Safeguard Scientifics, Inc. (NASDAQ:SFE) Q2 2013 Earnings Call July 25, 2013 9:00 AM ET
John Shave - IR
Steve Zarrilli - President and CEO
Jeff McGroarty - SVP and CFO
Troy Ward - KBW
Bob Labick - CJS Securities
Jim MacDonald - First Analysis
Good morning, and welcome to the Safeguard Scientifics Second Quarter 2013 Financial Results Conference Call. All participants will be in listen-only mode. (Operator Instructions). Please note that this event is being recorded.
And now I would like to turn the conference over to John Shave. Mr. Shave, please go ahead.
Good morning, and thank you for joining us today for our second quarter 2013 conference call and update. Joining me on today’s call are Steve Zarrilli, Safeguard’s President and Chief Executive Officer and Jeff McGroarty Safeguard’s Senior Vice President and Chief Financial Officer.
During today’s call, Steve will review highlights of the quarter as well as other developments at Safeguard and our partner companies, Jeff will then discuss Safeguard’s financial results and strategies. After that, we will open the line for your questions.
As always, I must remind you that today’s presentation includes forward-looking statements. Relying on forward-looking statements involve certain risks and uncertainties, including but not limited to, the uncertainty of future performance of our partner companies, the risks associated with our acquisition or disposition of interest in partner companies, risks associated with our decisions about the deployment of capital and the effect of regulatory and economic conditions generally as well as the development of the healthcare and technology markets and other uncertainties that are described in our SEC filings.
During the course of today’s call, words such as except, anticipate, believe and intend will be used in our discussion of goals or events in the future. Management cannot be certain as final outcomes will be as described today. We encourage you to read our filings with the SEC, including our Form 10-K, which describe in detail the risks and uncertainties associated with managing our business. The company does not assume any obligation to update any forward-looking statements made today.
And here is Safeguard’s President and CEO, Steve Zarrilli.
Thanks John and thank you all for joining us today for the update on Safeguard Scientifics and our partner companies.
Safeguard and our partner companies achieved real progress and measurable growth during the second quarter. On the ground where steady focus and consistent execution are vital, we are genuinely encouraged by partner company development and the gradual improvement in the domestic economy and deal flow climate.
However, lately, optimism at the main street level is often obscured by macro level confusion of our monetary policy, political posturing and market fluctuations. Our optimism is supported by data, recent surveys of venture capital investors and our own growth strategies. Thomson Reuters’ data show that of 29 venture capital back initial public offerings to-date in 2013, 7 of them are trading above their offering prices. It’s also worth noting that all of those recent IPO’s with positive trading results are healthcare and technology companies.
The National Venture Capital Association and KPMG polled more than 100 VC investors during the quarter and found that nearly half of the respondents expect to increase the number of their investments this year by more than 10%. Information Technology was identified as a favorable sector to put money to work.
Certainly, you can count on Safeguard among those with plans to increase capital deployments in growth stage companies, especially in the technology and healthcare sectors. Longer term, we are working to increase Safeguard’s capital under management to a range of 550 million to 700 million by the end of 2015 from a current level of more than 400 million today. In the term, as a part of our sharpened focus on Safeguard’s core business, we intent to increase our roaster of partner companies to 25 by year end 2013.
In addition, we are working to realize solid risk adjusted returns from additional opportunistic access from partner companies our target is two exit transactions in 2013. We have three companies which are in active processes, excluding PixelOptics. We anticipate having greater clarity of success and timing by the end of September.
During the second quarter, we announced the resignation of Jim Datin who previously led our capital management team. Since I was named CEO in November of last year, it’s important to note that I’ve taken a more active role in the day-to-day capital management process here at Safeguard. As [audio gap] after significant review of organization design matters, I have implemented a flatter organization structure to drive Safeguard’s future growth. This proposed structure will provide a professional platform design to yield greater efficiency and effectiveness in deploying capital and realizing exits.
We previously stated that we intent to further develop our segment domain knowledge with several key hirers and did so subsequent to the quarter end with the addition of Al Wiegman, who has a solid track record in healthcare IT and medical technology, to support our ongoing search for high potential growth stage enterprises.
Al joined our other three senior capital management team executives, Dr. Gary Kurtzman, Phil Moyer and Erik Rasmussen who report directly to me and oversee our capital management team resources.
