Good afternoon. My name is Jason and I will be your conference operator today. At this time, I would like to welcome everyone to Virgin Galactic Second Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Hosting today's conference call will be Michelle Clai, Executive Vice President, General Counsel and Secretary of Virgin Galactic.
As a reminder, today's call is being recorded. I would now like to turn the conference over to Ms. Quai. Please go ahead.
Thank you, and good afternoon, everyone. Welcome to Virgin Galactic's 2nd Quarter 2020 Earnings Conference Call. On the call with me today are Michael Kowblazer, Chief Executive Officer George Whiteside, Chief Space Officer and John Campania, Chief Financial Officer, who will provide prepared remarks. Earlier today, we issued a press release and made a slide presentation available on our Investor Relations website, which provides an overview of our business and financial highlights for the Q2 2020. During today's call, we will make certain forward looking statements within the meaning of the federal securities laws.
Forward looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and as a result are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward looking statements in this communication. For more information about factors that may cause actual results to materially differ from forward looking statements, please refer to the earnings press release we issued today and other documents filed by Virgin Galactic from time to time with the Securities and Exchange Commission, including our Form 10 Q for the Q2 of 2020. Forward looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward looking statements.
As I'm sure most of you have seen, today we filed a registration statement on Form S 1 for a proposed underwritten offering of Virgin Galactic stock. Given securities law restrictions around the public offering, we will not be hosting a Q and A on today's call, but we will resume our normal Q and A structure on our Q3 earnings call. With that, I'd like to turn over the call to Michael Koleglazer.
Thank you, Michelle, and good afternoon, everyone. I'd like to start by thanking each of you for joining us today. I hope that you and your loved ones are continuing to stay healthy and safe. Today marks the start of my 3rd week at Virgin Galactic. Over the past 2 weeks, I've been focused on meeting our team and getting up to speed on primary efforts taking place within the company.
I knew this would be the case, but my excitement and my passion about joining this talented team continues to grow each day. I've joined Virgin Galactic from the Walt Disney Company, where I gained over 3 decades of experience developing and growing consumer oriented businesses. Although clearly different companies, Virgin Galactic and Disney Parks have similarities in many respects. Both companies share a central focus on safety. This is built into the engineering, operations, processes and culture here at Virgin Galactic, and this is something I'm very familiar with from my time at Disney.
And like Disney, Virgin Galactic will provide amazing transformational customer experiences. It's the core of what we're offering at Virgin Galactic, and I look forward to working with our team as we proceed with momentum towards commercial service. My priority for this initial onboarding period is to listen and to learn from the talented leaders, engineers and technicians who have led Virgin Galactic to this point in the company's journey. As such, I've asked our Chief Space Officer and Founding CEO, George Whitesides, along with our CFO, John Campania to lead the bulk of today's call. Now let me hand the call over to George, and I will join at the end to share final comments.
Thanks, Michael. Before I begin, I just wanted to say that we feel tremendously privileged that Michael has joined the company. He and I have now been working closely for the past couple of weeks and that has only solidified my view that he is exactly the right person to lead the company through its commercial growth phase. Michael's deep experience building and scaling fantastic customer experiences all around the world will serve this company well. So welcome, Michael, and thank you for joining this incredible team.
Today, we will start our discussion of the quarter by providing a recap on the main areas of progress. We will then provide updates on our flight test program as well as the ongoing impact of COVID-nineteen on our operations and fleet production. We will then discuss our business highlights for the quarter and close by covering new developments in our future business opportunities. John will then provide detail regarding our financial performance. Turning to Slide 4, we achieved a significant number of milestones during the quarter in both our spaceflight operations as well as our advanced development initiatives.
I will provide a short summary here and provide details on each during the call. We conducted a number of successful flights from Spaceport America as we prepare for the next stage of our test program, And we made important progress in our process to gain clearance to FLY paying customers under our commercial launch license from the FAA. We saw strong growth in customer pipeline and stability in our existing customer community. We hosted a virtual event last week to unveil our spaceship cabin, which I hope you all had the opportunity to watch. This morning, we announced a new series of steps in our high speed flight strategy.
And today, I'm excited to be able to share some important news in the development of our commercial orbital spaceflight initiative. All of this has been achieved at the same time as we have had to navigate the inevitable challenges brought on by the COVID-nineteen crisis, which we will cover later on in the call. Turning to Slide 5. In the quarter, flight operations continued to ramp up at Spaceport America and we completed 8 flights between our spaceship and the carrier aircraft. As previously announced and discussed on our last earnings call, on May 1, we successfully conducted our 1st glide flight from Spaceport America.
