What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 163 added, 94 removed, 340 unchanged (43% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

Three Months Ended Six Months Ended

2024 June 30,

2023 June 30,

2024 June 30,

Three Months Ended Nine Months Ended

September 30,

2024 September 30,

2023 September 30,

2024 September 30,

Service revenue $ 68,908 $ 53,643 $ 180,008 $ 155,245

10 unchanged sentences

Total operating expenses 62,873 55,666 185,872 159,571

(Loss) income from operations ( 1,422 ) 2,620 ( 6,134 ) 9,811

Other (expense) income:

Income from operations 9,434 2,017 3,300 11,828

Other income (expense):

Loss on extinguishment of debt — — — ( 10,403 )

Interest income and expense, net of amounts capitalized ( 2,872 ) ( 3,945 ) ( 10,301 ) ( 11,047 )

Foreign currency (loss) gain ( 4,493 ) 2,038 ( 8,335 ) 3,945

Foreign currency gain (loss) 4,918 ( 4,151 ) ( 3,417 ) ( 206 )

Other 186 25 ( 605 ) 373

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

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

Total other income (expense) 2,232 ( 8,071 ) ( 14,323 ) ( 21,283 )

Income (loss) before income taxes 11,666 ( 6,054 ) ( 11,023 ) ( 9,455 )

Income tax expense 1,732 115 1,922 185

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

Other comprehensive loss:

Net income (loss) $ 9,934 $ ( 6,169 ) $ ( 12,945 ) $ ( 9,640 )

Other comprehensive income (loss):

Foreign currency translation adjustments ( 3,775 ) 2,503 482 ( 233 )

Comprehensive loss $ ( 7,819 ) $ ( 1,298 ) $ ( 18,622 ) $ ( 6,207 )

Net loss attributable to common shareholders (Note 7:)

Comprehensive income (loss) $ 6,159 $ ( 3,666 ) $ ( 12,463 ) $ ( 9,873 )

Net income (loss) attributable to common shareholders (Note 7:)

7,261 ( 8,842 ) ( 20,906 ) ( 17,572 )

Net loss per common share:

Net income (loss) per common share:

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

7 unchanged sentences

(In thousands, except par value and share data)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current assets:

24 unchanged sentences

Stockholders’ equity:

Preferred Stock of $ 0.0001 par value;

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 June 30, 2024 and December 31, 2023, respectively

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

Voting Common Stock of $ 0.0001 par value;

2,150,000,000 shares authorized;

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

1,892,348,276 and 1,881,194,682 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 2,466,279 2,438,703

8 unchanged sentences

Preferred Stock Common Stock Additional

Capital Accumulated Other Comprehensive Income

Capital Accumulated Other Comprehensive Income (Loss) Retained

Deficit Total

8 unchanged sentences

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 — — — — 39 — — 39

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

1 unchanged sentence

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

Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation — — 192 7,566 — — 7,566

Series A Preferred Stock Dividends — — — — ( 2,673 ) — — ( 2,673 )

Other — — — — 66 — — 66

Other comprehensive loss — — — — — ( 3,775 ) — ( 3,775 )

Net income — — — — — — 9,934 9,934

Balances – September 30, 2024 149 — 1,892,348 $ 189 $ 2,466,279 $ 5,552 $ ( 2,077,927 ) $ 394,093

Preferred Stock Common Stock Additional

10 unchanged sentences

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 — — — — 47 — — 47

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

1 unchanged sentence

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

Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation — — 2,171 1 3,870 — — 3,871

Series A Preferred Stock Dividends — — — — ( 2,673 ) — — ( 2,673 )

Issuance of stock in connection with License Agreement with XCOM — — 59,977 6 70,415 — — 70,421

Other — — — — 47 — — 47

Other comprehensive income — — — — — 2,503 — 2,503

Net loss — — — — — — ( 6,169 ) ( 6,169 )

