Thank you for standing by. My name is Trilla, and I will be your conference operator today. At this time, I would like to welcome everyone to the NextNav Second Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. I would now like to turn the conference over to Erica Bartsch. You may begin.

Good afternoon, everyone, and welcome to NextNav's second quarter 2024 earnings conference call. Participating on today's call are Mariam Sorond, NextNav's Chief Executive Officer; and Chris Gates, NextNav's Chief Financial Officer. Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as may, anticipate, believe, expect, intend, might, plan, possible potential, aim, drive, predict, project, should, could, would, will and similar expressions may identify forward-looking statements, but the absence of these words do not mean that a statement is not forward-looking. Such forward-looking statements, which may relate to NextNav's forecasts of future results, future prospects, developments and business strategies are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside NextNav's control that could cause actual results to differ materially from the results discussed in the forward-looking statements. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and NextNav undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. For additional information regarding risk factors, see Part 2 Item 1A Risk Factors of the company's quarterly reports on Form 10-Q and Part 1 Item 1A, Risk Factors of NextNav's 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. Following our prepared remarks, the company will host an operator-led question-and-answer session. In addition, at the conclusion of today's call, a replay of our discussion will be posted to the company's Investor Relations website. I'd now like to turn the call over to Ms. Mariam Sorond, Chief Executive Officer of NextNav. Please go ahead.

Thank you, Erica. Good afternoon, and thank you for joining us. On the call today, I will provide an update on the business, including the ongoing process surrounding our filing with the SEC as well as other strategic operating highlights. I will then hand things over to Chris to review our financials. It was another busy quarter for NextNav as we continue to push forward towards our strategic vision. We are seeing good momentum in the business and making tangible progress. Notably, this week, the FCC issued a public notice seeking comments on NextNav's petition for rulemaking. This action is the standard first step in a longer term FCC rulemaking process. While I will discuss the details of the notice and next steps in a moment, we appreciate the FCC's prompt public notice as this is an important step in delivering an innovative spectrum solution in the lower 900 megahertz band. Our vision enables NextGen terrestrial 3D PNT as a complement and backup to GPS with a 5G solution that is easily integrated into the existing ecosystem and enables additional spectrum for 5G broadband. I've had the opportunity to speak with many of you since we introduced this vision and I'm excited by the strong investor sentiment and confidence in what we have presented. This is evident not only in our share price over the past several weeks, but also in the recent exercise of additional warrants. While Chris will provide greater detail, in Q2, 9.7 million of warrants were exchanged for an aggregate of $21 million in cash. This action further validates the market's confidence in our business and our go forward strategy. As a reminder, we are focused on developing a complement and backup to GPS with additional spectrum for broadband services. Leveraging the spectrum we have acquired,…

Thanks, Mariam, and good afternoon, everyone. NextNav's revenue in the second quarter was $1.1 million a $0.3 million increase from $0.8 million in the prior year period. For the first half of 2024, revenue was $2.1 million, a $0.5 million increase from $1.6 million in 2023. The increase in both the three and six month periods was driven by an increase in service revenue from technology and services contracts with commercial customers, including in support of government opportunities. Staying on the topic of revenue, as Mariam noted, we were recently awarded a $1.9 million purchase order from the Department of Transportation. This one year order started in July 2024, and we anticipate seeing the revenue impact from this beginning in third quarter of this year. The government has the option to extend this order by up to six months under the current terms and has the option to extend the order for up to two years to allow for additional testing. Operating expenses for the Q2 were $16.4 million up from approximately $15.8 million in the same period last year. Operating expenses included $1.3 million in depreciation and amortization and $3.7 million in equity compensation compared to $1.2 million in depreciation and amortization and $4.4 million in equity compensation in the second quarter of 2023. For the first half of the year, operating expenses were $33.6 million compared to $30.6 million in 2023. Excluding stock-based compensation expense in depreciation and amortization, operating expenses were $23.1 million in the first half of 2024 and $20.1 million in the first half of 2023. Net loss for the second quarter was $24.4 million, which included a $6.6 million loss associated with the change in the fair value of warrants, net of the gain associated with the change in liability associated with the Telesaurus…

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. Your first question comes from the line of Matthew Miles with B. Riley Securities. Please go ahead.

Good afternoon. Thanks for taking my question. I was just wondering if you can give some color on where NextNav is at regarding the assignment of the additional 4 megahertz of spectrum licenses acquired from Telesaurus and Skybridge. Has the FCC made a decision yet to approve, deny, or defer this assignment?

Hi, yes. Thanks for the question. So the FCC did put the PN out on the application, and that was released through an automated process. And we are actually at this point waiting for the FCC to make a decision on it. But we have not received any further updates so far.

All right. That was helpful. That was it for me. Thank you.

And your next question comes from the line of [indiscernible]. Please go ahead.

Hey, everybody. Thanks for taking my question. Regarding yesterday's filing, in the petition, there's a list of unlicensed users and users that might pose maybe an up objection to the plan. I mean, are you anticipating working, what are the plans? So let's say, like the amateur radio or the license as far as maybe creating an obstacle for the company? I mean, are you going -- I know that according to the file, you're going to work with this plan. I mean, how does that work? Do you guys have a different part of the, like, lower sideband or upper sideband section you're going to have to share or make is it encrypted? I mean, maybe give a little bit of color on how that's going to work out?

Yes. Thanks. Hi, Jamie. Actually, we're not going to speculate on comments with respect to the PM, right? We're going to wait to see the comments. We're going to read them really carefully, and we're going to reply to all the comments. That's our plan right now. We intend to and we've done reach outs. We intend to work with all the parties and the stakeholders where it's reasonable and appropriate to work with them. And we look forward to the dialogue and working with them through the process.

All right. I think my next question now the DOT con project. What's the time frame on that? It says, it's might be a while, but also what are the metrics or the benchmarks, the DOT is sort of looking at?

Well, they selected first of all, they've awarded about nine in the testing phase. They have a plan out on what the phases are going to be. I think that, Chris, maybe you can share some of the details. If not we can get you that offline on what exactly their phases are.

Yes, Jamie, we'll come back to you on some of that kind of inside the contract detail.

Okay. All right. Yes. That's all the questions I have. Thanks for taking my question.

Thank you. [Operator Instructions]. And there are no further questions at this time. I would like to turn it back to Mariam Sorond for closing remarks.

Thank you all for joining us today. As you can see, the entire NextNav team is hard at work executing against our vision. We believe our unique vision will provide an innovative spectrum solution in the lower 900 megahertz band. We're excited for what lies ahead, and we'll continue to provide an update on our progress as we move forward. Thank you all.

Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.