What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-02-29 · 555 added, 608 removed, 852 unchanged (58% of the section changed)

5 unchanged sentences

Consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022

Consolidated statements of comprehensive (loss) income for the years ended December 31, 2023, 2022 and 2021

Consolidated statements of comprehensive income (loss) for the years ended December 31, 2024, 2023 and 2022

Consolidated statements of stockholders’ equity for the years ended December 31, 2024, 2023 and 2022

2 unchanged sentences

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Globalstar, Inc.

To the Stockholders and the Board of Directors of Globalstar, Inc.

Opinion on the Financial Statements

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(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Useful life of Space component assets

Description of the Matter At December 31, 2024, the Company had $1.2 billion of Space component assets recorded as property and equipment.

As discussed in Note 1 to the consolidated financial statements, the Company’s Space component assets are depreciated on a straight-line basis over their estimated useful life, which is currently estimated to be 15 years.

Management’s estimate of the useful life of its Space component assets was based on estimated design life, information from the Company’s engineering department and overall Company strategy for the use of the assets.

Auditing the Company’s estimate of the useful life of its Space component assets involved a high degree of subjectivity due to the application of management’s judgment when evaluating the available information to determine the estimated useful life.

The resulting estimated useful life has a significant effect on the timing of recognition of depreciation expense given the magnitude of the carrying amount of the Space component assets.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's process to determine the estimated useful life of its Space component assets, including controls over management’s evaluation of the available information to determine the estimated useful life.

Our testing of the Company's estimated useful life of the Space component assets included, among other procedures, evaluating the application of available information to determine the estimated useful life.

We compared management’s useful life to the manufacturer’s estimated design life, publicly available information on the estimated useful life of similar assets, operation and performance of the assets per the Company’s engineering group, and the life of its first-generation satellite constellation.

Additionally, we evaluated the effect of changes, if any, in the Company’s long-term strategy for use of the assets on the useful life estimate.

Classification and valuation of the 2021 and 2023 Funding Agreements

Description of the Matter As described in Note 7, in February 2023, the Company entered into the 2023 Funding Agreement and amended the terms of the 2021 Funding Agreement (collectively “the Funding Agreements”).

We identified the assessment of the Funding Agreements as a critical audit matter, primarily due to significant judgments by management related to the determination that advances under the Funding Agreements were debt, as determined for financial reporting purposes, and the estimation of the fair value to be assigned to the debt and other components.

The fair value of the debt, which was determined using a discounted cash flow method, is dependent on significant assumptions such as the discount rate.

Management’s estimate of the useful life of its Space component assets was based on estimated design life, information from the Company’s strategy for the use of the assets and its engineering department.

Management’s assessment has a significant effect on the timing of recognition of depreciation expense given the magnitude of the carrying amount of the Space component assets.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's process to assess the useful life of its Space component assets, including controls over management’s evaluation of the available information used in the assessment.

Our testing of the Company's useful life of the Space component assets included, among other procedures, evaluating the application of available information.

We compared management’s useful life to the manufacturer’s estimated design life, publicly available information on the estimated useful life of similar assets, operation and performance of the assets as evaluated by the Company’s engineering department, and the life of its first-generation satellite constellation.

Additionally, we evaluated the effect of changes, if any, in the Company’s long-term strategy for use of the assets on the useful life estimate as well as certain activities implemented by the Company that indirectly monitor satellite performance.

Assessment of the Updated Services Agreement

Description of the Matter As described in Note 2, in November 2024, the Company entered into the Updated Services Agreements with its Customer.

We identified the assessment of the Updated Services Agreements as a critical audit matter, primarily due to significant judgments by management related to the determination of the accounting for (i) the Globalstar SPE including the interest in the Globalstar SPE purchased by the Customer, (ii) the advances under the Updated Services Agreements, and (iii) a contingent fee feature in the Updated Services Agreement as an embedded derivative.

In addition, the fair value of the embedded derivative, which was determined using a discounted cash flow method, was dependent on significant assumptions such as the discount rate.

Auditing of these classification and valuation considerations involved challenging and complex auditor judgment, including the need to involve valuation specialists.

How We Addressed the Matter in Our Audit We tested the effectiveness of controls over the Company’s assessment of the Funding Agreements, including controls related to classification and valuation.

We evaluated the Company’s accounting analysis for the Funding Agreements, including the determination that advances were debt.

We evaluated the Company’s estimate of the fair value of the debt and other components by involving valuation specialists to assess the reasonableness of the (1) valuation methodology and (2) valuation assumptions applied including the discount rate by developing a range of independent estimates and comparing our estimates to those used by management.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s assessment of the Updated Services Agreements, including controls related to classification and valuation.

We evaluated the Company’s accounting analysis for the Updated Services Agreements, including the determination that the Globalstar SPE should be consolidated, the interest purchased by the Customer should be accounted for as a liability, classification of certain advances as deferred revenue or debt and the identification of an embedded derivative.

We evaluated the Company’s estimate of the fair value of the embedded derivative by involving valuation specialists to assess the reasonableness of the (i) valuation methodology and (ii) valuation assumptions applied including the discount rate by developing a range of independent estimates and comparing our estimates to those used by management.

We tested the source information underlying the significant assumptions and estimates and the mathematical accuracy of the calculation.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Globalstar, Inc.

To the Stockholders and the Board of Directors of Globalstar, Inc.

Opinion on Internal Control Over Financial Reporting

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 29, 2024, expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), and stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 28, 2025, expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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Operating lease right of use assets, net 31,835 34,164

Prepaid satellite costs and customer receivable 12,443 27,570

Prepaid network costs 312,342 12,443

Derivative asset 108,799 1,295

Intangible and other assets, net of accumulated amortization of $ 7,625 and $ 12,385 , respectively

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Current portion of long-term debt $ 34,600 $ 34,600

Accounts payable 2,027 3,843

Vendor financing — 59,575

Accrued expenses 26,958 22,554

Accrued satellite construction costs 58,187 36,139

Accounts payable and accrued expenses 29,677 28,985

Accrued network construction costs 15,613 58,187

Payables to affiliates 394 459

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Total non-current liabilities 1,209,869 369,422

Total liabilities

1,351,354 545,330

Commitments and contingencies (Note 10)

Stockholders’ equity:

Preferred Stock of $ 0.0001 par value;

99,700,000 shares authorized and none issued and outstanding at December 31, 2023 and 2022, respectively

Series A Perpetual Preferred Stock of $ 0.0001 par value;

300,000 shares authorized and 149,425 issued and outstanding at December 31, 2023 and December 31, 2022, respectively

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

Voting Common Stock of $ 0.0001 par value;

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Additional paid-in capital (1)

2,473,564 2,438,878

Accumulated other comprehensive income 13,452 5,070

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Total liabilities and stockholders’ equity $ 1,710,237 $ 924,309

(1) The number of shares have been restated to reflect the 1:15 reverse stock split effectuated on February 10, 2025.

All historical share and per share amounts reflected in this Report have been adjusted to reflect the reverse stock split.

Refer to Note 17:

Common Stock.

See accompanying notes to Consolidated Financial Statements.

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Interest income and expense, net of amounts capitalized ( 13,562 ) ( 14,609 ) ( 30,168 )

Foreign currency gain (loss) 4,862 ( 6,592 ) ( 6,308 )

Derivative gain (loss) and other 1,730 ( 1,843 ) ( 675 )

Foreign currency (loss) gain ( 16,609 ) 4,862 ( 6,592 )

Other ( 2,531 ) 1,730 ( 1,843 )

Total other expense ( 60,080 ) ( 23,430 ) ( 35,813 )

Loss before income taxes ( 61,029 ) ( 23,595 ) ( 256,842 )

Income tax expense (benefit) 1,123 73 ( 299 )

Income tax expense 2,135 1,123 73

Net loss $ ( 63,164 ) $ ( 24,718 ) $ ( 256,915 )

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Net loss per common share:

Basic $ ( 0.02 ) $ ( 0.14 ) $ ( 0.06 )

Diluted ( 0.02 ) ( 0.14 ) ( 0.06 )

$ ( 0.59 ) $ ( 0.29 ) $ ( 2.15 )

( 0.59 ) ( 0.29 ) ( 2.15 )

Weighted-average shares outstanding:

Basic 1,835,005 1,800,825 1,765,139

Diluted 1,835,005 1,800,825 1,765,139

125,877 122,334 120,055

(1) The number of shares have been restated to reflect the 1:15 reverse stock split effectuated on February 10, 2025.

All historical share and per share amounts reflected in this Report have been adjusted to reflect the reverse stock split.

Refer to Note 17:

Common Stock.

See accompanying notes to Consolidated Financial Statements.

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Net loss $ ( 63,164 ) $ ( 24,718 ) $ ( 256,915 )

Other comprehensive (loss) income:

Other comprehensive income (loss):

Defined benefit pension plan liability adjustment — — 2,073

Net foreign currency translation adjustment 8,382 ( 4,172 ) 5,279

Total other comprehensive (loss) income ( 4,172 ) 7,352 4,834

Total other comprehensive income (loss) 8,382 ( 4,172 ) 7,352

Total comprehensive loss $ ( 54,782 ) $ ( 28,890 ) $ ( 249,563 )

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(In thousands)

Preferred Stock Common Stock Additional

Capital Accumulated Other Comprehensive Income (Loss) Retained

Preferred Stock Common Stock (1)

Accumulated Other Comprehensive Income (Loss) Retained

Deficit Total

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Contribution of services — — — — 188 — — 188

Issuance and recognition of stock-based compensation of employee stock purchase plan — — 1,887 — 747 — — 747

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

Other comprehensive income — — — — — 4,834 — 4,834

Net loss — — — — — — ( 112,625 ) ( 112,625 )

Balances – December 31, 2021 — $ — 1,796,529 $ 180 $ 2,146,710 $ 1,890 $ ( 1,783,349 ) $ 365,431

Net issuance of restricted stock awards and employee stock options and recognition of stock-based compensation — — 11,577 1 10,588 — — 10,589

Contribution of services — — — — 188 — — 188

Issuance and recognition of stock-based compensation of employee stock purchase plan — — 716 — 1,135 — — 1,135

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

Issuance and recognition of employee stock-based compensation — — 48 — 1,135 — — 1,135

Common stock issued with conversion of 2013 8.00 % Notes

— — 150 — 2,548 — — 2,548

Fair value of Warrants issued in connection with the Service Agreements — — — — 48,337 — — 48,337

Fair value of Warrants issued in connection with the Updated Services Agreements — — — — 48,337 — — 48,337

Issuance of Series A Preferred Stock 149 — — — 105,342 — — 105,342

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Contribution of services — — — — 188 — — 188

Issuance and recognition of stock-based compensation of employee stock purchase plan — — 887 — 1,270 — — 1,270

Issuance and recognition of employee stock-based compensation — — 59 — 1,270 — — 1,270

Series A Preferred Dividends — — — — ( 11,942 ) — — ( 11,942 )

Fair value of Thermo guarantees associated with 2023 Funding Agreement — — — — 8,864 — — 8,864

Issuance of warrants to Thermo for its guarantee associated with the 2023 Funding Agreement — — — — 5,010 — — 5,010

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

Issuance of the warrant to Thermo for its guarantee associated with the 2023 Funding Agreement — — — — 5,010 — — 5,010

Issuance of stock in connection with XCOM License Agreement — — 3,998 1 70,420 — — 70,421

Other comprehensive loss — — — — — ( 4,172 ) — ( 4,172 )

1 unchanged sentence

Balances – December 31, 2023 149 $ — 125,413 $ 13 $ 2,438,878 $ 5,070 $ ( 2,064,982 ) $ 378,979

Net issuance of restricted stock awards and employee stock options and recognition of stock-based compensation — — 436 — 36,643 — — 36,643

Contribution of services — — — — 157 — — 157

Issuance and recognition of employee stock-based compensation — — 66 1,368 — — 1,368

Series A Preferred Dividends — — — — ( 10,634 ) — — ( 10,634 )

Issuance of stock in connection with XCOM License Agreement — — 510 — 7,501 — — 7,501

— — ( 349 ) ( 349 )

Other comprehensive income — — — — — 8,382 — 8,382

Net loss — — — — — — ( 63,164 ) ( 63,164 )

Balances – December 31, 2024 149 $ — 126,425 $ 13 $ 2,473,564 $ 13,452 $ ( 2,128,146 ) $ 358,883

(1) The number of shares have been restated to reflect the 1:15 reverse stock split effectuated on February 10, 2025.

All historical share and per share amounts reflected in this Report have been adjusted to reflect the reverse stock split.

Refer to Note 17:

Common Stock.

See accompanying notes to Consolidated Financial Statements.

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Stock-based compensation expense 35,548 22,489 10,754

Noncash consideration, net, associated with wholesale capacity contract ( 3,210 ) ( 292 ) —

Reduction in the value of long-lived assets and inventory 883 363 175,079

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Noncash expenses associated with SSA, net of amortization 7,671 3,070 —

Unrealized foreign currency (gain) loss ( 4,972 ) 6,615 6,394

Unrealized foreign currency loss (gain) 16,663 ( 4,972 ) 6,615

Other, net ( 657 ) ( 4,026 ) 470

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Cash flows used in investing activities:

Payments under the satellite procurement agreement ( 135,939 ) ( 14,000 ) —

Payments for other network upgrades to support the Service Agreements ( 22,859 ) ( 18,233 ) ( 37,037 )

Payments for network upgrades to support the Phase 2 Service Period ( 105,315 ) ( 158,798 ) ( 32,233 )

Payments for network upgrades to support the Extended MSS Network

( 131,683 ) — —

Payments of capitalized interest ( 9,981 ) ( 8,810 ) —

Payments for network upgrades to support product development ( 6,823 ) ( 6,907 ) ( 7,076 )

Sale of property and equipment — — 350

Purchase of intangible assets ( 6,768 ) ( 1,097 ) ( 643 )

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Cash flows provided by (used in) financing activities:

Principal and interest payments of the 2019 Facility Agreement ( 148,281 ) ( 6,341 ) —

Proceeds from 2023 13 % Notes

Proceeds from issuance of Customer Class B units 176,189 — —

Proceeds from issuance of Current Debt Repayment 221,625 — —

Principal and make-whole payment of 2023 13 % Notes

( 234,927 ) — —

Proceeds from 2023 Funding Agreement 37,747 117,253 —

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Dividends paid on Series A Preferred Stock ( 10,634 ) ( 11,942 ) —

Principal and interest payments of the 2019 Facility Agreement — ( 148,281 ) ( 6,341 )

Proceeds from 2023 13 % Notes

Payments for debt and equity issuance costs — ( 8,556 ) ( 626 )

Net proceeds from equity plan transactions ( 181 ) 919 747

Principal payments of the 2009 Facility Agreement — — ( 186,990 )

Net proceeds from common stock offering and exercise of warrants — — 43,678

Premium refund from the 2009 Facility Agreement — — 2,569

Net cash provided (used in) by financing activities 125,793 ( 6,048 ) ( 140,282 )

Proceeds from issuance of common stock and exercise of options 1,781 ( 181 ) 919

Net cash provided by (used in) financing activities 157,181 125,793 ( 6,048 )

Effect of exchange rate changes on cash and cash equivalents ( 1,383 ) 140 ( 22 )

Net increase (decrease) in cash and cash equivalents 24,662 17,778 ( 53,719 )

Net increase in cash and cash equivalents 334,420 24,662 17,778

Cash and cash equivalents, beginning of period 56,744 32,082 14,304

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Capitalized accretion of debt discount and amortization of prepaid financing costs 6,415 5,429 1,830

Satellite construction assets acquired through vendor financing arrangement — 59,822 —

Satellite construction assets in accrued expenses

58,187 36,139 —

Principal amount of 2019 Facility Agreement converted into preferred equity — 149,425 —

Forgiveness of principal and interest of PPP Loan — — 5,030

Re-characterization of 2021 Funding Agreement to debt due to 2023 amendment 87,950 — —

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

Accrued satellite construction assets 15,613 58,187 36,139

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

Construction in progress assets acquired through XCOM SSA 6,065 2,776 —

Fair value of warrants issued to Thermo for the guarantee associated with the 2023 Funding Agreement 5,010 — —

Extended MSS Network assets acquired through Globalstar SPE 223,811 — —

Re-characterization of 2021 Funding Agreement to debt due to 2023 amendment — 87,950 —

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

Fair value of the warrant issued to Thermo for the guarantee associated with the 2023 Funding Agreement — 5,010 —

Satellite construction assets acquired through vendor financing arrangement — — 59,822

Principal amount of 2019 Facility Agreement converted into preferred equity — — 149,425

(1) Cash and cash equivalents on the consolidated balance sheet is equal to cash and cash equivalents on the statement of cash flows

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Globalstar, Inc.

