What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-08 · 83 added, 67 removed, 351 unchanged (30% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 30,

2024 June 30,

Service revenue $ 57,635 $ 48,648 $ 111,100 $ 101,602

6 unchanged sentences

Stock-based compensation

9,164 2,532 18,391 6,292

Reduction in the value of long-lived assets — — 305 —

8 unchanged sentences

Total other expense ( 8,079 ) ( 2,585 ) ( 16,555 ) ( 13,212 )

Loss before income taxes ( 13,188 ) ( 3,436 )

(Loss) income before income taxes ( 9,501 ) 35 ( 22,689 ) ( 3,401 )

Income tax expense 182 26 190 70

Net loss $ ( 13,196 ) $ ( 3,480 )

Net (loss) income $ ( 9,683 ) $ 9 $ ( 22,879 ) $ ( 3,471 )

Other comprehensive loss:

13 unchanged sentences

(In thousands, except par value and share data)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

7 unchanged sentences

Operating lease right of use assets, net 34,424 34,164

Prepaid satellite costs and customer receivable 12,482 12,443

Intangible and other assets, net of accumulated amortization of $ 13,634 and $ 12,385 , respectively

11 unchanged sentences

Operating lease liabilities 28,752 29,244

Deferred revenue, net 1,543 3,213

Other non-current liabilities 17,651 14,478

3 unchanged sentences

Preferred Stock of $ 0.0001 par value;

99,700,000 shares authorized and none issued and outstanding at March 31, 2024 and December 31, 2023, respectively

99,700,000 shares authorized and none issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series A Perpetual Preferred Stock of $ 0.0001 par value;

300,000 shares authorized and 149,425 issued and outstanding at March 31, 2024 and December 31, 2023, respectively

300,000 shares authorized and 149,425 issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Voting Common Stock of $ 0.0001 par value;

2,150,000,000 shares authorized;

1,883,934,020 and 1,881,194,682 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

1,892,156,225 and 1,881,194,682 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 2,461,320 2,438,703

18 unchanged sentences

Balances – March 31, 2024 149 $ — 1,883,934 $ 188 $ 2,447,581 $ 7,463 $ ( 2,078,178 ) $ 377,054

Net issuance of restricted stock awards, stock for employee stock options and stock for employee stock purchase plan and recognition of stock-based compensation — — 568 — 8,844 — — 8,844

Other — — — — 39 — — 39

Series A Preferred Stock Dividends — — — — ( 2,644 ) — — ( 2,644 )

Issuance of stock in connection with License Agreement with XCOM — — 7,654 1 7,500 — — 7,501

Other comprehensive income — — — — — 1,864 — 1,864

Net loss — — — — — — ( 9,683 ) ( 9,683 )

Balances – June 30, 2024 149 $ — 1,892,156 $ 189 $ 2,461,320 $ 9,327 $ ( 2,087,861 ) $ 382,975

Preferred Stock Common Stock Additional

9 unchanged sentences

Balances – March 31, 2023 149 $ — 1,813,112 $ 181 $ 2,345,604 $ 7,813 $ ( 2,043,744 ) $ 309,854

Net issuance of restricted stock awards, stock for employee stock options and stock for employee stock purchase plan and recognition of stock-based compensation — — 860 — 2,510 — — 2,510

Other — — — — 47 — — 47

Series A Preferred Stock Dividends — — — — ( 2,644 ) — — ( 2,644 )

Fair value of Thermo guarantee associated with the 2023 Funding Agreement — — — — 6,897 — — 6,897

Other comprehensive loss — — — — — ( 1,307 ) — ( 1,307 )

Net income — — — — — — 9 9

Balances – June 30, 2023 149 $ — 1,813,972 $ 181 $ 2,352,414 $ 6,506 $ ( 2,043,735 ) $ 315,366

See accompanying notes to unaudited interim condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended

2024 March 31,

Six Months Ended

2024 June 30,

Cash flows provided by operating activities:

19 unchanged sentences

Payments under the satellite procurement agreement ( 45,214 ) ( 108,664 )

