☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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41-2116508
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(State or Other Jurisdiction of
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(I.R.S. Employer Identification No.)
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Incorporation or Organization)
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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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Trading Symbol
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Voting Common Stock
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NYSE American
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GSAT
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Large accelerated filer ☐
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Accelerated filer ☒
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Non-accelerated filer ☐
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Smaller reporting company ☐
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(Do not check if a smaller reporting company)
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Emerging growth company ☐
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Page
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PART I - F
INANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II - O
THER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Three Months Ended
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||||||
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March 31,
2019 |
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March 31,
2018 |
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Revenue:
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||||
Service revenue
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$
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26,119
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$
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26,010
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Subscriber equipment sales
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3,959
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2,739
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Total revenue
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30,078
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28,749
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Operating expenses:
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Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
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9,853
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9,029
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Cost of subscriber equipment sales
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3,149
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2,172
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Marketing, general and administrative
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11,606
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11,275
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Depreciation, amortization and accretion
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23,801
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19,231
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Total operating expenses
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48,409
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41,707
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Loss from operations
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(18,331
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)
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(12,958
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)
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Other income (expense):
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Interest income and expense, net of amounts capitalized
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(12,870
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)
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(7,353
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)
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Derivative gain
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57,008
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108,944
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Other
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(9
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)
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(662
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)
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Total other income
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44,129
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100,929
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Income before income taxes
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25,798
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87,971
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Income tax expense
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27
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41
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Net income
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$
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25,771
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$
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87,930
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Other comprehensive income:
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Foreign currency translation adjustments
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(270
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)
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(330
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)
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Comprehensive income
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$
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25,501
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$
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87,600
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Net income per common share:
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Basic
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$
