Globalstar, Inc.GSAT
Globalstar, Inc. Debt Disclosure
7. LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS
Amounts in the above table are calculated based on amounts outstanding at December 31, 2025, and therefore exclude future draws pursuant to the 2023 Funding Agreement and assume recoupments as scheduled under the 2021 and 2023 Funding Agreements and the 2024 Debt Repayment.
Long-term debt consists of the following (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Principal Amount | Unamortized Debt Premium (Discount) and Deferred Financing Costs | Carrying Value | Principal Amount | Unamortized Debt Premium (Discount) and Deferred Financing Costs | Carrying Value | ||||||||||||||||||||||||||||||
| 2024 Debt Repayment | $ | 221,625 | $ | 86,045 | $ | 307,670 | $ | 221,625 | $ | 107,176 | $ | 328,801 | |||||||||||||||||||||||
| 2023 Funding Agreement | 182,147 | (12,164) | 169,983 | 155,000 | (11,031) | 143,969 | |||||||||||||||||||||||||||||
| 2021 Funding Agreement | 6,250 | (115) | 6,135 | 40,850 | (2,198) | 38,652 | |||||||||||||||||||||||||||||
| Total debt | 410,022 | 73,766 | 483,788 | 417,475 | 93,947 | 511,422 | |||||||||||||||||||||||||||||
| Less: current portion | 31,950 | (115) | 31,835 | 34,600 | — | 34,600 | |||||||||||||||||||||||||||||
| Long-term debt | $ | 378,072 | $ | 73,881 | $ | 451,953 | $ | 382,875 | $ | 93,947 | $ | 476,822 | |||||||||||||||||||||||
The carrying value of debt reflected above is net of deferred financing costs and any premium or discount to the loan amount at issuance, including accretion. As of December 31, 2025, the current portion of long-term debt relates to the 2021 Funding Agreement and the 2023 Funding Agreement; these amounts are expected to be paid under the Updated Services Agreements through service fee offsets from the Customer during the next twelve months. The Company's obligations under its debt agreements included in the table above are secured by a first-priority lien over substantially all of the assets of the Company and its domestic subsidiaries.
2024 Debt Repayment
As discussed in Note 2: Special Purpose Entity, pursuant to the Updated Services Agreements, the Customer funded $235 million (including $13.3 million of make whole premium payments, which were recorded to deferred revenue) for the Company to retire its outstanding 2023 13% Notes. The 2024 Debt Repayment is expected to be fully repaid by offsetting against amounts payable by the Customer to the Company on a quarterly basis over a period of 32 quarters commencing on a fixed repayment date in the future that is not tied to the launch of services. The 2024 Debt Repayment is classified as debt because the Company's repayment obligations will commence on such date regardless of when services are provided under the
Updated Services Agreements. The 2024 Debt Repayment accrues annual fees, which would be reduced or eliminated entirely if the Company meets certain defined milestones associated with the completion of the Extended MSS Network, at which time prior accruals will be reduced or eliminated. These accrued fees are included in other noncurrent liabilities on the Company's balance sheet. As of December 31, 2025, the outstanding principal balance of the 2024 Debt Repayment was $221.6 million.
On the issuance date, the Company recorded the 2024 Debt Repayment at fair value. The difference between the principal amount of the 2024 Debt Repayment and the fair value was recorded as a debt premium. Additionally, the Company was required to bifurcate the fair value of the interest reduction mechanism and record a derivative asset upon issuance equal to the debt premium. The debt premium is amortized as an offset to interest expense using the effective interest rate method. Refer to Note 8: Derivatives and Note 9: Fair Value Measurements for further information.
2023 Funding Agreement
In 2023, the Service Agreements were amended to provide for, among other things, payment of up to $252 million to the Company (the “2023 Funding Agreement”), which the Company has used and intends to use to fund 50% of the amounts due under its 2022 agreement with MDA Space, as well as launch, insurance and ancillary costs incurred in connection with the construction and launch of replacement satellites purchased under such agreement. As of December 31, 2025, the outstanding principal balance under the 2023 Funding Agreement was $182.1 million, which increased by $27.1 million from December 31, 2024 due to the Company's receipt of additional funds under the 2023 Funding Agreement during the third quarter of 2025.
