2018 Q1 Form 10-Q Financial Statement

#000136686818000032 Filed on May 10, 2018

View on sec.gov

Income Statement

Concept 2018 Q1 2017 Q1
Revenue $28.75M $24.65M
YoY Change 16.62% 12.9%
Cost Of Revenue $9.029M $8.974M
YoY Change 0.61% 18.22%
Gross Profit $19.72M $15.68M
YoY Change 25.78% 10.06%
Gross Profit Margin 68.59% 63.6%
Selling, General & Admin $11.28M $9.419M
YoY Change 19.7% 9.4%
% of Gross Profit 57.18% 60.08%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $19.23M $19.23M
YoY Change -0.02% 0.97%
% of Gross Profit 97.52% 122.68%
Operating Expenses $11.28M $9.419M
YoY Change 19.7% 9.4%
Operating Profit -$12.96M -$15.13M
YoY Change -14.36% -3.61%
Interest Expense -$7.353M -$8.828M
YoY Change -16.71% -3.04%
% of Operating Profit
Other Income/Expense, Net $100.9M -$4.994M
YoY Change -2121.01% -54.84%
Pretax Income $87.97M -$20.13M
YoY Change -537.12% -24.78%
Income Tax $41.00K $36.00K
% Of Pretax Income 0.05%
Net Earnings $87.93M -$20.16M
YoY Change -536.14% -25.18%
Net Earnings / Revenue 305.85% -81.78%
Basic Earnings Per Share $0.07 -$0.02
Diluted Earnings Per Share -$0.01 -$0.02
COMMON SHARES
Basic Shares Outstanding 1.262B shares 1.114B shares
Diluted Shares Outstanding 1.437B shares 1.114B shares

Balance Sheet

Concept 2018 Q1 2017 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $48.80M $23.50M
YoY Change 107.66% 97.48%
Cash & Equivalents $48.81M $23.54M
Short-Term Investments
Other Short-Term Assets $70.40M $4.800M
YoY Change 1366.67% 9.09%
Inventory $7.671M $8.851M
Prepaid Expenses
Receivables $19.33M $12.92M
Other Receivables $0.00 $0.00
Total Short-Term Assets $144.1M $50.13M
YoY Change 187.36% 19.19%
LONG-TERM ASSETS
Property, Plant & Equipment $958.1M $1.027B
YoY Change -6.74% -4.02%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $37.90M
YoY Change -10.61%
Total Long-Term Assets $982.7M $1.084B
YoY Change -9.33% -3.68%
TOTAL ASSETS
Total Short-Term Assets $144.1M $50.13M
Total Long-Term Assets $982.7M $1.084B
Total Assets $1.127B $1.134B
YoY Change -0.63% -2.86%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $5.625M $6.208M
YoY Change -9.39% 1.19%
Accrued Expenses $27.89M $27.52M
YoY Change 1.35% 2.51%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $79.22M $75.76M
YoY Change 4.57% 130.71%
Total Short-Term Liabilities $166.5M $176.1M
YoY Change -5.48% 58.75%
LONG-TERM LIABILITIES
Long-Term Debt $441.3M $507.5M
YoY Change -13.04% -8.56%
Other Long-Term Liabilities $5.586M $6.191M
YoY Change -9.77% -46.38%
Total Long-Term Liabilities $576.3M $802.4M
YoY Change -28.18% -4.41%
TOTAL LIABILITIES
Total Short-Term Liabilities $166.5M $176.1M
Total Long-Term Liabilities $576.3M $802.4M
Total Liabilities $742.8M $978.5M
YoY Change -24.09% 2.96%
SHAREHOLDERS EQUITY
Retained Earnings -$1.480B -$1.502B
YoY Change -1.47% 9.14%
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $384.0M $155.4M
YoY Change
Total Liabilities & Shareholders Equity $1.127B $1.134B
YoY Change -0.63% -2.86%

