Good morning, ladies and gentlemen, and welcome to pdvWireless First Quarter Conference Call. At this time, all participant 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. Ma'am, the floor is yours.

Thank you, Catherine. 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 release, which you will find in 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. Thank you for joining us. Since the last investor call only two months ago, we've expanded our efforts to understand and to prepare to meet the technology needs of the critical infrastructure industry. We've continued to rebalance our internal staff to bring more expertise to our broadband model. We've added consultants that are bringing us the variety of unique perspectives on government policies affecting utility industry. We are pleased to see a recent placement in Utility Dive, an editorial by former Governor Jack Markell headlined, Broadband access: A regulatory call to action to protect utilities against cyber threats. Through these efforts, we continue to refine our business plan for PDV to become a premier provider of private broadband services. Use cases that require private, exclusive use spectrum are being brought to us by prospective customers for such spectrum. Demand in the marketplace for what be propose to offer is strong and growing stronger. Of course, favorable action by the FCC on our spectrum proposal is a prerequisite for us to meet this demand. We remain close to regulatory process, and we're pleased by a recent statement by FCC Chairman, Ajit Pai, in his testimony to a subcommittee of the Energy and Commerce Committee, that he and his staff are working on drafting a Notice of Proposed Rulemaking, where the FCC is likely to lay out its preferred path to the future of 900 megahertz broadband. We continue to believe that this is a compelling opportunity for the FCC to repurpose an underutilized spectrum band and to expand the base of broadband spectrum. And we're optimistic that action will be taken soon. As I said before, any licensee of spectrum who proposes change is dependent on decisions made by the FCC on the basis of the record before…

Thanks, Morgan. It's been very busy but only eight weeks since our fiscal Year-End Investor Call in June, and I'd like to take my time on this call to provide an update on our progress in key areas of attention as well as update you on the continued refinement of our broadband business model. We've been highly focused on driving progress in three key interrelated areas: First, advancing our FCC regulatory process; second, implementing our organizational changes; and third, developing our broadband business. I want to take a moment to elaborate on our activities in each of these areas and our plans going forward. First, as Morgan mentioned, we continued to drive progress with our regulatory agenda to enable private broadband networks in 900 megahertz. In May, we filed at the FCC our further comments in conjunction with the Enterprise Wireless Alliance as a proposed path forward for addressing many of the issues on the comprehensive record built at the FCC to the notice of inquiry process. During our last quarterly call, I highlighted the substantial regulatory support that we've been able to generate from the industry through our commercial business development efforts. Our ongoing commercial development program continues to provide benefit to our regulatory process while building a funnel of opportunities that will allow us to hit the ground running with FCC approval. We've also continued to collaborate directly with the FCC and Congress over the past weeks in meetings, filings and responses to inquiries, making the case alongside the industry for the substantial and urgent need for private broadband spectrum at 900 megahertz to serve critical infrastructure and enterprise. As Morgan referenced, FCC Chairman Pai recently confirmed that his staff is working on drafting an NPRM, the next important step in enabling broadband at 900 megahertz. Needless to…

Thanks, Rob. During the first quarter of fiscal 2019, we continued to evaluate our operating cost as we work to finalize our regulatory initiatives and shift our investments toward the future deployment of broadband and other advanced technologies and services. As discussed on our last call, the restructuring plan aimed at reducing the future operating cost of our TeamConnect and pdvConnect businesses is well underway, and we've made significant progress to lower the future cash burn in these areas. With annualized savings of close to $2 million, the workforce reductions taken to date provide us with additional capital to invest in our broadband initiatives. The changes to our team have essentially removed all dispatch sales and marketing efforts and better aligned our support functions as we don't expect significant future growth in these businesses. We will continue to watch these businesses and take additional actions as necessary to minimize any related cash burn. Also, as disclosed earlier today, based on the new tax law, we have filed restated financial statements resulting in a benefit for our fiscal year 2018 and the prior third quarter period within fiscal 2018. In order to correct the effective date changes to the establishment of indefinite-lived net operating loss, or NOL, carryforwards, the additional noncash income benefit was $5.6 million for the three months ended December 31, 2017, and $6 million for the fiscal year ended March 31, 2018. Please refer to our filings for additional information. Looking at our first quarter results of fiscal 2019, our cash position decreased by $7.4 million. As previously shared, our goal for fiscal year 2019 is to have lower cash spend in fiscal 2018 before considering any restructuring-related cost or spectrum acquisitions. Based on our first quarter spend and our announced headcount reductions, we expect this to be achievable even as we increased our broadband investments. As of June 30, 2018, the company has $90.9 million in available cash and is debt-free. For the first fiscal quarter ended June 30, 2018, the company reported net loss of $12.3 million or negative $0.85 per share versus a net loss of $7.9 million or negative $0.55 per share for the same quarter in the previous year. The first quarter included $4.5 million of restructuring-related items, including severance, stock compensation expense and a write-down of dispatch radios in inventory. Adjusted EBITDA for the fourth quarter was negative $8.1 million compared with negative $5.6 million for the same period in the prior year. The decrease in adjusted EBITDA over our previous year is due to increased investment in broadband initiatives and $1.8 million in restructuring costs. I'll conclude by saying that we are well positioned to accomplish our primary objective of building shareholder value by modernizing the 900 megahertz band to increase its usability and capacity. Investments continue to be focused on this next phase of our business. That ends our prepared remarks. I'll now turn it back over to the operator for questions.

Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] Your first question is coming from Mike Crawford.

Thanks. Mike Crawford from B. Riley FBR. Morgan and Rob and team, you've talked about making progress on key areas of tension. We also saw Chairman Pai commit to moving to an NPRM. Is that something that you expect will reflect your revised PDV proposal? And secondly, is this something – like the NOI that came out of circulation a year ago, is this something that you think that just might be – that come through circulation? Or might be moved to a formal agenda item at a board meeting of the FCC?

We won't know. I mean, the question of whether the Chairman puts it on the agenda or whether he just handles it by circulation. If I had to guess, I would say it would be by circulation because it's – in their scheme of things, it's a relatively small scale item. On the question of what's in it, we really won't know until we see it. But we're optimistic.

I mean, you talked about meetings and filings with the FCC and Congress in recent weeks. And through the course of those meetings, I'd imagine you'd get a sense of whether how well the revised proposal is resonating, or if they have any questions that are coming back on a certain point that you're able to share with us.

I think the safest thing for me to say, Mike, is that specifics are hard to come by at this stage in the 11th hour. But we continue to be engaged, and I think that's about all I should say: Engaged and optimistic.

Okay, thank you very much.

Your next question is coming from Max Devon [ph]. Your line is live.

I was wondering, when you look at – Rob, when you look at that robust pipeline you have, obviously, you can't sell anything yet when it hasn't necessarily been approved. Are you concerned about competitive deals for other technologies, perhaps, from traditional mobile network operators that might come in with new solutions from the technology perspective rather than a network perspective while we wait for the FCC?

Yes, thanks, Max, for the question. A couple of thoughts. First of all, yes, the robust pipeline for us really is our initial efforts of developing, exploring, understanding the customer needs, as you saw with the Ameren example, and we filed an experimental license, which the FCC granted relatively quickly, and we're really off to the races in our initial deployment to really discover the ways in which we can solve the numerous use cases that we're trying to help out with within the industry. As far as – so I think we have a good opportunity to be able to start seeding the market through that process and others to start before an advance of any formal rulemaking. As far as competitive threats, we never underestimate the carriers and the other solutions that are available to these customers. We see that 900 megahertz fits very squarely in a space where there really aren't a lot of good alternatives. When you look at an entity like an Ameren that has over a dozen different communications networks today, that they're having to rely on relatively disparate, most legacy, networks that they're looking to bring together as much as possible. On a single typically private network – and private is not something that we're selling as a new idea, this is something that utilities, for decades, have relied on their owned and operated networks for all the right reasons of security, reliability, resilience. And so there absolutely are other developing technologies. But when you start segmenting the market between the low-value solutions, things that are needed for that aren't mission-critical, like LPWAN technologies, things that are going after some of the lower-value IoT, versus the very high end of private, resilient, robust communication needs, we think that's where private LTE fits in very squarely. And again, there aren't really many other alternative solutions for that space. So again, we don't underestimate the competitive threats that are always out there in the marketplace, but we think there's a very, very square place where we fit right into the market once we have our solution available.

Perfect, thank you.

Your next question is coming from Marc Wiesenberger. Sir, your line is live.

This is Marc Wiesenberger from B. Riley FBR. And following on some of Mike's earlier questions. Following Chairman Pai's positive comments, can you talk about how your discussions, if at all, with critical infrastructure players has evolved? And are they now prioritizing anything different in the near and medium term, following his comments? And then another one, ultimately in the ideal world, how do you envision the mix of pure spectrum leases versus creating kind of these bespoke networks where – for the customers? And how would that evolve over time?

This is Morgan. Let me take a crack at that. I think the – it may be proportional to the size of the entity. The larger the IOU investor and utility, the larger the utility, the more likely that they may be towards the end of wanting to lease the spectrum, but take most of the rest of the responsibility on themselves as they traditionally done with private systems. And then as you move down more in the municipals and the co-ops, they are smaller, therefore, they have fewer resources to be able to throw at something as new and complex as LTE and broadband. And so what you described as the bespoke model might make a lot more sense. I think to focus on more than anything is the ability of a particular utility to access their ratepayers to get the capital, not just to lease our spectrum, but much larger number, to build the infrastructure. This is going to be a very expensive undertaking to put the kind of capabilities out there that are going to serve the purpose of resiliency, reliability and security. So frankly, what is the most important driving phenomenon out there is that the investor on utilities rely on the ability to go through the PUCs and to the ratepayers to invest capital to improve the network and to earn a return on it. So that's – to me, that's the virtuous phenomenon here. As to how the – exactly how are the licenses going to be made available through this NPRM, we have a good number of options out there that – ways in which the NPRM might choose to do this. As yet, we really don't have a good, clear signal of which. There's a couple of different acceptable ways.

And then just back to the first one. Are your discussions with these players, have they changed since the positive comments?

Sure. Yes, I think utilities are relatively conservative customers as an example. And so as there's less and less perspective of any kind of overhang of regulatory risk, we get it increasing interest from those parties. So we've got a very robust pipeline, as we've talked about, at varying stages from those that were already in discussions about current deployments, to those that are just evaluating the opportunities. And it's amazing how close a lot of them are following this process because of, as we said earlier, the lack of alternatives and the really growing demand for their private networks.

Okay. Thank you very much. That's it for me.

[Operator Instructions] We have no further questions in queue.

With that then, thank you so much, and we look forward to the next chance to update lots of progress. And we're looking forward to the next chance.