Good afternoon everyone and welcome to NextNav's First Quarter 2022 Earnings Conference Call. Participating on today's call are Gary Parsons, NextNav's Chairman; Ganesh Pattabiraman, NextNav's Co-Founder and CEO; and Chris Gates, NextNav's Chief Financial Officer. Before we begin, please note that during today's presentation, the company may make forward-looking statements, either in our prepared remarks or in the associated question-and-answer session. These statements which involve risks and uncertainties relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable and may also relate to NextNav's future prospects, developments, and business strategies. In particular such forward-looking statements include statements about NextNav's position to drive growth in its 3D geolocation business and expansion of its next generation GPS platform, the business plans objectives, expectations and intentions of NextNav, NextNav's partnerships, and the potential success thereof and NextNav's estimated and future business strategies, competitive position, industry environment, and potential growth opportunities. These payments are based on current expectations or beliefs and are subject to certain risks and uncertainties that may cause actual results to differ materially. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside NextNav's control that could cause actual results to differ materially from the results discussed in forward-looking statements. These risks, uncertainties, assumptions, and other important factors include, but are not limited to the ability of NextNav to continue to gain traction in key markets, with notable platforms and partners, both within the U.S. and internationally; the ability of NextNav to grow and manage growth profitably, maintain relationships with partners, customers, and suppliers, including with respect to NextNav's Pinnacle 911 solution and its TerraPoiNT network, and the ability to maintain its management and key employees; the ability to maintain balance sheet, flexibility and generate, effectively deploy capital in line with its business strategies; the possibility that NextNav may be adversely affected by other economic business and/or competitive factors, including the impact of the ongoing COVID-19 coronavirus pandemic; other risks and uncertainties indicated from time-to-time documents filed with the Securities and Exchange Commission by NextNav. New risks and uncertainties arise from time-to-time, and it is impossible for us to predict these events or how they may affect us. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. And NextNav undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise. Risk factors that may impact our performance are identified in our most recent SEC filings. Following our prepared remarks, the company will host an operator led question-and-answer session. In addition, at the conclusion of today's call, a replay of our discussion will be posted to the company's Investor Relations website. With that, I'll turn the call over to NextNav Chairman, Gary Parsons. Please go ahead.

Thank you very much, operator and welcome, everyone, to NextNav's First Quarter earnings conference call. We're pleased to be here and to provide you an update on the business and of course, since we actually recently only spoke with many of you a few weeks ago, on our fourth quarter call, I'll keep my overview and strategic comments fairly brief. Joining me on the call today as you heard is NextNav's CEO, Ganesh Pattabiraman and NextNav's CFO, Chris Gates. To start the call, I'm going to provide a quick overview of the quarter, and then I'll pass it off to Ganesh, and he'll offer a review of some of the more recent operational highlights. Chris will then wrap-up the call with a look at the financials and we'll then open it up for Q&A. As you will hear today NextNav is off to a solid start in 2022. We built excellent momentum off last year, we delivered continued execution against our strategic plan in the first quarter. As Ganesh will discuss in greater detail, we expanded our partnership network in key areas such as E911 and gaming for our Pinnacle service. We also added a new vertical when we've talked about in the past, but really added something in the IoT or Internet of Things transportation space, with an agreement with Last Mile Technologies. As you'll hear more about this in a minute, this partnership is a great example of how the platform we've built, the ubiquitous, resilient, location services can now continue to meet the needs of multiple industry verticals. We're also continuing to make progress on our TerraPoiNT build out. Notably, we continue to hold really detailed and earnest conversations with government officials as interest in protecting critical infrastructure and PN&T or Position, Navigation, and Timing systems gains traction, along with the devastating war in Ukraine, which we've all talked about, I guess, we spoke about on the last earnings call. We told you last quarter that both the U.S. and European government officials remain highly engaged in discussions around what are now becoming very apparent vulnerabilities of GPS, and then find solutions to meet this growing concern. We're beginning to see promising signs in terms of government interest, particularly, as they contemplate how to deal with Russian interference with GPS in Europe and elsewhere. Since we last spoke, budgets in the United States have been finalized and money has been allocated to areas that are of importance to our business. The fiscal year 2022 budget approved by the U.S. Congress includes ramped up funding for the Department of Transportation to examine next steps following their 2020 technology assessment, which we've spoken about in the past. Both DHS and DoD also secured designated funding, much of which was specifically allocated or targeted towards ensuring GPS resiliency. And we also saw the Open PNT Alliance, of which we are a member, this month publicly recognize the government's growing interest in PNT Services. Today, we remain fully engaged with all of these efforts and assessments and expect to be an integral part of the government's roadmap to address these concerns. And of course, I would also be remiss if I didn't remind you, of course, the government funding and the full budgetary process through Congress is a drawn-out affair and it does not produce quick results. Our VP of Government Affairs, Ed Mortimer is closely involved in the ongoing discussions, ensuring our interests remain top of mind. Because of the momentum we've built thus far and knowing that this isn't a quick process, we're taking a further look out into next year's budget process as well, to ensure that these key topics remain in the conversation. So with that, let me turn the call over to Ganesh to provide you with the details about the quarter's progress. Ganesh?

