GSAT 10-K & 10-Q changes, risk factors and insider trading

Investing in our securities involves a high degree of risk and uncertainties. You should carefully consider the risks described below, as well as all of the information in this Report, including but not limited to Item 1. “Business”, Item 1C. “Cybersecurity”, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” and Item 3. “Legal Proceedings", and our other filings with the SEC, in evaluating and understanding us and our business. If any of the following risks occur, they may have a material adverse impact on our business, financial condition, stock price, results of operations, reputation, prospects, costs or liabilities and you could lose part or all of your investment. The summary and risks that follow are organized under headings as determined to be most applicable, but such risks also may be relevant to other headings. Additional risks not presently known or that we currently deem immaterial or general risks that apply to all companies operating in the U.S. and globally, which may emerge or become material, may also impact our business and the risks identified in this Report may adversely affect our business in ways we do not currently anticipate. See "Cautionary Statement About Forward-Looking Statements" at the beginning of this Report.

•Failure to successfully or timely launch new satellites;

•Availability and costs of equipment, component parts and other materials;

Revenue under the Updated Services Agreements constitutes a substantial portionmajority of our current revenue, and there is no assurance that we will receive the revenue expected under the Updated Services Agreements.

Consideration received under the Updated Services Agreements constituted approximately 58%63% of our revenue for the year ended December 31, 2024.2025. The Updated Services Agreements impose a number of substantial obligations on us, provide for certain of our fees to be payable only upon satisfaction of the conditions therein and are terminable by the Customer at any time upon advance notice or force majeure event, or by either party upon the occurrence of certain events of default. It is possible that we may fail to meet these obligations, that the conditions to the payment of such fees may not be satisfied, that the Customer's products that employ the services rendered will not succeed or that the Updated Services Agreements may be terminated. If any of these events were to occur, we would not receive the revenue we currently expect to receive under the Updated Services Agreements, which could materially andmay adversely affect our business and results of operations. Further, the Updated Services Agreements do not prevent the Customer from allowing their devices to use another network provider's satellite services, which could also negatively impact our revenues that we currently expect to receive under the Updated Services Agreements.

Our satellite network traffic is supported by our gateways located around the globe. We operate our satellite constellation from our ground and space operations control centers (referred to as Network Operations Control Centers) at three locations (France, CaliforniaTexas and Louisiana) to provide geo-redundancy and ongoing coverage. Our gateway facilities are subject to the risk of significant malfunctions or catastrophic loss due to unanticipated events, such as natural disasters, extreme weather events or terrorist attack, and wouldcould be difficult to replace or repair and could require substantial lead-time to do so. In North America, we have implemented contingency coverage which allows neighboring gateways to provide services in the event of a gateway failure. Material changes in the operation of these facilities may be subject to prior FCC approval, and the FCC might not give such approval or may subject the approval to other conditions that could be unfavorable to our business. Our gateways and operations centers may also experience service shutdowns or periods of reduced service as a result of equipment failure, delays in deliveries of material, equipment or component parts, regulatory issues or routine system testing, any of which may impede our ability to provide service to our customers, which could have a material impact on our business results and business reputation.

•the amount of propellant used in maintaining the satellite's orbital location or relocating the satellite to a new orbital location (and, for a newly-launched satellite, the amount of propellant used during orbit raising following launch);

It is also possible that the total available payload capacity of a satellite may need to be reduced prior to the satellite reaching its end-of-orbital life. A reduction in the orbital life of any of our satellites could result in a reduction of revenue, the recognition of an impairment loss and an acceleration of capital expenditures, as well as reputational harm. The potential impact on our revenue from a reduction in the orbital life of one or more satellites may vary depending on the satellite's orbital location as well as the type of device and service a customer is using. If a satellite fails prior to the end of its estimated useful life, we would record an impairment charge in our statement of operations equal to the satellite's remaining net book value, which would depress our net income (or increase our net loss) for the period in which the failure occurs. For example, during the first quarter of 2025, we recorded a loss on disposal of assets of $7.0 million on our consolidated statements of operations. This loss reflected the net book value of one of the our second-generation satellites that experienced a power control anomaly which rendered the satellite inoperable.

Our satellites are exposed to a wide and unique range of risks, including collisions with space debris,debris and other LEO satellites, natural disasters and other extreme space weather events, all of which could adversely affect the performance of our constellation.

Our ability to maneuver our satellites to avoid potential collisions with space debris is limited by, among other factors, uncertainties and inaccuracies in the projected orbit location of, and predicted conjunctions with, debris objects tracked and cataloged by the U.S. government. Some space debris is too small to be tracked; therefore, its orbital location is completely unknown. Debris that cannot be tracked can still be large enough to potentially cause severe damage to or failure of one of our satellites should a collision occur. If our satellites experience collisions with space debris, our service could be impaired. Any such collision could potentially expose us to significant losses. Additionally, over the past few years, the increase in LEO constellations has resulted in a higher volume of satellites in orbit. More LEO satellites in orbit could increase the risk of potential collision.

Space weather, including coronal mass ejections and solar flares, have the potential to impact the performance of our in-orbit satellites. If we experience operational disruptions due to a space weather event, we may be unable to provide service to our customers in the affected area, either temporarily or indefinitely. Additionally, there are inherent dangers and risk associated with our satellite operations, including the risk of equipment damage caused by increased radiation.radiation Anyand any such failures or service disruptions could harm our business and results of operations.

Satellites utilize highly complex technology and operate in the harsh environment of space and therefore are subject to significant operational risks while in orbit. Our satellites may experience temporary outages or otherwise may not be fully functioning at any given time. There are some remote tools we use to remedy certain types of problems affecting the performance of our satellites, but the physical repair of satellites in space is not feasible. We do not insure our second-generation satellites against in-orbit failures after an initial period of six months, whether the failures are caused by internal or external factors. In-orbit failure may result from various causes, including component failure, solar array failures, telemetry transmitter failures, loss of power or fuel, inability to control positioning of the satellite, solar or other astronomical events, including solar radiation, wind and flares, and collision with space debris or other satellites. Additionally, human operators may execute improper implementation commands that may negatively impact a satellite's performance. These failures are commonly referred to as anomalies. Some of our satellites have had anomalies (like malfunctions and other anomalies) in the past and may have anomalies in the future, for reasons described above or arising from the failure of other systems or components, and intrasatellite redundancy may not be available upon the occurrence of any anomalies. For example, during the first quarter of 2025 one of our second-generation satellites experienced a power control anomaly, rendering the satellite inoperable. There can be no assurance that, in these cases, it will be possible to restore normal operations.operations, especially without an in-orbit spare available. Where service cannot be restored, the failure could cause the satellite to have less capacity available for service, to suffer performance degradation or to cease operating prematurely. Any disruption to service or extended periods of reduced capacity could cause loss of customers or revenue, litigation, unexpected costs, reputational harm or failure to attract customers.

We may not be able to successfully or timely launch satellitessatellites, including due to construction and delivery delays, to support the Phase 2 Service Period or Services provided over the Extended MSS Network under the Updated Services Agreements.

When we launch satellites, we may experience launch or deployment failures, which subject us to additional risks and losses. Satellites are particularly vulnerable to loss and malfunction at the time they are launched and deployed into orbit, and some of our competitors have experienced catastrophic losses of substantial numbers of satellites in connection with launch and deployment. While we may obtain launch insurance to mitigate the risk of such a loss, such insurance would not cover all our economic losses if we experienced such an event, and there would be a substantial delay before we could obtain satellites to replace the onesany we lost. Accordingly, a loss of a significant number of our new satellites at launch or deployment could adversely affect our ability to continue to provide satellite services and may cause us to lose opportunities to use our constellation to provide new or expanded services.

