What changed in this filing

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Item 1A. Risk Factors

2023-02-16 compared with 2022-02-17 · 93 added, 109 removed, 380 unchanged (35% of the section changed)

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Any system failures, repeated product failures or shortened product life, or extended reduced levels of service could reduce our sales, increase costs, or result in warranty or liability claims or litigation, cause us to extend our warranty period, and seriously harm our business.

We do not maintain in-orbit satellite insurance for our satellites, as a result of which we may be subject to increased costs.

We do not maintain in-orbit satellite insurance for our satellites, and do not plan to insure the launch of our remaining spare satellites, as a result of which we may be subject to increased costs.

We obtained insurance for our satellites covering launch and in-orbit failures of our satellites for a period of twelve months from the date of launch.

All of our satellites were launched more than twelve months ago, and we have no plans to purchase further in-orbit insurance.

As a result, a failure of one or more of our satellites, or the occurrence of equipment failures and other related problems, would constitute an uninsured loss and could harm our financial condition.

We also do not plan to purchase launch insurance for the planned launch of our remaining spare satellites.

As a result, a failure of one or more of our satellites, the occurrence of equipment failures and other related problems, or a failure of the planned launch of our spare satellites would constitute an uninsured loss and could harm our financial condition.

Our satellites have a limited life and may fail prematurely, which could cause our network to be compromised and materially and adversely affect our business, prospects and profitability, or cause us to incur additional expense to launch replacement satellites.

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

Further, a large number of such failures could shorten the expected life of our constellation, which would increase our depreciation expense, or require us to launch our ground spare satellites or even replace our constellation sooner than currently planned, either of which would increase our projected capital expenditures.

Further, a large number of such failures could shorten the

expected life of our constellation, which would increase our depreciation expense, or require us to launch our ground spare satellites or even replace our constellation sooner than currently planned, either of which would increase our projected capital expenditures.

If operations at our commercial gateways or operations center were to be disrupted, we may experience interruptions in our ability to provide service to our customers.

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We may be required to expend significant resources to respond to, contain, remediate, and protect against these attacks and threats, including compliance with applicable data breach and security laws and regulations, and to alleviate problems, including reputational harm and litigation, caused by these security incidents.

In addition, in the event of such a security incident, our customer contracts may not adequately protect us against liability to third parties with whom our customers conduct business.

in the event of such a security incident, our customer contracts may not adequately protect us against liability to third parties with whom our customers conduct business.

Although we have implemented and intend to continue to implement security measures, these measures may prove to be inadequate.

These security incidents could have a significant effect on our systems,

devices and services, including system failures and delays that could limit network availability, which could harm our business and our reputation and result in substantial liability.

These security incidents could have a significant effect on our systems, devices and services, including system failures and delays that could limit network availability, which could harm our business and our reputation and result in substantial liability.

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

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Risks related to our business operations

Our business has been negatively affected by the COVID-19 pandemic, actions taken to mitigate the pandemic, and economic disruptions that have resulted, but we are unable to predict the full extent or nature of these impacts at this time.

In March 2020, in response to the COVID-19 pandemic, we began conducting business with remote work for most employees and have now moved to a hybrid model.

The pandemic and the steps taken to respond have also caused substantial domestic and global economic disruption, including similar restrictions on activity among our distributors, which has led to reduced sales and has limited our distributors’ ability to install or service our products.

These limitations may continue for the duration of these pandemic-related restrictions, and we or our distributors may take additional actions to respond as the situation evolves.

Further, the course of the pandemic is uncertain, and financial markets have experienced significant levels of volatility and uncertainty, which may continue.

These disruptions could have an adverse effect on consumer and commercial spending and negatively affect demand for our and our distributors’ products and services, particularly in markets such as aviation and recreation.

This, in turn, could negatively affect the value of our current agreements with our distributors and their willingness to enter into or renew contracts with us.

The pandemic has also negatively affected the payment of accounts receivable and collections.

For example, one of our distributors sought protection in bankruptcy, reducing the amount we received from them for past services.

