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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, 2021
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 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  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 30, 2021, 1,793 million 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,
2021
June 30,
2020
June 30,
2021
June 30,
2020
Revenue:  
Service revenue$25,617 $27,090 $48,703 $56,025 
Subscriber equipment sales4,662 3,274 8,505 6,533 
Total revenue30,279 30,364 57,208 62,558 
Operating expenses:  
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)9,123 8,647 18,200 17,375 
Cost of subscriber equipment sales2,858 2,940 5,757 5,583 
Cost of subscriber equipment sales - reduction in the value of inventory782  782  
Marketing, general and administrative9,681 10,253 19,778 21,344 
Depreciation, amortization and accretion23,843 23,903 47,959 47,720 
Total operating expenses46,287 45,743 92,476 92,022 
Loss from operations(16,008)(15,379)(35,268)(29,464)
Other (expense) income:  
Gain on extinguishment of debt2,664  2,664  
Interest income and expense, net of amounts capitalized(10,778)(11,508)(22,352)(25,518)
Derivative (loss) gain(1,310)1,160 (2,439)339 
Foreign currency gain (loss)4,425 1,314 110 (7,639)
Other(88)(233)(66)(566)
Total other (expense) income(5,087)(9,267)(22,083)(33,384)
Loss before income taxes(21,095)(24,646)(57,351)(62,848)
Income tax expense354 90 431 111 
Net loss$(21,449)$(24,736)$(57,782)$(62,959)
Other comprehensive loss:
Foreign currency translation adjustments(3,158)(1,368)84 3,935 
Comprehensive loss$(24,607)$(26,104)$(57,698)$(59,024)
Net loss per common share:  
Basic$(0.01)$(0.01)$(0.03)$(0.04)
Diluted(0.01)(0.01)(0.03)(0.04)
Weighted-average shares outstanding:  
Basic1,791,943 1,668,974 1,736,158 1,613,467 
Diluted1,791,943 1,668,974 1,736,158 1,613,467 
 
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, 2021December 31, 2020
ASSETS
Current assets:  
Cash and cash equivalents$15,724 $13,330 
Restricted cash 3,625 
Accounts receivable, net of allowance for credit losses of $3,560 and $4,352, respectively
28,870 22,147 
Inventory11,811 13,736 
Prepaid expenses and other current assets15,457 15,649 
Total current assets71,862 68,487 
Property and equipment, net681,325 715,909 
Restricted cash50,984 51,068 
Operating lease right of use assets, net27,542 14,400 
Intangible and other assets, net of accumulated amortization of $10,575 and $9,998, respectively
44,058 38,229 
Total assets$875,771 $888,093 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Current portion of long-term debt$ $58,824 
Accounts payable7,573 2,917 
Accrued expenses25,804 25,916 
Payables to affiliates418 581 
Deferred revenue26,823 25,977 
Total current liabilities60,618 114,215 
Long-term debt, less current portion313,423 326,586 
Operating lease liabilities25,492 13,726 
Employee benefit obligations3,507 3,650 
Derivative liabilities2,944 123 
Deferred revenue53,528 3,280 
Other non-current liabilities4,127 3,448 
Total non-current liabilities403,021 350,813 
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, 2021 and December 31, 2020, respectively
  
Series A Preferred Convertible Stock of $0.0001 par value; one share authorized and none issued and outstanding at June 30, 2021 and December 31, 2020, respectively
  
Voting Common Stock of $0.0001 par value; 2,150,000,000 and 1,900,000,000 shares authorized at June 30, 2021 and December 31, 2020, respectively; 1,793,063,410 and 1,674,668,617 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively
179 167 
Nonvoting Common Stock of $0.0001 par value; no shares authorized and none issued and outstanding at June 30, 2021 and December 31, 2020, respectively
  
Additional paid-in capital2,143,319 2,096,566 
Accumulated other comprehensive loss(2,860)(2,944)
Retained deficit(1,728,506)(1,670,724)
Total stockholders’ equity412,132 423,065 
Total liabilities and stockholders’ equity$875,771 $888,093 
 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, 20211,674,669 $167 $2,096,566 $(2,944)$(1,670,724)$423,065 
Net issuance of restricted stock awards and recognition of stock-based compensation1,915 — 1,875 — — 1,875 
Contribution of services— — 47 — — 47 
Recognition of stock-based compensation of employee stock purchase plan— — 79 — — 79 
Issuance of stock for employee stock option exercises83 — 57 — — 57 
Issuance of stock for warrant exercises115,036 12 43,666 — — 43,678 
Other comprehensive income— — — 3,242 — 3,242 
Net loss— — — — (36,333)(36,333)
Balances – March 31, 20211,791,703 $179 $2,142,290 $298 $(1,707,057)$435,710 
Net issuance of restricted stock awards and stock for employee stock options and recognition of stock-based compensation173 — 576 — — 576 
Contribution of services— — 47 — — 47 
Net issuance of stock through employee stock purchase plan and recognition of stock-based compensation1,187 — 406 — — 406 
Other comprehensive loss— — — (3,158)— (3,158)
Net loss— — — — (21,449)(21,449)
Balances – June 30, 20211,793,063 $179 $2,143,319 $(2,860)$(1,728,506)$412,132 

3


Common
Shares
Common
Stock
Amount
Additional
Paid-In
Capital
Accumulated Other Comprehensive LossRetained
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 

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,
2021
June 30,
2020
Cash flows provided by operating activities:  
Net loss$(57,782)$(62,959)
Adjustments to reconcile net loss to net cash provided by operating activities:  
Depreciation, amortization and accretion47,959 47,720 
Change in fair value of derivatives2,439 (339)
Stock-based compensation expense2,186 2,508 
Amortization of deferred financing costs1,841 3,822 
Provision for credit losses696 1,419 
Reduction in value of inventory782  
Noncash interest and accretion expense16,939 16,029 
Gain on extinguishment of debt(2,664) 
Unrealized foreign currency (gain) loss(245)7,619 
Noncash reversal of tariff accrual(912) 
Other, net(430)24 
Changes in operating assets and liabilities:  
Accounts receivable(7,750)(1,445)
Inventory1,118 536 
Prepaid expenses and other current assets(665)2,541 
Other assets(2,770)(1,623)
Accounts payable and accrued expenses4,416 (3,844)
Payables to affiliates(162)100 
Other non-current liabilities(87)(217)
Deferred revenue51,011 (3,032)
Net cash provided by operating activities55,920 8,859 
Cash flows used in investing activities:  
Network upgrades (including capitalized interest)(8,832)(1,600)
Property and equipment additions(2,288)(2,237)
Sale of property and equipment350  
Purchase of intangible assets(1,228)(1,042)
Net cash used in investing activities(11,998)(4,879)
Cash flows (used in ) provided by financing activities:  
Principal payments of the First Lien Facility Agreement(89,164)(276)
Proceeds from exercise of warrants43,678  
Payments for debt and equity issuance costs(133)(1,074)
Proceeds from PPP Loan 4,973 
Proceeds from issuance of common stock and exercise of options391 346 
Net cash (used in) provided by financing activities(45,228)3,969 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(9)(148)
Net (decrease) increase in cash, cash equivalents and restricted cash(1,315)7,801 
Cash, cash equivalents and restricted cash, beginning of period68,023 59,128 
Cash, cash equivalents and restricted cash, end of period$66,708 $66,929 
As of:
June 30,
2021
December 31,
2020
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents$15,724 $13,330 
Restricted cash (See Note 5 for further discussion on restrictions)
50,984 54,693 
Total cash, cash equivalents and restricted cash shown in the statement of cash flows$66,708 $68,023 
 Six Months Ended
 June 30,
2021
June 30,
2020
Supplemental disclosure of cash flow information:  
Cash paid for interest$3,977 $5,971 
Supplemental disclosure of non-cash financing and investing activities:  
Increase in capitalized accrued interest for network upgrades$1,041 $792 
Capitalized accretion of debt discount and amortization of prepaid financing costs251 223 
Forgiveness of principal and interest of Paycheck Protection Program loan5,030  
Principal amount of Loan Agreement with Thermo converted into common stock 137,366 
Reduction of debt discount and issuance costs due to conversion of Loan Agreement with Thermo 17,963 
Fair value of common stock issued upon conversion of Loan Agreement with Thermo 84,059 
Reduction in derivative liability due to conversion of Loan Agreement with Thermo 1,058 
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. The Company’s only reportable segment is its MSS business. 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, 2020, as filed with the SEC on March 4, 2021 (the “2020 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. 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, 2021 are not necessarily indicative of the results that may be expected for the full year or any future period.

COVID-19-Risks and Uncertainties

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. The Company has pursued various opportunities to mitigate the risks and uncertainties resulting from COVID-19, including, but not limited to, the receipt of a $5.0 million loan under the Paycheck Protection Program ("PPP") and the evaluation of its eligibility for the Employee Retention Tax Credit program and relief under the American Rescue Plan Act. In June 2021, the Small Business Administration ("SBA") fully approved the Company's request for forgiveness of all amounts outstanding, including accrued interest, under its PPP loan.

