What changed in this filing

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Item 1A. Risk Factors

2021-03-04 compared with 2020-02-28 · 88 added, 172 removed, 391 unchanged (40% of the section changed)

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Risks Related to Our Business

The effect of an epidemic or pandemic, including the current COVID-19 pandemic, could have an adverse impact on our operations and the operations of our customers and may have a material adverse impact on our financial condition and results of operations .

An epidemic or pandemic could significantly disrupt our operations, including, but not limited to, our workforce, supply chain, regulatory processes and market demand of our products.

An epidemic or pandemic could also significantly impact our customers, including their demand for and ability to pay for our services and equipment.

In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic.

International, federal, state and local governments have taken measures to combat this pandemic, including “stay at home” orders, social distancing and closures of non-essential businesses.

We are currently experiencing a reduction in sales of our subscriber equipment, which could result in fewer subscriber activations in future periods, and challenges in the collection of outstanding receivables from certain our customers, specifically those concentrated in the oil and gas and retail industries.

These factors may negatively impact our results of operations and our ability to maintain compliance with our debt covenants.

We source our products from both domestic and foreign contract manufacturers, with the largest concentration in China.

Policies were put in place in China to reduce the transmission of COVID-19, which may impact the availability of labor at our manufacturing facility as well as the interruption of components and products moving through our supply chain.

If facilities close or produce low volume due to COVID-19, we may have difficulty sourcing products to sell in the future and may incur additional costs and lost revenue.

The extent to which COVID-19 could continue to impact our operations and financial condition will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.

We are not able at this time to estimate the full impact of COVID-19 on our financial or operational results, but the impact could be material.

We continue to monitor our ability to remain in compliance with financial covenants over the next twelve months.

If we are not able to maintain compliance, we may need to cure the noncompliance with one or more Equity Cure Contributions or seek a waiver of the affected covenants.

There is no assurance that we will be able to do this successfully, and if we do not, our lenders would be able to exercise their remedies under the First Lien Facility Agreement, including accelerating maturity of all our obligations under the First Lien Facility Agreement.

Further, the COVID-19 pandemic may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not expect to present significant risks to our operations or financial results.

The implementation of our business plan and our ability to generate income from operations assume we are able to maintain a healthy constellation and ground network capable of providing commercially acceptable levels of coverage and service quality, which are contingent on a number of factors.

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Any disruption to our satellites, services, information systems or telecommunications infrastructure could result in degrading or disrupting services to our customers for an indeterminate period of time.

Since we launched our first satellites in the 1990’s, most of our first-generation satellites have been retired or have failed in orbit, and we expect the remaining first-generation satellites to be retired or fail in the future.

Although we designed our second-generation satellites to provide commercial service over a 15-year life, we can provide no assurance as to whether any or all of them will continue in operation for their full 15-year design life.

Satellites utilize highly complex technology and operate in the harsh environment of space and therefore are subject to significant operational risks while in orbit.

Further, our satellites may experience temporary outages or otherwise may not be fully functioning at any given time.

Our satellites may experience temporary outages or otherwise may not be fully functioning at any given time.

There are some remote tools we use to remedy certain types of problems affecting the performance of our satellites, but the physical repair of satellites in space is not feasible.

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Some of our satellites have had malfunctions and other anomalies in the past and may have anomalies in the future.

Anomalies may occur, for reasons described above or arising from the failure of other systems or components, and intrasatellite redundancy may not be available upon the occurrence of such anomalies.

There can be no assurance that, in these cases, it will be possible to restore normal operations.

Where service cannot be restored, the failure could cause the satellite to have less capacity available for service, to suffer performance degradation or to cease operating prematurely, either in whole or in part.

We cannot guarantee that we could successfully develop and implement a solution if one of these anomalies occurs.

Further, from time to time we move and relocate satellites within our constellation to improve coverage and service quality.

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Additionally, human operators may execute improper implementation commands that may negatively impact a satellite's performance.

Prior to 2014 our ability to generate revenue and cash flow was impacted adversely by our inability to offer commercially acceptable levels of Duplex service due to the degradation of our first-generation constellation.

As a result, we improved the design of our second-generation constellation to last twice as long in space and have 40% greater capacity compared to our first-generation constellation.

Despite working closely with satellite manufacturers to determine the causes of anomalies and mitigate them in second-generation satellites and to provide for intrasatellite redundancies for certain critical components to minimize or eliminate service disruptions in the event of failure, anomalies are likely to be experienced in the future, whether due to the types of anomalies described above or arising from the failure of other systems or components, and intrasatellite redundancy may not be available upon the occurrence of such anomalies.

There can be no assurance that, in these cases, it will be possible to restore normal operations.

We cannot guarantee that we could successfully develop and implement a solution to these anomalies.

In order to maintain commercially acceptable service long-term, we must obtain and launch additional satellites from time to time.

We cannot provide any assurance that negotiations with satellite manufacturers will be successful or at commercially reasonable prices.

Our ground stations required upgrades to enable us to integrate our second-generation technology and services.

We entered into various contracts to upgrade our ground network.

During 2016 we completed this work according to the Hughes and Ericsson contracts.

In connection with the 2018 launch of Sat-Fi2 ® , the first device to operate on our upgraded ground network, we placed into service the portion of the next-generation ground component (including associated developed technology and software upgrades), which represented the gateways capable of supporting commercial traffic at that time.

