Summary
Globalstar, Inc. (GSAT) filed an 8-K on September 29, 2009, addressing several critical corporate actions and potential risks. The company received a delisting warning from Nasdaq due to its stock price closing below $1.00 for 30 consecutive days, with a 180-day grace period until March 29, 2010, to regain compliance. This poses a significant risk to shareholder value if not rectified. Concurrently, the company announced significant executive compensation and capital structure changes aimed at aligning management incentives and potentially facilitating strategic transactions.
Key Highlights
- 1Nasdaq has formally notified Globalstar that its common stock is not in compliance with the $1.00 minimum bid price requirement for continued listing.
- 2Globalstar has been granted a 180-day grace period, until March 29, 2010, to raise its stock bid price to $1.00 or more for 10 consecutive business days.
- 3If compliance is not met, Globalstar may be eligible for an additional 180-day period if it meets other Nasdaq Capital Market initial listing criteria, otherwise, delisting proceedings will commence.
- 4CEO Peter J. Dalton received a stock option grant of 3,000,000 shares at $0.83, with 1.5 million vesting immediately and the remainder vesting upon a 20-day consecutive closing price of $3.00.
- 5Mr. Dalton is also eligible for a 1% bonus if he is materially involved in a sale of all equity or substantially all assets at a price of at least $3.00 per share.
- 6The company amended its certificate of incorporation to increase authorized shares from 900 million to 1.1 billion, including the creation of 135 million shares of non-voting common stock.
- 7Three new Class C directors were elected at the annual meeting on September 23, 2009.