John Pescatore - President and Chief Executive Officer Morgan O’Brien - Vice Chairman Tim Gray - Chief Financial Officer Rob Schwartz - Chief Strategy and Development Officer.

David Dickson - FBR.

Good afternoon ladies and gentlemen and welcome to the pdvWireless Q3 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, John Pescatore, CEO of pdvWireless.

Sir, the floor is yours..

Thank you. Good afternoon everyone and welcome to pdvWireless’ earnings call for the third quarter of fiscal 2017. Joining me today, to discuss our results are Brian McCauley our Chairman; Morgan O’Brien our Vice Chairman; Tim Gray, our Chief Financial Officer; and Rob Schwartz, our Chief Strategy and Development Officer.

Before we begin, I’d hand it over to Tim to remind us of a few important items..

Thanks, John. Earlier this afternoon, we issued an earnings release and filed a quarterly report on Form 10-Q with our third quarter results, copies of which are available on the investor relations portion of our website, as well as on the SEC’s website.

Following our remarks today, we will hold a question and answer session for analysts and investors. Additionally, I’d like to remind our listeners that this conference call is open to the public and a recording of our discussion will be available on the investor relations portion of our website.

We will refer to a non-GAAP financial measure, adjusted EBITDA during today’s call. This measure should not be considered in isolation from, or as a substitute or superior to our financial measures prepared in accordance with GAAP.

We have provided a reconciliation for this financial measure to net loss, the most directly comparable GAAP financial measure in our earnings release. Any matters discussed today that are not historical facts constitute forward looking statements.

These statements are based on current management expectations, but involve risks and uncertainties that could cause our actual results to differ materially from those suggested by such statements.

The potential risks and uncertainties include those identified in the risk factors section of our annual report on Form 10-K filed with the SEC on June 13, 2016, and our subsequent filings with the SEC. You should not place undue reliance on these forward looking statements. We speak only as of today.

pdvWireless assumes no obligation to update any forward looking statements, except as required by law. Now, I’ll turn it back over to John..

Thanks Tim. The results of the November election have everyone talking about change. I want to assure you that our priorities and goals have not changed.

We remain focused on our three key business priorities, the highest of which is achieving success with our regulatory efforts to unmark the value and opportunities associated with more efficient use of our spectrum.

In addition, we are planning for success by developing longer term strategic plans and focusing on increasing revenue in our dispatch business. I’ll begin by providing a brief update of our dispatch business. Currently, we are focusing on the seven markets where we have commenced service.

We’ve been trailing and implementing a number of sales and marketing initiatives and strategies to help grow these areas and to develop a successful sales model. We showed improvement in the third quarter of fiscal 2017 with regard to unit sales and sales funnel activity.

As of today, our total unit count has grown to approximately 3600 units up from approximately 2800 units at our last call, that’s an increase of close to 30%. Further our customers are experiencing the value of our mobile work source force applications which we bundled with our wide area push-to-talk solutions.

Approximately 80% of our accounts have utilized at least one of those applications. This measurable progress combined with the positive feedback we continue to receive from our customers is encouraging.

As mentioned on our last earnings call, our recent formed centralized business development team continues to exceed their targets for developing qualified leads.

We began hiring and training team members in the mid to late second quarter and by the end of the third quarter the team had generated over 350 qualified leads, many of these opportunities are now being worked in our sales funnel and some have already resulted in new customer accounts.

Further, as we develop compelling use cases across specific verticals, the business development team has been leveraging those used cases to target similar businesses throughout our market areas, as a result of their collective efforts in close coordination with our sales team, we are beginning to see the type of impact we had hoped for and plan to increase the size of this team.

Developing alternate channels, instituting a major accounts program and adding limited sales direct sales resources in the markets are among other promising initiatives currently in process.

As part of our strategic planning process, we continue to develop opportunities to serve the needs of enterprises including critical infrastructure, using our spectrum and other key pdv assets we are working with partners to develop those opportunities with both available and emerging technologies.

