What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-05 compared with 2021-11-04 · 214 added, 315 removed, 316 unchanged (63% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

Three Months Ended

2022 March 31,

Service revenue $ 29,344 $ 23,086

4 unchanged sentences

Cost of subscriber equipment sales 2,566 2,899

Cost of subscriber equipment sales - reduction in the value of inventory 71 — 853 —

Marketing, general and administrative 9,341 10,097

Reduction in value of long-lived assets 242 — 242 —

Depreciation, amortization and accretion 23,783 24,116

2 unchanged sentences

Other (expense) income:

(Loss) gain on extinguishment of debt ( 829 ) — 1,835 —

Interest income and expense, net of amounts capitalized ( 9,530 ) ( 11,574 )

Derivative gain (loss) 229 1,225 ( 2,210 ) 1,564

Foreign currency (loss) gain ( 4,752 ) 266 ( 4,642 ) ( 7,373 )

Other 473 ( 346 ) 407 ( 912 )

Derivative loss ( 486 ) ( 1,129 )

Foreign currency gain (loss) 3,232 ( 4,315 )

Total other (expense) income ( 6,667 ) ( 16,996 )

Loss before income taxes ( 20,379 ) ( 36,256 )

Income tax (benefit) expense ( 114 ) 58 317 169

Income tax expense 83 77

Net loss $ ( 20,462 ) $ ( 36,333 )

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation adjustments ( 679 ) 3,242

10 unchanged sentences

(In thousands, except par value and share data)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Current assets:

Cash and cash equivalents $ 11,519 $ 14,304

Restricted cash — 3,625

Accounts receivable, net of allowance for credit losses of $ 3,182 and $ 2,962 , respectively

4 unchanged sentences

Property and equipment, net 680,167 672,156

Restricted cash 51,068 51,068

Operating lease right of use assets, net 31,172 32,041

Prepaid satellite construction costs and related customer receivable 27,526 —

Intangible and other assets, net of accumulated amortization of $ 11,570 and $ 11,189 , respectively

3 unchanged sentences

Current liabilities:

Current portion of long-term debt $ — $ 58,824

Accounts payable $ 7,987 $ 6,247

Vendor financing 32,700 —

Accrued expenses 25,537 28,947

Payables to affiliates 266 444

Recoupment of advance payments 12,500 —

Deferred revenue 37,192 25,927

Total current liabilities 103,682 61,565

Long-term debt, less current portion 286,881 326,586

Long-term debt 246,756 237,932

Operating lease liabilities 28,538 29,237

2 unchanged sentences

Total non-current liabilities 397,512 387,110

Commitments and contingencies

Commitments and contingencies (Note 8)

Stockholders’ equity:

Preferred Stock of $ 0.0001 par value;

100,000,000 shares authorized and none issued and outstanding at September 30, 2021 and December 31, 2020, respectively

100,000,000 shares authorized and none issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Series A Preferred Convertible Stock of $ 0.0001 par value;

one share authorized and none issued and outstanding at September 30, 2021 and December 31, 2020, respectively

one share authorized and none issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Voting Common Stock of $ 0.0001 par value;

2,150,000,000 and 1,900,000,000 shares authorized at September 30, 2021 and December 31, 2020, respectively;

1,793,306,938 and 1,674,668,617 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

2,150,000,000 shares authorized;

1,799,484,939 and 1,796,528,871 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Nonvoting Common Stock of $ 0.0001 par value;

no shares authorized and none issued and outstanding at September 30, 2021 and December 31, 2020, respectively

no shares authorized and none issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital 2,151,652 2,146,710

Accumulated other comprehensive income (loss) 325 ( 2,944 )

Accumulated other comprehensive income 1,211 1,890

Retained deficit ( 1,803,811 ) ( 1,783,349 )

13 unchanged sentences

Recognition of stock-based compensation of employee stock purchase plan — — 117 — — 117

Issuance of stock for warrant exercises 115,036 12 43,666 — — 43,678

Other comprehensive income — — — 3,242 — 3,242

Net loss — — — — ( 36,333 ) ( 36,333 )

Balances – March 31, 2021 1,791,703 $ 179 $ 2,142,290 $ 298 $ ( 1,707,057 ) $ 435,710

Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation 173 — 576 — — 576

Contribution of services — — 47 — — 47

Net issuance of stock through employee stock purchase plan and recognition of stock-based compensation 1,187 — 406 — — 406

Common stock issued in connection with conversion of 2013 8.00 % Notes

2,253 — 2,548 — — 2,548

Other comprehensive loss ( 679 ) ( 679 )

Net loss ( 20,462 ) ( 20,462 )

Balances – June 30, 2021 1,793,063 $ 179 $ 2,143,319 $ ( 2,860 ) $ ( 1,728,506 ) $ 412,132

Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation 244 — 544 — — 544

Contribution of services — — 47 — — 47

Recognition of stock-based compensation of employee stock purchase plan — — 102 — — 102

Other comprehensive income — — — 3,185 — 3,185

Net loss — — — — ( 30,885 ) ( 30,885 )

Balances – September 30, 2021 1,793,307 $ 179 $ 2,144,012 $ 325 $ ( 1,759,391 ) $ 385,125

Balances – March 31, 2022 1,799,485 $ 180 $ 2,151,652 $ 1,211 $ ( 1,803,811 ) $ 349,232

Shares Common

Amount Additional

Capital Accumulated Other Comprehensive Loss Retained

Capital Accumulated Other Comprehensive Income (Loss) Retained

Deficit Total

Balances – January 1, 2021 1,674,669 $ 167 $ 2,096,566 $ ( 2,944 ) $ ( 1,670,724 ) $ 423,065

Net issuance of restricted stock awards and recognition of stock-based compensation 3,020 1 1,729 — — 1,730

Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation 1,998 — 1,932 — — 1,932

Contribution of services — — 47 — — 47

Recognition of stock-based compensation of employee stock purchase plan — — 79 — — 79

Common stock issued in connection with conversion of Loan Agreement with Thermo 200,140 20 120,441 — — 120,461

Impact of adoption of Credit Loss Standard — — — — ( 1,684 ) ( 1,684 )

Issuance of stock for warrant exercises 115,036 12 43,666 — — 43,678

Other comprehensive income — — — 3,242 — 3,242

1 unchanged sentence

Balances – March 31, 2021 1,791,703 $ 179 $ 2,142,290 $ 298 $ ( 1,707,057 ) $ 435,710

Net issuance of restricted stock awards and recognition of stock-based compensation 1,354 — 922 — — 922

Contribution of services — — 47 — — 47

Net issuance of stock through employee stock purchase plan and recognition of stock-based compensation 1,188 — 482 — — 482

Common stock issued in connection with conversion of 2013 8.00 % Notes

44 — 16 — — 16

Other comprehensive loss — — — ( 1,368 ) — ( 1,368 )

Net loss — — — ( 24,736 ) ( 24,736 )