Recently Issued Accounting Pronouncements 

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06: Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Among other things, ASU No. 2020-06 simplifies the guidance in ASC 470 by eliminating two of the three models that require separating embedded conversion features from convertible instruments. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2021. Early adoption is permitted as of the beginning of any interim or annual reporting period, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. For existing debt instruments, the Company does not expect this standard will have a material impact to its condensed consolidated financial statements or related disclosures.

6


Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued 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, which became effective for public entities for annual periods beginning after December 15, 2020, adds certain narrative disclosures and removes other disclosures related to defined benefit plans. The Company adopted this standard when it became effective on January 1, 2021. The adoption of this standard did not have a material effect on the Company's disclosures.

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 became effective for public entities for annual and interim periods beginning after December 15, 2020. The Company adopted this standard when it became effective on January 1, 2021. The adoption of this standard did not have a material effect on the Company's financial statements or related disclosures.

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, 2021June 30, 2020June 30, 2021June 30, 2020
Service revenue:
Duplex$7,243 $8,556 $13,898 $16,219 
SPOT11,139 11,579 22,123 23,702 
Commercial IoT4,504 4,298 8,985 8,608 
Engineering and other2,731 2,657 3,697 7,496 
Total service revenue25,617 27,090 48,703 56,025 
Subscriber equipment sales:
Duplex$331 $625 $624 $1,029 
SPOT2,230 1,695 4,145 3,102 
Commercial IoT2,090 939 3,611 2,352 
Other11 15 125 50 
Total subscriber equipment sales4,662 3,274 8,505 6,533 
Total revenue$30,279 $30,364 $57,208 $62,558 

7


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, 2021June 30, 2020June 30, 2021June 30, 2020
Service revenue:
United States$18,228 $20,016 $34,671 $42,705 
Canada4,376 4,392 8,206 8,363 
Europe1,857 1,791 3,568 3,152 
Central and South America815 669 1,596 1,379 
Others341 222 662 426 
Total service revenue25,617 27,090 48,703 56,025 
Subscriber equipment sales:
United States$2,438 $1,721 $4,610 $3,164 
Canada1,118 859 1,867 1,942 
Europe527 376 1,006 870 
Central and South America571 306 992 572 
Others8 12 30 (15)
Total subscriber equipment sales4,662 3,274 8,505 6,533 
Total revenue$30,279 $30,364 $57,208 $62,558 

Accounts Receivable

The Company has agreements with certain customers whereby the parties net settle outstanding payables and receivables between the respective entities on a periodic basis. As of June 30, 2021 and December 31, 2020, $1.8 million and $1.9 million, respectively, related to these agreements was included in accounts receivable on the Company’s condensed consolidated balance sheet. The Company also has agreements whereby it acts as an agent to procure goods and perform services on behalf of the customer. As of June 30, 2021 and December 31, 2020, the Company recorded $10.3 million and $4.7 million, respectively, in accounts receivable related to these arrangements.

During 2020, one of the Company's customers filed for Chapter 11 of the United States Bankruptcy Code resulting in the Company reserving all open receivables due from the customer. This customer's plan of reorganization was confirmed by the bankruptcy court and the order was issued in January 2021. The cure payment, totaling $0.3 million, was received in March 2021.

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, 2021 and 2020 from performance obligations included in the contract liability balance at the beginning of each of the periods was $18.8 million and $24.4 million, respectively.

In general, the duration of the Company’s subscriber service contracts is one year or less. As of June 30, 2021, the Company expects to recognize $26.8 million, or approximately 33%, of its remaining performance obligations during the next twelve months.

In June 2021, the Company received an advance payment of $37.5 million from a customer pursuant to an agreement related to the Terms Agreement described in its 2020 Annual Report. The advance payment is expected to be repaid from services provided by the Company under the Terms Agreement. Accordingly, the Company recorded the advance payment as long-term deferred revenue on its condensed consolidated balance sheet as of June 30, 2021. The Company has also recorded $14.1 million as long-term deferred revenue on its condensed consolidated balance sheet as of June 30, 2021 related to additional advance payments received under this agreement.
8



3. LEASES

The following tables disclose the components of the Company’s finance and operating leases (amounts in thousands):
As of:As of:
June 30, 2021December 31, 2020
Operating leases:
Right-of-use asset, net$27,542 $14,400 
Short-term lease liability (recorded in accrued expenses)2,490 1,330 
Long-term lease liability25,492 13,726 
Total operating lease liabilities$27,982 $15,056 
Finance leases:
Right-of-use asset, net (recorded in intangible and other current assets, net)$11 $19 
Short-term lease liability (recorded in accrued expenses)7 11 
Long-term lease liability (recorded in non-current liabilities)6 9 
Total finance lease liabilities$13 $20 

During 2021, the Company entered into various operating leases predominately for new gateway sites totaling $13.6 million.

