NN 10-K & 10-Q changes, risk factors and insider trading

We have incurred significant losses since inception. For the years ended December 31, 2024,2025, 20232024 and 2022,2023, we incurred net losses of $101.9$189.3 million, $71.7$101.9 million and $40.1$71.7 million, respectively. We do not expect to be profitable or cash flow positive in the near future. Furthermore, any expansion of our services, servicesincluding the deployment of our NextGen technology, will result in increased operating costs. As a result, our losses are expected to continuecontinue, and we may not achieve profitability whenas expected,anticipated, or at all. Even if we do, we may not be able to maintain or increase profitability.

We expect our operating expenses to increase over the next several years as we scale our operations and increase research and development efforts relating to new offerings and technologies. These efforts may be more costly than we expect and may not result in meaningful revenue or growth in our business. Any failure to initiate and increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving or maintaining profitability or positive cash flow. If our future growth and operating performance fail to meet investor or analyst expectations, or if we have future negative cash flow or losses resulting from expanding our operations, this could have a material adverse effect on our business, financial condition and results of operations.

We believe that our cash and cash equivalents and marketable securities as of December 31, 20242025 will be sufficient to meet our working capital and capital expenditure needs, including all contractual commitments, beyond  the next 12 months from the date of filing this Annual Report on Form 10-K. We expect to meet longer term expected future cash requirements and obligations through a combination of cash flows from operations and issuance of equity securities or debt offerings.securities. However, this determinationexpectation is based upon internal financial projections of operating cash flows and is subject to changes in market and business conditions. Our ability to obtainraise debtadditional financing and/or issue equity securitiescapital on acceptable terms, or at all, will depend on, among other things, our financial performance and credit ratings, general economic factors, including inflation and prevailing interest rates, the condition of the credit and capital markets and other events, some of which may be beyond our control. If we need additional capital and cannot raise it on acceptable terms, or at all, our business, financial conditions, and results of operations will be materially impacted. If we raise capital through the sale of equity or debt securities, our current investors may be materially diluted.

We have been focused on developing the next generation of complementary and backup PNT services and in order for us to be profitable, our services require substantial adoption across disparate industries,industries and may further depend on the deployment of our NextGen technology. Our existing services have been adopted for E911 and public safety customers, but we have not achieved broad adoption across all industries that may be necessary to achieve significant revenue growth or profitability. Risks and challenges we have faced or expect to face in connection with commercially marketing our services include our ability to:

The Indentureindenture governing our senior5% securedSenior notesSecured Convertible Notes due in 2028 (the “2028 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.

Subject to certain exceptions and qualifications, the Indenture Agreementindenture governing the senior2028 secured notes that we issued in 2023Notes (the “2028 Indenture”) restricts our ability to, among other things, (i) incur indebtedness, other than certain forms of permitted debt, (ii) issue any preferred equity interests, (iii) create or permit to exist any lien on any property, other than certain limited forms of permitted encumbrances, (iv) merge, amalgamate, consolidate or sell all or substantially all assets, (v) make or hold any investment, other than certain forms of permitted investments, (vi) consummate certain asset sales, (vii) pay any dividend or other distribution with respect to any of our capital stock, (viii) make any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any of our capital stock or any option, warrant or other right to acquire any such capital stock, or (ix) dispose or transfer intellectual property that is material to our business.business or (x) effect any transaction that would result in an adjustment to the conversion price of the 2028 Notes to an amount less than $2.05 per share of common stock. These restrictions, and others set forth in the 2028 Indenture as discussed below, may make it difficult to successfully execute our business strategy or effectively compete with others that are not similarly restricted.

The 2028 Indenture also provides that a number of events will constitute an event of default, including, among other things, (i) a failure to pay interest or any other amount due on the notes2028 for 30 days,Notes, (ii) a failure to pay the principal of the notes2028 Notes when due at maturity, upon any required repurchase, upon declaration of acceleration or otherwise, (iii) a failure to comply with our obligations to convert the 2028 Notes in accordance with the 2028 Indenture upon exercise of a holder’s conversion right within five business days, (iv) any breach of our covenants with respect to consummating restricted consolidations, mergers, or other sale transactions, (ivv) the failure to comply with any of our other agreements contained in the 2028 Indenture or the notes2028 for 60 days after notice from the trustee or certain holders, (v) the failure by certain of our subsidiaries to guarantee the notes pursuant to their obligations,Notes (vi) an invalid or unperfected lien on any material portion of the collateral, subject to certain exceptions, (vii) a default or other failure by us to make required payments under our other indebtedness for money borrowed in excess of $1 million in the aggregate, (viii)  a failure by us to pay final legal, arbitral or other judgments aggregating $1  million or more, and (ixvii) certain events of liquidation, reorganization, bankruptcy or insolvency.

