8-KMaterial AgreementsSecurities & ListingRegulation FD+1

Globalstar, Inc. 8-K Report, Material Agreement (Jan 2, 2013)

Filed January 2, 2013For Securities:GSAT

Summary

Globalstar, Inc. (GSAT) has entered into a material definitive agreement with Terrapin Opportunity, L.P. for a committed equity line financing facility. This agreement allows Globalstar to potentially sell up to $30.0 million of its common stock to Terrapin over a 24-month period. The pricing of these shares will be based on the daily volume weighted average price, with a discount ranging from 3.5% to 8.0%. This financing provides Globalstar with flexibility to access capital as needed, while Terrapin's ownership is capped at 9.9% to avoid exceeding control thresholds. In conjunction with this financing, Globalstar has also entered into a Registration Rights Agreement, committing to file a resale registration statement for Terrapin's shares within specific timeframes. This ensures that the shares purchased by Terrapin can be resold into the public market. Financial West Group acted as the placement agent for this transaction, receiving fees and expense reimbursement. The company has also disclosed this arrangement via a press release on December 31, 2012.

Key Highlights

  • 1Globalstar entered into a $30.0 million committed equity line financing facility with Terrapin Opportunity, L.P.
  • 2The facility has a 24-month term, allowing Globalstar to draw down capital at its discretion.
  • 3Share prices will be determined by market prices with a discount of 3.5% to 8.0%.
  • 4Terrapin's beneficial ownership is capped at 9.9% of outstanding common stock.
  • 5Globalstar granted registration rights to Terrapin for resale of purchased shares.
  • 6An initial resale registration statement is to be filed within 60 days and declared effective within 120-180 days.
  • 7Financial West Group served as the placement agent for the financing.

Frequently Asked Questions

This filing announces Globalstar's entry into a significant financing agreement, specifically a committed equity line facility, with Terrapin Opportunity, L.P. It outlines the terms under which Globalstar can raise up to $30.0 million by selling its common stock to Terrapin over the next two years.

Globalstar can initiate 'draw downs' requesting Terrapin to purchase a specified amount of stock. The purchase price will be based on the volume-weighted average price of Globalstar's stock over a defined period, reduced by a discount between 3.5% and 8.0%. Terrapin can also be required to purchase a percentage of the daily trading volume, subject to certain limitations.

The Registration Rights Agreement ensures that Terrapin can sell the shares it purchases from Globalstar. Globalstar is obligated to file registration statements with the SEC to register these shares for resale, allowing them to be traded publicly. This is a crucial step for Terrapin to be able to liquidate its investment.

Yes, the agreement includes a provision that Terrapin and its affiliates cannot beneficially own more than 9.9% of Globalstar's outstanding common stock at any time. This is a standard clause in such agreements to prevent excessive ownership concentration and potential control issues.