Balances – September 30, 2023 149 — 1,876,120 $ 188 $ 2,424,073 $ 9,009 $ ( 2,049,904 ) $ 383,366

See accompanying notes to unaudited interim condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended

2024 June 30,

Nine Months Ended

September 30,

2024 September 30,

Cash flows provided by operating activities:

Net loss $ ( 22,879 ) $ ( 3,471 )

$ ( 12,945 ) $ ( 9,640 )

Adjustments to reconcile net loss to net cash provided by operating activities:

2 unchanged sentences

Noncash interest and accretion expense 6,422 12,304

Unrealized foreign currency loss (gain) 8,361 ( 4,008 )

Unrealized foreign currency loss 3,441 131

Write off of debt discount and deferred financing costs upon extinguishment of debt — 10,194

28 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 558 ) ( 19 )

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

Net (decrease) increase in cash and cash equivalents ( 4,828 ) 32,054

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

1 unchanged sentence

$ 51,916 $ 64,136

Six Months Ended

2024 June 30,

Nine Months Ended

September 30,

2024 September 30,

Supplemental disclosure of cash flow information:

5 unchanged sentences

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

Fair value of common stock issued for License Agreement — 58,534

Fair value of common stock issued for XCOM SSA 7,500 11,887

23 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 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.

The results of operations for the three and nine months ended September 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

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however, retrospective application is also permitted.

The Company will adopt this standard when it becomes effective on January 1, 2025.

The Company plans to adopt this standard when it becomes effective on January 1, 2025.

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

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Early adoption is permitted, and the amendments should be applied retrospectively.

The Company plans to adopt this ASU for its fiscal year end December 31, 2024 disclosures.

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

1 unchanged sentence

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Service revenue:

4 unchanged sentences

Wholesale capacity services 43,861 27,517 109,149 83,406

Engineering and other services 875 416 1,276 716

Government and other services 1,998 451 4,315 1,167

Total service revenue 68,908 53,643 180,008 155,245

1 unchanged sentence

Total revenue $ 72,307 $ 57,683 $ 189,172 $ 171,399

The Company is the operator for certain satellite-enabled services offered by Apple ("Partner") (the "Services") pursuant to the agreement (the “Service Agreement”) and certain related ancillary agreements (such agreements, together with the Service Agreement, the “Service Agreements”).

The Company is the operator for certain satellite-enabled services offered by Apple ("Customer") (the "Services") pursuant to the agreement (the “Service Agreement”) and certain related ancillary agreements (such agreements, together with the Service Agreement, the “Service Agreements”).

The Service Agreements generally require Globalstar to allocate network capacity to support the Services, which launched in November 2022.

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 fixed service fee, payments relating to certain service-related operating expenses and capital expenditures, additional fees related to expanded services, and potential bonus payments subject to satisfaction of certain licensing, service and other related criteria.

For a discussion of the Updated Services Agreements, see Note 8:

Subsequent Events.

"Government and other services" reflect revenue for engineering and other communication services, such as terrestrial spectrum and network services, government service contracts and teleport lease arrangements.

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

Accounts Receivable

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

The Company records trade accounts receivable from its customers when it has a contractual right to receive payment either on demand or on fixed or determinable dates in the future.

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).

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Accounts receivable, net of allowance for credit losses

Subscriber accounts receivable $ 14,093 $ 14,474

Subscriber and other accounts receivable

$ 15,309 $ 14,474

Wholesale capacity accounts receivable 27,712 34,269

4 unchanged sentences

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 .

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 $ 224.6 million as o f September 30, 2024 .

Contract Liabilities

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).

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Short-term contract liabilities

Subscriber contract liabilities $ 22,547 $ 22,816

Subscriber and other contract liabilities

$ 21,542 $ 22,816

Wholesale capacity contract liabilities, net of contract asset

2 unchanged sentences

Long-term contract liabilities

Subscriber contract liabilities $ 1,533 $ 1,632

Subscriber and other contract liabilities

$ 1,446 $ 1,632

Wholesale capacity contract liabilities, net of contract asset — 1,581

1 unchanged sentence

Total contract liabilities $ 47,994 $ 56,890

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.

