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…

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 guidepost 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…

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 and that one which 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 an interagency approval in the coming months. We…

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.…

[Operator Instructions] Your first question comes from the line of Griffin Boss, B. Riley Securities.

Hi. Thanks for taking my -- thank you, operator. Thanks for taking my questions. So just to start off, maybe one for Chris. Can you comment on the revenue implications at all of the new Pinnacle agreements with that additional carrier? Is this going to be similar to what you expect with Verizon? And then sort of similarly, how should we be looking at the new licensing agreement with the -- from a top line contribution perspective? Just trying to get a sense if there's going to be a material impact in the back 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 in the case of 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.

Ganesh, you want to hit that?

Yes, I can take a stab at that. I think as we've, I think, highlighted in a few of our calls, the integration started quite well late last year. We had the team's starting to work together on the combined platform. And we, obviously, have gotten to the point where the -- we've been able to combine the Nestwave platform with our TerraPoiNT signals earlier this year. And we've been -- we've established a couple of testbeds, both in San Jose and San Francisco. And we've started collecting results, which, as I indicated, have been largely consistent with what our expectations were. So in the matter of six months to eight months, we've been able to combine the two technologies and start seeing the benefit synergies in the platform the CapEx, OpEx implications and the corresponding performance that we believe is meets what was originally anticipated with this new capability. So net-net, I would say, it's going extremely well and we expect to continue to make progress on that.

Okay. Great. Thank you, Ganesh. Nice to see the progress.

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…

Great. Got it. Thank you so much.

[Operator Instructions] If there are no further questions at this time, Gary Parsons, I 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.