10-Q 1 gsat-20220630.htm 10-Q gsat-20220630
false2022Q20001366868--12-3100013668682022-01-012022-06-300001366868us-gaap:CommonStockMember2022-07-29xbrli:shares0001366868us-gaap:NonvotingCommonStockMember2022-07-290001366868us-gaap:ServiceMember2022-04-012022-06-30iso4217:USD0001366868us-gaap:ServiceMember2021-04-012021-06-300001366868us-gaap:ServiceMember2022-01-012022-06-300001366868us-gaap:ServiceMember2021-01-012021-06-300001366868us-gaap:ProductMember2022-04-012022-06-300001366868us-gaap:ProductMember2021-04-012021-06-300001366868us-gaap:ProductMember2022-01-012022-06-300001366868us-gaap:ProductMember2021-01-012021-06-3000013668682022-04-012022-06-3000013668682021-04-012021-06-3000013668682021-01-012021-06-30iso4217:USDxbrli:shares00013668682022-06-3000013668682021-12-310001366868us-gaap:SeriesAPreferredStockMember2021-12-310001366868us-gaap:SeriesAPreferredStockMember2022-06-300001366868us-gaap:CommonStockMember2021-12-310001366868us-gaap:CommonStockMember2022-06-300001366868us-gaap:NonvotingCommonStockMember2022-06-300001366868us-gaap:NonvotingCommonStockMember2021-12-310001366868us-gaap:CommonStockMember2021-12-310001366868us-gaap:AdditionalPaidInCapitalMember2021-12-310001366868us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001366868us-gaap:RetainedEarningsMember2021-12-310001366868us-gaap:CommonStockMember2022-01-012022-03-310001366868us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-3100013668682022-01-012022-03-310001366868gsat:ConvertibleEightPointZeroPercentSeniorNotesIssuedTwentyThirteenMember2022-03-31xbrli:pure0001366868us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001366868us-gaap:RetainedEarningsMember2022-01-012022-03-310001366868us-gaap:CommonStockMember2022-03-310001366868us-gaap:AdditionalPaidInCapitalMember2022-03-310001366868us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001366868us-gaap:RetainedEarningsMember2022-03-3100013668682022-03-310001366868us-gaap:CommonStockMember2022-04-012022-06-300001366868us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001366868us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001366868us-gaap:RetainedEarningsMember2022-04-012022-06-300001366868us-gaap:CommonStockMember2022-06-300001366868us-gaap:AdditionalPaidInCapitalMember2022-06-300001366868us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001366868us-gaap:RetainedEarningsMember2022-06-300001366868us-gaap:CommonStockMember2020-12-310001366868us-gaap:AdditionalPaidInCapitalMember2020-12-310001366868us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001366868us-gaap:RetainedEarningsMember2020-12-3100013668682020-12-310001366868us-gaap:CommonStockMember2021-01-012021-03-310001366868us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-3100013668682021-01-012021-03-310001366868us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001366868us-gaap:RetainedEarningsMember2021-01-012021-03-310001366868us-gaap:CommonStockMember2021-03-310001366868us-gaap:AdditionalPaidInCapitalMember2021-03-310001366868us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001366868us-gaap:RetainedEarningsMember2021-03-3100013668682021-03-310001366868us-gaap:CommonStockMember2021-04-012021-06-300001366868us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001366868us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001366868us-gaap:RetainedEarningsMember2021-04-012021-06-300001366868us-gaap:CommonStockMember2021-06-300001366868us-gaap:AdditionalPaidInCapitalMember2021-06-300001366868us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001366868us-gaap:RetainedEarningsMember2021-06-3000013668682021-06-300001366868gsat:ServicesDuplexMember2022-04-012022-06-300001366868gsat:ServicesDuplexMember2021-04-012021-06-300001366868gsat:ServicesDuplexMember2022-01-012022-06-300001366868gsat:ServicesDuplexMember2021-01-012021-06-300001366868gsat:ServicesSPOTMember2022-04-012022-06-300001366868gsat:ServicesSPOTMember2021-04-012021-06-300001366868gsat:ServicesSPOTMember2022-01-012022-06-300001366868gsat:ServicesSPOTMember2021-01-012021-06-300001366868gsat:CommercialloTMember2022-04-012022-06-300001366868gsat:CommercialloTMember2021-04-012021-06-300001366868gsat:CommercialloTMember2022-01-012022-06-300001366868gsat:CommercialloTMember2021-01-012021-06-300001366868gsat:ServicesOtherMember2022-04-012022-06-300001366868gsat:ServicesOtherMember2021-04-012021-06-300001366868gsat:ServicesOtherMember2022-01-012022-06-300001366868gsat:ServicesOtherMember2021-01-012021-06-300001366868gsat:ProductDuplexMember2022-04-012022-06-300001366868gsat:ProductDuplexMember2021-04-012021-06-300001366868gsat:ProductDuplexMember2022-01-012022-06-300001366868gsat:ProductDuplexMember2021-01-012021-06-300001366868gsat:ProductSPOTMember2022-04-012022-06-300001366868gsat:ProductSPOTMember2021-04-012021-06-300001366868gsat:ProductSPOTMember2022-01-012022-06-300001366868gsat:ProductSPOTMember2021-01-012021-06-300001366868gsat:SubscriberEquipmentCommercialloTMember2022-04-012022-06-300001366868gsat:SubscriberEquipmentCommercialloTMember2021-04-012021-06-300001366868gsat:SubscriberEquipmentCommercialloTMember2022-01-012022-06-300001366868gsat:SubscriberEquipmentCommercialloTMember2021-01-012021-06-300001366868gsat:ProductOtherMember2022-04-012022-06-300001366868gsat:ProductOtherMember2021-04-012021-06-300001366868gsat:ProductOtherMember2022-01-012022-06-300001366868gsat:ProductOtherMember2021-01-012021-06-300001366868gsat:ReimbursementRevenueMember2022-04-012022-06-300001366868gsat:ReimbursementRevenueMember2022