For subscriber contract liabilities, the amount of revenue recognized during the nine months ended September 30, 2024 and 2023 from performance obligations included in the contract liability balance at the beginning of these periods was $ 16.4 million and $ 18.9 million, respectively.

For wholesale capacity contract liabilities, the amount of revenue recognized during the nine months ended September 30, 2024 and 2023 from performance obligations included in the contract liability balance at the beginning of these periods was $ 29.9 million and $ 41.6 million, respectively.

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

The Service Agreements have no expiration date;

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

therefore, the related contract liabilities may be recognized into revenue over various periods driven by when the customer is expected to benefit from the related performance obligation.

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Wholesale capacity contract liabilities, net:

1 unchanged sentence

$ 13,354 $ 16,104

Advanced payments for services expected to be performed with the ground spare satellite launched in June 2022 during Phases 1 and 2 22,793 23,673

Advanced payments for services expected to be performed with the ground spare satellite launched in June 2022 22,354 23,673

Advanced payments contractually owed for services expected to be performed with the next-generation satellite constellation prior to the Phase 2 Service Period 10,867 14,204

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

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

28,277 19,907

3 unchanged sentences

Wholesale capacity contract liabilities, net $ 25,006 $ 32,442

(1) Primarily includes warrants with an initial fair value at the time of issuance of $ 48.3 million which was recorded in equity with an offset to a contract asset on the Company's consolidated balance sheets.

The fair value of the Warrants is recorded as a reduction to revenue over the period in which the Company performs its performance obligations through the estimated completion of the contract term, consistent with the period in which the customer benefits from the services provided.

(1) Includes debt discounts associated with the amended 2021 and 2023 Funding Agreements;

The offset was recorded to deferred revenue and is being recognized into revenue over the Phase 1 and 2 Service Periods.

the offset was recorded to deferred revenue.

(2) Primarily includes warrants with an initial fair value at the time of issuance of $ 48.3 million which was recorded in equity with an offset to a contract asset on the Company's consolidated balance sheets.

The fair value of the warrants is recorded as a reduction to revenue over time as described above.

PROPERTY AND EQUIPMENT

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

September 30,

2024 December 31,

14 unchanged sentences

Total property and equipment, net $ 617,064 $ 624,002

In 2022, the Company entered into an agreement with MDA for the purchase of new satellites that will replenish the Company's HIBLEO-4 U.S.-licensed system .

In 2023, the Company entered into an agreement with SpaceX providing for the launch of the first set of satellites under the agreement with MDA.

In 2022, the Company entered into an agreement with Macdonald, Dettwiler and Associates Corporation ("MDA") for the purchase of new satellites that will replenish the Company's HIBLEO-4 U.S.-licensed system .

In 2023, the Company entered into an agreement with Space Exploration Technologies Corporation (“SpaceX") providing for the launch of the first set of satellites under the agreement with MDA.

Refer to Note 5:

Commitments and Contingencies for further discussion of these 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.

As of September 30, 2024, the Company has incurred $ 211.6 million and $ 22.6 million for miles tones 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.

1 unchanged sentence

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

June 30, 2024 December 31, 2023

September 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 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.

As of September 30, 2024, the current portion of long-term debt relates to the 2021 Funding Agreement and represents the amounts to be paid under the Service Agreements (as defined above) during the next twelve months.

As discussed in more detail in Note 8:

Subsequent Events, on October 29, 2024, the Company and Customer entered into the Updated Services Agreements which amend certain terms of the 2023 Funding Agreement and provide funding to refinance the outstanding principal balance as well as pay the make-whole amount for the 2023 13 % Notes.

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.

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.

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 in the third quarter of 2026 (as amended in the Updated Services Agreements).

For as long as any amount funded under the 2023 Funding Agreement is outstanding, the Company will be subject to certain covenants.

