Q3 2023 NextNav Inc Earnings Call

Ladies and gentlemen.

Speaker 1: Thank you for standing by. My name is Sherrell, and I will be your conference operator today. At this time, I would like to welcome Erie Wombe to the next NAS Q3 23 Ernst Conference call.

Thank you for standing by my name is Sharelle and I'll be your conference operator today.

At this time.

Like to welcome everyone to the next Q3 'twenty earnings Conference call.

Speaker 1: All lines have been placed on mute to prevent any background noise.

All lines have been placed on mute to prevent any background noise.

Speaker 1: At those speakers remarks, there will be a question and answer session. If you would like to ask the question during this time, simply press star, follow it by the number one on your telephone keypad.

After the Speakers' remarks, there'll be a question and answer session if you'd like to ask a question. During this time.

Simply press Star followed by the number one on your telephone keypad.

Speaker 1: If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Erica Barsh. Please go ahead.

If he would like to withdraw your question Press Star one again.

Yeah.

I would now like to turn the call over to Erica Bartsch. Please go ahead.

Good afternoon, everyone and welcome to <unk> third quarter 2023 earnings Conference call.

Participating on today's call are Gary Parsons next Nash Chairman Dinesh coffee Raman next <unk> co founder and CEO and Christine next NAV 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.

Speaker 2: 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.

And an answer session in.

In particular such forward looking statements May include statements about next now its business plan objectives.

Vacations and intention to drive growth and its three D geolocation businesses and expansion of its next generation G. P. F platform now.

The value of its IP portfolio and spectrum its international business as well as next now partnerships and the potential success thereof.

Speaker 2: NextNav's estimated and future business strategies, competitive positions, industry environment, and other potential growth opportunities.

Estimated and future business strategy competitive position industry environment and other potential growth opportunities.

Speaker 2: 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 next-naz control that could cause actual results to differ materially from the results discussed in the forward-looking statement.

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 <unk> control that could cause actual results to differ materially from the results discussed in the forward looking.

Right.

Speaker 2: 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.

These statements may relate to but are not limited to expectations regarding our strategies and future financial performance, including future business plans and objectives expected functionality of our geolocation services anticipated timing and level of deployment of our services anticipated demand and acceptance of our services.

Speaker 2: perspective performance and commercial opportunities and competitors.

Perspective performance in commercial opportunities and competitors the timing of obtaining regulatory approval commercial partnership acquisition and retention products and services pricing marketing plans, our ability to realize the anticipated technical and business benefits associated acquisition and any subsequent <unk>.

Speaker 2: The timing of obtaining regulatory approval, commercial partnership acquisition and retention.

Speaker 2: Products and services, pricing, marketing plans, our ability to realize the anticipated technical and business benefits, associated acquisitions, and any subsequent mergers, acquisitions, or other similar transactions.

<unk> acquisitions or other similar transactions.

Speaker 2: factors relating to our future operations, projected capital resources and financial positions, 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 property technology.

Relating to our future operations projected capital resources and financial position.

<unk> revenue and losses.

<unk> costs and capital expenditures and expectations about international markets.

<unk> of market growth in size, including the level of market acceptance for our services our ability to adequately protect key intellectual property rights or property technology, our ability to maintain our location monitoring excuse me location and monitoring service licenses and obtain additional LMS licenses as necessary.

Speaker 2: Our ability to maintain our location monitoring, location and monitoring service licenses, and obtain additional LMS licenses as necessary.

Speaker 2: our ability to maintain adequate operational financial resources, including for research and development, or raise additional capital or generate sufficient cash flows.

Ability to maintain adequate operational financial resources.

For research and development or raise additional capital or generate sufficient cash flows our ability to develop and maintain effective internal control our success in recruiting and retaining officers.

Speaker 2: our ability to develop and maintain effective internal controls, our success in recruiting and or retaining

Speaker 2: the employees or directors, expansive plans and opportunities, cost 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, unknown litigation and regulatory proceeding, as well as assumptions relating to the foregoing.

He employees or directors.

Pension 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.

Speaker 2: 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 securities laws.

Speaker 2: 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 next-next-charm and Gary Parsons.

During our prepared remarks, the company will host an operator like 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 <unk> Chairman Gerry Parsons. Please go ahead.

Speaker 3: Thank you very much, Erica. And good afternoon, everyone. Welcome to next nav's record call. Is there a convention joining me on today's call is Ganesh Pataparaman, next nav co-founder and CEO and Chris Gates, next nav's executive vice president and chief financial officer. This past quarter saw significant progress on the number of our key initiatives.

Thanks, very much Eric and good afternoon, everyone and welcome to the <unk> third quarter call.

As Eric mentioned joining me on today's call is goodness without Roman <unk> co founder and CEO and Chris Gate next node as executive Vice President and Chief Financial Officer.

This past quarter saw significant progress on a number of our key initiatives both on the spectrum and with continued public safety and GPS resiliency efforts.

Speaker 3: both on the spectrum part and with continued public safety and GPS resilience.

Speaker 3: You know, Ganesh will provide more detail on, like, individual contracts and government agency activities, but from an overall strategic perspective, I'm frankly pleased with the ongoing traction of our government and public safety efforts. Both on the E911, you know, 3 dimensional geolocation front. And with the growing consensus on GPS vulnerabilities and the true need for PNT or GPS resiliency to protect critical infrastructure.

Oh goodness will provide more detail on like individual contracts and government agency activities, but from an overall strategic perspective.

Frankly pleased with the ongoing traction of our government and public safety efforts.

Both on the 9113 dimensional Geo location front and with the growing consensus on GPS vulnerabilities and the true need for P&C or GPS resiliency to protect critical infrastructure.

Speaker 3: NextNav is the acknowledged leader in this area, and we see growing opportunities to expand that leadership position, both here in the United States as well as around the world.

Nab is the acknowledged leader in this area.

And we see growing opportunities to expand that leadership position both both here in the United States as well as around the world.

Speaker 3: A number of these were sent to GPS or position navigation and timing P and T initiative.

A number of these resilient GPS or position navigation and timing PNT initiatives.

Speaker 3: or either demonstration programs or initial implementation that are expected to lead to expanded deployment and future phases. Chris will get into that in more detail in his text.

Or either demonstration programs or initial implementations that are expected to lead to expanded deployment and future phases, Chris will get into that in more detail in his section. Additionally, as we've shared in prior quarters. The specifics of some of these programs, including the contracting agencies all remain confidential.

Speaker 3: Additionally, as we've shared in prior quarters, the specifics of some of these programs, including the contracting agencies, all remain confidential at this stage due to national security issues. But we will try to share as much insight as we can consistent with those non-disclosure responsibilities.

At this stage due to national security issues, but we will try to share as much insight as we can consistent with those non disclosure responsibilities.

Speaker 3: As the team will discuss in more detail several of these opportunities involved partnerships, either with state federal agencies or leading research universities responding to RFP's or RFIs in advance of the executive order 13-905 finalization.

As the team discussed in more detail several of these opportunities involve partnerships.

