivative liability and principal amount written off due to the conversions, resulting in a loss on extinguishment of debt.
|
•
|
Holders of our 8.00% Notes Issued in 2013 converted approximately
$24.9 million
principal amount of these notes, resulting in the issuance of
46.4 million
shares of common stock and a non-cash loss on extinguishment of debt of
$44.1 million
. The fair value of the shares issued to these holders exceeded the derivative liability and principal amount written off due to the conversions, resulting in a loss on extinguishment of debt.
|
•
|
On April 15, 2014 we met the condition for automatic conversion of our 8.00% Notes Issued in 2009. During 2014, as a result of this automatic conversion and other conversions prior to April 15, 2014, holders of our 8.00% Notes Issued in 2009 converted approximately
$51.7 million
principal amount of these notes into
47.1 million
shares of common stock, resulting in a non-cash gain on extinguishment of debt of
$4.3 million
. The derivative liability and principal amount written off exceeded the fair value of shares issued to the holders upon conversion, resulting in a gain on extinguishment of debt.
|
|
Year Ended
December 31, 2014
|
|
Year Ended
December 31, 2013
|
||||||||||
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||
Service Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||
Duplex
|
$
|
26,990
|
|
|
30
|
%
|
|
$
|
22,788
|
|
|
28
|
%
|
SPOT
|
29,072
|
|
|
33
|
%
|
|
27,902
|
|
|
34
|
%
|
||
Simplex
|
8,383
|
|
|
9
|
%
|
|
7,619
|
|
|
9
|
%
|
||
IGO
|
1,013
|
|
|
1
|
%
|
|
1,029
|
|
|
1
|
%
|
||
Other
|
4,365
|
|
|
5
|
%
|
|
5,306
|
|
|
6
|
%
|
||
Total Service Revenues
|
$
|
69,823
|
|
|
78
|
%
|
|
$
|
64,644
|
|
|
78
|
%
|
|
Year Ended
December 31, 2014
|
|
Year Ended
December 31, 2013
|
||||||||||
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||
Equipment Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||
Duplex
|
$
|
6,199
|
|
|
7
|
%
|
|
$
|
6,565
|
|
|
8
|
%
|
SPOT
|
6,280
|
|
|
7
|
%
|
|
4,546
|
|
|
6
|
%
|
||
Simplex
|
6,582
|
|
|
7
|
%
|
|
5,927
|
|
|
7
|
%
|
||
IGO
|
1,078
|
|
|
1
|
%
|
|
841
|
|
|
1
|
%
|
||
Other
|
102
|
|
|
—
|
|
|
188
|
|
|
—
|
|
||
Total Equipment Revenues
|
$
|
20,241
|
|
|
22
|
%
|
|
$
|
18,067
|
|
|
22
|
%
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Average number of subscribers for the year ended:
|
|
|
|
|
|
||
Duplex
(1)
|
75,763
|
|
|
84,247
|
|
||
SPOT
(2)
|
231,106
|
|
|
231,488
|
|
||
Simplex
|
259,260
|
|
|
209,756
|
|
||
IGO
|
39,005
|
|
|
40,249
|
|
||
|
|
|
|
||||
ARPU (monthly):
|
|
|
|
|
|||
Duplex
(1)
|
$
|
29.69
|
|
|
$
|
22.54
|
|
SPOT
(2)
|
10.48
|
|
|
10.04
|
|
||
Simplex
|
2.69
|
|
|
3.03
|
|
||
IGO
|
2.16
|
|
|
2.13
|
|
||
|
|
|
|
||||
Number of subscribers end of year:
|
|
|
|
|
|||
Duplex
|
67,362
|
|
|
84,163
|
|
||
SPOT
|
240,317
|
|
|
221,895
|
|
||
Simplex
|
287,167
|
|
|
231,353
|
|
||
IGO
|
38,658
|
|
|
39,351
|
|
||
Other
|
5,716
|
|
|
6,364
|
|
||
Total
|
639,220
|
|
|
583,126
|
|
(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 year ended December 31, 2013, excluding these 26,000 deactivated subscribers from prior period metrics, average subscribers would have been 57,587 and ARPU would have been $32.98. For the year ended December 31, 2014, excluding these 26,000 deactivated subscribers from prior period metrics, average subscribers would have been
62,433
and ARPU would have been $
36.03
.
|
(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 year ended December 31, 2013, excluding these 36,000 deactivated subscribers from prior period metrics, average subscribers would have been 213,438 and ARPU would have been $10.89.
|
•
|
During the fourth quarter of 2014, we recorded a reduction in the value of inventory of $14.4 million. We recognized these charges after evaluating our Duplex inventory and estimating the timing of new product launches. Our assessment indicated that there was an excess of Duplex equipment included in inventory on hand based on the current sales run-rate.
|
•
|
During the second quarter of 2014, we recorded a $7.3 million reduction in the value of inventory following cancellation of our contract with Qualcomm related to finished goods and raw materials previously accounted for as advances for inventory on our consolidated balance sheet. We cancelled this contract in March 2013, and we entered into an agreement with Qualcomm in July 2014 whereby we paid $0.1 million to Qualcomm for all remaining finished goods and raw materials held at Qualcomm. Our future business plan contemplates using Hughes-based technology in future product development. As a result, much of the raw material held by Qualcomm was not likely to be used in the future production of additional inventory and their value was impaired.
|
•
|
Holders of our 8.00% Notes Issued in 2013 converted approximately $24.9 million principal amount of these notes, resulting in the issuance of 46.4 million shares of common stock and a non-cash loss on extinguishment of debt of $44.1 million. The fair value of the shares issued to these holders exceeded the derivative liability and principal amount written off due to the conversions, resulting in a loss on extinguishment of debt.
|
•
|
On April 15, 2014 we met the condition for automatic conversion of our 8.00% Notes Issued in 2009. During 2014, as a result of this automatic conversion and other conversions prior to April 15, 2014, holders of our 8.00% Notes Issued in 2009 converted approximately $51.7 million principal amount of these notes into 47.1 million shares of our common stock, resulting in a non-cash gain on extinguishment of debt of $4.3 million. The derivative liability and principal amount written off exceeded the fair value of shares issued to the holders upon conversion, resulting in a gain on extinguishment of debt.
|
•
|
In May 2013 we entered into the Exchange Agreement (as defined below) with the holders of approximately 91.5% of our outstanding 5.75% Notes. The Exchanging Note Holders (as defined below) received a combination of cash, shares of our common stock and 8.00% Notes Issued in 2013. We redeemed the remaining 5.75% Notes for cash in an amount equal to their outstanding principal amount. As a result of the exchange and redemption, we recorded a loss on extinguishment of debt of approximately $47.2 million in 2013, representing the difference between the net carrying amount of the old 5.75% Notes and the fair value of consideration given in the exchange (including the new 8.00% Notes Issued in 2013, cash payments to both Exchanging and non-Exchanging Note Holders, equity issued to the Exchanging Note Holders and fees incurred in connection with the exchange).
|
•
|
Holders of our 8.00% Notes Issued in 2013 converted approximately $8.0 million principal amount of these notes into 14.9 million shares of common stock, resulting in a non-cash gain on extinguishment of debt of $4.2 million. The derivative liability and principal amount written off exceeded the fair value of shares issued to the holders upon conversion resulting in a gain on extinguishment of debt.
|
•
|
In July 2013, we entered into an amended and restated Loan Agreement with Thermo. As a result of the amendment and restatement, we recorded a non-cash loss on extinguishment of debt of $66.1 million, representing the difference between the fair value of the indebtedness under the Loan Agreement, as amended and restated, and its carrying value just prior to amendment and restatement.
|
•
|
In May and October 2013, we entered into common stock purchase agreements with Thermo. As a result of issuing stock under these agreements, we recognized non-cash losses totaling $16.4 million on the sale of shares representing the difference between the sale price of our common stock sold to Thermo and its fair value on the date of each sale (measured as the closing stock price on the date of each sale).
|
•
|
In July 2013, a holder of our 5.0% Warrants exercised warrants in a net share exercise. We recorded the fair value of the common stock issued with respect to this exercise as a loss on equity issuance of $0.3 million, representing the fair value of the stock issued on the date the warrant was exercised.
|
•
|
In November and December 2013, Hughes exercised its right to receive pre-payments of certain payment milestones in the form of our common stock at a 7% discount to market value in lieu of cash. In valuing the shares, we recorded a non-cash loss of approximately $1.0 million.
|
|
|
Year Ended December 31,
|
||||||||||
Statements of Cash Flows
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net cash provided by (used in) operating activities
|
|
$
|
2,162
|
|
|
$
|
3,981
|
|
|
$
|
(6,462
|
)
|
Net cash used in investing activities
|
|
(33,478
|
)
|
|
(19,277
|
)
|
|
(37,119
|
)
|
|||
Net cash provided by financing activities
|
|
33,276
|
|
|
5,337
|
|
|
48,972
|
|
|||
Effect of exchange rate changes on cash
|
|
(1,605
|
)
|
|
(328
|
)
|
|
225
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
355
|
|
|
$
|
(10,287
|
)
|
|
$
|
5,616
|
|
|
Outstanding Warrants
|
|
Strike Price
|
||||||||||
|
December 31,
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2015
|
|
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 the Contingent Equity Agreement with Thermo (See Note 9: Related Party Transactions in our Consolidated Financial Statements for a complete description of the Contingent Equity Agreement), we 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 are exercisable for five years from issuance. We originally issued these warrants between June 2009 and June 2012, and the exercise periods related to the remaining unexercised warrants will expire at various dates through June 2017.
|
(2)
|
In June 2011, we issued warrants (the “5.0% Warrants”) to purchase
15.2
million shares of our voting common stock in connection with the issuance of our 5.0% Convertible Senior Unsecured Notes. During 2013, the holders of a portion of the 5.0% Warrants exercised them to purchase
7.2 million
shares of common stock. The remaining 5.0% Warrants are exercisable until June 2016. See Note 3: Long-Term Debt and Other Financing Arrangements in the Consolidated Financial Statements for a complete description of the 5.0% Warrants.
|
|
|
Payments through
December 31, |
|
Estimated Future Payments
|
|
|
||||||
Capital Expenditures
|
|
2015
|
|
2016
|
|
Total
|
||||||
Hughes second-generation ground component (including research and development expense)
|
|
$
|
111,082
|
|
|
$
|
756
|
|
|
$
|
111,838
|
|
Ericsson ground network
|
|
23,900
|
|
|
7,608
|
|
|
31,508
|
|
|||
Other Capital Expenditures
|
|
1,667
|
|
|
—
|
|
|
1,667
|
|
|||
Total
|
|
$
|
136,649
|
|
|
$
|
8,364
|
|
|
$
|
145,013
|
|
Contractual Obligations:
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt obligations (1)
|
|
$
|
32,835
|
|
|
$
|
75,755
|
|
|
$
|
95,905
|
|
|
$
|
94,870
|
|
|
$
|
100,000
|
|
|
$
|
400,870
|
|
|
$
|
800,235
|
|
Interest on long-term debt (2)
|
|
21,630
|
|
|
20,861
|
|
|
19,925
|
|
|
18,086
|
|
|
14,992
|
|
|
14,971
|
|
|
110,465
|
|
|||||||
Network purchase obligations (3)
|
|
9,064
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,064
|
|
|||||||
Contract termination charge (4)
|
|
19,108
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,108
|
|
|||||||
Debt restructuring fees (5)
|
|
—
|
|
|
20,795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,795
|
|
|||||||
Operating lease obligations
|
|
1,297
|
|
|
1,252
|
|
|
1,124
|
|
|
280
|
|
|
252
|
|
|
129
|
|
|
4,334
|
|
|||||||
Pension obligations
|
|
969
|
|
|
962
|
|
|
969
|
|
|
991
|
|
|
992
|
|
|
5,236
|
|
|
10,119
|
|
|||||||
Licensing and royalty obligations (6)
|
|
753
|
|
|
575
|
|
|
575
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,903
|
|
|||||||
Total
|
|
$
|
85,656
|
|
|
$
|
120,200
|
|
|
$
|
118,498
|
|
|
$
|
114,227
|
|
|
$
|
116,236
|
|
|
$
|
421,206
|
|
|
$
|
976,023
|
|
(1)
|
These amounts include cash and payment in kind ("PIK") interest. Interest on the 8.00% Notes Issued in 2013 is payable semi-annually in cash at a rate of
5.75%
per annum and in additional notes at a rate of
2.25%
per annum. PIK interest is shown as due in the year the underlying debt is due. The maturity date of the 8.00% Notes Issued in 2013 is April 1, 2028; however the
|
(2)
|
Amounts include projected interest payments to be made in cash. Debt outstanding under our Facility Agreement bears interest at a floating rate and, accordingly, we estimated our interest costs in future periods. Amounts also include projected cash interest to be paid on the 8.00% Notes Issued in 2013 through the first put date of April 1, 2018.
|
(3)
|
We have purchase commitments with Thales, Ericsson, and Hughes related to the procurement, deployment and maintenance of our second-generation network. See Note 6: Commitments in our Consolidated Financial Statements for discussion on these contractual commitments.
|
(4)
|
In June 2012, we settled our prior commercial disputes with Thales, including those disputes that were the subject of an arbitration award, for €17,530,000. This amount represented one-third of the termination charges awarded to Thales in the arbitration. The payment is due on the later of the effective date of the new contract for the purchase of additional second-generation satellites and the occurrence of the effective date of the financing for the purchase of these satellites and the first draw from the financing. We included this amount in 2016 above, although the timing of any payment is indefinite and undeterminable. For purposes of the table above, we converted the termination charge to U.S. dollars using the exchange rate in effect at December 31, 2015. See Note 7: Contingencies in our Consolidated Financial Statements for further discussion.