•our ability to maintain the health of our ground network and expand to support the network;

•our ability to introduce new products and services that meet current and projected market demanddemand, including adequately differentiating our products and services from competing products and services like direct-to-cellular;

•our ability to market successfully, and the level of market acceptance and demand for,for our products and services;

In February 2022, we entered into a satellite procurement agreement with MDA Space pursuant to which we expect to acquire at least 17 and up to 26 satellites that will replenishreplace our HIBLEO-4 U.S.-licensed system and provide long-term continuity of our MSS. As noted above, the delivery of the replacement satellites has been delayed. In February 2025, we entered into another agreement with MDA Space pursuant to which we expect to acquire more than 50 third-generation satellites related to the Extended MSS Network. We are acquiring the satellites to provide continuous satellite services and meet our obligations under the Updated Services Agreements, as well as to provide services to our current and future customers. We may not have sufficient satellite capacity available to meet demand, and we may not be able to quickly or easily adjust our capacity to any increases in demand. In addition, satellites represent a significant capital expenditure, and, notwithstanding our Funding Agreements,Agreements and the Infrastructure Prepayment, we may not have the necessary capital available or be able to raise additional capital to fund such capital expenditures. See our risk factors below regarding our ability to fund all our capital expenditures and raise additional capital. Our business could be adversely affected if we are not able to anticipate or adapt to consumer demands for satellite capacity.

In addition to our satellite-based competitors, terrestrial wireless voice and data service providers are continuing to expand into rural and remote areas, particularly in less developed countries. Many of these companies have greater resources, more name recognition and newer technologies than we do. Industry consolidation could adversely affect us by increasing the scale or scope of our competitors and thereby make it more difficult for us to compete for customers for our services. For example, recent spectrum transactions, such as between EchoStar and SpaceX and EchoStar and AT&T, may increase competition for our current and future products and services. We could lose market share and revenue for such products as a result of increasing competition from land-based communication service providers.

Although satellite communications services and ground-based communications services differ, the two compete in similar markets with similar services. Consumers may perceive cellular voice communication products and services as cheaper and more convenient than satellite-based products and services.

We also expect to compete with a number of other satellite companies that plan to develop terrestrial networks that utilize their MSS spectrum. For instance, DISH Network received FCC approval in 2012 to offer terrestrial wireless services over the MSS spectrum that previously belonged to TerreStar and ICO Global. Competitors could deploy terrestrial mobile broadband networks before we do, could combine with existing terrestrial networks that provide them with greater financial or operational flexibility than we havehave, or could offer wireless services, including mobile broadband services, that customers prefer over ours.

Our results of operations are materially affected by economic and political conditions in the United States and internationally, including inflation, deflation, interest rates, tariffs, recession, availability of capital, energy and commodity prices, trade laws and the effects of governmental initiatives to manage economic conditions. Such impacts may affect us or our current or potential customers, including delaying or decreasing our customers' spending on our products and services, orcreating an inability of our customers to pay us for our products and services,services or increasing our costs of services or equipment, any of which may adversely affect our earnings and cash flows. In addition, deterioration of conditions in worldwide credit markets could limit our ability to obtain financing to fund our operations and capital expenditures. See our risk factor below regarding our ability to raise capital.

Certain geopolitical tensions and global conflicts, such as in Ukraine,conflicts could have an adverse impact on our current operations and financial performance. Such conflicts may lead to market or network disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions for equipment.

Lack of availability and increased costs of equipment, component parts, and other materials required to operate our business could delay or adversely impact our operations.

We rely upon the availability of equipment, component parts and other materials from the electronics industry and other suppliers. The electronics industry is subject to occasional shortages in availability of such materials depending on fluctuations in supply and demand. Industry shortages may result in delayed shipments of such materials, or increased prices,prices (including due to tariffs), or both. As a consequence, elements of our operation which use materials from the electronics industry, such as our retail products, gateways and satellites, could be subject to disruptions, cost increases (including due to tariffs) or both. Recent disruptionsDisruptions in the global supply chain and unfavorable changes in trade policies (including increased tariffs) have limitedlimited, and may in the future limit, our ability to procure component parts timely and at reasonable prices. In recent years, supplySupply chain disruptionsdisruptions, increased costs and production issues have negatively impactedimpacted, and may in the future negatively impact, our ability to sell our most popular SPOT and Commercial IoT products. The future impact of global shortages or increased costs of materials from the electronics industry is unknown and may adversely impact our business, financial condition and results of operations.

We depend on a limited number of suppliers and vendors to construct and launch our satellites and provide us, directly or through other suppliers, with equipment, component parts and other materials required to operate our business and services relating to our operations.operations, some of which are competitors. We also rely on software and service vendors or other parties to assist us with operating, maintaining and administering our business. Our operations could be adversely affected in the future if any of these vendors are unable or unwilling for any reason to continue to deliver their products or services on terms acceptable to us, including due to business interruptions, unfavorable tariffs or trade policies, geopolitical tensions or global conflicts, litigation, financial distress, bankruptcy or changes in their operations or business strategies.

Although our most economically important geographic markets currently are the United States and Canada, we have substantial markets for our MSS in, and our business plan includes, developing countries or regions that are underserved by existing telecommunications systems, such as rural Brazil and Africa.Brazil. Developing countries are more likely than industrialized countries to experience market, currency and interest rate fluctuations and high inflation. In addition, these countries present risks relating to government policy, price, wage and exchange controls, social instability, expropriation and other adverse economic, political and diplomatic conditions.

Our operations involve transactions in a variety of currencies. Sales denominated in foreign currencies involve primarily the Canadian dollar, the euro and the Brazilian real. Accordingly, our operating results may be significantly affected by fluctuations in the exchange rates for these currencies. Approximately 15%13% and 20%15% of our total revenue was derived from customers primarily located in Canada, Europe, Central America, and South America during 20242025 and 2023,2024, respectively. Our results of operations for 20242025 and 20232024 included net gains of $15.7 million and net losses of $16.6 million and net gains of $4.9 million, respectively, on foreign currency transactions. We may be unable to offset unfavorable currency movements as they adversely affect our revenue and expenses. Our inability to do so could have a substantial negative impact on our operating results and cash flows.

On a near-term and longer-term basis, principal liquidity requirements include primarily funding our operating costs, capital expenditures, including related to the Extended MSS Network and other growth opportunities, and financing arrangements, including recoupments under ourthe 2021 and 2023 Funding Agreements,Agreements theand 2024 Prepayment Agreement andAgreement, Customer Class B Units as well as dividends on our perpetualSeries preferredA stock.Preferred Stock. Our principal sources of liquidity include cash on hand ($391.2$447.5 million at December 31, 20242025), cash flows from operations and proceeds from the 2023 Funding Agreement and the 2024Infrastructure Prepayment Agreement.Prepayment. Another source of liquidity may include proceeds from the exercise of warrants issued to the Customer exercisable in accordance with the Updated Services Agreements and to Thermo in accordance with the guarantyAmended agreement.Thermo Guaranty (as defined below).

Our operating expenses for the year ended December 31, 20242025 were $251.3$265.6 million, which included noncash items such as stock-based compensation of $35.5$23.4 million andmillion, depreciation, amortization and accretion of $89.0$87.4 million and a loss on disposal of assets of $7.2 million. Certain of our operating expenses are associated with network-related costs that support the Updated Services Agreements andAgreements, a substantial portion of which are reimbursed to us.

As of December 31, 2024,2025, the principal balance of our debt obligations was $417.5$410.0 million, consisting of $222$221.6 million under the Current2024 Debt Repayment, $155.0$182.1 million under the 2023 Funding Agreement and $40.9$6.3 million under the 2021 Funding Agreement. We also have $278$708.6 million outstanding under the Infrastructure Prepayment.Prepayment and $149.4 million held by the holders of our Series A Preferred Stock.

Further, the Globalstar SPE is(as expecteddefined toherein) ownowns the primary assets and licensing associated with the Extended MSS Network and the Customer owns 20% of the outstanding units of the Globalstar SPE. For additional information regarding the Globalstar SPE, the Extended MSS Network and the Updated Services Agreement see Note 2: Special Purpose Entity to our Consolidated Financial Statements. Such assets associated with the Extended MSS Network will be used to provide the extended services under the Updated Services Agreement. In connection with certain events of default under the Updated Services Agreement, the Company's ability to recognize the full benefits of owning such assets may be limited. Under these circumstances, we may not be able to continue to conduct our business in the same manner, which would negatively impact our financial results.

We may also access equity and debt capital markets from time to time or refinance our debt obligations with the intent to improve the terms of our indebtedness;indebtedness. theThe availability of such financing may be unavailable on terms and conditions we determine favorable to us or at all.

We believe the importance of our satellite network to global communications makes it a potential target to a wide range of threat actors, including potentially nation state actors. Moreover, the risk of security breaches is likely to continue to increase due to several factors, including (i) the increasing use of machine learning, artificial intelligence ("AI") and other sophisticated techniques to initiate cyber and phishing attacks, (ii) the wider accessibility of cyber-attack tools that can circumvent security controls and evade detection, (iii) growing threats from Chinese, Russian and other state actors due to heightened geopolitical tensions and rivalries and (iv) the increase in users on the Globalstar System by virtue of our wholesale capacity services. ItThere should alsocan be notedno assurance that defenses against cyber-attacks currently available to us and otherothers are unlikely towill prevent attempted intrusions by a highly-determined, highly-sophisticated threat actor.actors. We may be required to expend significant resources to protect against the threat of security breaches or to alleviate problems, including reputational harm and litigation, caused by any breaches, and we may experience a reduction in revenues, litigation and a diminution of goodwill, caused by a compromise of our systems. In addition, our customer contracts may not adequately protect us against liability to third parties with whom our customers conduct business. We cannot assure you that any measures we implement to protect against breaches will provide security, that we will be able to react in a timely manner, or that our remediation efforts following any attacks will be successful. For all these reasons, we cannot provide assurance that our security measures will be sufficient, or that any future breaches of our systems will not result in a material adverse effect on our business, financial condition, operational results or prospects.

Due to fluctuations in the insurance market, weWe may be unable to obtain and maintain our insurance coverages, and the insurance we obtain may not cover all risks for which we have exposure. As a result, we may incur material uninsured or under-insured losses.

Our in-orbit insurance does not cover losses that might arise as a result of a satellite failure, certain operational problems affecting our constellation, or damage resulting from de-orbiting a satellite. See our risk factor above regarding risk of collisions, natural disasters and extreme space weather events for a discussion of risks to our in-orbit satellites. As a result, a failure of one or more of our satellites or the occurrence of equipment failures, collision damage, or other problems that may result during the de-orbiting process could constitute an uninsured loss and could materially harm our financial condition. For example, during the first quarter of 2025 one of our second-generation satellites experienced a power control anomaly, rendering the satellite inoperable, and we recorded a loss on disposal of assets of $7.0 million on our consolidated statements of operations, which was uninsurable.

Our business plan includes forming strategic partnerships to maximize the use and value of our spectrum, network assets and combined service offerings in the United States and internationally. Value that we may be able to realize from these partnerships may depend in part on the value ascribed to our spectrum. Historically, valuations of spectrum in other frequency bands have been volatile, and we cannot predict the future value that we may be able to realize for our spectrum and other assets. Recent spectrum transactions, such as by EchoStar, have increased the value of spectrum; however, such transactions may not result in the same valuation of our spectrum assets. In addition, to the extent that the FCC makes additional spectrum available or promotes the more flexible use or greater availability (such as through spectrum leasing or new spectrum sales) of existing satellite or terrestrial spectrum allocations, the availability of such additional spectrum could reduce the value that we are able to realize for our spectrum.

Our MSS system requires licenses or other regulatory authorization in each of the jurisdictions in which we provide service. WeFrom time to time, other operators or third parties challenge our right to receive or hold licenses. For these and other reasons, we may not be able to obtain or retain all regulatory approvals needed for current and future operations. Failure to obtain the authorizations necessary to use our assigned radio frequency spectrum and to distribute our products in certain countries could have a material adverse effect on our ability to generate revenue and on our overall competitive position. Failure to operate our satellites, ground stations, mobile earth terminals or other facilities as required by our licenses and applicable government regulations could result in the imposition of government sanctions against us, up to and including cancellation of our licenses.

Regulatory changes, such as those resulting from new treaties, statutes or regulations or judicial decisions, may significantly impact our business or require us to modify our business plans or operations. Our failure to comply with these evolving regulations could subject us to sanctions that could materially and adversely affect our ability to operate. In addition, regulatory uncertainty, which is expected to increase after the U.S. Supreme Court’s 2024 Loper Bright decision, could make it harder for us to conduct long-range strategic planning.

We are required to comply with a wide range of laws and regulations in the countries where we operate or do business. For example, the U.S. Departments of Justice, Commerce, State and Treasury and other federal agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of economic sanctions laws, export control laws, FCPA and other federal statutes and regulations, including those established by the Office of Foreign Assets Control ("OFAC"). Further, various government agencies require export licenses, which could impact our sales of Commercial IoT, SPOT and Duplex productsproducts, and the importation of equipment into various countries, if not timely obtained and maintained. Such governmental agencies may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries or with sanctioned persons or entities and modifications to compliance programs, which may increase compliance costs, and may subject us to fines, penalties and other sanctions. A violation of these laws or regulations could adversely impact our business, results of operations and financial condition.

Our business plan includes utilizing our licensed MSS spectrum to provide terrestrial wireless services, including mobile broadband applications, around the world. Our MSS licenses, including our terrestrial authority, are valid through various specified terms, which we intend to renew. In addition, we will need to comply with certain conditions in order to provide terrestrial broadband service under our MSS licenses, including obtaining FCC certifications for our equipment that will utilize this spectrum authority in the U.S. We are seeking similar approvals in various foreign jurisdictions. We cannot guarantee that such efforts will be successful.

The FCCFCC, or other international regulatory authorities, may permit other MSSadditional operators to operateprovide competing MSS in our frequency bands in the futurefuture. despiteWhile itsChina's priorBeidou decisions.system Tois date,currently therethe only other operator of which we are no other authorized Code Division Multiple Access ("CDMA")-based MSS operators. However, the FCC oraware, other regulatory authorities may require us to share spectrum with other systems that are not currently licensed by the United States or any other jurisdiction. From time to time, other operators have applied to use our licensed spectrum, which if granted could increase competition for terrestrial wirelesssatellite communication services and decrease the capacity available to us on such spectrum.

