Anterix Inc.

Good afternoon, ladies and gentlemen, and welcome to the Antarex First 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. Ma'am, the floor is yours.

Thank you, Katherine. Good afternoon, and thank you all for joining us. With me today are Brian McCauley, our chairman, Morgan O'Brien, our CEO, Rob Schwartz, our president and COO, and Tim Gray, our CFO. Before we begin, please note that our discussion may contain forward-looking statements and our actual results may differ materially from those implied. Information regarding the risk factors that could cause such differences can be found in our public filings, including our most recently filed 10-K and form 10-Q for the quarter ended June 30th, 2019. With that, I'd like to turn the call over to Morgan O'Brien.

Thank you, Natasha, and thank you, everybody, for joining us this afternoon. Our investor day in late May was the last time we spoke with many of you. And since then, we conducted our successful capital raise just a few weeks ago. This incremental equity funding of $100 million sets in motion an acceleration of our retuning efforts to clear the spectrum and helps prepare us to monetize this valuable asset. Another important element of this raise was a core group of current investors who increased their position in Interix. We appreciate this continuing sign of confidence from our longer-term shareholders, and at the same time welcome many new shareholders from this offering. We gave a lot of thought to proceeding with the follow-on offering when we did, rather than waiting for the FCC's final order. We knew there would be a period of some months before the FCC acted, likely followed by that first customer lease of our spectrum. In the meantime, what could we do to be most effective in converting our spectrum opportunity to revenue? That first lease will require confidence in our ability to quickly provide clear spectrum, and returning incumbents will require capital. So rather than waiting to raise those funds, we opted to make the best use of the waiting period by getting the funding in hand now so we can proceed with retuning and begin immediately working to shorten the time to first revenue. In addition, as you might expect, we think minimizing the time from first lease to the availability of Clear Spectrum will have a very positive impact on prospective customers in our pipeline. We're adding new professionals to our experienced team who are actively reaching out to incumbent licensees to take the necessary steps to clear the proposed 900 megahertz broadband allocation. While prioritizing markets with the earliest commercial opportunities. We've already successfully reconfigured several large utilities and have acquired licenses from a number of incumbents. As to the all-important STC proceeding, on July 2nd, the period for reply comments closed. Those replies were notable not only for the growing support they indicated, but also for the absence of any unanticipated issues that they raised. Incumbent technical concerns were fully set out on the record before the NPRM was adopted, and the NPRM technical rules largely mirror the ones we had proposed. With the closing of the reply-comment round, we believe the state of the record and the FCC proceeding provides everything necessary for a final report and order, which gives us good reason for optimism. In addition to the strong support of our well-known allies like Southern Company and Ameren, The record now contains helpful statements from historically less friendly quarters. For example, in its comments, Southern California Edison wrote, Southern California Edison, one of the largest electric utilities in the United States, details the exigent circumstances that require utilities to have broadband access, including weather conditions like hurricanes on the Gulf and Atlantic coasts and drought wildfire conditions on the West Coasts. Threats from cyberattacks on utilities are also increasing and must be guarded against. SCE views the current proceedings as holding nothing less than the potential to have a defining, once-in-a-generation impact on the ability of utilities to continue to deliver safe and reliable power to their customers for decades to come. In its reply comments, the New York Power Authority said, The proposal of PDB Wireless Inc. and the Enterprise Wireless Alliance, and the Commission's notice of proposed rulemaking, if implemented, would provide New York Power Authority with a secure license spectrum to support its efforts to help modernize the electric grid in New York State. Specifically, such a realignment would support New York Power Authority's efforts to enhance its operational and programmatic capabilities and leverage the benefits of evolving innovation in wireless equipment. Another example, the National Rural Electric Cooperative Association wrote in its reply comments, broadband spectrum is necessary to support deployment of smart grid technologies in rural areas, such as digital supervisory control and data acquisition systems, called SCADA, to remotely monitor and control substation and fuel devices, teleprotection to guard against potentially hazardous faults, distribution automation to intelligently route power through the grid, Metering, video, security, and other applications. Importantly, from an FCC advocacy perspective, it isn't just the utilities that have supported the proposal. In its