|
(5)
|
In August 2013, pursuant to an amendment and restatement of the Facility Agreement, we paid the lenders a restructuring fee plus an additional underwriting fee to COFACE in the aggregate amount of approximately
$13.9 million
, representing
40%
of the total restructuring and underwriting fee; the balance of
$20.8 million
is due no later than December 31, 2017. We include this remaining amount in noncurrent liabilities on the consolidated balance sheets.
|
(6)
|
We have signed various licensing and royalty agreements necessary for the manufacture and distribution of our second-generation products, which are expected to be introduced in 2016. We will pay or have paid license fees for new product technology with royalty fees payable on a per unit basis as these units are manufactured, sold, or activated.
|
|
Page
|
Audited Consolidated Financial Statements of Globalstar, Inc.
|
|
Report of Crowe Horwath LLP, independent registered public accounting firm
|
|
Consolidated balance sheets at December 31, 2015 and 2014
|
|
Consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013
|
|
Consolidated statements of comprehensive income (loss) for the years ended December 31, 2015, 2014 and 2013
|
|
Consolidated statements of stockholders’ equity for the years ended December 31, 2015, 2014 and 2013
|
|
Consolidated statements of cash flows for the years ended December 31, 2015, 2014 and 2013
|
|
Notes to Consolidated Financial Statements
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
7,476
|
|
|
$
|
7,121
|
|
Accounts receivable, net of allowance of $5,270 and $4,788, respectively
|
14,536
|
|
|
15,015
|
|
||
Inventory
|
12,023
|
|
|
14,734
|
|
||
Prepaid expenses and other current assets
|
4,456
|
|
|
7,944
|
|
||
Total current assets
|
38,491
|
|
|
44,814
|
|
||
Property and equipment, net
|
1,077,560
|
|
|
1,113,560
|
|
||
Restricted cash
|
37,918
|
|
|
37,918
|
|
||
Deferred financing costs
|
57,906
|
|
|
63,862
|
|
||
Prepaid second-generation ground costs
|
8,929
|
|
|
—
|
|
||
Intangible and other assets, net
|
12,117
|
|
|
8,266
|
|
||
Total assets
|
$
|
1,232,921
|
|
|
$
|
1,268,420
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Current portion of long-term debt
|
$
|
32,835
|
|
|
$
|
6,450
|
|
Accounts payable
|
8,693
|
|
|
6,922
|
|
||
Accrued contract termination charge
|
18,546
|
|
|
21,308
|
|
||
Accrued expenses
|
22,439
|
|
|
22,342
|
|
||
Payables to affiliates
|
616
|
|
|
481
|
|
||
Deferred revenue
|
23,902
|
|
|
21,740
|
|
||
Total current liabilities
|
107,031
|
|
|
79,243
|
|
||
Long-term debt, less current portion
|
606,192
|
|
|
623,640
|
|
||
Employee benefit obligations
|
4,810
|
|
|
5,499
|
|
||
Derivative liabilities
|
239,642
|
|
|
441,550
|
|
||
Deferred revenue
|
6,413
|
|
|
6,572
|
|
||
Debt restructuring fees
|
20,795
|
|
|
20,795
|
|
||
Other non-current liabilities
|
10,907
|
|
|
12,205
|
|
||
Total non-current liabilities
|
888,759
|
|
|
1,110,261
|
|
||
|
|
|
|
||||
Commitments and contingent liabilities (Notes 6 and 7)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred Stock of $0.0001 par value; 100,000,000 shares authorized and none issued and outstanding at December 31, 2015 and 2014
|
—
|
|
|
—
|
|
||
Series A Preferred Convertible Stock of $0.0001 par value; one share authorized and none issued and outstanding at December 31, 2015 and 2014
|
—
|
|
|
—
|
|
||
Voting Common Stock of $0.0001 par value; 1,200,000,000 shares authorized; 904,448,226 and 864,378,563 shares issued and outstanding at December 31, 2015 and 2014, respectively
|
90
|
|
|
86
|
|
||
Nonvoting Common Stock of $0.0001 par value; 400,000,000 shares authorized; 134,008,656 shares issued and outstanding at December 31, 2015 and 2014
|
13
|
|
|
13
|
|
||
Additional paid-in capital
|
1,591,443
|
|
|
1,503,619
|
|
||
Accumulated other comprehensive loss
|
(4,833
|
)
|
|
(2,898
|
)
|
||
Retained deficit
|
(1,349,582
|
)
|
|
(1,421,904
|
)
|
||
Total stockholders’ equity
|
237,131
|
|
|
78,916
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,232,921
|
|
|
$
|
1,268,420
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||
Service revenues
|
$
|
74,124
|
|
|
$
|
69,823
|
|
|
$
|
64,644
|
|
Subscriber equipment sales
|
16,366
|
|
|
20,241
|
|
|
18,067
|
|
|||
Total revenue
|
90,490
|
|
|
90,064
|
|
|
82,711
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of services (exclusive of depreciation, amortization and accretion shown separately below)
|
30,615
|
|
|
29,668
|
|
|
30,210
|
|
|||
Cost of subscriber equipment sales
|
11,814
|
|
|
14,857
|
|
|
13,623
|
|
|||
Cost of subscriber equipment sales - reduction in the value of inventory
|
—
|
|
|
21,684
|
|
|
5,794
|
|
|||
Marketing, general and administrative
|
37,418
|
|
|
33,520
|
|
|
29,888
|
|
|||
Reduction in the value of long-lived assets
|
—
|
|
|
84
|
|
|
—
|
|
|||
Depreciation, amortization and accretion
|
77,247
|
|
|
86,146
|
|
|
90,592
|
|
|||
Total operating expenses
|
157,094
|
|
|
185,959
|
|
|
170,107
|
|
|||
Loss from operations
|
(66,604
|
)
|
|
(95,895
|
)
|
|
(87,396
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||
Loss on extinguishment of debt
|
(2,254
|
)
|
|
(39,846
|
)
|
|
(109,092
|
)
|
|||
Loss on equity issuance
|
(6,663
|
)
|
|
(748
|
)
|
|
(17,709
|
)
|
|||
Interest income and expense, net of amounts capitalized
|
(35,854
|
)
|
|
(43,233
|
)
|
|
(67,828
|
)
|
|||
Derivative gain (loss)
|
181,860
|
|
|
(286,049
|
)
|
|
(305,999
|
)
|
|||
Other
|
3,229
|
|
|
3,786
|
|
|
(1,954
|
)
|
|||
Total other income (expense)
|
140,318
|
|
|
(366,090
|
)
|
|
(502,582
|
)
|
|||
Income (loss) before income taxes
|
73,714
|
|
|
(461,985
|
)
|
|
(589,978
|
)
|
|||
Income tax expense
|
1,392
|
|
|
881
|
|
|
1,138
|
|
|||
Net income (loss)
|
$
|
72,322
|
|
|
$
|
(462,866
|
)
|
|
$
|
(591,116
|
)
|
Income (loss) per common share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
0.07
|
|
|
$
|
(0.50
|
)
|
|
$
|
(0.96
|
)
|
Diluted
|
0.07
|
|
|
(0.50
|
)
|
|
(0.96
|
)
|
|||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|||
Basic
|
1,020,149
|
|
|
934,356
|
|
|
614,959
|
|
|||
Diluted
|
1,230,394
|
|
|
934,356
|
|
|
614,959
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income (loss)
|
$
|
72,322
|
|
|
$
|
(462,866
|
)
|
|
$
|
(591,116
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|||
Defined benefit pension plan liability adjustment
|
787
|
|
|
(2,467
|
)
|
|
3,485
|
|
|||
Net foreign currency translation adjustment
|
(2,722
|
)
|
|
(1,302
|
)
|
|
(856
|
)
|
|||
Total other comprehensive income (loss)
|
(1,935
|
)
|
|
(3,769
|
)
|
|
2,629
|
|
|||
Total comprehensive income (loss)
|
$
|
70,387
|
|
|
$
|
(466,635
|
)
|
|
$
|
(588,487
|
)
|
|
Common
Shares
|
Common
Stock
Amount
|
Additional
Paid-In
Capital
|
Accumulated Other Comprehensive Income (Loss)
|
Retained
Deficit
|
Total
|
|||||||||||
Balances - December 31, 2012
|
489,086
|
|
$
|
49
|
|
$
|
864,175
|
|
$
|
(1,758
|
)
|
$
|
(367,922
|
)
|
$
|
494,544
|
|
Net issuance of restricted stock awards and recognition of stock-based compensation
|
1,213
|
|
—
|
|
1,823
|
|
—
|
|
—
|
|
1,823
|
|
|||||
Contribution of services
|
—
|
|
—
|
|
548
|
|
—
|
|
—
|
|
548
|
|
|||||
Common stock issued in connection with conversions of 8.00% Notes Issued in 2013
|
14,863
|
|
2
|
|
10,226
|
|
—
|
|
—
|
|
10,228
|
|
|||||
Issuance of stock to Exchanging Note Holders
|
30,319
|
|
3
|
|
12,124
|
|
—
|
|
—
|
|
12,127
|
|
|||||
Common stock issued in connection with conversions of 5.0% Notes
|
93,006
|
|
10
|
|
48,194
|
|
—
|
|
—
|
|
48,204
|
|
|||||
Warrants exercised associated with the 8.00% Notes Issued in 2009
|
21,353
|
|
2
|
|
22,216
|
|
—
|
|
—
|
|
22,218
|
|
|||||
Warrants exercised associated with the 5.0% Notes
|
6,707
|
|
1
|
|
2,312
|
|
—
|
|
—
|
|
2,313
|
|
|||||
Issuance of stock in connection with interest payments for 8.00% Notes Issued in 2009
|
1,279
|
|
—
|
|
644
|
|
—
|
|
—
|
|
644
|
|
|||||
Issuance of stock in connection with contingent consideration
|
3,939
|
|
—
|
|
1,844
|
|
—
|
|
—
|
|
1,844
|
|
|||||
Issuance of stock to Thermo in connection with the Consent Agreement, Common Stock Purchase Agreement, and Common Stock Purchase and Option Agreement
|
174,009
|
|
17
|
|
82,709
|
|
—
|
|
—
|
|
82,726
|
|
|||||
Purchase of stock in connection with the termination of a share lending arrangement
|
—
|
|
—
|
|
4,429
|
|
—
|
|
—
|
|
4,429
|
|
|||||
Return of stock in connection with the termination of a share lending arrangement
|
(10,185
|
)
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
|||||
Issuance of stock to Terrapin
|
6,131
|
|
1
|
|
5,999
|
|
—
|
|
—
|
|
6,000
|
|
|||||
Issuance of stock to vendor
|
9,501
|
|
1
|
|
15,412
|
|
—
|
|
—
|
|
15,413
|
|
|||||
Issuance of stock for employee stock option exercises
|
2,621
|
|
—
|
|
1,874
|
|
—
|
|
—
|
|
1,874
|
|
|||||
Other issuances of stock and equity transactions
|
98
|
|
—
|
|
101
|
|
—
|
|
—
|
|
101
|
|
|||||
Issuance of stock through employee stock purchase plan
|
952
|
|
—
|
|
207
|
|
—
|
|
—
|
|
207
|
|
|||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
2,629
|
|
—
|
|
2,629
|
|
|||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(591,116
|
)
|
(591,116
|
)
|
|||||
Balances - December 31, 2013
|
844,892
|
|
85
|
|
1,074,837
|
|
871
|
|
(959,038
|
)
|
116,755
|
|
|||||
Net issuance of restricted stock awards and recognition of stock-based compensation
|
672
|
|
—
|
|
4,217
|
|
—
|
|
—
|
|
4,217
|
|
|||||
Contribution of services
|
—
|
|
—
|
|
548
|
|
—
|
|
—
|
|
548
|
|
|||||
Warrants exercised associated with Contingent Equity Agreement
|
11,276
|
|
—
|
|
112
|
|
—
|
|
—
|
|
112
|
|
|||||
Common stock issued in connection with conversions of 8.00% Notes Issued in 2009
|
47,067
|
|
5
|
|
114,206
|
|
—
|
|
—
|
|
114,211
|
|
|||||
Common stock issued in connection with conversions of 8.00% Notes Issued in 2013
|
46,353
|
|
5
|
|
161,843
|
|
—
|
|
—
|
|
161,848
|
|
|||||
Warrants exercised associated with the 8.00% Notes Issued in 2009
|
38,200
|
|
4
|
|
132,098
|
|
—
|
|
—
|
|
132,102
|
|
|||||
Warrants exercised associated with the Thermo Loan Agreement
|
4,206
|
|
—
|
|
42
|
|
—
|
|
—
|
|
42
|
|
|||||
Proceeds received associated with Section 16b gains recognized by Thermo
|
—
|
|
—
|
|
93
|
|
—
|
|
—
|
|
93
|
|
|||||
Issuance of stock to vendors
|
2,765
|
|
—
|
|
11,722
|
|
—
|
|
—
|
|
11,722
|
|
|||||
Issuance of stock for employee stock option exercises
|
1,900
|
|
—
|
|
1,323
|
|
—
|
|
—
|
|
1,323
|
|
|||||
Issuance of stock through employee stock purchase plan
|
306
|
|
—
|
|
538
|
|
—
|
|
—
|
|
538
|
|
|||||
Issuance of stock in connection with contingent consideration
|
750
|
|
—
|
|
2,040
|
|
—
|
|
—
|
|
2,040
|
|
|||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
(3,769
|
)
|
—
|
|
(3,769
|
)
|
|||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(462,866
|
)
|
(462,866
|
)
|
|||||
Balances – December 31, 2014
|
998,387
|
|
$
|
99
|
|
$
|
1,503,619
|
|
$
|
(2,898
|
)
|
$
|
(1,421,904
|
)
|
$
|
78,916
|
|
Net issuance of restricted stock awards and recognition of stock-based compensation
|
600
|
|
—
|
|
2,780
|
|
—
|
|
—
|
|
2,780
|
|
|||||
Contribution of services
|
—
|
|
—
|
|
548
|
|
—
|