This was an important milestone for us as it was the first time our spaceship VSS Unity flew freely in New Mexico airspace. During the glide flight, the vehicles climbed to an altitude of 50,000 feet before Unity was released. The spaceship achieved a glide speed of Mach 0.70 and completed multiple test points before touching back down smoothly for a runway landing at Spaceport America. We were also able to complete 6 flights from Spaceport America with our carrier aircraft, BMS EVE during the quarter. These flights provided an opportunity for the pilots and Spaceflight operations team to continue familiarization with the new airspace around Spaceport America and a chance to conduct further pilot training.
We will continue to perform these flights as we lead up to commercial launch. Finally, our team conducted several tests of the ground infrastructure at Spaceport America that will support spaceflight, including a full scale exercise that involved loading the SS Unity with a rocket motor and filling the tanks with propellant and pressurant, a first for us at Spaceport America. Turning to Slide 6. Following our first glide flight from Spaceport America in May, our teams conducted in-depth analyses of the flight data in preparation for our 2nd glide flight, which we successfully completed on June 25. On this 2nd glide flight, the spaceship achieved a faster glide speed of Mach 0.85 after being released from the carrier aircraft VMSE at an altitude of 51,000 feet and it completed multiple test points before touching back down smoothly for a runway landing at Spaceport America.
The pilots performed a series of maneuvers with Unity designed to gather data about the spaceship's performance and handling qualities while flying at higher speeds. This data has been verified against similar maneuvers that were performed in the previous glide flight to enhance aerodynamic modeling. Following the completion of an extensive analysis of the data from this flight, the team has now started preparing for the next stage of our flight test program, powered space flights from Spaceport America. We have several steps to complete prior to and during the final phases of powered flight testing, including review of flight data to prepare the vehicle for the next flight, final modifications to the spaceship customer cabin and detailed inspections of the vehicle systems. Turning to Slide 7 and the FAA approval process.
We have made progress with important aspects of the FAA approval process over the quarter. As we discussed in previous calls, the company has already been awarded its FAA launch license. The license includes a series of elements that must be verified and validated before we are cleared to fly paying customers under the license. I'm pleased to share today that in the second quarter, we were able to clear an additional 3 verification and validation elements, bringing our total cleared up to 27 out of 29. These three elements related to cabin humidity, vehicle landing gear and environmental control systems.
We are continuing to progress towards completing the final 2 V and V elements, which will be one of the goals relating to our next powered flight. Once we complete these remaining elements, we can be approved to fly paying customers to space under our existing commercial license from the FAA. We will also continue our own set of test objectives that we will complete in addition to the FAA's milestones that may involve additional test flights prior to commercial launch. Finally, we are pleased that during the quarter the FAA accepted our Safety Management System or SMS. SMS is a formal systemic approach to managing safety risk, which includes agreed upon procedures, policies and practices and has become standard throughout the aviation industry worldwide.
While not specifically required for our license, we have adopted SMS as an industry best practice. Turning to Slide 8, I'll now provide more detailed information regarding the progress we made during the quarter in our test flight program and look forward at our plans. We are currently preparing the vehicles and operational facilities at Spaceport America for the next test flight. Although we were able to conduct 2 successful glide flights with VSS Unity from Spaceport America during the quarter, our test flight program schedule has been impacted by COVID-nineteen. The COVID protocols that we have put in place have limited the number of people we are able to bring back into the facilities in both New Mexico and Mojave, reducing the pace at which we can work compared to pre COVID.
To help safeguard the progress on the commercial test flight program, we have prioritized staff resources to be aligned here. The glide flights we completed during the quarter have given us a good set of test results regarding operations from our new location at Spaceport America. Those successful glide flights mean that we have baselined our next flight as a rocket powered spaceflight with a crew of 2 test pilots, which we expect to complete this fall. This flight will be carrying payloads as part of NASA's Flight Opportunities Program, the 3rd such flight for the company, which will generate a modest amount of revenue. As always, I flag that our engineers may want to repeat a test point and fly another flight as we proceed through the final stage of flight testing.
Pending a satisfactory review of the data from this fall flight and a checkout of the vehicles, we would then plan to conduct a rocket powered flight to space with a crew of 2 test pilots in the cockpit and 4 mission specialists in the cabin. The primary test objective of this flight will be to evaluate the performance of our full customer cabin and associated hardware as well as procedures and training details. These mission specialists will be company employees specifically trained for these detailed evaluations. Presuming things go as expected on this fully crewed flight, we would then plan to fly Sir Richard Branson on the 3rd powered flight from New Mexico, which we would plan to occur in the Q1 of 2021. Sir Richard is in a unique position to provide the ultimate cabin and spaceflight experience evaluation as the visionary of the Virgin customer experience.