reply, United Parcel Service wrote, UPS generally supports the Commission's tentative proposal to reconfigure the 900 megahertz band to add a broadband service provided that narrowband operators are adequately accommodated and protected from harmful interference. There is broad consensus that realigning the 900 MHz band into two segments serves the competing needs of narrowband incumbents and prospective broadband entrants, assuming certain additional safeguards protecting narrowband operations are set forth in the rules. In another set of comments, General Electric stated, GE Renewables supports the FCC's proposal to create a 900 MHz private enterprise broadband segment will target the communications needs of industrial operations in a band with highly favorable propagation and penetration characteristics. It will provide our customers with a private broadband option for a system that is not tied to the Internet and therefore is less susceptible to cybersecurity problems. And also, from the reply comment round, the Wireless Infrastructure Association wrote, As the record reflects, realignment of the 900 megahertz band will facilitate the intersection of wireless broadband and the utility and critical infrastructure sector. New investment, new infrastructure, new jobs, and increased innovation will flow from a quick decision. Now, even outside the FCC proceeding, we're seeing support. For example, in its wildfire mitigation plan submitted to the California Public Utility Commission, San Diego Gas and Electric wrote, San Diego Gas and Electric plans to deploy long-term evolution, or LTE, using a dedicated radio frequency spectrum. This will improve the overall reliability of San Diego Gas and Electric's communications network, which is critical for fire prevention and public safety. Now I also want to make sure that I mention the progress that we're making with the railroads. As you know, Antarex has always recognized the railroad's unique nationwide 900 megahertz license that includes frequencies that are within the proposed broadband set. And we have worked with the railroads from the outset to craft an appropriate solution that would meet their current and future requirements. The goal was to incentivize the railroads to vacate their narrowband operations in the proposed broadband allocation in exchange for better spectrum lower in the band. Both in its comments on the record and in its related ex parte communications with the FCC, the Association of American Railroads has made a strong showing as to its need to retain its current 900 megahertz geographic footprint and a need for wideband or 125 kilohertz bandwidth that would be capable of supporting advanced train safety applications. So AAR, the Association of American Railroads, and Anterix have reported to the FCC a proposed frequency exchange agreement that would address both of these requirements. And we're optimistic that the FCC will adopt an AAR-specific provision consistent with the operational needs of the nation's rail carriers. So you can see that major players above and beyond our principal advocates are supportive of core elements of the NPRM. and I filed comments explaining why they need private LTE capability and why that need is urgent, all of which provides additional incentive for the FCC to move promptly. Now, to be sure, many of these same parties have disagreements with Enterix over how best to make broadband available at 900 megahertz. But at this late stage in the proceeding, it's up to the FCC to craft resolutions of these remaining issues. Based on our outreach, and on what we're hearing from others, including publicly filed notices of ex-party communications, we believe the commission staff already is in substantive discussions with parties to the proceeding and appears to be working towards a final outcome. We remain optimistic that the commission will adopt a final order before the end of the year. Certainly, we believe the opportunity is ripe for the kind of win-win that Washington politics thrives on but seldom sees these days. enabling a government agency to point to an action it has taken that will reduce the risk of damage, for example, from cyber attack and wildfires, with virtually no countervailing increase in risk to a competing interest. Now, just last month in a speech in Argentina, FCC Chairman Pai again asserted a key component of his spectrum policy. Quoting Chairman Pai, he said, we are pursuing and all of the above approach to spectrum policy. That includes freeing up low and mid band spectrum for next generation wireless services as well. Close quote. Now as our investors understand, the 900 megahertz proceeding is the only low band spectrum currently under consideration in the FCC's fast plan for next generation wireless services. So now August 2019, were five years into a regulatory process we started in 2014. We're seemingly on the verge of positive FCC action. Everything happening on the grid that is crying out for our solution. You may recall Southern California Edison's line about exigent circumstances that require utilities to have broadband access, ranging from cyber attacks, wildfires to natural disasters and the growth of data-centric smart devices. all of which heightens an awareness that action must be taken. Today, Interix has the capital in hand to make the spectrum available by aggressively pursuing the retuning process. Now I'll turn it over to Rob.