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Executives

Peter Boni - President and Chief Executive Officer

Safeguard Scientifics, Inc. (SFE) The Wall Street Analyst Forum November 17, 2008 11:10 AM ET

Analyst

Good morning, ladies and gentlemen in our ongoing attempt to inherit to the published schedule, I like to introduce the next company in today's financial services industry group. The fourth company today is again, different from the first three, in many ways.

Founded in 1953 and based in the suburbs of Philadelphia, Safeguard Scientifics, New York Stock Exchange symbol SFE. Builds value in growth stage technology and life sciences businesses, by providing capital and strategic operational and management resources to its portfolio companies. Safeguard participates in expansion financing corporate spin outs, management bios, recapitalizations, industry consolidations and early stage financing.

And I know from our universe there's about 300 or so biotechnology firm, those small cap companies are going through a lot of change right now. I would suspect that provides lot of industry to Safeguard Scientifics.

Safeguard targets technology life science companies with capital requirements between $5 million and $50 million. Safeguard status is a publicly traded company enables it to be a patient partner.

Safeguard is not subject to the limits of a 3 to 5 year fund raising cycle, typical with venture capital or buyout firms, enabling the company to focus on growing its portfolio company's value at an appropriate pace. In addition, gains from sales of portfolio companies are sheltered from taxes by its net operating losses and are ever greened on the company's balance sheet making scientific self funding.

Safeguard's expertise and leadership drive growth, build long-term value and enable business transformation for each of its portfolio company's. So, without any further introduction, I like to introduce Peter Boni, President and Chief Executive Officer.

Peter Boni

Thank you. Good morning. After that introduction, I should say are there any questions. I won't spend a lot of time with forward-looking statements I think, you know the drill. Safeguard is a holding company with interest in technology and life sciences businesses. We have 17 companies now in our holdings, about half and half technology and life sciences. Some very interesting investment opportunities we have attracted.

We provide growth capital to entrepreneurs. We have an experienced management team both operationally, as well as on the deal side and a competitive strategy that has some genuine differentiation to attract tomorrow's success stories. We're out to create value and then realize the value that we've created and today we have a significantly undervalued stock. We like to make you all shareholders you're buying in as absolute bottom.

Safeguard has a 55 years history of innovation. We're the first company of our kind listed on the New York Stock Exchange, actually the first one to do a rights offering, a subscription rights offering for a high technology company. And we've attracted a whole host of winners.

Actually over the years, Safeguard has put in billion of dollars into hundreds of companies to gain real returns for its shareholders, such winners as, Novell, Cambridge Technology Partners, QVC, Sanchez, Docucorp, Internet Capital Group, Traffic.com and whole host of others. We think this kind of track record is attracting tomorrow's success stories.

So, today our business model is real simple. We're deploying capital doing growth buyouts, growth equity financing and some selective early stage financing and we're partnering with entrepreneurs in technology and life sciences businesses. Working with them, to build value in our businesses, and then realize it with the well-timed exit.

We target a 3 to 5x cash on cash return as a minimum and we'll look for a three to five year kind of an exit. And valuing Safeguard it's a real simple exercise right now in the math, at the end of Q3 we had over a $100 million in cash when you do the convert. You expect the market value of our convertible debt and take net cash and the value of our one publicly traded company and our holdings you will find that those two exceed our market cap today. So with the other 16 companies are for free. That's the kind of value proposition that is here.

We have identified five strategic themes, in both technology and life sciences that drive their growth and attract entrepreneurial activity. Maturity, migration, conversions, compliance, cost containment. For instance, the population is maturing, medicines have their patents expiring, just like the technology infrastructure is maturing and the industry is consolidating.

There is migration of business models and technologies from one place to the other. The biggest theme is just the analog to digital. Information technology is converging within life sciences technology. Within life sciences, therapeutics, diagnostics and devices are all converging.

Regulatory compliance is now driving buying behavior, telling companies how to spend their money, HIPAA, Sarb-Ox, the FDA, the PATRIOT, the SEC are all telling companies how to spend their money and cost containment, you read it everywhere, whether it'd be spiraling maintenance costs in the IT infrastructure, or spiraling healthcare costs in every newspaper around the globe.

Major strategic themes like this do drive growth, they do attract entrepreneurial activities that Safeguard's business find it, give it the growth capital that needs to provide some operational support services, some strategic guidance, partner with the management and the entrepreneurial and [gold rate] business.

