Good afternoon. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to NextNav's fourth quarter and full year 2023 earnings conference call. I would now like to turn the conference over to Erica Bartsch. Erica, you may begin your conference.

Good afternoon, everyone, and welcome to NextNav's fourth quarter and full year 2023 earnings conference call. Participating on today's call are Mariam Sorond, NextNav's CEO; Gary Parsons, NextNav's Chairman; 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 geo-location businesses, an expansion of its next-generation GPS platform to maximize the value of its IP portfolio and 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 of NextNav's control, which 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 geo-location 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, market plans, and our ability to realize the anticipated technical and business benefits associated with acquisitions and any subsequent mergers, acquisitions, or other 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 the international market, 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 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 retaining officers, key employees or directors, expansion plans and opportunities, costs related to public companies, 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. 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's Chairman, Gary Parsons. Please go ahead.

Well, thanks very much and good afternoon, everyone, and welcome to NextNav's fourth quarter and full year 2023 earnings call. Joining me on today's call are Mariam Sorond, NextNav's Chief Executive Officer, and Chris Gates, NextNav's Executive Vice President and CFO. Now, 2023 proved to be a year of major progress for NextNav. We furthered our position in navigation and timing or PNT technology, increased our financial flexibility with $70 million in additional funding, providing a multiyear liquidity profile, expanded our wireless carriers and handset customer base for E911 3D location and first responder situational awareness, landed PNT contracts with government agencies and Tier 1 chipset manufacturers, and most significantly from my viewpoint, we recruited an extraordinary Chief Executive Officer to lead us to the next stage of NextNav's evolution. As you know, Mariam brings over three decades of technology, spectrum, and product leadership across wireless, wireline, satellite, and cloud companies. She is renowned for her technical and regulatory expertise and has hit the ground running during her first 100 days at the helm. So now let me turn it over to Mariam to introduce herself, tell you what attracted her to this opportunity, and give you a preview of our vision for NextNav's technology, products, and spectrum assets.

Thank you, Gary, and good afternoon, everyone. It is a pleasure to be on my first earnings call as the CEO of NextNav. Having the chance to take over the reins of the company is truly an exciting opportunity. For years, I've built my career and technology powered by spectrum, and I've seen various companies and technologies come and go, witnessing both what has worked and what hasn't. Having now been with NextNav for just over 100 days, I can easily say that this opportunity is truly unique. What ultimately attracted me to this role was the potential of the NextNav portfolio. First and foremost, NextNav is a growing company with an impressive set of assets and solutions, specifically PMT solutions that span both the private and public sectors and are powered by a valuable spectrum asset. Positioned in the lower 900 megahertz band with excellent propagation characteristics, NextNav's existing spectrum is ideally positioned to unleash opportunities to develop next-generation solutions. That said, I believe the value potential of this asset has long been underappreciated. Today, the need for PMT solutions powered by low-band spectrum with optimized use is a powerful opportunity. It can address many of the problems we face in both the public and private sectors, including in areas like national security and public safety. As a result, I am confident that there is significant potential in NextNav's ability to explore various options to enhance next-generation PMT technology through spectrum. This is why I'm excited by our recent acquisition of additional spectrum licenses covering 4 megahertz of noncontiguous spectrum. Announced earlier this week, the licenses are in the same lower 900-megahertz band as our current spectrum and were acquired after a recent opportunity to buy them from the receiver. We moved quickly, and as we look forward to taking advantage of our full spectrum portfolio, all of these licenses will be part of the mix. What has me even more excited about this opportunity is just how well it dovetails with my background. As Gary mentioned, I have devoted my career to advancing and commercializing innovation and technology. I spent several years working at DISH, where I oversaw spectrum technology, standards development, and negotiation of agreements across government agencies and industry partnerships and created spectrum band plans for the 5G Open RAN cloud-native architecture design, which is currently deployed at DISH. I also led technology and strategy efforts for telco cloud platforms, mobile and wired convergence, and satellite technologies at other companies. In short, this type of work is embedded in my DNA. Moving forward, my priority is on ensuring that the entire organization is laser-focused on advancing our path forward. Specifically, we are committed to developing next-generation technology for PMT that will take advantage of 5G. Our primary goal is single-digit accuracy everywhere. This means creating a 3D positioning solution that provides location that is highly accurate and is available indoors as well as outdoors and in urban corridors. It also moves wireless distribution of timing everywhere. It's within this framework that we will be looking to advance next-gen PMT in a timely and efficient manner. As part of this process, I want to stress that we plan to take a fresh look at all components of the business with an eye toward taking full advantage of our spectrum assets. To do this, I have assembled a top team combining in-house technical talent with consultant expertise in PMT and spectrum-based services to help advance our vision. This group nicely complements the existing NextNav team of experts and will be invaluable to us and our management as we chart our path forward. As part of this effort, we will be looking at how best to leverage our spectrum, including the recently acquired licenses I referred to earlier. As a reminder, NextNav currently owns licenses covering 8 megahertz of valuable low-band spectrum, covering 2.4 billion megahertz PoPs. With the addition of new licenses, NextNav's full spectrum portfolio will total 3.5 billion megahertz PoPs of low-band spectrum, an impressive portfolio of assets. In terms of next steps, we need the court to approve the transaction, and assuming that happens, we will promptly seek FCC approval. Until that time, our primary focus remains on developing next-generation technology for PMT that will take advantage of 5G. We expect old NextNav licenses will be a part of the mix as we consider how best to take advantage of our spectrum. We have an exciting path ahead, and I look forward to providing additional updates as we progress over the coming months. Finally, before handing things over to Chris, I want to quickly provide an update on our PMT activities. Accurate PMT continues to be necessary for the functioning of critical infrastructure in civil, commercial, and military use; all sectors that rely on accurate PMT data to provide their services. More importantly, PMT is a national security topic, and resiliency needs to be considered. We are currently in discussions with several agencies on this exact topic. Specifically, we are planning to respond to a Department of Transportation RFQ that was released last month to test complementary PMT solutions in an operational environment, including testing against GPS disruptions. This follows the DOT's complementary PMT action plan that was issued this past fall. As you can see, it's quite a busy and exciting time at NextNav. We have an incredible path ahead, and I can't wait to share more with you over the coming months. I also want to make clear that as CEO, I plan to be very engaged with our shareholders and the financial community. My goal is to ensure that all of you have a clear understanding of our pathway to growth and the milestones we need to achieve along the way. As you know, our company is engaged in numerous conversations with government officials as we laid the groundwork for our future, and there is a sensitive nature to many of these discussions. As I am able, I look forward to sharing information and providing you with regular updates. Though this is a process that will take time, we are committed to seeing it through and hope all of you will join us on this exciting journey. With that, I will turn the call over to Chris to run through our financials.

Thank you, Mariam, and good afternoon, everyone. Let me begin with a review of the terms of the spectrum transaction. As noted in our press release on March 11, we signed an asset purchase agreement to acquire additional lower 900-megahertz spectrum licenses in our band for a total purchase price of up to $50 million, $2.5 million of the purchase price to be paid in cash due within 30 days of the court approving the transaction. The remainder is expected to be paid for with NextNav common stock at the then-current stock price, based on the achievement of certain milestones, including appropriate regulatory approvals. I'll refer you to our 8-K filing for specific transaction details. I should also note that we structured this transaction consistent with our conscious efforts to manage the use of capital in our business. Recall that we executed a debt financing of senior secured notes last year that yielded gross proceeds of approximately $70 million, along with warrants with an aggregate strike price of $56 million. We were pleased by the positive market reception to this financing, which was a testament to the potential value to be unlocked in our assets and business. Now turning to our financials. Fourth quarter revenue increased 50% to $1.2 million compared to $803,000 in the prior year period, primarily due to increased recurring services revenue in the current period from technology and service contracts with commercial customers. For full year 2023, revenue was $3.9 million, flat versus the prior period. Our revenue was driven by an increase in recurring service revenue from technology and service contracts with commercial customers, offset by a decline in integration revenue from the prior year period. Our operating expenses were $21.1 million in the quarter, up from $15.3 million in the same period last year, due primarily to an increase in equity-based compensation expense for the full period of NextNav's France operations and CEO transition costs. Excluding stock-based compensation and depreciation and amortization, operating expenses were $10.7 million compared to $8.4 million in the prior period. For the full year, operating expenses were $67.4 million, down from $69.5 million in the prior year. The reduction was driven by a decrease in SG&A, partially offset by increases in depreciation and amortization as well as R&D expenses, primarily related to a full year of NextNav's France operations. Excluding stock-based compensation and depreciation and amortization, full year operating expenses were $40.7 million in the current period and $39.3 million in the prior year. Net loss in the fourth quarter was $16.4 million compared to a loss of $12.5 million in the prior year. The primary drivers for the increase were net interest expense of $2 million, higher stock-based compensation expenses, and higher payroll costs, partially offset by a gain from the change in the fair value of our warrants of $5.7 million compared to net interest income of $456,000 and a gain in the change in the fair value of our warrant liability of $1.5 million in the prior year. For the full year 2023, net loss was $71.7 million as compared to a loss of $40.1 million in the prior year period. Here again, the primary drivers were net interest expense of $3.7 million and a loss associated with the change in fair value of our warrant liability of $4.1 million, compared to net interest income of $901,000 and a gain associated with the change in fair value of our warrant liability of $24.7 million in the prior year. Looking at our balance sheet, we closed out the year with $81.9 million in cash and cash equivalents and $4 million in short-term investments. The company ended the year with $48.4 million in debt net of unamortized discount attributed to transaction costs and the issuance of warrants, with a gross value of $70 million. As a quick reminder, the warrants issued as part of our debt financing are exercisable for cash and become partially callable beginning in 2025. If they're called or exercised otherwise, these warrants may provide a source of additional liquidity as they did in the third quarter of 2023. Thank you. And with that, I will turn things over to the operator to open the call for questions.

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

Hi. Thanks for taking my question. And first off, welcome to the team, Mariam. Can you just give some color on your thoughts, specifically just high level, the value you saw in these additional 900 megahertz spectrum licenses that NextNav announced they were acquiring a couple of days ago, and what that means for the company going forward and just the overall value proposition at the company?

Yes, absolutely. As you know, the spectrum has been available for some time, and we were focused on our existing licenses. One of the reasons I was excited to join NextNav was the potential of the technology portfolio and the interesting spectrum asset. This transaction allows us to enhance this portfolio. Specifically, NextNav already has a valuable spectrum position in the lower 900-megahertz band. After finalizing this new agreement, NextNav's complete spectrum portfolio will consist of 3.5 billion megahertz PoPs of low-band spectrum. This adds another layer; the need for PMT is driven by low-band spectrum. It's a great opportunity that can address many challenges faced in both the public and private sectors.

Got it. Great. Thanks for that color. And then maybe either for Gary or Mariam, is there anything you can share regarding progress with testing and where you're at with the FCC process at this point?

Yeah. Let me take that, and Gary, if you want to add. But first of all, with the testing, we've actually seen positive results from the limited testing that we did in the Bay Area. Now that we have a larger spectrum portfolio to work with, there will be additional testing, and we will be working to include all the licenses in this process as we move forward. As a reminder, there are internal tests that we conducted as part of the optimization and development of our next-generation systems. And I should note, we will not be publishing that data unless it becomes a part of the FCC filings. There is a process at the FCC, and we will work through that process diligently. Having just announced this transaction, we are working on a plan, but it would be premature for us to discuss our efforts at this juncture.

Okay, great. Well, that's good news. I'm glad to hear that. And then just last one for me, if I could. Mariam, you obviously mentioned you're going to be taking a fresh look at all components of the business regarding future opportunities that make sense. The company in the past has discussed a certain agreement with a Tier 1 global chip manufacturer for GPS IoT applications. Just wanted to get some more color on whether that opportunity is still progressing with the anticipated revenue starting to ramp up in the back half of this year.

Look, PMT continues to be one of our focuses. Advancing our next-generation technology in PMT would be a focus. We're talking to multiple industry entities, we're talking to the government agency, and we are taking a fresh look at how we can advance focusing our portfolio of spectrum as it powers the technology. So it's all in the mix with a fresh look.

Okay. Fair enough. Thanks for taking my questions. I appreciate it.

Your next question comes from the line of Timothy Horan from Oppenheimer.

Hey, thanks everyone, and thank you, Mariam. Can you provide more details about the spectrum we just acquired, specifically regarding its geographic coverage? Is it contiguous with your holdings or in the same exact band? Are there other bands in this range that you might consider acquiring? That's quite a few questions.

Okay. Thanks for the questions. So our current portfolio is 8 megahertz of contiguous spectrum, and it covers 2.4 billion megahertz PoPs. The A block is noncontiguous spectrum that brings our total portfolio up to 3.5 billion megahertz PoPs. So that's what the spectrum is, and they're both located in the lower 900 megahertz. As far as other spectrum, right now, we're very laser-focused on our current licenses. Once approved and once we have discussions at the FCC with the future licenses that we just acquired, that's where our focus will be. But of course, we'll take a look at everything that's out there as well.

So are they covering this form of megahertz, is it covering like 200 million or 250 million PoPs? Is that what you're saying? And it's not in the same exact spectrum band as yours, it's adjacent?

It is in the same. So the range is between 902 and 928 megahertz. The A block falls on the lower portion of that spectrum, and our current 8-megahertz licenses fall in the upper portion of that same spectrum. So they're all on the same spectrum band.

Yeah. And the geographic or the PoP coverage that they have?

So the PoP coverage for the 8 megahertz is 2.4 billion megahertz PoPs. And then the A block would give us an additional 1.1 billion that brings us up to 3.5 billion megahertz PoPs.

Hey, Tim. This is Gary. So as you appropriately noted, if you do the math on that, yeah, their actual Pop coverage is something like 270 million, whereas for us is like 3 billion. So, yeah, that's how you get to the numbers.

Does combining their spectrum with yours significantly enhance its value? Is it an exponential increase rather than a simple sum, like one plus one being two or perhaps one plus one being five? The possibilities of what can be achieved with it would be impressive.

Look, we can share more, but we have to wait for the FCC process at this point. I can tell you that we need to work with the FCC for the approval. And talking about how this would look in the future is a little premature until we go through that process. But it is an exciting combination of assets and technology that we're talking about over here. So we will be diligent in the FCC process, and we actually don't want to prematurely discuss what that looks like.

Do you have an estimated timeline for when the transaction might close? Also, do you have any insights regarding your stock for settling the remaining $50 million for the company?

So in terms of timing, the court must approve the transaction, and assuming that happens, we will also need FCC approval. But right now, our primary focus is on developing the next-generation technology while that’s going on, that will take advantage of 5G.

And we have no further questions at this time. I will now turn the call back over to Mariam Sorond for closing remarks.

Thank you, everyone, for joining us today. I want to reiterate how excited I am about the technology and the opportunity we see at NextNav. As we advance forward, we will have more to share on our progress. And I look forward to speaking with all of you again on our first quarter earnings call. Thank you.

This concludes today's conference call. Thank you for your participation. And you may now disconnect.