(Mark One)
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|
☒
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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 American
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Large accelerated filer
☒
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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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Emerging growth 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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Item 16.
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Form 10-K Summary
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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, including 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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Tesacom
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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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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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the amount of propellant used in maintaining the satellite's orbital location or relocating the satellite to a new orbital location (and, for newly-launched satellites, the amount of propellant used during orbit raising following launch);
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•
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the durability and quality of their construction;
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•
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the performance of their components;
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•
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conditions in space such as solar flares and space debris;
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•
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operational considerations, including operational failures and other anomalies; and
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•
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changes in technology which may make all or a portion of our satellite fleet obsolete.
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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 our products and 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 and future spectrum authority 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, as well as our future terrestrial mobile broadband 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 our current equipment inventory;
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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;
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•
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our ability to successfully predict market trends;
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•
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our ability to hire and retain qualified executives, managers and employees;
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•
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our ability to provide attractive service offerings at competitive prices to our target markets; and
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•
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our ability to raise additional capital on acceptable terms when required.
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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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noncompliance with the Foreign Corrupt Practices Act, the UK Bribery Act, sanctions and export controls;
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•
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exposure to varying legal standards, including intellectual property protection in other jurisdictions, and similar laws and regulations;
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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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variations in 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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uncertainty in 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;
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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 that agreement;
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•
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change of control provisions relating to our 2013 8.00% Notes, which provide that a change of control will permit holders of those 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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31,433
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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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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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Mississauga, Ontario
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Canada
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9,502
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Canada Office
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Leased
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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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7,502
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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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Rio de Janeiro
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Brazil
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2,120
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Brazil Office
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Leased
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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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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, 2016
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$
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1.60
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|
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$
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1.00
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June 30, 2016
|
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$
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2.75
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$
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0.94
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September 30, 2016
|
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$
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1.56
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|
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$
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1.09
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December 31, 2016
|
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$
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1.84
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|
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$
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0.77
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|
|
|
|
|
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||||
March 31, 2017
|
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$
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1.77
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|
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$
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1.35
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June 30, 2017
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$
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2.44
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$
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1.61
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September 30, 2017
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$
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2.18
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$
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1.60
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December 31, 2017
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$
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1.87
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$
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1.15
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December 31,
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||||||||||||||||||
(in thousands)
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2017
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2016
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2015
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2014
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2013
|
||||||||||
Statement of Operations Data (year ended):
|
|
|
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|
|
|
|
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|
|
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|
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|||||
Revenues
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$
|
112,660
|
|
|
$
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96,861
|
|
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$
|
90,490
|
|
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$
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90,064
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|
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$
|
82,711
|
|
Operating loss
|
(68,786
|
)
|
|
(63,676
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)
|
|
(66,604
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)
|
|
(95,895
|
)
|
|
(87,396
|
)
|
|||||
Other income (expense)
|
(20,098
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)
|
|
(75,513
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)
|
|
140,318
|
|
|
(366,090
|
)
|
|
(502,582
|
)
|
|||||
Income (loss) before income taxes
|
(88,884
|
)
|
|
(139,189
|
)
|
|
73,714
|
|
|
(461,985
|
)
|
|
(589,978
|
)
|
|||||
Net income (loss)
|
(89,074
|
)
|
|
(132,646
|
)
|
|
72,322
|
|
|
(462,866
|
)
|
|
(591,116
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (end of period):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
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41,644
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|
|
10,230
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|
|
7,476
|
|
|
7,121
|
|
|
17,408
|
|
|||||
Property and equipment, net
|
971,119
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|
|
1,039,719
|
|
|
1,077,560
|
|
|
1,113,560
|
|
|
1,169,785
|
|
|||||
Total assets
|
1,129,265
|
|
|
1,132,614
|
|
|
1,175,015
|
|
|
1,268,420
|
|
|
1,372,608
|
|
|||||
Current maturities of long-term debt
|
79,215
|
|
|
75,755
|
|
|
32,835
|
|
|
6,450
|
|
|
4,046
|
|
|||||
Long-term debt, less current maturities
|
434,651
|
|
|
500,524
|
|
|
548,286
|
|
|
623,640
|
|
|
665,236
|
|
|||||
Stockholders’ equity
|
291,224
|
|
|
161,819
|
|
|
237,131
|
|
|
78,916
|
|
|
116,755
|
|
•
|
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.
|
|
Year Ended
December 31, 2017 |
|
Year Ended
December 31, 2016 |
||||||||||
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||
Service Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||
Duplex
|
$
|
37,635
|
|
|
33
|
%
|
|
$
|
31,848
|
|
|
33
|
%
|
SPOT
|
45,427
|
|
|
40
|
%
|
|
38,157
|
|
|
40
|
%
|
||
Simplex
|
10,946
|
|
|
10
|
%
|
|
10,005
|
|
|
10
|
%
|
||
IGO
|
1,068
|
|
|
1
|
%
|
|
907
|
|
|
1
|
%
|
||
Other
|
3,397
|
|
|
3
|
%
|
|
2,152
|
|
|
2
|
%
|
||
Total Service Revenues
|
$
|
98,473
|
|
|
87
|
%
|
|
$
|
83,069
|
|
|
86
|
%
|
|
Year Ended
December 31, 2017 |
|
Year Ended
December 31, 2016 |
||||||||||
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||
Equipment Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||
Duplex
|
$
|
2,754
|
|
|
2
|
%
|
|
$
|
3,877
|
|
|
4
|
%
|
SPOT
|
5,394
|
|
|
5
|
%
|
|
5,321
|
|
|
5
|
%
|
||
Simplex
|
5,243
|
|
|
5
|
%
|
|
3,765
|
|
|
4
|
%
|
||
IGO
|
779
|
|
|
1
|
%
|
|
843
|
|
|
1
|
%
|
||
Other
|
17
|
|
|
—
|
%
|
|
(14
|
)
|
|
—
|
%
|
||
Total Equipment Revenues
|
$
|
14,187
|
|
|
13
|
%
|
|
$
|
13,792
|
|
|
14
|
%
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Average number of subscribers for the year ended:
|
|
|
|
|
|
||
Duplex
|
72,443
|
|
|
75,925
|
|
||
SPOT
|
285,683
|
|
|
272,006
|
|
||
Simplex
|
313,553
|
|
|
300,055
|
|
||
IGO
|
37,165
|
|
|
38,618
|
|
||
Other
|
1,478
|
|
|
2,215
|
|
||
Total
|
710,322
|
|
|
688,819
|
|
||
|
|
|
|
||||
ARPU (monthly):
|
|
|
|
|
|||
Duplex
|
$
|
43.29
|
|
|
$
|
34.96
|
|
SPOT
|
13.25
|
|
|
11.69
|
|
||
Simplex
|
2.91
|
|
|
2.78
|
|
||
IGO
|
2.39
|
|
|
1.96
|
|
|
Year Ended
December 31, 2016 |
|
Year Ended
December 31, 2015 |
||||||||||
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||
Service Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||
Duplex
|
$
|
31,848
|
|
|
33
|
%
|
|
$
|
27,367
|
|
|
30
|
%
|
SPOT
|
38,157
|
|
|
40
|
%
|
|
33,495
|
|
|
37
|
%
|
||
Simplex
|
10,005
|
|
|
10
|
%
|
|
9,088
|
|
|
10
|
%
|
||
IGO
|
907
|
|
|
1
|
%
|
|
799
|
|
|
1
|
%
|
||
Other
|
2,152
|
|
|
2
|
%
|
|
3,375
|
|
|
4
|
%
|
||
Total Service Revenues
|
$
|
83,069
|
|
|
86
|
%
|
|
$
|
74,124
|
|
|
82
|
%
|
|
Year Ended
December 31, 2016 |
|
Year Ended
December 31, 2015 |
||||||||||
|
Revenue
|
|
% of Total
Revenue
|
|
Revenue
|
|
% of Total
Revenue
|
||||||
Equipment Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||
Duplex
|
$
|
3,877
|
|
|
4
|
%
|
|
$
|
4,911
|
|
|
5
|
%
|
SPOT
|
5,321
|
|
|
5
|
%
|
|
5,059
|
|
|
6
|
%
|
||
Simplex
|
3,765
|
|
|
4
|
%
|
|
5,327
|
|
|
6
|
%
|
||
IGO
|
843
|
|
|
1
|
%
|
|
971
|
|
|
1
|
%
|
||
Other
|
(14
|
)
|
|
—
|
|
|
98
|
|
|
—
|
|
||
Total Equipment Revenues
|
$
|
13,792
|
|
|
14
|
%
|
|
$
|
16,366
|
|
|
18
|
%
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Average number of subscribers for the year ended:
|
|
|
|
|
|
||
Duplex
|
75,925
|
|
|
72,205
|
|
||
SPOT
|
272,006
|
|
|
253,108
|
|
||
Simplex
|
300,055
|
|
|
295,363
|
|
||
IGO
|
38,618
|
|
|
38,847
|
|
||
Other
|
2,215
|
|
|
4,252
|
|
||
Total
|
688,819
|
|
|
663,775
|
|
||
|
|
|
|
||||
ARPU (monthly):
|
|
|
|
|
|||
Duplex
|
$
|
34.96
|
|
|
$
|
31.59
|
|
SPOT
|
11.69
|
|
|
11.03
|
|
||
Simplex
|
2.78
|
|
|
2.56
|
|
||
IGO
|
1.96
|
|
|
1.71
|
|
|
|
Year Ended December 31,
|
||||||||||
Statements of Cash Flows
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by operating activities
|
|
$
|
13,857
|
|
|
$
|
8,813
|
|
|
$
|
2,162
|
|
Net cash used in investing activities
|
|
(20,776
|
)
|
|
(24,551
|
)
|
|
(33,478
|
)
|
|||
Net cash provided by financing activities
|
|
63,790
|
|
|
18,502
|
|
|
33,276
|
|
|||
Effect of exchange rate changes on cash
|
|
195
|
|
|
55
|
|
|
(1,605
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
$
|
57,066
|
|
|
$
|
2,819
|
|
|
$
|
355
|
|
Contractual Obligations:
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt obligations (1)
|
|
$
|
79,230
|
|
|
$
|
94,870
|
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
|
$
|
94,520
|
|
|
$
|
206,351
|
|
|
$
|
674,971
|
|
Interest on long-term debt (2)
|
|
24,248
|
|
|
21,599
|
|
|
17,312
|
|
|
11,687
|
|
|
5,001
|
|
|
—
|
|
|
79,847
|
|
|||||||
Network purchase obligations (3)
|
|
1,157
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,157
|
|
|||||||
Contract termination charge (4)
|
|
21,002
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,002
|
|
|||||||
Operating lease obligations
|
|
1,241
|
|
|
357
|
|
|
313
|
|
|
168
|
|
|
—
|
|
|
—
|
|
|
2,079
|
|
|||||||
Pension obligations
|
|
988
|
|
|
1,010
|
|
|
1,012
|
|
|
1,013
|
|
|
1,038
|
|
|
5,517
|
|
|
10,578
|
|
|||||||
Total
|
|
$
|
127,866
|
|
|
$
|
117,836
|
|
|
$
|
118,637
|
|
|
$
|
112,868
|
|
|
$
|
100,559
|
|
|
$
|
211,868
|
|
|
$
|
789,634
|
|
(1)
|
These amounts include principal payments and payment in kind ("PIK") interest. Interest on the 2013 8.00% Notes 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. The maturity date of the 2013 8.00% Notes is April 1, 2028; however, the holders of these notes can require us to purchase any or all of the notes at par in cash on April 1, 2018. For purposes of this schedule, we show these notes as due in 2018 because of this put option. Interest on the Loan Agreement with Thermo accrues at 12% per annum and is capitalized and added to the total outstanding principal in lieu of cash payments. Principal and interest under the Loan Agreement with Thermo become due
|
(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 2013 8.00% Notes 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. In December 2016, we formally accepted all contract deliverables under our agreement with Hughes and all contract deliverables for the IMS solution under our agreement with Ericsson, with the exception of a punch list of items. Amounts included in 2018 reflect primarily the remaining payments for additional work under the core contract with Ericsson of approximately
$0.5 million
. We intend to continue to purchase maintenance and warranties from Hughes and Ericsson for our second-generation network. However, there is no contractual obligation at this time for future annual payments; therefore, we have excluded maintenance and warranty payments for these contracts in the table above. 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
2018
above, although the timing of any payment is indefinite and indeterminable. For purposes of the table above, we converted the termination charge to U.S. dollars using the exchange rate in effect at
December 31, 2017
. See
Note 7: Contingencies
in our Consolidated Financial Statements for further discussion.