We have targeted some very specific segments in technology and life sciences. In the technology arena, the recurring revenue theme is what we're looking for. Software-as-a-service, technology enabled services, and some vertical software solutions, whether they would be internet-based businesses or IT healthcare operations. And in life sciences, looking for products and technology-enabled services and what we call the 4Ds: Diagnostics, Devices and Drug Delivery - or specialty pharma.

What’s not there is just as important as what is there. What’s not there is early stage biotherapeutics. New medications is somebody else’s business that has a technological and regulatory risk portion that we’re not signed up to; the FDA process for Diagnostics, Devices or Drug Delivery is substantially less onerous. And we would rather take operational risk, as opposed to technological and regulatory risk.

Our go-to-market strategy has a couple of components to it; one component is just geography. Safeguard Scientifics has been around for 55 years. The branded footprint in that mid-Atlantic region, very, very strong, after that 55-year period of time, but in 55 years, that branded footprint is still Southeast, Midwest – actually North, even into some of the southern provinces of Central and Eastern Canada

That’s where the outbound deal sourcing engine with two deal teams has been very strong. Now inbound deal sourcing, from other regions of the country through syndication partners, our advisory boards, bankers or what have you, can come in from anywhere. That's why some stars on the screen, which is the current location of our partner company or portfolio company is in California or Boston?

California and Boston basically are oversupported in terms of entrepreneurial activity. Statistically, we know that. Well we also know statistically that entrepreneurial activity in other regions of the country are undersupported than our world-class operations outside of California and Boston. But in our outbound deal sourcing engine, things come to us and if it fits our bill and we are really attracted to it, we will put money to works there as well.

We look to place $5 million to $50 million of capital for company as a range, where we are principally the primary shareholder, not necessarily the majority shareholder, in one case we are, principally with a primary shareholder. The largest institutional shareholder, able to exert a good deal of controlling influence on a company without owning control and our Board representation always mirrors the governance. And in some cases we have a smaller minority stake, maybe under 20%, but in a few cases.

Recognizing that our way of realizing value is, understanding what our exit strategy is, we always define our exit strategy on the front end of the game. We look for the five M's Management, Market, Model, Moment and Mode. By mode I mean, how defensible is the company’s position?

Our positioning as a company is substantially different than the venture capital or private equity positioning. Many people say to us, with Safeguard, aren’t you like a public private equity firm or perhaps you are like public venture capital firm. There is some similarity to the model, but there is some genuine differences.

From the entrepreneurs’ vantage point, we are not forced to do a premature exit, to return capital to limited partners. So we can raise a new fund every two years. A little bit more patience in our placement of capital. And as the introduction stated, our business model as a holding company really shelters any gains we have from taxes, by our NOL's and that money is now between down our balance sheet and we are self funding as a result of that.

We also offer operational support services and strategic guidance for the management team or entrepreneur. And so, as opposed to when faced with problems with a business, a member of the Board might say, well see I read something in business school in a case study, let regurgitate that to you or perhaps I saw some other problems in another Board on which I said, we have genuine operational scars on our back. And we can relate to some of the operational issues that management might face and provide much more strategic guidance that's more germane ore practical.

Now, we don't play quite as early as the venture capital community. We don't play quite as late as the private equity community. So, as a result of somewhat of an in-betweener, we're not playing so early that we're likely to face a goose egg in return and we're not playing so late that we don't have the opportunity for 10 to 20 [bagger].

Now, as an investor coming into Safeguard Scientifics, unlike being a limited partner and a venture fund, here you can put as little or as much to work as you want. In venture capital or private equity, if you were a limited partner, you have two choices as well, put a lot more or lot more in. Here you can get in our out at any time, plenty of trading volume, liquidity of a New York Stock Exchange vehicle as opposed to waiting several years for a distribution.

And as a New York Stock Exchange governance vehicle, we'll give you some transparency in to the performance of our company. So you can actually see their progress as oppose to cloaking them with a good deal of secrecy, lots of difference in our models.

Our management team is comprised of people that have both operational as well as venture capital banking deal experience. My own background after being a Fortune 500 Executive for a while, I went on and was CEO of a half a dozen companies in the technology space, growth maturity, trouble we knew a small as a fledgling startup include a $50 million, has an IPO and get acquired by Cisco.

