What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-09 · 305 added, 138 removed, 428 unchanged (51% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

Three Months Ended Six Months Ended

2022 June 30,

2021 June 30,

2022 June 30,

Three Months Ended Nine Months Ended

September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Service revenue $ 33,301 $ 27,848 $ 95,693 $ 76,551

11 unchanged sentences

Other (expense) income:

Gain on extinguishment of debt — 2,664 — 2,664

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

Interest income and expense, net of amounts capitalized ( 7,583 ) ( 11,406 ) ( 24,300 ) ( 33,758 )

Derivative loss ( 1,242 ) ( 1,310 ) ( 1,728 ) ( 2,439 )

Foreign currency (loss) gain ( 7,123 ) 4,425 ( 3,891 ) 110

Derivative gain (loss) 662 229 ( 1,066 ) ( 2,210 )

Foreign currency loss ( 9,406 ) ( 4,752 ) ( 13,297 ) ( 4,642 )

Pension settlement loss ( 1,501 ) — ( 1,501 ) —

Other ( 45 ) 473 344 407

1 unchanged sentence

Loss before income taxes ( 204,514 ) ( 30,999 ) ( 251,529 ) ( 88,350 )

Income tax expense 121 354 204 431

Income tax (benefit) expense ( 153 ) ( 114 ) 51 317

Net loss $ ( 204,361 ) $ ( 30,885 ) $ ( 251,580 ) $ ( 88,667 )

1 unchanged sentence

Foreign currency translation adjustments 6,613 3,185 11,249 3,269

Defined benefit pension plan liability adjustment 2,073 $ — $ 2,073 $ —

Comprehensive loss $ ( 195,675 ) $ ( 27,700 ) $ ( 238,258 ) $ ( 85,398 )

7 unchanged sentences

GLOBALSTAR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share data)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current assets:

27 unchanged sentences

Preferred Stock of $ 0.0001 par value;

100,000,000 shares authorized and none issued and outstanding at June 30, 2022 and December 31, 2021, respectively

100,000,000 shares authorized and none issued and outstanding at September 30, 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 June 30, 2022 and December 31, 2021, respectively

one share authorized and none issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Voting Common Stock of $ 0.0001 par value;

2,150,000,000 shares authorized;

1,800,477,322 and 1,796,528,871 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

1,800,523,430 and 1,796,528,871 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Nonvoting Common Stock of $ 0.0001 par value;

no shares authorized and no ne issued and outstanding at June 30, 2022 and December 31, 2021, respectively

no shares authorized and no ne issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 2,155,117 2,146,710

26 unchanged sentences

Balances – June 30, 2022 1,800,477 $ 180 $ 2,153,195 $ 6,526 $ ( 1,830,568 ) $ 329,333

Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation 46 — 1,815 — — 1,815

Contribution of services — — 47 — — 47

Recognition of stock-based compensation of employee stock purchase plan — — 60 — — 60

Other comprehensive income — — — 8,686 — 8,686

Net loss — — — — ( 204,361 ) ( 204,361 )

Balances – September 30, 2022 1,800,523 $ 180 $ 2,155,117 $ 15,212 $ ( 2,034,929 ) $ 135,580

Shares Common

16 unchanged sentences

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

See accompanying notes to unaudited interim condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended

2022 June 30,

Nine Months Ended

September 30,

2022 September 30,

Cash flows provided by operating activities:

8 unchanged sentences

Noncash interest and accretion expense 23,788 26,537

Unrealized foreign currency loss 13,399 4,639

Loss on pension settlement 1,501 —

Gain on extinguishment of debt — ( 1,835 )

Unrealized foreign currency loss (gain) 4,139 ( 245 )

Noncash reversal of tariff accrual — ( 912 )

16 unchanged sentences

Net cash used in investing activities ( 25,306 ) ( 30,033 )

Cash flows provided by (used in) financing activities:

Cash flows used in financing activities:

Principal payments of the 2019 Facility Agreement ( 6,341 ) —

Principal payments of the 2009 Facility Agreement — ( 126,664 )

Proceeds from exercise of warrants — 43,678

1 unchanged sentence

Proceeds from issuance of common stock and exercise of options 455 394

Net cash provided by (used in) financing activities 449 ( 45,228 )

Net cash used in financing activities ( 5,886 ) ( 82,725 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 68 ) ( 57 )

Net decrease in cash, cash equivalents and restricted cash ( 1,163 ) ( 1,315 )

Net increase (decrease) in cash, cash equivalents and restricted cash 445 ( 5,649 )

Cash, cash equivalents and restricted cash, beginning of period 14,304 68,023

Cash, cash equivalents and restricted cash, end of period $ 14,749 $ 62,374

September 30,

2022 December 31,

2 unchanged sentences

Total cash and cash equivalents cash shown in the statement of cash flows $ 14,749 $ 14,304

Six Months Ended

2022 June 30,

Nine Months Ended

September 30,

2022 September 30,

Supplemental disclosure of cash flow information:

10 unchanged sentences

Globalstar, Inc.

(“Globalstar” or the “Company”) provides Mobile Satellite Services (“MSS”) including voice and data communications services through its global satellite network.

(“Globalstar” or the “Company”) provides Mobile Satellite Services (“MSS”) including voice and data communications and wholesale capacity services through its global satellite network.

The Company’s only reportable segment is its MSS business.

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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.

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 six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the full year or any future period.

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, 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, 2022 are not necessarily indicative of the results that may be expected for the full year or any future period.

Recent Developments

Service Agreements

On September 7, 2022, Apple Inc.

(“Partner”) announced new satellite-enabled services for certain of its products (the “Services”).

The Company will be the satellite operator for these Services pursuant to the agreement (the “Service Agreement”) first disclosed in the Company’s Form 10-K for the year ended December 31, 2019, and certain related ancillary agreements (such agreements, together with the Service Agreement, the “Service Agreements”).

The Services constitute the potential service which was previously described and disclosed as the Terms Agreement.

Since execution of the Service Agreements in 2020, the parties have completed several milestones including (i) a feasibility phase, (ii) material upgrades to Globalstar’s ground network, (iii) construction of 10 new gateways around the world, (iv) the successful launch of the ground spare satellite, and (v) rigorous in-field system testing.

The Service Agreements generally require Globalstar to allocate network capacity (as described below) to support the Services and provide for the inclusion of Globalstar’s Band 53/n53 in Partner’s cellular-enabled devices that use the Services, for use by third parties, subject to certain terms and conditions.

It is currently expected that Partner will make the Services available to customers during the fourth quarter of 2022 (the “Service Launch”).

Discontinuation of Second-Generation Duplex Products and Services

The Company has been evaluating the continuation of second-generation Duplex services in light of other potential uses for the Company’s capacity, such as those within the Service Agreements.

In early 2021, the Company terminated its second-generation Duplex services, which supported approximately 1,800 subscribers, to allow extended testing of the Services to Partner;

however, such termination was considered temporary unless or until Partner announced its intent to proceed with

launch of the Services.

Due to this shift in strategy triggered by Partner's September announcement, the Company evaluated the recoverability of its second-generation Duplex assets, including gateway property, prepaid licenses and royalties, and inventory during the third quarter of 2022.

As a result of this shift in strategy, the Company recorded reductions in the value of equipment and long-lived assets totaling $ 174.3 million during the third quarter of 2022 (refer to Note 7:

Fair Value Measurements for further discussion).

The Company will continue to support first-generation Duplex services, including voice communications and data transmissions.

Refer to Note 2:

Revenue, Note 3:

Leases, Note 4:

Property and Equipment and Note 8:

Commitments and Contingencies for further discussion of the financial statement impact of the Service Agreements.

Disaggregation of Revenue

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

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Service revenue:

Subscriber services

Duplex $ 9,021 $ 9,632 $ 22,103 $ 23,530

1 unchanged sentence

Commercial IoT 4,673 4,458 14,381 13,443

Engineering and other 9,538 2,731 16,811 3,697

Wholesale capacity services (1)

6,972 1,301 22,640 3,999

Engineering and other services 882 584 2,025 1,583

Total service revenue 33,301 27,848 95,693 76,551

6 unchanged sentences

Total revenue $ 37,626 $ 32,614 $ 107,198 $ 89,822

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 three and six months ended June 30, 2022, the Company recognized revenue associated with these services of $ 8.8 million and $ 15.7 million, respectively.

During the three and six months ended June 30, 2021, the Company recognized revenue associated with other performance obligations associated with the Terms Agreement of $ 2.2 million and $ 2.7 million, respectively;

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

(1) Prior to the third quarter of 2022, revenue from Wholesale capacity services was included in Engineering and other services in the table above.

Wholesale capacity services include satellite network access and related services utilizing our satellite spectrum and network of satellites and gateways under the Service Agreements with Partner.

As consideration for the services to be provided by Globalstar after the Service Launch, Partner will make payments to Globalstar under the Service Agreements, including a recurring service fee, payments relating to certain service-related operating expenses and capital expenditures, and potential bonus payments subject to satisfaction of certain licensing, service and related criteria.

Additionally, following the launch of the next-generation satellites being constructed pursuant to the satellite procurement agreement, Partner has agreed to make additional service payments equal to (i) 95 % of the approved capital expenditures under the satellite procurement agreement and related launch costs (to be paid on a straight-line basis over the useful life of the satellites);

(ii) certain costs of the Company’s borrowings related to the new satellites;

and (iii) other approved costs.

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 Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Service revenue:

14 unchanged sentences

Accounts Receivable

The Company 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 June 30, 2022 and December 31, 2021, the Company recorded $ 3.3 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 $ 83.4 million, which represents amounts owed by the customer for the Company's completion of performance obligations under the contract.