|
—
|
|
548
|
|
|||||
Issuance of stock for employee stock option exercises
|
303
|
|
—
|
|
169
|
|
—
|
|
—
|
|
169
|
|
|||||
Issuance of stock through employee stock purchase plan
|
321
|
|
—
|
|
918
|
|
—
|
|
—
|
|
918
|
|
|||||
Common stock issued in connection with conversions of 8.00% Notes Issued in 2013
|
10,887
|
|
1
|
|
27,247
|
|
—
|
|
—
|
|
27,248
|
|
|||||
Issuance of stock in connection with contingent consideration
|
174
|
|
—
|
|
481
|
|
—
|
|
—
|
|
481
|
|
|||||
Issuance of stock to Terrapin
|
20,403
|
|
2
|
|
38,998
|
|
—
|
|
—
|
|
39,000
|
|
|||||
Issuance of stock to vendor
|
7,382
|
|
1
|
|
16,683
|
|
—
|
|
—
|
|
16,684
|
|
|||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
(1,935
|
)
|
—
|
|
(1,935
|
)
|
|||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
72,322
|
|
72,322
|
|
|||||
Balances – December 31, 2015
|
1,038,457
|
|
$
|
103
|
|
$
|
1,591,443
|
|
$
|
(4,833
|
)
|
$
|
(1,349,582
|
)
|
$
|
237,131
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
$
|
72,322
|
|
|
$
|
(462,866
|
)
|
|
$
|
(591,116
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation, amortization, and accretion
|
77,247
|
|
|
86,146
|
|
|
90,592
|
|
|||
Change in fair value of derivative assets and liabilities
|
(181,860
|
)
|
|
286,049
|
|
|
305,155
|
|
|||
Stock-based compensation expense
|
2,955
|
|
|
3,400
|
|
|
2,127
|
|
|||
Amortization of deferred financing costs
|
9,722
|
|
|
10,043
|
|
|
8,792
|
|
|||
Reduction in the value of long-lived assets and inventory
|
—
|
|
|
21,768
|
|
|
5,794
|
|
|||
Provision for bad debts
|
3,357
|
|
|
2,281
|
|
|
2,321
|
|
|||
Noncash interest and accretion expense
|
11,103
|
|
|
16,214
|
|
|
44,488
|
|
|||
Loss on extinguishment of debt
|
2,254
|
|
|
39,846
|
|
|
109,092
|
|
|||
Loss on equity issuance
|
6,663
|
|
|
748
|
|
|
17,709
|
|
|||
Unrealized foreign currency (gain) loss
|
(3,597
|
)
|
|
(4,059
|
)
|
|
1,013
|
|
|||
Other, net
|
(11
|
)
|
|
945
|
|
|
1,370
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
(3,454
|
)
|
|
(2,200
|
)
|
|
(4,321
|
)
|
|||
Inventory
|
1,118
|
|
|
4,187
|
|
|
3,124
|
|
|||
Prepaid expenses and other current assets
|
326
|
|
|
(1,339
|
)
|
|
(727
|
)
|
|||
Other assets
|
(774
|
)
|
|
202
|
|
|
(89
|
)
|
|||
Accounts payable and accrued expenses
|
702
|
|
|
(1,725
|
)
|
|
(2,595
|
)
|
|||
Payables to affiliates
|
135
|
|
|
279
|
|
|
(29
|
)
|
|||
Other non-current liabilities
|
1,332
|
|
|
(619
|
)
|
|
(1,079
|
)
|
|||
Deferred revenue
|
2,622
|
|
|
4,681
|
|
|
1,917
|
|
|||
Net cash provided by (used in) operating activities
|
2,162
|
|
|
3,981
|
|
|
(6,462
|
)
|
|||
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|||
Second-generation satellites, ground and related launch costs (including interest)
|
(25,195
|
)
|
|
(14,604
|
)
|
|
(43,693
|
)
|
|||
Property and equipment additions
|
(5,523
|
)
|
|
(3,277
|
)
|
|
(1,651
|
)
|
|||
Purchase of intangible assets
|
(2,520
|
)
|
|
(1,396
|
)
|
|
—
|
|
|||
Investment in businesses
|
(240
|
)
|
|
—
|
|
|
(634
|
)
|
|||
Restricted cash
|
—
|
|
|
—
|
|
|
8,859
|
|
|||
Net cash used in investing activities
|
(33,478
|
)
|
|
(19,277
|
)
|
|
(37,119
|
)
|
|||
Cash flows provided by financing activities:
|
|
|
|
|
|
|
|
|
|||
Borrowings from Facility Agreement
|
—
|
|
|
—
|
|
|
672
|
|
|||
Principal payments of the Facility Agreement
|
(6,450
|
)
|
|
(4,046
|
)
|
|
—
|
|
|||
Proceeds from contingent equity account
|
—
|
|
|
—
|
|
|
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
|
—
|
|
|
—
|
|
|
65,000
|
|
|||
Proceeds from issuance of stock to Terrapin
|
39,000
|
|
|
—
|
|
|
6,000
|
|
|||
Payment of deferred financing costs
|
—
|
|
|
(164
|
)
|
|
(16,909
|
)
|
|||
Proceeds from issuance of common stock and exercise of warrants
|
726
|
|
|
9,547
|
|
|
15,414
|
|
|||
Net cash provided by financing activities
|
33,276
|
|
|
5,337
|
|
|
48,972
|
|
|||
Effect of exchange rate changes on cash
|
(1,605
|
)
|
|
(328
|
)
|
|
225
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
355
|
|
|
(10,287
|
)
|
|
5,616
|
|
|||
Cash and cash equivalents, beginning of period
|
7,121
|
|
|
17,408
|
|
|
11,792
|
|
|||
Cash and cash equivalents, end of period
|
$
|
7,476
|
|
|
$
|
7,121
|
|
|
$
|
17,408
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Cash paid for:
|
|
|
|
|
|
|
|
|
|||
Interest
|
$
|
19,683
|
|
|
$
|
20,216
|
|
|
$
|
21,413
|
|
Income taxes
|
445
|
|
|
61
|
|
|
116
|
|
|||
Supplemental disclosure of non-cash financing and investing activities:
|
|
|
|
|
|
|
|
|
|||
Increase in non-cash capitalized accrued interest for second-generation satellites and ground costs
|
2,247
|
|
|
1,684
|
|
|
4,291
|
|
|||
Capitalization of the accretion of debt discount and amortization of prepaid financing costs
|
3,346
|
|
|
2,708
|
|
|
5,600
|
|
|||
Capitalized accrued interest and other payments made in convertible notes and common stock
|
921
|
|
|
3,974
|
|
|
12,056
|
|
|||
Principal amount of debt converted into common stock
|
6,491
|
|
|
76,532
|
|
|
49,757
|
|
|||
Reduction in debt discount and deferred financing costs related to note conversions
|
2,085
|
|
|
28,249
|
|
|
27,458
|
|
|||
Issuance of common stock to converting note holders at fair value
|
26,669
|
|
|
271,982
|
|
|
10,227
|
|
|||
Reduction in derivative value due to conversion of debt and warrants
|
20,008
|
|
|
308,234
|
|
|
10,236
|
|
|||
Issuance of common stock to vendor for payment of invoices
|
16,683
|
|
|
10,687
|
|
|
9,227
|
|
|||
Increase of principal amount of Thermo Loan Agreement
|
6,000
|
|
|
—
|
|
|
—
|
|
|||
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 at fair value
|
—
|
|
|
—
|
|
|
12,127
|
|
|||
Reduction in carrying amount of Thermo Loan Agreement due to amendment
|
—
|
|
|
—
|
|
|
35,026
|
|
•
|
two-way voice communication and data transmissions (“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.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at beginning of period
|
$
|
4,788
|
|
|
$
|
7,419
|
|
|
$
|
6,667
|
|
Provision, net of recoveries
|
2,782
|
|
|
2,281
|
|
|
2,321
|
|
|||
Write-offs and other adjustments
|
(2,300
|
)
|
|
(4,912
|
)
|
|
(1,569
|
)
|
|||
Balance at end of period
|
$
|
5,270
|
|
|
$
|
4,788
|
|
|
$
|
7,419
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Developed technology
|
$
|
5,861
|
|
|
$
|
(4,485
|
)
|
|
$
|
5,727
|
|
|
$
|
(4,134
|
)
|
Customer relationships
|
2,100
|
|
|
(2,047
|
)
|
|
2,100
|
|
|
(1,981
|
)
|
||||
Trade name
|
200
|
|
|
(200
|
)
|
|
200
|
|
|
(200
|
)
|
||||
|
$
|
8,161
|
|
|
$
|
(6,732
|
)
|
|
$
|
8,027
|
|
|
$
|
(6,315
|
)
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Globalstar System:
|
|
|
|
|
|
||
Space component
|
|
|
|
|
|
||
First and second-generation satellites in service
|
$
|
1,211,768
|
|
|
$
|
1,211,904
|
|
Prepaid long-lead items
|
17,040
|
|
|
17,040
|
|
||
Second-generation satellite, on-ground spare
|
32,481
|
|
|
32,481
|
|
||
Ground component
|
46,870
|
|
|
47,595
|
|
||
Construction in progress:
|
|
|
|
|
|||
Space component
|
81
|
|
|
30
|
|
||
Ground component
|
177,780
|
|
|
141,789
|
|
||
Other
|
5,593
|
|
|
2,458
|
|
||
Total Globalstar System
|
1,491,613
|
|
|
1,453,297
|
|
||
Internally developed and purchased software
|
14,492
|
|
|
15,392
|
|
||
Equipment
|
10,802
|
|
|
12,647
|
|
||
Land and buildings
|
3,151
|
|
|
3,590
|
|
||
Leasehold improvements
|
1,671
|
|
|
1,620
|
|
||
Total property and equipment
|
1,521,729
|
|
|
1,486,546
|
|
||
Accumulated depreciation
|
(444,169
|
)
|
|
(372,986
|
)
|
||
Total property and equipment, net
|
$
|
1,077,560
|
|
|
$
|
1,113,560
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Interest cost eligible to be capitalized
|
$
|
42,749
|
|
|
$
|
44,854
|
|
|
$
|
45,308
|
|
Interest cost recorded in interest income (expense), net
|
(32,609
|
)
|
|
(36,909
|
)
|
|
(28,211
|
)
|
|||
Net interest capitalized
|
$
|
10,140
|
|
|
$
|
7,945
|
|
|
$
|
17,097
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Depreciation Expense
|
$
|
76,711
|
|
|
$
|
84,802
|
|
|
$
|
89,828
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
Principal
Amount |
|
Carrying
Value |
|
Principal
Amount |
|
Carrying
Value |
||||||||
Facility Agreement
|
$
|
575,846
|
|
|
$
|
575,846
|
|
|
$
|
582,296
|
|
|
$
|
582,296
|
|
Thermo Loan Agreement
|
83,222
|
|
|
50,664
|
|
|
68,154
|
|
|
32,971
|
|
||||
8.00% Convertible Senior Notes Issued in 2013
|
16,747
|
|
|
12,517
|
|
|
22,799
|
|
|
14,823
|
|
||||
Total Debt
|
675,815
|
|
|
639,027
|
|
|
673,249
|
|
|
630,090
|
|
||||
Less: Current Portion
|
32,835
|
|
|
32,835
|
|
|
6,450
|
|
|
6,450
|
|
||||
Long-Term Debt
|
$
|
642,980
|
|
|
$
|
606,192
|
|
|
$
|
666,799
|
|
|
$
|
623,640
|
|
•
|
The amendments to the Facility Agreement clarified the definition of Net Debt (which previously was ambiguous and subject to varying interpretations), adjusted the calculation of the Net Debt to Adjusted Consolidated EBITDA covenant, changed the way in which certain Equity Cure Contributions are calculated, and extended by up to June 2019 the date through which Equity Cure Contributions can be made.
|
•
|
The lenders agreed that the
$14 million
equity financing the Company received from Terrapin on June 22, 2015 would be credited towards an Equity Cure Contribution for the measurement period ended June 30, 2015 and that any equity financing the Company raised between the closing date and June 30, 2016 may be used to the extent required as an Equity Cure Contribution for any period ending on or before June 30, 2016.
|
•
|
The lenders waived any existing defaults or events of default under the Facility Agreement.
|
•
|
Thermo agreed to make, or caused to be made, available to the Company cash equity financing, subject to certain conditions, of
$30.0 million
, all as further described below.
|
•
|
Thermo repeated in favor of the lenders and agent each of the representations and warranties previously made by Thermo in the Amended and Restated Thermo Subordinated Deed executed in July 2013.
|
•
|
The Company paid a waiver fee to the agent and lenders in the aggregate amount of
$85,000
.
|
•
|
The Company's capital expenditures do not exceed
$13.2 million
for 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;
|
•
|
The Company maintain at all times a minimum liquidity balance of
$4.0 million
;
|
•
|
The Company achieve for each period the following minimum adjusted consolidated EBITDA (as defined in the Facility Agreement) (amounts in thousands):
|
Period
|
|
Minimum Amount
|
||
1/1/15-6/30/15
|
|
$
|
16,958
|
|
7/1/15-12/31/15
|
|
$
|
23,469
|
|
1/1/16-6/30/16
|
|
$
|
24,502
|
|
7/1/16-12/31/16
|
|
$
|
32,426
|
|
•
|
The Company maintain a minimum debt service coverage ratio of
1.00
:1; and
|
•
|
The Company maintain a maximum net debt to adjusted consolidated EBITDA ratio of
15.75
:1 for the December 31, 2015 measurement period, decreasing gradually each semi-annual period until the requirement equals
2.50
:1 for the five semi-annual measurement periods leading up to December 31, 2022.
|
•
|
The initial principal payment date, formerly June 30, 2013, was postponed to December 31, 2014, and the final maturity date was extended from
June 30, 2020
to
December 31, 2022
.