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

Through its global satellite network, Globalstar, Inc.

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

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

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The Company's Executive Chairman of the Board controls Thermo.

Globalstar currently provides the following communications services:

• two-way voice communication and data transmissions via the GSP-1600 and GSP-1700 phone ("Duplex");

• one-way or two-way communications and data transmissions using mobile devices, including the SPOT family of products, such as SPOT X ® , SPOT Gen4 TM and SPOT Trace ® , that transmit messages and the location of the device ("SPOT");

• one-way data transmissions using a mobile or fixed device that transmits its location and other information to a central monitoring station, including commercial IoT products, such as the battery- and solar-powered SmartOne, STX-3, ST100, ST-150 and Integrity 150 ("Commercial IoT");

• satellite network access and related services utilizing our satellite spectrum and network of satellites and gateways ("Wholesale Capacity Services");

• engineering and other communication services using the Globalstar System ("Engineering and Other").

Globalstar currently provides wholesale capacity services, communications products and services, terrestrial spectrum and network solutions and government services.

Wholesale capacity services include satellite network access and related services using the Company's network of in-orbit satellites and ground stations ("gateways") pursuant to the Company's spectrum licenses, which the Company refers to collectively as the Globalstar System.

The Company provides communications products and services to its subscribers, including voice communication and data transmissions (Commercial IoT, SPOT and Duplex).

The Company also utilizes the Globalstar System for terrestrial spectrum and network solutions.

Government services include strategic partnerships as well as hardware and software designs to develop specific applications operating over the Globalstar System.

Use of Estimates in Preparation of Financial Statements

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

In connection with the Updated Services Agreements, the Company performed an analysis to determine if its special purpose entity ("SPE") is a variable interest entity ("VIE").

The Company concluded that its SPE is a variable interest entity and Globalstar is the primary beneficiary of the entity.

Amounts for the Globalstar SPE are consolidated.

Amounts pertaining to the non-controlling interest of the Globalstar SPE are reported as a non-current liability in the Company's consolidated balance sheet.

Refer to Note 2:

Special Purpose Entity for further discussion.

Reverse Stock Split

On November 7, 2024.

the Company's Strategic Review Committee of the Board of Directors approved a reverse stock split of the Company's issued and outstanding common stock.

The reverse stock split was effectuated on February 10, 2025 at a 1-for-15 ratio.

All issued and outstanding common stock, options and warrants to purchase common stock and per share amounts contained in this Report have been adjusted retroactively to reflect the change in capital structure for all periods presented.

Refer to Note 17:

Common Stock for further discussion.

Business Combinations

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Adjustments outside of that range are recognized currently in earnings.

Refer to Note 2:

License Agreement of the consolidated financial statements for further details.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less.

Cash deposited in institutional money market funds, regular interest-bearing depository accounts and non-interest-bearing depository accounts are classified as cash and cash equivalents on the accompanying consolidated balance sheets.

Concentration of Credit Risk

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The Company performs credit evaluations of its customers’ financial condition and records reserves to provide for estimated credit losses .

For the year ended December 31, 2023, the Company's wholesale capacity customer under the Service Agreements was responsible for 49 % of the Company's revenue and 69 % of the Company's receivable balance.

Additionally, one of the Company's value added resellers was responsible for 15 % of the Company's receivable balance;

For the year ended December 31, 2024, the Company's wholesale capacity customer under the Updated Services Agreements was responsible for 58 % of the Company's revenue and 40 % of the Company's total receivable balance.

Additionally, one of the Company's value added resellers was responsible for 21 % of the Company's total receivable balance;

however, this customer was responsible for less than 10% of the Company's revenue.

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Accounts Receivable

The Company records trade accounts receivable from its customers, including MSS subscribers and its wholesale capacity customer, 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.

Receivables are recorded when the right to consideration from the customer becomes unconditional, which is generally upon billing or upon satisfaction of a performance obligation, whichever is earlier.

Accounts receivable are uncollateralized, without interest, and consist of receivables from wholesale capacity services and the sale of Globalstar services and equipment.

The Company also may act as an agent to procure goods and perform services under the Service Agreements.

Accounts receivable are uncollateralized, without interest, and consist of receivables from the sale of services and equipment.

The Company also may act as an agent to procure goods and perform services under the Updated Services Agreements.

Payment is generally due within 45 days of the invoice date for this customer.

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One type of the Company’s contract assets is customer receivables and, as such, historical delinquency percentages are generally consistent over time.

The estimate of the allowance for subscriber credit losses is computed using aging schedules by type of revenue (service and subscriber equipment), by product (Duplex, SPOT and Commercial IoT) and by country.

The estimate of the allowance for subscriber credit losses is computed using aging schedules by type of revenue (service and subscriber equipment), by product (Commercial IoT, SPOT, Duplex and XCOM RAN) and by country.

As discussed above, accounts receivable are considered past due in accordance with the contractual terms of the applicable arrangements.

The Company applies a loss rate to its portfolio of subscriber trade receivables based on past-due status and records an allowance for credit losses, which represents the expected losses of those trade receivables over their estimated contractual life.

The estimated life may vary by service and product type, but is generally less than one year.

The estimated life varies by service and product type.

Allowances are generally recorded for all aging categories of outstanding receivables, including those in the current category.

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Cost is computed using the first-in, first-out (FIFO) method.

Inventory write downs are evaluated at the product level and measured as the difference between the cost of inventory and the net realizable.

Inventory write downs are evaluated at the product level and measured as the difference between the cost of inventory and the net realizable value.

Write downs are recorded as a "cost of subscriber equipment sales - reduction in the value of inventory" in the Company’s Consolidated Financial Statements.

Product sales and returns from the previous 12 months and future demand forecasts are reviewed and excess and obsolete inventory is written off, as applicable.

For each of the years ended December 31, 2022 and 2021, the Company wrote down the value of inventory by $ 8.6 million and $ 1.0 million , respectively, after adjusting for changes in net realizable value.

The Company did no t write down the value of inventory for the year ended December 31, 2023.

In 2022, the Company wrote down the value of equipment consisting of second-generation Duplex assets, including finished goods, chips and component parts to be used in manufacturing such devices as well as second-generation Duplex gateway spare parts, totaling $ 6.9 million.

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

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

In 2021, the Company wrote off certain Sat-Fi2 ® materials that were not likely to be used in production as well as defective inventory units that were no longer saleable.

The Company wrote down the value of inventory by $ 0.3 million for the year ended December 31, 2024 primarily resulting from obsolete inventory for component parts that can no longer be used in production of current devices.

The Company did no t record any significant write downs of inventory for the year ended December 31, 2023.

For the year ended December 31, 2022, the Company wrote down the value of inventory by $ 8.6 million after adjusting for changes in net realizable value resulting from the decision to no longer sell second-generation Duplex devices.

The following is a summary of the components of the Company's inventory balance (in thousands):

As of December 31,

Finished goods $ 7,254 $ 11,120

Raw materials

Inventory reserve ( 298 ) ( 86 )

Total $ 10,741 $ 14,582

Property and Equipment

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Capitalized costs associated with the Company’s Space Component, Ground Component, and other assets are tracked by fixed asset category and are allocated to each asset as it comes into service.

Generally, when a satellite is incorporated into the constellation, the Company begins depreciation on the date the satellite is placed into service, which was the point that the satellite reaches its orbital altitude, over its estimated depreciable life.

Generally, when a satellite is incorporated into the constellation, the Company begins depreciation on the date the satellite is placed into service, which typically is the point that the satellite reaches its orbital altitude, over its estimated depreciable life.

In June 2022, the Company launched an on-ground spare satellite.

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As the Company’s construction in progress increases, the Company capitalizes more interest, resulting in a lower amount of net interest expense recognized under U.S.

Depreciation is provided using the straight-line method over the estimated useful lives of the respective assets as follows:

Space Component - 15 years from the commencement of service

Ground Component - 7 or 15 years from commencement of service

In general, depreciation is provided using the straight-line method over the estimated useful lives of the respective assets as follows:

Space Component (Second-Generation Satellites) - 15 years from the commencement of service

Ground Component - 7 to 15 years from commencement of service

Software, Facilities & Equipment - 3 to 10 years

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In the event the Company decides not to support a product or service, or determines that an asset is not expected to generate future benefit, the asset may be abandoned and an impairment loss may be recorded on the associated assets.

Assets held for sale are carried at the lower of cost or fair value less estimated cost to sell;

these assets are generally classified as current on the Company's consolidated balance sheets as the disposal of these assets is expected within one year.

The Company has operating and finance leases for facilities and equipment around the world, including corporate offices, satellite control centers, ground control centers, gateways and certain equipment.

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The Company reviews the carrying value of its right-of-use assets for impairment whenever events or changes in circumstances indicate that the recorded value may not be recoverable.

Recoverability of assets is measured by comparing the carrying amounts of the assets to the estimated future undiscounted cash flows, excluding financing costs.

Recoverability of assets is measured by comparing the

carrying amounts of the assets to the estimated future undiscounted cash flows, excluding financing costs.

If a right-of-use asset is not recoverable, its carrying value would be adjusted down to fair value and an impairment loss would be recorded.

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The Company has financing arrangements that are hybrid instruments that contain embedded derivative features.

Derivative instruments are recognized as either assets or liabilities in the consolidated balance sheets and are measured at fair value with gains or losses recognized in earnings.

Derivative instruments are recognized as either assets or liabilities in the consolidated balance sheet and are measured at fair value with gains or losses recognized in earnings.

The Company determines the fair value of derivative instruments based on available market data and assumptions developed by management using appropriate valuation models.

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Deferred financing costs are those costs directly incurred in issuing long-term debt or equity financing.

Costs associated with obtaining long-term debt are amortized as additional interest expense over the expected term of the corresponding instrument and are recorded on the Company's consolidated balance sheets as a reduction in the carrying amount of the related debt liability.

Costs associated with obtaining long-term debt are amortized as additional interest expense over the expected term of the corresponding instrument and are recorded on the Company's consolidated balance sheet as a reduction in the carrying amount of the related debt liability.

The Company classifies deferred financing costs consistent with the classification of the related debt outstanding at the end of the reporting period.

Fair Value of Financial Instruments

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 its debt agreements are not readily available and generally involve a variety of factors, including due diligence by the debt holders.

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

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

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

The 2024 Current Debt Repayment is recorded at fair value as the debt was issued at rates consistent with the market rates upon issuance.

Litigation, Commitments and Contingencies

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Reserves for potential claims or lawsuits may be relieved if the loss is no longer considered probable.

The ultimate resolution of any such exposure may vary from earlier estimates as further facts and circumstances become known.

Gain/Loss on Extinguishment of Debt

Gain or loss on extinguishment of debt generally is recorded upon an extinguishment of a debt instrument or early payment of debt.

Gain or loss on extinguishment of debt is calculated as the difference between the reacquisition price and net carrying amount of the debt, which includes unamortized debt issuance costs and any derivative instruments, and is recorded as an extinguishment gain or loss in the Company’s consolidated statement of operations.

Gain or loss on extinguishment of debt is calculated as the difference between the reacquisition price and net carrying amount of the debt, which includes unamortized debt financing costs, debt discount and any derivative instruments, and is recorded as an extinguishment gain or loss in the Company’s consolidated statement of operations.

Revenue Recognition and Deferred Revenue

Revenue consists primarily of satellite voice and data service revenue, revenue generated from the sale of fixed and mobile devices, revenue generated from providing satellite network access and related services utilizing the Company's satellite spectrum and network of satellite and gateways, and revenue from providing engineering and other communication services.

Revenue consists primarily of revenue generated from providing satellite network access and related services utilizing the Globalstar System, satellite voice and data service revenue, revenue generated from the sale of fixed and mobile devices, and revenue from providing engineering and other communication services.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.

Each type of revenue is a separate performance obligation with distinct deliverables and is therefore accounted for discretely.

Each type of revenue has a separate performance obligation with distinct deliverables and is therefore accounted for discretely.

Revenue is measured based on the consideration specified in a contract with a customer, adjusted for credits and discounts, as applicable, and is recognized when the Company satisfies a performance obligation by transferring control over a product or service to a customer.

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The recognition of revenue for service is over time as the customer simultaneously receives and consumes the benefits of the Company’s performance over the contract term.

The recognition of revenue for subscriber

equipment is at a point in time as the risks and rewards of ownership of the hardware transfer to the customer generally upon shipment, which is when legal title of the product transfers to the customer, among other things (as discussed further below).

The recognition of revenue for subscriber equipment is at a point in time as the risks and rewards of ownership of the hardware transfer to the customer generally upon shipment, which is when legal title of the product transfers to the customer, among other things (as discussed further below).

The Company does not record sales taxes, telecommunication taxes or other governmental fees collected from customers in revenue.

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Credits granted to customers are expensed or charged against revenue or accounts receivable over the remaining term of the contract.

Under the Service Agreements, the Company issued warrants to Partner (as defined in Note 3) (the "Warrants") to purchase shares of Globalstar common stock;

The Company issued warrants to the Customer (the "Warrants") to purchase shares of Globalstar common stock which are exercisable in accordance with the amended terms in the Updated Services Agreements;

the Warrants were recorded at the estimated fair value of the consideration granted based on a Black-Scholes pricing model.

The fair value of the Warrants was capitalized as a contract asset and is being recognized as a reduction of the transaction price over the estimated term of the Service Agreements.

The fair value of the Warrants is noncash consideration payable to a customer which represents a reduction of the transaction price and, therefore, of revenue.

As of December 31, 2024 and 2023, this contract asset was $ 43.7 million and $ 46.7 million, respectively, and is netted against the associated contract liability, which is recorded in short-term and long-term deferred revenue on the Company's consolidated balance sheet.

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For the year ended December 31, 2024 and 2023, the Company reduced revenue by $ 2.4 million and $ 2.6 million, respectively, associated with the amortization of the fair value of the noncash consideration.