Thanks, Gary. Good afternoon, everyone, and welcome to our first quarter earnings call. We're pleased with the current state of our business and are eager about the opportunities ahead. In the first quarter, we continued to build on the strong foundation we established last year, securing several new partnerships while advancing our Pinnacle and TerraPoiNT Services. Let me start by discussing some key announcements, beginning with the Pinnacle Service. We are strengthening our leadership in the public safety sector. In January, we announced a partnership with a major wireless carrier to provide vertical location data for emergency calls to public safety access points. This foundation allows us to make information more actionable for PSAPs and dispatchers by collaborating with platform providers that facilitate the service. We're thrilled about our growth in public safety as key players in the ecosystem adopt our Pinnacle Technologies, enabling visual representation of access vertical information that is both understandable and actionable for PSAP operators, including an altimeter view to display three-dimensional data on a two-dimensional map. We announced deals with GeoComm and Next Generation Advanced 911 recently. GeoComm is a leader in map data and location intelligence for public safety. Their systems convert raw positioning data from wireless carriers into actionable locations, including details like building names and street addresses, and can present vertical location information for 911 calls made from multi-story buildings. Next Generation Advanced 911 is a rapidly growing cloud platform that provides modern 911 handling solutions for major clients in California and Nevada. Their clients can now display vertical information and incoming call data in both 2D and 3D formats, enabling greater confidence for first responders in emergency situations. I'm also pleased to report that our large E911 Carrier Integration Project is on track, with device rollouts for access capabilities expected later this year. Overall, we feel optimistic about the progress of this project. As you can see, we continue to lay a solid foundation in the public safety market and aim to identify more opportunities moving forward. Additionally, we are expanding into the gaming and Metaverse sectors. We are working in augmented reality, where we see significant opportunities for best-in-class location authentication and vertical location services in this emerging market. Following our partnership with echo3D, we recently teamed up with Widow Games, a development company bridging the physical and digital realms. They are incorporating NextNav's 3D geolocation capabilities into their application, allowing for more immersive virtual experiences linked to users' real environments and utilizing location verification for transactions and interactions in the Metaverse. Our technology enables the authentication of location in the Metaverse using vertical location, preventing issues like location spoofing and facilitating unique gaming experiences and augmented reality that vary by floor levels. Pinnacle Technology will be integrated into Widow Games' flagship title, GEOPOLY, which involves buying, upgrading, and selling digital properties tied to the real world in real-time virtual events. Our technology assists in validating users' locations, including vertical dimensions and timestamps, which helps authenticate attendance, verify transactions, and prevent location-based spoofing within the game. Through geofencing and geolocation, we provide organizations the ability to offer location-based virtual experiences and rewards, confirming users' presence at virtual events and enabling interactions with others nearby. Lastly, as we've previously discussed gaming and public safety, we're making strides into other relevant areas where our technology can assist businesses in growth and diversification. One exciting area is IoT. We recently announced a partnership with Last Mile Technologies, which provides services for asset movement and sensor event analysis to enhance vertical location capabilities in asset tracking solutions. Last Mile collaborates with numerous key providers to enable IoT services. Given the explosive growth of e-commerce during the pandemic, we view this partnership as a natural progression for expanding the Pinnacle use case. It enables organizations to visualize and understand the three-dimensional movement of critical assets through various technology platforms, enhancing operational security and data-informed decision-making without the need for costly on-premise infrastructure. Beyond these developments, we have additional partnerships in various stages of growth that we’ll keep you informed about as they progress. Now, moving to TerraPoiNT, we are making good progress towards launching this technology. Expenditures for 2022 are expected to be modest as we optimize commercial transmitter designs, select sites, and plan our network. Our robust balance sheet and licensed spectrum holdings give us control over the pace and scope of these activities from both a capital and technology perspective. We are noticing increasing government interest in addressing vulnerabilities in GPS and location services because of recent global events. We are actively engaging with officials in the U.S. and internationally, and we hope to be a key player in these initiatives. As mentioned last quarter, we are partaking in the European Commission's Joint Research Center for Alternate Positioning Navigation and Timing evaluation in Ispra, Italy. On May 18th, we will showcase our technology to European Union officials during their Demo Day. We anticipate a full report from Ispra, similar to the Department of Transportation's demonstration, to be released later this summer, and we will keep you updated on our performance as more information becomes available. In addition to the Ispra demonstration, Ed Mortimer, our VP of Government Affairs, and I will be traveling to the UK and European Union next week to engage senior government officials on PNT resilience. I'm also excited to share that I've been invited by NASA to speak at a Position Navigation and Timing Workshop on May 25th, where I will address current PNT needs and how technologies like NextNav’s can address those today and in the future. This is just one of many collaborative efforts we have with NASA, and I'm eager to continue our partnership. Now, I'll hand it over to Chris for a look at our financials. Chris?

Thank you for joining us today. We're excited to share our progress in the first quarter and discuss our outlook for the rest of the year. Our top line reflects the early results from customers and platforms we signed in 2021. In the first quarter, we reported GAAP revenue of $1.2 million, with an operating loss of $16 million for the quarter. This includes about $900,000 in depreciation and amortization and $7.2 million in stock-based compensation expense. Our net loss for the period was $9.7 million, which includes a non-cash income impact of $6.4 million related to changes in the fair value of our warrant liability. Our total operating expenses were $17.2 million, which again accounted for $7.2 million in non-cash stock-based compensation and $900,000 in depreciation and amortization. Our balance sheet remains strong with no debt, and we ended the quarter with $93.8 million in cash, giving us significant capital and flexibility as we move through 2022 and beyond. Looking ahead, we remain optimistic about the adoption of our service, and as highlighted earlier, we see this expansion continuing. We are also pleased that the implementation of our service with our first national wireless carrier customer for E911 is on track. However, we want to remind investors that as we scale our service, there may be fluctuations in our revenue due to the time required for adoption and the significant influence of a few large customers, including E911, during our transition to larger operations. We anticipate finishing 2022 with a meaningful revenue run rate, subject to variability from significant platform contracts, integrations, and other customers, including 911 and potential government contracts. We have a strong foundation for our business, including our national network, 2.4 billion megahertz spectrum asset, unique intellectual property, and our solid balance sheet. Although we're closely monitoring inflation and expect some increase in employee and equipment costs, we do not foresee these changes having a material impact at this time. We are also vigilant about potential supply chain issues and are extending our timeline for preordering certain long lead components. Now, I’d like to open the floor for your questions.

Our first question will come from Timothy Horan with Oppenheimer. Please go ahead.

Hi everyone. I have a few questions. Could you provide an update on your international traction across various countries? Additionally, do you believe you are on track, ahead, or behind your initial expectations? Lastly, could you give us some insight into the revenue run rate you mentioned for the end of the year, and perhaps elaborate on all three points? Thank you.

