EchoStar CORP: Form 10-Q for the period ended Jun 30, 2026

The transfer of the AWS-4 and H-Block Licenses consists of two steps: first, the AWS-4 and H-Block Licenses were transferred by us to the Trust (the “Spectrum Transfer Closing”), and second, the AWS-4 and H-Block Licenses will be transferred by the Trust to SpaceX (the “Spectrum Acquisition Closing”). The Foreign Assets will be transferred directly to SpaceX at the Spectrum Acquisition Closing, to the extent the required regulatory approvals have been obtained by such date; provided, however, that the failure to obtain such approvals will not delay or prevent the Spectrum Acquisition Closing.

The consideration for the Initial SpaceX Transactions payable at the Spectrum Acquisition Closing is $17 billion (the “Total Consideration Amount”). A portion of the Total Consideration Amount (such amount, the “Total Payoff Consideration Amount”) will be used to: (i) fully pay off all outstanding amounts owed on the 10 3/4% Senior Secured Notes due 2029 (the “10 3/4% Secured Notes”) and the 6 3/4% Senior Secured due 2030 (the “6 3/4% Secured Notes”) and (ii) settle the anticipated redemption and conversions of the 3 7/8% Convertible Secured Notes due 2030 (the “Convertible Notes due 2030” and, together with the 10 3/4% Secured Notes and the 6 3/4% Secured Notes, the “Seller Notes”).

The remaining amount after paying off the Seller Notes (the “Purchase Price”) will be paid by SpaceX to us as follows: (i) up to $8.5 billion will be paid in SpaceX’s Class A Common Stock, valued at $212 per share, prior to the stock split discussed below, (the “Equity Amount”); and (ii) any amount of the Purchase Price exceeding $8.5 billion will be paid in cash. If the Total Payoff Consideration Amount exceeds $8.5 billion, we may elect to pay the excess in cash, our Class A Common Stock (with respect to the Convertible Notes due 2030), or both, to maintain our receipt of the full Equity Amount. However, if we elect not to pay such excess amount, the Equity Amount will be reduced dollar-for-dollar to ensure that the combined Equity Amount and Total Payoff Consideration Amount do not exceed the Total Consideration Amount. As of June 30, 2026, the aggregate principal amount outstanding of the Seller Notes was $9.821 billion and is secured by the AWS-4 and AWS-3 Licenses, and the Trust.

The Spectrum Acquisition Closing is expected to occur on or about November 30, 2027, following the expiration of the make-whole period for the Seller Notes and the date on which the Convertible Notes due 2030 become eligible for redemption. If SpaceX elects to proceed with the Spectrum Acquisition Closing prior to November 30, 2027, SpaceX will be responsible for any additional amounts required to satisfy the Seller Notes, other than additional amounts payable as a result of a default under the Seller Notes.

In connection with the SpaceX License Purchase Agreement and the Initial SpaceX Transactions, on September 7, 2025, SpaceX and the Trust entered into a Credit Agreement, pursuant to which SpaceX has agreed upon the Spectrum Transfer Closing to loan to the Trust (via automatically cancellable loans) amounts sufficient to make debt service payments on the Seller Notes through at least November 30, 2027 (the “Interim Debt Service”), which will be secured on a junior lien basis by the AWS-4 and H-Block Licenses. The aggregate amount of payments for the Interim Debt Service through November 30, 2027 will equal approximately $2 billion and will be settled via a loan between us and SpaceX that automatically cancels upon the completion of the Spectrum Acquisition Closing. The Credit Agreement is generally on standard commercial terms and conditions and, as a beneficiary of the Credit Agreement, we have the ability to enforce the parties obligations under the Agreement.

As part of the Spectrum Transfer Closing, discussed below in “SpaceX Transactions Closing Updates,” in May 2026, SpaceX reimbursed us $414 million for cash interest payments we previously made on the Seller Notes (the “SpaceX Reimbursement of Cash Interim Debt Service Payments”). In addition, in June 2026, the Trust made interest payments on our behalf of $414 million on the Seller Notes (the “Interim Debt Service Payments by the Trust”). As of June 30, 2026, Interim Debt Service payments totaled approximately $828 million, which are recorded in “Long-term deferred revenue and other long-term liabilities” on our Condensed Consolidated Balance Sheets, which will be recognized as a gain upon the closing of the SpaceX Transactions.

There have been no material changes in our market risk during the three months ended June 30, 2026. For additional information, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk in Part II of our Annual Report on Form 10-K for the year ended December 31, 2025.

Conclusion regarding disclosure controls and procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in internal control over financial reporting

Effective June 30, 2026, our control environment was modified in response to our subsidiary, DISH DBS Corporation and certain of its subsidiaries (“DISH DBS Filing Entities”), including DISH Wireless L.L.C. and its subsidiaries (the “DISH Wireless Filing Entities,” and together with DISH DBS Filing Entities, the “Filing Entities”), having commenced voluntary cases under chapter 11 of the United States Bankruptcy Code (the “Prepackaged Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), Houston Division, to pursue confirmation of a joint prepackaged plan of reorganization (the "Prepackaged Chapter 11 Plan") that restructures certain liabilities of the DISH DBS Filing Entities and DISH Wireless Filing Entities.