5 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.

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.

There has be en one draw this year in Februa ry 2024 for total proceeds of $ 37.7 million with a fair value of $ 37.2 million.

The Company attributed the $ 0.5 million difference to the economic benefit received due to the existing customer relationship.

2021 Funding Agreement

1 unchanged sentence

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 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.

This funding is being recouped as services are performed by the Company over the estimated time period starting with the existing services through the launch of the new satellites ("Phase 1 Service Period").

The last recoupment is expected to be made in the first quarter of 2026.

During the nine months ended September 30, 2024, a total of $ 26.0 million has been recouped pursuant to the terms of the 2021 Funding Agreement.

2023 13 % Notes

2 unchanged sentences

Pursuant to the Service Agreements, the Company has agreed to pay cash interest on the 2023 13 % Notes at a rate of 6.5 % per annum and PIK interest at a rate of 6.5 % per annum.

In March 2024, the Company made an interest payment totaling $ 13.4 million, of which $ 6.7 million was paid in cash and $ 6.7 million was paid-in-kind, increasing the principal balance outstanding under the 2023 13 % Notes.

In March and September 2024, the Company made interest payments totaling $ 13.4 million and $ 13.8 million, respectively, of which $ 6.7 million and $ 6.9 million, respectively, was paid in cash and $ 6.7 million and $ 6.9 million, respectively, was paid-in-kind, increasing the principal balance outstanding under the 2023 13 % Notes.

Series A Preferred Stock

In 2022, the Company issued 149,425 shares of its 7.0 % Perpetual Preferred Stock, Series A, liquidation preference $ 1,000 per share (the “Series A Preferred Stock”) with a fair value of $ 105.3 million.

The shares of Series A Preferred Stock do not possess voting rights, other than certain matters specifically affecting the rights and obligations of the Series A Preferred.

The shares of Series A Preferred Stock do not possess voting rights, other than with respect to certain matters specifically affecting the rights and obligations of the Series A Preferred Stock.

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.

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

During the nine months ended September 30, 2024, the Company paid dividends approved by the Company's Board of Directors totaling $ 8.0 million.

Fair Value of Debt and Other Financing Arrangements

The Company believes it is not practicable to determine the fair value of its debt agreements on a recurring basis without incurring significant additional costs.

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

Unlike typical long-term debt, certain terms for these instruments cannot readily be compared to other debt instruments and their valuation generally involve a variety of factors, including due diligence by the debt holders.

COMMITMENTS AND CONTINGENCIES

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 services.

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

The Service Agreements have an indefinite term but provide that either party may terminate subject to certain notice requirements and, in some cases, other conditions.

The Service Agreements also provide for various commitments with which the Company must comply.

For a discussion of the Updated Services Agreements, see Note 8:

Subsequent Events.

Satellite Procurement Agreement and Launch Services Agreement

The Company has a satellite procurement agreement with MDA pursuant to which the Company will acquire at least 17 satellites (and up to 26 satellites) with an amended contract price of $ 329.5 million, with initial delivery expected to occur in 2025.

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

2 unchanged sentences

The Service Agreements provide for the Company to receive service payments equal to 95 % of the approved capital expenditures under each contract.

Canadian Tax Audits

The Canada Revenue Agency ("CRA") is conducting audits of the Company's Canadian subsidiary for several tax years.

The CRA has completed its audit for tax years 2016 - 2018 and assessed the Company additional tax liabilities and audit adjustments, which the Company is appealing.

The tax years 2019 - 2022 remain under examination.

The Company's net operating loss ("NOL") carryforwards for income tax reporting purposes in Canada would largely offset the expected final income tax settlement after appeal.

Additionally, withholding tax, penalties and interest have been and are expected to be assessed for audit periods under examination.

The Company expects that any assessed withholding tax and penalties will be refunded at the end of the audit process;

however, interest assessed on the withholding tax is not recoverable.

