UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from _____ to _____
Commission File Number:
(Exact name of registrant as specified in its charter)
|
|
|
|
|
(State or other jurisdiction of |
|
(I.R.S. Employer |
|
|
|
state |
|
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
|
|
|
|
The |
|
Warrants, each to purchase one share of Common Stock |
|
NNAVW |
|
The Nasdaq Capital Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
|
|
☒ |
Smaller reporting company |
|
|
|
|
Emerging growth company |
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
There were
NEXTNAV INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2024
Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “NextNav,” the “Company,” “we,” “us,” and “our” include NextNav Inc. and its subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, but are not limited to, statements regarding our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, and are not guarantees of future performance. The words “may,” “anticipate,” “believe,” “expect,” “intend,” “might,” “plan,” “possible,” “potential,” “aim,” “strive,” “predict,” “project,” “should,” “could,” “would,” “will” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. 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, including our TerraPoiNT and NextGen systems, anticipated demand and acceptance of our services, prospective performance and commercial opportunities and competitors, the timing of obtaining regulatory approvals, the achievement of certain Federal Communications Commission (“FCC”) related milestones and FCC approvals, including with respect to that certain Asset Purchase Agreement (as defined below) to acquire certain Multilateration Location and Monitoring Service licenses, and the Company’s petition for rulemaking (as defined below) filed with the FCC , ability to finance our research and development activities, commercial partnership acquisition and retention, products and services, pricing, marketing plans, operating expenses, market trends, revenue, liquidity, cash flows and uses of cash, capital expenditures, and our ability to invest in growth initiatives; our ability to evolve our technology to be compatible with 5G NR (as defined below), and realize the technical benefits of such proposed evolution; our ability to realize the anticipated technical and business benefits associated with the acquisition of NextNav France (as defined below), and any subsequent mergers, acquisitions, or other similar transactions, which may be affected by, among other things, competition, and the ability of the combined business to grow and manage growth profitably; factors relating to our future operations, projected capital resources and financial position, estimated revenue and losses, projected costs and capital expenditures, prospects and plans, including the potential increase in customers on our Pinnacle network, the expansion of our services in Japan through MetCom (as defined below), and expectations about other international markets; our belief that continuing integration of our Pinnacle service into devices and applications will support revenue growth over the coming year; projections of market growth and size, including the level of market acceptance for our services; our ability to adequately protect key intellectual property rights or proprietary technology; our ability to maintain our Location and Monitoring Service (“LMS”) licenses and obtain additional LMS licenses as necessary; our ability to maintain adequate operational financial resources or raise additional capital or generate sufficient cash flows, including the adequacy of our financial resources to meet our operational and working capital requirements for the 12-month period following the issuance of this report and our ability to meet longer term expected future cash requirements and obligations; our ability to develop and maintain effective internal controls; our success in recruiting and/or retaining officers, key employees or directors; expansion plans and opportunities; costs related to being a public company; our ability to maintain the listing of our securities on Nasdaq; macroeconomic factors and their effects on our operations; and the outcome of any known and unknown litigation and regulatory proceedings, as well as assumptions relating to the foregoing.
Forward-looking statements are based on information available as of the date of this quarterly report on Form 10-Q, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as 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.
For additional information regarding risk factors, see Part II, Item 1A, “Risk Factors” of this quarterly report on Form 10-Q, and Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, as well as those otherwise described or updated from time to time in our other filings with the Securities and Exchange Commission (the “SEC”).
Item 1. Financial Statements
NextNav Inc.
CONDENSED Consolidated Balance Sheets
(IN THOUSANDS, EXCEPT SHARE DATA)
|
|
|
June 30, 2024 (unaudited) |
|
|
December 31, 2023 |
| ||
|
Assets |
|
|
|
|
|
| ||
|
Current assets: |
|
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
|
|
|
$ |
|
|
| Short term investments |
|
|||||||
|
Accounts receivable |
|
|
|
|
|
|
|
|
|
Other current assets |
|
|
|
|
|
|
|
|
|
Total current assets |
|
$ |
|
|
|
$ |
|
|
|
Network under construction |
|
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation of $ |
|
|
|
|
|
|
|
|
|
Operating lease right-of-use assets |
|
|
|
|
|
|
|
|
| Goodwill | ||||||||
|
Intangible assets |
|
|
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
|
|
|
$ |
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
|
|
|
$ |
|
|
|
Accrued expenses and other current liabilities |
|
|
|
|
|
|
|
|
|
Operating lease current liabilities |
|
|
|
|
|
|
|
|
|
Deferred revenue |
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
|
|
|
$ |
|
|
|
Warrants |
|
|
|
|
|
|
|
|
|
Operating lease noncurrent liabilities |
|
|
|
|
|
|
|
|
|
Other long-term liabilities |
|
|
|
|
|
|
|
|
| Long term debt, net of debt issuance cost and discount | ||||||||
|
Total liabilities |
|
$ |
|
|
|
$ |
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
Common stock, authorized |
|
|
|
|
|
|
|
|
|
Additional paid-in capital |
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive income |
|
|
|
|
|
|
| |
|
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
|
Common stock in treasury, at cost; |
|
|
( |
) |
|
|
( |
) |
|
Total stockholders’ equity |
|
$ |
|
|
|
$ |
|
|
|
Non-controlling interests |
||||||||
|
Total liabilities and stockholders’ equity |
|
$ |
|
|
|
$ |
|
|
See accompanying notes.
| 1 |
NextNav INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
|
2024 |
2023 |
2024 | 2023 | ||||||||||||
|
Revenue |
$ | $ | $ | $ | ||||||||||||
|
Operating expenses: |
||||||||||||||||
|
Cost of goods sold (exclusive of depreciation and amortization) |
||||||||||||||||
|
Research and development |
||||||||||||||||
|
Selling, general and administrative |
||||||||||||||||
|
Depreciation and amortization |
||||||||||||||||
|
Total operating expenses |
$ | $ | $ | $ | ||||||||||||
|
Operating loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
Other income (expense): |
||||||||||||||||
|
Interest income (expense) |
( |
) | ( |
) | ( |
) | ||||||||||
|
Change in fair value of warrants |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Other income (loss), net |
( |
) | ||||||||||||||
|
Loss before income taxes |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
Provision for income taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
Foreign currency translation adjustment |
( |
) | ( |
) | ||||||||||||
|
Comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Net loss | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Net loss attributable to common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
Weighted average of shares outstanding – basic and diluted |
||||||||||||||||
| Net loss attributable to common stockholders per share - basic and diluted | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
NEXTNAV INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
|
|
|
Common Stock |
|
|
Additional Paid-In |
|
|
Accumulated |
|
|
Accumulated Other Comprehensive |
|
|
Treasury stock, |
|
|
Stockholders’ (Deficit) |
|
Non- controlling |
Total |
||||||||||||||||
|
|
Shares |
|
|
Value |
|
|
Capital |
|
|
Deficit |
|
|
Income |
|
|
at cost |
|
|
Equity |
|
interests |
Equity |
||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||
| Vesting of RSUs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Issuance of RSAs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Exercise of common stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Reclassification of warrant liability to Common Stock warrants | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( |
) | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||
| Vesting of RSUs | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of RSAs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Exercise of common stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Reclassification of warrant liability to Common Stock warrants | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation expense |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Exercise of common warrants | — | — | — | — | ||||||||||||||||||||||||||||||||
| Interest payment through issuance of shares of Common Stock | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Redemption of non-controlling interests | — | — | — | — | ( |
) | ||||||||||||||||||||||||||||||
| Shares of Common Stock received from settlement of employee receivables | ( |
) | — | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||
| Net loss | — | — | — | ( |
) | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||
See accompanying notes.
| 3 |
NextNav INC.
CONDENSED Consolidated Statements of Changes in Stockholders’ equity
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
|
|
|
Common Stock |
|
|
Additional Paid-In |
|
|
Accumulated |
|
|
Accumulated Other Comprehensive |
|
Treasury stock, |
|
|
Stockholders’ (Deficit) |
Non- controlling |
Total |
| |||||||||||||||||
|
|
|
Shares |
|
|
Value |
|
|
Capital |
|
|
Deficit |
|
|
(Loss) |
|
at cost |
|
|
Equity | interests |
Equity |
| ||||||||||||||
|
Balance, December 31, 2022 |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
$ |
( |
) |
|
$ | $ |
$ |
|
| ||||||||
| Vesting of RSUs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Issuance of RSAs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Exercise of common stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( |
) | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Balance, March 31, 2023 | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||
| Vesting of RSUs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Issuance of RSAs | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Exercise of common stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Issuance of common warrants | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( |
) | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||
See accompanying notes.
| 4 |
NextNav INC.
CONDENSED Consolidated Statements of Cash Flows
(UNAUDITED)
(IN THOUSANDS)
|
|
|
Six Months Ended June 30, |
| |||||
|
|
|
2024 |
|
|
2023 |
| ||
|
Operating activities |
|
|
|
|
|
| ||
|
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
Equity-based compensation |
|
|
|
|
|
|
|
|
|
Change in fair value of warranty liability |
|
|
|
|
|
|
||
| Change in fair value of asset purchase agreement liability | ( |
) | ||||||
|
Realized and unrealized gain on short term investments |
( |
) | ( |
) | ||||
|
Equity method investment loss |
||||||||
|
Asset retirement obligation accretion |
|
|
|
|
|
|
|
|
| Amortization of debt discount | ||||||||
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
|
| |
|
Other current assets |
|
|
|
|
|
|
||
|
Other assets |
|
|
( |
) |
|
|
|
|
|
Accounts payable |
|
|
|
|
|
( |
) | |
|
Deferred revenue |
|
|
( |
) |
|
|
( |
) |
|
Accrued expenses and other liabilities |
|
|
|
|
|
|
||
|
Operating lease right-of-use assets and liabilities |
|
|
|
|
|
|
| |
|
Net cash used in operating activities |
|
$ |
( |
) |
|
$ |
( |
) |
|
Investing activities |
|
|
|
|
|
|
|
|
|
Capitalization of costs and purchases of network assets, property, and equipment |
|
|
( |
) |
|
|
( |
) |
| Purchase of marketable securities |
( |
) | ( |
) | ||||
| Sale and maturity of marketable securities | ||||||||
| Payment for asset purchase agreement liability | ( |
) | ||||||
|
Purchase of internal use software |
|
|
( |
) |
|
|
( |
) |
|
Net cash used in investing activities |
|
$ |
( |
) |
|
$ |
( |
) |
|
Financing activities |
|
|
|
|
|
|
|
|
| Proceeds from senior secured notes | ||||||||
| Payments towards debt issuance cost | ( |
) | ||||||
| Payments towards debt | ( |
) | ( |
) | ||||
| Proceeds from exercise of common warrants | ||||||||
| Redemption of non-controlling interests | ||||||||
|
Proceeds from exercise of common stock options |
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
$ |
|
|
$ |
|
||
|
Effect of exchange rates on cash and cash equivalents |
|
|
|
|
|
( |
) | |
|
Net (decrease) increase in cash and cash equivalents |
|
|
( |
) |
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
|
|
|
$ |
|
|
|
Non-cash investing and financing information |
|
|
|
|
|
|
|
|
|
Capital expenditure included in Accrued expenses and other current liabilities |
|
$ |
|
|
|
$ |
|
|
| Issuance of warrants | $ | $ | ||||||
| Interest paid in shares of Common Stock | $ | $ | ||||||
See accompanying notes.
NextNav INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
For the six months ended June 30, 2024
1. Organization and Business
Principal Business
NextNav Inc. and its consolidated subsidiaries (collectively “NextNav” or the “Company”) deliver next generation positioning, navigation and timing (“PNT”) solutions designed to enable a high-quality, terrestrial complement and backup to the U.S. Global Positioning System (“GPS”). NextNav’s solutions are built on a robust asset platform, including 8MHz of nearly nationwide wireless spectrum in the Lower 900MHz band, intellectual property and deployed network systems. The Company, subject to appropriate regulatory approvals, has signed an agreement to acquire licenses for an additional 4MHz of spectrum in the Lower 900MHz band. Additionally, on April 16, 2024, NextNav filed a petition for rulemaking with the Federal Communications Commission (“FCC”) to update the Lower 900MHz band plan to utilize a 15MHz nationwide configuration for both PNT and 5G broadband. The Company’s Pinnacle system provides “floor-level” altitude service to any device with a barometric pressure sensor, including most off-the-shelf smartphones. The Company’s TerraPoiNT and NextGen systems are designed to overcome the limitations inherent in the space-based systems through a network of wide area terrestrial location transmitters that broadcast a PNT signal over the Company’s licensed spectrum, with NextGen intended to utilize standards-based 5G broadband technologies.
Since its inception, NextNav has incurred recurring
losses and generated negative cash flows from operations and has primarily
relied upon debt and equity financings to fund its cash requirements. During the six months ended June 30, 2024 and 2023, the Company incurred net losses of $
Managing liquidity and the Company’s cash position is a priority of the Company. The Company continually works to optimize its expenses in light of the growth of its business and adapt to changes in the economic environment. The Company believes that its cash and cash equivalents and marketable securities as of June 30, 2024 will be sufficient to meet its working capital and capital expenditure needs, including all contractual commitments, beyond the next 12 months from the filing of this Quarterly Report on Form 10-Q. The Company believes it will meet longer term expected future cash requirements and obligations through a combination of its existing cash and cash equivalents balances and marketable securities, cash flows from operations, and issuance of equity securities or debt offerings. However, this determination is based upon internal financial projections and is subject to changes in market and business conditions.
Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in these condensed consolidated financial statements.
Unaudited Interim Financial Information
The condensed consolidated financial statements as of June 30, 2024 are unaudited. These interim financial statements of NextNav have been prepared in accordance with U.S. General Accepted Accounting Principles (“GAAP”) and SEC instructions for interim financial information and should be read in conjunction with NextNav’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), which the Company filed with the SEC on March 13, 2024.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in management’s opinion, all adjustments of a normal, recurring nature that are necessary for the fair statement of the Company’s financial position as of June 30, 2024, results of operations for the three and six months ended June 30, 2024 and 2023, and changes in stockholders’ equity and cash flows for the six months ended June 30, 2024 and 2023, but are not necessarily indicative of the results expected for the full fiscal year or any other period.
There have been no changes to the Company’s significant accounting policies described in the 2023 Form 10-K that have had a material impact on these condensed consolidated financial statements and related notes.
| 6 |
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period and accompanying notes. These estimates include those related to the useful lives and recoverability of long-lived and intangible assets, valuation of common stock warrants, income taxes and equity-based compensation, among others. NextNav bases estimates on historical experience, anticipated results and various other assumptions, including assumptions of future events, it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities, equity, revenue and expenses, that are not readily apparent from other sources. Actual results and outcomes could differ materially from these estimates and assumptions.
Cash and Cash Equivalents and Marketable Securities
Cash and cash equivalents include all cash in banks and highly liquid investments with an original maturity of three months or less when purchased. The combined account balances held on deposit at each institution typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company seeks to reduce this risk by maintaining such deposits with high quality financial institutions that management believes are creditworthy. Further, the Company seeks to minimize its exposure to banking risk by limiting the amount of uninsured deposits and investing its excess cash in U.S. government and government agency bonds, and money market funds.
The Company invests excess cash primarily in U.S. treasury bills, U.S. government and government agency bonds, and money market funds. The Company classifies all marketable securities that have stated maturities of three months or less from the date of purchase as cash equivalents, and those that have stated maturities of over three months as short-term investments on the Condensed Consolidated Balance Sheets. The Company determines the appropriate classification of investments in marketable securities at the time of purchase and reevaluates such designation at each balance sheet date. Marketable securities that are held for resale are classified as "trading securities" and are measured at fair value with the related gains and losses, including unrealized, recognized in interest income (expense). Marketable securities not classified as held to maturity or as trading securities are classified as "available-for-sale securities" and the fair value option (“FVO”) was elected, for which related gains and losses, including unrealized gains and losses and interest, are recognized in interest income (expense). The FVO election allows the Company to account for the marketable securities at fair value, which is consistent with the manner in which the instruments are managed. For the six months ended June 30, 2024, the Company recorded $
Revenue
The following table presents the Company’s revenue disaggregated by category and source:
|
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
|
2024 |
2023 |
2024 | 2023 | ||||||||||||
|
|
(in thousands) |
(in thousands) | ||||||||||||||
|
Commercial |
$ | $ | $ | $ | ||||||||||||
|
Government contracts |
||||||||||||||||
|
Total revenue |
$ | $ | $ | $ | ||||||||||||
| 7 |
Contract Balances
Accounts receivable are billed and unbilled amounts related to the Company’s rights to consideration as performance obligations are satisfied when the rights to payment become unconditional but for the passage of time. As of June 30, 2024 and December 31, 2023, the Company’s accounts receivable balances were comprised of $
Contract liabilities relate to amounts billed in advance, or advance consideration received from customers, for which transfer of control of the good or service occurs at a later point in time. As of June 30, 2024 and December 31, 2023, the Company’s contract liabilities were $
Equity-Based Compensation
Measurement of equity-based compensation with employees is based on the estimated grant date fair value of the equity instruments issued. The fair value of stock options is determined using the Black-Scholes option pricing model. The fair value of restricted awards is based on the closing price of NextNav’s common stock on the date of grant. NextNav recognizes equity-based compensation on a straight-line basis over the requisite service period of the grant, which is generally equal to the vesting period. NextNav accounts for forfeitures as they occur.
The following details the amount of stock-based compensation included in cost of goods sold, research and development, and selling, general and administrative expenses:
|
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
|
2024 |
2023 |
2024 | 2023 | ||||||||||||
|
|
(in thousands) |
(in thousands) | ||||||||||||||
|
Cost of goods sold |
$ | $ | $ | $ | ||||||||||||
|
Research and development |
||||||||||||||||
|
Selling, general and administrative |
||||||||||||||||
|
Total stock-based compensation expense |
$ | $ | $ | $ | ||||||||||||
Basic and Diluted Net Loss per Share
Basic loss per share (“EPS”) excludes dilution for common share equivalents and is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding during each period, adjusted for the effect of dilutive common share equivalents.
Restricted shares are included in the computation of basic EPS as they vest and are included in diluted EPS, to the extent they are dilutive, determined using the treasury stock method. Outstanding options and warrants are included in the computation of diluted EPS, to the extent they are dilutive, determined using the treasury stock method.
| 8 |
The determination of the diluted weighted average shares is included in the following calculation of EPS:
|
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
|
2024 |
2023 |
2024 | 2023 | ||||||||||||
|
|
(in thousands, except per share amounts) |
(in thousands, except per share amounts) | ||||||||||||||
|
Numerator |
||||||||||||||||
|
Net loss attributable to common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
||||||||||||||||
|
Denominator |
||||||||||||||||
|
Weighted average shares – basic and diluted |
||||||||||||||||
| Basic and diluted loss per share | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
The following details anti-dilutive unvested restricted stock units and unvested restricted stock awards, as well as the anti-dilutive effects of the outstanding warrants and stock options:
|
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
Antidilutive Shares Excluded |
2024 |
2023 |
2024 | 2023 | ||||||||||||
|
|
(in thousands) |
(in thousands) | ||||||||||||||
|
Warrants |
||||||||||||||||
|
Stock Options |
||||||||||||||||
|
Unvested Restricted Stock Units |
||||||||||||||||
|
Unvested Restricted Stock Awards |
||||||||||||||||
Equity Method Investment
The Company applies the equity method of accounting to investments when it has significant influence, but not controlling interest, in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions.
The initial carrying value of equity method investment is based on the amount paid to purchase the interest in the investee entity. Subsequently, the investment is increased or decreased by the Company’s proportionate share in the investee’s earnings or losses and decreased by cash distributions from the investee. The Company eliminates from its financial results all significant intercompany transactions to the extent of its ownership interest, including the intercompany portion of transactions with equity method investee. The Company’s share of the investee’s income or loss is recorded on a one quarter lag.
The Company evaluates equity method investment for impairment based upon a comparison of the fair value of the equity method investment to its carrying value, when impairment indicators exist. If the Company determines a decline in the fair value of an equity method investment below its carrying value is other-than-temporary, an impairment is recorded.
Leases
NextNav leases office spaces under non-cancellable leases as well as site leases for towers and shelters under operating leases related to its network. Site leases are entered into throughout the United States under which NextNav receives the rights to install equipment used to transmit its services over its licensed spectrum. The Company, at the inception of the contract, determines whether a contract is or contains a lease based on assessment of the terms and conditions of the contract. The Company classifies leases with contractual terms longer than twelve months as either operating or finance. The Company has elected not to recognize lease assets and liabilities for its short-term leases, which are defined as leases with an initial term of twelve months or less.
| 9 |
The Company’s leases may include options to extend or terminate the lease. The option to renew may be automatic, at the option of NextNav or mutually agreed to between the landlord and NextNav. Lease terms include the non-cancellable term and periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
The Company’s lease agreements generally contain lease and non-lease components. Payments under the lease arrangements are primarily fixed. Non-lease components primarily include payments for utilities and maintenance. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component which increases the amount of the Company’s lease assets and liabilities. Certain lease agreements contain variable payments, which are expensed as incurred and not included in the lease assets and liabilities. These amounts include payments for common area maintenance.
Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate, because the interest rate implicit in the Company’s leases is not readily determinable. The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. Lease assets are reduced by landlord incentives, plus any direct costs from executing the leases or lease prepayments reclassified from “Other current assets” upon lease commencement. Operating lease expense is recognized on a straight-line basis over the lease term. Monthly rent expense includes any site related utility payments or other fees such as administrative or up-front fees contained in the lease agreements that are determinable upon execution of the lease agreement.
