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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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 001-35176
ent-20200630_g1.jpg
GLOBAL EAGLE ENTERTAINMENT INC.
(Exact name of registrant as specified in its charter)
Delaware27-4757800
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
6080 Center Drive,Suite 1200
Los Angeles,California90045
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (310) 437-6000
Securities Registered pursuant to Section 12(b) of the Act:
Title of each class
TickerName of exchange on which registered
Common Stock, $0.0001 par valueENT*
*On August 4, 2020, the Company’s common stock was suspended from trading on The Nasdaq Stock Market (the “Nasdaq”) because of the Debtors’ (defined below) filing of the Chapter 11 Cases (defined below). Effective August 4, 2020, trades in the Company’s common stock began being quoted on the OTC Pink Marketplace under the symbol “GEENQ.” On August 11, 2020, the Nasdaq filed a Form 25-NSE to delist the Company’s common stock and to remove it from registration under Section 12(b) of the Exchange Act.
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 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ 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
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 Act). Yes No ☑
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
(Class)(Outstanding as of August 12, 2020)
COMMON STOCK, $0.0001 PAR VALUE
3,754,482  SHARES


Table of Contents
GLOBAL EAGLE ENTERTAINMENT INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2020

TABLE OF CONTENTS
Page
EXPLANATORY NOTES
ITEM 1.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 1.
ITEM 6.



Table of Contents
EXPLANATORY NOTES


On July 22, 2020, the Company and 16 of its wholly owned U.S. subsidiaries (together with the Company, the “Debtors”) commenced voluntary Chapter 11 proceedings under Chapter 11 of the United States, (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Chapter 11 proceedings are jointly administered under the caption In re Global Eagle Entertainment Inc., et al. (the “Chapter 11 Cases”), Case No. 20-11835. The Debtors continue to operate their business as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. On July 23, 2020, the Debtors sought and the Bankruptcy Court granted on an interim basis, approval of various “first day” motions containing customary relief intended to assure the Debtors’ ability to continue their ordinary course operations.

On August 10, 2020, Nasdaq announced that it will delist the common stock of the Company and that the Company’s common stock was suspended on August 4, 2020 and has not traded on Nasdaq since that time. The trading of the Company’s common stock has transitioned to the OTC Bulletin Board or “pink sheets” market. The transition to over-the-counter markets is not expected to affect the Company’s operations or business. On August 11, 2020, Nasdaq filed a Form 25-NSE with the Securities and Exchange Commission (the “SEC”) to complete the delisting of the Company’s common stock from Nasdaq, which delisting will be effective ten calendar days later, at which time the Company will cease to file current and periodic reports with the SEC.

2

Table of Contents
PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GLOBAL EAGLE ENTERTAINMENT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share and per share amounts)
June 30, 2020December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$31,255  $23,964  
Restricted cash4,863  498  
Short-term investment3,315    
Accounts receivable, net 66,385  88,219  
Inventories, net24,972  26,695  
Prepaid expenses5,574  6,753  
Other current assets10,513  12,839  
TOTAL CURRENT ASSETS146,877  158,968  
Content library2,825  3,645  
Property and equipment, net116,996  145,295  
Right-of-use assets, net32,797  39,187  
Goodwill137,400  159,607  
Intangible assets, net43,097  55,483  
Equity method investments62,284  78,886  
Other non-current assets25,705  27,509  
TOTAL ASSETS$567,981  $668,580  
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued liabilities$181,679  $178,930  
Deferred revenue8,359  12,317  
Current portion of long-term debt and finance leases810,887  15,678  
Current portion of operating lease liabilities7,265  8,319  
Other current liabilities9,927  7,081  
TOTAL CURRENT LIABILITIES1,018,117  222,325  
Deferred revenue, non-current86  86  
Long-term debt and finance leases16,138  757,384  
Long-term operating lease liabilities20,856  23,636  
Deferred tax liabilities2,496  5,894  
Other non-current liabilities23,146  34,409  
TOTAL LIABILITIES1,080,839  1,043,734  
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ DEFICIT:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, no shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
    
Common stock, $0.0001 par value; 375,000,000 shares authorized, 3,876,801 and 3,837,920 shares issued, 3,754,656 and 3,715,775 shares outstanding, at June 30, 2020 and December 31, 2019, respectively
10  10  
Treasury stock, 122,145 shares at June 30, 2020 and December 31, 2019
(30,659) (30,659) 
Additional paid-in capital821,224  818,961  
Subscriptions receivable(597) (597) 
Accumulated deficit(1,303,146) (1,162,901) 
Accumulated other comprehensive income310  32  
TOTAL STOCKHOLDERS’ DEFICIT(512,858) (375,154) 
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT$567,981  $668,580  

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

Table of Contents
GLOBAL EAGLE ENTERTAINMENT INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Revenue:
Licensing and services$77,457  $145,129  $213,102  $295,607  
Equipment5,584  12,338  14,104  28,479  
Total revenue83,041  157,467  227,206  324,086  
Cost of sales:
Licensing and services67,772  116,308  181,056  239,577  
Equipment4,107  7,909  11,630  18,834  
Total cost of sales71,879  124,217  192,686  258,411  
Gross margin11,162  33,250  34,520  65,675  
Operating expenses:
Sales and marketing4,303  7,365  9,643  15,614  
Product development3,749  6,125  9,712  13,104  
General and administrative24,962  27,161  55,538  55,141  
Provision for legal settlements  25    533  
Amortization of intangible assets6,241  7,800  12,383  15,599  
Goodwill and long-lived asset impairment3,374    25,504    
Total operating expenses42,629  48,476  112,780  99,991  
Loss from operations(31,467) (15,226) (78,260) (34,316) 
Other (expense) income:
Interest expense, net(22,884) (22,329) (45,471) (43,606) 
(Loss) income from equity method investments including impairment losses(2,015) 2,517  (12,873) 4,646  
Change in fair value of derivatives(18)   189  938  
Other expense, net(1,495) (105) (1,263) (284) 
Loss before income taxes(57,879) (35,143) (137,678) (72,622) 
Income tax expense154  3,317  1,280  3,447  
Net loss$(58,033) $(38,460) $(138,958) $(76,069) 
Net loss per share – basic and diluted
$(15.47) $(10.42) $(37.24) $(20.65) 
Weighted average shares outstanding – basic and diluted3,751  3,690  3,731  3,682  

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GLOBAL EAGLE ENTERTAINMENT INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
(in thousands)
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Net loss$(58,033) $(38,460) $(138,958) $(76,069) 
Other comprehensive income:
Unrealized foreign currency translation adjustments41  10  278  243  
Comprehensive loss$(57,992) $(38,450) $(138,680) $(75,826) 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


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GLOBAL EAGLE ENTERTAINMENT INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (UNAUDITED)
(in thousands)
Common Stock Treasury StockAdditionalSubscriptionsAccumulatedAccumulated OtherTotal
SharesAmountShares AmountPaid-in CapitalReceivableDeficitComprehensive IncomeStockholders’ Deficit
Balance at December 31, 20193,838  $10  (122) $(30,659) $818,961  $(597) $(1,162,901) $32  $(375,154) 
Restricted stock units vested and distributed, net of tax29  —  —  —  (61) —  —  —  (61) 
Stock-based compensation—  —  —  —  1,339  —  —  —  1,339  
Impact of adoption of ASU 2016-02—  —  —  —  —  —  (1,287) —  (1,287) 
Net loss—  —  —  —  —  —  (80,925) —  (80,925) 
Unrealized foreign currency translation adjustments—  —  —  —  —  —  —  237  237  
Balance at March 31, 20203,867  $10  (122) $(30,659) $820,239  $(597) $(1,245,113) $269  $(455,851) 
Restricted stock units vested and distributed, net of tax10  —  —  —  (67) —  —  —  (67) 
Stock-based compensation—  —  —  —  1,052  —  —  —  1,052  
Impact of adoption of ASU 2016-02    
Net loss—  —  —  —  —  —  (58,033) —  (58,033) 
Unrealized foreign currency translation adjustments—  —  —  —  —  —  —  41  41  
Balance at June 30, 20203,877  $10  (122) $(30,659) $821,224  $(597) $(1,303,146) $310  $(512,858) 






















