Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-14180 LORAL SPACE & COMMUNICATIONS INC. (Exact name of registrant specified in its charter) Jurisdiction of incorporation: Delaware IRS identification number: 87-0748324 600 Fifth Avenue New York, New York 10020 Telephone: (212) 697-1105 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Common stock, $.01 par value LORL Nasdaq Global Select Market Preferred Stock Purchase Rights Nasdaq Global Select Market Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ◻ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ◻ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ◻ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ◻ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ◻ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Act). Yes ☐ No ☒ As of June 30, 2020, the aggregate market value of the common stock, the only common equity of the registrant currently issued and outstanding, held by non-affiliates of the registrant was approximately $248,376,482. At March 5, 2021, 21,427,078 shares of the registrant’s voting common stock and 9,505,673 shares of the registrant’s non-voting common stock were outstanding. Table of Contents LORAL SPACE AND COMMUNICATIONS INC. INDEX TO ANNUAL REPORT ON FORM 10-K For the Year Ended December 31, 2020 Risk Factor Summary 3 PART I Item 1: Business 5 Item 1A: Risk Factors 23 Item 1B: Unresolved Staff Comments 49 Item 2: Properties 49 Item 3: Legal Proceedings 49 Item 4: Mine Safety Disclosures 49 PART II Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 50 Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations 52 Item 8: Financial Statements and Supplementary Data 68 Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 68 Item 9A: Controls and Procedures 68 Item 9B: Other Information 71 PART III Item 10: Directors, Executive Officers and Corporate Governance 71 Item 11: Executive Compensation 75 Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 80 Item 13: Certain Relationships and Related Transactions, and Director Independence 83 Item 14: Principal Accountant Fees and Services 84 PART IV Item 15: Exhibits and Financial Statement Schedule 86 Signatures 94 2 Table of Contents RISK FACTOR SUMMARY Our business is subject to a number of risks of which you should be aware before making an investment decision. Below we summarize what we believe are the principal risk factors but these risks are not the only ones we face, and you should carefully review and consider the full discussion of our risk factors in the section titled “Risk Factors”, together with the other information in this Annual Report. Risks Relating to the Integration Transaction ● The announcement and pendency of the integration transaction may adversely affect our business, financial condition and results of operations. ● The anticipated benefits of the Transaction may not be realized fully or at all, or may take longer to realize than expected. Financial, Capital Structure and Telesat Investment Risk Factors ● Our equity investment in Telesat may be at risk because of Telesat’s leverage, which may increase and reduce Telesat’s financial flexibility. ● While we own 62.6% of Telesat on an economic basis, we own only 32.6% of its voting stock and therefore do not have the right to elect or appoint a majority of the members of its Board of Directors and our interests and those of the other Telesat shareholders may diverge or conflict. ● Loral is a holding company with no current operations, and as such, may not receive sufficient cash flow from our affiliates or be able to incur sufficient borrowings to meet our financial obligations. ● Our voting common stock could be delisted by Nasdaq as a result of not having held an annual meeting of stockholders within 12 months of the end of our fiscal year on December 31, 2019. Risks Factors Associated with Satellite Services ● Telesat’s in-orbit satellites may fail to operate as expected due to operational anomalies resulting in lost revenues, increased costs and/or termination of contracts. Some of Telesat satellites have experienced in-orbit anomalies. ● Changes in consumer demand for traditional television services and expansion of terrestrial networks have adversely impacted the growth in subscribers to direct-to-home television services in North America, which may adversely impact future revenues. ● Fluctuations in available satellite capacity could adversely affect Telesat’s results. ● Significant and intensifying competition in the satellite industry and from other providers of communications capacity could result in a loss of revenues and a decline in profitability of Telesat if it fails to compete effectively. ● Changes in technology could have a material adverse effect on Telesat’s results. ● There are numerous risks and uncertainties associated with the planned Telesat Lightspeed constellation, including risks associated with failing to develop the necessary commercial and service operational capabilities in connection therewith. ● There are numerous risks related to monetizing C-band spectrum, and Telesat may not be able to do so in a timely way or at all. 3 Table of Contents ● The actual orbital maneuver lives of Telesat’s satellites may be shorter than Telesat anticipates, and Telesat may be required to reduce available capacity on its satellites prior to the end of their orbital maneuver lives. ● Telesat’s insurance will not protect it against all satellite-related losses. Further, Telesat may not be able to renew insurance on its existing satellites or obtain insurance on future satellites on acceptable terms or at all, and, for certain of Telesat’s existing satellites, Telesat has elected to forego obtaining insurance. ● Telesat derives a substantial amount of its revenues from only a few of its customers. A loss of, or default by, one or more of these major customers, or a material adverse change in any such customer’s business or financial condition, could materially reduce Telesat’s future revenues and contracted backlog. ● Telesat’s business is capital intensive and Telesat may not be able to raise adequate capital to finance its business strategies, or Telesat may be able to do so only on terms that significantly restrict its ability to operate its business. ● Telesat’s satellite launches may be delayed, it may suffer launch failures or its satellites may fail to reach their planned orbital locations. Any such issue could result in the loss of a satellite or cause significant delays in the deployment of the satellite which could have a material adverse effect on Telesat’s results of operations, business prospects and financial condition. ● Because Telesat’s satellites are complex and are deployed in complex environments, Telesat’s satellites may have defects that are discovered only after full deployment, which could seriously harm Telesat’s business. ● Spectrum values historically have been volatile, which could cause the value of Telesat’s business to fluctuate. ● Telesat operates in a highly regulated industry and government regulations may adversely affect its ability to sell its services, or increase the expense of such services or otherwise limit its ability to operate or grow its business. ● The planned Telesat Lightspeed constellation will depend on the use of spectrum; regulations governing non-geostationary orbit spectrum rights, including requirements to share spectrum, could also materially impact the Telesat Lightspeed constellation’s system capacity. Other Risk Factors ● Threats to public health, and measures taken in response to them, may have an adverse effect on Telesat’s or our business and results of operations, including in respect of COVID-19.