Balances – June 30, 2020 1,670,290 $ 167 $ 2,093,877 $ 486 $ ( 1,624,044 ) $ 470,486

Net issuance of restricted stock awards and recognition of stock-based compensation 14 — 945 945

Contribution of services — — 47 — — 47

Recognition of stock-based compensation of employee stock purchase plan — — 99 99

Common stock issued in connection with conversion of 2013 8.00 % Notes

51 — 15 — — 15

Other comprehensive loss — — — ( 91 ) — ( 91 )

Net loss — — — — ( 24,946 ) ( 24,946 )

Balances – September 30, 2020 1,670,355 $ 167 $ 2,094,983 $ 395 $ ( 1,648,990 ) $ 446,555

See accompanying notes to unaudited interim condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

2021 September 30,

Three Months Ended

2022 March 31,

Cash flows provided by operating activities:

6 unchanged sentences

Provision for credit losses 332 420

Reduction in value of long-lived assets and inventory 1,095 —

Noncash interest and accretion expense 9,406 8,275

Gain on extinguishment of debt ( 1,835 ) —

Unrealized foreign currency loss 4,639 7,850

Noncash reversal of tariff accrual ( 912 ) —

Unrealized foreign currency (gain) loss ( 3,084 ) 4,270

Other, net 186 ( 96 )

4 unchanged sentences

Other assets 460 531

Accounts payable, accrued expenses and recoupment of advance payments 15,197 261

Accounts payable and accrued expenses ( 1,643 ) 4,326

Payables to affiliates ( 178 ) ( 277 )

5 unchanged sentences

Property and equipment additions ( 1,301 ) ( 1,212 )

Sale of property and equipment 350 —

Purchase of intangible assets ( 438 ) ( 669 )

Net cash used in investing activities ( 10,451 ) ( 4,974 )

Cash flows (used in) provided by financing activities:

Principal payments of the First Lien Facility Agreement ( 126,664 ) ( 3,373 )

Cash flows provided by financing activities:

Principal payments of the 2009 Facility Agreement — ( 4,357 )

Proceeds from exercise of warrants — 43,678

Payments for debt issuance costs ( 133 ) ( 1,074 )

Proceeds from PPP Loan — 4,973

Payments for debt and equity issuance costs — ( 133 )

Proceeds from issuance of common stock and exercise of options 8 57

Net cash (used in) provided by financing activities ( 82,725 ) 872

Net cash provided by financing activities 8 39,245

Effect of exchange rate changes on cash, cash equivalents and restricted cash 89 ( 66 )

2 unchanged sentences

Cash, cash equivalents and restricted cash, end of period $ 11,519 $ 106,740

September 30,

2022 December 31,

Reconciliation of cash, cash equivalents and restricted cash

Reconciliation of cash and cash equivalents

Cash and cash equivalents $ 11,519 $ 14,304

Restricted cash (See Note 5 for further discussion on restrictions)

51,068 54,693

Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 62,374 $ 68,023

Nine Months Ended

September 30,

2021 September 30,

Total cash and cash equivalents cash shown in the statement of cash flows $ 11,519 $ 14,304

Three Months Ended

2022 March 31,

Supplemental disclosure of cash flow information:

3 unchanged sentences

Capitalized accretion of debt discount and amortization of prepaid financing costs 194 122

Forgiveness of principal and interest of Paycheck Protection Program loan 5,030 —

Principal amount of Loan Agreement with Thermo converted into common stock — 137,366

Reduction of debt discount and issuance costs due to conversion of Loan Agreement with Thermo — 17,963

Fair value of common stock issued upon conversion of Loan Agreement with Thermo — 84,059

Reduction in derivative liability due to conversion of Loan Agreement with Thermo — 1,058

Satellite construction assets acquired through vendor financing arrangement 32,700 —

See accompanying notes to unaudited interim condensed consolidated financial statements.

12 unchanged sentences

however, management believes the disclosures made are adequate to make the information presented not misleading.

These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Globalstar Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 4, 2021 (the “2020 Annual Report”).

These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Globalstar Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on February 25, 2022 (the “2021 Annual Report”).

The preparation of condensed consolidated financial statements in conformity with U.S.

2 unchanged sentences

The Company evaluates estimates on an ongoing basis.

The Company has made certain reclassifications to prior period condensed consolidated financial statements to conform to current period presentation.

These unaudited interim condensed consolidated financial statements include the accounts of Globalstar and all its subsidiaries.

All significant intercompany transactions and balances have been eliminated in the consolidation.

Intercompany transactions and balances have been eliminated in the consolidation.

In the opinion of management, the information included herein includes all adjustments, consisting of normal recurring adjustments, that are necessary for a fair presentation of the Company’s condensed consolidated statements of operations, condensed consolidated balance sheets, condensed consolidated statements of stockholders' equity and condensed consolidated statements of cash flows for the periods presented.

The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the full year or any future period.

COVID-19-Risks and Uncertainties

There are a number of uncertainties that could impact the Company's future results of operations, including the effectiveness of COVID-19 mitigation measures;

the duration of the pandemic;

global economic conditions;

changes to the Company's operations;

changes in consumer confidence, behaviors and spending;

work from home trends;

and the sustainability of supply chains.

The Company has pursued various opportunities to mitigate the risks and uncertainties resulting from COVID-19, including, but not limited to, the receipt of a $ 5.0 million loan under the Paycheck Protection Program ("PPP") and the evaluation of its eligibility for the Employee Retention Tax Credit program and relief under the American Rescue Plan Act.

In June 2021, the Small Business Administration ("SBA") fully approved the Company's request for forgiveness of all amounts outstanding, including accrued interest, under its PPP loan.

Recently Issued Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

Among other things, ASU No.

2020-06 simplifies the guidance in ASC 470 by eliminating two of the three models that require separating embedded conversion features from convertible instruments.

This ASU is effective for public entities for annual and interim periods beginning after December 15, 2021.

Early adoption is permitted as of the beginning of any interim or annual reporting period, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

For existing debt instruments, the Company does not expect this standard will have a material impact to its condensed consolidated financial statements or related disclosures.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU No.

2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans .

As part of the FASB's disclosure framework project, it has changed the disclosure requirements for defined pension and other post-retirement benefit plans as outlined in ASU No.

This ASU, which became effective for public entities for annual periods beginning after December 15, 2020, adds certain narrative disclosures and removes other disclosures related to defined benefit plans.

The Company adopted this standard when it became effective on January 1, 2021.

The adoption of this standard did not have a material effect on the Company's disclosures.

In December 2019, the FASB issued ASU No.

Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

2019-12 amends the accounting treatment for income taxes by simplifying and clarifying certain aspects of the existing guidance.

This ASU became effective for public entities for annual and interim periods beginning after December 15, 2020.

The Company adopted this standard when it became effective on January 1, 2021.

The adoption of this standard did not have a material effect on the Company's financial statements or related disclosures.

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the full year or any future period.