The total amount paid to the Company under the 2023 Funding Agreement, including fees, is expected to be fully repaid by offsetting against amounts payable by the Customer pursuant to the Service Agreements beginning in the third quarter of 2026 and continuing for no longer than 16 consecutive quarters. Compounded fees are accrued at a fixed rate based on the average outstanding balance of the 2023 Funding Agreement. The balance accrued for these fees was $24.2 million as of December 31, 2025, of which $8.3 million is included in "Accounts payable and accrued expenses" and $15.9 million is included in "Other non-current liabilities" on the Company's balance sheet.
For as long as any amount funded under the 2023 Funding Agreement is outstanding, the Company will be subject to certain covenants, including (i) maintenance of a minimum cash balance of $30 million, (ii) interest coverage and leverage ratios, and (iii) other customary negative covenants, including limitations on certain asset transfers, expenditures and investments. Thermo guaranteed certain of the Company’s obligations under the 2023 Funding Agreement and Service Agreements. See Note 12: Related Party Transactions for further information regarding Thermo's guarantee.
As the Company makes draws under the 2023 Funding Agreement, the amount of each draw is recorded at fair value using a discounted cash flow model. The Company records a debt discount or premium for the difference between the fair value of the debt and the proceeds received and accretes the debt discount or amortizes the debt premium with an offset to interest expense through the maturity date using the effective interest rate method. The total proceeds of the draw made in the third quarter of 2025 were $27.1 million with a fair value of $28.6 million. The Company attributed this difference to the timing of cash flows for the draws and interest payments to be made pursuant to the 2023 Funding Agreement, resulting in an internal rate of return higher than the discount yield utilized in the valuation. Refer to Note 9: Fair Value Measurements for further discussion on the fair value of this draw.
2021 Funding Agreement
During 2021, the Company received payments totaling $94.2 million (as amended, the "2021 Funding Agreement"). This funding is being repaid by offsetting against amounts payable as services are performed by the Company. The last recoupment is expected to be made in March 2026. The debt discount associated with the 2021 Funding Agreement is accreting to interest expense through the maturity date using the effective interest rate method. No interest accrues on amounts outstanding under the 2021 Funding Agreement. During 2025, $34.6 million was recouped pursuant to the terms of the 2021 Funding Agreement. As of December 31, 2025, the outstanding principal balance under the 2021 Funding Agreement was $6.3 million.
Series A Preferred Stock
In 2022, the Company issued 149,425 shares of its 7.0% Perpetual Preferred Stock, Series A, liquidation preference $1,000 per share (the “Series A Preferred Stock”) with a fair value of $105.3 million. The shares of Series A Preferred Stock do not possess voting rights, other than with respect to certain matters specifically affecting the rights and obligations of the Series A Preferred Stock.
Holders of Series A Preferred Stock are entitled to receive, when, as and if declared by the Board or a committee thereof, cumulative cash dividends based on the liquidation preference of the Series A Preferred Stock, at a fixed rate equal to 7.00% per annum, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year. During 2025, the Company
made dividend payments to the holders of the Series A Preferred Stock, which were approved by the Board totaling $10.6 million.
The Series A Preferred Stock may be redeemed by the Company, in whole or in part, at any time. The holders of the Series A Preferred Stock do not have any rights to convert or require the Company to redeem such stock. The holders of the Series A Preferred stock have customary liquidation preferences.
Debt maturities
Annual debt maturities for each of the five years following December 31, 2025 and thereafter are as follows (in thousands):
| 2026 | $ | 31,950 | |||
| 2027 | 73,726 | ||||
| 2028 | 94,503 | ||||
| 2029 | 50,550 | ||||
| 2030 | 27,703 | ||||
| Thereafter | 131,590 | ||||
| Total | $ | 410,022 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Mar 4, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 26, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.