If additional distributors seek protection in bankruptcy, it could further harm our cash flows and results of operations.

Finally, factors related to the pandemic, including changing work environments, concerns over safety, reluctance to obtain vaccines, and changing economic conditions, have caused an increase in employee resignations across many industries and companies, including ours.

Other effects of the COVID-19 pandemic and the effects of the modifications we and others have made in response are difficult to assess or predict with certainty at this time but may include risks to the stability of our employee base, a decline in the market price of our common stock, a prolonged economic downturn, and deterioration of the economy and consumer and commercial spending, any of which could further adversely affect our business, results of operations and financial condition in 2022 and beyond.

Aireon, our primary hosted payload customer, has been negatively affected by reduced air traffic as a result of the COVID-19 pandemic, which could reduce or eliminate the value of our agreements with, and ownership interest in, Aireon.

Aireon is our primary hosted payload customer, and we expect annual revenue to us from Aireon hosting, data services and power fees to be approximately $39.5 million.

In addition, if and when funds are available following a planned refinancing of its credit facility, Aireon’s parent company, Aireon Holdings, is required to redeem a portion of our ownership interest for a payment of $120.0 million, and we would then retain a common ownership interest of approximately 22% in Aireon Holdings.

Based on Aireon’s business plan and restrictions under Aireon’s debt facility, we do not expect this redemption of our ownership interest to occur for several years.

Aireon provides air traffic surveillance services to ANSPs around the world, as well as other offerings based on its collection of air traffic surveillance data.

The COVID-19 pandemic has resulted in substantially reduced air traffic worldwide, and it is uncertain when air traffic volumes will recover.

A portion of Aireon’s customers pay them on a per-flight-hour basis, and even those customers with fixed-fee arrangements may seek to renegotiate their fees in the face of dramatically reduced air traffic.

Further, Aireon’s business model requires expansion of its customer base to achieve its projected financial results, which may be substantially more difficult until air traffic volumes recover.

While our fee arrangements with Aireon do not depend on traffic volumes, if Aireon’s revenues are substantially reduced, they may not be able to pay us the contractually required hosting, data services and power fees in a timely manner or at all.

Further, Aireon may need to seek additional financing.

Any sale of equity securities by Aireon would dilute our ownership if and to the extent that we do not invest additional funds to maintain our proportional ownership interest.

If additional funding is not available, Aireon may default on its credit facility, which could result in the loss or reduction in value of our investment in Aireon, or be forced out of business, in which case we would not receive any further hosting, data or power fees, or the expected $120.0 million redemption payment, and we would lose the fair value of our retained investment in Aireon Holdings.

Our business plan depends on increased demand for mobile satellite services, among other factors.

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• our ability to maintain our relationship with U.S.

government customers, particularly the Department of Defense;

government customers, particularly the DoD;

• the ability of our distributors to market and distribute our products, services and applications effectively and their continued development of innovative and improved solutions and applications for our products and services;

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Our agreements with U.S.

government customers, particularly the Department of Defense, which represent a significant portion of our revenue, are subject to termination and renewal.

government, through a dedicated gateway owned and operated by the Department of Defense, has been and continues to be, directly and indirectly, our largest customer, representing 21% and 22% of our revenue for the years ended December 31, 2021 and 2020, respectively.

We provide the majority of our services to the U.S.

government pursuant to our GMSS and EMSS contracts.

We entered into these contracts in April 2019 and September 2019, respectively.

The GMSS contract provides for a six-month base term and up to four one-year options exercisable at the election of the U.S.

government, two of which have been exercised so far, and the EMSS contract provides for a term until September 2026 with a fixed, annual rate to provide specified satellite airtime services for an unlimited number of U.S.

Department of Defense and other federal government subscribers .

government customers, particularly the DoD, which represent a significant portion of our revenue, are subject to termination and renewal.

government, through a dedicated gateway owned and operated by the DoD, has been and continues to be, directly and indirectly, our largest customer, representing 21% of our revenue for each of the years ended December 31, 2022 and 2021.

provide the majority of our services to the U.S.

government pursuant to our GMSS, EMSS, and SDA contracts.