Disaggregation of Revenue

The following table discloses revenue disaggregated by type of product and service (amounts in thousands):

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

Three Months Ended

March 31, 2022 March 31, 2021

Service revenue:

8 unchanged sentences

Commercial IoT 1,806 1,521

Other 41 4 166 54

Total subscriber equipment sales 3,428 3,843

Total revenue $ 32,772 $ 26,929

The Company is reimbursed by the customer under the Terms Agreement for certain costs incurred by the Company as it completes its performance obligations under the contract.

During the first quarter of 2022, the Company recognized revenue of $ 6.8 million associated with these services;

this revenue is included in Engineering and other service revenue in the table above.

The Company attributes equipment revenue to various countries based on the location where equipment is sold.

1 unchanged sentence

The following table discloses revenue disaggregated by geographical market (amounts in thousands):

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

Three Months Ended

March 31, 2022 March 31, 2021

Service revenue:

10 unchanged sentences

Central and South America 429 421

Others 22 18 52 3

Total subscriber equipment sales 3,428 3,843

2 unchanged sentences

The Company has agreements with certain customers whereby the parties net settle outstanding payables and receivables between the respective entities on a periodic basis.

As of September 30, 2021 and December 31, 2020, $ 2.1 million and $ 1.9 million, respectively, related to these agreements was included in accounts receivable on the Company’s condensed consolidated balance sheet.

The Company also has agreements whereby it acts as an agent to procure goods and perform services on behalf of the customer.

As of September 30, 2021 and December 31, 2020, the Company recorded $ 12.1 million and $ 4.7 million, respectively, in accounts receivable related to these arrangements.

During 2020, one of the Company's customers filed for Chapter 11 of the United States Bankruptcy Code resulting in the Company reserving all open receivables due from the customer.

This customer's plan of reorganization was confirmed by the bankruptcy court and the order was issued in January 2021.

During 2021, the Company received payments from this customer for previously written off balances totaling $ 0.5 million.

As of March 31, 2022 and December 31, 2021, $ 1.1 million and $ 0.7 million, respectively, related to these agreements was included in accounts receivable on the Company’s condensed consolidated balance sheet.

The Company also has agreements whereby it acts as an agent to procure goods and perform services on behalf of the customer under the Terms Agreement.

As of March 31, 2022 and December 31, 2021, the Company recorded $ 7.0 million and $ 6.5 million, respectively, in accounts receivable related to these arrangements.

In connection with the Company's performance under the Terms Agreement, the Company recorded receivables totaling $ 15.6 million, which represents amounts owed by the customer for the Company's completion of performance obligations under the contract.

As of March 31, 2022, $ 5.3 million and $ 10.3 million were recorded as current and non-current receivables, respectively.

Contract Liabilities

Contract liabilities, which are included in deferred revenue on the Company’s condensed consolidated balance sheet, represent the Company’s obligation to transfer service or equipment to a customer from whom it has previously received consideration.

The amount of revenue recognized during the nine months ended September 30, 2021 and 2020 from performance obligations included in the contract liability balance at the beginning of each of the periods was $ 23.8 million and $ 27.5 million, respectively.

In general, the duration of the Company’s subscriber service contracts is one year or less.

As of September 30, 2021, the Company expects to recognize $ 26.5 million, or approximately 23 %, of its remaining performance obligations during the next twelve months .

In June and September 2021, the Company received two advance payments of $ 37.5 million each from a customer pursuant to an agreement related to the Terms Agreement described in the 2020 Annual Report.

The Company expects $ 62.5 million of these advance payments to be repaid from services provided by the Company under the Terms Agreement;

therefore, the Company has recorded this amount as long-term deferred revenue on its condensed consolidated balance sheet.

The remaining $ 12.5 million of these advance payments is subject to a recoupment provision in the Terms Agreement;

therefore, the Company has recorded this amount as a current liability since it expects this portion of the advance payments to be repaid over the next 12

The Company has also recorded $ 27.8 million as long-term deferred revenue related to additional advance payments in connection with ongoing network upgrades.

The total amount of deferred revenue associated with this customer is reflected net of contract assets of $ 1.2 million on its condensed consolidated balance sheet as of September 30, 2021.

The amount of revenue recognized during the three months ended March 31, 2022 and 2021 from performance obligations included in the contract liability balance at the beginning of these periods was $ 9.9 million and $ 10.5 million, respectively.

In general, the duration of the Company’s contracts with subscribers is one year or less.

As of March 31, 2022, the Company expects to recognize $ 37.2 million, or approximately 24 %, of its remaining performance obligations during the next twelve months .

Contract liabilities also includes advance payments from a customer pursuant to an agreement related to the Terms Agreement.

The Company received two advance payments of $ 37.5 million each from this customer in June and September 2021.

These advance payments are recorded in deferred revenue and classified as either short-term or long-term deferred revenue consistent with the expected timing of the Company's obligation to provide services to the customer over the recoupment period defined in the Terms Agreement.

As of March 31, 2022, the Company has recorded $ 13.1 million and $ 115.9 million as short-term and long-term deferred revenue, respectively, which reflects the advance payments previously described, as well as additional deferred revenue in connection with ongoing network upgrades and the satellite procurement agreement.

Reflected in the deferred revenue balance is $ 2.9 million of imputed interest associated with the significant financing component related to these advance payments.

The total amount of deferred revenue associated with this customer is also reflected net of a contract asset of $ 2.4 million in the Company's condensed consolidated balance sheet as of March 31, 2022.

The following tables disclose the components of the Company’s finance and operating leases (amounts in thousands):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Operating leases:

8 unchanged sentences

Total finance lease liabilities $ 7 $ 9

In connection with the Company's gateway expansion project related to the Terms Agreement described in the 2020 Annual Report, the Company has entered into various operating leases, predominately for new gateway sites, totaling $ 19.5 million during 2021.

The tables in this footnote reflect the relevant terms of these new leases.

The components of lease cost are reflected in the table below (amounts in thousands):

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

Three Months Ended

March 31, 2022 March 31, 2021

Operating lease cost:

1 unchanged sentence

Interest on lease liabilities 660 317

Capitalized lease cost ( 536 ) —

Finance lease cost:

Amortization of right-of-use assets 1 7

Interest on lease liabilities 1 1 1 4

Short-term lease cost 80 23

Total lease cost $ 938 $ 835

In accordance with the Terms Agreement, the Company began capitalization of certain costs to fulfill this contract starting in the second quarter of 2021, including lease expense, as shown in the table above.

These capitalized lease costs will be amortized over the expected term of the related performance obligation.

Interest on lease liabilities was less than $ 0.1 million for each of the three months ended March 31, 2022 and 2021;

accordingly, this interest is not shown in the table above.

Weighted-Average Remaining Lease Term and Discount Rate

The following table discloses the weighted-average remaining lease term and discount rate for finance and operating leases.

