What changed in this filing

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Item 1A. Risk Factors

2025-02-13 compared with 2024-02-15 · 88 added, 71 removed, 415 unchanged (28% of the section changed)

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If the magnitude or frequency of such problems increases and we are no longer able to provide a commercially acceptable level of service, our business and financial results and our reputation would be hurt, and our ability to pursue our business plan would be compromised.

We may be required in the future to make changes to our constellation to maintain or improve its performance.

In the future, we may seek to make changes to our constellation to offer new services or adjust the power.

Any such changes may require prior FCC approval, and the FCC may subject the approval to other conditions that could be unfavorable to our business.

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We have in the past and may in the future experience in-orbit malfunctions of our satellites, which could adversely affect the reliability of their service or result in total failure of the satellite.

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

In-orbit failure of a satellite or temporary outage of a service or a satellite may result from various causes, including component failure, loss of power or fuel, inability to control positioning of the satellite, solar or other astronomical events, including solar radiation and flares, and space debris.

Other factors that could affect the useful lives of our satellites include the quality of construction, gradual degradation of solar panels and the durability of components.

We do not have and have no plans to obtain in-orbit insurance.

We do not have, and do not have plans to obtain, in-orbit insurance to protect against losses.

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

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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.

Our commercial satellite network traffic is supported by a gateway in Tempe, Arizona, as well as a gateway in Izhevsk, Russia, for traffic within Russian boundaries, and we operate our satellite constellation from our satellite network operations center in

Our commercial satellite network traffic is supported by a gateway in Tempe, Arizona, or, for traffic within Russian boundaries only, a gateway in Izhevsk, Russia.

We operate our satellite constellation from our satellite network operations center in

Leesburg, Virginia.

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The satellite communications industry is subject to rapid advances and innovations in technology.

We may face competition in the future from companies using new technologies and new satellite systems, including a significant number of new entrants who are developing or have announced a wide array of technologies, some of which would compete directly with one or more of our existing or planned products and services.

We face competition from companies using new technologies and new satellite systems, including a significant number of new entrants who are developing or have announced a wide array of technologies, some of which compete directly with one or more of our existing or planned products and services.

New technology could render our system obsolete or less competitive by satisfying customer demand in more attractive ways or through the introduction of incompatible standards.

Particular technological developments that could adversely affect us include the deployment by our competitors of new satellites with greater power, flexibility, efficiency or capabilities than ours, as well as continuing improvements in terrestrial wireless technologies.

For us to keep up with technological changes and remain competitive, we may need to make significant capital expenditures, including capital to design and launch new products and services over the short to medium term, and, over the longer term, the acquisition of additional spectrum, satellites, launch vehicles and other network resources to support continued growth.

For us to keep up with technological changes and remain competitive, we have made and may continue to make significant research and development and capital expenditures, including capital to design and launch new products and services over the short to medium term, and, over the longer term, the acquisition of additional spectrum, satellites, launch vehicles and other network resources to support continued growth.

Customer acceptance of the products and services that we offer will continually be affected by technology-based differences in our product and service offerings compared to those of our competitors.

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nevertheless, this debris is still large enough to potentially cause severe damage or a failure of our satellites should a collision occur.

The total number of satellites in low-earth orbit has increased significantly in recent years and is expected to continue to increase in the future, increasing the risk of collisions if not coordinated.

Collisions between satellites or other space debris, such as rocket fragments, could cause a cascading effect of multiplying debris and collisions within Earth’s orbit, which could result in significant risk to the operation of our constellation.

If our constellation experiences additional satellite collisions with space debris or other spacecraft, our service could be impaired.

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We 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 had an initial term through September 2023 and has been extended through March 31, 2024, as we negotiate renewal of the agreement.

The EMSS contract continues through September 2026, and the SDA contract has a base term until January 2025 and up to five one-year options exercisable at the election of the U.S.

government pursuant to our EMSS, SDA, and ECS3 contracts.

We entered into these contracts in September 2019, May 2022, and March 2024, respectively.

The EMSS contract continues through September 2026;

the SDA contract had a base term until January 2025, and we are currently in the first of up to five one-year options exercisable at the election of the U.S.

government to extend the term;

and the ECS3 contract has a base term

that runs through March 2025, with four one-year extension 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.

Our relationship with the U.S.

government is also subject to the

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 is also subject to the overall U.S.

government policies, budget and appropriation decisions and processes.

government budget and policy decisions, including with respect to defense spending, are based on changing government priorities and objectives, which are driven by numerous factors, including administration changes, 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.