Acquired finite-lived intangible assets
Acquired finite-lived intangible assets primarily includes proprietary technology and software. See Note 4 — Intangibles.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company operates as one reporting unit. When testing goodwill for impairment, the Company may first perform an optional qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill.
|
|
Six Months Ended June 30, |
|||||||
|
|
2024 | 2023 | ||||||
|
|
(in thousands) |
|||||||
|
Beginning Balance |
$ | $ | ||||||
|
Changes in foreign exchange rates |
( |
) | ||||||
| Purchase price adjustment | ( |
) | ||||||
|
Ending Balance |
$ | $ | ||||||
Acquisitions
The Company accounts for its acquisitions using the acquisition method of accounting. The purchase price is attributed to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired are included in the Company’s consolidated financial statements from the date of acquisition.
When the Company issues stock-based or cash awards to an acquired company’s shareholders, the Company evaluates whether the awards are consideration or compensation for post-acquisition services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the acquired company’s stockholders beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-acquisition services and recognized as expense over the requisite service period.
Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions, and competition. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions, tax-related valuation allowances and pre-acquisition contingencies are initially recorded as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Company’s consolidated statement of operations. In connection with the determination of fair values, the Company may engage a third-party valuation specialist to assist with the valuation of intangible and certain tangible assets acquired and certain assumed obligations.
Long term debt
In conjunction with the issuance of senior secured notes in May and July of 2023, the Company issued warrants to the lenders. The Company allocated the proceeds from its debt issuance to long term debt and equity classified warrants based on relative fair value as determined by the Discounted Cash Flow approach and Monte Carlo simulation model, respectively. The portion of proceeds allocated to equity-classified warrants and direct debt issuance costs are classified as debt discounts. The carrying value of long term debt in the Company’s condensed consolidated balance sheet consists of principal amount of debt, net of debt discounts. Debt discounts are amortized to interest expense based on the related debt agreements primarily using the effective interest method.
Non-controlling Interests
The non-controlling interest in the Company’s condensed consolidated financial statements represents the warrants for Nestwave, SAS (as subsequently renamed, “NextNav France”) shares that were owned by the selling shareholders of NextNav France. Holders of the warrants do not have the right to income or obligation to losses, and the Company did not attribute any net loss to the non-controlling interests for the three and six months ended June 30, 2024 and 2023. During the three and six months ended June 30, 2024,
| 11 |
Foreign Currency Translation
The functional currency of NextNav’s foreign subsidiaries is generally the local currency. Assets and liabilities are translated into U.S. dollars at the exchange rate in effect at the Condensed Consolidated Balance Sheet date. Operating accounts are translated at an average rate of exchange for the respective accounting periods. Translation adjustments resulting from the process of translating foreign currency financial statements into U.S. dollars are reported as a component of accumulated other comprehensive loss. Transaction gains and losses reflected in the functional currencies are charged to income or expense at the time of the transaction.
Net transaction gains (losses) from foreign currency contracts recorded in the Condensed Consolidated Statements of Comprehensive Loss were immaterial for the three and six months ended June 30, 2024 and 2023. The only component of other comprehensive loss is currency translation adjustments for all periods presented. No income tax expense was allocated to the currency translation adjustments.
Recent Accounting Developments Not Yet Adopted
During the fourth quarter of 2023, the Financial Accounting Standards Board issued two Accounting Standards Updates (“ASUs”) that require additional disclosures related to reportable segments under ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) and income taxes under ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-07 is effective for the Company's annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. It requires the Company to disclose information about significant expenses on an interim and annual basis for each reportable segment. ASU 2023-09 is effective for the Company's annual periods beginning January 1, 2026 with early adoption permitted, and requires the Company to disclose additional information on the rate reconciliation and income taxes paid. The Company is currently evaluating the potential effect that the updated standards will have on the financial statement disclosures.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.
3. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
|
|
|
June 30, 2024 |
|
|
December 31, 2023 |
| ||
|
|
|
(in thousands) |
| |||||
|
Accrued salary and other employee liabilities |
|
$ |
|
|
|
$ |
|
|
|
Accrued legal and professional services |
|
|
|
|
|
|
|
|
| Accrued interest | ||||||||
| Asset purchase agreement liability(1) | ||||||||
|
Other accrued liabilities |
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
(1)
4. Intangibles
Intangible assets as of June 30, 2024 and December 31, 2023 consisted of following (in thousands):
| June 30, 2024 |
December 31, 2023 | |||||||||||||||||||||||
| Gross Amount |
Accumulated Amortization |
Net Carrying Value | Gross Amount |
Accumulated Amortization |
Net Carrying Value | |||||||||||||||||||
| Indefinite-Lived intangible assets | $ |
$ | $ | $ | $ | $ | ||||||||||||||||||
| Acquired Software | ||||||||||||||||||||||||
| Acquired Technology | ||||||||||||||||||||||||
| Internal Use Software | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The weighted average remaining useful lives of acquired software and acquired technology were
Amortization expense on intangibles assets was $
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 and thereafter | ||||
| $ |
5. Asset Purchase Agreement
On March 7, 2024, the Company and its wholly-owned subsidiary Progeny LMS, LLC entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Telesaurus Holdings GB and Skybridge Spectrum Foundation to acquire (1) certain Multilateration Location and Monitoring Service licenses (the “M-LMS Licenses”) issued by FCC and (2) rights to a petition for reconsideration, dated December 20, 2017, which, if granted, may reinstate additional M-LMS Licenses owned by the sellers and terminated by the FCC in 2017 (the "Transaction"). The closing (“Closing”) of the Transaction is subject to customary conditions as well as the approval of the Superior Court of the State of California, County of Alameda (“Alameda Court Approval”) and approval of the FCC of the application seeking the transfer and assignment of the M-LMS Licenses to the Company by final order (“FCC Approval”) and will occur upon the assignment of the M-LMS Licenses following the FCC Approval.
The consideration for the Transaction is payable as follows:
| · | $ | |
| · | $ | |
| · | $ |
The Asset Purchase Agreement provides for contingent consideration in the amount of $
6. Equity Method Investment
As of June 30, 2024, the Company’s total ownership of MetCom Inc., a privately-owned Japanese joint stock company (kabushiki kaisha) (“MetCom”), consisted of
The Company holds a warrant (the “MetCom Warrant”) issued by MetCom which entitles the Company to purchase additional shares at an exercise price of JPY
7. Fair Value
NextNav uses observable and unobservable inputs to determine the value of its assets and liabilities recorded at fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. The three-tier hierarchy for inputs used to measure fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, where applicable, is as follows:
- Level 1 — Quoted prices in active markets for identical assets or liabilities
- Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities
- Level 3 — No observable pricing inputs in the market
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. NextNav’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. NextNav effectuates transfers between levels of the fair value hierarchy, if any, as of the date of the actual circumstance that caused the transfer.
The following table presents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis:
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
||||||
| Cash and Cash Equivalents - Money Market Funds | $ | $ | $ | $ | ||||||||||||
| Cash and Cash Equivalents - Available-for-sale debt securities with fair value option election | ||||||||||||||||
| Short term investments - Available-for-sale debt securities with fair value option election | ||||||||||||||||
|
Private Placement Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Asset purchase agreement liability | ||||||||||||||||
|
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and Cash Equivalents - Money Market Funds | $ | $ | $ | $ | ||||||||||||
| Cash and Cash Equivalents - Trading debt securities | ||||||||||||||||
| Short term investments - Trading debt securities | ||||||||||||||||
|
Private Placement Warrants |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
| 14 |
The carrying values of cash and cash equivalents, accounts payable, accrued expenses, amounts included in other current assets, and current liabilities that meet the definition of a financial instrument, approximate fair value due to their short-term nature.
Assets, liabilities, and equity instruments that are measured at fair value on a nonrecurring basis include fixed assets and intangible assets. The Company recognizes these items at fair value when they are considered to be impaired or upon initial recognition. The fair value of these assets and liabilities are determined with valuation techniques using the best information available and may include quoted market prices, market comparables and discounted cash flow models.
Level 3 Liabilities
The Company engaged a third-party valuation firm to assist with the fair value analysis of the Private Placement Warrants (as defined below). The analysis used commonly accepted valuation methodologies and best practices to determine the fair value of the equity, in accordance with fair value standards and U.S. GAAP. For the Private Placement Warrants that were outstanding as of June 30, 2024 and December 31, 2023, NextNav used a Monte Carlo simulation model. The following table shows the assumptions used in each respective model:
|
|
|
June 30, 2024 |
|
|
December 31, 2023 |
| ||
|
|
|
Values |
|
|
Values |
| ||
|
Stock Price |
|
$ |
|
|
|
$ |
|
|
|
Strike price |
|
$ |
|
|
|
$ |
|
|
|
Holding Period/Term (years) |
|
|
|
|
|
|
|
|
|
Volatility |
|
|
|
% |
|
|
|
% |
|
Expected dividends |
|
|
|
|
|
|
|
|
|
Risk-Free Rate |
|
|
|
% |
|
|
|
% |
|
Fair value of warrants |
|
$ |
|
|
|
$ |
|
|
The following table shows the assumption used in valuing the First Noncash consideration of asset purchase agreement liability to be settled in shares, equivalent to $
|
|
|
June 30, 2024 |
| |
|
|
|
Values |
| |
|
volume weighted average price |
|
$ |
|
|
|
Stock price |
|
$ |
|
|
The tables below provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3).
|
Warrants: |
|
(in thousands) |
| |
|
Balance as of December 31, 2023 |
|
$ |
|
|
|
Fair value adjustment of Private Placement Warrants |
|
|
|
|
| Reclassification of warrant liability to Common Stock warrants | ( |
) | ||
|
Balance as of June 30, 2024 |
|
$ |
|
|
|
Asset Purchase Agreement Liability: |
|
(in thousands) |
| |
|
Balance as of December 31, 2023 |
|
$ |
|
|
|
Initial recognition of asset purchase agreement liability |
|
|
|
|
| Fair value adjustment of asset purchase agreement liability | ( |
) | ||
|
Balance as of June 30, 2024 |
|
$ |
|
|
8. Long term debt, net
On May 9, 2023 (the “Initial Closing”), pursuant to the terms of the Note Purchase Agreement (the “NPA”) and Indenture Agreement (the “Indenture”), the Company issued $
Under the NPA, the Lenders had the right, but not the obligation, to purchase additional Notes (the “Additional Notes” and, together with the Original Notes, the “Notes”), on a pro rata basis, in an aggregate principal amount of $
| 15 |
The carrying value of the Notes was $
Additional Interests
The Notes are subject to additional interest of up to
Redemption and Early Repayment
The Company may redeem the Notes, in whole or in part, at any time on or after
In the event of certain non-ordinary course asset sales, including sales of certain intellectual property or spectrum licensed by the FCC to the Company or its subsidiaries, the Company must make a mandatory repurchase offer for a portion of the Notes outstanding with the proceeds of such sale, at a price equal to
In the event of a change of control, each holder has the right, at such holder’s option and subject to the limitations set forth in the Indenture, to require the Company to repurchase for cash all or any portion of such holder’s Notes at a price equal to
Debt Covenant Compliance
The Notes are guaranteed on a first lien senior secured basis by NextNav’s domestic subsidiaries and secured by substantially all of the assets of the Company and its domestic subsidiaries.
The Indenture contains customary covenants limiting the ability of the Company and its subsidiaries to incur or guarantee additional indebtedness; pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; and merge or consolidate or sell all or substantially all of its assets. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. The Indenture also contains customary events of default. Failure to comply with such covenants could result in an acceleration of the maturity of indebtedness outstanding and additional interest of up to
As of June 30, 2024,
| 16 |
9. Warrants and Warrant Liability
As of June 30, 2024, NextNav had
The Private Placement Warrants are classified as a liability on the Company’s Condensed Consolidated Balance Sheet as of June 30, 2024. During the three and six months ended June 30, 2024,
Holders of the Public Warrants, Private Placement Warrants and Debt Warrants are entitled to acquire shares of common stock of NextNav. With respect to the Public Warrants and Private Placement Warrants, each whole warrant entitles the registered holder to purchase
NextNav has
The Private Placement Warrants are identical in all respects to the Public Warrants except that, so long as they are held by the current holder or its permitted transferees: (i) they will not be redeemable by NextNav; (ii) they may be exercised by the holders on a cashless basis; and (iii) they are subject to registration rights.
The Company has the right to redeem for cash the applicable pro rata portion of any Debt Warrant on each of May 1, 2025, September 1, 2025 and December 1, 2025, in each case, at a redemption price of $
| 17 |
10. Common Stock
As of June 30, 2024, NextNav had authorized the issuance of
11. Commitments and Contingencies
Litigation and Legal Matters
From time to time, the Company is party to litigation and other legal matters incidental to the conduct of its business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of June 30, 2024, the Company was not involved in any such matters, individually or in the aggregate, which management believes would have a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows.
12. Income Taxes
The Company computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period. A valuation allowance has been established against the Company’s U.S. federal and state deferred tax assets, which results in an annualized effective tax rate for the Company’s U.S. operations of
13. Subsequent Events
The Company has completed an evaluation of all subsequent events through the date of this Quarterly Report on Form 10-Q to ensure that these financial statements include appropriate disclosure of events both recognized in the financial statements and events which occurred but were not recognized in the financial statements. The Company has concluded that no subsequent events have occurred that require disclosure.
| 18 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying quarterly unaudited condensed consolidated financial statements and our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). Our 2023 Form 10-K includes additional information about our significant accounting policies, practices, and the transactions that underlie our financial results, as well as a detailed discussion of the most significant risks and uncertainties associated with our financial condition and operating results. In addition to historical financial information, some of the information contained in the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results and outcomes could differ materially for a variety of reasons. You should review “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Quarterly Report on Form 10-Q, as well as Item 1A, “Risk Factors” in our 2023 Form 10-K, as well as those otherwise described or updated from time to time in our other filings with the SEC, for a discussion of important factors that could cause our actual results to differ materially from the results described or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are the market leader in delivering resilient, next generation positioning, navigation and timing (“PNT”) solutions designed to complement and back up existing Global Positioning System (“GPS”) and Global Navigation Satellite Systems (“GNSS”) by addressing the limitations and vulnerabilities inherent in space-based systems. Our complementary PNT solutions are built on a deep asset base, which we are evolving to utilize 5G New Radio (“5G NR”) technologies. We expect NextGen, the evolution of our technology platform to 5G NR, to significantly improve the efficiency and flexibility of our operations, technically enabling the delivery of high-quality PNT based on a 5G broadband deployment. Since the inception of NextNav, LLC in 2007, we have secured valuable Federal Communications Commission (“FCC”) licenses for a contiguous 8 MHz band of Lower 900MHz spectrum covering over 90% of the U.S. population, subject to appropriate regulatory approvals have signed an agreement to acquire licenses for an additional 4MHz of Lower 900MHz spectrum, been granted more than 180 patents related to our systems and services, and standardized our TerraPoiNT technology in 3GPP, the global telecommunications standards-setting body.
On April 16, 2024 we petitioned the FCC to commence a rule making to update the Lower 900MHz band plan to allow us to utilize a 15MHz nationwide configuration for both PNT and 5G broadband. We believe that modernizing the Lower 900MHz Band will simultaneously enable a high-performing terrestrial PNT network to complement and back up GPS, a critical national security imperative, and add 5G mobile broadband capacity, a substantial public interest benefit. Our NextGen technology is designed to allow one or more partners to integrate our Lower 900MHz spectrum into their 5G networks, while we implement, operate and manage additional PNT-optimized infrastructure over the 5G network.
We currently deliver differentiated PNT solutions through our network-based Pinnacle and TerraPoiNT solutions. Our Pinnacle service provides accurate altitude to any device with a barometric pressure sensor, including most off-the-shelf smartphones. We launched our Pinnacle network in partnership with AT&T Services, Inc. (“AT&T”) for FirstNet®, the nationwide, interoperable public safety broadband network, and our network covers over 90% of commercial structures over three stories in the U.S. In addition to public safety applications and FirstNet®, our network is being used for enhanced 911 (“E911”) by Verizon Communications, Inc. (“Verizon”), and a growing set of devices operating on the remaining national cellular network providers. Our Pinnacle network is also an important component of our PNT resiliency services, and is being evaluated as a persistent PNT characterization platform.
Our TerraPoiNT system is a terrestrially-based network designed to address the limitations and vulnerabilities inherent in space-based PNT systems, and our NextGen technology, through the adoption of 5G NR, will simultaneously support both PNT and 5G broadband capabilities. Space-based PNT systems transmit a faint, unencrypted signal, which is often unavailable indoors, distorted in urban areas, and vulnerable to both jamming and spoofing. TerraPoiNT and its NextGen evolution overcome these limitations through the terrestrial transmission of a PNT signal on licensed Lower 900MHz spectrum. Unlike space-based signals, the TerraPoiNT and NextGen signals can be reliably received indoors and in urban areas, are difficult to jam or spoof, and can support robust authentication. TerraPoiNT and NextGen signals can embed Pinnacle information to provide a full 3D PNT solution, and can be configured to provide National Institute of Standards and Technology timing distribution services. Because our NextGen technology will be built on 5G NR, we expect significantly increased geographic coverage, more rapid network availability and expanded device availability for PNT services when combined with one or more 5G broadband partners’ networks. We believe that these capabilities are an essential complement and backup in the event of GPS disruptions, and are a critical need due to the economy’s reliance on GPS for location and precision timing. GPS resiliency is increasingly a U.S. national security priority, and is rising in priority in the European Union, non-European Union countries in Eastern Europe and in other parts of the world due to both the demonstrated vulnerability and lack of local control of space-based signals and systems, highlighted by recent events in Ukraine, the Middle East and elsewhere. Critical infrastructure, including communications networks and power grids, require a reliable GPS signal for accurate timing. A failure of GPS could be catastrophic, and there is no comprehensive, terrestrial backup that is widely deployed today.
| 19 |
Simultaneously, demand for wireless data services continues to grow. The backbone of wireless data services, electromagnetic spectrum, is a finite resource. Our spectrum licenses in the Lower 900MHz band are referred to as “low-band spectrum”. There is a finite amount of low-band spectrum available, and it has favorable coverage characteristics compared to higher frequencies, including the ability to provide services indoors and at greater distances. These characteristics result in its ability to be used for coverage and to be deployed more economically, with higher-frequency spectrum often used to provide additional capacity in targeted locations. Our transition to 5G NR as the basis for our PNT services will provide a technical capability for simultaneous broadband data in our band, in addition to our PNT services, and, subject to appropriate regulatory approvals, may allow us to utilize our spectrum to help meet the continued, growing demand for wireless data capacity while making more efficient use of our Lower 900MHz spectrum licenses.
As of June 2024, TerraPoiNT is deployed and available, with metro-wide service in the San Francisco Bay Area and select services available in 92 total markets nationally. In addition, NextNav supports a system deployed by the National Aeronautics and Space Administration at its Langley Research Center in Hampton, VA for drone operations research and is contracted to provide service at its Ames facility in Mountain View, CA, leveraging our network in the Bay Area
On October 31, 2022, we acquired Nestwave, SAS, a French société par actions simplifiée (as subsequently renamed, “NextNav France”), a privately held global leader in low-power geolocation, and completed integrating the NextNav France team into our existing engineering and technology organization during 2023. NextNav France provides advanced geolocation solutions to Internet of Things (“IOT”) modem and digital signal processor vendors and end IOT users. We believe that the combination of our technology with NextNav France’s LTE/5G capabilities will assist us in evolving our system to align with 5G NR.
NextNav France’s intellectual property also included a “soft GPS” capability, allowing GPS processing on LTE and 5G NR chipsets, reducing the cost and power requirements for certain types of GPS services for IOT devices. We have licensed this technology to chipset vendors, including a global Tier 1 LTE and 5G NR modem vendor. We expect to start to see the results of these licensing arrangements in 2024.
Macroeconomic Factors
We are aware that network deployment projects are experiencing delays in schedules and potential cost increases due to a tight labor supply in the field services market. While the impact of this supply constraint is not material to our network projects at this time, we continue to carefully manage labor and materials supply matters. Additionally, there is an increased risk of financial market disruption. Management continues to actively monitor our financial condition, liquidity, operations, suppliers, industry and workforce. We expect these macroeconomic factors and their effects on our operations to continue through the remainder of 2024.
Key Components of Results of Operations
Revenue
We have generated limited revenue since our inception. We derive our revenue from PNT products and services, including “floor-level” altitude location data, and related products and services. Our revenue includes revenue generated through services contracts with wireless carriers, services with applications developers, technology demonstration, assessment and support contracts with government customers, sales of equipment, and licensing of proprietary technology. We recognize revenue when an arrangement exists, services, equipment or access to licensed technology are delivered, the transaction price is determined, the arrangement has commercial substance, and collection of consideration is probable.
Operating Expense
Cost of Goods Sold
Cost of goods sold (“COGS”) consist of personnel-related expenses, including salaries, benefits and stock-based compensation, and allocated facility costs for our operations and manufacturing teams. COGS also includes expenses for site leases, cost of equipment, and professional services related to the maintenance of the equipment at each leased site. We expect our operations costs to increase for the foreseeable future as we continue to invest in our Pinnacle and TerraPoiNT networks in domestic U.S. and international markets.