|
•
|
The remaining principal payments, with the final payment due December 31, 2022, were also restructured, resulting in an aggregate postponement of
$235.3 million
in principal payments through 2019.
|
•
|
The annual interest rate increased by
0.5%
to LIBOR plus
2.75%
through July 1, 2017, and increases by an additional
0.5%
each year thereafter to a maximum rate of LIBOR plus
5.75%
.
|
•
|
Mandatory prepayments were expanded in specified circumstances and amounts, including if the Company generates excess cash flow, monetizes its spectrum rights, receives the proceeds of certain asset dispositions or receives more than
$145.0 million
from the sale of additional debt or equity securities (excluding the Thermo commitments described above).
|
•
|
The financial covenants were modified, including changing the amount of permitted capital expenditures, reducing the required minimum liquidity amount from
$5.0 million
to
$4.0 million
, restructuring the other existing financial covenants to correspond to the Company's revised business plan reflecting the delays in delivery of its second-generation satellites, and adding a new covenant with respect to its interest coverage ratio (as defined in the Facility Agreement). This new ratio requires that the Company must maintain an adjusted consolidated EBITDA to consolidated interest expense ratio (as defined in the Facility Agreement) of
1.50
:1 for the December 31, 2015 measurement period, increasing gradually each semi-annual period until the requirement equals
5.00
:1 for the five semi-annual measurement periods leading up to December 31, 2022.
|
•
|
The definition of Change of Control was amended to require a mandatory prepayment of the entire facility if Thermo and certain of its affiliates own less than
51%
of the Company's voting common stock.
|
•
|
The required balance of the Debt Service Reserve Account was fixed at the current amount of approximately $
37.9 million
for the length of the Facility Agreement.
|
•
|
Any new subordinated indebtedness may not mature or pay cash interest prior to the final maturity date of the Facility Agreement.
|
•
|
The Company, while the Facility Agreement is outstanding, is prohibited from paying any cash dividends or repaying any principal or interest with respect to its indebtedness to Thermo under the Thermo Loan Agreement.
|
•
|
The Company is prohibited from amending its material agreements without the lenders’ prior consent.
|
•
|
An event of default was added if any litigation against the Company results in a final judgment that imposes a material liability that was not anticipated by its business plan.
|
•
|
The Company requests the funds, or
|
•
|
An Event of Default occurs and is continuing under the Facility Agreement, and, at the direction of the agent under the Facility Agreement, the Company delivers a notice to Terrapin under the August 2015 Terrapin Agreement drawing the
|
•
|
Approximately
$13.5 million
in cash, with respect to a portion of the principal amount of the Exchanged Notes, plus approximately
$0.5 million
in cash, equal to all accrued and unpaid interest on the Exchanged Notes from April 1, 2013 to the closing;
|
•
|
Approximately
30.3 million
shares of the Company's voting common stock; and
|
•
|
Approximately
$54.6 million
principal amount of the Company's new
8.00%
Convertible Senior Notes due
April 1, 2028
(the “8.00% Notes Issued in 2013”), with an initial conversion price of
$0.80
per share, subject to adjustment as described below.
|
•
|
Canceling the Exchanged Notes as described above;
|
•
|
Depositing with the Trustee approximately
$2.1 million
, an amount equal to the interest due on all of the 5.75% Notes on April 1, 2013 and accumulated interest thereon, for distribution to the holders of record of the 5.75% Notes as of March 15, 2013;
|
•
|
Depositing with the Trustee approximately
$6.3 million
, an amount equal to the principal amount of the 5.75% Notes (other than the Exchanged Notes) and interest thereon from April 1, 2013 to June 26, 2013 and directing the Trustee to pay such amounts to the holders of the 5.75% Notes (other than the Exchanged Notes); and
|
•
|
Redeeming the remaining 5.75% Notes.
|
Period
|
|
Principal Amount Converted
|
|
Shares of Voting Common Stock Issued
|
|
(Gain)/Loss on Extinguishment of Debt
|
|||||
Year Ended December 31, 2013
|
|
$
|
8,029
|
|
|
14,863
|
|
|
$
|
(4,237
|
)
|
Year Ended December 31, 2014
|
|
24,881
|
|
|
46,353
|
|
|
44,061
|
|
||
Year Ended December 31, 2015
|
|
6,491
|
|
|
10,887
|
|
|
2,254
|
|
||
Total
|
|
$
|
39,401
|
|
|
72,103
|
|
|
$
|
42,078
|
|
|
Outstanding Warrants
|
|
Strike Price
|
||||||||||
|
December 31,
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2015
|
|
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)
|
Warrants issued in connection with the Contingent Equity Agreement have a
five
-year exercise period from issuance. These warrants were originally issued between June 2009 and June 2012 and the exercise periods related to the remaining unexercised warrants will expire at various dates through June 2017.
|
(2)
|
The 5.0% Warrants are exercisable until
five
years after their issuance, which is June 2016.
|
2016
|
$
|
32,835
|
|
2017
|
75,755
|
|
|
2018
|
94,614
|
|
|
2019
|
94,870
|
|
|
2020
|
100,000
|
|
|
Thereafter
|
277,741
|
|
|
Total
|
$
|
675,815
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Intangible and other assets:
|
|
|
|
|
|
||
Interest rate cap
|
$
|
6
|
|
|
$
|
46
|
|
Total intangible and other assets
|
$
|
6
|
|
|
$
|
46
|
|
|
|
|
|
||||
Derivative liabilities:
|
|
|
|
|
|||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
$
|
(26,203
|
)
|
|
$
|
(79,040
|
)
|
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
(213,439
|
)
|
|
(362,510
|
)
|
||
Total derivative liabilities
|
$
|
(239,642
|
)
|
|
$
|
(441,550
|
)
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Interest rate cap
|
$
|
(40
|
)
|
|
$
|
(139
|
)
|
|
$
|
101
|
|
Warrants issued with 8.00% Notes Issued in 2009
|
—
|
|
|
(67,523
|
)
|
|
(54,518
|
)
|
|||
Compound embedded derivative with 8.00% Notes Issued in 2009
|
—
|
|
|
(16,406
|
)
|
|
(61,859
|
)
|
|||
Contingent put feature embedded in the 5.0% Notes
|
—
|
|
|
—
|
|
|
2,978
|
|
|||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
32,829
|
|
|
(69,133
|
)
|
|
(64,153
|
)
|
|||
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
149,071
|
|
|
(132,848
|
)
|
|
(128,548
|
)
|
|||
Total derivative gain (loss)
|
$
|
181,860
|
|
|
$
|
(286,049
|
)
|
|
$
|
(305,999
|
)
|
|
Fair Value Measurements at December 31, 2015:
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
Balance
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate cap
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
Total assets measured at fair value
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liability for potential stock issuance to Hughes
|
—
|
|
|
(5,495
|
)
|
|
—
|
|
|
(5,495
|
)
|
||||
Compound embedded derivative with 8.00% Notes Issued in 2013
|
—
|
|
|
—
|
|
|
(26,203
|
)
|
|
(26,203
|
)
|
||||
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
—
|
|
|
—
|
|
|
(213,439
|
)
|
|
(213,439
|
)
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
(5,495
|
)
|
|
$
|
(239,642
|
)
|
|
$
|
(245,137
|
)
|
|
Year Ended December 31
|
||||||
|
2015
|
|
2014
|
||||
Balance at beginning of period
|
$
|
(441,550
|
)
|
|
$
|
(464,449
|
)
|
Derivative adjustment related to conversions
|
20,008
|
|
|
306,886
|
|
||
Unrealized gain (loss), included in derivative gain (loss)
|
181,900
|
|
|
(285,910
|
)
|
||
Removal of liability for contingent consideration as no longer recorded at fair value
|
—
|
|
|
1,923
|
|
||
Balance at end of period
|
$
|
(239,642
|
)
|
|
$
|
(441,550
|
)
|
|
Amount
Invested
|
|
Issuance Price per Share
|
|
Closing Price per Share
|
|
Discount Value (4)
|
|
Total Fair Value
|
|
Shares Issued
(5)
|
|||||||||||
May 20, 2013 (1)
|
$
|
25,000
|
|
|
$
|
0.32
|
|
|
$
|
0.40
|
|
|
$
|
6,250
|
|
|
$
|
31,250
|
|
|
78,125,000
|
|
May 20, 2013 (1)
|
5,000
|
|
|
0.32
|
|
|
0.40
|
|
|
1,250
|
|
|
6,250
|
|
|
15,625,000
|
|
|||||
June 28, 2013 (1)
|
9,000
|
|
|
0.32
|
|
|
0.55
|
|
|
6,469
|
|
|
15,469
|
|
|
28,125,000
|
|
|||||
July 29, 2013 (2)
|
6,000
|
|
|
0.52
|
|
|
0.62
|
|
|
1,154
|
|
|
7,154
|
|
|
11,538,462
|
|
|||||
August 19, 2013 (2)
|
6,500
|
|
|
0.52
|
|
|
0.62
|
|
|
1,250
|
|
|
7,750
|
|
|
12,500,000
|
|
|||||
December 27, 2013 (2)
|
13,500
|
|
|
0.52
|
|
|
1.82
|
|
|
33,750
|
|
|
47,250
|
|
|
25,961,538
|
|
|||||
Total (3)
|
$
|
65,000
|
|
|
|
|
|
|
|
|
$
|
50,123
|
|
|
$
|
115,123
|
|
|
171,875,000
|
|
(1)
|
Amounts were invested pursuant to the terms of the Consent Agreement and the Common Stock Purchase Agreement. The fair value of these investments of
$53.0 million
is recorded in additional paid-in-capital on the Company’s consolidated balance sheet.
|
(2)
|
Amounts were invested pursuant to the terms of the Consent Agreement and the Common Stock Purchase and Option Agreement. The fair value of these investments of
$62.2 million
is recorded in additional paid-in-capital on the Company’s consolidated balance sheet.
|
(3)
|
Pursuant to the terms of the Consent Agreement, certain equity transactions which result in cash invested into Globalstar may reduce the amounts committed by Thermo. Since the execution of the Consent Agreement, the Company had received approximately
$20.0 million
through warrant exercises and other equity issuances in addition to amounts received through the Company’s exercise of the First Option under the Common Stock Purchase and Option Agreement (see Note 3: Long-Term Debt and Other Financing Arrangements for further discussion).
|
(4)
|
The discount on shares issued is recorded on the Company’s consolidated statement of operations in loss on equity issuance. This expense item represents the discount on shares issued to Thermo as well as certain other losses recorded on equity issued during 2013 related to cashless exercises of warrants issued with the
5.0%
Notes.
|
(5)
|
All shares issued to Thermo in connection with these agreements were shares of the Company’s nonvoting common stock.