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0.02
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$
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0.07
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Diluted
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0.02
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0.06
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Weighted-average shares outstanding:
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Basic
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1,448,318
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1,262,336
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Diluted
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1,632,257
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1,437,328
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March 31, 2019
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December 31, 2018
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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13,773
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$
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15,212
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Restricted cash
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60,574
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60,278
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Accounts receivable, net of allowance of $3,652 and $3,382, respectively
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20,037
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19,327
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Inventory
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14,415
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14,274
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Prepaid expenses and other current assets
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24,406
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13,410
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Total current assets
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133,205
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122,501
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Property and equipment, net
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864,200
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882,695
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Operating lease right of use assets, net
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14,587
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—
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Intangible and other assets, net of accumulated amortization of $8,180 and $7,930, respectively
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32,916
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40,286
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Total assets
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$
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1,044,908
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$
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1,045,482
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Current portion of long-term debt
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$
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96,249
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$
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96,249
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Accounts payable
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6,206
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6,995
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Accrued expenses
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34,593
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23,085
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Payables to affiliates
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218
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656
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Derivative liabilities
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542
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757
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Deferred revenue
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31,485
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31,938
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Total current liabilities
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169,293
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159,680
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Long-term debt, less current portion
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374,039
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367,202
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Operating lease liabilities
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13,571
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—
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Employee benefit obligations
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4,541
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4,489
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Derivative liabilities
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89,315
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146,108
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Deferred revenue
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5,513
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5,692
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Other non-current liabilities
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3,261
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3,366
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Total non-current liabilities
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490,240
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526,857
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Contingencies (Note 8)
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Stockholders’ equity:
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Preferred Stock of $0.0001 par value; 100,000,000 shares authorized and none issued and outstanding at March 31, 2019 and December 31, 2018, respectively
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—
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—