We entered into these contracts in April 2019, September 2019, and June 2022, respectively.

The GMSS contract continues through September 2023, the EMSS contract continues through September 2026, and the SDA contract provides for a two and a half year base term and up to five one-year options exercisable at the election of the U.S.

government may terminate these agreements, in whole or in part, at any time for its convenience.

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government budget and appropriation decisions and processes.

government budget decisions, including with respect to defense spending, are based on changing government priorities and

objectives, which are driven by numerous factors, including geopolitical events and macroeconomic conditions, and are beyond our control.

government terminates either of these agreements, we would lose a significant portion of our revenue.

government budget decisions, including with respect to defense spending, are based on changing government priorities and objectives, which are driven by numerous factors, including geopolitical events and macroeconomic conditions, and are beyond our control.

government terminates any or all of these agreements, we would lose a significant portion of our revenue.

Further, operational control of our contracts has been moved from the Defense Information Systems Agency to the U.S.

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Lower subscriber use may negatively affect our ability to negotiate a renewal of the EMSS contract on favorable terms in 2026.

Aireon, our primary hosted payload customer, may not successfully grow its business, which could reduce or eliminate the value of our agreements with, and ownership interest in, Aireon.

Aireon is our primary hosted payload customer, and we expect annual revenue to us from Aireon hosting, data services and power fees to be approximately $39.5 million.

Based on Aireon’s business plan and restrictions under Aireon’s debt facility, we do not expect this redemption of our ownership interest to occur for several years.

Aireon’s business model requires expansion of its customer base to achieve its projected financial results, which may not occur when projected or at all.

While our fee arrangements with Aireon are fixed, if Aireon does not achieve its projected results, they may not be able to pay us the contractually required hosting, data services and power fees in a timely manner or at all.

Further, Aireon may need to seek additional financing.

Any sale of equity securities by Aireon would dilute our ownership if and to the extent that we do not invest additional funds to maintain our proportional ownership interest.

We depend on intellectual property licensed from third parties to operate our constellation and sell our devices and for the enhancement of our existing devices and services.

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Our failure to effectively manage the expansion of our portfolio of products and services could impede our ability to execute our business plan, and we may experience increased costs or disruption in our operations.

In order to achieve the substantial future revenue growth we have projected, we must develop and market new products and services, such as Iridium Certus.

In order to achieve the substantial future revenue growth we have projected, we must develop and market new products and services.

We currently face a variety of challenges, including maintaining the infrastructure and systems necessary for us to manage the growth of our business.

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Consequently, we may further strain our management and other company resources with the increased complexities and administrative burdens associated with a larger, more complex portfolio of products and services.

For example, we have in the past experienced quality issues and incorrect market assessments in connection with the introduction of new products and services, and we may experience such issues in the future.

For example, we have in the past experienced quality issues and incorrect

market assessments in connection with the introduction of new products and services, and we may experience such issues in the future.

Our failure to meet these challenges as a result of insufficient management or other resources could significantly impede our ability to execute our business plan, which relies in part on our ability to leverage our largely fixed-cost infrastructure.

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In addition, we may face competition from new competitors, new technologies or new equipment, including proposed new LEO constellations.

For example, we may face competition for our land-based services in the United States from incipient ancillary terrestrial component, or ATC, service providers who are designing a satellite operating business and a terrestrial component around their spectrum holdings.

For example, we may face competition for our services in the United States from service providers with ancillary terrestrial component, or ATC, authorities who are designing a satellite operating business and a terrestrial component around their spectrum holdings, or from service providers developing satellite direct to terrestrial phone capabilities.

In addition, some of our competitors have announced plans for the launch of additional satellites.

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If current or future distributors do not perform adequately, or if we are unable to locate competent distributors in particular countries and secure their services on favorable terms, we may be unable to increase or maintain our revenue in these markets or enter new markets, we may not realize our expected growth, and our brand image and reputation could be hurt.