Payments under the launch services agreement ( 16,000 ) —

Payments for other network upgrades to support the Service Agreements ( 3,845 ) ( 6,898 )

3 unchanged sentences

Net cash used in investing activities ( 74,458 ) ( 124,636 )

Cash flows provided by (used in) financing activities:

Cash flows provided by financing activities:

Principal and interest payments of the 2019 Facility Agreement — ( 148,281 )

7 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 682 ) 73

Net increase (decrease) in cash and cash equivalents 2,538 ( 11,595 )

Net increase in cash and cash equivalents 7,590 33,252

Cash and cash equivalents, beginning of period 56,744 32,082

1 unchanged sentence

$ 64,334 $ 65,334

Three Months Ended

2024 March 31,

Six Months Ended

2024 June 30,

Supplemental disclosure of cash flow information:

4 unchanged sentences

Accrued satellite construction assets 19,866 54,228

Re-characterization of 2021 Funding Agreement to debt — 87,950

Fair value of common stock issued for XCOM SSA 7,500 —

Construction in progress assets acquired through XCOM SSA 2,754 —

22 unchanged sentences

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 months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the full year or any future period.

The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the full year or any future period.

Recently Issued Accounting Pronouncements

6 unchanged sentences

The Company is evaluating the impact this ASU may have on its financial statement disclosures.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others.

5 unchanged sentences

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

Three Months Ended

March 31, 2024 March 31, 2023

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Service revenue:

11 unchanged sentences

Revenue associated with the Service Agreements is included in "Wholesale capacity services" in the table above.

As consideration for the services provided by Globalstar under the Service Agreements, payments include a fixed service fee, payments relating to certain service-related operating expenses and capital expenditures, additional fees related to enhanced services, and potential bonus payments subject to satisfaction of certain licensing, service and other related criteria.

The Company also has an agreement with a government services company to utilize the Company's satellite network for a mission critical service for government applications.

Revenue associated with this agreement is included in "Wholesale capacity services" in the table above.

As consideration for the services provided by Globalstar under the Service Agreements, payments include 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 other related criteria.

Accounts Receivable

1 unchanged sentence

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 receivables (amounts in thousands).

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Accounts receivable, net of allowance for credit losses

2 unchanged sentences

Total accounts receivable, net of allowance for credit losses $ 43,148 $ 48,743

In February 2022, the Company entered into an agreement for the purchase of new satellites that will replenish the Company's HIBLEO-4 U.S.-licensed system under the satellite procurement agreement, as amended, with Macdonald, Dettwiler and Associates Corporation ("MDA") and certain other costs incurred for the new satellites;

these payments are expected to be paid to the Company on a straight-line basis commencing with the launch of these satellites through their estimated useful life ("Phase 2 Service Period").

Based on construction in progress incurred by Globalstar, amounts expected to be billed by the Company associated with this phase of the Service Agreements wer e $ 208.3 million a s of March 31, 2024 .

As discussed in Note 5:

Commitments and Contingencies, the Company entered into a satellite procurement agreement and a launch services agreement.

The new satellites purchased under the satellite procurement agreement will replenish the Company's HIBLEO-4 U.S.-licensed system.

Pursuant to the Service Agreements, payments are expected to be paid to the Company on a straight-line basis commencing with the launch of these new satellites through their estimated useful life ("Phase 2 Service Period").

Based on construction in progress incurred by Globalstar, amounts expected to be billed by the Company associated with this phase of the Service A greements were $ 219.0 million a s of June 30, 2024 .

Contract Liabilities

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, which are included in deferred revenue and other non-current liabilities 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 its wholesale capacity customers.

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Short-term contract liabilities

8 unchanged sentences

Total contract liabilities $ 59,245 $ 56,890

For subscriber contract liabilities, the amount of revenue recognized during the three months ended March 31, 2024 and 2023 from performance obligations included in the contract liability balance at the beginning of these periods was $ 7.4 million and $ 8.4 million, respectively.

For wholesale capacity contract liabilities, the amount of revenue recognized during the three months ended March 31, 2024 and 2023 from performance obligations included in the contract liability balance at the beginning of these periods was $ 23.6 million and $ 22.0 million, respectively.