|
|
Page
|
Audited Consolidated Financial Statements of Globalstar, Inc.
|
|
Report of Crowe Horwath LLP, independent registered public accounting firm
|
|
Consolidated balance sheets at December 31, 2017 and 2016
|
|
Consolidated statements of operations for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated statements of comprehensive income (loss) for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated statements of stockholders’ equity for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated statements of cash flows for the years ended December 31, 2017, 2016 and 2015
|
|
Notes to Consolidated Financial Statements
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
41,644
|
|
|
$
|
10,230
|
|
Restricted cash
|
63,635
|
|
|
—
|
|
||
Accounts receivable, net of allowance of $3,610 and $3,966, respectively
|
17,113
|
|
|
15,219
|
|
||
Inventory
|
7,273
|
|
|
8,093
|
|
||
Prepaid expenses and other current assets
|
6,745
|
|
|
4,588
|
|
||
Total current assets
|
136,410
|
|
|
38,130
|
|
||
Property and equipment, net
|
971,119
|
|
|
1,039,719
|
|
||
Restricted cash
|
—
|
|
|
37,983
|
|
||
Intangible and other assets, net of accumulated amortization of $7,314 and $7,021, respectively
|
21,736
|
|
|
16,782
|
|
||
Total assets
|
$
|
1,129,265
|
|
|
$
|
1,132,614
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Current portion of long-term debt
|
$
|
79,215
|
|
|
$
|
75,755
|
|
Debt restructuring fees
|
—
|
|
|
20,795
|
|
||
Accounts payable
|
6,048
|
|
|
7,499
|
|
||
Accrued contract termination charge
|
21,002
|
|
|
18,451
|
|
||
Accrued expenses
|
20,754
|
|
|
23,162
|
|
||
Payables to affiliates
|
225
|
|
|
309
|
|
||
Derivative liabilities
|
1,326
|
|
|
—
|
|
||
Deferred revenue
|
31,747
|
|
|
26,479
|
|
||
Total current liabilities
|
160,317
|
|
|
172,450
|
|
||
Long-term debt, less current portion
|
434,651
|
|
|
500,524
|
|
||
Employee benefit obligations
|
4,389
|
|
|
4,883
|
|
||
Derivative liabilities
|
226,659
|
|
|
281,171
|
|
||
Deferred revenue
|
6,052
|
|
|
5,877
|
|
||
Other non-current liabilities
|
5,973
|
|
|
5,890
|
|
||
Total non-current liabilities
|
677,724
|
|
|
798,345
|
|
||
|
|
|
|
||||
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, 2017 and 2016, respectively
|
—
|
|
|
—
|
|
||
Series A Preferred Convertible Stock of $0.0001 par value; one share authorized and none issued and outstanding at December 31, 2017 and 2016, respectively
|
—
|
|
|
—
|
|
||
Voting Common Stock of $0.0001 par value; 1,500,000,000 and 1,200,000,000 shares authorized; 1,261,949,123 and 972,602,824 shares issued and outstanding at December 31, 2017 and 2016, respectively
|
126
|
|
|
97
|
|
||
Nonvoting Common Stock of $0.0001 par value; 400,000,000 shares authorized; none and 134,008,656 shares issued and outstanding at December 31, 2017 and 2016, respectively
|
—
|
|
|
13
|
|
||
Additional paid-in capital
|
1,869,339
|
|
|
1,649,315
|
|
||
Accumulated other comprehensive loss
|
(6,939
|
)
|
|
(5,378
|
)
|
||
Retained deficit
|
(1,571,302
|
)
|
|
(1,482,228
|
)
|
||
Total stockholders’ equity
|
291,224
|
|
|
161,819
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,129,265
|
|
|
$
|
1,132,614
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||
Service revenues
|
$
|
98,473
|
|
|
$
|
83,069
|
|
|
$
|
74,124
|
|
Subscriber equipment sales
|
14,187
|
|
|
13,792
|
|
|
16,366
|
|
|||
Total revenue
|
112,660
|
|
|
96,861
|
|
|
90,490
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of services (exclusive of depreciation, amortization and accretion shown separately below)
|
37,022
|
|
|
31,908
|
|
|
30,615
|
|
|||
Cost of subscriber equipment sales
|
9,944
|
|
|
9,907
|
|
|
11,814
|
|
|||
Cost of subscriber equipment sales - reduction in the value of inventory
|
843
|
|
|
—
|
|
|
—
|
|
|||
Marketing, general and administrative
|
39,099
|
|
|
40,982
|
|
|
37,418
|
|
|||
Reduction in the value of long-lived assets
|
17,040
|
|
|
350
|
|
|
—
|
|
|||
Depreciation, amortization and accretion
|
77,498
|
|
|
77,390
|
|
|
77,247
|
|
|||
Total operating expenses
|
181,446
|
|
|
160,537
|
|
|
157,094
|
|
|||
Loss from operations
|
(68,786
|
)
|
|
(63,676
|
)
|
|
(66,604
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||
Loss on extinguishment of debt
|
(6,306
|
)
|
|
—
|
|
|
(2,254
|
)
|
|||
Gain (loss) on equity issuance
|
2,670
|
|
|
2,400
|
|
|
(6,663
|
)
|
|||
Interest income and expense, net of amounts capitalized
|
(34,771
|
)
|
|
(35,952
|
)
|
|
(35,854
|
)
|
|||
Derivative gain (loss)
|
21,182
|
|
|
(41,531
|
)
|
|
181,860
|
|
|||
Other
|
(2,873
|
)
|
|
(430
|
)
|
|
3,229
|
|
|||
Total other income (expense)
|
(20,098
|
)
|
|
(75,513
|
)
|
|
140,318
|
|
|||
Income (loss) before income taxes
|
(88,884
|
)
|
|
(139,189
|
)
|
|
73,714
|
|
|||
Income tax expense (benefit)
|
190
|
|
|
(6,543
|
)
|
|
1,392
|
|
|||
Net income (loss)
|
$
|
(89,074
|
)
|
|
$
|
(132,646
|
)
|
|
$
|
72,322
|
|
Income (loss) per common share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
(0.08
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
0.07
|
|
Diluted
|
(0.08
|
)
|
|
(0.12
|
)
|
|
0.07
|
|
|||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|||
Basic
|
1,166,581
|
|
|
1,064,443
|
|
|
1,020,149
|
|
|||
Diluted
|
1,166,581
|
|
|
1,064,443
|
|
|
1,230,394
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
(89,074
|
)
|
|
$
|
(132,646
|
)
|
|
$
|
72,322
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|||
Defined benefit pension plan liability adjustment
|
384
|
|
|
221
|
|
|
787
|
|
|||
Net foreign currency translation adjustment
|
(1,945
|
)
|
|
(766
|
)
|
|
(2,722
|
)
|
|||
Total other comprehensive income (loss)
|
(1,561
|
)
|
|
(545
|
)
|
|
(1,935
|
)
|
|||
Total comprehensive income (loss)
|
$
|
(90,635
|
)
|
|
$
|
(133,191
|
)
|
|
$
|
70,387
|
|
|
Common
Shares
|
Common
Stock
Amount
|
Additional
Paid-In
Capital
|
Accumulated Other Comprehensive Income (Loss)
|
Retained
Deficit
|
Total
|
|||||||||||
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
2013 8.00% Notes
|
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
|
|
Net issuance of restricted stock awards and recognition of stock-based compensation
|
3,246
|
|
—
|
|
4,136
|
|
—
|
|
—
|
|
4,136
|
|
|||||
Contribution of services
|
—
|
|
—
|
|
548
|
|
—
|
|
—
|
|
548
|
|
|||||
Issuance of stock for employee stock option exercises
|
177
|
|
—
|
|
97
|
|
—
|
|
—
|
|
97
|
|
|||||
Issuance of stock through employee stock purchase plan
|
723
|
|
—
|
|
1,086
|
|
—
|
|
—
|
|
1,086
|
|
|||||
Issuance of stock to Thermo from exercise of warrants
|
13,620
|
|
2
|
|
2,615
|
|
—
|
|
—
|
|
2,617
|
|
|||||
Issuance of stock to Terrapin
|
49,072
|
|
5
|
|
47,995
|
|
—
|
|
—
|
|
48,000
|
|
|||||
Issuance of stock for legal settlement
|
1,316
|
|
—
|
|
1,395
|
|
—
|
|
—
|
|
1,395
|
|
|||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
(545
|
)
|
—
|
|
(545
|
)
|
|||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(132,646
|
)
|
(132,646
|
)
|
|||||
Balances – December 31, 2016
|
1,106,611
|
|
$
|
110
|
|
$
|
1,649,315
|
|
$
|
(5,378
|
)
|
$
|
(1,482,228
|
)
|
$
|
161,819
|
|
Net issuance of restricted stock awards and recognition of stock-based compensation
|
3,088
|
|
1
|
|
4,040
|
|
—
|
|
—
|
|
4,041
|
|
|||||
Contribution of services
|
—
|
|
—
|
|
548
|
|
—
|
|
—
|
|
548
|
|
|||||
Issuance of stock for employee stock option exercises
|
102
|
|
—
|
|
71
|
|
—
|
|
—
|
|
71
|
|
|||||
Issuance of stock through employee stock purchase plan
|
775
|
|
—
|
|
1,151
|
|
—
|
|
—
|
|
1,151
|
|
|||||
Issuance of stock to Terrapin
|
8,867
|
|
1
|
|
11,999
|
|
—
|
|
—
|
|
12,000
|
|
|||||
Issuance of stock to Thermo from exercise of warrants
|
24,571
|
|
2
|
|
243
|
|
—
|
|
—
|
|
245
|
|
|||||
Issuance of stock to Thermo for equity financing
|
17,838
|
|
2
|
|
32,998
|
|
—
|
|
—
|
|
33,000
|
|
|||||
Common stock issued in connection with conversions of 2013 8.00% Notes
|
26,411
|
|
3
|
|
53,614
|
|
—
|
|
—
|
|
53,617
|
|
|||||
Issuance of stock for legal settlement
|
321
|
|
—
|
|
453
|
|
—
|
|
—
|
|
453
|
|
|||||
Issuance of stock for public offering
|
73,365
|
|
7
|
|
114,686
|
|
—
|
|
—
|
|
114,693
|
|
|||||
Investment in business
|
—
|
|
—
|
|
221
|
|
—
|
|
—
|
|
221
|
|
|||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
(1,561
|
)
|
—
|
|
(1,561
|
)
|
|||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(89,074
|
)
|
(89,074
|
)
|
|||||
Balances – December 31, 2017
|
1,261,949
|
|
$
|
126
|
|
$
|
1,869,339
|
|
$
|
(6,939
|
)
|
$
|
(1,571,302
|
)
|
$
|
291,224
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
$
|
(89,074
|
)
|
|
$
|
(132,646
|
)
|
|
$
|
72,322
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation, amortization, and accretion
|
77,498
|
|
|
77,390
|
|
|
77,247
|
|
|||
Change in fair value of derivative assets and liabilities
|
(21,182
|
)
|
|
41,531
|
|
|
(181,860
|
)
|
|||
Stock-based compensation expense
|
5,088
|
|
|
4,858
|
|
|
2,955
|
|
|||
Amortization of deferred financing costs
|
8,096
|
|
|
9,165
|
|
|
9,722
|
|
|||
Reduction in the value of long-lived assets and inventory
|
17,883
|
|
|
350
|
|
|
—
|
|
|||
Provision for bad debts
|
1,256
|
|
|
1,256