|
|
Fair Value Measurements at December 31, 2014:
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total Losses
|
||||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property and equipment, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,113,560
|
|
|
$
|
84
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,113,560
|
|
|
$
|
84
|
|
2016
|
$
|
1,297
|
|
2017
|
1,252
|
|
|
2018
|
1,124
|
|
|
2019
|
280
|
|
|
2020
|
252
|
|
|
Thereafter
|
129
|
|
|
Total minimum lease payments
|
$
|
4,334
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Accrued interest
|
$
|
317
|
|
|
$
|
827
|
|
Accrued liability for potential stock issuance to Hughes
|
5,495
|
|
|
—
|
|
||
Accrued compensation and benefits
|
2,098
|
|
|
2,597
|
|
||
Accrued property and other taxes
|
4,125
|
|
|
6,727
|
|
||
Accrued customer liabilities and deposits
|
3,216
|
|
|
2,751
|
|
||
Accrued professional and other service provider fees
|
1,601
|
|
|
1,925
|
|
||
Accrued liability for contingent consideration
|
—
|
|
|
481
|
|
||
Accrued commissions
|
1,216
|
|
|
686
|
|
||
Accrued telecommunications expenses
|
1,487
|
|
|
1,135
|
|
||
Accrued satellite and ground costs
|
60
|
|
|
1,531
|
|
||
Accrued inventory
|
502
|
|
|
1,189
|
|
||
Other accrued expenses
|
2,322
|
|
|
2,493
|
|
||
Total accrued expenses
|
$
|
22,439
|
|
|
$
|
22,342
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at beginning of period
|
$
|
129
|
|
|
$
|
142
|
|
|
$
|
235
|
|
Provision
|
279
|
|
|
246
|
|
|
189
|
|
|||
Utilization
|
(307
|
)
|
|
(259
|
)
|
|
(282
|
)
|
|||
Balance at end of period
|
$
|
101
|
|
|
$
|
129
|
|
|
$
|
142
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Long-term accrued interest
|
$
|
96
|
|
|
$
|
131
|
|
Asset retirement obligation
|
1,302
|
|
|
1,184
|
|
||
Deferred rent and other deferred expense
|
593
|
|
|
748
|
|
||
Capital lease obligations
|
94
|
|
|
40
|
|
||
Liability related to the Cooperative Endeavor Agreement with the State of Louisiana
|
716
|
|
|
1,007
|
|
||
Uncertain income tax positions
|
5,795
|
|
|
6,061
|
|
||
Foreign tax contingencies
|
2,311
|
|
|
3,034
|
|
||
Total other non-current liabilities
|
$
|
10,907
|
|
|
$
|
12,205
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
General and administrative expenses
|
$
|
320
|
|
|
$
|
274
|
|
|
$
|
268
|
|
Non-cash expenses
|
548
|
|
|
548
|
|
|
548
|
|
|||
Loss on sale of equity issuance
|
—
|
|
|
—
|
|
|
16,373
|
|
|||
Loss on extinguishment of debt related to amendment and restatement of Thermo Loan Agreement
|
—
|
|
|
—
|
|
|
66,088
|
|
|||
Total
|
$
|
868
|
|
|
$
|
822
|
|
|
$
|
83,277
|
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Change in projected benefit obligation:
|
|
|
|
|
|
||
Projected benefit obligation, beginning of year
|
$
|
18,932
|
|
|
$
|
16,685
|
|
Service cost
|
111
|
|
|
103
|
|
||
Interest cost
|
744
|
|
|
781
|
|
||
Actuarial (gain) loss
|
(1,071
|
)
|
|
2,489
|
|
||
Benefits paid
|
(1,121
|
)
|
|
(1,126
|
)
|
||
Projected benefit obligation, end of year
|
$
|
17,595
|
|
|
$
|
18,932
|
|
Change in fair value of plan assets:
|
|
|
|
|
|
||
Fair value of plan assets, beginning of year
|
$
|
13,433
|
|
|
$
|
13,156
|
|
Return on plan assets
|
66
|
|
|
673
|
|
||
Employer contributions
|
407
|
|
|
730
|
|
||
Benefits paid
|
(1,121
|
)
|
|
(1,126
|
)
|
||
Fair value of plan assets, end of year
|
$
|
12,785
|
|
|
$
|
13,433
|
|
Funded status, end of year-net liability
|
$
|
(4,810
|
)
|
|
$
|
(5,499
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|||
Service cost
|
$
|
111
|
|
|
$
|
103
|
|
|
$
|
85
|
|
Interest cost
|
744
|
|
|
781
|
|
|
671
|
|
|||
Expected return on plan assets
|
(862
|
)
|
|
(932
|
)
|
|
(813
|
)
|
|||
Amortization of unrecognized net actuarial loss
|
512
|
|
|
281
|
|
|
518
|
|
|||
Total net periodic benefit cost
|
$
|
505
|
|
|
$
|
233
|
|
|
$
|
461
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Amounts recognized:
|
|
|
|
|
|
||
Funded status recognized in other non-current liabilities
|
$
|
(4,810
|
)
|
|
$
|
(5,499
|
)
|
Net actuarial loss recognized in accumulated other comprehensive loss
|
6,163
|
|
|
6,950
|
|
||
Net amount recognized in retained deficit
|
$
|
1,353
|
|
|
$
|
1,451
|
|
|
For the Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Benefit obligation assumptions:
|
|
|
|
|
|
|
|
|
Discount rate
|
4.38
|
%
|
|
4.03
|
%
|
|
4.80
|
%
|
Rate of compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Net periodic benefit cost assumptions:
|
|
|
|
|
|
|
|
|
Discount rate
|
4.03
|
%
|
|
4.80
|
%
|
|
3.75
|
%
|
Expected rate of return on plan assets
|
6.50
|
%
|
|
7.12
|
%
|
|
7.12
|
%
|
Rate of compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||
Equity securities
|
55
|
%
|
|
56
|
%
|
Debt securities
|
32
|
|
|
30
|
|
Other investments
|
13
|
|
|
14
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
December 31, 2015
|
||||||||||||||
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
United States equity securities
|
$
|
5,688
|
|
|
$
|
—
|
|
|
$
|
5,688
|
|
|
$
|
—
|
|
International equity securities
|
1,370
|
|
|
—
|
|
|
1,370
|
|
|
—
|
|
||||
Fixed income securities
|
4,026
|
|
|
—
|
|
|
4,026
|
|
|
—
|
|
||||
Other
|
1,701
|
|
|
—
|
|
|
1,701
|
|
|
—
|
|
||||
Total
|
$
|
12,785
|
|
|
$
|
—
|
|
|
$
|
12,785
|
|
|
$
|
—
|
|
|
December 31, 2014
|
||||||||||||||
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
United States equity securities
|
$
|
6,103
|
|
|
$
|
—
|
|
|
$
|
6,103
|
|
|
$
|
—
|
|
International equity securities
|
1,356
|
|
|
—
|
|
|
1,356
|
|
|
—
|
|
||||
Fixed income securities
|
4,034
|
|
|
—
|
|
|
4,034
|
|
|
—
|
|
||||
Other
|
1,940
|
|
|
—
|
|
|
1,940
|
|
|
—
|
|
||||
Total
|
$
|
13,433
|
|
|
$
|
—
|
|
|
$
|
13,433
|
|
|
$
|
—
|
|
2016
|
$
|
969
|
|
2017
|
962
|
|
|
2018
|
969
|
|
|
2019
|
991
|
|
|
2020
|
992
|
|
|
2021 - 2025
|
5,236
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
Federal tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State tax
|
34
|
|
|
20
|
|
|
240
|
|
|||
Foreign tax
|
(211
|
)
|
|
2,430
|
|
|
898
|
|
|||
Total
|
(177
|
)
|
|
2,450
|
|
|
1,138
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal and state tax
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign tax provision (benefit)
|
1,569
|
|
|
(1,569
|
)
|
|
—
|
|
|||
Total
|
1,569
|
|
|
(1,569
|
)
|
|
—
|
|
|||
Income tax expense
|
$
|
1,392
|
|
|
$
|
881
|
|
|
$
|
1,138
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
U.S. income (loss)
|
$
|
109,411
|
|
|
$
|
(461,250
|
)
|
|
$
|
(585,801
|
)
|
Foreign income (loss)
|
(35,697
|
)
|
|
(735
|
)
|
|
(4,177
|
)
|
|||
Total income (loss) before income taxes
|
$
|
73,714
|
|
|
$
|
(461,985
|
)
|
|
$
|
(589,978
|
)
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Federal and foreign net operating loss and credit carry-forwards
|
$
|
641,001
|
|
|
$
|
554,122
|
|
Property and equipment and other long-term assets
|
(32,698
|
)
|
|
102,179
|
|
||
Accruals and reserves
|
25,124
|
|
|
29,315
|
|
||
Deferred tax assets before valuation allowance
|
633,427
|
|
|
685,616
|
|
||
Valuation allowance
|
(633,427
|
)
|
|
(684,047
|
)
|
||
Net deferred income tax assets
|
$
|
—
|
|
|
$
|
1,569
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Provision at U.S. statutory rate of 35%
|
$
|
25,788
|
|
|
$
|
(161,702
|
)
|
|
$
|
(206,576
|
)
|
State income taxes, net of federal benefit
|
6,597
|
|
|
(27,656
|
)
|
|
(34,923
|
)
|
|||
Change in valuation allowance (excluding impact of foreign exchange rates)
|
(39,686
|
)
|
|
136,717
|
|
|
204,972
|
|
|||
Effect of foreign income tax at various rates
|
4,739
|
|
|
243
|
|
|
508
|
|
|||
Permanent differences
|
7,046
|
|
|
33,138
|
|
|
38,911
|
|
|||
Change in unrecognized tax benefit
|
712
|
|
|
(3,839
|
)
|
|
388
|
|
|||
Net change in permanent items due to provision to tax return
|
(3,099
|
)
|
|
21,008
|
|
|
—
|
|
|||
Other (including amounts related to prior year tax matters)
|
(705
|
)
|
|
2,972
|
|
|
(2,142
|
)
|
|||
Total
|
$
|
1,392
|
|
|
$
|
881
|
|
|
$
|
1,138
|
|
Gross unrecognized tax benefits at January 1, 2015
|
$
|
3,550
|
|
Gross decreases based on tax positions related to current year
|
280
|
|
|
Gross increases based on tax positions related to prior years
|
—
|
|
|
Gross unrecognized tax benefits at December 31, 2015
|
$
|
3,830
|
|
Gross unrecognized tax benefits at January 1, 2014
|
$
|
7,083
|
|
Gross decreases based on tax positions related to current year
|
(3,533
|
)
|
|
Gross increases based on tax positions related to prior years
|
—
|
|
|
Gross unrecognized tax benefits at December 31, 2014
|
$
|
3,550
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Service:
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
50,832
|
|
|
$
|
46,519
|
|
|
$
|
44,909
|
|
Canada
|
14,553
|
|
|
14,584
|
|
|
12,436
|
|
|||
Europe
|
5,738
|
|
|
5,536
|
|
|
4,085
|
|
|||
Central and South America
|
2,407
|
|
|
2,623
|
|
|
2,678
|
|
|||
Others
|
594
|
|
|
561
|
|
|
536
|
|
|||
Total service revenue
|
74,124
|
|
|
69,823
|
|
|
64,644
|
|
|||
Subscriber equipment:
|
|
|
|
|
|
|
|
|
|||
United States
|
7,823
|
|
|
10,931
|
|
|
11,284
|
|
|||
Canada
|
4,339
|
|
|
5,668
|
|
|
3,913
|
|
|||
Europe
|
1,710
|
|
|
2,123
|
|
|
1,708
|
|
|||
Central and South America
|
2,087
|
|
|
1,279
|
|
|
1,094
|
|
|||
Others
|
407
|
|
|
240
|
|
|
68
|
|
|||
Total subscriber equipment revenue
|
16,366
|
|
|
20,241
|
|
|
18,067
|
|
|||
Total revenue
|
$
|
90,490
|
|
|
$
|
90,064
|
|
|
$
|
82,711
|
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Long-lived assets:
|
|
|
|
|
|
||
United States
|
$
|
1,073,327
|
|
|
$
|
1,108,675
|
|
Canada
|
510
|
|
|
357
|
|
||
Europe
|
484
|
|
|
413
|
|
||
Central and South America
|
2,782
|
|
|
3,309
|
|
||
Other
|
457
|
|
|
806
|
|
||
Total long-lived assets
|
$
|
1,077,560
|
|
|
$
|
1,113,560
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income (loss)
|
$
|
72,322
|
|
|
$
|
(462,866
|
)
|
|
$
|
(591,116
|
)
|
Effect of dilutive securities:
|
|
|
|
|
|
||||||
8.00% Notes Issued in 2013
|
2,398
|
|
|
—
|
|
|
—
|
|
|||
Thermo Loan Agreement
|
8,903
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) to common stockholders plus assumed conversions
|
$
|
83,623
|
|
|
$
|
(462,866
|
)
|
|
$
|
(591,116
|
)
|
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic shares outstanding
|
1,020,149
|
|
|
934,356
|
|
|
614,959
|
|
|||
Incremental shares from assumed exercises of:
|
|
|
|
|
|
||||||
Stock options, restricted stock, restricted stock units and ESPP
|
8,559
|
|
|
—
|
|
|
—
|
|
|||
8.00% Notes Issued in 2013
|
27,853
|
|
|
—
|
|
|
—
|
|
|||
Thermo Loan Agreement
|
136,710
|
|
|
—
|
|
|
—
|
|
|||
Warrants
|
37,123
|
|
|
—
|
|
|
—
|
|
|||
Diluted shares outstanding
|
1,230,394
|
|
|
934,356
|
|
|
614,959
|
|
|||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.07
|
|
|
$
|
(0.50
|
)
|
|
$
|
(0.96
|
)
|
Diluted
|
$
|
0.07
|
|
|
$
|
(0.50
|
)
|
|
$
|
(0.96
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Risk-free interest rate
|
Less than 1 - 2%
|
|
|
Less than 1 - 2%
|
|
|
Less than 1 - 2%
|
|
|||
Expected term of options (years)
|
6
|
|
|
5
|
|
|
2 - 6
|
|
|||
Volatility
|
72%
|
|
|
72%
|
|
|
72 - 115%
|
|
|||
Weighted average grant-date fair value per share
|
$
|
1.43
|
|
|
$
|
1.67
|
|
|
$
|
0.70
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Intrinsic value of stock options exercised
|
$
|
492
|
|
|
$
|
5,083
|
|
|
$
|
2,263
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Total compensation expense
|
$
|
1.2
|
|
|
$
|
1.5
|
|
|
$
|
0.5
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Weighted average grant-date fair value
|
$
|
1.84
|
|
|
$
|
3.32
|
|
|
$
|
1.06
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Total compensation expense
|
$
|
1.4
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Risk-free interest rate
|
Less than 1.00%
|
|
|
Less than 1.00
|
%
|
||
Expected term (months)
|
6
|
|
|
6
|
|
||
Volatility
|
100%
|
|
|
100%
|
|
||