Certain other gateways around the world have since been placed into service and others are expected to be placed into service in the coming months.

The installation of RANs at additional sites outside the scope of the core Hughes contract will occur over time, and the completion of these upgrades may not be successful.

If we experience operational disruptions with respect to our gateways or operations center, we may not be able to provide service to our customers.

Our satellite network traffic is supported by 22 gateways distributed around the globe.

Our satellite network traffic is supported by our gateways distributed around the globe.

We operate our satellite constellation from our Network Operations Control Centers at three locations (France, California and Louisiana) to provide geo-redundancy and ongoing coverage.

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• changes in technology which may make all or a portion of our satellite fleet obsolete.

It is possible that the actual orbital lives of one or more of our existing satellites may also be shorter than originally anticipated.

It is possible that the actual orbital lives of one or more of our existing satellites may be shorter than originally anticipated.

Further, it is possible that the total available payload capacity of a satellite may need to be reduced prior to the satellite reaching its end-of-orbital life.

We periodically review the expected orbital life of each of our satellites using current engineering data.

A reduction in the orbital life of any of our satellites could result in a reduction of the revenues generated by that satellite, the recognition of an impairment loss and an acceleration of capital expenditures.

Reducing the available payload capacity prior to the end of a satellite's orbital life, if required, would reduce our revenues from the satellite.

The potential impact on our revenues from a reduction in the orbital life of one or more satellites may vary depending on the satellite's orbital location as well as the type of device and service a customer is using.

Replacing a satellite upon the end of its service life will require us to make significant expenditures.

To ensure no disruption in our business and to prevent loss of customers, we may be required to commence a multi-year process to construct and launch replacement satellites prior to the expected end of service life of the satellites then in orbit.

There can be no assurance that we will have sufficient cash, cash flow or be able to obtain third-party or shareholder financing to fund such expenditures on favorable terms, if at all.

Should we not have sufficient funds available to replace our satellites, it could have a material adverse effect on our results of operations, business prospects and financial condition.

A reduction in the orbital life of any of our satellites could result in a reduction of revenue, the recognition of an impairment loss and an acceleration of capital expenditures.

The potential impact on our revenue from a reduction in the orbital life of one or more satellites may vary depending on the satellite's orbital location as well as the type of device and service a customer is using.

The implementation of our business plan depends on increased demand for wireless communications services via satellite (including IoT applications) and via terrestrial mobile broadband networks, both for our existing services and products and for new services and products.

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A lack of demand could impair our ability to sell our services and develop and successfully market new services, could exert downward pressure on prices, or both.

This, in turn, could decrease our revenues and profitability and adversely affect our ability to increase our revenues and profitability over time.

We plan to introduce additional Duplex, SPOT and Commercial IoT products and services as well as low-power terrestrial mobile broadband services.

This, in turn, could decrease our revenue and profitability and adversely affect our ability to increase our revenue and profitability over time.

We plan to introduce new products and services that work over our network as well as terrestrial mobile broadband services.

However, we cannot predict with certainty the potential longer-term demand for these products and services or the extent to which we will be able to meet demand.

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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;

our ability to market successfully our Duplex, SPOT and Commercial IoT products and services;

• our ability to market successfully our products and services;

• our ability to develop and deploy innovative network management techniques to permit mobile devices to transition between satellite and terrestrial modes;

our ability to sell our current inventory;

• the cost and availability of user equipment that operates on our network;

the effectiveness of our competitors in developing and offering similar products and services and in persuading our customers to switch service providers;

• the effectiveness of our competitors in developing and offering similar products and services;

• our ability to successfully predict market trends;

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• our ability to raise additional capital on acceptable terms when required.

We incurred operating losses in the past three years and we are likely to continue incurring such losses.

We incurred operating losses of $ 64.0 million , $ 47.4 million and $ 68.4 million in 2019 , 2018 , and 2017 , respectively.

These losses resulted, in part, from depreciation expense related to our second-generation satellites, which we placed into service in 2010, 2011 and 2013, and ground infrastructure, which we began to place into service in 2018.

We designed our second-generation network to have a 15-year life, and we expect that we will continue to recognize high levels of depreciation expense commensurate with its estimated useful life.

Rapid and significant technological changes in the satellite communications industry may impair our competitive position and require us to make significant capital expenditures, which may require additional capital that has not been arranged.

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New technology could render our system obsolete or less competitive by satisfying consumer demand in more attractive ways or through the introduction of incompatible standards.

Particular technological developments that could adversely affect us include the deployment by our competitors of new satellites with greater power, greater flexibility, greater efficiency or greater capabilities, as well as continuing improvements in terrestrial wireless technologies.

We must continue to commit to make significant capital expenditures to keep up with technological changes and remain competitive.

Particular technological developments that could adversely affect us include the deployment by our competitors of new satellites with greater power, flexibility, efficiency or capabilities, as well as continuing improvements in terrestrial wireless technologies.

We must continue to keep up with technological changes and remain competitive.

Customer acceptance of the services and products that we offer will continually be affected by the technology in our product and service offerings relative to competitive offerings.

New technologies may be protected by patents and therefore may not be available to us.

We expect to face competition in the future from companies using new technologies and new satellite systems.

We expect to face competition from companies using new technologies and new satellite systems.

