11. 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, 2019

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue:
Service revenue	$	23,055		$	9,312		$	15,984		$	(21,651	)	$	26,700
Subscriber equipment sales	399			3,752			1,575			(1,235		)	4,491
Total revenue	23,454			13,064			17,559			(22,886		)	31,191
Operating expenses:
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)	7,001			1,378			2,196			(1,180		)	9,395
Cost of subscriber equipment sales	268			3,326			1,219			(1,235		)	3,578
Marketing, general and administrative	6,651			1,256			23,588			(20,473		)	11,022
Depreciation, amortization and accretion	23,155			(14		)	711			—			23,852
Total operating expenses	37,075			5,946			27,714			(22,888		)	47,847
Income (loss) from operations	(13,621		)	7,118			(10,155		)	2			(16,656		)
Other income (expense):
Interest income and expense, net of amounts capitalized	(12,792		)	(3		)	(13		)	—			(12,808		)
Derivative gain	35,116			—			—			—			35,116
Gain on legal settlement	120			—			—			—			120
Equity in subsidiary earnings (loss)	(2,280		)	(3,989		)	—			6,269			—
Other	(354		)	(60		)	890			(2		)	474
Total other income (expense)	19,810			(4,052		)	877			6,267			22,902
Income (loss) before income taxes	6,189			3,066			(9,278		)	6,269			6,246
Income tax expense	—			19			38			—			57
Net income (loss)	$	6,189		$	3,047		$	(9,316	)	$	6,269		$	6,189
Comprehensive income (loss)	$	6,189		$	3,047		$	(9,812	)	$	6,267		$	5,691

Globalstar, Inc.

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2018

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue:
Service revenue	$	23,270		$	10,292		$	16,406		$	(21,973	)	$	27,995
Subscriber equipment sales	204			5,348			1,375			(1,196		)	5,731
Total revenue	23,474			15,640			17,781			(23,169		)	33,726
Operating expenses:
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)	6,745			1,498			2,294			(1,011		)	9,526
Cost of subscriber equipment sales	165			4,281			919			(1,195		)	4,170
Marketing, general and administrative	11,382			1,457			24,078			(20,973		)	15,944
Revision to contract termination charge	(20,478		)	—			—			—			(20,478		)
Depreciation, amortization and accretion	21,349			68			1,199			—			22,616
Total operating expenses	19,163			7,304			28,490			(23,179		)	31,778
Income (loss) from operations	4,311			8,336			(10,709		)	10			1,948
Other income (expense):
Interest income and expense, net of amounts capitalized	(10,335		)	(2		)	3			29			(10,305		)
Derivative loss	(2,059		)	—			—			—			(2,059		)
Gain on legal settlement	6,779			—			—			—			6,779
Equity in subsidiary earnings (loss)	(5,800		)	(6,241		)	—			12,041			—
Other	92			293			(3,725		)	(11		)	(3,351		)
Total other income (expense)	(11,323		)	(5,950		)	(3,722		)	12,059			(8,936		)
Income (loss) before income taxes	(7,012		)	2,386			(14,431		)	12,069			(6,988		)
Income tax expense	—			10			14			—			24
Net income (loss)	$	(7,012	)	$	2,376		$	(14,445	)	$	12,069		$	(7,012	)
Comprehensive income (loss)	$	(7,012	)	$	2,376		$	(11,793	)	$	12,047		$	(4,382	)

Globalstar, Inc.

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2019

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue:
Service revenue	$	44,992		$	18,894		$	31,113		$	(42,180	)	$	52,819
Subscriber equipment sales	701			7,238			3,076			(2,565		)	8,450
Total revenue	45,693			26,132			34,189			(44,745		)	61,269
Operating expenses:
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)	14,016			2,827			5,087			(2,682		)	19,248
Cost of subscriber equipment sales	491			6,392			2,407			(2,563		)	6,727
Cost of subscriber equipment sales - reduction in the value of inventory	—			—			—			—			—
Marketing, general and administrative	13,775			2,557			45,798			(39,502		)	22,628
Depreciation, amortization and accretion	46,350			3			1,300			—			47,653
Total operating expenses	74,632			11,779			54,592			(44,747		)	96,256
Income (loss) from operations	(28,939		)	14,353			(20,403		)	2			(34,987		)
Other income (expense):
Interest income and expense, net of amounts capitalized	(25,656		)	(7		)	(15		)	—			(25,678		)
Derivative gain	92,124			—			—			—			92,124
Gain on legal settlement	120			—			—			—			120
Equity in subsidiary earnings (loss)	(5,213		)	(8,623		)	—			13,836			—
Other	(476		)	127			817			(3		)	465
Total other income (expense)	60,899			(8,503		)	802			13,833			67,031
Income (loss) before income taxes	31,960			5,850			(19,601		)	13,835			32,044
Income tax expense	—			26			58			—			84
Net income (loss)	$	31,960		$	5,824		$	(19,659	)	$	13,835		$	31,960
Comprehensive income (loss)	$	31,960		$	5,824		$	(20,419	)	$	13,827		$	31,192

Globalstar, Inc.

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2018

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenue:
Service revenue	$	43,804		$	19,366		$	32,014		$	(41,179	)	$	54,005
Subscriber equipment sales	251			7,397			2,571			(1,749		)	8,470
Total revenue	44,055			26,763			34,585			(42,928		)	62,475
Operating expenses:
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)	13,002			2,888			5,162			(2,497		)	18,555
Cost of subscriber equipment sales	206			6,091			1,794			(1,749		)	6,342
Marketing, general and administrative	18,467			2,521			44,941			(38,710		)	27,219
Revision to contract termination charge	(20,478		)	—			—			—			(20,478		)
Depreciation, amortization and accretion	40,393			164			1,290			—			41,847
Total operating expenses	51,590			11,664			53,187			(42,956		)	73,485
Income (loss) from operations	(7,535		)	15,099			(18,602		)	28			(11,010		)
Other income (expense):
Interest income and expense, net of amounts capitalized	(17,721		)	(4		)	17			50			(17,658		)
Derivative gain	106,885			—			—			—			106,885
Gain on legal settlement	6,779			—			—			—			6,779
Equity in subsidiary earnings (loss)	(7,120		)	(9,628		)	—			16,748			—
Other	(370		)	117			(3,733		)	(27		)	(4,013		)
Total other income (expense)	88,453			(9,515		)	(3,716		)	16,771			91,993
Income (loss) before income taxes	80,918			5,584			(22,318		)	16,799			80,983
Income tax expense	—			16			49			—			65
Net income (loss)	$	80,918		$	5,568		$	(22,367	)	$	16,799		$	80,918
Comprehensive (loss) income	$	80,918		$	5,568		$	(20,039	)	$	16,771		$	83,218

Globalstar, Inc.

Condensed Consolidating Balance Sheet

As of June 30, 2019

(Unaudited)



	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	20,551		$	814	$	3,720		$	—		$	25,085
Restricted cash	60,898			—		—			—			60,898
Accounts receivable, net of allowance	8,637			8,890		4,892			—			22,419
Intercompany receivables	1,069,458			842,249		79,453			(1,991,160		)	—
Inventory	5,802			7,143		1,886			—			14,831
Prepaid expenses and other current assets	11,053			6,289		2,977			—			20,319
Total current assets	1,176,399			865,385		92,928			(1,991,160		)	143,552
Property and equipment, net	812,875			929		30,144			4			843,952
Operating lease right of use assets, net	12,202			226		1,770			—			14,198
Intercompany notes receivable	5,674			—		—			(5,674		)	—
Investment in subsidiaries	(258,372		)	46,117		53,118			159,137			—
Intangible and other assets, net	30,522			255		4,596			(12		)	35,361
Total assets	$	1,779,300		$	912,912	$	182,556		$	(1,837,705	)	$	1,037,063
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	98,829		$	—	$	—		$	—		$	98,829
Accounts payable	2,175			3,645		1,263			—			7,083
Accrued expenses	13,873			7,553		8,262			—			29,688
Intercompany payables	798,331			838,834		353,936			(1,991,101		)	—
Payables to affiliates	2,356			—		—			—			2,356
Derivative liabilities	288			—		—			—			288
Deferred revenue	1,658			23,040		8,015			—			32,713
Total current liabilities	917,510			873,072		371,476			(1,991,101		)	170,957
Long-term debt, less current portion	392,706			—		—			—			392,706
Operating lease liabilities	11,821			192		1,172			—			13,185
Employee benefit obligations	4,580			—		—			—			4,580
Intercompany notes payable	—			—		5,674			(5,674		)	—
Derivative liabilities	54,453			—		—			—			54,453
Deferred revenue	5,196			180		19			—			5,395
Other non-current liabilities	148			322		2,431			—			2,901
Total non-current liabilities	468,904			694		9,296			(5,674		)	473,220
Stockholders’ equity (deficit)	392,886			39,146		(198,216		)	159,070			392,886
Total liabilities and stockholders’ equity	$	1,779,300		$	912,912	$	182,556		$	(1,837,705	)	$	1,037,063

Globalstar, Inc.