-01-012022-06-300001366868gsat:ReimbursementRevenueMember2021-04-012021-06-300001366868gsat:ReimbursementRevenueMember2021-01-012021-06-300001366868country:USus-gaap:ServiceMember2022-04-012022-06-300001366868country:USus-gaap:ServiceMember2021-04-012021-06-300001366868country:USus-gaap:ServiceMember2022-01-012022-06-300001366868country:USus-gaap:ServiceMember2021-01-012021-06-300001366868us-gaap:ServiceMembercountry:CA2022-04-012022-06-300001366868us-gaap:ServiceMembercountry:CA2021-04-012021-06-300001366868us-gaap:ServiceMembercountry:CA2022-01-012022-06-300001366868us-gaap:ServiceMembercountry:CA2021-01-012021-06-300001366868us-gaap:ServiceMembersrt:EuropeMember2022-04-012022-06-300001366868us-gaap:ServiceMembersrt:EuropeMember2021-04-012021-06-300001366868us-gaap:ServiceMembersrt:EuropeMember2022-01-012022-06-300001366868us-gaap:ServiceMembersrt:EuropeMember2021-01-012021-06-300001366868srt:LatinAmericaMemberus-gaap:ServiceMember2022-04-012022-06-300001366868srt:LatinAmericaMemberus-gaap:ServiceMember2021-04-012021-06-300001366868srt:LatinAmericaMemberus-gaap:ServiceMember2022-01-012022-06-300001366868srt:LatinAmericaMemberus-gaap:ServiceMember2021-01-012021-06-300001366868us-gaap:ServiceMembergsat:OtherCountriesMember2022-04-012022-06-300001366868us-gaap:ServiceMembergsat:OtherCountriesMember2021-04-012021-06-300001366868us-gaap:ServiceMembergsat:OtherCountriesMember2022-01-012022-06-300001366868us-gaap:ServiceMembergsat:OtherCountriesMember2021-01-012021-06-300001366868us-gaap:ProductMembercountry:US2022-04-012022-06-300001366868us-gaap:ProductMembercountry:US2021-04-012021-06-300001366868us-gaap:ProductMembercountry:US2022-01-012022-06-300001366868us-gaap:ProductMembercountry:US2021-01-012021-06-300001366868us-gaap:ProductMembercountry:CA2022-04-012022-06-300001366868us-gaap:ProductMembercountry:CA2021-04-012021-06-300001366868us-gaap:ProductMembercountry:CA2022-01-012022-06-300001366868us-gaap:ProductMembercountry:CA2021-01-012021-06-300001366868us-gaap:ProductMembersrt:EuropeMember2022-04-012022-06-300001366868us-gaap:ProductMembersrt:EuropeMember2021-04-012021-06-300001366868us-gaap:ProductMembersrt:EuropeMember2022-01-012022-06-300001366868us-gaap:ProductMembersrt:EuropeMember2021-01-012021-06-300001366868us-gaap:ProductMembersrt:LatinAmericaMember2022-04-012022-06-300001366868us-gaap:ProductMembersrt:LatinAmericaMember2021-04-012021-06-300001366868us-gaap:ProductMembersrt:LatinAmericaMember2022-01-012022-06-300001366868us-gaap:ProductMembersrt:LatinAmericaMember2021-01-012021-06-300001366868us-gaap:ProductMembergsat:OtherCountriesMember2022-04-012022-06-300001366868us-gaap:ProductMembergsat:OtherCountriesMember2021-04-012021-06-300001366868us-gaap:ProductMembergsat:OtherCountriesMember2022-01-012022-06-300001366868us-gaap:ProductMembergsat:OtherCountriesMember2021-01-012021-06-300001366868gsat:TermsAgreementProcurementOfGoodsAndPerformingServicesForCustomerMember2022-06-300001366868gsat:TermsAgreementProcurementOfGoodsAndPerformingServicesForCustomerMember2021-12-310001366868gsat:TermsAgreementPerformanceObligationCompletionMember2022-06-300001366868us-gaap:LongTermContractWithCustomerMember2022-07-012022-06-300001366868gsat:GatewaySitesMember2022-06-300001366868gsat:FirstandSecondGenerationSatellitesMembergsat:GlobalStarSystemMembergsat:SpaceComponentMember2022-06-300001366868gsat:FirstandSecondGenerationSatellitesMembergsat:GlobalStarSystemMembergsat:SpaceComponentMember2021-12-310001366868gsat:GlobalStarSystemMembergsat:SpaceComponentMembergsat:SecondGenerationSatelliteOnGroundSpareMember2022-06-300001366868gsat:GlobalStarSystemMembergsat:SpaceComponentMembergsat:SecondGenerationSatelliteOnGroundSpareMember2021-12-310001366868gsat:GlobalStarSystemMembergsat:GroundComponentMember2022-06-300001366868gsat:GlobalStarSystemMembergsat:GroundComponentMember2021-12-310001366868us-gaap:ConstructionInProgressMembergsat:GlobalStarSystemMembergsat:SpaceComponentMember2022-06-300001366868us-gaap:ConstructionInProgressMembergsat:GlobalStarSystemMembergsat:SpaceComponentMember2021-12-310001366868us-gaap:ConstructionInProgressMembergsat:GlobalStarSystemMembergsat:GroundComponentMember2022-06-300001366868us-gaap:ConstructionInProgressMembergsat:GlobalStarSystemMembergsat:GroundComponentMember2021-12-310001366868us-gaap:ConstructionInProgressMemberus-gaap:PropertyPlantAndEquipmentOtherTypesMembergsat:GlobalStarSystemMember2022-06-300001366868us-gaap:ConstructionInProgressMemberus-gaap:PropertyPlantAndEquipmentOtherTypesMembergsat:GlobalStarSystemMember2021-12-310001366868gsat:GlobalStarSystemMember2022-06-300001366868gsat:GlobalStarSystemMember2021-12-310001366868us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-06-300001366868us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-12-310001366868us-gaap:EquipmentMember2022-06-300001366868us-gaap:EquipmentMember2021-12-310001366868us-gaap:LandAndBuildingMember2022-06-300001366868us-gaap:LandAndBuildingMember2021-12-310001366868us-gaap:LeaseholdImprovementsMember2022-06-300001366868us-gaap:LeaseholdImprovementsMember2021-12-310001366868gsat:SatellitesMember2022-01-012022-06-300001366868gsat:SatellitesMember2022-06-300001366868gsat:SatellitesMember2022-02-012022-02-250001366868gsat:NewGatewayAntennasMember2022-01-012022-06-300001366868gsat:A2019FacilityAgreementMember2022-06-300001366868gsat:A2019FacilityAgreementMember2021-12-310001366868gsat:ConvertibleEightPointZeroPercentSeniorNotesIssuedTwentyThirteenMember2013-05-310001366868gsat:ConvertibleEightPointZeroPercentSeniorNotesIssuedTwentyThirteenMember2022-06-300001366868gsat:ConvertibleEightPointZeroPercentSeniorNotesIssuedTwentyThirteenMember2021-12-310001366868gsat:A2019FacilityAgreementMember2019-11-3000013668682013-05-310001366868gsat:ConvertibleEightPointZeroPercentSeniorNotesIssuedTwentyThirteenMember2022-02-012022-03-3100013668682022-02-012022-02-280001366868gsat:PayrollProtectionProgramLoanCARESActMember2020-04-3000013668682021-06-012021-06-300001366868gsat:CompoundEmbeddedDerivativeWithTheSecondLienFacilityAgreementMember2022-06-300001366868gsat:CompoundEmbeddedDerivativeWithTheSecondLienFacilityAgreementMember2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMember2022-06-300001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMember2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMember2022-04-012022-06-300001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMember2021-04-012021-06-300001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMember2022-01-012022-06-300001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMember2021-01-012021-06-300001366868gsat:SecondLienTermLoanFacilityMember2022-04-012022-06-300001366868gsat:SecondLienTermLoanFacilityMember2021-04-012021-06-300001366868gsat:SecondLienTermLoanFacilityMember2022-01-012022-06-300001366868gsat:SecondLienTermLoanFacilityMember2021-01-012021-06-300001366868us-gaap:FairValueInputsLevel1Membergsat:A2019FacilityAgreementMember2022-06-300001366868gsat:A2019FacilityAgreementMemberus-gaap:FairValueInputsLevel2Member2022-06-300001366868us-gaap:FairValueInputsLevel3Membergsat:A2019FacilityAgreementMember2022-06-300001366868gsat:A2019FacilityAgreementMember2022-06-300001366868us-gaap:FairValueInputsLevel1Member2022-06-300001366868us-gaap:FairValueInputsLevel2Member2022-06-300001366868us-gaap:FairValueInputsLevel3Member2022-06-300001366868us-gaap:FairValueInputsLevel1Membergsat:A2019FacilityAgreementMember2021-12-310001366868gsat:A2019FacilityAgreementMemberus-gaap:FairValueInputsLevel2Member2021-12-310001366868us-gaap:FairValueInputsLevel3Membergsat:A2019FacilityAgreementMember2021-12-310001366868gsat:A2019FacilityAgreementMember2021-12-310001366868us-gaap:FairValueInputsLevel1Member2021-12-310001366868us-gaap:FairValueInputsLevel2Member2021-12-310001366868us-gaap:FairValueInputsLevel3Member2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:FairValueInputsLevel1Member2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:FairValueInputsLevel2Member2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:FairValueInputsLevel3Member2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputPriceVolatilityMembersrt:MinimumMember2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMembersrt:MaximumMemberus-gaap:MeasurementInputPriceVolatilityMember2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputExercisePriceMember2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputDiscountRateMember2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputSharePriceMember2021-12-310001366868gsat:CompoundEmbeddedDerivativeWithSecondLienTermLoanFacilityMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001366868gsat:CompoundEmbeddedDerivativeWithSecondLienTermLoanFacilityMemberus-gaap:MeasurementInputDiscountRateMember2021-12-3100013668682021-01-012021-12-310001366868us-gaap:CarryingReportedAmountFairValueDisclosureMembergsat:ConvertibleEightPointZeroPercentSeniorNotesIssuedTwentyThirteenMember2022-06-300001366868us-gaap:EstimateOfFairValueFairValueDisclosureMembergsat:ConvertibleEightPointZeroPercentSeniorNotesIssuedTwentyThirteenMember2022-06-300001366868us-gaap:CarryingReportedAmountFairValueDisclosureMembergsat:ConvertibleEightPointZeroPercentSeniorNotesIssuedTwentyThirteenMember2021-12-310001366868us-gaap:EstimateOfFairValueFairValueDisclosureMembergsat:ConvertibleEightPointZeroPercentSeniorNotesIssuedTwentyThirteenMember2021-12-310001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMember2022-02-170001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2022-02-170001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputExercisePriceMember2022-02-170001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputDiscountRateMember2022-02-170001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputSharePriceMember2022-02-170001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2022-03-090001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputExercisePriceMember2022-03-090001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputDiscountRateMember2022-03-090001366868gsat:CompoundEmbeddedConversionOptionWithEightPointZeroPercentNotesIssuedInTwentyThirteenMemberus-gaap:MeasurementInputSharePriceMember2022-03-0900013668682022-02-012022-02-25gsat:satellite00013668682022-02-2500013668682022-02-252022-02-250001366868gsat:ThermoCapitalPartnersLlcMember2022-06-300001366868gsat:ThermoCapitalPartnersLlcMember2021-12-310001366868gsat:ThermoCapitalPartnersLlcMember2019-02-280001366868gsat:ThermoCapitalPartnersLlcMember2021-01-012021-06-300001366868gsat:ThermoCapitalPartnersLlcMember2022-01-012022-06-300001366868gsat:A2019FacilityAgreementMembergsat:ThermoCapitalPartnersLlcMember2019-11-300001366868gsat:A2019FacilityAgreementMembergsat:ThermoCapitalPartnersLlcMember2019-11-012022-03-310001366868gsat:A2019FacilityAgreementMembergsat:ThermoCapitalPartnersLlcMember2022-01-012022-06-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
(Mark One) 
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                  to                

