LightSquared adds money woes to GPS and Falcone problems

LightSquared earned just $30 million during the first nine months of this year and registered a $427 million net loss during the period, Reuters reported today, after gaining access to a financial statement. If the hopeful 4G network doesn't figure out a way to bring in new funds, said the report, it could run out of money during the second quarter of 2012.

"There is a need to raise substantial capital beyond the beginning of the second quarter of 2012 in order to have sufficient liquidity," the company's statement said, according to Reuters.

LightSquared is almost entirely funded by Philip Falcone's hedge fund, the $5 billion Harbinger Capital Partners, which lent the company $184 million in July for 2.9 million shares of LightSquared stock.

Adding to its financial woes is a growing opposition to its planned LTE network, which uses untraditional spectrum (CP: LightSquared is jilting taxpayers out of billions, GPS industry claims). This spectrum has been said to interfere with GPS signals, which presents a safety issue, were it to disrupt devices uses by the airline industry, for example, or law enforcement.

Bloomberg News recently leaked network test results reportedly showing that the network, despite adjustments, could still knock out a "great majority" of GPS devices (CP: LightSquared denies 4G network still endangering GPS).

LightSquared CEO Sanjiv Ahuja quickly shot back, requesting that the Dept. of Defense and Dept. of Transportation investigate the source of the leak, which he said had presented "slanted analysis of the data" and "prejudiced public opinion" against the pending network.

(Sen. Chuck Grassley of Iowa would argue that much bias has been exercised in LightSquared's favor, and that his efforts to better understand the network's relationship with the FCC have been "stonewalled." Grassley has been standing in the way of an FCC vote, in an effort to get his questions answered.)

Still another addition to LightSquared's problem pile is the potential for Falcone to be charged with several violations by the U.S. Securities and Exchange Commission.

According to Reuters, Falcone told investors in a letter, "None of the matters the SEC is investigating involve LightSquared."

Falcone made his billions by shorting subprime mortgages in 2007.

A LightSquared failure would also present trouble for Sprint — which only recently was able to sigh in relief over partner Clearwire's newfound financial solidity (CP: Clearwire raises $715.5 million toward LTE buildout).

In July, Sprint and LightSquared penned an agreement stating that LightSquared will pay Sprint approximately $9 billion in cash, over an 11-year period, for spectrum hosting network services as well as LTE and satellite purchase credits valued at approximately $4.5 billion. The deal also gives Sprint the option to purchase up to 50% of LightSquared's expected L-Band 4G capacity.

The deal also gives LightSquared's wholesale customers access to 4G/3G data services, "as soon as LightSquared launches its first 4G markets in 2012," the pair said in a statement.

Financing permitting, that is.