The Company did not amortize any of the contract asset during 2021.

Estimates related to earned but unbilled service revenue are calculated primarily using current subscriber data, including plan subscriptions and usage between the end of the billing cycle and the end of the period, or in accordance with the terms of the customer contract for satellite network access services.

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Under ASC 606, an entity should adjust the promised amount of the consideration for the effects of time value of money if the timing of the payments agreed upon by the parties to the contract provides the customer or the entity with a significant benefit of financing for the transfer of goods or services to the customer.

For certain payments associated with services provided under the Service Agreements, the length of time between receipt of payment by the customer and transfer of services by the Company was greater than one year.

Accordingly, payments made by this customer included a significant financing component.

For certain payments associated with services provided under the Updated Services Agreements, the length of time between receipt of payment by the Customer and transfer of services by the Company was greater than one year.

Accordingly, payments made by the Customer included a significant financing component.

The Company accreted interest expense using the effective interest rate method over the period in which these advance payments were outstanding.

The rate in which interest is computed is based on rates implicit in the Service Agreements.

The rate in which interest is computed is based on rates implicit in the Updated Services Agreements.

For the Company's subscriber contracts, transactions with a significant financing component are infrequent as the time between cash collection and performance is generally less than one year.

The following describes the principal activities from which the Company generates its revenue.

Wholesale Capacity Service Revenue.

The Company provides wholesale capacity services.

The Company allocates the transaction price under the Updated Services Agreements to each performance obligation generally in proportion to their relative stand-alone selling prices.

Revenue is recognized when the performance obligations are performed, the timing of which may involve complex judgements by management.

For certain performance obligations, the Company recognizes revenue using the percentage of completion method, measured as the percentage of costs incurred to total estimated costs for such performance obligation.

Although the Updated Services Agreements have no expiration date, the Company estimated its contract term based on the useful life of its existing satellite network and the expected useful life of the new satellite network under construction.

Commercial IoT Service Revenue.

The Company sells Commercial IoT services as monthly or annual plans and recognizes revenue ratably over the service term or as service is used, beginning when the service is activated by the customer.

SPOT Service Revenue.

The Company sells SPOT services as monthly or annual plans and recognizes revenue on a straight-line basis over the service term, beginning when the service is activated by the customer.

Duplex Service Revenue.

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Annual fees for unlimited plans are recognized on a straight-line basis over the contract term.

SPOT Service Revenue.

The Company sells SPOT services as monthly or annual plans and recognizes revenue on a straight-line basis over the service term, beginning when the service is activated by the customer.

Commercial IoT Service Revenue.

Wholesale Capacity Service Revenue.

The Company provides wholesale capacity services.

The Company allocates the transaction price under the Service Agreements to each performance obligation generally in proportion to their relative stand-alone selling prices.

Revenue is recognized when the performance obligations are performed, the timing of which may involve complex judgements by management.

Although the Service Agreements have no expiration date, the Company estimated its contract term based on the useful life of its existing satellite network and the expected useful life of the new satellite network under construction.

Equipment Revenue.

Equipment revenue represents subscriber device sales, including fixed and mobile user terminals, SPOT and Commercial IoT products, and accessories.

Equipment revenue represents subscriber device sales, Commercial IoT and SPOT products and accessories as well as fixed and mobile user terminals.

The Company recognizes revenue upon shipment provided control has transferred to the customer.

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Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of subscriber equipment sales.

Engineering and Other Service Revenue.

Other service revenue includes primarily revenue associated with engineering and other communication services using the Company's MSS and terrestrial spectrum licenses.

Government and Other Service Revenue.

Government and other service revenue includes revenue generated primarily from terrestrial spectrum and network solutions as well as certain governmental and engineering service contracts.

The revenue associated with these engineering services is generally recorded over time as the services are rendered, and the Company's obligation to the customer is satisfied.

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The Company recognizes compensation expense in the financial statements for both employee and non-employee share-based awards based on the grant date fair value of those awards and accounts for forfeitures as they occur.

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards on the date of grant.

For restricted stock awards and units, the fair value is determined from the stock price on the grant date.

For existing market-based awards, the fair value was determined using a Monte-Carlo simulation model on the grant date.

For share-based awards with a performance condition that affects vesting, the Company recognizes compensation cost for awards if and when the performance condition is probable of achievement.

Expense associated with awards with market-based vesting conditions is recognized on a straight-line basis over the requisite service period, which is the lesser of the derived service period or the explicit service period if one is present.

Restricted stock awards and units are valued using the stock price on the grant date.

Market-based awards are valued using a Monte-Carlo simulation model on the grant date.

Compensation cost associated with awards with market-based vesting conditions is recognized on a straight-line basis over the requisite service period for each stock price target within the grant, which is the lesser of the derived service period or the explicit service period if one is present.

If the market condition is satisfied prior to the end of the requisite service period, the Company will accelerate all remaining expense to be recognized.

Compensation cost associated with share-based awards with a performance condition that affects vesting is recorded if and when the performance condition is probable of achievement.

Foreign Currency

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Translation adjustments are accumulated in a separate component of stockholders’ equity.

For 2023, 2022 and 2021, the foreign currency translation adjustments were net losses of $ 4.2 million, net gains of $ 5.3 million and net gains of $ 4.4 million, respectively.

Foreign currency transaction gains/losses were approximately net gains of $ 4.9 million, net losses of $ 6.6 million and net losses of $ 6.3 million for each of 2023, 2022, and 2021, respectively.

For 2024, 2023 and 2022, the foreign currency translation adjustments were net gains of $ 8.4 million, net losses of $ 4.2 million and net gains of $ 5.3 million, respectively.

Foreign currency transaction gains/losses were approximately net losses of $ 16.6 million, net gains of $ 4.9 million and net losses of $ 6.6 million for each of 2024, 2023, and 2022, respectively.

Asset Retirement Obligation

Liabilities arising from legal obligations associated with the retirement of the Company's gateway long-lived assets are measured at fair value and recorded as a liability.

Upon initial recognition of a liability for retirement obligations, the Company also capitalizes, as part of the asset carrying amount, the estimated costs associated with its expected retirement.

This asset is depreciated over the life of the gateway to be retired.

Accretion of the asset retirement obligation liability and depreciation of the related assets are included in depreciation, amortization and accretion in the accompanying consolidated statements of operations.

As of December 31, 2023 and 2022, the Company had accrued approximately $ 3.0 million, respectively, for asset retirement obligations.

There were no new asset retirement obligations established and no settlements during 2023.

As of December 31, 2024 and 2023, the Company had accrued approximately $ 2.9 million and $ 3.0 million, respectively, for asset retirement obligations.

There were no new asset retirement obligations established and no significant settlements during 2024.

The Company believes this estimate will be sufficient to satisfy the Company’s obligation under site leases to remove its gateway equipment and restore the lease sites to their original condition.

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Research and development costs were $ 6.5 million, $ 1.4 million and $ 0.5 million for 2024, 2023 and 2022, respectively.

The majority of increase in research and development costs are associated with costs incurred pursuant to the SSA under the License Agreement (as defined and discussed further in Note 2:

License Agreement).

During 2024 and 2023, research and development costs increased resulting from costs incurred pursuant to the SSA under the License Agreement.

Research and development costs are expensed as incurred as cost of services and include primarily the cost of new product development, chip set design and other engineering work.

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Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

In periods of net income, the numerator used to calculate diluted EPS includes the effect of dilutive securities, including interest expense, net, and derivative gains or losses reflected in net income (loss) as well as the effect of dividends attributable to preferred shareholders.

In periods of net income, the numerator used to

calculate diluted EPS includes the effect of dividends attributable to preferred shareholders.

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

Prior to their conversion, the effect of potentially dilutive common shares for the Company's convertible notes were calculated using the if-converted method.

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

For acquisitions accounted for as business combinations, goodwill represents the excess of the purchase price over the estimated fair values of identifiable assets and liabilities acquired as of the acquisition date.

Goodwill represents the excess of the purchase price over the estimated fair values of identifiable assets and liabilities acquired.

Goodwill is not amortized in accordance with the requirements of ASC 350.

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All of the Company's goodwill is assigned to Globalstar's MSS business, its only reportable segment.

Goodwill is tested for impairment on an annual basis on November 30 of each fiscal year and whenever events or circumstances indicate that the asset may be impaired.

Goodwill is tested for impairment on an annual basis and whenever events or circumstances indicate that the asset may be impaired.

The Company completed its annual goodwill impairment test on November 30, 2024 and determined there was no impairment as of that date.

Additionally, the Company is not aware of any additional triggering events.

Additionally, the Company is not aware of any triggering events.

The Company's goodwill impairment test is prepared using a qualitative assessment and, if necessary, a quantitative goodwill impairment test.

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Intangible Assets Subject to Amortization

Our intangible assets that do not have indefinite lives are amortized over their estimated useful lives.

The Company's intangible assets that do not have indefinite lives are amortized over their estimated useful lives.

For information related to each major class of intangible assets, including accumulated amortization and estimated average useful lives, see Note 6:

Intangible and Other Assets.

Intangible and Other Assets to the Consolidated Financials.

Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

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For subscriber-driven contracts, these capitalized contract acquisition costs primarily include deferred subscriber acquisition costs and are amortized consistently with the pattern of transfer of the good or delivery of the service to which the asset relates.

For wholesale capacity services, the Company capitalizes costs incurred by the Company prior to the customer benefiting from the service.

For wholesale capacity services, the Company capitalizes certain costs incurred by the Company prior to the customer benefiting from the service.

If a contract terminates prior to the end of its expected life, the remaining capitalized contract costs associated with it becomes impaired and the amount is expensed.

For subscriber-driven revenue, total contract acquisition costs were $ 0.9 million and $ 1.2 million as of December 31, 2024 and 2023, respectively, and are recorded in "Intangible and other assets" on the Company's consolidated balance sheet.

These costs are typically amortized to marketing, general and administrative expenses over three years , which considers anticipated contract renewals.

These costs are amortized to marketing, general and administrative expenses over the estimated completion of the contract term, which is three years and considers anticipated contract renewals.

For the years ended December 31, 2024, 2023 and 2022, the amount of amortization related to contract acquisition costs was $ 0.6 million, $ 0.7 million and $ 1.2 million, respectively.

For wholesale capacity services, total costs to fulfill the customer contract associated with the Service Agreements were $ 5.7 million and $ 4.5 million as of December 31, 2023 and 2022, respectively, and are recorded in "Intangible and other assets" on the Company's consolidated balance sheet.

These costs are typically amortized to cost of services and marketing, general and administrative expenses over the estimated completion of the contract term, consistent with the period in which the customer benefits from the services provided.

For the years ended December 31, 2023 and 2022, the amount of amortization related to costs to fulfill a contract was $ 0.4 million and $ 0.1 million, respectively.

There was no amortization related to costs to fulfill a contract in 2021.

For wholesale capacity services, total costs to fulfill the customer contract associated with the Updated Services Agreements were $ 5.3 million and $ 5.7 million as of December 31, 2024 and 2023, respectively, and are recorded in "Intangible and other assets" on the Company's consolidated balance sheet.

These costs are amortized to cost of services and marketing, general and administrative expenses over the estimated completion of the contract term, consistent with the period in which the customer benefits from the services provided.

For the years ended December 31, 2024, 2023 and 2022, the amount of amortization related to costs to fulfill a contract was $ 0.3 million, $ 0.4 million and $ 0.1 million, respectively.

Advertising Expenses

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Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("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.

This ASU also explicitly requires public entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new disclosures in this ASU.

The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

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

The Company adopted this standard when it became effective on January 1, 2024.

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

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which updates qualitative and quantitative disclosures for the rate reconciliation and income taxes paid.

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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 adopted this standard when it became effective on January 1, 2025.

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

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures .

This ASU requires public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items.

The amendments should be applied prospectively;

however, retrospective application is also permitted.

The Company plans to adopt this standard when it becomes effective on January 1, 2027.

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

Recently Adopted Accounting Pronouncements

In January 2017, the FASB issued ASU No.

Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment .

ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill, eliminating Step 2 from the goodwill impairment test.

Under ASU 2017-04, goodwill impairment will be tested by comparing the fair value of a reporting unit with its carrying amount, and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

ASU 2017-04 should be applied prospectively and is effective for annual and interim periods beginning after December 15, 2022, with early adoption permitted.

Prior to August 2023, the Company did not have any recorded goodwill on its consolidated balance sheets.

In connection with the License Agreement (discussed in Note 2:

License Agreement) entered into in August 2023, the Company recorded goodwill and is now subject to the guidance pursuant to ASU 2017-04.

The Company adopted ASU 2017-04 effective July 1, 2023.

The adoption of the new standard did not have a material impact on the Company’s consolidated financial statements.

In September 2022, the FASB issued ASU No.

Liabilities — Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations .

ASU 2022-04 added certain disclosure requirements for buyers in supplier finance programs.

The amendments in the update require that buyers disclose qualitative and quantitative information about their supplier finance programs.

Interim and annual requirements include disclosure of outstanding amounts under the obligations as of the end of the reporting period, and annual requirements include a rollforward of those obligations for the annual reporting period, as well as a description of payment and other key terms of the programs.

This update is effective for annual periods beginning after December 15, 2022, and interim periods within those fiscal years, except for the requirement to disclose rollforward information, which is effective for fiscal years beginning after December 15, 2023.

The Company adopted this standard when it became effective on January 1, 2023 and revised its disclosures pursuant ASU 2022-04.

LICENSE AGREEMENT

On August 29, 2023, the Company entered into an Intellectual Property License Agreement (the “License Agreement”) with XCOM Labs, Inc.

(“Licensor” or “XCOM”).

Under the License Agreement, the Company purchased an exclusive (subject to the qualifications set forth in the license agreement) right and license (the “License”) as well as Intellectual Property Assets (as defined in the License Agreement) relating to the development and commercialization of XCOM’s technologies for wireless spectrum innovations.

As consideration for the License and other agreements of Licensor in the License Agreement, the Company issued 60.6 million shares of its common stock (the “Stock Consideration”), representing a transaction value of approximately $ 68.7 million, subject to adjustment and a holdback to provide for certain liabilities related to the Intellectual Property Assets.

The number of shares issued as Stock Consideration was calculated using the volume-weighted average market price of the Common Stock on the NYSE American for the 20 trading days immediately preceding August 29, 2023.

In connection with the License Agreement, the Company also entered into a Support Services Agreement (the “SSA”) with XCOM.

Pursuant to the SSA, XCOM is required to provide services to the Company assisting with certain operations of the business relating to the Intellectual Property Assets and to make available to the Company certain employees and facilities associated with the foregoing.

Fees payable by Globalstar pursuant to the SSA will be based on costs incurred to provide the services and will be paid in shares of Globalstar common stock or cash at its option.

The Company accounted for the License Agreement under ASC 805, Business Combinations and allocated the preliminary purchase price based on the fair value of tangible and intangible assets acquired.

If, prior to the end of the one-year measurement period for finalizing the purchase price allocation, information becomes available about facts and circumstances that existed as of the transaction date, which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation retrospectively.

For the period August 29, 2023 through December 31, 2023, no measurement period adjustments were made.

The fair value of the consideration (paid in Globalstar common stock) totaled $ 70.4 million.