With state and federal agencies are leading research universities.

Spawning into RFP or advised in advance of the executive order 13 905 Finalization.

Speaker 3: From a purely political standpoint, it probably is worth reiterating the substantial bipartisan support that continues to exist for the securing the nation's critical infrastructure and providing a resilient layer to GPS.

From a purely political standpoint, it probably is worth reiterating the substantial bipartisan support that continues to exist with the securing the nation's critical infrastructure and providing the resilient layer to GPS.

Speaker 3: Regardless of the continuing uncertainty in the federal government, you know, over all budgeting process, there is clear support for current and even growing funding for these initiatives. We expect substantial revenue growth from this sector as we go through 2024.

Regardless of the continuing uncertainty in the federal government you know overall budgeting process. There is clear support for current and even growing funding for these initiatives. We expect substantial revenue growth from this sector as we go through 2024.

Speaker 3: Next, on the spectrum front. A last quarter's call, you remember, we announced the granting of an FCC experimental license and this close that we would design and deploy a 5G Terrapoint network in the Bay Area.

Next on the on the spectrum front.

Last quarter's call you remember, we announced the granting of an FCC experimental license.

<unk> disclosed that we would design and deploy.

<unk> G <unk> network in the Bay area.

Speaker 3: We have now in fact now deployed a network in Palo Alto, California, capable of numerous 5G carrier bandwidth power levels and has begun a formal testing program.

We have now in fact now deployed network in Palo Alto, California capable of numerous <unk> carrier bandwidth power levels and have begun a formal testing program.

Speaker 3: We expect that those testing results will validate our ability to provide highly reliable 3D geolocation and resilient P&T capabilities using a 5G waveform while simultaneously using the 5G signal for significant data throughput.

We expect that those testing results more validates our ability to provide highly reliable three the geolocation and resilient pnp capabilities using supply D wave form.

While simultaneously using the <unk> signal for significant data throughput.

Speaker 3: We expect that testing program to be largely complete by the end of this year, following which we would expect to file for appropriate license waivers with the SEC to provide commercial service using these configurations.

We expect that testing program to be largely complete by the end of this year.

<unk>, which we would expect to file for appropriate licensed flavors with the FCC.

To provide commercial service using these configurations.

Speaker 3: Overall, a solid quarter of progress towards our key strategic priority. And with that, let me go ahead and turn it over to Dinesh to go into more depth on the recent contract awards and our operational performance on government and public safety efforts, both with Pinnacle and TerraPoint services. Dinesh.

<unk>, a solid quarter of progress towards our key strategic priorities and with that let me go ahead and turn it over to Dennis to go into more depth on the recent contract awards and our operational performance on government and public safety efforts, both with critical <unk> services Dinesh.

Thanks, Gary and good afternoon, everyone.

Speaker 3: It's been another productive quarter, and we're seeing growing momentum out of key partners and federal and state government agencies as the need for solutions tied to P&T resilience grows in importance.

It's been another productive quarter, and Youre seeing drawing momentum out of key partners and federal and state government agencies.

The need for solutions tied to PMT resilience grows in importance.

Speaker 3: Notably, in September , we participated at ION, or the Institute of Navigation Conference in Denver, where we demonstrated our TerraPoint hybrid system's timing and 3D positioning capabilities, leveraging LT signals from cellular operators.

Notably in September we participated at ion are the Institute of Navigation Conference in Denver.

We demonstrated our <unk> hybrid systems timing and TD positioning capabilities, leveraging LTE signals from cellular operators, while at the conference we were able to meet with government officials from the Department of Transportation Department of Homeland Security and Department of energy and other partners and held very productive.

Speaker 4: While at the conference, we were able to meet the government officials from the Department of Transportation, Department of Homeland Security and Department of Energy and other partners and help very productive conversation.

Monetization.

Speaker 4: This reinforce our belief that the government is now actively moving from discussion towards tangible action phase.

This reinforces our belief that the government is now actively moving from discussion towards tangible action phase.

Speaker 4: At the same conference, the Department of Transportation announced its complementary P&T action plan. The plan lays out the key milestones, timelines, and establishment of a P&T Services Clearinghouse or P&T Marketplace.

At the same conference the department of Transportation announced its complementary PMT action plan the.

The plan lays out the key milestones timelines and the establishment of a PNT services clearinghouse or P&C marketplace.

As part of the framework, we see issuing rfps in the coming months that will sponsor several initial implementations of Brazilian Pnp systems, like Terra point and critical infrastructure providers of coupons.

Speaker 4: As part of this framework, we see DOT issuing RFPs in the coming months that would sponsor several initial implementations of Brazilian P&T systems, like TerraPoint, in critical infrastructure providers like you.

Speaker 4: This is to establish a framework for complementary P&T systems to operate in conjunction with GPS and GNSS systems that may be in operation today.

This is to establish a framework for complementary PMT systems to operate in conjunction with the GPS and <unk> test systems that may be in operation today.

Speaker 4: A good example of this is in the telecommunication systems, we could see both GPS and complementary P&T systems based timing to be integrated as part of the core infrastructure of the operator and to ensure that the two systems can function in a seamless manner.

A good example of this is in the telecommunication systems, we could see both GPS and complementary PNT systems.

Based timing to be integrated as part of the core infrastructure of the operator and to ensure that the two systems can function in a seamless manner.

The data also plans to establish a clear designated clearinghouse for federal users and critical infrastructure operators.

Speaker 4: The DOT also plans to establish a clear designated clearinghouse for federal users and critical infrastructure operators.

Speaker 4: This would be a place to find a list of vetted and qualified complementary P&T providers like next that to help advance their resilient P&T needs and procure services to be in compliance with Executive Order 13905 beginning in 2025.

This would be a place to find the list of vetted and qualified complementary PMT providers like next.

To help advance the resilient TNT needs and procure services to be in compliance with executive order 13 905, beginning in 2025.

Speaker 4: This is very similar to the federal acquisitions process, where a pre-readed list of technologies is made available for different federal government agencies to procure again.

This is very similar to the federal acquisitions process read a pre embedded list of technologies is made available for different federal government agencies to procure against.

Speaker 4: Here the intent is broader to not only affect federal government acquisition, but also critical infrastructure operators and eventually commercial entities too.

Third the intended broader to not only affect federal government acquisition, but also critical infrastructure operators and eventually commercial entities too.

Okay.

Speaker 4: In essence, what we see in 2024 and the early part of 2025 are funded initial implementations in various critical infrastructure

In essence, what we see in 2024 and the early part of 2025.

Our funded initial implementations and various critical infrastructure.

Well.

Speaker 4: use cases that will pay the way for wider adoption across the state.

Use cases, they'll pave the way for.

Wider adoption across sectors. These.

Speaker 4: These timelines and frameworks are captured in our investor deck on slide slide.

These timelines and frameworks are captured in our investor deck on.

Slide five.

As we noted last quarter, we're starting to see many state and federal agencies begin to take proactive steps towards building PMT resilience.