As of June 30, 2022, $ 8.6 million and $ 74.8 million were recorded as current and non-current receivables, respectively, in line with the expected service periods under the Terms Agreement.

The Company records trade accounts receivable from its customers, including MSS subscribers and Partner under the Service Agreements, when it has a contractual right to receive payment either on demand or on fixed or determinable dates in the future.

In addition to receivables arising from the sale of goods or services, the Company also has certain arrangements whereby it acts as an agent to procure goods and perform services on behalf of Partner under the Service Agreements.

Receivables are included in Accounts receivable, net of allowance for credit losses, on the Company's consolidated balance sheets except for the long-term portion of the wholesale capacity accounts receivable, which is included in Prepaid satellite construction costs and related customer receivable.

The Company's receivable balances by type and classification are presented in the table below net of allowance for credit losses and may include amounts related to earned but unbilled revenue (amounts in thousands).

September 30, 2022 December 31, 2021

Accounts receivable, net of allowance for credit losses

Subscriber accounts receivable $ 13,954 $ 12,825

Wholesale capacity accounts receivable 12,727 1,861

Agency agreement accounts receivable 2,913 6,496

Total accounts receivable, net of allowance for credit losses $ 29,594 $ 21,182

Long-term wholesale capacity accounts receivable 69,646 —

Total accounts receivable (short-term and long-term), net of allowance for credit losses $ 99,240 $ 21,182

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.

Under the Service Agreements, subject to certain conditions, Partner is required to reimburse 95 % of the capital expenditures and certain other costs incurred for this contract.

In accordance with the expected timing of payment from Partner, $ 11.6 million is recorded in Wholesale capacity accounts receivable and $ 69.6 million is recorded as in Long-term wholesale capacity accounts receivable in the table above.

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 six months ended June 30, 2022 and 2021 from performance obligations included in the contract liability balance at the beginning of these periods was $ 18.3 million and $ 18.8 million, respectively.

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

Contract liabilities reflect balances from its customers, including MSS subscribers and the Partner under the Service

The Company's contract liabilities by type and classification are presented in the table below (amounts in thousands).

September 30, 2022 December 31, 2021

Short-term contract liabilities

Subscriber contract liabilities $ 23,212 $ 24,940

Wholesale capacity contract liabilities 29,909 987

Total short-term contract liabilities $ 53,121 $ 25,927

Long-term contract liabilities

Subscriber contract liabilities $ 1,669 $ 1,783

Wholesale capacity contract liabilities, net of contract asset 169,982 110,271

Total long-term contract liabilities $ 171,651 $ 112,054

Total contract liabilities $ 224,772 $ 137,981

For subscriber contract liabilities, the amount of revenue recognized during the nine months ended September 30, 2022 and 2021 from performance obligations included in the contract liability balance at the beginning of these periods was $ 22.8 million and $ 23.8 million, respectively.

For wholesale capacity contract liabilities, the amount of revenue recognized during the nine months ended September 30, 2022 and 2021 from performance obligations included in the contract liability balance at the beginning of these periods was less than $ 0.1 million and zero , respectively.

The duration of the Company’s contracts with subscribers is generally one year or less.

As of June 30, 2022, the Company expects to recognize $ 39.9 million, or approximately 18 %, of its remaining performance obligations during the next twelve months .

Contract liabilities also include deferred revenue associated with the Terms Agreement.

The Company recorded deferred revenue for advance payments received from the customer for services expected to be performed in the future, totaling $ 75.0 million as of June 30, 2022.

The Company also records deferred revenue for the reimbursement (and anticipated reimbursement) of costs incurred in connection with ongoing network upgrades, construction costs under the satellite procurement agreement and other performance obligations under the Terms Agreement, totaling $ 124.8 million as of June 30, 2022.

In accordance with applicable accounting guidance, the Company records imputed interest associated with the significant financing component, totaling $ 3.9 million as of June 30, 2022, which is related to and included in the balances associated with certain of the items recorded to deferred revenue discussed above.

Deferred revenue is classified as either short-term or long-term consistent with the expected timing of the Company's obligation to provide services to the customer or the recoupment period defined in the Terms Agreement.

As of June 30, 2022, the Company has recorded $ 15.9 million and $ 180.7 million as short-term and long-term deferred revenue, respectively.

The total amount of deferred revenue associated with this customer is also reflected net of a contract asset of $ 3.1 million in the Company's condensed consolidated balance sheet as of June 30, 2022.

As of September 30, 2022, the Company expects to recognize $ 23.2 million, or approximately 93 %, of its remaining performance obligations during the next twelve months .

The term of the Company's wholesale capacity contract with its Partner under the Service Agreements is indefinite;

therefore, the related contract liabilities may be recognized into revenue over various periods driven by the expected related service or recoupment periods.

As of September 30, 2022, the Company expects to recognize $ 29.9 million, or approximately 15 %, of its remaining performance obligations during the next twelve months .

The components of wholesale capacity contract liabilities are presented in the table below (amounts in thousands).

September 30, 2022 December 31, 2021

Wholesale capacity contract liabilities, net:

Advanced payments for services expected to be performed with the second-generation satellite constellation during Phase 1 (1)

$ 99,405 $ 96,362

Advanced payments for services expected to be performed with the recently launched ground spare satellite during Phases 1 and 2 25,652 16,981

Advanced payments (both received and contractually owed) for services expected to be performed with the next-generation satellite constellation during Phase 2 78,151 —

Contract asset ( 3,317 ) ( 2,085 )

Wholesale capacity contract liabilities, net $ 199,891 $ 111,258

(1) In accordance with applicable accounting guidance, the Company records imputed interest associated with the significant financing component, totaling $ 4.9 million and $ 1.9 million as of September 30, 2022 and December 31, 2021, respectively, which is included in deferred revenue.

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Operating leases:

9 unchanged sentences

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

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Operating lease cost:

6 unchanged sentences

Total lease cost $ 1,149 $ 1,245 $ 3,474 $ 3,197

Interest on finance lease liabilities was less than $ 0.1 million for the three and six months ended June 30, 2022 and 2021;

In accordance with the Service Agreements, the Company began capitalizing certain costs to fulfill this contract during the fourth 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 finance lease liabilities was less than $ 0.1 million for the three and nine months ended September 30, 2022 and 2021;

accordingly, these amounts are not shown in the table above.

1 unchanged sentence

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Weighted-average lease term

5 unchanged sentences

Supplemental Cash Flow Information

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

Six Months Ended

June 30, 2022 June 30, 2021

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

Nine Months Ended

September 30, 2022 September 30, 2021

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

Operating cash flows for operating leases $ 3,675 $ 3,420

Operating and financing cash flows from finance leases were each less than $ 0.1 million for each of the six months ended June 30, 2022 and 2021;

Operating and financing cash flows from finance leases were each less than $ 0.1 million for each of the nine months ended September 30, 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 June 30, 2022 (amounts in thousands):

The following table reflects undiscounted cash flows on an annual basis for the Company’s lease liabilities as of September 30, 2022 (amounts in thousands):

Operating Leases Finance Leases

2022 (remaining) $ 1,180 $ 8

2023 4,775 25

2024 4,649 23

2025 4,677 23

2026 4,724 23

Thereafter 21,584 15

2 unchanged sentences

Discounted lease liability $ 28,260 $ 92

As of June 30, 2022, the Company executed additional operating leases for new gateway locations.

These leases have not yet commenced as of June 30, 2022 since the lessors are continuing to ready the sites for use.

Accordingly, these leases are not included on the balance sheet as of June 30, 2022, or in the maturity table above.

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

As of September 30, 2022, the Company executed additional operating leases for new gateway locations.

These leases have not yet commenced as of September 30, 2022, since the lessors are continuing to ready the sites for use.

Accordingly, these leases are not included on the consolidated balance sheet as of September 30, 2022 or in the maturity table above.

The Company is in the process of evaluating these lease obligations and expects the impact of these leases to be an increase of right of use assets and lease liabilities of approximately $ 4.7 million.

PROPERTY AND EQUIPMENT

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

September 30,

2022 December 31,

17 unchanged sentences

Amounts included in "second-generation satellite, on-ground spare" in the table above consist of costs related to one of the Company's second-generation satellites that was stored as an on-ground spare satellite until its launch in June 2022.

The costs to prepare this satellite for launch were included in "construction in progress - space component" in the table above prior to its launch in June 2022.

During the second quarter of 2022, $ 65.1 million in costs associated with the construction and launch of this spare satellite (including capitalized interest) were placed into service.

The costs to prepare this satellite for launch were included in "construction in progress - space component" in the table above prior to its launch.

During 2022, $ 66.7 million in costs associated with the construction and launch of this spare satellite (including capitalized interest) were placed into service.

Since this satellite is expected to remain as an in-orbit spare and will only be raised to its operational orbit at a future date if needed, it was placed into service following its successful launch.

The customer under the Terms Agreement has reimbursed 85 % of the costs incurred to prepare and launch this satellite.

These reimbursements are recorded in deferred revenue on the Company's consolidated balance sheet as of June 30, 2022 and are expected to be recognized in service revenue as performance obligations are completed in accordance with the Terms Agreement.

Revenue for further discussion .

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 June 30, 2022, the Company recorded $ 19.4 million as prepaid satellite construction costs and $ 54.2 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.

In accordance with the expected timing of reimbursement, $ 4.4 million is recorded in Accounts receivable and $ 74.8 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 activities.

See further discussion in Note 2:

Revenue, Note 5:

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

Commitments and Contingencies.

As of September 30, 2022, the Company recorded $ 13.5 million as prepaid satellite construction costs and $ 56.4 million in construction in progress on its consolidated balance sheet.

As the Company incurs this construction in progress, it earns the right to receive certain payments from Partner associated with this phase of the Service Agreements as well as certain associated advanced payments under the Service Agreements.

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

During 2022, the Company placed $ 11.2 million o f costs into service associated with these antennas (including capitalized interest), 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.

During 2022, the Company placed $ 16.8 million of costs into service associated with these antennas (including capitalized interest), which are included in ground component in the table above.

These capital expenditures relate primarily to gateway upgrade work in connection with the Service Agreements.

As discussed in Note 1:

Basis of Presentation and Note 7:

Fair Value Measurements, t he Company evaluated the recoverability of its second-gener ation Duplex assets on September 7, 2022.

This evaluation resulted in the removal of the second-generation Duplex assets from the Company's long-lived asset grouping.

The reduction in value of long-lived assets recorded during the third quarter of 2022 totaled $ 161.2 million.

The table below reflects the reduction in value of long-lived assets by each component of Property and equipment, net, and Intangible and other assets, net, previously recorded on the Company's consolidated balance sheets (amounts in thousands, reflected net of accumulated depreciation and amortization, as applicable, prior to their write downs).

Three months ended September 30, 2022

Property and equipment, net

Ground component $ 154,144

Construction in progress:

ground component 5,545

Equipment 202

Total property and equipment, net $ 159,891

Intangible and other assets, net $ 1,271

Total reduction in value of long-lived assets $ 161,162

LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS

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

June 30, 2022 December 31, 2021

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

September 30, 2022 December 31, 2021

Amount Unamortized Discount and Deferred Financing Costs Carrying

2 unchanged sentences

2019 Facility Agreement $ 285,296 $ 23,121 $ 262,175 $ 263,812 $ 27,287 $ 236,525

Vendor financing 63,765 — 63,765 — — —

8.00 % Convertible Senior Notes Issued in 2013

— — — 1,407 — 1,407

Total Debt 282,023 24,572 257,451 265,219 27,287 237,932

Total debt and vendor financing $ 349,061 $ 23,121 $ 325,940 $ 265,219 $ 27,287 $ 237,932

current portion 63,765 — 63,765 — — —

Long-term debt and vendor financing $ 285,296 $ 23,121 $ 262,175 $ 265,219 $ 27,287 $ 237,932

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.

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

All amounts outstanding associated with the Company's vendor financing arrangement are due within the next twelve months and, therefore, are reflected as a current liability on the Company's consolidated balance sheets.

2019 Facility Agreement

2 unchanged sentences

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 June 30, 2022, the Company was in compliance with the covenants of the 2019 Facility Agreement, except as it relates to capital expenditures.

In August 2022, the Company received a waiver letter from its lenders increasing permitted capital expenditures for 2022.

As of September 30, 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.

The Company generated excess cash flow for the six-month measurement period ended June 30, 2022 and expects to make a prepayment of approximately $6.0 million in August 2022.

The Company generated excess cash flow for the six-month measurement period ended June 30, 2022 and was required to pay $ 6.3 million to its lenders in August 2022.

This payment reduced future principal payment obligations.

The Service Agreements require the Company to refinance all loans outstanding under the 2019 Facility Agreement;

the portion held by Thermo is to be refinanced upon commencement of Services (expected to be November 2022) and the remaining portion is to be refinanced within 90 days of the commencement of Services.

Refer to Note 6:

1 unchanged sentence

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

Vendor Financing

In February 2022, the Company entered into a satellite procurement agreement with Macdonald, Dettwiler and Associates Corporation (“MDA”) (see Note 8:

Commitments and Contingencies for further discussion).

As of September 30, 2022, the Company had recorded $ 63.8 million in short-term vendor financing on its consolidated balance sheet associated with this agreement.

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

On October 28, 2022, the Company executed an amendment to extend this payment deferral date and allow for other related changes in terms, including two $ 7.0 million payments (one of which was made on October 31, 2022 and the second is required to be made in November 2022) and interest that will accrue on the amount outstanding at an annual rate of 7 %.

The total interest accrued was $ 0.2 million as of September 30, 2022.

All remaining amounts outstanding are required to be paid in December 2022.

Concurrently, the Company continues to pursue debt financing for the funding of the construction and launch costs for these satellites (discussed below).

New Satellite Construction Financing

As discussed in Note 4:

Property and Equipment and Note 8:

Commitments and Contingencies, the Company entered into a contract with MDA to construct new satellites.

Under the Service Agreements, the Company is required to raise additional debt capital for the construction and launch of the new satellites and targets to complete such financing during the fourth quarter of 2022.

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

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.

1 unchanged sentence

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.

As a result of the conversions during 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 in 2022 was a gain of less than $0.1 million.

Refer to Note 6:

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

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 June 30, 2022, the Company had recorded $ 73.6 million in short-term vendor financing on its condensed consolidated balance sheet associated with this agreement.

Deferred payments are due in August 2022 under the terms of the agreement.

The Company intends to seek an extension of the maturity date while it pursues debt financing for the funding of the construction and launch costs for these satellites.

2009 Facility Agreement

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The 2009 Facility Agreement was fully repaid in November 2021.

As a result of prepayments made under the 2009 Facility Agreement during the second quarter of 2021, the Company wrote off $ 2.3 million in deferred financing costs, which represents the portion of debt prepaid by the Company in the second quarter of 2021, and which was recorded as a loss on extinguishment of debt on its condensed consolidated statements of operations.

As a result of prepayments made under the 2009 Facility Agreement during the second and third quarters of 2021, the Company wrote off $ 2.3 million and $ 0.8 million, respectively, in deferred financing costs, which represented the portion of debt prepaid by the Company in the second and third quarters of 2021, and were recorded as a loss on extinguishment of debt on its condensed consolidated statements of operations.

Paycheck Protection Program Loan

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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.

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.

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

None of these derivative instruments are designated as a hedge.

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

June 30, 2022 December 31, 2021

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

September 30, 2022 December 31, 2021

Derivative (liabilities) assets:

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$ — ( 1,364 )

As of June 30, 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.

As of September 30, 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 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 Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

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, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Compound embedded derivative with the 2013 8.00 % Notes

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Compound embedded derivative with the 2019 Facility Agreement 662 ( 55 ) ( 1,282 ) 327

Total derivative loss $ ( 1,242 ) $ ( 1,310 ) $ ( 1,728 ) $ ( 2,439 )

Total derivative gain (loss) $ 662 $ 229 $ ( 1,066 ) $ ( 2,210 )

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.

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

Fair Value Measurements for further discussion.

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

June 30, 2022

September 30, 2022

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

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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 20 % and 13 % at June 30, 2022 and December 31, 2021, respectively.

The most significant observable input used in the fair value measurement is the discount yield, which was 22 % and 13 % at September 30, 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.

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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.

As the expected timing and amount of prepayments decrease, the fair value of the embedded derivative also decrease.

During the third quarter of 2022, the Company's expected probability of refinancing the 2019 Facility Agreement increased and therefore the fair value of the embedded derivative reduced.

Long-Term Debt and Other Financing Arrangements for further discussion.

Rollforward of Recurring Level 3 Assets and Liabilities

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Unrealized loss, included in derivative loss ( 1,066 ) ( 1,043 )

Balance at end of period, June 30, 2022 and December 31, 2021, respectively

Balance at end of period, September 30, 2022 and December 31, 2021, respectively

$ ( 798 ) $ ( 880 )

Fair Value of Debt Instruments

Fair Value of Debt Instruments and Vendor Financing

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 June 30, 2022.

The Company's vendor financing arrangement is recorded at net carrying value, which approximates fair value.

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

accordingly, there is no value in the table below as of September 30, 2022.

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value

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Nonrecurring Fair Value Measurements

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

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

Derivative Liabilities

13 unchanged sentences

0.18 % $ 0.69 19 % $ 1.21

Prepaid and Other Current Assets, Intangible and Other Assets and Long-Lived Assets

Prepaid and other current assets, intangible and other assets and long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable.

During 2022, the Company wrote down the value of certain assets as reflected in the table below (in thousands).

Reduction in the Value of Assets

Three Months Ended Nine Months Ended

September 30, 2022

Prepaid and other current assets

Prepaid licenses and royalties (1)

Intangible and other assets, net

Intangible and other assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable.

During the second quarter of 2022, the Company wrote off approximately $ 0.5 million of work in progress associated with its spectrum intangible assets.

Prepaid licenses and royalties (1)

Internally developed technology and software (2)

Spectrum intangible assets (3)

Property and equipment, net (2)

159,891 159,891

Grand Total $ 166,001 $ 166,526

While developing its second-generation Duplex products and services, the Company signed various licensing and royalty agreements necessary for the manufacture and distribution of such products and services.

These prepayments were classified as either current or non-current based on the estimated portion of expense to be recognized over the next twelve months.

As of September 7, 2022, approximately $ 0.2 million and $ 4.5 million, respectively, was recorded in Prepaid and other current assets and Intangible and other assets, net, on the Company's consolidated balance sheets.

On September 7, 2022, these prepaid assets were no longer considered recoverable.

The Company recorded a reduction in value of long-lived assets on its condensed consolidated statements of operations for the amount shown in the table above during the third quarter of 2022.

During 2018 and 2019, the Company placed into service second-generation ground Duplex assets (including associated developed technology and software upgrades) which represented the gateways capable of providing commercial traffic to support Sat-Fi2®.

Additionally, the Company recorded certain costs in construction in progress for spare software associated with the second-generation Duplex assets.

On September 7, 2022, the Company re-assessed its asset grouping for long-lived assets and determined that the second-generation Duplex assets are no longer part of the Company's overall satellite and ground network.

These second-generation Duplex assets will no longer provide future cash flows to the Company.

As of September 7, 2022, approximately $ 1.3 million was recorded in Intangible and other assets, net, and $ 159.9 million was recorded in Property and equipment, net.