As a current example, we are developing an opportunity to enable a rural, state wide utility to upgrade their field area network to provide a higher level of distribution automation including enhanced monitoring, control, automation and management of power grids from the distribution substation out to the meters, utilizing pdvs current spectrum in available wideband technology and integration partners, this utility has a solution to their current distribution automation needs, and equally important pdv upon achieving our regulatory objectives has agreed to provide a migration path to broadband as desired by this utility.

We are also working on opportunities leveraging our license spectrum and assets to serve existing and emerging business models that depend on unlicensed spectrum.

In our view, access to licensed spectrum for these used cases can offer enhanced quality of service, greater interference protection as a congestion on unlicensed spectrum grows and potentially more cost-effective coverage capabilities.

We are engaging with prospective business partners to explore these opportunities, including conducting both lab and field trials. Through these types of initiatives, we intend to continue to leverage pdv spectrum on our deployed networks in our seven markets and throughout our nationwide licensed footprint.

We view our dispatch services as the first layer of applications on our network. We see opportunities to work with partners to synergistically layer additional services and technologies on this same infrastructure.

In December we were pleased to announce the appointment of Paul Saleh, Executive Vice President and Chief Financial Officer of Computer Sciences Corporation to our Board of Directors. Paul serves as successor to Andy Daskalakis who retired from the Board in December after serving more than 12 years.

Paul is a seasoned executive who joins the board with more than 30 years of experience in corporate finance and management. We are grateful to Andy for his incredible service to our Company for so many years, providing us with his experience in the wireless industry and in the dispatch radio business.

Now I’d like to turn it over to Morgan O’Brien, our Vice Chairman to provide a more detailed update on our regulatory initiatives..

Thanks, John. Good afternoon everyone. Since we gave our last update, needless to say there have been some significant changes in Washington, and specifically at the FCC.

During the transition, as usual things slowed down considerably at the commission until there were appointments of the new leadership and they were given time to begin to formulate and communicate their agenda. As many of you know, Chairman Wheeler and Commissioner Rosenworcel have departed and Commissioner Pai has been elevated to Chairman.

So for the time being, the Commissioners are operating with three Commissioners. There have also been several changes at the staff level and Chairman Pai has focused his attention on developing and communicating his highest priority items over the initial few weeks.

We believe that the benefits of our joint petition are on non-partisan and are aligned with the stated goal of the new FCC leadership. Adding additional broadband spectrum below 1 GHz remains an important policy goal that is supported by both Republicans and Democrats.

Commissioner, now Chairman Pai has a consistent track record of urging his fellow Commissioners to abandon the old command-and-control method of managing spectrum in favor of marketplace innovation and competition.

In a recent concurring statement, Commissioner Pai stated affirmatively “Consumers benefit when the FCC eliminates unnecessary regulatory barriers to innovation and investment”. It’s important to keep in mind that their 900 megahertz band remains relatively underutilized. This represents an excellent opportunity to add additional broadband capacity.

We are looking forward to continuing to meet with the Commissioners and the FCC staff making our case for prompt action on our joint petition. The timing of this process is uncertain.

As the current item on circulation that we believe is related to a joint petition, has no defined timeline associated with it and depends on the affirmative vote of a majority of the Commissioners.

While the new Chairman and staff will likely be focused in the near term on several marquee agenda items, we also expect to see progress in parallel on the rest of the items in the docket. We believe that broadband deployment will be a top initiative of this administration and will remain a key focus area for the FCC.

We continue to believe in the merits of our proposal and then our joint petition is consistent with the FCCs newly stated priorities and precedents, and will be approved.

Awaiting for the transition to take place and take hold of the FCC, we have been actively working with several parties who are interested in solutions that could be supported by our potential future 900 megahertz broadband spectrum.

As these efforts move forward, we are increasingly confident, there is a large ecosystem of enterprises, technologies and business opportunities that would be enabled by continuous spectrum access and the availability of related broadband service offerings at 900 MHz.

And parties were discussing this with include incumbents from 900 MHz of the direct stake in the outcome of the petition. Our team is very clearly focused on developing the opportunities that will now move the joint petition forward. And I continue to be hopeful that the Commissioners will act to move forward on a joint petition.