Speaker 4: As we noted last quarter, we're starting to see many state and federal agencies begin to take proactive steps towards building P&T resilience.

Speaker 4: As part of that strategy, I'm happy to report that we recently signed a contract to support the federal government in their P&T strategy.

As part of that strategy I'm happy to report that we recently signed a contract to support the federal government and their PMT strategy.

Well, we can't speak to the specifics of the contract due to the sensitive nature of our work. We can say that the project will leverage our existing infrastructure to provide persistent PMT characterization initially in select markets around the country.

Speaker 4: While we can't speak to the specifics of the contract due to the sentiment and nature of our work, we can say that the project to leverage our existing infrastructure to provide persistent P and T characterization initially in select markets around the country.

Speaker 4: And upon successful completion of this phase, we expect to expand our capabilities nationwide. And this would likely represent our largest contract to date.

And upon successful completion of this phase, we expect to expand our capabilities nationwide.

And this would likely represent our largest contract to date.

In addition, many state and federal agencies and critical infrastructure providers are taking steps towards commercial implementation or frozen in PMT systems.

Speaker 4: In addition, many state and federal agencies and critical infrastructure providers are taking steps towards commercial implementation of resilient P&T.

Speaker 4: using federally funded test beds and in some cases plant around commercial enablement in anticipation of procurement language for executive order 1390.

Using federally funded test beds and in some cases plant around commercial enablement in anticipation of procurement language for executive order 13 905.

Speaker 4: For instance, we have submitted multiple proposals in partnership with state and local agencies.

For instance, we have submitted multiple proposals in partnership with state and local agencies as.

Speaker 4: as well as research university in areas as diverse as timing for land mobile radio systems with Texas and automotive use cases with Ohio. As part of smart and cybersecurity grants sponsored by Department of Transportation and Department of Homeland Security Dispect.

As well as research University in areas as diverse as timing for land mobile radio systems with Texas.

Automotive use cases, with Ohio, as part of Smart and cyber security grants sponsored by the Department of Transportation and Department of Homeland Security respectively.

We expect to be notified of the status of many of these opportunities over the coming months and in the first half of 2024.

Speaker 4: We expect to be notified of the status of many of these opportunities over the coming months and in the first half of 2020.

Speaker 4: I must add here that although the process of implementing the complementary P&T strategy is going smoothly within the department's

I must add here that although the process of implementing the complementary Scott P&C strategy is going smoothly, but then the departments and agencies we.

Speaker 4: We do see a short-term impact from the current stalemate in Congress, including the release of procurement language in support of Executive Order 13905.

We do see a short term impact from the current stalemate in Congress, including the release of procurement language.

Support of your executive order 13 900 <unk>.

We now anticipate this order will be released in Q1 of 2024.

Speaker 4: we now anticipate this order will be released in Q1 of 2024. However, we currently don't see that impacting either the overall 2025 implementation timeline or the grants to be issued in 2024.

However, we currently don't see that impacting either the overall 2025 implementation timeline or the brands to be issued in 2024.

Turning now to our clinical technology, we continue to see ongoing progress in the <unk> 911, and public safety don't mean.

Speaker 4: Turning now to our pinnacle technology, we continue to see ongoing progress in the E911 and public safety dome.

Speaker 4: Notably, we recently announced an agreement with the iris flip phone, which will be sold on consumer stellar. 1 of the largest or mobile virtual network operators in the country. This is our 1st.

Notably, we recently announced an agreement with the Iris flip phone, which will be sold on consumer stellar one of the largest nbn those are mobile virtual network operators in the country.

This is our first device with this carrier.

Beyond this agreement Verizon is continuing to expand its integration of clinical services.

Speaker 4: Beyond this agreement, Verizon's continuing to expand the integration of physical services across devices on their portfolio. And we expect to reach double-divit device models with them in the coming years.

Cross devices on their portfolio and we expect to reach double digit device models with them in the coming months.

Speaker 4: With these arrangements, we are now contracted to be on five wireless carriers across the country, including the top four nationwide carriers.

With these arrangements we are not contracted to be on five wireless carriers across the country, including the top four nationwide carriers.

As we have shared before we operate through different business models, depending on the specific carrier.

Speaker 4: As we have shared before, we operate to different business models, depending on the specific carry.

Speaker 4: In some cases, we have agreements at the carrier level for all devices within their portfolio, or we just have a licensing model for each device sold for the life of that specific device.

Some cases, we have agreements at the carrier level for all devices within their portfolio or we just have a licensing model for each device.

For the life of that specific device.

Speaker 4: Either way, these relationships put us in a clear leadership position in 911 and public safety domain.

Either way it these relationships put us in a clear leadership position in 911 and public safety domain.

Speaker 4: And as we move forward, we look forward to bringing more adoption and integration of pinnacle technology to additional devices.

And as we move forward, we look forward to bringing more adoption and integration of our clinical technology to additional devices.

On the international front with the U S government moving forward with initial test beds, we expect to see similar actions from foreign governments as well.

Speaker 4: On the international front with the US government moving forward with initial test beds, we expect to see similar action from foreign government as well.

Speaker 4: In Japan, the Japanese Ministry of Information Communication or Ministry of Internal Affairs and Communication is going through a public comment period on the specs.

In Japan, the Japanese Ministry of information and communication.

The Ministry of internal Affairs, and communications is going through a public comment period on the spectrum.

Which is likely to be followed by the ICC or information and communications Council process.

Speaker 4: which is likely to be followed by an ITC or information and communications accounts suppressed.

Speaker 4: In Europe , the European Commission has part of the recommendation on critical technology ADS for EU with economic security included P&T as a critical technology.

In Europe, the European Commission as part of its recommendation.

On critical technology areas for EU economic security included PNT as a critical technology.

Speaker 4: This now leads to a consultation phase with number of states before moving to the EU legislation.

This now leads to a consultation phase with a number of states before moving to the EU legislation fees.

Speaker 4: And in the UK, the British government recently released a PNT policy framework and a plan around PNT with the...

And in the U K the British government recently released a PNT policy framework and the plan around PMT resilience.

Speaker 4: You know, we feel very energized by the activities we're seeing across the US government and globally as the importance of P&T with the Lianz Gain Straction.

In all we feel very energized by the activities were seeing across the U S government and globally is the importance of PMT resilience gains traction.

Speaker 4: We believe we have a real opportunity to be a leader in this area and the growing roster of partnerships and agreements is a testament to this fact.

We believe we have a real opportunity to be a leader in this area and the growing roster of partnerships and agreements is a testament to this fact.

Speaker 4: With that, I'll turn it over to the call to Chris, Chris.

With that I'll turn it over to.

The call to Chris Chris.

Speaker 5: Thanks, Ganesh. Good afternoon, everyone. Thank you for joining us for our third quarter earnings.

Thanks can I ask you. Good afternoon, everyone. Thank you for joining us for our third quarter earnings call as both Gary and Ganesh highlighted we made important progress in our efforts to expand the utilization of our spectrum licenses in the third quarter.