If an event of default occurs and is continuing, additional interest will accrue on the notes2028 Notes at a rate of 2% per annum of the principal amount of the notes2028 Notes outstanding as of the occurrence of the event of default. We will also be required to pay additional interest of up to 0.50% per annum if (x) we fail to timely make certain required filings with the SEC, until such filings are made, or (y) the notes2028 Notes are not otherwise freely tradeable under Rule 144 under the Securities Act. If we fail to pay interest on the notes2028 Notes for 30 days or the principal of the notes2028 Notes when due, the trustee has the right to declare all the notes2028 Notes to be due and payable immediately. In the case of certain events of bankruptcy, all outstanding notes2028 Notes will become due and payable immediately. Any such events of default or other acceleration of, or any increase in the amounts otherwise payable on, our debt could have a material adverse effect on our liquidity, particularly if we are unable to negotiate mutually acceptable terms with the holders of the notes2028 Notes or if alternate funding is not available to us. Furthermore, if we are unable to repay the notes2028 Notes upon an acceleration or otherwise, we could be forced into bankruptcy or liquidation.

In addition, in the event of a changeFundamental ofChange control,(as defined in the 2028 Indenture), each holder has the right, at such holder’s option and subject to the limitations set forth in the 2028 Indenture, to require us to repurchase for cash all or any portion of such holder’s notes2028 atNotes ain pricean amount equal to 101%the greater of (i) the aggregatethen outstanding principal amount withof 2028 Notes held, plus all accrued and unpaid interest.interest to such date and (ii) the consideration each holder of 2028 Notes would have received if such holder had converted the 2028 Notes into our common stock immediately prior to such Fundamental Change.

We do not sell our Pinnacle z-axis solutions directly to end users. Instead, we provide location technology that integrates with devices and applications that are created or distributed by third parties. Accordingly, our future growth significantly depends on third parties choosing to incorporate our technology into smartphone devices, applications and other new device types and markets that utilize location. We also depend on our customers, resellers and licensees to develop products and services with value-added features to drive sales and demand. Because GPS has been viewed in the marketplace as a reliable geolocation service provided for free to end users, our customers may not see a business need to integrate our solutions into our devices and applications. Despite efforts to educate customers about the need for z-axis geolocation services, there can be no assurance that such efforts will be successful and as a result, a market for our solutions may not be created.created or result in meaningful revenue.

Depending on whether the FCC grants approval of our petition, weWe 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.

We are currently evolving our core technology from one reliant on a transmission that was designed to be technically compatible with GPS and GNSS receivers to one that is being designed to be technically compatible with the 5G NR ecosystem. This carries risks related to the technical performance of this transmission and the availability of equipment in the 5G NR ecosystem compatible with our spectrum and operations. If the technical performance of the 5G NR transmission is not similar to the technical performance of our legacy technologies, then the market for our services may be diminished. We must also secure approval from the FCC for this modified use of our licensed spectrum. We have submitted a petition to the FCC seeking this authority, which has been opposed by certain other users in the lower 900 MHz band. The petition remains pending before the FCC. Finally,Further, while we intend our signal to be compatible with the 5G NR ecosystem, we may not be successful at integrating our service into commercial 5G NR transmitters, core network, receivers or other system components, which would significantly reduce the market for our services.

If there are significant delays in our evolution to 5G NR-compatible technologies, including technology, ecosystem, standardization or regulatoryother delays, our ability to offer our services to customers including the U.S. Federal Government and commercial entities will be impacted. If any or all such delays occur, our business may be harmed.

Our NextGen technology plans are largely dependent upon enteringour ability to enter into strategic partnerships with wireless operators to utilize our spectrum licenses for 5G NR broadband services in the manner set forth in our petition before the FCC.Federal IfCommunications weCommission are("FCC"). unsuccessfulThe inprocess enteringof intonegotiating partnerships,and wesecuring maythese notpartnerships beis ablecomplex, time-consuming, and subject to deployfactors beyond our control, including the strategic priorities of potential partners, competitive bidding for spectrum usage, and operategeneral oureconomic 5G NR broadband services, or we may not be able to do so profitably.conditions.

We entered into a services agreement with AT&T that was to expire in October 2022, with no renewal terms. Thereafter, we amended the agreement by extending it until January 7, 2024,2024 and October 24, 2025, and the agreement has been further extended to October 24, 2025.2028. This AT&T agreement, as amended, continues our relationship in which AT&T purchases, markets and sells our services to its FirstNet® subscribers. We have no contractual right to require AT&T to continue its relationship with us, and AT&T may decide not to renew our services contract prior to the end of the extended term. If we are not able to secure a further renewal or extension of our services agreement with AT&T, our ability to sell or market products to FirstNet® and other public safety customers may be impacted, and our business, financial and results of operations may  be materially and adversely harmed.

In order for our customers to be able to utilize our Pinnacle service in smartphones, we and our customers must have access to barometric pressure measurements and 2D location information, both of which are made available by APIs provided by GoogleGoogle, Apple and Apple.other device/OS vendors. If either Google or Apple or others meaningfully change their terms of service related to the use of this measurement and location data, choose not to provide this data to us or our customers, or choose not to incorporate location sensors in their devices, our ability to offer our Pinnacle service to our customers on these platforms will likely be impacted.impacted and affect our revenues.

Our TerraPoiNT services have not been implemented for broad commercial use, and thereThere is no guarantee that TerraPoiNTour PNT services will be widely adopted. Key manufacturers of devices and chipsets may be unwilling to integrate TerraPoiNT processing capabilities and required components into their devices. Further, even if we are able to secure agreements with these leading manufacturers, the terms under which such integrations may occur may not be favorable to us. Further, there is no certainty that one of our competitors will not develop and commercialize a different solution in the meantime. In addition, our ability to sell TerraPoiNTour serviceservices may be impacted by political or technological preferences. If we are unable to sell TerraPoiNTour PNT services commercially, to additional government users, or to an international market, thisour financial results will havebe amaterially negativeadversely impact on our business.impacted.

Our business depends on the use of location by a wide range of applications, including public safety and E911 applications, and which may include mobile marketing applications in the future.applications. Privacy concerns relating to location data, generally, and our technology could damage our reputation and deter current and potential users from using our products and applications.

Although we have implemented certain systems, processes, and safeguards intended to protect our information technology systems and data from such threats and mitigate risks to our systems and data, we cannot be certain that threat actors will not have a material impact on our systems or services in the future. Our safeguards intended to prevent or mitigate certain threats may not be sufficient to protect our information technology systems and data due to the developing sophistication and means of attack in the threat landscape. Recent developments in the threat landscape include an increased number of cyber extortion and ransomware attacks, with increases in the amount of ransom demands and the sophistication and variety of ransomware techniques and methodology. Additionally, our third-party vendors or business partners’ information technology systems may be vulnerable to similar threats and our business could be affected by those or similar third-party relationships. The risk of harm to our business caused by security incidents may also increase as we expand our product and service offerings and as we enter into new markets. The rise in the use and sophistication of artificial intelligence systems may also increase the risk and severity of cyber incidents. Implementing, maintaining, and updating security safeguards requires substantial resources now and will likely be an increasing and substantial cost in the future.

Any event that leads to unauthorized access, use or disclosure of personal information could disrupt our business, harm our reputation, compel us to comply with applicable federal and/or state breach notification laws and foreign law equivalents, subject us to time-consuming, distracting and expensive litigation, regulatory investigation and oversight, mandatory corrective action, require us to verify the correctness of database contents, or otherwise subject us to liability under laws, regulations and contractual obligations, including those that protect the privacy and security of personal information. Such statutory and contractual disclosures are costly, could lead to negative publicity, may cause our customers or the public to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach.  Compliance with these obligations could result in increased costs to us, as well as significant legal and financial exposure.

We depend on the availability of personnel with the requisite level of technical expertise in the telecommunications industry.expertise.

Our ability to develop and maintain our solutions and execute our business plan is dependent on the availability of technical engineering, information technology, service delivery and monitoring, product development, sales, management, finance and other key personnel within our geographic location.personnel. The specialized engineers and other personnel required for our growth are in high demand by companies with greater resources, so we may have difficulty hiring and retaining critical personnel to develop and operate our services, which will have a negative impact on our ability to grow and achieve widespread customer and user acceptance.

Our results could be adversely impacted as a result ofby increased inflation and supply chain pressure impacting our or our vendors’ expenses and availability of resources and components.

The financial markets and the global economy may be adversely affected by current or anticipated impact of military conflict, including the current conflict between Russia and Ukraine and related economic and other retaliatory measures taken by the United States, European Union and others, terrorism or other geopolitical events, including as a result of trade tensions between the U.S. and China. Sanctions imposed by the U.S. and other countries in response to conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. Deteriorating economic conditions, financial uncertainty or political disruption, including any international trade disputes, changes in laws or policies governing the terms of international trade, or tariffs or taxes on imports from other countries may  increase the likelihood of supply chain interruptions, cybersecurity incidents, disruptions to our information systems, foreign currency fluctuations, or other risks. For example, in February 2025, the current Administration has issued threea number of Executive Orders imposing tariffs of 25% on certain goods imported from Canada and Mexico and an additional 10% tariff on certain goods imported from China (including Hong Kong). The 10% tariff on imports from China took effect on February 4, 2025, while thehigher tariffs on imports from Canada and Mexico took effect on March 4, 2025, after having been suspended, as did a furthernumber 10%of tariffthe onUnited ChineseStates’ imports.trading partners. Historically, tariffs have led to increased trade and political tensions and in some cases economic disruption. In response to the recent tariffs, other countries have implemented retaliatory tariffs on U.S. goods. Political tensions as a result of trade policies could reduce investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. In challenging and uncertain economic environments such as the current one, it is not possible to predict  whether or when such circumstances may improve or worsen, or what impact, if any, such circumstances, such as additional sanctions, tariffs, embargoes, regional instability, changes in laws or governmental administrations, geopolitical shifts and any related adverse effects, could have on the global economy or on our business, financial condition and results of operations, as well as those of our customers, partners and third-party service providers.

The Asset Purchase Agreement (as defined in Note 3 in the notes to the consolidated financial statements below) and anyAny strategic mergers, acquisitions and divestitures we may make in the future present significant risks and uncertainties that could adversely affect our business, financial condition, results of operations, cash flows, liquidity and equity, which include, without limitation:

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 toProgeny’s LMS services in this spectrum. Through our wholly owned affiliate, Progeny LMS, LLC, we hold licenses issued by the FCC to use radio spectrum for location services within the 902-928 MHz band, identified by the FCC as LMS licenses. These spectrum licenses are subject to rules that were adopted by the FCC nearlymore 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 LMS services in this spectrum. We have therefore filed a petition with the FCC seeking to update the rules and rechannelize our licensed use ofoptimize the 902-928 MHz spectrum.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 to update the rules for the 902-928 MHz spectrumPetition so we can deploy next-generation PNT services using state-of-the-art 5G technology in that band.