Commission file number 001-33117 
GLOBALSTAR, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 41-2116508
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)  
 
1351 Holiday Square Blvd.
Covington, Louisiana 70433
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (985) 335-1500
Securities registered pursuant to section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common Stock, par value $0.0001 per shareGSATNYSE American
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  x  No ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
(Do not check if a smaller reporting company) Emerging growth company
 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No x
 
As of July 29, 2022, 1,801 million shares of voting common stock were outstanding, and no shares of nonvoting common stock were authorized or outstanding. Unless the context otherwise requires, references to common stock in this Report mean the Registrant’s voting common stock.



FORM 10-Q

GLOBALSTAR, INC.
TABLE OF CONTENTS
 
 




PART I - FINANCIAL INFORMATION
 
Item 1. Financial Statements.
 
GLOBALSTAR, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share data)
(Unaudited) 
 Three Months EndedSix Months Ended
June 30,
2022
June 30,
2021
June 30,
2022
June 30,
2021
Revenue:  
Service revenue$33,048 $25,617 $62,392 $48,703 
Subscriber equipment sales3,752 4,662 7,180 8,505 
Total revenue36,800 30,279 69,572 57,208 
Operating expenses:  
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)10,695 9,123 21,489 18,200 
Cost of subscriber equipment sales3,097 2,858 5,663 5,757 
Cost of subscriber equipment sales - reduction in the value of inventory16 782 16 782 
Marketing, general and administrative9,693 9,681 19,034 19,778 
Reduction in value of long-lived assets525  525  
Depreciation, amortization and accretion24,130 23,843 47,913 47,959 
Total operating expenses48,156 46,287 94,640 92,476 
Loss from operations(11,356)(16,008)(25,068)(35,268)
Other (expense) income:  
Gain on extinguishment of debt 2,664  2,664 
Interest income and expense, net of amounts capitalized(7,187)(10,778)(16,717)(22,352)
Derivative loss(1,242)(1,310)(1,728)(2,439)
Foreign currency (loss) gain(7,123)4,425 (3,891)110 
Other272 (88)389 (66)
Total other (expense) income(15,280)(5,087)(21,947)(22,083)
Loss before income taxes(26,636)(21,095)(47,015)(57,351)
Income tax expense121 354 204 431 
Net loss$(26,757)$(21,449)$(47,219)$(57,782)
Other comprehensive loss:
Foreign currency translation adjustments5,315 (3,158)4,636 84 
Comprehensive loss$(21,442)$(24,607)$(42,583)$(57,698)
Net loss per common share:  
Basic$(0.01)$(0.01)$(0.03)$(0.03)
Diluted(0.01)(0.01)(0.03)(0.03)
Weighted-average shares outstanding:  
Basic1,799,886 1,791,943 1,798,784 1,736,158 
Diluted1,799,886 1,791,943 1,798,784 1,736,158 
 
See accompanying notes to unaudited interim condensed consolidated financial statements.
1


GLOBALSTAR, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share data)  
(Unaudited) 
 June 30, 2022December 31, 2021
ASSETS
Current assets:  
Cash and cash equivalents$13,141 $14,304 
Accounts receivable, net of allowance for credit losses of $2,986 and $2,962, respectively
24,117 21,182 
Inventory15,887 13,829 
Prepaid expenses and other current assets16,586 19,558 
Total current assets69,731 68,873 
Property and equipment, net708,005 672,156 
Operating lease right of use assets, net29,964 32,041 
Prepaid satellite construction costs and related customer receivable94,164  
Intangible and other assets, net of accumulated amortization of $11,836 and $11,189, respectively
42,287 41,036 
Total assets$944,151 $814,106 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$2,548 $6,247 
Vendor financing73,575  
Accrued expenses23,574 28,947 
Payables to affiliates411 444 
Deferred revenue39,872 25,927 
Total current liabilities139,980 61,565 
Long-term debt257,451 237,932 
Operating lease liabilities27,134 29,237 
Deferred revenue, net182,376 112,054 
Other non-current liabilities7,877 7,887 
Total non-current liabilities474,838 387,110 
Commitments and contingencies (Note 8)
Stockholders’ equity:  
Preferred Stock of $0.0001 par value; 100,000,000 shares authorized and none issued and outstanding at June 30, 2022 and December 31, 2021, respectively
  
Series A Preferred Convertible Stock of $0.0001 par value; one share authorized and none issued and outstanding at June 30, 2022 and December 31, 2021, respectively
  
Voting Common Stock of $0.0001 par value; 2,150,000,000 shares authorized; 1,800,477,322 and 1,796,528,871 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
180 180 
Nonvoting Common Stock of $0.0001 par value; no shares authorized and none issued and outstanding at June 30, 2022 and December 31, 2021, respectively
  