Safeguard’s capital management team continues to operate at a high level, screening a substantial number of leads through a process that we believe should result in the closure on average of four to eight deals in any given 12 month period. We remain focused on deploying capital in healthcare and technology sectors, including medical technology, health technology, specialty pharmaceuticals, digital media, financial technology, and enterprise 3.0.
Our aggregate partner company revenue guidance for 2013 remains unchanged at 250 million to 270 million compared with 197 million for 2012. At the halfway mark for this year, we believe that the majority of Safeguard’s partner companies are performing at or above their operating projections for the year. However, there are a few that are still working through some challenges.
To address the wide range of updates that we have at our partner companies, I’m going to focus on nine of them in order of revenue stage. For an in-depth detail as we stated earlier, please refer back to our press release. So, let’s start with the development stage companies. As NuPathe mentioned during its Q1 quarterly results conference call, the additional capital that the company will require to launch security and to fund operations and debt service obligations beyond that point, will depend largely upon the timing, scope, terms and structure of a commercial partnership for security. To meet its capital needs, NuPathe intends to raise additional capital through corporate collaborations, partnerships or other strategic transactions, debt or equity financings or other funding opportunities.
With respect to some initial revenue stage companies, PixelOptics, we recognized an impairment charge of 9.9 million during the second quarter of 2013. PixelOptics has completed the redesign or its product Empower and requires additional capital for commercial launch. As a result, PixelOptics is working with the transaction advisory firm to raise additional capital or explore strategic alternatives including M&A. Safeguard does not intent to deploy substantial additional capital on PixelOptics. Safeguard has deployed 36.9 million in PixelOptics since 2011 and has a 25% primary ownership position. Our current carrying value is 3.3 million.
Sotera Wireless is growing the customer base for its patent monitoring platform ViSi Mobile. This FDA approved patient or medical device continuously monitors all core vital signs with accuracy typically found in Intensive Care Units. During the quarter Sotera Wireless announced the partnership with the Utah based healthcare network of 22 hospitals, 185 clinics and more than a 1,000 physicians.
The U.S. addressable market for Sotera Wireless is approximately 500 hospitals that are considered early technology adapters. The company forecast a 20% penetration of the 5,800 U.S. hospitals by 2018. Safeguard deployed 1.3 million in Sotera Wireless in February. We also paid 1.2 million to acquire additional shares from a previous investor and now hold a 7% primary ownership position.
We anticipate an opportunity to consider deploying additional capital within the next 12 months.
Moving onto some of our expansion stage companies, there is also solid progress to Crescendo Bioscience. The company’s blood test for rheumatoid arthritis, called Vectra DA, is now available on all 50 states after the company received clearance in the New York Department of Health Critical Laboratory Evaluation Program. Crescendo Bioscience’s test was also granted Medicare coverage and its laboratory earned accreditation from the College of American Pathologist.
The annual marketing opportunity for assessing rheumatoid arthritis activity is estimated at 1.6 billion. RA applies more than 1.5 million U.S. patients and 4 million people worldwide. Safeguard deployed 10 million of capital in Crescendo Bioscience last December and has a 13% primary ownership position.
Good Start Genetics has developed accurate and comprehensive pre-pregnancy test that screen for all 23 disorders recommended for screening by major medical societies. During the second quarter, Good Start Genetics received a clinical lab permit from the New York State Department of Health to provide its screening test to reproductive health practitioners throughout the state. With this license, Good Start Genetics became the first laboratory to offer extensively validated next generation DNA sequencing technology in New York, where nearly 25% of all reproductive health screening is performed annually. Good Start Genetics expects to achieve revenues in 2013 of at least 25 million, achieve profitability during the third quarter of 2013 and operate at cash flow breakeven by the end of 2013.
I will remind you that revenue in 2012 was approximately $5 million. Safeguard has deployed 12 million of capital in Good Start Genetics since 2010 and has the 30% primary ownership position.
At NovaSom, the company announced last week that it appointed a new CEO, John Spitznagel, who also joined the company’s Board of Directors. He has more than 45 years of experience in the healthcare industry. His experience in building successful commercialization program is exactly what we need at this time for the future success of NovaSom’s AccuSom Home Sleep Test. Safeguard deployed $20 million in NovaSom in June of 2011 and has a 30% primary ownership position.