Our current LMS licenses provide coverage of most areas of the U.S. and the vast majority of populated areas within the U.S. Our licenses, however, even when combined with the assignment of licenses pursuant to the Asset Purchase Agreement, do not provide nationwide coverage, which we are likely to need to provide certain of our location services on a nationwide basis. Therefore, the petition we filed at the FCC requests reconfiguration of the spectrum licenses as well as additional spectrum currently in FCC inventory in order to achieve nationwide coverage or to serve every major city. If the FCC does reconfigure the spectrum, and it regains auction authority, it may decide to use an auction as part of the process of distributing the licenses.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 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.

One of the significant benefits of converting our spectrum transmissions, including those with respect to the spectrum we are seeking to acquire pursuant to the Asset Purchase Agreement (as defined in Note 3 in the notes to the consolidated financial statements below) dated March 7, 2024,transmissions to a 5G NR platform would be a substantial increase in the data transmission capacity of our network, thus facilitating the carriage of non-PNT-related two-way voice and data services alongside our core PNT data transmission. The FCC’s rules already permit us to use our currentcurrently 8 MHz oflicensed LMS spectrum for the carriage of two-way voice and data services, but these communications must be related to our PNT services and are not permitted to be interconnected in real time with the public switched network unless a store and forward technology is used. Therefore, to maximize the benefit of a conversion to a 5G NR platform, assuming the conversion is successful, we have requested flexibility from the FCC permitting us to use our spectrum and the spectrum we are seeking to acquire for additional non-PNT-related services in addition to our PNT offerings. Our proposal has faced substantial opposition from other users of the 902-928 MHz band, and there is no certainty that the FCC will provide us this flexibility nor is there certainty with respect to the extent of the flexibility that is provided.

Simultaneously, demand for wireless data services continues to grow. The backbone of wireless data services, electromagnetic spectrum, is a finite resource. Our spectrum licenses, which lie in the Lower 900 MHz band, are referred to as “low-band spectrum.” There is a finite amount of low-band spectrum available, and low-band spectrum has favorable coverage characteristics compared to higher frequencies, including the ability to provide services indoors and over 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. The transition to 5G NR for our PNT services will provide a technical capability to support broadband data services, which, subject to appropriate regulatory approvals, maywould allow the spectrum to be utilizedused to help meet the continued, growing demand for wireless data capacity.

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, software license costs, including cloud hosting costs, and professional services related to the maintenance of the equipment at each leased site. Our COGS may increasefluctuate forfrom the foreseeable future as we continueperiod to investperiod based on changes in ouroperating PNT technologies in domestic U.S. and international markets.scale.

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, and software license costs, including cloud hosting 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 productsproducts, including our NextGen platform.

Other income (expense) consists of miscellaneous non-operating items, such as change in fair value of warrantswarrants, andchange Assetin Purchasefair Agreementvalue of derivative liability, debt extinguishment loss, equity method income (loss), and foreign currency gains (losses).

Revenue increaseddecreased by $1.8$1.1 million, or 47%,19%, to $4.6 million for the year ended December 31, 2025 from $5.7 million for the year ended December 31, 2024 from $3.9 million for the year ended December 31, 2023.2024. The increasedecrease was driven by an increase inlower service revenue from technology and services contracts with government and commercial customers. For the year ended December 31, 2025, two customers accounted for 70% and 17% of total revenue. For the year ended December 31, 2024, three customers accounted for 57%, 18% and 11% of total revenue. For the year ended December 31, 2023, two customers accounted for 75% and 10% of total revenue. Accounts receivable as of December 31, 20242025 and December 31, 20232024 were $3.3$2.3 million and $2.3$3.3 million, respectively; the deferred revenue balance as of December 31, 20242025 and December 31, 20232024 was $0.5 million and $0.3 million.million, respectively.

Research and development expensesCOGS decreased by $3.3$2.2 million, or 17%,21%, to $16.2$8.5 million for the year ended December 31, 20242025 from $19.5$10.8 million for the year ended December 31, 2023.2024. The decrease was primarily driven by a $2.5$0.9 million decrease in stockpayroll-related based compensation,expenses, a $0.7$0.6 million decrease in software license expenses, a $0.4 million decrease in outsidesite consultingrent expenses,expense, a $0.2 million decrease in maintenancenon-recurring andengineering operational cost,services, and a $0.1 million decrease in professionaloutside fee. The decreases were partially offset by a $0.6 million increase in payroll-relatedconsulting expenses.

