Good afternoon, everyone, and welcome to NextNav's Second Quarter 2023 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. In particular, such forward-looking statements may include statements about NextNav's business plans, objectives, expectations and intentions to drive growth in its 3D geolocation businesses and expansion of its next-generation GPS platform, to maximize the value of its IP portfolio spectrum, its international business as well as NextNav's partnerships and the potential success thereof, NextNav's estimated and future business strategies, competitive position, industry environment and other potential growth opportunities. These statements are based on current expectations or beliefs. However, 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 the forward-looking statements. These statements may relate to, but are not limited to, expectations regarding our strategies and future financial performance, including future business plans or objectives, expected functionality of our geolocation services, anticipated timing and level of deployment of our services, anticipated demand and acceptance of our services, prospective performance and commercial opportunities and competitors, the timing of obtaining regulatory approvals, commercial partnership acquisition and retention, products and services, pricing and marketing plans, our ability to realize the anticipated technical and business benefits, associated acquisitions and any subsequent mergers, acquisitions or other similar transactions, factors relating to our future operations, projected capital resources and financial position, estimated revenue and losses, projected costs and capital expenditures and expectations about international markets. Projections of market growth and size, including the level of market acceptance for our services, our ability to adequately protect key intellectual property rights or proprietary technology, our ability to maintain our location and monitoring service, LMS licenses and obtain additional LMS licenses as necessary. Our ability to maintain adequate operational financial resources, including for research and development or raise additional capital or generate sufficient cash flows, our ability to develop and maintain effective internal controls, our success in recruiting and/or retaining officers, key employees or directors, expansion plans and opportunities, costs related to being a public company, our ability to maintain the listing of our securities on NASDAQ, macroeconomic factors and their effects on our operations and the outcome of any known and unknown litigation and regulatory proceedings as well as assumptions relating to the foregoing. Accordingly, forward-looking statements should not be relied upon as representing our views of any subsequent date, and we do not undertake any obligation to update or revise any forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable security laws. 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. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Well, thank you very much, and good afternoon, everyone. Welcome to NextNav's second quarter 2023 earnings conference call. As the operator said, joining me today on the call will also be Ganesh Pattabiraman, our CEO; and Chris Gates, our Chief Financial Officer. It was another busy quarter for NextNav on a number of fronts. We are seeing encouraging momentum as we focus on executing against our key strategic priorities. And just as a reminder, I know we've said it a number of quarters in a row, but those priorities remain, number one, being the industry leader on 3D geolocation and resilient position, navigation and timing or PNT services, specifically providing GPS resilience and backup. Second, leveraging our intellectual property and technology to both reduce our future capital needs and to enhance the underlying value of our spectrum assets. And then finally, expanding our global reach. These three pillars serve as our strategic guideposts, and we're encouraged by the progress on each of these areas in the second quarter. However, before I go into those key priorities, I want to briefly touch on the recent closing of an additional allocation of $20 million that was announced this past June. The additional funding comes from a group of existing investors from the original $50 million debt financing facility that we closed back in May. And with this additional capital, gross proceeds from both deals now total $70 million. Chris will cover the specifics of the additional financing. But sort of as an overarching indicator, we see this oversubscribed funding as a clear market validation of our underlying assets, including our IP portfolio, deployed network and near-nationwide spectrum asset. The additional capital provides us significant flexibility with added liquidity and multiple years of funding to support the growing industry and governmental interest in our 3D location and GPS resiliency services. Specifically, we're seeing significant traction with underlying technology licenses, E911 implementations as well as government grants, all of which are extremely encouraging. One thing that's become apparent to us and which I'm sure you've noticed as well is that the sensitive nature of our work, most particularly the critical security and public safety aspects of our technology and products, does result in an elevated degree of confidentiality amongst our customers and partners, including government agencies, wireless carriers and other industry leaders. As we experienced during 2022, many of our key customers and industry partners would prefer to initially work with us privately without attributable public announcements, particularly even in national security cases, which we may never be able to disclose the specifics of any services that we may or may not be providing. In other cases, however, as we experienced with Verizon's E911 contract, we are able to offer greater insights into our work and specific customer relationships, once our capabilities are implemented and mature in their networks. A number of our positive industry and governmental developments fall into this category, but right now, we're only able to disclose them in generalized terms. Now, Ganesh in his section will describe these in as much depth as we can at this point. So let me just provide an overview of some of the key efforts. First, we signed a licensing agreement with a top-tier global chip manufacturer to license NextNav technology to provide low-power asset tracking capabilities utilizing NextNav's intellectual property associated with software-defined GPS capabilities. We're also pleased with the accelerating interest in our TerraPoiNT technology in support of the government's PNT resiliency efforts. We're not in a position to announce anything specific today, but we are hopeful to provide additional insight into significant traction on that front on our next quarterly call. We've mentioned in past calls the Executive Order 13905 and the interagency review of that order. Notably, a number of the key agencies exhibited significant interest in moving forward with initial implementations in advance of the formal governmental process, which is required in order to finalize procurement regulations government-wide. Adding to this, an additional nationwide US carrier recently selected our Pinnacle technology to provide precision z-axis capabilities for 911 calls. With this new agreement, NextNav is now providing its z-axis capabilities in support of E911 devices on three of the top nationwide carriers in the US, again, a clear validation of our technology and expertise in advancing E911 services. We expect revenue from this segment to increase over time as additional Pinnacle E911-compliant handsets roll out on various of these carriers' networks. Finally, during our first quarter call, we noted the very positive FCC approvals we've received regarding our spectrum and successful build-out milestones for all of our key spectrum licenses. We also noted that we had requested an experimental license in the Bay Area to allow us to deploy and test a TerraPoiNT implementation, utilizing industry-standard 5G waveforms with a variety of carrier bandwidth configurations and power levels. During the second quarter, we, in fact, received approval for that experimental license and we are currently designing and deploying a 5G network in the Bay Area to validate our ability to provide highly reliable 3D geolocation and resilient position navigation and timing capabilities using that 5G waveform, while simultaneously using that 5G signal for significant data throughput. Once we've completed the deployment and testing program, likely later this year, we would expect to file with the FCC to allow commercial services using this configuration. As we've noted in the past, using a 5G or even an LTE waveform has significant cost, deployment and performance advantages that strengthen our TerraPoiNT PNT and GPS resiliency services, while facilitating improved broadband services consistent with industry requirements. With that, I'd like to turn the call over to Ganesh. Ganesh?