Research and Development
Research and development expenses consist of personnel-related expenses, including salaries, benefits and stock-based compensation, and allocated facility costs for our research and development functions. Research and development costs also include outside professional services for software and hardware development, cloud hosting costs, and software licensing costs. We expect our research and development costs to increase for the foreseeable future as we continue to invest in research and development for our current and future products.
| 20 |
Selling, General and Administrative
Selling, general and administrative expenses consist of personnel-related expenses, including salaries, benefits and stock-based compensation, and allocated facility costs for our business development, marketing, corporate, executive, finance, legal, human resources, IT and other administrative functions. Selling, general and administrative expenses also include expenses for outside professional services, including legal, auditing and accounting services, recruitment expenses, travel expenses and certain non-income taxes, insurance and other administrative expenses.
We expect our selling, general and administrative expenses to increase for the foreseeable future with the growth of our business, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit, and additional insurance expenses, investor relations activities, and other administrative and professional services. As a result, we expect our selling, general and administrative expenses will increase in absolute dollars, subject to fluctuations in the volume of stock-based compensation granted, but may fluctuate as a percentage of total revenue over time.
Depreciation and Amortization
Depreciation and amortization expense results from depreciation and amortization of our property and equipment and intangible assets that is recognized over their estimated useful lives.
Interest Income (Expense)
Interest income consists of interest earned from our cash and cash equivalents balance and on marketable securities. Interest expense relates to interest and amortization of debt discounts on our senior secured notes.
Other Income (Expense)
Other income (expense) consists of miscellaneous non-operating items, such as change in fair value of warrants and asset purchase agreement liability, equity method income (loss), and foreign currency gains (losses).
Results of Operations
The following table sets forth our statements of operations for the periods indicated:
|
|
|
Three months ended June 30, |
Six months ended June 30, | |||||||||||||
|
|
|
2024 |
|
|
2023 |
2024 | 2023 | |||||||||
|
|
|
(in thousands) |
(in thousands) | |||||||||||||
|
Revenue |
|
$ |
1,105 |
|
|
$ |
800 |
$ | 2,151 | $ | 1,630 | |||||
|
Operating expense: |
|
|
|
|
|
|
|
|||||||||
|
Cost of goods sold (1) |
|
|
2,924 |
|
|
|
3,142 |
5,685 | 6,165 | |||||||
|
Research and development (1) |
|
|
4,110 |
|
|
|
4,994 |
8,780 | 9,572 | |||||||
|
Selling, general and administrative (1) |
|
|
8,108 |
|
|
|
6,516 |
16,554 | 12,570 | |||||||
|
Depreciation and amortization |
|
|
1,295 |
|
|
|
1,178 |
2,613 | 2,303 | |||||||
|
Total operating expenses |
|
|
16,437 |
|
|
|
15,830 |
33,632 | 30,610 | |||||||
|
Operating loss |
|
|
(15,332 |
) |
|
|
(15,030 |
) | (31,481 | ) | (28,980 | ) | ||||
|
Interest income (expense) |
|
|
(2,320 |
) |
|
|
(343 |
) | (4,489 | ) | 126 | |||||
|
Other expense |
|
|
(6,670 |
) |
|
|
(249 |
) | (19,918 | ) | (3,130 | ) | ||||
|
Loss before income taxes |
|
|
(24,322 |
) |
|
|
(15,622 |
) | (55,888 | ) | (31,984 | ) | ||||
|
Provision for income taxes |
|
|
(68 |
) |
|
|
(148 |
) | (112 | ) | (135 | ) | ||||
|
Net loss |
|
$ |
(24,390 |
) |
|
$ |
(15,770 |
) | $ | (56,000 | ) | $ | (32,119 | ) | ||
|
(1) |
Cost of goods sold, research and development, and selling, general and administrative expense for the periods do not include depreciation and amortization, which is presented separately in the Condensed Consolidated Statements of Comprehensive Loss, but include stock-based compensation as follows: |
| 21 |
|
|
|
Three months ended June 30, |
Six months ended June 30, | |||||||||||||
|
|
|
2024 |
|
|
2023 |
2024 | 2023 | |||||||||
|
|
|
(in thousands) |
(in thousands) | |||||||||||||
|
Cost of goods sold |
|
$ |
109 |
|
|
$ |
606 |
$ | 183 | $ | 1,144 | |||||
|
Research and development |
|
|
1,132 |
|
|
|
1,758 |
2,640 | 3,358 | |||||||
|
Selling, general and administrative |
|
|
2,410 |
|
|
|
2,006 |
5,073 | 3,734 | |||||||
|
Total stock-based compensation expense |
|
$ |
3,651 |
|
|
$ |
4,370 |
$ | 7,896 | $ | 8,236 | |||||
Comparison of the Three Months Ended June 30, 2024 and 2023
Revenue
|
|
|
Three months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Revenue |
|
$ |
1,105 |
|
|
$ |
800 |
|
|
$ |
305 |
|
|
38.1 |
% | |
Revenue increased by $0.3 million, or 38.1%, to $1.1 million for the three months ended June 30, 2024 from $0.8 million for the three months ended June 30, 2023. The increase was driven by an increase in recurring service revenue from technology and services contracts with commercial customers, including in support of government opportunities. For the three months ended June 30, 2024, one customer accounted for 71% of total revenue and another customer accounted for 14% of total revenue. For the three months ended June 30, 2023, one customer accounted for 89% of total revenue.
Operating Expense
Cost of Goods Sold (COGS)
|
|
|
Three months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
COGS |
|
$ |
2,924 |
|
|
$ |
3,142 |
|
|
$ |
(218 |
) |
|
|
(6.9) |
% |
COGS decreased by $0.2 million, or 6.9%, to $2.9 million for the three months ended June 30, 2024 from $3.1 million for the three months ended June 30, 2023. The decrease was primarily driven by a $0.5 million decrease in stock-based compensation, and a $0.1 million decrease in outside consulting expenses. The decreases were partially offset by a $0.2 million increase in non-recurring engineering services, and a $0.2 million increase in other operational expenses.
Research and Development
|
|
|
Three months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Research and development |
|
$ |
4,110 |
|
|
$ |
4,994 |
|
|
$ |
(884 |
) |
|
|
(17.7) |
% |
Research and development expenses decreased by $0.9 million, or 17.7%, to $4.1 million for the three months ended June 30, 2024 from $5.0 million for the three months ended June 30, 2023. The decrease was primarily driven by a $0.6 million decrease in stock-based compensation, a $0.3 million decrease in other operational expenses, and a $0.2 million decrease in software license expenses. The decreases were partially offset by a $0.1 million increase in payroll-related expenses, and a $0.1 million increase in outside consulting expenses.
| 22 |
Selling, General and Administrative
|
|
|
Three months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Selling, general and administrative |
|
$ |
8,108 |
|
|
$ |
6,516 |
|
|
$ |
1,592 |
|
|
24.4 |
% | |
Selling, general and administrative expenses increased by $1.6 million, or 24.4%, to $8.1 million for the three months ended June 30, 2024 from $6.5 million for the three months ended June 30, 2023. The increase was primarily driven by a $0.7 million increase in payroll-related expenses driven by headcount costs and employment separation costs, a $0.5 million increase in professional services, a $0.4 million increase in stock-based compensation, a $0.1 million increase in outside consulting expenses, and a $0.1 million increase in other operational expenses. The increases were partially offset by a $0.2 million decrease in directors’ and officers’ insurance.
Depreciation and Amortization
|
|
|
Three months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Depreciation and amortization |
|
$ |
1,295 |
|
|
$ |
1,178 |
|
|
$ |
117 |
|
|
9.9 |
% | |
Depreciation and amortization expenses increased by $0.1 million, or 10%, to $1.3 million for the three months ended June 30, 2024 from $1.2 million for the three months ended June 30, 2023. The increase in depreciation and amortization expense is primarily attributable to placing TerraPoiNT network assets in service after the second quarter of 2023.
Interest Income (Expense)
|
|
|
Three months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Interest income (expense) |
|
$ |
(2,320 |
) |
|
$ |
(343 |
) |
|
$ |
(1,977 |
) |
|
|
576.4 |
% |
Interest expense, net of interest income, increased by $2.0 million, or 576%, to $2.3 million for the three months ended June 30, 2024 from $0.3 million for the three months ended June 30, 2023. The increase in interest expense was due to interest and amortization of debt discounts on our senior secured notes issued during the second and third quarters of 2023.
Other Expense
|
|
|
Three months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Other expense |
|
$ |
(6,670 |
) |
|
$ |
(249 |
) |
|
$ |
(6,421 |
) |
|
|
2,578.7 |
% |
Other expense was $6.7 million for the three months ended June 30, 2024 compared with other expense of $0.2 million for the three months ended June 30, 2023. The change was primarily driven by the changes in the fair value of warrants and asset purchase agreement liability.
Comparison of the Six Months ended June 30, 2024 and 2023
Revenue
|
|
|
Six months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Revenue |
|
$ |
2,151 |
|
|
$ |
1,630 |
|
|
$ |
521 |
|
|
32.0 |
% | |
Revenue increased by $0.5 million, or 32.0%, to $2.2 million for the six months ended June 30, 2024 from $1.6 million for the six months ended June 30, 2023. The increase was driven by an increase in recurring service revenue from technology and services contracts with commercial customers, including in support of government opportunities. For the six months ended June 30, 2024, one customer accounted for 73% of total revenue and another customer accounted for 14% of total revenue. For the six months ended June 30, 2023, one customer accounted for 87% of total revenue.
Operating Expense
Cost of Goods Sold (COGS)
|
|
|
Six months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
COGS |
|
$ |
5,685 |
|
|
$ |
6,165 |
|
|
$ |
(480 |
) |
|
|
(7.8) |
% |
COGS decreased by $0.5 million, or 8%, to $5.7 million for the six months ended June 30, 2024 from $6.2 million for the six months ended June 30, 2023. The decrease was primarily driven by a $1.0 million decrease in stock-based compensation, and a $0.2 million decrease in outside consulting expenses. The decreases were partially offset by a $0.2 million increase in non-recurring engineering services, a $0.2 million increase in site rent expense due to deployment of new sites in 2023, and a $0.3 million increase in other operational expenses.
Research and Development
| Six months ended June 30, | ||||||||||||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Research and development |
|
$ |
8,780 |
|
|
$ |
9,572 |
|
|
$ |
(792 |
) |
|
|
(8.3) |
% |
Research and development expenses decreased by $0.8 million, or 8.3%, to $8.8 million for the six months ended June 30, 2024 from $9.6 million for the six months ended June 30, 2023. The decrease was primarily driven by a $0.7 million decrease in stock-based compensation, a $0.6 million decrease in software license expenses, and a $0.1 million decrease in professional services. The decreases were partially offset by a $0.6 million increase in payroll-related expenses driven by headcount.
Selling, General and Administrative
|
|
|
Six months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Selling, general and administrative |
|
$ |
16,554 |
|
|
$ |
12,570 |
|
|
$ |
3,984 |
|
|
31.7 |
% | |
Selling, general and administrative expenses increased by $4.0 million, or 31.7%, to $16.6 million for the six months ended June 30, 2024 from $12.6 million for the six months ended June 30, 2023. The increase was primarily driven by a $1.8 million increase in payroll-related expenses driven by headcount costs, executive and employment separation costs, a $1.3 million increase in stock-based compensation, a $0.9 million increase in professional services, a $0.2 million increase in outside consulting expenses, and a $0.2 million increase in other operational expenses. The increases were partially offset by a $0.4 million decrease in directors’ and officers’ insurance.
Depreciation and Amortization
|
|
|
Six months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Depreciation and amortization |
|
$ |
2,613 |
|
|
$ |
2,303 |
|
|
$ |
310 |
|
|
13.5 |
% | |
Depreciation and amortization expenses increased by $0.3 million, or 13%, to $2.6 million for the six months ended June 30, 2024 from $2.3 million for the six months ended June 30, 2023. The increase in depreciation and amortization expense is primarily attributable to placing TerraPoiNT network assets in service after the second quarter of 2023.
Interest Income (Expense)
|
|
|
Six months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Interest income (expense) |
|
$ |
(4,489 |
) |
|
$ |
126 |
|
$ |
(4,615 |
) |
|
|
(3,662.7 |
)% | |
Interest expense, net of interest income, for the six months ended June 30, 2024 was $4.5 million. Interest income, net of interest expense, for the six months ended June 30, 2023 was $0.1 million. The increase in interest expense was due to interest and amortization of debt discounts on our senior secured notes issued during the second and third quarters of 2023.
Other Expense
|
|
|
Six months ended June 30, |
|
|
|
|
|
|
| |||||||
|
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
| ||||
|
|
|
(in thousands) |
| |||||||||||||
|
Other expense |
|
$ |
(19,918 |
) |
|
$ |
(3,130 |
) |
|
$ |
(16,788 |
) |
|
|
536.4 |
% |
Other expense was $19.9 million for the six months ended June 30, 2024 compared with other expense of $3.1 million for the six months ended June 30, 2023. The change was primarily driven by the changes in the fair value of warrants and asset purchase agreement liability.
Liquidity and Capital Resources
We have incurred losses since our inception and to date have generated only limited revenue. We have primarily relied upon debt and equity financings to fund our cash requirements. During the six months ended June 30, 2024 and 2023, we incurred net losses of $56.0 million and $32.1 million, respectively. During the six months ended June 30, 2024, our net cash used in operating activities and investing activities was $19.3 million and $22.3 million, respectively. During the six months ended June 30, 2023, our net cash used in operating activities and investing activities was $15.9 million and $26.7 million, respectively. As of June 30, 2024, we had cash and cash equivalents and marketable securities of $86.3 million and an accumulated deficit of $816.2 million. We expect to incur additional losses and higher operating expenses for the foreseeable future. Our primary use of cash is to fund our operations as we continue to grow our business. We will require a significant amount of cash for expenditures as we invest in ongoing research and development and our PNT networks.
Managing liquidity and our cash position is a priority of ours. We continually work to optimize our expenses in light of the growth of our business, and adapt to changes in the economic environment. We believe that our cash and cash equivalents and marketable securities as of June 30, 2024 will be sufficient to meet our working capital and capital expenditure needs, including all contractual commitments, beyond the next 12 months from the filing of this Quarterly Report on Form 10-Q. We believe we will meet longer term expected future cash requirements and obligations through a combination of our existing cash and cash equivalents balances and marketable securities, cash flows from operations, and issuance of equity securities or debt offerings. However, this determination is based upon internal financial projections and is subject to changes in market and business conditions.
In 2023, we issued $70.0 million in aggregate principal amount of senior secured notes with a fixed interest rate of 10% to the lenders thereto. Such notes will mature on December 1, 2026 with interest payable semi-annually in arrears on June 1 and December 1 of each year. We may elect, at our sole discretion, to pay up to 50% of the accrued and unpaid interest on the senior secured notes due with our common stock. Refer to Note 8 to our condensed consolidated financial statements for the three and six months ended June 30, 2024 included elsewhere in this Quarterly Report on Form 10-Q. Since the end of second quarter and as of July 31, 2024, 2.3 million of Debt Warrants were exercised for an aggregate of $5.0 million in cash.
Cash Flows
The following table summarizes our cash flows for the period indicated:
|
|
|
Six months ended June 30, |
| |||||
|
|
|
2024 |
|
|
2023 |
| ||
|
|
|
(in thousands) |
| |||||
|
Net cash used in operating activities |
|
$ |
(19,279 |
) |
|
$ |
(15,919 |
) |
|
Net cash used in investing activities |
|
|
(22,319 |
) |
|
|
(26,659 |
) |
|
Net cash provided by financing activities |
|
|
22,671 |
|
|
48,146 |
||
Cash Flows from Operating Activities
Our cash flows used in operating activities are significantly affected by the growth of our business and are primarily related to research and development, sales and marketing, and selling, general and administrative activities. Our operating cash flows are also affected by our working capital needs to support growth in personnel-related expenditures and fluctuations in accounts payable and other current assets and liabilities.
Net cash used in operating activities during the six months ended June 30, 2024 was $19.3 million, resulting primarily from a net loss of $56.0 million adjusted for non-cash charges of $7.9 million for stock-based compensation, non-cash expense of $21.7 million for change in the fair value of warrant liability, $2.6 million for depreciation and amortization, and $3.0 million for amortization of debt discount. These changes were partially offset by a net increase in operating liabilities of $3.6 million, non-cash income of $1.9 million for change in fair value of asset purchase agreement liability and $0.3 million realized and unrealized gain on marketable securities.
Net cash used in operating activities during the six months ended June 30, 2023 was $15.9 million, resulting primarily from a net loss of $32.1 million adjusted for non-cash charges of $8.2 million for stock-based compensation, non-cash expense of $3.1 million for change in the fair value of warrant liability, $2.3 million for depreciation and amortization, $0.5 million for amortization of debt discount, $(0.2) million realized and unrealized gain on marketable securities, and $0.1 million for equity method investment loss. Additionally, there was a net decrease in operating assets of $2.2 million.
Cash Flows from Investing Activities
Net cash used in investing activities during the six months ended June 30, 2024 was $22.3 million, representing the purchase of marketable securities, net of sale and maturity of marketable securities, and cash used for asset purchase agreement and internal use software.
Net cash used in investing activities during the six months ended June 30, 2023 was $26.7 million, representing proceeds from the sale and maturity of marketable securities, partially offset by cash used for property and equipment primarily related to the deployment of the Pinnacle and TerraPoiNT network and internal use software.
Cash Flows from Financing Activities
Net cash provided by financing activities during the six months ended June 30, 2024 was $22.7 million, primarily reflecting cash proceeds from exercise of warrants and stock options.
Net cash provided by financing activities during the six months ended June 30, 2023 was $48.1 million, primarily reflecting cash proceeds from senior secured loans and partially offset by debt issuance cost.
Critical Accounting Policies and Significant Management Estimates
For a discussion of our critical accounting policies and estimates, please refer to Item 7 under Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Form 10-K and Note 2 to our condensed consolidated financial statements for the three months ended June 30, 2024 included elsewhere in this Quarterly Report on Form 10-Q .
Recently Issued and Adopted Accounting Standards
For information regarding new accounting pronouncements, and the impact of these pronouncements on our condensed consolidated financial statements, refer to Note 2 to our condensed consolidated financial statements for the six months ended June 30, 2024 included elsewhere in this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our market risks from those disclosed in Part II, Item 7A of the 2023 Form 10-K.
Item 4. Controls And Procedures
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2024. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of June 30, 2024.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the fiscal quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
In the course of our business, we are involved in litigation and legal matters from time to time. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. We accrue liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. We do not believe that any such matters, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations, or cash flows.
You should carefully consider all of the information included in this Quarterly Report on Form 10-Q before you decide whether to invest in our securities. Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with SEC on March 13, 2024, as well as those otherwise described or updated from time to time in our other filings with the SEC. You should consult your own financial and legal advisors as to the risks entailed by an investment in our securities and the suitability of investing in our securities in light of your particular circumstances.
| 28 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) Unregistered Sales of Equity Securities
In May 2024, we issued 397,037 unregistered shares of our common stock in connection with our acquisition of all of the issued and outstanding shares of NextNav France, pursuant to those certain Put & Call Option Agreements by and among us and certain shareholders of NextNav France , dated October 28, 2022. Such shares were issued in reliance upon the exemption from the registration requirements in Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. We filed a registration statement on Form S-3 to register these shares with SEC on June 5, 2024, which was declared effective on June 12, 2024.
On June 1, 2024, we issued 237,722 shares of our common stock in accordance with that certain Indenture, dated May 9, 2023, by and among us and the parties thereto, as partial payment of interest due on the senior secured notes that were issued pursuant to that certain Note Purchase Agreement, dated May 9, 2023, by and among us the purchasers thereto. Such shares were exempt from registration under the Securities Act as not involving a “sale” as such term is defined in Section 2(a)(3) of the Securities Act. We filed a registration statement on Form S-3 to register these shares with SEC on June 5, 2024, which was declared effective on June 12, 2024, in order to satisfy the provisions of that certain Resale Registration Rights Agreement, dated May 9, 2023, pursuant to which we agreed to register the resale of such shares.
(b) Use of Proceeds from Sale of Registered Equity Securities
None.
(c) Purchases of Equity Securities by the Issuer
The shares we received in connection with the settlement of employee receivables were repurchased at the current market value of the shares. For the three months ended June 30, 2024, these shares consisted of the following:
| Total Number of Shares Purchased |
Average Price Paid Per Share |
|||||||
| April 1 – April 30, 2024 | - | $ | - | |||||
| May 1 – May 31, 2024 | 3,016 | $ | 9.02 | |||||
| June 1 – June 30, 2024 | - | $ | - | |||||
| Total | 3,016 | |||||||
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Trading Plans
No other officers (as defined in Rule 16a-1(f) of the Exchange Act) or directors or a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (as such terms are defined in Item 408 of Regulation S-K) during the fiscal quarter ended June 30, 2024.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
|
Exhibit |
|
Description |
|
3.1* |
|
|
|
3.2* |
|
|
| 10.1+# | Employment Agreement, dated as of May 5, 2024, by and between NextNav Inc. and Sanyogita Shamsunder. | |
|
31.1 |
|
|
|
31.2 |
|
|
|
32.1** |
|
|
|
101.INS |
|
Inline XBRL Instance Document. |
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document. |
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document. |
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
|
|
* |
Filed previously. |
|
|
** |
Furnished herewith. |
| + |
Indicates management contract or compensatory arrangement. | |
| # | Certain schedules to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted schedules will be furnished supplementally to the SEC upon request. | |
| 30 |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
NEXTNAV INC. | |
|
|
|
|
|
Date: August 7, 2024 |
By: |
/s/ Christian D. Gates |
|
|
Name: |
Christian D. Gates |
|
|
Title: |
Executive Vice President, Chief Financial Officer and Principal Financial Officer |
|
|
|
|
|
Date: August 7, 2024 |
By: |
/s/ Sammaad R. Shams |
|
|
Name: |
Sammaad R. Shams |
|
|
Title: |
Chief Accounting Officer and Principal Accounting Officer |
| 31 |
This Executive Agreement (this “Agreement”) is made and entered into as of May 5, 2024 (the “Effective Date”), by and between NextNav Inc., a Delaware corporation (“NextNav”), NextNav, LLC, a Delaware limited liability company and an indirectly, wholly-owned subsidiary of NextNav (the “Employer”), and Sanyogita Shamsunder, a resident of the State of California (“Executive”). Unless the context indicates otherwise, references in this Agreement to the “Company” shall include NextNav and its subsidiaries and affiliates, including without limitation the Employer.