As a result of these audits, during the third quarter of 2024, the Company recorded $ 1.0 million of expense for uncertain tax positions associated with interest on withholding tax.

As of September 30, 2024, the Company recorded $ 5.1 million in long-term tax receivables, $ 4.4 million in current uncertain tax position liabilities and $ 1.7 million in long-term uncertain tax position liabilities on its consolidated balance sheets associated with potential taxes, penalties and interest.

RELATED PARTY TRANSACTIONS

3 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 $ 0.5 million as of June 30, 2024 and December 31, 2023.

Payables to Thermo related to normal purchase transactions were $ 0.3 million and $ 0.5 million as of September 30, 2024 and December 31, 2023, respectively.

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

2 unchanged sentences

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

Lease Agreement

Lease Agreement and Land Purchase

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

1 unchanged sentence

2024 lease payments will be $ 1.6 million.

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

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.

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

During each of the nine months ended September 30, 2024 and 2023, the Company incurred lease expense of $ 1.2 million under this lease agreement.

During the third quarter of 2024, the Company purchased land with a value of $ 0.5 million from Thermo Development, Inc.

This land was purchased at cost and was recorded to "Property and equipment, net" on the Company's consolidated balance sheet as of September 30, 2024.

The Company plans to use the land for a gateway location.

Perpetual Preferred Stock

Thermo's ownership portion in the Company's Series A Preferred Stock is $ 136.7 million.

Thermo's ownership portion in the Company's Series A Preferred Stock is $ 136.7 million (based upon the shares' liquidation preference).

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

During the nine months ended September 30, 2024, the Company made dividend payments to Thermo, which were approved by the Company's Board of Directors, totaling $ 7.3 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.

In connection with the Service Agreements, Customer 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 Customer 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.

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.

As consideration for Thermo's guarantee, the Company issued to Thermo warrants to purchase 10.0 million shares of the Company’s common stock at an exercise price equal to $ 2.00 per share (as calculated pursuant to the agreement).

As consideration for Thermo's guarantee, the Company issued to Thermo warrants to purchase 10.0 million shares of the Company’s common stock at an exercise price equal to $ 2.00 per share (as

calculated pursuant to the agreement).

5.0 million of these warrants vested immediately upon effectiveness of Thermo's guarantee, which occurred in December 2023, and the remaining 5.0 million warrants vest if and when Thermo advances aggregate funds of $ 25.0 million or more to the Company or a permitted third party pursuant to the terms of Thermo's guarantee.

These warrants expire five years after the date of issuance.

These warrants expire in December 2028.

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.

3 unchanged sentences

Jacobs is the Chief Executive Officer of Globalstar and also serves as the Executive Chairman of Virewirx (formerly XCOM Labs) and is the controlling stockholder of Virewirx.

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.

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

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.

5 unchanged sentences

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 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

NET INCOME (LOSS) PER SHARE

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

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Net income (loss)

$ 9,934 $ ( 6,169 ) $ ( 12,945 ) $ ( 9,640 )

Effect of Series A Preferred Stock dividends ( 2,673 ) ( 2,673 ) ( 7,961 ) ( 7,932 )

Adjusted net loss attributable to common shareholders $ ( 12,327 ) $ ( 2,635 ) $ ( 28,167 ) $ ( 8,730 )

Weighted average shares outstanding - basic and diluted 1,884,208 1,813,393 1,883,406 1,812,617

Net loss per common share - basic and diluted

Adjusted net income (loss) attributable to common shareholders $ 7,261 $ ( 8,842 ) $ ( 20,906 ) $ ( 17,572 )

Weighted average shares outstanding - basic

1,892,253 1,836,251 1,886,377 1,820,582

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.