Putney is a specialty pharmaceutical company that develops high quality, cost effective generic medicines for pets. During the second quarter of 2013, Putney launched its second FDA approved generic equivalent product which is a flavored antibiotic tablet to treat urinary, respiratory and skin infections in dogs and cats. Putney believes the new tablet will be a stronger competitor capturing sales from more expensive antibiotics in the $25 million market. Putney now has four FDA approved veterinary generic products with a pipeline of over 20 more products in various stages of development in the Center for Veterinary Medicine review. Safeguard deployed $10 million in Putney in September of 2011 for a 28% primary ownership position.
Now, move on to highlight two of our high-traction partner companies who revenues are in excess of $20 million and then turn it over to Jeff for our financial review.
Beyond.com is a network of over 1,000 niche career sites which helps employers and more than 30 million job seekers to pinpoint the most relevant opportunities based on location, industry and expertise. This is achieved through a 75 unique career channels, 2,500 industry communities and 500 professional communities which reach more than 100 countries in the Beyond.com global network. Beyond.com grew its revenues in 2012 by over 50% and expects to do the same in 2013. Safeguard deployed 13.5 million of capital in Beyond in March 2007 and has a 38% primary ownership position.
The last partner company that will highlight this morning is MediaMath, a pioneer in digital advertising analytics. From its network of nine offices worldwide, MediaMath serves more than 3500 clients and all of the top ad agencies. Safeguard has deployed 8.5 million of capital in MediaMath since July 2009 and has a 22% primary ownership position.
During the second quarter, MediaMath re-launched its android business units after incorporating pixel-free technology acquired from Akamai technologies data cooperative in January. Now, the android digital unit has about 300 advertisers who control over 30 million of daily advertising spend. In the next year, MediaMath intends to add self-service features to the android offering to allow cooperative members to run reports and access data any time. MediaMath is experiencing significant growth to international expansion. The company has already in India and has broadened its penetration of the Asian pacific region through an agreement with yield one, a large Japanese supply side platform owned by DAC Group.
Now, users of MediaMath platform are expected to be able to access audience segments in Japan, maximizing ad campaign performance and minimizing spend on wasted impressions and with that I am going to turn it over to Jeff for our financial update.
Thanks, Steve. Let’s lead off with a review of key financial metrics for the quarter and six months ended June 30th, 2013.
At period end, we had 180.1 million in cash, cash equivalents and marketable securities. The total carrying value of outstanding debt was 49.4 million resulting in net cash of 130.7 million. During the quarter, primary uses of case were follow-on deployments of $8 million in four partner companies and cash used in operations of $4.6 million.
During the quarter, we also received 6.4 million in cash which was previously held in escrow related to the sale of various legacy companies in 2008. For the six months, primary use of the cash were 7.5 million in funding and acquisition of ownership interests in new partner companies, Pneuron and Sotera Wireless, follow on deployments of 12.8 million in five partner companies, cash used in operations of 11.5 million and deployments in Penn Mezzanine loan participations of 2.3 million.
Our priorities for uses of cash remain unchanged. They are capital deployment into new partner companies; follow on funding for current partner companies and Penn Mezzanine loan participations, corporate expenses and expansion of our platform.
Our roster of partner companies totaled 20 at June 30. The carrying value of Safeguard’s 20 partner companies at June 30 was a $136.3 million. The cost of our interest in those companies totaled $233 million. Safeguard’s financial strength, flexibility and liquidity are evident from the company’s balance sheet at June 30, 2013.
Now it’s time for Steve to lead us through the Q&A segment of our call.
Operator, you can open the phone lines for questions.
Thank you. We will now begin the question and answer session. (Operator Instructions) The first question comes from Troy Ward with KBW.
Troy Ward - KBW
First could you talk about looking at this quarter, the other income loss of $21.4 million, I know $9.9 million of that was from Pixel. But that way it’s kind of $11.5 million. Over the last two quarters, that’s running at about $6 million rate, and in the last 18 months it’s been about a $5.5 million rate. Was there any other write down in that quarter that were significant to a portfolio company or what caused the larger jump to that $11.5 million rate excluding Pixel.
No there were no other significant changes. There was one write down of an unrealized loss related to NuPathe which is classified as available for sale or fair value accounting. So as their stock price moves, we write that up and down. So there was slightly over $2 million reduction in our carrying value of NuPathe in the quarter.
Troy Ward - KBW
Do you have or are you able to give how many shares of NuPathe you own, so that we can monitor that going forward?
