Nextnav (NN) risk factors, FY2024 10-K

Risks Related to the Business and the Industry

1. 01We have incurred significant losses since inception. We expect to incur losses in the future, may not be able to achieve or maintain profitability, and may need to raise additional capital to maintain our operations in the future
2. 02The developing nature of our technology and product services makes it difficult to evaluate our future prospects and the risks and challenges we may encounter
3. 03There is ongoing volatility in the financial and capital markets. If our access to capital is restricted or associated borrowing costs increase as a result of developments in financial markets, our operations and financial condition could be adversely impacted
4. 04The Indenture governing our senior secured notes contains restrictions and other provisions regarding events of default that may make it more difficult to execute our strategy or to effectively compete, or that could materially and adversely affect our financial position
5. 05Our ability to sell Pinnacle z-axis service may be limited and depends on third-party adoption and market demand
6. 06The majority of our business plan depends on selling services that must be licensed and integrated into our customers’ platforms for sales to end users, and we typically only generate revenue from the arrangements when end users access those third-party platforms and utilize our services
7. 07Depending on whether the FCC grants approval of our petition, we may not be successful in the evolution of our operations to utilize 5G NR signals, which will increase our costs and may increase the challenge of adopting our services, and the time it takes us to evolve our service may differ from our estimates
8. 08We face intense competition in our market, especially from competitors that offer their location services for free, which could make it difficult for us to acquire and retain customers and end users
9. 09We face competition from multiple sources
10. 10Our Pinnacle network infrastructure is dependent on a hosting arrangement with AT&T
11. 11We rely, in part, on AT&T for distribution of our services to FirstNet® customers
12. 12Our services may not continue to be adopted or retained by wireless carriers and device vendors for E911
13. 13Our Pinnacle service in smartphones relies on the availability of barometric pressure measurements and 2D location being made available to us or our customers
14. 14We rely upon Amazon Web Services to operate our cloud platform and any disruption of or interference with our use of Amazon Web Services or the need for additional cloud support would adversely affect our business, results of operations and financial condition
15. 15We rely on a limited number of key vendors for timely supply of components or services for our service offerings. If these vendors experience problems, we could fail to obtain the equipment and services we require to operate our business successfully
16. 16Our services are available within defined network footprints, and if we are not able to deploy new infrastructure, we will not be able to expand our service area
17. 17There is no guarantee that Federal and state government resilient PNT programs or our current commercial opportunities will result in procurements or in the adoption of our services or revenue to us, and the process that may result in such adoption or revenue may be delayed
18. 18Natural or man-made disasters or terrorist attacks could have an adverse effect on our business
19. 19In the event we or one of our third-party providers were to suffer a security breach involving certain personal information, we may have legal obligations (whether pursuant to law or contractual obligation) to notify certain regulatory authorities, affected individuals, customers and/or other entities
20. 20We may become subject to litigation arising out of any security breaches, which may adversely affect our business
21. 21We depend on the availability of personnel with the requisite level of technical expertise in the telecommunications industry
22. 22We depend on key members of our senior management team; our performance could be adversely impacted if they depart and we cannot find suitable replacements
23. 23The failure to successfully obtain, maintain and enforce intellectual property rights and defend against challenges to our intellectual property rights could adversely affect us
24. 24Our results could be adversely impacted as a result of increased inflation and supply chain pressure impacting our or our vendors’ expenses and availability of resources and components
25. 25Global economic conditions may directly or indirectly increase our risks from supply chain, cybersecurity, foreign currency fluctuations, or other factors
26. 26We have acquired and may in the future acquire other businesses, which could require significant management attention, disrupt our business, dilute stockholder value and harm our business, revenue and financial results
27. 27Strategic transactions, including mergers, acquisitions and divestitures, involve significant risks and uncertainties that could adversely affect our business, financial condition, results of operations, cash flows and equity
28. 28Risk of diverting the attention of senior management from our existing operations; and

Risks Related to Legal and Regulatory Matters

1. 29Our business depends on access to radio spectrum to provide certain of our location services and access to such spectrum is not a certainty
2. 30If we are able to convert our signal transmissions to a 5G NR platform, the FCC may not permit us to realize all of the benefits of our 5G NR architecture, including the additional transmission of high-throughput non-PNT-related voice and data alongside our PNT data
3. 31Our FCC licenses authorize the use of radio frequencies that are shared with other radio services, which could result in harmful interference and impairment to our use of our licensed spectrum
4. 32Our LMS licenses are subject to renewal by the FCC and no certainty exists that we will be able to secure ongoing renewals of our licenses
5. 33Many of our LMS licenses are subject to end-of-term build-out requirements maintained by the FCC, and no certainty exists that we will be able to comply with the build-out requirements for all of our licenses
6. 34Our retention and use of our LMS licenses has been the subject of ongoing objections by third parties that could result in the revocation or non-renewal of our LMS licenses
7. 35A portion of our business plan targets government customers, which subjects us to risks, including early termination, audits, investigations, sanctions and penalties
8. 36Our business is subject to a wide variety of additional extensive and evolving government laws and regulations. Failure to comply with such laws and regulations could have a material adverse effect on our business
9. 37We are exposed to risks related to geopolitical and economic factors, laws and regulations and our international business subjects us to numerous political and economic factors, legal requirements, cross-cultural considerations and other risks associated with doing business globally

Risks Related to our Common Stock

1. 38If we issue and sell additional shares of our common stock in the future, our existing stockholders will be diluted and our stock price could fall
2. 39Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval
3. 40We are subject to the reporting requirements of federal securities laws, compliance with which involves significant time, expense and expertise
4. 41We have never paid dividends on our capital stock, and we do not anticipate paying any cash dividends in the foreseeable future
5. 42Warrants to purchase common stock are exercisable, which could increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders
6. 43If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline