NEXTNAV INC

NextNav Inc.

CONDENSED Consolidated Balance Sheets

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NEXTNAV INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

CONDENSED Consolidated Statements of Changes in Stockholders’ equity

CONDENSED Consolidated Statements of Cash Flows

(IN THOUSANDS)

Notes to Condensed Consolidated Financial Statements (Unaudited)

For thethree months ended March 31, 2025

1. Organization and Business

Principal Business

NextNav Inc. and its consolidated subsidiaries (“NextNav” or the “Company”) is the market leader in delivering resilient, next generation, complementary positioning, navigation and timing (“PNT”) solutions designed to overcome the limitations and vulnerabilities of the existing space-based Global Positioning System (“GPS”) and Global Navigation Satellite Systems (“GNSS”). The Company is evolving its complementary PNT solutions to use 5G New Radio (“5G NR”) technologies (“NextGen”), in conjunction with its Petition for Rulemaking filed with the FCC, to update and reconfigure the Lower 900 MHz band and its spectrum licenses. The Company expects the evolution of its platform to NextGen will significantly improve the efficiency, flexibility, and scale of its operations, technically enabling the delivery of high-quality PNT based on a 5G broadband network. The NextGen solution is being designed to allow one or more partners to integrate the Company’s Lower 900 MHz spectrum into their 5G networks. The Company expects that this will result in wide-scale availability of both complementary PNT services and additional broadband capacity.

As the Company evolves its technology platform to NextGen and pursues regulatory changes to the Lower 900 MHz band and its spectrum licenses, it continues to deliver high-quality PNT services through its Pinnacle and TerraPoiNT solutions. The Pinnacle system provides an accurate altitude service and is primarily used for public safety applications, including enhanced 911 (“E911”) for Verizon and a growing number of devices operating on the remaining national cellular network providers. The TerraPoiNT system is a terrestrially based dedicated, complementary 3D PNT network designed to overcome the limitations inherent in the space-based nature of GPS. TerraPoiNT received the highest scores in testing by the DoT reported in 2021 regarding potential PNT backup solutions in each category tested and was the only solution evaluated capable of providing the full set of services provided by GPS. Continuing its engagement with the DoT, in 2024 the Company was awarded a contract to establish performance characteristics for TerraPoiNT to allow the DoT to incorporate its solutions into a clearinghouse of solutions defined in the DoT Complementary PNT Action Plan, for potential use by Federal government customers.

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 thethree months ended March 31, 2025 and 2024, the Company incurred net losses of $58.6 million and $31.6 million, respectively. During thethree months ended March 31, 2025 and 2024, net cash used in operating activities was$12.2 million and $7.0 million, respectively. As of March 31, 2025, cash and cash equivalents and marketable securities was $188.4 million. The Company’s primary use of cash is to fund operations as NextNav continues to perform research and development and 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 March 31, 2025 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.

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 March 31, 2025 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, 2024 (the “2024 Form 10-K”), which the Company filed with the SEC on March 12, 2025.

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 March 31, 2025, results of operations for thethree months ended March 31, 2025 and 2024, and changes in stockholders’equity and cash flows for thethree months ended March 31, 2025 and 2024, 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 2024 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, derivative liability-conversion option, 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 ofthree 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 and money market funds. The Company classifies all marketable securities that have stated maturities ofthree 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 expense, net. 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 expense, net. 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 three months ended March 31, 2025 and 2024, the Company recorded gains of $333 thousand and $367 thousand, respectively, from fair value changes related to the FVO available-for-sale debt securities, which were recorded within interest expense, net, in the Condensed Consolidated Statements of Comprehensive Loss.

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 March 31, 2025 and December 31, 2024, the Company’s accounts receivable balances were comprised of $1.6 million and $3.3 million, respectively. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic condition. An allowance for credit losses for accounts receivable is recorded as an offset to accounts receivable, and changes in such are classified asselling, general and administrative expense in the Consolidated Statements of Comprehensive Loss. As of both March 31, 2025 and December 31, 2024, all accounts receivable balances were current andno allowance for credit losses 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 March 31, 2025 and December 31, 2024, the Company’s contract liabilities were $310 thousand and $288 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 aone 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 oftwelve 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 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 asone 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 months ended March 31, 2025 and for the year ended December 31, 2024. 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 toone 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

Thecarrying value of long-term debt in the Company’s Condensed Consolidated Balance Sheets generally consists of principal amount of debt, net of debt discounts. The Company evaluates its debt agreements to determine whether debt contains embedded features requiring bifurcation from the debt host in accordance with Accounting Standards Codification 815, Derivatives and Hedging ("ASC 815"). If an embedded feature requires bifurcation from its debt host, the Company will account for it as a derivative at fair value. If a hybrid instrument has multiple embedded derivatives requiring bifurcation, the Company will bifurcate a single compound derivative. The Company uses valuation models to estimate the fair value of the bifurcated embedded derivatives. Debt discounts recognized as a result of allocating proceeds to bifurcated embedded derivatives as well as accounting for direct debt issuance costs are amortized to interest expense using the effective interest method.

The fair value of bifurcated derivatives is presented in the same line item as debt in the Company's Condensed Consolidated Balance Sheets.

Unamortized debt discounts are written off and included in the Company’s gain or loss calculations to the extent the Company extinguishes debt prior to the original maturity.

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 thethree months ended March 31, 2025 and 2024. 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.

Segments

NextNav operates asone operating segment. NextNav’s chief operating decision maker (“CODM”)is its Chief Executive Officer, who reviews financial information presented on an entity-wide basis for purposes of making operating decisions, assessing financial performance and allocating resources.

Recent Accounting Developments Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). 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 has not yet adopted ASU 2023-09 and is currently evaluating the potential effect that the updated standard will have on the financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40)— Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. ASU 2024-03 is effective for the Company's annual periods beginning January 1, 2027, on a prospective basis, with early adoption and retrospective application permitted. The Company has not yet adopted ASU 2024-03 andis currently evaluating the potential effect of the adoption on its consolidated financial statements.

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 consolidated financial statements.

3. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

4. Intangibles

Intangible assets as of March 31, 2025 and December 31, 2024 consisted of following (in thousands):

The weighted average remaining useful lives of acquired software and acquired technology were 9.6 years as of March 31, 2025.

Amortization expense on intangibles assets was$0.4 million for thethree months ended March 31, 2025 and $0.3 million for thethree months ended March 31, 2024. Future amortization is expected as follows:

5. Asset PurchaseAgreement****

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 the 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 made the cash payment of $2.5 million in April 2024. Further, the Company recorded a liability and 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 20-day volume weighted average price of $5.04 and share price of $6.58) equivalent to the $7.5 million First Noncash Consideration, as the payment obligation was based upon passage of time and was not contingent. On November 15, 2024, the Company settled the First Noncash Consideration liability by issuing 620,106 shares of NextNav common stock (based on a 20-day volume weighted average price of $12.09), which had a fair value of $8.8 million (based on a share price of $14.22 upon issuance) that resulted in a gain of $1.0 million, which is recorded in Other income (loss), net in the Consolidated Statement of Comprehensive Loss for the year ended December 31, 2024, as a result of the difference between the fair value of the shares issued on November 15, 2024 and the fair value of the shares that were expected to be issued for the First Noncash Consideration liability based on the 20-day volume-weighted average price on March 31, 2024. The Company recognized a total of $12.6 million related to the Asset Purchase Agreement within other assets in the Consolidated Balance Sheet as of December 31, 2024, which is comprised of the $2.5 million cash consideration, $0.3 million in qualifying direct transaction costs, and $9.8 million related to the First Noncash Consideration.

The Asset Purchase Agreement provides for additional contingent consideration in the amount of $20 million, payable in shares of NextNav common stock. Payment of this additional consideration is contingent upon the FCC granting additional flexibility in the use of M-LMS spectrum.

The Asset Purchase Agreement remains subject to FCC review. On April 16, 2024, the Company petitioned the FCC to commence a rule making to reconfigure and update the rules governing the Lower 900 MHz band plan to allow additional flexibility in the use of M-LMS spectrum (the “Petition”). The FCC’s review of the Petition is pending. Based on available information, the Company has concluded that it is not probable that the Transaction will not close and therefore, no contingency loss is recognized as of March 31, 2025 and December 31, 2024.

6. Equity Method Investment

As of March 31, 2025, 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 theinvestee entity level is allocated to equity method goodwill and is not amortized. The Company recognized a loss of $39 thousand and $40 thousand in the three months ended March 31, 2025 and 2024, respectively, that is recorded in other loss, net. The carrying value of the Company’s investment in MetCom was$491 thousand and $530 thousand as of March 31, 2025 and December 31, 2024, respectively, and is classified in other long-term assets. The Company had $13 thousand in accounts receivable from MetCom as of both March 31, 2025 and December 31, 2024.

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 10 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 March 31, 2025; therefore, the MetCom Warrant was not exercisable.

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. Thethree-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. The total estimated fair value of the 2028 Notes was $148.5 million as of March 31, 2025.

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

Private Placement Warrants

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 March 31, 2025 and December 31, 2024, NextNav used a Monte Carlo simulation model. The following table shows the assumptions used in each respective model:

The significant unobservable input used in the fair value measurement of the Private Placement Warrants is expected volatility. Holding other inputs constant, an increase (decrease) in expected volatility would have resulted in a higher (lower) fair value measurement, respectively.

The table below provides a reconciliation of the beginning and ending balances for the Private Placement Warrants measured at fair value using significant unobservable inputs (Level 3).

Derivative Liability-Conversion Option

The 2028 Notes (as defined below) contain an embedded conversion feature that is required to be bifurcated and accounted for separately from the 2028 Notes as a derivative liability. The fair value of the conversion option was determined using a binomial lattice valuation model and a “with-and-without” valuation methodology. The derivative liability related to the 2028 Notes conversion option was measured at March 12, 2025 (agreement date of 2028 Notes, see Note 8 - Long term debt) and March 31, 2025 and contained the following assumptions:

The significant unobservable input used in the fair value measurement of the Conversion Option is expected volatility. Holding other inputs constant, an increase (decrease) in expected volatility would have resulted in a higher (lower) fair value measurement, respectively.

The table below provides a summary of the changes in fair value of the Company's 2028 Notes conversion option derivative liability accounted for as liabilities using significant unobservable inputs (Level 3):

The sensitivity of the fair value calculation to these methods, assumptions, and estimates included could create materially different results under different conditions or using different assumptions.

8. Long term debt, net

2026 Notes and related warrants

The Company issued a total of $70 million of senior secured notes (the “2026 Notes”) with a fixed interest rate of 10% to a group of lenders during 2023. The terms of the 2026 Notes provide that they 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 2026 Notes due with its common stock.

Inconjunction with the issuance of 2026 Notes, the Company issued 25,925,927 warrants at an exercise price of $2.16 per share to purchase Company’s common stock to the 2026 Notes holders (the “2026 Warrants”). The Company had the right to redeem for cash the applicable pro rata portion of any 2026 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 form of 2026 Warrant) and the market price of the underlying common stock, calculated in accordance with the provisions of the form of warrants, exceeded 130% of the exercise price of the warrants.

2028 Notes and related warrants

On March 12, 2025, the Company entered into a Note Purchase Agreement (the “NPA”), among the Company and certain purchasers named therein (the “Purchasers”), pursuant to which the Company agreed to (i) sell to the Purchasers, in a private placement (the “Private Placement”), pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder, $190 million in aggregate principal amount of its 5.00% Senior Secured Convertible Notes due 2028 (the “2028 Notes”) and (ii) issue to certain of the purchasers, common stock purchase warrants (the “2028 Warrants”) to purchase an aggregate of 7,800,000 shares of the Company’s common stock, par value $0.0001 per share, with exercise prices ranging from $12.56 to $20.00 per share.

On March 27, 2025 (the “Closing Date”), in connection with the Private Placement, the Company entered into (i) an indenture (the “Indenture”), among the Company, certain subsidiaries of the Company named therein as notes guarantors (the “Guarantors”) and GLAS Trust Company, LLC, as trustee and notes collateral agent (“GLAS Trust”), (ii) a security agreement (the “Security Agreement”), among the Company, the Guarantors and GLAS Trust and (iii) a registration rights agreement (the “Registration Rights Agreement”), among the Company and the Purchasers. On March 27, 2025, the Company also issued the 2028 Warrants to certain of the Purchasers.

The 2028 Notes will mature on June 30, 2028 with interest payable in cash semi-annually in arrears on June 1 and December 1 of each year at 5% per annum.