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Series A Preferred Convertible Stock of $0.0001 par value; one share authorized and none issued and outstanding at March 31, 2019 and December 31, 2018, respectively
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—
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—
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Voting Common Stock of $0.0001 par value; 1,900,000,000 shares authorized and 1,450,069,483 shares issued and outstanding at March 31, 2019; 1,500,000,000 shares authorized and 1,446,783,645 shares issued and outstanding at December 31, 2018
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145
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145
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Nonvoting Common Stock of $0.0001 par value; no shares authorized and none issued and outstanding at March 31, 2019; 400,000,000 shares authorized and none issued and outstanding at December 31, 2018
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—
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—
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Additional paid-in capital
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1,938,293
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1,937,364
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Accumulated other comprehensive loss
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(4,109
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)
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(3,839
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)
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Retained deficit
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(1,548,954
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)
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(1,574,725
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)
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Total stockholders’ equity
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385,375
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358,945
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Total liabilities and stockholders’ equity
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$
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1,044,908
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$
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1,045,482
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Common
Shares
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Common
Stock
Amount
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Additional
Paid-In
Capital
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Accumulated Other Comprehensive Loss
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Retained
Deficit
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Total
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|||||||||||
Balances – January 1, 2019
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1,446,784
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$
|
145
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$
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1,937,364
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$
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(3,839
|
)
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$
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(1,574,725
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)
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$
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358,945
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Net issuance of restricted stock awards, stock for employee stock option exercises and recognition of stock-based compensation
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3,285
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—
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|
1,000
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—
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—
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1,000
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|||||
Contribution of services
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—
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—
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47
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—
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—
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47
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|||||
Recognition of stock-based compensation of employee stock purchase plan
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—
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—
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77
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—
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—
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77
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|
|||||
Stock offering issuance costs
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—
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—
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(195
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)
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(195
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)
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|||||||
Other comprehensive loss
|
—
|
|
—
|
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—
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(270
|
)
|
—
|
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(270
|
)
|
|||||
Net income
|
—
|
|
—
|
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—
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—
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25,771
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|
25,771
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|
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Balances – March 31, 2019
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1,450,069
|
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$
|
145
|
|
$
|
1,938,293
|
|
$
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(4,109
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)
|
$
|
(1,548,954
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)
|
$
|
385,375
|
|
|
|
|
|
|
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Common
Shares
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Common