1. Position. During the Term of this Agreement, Executive will serve the Company (consistent with applicable international and strategic corporate requirements) as Chief Operating Officer (the “Position”). Executive will report directly to the Chief Executive Officer (“CEO”).
2. Duties. Executive shall serve the Company in such capacities and with such duties and responsibilities as are consistent with the Position, or as may from time to time reasonably be assigned to Executive by the CEO. Executive will comply with and be bound by the Company’s operating policies, procedures, and practices from time to time as generally in effect for persons with executive positions at the Company during Executive’s employment.
3. Exclusive Service. During the Term of this Agreement, Executive shall devote Executive’s full business time and efforts, subject to vacation and other permitted absences, exclusively to Executive’s employment with the Company and shall apply all of Executive’s skill and experience to the performance of Executive’s duties and advancing the Company’s interests in accordance with Executive’s experience and skills; provided, however, that Executive may engage in charitable, civic, fraternal, trade association, or other activities that (i) are not directly or indirectly competitive with the business of the Company, (ii) do not adversely interfere with Executive’s obligations to the Company, or (iii) do not constitute an actual or potential conflict of interest with the Company.
4. Term of Agreement. Executive shall be employed by the Company commencing on the Start Date and continuing through the fourth (4th) anniversary thereof, unless sooner terminated as described in Section 7 below (the “Initial Term”); provided that, on such fourth (4th) anniversary of the Start Date and each annual anniversary thereafter, the Agreement shall automatically renew for successive periods of one year (each, a “Subsequent Term”), as may be applicable, provided that neither the Company nor Executive has terminated the Agreement earlier as described in Section 7 and neither the Company nor Executive gives notice ninety (90) days before the upcoming renewal that the Company or Executive, as applicable, desires to end the Agreement. The Initial Term and any Subsequent Term shall be referred to as the “Term”, and the date Executive’s employment ceases with the Company for any reason shall be referred to as the “Termination Date”.
5.1 Base Salary. During the Term, the Employer shall pay to Executive a salary at the gross rate of Four Hundred Twenty-Five Thousand dollars ($425,000) per annum, payable in periodic installments in accordance with the Company’s customary payroll practices and applicable wage payment laws as in effect from time to time. Executive’s base salary shall be subject to adjustment, as determined by the CEO and authorized and approved by the Board of Directors (“Board”) or the Compensation Committee of the Board (the “Committee”)], in their sole discretion. Executive’s base salary, as may be in effect from time to time, is referred to herein as “Base Salary”.
5.2 Discretionary Target Bonus. For the period beginning on Executive’s Start Date and each calendar year thereafter, Executive will be eligible to earn an annual incentive bonus in accordance with the program adopted by the Board or the Committee (the “Annual Bonus”). Executive’s Annual Bonus for calendar year 2024 shall be paid at a full-year rate and shall not be pro-rated. Executive’s target Annual Bonus shall be equal to fifty percent (50%) of Executive’s Base Salary (the “Target Bonus”), subject to and based on the achievement of Company and personal performance goals established by the CEO and authorized and approved by the Board or the Committee; provided that, depending on results, Executive’s actual Annual Bonus may be higher or lower than the Target Bonus, as determined by the CEO and authorized and approved by the Board or the Committee, in their sole discretion. Executive’s Annual Bonus will be based eight-five percent (85%) on company performance, and fifteen percent (15%) on Executive’s individual performance. The Annual Bonus, if and to the extent earned, will be paid in the first quarter of the calendar year following the applicable performance year (and consistent with the timing for other executives). Bonus amounts may be paid in cash, immediately vesting equity, or any combination of cash and equity as may be determined by the Board or the Committee. Executive’s active employment during the entire applicable performance year and on the date of the payment of the Annual Bonus are both conditions precedent to Executive’s entitlement to earn the Annual Bonus. If Executive does not fulfill these conditions precedent or, in the sole judgment of the Board or the Committee, has not met the Company and personal performance goals, Executive will not have earned an Annual Bonus or any portion thereof for that particular calendar year.
| 1 |
5.3 Equity Grants. In connection with Executive’s employment hereunder, the Board of Directors or the Compensation Committee has determined to award to Executive the following grants, subject to the terms of NextNav’s 2021 Omnibus Incentive Plan (“the Plan”). No right to any equity grant is earned or accrued until such time as vesting occurs, and equity grants do not confer any right to continued vesting or employment
a. As of the Start Date, equity grants will be made to the Executive with an aggregate value of Two-Million One-Hundred Thousand dollars ($2,100,000) divided in value between NextNav restricted stock units (“RSU”) with a grant value equal to One-Million Dollars One-Hundred Thousand dollars ($1,100,000) and a grant of NextNav stock options (“Options”) with a grant value of One Million dollars ($1,000,000). In each case the conversion of the grant value into the amount of RSUs and Options will be calculated using a trailing twenty (20) day average of Company stock price from the grant date, consistent with grant calculations made for other executives, and otherwise be in accordance with the terms of the Plan. Executive’s Option exercise price shall be priced at one hundred and ten (110%) of the trailing twenty (20) day average of the Company stock price from the grant date. Thirty percent (30%) of the RSUs and Options shall vest twelve (12) months from the grant date, and subject to your continued employment with the Company the RSUs and options shall continue vesting in equal quarterly installments over the subsequent three years;
b. Subject to Board or Committee authorization and approval, in the first quarter of 2025, Executive will be eligible for an annual long-term incentive grant valued at One Million dollars ($1,000,000) divided equally in value between NextNav RSUs and Options. As to each of these grants, 1/4 shall vest on the one- year anniversary of the grant date and the remaining 3/4 of the grant shall vest in equal installments of 1/12 per quarter thereafter. In each case the conversion of the grant value into RSUs and Options will be calculated using a trailing twenty (20) day average of Company stock price from the grant date, consistent with grant calculations made for other executives, and otherwise be in accordance with the terms of the Plan. Executive’s Option exercise price shall be priced at one hundred and ten (110%) of the training twenty (20) day average of the Company stock price from the grant date. Thereafter, annual equity grant amounts will be subject to the authorization and approval of the Board or Committee in their sole discretion. Such annual long-term incentive equity grants shall vest over a four-year period, consistent with grant calculations made for other executives, and each in the form previously approved by the Board or Committee in connection with the Plan, a form of each of which has been provided to Executive.
5.4 Benefits; Paid Time Off. During the Term of this Agreement, Executive will be eligible to participate in the Company’s employee benefit plans applicable to similarly situated employees of the Company, as in effect from time to time, in accordance with the rules established for individual participation (or, as applicable, participation by spouse, domestic partner and/or family) in any such plan and applicable law. Executive will be eligible for vacation and paid sick leave in accordance with applicable law and the Company’s policies in effect from time to time. Executive will also be eligible for paid holidays as the Company generally provides to its employees holding similar positions to that of Executive. However, nothing in this Agreement shall, in any way, require the Company to establish any such benefits or continue to maintain any such benefits programs or plans, or limit the Company from making any blanket amendments, changes, or modifications to the eligibility requirements or any other provisions of any employee benefit plan or benefit, and Executive’s participation in or entitlement under such plans and benefits shall at all times be subject in all respects thereto.
5.5 Expense Reimbursements. Upon presentation of verifiable invoices and/or other documentation as may be requested by the Employer, and subject to the Company’s expense reimbursement policies, the Employer shall reimburse Executive for the reasonable and necessary costs and expenses that Executive incurs in connection with the performance of Executive’s duties and employment obligations, and for activities and events related to the business of the Company.
5.6 D&O Insurance; Indemnification. Executive shall be provided with an indemnification agreement in the form approved by the Board, and provided to other Executives and Board members. Executive shall be covered under any D&O insurance policy as may be in effect from time to time.
6. Proprietary Rights. Simultaneously with execution of this Agreement, Executive shall execute a Confidential Information, Invention Assignment, and Arbitration Agreement (the “Confidentiality Agreement”) with the Company in the form attached hereto as Exhibit A. The Confidentiality Agreement shall survive termination of Executive’s employment, regardless of the reason for such termination.
| 2 |
7.1 “Cause” Defined. For purposes of this Agreement, “Cause” shall mean: (a) Executive’s refusal to perform, or ongoing negligence in performing, Executive’s duties or responsibilities (other than a failure resulting from Executive’s death or Disability, as defined below) upon reasonable direction of the CEO; (b) Executive’s engaging in any act of fraud or misrepresentation involving the Company or its assets; (c) Executive’s engaging in sexual misconduct or harassment or similar behavior in Executive’s personal or professional capacity; (d) Executive’s knowing violation of any federal or state law or regulation applicable to the Company’s business; (e) Executive’s material breach of any term of the Confidentiality Agreement or this Agreement; (f) Executive’s being convicted of, or entering a plea of nolo contendere to, any felony or any misdemeanor involving material acts of moral turpitude, embezzlement, theft, or other similar act; (g) Executive’s material breach or violation of any other Company policy or formal procedure; (h) Executive’s engaging in gross misconduct or gross negligence; or (i) where the Company reasonably believes that Executive engaged in conduct which would cause the Company to suffer material disrepute or reputational harm or otherwise be materially injurious to the Company; provided, however, that in the event the Company in its sole discretion determines that the events alleged to constitute Cause are curable, Executive shall be provided with up to twenty (20) days to cure or explain the events alleged to constitute Cause (during which twenty (20) day period Executive’s active employment may be suspended).
7.2 “Disability” Defined. For purposes of this Agreement, “Disability” shall mean Executive is unable to perform the essential functions of Executive’s position, with or without reasonable accommodation, due to a medically-determined mental or physical impairment that continues for at least ninety (90) consecutive days or one hundred twenty (120) days in any consecutive three hundred sixty five (365) day period. Executive further agrees that providing a leave of absence beyond the Disability period as a form of disability accommodation under state or federal law would not be a reasonable accommodation and would cause undue hardship for the Company in light of Executive’s Position.
7.3 “Good Reason” Defined. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following without Executive’s consent: (a) a material reduction in Executive’s total compensation (including, but not limited to, the Target Bonus opportunity), provided that such reduction is not part of a Company-wide reduction applicable to the executive team or Company-wide; or (b) a material change in geographic location at which Executive must perform services, which for this purpose shall mean a relocation of Executive’s principal office of employment to more than fifty (50) miles from Executive’s current location; or (c) a material breach of this Agreement by the Company or its successor. An event shall only qualify as a “Good Reason” if: (i) Executive provides the Company written notice of the claimed event of Good Reason within ninety (90) days of the date that such event first occurs (such notice shall describe in detail the basis and underlying facts supporting Executive’s belief that a Good Reason event has occurred); and (ii) the Company does not cure such claimed event of Good Reason within thirty (30) days of receipt of written notice from Executive. If Executive does not terminate employment for Good Reason within one hundred twenty (120) days after the first occurrence of the applicable Good Reason event, then Executive will be deemed to have waived the right to terminate for Good Reason with respect to such Good Reason event.
7.4 “Change in Control” Defined. For purposes of this Agreement, “Change in Control” shall have the meaning ascribed thereto in the Company’s 2021 Omnibus Incentive Plan (as it has been or may be amended and/or restated from time to time and any successor plan thereto).
8.1 Termination by the Company for Cause During the Term, Resignation By Executive Without Good Reason During the Term, or the Expiration of Term By Notice of Non-Renewal By Executive. In the event of: (a) a termination by the Company for Cause during the Term; or (b) resignation by Executive without Good Reason during the Term; or (c) wherein Executive provides notice to the Company prior to the expiration of the Initial Term or any Subsequent Term of Executive’s intention not to renew the Agreement, the Company shall pay Executive or Executive’s heirs (in the event of death or incapacity) the compensation and benefits otherwise payable to Executive under Section 5 hereof earned through the Termination Date and any expense reimbursements due and owing to Executive which were incurred prior to the Termination Date (“Accrued Compensation”). Executive’s rights under the Company’s benefit plans shall be determined under the provisions of those plans. Executive shall not receive any other payments or severance of any kind.
8.2 Termination due to Death or Disability. In the event of Executive’s termination as a result of Executive’s death or Disability, the Company shall pay Executive or Executive’s heirs (in the event of death or incapacity) the Accrued Compensation as well as the pro-rated bonus for the year of Executive’s death or Disability, payable when bonuses are paid to other employees.
8.3 Termination by Company without Cause, Executive’s Resignation for Good Reason, or due to Expiration of Term By Notice of Non-Renewal By the Company. If Executive’s employment is terminated by the Company without Cause (other than on account of Executive’s death or Disability), due to Executive’s resignation for Good Reason, or on account of non-renewal by the Company in accordance with Section 4, then the Company shall provide Executive with the following benefits:
a. The Company shall pay Executive the Accrued Compensation;
b. Conditioned upon and in exchange for Executive signing, not revoking and allowing to become effective a General Release of all claims in a form to be provided by the Company (the “General Release”), and such General Release becoming effective within sixty (60) days following the Termination Date (such sixty (60)-day period, the “General Release Execution Period”):
| 3 |
i. Pay to Executive a lump sum payment, less applicable required withholdings and deductions, equal to twelve (12) months of Executive’s then current Base Salary (ignoring any decrease in Base Salary that formed the basis for Good Reason), which shall be payable on the next regular payroll date of the Company following the sixtieth (60th) day following the Termination Date; provided that, in no event shall such payment occur later than March 15th of the calendar year following the calendar year in which the Termination Date occurs;
ii. Pay to Executive any earned but unpaid Annual Bonus with respect to any completed calendar year immediately preceding the Termination Date or, in the event that less than a full calendar year was completed, a pro-rated Annual Bonus (such earned amount determined without regard to the requirement of Executive being employed on the date of payment), which shall be paid on the otherwise applicable payment date for such Annual Bonus;
iii. If Executive timely elects and is eligible for continued coverage under COBRA for Executive and covered dependents under the Company’s group health plans following such termination employment, then the Company will pay the COBRA premiums necessary to continue Executive’s health insurance coverage in effect for Executive and eligible dependents on the Termination Date, as and when due to the insurance carrier or COBRA administrator (as applicable), through the earlier to occur of the expiration of the twelve (12)-month period following his Termination Date, the date Executive becomes eligible for coverage under another employer’s group health plan, or the cessation of Executive’s eligibility for the continuation coverage under COBRA. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that the payment of the COBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Internal Revenue Code (the “Code”) or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, the Company, in its sole discretion, may elect instead to pay Executive on the first day of each month of the applicable period, a fully taxable cash payment equal to such portion of the COBRA premiums for that month, subject to applicable tax withholdings. If Executive becomes eligible for coverage under another employer’s group health plan or otherwise ceases to be eligible for COBRA during the period provided in this clause, Executive must immediately notify the Company of such event, and all payments and obligations under this clause will cease;
iv. All of Executive’s then outstanding, unvested equity-based awards subject solely to time-based vesting, that would have become vested (but for such. termination) during the twelve (12)-month period beginning on the Termination Date, shall vest as of the date immediately prior to the Termination Date; and
v. Subject to the next succeeding sentence, all of Executive’s outstanding unvested equity based compensation awards subject to performance-based vesting granted to Executive during the Term shall be subject to the terms of the applicable award agreement. Notwithstanding the foregoing, if the Executive’s employment is terminated without Cause by the Company during the first two years following the Effective Date, then all of the Executive’s outstanding unvested equity based awards subject to performance-based vesting granted during the Term to the Executive shall vest as of the date immediately prior to the Termination Date.
8.4 Change in Control. Notwithstanding any other provision contained herein and without duplication of Section 8.3, if Executive’s employment is terminated by the Company without Cause (other than on account of Executive’s death or Disability), due to Executive’s resignation for Good Reason, or on account of non-renewal by the Company in accordance with Section 4, in each case within the period beginning on the date the Company enters into a definitive agreement that if consummated would result in a Change in Control and ending on the twelve (12) month anniversary of such Change in Control, then the Company shall provide Executive with the following benefits:
a. The Company shall pay Executive the Accrued Compensation;
b. Conditioned upon and in exchange for Executive signing, not revoking and allowing to become effective the General Release within the General Release Execution Period:
| 4 |
i. Pay to Executive a lump sum payment, less applicable required withholdings and deductions, equal to one hundred and fifty percent (150%) of the sum of (A) then current Executive’s Base Salary and (B) Executive’s Target Bonus for the year in which the Termination Date occurs (ignoring any decrease in Base Salary or Target Bonus that formed the basis for Good Reason), which shall be payable on the next regular payroll date of the Company following the sixtieth (60th) day following the Termination Date; provided that, in no event shall such payment occur later than March 15th of the calendar year following the calendar year in which the Termination Date occurs;
ii. Pay to Executive any earned but unpaid Annual Bonus with respect to any completed calendar year immediately preceding the Termination Date (such earned amount determined without regard to the requirement of Executive being employed on the date of payment), which shall be paid on the otherwise applicable payment date for such Annual Bonus;
iii. If Executive timely elects and is eligible for continued coverage under COBRA for Executive and covered dependents under the Company’s group health plans following such termination employment, then the Company will pay the COBRA premiums necessary to continue Executive’s health insurance coverage in effect for Executive and eligible dependents on the Termination Date, as and when due to the insurance carrier or COBRA administrator (as applicable), through the earlier to occur of the expiration of the twelve (12)-month period following her Termination Date, the date Executive becomes eligible for coverage under another employer’s group health plan, or the cessation of Executive’s eligibility for the continuation coverage under COBRA. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that the payment of the COBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, the Company, in its sole discretion, may elect instead to pay Executive on the first day of each month of the applicable period, a fully taxable cash payment equal to such portion of the COBRA premiums for that month, subject to applicable tax withholdings. If Executive becomes eligible for coverage under another employer’s group health plan or otherwise ceases to be eligible for COBRA during the period provided in this clause, Executive must immediately notify the Company of such event, and all payments and obligations under this clause will cease;
iv. All other outstanding, unvested equity-based compensation awards subject solely to time-based vesting granted to Executive during the Term shall become fully vested as of the date immediately prior to the Termination Date; and
v. Subject to the next succeeding sentence, all outstanding, unvested equity-based compensation awards subject to performance-based vesting granted to Executive during the Term shall be subject to the terms of the applicable award agreement. Notwithstanding the foregoing, if the Executive’s employment is terminated without Cause by the Company during the first two years following the Effective Date, then all of the Executive’s outstanding unvested equity based awards subject to performance-based vesting granted during the Term to the Executive shall vest as of the date immediately prior to the Termination Date.
8.5 Severance Limitations. Executive shall not receive any other payments or severance of any kind, except as expressly set forth in this Agreement.
8.6 Resignation as Officer or Director. Upon termination of employment for any reason, Executive shall resign immediately from each position that Executive then holds as an officer or director of the Company or any affiliate, or related entity thereof.