I think that covers the current status of the joint petitions and the actions we are taking to move this process forward. I’ll now turn it over to Tim to provide an update on our financial performance..

Thanks Morgan. I will review the key highlights of the company’s financial results for the third quarter of fiscal year 2017.

My review is not intended to replace the full financial disclosures enclosed in the Company’s 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 third fiscal quarter, ended December 31, 2016, was $1.3 million, compared with $1.1 million for the quarter ended September 30, 2016, an increase of 17% quarter-over-quarter. The increase in revenue is due to the growth in our customer base.

For the quarter, the company reported a net loss of $7.3 million, or negative $0.51 per share, compared with a net loss of $7.8 million, or a negative $0.54 per share in the previous quarter. Adjusted EBITDA for the second quarter was a negative $5.5 million as compared with a negative $6.2 million for the September 30, 2016 quarter.

The improvement in adjusted EBITDA over our previous quarter is due both to an increase in revenue and a decrease in operating expenses mainly due to the winding down in the first net bit effort.

The Company continues to have a strong cash position with $130.7 million available as of December 31, 2016 which is an decrease from September 30, 2016 of $6.3 million.

I’d also like to let you know that we recently expanded our internal strategic planning process to assure that we cost effectively focused our resources on our 3G priorities, achieving regulatory success of the FCC, continuing the development of our compelling business plan and continuing to improve our near-term revenue opportunities.

That concludes our prepared remarks. Now, I’d like to turn it back over to the operator to facilitate questions..

Thank you very much. Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] Your first question is coming from David Dickson. Please announce your affiliation and pose your question. Your line is live..

Yes, good afternoon. Its’ David Dickson with FBR. Yes, so I guess I had a question on the discussions that have continued with the utilities, number one and then perhaps just on the strategy from John, you mentioned you see an opportunity to pair or partner with other current and emerging technologies and you work with partners on that front.

I know some of those discussions may be early, but to what extent you can kind of flush that out a little bit for us and just how [Indiscernible] different to what you were thinking in quarters gone by, that would be great..

Sure. I think what we’ll do David is Rob has been working on a number of those initiatives and I would say, I wouldn’t use the word different, but we are developing and expanding some of those efforts and we can talk about those things now..

Sure, hi David. I think as we’ve said in the past we continue to look at opportunities to leverage our existing spectrum and our spectrum as we go into a broadband scenario for a variety of used cases and we’re continuing to talk to a number of parties.

John mentioned some of them in his words but we have really continued to evaluate all kinds of ways in which we can find the highest and best use of our spectrum, both looking at different technologies, different applications and different vertical industries and really just try different ways in which we can create value out of our assets..

And a good chunk of that to tie it back to the question on utilities at the front end or the first piece of that David on incumbence.

A lot of that is focused in the utility space and having those conversations about commercial relationships and opportunity, we end up speaking with the incumbents and non-incumbents who have an interest in broadband as well..

David, this is Morgan.

There’s probably two kinds of utilities, the ones who are incumbents is 900 and the ones who aren’t and that the ones who aren’t of course have no hesitation about discussing their plans for new uses of technology and could whether it be their own spectrum or whether it would be our spectrum and in some type of creative relationship and we talked about that from the outset.

But then again on the on the, on the incumbents, we have a broad range of discussions involving the ways in which we can creatively address current concerns, on the Unitarian side but also potential opportunities for other technology approaches.

For example, we have the way our channels are deployed, the way they were assigned by the FCC, we had as many as 10 prominent nuclear channels are contiguous of the backup offers an opportunity to do interesting things.

Under current rules, it is not the direction that we set out to accomplish with the three by three broadband and that continues to be our goal, but there are interim steps that we can take to address immediate needs..

These things, Morgan just on that point, that that gives you that what you are exploring here gives you greater confidence in terms of or maybe just in terms of positioning your solution in front of the regulars, in terms of what it can achieve and just giving you kind of more optionality....

Yes, I think it does.