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

In connection with this operational shift, changes in internal pricing and cost recovery have resulted in reduced subscribers under the EMSS contract.

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

Lower subscriber use may negatively affect our ability to negotiate a renewal of the EMSS contract on favorable terms in 2026, which could reduce our revenue from that contract.

If we fail to comply with the terms of our U.S.

government contracts, including applicable federal acquisition regulations, we may be subject to contract price adjustments, civil or criminal penalties, or debarment from future U.S.

government contracts, including applicable federal acquisition regulations and executive orders, we may be subject to contract price adjustments, contract terminations, civil or criminal penalties, or suspension or debarment from future U.S.

government contracts.

government contractor or subcontractor, we are subject to federal acquisition regulations, which govern, among other things, the allowability of costs incurred by us in the performance of U.S.

government contractor or subcontractor, we are subject to extensive laws and regulations governing the award, administration and performance of U.S.

government contracts.

Among other things, these laws and regulations govern the allowability of costs incurred by us in the performance of U.S.

government contracts.

The pricing of some contracts, including the SDA contract, is based on estimated direct and indirect costs.

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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 $32.7 million.

In addition, we currently hold a substantial ownership interest in Aireon’s parent company, Aireon Holdings, and, 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.

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.

In addition, we currently hold a substantial ownership interest in Aireon’s parent company, Aireon Holdings, and, if and when funds are available following a planned refinancing of Aireon’s credit facility, Aireon Holdings is required to redeem a portion of our ownership interest for a payment of $120.0 million.

Based on Aireon’s current 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.

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If any third-party owner of such intellectual property or technology were to terminate any license agreement with us or cease to support and service such intellectual property or technology or perform development on our behalf, or if we are unable to renew such licenses on commercially reasonable terms or at all, it may be difficult, more expensive or impossible to obtain such intellectual property, technology, or services from alternative vendors.

Any substitute intellectual property or technology may also be costly to develop and integrate, or could have lower quality or performance standards, which would adversely affect the quality of our devices and services.

Any substitute intellectual property or technology may

also be costly to develop and integrate, or could have lower quality or performance standards, which would adversely affect the quality of our devices and services.

In connection with the development of new devices and services, we may be required to obtain additional intellectual property rights from third parties.

We can offer no assurance that we will be able to obtain such

intellectual property rights on commercially reasonable terms or at all.

We can offer no assurance that we will be able to obtain such intellectual property rights on commercially reasonable terms or at all.

If we are unable to obtain such intellectual property rights on commercially reasonable terms, we may not be able to develop some new devices and services.

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In addition, our distributors may not comply with the laws and regulatory requirements in their local jurisdictions, which could limit their ability to market or sell our products and services.

If our distributors develop faulty or poorly performing products using our technology or services, we may be subject to claims, and our reputation could be harmed.

markets or enter new markets, we may not realize our expected growth, and our brand image and reputation could be hurt.

If our distributors develop

faulty or poorly performing products using our technology or services, we may be subject to claims, and our reputation could be harmed.

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.

For example, in 2023, we announced an arrangement with Qualcomm Technologies, Inc., or Qualcomm, to include our services on a processor for use in smartphones and act as our VAM and service provider with smartphone manufacturers.

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This arrangement included large penalties had we marketed a similar technology with another partner;

as a result, we expect a substantial delay in our ability to develop a similar service with a different third party.

as a result, we experienced a substantial delay in our ability to develop similar services with other third parties.

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.

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Any future consolidation of our distributors would further increase our reliance on a few key distributors of our services and the amount of volume discounts that we may have to give those distributors.

Our two largest distributors, Marlink Group and Garmin, together represented approximately 10% of our revenue for the year ended December 31, 2023, and our ten largest distributors represented, in the aggregate, 27% of our revenue for the year ended December 31, 2023.

Our two largest commercial distributors, Marlink Group and Garmin, together represented approximately 10% of our revenue for the year ended December 31, 2024, and our ten largest distributors represented, in the aggregate, 30% of our revenue for the year ended December 31, 2024.

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.

Our business was negatively affected by the COVID-19 pandemic, actions taken to mitigate the pandemic, and the economic disruptions that resulted.

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.

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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;

the loss of any such supplier, or shortages experienced by such suppliers, could cause us to incur additional costs and delays in the production and delivery of our products, which could reduce the sales of those products and use of the related services.