As large as a Fortune 1000 New York Stock Exchange firm that was in turnaround mode, that turned had a good elevation in its value and then received a uplifted acquisition opportunities from CA and several things in between. Thereafter, I was an operating partner with Advent International. This is global private equity firm, based in Boston with $20 billion under management. I had two opportunities in Advent, one doing mid-market buyouts and the other one doing earlier stage venture investing.

Jim Datin on the left, who runs our Life Sciences Group, is also experienced in diagnostics devices in specialty pharma with such big [co-owners] as Glaxo, Baxter and Dendrite, both operational, and corporate M&A jobs and he's also been an early stage CEO him self, build value and got the recognition of that value with the good exit events.

He knows the game. He understands the drill, he has the main expertise and members of his staff do as well. He had MDs and PHDs on a staff than understand the science, but they've run businesses. He has an MD on staff that's been a CEO and COO in life sciences companies, two of them.

Kevin Kemmerer running the Technology Group similarly experienced. Kevin has an operational background, as well as in investment banking and venture capital background, as do members of his team. So this is the team with the same on the deal front, both technology and life sciences and they get the game.

Our legal and financial support operations also are comprised of people that have both legal and financial experience and they have operation experience. Brian Sisko our General Counsel has been a COO in a high technology holding company. Steve Zarrilli, our CFO in addition to working in private equity, has been both the CEO and a CFO in public and private settings. These guys get the game, we're the team with the speed, and we’ve been getting out for about three years. We're not just a singular team of people.

I am of the mindset that I never want to be alone ranger, I like friends and family along the way to help me out. We've put together alliances and syndication partnerships of some of the better known names in venture capital and private equity that we do partner with from time-to-time. And we've also put together a killer advisory board, with domain expertise in both the technology and life sciences arenas. Anywhere from the general partner responsible for life sciences and McKenzie to former Oracle Executives or members of the Gartneir group.

And our board of directors, similarly comprised of people that understand technology, life sciences, finance for the entrepreneurial gain. Our game plan is real simple, deploy capital in new hypertension situations, and build value in our holdings, realize the value with some selective well-timed exits and continue to provide our shareholders with more and more tools, so that the underlying value that we are building can actually be recognized.

I mentioned a dozen and a half companies, we have now in our holding half technology, half life sciences, you can see they are pretty well distributed in the segments that I have identified to you as areas of strategic interest to us and hence no one piece of risk is weighed at one particular area. We divide our partner companies into four different categories, starting from left to right, there is the developmental stage companies, the green is life sciences, the blue is technology.

Developmental companies are either in the FDA approval process or going through a beta test or just driving through initial commercialization with their technology. The initial revenue stage companies perhaps in the $1 million to $5 million revenue stream. They are out now in the market place gaining penetration for the science and technology. They don't have their management team fully baked out; they don't have their infrastructure fully in place.

Moving on, in the $5 million to $20 million size range are expansion-stage companies. Technology fully built out, infrastructure fully built out, management team fully built out, going through a rapid degree of growth; and then our high traction companies, $20 million on – maybe to a $150 million. So, if they are not profitable already, they are driving towards profitability, at least on a EBITDA basis.

An exit can come in any one particular category as opposed to only one category. We might get exits with developmental stage companies as we know big pharma has curtailed their R&D spending and they are scrolling all over the FDA approval processes and as they see numbers and trials that really strike their fancy, they could fix something up at that stage.

So, you don’t have to be far to the right to be exitable. Just to give you a couple of examples, of the kinds of companies that we have, I’ll pick a technology company in the far left Swaptree; and a life sciences company in the far right, Advanced Biohealings.

Swaptree is a new age e-commerce company. They have an analytics engine to enable the swapping for free of DVD, books, games, and music CDs online. And they have such an algorithm that is not just a one-for-one trade, it could be two or three or four different people figuring out how to trade what they want, the only thing that customer might pay is postage. They started in the marketplace a short while ago. We put our money in, in June. They have been growing at 300%, I believe a month, month-over-month in terms of their subscriber base, now approaching 0.5 million.