Stock
Amount
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Additional
Paid-In
Capital
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Accumulated Other Comprehensive Loss
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Retained
Deficit
|
Total
|
|||||||||||
Balances – January 1, 2018
|
1,261,949
|
|
$
|
126
|
|
$
|
1,869,339
|
|
$
|
(6,939
|
)
|
$
|
(1,571,302
|
)
|
$
|
291,224
|
|
Net issuance of restricted stock awards and recognition of stock-based compensation
|
1,165
|
|
—
|
|
1,853
|
|
—
|
|
—
|
|
1,853
|
|
|||||
Recognition of stock-based compensation of employee stock purchase plan
|
—
|
|
—
|
|
84
|
|
—
|
|
—
|
|
84
|
|
|||||
Contribution of services
|
—
|
|
—
|
|
137
|
|
—
|
|
—
|
|
137
|
|
|||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
(330
|
)
|
—
|
|
(330
|
)
|
|||||
Impact of adoption of ASC 606
|
—
|
|
—
|
|
—
|
|
—
|
|
3,093
|
|
3,093
|
|
|||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
87,930
|
|
87,930
|
|
|||||
Balances – March 31, 2018
|
1,263,114
|
|
$
|
126
|
|
$
|
1,871,413
|
|
$
|
(7,269
|
)
|
$
|
(1,480,279
|
)
|
$
|
383,991
|
|
|
Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
Cash flows provided by (used in) operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
25,771
|
|
|
$
|
87,930
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation, amortization and accretion
|
23,801
|
|
|
19,231
|
|
||
Change in fair value of derivative assets and liabilities
|
(57,008
|
)
|
|
(108,944
|
)
|
||
Stock-based compensation expense
|
1,091
|
|
|
1,150
|
|
||
Amortization of deferred financing costs
|
2,198
|
|
|
1,658
|
|
||
Provision for bad debts
|
846
|
|
|
361
|
|
||
Noncash interest and accretion expense
|
4,505
|
|
|
2,400
|
|
||
Unrealized foreign currency (gain) loss
|
(88
|
)
|
|
590
|
|
||
Other, net
|
1
|
|
|
(40
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(1,676
|
)
|
|
(269
|
)
|
||
Inventory
|
(107
|
)
|
|
(403
|
)
|
||
Prepaid expenses and other current assets
|
(6,797
|
)
|
|
13
|
|
||
Other assets
|
1,041
|
|
|
172
|
|
||
Accounts payable and accrued expenses
|
9,122
|
|
|
5,365
|
|
||
Payables to affiliates
|
(439
|
)
|
|
71
|
|
||
Other non-current liabilities
|
(248
|
)
|
|
(104
|
)
|
||
Deferred revenue
|
(688
|
)
|
|
651
|
|
||
Net cash provided by operating activities
|
1,325
|
|
|
9,832
|
|
||
Cash flows used in investing activities:
|
|
|
|
|
|
||
Second-generation network costs (including interest)
|
(793
|
)
|
|
(341
|
)
|
||
Property and equipment additions
|
(1,013
|
)
|
|
(1,397
|
)
|
||
Purchase of intangible assets
|
(455
|
)
|
|
(648
|
)
|
||
Net cash used in investing activities
|
(2,261
|
)
|
|
(2,386
|
)
|
||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
||
Payments for debt and equity issuance costs
|
(195
|
)
|
|
—
|
|
||
Proceeds from issuance of common stock and exercise of options and warrants
|
2
|
|
|
—
|
|
||
Net cash used in financing activities
|
(193
|
)
|
|
—
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(14
|
)
|
|
(22
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(1,143
|
)
|
|
7,424
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
75,490
|
|
|
105,279
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
74,347
|
|
|
$
|
112,703
|
|
|
As of:
|
||||||
|
March 31,
2019 |
|
December 31,
2018 |
||||
Reconciliation of cash, cash equivalents and restricted cash
|
|
|
|
||||
Cash and cash equivalents
|
$
|
13,773
|
|
|
$
|
15,212
|
|
Restricted cash (See Note 5 for further discussion on restrictions)
|
60,574
|
|
|
60,278
|
|
||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows
|
$
|
74,347
|
|
|
$
|
75,490
|
|
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Cash paid for interest
|
$
|
—
|
|
|
$
|
39
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash financing and investing activities:
|
|
|
|
|
|
||
Increase in capitalized accrued interest for second-generation network costs
|
$
|
78
|
|
|
$
|
1,330
|
|
Capitalized accretion of debt discount and amortization of prepaid financing costs
|
63
|
|
|
1,277
|
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Service revenue:
|
|
|
|
||||
Duplex
|
$
|
8,645
|
|
|
$
|
8,783
|
|
SPOT
|
13,095
|
|
|
12,962
|
|
||
Commercial IoT
|
3,698
|
|
|
3,089
|
|
||
IGO
|
166
|
|
|
209
|
|
||
Other
|
515
|
|
|
967
|
|
||
Total service revenue
|
26,119
|
|
|
26,010
|
|
||
|
|
|
|
||||
Subscriber equipment sales:
|
|
|
|
||||
Duplex
|
$
|
251
|
|
|
$
|
431
|
|
SPOT
|
1,591
|
|
|
1,474
|
|
||
Commercial IoT
|
2,072
|
|
|
833
|
|
||
Other
|
45
|
|
|
1
|
|
||
Total subscriber equipment sales
|
3,959
|
|
|
2,739
|
|
||
|
|
|
|
||||
Total revenue
|
$
|
30,078
|
|
|
$
|
28,749
|
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Service revenue:
|
|
|
|
||||
United States
|
$
|
19,252
|
|
|
$
|
18,380
|
|
Canada
|
3,811
|
|
|
4,486
|
|
||
Europe
|
2,122
|
|
|
2,246
|
|
||
Central and South America
|
564
|
|
|
569
|
|
||
Others
|
370
|
|
|
329
|
|
||
Total service revenue
|
26,119
|
|
|
26,010
|
|
||
|
|
|
|
||||
Subscriber equipment sales:
|
|
|
|
||||
United States
|
$
|
2,211
|
|
|
$
|
1,595
|
|
Canada
|
812
|
|
|
350
|
|
||
Europe
|
577
|
|
|
389
|
|
||
Central and South America
|
312
|
|
|
388
|
|
||
Others
|
47
|
|
|
17
|
|
||
Total subscriber equipment sales
|
3,959
|
|
|
2,739
|
|
||
|
|
|
|
||||
Total revenue
|
$
|
30,078
|
|
|
$
|
28,749
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Accounts receivable
|
$
|
20,037
|
|
|
$
|
19,327
|
|
Capitalized costs to obtain a contract
|
1,970
|
|
|
2,018
|
|
||
Contract liabilities
|
36,998
|
|
|
37,630
|
|
|
|
Three Months Ended
|
||
|
|
March 31, 2019
|
||
Operating leases:
|
|
|
||
Right-of-use asset, net
|
|
$
|
14,587
|
|
|
|
|
||
Short-term lease liability (as recorded in accrued expenses)
|
|
1,376
|
|
|
Long-term lease liability
|
|
13,571
|
|
|
Total operating lease liabilities
|
|
$
|
14,947
|
|
|
|
|
||
Finance leases:
|
|
|
||
Right-of-use asset, net (as recorded in intangible and other current assets, net)
|
|
$
|
174
|
|
|
|
|
||
Short-term lease liability (as recorded in accrued expenses)
|
|
94
|
|
|
Long-term lease liability (as recorded in non-current liabilities)
|
|
63
|
|
|
Total finance lease liabilities
|
|
$
|
157
|
|
|
Impact on change in accounting policy
|
||||||||||
|
As reported
March 31, 2019 |
|
Impact of
ASC 842 |
|
Legacy
GAAP |
||||||
Right-of-use asset, net
|
$
|
14,587
|
|
|
$
|
(14,587
|
)
|
|
$
|
—
|
|
Intangible and other assets, net
|
174
|
|
|
(174
|
)
|
|
—
|
|
|||
Property and equipment, net
|
—
|
|
|
174
|
|
|
174
|
|
|||
Accrued expenses
|
1,471
|
|
|
