Globalstar, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Globalstar, Inc. on December 13, 2013, reporting events occurring on December 11, 2013. The filing addresses Item 3.02 regarding unregistered sales of equity securities to Hughes Network Systems LLC, a subsidiary of EchoStar Corporation.
Key Financial Metrics
The filing does not provide standard financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The report focuses exclusively on a specific equity transaction.
Material Changes and Transaction Details
Globalstar executed two private placements of voting common stock to Hughes Network Systems LLC in lieu of cash milestone payments under a 2008 contract for ground network equipment and software upgrades:
- November 2013 Transaction: Hughes exercised an option for approximately $4.3 million in stock. Globalstar issued 3,166,474 shares at $1.35 per share on November 18, 2013.
- December 2013 Transaction: Hughes exercised remaining options for approximately $10.1 million in stock. Globalstar issued 6,334,141 shares at $1.60 per share on December 13, 2013.
Both issuances were conducted as private placements exempt from registration under Section 4(2) of the Securities Act of 1933. The shares were issued at a 7% discount based on a trailing volume weighted average price calculation. Globalstar has filed a registration statement covering the resale of these shares.
Guidance, Outlook, and Risks
The filing contains no management commentary, financial guidance, outlook, or discussion of risks and contingencies beyond the disclosure of the equity issuance.
Key Facts for Investor Verification
- Total of 9,500,615 shares of voting common stock were issued to Hughes Network Systems LLC in two tranches during November and December 2013.
- The transactions converted approximately $14.4 million in cash milestone obligations into equity.
- The issuance price increased from $1.35 per share in November to $1.60 per share in December.
- A registration statement has been filed to allow for the future resale of these shares by Hughes.