On the far right, Advanced Biohealings, we put our money in there about 1.5 year ago. ABH was a – is cellular base artificial skin used for diabetic and foot ulcer patients, if you have diabetic foot ulcers you have one chance in five of losing your limb. This would really [forced us], now this was a product in the marketplace in a company that was owned by a British firm, Smith & Nephew. Beautiful facility in Southern California, all the fanciest high-technology bioprocessing equipment, they never figured out the pricing model and they never figured out how to make money, they did what good British firms do, they close their business.

We partnered with [Kennet] venture partners, we acquired all the assets, hired all the people back, brought in the CEO and a Senior Management team, our people are operational and background and experience, we work with the management team, we redefine the pricing model. So, year and a half ago they went to market again, with the cellular-based artificial skin, in the February timeframe, I guess that's about year and a half or year and three-quarters ago, by March they were doing – by June they were doing a $1 million a month.

By September they were doing $2 million, by the following the March they were doing $3 million a month and the announced the $4 million a month, in the month of June. So this is a high growth opportunity for Safeguard Scientifics. We have a 28% ownership by the way at ABH and a 29% ownership on Swaptree. We have the largest institutional shareholder in each of those companies.

Since I came onboard, three years ago, we have deployed $120 million in capital in 15 different companies. And you can see the ownership ranging from 14% to 50%, half technology, half life sciences. Now since we put our money in we can point to a very significant – what is this? Don't send. It told us not to send. So help me out with the technology here guys.

Unidentified Analyst

(Question Inaudible)

Peter Boni

Thanks, John. We can point to some very significant areas where we have built value in our companies. If we have divested a business unit that doesn't make strategic sense for us, if we introduce new product and generated revenue for the new product that we introduce, if we expand the facilities, if we brought in some senior teams. All examples that we have built value in out holdings or if we turn some red box and started making money.

Also the same thing holds true in our life sciences businesses. I am going to get my script here. Tuck-in acquisitions, sale of non-core assets, new products, expanded facilities and many of our companies we have received recognition with industry awards, whether it be Product of the Year, put up by a Trade Association Inc, 500 fastest growing private technology firms or [Deloitte Touche] stocks 50 and many of our entrepreneurs have been recognized by Ernst & Young, as the entrepreneur of the year in that region. So all examples, where we have genuinely build value in our holdings since we put our money to work.

Now interestingly enough, on our balance sheet, when you read net asset values whenever shows mark-to-market. We are a holding company. We are not a regulator investment company. So what happens, that camouflages the value that we have built in our holdings is that GAAP accounting requires us to put the money as NAV, based upon the value when we put the money in. And we have to subtract any loss the company might have, or any impairment, we might give it.

We never view a loss is a loss. We view it as an investment. Once we mark the company down, GAAP accountant says we can never mark up or patch up again until we monetize it. This is how Clarient, our one public company in our holdings has a NAV on our balance sheet, that’s one fourth the market cap of our ownership of 50%, of this publicly traded company. Now, the other ones are harder to figure out, because they are privately held, as opposed to publicly held where we just take our shares, multiply it by the value. And you can see this, one-fourth of what the market value is.

Also, an example of building value in our company’s is the aggregate revenue of our company, which is now in the $155 million to $165 million range, and that’s a significant uplift from the previous year. That’s both on Life Sciences and Technology. We gave this guidance a year ago, and we most recently stated that our aggregate revenue guidance continues to hold, even in this economic climate. Although our Life Sciences businesses are doing better than we had forecast in the beginning of the year, and our Technology companies are doing modestly lower than our original guidance growing, but the growth has been retarded a bit by this current malaise going on in the marketplace.

We have also realized approximately $275 million of value from the legacy companies that were there inside of Safeguard when I came on Board. What we’ve done is, we’ve built value in those companies, and then found our exit path on them. We’re divested of some pieces of our companies that did not fit their core strategy.

To giving you an example of how our business model works, and how do you realize value, I will point to a company Mantas. Mantas was a analytics software company that Safeguard acquired from SRA International, this is a department with defense oriented firm in 2001, with the spin out. We acquired a 33% ownership at the outset and that ownership grew to 88% through a couple of years. That analytic software was oriented towards broad detection. They had both their financial services and a telecom oriented business unit.

What we did is, we divested of the telecom business unit and focused our efforts in financial services, where we build the business around anti-money laundering, as a statement of broad detection, as dictated by the PATRIOT. The business grew from scratch to $35 million, making 20% EBIT margins and then we sold the business to a division of Oracle for $127 million.