The Company recorded a reduction in value of long-lived assets on its condensed consolidated statements of operations for the amount shown in the table above during the third quarter of 2022.

During the second and third quarters of 2022, the Company wrote off approximately $ 0.5 million and $ 0.1 million, respectively, of work in progress associated with its spectrum intangible assets, previously recorded in Intangible and other assets, net, on its consolidated balance sheets.

The work in progress was related to efforts to obtain spectrum licensing authority in certain countries around the world;

during the second quarter of 2022, the Company determined that it would not continue pursing such authorities in these countries and recorded a reduction in the value of long-lived assets in its condensed consolidated statements of operations for the six months ended June 30, 2022.

during the second and third quarters of 2022, the Company determined that it would not continue pursing such authorities in these countries and recorded a reduction in the value of long-lived assets in its condensed consolidated statements of operations during the nine months ended September 30, 2022.

In addition to the items discussed above relative to the Company's second-generation Duplex assets, the Company wrote down the value of equipment held in inventory during the third quarter of 2022.

Included in the Company's inventory balance were second-generation Duplex assets, including finished goods, chips and component parts to be used in manufacturing such devices as well as second-generation Duplex gateway spare parts, totaling $ 6.9 million.

Additionally, the Company recorded amounts prepaid to its product manufacturer related to second-generation Duplex products, previously included in Prepaid and other current assets on its consolidated balance sheets totaling $ 1.6 million.

The Company concluded that there was no remaining net realizable value of its second-generation Duplex inventory including prepayments to its product manufacturer.

Accordingly, during the third quarter of 2022, the Company recorded a reduction in the value of inventory and prepaid and other current assets totaling $ 8.5 million on its condensed consolidated statements of operations, representing the carrying value of these assets on September 7, 2022.

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 as well as satellite construction and launch costs.

Under this agreement, the customer has made advance payments to the Company for 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.

The Terms Agreement also provides for various commitments with which the Company must comply to the extent that services under the agreement continue.

Service Agreements

The Service Agreements set forth the primary terms for the Company to provide services to Partner and incur costs related primarily to new gateways and upgrades at existing gateways as well as satellite construction and launch costs.

The Service Agreements have no expiration date but provide that each party may terminate subject to certain notice requirements and, in some cases, other conditions.

In the event Partner terminates the agreements or the deliverables for the second phase of the contract, Partner will reimburse the Company for the cost of materials purchased or manufactured through the date of such termination notice, subject to certain conditions.

The Service Agreements also provide for various commitments with which the Company must comply, including to:

• Allocate 85 % of its current and future network capacity to support the Services;

• Provide and maintain all resources, including personnel, software, satellite, gateways, satellite spectrum and regulatory rights necessary to provide the Services (the “Required Resources”);

• Prioritize the Services and provide Partner with priority access to the Required Resources, including the Company’s licensed satellite spectrum;

• Maintain minimum quality and coverage standards and provide continuity of service;

• Allow Partner to recoup advance payments made to Globalstar from future service fees or, to the extent recoupment is not possible, to repay such amounts in cash;

• Provide the Resource Protections as defined in the Service Agreements.

The Service Agreements require the Company to raise additional debt capital for the construction and launch of the new satellites, which the Company targets to be complete during the fourth quarter of 2022.

The Service Agreements require the Company (i) upon commencement of the Services, to refinance all loans outstanding under the 2019 Facility Agreement that are held by affiliates of the Thermo and (ii) within 90 days of the commencement of the Services, to refinance all loans outstanding under the 2019 Facility Agreement that are held by persons other than Thermo.

The Service Agreements also provide that Partner may elect to receive warrants (the "Warrants") to purchase up to 2.64 % of the Company’s outstanding common stock (see further discussion in Note 11:

Loss Per Share).

In addition, Partner has the right, but not the obligation, to participate in certain issuances of the Company’s equity securities, in order to maintain its percentage interest in the Company (determined on a fully diluted basis, assuming exercise of all the Warrants).

Refer to Note 1:

Basis of Presentation, Note 2:

Revenue, Note 3:

Leases and Note 4:

Property and Equipment for further discussion.

Leases, Note 4:

Property and Equipment and Note 5:

Long-Term Debt and Other Financing Arrangements for further discussion.

Satellite Procurement Agreement

In February 2022, the Company entered into a satellite procurement agreement with Macdonald, Dettwiler and Associates Corporation ("MDA") 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.

In February 2022, the Company entered into a satellite procurement agreement with MDA 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 Partner under the Service Agreements, 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.

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;

1 unchanged sentence

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.

The current terms of the agreement with MDA provide for the deferral of milestone payments through August 2022.

As of June 30, 2022, the total amount of deferred payments is approximately $ 74.0 million.

The Company intends to seek an extension of the maturity date while it pursues a broader financing.

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

Under the Service Agreements, subject to certain conditions, Partner is required to reimburse 95 % of the capital expenditures and certain other costs incurred for this contract.

