What changed in this filing

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Item 1A. Risk Factors

2023-03-01 compared with 2022-02-25 · 142 added, 147 removed, 332 unchanged (47% of the section changed)

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Risks Related to Our Business

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

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

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

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

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

We experienced an initial reduction in the volume of sales of our subscriber equipment, received requests for service pricing concessions from certain customers, and were impacted by certain of our customers not being able to pay outstanding balances.

These factors negatively impacted our results of operations and may continue in the future.

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

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

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

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

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

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

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

There is no assurance that we will be able to do this successfully, and if we do not, our lenders would be able to exercise their remedies under the 2019 Facility Agreement, including accelerating maturity of all our obligations under the 2019 Facility Agreement.

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

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

Our products and services are subject to the risks inherent in relying on a large-scale, complex telecommunications system employing advanced technology.

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

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

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

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

We do not insure our satellites against in-orbit failures after an initial period of six months, whether the failures are caused by internal or external factors.

In-orbit failure may result from various causes, including component failure, solar array failures, telemetry transmitter failures, loss of power or fuel, inability to control positioning of the satellite, solar or other astronomical events, including solar radiation and flares, and collision with space debris or other satellites.

These failures are commonly referred to as anomalies.

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

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

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

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

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

In addition, satellites are particularly vulnerable to loss and malfunction at the time they are launched and deployed into orbit, and some of our competitors have experienced catastrophic losses of substantial numbers of satellites in connection with launch and deployment.

While we typically obtain launch insurance to mitigate the risk of such a loss, such insurance would not cover all our economic losses if we experienced such an event, and there would be a substantial delay before we could obtain satellites to replace the ones we lost.

Accordingly, a loss of a significant number of our new satellites at launch or deployment

could adversely affect our ability to continue to provide our existing satellite services and may cause us to lose opportunities to use our constellation to provide new services.

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

Satellite repositioning may increase the risk of collision or damage to our satellites and may result in degraded service during the repositioning.

Although we do not incur any direct cash costs related to the failure of a satellite, if a satellite fails, we record an impairment charge in our statement of operations to reduce the remaining net book value of that satellite, if any, to zero, and any such impairment charges could depress our net income (or increase our net loss) for the period in which the failure occurs.

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

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

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

Revenue under the Service Agreements constitutes a substantial portion of our current revenues, and there is no assurance that we will receive the revenue expected under the Service Agreements.

The Service Agreements contributed approximately 24% of our revenue for the year ended December 31, 2022.

The Service Agreements impose a number of substantial obligations on us, provide for certain of our fees to be payable only upon satisfaction of the conditions therein and are terminable by each party.

It is possible that we may fail to meet these obligations, that the conditions to the payment of such fees may not be satisfied, that our Partner's products that employ the Services will not succeed or that the Service Agreements may be terminated.

If any of these events were to occur, we would not receive the revenues we currently expect to receive under the Service Agreements, which could materially and adversely affect our business and results of operations.

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

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Our gateway facilities are subject to the risk of significant malfunctions or catastrophic loss due to unanticipated events and would be difficult to replace or repair and could require substantial lead-time to do so.

In North America, we have implemented contingency coverage which allows neighboring gateways to provide services in the event of a gateway failure.

America, we have implemented contingency coverage which allows neighboring gateways to provide services in the event of a gateway failure.

Material changes in the operation of these facilities may be subject to prior FCC approval, and the FCC might not give such approval or may subject the approval to other conditions that could be unfavorable to our business.

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

We may decide to abandon our second-generation long-lived assets and inventory, and we may not be able to recover the full value of these assets.

Over the past few years, there has been a shift in demand across the MSS industry from full Duplex voice and data services to IoT-enabled devices.

To align our business model with this evolution, we have temporarily ceased sales of and services to subscribers using our second-generation ground infrastructure, which supports certain Duplex devices, such as Sat-Fi2®.

We are currently evaluating opportunities for these devices relative to other product and service offerings that use this infrastructure as well as the capacity required to support these devices relative to other possible uses for the capacity.

If we determine that an alternative use case is more likely to generate more cash flows than our traditional Duplex subscriber services over these gateway assets and decide not to resume offering such services, we will assess the impact of discontinuing these operations.

Additionally, the majority of our inventory balance is second-generation Duplex devices, chips and gateway spare parts and we may write down the value of this inventory if we elect to discontinue providing these subscriber services.

Any such strategic shift may not be successful, and, among other things, the incremental revenue we receive from alternative products and services might not offset the revenues we lose and costs we incur in terminating these subscriber services.

Our satellites may collide with space debris which could adversely affect the performance of our constellation.

Our ability to maneuver our satellites to avoid potential collisions with space debris is limited by, among other factors, uncertainties and inaccuracies in the projected orbit location of, and predicted conjunctions with, debris objects tracked and cataloged by the U.S.

Some space debris is too small to be tracked, and therefore its orbital location is completely unknown.

Debris that cannot be tracked is still large enough to potentially cause severe damage to or failure of one of our satellites should a collision occur.

If our constellation experiences satellite collisions with space debris, our service could be impaired.

Any such collision could potentially expose us to significant losses.

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

Natural disasters could damage or destroy our ground stations and disrupt service to our customers.

In addition, the collateral effects of disasters such as flooding may impair, damage or destroy our ground equipment.

If a natural disaster were to impair, damage or destroy any of our ground facilities, we may be rendered unable to provide service to our customers in the affected area, either temporarily or indefinitely.

Even if our gateways are not affected by natural disasters, our service could be disrupted if a natural disaster damages the public switch telephone network, terrestrial wireless networks or our ability to connect to the public switch telephone network or terrestrial wireless networks.

Additionally, there are inherent dangers and risk associated with our satellite operations, including the risk of increased radiation.

Any such failures or service disruptions could harm our business and results of operations.

Our products and services are subject to the risks inherent in relying on a large-scale, complex telecommunications system employing advanced technology.

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

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

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

We do not insure our satellites against in-orbit failures after an initial period of six months, whether the failures are caused by internal or external factors.

These failures are commonly referred to as anomalies.

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

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

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

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

Accordingly, a loss of a significant number of our new satellites at launch or deployment could adversely affect our ability to continue to provide our existing satellite services and may cause us to lose opportunities to use our constellation to provide new services.

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

If a satellite fails prior to the end of its estimated useful life, we record an impairment charge in our statement of operations to reduce the remaining net book value of that satellite to zero;

any such impairment charges could depress our net income (or increase our net loss) for the period in which the failure occurs.

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

If demand does not increase, our revenues and profitability may not increase as we expect.

Demand for wireless communication services may not grow, or may decrease, either generally or in particular geographic markets, for particular types of services or during particular time periods.

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

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

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

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

Our business plan assumes we will grow our subscriber base.

If we are not able to do so, it may adversely impact our business prospects.

However, demand for wireless communication services may not grow, or may decrease, either generally or in particular geographic markets, for particular types of services or during particular time periods.

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

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

The success of our business plan will depend on a number of factors, including but not limited to:

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If we are not able to suitably service, upgrade or replace our equipment, it could harm our ability to provide our services and generate revenue.

We face intense competition in all of our markets, which could result in a loss of customers, lower revenues and difficulty entering new markets.

Satellite-based Competitors

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

Iridium, Thuraya, Inmarsat and ORBCOMM Inc.

Recently, the FCC partially approved SpaceX's application to launch a portion of its satellite constellation.

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

We also face competition with respect to network coverage and market share in specialized industries, such as maritime and governmental.

Other providers of satellite-based products could introduce their own products similar to our SPOT, Commercial IoT or Duplex products, which may materially adversely affect our business plan and sales volume.

In addition, we may face competition from new competitors or new technologies.

Many companies target the same customers, and we may not be able to successfully retain our existing customers or attract new customers.

As a result, we may not grow our customer base and revenue.

Additionally, in connection with the Service Agreements, our direct to device service, also faces competition from other satellite service providers that are expected to provide similar satellite services to competitive smartphone devices.