We removed internal control activities unique to the operational environments of the Filing Entities from the scope of our integrated controls.

To address the resulting incremental financial reporting risks and ensure completeness and accuracy of our financial statements, management designed and implemented the following incremental internal controls as of June 30, 2026:

• Financial Reporting and Deconsolidation Controls: Established hard close procedures on the petition date, assessing reporting entity boundaries for proper deconsolidation. These controls include specific review mechanisms to verify the mathematical accuracy of deconsolidation gain or loss calculations by derecognizing all assets, liabilities, including the fair value of the retained interest of the Filing Entities.

Apart from the modifications described above regarding the deconsolidation of the Filing Entities, no other changes occurred in our internal control over financial reporting during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting

Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2025 includes a detailed discussion of our risk factors. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

We are subject to risks and uncertainties associated with the Chapter 11 bankruptcy proceedings of certain of our subsidiaries.

On June 30, 2026, our subsidiary, DISH DBS Corporation and certain of its subsidiaries (the “DISH DBS Filing Entities”), including DISH Wireless L.L.C. and its subsidiaries (the “DISH Wireless Filing Entities,” and together with the DISH DBS Filing Entities, the “Filing Entities”), commenced voluntary cases under chapter 11 of the United States Bankruptcy Code (the “Prepackaged Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), Houston Division, to pursue confirmation of a joint prepackaged plan of reorganization (the "Prepackaged Chapter 11 Plan") that restructures certain liabilities of DISH DBS and DISH Wireless. The Plan implements the terms of a Restructuring Support Agreement (the “RSA”) entered into on March 19, 2026 with creditors now holding more than 88% of DISH DBS’s secured and unsecured notes. Confirmation of the Prepackaged Chapter 11 Plan, the timing of emergence and consummation of the restructuring remain subject to approval by the Bankruptcy Court and satisfaction of applicable conditions. EchoStar Corporation is not a debtor in the Prepackaged Chapter 11 Cases, and certain subsidiaries and operating brands are not included in the proceedings. Nevertheless, the Prepackaged Chapter 11 Cases could have a material adverse effect on our business, financial condition, results of operations, liquidity and prospects.

These specific risks include, but are not limited to, the following:

• Prepackaged Chapter 11 Plan confirmation, timing and execution risks: Although the Prepackaged Chapter 11 Plan has significant creditor support, the bankruptcy court must confirm the Prepackaged Chapter 11 Plan before the restructuring can be consummated. Objections by minority creditors, disputes regarding the Prepackaged Chapter 11 Plan or RSA, failure to satisfy conditions to confirmation or effectiveness, appeals or other legal or procedural developments could delay or prevent emergence from chapter 11 on a timely basis or at all, which would exacerbate the risks described below.
• Potential parent-level claims and financial exposure: Although the Prepackaged Chapter 11 Cases are limited to DISH DBS, DISH Wireless and certain of their subsidiaries, and EchoStar Corporation is not a debtor, certain creditors have asserted and may in the future assert claims or causes of action against, have sought and may in the future seek recovery from, or otherwise attempt to impose liability on EchoStar or its non-debtor subsidiaries, whether or not the Prepackaged Chapter 11 Plan is confirmed. If any such claims are successful, our business, financial condition and liquidity could be materially adversely impacted.
• Operational, asset and counterparty risks: The Prepackaged Chapter 11 Cases are intended to facilitate a rapid and orderly transition of the legacy DISH Wireless business infrastructure, including decommissioning of our facilities-based 5G network. Certain creditors’ claims in the Prepackaged Chapter 11 Cases may adversely affect our ability to preserve, transfer, monetize or otherwise realize value from assets held by debtor subsidiaries. During the pendency of the Prepackaged Chapter 11 Cases, our use of the property of the Subsidiary Filers outside the ordinary course of business will require approval by the Bankruptcy Court, which could adversely impact our flexibility in operating certain of our businesses.

In addition, the Prepackaged Chapter 11 Cases may disrupt relationships with vendors, customers, regulators and other counterparties, may reduce vendor confidence, make it harder for us to attract new customers and contribute to customer churn across active businesses, including DISH TV and Sling TV, and may make it more difficult to attract and retain employees. Consummation of the Prepackaged Chapter 11 Plan will require the devotion of management attention, and expenses related to the Prepackaged Chapter 11 Cases could be higher than anticipated.

• Consolidated financial condition, debt and capital markets risks: The Prepackaged Chapter 11 Cases and our broader consolidated debt burden could materially adversely affect our liquidity, credit profile, access to capital and the market price of our securities. As a result, an investment in our securities may be highly speculative and subject to significant volatility.
• Deconsolidation Risks. As a result of the Prepackaged Chapter 11 Cases, we have deconsolidated the Deconsolidated Subsidiaries effective June 30, 2026. Beginning with the third quarter of 2026, the operating results of the Deconsolidated Subsidiaries, which constitute our Pay-TV business and substantially all of our expenses for our Other segment, will no longer be included in our consolidated results of operations. Our reported results will be materially different than in prior periods, and comparisons with our historical financial performance will be more difficult.