In addition, we may lose distributors due to competition, consolidation, regulatory developments, business developments affecting our distributors or their customers, or for other reasons.

For example, the COVID-19 pandemic and the steps taken to respond have caused substantial domestic and global economic disruption, including financial difficulties and restrictions on activity among our distributors, which have led to reduced sales and limited our distributors’ ability to install or service our products.

These disruptions have also negatively affected the payment of accounts receivable and collections.

For example, one of our distributors sought protection in bankruptcy, reducing the amount we received from them for past services.

Other distributors could similarly seek to reorganize or seek protection from creditors, including us.

These financial disruptions could also result in industry consolidation.

In addition, we may lose distributors due to competition, industry consolidation, regulatory developments, business developments affecting our distributors or their customers, or for other reasons.

In 2009, one of our largest competitors, Inmarsat, acquired our then largest distributor, Stratos Global Wireless, Inc., and in 2014, Inmarsat acquired Globe Wireless, one of our service providers.

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Our two largest distributors, Marlink Group and Garmin, together represented approximately 12% of our revenue for the year ended December 31, 2022, and our ten largest distributors represented, in the aggregate, 34% of our revenue for the year ended December 31, 2022.

The loss or consolidation of any of these distributors, or a decrease in the level of effort expended by any of them to promote our products and services, could reduce the distribution of our products and services as well as the development of new products and applications, which would negatively affect our revenue.

The loss or consolidation of any of these distributors, or a decrease in the level

of effort expended by any of them to promote our products and services, could reduce the distribution of our products and services as well as the development of new products and applications, which would negatively affect our revenue.

Our business was negatively affected by the COVID-19 pandemic, actions taken to mitigate the pandemic, and the economic disruptions that resulted, and a resurgence or similar pandemic in the future could harm our business.

The COVID-19 pandemic, the steps taken to respond and the resulting substantial domestic and global economic disruption led to reduced sales and limited our distributors’ ability to install or service our products.

The aviation industry was particularly hard hit, which had an adverse effect on our primary hosted payload customer, Aireon, in which we have also made substantial investments.

The pandemic also negatively affected the payment of accounts receivable and collections.

For example, one of our distributors sought protection in bankruptcy, reducing the amount we received from them for past services.

Finally, factors related to the pandemic, including changing work environments, concerns over safety, reluctance to obtain vaccines, and changing economic conditions, caused an increase in employee resignations across many industries and companies, including ours.

Any resurgence of the COVID-19 pandemic, or another future pandemic, that causes similar disruption could further adversely affect our business, results of operations and financial condition.

We rely on a limited number of key vendors for supply of equipment, components and services;

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Further, our manufacturers and suppliers may cease production of our components or products or become capacity-constrained, or could face financial difficulties as a result of a surge in demand, a natural disaster or other event, including the impacts of the COVID-19 pandemic.

For example, several of our suppliers are experiencing production delays as a result of the global silicon chip shortage.

For example, several of our suppliers have experienced production delays as a result of the global silicon chip shortage.

As a result, we have experienced and expect to continue to experience delays in fulfilling some product orders and are evaluating replacement components and product changes.

These delays have increased our costs and reduced our sales of those products and use of the related services, and we expect these effects to continue through 2022.

These delays have increased our costs and reduced our sales of those products and use of the related services, and we expect these effects to continue into 2023.

Any future delay in production or delivery of our products or components by our suppliers could similarly adversely affect our business.

Even if we are able to replace or supplement sole source or other component suppliers, there could be a substantial period of time in which our products would not be available;

any new relationship may involve higher costs and delays in

development and delivery, and we may encounter technical challenges in successfully replicating the manufacturing processes.

any new relationship may involve higher costs and delays in development and delivery, and we may encounter technical challenges in successfully replicating the manufacturing processes.

If our manufacturers or suppliers terminate their relationships with us, fail to provide equipment or services to us on a timely basis, or fail to meet our performance expectations, we may be unable to provide products or services to our customers in a competitive manner, which could in turn negatively affect our financial results and our reputation.