(1,267
|
)
|
|
204
|
|
|||
Lease liabilities
|
13,571
|
|
|
(13,571
|
)
|
|
—
|
|
|||
Other non-current liabilities
|
63
|
|
|
—
|
|
|
63
|
|
|
|
Three Months Ended
|
||
|
|
March 31, 2019
|
||
Operating lease cost:
|
|
|
||
Amortization of right-of-use assets
|
|
$
|
409
|
|
Interest on lease liabilities
|
|
130
|
|
|
Finance lease cost:
|
|
|
||
Amortization of right-of-use assets
|
|
26
|
|
|
Interest on lease liabilities
|
|
3
|
|
|
Short-term lease cost
|
|
169
|
|
|
Total lease cost
|
|
$
|
737
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2019
|
|
|
|
|
|
Weighted-average lease term
|
|
|
|
Finance leases
|
|
2.0 years
|
|
Operating Leases
|
|
9.3 years
|
|
|
|
|
|
Weighted-average discount rate
|
|
|
|
Finance leases
|
|
7.8
|
%
|
Operating leases
|
|
8.4
|
%
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
|
|
|
|
|
||||
2019 (remaining)
|
|
$
|
1,949
|
|
|
$
|
78
|
|
2020
|
|
2,542
|
|
|
72
|
|
||
2021
|
|
1,952
|
|
|
11
|
|
||
2022
|
|
1,851
|
|
|
6
|
|
||
2023
|
|
1,894
|
|
|
3
|
|
||
2024
|
|
1,894
|
|
|
—
|
|
||
Thereafter
|
|
8,810
|
|
|
—
|
|
||
Total lease payments
|
|
$
|
20,892
|
|
|
$
|
170
|
|
Imputed interest
|
|
(5,945
|
)
|
|
(13
|
)
|
||
Discounted lease liability
|
|
$
|
14,947
|
|
|
$
|
157
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Globalstar System:
|
|
|
|
|
|
||
Space component
|
|
|
|
|
|
||
First and second-generation satellites in service
|
$
|
1,195,291
|
|
|
$
|
1,195,291
|
|
Second-generation satellite, on-ground spare
|
32,481
|
|
|
32,481
|
|
||
Ground component
|
269,293
|
|
|
256,850
|
|
||
Construction in progress:
|
|
|
|
|
|
||
Ground component
|
10,593
|
|
|
18,068
|
|
||
Next-generation software upgrades
|
2,087
|
|
|
2,250
|
|
||
Other
|
1,585
|
|
|
2,699
|
|
||
Total Globalstar System
|
1,511,330
|
|
|
1,507,639
|
|
||
Internally developed and purchased software
|
18,644
|
|
|
26,045
|
|
||
Equipment
|
9,773
|
|
|
10,097
|
|
||
Land and buildings
|
3,304
|
|
|
3,311
|
|
||
Leasehold improvements
|
1,321
|
|
|
1,478
|
|
||
Total property and equipment
|
1,544,372
|
|
|
1,548,570
|
|
||
Accumulated depreciation
|
(680,172
|
)
|
|
(665,875
|
)
|
||
Total property and equipment, net
|
$
|
864,200
|
|
|
$
|
882,695
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Principal
Amount
|
|
Unamortized Discount and Deferred Financing Costs
|
|
Carrying
Value
|
|
Principal
Amount
|
|
Unamortized Discount and Deferred Financing Costs
|
|
Carrying
Value
|
||||||||||||
Facility Agreement
|
$
|
389,390
|
|
|
$
|
22,115
|
|
|
$
|
367,275
|
|
|
$
|
389,390
|
|
|
$
|
24,355
|
|
|
$
|
365,035
|
|
Loan Agreement with Thermo
|
123,329
|
|
|
21,695
|
|
|
101,634
|
|
|
119,702
|
|
|
22,665
|
|
|
97,037
|
|
||||||
8.00% Convertible Senior Notes Issued in 2013
|
1,379
|
|
|
—
|
|
|
1,379
|
|
|
1,379
|
|
|
—
|
|
|
1,379
|
|
||||||
Total Debt
|
514,098
|
|
|
43,810
|
|
|
470,288
|
|
|
510,471
|
|
|
47,020
|
|
|
463,451
|
|
||||||
Less: Current Portion
|
96,249
|
|
|
—
|
|
|
96,249
|
|
|
96,249
|
|
|
—
|
|
|
96,249
|
|
||||||
Long-Term Debt
|
$
|
417,849
|
|
|
$
|
43,810
|
|
|
$
|
374,039
|
|
|
$
|
414,222
|
|
|
$
|
47,020
|
|
|
$
|
367,202
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Derivative liabilities:
|
|
|
|
|
|
||
Compound embedded derivative with the 2013 8.00% Notes
|
$
|
(542
|
)
|
|
$
|
(757
|
)
|
Compound embedded derivative with the Loan Agreement with Thermo
|
(89,315
|
)
|
|
(146,108
|
)
|
||
Total derivative liabilities
|
$
|
(89,857
|
)
|
|
$
|
(146,865
|
)
|
|
Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Compound embedded derivative with the 2013 8.00% Notes
|
$
|
215
|
|
|
$
|
1,321
|
|
Compound embedded derivative with the Loan Agreement with Thermo
|
56,793
|
|
|
107,623
|
|
||
Total derivative gain
|
$
|
57,008
|
|
|
$
|
108,944
|
|
|
March 31, 2019
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
Balance
|
||||||||
Compound embedded derivative with the 2013 8.00% Notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(542
|
)
|
|
$
|
(542
|
)
|
Compound embedded derivative with the Loan Agreement with Thermo
|
—
|
|
|
—
|
|
|
(89,315
|
)
|
|
(89,315
|
)
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(89,857
|
)
|
|
$
|
(89,857
|
)
|
|
December 31, 2018
|
||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
Balance
|
||||||||
Compound embedded derivative with the 2013 8.00% Notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(757
|
)
|
|
$
|
(757
|
)
|
Compound embedded derivative with the Loan Agreement with Thermo
|
—
|
|
|
—
|
|
|
(146,108
|
)
|
|
(146,108
|
)
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(146,865
|
)
|
|
$
|
(146,865
|
)
|
|
March 31, 2019
|
||||||||||||||
|
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
|
40% - 110%
|
|
2.2
|
%
|
|
$
|
0.69
|
|
|
27
|
%
|
|
$
|
0.43
|
|
Compound embedded derivative with the Loan Agreement with Thermo
|
40% - 110%
|
|
2.2
|
%
|
|
$
|
0.69
|
|
|
27
|
%
|
|
$
|
0.43
|
|
|
December 31, 2018
|
||||||||||||||
|
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
|
40% - 120%
|
|
2.5
|
%
|
|
$
|
0.69
|
|
|
28
|
%
|
|
$
|
0.64
|
|
Compound embedded derivative with the Loan Agreement with Thermo
|
40% - 120%
|
|
2.5
|
%
|
|
$
|
0.69
|
|
|
28
|
%
|
|
$
|
0.64
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
(146,865
|
)
|
|
$
|
(227,985
|
)
|
Unrealized gain, included in derivative gain
|
57,008
|
|
|
108,944
|
|
||
Balance at end of period
|
$
|
(89,857
|
)
|
|
$
|
(119,041
|
)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying Value
|
|
Estimated Fair Value
|
|
Carrying Value
|
|
Estimated Fair Value
|
||||||||
Loan Agreement with Thermo
|
$
|
101,634
|
|
|
$
|
74,182
|
|
|
$
|
97,037
|
|
|
$
|
67,452
|
|
2013 8.00% Notes
|
1,379
|
|
|
778
|
|
|
1,379
|
|
|
734
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
25,771
|
|
|
$
|
87,930
|
|
Effect of dilutive securities:
|
|
|
|
||||
2013 8.00% Notes
|
27
|
|
|
15
|
|
||
Loan Agreement with Thermo
|
4,497
|
|
|
2,396
|
|
||
Income to common stockholders plus assumed conversions
|
$
|
30,295
|
|
|
$
|
90,341
|
|
Weighted average common shares outstanding:
|
|
|
|
||||
Basic shares outstanding
|
1,448,318
|
|
|
1,262,336
|
|
||
Incremental shares from assumed exercises, conversions and other issuance of:
|
|
|
|
||||
Stock options, restricted stock, restricted stock units and ESPP
|
3,204
|
|
|
5,639
|
|
||
2013 8.00% Notes
|
1,998
|
|
|
2,065
|
|
||
Loan Agreement with Thermo
|
178,737
|
|
|
167,288
|
|
||
Diluted shares outstanding
|
1,632,257
|
|
|
1,437,328
|
|
||
Net income per share:
|
|
|
|
||||
Basic
|
$
|
0.02
|
|