On future earnings calls, we will continue to share progress updates and advise on how results from our ground and flight tests are being incorporated into the schedule. Turning to Slide 9, where I will provide an update on our fleet build program. We've had to adjust many of our manufacturing processes and facility safety protocols to ensure we can continue operating safely during the COVID-nineteen pandemic. Although our team responded swiftly to take proactive steps to keep our team safe and minimize potential disruption to our business, our pace of progress was impacted during the quarter. First, we had a full shutdown of shop floor operations from the middle of March to early April and cautiously restarted operations with small trial work cells.
Thanks to our protocols, we have been able to maintain progress within our manufacturing facility, while enabling many staff to work remotely. The cumulative effect of these new protocols have led to delays in shop floor and engineering work process and have impacted the manufacture and assembly of our 2nd and third spaceships. However, during the quarter, we continue to make progress on key fabrication metrics and preparing our 2nd SpaceShipTwo vehicle for integrated vehicle systems testing, as well as the release of all structural closeout drawings and remaining engineering definitions. Although the COVID protocols have created some delays to our process, we have continued to progress with our fleet expansion efforts and we expect to complete assembly of our 2nd SpaceShipTwo vehicle ready for rollout and commencement of ground testing this year. For our 3rd spaceship, parts fabrication is now over 75% complete and we are expecting to complete assembly and ready the vehicle for testing in 2021.
Turning to Slide 10. Last week on July 28, we unveiled the design of the SpaceShipTwo cabin interior via an exclusive virtual event streamed live on YouTube. Alongside the reveal, we also launched an immersive experience of Virgin Galactic's spaceflight and cabin interior using augmented reality technology that can be accessed by aspiring astronauts and space enthusiasts around the world through a mobile app available to download for free on the App Store and Play Store. We are excited about this milestone and I am in awe of what our team has accomplished with the cabin's stunning design. To allow a profound view from space, 12 windows with soft extended edges are positioned around the cabin for a 3 60 degree awe inspiring view and with the overhead windows pointing towards earth creating a life changing vista.
This includes the use of automated mood lighting in the cabin that harmonizes each phase of flight. Additionally, 16 cabin cameras, plus those in the cockpit and mounted externally, will generate high definition output to provide everything from the first Instagram posts to a beautifully edited and historically significant personal movie. It was an exceptional event and really speaks to our team's creativity in finding ways to share these exciting milestones with all of you while we continue to navigate through these unprecedented circumstances. Turning to Slide 11. During the Q2, we continued to make meaningful progress in the build out of Spaceport America.
Specifically, we completed construction of the 3rd floor customer area, which is where our astronaut training and flight preparation activities will take place. The 3rd floor also includes our customer spaceship training cabin and astronaut lounge. Following completion of the 3rd floor, we were able to receive the certificate of occupancy for the space, which was the last such certificate for the whole facility. We look forward to unveiling this special area to our customers and the media later this year. Turning to Slide 12.
During the Q2, we continued to see steady growth in our sales pipeline, a testament to the demand for our experience and the stability of our future astronaut community. In light of the global COVID-nineteen pandemic, we paused our active marketing campaigns around our One Small Step program in the beginning of the second quarter, but have now restarted this campaign. Despite temporarily suspending our active marketing efforts, we continue to see a positive response as registrants continue to sign up to join our small step community. As of July 30, 2020, we have received over 700 deposit payments for our 1 small step program, a substantial increase since our last earnings call update. In total, this means the number of people who have signed up for our One Small Step community now substantially exceeds the number of future astronaut deposit holders.
It also means that we have more Small Step candidates than the total number of people who have ever been to space. As a result of our strong customer relationships and an active engagement strategy, we also continue to see stability and minimal refund requests from our approximately 600 future astronauts. As I said on our last call, the financial profile of many of our customers helps to limit the impact of economic downturns on our business. I am tremendously encouraged that during this challenging time, almost all of our customer community has continued to stick with us, reaffirming their commitment and belief in our mission. The next decade for Virgin Galactic will be commercially focused and I couldn't be more excited to have Michael on board to lead the company into the launch of commercial service and beyond.
Michael's arrival has enabled me to transition to my new role as Chief Space Officer, which allows me to focus my attention on spearheading Virgin Galactic's efforts for the future business opportunities, leveraging the amazing talent across the organization, which has led us to some exciting early stage progress and development. I would like to share updates on 2 of these advanced development programs. Turning to Slide 14 and our Orbital Spaceflight Initiative. As you will recall, in June, we entered into a Space Act agreement with NASA focused on commercial participation in orbital human spaceflight to the International Space Station, ranging from private citizen expeditions to government enabled scientific research missions. In partnering with the agency via the Johnson Space Center, we will leverage our commercial expertise and industry knowledge to help develop a program for private astronaut missions to the ISS, including identifying interested candidates, arranging transportation to the International Space Station and managing on orbit and ground resources in support of the mission.
We will contribute end to end program management and integrated astronaut training packages for private passengers tailored to meet the needs for a commercial orbital spaceflight experience. As part of this, we will offer our existing space training infrastructure at Spaceport America and customized future astronaut readiness program, which will play an important role in training private astronauts for orbital travel, allowing these private astronauts to become familiar with the environment in and on route to space such as g forces and 0 gs. This initiative has been largely driven by the considerable demand among our existing about their about their opportunity to put down a significant refundable deposit to demonstrate their interest in the orbital space experience. Being existing customers, these individuals will also have the unique opportunity to train for their orbital spaceflight using their suborbital spaceflight, a connection that NASA has itself recognized in its recent initiative to consider suborbital spaceflights for its research employees and astronaut core. I am very pleased to share today that since our NASA Space Act announcement, we have entered into deposit agreements for orbital space flights with 12 customers.
We have not yet set final pricing for the Orbital Spaceflight experience, but we expect pricing to be competitive with other offerings in the market and with the premium service and training that people expect from the Virgin Galactic brand. We are thrilled to be partnering with NASA on these efforts and we look forward to helping grow another market for the new space economy, driven by a greater demand for use of the International Space Station for scientific and technological research and development, commercial activity and international collaboration. Turning to slide 15. We have discussed high speed travel as a longer range opportunity for the company for some time and I'm excited to report on some important progress in this area. Earlier today, we made an announcement unveiling the initial design concept for our high speed vehicle effort following the completion of our mission concept review phase.
Our initial designs are based on the following parameters. A targeted Mach 3 certified delta wing vehicle, a cabin design that would accommodate from 9 to 19 passengers flying at an altitude above 60,000 feet and a vehicle design that aims to help lead the way towards state of the art sustainable aviation fuel. To support the design process, we have signed a non binding memorandum of understanding with Rolls Royce to facilitate further collaboration on the development of sustainable cutting edge propulsion systems for this type of aircraft. As a leader in the technologies that deliver clean, safe and competitive solutions to the planet's vital power needs, Rolls Royce has a proven record of delivering high mock propulsion, powering the only civil certified commercial aircraft, the Concorde, capable of supersonic flight. The design philosophy of the aircraft is geared around making high speed travel practical, sustainable, safe and reliable, while making the customer experience a top priority.
We are designing the aircraft for a range of operational scenarios, including service for passengers on long distance commercial aviation routes. The aircraft would take off and land like any other passenger aircraft and integrate into existing airport infrastructure and international airspace around the world. We're also working closely with international regulatory communities to ensure compliance with the highest safety and environmental standards. The FAA Center For Emerging Concepts and Innovation has reviewed the project direction and authorized FAA Resources to work with the Virgin Galactic team to begin the outline of a certification framework during the pre project guidance phase. We believe that baselining sustainable technologies and techniques into the aircraft design early will also act as a catalyst to the adoption of sustainable practices in the rest of the aviation community.
The announcement today leverages and builds on the Space Act agreement we entered into with NASA in May to facilitate the development of high speed technologies over the coming years. Turning to Slide 16. We're excited with the progress we have made in a relatively short time and on a personal level, I'm thrilled to be able to devote my efforts and time to this area as we work on opening up a new frontier in high speed travel. We believe that high speed point to point travel will revolutionize the way we move about the planet and cut travel times drastically. Importantly, according to our analysis, a Mach 3 vehicle has the potential for travelers to do a round trip in one day between 85% of the most frequently traveled global city pairs.
This project is a long term effort and this is just the start, but we have hit the ground running. On this slide, we have laid out a high level roadmap to give some context on what is ahead. Turning to Slide 17. We believe that Virgin Galactic is well positioned competitively to be a leading player in the high speed market. We are the only company in the world to have flown a non pilot crew member in a winged vehicle at Mach 3 plus and we plan to continue to collect large amounts of relevant data from our flight program.
We have a strong team in place with a vertically integrated design, development, manufacturing and test capability and we are excited about the prospect of complementing those strengths with the capabilities of Boeing, NASA and Rolls Royce. Finally, we are excited about the experience we can offer customers by leveraging the service design we have built up for our core product. We have unique advantages in this area and I look forward to sharing more updates with you in the future. I would now like to turn the call over to our CFO, John Campania, who will provide details about our Q2 financial results.
