x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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41-2116508
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(State or Other Jurisdiction of
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(I.R.S. Employer Identification No.)
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Incorporation or Organization)
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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PART I - F
INANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II - O
THER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Exhibits
.
|
|
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
2016 |
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June 30,
2015 |
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June 30,
2016 |
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June 30,
2015 |
||||||||
Revenue:
|
|
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|
|
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||||||
Service revenues
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$
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20,970
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|
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$
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18,616
|
|
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$
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39,719
|
|
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$
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35,723
|
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Subscriber equipment sales
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4,116
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4,407
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|
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7,203
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8,322
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||||
Total revenue
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25,086
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23,023
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46,922
|
|
|
44,045
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||||
Operating expenses:
|
|
|
|
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Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
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7,937
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8,027
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15,528
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|
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15,461
|
|
||||
Cost of subscriber equipment sales
|
2,886
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|
|
2,983
|
|
|
5,064
|
|
|
6,114
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|
||||
Marketing, general and administrative
|
11,450
|
|
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10,159
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20,060
|
|
|
18,755
|
|
||||
Depreciation, amortization, and accretion
|
19,224
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|
19,271
|
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38,379
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|
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38,317
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||||
Total operating expenses
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41,497
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|
|
40,440
|
|
|
79,031
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|
78,647
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Loss from operations
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(16,411
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)
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(17,417
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)
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(32,109
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)
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(34,602
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)
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||||
Other income (expense):
|
|
|
|
|
|
|
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|
|
||||||
Loss on extinguishment of debt
|
—
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(2,189
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)
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—
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(2,254
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)
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||||
Loss on equity issuance
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(2,075
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)
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(2,912
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)
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(1,923
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)
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(2,912
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)
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Interest income and expense, net of amounts capitalized
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(9,049
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)
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(9,244
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)
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(18,154
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)
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(17,761
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)
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Derivative gain
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40,499
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237,087
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39,155
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129,222
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Other
|
685
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(452
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)
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(76
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)
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3,681
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Total other income (expense)
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30,060
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222,290
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19,002
|
|
|
109,976
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Income (loss) before income taxes
|
13,649
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204,873
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(13,107
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)
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75,374
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|
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Income tax expense (benefit)
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(450
|
)
|
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106
|
|
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(259
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)
|
|
334
|
|
||||
Net income (loss)
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$
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14,099
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$
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204,767
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$
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(12,848
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)
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$
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75,040
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|
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|
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|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(925
|
)
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447
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(1,576
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)
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(843
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)
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Total comprehensive income (loss)
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$
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13,174
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$
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205,214
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$
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(14,424
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)
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$
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74,197
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Net income (loss) per common share:
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Basic
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$
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0.01
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$
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0.20
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$
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(0.01
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)
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$
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0.07
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Diluted
|
0.01
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0.17
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(0.01
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)
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0.07
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Weighted-average shares outstanding:
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|
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Basic
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1,049,381
|
|
|
1,009,917
|
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1,045,205
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|
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1,005,406
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Diluted
|
1,249,672
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1,205,450
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1,045,205
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1,199,182
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June 30,
2016 |
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December 31, 2015
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ASSETS
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Current assets:
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Cash and cash equivalents
|
$
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11,269
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|
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$
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7,476
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Accounts receivable, net of allowance of $4,330 and $5,270, respectively
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16,164
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14,536
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Inventory
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9,698
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12,023
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|
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Prepaid expenses and other current assets
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5,030
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4,456
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Total current assets
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42,161
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38,491
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Property and equipment, net
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1,059,019
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1,077,560
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Restricted cash
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37,918
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37,918
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Prepaid second-generation ground costs
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4,165
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8,929
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|
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Intangible and other assets, net of accumulated amortization of $6,873 and $6,315, respectively
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13,497
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|
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12,117
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Total assets
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$
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1,156,760
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$
|
1,175,015
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Current portion of long-term debt
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$
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38,112
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$
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32,835
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Accounts payable
|
6,039
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|
|
8,118
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|
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Accrued contract termination charge
|
19,468
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|
|
19,121
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|
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Accrued expenses
|
26,955
|
|
|
22,439
|
|
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Payables to affiliates
|
240
|
|
|
616
|
|
||
Deferred revenue
|
25,225
|
|
|
23,902
|
|
||
Total current liabilities
|
116,039
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|
|
107,031
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|
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Long-term debt, less current portion
|
540,350
|
|
|
548,286
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|
||
Employee benefit obligations
|
4,894
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|
|
4,810
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|
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Derivative liabilities
|
200,482
|
|
|
239,642
|
|
||
Deferred revenue
|
6,125
|
|
|
6,413
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|
||
Debt restructuring fees
|
20,795
|
|
|
20,795
|
|
||
Other non-current liabilities
|
11,931
|
|
|
10,907
|
|
||
Total non-current liabilities
|
784,577
|
|
|
830,853
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|
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Commitments and contingent liabilities (Notes 7 and 8)
|
|
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|
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Stockholders’ equity:
|
|
|
|
|
|
||
Preferred Stock of $0.0001 par value; 100,000,000 shares authorized and none issued and outstanding at June 30, 2016 and December 31, 2015, respectively
|
—
|
|
|
—
|
|
||
Series A Preferred Convertible Stock of $0.0001 par value; one share authorized and none issued and outstanding at June 30, 2016 and December 31, 2015, respectively
|
—
|
|
|
—
|
|
||
Voting Common Stock of $0.0001 par value; 1,200,000,000 shares authorized; 946,245,007 and 904,448,226 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively
|
95
|
|
|
90
|
|
||
Nonvoting Common Stock of $0.0001 par value; 400,000,000 shares authorized; 134,008,656 shares issued and outstanding at June 30, 2016 and December 31, 2015
|
13
|
|
|
13
|
|
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Additional paid-in capital
|
1,624,875
|
|
|
1,591,443
|
|
||
Accumulated other comprehensive loss
|
(6,409
|
)
|
|
(4,833
|
)
|
||
Retained deficit
|
(1,362,430
|
)
|
|
(1,349,582
|
)
|
||
Total stockholders’ equity
|
256,144
|
|
|
237,131
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,156,760
|
|
|
$
|
1,175,015
|
|
|
Six Months Ended
|
||||||
|
June 30,
2016 |
|
June 30,
2015 |
||||
Cash flows provided by (used in) operating activities:
|
|
|
|
|
|
||
Net income (loss)
|
$
|
(12,848
|
)
|
|
$
|
75,040
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation, amortization and accretion
|
38,379
|
|
|
38,317
|
|
||
Change in fair value of derivative assets and liabilities
|
(39,155
|
)
|
|
(129,222
|
)
|
||
Stock-based compensation expense
|
1,848
|
|
|
1,472
|
|
||
Amortization of deferred financing costs
|
4,672
|
|
|
4,667
|
|
||
Provision for bad debts
|
396
|
|
|
1,900
|
|
||
Noncash interest and accretion expense
|
5,487
|
|
|
5,712
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
2,254
|
|
||
Loss on equity issuance
|
1,923
|
|
|
2,912
|
|
||
Noncash expense related to legal settlement
|
1,094
|
|
|
—
|
|
||
Unrealized foreign currency gain
|
(77
|
)
|
|
(3,442
|
)
|
||
Other, net
|
262
|
|
|
618
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(2,144
|
)
|
|
(3,652
|
)
|
||
Inventory
|
2,924
|
|
|
2,562
|
|
||
Prepaid expenses and other current assets
|
(868
|
)
|
|
(788
|
)
|
||
Other assets
|
104
|
|
|
(493
|
)
|
||
Accounts payable and accrued expenses
|
(1,474
|
)
|
|
(63
|
)
|
||
Payables to affiliates
|
(377
|
)
|
|
(25
|
)
|
||
Other non-current liabilities
|
50
|
|
|
(429
|
)
|
||
Deferred revenue
|
805
|
|
|
1,398
|
|
||
Net cash provided by (used in) operating activities
|
1,001
|
|
|
(1,262
|
)
|
||
Cash flows used in investing activities:
|
|
|
|
|
|
||
Second-generation network costs (including interest)
|
(5,307
|
)
|
|
(10,344
|
)
|
||
Property and equipment additions
|
(6,345
|
)
|
|
(2,325
|
)
|
||
Purchase of intangible assets
|
(806
|
)
|
|
(1,343
|
)
|
||
Net cash used in investing activities
|
(12,458
|
)
|
|
(14,012
|
)
|
||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
||
Principal payments of the Facility Agreement
|
(16,418
|
)
|
|
(3,225
|
)
|
||
Proceeds from issuance of stock to Terrapin
|
28,500
|
|
|
24,000
|
|
||
Proceeds from issuance of common stock and exercise of options and warrants
|
3,016
|
|
|
419
|
|
||
Net cash provided by financing activities
|
15,098
|
|
|
21,194
|
|
||
Effect of exchange rate changes on cash
|
152
|
|
|
(170
|
)
|
||
Net increase in cash and cash equivalents
|
3,793
|
|
|
5,750
|
|
||
Cash and cash equivalents, beginning of period
|
7,476
|
|
|
7,121
|
|
||
Cash and cash equivalents, end of period
|
$
|
11,269
|
|
|
$
|
12,871
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Cash paid for:
|
|
|
|
|
|
||
Interest
|
$
|
10,922
|
|
|
$
|
9,746
|
|
Income taxes
|
127
|
|
|
5
|
|
||
|
|
|
|
||||
|
|
|
|
||||
|
Six Months Ended
|
||||||
|
June 30,
2016 |
|
June 30,
2015 |
||||
Supplemental disclosure of non-cash financing and investing activities:
|
|
|
|
|
|
||
Increase in capitalized accrued interest for second-generation satellites and ground costs
|
1,500
|
|
|
995
|
|
||
Increase in accrued second-generation network costs
|
191
|
|
|
—
|
|
||
Capitalization of the accretion of debt discount and amortization of prepaid financing costs
|
2,099
|
|
|
1,580
|
|
||
Payments made in convertible notes and common stock
|
—
|
|
|
735
|
|
||
Principal amount of debt converted into common stock
|
—
|
|
|
6,491
|
|
||
Reduction of debt discount and issuance costs due to note conversions
|
—
|
|
|
2,085
|
|
||
Fair value of common stock issued upon conversion of debt
|
—
|
|
|
26,669
|
|
||
Reduction in derivative liability due to conversion of debt
|
—
|
|
|
20,008
|
|
||
Fair value of common stock issued to vendor for payment of invoices
|
—
|
|
|
16,684
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Globalstar System:
|
|
|
|
|
|
||
Space component
|
|
|
|
|
|
||
First and second-generation satellites in service
|
$
|
1,211,226
|
|
|
$
|
1,211,768
|
|
Prepaid long-lead items
|
17,040
|
|
|
17,040
|
|
||
Second-generation satellite, on-ground spare
|
32,481
|
|
|
32,481
|
|
||
Ground component
|
48,184
|
|
|
46,870
|
|
||
Construction in progress:
|
|
|
|
|
|
||
Space component
|
81
|
|
|
81
|
|
||
Ground component
|
190,328
|
|
|
177,780
|
|
||
Next-generation software upgrades
|
8,435
|
|
|
3,440
|
|
||
Other
|
2,375
|
|
|
2,153
|
|
||
Total Globalstar System
|
1,510,150
|
|
|
1,491,613
|
|
||
Internally developed and purchased software
|
14,753
|
|
|
14,492
|
|
||
Equipment
|
11,996
|
|
|
10,802
|
|
||
Land and buildings
|
3,343
|
|
|
3,151
|
|
||
Leasehold improvements
|
1,731
|
|
|
1,671
|
|
||
Total property and equipment
|
1,541,973
|
|
|
1,521,729
|
|
||
Accumulated depreciation
|
(482,954
|
)
|
|
(444,169
|
)
|
||
Total property and equipment, net
|
$
|
1,059,019
|
|
|
$
|
1,077,560
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Interest costs eligible to be capitalized
|
$
|
11,947
|
|
|
$
|
10,589
|
|
|
$
|
23,792
|
|
|
$
|
20,705
|
|
Interest costs recorded in interest income (expense), net
|
(8,565
|
)
|
|
(8,125
|
)
|
|
(17,144
|
)
|
|
(16,049
|
)
|
||||
Net interest capitalized
|
$
|
3,382
|
|
|
$
|
2,464
|
|
|
$
|
6,648
|
|
|
$
|
4,656
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Depreciation expense
|
$
|
19,118
|
|
|
$
|
19,127
|
|
|
$
|
38,168
|
|
|
$
|
38,030
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Principal
Amount
|
|
Unamortized Discount and Deferred Financing Costs
|
|
Carrying
Value
|
|
Principal
Amount
|
|
Unamortized Discount and Deferred Financing Costs
|
|
Carrying
Value
|
||||||||||||
Facility Agreement
|
$
|
559,429
|
|
|
$
|
51,702
|
|
|
$
|
507,727
|
|
|
$
|
575,846
|
|
|
$
|
57,829
|
|
|
$
|
518,017
|
|
Thermo Loan Agreement
|
88,400
|
|
|
31,136
|
|
|
57,264
|
|
|
83,222
|
|
|
32,558
|
|
|
50,664
|
|
||||||
8.00% Convertible Senior Notes Issued in 2013
|
16,936
|
|
|
3,465
|
|
|
13,471
|
|
|
16,747
|
|
|
4,307
|
|
|
12,440
|
|
||||||
Total Debt
|
664,765
|
|
|
86,303
|
|
|
578,462
|
|
|
675,815
|
|
|
94,694
|
|
|
581,121
|
|
||||||
Less: Current Portion
|
38,112
|
|
|
—
|
|
|
38,112
|
|
|
32,835
|
|
|
—
|
|
|
32,835
|
|
||||||
Long-Term Debt
|
$
|
626,653
|
|
|
$
|
86,303
|
|
|
$
|
540,350
|
|
|
$
|
642,980
|
|
|
$
|
94,694
|
|
|
$
|
548,286
|
|
|
Outstanding Warrants
|
|
Strike Price
|
||||||||||
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
||||||
Contingent Equity Agreement
(1)
|
24,571,428
|
|
|
30,191,866
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
5.0% Warrants
(2)
|
—
|
|
|
8,000,000
|
|
|
—
|
|
|
0.32
|
|
||
|
24,571,428
|
|
|
38,191,866
|
|
|
|
|
|
|
|
(1)
|
Pursuant to the terms of the Contingent Equity Agreement with Thermo (See Note 9: Related Party Transactions in the Consolidated Financial Statements in the 2015 Annual Report for a description of the Contingent Equity Agreement), the Company issued to Thermo warrants to purchase shares of common stock pursuant to the annual availability fee and subsequent reset provisions in the Contingent Equity Agreement. These warrants were issued between June 2009 and June 2012 and have a
five
-year exercise period from issuance. As of
June 30, 2016
, Thermo had exercised warrants to purchase approximately
16.9 million
of these shares prior to the expiration of the associated warrants. In June 2016, Thermo exercised warrants to purchase
5.6 million
shares of voting common stock for a total purchase price of $
0.1 million
. The exercise period for the remaining outstanding warrants expires in June 2017.