Speaker 5: As both Gary and Ganesh highlighted, we made important progress in our efforts to expand the utilization of our spectrum licenses in the third quarter and are starting to see tangible results from the P&T resiliency programs underway in federal government.

Good to see tangible results from the PSC resiliency programs underway and the central government.

Speaker 5: With respect to our financial results, 3rd quarter revenue increased 104% to 1.0M compared to 500,000 in the prior year period, primarily due to an increase in recurring revenue from technology and services contracts with commercial customers.

With respect to our financial results third quarter revenue increased 104% to 1.0 million compared to 500000 in the prior year period, primarily due to an increase in recurring revenue from technology and services contracts with commercial customers.

Sequentially revenue was up two hundreds out year to date revenue decreased 15% to $2 7 million versus the prior year period, driven by decreased integration revenue, partially offset by an increase in recurring service revenues from technology It services contracts with commercial customers.

Speaker 5: sequentially revenue was up 200,000. Year-to-date revenue decreased 15% to 2.7 million versus the prior year period, driven by decreased integration revenue partially offset by an increase in recurring service revenue from technology and services contracts with commercial costs.

Speaker 5: Our operating expenses were 15.6 million, down from 18.4 million in the same period last year. With much of the difference due to lower stock base compensation expense partially offset by higher depreciation and amortization.

Our operating expenses were $15 6 million down from $18 4 million in the same period last year with much of the difference due to lower stock based compensation expense, partially offset by higher depreciation and amortization.

Speaker 5: excluding stock-based compensation and depreciation and amortization operating expenses were $10 million compared to $10.9 million in the prior period and $10.3 million in the second quarter of 2023.

Excluding stock based compensation depreciation and amortization operating expenses were $10 million compared to $10 9 million in the prior period and $10 3 million in the second quarter of 2023.

Year to date operating expenses were $46 $3 million down from $54 1 million in the prior year with the reduction driven by the same drivers excluding stock based compensation and depreciation and amortization year to date operating expenses were essentially flat at $30 $1 million in the current period at $30 9 million in the prior year.

Speaker 5: Year-to-date operating expenses were $46.3 million, down from $54.1 million in the prior year, with a reduction driven by the same drivers. Excluding stock-based compensation and depreciation and amortization, year-to-date operating expenses were essentially flat at $30.1 million in the current period and $30.9 million in the prior year.

Third quarter net loss was $23 2 million compared to a loss of $18 7 million in the prior year.

Speaker 5: third quarter net loss was $23.2 million compared to a loss of $18.7 million in the prior year. The primary drivers for the increase were net interest expense

Primary drivers for the increase were net interest expense of $1 7 million.

Speaker 5: and to change in the fair value of our warrant liability of 6.7 million. Compared to net interest income of 0.3 million and to change in the fair value of warrant liability of 1 million in the prior year.

And the change in the fair value of our warrant liability of $6 7 million compared to net interest income was <unk> 3 million and a change in fair value of warrant liability of $1 million in the prior year.

Speaker 5: Year to date, net loss is 55.3 million as compared to a loss of 27.6 million in the prior year period. Here again, the primary drivers were net interest expense of 1.6 million and a loss associated with the change in fair value of our warrant liability of 9.8 million compared to net interest income of 0.4 million and a gain associated with the change in fair value of our warrant liability of 23.2 million in the prior year.

Year to date net loss was $55 3 million as compared to a loss of $27 6 million in the prior year period here again. The primary drivers were net interest expense of $1 6 million and a loss associated with the change in fair value of our warrant liability of $9 8 million compared to net interest income of zero point $4 million and a gain associated with the change in.

Fair value of our warrant liability of $23 2 million in the prior year.

Touching on our balance sheet. We've previously covered the $20 million of additional senior secured notes and I note that we finished the quarter with $97 1 million in cash cash equivalents and short term investments.

Speaker 5: Fetching on our balance sheet, we've previously covered the $20 million of additional senior secured notes. And I note that we finished the quarter with 97.1 million in cash, cash equivalents and short term investments.

Speaker 5: Also included in that amount is $882,000 of warrants strike price exercise. As you may recall, the warrants we issued as part of our debt financing are only exercisable for cash.

So included in that are included in that amount is 882000 or strike price exercise as you may recall the warrants we issued as part of our debt financing are only exercisable for cash.

Speaker 5: and partially callable beginning in 2025. Whether called or exercised otherwise, these warrants may provide a source of additional liquidity as they did in the current quarter.

Partially call it at the beginning of 2025, whether called or exercised otherwise. These warrants may provide a source of additional liquidity as they did in the current quarter.

Speaker 5: As we've stated in the past, we continue to closely manage and refine our cost base as we build value in our assets and bring new customers into service. I'd also like to provide some additional insight into the revenue side of the federal and state government activities process highlighted by Gary.

As we've stated in the past we continue to closely manage and refine our cost base as we build value in our assets and bring new customers into service.

I'd like to provide some additional insight into the revenue side of the schedule that state government activities and process highlighted by Gary can give ash.

Speaker 5: The first contract discussed like a Nash is in implementation with an initial phase covering a limited number of metropolitan markets with a potential to approach half a million dollars through 2024, starting in the fourth quarter of this year. If the second phase is contracted, it would be expected to encompass a broader geographic area and could be our largest single contract to date, approximately an order of magnitude greater than the initial phase.

The first contract discussed back in Nash is an implementation with an initial phase covering a limited number of metropolitan markets with the potential to approach half a million dollars through 2024, starting in the fourth quarter of this year.

The second phase is contracted.

It would be expected to encompass a broader geographic area and it could be our largest single contract to date, approximately an order of magnitude greater than the initial phase.

While complementary PMT remains at the earliest stages of adoption.

Speaker 5: While complimentary P&T remains in the earliest stages of adoption.

Speaker 5: We are pursuing additional state and federal grant programs for 2024.

We are pursuing additional state and federal grant programs for 2024.

Speaker 5: Under these programs, then in partnership with Federal or State entities, we will begin implementation of our complimentary P&T services in support of different applications and use cases. That's Ganesh highlighted previous.

Under these programs that in partnership with federal or state entities, we will begin implementation of our complementary PMT services in support of different applications and use cases as Ganesh highlighted previously.

Speaker 5: We expect per contract, per grant values in this phase to range from hundreds of thousands to low millions with durations between one and two years. This will set the foundation for service provision over longer durations, broader geographic areas, and substantially larger grant or contract amounts starting in late 2024-2025. Finally, we anticipate incorporation into DOT's complementary P&T clearinghouse.

We expect per contract per grant values in this space to range from one hundreds of thousands to low millions with durations between one and two years. This will set the foundation for service provision over longer durations broader geographic areas are substantially larger grants or contract amounts starting in late 2020 for 2025 finally.

We anticipate incorporation into Dot's complementary PMT clearinghouse.

Speaker 5: Which, as Ganesh highlighted, should result in streamlined procurement of our services at the federal level beginning in 2025 and broader based integration of our resilient P&T capabilities across federal, state and critical infrastructure sectors in 2025 and beyond. Thank you. And with that, I'll hand the call back over to Ganesh.