Thanks, Gary, and good afternoon, everyone. As Gary mentioned, we're seeing strategic momentum in the business as we moved into the second half of the year. Notably, we're beginning to see real recognition towards the effectiveness and importance of our underlying technology and IP through several of the agreements that we are executing. Through the expansion of our intellectual property platforms, we have many new opportunities and flexibility in the technologies we can leverage and deploy. As a prime example, we recently signed a new licensing agreement with the top-tier US chip manufacturer that will provide positioning functionality for low-power GPS tracking to the manufacturer's mainline chipsets by implementing a GPS receiver as a software IP. Similar to other large contracts, we expect an NRE component followed by a volume-based royalty payment, with this business starting to recognize revenue from this agreement in the second half of this year. This is an exciting new licensing agreement, one that leverages our existing technology alongside technical expertise from one of our subsidiaries, the NextNav France office. With the integration of our technology with NextNav France, we now have several capabilities, some of which are software-only versus fuller implementation. But what is most evident to us is that more and more companies and parties throughout the industry are coming directly to us as the acknowledged PNT expert. Building on this momentum, we're also seeing encouraging movement out of the federal government, which has made clear its intention to prioritize PNT resilience. On Executive Order 13905, we believe the tabletop reviews, a process by which the procurement offices within the agencies can provide feedback on the procurements language that is being designed, is now complete and the guidelines are expected to go for interagency approval in the coming months. We see the government moving forward on its strategy of protecting, toughening and augmenting GPS with several initiatives underway ahead of formal implementation of the Executive Order. One example of this in the protect realm is the government accelerating its progress on the HARMONIOUS ROOK - Situational Awareness for Intentional Disruption program associated with GPS interference detection nationwide. In addition, several key agencies are beginning the process of augmenting existing GPS-based systems with resilience. They're doing so by establishing small-scale testbeds, or as they call them, sandboxes, where resilient PNT technologies are being integrated on the same platform as GPS. One of the goals is for providers of critical infrastructure and alternate PNT technology providers like us, as well as the federal government, to collectively understand what it takes to enable PNT resilience, what is the cost of integration, how do the two systems coexist and the end performance of the combined systems. These sandboxes are being constructed in coordination with universities and research facilities at the state level and with federal agency participation and we are in active discussions with many of them. In the most recent Senate Homeland Security and Transportation Housing and Urban Development Appropriations Bill, Congress reiterated its support for Executive Order 13905 and has further allocated funding to further resilient PNT. These developments are very promising and we expect to be able to announce in the coming weeks that we're providing services to the government in support of their PNT resilience strategy. As we mentioned earlier, due to the sensitive nature of many of our discussions, we're unable to provide details at this time. Turning to our work at E911. We expect to continue to expand our footprint in this arena. In early June, we announced that another nationwide US carrier had selected the Pinnacle technology to provide precision z-axis capabilities for 911 calls. The agreement will enable precise z-axis for 911 calls made on the carrier's entire device portfolio, expanding the availability of lifesaving technology across the United States and exceeding FCC's z-axis E911 requirements. The first devices on the network utilizing the z-axis capabilities are expected to be released later this year. In recent years, multiple wireless operators, including Verizon, device OEMs, and other key businesses in the communication industry have continued to select NextNav's Pinnacle solution to provide z-axis capabilities to enhance caller geolocation and emergency response outcomes. And now that we have multiple devices with our Pinnacle technology for 911 emergency calls, we can actually validate the importance of precise z-axis. Our own internal data, based on the devices in the marketplace with Pinnacle Technology and, in our serviceable area, which, if I may remind you, covers more than 4,400 cities and towns around the country, shows that nearly half of the emergency calls originate from a floor above the ground level. This is a very important validation of our technology as it points to the importance of z-axis and the role it plays in E911 calls. We're energized by this fact knowing that our Pinnacle technology is truly needed for such a substantial number of emergency calls to improve response times and ultimately save lives. Now turning over to international. Internationally, we're seeing greater resonance on PNT resilience. Recently in Japan at a conference chaired by the Japanese Prime Minister, one of the key scientific advisors, Dr. Murai, submitted an opinion highlighting the importance of PNT resilience. This, we believe, has two very tangible outcomes: one, we believe the Japanese government will likely follow the US and the European Union in establishing PNT resilience for Japan, and two, we believe this also paves the way for the spectrum allocation in Japan to MetCom to provide resilience to the Japanese market. In Europe, we announced a new testbed for our Pinnacle technology in France. This is our first European testbed for high accuracy vertical location technology and will be located in the padded area. The testbed will demonstrate the benefits of Pinnacle technology can offer to emergency response agencies as well as provide integration with applications and devices to NextNav partners. This initial deployment will enable us to demonstrate our Pinnacle technology to industry partners and pave the way for delivering not only superior floor-level accuracy but also resilient 3D PNT capabilities, leveraging our PNT technology. The European Radio Navigation Plan was also released at the end of June. This report referred to the recommendations from the European Union's trial results at the Joint Research Center, which, as we shared on our previous calls, were released in March 2023. The report recognized NextNav's resilient PNT technologies, TerraPoiNT, as a mature technology that met or exceeded relevant benchmarks to serve as a resilient layer for existing GPS and GNSS technology. As European policymakers continue to move this forward, we remain closely engaged in discussions on how we can help advance those initiatives. Finally, before I hand things over to Chris, I wanted to highlight some exciting news. You may recall we had discussed the significant progress on our technology integration with LTE capabilities. We recently announced the successful testing of our positioning and timing solutions that combine NextNav's TerraPoiNT system with existing LTE and 5G network signals. This testing took place in and around the San Jose, California area and demonstrated how TerraPoiNT can leverage the existing cellular signals to deliver accurate 3D positioning and timing information that is not reliant on conventional satellite-based GPS or GNSS signals. With this integration, we have demonstrated a highly scalable and lower-cost alternative, a 3D PNT solution, which overcomes the vulnerabilities of GPS with the complementary ground-based resilient PNT layer that extends PNT capabilities in urban and indoor environments. We're excited by the tests as they validate that the new system delivers cost and performance consistent with our prior expectations. And finally, as Gary indicated, we're also now deploying a 5G implementation of TerraPoiNT in the Bay Area using our recently approved experimental license. We hope to have testing results from that network implementation later this year. And with that, let me turn it over to Chris for a run-through of our financials.