Lease Cost

The components of lease cost are reflected in the table below (amounts in thousands):
Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Operating lease cost:
Amortization of right-of-use assets$663 $458 $1,154 $922 
Interest on lease liabilities393 333 711 675 
Finance lease cost:
Amortization of right-of-use assets1 17 8 43 
Interest on lease liabilities 1  3 
Short-term lease cost41 21 79 25 
Total lease cost$1,098 $830 $1,952 $1,668 

Weighted-Average Remaining Lease Term and Discount Rate

9


The following table discloses the weighted-average remaining lease term and discount rate for finance and operating leases.
As of:As of:
June 30, 2021December 31, 2020
Weighted-average lease term
Finance leases2.0 years1.8 years
Operating Leases10.2 years8.3 years
Weighted-average discount rate
Finance leases6.7 %7.2 %
Operating leases8.4 %8.4 %

Supplemental Cash Flow Information

The below table discloses supplemental cash flow information for finance and operating leases (in thousands):
Six Months Ended
June 30, 2021June 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$2,080 $1,523 
Operating cash flows from finance leases 3 
Financing cash flows from finance leases8 38 

Maturity Analysis

The following table reflects undiscounted cash flows on an annual basis for the Company’s lease liabilities as of June 30, 2021 (amounts in thousands):
Operating LeasesFinance Leases
2021 (remaining)$2,537 $4 
20224,261 $7 
20234,177 $3 
20244,055 $ 
20254,094 $ 
Thereafter21,444 $ 
Total lease payments$40,568 $14 
Imputed interest(12,586)(1)
Discounted lease liability$27,982 $13 

As of June 30, 2021, the Company executed additional operating leases, primarily for new gateway locations. These leases had not yet commenced as of June 30, 2021 since the lessors are continuing to ready the sites for use. Accordingly, these leases are not included on the balance sheet as of June 30, 2021 or in the maturity table above. The Company is in the process of evaluating these lease obligations and expects them to be approximately $8.0 million.
10


4. PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in thousands): 
June 30,
2021
December 31,
2020
Globalstar System:  
Space component  
First and second-generation satellites in service$1,195,509 $1,195,509 
Second-generation satellite, on-ground spare32,443 32,443 
Ground component280,267 272,492 
Construction in progress:  
Ground component16,770 19,327 
Other6,089 3,298 
Total Globalstar System1,531,078 1,523,069 
Internally developed and purchased software25,422 23,984 
Equipment11,096 9,679 
Land and buildings1,225 3,110 
Leasehold improvements1,675 1,655 
Total property and equipment1,570,496 1,561,497 
Accumulated depreciation(889,171)(845,588)
Total property and equipment, net$681,325 $715,909 

The ground component of construction in progress includes costs (including capitalized interest) incurred for assets to upgrade the Company's ground infrastructure in certain regions around the world. We expect to deploy these gateway assets based on coverage optimization. The ground component of construction in progress also includes costs associated with the procurement and production of new gateway antennas. During the six months ended June 30, 2021, the Company placed $9.7 million of costs into service associated with these antennas.

Amounts included in the Company’s second-generation satellite, on-ground spare balance as of June 30, 2021, and December 31, 2020, consist primarily of costs related to a spare second-generation satellite that has not been placed in orbit, but is capable of being included in a future launch. This satellite has not been placed into service; therefore, the Company has not started to record depreciation expense.

11


5. LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS 
Long-term debt consists of the following (in thousands): 
 June 30, 2021December 31, 2020
 Principal
Amount
Unamortized Discount and Deferred Financing CostsCarrying
Value
Principal
Amount
Unamortized Discount and Deferred Financing CostsCarrying
Value
First Lien Facility Agreement$97,824 $2,437 $95,387 $186,988 $6,373 $180,615 
Second Lien Facility Agreement246,511 29,867 216,644 230,597 32,125 198,472 
8.00% Convertible Senior Notes Issued in 2013
1,392  1,392 1,376  1,376 
Paycheck Protection Program Loan   4,973 26 4,947 
Total Debt345,727 32,304 313,423 423,934 38,524 385,410 
Less: Current Portion   58,824  58,824 
Long-Term Debt$345,727 $32,304 $313,423 $365,110 $38,524