The hardware and software we utilize in operating our first-generation gateways were designed and manufactured over 20 years ago and portions have deteriorated.

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We may not be able to raise adequate capital to finance our business strategies, or we may be able to do so only on terms that significantly restrict our ability to operate our business.

Implementation of our business strategy requires a substantial outlay of capital.

Implementation of our longer-term business strategy requires a substantial outlay of capital.

As we pursue business strategies and seek to respond to developments in our business and opportunities and trends in our industry, our actual capital expenditures may differ from our expected capital expenditures.

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If we determine that we need to obtain additional funds through external financing and are unable to do so, we may be prevented from fully implementing our business strategy.

We have substantial contractual obligations, which may require additional capital, the terms of which have not been arranged.

The terms of our Facility Agreement could complicate raising additional capital.

As of December 31, 2019 , our current sources of liquidity include cash on hand ( $7.6 million ), restricted cash ( $0.6 million ) and future cash flows from operations.

We also have non-current restricted cash ( $50.9 million ), which consists primarily of a debt service reserve account, which is pledged to secure all of our obligations under the Facility Agreement.

This account will be used towards the final scheduled principal payment due upon maturity.

Our operating expenses for the twelve-month period ended December 31, 2019 were $195.8 million .

Our short-term and long-term liquidity requirements include primarily paying our debt service obligations and funding our operating costs.

We cannot provide assurance that we will not experience a liquidity shortfall in the short or long-term.

Restrictions in our Facility Agreement and our Second Lien Term Loan Facility limit the types of financings we may undertake and our discretion over the use of net cash proceeds from certain future financings.

Long-Term Debt and Other Financing Arrangements in our Consolidated Financial Statements in Part II, Item 8 of this Report for further discussion of our debt agreements.

We cannot assure you that we will be able to obtain additional financing when required on reasonable terms or at all.

If we cannot obtain it in a timely manner, we may be unable to execute our business plan and fulfill our financial commitments.

If we do not develop, acquire and maintain proprietary information and intellectual property rights, it could limit the growth of our business and reduce our market share.

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Any such claims, if made, may prevent or limit our sales of products or services or increase our costs.

We license much of the software we require to support critical gateway operations from third parties, such as Hughes, Ericsson and Qualcomm.

We license much of the software we require to support critical gateway operations from third parties.

This software was developed or customized specifically for our use.

We also license technical information for the design, manufacture and sale of our products.

We license technical information for the design, manufacture and sale of our products.

This intellectual property is essential to our ability to continue to operate our constellation and sell our products and services.

We also license software to support customer service functions, such as billing, from third parties that developed or customized it specifically for our use.

We license software to support customer service functions, such as billing, from third parties that developed or customized it specifically for our use.

If the third-party licensors cease to support and service our software, or our licenses are no longer available on commercially reasonable terms, it might be difficult, expensive or impossible for us to obtain such services from alternative vendors.

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• prohibit us from selling some or all of our products or offering some or all of our services.

We have a limited supply of Duplex handsets and rely on a limited number of key vendors for timely supply of equipment and services.

If our key vendors fail to provide equipment and services to us, we may face difficulties in finding alternative sources, which would adversely impact our operations.

We have a limited quantity of our Duplex handsets in inventory and have not contracted with a manufacturer to produce additional phone inventory.

We have a "buy-back" program with former customers and we have seen meaningful success re-offering refurbished handsets into the market in an effort to mitigate the lack of new handset inventory.

However, the number of devices received from the "buy-back" may not be sufficient to meet our customers' demand.

Additionally, in some cases we contract with manufacturers to provide us with other equipment inventory for the devices we sell.

If these manufacturers do not take on or fulfill future orders or fail to perform under our current contracts, we may be unable to continue producing and selling this equipment to customers at a reasonable cost to us, or there may be delays in production and decreases in sales.

Lack of availability of components from the electronics industry, required in our retail products, gateways and satellites could delay or adversely impact our operations.

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• lack of local acceptance or knowledge of our products and services;

lack of recognition of our products and services;

• unavailability of or difficulties in establishing relationships with distributors;

significant investments, including the development and deployment of dedicated, physical gateways in countries that require them to connect the traffic coming to and from their territory;

• significant investments, including the development and deployment of gateways in countries that require them to connect the traffic coming to and from their territory;

• instability of international economies and governments;

• changes in laws and policies affecting trade and investment in other jurisdictions;

noncompliance with the Foreign Corrupt Practices Act ("FCPA"), the UK Bribery Act, sanctions laws and export controls;

• noncompliance with the Foreign Corrupt Practices Act ("FCPA"), UK Bribery Act, sanctions laws and export controls;

• exposure to varying legal standards in other jurisdictions, including intellectual property protection and other similar laws and regulations;

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Approximately 28% and 31% of our total revenue was to customers primarily located in Canada, Europe, Central America, and South America during 2020 and 2019, respectively.

Our results of operations for 2019 and 2018 included net gains of approximately $0.1 million and net losses of $3.1 million , respectively, on foreign currency transactions.

Our results of operations for 2020 and 2019 included net losses of approximately $0.7 million and net gains of $0.1 million, respectively, on foreign currency transactions.

We may be unable to offset unfavorable currency movements as they adversely affect our revenue and expenses.

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We sell our products and services in the United Kingdom (the “UK”) and throughout Europe.

In particular, the United Kingdom is the largest market in Europe for our SPOT product family.