|
|
|
3,357
|
|
|||
Noncash interest and accretion expense
|
11,043
|
|
|
11,195
|
|
|
11,103
|
|
|||
Loss on extinguishment of debt
|
6,306
|
|
|
—
|
|
|
2,254
|
|
|||
Change in fair value related to equity issuance
|
(2,670
|
)
|
|
(2,400
|
)
|
|
6,663
|
|
|||
Noncash expense related to legal settlement
|
—
|
|
|
1,094
|
|
|
—
|
|
|||
Reversal of uncertain tax position
|
—
|
|
|
(6,317
|
)
|
|
—
|
|
|||
Unrealized foreign currency (gain) loss
|
2,159
|
|
|
144
|
|
|
(3,597
|
)
|
|||
Other, net
|
(260
|
)
|
|
1,154
|
|
|
(11
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
(2,983
|
)
|
|
(2,196
|
)
|
|
(3,454
|
)
|
|||
Inventory
|
50
|
|
|
4,571
|
|
|
1,118
|
|
|||
Prepaid expenses and other current assets
|
(2,504
|
)
|
|
(488
|
)
|
|
326
|
|
|||
Other assets
|
(699
|
)
|
|
(469
|
)
|
|
(774
|
)
|
|||
Accounts payable and accrued expenses
|
(1,114
|
)
|
|
102
|
|
|
702
|
|
|||
Payables to affiliates
|
(84
|
)
|
|
(307
|
)
|
|
135
|
|
|||
Other non-current liabilities
|
105
|
|
|
(1,163
|
)
|
|
1,332
|
|
|||
Deferred revenue
|
4,943
|
|
|
1,989
|
|
|
2,622
|
|
|||
Net cash provided by operating activities
|
13,857
|
|
|
8,813
|
|
|
2,162
|
|
|||
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|||
Second-generation network costs (including interest)
|
(11,910
|
)
|
|
(13,170
|
)
|
|
(25,195
|
)
|
|||
Property and equipment additions
|
(5,525
|
)
|
|
(9,385
|
)
|
|
(5,523
|
)
|
|||
Purchase of intangible assets
|
(3,796
|
)
|
|
(1,996
|
)
|
|
(2,520
|
)
|
|||
Investment in businesses
|
455
|
|
|
—
|
|
|
(240
|
)
|
|||
Net cash used in investing activities
|
(20,776
|
)
|
|
(24,551
|
)
|
|
(33,478
|
)
|
|||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|||
Principal payments of the Facility Agreement
|
(75,755
|
)
|
|
(32,835
|
)
|
|
(6,450
|
)
|
|||
Proceeds from common stock offering
|
114,993
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from Thermo Common Stock Purchase Agreement
|
33,000
|
|
|
—
|
|
|
—
|
|
|||
Payment of debt restructuring fee
|
(20,795
|
)
|
|
—
|
|
|
—
|
|
|||
Payments for debt and equity issuance costs
|
(654
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of stock to Terrapin
|
12,000
|
|
|
48,000
|
|
|
39,000
|
|
|||
Proceeds from issuance of common stock and exercise of options and warrants
|
1,001
|
|
|
3,337
|
|
|
726
|
|
|||
Net cash provided by financing activities
|
63,790
|
|
|
18,502
|
|
|
33,276
|
|
|||
Effect of exchange rate changes on cash
|
195
|
|
|
55
|
|
|
(1,605
|
)
|
|||
Net increase in cash, cash equivalents and restricted cash
|
57,066
|
|
|
2,819
|
|
|
355
|
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
48,213
|
|
|
45,394
|
|
|
45,039
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
$
|
105,279
|
|
|
$
|
48,213
|
|
|
$
|
45,394
|
|
|
|
|
|
|
|
||||||
|
As of December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Reconciliation of cash, cash equivalents and restricted cash
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
41,644
|
|
|
$
|
10,230
|
|
|
$
|
7,476
|
|
Restricted cash (See Note 3 for further discussion on restrictions)
|
63,635
|
|
|
37,983
|
|
|
37,918
|
|
|||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows
|
$
|
105,279
|
|
|
$
|
48,213
|
|
|
$
|
45,394
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Cash paid for:
|
|
|
|
|
|
|
|
|
|||
Interest
|
$
|
24,075
|
|
|
$
|
21,783
|
|
|
$
|
19,683
|
|
Income taxes
|
115
|
|
|
171
|
|
|
445
|
|
|||
|
|
|
|
|
|
||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Supplemental disclosure of non-cash financing and investing activities:
|
|
|
|
|
|
||||||
Increase in capitalized accrued interest for second-generation network costs
|
$
|
4,317
|
|
|
$
|
3,235
|
|
|
$
|
2,247
|
|
Increase in accrued second-generation network costs
|
—
|
|
|
1,616
|
|
|
—
|
|
|||
Capitalized accretion of debt discount and amortization of prepaid financing costs
|
5,089
|
|
|
4,401
|
|
|
3,346
|
|
|||
Payments made in convertible notes and common stock
|
—
|
|
|
—
|
|
|
921
|
|
|||
Fair value of common stock issued to vendor for payment of invoices
|
—
|
|
|
—
|
|
|
16,683
|
|
|||
Increase of principal amount of Loan Agreement with Thermo
|
—
|
|
|
—
|
|
|
6,000
|
|
|||
Issuance of common stock for legal settlement
|
453
|
|
|
1,395
|
|
|
—
|
|
|||
Principal amount of debt converted into common stock
|
15,986
|
|
|
—
|
|
|
6,491
|
|
|||
Reduction of debt discount and issuance costs due to note conversions
|
1,194
|
|
|
—
|
|
|
2,085
|
|
|||
Fair value of common stock issued upon conversion of debt
|
53,614
|
|
|
—
|
|
|
26,669
|
|
|||
Reduction in derivative liability due to conversion of debt
|
32,000
|
|
|
—
|
|
|
20,008
|
|
•
|
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, including certain SPOT and Simplex products.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
$
|
3,966
|
|
|
$
|
5,270
|
|
|
$
|
4,788
|
|
Provision, net of recoveries
|
1,256
|
|
|
1,256
|
|
|
2,782
|
|
|||
Write-offs and other adjustments
|
(1,612
|
)
|
|
(2,560
|
)
|
|
(2,300
|
)
|
|||
Balance at end of period
|
$
|
3,610
|
|
|
$
|
3,966
|
|
|
$
|
5,270
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Weighted
Average Useful Life (in years) |
|
Cost
|
|
Accumulated Amortization
|
|
Carrying Amount
|
|
Cost
|
|
Accumulated Amortization
|
|
Carrying Amount
|
||||||||||||
Developed technology
|
9
|
|
$
|
6,108
|
|
|
$
|
(4,958
|
)
|
|
$
|
1,150
|
|
|
$
|
6,003
|
|
|
$
|
(4,740
|
)
|
|
$
|
1,263
|
|
Customer relationships
|
8
|
|
2,100
|
|
|
(2,100
|
)
|
|
—
|
|
|
2,100
|
|
|
(2,081
|
)
|
|
19
|
|
||||||
Regulatory authorizations
|
7
|
|
878
|
|
|
(56
|
)
|
|
822
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Trade name
|
1
|
|
200
|
|
|
(200
|
)
|
|
—
|
|
|
200
|
|
|
(200
|
)
|
|
—
|
|
||||||
|
|
|
$
|
9,286
|
|
|
$
|
(7,314
|
)
|
|
$
|
1,972
|
|
|
$
|
8,303
|
|
|
$
|
(7,021
|
)
|
|
$
|
1,282
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Globalstar System:
|
|
|
|
|
|
||
Space component
|
|
|
|
|
|
||
First and second-generation satellites in service
|
$
|
1,195,426
|
|
|
$
|
1,211,090
|
|
Prepaid long-lead items
|
—
|
|
|
17,040
|
|
||
Second-generation satellite, on-ground spare
|
32,481
|
|
|
32,481
|
|
||
Ground component
|
48,710
|
|
|
48,400
|
|
||
Construction in progress:
|
|
|
|
|
|||
Space component
|
3
|
|
|
81
|
|
||
Ground component
|
227,167
|
|
|
207,127
|
|
||
Next-generation software upgrades
|
12,414
|
|
|
10,223
|
|
||
Other
|
2,572
|
|
|
2,299
|
|
||
Total Globalstar System
|
1,518,773
|
|
|
1,528,741
|
|
||
Internally developed and purchased software
|
16,132
|
|
|
15,005
|
|
||
Equipment
|
9,966
|
|
|
9,875
|
|
||
Land and buildings
|
3,322
|
|
|
3,330
|
|
||
Leasehold improvements
|
1,969
|
|
|
1,893
|
|
||
Total property and equipment
|
1,550,162
|
|
|
1,558,844
|
|
||
Accumulated depreciation
|
(579,043
|
)
|
|
(519,125
|
)
|
||
Total property and equipment, net
|
$
|
971,119
|
|
|
$
|
1,039,719
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Interest cost eligible to be capitalized
|
$
|
51,212
|
|
|
$
|
48,095
|
|
|
$
|
42,749
|
|
Interest cost recorded in interest income (expense), net
|
(33,319
|
)
|
|
(34,108
|
)
|
|
(32,609
|
)
|
|||
Net interest capitalized
|
$
|
17,893
|
|
|
$
|
13,987
|
|
|
$
|
10,140
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Depreciation Expense
|
$
|
77,197
|
|
|
$
|
76,960
|
|
|
$
|
76,711
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Principal
Amount |
|
Unamortized Discount and Deferred Financing Costs
|
|
Carrying
Value |
|
Principal
Amount |
|
Unamortized Discount and Deferred Financing Costs
|
|
Carrying
Value |
||||||||||||
Facility Agreement
|
$
|
467,256
|
|
|
$
|
34,459
|
|
|
$
|
432,797
|
|
|
$
|
543,011
|
|
|
$
|
45,651
|
|
|
$
|
497,360
|
|
Loan Agreement with Thermo
|
106,054
|
|
|
26,333
|
|
|
79,721
|
|
|
93,962
|
|
|
29,615
|
|
|
64,347
|
|
||||||
8.00% Convertible Senior Notes Issued in 2013
|
1,348
|
|
|
—
|
|
|
1,348
|
|
|
17,126
|
|
|
2,554
|
|
|
14,572
|
|
||||||
Total Debt
|
574,658
|
|
|
60,792
|
|
|
513,866
|
|
|
654,099
|
|
|
77,820
|
|
|
576,279
|
|
||||||
Less: Current Portion
|
79,215
|
|
|
—
|
|
|
79,215
|
|
|
75,755
|
|
|
—
|
|
|
75,755
|
|
||||||
Long-Term Debt
|
$
|
495,443
|
|
|
$
|
60,792
|
|
|
$
|
434,651
|
|
|
$
|
578,344
|
|
|
$
|
77,820
|
|
|
$
|
500,524
|
|
•
|
The Company's capital expenditures do not exceed
$15.0 million
per year;
|
•
|
The Company's expenditures in connection with its spectrum rights must be the lesser of (1)
$20.0 million
and (2)
20%
of the proceeds of the aggregate of any equity the Company raises from January 1, 2017 through December 31, 2019;
|
•
|
The Company maintains at all times a minimum liquidity balance of
$4.0 million
;
|
•
|
The Company achieves for each period the following minimum adjusted consolidated EBITDA (as defined in the Facility Agreement) (amounts in thousands):
|
Period
|
|
Minimum Amount
|
||
7/1/18-12/31/18
|
|
$
|
47,694
|
|
1/1/19-6/30/19
|
|
$
|
45,509
|
|
7/1/19-12/31/19
|
|
$
|
53,830
|
|
•
|
The minimum adjusted consolidated EBITDA Minimum Amount changes semi-annually through December 31, 2022, for which measurement period the Minimum Amount is
$65.7 million
.
|
•
|
The Company maintains a minimum debt service coverage ratio of
1.00
:1;
|
•
|
The Company maintains a maximum net debt to adjusted consolidated EBITDA ratio of
5.00
:1 for the December 31, 2018 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 Company maintains a minimum interest coverage ratio of
3.50
:1 for the December 31, 2018 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; and
|
•
|
The Company makes mandatory prepayments 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 below and the excluded Purchase Agreement Amounts, as defined in the Facility Agreement).
|
•
|
The amendments to the Facility Agreement defer most financial covenants until the measurement period ending December 31, 2018; extend to the measurement period ending December 31, 2019 the date through which Equity Cure Contributions can be made; eliminate the requirement of the Company to redeem in full the 2013
8.00%
Notes; defer mandatory prepayments from qualifying equity raises until January 1, 2020; and revise the definition of the debt service reserve account required balance after October 30, 2017 to mean an amount equal to the Debt Service (as defined in the 2017 GARA) amount due on the next payment date.
|
•
|
The Company agreed to raise at least
$159.0 million
in equity, which includes
$12.0 million
previously raised from its common stock purchase agreement with Terrapin Opportunity, L.P. ("Terrapin") in January 2017. The Company was required to raise a portion of the total
$159.0 million
by June 30, 2017 and the remaining amount no later than October 30, 2017. The Company was required to raise approximately
$33.0 million
as of June 30, 2017, which included amounts for the Company's outstanding restructuring fees, insurance premiums to BPIFAE and principal and interest due under the Facility Agreement as of June 30, 2017. This amount was raised pursuant to the Common Stock Purchase Agreement entered into between the Company and Thermo on June 30, 2017, as discussed in
Note 9: Related Party Transactions
. In October 2017, the Company satisfied the remaining equity requirement by completing a common stock offering that generated net proceeds of approximately
$115.0 million
(after deducting underwriter commissions and estimated offering expenses), as discussed further below. The Company is required to deposit
80%
of any equity proceeds raised through December 31, 2019 (including those funds required to be raised in 2017) into a restricted account, separate from the debt service reserve account discussed above, that may only be used to pay obligations under the Facility Agreement.
|
•
|
The 2017 GARA required Thermo to fund or backstop the amounts required to be raised as of June 30, 2017. The total
$33.0 million
was raised pursuant to the Common Stock Purchase Agreement with Thermo, discussed in
Note 9: Related Party Transactions
|
•
|
The Company agreed to limit expenditures in connection with its spectrum rights to be the lesser of (1)
$20.0 million
and (2)
20%
of the proceeds of the aggregate of any equity the Company raises from January 1, 2017 through December 31, 2019.
|
•
|
The Company agreed to pay an amendment fee to the agent and lenders in the aggregate amount of
$0.3 million
and accelerated the payment of the restructuring fee and insurance premium of approximately
$20.8
million, which was previously due December 31, 2017 and accrued as a current liability on the Company's consolidated balance sheet.
|
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
|
|
||
Year Ended December 31, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Year Ended December 31, 2017
|
|
15,986
|
|
|
26,411
|
|
|
6,306
|
|
||
Total
|
|
$
|
55,387
|
|
|
98,514
|
|
|
$
|
48,384
|
|
2018
|
79,215
|
|
|
2019
|
94,870
|
|
|
2020
|
100,000
|
|
|
2021
|
100,000
|
|
|
2022
|
94,519
|
|
|
Thereafter
|
106,054
|
|
|
Total
|
$
|
574,658
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Derivative assets:
|
|
|
|
|
|
||
Interest rate cap
|
$
|
—
|
|
|
$
|
4
|
|
Total derivative assets
|
$
|
—
|
|
|
$
|
4
|
|
|
|
|
|
||||
Derivative liabilities:
|
|
|
|
|
|||
Compound embedded derivative with the 2013 8.00% Notes
|
$
|
(1,326
|
)
|
|
$
|
(26,664
|
)
|
Compound embedded derivative with the Loan Agreement with Thermo
|
(226,659
|
)
|
|
(254,507
|
)
|
||
Total derivative liabilities
|
$
|
(227,985
|
)
|
|
$
|
(281,171
|
)
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Interest rate cap
|
$
|
(4
|
)
|
|
$
|
(2
|
)
|
|
$
|
(40
|
)
|
Compound embedded derivative with the 2013 8.00% Notes
|
(6,662
|
)
|
|
(461
|
)
|
|
32,829
|
|
|||
Compound embedded derivative with the Loan Agreement with Thermo
|
27,848
|
|
|
(41,068
|
)
|
|
149,071
|
|
|||
Total derivative gain (loss)
|
$
|
21,182
|
|
|
$
|
(41,531
|
)
|
|
$
|
181,860
|
|
|
Fair Value Measurements at December 31, 2017:
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
Balance
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate cap
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total assets measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Compound embedded derivative with the 2013 8.00% Notes
|
—
|
|
|
—
|
|
|
(1,326
|
)
|
|
(1,326
|
)
|
||||
Compound embedded derivative with the Loan Agreement with Thermo
|
—
|
|
|
—
|
|
|
(226,659
|
)
|
|
(226,659
|
)
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(227,985
|
)
|
|
$
|
(227,985
|
)
|
|
December 31, 2017:
|
||||||||
|
Stock Price
Volatility
|
|
Risk-Free Interest Rate
|
|
Conversion Price
|
|
Discount
Rate
|
|
Market Price of Common Stock
|
Compound embedded derivative with the 2013 8.00% Notes
|
78%
|
|
1.4%
|
|
$0.73
|
|
27%
|
|
$1.31
|
Compound embedded derivative with the Loan Agreement with Thermo
|
40 - 77%
|
|
2.2%
|
|
$0.73
|
|
27%
|
|
$1.31
|
|
December 31, 2016:
|
||||||||
|
Stock Price
Volatility
|
|
Risk-Free Interest Rate
|
|
Conversion
Price
|
|
Discount
Rate
|
|
Market Price of Common Stock
|
Compound embedded derivative with the 2013 8.00% Notes
|
100 - 110%
|
|
1.0%
|
|
$0.73
|
|
25%
|
|
$1.58
|
Compound embedded derivative with the Loan Agreement with Thermo
|
40 - 110%
|
|
2.2%
|
|
$0.73
|
|
25%
|
|
$1.58
|
|
Year Ended December 31
|
||||||
|
2017
|
|
2016
|
||||
Balance at beginning of period
|
$
|
(281,171
|
)
|
|
$
|
(239,642
|
)
|
Derivative adjustment related to conversions
|
32,000
|
|
|
—
|
|
||
Unrealized gain (loss), included in derivative gain (loss)
|
21,186
|
|
|
(41,529
|
)
|
||
Balance at end of period
|
$
|
(227,985
|
)
|
|
$
|
(281,171
|
)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying Value
|
|
Estimated Fair Value
|
|
Carrying Value
|
|
Estimated Fair Value
|
||||||||
Loan Agreement with Thermo
|
$
|
79,721
|
|
|
$
|
54,936
|
|
|
$
|
64,347
|
|
|
$
|
47,874
|
|
2013 8.00% Notes
|
1,348
|
|
|
1,295
|
|
|
14,572
|
|
|
14,350
|
|
|
August 24, 2017:
|
|||||||||||||
|
Stock Price
Volatility |
|
Risk-Free
Interest Rate |
|
Note
Conversion Price |
|
Discount Rate
|
|
Market Price of Common Stock
|
|||||
Compound embedded derivative with the 2013 8.00% Notes
|
65
|
%
|
|
1.1
|
%
|
|
0.73
|
|
|
26
|
%
|
|
2.03
|
|
|
Fair Value Measurements at December 31, 2017:
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total Losses
|
||||||||
Property and equipment, net:
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
971,119
|
|
|
$
|
17,040
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
971,119
|
|
|
$
|
17,040
|
|
|
Fair Value Measurements at December 31, 2016:
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total Losses
|
||||||||
Intangibles and other assets, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,782
|
|
|
$
|
350
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,782
|
|
|
$
|
350
|
|
2018
|
$
|
1,241
|
|
2019
|
357
|
|
|
2020
|
313
|
|
|
2021
|
168
|
|
|
2022
|
—
|
|
|
Thereafter
|
—
|
|
|
Total minimum lease payments
|
$
|
2,079
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accrued interest
|
$
|
228
|
|
|
$
|
381
|
|
Accrued liability for potential stock issuance to Hughes
|
—
|
|
|
2,706
|
|
||
Accrued compensation and benefits
|
3,913
|
|
|
3,193
|
|
||
Accrued property and other taxes
|
3,944
|
|
|
4,173
|
|
||
Accrued customer liabilities and deposits
|
4,529
|
|
|
3,907
|
|
||
Accrued professional and other service provider fees
|
3,386
|
|
|
2,544
|
|
||
Accrued commissions
|
1,162
|
|
|
858
|
|
||
Accrued telecommunications expenses
|
876
|
|
|
686
|
|
||
Accrued satellite and ground costs
|
634
|
|
|
2,076
|
|
||
Accrued inventory
|
102
|
|
|
90
|
|
||
Accrued liability for legal settlement
|
—
|
|
|
389
|
|
||
Other accrued expenses
|
1,980
|
|
|
2,159
|
|
||
Total accrued expenses
|
$
|
20,754
|
|
|
$
|
23,162
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
$
|
132
|
|
|
$
|
101
|
|
|
$
|
129
|
|
Provision
|
273
|
|
|
272
|
|
|
279
|
|
|||
Utilization
|
(262
|
)
|
|
(241
|
)
|
|
(307
|
)
|
|||
Balance at end of period
|
$
|
143
|
|
|
$
|
132
|
|
|
$
|
101
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Long-term accrued interest
|
$
|
—
|
|
|
$
|
99
|
|
Asset retirement obligation
|
1,451
|
|
|
1,443
|
|
||
Deferred rent and other deferred expense
|
274
|
|
|
470
|
|
||
Capital lease obligations
|
154
|
|
|
87
|
|
||
Liability related to the Cooperative Endeavor Agreement with the State of Louisiana
|
460
|
|
|
445
|
|
||
Foreign tax contingencies
|
3,634
|
|
|
3,346
|
|
||
Total other non-current liabilities
|
$
|
5,973
|
|
|
$
|
5,890
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Change in projected benefit obligation:
|
|
|
|
|
|
||
Projected benefit obligation, beginning of year
|
$
|
17,778
|
|
|
$
|
17,595
|
|
Service cost
|
195
|
|
|
195
|
|
||
Interest cost
|
722
|
|
|
758
|
|
||
Actuarial loss
|
916
|
|
|
381
|
|
||
Benefits paid
|
(974
|
)
|
|
(1,151
|
)
|
||
Projected benefit obligation, end of year
|
$
|
18,637
|
|
|
$
|
17,778
|
|
Change in fair value of plan assets:
|
|
|
|
|
|
||
Fair value of plan assets, beginning of year
|
$
|
12,895
|
|
|
$
|
12,785
|
|
Return on plan assets
|
1,682
|
|
|
937
|
|
||
Employer contributions
|
645
|
|
|
324
|
|
||
Benefits paid
|
(974
|
)
|
|
(1,151
|
)
|
||
Fair value of plan assets, end of year
|
$
|
14,248
|
|
|
$
|
12,895
|
|
Funded status, end of year-net liability
|
$
|
(4,389
|
)
|
|
$
|
(4,883
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|||
Service cost
|
$
|
195
|
|
|
$
|
195
|
|
|
$
|
111
|
|
Interest cost
|
722
|
|
|
758
|
|
|
744
|
|
|||
Expected return on plan assets
|
(825
|
)
|
|
(808
|
)
|
|
(862
|
)
|
|||
Amortization of unrecognized net actuarial loss
|
443
|
|
|
473
|
|
|
512
|
|
|||
Total net periodic benefit cost
|
$
|
535
|
|
|
$
|
618
|
|
|
$
|
505
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Amounts recognized:
|
|
|
|
|
|
||
Funded status recognized in other non-current liabilities
|
$
|
(4,389
|
)
|
|
$
|
(4,883
|
)
|
Net actuarial loss recognized in accumulated other comprehensive loss
|
5,558
|
|
|
5,942
|
|
||
Net amount recognized in retained deficit
|
$
|
1,169
|
|
|
$
|
1,059
|
|
|
For the Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Benefit obligation assumptions:
|
|
|
|
|
|
|
|
|
Discount rate
|
3.63
|
%
|
|
4.15
|
%
|
|
4.38
|
%
|
Rate of compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Net periodic benefit cost assumptions:
|
|
|
|
|
|
|
|
|
Discount rate
|
4.15
|
%
|
|
4.38
|
%
|
|
4.03
|
%
|
Expected rate of return on plan assets
|
6.50
|
%
|
|
6.50
|
%
|
|
6.50
|
%
|
Rate of compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||
Equity securities
|
58
|
%
|
|
56
|
%
|
Debt securities
|
42
|
|
|
44
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
December 31, 2017
|
||||||||||||||
|
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
|
$
|
6,597
|
|
|
$
|
—
|
|
|
$
|
6,597
|
|
|
$
|
—
|
|
International equity securities
|
1,615
|
|
|
—
|
|
|
1,615
|
|
|
—
|
|
||||
Fixed income securities
|
4,119
|
|
|
—
|
|
|
4,119
|
|
|
—
|
|
||||
Other
|
1,917
|
|
|
—
|
|
|
1,917
|
|
|
—
|
|
||||
Total
|
$
|
14,248
|
|
|
$
|
—
|
|
|
$
|
14,248
|
|
|
$
|
—
|
|
|
December 31, 2016
|
||||||||||||||
|
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
|
$
|
5,705
|
|
|
$
|
—
|
|
|
$
|
5,705
|
|
|
$
|
—
|
|
International equity securities
|
1,460
|
|
|
—
|
|
|
1,460
|
|
|
—
|
|
||||
Fixed income securities
|
4,028
|
|
|
—
|
|
|
4,028
|
|
|
—
|
|
||||
Other
|
1,702
|
|
|
—
|
|
|
1,702
|
|
|
—
|
|
||||
Total
|
$
|
12,895
|
|
|
$
|
—
|
|
|
$
|
12,895
|
|
|
$
|
—
|
|
2018
|
$
|
988
|
|
2019
|
1,010
|
|
|
2020
|
1,012
|
|
|
2021
|
1,013
|
|
|
2022
|
1,038
|
|
|
2023 - 2027
|
5,517
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
Federal tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State tax
|
25
|
|
|
18
|
|
|
34
|
|
|||
Foreign tax
|
165
|
|
|
(6,561
|
)
|
|
(211
|
)
|
|||
Total
|
190
|
|
|
(6,543
|
)
|
|
(177
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal and state tax
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign tax provision (benefit)
|
—
|
|
|
—
|
|
|
1,569
|
|
|||
Total
|
—
|
|
|
—
|
|
|
1,569
|
|
|||
Income tax expense (benefit)
|
$
|
190
|
|
|
$
|
(6,543
|
)
|
|
$
|
1,392
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
U.S. income (loss)
|
$
|
(60,964
|
)
|
|
$
|
(103,494
|
)
|
|
$
|
109,411
|
|
Foreign income (loss)
|
(27,920
|
)
|
|
(35,695
|
)
|
|
(35,697
|
)
|
|||
Total income (loss) before income taxes
|
$
|
(88,884
|
)
|
|
$
|
(139,189
|
)
|
|
$
|
73,714
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Federal and foreign net operating loss and credit carryforwards
|
$
|
464,288
|
|
|
$
|
712,799
|
|
Property and equipment and other long-term assets
|
(45,373
|
)
|
|
(58,379
|
)
|
||
Accruals and reserves
|
12,754
|
|
|
21,071
|
|
||
Deferred tax assets before valuation allowance
|
431,669
|
|
|
675,491
|
|
||
Valuation allowance
|
(431,669
|
)
|
|
(675,491
|
)
|
||
Net deferred income tax assets
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Provision at U.S. statutory rate of 35%
|
$
|
(31,118
|
)
|
|
$
|
(48,722
|
)
|
|
$
|
25,788
|
|
State income taxes, net of federal benefit
|
(1,804
|
)
|
|
(6,193
|
)
|
|
6,597
|
|
|||
Change in valuation allowance (excluding impact of foreign exchange rates)
|
(245,304
|
)
|
|
36,631
|
|
|
(39,686
|
)
|
|||
Effect of foreign income tax at various rates
|
3,739
|
|
|
4,844
|
|
|
4,739
|
|
|||
Permanent differences
|
11,166
|
|
|
10,331
|
|
|
7,046
|
|
|||
Change in unrecognized tax benefit
|
—
|
|
|
(6,313
|
)
|
|
712
|
|
|||
Net change in permanent items due to provision to tax return
|
(3,565
|
)
|
|
3,222
|
|
|
(3,099
|
)
|
|||
Remeasurement of U.S. deferred tax assets (Federal and State)
|
266,864
|
|
|
—
|
|
|
—
|
|
|||
Other (including amounts related to prior year tax matters)
|
212
|
|
|
(343
|
)
|
|
(705
|
)
|
|||
Total
|
$
|
190
|
|
|
$
|
(6,543
|
)
|
|
$
|
1,392
|
|
Gross unrecognized tax benefits at January 1, 2016
|
$
|
3,830
|
|
Gross increase (decrease) based on tax positions related to current year
|
245
|
|
|
Gross increase (decrease) based on tax positions related to prior years
|
—
|
|
|
Lapse of applicable statute of limitations
|
(4,075
|
)
|
|
Gross unrecognized tax benefits at December 31, 2016
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Service:
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
68,556
|
|
|
$
|
56,868
|
|
|
$
|
50,832
|
|
Canada
|
18,296
|
|
|
16,038
|
|
|
14,553
|
|
|||
Europe
|
8,183
|
|
|
6,955
|
|
|
5,738
|
|
|||
Central and South America
|
2,959
|
|
|
2,659
|
|
|
2,407
|
|
|||
Others
|
479
|
|
|
549
|
|
|
594
|
|
|||
Total service revenue
|
98,473
|
|
|
83,069
|
|
|
74,124
|
|
|||
Subscriber equipment:
|
|
|
|
|
|
|
|
|
|||
United States
|
8,431
|
|
|
7,441
|
|
|
7,823
|
|
|||
Canada
|
2,995
|
|
|
3,122
|
|
|
4,339
|
|
|||
Europe
|
1,532
|
|
|
1,533
|
|
|
1,710
|
|
|||
Central and South America
|
1,202
|
|
|
1,413
|
|
|
2,087
|
|
|||
Others
|
27
|
|
|
283
|
|
|
407
|
|
|||
Total subscriber equipment revenue
|
14,187
|
|
|
13,792
|
|
|
16,366
|
|
|||
Total revenue
|
$
|
112,660
|
|
|
$
|
96,861
|
|
|
$
|
90,490
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Long-lived assets:
|
|
|
|
|
|
||
United States
|
$
|
966,611
|
|
|
$
|
1,035,331
|
|
Canada
|
773
|
|
|
670
|
|
||
Europe
|
433
|
|
|
408
|
|
||
Central and South America
|
3,051
|
|
|
3,084
|
|
||
Other
|
251
|
|
|
226
|
|
||
Total long-lived assets
|
$
|
971,119
|
|
|
$
|
1,039,719
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
(89,074
|
)
|
|
$
|
(132,646
|
)
|
|
$
|
72,322
|
|
Effect of dilutive securities:
|
|
|
|
|
|
||||||
2013 8.00% Notes
|
—
|
|
|
—
|
|
|
2,398
|
|
|||
Loan Agreement with Thermo
|
—
|
|
|
—
|
|
|
8,903
|
|
|||
Income (loss) to common stockholders plus assumed conversions
|
$
|
(89,074
|
)
|
|
$
|
(132,646
|
)
|
|
$
|
83,623
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic shares outstanding
|
1,166,581
|
|
|
1,064,443
|
|
|
1,020,149
|
|
|||
Incremental shares from assumed exercises, conversions and other issuance of:
|
|
|
|
|
|
||||||
Stock options, restricted stock, restricted stock units and ESPP
|
—
|
|
|
—
|
|
|
8,559
|
|
|||
2013 8.00% Notes
|
—
|
|
|
—
|
|
|
27,853
|
|
|||
Loan Agreement with Thermo
|
—
|
|
|
—
|
|
|
136,710
|
|
|||
Warrants and other
|
—
|
|
|
—
|
|
|
37,123
|
|
|||
Diluted shares outstanding
|
1,166,581
|
|
|
1,064,443
|
|
|
1,230,394
|
|
|||
Income (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.08
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
0.07
|
|
Diluted
|
$
|
(0.08
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
0.07
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Intrinsic value of stock options exercised
|
$
|
94
|
|
|
$
|
199
|
|
|
$
|
492
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Total compensation expense
|
$
|
1.2
|
|
|
$
|
1.4
|
|
|
$
|
1.2
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Weighted average grant date fair value
|
$
|
1.37
|
|
|
$
|
1.56
|
|
|
$
|
1.84
|
|
|
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Nonvested at January 1, 2017
|
2,528,832
|
|
|
$
|
1.75
|
|
Granted
|
3,344,301
|
|
|
1.37
|
|
|
Vested
|
(2,140,294
|
)
|
|
1.75
|
|
|
Forfeited
|
(102,022
|
)
|
|
1.36
|
|
|
Nonvested at December 31, 2017
|
3,630,817
|
|
|
$
|
1.41
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Total compensation expense
|
$
|
2.3
|
|
|
$
|
2.2
|
|
|
$
|
1.4
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Risk-free interest rate
|
1.00
|
%
|
|
Less than 1.00
|
%
|
||
Expected term (months)
|
6
|
|
|
6
|
|
||
Volatility
|
100
|
%
|
|
108
|
%
|
||
Weighted average grant-date fair value per share
|
$
|
0.61
|
|
|
$
|
0.61
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accumulated minimum pension liability adjustment
|
$
|
(5,558
|
)
|
|
$
|
(5,942
|
)
|
Accumulated net foreign currency translation adjustment
|
(1,381
|
)
|
|
564
|
|
||
Total accumulated other comprehensive loss
|
$
|
(6,939
|
)
|
|
$
|
(5,378
|
)
|
|
|
Quarter Ended
|
||||||||||||||
2017
|
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
||||||||
Total revenue
|
|
$
|
24,652
|
|
|
$
|
28,123
|
|
|
$
|
30,458
|
|
|
$
|
29,427
|
|
Loss from operations
|
|
$
|
(15,202
|
)
|
|
$
|
(12,510
|
)
|
|
$
|
(10,793
|
)
|
|
$
|
(30,281
|
)
|
Net income (loss)
|
|
$
|
(20,161
|
)
|
|
$
|
(98,734
|
)
|
|
$
|
52,406
|
|
|
$
|
(22,585
|
)
|
Basic income (loss) per common share
|
|
$
|
(0.02
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.02
|
)
|
Diluted income (loss) per common share
|
|
$
|
(0.02
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.02
|
)
|
Shares used in basic per share calculations
