UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 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) (State or Other Jurisdiction of Incorporation or Organi ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) Presents Globalstar's unaudited interim consolidated financial statements, detailing operations, balance sheets, equity, cash flows, and key notes [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20%28LOSS%29) Consolidated Statements of Operations (Three Months Ended September 30) | Metric (in thousands) | 2022 | 2021 | YoY Change (%) | | :-------------------- | :--- | :--- | :------------- | | Service revenue | $33,301 | $27,848 | 19.6% | | Subscriber equipment sales | $4,325 | $4,766 | -9.3% | | Total revenue | $37,626 | $32,614 | 15.4% | | Total operating expenses | $224,267 | $47,328 | 373.9% | | Loss from operations | $(186,641) | $(14,714) | 1168.5% | | Net loss | $(204,361) | $(30,885) | 561.6% | | Basic Net loss per common share | $(0.11) | $(0.02) | 450.0% | Consolidated Statements of Operations (Nine Months Ended September 30) | Metric (in thousands) | 2022 | 2021 | YoY Change (%) | | :-------------------- | :--- | :--- | :------------- | | Service revenue | $95,693 | $76,551 | 25.0% | | Subscriber equipment sales | $11,505 | $13,271 | -13.3% | | Total revenue | $107,198 | $89,822 | 19.3% | | Total operating expenses | $318,907 | $139,804 | 128.1% | | Loss from operations | $(211,709) | $(49,982) | 323.6% | | Net loss | $(251,580) | $(88,667) | 183.7% | | Basic Net loss per common share | $(0.14) | $(0.05) | 180.0% | [Consolidated Balance Sheets](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Consolidated Balance Sheet (as of September 30, 2022 vs. December 31, 2021) | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change | | :-------------------- | :----------- | :----------- | :----- | | Total assets | $746,538 | $814,106 | $(67,568) | | Total current liabilities | $146,943 | $61,565 | $85,378 | | Long-term debt | $262,175 | $237,932 | $24,243 | | Total stockholders' equity | $135,580 | $365,431 | $(229,851) | - Prepaid satellite construction costs and related customer receivable increased significantly from $0 to **$83.2 million**, reflecting new satellite procurement activities[14](index=14&type=chunk) - Deferred revenue (current and non-current) increased substantially from **$25.9 million** to **$53.1 million** (current) and **$112.1 million** to **$171.7 million** (non-current), primarily due to advanced payments for wholesale capacity services under the Service Agreements[14](index=14&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY) Changes in Stockholders' Equity (Nine Months Ended September 30, 2022) | Metric (in thousands) | January 1, 2022 | September 30, 2022 | Change | | :-------------------- | :-------------- | :----------------- | :----- | | Total Stockholders' Equity | $365,431 | $135,580 | $(229,851) | | Net loss | $(1,783,349) (Retained Deficit) | $(2,034,929) (Retained Deficit) | $(251,580) | | Additional Paid-In Capital | $2,146,710 | $2,155,117 | $8,407 | | Accumulated Other Comprehensive Income | $1,890 | $15,212 | $13,322 | - The significant decrease in total stockholders' equity is primarily driven by the net loss of **$204.4 million** for the three months ended September 30, 2022, and **$251.6 million** for the nine months ended September 30, 2022[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Consolidated Statements of Cash Flows (Nine Months Ended September 30) | Activity (in thousands) | 2022 | 2021 | Change | | :---------------------- | :--- | :--- | :----- | | Net cash provided by operating activities | $31,705 | $107,166 | $(75,461) | | Net cash used in investing activities | $(25,306) | $(30,033) | $4,727 | | Net cash used in financing activities | $(5,886) | $(82,725) | $76,839 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $445 | $(5,649) | $6,094 | - Operating cash flow decreased significantly due to unfavorable working capital changes, despite higher net income after non-cash adjustments. In 2021, working capital was favorably impacted by **$95.5 million** in prepayments from the Partner[180](index=180&type=chunk) - Investing activities saw lower cash usage in 2022 due to gateway upgrades nearing completion, while still funding network upgrades and the launch of the on-ground spare satellite[181](index=181&type=chunk) - Financing activities in 2022 primarily included a **$6.3 million** principal repayment of the 2019 Facility Agreement, a significant reduction compared to 2021 which included **$126.7 million** in 2009 Facility Agreement payments offset by **$43.7 million** from warrant exercises[182](index=182&type=chunk) [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=9&type=section&id=NOTES%20TO%20UNAUDITED%20INTERIM%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [1. Basis of Presentation](index=9&type=section&id=1.%20BASIS%20OF%20PRESENTATION) - Globalstar provides Mobile Satellite Services (MSS) including voice, data, and wholesale capacity through its global satellite network, with Thermo Companies as the principal owner[25](index=25&type=chunk) - Apple Inc. (Partner) announced new satellite-enabled services in September 2022, for which Globalstar will be the satellite operator. The Services are expected to launch in Q4 2022[29](index=29&type=chunk)[31](index=31&type=chunk) - Globalstar terminated second-generation Duplex services in early 2021, making it permanent after the Partner's announcement, leading to a **$174.3 million** reduction in value of related assets in Q3 2022[32](index=32&type=chunk)[33](index=33&type=chunk) [2. Revenue](index=10&type=section&id=2.%20REVENUE) Revenue Disaggregation by Type (Three Months Ended September 30) | Revenue Type (in thousands) | 2022 | 2021 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Duplex service | $9,021 | $9,632 | -6.3% | | SPOT service | $11,753 | $11,873 | -1.0% | | Commercial IoT service | $4,673 | $4,458 | 4.8% | | Wholesale capacity services | $6,972 | $1,301 | 435.9% | | Total service revenue | $33,301 | $27,848 | 19.6% | | Total subscriber equipment sales | $4,325 | $4,766 | -9.3% | | Total revenue | $37,626 | $32,614 | 15.4% | Revenue Disaggregation by Type (Nine Months Ended September 30) | Revenue Type (in thousands) | 2022 | 2021 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Duplex service | $22,103 | $23,530 | -6.0% | | SPOT service | $34,544 | $33,996 | 1.6% | | Commercial IoT service | $14,381 | $13,443 | 6.9% | | Wholesale capacity services | $22,640 | $3,999 | 466.1% | | Total service revenue | $95,693 | $76,551 | 25.0% | | Total subscriber equipment sales | $11,505 | $13,271 | -13.3% | | Total revenue | $107,198 | $89,822 | 19.3% | - Wholesale capacity services revenue saw a substantial increase, driven by satellite network access and related services under the Service Agreements with Apple Inc.[35](index=35&type=chunk)[150](index=150&type=chunk) Accounts Receivable (as of September 30, 2022 vs. December 31, 2021) | Receivable Type (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change | | :----------------------------- | :----------- | :----------- | :----- | | Subscriber accounts receivable | $13,954 | $12,825 | $1,129 | | Wholesale capacity accounts receivable | $12,727 | $1,861 | $10,866 | | Agency agreement accounts receivable | $2,913 | $6,496 | $(3,583) | | Long-term wholesale capacity accounts receivable | $69,646 | $0 | $69,646 | | Total accounts receivable | $99,240 | $21,182 | $78,058 | Contract Liabilities (as of September 30, 2022 vs. December 31, 2021) | Liability Type (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change | | :---------------------------- | :----------- | :----------- | :----- | | Short-term contract liabilities | $53,121 | $25,927 | $27,194 | | Long-term contract liabilities | $171,651 | $112,054 | $59,597 | | Total contract liabilities | $224,772 | $137,981 | $86,791 | - Wholesale capacity contract liabilities, particularly advanced payments for services, significantly increased from **$111.3 million** to **$199.9 million**, reflecting ongoing work under the Service Agreements[46](index=46&type=chunk) [3. Leases](index=12&type=section&id=3.%20LEASES) Operating Lease Liabilities (as of September 30, 2022 vs. December 31, 2021) | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change | | :-------------------- | :----------- | :----------- | :----- | | Right-of-use asset, net | $28,396 | $32,041 | $(3,645) | | Total operating lease liabilities | $28,260 | $31,738 | $(3,478) | - The Company began capitalizing certain lease costs related to the Service Agreements in Q4 2021, which will be amortized over the related performance obligation term[49](index=49&type=chunk) - Additional operating leases for new gateway locations, with an expected impact of approximately **$4.7 million** in right-of-use assets and lease liabilities, were executed but not yet commenced as of September 30, 2022[55](index=55&type=chunk) [4. Property and Equipment](index=15&type=section&id=4.%20PROPERTY%20AND%20EQUIPMENT) Property and Equipment, Net (as of September 30, 2022 vs. December 31, 2021) | Component (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change | | :----------------------- | :----------- | :----------- | :----- | | First and second-generation satellites in service | $1,262,254 | $1,195,509 | $66,745 | | Second-generation satellite, on-ground spare | $0 | $32,442 | $(32,442) | | Ground component | $79,848 | $282,268 | $(202,420) | | Construction in progress: Space component | $63,504 | $16,394 | $47,110 | | Construction in progress: Ground component | $16,303 | $33,998 | $(17,695) | | Total property and equipment, net | $532,680 | $672,156 | $(139,476) | - A second-generation on-ground spare satellite was successfully launched in June 2022 and placed into service, contributing **$66.7 million** in costs[56](index=56&type=chunk) - The Company recorded **$161.2 million** in reduction in value of long-lived assets (primarily ground component and construction in progress) during Q3 2022 due to the discontinuation of second-generation Duplex services[59](index=59&type=chunk)[60](index=60&type=chunk) - New satellite construction costs totaled **$13.5 million** in prepaid costs and **$56.4 million** in construction in progress as of September 30, 2022, with **95%** expected to be reimbursed by the Partner[57](index=57&type=chunk) [5. Long-Term Debt and Other Financing Arrangements](index=16&type=section&id=5.%20LONG-TERM%20DEBT%20AND%20OTHER%20FINANCING%20ARRANGEMENTS) Long-Term Debt and Vendor Financing (in thousands) | Debt Type | Sep 30, 2022 (Carrying Value) | Dec 31, 2021 (Carrying Value) | Change | | :-------------------------- | :---------------------------- | :---------------------------- | :----- | | 2019 Facility Agreement | $262,175 | $236,525 | $25,650 | | Vendor financing | $63,765 | $0 | $63,765 | | 8.00% Convertible Senior Notes Issued in 2013 | $0 | $1,407 | $(1,407) | | Total debt and vendor financing | $325,940 | $237,932 | $88,008 | - The 2019 Facility Agreement, maturing in November 2025, had a principal outstanding of **$285.3 million** as of September 30, 2022, and requires mandatory prepayments based on excess cash flow[62](index=62&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - Vendor financing of **$63.8 million** was recorded for the new satellite procurement agreement with MDA, with an amendment in October 2022 extending payment deferrals and introducing **7%** annual interest[65](index=65&type=chunk)[66](index=66&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) - The remaining **$1.4 million** principal of the 2013 **8.00%** Convertible Senior Notes was converted into **2.3 million** shares of common stock in Q1 2022, resulting in a net gain of less than **$0.1 million** on extinguishment[68](index=68&type=chunk)[69](index=69&type=chunk) - The Company is actively pursuing new debt financing in Q4 2022 to fund the construction and launch costs for the new satellites, as required by the Service Agreements[67](index=67&type=chunk)[190](index=190&type=chunk) [6. Derivatives](index=18&type=section&id=6.%20DERIVATIVES) Fair Values of Derivative Instruments (in thousands) | Derivative Instrument | Sep 30, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Compound embedded derivative with the 2019 Facility Agreement | $(798) | $484 | | Compound embedded derivative with the 2013 8.00% Notes | $0 | $(1,364) | Derivative Gain (Loss) (in thousands) | Period | 2022 (in thousands) | 2021 (in thousands) | | :----- | :------------------ | :------------------ | | Three Months Ended Sep 30 | $662 | $229 | | Nine Months Ended Sep 30 | $(1,066) | $(2,210) | - The 2013 **8.00%** Notes derivative is no longer outstanding after conversion in Q1 2022. The 2019 Facility Agreement derivative's fair value changed from an asset to a liability, driven by increased probability of refinancing[73](index=73&type=chunk)[78](index=78&type=chunk)[82](index=82&type=chunk) [7. Fair Value Measurements](index=18&type=section&id=7.%20FAIR%20VALUE%20MEASUREMENTS) - The Company's derivatives are classified as Level 3 fair value measurements, requiring significant unobservable inputs[78](index=78&type=chunk) Reduction in the Value of Assets (in thousands) | Asset Type | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :------------------------------ | :----------------------------- | | Prepaid licenses and royalties (current) | $183 | $183 | | Prepaid licenses and royalties (non-current) | $4,514 | $4,514 | | Internally developed technology and software | $1,271 | $1,271 | | Spectrum intangible assets | $142 | $667 | | Property and equipment, net | $159,891 | $159,891 | | Grand Total | $166,001 | $166,526 | - A reduction in the value of inventory totaling **$8.5 million** was recorded in Q3 2022 due to the discontinuation of second-generation Duplex products and related prepayments[90](index=90&type=chunk) [8. Commitments and Contingencies](index=21&type=section&id=8.%20COMMITMENTS%20AND%20CONTINGENCIES) - The Service Agreements with Apple Inc. require Globalstar to allocate **85%** of its network capacity, provide and maintain required resources, prioritize services, and maintain quality standards[93](index=93&type=chunk) - Globalstar is required to refinance all outstanding loans under the 2019 Facility Agreement upon (Thermo's portion) and within **90 days** (other lenders' portion) of the Services commencement[94](index=94&type=chunk) - The Partner may elect to receive warrants to purchase up to **2.64%** of Globalstar's common stock, with an estimated **49.1 million** shares and **$49.8 million** in proceeds[95](index=95&type=chunk)[110](index=110&type=chunk) - The Satellite Procurement Agreement with MDA for **17** new satellites has a total contract price of **$327.0 million**, with **95%** of capital expenditures and certain other costs to be reimbursed by the Partner[97](index=97&type=chunk) [9. Related Party Transactions](index=23&type=section&id=9.%20RELATED%20PARTY%20TRANSACTIONS) - Payables to Thermo and other affiliates were **$0.1 million** as of September 30, 2022, down from **$0.4 million** at December 31, 2021[99](index=99&type=chunk) - Thermo's participation in the 2019 Facility Agreement was **$95.1 million**, with **$9.7 million** in paid-in-kind interest accrued during the nine months ended September 30, 2022[103](index=103&type=chunk) - A lock-up and right of first offer agreement between Partner and Thermo restricts Thermo from transferring Globalstar common stock if it would reduce their holding below **51%** for **5 years** from Service Launch[104](index=104&type=chunk) [10. Pensions and Other Employee Benefits](index=24&type=section&id=10.%20PENSIONS%20AND%20OTHER%20EMPLOYEE%20BENEFITS) - The Company's Retirement Plan was terminated and settled in August 2022, resulting in a **$1.5 million** pension settlement loss[106](index=106&type=chunk)[173](index=173&type=chunk) [11. Loss Per Share](index=24&type=section&id=11.%20LOSS%20PER%20SHARE) Net Loss Per Common Share | Period | Basic & Diluted EPS (2022) | Basic & Diluted EPS (2021) | | :----- | :------------------------- | :------------------------- | | Three Months Ended Sep 30 | $(0.11) | $(0.02) | | Nine Months Ended Sep 30 | $(0.14) | $(0.05) | - Approximately **9.4 million** and **8.8 million** shares of potential common stock were excluded from diluted EPS calculations for the three and nine months ended September 30, 2022, respectively, due to their anti-dilutive effect[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses Globalstar's financial condition, operations, and strategic shift towards IoT and wholesale capacity services [Overview](index=26&type=section&id=Overview) - Globalstar provides Mobile Satellite Services (MSS) including voice, data, and wholesale capacity through its global satellite network[115](index=115&type=chunk) - The Company entered a **$327.0 million** agreement to acquire **17** new satellites by 2025, with **95%** of capital expenditures to be reimbursed by Apple Inc. (Partner) under the Service Agreements[116](index=116&type=chunk) - Apple Inc. announced new satellite-enabled services in September 2022, for which Globalstar will be the satellite operator, expected to launch in Q4 2022[118](index=118&type=chunk) [Communications Products and Services](index=26&type=section&id=Communications%20Products%20and%20Services) - Globalstar offers Duplex (two-way voice/data), SPOT (one/two-way messaging/location), Commercial IoT (one-way data), Wholesale Capacity Services (satellite network access for Partner), and Engineering and Other services[119](index=119&type=chunk) - The Company terminated second-generation Duplex services in early 2021, permanently abandoning related assets in Q3 2022 due to a strategic shift towards IoT-enabled devices and the Service Agreements[121](index=121&type=chunk) - New Commercial IoT offerings include the Realm Enablement Suite, featuring Integrity 150 (solar-powered asset tracking) and ST150M (satellite modem module), expanding environmentally friendly initiatives[122](index=122&type=chunk) [Globalstar System](index=27&type=section&id=Globalstar%20System) - The Globalstar System comprises a constellation of Low Earth Orbit (LEO) satellites (second-generation and first-generation) and active ground stations (gateways)[123](index=123&type=chunk)[115](index=115&type=chunk) - Second-generation satellites are designed for longer lifespan, **40%** greater capacity, and lower cost compared to first-generation satellites[123](index=123&type=chunk) - The system utilizes patented CDMA technology for ground network communication and proprietary technology for SPOT and Commercial IoT services, aiming for superior service levels compared to geostationary (GEO) satellites[124](index=124&type=chunk)[125](index=125&type=chunk) [Customers](index=27&type=section&id=Customers) - As of September 30, 2022, Globalstar had approximately **762,000** subscribers across various markets, including recreation, government, oil and gas, and maritime[126](index=126&type=chunk) - Approximately **25,000** subscribers in Russia were removed from the count in Q1 2022 due to service disconnection following the invasion of Ukraine[126](index=126&type=chunk)[146](index=146&type=chunk) - Wholesale capacity revenue is primarily derived from the Partner (Apple Inc.), with intentions to offer remaining satellite capacity to other commercial customers for IoT and other initiatives[127](index=127&type=chunk) [Spectrum and Regulatory Structure](index=28&type=section&id=Spectrum%20and%20Regulatory%20Structure) - Globalstar benefits from a worldwide allocation of radio frequency spectrum, enabling cost-effective global deployment of products and services[128](index=128&type=chunk) - The FCC granted authority in 2017 for terrestrial broadband services over **11.5 MHz** of licensed MSS spectrum, designated as Band 53 by 3GPP, with a 5G variant known as n53 approved in 2020[129](index=129&type=chunk)[130](index=130&type=chunk) - Qualcomm Technologies' Snapdragon X65 modem-RF System includes support for Band n53, significantly expanding the potential device ecosystem, further enhanced by its inclusion in Partner's cellular-enabled devices[131](index=131&type=chunk) [Performance Indicators](index=29&type=section&id=Performance%20Indicators) - Key performance indicators include total revenue, subscriber growth and churn rate, average monthly revenue per user (ARPU), operating income, adjusted EBITDA, and capital expenditures[137](index=137&type=chunk) Average Number of Subscribers and ARPU (Monthly) | Metric | Sep 30, 2022 (Avg Subscribers) | Sep 30, 2021 (Avg Subscribers) | Sep 30, 2022 (ARPU) | Sep 30, 2021 (ARPU) | | :---------------- | :----------------------------- | :----------------------------- | :------------------ | :------------------ | | Duplex | 41,204 | 45,004 | $72.98 | $71.34 | | SPOT | 276,203 | 271,843 | $14.18 | $14.56 | | Commercial IoT | 444,397 | 410,630 | $3.51 | $3.62 | | Total | 762,232 | 754,325 | | | [Revenue Analysis](index=29&type=section&id=Revenue%20Analysis) - Total revenue increased **15%** to **$37.6 million** for the three months and **19%** to **$107.2 million** for the nine months ended September 30, 2022, primarily driven by wholesale capacity services[135](index=135&type=chunk) - Duplex service revenue decreased **6%** for both periods due to an **8-10%** decrease in average subscribers, a trend expected to continue as investments shift to IoT[147](index=147&type=chunk) - Commercial IoT service revenue increased **5-7%** due to an increase in average subscribers (**8%** for three months, **6%** for nine months), despite production delays from component shortages[149](index=149&type=chunk) - Wholesale capacity service revenue surged by **$5.7 million** (three months) and **$18.6 million** (nine months), driven by performance obligations under the Service Agreements, including gateway expansion and Procurement Agreement work[150](index=150&type=chunk) - SPOT equipment sales decreased by **$1.1 million** (three months) and **$2.1 million** (nine months) due to lower sales volume and inventory shortages, with back orders for core products[153](index=153&type=chunk) [Operating Expenses Analysis](index=32&type=section&id=Operating%20Expenses%20Analysis) - Total operating expenses significantly increased to **$224.3 million** (three months) and **$318.9 million** (nine months) in 2022, primarily due to reductions in the value of inventory and long-lived assets[155](index=155&type=chunk) - Cost of services increased by **$1.6 million** (three months) and **$4.9 million** (nine months), driven by higher personnel costs, lease expenses for new teleport leases related to Service Agreements, and professional fees for ERP system implementation[157](index=157&type=chunk) - A reduction in the value of inventory of **$8.5 million** was recorded in Q3 2022 due to the strategic shift away from second-generation Duplex assets[159](index=159&type=chunk) - Marketing, General and Administrative (MG&A) expenses increased by **$1.5 million** (three months) and **$0.8 million** (nine months), mainly due to higher personnel costs (including stock-based compensation and bonuses) and professional/legal fees, partially offset by lower subscriber acquisition costs[161](index=161&type=chunk) - A **$166.0 million** reduction in the value of long-lived assets was recorded in Q3 2022, primarily for second-generation Duplex assets (gateways, related technology, prepaid licenses, and royalties) deemed no longer recoverable[164](index=164&type=chunk) [Other (Expense) Income Analysis](index=34&type=section&id=Other%20%28Expense%29%20Income%20Analysis) - In 2021, a **$5.0 million** gain on extinguishment of debt was recorded from the forgiveness of the Paycheck Protection Program (PPP) loan, with no similar activity in 2022[166](index=166&type=chunk) - Net interest income and expense decreased by **$3.8 million** (three months) and **$9.5 million** (nine months) in 2022, primarily due to higher capitalized interest[167](index=167&type=chunk) - Derivative gains of **$0.7 million** (three months) and losses of **$1.1 million** (nine months) were recorded in 2022, driven by changes in the valuation of embedded features in debt instruments, particularly the 2019 Facility Agreement[169](index=169&type=chunk) - Foreign currency losses increased by **$4.6 million** (three months) and **$8.7 million** (nine months) in 2022, due to the strengthening of the U.S. dollar[172](index=172&type=chunk) - A **$1.5 million** pension settlement loss was recorded in August 2022 upon the settlement of the Company's remaining pension liability[173](index=173&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - Principal near-term liquidity requirements include operating costs, capital expenditures, and repayment of vendor financing for satellite procurement[174](index=174&type=chunk) - Primary liquidity sources are cash on hand, cash flows from operations, and vendor financing, with potential future sources including warrant exercises and new debt/equity financings[175](index=175&type=chunk) - Cash and cash equivalents were **$14.7 million** as of September 30, 2022, slightly up from **$14.3 million** at December 31, 2021[176](index=176&type=chunk) - Total debt and vendor financing increased by **$88.0 million** to **$325.9 million** as of September 30, 2022, mainly due to **$63.8 million** in vendor financing draws and a higher carrying value of the 2019 Facility Agreement[176](index=176&type=chunk)[177](index=177&type=chunk) - The Company is required to maintain minimum liquidity of **$10.0 million** under the Service Agreements[175](index=175&type=chunk) [Off-Balance Sheet Transactions](index=37&type=section&id=Off-Balance%20Sheet%20Transactions) - The Company has no material off-balance sheet transactions[192](index=192&type=chunk) [Recently Issued Accounting Pronouncements](index=37&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) - The Company has not identified any recently issued accounting standards that will have a material impact on its condensed consolidated financial statements[193](index=193&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Discusses Globalstar's exposure to foreign currency and interest rate risks, and its management strategies - Globalstar's international sales are primarily denominated in Canadian dollars, Brazilian reais, and euros, exposing it to foreign currency exchange risk[195](index=195&type=chunk) - The Company reduces currency risk by requiring USD payments and purchasing foreign currencies on the spot market, but does not currently use hedging instruments[195](index=195&type=chunk) - Future refinancing of vendor financing may expose the Company to the risk of rising interest rates if borrowings bear floating rates[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management evaluated disclosure controls and procedures, confirming effectiveness despite ERP system changes - As of September 30, 2022, the Company's disclosure controls and procedures were deemed effective to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[199](index=199&type=chunk) - The implementation of a new ERP system in Q1 2022 led to changes in reporting processes and internal control over financial reporting, automating procedures and standardizing business processes, with no adverse effects[201](index=201&type=chunk) [PART II - OTHER INFORMATION](index=39&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings.) No legal proceedings to report - The Company has no legal proceedings to disclose[202](index=202&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors.) Outlines key risks from global macro-economic conditions, Apple Service Launch uncertainty, and financing challenges - Uncertain global macro-economic and political conditions, including inflation, interest rates, and the Russia-Ukraine conflict, could materially adversely affect the Company's operations and financial condition[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) - There is no assurance that the Service Launch with Apple Inc. will occur or that expected revenues will be received, as the agreements impose substantial obligations and are terminable[207](index=207&type=chunk) - Volatility in financial markets may impede the Company's ability to access capital markets for required financing (for Service Agreements and Procurement Agreement) during Q4 2022, potentially leading to higher borrowing costs and more stringent terms[208](index=208&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) No unregistered sales of equity securities or use of proceeds to report - This item is not applicable[209](index=209&type=chunk) [Item 3. Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) No defaults upon senior securities to report - The Company has no defaults upon senior securities to disclose[209](index=209&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) No mine safety disclosures to report - This item is not applicable[209](index=209&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information.) Updates on vendor financing arrangement, including an October 2022 amendment for payment deferrals and interest - On October 28, 2022, the Company amended its satellite procurement agreement with MDA, extending payment deferral dates and introducing a **7%** annual interest rate on outstanding amounts, with two **$7.0 million** payments due in October and November 2022, and remaining amounts due in December 2022[209](index=209&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits.) Lists exhibits filed with the Form 10-Q, including organizational documents, certifications, and XBRL taxonomy - Exhibits include the Third Amended and Restated Certificate of Incorporation, Fourth Amended and Restated Bylaws, Section 302 and 906 Certifications, and XBRL Instance and Taxonomy documents[210](index=210&type=chunk) [Signatures](index=41&type=section&id=Signatures) Contains signatures of the Principal Executive Officer and Principal Financial Officer, certifying the report - The report is signed by David B. Kagan, Chief Executive Officer, and Rebecca S. Clary, Chief Financial Officer, on November 3, 2022[215](index=215&type=chunk)

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements.](index=3&type=section&id=Item%201.%20Financial%20Statements.) Globalstar presents unaudited condensed consolidated financial statements, including operations, balance sheets, equity, and cash flows, with detailed notes [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20(LOSS)) For the three and six months ended June 30, 2022, Globalstar reported an increased net loss, primarily driven by higher operating expenses and foreign currency losses, despite increased total revenue | Metric | Three Months Ended June 30, 2022 (USD thousands) | Three Months Ended June 30, 2021 (USD thousands) | Six Months Ended June 30, 2022 (USD thousands) | Six Months Ended June 30, 2021 (USD thousands) | | :-------------------------------- | :------------------------------------------------ | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Total Revenue | $36,800 | $30,279 | $69,572 | $57,208 | | Loss from operations | $(11,356) | $(16,008) | $(25,068) | $(35,268) | | Total other (expense) income | $(15,280) | $(5,087) | $(21,947) | $(22,083) | | Net loss | $(26,757) | $(21,449) | $(47,219) | $(57,782) | | Basic Net loss per common share | $(0.01) | $(0.01) | $(0.03) | $(0.03) | [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2022, Globalstar's total assets increased to **$944.2 million** from **$814.1 million** at December 31, 2021, primarily due to property and equipment and prepaid satellite construction costs, with total liabilities also increasing due to vendor financing and deferred revenue | Metric | June 30, 2022 (USD thousands) | December 31, 2021 (USD thousands) | | :------------------------------------------ | :----------------------------- | :------------------------------- | | Total current assets | $69,731 | $68,873 | | Property and equipment, net | $708,005 | $672,156 | | Prepaid satellite construction costs and related customer receivable | $94,164 | — | | Total assets | $944,151 | $814,106 | | Total current liabilities | $139,980 | $61,565 | | Long-term debt | $257,451 | $237,932 | | Deferred revenue, net | $182,376 | $112,054 | | Total liabilities and stockholders' equity | $944,151 | $814,106 | | Total stockholders' equity | $329,333 | $365,431 | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Stockholders' equity decreased from **$365.4 million** at January 1, 2022, to **$329.3 million** at June 30, 2022, primarily due to a net loss and other comprehensive loss, partially offset by restricted stock awards and stock-based compensation | Metric | Balances – January 1, 2022 (USD thousands) | Balances – June 30, 2022 (USD thousands) | | :------------------------------------------------------------------------------------------------ | :---------------------------------------- | :-------------------------------------- | | Total Stockholders' Equity | $365,431 | $329,333 | | Net loss (for the six months ended June 30, 2022) | N/A | $(47,219) | | Other comprehensive income (for the six months ended June 30, 2022) | N/A | $4,636 | | Additional paid-in capital (increase from Jan 1 to June 30, 2022) | $2,146,710 | $2,153,195 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash provided by operating activities significantly decreased to **$20.8 million** for the six months ended June 30, 2022, from **$55.9 million** in the prior year, mainly due to unfavorable working capital changes, while investing activities used more cash and financing activities shifted to a net provision | Metric | Six Months Ended June 30, 2022 (USD thousands) | Six Months Ended June 30, 2021 (USD thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $20,771 | $55,920 | | Net cash used in investing activities | $(22,392) | $(11,998) | | Net cash provided by (used in) financing activities | $449 | $(45,228) | | Net decrease in cash, cash equivalents and restricted cash | $(1,163) | $(1,315) | | Cash, cash equivalents and restricted cash, end of period | $13,141 | $66,708 | - Non-cash financing and investing activities for the six months ended June 30, 2022, included **$73.6 million** for satellite construction assets acquired through a vendor financing arrangement[19](index=19&type=chunk) [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=8&type=section&id=NOTES%20TO%20UNAUDITED%20INTERIM%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes detail accounting policies, estimates, and financial statement line items, covering revenue, leases, property and equipment, long-term debt, derivatives, fair value, commitments, related party transactions, and loss per share [1. Basis of Presentation](index=8&type=section&id=1.%20Basis%20of%20Presentation) Globalstar operates as a single Mobile Satellite Services (MSS) segment, providing global voice and data communications, with interim financial statements prepared under U.S. GAAP - Globalstar's sole reportable segment is its Mobile Satellite Services (MSS) business, offering global voice and data communications[22](index=22&type=chunk) - **Thermo Companies**, through commonly controlled affiliates, is the principal owner and largest stockholder of Globalstar[22](index=22&type=chunk) [2. Revenue](index=9&type=section&id=2.%20Revenue) Total revenue increased for both the three and six months ended June 30, 2022, driven by a significant rise in Engineering and other service revenue, largely from the Terms Agreement, while subscriber equipment sales declined due to inventory shortages | Revenue Type | Three Months Ended June 30, 2022 (USD thousands) | Three Months Ended June 30, 2021 (USD thousands) | Six Months Ended June 30, 2022 (USD thousands) | Six Months Ended June 30, 2021 (USD thousands) | | :-------------------------- | :------------------------------------------------ | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Duplex Service | $6,936 | $7,243 | $13,082 | $13,898 | | SPOT Service | $11,536 | $11,139 | $22,791 | $22,123 | | Commercial IoT Service | $5,038 | $4,504 | $9,708 | $8,985 | | Engineering and other Service | $9,538 | $2,731 | $16,811 | $3,697 | | Total Service Revenue | $33,048 | $25,617 | $62,392 | $48,703 | | Total Subscriber Equipment Sales | $3,752 | $4,662 | $7,180 | $8,505 | | Total Revenue | $36,800 | $30,279 | $69,572 | $57,208 | - Revenue from the Terms Agreement for certain costs incurred by the Company was **$8.8 million** and **$15.7 million** for the three and six months ended June 30, 2022, respectively, significantly higher than the prior year[27](index=27&type=chunk) | Geographical Market | Three Months Ended June 30, 2022 (USD thousands) | Three Months Ended June 30, 2021 (USD thousands) | Six Months Ended June 30, 2022 (USD thousands) | Six Months Ended June 30, 2021 (USD thousands) | | :-------------------------- | :------------------------------------------------ | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | US Service Revenue | $24,875 | $18,228 | $47,163 | $34,671 | | Canada Service Revenue | $4,128 | $4,376 | $7,817 | $8,206 | | Central and South America Service Revenue | $2,248 | $815 | $3,984 | $1,596 | | US Equipment Sales | $2,227 | $2,438 | $3,783 | $4,610 | | Canada Equipment Sales | $879 | $1,118 | $1,677 | $1,867 | - As of June 30, 2022, the Company recorded **$83.4 million** in receivables related to performance obligations under the Terms Agreement, with **$74.8 million** classified as non-current[30](index=30&type=chunk) - Contract liabilities (deferred revenue) totaled **$199.8 million** as of June 30, 2022, including **$75.0 million** for advance payments and **$124.8 million** for network upgrades and satellite construction costs under the Terms Agreement[33](index=33&type=chunk) [3. Leases](index=11&type=section&id=3.%20Leases) Globalstar's operating lease right-of-use assets and liabilities decreased slightly, while finance lease assets and liabilities remained minimal, with total lease cost increasing due to higher operating lease costs | Metric | June 30, 2022 (USD thousands) | December 31, 2021 (USD thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Operating lease right-of-use asset, net | $29,964 | $32,041 | | Total operating lease liabilities | $29,576 | $31,738 | | Total finance lease liabilities | $6 | $9 | | Metric | Three Months Ended June 30, 2022 (USD thousands) | Three Months Ended June 30, 2021 (USD thousands) | Six Months Ended June 30, 2022 (USD thousands) | Six Months Ended June 30, 2021 (USD thousands) | | :-------------------------- | :------------------------------------------------ | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Total lease cost | $1,137 | $1,098 | $2,325 | $1,952 | - The weighted-average remaining lease term for operating leases was **10.2 years** at June 30, 2022, with a weighted-average discount rate of **8.4%**[39](index=39&type=chunk) - The Company executed additional operating leases for new gateway locations, not yet commenced, with an expected increase of lease liabilities of approximately **$4.7 million**[41](index=41&type=chunk) [4. Property and Equipment](index=13&type=section&id=4.%20Property%20and%20Equipment) Total property and equipment, net, increased to **$708.0 million** at June 30, 2022, from **$672.2 million** at December 31, 2021, driven by a spare satellite launch and initial costs for new satellite procurement, largely reimbursed by a customer | Metric | June 30, 2022 (USD thousands) | December 31, 2021 (USD thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | First and second-generation satellites in service | $1,261,793 | $1,195,509 | | Construction in progress: Space component | $57,542 | $16,394 | | Total property and equipment, net | $708,005 | $672,156 | - During Q2 2022, **$65.1 million** in costs for the construction and launch of a spare satellite were placed into service, with **85%** reimbursed by the customer under the Terms Agreement[42](index=42&type=chunk) - The Company entered an agreement in February 2022 to purchase new satellites, recording **$19.4 million** as prepaid construction costs and **$54.2 million** in construction in progress, with **95%** of these capital expenditures to be reimbursed by the customer[43](index=43&type=chunk) [5. Long-Term Debt and Other Financing Arrangements](index=14&type=section&id=5.%20Long-Term%20Debt%20and%20Other%20Financing%20Arrangements) Long-term debt increased to **$257.5 million** at June 30, 2022, primarily due to the 2019 Facility Agreement, while the 2013 8.00% Convertible Senior Notes were fully converted into common stock, and new vendor financing of **$73.6 million** was recorded for satellite procurement | Debt Instrument | June 30, 2022 Carrying Value (USD thousands) | December 31, 2021 Carrying Value (USD thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | 2019 Facility Agreement | $257,451 | $236,525 | | 8.00% Convertible Senior Notes Issued in 2013 | — | $1,407 | | Total Debt | $257,451 | $237,932 | - The 2019 Facility Agreement, with a principal amount of **$282.0 million** at June 30, 2022, bears **13.5% PIK interest** and requires a **$6.0 million** prepayment in August 2022 due to excess cash flow[46](index=46&type=chunk)[47](index=47&type=chunk) - The remaining **$1.4 million** principal of the 2013 8.00% Notes was converted into **2.3 million shares** of common stock in Q1 2022, resulting in a net gain on extinguishment of less than **$0.1 million**[49](index=49&type=chunk)[50](index=50&type=chunk) - Vendor financing of **$73.6 million** was recorded for satellite procurement, with payment deferrals through August 2022 at **0% interest**, and the Company plans to seek an extension[52](index=52&type=chunk) - The Paycheck Protection Program (PPP) loan of **$5.0 million**, including accrued interest, was forgiven in June 2021, resulting in a gain on extinguishment of debt[54](index=54&type=chunk) [6. Derivatives](index=16&type=section&id=6.%20Derivatives) Globalstar recognized derivative losses of **$1.2 million** and **$1.7 million** for the three and six months ended June 30, 2022, respectively, primarily due to changes in the fair value of the compound embedded derivative with the 2019 Facility Agreement, while the 2013 8.00% Notes derivative is no longer outstanding | Derivative Instrument | June 30, 2022 Fair Value (USD thousands) | December 31, 2021 Fair Value (USD thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Compound embedded derivative with the 2019 Facility Agreement | $(1,460) | $484 | | Compound embedded derivative with the 2013 8.00% Notes | — | $(1,364) | | Derivative Loss | Three Months Ended June 30, 2022 (USD thousands) | Three Months Ended June 30, 2021 (USD thousands) | Six Months Ended June 30, 2022 (USD thousands) | Six Months Ended June 30, 2021 (USD thousands) | | :------------------------------------------ | :------------------------------------------------ | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | 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) | [7. Fair Value Measurements](index=16&type=section&id=7.%20Fair%20Value%20Measurements) The Company's derivatives are classified as Level 3 fair value measurements, requiring significant unobservable inputs, with the 2019 Facility Agreement derivative shifting to a liability due to an increased discount yield, and the 2013 8.00% Notes derivative written off upon conversion - All of Globalstar's derivative instruments are classified as **Level 3 fair value measurements**, indicating reliance on significant unobservable inputs[60](index=60&type=chunk) | Derivative Instrument | June 30, 2022 (Level 3, USD thousands) | December 31, 2021 (Level 3, USD thousands) | | :------------------------------------------ | :------------------------------------ | :---------------------------------------- | | Compound embedded derivative with the 2019 Facility Agreement | $(1,460) | $484 | | Compound embedded derivative with the 2013 8.00% Notes | — | $(1,364) | - The discount yield for the 2019 Facility Agreement derivative increased from **13%** at December 31, 2021, to **20%** at June 30, 2022, causing the derivative to become a liability[64](index=64&type=chunk) - During Q2 2022, the Company wrote off **$0.5 million** of work in progress related to spectrum intangible assets, as efforts to obtain licensing authority in certain countries were discontinued[71](index=71&type=chunk) [8. Commitments and Contingencies](index=19&type=section&id=8.%20Commitments%20and%20Contingencies) Globalstar's primary commitments include obligations under the Terms Agreement for services and network upgrades, and a satellite procurement agreement to acquire **17 new satellites** for **$327.0 million**, with **95%** of these capital expenditures to be reimbursed by the counterparty - The Terms Agreement outlines commitments for Globalstar to provide services and incur costs for new and upgraded gateways, as well as satellite construction and launch[72](index=72&type=chunk) - In February 2022, Globalstar entered a satellite procurement agreement for **17 new satellites** totaling **$327.0 million**, with an option for additional satellites. The counterparty to the Terms Agreement will reimburse **95%** of these capital expenditures[74](index=74&type=chunk)[75](index=75&type=chunk) - Deferred milestone payments of approximately **$74.0 million** under the satellite procurement agreement are due in August 2022, and the Company intends to seek an extension[76](index=76&type=chunk) [9. Related Party Transactions](index=20&type=section&id=9.%20Related%20Party%20Transactions) Globalstar has ongoing related party transactions with Thermo, its principal owner, including payables for normal purchases, reimbursement for general and administrative expenses, a lease agreement for its headquarters, and Thermo's participation in the 2019 Facility Agreement - Payables to Thermo and other affiliates for normal purchase transactions were **$0.4 million** as of June 30, 2022, and December 31, 2021[77](index=77&type=chunk) - Globalstar incurred **$0.8 million** in lease expense for its headquarters from Thermo Covington, LLC during each of the six months ended June 30, 2022 and 2021[79](index=79&type=chunk) - Thermo's participation in the 2019 Facility Agreement was **$95.1 million**, with **$8.3 million** in PIK interest accrued during the six months ended June 30, 2022[80](index=80&type=chunk) [10. Loss Per Share](index=20&type=section&id=10.%20Loss%20Per%20Share) Globalstar reported a basic and diluted net loss per common share of **$(0.01)** for the three months and **$(0.03)** for the six months ended June 30, 2022, consistent with the prior year, as potential common stock was anti-dilutive due to net losses | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss (USD thousands) | $(26,757) | $(21,449) | $(47,219) | $(57,782) | | Weighted average shares outstanding (thousands) | 1,799,886 | 1,791,943 | 1,798,784 | 1,736,158 | | Net loss per common share - basic and diluted (USD) | $(0.01) | $(0.01) | $(0.03) | $(0.03) | - Approximately **7.8 million** and **7.6 million shares** of potential common stock were excluded from diluted shares outstanding for the three and six months ended June 30, 2022, respectively, because their inclusion would be anti-dilutive[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses Globalstar's Q2 2022 financial performance, condition, and liquidity, covering MSS, KPIs, revenue, expenses, and capital resources [Overview](index=21&type=section&id=Overview) Globalstar provides global Mobile Satellite Services (MSS) through its LEO satellite network, expanding its constellation with **17 new satellites** and developing new IoT products like the Realm Enablement Suite, while also pursuing terrestrial broadband services using its licensed 2.4GHz spectrum - Globalstar provides Mobile Satellite Services (MSS) including voice and data communications via its global satellite network, which includes LEO second-generation and certain first-generation satellites[88](index=88&type=chunk)[89](index=89&type=chunk) - The company entered a satellite procurement agreement in February 2022 to acquire **17 new satellites** for **$327.0 million** to replenish its constellation, with **95%** of capital expenditures to be reimbursed by a customer under the Terms Agreement[91](index=91&type=chunk) - Globalstar introduced the **Realm Enablement Suite** in June 2022, an innovative portfolio of satellite asset tracking hardware and software solutions, including the **Integrity 150** solar-powered device and **ST150M** satellite modem module[96](index=96&type=chunk)[97](index=97&type=chunk) - The FCC granted Globalstar authority to provide terrestrial broadband services over **11.5 MHz** of its licensed MSS spectrum (**Band 53/n53**), with Qualcomm Technologies' Snapdragon X65 modem-RF System supporting Band n53, expanding the potential device ecosystem[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - As of June 30, 2022, Globalstar had approximately **762,000 subscribers** worldwide, with **25,000 subscribers** in Russia disconnected due to the invasion of Ukraine[98](index=98&type=chunk) [Performance Indicators](index=24&type=section&id=Performance%20Indicators) Management monitors key performance indicators such as total revenue, subscriber growth and churn rate, average monthly revenue per user (ARPU) for Duplex, SPOT, and Commercial IoT, operating income, adjusted EBITDA, and capital expenditures to assess business growth, customer satisfaction, financial performance, and future revenue potential - Key performance indicators include total revenue, subscriber growth and churn rate, ARPU (Duplex, SPOT, Commercial IoT), operating income, adjusted EBITDA, and capital expenditures[106](index=106&type=chunk) [Comparison of the Results of Operations for the three and six months ended June 30, 2022 and 2021](index=24&type=section&id=Comparison%20of%20the%20Results%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030,%202022%20and%202021) Globalstar experienced a **21%** and **22%** increase in total revenue for the three and six months ended June 30, 2022, respectively, primarily driven by a significant rise in Engineering and other service revenue, while operating expenses increased due to higher cost of services and asset reductions, and other expenses were impacted by derivative losses and foreign currency fluctuations [Revenue](index=24&type=section&id=Revenue) Total revenue increased by **21%** to **$36.8 million** and **22%** to **$69.6 million** for the three and six months ended June 30, 2022, respectively, largely fueled by a substantial increase in Engineering and other service revenue, while Duplex service revenue declined and subscriber equipment sales were negatively impacted by supply chain disruptions | Metric | Three Months Ended June 30, 2022 (USD thousands) | Three Months Ended June 30, 2021 (USD thousands) | Six Months Ended June 30, 2022 (USD thousands) | Six Months Ended June 30, 2021 (USD thousands) | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $36,800 | $30,279 | $69,572 | $57,208 | | Duplex Service Revenue | $6,936 (19% of Total) | $7,243 (24% of Total) | $13,082 (19% of Total) | $13,898 (24% of Total) | | SPOT Service Revenue | $11,536 (31% of Total) | $11,139 (37% of Total) | $22,791 (33% of Total) | $22,123 (39% of Total) | | Commercial IoT Service Revenue | $5,038 (14% of Total) | $4,504 (15% of Total) | $9,708 (14% of Total) | $8,985 (16% of Total) | | Engineering and other Service Revenue | $9,538 (26% of Total) | $2,731 (9% of Total) | $16,811 (24% of Total) | $3,697 (6% of Total) | | Total Service Revenue | $33,048 (90% of Total) | $25,617 (85% of Total) | $62,392 (90% of Total) | $48,703 (85% of Total) | | Total Equipment Revenue | $3,752 (10% of Total) | $4,662 (15% of Total) | $7,180 (10% of Total) | $8,505 (15% of Total) | | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Average Duplex Subscribers | 42,723 | 44,160 | 43,295 | 45,913 | | Duplex ARPU (monthly USD) | $54.12 | $54.67 | $50.36 | $50.45 | | Average SPOT Subscribers | 277,815 | 264,508 | 276,633 | 265,127 | | SPOT ARPU (monthly USD) | $13.84 | $14.04 | $13.73 | $13.91 | | Average Commercial IoT Subscribers | 433,578 | 409,346 | 431,652 | 408,043 | | Commercial IoT ARPU (monthly USD) | $3.87 | $3.67 | $3.75 | $3.67 | | Total Average Subscribers | 754,553 | 745,617 | 764,920 | 746,678 | - Duplex service revenue decreased by **4%** and **6%** for the three and six months ended June 30, 2022, respectively, due to a decline in average subscribers, a trend expected to continue as the company shifts investment to IoT[114](index=114&type=chunk) - SPOT service revenue increased by **4%** and **3%** for the three and six months ended June 30, 2022, respectively, driven by a **5%** and **4%** increase in average subscribers, despite supply chain disruptions impacting equipment sales[115](index=115&type=chunk) - Commercial IoT service revenue increased by **12%** and **8%** for the three and six months ended June 30, 2022, respectively, due to a **6%** increase in average subscribers, despite component part shortages impacting equipment production[116](index=116&type=chunk)[120](index=120&type=chunk) - Engineering and other service revenue significantly increased by **$6.8 million** and **$13.1 million** for the three and six months ended June 30, 2022, primarily due to revenue recognized from the Terms Agreement for gateway expansion and satellite procurement[117](index=117&type=chunk) [Operating Expenses](index=26&type=section&id=Operating%20Expenses) Total operating expenses increased for both the three and six months ended June 30, 2022, primarily due to higher cost of services (personnel, new teleport leases, ERP implementation) and a reduction in the value of long-lived assets, partially offset by a reduction in inventory value and lower Marketing, General and Administrative (MG&A) expenses | Metric | Three Months Ended June 30, 2022 (USD thousands) | Three Months Ended June 30, 2021 (USD thousands) | Six Months Ended June 30, 2022 (USD thousands) | Six Months Ended June 30, 2021 (USD thousands) | | :------------------------------------------ | :------------------------------------------------ | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Total operating expenses | $48,156 | $46,287 | $94,640 | $92,476 | | Cost of services | $10,695 | $9,123 | $21,489 | $18,200 | | Cost of subscriber equipment sales | $3,097 | $2,858 | $5,663 | $5,757 | | Cost of subscriber equipment sales - reduction in the value of inventory | $16 | $782 | $16 | $782 | | Marketing, general and administrative | $9,693 | $9,681 | $19,034 | $19,778 | | Reduction in value of long-lived assets | $525 | — | $525 | — | - Cost of services increased by **$1.6 million** and **$3.3 million** for the three and six months ended June 30, 2022, respectively, due to higher personnel costs, new teleport leases, and professional fees for ERP system implementation[122](index=122&type=chunk) - MG&A expenses decreased by **$0.7 million** for the six months ended June 30, 2022, due to lower subscriber acquisition costs, termination of the dealer program, reduced advertising for Duplex products, and a reversal of a litigation accrual, partially offset by higher personnel costs[125](index=125&type=chunk) - A **$0.5 million** reduction in the value of intangible and other assets was recorded in Q2 2022 due to discontinuing spectrum licensing efforts in certain countries[126](index=126&type=chunk) [Other (Expense) Income](index=27&type=section&id=Other%20(Expense)%20Income) Other (expense) income shifted to a net expense for the three and six months ended June 30, 2022, primarily due to a significant foreign currency loss and derivative losses, while interest expense decreased due to higher capitalized interest, and the prior year included a gain on extinguishment of debt | Metric | Three Months Ended June 30, 2022 (USD thousands) | Three Months Ended June 30, 2021 (USD thousands) | Six Months Ended June 30, 2022 (USD thousands) | Six Months Ended June 30, 2021 (USD thousands) | | :------------------------------------------ | :------------------------------------------------ | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Gain on extinguishment of debt | — | $2,664 | — | $2,664 | | Interest income and expense, net | $(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 | | Total other (expense) income | $(15,280) | $(5,087) | $(21,947) | $(22,083) | - The **$2.7 million** gain on extinguishment of debt in Q2 2021 was due to the forgiveness of the **$5.0 million** PPP loan, partially offset by a **$2.3 million** write-off of deferred financing costs from 2009 Facility Agreement prepayments[127](index=127&type=chunk) - Net interest expense decreased by **$3.6 million** and **$5.6 million** for the three and six months ended June 30, 2022, respectively, primarily due to higher capitalized interest[128](index=128&type=chunk) - Foreign currency loss of **$7.1 million** for the three months and **$3.9 million** for the six months ended June 30, 2022, was driven by the weakening of the Canadian dollar, Euro, and Brazilian real against the U.S. dollar[132](index=132&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Globalstar's liquidity requirements include operating costs, capital expenditures, and repayment of vendor financing for satellite procurement, with the company actively pursuing new debt financing and expecting current liquidity sources to be sufficient for the next twelve months, despite a slight decrease in cash and an increase in total debt - Principal near-term liquidity requirements include funding operating costs, capital expenditures, and repayment of vendor financing under the satellite Procurement Agreement[133](index=133&type=chunk) - Globalstar is actively pursuing a new debt financing arrangement to repay and fund amounts due under the Procurement Agreement, expecting current liquidity sources to be sufficient for the next twelve months[133](index=133&type=chunk) | Metric | June 30, 2022 (USD thousands) | December 31, 2021 (USD thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $13,141 | $14,304 | | Total carrying amount of debt outstanding | $257,451 | $237,932 | - The **$19.5 million** increase in debt carrying value was due to the 2019 Facility Agreement's PIK interest and debt discount accretion, partially offset by the conversion of the 2013 8.00% Notes[135](index=135&type=chunk) [Cash Flows for the six months ended June 30, 2022 and 2021](index=29&type=section&id=Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030,%202022%20and%202021) Net cash provided by operating activities decreased significantly to **$20.8 million** in 2022 from **$55.9 million** in 2021, primarily due to unfavorable working capital changes, while net cash used in investing activities increased to **$22.4 million** mainly for network upgrades and satellite launch costs, and financing activities provided **$0.4 million** in 2022 compared to a **$45.2 million** use in 2021 | Cash Flow Activity | Six Months Ended June 30, 2022 (USD thousands) | Six Months Ended June 30, 2021 (USD thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $20,771 | $55,920 | | Net cash used in investing activities | $(22,392) | $(11,998) | | Net cash provided by (used in) financing activities | $449 | $(45,228) | | Net decrease in cash and cash equivalents | $(1,163) | $(1,315) | - The decrease in operating cash flow was primarily due to unfavorable working capital changes, including **$51.6 million** in customer prepayments recorded as deferred revenue in 2021[137](index=137&type=chunk) - Investing cash flow increased due to costs for the spare satellite launch and network upgrades, partially offset by lower gateway upgrade costs as the project nears completion[138](index=138&type=chunk) [Indebtedness](index=29&type=section&id=Indebtedness) Globalstar's indebtedness primarily consists of the 2019 Facility Agreement, with **$282.0 million** principal outstanding at June 30, 2022, and new vendor financing of **$73.6 million** for satellite procurement, while the 2013 8.00% Convertible Senior Notes were fully converted into common stock in Q1 2022 - The 2019 Facility Agreement had **$282.0 million** principal outstanding at June 30, 2022, with a **13.5% PIK interest rate**, and the company expects a **$6.0 million** prepayment in August 2022[141](index=141&type=chunk)[142](index=142&type=chunk) - The remaining principal of the 2013 8.00% Notes was converted into **2.3 million shares** of common stock in February 2022, prior to its scheduled redemption[143](index=143&type=chunk) - Vendor financing for satellite procurement, with deferred payments of approximately **$74.0 million** due in August 2022, is being pursued for extension and broader debt financing[144](index=144&type=chunk) [Off-Balance Sheet Transactions](index=30&type=section&id=Off-Balance%20Sheet%20Transactions) Globalstar reported no material off-balance sheet transactions - The Company has no material off-balance sheet transactions[145](index=145&type=chunk) [Recently Issued Accounting Pronouncements](index=30&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) Globalstar reviews new accounting guidance but has not identified any standards that will materially impact its condensed consolidated financial statements - Globalstar has not identified any recently issued accounting standards that will have a material impact on its condensed consolidated financial statements[146](index=146&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Globalstar is exposed to foreign currency exchange risk from international sales denominated in Canadian dollars, Brazilian reais, and euros, but currently does not use hedging instruments, and may face interest rate risk if future borrowings bear floating rates - Globalstar's international sales are primarily denominated in Canadian dollars, Brazilian reais, and euros, exposing the company to currency exchange risk[147](index=147&type=chunk) - The company does not currently purchase hedging instruments for foreign currencies but is obligated to enter currency hedges with 2019 Facility Agreement lenders if over **25%** of revenues are in a single non-U.S./Canadian dollar currency[147](index=147&type=chunk) - Globalstar may be exposed to rising interest rates if future borrowings, including the refinancing of vendor financing, bear floating rates[148](index=148&type=chunk) [Item 4. Controls and Procedures.](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that Globalstar's disclosure controls and procedures were effective as of June 30, 2022, and the implementation of a new ERP system in Q1 2022 resulted in anticipated changes to internal control over financial reporting, but these changes did not adversely affect the company's controls - As of June 30, 2022, Globalstar's disclosure controls and procedures were deemed effective to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[151](index=151&type=chunk) - The implementation of a new ERP system in Q1 2022 led to changes in reporting processes and internal control over financial reporting, but these changes did not adversely affect the company's controls[153](index=153&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings.](index=32&type=section&id=Item%201.%20Legal%20Proceedings.) Globalstar reported no legal proceedings - Globalstar has no legal proceedings to report[155](index=155&type=chunk) [Item 1A. Risk Factors.](index=32&type=section&id=Item%201A.%20Risk%20Factors.) Globalstar highlights risks from uncertain global macroeconomic and political conditions, including inflation, interest rates, and the impact of the Russia-Ukraine conflict on operations, financial performance, and supply chains, advising careful consideration of these and other risks disclosed in its 2021 Annual Report - Globalstar's results are materially affected by global economic and political conditions, including inflation, interest rates, and the availability of capital[156](index=156&type=chunk) - The invasion of Ukraine by Russia and resulting sanctions could adversely impact Globalstar's operations, financial performance, and supply chains[157](index=157&type=chunk)[158](index=158&type=chunk) - No material changes to risk factors were disclosed other than those related to global macro-economic and political conditions[159](index=159&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This item is not applicable to Globalstar for the reporting period - This item is not applicable[160](index=160&type=chunk) [Item 3. Defaults Upon Senior Securities.](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) Globalstar reported no defaults upon senior securities - Globalstar has no defaults upon senior securities[160](index=160&type=chunk) [Item 4. Mine Safety Disclosures.](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to Globalstar for the reporting period - This item is not applicable[160](index=160&type=chunk) [Item 5. Other Information.](index=32&type=section&id=Item%205.%20Other%20Information.) Globalstar reported no other information - Globalstar has no other information to report[160](index=160&type=chunk) [Item 6. Exhibits.](index=33&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including the company's Certificate of Incorporation, Bylaws, Section 302 and 906 Certifications, and XBRL Taxonomy documents - Exhibits include the Third Amended and Restated Certificate of Incorporation, Fourth Amended and Restated Bylaws, Section 302 and 906 Certifications, and XBRL Taxonomy documents[161](index=161&type=chunk) [Signatures](index=34&type=section&id=Signatures) The report is duly signed on behalf of Globalstar, Inc. by its Chief Executive Officer, David B. Kagan, and Chief Financial Officer, Rebecca S. Clary, on August 9, 2022 - The report was signed by David B. Kagan, Chief Executive Officer, and Rebecca S. Clary, Chief Financial Officer, on August 9, 2022[166](index=166&type=chunk)

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) Globalstar reported increased Q1 2022 revenue of $32.8 million, a reduced net loss, and positive operating cash flow [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Globalstar's Q1 2022 total revenue increased to $32.8 million, driven by service revenue, narrowing the net loss to $20.5 million Q1 2022 vs Q1 2021 Statement of Operations (In thousands) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | **Total Revenue** | **$32,772** | **$26,929** | | Service Revenue | $29,344 | $23,086 | | Subscriber Equipment Sales | $3,428 | $3,843 | | **Loss from Operations** | **($13,712)** | **($19,260)** | | Total Operating Expenses | $46,484 | $46,189 | | **Net Loss** | **($20,462)** | **($36,333)** | | Net Loss per Share (Basic & Diluted) | ($0.01) | ($0.02) | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets increased to $850.4 million, while total liabilities rose, leading to a decrease in stockholders' equity Balance Sheet Overview (In thousands) | Metric | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$850,426** | **$814,106** | | Cash and cash equivalents | $11,519 | $14,304 | | Property and equipment, net | $680,167 | $672,156 | | **Total Liabilities** | **$501,194** | **$448,675** | | Total current liabilities | $103,682 | $61,565 | | Long-term debt | $246,756 | $237,932 | | **Total Stockholders' Equity** | **$349,232** | **$365,431** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2022 net cash from operations was $7.6 million, while investing activities increased, resulting in a net cash decrease of $2.8 million Cash Flow Summary (In thousands) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,569 | $4,512 | | Net cash used in investing activities | ($10,451) | ($4,974) | | Net cash provided by financing activities | $8 | $39,245 | | **Net (decrease) increase in cash** | **($2,785)** | **$38,717** | [Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) Notes detail satellite procurement, debt conversion, and significant revenue recognition from the 'Terms Agreement' - In February 2022, the company entered into a satellite procurement agreement to acquire **17 new satellites for $327.0 million** to replenish its constellation. A customer under the 'Terms Agreement' is required to reimburse **95%** of these capital expenditures[68](index=68&type=chunk) - During Q1 2022, the remaining **$1.4 million** principal of the 8.00% Convertible Senior Notes from 2013 was converted into **2.3 million shares** of common stock, fully extinguishing this debt[49](index=49&type=chunk) - The company recognized **$6.8 million** in 'Engineering and other' service revenue in Q1 2022 related to cost reimbursements from a customer under the 'Terms Agreement' for services rendered[28](index=28&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) MD&A discusses Q1 2022 revenue growth, strategic shift to IoT, new satellite procurement, and liquidity plans [Overview](index=20&type=section&id=Overview) Globalstar focuses on MSS and IoT, with a new $327 million satellite agreement and terrestrial spectrum advancements - Entered into a **$327.0 million** agreement in February 2022 to acquire **17 new satellites** to replenish its constellation, with delivery expected by 2025[86](index=86&type=chunk) - A customer under the 'Terms Agreement' is required to reimburse **95%** of the capital expenditures for the new satellites[86](index=86&type=chunk) - The company's terrestrial spectrum band, **n53**, is now supported in Qualcomm Technologies' Snapdragon X65 5G modem, expanding the potential device ecosystem[95](index=95&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q1 2022 total revenue increased 22% to $32.8 million, driven by engineering service revenue, reducing operating loss Revenue by Type (In thousands) | Revenue Type | Q1 2022 | Q1 2021 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$32,772** | **$26,929** | **21.7%** | | Total Service Revenue | $29,344 | $23,086 | 27.1% | | *Engineering and other* | *$7,273* | *$966* | *652.9%* | | Total Equipment Revenue | $3,428 | $3,843 | -10.8% | - The significant increase in Engineering and other service revenue was due to the timing and amount of revenue recognized under the Terms Agreement, including work to expand and upgrade gateways[111](index=111&type=chunk) - SPOT and Commercial IoT equipment sales were constrained by inventory shortages and supply chain disruptions, with several products on back order[113](index=113&type=chunk)[114](index=114&type=chunk) - MG&A expenses decreased by **$0.8 million**, primarily due to the reversal of a **$1.0 million** accrual related to 2018 shareholder litigation[119](index=119&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Globalstar's Q1 2022 cash was $11.5 million, with plans for senior secured financing to fund new satellites and refinance debt Key Liquidity Metrics (As of March 31, 2022) | Metric | Amount (in millions) | | :--- | :--- | | Cash and cash equivalents | $11.5 | | Total Debt (Carrying Amount) | $246.8 | | Q1 2022 Cash from Operations | $7.6 | - The company has a vendor financing agreement for its new satellites which provides for payment deferrals through **August 2022**, at which point deferred payments will become due[136](index=136&type=chunk) - The company intends to complete a senior secured financing to provide proceeds for the satellite construction and launch, and also expects to refinance its **2019 Facility Agreement**[136](index=136&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Globalstar faces foreign currency and interest rate risks but does not currently use hedging instruments - The company's primary market risks are foreign currency exchange fluctuations (**Canadian dollar**, **Brazilian real**, **euro**) and potential interest rate increases on future debt[140](index=140&type=chunk)[141](index=141&type=chunk) - The company does not currently use hedging instruments for foreign currency risk but is obligated to do so under certain conditions of its **2019 Facility Agreement**[140](index=140&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management confirmed effective disclosure controls, with a new ERP system implemented without material impact on internal controls - Management concluded that disclosure controls and procedures were **effective** as of **March 31, 2022**[144](index=144&type=chunk) - A new ERP system was implemented in **Q1 2022**, leading to changes in internal controls, but these changes were not deemed to have a **material adverse effect**[146](index=146&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings.) The company reported no material legal proceedings - None[147](index=147&type=chunk) [Risk Factors](index=30&type=page&id=Item%201A.%20Risk%20Factors.) Uncertain global macro-economic and political conditions, including the Ukraine conflict, pose significant risks - Uncertain global macro-economic and political conditions, including **inflation** and **interest rates**, pose a risk to operations and financial condition[148](index=148&type=chunk) - The invasion of Ukraine by Russia and related sanctions could lead to **market disruptions**, **supply chain interruptions**, and **significant volatility**, adversely impacting the business[149](index=149&type=chunk)[150](index=150&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits.) This section lists key exhibits including the Satellite Procurement Agreement and certifications - Key exhibits filed include the **Satellite Procurement Agreement** dated **February 21, 2022**, and **Section 302 and 906 certifications**[154](index=154&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2021 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) (State or Other Jurisdiction of Incorporation or Organi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 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) Incorporation or Organization) Delaware 41-2116508 (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-33117 GLOBALSTAR, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 41-2116508 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 For the quarterly perio ...

Part I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Globalstar provides global Mobile Satellite Services through its LEO constellation and is actively pursuing monetization of its 2.4 GHz spectrum [Business Overview and COVID-19 Impact](index=4&type=section&id=Business%20Overview%20and%20COVID-19%20Impact) Globalstar offers Mobile Satellite Services globally, with its business negatively impacted by the COVID-19 pandemic - Globalstar provides Mobile Satellite Services (MSS) for voice and data communications, specializing in areas with poor or no terrestrial network coverage[16](index=16&type=chunk) - The COVID-19 pandemic has led to reduced equipment sales, particularly from oil and gas customers, and requests for pricing concessions[17](index=17&type=chunk) - To mitigate the pandemic's impact, Globalstar secured a **$5.0 million** forgivable PPP loan and deferred certain payroll taxes under the CARES Act[17](index=17&type=chunk)[23](index=23&type=chunk) [Network Infrastructure](index=5&type=section&id=Network%20Infrastructure) The company's network comprises second-generation LEO satellites and a global ground network utilizing patented CDMA technology for enhanced services - The satellite network is comprised of second-generation Low Earth Orbit (LEO) satellites designed for a **15-year** mission life, offering **40%** greater capacity than the first generation[18](index=18&type=chunk) - The ground network consists of multiple gateways that use patented CDMA technology, which the company believes provides superior call clarity and lower latency compared to competitors[22](index=22&type=chunk)[23](index=23&type=chunk) - The second-generation ground network is an IMS-based solution designed to provide enhanced services with data speeds up to **72 kbps**[23](index=23&type=chunk)[24](index=24&type=chunk) [Products, Services, and Customers](index=6&type=section&id=Products%2C%20Services%2C%20and%20Customers) Globalstar offers Duplex, SPOT, and Commercial IoT services to approximately 745,000 subscribers across diverse markets Communication Service Offerings | Service Category | Description | | :--- | :--- | | **Duplex** | Two-way voice and data transmissions using devices like the GSP-1700 phone and Sat-Fi® | | **SPOT** | One-way or two-way communication and data transmissions for personal tracking and messaging, including SPOT X® and SPOT Gen4™ | | **Commercial IoT** | One-way data transmissions for asset tracking and monitoring, using products like SmartOne and ST100 | | **Engineering and Other** | Custom engineering services for developing new applications on the Globalstar network | - As of December 31, 2020, Globalstar had approximately **745,000** subscribers worldwide[27](index=27&type=chunk) - The SPOT product family has facilitated approximately **7,500** rescues since its launch in 2007, averaging nearly two rescues per day[35](index=35&type=chunk) - In February 2020, the company entered into a Terms Agreement with a potential customer for non-recurring engineering (NRE) services to assess a potential new service utilizing company assets[48](index=48&type=chunk) [Spectrum and Regulatory Structure](index=10&type=section&id=Spectrum%20and%20Regulatory%20Structure) Globalstar holds worldwide spectrum allocation, with its 2.4 GHz S-band spectrum standardized by 3GPP for terrestrial broadband services in the U.S - The FCC granted Globalstar authority to provide terrestrial broadband services over **11.5 MHz** of its licensed satellite spectrum (**2483.5 to 2495 MHz**)[58](index=58&type=chunk) - The 3GPP has designated this spectrum as Band 53 for LTE and n53 for 5G, creating a pathway for integration into handset and infrastructure ecosystems[59](index=59&type=chunk) - In February 2021, Qualcomm Technologies announced support for Band n53 in its new Snapdragon X65 modem, significantly expanding the potential device ecosystem[59](index=59&type=chunk) - Globalstar is seeking additional terrestrial approvals in various international jurisdictions to harmonize its S-band spectrum globally[62](index=62&type=chunk) [Industry, Competition, and Human Capital](index=12&type=section&id=Industry%2C%20Competition%2C%20and%20Human%20Capital) Globalstar operates in a highly competitive MSS market with significant entry barriers, employing 346 people worldwide as of December 31, 2020 - The company's most direct competitors in the global MSS market are Iridium, Inmarsat, and ORBCOMM[72](index=72&type=chunk) - Competition is primarily based on coverage, quality, portability, and pricing of services and products[72](index=72&type=chunk) - The MSS industry has significant barriers to entry, including the high cost and difficulty of obtaining spectrum licenses and building a satellite network[79](index=79&type=chunk) - As of December 31, 2020, Globalstar had **346** employees worldwide[85](index=85&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from the COVID-19 pandemic, network reliability, substantial indebtedness, intense competition, and regulatory hurdles - The COVID-19 pandemic has caused a reduction in equipment sales and challenges in collecting receivables, which could negatively impact financial results and debt covenant compliance[93](index=93&type=chunk)[96](index=96&type=chunk) - The business relies on a healthy satellite constellation and ground network; any disruptions, satellite failures, or shorter-than-anticipated orbital lives could degrade service and harm the business[100](index=100&type=chunk)[106](index=106&type=chunk) - The company has significant indebtedness (**$423.9 million** as of Dec 31, 2020) with restrictive covenants that may limit operational and financial flexibility[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) - The business is subject to extensive government regulation (FCC, ITU, etc.), and failure to maintain licenses or obtain new authorizations for terrestrial services could curtail operations[151](index=151&type=chunk)[157](index=157&type=chunk) - As of December 31, 2020, Thermo owned approximately **62%** of outstanding common stock, giving it control over shareholder votes and creating potential conflicts of interest with other stockholders[178](index=178&type=chunk) [Item 2. Properties](index=30&type=section&id=Item%202.%20Properties) Globalstar's principal headquarters are leased in Covington, Louisiana, with a global network of owned and leased facilities for its operations - The company's main headquarters are located in a **69,365 sq. ft.** leased facility in Covington, Louisiana[182](index=182&type=chunk) - Globalstar owns and leases a network of properties worldwide for gateways and control centers, including key sites in Texas, Florida, Alaska, Canada, and France[182](index=182&type=chunk) - The company intends to further expand the number of ground stations it operates globally and has executed agreements for new gateway locations expected to commence in 2021[183](index=183&type=chunk) [Item 3. Legal Proceedings](index=30&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal and regulatory proceedings, with details provided in Note 9 of the Consolidated Financial Statements - For details on material legal and regulatory proceedings, the report directs readers to Note 9 of the Consolidated Financial Statements[184](index=184&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=31&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Globalstar's common stock trades on the NYSE American, with **1.68 billion** shares outstanding as of February 26, 2021, and no history or expectation of cash dividends - The company's common stock trades on the NYSE American under the ticker symbol "GSAT"[186](index=186&type=chunk) - As of February 26, 2021, there were **1,677,878,734** shares of common stock outstanding[187](index=187&type=chunk) - The company has never paid cash dividends and is prohibited from doing so by its First and Second Lien Facility Agreements[188](index=188&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2020, total revenue slightly decreased to **$128.5 million**, operating expenses fell, and the company focused on managing its **$423.9 million** debt and maintaining liquidity [Results of Operations (2020 vs. 2019)](index=32&type=section&id=Results%20of%20Operations%20(2020%20vs.%202019)) In 2020, total revenue decreased to **$128.5 million** due to lower service and IoT equipment sales, partially offset by increased engineering revenue, while operating expenses declined Revenue by Type (2020 vs. 2019, in thousands) | Revenue Type | 2020 | 2019 | | :--- | :--- | :--- | | **Service Revenue** | | | | Duplex | $33,878 | $39,794 | | SPOT | $46,417 | $50,461 | | Commercial IoT | $17,174 | $16,972 | | Engineering and Other | $15,722 | $2,274 | | **Total Service Revenue** | **$113,191** | **$109,501** | | **Equipment Revenue** | | | | Duplex | $1,883 | $1,325 | | SPOT | $8,176 | $7,617 | | Commercial IoT | $5,140 | $9,300 | | **Total Equipment Revenue** | **$15,296** | **$18,332** | | **Total Revenue** | **$128,487** | **$131,718** | - Engineering and other service revenue increased by **$13.4 million** in 2020, primarily due to engineering services contracts, including one that generated **$10.0 million** from milestone completion[204](index=204&type=chunk) - Commercial IoT equipment sales decreased by **$4.2 million** (**45%**) in 2020, largely due to lower demand from customers in the oil and gas industry following the COVID-19 pandemic[206](index=206&type=chunk) - Total operating expenses decreased **4%** to **$187.7 million** in 2020, driven by lower cost of services, reduced equipment sales costs, and lower marketing, general & administrative expenses[207](index=207&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2020, Globalstar had **$13.3 million** in cash and **$54.7 million** in restricted cash, with total debt reduced to **$385.4 million** due to the Thermo loan conversion Cash and Debt Position (as of Dec 31, 2020) | Metric | Amount (in millions) | | :--- | :--- | | Cash and cash equivalents | $13.3 | | Restricted cash | $54.7 | | Long-term debt (carrying amount) | $385.4 | | Long-term debt (principal balance) | $423.9 | Cash Flow Summary (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $22,215 | $3,048 | | Net cash used in investing activities | ($14,536) | ($11,491) | | Net cash provided by (used in) financing activities | $1,164 | ($7,923) | - The First Lien Facility Agreement requires the company to raise no less than **$45.0 million** from the sale of equity prior to March 30, 2021, which it expects to fulfill via warrant exercises[240](index=240&type=chunk)[430](index=430&type=chunk) - In February 2020, Thermo converted the entire **$137.4 million** principal balance of its loan agreement into **200.1 million** shares of common stock, significantly reducing debt[248](index=248&type=chunk)[442](index=442&type=chunk) [Critical Accounting Policies and Estimates](index=43&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies involve significant judgments in revenue recognition, asset useful life estimation, deferred tax asset valuation, and derivative instrument valuation - Revenue recognition requires judgment, especially in allocating prices for bundled equipment and service arrangements and estimating usage patterns for prepaid annual plans[264](index=264&type=chunk)[266](index=266&type=chunk) - Estimating the useful life of assets, particularly the **15-year** life of second-generation satellites, is a critical estimate; a one-year reduction would increase annual depreciation expense by **$5.2 million**[268](index=268&type=chunk)[288](index=288&type=chunk) - The company maintains a full valuation allowance against its deferred tax assets due to a history of financial reporting losses, as it is not more likely than not that these assets will be realized[272](index=272&type=chunk) - Valuation of derivative instruments embedded in debt requires significant and subjective estimates using models like Monte Carlo simulations, and changes in these estimates can materially affect financial results[274](index=274&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Globalstar is exposed to market risks from foreign currency exchange rates and interest rate fluctuations on its variable rate debt - The company faces foreign currency risk from sales denominated in Canadian dollars, Brazilian reais, and euros, but does not currently use hedging instruments[275](index=275&type=chunk) - The company is exposed to interest rate risk due to its variable rate debt under the First Lien Facility Agreement, which is tied to LIBOR[277](index=277&type=chunk) - A **1.0%** change in interest rates would result in an approximate **$1.9 million** annual change in interest expense on the **$187.0 million** of principal outstanding under the First Lien Facility Agreement[277](index=277&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=47&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Globalstar's audited consolidated financial statements for 2020, including the independent auditor's report and detailed notes - The financial statements for the year ended December 31, 2020 were audited by Ernst & Young LLP, who provided an unqualified opinion[283](index=283&type=chunk)[284](index=284&type=chunk) - The critical audit matter identified was the estimation of the useful life of Space component assets, which involves a high degree of subjectivity and has a significant effect on depreciation expense[287](index=287&type=chunk)[289](index=289&type=chunk) [Consolidated Financial Statements](index=52&type=section&id=Consolidated%20Financial%20Statements) As of December 31, 2020, Globalstar reported total assets of **$888.1 million**, total liabilities of **$465.0 million**, and a net loss of **$109.6 million** for the year Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Total Current Assets | $68,487 | $63,260 | | Property and equipment, net | $715,909 | $799,914 | | **Total Assets** | **$888,093** | **$965,590** | | Total Current Liabilities | $114,215 | $63,060 | | Long-term debt, less current portion | $326,586 | $464,176 | | **Total Liabilities** | **$465,028** | **$558,247** | | **Total Stockholders' Equity** | **$423,065** | **$407,343** | Consolidated Statement of Operations Highlights (in thousands) | Account | 2020 | 2019 | | :--- | :--- | :--- | | Total Revenue | $128,487 | $131,718 | | Total Operating Expenses | $187,650 | $195,764 | | Loss from Operations | ($59,163) | ($64,046) | | **Net (Loss) Income** | **($109,639)** | **$15,324** | [Notes to Consolidated Financial Statements](index=58&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, revenue, debt agreements, leases, derivatives, and other financial matters, including the impact of COVID-19 - Note 2 disaggregates revenue by product/service and geography, showing the United States as the largest market for both service and equipment revenue in 2020[398](index=398&type=chunk) - Note 6 details the company's significant debt instruments, including the First Lien Facility Agreement (**$187.0M** principal) and Second Lien Facility Agreement (**$230.6M** principal) as of Dec 31, 2020[419](index=419&type=chunk)[235](index=235&type=chunk)[244](index=244&type=chunk) - Note 7 explains that the company has various embedded derivatives in its debt instruments that are measured at fair value, resulting in a derivative gain of **$2.9 million** in 2020[453](index=453&type=chunk)[454](index=454&type=chunk) - Note 13 discloses that the company has a full valuation allowance of **$381.1 million** against its deferred tax assets due to a history of losses[502](index=502&type=chunk) [Item 9A. Controls and Procedures](index=99&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020, with no material changes to internal controls during the year - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[534](index=534&type=chunk) - The company's internal control over financial reporting as of December 31, 2020, was audited by Ernst & Young LLP, who concluded it was effective[539](index=539&type=chunk) - No changes in internal control over financial reporting occurred during the year that materially affected, or are likely to materially affect, internal controls, despite the implementation of a new billing system and remote work due to COVID-19[536](index=536&type=chunk) Part III [Items 10-14](index=100&type=section&id=Items%2010-14) Information for these items, including corporate governance, executive compensation, and security ownership, is incorporated by reference from the company's 2021 Proxy Statement - Information regarding Directors, Executive Officers, and Corporate Governance is incorporated by reference from the 2021 Proxy Statement[541](index=541&type=chunk) - Details on Executive Compensation are incorporated by reference from the 2021 Proxy Statement[542](index=542&type=chunk) - Security Ownership, Related Transactions, and Principal Accounting Fees information is incorporated by reference from the 2021 Proxy Statement[543](index=543&type=chunk)[544](index=544&type=chunk)[545](index=545&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=101&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This item lists the financial statements and exhibits filed with the report, noting the omission of financial statement schedules as information is already provided - This section lists the financial statements and exhibits filed as part of the annual report[547](index=547&type=chunk) - All financial statement schedules are omitted as they are not applicable or the required information is already present in the financial statements or notes[548](index=548&type=chunk) [Item 16. Form 10-K Summary](index=102&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that no Form 10-K summary is provided in this report - No Form 10-K summary is provided[550](index=550&type=chunk)

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) The company reported a net loss for Q3 and the nine months ended September 30, 2020, primarily due to reduced derivative gains, while total assets decreased and debt was significantly reduced by a loan conversion [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Globalstar reported a net loss of $24.9 million for Q3 2020 and $87.9 million for the nine-month period, primarily due to a significant decrease in derivative gains compared to the prior year, despite a slight revenue decline Condensed Consolidated Statements of Operations (In thousands) | | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | $32,757 | $38,614 | $95,315 | $99,883 | | **Loss from operations** | $(14,635) | $(12,005) | $(44,099) | $(46,992) | | **Derivative gain** | $1,225 | $50,156 | $1,564 | $142,280 | | **Net (loss) income** | $(24,946) | $21,111 | $(87,905) | $53,071 | | **Basic (loss) income per share** | $(0.01) | $0.01 | $(0.05) | $0.04 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Globalstar's total assets decreased to $910.5 million as of September 30, 2020, primarily due to reduced property and equipment, while total liabilities significantly decreased to $463.9 million mainly from the Thermo loan conversion, leading to an increase in stockholders' equity Condensed Consolidated Balance Sheet Highlights (In thousands) | | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $73,311 | $63,260 | | **Total assets** | $910,513 | $965,590 | | **Total current liabilities** | $107,177 | $63,060 | | **Long-term debt, less current portion** | $330,069 | $464,176 | | **Total liabilities** | $463,958 | $558,247 | | **Total stockholders' equity** | $446,555 | $407,343 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly improved to $23.7 million for the nine months ended September 30, 2020, while net cash from financing activities sharply decreased, resulting in an overall increase in cash, cash equivalents, and restricted cash to $74.3 million Cash Flow Summary (In thousands) | | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $23,687 | $6,044 | | **Net cash used in investing activities** | $(9,295) | $(7,625) | | **Net cash provided by financing activities** | $872 | $13,566 | | **Net increase in cash, cash equivalents and restricted cash** | $15,208 | $11,959 | | **Cash, cash equivalents and restricted cash, end of period** | $74,336 | $87,449 | [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) The notes detail financial reporting policies, the impact of COVID-19, and key events including the adoption of ASU 2016-13, the conversion of the $137.4 million Thermo Loan into common stock, and the receipt of a $5.0 million PPP loan - The company assessed the impact of COVID-19, noting lower demand for products and services, particularly from the oil and gas market, and while expecting this to be temporary, it increased its loss rate for certain receivables[28](index=28&type=chunk)[29](index=29&type=chunk)[46](index=46&type=chunk) - On February 19, 2020, Thermo converted the entire outstanding principal balance of its loan, totaling **$137.4 million** (including accrued interest), into **200.1 million shares** of common stock[63](index=63&type=chunk)[85](index=85&type=chunk) - In April 2020, the company received a **$5.0 million** loan under the Payroll Protection Program (PPP) as part of the CARES Act, which it expects to be forgiven[31](index=31&type=chunk)[68](index=68&type=chunk) Revenue by Product and Service (Nine Months Ended Sep 30, In thousands) | Revenue Type | 2020 | 2019 | | :--- | :--- | :--- | | **Service Revenue** | | | | Duplex | $26,175 | $34,265 | | SPOT | $35,098 | $38,196 | | Commercial IoT | $13,028 | $12,577 | | Engineering and other | $9,814 | $1,449 | | **Total Service Revenue** | **$84,410** | **$86,971** | | **Subscriber Equipment Sales** | **$10,905** | **$12,912** | | **Total Revenue** | **$95,315** | **$99,883** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses the adverse impact of COVID-19 on revenue and equipment sales, noting decreased operating expenses and a liquidity position supported by cash from operations and a PPP loan, while acknowledging uncertainty regarding future debt covenant compliance following the Thermo loan conversion [Business Overview](index=22&type=section&id=Overview) Globalstar provides Mobile Satellite Services (MSS) through its LEO satellite constellation and is actively pursuing terrestrial authority for its 2.4GHz spectrum (Band 53 and 5G variant n53) to enable private LTE networks and cellular densification - The company provides MSS through its Duplex, SPOT, and Commercial IoT product lines, serving approximately **751,000 subscribers** as of September 30, 2020[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[103](index=103&type=chunk) - Globalstar is actively seeking international approvals to harmonize its S-band spectrum for terrestrial mobile broadband services, having already received authorization in the U.S. and other countries[106](index=106&type=chunk)[107](index=107&type=chunk) - The 3GPP has approved Band 53 for the company's 2.4 GHz spectrum and its 5G variant, n53, creating a pathway for integration into handset and infrastructure ecosystems[109](index=109&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Total revenue decreased 15% in Q3 2020 and 5% for the nine-month period, primarily due to lower Duplex service revenue and mixed subscriber equipment sales, while total operating expenses declined due to reduced maintenance, R&D, and MG&A costs Revenue Breakdown (Three Months Ended Sep 30, 2020 vs 2019, In thousands) | Revenue Type | 2020 | 2019 | | :--- | :--- | :--- | | **Service Revenue** | | | | Duplex | $9,956 | $12,704 | | SPOT | $11,396 | $12,482 | | Commercial IoT | $4,420 | $4,526 | | Engineering and other | $2,518 | $416 | | **Subscriber Equipment Sales** | $4,372 | $4,462 | | **Total Revenue** | **$32,757** | **$34,152** | - Duplex service revenue decreased **22%** in Q3 2020 (excluding a prior-year adjustment) due to a **13% decrease** in average subscribers and a **9% decrease** in ARPU[123](index=123&type=chunk) - Commercial IoT equipment sales decreased by **$0.9 million** in Q3 and **$2.6 million** in the nine-month period, driven by lower demand from customers in the oil and gas industry due to COVID-19[128](index=128&type=chunk) - Total operating expenses decreased by **6%** for Q3 2020, helped by lower maintenance costs, reduced subscriber acquisition costs, and a prior-year write-off of financing costs that did not recur[129](index=129&type=chunk)[130](index=130&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2020, the company had $19.5 million in cash and cash equivalents, with long-term debt significantly reduced by the Thermo loan conversion, but faces a requirement to raise $45.0 million in equity by March 31, 2021, and acknowledges uncertainty regarding future debt covenant compliance due to COVID-19 - The company's principal sources of liquidity are cash on hand (**$19.5M**), cash from operations, and anticipated proceeds from warrant exercises[143](index=143&type=chunk)[144](index=144&type=chunk) - The Facility Agreement requires the company to raise no less than **$45.0 million** of equity prior to March 31, 2021, to be applied towards the June 30, 2021 principal payment[151](index=151&type=chunk) - The company was in compliance with all debt covenants as of September 30, 2020, but notes that future compliance is uncertain due to the ongoing impact of COVID-19[143](index=143&type=chunk)[148](index=148&type=chunk)[155](index=155&type=chunk) Cash Flow Summary (Nine Months Ended, In thousands) | | Sep 30, 2020 | Sep 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $23,687 | $6,044 | | **Net cash used in investing activities** | $(9,295) | $(7,625) | | **Net cash provided by financing activities** | $872 | $13,566 | [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company is exposed to market risks from foreign currency exchange rates, particularly from sales in Canadian dollars, Brazilian reais, and euros, and interest rate fluctuations on its variable rate Facility Agreement, where a 1.0% change would impact annual interest expense by approximately $1.9 million - The company faces foreign currency risk from sales denominated in Canadian dollars, Brazilian reais, and euros[169](index=169&type=chunk) - The company has interest rate risk from its variable rate Facility Agreement, which is based on LIBOR, where a **1.0% change** in interest rates would change annual interest expense by about **$1.9 million** on the **$187.0 million** principal outstanding[171](index=171&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were effective as of September 30, 2020, noting that remote work arrangements due to COVID-19 and the implementation of a new billing system did not adversely affect internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of September 30, 2020, providing reasonable assurance of timely and accurate reporting[173](index=173&type=chunk)[174](index=174&type=chunk) - The company implemented a new billing system in April 2020, which resulted in changes to internal controls that were not deemed to have a material adverse effect[176](index=176&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings.) The company reported no legal proceedings - None[178](index=178&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors.) The company highlights the adverse impact of the COVID-19 pandemic as a significant risk factor, leading to reduced equipment sales, challenges in collecting receivables, and potential supply chain disruptions, which could negatively impact operations and debt covenant compliance - The COVID-19 pandemic could have a material adverse impact on financial condition and results of operations[180](index=180&type=chunk) - Specific pandemic-related risks include reduced sales of subscriber equipment, challenges in collecting receivables from customers in the oil & gas and retail industries, and potential supply chain interruptions from China[182](index=182&type=chunk)[183](index=183&type=chunk) - The company warns it may not remain in compliance with certain financial covenants in its Facility Agreement over the next twelve months due to the pandemic's impact[184](index=184&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) Not applicable - Not Applicable[186](index=186&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information.) The company reported no other information - None[187](index=187&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer, and XBRL data files

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 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. Emplo ...