On June 23, 2016, the UK voted in an advisory referendum for the UK to leave the European Union (the “EU”) and, subsequently, on March 29, 2017, the UK government began the formal process of leaving the EU.

In particular, the UK is the largest market in Europe for our SPOT product family.

The UK withdrew from the EU on January 31, 2020.

The exit process (commonly referred to as “Brexit”) will involve the negotiation of new trade and other agreements.

Brexit creates legal, regulatory, and economic uncertainty that could have a negative impact on our business.

If the UK changes the regulatory structure for telecommunications products, it is possible that we would not be able to comply or compliance would become cost prohibitive.

Similarly, post-Brexit trade agreements could impose import taxes or other expenses on our products, which may increase the price of our products sold in the UK.

We also face currency exchange risk as a result of Brexit.

Although most of our sales are denominated in U.S.

dollars, we also receive payments in international currencies, including the pound and the euro.

We therefore incur currency translation risk when currency values fluctuate and the U.S.

dollar is strong relative to other currencies.

Furthermore, a strong U.S.

dollar increases the price of our products in international markets, which could reduce demand in those markets for our products.

Effective January 1, 2021, the EU and UK entered into the Trade and Cooperation Agreement regarding trade policies and other political and strategic issues.

The future consequences of Brexit are unknown at this time, but Brexit has created legal, regulatory, and currency risk that may have a materially adverse impact on our business.

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Satellite-based Competitors

There are currently at least three other MSS operators providing services similar to ours on a global or regional basis:

Iridium, Thuraya and Inmarsat.

is also a competitor in the Machine-to-Machine and IoT market.

There are currently at least four other MSS operators providing services similar to ours on a global or regional basis:

Iridium, Thuraya, Inmarsat and ORBCOMM Inc.

The provision of satellite-based products and services is subject to downward price pressure when the capacity exceeds demand or as new competitors enter the marketplace with competitive pricing strategies.

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DISH Network received FCC approval to offer terrestrial wireless services over the MSS spectrum that previously belonged to TerreStar and ICO Global.

Further, Ligado Networks (formerly LightSquared) continues to seek final FCC approval to build out a wireless network utilizing its MSS spectrum.

Further, Ligado Networks (formerly LightSquared) also received FCC approval to build out a wireless network utilizing its MSS spectrum.

Any of these competitors could deploy terrestrial mobile broadband networks before we do, could combine with existing terrestrial networks that provide them with greater financial or operational flexibility than we have or could offer wireless services, including mobile broadband services, that customers prefer over ours.

We have a substantial amount of indebtedness, which may adversely affect our cash flow and our ability to operate our business, including our ability to incur additional indebtedness.

As of December 31, 2019 , the principal balance of our debt obligations was $528.4 million , consisting of $190.4 million under the Facility Agreement, $201.5 million under the Second Lien Term Loan Facility, $135.1 million outstanding under the Loan Agreement with Thermo and $1.4 million under the 8.00% Convertible Senior Notes Issued in 2013 (the "2013 8.00% Notes").

We have a significant amount of indebtedness, which may adversely affect our cash flow and our ability to operate our business, including our ability to incur additional indebtedness.

As of December 31, 2020, our current sources of liquidity include cash on hand ($13.3 million), restricted cash ($3.6 million) and future cash flows from operations.

We also have non-current restricted cash ($51.1 million), which consists primarily of a debt service reserve account, which is pledged to secure all of our obligations under the First Lien Facility Agreement.

This account will be used towards the final scheduled principal payment due upon maturity.

Our operating expenses for the twelve-month period ended December 31, 2020 were $187.7 million.

Our short-term and long-term liquidity requirements include primarily paying our debt service obligations and funding our operating costs.

We cannot provide assurance that we will not experience a liquidity shortfall in the short or long-term.

As of December 31, 2020, the principal balance of our debt obligations was $423.9 million, consisting of $187.0 million under the First Lien Facility Agreement, $230.6 million under the Second Lien Facility Agreement, $1.4 million under the 8.00% Convertible Senior Notes Issued in 2013 (the "2013 8.00% Notes") and $5.0 million under the PPP Loan.

Our significant indebtedness could have several consequences.

It could increase our vulnerability to adverse economic, industry or competitive developments by dictating that a substantial portion of cash flow from operations be dedicated to the payment of principal and interest on our indebtedness and therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, return of capital to shareholders, and future business opportunities.

Our indebtedness could restrict us from making strategic acquisitions by limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate and other purposes.

Our indebtedness could restrict us from paying dividends to our shareholders.

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Restrictive covenants in our debt agreements may limit our operating and financial flexibility and our inability to comply with these covenants could have significant implications.

Our Facility Agreement and Second Lien Term Loan Facility contain a number of significant restrictions and covenants.

Our First Lien Facility Agreement and Second Lien Facility Agreement contain a number of significant restrictions and covenants.

Long-Term Debt and Other Financing Arrangements in our Consolidated Financial Statements in Part II, Item 8 of this Report for further discussion of our debt covenants.

Complying with these restrictive covenants, including financial and non-financial covenants in our Facility Agreement and Second Lien Term Loan Facility, as well as those that may be contained in any agreements governing future indebtedness, may impair our ability to finance our operations or capital needs or to take advantage of favorable business opportunities.

