Item 8.01 Other Events.
On January 5, 2021, Loral Space & Communications Inc. ("Loral" or the "Company")
received a written notice (the "Notice") from the Listing Qualifications
Department of The Nasdaq Stock Market ("Nasdaq") indicating that the Company is
not in compliance with Rule 5620(a) of the Nasdaq Listing Rules (the "Rules") as
a result of the Company not having held an annual meeting of stockholders within
12 months of the end of the Company's fiscal year on December 31, 2019. The
Notice is only a notification of deficiency, not of imminent delisting, and has
no current effect on the listing or trading of the Company's securities on the
Nasdaq Global Select Market.
The Notice states that, under the Rules, the Company has 45 calendar days to
submit a plan to regain compliance with the Rules. If Nasdaq accepts the
Company's plan, Nasdaq may grant the Company an extension of up to 180 calendar
days from the Company's fiscal year end, or until June 30, 2021, to regain
compliance. The Notice further states that, in determining whether to accept the
Company's plan, Nasdaq will consider such things as the likelihood that the
annual meeting can be held within the 180-day period, the Company's past
compliance history, the reasons for the delayed meeting, other corporate events
that may occur during the review period, the Company's overall financial
condition and its public disclosures. If Nasdaq does not accept the Company's
plan, the Company will have the opportunity to appeal the decision in front of a
Nasdaq Hearings Panel.
The Company intends to submit a plan to regain compliance with the Rules within
the required timeframe. As previously disclosed, the Company has entered into a
Transaction Agreement and Plan of Merger (as it may be amended from time to
time, the "Transaction Agreement") with Telesat Canada, a Canadian corporation
("Telesat"), Telesat Partnership LP, a limited partnership formed under the laws
of Ontario, Canada ("Telesat Partnership"), Telesat Corporation, a newly formed
corporation incorporated under the laws of the Province of British Columbia,
Canada and the sole general partner of Telesat Partnership ("New Telesat"),
Telesat CanHold Corporation, a corporation incorporated under the laws of
British Columbia, Canada and wholly owned subsidiary of Telesat Partnership,
Lion Combination Sub Corporation, a Delaware corporation and wholly owned
subsidiary of Loral ("Merger Sub"), Public Sector Pension Investment Board, a
Canadian Crown corporation ("PSP Investments"), and Red Isle Private Investments
Inc., a Canadian corporation and wholly owned subsidiary of PSP Investments,
under which Merger Sub will merge with and into Loral, with Loral surviving the
merger as a wholly owned subsidiary of Telesat Partnership, and Loral
stockholders receiving common shares of New Telesat and/or units of Telesat
Partnership that will be exchangeable for common shares of New Telesat (the
"Transaction"). The Company is currently preparing a proxy statement/prospectus
to be filed with the Securities and Exchange Commission ("SEC") with respect to
obtaining stockholder approval of the Transaction Agreement, and the Company is
planning to hold an annual stockholders meeting, one of the purposes of which
will be consideration of, and voting by the stockholders on, approval of the
Transaction Agreement, as soon as possible after the Company has received
clearance from the SEC of the proxy statement/prospectus.
Forward-Looking Statements
This report contains forward-looking statements within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. When used in this report, the
words "believes," "expects," "plans," "may," "will," "would," "could," "should,"
"anticipates," "estimates," "project," "intend" or "outlook" or other variations
of these words or other similar expressions are intended to identify
forward-looking statements and information. In addition, Loral or its
representatives have made or may make forward-looking statements, orally or in
writing, which may be included in, but are not limited to, various filings made
from time to time with the SEC, and press releases or oral statements made with
the approval of an authorized executive officer of Loral. Actual results may
differ materially from anticipated results as a result of certain risks and
uncertainties which are described as "Risk Factors" in Loral's current Annual
Report on Form 10-K and in Loral's Quarterly Reports on Form 10-Q. The reader is
specifically referred to these documents, as well as Loral's other filings with
the SEC.
Risks and uncertainties include but are not limited to (1) risks associated with
financial factors, including swings in the global financial markets, increases
in interest rates and access to capital; (2) risks associated with satellite
services, including dependence on large customers, launch delays and failures,
in-orbit failures and competition; (3) risks and uncertainties associated with
Telesat's planned low earth orbit satellite network, including overcoming
technological challenges, access to spectrum and markets, governmental
restrictions or regulations to address environmental concerns,
raising sufficient capital to design and implement the system and competition
from other low earth orbit systems; (4) regulatory risks, such as the effect of
industry and government regulations that affect Telesat; (5) risks related to
the satisfaction of the conditions to closing the Transaction in the anticipated
timeframe or at all, including the failure to obtain necessary regulatory and
stockholder approvals; (6) risks relating to the inability or failure to realize
the anticipated benefits of the Transaction; (7) risks of disruption from the
Transaction making it more difficult to maintain business and operational
relationships; (8) risks arising from or relating to the negative effects of
this announcement or the consummation of the Transaction on the market price of
Loral's voting common stock; (9) risks relating to the incurrence of significant
transaction costs and unknown liabilities, including litigation or regulatory
actions related to the Transaction; and (10) other risks, including risks
relating to and resulting from the COVID-19 pandemic. The foregoing list of
important factors is not exclusive. Furthermore, Loral operates in an industry
sector where securities values may be volatile and may be influenced by economic
and other factors beyond Loral's control.
Additional Information and Where to Find It
This report does not constitute an offer to sell or the solicitation of an offer
to buy any securities, or a solicitation of any vote or approval, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. In connection with the
Transaction, New Telesat and Telesat Partnership intend to file with the SEC a
registration statement on Form F-4 that will include a proxy
statement/prospectus and other relevant documents to be mailed by Loral to its
security holders in connection with the Transaction. The proxy
statement/prospectus will also be filed with the applicable Canadian securities
regulators. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION about Loral, Telesat,
New Telesat, Telesat Partnership and the Transaction. Investors and security
holders will be able to obtain these materials (when they are available) and
other documents filed with the SEC and the Canadian securities regulators free
of charge at the SEC's website, www.sec.gov and at the System for Electronic
Document Analysis and Retrieval (SEDAR) at www.sedar.com. In addition, a copy of
the proxy statement/prospectus (when it becomes available) may be obtained free
of charge from Telesat's internet website for investors
www.telesat.com/investor-relations, or from Loral's investor relations website
at www.loral.com/Investors. Investors and security holders may also read and
copy any reports, statements and other information that Loral, Telesat, New
Telesat or Telesat Partnership files with the SEC on the SEC's website at
www.sec.gov.
Participants in the Solicitation of Votes
Loral, Telesat, and their respective directors, executive officers and certain
other members of management and employees may be deemed to be participants in
the solicitation of proxies from the stockholders of Loral in respect of the
proposed Transaction. Information regarding Telesat directors and executive
officers is available in its Form 20-F filed by Telesat on SEDAR at
www.sedar.com, on February 27, 2020, and information regarding Loral's directors
and executive officers is available in its Amendment No. 1 to Form 10-K filed
with the SEC on March 26, 2020. Other information regarding the participants in
the proxy solicitation and a description of their direct and indirect interests,
by security holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed with the SEC and
the Canadian securities regulators when they become available.
For more information regarding these and other risks and uncertainties that
Loral may face, see the section entitled "Risk Factors" in Loral's Form 10-K,
Form 10-Q and Form 8-K filings with the SEC and as otherwise enumerated herein
or therein.
For more information regarding these and other risks and uncertainties that
Telesat may face, see the section entitled "Risk Factors" in Telesat's Form 20-F
and Form 6-K filings with the SEC and as otherwise enumerated herein or therein.
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