Yes, we have about 17% of their outstanding common shares and we also have works that factor into our fair valuation of our holdings. But they’re on a similar pro-rata magnitude, so you are looking at about 17% on an outstanding basis and about 17% on a fully diluted basis.
Troy Ward - KBW
And then on the operating expenses, you said through six months you’ve had $11.5 million cash operating expenses. Are you still targeting your $15 million to $16 million target for the full year, given it were kind of well on pace to exceed that through the first six months?
Yes, we are. One of the reasons, that’s the cash number that I disclosed, $11.5 million and that includes the payment of cash bonuses from the prior year’s management incentive plan.
Troy Ward - KBW
We should see a significant decline in the back half of the year?
On a cash basis, yes.
Troy Ward - KBW
And then one last question and I will be back in the queue, on Pixel, you put in $3 million last quarter, $2.2 million this quarter, $5 million so far this year, and it has a $3.3 million carrying value after this write down. Can you just talk about your thought process of putting that capital into the business and what’s the ultimate plan here from your perspective of how you want to continue working with Pixel over the long run?
Yes, what I am focused on is getting them to the goal of either an exit or a significant capital provider who is capable of funding commercialization. So back in January we did provide some additional capital through the course of the first quarter and into the second quarter and in the amounts that you’ve mentioned, and that it was a way for us to continue to allow the company to pursue a process to achieve those goals. We are actually, not right now providing any additional capital as one of the other investors has actually taken the lead there and is funding the company through the end of September and we’ve provided them some enhanced economics on that tranche of capital, so that we can determine what level of additional capital we may apply going forward.
The company is talking to a number of parties, parties that are capable and are motivated to partner with or acquire this technology from Pixel and we are working through a process that we are hoping will conclude before the end of the third quarter. If the company is unsuccessful in that process, Safeguard probably would have up to a couple of $1 million of responsibility for any additional cost. But we expect that there is going to be a successful outcome here to get the technology into the hands of another party or to have a capital provider step in for the commercialization.
And the next question comes from Bob Labick from CJS Securities.
Bob Labick - CJS Securities
Good morning I wanted to start with the management team, Steve, you touched on it in your opening remarks, there has been a lot of changes over the past 12 to 18 months both to the executive teams and to the deal teams And so I was hoping if you could kind of walk us through the expected benefits from the new structure and all the changes, is it a lower cost structure? Is it greater speed in decision making or what do you expect are the benefits from the changes over the last 12 to 18 months?
Well there is clearly a cost benefit to the changes you have seen that have taken place over the last 12 months and you are going to see that reflected in the future expense structure of the business as well. In addition to reallocating certain expenses or even reducing the expenses, we have actually also in connection with the strategy of wanting to have more partnered companies have balanced the resource mix between the operations team and the deal team professionals so that we can not only create leverage for those deal team professionals but provide a balance of capabilities so that we can move these companies through a process much more effectively and efficiently.
I did flatten the organization; I spent a lot of time with the deal team professionals under wanting to get involved in the inter-workings of what's happening, we wanted some different resources in place moving forward to address that the opportunities that we saw and see in the market, and we wanted to operate in a little bit leaner way so that we can make decisions more effectively and more quickly on a day-to-day basis.
So I think what you are going to see as we move forward is the opportunity to move a bit quicker is really the goal here, and a bit more consistently. And that really is kind of core to the theme that I started with back in January that I am trying to really get the organization into a rhythm so that we take some of these peaks and valleys out of the process, or at least minimize them to some degree.
Bob Labick - CJS Securities
And in that light obviously you have mentioned the goal of two profitable exits by year-end. And please talk about, where we're in that process because it's been 2.5 years or so, and there is only five months left to get two. So what can you tell us that can give outsiders confidence in where that process is and you can achieve that goal.
And I would like to kind of level set this discussion in another way as well. We did have four exits if you recall from late December 2010 through May of 2011 and there were four big exits. And I have said this in the past; I think what we tend to lose sight of is, two of those actually were accelerated beyond or ahead of what we originally anticipated, we actually thought two of those companies were going to be exited in 2012. So to start with the premise that, had that occurred in the way that we originally anticipated you would have had two in '11, two in '12 and I have been very specific in saying that we're targeting two in 2013, so let's get to the specifics of what is transpiring there.