Our Russian operations have been and may continue to be affected by Russia’s invasion of Ukraine and related sanctions imposed in response, and we may in the future choose or be required to further limit or shut down those operations entirely.

We provide satellite communications services in Russia through two local subsidiaries employing 35 people and authorized Russian service providers, using a dedicated gateway in Russia.

In 2022, revenue from our operations in Russia represented approximately 2.1% of our total revenue, all of which was service revenue.

As a result of Russia’s invasion of Ukraine in February 2022, we have ceased shipments of equipment to Russia and made other adjustments to our operations in light of U.S.

and international sanctions.

Further, our sales in Russia are conducted in rubles and then translated to U.S.

dollars in our financial results.

The value of the ruble has fluctuated substantially since the invasion, which may affect our reported revenues.

As a result of these factors, we expect revenue from our operations in Russia to be variable and difficult to predict.

In addition, we may in the future choose or be required to further limit or cease operations in Russia entirely, in which case we will no longer receive any revenue from those operations.

We could also incur significant expenses as a result of the process of shutting down operations in Russia.

Conducting and expanding our operations outside the United States creates numerous risks, which may harm our operations and compromise our ability to expand our international operations.

We have significant operations outside the United States.

We estimate that commercial data traffic originating outside the United States accounted for 74% and 72% of total commercial data traffic for the years ended December 31, 2021 and 2020, respectively, while commercial voice traffic originating outside the United States accounted for 90% and 91% of total commercial voice traffic for the years ended December 31, 2021 and 2020.

We estimate that commercial data traffic originating outside the United States accounted for 78% and 74% of total commercial data traffic for the years ended December 31, 2022 and 2021,

respectively, while commercial voice traffic originating outside the United States accounted for 91% and 90% of total commercial voice traffic for the years ended December 31, 2022 and 2021.

We cannot provide the precise geographical distribution of revenue from end users because we do not contract directly with them.

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We and our distributors are also seeking authorization to sell our services in additional countries.

The COVID-19 pandemic has, and we expect will continue to, put pressure on global economic conditions and overall spending, which could negatively affect end user adoption of our products.

Conducting operations outside the United States involves numerous risks and, while expanding our international operations would advance our growth, it would also increase our exposure to these risks.

For example, in 2013 we commenced the provision of satellite communications services in Russia through a local subsidiary and its authorized Russian service providers and subsequently constructed a dedicated gateway in Russia.

government has imposed economic and diplomatic sanctions on certain Russian corporations, banks, and citizens and might impose additional sanctions in the future.

If such sanctions, or any Russian response to such sanctions, affects our operations in Russia, it could limit our growth in Russia or prevent us from continuing to operate there at all, which would reduce our revenues.

Other risks associated with the proposed expansion of our international operations include:

• effects of the COVID-19 pandemic, including on international economies, supply chains and travel;

Risks associated with the proposed expansion of our international operations include:

• difficulties in penetrating new markets due to established and entrenched competitors;

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• instability of international economies and governments;

• effects of the ongoing COVID-19 pandemic, including on international economies, supply chains and travel;

• changes in laws and policies affecting trade and investment in other jurisdictions;

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Any appreciation of the U.S.

dollar against other currencies, including as a result of the COVID-19 pandemic, will increase the cost of our products and services to our international customers and, as a result, may reduce the competitiveness of our international offerings and make it more difficult for us to grow internationally.

Conversely, in some locations, primarily Russia, we conduct business in the local currency, and a depreciation of the local currency against the U.S.

dollar will reduce the U.S.

dollar value of our revenues from those countries.

dollar against other currencies will increase the cost of our products and services to our international customers and, as a result, may reduce the competitiveness of our international offerings and make it more difficult for us to grow internationally.

Pursuing strategic transactions may cause us to incur additional risks.

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These alternative measures could have a material adverse effect on our business, financial position, results of operations and/or cash flows, which could cause us to become bankrupt or insolvent or otherwise impair our ability to make payments in respect of our indebtedness.