Which is good as highlighted should result, streamline procurement of our services at the federal level, beginning in 2025 and broader based integration of our resilient PNT capabilities across federal state and critical infrastructure sectors in 2025 and beyond.

Thank you and with that I'll hand, the call back over to the operator for questions.

At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Speaker 1: At this time, I would like to remind everyone, in order to ask a question, press stars and the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster.

We will pause for just a moment pickup opportunity rapidly.

Yeah.

Speaker 1: Our first question comes from the line of Griffin Balls with Be Rally Securities. Griffin, your line is open.

Our first question comes from the line of Christian Buss with <unk> Securities. Your line is open.

Hi, Thanks for taking my questions. So just first can you give a little bit more color on where you're at with regards to.

Speaker 6: Hi, thanks for taking my questions. So just first, can you give a little bit more color on where you're at with regards to the testing and collecting the requisite data for the FCC? I know you said you hope to finish this testing by the end of the year, but I guess what would, what could happen that would push the testing process into 2024? Or what's your level of confidence that you can gather the appropriate data by then?

The testing and collecting the requisite data for the FCC I know you said.

You hope to finish this testing by the end of the year, but I guess, what would what could happen that would push the testing process into 2020 for what's your level of confidence that you can gather the appropriate data by then.

Speaker 3: Thanks for the question, Griffin. And obviously that the results of that testing, we won't prematurely announce. I mean, we'll announce it when we...

Thanks for the question Griffin and obviously that.

The results of that testing, we won't prematurely announce.

We will announce it when we.

Speaker 3: essentially include the results of that with the filings we'll make with the FTC. So, at least from your own planning purposes, and when we'll be public about that, that's when we would do that, you know, and it's, I quite frankly am very pleased with how quickly we were able to both secure approval from the FTC for the changes that we requested for the experimental license.

Essentially include the results of that with the filings will make with the SEC. So at least from your own planning purposes.

When will be public about that that's that's when we would do that.

<unk>.

I quite frankly.

I'm very pleased with how quickly we were able to both secure approval from the FCC for the changes that we requested for the experimental license.

Speaker 3: And then also, I mean, I know you guys have been around telecom operators turning up networks and 5G network, our ability to actually design it, procure the equipment and get it in place there in the Palo Alto area. Over literally a 3 or 4 month process, I'm very pleased with.

And then also I mean, I know you guys had been around telecom operators, turning up networks and <unk> networks, our ability to actually design as procure the equipment and get it in place there and the Palo Alto area over literally three or four months process.

We are pleased with so.

Speaker 3: So, you know, the network itself has only turned up and we're in the process of testing that testing. And you can, if you reviewed our experimental license approvals from the, you'll see that we're actually going to be testing a number of different configurations.

The network itself.

<unk> has only turned up and we're in the process of testing.

That testing.

And you can if you reviewed our experimental license.

Approval from the FCC, you'll see that we're actually going to be testing a number of different configurations.

Speaker 3: including eight contiguous, as we've talked about before, which could be used as, say, a supplemental downlink configuration or five megahertz bands at the lower end of our band, the middle and the upper end of our band. We'll be looking at different power levels, including the existing power levels that we're authorized for, as well as higher power levels that we believe we can still do without creating undue interference to neighbors.

Including eight contiguous as we've talked about before which could be used as a supplemental downlink configuration or five megahertz band at the lower end of our band and that opened the upper in the bar band will be looking at different power levels, including the existing power levels that were authorized for.

As well as higher power power levels that we believe we can still do without.

Creating undue interference to nabors.

Speaker 3: So it's a pretty good combination of testing programs. So, you know, I don't want to, that's why I said, largely complete by the end of the year. That's what we're hoping to do. If we see results from that, it causes us to want to change power level, the duty cycles, whatever else it may be, then it could trickle over, you know, a little bit more than that. But it's going on a pretty good day. So, you know, it's going on a pretty good day.

No.

It's a pretty good combination.

Testing program. So I don't want to that's why I said largely complete by the end of the year. That's what we're hoping to do if we see results from that that caused us to want to change our power levels duty cycles whatever else. It may be then it could it could trickle over.

Little bit more than that but.

It's going on at a pretty good pace.

Speaker 3: and we're pleased with where it stands right now. Again.

And we're pleased with where it stands right now again.

Speaker 3: I won't comment on the results of that testing until it's complete. And we do make the necessary filings with the.

Wont comment.

The results of that testing until it is complete and we do make the necessary filings with the SEC.

Speaker 6: Okay, that makes sense. And so would there be a delay, let's say, like, in terms of the, whenever you complete testing, are you, would you expect to file the, those filings with the FCC immediately? Are you working on those concurrently? Or is it going to take some time?

Sure Yeah, Okay that makes sense and so.

Would there be a delay, let's say like in terms of.

Whenever you complete testing are you would you expect to file the those filings with the FCC immediately.

Are you working on those concurrently or.

Is it going to take some time.

Speaker 3: in order to put this together? Let's see. As immediately as possible. Clearly, we are working on those filings already. So we are doing that on a parallel basis is what we would expect to file. But as you can imagine, some of the actual finalization of what we would request and how we would best like it configured is going to depend on the results of the test.

In order to say, yes.

Let's see.

As immediately as possible.

Clearly we are working on those filings already.

So we are doing that on a parallel.

Our basis is what we would expect to file but as you can imagine some of the actual finalization of what we would request and how we would best like it configured.

And on the results of the testing.

Speaker 3: So, you know, we, we will have to wait to get the final of that into place before we finalize the thing. But, you know, candidly, I think it's, um. It's something that would not take too much longer beyond the.

We will have to wait to get the final list of that in place before we finalize the thing, but candidly I think it.

It's something that would not take too much longer beyond the.

Speaker 3: the completion of testing before we actually put in, and also likely to be a license waiver.

The completion of testing before we actually put in.

And also likely to be a license waiver.

Speaker 3: I know some people have talked about doing petitions for rulemaking and going through a notice of proposal making that may be required. The FCC may require us to do that.

I know some people have talked about doing petition for rule, making them and going through a notice of proposed rulemaking that that may be required the FCC may require us to do that.

Speaker 3: depending upon how extensive the waiver request might be. But we also think, you know, it's not a major lift to have some of the changes that we're looking to have. And some of those may well be able to be done at bureau level through a waiver process.

Depending upon how extensive.

Labour request might be but we also think you know.

It's not a major lift to have some of the changes that we're looking to have in some of those may well be able to be done at bureau level through a waiver process. So those are those are not things that I can give you a hard and fast and firm answer to right now.

Speaker 3: Those are not things I can give you a hard and fast and firm answer to right now. But I don't think, for example, multiple months of writing up an FTC request following.

But I I don't think for example at multiple months of writing up for an FCC request. Following the testing I think it would happen pretty quickly after the testing completion.

Speaker 3: the testing, I think it would happen pretty quickly after the testing completion.

