gsat-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-33117

GLOBALSTAR, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware						41-2116508
(State or Other Jurisdiction of						(I.R.S. Employer Identification No.)
Incorporation or Organization)

1351 Holiday Square Blvd.

Covington, Louisiana 70433

(Address of Principal Executive Offices)

Registrant's Telephone Number, Including Area Code: (985) 335-1500

Securities registered pursuant to section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock, par value $0.0001 per share

GSAT

NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

(Do not check if a smaller reporting company)

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of April 30, 2021, 1,792 million shares of voting common stock were outstanding, and no shares of nonvoting common stock were authorized or outstanding. Unless the context otherwise requires, references to common stock in this Report mean the Registrant’s voting common stock.

FORM 10-Q

GLOBALSTAR, INC.

TABLE OF CONTENTS


		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	25

Item 4.	Controls and Procedures.	26

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	27

Item 1A.	Risk Factors.	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	27

Item 3.	Defaults Upon Senior Securities.	27

Item 4.	Mine Safety Disclosures.	27

Item 5.	Other Information.	27

Item 6.	Exhibits.	27

Signatures		28

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

GLOBALSTAR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)

(Unaudited)


	Three Months Ended
	March 31, 2021		March 31, 2020
Revenue:
Service revenue	$	23,086	$	28,935
Subscriber equipment sales	3,843		3,259
Total revenue	26,929		32,194
Operating expenses:
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)	9,077		8,728
Cost of subscriber equipment sales	2,899		2,643

Marketing, general and administrative	10,097		11,091
Depreciation, amortization and accretion	24,116		23,817
Total operating expenses	46,189		46,279
Loss from operations	(19,260)		(14,085)
Other (expense) income:


Interest income and expense, net of amounts capitalized	(11,574)		(14,010)
Derivative loss	(1,129)		(821)

Foreign currency loss	(4,315)		(8,953)
Other	22		(333)
Total other (expense) income	(16,996)		(24,117)
Loss before income taxes	(36,256)		(38,202)
Income tax expense	77		21
Net loss	$	(36,333)	$	(38,223)

Other comprehensive loss:
Foreign currency translation adjustments	3,242		5,303
Comprehensive loss	$	(33,091)	$	(32,920)

Net loss per common share:
Basic	$	(0.02)	$	(0.02)
Diluted	(0.02)		(0.02)
Weighted-average shares outstanding:
Basic	1,679,754		1,557,960
Diluted	1,679,754		1,557,960

See accompanying notes to unaudited interim condensed consolidated financial statements.

GLOBALSTAR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share data)

(Unaudited)


	March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	8,369	$	13,330
Restricted cash	47,303		3,625
Accounts receivable, net of allowance for credit losses of $3,776 and $4,352, respectively	28,257		22,147
Inventory	12,730		13,736
Prepaid expenses and other current assets	15,348		15,649
Total current assets	112,007		68,487
Property and equipment, net	695,967		715,909
Restricted cash	51,068		51,068
Operating lease right of use assets, net	14,455		14,400
Intangible and other assets, net of accumulated amortization of $10,249 and $9,998, respectively	39,800		38,229
Total assets	$	913,297	$	888,093
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	55,299	$	58,824
Accounts payable	5,370		2,917
Accrued expenses	27,145		25,916
Payables to affiliates	303		581

Deferred revenue	25,903		25,977
Total current liabilities	114,020		114,215
Long-term debt, less current portion	335,626		326,586
Operating lease liabilities	13,408		13,726
Employee benefit obligations	3,585		3,650
Derivative liabilities	1,867		123
Deferred revenue	5,728		3,280
Other non-current liabilities	3,353		3,448
Total non-current liabilities	363,567		350,813

Commitments and contingencies

Stockholders’ equity:
Preferred Stock of $0.0001 par value; 100,000,000 shares authorized and none issued and outstanding at March 31, 2021 and December 31, 2020, respectively	—		—
Series A Preferred Convertible Stock of $0.0001 par value; one share authorized and none issued and outstanding at March 31, 2021 and December 31, 2020, respectively	—		—
Voting Common Stock of $0.0001 par value; 1,900,000,000 shares authorized; 1,791,702,906 and 1,674,668,617 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	179		167
Nonvoting Common Stock of $0.0001 par value; no shares authorized and none issued and outstanding at March 31, 2021 and December 31, 2020, respectively	—		—
Additional paid-in capital	2,142,290		2,096,566
Accumulated other comprehensive income (loss)	298		(2,944)
Retained deficit	(1,707,057)		(1,670,724)
Total stockholders’ equity	435,710		423,065
Total liabilities and stockholders’ equity	$	913,297	$	888,093

See accompanying notes to unaudited interim condensed consolidated financial statements.

GLOBALSTAR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)


	Common Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Deficit		Total
Balances – January 1, 2021	1,674,669	$	167	$	2,096,566	$	(2,944)	$	(1,670,724)	$	423,065
Net issuance of restricted stock awards and recognition of stock-based compensation	1,915	—		1,875		—		—		1,875
Contribution of services	—	—		47		—		—		47
Recognition of stock-based compensation of employee stock purchase plan	—	—		79		—		—		79
Issuance of stock for employee stock option exercises	83	—		57		—		—		57
Issuance of stock for warrant exercises	115,036	12		43,666		—		—		43,678
Other comprehensive income	—	—		—		3,242		—		3,242
Net loss	—	—		—		—		(36,333)		(36,333)
Balances – March 31, 2021	1,791,703	$	179	$	2,142,290	$	298	$	(1,707,057)	$	435,710


	Common Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Deficit		Total
Balances – January 1, 2020	1,464,544	$	146	$	1,970,047	$	(3,449)	$	(1,559,401)	$	407,343
Net issuance of restricted stock awards and recognition of stock-based compensation	3,020	1		1,729		—		—		1,730
Contribution of services	—	—		91		—		—		91
Recognition of stock-based compensation of employee stock purchase plan	—	—		102		—		—		102
Common stock issued in connection with conversion of Loan Agreement with Thermo	200,140	20		120,441		—		—		120,461
Impact of adoption of Credit Loss Standard	—	—		—		—		(1,684)		(1,684)
Other comprehensive income	—	—		—		5,303		—		5,303
Net loss	—	—		—		—		(38,223)		(38,223)
Balances – March 31, 2020	1,667,704	$	167	$	2,092,410	$	1,854	$	(1,599,308)	$	495,123

See accompanying notes to unaudited interim condensed consolidated financial statements.

GLOBALSTAR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended
	March 31, 2021		March 31, 2020
Cash flows provided by operating activities:
Net loss	$	(36,333)	$	(38,223)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, amortization and accretion	24,116		23,817
Change in fair value of derivatives	1,129		821
Stock-based compensation expense	1,090		1,280
Amortization of deferred financing costs	1,166		1,861
Provision for credit losses	420		721
Noncash interest and accretion expense	8,275		9,250





Unrealized foreign currency loss	4,270		8,942
Other, net	(96)		19
Changes in operating assets and liabilities:
Accounts receivable	(6,930)		(2,559)
Inventory	453		174
Prepaid expenses and other current assets	(77)		3,452
Other assets	531		(953)
Accounts payable and accrued expenses	4,326		(1,598)
Payables to affiliates	(277)		120
Other non-current liabilities	(83)		(10)
Deferred revenue	2,532		(2,509)
Net cash provided by operating activities	4,512		4,605
Cash flows used in investing activities:
Network upgrades (including capitalized interest)	(3,093)		(151)
Property and equipment additions	(1,212)		(1,067)

Purchase of intangible assets	(669)		(360)
Net cash used in investing activities	(4,974)		(1,578)
Cash flows provided by (used in) financing activities:
Principal payments of the First Lien Facility Agreement	(4,357)		(276)
Proceeds from exercise of warrants	43,678		—

Payments for debt and equity issuance costs	(133)		(145)


Proceeds from issuance of common stock and exercise of options	57		—
Net cash provided by (used in) financing activities	39,245		(421)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(66)		(155)
Net increase in ca

SEC Form 10-Q filed by Globalstar, Inc.