8-KSecurities & Listing

Globalstar, Inc. 8-K Report, Unregistered Securities Sale (Dec 13, 2013)

Filed December 13, 2013For Securities:GSAT

Summary

This 8-K filing from Globalstar, Inc. on December 13, 2013, details the company's issuance of unregistered equity securities to Hughes Network Systems LLC (Hughes), a subsidiary of EchoStar Corporation. This issuance was part of an agreement where Hughes could elect to receive Globalstar's common stock instead of cash for certain milestone payments related to ground network equipment and software upgrades. The filing discloses two separate issuances to Hughes: one on November 18, 2013, for approximately $4.3 million worth of stock, and a subsequent one on December 13, 2013, for approximately $10.1 million worth of stock. These issuances were conducted as private placements exempt from registration under Section 4(2) of the Securities Act of 1933. Globalstar has agreed to file a registration statement for the resale of these shares by Hughes.

Key Highlights

  • 1Globalstar issued approximately $10.1 million of its voting common stock to Hughes Network Systems LLC on December 11, 2013, as an unregistered private placement.
  • 2This issuance was in lieu of cash payments for milestone obligations under a prior contract.
  • 3This follows a previous issuance of approximately $4.3 million in Globalstar stock to Hughes on November 18, 2013.
  • 4The shares were issued at $1.60 per share in the December issuance and $1.35 per share in the November issuance.
  • 5The issuances are exempt from registration under Section 4(2) of the Securities Act of 1933.
  • 6Globalstar has committed to filing a registration statement to allow Hughes to resell the issued shares.

Frequently Asked Questions

The primary event reported is Globalstar's issuance of unregistered common stock to Hughes Network Systems LLC, a subsidiary of EchoStar Corporation, as a form of payment for certain contractual obligations instead of cash.

On December 11, 2013, Globalstar issued approximately $10.1 million worth of its voting common stock to Hughes at $1.60 per share. This followed an earlier issuance on November 18, 2013, where approximately $4.3 million worth of stock was issued at $1.35 per share.

The issuance was made pursuant to an agreement that allowed Hughes the option to receive Globalstar's voting common stock at a discount in lieu of cash payments related to milestone achievements under a prior contract for ground network equipment and related components.

These shares were issued in a private placement exempt from registration under Section 4(2) of the Securities Act of 1933. However, Globalstar has agreed to file a registration statement to permit Hughes to resell these shares in the public market.