Got it okay understood. Thanks, Gary and then so shifting gears, it's nice to see the Dot's action plan.

Speaker 6: got it. Okay, understood. Thanks Gary. And then so shifting gears, it's nice to see the DOT's action plan. I guess were there any surprises with that plan that you saw whether you know that be timing a milestone or just general outline, is it consistent with what you would have expected?

I guess were there any surprises with that plan.

You saw whether that'd be timing of milestones or just general outline is it was it consistent with what you would've expected.

Ganesh you want to take that yes, I can take a stab at that.

Speaker 6: Ganesh, you want to take that? Yeah, I can take a stab at that.

No I think the.

Speaker 4: No, I think the timelines, I think we, as we had described in the previous call, we did expect.

The timelines I think we as we had described I think the previous call. We did expect once the implementation guidelines released.

Speaker 4: Once the implementation guidelines released, they would go through the sort of the broader federal regulated FAR approval process and which could take, you know,

They would go through the.

Sort of the broader federal regulatory bar.

<unk> approval process, and which could take.

Speaker 4: 12 to 18 months. And so it does line up with the 2025 timeframe. So I don't think that was much of a surprise there. I think we were happy to see that the DOT actually is implementing or encouraging industry to

12 to 18 months.

And so it does line up with the 2025 timeframe. So I don't think that.

Much of a surprise there I think we were happy to see that the Dod actually is.

Implementing.

<unk>.

<unk> encouraging industry to adopt resilient PNT solutions and do tests in the 'twenty 'twenty four time frame.

Speaker 4: adopt resilient PNT solutions and do tests in the 2024 timeframe. So when the implementation guidelines are more broadly adopted, then you have some baselines to go with. And this concept of the clearinghouse certainly was, I think, a positive addition to the process because it creates a framework for.

So when the <unk>.

Implementation guidelines of more broadly adopted then you have some baselines to go with it.

And this concept that the clearing house certainly was I think is a positive.

Addition to the process because it creates a framework for <unk>.

Speaker 4: more expeditious and wider adoption once you're part of that framework. So I think overall, it wasn't, it wasn't

Expeditious.

Wider adoption once part of that framework, so I think overall it wasn't.

Wasn't.

Speaker 4: The timelines weren't too much of a surprise, but but certainly some of these additional features that they added as part of the implementation plan were positive.

The timeline for too much of a surprise, but certainly some of these additional features that they added as part of the implementation plan were positive.

Speaker 7: Understood. Thanks for that, Ganesh. I appreciate it. I'll jump back into the queue. Thanks for taking my questions.

Understood. Thanks for that can I ask I appreciate it.

Jump back in the queue. Thanks for taking my questions Alright.

Thanks.

Speaker 1: If I have a question, come from the line of Timothy Correa, what happened? Tell me your line is open.

Final question comes from the line of Timothy.

Oppenheimer Your line is open.

Speaker 8: Thanks a lot sounds like you're making a lot of progress. Um, can you just talk about what's the government's ultimate goal here? Or are they looking to create like a...

Thanks, a lot of it sounds like Youre, making a lot of progress could.

Could you just talk about what's the government's ultimate goal here or are they looking to create like to.

Speaker 8: you know a GPS type system that's free, that they fund that anyone can use or is it, and would it be...

GPS type system, that's free that they fund that anyone can use or is it.

And would it be nationwide or are they just.

Looking for maybe.

Speaker 8: just government users and first responders to use. So, you know, what do you think ultimately?

Just government users and first responders, who use what do you think to ultimately looking to do.

Speaker 3: You know, I'll let Ganesh get into it because that that is essentially a part of the business that he is very, very intimately involved in. But, but just on an overarching way, I don't think that they're wanting, for example, I mean, they fly their own GPS satellite constellations and they provide GPS for free. Okay. And that's used by critical infrastructure for timing and certainly by consumers for location.

I'll, let ganesh add into it because that is.

Essentially for a part of the business that he is very very intimately involved in but but just on an overarching way I don't think that there are more than <unk> for example.

I mean, they fly their own GPS satellite constellations and they provide GPS appropriate, okay, and thats used by critical infrastructure for timing and certainly by consumers for location.

Speaker 3: other things of that nature. I don't think they're looking to provide a secondary terrestrial one that they would own and they would provide. That hasn't been in the past. I think that they want to do everything that they can possibly.

Other things of that nature I don't think they are looking to provide a secondary terrestrial one that they would own and they would provide that.

That hasnt been in the past I think that they want to do everything they can possibly.

To make it to encourage industry to do it.

Speaker 3: to make it to encourage industry to do it and for government users to be able to be the initial users of it to start that process. But eventually, they want critical infrastructure to hold them responsible for, you know, having a resilient enough systems that a GPS were to have problems.

For government users to be able to be the initial users of it to start that process, but eventually they will critical infrastructure to hold them responsible for.

Having a resilient enough systems that are GPS were to have problems.

Speaker 3: their overall critical infrastructure would continue to perform. And one of the key wedges that they have in order to achieve that is by requiring people that are bidding on government services to prove that they can do that, that they have adopted the technologies to make it happen. So, I never say never when it comes to the government, but I don't envision a situation where

Their overall critical infrastructure will continue to perform.

And one of the key.

Wedges that they have in order to achieve that is by requiring people that are bidding on government services.

Prove that they can do that that they have adopted the technology to make it happen. So you know I never say never when it comes to the government, but I don't envision a situation where.

No.

Speaker 3: You know, they, they contract with us to stand up a terrestrial PNC system. I think they do recognize and, and the DOT testing back a couple of years ago showed, you know, there, there are places that.

They contracted with us to stand up a terrestrial P&C system I think they do recognize and the Dod testing back a couple of years ago showed.

There are places that.

Speaker 3: you know, different technologies provide a different or better service or capability. You know, we talk sometimes about the E-Loran, the old Iran that works that were principally used by, you know, mariners and that's great for out over the ocean. I mean, we don't have beacons out there, you know.

Different technologies provide a different or better.

Service or capability, we talk sometimes about the loran the old Loran networks that were principally used by.

Mariners and that's great proud over the oceans I mean, we don't have big comes out there.

Speaker 3: and the same thing with satellites like the Catella system. That's great more for rural areas or even some suburban areas, but it doesn't get deep inside building. So I think the DOT testing and the government writ large.

And the same thing with the.

<unk> like the pellet system, that's great more for rural areas or May even set some suburban areas, but it doesn't get deep inside buildings.

I think the Dod testing and the government writ large.

Speaker 3: understands that for them to provide their own complementary P&T capability, it would require deployment of a variety of different technologies and, you know, a terrestrial build-out. I don't think that's in the cards.

Understand that for them to provide their own complementary PMT capability.

Required deployment of a variety of different <unk>.

Technology and address Youll build out I don't think that's in the cards.

Speaker 3: I think that they may build out certain ones. And here, I think Ganesh can maybe kick in to start talking about some of the sandboxes or initial trials and pilots they're doing. Yeah, they will be funding those deployments.

I think that.