9. Miscellaneous.
| 5 |
9.1 Arbitration. The Company and Executive agree that all claims, complaints, controversies, grievances, or disputes that arise out of or relate in any way to the parties’ relationship, whether based on contract, tort, statutory, or any other legal theory, shall be submitted to mandatory, binding arbitration before a single, neutral arbitrator who is licensed to practice law in the state in which the arbitration is convened (the “Arbitrator”). The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et seq., as amended, and shall be administered by the American Arbitration Association (“AAA”) in accordance with its then-current Employment Arbitration Rules and Mediation Procedures. The Rules are available online at www.adr.org. If the AAA Employment Arbitration Rules and Mediation Procedures are inconsistent with the terms of this Agreement, the terms of this Agreement shall govern. The Arbitration shall be convened in the county in which Executive was employed most recently by the Company, and specifically will take place in Santa Clara County, California. The Arbitrator will have the authority to award legal fees and costs of the arbitration to the prevailing party.
a. Waiver of Trial by Jury. The parties understand and fully agree that by agreeing to arbitrate, they are giving up their constitutional right to a trial by jury, as well as their rights of appeal following the rendering of a decision, except as the Federal Arbitration Act and applicable federal law provide for judicial review of arbitration proceedings.
b. Covered Claims. This Section 9.1 covers all claims under federal, state or local law arising out of or relating to Executive’s application for employment with the Company, any offer of employment made by the Company, Executive’s employment by the Company, the breach of this or any other employment agreement, the termination of Executive’s employment with the Company, or any other aspect of Executive’s relationship with the Company, including claims that do not relate to Executive’s employment with the Company, claims that Executive may have against the Company or the Company’s subsidiaries, parents, affiliates, successors, or predecessors and their respective officers, directors, supervisors, managers, employees, or agents in their capacity as such or otherwise, and claims that the Company may have against Executive. The claims covered by this Section 9.1 (the “Covered Claims”) include, but are not limited to, claims for breach of any contract or covenant (express or implied), tort claims, claims for wrongful termination (constructive or actual) in violation of public policy, claims for discrimination or harassment (including, but not limited to, harassment or discrimination based on race, sex, gender, religion, national origin, age, marital status, medical condition, psychological condition, mental condition, disability, sexual orientation, or any other characteristic protected by law), claims for violation of any federal, state, or other governmental law, statute, regulation, or ordinance, including, but not limited to, all claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans With Disabilities Act, the Consolidated Omnibus Budget Reconciliation Act of 1985, and Employee Retirement Income Security Act. The parties specifically agree that the Covered Claims include claims under the Fair Labor Standards Act and other federal, state, or local laws governing wages, hours and working conditions, including, but not limited to, claims for overtime, unpaid wages, paid or unpaid leave, and meal period and rest break violations.
c. Claims Not Covered. Claims for workers’ compensation benefits, unemployment compensation benefits, or any other claims that, as a matter of law, the parties hereto cannot agree to arbitrate are not subject to, and are excluded from, this Section 9.1. Nothing in this Section 9.1 shall be interpreted to prohibit or preclude the filing of complaints with the Equal Employment Opportunity Commission, or the National Labor Relations Board, or a similar state or local agency.
d. Waiver of Class, Representative, and Collective Action Claims. Except as otherwise required by law, Executive and the Company expressly intend and agree that: (i) class action and collective action procedures shall neither be asserted nor apply in any arbitration conducted pursuant to this Agreement; (ii) each party will not assert class or collective action claims against the other in arbitration or otherwise; and (iii) Executive and the Company shall only submit their own, individual claims in arbitration and will not seek to represent the interests of any other person.
e. Substantive Law. All Covered Claims shall be submitted to arbitration within the applicable statute of limitations period for the assertion of such claims in a court proceeding under California law, and shall otherwise be deemed to barred and waived if not submitted to arbitration within the applicable statute of limitations. The Arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state in which the claim arose, or federal law, or both, as applicable to the claim(s) asserted. The Federal Rules of Evidence shall apply. The Arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, or enforceability of this arbitration agreement. The Arbitrator shall conduct and preside over an arbitration hearing of reasonable length, to be determined by the Arbitrator. The Arbitrator shall provide the Parties with a written decision explaining his or her findings and conclusions. The Arbitrator’s decision shall be final and binding upon the parties.
f. Other Provisions. Either party may bring an action in court to confirm, vacate or enforce an arbitration award entered pursuant to this Section 9.1. This Section 9.1 shall not limit the Company’s ability to seek injunctive relief in accordance with Section 9.3. Each party shall bear its own attorneys’ fees and costs and other expenses of such action. The Company shall be responsible for all costs unique to the arbitration process to the extent required by applicable law. Otherwise, each party shall be responsible for paying its own costs for the arbitration, including but not limited to attorneys’ fees. However, if any party prevails on a statutory claim which affords the prevailing party attorneys’ fees and costs, or if there is a written agreement providing for attorneys’ fees and costs, the Arbitrator (or if applicable, the court) may award reasonable attorneys’ fees and costs to the prevailing party. Any dispute as to the reasonableness of any fee or cost shall be resolved by the Arbitrator. This Section 9.1 shall survive the termination of Executive’s employment. It may only be revoked or modified in a writing that specifically states the intent to revoke or modify the arbitration provisions of the Agreement and that is signed by both Executive and the Company.
| 6 |
9.2 Severability. In the event that any provision of this Agreement shall be unenforceable or inoperative as a matter of law, the remaining portions or provisions shall remain in full force and effect.
a. Injunctive Relief. .Notwithstanding Section 9.1, in the event of a breach or threatened breach by the either party of the Confidentiality Agreement, each Party hereby consents and agrees that the other shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages, or other available forms of relief.
b. Other Relief. The availability of specific performance or injunctive relief for the material breach or threatened material breach by Executive of this Agreement shall in no way limit or otherwise affect the availability of other remedies to the Company, including monetary damages, for injuries sustained that specific performance or an injunction will not remedy.
9.4 Waiver. All waivers hereunder shall be in writing. No waiver by any party of any breach or anticipated breach of any provision of this Agreement by the other party shall be deemed a waiver of any other contemporaneous, preceding, or succeeding breach or anticipated breach, whether or not similar.
9.5 Assignment. The Company may, in its discretion, assign its rights and/or delegate its obligations under this Agreement to any successor of the Company, whether by operation of law, agreement or otherwise (including, without limitation, to any person who acquires all or a substantial portion of the business of the Company or any of its subsidiaries, whether direct or indirect and whether structured as a stock sale, asset sale, merger, recapitalization, consolidation or other transaction), and in connection with any such assignment or delegation of its obligations hereunder, shall be released from such obligations hereunder. This Agreement may not be assigned by Executive. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by Executive, the Company, and their respective successors and assigns.
9.6 Entire Agreement. This Agreement (together with the Exhibits attached hereto) and the other agreements referenced herein constitute the entire agreement between the parties pertaining to the subject matter contained herein and supersedes all prior agreements, representations, and understandings of the parties pertaining to such subject matter. The Exhibits attached hereto are incorporated herein by reference and made a part hereof.
9.7 Amendment. This Agreement may not be amended, supplemented, canceled, or discharged except by written instrument executed by the parties.
9.8 Notices. Unless otherwise specified in this Agreement, all notices, demands, elections, requests or other communications that any party to this Agreement may desire or be required to give hereunder shall be in writing and shall be given by hand, by facsimile, by email, by registered or certified mail, return receipt requested, bearing proper postage, or by a recognized overnight courier service providing confirmation of delivery, addressed as follows:
| If to the Company: | NextNav Inc. |
| 1775 Tysons Blvd. | |
| 5th floor | |
| Tysons, VA 22102 | |
| Attention: CEO |
In each case, with a copy (which shall not constitute notice) to:
| Squire Patton Boggs (US) LLP | |
| 1841 Page Mill Road, Suite 150 | |
| Palo Alto, California 94304-1216 | |
| Attention: Karen Wentzel |
If to Executive, at the address on file with the Company.
| 7 |
Each party shall have the right to designate another address or change an address by written notice to the other parties in the manner prescribed herein. All notices given pursuant to this Section 9.8 shall be deemed to have been given: (a) if delivered by hand on the date of delivery or on the date delivery was refused by the addressee; (b) if by registered or certified mail, three (3) business days after deposit in the United States mail in the manner set forth above; (c) if delivered by overnight courier, on the date of delivery as established by the return receipt or courier service confirmation (or the date on which the courier service confirms that acceptance of delivery was refused by the addressee); or (d) if delivered by facsimile or email, on the date of such facsimile or e-mail transmission as set forth in a facsimile log or the body of such e-mail transmission, as applicable.
9.9 Interpretation. The section headings used in this Agreement are inserted for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. This Agreement and the provisions contained herein shall not be construed or interpreted for or against any party hereto because that party drafted or caused that party’s legal representative to draft any of its provisions. References in this Agreement to amounts of money expressed in dollars are references to United States dollars. As used herein, “person” means an individual or entity.
9.10 Counterparts. This Agreement may be executed in counterparts and by facsimile or e-mail with scan attachment, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.
9.11 Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without regard to its conflict of laws provisions.
9.12 Advice of Counsel. Executive acknowledges that Executive has been advised to seek independent legal counsel for advice regarding the effect of the terms and provisions hereof, and has obtained or waived the right to obtain such advice of independent legal counsel.
9.13 Conditions to Employment. Executive shall provide the Company with such proof of Executive’s United States citizenship or authorization to work in the United States as required by law. Executive represents that Executive is under no contractual or other restriction inconsistent with the intention and provisions of this Agreement, the performance of Executive’s duties hereunder, or the rights of the Company under this Agreement.
9.14 Application of Section 280G. If any of the payments or benefits received or to be received by Executive (including, without limitation, any payment or benefits received in connection with a Change in Control or Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively referred to herein as the “280G Payment”) constitute “parachute payments” within the meaning of Section 280G of the Code, and the regulations promulgated thereunder and will be subject to the excise tax imposed under Code Section 4999 (the “Excise Tax”), then the 280G Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (a) the largest portion of the 280G Payment that would result in no portion of the 280G Payment being subject to the Excise Tax, or (b) the largest portion of the 280G Payment, up to and including the total 280G Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater amount of the 280G Payment, notwithstanding that all or some portion of the 280G Payment may be subject to the Excise Tax. In making the determination described above, the Company, in its sole and absolute discretion, shall make a reasonable determination of the value to be assigned to any restrictive covenants in effect for Executive, and the amount of the 280G Payment shall be reduced by the value of those restrictive covenants to the extent consistent with Code Section 280G. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the 280G Payment equals the Reduced Amount, the amounts payable or benefits to be provided to Executive shall be reduced such that the economic loss to Executive as a result of the “parachute payment” elimination is minimized. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Code Section 409A and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero. All determinations to be made under this Section shall be made by an independent accounting firm, consulting firm or other independent service provider selected by the Company immediately prior to the Change in Control (the “Firm”), which shall provide its determinations and any supporting calculations both to the Company and Executive within ten (10) days of the Change in Control. Any such determination by the Firm shall be binding upon the Company and Executive. All of the fees and expenses of the Firm in performing the determinations referred to in this Section shall be borne solely by the Company.
| 8 |
a. It is intended that compensation paid and benefits delivered to Executive pursuant to this Agreement shall be either paid in compliance with, or exempt from, Code Section 409A (“Section 409A”) so as not to subject Executive to payment of interest or any tax under Section 409A, and this Agreement shall be construed, interpreted and administered accordingly. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Executive’s right to receive any installment payment pursuant to this Agreement (if any) shall be treated as a right to receive a series of separate and distinct payments for purposes of Section 409A. Any payment to be made under this Agreement upon a termination of employment shall only be made upon a “separation from service” under Section 409A. Notwithstanding the foregoing, in the event this Agreement or any compensation paid or benefits delivered to Executive hereunder is deemed to be subject to Section 409A, the Company shall adopt such conforming amendments as the Company deems necessary, in its reasonable discretion, to comply with Section 409A and avoid the imposition of taxes under Section 409A. In no event shall the Company, the Board, the Committee, any employee of the Company, or any adviser of any of the foregoing be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by Executive on account of non-compliance with Section 409A.
b. Notwithstanding any provision in the Agreement to the contrary, if any payment or benefit provided to Executive in connection with Executive’s termination of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and Executive is determined to be a “specified employee” (as defined in Section 409A), then such payment or benefit shall not be paid until the first payroll date following the six (6)-month anniversary of the Termination Date or, if earlier, the first payroll date following Executive’s death (the “Specified Employee Payment Date”). The aggregate of any payments that would otherwise be paid before the Specified Employee Payment Date shall be paid, without interest, in a lump sum on the Specified Employee Payment Date, and thereafter any remaining payments, if any, shall be paid without delay in accordance with their original schedule.
c. Notwithstanding any provision in this Agreement to the contrary, the reimbursement of expenses or in-kind benefits provided pursuant to this Agreement shall be subject to the following conditions: (i) the expenses eligible for reimbursement or in-kind benefits in one taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year; (ii) the reimbursement of eligible expenses or in-kind benefits shall be made promptly, subject to the Company’s applicable policies, but in no event later than the end of the year after the year in which such expense was incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
[Signature Page Follows]
| 9 |
IN WITNESS WHEREOF, the Company, the Employer and Executive have executed this Agreement as of the date first above written.
NextNav Inc.
| Dated: 5/5/2024 | By: | /s/Mariam Sorond | ||
| Name: | Mariam Sorond | |||
| Title: | CEO |
NextNav LLC.
| Dated: 5/5/2024 | By: | /s/Mariam Sorond | ||
| Name: | Mariam Sorond | |||
| Title: | CEO |
| Dated: 5/5/2024 | By: | /s/Sanyogita Shamsunder | ||
| Name: | Sanyogita Shamsunder |
| 10 |
EXHIBIT A
NEXTNAV INC. CONFIDENTIAL INFORMATION, INVENTION ASSIGNMENT, AND
ARBITRATION AGREEMENT
As a condition of my employment with NextNav Inc., its subsidiaries, affiliates, successors or assigns (together the “Company”), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by Company, I agree to the following provisions of this Confidential Information, Invention Assignment, and Arbitration Agreement (this “Agreement”):
1. Confidential Information.
A. Company Information. I agree that during and after my employment with the Company, I will hold in the strictest confidence, and will not use (except for the benefit of the Company during my employment) or disclose to any person, firm, or corporation (without written authorization of the CEO, or the Board of Directors of the Company) any Company Confidential Information. I understand that my unauthorized use or disclosure of Company Confidential Information during my employment may lead to disciplinary action, up to and including immediate termination and, furthermore that unauthorized use or disclosure of Company Confidential Information during or after my employment with the Company may also result in legal action being taken against me by the Company. I understand that “Company Confidential Information” means any non- public information that relates to the actual or anticipated business, research or development of the Company, or to the Company’s technical data, trade secrets, or know-how, including, but not limited to, research, product plans, or other information regarding the Company’s products or services and markets therefore, customer lists and customers (including, but not limited to, customers of the Company on which I called or with which I may become acquainted during the term of my employment), software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, and other business information; provided, however, Company Confidential Information does not include any of the foregoing items to the extent the same have become publicly known and made generally available through no wrongful act of mine or of others. I understand that nothing in this Agreement is intended to limit employees’ rights to discuss the terms, wages, and working conditions of their employment, as protected by applicable law.
| 11 |
2. Inventions.
A. Inventions Retained and Licensed. I have attached hereto as Schedule 1, a list describing all inventions, discoveries, original works of authorship, developments, improvements, and trade secrets, whether or not patentable or registrable under patent, copyright, or similar laws, that were conceived in whole or in part by me prior to my employment with the Company and to which I have any right, title, or interest, which are subject to California Labor Code Section 2870 (attached hereto as Schedule 2), and which relate to the Company’s proposed business, products, or research and development (“Prior Inventions”); or, if no such list is attached, I represent and warrant that there are no such Prior Inventions. Furthermore, I represent and warrant that if any Prior Inventions are included on Schedule 1, they will not materially affect my ability to perform all obligations under this Agreement. If, in the course of my employment with the Company, I incorporate into or use in connection with any product, process, service, technology, or other work by or on behalf of the Company any Prior Invention, I hereby grant to the Company a non- exclusive, royalty-free, fully paid-up, irrevocable, perpetual, transferable, worldwide license, with the right to grant and authorize sublicenses, to make, have made, modify, use, import, offer for sale, sell, reproduce, distribute, modify, adapt, prepare derivative works of, display, perform, and otherwise exploit such Prior Invention without restriction, including, without limitation, as part of or in connection with such product, process, service, technology, or other work, and to practice any method related thereto.
| 12 |
3. Conflicting Employment.
A. Current Obligations. I agree that during the term of my employment with the Company, I will not engage in or undertake any other employment, occupation, consulting relationship, or commitment that is directly related to the business in which the Company is now involved or becomes involved or has plans to become involved, nor will I engage in any other activities that conflict with my obligations to the Company.
4. Returning Company Documents. Upon separation from employment with the Company or on demand by the Company during my employment, I will immediately deliver to the Company, and will not keep in my possession, recreate, or deliver to anyone else, any and all Company property, including, but not limited to, Company Confidential Information, Associated Third Party Confidential Information, as well as all devices and equipment belonging to the Company (including computers, handheld electronic devices, telephone equipment, and other electronic devices), Company credit cards, records, data, notes, notebooks, reports, files, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, photographs, charts, any other documents and property, and reproductions of any and all of the aforementioned items that were developed by me pursuant to my employment with the Company, obtained by me in connection with my employment with the Company, or otherwise belonging to the Company, its successors, or assigns, including, without limitation, those records maintained pursuant to Section 3.D. I also consent to an exit interview to confirm my compliance with this Section 5.
5. Notification of New Employer. In the event that I leave the employ of the Company, I hereby grant consent to notification by the Company to my new employer about my obligations under this Agreement.
6. Solicitation of Employees. I agree that for a period of twenty-four (24) months immediately following the termination of my relationship with the Company for any reason, whether voluntary or involuntary, with or without cause, I shall not either directly or indirectly solicit any of the Company’s employees to leave their employment, or attempt to solicit employees of the Company, either for myself or for any other person or entity. I agree that nothing in this Section 8 shall affect my continuing obligations under this Agreement during and after this twenty-four (24) month period, including, without limitation, my obligations under Section 2A.
7. Conflict of Interest Guidelines. I agree to diligently adhere to all policies of the Company, including the Company’s insider’s trading policies and the Company’s Conflict of Interest Guidelines. A copy of the Company’s current Conflict of Interest Guidelines is attached as Schedule 3 hereto, but I understand that these Conflict of Interest Guidelines may be revised from time to time during my employment.
8. Representations. I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence information acquired by me in confidence or in trust prior to my employment by the Company. I hereby represent and warrant that I have not entered into, and I will not enter into, any oral or written agreement in conflict herewith.
9. Audit. I acknowledge that I have no reasonable expectation of privacy in any computer, technology system, email, handheld device, telephone, or documents that are used to conduct the business of the Company. As such, the Company has the right to audit and search all such items and systems, without further notice to me, to ensure that the Company is licensed to use the software on the Company’s devices in compliance with the Company’s software licensing policies, to ensure compliance with the Company’s policies, and for any other business-related purposes in the Company’s sole discretion. I understand that I am not permitted to add any unlicensed, unauthorized, or non-compliant applications to the Company’s technology systems, including, without limitation, open source or free software not authorized by the Company, and that I shall refrain from copying unlicensed software onto the Company’s technology systems or using non- licensed software or websites. I understand that it is my responsibility to comply with the Company’s policies governing use of the Company’s documents and the internet, email, telephone, and technology systems to which I will have access in connection with my employment.
| 13 |
10. Arbitration and Equitable Relief.
A. Arbitration. IN CONSIDERATION OF MY EMPLOYMENT WITH THE COMPANY, ITS PROMISE TO ARBITRATE ALL EMPLOYMENT-RELATED DISPUTES, AND MY RECEIPT OF THE COMPENSATION, PAY RAISES, AND OTHER BENEFITS PAID TO ME BY THE COMPANY, AT PRESENT AND IN THE FUTURE, I AGREE THAT ANY AND ALL CONTROVERSIES, CLAIMS, OR DISPUTES WITH ANYONE (INCLUDING THE COMPANY AND ANY EMPLOYEE, OFFICER, DIRECTOR, SHAREHOLDER, OR BENEFIT PLAN OF THE COMPANY, IN THEIR CAPACITY AS SUCH OR OTHERWISE), WHETHER BROUGHT ON AN INDIVIDUAL, GROUP, OR CLASS BASIS, ARISING OUT OF, RELATING TO, OR RESULTING FROM MY EMPLOYMENT WITH THE COMPANY OR THE TERMINATION OF MY EMPLOYMENT WITH THE COMPANY, INCLUDING ANY BREACH OF THIS AGREEMENT, SHALL BE SUBJECT TO BINDING ARBITRATION UNDER THE ARBITRATION RULES SET FORTH IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1280 THROUGH 1294.4, INCLUDING SECTION 1281.8 (THE “ACT”), AND PURSUANT TO CALIFORNIA LAW. THE FEDERAL ARBITRATION ACT SHALL CONTINUE TO APPLY WITH FULL FORCE AND EFFECT NOTWITHSTANDING THE APPLICATION OF PROCEDURAL RULES SET FORTH IN THE ACT. DISPUTES THAT I AGREE TO ARBITRATE, AND THEREBY AGREE TO WAIVE ANY RIGHT TO A TRIAL BY JURY, INCLUDE ANY STATUTORY CLAIMS UNDER LOCAL, STATE, OR FEDERAL LAW, INCLUDING, BUT NOT LIMITED TO, CLAIMS UNDER TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE OLDER WORKERS BENEFIT PROTECTION ACT, THE SARBANES-OXLEY ACT, THE WORKER ADJUSTMENT AND RETRAINING NOTIFICATION ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, THE FAMILY AND MEDICAL LEAVE ACT, THE CALIFORNIA FAMILY RIGHTS ACT, THE CALIFORNIA LABOR CODE, CLAIMS OF HARASSMENT, DISCRIMINATION, AND WRONGFUL TERMINATION, AND ANY STATUTORY OR COMMON LAW CLAIMS. I FURTHER UNDERSTAND THAT THIS AGREEMENT TO ARBITRATE ALSO APPLIES TO ANY DISPUTES THAT THE COMPANY MAY HAVE WITH ME.
| 14 |
11. General Provisions.
A. Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of California without giving effect to any choice-of-law rules or principles that may result in the application of the laws of any jurisdiction other than California. To the extent that any lawsuit is permitted under this Agreement, I hereby expressly consent to the personal and exclusive jurisdiction and venue of the state and federal courts located in Santa Clara County, California for any lawsuit filed against me by the Company.
[Signature Page Follows]
| 15 |
IN WITNESS WHEREOF, the Company, the Employer and Executive have executed this Agreement as of the date first above written.
NextNav Inc.
|
Dated: 5/5/2024 |
By: | /s/Mariam Sorond | ||
| Name: | Mariam Sorond | |||
| Title: | CEO |
| Dated: 5/5/2024 | By: | /s/Sanyogita Shamsunder | ||
| Name: | Sanyogita Shamsunder |
| 16 |
SCHEDULE 1
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP
| 17 |
SCHEDULE 2
CALIFORNIA LABOR CODE SECTION 2870 INVENTION ON OWN TIME- EXEMPTION FROM AGREEMENT
| 18 |
SCHEDULE 3
NEXTNAV INC.
