Globalstar (GSAT) Announces $55 Million Private Placement
Globalstar, Inc. (Nasdaq: GSAT) has entered into definitive agreements with select institutional investors, including a number of existing stockholders and Thermo Funding Company LLC, to raise gross proceeds of up to $55 million, before deducting placement agent fees and other estimated offering expenses, in a registered direct offering.
Under the terms of the transaction, Globalstar will sell an aggregate of up to $55 million in principal amount of its 8.00% Convertible Senior Unsecured Notes. Investors will also receive warrants to purchase an aggregate of 15,277,771 shares of common stock. The notes will be convertible at a price of $1.80 per share. The warrants will be exercisable after stockholder approval is obtained until five years from the date of issuance at an exercise price of $1.80 per share. Until stockholder approval is obtained consistent with NASDAQ rules, exercise of the warrants is prohibited and conversion of the notes is restricted to 19.9% of the pre-transaction outstanding common stock on a pro rata basis. Globalstar's controlling stockholder has entered into a voting agreement to vote in favor of this transaction. [SM]
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