The FCC and other foreign regulatory agencies are permitting expanded unlicensed use of the 5 GHz band including within our C-band forward feeder link (earth station to satellite), which operates at 5091-5250 MHzMHz, whichand expanded licensed and unlicensed use of the 7 GHz band including within our C-band return feeder link (satellite to earth) utilized by our gateway antennas globally. Such uses may have a significant adverse impact on our ability to provide MSS. Additionally, thewe completionare of the satellite navigation system in China could causeexperiencing harmful interference tointo our existingsystem andfrom futurea services.competing Chinese system over certain parts of Asia. We can provide no assurance regarding our ability to eliminate such interference.

We source our products from both domestic and foreign contract manufacturers. The adoption of regulations related to the importation of products, including quotas, duties, tariffs, taxes and other charges or restrictions on imported goods, and changes in U.S. customs procedures could result in an increase in the cost of our products. For example, duringthroughout 2018,2025 and continuing into 2026, there have been recent and ongoing changes to the U.S.tariff imposedpolicies increasedin the U.S., generally resulting in higher tariffs on certainproducts importsand equipment imported from China,foreign whichcountries. Volatility in tariff rates has resulted inin, and may continue to result in, lower gross marginmargins on certain of our products priormanufactured tooutside moving manufacturing to Vietnam. The incoming administration inof the U.S. has indicated that it favors further tariff increases, which if implemented could further decrease our gross margins on affected imported products. However, in part in response to current and potential future tariffs and other relevant factors, in 2024 we completed the move of our manufacturing operations from our current manufacturer's facility located in China to their facility located in Vietnam.

Additionally, delays in goods clearing customs or the disruption of international transportation lines used by us could result in our inability to deliver goods to customers in a timely manner or the loss of sales altogether. Current or future social and environmental regulations or critical issues, such as those relating to the sourcing of conflict minerals from the Democratic Republic of the Congo or the need to eliminate environmentally sensitive materials from our products, could restrict the supply of components and materials used in the production of our products and increase our costs. Any delay or interruption to our manufacturing process or in shipping our products could result in lost revenue, which would adversely affect our business, financial condition or results of operations.

We collect and store data, including our customers' personal information. In jurisdictions around the world, personal information is increasingly becoming the subject of extensive legislation and regulations to protect consumers’ privacy and security, such as the EU's General Data Protection Regulation and similar laws enacted by certain U.S. states. The interpretation of privacy and data protection laws and regulations regarding the collection, storage, transmission, use and disclosure of such information in some jurisdictions is unclear and ever evolving. These laws may be interpreted and applied differently from country to country and in a manner that presents a challenge to our current data protection practices. Complying with these varying international requirements could cause us to incur additional costs or change our business practices. Our services are accessible in many foreign jurisdictions, and some of these jurisdictions may claim that we are required to comply with their laws, even where we have no local entity, employees or infrastructure. We could be forced to incur significant expenses if we were required to modify our products, services or existing security and privacy procedures in order to comply with new or expanded regulations across numerous jurisdictions. In addition, we could face liability to end users alleging that their personal information is not collected, stored, transmitted, used or disclosed appropriately or in accordance with our privacy policies or applicable laws, including claims and litigation resulting from such allegations. Any failure on our part to protect information pursuant to applicable regulations could result in a loss of user confidence, reputational and harm and a loss of customers, which could materially impact our results of operations and cash flows.

The trading price of our common stock is subject to wide fluctuations. There are a wide variety of factors, manysome of which aremay be outside of our control, that could affect the trading price of our common stock.stock, including our operating and financial performance and prospects, our quarterly or annual earnings compared to market expectations, announcements or press coverage concerning our business and other factors described elsewhere in this “Risk Factors” section. The trading price of our common stock may also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. Our stockholders may be unable to resell their shares of our common stock at or above the initial purchase price. Because we are a controlled company, there is a limited market for our common stock. In periods of low trading volume, sales of significant amounts of shares of our common stock in the public market could lower the market price of our stock.

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and applicable notes to our Consolidated Financial Statements and other information included elsewhere in this Report, including risk factors disclosed in Part I, Item IA. Risk Factors. The following information contains forward-looking statements, which are not guarantees of future performance and are not necessarily indicative of future results and are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, our actual results may differ from those expressedexpress or implied by the forward-looking statements. See “Cautionary Statement About Forward-Looking Statements” at the beginning of this Report.Report for further information.

Effective following the close of trading on February 10, 2025, we voluntarily withdrew the listing of our common stock from the NYSE American, effected thea reverse stock split at a ratio of 1 to 15 shares of common stock and amended our certificate of incorporation to reduce the number of authorized shares of common stock that we may issue from 2,150,000,000 shares to 143,333,334 shares of common stock. Effective at the start of trading on February 11, 2025, our common stock began trading on a post-split basis under the symbol “GSAT” on the Nasdaq Stock Market LLC.

All sharesissued ofand outstanding common stock, warrants, stock-based compensation awards and per share amounts included in the Consolidated Financial Statements and applicable notes thereto in Part II, Item 8 of this Report and elsewhere in this Report have been retrospectively restated to reflect the effectchange in capital structure for the periods prior to the completion of the reverse stock splitsplit, andas related amendments to our certificate of incorporation.applicable.

Our revenue is categorized as service revenue and subscriber equipment revenue.sales. WeService revenue is generated by the MSS services we provide MSS to customers using technology from the Globalstar System. EquipmentSubscriber revenueequipment issales are generated from the sale of MSS devices that work over the Globalstar System. We also generate service and equipment revenue from the sale of XCOM RAN systems and associated services that support such systems. For the twelve months ended December 31, 2024,2025, total revenue increased $26.5$22.6 million, or 12%,9%, to $273.0 million from $250.3 million from $223.8 million in 2023, which2024 primarily relaterelated to an increase in wholesale capacity services revenue,revenue and higher volume of Commercial IoT device sales, partially offset by a decline in SPOT and Duplex subscriber services revenue and equipment sales revenue. See below for a discussion of the main fluctuations in revenue.

The following table sets forth amounts and percentages of our revenue by type of service for customers using the Globalstar System (dollars in thousands).:

The following table sets forth our average number of subscribers and ARPU by type of revenue.subscriber services revenue:

We count "subscribers" based on the number of devices that are subject to agreements that entitle them to use our voicedata or datavoice communications services rather than the number of persons or entities who own or lease those devices. Other providers of comparable services may count their subscribers differently.

Wholesale capacity services includerevenue reflects revenue generatedfrom fromproviding satellite network access and related services.services to the Customer under the Updated Services Agreement. Government and other services includerevenue includes revenue generated primarily from terrestrial spectrum and network solutions as well as governmental and engineering service contracts. None of these service revenue items are subscriber driven. Accordingly, we do not present ARPU for wholesale capacity services revenue or government and other services revenue reflected in the table above.

Wholesale capacity serviceservices revenue increased 33%$27.4 million (or 19%) in 2024.2025. ThisWholesale categorycapacity includesservices revenue reflects revenue from the Customer under the Updated Services Agreements. The majority of the increase during 20242025 is duerelated to the timing and amount of service fees associated with the reimbursement of network-related costs as well as for fees related to certain expanded services that began in 2024. Revenue also increased due to performance bonuses received during 2024 as well as higher network costs, which are both drivers of the consideration earned under this agreement.services.