Cashflow Statement

Concept 2018 Q1 2017 Q1
OPERATING ACTIVITIES
Net Income $87.93M -$20.16M
YoY Change -536.14% -25.18%
Depreciation, Depletion And Amortization $19.23M $19.23M
YoY Change -0.02% 0.97%
Cash From Operating Activities $9.832M $5.310M
YoY Change 85.16% 104.0%
INVESTING ACTIVITIES
Capital Expenditures $1.397M $1.004M
YoY Change 39.14% -65.95%
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities -$2.386M -$4.088M
YoY Change -41.63% -16.71%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $0.00 $12.00M
YoY Change -100.0% 84.62%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities $0.00 $12.02M
YoY Change -100.0% 84.1%
NET CHANGE
Cash From Operating Activities $9.832M $5.310M
Cash From Investing Activities -$2.386M -$4.088M
Cash From Financing Activities $0.00 $12.02M
Net Change In Cash $7.424M $13.24M
YoY Change -43.91% 213.45%
FREE CASH FLOW
Cash From Operating Activities $9.832M $5.310M
Capital Expenditures $1.397M $1.004M
Free Cash Flow $8.435M $4.306M
YoY Change 95.89% -1344.51%

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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">1. BASIS OF PRESENTATION</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> </font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Globalstar, Inc. (&#8220;Globalstar&#8221; or the &#8220;Company&#8221;) provides Mobile Satellite Services (&#8220;MSS&#8221;) including voice and data communications services through its global satellite network. Thermo Capital Partners LLC, through its affiliates (collectively, &#8220;Thermo&#8221;), is the principal owner and largest stockholder of Globalstar. The Company&#8217;s Chairman and Chief Executive Officer controls Thermo. Two other members of the Company's Board of Directors are also directors, officers or minority equity owners of various Thermo entities.</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (&#8220;U.S. GAAP&#8221;) for interim financial information. Certain information and footnote disclosures normally in financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"); however, management believes the disclosures made are adequate to make the information presented not misleading. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Globalstar Annual Report on Form 10-K for the year ended </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2017</font><font style="font-family:inherit;font-size:10pt;">, as filed with the SEC on </font><font style="font-family:inherit;font-size:10pt;">February&#160;22, 2018</font><font style="font-family:inherit;font-size:10pt;"> (the "</font><font style="font-family:inherit;font-size:10pt;">2017</font><font style="font-family:inherit;font-size:10pt;"> Annual Report"), and Management's Discussion and Analysis of Financial Condition and Results of Operations herein.&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. The Company evaluates estimates on an ongoing basis. Significant estimates include the value of derivative instruments, the allowance for doubtful accounts, the net realizable value of inventory, the useful life and value of property and equipment, the value of stock-based compensation and income taxes.&#160;The Company has made certain reclassifications to prior period condensed consolidated financial statements to conform to current period presentation.</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">These unaudited interim condensed consolidated financial statements include the accounts of Globalstar and all its subsidiaries. All significant intercompany transactions and balances have been eliminated in the consolidation. In the opinion of management, the information included herein includes all adjustments, consisting of normal recurring adjustments, that are necessary for a fair presentation of the Company&#8217;s condensed consolidated statements of operations, condensed consolidated balance sheets, and condensed consolidated statements of cash flows for the periods presented. The results of operations for the </font><font style="font-family:inherit;font-size:10pt;">three</font><font style="font-family:inherit;font-size:10pt;"> months ended </font><font style="font-family:inherit;font-size:10pt;">March&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;"> are not necessarily indicative of the results that may be expected for the full year or any future period.</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Recently Issued Accounting Pronouncements</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") No. 2016-02, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases</font><font style="font-family:inherit;font-size:10pt;">. The main difference between the provisions of ASU No. 2016-02 and previous U.S. GAAP is the recognition of right-of-use assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. ASU No. 2016-02 retains a distinction between finance leases and operating leases, and the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous U.S. GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize right-of-use assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This ASU is effective for public business entities in fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2016, the FASB issued ASU No. 2016-13, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Credit Losses, Measurement of Credit Losses on Financial Instruments</font><font style="font-family:inherit;font-size:10pt;">. ASU No. 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today&#8217;s incurred loss approach with an expected loss model for instruments measured at amortized cost. Entities will apply the standard&#8217;s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This ASU is effective for public entities for annual and interim periods beginning after December&#160;15, 2019. Early adoption is permitted for all entities for annual periods beginning after December 15, 2018, and interim periods therein. The Company has not yet determined the impact this standard will have on its financial statements and related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In March 2017, the FASB issued ASU No. 2017-08: </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Receivables&#8212;Nonrefundable Fees and Other Costs: Premium Amortization on Purchased Callable Debt Securities</font><font style="font-family:inherit;font-size:10pt;">. This ASU amends current US GAAP to shorten the amortization period for certain purchased callable debt securities held at a premium to the earliest call date. This standard will replace today's yield-to-maturity approach, which generally requires amortization of premium over the life of the instrument. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2018. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company does not expect it to have a material effect on the Company's financial statements and related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:25px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2018, the FASB issued ASU No. 2018-02,</font><font style="font-family:inherit;font-size:10pt;font-style:italic;"> Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income</font><font style="font-family:inherit;font-size:10pt;">. This guidance allows companies to reclassify items in accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the H.R.1, &#8220;An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018&#8221; (the &#8220;Tax Act&#8221;) (previously known as &#8220;The Tax Cuts and Jobs Act&#8221;). This ASU is effective for all entities for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. Companies may apply the guidance in the period of adoption or retrospectively to each period in which the income tax effects of the Tax Act related to items in accumulated other comprehensive income are recognized. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Recently Adopted Accounting Pronouncements </font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the FASB issued ASU No. 2014-09,</font><font style="font-family:inherit;font-size:10pt;font-style:italic;"> Revenue from Contracts with Customers</font><font style="font-family:inherit;font-size:10pt;">. ASU 2014-09 became effective for annual reporting periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. See </font><font style="font-family:inherit;font-size:10pt;">Note 2: Revenue</font><font style="font-family:inherit;font-size:10pt;"> for further discussion, including the impact on the Company's condensed consolidated financial statements and required disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2017, the FASB issued No. ASU 2017-05, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Other Income&#8212;Gains and Losses from the Derecognition of Nonfinancial Assets: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets</font><font style="font-family:inherit;font-size:10pt;">. ASU 2017-05 was issued to provide clarity on the scope and application for recognizing gains and losses from the sale or transfer of nonfinancial assets, and should be adopted concurrently with ASU 2014-09, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenue from Contracts with Customers</font><font style="font-family:inherit;font-size:10pt;">. This ASU became effective for public entities for annual and interim periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements or related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:25px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In March 2016, the FASB issued ASU No. 2016-04,</font><font style="font-family:inherit;font-size:10pt;font-style:italic;"> Liabilities-Extinguishment of Liabilities: Recognition of Breakage for Certain Prepaid Stored Value Products</font><font style="font-family:inherit;font-size:10pt;">. ASU No. 2016-04 contains specific guidance for the derecognition of prepaid stored-value product liabilities within the scope of this ASU. This ASU became effective for public entities for annual and interim periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements or related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:25px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:25px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2016, the FASB issued ASU No. 2016-15, S</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">tatement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments</font><font style="font-family:inherit;font-size:10pt;">. ASU No. 2016-15 is intended to reduce diversity and clarify the classification of how certain cash receipts and cash payments are presented in the statement of cash flows. This ASU became effective for public entities for annual and interim periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements or related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:25px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:25px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In October 2016, the FASB issued ASU No. 2016-16,</font><font style="font-family:inherit;font-size:10pt;font-style:italic;"> Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory.</font><font style="font-family:inherit;font-size:10pt;"> ASU No. 2016-16 requires entities to account for the income tax effects of intercompany sales and transfers of assets other than inventory when the transfer occurs rather than current guidance which requires companies to defer the income tax effects of intercompany transfers of an asset until the asset has been sold to an outside party or otherwise recognized. This ASU became effective for public entities for annual and interim periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements or related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In November 2016, the FASB issued ASU No. 2016-18, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Statement of Cash Flows - Restricted Cash</font><font style="font-family:inherit;font-size:10pt;">. ASU No. 2016-18 requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet is required. This ASU became effective for public entities for annual and interim periods beginning after December 15, 2017. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company adopted this standard effective with reporting periods beginning on January 1, 2017 and added required disclosures pursuant to ASC No. 2016-18 to its condensed consolidated statements of cash flows.