Good morning, ladies and gentlemen, and welcome to the pdvWireless Third Quarter Update Conference Call. At this time, all participants have been placed on a 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 your host, Natasha Vecchiarelli, Director of Corporate Communications. Ma'am, the floor is yours.

Thank you, Kate. Good morning, everyone, and thank you for joining us. With me today are Brian McAuley, our Chairman; Morgan O'Brien, our CEO; Rob Schwartz, our President and COO; and Tim Gray, our CFO. Before we begin, I'd like to highlight that during our call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings release, which can be found on our Investor Relations page. Please also note that our discussion may contain forward-looking statements, and our actual results may differ materially from those implied. Information regarding factors that could cause such differences can be found in our public filings. With that, I'd like to turn the call over to Morgan O'Brien.

Thank you, Natasha. Good morning, everyone. We continue to anticipate FCC action on our rulemaking petition soon, amid encouraging conversations with FCC staff. Our investors undoubtedly share our frustration that the final steps of issuing an NPRM are so slow. The recent month-long closing of the federal government, including virtually all of the FCC, no doubt has caused a substantial backlog of items requiring FCC attention, including our own. While we wait, we continue to make substantial progress complementary to our FCC effort. Our personal favorite was our press release on January 17, in which we announced a further development in our important relationship with Southern Company's subsidiary, Southern Linc. Our investors will remember that Southern initially opposed our petition, but many months of constructive discussion with the engineers at Southern led to a breakthrough in 2018. After first reaching agreement in principle with The Association of American Railroads to swap certain 900 megahertz channels in use by the freight railroads industry, it became possible to move the proposed broadband block spectrum by a relatively minimal 400 kilohertz and thus address Southern's interference without impacting the opportunity to support new broadband technologies in the band. Our agreement on the petition then gave rise to a series of business discussions between Southern and PDV, which in turn led to our agreement to work together to promote the benefits of private LTE broadband for the electric utility industry. From my particular perspective of the FCC regulatory process, this agreement is a great step forward. The endorsement from Southern, the only utility with actual commercial experience deploying LTE, offers powerful support on the record for a favorable NPRM. Southern is now providing broadband services to their operating companies and many other enterprises throughout their territories. It thus can represent a concrete rejoinder to…

Thanks, Morgan, and good morning, everyone. As Morgan just covered our top priority, our continuing regulatory progress, it's worth noting that regulatory to us means both the progress and support of our broadband initiatives at the FCC, and also includes what we call our industry regulatory initiatives, representing our considerable outreach efforts in the energy industry at both the federal and state levels. We believe this effort is driving greater awareness of the necessity for private broadband networks as a critical element in solving vital industry issues, and will help drive regulator support and funding for industry broadband initiatives nationwide. I'd like to focus my time on this call to provide updates on our other key priorities, the development of our commercial broadband business. As part of this effort, we've made substantial progress in reorganizing our business over the course of the last nine months. We've moved decisively, as announced a few months ago in the divestiture of our dispatch and related solutions business, and we've concentrated our resources on growing our private broadband opportunity, including investing in our people, growing our team and refining our operating model for our future. This refined strategy sets the stage for our pursuit of long-term growth. Additionally, we've refreshed our board with four new independent members in the past six months, including the most recent edition of Greg Haller. Greg spent almost 30 years at Verizon Wireless, where he served in diverse leadership positions spanning operations, sales, marketing and solutions as well as consumer product portfolio and pricing. We are certain that Greg's complementary perspectives and challenging insight will add a significant value to our board and our company. With these organizational improvements now in place, we have the right foundation on which to build our future growth. I look forward to sharing…

Thanks, Rob. Good morning, everyone. As Morgan and Rob discussed, it's been a constructive quarter for us, and we're pleased with all we've accomplished since our last call. Let me begin by spending a few moments discussing the deals we reached in early January to divest our TeamConnect and pdvConnect businesses. We believe these transactions will enable us to focus our capital on the initiatives that we expect to drive our future growth and further benefit our pursuit of establishing pdvWireless as a leader in solving the essential and valuable broadband network needs of critical infrastructure and other entities. These transactions allowed for us to further reduce our future operating cost by eliminating approximately 20 positions or 30% of our workforce, which will be carried out over the course of the next several months. Our fiscal 2019 fourth quarter will include a restructuring charge of approximately $900,000 related to these actions. Please refer to our 8-K filed on January 7 of this year or our 10-Q filed earlier today for additional information on these transactions. Our headcount will be approximately 50 after these reductions down from over 100 last summer. However, we intend to continue to hire exceptional talent, both as employees and contractors, to enhance our broadband and commercial capabilities. So headcount related costs will increase during our next fiscal year as we add these additional resources. Let's now look at our cash burn since last quarter. Our cash position decreased by $3.3 million, which included $285,000 in restructuring related spend. While a significant decrease in burn versus previous quarters, it's important to note that we had proceeds of $1.8 million from stock option exercises during Q3. I'm pleased to say that we are well on our way to achieving the stated goal for fiscal 2019, which was to…

Thank you. Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] Our first question for today is coming from George Sutton. Please announce your affiliation then pose your question.

Craig-Hallum. Morgan, I wondered if you could give us a little bit more detail on a couple of the points you made. You mentioned encouraging discussions with the FCC, just curious if you could expand upon that. And you also suggested you are within a backlog that now exists because of the shutdown. I'm just curious; do you think your position within that backlog has changed at all or is that just recognition of the reality of the government shutdown?

Starting, George, with the last part first, I think it's just a reality of the shutdown. But moving to your first question, we have had active pretty much daily discussions. And so, we know that the item, which is how something like this gets decided, is in a mature stage. And therefore, we are realistically expecting something soon. So it's promising. We're told that this is intended to be acted on quickly soon. So that's our impression. That's what we're told. That's what we believe. And regrettably, I have to say, it's been a long time coming. But that's okay. We all understand the regulatory process.

One of the thing relative to just the timing, I believe we're still under a freeze of the spectrum and that limits your ability - correct me if I'm wrong - to acquire additional spectrum and/or anyone else acquiring spectrum. So just to confirm, we are still under a freeze, which suggests an accelerated timeframe.

Well, yeah, sure. Yes, I think it does. But let me just clarify one thing. The freeze doesn't prevent transactions, such as if I buy from an incumbent licensee. Those type of transactions are not frozen. What's frozen is the ability to access the commission's remaining storehouses' spectrum. That's what's frozen. But of course, without getting too techie here, the only spectrum currently available, even if there were no freeze, to company like ours, a commercial enterprise like ours is not eligible for that spectrum. That's just the problem. That spectrum under current rules and the rules have been in place since the 1980, the remaining spectrum is only available if it's a private company intending to use the spectrum for its own internal communications. So even if there were no freeze, we'd have nothing we could apply for. But anything that's currently licensed, we're free to go after and those discussions continue.

I understand. Thanks for the clarity.

Sure.

[Operator Instructions] Our next question today is coming from Mike Crawford. Please announce your affiliation then pose your question.

Thanks. B. Riley FBR. So you mentioned Southern and Ameren as founding members of this Utility Broadband Alliance. And we know they have experimental licenses to work in the 900 megahertz spectrum. But how did National Grid come in there as a founding member?

Hey, Mike. It's Rob. It's a good question. We did some preliminary work, obviously, in advance of the soft launch of our UBBA, the Utilities Broadband Alliance, which we did, as I mentioned last week, at this major technology utility conference down in New Orleans. So in the initial discussions, as we talked about, we've got relationships with the majority of the top 20 IOUs. They're one of those for sure. And so we've put out invitations to a broad base of utilities. Beyond the initial founding members we had meetings and discussions with a much broader base of utilities and have really strong interest from lots beyond National Grid. So National Grid, like many of us other IOUs, I mean, we really saw at this conference, we've been going for a number of years to DistribuTECH. And what really I think is a coming of age of the awareness of the value of what broadband can do in helping solve a lot of the issues that are coming to the surface is really happening in mass. And so from our standpoint, they're a good example, but hopefully, plenty more to come of utilities that are really looking for a way to learn about broadband and because there aren't a lot of ways to do that besides direct vendor conversations, that's the whole purpose of creating this forum for the ability for utilities to own and operate. So we say by utilities and for utilities is really the intent of this. They're one of the many that are interested in learning about how this can be valuable and really designing a plan on how they can implement it in their way to solve their critical needs.

Okay. Thanks, Rob. And then, you also talked about that you're currently trialing with partners citizens' band as overlay - capacity overlay on top of your coverage spectrum. And is - I don't think that's part of the Ameren experimental license, or I could be wrong, but is - has it been disclosed exactly what you're doing or where in that regard?

Sure. Yeah. We've talked a little bit - let me give you a little more clarity on it. So as I mentioned, CBRS being a higher band or mid-band spectrum with 3.5 is a great spectrum as the CBRS Alliance and their community has really well defined for serving in buildings, in stadiums, on campuses. And it has a really great robust ecosystem of vendors and solution providers working on developing that. With 900 megahertz, our low-band spectrum being great at covering wide areas, the service territories of utilities typically, as you know, these big utilities have multistate footprints, where they're trying to cover areas, including where there's transmission lines and substations, but no people and typically not even other networks available, and so the complement of the two of those using 900 megahertz to cover wide areas cost effectively and providing the physics of good in-building penetration. When you have to get to substations that are in cement bunkers, it's much better to have low-band. But as you need more capacity as an overlay in places like urban cores or other areas, where you may want additional capacity, CBRS is a natural complement to that. And specifically, on the pilots that are going on, Ameren filed an experimental license, or separately for 900. And I think if you look on the record, they also filed an experimental license for CBRS as well. With the way that CBRS is developing with the SaaS systems, in other words, you can actually in the future, once they get through the full licensing process, you'll be able to go directly to the SaaS and get access to that spectrum in either the licensed form or the unlicensed form. And that's the way we see it as an on-ramp for utilities to be able to use CBRS. But we think it's a great complement and an expansion of the foundation of our low-band broadband spectrum.

Okay. Thanks for that clarification. And then just final question is, I think on your last earnings call in November, you talked about a third large investor on utility is likely starting a trial soon. Has that started yet?

Yeah. There is a third. And unfortunately, we're still under NDA, and I can't talk specifically about the name of the entity. But yes, there is still at least another ongoing effort, which they've already selected vendors are pushing forward in their own process of design and deployment of a 900 megahertz deployment.

Okay, great. Thank you very much.

And I hope - we hope to, want to share more on that soon as soon as that becomes public.

Okay. Thank you.

Thank you. [Operator Instructions] We have no further questions in the queue at this time.

Can I - this is Morgan. I just want to make one other comment. I've gotten questions from investors before, and I think it might be worth repeating the question and the answer, particularly in light of our recent announcements. And the question is, why isn't the UTC, which is Utility Telecommunications Council, out in front publicly supporting this since it seems to have gaining support in utility industry. And what I say, and I think it's worth repeating here, is that if you have a historical perspective, you realize that at one point, UTC was always on the leading edge of productive change for the industry. And to me, it's incredible that the industry - that the association, of which we are a member, seems to have become so entrenched in some kind of backward-looking process that they're unable to see the future, which so many of their members are seeing. So it's sad, as I say, because you'd like to think, you would believe, that an association that holds itself out just looking for the interest of their members would be looking forward not backwards. But here we have a case of total MIA, missing in action. It's sad. But I don't think it's fair to infer anything from it once you look at the kind of progress that's been made. And I think with that, since we don't have any further questions, we'll - Natasha tells me it's time for us to wrap-up, and thank you all for attending.

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.