Our facility agreements include a limitation on expenditures in connection with spectrum rights of $20 million, which may prohibit us from making certain expenditures that we consider accretive to our business and would otherwise make.

Complying with these restrictive covenants, including financial and non-financial covenants in our First Lien Facility Agreement and Second Lien Facility Agreement, as well as those that may be contained in any agreements governing future indebtedness, may impair our ability to finance our operations or capital needs or to take advantage of favorable business opportunities.

Our facility agreements include a limitation on expenditures in connection with spectrum rights, which may prohibit us from making certain expenditures that we consider accretive to our business and would otherwise make.

Our ability to comply with these covenants will depend on our future performance, which may be affected by events beyond our control.

Our failure to comply with these covenants would be an event of default.

An event of default under the Facility Agreement or the Second Lien Term Loan Facility would permit the lenders to accelerate the indebtedness under these agreements.

An event of default under the First Lien Facility Agreement or Second Lien Facility Agreement would permit the lenders to accelerate the indebtedness under these agreements.

That acceleration would permit holders of our obligations under other agreements that contain cross-acceleration provisions to accelerate our obligations to them.

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Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources of this Report for further discussion.

Pursuing strategic transactions may cause us to incur additional costs, obligations and risks.

We may pursue acquisitions, mergers, joint ventures, partnerships or other strategic transactions on an opportunistic basis.

We may face costs and risks arising from any such transactions.

These may include legal, operational, financial and other costs and risks.

For instance, in 2018, we incurred approximately $11.2 million in costs for consultants and other advisors related to the now-terminated merger (and related litigation) discussed in Note 12:

Related Party Transactions and Note 10:

Contingencies to our Consolidated Financial Statements in Part II, Item 8 of this Report.

In addition, if we choose to engage in any major business combination or similar strategic transaction, we may require significant external financing in connection with the transaction.

Depending on market conditions, investor perceptions of us, and other factors, we may not be able to obtain capital on acceptable terms, in acceptable amounts or at appropriate times to implement any such transaction.

Our Facility Agreement and other debt obligations contain covenants which limit our ability to engage in specified forms of capital transactions without lender consent, which may be impossible to obtain.

Any such financing, if obtained, may further dilute our existing stockholders.

Our networks and those of our third-party service providers and customers may be vulnerable to unauthorized or unlawful access.

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In addition, we could face liability to end users alleging that their personal information is not collected, stored, transmitted, used or disclosed appropriately or in accordance with our privacy policies or applicable laws, including claims and litigation resulting from such allegations.

Any failure on our part to protect information pursuant to applicable regulations could result in a loss of user confidence, reputation and customers, which could materially impact our results of operations and cash flows.

Any failure on our part to protect information

pursuant to applicable regulations could result in a loss of user confidence, reputation and customers, which could materially impact our results of operations and cash flows.

Due to fluctuations in the insurance market, we may be unable to obtain and maintain our insurance coverages, and the insurance we obtain may not cover all risks we undertake.

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We may also become subject to additional tax liabilities as a result of changes to tax laws in any of our applicable tax jurisdictions, which in certain circumstances could have a retroactive effect.

Our revenues are subject to changes in global economic conditions and consumer sentiment and regarding discretionary spending.

Financial markets are uncertain and could adversely impact global economic conditions.

These conditions could lead to reduced consumer spending, especially for discretionary travel and related products.

A substantial portion of the potential addressable market for our consumer retail products and services relates to recreational users, such as mountain climbers, campers, kayakers, sport fishermen and wilderness hikers.

These potential customers may reduce their recreational activities or discretionary spending due to economic conditions, which could adversely affect our business, financial condition, results of operations and liquidity.

We are exposed to trade credit risk in the ordinary course of our business activities.

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Any increase in the nonpayment or nonperformance by our customers could reduce our cash flows.

To illustrate, our Commercial IoT business is heavily concentrated in the oil and gas industry and was negatively impacted by the downturn in this industry in recent years.

As an example, our largest customer during 2018 and 2019 is a reseller to oil and gas companies.

To illustrate, our Commercial IoT business is heavily concentrated in the oil and gas industry and was negatively impacted by the downturn in this industry in recent years, most specifically resulting from the COVID-19 pandemic.

As an example, our largest customer for the last three years is a reseller to oil and gas companies.

A high-volume customer not performing its trade obligations to us could adversely affect our cash flow and financial condition.

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Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Our obligations under our Facility Agreement bear interest at a variable rate.

Our obligations under our First Lien Facility Agreement bear interest at a variable rate.

As a result, an increase in interest rates could result in a substantial increase in interest expense.

Additionally, in July 2017, the Financial Conduct Authority in the United Kingdom ("FCA") announced that the Libor rate would be phased out and financial institutions would no longer need to make Libor submissions after 2021.

Our Facility Agreement provides for a fallback rate in the event Libor is unable to be determined.

Our First Lien Facility Agreement provides for a fallback rate in the event Libor is unable to be determined.

At this time, we cannot provide assurance of the impact this Libor phase out will have on our financial statements and internal processes.

The loss of skilled management and personnel could impair our operations.

Our performance is substantially dependent on the performance and institutional knowledge of our senior management and key scientific and technical personnel.

Further, we depend on the ability to attract talented employees to maintain consistent performance of our management, scientific and technical teams and the succession of institutional knowledge.