Approximately 18.8 million shares transferred were subject to legal trading restrictions.

These shares were valued using a Black-Scholes pricing model (refer to Note 9:

Fair Value Measurements for further discussion) and the fair value on the transaction date was $ 19.0 million.

Approximately 41.8 million shares transferred were not subject to legal trading restrictions and, pursuant to applicable accounting guidance and the Company's accounting policy election, were valued using the low price on the transaction date with a fair value of $ 51.4 million.

The fair value of the consideration transferred included $ 58.5 million associated with the purchase price and the reimbursement of the seller's transaction costs as well as $ 11.9 million associated with the initial service period under the SSA.

The Company recorded this amount as a prepaid asset on its consolidated balance sheets and will amortize the prepayment to cost of services and management, general and administrative expenses over the initial service period of nine months .

The allocation of the purchase price on August 29, 2023 is reflected in the tables below (amounts in thousands):

Identifiable assets acquired

Developed intellectual property (included in intangible assets) $ 25,980

Total identifiable assets acquired

Goodwill (included in intangible assets) 30,624

Net assets acquired

There were no liabilities assumed by the Company at the time of the License Agreement.

Other items in the table above include primarily equipment, inventory and the fair value of the trade name.

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

This ASU also explicitly requires public entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new disclosures in this ASU.

The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted this ASU for its fiscal year end December 31, 2024 disclosures.

For further discussion, refer to Note 16:

Segment Reporting.

SPECIAL PURPOSE ENTITY

The Company is the operator for certain satellite-enabled services (the "Services") offered by Apple Inc.

(the "Customer") pursuant to a service agreement (the “Service Agreement”) and certain related ancillary agreements (such agreements, together with the Service Agreement, the “Service Agreements”) for the Phase 1 Service Period and Phase 2 Service Period (as defined below).

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

As more fully described in the Company's Current Report on Form 8-K filed with the Commission on November 1, 2024, the Company and the 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 the Customer over a new MSS network, including a new satellite constellation, expanded ground infrastructure, and increased global MSS licensing (the “Extended MSS Network”) for the Services provided over the Extended MSS Network.

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

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

The Customer has prepaid, and is required, subject to certain conditions, to continue to prepay for,

certain services to be delivered by the Company to the Customer’s end users who will utilize the Extended MSS Network under the Updated Services Agreements and is a passive equity holder in Globalstar SPE.

The Company's allocated capacity supports the following phases of the Services:

1) current Services provided over the existing Globalstar System ("Phase 1 Service Period"), 2) future Services provided over new satellites ("Phase 2 Service Period"), of which such Services are expected to commence following the launch of such satellites in 2025, and 3) future Services provided over the Extended MSS Network.

The table below includes the assets of the Globalstar SPE as of December 31, 2024 (amounts in thousands):

As of December 31,

Cash and cash equivalents

Property and equipment, net

Prepaid network costs 289,639

Intangibles and other asset, net

Customer Class B Units

The 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.

The Globalstar SPE holds and administers, or will administer in the future, certain spectrum licenses, satellites, ground stations and other network assets for use by the Company and to enable and provide services to the Customer pursuant to the Updated Services Agreements.

The Globalstar SPE will not have commercial operations.

The Company has an 80 % equity ownership in the Globalstar SPE, representing 1,600,000 Class A Units.

The Company's 80 % ownership in the Globalstar SPE exposes it to residual profit or loss of the Globalstar SPE and Globalstar will absorb any expense variability of the entity.

The Company has power over the most significant activity of the Globalstar SPE and is exposed to losses and benefits of the Globalstar SPE through its equity interest.

The Company assessed the accounting considerations pursuant to ASC 810:

Consolidation , and concluded that it is the primary beneficiary of the VIE and consolidated the Globalstar SPE into the financial statements appearing in this Report.

Based on the redemption provision and other characteristics of the arrangement, the Company recorded the total equity contributions from the Customer of $ 400 million as equity on the Globalstar SPE financial statements and a non-current liability on the Company's consolidated balance sheet.

The initial minority investment in the Globalstar SPE included $ 224 million of in-kind contributions from the Customer and $ 176 million in cash contributions.

The in-kind contributions included $ 177 million of long-lead items (recorded to "Prepaid network costs"), $ 24 million of satellite construction in progress assets (recorded to "Property and equipment, net"), $ 11 million of ground network construction in progress assets (recorded to "Property and equipment, net"), and $ 12 million of intangible licensing work in progress assets (recorded to "Intangible and other assets, net").

Extended MSS Network Prepayments

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

These prepayments consist of:

(1) an infrastructure prepayment (the “Infrastructure Prepayment”) of up to $ 1.1 billion, which is to be funded quarterly over the construction period of the satellites to be used in the Extended MSS Network, 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) the amount necessary for the Company to fully retire its 2023 13 % Notes (the "Current Debt Repayment").

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

The terms of the Infrastructure Prepayment and the Current Debt Repayment are contained within one prepayment agreement (the “2024 Prepayment Agreement”).

The Company expects to fully payoff the 2024 Prepayment Agreement and to redeem the Customer Class B Units within the design useful life of the new satellites.

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

Infrastructure Prepayment

During 2024, the Company received $ 278 million from the Customer pursuant to the Infrastructure Prepayment.

The Company recorded these prepayments as deferred revenue as they represent the Company’s obligation to transfer future services to Customer.

The deferred revenue associated with the Infrastructure Prepayment will be earned as revenue as services are performed.

A portion of the Infrastructure Prepayment accrues fees that will be reduced or eliminated entirely if the Company meets certain defined milestones associated with the completion of the Extended MSS Network.

Current Debt Repayment

On the Closing Date, the Company received $ 235 million from the Customer pursuant to the Current Debt Repayment, representing the amount necessary to retire the Company's outstanding 2023 13 % Notes.

Refer to Note 7:

Intangible and Other Assets for further discussion on goodwill.

The table below reflects the intangible assets acquired and weighted-average useful lives (amounts in thousands):

Intangible Asset

Initial Fair Value

Weighted-Average Useful Life

Trade name (included in Other in the table above) $ 560 5

Developed intellectual property 25,980 10

The trade name was valued using an income approach, specifically a relief from royalty method.

The developed intellectual property was valued using the income approach, specifically a discounted cash flow method.

During the year ended December 31, 2023, the Company incurred $ 2.9 million of acquisition-related costs, which primarily consisted of transaction fees as well as legal, accounting and other professional fees.

These costs are recorded in management, general and administrative expenses on the Company's consolidated statements of operations.

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

As consideration for the satellite services provided for in the Updated Services Agreements, the incremental service fees due from the 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.

Payment of a portion of these fees is subject to the satisfaction of certain licensing, service levels and milestone achievements.

Additionally, the Updated Services Agreements also provide for other service fees of $ 30 million annually to be accelerated, such accelerated payments are expected to begin in the first quarter of 2025.

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

Refer to Note 10:

Commitments and Contingencies for further discussion.

Disaggregation of Revenue

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Service revenue:

Wholesale capacity services $ 145,299 $ 109,067 $ 34,913

Subscriber services

Duplex $ 25,932 $ 29,222 $ 31,197

SPOT 44,184 45,670 46,040

Commercial IoT 26,245 22,867 19,516

Wholesale capacity services 109,067 34,913 8,945

Engineering and other services 2,146 2,747 2,331

Total service revenue 204,196 132,068 106,464

Subscriber equipment sales:

SPOT 41,140 44,184 45,670

Commercial IoT 11,866 10,132 7,169

Other 22 416 1,237

Duplex 20,156 25,932 29,222

Government and other services

4,849 2,146 2,747

Total service revenue 237,689 204,196 132,068

Total subscriber equipment sales

12,660 19,612 16,436

Total revenue $ 250,349 $ 223,808 $ 148,504

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 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 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.

During 2023, revenue recognized included $ 6.5 million received in connection with the amendment of the Service Agreements in February 2023 as consideration related to performance obligations completed in prior periods.

Wholesale capacity services revenue includes revenue associated with the Updated Services Agreements.

As consideration for the services to be provided by Globalstar under the Updated Services 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.

Government and other services revenue includes 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.

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

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Accounts Receivable

Receivables are included in "Accounts receivable, net of allowance for credit losses" on the Company's consolidated balance sheets except for the long-term portion of the wholesale capacity accounts receivable as of December 31, 2022, which was included in "Prepaid satellite costs and customer receivable .

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

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Accounts receivable, net of allowance for credit losses

Subscriber accounts receivable $ 14,474 $ 14,850

Subscriber and other accounts receivable

$ 14,829 $ 14,474

Wholesale capacity accounts receivable 12,123 34,269

Agency agreement accounts receivable 748 4,245

Total accounts receivable, net of allowance for credit losses

Long-term wholesale capacity accounts receivable — 16,100

Total accounts receivable (short-term and long-term), net of allowance for credit losses $ 48,743 $ 42,429

During 2023, the Company reclassified $ 16.1 million of accounts receivable associated with the Service Agreements from long-term accounts receivable to short-term accounts receivable.

This balance is associated with amounts that are contractually owed to the Company for meeting performance obligations related to the next-generation satellite constellation prior to the Phase 2 Service Period.

The Company expects that this amount will be paid during the next twelve months.

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 were $ 197.1 million as of December 31, 2023.

In prior year filings, the Company recorded a long-term unbilled receivable and related long-term deferred revenue reflecting its Partner’s obligation to fund certain construction costs to the Company associated with the satellites that are being constructed to provide service during the Phase 2 Service Period.

During 2023, the Company revised this presentation and applied this change to its December 31, 2022 balance sheet.

This change in accounting presentation has no impact on Partner’s obligation to provide funding for the satellite construction costs nor the expected revenue the Company will recognize during the Phase 2 Service Period.

$ 26,952 $ 48,743

The Company entered into a satellite procurement agreement and a launch services agreement to support the Phase 2 Service Period.

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

Pursuant to the Services Agreements, payments are expected to be made to the Company by the Customer on a straight-line basis once the satellites are successfully utilized to provide services for the 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 were $ 236.9 million as of December 31, 2024 related to Phase 2.

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 reflect balances from its customers, including MSS subscribers and its wholesale capacity customer under the Service Agreements.

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

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Short-term contract liabilities

Subscriber contract liabilities $ 22,816 $ 21,987

Wholesale capacity contract liabilities 30,861 52,652

Subscriber and other contract liabilities

$ 19,710 $ 22,816

Wholesale capacity contract liabilities, net of contract asset

41,491 30,861

Total short-term contract liabilities $ 61,201 $ 53,677

Long-term contract liabilities

Subscriber contract liabilities $ 1,632 $ 1,704

Subscriber and other contract liabilities

$ 1,431 $ 1,632

Wholesale capacity contract liabilities, net of contract asset 286,740 1,581

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

As of December 31, 2023, the Company expects to recognize $ 22.8 million of its remaining performance obligations to its subscribers during the next twelve months .

The Service Agreements do not have a termination date;

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

As of December 31, 2023, the Company expects to recognize $ 30.9 million of its remaining performance obligations during the next twelve months .

The Updated Services Agreements have no expiration date;

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

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

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Wholesale capacity contract liabilities, net:

Advanced payments for services expected to be performed with the second-generation satellite constellation during Phase 1 (2)

$ 5,219 $ 99,671

Additional consideration associated with the 2021 and 2023 Funding Agreements (1)

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

$ 12,247 $ 16,104

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

14,204 22,540

Advanced payments for the Phase 1 service fee and service-related operating expenses and capital expenditures

Advanced payments for services expected to be performed with the ground spare satellite launched in June 2022

21,914 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 8,950 14,204

Advanced payments for the Phase 1 Service Period fee, service-related operating expenses and capital expenditures and other services 27,664 19,907

Advance payments made for the Extended MSS Network (See Note 2:

Special Purpose Entity) 278,043 —

Additional consideration associated with the Updated Services Agreements (2)

Other advanced payments associated with future performance obligations 15,795 5,219

Contract asset (3)

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Wholesale capacity contract liabilities, net $ 328,231 $ 32,442

(1) In November 2022, the Company issued Warrants with an initial fair value at the time of issuance of $ 48.3 million and 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.

(2) During 2021, the Company received payments from Partner totaling $ 94.2 million (the "2021 Funding Agreement").

In February 2023, the Service Agreements were amended.

This amendment, which was effective in April 2023, changed certain terms in the 2021 Funding Agreement, resulting in $ 88.0 million previously recorded as deferred revenue being re-characterized as debt.

See further discussion in Note 6:

Long-Term Debt and Other Financing Arrangements.

(3) In connection with the Company recording the fair value of its financial obligations in the amended 2021 and 2023 Funding Agreements, it recorded a debt discount of $ 11.6 million and $ 4.5 million, respectively, representing the difference between the present value of the future principal payments discounted using the prevailing market rate at the date of issuance of the debt and the effective rate.

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

(1) Includes additional consideration associated with the below-market interest rates within the 2021 and 2023 Funding Agreements.

This consideration will be recognized over the estimated Phase 1 and Phase 2 Service Periods.

(2) Includes additional consideration totaling $ 4.4 million associated with the fee reduction mechanism embedded in the Current Debt Repayment and a portion of the 2024 Prepayment Agreement, as well as an estimate of the significant financing component totaling $ 2.9 million within these agreements.

It is anticipated that this consideration will be recognized over the estimated term of the Current Debt Repayment and services provided over the Extended MSS Network.

(3) 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 sheet.

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

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

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Operating lease cost (1)

Amortization of right-of-use assets, net

$ 6,360 $ 5,576 $ 4,306

Interest on lease liabilities 2,646 2,524 1,948

Short-term lease cost 315 862 498

Total lease cost $ 6,675 $ 6,438 $ 4,804

(1) Includes sublease income.

Amortization and interest associated with finance leases were less than $ 0.1 million in total for the years ended December 31, 2024, 2023 and 2022;

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Weighted-average lease term

Finance leases 3.7 years

Operating Leases 9.8 years

Finance leases 3.4 years 3.7 years

Operating Leases 8.3 years 9.8 years

Weighted-average discount rate

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Operating cash flows for operating leases $ 6,388 $ 5,853 $ 5,299

$ 5,853 $ 5,299 $ 5,445

Operating and financing cash flows from finance leases were each less than $ 0.1 million for each of the years ended December 31, 2024, 2023 and 2022;

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2027 5,645 32

2028 5,577 17

Thereafter 15,217 —

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Discounted lease liability $ 30,507 $ 110

In connection with the License Agreement previously disclosed, the office lease agreement between XCOM Labs, Inc.

and its lessor is expected to be assigned to the Company during 2024.

In connection with the Extended MSS Network, the Company will likely enter into additional operating leases in the future, the amount and timing of such leases is unknown and excluded from the table above.

PROPERTY AND EQUIPMENT

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Total property and equipment, net $ 673,632 $ 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.

The Company has an agreement with MDA for the purchase of new satellites that are intended to replenish the Company's HIBLEO-4 U.S.-licensed system.

The Company also has an agreement with SpaceX providing for the launch of the first set of satellites under the agreement with MDA.

The Company also has agreements with MDA and SpaceX to support the Extended MSS Network.

Refer to Note 10:

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).

As of December 31,

Satellite Procurement Agreement

Construction in progress

$ 198,884 $ 98,491

Vendor financing liability

Accrued construction costs

55,627 36,386

Prepaid construction costs

Launch Services Agreement

Construction in progress

Accrued construction costs

Prepaid construction costs

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.