Refer to Note 5:

Long-Term Debt and Other Financing Arrangements for further discussion of the vendor financing arrangement with MDA.

RELATED PARTY TRANSACTIONS

Payables to Thermo and other affiliates related to normal purchase transactions were $ 0.4 million and $ 0.4 million as of June 30, 2022 and December 31, 2021, respectively.

Payables to Thermo and other affiliates related to normal purchase transactions were $ 0.1 million and $ 0.4 million as of September 30, 2022 and December 31, 2021, respectively.

Transactions with Thermo

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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 six months ended June 30, 2022 and 2021, the Company incurred lease expense of $ 0.8 million under this lease agreement.

During each of the nine months ended September 30, 2022 and 2021, the Company incurred lease expense of $ 1.2 million under this lease agreement.

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

1 unchanged sentence

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 2019 Facility Agreement was approximately $ 38.0 million, of which $ 8.3 million was accrued during the six months ended June 30, 2022.

Interest accrued since inception with respect to Thermo's portion of the debt outstanding on the 2019 Facility Agreement was approximately $ 39.4 million, of which $ 9.7 million was accrued during the nine months ended September 30, 2022.

As discussed in Note 8:

Commitments and Contingencies, the Service Agreements require the Company to refinance all loans outstanding under the 2019 Facility Agreement;

the portion associated with Thermo is required to be refinanced upon commencement of Services, which is expected to be during the fourth quarter of 2022.

In connection with the Service Agreements, in September 2022, Partner and Thermo entered into a lock-up and right of first offer agreement that generally (i) requires Thermo to offer any shares of Globalstar common stock to Partner before transferring them to any other Person other than affiliates of Thermo and (ii) prohibits Thermo from transferring shares of Globalstar common stock if such transfer would cause Thermo to hold less than 51.00 % of the outstanding common stock of the Company for a period of 5 years from the Service Launch (as defined in Note 1:

Basis of Presentation).

This agreement does not prohibit the Company from entering into a change of control transaction at any time.

Additionally, upon commencement of the Services, the Service Agreements require the Company to refinance all loans outstanding under the 2019 Facility Agreement that are held by Thermo.

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

PENSIONS AND OTHER EMPLOYEE BENEFITS

Defined Benefit Plan

In January 2022, the Company received consent from its senior lenders to terminate the Retirement Plan of Globalstar, Inc.

(the "Pension Plan").

The Pension Plan was frozen, effective October 23, 2003, for participation and benefit accrual purposes.

The Pension Plan was settled in August 2022, which resulted in the Company no longer have any remaining pension plan obligations as of September 30, 2022.

The total settlement of $ 7.7 million was paid out through assets held in the Pension Plan and cash, totaling $ 5.0 million and $ 2.7 million, respectively,

Upon settlement, the Company recorded a pension settlement loss totaling $ 1.5 million, reflected in Other income (expense) on the Company's condensed consolidated statements of operations during the nine months ended September 30, 2022.

LOSS PER SHARE

4 unchanged sentences

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 six months ended June 30, 2022 and 2021 (amounts in thousands, except per share data):

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

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, 2022 and 2021 (amounts in thousands, except per share data):

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Net loss $ ( 204,361 ) $ ( 30,885 ) $ ( 251,580 ) $ ( 88,667 )

1 unchanged sentence

Net loss per common share - basic and diluted $ ( 0.11 ) $ ( 0.02 ) $ ( 0.14 ) $ ( 0.05 )

For the three months ended June 30, 2022 and 2021, 7.8 million and 7.3 million shares, respectively, of potential common stock were excluded from diluted shares outstanding because the effects of potentially dilutive securities would be anti-dilutive.

For the six months June 30, 2022 and 2021, 7.6 million and 7.1 million shares, respectively, of potential common stock were excluded from diluted shares outstanding because the effects of potentially dilutive securities would be anti-dilutive.

For the three months ended September 30, 2022 and 2021, 9.4 million and 11.0 million shares, respectively, of potential common stock were excluded from diluted shares outstanding because the effects of potentially dilutive securities would be anti-dilutive.

For the nine months September 30, 2022 and 2021, 8.8 million and 10.2 million shares, respectively, of potential common stock were excluded from diluted shares outstanding because the effects of potentially dilutive securities would be anti-dilutive.

The Service Agreements also provide that Partner may elect to receive warrants (the "Warrants") to purchase up to 2.64 % of the Company’s outstanding common stock, to be calculated on a fully diluted basis on the date Partner begins providing the Services (estimated to be November 2022), at a blended exercise price of $ 1.01 , which is based on the price of Globalstar common stock on the dates of certain past milestones provided under the Service Agreements.

As of September 30, 2022, the estimated Warrants to purchase shares of Globalstar common stock is 49.1 million with estimated proceeds to the Company totaling $ 49.8 million.

Partner is under no obligation to receive the Warrants or to exercise them.

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