9. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

In connection with the Company’s issuance of the 2013 8.00% Notes, certain of the Company’s 100% owned domestic subsidiaries (the “Guarantor Subsidiaries”), fully, unconditionally, jointly, and severally guaranteed the payment obligations under the 2013 8.00% Notes. The following financial information sets forth, on a consolidating basis, the balance sheets, statements of operations and statements of cash flows for Globalstar, Inc. (the “Parent Company”), for the Guarantor Subsidiaries and for the Parent Company’s other subsidiaries (the “Non-Guarantor Subsidiaries”).

The condensed consolidating financial information has been prepared pursuant to the rules and regulations for condensed financial information and does not include disclosures included in annual financial statements. The principal eliminating entries eliminate investments in subsidiaries, intercompany balances and intercompany revenues and expenses.

Globalstar, Inc.

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2017

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue:
Service revenues	$	18,685		$	9,846		$	13,096		$	(17,326	)	$	24,301
Subscriber equipment sales	60			3,702			1,491			(1,431		)	3,822
Total revenue	18,745			13,548			14,587			(18,757		)	28,123
Operating expenses:
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)	6,415			1,403			1,974			(756		)	9,036
Cost of subscriber equipment sales	32			3,106			1,525			(1,885		)	2,778
Marketing, general and administrative	5,312			997			19,357			(16,122		)	9,544
Depreciation, amortization and accretion	19,101			120			54			—			19,275
Total operating expenses	30,860			5,626			22,910			(18,763		)	40,633
Income (loss) from operations	(12,115		)	7,922			(8,323		)	6			(12,510		)
Other income (expense):
Gain on equity issuance	1,964			—			—			—			1,964
Interest income and expense, net of amounts capitalized	(8,829		)	7			(32		)	4			(8,850		)
Derivative loss	(77,130		)	—			—			—			(77,130		)
Equity in subsidiary earnings (loss)	(1,282		)	(4,076		)	—			5,358			—
Other	(1,342		)	(337		)	(418		)	(5		)	(2,102		)
Total other income (expense)	(86,619		)	(4,406		)	(450		)	5,357			(86,118		)
Income (loss) before income taxes	(98,734		)	3,516			(8,773		)	5,363			(98,628		)
Income tax expense	—			4			102			—			106
Net income (loss)	$	(98,734	)	$	3,512		$	(8,875	)	$	5,363		$	(98,734	)
Comprehensive income (loss)	$	(98,734	)	$	3,512		$	(8,911	)	$	5,354		$	(98,779	)

Globalstar, Inc.

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2016

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue:
Service revenues	$	10,944		$	10,863		$	10,689		$	(11,526	)	$	20,970
Subscriber equipment sales	96			2,774			1,997			(751		)	4,116
Total revenue	11,040			13,637			12,686			(12,277		)	25,086
Operating expenses:
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)	5,135			1,034			2,702			(934		)	7,937
Cost of subscriber equipment sales	43			2,112			1,478			(747		)	2,886
Marketing, general and administrative	5,430			1,322			16,219			(11,521		)	11,450
Depreciation, amortization and accretion	18,851			206			288			(121		)	19,224
Total operating expenses	29,459			4,674			20,687			(13,323		)	41,497
Income (loss) from operations	(18,419		)	8,963			(8,001		)	1,046			(16,411		)
Other income (expense):
Loss on equity issuance	(2,075		)	—			—			—			(2,075		)
Interest income and expense, net of amounts capitalized	(9,000		)	(3		)	(47		)	1			(9,049		)
Derivative gain	40,499			—			—			—			40,499
Equity in subsidiary earnings (loss)	2,924			(968		)	—			(1,956		)	—
Other	170			92			328			95			685
Total other income (expense)	32,518			(879		)	281			(1,860		)	30,060
Income (loss) before income taxes	14,099			8,084			(7,720		)	(814		)	13,649
Income tax benefit	—			—			(450		)	—			(450		)
Net income (loss)	$	14,099		$	8,084		$	(7,270	)	$	(814	)	$	14,099
Comprehensive income (loss)	$	14,099		$	8,084		$	(8,195	)	$	(814	)	$	13,174

Globalstar, Inc.