They may build out certain ones and here I think Dennis can maybe kick in to start talking about some of the sand boxes or initial trials and pilots theyre doing yes, they will be funding those deployments.

Speaker 4: Yeah, so I think Kim has Gary mentioned. I mean, I don't think there's an appetite in the government to stand up on another system.

Yes.

So I think Tim that Gary mentioned.

I don't think there is an appetite in the government to stand up.

Another system.

That backup to GPS simply because.

Speaker 4: that back up to GPS simply because there isn't really one answer that fits all, right? I think GPS from that perspective was somewhat unique.

There isn't really one answered that fits all right I think.

GPS.

That perspective was somewhat unique.

Speaker 4: And I think we're at a point where there is different applications, have different needs. And as Gary mentioned, ELaRAN is perfect for the maritime and ocean types of applications, but it's not going to fit into your cell phone and certainly won't work in urban areas as well.

And I think we're at a point where there.

There is different applications have different needs and.

As Gary mentioned <unk> is perfect for the maritime and.

Ocean types of applications, but it's not going to fit into your cell phone and then certainly doesn't.

Working urban areas as well.

Speaker 4: Um, and I think there's also growing recognition that, um. Going from 1 point of failure to another would be a bad, uh. System choice, so so I think the government wants to have multiple. Um, technologies, providing P and T resilience, and that was part of the recommendation from the Department of transportation.

And I think there's also a growing recognition that.

Going from one point of failure to another would be a bad.

Just some choice. So so I think the government wants to have multiple.

Technologies, providing PMT resilience and that was part of the recommendation from the department of transportation.

Speaker 4: And I think ultimately what the government's trying to do right now is really be the first customer.

And I think ultimately what the government is trying to do right now is really be the first customer.

Speaker 4: for resilient P&T systems across the entire federal government enterprise.

<unk> resilient TNT systems across the entire federal government enterprise.

Speaker 4: Um, and it's not, you know, it's not specific sectors, et cetera. They want this across the board.

It's not.

Not specific sectors et cetera. They want this across the board the government does recognize that they're not a large purchaser of these types of systems.

Speaker 4: the government does recognize that they're not a large purchaser of these types of systems.

Speaker 4: And so the hope is that by.

And so the hope is that by.

Speaker 4: being that first adopter, they can encourage other critical infrastructure.

Being that first adopter daikin and could age other critical infrastructure.

Speaker 4: providers, wireless operators, electrical grid suppliers, et cetera, to also adopt these resilient PNP systems.

Riders wireless operators.

Good suppliers et cetera to also adopt these resilient PNT systems.

Speaker 4: Because it's very clear from what's happening around the world The Ukraine conflict or the Israel-Hama situation GPS jamming is the standard feature now across the board. I think we saw it, you know in the beginning of October 6

Because it's very clear from what's happening around from around the world.

The Ukraine conflict or the Australia situation, GPS jamming and sustained and feature now across the board I think we side.

The beginning of October 6th.

Speaker 4: And we've continuously seen more activities around that.

And we are continuously seeing more activities around that.

Speaker 4: Um, and so there's a level of urgency to make every industry more resilient to it. Um, and that's where these testbeds come into play.

And so there is a level of urgency to make every industry more resilient to it.

And that's where these test beds come into place where they want to see the end systems being implemented in the.

Speaker 4: where they want to see the end systems being implemented in the

Speaker 4: Uh, you know, the ultimate application, be it in the, in a, in a mobile phone or in a. Uh, in an automotive or an aviation use case, or the electrical grid, uh, and telecom systems, um, and that's what really the focus of the next 12 to 18 months is going to be.

The ultimate application be it.

In the mobile phone or an <unk>.

Automotive aviation use case, or the electrical grids and telecom systems.

And Thats, what really the focus of the next 12 to 18 months is going to be.

Speaker 4: And beyond that, the hope is once the Executive Order 13-905 is in place,

And beyond that the hope is once the executive order 13 905 has been placed.

Speaker 4: that it will get adopted across the federal government enterprise and then it will also spread into the critical infrastructure sectors.

It will get adopted across the federal government enterprise and then it will also spread into the critical infrastructure.

Sectors and from there the hope is it gets to the mass market.

Speaker 4: And from there, the hope is it gets to the mass market commercial applications also.

Commercial applications also.

Speaker 4: And the important thing is the government, through the various funding sources made available through the infrastructure bill, and now maybe more directly through the executive order.

And the important thing is the government through the various funding sources made available through the infrastructure Bill.

Maybe more directly to <unk>.

Executive order is willing to fund those end user implementations both at the trials phase or the initial implementation phase.

Speaker 4: is willing to fund those end-user implementations.

Speaker 4: both at the trial phase or the initial implementation phase.

Speaker 4: And to some extent at the more wider.

And to some extent at the more wider.

Adoption phase because they do recognize that.

Speaker 4: adoption phase, because they do recognize that.

Speaker 4: Uh, in the absence of that funding, it is difficult for.

In the absence of that funding.

Difficult for us.

Speaker 4: Critical infrastructure vendors and others to adopt a system when they have a free system that GPS under the provide. So I think there is a recognition of that. And that is where some of these grant programs come into place. Is there being used to grease the skids to facilitate and enable quicker and faster adoption.

Critical infrastructure vendors and others to adopt a system when they have a free system that GPS underneath provides so I think there is a recognition of that and that is where some of these grant programs come into place there.

<unk> been used to.

Grease, the skids too.

Facilitate and enable quicker and faster adoptions.

So, let's say everything goes really really well I mean, how large of a customer can the government fee.

Speaker 8: So, let's say everything goes really, really well. I mean, how large of a customer can the government be in four, five years as this is built out?

Four or five years is as this is built out.

Or how much money could you receive annually from the government do you think.

Speaker 4: I mean, that's not clear right now. Uh, I mean, but, but I think we can certainly say that.

I mean thats first.

Right now I mean.

But I think we can certainly say that.

Speaker 4: with the intention where we're seeing that it be across the federal enterprise. I mean, it touches right from the FAA procuring systems to the health and human services for emergency services, then getting into all the critical infrastructure providers, the telecom operators.

The intention that we're seeing that.

Cros.

Uh huh.

The federal enterprise it touches right from.

Sure.

The FAA procuring systems to the health and human services for emergency services.

And then getting into all the critical infrastructure providers.

<unk> operators.

Speaker 4: the electrical grid folks, all of those users.

The electrical grid folks.

All of those.

Users.

Speaker 4: if they have a need for either timing or position or navigation.

If they have a need for either timing or positioned our navigation would be required to have resiliency and that obviously can grow to be a very large order of magnitude.

Speaker 4: would be required to have resiliency. And that obviously can go to be a very large order of magnitude revenue source for us. I mean, we're already seeing initial elements of that.

Revenue source for Us I mean, we're already seeing initial elements of that but.

Speaker 4: Uh, with our, um, you know, government contract that we just signed, uh, in this current phase, it's, it's relatively a nominal amount. Uh, but if this phase goes, uh, goes to the 2nd phase, uh, that could be our largest contract just in a matter of, uh, 12 months. Um, and and that can start dominating, um, more broadly as as 2025.

