Good afternoon, ladies and gentlemen, and welcome to the pdvWireless Q1 Update Conference Call. At this time, all participants have been placed on listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to Natasha Vecchiarelli of pdvWireless. Ma'am, the floor is yours.

Thank you. Good afternoon, and welcome to the pdvWireless first quarter fiscal year 2018 earnings call. Joining me today are Brian McAuley, our Chairman; Morgan O'Brien, our Vice Chairman; John Pescatore, President and CEO; Tim Gray, our CFO; and Rob Schwartz, our Chief Strategy and Development Officer. Earlier this afternoon, we issued a press release announcing our first quarter results, which can be viewed on the Investor Relations section of our Web site. In our remarks today, we will refer to a non-GAAP financial measure, adjusted EBITDA. This measure should not be considered in isolation from, as a substitute for or superior to our financial measures prepared in accordance with GAAP. We have provided a reconciliation to the most directly comparable GAAP financial measure, net loss, in our earnings press release. As a reminder, any matters discussed today that are not historical facts constitute forward-looking statements. Forward-looking statements are based on management's current knowledge and expectations and are subject to certain risks and uncertainties that may cause our actual results to differ materially. For more information, please refer to the risk factors discussed in our SEC filings. The company assumes no obligation to update any forward-looking statements or information. With that, I will turn the call over to John.

Thanks, Natasha. Hello, everyone, and thank you for joining with us today. While our last update was less than two months ago, we've made notable progress and I am especially pleased to be able to say that on Friday, the FCC issued a Notice of Inquiry, or NOI, related to our Joint Petition for Rulemaking. With the NOI, the door is open to explore the potential to expand the efficiency and flexibility of the 900 megahertz band to enable next-generation technologies and services. As you may know, the company's highest priority is to achieve success with our regulatory initiative aimed at modernizing the 900 megahertz spectrum band. That will enable us to provide advanced, innovative and secure solutions to meet the long-term wireless needs of enterprise and critical infrastructure entities. We regard this Notice of Inquiry as a very positive step forward in this initiative and one that we've been actively preparing for. I am happy to state that we’ve reached a meaningful and important milestone on the path to what we believe will be an enterprise focused broadband future. As the regulatory process moves forward, we will keep you appraised of any material events that transpire, and we appreciate your continued support and encouragement as we continue through this process. We are reviewing the NOI in detail and in the coming weeks we will be formulating our response. There are many pertinent questions posed and requests for relevant information. This process provides the formal opportunity to share our compelling case regarding how modernizing the band is squarely in the public interest and is important to provide additional commercial broadband options for enterprises and critical infrastructure entities. Given the current status of the proceeding and in deference to the SEC's deliberative process, we will only provide our public responses, comments…

Thanks, John. Good afternoon, everyone. Once again, the FCC and its release dated August 4, 2017, has stayed true to the course followed over the last few decades, always being willing to reexamine its rules, "to increase access to spectrum, improve spectrum efficiency and expand flexibility." Every wireless consumer in America, and that is virtually every American over the age of 10, benefits from this enlightened policy every day. And every licensee of spectrum managed by the FCC is challenged to meet its responsibility to achieve the same objectives. At PDV, we welcome the challenge laid out in the NOI to think broadly about "how to ensure that the 900 megahertz band is put to its best and highest use to the American public." Thinking broadly about broadband has been our passion for the last 3 years. As the FCC sets forth in the NOI, paramount concern is to achieve the best balance between current incumbency on the 900 megahertz band versus new users and uses that expand the capacity and the functionality of the band. In the many months since the filing of our joint petition in 2014, our PDV team has identified, analyzed and reached out to the principal incumbents, which share with us the 900 megahertz band. We have posed this question. 30 years after the rules were first put in place, what does technology today and into the future suggest that the optimum way to deploy this very valuable nationwide spot of below 1 gigahertz spectrum. The answer generally corroborates the premise on which our petition was based. Viewed from a global perspective, LTE is the dominant wireless technology now and into the foreseeable future. While the introduction of LTE seems indisputable to us as the 900 megahertz endgame of any re-banding or repurposing. There are…

Thanks, Morgan. I will review the key highlights of the company's financial results for the first quarter of fiscal year 2018. My review is not intended to replace the full financial disclosures enclosed in the company's Form 10-Q filed today or our most recent annual report on Form 10-K filed with the SEC, and we encourage listeners to review those filings for additional information. Revenue for the company's first fiscal quarter ended June 30, 2017, was $1.5 million compared with $1 million for the quarter ended June 30, 2016. For the quarter, the company reported a net loss of $7.9 million or negative $0.55 per share compared with a loss of $10.1 million or negative $0.70 per share in the same quarter in the previous year. Last year's first quarter included $3.4 million of expenses to support the FirstNet bid or negative $0.24 per share. As previously disclosed and in accordance with GAAP, we continue to increase the valuation allowance related to our deferred tax assets. In the three months ended June 30, 2017, the company recorded a noncash income tax expense of $0.7 million or $0.05 per share to increase the valuation allowance. We expect to incur approximately $2.6 million of noncash deferred income tax expense for the full fiscal year 2018. Adjusted EBITDA for the first quarter was a negative $5.6 million as compared with a negative $8.2 million for the same period in the prior year. The change in adjusted EBITDA over our previous year is due to the elimination of the FirstNet bid related expenses and higher revenues offset by higher sales and marketing costs. The company has a strong cash position with $115.5 million in available cash as of June 30, 2017, a decrease of $8.5 million in March 31, 2017, which includes $1.5 million of additional 900 megahertz spectrum purchases. It's important to note that we do anticipate additional expenses to respond to the NOI and continuing to expand our business development pipeline. We will also continue to opportunistically purchase additional 900 megahertz channels when it makes strategic and financial sense. That concludes our prepared remarks. Before we open the call for questions, I'd like to state that we will not answer detailed questions on the NOI as our responses to the NOI will be provided to the FCC at the appropriate due dates. Now I'd like to turn it over to the operator to facilitate questions.

Thank you. [Operator Instructions] Your first question is coming from Paul Kirby. Please announce your affiliation and then post your question. Your line is now live.

Hi. Thanks for taking my call. I'm with TR Daily. Morgan, you mentioned that you're going to try to increase your outreach. To this point, the -- a lot of the incumbents, a lot of the utilities don't like your plan. So how are you going to -- which [indiscernible] pointed out. So how are you -- at this point, how are you going to convince them?

Okay, Paul. I think the right way to respond is to say that when a proceeding is all side have been pleading, you tend to get the extreme positions expressed. And when you are off the record and having discussions with business types, both on our side and other sides, you have a whole different kind of a discussion. So that is part of the process. Another part of the process is, as we indicated in our comments, the process of time -- the passage of time. There is a much greater understanding. We’ve had very vocal opponents on the record say to us we did not understand the nature of broadband and our possible requirement for broadband, and it caused us to take another look. Obviously, we don’t identify those parties, but I am saying that we continue to have a lot of substantive process behind the scenes just as you would expect. And we are the farthest thing from doctrinaire in our approach to this. We’ve -- we had a very solid understanding of the technology and technical issues. We think every technical issue that has been raised is a -- can be completely lived with, but on the other hand, we are listening to where everybody wants to go on this and trying to fashion as much as we can sort of a comprehensive position that we take with the FCC. It remains to be seem, we have a number of weeks to go as we think through all the various dimensions of it, which can't -- you can't extrapolate at all from what's currently on the record. As you well know, this is the nature of the process that parties go somewhat to the extremes.

So when you say a comprehensive position, you would -- are you suggesting you would like to try to get a consensus position with the incumbents to bring to the FCC?

Absolutely. I mean, I think that’s the objective of any party in a proceeding like this, if you can.

Is it realistic to get that even?

Yes, I do.

Thank you.

Your next question is coming from Mike Crawford. Please announce you affiliation and post your question. Your line is live.

Hi. This is actually Sameet on for Mike from B. Riley. How are you guys?