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2017, the FASB issued ASU No. 2017-01, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Business Combinations: Clarifying the Definition of a Business</font><font style="font-family:inherit;font-size:10pt;">. ASU No. 2017-01 most significantly revises guidance specific to the definition of a business related to accounting for acquisitions. Additionally, ASU No. 2017-01 also affects other areas of US GAAP, such as the definition of a business related to the consolidation of variable interest entities, the consolidation of a subsidiary or group of assets, components of an operating segment, and disposals of reporting units and the impact on goodwill. This ASU became effective for public entities for annual and interim periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements or related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2017, the FASB issued ASU No. 2017-07:</font><font style="font-family:inherit;font-size:10pt;font-style:italic;"> Compensation&#8212;Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost</font><font style="font-family:inherit;font-size:10pt;">. ASU 2017-07 requires sponsors of benefit plans to present the service cost component of net periodic benefit cost in the same income statement line or items as other employee costs and present the remaining components of net periodic benefit cost in one or more separate line items outside of income from operations. This ASU also limits the capitalization of benefit costs to only the service cost component. This ASU became effective for public entities for annual and interim periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. As a result of the retrospective adoption of this standard, for the three months ended March 31, 2017, the Company reclassified approximately </font><font style="font-family:inherit;font-size:10pt;">$0.1 million</font><font style="font-family:inherit;font-size:10pt;"> from management, general and administrative expense to other income (expense). The service cost component of periodic benefit cost is the only cost that remains in income from operations; all other periodic benefit costs, including interest cost, expected return on plan assets and amortization of amounts deferred from previous periods are now reflected outside of income from operations and reflected in the other income (expense) line item on the Company's condensed consolidated statements of operations. There were no other changes to the Company's condensed consolidated financial statements or disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2017, the FASB issued ASU No. 2017-09: </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Compensation&#8212;Stock Compensation: Scope of Modification Accounting. </font><font style="font-family:inherit;font-size:10pt;">This ASU clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under the new guidance, a company will apply modification accounting only if the fair value, vesting conditions or classification of the award change due to a modification in the terms or conditions of the share-based payment award. This ASU became effective for public entities for annual and interim periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements or related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In July 2017, the FASB issued ASU No. 2017-11: </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception. </font><font style="font-family:inherit;font-size:10pt;">Part I of this ASU reduces the complexity associated with accounting for certain financial instruments with down round features. Part II of this ASU recharacterizes the indefinite deferral provisions described in </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Topic 480: Distinguishing Liabilities from Equity. </font><font style="font-family:inherit;font-size:10pt;">It does not have an accounting effect. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2018. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company adopted this ASU on October 1, 2017. The Company evaluated its debt and related derivative instruments and determined that this standard did not have an impact on the Company's condensed consolidated financial statements or related disclosures.</font></div></div>
CY2018Q1 us-gaap Derivatives Embedded Derivatives
DerivativesEmbeddedDerivatives
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has identified various embedded derivatives resulting from certain features in the Company&#8217;s debt instruments, including the conversion option and the contingent put feature within both the 2013 </font><font style="font-family:inherit;font-size:10pt;">8.00%</font><font style="font-family:inherit;font-size:10pt;"> Notes and the Loan Agreement with Thermo. These embedded derivatives required bifurcation from the debt host agreement and are recorded as a derivative liability on the Company&#8217;s condensed consolidated balance sheets with a corresponding debt discount netted against the principal amount of the related debt instrument. The Company accretes the debt discount associated with each derivative liability to interest expense over the term of the related debt instrument using an effective interest rate method. The fair value of each embedded derivative liability is marked-to-market at the end of each reporting period, or more frequently as deemed necessary, with any changes in value reported in its condensed consolidated statements of operations. The Company determined the fair value of its compound embedded derivative liabilities using a Monte Carlo simulation model.&#160;See </font><font style="font-family:inherit;font-size:10pt;">Note 6: Fair Value Measurements</font><font style="font-family:inherit;font-size:10pt;"> for further discussion.</font></div></div>
CY2018Q1 us-gaap Loss Contingency Disclosures
LossContingencyDisclosures