|
|
1,113,968
|
|
|
1,128,985
|
|
|
1,169,993
|
|
|
1,251,826
|
|
||||
Shares used in diluted per share calculations
|
|
1,113,968
|
|
|
1,128,985
|
|
|
1,345,905
|
|
|
1,251,826
|
|
|
|
Quarter Ended
|
||||||||||||||
2016
|
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
||||||||
Total revenue
|
|
$
|
21,836
|
|
|
$
|
25,086
|
|
|
$
|
25,544
|
|
|
$
|
24,395
|
|
Loss from operations
|
|
$
|
(15,698
|
)
|
|
$
|
(16,411
|
)
|
|
$
|
(14,763
|
)
|
|
$
|
(16,804
|
)
|
Net income (loss)
|
|
$
|
(26,947
|
)
|
|
$
|
14,099
|
|
|
$
|
(2,577
|
)
|
|
$
|
(117,221
|
)
|
Basic income (loss) per common share
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
0.00
|
|
|
$
|
(0.11
|
)
|
Diluted income (loss) per common share
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
0.00
|
|
|
$
|
(0.11
|
)
|
Shares used in basic per share calculations
|
|
1,041,028
|
|
|
1,049,381
|
|
|
1,080,313
|
|
|
1,086,631
|
|
||||
Shares used in diluted per share calculations
|
|
1,041,028
|
|
|
1,249,672
|
|
|
1,080,313
|
|
|
1,086,631
|
|
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
32,864
|
|
|
$
|
4,942
|
|
|
$
|
3,838
|
|
|
$
|
—
|
|
|
$
|
41,644
|
|
Restricted cash
|
63,635
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63,635
|
|
|||||
Accounts receivable, net of allowance
|
7,129
|
|
|
6,524
|
|
|
3,460
|
|
|
—
|
|
|
17,113
|
|
|||||
Intercompany receivables
|
979,942
|
|
|
755,847
|
|
|
64,477
|
|
|
(1,800,266
|
)
|
|
—
|
|
|||||
Inventory
|
1,182
|
|
|
4,610
|
|
|
1,481
|
|
|
—
|
|
|
7,273
|
|
|||||
Prepaid expenses and other current assets
|
3,149
|
|
|
2,414
|
|
|
1,182
|
|
|
—
|
|
|
6,745
|
|
|||||
Total current assets
|
1,087,901
|
|
|
774,337
|
|
|
74,438
|
|
|
(1,800,266
|
)
|
|
136,410
|
|
|||||
Property and equipment, net
|
962,756
|
|
|
3,855
|
|
|
4,503
|
|
|
5
|
|
|
971,119
|
|
|||||
Intercompany notes receivable
|
5,600
|
|
|
—
|
|
|
6,436
|
|
|
(12,036
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
(280,745
|
)
|
|
84,244
|
|
|
38,637
|
|
|
157,864
|
|
|
—
|
|
|||||
Intangibles and other assets, net
|
18,353
|
|
|
47
|
|
|
3,348
|
|
|
(12
|
)
|
|
21,736
|
|
|||||
Total assets
|
$
|
1,793,865
|
|
|
$
|
862,483
|
|
|
$
|
127,362
|
|
|
$
|
(1,654,445
|
)
|
|
$
|
1,129,265
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of long-term debt
|
$
|
79,215
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79,215
|
|
Accounts payable
|
2,257
|
|
|
2,736
|
|
|
1,055
|
|
|
—
|
|
|
6,048
|
|
|||||
Accrued contract termination charge
|
21,002
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,002
|
|
|||||
Accrued expenses
|
7,627
|
|
|
6,331
|
|
|
6,796
|
|
|
—
|
|
|
20,754
|
|
|||||
Intercompany payables
|
711,159
|
|
|
799,565
|
|
|
289,503
|
|
|
(1,800,227
|
)
|
|
—
|
|
|||||
Payables to affiliates
|
225
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
225
|
|
|||||
Derivative liabilities
|
1,326
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,326
|
|
|||||
Deferred revenue
|
1,164
|
|
|
23,282
|
|
|
7,301
|
|
|
—
|
|
|
31,747
|
|
|||||
Total current liabilities
|
823,975
|
|
|
831,914
|
|
|
304,655
|
|
|
(1,800,227
|
)
|
|
160,317
|
|
|||||
Long-term debt, less current portion
|
434,651
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
434,651
|
|
|||||
Employee benefit obligations
|
4,389
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,389
|
|
|||||
Intercompany notes payable
|
6,436
|
|
|
—
|
|
|
5,600
|
|
|
(12,036
|
)
|
|
—
|
|
|||||
Derivative liabilities
|
226,659
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
226,659
|
|
|||||
Deferred revenue
|
5,625
|
|
|
410
|
|
|
17
|
|
|
—
|
|
|
6,052
|
|
|||||
Other non-current liabilities
|
906
|
|
|
325
|
|
|
4,742
|
|
|
—
|
|
|
5,973
|
|
|||||
Total non-current liabilities
|
678,666
|
|
|
735
|
|
|
10,359
|
|
|
(12,036
|
)
|
|
677,724
|
|
|||||
Stockholders' equity (deficit)
|
291,224
|
|
|
29,834
|
|
|
(187,652
|
)
|
|
157,818
|
|
|
291,224
|
|
|||||
Total liabilities and shareholders' equity
|
$
|
1,793,865
|
|
|
$
|
862,483
|
|
|
$
|
127,362
|
|
|
$
|
(1,654,445
|
)
|
|
$
|
1,129,265
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Elimination
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
7,259
|
|
|
$
|
1,327
|
|
|
$
|
1,644
|
|
|
$
|
—
|
|
|
$
|
10,230
|
|
Accounts receivable, net of allowance
|
5,938
|
|
|
6,340
|
|
|
2,941
|
|
|
—
|
|
|
15,219
|
|
|||||
Intercompany receivables
|
897,691
|
|
|
678,707
|
|
|
32,040
|
|
|
(1,608,438
|
)
|
|
—
|
|
|||||
Inventory
|
2,266
|
|
|
4,354
|
|
|
1,473
|
|
|
—
|
|
|
8,093
|
|
|||||
Prepaid expenses and other current assets
|
1,570
|
|
|
955
|
|
|
2,063
|
|
|
—
|
|
|
4,588
|
|
|||||
Total current assets
|
914,724
|
|
|
691,683
|
|
|
40,161
|
|
|
(1,608,438
|
)
|
|
38,130
|
|
|||||
Property and equipment, net
|
1,031,623
|
|
|
3,708
|
|
|
4,384
|
|
|
4
|
|
|
1,039,719
|
|
|||||
Restricted cash
|
37,983
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,983
|
|
|||||
Intercompany notes receivable
|
8,901
|
|
|
—
|
|
|
6,436
|
|
|
(15,337
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
(280,557
|
)
|
|
73,029
|
|
|
36,146
|
|
|
171,382
|
|
|
—
|
|
|||||
Intangible and other assets, net
|
15,259
|
|
|
128
|
|
|
1,407
|
|
|
(12
|
)
|
|
16,782
|
|
|||||
Total assets
|
$
|
1,727,933
|
|
|
$
|
768,548
|
|
|
$
|
88,534
|
|
|
$
|
(1,452,401
|
)
|
|
$
|
1,132,614
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of long-term debt
|
$
|
75,755
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,755
|
|
Debt restructuring fees
|
20,795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,795
|
|
|||||
Accounts payable
|
2,624
|
|
|
3,490
|
|
|
1,385
|
|
|
—
|
|
|
7,499
|
|
|||||
Accrued contract termination charge
|
18,451
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,451
|
|
|||||
Accrued expenses
|
10,573
|
|
|
5,884
|
|
|
6,705
|
|
|
—
|
|
|
23,162
|
|
|||||
Intercompany payables
|
636,336
|
|
|
750,084
|
|
|
221,980
|
|
|
(1,608,400
|
)
|
|
—
|
|
|||||
Payables to affiliates
|
309
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309
|
|
|||||
Deferred revenue
|
1,576
|
|
|
19,304
|
|
|
5,599
|
|
|
—
|
|
|
26,479
|
|
|||||
Total current liabilities
|
766,419
|
|
|
778,762
|
|
|
235,669
|
|
|
(1,608,400
|
)
|
|
172,450
|
|
|||||
Long-term debt, less current portion
|
500,524
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500,524
|
|
|||||
Employee benefit obligations
|
4,883
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,883
|
|
|||||
Intercompany notes payable
|
6,435
|
|
|
—
|
|
|
8,901
|
|
|
(15,336
|
)
|
|
—
|
|
|||||
Derivative liabilities
|
281,171
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
281,171
|
|
|||||
Deferred revenue
|
5,567
|
|
|
299
|
|
|
11
|
|
|
—
|
|
|
5,877
|
|
|||||
Other non-current liabilities
|
1,115
|
|
|
325
|
|
|
4,450
|
|
|
—
|
|
|
5,890
|
|
|||||
Total non-current liabilities
|
799,695
|
|
|
624
|
|
|
13,362
|
|
|
(15,336
|
)
|
|
798,345
|
|
|||||
Stockholders' equity (deficit)
|
161,819
|
|
|
(10,838
|
)
|
|
(160,497
|
)
|
|
171,335
|
|
|
161,819
|
|
|||||
Total liabilities and shareholders' equity (deficit)
|
$
|
1,727,933
|
|
|
$
|
768,548
|
|
|
$
|
88,534
|
|
|
$
|
(1,452,401
|
)
|
|
$
|
1,132,614
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
76,096
|
|
|
$
|
39,347
|
|
|
$
|
54,102
|
|
|
$
|
(71,072
|
)
|
|
$
|
98,473
|
|
Subscriber equipment sales
|
264
|
|
|
11,459
|
|
|
6,141
|
|
|
(3,677
|
)
|
|
14,187
|
|
|||||
Total revenue
|
76,360
|
|
|
50,806
|
|
|
60,243
|
|
|
(74,749
|
)
|
|
112,660
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization and accretion shown separately below)
|
25,664
|
|
|
5,981
|
|
|
10,740
|
|
|
(5,363
|
)
|
|
37,022
|
|
|||||
Cost of subscriber equipment sales
|
97
|
|
|
9,211
|
|
|
4,311
|
|
|
(3,675
|
)
|
|
9,944
|
|
|||||
Cost of subscriber equipment sales - reduction in the value of inventory
|
843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
843
|
|
|||||
Marketing, general and administrative
|
22,928
|
|
|
4,792
|
|
|
77,099
|
|
|
(65,720
|
)
|
|
39,099
|
|
|||||
Reduction in the value of long-lived assets
|
17,040
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,040
|
|
|||||
Depreciation, amortization and accretion
|
76,625
|
|
|
629
|
|
|
244
|
|
|
—
|
|
|
77,498
|
|
|||||
Total operating expenses
|
143,197
|
|
|
20,613
|
|
|
92,394
|
|
|
(74,758
|
)
|
|
181,446
|
|
|||||
Income (loss) from operations
|
(66,837
|
)
|
|
30,193
|
|
|
(32,151
|
)
|
|
9
|
|
|
(68,786
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
(6,306
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,306
|
)
|
|||||
Gain (loss) on equity issuance
|
2,706
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
2,670
|
|
|||||
Interest income and expense, net of amounts capitalized
|
(34,570
|
)
|
|
(8
|
)
|
|
(198
|
)
|
|
5
|
|
|
(34,771
|
)
|
|||||
Derivative gain
|
21,182
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,182
|
|
|||||
Equity in subsidiary earnings (loss)
|
(2,735
|
)
|
|
(13,906
|
)
|
|
—
|
|
|
16,641
|
|
|
—
|
|
|||||
Other
|
(2,514
|
)
|
|
(700
|
)
|
|
345
|
|
|
(4
|
)
|
|
(2,873
|
)
|
|||||
Total other income (expense)
|
(22,237
|
)
|
|
(14,614
|
)
|
|
111
|
|
|
16,642
|
|
|
(20,098
|
)
|
|||||
Income (loss) before income taxes
|
(89,074
|
)
|
|
15,579
|
|
|
(32,040
|
)
|
|
16,651
|
|
|
(88,884
|
)
|
|||||
Income tax expense
|
—
|
|
|
25
|
|
|
165
|
|
|
—
|
|
|
190
|
|
|||||
Net income (loss)
|
$
|
(89,074
|
)
|
|
$
|
15,554
|
|
|
$
|
(32,205
|
)
|
|
$
|
16,651
|
|
|
$
|
(89,074
|
)
|
Defined benefit pension plan liability adjustment
|
384
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
384
|
|
|||||
Net foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
(1,944
|
)
|
|
(1
|
)
|
|
(1,945
|
)
|
|||||
Total comprehensive income (loss)
|
$
|
(88,690
|
)
|
|