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 December 31, 2024, for the HIBLEO-4 replacement satellites, the Company has incurred $ 224.3 million and $ 23.6 million for milestones completed under these agreements with MDA and SpaceX, respectively.

As of December 31, 2024, for the Extended MSS Network, the Company has incurred $ 17.3 million for milestones completed under the agreement with SpaceX.These costs, as well as the associated personnel costs and capitalized interest, are reflected in the "space component" of construction in progress in the table above.

As discussed in Note 2:

Special Purpose Entity, the Customer contributed certain assets to the Globalstar SPE, which are included in the table above.

Capitalized Interest and Depreciation Expense

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2024 2023 2022

Interest cost eligible to be capitalized $ 39,143 $ 45,609 $ 47,580

Interest cost recorded in interest income (expense), net ( 15,271 ) ( 29,836 ) ( 43,325 )

Interest costs eligible to be capitalized

$ 46,527 $ 39,143 $ 45,609

Interest costs recorded in interest income (expense), net

( 14,388 ) ( 15,271 ) ( 29,836 )

Net interest capitalized $ 32,139 $ 23,872 $ 15,773

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During 2022, the Company wrote down the value of certain second-generation ground assets, including intangible assets.

Accordingly the amortization expense decreased during 2023 associated with these assets.

Accordingly, the amortization expense decreased after 2022 associated with these assets.

Geographic Location of Property and Equipment

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The Company has intangible assets not subject to amortization, which include certain costs to obtain or defend regulatory authorizations.

These costs primarily include efforts related to the enhancement of the Company's licensed MSS spectrum to provide terrestrial wireless services as well as costs with international regulatory agencies to obtain similar terrestrial authorizations outside of the United States.

These costs include primarily efforts related to the enhancement of the Company's licensed MSS spectrum to provide terrestrial wireless services as well as costs with international regulatory agencies to obtain similar terrestrial authorizations outside of the United States.

The Company also has intangible assets subject to amortization, which primarily include developed technology and definite lived MSS licenses.

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Total $ 92,830 $ ( 7,625 ) $ 85,205 $ 70,738 $ ( 10,085 ) $ 60,653

During 2023, intellectual property assets in progress were assumed in the License Agreement (discussed further in Note 2:

License Agreement).

As of December 31, 2023, these assets were still in the development phase and will be amortized over their useful lives once placed into service.

For the year ended December 31, 2024, the Company recorded amortization expense on these intangible assets of $ 3.6 million.

Amortization expense is recorded in operating expenses in the Company’s consolidated statements of operations.

During 2024, additions to intangible assets included primarily efforts associated with the development of XCOM technology as

well as efforts to obtain regulatory authorizations for Globalstar and licensing work associated with the Globalstar SPE.

During 2024, the Company wrote off certain of its fully amortized assets, which reduced the gross carrying amount and accumulated amortization reflected in the table above.

Excluding the effects of any acquisitions, dispositions or write-downs subsequent to December 31, 2024, total estimated annual amortization of intangible assets is as follows (in thousands):

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Goodwill is deductible for tax purposes.

This goodwill was recorded during 2023 in connection with the License Agreement (refer to Note 2:

License Agreement for further discussion) and represented the excess of the purchase price of the net identifiable assets acquired.

At the transaction date, the goodwill was attributable to the workforce of the acquired entity and significant synergies.

There were no material changes to the value of goodwill between the initial purchase date, August 29, 2023, and December 31, 2023.

The Company's annual goodwill impairment test was completed on November 30, 2023 and the qualitative assessment indicated that it was more likely-than-not that the estimated fair value of the reporting unit exceeded the carrying value of goodwill.

This goodwill was recorded during 2023 in connection with entering into the intellectual property license agreement with XCOM Labs, Inc.

and represented the excess of the purchase price of the net identifiable assets acquired.

The Company's annual goodwill impairment test during 2024 indicated that it was more likely-than-not that the estimated fair value of the reporting unit exceeded the carrying value of goodwill.

Other assets consist of the following (in thousands):

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International tax receivables (Note 13)

Embedded derivative assets within the 2023 Funding Agreement (Note 8)

Other long-term assets 3,774 3,703

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the long-term portion represents the amount that will be billed beyond the next twelve months.

Other long-term assets include primarily ERP implementation costs, recoverable tariffs and other long-term deposits.

Other long-term assets include primarily ERP implementation costs, recoverable tariffs and long-term deposits.

LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS

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December 31, 2024 December 31, 2023

Amount Unamortized Discount and Deferred Financing Costs Carrying

Amount Unamortized Debt Premium (Discount) and Deferred Financing Costs

Value Principal

Amount Unamortized Discount and Deferred Financing Costs Carrying

Current Debt Repayment $ 221,625 $ 107,176 $ 328,801 $ — $ — $ —

2023 Funding Agreement 155,000 ( 11,031 ) 143,969 117,253 ( 15,433 ) 101,820

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— — — 205,958 ( 16,040 ) 189,918

2019 Facility Agreement — — — 143,213 11,098 132,115

Vendor financing — — — 59,575 — 59,575

Total debt and vendor financing 398,661 38,361 360,300 202,788 11,098 191,690

Total debt 417,475 93,947 511,422 398,661 ( 38,361 ) 360,300

current portion 34,600 — 34,600 34,600 — 34,600

Long-term debt and vendor financing $ 364,061 $ 38,361 $ 325,700 $ 143,213 $ 11,098 $ 132,115

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

Long-term debt $ 382,875 $ 93,947 $ 476,822 $ 364,061 $ ( 38,361 ) $ 325,700

The principal amounts shown above included payment of in-kind interest for the 2023 13 % Notes.

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

All amounts outstanding associated with the Company's vendor financing arrangement were due in March 2023 and, therefore, were reflected as a current liability on the Company's consolidated balance sheet as of December 31, 2022.

As of December 31, 2023, 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 December 31, 2024, the current portion of long-term debt relates to the 2021 Funding Agreement and represents the amounts to be paid under the Updated Services Agreements (as previously defined) through fee offsets from the Customer during the next twelve months.

Current Debt Repayment

As discussed in Note 2:

Special Purpose Entity, pursuant to the Updated Services Agreements, the Customer funded $ 235 million for the Company to retire its outstanding 2023 13 % Notes.

The Current Debt Repayment is expected to be recouped against amounts payable by the Customer to the Company on a quarterly basis over a period of 32 quarters commencing on a fixed repayment date in the future that is not tied to the launch of services.

The Current Debt Repayment is classified as debt because the Company's repayment obligations will commence on such date regardless of when services are provided under the Updated Services Agreements.

The Current Debt Repayment accrues annual fees, which may be reduced or eliminated entirely if the Company meets certain defined milestones associated with the completion of the Extended MSS Network, at which time prior accruals will be reduced or eliminated.

The balance accrued for these fees is included in long-term deferred revenue on the Company's balance sheet (refer to Note 3:

Revenue for further discussion).

On the issuance date, the Company recorded the Current Debt Repayment at fair value of $ 331.2 million.

The difference between the principal amount of the Current Debt Repayment and the fair value was $ 109.6 million and was recorded as a debt premium.

Additionally, the Company was required to bifurcate the fair value of the interest reduction mechanism and record a derivative liability upon issuance equal to the debt premium.

The Company will amortize the premium as an offset to interest expense over the loan term using the effective interest rate method.

Refer to Note 8:

Derivatives and Note 9:

Fair Value Measurements for further discussion on the embedded derivative bifurcated from the Current Debt Repayment.

2023 Funding Agreement

In February 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 will 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 2023 Funding Agreement replaces the Company’s requirement to raise third-party financing for such costs as previously required under the Service Agreements and will be funded on a quarterly basis, as needed and subject to certain conditions in the agreement.

The remaining amount of the satellite costs is expected to be funded from Globalstar’s operating cash flows.

Through December 31, 2023, payments under the 2023 Funding Agreement totaled $ 117.3 million.

In February 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.

The total balance is expected to be recouped in installments for a period of 16 quarters beginning no later than the third quarter of 2025.

The balance may also be repaid over time through excess cash flow sweeps or voluntary prepayments, as provided under the terms of the 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 2022 agreement with MDA, as well as launch, insurance and ancillary costs incurred in connection with the construction and launch of satellites purchased under such agreement.

As of December 31, 2024, payments under the 2023 Funding Agreement totaled $ 155.0 million, of which $ 37.7 million was received during 2024.

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) and continuing for no longer than 16 consecutive quarters.

Compounded fees are accrued at a fixed rate based on the average outstanding balance of the 2023 Funding Agreement.

The balance accrued for these fees is included in "Other non-current liabilities" on the Company's balance sheet (refer to Note 11:

Accrued Expenses and Other Non-Current Liabilities for further discussion).

For as long as any amount funded under the 2023 Funding Agreement is outstanding, the Company will be subject to certain covenants, including (i) maintenance of a minimum cash balance of $ 30 million, (ii) interest coverage and leverage ratios, and (iii) other customary negative covenants, including limitations on certain asset transfers, expenditures and investments.

The Company’s obligations under the 2023 Funding Agreement is also secured by a first priority lien over substantially all of the assets of the Company and its domestic subsidiaries.

Thermo has agreed to provide support of certain of the Company’s obligations under the 2023 Funding Agreement and certain other obligations under the Service Agreements.

Entry into this guarantee agreement received shareholder approval in June 2023 and became effective in December 2023.

See further discussion regarding Thermo's guarantee and the associated accounting conclusions in Note 12:

The Company’s obligations under the 2023 Funding Agreement are secured by a first priority lien over substantially all of the assets of the Company and its domestic subsidiaries.

Thermo guaranteed certain of the Company’s obligations under the 2023 Funding Agreement and Updated Services Agreements.

See further discussion regarding Thermo's guarantee in Note 12:

Related Party Transactions.

The Company recorded the fair value of the 2023 Funding Agreement using a discounted cash flow model.

The Company recorded debt discounts for the difference between the fair value of the debt and the proceeds received.

This difference is attributed to the fair value of the Thermo guarantee (recorded as additional paid in capital) and the fair value of the economic benefit received due to the existing customer relationship (recorded as deferred revenue);

both of these debt discounts are netted against the face value of the 2023 Funding Agreement.

The Company is accreting the debt discounts to interest expense through the maturity date using an effective interest rate method.

Additionally, the prepayment features included in the 2023 Funding Agreement required bifurcation from the debt and were valued separately.

The Company records the embedded derivative liability or asset as a non-current liability or asset on its consolidated balance sheet with a corresponding debt discount or premium, which is netted against the face value of the 2023 Funding Agreement.

The debt discount or premium is accreted or amortized to interest expense or income through the maturity date using an effective interest rate method.

As the Company makes draws under the 2023 Funding Agreement, the amount of each draw is recorded at fair value using a discounted cash flow model.

The Company records a debt discount, which is netted against the face value of the 2023 Funding Agreement, 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.

Prior to the amendment in October 2024, prepayment features were included in the 2023 Funding Agreement and required bifurcation from the debt and were valued separately.

Refer to Note 8:

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Fair Value Measurements for further discussion on the compound embedded derivative bifurcated from the 2023 Funding Agreement.

As the Company makes additional draws under the 2023 Funding Agreement, the amount of each draw will be recorded at fair value and the Company will assess the fair value of embedded features within the debt.

The table below outlines the components of the draws made under the 2023 Funding Agreement at funding (amounts in thousands):

April 2023 November 2023

February 2024

Principal $ 87,730 $ 29,523 $ 37,747

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Fair Value at Issuance $ 75,983 $ 24,315 $ 37,175

After the effectiveness of the Thermo Guarantee in December 2023, no debt discount was attributed to the allocation of the fair value of the draw.

Additionally, there was no significant discount for the February 2024 draw and, therefore, no embedded derivative required bifurcation.

2021 Funding Agreement

During 2021, the Company received payments under the 2021 Funding Agreement totaling $ 94.2 million.

In connection with the February 2023 amendment of the Service Agreements (discussed above), certain terms of the 2021 Funding Agreement

were amended to align with the terms of the 2023 Funding Agreement, including granting Partner a first-priority lien in substantially all of the assets of the Company and its domestic subsidiaries to secure the Company's repayment of amounts funded.

This amendment resulted in the previously recorded deferred revenue being re-characterized as debt.

On the amendment date, the Company recorded the funding under the 2021 Funding Agreement at fair value, net of a debt discount.

The Company is accreting the debt discount to interest expense through the maturity date using an effective interest rate method.

During 2023, $ 12.5 million was recouped pursuant to the terms of the 2021 Funding Agreement, which reduced the principal amount outstanding under the agreement.

The table below outlines the components of the 2021 Funding Agreement upon amendment (amounts in thousands):

Principal $ 94,200

Amount Repaid Prior to Amendment

Debt Discount - Customer Relationship ( 11,626 )

Fair Value at Issuance $ 76,324

During 2021, the Company received payments under the amended 2021 Funding Agreement totaling $ 94.2 million.

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.

The debt discount associated with the 2021 Funding Agreement is accreting to interest expense through the maturity date using an effective interest rate method.

No interest accrues on amounts outstanding under the 2021 Funding Agreement.

During 2024, $ 34.6 million was recouped pursuant to the terms of the 2021 Funding Agreement.

2023 13 % Notes

In March 2023, the Company completed the sale of $ 200.0 million in aggregate principal amount of non-convertible 13 % Senior Notes due 2029 (the “2023 13 % Notes”).

The 2023 13 % Notes were sold pursuant to a Purchase Agreement (the “Purchase Agreement”) among the Company, as issuer, the subsidiary guarantors party thereto (each, a “Subsidiary Guarantor” and collectively, the “Subsidiary Guarantors”), an affiliate of Värde Partners and the other purchasers party thereto (collectively, the “Purchasers”).

The 2023 13 % Notes were issued pursuant to an indenture, dated as of March 31, 2023 (the “Indenture”), among the Company, the Subsidiary Guarantors, as guarantors, and Wilmington Trust, National Association, as trustee.

The 2023 13 % Notes are senior, unsecured obligations of the Company and have a stated maturity of September 15, 2029.

The 2023 13 % Notes were sold at an issue price of 95 % of the principal amount of the 2023 13 % Notes.

The Company used a portion of the net proceeds to pay financing costs of $ 7.8 million, which were recorded on the Company's consolidated balance sheet as a reduction in the carrying amount of the debt.

The 2023 13 % Notes bear interest initially at a rate of 13.00 % per annum payable semi-annually in arrears.

The Company is required to pay interest (i) at a rate per annum of 4.00 % which must be paid in cash and (ii) at a rate per annum of 9.00 % which may be paid either (a) in-kind (“PIK”) by increasing the principal amount of the 2023 13 % Notes outstanding or (b) in cash, in such proportion as the Company may choose, with a step up in the PIK component of the interest if any 2023 13 % Notes remain outstanding after March 15, 2028.

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.

The 2023 13 % Notes may be redeemed at the option of the Company at any time, subject to the conditions of the Indenture.

Among other things, prior to March 15, 2025 (the “First Call Date”), the Company will be permitted to redeem the 2023 13 % Notes in whole or in part at the redemption price equal to 100 % of the principal amount of the 2023 13 % Notes redeemed plus a premium based on the net present value of the remaining interest payments through the First Call Date.