Terrestrial Competitors

In addition to our satellite-based competitors, terrestrial wireless voice and data service providers are continuing to expand into rural and remote areas, particularly in less developed countries.

They provide the same general types of services and products that we provide through our satellite-based system.

Many of these companies have greater resources, more name recognition and newer technologies than we do.

Industry consolidation could adversely affect us by increasing the scale or scope of our competitors and thereby making it more difficult for us to compete.

We could lose market share and revenue as a result of increasing competition from land-based communication service providers.

Although satellite communications services and ground-based communications services are not identical, the two compete in similar markets with similar services.

Consumers may perceive cellular voice communication products and services as cheaper and more convenient than satellite-based products and services.

Terrestrial Broadband Network Competitors

We also expect to compete with a number of other satellite companies that plan to develop terrestrial networks that utilize their MSS spectrum.

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

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

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

Other Spectrum Owners

In the United States, our terrestrial spectrum efforts will compete with other terrestrial spectrum holders including Anterix, Nextwave and holders to CBRS licenses.

The government may also unlock new spectrum bands.

Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition.

Our results of operations are materially affected by economic and political conditions in the United States and internationally, including inflation, deflation, interest rates, recession, availability of capital, energy and commodity prices, trade laws and the effects of governmental initiatives to manage economic conditions.

Current or potential customers may delay or decrease spending on our products and services as their business and/or budgets are impacted by economic conditions.

The inability of current and potential customers to pay us for our products and services may adversely affect our earnings and cash flows.

In addition, deterioration of conditions in worldwide credit markets could limit our ability to obtain financing to fund our operations and capital expenditures.

The current invasion of Ukraine by Russia has escalated tensions among the United States, the North Atlantic Treaty Organization (“NATO”) and Russia.

The United States and other NATO member states, as well as non-member states, have announced new sanctions against Russia and certain Russian banks, enterprises and individuals.

These and any future additional sanctions and any resulting conflict between Russia, the United States and NATO countries could have an adverse impact on our current operations.

Further, such invasion, ongoing military conflict, resulting sanctions and related countermeasures by NATO states, the United States and other countries are likely to lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions for equipment, which could have an adverse impact on our operations and financial performance.

Volatility in the financial markets may impede our ability to access capital markets and may adversely affect our financial condition.

Our Service Agreements with Partner require us to raise additional financing, such as to refinance our 2019 Facility Agreement.

Turmoil in the capital markets, including the tightening of credit and increased interest rates, have impacted, and may continue to impact in the future, our ability to raise financing on terms and at a cost favorable to the Company.

We are, and may be again in the future, required to raise capital during a weak economy, and have little flexibility to wait for more favorable terms or economic conditions.

We are likely to face higher borrowing costs, less available capital, more stringent terms and tighter covenants.

Such unfavorable market conditions could have an adverse impact on our ability to fund our operations and capital expenditures in the future, including our obligations under the Service Agreements and the satellite procurement agreement with MDA.

Any adverse change in the terms of our financing, including increased costs, could have a negative impact on our financial condition.

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

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Recent disruptions in the global supply chain have limited our ability to procure component parts timely and at reasonable prices.

We continue to fulfill customer orders and maintain adequate margins on subscriber equipment sales as well as maintain our gateways;

however the continued impact of global component part shortages is unknown and may adversely impact our business, financial condition and results of operations.

During 2022, supply chain disruptions and production issues negatively impacted our ability to sell our most popular SPOT and Commercial IoT products.

We continue to fulfill customer orders, including the sell-through of safety stock, and maintain adequate margins on subscriber equipment sales as well as maintain our gateways;

however the continued impact of global component part shortages is unknown and may continue to adversely impact our business, financial condition and results of operations.

Our business is capital intensive.

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In addition, if one of our satellites failed unexpectedly, there can be no assurance of insurance recovery for our losses or the timing thereof, and we may need to obtain additional financing to replace the satellite.