|
(2)
|
In June 2011, the Company issued warrants (the “
5.0%
Warrants”) to purchase
15.2 million
shares of its voting common stock in connection with the issuance of its 5.0% Convertible Senior Unsecured Notes. In June 2016, Thermo exercised all of the remaining warrants outstanding to purchase
8.0 million
shares of voting common stock for a total purchase price of $
2.5 million
. See Note 3: Long-Term Debt and Other Financing Arrangements in the Consolidated Financial Statements in the 2015 Annual Report for a complete description of the
5.0%
Warrants.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Derivative assets:
|
|
|
|
|
|
||
Interest rate cap
|
$
|
1
|
|
|
$
|
6
|
|
Total derivative assets
|
$
|
1
|
|
|
$
|
6
|
|
Derivative liabilities:
|
|
|
|
|
|
||
Compound embedded derivative with 2013 8.00% Notes
|
$
|
(20,420
|
)
|
|
$
|
(26,203
|
)
|
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
(180,062
|
)
|
|
(213,439
|
)
|
||
Total derivative liabilities
|
$
|
(200,482
|
)
|
|
$
|
(239,642
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2016
|
|
June 30, 2015
|
|
June 30, 2016
|
|
June 30, 2015
|
||||||||
Interest rate cap
|
$
|
(1
|
)
|
|
$
|
(6
|
)
|
|
$
|
(5
|
)
|
|
$
|
(27
|
)
|
Compound embedded derivative with 2013 8.00% Notes
|
5,335
|
|
|
37,928
|
|
|
5,783
|
|
|
18,892
|
|
||||
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
35,165
|
|
|
199,165
|
|
|
33,377
|
|
|
110,357
|
|
||||
Total derivative gain
|
$
|
40,499
|
|
|
$
|
237,087
|
|
|
$
|
39,155
|
|
|
$
|
129,222
|
|
|
June 30, 2016
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
Balance
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate cap
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Total assets measured at fair value
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liability for potential stock issuance to Hughes
|
$
|
—
|
|
|
$
|
(7,418
|
)
|
|
$
|
—
|
|
|
$
|
(7,418
|
)
|
Compound embedded derivative with 2013 8.00% Notes
|
—
|
|
|
—
|
|
|
(20,420
|
)
|
|
(20,420
|
)
|
||||
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
—
|
|
|
—
|
|
|
(180,062
|
)
|
|
(180,062
|
)
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
(7,418
|
)
|
|
$
|
(200,482
|
)
|
|
$
|
(207,900
|
)
|
|
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 2013 8.00% Notes
|
—
|
|
|
—
|
|
|
(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
|
)
|
|
June 30, 2016
|
|||||||||||
|
Stock Price
Volatility
|
|
Risk-Free
Interest
Rate
|
|
Note
Conversion
Price
|
|
Market Price of Common Stock
|
|||||
Compound embedded derivative with the 2013 8.00% Notes
|
100% - 130%
|
|
0.5
|
%
|
|
$
|
0.73
|
|
|
$
|
1.21
|
|
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
40% - 130%
|
|
1.3
|
%
|
|
$
|
0.73
|
|
|
$
|
1.21
|
|
|
December 31, 2015
|
|||||||||||
|
Stock Price
Volatility
|
|
Risk-Free
Interest
Rate
|
|
Note
Conversion
Price
|
|
Market Price of Common Stock
|
|||||
Compound embedded derivative with 2013 8.00% Notes
|
75% - 90%
|
|
1.1
|
%
|
|
$
|
0.73
|
|
|
$
|
1.44
|
|
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement
|
50% - 90%
|
|
2.1
|
%
|
|
$
|
0.73
|
|
|
$
|
1.44
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Balance at beginning of period
|
$
|
(240,982
|
)
|
|
$
|
(548,526
|
)
|
|
$
|
(239,642
|
)
|
|
$
|
(441,550
|
)
|
Derivative adjustment related to conversions
|
—
|
|
|
19,140
|
|
|
—
|
|
|
20,008
|
|
||||
Unrealized gain, included in derivative gain
|
40,500
|
|
|
237,093
|
|
|
39,160
|
|
|
129,249
|
|
||||
Balance at end of period
|
$
|
(200,482
|
)
|
|
$
|
(292,293
|
)
|
|
$
|
(200,482
|
)
|
|
$
|
(292,293
|
)
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying Value
|
|
Estimated Fair Value
|
|
Carrying Value
|
|
Estimated Fair Value
|
||||||||
Thermo Loan Agreement
|
$
|
57,264
|
|
|
$
|
29,207
|
|
|
$
|
50,664
|
|
|
$
|
17,244
|
|
2013 8.00% Notes
|
13,471
|
|
|
12,111
|
|
|
12,440
|
|
|
9,831
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Accrued interest
|
$
|
319
|
|
|
$
|
317
|
|
Accrued compensation and benefits
|
2,927
|
|
|
2,098
|
|
||
Accrued property and other taxes
|
4,391
|
|
|
4,125
|
|
||
Accrued customer liabilities and deposits
|
3,336
|
|
|
3,216
|
|
||
Accrued professional and other service provider fees
|
2,401
|
|
|
1,830
|
|
||
Accrued commissions
|
969
|
|
|
1,216
|
|
||
Accrued telecommunications expenses
|
865
|
|
|
1,487
|
|
||
Accrued inventory
|
217
|
|
|
502
|
|
||
Accrued liability for potential stock issuance to Hughes
|
7,418
|
|
|
5,495
|
|
||
Accrued liability for legal settlement
|
1,422
|
|
|
328
|
|
||
Other accrued expenses
|
2,690
|
|
|
1,825
|
|
||
Total accrued expenses
|
$
|
26,955
|
|
|
$
|
22,439
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Long-term accrued interest
|
$
|
96
|
|
|
$
|
96
|
|
Asset retirement obligation
|
1,373
|
|
|
1,302
|
|
||
Deferred rent and other deferred expense
|
561
|
|
|
593
|
|
||
Liability related to the Cooperative Endeavor Agreement with the State of Louisiana
|
616
|
|
|
716
|
|
||
Uncertain income tax positions
|
6,352
|
|
|
5,795
|
|
||
Foreign tax contingencies
|
2,706
|
|
|
2,311