Hey, good.

Thanks for taking the question. So, I know you guys are not going to comment specifically on the NOI strategies on this call, but I think in past calls, you guys talked about if the spectrum were to be reconfigured as a broadband service, the significant benefits which will accrue to the American public and the broader utilities in general, could you remind us of all those benefits critical infrastructure companies would get by this thing reconfigured as a broadband service?

Sure. Hi. Welcome to the call. It's Rob Schwartz. I think a couple of few things. The benefits in the industry, and this isn't something that we are necessarily making up, we are putting it on the record, this is really what’s being published by the industry. And if you go to [indiscernible] key -- I meant by industry, we are talking about critical infrastructure, any of the key industry events. I think, as Morgan said, as time has passed, this has become really one of the number 1 topics being discussed in things like the UTC events and other key industry efforts. What we're really hearing is that, historically, these have been a conglomeration of multiple disparate systems to handle communications. And that’s across mostly narrowband systems, some that are on commercial networks that don’t necessarily provide the reliability or security they need. And so as companies have taken holistic approaches to understanding each of those systems, and we are talking about narrowband push-to-talk, we are talking about narrowband SCADA systems, other similar type systems, as entities have taken a much broader perspective and realize that there is a need for both bringing those together because of evolutions of technologies and additional use cases that drive towards broadband. There is also challenges with security of some of those current systems, and a lot of these utilities, specifically, are under some specific PUC requirements about enhancing their security and LTE, as an example, brings a much greater level of security just from the get go and then has the ability to layer additional security on top of that. Also, at the same time, in the industry, there is been a lot of -- besides the discussion, there is other competing efforts to try and drive broadband to the markets from the existing carriers. There is other solutions out there with higher-band spectrum. And there is some market leaders like Southern Linc, as an example, the wholly owned subsidiary of Southern Company, that has already launched LTE. They are uniquely positioned in the country. They have narrow -- they have broadband licenses below 1 gigahertz. They are actually licensed to 800 megahertz, and they’ve launched an LTE system and have started to really lead the industry and have started to talk to the industry about that, and that’s also driving strong interest across the industry.

Got it. That’s helpful. And in terms of the …

Let me add -- let me just add one thing which is not all broadband is equal. And this is certainly demonstrated in FirstNet. You can have the best broadband system in the world, but if in an emergency, you can't get access to it, it does you no good. So first and foremost, what we are offering as the great potential here to the industry is that critical infrastructure get priority access to broadband that is pre-emptible. And that is more important than anything in our view. That’s -- that was the position that the industry pretty consistently took, the critical infrastructure industry in the past. And we -- our impression is, from the discussions we are having, is that they definitely understand the importance of it. You can argue about whether to create the opportunity at 900 or whether there is some imaginary -- largely imaginary other place you could do it in the spectrum, but we really like this opportunity that the FCC has opened up in the Notice of Inquiry that everybody can really seriously put on the record of what the choices are and where sort of the next-generation of technology can bring all of us on the spectrum, and that’s what the commission cares about, that’s their mission.

Got it. That’s helpful. And in terms of potential next set, as noted in the NOI, you guys are going to be responding with comments by September 18 and reply to comments by October 18. If all goes well with the process, when can we potentially expect the NPR process potentially begin in your estimation?

Let me take a crack with that. It's Morgan again. First, I'd direct everybody's attention to some of the speeches that Chairman Pai has been making. And I actually take him absolutely in his word that he wants to get this process streamlined and spread out [ph]. He's not talking, of course, specifically about us and our process, but just in general. And we will have to wait and see. It's complicated. It requires a lot of balancing. To the extent that the industry -- it's a relatively finite number of players, but to the extent that those players can reach any kind of consensus, it helps a lot to speed things up. So our interest in consensus is speeding things up as much as anything else, it just -- let's get on with it. This incredibly valuable spectrum is probably the least utilized spectrum below 1-gig that the commission has, and that’s a real shame. So we want to see if we can speed this up. We can't put any numbers on it, but we believe that the Chairman and his team are really committed to getting things moving quickly.

Okay. That’s helpful. I turn it over.

Your next question is coming from James Breen. Please announce your affiliation, then post your question. Your line is now live.

Thanks. William Blair. Just as this process moves on from a regulatory standpoint between now and whenever that completion may be, can you just talk about how you are looking at your business as is it now, and how are you going to market the product in the success path? Thanks.

So this is John Pescatore. As Rob started mentioning about the opportunities, we're seeing in our critical infrastructure discussion and outreaching. The company's main focus has been on -- or the top priority has been success with our FCC initiative. But the other two areas, one being develop compelling use cases for our spectrum, in the outreach that we are doing with critical infrastructure and other enterprises, it's looking at what their needs are and developing sort of quasi-private networks for them solving wireless problems. And that’s an initiative, and it's a commercial initiative underway, and we have resources essentially building a funnel of solution sales that the end result of that will be a -- would look like almost private network to a utility or an oil and gas company where they are able to get access to maybe field area network where they can access resources and do monitoring, for example. So that’s the second focus in terms of business development. And then in our Dispatch business, that again is focused on enterprise, more the blue collar verticals like transportation, construction, field service in a narrowband world that we find ourselves in with our spectrum, and we -- with that as a largely indirect approach, using two-way radio dealers in our seven markets where we want service. So we look at the three together, and that third priority is to increase revenues and develop that business as we are working through both the regulatory and our business development activities.

And so the goal is just to have the solution set in place to move forward quickly once the regulatory issues are overcome and then using your existing customer base to basically up-sell some of the additional products?

Yes. So those activities in our outreach are focused on an ecosystem that, assuming success with the regulatory process, will be broadband and LTE. And therefore, the access to technologies, applications, solutions are robust, they are what the industry is using today. And our future solution can take advantage of all of those things as we develop those networks.

There are numerous -- we are in the so-called bandaid. Traditionally, bandaid has not been available, the 900 megahertz spectrum hasn't been available for broadband in the U.S., but it's widely available in the rest of the world. So there are ecosystems of equipment, numerous devices that are readily modified to work in this band. So it's truly the regulatory process, which sit down in front of being able to bring a lot of innovative stuff into the market. It's bandaid in the rest of the world. Plenty of economies of scale driving feature functionality, something we were very close to and are watching closely.

And the -- so in that business development activity, there are two components. One, with the assumption that we win the regulatory initiative and we have broadband; the other is also looking at ways that we can use our spectrum in its current incarnation in a -- because we’ve a decent amount of spectrum. It is discontiguous, but chunks of it can be aggregated, and we can deploy wideband solutions as well today. And so those are things coming out of that business development effort that we are looking at. And there are off-the-shelf solutions to put those in place as well. And in the context of a transition or a migration over time, those are solutions that we could sell today and develop into broadband down the road.

And then just lastly, with respect to FirstNet, is there an opportunity here for just some sort of cooperation that network its built or is it really sort of apples and oranges?

There's a slight apples and oranges, but there are many opportunities for apples and oranges together harmoniously. And we’ve made the case publicly, we've made the case privately that the infrastructure that AT&T is going to be putting in place for FirstNet and the infrastructure that we'd like to see supporting critical infrastructure and other enterprise broadband users are very, very similar. And so you can you easily imagine coexisting. And that would be something that would be a business decision made down the road by AT&T, FirstNet.

And we’ve always seen and said publicly before the synergies between public safety and critical infrastructure. And in the aftermath of an event, critical infrastructure entities are almost first responders. And maybe even important to go in after the event prior to the first responders that are there. So the ability to have a network that can communicate seamlessly with public safety, we see potential there. So that, of course, could evolve down the road.

Okay. Thank you.

[Operator Instructions] There are no further questions in queue.

Well, we want to thank everyone for their time today. We certainly appreciate your support. This is a mountains before mountains, but we are absolutely focused on working through the questions and information in the NOI. Feel free to reach out to us, and we will look forward to talking to you all at our next quarterly call.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.