Weighted average grant-date fair value per share
|
$
|
1.07
|
|
|
$
|
1.24
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Accumulated minimum pension liability adjustment
|
$
|
(6,163
|
)
|
|
$
|
(6,950
|
)
|
Accumulated net foreign currency translation adjustment
|
1,330
|
|
|
4,052
|
|
||
Total accumulated other comprehensive loss
|
$
|
(4,833
|
)
|
|
$
|
(2,898
|
)
|
|
|
Quarter Ended
|
||||||||||||||
2015
|
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
||||||||
Total revenue
|
|
$
|
21,022
|
|
|
$
|
23,023
|
|
|
$
|
23,678
|
|
|
$
|
22,767
|
|
Loss from operations
|
|
$
|
(17,185
|
)
|
|
$
|
(17,417
|
)
|
|
$
|
(16,089
|
)
|
|
$
|
(15,913
|
)
|
Net income/(loss)
|
|
$
|
(129,727
|
)
|
|
$
|
204,767
|
|
|
$
|
24,098
|
|
|
$
|
(26,816
|
)
|
Basic income/(loss) per common share
|
|
$
|
(0.13
|
)
|
|
$
|
0.20
|
|
|
$
|
0.02
|
|
|
$
|
(0.03
|
)
|
Diluted income/(loss) per common share
|
|
$
|
(0.13
|
)
|
|
$
|
0.17
|
|
|
$
|
0.02
|
|
|
$
|
(0.03
|
)
|
Shares used in basic per share calculations
|
|
1,000,845
|
|
|
1,009,917
|
|
|
1,031,398
|
|
|
1,037,880
|
|
||||
Shares used in diluted per share calculations
|
|
1,000,845
|
|
|
1,205,450
|
|
|
1,234,551
|
|
|
1,037,880
|
|
|
|
Quarter Ended
|
||||||||||||||
2014
|
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
||||||||
Total revenue
|
|
$
|
20,536
|
|
|
$
|
23,994
|
|
|
$
|
23,441
|
|
|
$
|
22,093
|
|
Loss from operations
|
|
$
|
(20,575
|
)
|
|
$
|
(25,035
|
)
|
|
$
|
(18,093
|
)
|
|
$
|
(32,192
|
)
|
Net income/(loss)
|
|
$
|
(250,541
|
)
|
|
$
|
(433,730
|
)
|
|
$
|
129,390
|
|
|
$
|
92,015
|
|
Basic income/(loss) per common share
|
|
$
|
(0.29
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
0.13
|
|
|
$
|
0.09
|
|
Diluted income/(loss) per common share
|
|
$
|
(0.29
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
0.11
|
|
|
$
|
0.08
|
|
Shares used in basic per share calculations
|
|
849,321
|
|
|
904,994
|
|
|
987,668
|
|
|
993,427
|
|
||||
Shares used in diluted per share calculations
|
|
849,321
|
|
|
904,994
|
|
|
1,189,190
|
|
|
1,192,263
|
|
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated
|
||||||||||
|
(In Thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
3,530
|
|
|
$
|
719
|
|
|
$
|
3,227
|
|
|
$
|
—
|
|
|
$
|
7,476
|
|
Accounts receivable, net of allowance
|
4,521
|
|
|
5,215
|
|
|
4,461
|
|
|
339
|
|
|
14,536
|
|
|||||
Intercompany receivables
|
859,370
|
|
|
465,488
|
|
|
34,742
|
|
|
(1,359,600
|
)
|
|
—
|
|
|||||
Inventory
|
2,148
|
|
|
6,321
|
|
|
3,554
|
|
|
—
|
|
|
12,023
|
|
|||||
Prepaid expenses and other current assets
|
2,399
|
|
|
291
|
|
|
1,766
|
|
|
—
|
|
|
4,456
|
|
|||||
Total current assets
|
871,968
|
|
|
478,034
|
|
|
47,750
|
|
|
(1,359,261
|
)
|
|
38,491
|
|
|||||
Property and equipment, net
|
1,069,605
|
|
|
3,722
|
|
|
4,587
|
|
|
(354
|
)
|
|
1,077,560
|
|
|||||
Restricted cash
|
37,918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,918
|
|
|||||
Intercompany notes receivable
|
12,037
|
|
|
—
|
|
|
14,994
|
|
|
(27,031
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
(298,976
|
)
|
|
9,512
|
|
|
32,946
|
|
|
256,518
|
|
|
—
|
|
|||||
Deferred financing costs
|
57,906
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,906
|
|
|||||
Prepaid second-generation ground costs
|
8,929
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,929
|
|
|||||
Intangible and other assets, net
|
11,384
|
|
|
280
|
|
|
464
|
|
|
(11
|
)
|
|
12,117
|
|
|||||
Total assets
|
$
|
1,770,771
|
|
|
$
|
491,548
|
|
|
$
|
100,741
|
|
|
$
|
(1,130,139
|
)
|
|
$
|
1,232,921
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of long term debt
|
$
|
32,835
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,835
|
|
Accounts payable
|
4,867
|
|
|
2,439
|
|
|
1,387
|
|
|
—
|
|
|
8,693
|
|
|||||
Accrued contract termination charge
|
18,546
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,546
|
|
|||||
Accrued expenses
|
9,816
|
|
|
6,949
|
|
|
5,674
|
|
|
—
|
|
|
22,439
|
|
|||||
Intercompany payables
|
580,383
|
|
|
604,999
|
|
|
179,105
|
|
|
(1,364,487
|
)
|
|
—
|
|
|||||
Payable to affiliates
|
616
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
616
|
|
|||||
Deferred revenues
|
1,980
|
|
|
17,722
|
|
|
4,200
|
|
|
—
|
|
|
23,902
|
|
|||||
Total current liabilities
|
649,043
|
|
|
632,109
|
|
|
190,366
|
|
|
(1,364,487
|
)
|
|
107,031
|
|
|||||
Long-term debt, less current portion
|
606,192
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
606,192
|
|
|||||
Employee benefit obligations
|
4,810
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,810
|
|
|||||
Intercompany notes payable
|
5,564
|
|
|
—
|
|
|
13,970
|
|
|
(19,534
|
)
|
|
—
|
|
|||||
Derivative liabilities
|
239,642
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
239,642
|
|
|||||
Deferred revenue
|
6,027
|
|
|
386
|
|
|
—
|
|
|
—
|
|
|
6,413
|
|
|||||
Debt restructuring fees
|
20,795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,795
|
|
|||||
Other non-current liabilities
|
1,567
|
|
|
305
|
|
|
9,035
|
|
|
—
|
|
|
10,907
|
|
|||||
Total non-current liabilities
|
884,597
|
|
|
691
|
|
|
23,005
|
|
|
(19,534
|
)
|
|
888,759
|
|
|||||
Stockholders' equity
|
237,131
|
|
|
(141,252
|
)
|
|
(112,630
|
)
|
|
253,882
|
|
|
237,131
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
1,770,771
|
|
|
$
|
491,548
|
|
|
$
|
100,741
|
|
|
$
|
(1,130,139
|
)
|
|
$
|
1,232,921
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Elimination
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
3,166
|
|
|
$
|
672
|
|
|
$
|
3,283
|
|
|
$
|
—
|
|
|
$
|
7,121
|
|
Accounts receivable, net of allowance
|
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
|
|
|||||
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’ 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)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
76,746
|
|
|
$
|
2,591
|
|
|
$
|
19,939
|
|
|
$
|
(25,152
|
)
|
|
$
|
74,124
|
|
Subscriber equipment sales
|
808
|
|
|
12,093
|
|
|
8,444
|
|
|
(4,979
|
)
|
|
16,366
|
|
|||||
Total revenue
|
77,554
|
|
|
14,684
|
|
|
28,383
|
|
|
(30,131
|
)
|
|
90,490
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
12,642
|
|
|
11,106
|
|
|
11,872
|
|
|
(5,005
|
)
|
|
30,615
|
|
|||||
Cost of subscriber equipment sales
|
64
|
|
|
10,580
|
|
|
5,922
|
|
|
(4,752
|
)
|
|
11,814
|
|
|||||
Marketing, general and administrative
|
8,506
|
|
|
16,744
|
|
|
12,168
|
|
|
—
|
|
|
37,418
|
|
|||||
Depreciation, amortization, and accretion
|
75,313
|
|
|
1,203
|
|
|
21,219
|
|
|
(20,488
|
)
|
|
77,247
|
|
|||||
Total operating expenses
|
96,525
|
|
|
39,633
|
|
|
51,181
|
|
|
(30,245
|
)
|
|
157,094
|
|
|||||
Loss from operations
|
(18,971
|
)
|
|
(24,949
|
)
|
|
(22,798
|
)
|
|
114
|
|
|
(66,604
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(2,254
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,254
|
)
|
|||||
Loss on equity issuance
|
(6,663
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,663
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(35,301
|
)
|
|
(27
|
)
|
|
(536
|
)
|
|
10
|
|
|
(35,854
|
)
|
|||||
Derivative gain
|
181,860
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181,860
|
|
|||||
Equity in subsidiary earnings
|
(47,308
|
)
|
|
(13,132
|
)
|
|
—
|
|
|
60,440
|
|
|
—
|
|
|||||
Other
|
959
|
|
|
465
|
|
|
1,599
|
|
|
206
|
|
|
3,229
|
|
|||||
Total other income (expense)
|
91,293
|
|
|
(12,694
|
)
|
|
1,063
|
|
|
60,656
|
|
|
140,318
|
|
|||||
Income (loss) before income taxes
|
72,322
|
|
|
(37,643
|
)
|
|
(21,735
|
)
|
|
60,770
|
|
|
73,714
|
|
|||||
Income tax expense
|
—
|
|
|
34
|
|
|
1,358
|
|
|
—
|
|
|
1,392
|
|
|||||
Net income (loss)
|
$
|
72,322
|
|
|
$
|
(37,677
|
)
|
|
$
|
(23,093
|
)
|
|
$
|
60,770
|
|
|
$
|
72,322
|
|
Defined benefit pension plan liability adjustment
|
787
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
787
|
|
|||||
Net foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
(2,742
|
)
|
|
20
|
|
|
(2,722
|
)
|
|||||
Total comprehensive income (loss)
|
$
|
73,109
|
|
|
$
|
(37,677
|
)
|
|
$
|
(25,835
|
)
|
|
$
|
60,790
|
|
|
$
|
70,387
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
75,590
|
|
|
$
|
5,069
|
|
|
$
|
22,252
|
|
|
$
|
(33,088
|
)
|
|
$
|
69,823
|
|
Subscriber equipment sales
|
434
|
|
|
14,568
|
|
|
11,212
|
|
|
(5,973
|
)
|
|
20,241
|
|
|||||
Total revenue
|
76,024
|
|
|
19,637
|
|
|
33,464
|
|
|
(39,061
|
)
|
|
90,064
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
11,320
|
|
|
9,586
|
|
|
9,401
|
|
|
(639
|
)
|
|
29,668
|
|
|||||
Cost of subscriber equipment sales
|
2,220
|
|
|
9,492
|
|
|
11,861
|
|
|
(8,716
|
)
|
|
14,857
|
|
|||||
Cost of subscriber equipment sales - reduction in the value of inventory
|
7,362
|
|
|
6,776
|
|
|
7,546
|
|
|
—
|
|
|
21,684
|
|
|||||
Marketing, general and administrative
|
7,171
|
|
|
16,253
|
|
|
14,947
|
|
|
(4,851
|
)
|
|
33,520
|
|
|||||
Reduction in the value of long-lived assets
|
44
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|||||
Depreciation, amortization, and accretion
|
76,656
|
|
|
10,176
|
|
|
25,270
|
|
|
(25,956
|
)
|
|
86,146
|
|
|||||
Total operating expenses
|
104,773
|
|
|
52,323
|
|
|
69,025
|
|
|
(40,162
|
)
|
|
185,959
|
|
|||||
Loss from operations
|
(28,749
|
)
|
|
(32,686
|
)
|
|
(35,561
|
)
|
|
1,101
|
|
|
(95,895
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(39,846
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,846
|
)
|
|||||
Loss on equity issuance
|
(748
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(748
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(42,636
|
)
|
|
(34
|
)
|
|
(563
|
)
|
|
—
|
|
|
(43,233
|
)
|
|||||
Derivative loss
|
(286,049
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(286,049
|
)
|
|||||
Equity in subsidiary earnings
|
(67,150
|
)
|
|
(4,734
|
)
|
|
—
|
|
|
71,884
|
|
|
—
|
|
|||||
Other
|
2,312
|
|
|
593
|
|
|
1,411
|
|
|
(530
|
)
|
|
3,786
|
|
|||||
Total other income (expense)
|
(434,117
|
)
|
|
(4,175
|
)
|
|
848
|
|
|
71,354
|
|
|
(366,090
|
)
|
|||||
Loss before income taxes
|
(462,866
|
)
|
|
(36,861
|
)
|
|
(34,713
|
)
|
|
72,455
|
|
|
(461,985
|
)
|
|||||
Income tax expense
|
—
|
|
|
20
|
|
|
861
|
|
|
—
|
|
|
881
|
|
|||||
Net loss
|
$
|
(462,866
|
)
|
|
$
|
(36,881
|
)
|
|
$
|
(35,574
|
)
|
|
$
|
72,455
|
|
|
$
|
(462,866
|
)
|
Defined benefit pension plan liability adjustment
|
(2,467
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,467
|
)
|
|||||
Net foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
(1,320
|
)
|
|
18
|
|
|
(1,302
|
)
|
|||||
Total comprehensive loss
|
$
|
(465,333
|
)
|
|
$
|
(36,881
|
)
|
|
$
|
(36,894
|
)
|
|
$
|
72,473
|
|
|
$
|
(466,635
|
)
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
69,250
|
|
|
$
|
10,695
|
|
|
$
|
18,536
|
|
|
$
|
(33,837
|
)
|
|
$
|
64,644
|
|
Subscriber equipment sales
|
87
|
|
|
13,704
|
|
|
15,452
|
|
|
(11,176
|
)
|
|
18,067
|
|
|||||
Total revenue
|
69,337
|
|
|
24,399
|
|
|
33,988
|
|
|
(45,013
|
)
|
|
82,711
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
10,498
|
|
|
10,559
|
|
|
9,062
|
|
|
91
|
|
|
30,210
|
|
|||||
Cost of subscriber equipment sales
|
—
|
|
|
10,860
|
|
|
16,319
|
|
|
(13,556
|
)
|
|
13,623
|
|
|||||
Cost of subscriber equipment sales - reduction in the value of inventory
|
—
|
|
|
1,300
|
|
|
4,494
|
|
|
—
|
|
|
5,794
|
|
|||||
Marketing, general and administrative
|
5,929
|
|
|
15,109
|
|
|
13,620
|
|
|
(4,770
|
)
|
|
29,888
|
|
|||||
Depreciation, amortization, and accretion
|
72,456
|
|
|
21,286
|
|
|
24,103
|
|
|
(27,253
|
)
|
|
90,592
|
|
|||||
Total operating expenses
|
88,883
|
|
|
59,114
|
|
|
67,598
|
|
|
(45,488
|
)
|
|
170,107
|
|
|||||
Loss from operations
|
(19,546
|
)
|
|
(34,715
|
)
|
|
(33,610
|
)
|
|
475
|
|
|
(87,396
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(109,092
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109,092
|
)
|
|||||
Loss on equity issuance
|
(17,709