|
$
|
0.07
|
|
Diluted
|
0.02
|
|
|
0.06
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Service revenue
|
$
|
21,937
|
|
|
$
|
9,582
|
|
|
$
|
15,129
|
|
|
$
|
(20,529
|
)
|
|
$
|
26,119
|
|
Subscriber equipment sales
|
302
|
|
|
3,486
|
|
|
1,501
|
|
|
(1,330
|
)
|
|
3,959
|
|
|||||
Total revenue
|
22,239
|
|
|
13,068
|
|
|
16,630
|
|
|
(21,859
|
)
|
|
30,078
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
7,015
|
|
|
1,449
|
|
|
2,891
|
|
|
(1,502
|
)
|
|
9,853
|
|
|||||
Cost of subscriber equipment sales
|
223
|
|
|
3,066
|
|
|
1,188
|
|
|
(1,328
|
)
|
|
3,149
|
|
|||||
Marketing, general and administrative
|
7,124
|
|
|
1,301
|
|
|
22,210
|
|
|
(19,029
|
)
|
|
11,606
|
|
|||||
Depreciation, amortization and accretion
|
23,195
|
|
|
17
|
|
|
589
|
|
|
—
|
|
|
23,801
|
|
|||||
Total operating expenses
|
37,557
|
|
|
5,833
|
|
|
26,878
|
|
|
(21,859
|
)
|
|
48,409
|
|
|||||
Income (loss) from operations
|
(15,318
|
)
|
|
7,235
|
|
|
(10,248
|
)
|
|
—
|
|
|
(18,331
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest income and expense, net of amounts capitalized
|
(12,864
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|
—
|
|
|
(12,870
|
)
|
|||||
Derivative gain
|
57,008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,008
|
|
|||||
Equity in subsidiary earnings (loss)
|
(2,933
|
)
|
|
(4,634
|
)
|
|
—
|
|
|
7,567
|
|
|
—
|
|
|||||
Other
|
(122
|
)
|
|
187
|
|
|
(73
|
)
|
|
(1
|
)
|
|
(9
|
)
|
|||||
Total other income
|
41,089
|
|
|
(4,451
|
)
|
|
(75
|
)
|
|
7,566
|
|
|
44,129
|
|
|||||
Income (loss) before income taxes
|
25,771
|
|
|
2,784
|
|
|
(10,323
|
)
|
|
7,566
|
|
|
25,798
|
|
|||||
Income tax expense
|
—
|
|
|
7
|
|
|
20
|
|
|
—
|
|
|
27
|
|
|||||
Net income (loss)
|
$
|
25,771
|
|
|
$
|
2,777
|
|
|
$
|
(10,343
|
)
|
|
$
|
7,566
|
|
|
$
|
25,771
|
|
Comprehensive income (loss)
|
$
|
25,771
|
|
|
$
|
2,777
|
|
|
$
|
(10,607
|
)
|
|
$
|
7,560
|
|
|
$
|
25,501
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Service revenue
|
$
|
20,534
|
|
|
$
|
9,074
|
|
|
$
|
15,608
|
|
|
$
|
(19,206
|
)
|
|
$
|
26,010
|
|
Subscriber equipment sales
|
47
|
|
|
2,049
|
|
|
1,196
|
|
|
(553
|
)
|
|
2,739
|
|
|||||
Total revenue
|
20,581
|
|
|
11,123
|
|
|
16,804
|
|
|
(19,759
|
)
|
|
28,749
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)
|
6,257
|
|
|
1,390
|
|
|
2,868
|
|
|
(1,486
|
)
|
|
9,029
|
|
|||||
Cost of subscriber equipment sales
|
41
|
|
|
1,810
|
|
|
875
|
|
|
(554
|
)
|
|
2,172
|
|
|||||
Marketing, general and administrative
|
7,085
|
|
|
1,064
|
|
|
20,863
|
|
|
(17,737
|
)
|
|
11,275
|
|
|||||
Depreciation, amortization and accretion
|
19,044
|
|
|
96
|
|
|
91
|
|
|
—
|
|
|
19,231
|
|
|||||
Total operating expenses
|
32,427
|
|
|
4,360
|
|
|
24,697
|
|
|
(19,777
|
)
|
|
41,707
|
|
|||||
Income (loss) from operations
|
(11,846
|
)
|
|
6,763
|
|
|
(7,893
|
)
|
|
18
|
|
|
(12,958
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest income and expense, net of amounts capitalized
|
(7,386
|
)
|
|
(2
|
)
|
|
14
|
|
|
21
|
|
|
(7,353
|
)
|
|||||
Derivative gain
|
108,944
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
108,944
|
|
|||||
Equity in subsidiary earnings (loss)
|
(1,320
|
)
|
|
(3,387
|
)
|
|
—
|
|
|
4,707
|
|
|
—
|
|
|||||
Other
|
(462
|
)
|
|
(176
|
)
|
|
(8
|
)
|
|
(16
|
)
|
|
(662
|
)
|
|||||
Total other income
|
99,776
|
|
|
(3,565
|
)
|
|
6
|
|
|
4,712
|
|
|
100,929
|
|
|||||
Income (loss) before income taxes
|
87,930
|
|
|
3,198
|
|
|
(7,887
|
)
|
|
4,730
|
|
|
87,971
|
|
|||||
Income tax expense
|
—
|
|
|
6
|
|
|
35
|
|
|
—
|
|
|
41
|
|
|||||
Net income (loss)
|
$
|
87,930
|
|
|
$
|
3,192
|
|
|
$
|
(7,922
|
)
|
|
$
|
4,730
|
|
|
$
|
87,930
|
|
Comprehensive income (loss)
|
$
|
87,930
|
|
|
$
|
3,192
|
|
|
$
|
(8,246
|
)
|
|
$
|
4,724
|
|
|
$
|
87,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
9,860
|
|
|
$
|
281
|
|
|
$
|
3,632
|
|
|
$
|
—
|
|
|
$
|
13,773
|
|
Restricted cash
|
60,574
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,574
|
|
|||||
Accounts receivable, net of allowance
|
7,931
|
|
|
7,429
|
|
|
4,677
|
|
|
—
|
|
|
20,037
|
|
|||||
Intercompany receivables
|
1,051,185
|
|
|
823,295
|
|
|
68,438
|
|
|
(1,942,918
|
)
|
|
—
|
|
|||||
Inventory
|
7,290
|
|
|
5,460
|
|
|
1,665
|
|
|
—
|
|
|
14,415
|
|
|||||
Prepaid expenses and other current assets
|
10,603
|
|
|
9,111
|
|
|
4,692
|
|
|
—
|
|
|
24,406
|
|
|||||
Total current assets
|
1,147,443
|
|
|
845,576
|
|
|
83,104
|
|
|
(1,942,918
|
)
|
|
133,205
|
|
|||||
Property and equipment, net
|
833,129
|
|
|
876
|
|
|
30,191
|
|
|
4
|
|
|
864,200
|
|
|||||
Operating lease right of use assets, net
|
12,436
|
|
|
236
|
|
|
1,915
|
|
|
—
|
|
|
14,587
|
|
|||||
Intercompany notes receivable
|
5,674
|
|
|
—
|
|
|
—
|
|
|
(5,674
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
(257,501
|
)
|
|
45,744
|
|
|
50,696
|
|
|
161,061
|
|
|
—
|
|
|||||
Intangible and other assets, net
|
29,104
|
|
|
277
|
|
|
3,547
|
|
|
(12
|
)
|
|
32,916
|
|
|||||
Total assets
|
$
|
1,770,285
|
|
|
$
|
892,709
|
|
|
$
|
169,453
|
|
|
$
|
(1,787,539
|
)
|
|
$
|
1,044,908
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current portion of long-term debt
|
$
|
96,249
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
96,249
|
|
Accounts payable
|
2,253
|
|
|
2,851
|
|
|
1,102
|
|
|
—
|
|
|
6,206
|
|
|||||
Accrued expenses
|
19,453
|
|
|
7,315
|
|
|
7,825
|
|
|
—
|
|
|
34,593
|
|
|||||
Intercompany payables
|
778,914
|
|
|
827,358
|
|
|
336,587
|
|
|
(1,942,859
|
)
|
|
—
|
|
|||||
Payables to affiliates
|
218
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
218
|
|
|||||
Derivative liabilities
|
542
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
542
|
|
|||||
Deferred revenue
|
1,650
|
|
|
22,679
|
|
|
7,156
|
|
|
—
|
|
|
31,485
|
|
|||||
Total current liabilities
|
899,279
|
|
|
860,203
|
|
|
352,670
|
|
|
(1,942,859
|
)
|
|
169,293
|
|
|||||
Long-term debt, less current portion
|
374,039
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
374,039
|
|
|||||
Operating lease liabilities
|
12,035
|
|
|
201
|
|
|
1,335
|
|
|
—
|
|
|
13,571
|
|
|||||
Employee benefit obligations
|
4,541
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,541
|
|
|||||
Intercompany notes payable
|
—
|
|
|
—
|
|
|
5,674
|
|
|
(5,674
|
)
|
|
—
|
|
|||||
Derivative liabilities
|
89,315
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89,315
|
|
|||||
Deferred revenue
|
5,252
|
|
|
243
|
|
|
18
|
|
|
—
|
|
|
5,513
|
|
|||||
Other non-current liabilities
|
449
|
|
|
322
|
|
|
2,490
|
|
|
—
|
|
|
3,261
|
|
|||||
Total non-current liabilities
|
485,631
|
|
|
766
|
|
|
9,517
|
|
|
(5,674
|
)
|
|
490,240
|
|
|||||
Stockholders’ equity (deficit)
|
385,375
|
|
|
31,740
|
|
|
(192,734
|
)
|
|
160,994
|
|
|
385,375
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,770,285
|
|
|
$
|
892,709
|
|
|
$
|
169,453
|
|
|
$
|
(1,787,539
|
)
|
|
$
|
1,044,908
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
11,312
|
|
|
$
|
2,126
|
|
|
$
|
1,774
|
|
|
$
|
—
|
|
|
$
|
15,212
|
|
Restricted cash
|
60,278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,278
|
|
|||||
Accounts receivable, net of allowance
|
7,138
|
|
|
7,826
|
|
|
4,363
|
|
|
—
|
|
|
19,327
|
|
|||||
Intercompany receivables
|
1,047,320
|
|
|
824,920
|
|
|
105,819
|
|
|
(1,978,059
|
)
|
|
—
|
|
|||||
Inventory
|
6,747
|
|
|
6,149
|
|
|
1,378
|
|
|
—
|
|
|
14,274
|
|
|||||
Prepaid expenses and other current assets
|
7,765
|
|
|
2,987
|
|
|
2,658
|
|
|
—
|
|
|
13,410
|
|
|||||
Total current assets
|
1,140,560
|
|
|
844,008
|
|
|
115,992
|
|
|
(1,978,059
|
)
|
|
122,501
|
|
|||||
Property and equipment, net
|
850,790
|
|
|
1,242
|
|
|
30,658
|
|
|
5
|
|
|
882,695
|
|
|||||
Intercompany notes receivable
|
5,600
|
|
|
—
|
|
|
6,436
|
|
|
(12,036
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
(255,187
|
)
|
|
42,481
|
|
|
50,220
|
|
|
162,486
|
|
|
—
|
|
|||||
Intangible and other assets, net
|
36,275
|
|
|
324
|
|
|
3,698
|
|
|
(11
|
)
|
|
40,286
|
|
|||||
Total assets
|
$
|
1,778,038
|
|
|
$
|
888,055
|
|
|
$
|
207,004
|
|
|
$
|
(1,827,615
|
)
|
|
$
|
1,045,482
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current portion of long-term debt
|
$
|
96,249
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
96,249
|
|
Accounts payable
|
2,420
|
|
|
3,378
|
|
|
1,197
|
|
|
—
|
|
|
6,995
|
|
|||||
Accrued expenses
|
8,904
|
|
|
6,747
|
|
|
7,434
|
|
|
—
|
|
|
23,085
|
|
|||||
Intercompany payables
|
778,340
|
|
|
832,284
|
|
|
367,396
|
|
|
(1,978,020
|
)
|
|
—
|
|
|||||
Payables to affiliates
|
656
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
656
|
|
|||||
Derivative liabilities
|
757
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
757
|
|
|||||
Deferred revenue
|
1,699
|
|
|
23,943
|
|
|
6,296
|
|
|
—
|
|
|
31,938
|
|
|||||
Total current liabilities
|
889,025
|
|
|
866,352
|
|
|
382,323
|
|
|
(1,978,020
|
)
|
|
159,680
|
|
|||||
Long-term debt, less current portion
|
367,202
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
367,202
|
|
|||||
Employee benefit obligations
|
4,489
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,489
|
|
|||||
Intercompany notes payable
|
6,436
|
|
|
—
|
|
|
5,600
|
|
|
(12,036
|
)
|
|
—
|
|
|||||
Derivative liabilities
|
146,108
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146,108
|
|
|||||
Deferred revenue
|
5,339
|
|
|
335
|
|
|
18
|
|
|
—
|
|
|
5,692
|
|
|||||
Other non-current liabilities
|
494
|
|
|
323
|
|
|
2,549
|
|
|
—
|
|
|
3,366
|
|
|||||
Total non-current liabilities
|
530,068
|
|
|
658
|
|
|
8,167
|
|
|
(12,036
|
)
|
|
526,857
|
|
|||||
Stockholders’ equity (deficit)
|
358,945
|
|
|
21,045
|
|
|
(183,486
|
)
|
|
162,441
|
|
|
358,945
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,778,038
|
|
|
$
|
888,055
|
|
|
$
|
207,004
|
|
|
$
|
(1,827,615
|
)
|
|
$
|
1,045,482
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cash flows provided by (used in) operating activities
|
$
|
1,145
|
|
|
$
|
(1,747
|
)
|
|
$
|
1,927
|
|
|
$
|
—
|
|
|
$
|
1,325
|
|
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Second-generation network costs (including interest)
|
(779
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(793
|
)
|
|||||
Property and equipment additions
|
(901
|
)
|
|
(98
|
)
|
|
(14
|
)
|
|
—
|
|
|
(1,013
|
)
|
|||||
Purchase of intangible assets
|
(428
|
)
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(455
|
)
|
|||||
Net cash used in investing activities
|
(2,108
|
)
|
|
(98
|
)
|
|
(55
|
)
|
|
—
|
|
|
(2,261
|
)
|
|||||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Payments for debt and equity issuance costs
|
(195
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(195
|
)
|
|||||
Proceeds from issuance of common stock and exercise of options and warrants
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Net cash used in financing activities
|
(193
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(193
|
)
|
|||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(1,156
|
)
|
|
(1,845
|
)
|
|
1,858
|
|
|
—
|
|
|
(1,143
|
)
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
71,590
|
|
|
2,126
|
|
|
1,774
|
|
|
—
|
|
|
75,490
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
70,434
|
|
|
$
|
281
|
|
|
$
|
3,632
|
|
|
$
|
—
|
|
|
$
|
74,347
|
|
|
Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cash flows provided by operating activities
|
$
|
5,920
|
|
|
$
|
3,805
|
|
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
9,832
|
|
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Second-generation network costs (including interest)
|
(318
|
)
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(341
|
)
|
|||||
Property and equipment additions
|
(1,216
|
)
|
|
(98
|
)
|
|
(83
|
)
|
|
—
|
|
|
(1,397
|
)
|
|||||
Purchase of intangible assets
|
(633
|
)
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(648
|
)
|
|||||
Net cash used in investing activities
|
(2,167
|
)
|
|
(98
|
)
|
|
(121
|
)
|
|
—
|
|
|
(2,386
|
)
|
|||||
Cash flows provided by financing activities:
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
(22
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
3,753
|
|
|
3,707
|
|
|
(36
|
)
|
|
—
|
|
|
7,424
|
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
96,499
|
|
|
4,942
|
|
|
3,838
|
|
|
—
|
|
|
105,279
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
100,252
|
|
|
$
|
8,649
|
|
|
$
|
3,802
|
|
|
$
|
—
|
|
|
$
|
112,703
|
|
•
|
two-way voice communication and data transmissions using mobile or fixed devices, including our GSP-1700 phone, our Globalstar 9600
TM
hotspot, two generations of our Sat-Fi
TM
, and other fixed and data-only devices ("Duplex");
|
•
|
one-way or two-way communication and data transmissions using mobile devices, including our SPOT family of products, such as SPOT X
TM
, SPOT Gen3
®
and SPOT Trace
®
, that transmit messages and the location of the device ("SPOT"); and
|
•
|
one-way data transmissions using a mobile or fixed device that transmits its location and other information to a central monitoring station, including our commercial IoT products, such as our battery- and solar-powered SmartOne, STX-3 and STINGR ("Commercial IoT").