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2017

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue:
Service revenues	$	36,297		$	19,202		$	24,097		$	(33,814	)	$	45,782
Subscriber equipment sales	127			5,993			2,841			(1,968		)	6,993
Total revenue	36,424			25,195			26,938			(35,782		)	52,775
Operating expenses:
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)	12,543			2,828			5,147			(2,508		)	18,010
Cost of subscriber equipment sales	66			4,823			1,952			(1,967		)	4,874
Marketing, general and administrative	10,971			2,116			37,265			(31,318		)	19,034
Depreciation, amortization and accretion	38,052			402			115			—			38,569
Total operating expenses	61,632			10,169			44,479			(35,793		)	80,487
Income (loss) from operations	(25,208		)	15,026			(17,541		)	11			(27,712		)
Other income (expense):
Gain (loss) on equity issuance	2,706			—			(36		)	—			2,670
Interest income and expense, net of amounts capitalized	(17,584		)	(1		)	(101		)	8			(17,678		)
Derivative loss	(73,907		)	—			—			—			(73,907		)
Equity in subsidiary earnings (loss)	(3,215		)	(7,510		)	—			10,725			—
Other	(1,687		)	(437		)	5			(7		)	(2,126		)
Total other income (expense)	(93,687		)	(7,948		)	(132		)	10,726			(91,041		)
Income (loss) before income taxes	(118,895		)	7,078			(17,673		)	10,737			(118,753		)
Income tax expense	—			9			133			—			142
Net income (loss)	$	(118,895	)	$	7,069		$	(17,806	)	$	10,737		$	(118,895	)
Comprehensive income (loss)	$	(118,895	)	$	7,069		$	(18,662	)	$	10,728		$	(119,760	)

Globalstar, Inc.

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2016

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue:
Service revenues	$	27,882		$	18,358		$	20,114		$	(26,635	)	$	39,719
Subscriber equipment sales	424			4,466			3,674			(1,361		)	7,203
Total revenue	28,306			22,824			23,788			(27,996		)	46,922
Operating expenses:
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)	9,948			2,070			5,597			(2,087		)	15,528
Cost of subscriber equipment sales	187			3,540			2,693			(1,356		)	5,064
Marketing, general and administrative	10,604			1,854			33,064			(25,462		)	20,060
Depreciation, amortization and accretion	37,623			426			569			(239		)	38,379
Total operating expenses	58,362			7,890			41,923			(29,144		)	79,031
Income (loss) from operations	(30,056		)	14,934			(18,135		)	1,148			(32,109		)
Other income (expense):
Loss on equity issuance	(1,923		)	—			—			—			(1,923		)
Interest income and expense, net of amounts capitalized	(17,981		)	(12		)	(152		)	(9		)	(18,154		)
Derivative gain	39,155			—			—			—			39,155
Equity in subsidiary earnings (loss)	(1,427		)	2,079			—			(652		)	—
Other	(616		)	(112		)	604			48			(76		)
Total other income (expense)	17,208			1,955			452			(613		)	19,002
Income (loss) before income taxes	(12,848		)	16,889			(17,683		)	535			(13,107		)
Income tax benefit	—			—			(259		)	—			(259		)
Net income (loss)	$	(12,848	)	$	16,889		$	(17,424	)	$	535		$	(12,848	)
Comprehensive income (loss)	$	(12,848	)	$	16,889		$	(19,000	)	$	535		$	(14,424	)

Globalstar, Inc.

Condensed Consolidating Balance Sheet

As of June 30, 2017

(Unaudited)



	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	4,538		$	1,975	$	2,325		$	—		$	8,838
Accounts receivable	5,806			6,135		3,428			—			15,369
Intercompany receivables	938,139			717,066		46,098			(1,701,303		)	—
Inventory	2,208			4,621		1,985			—			8,814
Prepaid expenses and other current assets	1,738			1,830		1,621			—			5,189
Total current assets	952,429			731,627		55,457			(1,701,303		)	38,210
Property and equipment, net	1,005,671			3,751		4,371			5			1,013,798
Restricted cash	37,915			—		—			—			37,915
Intercompany notes receivable	7,447			—		6,436			(13,883		)	—
Investment in subsidiaries	(282,248		)	78,753		37,502			165,993			—
Intangible and other assets, net	17,321			87		2,650			(12		)	20,046
Total assets	$	1,738,535		$	814,218	$	106,416		$	(1,549,200	)	$	1,109,969
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	108,720		$	—	$	—		$	—		$	108,720
Accounts payable	2,925			3,487		1,212			—			7,624
Accrued contract termination charge	20,026			—		—			—			20,026
Accrued expenses	7,713			6,097		6,854			—			20,664
Derivative Liabilities	36,860			—		—			—			36,860
Intercompany payables	673,426			773,216		254,622			(1,701,264		)	—
Payables to affiliates	304			—		—			—			304
Deferred revenue	1,130			21,247		7,099			—			29,476
Total current liabilities	851,104			804,047		269,787			(1,701,264		)	223,674
Long-term debt, less current portion	459,966			—		—			—			459,966
Employee benefit obligations	4,944			—		—			—			4,944
Intercompany notes payable	6,436			—		7,447			(13,883		)	—
Derivative liabilities	318,215			—		—			—			318,215
Deferred revenue	5,468			384		14			—			5,866
Other non-current liabilities	928			325		4,577			—			5,830
Total non-current liabilities	795,957			709		12,038			(13,883		)	794,821
Stockholders’ equity (deficit)	91,474			9,462		(175,409		)	165,947			91,474
Total liabilities and stockholders’ equity	$	1,738,535		$	814,218	$	106,416		$	(1,549,200	)	$	1,109,969

Globalstar, Inc.