Now, the valuation metrics on this was about 40 somewhat percent greater as a mouthful of revenue than many of the software firms in the financial services world and it was 80 plus greater as a multiple of EBITDA. So, why we were able to get this kind of incremental valuation metrics? Well our company is big enough to move the needle. It's recognized by all of the industry pundits as the best of breed having leading technology. [Big owner] customers singing its praises, testimonial users and as a majority-owned business for Safeguard Scientifics, it was Sarbanes Oxley compliance.

No, aggravation quotient to make it compliance, no due diligence risk and highly accretive for Oracle to take that and leverage it on their organization and they are using this as a platform to more deeply penetrate the financial services world. So, our $83 million of gains sheltered from taxes by our NOLs and that's basically how our business model works.

To give you some financial highlights. We do have sufficient capital to fund deployments at the point it's over $100 million in cash at the quarter ending in September. We have genuinely unrealized value in our partner companies with real opportunity for value growth. Remember as a holding company, the revenues that we report on our quarterly result is from our majority-owned company's only and that's right now only one. We have 58% or 60% ownership of Clarient CLRT under NASDAQ, a Cancer diagnostic services firm.

We have almost $400 million in NOLs. So we will be precluded from taxation on our gains for a significant time to come. And as a holding company, we're profitable through well-timed exits. So this is a once in a while kind of a program as oppose to once a quarter programs. It's important to take a look at the management's incentive compensation program, as well. As the emphasis is value creation and exit value.

We get impacted with our cash incentives which are annual incentives, based up on our achievement of our objectives. But primarily we're focused on longer term value creation with our equity incentives. And divesting of good deal of our equity incentives are based upon the increase in our price to share number one, or a good cash on cash return for our investments number two. So, we're genuinely tied to hip of the shareholder and what benefits them will benefit us.

I’m almost at the end of this. You don't have to worry about redoing the technology for me. We have some key financial goals. We have some convertible bonds that were restructured by my predecessor in 2004. They are due in 2024, but the first put date on that is 2011. We'd like retire though. We have been acquiring our debt at a substantial discount over the last couple of years.

And I think to-date we've acquired over $60 million of that $150 million covert for 70 some odds cents in the dollars, so we have 91 at face value, we're up – and that’s about 60 at market value. We're exploring alternate sources of capital that we might use to invest side-by-side with us for enhancing our credit facilities. Always looking to improve the visibility of the performance of our existing investments and we have been reducing our overhead expense to the tune of about 25% year-over-year this year, so that's just – Safeguard Scientifics' story.

We are 55-year old business as a holding company, we're the significantly valued exciting businesses that we hold, half technology, half life sciences, we provide growth capital to entrepreneurs, we have experienced team of people building value, executing and looking to realize value. We'd like to make you all shareholders.

On that note, I'd be happy to take questions. Let me start in the front here.

Question-and-Answer Session

Unidentified Analyst

(Question Inaudible)

Peter Boni

The 370 million of NOLs was accomplished in a variety of ways. Number one from Safeguard to say history when the bubble burst, the internet bubble burst, Safeguard was positioned as an internet incubator, that was a hard place to be in that period of its history, but if we structured the good deal of its operations to get some stability and grow from there. Some of those NOLs were generated by that restructuring, but in our business model we have three complex methods of accounting. Right? We have consolidated accounting, we have equity accounting for the businesses that are 20% to 50% owned then we have cost accounting and many of our businesses will incur losses, we'd take those losses and they accumulate in our NOLs. Yes, sir.

Unidentified Analyst

(Question Inaudible)

Peter Boni

Do we consider ourselves the lender of last resort? No, not necessarily, however we are equity focused; we’re not debt focused.

Unidentified Analyst

(Question Inaudible)

Peter Boni

No. We’re not – we don’t consider ourselves the lender of last resort, but we are business people, and we will take debt into our companies, if there is an attractive reason to do so. In many cases, we have partnered with members of the venture debt industry, and they have come alongside us providing a debt capital, while we provide equity capital.

Unidentified Analyst

(Question Inaudible)

Peter Boni

The terms of the convertibles, the 2004 convertible was a $150 million. There were two and five eights as a coupon; that was $7.23 as a convert price. And the maturity date was 2024, the first put is 2011. This was done in the first quarter, I think, 2004, when the sun, the moon, the satellites were all lined up in the convert marketplace, so congratulations to my predecessor for pulling that one off.