Beginning on the First Call Date, the 2023 13 % Notes may be redeemed at a redemption price equal to 103 % of the principal amount, declining to 100 % of the principal amount after March 15, 2027, in each case, together with accrued and unpaid interest.

Additionally, in the event of a Change of Control (as such term is defined in the Indenture) or certain other events, holders of the 2023 13 % Notes have the right to require the Company to repurchase all or a portion of their 2023 13 % Notes at a price (as calculated by the Company) in cash equal to 101 % of the aggregate principal amount thereof plus accrued and unpaid interest and certain tax payments.

The Indenture includes customary terms and covenants, including restrictions on the Company’s and the Subsidiary Guarantors’ ability to incur indebtedness, make guarantees, sell equity interests, and customary events of default after which the holders may accelerate the maturity of the 2023 13 % Notes and become due and payable immediately.

2019 Facility Agreement

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

The 2019 Facility Agreement was

scheduled to mature in November 2025.

The loans under the 2019 Facility Agreement bore interest at a rate of 14.0 % per annum to be paid in kind (or in cash, at the option of the Company).

The Service Agreements required the Company to refinance all loans outstanding under the 2019 Facility Agreement.

A portion was refinanced in November 2022 and the remaining portion was refinanced in March 2023.

Using a portion of the proceeds from the sale of the 2023 13 % Notes, the Company repaid all of its outstanding obligations under the 2019 Facility Agreement of approximately $ 148 million.

The Company recorded a loss on extinguishment of debt of $ 10.4 million in the first quarter of 2023 representing the difference between the net carrying amount prior to extinguishment (including unamortized deferred financing costs, debt discounts and derivatives) and the reacquisition price of the debt.

The Company evaluated the various embedded derivatives within the 2019 Facility Agreement related to certain contingently exercisable put options.

Due to the substantial discount upon issuance, as calculated under applicable accounting guidance, these prepayment features were required to be bifurcated and separately valued.

The Company initially recorded the compound embedded derivative liability as a non-current liability on its consolidated balance sheets with a corresponding debt discount, which was netted against the face value of the 2019 Facility Agreement.

The Company accreted the debt discount associated with the compound embedded derivative liability to interest expense through the maturity date, prior to its extinguishment, using an effective interest rate method.

Refer to Note 8:

Derivatives and Note 9:

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

Vendor Financing

In February 2022, the Company entered into a satellite procurement agreement with MDA (see Note 10:

Commitments and Contingencies for further discussion).

This agreement (as amended), which had original payment terms within 45 days, provided for deferrals of milestone payments through March 15, 2023.

Deferred amounts represented approximately 23 % of the initial contract price.

Invoices to MDA were generally paid within six months of the due date.

The Company paid the remaining balance during the first quarter of 2023.

Reflected in the table below is a rollforward of the Company's obligations under its vendor financing arrangement with MDA (amounts in thousands):

Confirmed obligations outstanding, January 1, 2023 and 2022, respectively $ 59,575 $ —

Invoices confirmed during the periods — 73,575

Confirmed invoices paid during the periods ( 59,575 ) ( 14,000 )

Confirmed obligations outstanding, December 31, 2023 and 2022, respectively

In 2023, the Company sold $ 200.0 million in aggregate principal amount of non-convertible 13 % Senior Notes due 2029 (the “2023 13 % Notes”).

Pursuant to the Updated Services Agreements, the Company paid off the outstanding principal balance of the 2023 13 % Notes in November 2024 with cash from the 2024 Prepayment Agreement.

The payoff of the 2023 13 % Notes included the aggregate principal amount outstanding of $ 219.6 million, accrued interest of $ 4.1 million and make-whole fees of $ 13.3 million.

The principal and accrued interest amount of $ 223.7 million included the accrual of PIK interest added to the principal amount outstanding prior to pay down totaling $ 21.6 million.

The Company recorded a loss on extinguishment of debt of $ 27.4 million on its consolidated statements of operations, resulting from the unamortized debt discount and deferred financing costs of the 2023 13 % Note prior to extinguishment as well as the make-whole fees at pay down.

Prior to being paid off, the 2023 13 % Notes bore interest at a rate of 13.00 % per annum payable semi-annually in arrears.

Pursuant to the Service Agreements, the Company paid 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 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, which increased the principal balance outstanding under the 2023 13 % Notes.

Series A Preferred Stock

In November 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”) in exchange for $ 149.4 million outstanding principal amount of its 2019 Facility Agreement held by affiliates of Thermo and certain other lenders.

The Company recorded the Series A Preferred Stock at the fair value of the shares totaling $ 105.3 million on the Company's consolidated balance sheet.

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.

Holders of Series A Preferred Stock will be entitled to receive, when, as and if declared by our 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 beginning on January 1, 2023.

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 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.

During 2024, the Company paid dividends approved by the Company's Board of Directors totaling $ 10.6 million.

No dividends were paid in 2022.

Series A Preferred Stock may be redeemed by the Company, in whole or in part, at any time.

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Total $ 417,475

Amounts in the above table are calculated based on amounts outstanding at December 31, 2023, and therefore exclude future paid-in-kind interest payments and future draws pursuant to the 2023 Funding Agreement and assume recoupments as scheduled under the 2021 and 2023 Funding Agreements.

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

Amounts in the above table are calculated based on amounts outstanding at December 31, 2024, and therefore exclude future draws pursuant to the 2023 Funding Agreement and assume recoupments as scheduled under the 2021 and 2023 Funding Agreements and the Current Debt Repayment.

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

None of these derivative instruments are designated as a hedge.

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The instruments and related features embedded in the debt instruments that are required to be accounted for as derivatives are described below.

Fair Value Measurements for further discussion.

Fair Value Measurements to the Consolidated Financial Statements for further discussion.

Embedded Derivative within the Current Debt Repayment

The terms of the Current Debt Repayment contains an interest reduction mechanism that is required to be bifurcated and recorded as an embedded derivative on the Company's consolidated balance sheet with a corresponding debt premium that is added to the principal amount of the Current Debt Repayment.

The Company determined the fair value of the embedded derivatives using a discounted cash flow model.

As the discount yield and the effective interest rate of the loan fluctuate based on projected cash flows, the derivative value is adjusted.

Upon issuance, the Company recorded the fair value of the embedded derivative, totaling $ 109.6 million, as a derivative asset.

As of December 31, 2024, the fair value of the embedded derivative was $ 108.8 million.

During the fourth quarter of 2024, the Company recorded an offset to derivative gain (loss) resulting from this mark-to-market adjustment, which was reflected in "Other" in the Company’s consolidated statement of operations.

Embedded Derivatives within the 2023 Funding Agreement

The 2023 Funding Agreement contains certain prepayment features that are required to be bifurcated and recorded as an embedded derivative on the Company's consolidated balance sheet with a corresponding debt discount or premium that is netted against the principal amount of the draws under the 2023 Funding Agreement.

As the Company makes a draw on the 2023 Funding Agreement, an associated embedded derivative is bifurcated and recorded.

The Company determines the fair value of the embedded derivatives using a discounted cash flow model.

As the discount yield and the effective interest rate of the loan fluctuates based on projected cash flows, the derivative may result in either a liability or an asset to the Company.

During the year ended December 31, 2023, the Company recorded a derivative gain of $ 1.6 million, which is reflected in "Derivative gain (loss) and other" in the Company’s consolidated statement of operations.

As of December 31, 2023, the fair value of the embedded derivatives within the 2023 Funding Agreement were assets totaling $ 1.3 million.

Compound Embedded Derivative within the 2019 Facility Agreement

The 2019 Facility Agreement contained certain contingently exercisable put features that were required to be bifurcated and recorded as a compound embedded derivative.

The Company determined the fair value of this derivative using a probability weighted discounted cash flow model.

During the years ended December 31, 2022 and 2021, the Company recorded derivative losses of $ 1.0 million and gains of $ 0.2 million, respectively, which is reflected in Derivative gain (loss) and other in the Company’s consolidated statement of operations.

As of December 31, 2022, the fair value of the compound embedded derivative within the 2019 Facility Agreement was $ 0.1 million.

In November 2022, the Company exchanged a portion of the 2019 Facility Agreement into Series A Preferred Stock.

In March 2023, the Company refinanced the remaining principal outstanding under the 2019 Facility Agreement with proceeds from the issuance of its 2023 13 % Notes.

As a result of this activity, the Company wrote off the embedded derivative associated with the 2019 Facility Agreement, which is included in "(Loss) gain on extinguishment of debt" on the consolidated statement of operations;

therefore, no balance remained as of December 31, 2023.

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

Compound Embedded Derivative within the 2013 8.00 % Notes

The 2013 8.00 % Notes contained a conversion option and contingent put feature that were required to be bifurcated and recorded as a compound embedded derivative.

The Company determined the fair value of the compound embedded derivative liability using a Monte Carlo simulation model.

During the years ended December 31, 2022 and 2021, the Company recorded derivative gains of $ 0.2 million and losses of $ 1.2 million, respectively, which is reflected in "Derivative gain (loss) and other" in the Company’s consolidated statement of operations.

During 2022, the compound embedded derivative with the 2013 8.00 % Notes was extinguished;

therefore no balance remained as of December 31, 2022.

Prior to its amendment in October 2024, the 2023 Funding Agreement contained certain prepayment features that are required to be bifurcated and recorded as an embedded derivative on the Company's consolidated balance sheet with a corresponding debt discount or premium that was netted against the principal amount of the draws under the 2023 Funding Agreement.

As the Company made draws on the 2023 Funding Agreement, an associated embedded derivative was bifurcated and recorded.

The Company determined the fair value of the embedded derivatives using a discounted cash flow model.

As the discount yield and the effective interest rate of the loan fluctuated based on projected cash flows, the derivative value would be adjusted as either a liability or an asset of the Company.

During the years ended December 31, 2024 and 2023, the Company recorded a derivative loss of $ 1.3 million and a derivative gain of $ 1.6 million, respectively, which were reflected in "Other" in the Company’s consolidated statement of operations.

In connection with the amendment of the 2023 Funding Agreement in October 2024, the prepayment feature was removed and therefore no value was assigned to the previously identified embedded derivative associated with this instrument as of December 31, 2024 and the fair value of the embedded derivatives within the 2023 Funding Agreement was reduced to zero .

FAIR VALUE MEASUREMENTS

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

Derivatives for further discussion.

Derivatives to the Consolidated Financial Statements for further discussion.

Embedded Derivative within the Current Debt Repayment

The embedded derivative relating to the Current Debt Repayment is valued using a discounted cash flow model.

The most significant observable input used in the fair value measurement was the discount yield, which was 7.28 % and 7.58 % at issuance and December 31, 2024, respectively.

As the discount yield used in the valuation process increases, the fair value of the embedded derivative decreases

The significant unobservable input used in the fair value measurement included estimated timing of completing certain project milestones associated with the interest fee reduction mechanism.

As the probability of reaching the relevant milestones decreases, the fair value of the embedded derivative would also decrease.

Embedded Derivatives within the 2023 Funding Agreement

The embedded derivatives within the 2023 Funding Agreement are valued using a discounted cash flow model.

The most significant observable input used in the fair value measurement is the discount yield, which was 6.51 % at December 31, 2023.

The discount yield at issuance for the first and second draws was 8.52 % and 9.14 %, respectively.

The decrease in the discount yield as of December 31, 2023 compared to discount yield upon issuance was due primarily to the effectiveness of Thermo's guaranty of the 2023 Funding Agreement, which occurred in December 2023.

As the discount yield used in the valuation decreases, the fair value of the embedded derivative decreases.

The significant unobservable input used in the fair value measurement includes estimated timing and amounts of cash flows associated with the prepayment features within the debt agreement.

As projected cash flows increase, the fair value of the embedded derivative increases.

As of December 31, 2023, the embedded derivatives within the 2023 Funding Agreement were categorized as a Level 3 fair value and was recorded as an asset of $ 1.3 million.

Compound Embedded Derivative within the 2019 Facility Agreement

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

The most significant observable input was the discount yield.

The unobservable inputs included the probability of change of control and the estimated timing and amounts of cash flows.

As of December 31, 2022, this compound embedded derivative liability was categorized as a Level 3 fair value and was $ 0.1 million.

In 2023, the Company refinanced the remaining principal balance outstanding and wrote off the associated embedded derivative balance;

therefore, no balance remained as of December 31, 2023.

Prior to October 2024, the embedded derivatives within the 2023 Funding Agreement were valued using a discounted cash flow model.

The most significant observable input used in the fair value measurement was the discount yield.

The significant unobservable input used in the fair value measurement included estimated timing and amounts of cash flows associated with the prepayment features within the debt agreement.

As projected cash flows increased, the fair value of the embedded derivative increased.

As a result of the amendment of the 2023 Funding Agreement in October 2024, this prepayment feature was removed and consequently the embedded derivative was eliminated.

Rollforward of Recurring Level 3 Assets and Liabilities

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Balances at beginning of period $ 1,295 $ ( 122 )

Issuance of embedded derivatives within the Current Debt Repayment

Issuance of embedded derivatives within the 2023 Funding Agreement — ( 292 )

Derivative adjustment related to debt conversions — 1,148

Derivative adjustment related to extinguishment of debt — 122

Unrealized gain (loss), included in derivative gain (loss) and other 1,587 ( 805 )

Unrealized gain (loss), included in other ( 2,097 ) 1,587

Balances at end of period $ 108,799 $ 1,295

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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.

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

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.

Nonrecurring Fair Value Measurements

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

2023 Funding Agreement

As previously discussed, the Company entered into the 2023 Funding Agreement in February 2023.

Significant quantitative Level 3 inputs were utilized in the valuation model as of the draw dates.

Amounts payable under the 2023 Funding Agreement are guaranteed by Thermo.

The Company's first draw under the 2023 Funding Agreement occurred in April 2023 with a total fair value of $ 76.0 million calculated as the projected future cash flows discounted using the prevailing market rate of interest for a similar transaction.

The discount yield used for this calculation was 8.52 %.

For the fair value associated with the guarantee by Thermo, the Company recorded $ 6.9 million for this embedded feature, which was calculated as the difference in projected cash flows with and without the guarantee agreement discounted using calculated rates of 6.22 % and 8.52 %, respectively.

The Company's second draw under the 2023 Funding Agreement occurred in November 2023 with a total fair value of $ 24.3 million calculated as the projected future cash flows discounted using the prevailing market rate of interest for a similar transaction.

The discount yield used for this calculation was 9.14 %.

For the fair value associated with the guarantee by Thermo, the Company recorded $ 2.0 million for this embedded feature, which was calculated as the difference in projected cash flows with and without the guarantee agreement discounted using calculated rates of 6.72 % and 9.14 %, respectively.

Current Debt Repayment

As previously discussed, the Company received the Current Debt Repayment in October 2024.

Significant quantitative Level 3 inputs were utilized in the valuation model as of the issuance date in November 2024 for both the fair value of the debt as well as the fair value of the embedded derivative.

At issuance, the fair value of the Current Debt Repayment was $ 331.2 million and the fair value of the embedded derivative within the Current Debt Repayment was $ 109.6 million.

The fair value of the derivative was calculated using projected future cash flows discounted using the prevailing market rate of interest and discount yield.

