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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
(Mark One) 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2020 
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                  to                

Commission file number 001-33117 
GLOBALSTAR, INC.
(Exact Name of Registrant as Specified in Its Charter) 
Delaware 41-2116508
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)  
 
1351 Holiday Square Blvd.
Covington, Louisiana 70433
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (985) 335-1500
Securities registered pursuant to section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common Stock, par value $0.0001 per shareGSATNYSE American
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  x No ☐
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x  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  
(Do not check if a 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No x
 
As of July 31, 2020, 1,670,326,068 shares of voting common stock were outstanding, and no shares of nonvoting common stock were authorized or outstanding. Unless the context otherwise requires, references to common stock in this Report mean the Registrant’s voting common stock. 



FORM 10-Q

GLOBALSTAR, INC.
TABLE OF CONTENTS
 
 Page
PART I - FINANCIAL INFORMATION
   
Item 1.
   
Item 2.
   
Item 3.
   
Item 4.
   
PART II - OTHER INFORMATION
   
Item 1.
Item 1A. 
   
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
   
 




PART I - FINANCIAL INFORMATION
 
Item 1. Financial Statements.
 
GLOBALSTAR, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share data)
(Unaudited) 
 Three Months EndedSix Months Ended
June 30,
2020
June 30,
2019
June 30,
2020
June 30,
2019
Revenue:  
Service revenue$27,090  $26,700  $56,025  $52,819  
Subscriber equipment sales3,274  4,491  6,533  8,450  
Total revenue30,364  31,191  62,558  61,269  
Operating expenses:  
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)8,647  9,395  17,375  19,248  
Cost of subscriber equipment sales2,940  3,578  5,583  6,727  
Marketing, general and administrative10,253  11,022  21,344  22,628  
Depreciation, amortization and accretion23,903  23,852  47,720  47,653  
Total operating expenses45,743  47,847  92,022  96,256  
Loss from operations(15,379) (16,656) (29,464) (34,987) 
Other income (expense):  
Interest income and expense, net of amounts capitalized(11,508) (12,808) (25,518) (25,678) 
Derivative gain1,160  35,116  339  92,124  
Foreign currency gain (loss)1,314  880  (7,639) 966  
Other(233) (286) (566) (381) 
Total other (expense) income(9,267) 22,902  (33,384) 67,031  
(Loss) income before income taxes(24,646) 6,246  (62,848) 32,044  
Income tax expense90  57  111  84  
Net (loss) income$(24,736) $6,189  $(62,959) $31,960  
Other comprehensive (loss) income:
Foreign currency translation adjustments(1,368) (498) 3,935  (768) 
Comprehensive (loss) income$(26,104) $5,691  $(59,024) $31,192  
Net (loss) income per common share:  
Basic$(0.01) $0.00  $(0.04) $0.02  
Diluted(0.01) (0.01) (0.04) (0.03) 
Weighted-average shares outstanding:  
Basic1,668,974  1,450,380  1,613,467  1,449,355  
Diluted1,668,974  1,640,442  1,613,467  1,640,537  
 
See accompanying notes to unaudited interim condensed consolidated financial statements. 
1


GLOBALSTAR, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share data)  
(Unaudited) 
 June 30, 2020December 31, 2019
ASSETS  
Current assets:  
Cash and cash equivalents$12,070  $7,606  
Restricted cash3,625  622  
Accounts receivable, net of allowance of $5,136 and $2,952, respectively
19,756  21,760  
Inventory15,688  16,341  
Prepaid expenses and other current assets14,045  16,931  
Total current assets65,184  63,260  
Property and equipment, net754,263  799,914  
Restricted cash51,234  50,900  
Operating lease right of use assets, net14,926  15,871  
Intangible and other assets, net of accumulated amortization of $9,427 and $9,009, respectively
37,943  35,645  
Total assets$923,550  $965,590  
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Current portion of long-term debt$45,000  $  
Accounts payable4,714  8,015  
Accrued expenses23,624  24,874  
Payables to affiliates361  261  
Deferred revenue26,987  29,910  
Total current liabilities100,686  63,060  
Long-term debt, less current portion324,233  464,176  
Operating lease liabilities14,037  14,747  
Employee benefit obligations3,985  4,128  
Derivative liabilities2,395  3,792  
Deferred revenue5,017  5,273  
Other non-current liabilities2,711  3,071  
Total non-current liabilities352,378  495,187  
Commitments and contingencies
Stockholders’ equity:  
Preferred Stock of $0.0001 par value; 100,000,000 shares authorized and none issued and outstanding at June 30, 2020 and December 31, 2019, respectively
    
Series A Preferred Convertible Stock of $0.0001 par value; one share authorized and none issued and outstanding at June 30, 2020 and December 31, 2019, respectively
    
Voting Common Stock of $0.0001 par value; 1,900,000,000 shares authorized; 1,670,289,833 shares and 1,464,544,144 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
167  146  
Nonvoting Common Stock of $0.0001 par value; no shares authorized and none issued and outstanding at June 30, 2020 and December 31, 2019, respectively
    
Additional paid-in capital2,093,877  1,970,047  
Accumulated other comprehensive income (loss)486  (3,449) 
Retained deficit(1,624,044) (1,559,401) 
Total stockholders’ equity470,486  407,343  
Total liabilities and stockholders’ equity$923,550  $965,590  
 See accompanying notes to unaudited interim condensed consolidated financial statements.  
2


GLOBALSTAR, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)  
(Unaudited) 
 Common
Shares
Common
Stock
Amount
Additional
Paid-In
Capital
Accumulated Other Comprehensive Income (Loss)Retained
Deficit
Total
Balances – January 1, 20201,464,544  $146  $1,970,047  $(3,449) $(1,559,401) $407,343  
Net issuance of restricted stock awards and recognition of stock-based compensation3,020  1  1,729  —  —  1,730  
Contribution of services—  —  91  —  —  91  
Recognition of stock-based compensation of employee stock purchase plan—  —  102  —  —  102  
Common stock issued in connection with conversion of Loan Agreement with Thermo200,140  20  120,441  —  —  120,461  
Impact of adoption of Credit Loss Standard—  —  —  —  (1,684) (1,684) 
Other comprehensive income—  —  —  5,303  —  5,303  
Net loss—  —  —  —  (38,223) (38,223) 
Balances – March 31, 20201,667,704  $167  $2,092,410  $1,854  $(1,599,308) $495,123  
Net issuance of restricted stock awards and recognition of stock-based compensation1,354  —  922  —  —  922  
Contribution of services—  —  47  —  —  47  
Net issuance of stock through employee stock purchase plan and recognition of stock-based compensation1,188  —  482  —  —  482  
Common stock issued in connection with conversion of 2013 8.00% Notes
44  —  16  —  —  16  
Other comprehensive loss—  —  —  (1,368) —  (1,368) 
Net loss—  —  —  (24,736) (24,736) 
Balances – June 30, 20201,670,290  $167  $2,093,877  $486  $(1,624,044) $470,486  

3


Common
Shares
Common
Stock
Amount
Additional
Paid-In
Capital
Accumulated Other Comprehensive LossRetained
Deficit
Total
Balances – January 1, 20191,446,784  $145  $1,937,364  $(3,839) $(1,574,725) $358,945  
Net issuance of restricted stock awards, stock for employee stock option exercises and recognition of stock-based compensation3,285  —  1,000  —  —  1,000  
Contribution of services—  —  47  —  —  47  
Recognition of stock-based compensation of employee stock purchase plan—  —  77  —  —  77  
Stock offering issuance costs—  —  (195) (195) 
Other comprehensive loss—  —  —  (270) —  (270) 
Net income—  —  —  —  25,771  25,771  
Balances – March 31, 20191,450,069  $145  $1,938,293  $(4,109) $(1,548,954) $385,375  
Net issuance of restricted stock awards, stock for employee stock option exercises and recognition of stock-based compensation232  —  968  —  —  968  
Contribution of services—  —  197  —  —  197  
Net issuance of stock through employee stock purchase plan and recognition of stock-based compensation1,437  —  500  —  —  500  
Investment in business—  —  155  —  —  155  
Other comprehensive loss—  —  —  (498) —  (498) 
Net income—  —  —  —  6,189  6,189  
Balances – June 30, 20191,451,738  $145  $1,940,113  $(4,607) $(1,542,765) $392,886  

See accompanying notes to unaudited interim condensed consolidated financial statements.
4


GLOBALSTAR, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Six Months Ended
 June 30,
2020
June 30,
2019
Cash flows provided by (used in) operating activities:  
Net (loss) income$(62,959) $31,960  
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating
activities:
  
Depreciation, amortization and accretion47,720  47,653  
Change in fair value of derivative assets and liabilities(339) (92,124) 
Stock-based compensation expense2,508  2,756  
Amortization of deferred financing costs3,822  4,480  
Provision for bad debts1,419  1,170  
Noncash interest and accretion expense16,029  9,135  
Unrealized foreign currency loss (gain)7,619  (975) 
Other, net24  230  
Changes in operating assets and liabilities:  
Accounts receivable(1,445) (4,328) 
Inventory536  (1,755) 
Prepaid expenses and other current assets2,541  (2,486) 
Other assets(1,623) (361) 
Accounts payable and accrued expenses(3,844) 4,277  
Payables to affiliates100  1,700  
Other non-current liabilities(217) 216  
Deferred revenue(3,032) 262  
Net cash provided by operating activities8,859  1,810  
Cash flows used in investing activities:  
Second-generation network costs (including interest)(1,600) (1,244) 
Property and equipment additions(2,237) (2,366) 
Purchase of intangible assets(1,042) (1,487) 
Net cash used in investing activities(4,879) (5,097) 
Cash flows provided by (used in) financing activities:  
Principal payments of the Facility Agreement(276) (47,435) 
Payments for debt and equity issuance costs(1,074) (1,230) 
Proceeds from PPP Loan4,973    
Proceeds from Subordinated Loan Agreement  62,000  
Proceeds from issuance of common stock and exercise of options and warrants346  402  
Net cash provided by financing activities3,969  13,737  
Effect of exchange rate changes on cash, cash equivalents and restricted cash(148) 43  
Net increase in cash, cash equivalents and restricted cash7,801  10,493  
Cash, cash equivalents and restricted cash, beginning of period59,128  75,490  
Cash, cash equivalents and restricted cash, end of period$66,929  $85,983  
As of:
June 30,
2020
December 31,
2019
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents$12,070  $7,606  
Restricted cash (See Note 4 for further discussion on restrictions)54,859  51,522  
Total cash, cash equivalents and restricted cash shown in the statement of cash flows$66,929  $59,128  
 Six Months Ended
 June 30,
2020
June 30,
2019
Supplemental disclosure of cash flow information:  
Cash paid for interest$5,971  $12,882  
Supplemental disclosure of non-cash financing and investing activities:  
Increase in capitalized accrued interest for second-generation network costs$792  $208  
Capitalized accretion of debt discount and amortization of prepaid financing costs223  165  
Principal amount of Loan Agreement with Thermo converted into common stock137,366    
Reduction of debt discount and issuance costs due to conversion of Loan Agreement with Thermo17,963    
Fair value of common stock issued upon conversion of Loan Agreement with Thermo84,059    
Reduction in derivative liability due to conversion of Loan Agreement with Thermo1,058    
See accompanying notes to unaudited interim condensed consolidated financial statements.
5


GLOBALSTAR, INC.  
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
1. BASIS OF PRESENTATION

Globalstar, Inc. (“Globalstar” or the “Company”) provides Mobile Satellite Services (“MSS”) including voice and data communications services through its global satellite network. Thermo Companies, through commonly controlled affiliates, (collectively, “Thermo”) is the principal owner and largest stockholder of Globalstar. The Company’s Executive Chairman of the Board controls Thermo. Two other members of the Company's Board of Directors are also directors, officers or minority equity owners of various Thermo entities.

The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”); however, management believes the disclosures made are adequate to make the information presented not misleading. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Globalstar Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 28, 2020 (the “2019 Annual Report”). 

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. The Company evaluates estimates on an ongoing basis. Significant estimates include the value of derivative instruments, the allowance for doubtful accounts, the net realizable value of inventory, the useful life and value of property and equipment, the value of stock-based compensation and income taxes. The Company has made certain reclassifications to prior period condensed consolidated financial statements to conform to current period presentation.

These unaudited interim condensed consolidated financial statements include the accounts of Globalstar and all its subsidiaries. All significant intercompany transactions and balances have been eliminated in the consolidation. In the opinion of management, the information included herein includes all adjustments, consisting of normal recurring adjustments, that are necessary for a fair presentation of the Company’s condensed consolidated statements of operations, condensed consolidated balance sheets, condensed consolidated statements of stockholders' equity and condensed consolidated statements of cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the full year or any future period.

Recent Developments: COVID-19

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) a global pandemic. Various levels of governmental agencies and authorities have taken measures to reduce the spread of COVID-19, including “stay at home” orders, social distancing and closures of non-essential businesses. These measures, as well as the pandemic itself, have significantly impacted economic conditions around the world and created uncertainties in the economy. In recent months, some governmental agencies have partially lifted restrictions, but significant economic uncertainties remain.

The Company performed a detailed analysis of its financial statements, liquidity position and business operations to assess the impact caused by COVID-19 for the period ended June 30, 2020 and through the release date of these condensed consolidated financial statements. Among other effects, the Company has accommodated certain pricing concessions requested by customers and experienced lower demand for its products and services, particularly from its retail customers and those that operate in the oil and gas market. While the full extent and duration of the impact is unknown, the Company expects a continuation of this lower demand at least until these industries fully recover. Additionally, the Company began and expects to continue to operate with a remote workforce, manage a supply chain sourcing predominantly from China, and engage with international regulators remotely to advance the terrestrial spectrum authorization process. There are a number of uncertainties that could impact the Company's future results of operations, including the effectiveness of COVID-19 mitigation measures; the duration of the pandemic; global economic conditions; changes to the Company's operations; changes in consumer confidence, behaviors and spending; work from home trends; and the sustainability of supply chains.

6


In accordance with the Company's accounting policies disclosed in its 2019 Annual Report, the Company reviews the carrying value of long-lived assets, intangible assets and inventory when circumstances warrant an assessment in order to evaluate whether indicators of impairment exist. The Company updated its internal projections as part of this assessment to reflect the reduction in cash flows from operations that it currently expects will result from COVID-19. The Company expects these reductions to be temporary; therefore, no indicator of impairment was identified. For inventory, the carrying value of inventory on hand was lower than its expected net realizable value; accordingly, no impairment was necessary. For accounts receivable, the Company increased its loss rate for certain receivables as discussed in more detail in Note 3: Credit Losses.

Revised internal projections have also been evaluated in light of financial covenant requirements in the Company's facility agreements. The Company continues to monitor its ability to remain in compliance with financial covenants over the next twelve months. See Note 4: Long-Term Debt and Other Financing Arrangements and Risk Factors: "The effect of an epidemic or pandemic, including the current COVID-19 pandemic, could have an adverse impact on our operations and the operations of our customers and may have a material adverse impact on our financial condition and results of operations" for further discussion. If the Company is able to remain in compliance, its sources of liquidity are expected to be sufficient to cover its obligations over the next twelve months.

This liquidity assessment considers relief granted to the Company under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES" Act), including a $5.0 million loan the Company received in April 2020 under the payroll protection program, which the Company expects to be forgiven, and the deferral of the payment of certain payroll taxes. Additionally, the Company evaluated tax law changes pursuant to the CARES Act and revised its net operating loss carryforwards and other estimates, as necessary.

As previously stated, the full impact of COVID-19 on the Company's condensed consolidated financial statements is uncertain at this time and the Company will continue to reassess the impact at each reporting period.