We rely on a limited number of key vendors for supply of equipment, components and services and the loss of any such supplier, shortages experienced by such suppliers, or changes in trade policy such as tariffs, could cause us to incur additional costs and delays in the production and delivery of our products, which could reduce the sales of those products and use of the related services.

We currently rely on a limited number of manufacturers of our devices, including our mobile handsets, L-band transceivers and SBD devices.

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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.

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

As a result, we experienced delays in fulfilling some product orders and are evaluating replacement components and product changes.

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

As a result, we experienced delays in fulfilling some product orders.

These delays increased our costs and reduced our sales of those products and use of the related services.

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

Changes to trade policy by the U.S.

or foreign governments, including tariff and customs regulations, could increase our costs, cause delays or cause us to evaluate alternative sourcing, all of which could adversely impact our operations.

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;

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We provide satellite communications services in Russia through two local subsidiaries employing 36 people and authorized Russian service providers, using a dedicated gateway in Russia.

In 2023, revenue from our operations in Russia represented approximately 1.8% of our total revenue, all of which was service revenue.

As a result of Russia’s invasion of Ukraine in February 2022, we 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.

In each of the years 2022 through 2024, revenue from our operations in Russia, all of which was service revenue, represented approximately 2% of our total revenue.

Our sales in Russia are conducted in rubles and then translated to U.S.

dollars in our financial results.

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We have significant operations outside the United States.

We estimate that commercial data traffic originating outside the United States accounted for 96% and 95% of total commercial data traffic for the years ended December 31, 2023 and 2022, 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, 2023 and 2022.

We estimate that commercial data traffic originating outside the United States accounted for 94% and 96% of total commercial data traffic for the years ended December 31, 2024 and 2023, respectively, while commercial voice traffic originating outside the United States accounted for 91% of total commercial voice traffic for each of the years ended December 31, 2024 and 2023.

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

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• effects of a global pandemic, such as COVID-19, including on international economies, supply chains and travel;

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

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

• exposure to varying legal standards, including data privacy, security and intellectual property protection in other jurisdictions;

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These risks may include adverse legal, organizational and financial consequences, loss of key customers and distributors, and diversion of management’s time.

In April 2024, we completed the acquisition of Satelles, Inc., adding a new line of business, which we refer to as our positioning, navigation and timing, or PNT, business.

This was our first acquisition of another company.

We may not be successful in growing the PNT business as we have projected, which could harm our financial condition and results of operations.

To the extent we pursue additional strategic transactions, we also may not be successful in integrating the acquired business or otherwise deriving the expected benefit from the transaction.

In addition, any major business combination or similar strategic transaction may require significant additional financing, and our ability to obtain such financing may be restricted by the credit agreement governing our currently outstanding term loan with various lenders administered by Deutsche Bank AG, or the Term Loan .

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We compete for such personnel with other companies, government entities, academic institutions and other organizations.

The unexpected loss or interruption of the services of such personnel could compromise our ability to effectively manage our operations, execute our business plan and meet our strategic objectives.

The unexpected loss or interruption of the services of such

personnel could compromise our ability to effectively manage our operations, execute our business plan and meet our strategic objectives.

Risks related to our capital structure

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• Our indebtedness requires us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow for operations and other purposes.

• The interest on our debt is floating, and increases in the rate could increase our interest payments significantly for the portion we do not hedge (see “Item 7A.

Quantitative and Qualitative Disclosures About Market Risk” in this report for more information about our hedging activities).

Furthermore, our current fixed rate cap ends in November 2026, and we may not be able to maintain the same interest rate cap level, which could result in a significant increase in our interest payments.

• Our leverage level could make it more difficult for us to satisfy our obligations to our lenders, resulting in possible defaults on and acceleration of such indebtedness.

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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.

Since 2023, we have paid quarterly cash dividends 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.

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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, including our de-orbit obligations.

and foreign authorities may change, and such authorities may adopt regulations that limit or restrict our current or future operations or expand those of our competitors, including our orbital debris mitigation obligations.

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

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A change in the manner in which we provide service, or a failure to comply with any common carrier regulations that apply to us or to pay required fees, could result in sanctions including fines, loss of authorizations, or the denial of applications for new authorizations or the renewal of existing authorizations.

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

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.

That waiver was subsequently suspended in 2012 due to concerns about potential interference to GPS operations.

Ligado sought another waiver in 2015 to modify the ATC of its L-band mobile satellite service network with a terrestrial-only proposal designed to address GPS industry concerns.

In April 2020, the FCC announced that it had approved Ligado’s waiver request.

Interference with our satellite spectrum, including by operators seeking to repurpose L-band for terrestrial services, could adversely impact our ability to provide our services.

Although we have globally coordinated rights to the use of our spectrum, spectrum interference may adversely affect the performance of our system for customers of our existing and future services.

Sources of harmful interference could include unauthorized use of our spectrum, increased use of shared spectrum and certain usages in adjacent bands.

In particular, the FCC granted a waiver in 2020 to Ligado Networks to operate a terrestrial nationwide network in the United States on MSS spectrum that includes a 10 MHz band close to the spectrum that we use for all of our services.

Ligado’s implementation of ATC or direct-to-device services, whether on its own or by leasing its spectrum to a third party, may affect the performance of our system for customers of our existing and future services.

We, along with a variety of other private parties and the National Telecommunications and Information Administration on behalf of federal government users, filed petitions for reconsideration opposing this waiver out of concern for the interference that we believe Ligado’s proposed operations would cause.

While the FCC’s decision to approve Ligado Network’s waiver included conditions designed to protect satellite services that use L-band

spectrum from harmful interference, these conditions may prove inadequate, resulting in harmful interference with our satellites and devices.

These petitions remain pending.

In October 2023, Ligado brought suit against the U.S.

government in the Federal Court of Claims alleging that the Department of Defense, the Department of Commerce, and Congress unlawfully prevented Ligado from using its exclusively licensed services and seeking damages based on their inability to deploy ATC services in the band.

Ligado’s implementation of these services would result in terrestrial use of L-band spectrum in the 1.6 GHz band, which we use to provide our services, and such implementation may affect the performance of our system for customers of our existing and future services.

While the FCC’s decision to approve these services included conditions designed to protect other satellite services that use L-band spectrum from harmful interference, these conditions may prove insufficient, or the level of services provided may exceed those estimated by the FCC, in which case these or future terrestrial services permitted by the FCC could substantially interfere with our satellites and devices, which would adversely affect our services.

In October 2023, Ligado sued the U.S.

government alleging that the Department of Defense, the Department of Commerce, and Congress unlawfully prevented Ligado from using its FCC authorized spectrum and seeking damages based on its inability to deploy ATC services in the spectrum.

The litigation is ongoing.

In January 2025, Ligado and its affiliates filed a petition for voluntary reorganization under Chapter 11 of the United States Bankruptcy Code.

As part of its reorganization, it intends to execute an agreement to lease and potentially transfer its satellites, ground assets and L-band spectrum to AST SpaceMobile, Inc (retaining Ligado’s ability to deploy ATC subject to resolution of its litigation with the U.S.

The outcomes of the litigation and the bankruptcy may impact the outcome of the pending petitions for reconsideration before the FCC and the ability of Ligado or a lessee to implement ATC or direct-to-device services that may affect the performance of our network.

If other countries permit similar terrestrial use of L-band spectrum in the 1.6 GHz band, the performance of our system may be subject to interference there as well.

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For example, numerous U.S.

states have adopted consumer privacy laws that gives residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used by requiring companies to provide new disclosures to consumers and provide such consumers new ways to opt out of certain sales of personal information.

In Europe, the European Commission enacted the General Data Protection Regulation, or GDPR, which since 2018 has imposed more stringent EU data protection requirements and provided for greater penalties for noncompliance.

states have adopted consumer privacy laws that give residents expanded rights to

access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used by requiring companies to provide new disclosures to consumers and provide such consumers new ways to opt out of certain sales of personal information.

In the EU, the European Commission enacted the General Data Protection Regulation, or GDPR, which since 2018 has imposed more stringent EU data protection requirements and provided for greater penalties for noncompliance.

In addition, the interpretation of privacy and data protection laws and regulations regarding the collection, storage, transmission, use and disclosure of such information in some jurisdictions remains unclear.

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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.

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.

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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.

We operate in an industry that is susceptible to significant intellectual property litigation.

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

We operate in an industry in which significant intellectual property claims and litigation are common, including the assertion of patents allegedly concerning industry standards, such as those developed by the 3GPP.

As a result, we or our devices or services from time to time have been and may in the future be subject to intellectual property infringement claims or litigation.

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

An adverse determination in litigation to which we may become a party could, among other things:

• subject us to significant liabilities to third parties, including treble damages;

The resolution of an intellectual property claim or an adverse determination in litigation to which we may become a party could, among other things:

• require disputed rights to be licensed from a third party for royalties that may be substantial;

• subject us to significant liabilities to third parties, including treble damages;

• require us to cease using technology that is important to our business;

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While our constellation is capable of providing service globally, our ability to sell one or more types of service in some regions may be limited by local regulations.