Let me address some of your questions, and we'll also hear from Chris about run rate expectations and other related topics, though we are not providing guidance at this moment. This is primarily due to the early stage of fluctuations we are experiencing, which come with variability tied to large contracts and platform integrations. During our first call post-IPO, I indicated that as we look into 2022, we expect to see increased platform adoption, new partnerships, enhanced marketing efforts, and an ability to effectively enter sectors like public safety, gaming, and IoT. We are particularly pleased with the developments we are witnessing from the government, although these have not yet translated into identifiable government contracts. In terms of our international efforts, I'll pass it over to Ganesh. We are working closely with MetCom in Japan, and progress is looking positive. As Ganesh pointed out, there is a growing recognition of our initiatives in Europe, and we are eager to expand our presence there as swiftly as possible. Ganesh?

Yes, Gary. I think, Tim, on the international front, we are certainly seeing increased activities in Europe and the U.K. aimed at enhancing their PNT capabilities. This is part of the reason why Ed and I are going there to meet with some officials, as we see significant developments taking place. Along with the debt trial in RV technology reevaluation at Ispra, we believe this will lay the groundwork for a larger initiative in Europe and the U.K. to support these capabilities. In Japan, we are quite pleased with the progress our partner MetCom is making in that market. We expect to have further announcements later this year regarding their performance. Overall, we see positive developments both in terms of the spectrum being allocated to MetCom by the Japanese government and the progress of the Pinnacle rollout, along with ongoing trial activities.

Hey, Ganesh, we should mention that while we often focus on the issues in Europe and Ukraine related to critical infrastructure and government interest in TerraPoiNT for backup GPS resiliency, there is significant international interest in the Pinnacle side as well. We are in discussions with several countries about how they could utilize the Pinnacle service, which does not require a spectrum asset to get started. Additionally, we expect progress with the Pinnacle Services in Japan through our partner MetCom. Would you like to add anything else?

I don't think, Gary, I think you captured it pretty well. I think one of the things to keep in mind as part of the reason we're a little cautious about providing, especially quarterly specific concepts is you get a deal that moves the quarter or even a few months if it's closing at the end of the quarter, it can have a meaningful impact. So, we are seeing appetite. We are signing customers and we are seeing our revenue base and customer base underneath that growing. We still want to maintain a little bit of caution in terms of specificity in that direction, really, for that reason.

Yes, I understand, Chris, I was just wondering if you can give us some color on the run rate at the end of the 12 months or 18 months or I know you said a material runway, just any more color around what you meant by that?

I don't think we can provide that information at the moment, but we recognize the strong interest in it. We want to avoid offering something that might not align with our business direction. It's important that when we do share expectations formally, they are well-founded and clear regarding timing and scope.

Okay. And then lastly, for me, are the partnerships, the economics and the partnerships and the setup of the partnership. So they kind of falling in place how you expected, are they better? Are they worse? But yes, any call around, but you have a lot of them?

I think you Ganesh, you want to do want to get into?

Yes, yes, I can provide. I mean, I think the Tim, in the categories that we defined for public safety, gaming, and IoT, I would say, it's largely consistent with the frameworks that we've talked about. I will say that in the public safety aspect, we are seeing product expansion. And so, the altimeter view that we talked about provides a visualization capability for the desktop side, and they're just slightly different model. But, but it is.

It's richer and more positive for us on that front than what it did for game sponsors.

It is because it's on the desktop side, making it a higher value. It also operates on a per-seat or per-user, per-month model, similar to an MOU, but with larger dollar amounts involved. We all feel optimistic about this aspect, as it indicates growth in one of the segments as we integrate more deeply into those platforms.

Yes, overall, the types of workers in public safety, even in non-public safety environments, seem to align with the trends we're observing from the 911 contract, which we have discussed previously. I believe these elements are progressing well. However, we need to increase volume in data analytics related to advertising and marketing, as those typically require higher volumes before becoming economically viable. We are still assessing that area, but we have no reason to believe that it won't follow the trends we have observed.

Thanks, guys.

Your next question will come from the line of Mike Crawford with B. Riley. Please go ahead.

Thank you. What were your customer bookings and customer billings in the quarter? Is that something you intend to provide consistently? Or was that just a one off last quarter?

Hey, Mike…

Chris, you want to get that one.

Yes, this is Chris. I think we plan to provide this information on an annual basis, but probably not quarterly, due to the inconsistencies we mentioned earlier. We believe it gives a good overview at the end of the year of what happened throughout the entire year, but I don't expect to provide it on a quarter-to-quarter basis.