Recently Issued Accounting Pronouncements 

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. As part of the FASB's disclosure framework project, it has changed the disclosure requirements for defined pension and other post-retirement benefit plans as outlined in ASU No. 2018-14. This ASU is effective for public entities for annual periods beginning after December 15, 2020. This ASU adds certain narrative disclosures and removes other disclosures as outlined in ASU No. 2018-14 related to the defined benefit plan.

In December 2019, the FASB issued ASU No. 2019-12: Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU No. 2019-12 amends the accounting treatment for income taxes by simplifying and clarifying certain aspects of the existing guidance. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2020. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company has not yet determined the impact this standard will have on its condensed consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Credit Losses, Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13, as amended, significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard replaced the incurred loss approach with an expected loss model for instruments measured at amortized cost. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This ASU became effective for public entities for annual and interim periods beginning after December 15, 2019. The Company adopted this standard when it became effective on January 1, 2020. See Note 3: Credit Losses for a discussion of the impact to the Company's condensed consolidated financial statements and required disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. As part of the FASB's disclosure framework project, it has eliminated, amended and added disclosure requirements for fair value measurements. Entities are no longer required to disclose the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy, the policy of timing of transfers between levels of the fair value hierarchy and the valuation processes for Level 3 fair value measurements. Public companies are required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2019. The
7


Company adopted this standard when it became effective on January 1, 2020. The adoption of this standard impacted certain of the Company's disclosures included in Note 6: Fair Value Measurements.

2. REVENUE

Disaggregation of Revenue

The following table discloses revenue disaggregated by type of product and service (amounts in thousands):
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Service revenue:
Duplex$8,556  $9,031  $16,219  $17,676  
SPOT11,579  12,619  23,702  25,714  
Commercial IoT4,298  4,353  8,608  8,051  
IGO109  179  200  345  
Engineering and other2,548  518  7,296  1,033  
Total service revenue27,090  26,700  56,025  52,819  
Subscriber equipment sales:
Duplex$625  $306  $1,029  $557  
SPOT1,695  2,186  3,102  3,777  
Commercial IoT939  1,972  2,352  4,044  
Other15  27  50  72  
Total subscriber equipment sales3,274  4,491  6,533  8,450  
Total revenue$30,364  $31,191  $62,558  $61,269  

Engineering and other service revenue includes revenue generated primarily from certain governmental and engineering service contracts. During the three and six months ended June 30, 2020, the Company recognized $2.0 million and $6.0 million, respectively, in revenue related to the completion of certain milestones for non-recurring engineering services under the Terms Agreement described in its 2019 Annual Report.

8


The Company attributes equipment revenue to various countries based on the location where equipment is sold. Service revenue is generally attributed to the various countries based on the Globalstar entity that holds the customer contract. The following table discloses revenue disaggregated by geographical market (amounts in thousands):
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Service revenue:
United States$20,016  $19,452  $42,705  $38,704  
Canada4,392  4,331  8,363  8,142  
Europe1,791  2,212  3,152  4,334  
Central and South America669  570  1,379  1,134  
Others222  135  426  505  
Total service revenue27,090  26,700  56,025  52,819  
Subscriber equipment sales:
United States$1,721  $2,549  $3,164  $4,760  
Canada859  1,133  1,942  1,946  
Europe376  440  870  1,017  
Central and South America306  349  572  661  
Others12  20  (15) 66  
Total subscriber equipment sales3,274  4,491  6,533  8,450  
Total revenue$30,364  $31,191  $62,558  $61,269  

Accounts Receivable

The Company has agreements with certain of its independent gateway operators ("IGOs") whereby the parties net settle outstanding payables and receivables between the respective entities on a periodic basis. As of June 30, 2020 and December 31, 2019, $6.3 million and $6.5 million, respectively, related to these agreements was included in accounts receivable on the Company’s condensed consolidated balance sheet.

Contract Liabilities

Contract liabilities, which are included in deferred revenue on the Company’s condensed consolidated balance sheet, represent the Company’s obligation to transfer service or equipment to a customer from whom it has previously received consideration. The amount of revenue recognized during the six months ended June 30, 2020 and 2019 from performance obligations included in the contract liability balance at the beginning of each of the periods was $