|
|
||
Capital lease obligations
|
227
|
|
|
94
|
|
||
Total other non-current liabilities
|
$
|
11,931
|
|
|
$
|
10,907
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Accumulated other comprehensive loss, beginning of period
|
$
|
(5,484
|
)
|
|
$
|
(4,188
|
)
|
|
$
|
(4,833
|
)
|
|
$
|
(2,898
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
(925
|
)
|
|
447
|
|
|
(1,576
|
)
|
|
(843
|
)
|
||||
Accumulated other comprehensive loss, end of period
|
$
|
(6,409
|
)
|
|
$
|
(3,741
|
)
|
|
$
|
(6,409
|
)
|
|
$
|
(3,741
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||
Service revenue:
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
14,407
|
|
|
$
|
12,468
|
|
|
$
|
27,676
|
|
|
$
|
24,183
|
|
Canada
|
4,066
|
|
|
3,771
|
|
|
7,310
|
|
|
7,204
|
|
||||
Europe
|
1,805
|
|
|
1,541
|
|
|
3,263
|
|
|
2,743
|
|
||||
Central and South America
|
570
|
|
|
688
|
|
|
1,188
|
|
|
1,302
|
|
||||
Others
|
122
|
|
|
148
|
|
|
282
|
|
|
291
|
|
||||
Total service revenue
|
$
|
20,970
|
|
|
$
|
18,616
|
|
|
$
|
39,719
|
|
|
$
|
35,723
|
|
Subscriber equipment sales:
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
2,226
|
|
|
1,990
|
|
|
3,530
|
|
|
3,578
|
|
||||
Canada
|
1,052
|
|
|
1,278
|
|
|
1,813
|
|
|
2,439
|
|
||||
Europe
|
527
|
|
|
452
|
|
|
956
|
|
|
985
|
|
||||
Central and South America
|
279
|
|
|
424
|
|
|
667
|
|
|
1,057
|
|
||||
Others
|
32
|
|
|
263
|
|
|
237
|
|
|
263
|
|
||||
Total subscriber equipment sales
|
$
|
4,116
|
|
|
$
|
4,407
|
|
|
$
|
7,203
|
|
|
$
|
8,322
|
|
Total revenue
|
$
|
25,086
|
|
|
$
|
23,023
|
|
|
$
|
46,922
|
|
|
$
|
44,045
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Property and equipment, net:
|
|
|
|
|
|
||
United States
|
$
|
1,054,493
|
|
|
$
|
1,073,327
|
|
Canada
|
626
|
|
|
510
|
|
||
Europe
|
454
|
|
|
484
|
|
||
Central and South America
|
3,126
|
|
|
2,782
|
|
||
Others
|
320
|
|
|
457
|
|
||
Total property and equipment, net
|
$
|
1,059,019
|
|
|
$
|
1,077,560
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
14,099
|
|
|
$
|
204,767
|
|
|
$
|
(12,848
|
)
|
|
$
|
75,040
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
2013 8.00% Notes
|
537
|
|
|
593
|
|
|
—
|
|
|
1,313
|
|
||||
Thermo Loan Agreement
|
2,401
|
|
|
2,148
|
|
|
—
|
|
|
4,251
|
|
||||
Income (loss) to common stockholders plus assumed conversions
|
$
|
17,037
|
|
|
$
|
207,508
|
|
|
$
|
(12,848
|
)
|
|
$
|
80,604
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic shares outstanding
|
1,049,381
|
|
|
1,009,917
|
|
|
1,045,205
|
|
|
1,005,406
|
|
||||
Incremental shares from assumed exercises, conversions and other issuances:
|
|
|
|
|
|
|
|
||||||||
Stock options, restricted stock, restricted stock units and ESPP
|
5,793
|
|
|
8,667
|
|
|
—
|
|
|
8,534
|
|
||||
2013 8.00% Notes
|
27,164
|
|
|
28,001
|
|
|
—
|
|
|
27,778
|
|
||||
Thermo Loan Agreement
|
139,709
|
|
|
120,673
|
|
|
—
|
|
|
119,272
|
|
||||
Warrants and other
|
27,625
|
|
|
38,192
|
|
|
—
|
|
|
38,192
|
|
||||
Diluted shares outstanding
|
1,249,672
|
|
|
1,205,450
|
|
|
1,045,205
|
|
|
1,199,182
|
|
||||
Income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.01
|
|
|
0.20
|
|
|
(0.01
|
)
|
|
0.07
|
|
||||
Diluted
|
0.01
|
|
|
0.17
|
|
|
(0.01
|
)
|
|
0.07
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
10,944
|
|
|
$
|
10,863
|
|
|
$
|
10,689
|
|
|
$
|
(11,526
|
)
|
|
$
|
20,970
|
|
Subscriber equipment sales
|
96
|
|
|
2,774
|
|
|
1,997
|
|
|
(751
|
)
|
|
4,116
|
|
|||||
Total revenue
|
11,040
|
|
|
13,637
|
|
|
12,686
|
|
|
(12,277
|
)
|
|
25,086
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
5,135
|
|
|
1,034
|
|
|
2,702
|
|
|
(934
|
)
|
|
7,937
|
|
|||||
Cost of subscriber equipment sales
|
43
|
|
|
2,112
|
|
|
1,478
|
|
|
(747
|
)
|
|
2,886
|
|
|||||
Marketing, general and administrative
|
5,430
|
|
|
1,322
|
|
|
16,219
|
|
|
(11,521
|
)
|
|
11,450
|
|
|||||
Depreciation, amortization, and accretion
|
18,851
|
|
|
206
|
|
|
288
|
|
|
(121
|
)
|
|
19,224
|
|
|||||
Total operating expenses
|
29,459
|
|
|
4,674
|
|
|
20,687
|
|
|
(13,323
|
)
|
|
41,497
|
|
|||||
Income (loss) from operations
|
(18,419
|
)
|
|
8,963
|
|
|
(8,001
|
)
|
|
1,046
|
|
|
(16,411
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on equity issuance
|
(2,075
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,075
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(9,000
|
)
|
|
(3
|
)
|
|
(47
|
)
|
|
1
|
|
|
(9,049
|
)
|
|||||
Derivative gain
|
40,499
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,499
|
|
|||||
Equity in subsidiary earnings (loss)
|
2,924
|
|
|
(968
|
)
|
|
—
|
|
|
(1,956
|
)
|
|
—
|
|
|||||
Other
|
170
|
|
|
92
|
|
|
328
|
|
|
95
|
|
|
685
|
|
|||||
Total other income (expense)
|
32,518
|
|
|
(879
|
)
|
|
281
|
|
|
(1,860
|
)
|
|
30,060
|
|
|||||
Income (loss) before income taxes
|
14,099
|
|
|
8,084
|
|
|
(7,720
|
)
|
|
(814
|
)
|
|
13,649
|
|
|||||
Income tax benefit
|
—
|
|
|
—
|
|
|
(450
|
)
|
|
—
|
|
|
(450
|
)
|
|||||
Net income (loss)
|
$
|
14,099
|
|
|
$
|
8,084
|
|
|
$
|
(7,270
|
)
|
|
$
|
(814
|
)
|
|
$
|
14,099
|
|
Comprehensive income (loss)
|
$
|
14,099
|
|