CONFLICT OF INTERESTS GUIDELINES
| 19 |
Exhibit 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Mariam Sorond, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of NextNav Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ Mariam Sorond | |
| Name: Mariam Sorond | |
| Title: President and Chief Executive Officer (Principal Executive Officer) |
Date: August 7, 2024
Exhibit 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Christian D. Gates, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of NextNav Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ Christian D. Gates | |
| Name: Christian D. Gates | |
| Title: Chief Financial Officer (Principal Financial Officer) |
Date: August 7, 2024
Exhibit 32.1
Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of NextNav Inc. (the “Company”) for the period ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned each hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of their knowledge, on the date hereof:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: August 7, 2024 | ||
| /s/ Mariam Sorond | ||
| Name: | Mariam Sorond | |
| Title: | President and Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Dated: August 7, 2024 | ||
| /s/ Christian D. Gates | ||
| Name: | Christian D. Gates | |
| Title: | Chief Financial Officer | |
| (Principal Financial Officer) | ||
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parentheticals) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Property and equipment, accumulated depreciation | $ 11,718 | $ 9,724 |
| Common stock, shares authorized | 500,000,000 | 500,000,000 |
| Common stock, shares issued | 124,049,855 | 111,261,434 |
| Common stock, shares outstanding | 123,917,627 | 111,132,222 |
| Common stock, in treasury | 132,228 | 129,212 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Statement of Comprehensive Income [Abstract] | ||||
| Revenue | $ 1,105 | $ 800 | $ 2,151 | $ 1,630 |
| Operating expenses: | ||||
| Cost of goods sold (exclusive of depreciation and amortization) | 2,924 | 3,142 | 5,685 | 6,165 |
| Research and development | 4,110 | 4,994 | 8,780 | 9,572 |
| Selling, general and administrative | 8,108 | 6,516 | 16,554 | 12,570 |
| Depreciation and amortization | 1,295 | 1,178 | 2,613 | 2,303 |
| Total operating expenses | 16,437 | 15,830 | 33,632 | 30,610 |
| Operating loss | (15,332) | (15,030) | (31,481) | (28,980) |
| Other income (expense): | ||||
| Interest income (expense) | (2,320) | (343) | (4,489) | 126 |
| Change in fair value of warrants | (8,490) | (263) | (21,666) | (3,063) |
| Other income (loss), net | 1,820 | 14 | 1,748 | (67) |
| Loss before income taxes | (24,322) | (15,622) | (55,888) | (31,984) |
| Provision for income taxes | (68) | (148) | (112) | (135) |
| Net loss | (24,390) | (15,770) | (56,000) | (32,119) |
| Foreign currency translation adjustment | (179) | 20 | (701) | 452 |
| Comprehensive loss | (24,569) | (15,750) | (56,701) | (31,667) |
| Net loss | (24,390) | (15,770) | (56,000) | (32,119) |
| Net loss attributable to common stockholders | $ (24,390) | $ (15,770) | $ (56,000) | $ (32,119) |
| Weighted average of shares outstanding – basic (in shares) | 115,210 | 106,749 | 119,359 | 106,951 |
| Weighted average of shares outstanding – diluted (in shares) | 115,210 | 106,749 | 119,359 | 106,951 |
| Net loss attributable to common stockholders per share - basic (in dollars per share) | $ (0.21) | $ (0.15) | $ (0.47) | $ (0.3) |
| Net loss attributable to common stockholders per share - diluted (in dollars per share) | $ (0.21) | $ (0.15) | $ (0.47) | $ (0.3) |
Organization and Business |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Organization and Business | |
| Organization and Business |
1. Organization and Business
Principal Business
NextNav Inc. and its consolidated subsidiaries (collectively “NextNav” or the “Company”) deliver next generation positioning, navigation and timing (“PNT”) solutions designed to enable a high-quality, terrestrial complement and backup to the U.S. Global Positioning System (“GPS”). NextNav’s solutions are built on a robust asset platform, including 8MHz of nearly nationwide wireless spectrum in the Lower 900MHz band, intellectual property and deployed network systems. The Company, subject to appropriate regulatory approvals, has signed an agreement to acquire licenses for an additional 4MHz of spectrum in the Lower 900MHz band. Additionally, on April 16, 2024, NextNav filed a petition for rulemaking with the Federal Communications Commission (“FCC”) to update the Lower 900MHz band plan to utilize a 15MHz nationwide configuration for both PNT and 5G broadband. The Company’s Pinnacle system provides “floor-level” altitude service to any device with a barometric pressure sensor, including most off-the-shelf smartphones. The Company’s TerraPoiNT and NextGen systems are designed to overcome the limitations inherent in the space-based systems through a network of wide area terrestrial location transmitters that broadcast a PNT signal over the Company’s licensed spectrum, with NextGen intended to utilize standards-based 5G broadband technologies.
Since its inception, NextNav has incurred recurring
losses and generated negative cash flows from operations and has primarily
relied upon debt and equity financings to fund its cash requirements. During the six months ended June 30, 2024 and 2023, the Company incurred net losses of $56.0 million and $32.1 million, respectively. During the six months ended June 30, 2024 and 2023, net cash used in operating activities was $19.3 million and $15.9 million, respectively. As of June 30, 2024, cash and cash equivalents and marketable securities was $86.3 million. The Company’s primary use of cash is to fund
operations as NextNav continues to grow. The Company expects to incur
additional losses and higher operating expenses for the foreseeable future,
specifically as NextNav invests in ongoing research and development and its PNT networks. Managing liquidity and the Company’s cash position is a priority of the Company. The Company continually works to optimize its expenses in light of the growth of its business and adapt to changes in the economic environment. The Company believes that its cash and cash equivalents and marketable securities as of June 30, 2024 will be sufficient to meet its working capital and capital expenditure needs, including all contractual commitments, beyond the next 12 months from the filing of this Quarterly Report on Form 10-Q. The Company believes it will meet longer term expected future cash requirements and obligations through a combination of its existing cash and cash equivalents balances and marketable securities, cash flows from operations, and issuance of equity securities or debt offerings. However, this determination is based upon internal financial projections and is subject to changes in market and business conditions. |
Summary of Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies |
2. Summary of Significant Accounting Policies
Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in these condensed consolidated financial statements.
Unaudited Interim Financial Information
The condensed consolidated financial statements as of June 30, 2024 are unaudited. These interim financial statements of NextNav have been prepared in accordance with U.S. General Accepted Accounting Principles (“GAAP”) and SEC instructions for interim financial information and should be read in conjunction with NextNav’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), which the Company filed with the SEC on March 13, 2024.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in management’s opinion, all adjustments of a normal, recurring nature that are necessary for the fair statement of the Company’s financial position as of June 30, 2024, results of operations for the three and six months ended June 30, 2024 and 2023, and changes in stockholders’ equity and cash flows for the six months ended June 30, 2024 and 2023, but are not necessarily indicative of the results expected for the full fiscal year or any other period.
There have been no changes to the Company’s significant accounting policies described in the 2023 Form 10-K that have had a material impact on these condensed consolidated financial statements and related notes. Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period and accompanying notes. These estimates include those related to the useful lives and recoverability of long-lived and intangible assets, valuation of common stock warrants, income taxes and equity-based compensation, among others. NextNav bases estimates on historical experience, anticipated results and various other assumptions, including assumptions of future events, it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities, equity, revenue and expenses, that are not readily apparent from other sources. Actual results and outcomes could differ materially from these estimates and assumptions. Cash and Cash Equivalents and Marketable Securities
Cash and cash equivalents include all cash in banks and highly liquid investments with an original maturity of three months or less when purchased. The combined account balances held on deposit at each institution typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company seeks to reduce this risk by maintaining such deposits with high quality financial institutions that management believes are creditworthy. Further, the Company seeks to minimize its exposure to banking risk by limiting the amount of uninsured deposits and investing its excess cash in U.S. government and government agency bonds, and money market funds.
The Company invests excess cash primarily in U.S. treasury bills, U.S. government and government agency bonds, and money market funds. The Company classifies all marketable securities that have stated maturities of three months or less from the date of purchase as cash equivalents, and those that have stated maturities of over three months as short-term investments on the Condensed Consolidated Balance Sheets. The Company determines the appropriate classification of investments in marketable securities at the time of purchase and reevaluates such designation at each balance sheet date. Marketable securities that are held for resale are classified as "trading securities" and are measured at fair value with the related gains and losses, including unrealized, recognized in interest income (expense). Marketable securities not classified as held to maturity or as trading securities are classified as "available-for-sale securities" and the fair value option (“FVO”) was elected, for which related gains and losses, including unrealized gains and losses and interest, are recognized in interest income (expense). The FVO election allows the Company to account for the marketable securities at fair value, which is consistent with the manner in which the instruments are managed. For the six months ended June 30, 2024, the Company recorded $439 thousand of gains from fair value changes from FVO available-for-sale debt securities in interest income (expense) in the Condensed Consolidated Statements of Comprehensive Loss. There were no debt securities classified as available-for-sale in 2023. Revenue
The following table presents the Company’s revenue disaggregated by category and source:
Contract Balances
Accounts receivable are billed and unbilled amounts related to the Company’s rights to consideration as performance obligations are satisfied when the rights to payment become unconditional but for the passage of time. As of June 30, 2024 and December 31, 2023, the Company’s accounts receivable balances were comprised of $2.2 million and $2.3 million, respectively. The Company estimates losses on accounts receivable based on expected losses, including its historical experience of actual losses. Receivables are considered impaired and written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement. As of June 30, 2024 and December 31, 2023, all accounts receivable balances were current and no allowances for doubtful accounts were recorded.
Contract liabilities relate to amounts billed in advance, or advance consideration received from customers, for which transfer of control of the good or service occurs at a later point in time. As of June 30, 2024 and December 31, 2023, the Company’s contract liabilities were $215 thousand and $297 thousand, respectively, and are recorded in deferred revenue in the Condensed Consolidated Balance Sheets.
Equity-Based Compensation
Measurement of equity-based compensation with employees is based on the estimated grant date fair value of the equity instruments issued. The fair value of stock options is determined using the Black-Scholes option pricing model. The fair value of restricted awards is based on the closing price of NextNav’s common stock on the date of grant. NextNav recognizes equity-based compensation on a straight-line basis over the requisite service period of the grant, which is generally equal to the vesting period. NextNav accounts for forfeitures as they occur.
The following details the amount of stock-based compensation included in cost of goods sold, research and development, and selling, general and administrative expenses:
Basic and Diluted Net Loss per Share
Basic loss per share (“EPS”) excludes dilution for common share equivalents and is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding during each period, adjusted for the effect of dilutive common share equivalents.
Restricted shares are included in the computation of basic EPS as they vest and are included in diluted EPS, to the extent they are dilutive, determined using the treasury stock method. Outstanding options and warrants are included in the computation of diluted EPS, to the extent they are dilutive, determined using the treasury stock method.
The determination of the diluted weighted average shares is included in the following calculation of EPS:
The following details anti-dilutive unvested restricted stock units and unvested restricted stock awards, as well as the anti-dilutive effects of the outstanding warrants and stock options:
Equity Method Investment The Company applies the equity method of accounting to investments when it has significant influence, but not controlling interest, in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The initial carrying value of equity method investment is based on the amount paid to purchase the interest in the investee entity. Subsequently, the investment is increased or decreased by the Company’s proportionate share in the investee’s earnings or losses and decreased by cash distributions from the investee. The Company eliminates from its financial results all significant intercompany transactions to the extent of its ownership interest, including the intercompany portion of transactions with equity method investee. The Company’s share of the investee’s income or loss is recorded on a one quarter lag. The Company evaluates equity method investment for impairment based upon a comparison of the fair value of the equity method investment to its carrying value, when impairment indicators exist. If the Company determines a decline in the fair value of an equity method investment below its carrying value is other-than-temporary, an impairment is recorded. Leases
NextNav leases office spaces under non-cancellable leases as well as site leases for towers and shelters under operating leases related to its network. Site leases are entered into throughout the United States under which NextNav receives the rights to install equipment used to transmit its services over its licensed spectrum. The Company, at the inception of the contract, determines whether a contract is or contains a lease based on assessment of the terms and conditions of the contract. The Company classifies leases with contractual terms longer than twelve months as either operating or finance. The Company has elected not to recognize lease assets and liabilities for its short-term leases, which are defined as leases with an initial term of twelve months or less.
The Company’s leases may include options to extend or terminate the lease. The option to renew may be automatic, at the option of NextNav or mutually agreed to between the landlord and NextNav. Lease terms include the non-cancellable term and periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
The Company’s lease agreements generally contain lease and non-lease components. Payments under the lease arrangements are primarily fixed. Non-lease components primarily include payments for utilities and maintenance. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component which increases the amount of the Company’s lease assets and liabilities. Certain lease agreements contain variable payments, which are expensed as incurred and not included in the lease assets and liabilities. These amounts include payments for common area maintenance.
Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate, because the interest rate implicit in the Company’s leases is not readily determinable. The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. Lease assets are reduced by landlord incentives, plus any direct costs from executing the leases or lease prepayments reclassified from “Other current assets” upon lease commencement. Operating lease expense is recognized on a straight-line basis over the lease term. Monthly rent expense includes any site related utility payments or other fees such as administrative or up-front fees contained in the lease agreements that are determinable upon execution of the lease agreement.
Acquired finite-lived intangible assets
Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company operates as one reporting unit. When testing goodwill for impairment, the Company may first perform an optional qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. No goodwill impairment was recorded for the three and six months ended June 30, 2024 and for the year ended December 31, 2023. The following summarizes the Company's goodwill activities:
Acquisitions
The Company accounts for its acquisitions using the acquisition method of accounting. The purchase price is attributed to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired are included in the Company’s consolidated financial statements from the date of acquisition.
When the Company issues stock-based or cash awards to an acquired company’s shareholders, the Company evaluates whether the awards are consideration or compensation for post-acquisition services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the acquired company’s stockholders beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-acquisition services and recognized as expense over the requisite service period. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions, and competition. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions, tax-related valuation allowances and pre-acquisition contingencies are initially recorded as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Company’s consolidated statement of operations. In connection with the determination of fair values, the Company may engage a third-party valuation specialist to assist with the valuation of intangible and certain tangible assets acquired and certain assumed obligations. Long term debt
In conjunction with the issuance of senior secured notes in May and July of 2023, the Company issued warrants to the lenders. The Company allocated the proceeds from its debt issuance to long term debt and equity classified warrants based on relative fair value as determined by the Discounted Cash Flow approach and Monte Carlo simulation model, respectively. The portion of proceeds allocated to equity-classified warrants and direct debt issuance costs are classified as debt discounts. The carrying value of long term debt in the Company’s condensed consolidated balance sheet consists of principal amount of debt, net of debt discounts. Debt discounts are amortized to interest expense based on the related debt agreements primarily using the effective interest method. Non-controlling Interests
The non-controlling interest in the Company’s condensed consolidated financial statements represents the warrants for Nestwave, SAS (as subsequently renamed, “NextNav France”) shares that were owned by the selling shareholders of NextNav France. Holders of the warrants do not have the right to income or obligation to losses, and the Company did not attribute any net loss to the non-controlling interests for the three and six months ended June 30, 2024 and 2023. During the three and six months ended June 30, 2024, 399,636 warrants for NextNav France shares were exercised and 397,037 shares of the Company's common stock were issued, resulting in redemption of non-controlling interests of $1.4 million. As of June 30, 2024, there were no warrants outstanding for NextNav France shares. Foreign Currency Translation The functional currency of NextNav’s foreign subsidiaries is generally the local currency. Assets and liabilities are translated into U.S. dollars at the exchange rate in effect at the Condensed Consolidated Balance Sheet date. Operating accounts are translated at an average rate of exchange for the respective accounting periods. Translation adjustments resulting from the process of translating foreign currency financial statements into U.S. dollars are reported as a component of accumulated other comprehensive loss. Transaction gains and losses reflected in the functional currencies are charged to income or expense at the time of the transaction.
Net transaction gains (losses) from foreign currency contracts recorded in the Condensed Consolidated Statements of Comprehensive Loss were immaterial for the three and six months ended June 30, 2024 and 2023. The only component of other comprehensive loss is currency translation adjustments for all periods presented. No income tax expense was allocated to the currency translation adjustments. Recent Accounting Developments Not Yet Adopted During the fourth quarter of 2023, the Financial Accounting Standards Board issued two Accounting Standards Updates (“ASUs”) that require additional disclosures related to reportable segments under ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) and income taxes under ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-07 is effective for the Company's annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. It requires the Company to disclose information about significant expenses on an interim and annual basis for each reportable segment. ASU 2023-09 is effective for the Company's annual periods beginning January 1, 2026 with early adoption permitted, and requires the Company to disclose additional information on the rate reconciliation and income taxes paid. The Company is currently evaluating the potential effect that the updated standards will have on the financial statement disclosures. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued Expenses and Other Current Liabilities |
3. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following:
(1) Refer to Note 5 to our condensed consolidated financial statements for the three and six months ended June 30, 2024 included elsewhere in this Quarterly Report on Form 10-Q for more information. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangibles |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangibles |
4. Intangibles Intangible assets as of June 30, 2024 and December 31, 2023 consisted of following (in thousands):
The weighted average remaining useful lives of acquired software and acquired technology were 10.3 years as of June 30, 2024. Amortization expense on intangibles assets was $0.3 million for each of the three months ended June 30, 2024 and 2023. Amortization expense on intangibles assets was $0.6 million for each of the six months ended June 30, 2024 and 2023. Future amortization is expected as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Purchase Agreement |
6 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||
| Asset Purchase Agreement | ||||||||||
| Asset Purchase Agreement |
5. Asset Purchase Agreement On March 7, 2024, the Company and its wholly-owned subsidiary Progeny LMS, LLC entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Telesaurus Holdings GB and Skybridge Spectrum Foundation to acquire (1) certain Multilateration Location and Monitoring Service licenses (the “M-LMS Licenses”) issued by FCC and (2) rights to a petition for reconsideration, dated December 20, 2017, which, if granted, may reinstate additional M-LMS Licenses owned by the sellers and terminated by the FCC in 2017 (the "Transaction"). The closing (“Closing”) of the Transaction is subject to customary conditions as well as the approval of the Superior Court of the State of California, County of Alameda (“Alameda Court Approval”) and approval of the FCC of the application seeking the transfer and assignment of the M-LMS Licenses to the Company by final order (“FCC Approval”) and will occur upon the assignment of the M-LMS Licenses following the FCC Approval. The consideration for the Transaction is payable as follows:
The Company subsequently received the Alameda Court Approval on March 28, 2024 and accrued the $2.5 million cash consideration as a current liability (within accrued expenses and other current liabilities in the condensed consolidated balance sheet as of March 31,2024) and prepaid asset (within other current assets in the condensed consolidated balance sheet as of March 31, 2024). In April 2024, the Company paid $2.5 million in cash to settle this liability. Further, the Company recorded an additional current liability and prepaid asset of $9.8 million as of March 31 2024, with respect to the fair value of shares expected to be issued (based on a volume weighted average price) equivalent to the $7.5 million First Noncash Consideration, as the payment obligation is upon passage of time and is not contingent. During the three and six months ended June 30, 2024, the Company reduced the First Noncash Consideration liability by $1.9 million and recorded the gain in other income (expenses). The reduction was due to the fair value adjustment of shares expected to be issued, based on a volume-weighted average price, equivalent to the $7.5 million First Noncash Consideration. The fair value of the shares expected to be issued was determined based on non-observable pricing inputs in the market and is categorized accordingly as Level 3 in the fair value hierarchy. The Company accrues a loss contingency liability related to the nonrefundable prepayments if it is probable that the Transaction will be terminated or cancelled. As of June 30, 2024, management expects the Transaction to successfully complete, and no loss contingency liability was recorded.
The Asset Purchase Agreement provides for contingent consideration in the amount of $20 million, payable in shares of NextNav common stock. Payment is contingent upon the FCC granting additional flexibility in the use of M-LMS spectrum. |
Equity Method Investment |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Equity Method Investments and Joint Ventures [Abstract] | |
| Equity Method Investment |
6. Equity Method Investment
As of June 30, 2024, the Company’s total ownership of MetCom Inc., a privately-owned Japanese joint stock company (kabushiki kaisha) (“MetCom”), consisted of 702,334 shares representing ownership of 14.8%. The Company provides licenses to its technology, infrastructure and subscriber equipment to MetCom to support MetCom’s efforts in commercializing terrestrial positioning technology (both TerraPoiNT and Pinnacle) in Japan. Due to the technological dependencies, the Company’s equity ownership and representation on MetCom’s board of directors, the Company has significant influence, but not controlling interest, over MetCom. The Company’s investment in MetCom is accounted for under the equity method. The basis difference in the Company’s cost basis and the basis reflected at the investee entity level is allocated to equity method goodwill and is not amortized. The Company recognized a loss of $41 thousand and $31 thousand in the three months ended June 30, 2024 and June 30, 2023, respectively, that is recorded in other income (expenses). The Company recognized a loss of $81 thousand and $86 thousand in the six months ended June 30, 2024 and June 30, 2023, respectively. The carrying value of the Company’s investment in MetCom was $623 thousand and $705 thousand as of June 30, 2024 and December 31, 2023, respectively, and is classified in other long-term assets. The Company had $13 thousand and $107 thousand in accounts receivable from MetCom as of June 30, 2024 and December 31, 2023, respectively.
The Company holds a warrant (the “MetCom Warrant”) issued by MetCom which entitles the Company to purchase additional shares at an exercise price of JPY10 per share, such that the Company may obtain an aggregate total of 33% of MetCom common stock on an “as-converted” basis. The MetCom Warrant is subject to certain vesting conditions which were not met as of June 30, 2024; therefore, the MetCom Warrant was not exercisable. |
Fair Value |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value |
7. Fair Value
NextNav uses observable and unobservable inputs to determine the value of its assets and liabilities recorded at fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. The three-tier hierarchy for inputs used to measure fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, where applicable, is as follows:
- Level 1 — Quoted prices in active markets for identical assets or liabilities
- Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities
- Level 3 — No observable pricing inputs in the market
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. NextNav’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. NextNav effectuates transfers between levels of the fair value hierarchy, if any, as of the date of the actual circumstance that caused the transfer.
The following table presents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis:
The carrying values of cash and cash equivalents, accounts payable, accrued expenses, amounts included in other current assets, and current liabilities that meet the definition of a financial instrument, approximate fair value due to their short-term nature. Assets, liabilities, and equity instruments that are measured at fair value on a nonrecurring basis include fixed assets and intangible assets. The Company recognizes these items at fair value when they are considered to be impaired or upon initial recognition. The fair value of these assets and liabilities are determined with valuation techniques using the best information available and may include quoted market prices, market comparables and discounted cash flow models.
Level 3 Liabilities
The Company engaged a third-party valuation firm to assist with the fair value analysis of the Private Placement Warrants (as defined below). The analysis used commonly accepted valuation methodologies and best practices to determine the fair value of the equity, in accordance with fair value standards and U.S. GAAP. For the Private Placement Warrants that were outstanding as of June 30, 2024 and December 31, 2023, NextNav used a Monte Carlo simulation model. The following table shows the assumptions used in each respective model:
The following table shows the assumption used in valuing the First Noncash consideration of asset purchase agreement liability to be settled in shares, equivalent to $7.5 million:
The tables below provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3).
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long term debt, net |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Long term debt, net | |
| Long term debt, net |
8. Long term debt, net
On May 9, 2023 (the “Initial Closing”), pursuant to the terms of the Note Purchase Agreement (the “NPA”) and Indenture Agreement (the “Indenture”), the Company issued $50.0 million in aggregate principal amount of senior secured notes (the “Original Notes”) with a fixed interest rate of 10% to a group of lenders (the “Lenders”) including Whitebox Advisors LLC, Susquehanna International Group, and Clutterbuck Capital Management. The Notes will mature on December 1, 2026 with interest payable semi-annually in arrears on June 1 and December 1 of each year. The Company may elect, in its sole discretion, to pay up to 50% of the accrued and unpaid interest on the Notes (as defined below) due with its common stock.
Under the NPA, the Lenders had the right, but not the obligation, to purchase additional Notes (the “Additional Notes” and, together with the Original Notes, the “Notes”), on a pro rata basis, in an aggregate principal amount of $20.0 million, to be exercisable within 30 days of the Initial Closing. Subsequent to the Initial Closing, on June 8, 2023, the note purchasers elected to purchase such Additional Notes in an aggregate principal amount of $20.0 million in senior secured notes due 2026. The Additional Notes were issued on July 6, 2023. The terms and conditions of the Additional Notes are the same as the Original Notes. In conjunction with the issuance of Original Notes, the Company issued 18,518,520 warrants (the “Initial Warrants”) at an exercise price of $2.16 per share and with the issuance of the Additional Notes on July 6, 2023, the Company issued 7,407,407 warrants (the “Additional Warrants,” and, together with the Initial Warrants, the “Debt Warrants”) at an exercise price of $2.16 per share to purchase Company’s common stock to the Lenders. The Company has the right to redeem for cash the applicable pro rata portion of any Debt Warrant on each of May 1, 2025, September 1, 2025 and December 1, 2025, in each case, at a redemption price of $0.01 per share of underlying common stock, where there exists both a Funding Shortfall (as defined in the Debt Warrants) and the market price of the underlying common stock, calculated in accordance with the provisions of the Debt Warrants, exceeds 130% of the exercise price of the Debt Warrants. The fair value of the Initial Warrants and the Additional Warrants was $14.6 million and $8.2 million, respectively, on the respective issuance date and was classified as debt discount. The fair value was determined based on no observable pricing inputs in the market and is categorized accordingly as Level 3 in the fair value hierarchy. The Company agreed to file a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), registering the resale of the Debt Warrants and the shares of common stock underlying the Debt Warrants within 35 business days of the Initial Closing. The Company filed such registration statement with the SEC on June 23, 2023, which the SEC declared effective on June 29, 2023.
The carrying value of the Notes was $51.4 million as of June 30, 2024 net of debt discount of $18.6 million. Net amortization of the debt discount totaled $1.5 million and $3.0 million for the three and six months ended June 30, 2024, respectively. Net amortization of the debt discount totaled $0.5 million for the three and six months ended June 30, 2023. The total estimated fair value of the Notes approximates the carrying value of the Notes as of June 30, 2024. The fair value was determined based on no observable pricing inputs in the market and is categorized accordingly as Level 3 in the fair value hierarchy. Additional Interests
The Notes are subject to additional interest of up to 0.50% per annum if (i) the Company fails to timely make certain required filings with the SEC, until such filings are made, or (ii) the Notes are not otherwise freely tradeable under Rule 144 under the Securities Act.
Redemption and Early Repayment
The Company may redeem the Notes, in whole or in part, at any time on or after May 9, 2024 (the one year anniversary of the Initial Closing) at a redemption price equal to 101% of the principal amount of the Notes, plus any accrued and unpaid interest.
In the event of certain non-ordinary course asset sales, including sales of certain intellectual property or spectrum licensed by the FCC to the Company or its subsidiaries, the Company must make a mandatory repurchase offer for a portion of the Notes outstanding with the proceeds of such sale, at a price equal to 100% of the aggregate principal amount of the Notes with accrued and unpaid interest, subject to certain thresholds and limitations set forth in the Indenture.
In the event of a change of control, each holder has the right, at such holder’s option and subject to the limitations set forth in the Indenture, to require the Company to repurchase for cash all or any portion of such holder’s Notes at a price equal to 101% of the aggregate principal amount with accrued and unpaid interest.
Debt Covenant Compliance
The Notes are guaranteed on a first lien senior secured basis by NextNav’s domestic subsidiaries and secured by substantially all of the assets of the Company and its domestic subsidiaries.
The Indenture contains customary covenants limiting the ability of the Company and its subsidiaries to incur or guarantee additional indebtedness; pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; and merge or consolidate or sell all or substantially all of its assets. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. The Indenture also contains customary events of default. Failure to comply with such covenants could result in an acceleration of the maturity of indebtedness outstanding and additional interest of up to 2.00% per annum under the Indenture.
As of June 30, 2024, the Company was in compliance with all of the applicable debt covenants described above. |
Warrants and Warrant Liability |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Warrants And Warrants Liability [Abstract] | |
| Warrants and Warrant Liability |
9. Warrants and Warrant Liability
As of June 30, 2024, NextNav had 34,528,756 warrants outstanding, which includes: (a) 13,250,476 public warrants associated with Spartacus Acquisition Corp.’s (“Spartacus”) initial public offering (the “Public Warrants”), (b) 5,499,514 warrants issued to Spartacus in a private placement on the initial public offering closing date (the “Private Placement Warrants”) and (c) 15,778,766 warrants issued in connection with the Notes (the Debt Warrants, as further described in Note 8). The Private Placement Warrants are classified as a liability on the Company’s Condensed Consolidated Balance Sheet as of June 30, 2024. During the three and six months ended June 30, 2024, 1,305,580 and 2,251,016 Private Placement Warrants were reclassified from liability to equity (Public Warrants), respectively. The terms included in the Private Warrants that initially precluded equity classification were no longer applicable. Accordingly, NextNav reclassified $4.3 million and $6.8 million from warrant liability to additional paid-in capital during the three and six months ended June 30, 2024, respectively. Holders of the Public Warrants, Private Placement Warrants and Debt Warrants are entitled to acquire shares of common stock of NextNav. With respect to the Public Warrants and Private Placement Warrants, each whole warrant entitles the registered holder to purchase one share at an exercise price of $11.50 per share. The Public Warrants and Private Placement Warrants expire on October 28, 2026. With respect to the Debt Warrants, each warrant entitles the registered holder to purchase one share at an exercise price of $2.16 per share. The Debt Warrants expire on June 1, 2027. During the six months ended June 30, 2024, 9,738,930 Debt Warrants were exercised for an aggregate of $21.0 million in cash. NextNav has the right to redeem the outstanding Public Warrants in whole and not in part at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sales price of the Company’s common stock matched or exceeded $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which NextNav sends the notice of redemption to the warrant holders. The Private Placement Warrants are identical in all respects to the Public Warrants except that, so long as they are held by the current holder or its permitted transferees: (i) they will not be redeemable by NextNav; (ii) they may be exercised by the holders on a cashless basis; and (iii) they are subject to registration rights. The Company has the right to redeem for cash the applicable pro rata portion of any Debt Warrant on each of May 1, 2025, September 1, 2025 and December 1, 2025, in each case, at a redemption price of $0.01 per share of underlying common stock, where there exists both a Funding Shortfall (as defined in the Debt Warrant) and the market price of the underlying common stock, calculated in accordance with the provisions of the Debt Warrants, exceeds 130% of the exercise price of the Debt Warrants. The fair value of the Debt Warrants was $22.8 million on the issuance date and was classified as debt discount. The fair value was determined based on no observable pricing inputs in the market and is categorized accordingly as Level 3 in the fair value hierarchy. The Company agreed to file a registration statement under the Securities Act, registering the resale of the Debt Warrants and the shares of common stock underlying the Debt Warrants within 35 business days of the Initial Closing. The Company filed such registration statement with the SEC on June 23, 2023, which the SEC declared effective on June 29, 2023. |
Common Stock |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Stockholders' Equity Note [Abstract] | |
| Common Stock |
10. Common Stock
As of June 30, 2024, NextNav had authorized the issuance of 600,000,000 shares of capital stock, par value, 0.0001 per share, consisting of (a) 500,000,000 shares of common stock and (b) 100,000,000 shares of undesignated preferred stock. As of June 30, 2024, NextNav had 124,049,855 shares of common stock issued and 123,917,627 shares of common stock outstanding. The Company has no preferred stock issued or outstanding as of June 30, 2024. |
Commitments and Contingencies |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Commitments and Contingencies | |
| Commitments and Contingencies |
11. Commitments and Contingencies
Litigation and Legal Matters From time to time, the Company is party to litigation and other legal matters incidental to the conduct of its business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of June 30, 2024, the Company was not involved in any such matters, individually or in the aggregate, which management believes would have a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows. |
Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Income Taxes | |
| Income Taxes |
12. Income Taxes
The Company computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period. A valuation allowance has been established against the Company’s U.S. federal and state deferred tax assets, which results in an annualized effective tax rate for the Company’s U.S. operations of 0.0%. During the three months ended June 30, 2023, a valuation allowance was established against the Company’s French deferred tax asset. For the three months ended June 30, 2024, the Company recorded an income tax provision of $68 thousand related to foreign tax activity in India on a pretax loss of $24.3 million, resulting in an effective tax rate of (0.28)%. For the three months ended June 30, 2023, the Company recorded an income tax benefit of $148 thousand related to foreign tax activity on a pretax loss of $15.6 million, resulting in an effective tax rate of 0.95%. For the six months ended June 30, 2024, the Company recorded an income tax provision of $112 thousand related to foreign tax activity on a pretax loss of $55.9 million, resulting in an effective tax rate of (0.2)%. For the six months ended June 30, 2023, the Company recorded an income tax provision of $135 thousand related to foreign tax activity on a pretax loss of $32.0 million, resulting in an effective tax rate of (0.4)%. These effective tax rates differ from the U.S. federal statutory rate primarily due to the valuation allowance against the Company’s domestic and French deferred tax assets. |
Subsequent Events |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Subsequent Events | |
| Subsequent Events |
13. Subsequent Events
The Company has completed an evaluation of all subsequent events through the date of this Quarterly Report on Form 10-Q to ensure that these financial statements include appropriate disclosure of events both recognized in the financial statements and events which occurred but were not recognized in the financial statements. The Company has concluded that no subsequent events have occurred that require disclosure. |
Insider Trading Arrangements |
6 Months Ended |
|---|---|
|
Jun. 30, 2024
shares
| |
| Trading Arrangements, by Individual [Table] | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
| Robert Lantz [Member] | |
| Trading Arrangements, by Individual [Table] | |
| Material Terms of Trading Arrangement | On April 29, 2024, a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K) intended to satisfy the affirmative defense of Rule 10b5-1(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), adopted by Robert Lantz, General Counsel, was pursuant to the terms and conditions of such plan. This plan was adopted on December 12, 2023. The plan was adopted to facilitate the sale by Robert Lantz of 52,683 shares of our common stock owned by Robert Lantz. |
| Name | Robert Lantz |
| Title | General Counsel |
| Rule 10b5-1 Arrangement Terminated | true |
| Termination Date | April 29, 2024 |
| Aggregate Available | 52,683 |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation |
Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in these condensed consolidated financial statements. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unaudited Interim Financial Information |
Unaudited Interim Financial Information
The condensed consolidated financial statements as of June 30, 2024 are unaudited. These interim financial statements of NextNav have been prepared in accordance with U.S. General Accepted Accounting Principles (“GAAP”) and SEC instructions for interim financial information and should be read in conjunction with NextNav’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), which the Company filed with the SEC on March 13, 2024.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in management’s opinion, all adjustments of a normal, recurring nature that are necessary for the fair statement of the Company’s financial position as of June 30, 2024, results of operations for the three and six months ended June 30, 2024 and 2023, and changes in stockholders’ equity and cash flows for the six months ended June 30, 2024 and 2023, but are not necessarily indicative of the results expected for the full fiscal year or any other period.
There have been no changes to the Company’s significant accounting policies described in the 2023 Form 10-K that have had a material impact on these condensed consolidated financial statements and related notes. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Use of Estimates |
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period and accompanying notes. These estimates include those related to the useful lives and recoverability of long-lived and intangible assets, valuation of common stock warrants, income taxes and equity-based compensation, among others. NextNav bases estimates on historical experience, anticipated results and various other assumptions, including assumptions of future events, it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities, equity, revenue and expenses, that are not readily apparent from other sources. Actual results and outcomes could differ materially from these estimates and assumptions. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and Cash Equivalents and Marketable Securities |
Cash and Cash Equivalents and Marketable Securities
Cash and cash equivalents include all cash in banks and highly liquid investments with an original maturity of three months or less when purchased. The combined account balances held on deposit at each institution typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company seeks to reduce this risk by maintaining such deposits with high quality financial institutions that management believes are creditworthy. Further, the Company seeks to minimize its exposure to banking risk by limiting the amount of uninsured deposits and investing its excess cash in U.S. government and government agency bonds, and money market funds.
The Company invests excess cash primarily in U.S. treasury bills, U.S. government and government agency bonds, and money market funds. The Company classifies all marketable securities that have stated maturities of three months or less from the date of purchase as cash equivalents, and those that have stated maturities of over three months as short-term investments on the Condensed Consolidated Balance Sheets. The Company determines the appropriate classification of investments in marketable securities at the time of purchase and reevaluates such designation at each balance sheet date. Marketable securities that are held for resale are classified as "trading securities" and are measured at fair value with the related gains and losses, including unrealized, recognized in interest income (expense). Marketable securities not classified as held to maturity or as trading securities are classified as "available-for-sale securities" and the fair value option (“FVO”) was elected, for which related gains and losses, including unrealized gains and losses and interest, are recognized in interest income (expense). The FVO election allows the Company to account for the marketable securities at fair value, which is consistent with the manner in which the instruments are managed. For the six months ended June 30, 2024, the Company recorded $439 thousand of gains from fair value changes from FVO available-for-sale debt securities in interest income (expense) in the Condensed Consolidated Statements of Comprehensive Loss. There were no debt securities classified as available-for-sale in 2023. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue |
Revenue
The following table presents the Company’s revenue disaggregated by category and source:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contract Balances |
Contract Balances
Accounts receivable are billed and unbilled amounts related to the Company’s rights to consideration as performance obligations are satisfied when the rights to payment become unconditional but for the passage of time. As of June 30, 2024 and December 31, 2023, the Company’s accounts receivable balances were comprised of $2.2 million and $2.3 million, respectively. The Company estimates losses on accounts receivable based on expected losses, including its historical experience of actual losses. Receivables are considered impaired and written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement. As of June 30, 2024 and December 31, 2023, all accounts receivable balances were current and no allowances for doubtful accounts were recorded.
Contract liabilities relate to amounts billed in advance, or advance consideration received from customers, for which transfer of control of the good or service occurs at a later point in time. As of June 30, 2024 and December 31, 2023, the Company’s contract liabilities were $215 thousand and $297 thousand, respectively, and are recorded in deferred revenue in the Condensed Consolidated Balance Sheets. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-Based Compensation |
Equity-Based Compensation
Measurement of equity-based compensation with employees is based on the estimated grant date fair value of the equity instruments issued. The fair value of stock options is determined using the Black-Scholes option pricing model. The fair value of restricted awards is based on the closing price of NextNav’s common stock on the date of grant. NextNav recognizes equity-based compensation on a straight-line basis over the requisite service period of the grant, which is generally equal to the vesting period. NextNav accounts for forfeitures as they occur.
The following details the amount of stock-based compensation included in cost of goods sold, research and development, and selling, general and administrative expenses:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic and Diluted Net Loss per Share |
Basic and Diluted Net Loss per Share
Basic loss per share (“EPS”) excludes dilution for common share equivalents and is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding during each period, adjusted for the effect of dilutive common share equivalents.
Restricted shares are included in the computation of basic EPS as they vest and are included in diluted EPS, to the extent they are dilutive, determined using the treasury stock method. Outstanding options and warrants are included in the computation of diluted EPS, to the extent they are dilutive, determined using the treasury stock method.
The determination of the diluted weighted average shares is included in the following calculation of EPS:
The following details anti-dilutive unvested restricted stock units and unvested restricted stock awards, as well as the anti-dilutive effects of the outstanding warrants and stock options:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Method Investment |
Equity Method Investment The Company applies the equity method of accounting to investments when it has significant influence, but not controlling interest, in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The initial carrying value of equity method investment is based on the amount paid to purchase the interest in the investee entity. Subsequently, the investment is increased or decreased by the Company’s proportionate share in the investee’s earnings or losses and decreased by cash distributions from the investee. The Company eliminates from its financial results all significant intercompany transactions to the extent of its ownership interest, including the intercompany portion of transactions with equity method investee. The Company’s share of the investee’s income or loss is recorded on a one quarter lag. The Company evaluates equity method investment for impairment based upon a comparison of the fair value of the equity method investment to its carrying value, when impairment indicators exist. If the Company determines a decline in the fair value of an equity method investment below its carrying value is other-than-temporary, an impairment is recorded. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases |
Leases
NextNav leases office spaces under non-cancellable leases as well as site leases for towers and shelters under operating leases related to its network. Site leases are entered into throughout the United States under which NextNav receives the rights to install equipment used to transmit its services over its licensed spectrum. The Company, at the inception of the contract, determines whether a contract is or contains a lease based on assessment of the terms and conditions of the contract. The Company classifies leases with contractual terms longer than twelve months as either operating or finance. The Company has elected not to recognize lease assets and liabilities for its short-term leases, which are defined as leases with an initial term of twelve months or less.
The Company’s leases may include options to extend or terminate the lease. The option to renew may be automatic, at the option of NextNav or mutually agreed to between the landlord and NextNav. Lease terms include the non-cancellable term and periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
The Company’s lease agreements generally contain lease and non-lease components. Payments under the lease arrangements are primarily fixed. Non-lease components primarily include payments for utilities and maintenance. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component which increases the amount of the Company’s lease assets and liabilities. Certain lease agreements contain variable payments, which are expensed as incurred and not included in the lease assets and liabilities. These amounts include payments for common area maintenance.
Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate, because the interest rate implicit in the Company’s leases is not readily determinable. The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. Lease assets are reduced by landlord incentives, plus any direct costs from executing the leases or lease prepayments reclassified from “Other current assets” upon lease commencement. Operating lease expense is recognized on a straight-line basis over the lease term. Monthly rent expense includes any site related utility payments or other fees such as administrative or up-front fees contained in the lease agreements that are determinable upon execution of the lease agreement. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquired finite-lived intangible assets |
Acquired finite-lived intangible assets |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill |
Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company operates as one reporting unit. When testing goodwill for impairment, the Company may first perform an optional qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. No goodwill impairment was recorded for the three and six months ended June 30, 2024 and for the year ended December 31, 2023. The following summarizes the Company's goodwill activities:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisitions |
Acquisitions
The Company accounts for its acquisitions using the acquisition method of accounting. The purchase price is attributed to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired are included in the Company’s consolidated financial statements from the date of acquisition.
