What was the purpose of the equity issuances to Terrapin and Hughes?

The issuance to Terrapin finalized a pre-existing Common Stock Purchase Agreement, allowing Globalstar to raise capital. The issuance to Hughes was a pre-payment for contract milestones, providing Globalstar with an alternative to cash outflow and Hughes with discounted shares.

Are these shares being sold to the public?

While the shares were issued in unregistered transactions, they have been registered for resale. This means that Terrapin and Hughes can sell these shares in the public market at their discretion, subject to market conditions and any holding period requirements.

Does this mean Globalstar is issuing new shares from its authorized stock?

Yes, the filing indicates the issuance of Globalstar's voting common stock, implying these shares are either newly issued or drawn from treasury stock, increasing the total number of outstanding shares potentially held by the public.

What is the significance of the 7% discount for Hughes?

The 7% discount means Hughes received shares valued at 7% less than their market price at the time of the transaction, making it a favorable arrangement for Hughes to accept stock over cash. For Globalstar, it meant a larger number of shares had to be issued to satisfy the $15.5 million obligation.

GSAT 8-K: Securities & Listing

Summary

Globalstar, Inc. (GSAT) filed an 8-K on June 25, 2015, detailing two significant unregistered sales of equity securities. The company finalized its Common Stock Purchase Agreement with Terrapin Opportunity, L.P. by selling the remaining $14 million worth of common stock, totaling 6,562,398 shares. This transaction concludes the equity purchase agreement with Terrapin initiated in December 2012, which had a potential of up to $30.0 million. Additionally, Globalstar issued 7,382,356 shares of its voting common stock to Hughes as a pre-payment of approximately $15.5 million for outstanding contract milestones. This issuance was an option exercised by Hughes to receive stock at a 7% discount instead of cash, as disclosed in their prior quarterly report. Both issuances are deemed exempt from registration under Section 4(a)(2) of the Securities Act, with the shares being registered for resale.

Key Highlights

1Globalstar completed its $30.0 million Common Stock Purchase Agreement with Terrapin Opportunity, L.P. by selling the final $14 million in shares.
2A total of 6,562,398 shares were issued to Terrapin as part of the agreement's conclusion.
3Hughes exercised an option to receive approximately $15.5 million in Globalstar common stock instead of cash for contract milestones.
47,382,356 shares were issued to Hughes under this pre-payment arrangement at a 7% discount.
5Both equity issuances are considered exempt from registration under Section 4(a)(2) of the Securities Act.
6The shares issued to both Terrapin and Hughes have been registered for resale.
7These transactions represent non-dilutive or strategically structured equity financings rather than public offerings.

Globalstar, Inc. 8-K Report, Unregistered Securities Sale (Jun 25, 2015)

Summary

Key Highlights

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