For subscriber contract liabilities, the amount of revenue recognized during the six months ended June 30, 2024 and 2023 from performance obligations included in the contract liability balance at the beginning of these periods was $ 12.8 million and $ 14.0 million, respectively.

For wholesale capacity contract liabilities, the amount of revenue recognized during the six months ended June 30, 2024 and 2023 from performance obligations included in the contract liability balance at the beginning of these periods was $ 25.9 million and $ 33.5 million, respectively.

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

2 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Wholesale capacity contract liabilities, net:

3 unchanged sentences

Advanced payments contractually owed for services expected to be performed with the next-generation satellite constellation prior to the Phase 2 Service Period 12,698 14,204

Advanced payments for the Phase 1 service fee and service-related operating expenses and capital expenditures 19,871 19,907

Advanced payments for the Phase 1 service fee, service-related operating and capital expenditures and other services

27,770 19,907

Other advanced payments associated with future performance obligations 5,063 5,219

28 unchanged sentences

Commitments and Contingencies for further discussion of these agreements.

The table below reflects the amounts recorded on the Company's consolidated balance sheet (amounts in thousands).

2024 December 31,

Satellite Procurement Agreement

Construction in progress $ 207,163 $ 198,884

Accrued construction costs 18,796 55,627

Prepaid construction costs 6,293 6,683

Launch Services Agreement

Construction in progress $ 9,920 $ 6,400

Accrued construction costs 5,728 2,560

Prepaid construction costs 5,408 5,760

Construction in progress costs are recorded in the "space component" of construction in progress in the table above.

These costs include milestones completed under the Satellite Procurement Agreement and Launch Services Agreement as well as associated personnel costs and capitalized interest.

Accrued construction costs reflect work completed, but not yet invoiced under the agreements or amounts reflected in accounts payable at the reporting date.

Prepaid construction costs reflect costs for milestone payments not yet completed and are recorded in " Prepaid satellite costs and customer receivable" on the Company's consolidated balance sheets.

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 and gateway upgrade work in connection with the Service Agreements.

As of June 30, 2024, the Company has incurred $ 208.9 million and $ 19.5 million for milestones completed under the agreements with MDA and SpaceX, respectively.

These costs, as well as associated personnel costs and capitalized interest, are reflected in the "space component" of construction in progress in the table above.

LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Amount Unamortized Discount and Deferred Financing Costs Carrying

10 unchanged sentences

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

As of March 31, 2024, the current portion of long-term debt is associated with the 2021 Funding Agreement and represents the amounts to be paid under the Service Agreements during the next twelve months.

As of June 30, 2024, the current portion of long-term debt is associated with the 2021 Funding Agreement and represents the amounts to be paid under the Service Agreements during the next twelve months.

2023 Funding Agreement

In 2023, the Service Agreements were amended to provide for, among other things, payment of up to $ 252 million to the Company (the “2023 Funding Agreement”), which the Company intends to use to fund 50 % of the amounts due under its agreement with MDA, as well as launch, insurance and ancillary costs incurred in connection with the construction and launch of these satellites.

During 2024, the Company received proceeds of $ 37.7 million.

The total amount paid to the Company under the 2023 Funding Agreement, including fees, is expected to be recouped from amounts payable under the Service Agreements beginning no later than the third quarter of 2025.

6 unchanged sentences

The Company records a debt discount for the difference between the fair value of the debt and the proceeds received and accretes this debt discount to interest expense through the maturity date using an effective interest rate method.

The total proceeds of the February 2024 draw were $ 37.7 million with a fair value of $ 37.2 million.

There has been one draw this year in February 2024 for total proceeds of $ 37.7 million with a fair value of $ 37.2 million.

This difference was attributed to the economic benefit received due to the existing customer relationship.

2 unchanged sentences

The Company's obligations under the 2021 Funding Agreement are secured by a first-priority lien in substantially all of the assets of the Company and its domestic subsidiaries.

This funding is being recouped as services are performed by the Company over the Phase 1 Service Period.

This funding is being recouped as services are performed by the Company over the estimated Phase 1 Service Period with the last recoupment to be made in the first quarter of 2026.

During the six months ended June 30, 2024, a total of $ 17.3 million has been recouped pursuant to the terms of the 2021 Funding Agreement.

2023 13 % Notes

7 unchanged sentences

Holders of Series A Preferred Stock are entitled to receive, when, as and if declared by the Company's Board of Directors or a committee thereof, cumulative cash dividends based on the liquidation preference of the Series A Preferred Stock, at a fixed rate equal to 7.00 % per annum, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year.

During 2024, the Company paid dividends approved by the Company's Board of Directors totaling $ 2.6 million.

Through June 30, 2024, the Company paid dividends approved by the Company's Board of Directors totaling $ 5.3 million.

Fair Value of Debt and Other Financing Arrangements

9 unchanged sentences

In addition, MDA will procure a satellite operations control center for $ 4.9 million as well as other equipment for $ 3.7 million.

As more fully described in the Company's Current Report on Form 8-K filed with the Commission on August 31, 2023, Globalstar entered into a Launch Services Agreement by and between the Company and SpaceX and certain related ancillary agreements (the “Launch Services Agreements”), providing for the launch of the first set of the satellites the Company is acquiring pursuant to the satellite procurement agreement with MDA.

As more fully described in the Company's Current Report on Form 8-K filed with the Commission on August 31, 2023, Globalstar entered into a Launch Services Agreement with SpaceX and certain related ancillary agreements (the “Launch Services Agreements”), providing for the launch of the first set of the satellites the Company is acquiring pursuant to the satellite procurement agreement with MDA.

The Launch Services Agreements provide a launch window from April to September 2025.

5 unchanged sentences

Two other members of the Company's Board of Directors are also directors, officers or minority equity owners of various Thermo entities.

Payables to Thermo related to normal purchase transactions were $ 0.3 million and $ 0.5 million as of March 31, 2024 and December 31, 2023, respectively.

Payables to Thermo related to normal purchase transactions were $ 0.5 million as of June 30, 2024 and December 31, 2023.

Certain general and administrative expenses are incurred by Thermo on behalf of the Company.

7 unchanged sentences

The lease term is ten years and will expire in January 2029.

During each of the three months ended March 31, 2024 and 2023, the Company incurred lease expense of $ 0.4 million under this lease agreement.

During each of the six months ended June 30, 2024 and 2023, the Company incurred lease expense of $ 0.8 million under this lease agreement.

Perpetual Preferred Stock

1 unchanged sentence

Holders of Series A Preferred Stock are entitled to receive, when, as and if declared by our Board of Directors, cumulative cash dividends based on the liquidation preference of the Series A Preferred Stock, at a fixed rate equal to 7.00 % per annum, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year.

During the first quarter of 2024, the Company made dividend payments to Thermo, which were approved by the Company's Board of Directors, totaling $ 2.4 million.

During 2024, the Company made dividend payments to Thermo, which were approved by the Company's Board of Directors, totaling $ 4.8 million.

Service Agreements

In connection with the Service Agreements, 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 five years from the launch of Services in November 2022.

Guaranty with 2023 Funding Agreement

Guarantee with 2023 Funding Agreement

Amounts payable by the Company in connection with the 2023 Funding Agreement and certain other obligations under the Service Agreements are guaranteed by Thermo.

2 unchanged sentences

These warrants expire five years after the date of issuance.

To the extent Thermo is required to advance amounts under the guarantee, the Company is required to issue shares of Common Stock of the Company in respect of such advance in an amount equal to the amount of such payment divided by the average of the volume weighted average price of the Company’s common stock on the five trading days immediately preceding such payment.

To the extent Thermo is required to advance amounts under the guarantee, the Company is required to issue shares of Common Stock of the Company in respect of such advance in an amount equal to the amount of such payment divided by the average of the volume weighted average price of the Company’s common stock for the five trading days immediately preceding such payment.

The Company has a Strategic Review Committee that is required to remain in existence for as long as Thermo and its affiliates beneficially own forty-five percent ( 45 %) or more of Globalstar’s outstanding common stock.