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Weighted-average lease term

6 unchanged sentences

The below table discloses supplemental cash flow information for finance and operating leases (in thousands):

Nine Months Ended

September 30, 2021 September 30, 2020

Three Months Ended

March 31, 2022 March 31, 2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases $ 1,357 $ 788

Operating cash flows for finance leases 1 4

Financing cash flows for finance leases 2 6

Operating cash flows from finance leases were less than $ 0.1 million for each of the three months ended March 31, 2022 and 2021;

accordingly, these cash flows are not shown in the table above.

Maturity Analysis

The following table reflects undiscounted cash flows on an annual basis for the Company’s lease liabilities as of September 30, 2021 (amounts in thousands):

The following table reflects undiscounted cash flows on an annual basis for the Company’s lease liabilities as of March 31, 2022 (amounts in thousands):

Operating Leases Finance Leases

4 unchanged sentences

Discounted lease liability $ 30,958 $ 7

As of September 30, 2021, the Company executed an additional operating lease for a new gateway location.

This lease had not yet commenced as of September 30, 2021 since the lessor is continuing to ready the site for use.

Accordingly, this lease is not included on the balance sheet as of September 30, 2021 or in the maturity table above.

The Company is in the process of evaluating this lease obligation and expects it to be approximately $ 2.5 million.

As of March 31, 2022, the Company executed additional operating leases for new gateway locations.

These leases have not yet commenced as of March 31, 2022 since the lessors are continuing to ready the sites for use.

Accordingly, these leases are not included on the balance sheet as of March 31, 2022 or in the maturity table above.

The Company is in the process of evaluating these lease obligations and expects both leases to be approximately $ 4.7 million.

PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in thousands):

September 30,

2022 December 31,

16 unchanged sentences

Total property and equipment, net $ 680,167 $ 672,156

The ground component of construction in progress includes costs (including capitalized interest) incurred for assets to upgrade the Company's ground infrastructure, including costs associated with the procurement and production of new gateway antennas.

During the nine months ended September 30, 2021, the Company placed $ 10.3 million of costs into service associated with these antennas.

Amounts included in the Company’s second-generation satellite, on-ground spare in the table above consist primarily of costs related to a spare second-generation satellite that has not been placed in orbit, but is likely to be capable of being included in a future launch.

The Company has entered into certain contracts for the preparation and launch of the Company's on-ground spare satellite, which is expected to occur in 2022.

Amounts included in the Company’s second-generation satellite, on-ground spare in the table above consist of costs related to a spare second-generation satellite that has not been placed in orbit.

The Company has entered into certain contracts for the preparation and launch of this spare satellite, which is expected to occur in 2022.

Costs to support these efforts are included in the space component of construction in progress in the table above;

The construction in progress activity described above is related the Terms Agreement described in the 2020 Annual Report and Note 2:

the vast majority of these costs are being reimbursed by the customer under the Terms Agreement.

These reimbursements are recorded in deferred revenue on the Company's consolidated balance sheet as of March 31, 2022 and are discussed in Note 2:

In February 2022, the Company entered into an agreement for the purchase of new satellites that will replenish the Company's existing satellite constell ation.

As of March 31, 2022, the Company recorded $ 17.2 million as prepaid satellite construction costs and $ 15.5 million in construction in progress on its balance sheet reflecting the milestone work completed under this agreement.

The customer under the Terms Agreement will reimburse 95 % of these capital expenditures.

Accordingly, as of March 31, 2022, the Company recorded $ 14.7 million in receivables on its condensed consolidated balance sheet.

In accordance with the expected timing of reimbursement, $ 4.4 million is recorded in Accounts receivable and $ 10.3 million is recorded as a non-current receivable in Prepaid satellite construction costs and related customer receivable.

The satellite construction assets acquired through this vendor financing arrangement are included in the supplemental section of the Company's condensed consolidated statement of cash flows as non-cash financing and investing activity.

See further discussion in Note 2:

Revenue, Note 5:

Long-Term Debt and Other Financing Arrangements and Note 8:

Commitments and Contingencies.

During the first quarter of 2022, the Company placed $ 16.6 million o f costs into service associated with these antennas, which are included in ground component in the table above.

These capital expenditures relate primarily to gateway upgrade work in connection with the Terms Agreement.

LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS

Long-term debt consists of the following (in thousands):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Amount Unamortized Discount and Deferred Financing Costs Carrying

1 unchanged sentence

Amount Unamortized Discount and Deferred Financing Costs Carrying

First Lien Facility Agreement $ 60,324 $ 1,251 $ 59,073 $ 186,988 $ 6,373 $ 180,615

Second Lien Facility Agreement 255,015 28,599 226,416 230,597 32,125 198,472

2019 Facility Agreement 272,716 25,960 246,756 263,812 27,287 236,525

8.00 % Convertible Senior Notes Issued in 2013

— — — 1,407 — 1,407

Paycheck Protection Program Loan — — — 4,973 26 4,947

Total Debt 272,716 25,960 246,756 265,219 27,287 237,932

Current Portion — — — 58,824 — 58,824

Long-Term Debt $ 316,731 $ 29,850 $ 286,881 $ 365,110 $ 38,524 $ 326,586

The principal amounts shown above include payment of in-kind interest, as applicable.

The principal amounts shown above include payment of in-kind interest.

The carrying value is net of deferred financing costs and any discounts to the loan amounts at issuance, including accretion.

First Lien Facility Agreement

In 2009, the Company entered into the First Lien Facility Agreement (as amended) with a syndicate of bank lenders, including BNP Paribas, Société Générale, Natixis, Crédit Agricole Corporate and Investment Bank and Crédit Industriel et Commercial, as arrangers, and BNP Paribas, as the security agent.

The First Lien Facility Agreement is scheduled to mature in December 2022.

Indebtedness under the First Lien Facility Agreement bears interest at a floating rate of LIBOR plus a margin that increases by 0.5 % each year to a maximum rate of LIBOR plus 5.75 %.

The current interest rate is LIBOR plus 5.25 %.

Interest on the Facility Agreement is payable semi-annually in arrears on June 30 and December 31 of each calendar year.

In calculating compliance with the financial covenants of the First Lien Facility Agreement, the Company may include certain cash funds contributed to the Company from the issuance of the Company's common stock and/or subordinated indebtedness.

These funds are referred to as “Equity Cure Contributions” and may be used to achieve compliance with financial covenants through maturity.

If the Company violates any financial covenants and is unable to obtain a sufficient Equity Cure Contribution or obtain a waiver, it would be in default under the First Lien Facility Agreement and payment of the indebtedness could be accelerated.

In anticipation of projected capital expenditures, in August 2021, the Company received a waiver from its senior lenders, increasing permitted capital expenditure limits under the First Lien Facility Agreement.

As of September 30, 2021, the Company was in compliance with the covenants of the First Lien Facility Agreement.

The First Lien Facility Agreement requires mandatory prepayments of principal with any Excess Cash Flow (as defined and calculated in the First Lien Facility Agreement) on a semi-annual basis.

During 2021, the Company was required to pay $ 4.4 million to its first lien lenders resulting from the Excess Cash Flow calculation as of December 31, 2020.

This payment reduced future principal payment obligations (see table below).

The amended and restated First Lien Facility Agreement includes a requirement that the Company raise no less than $ 45.0 million from the sale of equity prior to March 30, 2021.

The Company fulfilled this requirement in March 2021 with proceeds from the exercise of all the warrants issued to the Second Lien Facility Agreement lenders in November 2019.

The Company received proceeds totaling $ 47.3 million, of which $ 3.6 million was received in December 2019 and the remaining $ 43.7 million was received during the first quarter of 2021.

In April 2021, these proceeds were used to pay the remaining principal payments due in each of June 2021 and December 2021 (see table below).

In June and September 2021, the Company received two advance payments of $ 37.5 million each from a customer (see further discussion in Note 2:

The Company used these proceeds to pay a portion of the remaining amount due under the First Lien Facility Agreement.

These voluntary prepayments were applied to the payments due in each of December 2021, June 2022 and December 2022, respectively (see table below).

Additionally, the Company wrote off $ 2.3 million and

$ 0.8 million in deferred financing costs, which represents the portion of debt prepaid by the Company in the second and third quarters of 2021, respectively.

The First Lien Facility Agreement also requires the Company to maintain a debt service reserve account, which is pledged to secure all of the Company's obligations under the First Lien Facility Agreement.

As of September 30, 2021, the balance in the debt service reserve account was $ 51.1 million and is classified as non-current restricted cash on the Company's condensed consolidated balance sheet consistent with the remaining principal outstanding of $ 60.3 million due in December 2022.

The Company currently intends to fully pay off the remaining principal balance during the fourth quarter of 2021.

In connection with the anticipated early pay off, the Company expects to receive a partial refund of premiums previously paid.

The following table sets forth the scheduled principal payments for the First Lien Facility Agreement, reflecting the application of prepayments made during 2021 (amounts in thousands):

Principal Payment Activity Total

Scheduled Payment Date June 30, 2021 December 31, 2021 June 30, 2022 December 31, 2022

Scheduled Principal Payments $ 37,468 $ 20,000 $ 20,000 $ 109,520 $ 186,988

Excess Cash Flow Payment, March 2021 ( 4,357 ) — — — ( 4,357 )

Mandatory Prepayment, April 2021 ( 33,111 ) ( 14,191 ) — — ( 47,302 )

Voluntary Prepayment, June 2021 — ( 5,809 ) ( 20,000 ) ( 11,696 ) ( 37,505 )

Voluntary Prepayment, September 2021 — — — ( 37,500 ) ( 37,500 )

Remaining Scheduled Payments $ — $ — $ — $ 60,324 $ 60,324

Second Lien Facility Agreement

In November 2019, the Company entered into a $ 199.0 million Second Lien Facility Agreement with Thermo, an affiliate of EchoStar Corporation and certain other unaffiliated lenders.

The Second Lien Facility Agreement is scheduled to mature in November 2025.

The loans under the Second Lien Facility Agreement bear interest at a blended rate of 13.5 % per annum to be paid in kind (or in cash at the option of the Company, subject to restrictions in the First Lien Facility Agreement).

As additional consideration for the loan, the Company issued the lenders warrants to purchase 124.5 million shares of voting common stock at an exercise price of $ 0.38 per share.

All of these warrants were exercised before their expiration date on March 31, 2021, resulting in proceeds to the Company totaling $ 47.3 million.

As of September 30, 2021, the Company was in compliance with the covenants of the Second Lien Facility Agreement.

Refer to Note 6:

Derivatives and Note 7:

Fair Value Measurements for further discussion on the compound embedded derivative bifurcated from the Second Lien Facility Agreement.

Thermo Loan Agreement

In connection with the amendment and restatement of the First Lien Facility Agreement in July 2013, the Company amended and restated its loan agreement with Thermo (the “Loan Agreement”).

The Loan Agreement was convertible into shares of common stock at a conversion price of $ 0.69 (as adjusted) per share of common stock.

The Loan Agreement accrued interest at 12 % per annum, which was capitalized and added to the outstanding principal in lieu of cash payments.

On February 19, 2020, Thermo converted the entire principal balance outstanding under the Loan Agreement, which totaled $ 137.4 million and included accrued interest since inception of $ 93.9 million.

This conversion resulted in the issuance of 200.1 million shares of common stock.

In accordance with applicable accounting guidance for debt extinguishment with related parties, upon conversion, the remaining debt discount was written off and recorded as a contribution to capital though equity and the associated derivative liability was marked to market at the conversion date and then extinguished through equity as a contribution to capital.

Excluded from the table are obligations related to a vendor financing arrangement discussed below.

2019 Facility Agreement

In November 2019, the Company entered into a $ 199.0 million facility agreement with Thermo, an affiliate of EchoStar Corporation and certain other unaffiliated lenders (the "2019 Facility Agreement").

The 2019 Facility Agreement is scheduled to mature in November 2025.

The loans under the 2019 Facility Agreement bear interest at a blended rate of 13.5 % per annum to be paid in kind (or in cash at the option of the Company).

As of March 31, 2022, the Company was in compliance with the covenants of the 2019 Facility Agreement.

The 2019 Facility Agreement requires mandatory prepayments of principal with any Excess Cash Flow (as defined and calculated in the 2019 Facility Agreement) on a semi-annual basis.

If the Company generates Excess Cash Flow in 2022, it will be required to make such prepayments.

These payments would reduce future principal payment obligations.

Refer to Note 6:

Derivatives and Note 7:

Fair Value Measurements for further discussion on the compound embedded derivative bifurcated from the Loan Agreement with Thermo.

Fair Value Measurements for further discussion on the compound embedded derivative bifurcated from the 2019 Facility Agreement.

8.00 % Convertible Senior Notes Issued in 2013

In May 2013, the Company issued $ 54.6 million aggregate principal amount of its 2013 8.00 % Notes.

The 2013 8.00 % Notes are convertible into shares of common stock at a conversion price of $ 0.69 per share of common stock, as adjusted pursuant to the terms of the Fourth Supplemental Indenture between the Company and U.S.

Bank National Association, as Trustee (the “Indenture”).

The 2013 8.00 % Notes are senior unsecured debt obligations that mature on April 1, 2028, subject to various call and put features, and bear interest at a rate of 8.00 % per annum.

Interest is paid in cash at a rate of 5.75 % and in additional notes at a rate of 2.25 %.

Since issuance, $ 55.5 million of principal amount of the 2013 8.00 % Notes have been converted resulting in the issuance of 98.6 million shares of Globalstar common stock.

The Company may redeem the 2013 8.00 % Notes, with the prior approval of the majority lenders under the First Lien Facility Agreement and the Second Lien Facility Agreement.

A holder may convert its 2013 8.00 % Notes at its option at any time prior to April 1, 2028 into shares of common stock.

The Indenture provides for customary events of default.