When the Company issues stock-based or cash awards to an acquired company’s shareholders, the Company evaluates whether the awards are consideration or compensation for post-acquisition services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the acquired company’s stockholders beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-acquisition services and recognized as expense over the requisite service period. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions, and competition. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions, tax-related valuation allowances and pre-acquisition contingencies are initially recorded as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Company’s consolidated statement of operations. In connection with the determination of fair values, the Company may engage a third-party valuation specialist to assist with the valuation of intangible and certain tangible assets acquired and certain assumed obligations. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long term debt |
Long term debt
In conjunction with the issuance of senior secured notes in May and July of 2023, the Company issued warrants to the lenders. The Company allocated the proceeds from its debt issuance to long term debt and equity classified warrants based on relative fair value as determined by the Discounted Cash Flow approach and Monte Carlo simulation model, respectively. The portion of proceeds allocated to equity-classified warrants and direct debt issuance costs are classified as debt discounts. The carrying value of long term debt in the Company’s condensed consolidated balance sheet consists of principal amount of debt, net of debt discounts. Debt discounts are amortized to interest expense based on the related debt agreements primarily using the effective interest method. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-controlling Interests |
Non-controlling Interests
The non-controlling interest in the Company’s condensed consolidated financial statements represents the warrants for Nestwave, SAS (as subsequently renamed, “NextNav France”) shares that were owned by the selling shareholders of NextNav France. Holders of the warrants do not have the right to income or obligation to losses, and the Company did not attribute any net loss to the non-controlling interests for the three and six months ended June 30, 2024 and 2023. During the three and six months ended June 30, 2024, 399,636 warrants for NextNav France shares were exercised and 397,037 shares of the Company's common stock were issued, resulting in redemption of non-controlling interests of $1.4 million. As of June 30, 2024, there were no warrants outstanding for NextNav France shares. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign Currency Translation |
Foreign Currency Translation The functional currency of NextNav’s foreign subsidiaries is generally the local currency. Assets and liabilities are translated into U.S. dollars at the exchange rate in effect at the Condensed Consolidated Balance Sheet date. Operating accounts are translated at an average rate of exchange for the respective accounting periods. Translation adjustments resulting from the process of translating foreign currency financial statements into U.S. dollars are reported as a component of accumulated other comprehensive loss. Transaction gains and losses reflected in the functional currencies are charged to income or expense at the time of the transaction.
Net transaction gains (losses) from foreign currency contracts recorded in the Condensed Consolidated Statements of Comprehensive Loss were immaterial for the three and six months ended June 30, 2024 and 2023. The only component of other comprehensive loss is currency translation adjustments for all periods presented. No income tax expense was allocated to the currency translation adjustments. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recent Accounting Developments Not Yet Adopted |
Recent Accounting Developments Not Yet Adopted During the fourth quarter of 2023, the Financial Accounting Standards Board issued two Accounting Standards Updates (“ASUs”) that require additional disclosures related to reportable segments under ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) and income taxes under ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-07 is effective for the Company's annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. It requires the Company to disclose information about significant expenses on an interim and annual basis for each reportable segment. ASU 2023-09 is effective for the Company's annual periods beginning January 1, 2026 with early adoption permitted, and requires the Company to disclose additional information on the rate reconciliation and income taxes paid. The Company is currently evaluating the potential effect that the updated standards will have on the financial statement disclosures. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of company’s revenue disaggregated by category and source |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of stock-based compensation included in cost of goods sold, research and development, and selling, general and administrative expenses |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of diluted weighted average shares |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of anti-dilutive unvested restricted stock units and unvested restricted stock awards |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of goodwill activities |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of accrued expenses and other current liabilities |
(1) Refer to Note 5 to our condensed consolidated financial statements for the three and six months ended June 30, 2024 included elsewhere in this Quarterly Report on Form 10-Q for more information. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangibles (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Intangible assets |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of future amortization |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of financial assets and liabilities measured at fair value |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of fair value warrants estimated using the Black-Scholes option-pricing model |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumption used in valuing the First Noncash consideration of asset purchase agreement liability to be settled in shares |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of liabilities measured at fair value |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Business (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Organization and Business | ||||||
| Net loss | $ 24,390 | $ 31,610 | $ 15,770 | $ 16,349 | $ 56,000 | $ 32,119 |
| Net cash used in operating activities | 19,279 | $ 15,919 | ||||
| Short term investments | $ 86,300 | $ 86,300 | ||||
Summary of Significant Accounting Policies (Details) - Schedule of company's revenue disaggregated by category and source - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Revenue disaggregated by category | ||||
| Total revenue | $ 1,105 | $ 800 | $ 2,151 | $ 1,630 |
| Commercial | ||||
| Revenue disaggregated by category | ||||
| Total revenue | 1,100 | 795 | 2,141 | 1,620 |
| Government contracts | ||||
| Revenue disaggregated by category | ||||
| Total revenue | $ 5 | $ 5 | $ 10 | $ 10 |
Summary of Significant Accounting Policies (Details) - Schedule of stock-based compensation included in cost of goods sold, research and development, and selling, general and administrative expenses - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Details of the amount of stock-based compensation | ||||
| Total stock-based compensation expense | $ 3,651 | $ 4,370 | $ 7,896 | $ 8,236 |
| Cost of goods sold | ||||
| Details of the amount of stock-based compensation | ||||
| Total stock-based compensation expense | 109 | 606 | 183 | 1,144 |
| Research and development | ||||
| Details of the amount of stock-based compensation | ||||
| Total stock-based compensation expense | 1,132 | 1,758 | 2,640 | 3,358 |
| Selling, general and administrative | ||||
| Details of the amount of stock-based compensation | ||||
| Total stock-based compensation expense | $ 2,410 | $ 2,006 | $ 5,073 | $ 3,734 |
Summary of Significant Accounting Policies (Details) - Schedule of diluted weighted average shares - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Numerator | ||||
| Net loss attributable to common stockholders | $ (24,390) | $ (15,770) | $ (56,000) | $ (32,119) |
| Denominator | ||||
| Weighted average shares – basic (in Shares) | 115,210 | 106,749 | 119,359 | 106,951 |
| Weighted average shares – diluted (in Shares) | 115,210 | 106,749 | 119,359 | 106,951 |
| Basic loss per share (in Dollars per share) | $ (0.21) | $ (0.15) | $ (0.47) | $ (0.3) |
| Diluted loss per share (in Dollars per share) | $ (0.21) | $ (0.15) | $ (0.47) | $ (0.3) |
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive unvested restricted stock units - shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Warrants | ||||
| Details of anti-dilutive securities | ||||
| Antidilutive Shares Excluded | 34,529 | 18,750 | 34,529 | 18,750 |
| Stock Options | ||||
| Details of anti-dilutive securities | ||||
| Antidilutive Shares Excluded | 4,484 | 3,769 | 4,484 | 3,769 |
| Unvested Restricted Stock Units | ||||
| Details of anti-dilutive securities | ||||
| Antidilutive Shares Excluded | 5,539 | 3,400 | 5,539 | 3,400 |
| Unvested Restricted Stock Awards | ||||
| Details of anti-dilutive securities | ||||
| Antidilutive Shares Excluded | 231 | 334 | 231 | 334 |
Summary of Significant Accounting Policies (Details) - Schedule of goodwill activities - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Summary of Significant Accounting Policies | ||
| Goodwill, Beginning Balance | $ 17,977 | $ 17,493 |
| Changes in foreign exchange rates | (527) | 342 |
| Purchase price adjustment | (96) | |
| Goodwill, Ending Balance | $ 17,450 | $ 17,739 |
Accrued Expenses and Other Current Liabilities (Details) - Schedule of accrued expenses and other current liabilities - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
||
|---|---|---|---|---|
| Payables and Accruals [Abstract] | ||||
| Accrued salary and other employee liabilities | $ 2,970 | $ 3,913 | ||
| Accrued legal and professional services | 975 | 324 | ||
| Accrued interest | 583 | 583 | ||
| Asset purchase agreement liability | [1] | 7,906 | ||
| Other accrued liabilities | 1,350 | 1,772 | ||
| Total | $ 13,784 | $ 6,592 | ||
| ||||
Intangibles (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Property, Plant and Equipment [Line Items] | ||||
| Amortization expense | $ 0.3 | $ 0.3 | $ 0.6 | $ 0.6 |
| Acquired Software [Member] | ||||
| Property, Plant and Equipment [Line Items] | ||||
| Weighted average remaining useful lives | 10 years 3 months 18 days | |||
| Acquired Technology [Member] | ||||
| Property, Plant and Equipment [Line Items] | ||||
| Weighted average remaining useful lives | 10 years 3 months 18 days | |||
Intangibles (Details) - Schedule of Intangible assets - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Intangible Assets and Goodwill [Line Items] | ||
| Gross Amount | $ 14,033 | $ 13,917 |
| Accumulated Amortization | 3,896 | 3,292 |
| Net Carrying Value | 10,137 | 10,625 |
| Indefinite-Lived Intangible Assets [Member] | ||
| Intangible Assets and Goodwill [Line Items] | ||
| Gross Amount | 3,467 | 3,467 |
| Accumulated Amortization | ||
| Net Carrying Value | 3,467 | 3,467 |
| Acquired Software [Member] | ||
| Intangible Assets and Goodwill [Line Items] | ||
| Gross Amount | 7,061 | 7,217 |
| Accumulated Amortization | 2,282 | 2,050 |
| Net Carrying Value | 4,779 | 5,167 |
| Acquired Technology [Member] | ||
| Intangible Assets and Goodwill [Line Items] | ||
| Gross Amount | 582 | 599 |
| Accumulated Amortization | 81 | 58 |
| Net Carrying Value | 501 | 541 |
| Internal Use Software [Member] | ||
| Intangible Assets and Goodwill [Line Items] | ||
| Gross Amount | 2,923 | 2,634 |
| Accumulated Amortization | 1,533 | 1,184 |
| Net Carrying Value | $ 1,390 | $ 1,450 |
Intangibles (Details) - Schedule of future amortization $ in Thousands |
Jun. 30, 2024
USD ($)
|
|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| 2024 | $ 565 |
| 2025 | 1,084 |
| 2026 | 902 |
| 2027 | 644 |
| 2028 and thereafter | 3,475 |
| Total | $ 6,670 |
Equity Method Investment (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
|
Jun. 30, 2024
USD ($)
|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2024
USD ($)
shares
|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2024
¥ / shares
|
Dec. 31, 2023
USD ($)
|
|
| Schedule of Equity Method Investments [Line Items] | ||||||
| Account receivables | $ 13 | $ 13 | $ 107 | |||
| Met Com [Member] | ||||||
| Schedule of Equity Method Investments [Line Items] | ||||||
| Shares representing ownership | shares | 702,334 | |||||
| Ownership percentage | 14.80% | 14.80% | ||||
| Other long-term assets | $ 623 | $ 623 | $ 705 | |||
| Other income (expenses) | $ 41 | $ 31 | $ 81 | $ 86 | ||
| Met Com [Member] | Warrant [Member] | ||||||
| Schedule of Equity Method Investments [Line Items] | ||||||
| Ownership percentage | 33.00% | 33.00% | ||||
| Warrants exercise price per share | ¥ / shares | ¥ 10 | |||||
Fair Value (Details) - Schedule of fair value warrants estimated using the Black-Scholes option-pricing model - $ / shares |
6 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2024 |
Dec. 31, 2023 |
|
| Fair Value | ||
| Stock Price (in Dollars per share) | $ 8.11 | $ 4.45 |
| Strike price | $ 11.5 | $ 11.5 |
| Holding Period/Term (years) | 2 years 3 months 29 days | 2 years 9 months 25 days |
| Volatility | 98.60% | 66.90% |
| Expected dividends | 0.00% | 0.00% |
| Risk-Free Rate | 4.65% | 4.05% |
| Fair value of warrants (in Dollars per share) | $ 3.99 | $ 0.91 |
Fair Value - Schedule of assumption used in valuing the First Noncash consideration of asset purchase agreement liability to be settled in shares (Details) - Multilateration Location and Monitoring Service licenses [Member] - Progeny LMS, LLC [Member] $ / shares in Units, $ in Millions |
6 Months Ended |
|---|---|
|
Jun. 30, 2024
USD ($)
$ / shares
| |
| Fair Value | |
| 20-day volume weighted average price | $ 7.69 |
| Stock price | $ 8.11 |
| Consideration Payable in shares | $ | $ 7.5 |
| Period for weighted average share price for assumption of fair value of shares expected to be issued | 20 days |
Fair Value (Details) - Schedule of liabilities measured at fair value - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3) | ||||
| Reclassification of warrant liability to Common Stock warrants | $ (4,308) | $ (2,468) | ||
| Fair value adjustment of asset purchase agreement liability | $ (1,878) | |||
| Private Placement Warrants [Member] | ||||
| Reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3) | ||||
| Beginning balance for the liabilities measured at fair value using significant unobservable inputs (Level 3) | 7,053 | 7,053 | ||
| Fair value adjustment of Private Placement Warrants | 21,666 | |||
| Reclassification of warrant liability to Common Stock warrants | (6,776) | |||
| Ending balance for the liabilities measured at fair value using significant unobservable inputs (Level 3) | 21,943 | 21,943 | ||
| Asset Purchase Agreement Liability | ||||
| Reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3) | ||||
| Beginning balance for the liabilities measured at fair value using significant unobservable inputs (Level 3) | ||||
| Initial recognition of asset purchase agreement liability | 9,784 | |||
| Fair value adjustment of asset purchase agreement liability | (1,878) | |||
| Ending balance for the liabilities measured at fair value using significant unobservable inputs (Level 3) | $ 7,906 | $ 7,906 | ||
Long term debt, net (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Jun. 08, 2023 |
May 09, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
Jul. 06, 2023 |
|
| Long term debt, net | ||||||||
| Warrants | 34,528,756 | 34,528,756 | ||||||
| Carrying value of the Notes, net of debt issuance cost and discount | $ 51,397 | $ 51,397 | $ 48,447 | |||||
| Amortization of debt issuance costs and discount | 2,950 | $ 480 | ||||||
| Note Purchase Agreement and Indenture Agreement [Member] | Senior Secured Notes due 2026 [Member] | ||||||||
| Long term debt, net | ||||||||
| Debt discount of the Notes | 18,600 | 18,600 | ||||||
| Debt Instrument, Aggregate principal amount | $ 20,000 | $ 50,000 | ||||||
| Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||
| Debt Instrument, Maturity Date | Dec. 01, 2026 | |||||||
| Debt Instrument, Frequency of Periodic Payment | semi-annually | |||||||
| Proceeds from issuance of debt | $ 20,000 | |||||||
| Carrying value of the Notes, net of debt issuance cost and discount | 51,400 | 51,400 | ||||||
| Amortization of debt issuance costs and discount | $ 1,500 | $ 500 | $ 3,000 | $ 500 | ||||
| Debt Instrument, Redemption Period, Start Date | May 09, 2024 | |||||||
| Debt Instrument, Redemption Price, Percentage | 101.00% | |||||||
| Debt Instrument, Redemption Price, Percentage of Principal Amount at Event of Certain Non-Ordinary Course Asset Sales | 100.00% | 100.00% | ||||||
| Debt Instrument, Redemption Price, Percentage of Principal Amount at Event of Change of Control | 101.00% | 101.00% | ||||||
| Debt Instrument, Covenant Compliance | the Company was in compliance with all of the applicable debt covenants | |||||||
| Note Purchase Agreement and Indenture Agreement [Member] | Senior Secured Notes due 2026 [Member] | Maximum [Member] | ||||||||
| Long term debt, net | ||||||||
| Percentage of accrued and unpaid interest on debt | 50.00% | |||||||
| Exercise period of debt issued, from date of initial closing | 30 days | |||||||
| Debt Instrument, Interest Rate, Increase (Decrease) | 0.50% | |||||||
| Debt Instrument, Interest Rate, Increase at Event of Default | 2.00% | 2.00% | ||||||
| Note Purchase Agreement and Indenture Agreement [Member] | Senior Secured Notes due 2026 [Member] | Warrant [Member] | ||||||||
| Long term debt, net | ||||||||
| Warrants | 18,518,520 | 15,778,766 | 15,778,766 | 7,407,407 | ||||
| Exercise price of warrants issued | $ 2.16 | $ 2.16 | $ 2.16 | $ 2.16 | ||||
| Warrant redemption price per share of underlying common stock | $ 0.01 | $ 0.01 | ||||||
| Fair value of debt | $ 14,600 | $ 22,800 | $ 22,800 | $ 8,200 | ||||
| Note Purchase Agreement and Indenture Agreement [Member] | Senior Secured Notes due 2026 [Member] | Warrant [Member] | Minimum [Member] | ||||||||
| Long term debt, net | ||||||||
| Debt instrument, Redemption price, Percentage of exercise price of warrants | 130.00% | 130.00% | ||||||
| Note Purchase Agreement and Indenture Agreement [Member] | Senior Secured Notes due 2026 [Member] | Warrant [Member] | Maximum [Member] | ||||||||
| Long term debt, net | ||||||||
| Exercise period of debt issued, from date of initial closing | 35 days | |||||||
Warrants and Warrant Liability (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
|---|---|---|---|---|---|---|---|
Jun. 08, 2023 |
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Jul. 06, 2023 |
May 09, 2023 |
|
| Warrants and Warrant Liability (Details) [Line Items] | |||||||
| Warrants outstanding | 34,528,756 | 34,528,756 | |||||
| Description of warrants | the right to redeem the outstanding Public Warrants in whole and not in part at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sales price of the Company’s common stock matched or exceeded $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which NextNav sends the notice of redemption to the warrant holders. | ||||||
| Reclassification from warrant liability to additional paid-in capital | $ 4,308 | $ 2,468 | |||||
| Aggregate proceeds from warrant Exercises | $ 21,036 | ||||||
| Warrant [Member] | |||||||
| Warrants and Warrant Liability (Details) [Line Items] | |||||||
| Reclassification from warrant liability to equity (in shares) | 1,305,580 | 2,251,016 | |||||
| Reclassification from warrant liability to additional paid-in capital | $ 4,300 | $ 6,800 | |||||
| Note Purchase Agreement and Indenture Agreement [Member] | Senior Secured Notes due 2026 [Member] | Maximum [Member] | |||||||
| Warrants and Warrant Liability (Details) [Line Items] | |||||||
| Exercise period of debt issued, from date of initial closing | 30 days | ||||||
| Note Purchase Agreement and Indenture Agreement [Member] | Senior Secured Notes due 2026 [Member] | Warrant [Member] | |||||||
| Warrants and Warrant Liability (Details) [Line Items] | |||||||
| Warrants outstanding | 15,778,766 | 15,778,766 | 7,407,407 | 18,518,520 | |||
| Class of warrant or right number of securities called by each warrant or right | 1 | 1 | |||||
| Exercise price per unit (in Dollars per share) | $ 2.16 | $ 2.16 | $ 2.16 | $ 2.16 | |||
| Warrants, maturity date | Jun. 01, 2027 | Jun. 01, 2027 | |||||
| Financial Instrument Subject to Mandatory Redemption, Par Value Per Share | $ 0.01 | $ 0.01 | |||||
| Fair value of debt | $ 22,800 | $ 22,800 | $ 8,200 | $ 14,600 | |||
| Stock issued during period for warrants exercised, shares | 9,738,930 | ||||||
| Aggregate proceeds from warrant Exercises | $ 21,000 | ||||||
| Note Purchase Agreement and Indenture Agreement [Member] | Senior Secured Notes due 2026 [Member] | Warrant [Member] | Minimum [Member] | |||||||
| Warrants and Warrant Liability (Details) [Line Items] | |||||||
| Debt instrument, Redemption price, Percentage of exercise price of warrants | 130.00% | 130.00% | |||||
| Note Purchase Agreement and Indenture Agreement [Member] | Senior Secured Notes due 2026 [Member] | Warrant [Member] | Maximum [Member] | |||||||
| Warrants and Warrant Liability (Details) [Line Items] | |||||||
| Exercise period of debt issued, from date of initial closing | 35 days | ||||||
| Public Warrants and Private Placement Warrants [Member] | |||||||
| Warrants and Warrant Liability (Details) [Line Items] | |||||||
| Exercise price per unit (in Dollars per share) | $ 11.5 | $ 11.5 | |||||
| Warrants, maturity date | Oct. 28, 2026 | Oct. 28, 2026 | |||||
| Public Warrants and Private Placement Warrants [Member] | Note Purchase Agreement and Indenture Agreement [Member] | Senior Secured Notes due 2026 [Member] | Warrant [Member] | |||||||
| Warrants and Warrant Liability (Details) [Line Items] | |||||||
| Class of warrant or right number of securities called by each warrant or right | 1 | 1 | |||||
| Public Warrants [Member] | |||||||
| Warrants and Warrant Liability (Details) [Line Items] | |||||||
| Warrants outstanding | 13,250,476 | 13,250,476 | |||||
| Private Placement Warrants [Member] | |||||||
| Warrants and Warrant Liability (Details) [Line Items] | |||||||
| Warrants outstanding | 5,499,514 | 5,499,514 | |||||
Common Stock (Details) - $ / shares |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2024 |
Mar. 31, 2024 |
Dec. 31, 2023 |
|
| Common Stock and Convertible Preferred Units (Details) [Line Items] | |||
| Common stock, shares issued | 124,049,855 | 111,261,434 | |
| Common stock, shares outstanding | 123,917,627 | 123,917,627 | 111,132,222 |
| Common stock, shares authorized | 500,000,000 | 500,000,000 | |
| Preferred stock, shares authorized | 100,000,000 | ||
| Preferred Stock, Shares Issued | 0 | ||
| Preferred Stock, Shares Outstanding | 0 | ||
| Capital stock shares authorized | 600,000,000 | ||
| Capital stock par or stated value per share | $ 0.0001 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Income Taxes (Details) [Line Items] | ||||
| Effective tax rate | (0.28%) | 0.95% | (0.20%) | (0.40%) |
| Income tax provision (benefit) | $ 68 | $ 148 | $ 112 | $ 135 |
| pretax loss | $ 24,322 | $ 15,622 | $ 55,888 | $ 31,984 |
| U.S. Federal and State [Member] | ||||
| Income Taxes (Details) [Line Items] | ||||
| Effective tax rate | 0.00% | |||