Unidentified Analyst

(Question Inaudible)

Peter Boni

Repeat your question, sir. I didn’t understand it.

Unidentified Analyst

(Question Inaudible)

Peter Boni

Why would I say there were not more a value-oriented funds?

Unidentified Analyst

(Question Inaudible)

Peter Boni

Actually, a good deal of our institutional shareholders are value shareholders.

Unidentified Analyst

I mean the big guys? I mean…

Peter Boni

Well, one of our major shareholders is [Tivo Price] in their small cap value fund. Now [Tivo] has informed us that over the last several months, they’ve increased our position from 400,000 shares to over 4 million, so they genuinely see value – and this is a value-oriented fund, and many of our fund managers are – that whole of Safeguard are value-oriented funds.

I will also make another note on that. Thank you for reminding me. You know, when I walked in the door few years ago, Safeguard Scientifics’ shareholder profile was about 75% retail and 25% institutional and most of the institutional were the hedge funds. Today, we are about 70, 30 and a good deal of the institutional holders that comprise of 70% are longer-term value shareholders as opposed to shorter-term shareholders. And we still have a good retail base. Yes, sir in the back.

Unidentified Analyst

(Question Inaudible)

Peter Boni

If I wrote down the valuation of all the companies, my lawyers and accountants would have a real problem with what I have done. And so, there are analysts that follow our firm and they have…

Unidentified Analyst

(Question Inaudible)

Peter Boni

There are analysts that follow our firms and many of them have a target place in the $3 range per share.

Unidentified Analyst

(Question Inaudible)

Peter Boni

How long you before you take the public? Well in this climate I cant predict what’s the IPO formula might be, but in a healthy marketplace, the venture capital formula is oftentimes that 80% to 90% of their portfolio is exitable through the M&A process, as opposed to the IPO process. And just getting to an IPO isn’t necessarily an exit.

Unidentified Analyst

(Question Inaudible)

Peter Boni

At what point in holding the company will we determine, what doesn’t work in? Well let me give you an example of Safeguard and some of the mindset has given this as an operational company. The previous team invested in a firm called ChromaVision, now ChromaVision was a cellular -- I think automated cellular system that was used -- sold to the diagnostics community to evaluate cells. The [dog] didn't hunt for that particular piece of equipment.

Now, a typical venture capitalist might have closed the business. Safeguard Scientifics recruited a new CEO. We used the platform that we had, reformed the management team and put the business towards cancer diagnostic services. We divested of the cellular system hardware. We got 12 point something million dollars from Carl Zeiss Microimaging, a large German company, formed a strategic alliance with them.

Over the last four years, now that ChromaVision has been renamed to Clarient CLRT on the NASDAQ, it has revenue of over $60 million. It’s profitable. It started out in cancer diagnostic services with breast cancer, its now representative in all five major forms of cancer breast, prostate, lung, lymphoma and colon.

It is also the first and today the only cancer diagnostic services firm that can transmit an FDA approved image over the internet. So, is that an internet company or is that a cancer diagnostic services company. It embraces one of those strategic trends. Strategic trends I discussed to you. So at what point will Safeguard cut dates and say this isn't working?

We haven't and my management team hasn't got there yet with any of our companies to date. But we've faced that with ChromoVision and we cut date by refocusing the business and we have now a [Deloitte Touche] fast 50 company, that's public, traded on the NASDAQ and even as of last week, when I last looked at the stock the prices of stock was about 2.25x the price of the stock when I walked in the door three years ago, that's one example.

And I'll hand back. One more question. I'll take one more question from somebody who hasn't asked? I'll take one more question from somebody who has. Yes.

Unidentified Analyst

(Question Inaudible)

Peter Boni

Many institutions can't buy a stock when there is no dividends would we consider a dividend? Conceptually speaking, if we have more cash than we have the ability to place, we'll take a look at anything that we'll render shareholder value. To date, we have not been a dividend oriented stock.

Unidentified Analyst

(Question Inaudible)

Peter Boni

We'll evaluate anything that will put money into the shareholders pocket. To date we haven't take that approach.

Thanks very much for your time and your interest. I'd like to make you all shareholders.

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