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GLOBAL EAGLE ENTERTAINMENT INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (UNAUDITED) (continued)
(In thousands)



Common Stock Treasury StockAdditionalSubscriptionsAccumulatedAccumulated OtherTotal
SharesAmountShares AmountPaid-in CapitalReceivableDeficitComprehensive Income (Loss)Stockholders’ Deficit
Balance at December 31, 20183,793  $10  (122) $(30,659) $814,488  $(597) $(1,009,458) $(119) $(226,335) 
Restricted stock units vested and distributed, net of tax13  —  —  —  (117) —  —  —  (117) 
Stock-based compensation—  —  —  —  2,389  —  —  —  2,389  
Tax effect relating to the beneficial conversion feature of Second Lien Notes—  —  —  —  (2,688) —    —  (2,688) 
Net loss—  —  —  —    —  (37,609) —  (37,609) 
Unrealized foreign currency translation adjustments—  —  —  —  —  —  —  233  233  
Balance at March 31, 20193,806  10  (122) (30,659) 814,072  (597) (1,047,067) 114  (264,127) 
Restricted stock units vested and distributed, net of tax21  —  —  —  (147) —  —  —  (147) 
Stock-based compensation—  —  —  —  2,194  —  —  —  2,194  
Net loss—  —  —  —  —  —  (38,460) —  (38,460) 
Unrealized foreign currency translation adjustments—  —  —  —  —  —  —  10  10  
Balance at Balance as of June 30, 20193,827  $10  (122) $(30,659) $816,119  $(597) $(1,085,527) $124  $(300,530) 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GLOBAL EAGLE ENTERTAINMENT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)

Six Months Ended June 30,
20202019
OPERATING ACTIVITIES:
Net loss$(138,958) $(76,069) 
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization
38,266  43,477  
Amortization of right-of-use asset
4,039  2,557  
Amortization of content library
3,773  3,570  
Non-cash interest expense, net
16,402  14,220  
Change in fair value of derivatives
(189) (938) 
         Change in fair value of equity security investments1,357    
Stock-based compensation
2,180  3,616  
Impairment of goodwill and long-lived assets
26,611    
Tax effect of Second Lien Notes’ beneficial conversion feature
  (2,688) 
Loss on disposal of fixed assets
  357  
         Proceeds from equity method investments3,675    
(Gain) loss on equity method investments including impairment losses
12,873  (4,646) 
Provision for expected credit losses
2,447  830  
Deferred income taxes
(1,911) (624) 
Other non-cash adjustments
  388  
Changes in operating assets and liabilities:
Accounts receivable
14,212  4,992  
Inventories
1,722  (1,420) 
Prepaid expenses and other current assets
1,179  4,087  
Content library
(3,792) (1,647) 
Other non-current assets
1,631  (12,463) 
Accounts payable and accrued liabilities
3,397  11,474  
Deferred revenue
(3,958) 2,378  
Other liabilities
(9,660) 10,521  
Net cash (used in) provided by operating activities(24,704) 1,972  
INVESTING ACTIVITIES:
Purchases of property and equipment(2,142) (13,442) 
Net cash used in investing activities(2,142) (13,442) 
FINANCING ACTIVITIES:
 Proceeds from borrowings on revolving credit facility 44,300  34,650  
Repayment of revolving credit facility
(7,000) (46,250) 
Repayments of indebtedness
(4,094) (10,109) 
Borrowings from related party
5,000  7,350  
 Payment of satellite purchase financing  (2,300) 
Net cash provided by (used in) financing activities38,206  (16,659) 
Effects of exchange rate changes on cash, cash equivalents and restricted cash296  199  
Net increase (decrease) in cash, cash equivalents and restricted cash11,656  (27,930) 

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GLOBAL EAGLE ENTERTAINMENT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (continued)
(In thousands)
Cash, cash equivalents and restricted cash at beginning of period24,462  39,955  
Cash, cash equivalents and restricted cash at end of period$36,118  $12,025  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for: