NextNav Inc.

Good afternoon, everyone, and welcome to the NextNav's third quarter 2021 earnings conference call. Participating on today's call are Gary Parsons, NextNav chairman, Ganesh Patubaraman, NextNav co-founder and CEO, and Chris Gates, NextNav 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 analysis 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 statements 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 the forward-looking statements. These risks, uncertainties, assumptions, and other important factors include, but are not limited to, the ability of NextNav to continue to meet NASDAQ's listing standards following the consummation of the business combination, the risk that the consummation of the business combination disrupts current plans and operations of NextNav, the ability to recognise the anticipated benefits of the business combination, which may be affected by, among other things, competition, the ability of NextNav to grow and manage growth profitably, maintain relationships with partners, customers and suppliers, retain its management and key employees, the ability to generate and effectively deploy capital in line with its business strategies, the possibility that NextNav may be adversely affected by other economic businesses and or competitive factors, including the impacts of the ongoing COVID-19 coronavirus pandemic. The outcome of any legal proceedings that may be instituted against NextNav following the business combination and other risks and uncertainties indicated from time to time in other documents filed with the SEC by NextNav. New risks and uncertainties arise from time to time, and it's impossible for us to predict these events or how they may affect us. You're 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. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you wish to withdraw your question, please press star, then the number two. 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.

Well, thank you, Lydia. And welcome, everyone, to NextNav's third quarter earnings conference call. I'm sure you can imagine the entire team is thrilled with this important next chapter of growth for our business following our debut on the NASDAQ two weeks ago. It was an exceptional milestone for our business, and we're excited to welcome our new investors and, quite frankly, to welcome as well both the challenges and opportunities of operating as a publicly traded company. I'd like to personally thank all NextNet employees who worked tirelessly to achieve this significant milestone. I'd also like to express my appreciation to our long-term shareholders. We're thankful for your belief in the NextNet business and your support of our ongoing growth. The team and I look forward to speaking and meeting with many of you in the coming weeks. To kick off the call, I'd like to provide a summary of the recently completed transaction with Spartacus and a quick overview of NextNet's business strategy and positioning. I will then hand things over to NextNav CEO, Ganesh Pataparaman, to provide not only our business and technology updates, but also our ongoing performance and expectations with new customers, platform adoption and integration, and international activity. Chris Gates, NextNav CFO, will wrap things up with our third quarter financials. and as well provide additional details and timelines from the just completed Spartacus transaction. And of course we'll leave plenty of time at the end of the call for your questions. And as many of you know, MEXNEV recently closed the business combination with Spartacus Acquisition Corp and began trading on NASDAQ under the ticker symbol NN on October 29th. Reaching this milestone represents the culmination of a decade plus of innovation and a focus on creating industry-leading 3D geolocation technologies that are more accurate, resilient, available, and frankly, unlike anything in the market today. To us, one important aspect of this transaction was attracting and partnering with a solid base of long-term shareholders who share in our vision, which we achieved in our transaction with Spartacus, our fully committed pipe with leading investors, and our existing long-term shareholders. This is a strong validation point for our technology, business plan, leadership team, and we will continue to build on that going forward. As you probably know from prior presentations, our Pinnacle vertical location service is commercially available in over 4,400 markets around the country. And the transaction funding enables us to drive products and feature enhancements to Pinnacle, and most importantly, to accelerate the widespread adoption of the service. Ganesh will get into more specifics on these pinnacle developments, as well as provide a bit more specifics on our TerraPoint's groundbreaking position, navigation, and timing capabilities deployment in a moment. Specifically, regarding use of TerraPoint as a backup GPS and timing source, we continue to work closely with congressional supporters and government agencies to develop this opportunity. And I have to say, particularly in today's day and age, no one can reasonably forecast future agency or congressional action, but frankly, we're pleased with the current progress that we see in the current Department of Transportation budget, where we expect continued follow-up initiated by last year's testing of GPS backup technologies, as well as in the Defense Authorization Act, which is focused on military applications for resilient PNT capabilities. We look forward to continuing to report on this throughout 2022, on this heightened interest and motivation to secure critical infrastructure and national security against GPS vulnerabilities. Now, I know that we've previously spoken to many of you on the phone today regarding our business, so we'll try to focus our comments primarily on recent developments. But for those of you who may be new to the story, there are certain key market dynamics that are critical to understand. Never before has there been this type of hyper-accurate ubiquitous, resilient, three-dimensional positioning, navigation, and timing networks. There are multiple possibilities for disruptive use cases. And like other networks in the past, it's the network itself that drives the use cases, not the opposite. Because of this universal demand for these capabilities, we believe there's $100 billion global total addressable market opportunity, with 50 billion in the United States alone. We included only a small fraction of the US market, where NextNow's unique capabilities are most compelling. But these markets, as we noted in the past, are public safety and E911, as well as commercial apps requiring three-dimensional location data, particularly in the urban areas and indoors. Autonomous vehicles, air taxis and drones that require resilient location services and, of course, vertical as well. And critical infrastructure like cellular networks, power grid and financial services all of which require backup timing solutions and protection against single point failures and of course i i know that many of you closely follow spectrum assets and valuations next now is contiguous eight megahertz the valuable 900 megahertz low band spectrum covers over 2.4 billion megahertz pops that makes clear we're have a once in a generation opportunity to bring gps into the 21st century on the back of this solid spectrum asset, as well as the robust foundational IP, a deployed network, world-class partnerships, and frankly, a growing slate of location platform adoptions and network integrations. While Chris will provide more details, I also should note that the Spartacus transaction provided NextNav with gross proceeds of $231 million, which not only funds the acceleration of our market rollout, but also completely pays off the company's debt that was secured with these valuable spectrum licenses and network assets. This debt pay down obviously gives us increased flexibility in managing our overall spectrum portfolio going forward. So in summary, we're very pleased with the transaction we have now completed and with the new investors we have added. There's still much to be done to grow our business and add new customers and location platforms to our network, But this milestone represents a significant shift from our earlier stage of technology development to one of market growth and penetration. With that, let me turn it over to Ganesh.

Thank you, Gary. Good afternoon. And I'd like to welcome all of you to our inaugural earnings call as well. This is a very exciting time for us as a company and represents really a decade of focus and dedication by the team. And I want to thank our employees for their hard work and dedication and our partners and investors, both current and new investors, to help us getting to this point. I think today represents not only an exciting time for NexNav, but for the entire geolocation industry as a whole. Having established a solid foundation with our technology and platform, we're excited to be going to the next level of our business. As we've articulated in the past, our plans have not changed, and we're extremely excited to be scaling both the Pinnacle and TerraPoint services. Although many of our investors who have been with us for a while may be familiar with our technology and platform, I wanted to step back and provide some additional context for our services and go-to-market strategy, in particular for some of our newer investors. NextNav has spent years developing its innovative 3D geolocation technology, bringing precise floor-level altitude to existing location services and in-building resilient location and timing capabilities. This is primarily to enhance traditional GPS capabilities. Why is this important? Well, according to the National Institute of Standards and Technology, which is a government laboratory under the Department of Commerce, the impact of GPS on the U.S. economy is approaching about a trillion dollars annually. So it is a significant portion of the economy that's dependent on position, navigation, and timing services that GPS provides. And while GPS has fostered a massive growth in the vast array of markets, it also represents a single point of failure. And due to its space-based nature, GPS has inherent limitations that need to be addressed to keep the growth trajectory accelerating into new market applications. This is why we're committed to delivering a next-generation GPS solution. Not to replace GPS, but to complement it to meet new market demands. We know apps require dependable horizontal and vertical location data, particularly in urban areas and indoors. Additionally, autonomous vehicles, EVTOLs, and UAVs require resilient location services, while critical infrastructure such as cellular networks, the power grid, and financial services will need to address their single point of failure vulnerabilities with the backup timing solution. At NextNav, we offer a reliable, hyper-accurate 3D geolocation service in any environment, including indoors. And we do that with zero reliance on GPS satellites. All of our technology is encrypted to prevent spoofing and is supported by a powerful signal, literally 100,000 times more powerful than GPS. Importantly, as Gary mentioned, we believe there's over $100 billion total addressable market opportunity worldwide. It's a $50 billion opportunity in the United States alone, so a pretty sizable market. But this still represents a small fraction of the trillion dollars that we mentioned that's still misanalyzed, which is the overall impact of GPS to the economy. So this offers, next time, an enviable roadmap for growth with vast opportunities ahead. To meet this opportunity, we currently deliver differentiated P&T services, or position navigation and timing services, to our network-based Pinnacle and TerraPoint solutions. Our Pinnacle network solution provides floor-level altitude with the existing horizontal location systems. Pinnacle is fully deployed in over 4,400 cities across the US and covers about 90% of commercial properties that exceed three stories and above. Public safety, autonomous vehicles, eVTOL, as well as UAVs all require precise 3D location solutions. Our pinnacle solution is the most accurate vertical location solution in the marketplace. It is not tied to crowdsource techniques or uncalibrated weather sources, and our solution exceeds the FCC's vertical location requirements or Z-axis requirements in a blind test that was conducted by CTIA, or the Cellular Telephony Industry Association, a few years ago. Today, our pinnacle network is being used for public safety by FirstNet, built with AT&T, the first high-speed nationwide wireless broadband network dedicated to public safety. We're excited by several of the marketing initiatives that are starting to take effect in the public safety domain with AT&T FirstNet, expected to launch a modified application highlighting vertical location capabilities in the coming weeks. This is in addition to the applications that we previously announced by 3AM Innovations Intrepid Networks and TRX. Additionally, we recently announced a collaboration with Qualcomm to enable NextNav's Pinnacle 911 Z-Access software and network-based solution for use with Qualcomm Location Suite. This effort makes it easy for devices OEMs to integrate vertical location capabilities into the carrier's existing infrastructure for 911 purposes. With the upcoming FCC mandate in 2022, we expect more of these deals to be announced in the coming weeks and months. We also announced our Unreal plugin after receiving a mega grant from Epic Games for vertical location capabilities on the Unreal platform. We announced our plugin on Unity earlier this year, and Atlas Earth, which is built on the Unity platform, is incorporating our SDK into its virtual real estate game. We have several hundred interested leads in the space and look forward to bringing 3D geolocation capabilities into a wide variety of these applications and platforms. Our joint venture partner in METCOM, which is a Sony and Kyocera-backed entity, launched a pilot in Tokyo to trial Pinnacle's vertical location services with several tier one partners like SECOM in the security space, NTT for its enterprise space, and Dentsu in the advertising and marketing space. We expect to work jointly with MEDCOM to further enable Pinnacle capabilities in that market. MEDCOM has access to significant local facilities through its partnership with Sony and Kyocera to host both our Pinnacle and TerraPoint infrastructure and has secured initial access to five megahertz of low band sub gigahertz spectrum from the Japanese government for TerraPoint operations, which are currently under trial in Kyoto. We continue to receive interest from multiple parties, both in Europe and the Middle East, about bringing our services to those geographic areas and plan to report on additional progress on that front in 2022. With regard to the TerraPoint service, which is truly a terrestrially based next generation GPS network. It will expand from today's limited geographic availability to a nationwide footprint. Unlike GPS, the TerraPoint signal can be reliably received indoors and in urban areas and is difficult to jam and spoof. Further, the TerraPoint signal embeds pinnacle information to provide a full 3D solution. Terrapoint provides redundancy for GPS, which is essential due to the economy's reliance on GPS for precise location and timing capabilities. Critical infrastructure, including communication networks and power grids, all rely on GPS for accurate timing and location capabilities. Terrapoint is the only service that has shown the ability to provide equal services to GPS of position navigation and timing, or PNT, and was ranked as the highest performing technology in the recent DOT trials conducted last year. Other location services such as those reliant on Wi-Fi are just not as precise or reliable, and some are not even capable of providing timing. In addition to the top ranking received in the DOT trial, we demonstrated timing precision and resilience of our TerraPoint system in a recent evaluation by the science and technology directorate of the department of homeland security this industry first trial tested the timing redundancy of the terra point system in a number of scenarios including instances of gps outage spoofing and jamming along with these activities we're pleased with the continued congressional activity in supporting resilient pnt capabilities both at dod and dot and enabling this capability nationwide Therefore, we believe that when deployed broadly, our TerraPoint service will provide a resilient supplementary signal for urban navigation takeoff and landings for drones and other applications. It is, as you know, currently in use by NASA at their Langley Research Center, and we expect additional NASA facilities to leverage this capability. The TerraPoint network is initially deployed metro-wide in the San Francisco Bay Area, and initial capabilities available in 50 markets nationwide. In the near term, we remain focused on optimizing our transmitters, firmware, software, and user spectrum to support subsequent commercial deployment in the 2023-2025 time frame. From an international perspective, our approach will remain capitalized, focusing on revenue share of business with partnerships like MedCom and Sony Kyocera. As Gary mentioned, we are the sole licensee of eight megahertz of contiguous low band spectrum, covering approximately 90% of US population. This band sits in the middle of the LTE bands owned by companies such as Antrix, allowing it to be integrated into mobile handsets easily. We have also filed over 100 patents relating to our systems and services. And for those of you that have followed us for a while, we're actually now up to about 123 issued patents. of critical importance as well as is that we have a standardized technology in TerraPoint. This is recognized in 3GPP, which is the Global Telecommunications Standard Setting Body. This combination of assets has resulted in TerraPoint being the only service that has shown the ability to provide equal services to GPS and was ranked to be the highest performing technology in the DOT trials. Looking ahead, we expect next map to become really the global standard for resilient location and timing services. More importantly, our business model in all these cases is very simple. We sell access to our network. How we sell access is optimized for the end user application that leverages it. So it could be made available on a flat monthly fee per transaction fee or revenue share or whatever is the best suited for that application. As a result, we have an exciting business with an expansive competitive advantage. We are thrilled to have the opportunity to build out our offering and bring next generation GPS technology to the masses. With that, let me turn it over to Chris to review our financials.

Chris? Thanks, Ganesh, and thank you, everyone, for joining us today on NextNet's third quarter earnings call. We're excited to share with you our progress over the third quarter and year to date. as well as what makes us excited about our future prospects. Following the close of our transaction with Spartacus, our limited near-term capital expenditures, a debt-free balance sheet, and continuing growth in platform partnerships presents us with tremendous flexibility in the execution of our business. Now, to begin, I'd like to review our third quarter near-to-date financial results, which we summarized in a press release issued earlier today. And are presented in their entirety, not in a 10Q, as some of you may have expected, but an amendment filed today to the 8K that we filed on transaction close. It's a curiosity of the filing requirements associated with the transaction timing that we put our financials into an amended 8K rather than into a 10Q. Our 10K for 2021 will be our first Form 10 filing. Our year-to-date revenue increased 60%. to 0.7 million compared to the same period in 2020, while our year-over-year quarterly revenue increased 38% to 0.3 million. This was driven by increased revenue from new contracts with platform customers, and that's important. We'll talk more about that as we dig in to some of the information here. Our year-to-date operating loss increased by 11.8 million to 28.3 million from 16.5 million for the same period in the prior year, while our quarterly operating loss increased by $1.6 million to $7 million from $5.4 million in the prior year. Now, this year-to-date increase is primarily driven by a non-cash increase in our cost of goods sold related to AT&T's hosting of our Pinnacle Altitude Network. And for the quarter and year-to-date, we have been experiencing increased operating expenses associated with our entry into commercial service in the first quarter. And I think that's important. We just entered commercial service in the first quarter of this year. Now, as a reminder for those unfamiliar with our business, AT&T hosts our pinnacle network in the U.S. at no cash charge to NexMem for rent, power, or data. Our year-to-date net loss increased by $75.1 million to $98.5 million from $23.4 million. And of that increase, $66.7 million was related to warrant vesting and the change in the fair value of warrants carried on the balance sheet. For the quarter, our net loss increased $25.6 million to $32.4 million from $6.8 million for the same period in 2020. And again, the primary driver was an increase in the fair value of warrants by $23.6 million. Now, since many of you are still new to the NextNet story, I'd like to take a moment to discuss our revenue model and plan Going into 2021, to better familiarize you with how we monetize our business across public safety, the app economy, E911, and, of course, our international practice. In general, we offer our services to customers through APIs or SDKs, which are integrated into customer products and then build on a usage basis. As Ganesh highlighted, this specific approach is designed to match our customer business. Customers build our service into their products, and we're generally paid if those products are used. Internationally, we're focused on capital light revenue share relationships with our partners. And for services like E911 for wireless carriers, we generally charge a fixed annual fee, although we do have some flexibility depending on carrier profits. Now, going into 2021, our objective was and continues to be maximizing our exposure to various customer communities through key platform relationships. For example, we're a verified solution partner with Unity, which provides us with exposure to over 1 million active developers worldwide to build their applications with the Unity game engine. In fact, shortly after our Unity relationship was made public, Epic Games provided us with a mega grant to build a plugin for the Unreal Engine, which we just completed and announced in the third quarter. We've highlighted similar relationships through the year and expect to continue to focus on this into 2022. even if these foundational components for our business begin to accelerate usage and revenue. I should also highlight that certain of our platform customers require significant integration work from us to match our service to their preferred operating model. While an API or SDK is the dominant service delivery mechanism in the app economy, additional features are required for some customers with complex operational requirements for services that may not be app-based. With these arrangements, We have the choice to bill in advance of our ability to fully recognize revenue on our income statement, depending on the terms of the contract. This could result in deferred revenue entries on our balance sheet, which may be significant as we begin to ramp our business in 4Q21 and into 2022. Now, before I turn to our outlook, I want to briefly return to our recently completed transaction with Spartacus Acquisition Corp. On October 28, 2021, we consummated the business combination with Spartacus, creating Nexnam Inc. The proceeds from our pipe financing and from the cash held in trust by Spartacus resulted in net cash transaction proceeds after paying deal fees and expenses and the outstanding debt and accrued interest on our balance sheet of $104.2 million. None of the proceeds from the transaction were used to provide liquidity to historical NextNet investors, and 100% of the NextNet holding LLC units were converted into NextNet Inc. common stock. Finally, I'd like to conclude with a few remarks about our outlook. With a debt-free balance sheet and a significant amount of cash generated through the transaction, we have tremendous flexibility in the operation and expansion of our business. As we've discussed previously, our 2021 and 2022 financial performance will be driven by our pinnacle service, which enjoys favorable economics due to our hosting relationship with AT&T and is deployed across the U.S. today. Because the equipment we've deployed is not capacity limited, the growth of that business does not require additional field infrastructure to be deployed for capacity expansion. Now, of course, we do intend to continue to invest in the growth of this business, both domestically and in international markets. And we're also continuing to develop our plans for the launch of our full next generation GPS service, TerraPoint, between 2023 and 2025. As we've previously discussed, TerraPoint expenditures in 2021 and 2022 are modest, focused primarily on optimizing the final commercial transmitter design and ongoing site selection and network planning activities. And our strong balance sheet and license spectrum holdings allow us to maintain control over the pace and scope of that activity from both a capital and technology point of view. We believe our deployed network assets, national spectrum licenses, robust IP portfolio, a growing list of blue chip customers, Early traction in international markets and strong balance sheet provide us with a strong foundation as we look forward to executing on our business in 2022 and beyond. And with that, I'd like to turn it over to the operator for questions.

Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad now. To withdraw your question, please press star followed by two. And when preparing to ask your question, please ensure your device is unmuted locally. Our first question today comes from Tim Horan of Oppenheimer. Tim, your line is open.

Thanks, guys. I had a few questions, if okay. Can you maybe just describe what you need to do to become a platform company or what you're focused on to kind of generate that platform? And then somewhat related to that, can you just talk about maybe any incremental international markets that you think you're looking at or that might be the most logical next step? And then lastly... you know, what milestones should we be focused on or are you focused on over the next kind of, you know, two years for investors? Thanks.

Well, thanks a lot, Tim. And I'm glad to have you on the call here today. Let me hit a couple of those and then I'll probably turn to Ganesh for a few additional ones. As far as milestones, it's kind of interesting because when we've gone through any of the investors, both the analyst day and stuff like that and presentations, We've kind of indicated a little bit of what Chris said in his portion of it. Integration of major platforms that can leverage our capability to increase our reach very rapidly is kind of one of the key underlying factors. We've been very pleased with what that adoption is, the amount of interest is in there. Certainly, we've talked about when you ask what are some of those platforms, well, certainly, I think we've mentioned before on the gaming engine ones, both the Epic Games Unreal one and Unity as well. Certainly, Gimbal on the retail-type apps and the in-stadium types of products. Some of the platforms may also include carrier platforms for E911. Certainly, we integrated into the AT&T and FirstNet uh platforms those are the ones that as you know chris was alluding to earlier take some degree of of network integration or platform integration we generally bill for those kind of up front um and so we can kind of we can have the revenue or get sometimes even the cash but certainly the deferred revenue from it but we may actually on that from um you know from a recognized revenue spread it out over the term of the contract so you i think you'll see some of those as being the key milestones. Certainly other milestones might be additional countries following in Japan's front or other big distribution partners or things of that nature would be, in my view, significant milestones going forward. I guess Ganesh mentioned a little bit in his, but let me turn it over to him on the international front because clearly beyond Japan and the significant progress that METCOM is reaching there, both on a governmental basis, as well as with testing with these various potential customers and their own platform integrations they're doing. You know, there are other countries that clearly are moving along the path as well, too. Ganesh?

Thanks, Gary. Hey, Tim. Yes, good questions. I mean, let me first maybe address your platform question. So, I mean, we designed our capabilities to be the location platform for the future, right? So, that is the approach we've taken in building our capabilities. So, as you've seen in the Pinnacle side, we've got SDKs and APIs that applications integrate into their capability to get access to our services. And we've made it as frictionless as possible by making it available not only for the iOS and Android GMS types of capabilities, but the Unity and Unreal types of platforms also. So the whole idea is it's a frictionless adoption into our platform. But being a platform, we recognize that there are synergies here to be had. And this is integral to our global strategy on the adoption of the Pinnacle system. So, for instance, the capabilities we've built in Japan with our partnership with MEDCOM, they have a Pinnacle network and applications that I mentioned here today, for instance, the SECOM application or the Dentsu, those applications have the benefit of when they come to the U.S., then they get access to the same services quality of capabilities and same set of services that they're used to in Japan. Similarly, applications that are built here in the US that go, for instance, the Unity platform or the Unreal, when they are built for the Japanese market, they get the same benefit of being able to have a global capability from day one. And that starts adding to our the pinnacle service becoming the de facto platform for global next generation GPS-like services. So that is fundamental to our overall strategy, and I think the way we're doing it both domestically and internationally builds it into a cohesive framework. On the international front, in addition to the Japanese market, we are working on a variety of different and proof of concepts, as we mentioned earlier, both in Europe, EMEA primarily, and other parts in Asia. I mean, fundamentally driven by factors such as, you know, the extent of multi-story structures there, the need for these types of capabilities from a public safety point of view. I think there's many countries that have announced similar initiatives as FirstNet in those countries. And so we are actively working on those types of capabilities and partnerships in those markets to realize that we're not currently in a position to announce those yet, but they will be imminent in the near future. So hopefully those addressed your questions on the, I think, the three questions that you had, Tim.

You know, that was great. Just a follow-up on the international and then a question on the infrastructure legislation. So are there – have many other countries set aside spectrum for a product like this or service like this that you know of, or are they looking at it? Are many other countries looking at vertical, not, you know, location-based capabilities for 911? You know, I guess specifically. And then, Jim, the last one, I'll leave you alone. On the infrastructure legislation, was there basically, you know, anything in there that's, you know, that would be directly helpful to your business model? Thanks.

Yeah. So, on the international, I think, front, I would say this. you know, the need for resilient PNT, as we've seen, is global in nature at this point. You know, most countries recognize the need for having the augmentation to GPS, which may be locally controlled or otherwise. And so there is absolutely a trend where many countries are starting to look at creating these capabilities because of the vulnerabilities around jamming and spoofing. This is further aided by the fact that our technology is globally standardized in 3GPP. And so they recognize that this is now available to them as a country. And actually, you know, Japan serves as a wonderful case study of the type of spectrum and partnerships that are possible. So I can't necessarily say that there are countries that have allocated spectrum to address this need immediately, but there are absolutely countries looking at creating these types of capabilities, and we believe they would be taking these types of steps similar to what was done in Japan because of the nature of- Hey, Ganesh.

I'll also, on that particular front, Tim, if you're kind of familiar with how that generally goes internationally- It's not assign spectrum first, then test the capability in a trial. It generally goes the reverse of that. So, yes, there are some countries that are looking at providing some spectrum for proof of concept elements that we may work together on. But then later is when you get the spectrum allocated. So it tends to flow in that sequential order rather than the reverse of that.

Thank you. And any more details on the infrastructure bill yet?

On that front, I would simply say, yeah, the infrastructure bill itself, and I would say also, if you look at the build back better or the soft infrastructure type thing, we don't believe, I mean, nobody knows what's in the second one, but we don't believe there will be specific funding for this particular capability within those. The progress that we see and the positive that we're seeing right now is more on the appropriation side, both in the individual upcoming DOT budgets, as well as, again, those budgets aren't approved, And the defense authorization, I think, is the next week or week after hopeful passing. But clearly, the last look at the language we've seen on that, there are clearly pockets of money for the military for P&T services and resiliency on that front as well, too. So kind of just drawing a differentiation between the two. No standalone specific allocations for P&T and the infrastructure plan. unlikely in the Build Back Better. But once again, we'll all know when we finally see it if it comes through. But more on the ongoing budgetary appropriations, significant progress.

Yeah. So just to be clear, Tim, the appropriations is the standard budgetary process. And so we believe there, you know, depending on how all of that shakes out, there should be strong recommendations there. And the Department of Defense's budget. All of that is subject to final approval by Congress, but we think there's activity there for sure.

Congratulations, guys, and good luck.

Thanks, Tim.

Thank you. As a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad now. Our next question today comes from Mike Crawford of the Riley Securities. Mike, your line is open. Please go ahead.

Thank you. Maybe bringing the focus a little more short term, what are two or three milestones we should look for in the coming months just to measure against your initial revenue ramp?

Well, let me hit an element of that, Mike, and maybe I'll ask Chris to get into it a little bit more when we get to that element as well, too. But we're, as a matter of course, at this point in time, since we've just really kind of gotten into commercial service, we're not going to be providing specific guidance going forward. That being said, You guys have all seen the numbers we've put out there and the expectations of the ramp over the year term, and we're making no changes. And I think an important statement for us, we're not making any changes to that ramp as well. I think we did, I think it was important to understand that when we said that there are likely big lumps sometimes of either cash coming in the door or else a big network integration effort with a platform that comes about, you may see significant differences between the amount that we actually receive or that's in deferred revenue versus maybe a much smaller amount that we're able to recognize revenue on that front. So that's something that could play out over the next several quarters. I mean, obviously, once your revenue gets much, much larger, that's a lesser impact on that. But that's kind of a little bit of view towards it. The other thing, even in the near term, as you say, next weeks or months or something like that coming about, you know, we can only announce deals when we've got them finalized and we have approval to put out press releases. But, you know, hopefully, you know, we certainly have some positive feelings about where we stand with a number of these programs and platforms and customers that we've been talking about in the past. So, you know, hopefully we'll see things upcoming in the near future about that. Chris, would you like to add anything to that or that hit it?

You know, Gary, I thought that was, I thought that just about, I thought that just about covered it.

Could I, I wonder if I could just drag it out a little bit further and just perhaps Ask if there's any color you could provide on the vertical market revenue mix for 2022 consistent with the numbers that you're sticking to that you put out in your business combination.

Well, at least if you're looking at the vertical revenue numbers, I mean, I think we were pretty clear all along while we didn't do breakouts. either between Pinnacle and TerraPoint or even between these market segments other than like the 2026 timeframe, I think we're pretty clear that, you know, 21 and 22, the preponderance of revenue there is going to be on the Pinnacle services, you know, because it purely is a situation where, you know, we have a very modest footprint existing on the TerraPoint segment It needs significant build-out before you're starting to see major traction on that front. And frankly, that build-out is not a, you know, 2022-type standpoint. So, is that helpful? I mean, we're not – once again, we're not providing, you know, specific anticipated percentages, but, you know, it will be – the vast preponderance will be coming from vertical and pinnacle services. right i meant by market vertical like public safety and apps which is kind of my expectation for 2022 but those would be the biggest components of the pinnacle revenue in that year but uh again at this point in time we're we're not providing guidance on that level of granularity to it you know certainly if we were further along in our process we had real good you know, visibility into each one of the segments and what their track histories are. It's also complicated, again, Mike, by a little bit of what we said in the earlier with Tim as well, too. When you have lumped types of large platform integrations that occur that may, you know, add significant revenue over and above what your run rate is by a particular area, on a quarter-by-quarter basis, it gets very difficult for us to say, oh, well, this one's going to come from this segment versus another segment, and then we sign a big contract and get a big, you know, network integration fee up front for that, and it would distort it. So we just think it's better to not try to add significant granularity. I, you know, hopefully, but folks take significant comfort in the fact that we're also not at all, you know, changing what we've shown as far as prior numbers that were put out during the S-4 and roadshow process.

And then just switching gears, so overnight it's been confirmed or at least alleged by state departments that Russia conducted an anti-satellite missile test that destroyed one of their old defunct satellites and created over 1,500 pieces of trackable orbital debris and other stuff.

They sure did.

I'm sure... That's going to light maybe a fire under people looking for backup GPS. And you said, well, it's hard to predict what the DOD or Congress is going to do. But what about directly with large investor-owned utilities like NextEra, Duke, Southern, et cetera? Are you talking with them directly, or do they need to have some kind of a push?

Well, I think all of the commercial stuff, and industrial folks, they're sort of looking for the government to take the lead on some of these things. Certainly, the government has taken the lead on the testing and analysis of what's to be done and moving forward from that standpoint. But also, they need to know exactly when the network's going to be available and from that standpoint. yeah the you know the instance you mentioned i mean everyone in the military and in strategic national security understand the ability to do it it certainly opens your eyes when they blow the damn thing up and and endanger the international space station at the same time frame now that was in a 400 kilometer um uh orbit um which is slightly below the the space station and certainly is below the the neos that the the gps satellites are in but Yes, it was a highly visible incident just one day ago that reinforces the vulnerability that exists in the GPS community.

I'll just go with one more if you don't mind. So SharePoint seems to work with five megahertz of spectrum of timing broadcast over into your spectrum. And so can't you look to repurpose what

i consider to be excess three megahertz so here's robin spectrum that you know just in the us that's 900 million megahertz pop of spectrum um you know an accurate observation and obviously we've mentioned before that metcom was only using five megahertz uh there and that's what japan allocated Certainly one of the two licenses that we're operating with right now is 5 megahertz license, and the entire thing could be compressed into that. So it's an accurate observation. We've tried to, at least at this point in time, not foreshadow what we might or might not do with other spectrum assets. I think I did note in my remarks that the elimination of all of our debts and the old fortress facility does certainly free up encumbrances that were there on the spectrum licenses previously and so that does uh you know provide us a greater degree of flexibility but you know i also when i'm when i'm trying to really candidly address your question i don't want folks to just jump over to the other side and say oh they're planning to sell off or lease off this excess spectrum yeah it's it It's certainly an asset that we all know and understand is valuable. We've brought it into full compliance by utilizing both the three megahertz as well as the five megahertz segments that were there. But at this point in time, the first important thing was to ensure that we didn't have any encumbrances on that spectrum or those licenses. And then secondly, we'll continue to explore various, I won't say repurposing, but various use of spectrum as we optimize our TerraPoint transmitters that I think you heard Ganesh referencing to ensure that we have highly efficient use of our spectrum and we make maximum value use of our spectrum, whether it be within the existing architecture or altered our architecture.

Okay. Well, excellent. Thank you very much.

Thank you. We have no further questions in the queue, so I'll hand back to Ganesh Patibaraman for closing remarks.

Thank you, Lydia. Well, thank you, everyone, for joining us today on NexNav's third quarterly earnings call. As I mentioned earlier, this is a momentous occasion for us, and we look forward to continue to build on our progress on the platform and services And we look forward to sharing more details with you on our next earnings call. And with that, I will thank you all for the participation today. Back to you, Lydia.

This concludes today's call. Thank you for joining us.