The Purchasers may, at any time, elect to convert some or all of the 2028 Notes into a number of shares of common stock equal to (i) the sum of the then-outstanding principal amount of 2028 Notes to be converted plus all accrued and unpaid interest to the date of the conversion divided by (ii) the then-applicable conversion price. The initial conversion price was set at 79.6178 shares per $1,000 principal and is subjected to adjustment based on standard antidilution provisions. Upon conversion, the Company is required to deliver to the Purchasers shares of common stock and no alternative settlement methods are permitted.

The Company may redeem the 2028 Notes, in whole or in part, at any time on or after March 27, 2026 at a redemption price equal to 100% of the principal amount of such 2028 Notes, plus accrued and unpaid interest, if the last reported sale price of common stock is greater than or equal to 160% of the conversion price for the 2028 Notes for at least 20 trading days during any 30 consecutive trading day period.

Upon the closing of the Private Placement, the Company used a portion of the net proceeds from the Private Placement to redeem all of the 2026 Notes, at a redemption price of 101% of the principal amount of the 2026 Notes, plus accrued and unpaid interest.

The Company recognized a$14.4 million loss on the early extinguishment of the 2026 Notes during the three months ended March 31, 2025. The loss on extinguishment of the 2026 Notes was determined based on the difference between reacquisition price and the net carrying amount of the 2026 Notes.

The terms of the 2026 Warrants were not modified or impacted by the Private Placement and the subsequent redemption of the 2026 Notes.

Inconjunction with the issuance of the 2028 Notes, the Company issued the 2028 Warrants totwo lead investors, who were non-2026 Notes lenders to purchase shares of the Company’s common stock with exercise prices ranging from $12.56 to $20.00 per share. The aggregated fair value of the 2028 Warrants was $5.8 million on the issuance date and presented as “additional paid-in capital” in the condensed consolidated balance sheets, with an offset entry recorded in other loss, net in the condensed consolidated statements of comprehensive loss. The fair value of the 2028 Warrants was determined using the Black-Scholes option pricing model based on non-observable pricing inputs (e.g., expected volatility) in the market and is categorized accordingly as Level 3 in the fair value hierarchy.

As part of the NPA, an entity affiliated with Fortress Investment Group LLC ("Fortress"), a 10% or greater stockholder of the Company andone of the lead investors, purchased $50 million in 2028 Notes and received 3,900,000 warrants. Additionally, an entity affiliated with Neil S. Subin, a director of the Company, purchased $6.3 million of the 2028 Notes.

For the three months ended March 31, 2025, the accrued interest expense related to these notes was $28 thousand for the entity affiliated with Fortress and $4 thousandfor the entity affiliated with Neil S. Subin.

The Company agreed to file a registration statement under the Securities Act registering the resale of the 2028 Warrants, the shares of common stock underlying the 2028 Warrants and the conversion option of the 2028 Notes within 35 business days of the Closing Date. The Company filed such registration statement with the United States Securities and Exchange Commission (“SEC”) on April 25, 2025, which the SEC declared effective on May 2, 2025.

The Company determined that the conversion option embedded within the 2028 Notes required bifurcation as a derivative liability under ASC 815. For the valuation to record the debt and embedded derivative related to the conversion option at fair value, the Company used abinomial lattice valuation model and a “with-and-without” valuation methodology at inception and on subsequent valuation dates. This model incorporates inputs such as the stock price of the Company, risk-free interest rate, thetransaction-calibrated debt yield and expected volatility. Certain inputs (e.g., expected volatility) involve unobservable inputs and are classified as level 3 of the fair value hierarchy. See Note 7 – Fair Value. The sensitivity of the fair value calculation to these methods, assumptions, and estimates included could create materially different results under different conditions or using different assumptions. Further, the Company determined that contingent interest features require bifurcation and therefore, bifurcated these embedded derivatives, along with the conversion option, from the debt host as a single, compound derivative liability. The Company determined the likelihood of the occurrence of events requiring payment under the contingent interest features to be remote and therefore, determined their value to be de minimis. The fair value of derivative liability was $56.5 million and was included in long term debt in the Company's Condensed Consolidated Balance Sheets as of March 31, 2025.