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

When we determine we need to obtain additional funds through external financing and are unable to do so on terms and conditions we determine favorable to us or at all, we may be prevented from fully implementing our business strategy.

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

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

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

This software was developed or customized specifically for our use.

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

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

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

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

Replacing such software could be difficult, time consuming and expensive.

This might require us to obtain substitute technology with lower quality or performance standards or at a greater cost.

Others may claim that our products violate their patent or intellectual property rights, which could be costly and disruptive to us.

We operate in an industry fraught with significant intellectual property litigation.

Intellectual property infringement claims or litigation may be brought against us.

Defending intellectual property suits is both costly and time-consuming and, even if ultimately successful, may divert management's attention from other business concerns.

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Approximately 27% and 31% of our total revenue was to customers primarily located in Canada, Europe, Central America, and South America during 2022 and 2021, respectively.

Our results of operations for 2021 and 2020 included net losses of approximately $6.3 million and $0.7 million, respectively, on foreign currency transactions.

Our results of operations for 2022 and 2021 included net losses of approximately $6.6 million and net losses of $6.3 million, respectively, on foreign currency transactions.

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

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Violations of the FCPA, OFAC restrictions or other export control, anti-corruption, anti-money-laundering and anti-terrorism laws or regulations may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

We face intense competition in all of our markets, which could result in a loss of customers, lower revenues and difficulty entering new markets.

Satellite-based Competitors

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

Iridium, Thuraya, Inmarsat and ORBCOMM Inc.

We also face competition with respect to network coverage and market share in specialized industries, such as maritime and governmental.

In addition, we may face competition from new competitors or new technologies.

Many companies target the same customers, and we may not be able to successfully retain our existing customers or attract new customers.

As a result, we may not grow our customer base and revenue.

Terrestrial Competitors

In addition to our satellite-based competitors, terrestrial wireless voice and data service providers are continuing to expand into rural and remote areas, particularly in less developed countries.

They provide the same general types of services and products that we provide through our satellite-based system.

Many of these companies have greater resources, more name recognition and newer technologies than we do.

Industry consolidation could adversely affect us by increasing the scale or scope of our competitors and thereby making it more difficult for us to compete.

We could lose market share and revenue as a result of increasing competition from land-based communication service providers.

Although satellite communications services and ground-based communications services are not identical, the two compete in similar markets with similar services.

Consumers may perceive cellular voice communication products and services as cheaper and more convenient than satellite-based products and services.

Terrestrial Broadband Network Competitors

We also expect to compete with a number of other satellite companies that plan to develop terrestrial networks that utilize their MSS spectrum.

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

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

Other Spectrum Owners

In the United States, our terrestrial spectrum efforts will compete with other terrestrial spectrum holders including Anterix, Nextwave and holders to CBRS licenses.

The government may also unlock new spectrum bands.

Our indebtedness may adversely affect our cash flow and our ability to operate our business, including our ability to incur additional indebtedness.

As of December 31, 2021, our current sources of liquidity include cash on hand ($14.3 million) and future cash flows from operations.

Our operating expenses for the twelve-month period ended December 31, 2021 were $189.8 million.

Our short-term liquidity requirements include primarily funding our operating costs and capital expenditures.

Our principal near-term liquidity requirements include primarily funding our operating costs, capital expenditures, including repayment of amounts being financed through MDA, and future amounts expected to be incurred, under the satellite procurement agreement;

repayment of the remaining principal balance due under the 2019 Facility Agreement;

and interest and dividends due on any debt or preferred equity instruments outstanding.

Our principal sources of liquidity during 2022 included cash on hand ($32.1 million), cash flows from operations and vendor financing.

Our principal sources of liquidity over the next twelve months are expected to include cash on hand, cash flows from operations, prepayments under the Service Agreements (discussed in Recent Developments below) and funds from a debt or equity financing that has not yet been arranged.

Our operating expenses for the twelve-month period ended December 31, 2022 were $369.5 million, which included nonrecurring, noncash impairment charges of $175.1 million as well as noncash depreciation, amortization and accretion of $93.9 million.