Condensed Consolidating Balance Sheet

As of December 31, 2018

(Unaudited)



	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	11,312		$	2,126	$	1,774		$	—		$	15,212
Restricted cash	60,278			—		—			—			60,278
Accounts receivable, net of allowance	7,138			7,826		4,363			—			19,327
Intercompany receivables	1,047,320			824,920		105,819			(1,978,059		)	—
Inventory	6,747			6,149		1,378			—			14,274
Prepaid expenses and other current assets	7,765			2,987		2,658			—			13,410
Total current assets	1,140,560			844,008		115,992			(1,978,059		)	122,501
Property and equipment, net	850,790			1,242		30,658			5			882,695
Intercompany notes receivable	5,600			—		6,436			(12,036		)	—
Investment in subsidiaries	(255,187		)	42,481		50,220			162,486			—
Intangible and other assets, net	36,275			324		3,698			(11		)	40,286
Total assets	$	1,778,038		$	888,055	$	207,004		$	(1,827,615	)	$	1,045,482
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	96,249		$	—	$	—		$	—		$	96,249
Accounts payable	2,420			3,378		1,197			—			6,995
Accrued expenses	8,904			6,747		7,434			—			23,085
Intercompany payables	778,340			832,284		367,396			(1,978,020		)	—
Payables to affiliates	656			—		—			—			656
Derivative liabilities	757			—		—			—			757
Deferred revenue	1,699			23,943		6,296			—			31,938
Total current liabilities	889,025			866,352		382,323			(1,978,020		)	159,680
Long-term debt, less current portion	367,202			—		—			—			367,202
Employee benefit obligations	4,489			—		—			—			4,489
Intercompany notes payable	6,436			—		5,600			(12,036		)	—
Derivative liabilities	146,108			—		—			—			146,108
Deferred revenue	5,339			335		18			—			5,692
Other non-current liabilities	494			323		2,549			—			3,366
Total non-current liabilities	530,068			658		8,167			(12,036		)	526,857
Stockholders’ equity (deficit)	358,945			21,045		(183,486		)	162,441			358,945
Total liabilities and stockholders’ equity	$	1,778,038		$	888,055	$	207,004		$	(1,827,615	)	$	1,045,482

Globalstar, Inc.

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2019

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash flows provided by (used in) operating activities	$	952		$	(1,148	)	$	2,006		$	—	$	1,810
Cash flows provided by (used in) investing activities:
Second-generation network costs (including interest)	(1,231		)	—			(13		)	—		(1,244		)
Property and equipment additions	(2,155		)	(164		)	(47		)	—		(2,366		)
Investment in business	155			—			—			—		155
Purchase of intangible assets	(1,599		)	—			(43		)	—		(1,642		)
Net cash used in investing activities	(4,830		)	(164		)	(103		)	—		(5,097		)
Cash flows provided by (used in) financing activities:
Principal payments of the Facility Agreement	(47,435		)	—			—			—		(47,435		)
Payments for financing costs	(1,230		)	—			—			—		(1,230		)
Proceeds from Subordinated Loan Agreement	62,000			—			—			—		62,000
Proceeds from issuance of common stock and exercise of options and warrants	402			—			—			—		402
Net cash provided by financing activities	13,737			—			—			—		13,737
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			43			—		43
Net increase (decrease) in cash, cash equivalents and restricted cash	9,859			(1,312		)	1,946			—		10,493
Cash, cash equivalents and restricted cash, beginning of period	71,590			2,126			1,774			—		75,490
Cash, cash equivalents and restricted cash, end of period	$	81,449		$	814		$	3,720		$	—	$	85,983

Globalstar, Inc.

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2018

(Unaudited)



	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash flows provided by (used in) operating activities	$	10,592		$	(2,545	)	$	(242	)	$	—	$	7,805
Cash flows used in investing activities:
Second-generation network costs (including interest)	(4,254		)	—			(23		)	—		(4,277		)
Property and equipment additions	(2,207		)	(841		)	(173		)	—		(3,221		)
Purchase of intangible assets	(1,369		)	—			(32		)	—		(1,401		)
Net cash used in investing activities	(7,830		)	(841		)	(228		)	—		(8,899		)
Cash flows provided by (used in) financing activities:
Principal payments of the Facility Agreement	(38,933		)	—			—			—		(38,933		)
Proceeds from issuance of common stock and exercise of options and warrants	319			—			—			—		319
Net cash used in financing activities	(38,614		)	—			—			—		(38,614		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			(73		)	—		(73		)
Net decrease in cash, cash equivalents and restricted cash	(35,852		)	(3,386		)	(543		)	—		(39,781		)
Cash, cash equivalents and restricted cash, beginning of period	96,499			4,942			3,838			—		105,279
Cash, cash equivalents and restricted cash, end of period	$	60,647		$	1,556		$	3,295		$	—	$	65,498