Adverse changes in our credit ratings or withdrawal of the ratings assigned to our debt securities by rating agencies may negatively affect us.

Our ability to access capital markets is important to our ability to operate our business.

Increased scrutiny of the satellite industry and the impact of regulation, as well as changes in our financial performance and unfavorable conditions in the capital markets could result in credit agencies reexamining our credit ratings.

A downgrade in our credit ratings could restrict or discontinue our ability to access capital markets at attractive rates and increase our borrowing costs.

Furthermore, any rating assigned could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant.

Any future lowering of our ratings likely would make it more difficult or more expensive for us to obtain additional debt financing.

If we default under the Term Loan, the lenders may require immediate repayment in full of amounts borrowed or foreclose on our assets.

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If we experience an event of default, the lenders may require repayment in full of all principal and interest outstanding under the Term Loan.

If we fail to repay such amounts, the

lenders may foreclose on the assets we have pledged under the Term Loan, which includes substantially all of the assets of our domestic subsidiaries, including our principal operating subsidiary, Iridium Satellite.

If we fail to repay such amounts, the lenders may foreclose on the assets we have pledged under the Term Loan, which includes substantially all of the assets of our domestic subsidiaries, including our principal operating subsidiary, Iridium Satellite.

Certain provisions in the credit agreement governing our Term Loan limit our financial and operating flexibility.

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Complying with these restrictions may make it more difficult for us to successfully execute our business plan and compete against companies who are not subject to such restrictions.

The LIBOR calculation method may change, and LIBOR is expected to be phased out after June 2023.

Our Term Loan bears interest at a rate based on the London Interbank Offered Rate, or LIBOR.

On March 5, 2021, the U.K.

Financial Conduct Authority, or the FCA, announced that it will no longer require banks to submit rates for the calculation of the relevant LIBOR after June 2023.

In the meantime, actions by the FCA, other regulators, or law enforcement agencies may result in changes to the method by which LIBOR is calculated.

If changes to LIBOR result in an increase in rates, our interest expense under the Term Loan would increase.

Further, if LIBOR is no longer available, our Term Loan provides a process to determine a substitute rate, and if such substitute rate is higher than LIBOR, our interest expense under the Term Loan would increase.

Our Board of Directors may reduce, suspend or terminate our planned dividends.

In December 2022, our Board of Directors initiated a quarterly dividend and declared a cash dividend on our common stock.

Decisions regarding future dividends are within the discretion of the Board of Directors and may be influenced by a number of factors, including the price of our common stock, general business and economic conditions, our financial condition and operating results, the emergence of alternative investment or acquisition opportunities, changes in our business strategy and other factors.

These or other factors could cause our Board of Directors to reduce, suspend or terminate our planned quarterly dividends, which could reduce the value of our common stock.

For more information on our dividends, see “Management’s Discussion and Analysis of Financial Conditions and Results of Operations.”

Adverse changes in our credit ratings or withdrawal of the ratings assigned to our debt securities by rating agencies may negatively affect us.

Our ability to access capital markets is important to our ability to operate our business.

A downgrade in our credit ratings could restrict or discontinue our ability to access capital markets at attractive rates and increase our borrowing costs.

Any future lowering of our ratings likely would make it more difficult or more expensive for us to obtain additional debt financing.

The market price of our common stock may be volatile.

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• actual or anticipated variations in our operating results, including termination or expiration of one or more of our key contracts, or a change in sales levels under one or more of our key contracts;

• failure of Aireon to successfully carry out its business plan;

• failure of Aireon to successfully carry out its business plan or obtain expected financing;

• failure to comply with the terms of the credit agreement governing our Term Loan;

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If our stock, the market for other stocks in our industry, or the stock market in general experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations.

We may not pay dividends on our common stock in the foreseeable future.

We do not currently pay cash dividends on our common stock, and we may elect to retain all cash we generate to fund the growth of our business, fund acquisitions, pay down our existing debt, or for other purposes.