Another source of liquidity may include proceeds from the exercise of warrants under the Service Agreements.

We also expect sources of liquidity to include funds from other debt or equity financings that have not yet been arranged;

actively pursuing a new financing arrangement to refinance amounts due under the 2019 Facility Agreement.

On a longer-term basis, our liquidity requirements also include debt service obligations.

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

As of December 31, 2021, the principal balance of our debt obligations was $265.2 million, consisting of $263.8 million under the 2019 Facility Agreement and $1.4 million under the 8.00% Convertible Senior Notes Issued in 2013 (the "2013 8.00% Notes").

Our indebtedness could have several consequences.

As of December 31, 2022, the principal balance of our debt obligations was $203.0 million, consisting of $143.2 million under the 2019 Facility Agreement and $59.8 million under our vendor financing arrangement.

In February 2023, we executed a prepayment agreement under the Service Agreements, whereby Partner is obligated, subject to certain conditions, to fund an amount up to approximately $252.0 million (to be adjusted as required), which is required to be recouped by Globalstar beginning at the earlier of phase two service launch or the third quarter of 2025.

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

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We may also access equity and debt capital markets from time to time or refinance our debt obligations with the intent to improve the terms of our indebtedness;

the availability of such equity or debt may be limited or at unreasonable terms.

Restrictive covenants in our 2019 Facility Agreement may limit our operating and financial flexibility and our inability to comply with these covenants could have significant implications.

Our 2019 Facility Agreement contains a number of significant restrictions and covenants.

the availability of such financing may be unavailable on terms and conditions we determine favorable to us or at all.

Restrictive covenants in our 2019 Facility Agreement and Service Agreements may limit our operating and financial flexibility and our inability to comply with these covenants could have significant implications.

Our 2019 Facility Agreement and prepayment agreement associated with the Service Agreements contain a number of significant restrictions and covenants.

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

Complying with these restrictive covenants, including financial and non-financial covenants in our 2019 Facility Agreement, as well as those that may be contained in any agreements governing future indebtedness, may impair our ability to finance our operations or capital needs or to take advantage of favorable business opportunities.

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

Our 2019 Facility Agreement includes a limitation on expenditures in connection with spectrum rights, which may prohibit us from making certain expenditures that we consider accretive to our business and would otherwise make.

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We have received waivers from our lenders in the past;

however, we may not be successful in obtaining waivers in the future, which may result in noncompliance with restrictions and covenants.

however, we may not be successful in obtaining waivers from the remaining lender in the future, which may result in noncompliance with restrictions and covenants.

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

An event of default under the 2019 Facility Agreement would permit the lenders to accelerate the indebtedness under this agreement.

An event of default under the 2019 Facility Agreement or the Service Agreements would permit the lender to accelerate the indebtedness under these agreements.

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

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A data breach or network disruption could harm our reputation, cause demand for our products and services to fall or compromise our ability to pursue our business plans.

A number of significant, widespread security breaches compromised companies and governmental agencies.

A number of significant, widespread security breaches have compromised companies and governmental agencies.

In some cases, these breaches originated from outside the United States.

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These laws may be interpreted and applied differently from country to country and in a manner that is not consistent with our current data protection practices.

Complying with these varying international requirements could cause us to incur additional costs or change our business practices.

Complying with these varying international

requirements could cause us to incur additional costs or change our business practices.

Our services are accessible in many foreign jurisdictions, and some of these jurisdictions may claim that we are required to comply with their laws, even where we have no local entity, employees or infrastructure.

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Product Liability Insurance and Product Replacement or Recall Costs

We are subject to product liability and product recall claims if any of our products and services are alleged to have caused injury to persons or damage to property.

We may be subject to product liability and product recall claims if any of our products and services are alleged to have caused injury to persons or damage to property.

If any of our products prove to be defective, we may need to recall and redesign them.

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As a result, a failure of one or more of our satellites or the occurrence of equipment failures, collision damage, or other related problems that may result during the de-orbiting process could constitute an uninsured loss and could materially harm our financial condition.