3 unchanged sentences

In connection with the August 2023 License Agreement, Globalstar issued 60.6 million shares of its common stock, representing a transaction value of approximately $ 68.7 million, to XCOM.

The Company and XCOM also executed a Support Services Agreement ("SSA") pursuant to which XCOM is required to provide certain services to the Company.

Fees payable by Globalstar pursuant to the SSA are based on costs incurred and the first payment of $ 11.9 million was paid in August 2023 and is associated with an initial service period of nine months under the SSA.

Of the consideration paid for the License Agreement, 16.7 million shares were issued to Dr.

Jacobs does not have any family relationships with any director or executive officer of the Company and has not been directly or indirectly involved in any related party transactions with the Company, except for transactions related to the License Agreement and the SSA.

The Company and XCOM also executed a Support Services Agreement ("SSA") pursuant to which XCOM is required to provide certain services to the Company.

Fees payable by Globalstar pursuant to the SSA are based on costs incurred.

The first payment of $ 11.9 million was paid in August 2023 for an initial service period of approximately nine months under the SSA.

In June 2024, the Company issued Virewirx 7.7 million shares of Globalstar common stock, representing a transaction value of $ 8.1 million.

This issuance included $ 7.5 million for costs incurred under the SSA, as well as the release of holdback shares under the License Agreement.

The SSA payment covers a period of approximately six months of service costs and was recorded as a prepaid asset upon issuance on the Company's consolidated balance sheet.

In June 2024, Virewirx sold 4.5 million of the total 7.7 million shares in a private placement transaction to an affiliate of the Thermo Companies.

NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss per common share during each of the three months ended March 31, 2024 and 2023 (amounts in thousands, except per share data):

Three Months Ended

March 31, 2024 March 31, 2023

The following table sets forth the computation of basic and diluted loss per common share during each of the three and six months ended June 30, 2024 and 2023 (amounts in thousands, except per share data):

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Net (loss) income

$ ( 9,683 ) $ 9 $ ( 22,879 ) $ ( 3,471 )

3 unchanged sentences

Net loss per common share - basic and diluted

For the three months ended March 31, 2024 and 2023, 21.0 million and 19.7 million shares, respectively, of potential common stock were excluded from diluted shares outstanding because the effects of potentially dilutive securities would be anti-dilutive.

Included in these shares as of March 31, 2024 is a portion of the 49.1 million Warrants issued under the Service Agreements in 2022 based on the treasury stock method.

$ ( 0.01 ) $ 0.00 $ ( 0.01 ) $ 0.00

For the three months ended June 30, 2024 and 2023, 17.5 million and 18.2 million shares, respectively, of potential common stock were excluded from diluted shares outstanding because the effects of such securities would be anti-dilutive.

For the six months ended June 30, 2024 and 2023, 19.2 million and 19.0 million shares, respectively, of potential common stock were excluded from diluted shares outstanding because the effects of such securities would be anti-dilutive.

Included in these shares for all periods presented is a portion of the 49.1 million Warrants issued under the Service Agreements in 2022 based on the treasury stock method.

During 2023, 5.0 million of the warrants that were issued to Thermo for its guarantee of the 2023 Funding Agreement vested;

none of these warrants are included in the potentially dilutive securities for the period due to the exercise price of the warrants relative to the average market price of Globalstar common stock during the period.

none of these warrants are included in the potentially dilutive securities for the periods presented due to the exercise price of the warrants relative to the average market price of Globalstar common stock during the periods.

Also excluded from the amounts above are 5.0 million unvested warrants associated with Thermo's guarantee of the 2023 Funding Agreement;

1 unchanged sentence

As discussed in Note 4:

Long-Term Debt and Other Financing Arrangements, the Company's Board of Directors approved the payment of dividends totaling $ 2.6 million for each of the three months ended March 31, 2024 and 2023, respectively, on its Series A Preferred Stock.

Long-Term Debt and Other Financing Arrangements and as reflected in table above, the Company's Board of Directors approved the payment of dividends for each of the three and six months ended June 30, 2024 and 2023, respectively, on its Series A Preferred Stock.

This amount adjusts the numerator used to calculate loss per share.

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