We had three companies that are in process outside of what we discussed with regard to Pixel. I can't necessarily be predictive as to when those processes will be completed. But we are finding that there are interest in these companies that we have in process, but we're not going to give these companies away. There is a little bit of bottom fishing that's going on right now, that we're trying to make sure that we're not party too.
We do take seriously our responsibility to provide proper returns on these assets, these companies are performing well, they are actually performing ahead of plan, and we're not willing to get a deal done just for the sake of getting a deal done. Now having said that when I say they are in a process, they have got professionals working with them, they are meaningfully looking at opportunities and talking to parties that could result in a transaction that we're targeting.
And we're going to have greater clarity as we get through the next 60 to 75 days, this will determine whether or not this goal is going to be achieved for 2013. I am still bullish, and I am bullish because the processes are active, they are not dormant. The parties are engaged in a very meaningfully way in a variety of dialogs. But it's interesting in one situation and I won't disclose the company, we got what in effect was a low ball offer about nine to 10 weeks ago. And they took the party that's interested to recognize that there was a low ball offer, and re-energize the conversations just recently so that we could get back into a more reasonable and rationale structure.
So there is a little bit of dance going on point number one. Point number two the M&A market actually and I am not suggesting that this is a direct correlation to what we're seeing. But it actually got softer in 2013 than where it was actually when we were leaving the year in 2014. There was some data that we've been looking at where Q1 to Q3 of 2012 was kind of moderate and then there was a big spike in Q4 and then it kind of moderated again in Q1 and Q2 of 2013.
We are trying to get a sense of a pulse from other resources and sources of data to see where that activity will increase and we are hoping that there is going to be some lift there as well.
And then the final point I will leave with you that these companies that have impressed us not only the ones that have impressed us Pixel we have had our challenges with and I have been trying to be pretty transparent and forthright with respect to those challenges. Most if not all of our other companies are performing at or above our expectations for the year and including the three that are in those processes. So, when I take it from a balance perspective I want those exits as much as everyone else does believe me I think it’s important to show that we have the ability to put money to work and to gain those exits. But I also want to make sure that when we do them, we are actually maximizing value. It wouldn’t boohoo us on a future trend basis to be in any way selling companies or having these companies bought at a value that we think is not reasonable and rational. Sorry for the long winded explanation but it’s got my stream of consciousness on it.
Bob Labick - CJS Securities
That was very, very helpful and then I will ask one last question I will get back in queue as well and we have talked about this before on prior calls but, so assuming that things work out as plan and you have two exits, you already have a very strong balance sheet with significant amount of cash how will you weigh the use of share repurchases versus deployments versus holding cash on a go forward basis?
Well so let’s start with a couple of core tenants to the cash discussion. First of all I think I have said publicly before that on a cash basis no less than 80 million to 100 million on hand at any given time I think is the number that allows us to show stability and strength in the marketplace. We have partnered with a lot of other parties out there and they look at our balance sheet as do these partner companies that we get involved with. You shouldn’t lose sight of the fact that when a company is considering taking capital from Safeguard because we are a public company those management teams are pretty smart and they will look at our public filings and look to see what kind of strengths we have, point number one.
Point number two, if you recall we have always said that upon the maturity of that debt we intend to repay that debt with cash even if it were put back to us under the convert feature so I look at net cash and not necessarily growth cash when I am talking about cash. Number three going back to the previous conversation I can’t unfortunately at this point be so highly predictive as to when and if it’s going to occur that I will know when the influx of cash is coming and when I add that all up and I want to make sure that we don’t lose pace in the market because if you recall other conversations we can’t miss a year of putting capital to work both follow-on capital to support companies that are growing and that can use this capital possibly and new opportunities four to eight opportunities a year.
Albeit, our average deployment is probably more in the range of $5 million to $15 million for a new deployment versus something closer to 20 or 25 I am still looking to put somewhere between $40 million to $60 million of new capital to work each year plus follow-on. So when I add all of that together right now we think that we don’t have an extraordinarily large amount of free cash. The other point to keep in mind and our Board actually has an active conversation about cash and the use of cash and if we get into a rhythm that I am hoping that we do get into in the future we could start thinking about whether or not we have got cash that’s in access of what we reasonably or rationally need at any given time. I also have been on record of saying that if we do think about ways in which we might use cash to reward our shareholders it probably would not be in the form of a buyback but we would figure out if there is a rational and reasonable ways to think about dividends but again we have been ahead ourselves in this conversation right now we are focused on maintaining that certain amount of cash that allows us to be credible stay on pace with our goals and recognize that there is a lack of predictability right now as to the timing and amounts of cash inflow from exits.