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">7. CONTINGENCIES</font><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Arbitration&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On June 3, 2011, Globalstar filed a demand for arbitration against Thales before the American Arbitration Association to enforce certain rights to order additional satellites under the 2009 Contract. The Company did not include within its demand any claims that it had against Thales for work previously performed under the contract to design, manufacture and timely deliver the first </font><font style="font-family:inherit;font-size:10pt;">25</font><font style="font-family:inherit;font-size:10pt;"> second-generation satellites. On May 10, 2012, the arbitration tribunal issued its award in which it determined that the Company had terminated the 2009 Contract "for convenience" and had materially breached the contract by failing to pay to Thales the </font><font style="font-family:inherit;font-size:10pt;">&#8364;51.3 million</font><font style="font-family:inherit;font-size:10pt;"> in termination charges required under the contract. The tribunal additionally determined that absent further agreement between the parties, Thales had no further obligation to manufacture or deliver satellites under Phase 3 of the 2009 Contract. Based on these determinations, the tribunal directed the Company to pay Thales approximately </font><font style="font-family:inherit;font-size:10pt;">&#8364;53 million</font><font style="font-family:inherit;font-size:10pt;"> in termination charges, plus interest by June 9, 2012. On May 23, 2012, Thales commenced an action in the United States District Court for the Southern District of New York by filing a petition to confirm the arbitration award (the &#8220;New York Proceeding&#8221;). Thales and the Company entered into a tolling agreement as of June 13, 2013, under which Thales dismissed the New York Proceeding without prejudice. The tolling agreement has expired. Thales may refile the petition at a later date and pursue the confirmation of the arbitration award, which the Company would oppose. Should Thales be successful in confirming the arbitration award, this would have a material adverse effect on the Company's financial condition, results of operations and liquidity.</font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On June 24, 2012, the Company and Thales agreed to settle their prior commercial disputes, including those disputes that were the subject of the arbitration award. In order to effectuate this settlement, the Company and Thales entered into a Release Agreement, a Settlement Agreement and a Submission Agreement. Under the terms of the Release Agreement, Thales agreed unconditionally and irrevocably to release and forever discharge the Company from any and all claims and obligations (with the exception of those items payable under the Settlement Agreement or in connection with a new contract for the purchase of any additional second-generation satellites), including, without limitation, a full release from paying </font><font style="font-family:inherit;font-size:10pt;">&#8364;35.6 million</font><font style="font-family:inherit;font-size:10pt;"> of the termination charges awarded in the arbitration together with all interest on the award amount effective upon the earlier of December 31, 2012, and the effective date of the financing for the purchase of any additional second-generation satellites. Under the terms of the Release Agreement, the Company agreed unconditionally and irrevocably to release and forever discharge Thales from any and all claims (with limited exceptions), including, without limitation, claims related to Thales&#8217; work under the 2009 satellite construction contract, including any obligation to pay liquidated damages, effective upon the earlier of December 31, 2012, and the effective date of the financing for the purchase of any additional second-generation satellites. In connection with the Release Agreement and the Settlement Agreement, the Company recorded a contract termination charge of approximately </font><font style="font-family:inherit;font-size:10pt;">&#8364;17.5 million</font><font style="font-family:inherit;font-size:10pt;"> which is recorded in the Company&#8217;s condensed consolidated balance sheets as of </font><font style="font-family:inherit;font-size:10pt;">March&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2017</font><font style="font-family:inherit;font-size:10pt;">. The releases became effective on December 31, 2012.</font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Under the terms of the Settlement Agreement, the Company agreed to pay </font><font style="font-family:inherit;font-size:10pt;">&#8364;17.5 million</font><font style="font-family:inherit;font-size:10pt;"> to Thales, representing one-third of the termination charges awarded to Thales in the arbitration, subject to certain conditions, on the later of the effective date of the new contract for the purchase of any additional second-generation satellites and the effective date of the financing for the purchase of these satellites. As of </font><font style="font-family:inherit;font-size:10pt;">March&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;">, this condition had not been satisfied. Because the effective date of the new contract for the purchase of additional second-generation satellites did not occur on or prior to February 28, 2013, any party may terminate the Settlement Agreement. If any party terminates the Settlement Agreement, all parties&#8217; rights and obligations under the Settlement Agreement shall terminate. The Release Agreement is a separate and independent agreement from the Settlement Agreement and provides that it supersedes all prior understandings, commitments and representations between the parties with respect to the subject matter thereof; therefore it would survive any termination of the Settlement Agreement. As of </font><font style="font-family:inherit;font-size:10pt;">March&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;">, no party had terminated the Settlement Agreement.</font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Litigation</font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Due to the nature of the Company's business, the Company is involved, from time to time, in various litigation matters or subject to disputes or routine claims regarding its business activities. Legal costs related to these matters are expensed as incurred. </font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In management's opinion, there is no pending litigation, dispute or claim, other than those described in this report, which could be expected to have a material adverse effect on the Company's financial condition, results of operations or liquidity.</font></div></div>

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