And one way to look at this and of course I’m preaching to the [Indiscernible] a few, but when we started this which was two years ago, there was nowhere near the same interest in development in low-power types of wireless, and that the emphasis was all on which you could do with the licensed spectrum and since then there is this great interest that the commissions and others had on unlicensed spectrum and the synergy as we said in our statement about combining licensed and unlicensed in various technologies and the ability to look at spectrum for a low-power whether it's the Laura or whether it's a Narrowband IoT, these opportunities are out there and on the assumption that the SEC puts out relatively, broadly phrase noticeably inquiry, I would expect that we and others will drag the commission's attention to all those opportunity..

And David, lot of this comes out of the as our highest priority is to win our regulatory effort there.

A lot of our commercial discussions have come out of the regulatory process, because in speaking with the incumbents in the band there are and others, there are those real needs and we have participated in a number of industry associations and events where we get into discussions around the commercial opportunities.

What are their problems? How can we help solve them? And our spectrum position as Morgan mentioned is obviously nationwide and we can put blocks of it together today to work on like for instance, this field area network solution our spectrum is perfectly suitable to some of the existing technologies and eventually that also we believe will lead to more support, because you’re out there and talking to all the players in the industry..

So in a nutshell then to clarify that you are looking at leveraging the trials and the work that’s being done in a complementary fashion in the high band, the higher band, some of the unlicensed, spectrum band for example to try to achieve to some extent to see the goals and objectives of these utilities and in doing so highlighting that kind of partnership or a combination of kind of low-band plus the high-band could meet and hopefully exceed their needs?.

Yes. There are unlicensed bands currently and some in process.

Our 90 900 megahertz band happens to be conveniently located adjacent to the 900 megahertz ISM band is one of them which is a natural for us cooling with lot of the unlicensed technologies that are being discussed and deployed the opportunity use multiple bands of unlicensed along with our spectrum is going to avail..

And in the past the broadband exist and we talked about that as well with down the road the ability to aggregate in unlicensed with the broadband solution too bearing license. So it’s all kind fixed together as we look out into future here..

And do you see any utilities [trailing] these solutions in the unlicensed band within and seeing the carriers looking at this, but you’re seeing any utilities that are exploring this?.

The largest category of IoT today is really smart meters and lot of those smart meters are on licensed today. So they are users in unlicensed. But I think depending on utility there's various levels of experimentation.

We just to pretend that the distributed checks here which is a big industry conference for the utility industry and there you can see every major industry player, provider of equipment and services demonstrating different technologies to be able to provide for Narrowband to Broadband services.

So there’s a lot of technologies and solutions that are being offered up, the adoption rates are necessarily the fastest in the industry but there’s clearly an appetite..

Okay. Thanks very much..

Thank you, David..

[Operator Instructions] Your next question is coming from [Tom Kito]. Sir, your line is live..

All right. Thank you. Good evening everyone and thanks for the call as always. Hey question just back to the operations a little, I don't have every cash balance memorized, but it seems like you been north of 100 million for almost since day one, right.

What is your look for the next year or two of cash burn by year? Is it 6 million a quarter or what is it? And what’s the minimum level of cash that you want to kind of keep on the balance sheet?.

So, Tom, we’ve kind of normalized the runway the last two quarters at around $6 million to $6.5 million a burn. We ran a quarter or two excessively higher than that.

When we were running with the FirstNet bid our intent without giving getting forward-looking guidance is to stay within the range of this normalized run rate that we've been on, now that may creep up as we add more personnel and many more resources to move the FCC process forward. But our intent is not to shoot that up significantly.

We from a minimum number I don’t want to put one out there for us going forward, I don’t think that would be -- yes, but we do that, [that's fine] where we are right now in into the foreseeable future..

Okay.

The second question just by look at your income statement your G&A is around $5 million this past quarter, $18 million for the nine months then your sales and support and product and development and within the G&A how can you just going to in a really broad-based way frame with the absence of many more detail here, frame those numbers along FCC related endeavors and new business in the seven markets space, is there a way to think about where your spend has been there?.