Selling, generalResearch and administrativedevelopment expenses increased by $3.2$2.7 million, or 11%,17%, to $33.5$19.0 million duringfor the year ended December 31, 20242025 from $30.3$16.2 million infor the year ended December 31, 2023.2024. The increase was primarily driven by a $3.0$2.8 million increase in professionalnon-recurring engineering services, a $3.0$0.3 million increase in payroll-relatedstock-based expenses driven by headcount costs, executivecompensation, and employment separation costs, a $1.0 million increase in outside consulting expenses, a $0.5$0.2 million increase in other operational expenses, and a $0.3 million increase in marketing and recruiting cost.expenses. The increases were partially offset by a $3.8$0.6 million decrease in stock-basedsoftware compensationlicense and acloud $0.8 million decrease in directors’ and officers’ insurance.expenses.

Depreciation and amortization expenses increased by $0.4$2.5 million, or 9%,48%, to $7.8 million during the year ended December 31, 2025 from $5.2 million during the year ended December 31, 2024 from $4.8 million during the year ended December 31, 2023.2024. The increase in depreciation and amortization expense is primarily attributabledriven by accelerated depreciation related to placing theretired network assets in service since the third quarter of 2023.assets.

Interest expense, net of interest income, increased by $3.0 million, or 32%, to $12.4 million for the year ended December 31, 20242025, wascompared to $9.4 million. Interest expense, net of interest income,million for the year ended December 31, 2023 was $3.7 million.2024. The increase in interest expense was dueprimarily todriven by higher interest and amortization of debt discounts on our senior secured notes issued during the second and third quarters of 2023.expense.

We have incurred net 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 eachthe twelve months ended December 31, 2025 and 2024, we incurred net losses of $189.3 million and $101.9 million, respectively. During the twelve months ended December 31, 20242025, our net cash used in operating and 2023,investing weactivities incurredwas net losses of $101.9$50.7 million andwas $71.7$64.6 million, respectively. During each of the twelve months ended December 31, 2024, our net cash used in operating activities and cash provided by investing activities was $38.0 million wasand $39.5 million, respectively. During the twelve months ended December 31, 2023, our net cash used in operating activities and investing activities was $35.4 million and $1.1 million, respectively. As of December 31, 2024,2025, we had cash and cash equivalents and marketable securities of $80.1$152.1 million and an accumulated deficit of $862.1$1.1 million.billion. We expect to incur additional losses and higher operating expenses for the foreseeable future. Our primary uses of cash are 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.

InOn 2023,March 12, 2025, we issuedentered $70.0into a Note Purchase Agreement to sell to a group of lenders in a private placement (the “Private Placement”) $190.0 million in aggregate principal amount of senior5% securedSenior notesSecured withConvertible aNotes fixeddue interestin rate2028 of 10% to (the lenders“2028 thereto.Notes”) Suchat notespar. The 2028 Notes will mature on DecemberJune 1,30, 20262028 with interest payable in cash semi-annually in arrears on June 1 and December 1 of each year. We may elect,year at our5% soleper discretion,annum. toUpon paythe up to 50%closing of the Private Placement, the Company used a portion of the net proceeds from the Private Placement to redeem all of its $70.0 million senior secured notes that were issued with a fixed interest rate of 10% to a group of lenders during 2023 (the “2026 Notes”), at a redemption price of 101% of the principal amount of the 2026 Notes, plus accrued and unpaid interest on the senior secured notes due with our common stock.interest. Refer to Note 8 to our consolidated financial statements for the twelve months ended December 31, 20242025 included elsewhere in this Annual Report on Form 10-K for more information.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. Spartacus Acquisition Corp. (a Delaware special purpose acquisition company with which we consummated a business combination in 2021) previously elected to avail itself of the extended transition period, and following the consummation of thesuch Business2021 Combination,business combination, we became an emerging growth company (for the period described in the immediately succeeding paragraph) and will continue to take advantage of the benefits of the extended transition period emerging growth company status permits. During the extended transition period, it may be difficult or impossible to compare our financial results with the financial results of another public company that complies with public company effective dates for accounting standard updates because of the potential differences in accounting standards used.

We have incurred significant losses since inception. For the three months ended MarchJune 31,30, 2026 and 2025, we incurred net losses of $10.6$44.4 million and $58.6$121.8 million, respectively. We do not expect to be profitable or cash flow positive in the near future. Furthermore, any expansion of our services, including the deployment of our NextGen technology, will result in increased operating costs. As a result, our losses are expected to continue, and we may not achieve profitability as anticipated, or at all.

We believe that our cash and cash equivalents and marketable securities as of MarchJune 31,30, 2026 will be sufficient to meet our working capital and capital expenditure needs, including all contractual commitments, beyond the next 12 months from the date of filing this Quarterly Report on Form 10-Q. We expect to meet longer term expected future cash requirements and obligations through a combination of cash flows from operations and issuance of equity or debt securities. However, this expectation is based upon internal financial projections of operating cash flows and is subject to changes in market and business conditions. Our ability to raise additional capital on acceptable terms, or at all, will depend on, among other things, our financial performance and credit ratings, general economic factors, including inflation and prevailing interest rates, the condition of the credit and capital markets and other events, some of which may be beyond our control. If we need additional capital and cannot raise it on acceptable terms, or at all, our business, financial conditions, and results of operations will be materially impacted. If we raise capital through the sale of equity or debt securities, our current investors may be materially diluted.

Our services are built on a terrestrial-based technical infrastructure, which is vulnerable to damage or interruption from technology failures, power surges or outages, natural disasters (such as landslides, tornados, earthquakes, hurricanes and floods), fires, human error, terrorism, war, civil unrest, acts of god, pandemics, epidemics, intentional wrongdoing, cyber-security incidents, power losses, telecommunications failures or similar events. As a geolocation services provider, there is an increased risk that our technological infrastructure may be targeted in connection with terrorism or cyberattacks, either as a primary target, or as a means of facilitating additional attacks on other targets.

Our amended and restated certificate of incorporation authorizes the issuance of up to 500,000,000 shares of common stock, of which, as of MarchJune 31,30, 2026, 136,059,569166,997,792 shares were outstanding, 12,514,60611,996,742 shares were reserved for future issuance under our stock incentive plan and 52,265,19521,979,899 shares were issuable upon the exercise of warrants and conversion of debt.warrants. As a result, we have a large number of shares of common stock that are authorized for issuance and are not outstanding or otherwise reserved and could be issued at the discretion of our board of directors (our “Board”) or through exercise of options and warrants or conversion of debt.warrants. We expect to seek additional financing in the future in order to fund our operations, and if we issue additional shares of common stock or securities convertible into common stock, our existing stockholders will be diluted. Our Board may also choose to issue shares of our common stock or securities convertible into or exercisable for our common stock to acquire assets, corporations or companies, for compensation to employees, officers, directors, consultants and advisors, to fund capital expenditures and to enter into strategic partnerships. Additionally, shares of common stock could be issued for anti-takeover purposes or to delay or prevent changes in control or management of the Company. Our Board may determine to issue shares of our common stock on terms that our stockholders do not believe enhance stockholder value, or that may ultimately have an adverse (including a material adverse) effect on our business or the trading price of our common stock. Further, the issuance of any such shares may cause further dilution to the ownership interest of our current stockholders, reduce the book value per share of our common stock and may contribute to a reduction in the market price for our common stock.

Certain of our stockholders own a significant percentage of our outstanding capital stock. As of MarchJune 31,30, 2026, our holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 40%38% of our outstanding shares of common stock. Accordingly, certain stockholders may have significant influence over our affairs due to their substantial stock  ownership and, in one case, a position on our Board. For example, these stockholders may be able to control or influence elections of directors, amendments of our organizational documents, or the approval of any merger, sale of assets or our business, or other major corporate transaction. The concentrated ownership of our common stock may also cause additional volatility as fewer of our shares may be traded on a daily basis. Furthermore, any significant sale of common stock by any of these holders could have an adverse impact on the trading price of our common stock. This concentration of ownership may prevent or discourage unsolicited acquisition proposals or offers for our common stock that some of our stockholders may believe is in their best interest.

The continued operation and expansion of our business will require substantial funding. We have paid no cash dividends on any of our capital stock to date and we currently intend to retain our available cash to fund the development and growth of our business. Any determination to pay dividends in the future will be at the discretion of our Board and will depend upon our results of operations, financial condition, contractual restrictions (such as those of the 2028 Indenture),restrictions, restrictions imposed by applicable law and other factors our Board deems relevant. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any return to stockholders will therefore be limited to the appreciation of their stock, which may never occur.

We have a significant number of outstanding warrants for the purchase of common stock. Outstanding warrants to purchase an aggregate of 18,749,9603,694,813 shares of common stock became exercisable on November 27, 2021 in accordance with the terms of the warrant agreement governing those securities. These warrants consist of 14,715,169 public warrants and 4,034,790 private placement warrants,warrants related to the initial public offering and financing of Spartacus Acquisition Corp. (a Delaware special purpose acquisition company with which we consummated a business combination in 2021). The 4,034,790These private placement warrants have been registered pursuant to an effective registration statement. Each warrant entitles its holder to purchase one share of common stock at an exercise price of $11.50 per share and will expire at 5:00 p.m., New York time, on October 28, 2026, or earlier upon redemption of our common stock or our liquidation. To the extent warrants are exercised, additional shares of common stock will be issued, which will result in dilution to our then existing stockholders and increase the number of shares eligible for resale in the public market.

Moreover, in conjunction with the issuance of our senior secured notes in 2023 (Refer to Note 8 to our condensed consolidated financial statements for the threesix months ended MarchJune 31,30, 2026 included elsewhere in this Quarterly Report on Form 10-Q for more information), we issued an aggregate of 25,925,927 warrants (the “2023 Debt Warrants”) at an exercise price of $2.16 to purchase shares of our common stock to certain of the purchasers thereof. The 2023 Debt Warrants will expire at 5:00 p.m., New York time, on June 1, 2027. As of MarchJune 31,30, 2026, 10,588,84710,485,086 2023 Debt Warrants were outstanding.

Additionally, in conjunction with the issuance of the 2028 Notes in 2025 (Refer to Note 8 to our condensed consolidated financial statements for the three months ended MarchJune 31,30, 2026 included elsewhere in this Quarterly Report on Form 10-Q for more information), we issued 7,800,000 warrants (the “2025 Debt Warrants” and, together with the 2023 Debt Warrants, the “Debt Warrants”) with exercise prices ranging from $12.56 to $20.00 per share to certain of the purchasers thereof. The 2025 Debt Warrants will expire at 5:00 p.m., New York time, on December 31, 2028. As of MarchJune 31,30, 2026, 7,800,000 2025 Debt Warrants were outstanding.

Our complementary PNT solutions are built on our asset base of FCC licenses that cover 12 MHz of low-band spectrum available for use. This spectrum consists of a contiguous 8 MHz block of 900 MHz spectrum covering over 90% of the U.S. population and an additional 4 MHz of complementary spectrum covering part of the U.S. population that was transferred to us in 2025 as a result of a transaction with Telesaurus and Skybridge Spectrum Foundation. That transaction also gave us potential rights to an additional 2 MHz of related spectrum covered by terminated Skybridge Spectrum Foundation licenses. These licenses are subject to a Skybridge and Telesaurus petition for reconsideration seeking reinstatement of these licenses. For more information, refer to Note 5 to our condensed consolidated financial statements for the three months ended MarchJune 31,30, 2026 included in this Quarterly Report on Form 10-Q. We are evolving our PNT solutions to use 5G New Radio (“5G NR”) positioning reference signals (“PRS”), under the 3GPP global standard, to determine location and timing - a platform we refer to as NextGen. We believe the evolution of our existing technologies and services to a 5G NR PRS capability will improve the efficiency, flexibility, and scale of our operations. 5G NR technologies drive enhanced network performance, capacity, and efficiency across multiple industry verticals. 5G NR enables low-latency, high-throughput connectivity and also improves spectral efficiency, which allows operators to increase returns on investment in licensed spectrum and, with respect to our technology, to improve both the density and availability of PNT signals. 5G NR can also support many different applications, including ultra-reliable low-latency communications (URLLC), enhanced mobile broadband (eMBB), and massive machine-type communications (mMTC). These capabilities permit 5G NR to support high-performance broadband services as well as emerging use cases in autonomous systems, industrial automation, and the Internet of Things (IoT). As a result, spectrum that can support 5G technologies and services is important to broadband providers and their customers.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Revenue decreased by $0.5$0.1 million, or 35.3%,4.3%, to $1.0$1.2 million for the three months ended MarchJune 31,30, 2026 from $1.5$1.2 million for the three months ended MarchJune 31,30, 2025. The decrease was driven by a decrease in service revenue from technology and services contracts with government and commercial customers. For the three months ended MarchJune 31,30, 2026, one customer accounted for 79%68% of total revenue and another customer accounted for 10%17% of total revenue. For the three months ended MarchJune 31,30, 2025, one customer accounted for 51%67% of total revenue and another customer accounted for 39%15% of total revenue.

COGS decreasedincreased by $0.4approximately million,$20 thousand, or 16.2%,1.0%, to $2.1 million for the three months ended MarchJune 31,30, 2026 from $2.5$2.0 million for the three months ended MarchJune 31,30, 2025. TheThere decreasewere wasno primarilysignificant drivendrivers bycontributing ato $0.2the millionquarter-over-quarter decrease in payroll-related expenses, a $0.1 million decrease in site rent expense, and a $0.1 million decrease in stock-based compensation.change.

Research and development expenses increased by $1.9$0.6 million, or 47.1%,13.2%, to $5.9$5.5 million for the three months ended MarchJune 31,30, 2026 from $4.0$4.8 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by a $0.9$0.2 million increase in payroll-related expenses, a $0.4$0.2 million increase in stock-based compensation, a $0.4$0.1 million increase in non-recurring engineering services, and a $0.1 million increase in outside consulting expenses, and a $0.1 million increase in other operational expenses.

Selling, general and administrative expenses increased by $0.2$2.3 million, or 2.1%,22.7%, to $10.7$12.6 million for the three months ended MarchJune 31,30, 2026 from $10.5$10.2 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by a $0.4$2.0 million increase in stock-based compensation, a $0.4$0.7 million increase in payroll-relatedoutside consulting expenses, and a $0.1 million increase in otherprofessional operational expenses,services, partially offset by a $0.7$0.5 million decrease in professionalpayroll-related services.expenses.

Depreciation and amortization expenses increaseddecreased by $0.1$30 million,thousand, or 5.6%,2.2%, to $1.5$1.3 million for the three months ended MarchJune 31,30, 2026 from $1.5$1.4 million for the three months ended MarchJune 31,30, 2025. The increaseslight decrease was primarily drivendue byto accelerateda lower depreciable asset and amortizable intangible asset base as certain network assets and intangible assets became fully depreciated or amortized, resulting in lower depreciation relatedand toamortization retiredexpense networkduring assets.the period.

Interest expense, net of interest income, increased by $1.2$0.1 million, or 42.9%,2.0%, to $3.9$3.1 million for the three months ended MarchJune 31,30, 2026 from $2.7$3.0 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by higherlower interest and amortization of debt discounts expense.income.

Other incomeexpense was $12.7$10.4 million for the three months ended MarchJune 31,30, 2026 compared with other expense of $38.8$42.9 million for the three months ended MarchJune 31,30, 2025. ThisThe $51.5$32.5 million favorable change was primarily attributable to gainsa from$21.4 changesmillion gain on extinguishment of debt recognized in connection with the conversion of the 2028 Notes, a $5.5 million favorable change in the fair value of derivativewarrants, liabilitiesa $2.2 million favorable change in the currentfair period,value compared to losses inof the priorconversion year,option asderivative wellliability, as theand absence of a$3.3 debtmillion extinguishment loss and non‑cashnon-cash expenses related to warrants issued in connection with the March2028 2025 financing transaction.Notes.

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 threesix months ended MarchJune 31,30, 2026 and 2025, we incurred net losses of $10.6$44.4 million and $58.6$121.8 million, respectively. During the threesix months ended MarchJune 31,30, 2026, our net cash used in operating activities and investing activities was $10.0$28.0 million and $4.2$42.1 million, respectively. During the threesix months ended MarchJune 31,30, 2025, our net cash used in operating activities and provided by investing activities was $12.2$25.7 million and $3.0$75.5 million, respectively. As of MarchJune 31,30, 2026, we had cash and cash equivalents and marketable securities of $143.0$228.8 million and an accumulated deficit of $1.1 billion. 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 MarchJune 31,30, 2026 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.

On March 12, 2025, we entered into a Note Purchase Agreement to sell to a group of lenders in a private placement (the “Private Placement”) $190.0 million in aggregate principal amount of 5% Senior Secured Convertible Notes due in 2028 (the “2028 Notes”) at par. The 2028 Notes willwere scheduled to 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. Upon the closing of the Private Placement, we used a portion of the net proceeds from the Private Placement to redeem all $70.0 million of our senior secured notes that were issued with a fixed interest rate of 10% to a group of lenders during 2023 (the “2026 Notes”), at a redemption price of 101% of the principal amount of the 2026 Notes, plus accrued and unpaid interest. In June 2026, all outstanding 2028 Notes were converted into shares of our common stock, and no principal amount remained outstanding as of June 30, 2026. The conversion eliminated our outstanding debt obligations, reduced future cash interest requirements and further strengthened our balance sheet and liquidity position. Refer to Note 8 to our condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 included elsewhere in this Quarterly Report on Form 10-Q for more information.

Net cash used in operating activities during the threesix months ended MarchJune 31,30, 2026 was $10.0$28.0 million, resulting primarily from a net loss of $10.6$44.4 million adjusted for $5.1a non-cash loss of $19.3 million for change in the fair value of derivative liability, $11.0 million for stock-based compensation, $2.8$5.2 million for amortization of debt discount, $1.5$2.9 million for depreciation and amortization, a $0.1 million equity method investment loss, $0.1 million asset retirement obligation accretion and a net increase in operating liabilities of $4.6$1.4 million. These changes were partially offset by a non-cash gain of $9.2$21.4 million for change inon the fair valueextinguishment of derivativethe liability,2028 Notes, a $2.0 million realized and unrealized gain on marketable securities, and a non-cash gain of $3.4$0.1 million for change in the fair value of warrant liability, and a $1.0 million realized and unrealized gain on marketable securities.liability.

Net cash used in operating activities during the threesix months ended MarchJune 31,30, 2025 was $12.2$25.7 million, resulting primarily from a net loss of $58.6$121.8 million adjusted for non-cash charges of $24.5$55.2 million for change in the fair value of derivative liability, $13.7 million loss on the early extinguishment of the 2026 Notes, $5.8$9.0 million related to warrants issued in connection with 2028 Notes, $4.3$8.0 million for stock-based compensation, $1.7$4.3 million for amortization of debt discount, $1.5non-cash expense of $2.8 million for change in the fair value of warrant liability, $2.8 million for depreciation and amortization and a net decrease in operating assets of $1.2$1.3 million. These changes were partially offset by non-cash gain of $6.0 million for change in the fair value of warrant liability and a $0.3$1.2 million realized and unrealized gain on marketable securities.

Net cash used in investing activities during the threesix months ended MarchJune 31,30, 2026 was $4.2$42.1 million, representing net purchase of marketable securities of $4.0$41.8 million, and cash used for property and equipment, including internal use software,software of $0.1$0.3 million.

Net cash provided by investing activities during the threesix months ended MarchJune 31,30, 2025 was $3.0$75.5 million, representing a net sale and maturity of marketable securities of $3.1$75.2 million partially offset by cash used for property and equipment, including internal use software, of $0.1$0.3 million.

Net cash provided by financing activities during the threesix months ended MarchJune 31,30, 2026 was $0.2$103.3 million, primarily reflecting cash proceeds from the exercise of warrants and common stock options and warrants.options.

Net cash provided by financing activities during the threesix months ended MarchJune 31,30, 2025 was $120.2$120.4 million, primarily reflecting cash proceeds from the issuance of the 2028 Notes, net of repayment of the 2026 Notes (refer to Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information) and cash proceeds from the exercise of common stock options and warrants.

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 2025 Form 10-K and Note 2 to our condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 included elsewhere in this Quarterly Report on Form 10-Q.

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 three and six months ended MarchJune 31,30, 2026 included elsewhere in this Quarterly Report on Form 10-Q.