Thanks, George. Looking at Slide 19. Our Q2 results reflect our ongoing work as we prepare for commercial launch. We remain in a strong cash position and ended the quarter with cash and cash equivalents of $360,000,000 on our balance sheet as of June 30, 2020. Net loss for the quarter was $63,000,000 compared to a $60,000,000 net loss in the Q1 of 2020, our 1st full quarter as a public company.
Non GAAP SG and A expenses and non GAAP R and D expenses have been adjusted to exclude stock based compensation. GAAP SG and A expenses for the quarter were $26,000,000 compared to $27,000,000 in the Q1 of 2020. Non GAAP SG and A expenses for the quarter were $23,000,000 which was consistent with the Q1 of 2020. GAAP R and D expenses for the quarter were $37,000,000 compared to $34,000,000 in the Q1 of 2020. Non GAAP R and D expenses for the quarter were $35,000,000 compared to $33,000,000 in the previous quarter.
Adjusted EBITDA, which excludes stock based compensation, totaled negative $54,000,000 This is compared to adjusted EBITDA of negative $53,000,000 in the Q1 of 2020. Cash paid for capital expenditures was $6,000,000 in the Q2 of 2020 compared to $4,000,000 in the Q1. Capital expenditures in the 2nd quarter consisted primarily of vehicle tooling costs and investments in Spaceport America as we continue to prepare that facility for commercial operations. Turning to Slide 20. I'd like to take some time to run through some of the line items in our income statement to provide more context on the drivers behind some of those numbers.
As you know, our primary focus is executing on our test flight program and ensuring the safety of our workforce given the challenges associated with the COVID-nineteen pandemic. As a result, we did not generate any revenue during the quarter and we anticipate modest revenue during the remainder of the year given our continued focus on these areas. Turning to R and D. As a reminder, our vehicle costs currently sit within R and D and will continue to be expensed there until we achieve technological feasibility. While subject to change, we anticipate achieving technological feasibility once we have completed a power test flight to space with 4 mission specialists in the cabin.
At the point of achieving technological feasibility, we will begin to capitalize our vehicle costs. Our R and D expenses for the quarter totaled 37,000,000 dollars an increase of $3,000,000 compared to the Q1 of 2020, primarily due to an increase in allocation of facility costs from SG and A to R and D as a result of the transition of our vehicles to New Mexico as well as an increase in personnel costs. Our SG and A expenses for the quarter totaled $26,000,000 a decrease of $708,000 compared to the Q1 of 20, primarily due to the aforementioned facility cost allocation to R and D. Turning to Slide 21 and looking at the cash flow statement. The decrease in cash and cash equivalents over the quarter totaled $59,000,000 which was generally in line with Q1 cash burn.
Although we are not providing specific guidance as we noted last quarter, we continue to believe this is an approximate indication of our ongoing cash burn with the incremental public company related costs. However, there may be some strategic initiatives that we decide to invest in that may lead to an increase in our burn rate. Cash paid for capital expenditures increased from the prior quarter by $2,000,000 to $6,000,000 Capital expenditures for the quarter were primarily attributed to continued investments in Spaceport America, operational readiness and vehicle tooling costs. I would now like to turn the call back over to Michael for some final remarks.
Thanks, John. I'd like to spend a few moments briefly recapping our next steps. As we navigate through these unprecedented times, our number one priority remains the health and safety of our employees and their families and the communities in which we operate. As George mentioned earlier on the call, we expect to advance to the next phase of our test flight program by conducting the 1st rocket powered spaceflight from Spaceport America this fall. After that flight, we will conduct a second powered flight from Spaceport America, which is expected to include 4 mission specialists in the cabin.
In addition to conducting a variety of functional tests within the cabin, these specialists will help us block and choreograph the ways we will capture and cover Richard Branson's history making flight. If all goes as expected on this fully crewed flight, we would then plan to fly Sir Richard Branson on the 3rd powered flight from Spaceport America, which we anticipate will occur in the Q1 of 2021. As always, safety will remain our central focus and we will continue to progress with a step by step diligent approach throughout the test flight program as we prepare for commercial service. As such, our schedule may adjust as we process data from each of our test flights. Before we close the call, I'd like to recognize and congratulate George on successfully bringing us to this inflection point in Virgin Galactic's journey towards commercialization of human spaceflight.
I'm incredibly excited to work with George and the team as we develop our advanced technology efforts, including our participation in the commercialization of orbital spaceflight and our work in high speed travel. Thank you everyone for joining today's call. We appreciate your interest and support. We look forward to sharing more with you on future earnings calls.