Additional paid-in capital2,153,195 2,146,710 
Accumulated other comprehensive income6,526 1,890 
Retained deficit(1,830,568)(1,783,349)
Total stockholders’ equity329,333 365,431 
Total liabilities and stockholders’ equity$944,151 $814,106 
 See accompanying notes to unaudited interim condensed consolidated financial statements.  
2


GLOBALSTAR, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)  
(Unaudited) 
 Common
Shares
Common
Stock
Amount
Additional
Paid-In
Capital
Accumulated Other Comprehensive Income (Loss)Retained
Deficit
Total
Balances – January 1, 20221,796,529 $180 $2,146,710 $1,890 $(1,783,349)$365,431 
Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation703 — 2,230 — — 2,230 
Contribution of services— — 47 47 
Recognition of stock-based compensation of employee stock purchase plan— — 117 — — 117 
Common stock issued in connection with conversion of 2013 8.00% Notes
2,253 — 2,548 — — 2,548 
Other comprehensive loss— — — (679)— (679)
Net loss— — — — (20,462)(20,462)
Balances – March 31, 20221,799,485 $180 $2,151,652 $1,211 $(1,803,811)$349,232 
Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation546 — 879 — — 879 
Contribution of services— — 47 — — 47 
Net issuance of stock through employee stock purchase plan and recognition of stock-based compensation446 — 617 — — 617 
Other comprehensive income— — — 5,315 — 5,315 
Net loss— — — — (26,757)(26,757)
Balances – June 30, 20221,800,477 $180 $2,153,195 $6,526 $(1,830,568)$329,333 

Common
Shares
Common
Stock
Amount
Additional
Paid-In
Capital
Accumulated Other Comprehensive Income (Loss)Retained
Deficit
Total
Balances – January 1, 20211,674,669 $167 $2,096,566 $(2,944)$(1,670,724)$423,065 
Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation1,998 — 1,932 — — 1,932 
Contribution of services— — 47 — — 47 
Recognition of stock-based compensation of employee stock purchase plan— — 79 — — 79 
Issuance of stock for warrant exercises115,036 12 43,666 — — 43,678 
Other comprehensive income— — — 3,242 — 3,242 
Net loss— — — — (36,333)(36,333)
Balances – March 31, 20211,791,703 $179 $2,142,290 $298 $(1,707,057)$435,710 
Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation173 — 576 — — 576 
Contribution of services— — 47 — — 47 
Net issuance of stock through employee stock purchase plan and recognition of stock-based compensation1,187 — 406 — — 406 
Other comprehensive loss— — — (3,158)— (3,158)
Net loss— — — — (21,449)(21,449)
Balances – June 30, 20211,793,063 $179 $2,143,319 $(2,860)$(1,728,506)$412,132 
See accompanying notes to unaudited interim condensed consolidated financial statements.
3


GLOBALSTAR, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Six Months Ended
 June 30,
2022
June 30,
2021
Cash flows provided by operating activities:  
Net loss$(47,219)$(57,782)
Adjustments to reconcile net loss to net cash provided by operating activities:  
Depreciation, amortization and accretion47,913 47,959 
Change in fair value of derivatives1,728 2,439 
Stock-based compensation expense2,380 2,186 
Amortization of deferred financing costs287 1,841 
Reduction in value of long-lived assets and inventory541 782 
Provision for credit losses558 696 
Noncash interest and accretion expense16,235 16,939 
Gain on extinguishment of debt (2,664)
Unrealized foreign currency loss (gain)4,139 (245)
Noncash reversal of tariff accrual (912)
Other, net(2,710)(430)
Changes in operating assets and liabilities:  
Accounts receivable3,737 (7,750)
Inventory(1,840)1,118 
Prepaid expenses and other current assets(227)(665)
Other assets605 (2,770)
Accounts payable and accrued expenses(8,106)4,416 
Payables to affiliates(33)(162)
Other non-current liabilities(370)(87)
Deferred revenue3,153 51,011 
Net cash provided by operating activities20,771 55,920 
Cash flows used in investing activities:  
Network upgrades (including capitalized interest)(18,511)(8,832)
Property and equipment additions(3,198)(2,288)
Sale of property and equipment 350 
Purchase of intangible assets(683)(1,228)
Net cash used in investing activities(22,392)(11,998)
Cash flows provided by (used in) financing activities:  
Principal payments of the 2009 Facility Agreement (89,164)
Proceeds from exercise of warrants 43,678 
Payments for debt and equity issuance costs (133)
Proceeds from issuance of common stock and exercise of options449 391 
Net cash provided by (used in) financing activities449 (45,228)
Effect of exchange rate changes on cash, cash equivalents and restricted cash9 (9)
Net decrease in cash, cash equivalents and restricted cash(1,163)(1,315)
Cash, cash equivalents and restricted cash, beginning of period14,304 68,023 
Cash, cash equivalents and restricted cash, end of period$13,141 $66,708 

As of:
June 30,
2022
December 31,
2021
Reconciliation of cash and cash equivalents
Cash and cash equivalents$13,141 $14,304 
Total cash and cash equivalents cash shown in the statement of cash flows$13,141 $14,304 
 Six Months Ended
 June 30,
2022
June 30,
2021
Supplemental disclosure of cash flow information:  
Cash paid for interest$ $3,977 
Supplemental disclosure of non-cash financing and investing activities:  
Increase in capitalized accrued interest for network upgrades$5,059 $1,041 
Capitalized accretion of debt discount and amortization of prepaid financing costs754 251 
Satellite construction assets acquired through vendor financing arrangement73,575  
Forgiveness of principal and interest of Paycheck Protection Program loan 5,030 

See accompanying notes to unaudited interim condensed consolidated financial statements.
4


GLOBALSTAR, INC.  
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
1. BASIS OF PRESENTATION

Globalstar, Inc. (“Globalstar” or the “Company”) provides Mobile Satellite Services (“MSS”) including voice and data communications services through its global satellite network. The Company’s only reportable segment is its MSS business. Thermo Companies, through commonly controlled affiliates, (collectively, “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 or minority equity owners of various Thermo entities.

The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”); however, management believes the disclosures made are adequate to make the information presented not misleading. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Globalstar Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on February 25, 2022 (the “2021 Annual Report”). 

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. The Company evaluates estimates on an ongoing basis.

These unaudited interim condensed consolidated financial statements include the accounts of Globalstar and all its subsidiaries. Intercompany transactions and balances have been eliminated in the consolidation. In the opinion of management, the information included herein includes all adjustments, consisting of normal recurring adjustments, that are necessary for a fair presentation of the Company’s condensed consolidated statements of operations, condensed consolidated balance sheets, condensed consolidated statements of stockholders' equity and condensed consolidated statements of cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the full year or any future period.


5


2. REVENUE

Disaggregation of Revenue

The following table discloses revenue disaggregated by type of product and service (amounts in thousands):
Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Service revenue:
Duplex$6,936 $7,243 $13,082 $13,898 
SPOT11,536 11,139 22,791 22,123 
Commercial IoT5,038 4,504 9,708 8,985 
Engineering and other9,538 2,731 16,811 3,697 
Total service revenue33,048 25,617 62,392 48,703 
Subscriber equipment sales:
Duplex$143 $331 $273 $624 
SPOT1,674 2,230 3,149 4,145 
Commercial IoT1,908 2,090 3,714 3,611 
Other27 11 44 125 
Total subscriber equipment sales3,752 4,662 7,180 8,505 
Total revenue$36,800 $30,279 $69,572 $57,208 

The Company is reimbursed by the customer under the Terms Agreement for certain costs incurred by the Company as it completes its performance obligations under the contract. During the three and six months ended June 30, 2022, the Company recognized revenue associated with these services of $8.8 million and $15.7 million, respectively. During the three and six months ended June 30, 2021, the Company recognized revenue associated with other performance obligations associated with the Terms Agreement of $2.2 million and $2.7 million, respectively; this revenue is included in Engineering and other service revenue in the table above.

The Company attributes equipment revenue to various countries based on the location where equipment is sold. Service revenue is generally attributed to the various countries based on the Globalstar entity that holds the customer contract. The following table discloses revenue disaggregated by geographical market (amounts in thousands):

Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Service revenue:
United States$24,875 $18,228 $47,163 $34,671 
Canada4,128 4,376 7,817 8,206 
Europe1,671 1,857 3,154 3,568 
Central and South America2,248 815 3,984 1,596 
Others126 341 274 662 
Total service revenue33,048 25,617 62,392 48,703 
Subscriber equipment sales:
United States$2,227 $2,438 $3,783 $4,610 
Canada879 1,118 1,677 1,867 
Europe309 527 945 1,006 
Central and South America328 571 757 992 
Others9 8 18 30 
Total subscriber equipment sales3,752 4,662 7,180 8,505 
Total revenue$36,800 $30,279 $69,572 $57,208 
6



Accounts Receivable

The Company has agreements whereby it acts as an agent to procure goods and perform services on behalf of the customer under the Terms Agreement. As of June 30, 2022 and December 31, 2021, the Company recorded $3.3 million and $6.5 million, respectively, in accounts receivable related to these arrangements.

In connection with the Company's performance under the Terms Agreement, the Company recorded receivables totaling $83.4 million, which represents amounts owed by the customer for the Company's completion of performance obligations under the contract. As of June 30, 2022, $8.6 million and $74.8 million were recorded as current and non-current receivables, respectively, in line with the expected service periods under the Terms Agreement.

Contract Liabilities

Contract liabilities, which are included in deferred revenue on the Company’s condensed consolidated balance sheet, represent the Company’s obligation to transfer service or equipment to a customer from whom it has previously received consideration. The amount of revenue recognized during the six months ended June 30, 2022 and 2021 from performance obligations included in the contract liability balance at the beginning of these periods was $18.3 million and $18.8 million, respectively.

The duration of the Company’s contracts with subscribers is generally one year or less. As of June 30, 2022, the Company expects to recognize $39.9 million, or approximately 18%, of its remaining performance obligations during the next twelve months.

Contract liabilities also include deferred revenue associated with the Terms Agreement. The Company recorded deferred revenue for advance payments received from the customer for services expected to be performed in the future, totaling $75.0 million as of June 30, 2022. The Company also records deferred revenue for the reimbursement (and anticipated reimbursement) of costs incurred in connection with ongoing network upgrades, construction costs under the satellite procurement agreement and other performance obligations under the Terms Agreement, totaling $124.8 million as of June 30, 2022. In accordance with applicable accounting guidance, the Company records imputed interest associated with the significant financing component, totaling $3.9 million as of June 30, 2022, which is related to and included in the balances associated with certain of the items recorded to deferred revenue discussed above. Deferred revenue is classified as either short-term or long-term consistent with the expected timing of the Company's obligation to provide services to the customer or the recoupment period defined in the Terms Agreement. As of June 30, 2022, the Company has recorded $15.9 million and $180.7 million as short-term and long-term deferred revenue, respectively. The total amount of deferred revenue associated with this customer is also reflected net of a contract asset of $3.1 million in the Company's condensed consolidated balance sheet as of June 30, 2022.

7


3. LEASES

The following tables disclose the components of the Company’s finance and operating leases (amounts in thousands):
As of:As of:
June 30, 2022December 31, 2021
Operating leases:
Right-of-use asset, net$29,964 $32,041 
Short-term lease liability (recorded in accrued expenses)2,442 2,501 
Long-term lease liability27,134 29,237 
Total operating lease liabilities$29,576 $31,738 
Finance leases:
Right-of-use asset, net (recorded in intangible and other current assets, net)$5 $8 
Short-term lease liability (recorded in accrued expenses)4 6 
Long-term lease liability (recorded in non-current liabilities)2 3 
Total finance lease liabilities$6 $9 

Lease Cost

The components of lease cost are reflected in the table below (amounts in thousands):
Three Months EndedSix Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Operating lease cost:
Amortization of right-of-use assets$604 $663 $1,324 $1,154 
Interest on lease liabilities632 393 1,277 711 
Capitalized lease cost(244) (487) 
Finance lease cost:
Amortization of right-of-use assets1 1 3 8 
Short-term lease cost144 41 208 79 
Total lease cost$1,137 $1,098 $2,325 $1,952 

Interest on finance lease liabilities was less than $0.1 million for the three and six months ended June 30, 2022 and 2021; accordingly, these amounts are not shown in the table above.

8


Weighted-Average Remaining Lease Term and Discount Rate

The following table discloses the weighted-average remaining lease term and discount rate for finance and operating leases.
As of:As of:
June 30, 2022December 31, 2021
Weighted-average lease term
Finance leases1.2 years1.6 years
Operating Leases10.2 years10.6 years
Weighted-average discount rate
Finance leases7.6 %7.0 %
Operating leases8.4 %8.4 %

Supplemental Cash Flow Information

The below table discloses supplemental cash flow information for finance and operating leases (in thousands):
Six Months Ended
June 30, 2022June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$2,536 $2,080 

Operating and financing cash flows from finance leases were each less than $0.1 million for each of the six months ended June 30, 2022 and 2021; accordingly, these cash flows are not shown in the table above.

Maturity Analysis

The following table reflects undiscounted cash flows on an annual basis for the Company’s lease liabilities as of June 30, 2022 (amounts in thousands):
Operating LeasesFinance Leases
2022 (remaining)$2,421 $3 
20234,876 3 
20244,749  
20254,778  
20264,825  
Thereafter22,322  
Total lease payments$43,971 $6 
Imputed interest(14,395) 
Discounted lease liability$29,576 $6 

As of June 30, 2022, the Company executed additional operating leases for new gateway locations. These leases have not yet commenced as of June 30, 2022 since the lessors are continuing to ready the sites for use. Accordingly, these leases are not included on the balance sheet as of June 30, 2022, or in the maturity table above. The Company is in the process of evaluating these lease obligations and expects the impact of these leases to be an increase of lease liabilities of approximately $4.7 million.

9


4. PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in thousands): 
June 30,
2022
December 31,
2021
Globalstar System:  
Space component  
First and second-generation satellites in service$1,261,793 $1,195,509 
Second-generation satellite, on-ground spare 32,442 
Ground component293,465 282,268 
Construction in progress:  
Space component57,542 16,394 
Ground component25,756 33,998 
Other7,429 4,123 
Total Globalstar System1,645,985 1,564,734 
Internally developed and purchased software22,000 20,823 
Equipment8,691 8,590 
Land and buildings1,694 1,149 
Leasehold improvements2,081 2,088 
Total property and equipment1,680,451 1,597,384 
Accumulated depreciation(972,446)(925,228)
Total property and equipment, net$708,005 $672,156 

Amounts included in "second-generation satellite, on-ground spare" in the table above consist of costs related to one of the Company's second-generation satellites that was stored as an on-ground spare satellite until its launch in June 2022. The costs to prepare this satellite for launch were included in "construction in progress - space component" in the table above prior to its launch in June 2022. During the second quarter of 2022, $65.1 million in costs associated with the construction and launch of this spare satellite (including capitalized interest) were placed into service. Since this satellite is expected to remain as an in-orbit spare and will only be raised to its operational orbit at a future date if needed, it was placed into service following its successful launch. The customer under the Terms Agreement has reimbursed 85% of the costs incurred to prepare and launch this satellite. These reimbursements are recorded in deferred revenue on the Company's consolidated balance sheet as of June 30, 2022 and are expected to be recognized in service revenue as performance obligations are completed in accordance with the Terms Agreement. See Note 2: Revenue for further discussion.

In February 2022, the Company entered into an agreement for the purchase of new satellites that will replenish the Company's existing satellite constellation. As of June 30, 2022, the Company recorded $19.4 million as prepaid satellite construction costs and $54.2 million in construction in progress on its balance sheet reflecting the milestone work completed under this agreement. The customer under the Terms Agreement will reimburse 95% of these capital expenditures. In accordance with the expected timing of reimbursement, $4.4 million is recorded in Accounts receivable and $74.8 million is recorded as a non-current receivable in Prepaid satellite construction costs and related customer receivable. The satellite construction assets acquired through this vendor financing arrangement are included in the supplemental section of the Company's condensed consolidated statement of cash flows as non-cash financing and investing activities. See further discussion in Note 2: Revenue, Note 5: Long-Term Debt and Other Financing Arrangements and Note 8: Commitments and Contingencies.

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. During 2022, the Company placed $11.2 million of costs into service associated with these antennas (including capitalized interest), which are included in ground component in the table above. These capital expenditures relate primarily to gateway upgrade work in connection with the Terms Agreement.


10


5. LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS 
Long-term debt consists of the following (in thousands): 
 June 30, 2022December 31, 2021
 Principal
Amount
Unamortized Discount and Deferred Financing CostsCarrying
Value
Principal
Amount
Unamortized Discount and Deferred Financing CostsCarrying
Value
2019 Facility Agreement282,023 24,572 257,451 263,812 27,287 236,525 
8.00% Convertible Senior Notes Issued in 2013
   1,407  1,407 
Total Debt282,023 24,572 257,451 265,219 27,287 237,932 

The principal amounts shown above include payment of in-kind interest. The carrying value is net of deferred financing costs and any discounts to the loan amounts at issuance, including accretion. Excluded from the table are obligations related to a vendor financing arrangement discussed below.
 
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 is scheduled to mature in November 2025. The loans under the 2019 Facility Agreement bear interest at a blended rate of 13.5% per annum to be paid in kind (or in cash at the option of the Company). As of June 30, 2022, the Company was in compliance with the covenants of the 2019 Facility Agreement, except as it relates to capital expenditures. In August 2022, the Company received a waiver letter from its lenders increasing permitted capital expenditures for 2022.

The 2019 Facility Agreement requires mandatory prepayments of principal with any Excess Cash Flow (as defined and calculated in the 2019 Facility Agreement) on a semi-annual basis. The Company generated excess cash flow for the six-month measurement period ended June 30, 2022 and expects to make a prepayment of approximately $6.0 million in August 2022.

Refer to Note 6: Derivatives and Note 7: Fair Value Measurements for further discussion on the compound embedded derivative bifurcated from the 2019 Facility Agreement.

8.00% Convertible Senior Notes Issued in 2013
 
In May 2013, the Company issued $54.6 million aggregate principal amount of its 2013 8.00% Notes Interest was paid in cash at a rate of 5.75% and in additional notes at a rate of 2.25%. In February 2022, the Company notified the holders of the 8.00% Notes of its intention to redeem all of the outstanding amount of principal and interest in March 2022. Prior to the Company's intended redemption of the 8.00% Notes, the holders converted the remaining principal amount outstanding of $1.4 million into 2.3 million shares of Globalstar common stock in February and March 2022. The 2013 8.00% Notes were converted into shares of common stock at a conversion price of $0.69 per share of common stock.

As a result of the conversions during the first quarter of 2022, the Company recorded gains and losses on extinguishment of debt resulting from the difference between the fair value of shares of Globalstar common stock issued to the holders and the principal amount of the notes that converted as well as the write-offs of the embedded derivative associated with the 2013 8.00% Notes. The net impact to the Company's condensed consolidated statement of operations for the first quarter of 2022 was a gain of less than $0.1 million.

Refer to Note 6: Derivatives and Note 7: Fair Value Measurements for further discussion on the compound embedded derivative bifurcated from the 2013 8.00% Notes.
11



Vendor Financing

In February 2022, the Company entered into a satellite procurement agreement (see Note 8: Commitments and Contingencies for further discussion). This agreement provides for payment deferrals of milestone payments through August 2022 at a 0% interest rate. As of June 30, 2022, the Company had recorded $73.6 million in short-term vendor financing on its condensed consolidated balance sheet associated with this agreement. Deferred payments are due in August 2022 under the terms of the agreement. The Company intends to seek an extension of the maturity date while it pursues debt financing for the funding of the construction and launch costs for these satellites.

2009 Facility Agreement 

In 2009, the Company entered into a facility agreement with a syndicate of bank lenders, including BNP Paribas, Société Générale, Natixis, Crédit Agricole Corporate and Investment Bank and Crédit Industriel et Commercial, as arrangers, and BNP Paribas, as the security agent (the "2009 Facility Agreement"). The 2009 Facility Agreement was fully repaid in November 2021. As a result of prepayments made under the 2009 Facility Agreement during the second quarter of 2021, the Company wrote off $2.3 million in deferred financing costs, which represents the portion of debt prepaid by the Company in the second quarter of 2021, and which was recorded as a loss on extinguishment of debt on its condensed consolidated statements of operations.

Paycheck Protection Program Loan

In April 2020, the Company sought relief under the CARES Act and received a $5.0 million loan under the Paycheck Protection Program ("PPP"), (the "PPP Loan"). In June 2021, the Small Business Administration ("SBA") approved the Company's request for forgiveness of all amounts outstanding under the PPP Loan, including accrued interest. The Company evaluated the applicable accounting guidance relative to the PPP Loan and accounted for the proceeds of the PPP Loan as debt under ASC 470. As the entire principal balance, including accrued interest, was forgiven in June 2021, the Company recorded a gain on extinguishment of debt totaling $5.0 million on its condensed consolidated statements of operations for the period ended June 30, 2021.

12


6. DERIVATIVES 

The Company has identified various embedded derivatives resulting from certain features in the Company’s existing borrowing arrangements, requiring recognition on its condensed consolidated balance sheets. None of these derivative instruments are designated as a hedge. The following table discloses the fair values of the derivative instruments on the Company’s condensed consolidated balance sheets (in thousands):

 June 30, 2022December 31, 2021
Derivative (liabilities) assets:  
Compound embedded derivative with the 2019 Facility Agreement$(1,460)$484 
Compound embedded derivative with the 2013 8.00% Notes
$ (1,364)

As of June 30, 2022 and December 31, 2021, the derivative (liability) asset recorded for the Compound embedded derivative with the 2019 Facility Agreement was reflected in Other non-current liabilities and Intangible and other assets, net, respectively, on the Company's condensed consolidated balance sheets. During the first quarter of 2022, the remaining principal amount of the 2013 8.00% Notes was converted into shares of Globalstar common stock; accordingly, the associated derivative is no longer outstanding.

 The following table discloses the changes in value recorded as derivative loss in the Company’s condensed consolidated statement of operations (in thousands): 

 Three Months EndedSix Months Ended
 June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Compound embedded derivative with the 2013 8.00% Notes
$ $(1,077)$216 $(2,821)
Compound embedded derivative with the 2019 Facility Agreement(1,242)(233)(1,944)382 
Total derivative loss$(1,242)$(1,310)$(1,728)$(2,439)

The fair value of each embedded derivative is marked-to-market at the end of each reporting peri