|
$
|
8,084
|
|
|
$
|
(8,195
|
)
|
|
$
|
(814
|
)
|
|
$
|
13,174
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Service revenues
|
$
|
15,932
|
|
|
$
|
6,865
|
|
|
$
|
11,213
|
|
|
$
|
(15,394
|
)
|
|
$
|
18,616
|
|
Subscriber equipment sales
|
296
|
|
|
2,615
|
|
|
2,993
|
|
|
(1,497
|
)
|
|
4,407
|
|
|||||
Total revenue
|
16,228
|
|
|
9,480
|
|
|
14,206
|
|
|
(16,891
|
)
|
|
23,023
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
4,969
|
|
|
1,652
|
|
|
3,037
|
|
|
(1,631
|
)
|
|
8,027
|
|
|||||
Cost of subscriber equipment sales
|
78
|
|
|
2,137
|
|
|
3,286
|
|
|
(2,518
|
)
|
|
2,983
|
|
|||||
Marketing, general and administrative
|
4,940
|
|
|
1,832
|
|
|
16,561
|
|
|
(13,174
|
)
|
|
10,159
|
|
|||||
Depreciation, amortization, and accretion
|
18,778
|
|
|
293
|
|
|
329
|
|
|
(129
|
)
|
|
19,271
|
|
|||||
Total operating expenses
|
28,765
|
|
|
5,914
|
|
|
23,213
|
|
|
(17,452
|
)
|
|
40,440
|
|
|||||
Income (loss) from operations
|
(12,537
|
)
|
|
3,566
|
|
|
(9,007
|
)
|
|
561
|
|
|
(17,417
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(2,189
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,189
|
)
|
|||||
Loss on equity issuance
|
(2,912
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,912
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(9,107
|
)
|
|
(5
|
)
|
|
(138
|
)
|
|
6
|
|
|
(9,244
|
)
|
|||||
Derivative gain
|
237,087
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
237,087
|
|
|||||
Equity in subsidiary earnings (loss)
|
(5,035
|
)
|
|
1,161
|
|
|
—
|
|
|
3,874
|
|
|
—
|
|
|||||
Other
|
(674
|
)
|
|
(132
|
)
|
|
355
|
|
|
(1
|
)
|
|
(452
|
)
|
|||||
Total other income (expense)
|
217,170
|
|
|
1,024
|
|
|
217
|
|
|
3,879
|
|
|
222,290
|
|
|||||
Income (loss) before income taxes
|
204,633
|
|
|
4,590
|
|
|
(8,790
|
)
|
|
4,440
|
|
|
204,873
|
|
|||||
Income tax expense (benefit)
|
(134
|
)
|
|
(8
|
)
|
|
248
|
|
|
|
|
|
106
|
|
|||||
Net income (loss)
|
$
|
204,767
|
|
|
$
|
4,598
|
|
|
$
|
(9,038
|
)
|
|
$
|
4,440
|
|
|
$
|
204,767
|
|
Comprehensive income (loss)
|
$
|
204,767
|
|
|
$
|
4,598
|
|
|
$
|
(8,591
|
)
|
|
$
|
4,440
|
|
|
$
|
205,214
|
|
|
Parent
Company |
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
27,882
|
|
|
$
|
18,358
|
|
|
$
|
20,114
|
|
|
$
|
(26,635
|
)
|
|
$
|
39,719
|
|
Subscriber equipment sales
|
424
|
|
|
4,466
|
|
|
3,674
|
|
|
(1,361
|
)
|
|
7,203
|
|
|||||
Total revenue
|
28,306
|
|
|
22,824
|
|
|
23,788
|
|
|
(27,996
|
)
|
|
46,922
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
9,948
|
|
|
2,070
|
|
|
5,597
|
|
|
(2,087
|
)
|
|
15,528
|
|
|||||
Cost of subscriber equipment sales
|
187
|
|
|
3,540
|
|
|
2,693
|
|
|
(1,356
|
)
|
|
5,064
|
|
|||||
Marketing, general and administrative
|
10,604
|
|
|
1,854
|
|
|
33,064
|
|
|
(25,462
|
)
|
|
20,060
|
|
|||||
Depreciation, amortization, and accretion
|
37,623
|
|
|
426
|
|
|
569
|
|
|
(239
|
)
|
|
38,379
|
|
|||||
Total operating expenses
|
58,362
|
|
|
7,890
|
|
|
41,923
|
|
|
(29,144
|
)
|
|
79,031
|
|
|||||
Income (loss) from operations
|
(30,056
|
)
|
|
14,934
|
|
|
(18,135
|
)
|
|
1,148
|
|
|
(32,109
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on equity issuance
|
(1,923
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,923
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(17,981
|
)
|
|
(12
|
)
|
|
(152
|
)
|
|
(9
|
)
|
|
(18,154
|
)
|
|||||
Derivative gain
|
39,155
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,155
|
|
|||||
Equity in subsidiary earnings (loss)
|
(1,427
|
)
|
|
2,079
|
|
|
—
|
|
|
(652
|
)
|
|
—
|
|
|||||
Other
|
(616
|
)
|
|
(112
|
)
|
|
604
|
|
|
48
|
|
|
(76
|
)
|
|||||
Total other income (expense)
|
17,208
|
|
|
1,955
|
|
|
452
|
|
|
(613
|
)
|
|
19,002
|
|
|||||
Income (loss) before income taxes
|
(12,848
|
)
|
|
16,889
|
|
|
(17,683
|
)
|
|
535
|
|
|
(13,107
|
)
|
|||||
Income tax benefit
|
—
|
|
|
—
|
|
|
(259
|
)
|
|
—
|
|
|
(259
|
)
|
|||||
Net income (loss)
|
$
|
(12,848
|
)
|
|
$
|
16,889
|
|
|
$
|
(17,424
|
)
|
|
$
|
535
|
|
|
$
|
(12,848
|
)
|
Comprehensive income (loss)
|
$
|
(12,848
|
)
|
|
$
|
16,889
|
|
|
$
|
(19,000
|
)
|
|
$
|
535
|
|
|
$
|
(14,424
|
)
|
|
Parent
Company |
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Service revenues
|
$
|
32,175
|
|
|
$
|
14,543
|
|
|
$
|
20,020
|
|
|
$
|
(31,015
|
)
|
|
$
|
35,723
|
|
Subscriber equipment sales
|
354
|
|
|
6,064
|
|
|
5,491
|
|
|
(3,587
|
)
|
|
8,322
|
|
|||||
Total revenue
|
32,529
|
|
|
20,607
|
|
|
25,511
|
|
|
(34,602
|
)
|
|
44,045
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
9,504
|
|
|
3,177
|
|
|
6,289
|
|
|
(3,509
|
)
|
|
15,461
|
|
|||||
Cost of subscriber equipment sales
|
60
|
|
|
5,443
|
|
|
5,732
|
|
|
(5,121
|
)
|
|
6,114
|
|
|||||
Marketing, general and administrative
|
9,449
|
|
|
2,991
|
|
|
32,305
|
|
|
(25,990
|
)
|
|
18,755
|
|
|||||
Depreciation, amortization, and accretion
|
37,327
|
|
|
591
|
|
|
652
|
|
|
(253
|
)
|
|
38,317
|
|
|||||
Total operating expenses
|
56,340
|
|
|
12,202
|
|
|
44,978
|
|
|
(34,873
|
)
|
|
78,647
|
|
|||||
Income (loss) from operations
|
(23,811
|
)
|
|
8,405
|
|
|
(19,467
|
)
|
|