The cash flows were calculated based on the estimated timing of completing certain project milestones associated with the fee reduction mechanism.

2023 Funding Agreement

In connection with the re-characterization of the 2021 Funding Agreement from deferred revenue to debt, the Company recorded the fair value of the debt calculated as the projected cash flows discounted using the prevailing market rate of interest for a similar transaction.

The Company's February 2024 draw on the 2023 Funding Agreement had a fair value of $ 37.2 million and was calculated using projected future cash flows discounted using the prevailing market rate of interest for a similar transaction.

The discount yield used for this calculation was 6.46 %.

The total fair value of the 2021 Funding

Agreement was $ 76.3 million and was recorded on the Company's consolidated balance sheet during the second quarter of 2023 when the amendment was effective.

License Agreement

In connection with the License Agreement discussed in Note 2:

License Agreement, the consideration paid was in the form of Globalstar common stock.

Approximately 41.8 million shares were not subject to legal trading restrictions and were valued using the low stock price on the transaction date, which was $ 1.23 per share.

The total fair value of these shares was $ 51.4 million on the transaction date.

The remaining shares, totaling 18.8 million, were subject to legal trading restrictions and were valued using a Black-Scholes pricing model on the transaction date.

The total fair value of these shares was $ 19.0 million and computed using the following assumptions on the transaction date:

Underlying Stock Price and

Exercise Price

Risk-Free Interest Rate

Fair Value of Consideration

$ 1.13 0.5 74.5 % 5.52 %

Warrants Issued in Connection with the Thermo Guaranty

As discussed in Note 6:

Long-Term Debt and Other Financing Arrangements and Note 12:

Related Party Transactions, the Company issued to Thermo a warrant to purchase 10.0 million shares of the Company’s common stock.

The fair value of 5.0 million of the warrants, which is the portion that vested immediately on the effective date of the agreement, was estimated using the Black-Scholes option pricing model with the following assumptions on the valuation date of December 7, 2023.

Number of warrants (in millions)

Grant date December 7, 2023

Exercise price $ 2.00

Expected term (years) 5

Risk-free interest rate 4.11 %

Volatility 92.14 %

Black-Scholes fair value per share $ 1.00

Total fair value (in millions)

The fair value of the warrants that vest if and when Thermo advances aggregate funds of $ 25.0 million or more to the Company was assigned a fair value of zero based on the low probability of the need for the funding over the term of the 2023 Funding Agreement.

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 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.

Satellite Procurement Agreement and Launch Services Agreement

In February 2022, the Company entered into a satellite procurement agreement with MDA pursuant to which Globalstar 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.

Updated Services Agreements

The Updated Services Agreements set forth the primary terms for the Company to provide expanded services to the Customer and incur costs related to the Extended MSS Network, which is primarily the construction of new gateways and upgrade of existing gateways as well as new satellite construction and launch services.

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

These agreements also provide for various commitments with which the Company must comply.

Satellite Procurement 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 $ 329.3 million for the initial 17 satellites, with delivery expected to occur in 2025.

In addition, MDA will procure a satellite operations control center for $ 5.0 million as well as other equipment for $ 4.2 million.

As more fully described in our Current Report on Form 8-K filed with the Commission on August 31, 2023, in August 2023, the Company entered into a Launch Services Agreement by and between the Company and Space Exploration Technologies Corp.

(“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.

In February 2025, the Company entered into another agreement with MDA pursuant to which the Company will acquire more than 50 satellites related to the Extended MSS Network.

The total contract price for these satellites is $ 775.0 million.

Launch Services Agreement

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.

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

In October 2024, the Company entered into another agreement with SpaceX for the launch of satellites pursuant to the Extended MSS Network.

Funding for Phase 2 Service Period Asset Procurement

Under the Service Agreements, subject to certain terms and conditions, the Company expects to receive payments equal to 95 % of the approved capital expenditures under the satellite procurement agreement for the HIBLEO-4 satellites and Launch Services Agreements for such satellites (to be paid on a straight-line basis over the design life of the satellites) beginning with the commencement of the Phase 2 Service Period.

The Phase 2 Service Period is expected to begin when the new satellites are successfully utilized to provide Services.

Funding for Extended MSS Network Asset Procurement

As discussed in more detail in Note 2:

Special Purpose Entity, the Updated Services Agreements provide for prepayments from the Customer for approved capital expenditures associated with the Extended MSS Network.

As of December 31, 2024, the Company has outstanding purchase orders for this project totaling $ 290 million to vendors for various satellite and ground components of the Extended MSS Network, which are expected to be paid with funds from the Infrastructure Prepayment and sale of the Customer Class B Units.

These costs will continue until the construction period is complete and the commencement of Services provided over the Extended MSS Network.

Inventory Purchase Commitments

The Company has inventory purchase commitments with its third party product manufacturers in the normal course of business.

These commitments are generally noncancelable and the order quantities are based on sales forecasts.

These commitments are generally noncancellable and the order quantities are based on sales forecasts.

The Company estimates that its open inventory purchase commitments as of December 31, 2024 were approximately $ 4.7 million.

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Accrued customer liabilities and deposits 3,600 4,284

Accrued professional and other service provider fees 2,010 1,190

Accrued inventory 1,210 874

Short-term lease liability 4,251 3,004

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Total accrued expenses $ 24,700 $ 26,958

Accrued interest includes interest associated with the cash portion of the 13 % Notes due in March 2024.

Accrued interest as of December 31, 2023 included interest associated with the cash portion of the 13 % Notes, which was refinanced in November 2024.

Other accrued expenses include primarily vendor services, warranty reserve and occupancy costs.

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Asset retirement obligations (Note 1) $ 2,903 $ 2,951

Accrued interest 7,429 —

Compound embedded derivative with the 2019 Facility Agreement (Note 8 and Note 9) — 122

Accrued interest (Note 7)

Deferred tax liability (Note 13) 711 329

Foreign tax contingencies 1,847 503

Customer Class B Units Redemption (Note 2)

Total other non-current liabilities $ 418,620 $ 11,265

Accrued interest includes interest associated with the PIK portion of the 13 % Notes and the 2023 Funding Agreement.

Foreign tax contingencies reflect primarily amounts owed by the Company's Brazilian subsidiary pursuant to refinancing programs in country.

As of December 31, 2024, accrued interest includes fees on the outstanding balance under the 2023 Funding Agreement.

As of December 31, 2023, accrued interest included primarily interest associated with the PIK portion of the 13 % Notes, which was fully repaid in November 2024.

Foreign tax contingencies include primarily uncertain tax position liabilities associated with the Company's Canadian subsidiary.

RELATED PARTY TRANSACTIONS

Transactions with Thermo

Thermo is the principal owner and largest stockholder of Globalstar.

The Company's Executive Chairman of the Board controls Thermo.

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

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 $ 0.4 million and $ 0.5 million as of December 31, 2024 and 2023, respectively.

Transactions with Thermo

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

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i) non-cash expenses, such as stock compensation costs as well as costs recorded as a contribution to capital, and ii) expenses incurred by Thermo on behalf of the Company that are charged to the Company;

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

Lease Agreement

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

Lease Agreement and Land Purchase

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

Annual lease payments increase at a rate of 2.5 % per year.

2023 lease payments were $ 1.6 million.

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

During each of the twelve months ended December 31, 2023, 2022 and 2021, the Company incurred lease expense of $ 1.6 million, respectively, associated with this lease agreement.

Lease payments made to Thermo were $ 1.6 million during 2024.

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

During each of the twelve months ended December 31, 2024, 2023 and 2022, the Company incurred lease expense of $ 1.6 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.

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

Perpetual Preferred Stock

Thermo's ownership 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.

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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

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

Thermo has agreed to provide support of certain of the Company’s obligations under the 2023 Funding Agreement.

This guarantee agreement received shareholder approval in June 2023 and became effective in December 2023.

As consideration for Thermo's guarantee, the Company has 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.

Upon effectiveness of Thermo's guarantee, the Company recorded the fair value of the vested warrants, which was accounted for as a credit enhancement for the guarantee and totaled $ 5.0 million at issuance, to additional paid-in-capital on the Company's consolidated balance sheet.

with an offset to "Loss on equity issuance" on the Company's consolidated statement of operations.

The second tranche of warrants, which vests if and when Thermo advances aggregate funds of $ 25.0 million, was assigned a fair value of zero based on the Company's future cash flows and the low probability of the need for funding from Thermo as required under the 2023 Funding Agreement.

The Company will reassess the probably of vesting at each reporting period and, if the probability of vesting increases, it will record the fair value as a liability pursuant to applicable accounting guidance with an offsetting expense to derivative gain or loss in that period.

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.

Refer to Note 9:

Fair Value Measurements for further discussion on the fair value of the vested warrants issued to Thermo.

License Agreement

In connection with the XCOM transaction, a portion of the Stock Consideration was resold by XCOM to certain long-term investors of Globalstar and XCOM (the “Resale Purchasers”), including Thermo, in private resale transactions exempt from registration under the Securities Act.

Together with shares it received for release of debt owed to it by Licensor, Thermo acquired 4.2 million total shares.

In connection with the Service Agreements, the 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 the 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.

Certain amounts payable by the Company in connection with the 2023 Funding Agreement and certain other obligations under the Updated Services Agreements are guaranteed by Thermo.

As consideration for Thermo's guarantee, the Company issued to Thermo a warrant to purchase 667,000 shares ( 10 million shares prior to the reverse stock split) of the Company’s common stock at an exercise price equal to $ 30.00 per share (as calculated pursuant to the agreement) ($ 2.00 per share prior to the reverse stock split).

The right to purchase 333,000 shares under the warrant ( 5.0 million shares prior to the reverse stock split) vested immediately upon effectiveness of Thermo's guarantee, which occurred in December 2023, and the right to purchase the remaining 333,000 shares under the warrant ( 5.0 million shares prior to the reverse stock split) may 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.

The warrant expires in December 2028.

Upon effectiveness of Thermo's guarantee, the Company recorded the fair value of the right to purchase shares of our common stock pursuant to the warrant, which was accounted for as a credit enhancement for the guarantee and totaled $ 5.0 million at issuance, to additional paid-in-capital on the Company's consolidated balance sheet with an offset to "Loss on equity issuance" on the Company's consolidated statement of operations.

The right to purchase the remaining 333,000 shares under the warrant, which may vest if and when Thermo advances aggregate funds of $ 25.0 million, was assigned a fair value of zero based on the Company's future cash flows and the low probability of the need for funding from Thermo as required under the 2023 Funding Agreement.

The Company will reassess the probability of vesting at each reporting period and, if the probability of vesting increases, it will record the fair value as a liability pursuant to applicable accounting guidance.

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.

To the extent permitted by applicable law, the Strategic Review Committee has exclusive responsibility for the oversight, review and approval of, among other things and subject to certain exceptions, any acquisition by Thermo and its affiliates of additional newly-issued securities of the Company and any transaction between the Company and Thermo and its affiliates with a value in excess of $ 250,000 .

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

Agreements with XCOM Labs, Inc.

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 Company's August 2023 License Agreement with Virewirx, Globalstar issued 4.0 million shares ( 60.6 million shares prior to the reverse stock split) of its common stock, representing a transaction value of approximately $ 68.7 million, to XCOM.

Of the consideration paid for the License Agreement, 1.1 million shares ( 16.7 million shares prior to the reverse stock split) were issued to Dr.

The Company and XCOM have 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.

In August 2023 and June 2024, Globalstar issued 0.7 million shares ( 10.5 million shares prior to the reverse stock split) and 0.5 million shares ( 7.7 million shares prior to the reverse stock split), respectively, to Virewirx as payment for costs incurred under the SSA and the release of holdback shares under the License Agreement.

In June 2024, Virewirx sold 0.3 million shares ( 4.5 million prior to the reverse stock split) of the total shares issued in June 2024 in a private placement transaction to an affiliate of the Thermo Companies.

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 components of income tax expense (benefit) were as follows (in thousands):

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The components of net deferred income tax assets (liabilities) were as follows (in thousands):

Federal and foreign NOL and credit carryforwards $ 467,282 $ 479,884

Property and equipment and other long-term assets ( 60,697 ) ( 77,925 )

Deferred tax assets

Operating loss and credit carryforwards $ 436,670 $ 464,522

Deferred revenue 17,242 28,147

Reserves and disallowed interest 3,081 8,919

Accruals and reserves 1,721 1,298

Stock-based compensation expense 3,502 2,760

Lease liabilities 5,408 3,588

Interest and interest carryforwards 4,972 1,363

Other deferred tax assets 1,064 —

Deferred tax assets before valuation allowance 470,579 501,678

Valuation allowance ( 421,883 ) ( 438,142 )

Net deferred income tax liability $ ( 329 ) $ ( 296 )

The deferred revenue tax asset in the table above is related to a portion of the prepayments made under the Service Agreements (see Note 3:

Total deferred tax assets

48,696 63,536

Deferred tax liabilities

Property and equipment ( 42,913 ) ( 62,373 )

Right-of-use assets

( 5,768 ) ( 754 )

Intangibles ( 606 ) ( 738 )

Other deferred tax liabilities ( 120 ) —

Total deferred tax liabilities

( 49,407 ) ( 63,865 )

Deferred income tax liability $ ( 711 ) $ ( 329 )

The deferred revenue tax asset in the table above is related to a portion of the prepayments made under the Updated Services Agreements (see Note 3:

Revenue to our Consolidated Financial Statements for further discussion).

The change in the valuation allowance during 2023 of $ 1.2 million was due to depreciation driven to the difference between tax and book depreciable lives.

Due to the limitation on utilization of state NOLs, the Company recorded deferred tax liabilities of $ 0.3 million as of both December 31, 2023 and 2022.

In an effort to provide additional detail and transparency of the deferred tax assets and liabilities, the Company reclassified certain deferred items for the prior period.

The change in the valuation allowance during 2024 of $ 16.3 million was due primarily to uncertain tax positions, which reduced deferred tax assets related to NOL carryforwards, the current year NOL utilization, and changes in foreign currency exchange rates.

The Company recorded deferred tax liabilities of $ 0.7 million as of December 31, 2024 and $ 0.3 million as of December 31, 2023 related to the limitation on utilization of state NOLs and federal deferred tax assets surrounding the Company’s indefinite lived intangible assets.

The actual provision for income taxes differs from the statutory U.S.

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Withholding tax 421 502 —

Uncertain tax positions

Other 52 ( 7 ) ( 105 )

Total $ 2,135 $ 1,123 $ 73

Uncertain Income Tax Positions

The Company is subject to income taxes in U.S.

and foreign jurisdictions and it may recognize uncertain income tax positions if it is more likely than not that the position would be sustained by the relevant taxing authority.

The Company will recognize interest and penalties related to tax positions in income tax expense.

The following table presents a reconciliation of the Company’s beginning and ending balances of unrecognized tax benefits for the periods indicated (in thousands):

Gross unrecognized tax benefits at January 1, 2024 $ —

Increases related to tax positions of prior years 14,067

Gross unrecognized tax benefits at December 31, 2024 $ 14,067

The table above does not include accrued interest and penalties of $ 1.2 million as of December 31, 2024.

As of December 31, 2023 and 2022, there were no unrecognized uncertain income tax positions.

The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is zero for the years ended December 31, 2024, 2023 and 2022.

Further discussion is below regarding the Company's uncertain income tax positions associated with the Company's Canadian subsidiary.