|
•
|
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, Commercial IoT, SPOT and IGO revenue;
|
•
|
operating income and adjusted EBITDA, both of which are indicators of our financial performance; and
|
•
|
capital expenditures, which are an indicator of future revenue growth potential and cash requirements.
|
|
Three Months Ended
March 31, 2019 |
|
Three Months Ended
March 31, 2018 |
||||||||||
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue |
||||||
Service revenue:
|
|
|
|
|
|
|
|||||||
Duplex
|
$
|
8,645
|
|
|
29
|
%
|
|
$
|
8,783
|
|
|
31
|
%
|
SPOT
|
13,095
|
|
|
44
|
|
|
12,962
|
|
|
45
|
|
||
Commercial IoT
|
3,698
|
|
|
12
|
|
|
3,089
|
|
|
11
|
|
||
IGO
|
166
|
|
|
1
|
|
|
209
|
|
|
1
|
|
||
Other
|
515
|
|
|
1
|
|
|
967
|
|
|
3
|
|
||
Total
|
$
|
26,119
|
|
|
87
|
%
|
|
$
|
26,010
|
|
|
91
|
%
|
|
Three Months Ended
March 31, 2019 |
|
Three Months Ended
March 31, 2018 |
||||||||||
|
Revenue
|
|
% of Total
Revenue |
|
Revenue
|
|
% of Total
Revenue |
||||||
Subscriber equipment sales:
|
|
|
|
|
|
|
|||||||
Duplex
|
$
|
251
|
|
|
1
|
%
|
|
$
|
431
|
|
|
1
|
%
|
SPOT
|
1,591
|
|
|
5
|
|
|
1,474
|
|
|
5
|
|
||
Commercial IoT
|
2,072
|
|
|
7
|
|
|
833
|
|
|
3
|
|
||
Other
|
45
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||
Total
|
$
|
3,959
|
|
|
13
|
%
|
|
$
|
2,739
|
|
|
9
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Average number of subscribers for the period:
|
|
|
|
||||
Duplex
|
59,978
|
|
|
69,033
|
|
||
SPOT
|
288,840
|
|
|
293,561
|
|
||
Commercial IoT
|
384,673
|
|
|
332,813
|
|
||
IGO
|
27,017
|
|
|
31,200
|
|
||
Other
|
953
|
|
|
1,253
|
|
||
Total
|
761,461
|
|
|
727,860
|
|
||
|
|
|
|
||||
ARPU (monthly):
|
|
|
|
||||
Duplex
|
$
|
48.05
|
|
|
$
|
42.41
|
|
SPOT
|
15.11
|
|
|
14.72
|
|
||
Commercial IoT
|
3.20
|
|
|
3.09
|
|
||
IGO
|
2.05
|
|
|
2.23
|
|
|
Three Months Ended
|
||||||
|
March 31,
2019 |
|
March 31,
2018 |
||||
Net cash provided by operating activities
|
$
|
1,325
|
|
|
$
|
9,832
|
|
Net cash used in investing activities
|
(2,261
|
)
|
|
(2,386
|
)
|
||
Net cash used in financing activities
|
(193
|
)
|
|
—
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(14
|
)
|
|
(22
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
(1,143
|
)
|
|
$
|
7,424
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
10.1
|
|
|
|
|
|
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
|
|
|
|
GLOBALSTAR, INC.
|
|
|
|
|
Date:
|
May 2, 2019
|
By:
|
/s/ David B. Kagan
|
|
|
|
David B. Kagan
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Rebecca S. Clary
|
|
|
|
Rebecca S. Clary
|
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Globalstar, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 2, 2019
|
|
|
|
|
By:
|
/s/ David B. Kagan
|
|
|
David B. Kagan
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Globalstar, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 2, 2019
|
|
|
|
|
By:
|
/s/ Rebecca S. Clary
|
|
|
Rebecca S. Clary
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
Date:
|
May 2, 2019
|
By:
|
/s/ David B. Kagan
|
|
|
|
David B. Kagan
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
|
Date:
|
May 2, 2019
|
By:
|
/s/ Rebecca S. Clary
|
|
|
|
Rebecca S. Clary
|
|
|
|
Chief Financial Officer (Principal Financial Officer)
|