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,709
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(66,688
|
)
|
|
(42
|
)
|
|
(1,096
|
)
|
|
(2
|
)
|
|
(67,828
|
)
|
|||||
Derivative loss
|
(305,999
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(305,999
|
)
|
|||||
Equity in subsidiary earnings
|
(69,790
|
)
|
|
(7,242
|
)
|
|
—
|
|
|
77,032
|
|
|
—
|
|
|||||
Other
|
(2,089
|
)
|
|
(257
|
)
|
|
209
|
|
|
183
|
|
|
(1,954
|
)
|
|||||
Total other income (expense)
|
(571,367
|
)
|
|
(7,541
|
)
|
|
(887
|
)
|
|
77,213
|
|
|
(502,582
|
)
|
|||||
Loss before income taxes
|
(590,913
|
)
|
|
(42,256
|
)
|
|
(34,497
|
)
|
|
77,688
|
|
|
(589,978
|
)
|
|||||
Income tax expense
|
203
|
|
|
37
|
|
|
898
|
|
|
—
|
|
|
1,138
|
|
|||||
Net loss
|
$
|
(591,116
|
)
|
|
$
|
(42,293
|
)
|
|
$
|
(35,395
|
)
|
|
$
|
77,688
|
|
|
$
|
(591,116
|
)
|
Defined benefit pension plan liability adjustment
|
3,485
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,485
|
|
|||||
Net foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
(888
|
)
|
|
32
|
|
|
(856
|
)
|
|||||
Total comprehensive loss
|
$
|
(587,631
|
)
|
|
$
|
(42,293
|
)
|
|
$
|
(36,283
|
)
|
|
$
|
77,720
|
|
|
$
|
(588,487
|
)
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net cash provided by operating activities
|
$
|
(2,349
|
)
|
|
$
|
1,767
|
|
|
$
|
2,744
|
|
|
$
|
—
|
|
|
$
|
2,162
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Second-generation satellites, ground and related launch costs (including interest)
|
(25,195
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,195
|
)
|
|||||
Property and equipment additions
|
(2,608
|
)
|
|
(1,720
|
)
|
|
(1,195
|
)
|
|
—
|
|
|
(5,523
|
)
|
|||||
Purchase of intangible assets
|
(2,520
|
)
|
|
|
|
|
|
|
|
(2,520
|
)
|
||||||||
Investment in businesses
|
(240
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
|||||
Net cash used in investing activities
|
(30,563
|
)
|
|
(1,720
|
)
|
|
(1,195
|
)
|
|
—
|
|
|
(33,478
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows provided by financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of stock to Terrapin
|
39,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,000
|
|
|||||
Proceeds from issuance of common stock and exercise of warrants
|
726
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
726
|
|
|||||
Principal payments of the Facility Agreement
|
(6,450
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,450
|
)
|
|||||
Net cash provided by financing activities
|
33,276
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,276
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(1,605
|
)
|
|
—
|
|
|
(1,605
|
)
|
|||||
Net decrease in cash and cash equivalents
|
364
|
|
|
47
|
|
|
(56
|
)
|
|
—
|
|
|
355
|
|
|||||
Cash and cash equivalents at beginning of period
|
3,166
|
|
|
672
|
|
|
3,283
|
|
|
—
|
|
|
7,121
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
3,530
|
|
|
$
|
719
|
|
|
$
|
3,227
|
|
|
$
|
—
|
|
|
$
|
7,476
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net cash provided by operating activities
|
$
|
2,770
|
|
|
$
|
983
|
|
|
$
|
228
|
|
|
$
|
—
|
|
|
$
|
3,981
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Second-generation satellites, ground and related launch costs (including interest)
|
(14,604
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,604
|
)
|
|||||
Property and equipment additions
|
(1,876
|
)
|
|
(987
|
)
|
|
(414
|
)
|
|
—
|
|
|
(3,277
|
)
|
|||||
Purchase of intangible assets
|
(1,396
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,396
|
)
|
|||||
Net cash used in investing activities
|
(17,876
|
)
|
|
(987
|
)
|
|
(414
|
)
|
|
—
|
|
|
(19,277
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows provided by financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of common stock and exercise of warrants
|
9,547
|
|
|
|
|
|
|
—
|
|
|
9,547
|
|
|||||||
Borrowings from Facility Agreement
|
(4,046
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,046
|
)
|
|||||
Payment of deferred financing costs
|
(164
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(164
|
)
|
|||||
Net cash provided by financing activities
|
5,337
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,337
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(328
|
)
|
|
—
|
|
|
(328
|
)
|
|||||
Net decrease in cash and cash equivalents
|
(9,769
|
)
|
|
(4
|
)
|
|
(514
|
)
|
|
—
|
|
|
(10,287
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
12,935
|
|
|
676
|
|
|
3,797
|
|
|
—
|
|
|
17,408
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
3,166
|
|
|
$
|
672
|
|
|
$
|
3,283
|
|
|
$
|
—
|
|
|
$
|
7,121
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(10,789
|
)
|
|
$
|
1,524
|
|
|
$
|
2,803
|
|
|
$
|
—
|
|
|
$
|
(6,462
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Second-generation satellites, ground and related launch costs (including interest)
|
(43,693
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,693
|
)
|
|||||
Property and equipment additions
|
—
|
|
|
(1,099
|
)
|
|
(552
|
)
|
|
—
|
|
|
(1,651
|
)
|
|||||
Investment in businesses
|
(634
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(634
|
)
|
|||||
Restricted cash
|
8,859
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,859
|
|
|||||
Net cash used in investing activities
|
(35,468
|
)
|
|
(1,099
|
)
|
|
(552
|
)
|
|
—
|
|
|
(37,119
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows provided by financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Payments to reduce principal amount of exchanged 5.75% Notes
|
(13,544
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,544
|
)
|
|||||
Payments for 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
|
65,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,000
|
|
|||||
Proceeds from issuance of stock to Terrapin
|
6,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,000
|
|
|||||
Proceeds from issuance of common stock and exercise of warrants
|
15,414
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,414
|
|
|||||
Borrowings from Facility Agreement
|
672
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
672
|
|
|||||
Proceeds from contingent equity agreement
|
1,071
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,071
|
|
|||||
Payment of deferred financing costs
|
(16,909
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,909
|
)
|
|||||
Net cash provided by financing activities
|
48,972
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,972
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
225
|
|
|
—
|
|
|
225
|
|
|||||
Net increase in cash and cash equivalents
|
2,715
|
|
|
425
|
|
|
2,476
|
|
|
—
|
|
|
5,616
|
|
|||||
Cash and cash equivalents at beginning of period
|
10,220
|
|
|
251
|
|
|
1,321
|
|
|
—
|
|
|
11,792
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
12,935
|
|
|
$
|
676
|
|
|
$
|
3,797
|
|
|
$
|
—
|
|
|
$
|
17,408
|
|
(a)
|
Evaluation of disclosure controls and procedures
|
(b)
|
Changes in internal control over financial reporting
|
Report of Independent Registered Public Accounting Firm
|
Consolidated balance sheets at December 31, 2015 and 2014
|
Consolidated statements of operations for the years ended December 31, 2015, 2014, and 2013
|
Consolidated statements of comprehensive income (loss) for the years ended December 31, 2015, 2014, and 2013
|
Consolidated statements of stockholders’ equity for the years ended December 31, 2015, 2014, and 2013
|
Consolidated statements of cash flows for the years ended December 31, 2015, 2014, and 2013
|
Notes to Consolidated Financial Statements
|
|
|
|
GLOBALSTAR, INC.
|
|
|
|
|
|
|
By:
|
/s/ James Monroe III
|
Date:
|
February 25, 2016
|
|
James Monroe III
|
|
|
|
Chief Executive Officer
|
|
Signature
|
|
Title
|
|
|
|
|
|
/s/ James Monroe III
|
|
Chief Executive Officer and Chairman of the Board
|
|
James Monroe III
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Rebecca S. Clary
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
Rebecca S. Clary
|
|
|
|
|
|
|
|
/s/ William A. Hasler
|
|
|
|
William A. Hasler
|
|
Director
|
|
|
|
|
|
/s/ James F. Lynch
|
|
|
|
James F. Lynch
|
|
Director
|
|
|
|
|
|
/s/ John Kneuer
|
|
|
|
John Kneuer
|
|
Director
|
|
|
|
|
|
/s/ J. Patrick McIntyre
|
|
|
|
J. Patrick McIntyre
|
|
Director
|
|
|
|
|
|
/s/ Kenneth M. Young
|
|
|
|
Kenneth M. Young
|
|
Director
|
|
|
|
|
|
/s/ Richard S. Roberts
|
|
|
|
Richard S. Roberts
|
|
Director
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1*
|
|
Amended and Restated Certificate of Incorporation of Globalstar, Inc. (Exhibit 3.1 to Form 8-K filed September 29, 2009)
|
|
|
|
3.2*
|
|
Amended and Restated Bylaws of Globalstar, Inc. (Exhibit 3.2 to Form 10-Q filed December 18, 2006)
|
|
|
|
4.1*
|
|
Indenture between Globalstar, Inc. and U.S. Bank, National Association as Trustee dated as of April 15, 2008 (Exhibit 4.1 to Form 8-K filed April 16, 2008)
|
|
|
|
4.2*
|
|
Second Supplemental Indenture between Globalstar, Inc. and U.S. Bank, National Association as Trustee dated as of June 19, 2009 (Exhibit 4.1 to Form 8-K filed June 19, 2009)
|
|
|
|
4.3*
|
|
Form of 8.00% Senior Unsecured Convertible Note (Exhibit 4.2 to Form 8-K filed June 17, 2009)
|
|
|
|
4.4*
|
|
Form of Warrant issued June 19, 2009 (Exhibit 4.1 to Form 8-K filed June 17, 2009)
|
|
|
|
4.5*
|
|
Form of Warrant for issuance to Thermo Funding Company LLC pursuant to the Contingent Equity Agreement dated as of June 19, 2009 (Exhibit 4.1 to Form 10-Q filed August 10, 2009)
|
|
|
|
4.6*
|
|
Form of Warrant for issuance to Thermo Funding Company LLC pursuant to the Loan Agreement dated as of June 25, 2009 (Exhibit 4.2 to Form 10-Q filed August 10, 2009)
|
|
|
|
4.7*
|
|
Form of Amendment to Warrant to Purchase Common Stock (Exhibit 4.1 to Current Report on Form 8-K filed June 4, 2010)
|
|
|
|
4.8*
|
|
Fourth Supplemental Indenture between Globalstar, Inc. and U.S. Bank, National Association as Trustee dated as of May 20, 2013, including Form of Global 8% Convertible Senior Note due 2028 (Exhibit 4.1 to Form 8-K filed May 20, 2013)
|
|
|
|
10.1*†
|
|
Contract between Globalstar, Inc. and Hughes Network Systems LLC dated May 1, 2008 (Exhibit 10.1 to Form 10-Q filed August 11, 2008)
|
|
|
|
10.2*
|
|
Amendment No.2 to Contract between Globalstar, Inc. and Hughes Network Systems LLC effective as of August 28, 2009 (Amendment No. 1 Superseded.) (Exhibit 10.2 to Form 10-Q filed November 6, 2009)
|
|
|
|
10.3*
|
|
Amendment No.3 to Contract between Globalstar, Inc. and Hughes Network Systems LLC effective as of September 21, 2009 (Exhibit 10.3 to Form 10-Q filed November 6, 2009)
|
|
|
|
10.4*†
|
|
Amendment No.4 to Contract between Globalstar, Inc. and Hughes Network Systems LLC dated as of March 24, 2010 (Exhibit 10.2 to Form 10-Q filed May 7, 2010)
|
|
|
|
10.5* †
|
|
Amendment No.5 to Contract between Globalstar, Inc. and Hughes Network Systems LLC dated as of April 5, 2011 (Exhibit 10.24 to Form 10-K filed March 13, 2012)
|
|
|
|
10.6* †
|
|
Amendment No.6 to Contract between Globalstar, Inc. and Hughes Network Systems LLC dated as of November 4, 2011 (Exhibit 10.25 to Form 10-K/A filed June 25, 2012)
|
|
|
|
10.7 *†
|
|
Amendment No. 7 to Contract between Globalstar and Hughes Network Systems LLC dated as of February 1, 2012 (Exhibit 10.1 to Form 10-Q filed May 10, 2012)
|
|
|
|
10.8*†
|
|
Letter Agreement dated March 30, 2012 between Globalstar, Inc. and Hughes Network Systems, LLC
(Exhibit 10.2 to Form 10-Q filed May 10, 2012) |
|
|
|
10.9*†
|
|
Letter Agreement dated June 26, 2012 between Globalstar, Inc. and Hughes Network Systems, LLC
(Exhibit 10.1 to Form 10-Q filed August 9, 2012) |
|
|
|
10.10*†
|
|
Letter Agreement by and between Globalstar, Inc. and Hughes Network Systems, LLC dated September 27, 2012 (Exhibit 10.2 to Form 10-Q filed November 14, 2012)
|
|
|
|
10.11*†
|
|
Letter Agreement by and between Globalstar, Inc. and Hughes Network Systems, LLC dated December 20, 2012 (Exhibit 10.30 to Form 10-K filed March 15, 2013)