The Company operates in various U.S.

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It may also become subject to additional tax liabilities as a result of changes in tax laws, which could in certain circumstances have a retroactive effect.

The Company's Canadian subsidiary is under audit for multiple tax years.

The Company is working with the Canada Revenue Agency ("CRA") to complete the audits.

The CRA has completed its audit for the years ended October 31, 2016 and 2017 and assessed the Company for additional tax liabilities, which the Company is appealing.

The Company's NOL in Canada would largely offset this tax liability to the extent that the Company is unsuccessful in its appeal.

The years ended October 31, 2018 through December 31, 2022 remain under examination.

Except for the audit noted above, neither the Company nor any of its subsidiaries is currently under audit by the IRS or by any state income tax jurisdiction in the United States.

The Company nor any of its subsidiaries are currently under audit by the IRS.

The Company's corporate U.S.

tax returns for 2021 and subsequent years remain subject to examination by tax authorities.

The Company is currently under income tax audits in various U.S.

State income tax returns are generally subject to examination for a period of three to five years after filing of the respective return.

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In the Company's international tax jurisdictions, numerous tax years remain subject to examination by tax authorities, including tax returns for 2015 and subsequent years in most of the Company's international tax jurisdictions.

There are no unrecognized tax benefits as of December 31, 2023 and 2022.

Canadian Tax Audits

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

The Company is working with the Canada Revenue Agency ("CRA") to complete the audits.

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

The tax years 2019 through 2022 remain under examination.

The Company's 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 2024, the Company recorded $ 1.0 million of expense for uncertain tax positions associated with interest on withholding tax.

As of December 31, 2024, the Company recorded $ 4.5 million in long-term tax receivables, $ 2.3 million in current uncertain tax position liabilities and $ 1.5 million in long-term uncertain tax position liabilities on its consolidated balance sheet associated with potential taxes, penalties and interest.

As of December 31, 2024, the Company had not provided foreign withholding taxes on approximately $ 5.3 million of undistributed earnings from certain foreign subsidiaries indefinitely invested outside the U.S.

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The Company elected to account for GILTI tax in the period in which it is incurred and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements for the years ended December 31, 2024 and 2023.

As of December 31, 2023 and 2022, the Company recorded a value added tax ("VAT") recoverable, of which the short term portion is included in prepaid and other current assets on its consolidated balance sheet totaling $ 2.2 million and $ 1.7 million,

respectively, and the long-term portion is included in intangible and other assets, net, on its consolidated balance sheet totaling $ 2.3 million and $ 3.1 million, respectively.

As of December 31, 2024 and 2023, the Company recorded a value added tax ("VAT") recoverable, of which the short term portion is included in prepaid and other current assets on its consolidated balance sheet totaling $ 2.5 million and $ 2.2 million, respectively, and the long-term portion is included in intangible and other assets, net, on its consolidated balance sheet totaling $ 1.8 million and $ 2.3 million, respectively.

This VAT recoverable is related primarily to certain payments for the purchase and importation of gateway equipment in various international jurisdictions in connection with the Company's network upgrade work.

LOSS PER SHARE

The following table sets forth the calculation of basic and diluted loss per share and reconciles basic weighted average shares to diluted weighted average shares of common stock outstanding for the periods indicated (in thousands):

The following table sets forth the computation of basic and diluted loss per common share for the periods indicated (in thousands).

The number of shares have been restated to reflect the 1:15 reverse stock split effectuated on February 10, 2025.

All historical share and per share amounts reflected in this Report have been adjusted to reflect the reverse stock split.

Refer to Note 17:

Common Stock for further discussion.

Year ended December 31,

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Diluted $ ( 0.59 ) $ ( 0.29 ) $ ( 2.15 )

For the years ended December 31, 2023, 2022 and 2021, 18.8 million shares, 7.7 million shares and 10.1 million shares, respectively, of potential common stock were excluded from diluted shares outstanding because the effects of potentially dilutive securities would be anti-dilutive.

Included in these shares as of December 31, 2023 and 2022 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 consideration of the exercise price of the warrants relative to the average market price during the period.

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

these 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.

As discussed in Note 6:

Long-Term Debt and Other Financing Arrangements, the Company's Board of Directors approved the payment of dividends totaling $ 10.6 million and $ 1.3 million, respectively, for the twelve months ended December 31, 2023 and 2022 on its Series A Preferred Stock.

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

For the years ended December 31, 2024, 2023 and 2022, 1.3 million shares, 1.3 million shares and 0.5 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 3.3 million shares ( 49.1 million shares prior to the reverse stock split) that may be purchased by the Customer pursuant to the warrants issued under the Updated Services Agreements in 2022 based on the treasury stock method.

During 2023, the right to purchase 0.3 million shares of common stock vested pursuant to the warrant ( 5.0 million shares prior to the reverse stock split) issued to Thermo for its guarantee of the 2023 Funding Agreement;

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

Also excluded from the amounts above are 0.3 million shares ( 5.0 million shares prior to the reverse stock split) that may be purchased by Thermo pursuant to the warrant issued in connection with its guarantee of the 2023 Funding Agreement;

the right to purchase these shares vests only if 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.

STOCK COMPENSATION

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At the time of grant, the Company takes into consideration the timing of the stock based award and evaluates for conditions that could result in the award to be considered spring loaded.

As of December 31, 2023 and 2022, the number of shares of common stock that was authorized and remained available for issuance under the Equity Plan was 20.6 million and 9.8 million, respectively.

Stock Options

The Company has granted incentive stock options under the Equity Plan.

These options have various vesting terms, but generally vest in equal installments over three years and expire in ten years .

The Company recognizes compensation expense for stock option grants over the Eligible Participants' requisite service period, which is generally based on the vesting period and the fair value at the date of grant using the Black-Scholes option pricing model.

The table below summarizes the assumptions for the indicated periods:

Year Ended December 31,

2023 2022 2021

Risk-free interest rate 3.9 % 1.4 % 0.4 %

Expected term of options (years) 5 5 5

Volatility 65 % 100 % 62 %

Weighted average grant-date fair value per share $ 0.73 $ 0.86 $ 0.17

The following table represents the Company’s stock option activity for the year ended December 31, 2023:

Shares Weighted Average

Exercise Price

Outstanding at January 1, 2023

8,099,885 $ 1.29

Granted 800,000 1.27

Exercised ( 61,484 ) 0.70

Forfeited or expired ( 554,400 ) 1.99

Outstanding at December 31, 2023

8,284,001 1.24

Exercisable at December 31, 2023

6,736,494 $ 1.26

The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option.

For the years ended December 31, 2023, 2022 and 2021, the total intrinsic value of all stock options exercised was less than $ 0.1 million, $ 0.4 million and $ 0.7 million, respectively.

The aggregate intrinsic value of all outstanding stock options at December 31, 2023 was $ 6.9 million with a remaining contractual life of 5.3 years.

The aggregate intrinsic value of all vested stock options that were exercisable at December 31, 2023 was $ 5.7 million based on a per grant calculation with a remaining contractual life of 4.7 years.

Net cash proceeds during the year ended December 31, 2023 from the exercise of stock options was less than $ 0.1 million.

For each of the years ended December 31, 2023, 2022 and 2021, the Company recognized $ 0.5 million of compensation expense related to stock options.

As of December 31, 2023, unrecognized compensation expense related to non-vested stock options outstanding was approximately $ 0.6 million to be recognized over a weighted-average period of 1.6 years.

The number of shares have been restated to reflect the 1:15 reverse stock split effectuated on February 10, 2025.

All historical share and per share amounts reflected in this Report have been adjusted to reflect the reverse stock split.

Refer to Note 17:

Common Stock for further discussion.

As of December 31, 2024 and 2023, the number of shares of common stock that was authorized and remained available for issuance under the Equity Plan was 3.4 million and 1.4 million, respectively ( 51.7 million and 20.6 million, respectively prior to the reverse stock split).

During 2024, the Company's Board of Directors approved an increase to the Equity Plan reserve totaling 2.5 million shares ( 37.6 million shares prior to the reverse stock split).

Restricted Stock

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438,101 $ 24.96

Included in the vested balance during the year ended December 31, 2023 were approximately 3.4 million performance-based restricted stock awards that vested upon the achievement of certain milestones during the year.

For the years ended December 31, 2024, 2023 and 2022, the Company recognized $ 11.6 million, $ 13.1 million and $ 10.4 million, respectively, of compensation expense related to restricted stock awards.

The increase in compensation expense during 2023 was driven primarily by performance grants to certain employees associated with their efforts under the Service Agreements as well as other performance criteria.

The total fair value, as calculated on the day of vesting, of restricted stock awards that vested during 2024, 2023 and 2022 was $ 13.1 million, $ 11.6 million, and $ 14.6 million, respectively.

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Market-Based Restricted Stock Units

During 2023, the Company granted 44.5 million restricted stock units ("RSUs") to certain executives which are earned over a four-year performance period.

The RSUs vest upon the Company's common stock trading at various price levels throughout the performance period.

The RSUs were valued using a Monte Carlo simulation model.

As of the grant date, September 25, 2023, the fair value of the RSUs was $ 39.5 million.

This total fair value will be recognized over the derived service period, estimated to be 2.6 years.

During 2024 and 2023, the Company granted restricted stock units ("RSUs") totaling 62.9 thousand and 3.0 million, respectively, which may be earned over a four-year performance period.

All of the market-based RSUs vest upon the Company's common stock trading at various price levels throughout the performance period.

Market-based RSUs are valued using a Monte Carlo simulation model.

The 2024 market-based RSUs were granted in October 2024 with a fair value of

$ 0.6 million, which will be recognized over the derived service period, estimated to be 2.5 years.

The Monte Carlo simulation was computed using the following assumptions:

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4.04 % 65.00 % $ 15.90

For the year ended December 31, 2023, the Company recognized $ 6.7 million of compensation cost related to these awards.

As of December 31, 2023, unrecognized compensation expense related to unvested market-based RSUs was approximately $ 32.8 million to be recognized over a weighted-average period of 1.5 years.

For the year ended December 31, 2024 and 2023, the Company recognized $ 23.4 million and $ 6.7 million, respectively, of compensation cost related to these awards.

As of December 31, 2024, unrecognized compensation expense related to unvested market-based RSUs was approximately $ 10.0 million to be recognized over a weighted-average derived service period of 0.8 years.

No market-based RSUs vested, expired or were forfeited during 2024.

Performance-Based Restricted Stock Units

During 2024, the Company granted 94.3 thousand performance-based RSUs, which are earned over a four-year period.

The total fair value of the performance-based RSUs were valued using the stock price on the grant date, totaling $ 1.5 million.

For the year ended December 31, 2024, the Company recognized $ 0.1 million of compensation cost related to these awards.

As of December 31, 2024, unrecognized compensation expense related to unvested performance-based RSUs was approximately $ 1.4 million to be recognized over a weighted-average period of 3.5 years.

No performance-based RSUs vested, expired or were forfeited during 2024.

Key Employee Bonus Plan

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For the 2024 Plan Year, the Company's adjusted EBITDA performance was within the bonus payout threshold according to the plan document.

As of December 31, 2023, $ 2.5 million was accrued on the Company's consolidated balance sheet related to this bonus payment, which is expected to be made in the form of common stock during the first quarter of 2024.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan (the “Plan”) which provides eligible employees of the Company with an opportunity to acquire shares of its common stock at a discount.

As of December 31, 2023, the maximum aggregate number of shares of common stock that may be purchased through the Plan was 20.0 million shares (subject to adjustment as allowed in the Plan) and the Company has issued approximately 13.6 million shares.

For 2023 and 2022, the Company received $ 0.9 million and $ 0.7 million, respectively, in proceeds related to shares issued under the Plan.

For each of the years ended December 31, 2023, 2022 and 2021, the Company recorded compensation expense of approximately $ 0.4 million, which is reflected in marketing, general and administrative expenses.

The fair value of the employees’ stock purchase rights granted under the ESPP is estimated using the Black-Scholes option pricing model.

As of December 31, 2024, $ 2.7 million was accrued on the Company's consolidated balance sheet related to this bonus payment, which is expected to be paid in a mix of cash and common stock during the first quarter of 2025.

SEGMENT REPORTING

An operating segment is defined as a component of an enterprise which has discrete financial information that is evaluated regularly by the Company’s Chief Operating Decision Maker ("CODM") to decide how to allocate resources and assess performance.

In accordance with ASC 280, Segment Reporting , the Company’s only reportable segment is its MSS business.

The Company's Chief Executive Officer, Dr.

Jacobs, is the Company's CODM.

Jacobs manages the consolidated entity and uses net income (loss) as the measure of profit or loss to assess segment performance and allocate resources.

Jacobs does not review total assets.

Jacobs reviews revenue and certain operating expenses to determine resource allocations.

Revenue is reviewed at a disaggregated level, consistent with the Company’s disclosures in Note 3:

Expenses are reviewed by the nature of the cost (Cost of Services, Marketing, General and Administrative and Cost of Subscriber Equipment Sales), consistent with the Company’s presentation on its Consolidated Statements of Operations.

Other operating segment expenses primarily include stock-based compensation, depreciation, amortization and accretion, the reduction in the value of assets and inventory, interest income and expense, foreign currency gains and losses, gains and losses on extinguishment of debt as well as other smaller items.

On December 17, 2024, by written consent, following the approval and recommendation of the board of directors and its Strategic Review Committee, Thermo, which collectively owns a majority of the Company's issued and outstanding shares of common stock, approved proposals to amend the Company's certificate of incorporation to (i) conduct a reverse stock split of its issued and outstanding shares of common stock at a ratio between 1 for 10 and 1 for 25, and (ii) reduce the authorized number of shares of common stock that the Company can issue in proportion to the reverse stock split.

Effective following the close of trading on February 10, 2025, the Company voluntarily withdrew the listing of its common stock from the NYSE American, effected the reverse stock split at a ratio of 1 to 15 shares of common stock and amended its certificate of incorporation to reduce the number of authorized shares of common stock that it may issue from 2,150,000,000 shares to 143,333,334 shares of common stock.

Effective at the start of trading on February 11, 2025, the Company's common

stock began trading on a post-split basis under the symbol “GSAT” on the Nasdaq Stock Market LLC.

The number of shares of common stock outstanding was reduced from 1,896,635,805 to 126,442,583 .

No fractional shares were issued as a result of the reverse stock split and it did not impact the par value of the Company's common stock.

Any fractional shares that would otherwise have resulted from the reverse stock split were rounded up to the next whole share, except that any fractional shares resulting from the reverse stock split for any outstanding awards adjustments pursuant to the terms and conditions of the Company's 2006 Equity Incentive Plan and the award or agreement governing such awards were rounded down to the next whole share.

Neither the reverse stock split nor the related amendments to the Company's certificate of incorporation had any impact on the number of shares of preferred stock it is authorized to issue under its certificate of incorporation or the number of issued and outstanding shares of its Series A Preferred Stock.

All shares of common stock, warrants, stock-based compensation awards and per share amounts included in the Consolidated Financial Statements and applicable notes thereto in Part II, Item 8 of this Report and elsewhere in this Report have been retrospectively restated to reflect the effect of the reverse stock split and related amendments to our certificate of incorporation.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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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 8. Financial Statements and Supplementary Data