Some countries have specific regulatory requirements such as local domestic ownership requirements or requirements for physical gateways within their jurisdiction to connect traffic coming to and from their territory.

Some countries have specific regulatory requirements such as lawful intercept and local domestic ownership requirements or requirements for physical gateways within their jurisdiction to connect traffic coming to and from their territory.

In some countries, we may not be able to find an acceptable local partner or reach an agreement to develop additional gateways, or the cost of developing and deploying such gateways may be prohibitive, which could impair our ability to expand our product and service offerings in such areas and undermine our value for potential users who require service in these areas.

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Any of these developments could limit, delay or otherwise interfere with our ability to construct gateways or other infrastructure or network solutions around the world.

Security and emergency services regulations in the United States and other countries may affect our ability to operate our system and to expand into new markets.

Our operations are subject to regulations of the U.S.

Department of Commerce’s Bureau of Industry and Security relating to the export of satellites and related technical data as well as our subscriber equipment, the U.S.

Treasury Department’s Office of Foreign Assets Control relating to transactions involving entities sanctioned by the United States, and the U.S.

State Department’s Office of Defense Trade Controls relating to satellite launch.

Export control, sanctions, security and emergency services regulations in the United States and other countries may affect our ability to operate our system and to expand into new markets.

Our operations are subject to numerous governmental regulations, including those issued by (i) the U.S.

Department of Commerce’s Bureau of Industry and Security relating to the export of satellites and related technical data as well as our subscriber equipment, (ii) the U.S.

Treasury Department’s Office of Foreign Assets Control relating to transactions involving entities sanctioned by the United States, and (iii) the U.S.

State Department’s Office of Defense Trade Controls relating to satellite launch and to our support of Space Development Agency operations outside the United States.

We are also required to provide U.S.

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Under our agreements with Motorola Solutions and the U.S.

government, we are required to maintain an in-orbit liability insurance policy with a de-orbiting endorsement.

government, we are required to maintain an in-orbit liability insurance policy with de-orbiting coverage for Block 1 satellites.

The current policy, together with the de-orbiting endorsement, covers amounts that we and other specified parties may become liable to pay for bodily injury and property damages to third parties related to processing, maintaining, and de-orbiting our first-generation satellites.

Our current policy has a one-year term, which expires on December 8, 2025, and excludes coverage for all third-party damages relating to the 2009 collision of our satellite with a non-operational Russian satellite.

Our current in-orbit liability insurance policy also contains, and we expect and future policies would likewise contain, specified exclusions and material change limitations that are customary in the industry.

The price, terms and availability of insurance have fluctuated significantly since we began offering commercial satellite services.

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In addition to higher premiums, insurance policies may provide for higher deductibles, shorter coverage periods and additional policy exclusions.

For example, our current de-orbit insurance covers only twelve months from attachment and therefore would not cover losses arising outside that timeframe.

In addition, even if we continue to maintain an in-orbit liability insurance policy, the coverage may not protect us against all third-party losses, which could be material.

Our current in-orbit liability insurance policy contains, and we expect any future policies would likewise contain, specified exclusions and material change limitations customary in the industry.

These exclusions may relate to, among other things, losses resulting from in-orbit collisions such as the one we experienced in 2009, acts of war, insurrection, terrorism or military action, government confiscation, strikes, riots, civil commotions, labor disturbances, sabotage, unauthorized use of the satellites, and nuclear or radioactive contamination, as well as claims directly or indirectly occasioned as a result of noise, pollution, electrical and electromagnetic interference, and interference with the use of property.

In addition to our in-orbit liability insurance policy, we are required to maintain insurance to cover the potential liability of Motorola Solutions, the successor to the manufacturer of our first-generation satellites.

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Although we have not been party to any such lawsuits, we may be exposed to such litigation in the future.

While we believe we comply with applicable standards for radio frequency emissions and power and do not believe that there is valid scientific evidence that use of our devices poses a health risk, courts or governmental agencies could determine otherwise.

Any such finding could reduce our revenue and profitability and expose us and other communications service providers or device sellers to litigation, which, even if frivolous or unsuccessful, could be costly to defend.

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Our ability to utilize U.S.

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.

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.

Similar rules may apply under state tax laws.

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

What changed 10-K

Item 1A. Risk Factors