As of September 30, 2021, the Company was in compliance with respect to the terms of the 2013 8.00 % Notes and the Indenture.

The amount by which the if-converted value of the 2013 8.00 % Notes exceeded the principal amount at September 30, 2021, assuming conversion at the closing price of the Company's common stock on that date of $ 1.67 per share, is approximately $ 2.5 million.

In May 2013, the Company issued $ 54.6 million aggregate principal amount of its 2013 8.00 % Notes Interest was paid in cash at a rate of 5.75 % and in additional notes at a rate of 2.25 %.

In February 2022, the Company notified the holders of the 8.00 % Notes of its intention to redeem all of the outstanding amount of principal and interest in March 2022.

Prior to the Company's intended redemption of the 8.00 % Notes, the holders converted the remaining principal amount outstanding of $ 1.4 million into 2.3 million shares of Globalstar common stock in February and March 2022.

The 2013 8.00 % Notes were converted into shares of common stock at a conversion price of $ 0.69 per share of common stock.

As a result of the conversions during the first quarter of 2022, the Company recorded gains and losses on extinguishment of debt resulting from the difference between the fair value of shares of Globalstar common stock issued to the holders and the principal amount of the notes that converted as well as the write-offs of the embedded derivative associated with the 2013 8.00 % Notes.

The net impact to the Company's condensed consolidated statement of operations for the first quarter of 2022 was a gain of less than $ 0.1 million.

Refer to Note 6:

1 unchanged sentence

Fair Value Measurements for further discussion on the compound embedded derivative bifurcated from the 2013 8.00 % Notes.

Paycheck Protection Program Loan

In April 2020, the Company sought relief under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and received a $ 5.0 million loan (the "PPP Loan") under the PPP.

In June 2021, the Small Business Administration ("SBA") approved the Company's request for forgiveness of all amounts outstanding under the PPP Loan, including accrued interest.

Prior to forgiveness, the PPP Loan was an unsecured debt obligation and was scheduled to mature in April 2022.

Any amount not forgiven by the SBA was subject to an interest rate of 1.00% per annum commencing on the date of the PPP Loan.

The Company evaluated the applicable accounting guidance relative to the PPP Loan and accounted for the proceeds of the PPP Loan as debt under ASC 470.

As the entire principal balance, including accrued interest, was forgiven in June 2021, the Company recorded a gain on extinguishment of debt totaling $ 5.0 million on its condensed consolidated statements of operations for the period ended June 30, 2021.

Vendor Financing

In February 2022, the Company entered into a satellite procurement agreement (see Note 8:

Commitments and Contingencies for further discussion).

This agreement provides for payment deferrals of milestone payments through August 2022 at a 0 % interest rate.

As of March 31, 2022, the Company recorded $ 32.7 million in short-term vendor financing on its condensed consolidated balance sheet associated with this agreement.

In August 2022, all deferred payments will become due by which time the Company intends to complete a senior secured financing.

This financing is intended to provide sufficient proceeds for the construction and launch of the satellites.

2009 Facility Agreement

In 2009, the Company entered into a facility agreement with a syndicate of bank lenders, including BNP Paribas, Société Générale, Natixis, Crédit Agricole Corporate and Investment Bank and Crédit Industriel et Commercial, as arrangers, and BNP Paribas, as the security agent (the "2009 Facility Agreement").

The 2009 Facility Agreement was fully repaid in November 2021.

The Company has identified various embedded derivatives resulting from certain features in the Company’s existing borrowing arrangements, requiring recognition on its condensed consolidated balance sheets.

1 unchanged sentence

The following table discloses the fair values of the derivative instruments on the Company’s condensed consolidated balance sheets (in thousands):

September 30, 2021 December 31, 2020

Derivative assets:

Compound embedded derivative with the Second Lien Facility Agreement $ 613 $ 286

Total derivative assets $ 613 $ 286

Derivative liabilities:

March 31, 2022 December 31, 2021

Derivative (liabilities) assets:

Compound embedded derivative with the 2019 Facility Agreement $ ( 218 ) $ 484

Compound embedded derivative with the 2013 8.00 % Notes

$ — ( 1,364 )

Total derivative liabilities $ ( 2,660 ) $ ( 123 )

The derivative asset recorded for the Compound embedded derivative with the Second Lien Facility Agreement and the derivative liability recorded for the Compound embedded derivative with the 2013 8.00 % Notes are included in Intangible and other assets, net and other non-current liabilities, respectively, on the Company's consolidated balance sheets.

The following table discloses the changes in value recorded as derivative gain (loss) in the Company’s condensed consolidated statement of operations (in thousands):

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

As of March 31, 2022 and December 31, 2021, the derivative (liability) asset recorded for the Compound embedded derivative with the 2019 Facility Agreement was reflected in Other non-current liabilities and Intangible and other assets, net, respectively, on the Company's condensed consolidated balance sheets.

During the first quarter of 2022, the remaining principal amount of the 2013 8.00 % Notes was converted into shares of Globalstar common stock;

accordingly, the associated derivative is no longer outstanding.

The following table discloses the changes in value recorded as derivative loss in the Company’s condensed consolidated statement of operations (in thousands):

Three Months Ended

March 31, 2022 March 31, 2021

Compound embedded derivative with the 2013 8.00 % Notes

$ 216 $ ( 1,744 )

Compound embedded derivative with the Loan Agreement with Thermo — — — 212

Compound embedded derivative with the Second Lien Facility Agreement ( 55 ) 1,128 327 988

Total derivative loss (gain) $ 229 $ 1,225 $ ( 2,210 ) $ 1,564

The fair value of each embedded derivative liability is marked-to-market at the end of each reporting period, or more frequently as deemed necessary, with any changes in value reported in its condensed consolidated statements of operations and its condensed consolidated statements of cash flows as an operating activity.

Compound embedded derivative with the 2019 Facility Agreement ( 702 ) 615

Total derivative loss $ ( 486 ) $ ( 1,129 )

The fair value of each embedded derivative is marked-to-market at the end of each reporting period, or more frequently as deemed necessary, with any changes in value reported in its condensed consolidated statements of operations and its condensed consolidated statements of cash flows as an operating activity.

The Company classifies its derivatives consistent with the classification of the underlying debt on the Company's condensed consolidated balance sheet.

8 unchanged sentences

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

All of the Company's derivative assets and liabilities are classified as Level 3.

The Company marks-to-market these assets and liabilities at each reporting date, or more frequently as deemed necessary, with the changes in fair value recognized in the Company’s condensed consolidated statements of operations.

All of the Company's derivatives are classified as Level 3.

The Company marks-to-market these derivatives at each reporting date, or more frequently as deemed necessary, with the changes in fair value recognized in the Company’s condensed consolidated statements of operations.

During the first quarter of 2022, the remaining principal amount of the 2013 8.00 % Notes was converted into shares of Globalstar common stock;

accordingly, the associated derivative is no longer outstanding See Note 5:

Long-Term Debt and Other Financing Arrangements and Note 6:

Derivatives for further discussion.

Recurring Fair Value Measurements

The following tables provide a summary of the assets and liabilities measured at fair value on a recurring basis (in thousands):

September 30, 2021

March 31, 2022

(Level 1) (Level 2) (Level 3) Total

Compound embedded derivative with the Second Lien Facility Agreement $ — $ — $ 613 $ 613

Total assets measured at fair value $ — $ — $ 613 $ 613

Compound embedded derivative with the 2013 8.00 % Notes

$ — $ — $ ( 2,660 ) $ ( 2,660 )

Compound embedded derivative with the 2019 Facility Agreement $ — $ — $ ( 218 ) $ ( 218 )

Total liabilities measured at fair value $ — $ — $ ( 218 ) $ ( 218 )

1 unchanged sentence

(Level 1) (Level 2) (Level 3) Total

Compound embedded derivative with the Second Lien Facility Agreement $ — $ — $ 286 $ 286

Compound embedded derivative with the 2019 Facility Agreement $ — $ — $ 484 $ 484

Total assets measured at fair value $ — $ — $ 484 $ 484

4 unchanged sentences

The significant quantitative Level 3 inputs utilized in the valuation models are shown in the tables below:

September 30, 2021

Volatility Risk-Free

Price Discount Rate Market Price of Common Stock

Compound embedded derivative with the 2013 8.00 % Notes

125 % - 146 %

0.2 % $ 0.69 17 % $ 1.67

December 31, 2021

3 unchanged sentences

120 % - 139 %

2013 8.00 % Notes

Fluctuation in the Company’s stock price is a significant driver of the changes in the compound embedded derivative with the 2013 8.00 % Notes during each reporting period.

As the stock price increases, the value to the holder of the instrument generally increases, thereby increasing the liability on the Company’s condensed consolidated balance sheet.

The Company's stock price increased almost 400 % from December 31, 2020 to September 30, 2021, driving a significant increase in the liability at September 30, 2021.

Stock price volatility is also a significant input used in the fair value measurement of the compound embedded derivative with the 2013 8.00 % Notes.

The simulated fair value of this liability is sensitive to changes in the expected volatility of the Company's stock price.

Increases in expected volatility generally result in a higher fair value measurement.

Second Lien Facility Agreement

The compound embedded derivative with the Second Lien Facility Agreement is valued using a probability weighted discounted cash flow model.

The most significant observable input used in the fair value measurement is the discount yield, which was 12 % and 13 % at September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021 and December 31, 2020, the discount yield utilized in the valuation was lower than the blended interest rate of the underlying debt.

As a result, the features embedded in the underlying debt resulted in an asset for the Company.

When the discount yield decreases and is lower than the blended interest rate of the underlying debt, the fair value of the derivative asset increases.

0.5 % $ 0.69 18 % $ 1.16

Fluctuation in the Company’s stock price was a significant driver of the changes in the compound embedded derivative with the 2013 8.00 % Notes during each reporting period.

As the stock price increased, the value to the holder of the instrument generally increased, thereby increasing the liability on the Company’s condensed consolidated balance sheet.

Stock price volatility was also a significant input used in the fair value measurement of the compound embedded derivative with the 2013 8.00 % Notes.

The simulated fair value of this liability was sensitive to changes in the expected volatility of the Company's stock price.

Increases in expected volatility generally resulted in a higher fair value measurement.

2019 Facility Agreement

The compound embedded derivative with the 2019 Facility Agreement is valued using a probability weighted discounted cash flow model.

The most significant observable input used in the fair value measurement is the discount yield, which was 15 % and 13 % at March 31, 2022 and December 31, 2021, respectively.

When the discount yield utilized in the valuation is higher than the blended interest rate of the underlying debt, the features embedded in the underlying debt result in a liability for the Company.

Conversely, when the discount yield is lower than the blended interest rate of the underlying debt, the features embedded in the underlying debt result in an asset for the Company.

The unobservable inputs used in the fair value measurement include the probability of change of control and the estimated timing and amounts of cash flows associated with certain mandatory prepayments within the debt agreement.

2 unchanged sentences

Balance at beginning of period, January 1, 2022 and 2021, respectively $ ( 880 ) $ 163

Derivative adjustment related to conversions and exercises — 1,058

Unrealized (loss) gain, included in derivative gain (loss) ( 2,210 ) 2,897

Balance at end of period, September 30, 2021 and December 31, 2020, respectively

Derivative adjustment related to conversions 1,148 —

Unrealized loss, included in derivative loss ( 486 ) ( 1,043 )

Balance at end of period, March 31, 2022 and December 31, 2021, respectively

$ ( 218 ) $ ( 880 )

Fair Value of Debt Instruments

The Company believes it is not practicable to determine the fair value of the First Lien Facility Agreement, the Second Lien Facility Agreement and the PPP Loan without incurring significant additional costs.

Unlike typical long-term debt, interest rates and other terms for these instruments are not readily available and generally involve a variety of factors, including due diligence by the debt holders.

The following table sets forth the carrying values and estimated fair values of the Company's other debt instrument classified as a Level 3 financial instrument (in thousands):

September 30, 2021 December 31, 2020

The Company believes it is not practicable to determine the fair value of the 2019 Facility Agreement without incurring significant additional costs.

Unlike typical long-term debt, certain terms for this instrument are not readily available and generally involve a variety of factors, including due diligence by the debt holders.

As previously disclosed, the remaining principal amount of the 2013 8.00 % Notes was converted into shares of Globalstar common stock during the first quarter of 2022;

accordingly, there is no value in the table below as of March 31, 2022.

The following table sets forth the carrying value and estimated fair value of the Company's Level 3 financial instrument (in thousands):

March 31, 2022 December 31, 2021

Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value

3 unchanged sentences

Nonrecurring Fair Value Measurements

Long-lived assets and intangible and other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

During the third quarter of 2021, the Company wrote off approximately $ 0.2 million of construction in progress related to unsatisfactory work that did not meet internal testing requirements and could not be used for its intended purpose.

The Company follows the authoritative guidance regarding non-financial assets and non-financial liabilities that are remeasured at fair value on a nonrecurring basis.

On February 17, 2022 and March 9, 2022, the remaining principal balance of the 2013 8.00 % Notes was converted into shares of Globalstar common stock, eliminating the entire principal balance outstanding.

See further discussion in Note 5:

Long-Term Debt and Other Financing Arrangements.

As a result of the conversion, the Company wrote off the proportionate fair value of the compound embedded derivative liability with the 2013 8.00 % Notes based on the value of the derivative on each conversion date.

As of each conversion date, the fair value of the compound embedded derivative liability with the 2013 8.00 % Notes was $ 0.8 million.