With our.

Government contract that we just signed in this current phase it's relatively nominal amount.

But it does cause the growth to the second phase.

That could be our largest contract just in the matter of 12 months.

And that and start dominating more broad, yes, as 2025 kicks in.

Speaker 8: Got it. And sorry, just last question on the any updated thinking on the highest best use of the spectrum and technology. I mean.

Got it and sorry, just last question on the.

<unk>.

Any updated thinking on the highest best use of the spectrum and technology I mean.

Speaker 8: You know, do you think you would build out this network yourself and charge for usage on it, or, you know, does it make sense?

Do you think you would build out this network yourself and in charge for usage on it or it.

It does it makes sense to them to sell.

Speaker 3: So, you know, and I'll go ahead and take that 1 time. I'm always, you know, reluctant to just speculate too widely because depending upon who it is that you may partner with on it, there are different configurations, which may be more desirable to 1 player versus another.

Yes.

I'll go ahead.

Take that one yes.

Always.

Reluctant to just speculate too widely.

Because depending upon who it is that you may partner with on it.

There are different configurations, which may be more desirable to one player versus another.

Speaker 3: You know, I have mentioned supplemental downlink is a very important one.

I've mentioned the supplemental downlink is a very important one but also if you're able to get to two way capabilities.

Speaker 3: but also if you're able to get two way Cape of Italy, it opened up other potential parts.

It opens up other potential partners my own guess at this point and I always hate to caveat as being the gas is that we wouldn't build it out.

Speaker 3: my own guess at this point, and I always hate to caveat as being a guess, is that we wouldn't build it out. I think there's enough, particularly for dealing with one of the major carriers, it's far more likely that you would lease them the spectrum and have them build it out.

I think there's enough, particularly in Virginia with one of the major carriers, it's far more likely that you would lease them the spectrum and have been building out.

Speaker 3: You know, we would still be responsible, obviously, for providing the full PNT and E911 services because that's an essential part of.

We would still be responsible obviously for provided before PMT and <unk> 911 services because that's in the central part of.

Speaker 3: the function that the government wants us to do. It's why we think that the government will be very favorably looking at what we will want to do because we are providing a very critical national security service.

The function that the government wants us to do it's why we think that the government will be very favorably looking at.

What we will want to do because we are providing a very critical national security service.

Speaker 3: But I think because of that, the most efficient way would be either leasing or even if it was for an upfront, one-time payment for a multi-year.

But I think because of that the most efficient way would be either leasing or even if it was for an upfront.

One time payment for a multi year lease.

Speaker 3: Uh, that may be the, uh, the best way it would be done. Uh, I don't see, um.

That may be the.

That's the way it would be done.

I don't see it.

Speaker 8: It's not that you couldn't envision scenarios whereby we would build it out, but I don't think there's any chance we would do that without a contracted party that was going to use it. I mean, we don't see ourselves right now as trying to, you know, create another nationwide carrier or something like that. And on the spectrum is very quick. Do you have a sense of how easy it would be for, you know, to add this onto the existing infrastructure? I mean, they seem to be doing a lot more carrier

Okay.

Not that you couldn't envision scenarios, whereby we would build it out but I don't think theres any chance, we would do that without a contracted party that was going to use it I mean, we don't see ourselves right now is trying to.

Create a another nationwide carrier or something like that.

Spectrum is a very great point.

Do you have a sense of how easy would be for carriers to add this onto their existing infrastructure I mean, they seem to be doing a lot more carrier aggregation and a lot more absolutely.

Speaker 3: and a lot more software. Absolutely. And Terry, our aggregation is absolutely the element of why I mentioned that either a supplemental downlink or even a supplemental uplink keyed with other existing spectrum is more of your likely implementation.

And carrier aggregation is absolutely the the element of why I mentioned that either a supplemental downlink or even the supplemental lovely.

<unk> with other existing spectrum is more of your likely implementation.

Speaker 3: It is a lot more of that being done today.

Yeah. It's.

It is a lot more of that being done today and what configurations, we are able to create and what power levels, we're able to create will have a direct.

Speaker 3: and what configurations we are able to create and what power levels we're able to create, we'll have a direct

Speaker 3: bearing on how easily it can be incorporated into, say, an existing carrier's rollout plan.

Bearing on how easily can be incorporated into let's say an existing carriers rollout plan.

Speaker 3: So, probably not much more I can say on it at this point in time. Likely, when we do make our filings with the FCC, you'll get a, you know, a far greater granular visibility into what we think we'll be able to pull off. But, yeah, I mean, we think there's undeniable spectrum value there. It's utilized as a, you know, 5G data carrier.

So probably not much more I can say on that at this point in time.

Likely when we do make our filings with the FCC or you'll get a.

Our greater granular visibility into what we think we will be able to pull off.

But.

Yes.

We think there is undeniable spectrum value there.

Utilized as they.

<unk> G data carrier.

Speaker 8: But exactly what configuration and what other spectrum it might be paired with in a network are things that we probably won't opine on today. Yeah. Yeah. Got it. But that's really, really helpful. Thanks a lot, guys.

But exactly what configuration and what other spectrum that might be paired with a in a network.

Are things that we probably want to opine on today, Yeah, Yeah got it that's really really helpful. Thanks, a lot guys. Good luck.

Yeah.

Yes.

Speaker 1: At this time, there are no further questions. I'll like to turn the call back over to the table.

At this time there are no further questions.

I'd like to turn the call back over to Scott.

Yeah.

Speaker 3: Well, thank you very much operator and and we certainly appreciate everybody, you know, dialing in today and I hopefully you see, I know we normally kick off these calls saying, hey, here are 3 strategic priorities that, you know, to.

Well, thank you very much operator, and we certainly appreciate everybody.

Dialing in today and I.

Hopefully you see I know, we normally kick off these calls, saying hey here are our three strategic priorities.

To.

Speaker 3: solidify our leadership position in 3D geolocation and P&P resiliency to develop fully our spectrum assets to their highest and best use and commercial potential on that and to expand our global reach.

Solidify our leadership position in three D geolocation and PMT resiliency too.

Developed fully our spectrum assets to their highest.

Best use.

And commercial potential on that and to expand our global.

Reach.

Speaker 3: I think hopefully you'll see out of today's call, you know, we made significant progress on all of those this quarter. And once we complete our testing program and are able to file with the FTC, hopefully you'll see far more progress on that front as well too. So again, thanks everybody for your participation today and we look forward to speaking to you again on our end of year call.

Hopefully you will see out of today's call. We made significant progress on all of those this quarter.

Once we complete our testing program and are able to filed with the FCC.

You will see far more progress on that front as well too. So again, thanks, everybody for your participation today and we look forward to speaking to you again on our end of year call.

Thank you ladies and gentlemen that concludes today's conference you may now disconnect.

Speaker 1: Thank you ladies and gentlemen, that's included today's conference. You may now just connect.