Our satellites may collide with space debris which could adversely affect the performance of our constellation.

Some space debris is too small to be tracked, and therefore its orbital location is completely unknown.

Debris that cannot be tracked is still large enough to potentially cause severe damage to or failure of one of our satellites should a collision occur.

If our constellation experiences satellite collisions with space debris, our service could be impaired.

Any such collision could potentially expose us to significant losses.

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

An epidemic or pandemic could significantly disrupt our operations, including, but not limited to, our workforce, supply

chain, regulatory processes and market demand of our products.

An epidemic or pandemic could also significantly impact our

customers, including their demand for and ability to pay for our services and equipment.

The extent to which COVID-19 could

continue to impact our operations and financial condition will depend on future developments that are highly uncertain and cannot be predicted.

We operate in many tax jurisdictions, and changes in tax rates or adverse results of tax examinations could materially increase our costs.

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Some of our customers may be highly leveraged or subject to their own operating and regulatory risks.

Many of our customers finance their activities through cash flow from operations, the incurrence of debt or the issuance of equity.

Many of our customers finance their activities through cash flows from operations, the incurrence of debt or the issuance of equity.

From time to time, credit is less available and available on more restrictive terms.

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

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

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

Concentrations of customers in certain industries may further increase trade credit risk to our business if certain experience a similar economic downturn.

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

Natural disasters could damage or destroy our ground stations and disrupt service to our customers.

In addition, the collateral effects of disasters such as flooding may impair, damage or destroy our ground equipment.

Additionally, there are inherent dangers and risk associated with our satellite operations, including the risk of increased radiation.

Any such failures or service disruptions could harm our business and results of operations.

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

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

In our opinion there is no pending litigation, investigation, dispute or claim that could have a material adverse effect on our financial condition, results of operations or liquidity.

At this time, we are not aware of any pending litigation, investigation, dispute or claim that could have a material adverse effect on our financial condition, results of operations or liquidity.

However, we may be wrong in this assessment.

Additionally, in the future we may become subject to additional litigation that could have a material adverse effect on our financial position and operating results, on the trading price of our securities and on our ability to access capital markets.

Wireless devices' radio frequency emissions are the subject of regulation and litigation concerning their environmental effects, which includes alleged health and safety risks.

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

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

Additionally, the availability of globally

harmonized spectrum on which our MSS system depends is managed by the ITU.

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

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If we fail to comply with these regulations in any country, we could be subject to sanctions that could affect, materially and adversely, our ability to operate in that country.

Failure to obtain the authorizations necessary to use our assigned radio frequency spectrum and to distribute our

products in certain countries could have a material adverse effect on our ability to generate revenue and on our overall competitive position.

Failure to obtain the authorizations necessary to use our assigned radio frequency spectrum and to distribute our products in certain countries could have a material adverse effect on our ability to generate revenue and on our overall competitive position.

Spectrum values historically have been volatile, and may again be volatile in the future, which could cause the value of our business to fluctuate.

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

Under the FCC's plan for MSS in our frequency bands, we must share frequencies in the United States with other licensed MSS operators.

The FCC may permit other MSS operators to operate in our frequency bands in the future.

To date, there are no other authorized CDMA-based MSS operators.

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

From time to time, Globalstar has faced applications by other operators for access to its licensed spectrum.

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

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

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

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

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

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

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

If the FCC revokes, modifies or fails to renew or amend any FCC licenses we hold, or if we fail to satisfy any of the conditions of our respective FCC licenses, then we may not be able to continue to provide mobile satellite communications services, which would have a material adverse effect on our business and operations.

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

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

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These licenses are also subject to modification by the French regulators.

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

If the French Ministry, ARCEP or other French regulators revoke, modify or fail to renew or amend the licenses we hold or if we fail to satisfy any of the conditions of our respective French licenses, then we may not be able to continue to provide mobile satellite communications services, which would have a material adverse effect on our business and operations.

There can be no assurance that the FCC or our French regulators will renew the licenses we hold.