Well, given that one customer was 97% of revenue in the quarter, and receivables went to almost zero. Can we assume that bookings and billings were extremely low in the first quarter?

We did collect significant accounts receivable in the quarter, and there were not large billings for the period. That is correct.

Okay. Maybe just one more…

Sure, sure, Mike. And I also say that if we get into any of these government contract type things. We'll also try to at least when we recognize what those are or tell you what those contracts might be. It'll be important to say over what period of time we expect them to go because then that'll give you a feel for how the flow of the actual revenue will run. So we'll hopefully do that if there are any one-off like that. But other than that, I think the yearly or annual basis is probably the best way to do it.

Yes, Gary, especially with milestone-based payments. Yes, that becomes part of the consideration. So we wanted to give a little bit of a forward look into, into what we had done in the fourth quarter. And then as we kind of work through the first quarter, of course, we've been delivering against some of those activities. One may imagine that there would be milestone-based payments that are yet to emerge. Be as we take some of those products into service.

Yes. And Mike, you said you had another one?

Yes, I have a couple related to the business, but just first, stock-based comp was high 7 million in the first quarter, is there an expectation that that's going to get back down to like, a million a quarter? Or what should we be thinking about that for this year in the future?

Yes, that amount is going to decrease. It was essentially a one-time annual recognition. With new hiring and periodic stock-based compensation, we will ensure to keep reporting on it, as we believe it’s important for understanding the cash impact on our financials and what our actual cash operating expenses are. However, we do not expect that level of stock-based compensation to be repeated.

Not repeated in, say, Q1 next year, either?

That I don't it's hard to look that far into the future, frankly, on the line that matter, because it's subject to so many assumptions.

Well, while there is a big assumptions how many people we're adding to the headcount, as we're ramping the business that will have some, obviously, some impact on that as well too.

Alright, and just turning to more pleasant matters. So on TerraPoiNT you're optimizing your commercial transmitter design, and network planning. So what do you mean optimizing it for supply chain? Or to lower the BOM? Or what do you what exactly you're doing there?

Hey, Ganesh, you want to get that, because it's packs a number of different things.

Yes. It is a variety of factors, I mean, it is taking into account sort of the, some of the changes in sort of the supply chain. It is also for ensuring the form factor etc. are small enough from a cost perspective. And so it's a variety of those factors that are continuing to occur, obviously, I think I think we gave you that update just two months ago. So I think the point is that that process is continuing right now it's not completed. And we expect that to, again, get finalized throughout the rest of the year, along with the network planning and sort of the market assessment, that is also a parallel set of activities that are going on.

And then, thank you. And then you mentioned the 2.4 billion megahertz pops of low band spectrum you have in the U.S., but of that eight megahertz holdings. You really need five to enact your TerraPoiNT plan. So are you taking or what should we expect should be the next steps that you take to maybe look to get some additional value out of the other three megahertz spectrum? The other 900 million megahertz pops or spectrum?

Let me let me address that, Mike, because that's probably not something we can talk about right now, at this point. We're not just at a stage where we think that's the appropriate comment. We certainly look at it very heavily and are exploring a number of different options on that front. But right now, it's more important for us to get the initial product rolled out on it. So that's solid for the five megahertz. And, well, that's one of those announcements where you'll just have to get it when you get it. We don't want to foreshadow anything.

Okay. Thank you, Gary. Thank you, everyone.

The one question will come from the line of Jaime Perez with RF Lafferty. Please go ahead.

Good day, everybody. Thanks for taking my question. You mentioned the headcount. And I know you have a few projects. You need to increase headcount to get some of these projects for Pinnacle rolled out. Are you going to be subcontracted not doing the work yourself for some of these projects?

Are you referring to the headcount increase for the projects?

Thanks, Ganesh.

Yes, Jamie. Are you referring to sort of some of the product expansion stuff that we've talked about?

Well, like the E911 products?