Accordingly, we may not pay dividends on our common stock in the foreseeable future.

Risks related to legal and regulatory matters

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The rules and regulations of these U.S.

and foreign authorities may change, and such authorities may adopt regulations that limit or restrict our operations as presently conducted or currently contemplated.

and foreign authorities may change, and such authorities may adopt regulations that limit or restrict our operations as presently conducted or currently contemplated, including our de-orbit obligations.

Such authorities may also make changes in the licenses of our competitors that affect our spectrum.

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Repurposing of satellite spectrum by adjacent operators of L-band spectrum for terrestrial services could interfere with our services.

In February 2003, the U.S.

Federal Communications Commission, or FCC, adopted Ancillary Terrestrial Component, or ATC, rules that permit satellite service providers to establish terrestrial wireless networks in previously satellite-only bands, subject to certain requirements intended to ensure that terrestrial services remain ancillary to primary satellite operations and do not interfere with existing operators.

In February 2003, the FCC adopted ATC rules that permit satellite service providers to establish terrestrial wireless networks in previously satellite-only bands, subject to certain requirements intended to ensure that terrestrial services remain ancillary to primary satellite operations and do not interfere with existing operators.

In 2011, the FCC granted Ligado Networks (then known as Lightsquared), or Ligado, a waiver to convert its L-band satellite spectrum to terrestrial use, including a 10 MHz band close to the spectrum that we use for all of our services.

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gateway earth station and the U.S.

government customer and commercial subscriber earth station licenses expire between March 2022 and November 2036.

government customer and commercial subscriber earth station licenses expire between February 2036 and March 2037.

There can be no assurance that the FCC will renew the FCC licenses we hold or grant new ones or modifications.

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As we and our distributors expand our offerings to include more consumer-oriented devices, we are more likely to be subject to product liability claims, recalls or litigation, which could adversely affect our business and financial performance.

Through our distributors, we offer several devices and services aimed at individual consumers, and we and our distributors continue to introduce additional devices and services.

These devices and services, such as satellite handsets, personal locator devices and location-based services, can contain design and manufacturing defects.

Defects may also occur in components and devices that we purchase from third parties.

There can be no assurance we will be able to detect and fix all defects in the hardware, software and services that we sell.

These devices and services may be used in isolated and dangerous locations, including emergency response situations, and users who suffer property damage, personal injury or death while using such devices or services may seek to assert claims or bring lawsuits against us.

Further, it is possible that our devices could become the subject of consumer protection investigations, enforcement actions, or litigation, including class actions.

We seek to limit our exposure to all of these claims by maintaining a consumer protection compliance program, and through appropriate notices, disclosures, indemnification provisions and disclaimers, but these steps may not be effective.

Through our distributors, we offer several services and devices aimed at individual consumers, and we and our distributors continue to introduce additional services and devices for use with our services.

For example, we recently entered into an agreement with Qualcomm to enable satellite messaging and emergency services in smartphones using our services, which may dramatically increase the number of devices that use our services.

These services and devices aimed at individual consumers, such as location-based services, emergency services, satellite handsets, smartphones, and personal locator devices, may contain design and manufacturing defects.

Defects may also occur in components and devices that we purchase from third parties or that our distributors offer.

There can be no assurance we or our distributors will be able to detect and fix all defects in the services, hardware and software that we or our distributors sell.

These services and devices may be used in isolated and dangerous locations, including emergency response situations, and users who suffer property damage, personal injury or death while using such services or devices may seek to assert claims or bring lawsuits against us.

Further, it is possible that our distributors’ devices could become the subject of consumer protection investigations, enforcement actions or litigation, including class actions.

We also maintain product liability insurance, but this insurance may not cover any particular claim or litigation, or the amount of insurance may be inadequate to cover the claims brought against us.

Product liability insurance could become more expensive and difficult to maintain and might not be available on acceptable terms or at all.

In addition, it is possible that our devices could become the subject of a product recall as a result of a device defect.

We do not maintain recall insurance, so any recall could have a significant effect on our financial results.

In addition to the direct expenses of product liability claims, investigations, recalls and litigation, a claim, investigation, recall or litigation might cause us adverse publicity, which could harm our reputation and compromise our ability to sell our devices in the future.

In addition, it is possible that our distributors’ devices could become the subject of a product recall as a result of a device defect.

We do not maintain recall insurance, nor do we have control over our distributors’ devices, and any recall could have a significant effect on our financial results.

In addition to the direct expenses of and potential liability for product liability claims, investigations, recalls and litigation, a claim, investigation, recall or litigation might cause us adverse publicity, which could harm our reputation and compromise our ability to sell our services or devices in the future.

The collection, storage, transmission, use and disclosure of user data and personal information could give rise to liabilities or additional costs as a result of laws, governmental regulations, and evolving views of personal privacy rights and information security standards.

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

We could face direct expenses related to a variety of enforcement actions, government investigations, or litigation, and an interruption to our business and adverse publicity because of such enforcement actions, government investigations, or litigation.

Such enforcement actions, government investigations, or litigation could also cause us to incur significant expenses if we were required to modify our products, our services, our

infrastructure, or our existing security and privacy procedures in order to comply with new or expanded privacy and security regulations.

We could face direct expenses related to a variety of enforcement

actions, government investigations, or litigation, and an interruption to our business and adverse publicity because of such enforcement actions, government investigations, or litigation.

Such enforcement actions, government investigations, or litigation could also cause us to incur significant expenses if we were required to modify our products, our services, our infrastructure, or our existing security and privacy procedures in order to comply with new or expanded privacy and security regulations.

In addition, if end users allege that their personal information is not collected, stored, transmitted, used or disclosed by us or our business partners appropriately or in accordance with our policies or applicable laws, or that our failure to adequately secure their personal information compromised its security, we could have liability to them or to consumer protection agencies, including claims, investigations and litigation related to such allegations.

Any failure on our part to protect end users’ personal information could result in a loss of user confidence, hurt our reputation, result in the loss of users, and cause us to incur significant expenses.

Any failure on our part to protect end users’ personal information could result in a loss of user confidence, harm our reputation, result in the loss of users, and cause us to incur significant expenses.

We have been and may in the future become subject to claims that our devices or services violate the patent or intellectual property rights of others, which could be costly and disruptive to us.

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As new laws and regulations are issued, we may be required to modify our business plans or operations.

In addition, changing and conflicting national and local regulatory requirements may cause us to be in compliance with local requirements

in one country, while not being in compliance with the laws and regulations of another.

In addition, changing and conflicting national and local regulatory requirements may cause us to be in compliance with local requirements in one country, while not being in compliance with the laws and regulations of another.

If we fail to comply with regulations in the United States or any other country, we could be subject to substantial fines or sanctions that could make it difficult or impossible for us to operate in the United States or such other country, or we may need to make substantial additional expenditures to bring our systems, products and services into compliance with the requirements.

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Our ability to utilize U.S.

net operating loss carryforwards and other tax attributes may be limited if we experience an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, which generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our common stock increase their ownership in the aggregate by more than 50% over their lowest ownership percentage within a rolling period that begins on the later of three years prior to the testing date and the date of the last ownership change.

aggregate by more than 50% over their lowest ownership percentage within a rolling period that begins on the later of three years prior to the testing date and the date of the last ownership change.

Similar rules may apply under state tax laws.

If an “ownership change” were to occur, Section 382 of the Code would impose an annual limit on the amount of pre-ownership

change net operating loss carryforwards and other tax attributes we could use to reduce our taxable income.

If an “ownership change” were to occur, Section 382 of the Code would impose an annual limit on the amount of pre-ownership change net operating loss carryforwards and other tax attributes we could use to reduce our taxable income.

It is possible that such an ownership change could materially reduce our ability to use our net operating loss carryforwards or other tax attributes to offset taxable income, which could impact our profitability.

20 unchanged sentences

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

What changed 10-K

Item 1A. Risk Factors