The carrying value of the 2028 Notes was$156.6 million as of March 31, 2025, net of unamortized debt discount of$33.4 million and was included in long-term debt in the Company’s Condensed Consolidated Balance Sheets.

As of March 31, 2025, the effective interest rate of the 2028 Noteswas 12%.

We recognized interest expense associated with the 2028 Notes as follows for the three-months ended March 31, 2025. There wasno interest expense recognized for the three-months ended March 31, 2024 associated with the 2028 Notes.

Debt Covenant Compliance

The obligations of the Company under the 2028 Notes will be, subject to certain customary exceptions, secured by substantially all of the assets of the Company and its subsidiaries.

The Indenture contains customary covenants limiting the ability of the Company and its subsidiaries to: (i) incur or guarantee additional indebtedness; (ii) pay dividends or distributions on, or redeem or repurchase, capital stock; (iii) make certain investments or other restricted payments; (iv) sell assets; (v) enter into transactions with affiliates; or (vi) merge or consolidate or sell all or substantially all of their assets. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. The Indenture also contains customary events of default.

As of March 31, 2025, the Company was in compliance with all of the applicable debt covenants described above.

9. Warrants and Warrant Liability

As of March 31, 2025, NextNav had 37,297,292 warrants outstanding, which includes: (a)14,715,170 public warrants associated with Spartacus Acquisition Corp.’s (“Spartacus”) initial public offering (the “Public Warrants”), (b)4,034,790 warrants issued to Spartacus in a private placement on the initial public offering closing date (the “Private Placement Warrants”), (c)10,747,332 2026 Warrants (as further descried in Note 8) and(d)7,800,000 2028 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 March 31, 2025. During thethree months ended March 31, 2025,205,402 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, the Company reclassified $1.2 million from warrant liability to additional paid-in capitalin its Condensed Consolidated Balance Sheet as of March 31, 2025.

Holders of the Public Warrants, Private Placement Warrants, 2026 Warrants and 2028 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 purchaseone share at an exercise price of $11.50 per share. The Public Warrants and Private Placement Warrants expire on October 28, 2026.

NextNav hasthe 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.

10. Common Stock

As of March 31, 2025, 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 March 31, 2025, NextNav had 132,413,938 shares of common stock issued and 132,281,710 shares of common stock outstanding.

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 March 31, 2025, 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 as well as its French deferred tax assets, which results in an annualized effective tax rate for both the Company’s U.S. and French operations of 0.0%. For thethree months ended March 31, 2025, the Company recorded an income tax provision of $58 thousand related to foreign tax activity in India on a pretax loss of $58.5 million, resulting in an effective tax rate of (0.1)%. For thethree months ended March 31, 2024, the Company recorded an income tax provision of $44 thousand related to foreign tax activity in India on a pretax loss of $31.6 million, resulting in an effective tax rate of (0.14)%. 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.

13. Segments

NextNav operates asone operating segment. Information on the Company’s products and service offerings are included in Note 1 - Organization and Business. The accounting policies of the single operating segment are the same as those described in Note 2 - Summary of Significant Accounting Policies.

NextNav’s CODM is its Chief Executive Officer, who reviews financial information presented on an entity-wide basis for purposes of making operating decisions, assessing financial performance, and allocating resources.

The CODM assesses performance and decides how to allocate resources based on consolidated net loss that also is reported on the Consolidated Statements of Comprehensive Loss. Consolidated net loss is used to monitor budget versus actual results and in the annual budgeting and forecasting process. The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets. The CODM reviews cash flow forecasts in making capital and investment decisions. The CODM considers budget-to-actual variances in consolidated net loss monthly in determining performance and the compensation of employees.

NextNav did not have any intra-entity sales or transfers during thethree months ended March 31, 2025 and 2024.

Segment financial information for the three months ended March 31, 2025 and 2024 is as follows:

1 Other segment items include equity-based compensation, debt extinguishment loss, non-cash other loss, non-cash rent expense, capitalized labor costs, accretion expense on asset retirement obligations and other income (loss).

Substantially all long-lived tangible assets are located in the United States.

For thethree months ended March 31, 2025, two customers accounted for 51% and 39%of total revenue. For thethree months ended March 31, 2024, two customers accounted for 75% and 14% of total revenue. Substantially all revenue was generated from the United States.

14. 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.