$
|
15,554
|
|
|
$
|
(34,149
|
)
|
|
$
|
16,650
|
|
|
$
|
(90,635
|
)
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
70,460
|
|
|
$
|
34,428
|
|
|
$
|
43,130
|
|
|
$
|
(64,949
|
)
|
|
$
|
83,069
|
|
Subscriber equipment sales
|
584
|
|
|
9,380
|
|
|
6,545
|
|
|
(2,717
|
)
|
|
13,792
|
|
|||||
Total revenue
|
71,044
|
|
|
43,808
|
|
|
49,675
|
|
|
(67,666
|
)
|
|
96,861
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization and accretion shown separately below)
|
20,569
|
|
|
5,929
|
|
|
10,976
|
|
|
(5,566
|
)
|
|
31,908
|
|
|||||
Cost of subscriber equipment sales
|
207
|
|
|
7,481
|
|
|
4,931
|
|
|
(2,712
|
)
|
|
9,907
|
|
|||||
Marketing, general and administrative
|
21,691
|
|
|
4,847
|
|
|
73,679
|
|
|
(59,235
|
)
|
|
40,982
|
|
|||||
Reduction in the value of long-lived assets
|
350
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350
|
|
|||||
Depreciation, amortization and accretion
|
75,896
|
|
|
802
|
|
|
1,054
|
|
|
(362
|
)
|
|
77,390
|
|
|||||
Total operating expenses
|
118,713
|
|
|
19,059
|
|
|
90,640
|
|
|
(67,875
|
)
|
|
160,537
|
|
|||||
Income (loss) from operations
|
(47,669
|
)
|
|
24,749
|
|
|
(40,965
|
)
|
|
209
|
|
|
(63,676
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gain (loss) on equity issuance
|
2,789
|
|
|
—
|
|
|
(389
|
)
|
|
—
|
|
|
2,400
|
|
|||||
Interest income and expense, net of amounts capitalized
|
(35,754
|
)
|
|
(24
|
)
|
|
(164
|
)
|
|
(10
|
)
|
|
(35,952
|
)
|
|||||
Derivative loss
|
(41,531
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,531
|
)
|
|||||
Equity in subsidiary earnings
|
(9,803
|
)
|
|
(15,670
|
)
|
|
—
|
|
|
25,473
|
|
|
—
|
|
|||||
Other
|
(678
|
)
|
|
92
|
|
|
17
|
|
|
139
|
|
|
(430
|
)
|
|||||
Total other income (expense)
|
(84,977
|
)
|
|
(15,602
|
)
|
|
(536
|
)
|
|
25,602
|
|
|
(75,513
|
)
|
|||||
Income (loss) before income taxes
|
(132,646
|
)
|
|
9,147
|
|
|
(41,501
|
)
|
|
25,811
|
|
|
(139,189
|
)
|
|||||
Income tax expense (benefit)
|
—
|
|
|
18
|
|
|
(6,561
|
)
|
|
—
|
|
|
(6,543
|
)
|
|||||
Net income (loss)
|
$
|
(132,646
|
)
|
|
$
|
9,129
|
|
|
$
|
(34,940
|
)
|
|
$
|
25,811
|
|
|
$
|
(132,646
|
)
|
Defined benefit pension plan liability adjustment
|
221
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|||||
Net foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
(759
|
)
|
|
(7
|
)
|
|
(766
|
)
|
|||||
Total comprehensive income (loss)
|
$
|
(132,425
|
)
|
|
$
|
9,129
|
|
|
$
|
(35,699
|
)
|
|
$
|
25,804
|
|
|
$
|
(133,191
|
)
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenues
|
$
|
66,024
|
|
|
$
|
30,803
|
|
|
$
|
37,887
|
|
|
$
|
(60,590
|
)
|
|
$
|
74,124
|
|
Subscriber equipment sales
|
808
|
|
|
12,093
|
|
|
8,444
|
|
|
(4,979
|
)
|
|
16,366
|
|
|||||
Total revenue
|
66,832
|
|
|
42,896
|
|
|
46,331
|
|
|
(65,569
|
)
|
|
90,490
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization and accretion shown separately below)
|
18,775
|
|
|
6,474
|
|
|
12,348
|
|
|
(6,982
|
)
|
|
30,615
|
|
|||||
Cost of subscriber equipment sales
|
64
|
|
|
10,580
|
|
|
6,147
|
|
|
(4,977
|
)
|
|
11,814
|
|
|||||
Marketing, general and administrative
|
19,492
|
|
|
5,758
|
|
|
65,660
|
|
|
(53,492
|
)
|
|
37,418
|
|
|||||
Depreciation, amortization and accretion
|
75,313
|
|
|
1,203
|
|
|
1,212
|
|
|
(481
|
)
|
|
77,247
|
|
|||||
Total operating expenses
|
113,644
|
|
|
24,015
|
|
|
85,367
|
|
|
(65,932
|
)
|
|
157,094
|
|
|||||
Income (loss) from operations
|
(46,812
|
)
|
|
18,881
|
|
|
(39,036
|
)
|
|
363
|
|
|
(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
|
(19,467
|
)
|
|
(13,345
|
)
|
|
—
|
|
|
32,812
|
|
|
—
|
|
|||||
Other
|
959
|
|
|
465
|
|
|
1,599
|
|
|
206
|
|
|
3,229
|
|
|||||
Total other income (expense)
|
119,134
|
|
|
(12,907
|
)
|
|
1,063
|
|
|
33,028
|
|
|
140,318
|
|
|||||
Income (loss) before income taxes
|
72,322
|
|
|
5,974
|
|
|
(37,973
|
)
|
|
33,391
|
|
|
73,714
|
|
|||||
Income tax expense
|
—
|
|
|
34
|
|
|
1,358
|
|
|
—
|
|
|
1,392
|
|
|||||
Net income (loss)
|
$
|
72,322
|
|
|
$
|
5,940
|
|
|
$
|
(39,331
|
)
|
|
$
|
33,391
|
|
|
$
|
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
|
|
|
$
|
5,940
|
|
|
$
|
(42,073
|
)
|
|
$
|
33,411
|
|
|
$
|
70,387
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net cash provided by operating activities:
|
$
|
6,010
|
|
|
$
|
4,361
|
|
|
$
|
3,486
|
|
|
$
|
—
|
|
|
$
|
13,857
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Second-generation network costs (including interest)
|
(11,856
|
)
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
(11,910
|
)
|
|||||
Property and equipment additions
|
(3,674
|
)
|
|
(746
|
)
|
|
(1,105
|
)
|
|
—
|
|
|
(5,525
|
)
|
|||||
Purchase of intangible assets
|
(3,468
|
)
|
|
—
|
|
|
(328
|
)
|
|
—
|
|
|
(3,796
|
)
|
|||||
Investment in businesses
|
455
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
455
|
|
|||||
Net cash used in investing activities
|
(18,543
|
)
|
|
(746
|
)
|
|
(1,487
|
)
|
|
—
|
|
|
(20,776
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Principal payments of the Facility Agreement
|
(75,755
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75,755
|
)
|
|||||
Proceeds from common stock offering
|
114,993
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
114,993
|
|
|||||
Proceeds from Thermo Common Stock Purchase Agreement
|
33,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,000
|
|
|||||
Payment of debt restructuring fee
|
(20,795
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,795
|
)
|
|||||
Payments for debt and equity issuance costs
|
(654
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(654
|
)
|
|||||
Proceeds from issuance of stock to Terrapin
|
12,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,000
|
|
|||||
Proceeds from issuance of common stock and exercise of options and warrants
|
1,001
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,001
|
|
|||||
Net cash provided by financing activities
|
63,790
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63,790
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
195
|
|
|
—
|
|
|
195
|
|
|||||
Net increase in cash, cash equivalents and restricted cash
|
51,257
|
|
|
3,615
|
|
|
2,194
|
|
|
—
|
|
|
57,066
|
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
45,242
|
|
|
1,327
|
|
|
1,644
|
|
|
—
|
|
|
48,213
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
96,499
|
|
|
$
|
4,942
|
|
|
$
|
3,838
|
|
|
$
|
—
|
|
|
$
|
105,279
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net cash provided by (used in) operating activities:
|
$
|
8,642
|
|
|
$
|
1,307
|
|
|
$
|
(1,136
|
)
|
|
$
|
—
|
|
|
$
|
8,813
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Second-generation network costs (including interest)
|
(12,901
|
)
|
|
—
|
|
|
(269
|
)
|
|
—
|
|
|
(13,170
|
)
|
|||||
Property and equipment additions
|
(8,453
|
)
|
|
(699
|
)
|
|
(233
|
)
|
|
—
|
|
|
(9,385
|
)
|
|||||
Purchase of intangible assets
|
(1,996
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,996
|
)
|
|||||
Net cash used in investing activities
|
(23,350
|
)
|
|
(699
|
)
|
|
(502
|
)
|
|
—
|
|
|
(24,551
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Principal payments of the Facility Agreement
|
(32,835
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,835
|
)
|
|||||
Proceeds from issuance of stock to Terrapin
|
48,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,000
|
|
|||||
Proceeds from issuance of common stock and exercise of options and warrants
|
3,337
|
|
|
|
|
|
|
—
|
|
|
3,337
|
|
|||||||
Net cash provided by financing activities
|
18,502
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,502
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
55
|
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
3,794
|
|
|
608
|
|
|
(1,583
|
)
|
|
—
|
|
|
2,819
|
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
41,448
|
|
|
719
|
|
|
3,227
|
|
|
—
|
|
|
45,394
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
45,242
|
|
|
$
|
1,327
|
|
|
$
|
1,644
|
|
|
$
|
—
|
|
|
$
|
48,213
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(2,349
|
)
|
|
$
|
1,767
|
|
|
$
|
2,744
|
|
|
$
|
—
|
|
|
$
|
2,162
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Second-generation network 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 (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Principal payments of the Facility Agreement
|
(6,450
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,450
|
)
|
|||||
Proceeds from issuance of stock to Terrapin
|
39,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,000
|
|
|||||
Proceeds from issuance of common stock and exercise of options and warrants
|
726
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
726
|
|
|||||
Net cash provided by financing activities
|
33,276
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,276
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(1,605
|
)
|
|
—
|
|
|
(1,605
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
364
|
|
|
47
|
|
|
(56
|
)
|
|
—
|
|
|
355
|
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
41,084
|
|
|
672
|
|
|
3,283
|
|
|
—
|
|
|
45,039
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
41,448
|
|
|
$
|
719
|
|
|
$
|
3,227
|
|
|
$
|
—
|
|
|
$
|
45,394
|
|
(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, 2017 and 2016
|
Consolidated statements of operations for the years ended December 31, 2017, 2016, and 2015
|
Consolidated statements of comprehensive income (loss) for the years ended December 31, 2017, 2016, and 2015
|
Consolidated statements of stockholders’ equity for the years ended December 31, 2017, 2016, and 2015
|
Consolidated statements of cash flows for the years ended December 31, 2017, 2016, and 2015
|
Notes to Consolidated Financial Statements
|
|
|
|
GLOBALSTAR, INC.
|
|
|
|
|
|
|
By:
|
/s/ James Monroe III
|
Date:
|
February 22, 2018
|
|
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*
|
|
|
|
|
|
3.2*
|
|
|
|
|
|
3.3*
|
|
|
|
|
|
3.4*
|
|
|
|
|
|
4.1*
|
|
|
|
|
|
4.2*
|
|
|
|
|
|
10.1*†
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
10.4*†
|
|
|
|
|
|
10.5* †
|
|
|
|
|
|
10.6* †
|
|
|
|
|
|
10.7 *†
|
|
|
|
|
|
10.8*†
|
|
|
|
|
|
10.9*†
|
|
|
|
|
|
10.10*†
|
|
|
|
|
|
10.11*†
|
|
|
|
|
|
10.12*†
|
|
|
|
|
|
10.13*†
|
|
|
|
|
|
10.14*†
|
|
|
|
|
|
10.15*
|
|
|
|
|
|
10.16*†
|
|
|
|
|
|
10.17*
|
|
|
|
|
|
10.18*†
|
|
|
|
|
|
10.19*
|
|
|
|
|
|
10.20*†
|
|
|
|
|
|
10.21*†
|
|
|
|
|
|
10.22†
|
|
|
|
|
|
10.23*
|
|
|
|
|
|
10.24*
|
|
|
|
|
|
10.25*
|
|
|
|
|
|
10.26*
|
|
|
|
|
|
10.27*
|
|
|
|
|
|
10.28*†
|
|
|
|
|
|
10.28*†
|
|
|
|
|
|
10.29*†
|
|
|
|
|
|
10.30*†
|
|
|
|
|
|
10.31* †
|
|
|
|
|
|
10.32* †
|
|
|
|
|
|
10.33*†
|
|
|
|
|
|
10.34*†
|
|
|
|
|
|
10.35*†
|
|
|
|
|
|
10.36*†
|
|
|
|
|
|
10.37*†
|
|
|
|
|
|
10.38*†
|
|
|
|
|
|
10.39*†
|
|
|
|
|
|
10.40*†
|
|
|
|
|
|
10.41*†
|
|
|
|
|
|
10.42*†
|
|
|
|
|
|
10.43*
|
|
|
|
|
|
10.44*
|
|
|
|
|
|
10.45*
|
|
|
|
|
|
10.46*
|
|
Executive Compensation Plans and Agreements
|
||
10.47*
|
|
|
|
|
|
10.48*
|
|
|
|
|
|
10.49*
|
|
|
|
|
|
10.50*
|
|
|
|
|
|
10.51*
|
|
|
|
|
|
10.52*†
|
|
|
|
|
|
10.53*†
|
|
|
|
|
|
10.54†
|
|
|
|
|
|
10.55
|
|
|
|
|
|
12.1
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
24.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
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
|
|
|
|
*
|
|
Incorporated by reference.
|
|
|
|
†
|
|
Portions of the exhibit have been omitted pursuant to a request for confidential treatment filed with the Commission. The omitted portions have been filed with the Commission.
|
•
|
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.
|
Position Title:
|
President and Chief Operating Officer
|
Department:
|
1001- Executive Services
|
Location:
|
Covington, LA
|
Manager:
|
Jay Monroe
|
Annual Salary:
|
$350,000
|
FLSA Status:
|
Exempt
|
Officer:
|
Section 16 Officer
|
Vacation:
|
4 weeks accrued per year
|
Temporary Housing:
|
4 nights a week as discussed below
|
Car:
|
Car for use until relocation
|
Relocation costs:
|
$40,000 onetime payment to cover relocation costs to Louisiana
|
Annual Bonus:
|
up to 40% of salary based upon annual targets set by the Board of Directors
|
Previous Equity Plan:
|
30,000 RSA’s granted 1/13/2016
30,000 RSA’s granted 12/9/2016
250,000 Incentive Stock Options (ISO’s), continued vesting below
|
New Equity Plans:
|
750,000 RSA’s -details of grant and vesting below
250,000 RSA’s - details of grant and vesting below
750,000 ISO’s - details of grant and vesting below
250,000 ISO’s - details of grant and vesting below
|
Start Date:
|
TBD
|
•
|
30,000 RSA’s granted on 1/13/2016, three year vest
|
•
|
30,000 RSA’s granted on 12/9/2016, three year vest
|
•
|
250,000 incentive stock options (ISO) which will vest in equal amounts on the first three (3) anniversaries of the grant date with early vesting upon a change of control.
|
•
|
Incremental new 750,000 RSAs – granted upon hire and vesting 10% after year 1, 15% after year 2 (25% cumulative), 25% after year 3 (50% cumulative) and final 50% after year 4 or become fully vested upon a change of control
|
•
|
Incremental new 250,000 RSAs – granted and vesting upon the sooner of a) a change of control or b) reaching annual EBITDA of $50 million from the core business
|
•
|
Incremental new 750,000 ISOs –granted upon hire and vesting 10% after year 1, 15% after year 2 (25% cumulative), 25% after year 3 (50% cumulative) and final 50% after year 4 or become fully vested upon a change of control
|
•
|
Incremental new 250,000 ISOs – granted and vesting upon the sooner of a) a change of control or b) reaching annual EBITDA of $50 million from the core business
|
X
|
Accept Offer
|
|
/s/ David B. Kagan
|
|
11/27/17
|
|
|
|
|
Signed
|
|
Date
|
|
|
Anticipated Start Date:
|
Dec 6, 2017
|
|
|
||
|
Decline Offer
|
|
|
|
|
|
|
|
|
Signed
|
|
Date
|
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
|
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|||||||||||
|
Pre-tax income (loss) from continuing operations
|
|
$
|
(88,884
|
)
|
$
|
(139,189
|
)
|
$
|
73,714
|
|
$
|
(461,985
|
)
|
$
|
(589,978
|
)
|
|
Fixed charges
|
|
52,807
|
|
50,071
|
|
46,122
|
|
51,301
|
|
85,046
|
|
|||||
|
Amortization of capitalized interest
|
|
14,965
|
|
15,006
|
|
14,965
|
|
16,643
|
|
17,580
|
|
|||||
|
Income tax expense (benefit)
|
|
190
|
|
(6,543
|
)
|
1,392
|
|
881
|
|
1,138
|
|
|||||
|
Loss in equity investee
|
|
—
|
|
—
|
|
—
|
|
—
|
|
634
|
|
|||||
|
Less: interest capitalized
|
|
(17,893
|
)
|
(13,987
|
)
|
(10,140
|
)
|
(7,945
|
)
|
(17,097
|
)
|
|||||
|
|
|
|
|
|
|
|
||||||||||
Total earnings
|
|
$
|
(38,815
|
)
|
$
|
(94,642
|
)
|
$
|
126,053
|
|
$
|
(401,105
|
)
|
$
|
(502,677
|
)
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|||||||||||
|
Interest expensed
|
|
$
|
34,771
|
|
$
|
35,952
|
|
$
|
35,854
|
|
$
|
43,233
|
|
$
|
67,828
|
|
|
Estimated interest component of rental expense
(1)
|
|
143
|
|
132
|
|
128
|
|
123
|
|
122
|
|
|||||
|
Interest capitalized
|
|
17,893
|
|
13,987
|
|
10,140
|
|
7,945
|
|
17,097
|
|
|||||
|
|
|
|
|
|
|
|
||||||||||
Total Fixed Charges
|
|
$
|
52,807
|
|
$
|
50,071
|
|
$
|
46,122
|
|
$
|
51,301
|
|
$
|
85,047
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
|
*
|
|
*
|
|
2.73
|
|
*
|
|
*
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||
Excess of fixed charges over earnings
|
|
$
|
91,622
|
|
$
|
144,713
|
|
$
|
—
|
|
$
|
452,406
|
|
$
|
587,724
|
|
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%
|
Globalstar Leasing LLC
|
|
Delaware
|
|
100%
|
Globalstar Licensee LLC
|
|
Delaware
|
|
100%
|
Globalstar Security Services, LLC
|
|
Delaware
|
|
100%
|
Globalstar USA, LLC
|
|
Delaware
|
|
100%
|
GUSA Licensee LLC
|
|
Delaware
|
|
100%
|
Globalstar Canada Satellite Co.
|
|
Nova Scotia, Canada
|
|
100%
|
Globalstar de Venezuela, C.A.
|
|
Venezuela
|
|
100%
|
Globalstar Colombia, Ltda.
|
|
Colombia
|
|
100%
|
Globalstar Caribbean Ltd.
|
|
Cayman Islands
|
|
100%
|
Globalstar Republica Dominicana, S.A.
|
|
Dominican Republic
|
|
100%
|
GCL Licensee LLC
|
|
Delaware
|
|
100%
|
Globalstar Americas Acquisitions, Ltd.
|
|
British Virgin Islands
|
|
100%
|
Globalstar Americas Holding Ltd.
|
|
British Virgin Islands
|
|
100%
|
Globalstar Gateway Company S.A.
|
|
Nicaragua
|
|
100%
|
Globalstar Americas Telecommunications Ltd.
|
|
British Virgin Islands
|
|
100%
|
Globalstar Honduras S.A.
|
|
Honduras
|
|
100%
|
Globalstar Nicaragua S.A.
|
|
Nicaragua
|
|
100%
|
Globalstar de El Salvador, SA de CV
|
|
El Salvador
|
|
100%
|
Globalstar Panama, Corp.
|
|
Panama
|
|
100%
|
Globalstar Guatemala S.A.
|
|
Guatemala
|
|
100%
|
Globalstar Belize Ltd.
|
|
Belize
|
|
100%
|
Astral Technologies Investment Ltd.
|
|
British Virgin Islands
|
|
100%
|
Astral Technologies Nicaragua S.A.
|
|
Nicaragua
|
|
100%
|
SPOT LLC
|
|
Colorado
|
|
100%
|
Globalstar Asia Pacific
|
|
Korea
|
|
49%
|
Globalstar Media, LLC
|
|
Louisiana
|
|
100%
|
Globalstar Broadband Services, Inc.
|
|
Delaware
|
|
100%
|
Subsidiary
|
|
Organized Under Laws of
|
|
% of Voting Securities Owned by Immediate Parent
|
The World’s End (Pty) Ltd.
|
|
Botswana
|
|
74%
|
Globaltouch West Africa Limited
|
|
Nigeria
|
|
30%
|
Globalstar International, LLC
|
|
Delaware
|
|
100%
|
Globalstar Telecomunicaciones Perú S.A.C.
|
|
Peru
|
|
100%
|
Globalstar Netherlands B.V.
|
|
Netherlands
|
|
100%
|
Mobile Satellite Services B.V.
|
|
Netherlands
|
|
100%
|
Globalstar Europe, S.A.S.
|
|
France
|
|
100%
|
Globalstar Europe Satellite Services, Ltd.
|
|
Ireland
|
|
100%
|
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):
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(a)
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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
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(b)
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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.
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Date:
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February 22, 2018
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By:
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/s/ James Monroe III
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James Monroe III
Chief Executive Officer (Principal Executive Officer)
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I, Rebecca S. Clary, certify that:
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1.
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I have reviewed this annual report on Form 10-K of Globalstar, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date:
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February 22, 2018
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By:
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/s/ Rebecca S. Clary
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Rebecca S. Clary
Chief Financial Officer (Principal Financial Officer)
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February 22, 2018
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By:
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/s/ James Monroe III
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James Monroe III
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Chief Executive Officer (Principal Executive Officer)
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February 22, 2018
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By:
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/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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