Thanks, Ganesh, and good afternoon, everyone. Before jumping into the results, I'd like to discuss the $20 million of additional debt financing that Gary briefly touched on. As Gary pointed out, this was in addition to the $50 million senior secured notes that we closed on May 9th. These additional notes were issued under the same indenture to the investors that participated in the $50 million portion of that financing, seeking a greater allocation of those notes and the warrants, and sharing the same underlying security agreement that was likewise announced on May 9th. The key terms, just to review for those of you that perhaps missed our prior presentation on this. Senior secured notes mature on December 1st, 2026, with a total term of approximately 3.5 years issued in a private placement. The notes bear interest at a 10% rate, payable semi-annually. And importantly, from a cash point of view, we can elect to pay up to 50% of any accrued interest in shares of our common stock. The notes are redeemable at 101% of the principal value after the first anniversary of the initial issuance. And in conjunction with the sale of these additional notes, we issued an additional $7.4 million warrants to purchase shares of NextNav common stock at the same $2.16 strike price that we issued the warrants along with the initial $50 million closing. The warrants are exercisable for cash. There's no cashless exercise option and are partially callable beginning in 2025 and expire on June 1st, 2027. In all, we see this as another strong validation of our business and asset base and investor support for our long-term objectives. Now turning to our results. In the second quarter, top line revenue was $800,000 compared to approximately $1.4 million in the second quarter of 2022. The year-over-year decrease was driven by a decline in non-recurring revenue from network integration activities offset by predominantly recurring revenue from commercial customers. Sequentially, revenue was essentially flat compared to the first quarter of 2023. For the first half of the year, our revenue was $1.6 million compared to $2.6 million in 2022, with the decline again resulting from the same drivers. Operating expenses for the second quarter were approximately $15.8 million down from approximately $18.4 million in the same period last year. Excluding stock-based compensation and depreciation and amortization, operating expenses were approximately $10.3 million compared to $10.8 million in the prior year and $9.8 million in the prior quarter. For the first half of the year, operating expenses were $30.6 million compared to $35.7 million in 2022. Excluding stock-based compensation expense and depreciation and amortization, operating expenses were $20 million for both periods. Net loss for the second quarter of 2023 was approximately $15.8 million, down from a net income of $830,000 in the same period a year ago, with the change primarily driven by a difference in the change of the fair value of warrant liability, which was a loss of $263,000 in the second quarter of this year compared to a gain of $17.8 million in 2022. For the first half of the year, net loss was $32.1 million compared to a net loss of $8.9 million in 2022, with a change again being primarily driven by the change in fair value of warrant liability, which was a loss of $3 million in 2023 compared to a gain of $24 million in 2022. From a balance sheet perspective, we finished the quarter with $52.8 million in cash and cash equivalents, $32.2 million in short-term investments and together $85 million between those two categories, with $34 million in debt, net of unamortized discount attributed to transaction costs and the issuance of warrants with a gross value of $50 million from the recently announced debt financing deal. Now as a reminder, this does not include the $20 million either in cash or in the debt line in our balance sheet from the additional notes because we closed those on July 6th after the end of the quarter. And we believe this liquidity provides us with multiple years of runway to achieve our strategic objectives. With that, I'll turn the call over to the operator for questions.

Your first question comes from the line of Griffin Boss at B. Riley Securities.

Hi. Thank you, operator. Thanks for taking my questions. To start off, maybe one for Chris. Can you comment on the revenue implications of the new Pinnacle agreements with the additional carrier? Will it be similar to what you expect with Verizon? Additionally, how should we view the new licensing agreement in terms of top line contribution? I'm trying to get a sense of whether there will be a material impact in the second half of the year.

Yes, Griffin, that's a great question. As you know, we don't provide guidance in part because, of course, especially with new contracts that involve usage-based components. However, we do expect both the E911 agreement that Ganesh referenced as well as the chip agreement to be additive in the second half of this year to the substantially recurring revenue that we recognized in the first and second quarter. So we are looking forward to starting to see the effects of those in the second half of the year. And I think longer term we expect both of those agreements to have the potential to grow to be multimillion-dollar contracts, although the timing of their growth into that scale is, of course, dependent on the E911 agreement, device integration and in the case of the chip agreement, of course, our customers' chip sales and then the attach rate of our feature into those sales.

Okay. That's great. Thanks, Chris. And then I guess just more broadly, it's nice to obviously see the successful TerraPoiNT testing. I'm wondering if you all can provide any updates just on how the Nestwave integration is coming along.

Yes, I can address that. As we have mentioned in several of our calls, the integration began quite effectively late last year. The teams started collaborating on the combined platform, and we successfully merged the Nestwave platform with our TerraPoiNT signals earlier this year. We have begun collecting results, which have largely met our expectations. In about six to eight months, we have managed to integrate the two technologies and start realizing the benefits of synergy in the platform, along with the capital and operational expenditure implications and the resulting performance, which aligns with our initial projections for this new capability. Overall, I would say it’s progressing very well, and we anticipate continued advancement in this area.

Your next question comes from the line of Tim Horan from Oppenheimer. Tim, your line is open.

Hi, guys. Dan McDermott on for Tim Horan. Thanks for taking my question. I know you guys mentioned the capital raises should provide multiple years of runway. But do you guys feel fully funded and do you see a possible need to further raise? And then secondly, after you plan to file for those commercial licenses later this year, how long do you expect that to take to receive an approval? Thank you.

Hi. Thanks very much and definitely two very good questions. Obviously, with the amount of balance sheet liquidity we have and runway that we have right now, we aren't envisioning any type of an additional offering or fundraising, be it debt or equity. But by the way, I would remind when analysts or investors are looking at the specifics of the $70 million that we took in, it's often overlooked. We still have headroom in that. We have an additional $10 million that we can add to the pari passu with the same underlying collateral if we wanted to do that. So that's an opportunity for us. And as Chris covered in his section earlier, these aren't penny warrants, and they don't allow a cashless exercise. So candidly if those warrants were exercised, that's upwards to $56 million or something like that. So there are plenty sufficient financing elements available to us. So, from this standpoint, I prefer to not refer to it as fully funded because that may or may not be the case if we were to undertake international expansion or other things of that nature. But certainly, nothing that we see in the near term requires additional cash, either equity or debt, and we're very comfortable with where we stand from the financial standpoint. It's actually giving us a good bit of flexibility of things that we can do operationally and even strategically. The next element that you mentioned, and I guess that's probably the one that a lot of the investors follow because of the true underlying value of the 2.4 billion megahertz PoPs that we have in contiguous 8 megahertz spectrum near-nationwide. The key element in doing that is, first, what we're doing right now, which is having received approval for our experimental license, we're actually deploying TerraPoiNT transmitters in the Bay Area, not using our existing waveform, but in fact, using a 5G waveform. It's one thing for us to tell both investors or the FCC that we can do both simultaneously. We can provide 5G commercial data traffic while simultaneously providing a really high-quality position, navigation, and timing 3D geolocation service. One thing to say that, it's another thing to then prove it. And we feel very comfortable that what we'll be seeing later this year and the test results from that is in fact, we will be able to approach the FCC showing validation that, yes, they can approve commercial use of the data carrying capacity without harming at all our underlying strategic value that the licenses were initially awarded for position navigation and timing. Timing on that? I think, once again, we're pointing towards this year type of a filing. I think in prior calls, we may have mentioned that you then follow that with a public comment period, which may run a couple of three months. And then after that, at that point in time, you simply answer the questions of the FCC and show them the data. There may be some additional testing they may want to undertake as they did 10 years ago when we first received our commercial licenses and, by the way, after a very similar testing program. But our, certainly, our hope is that this is a 2024 event. It's something that exactly when in that process it occurs depends upon what additional questions, what comments are received, and how much further we have to go with the FCC. But in my view, we're right on time and right on our milestones that we were looking at. So with that in mind, I do view it as a 2024 event.

Great. Got it. Thank you so much.

If there are no further questions at this time, Gary Parsons, I will turn the call back over to you.

Thank you very much, operator, and thanks, everybody, for joining us on this call. As I said when I kicked it off, there were a number of very key announcements that we had here, and hopefully, some that we will have next quarter based on the traction that we are already seeing, both operationally, revenue-wise, strategically, and certainly, on the FCC and spectrum side relative to utilizing this experimental license for our 5G deployment of our own TerraPoiNT service. With that, we appreciate your attendance and we look forward to talking to you again on our next quarterly call.

This concludes today's conference call. You may now disconnect.