SPOT service revenue decreased 7%$3.8 million in 20242025 due to fewer subscribers, and to a lesser extent, a slight decrease in ARPU. The decline in average subscribers resultingis fromdue to continued competitive pressure.pressure; Producthowever, product engineering efforts are underway to develop a new consumer SPOT device, which we expectbelieve tocould stabilize orpotentially increase demand for such services from our subscribers.

Duplex service revenue decreased 22%$4.9 million in 20242025 due primarily to fewer average subscribers resulting from churnour exceedingdecision grossto activations overdiscontinue the last twelve months as we no longer manufacture and sellsale of Duplex devices into favorincrease our focus on maximizing other sources of other use cases for the Globalstar System, including wholesale capacity services.revenue.

Government and other services revenue increaseddecreased 126%2% in 2024.2025. ThisGovernment categoryand other services revenue includes fees earned from various governmental service contracts as well as services associated with XCOM RAN sales. We signedhave ana network services agreement in the first quarter of 2024 with Parsons Corporation, a leading technology provider in the national security and global infrastructure markets, to utilize theour Globalstarsatellite Systemnetwork for a mission critical service for government applications. TheRevenue $2.5associated millionwith this agreement increased in 2025 as we moved from the proof of concept phase commencedinto the first year of services provided under the agreement. This increase was more than offset by a decrease in Februaryrevenue 2024 and is progressing as plannedassociated with completion expected in mid-2025. This agreement has a five-year term, if the projecttiming isof implemented,XCOM andRAN containssystem annual minimum revenue commitments escalating annually to $20 million during the fifth year, with potential for further upside through the agreement's revenue share arrangement.sales.

Cost of services increased $19.7$10.0 million, or 37%,14%, to $83.2 million in 2025 from $73.2 million in 20242024. fromWe $53.5 million in 2023. This increase was due primarilycontinue to incur higher network expansionoperating incosts relating to our new and upgraded global ground infrastructure and network-related personnel. In connection with services provided under the ServiceUpdated Agreements;Services Agreements, a substantial portion of network-relatedthese costs are reimbursed thereunder and thissuch consideration is recognized as revenue in accordance with the terms of the Updated Services Agreements. AsDuring expected2025, withpersonnel ourcosts newthat andsupport upgradedthe groundGlobalstar infrastructure,System gatewayincreased operating$4.9 million. Ground network costs, such as maintenanceoccupancy and personnelmaintenance costs,charges, increased $11.0$2.7 million. We do not expect the operating costs that support existing services under the Updated Services Agreementsmillion during the Phase 1 Service Period to increase meaningfully beyond current levels. We expect that over the next few years in anticipation of the Services provided over the Extended MSS Network, costs to support the Updated Services Agreements will increase substantially. See Note 2: Special Purpose Entity to our Consolidated Financial Statements for a description of the different phases of services under the Updated Services Agreements.2025.

Costs to support new MSS product development, including research and development totalingas $2.5well millionas personnel, also contributed to the increase in operating expenses during 2024.2025.

Stock-based compensation expense increaseddecreased $13.0$12.1 million to $23.4 million in 2025 from $35.5 million in 2024 from $22.5 million in 2023.2024. The increasedecrease was due primarily to restricted stock units ("RSUs") granted to certain executives in connection with the License Agreement in August 2023, the majority of the cost of which was recognized in 2024. During 2023, we granted 44.53.0 million RSUs, which are earned over a four-year performance period and vest upon Globalstar common stock trading at various price levels throughout the performance period. The total fair value of the RSUs was $39.5 million and is being recognized over the derived service period of 2.6 years; with nearly17%, 60%59% and 23% of the compensation cost for these RSUs is being recognized during 2024.2023, 2024 and 2025, respectively.

(Loss) gain on extinguishment of debt

We recorded a loss on extinguishment of debt of $27.4 million during 2024. In November 2024, we refinanced the 2023 13% Notes, resulting in a loss on extinguishment of debt due to the unamortized debt discount and deferred financing costs remaining prior to extinguishment as well as the make-whole fees at pay down. InSimilar 2023,activity wedid recordednot arecur lossin on extinguishment of debt of $10.4 million following the full pay-off of the 2019 Facility Agreement. The extinguishment loss was recognized due to the remaining deferred financing costs and debt discount associated with the instrument at the time of repayment.2025.

Foreign currencyCurrency Gain (lossLoss) gain

We recorded foreign currency gains of $15.7 million in 2025. We recorded foreign currency losses of $16.6 million in 2024. We recorded foreign currency gains of $4.9 million in 2023. Many of our foreign subsidiaries have USD-denominated intercompany payable balances, which impact the foreign currency gains and losses recorded each reporting period. In these instances, foreign currency gains result from other currencies strengthening relative to the U.S. dollar; inversely, foreign currency losses result from the U.S. dollar strengthening relative to other currencies.

Income tax expense (benefit) fluctuated by $1.0$3.8 million to an expense of $5.9 million in 2025 from an expense of $2.1 million in 20242024. fromThe anincrease was primarily driven by $1.4 million of state current tax expense as a result of increased taxable income, $2.0 million related to state tax impacts of a new uncertain tax position in the U.S. and $1.1 million inof 2023.tax expense associated with income from operations of our Mexican subsidiary. The increasetax duringexpense in 2024 was primarily due primarily to $1.0 million in expense foran uncertain tax positionsposition associated with interest onand withholdingwithholdings tax related to the Canadian tax audit. In both periods, income tax was recorded due to withholding tax expense associated with our global transfer pricing allocations in certain foreign jurisdictions. See Note 13: Taxes to our Consolidated Financial Statements for further information on the Canadian tax audit.

Our principal sources of liquidity include cash on hand, cash flows from operations and proceeds from the 2023 Funding Agreement and 2024Infrastructure Prepayment Agreement (each term defined below). TheseWe expect these liquidity sources are expected to meet our short-term and long-term liquidity needs for funding our operating costs, capital expenditures, including related to the Extended MSS Network and other growth opportunities, and financing obligations, including scheduled recoupments under the 2021 and 2023 Funding Agreements and 2024 PrepaymentDebt AgreementRepayment as well as dividends on our perpetualSeries preferredA stock.Preferred Stock. In addition, we have issued warrants to the Customer that are exercisable in accordance with the Updated Services Agreements and to Thermo in connection with its guarantee of the 2023 Funding Agreement. These warrants would become a source of liquidity if exercised.

•covenants in the Merger Agreement restrictingplaces certain restrictions on the conduct of the Company's business prior to completion of the MergersMergers, (the waiver of which is subject to the consent of Amazon,Amazon (not to be unreasonably withheld, conditioned or delayed), which may prevent the Company from making certain acquisitions or capital expenditures, entering into new material agreements or otherwise pursuing business opportunities during the pendency of the Mergers which could otherwise have been beneficial to the Company; and

Before the Mergers may be completed, the waiting period (andor any extensions thereof) applicable to the consummation of the Mergers under the HSR Act must have expired or terminated (which waiting period expired on July 17, 2026) and the clearances and approvals applicable to the Mergers under the antitrust, foreign direct investment, and satellite and telecommunications laws of certain jurisdictions must have been received. In deciding whether to grant the required regulatory approval, consent or clearance, the relevant governmental entitiesauthority may impose or seek to impose requirements, limitations or costs or place restrictions on the conduct of the Company's business following the completion of the Mergers. Under the Merger Agreement, Amazon and Globalstar have agreed to use their reasonable best efforts to obtain such approvals, consents, and clearances, except that neither Amazon nor Globalstar is not required to agree to certainany remedies or restrictions on the conduct of their businesses to obtain such clearances.clearances (provided that Globalstar will take such actions to the extent requested in writing by Amazon and conditioned on the closing). There can be no assurance that such conditions, terms, obligations or restrictions, if any, will not result in the delay or abandonment of the Mergers.