271
|
|
|
(34,602
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(2,254
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,254
|
)
|
|||||
Loss on equity issuance
|
(2,912
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,912
|
)
|
|||||
Interest income and expense, net of amounts capitalized
|
(17,443
|
)
|
|
(15
|
)
|
|
(309
|
)
|
|
6
|
|
|
(17,761
|
)
|
|||||
Derivative gain
|
129,222
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
129,222
|
|
|||||
Equity in subsidiary earnings (loss)
|
(8,949
|
)
|
|
5,426
|
|
|
—
|
|
|
3,523
|
|
|
—
|
|
|||||
Other
|
1,132
|
|
|
394
|
|
|
2,102
|
|
|
53
|
|
|
3,681
|
|
|||||
Total other income (expense)
|
98,796
|
|
|
5,805
|
|
|
1,793
|
|
|
3,582
|
|
|
109,976
|
|
|||||
Income (loss) before income taxes
|
74,985
|
|
|
14,210
|
|
|
(17,674
|
)
|
|
3,853
|
|
|
75,374
|
|
|||||
Income tax expense (benefit)
|
(55
|
)
|
|
15
|
|
|
374
|
|
|
—
|
|
|
334
|
|
|||||
Net income (loss)
|
$
|
75,040
|
|
|
$
|
14,195
|
|
|
$
|
(18,048
|
)
|
|
$
|
3,853
|
|
|
$
|
75,040
|
|
Comprehensive income (loss)
|
$
|
75,040
|
|
|
$
|
14,195
|
|
|
$
|
(18,891
|
)
|
|
$
|
3,853
|
|
|
$
|
74,197
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
7,640
|
|
|
$
|
807
|
|
|
$
|
2,822
|
|
|
$
|
—
|
|
|
$
|
11,269
|
|
Accounts receivable
|
5,925
|
|
|
6,022
|
|
|
4,217
|
|
|
—
|
|
|
16,164
|
|
|||||
Intercompany receivables
|
869,736
|
|
|
644,878
|
|
|
63,659
|
|
|
(1,578,273
|
)
|
|
—
|
|
|||||
Inventory
|
2,128
|
|
|
5,058
|
|
|
2,512
|
|
|
—
|
|
|
9,698
|
|
|||||
Prepaid expenses and other current assets
|
2,393
|
|
|
330
|
|
|
2,307
|
|
|
—
|
|
|
5,030
|
|
|||||
Total current assets
|
887,822
|
|
|
657,095
|
|
|
75,517
|
|
|
(1,578,273
|
)
|
|
42,161
|
|
|||||
Property and equipment, net
|
1,051,013
|
|
|
3,479
|
|
|
4,649
|
|
|
(122
|
)
|
|
1,059,019
|
|
|||||
Restricted cash
|
37,918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,918
|
|
|||||
Intercompany notes receivable
|
10,717
|
|
|
—
|
|
|
16,295
|
|
|
(27,012
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
(272,351
|
)
|
|
23,009
|
|
|
34,404
|
|
|
214,938
|
|
|
—
|
|
|||||
Prepaid second-generation ground costs
|
4,165
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,165
|
|
|||||
Intangible and other assets, net
|
12,739
|
|
|
200
|
|
|
568
|
|
|
(10
|
)
|
|
13,497
|
|
|||||
Total assets
|
$
|
1,732,023
|
|
|
$
|
683,783
|
|
|
$
|
131,433
|
|
|
$
|
(1,390,479
|
)
|
|
$
|
1,156,760
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current portion of long-term debt
|
$
|
38,112
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38,112
|
|
Accounts payable
|
2,360
|
|
|
2,571
|
|
|
1,108
|
|
|
—
|
|
|
6,039
|
|
|||||
Accrued contract termination charge
|
19,468
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,468
|
|
|||||
Accrued expenses
|
13,378
|
|
|
6,047
|
|
|
7,530
|
|
|
—
|
|
|
26,955
|
|
|||||
Intercompany payables
|
620,440
|
|
|
725,974
|
|
|
241,038
|
|
|
(1,587,452
|
)
|
|
—
|
|
|||||
Payables to affiliates
|
240
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
240
|
|
|||||
Deferred revenue
|
2,007
|
|
|
17,691
|
|
|
5,527
|
|
|
—
|
|
|
25,225
|
|
|||||
Total current liabilities
|
696,005
|
|
|
752,283
|
|
|
255,203
|
|
|
(1,587,452
|
)
|
|
116,039
|
|
|||||
Long-term debt, less current portion
|
540,350
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
540,350
|
|
|||||
Employee benefit obligations
|
4,894
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,894
|
|
|||||
Intercompany notes payable
|
6,004
|
|
|
—
|
|
|
12,860
|
|
|
(18,864
|
)
|
|
—
|
|
|||||
Derivative liabilities
|
200,482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200,482
|
|
|||||
Deferred revenue
|
5,834
|
|
|
291
|
|
|
—
|
|
|
—
|
|
|
6,125
|
|
|||||
Debt restructuring fees
|
20,795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,795
|
|
|||||
Other non-current liabilities
|
1,515
|
|
|
315
|
|
|
10,101
|
|
|
—
|
|
|
11,931
|
|
|||||
Total non-current liabilities
|
779,874
|
|
|
606
|
|
|
22,961
|
|
|
(18,864
|
)
|
|
784,577
|
|
|||||
Stockholders’ equity (deficit)
|
256,144
|
|
|
(69,106
|
)
|
|
(146,731
|
)
|
|
215,837
|
|
|
256,144
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,732,023
|
|
|
$
|
683,783
|
|
|
$
|
131,433
|
|
|
$
|
(1,390,479
|
)
|
|
$
|
1,156,760
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
3,530
|
|
|
$
|
719
|
|
|
$
|
3,227
|
|
|
$
|
—
|
|
|
$
|
7,476
|
|
Accounts receivable
|
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
|
|
|
—
|
|
|||||
Prepaid second-generation ground costs
|
8,929
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,929
|
|
|||||
Intangible and other assets, net
|
11,384
|
|
|
280
|
|
|
464
|
|
|
(11
|
)
|
|
12,117
|
|
|||||
Total assets
|
$
|
1,712,865
|
|
|
$
|
491,548
|
|
|
$
|
100,741
|
|
|
$
|
(1,130,139
|
)
|
|
$
|
1,175,015
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current portion of long-term debt
|
$
|
32,835
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,835
|
|
Accounts payable
|
4,292
|
|
|
2,439
|
|
|
1,387
|
|
|
—
|
|
|
8,118
|
|
|||||
Accrued contract termination charge
|