Losing the services of any member of our senior management, scientific or technical staff or the inability to attract key employees may significantly delay or prevent the achievement of business objectives and could have a material adverse effect on our business, operating results and financial condition.

A natural disaster could diminish our ability to provide communications service.

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We have been in the past from time to time, and may be in the future, subject to litigation and investigations that could have a substantial, adverse impact on our business.

From time to time we are subject to litigation, including claims related to our business activities, such as the securities claim, or Action, described in Note 10:

Contingencies in our Consolidated Financial Statements in Part II, Item 8 of this Report.

We have also been in the past from time to time, and may be in the future, subject to investigations by regulators and governmental agencies, including from the United States Department of the Treasury's Office of Foreign Assets Control, the United States Department of Commerce, Bureau of Industry and Security and the United States Immigration and Customs Enforcement.

From time to time we are subject to litigation, including claims related to our business activities.

We have also been in the past, and may be in the future, subject to investigations by regulators and governmental agencies, including the United States Department of the Treasury's Office of Foreign Assets Control, the United States Department of Commerce, Bureau of Industry and Security and the United States Immigration and Customs Enforcement.

Irrespective of their merits, litigation and investigations may be both lengthy and disruptive to our operations and could cause significant expenditure and diversion of management attention.

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As a result, we may be subject to new regulations, demand for our services may decrease, and we could face liability based on alleged health risks.

There has been adverse publicity concerning alleged health risks associated with radio frequency transmissions from portable hand-held telephones that have transmitting antennas.

There has been adverse publicity concerning alleged health risks associated with radio frequency transmissions from portable hand-held telephones and other telecommunications devices that have transmitting antennas.

Lawsuits have been filed against participants in the wireless communications industry alleging a number of adverse health consequences, including cancer, as a result of wireless phone usage.

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Any such finding could reduce our revenue and profitability and expose us and other communications service providers or device sellers to litigation, which, even if frivolous or unsuccessful, could be costly to defend.

If consumers' health concerns over radio frequency emissions increase, they may be discouraged from using wireless handsets.

Further, government authorities might increase regulation of wireless handsets as a result of health concerns.

Any actual or perceived risk from radio frequency emissions could reduce the number of our subscribers and demand for our products and services.

Furthermore, any actual or perceived risk from radio frequency emissions could reduce the number of our subscribers and demand for our products and services.

Risks Related to Government Regulations

Our business is subject to extensive government regulation, which mandates how we may operate our business and may increase our cost of providing services, slow our expansion into new markets and subject our services to additional competitive pressures.

Our ownership and operation of an MSS system are subject to significant regulation in the United States by the FCC and in foreign jurisdictions by similar authorities.

Additionally, our use of our licensed spectrum globally is subject to coordination by the ITU.

Our second-generation constellation has been licensed and registered in France.

The rules and regulations of the FCC or these foreign authorities may change and may not continue to permit our operations as currently conducted or as we plan to conduct them.

Further, certain foreign jurisdictions may decide to allow additional uses within our ITU-allocation of spectrum that may be incompatible with our continued provision of MSS.

Failure to provide services in accordance with the terms of our licenses or failure to operate our satellites, ground stations, or other terrestrial facilities (including those necessary to provide ancillary terrestrial component "ATC" services) as required by our licenses and applicable government regulations could result in the imposition of government sanctions against us, up to and including cancellation of our licenses.

Our system requires regulatory authorization in each of the markets in which we or the IGOs provide service.

Our business is subject to extensive government regulation that will impact our future success.

Our MSS system is subject to significant regulation by the FCC in the United States, by the ARCEP and ANFR in France and in other foreign jurisdictions where we do business by similar authorities.

Additionally, the availability of globally harmonized spectrum on which our MSS system depends is managed by the ITU.

The rules and regulations of these regulatory authorities are subject to change and may not continue to permit our operations as currently conducted or as we plan to conduct them.

Further, certain regulatory authorities may decide to allow additional uses within our ITU-allocation of spectrum that may be incompatible with our continued provision of MSS.

Failure to operate our satellites, ground stations, mobile earth terminals or other facilities as required by our licenses and applicable government regulations could result in the imposition of government sanctions against us, up to and including cancellation of our licenses.

Our system requires regulatory authorization in each of the jurisdictions in which we or the IGOs provide service.

We and the IGOs may not be able to obtain or retain all regulatory approvals needed for operations.

Regulatory changes, such as those resulting from judicial decisions or adoption of treaties, legislation or regulation in countries where we operate or intend to operate, may also significantly affect our business.

Because regulations in each country are different, we may not be aware if some of the IGOs and/or persons with which we or they do business do not hold the requisite licenses and approvals.

Our current regulatory approvals could now be, or could become, insufficient in the view of foreign regulatory authorities.

Furthermore, any additional necessary approvals may not be granted on a timely basis, or at all, in all jurisdictions in which we wish to offer services, and applicable restrictions in those jurisdictions could become unduly burdensome.

Our operations are subject to certain regulations of the United States State Department's Directorate of Defense Trade Controls (the export of satellites and related technical data), United States Treasury Department's Office of Foreign Assets Control (financial transactions and transactions with sanctioned persons or countries) and the United States Commerce Department's Bureau of Industry and Security (export of satellites and related technical data, our gateways and phones) and as well as other similar foreign regulations.

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Our business plan includes utilizing our licensed MSS spectrum to provide terrestrial wireless services, including mobile broadband applications, around the world.