Amazon’s obligation to complete the Mergers is subject to variousa othernumber of closing conditions set forth in the Merger Agreement, including but not limited to: (a) the receipt of stockholder approval (which has been satisfied through the delivery of the Written Consent as described above), (b) the expiration or termination of applicablethe waiting periodsperiod (or extension thereof) applicable to the consummation of the Mergers under the HSR Act (which was satisfied on July 17, 2026 when the HSR waiting period expired) and the clearance or approval under certain specified antitrust, foreign investment, and satellite and telecommunications laws, (c) the absence of any law or order that prevents, makes illegal or enjoins the consummation of the Mergers, (d) the lapse of at least twenty (20) calendar days since the Company’s mailing to the Company’s stockholders of an information statement concerning the Mergers, the Written Consent and the other transactions contemplated by the Merger Agreement, (e) the effectiveness under the Securities Act of 1933, as amended, of the registration statement on Form S-4 to be filed by Amazon, in which the Company’s information statement will be included as a prospectus, (f) the absence of a Company Material Adverse Effect or a Parent Material Adverse Effect (each, as defined in the Merger Agreement) and, (g) the achievement of the Company of certain HIBLEO-4milestones satelliterelating milestones. There can be no assurance that such conditions will not result into the delaylaunch orand abandonmentoperations of the Mergers,HIBLEO-4 orreplacement satellites and (h) the renegotiationreceipt by the Company of thecertain termsgovernmental ofauthorizations related to the Mergers.C-3 System and their continuance in full force and effect.

These provisions could discourage a potential third-party acquiror or merger partner that might have an interest in acquiring all or a significant portion of the Company or pursuing an alternative transaction from considering or proposing such a transaction, even if such third-party acquiror or merger partner were prepared to pay a consideration with a higher per share cash or market value than the value proposed to be received or realized in connection with the Mergers.

The Merger Agreement subjects the Company to certain restrictions on its business activities.

The Merger Consideration is also subject to a potential downward adjustment of up to $110 million in the event the Company does not achieve certain operational milestones prior to the closing of the Mergers, based on the Company's agreements with the Customer. As of the date of this Report, the maximum amount of the Customer payment potentially payable under the letter agreement is approximately $97 million reduced from $110 million as a result of the Company's achievement of certain operational milestones since the signing of the Merger Agreement.

The following discussion and analysis should be read in conjunction with the accompanying unaudited consolidated financial statements and applicable notes thereto included in Part I, Item 1 of this Report, together with "Management's Discussion and Analysis of Financial Condition and Results of Operation" included in our 2025 Annual Report. The following information contains forward-looking statements, which are not guarantees of future performance andperformance, are not necessarily indicative of future results and are subject to risks and uncertainties, including the risk factors set forth in Part I, Item 1A of our 2025 Annual Report, as updated under "Risk Factors" in Part II, Item 1A of this Report. Should one or more of these risks or uncertainties materialize, our actual results may differ from those expressexpressed or implied by the forward-looking statements. See "Cautionary Statement About Forward-Looking Statements" at the beginning of this Report for further information.

On April 13, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Amazon.com, Inc., a Delaware corporation (“Amazon”), Grapefruit Acquisition Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Amazon (“Acquisition Sub I”), and Grapefruit Acquisition Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Amazon (“Acquisition Sub II” and, together with Amazon and Acquisition Sub I, the “Buyer Parties”), pursuant to which and subject to the terms and conditions of the Merger Agreement, the Buyer Parties have agreed to acquire us (the "Mergers"). The Mergers are expected to close in 2027, subject to satisfaction of certain closing conditions in the Merger Agreement, including required regulatory approvals; however, no assurance can be given as to when, or if, the Mergers will occur. Refer to Note 142: SubsequentThe EventsMerger Agreement to our consolidated financial statements for further discussion on the Mergers.

We provide certain services to Apple Inc. (the "Customer") pursuant to a service agreement and certain related ancillary agreements (collectively, the "Service Agreements"). In October 2024, we agreed to make certain amendments to the Service Agreements and entered into other related agreements with the Customer (the Service Agreements, as amended, collectively, the "Updated Services Agreements") to deliver expanded services over a new MSS network, including a new satellite constellation, expanded ground infrastructure, and increased global MSS licensing (collectively the "Extended MSS Network"). The Updated Services Agreements generally require us to allocate network capacity to support the services we provide to the Customer and for the Customer to enable Band 53/n53 for use in cellular-enabled devices designated by the Customer for use with our services. For additional information about the Updated Services Agreements, including the recent SOW Amendment, see Note 2: The Merger Agreement and Note 3: Special Purpose Entity and Note 14: Subsequent Events to our condensed consolidated financial statements.

For the threesix months ended MarchJune 31,30, 2026 and 2025, the Customer under the Updated Services Agreements was responsible for 66%64% and 61%,62%, respectively, of our total revenue. No other customer was responsible for more than 10% of our revenue. The loss of the Customer may have an adverse impact on our financial condition, results of operations and cash flows.

As of MarchJune 31,30, 2026, we had approximately 797,000811,000 MSS subscribers worldwide. Our subscriber count only includes our MSS subscribers who have an active Globalstar contract. For our subscriber driven revenue, the specialized needs of our global customers span many industries. The Globalstar System is able to offer our customers cost-effective communications solutions completely independent of cellular coverage. Although traditional users of wireless telephone and broadband data services have access to such services in developed locations, our MSS customers often operate, travel and/or live in remote regions or regions with under-developed telecommunications infrastructure where such services are not readily available or are not provided on a reliable basis.

We compete aggressively on price and strive to differentiate the products and solutions that we offer to our customers. As technological advancements are made, we continue to explore opportunities to develop new products and provide new services over the Globalstar System to meet the needs of our existing and prospective customers. In October 2025, we released the RM200M two-way module, designed to integrate into IoT and industrial solutions. Our current initiatives are focused in part on further investment and development of Commercial IoT-enabled devices, including a two-way reference design module and finished products with satellite only and multimode capabilities.

We have terrestrial licenses in 12 countries, resulting in approximately 12.012.1 billion MHz-POPs (megahertz of our terrestrial spectrum authority in each country multiplied by a total population of approximately 967968 million over the covered area) as of MarchJune 31,30, 2026. Prospective spectrum partners, including cable companies, wireless carriers, system integrators, utilities and other infrastructure operators, are able to benefit from access to uniform and increasingly "borderless" spectrum working across geographies. We believe our portfolio of terrestrial spectrum represents a substantial opportunity for us. The Updated Services Agreements significantly enhanced the device ecosystem for Band 53/n53 by enabling access to our terrestrial spectrum band in certain of the Customer's devices.

