v3.23.2
SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTS
On July 28, 2023, the Company successfully launched EchoStar XXIV, our next generation ultra high density satellite. The satellite is expected to begin service in the fourth quarter of 2023. Once in service, the satellite is expected to bring further consumer broadband capacity across North and South America and catalyze sales in other markets, including in-flight Wi-Fi, enterprise networking and cellular backhaul for mobile network operators across the two continents. Until the satellite reaches its orbital position and completes in-orbit testing, we cannot reasonably estimate the impact the satellite will have to our Consolidated Financial Statements.

On August 8, 2023, the Company entered into an Agreement and Plan of Merger with DISH Network Corporation, a Nevada corporation, and Eagle Sub Corp, a Nevada corporation and a wholly owned subsidiary of DISH (“Merger Sub”). The Merger Agreement provides, among other things, that subject to the satisfaction or waiver of the conditions set forth in the agreement, Merger Sub will merge with and into EchoStar (the “Merger”), with EchoStar surviving the Merger as a wholly owned subsidiary of DISH.

On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of EchoStar Class A Common Stock, par value $0.001 per share (“EchoStar Class A Common Stock”), EchoStar Class C Common Stock, par value $0.001 per share (“EchoStar Class C Common Stock”) and EchoStar Class D Common Stock, par value $0.001 per share (“EchoStar Class D Common Stock”), outstanding immediately prior to the Effective Time, will be converted into the right to receive a number of validly issued, fully paid and non-assessable shares of DISH Class A Common Stock, par value $0.01 per share (“DISH Class A Common Stock”), equal to 2.85 (the “Exchange Ratio”). On the terms and subject to the conditions set forth in the Merger Agreement, at the Effective Time of the Merger, each share of EchoStar Class B Common Stock, par value $0.001 per share (“EchoStar Class B Common Stock”), outstanding immediately prior to the Effective Time will be converted into the right to receive a number of validly issued, fully paid and non-assessable shares of DISH Class B Common Stock, par value $0.01 per share (the “DISH Class B Common Stock” and, together with the DISH Class A Common Stock, the “DISH Common Stock”), equal to the Exchange Ratio. Any shares of EchoStar Class A Common Stock, EchoStar Class B Common Stock, EchoStar Class C Common Stock and EchoStar Class D Common Stock (collectively, “EchoStar Common Stock”) that are held in EchoStar’s treasury or held directly by DISH or Merger Sub immediately prior to the Effective Time will be cancelled and cease to exist and no consideration shall be paid or payable in respect thereof.

Concurrently with the entry into the Merger Agreement, Charles W. Ergen and Ergen family stockholders entered into a support agreement with the Company and DISH, pursuant to which the Ergen stockholders agreed to convert a number of shares of EchoStar Class B Common Stock owned by them to EchoStar Class A Common Stock prior to the Effective Time (which number will be determined in accordance with the Merger Agreement) such that the Ergen stockholders’ voting power of DISH does not increase as a result of the Merger from the voting power owned by them as of the date of the entry into the Merger Agreement. The parties have agreed to enter into a registration rights agreement reasonably acceptable to the parties providing for the registration of the Ergen stockholders’ shares of DISH Class A Common Stock or DISH Class B Common Stock received as part of the Merger consideration and/or DISH Class B Common Stock held by such stockholders immediately prior to the closing of the Merger.

The board of directors of the Company (the “Board”), acting upon the unanimous recommendation of a special transaction committee of independent directors of the Board, has unanimously approved, adopted and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement. The closing of the Merger is expected to occur in the fourth calendar quarter of 2023, subject to the satisfaction of certain regulatory approvals and other customary closing conditions. The Merger Agreement provides certain termination rights for each of DISH and the Company, including, among others, if the consummation of the Merger does not occur on or before February 8, 2024.