Yes, no we're fully staffed for that those types of projects. Currently, I mean, all the time customers, we don't anticipate, we're not waiting on headcount to deliver on them. I think where you see, our headcount increasing is really on some of the business development, sales enablement, customer support types of factors, because that's where we're obviously gearing up for sort of the volume of customers that we anticipate, and also the new verticals and markets that we are going after. So I think that's really where a lot of our expansion is. And so for the products, and that, and the customers that we have signed, etc. I mean, that's, that's some of the beauty of the system is, is the platform more or less remains the same. It's the same SDK and API for a lot of the gaming and IoT types of applications. 911 is a slightly different beast. And that's where there's a large integration. And, and of course, that's where we are able to charge and then our E that goes with it, but those projects are well staffed, and we have no sort of are waiting for any hires to execute on them.

Yes, Jamie, regarding your question about outsourcing, if you look at several partnerships and platforms that we announced in public safety, we could have chosen to develop that application ourselves. However, we are focused on supporting those who are already offering mapping services and CAD software to public safety dispatchers. We aim to assist them in using our tools effectively to create a high-quality product. Our strategy is to leverage existing platforms and partnerships instead of building that product in-house.

Alright. So I've got to understand this, basically, you're going to support it. Basically, you have what it takes to support the developers and integrate your product into their application. Yes, that's all right. Now, as far as the Last Mile technology, is this that, what's NextNav? Is it going to be replaced? The old RFID chips that you put on shipping containers there's no those were only two dimensions, you have a three-dimensional application? Is that the end goal, the end game to be able to?

I mean, I would say broadly, I guess, Jamie, that, I think, in a lot of these cases, what we're providing is complimentary capabilities to allow for the third dimension to be enabled. In the Last Mile technology case, specifically, there they are using primarily LTE and Sigfox types of technologies, along with the GPS, etc. So they're, we're providing the third dimension to that platform and what is important is that platform actually gets into a lot of different types of asset tracking types of applications that you talked about. It is certainly hospital that some of these markets and verticals, they are, RFID given that expense and large localized infrastructure. There are folks that we're in discussions with who liked the idea of an infrastructure-free deployment and enablement of IoT tracking types of situations. And so I think that may happen over the natural course of time. Certainly, that's a possibility.

You mentioned the market data, and it's something that you desire to get to any other end markets. That's interesting, like defense, automotive, that might be something of that sort of send next snap to next level?

Oh, yes. I mean, so we are, again, in discussions and working with many of those verticals. In terms of the automotive or the drones and EV types of use cases, I mean, that we are continuing to see lots of different partners wanting to leverage our technology to enable that capability, because again, they need that reliable position navigation timing service in the urbanized areas. And so I think we're seeing good momentum there and, of course, over time, we will announce those and continue to see traction there.

Now, some of these are partnerships you just announced during the quarter? Or they signed contracts? I mean, what's the terms on those contracts as far as the durations? And are they one-time fees or licensing fees?

Yes, I don't know if we can specifically talk of specific contracts, I will say they are consistent with the frameworks that we've talked about in the past in terms of, in the public safety arena, it may be a monthly active user type of model, or as I just mentioned, in the desktop side, it's essentially a per seat type of model. And similarly on the gaming side, on the IoT side, it varies a little bit on, depending on the application to a perfect type of per API request type of model to something that's more active usage. So I think all of those frameworks remain consistent with what we talked about in the past. We don't see significant deviations there.

Alright. That's all the questions I have. Thank you for taking my questions.

Thanks, Jamie.

There are no further questions at this time. I'll turn the conference back over for any closing remarks.

Thank you very much, operator, and to everyone who has dialed in to listen. It has been a challenging marketplace for everyone lately, and we hope to see some of these impacts ease over time. Despite this, we are continuing to advance our strategy. Every action and reaction we observe in the marketplace reinforces our belief that we are on the right path. There is a strong acceptance of our services and capabilities, including the z-axis capabilities and the comprehensive TerraPoiNT backup and resilient GPS 3-dimensional location services. These elements remain central to our story. We need to ensure that these platforms become operational so we can scale effectively, allowing us to capture the revenue that corresponds to the significant opportunities ahead. We look forward to updating you again on next quarter’s call. Have a great day.

Ladies and gentlemen, that does conclude today's call. Thank you all for joining. You may now disconnect.