In support of these plans, in December 2016, the FCC adopted a Report and Order establishing rules permitting us to offer such services.

In August 2017, the FCC modified Globalstar's MSS licenses, granting it authority to provide terrestrial broadband services over approximately 11.5 MHz of its satellite spectrum at 2483.5 MHz to 2495.0 MHz.

Globalstar’s MSS licenses, including its terrestrial authority, are valid through various specified terms, which we will seek to renew.

Our MSS licenses, including our terrestrial authority, are valid through various specified terms, which we will seek to renew.

In addition, we will need to comply with certain conditions in order to provide terrestrial broadband service under our MSS licenses, including obtaining FCC certifications for our equipment that will utilize this spectrum authority.

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Our anticipated future revenues and profitability is dependent upon the commercial success of their offerings.

Further, we can provide no assurance that we can obtain authorizations to use our MSS spectrum for terrestrial wireless services in all countries, or any specific country.

Nor can we provide any assurance that any particular country will not license the terrestrial use of our MSS spectrum to a third party without our consent.

Other future regulatory decisions could reduce our existing spectrum allocation or impose additional spectrum sharing agreements on us, which could adversely affect our services and operations.

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However, the FCC or other regulatory authorities may require us to share spectrum with other systems that are not currently licensed by the United States or any other jurisdiction.

On February 11, 2013, Iridium filed its own petition for rulemaking seeking to have the FCC reallocate 2.725 MHz of "Big LEO" spectrum from 1616-1618.725 MHz for Iridium’s exclusive use.

Subsequently, Iridium modified its petition, requesting the ability to share additional spectrum licensed to Globalstar at 1616-1618.725 MHz.

On November 1, 2017, Iridium withdrew its petition for rulemaking without prejudice.

There can be no assurance, however, that Iridium will not file a similar petition for rulemaking in the future that requests either the redesignation of some amount of our 1.6 GHz spectrum for Iridium’s exclusive use or the sharing of additional spectrum licensed to us.

An adverse result in this proceeding could materially affect our ability to provide both one-way and two-way mobile satellite services.

We registered our second-generation constellation with the ITU through France rather than the United States.

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however, we are able to use the frequencies during the coordination process in accordance with our national licenses.

In March 2014, the FCC adopted an order related to the 5 GHz band which, among other things, expanded the use of unlicensed terrestrial mobile broadband services within our C-band Forward Link (Earth Station to Satellite), which operates at 5091-5250 MHz.

As part of this order, the FCC adopted certain technical requirements for the expanded unlicensed use within our licensed spectrum which were intended to protect our services from harmful interference.

However, since the FCC order has been adopted, we have identified a noticeable increase in the ambient level of interference in the 5 GHz band.

Although this increase does not currently affect the quality of our service to customers, should the noise floor rise above a certain level, we could experience a significant reduction in our satellite downlink capacity, resulting in degradation of quality of our service to customers.

In May 2018, we petitioned the FCC to open a Notice of Inquiry to assess the potential future effects of continuing to allow unlicensed use of the 5 GHz band.

We cannot assure you that the FCC will take any action in response to our Notice of Inquiry.

Furthermore, other regulatory jurisdictions internationally may also consider similar expanded unlicensed use in the 5 GHz band that may have a significant adverse impact on our ability to provide mobile satellite services.

The FCC and other regulatory jurisdictions internationally are permitting expanded unlicensed use of the 5 GHz band including within our C-band Forward Link (earth station to satellite), which operates at 5091-5250 Mhz which may have a significant adverse impact on our ability to provide mobile satellite services.

If the FCC revokes, modifies or fails to renew or amend our licenses, our ability to operate may be curtailed.

We hold FCC licenses for the operation of certain of our satellites, our U.S.

We hold FCC licenses for the operation of our satellites, our U.S.

gateways and other ground facilities and our mobile earth terminals that are subject to revocation if we fail to satisfy specified conditions or meet prescribed milestones.

The FCC licenses are also subject to modification by the FCC.

The FCC licenses are also subject to renewal and modification by the FCC.

There can be no assurance that the FCC will renew the FCC licenses we hold.

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If our French regulator, or any other regulator, revokes, modifies or fails to renew or amend our licenses, our ability to operate may be curtailed.

We hold licenses issued by, and subject to the continued regulatory jurisdiction of, the French Ministry for the Economy, Industry and Employment, French Ministry in charge of Space Activities ("MESR") and ARCEP, the French independent administrative authority of post and electronic communications regulations, for the operation of our second-generation satellites.

We hold licenses issued by, and subject to the continued regulatory jurisdiction of, the French Ministry in charge of Space and the ARCEP, the French independent administrative authority of post and electronic communications regulations, for the operation of our second-generation satellites.

These licenses are subject to revocation if we fail to satisfy specified conditions or meet prescribed milestones.

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If we fail to maintain such licenses within any particular country, we may not be able to continue to operate the ground infrastructure located within that country, which could prevent us from continuing to provide mobile satellite communications services within that region.

For example, ANATEL, the national telecommunications agency of Brazil, imposed a fine against us because we operated our gateway stations in Brazil without a valid license while we were working to renew such license.

In October 2018, this matter was referred to the Brazil federal authorities, who are currently performing an investigation concerning the action of certain employees.

We cannot predict the outcome of this investigation at this time, but the investigation and any potential penalties is limited to the certain employees being investigated.