|
|
|
|
10.12*†
|
|
Amendment No. 9 to Contract between Globalstar and Hughes Network Systems LLC dated as of January 18, 2013 (Exhibit 10.1 to Form 10-Q filed May 10, 2013)
|
|
|
|
10.13*†
|
|
Letter Agreement by and between Globalstar, Inc. and Hughes Network Systems, LLC dated March 26, 2013 (Exhibit 10.4 to Form 10-Q filed May 10, 2013)
|
|
|
|
10.14*†
|
|
Letter Agreement by and between Globalstar, Inc. and Hughes Network Systems, LLC dated June 28, 2013 (Exhibit 10.2 to Form 10-Q filed August 14, 2013)
|
|
|
|
10.15*
|
|
Letter Agreement by and between Globalstar, Inc. and Hughes Network Systems, LLC dated August 7, 2013 (Exhibit 10.8 to Form 10-Q filed November 14, 2013)
|
|
|
|
10.16*†
|
|
Amendment No. 10 to Contract between Globalstar and Hughes Network Systems LLC dated as of August 7, 2013 (Exhibit 10.9 to Form 10-Q filed November 14, 2013)
|
|
|
|
10.17*
|
|
Amendment No. 11 to Contract between Globalstar and Hughes Network Systems LLC dated as of December 17, 2013 (Exhibit 10.37 to Form 10-K filed March 11, 2014)
|
|
|
|
10.18*†
|
|
Letter Agreement by and between Globalstar, Inc. and Hughes Network Systems, LLC dated as of May 30, 2014 (Exhibit 10.1 to Form 10-Q filed August 11, 2014)
|
|
|
|
10.19*
|
|
Letter Agreement regarding equity payment by and between Globalstar, Inc. and Hughes Network Systems, LLC dated as of May 30, 2014 (Exhibit 10.2 to Form 10-Q filed August 11, 2014)
|
|
|
|
10.20*†
|
|
Amendment No.12 to Contract between Globalstar, Inc. and Hughes Network Systems LLC dated as of October 16, 2014 (Exhibit 10.2 to Form 10-Q filed November 6, 2014)
|
|
|
|
10.21*†
|
|
Amendment No.13 to Contract between Globalstar, Inc. and Hughes Network Systems LLC dated as of July 16, 2015 (Exhibit 10.1 to Form 10-Q filed August 10, 2015)
|
|
|
|
10.22†
|
|
Amendment to Letter Agreement regarding equity payment by and between Globalstar, Inc. and Hughes Network Systems, LLC dated as of December 3, 2015
|
|
|
|
10.23*†
|
|
Purchase Agreement by and between Globalstar, Inc. and Ericsson Inc. dated October 1, 2008 (Exhibit 10.1 to Form 10-Q filed November 10, 2008)
|
|
|
|
10.24*†
|
|
Amendment No. 1 to Purchase Agreement by and between Globalstar, Inc. and Ericsson Inc. dated April 2, 2015 (Exhibit 10.1 to Form 10-Q filed May 8, 2015)
|
|
|
|
10.25*†
|
|
Amendment No.1 to Purchase Agreement by and between Globalstar, Inc. and Ericsson Inc. dated as of December 1, 2008 (Exhibit 10.28 to Form 10-K filed March 12, 2010)
|
|
|
|
10.26* †
|
|
Amendment No.2 to Purchase Agreement by and between Globalstar, Inc. and Ericsson Inc. dated as of March 30, 2010 (Exhibit 10.3 to Form 10-Q filed May 7, 2010)
|
|
|
|
10.27* †
|
|
Amendment No.3 to Purchase Agreement by and between Globalstar, Inc. and Ericsson Inc. dated as of December 10, 2010 (Exhibit 10.30 to Form 10-K filed March 31, 2011)
|
|
|
|
10.28*†
|
|
Amendment No.4 to Purchase Agreement by and between Globalstar, Inc. and Ericsson Inc. dated as of October 31, 2011 (Exhibit 10.30 to Form 10-K filed March 13, 2012)
|
|
|
|
10.29*†
|
|
Amendment No.5 to Purchase Agreement by and between Globalstar, Inc. and Ericsson Inc. dated as of December 20, 2011 (Exhibit 10.31 to Form 10-K filed March 13, 2012)
|
|
|
|
10.30*†
|
|
Letter Agreement by and between Globalstar, Inc. and Ericsson, Inc. dated as of March 8, 2012 (Exhibit 10.3 to Form 10-Q filed May 10, 2012)
|
|
|
|
10.31*†
|
|
Letter Agreement by and between Globalstar, Inc. and Ericsson, Inc. dated as of July 23, 2012 (Exhibit 10.2 to Form 10-Q filed August 9, 2012)
|
|
|
|
10.32*†
|
|
Letter Agreement by and between Globalstar, Inc. and Ericsson, Inc. dated as of January 30, 2013 (Exhibit 10.3 to Form 10-Q filed May 10, 2013)
|
|
|
|
10.33*†
|
|
Letter Agreement by and between Globalstar, Inc. and Ericsson, Inc. dated as of June 20, 2013 (Exhibit 10.1 to Form 10-Q filed August 14, 2013)
|
|
|
|
10.34*†
|
|
Letter Agreement by and between Globalstar, Inc. and Ericsson, Inc. dated as of September 1, 2013 (Exhibit 10.7 to Form 10-Q filed November 14, 2013)
|
|
|
|
10.35*†
|
|
Purchase Agreement by and between Globalstar, Inc. and Ericsson Inc. effective as of July 22, 2014 (Exhibit 10.1 to Form 10-Q filed November 4, 2014)
|
|
|
|
10.36*†
|
|
Amendment No.1 to Contract between Globalstar, Inc. and Ericsson Inc. effective as of April 2, 2015 (Exhibit 10.1 to Form 10-Q filed May 8, 2015)
|
|
|
|
10.37*†
|
|
Amendment No. 2 to Contract between Globalstar, Inc. and Ericsson Inc. effective as of August 11, 2015 (Exhibit 10.1 to Form 10-Q filed November 5, 2015)
|
|
|
|
10.38*
|
|
Amended and Restated Loan Agreement between Globalstar, Inc., and Thermo Funding Company LLC dated as of July 31, 2013 (Exhibit 10.4 to Form 8-K filed August 22, 2013)
|
|
|
|
10.39*
|
|
Second Global Amendment and Restatement Agreement dated as of August 7, 2015 between Globalstar, Inc., Thermo Funding Company LLC, BNP Paribas and the other lenders thereto (Exhibit 10.2 to Form 10-Q filed August 10, 2015)
|
|
|
|
10.40*
|
|
Second Amended and Restated Facility Agreement dated as of August 7, 2015 between Globalstar, Inc., BNP Paribas and the other lenders thereto (Exhibit 10.3 to Form 10-Q filed August 10, 2015)
|
|
|
|
10.41*
|
|
Common Stock Purchase Agreement, dated as of August 7, 2015, by and between Globalstar, Inc. and Terrapin Opportunity, L.P. (Exhibit 10.1 to Form 8-K filed August 10, 2015)
|
|
|
|
10.42*
|
|
Amendment No.1 to Common Stock Purchase Agreement by and between Globalstar, Inc. and Terrapin Opportunity, L.P. (Exhibit 10.1 to Form 8-K filed February 25, 2016)
|
|
|
|
10.43*
|
|
Engagement Letter, dated as of August 7, 2015, by and between Globalstar, Inc. and Financial West Group (Exhibit 10.2 to Form 8-K filed August 10, 2015)
|
|
|
|
10.44*
|
|
Assignment and Assumption Agreement by and among Financial West Group, Merriman Capital, L.P. and Globalstar, Inc. (Exhibit 10.2 to Form 8-K filed February 25, 2016)
|
|
|
|
10.45*
|
|
2015 Equity Commitment and Loan Agreement with Thermo Funding II LLC dated August 7, 2015 (Exhibit 10.2 to Form 10-Q filed November 5, 2015)
|
|
|
|
Ref:
|
Contract Number GINC-C-08-0390 (“Contract”) between Globalstar, Inc. (“Globalstar”) and Hughes Network Systems, LLC (“Hughes”), as amended;
|
•
|
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.
|
Stock Program:
|
Not less than 30,000 RSA shares to be granted annually and will vest in thirds on 12/15 of each year, details below
|
|
Accept Offer
|
|
/s/ David Kagan
|
|
1/11/16
|
|
|
x
|
|
Signed
|
|
Date
|
|
|
Anticipated Start Date:
|
1/13/16
|
|
|
||
|
Decline Offer
|
|
|
|
|
|
|
|
|
Signed
|
|
Date
|
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
|
2015 (Unaudited)
|
2014
|
2013
|
2012
|
2011
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|||||||||||
|
Pre-tax income (loss) from continuing operations
|
|
$
|
73,714
|
|
$
|
(461,985
|
)
|
$
|
(589,978
|
)
|
$
|
(111,785
|
)
|
$
|
(55,033
|
)
|
|
Fixed charges
|
|
46,122
|
|
51,301
|
|
85,046
|
|
61,802
|
|
59,171
|
|
|||||
|
Amortization of capitalized interest
|
|
14,965
|
|
16,643
|
|
17,580
|
|
11,135
|
|
8,265
|
|
|||||
|
Income tax expense (benefit)
|
|
1,392
|
|
881
|
|
1,138
|
|
413
|
|
(109
|
)
|
|||||
|
Loss in equity investee
|
|
—
|
|
—
|
|
634
|
|
335
|
|
420
|
|
|||||
|
Less: interest capitalized
|
|
(10,140
|
)
|
(7,945
|
)
|
(17,097
|
)
|
(40,116
|
)
|
(54,139
|
)
|
|||||
|
|
|
|
|
|
|
|
||||||||||
Total earnings
|
|
$
|
126,053
|
|
$
|
(401,105
|
)
|
$
|
(502,677
|
)
|
$
|
(78,216
|
)
|
$
|
(41,425
|
)
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|||||||||||
|
Interest expensed
|
|
$
|
35,854
|
|
$
|
43,233
|
|
$
|
67,828
|
|
$
|
21,506
|
|
$
|
4,824
|
|
|
Estimated interest component of rental expense
(1)
|
|
128
|
|
123
|
|
122
|
|
180
|
|
208
|
|
|||||
|
Interest capitalized
|
|
10,140
|
|
7,945
|
|
17,097
|
|
40,116
|
|
54,139
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||
Total Fixed Charges
|
|
$
|
46,122
|
|
$
|
51,301
|
|
$
|
85,047
|
|
$
|
61,802
|
|
$
|
59,171
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
|
2.73
|
|
*
|
|
*
|
|
*
|
|
*
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||
Excess of fixed charges over earnings
|
|
$
|
—
|
|
$
|
452,406
|
|
$
|
587,724
|
|
$
|
140,018
|
|
$
|
100,596
|
|
Subsidiary
|
|
Organized Under Laws of
|
|
% of Voting Securities Owned by Immediate Parent
|
GSSI, LLC
|
|
Delaware
|
|
100%
|
ATSS Canada, Inc.
|
|
Delaware
|
|
100%
|
Globalstar Brazil Holdings, L.P.
|
|
Delaware
|
|
100%
|
Globalstar do Brasil Holdings Ltda.
|
|
Brazil
|
|
100%
|
Globalstar do Brazil, S.A.
|
|
Brazil
|
|
100%
|
Globalstar Japan K.K.
|
|
Japan
|
|
100%
|
Globalstar Satellite Services Pte., Ltd
|
|
Singapore
|
|
100%
|
Globalstar Satellite Services Pty., Ltd
|
|
South Africa
|
|
100%
|
Globalstar C, LLC
|
|
Delaware
|
|
100%
|
Mobile Satellite Services B.V.
|
|
Netherlands
|
|
100%
|
Globalstar Europe, S.A.S.
|
|
France
|
|
100%
|
Globalstar Europe Satellite Services, Ltd.
|
|
Ireland
|
|
100%
|
Globalstar Leasing LLC
|
|
Delaware
|
|
100%
|
Globalstar Licensee LLC
|
|
Delaware
|
|
100%
|
Globalstar Security Services, LLC
|
|
Delaware
|
|
100%
|
Globalstar USA, LLC
|
|
Delaware
|
|
100%
|
GUSA Licensee LLC
|
|
Delaware
|
|
100%
|
Globalstar Canada Satellite Co.
|
|
Nova Scotia, Canada
|
|
100%
|
Globalstar de Venezuela, C.A.
|
|
Venezuela
|
|
100%
|
Globalstar Colombia, Ltda.
|
|
Colombia
|
|
100%
|
Globalstar Caribbean Ltd.
|
|
Cayman Islands
|
|
100%
|
GCL Licensee LLC
|
|
Delaware
|
|
100%
|
Globalstar Americas Acquisitions, Ltd.
|
|
British Virgin Islands
|
|
100%
|
Globalstar Americas Holding Ltd.
|
|
British Virgin Islands
|
|
100%
|
Globalstar Gateway Company S.A.
|
|
Nicaragua
|
|
100%
|
Globalstar Americas Telecommunications Ltd.
|
|
British Virgin Islands
|
|
100%
|
Globalstar Honduras S.A.
|
|
Honduras
|
|
100%
|
Globalstar Nicaragua S.A.
|
|
Nicaragua
|
|
100%
|
Globalstar de El Salvador, SA de CV
|
|
El Salvador
|
|
100%
|
Globalstar Panama, Corp.
|
|
Panama
|
|
100%
|
Globalstar Guatemala S.A.
|
|
Guatemala
|
|
100%
|
Globalstar Belize Ltd.
|
|
Belize
|
|
100%
|
Astral Technologies Investment Ltd.
|
|
British Virgin Islands
|
|
100%
|
Astral Technologies Nicaragua S.A.
|
|
British Virgin Islands
|
|
100%
|
SPOT LLC
|
|
Colorado
|
|
100%
|
Globalstar Asia Pacific
|
|
Korea
|
|
49%
|
Globalstar Media, L.L.C.
|
|
Louisiana
|
|
100%
|
Globalstar Broadband Services, Inc.
|
|
Delaware
|
|
100%
|
The World’s End (Pty) Ltd.
|
|
Botswana
|
|
74%
|
Globaltouch West Africa Limited
|
|
Nigeria
|
|
30%
|
I, James Monroe III, certify that:
|
||
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Globalstar, Inc.;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
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 (or persons performing the equivalent functions):
|
|
|
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 25, 2016
|
|
|
|
|
By:
|
/s/ James Monroe III
|
|
|
James Monroe III
Chief Executive Officer (Principal Executive Officer)
|
|
I, Rebecca S. Clary, certify that:
|
||
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Globalstar, Inc.;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
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 (or persons performing the equivalent functions):
|
|
|
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 25, 2016
|
|
|
|
|
By:
|
/s/ Rebecca S. Clary
|
|
|
Rebecca S. Clary
Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
February 25, 2016
|
By:
|
/s/ James Monroe III
|
|
|
James Monroe III
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
February 25, 2016
|
By:
|
/s/ Rebecca S. Clary
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Rebecca S. Clary
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Chief Financial Officer (Principal Financial Officer)
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