Condensed Consolidating Balance Sheet

As of December 31, 2016

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	7,259		$	1,327		$	1,644		$	—		$	10,230
Accounts receivable	5,938			6,340			2,941			—			15,219
Intercompany receivables	897,691			678,707			32,040			(1,608,438		)	—
Inventory	2,266			4,354			1,473			—			8,093
Prepaid expenses and other current assets	1,570			955			2,063			—			4,588
Total current assets	914,724			691,683			40,161			(1,608,438		)	38,130
Property and equipment, net	1,031,623			3,708			4,384			4			1,039,719
Restricted cash	37,983			—			—			—			37,983
Intercompany notes receivable	8,901			—			6,436			(15,337		)	—
Investment in subsidiaries	(280,557		)	73,029			36,146			171,382			—
Intangible and other assets, net	15,259			128			1,407			(12		)	16,782
Total assets	$	1,727,933		$	768,548		$	88,534		$	(1,452,401	)	$	1,132,614
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	75,755		$	—		$	—		$	—		$	75,755
Debt restructuring fees	20,795			—			—			—			20,795
Accounts payable	2,624			3,490			1,385			—			7,499
Accrued contract termination charge	18,451			—			—			—			18,451
Accrued expenses	10,573			5,884			6,705			—			23,162
Intercompany payables	636,336			750,084			221,980			(1,608,400		)	—
Payables to affiliates	309			—			—			—			309
Deferred revenue	1,576			19,304			5,599			—			26,479
Total current liabilities	766,419			778,762			235,669			(1,608,400		)	172,450
Long-term debt, less current portion	500,524			—			—			—			500,524
Employee benefit obligations	4,883			—			—			—			4,883
Intercompany notes payable	6,435			—			8,901			(15,336		)	—
Derivative liabilities	281,171			—			—			—			281,171
Deferred revenue	5,567			299			11			—			5,877
Other non-current liabilities	1,115			325			4,450			—			5,890
Total non-current liabilities	799,695			624			13,362			(15,336		)	798,345
Stockholders’ equity (deficit)	161,819			(10,838		)	(160,497		)	171,335			161,819
Total liabilities and stockholders’ equity	$	1,727,933		$	768,548		$	88,534		$	(1,452,401	)	$	1,132,614

Globalstar, Inc.

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2017

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash flows provided by operating activities	$	4,008		$	1,068		$	1,180		$	—	$	6,256
Cash flows used in investing activities:
Second-generation network costs (including interest)	(6,498		)	—			(32		)	—		(6,530		)
Property and equipment additions	(1,637		)	(420		)	(59		)	—		(2,116		)
Purchase of intangible assets	(1,552		)	—			(492		)	—		(2,044		)
Net cash used in investing activities	(9,687		)	(420		)	(583		)	—		(10,690		)
Cash flows provided by (used in) financing activities:
Principal payments of the Facility Agreement	(21,695		)	—			—			—		(21,695		)
Proceeds from Thermo Common Stock Purchase Agreement	33,000			—			—			—		33,000
Payment of debt restructuring fee	(20,795		)	—			—			—		(20,795		)
Payment of debt amendment fee	(255		)	—			—			—		(255		)
Proceeds from issuance of stock to Terrapin	12,000			—			—			—		12,000
Proceeds from issuance of common stock and exercise of options and warrants	635			—			—			—		635
Net cash provided by financing activities	2,890			—			—			—		2,890
Effect of exchange rate changes on cash	—			—			84			—		84
Net increase (decrease) in cash, cash equivalents and restricted cash	(2,789		)	648			681			—		(1,460		)
Cash, cash equivalents and restricted cash, beginning of period	45,242			1,327			1,644			—		48,213
Cash, cash equivalents and restricted cash, end of period	$	42,453		$	1,975		$	2,325		$	—	$	46,753

Globalstar, Inc.

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2016

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash flows provided by (used in) operating activities	$	916		$	255		$	(170	)	$	—	$	1,001
Cash flows used in investing activities:
Second-generation network costs (including interest)	(5,161		)	—			(146		)	—		(5,307		)
Property and equipment additions	(5,937		)	(167		)	(241		)	—		(6,345		)
Purchase of intangible assets	(806		)	—			—			—		(806		)
Net cash used in investing activities	(11,904		)	(167		)	(387		)	—		(12,458		)
Cash flows provided by (used in) financing activities:
Principal payments of the Facility Agreement	(16,418		)	—			—			—		(16,418		)
Proceeds from issuance of stock to Terrapin	28,500			—			—			—		28,500
Proceeds from issuance of common stock and exercise of options and warrants	3,016			—			—			—		3,016
Net cash provided by financing activities	15,098			—			—			—		15,098
Effect of exchange rate changes on cash	—			—			152			—		152
Net increase (decrease) in cash, cash equivalents and restricted cash	4,110			88			(405		)	—		3,793
Cash, cash equivalents and restricted cash, beginning of period	41,448			719			3,227			—		45,394
Cash, cash equivalents and restricted cash, end of period	$	45,558		$	807		$	2,822		$	—	$	49,187