8-KMaterial AgreementsRegulation FDExhibits & Filings

Globalstar, Inc. 8-K Report, Material Agreement (Dec 20, 2018)

Filed December 20, 2018For Securities:GSAT

Summary

Globalstar, Inc. (GSAT) announced on December 20, 2018, a material definitive agreement through an underwriting agreement with Cantor Fitzgerald & Co. for the sale of 171,428,571 shares of common stock at $0.35 per share. The company also granted the underwriter an option to purchase an additional 25,714,285 shares. This offering is expected to generate approximately $58.9 million in net proceeds for Globalstar. Crucially, 80% of these net proceeds will be placed in a restricted account specifically for debt service obligations. The company anticipates these funds, along with existing cash, will cover the December 2018 principal and interest payment under its Facility Agreement. Furthermore, Globalstar expects these proceeds to qualify as an "Equity Cure Contribution," enabling the company to remain compliant with its debt covenants as of December 31, 2018. The remainder of the net proceeds will be used for general corporate purposes.

Key Highlights

  • 1Globalstar entered into an underwriting agreement to sell 171,428,571 shares of common stock at $0.35 per share.
  • 2The offering is expected to raise approximately $58.9 million in net proceeds.
  • 3An option for an additional 25,714,285 shares was granted to the underwriter.
  • 480% of the net proceeds will be held in a restricted account for debt service obligations.
  • 5The proceeds are intended to cover the December 2018 debt payment under the Facility Agreement.
  • 6The company expects the proceeds to qualify as an Equity Cure Contribution to maintain covenant compliance.
  • 7Remaining proceeds will be used for general corporate purposes.

Frequently Asked Questions

The primary purpose of this stock offering is to raise capital to meet debt service obligations, specifically the principal and interest payment due in December 2018 under the company's Facility Agreement. It also aims to ensure compliance with debt covenants.

Approximately $58.9 million in net proceeds will be generated. Eighty percent of this amount will be deposited in a restricted account solely for debt service. The company expects this, along with cash on hand, to cover the December 2018 debt payment. The remaining portion of the net proceeds will be used for general corporate purposes.

Yes, Globalstar expects the proceeds from the offering to qualify as an 'Equity Cure Contribution.' This is intended to allow the company to remain in compliance with the covenants under its Facility Agreement as of December 31, 2018.

The offering is priced at $0.35 per share for 171,428,571 shares of common stock. Additionally, the underwriter has a 30-day option to purchase up to 25,714,285 more shares at the same price.