Dilutive effect of stock-based compensation plans 1,814 — — —

Dilutive effect of warrants issued under the Service Agreements 15,994 — — —

Weighted average shares outstanding - diluted 1,910,061 1,836,251 1,886,377 1,820,582

Net income (loss) per common share - basic

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

Net income (loss) per common share - diluted $ 0.00 $ 0.00 $ ( 0.01 ) $ ( 0.01 )

For the three months ended September 30, 2023, 17.8 million shares of potential common stock were excluded from diluted shares outstanding because the effects of such securities would be anti-dilutive.

For the nine months ended September 30, 2024 and 2023, 18.7 million and 17.5 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.

4 unchanged sentences

As discussed in Note 4:

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.

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 nine months ended September 30, 2024 and 2023, respectively, on its Series A Preferred Stock.

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

SUBSEQUENT EVENTS

As more fully described in the Company's Current Report on Form 8-K filed with the Commission on October 29, 2024, the Company and Customer agreed to make certain amendments to the Service Agreements and entered into other related agreements (collectively, the “Updated Services Agreements”) for Globalstar to deliver expanded services to Customer over a new MSS network, including a new satellite constellation, expanded ground infrastructure, and increased global MSS licensing (the “Extended MSS Network”).

The Extended MSS Network will be owned by Globalstar Licensee, LLC, together with its subsidiaries (collectively, the “Globalstar SPE”), and operated by the Company.

The Updated Services Agreements were effective upon the closing on November 5, 2024 (the "Closing Date").

Customer will prepay for certain services to be delivered by the Company to Customer’s end users utilizing the Extended MSS Network under the Updated Services Agreement and will be a passive equity holder in Globalstar SPE.

Customer has purchased 400,000 Class B Units in the Globalstar SPE (the “Customer Class B Units”), representing a 20 % equity interest, for $ 400 million, which was paid on the Closing Date using cash and in-kind asset contributions.

The Updated Services Agreements provide that Customer will make cash prepayments to the Company, including for approved capital expenditures in connection with the Extended MSS Network.

These prepayments consist of:

infrastructure prepayment (the “Infrastructure Prepayment”) of up to $ 1.1 billion, which is to be funded over the construction period on a quarterly basis, the proceeds of which the Globalstar SPE will use, together with the proceeds from the sale of the Customer Class B Units to pay amounts due for the Extended MSS Network (including, but not limited to, construction and launch costs) and (2) an amount necessary for the Company to retire its outstanding 2023 13 % Notes (the "Current Debt Repayment").

The 2023 13 % Notes were repurchased in full on the Closing Date.

The Infrastructure Prepayment and the funds used for the Current Debt Repayment are contained within one prepayment agreement (the “2024 Prepay Agreement”).

In connection with the Updated Services Agreement, the Company entered into a launch services agreement with SpaceX for the new satellites that will be procured for the Extended MSS Network.

As consideration for the Satellite Services as set forth in the Updated Services Agreements, the incremental service fees due from Customer to the Company include fees tied to the cost of the Extended MSS Network, fees for providing additional related services, fees tied to expenses incurred for the provision of such services, and performance bonuses.

A portion of these payments is subject to the satisfaction of certain licensing, service levels and milestone achievements.

Additionally, the Updated Services Agreements also provide for certain service fees of $ 30 million annually to be accelerated.

The full paydown of the 2024 Prepay Agreement and the redemption of the Customer Class B Units are expected to be completed within the design useful life of the new satellites.

The Company expects that such amounts payable to Customer will be set off with amounts payable by Customer.

The Current Debt Repayment and a portion of the Infrastructure Prepayment may accrue annual fees, as provided in the 2024 Prepay Agreement.

Such fees payable to Customer will be reduced or eliminated entirely if the Company meets certain defined milestones.

In addition, the parties agreed to certain amendments to the 2023 Funding Agreement and certain related agreements, including:

(1) elimination of cash sweeps;

(2) relaxation of certain covenant levels;

(3) a one-year deferral of the start of the repayment period from the third quarter of 2025 to the third quarter of 2026;

and (4) an amendment to the existing security agreement to provide first lien security with respect to the Company’s obligations under the 2024 Prepay Agreement.

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