19,121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,121
|
|
|||||
Accrued expenses
|
9,816
|
|
|
6,949
|
|
|
5,674
|
|
|
—
|
|
|
22,439
|
|
|||||
Intercompany payables
|
580,383
|
|
|
604,999
|
|
|
179,105
|
|
|
(1,364,487
|
)
|
|
—
|
|
|||||
Payables to affiliates
|
616
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
616
|
|
|||||
Deferred revenue
|
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
|
548,286
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
548,286
|
|
|||||
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
|
826,691
|
|
|
691
|
|
|
23,005
|
|
|
(19,534
|
)
|
|
830,853
|
|
|||||
Stockholders’ equity (deficit)
|
237,131
|
|
|
(141,252
|
)
|
|
(112,630
|
)
|
|
253,882
|
|
|
237,131
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,712,865
|
|
|
$
|
491,548
|
|
|
$
|
100,741
|
|
|
$
|
(1,130,139
|
)
|
|
$
|
1,175,015
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cash flows provided by (used in) operating activities
|
$
|
916
|
|
|
$
|
255
|
|
|
$
|
(170
|
)
|
|
$
|
—
|
|
|
$
|
1,001
|
|
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Second-generation network costs (including interest)
|
(5,161
|
)
|
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
(5,307
|
)
|
|||||
Property and equipment additions
|
(5,937
|
)
|
|
(167
|
)
|
|
(241
|
)
|
|
—
|
|
|
(6,345
|
)
|
|||||
Purchase of intangible assets
|
(806
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(806
|
)
|
|||||
Net cash used in investing activities
|
(11,904
|
)
|
|
(167
|
)
|
|
(387
|
)
|
|
—
|
|
|
(12,458
|
)
|
|||||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Principal payments of the Facility Agreement
|
(16,418
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,418
|
)
|
|||||
Proceeds from issuance of stock to Terrapin
|
28,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,500
|
|
|||||
Proceeds from issuance of common stock and exercise of options and warrants
|
3,016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,016
|
|
|||||
Net cash provided by financing activities
|
15,098
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,098
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
152
|
|
|
—
|
|
|
152
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
4,110
|
|
|
88
|
|
|
(405
|
)
|
|
—
|
|
|
3,793
|
|
|||||
Cash and cash equivalents, beginning of period
|
3,530
|
|
|
719
|
|
|
3,227
|
|
|
—
|
|
|
7,476
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
7,640
|
|
|
$
|
807
|
|
|
$
|
2,822
|
|
|
$
|
—
|
|
|
$
|
11,269
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cash flows provided by (used in) operating activities
|
$
|
(3,451
|
)
|
|
$
|
1,239
|
|
|
$
|
950
|
|
|
$
|
—
|
|
|
$
|
(1,262
|
)
|
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Second-generation network costs (including interest)
|
(10,344
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,344
|
)
|
|||||
Property and equipment additions
|
(636
|
)
|
|
(1,452
|
)
|
|
(237
|
)
|
|
—
|
|
|
(2,325
|
)
|
|||||
Purchase of intangible assets
|
(1,343
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,343
|
)
|
|||||
Net cash used in investing activities
|
(12,323
|
)
|
|
(1,452
|
)
|
|
(237
|
)
|
|
—
|
|
|
(14,012
|
)
|
|||||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Principal payments of the Facility Agreement
|
(3,225
|
)
|
|
|
|
|
|
|
|
(3,225
|
)
|
||||||||
Proceeds from issuance of stock to Terrapin
|
24,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,000
|
|
|||||
Proceeds from issuance of common stock and exercise of options and warrants
|
419
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
419
|
|
|||||
Net cash provided by financing activities
|
21,194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,194
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(170
|
)
|
|
—
|
|
|
(170
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
5,420
|
|
|
(213
|
)
|
|
543
|
|
|
—
|
|
|
5,750
|
|
|||||
Cash and cash equivalents, beginning of period
|
3,166
|
|
|
672
|
|
|
3,283
|
|
|
—
|
|
|
7,121
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
8,586
|
|
|
$
|
459
|
|
|
$
|
3,826
|
|
|
$
|
—
|
|
|
$
|
12,871
|
|
•
|
two-way voice communication and data transmissions (“Duplex”) using mobile or fixed devices; and
|
•
|
one-way data transmissions ("Simplex") using a mobile or fixed device that transmits its location and other information to a central monitoring station, which includes certain SPOT and Simplex products.
|
•
|
total revenue, which is an indicator of our overall business growth;
|
•
|
subscriber growth and churn rate, which are both indicators of the satisfaction of our customers;
|
•
|
average monthly revenue per user, or ARPU, which is an indicator of our pricing and ability to obtain effectively long-term, high-value customers. We calculate ARPU separately for each type of our Duplex, Simplex, SPOT and IGO revenue;
|
•
|
operating income and adjusted EBITDA, both of which are indicators of our financial performance; and
|
•
|
capital expenditures, which are an indicator of future revenue growth potential and cash requirements.