From a G&A perspective comment, most of what is inherited the couple of items; one back-office support and finance, HR et cetera; second is our strategy and business development efforts. And they are previously not in this quarter were most of the FirstNet efforts into that's really the main key drivers within G&A..

And within that business development the regulatory efforts in the team that supports that and we have a great team that's working on both internally and externally and all of those costs would be in that as well..

Got it.

I was just trying to frame like where on the seven businesses and obviously don't give under three or four runs, 3000 or 4000 units is as you said you where thought of a breakeven if it all or that's not really a near-term goal as you just continue to test things out, how should we look at that over the next few periods or as things develop here I guess?.

The way we look at that is if you look at on a by market level and market can get a breakeven of roughly just less than 4000 units. And so we move forward and with the growth that we are trying to see we're hoping to be able to move markets, hopefully several markets to cash flow positive position.

So they can start to fund covering the G&A and other expenses that are headquarters related. .

Fair enough. All right, gentlemen. Thank you very much. Have a good evening..

Thank you, Tom..

You have a follow-up question coming from David Dickson. Sir, you line is live..

Thank you. So just circling back on FirstNet for a moment, now the things that are winding down there with a spending behind this what's kind of the opportunity hit there. As we look at FirstNet now they're doing a lot of work in trying to get the sites on board.

If you talk to folks in terms of the traffic outlook, you’ve got Verizon on one hand saying that there is very loose definitions around applications and usage of the network, which is why they were involved. Because obviously they don’t think there will be significant traffic growth there in the front end at least.

So, what's your assessment of currently opportunity work with FirstNet going forward and you learned in the process so far?.

David, this is Morgan. I think the right way to look at this is that until the appeal process that's currently going on and I think it basically ends in March whether it get decided or it gets compromised before then.

But after that on the assumption and it seems like a pretty reasonable assumption that AT&T wins the bid since it appears that they were the only bidder to be found in the competitive range. Assuming that that process ends in March and the award is given to AT&T and FirstNet moves forward.

We see lots of opportunities for us to play a constructive role in the process going forward. There will be any number of opportunities for our people who have our kind of background to be supportive and helpful.

We're not interested and we have made it clear that we're not interested in playing any kind of the role encouraging, opting out by the states. But it will lessen in the process as this moves forward we see plenty of opportunity there should be constructive and helpful..

And I think all of it with an eye on these synergies that we talked about in our 900-MHz spectrum as well. So it will always tie back to our longer-term view of the potential there.

And in the meantime we've already seen benefit in our day-to-day business of dispatch or regulatory process by the relationships we've established a number of partners who have been involved with us in the 900 megahertz piece of the business now..

And just as an observation and I really don't have much more opportunity to observe than anyone else is on the outside of the process.

It seems to me that public safety in general is getting more comfortable with the idea of a dedicated network, and that if I had to bet I would say this will take off, it will take off slowly, but then it will gather momentum and be a very significant opportunity for AT&T..

Great.

On that front, I'm also interested in your thoughts maybe for Rob, often the work that’s being done inside the LTE standardization forums on the priority access networking, I think that's a real focus for the next generation of LTE standards obviously coming through, just your thoughts on the development that we're seeing there which could pave the way for others to start to encroach perhaps.

It could provide you with opportunity I'd like to just get your thoughts on that as well..

I think there is couple of -- well, first of all I think as Morgan said we always talked about how we think our spectrum is complimentary to what's being done with FirstNet our ability to serve additional segment and critical infrastructure otherwise would prioritize that as we state in our petition.

So any support to the technology that allows that to happen on a orderly fashioned I think is beneficial and allows the others to be able to do so which would be good for us.

But I think from a technology standpoint we continue to look at various technology in addition to LTE and the 3GPP standard to be able to understand best and most effective complimentary ways to use our spectrum and also to get cost effectively built out as part of that process..

Okay, great. All right. Terrific. Thanks, John..

John Pescatore:.

.:.

[Operator Instructions] Sir, there are no further questions in queue..

Well, we want to thank everybody for being here today and we'll look forward to our next one. And as always any questions come up after feel free to contact us. Have a great evening..

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..