And our next question comes from Jim MacDonald from First Analysis.
Jim MacDonald - First Analysis
Just wanted to follow-up on a couple of recent questions. On the management kind of shift do you see any potential change to the industry segments you would invest in just given the different personalities of the new players versus the old players?
I think you are going to see just the continuation of well first with the change that was specifically made I think further emphasis on healthcare and technology and other sectors within healthcare as we define it. I am actually very comfortable right now in the leadership we have got in place and the way that we are covering the market. Phil is focused on enterprise applications and infrastructure we are seeing a lot of interesting opportunities there. Erik and his team are focused on digital media and other Internet 3.0’s types of opportunities. Gary is very important to us in focusing not only on some healthcare IT things but also on the whole MedTech sector, we shouldn’t lose sight of some of the real opportunity that he is been able to foster with Crescendo and Good Start Genetics and some of those that I think are going to show real promise and then now kind of fills out the rest of that healthcare picture for us in the areas of healthcare technology and other platforms that we’re seeing being developed within the overall healthcare services arena.
Jim MacDonald - First Analysis
And then back on the earlier conversation you talked about three processes you didn’t mention the potential for potential IPOs is that a possible interpretation in processes or more likely where we’re talking about M&A.
M&A for those that I mentioned before, the only company that I thinking that our group of partner companies today that is really thinking about an IPO is probably MediaMath and that’s an ongoing process and they acknowledge that it’s an ongoing process. their CEO was recently quoted in some article recently in the less 10 days or so he acknowledges that it’s an opportunity potentially for him but he’s going through a very proper processes determining what’s in the future for him.
Jim MacDonald - First Analysis
So that means that that’s not one of the three at this point.
Jim MacDonald - First Analysis
And then could you just give an update on your position on raising the new side-by-side fund.
We had not had any success there. The markets are not very conditioned that’s why we’re continuing to find, we've spend some time over New York, we haven’t spent a lot of money in pursuing these opportunities but we’re not seeing the traction that we were hoping to see, that’s the team where we kind of focused on the core business because that’s what I think shareholder values going to be driven.
Jim MacDonald - First Analysis
One more, you didn’t deploy any new partner companies this quarter, was there any impact from this shift in personnel that might have delayed deployment?
The shift in itself didn’t delay deployment, we’ve got a couple of companies that we’re, but we have term sheet that we’re hoping that we’ll have a closure in the near term but, the shift in personnel isn’t slowing the process, I’m actually hoping that it will accelerate the process.
(Operator Instructions). The next question comes from (inaudible) Capital.
You mentioned that there are a couple of terms sheets out, how does that market work for investments. I know you mentioned that possibly the M&A market might be little bit soft on the exit side but how does it looked on the investment side?
We’re still seeing a lot of great opportunities but the terms that we have their evaluation, there is a lot of inflated expectation around valuation. And the way we make money and the way we make money for our shareholders is to make sure we get in at the right valuation. So, we’re not willing to overpay and it takes times sometimes to walk somebody down the valuation ladder. Some of the companies that we get involved with us are the capital providers that are wishful in their thinking about what’s the follow-on around the capital is going to result in from a valued perspective or a valuation perspective and we’re willing to participating in the number of these opportunities as the right valuation. So those conversations sometimes take longer than what we originally anticipate.
But the flow was good, as my colleagues from my deal team management structure were here on this call they would tell you that they’re seeing opportunities, the thing that we're focused on is making sure that we’re focused on the best company possible at the right valuation and that’s where we spend a lot of our time.
Is there any differences in any of the industries? Are you seeing maybe more flows in either life sciences of technology or are they about the same.
I think what you're going to find is that that we’re going probably in capital deploy, you’ll get a little bit of waiting of probably 60-40 healthcare to technology from a sheer number of companies that will be more even and that’s really, the waiting is actually kind of driven off the fact that the healthcare companies are probably requiring a little bit more capital given where we tend to focus and that kind of series B, series C round than the technology companies require. But the flow is good on both sides.
Thank you. And there are no more questions for present time so that I will turn the call back over to management for any closing remarks.
Thank you. And we just thank everyone for joining us today. We’ll keep you part of progress.
Thank you. This concludes today’s teleconference. You may now disconnect your phone lines. Thank you participating and have a nice day.