|
|
Three Months Ended
June 30, 2016 |
|
Three Months Ended
June 30, 2015 |
|
Six Months Ended
June 30, 2016 |
|
Six Months Ended
June 30, 2015 |
||||||||||||||||||||
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||||||||
Service revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Duplex
|
$
|
8,093
|
|
|
32
|
%
|
|
$
|
6,998
|
|
|
30
|
%
|
|
$
|
14,427
|
|
|
31
|
%
|
|
$
|
13,163
|
|
|
30
|
%
|
SPOT
|
9,489
|
|
|
38
|
|
|
8,345
|
|
|
36
|
|
|
18,590
|
|
|
39
|
|
|
15,861
|
|
|
36
|
|
||||
Simplex
|
2,644
|
|
|
11
|
|
|
2,249
|
|
|
10
|
|
|
5,009
|
|
|
11
|
|
|
4,535
|
|
|
10
|
|
||||
IGO
|
172
|
|
|
1
|
|
|
163
|
|
|
1
|
|
|
416
|
|
|
1
|
|
|
387
|
|
|
1
|
|
||||
Other
|
572
|
|
|
2
|
|
|
861
|
|
|
4
|
|
|
1,277
|
|
|
3
|
|
|
1,777
|
|
|
5
|
|
||||
Total
|
$
|
20,970
|
|
|
84
|
%
|
|
$
|
18,616
|
|
|
81
|
%
|
|
$
|
39,719
|
|
|
85
|
%
|
|
$
|
35,723
|
|
|
82
|
%
|
|
Three Months Ended
June 30, 2016 |
|
Three Months Ended
June 30, 2015 |
|
Six Months Ended
June 30, 2016 |
|
Six Months Ended
June 30, 2015 |
||||||||||||||||||||
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||||||||
Subscriber equipment sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Duplex
|
$
|
1,171
|
|
|
4
|
%
|
|
$
|
1,316
|
|
|
6
|
%
|
|
$
|
2,019
|
|
|
4
|
%
|
|
$
|
2,825
|
|
|
6
|
%
|
SPOT
|
1,654
|
|
|
7
|
|
|
1,469
|
|
|
6
|
|
|
2,615
|
|
|
6
|
|
|
2,527
|
|
|
6
|
|
||||
Simplex
|
1,072
|
|
|
4
|
|
|
1,209
|
|
|
5
|
|
|
2,006
|
|
|
4
|
|
|
2,396
|
|
|
5
|
|
||||
IGO
|
229
|
|
|
1
|
|
|
351
|
|
|
2
|
|
|
531
|
|
|
1
|
|
|
473
|
|
|
1
|
|
||||
Other
|
(10
|
)
|
|
—
|
|
|
62
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
101
|
|
|
—
|
|
||||
Total
|
$
|
4,116
|
|
|
16
|
%
|
|
$
|
4,407
|
|
|
19
|
%
|
|
$
|
7,203
|
|
|
15
|
%
|
|
$
|
8,322
|
|
|
18
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Average number of subscribers for the period:
|
|
|
|
|
|
|
|
|
|
||||||
Duplex
|
77,479
|
|
|
72,334
|
|
|
77,154
|
|
|
71,188
|
|
||||
SPOT
|
272,698
|
|
|
251,092
|
|
|
271,073
|
|
|
247,961
|
|
||||
Simplex
|
297,945
|
|
|
292,873
|
|
|
300,529
|
|
|
292,357
|
|
||||
IGO
|
39,091
|
|
|
38,752
|
|
|
39,127
|
|
|
38,686
|
|
||||
Other
|
2,662
|
|
|
5,756
|
|
|
2,703
|
|
|
5,776
|
|
||||
Total
|
689,875
|
|
|
660,807
|
|
|
690,586
|
|
|
655,968
|
|
||||
|
|
|
|
|
|
|
|
||||||||
ARPU (monthly):
|
|
|
|
|
|
|
|
|
|||||||
Duplex
|
$
|
34.82
|
|
|
$
|
32.25
|
|
|
$
|
31.16
|
|
|
$
|
30.82
|
|
SPOT
|
11.60
|
|
|
11.08
|
|
|
11.43
|
|
|
10.66
|
|
||||
Simplex
|
2.96
|
|
|
2.56
|
|
|
2.78
|
|
|
2.59
|
|
||||
IGO
|
1.46
|
|
|
1.40
|
|
|
1.77
|
|
|
1.67
|
|
|
Six Months Ended
|
||||||
|
June 30,
2016 |
|
June 30,
2015 |
||||
Net cash provided by (used in) operating activities
|
$
|
1,001
|
|
|
$
|
(1,262
|
)
|
Net cash used in investing activities
|
(12,458
|
)
|
|
(14,012
|
)
|
||
Net cash provided by financing activities
|
15,098
|
|
|
21,194
|
|
||
Effect of exchange rate changes on cash
|
152
|
|
|
(170
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
3,793
|
|
|
$
|
5,750
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Second Amended and Restated Bylaws of Globalstar, Inc.
|
|
|
|
10.1
|
|
Amendment to Letter Agreement regarding equity payment by and between Globalstar, Inc. and Hughes Network Systems, LLC dated as of June 14, 2016
|
|
|
|
31.1
|
|
Section 302 Certification of the Principal Executive Officer
|
|
|
|
31.2
|
|
Section 302 Certification of the Principal Financial Officer
|
|
|
|
32.1
|
|
Section 906 Certification of the Principal Executive Officer
|
|
|
|
32.2
|
|
Section 906 Certification of the Principal Financial Officer
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
GLOBALSTAR, INC.
|
|
|
|
|
Date:
|
August 4, 2016
|
By:
|
/s/ James Monroe III
|
|
|
|
James Monroe III
|
|
|
|
Chairman and Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Rebecca S. Clary
|
|
|
|
Rebecca S. Clary
|
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
Ref:
|
Contract Number GINC-C-08-0390 (“Contract”) between Globalstar, Inc. (“Globalstar”) and Hughes Network Systems, LLC (“Hughes”), as amended;
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Globalstar, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 4, 2016
|
|
|
|
|
By:
|
/s/ James Monroe III
|
|
|
James Monroe III
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Globalstar, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 4, 2016
|
|
|
|
|
By:
|
/s/ Rebecca S. Clary
|
|
|
Rebecca S. Clary
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
Date:
|
August 4, 2016
|
By:
|
/s/ James Monroe III
|
|
|
|
James Monroe III
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
|
Date:
|
August 4, 2016
|
By:
|
/s/ Rebecca S. Clary
|
|
|
|
Rebecca S. Clary
|
|
|
|
Chief Financial Officer (Principal Financial Officer)
|