Changes in international trade regulations and other risks associated with foreign trade could adversely affect our sourcing from foreign manufacturers .

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Removal of our common stock from listing on the NYSE American may also make it more difficult for us to raise capital through the sale of our securities.

Additionally, if our common stock is not listed on a U.S.

national stock exchange or approved for quotation and trading on a national automated dealer quotation system or established automated over-the-counter trading market, then holders of our 2013 8.00% Notes would have the option to require us to repurchase the notes, which we may lack sufficient financial resources to do.

Restrictive covenants in our Facility Agreement do not allow us to pay dividends on our common stock for the foreseeable future, which may affect the market for our shares.

Restrictive covenants in our First Lien Facility Agreement do not allow us to pay dividends on our common stock for the foreseeable future, which may affect the market for our shares.

We do not expect to pay cash dividends on our common stock.

Our Facility Agreement currently prohibits the payment of cash dividends.

Our First Lien Facility Agreement currently prohibits the payment of cash dividends.

Any future dividend payments are within the discretion of our board of directors and will depend on, among other things, our results of operations, working capital requirements, capital expenditure requirements, financial condition, contractual restrictions, business opportunities, anticipated cash needs, provisions of applicable law and other factors that our board of directors may deem relevant.

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• actual or anticipated changes in the regulatory environment affecting our industry;

• actual or anticipated changes in the value of terrestrial spectrum;

• actual or anticipated sales of common stock by our controlling stockholder or others;

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As of December 31, 2020, there were 321.1 million shares available for future issuance (of which 100 million are designated as preferred), of which approximately 4.2 million shares were contingently issuable upon the exercise of stock options, the conversion of convertible notes and the vesting of restricted stock awards.

On February 19, 2020, Thermo converted the entire principal amount outstanding under its 2009 Loan Agreement resulting in the issuance of 200.1 million shares of common stock;

these shares were included in the contingently issuable count as of December 31, 2019.

We have issued and expect to issue additional shares of common stock upon the exercise of the warrants issued with our Second Lien Facility Agreement.

As of December 31, 2020, 115.0 million warrants were outstanding and not reflected in the 4.2 million shares contingently issuable as they were out of the money.

We may issue additional shares of our common stock or other securities that are convertible into, or exercisable for, common stock for raising capital or other business purposes.

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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;

change of control provisions in our Facility Agreement and Second Lien Term Loan Facility, 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;

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;

• change of control provisions in our First Lien Facility Agreement and Second Lien 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;

• 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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As of December 31, 2020, Thermo owned approximately 62% of our outstanding common stock;

additionally, Thermo owns convertible notes and warrants that may be converted into additional shares of common stock.

As previously disclosed, in February 2020, Thermo converted the entire principal amount outstanding due under its 2009 Loan Agreement resulting in the issuance of 200.1 million shares of voting common stock;

this issuance increased Thermo's ownership of common stock to approximately 63%.

additionally, Thermo owns warrants that may be converted into additional shares of common stock.

We have depended substantially on Thermo to provide capital to finance our business.

Although extraordinary corporate transactions, material sales of assets and certain transactions with related parties must be approved by the Strategic Review Committee, to the extent these and other matters are also subject to a vote of our shareholders, Thermo is able to control such vote.

These matters include the election of certain members of our board of directors and numerous other matters, including changes of control and other significant corporate transactions, so long as these transactions are not between Thermo and Globalstar and until such time as Thermo shall no longer be the beneficial owner of 45% or more of our outstanding common stock.

We have depended substantially on Thermo to provide capital to finance our business.

In 2006 and 2007, Thermo purchased an aggregate of $200 million of common stock at prices substantially above market.

On December 17, 2007, Thermo assumed all of the obligations and was assigned all of the rights (other than indemnification rights) of the administrative agent and the lenders under our amended and restated credit agreement.

To fulfill the conditions precedent to our Facility Agreement, in 2009, Thermo converted the loans outstanding under the credit agreement into equity and terminated the credit agreement.

In addition, Thermo and its affiliates deposited $60.0 million in a contingent equity account to fulfill a condition precedent for borrowing under the Facility Agreement, purchased $20.0 million of our 5.0% Notes, which were subsequently converted into shares of common stock in 2013, purchased $11.4 million of our 2013 8.00% Notes, which were subsequently converted into shares of common stock, loaned us $37.5 million to fund our debt service reserve account under the Facility Agreement and funded a total of $65.0 million during 2013 pursuant to the terms of the Equity Commitment, Restructuring and Consent Agreement, the Common Stock Purchase Agreement and the Common Stock Purchase and Option Agreement.

In June 2017, Thermo purchased $33.0 million of our common stock to provide funds required by our lenders to obtain an amendment to our Facility Agreement.

In October 2017 and December 2018, Thermo purchased $43.3 million and $49.3 million , respectively, of our common stock in connection with our public stock offerings.

In July 2019, Thermo loaned us $53.8 million in a Subordinated Loan Agreement with other unaffiliated lenders.

In November 2019, the Subordinated Loan Agreement was paid in full with proceeds from the Second Lien Term Loan Facility, in which Thermo contributed an additional $41.3 million for a total principal loan amount of $95.1 million in the Second Lien Term Loan Facility.

Thermo is controlled by James Monroe III, our Executive Chairman.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors