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Safeguard Scientifics, Inc. (NYSE:SFE)

Q2 2009 Earnings Call

August 5, 2009 9:00 pm ET

Executives

John Shave - VP of Business Development and Corporate Communication

Peter Boni - President and CEO

Stephen Zarrilli - SVP and CFO

Analysts

Robert Labick - CJS Securities

Bill Sutherland - Boenning & Scattergood

Collin Gillis - Brigantine Advisors

Sam Rebotsky - SER Asset Management

Operator

Welcome to the Safeguard Scientifics 2009 second quarter results conference call. At this time all participants are in listen only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions)

It is now my pleasure to introduce your host Mr. John Shave, VP of Business Development and Corporate Communication for Safeguard Scientifics. Thank you Mr. Shave, you may begin.

John Shave

Good morning and thank you for joining us for Safeguard Scientifics second quarter 2009 conference call. Joining me on today’s call are Peter Boni, Safeguard’s President and Chief Executive Officer and Steve Zarrilli, Senior Vice President and Chief Financial Officer. During today’s call Peter will review the quarter's highlights. Following Steve will discuss the financial results and strategies for Safeguard. Then we will open the lines for your questions.

Before we begin, I must remind you that today’s presentation includes forward-looking statements. Reliance on forward-looking statements involves certain risks and uncertainties including but not limited to the uncertainty of future performance of our portfolio of companies and the risk of acquisitions or dispositions of interests in portfolio of companies, capital spending by customers and the effect of economic conditions generally, as well as the development of technology and life sciences markets in which Safeguard focuses.

During the course of today’s call words such as expect, anticipate, believe and intend will be used in our discussion of goals or events in the future. The company cannot be certain that final outcomes will be as described today. Safeguard’s filings with the SEC including our Form 10K describe in detail the risks and uncertainties associated with managing our business. You are encouraged to read these filings.

The company does not assume any obligations to update any forward-looking statements made today. And with that, here’s Safeguard’s CEO Peter Boni.

Peter Boni

Thanks, John and thank you all for joining us today in our Q32 progress report on Safeguard and are now 18 portfolio companies. For the Safeguard team execution of our strategic game plan and focus on fundamental blocking and tackling led solid performances during the three months ending in June.

Despite a weak economy, we are encouraged and actually confident about our teams’ ability to put points in the board in the second half and beyond. During the quarter, aggregate revenue was up 40% from the same quarter last year.

Our guidance on aggregate revenue for 2009 remains unchanged. We continue to expect total aggregate revenue in the range of between $200 million and $220 million for the year.

Our second quarter results validates Safeguard’s game plan, which calls for the deployment of growth capital and the development of high potential life sciences and technology businesses that exploit five strategic trends, maturity, migration, convergence, compliance and cost containment.

We time our exits from portfolio company ownership positions to achieve maximum risk-adjusted returns on capital of 3 to 5 exit at a minimum. Exits maybe realized through privately negotiated sales of securities or assets, public offerings of portfolio company securities or in a case of a publicly traded portfolio company, the sale of securities in the open market.

Our deal teams are actively evaluating opportunities to deploy modest amounts of capital, subsequent to the quarter ended, Safeguard deployed $6.7 million into a new technology company, MediaMath, a leading online media trading company based in New York City that enables advertising agencies and their advertisers unprecedented reach and performance through a powerful combination of algorithmic bidding and unique data integration, creating the efficiency of search with the branding impact of display advertising.

The company serves billions of highly-targeted ads per month on behalf of over 20 top-tier agencies, including all of the major agency holding companies. So, we welcome MediaMath to the Safeguard team.

Our deal teams are also actively evaluating opportunities to realize value through well-timed exits. However, in the face of the current recession and the turbulent credit markets, this poses an issue. Potential partners star per growth capital, transactions of possible and compelling evaluation if they meet our strategic criteria and since we are focused on maximizing cash on cash return, this is an optimum time to achieve exits in most of our portfolio companies.

We said this before and it bears repeating, we will remain disciplined and focused on enhancing value in our portfolio of companies rather than pursuing exits simply for activity sake. Exit opportunity may arise from time to time, but in this challenging business climate we are working everyday to build value in our portfolio companies, drive their growth and keep their spending plans in line.

1

Now, let’s drill down to the progress on Safeguard is now 18 portfolio companies during the second quarter. At the top of the list is the completion of the mid May placement of $40 million by portfolio company Clarient with Oak Investment Partners. This transaction benefits all parties including Clarient, Oak and Safeguard for a variety of reasons.

For Clarient, which is traded on the NASDAQ under the ticker symbol CLRT proceeds from the deal extinguish substantially all of the company’s debt, except for accounts-receivable facility. For Oak, a multistage venture capital firm with more then $8 billion in committed capital, this transaction now gives Oak a meaningful stake in a fast growing well-positioned leader in cancer diagnostics services. Oak owns approximately 21% of Clarient's outstanding on an as-converted basis.

For Safeguard, the private placement directly strengthened our balance sheet. The transaction released $12.3 million in cash that guaranteed Clarient's third party borrowings and extinguished a $30 million mezzanine debt facility with Clarient, which allowed us to recapture $19.5 million of that amount in cash previously advanced to Clarient. Lastly, the transaction also eliminated our commitments for future funding.

Now yesterday, Clarient reported its 20th quarter of sequential revenue growth. Clarient also raised their 2009 revenue guidance from $96 million to $101 million. Safeguard now owns approximately 47% of Clarient outstanding shares, down from 60% at year end 2008. The market value of the Safeguard's holding in Clarient was $180 million on June 30th and at market close on August 4, it stood at $192 million.

You may be aware that Clarient recently filed a registration statement on Form S-3, relating to our holdings of approximately 46.5 million shares and 2.8 million warrants at various stake prices. The filing which is not yet affected is intended to facilitate possible block sales of our Clarient shares to institutional investors from time-to-time. The filing was routine replacing our registration statement that expired in February 2009. The filing does not represent a change in plans for our Clarient stake. Proceeds from any block sales would further enhance Safeguard's balance sheet strength.

Now, moving on, lets highlight some of our developmental stage companies that our proving our technology, developing prototypes, refining the business models and building partnerships.

Avid Radiopharmaceuticals, Inc. is a leader in the development of molecular imaging products to enable early diagnosis and prognosis of neurodegenerative diseases. Avid remains on track with FDA Phase III trials for its lead compound, for imaging amyloid plaques in the brain for Alzheimer's disease, following Phase II results.

Avids Parkinson’s disease imaging compound is currently in Phase II trials. Their CEO Dan Skovronsky, was recently named the 2009 Ernst & Young Entrepreneur of the Year in the Emerging Company category for the Greater Philadelphia area. Congratulations, Mr. Dan. Safeguard has deployed $10 million of capital in Avid since May 2007 and we have a 14% ownership position.

Molecular Biometrics, applies novel metabolomic technologies to develop accurate, non-invasive clinical tools for use in personalized medicine. During the quarter, the company’s non-invasive process that increases the probability of pregnancy and reduces the incidents of multiple births from in vitro fertilization was rolled out in Asian, European and Australian markets.

In the US Phase III clinical trials remain on track. In addition, the company recently received the 2009 Canadian BIOQuebec Genesis Award, given annually to the leading bio companies that determined by independent industry criteria. Safeguard deployed $6 million of capital in Molecular Biometrics since September of 2008 and we have a 38% position.

Swaptree, the on-line platform for trading books, CDs, DVDs and video games, continues to grow its user base and enjoy positive media attention. Recent accolades for Swaptree include two Massachusetts Innovation & Technology Exchange Awards for top honors in the 2009 Social Media category and the Best Overall Solution. Congratulations the Swaptree.

Safeguard deployed $3.4 million of capital in Swaptree in July of last year and we have a 29% ownership position. Garnet BioTherapeutics, NuPathe and Tengion all are on track with their respective Phase II or Phase III trials as planned.

Five of Safeguard’s 10 life sciences portfolio companies are at the revenue stage. Three are at the initial revenue stage, Alverix, Cellumen and Rubicor Medical. Four of our eight technology companies are at the expansion stage. They include Authentium, Beyond.com, now MediaMath and Portico Systems, which are all growing revenue consistently with solid management teams.

I would like to highlight one of our technology healthcare IT companies, which could very well move in to the high traction base probably before the end of this year. Portico Systems offers software and services to health plans to help them reduce administrative, medical and IT costs.

Portico continues to grow revenues at double-digit annual rates. Through recent acquisitions, Portico now serves 33 healthcare systems with 42 million members nationally.

During the quarter, the company was included on the Healthcare Informatics 100 list of top healthcare IT companies in the world for the second consecutive year. Congratulations to Portico. Safeguard has deployed $9.3 million of capital in Portico since August of 2006, and we have a 46% ownership.

Safeguard's high traction stage portfolio companies, Advanced BioHealings, Advantedge Healthcare Solutions, Bridgevine and GENBAND and Clarient, all reporting solid growth, nearing breakeven or driving further bottom line profitability and gaining additional commercial traction. I have already talked about Clarient, but let me highlight ABH, AHS and Bridgevine.

AHS or Advantedge Healthcare Solutions, uses a proven, proprietary, software platform to deliver medical billing solutions to physician groups. AHS moves into this high traction stage as a result of its continued organic growth as well as its strategic acquisition, having recently announced its acquisition of Physicians’ Service Center a premier medical billing company in the Midwest with primary operations in Lombard, Illinois.

This acquisition makes AHS one of the top 25 medical billing firms in the US. Safeguard has deployed 11.5 million of capital in AHS since November of 2006 and we have a 39% ownership.

Now ABH or Advanced BioHealing, is a leader in regenerative medicine, and its [gone a tier] during to quarter. Demand is surging for ABH’s FDA-approved Dermagraft for diabetic foot ulcers. Annual cases of diabetic foot ulcers in the US are estimated at nearly $1 million costing our healthcare system over $1 billion annually due to lower extremity amputations. ABH is aggressively expanding its US commercial sales force and exploring new applications for its products in both domestic and international markets. We deployed $10.8 million of capital in ABH in February and May of 2007 and have a 28% ownership.

Bridgevine, is the leading Internet marketing platform that allows consumers to compare and purchase digital services online, such as Internet, telephone, Voice over IP, TV, music and alike. Now, despite reduced activity in housing markets, the Company continues to expand its lineup of products and services and continues to grow it’s merchant base and it continues to explore strategic opportunities.

During the second quarter Bridgevine also launched its consumer-facing comparison shopping and saving website, OfferWire.com. Safeguard has deployed $10 million of capital in Bridgevine since August of 2007 and we have a 24% ownership.

Now I will turn the call over to Steve Zarrilli, our CFO and Steve will review the Safeguard financial strategies and our performance. Steve take it away.

Steve Zarrilli

Thanks Peter. Our second quarter earnings news release and financial statements were distributed earlier. I would be happy to elaborate on those details during the Q&A period. Peter outlined many of the key benefits to Safeguard that stem from Clarient's private placement. In addition the transaction changes the accounting treatment of our retained interest in Clarient.

Safeguard’s position in Clarient was reduced to approximately 47% upon the completion of the private placement with Oak Investment Partners. When Safeguard’s position in Clarient exceeded 50% we consolidated Clarient’s results in our financial statements.

Effective of May 14 the date of the second tranche of private placement, we deconsolidated our Clarient holdings and recognized an unrealized gain in income from continuing operations of $106 million. The entire amount of that gain relates to re-measurement to fair value of Safeguard’s interest in Clarient as of the deconsolidation date of May 14, 2009.

In addition since we have chosen to apply the fair value option to account for our interest in Clarient going forward, marking to market our holdings as of June 30, 2009 resulted in an additional unrealized gain of $52.5 million.

Previously our Clarient position was accounted for in our balance sheet at its carrying value, which was $21.5 million prior to the deconsolidation. As we mark our continuing Clarient holdings to market each quarter end, investors will have better insight into the market value of our ongoing stake in Clarient.

Our ownership in Clarient currently totals 46.5 million shares of common stock, plus an additional 2.8 warrants at various strike prices. At the market's close on August 4th, Clarient share price was $3.96, making Safeguard's position worth approximately $192 million. We will recognize a gain or loss on such fair value accounting each quarter depending upon the movement in Clarient's stock price during the quarter.

Balance sheet strength and prudent use of cash remain Safeguard's top priorities for 2009. We intend to continue to evaluate and pursue opportunities to reduce operating expenses where possible, retire convertible debt at a discount, manage cash deployments conservatively in our support of portfolio companies, and augment existing capital with well timed exists or alternative pools of capital.

Our debt to equity ratio was approximately one to one on December 31, 2008, and today it's approximately 1 to 3. Our goal is to be debt-free by or before the first quarter of 2011, where are the put date, for our converts exists as well.

At June 30, 2009, we had 92.7 million in cash, cash equivalents and marketable securities including cash held in escrow of $6.9 million. Our cash balance decreased $2.1 million from year end 2008 primarily due to cash operating expenses for the period of $7.2 million, deployment of a combined $11.2 million during the period to support the capital needs of existing portfolio companies and net receipts of $15.4 million from Clarient for the repayment of principle and interest under its mezzanine facility and other payables with Safeguard.

The first priority in our use of cash continues to be the support of our current portfolio companies in their value building activities. Given today’s macroeconomic climate, we will remain nimble and flexible changing as external condition warrant.

On last quarter’s call, we reminded you that our expense control initiatives during 2008 reduced annual operating expenses by 19%. Through the first six months of 2009, corporate operating expenses were down to further 8% to $8.7 million in comparison to $9.4 million for the same period last year. The principle element driving this change include a continue expense control related to professional fees.

Earlier Peter noted that our revenue guidance for 2009 is unchanged. We expect aggregate revenue of Safeguard’s continuing portfolio companies to be in the range of $200 million and $220 million for the year.

For our life sciences portfolio companies, 2009 aggregate revenue is projected to be within a range of $145 million to $155 million. For the technology group, we anticipate aggregate revenue to be between $55 million to $65 million.

GENBAND and MediaMath are not included in our revenue guidance and portfolio companies Avid, Garnet, NuPathe and Tengion are pre-revenue companies and will not impact our aggregate revenue expectations.

As you may recall there is a one-quarter lag in reporting our interest in the result of minority-held companies.

Now with that I will turn it over Peter for any further comments.

Peter Boni

Okay thanks a lot Steve. [Natalia], I think we are ready to take questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question comes from Robert Labick with CJS Securities.

Robert Labick - CJS Securities

Couple of questions, first I wanted to ask you. You talked a little bit about on the sell registration on Clarient. Could you maybe give us a little more details, when would that become effective and then and more importantly if you could maybe help us outline your priorities with cash if you were to make some sales, as it relates to debt pay down, share repurchase, incremental investments in your current holdings and then new investments over the portfolio?

Peter Boni

Why don’t I ask Steve to pick that up for you Bob.

Robert Labick - CJS Securities

Great.

Stephen Zarrilli

So Bob we are still in process with the SEC so there is no further information at this time that we can share. As we stated, we are going to use that registration statement too at times potentially sell blocks of shares of Clarient to institutional shareholders and there is no defined plan as of yet for those types of transactions.

We will continue to explore ways in which to put capital to the work in the future, if I understood the second part of your question properly in the manner that we currently use today.

We are going to also remain mindful of the obligations we have under this convertible debt securities and ensure that that is our priority in the use of cash going forward.

Robert Labick - CJS Securities

Okay. And then just going to your companies, you have I think three companies in Phase III trials. I was wondering if you could offer a little more color on, kind of timing of when those trials might end.

Then specifically as it relates to NuPathe, you mentioned in the release that there you expect an NDA in 2010. For the generalists among us, could you help us understand what that means as it relates to timing of revenues and maybe the opportunity for NuPathe in 2010?

Peter Boni

We do expect that NuPathe would proceed in its Phase III trials. They’ll be in a position to make their progress known when they’re ready to do so, but they’re progressing according to our plan, and through Phase III then they go into a prospective revenue mode later in 2010. I would say in fact, later in 2010 it’s likely to be 2011 revenue.

Robert Labick - CJS Securities

Okay, great. And could you remind us the market opportunity for NuPathe?

Peter Boni

There’s a $500 million market opportunity for migraine and that’s just in the US alone.

Robert Labick - CJS Securities

Great. And then just moving to Rubicor, you mentioned in the release that you are positioning to move into bankruptcy to regroup your investments there? Can you just explain the situation and tell us what’s gone on there?

Peter Boni

Well, we have proceeded with other people to proceed to put Rubicor into the liquidation mode. Therein lies the opportunity we think to realize the greatest amount of value for the intellectual property that is there for all shareholders and debt holders alike.

Robert Labick - CJS Securities

And what would be the timing of any such event?

Peter Boni

I can’t predict.

Operator

(Operator Instructions) Our next question comes from Bill Sutherland with Boenning & Scattergood. Please proceed with your question.

Bill Sutherland - Boenning & Scattergood

Bridgevin, Peter. Give us some sense as the economy gets on its feat what you think their prospects will look like? They are doing a nice job here of leaning into the headwinds, I'm interested to see what you guys think about the economic sensitivity there?

Peter Boni

Actually Bridgevin has done some interesting things to position itself from a revenue perspective. On one hand, activity for them really is based upon number of people that move in this country and when you move you change your Internet service provider, you change your cable provider; you change many providers of digital services.

We all know that the moving machinery has been somewhat retarded in this country. They have also position themselves with varying vendors with the kiosks, I’ll give you one example where as Sears, Roebuck Store, where they sell an [awful] lot of plasma TVs. After the purchase of a plasma TV, the consumers walked over to a kiosk that can define all the varying services for the kind of TV that he has purchased, in his particular area of geography, and then make the selections accordingly.

So, it's a revenue stream that's coming about in several different ways. So, they continue to grow on a year-over-year basis. Whereas the economy overall is not cooperating for them. They are highly innovative and they continue to see growth.

Bill Sutherland - Boenning & Scattergood

You would expect some acceleration you think, Peter?

Peter Boni

Well, as the moving machinery gets back to work in the US, we think the headwinds that they face will become tailwinds. That could accelerate the existing growth what they are already seeing.

Bill Sutherland - Boenning & Scattergood

The other thing I want to ask you as far as portfolio companies, with a little more color on MediaMath in terms of their economic model or I should their good financial model, in other words are they like a media company in terms of how they make money?

Peter Boni

I’m vigilant to display ads what’s Google does the keywords if you will. Their revenue model is, I guess they have top lined its gross revenue, which is the advertising itself and then their piece of that, which is their net revenue.

Bill Sutherland - Boenning & Scattergood

I got it, okay.

Steve Zarrilli

Hey, Bill. This is Steve. Just as a further point of information. So, MediaMath will like many media organic companies, they will focus on that net revenue number rather than the gross revenue number.

Bill Sutherland - Boenning & Scattergood

Right.

Steve Zarrilli

All of our assessments of their business model and their opportunities for growth in the future have been driven around understanding how that net revenue model continues to build.

Bill Sutherland - Boenning & Scattergood

Peter you said that on a net revenue basis, they fit in to which year buckets?

Peter Boni

The third bracket, the expansion stage companies.

Bill Sutherland - Boenning & Scattergood

Okay. I wanted to understand Steve, a little bit more on the cash flow in the quarter. I think it was quarter that you talked about with $7.2 million of cash expenses?

Steve Zarrilli

Well, for the year there has been a net decrease in cash $2.8 million. During the quarter, there was approximately $3.5 million of cash used for operating expenses and about $7.4 million used for follow-on investments in existing partner companies.

Bill Sutherland - Boenning & Scattergood

That makes more sense. I was writing down the first half numbers there. So 3.5 for OpEx and how much for deployment?

Stephen Zarrilli

7.4, just so for your notes, we're running out at a pretty consistent rate now about $3.5 million of cash expenses per quarter.

Bill Sutherland - Boenning & Scattergood

Okay.

Stephen Zarrilli

And deployments obviously will be a variable number depending on what the partner companies need and what we maybe doing selectively with some new investments.

Bill Sutherland - Boenning & Scattergood

Are you looking to just shave kind of opportunistically on that cash expense burn or are there any significant things you have in minds at this point, Steve?

Stephen Zarrilli

No, now it's managing nickels and dimes and quarters to be honest. In every quarter we seem to be finding some further efficiencies. In the last six months we were able to renegotiate and refine much of our cost structure around professional fees as an example.

So that is adding to further efficiencies in 2009. So we continue to look for ways to find these nickels, dimes and quarters but the big dollars, I think we've been able to address and have that impact over the last 18 months.

Bill Sutherland - Boenning & Scattergood

And then the last one, again for you Steve is, give us a status update in terms of augmenting with alternative investment or capital. Thanks.

Stephen Zarrilli

We have been very active in that regard in talking to a number of parties. We spent a fair amount of our internal resources gathering data to be used credibly in that process. We would expect that by year's end, we will have chosen a partner to help us with that endeavor and then begin in earnest our activities around potential targeting of alternative pools of capital in 2010.

So we have actually increased our momentum internally and one other things that seems to be playing very nicely for us, from a strength perspective, is that as our balance sheet improves and as we are able to provide further visibility on our cash flow for the next two to three years, this evergreen funding model is being well received by the parties that we are having conversations with as a signal of strength and viability and sustainability. And that’s actually working to our advantage in this marketplace.

Operator

Our next question comes from Collin Gillis with Brigantine Advisors.

Collin Gillis - Brigantine Advisors

Peter just given the quantity deal flow that you see, can you make some comments in terms of evaluation trends and also velocity of the deals that you’re seeing?

Peter Boni

Well we have very active pipeline Collin, number one. And the private company evaluations are beginning to catch up with the public company evaluation metrics. There’s always a little disparity there, but especially on the technology end of the world, we’re seeing those evaluation metrics more in line now with what’s going on in public markets.

This is an extraordinary opportunity time for companies like Safeguard. This is an environment where only the very best companies will achieve financing and that will happen at very attractive price points.

Collin Gillis - Brigantine Advisors

So if you were just kind of look back over the last 12 months, when did you start to see the evaluations pick up?

Peter Boni

Of course last year we saw especially in the technology arena real decline in the metrics of public companies. There was several month lag between the catchup of the private company evaluation metrics and the public company evaluation metrics.

Frankly, we have had a few companies on our radar screen for a bid and we chose not to do some technology deals last year because we just didn’t like the evaluations. Those evaluations are more in line now with the opportunity that we see to have fun and make some money for our shareholders.

Collin Gillis - Brigantine Advisors

Just looking forward, how long do you think this window really lasts in terms of given all that ideal flow at more advantageous in terms.

Peter Boni

When it comes to being predictive on evaluation metrics and public markets, Collin, I will leave that to other people.

Collin Gillis - Brigantine Advisors

Fair enough. Thanks Peter.

Operator

Our next question comes from Sam Rebotsky with SER Asset Management. Please proceed with your question.

Sam Rebotsky - SER Asset Management

Yes. Good morning, congratulations Peter and Steve.

Peter Boni

Thanks, Sam. How are you?

Sam Rebotsky - SER Asset Management

Good. This is sort of a water shade. I guess this is something everybody has been waiting for a long time and gives you a lot more flexibility to do things, assuming the market cooperates.

Do you see in the next year either taking any of these entities public or how much long do you think? Is it various early stages with your investments, the 17, 18 besides Clarient or what’s your thoughts there?

Peter Boni

Well, we put our money to work, Sam with a target of 3 to 5 year exit. We started on the refurbishment of the Safeguard portfolio in 2006 and we have an environment right now that it isn’t particularly conducive to the best exit outcomes.

So, it’s hard to be predictive on that, but one would think based upon the timeframes that we have in mind, when we put our money to work, and how long we’ve been working on this particular strategy, that we’re nearing that time in plus or minus the next year or so, but it is very difficult to be predictive on a quarterly basis, as to when an exit would be realized.

Sam Rebotsky - SER Asset Management

Well, you’re doing very well. I guess the traction of Clarient would hopefully bring other people like Oak or Oak and some other investments at the opportune time. Good luck.

Peter Boni

Thank you, Sam.

Operator

This concludes our Q&A session at this time. If there are any other questions, please call Mr. Shave directly at 610-975-4952, and I would turn the call back over to management for closing remarks.

Peter Boni

Okay. Thanks so much, Tanya. I want to remind all of you that Safeguard will be presenting in a multiple of conferences throughout the remainder of the summer.

Next week, we are both in New York City at the WallStreet Research Small Cap Conference and in Boston at the Canaccord Adams Annual Global Growth Conference.

In September I believe there will be three opportunities to see Safeguard at the Rodman & Renshaw Annual Healthcare Conference in New York in the beginning of September, the middle of September in San Francisco with ThinkEquity, and at the end of September with the Maxim Group’s Annual Growth Conference.

So, on that note, I sure appreciate everyone’s interest and we look forward to keeping you up-to-date as to our progress.

Operator

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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