NextNav (NN) Risk Analysis

Through our wholly owned affiliate, Progeny LMS, LLC, we hold 354 licenses issued by the FCC to use radio spectrum for location services within the 902-928 MHz band, identified by the FCC as the Multilateration Location and Monitoring ("M-LMS") Service licenses, including 128 LMS licenses that we acquired from a third party in 2025.  When the FCC created the M-LMS service, it used an auction process to issue three M-LMS licenses in each of 176 Economic Areas ("EAs") in the U.S. Progeny's 354 M-LMS licenses provide coverage of most of the U.S. and the vast majority of populated areas within the U.S., but the amount of spectrum authorized by its licenses varies by location.  Progeny holds all three M-LMS licenses authorizing the use of 12 megahertz of spectrum in 81 EAs, it holds two M-LMS licenses authorizing the use of 8 megahertz of spectrum in another 32 EAs, and it holds one M-LMS license authorizing the use of 4 megahertz of spectrum in another 47 EAs.  The remaining M-LMS licenses are all held by the FCC in reserve. Progeny's M-LMS spectrum licenses are subject to rules that were adopted by the FCC more than thirty years ago and do not reflect (and are often incompatible with) current technology in the fields of radio signal modulation (such as 5G transmissions) and wireless PNT services. Certain of our location services depend on our ability to use portions of the radio spectrum licensed by the?FCC in a manner that is inconsistent with the rules applicable to M-LMS services in this spectrum. We have therefore filed a petition with the FCC seeking to update the rules and optimize the 902-928 MHz spectrum band to enable 5G operations. Our petition has been opposed by third parties that use portions of the 902-928 MHz band for other purposes, many of them on a secondary, subordinate basis to our licensed operations. We continue to work with the FCC and interested third parties in seeking approval for our Petition so we can deploy next-generation PNT services using state-of-the-art 5G technology in that band. The FCC has initiated interagency review of a draft notice of proposed rulemaking (NPRM) to promote the development of positioning, navigation, and timing technologies and solutions. Such FCC action is subject to interagency review and coordination with other federal entities, including those responsible for national security, public safety, spectrum management, and other governmental interests. The interagency review process can be unpredictable and there is no assurance that the NPRM will be consistent with our petition or that FCC will adopt the NPRM, issue a report and order, or do so within a timeframe, scope, or structure that supports our business objectives. The FCC regulatory process is subject to other legal, technical, political, and policy considerations beyond our control. Our petition continues to face opposition from third parties who may seek to delay, modify, or prevent FCC action through the regulatory process or by advocating for legislative or executive branch actions that could stall, condition, or halt FCC consideration of matters relevant to our strategy. For example, the U.S. House Committee on Appropriations recently approved an amendment to federal budget legislation that, if signed into law, would affect the FCC's authority, discretion, or resources to take certain regulatory actions, including actions related to spectrum policy and rulemaking processes on which our plans depend. Such legislative action may be modified, rejected, time-limited, or enacted, and its outcome and impact remains uncertain. Any of these factors could result in the FCC not issuing an NPRM, not adopting a report and order or adopting rules that do not permit the optimization or use of the lower 900 MHz band on terms that are commercially practicable for us.  If we are unable to obtain the necessary FCC approvals on a timely basis, or at all, our ability to execute our business strategy, deploy planned services, attract partners or customers, and generate anticipated revenues would be materially and adversely affected and could result in a significant decline in the market price of our common stock. In addition, if the FCC does reconfigure the spectrum, it may decide to use an auction as part of the process of distributing the spectrum licenses it holds in reserve. We may be required to participate and compete with other bidders in such an auction, with no certainty of winning. If we are unable to secure additional M-LMS licenses or suitable alternative spectrum in a different frequency band, our ability to expand certain of our services nationwide may be negatively impacted, which may have a negative impact on our business, financial condition and results of operations.