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Globalstar Announces $38 Million Capital Raise



Jun 21, 2011


Globalstar, Inc. has completed a private placement with select current institutional investors including Thermo Funding Company LLC, to raise initial gross proceeds of $38 million, before deducting fees and other offering expenses. Additionally, investors have the option to invest up to an incremental $12 million over an approximate three month period on the same principal terms. Lazard Capital Markets LLC served as the sole placement agent.


Under the terms of the transaction, Globalstar issued $38 million in principal amount of 5% Convertible Senior Unsecured Notes. Investors will also receive warrants to purchase an aggregate of 15.2 million shares of common stock. The notes will be convertible at a price of $1.25 per share and are guaranteed on a subordinated basis by certain domestic subsidiaries of Globalstar. The warrants will be exercisable until five years from the date of issuance at an exercise price of $1.25 per share. Globalstar's controlling stockholder has entered into a voting agreement to vote in favor of this transaction. The Company is also required to file a registration statement with the Securities and Exchange Commission to permit the resale of the securities and the underlying shares of common stock.


"We are very pleased to announce this financing which was fully subscribed by current Globalstar investors," said Jay Monroe, Executive Chairman of Globalstar, Inc. "As we continue with final preparations for next month's launch of six new second-generation satellites, the investment associated with this capital raise once again demonstrates the continued confidence our investors have in Globalstar and our long-term future."


Proceeds of this financing are expected to be used to meet the Company's capital expenditure needs, including the procuring and deploying its second-generation constellation and other operating costs.


This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities. The securities offered and sold in the private placement have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration, or an applicable exemption from registration, under the Securities Act and applicable state securities laws.