In 2022, we entered into a satellite procurement agreement with Macdonald, Dettwiler and Associates Corporation ("MDA Space") pursuant to which we expect to acquire 17 satellites to replace our HIBLEO-4 U.S.-licensed system. In August 2024, the Federal Communications Commission (the "FCC") Space Bureau granted our application to replace our HIBLEO-4 U.S.-licensed system with up to 26 satellites and operate them under a renewed 15-year license term to provide long-term continuity of our MSS. The technical specifications and design of these replacement satellites are similar to our current satellites. The first set of replacement satellites was delivered in April 2026 and weafter currentlycertain expectrepairs theredelivered in July 2026. The second set tois bescheduled deliveredfor delivery later in mid-2026.2026. These replacement satellites are expected to complement our existing second-generation constellation to ensure continuous service delivery. In February 2025, we entered into another agreement with MDA Space pursuant to which we expect to acquire more than 50 third-generation C-3 System (defined below) satellites related to the Extended MSS Network.

In each of August 2023 and June 2025, we entered into a Launch Services Agreement with Space Exploration Technologies Corp. ("SpaceX") and certain related ancillary agreements (collectively, the "Launch Services Agreements"), providing for two launches of the replacement satellites that we are acquiring pursuant to the 2022 satellite procurement agreement with MDA Space. We currently expect to complete both launches during 2026, with the launch of the first set of replacement satellites scheduled for MayAugust 2026 and the launch of the second set of replacement satellites expected to occur duringlater the second half ofin 2026. In October 2024, we entered into agreements with SpaceX for the launch of the new C-3 System third-generation satellites to support the Extended MSS Network.

Comparison of the Results of Operations for the three and six months ended MarchJune 31,30, 2026 and 2025

Our revenue is categorized as service revenue and subscriber equipment sales. Service revenue is generated by the MSS services we provide to customers using the Globalstar System. Subscriber equipment sales are generated from the sale of MSS devices that work over the Globalstar System. We also generate service and equipment revenue from the sale of XCOM RAN systems and associated services that support such systems. For the three months ended MarchJune 31,30, 2026, total revenue increaseddecreased 17%3% to $70.1$64.8 million from $60.0$67.1 million for the same period in 2025. TheFor the six months ended June 30, 2026, total revenue increased 6% to $134.8 million from $127.2 million for the same period in 2025. Both the decrease and increase in total revenue for the three monthsand six month periods ended MarchJune 31,30, 2026 resulted primarily from higherthe variability in revenue from wholesale capacity services. See below for a discussion of the main fluctuationsdrivers inof revenue.the revenue variances.

(1)The remaining 4% and 5%portion of our total revenue for the three and six months ended MarchJune 31,30, 2026 and 2025, respectively, is attributable to subscriber equipment sales from the sale of MSS devices that work over the Globalstar System.System and equipment revenue from the sale of XCOM RAN systems.

Wholesale capacity services revenue decreased 5% and increased 26%9%, respectively, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025. Wholesale capacity services revenue reflects revenue from the Customer under the Updated Services Agreements. The majorityfluctuations ofin the increaserevenue during thethese firstthree quarterand ofsix 2026month periods related primarily to the timing and amount of service fees associated with the reimbursement of network-related costs.

Commercial IoT service revenue increased 13%7% and 10%, respectively, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025. Average subscribers increased 8%9% forin both the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025, due to higher subscriber activations on a last twelve month basis.basis, Weincluding alsorecord expecthigh quarterly subscribers activations toduring continuethe tosecond increase in 2026 due to commercial salesquarter of our recently-launched two-way reference design module.2026.

SPOT service revenue decreased $0.7 million7% for both the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025, due to fewer subscribers. The decline in average subscribers is due to continued competitive pressure; however, product engineering efforts are underway to develop a new consumer SPOT device, which we believe could potentially increase demand for such services from our subscribers.pressure.

Duplex service revenue decreased $0.9 million26% for both the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 20252025, due to fewer average subscribers resulting from our decision to discontinue the manufacture and sale of Duplex devices to increase our focus on maximizing other sources of revenue.

Government and other services revenue increased 84%20% and 53%, respectively, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025. Government and other services revenue includes fees earned from various governmental service contracts as well as services associated with XCOM RAN sales. We have a network services agreement with Parsons Corporation, a leading technology provider in the national security and global infrastructure markets, to utilize our satellite network for a mission critical service for government applications. Revenue associated with this agreement increased during the third quarter of 2025 as we moved from the proof of concept phase into the first year of services provided under the agreement. The increase in government and other services revenue during both the firstthree quarterand ofsix months ended June 30, 2026 compared to the same periodperiods in 2025 was primarily due in part to revenue associated with the contract with Parsons.Parsons as we moved beyond the proof of concept phase and into the first year of service.

Revenue generated from subscriber equipment sales increased $0.4$0.8 million and $1.2 million, respectively, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 20252025, primarily due to an increase in the volume of both SPOT and Commercial IoT device sales.

Total operating expenses decreasedincreased to $61.9$69.5 million from $68.5$61.0 million and increased to $131.4 million from $129.5 million for the three and six months ended MarchJune 31,30, 2026, respectively, compared to the same periodperiods in 2025. ThisFor decreaseboth periods, higher cost of services and marketing, general and administrative expenses were partially offset by lower stock-based compensation and depreciation, amortization and accretion expense. For the six months ended June 30, 2026, the change in total operating expenses was primarilyalso dueimpacted toby a noncash loss on disposal of assets recorded during the first quarter of 2025 that did not recur in 2026. The main contributors to the variances in operating expenses are explained in detail below.

Cost of services increased $4.8$4.1 million and $8.9 million for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the same periodperiods in 2025. We continue to incur higher network operating costs relating to our new and upgraded global ground infrastructure and network-related personnel. In connection with services provided under the Updated Services Agreements, a substantial portion of these costs are reimbursed thereunder and this consideration is recognized as revenue in accordance with the terms of the Updated Services Agreements. For the three and six months ended MarchJune 31,30, 2026, personnel costs that support the Globalstar System increased $1.7$1.1 million.million and $2.9 million, respectively. Ground network costs, such as occupancy and maintenance charges increased $1.2$0.6 million and $1.9 million, respectively, and IT costs increased $0.8 million and $1.4 million, respectively, for the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025.

Cost of subscriber equipment sales increased 21%18% and 19% for the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025. This increase is generally consistent with the increase in revenue generated from subscriber equipment sales during the period.periods.

Marketing, general and administrative ("MG&A") expenses increased $3.2$13.3 million and $16.6 million for the three and six months ended MarchJune 31,30, 2026, respectively, compared to the same periodperiods in 2025. This increase was due to higher personnellegal costsand professional fees as well as higher legalpersonnel andcosts. professional fees. Personnel costs increased $1.2 million primarily due to additional fringe costs for employee taxes associated with nonrecurring equity vestings during the first quarter of 2026. Legal and professional fees increased $1.4 million duringFor the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in 20252025, legal and professional fees increased $10.4 million and $11.7 million, respectively, due primarily to transaction costs related to the Mergers,Mergers; totalingfor $3.2the million;six month period, these costs were partially offset by nonrecurring costs associated with the Globalstar SPE that were incurred during the first quarter of 2025. Personnel costs increased $1.8 million and $3.0 million, respectively, for the three and six months ended June 30, 2026 compared to the same periods in 2025 due primarily to additional fringe costs for employee taxes associated with equity vestings during 2026 as well as the non-recurring employee retention credits received under the CARES Act during 2025 (discussed above).