The significant quantitative Level 3 inputs utilized in the valuation models as of the conversion date are shown in the table below:

February 17, 2022

Risk-Free Interest Rate Note Conversion Price Discount Rate Market Price of Common Stock

Compound embedded derivative with the 2013 8.00 % Notes

0.06 % $ 0.69 18 % $ 1.00

March 9, 2022

Risk-Free Interest Rate Note Conversion Price Discount Rate Market Price of Common Stock

Compound embedded derivative with the 2013 8.00 % Notes

0.18 % $ 0.69 19 % $ 1.21

COMMITMENTS AND CONTINGENCIES

Terms Agreement

The Terms Agreement sets forth the primary terms for the Company to provide services to the customer and incur costs related primarily to new gateways and upgrades at existing gateways, satellite launch costs and lease costs.

Under this agreement, the customer has made advance payments to the Company for the services expected to be delivered under the Terms Agreement.

To the extent the Company does not provide such services, it will be required to refund the amounts to the customer.

Refer to Note 2:

Revenue, Note 3:

Leases and Note 4:

Property and Equipment for further discussion.

Satellite Procurement Agreement

In February 2022, the Company entered into a satellite procurement agreement with Macdonald, Dettwiler and Associates Corporation pursuant to which Globalstar will acquire 17 satellites that will replenish Globalstar's existing constellation of satellites and ensure long-term continuity of its mobile satellite services.

Globalstar is acquiring the satellites to provide continuous satellite services to the potential customer under the Terms Agreement, as well as services to Globalstar’s current and future customers.

Globalstar maintains the option to acquire additional satellites under the contract.

Globalstar plans to contract separately for launch services and launch insurance for the new satellites.

The total contract price for the initial 17 satellites is $ 327.0 million;

Globalstar has the option to purchase additional satellites at a lower per unit cost, subject to certain conditions.

The satellites are expected to be manufactured during the next three years .

Under the Terms Agreement, subject to certain conditions, the counterparty is required to reimburse 95 % of the capital expenditures and certain other costs incurred for this contract.

This agreement provides for payment deferrals of milestone payments through August 2022, at which time all deferred payments estimated to be approximately $ 74.0 million will become due, by which time the Company intends to complete a senior secured financing.

This financing is intended to provide sufficient proceeds for the construction and launch of the satellites.

The Company also expects to refinance its current 2019 Facility Agreement in the coming months.

RELATED PARTY TRANSACTIONS

Payables to Thermo and other affiliates related to normal purchase transactions were $ 0.3 million and $ 0.6 million as of September 30, 2021 and December 31, 2020, respectively.

Payables to Thermo and other affiliates related to normal purchase transactions were $ 0.3 million and $ 0.4 million as of March 31, 2022 and December 31, 2021, respectively.

Transactions with Thermo

2 unchanged sentences

The expenses charged are based on actual amounts (with no mark-up) incurred by Thermo or upon allocated employee time.

In February 2019, the Company entered into a lease agreement with Thermo Covington, LLC for the Company's headquarters office.

Annual lease payments started at $ 1.4 million per year, increasing at a rate of 2.5 % per year, for a lease term of ten years .

During each of the three months ended September 30, 2021 and 2020, the Company incurred lease expense of $ 0.4 million, respectively, in each period under this lease agreement.

During each of the nine months ended September 30, 2021 and 2020, the Company incurred lease expense of $ 1.2 million, respectively, under this lease agreement.

In November 2019, the Company entered into the Second Lien Facility Agreement.

Thermo's participation in the Second Lien Facility Agreement was $ 95.1 million.

The Company has a lease agreement with Thermo Covington, LLC for the Company's headquarters office.

Annual lease payments started at $ 1.4 million per year in 2019 and increase at a rate of 2.5 % per year, for a lease term of ten years .

During each of the three months ended March 31, 2022 and 2021, the Company incurred lease expense of $ 0.4 million under this lease agreement.

In November 2019, the Company entered into the 2019 Facility Agreement.

Thermo's participation in the 2019 Facility Agreement was $ 95.1 million.

This principal balance earns paid-in-kind interest at a rate of 13 % per annum.

Interest accrued since inception with respect to Thermo's portion of the debt outstanding on the Second Lien Facility Agreement was approximately $ 25.7 million, of which $ 11.2 million was accrued during the nine months ended September 30, 2021.

In connection with the issuance of the Second Lien Facility Agreement, the holders received warrants to purchase shares of voting common stock, of which Thermo received 59.5 million warrants with an exercise price of $ 0.38 per share.

Thermo exercised 9.5 million warrants in 2019 and the remaining warrants, totaling 50.0 million, during the first quarter of 2021 and, accordingly, no warrants were outstanding as of September 30, 2021.

Interest accrued since inception with respect to Thermo's portion of the debt outstanding on the 2019 Facility Agreement was approximately $ 33.8 million, of which $ 4.1 million was accrued during the three months ended March 31, 2022.

Long-Term Debt and Other Financing Arrangements for further discussion of the Company's debt and financing transactions with Thermo.

1 unchanged sentence

Loss per share is computed by dividing loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

In periods of net income, the numerator used to calculate diluted EPS includes the effect of dilutive securities, including interest expense, net, and derivative gains or losses reflected in net loss.

Common stock equivalents are included in the calculation of diluted earnings per share only when the effect of their inclusion would be dilutive.

The effect of potentially dilutive common shares for the Company's convertible notes is calculated using the if-converted method.

When outstanding, the effect of potentially dilutive common shares for the Company's convertible notes is calculated using the if-converted method.

Generally, for all other potentially dilutive common shares, the effect is calculated using the treasury stock method.

The following table sets forth the computation of basic and diluted loss per common share during each of the three and nine months ended September 30, 2021 and 2020 (amounts in thousands, except per share data):

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2021

The following table sets forth the computation of basic and diluted loss per common share during each of the three months ended March 31, 2022 and 2021 (amounts in thousands, except per share data):

Three Months Ended

March 31, 2022 March 31, 2021

Net loss $ ( 20,462 ) $ ( 36,333 )

1 unchanged sentence

Net loss per common share - basic and diluted $ ( 0.01 ) $ ( 0.02 )

For the three months ended September 30, 2021 and 2020, 11.0 million and 4.3 million shares, respectively, of common stock related to the Company's 2013 8.00 % Notes and Equity Incentive Plan were excluded from diluted shares outstanding because the effects of potentially dilutive securities would be anti-dilutive.

For the nine months ended September 30, 2021 and 2020, 10.2 million and 4.4 million shares, respectively, of common stock related to the Company's 2013 8.00 % Notes and 2006 Equity Incentive Plan were excluded from diluted shares outstanding because the effects of potentially dilutive securities would be anti-dilutive.

Additionally, at September 30, 2020, 115.0 million warrants issued to the lenders of the Second Lien Facility Agreement were outstanding.

These warrants were exercised in March 2021.

For the three months ended March 31, 2022 and 2021, 7.4 million and 5.5 million shares, respectively, of potential common stock were excluded from diluted shares outstanding because the effects of potentially dilutive securities would be anti-dilutive.

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-Q

Item 1. Financial Statements