TerreStar Corp. (TSTR, Financial) filed Quarterly Report for the period ended 2009-06-30.
TerreStar Networks Inc a majority owned subsidiary of TerreStar Corporation plans to build own and operate North America\'s first integrated mobile satellite and terrestrial communications network that will provide universal access and tailored applications throughout North America over conventional wireless devices. TerreStar expects to be the first to offer customer-designed products and applications over a fully optimized fourG IP network. TerreStar Corp. has a market cap of $179.5 million; its shares were traded at around $1.29 .
Our general and administrative expenses decreased by $16.9 million or 56.4% for the three months ended June 30, 2009 as compared to the same period in 2008. The change in the expenses for the three months ended June 30, 2009 are primarily attributed to a decrease of $4.8 million in salaries and benefits resulting from 2008 cost reduction initiative, partially offset by an increase of $1.6 million in stock-based compensation, a decrease of $2.7 million in consulting expense and a decrease of $9.6 million in lab and network costs.
Our general and administrative expenses decreased by $31.9 million or 51.8% for the six months ended June 30, 2009 compared to the same period in 2008. The change in the expenses for the six months ended June 30, 2009 are primarily attributed to a decrease of $9.7 million in salaries and benefits, a decrease of $9.5 million in consultant costs, and a decrease of $13.9 million in lab and network costs, offset partially by an increase of $0.9 million in legal expenses.
The condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. Cash on hand at June 30, 2009 was $112.3 million, including restricted cash. Additionally, approximately $66.7 million remains available under the TerreStar-2 Purchase Money Credit Agreement which is expected to provide sufficient funding to complete the construction of the second satellite, TerreStar-2. We incurred net losses of $112.1 million for the six months ended June 30, 2009, and had an accumulated deficit of $1.2 billion as of June 30, 2009. We expect to continue incurring losses for the foreseeable future. Based on the current plans, we estimate that the outstanding cash and cash equivalents as of June 30, 2009 will not be sufficient to cover the projected funding needs for all of 2010.
Our principal liquidity needs are to meet working capital requirements, operating expenses, and capital expenditure, debt and preferred stock obligations. Our short-term liquidity needs are driven by the satellite system contracts, the development of terrestrial infrastructure and networks, the design and development of the handset and chipset, and ongoing operating expenses. As of June 30, 2009, we had contractual obligations of $108.7 million due within one year, consisting of approximately $78.9 million related to the satellite system, $25.2 million related to the handset, chipset, and terrestrial network, and $4.6 million for operating leases. In addition, TerreStar Europe, a TerreStar Global subsidiary, is seeking an award of S-band spectrum in Europe. If TerreStar Europe is awarded this spectrum, we will need additional funding for TerreStar Global for satellite construction and terrestrial ground network development. We have a redemption obligation towards Series A and Series B Preferred stock of $429.9 million including dividends which, if not converted into shares of our common stock, will be due on April 15, 2010.
Net cash used in operating activities for the six months ended June 30, 2009 was $55.8 million as compared to net cash used in operating activities for the six months ended June 30, 2008 of $108.1 million. The decrease of $52.3 million is primarily attributable to a decrease in operating losses offset by the loss on investment in S
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TerreStar Networks Inc a majority owned subsidiary of TerreStar Corporation plans to build own and operate North America\'s first integrated mobile satellite and terrestrial communications network that will provide universal access and tailored applications throughout North America over conventional wireless devices. TerreStar expects to be the first to offer customer-designed products and applications over a fully optimized fourG IP network. TerreStar Corp. has a market cap of $179.5 million; its shares were traded at around $1.29 .
Highlight of Business Operations:
In conjunction with the Infineon Agreement, on March 31, 2009, TerreStar Networks entered into an agreement with Hughes for additional software development work (the GMR1-3G Software Components Agreement) that will, with the existing Hughes S-BSS Agreement, allow Hughes to deliver the full S-BSS development required with respect to the GMR1-3G air interface to be included in connection with the Infineon SDR technology. SkyTerra has also entered into the GMR1-3G Software Components Agreement. Based on the continued participation of the current Operators, the cost to TerreStar Networks of its portion of the development and software costs incurred under the GMR1-3G Software Components Agreement is approximately $7.9 million. Of that amount, TerreStar Networks expects to pay between $1 million and $2 million during the remainder of 2009.Our general and administrative expenses decreased by $16.9 million or 56.4% for the three months ended June 30, 2009 as compared to the same period in 2008. The change in the expenses for the three months ended June 30, 2009 are primarily attributed to a decrease of $4.8 million in salaries and benefits resulting from 2008 cost reduction initiative, partially offset by an increase of $1.6 million in stock-based compensation, a decrease of $2.7 million in consulting expense and a decrease of $9.6 million in lab and network costs.
Our general and administrative expenses decreased by $31.9 million or 51.8% for the six months ended June 30, 2009 compared to the same period in 2008. The change in the expenses for the six months ended June 30, 2009 are primarily attributed to a decrease of $9.7 million in salaries and benefits, a decrease of $9.5 million in consultant costs, and a decrease of $13.9 million in lab and network costs, offset partially by an increase of $0.9 million in legal expenses.
The condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. Cash on hand at June 30, 2009 was $112.3 million, including restricted cash. Additionally, approximately $66.7 million remains available under the TerreStar-2 Purchase Money Credit Agreement which is expected to provide sufficient funding to complete the construction of the second satellite, TerreStar-2. We incurred net losses of $112.1 million for the six months ended June 30, 2009, and had an accumulated deficit of $1.2 billion as of June 30, 2009. We expect to continue incurring losses for the foreseeable future. Based on the current plans, we estimate that the outstanding cash and cash equivalents as of June 30, 2009 will not be sufficient to cover the projected funding needs for all of 2010.
Our principal liquidity needs are to meet working capital requirements, operating expenses, and capital expenditure, debt and preferred stock obligations. Our short-term liquidity needs are driven by the satellite system contracts, the development of terrestrial infrastructure and networks, the design and development of the handset and chipset, and ongoing operating expenses. As of June 30, 2009, we had contractual obligations of $108.7 million due within one year, consisting of approximately $78.9 million related to the satellite system, $25.2 million related to the handset, chipset, and terrestrial network, and $4.6 million for operating leases. In addition, TerreStar Europe, a TerreStar Global subsidiary, is seeking an award of S-band spectrum in Europe. If TerreStar Europe is awarded this spectrum, we will need additional funding for TerreStar Global for satellite construction and terrestrial ground network development. We have a redemption obligation towards Series A and Series B Preferred stock of $429.9 million including dividends which, if not converted into shares of our common stock, will be due on April 15, 2010.
Net cash used in operating activities for the six months ended June 30, 2009 was $55.8 million as compared to net cash used in operating activities for the six months ended June 30, 2008 of $108.1 million. The decrease of $52.3 million is primarily attributable to a decrease in operating losses offset by the loss on investment in S
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