Stock-based compensation expense decreased $4.3$3.2 million and $7.5 million, respectively, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025. The decrease was due primarily to restricted stock units ("RSUs") granted to certain executives in connection with the License Agreement in 2023. During 2023, we granted 3.0 million RSUs,performance-based RSUs ("PSUs"), which are earned over a four-year performance period and vest upon Globalstar common stock trading at various price levels throughout the performance period. The total fair value of the RSUsPSUs was $39.5 million and iswas being recognized over the derived service period of 2.6 years; with 17%, 59%, 23% and 1% of the compensation cost for these RSUsPSUs being recognized during 2023, 2024, 2025 and 2026, respectively. This award will bewas fully recognized byat the end of the second quarter of 2026.

During the first quarter of 2025, we recorded a loss on disposal of assets totaling $7.0 million, which is the net book value of one of our second-generation satellites that experienced a power control anomaly which rendered the satellite inoperable. Based on our recenttesting conducted in 2025 and historical testing, we currently believe that our constellation of other second-generation satellites will generally operate free of similar anomalies during their projected remaining useful lives. Similar activity did not occur at this level during 2026.

Depreciation, amortization and accretion expense decreased $3.9$6.2 million and $10.1 million, respectively, for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025. During the years 2010 through 2013, we launched our second-generation satellites. The estimated useful lives of these satellites is 15 years; accordingly, during the past twelve months, several of these satellites were fully depreciated, resulting in a decrease in depreciation expense during the firstthree quarterand ofsix months ended June 30, 2026.

Interest income and expense, net, increased $11.9$13.2 million and $25.1 million, respectively, during the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025.

Interest costs associated with the Infrastructure Prepayment increased $14.5 million, representing a non-cash significant financing component in accordance with ASC 606. Capitalized interest costs were higher by $1.9$13.8 million and $15.7 million, respectively, for the three and six months ended June 30, 2026, due in part to thehigher fluctuation ingross interest costs eligible for capitalization, which decreased "interest income and expense, net". Other smaller items contributed to the remaining variance for the period.

We recorded foreign currency losses of $1.6$1.4 million and $3.0 million, respectively, during the three and six months ended MarchJune 31,30, 2026, compared to foreign currency gains of $4.1$12.0 million and $16.1 million during the three and six months ended MarchJune 31,30, 2025. Many of our foreign subsidiaries have USD-denominated intercompany payable balances, which impact the foreign currency gains and losses recorded each reporting period. In these instances, foreign currency gains result from other currencies strengthening relative to the U.S. dollar; inversely, foreign currency losses result from the U.S. dollar strengthening relative to other currencies.

Derivative Gain (Loss) and Other Income (Expense)

DuringPrior to the first quarteradoption of 2026,ASU 2025-07, derivative gain (loss) and other income (expense) fluctuated by $2.1 million to a loss of $2.6 million 2026 from a loss of $0.4 million for the same period in 2025. Derivative gains and losses primarily includeincluded the mark-to-market adjustments associated with the embedded derivative within the 2024 Debt Repayment. The fluctuation in the value of this embedded derivative iswas due to certain significant inputs used in the fair value measurement, specifically the discount yield and the estimated achievement of project milestones (as amended in April 2026). As the discount yield used in the valuation process increases,increased, the fair value of the embedded derivative decreases.decreased. Similarly, as the length of time between the reporting date and the start date of the interest payments decreases,decreased, the present value of the projected interest savings increases,increased, resulting in a higher derivative asset value. Also, as the probability of reaching the relevant milestones increases,increased, the fair value of the embedded derivative also increases.increased.

As of MarchJune 31,30, 2026 and December 31, 2025, we held cash and cash equivalents of $358.4$409.8 million and $447.5 million, respectively. The decrease in cash and cash equivalents during the first quarter of 2026 was due primarily to capitalCapital expenditures associated with our commitments under the Updated Services Agreements, including network expansion and upgrades, andmore than offset cash received during the timingfirst half of proceeds2026, underincluding the receipt of $104.8 million pursuant to the Infrastructure Prepayment and $19.9 million pursuant to the 2023 Funding Agreement. No funds were received under these agreements during the first quarter of 2026.

The principal amount of our debt outstanding was $403.8$423.7 million at MarchJune 31,30, 2026, compared to $410.0 million at December 31, 2025. This decreaseincrease was due to the issuance of debt under the 2023 Funding Agreement totaling $19.9 million during the second quarter of 2026 offset by the final scheduled recoupment of $6.3 million under the 2021 Funding Agreement.

Refer to Note 142: SubsequentThe EventsMerger Agreement to our consolidated financial statements for discussion of the Mergers and (i) the related amendment to the 2024 Prepayment Agreement, (ii) related amendments to the warrants issued to the Customer and to Thermo to provide for the automatic cashless exercise of any vested and unexercised warrants immediately prior to the consummation of the Mergers, and (iii) the proposed cancellation of the Series A Preferred Stock in exchange for the liquidation preference upon consummation of the Mergers.

Cash Flows for the threesix months ended MarchJune 31,30, 2026 and 2025

Net cash provided by operating activities during the threesix months ended MarchJune 31,30, 2026 was $35.2approximately $159.7 million, compared to net cash provided by operating activities of $51.9$209.7 million during the same period in 2025. UnfavorableThis decrease was due to working capital changes, specifically resulting from receipts pursuant to the Infrastructure Prepayment of $104.8 million during the first six months of 2026 compared to $124.7 million during the same period in 2025; these receipts are recorded as deferred revenue and used to fund capital expenditures for the Extended MSS Network, typically in the quarter following the receipt of funds. The timing of cash receipts pursuant to the Updated Services Agreements,Agreements contributed to the decrease in cash flows provided by operating activities. During the firstsix quartermonths ofended June 30, 2026, $7.5$15.0 million in accelerated fees were paid to us pursuant to the Updated Services Agreement compared to $22.5$30.0 million paid during the firstsame quarterperiod ofin 2025. OtherFinally, unfavorable working capital changes were generally offset by higherlower net income, after adjusting for noncash items.items, also contributed to the decrease.

Net cash used in investing activities was $116.4$208.3 million for the threesix months ended MarchJune 31,30, 2026, compared to $190.6$271.8 million for the same period in 2025. Net cash used in investing activities during both periods included primarily network upgrades associated with the Updated Services Agreements. The decrease during the first quartersix months of 2026 compared to the same period in 2025 was due primarily to the timing of milestone payments made to MDA Space and SpaceX.

Cash Flows Provided by (Used in) Financing Activities

At MarchJune 31,30, 2026, the principal amount of our debt totaled $403.8$423.7 million, which accrues fees at a weighted average stated rate up to 9%.

At MarchJune 31,30, 2026, our deferred revenue, net, totaled $891.7$1.1 million,billion, of which the majority is expected to be earned over a period in excess of five years as we perform services under the Updated Services Agreements.

For more information regarding our 2024 Debt Repayment, 2023 Funding Agreement, Infrastructure Prepayment and dividends paid to holders of the Series A Preferred Stock, see Note 67: Long-Term Debt and Other Financing Arrangements and Note 23: Special Purpose Entity to our condensed consolidated financial statements. For more information regarding the amendments to certain of these agreements in connection with the Mergers, refer to Note 142: SubsequentThe EventsMerger Agreement to our consolidated financial statements.

For a discussion of recent accounting guidance and the expected impact that the guidance could have on our condensed consolidated financial statements, see Recently Issued Accounting PronouncementsPronouncement in Note 1: Basis of Presentation to our condensed consolidated financial statements in Part I, Item 1 of this Report.

ThereExcept as set forth below, there have been no material changes in our Critical Accounting Policies and Estimates from the information provided in the "Critical Accounting Policies and Estimates" section of Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Annual Report.