If the FCC, the French Ministry, ARCEP or any other regulators revoke, modify or fail to renew or amend the licenses we hold or if we fail to satisfy any of the conditions of our respective licenses, then we may not be able to continue to provide mobile satellite communications services, which would have a material adverse effect on our business and operations.

Furthermore, if we operate in any country without a valid license, we could face regulatory fines and criminal sanctions.

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

Restrictive covenants in our 2019 Facility Agreement do not allow us to pay dividends on our common stock for the foreseeable future, which may affect the market for our shares.

Restrictive covenants in our 2019 Facility Agreement and Service Agreements do not allow us to pay dividends on our common stock for the foreseeable future, which may affect the market for our shares.

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

Our 2019 Facility Agreement currently prohibits the payment of cash dividends.

Our 2019 Facility Agreement and Service Agreements currently prohibits the payment of cash dividends on our common stock.

During 2022, we issued shares of Series A Preferred Stock.

The terms of Series A Preferred Stock provides for the payment of cumulative cash dividends at a rate of 7% per annum, subject to certain terms and conditions.

If such dividends are not declared by our board of directors, the dividends will accrue and cumulative payment will be made on the next dividend payment date or upon liquidation.

The issuance of the Series A Preferred Stock required consent from the remaining lender of our 2019 Facility Agreement.

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

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We may issue our previously authorized and unissued securities, resulting in the dilution of the ownership interests of our current stockholders.

We are authorized to issue 2.15 billion shares of common stock and 100 million shares of preferred stock.

As of December 31, 2021, approximately 1.8 billion shares of common stock were issued and outstanding.

As of December 31, 2021, there were 443.5 million shares available for future issuance (of which 100 million are designated as preferred), of which approximately 9.9 million shares were contingently issuable upon the exercise of stock options, the conversion of convertible notes and the vesting of restricted stock awards and units.

We are authorized to issue 2.2 billion shares of common stock and 100 million shares of preferred stock, of which 0.3 million shares are designated as Series A Preferred Stock.

As of December 31, 2022, approximately 1.8 billion shares of common stock were issued and outstanding and 0.1 million shares of Series A Preferred Stock were issued and outstanding.

As of December 31, 2022, there were 0.4 billion shares of common stock available for future issuance, of which approximately 5.1 million shares were contingently issuable upon the exercise of stock options and the vesting of restricted stock awards and units and 49.1 million shares may be exercised by Partner from warrants issued under the Service Agreements to purchase up to 2.64% of our common stock (the "Warrants").

The number of Warrants issued to Partner is subject to certain adjustments, such as divided payments in shares of Globalstar common stock, stock splits, stock repurchases, merger, sale of assets or upon certain issuances of Globalstar common stock.

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

For instance, in connection with the Terms Agreement, we may issue warrants to purchase shares of Globalstar common stock if certain milestones are achieved.

Future sales of substantial amounts of common stock, or the perception that such sales could occur, may have a material adverse effect on the price of our common stock.

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Our certificate of incorporation authorizes our board of directors to issue one or more series of preferred stock and set the terms of the preferred stock without seeking any further approval from holders of our common stock.

Currently, there are 100 million shares of preferred stock authorized.

Currently, there are 100 million shares of preferred stock authorized, of which 0.1 million shares of Series A Preferred Stock are issued and outstanding.

Any preferred stock that is issued may rank ahead of our common stock in terms of dividends, priorities and liquidation premiums and have preferential voting rights to those held by the holders of our common stock.

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Holders of our securities could, therefore, experience a decline in the value of their investment as a result of short sales of our common stock.

Provisions in our charter documents, debt agreements and Delaware corporate law may discourage takeovers, which could affect the rights of holders of our common stock and convertible notes.

Provisions in our charter documents, debt agreements and Delaware corporate law may discourage takeovers, which could affect the rights of holders of our common stock.

Provisions of Delaware law and our amended and restated certificate of incorporation, amended and restated bylaws and our debt agreements could hamper a third party's acquisition of us or discourage a third party from attempting to acquire control of us.

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

What changed 10-K

Item 1A. Risk Factors