Summary
This 8-K filing from Globalstar, Inc. (GSAT) dated November 25, 2013, details a significant event where Hughes Network Systems LLC, a subsidiary of EchoStar Corporation, elected to receive shares of Globalstar's common stock instead of cash for milestone payments related to a 2008 contract. Hughes received approximately $4.3 million worth of Globalstar's voting common stock, issued at a 7% discount based on a trailing volume-weighted average price. This transaction involved the issuance of 3,166,474 shares at $1.35 per share under a private placement exemption. Furthermore, Globalstar has committed to filing a registration statement to allow for the resale of up to $14.5 million of its voting common stock, representing the total potential value of shares issuable to Hughes under their agreement. The company anticipates this registration process to be finalized by early 2014. This move could increase the float of Globalstar's stock available for public trading, which investors should monitor.
Key Highlights
- 1Hughes Network Systems LLC elected to receive Globalstar common stock instead of cash for milestone payments, totaling approximately $4.3 million.
- 2The shares were issued at a 7% discount based on a trailing volume-weighted average price.
- 33,166,474 shares of voting common stock were issued to Hughes at $1.35 per share on November 18, 2013.
- 4The issuance was conducted as a private placement, exempt from registration under the Securities Act of 1933.
- 5Globalstar will file a registration statement to permit the resale of up to $14.5 million of voting common stock by Hughes.
- 6The registration process is expected to be completed by early 2014.
- 7This event relates to Globalstar's 2008 contract with Hughes for ground network equipment and satellite interface chips.