Good day, ladies and gentlemen, and welcome to the Hercules Capital Q4 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder this conference call is being recorded. I would now like to introduce your host for today’s conference, Mr. Michael Hara, Senior Director of Investor Relations. Sir, you may begin.

Thank you, Cheryl. Good afternoon everyone and welcome to Hercules' conference call for the fourth quarter and full year ending 2015. With us on the call today from Hercules are Manuel Henriquez, Founder, Chairman and CEO; and Mark Harris, Chief Financial Officer. Hercules fourth quarter and full year 2015 financial results were released just after today’s market close and can be accessed on the Hercules Investor Relations section at www.htgc.com. We’ve arranged for a replay of the call at Hercules webpage or by using the telephone number and pass code provided in today’s earnings release. During the course of this call, we may make forward-looking statements based on current expectations. Actual financial results filed with the Securities and Exchange Commission may differ from those contained herein due to timing delays between the date of this release and in the confirmation and final audit results. In addition, the statements contained in this release that are not purely historical are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements, including without limitation the risks and uncertainties, including the uncertainties surrounding the current market turbulence and other factors we identified from time-to-time in our filings with the Securities and Exchange Commission. Although, we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions can prove to be inaccurate and as a result, the forward-looking statements based on those assumptions also can be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements or subsequent events. To obtain copies of related SEC filings, please visit sec.gov or visit our website page htgc.com. For today’s agenda, first Manuel will begin with a brief overview of our fourth quarter financial highlights and for full year, followed by an overview of the domestic capital markets and the state of the new investment market opportunities and our prospective outlook for the first quarter and 2016. Mark will follow with a broader summary of our financial performance and results for both the fourth quarter and the full year in 2015. And then following the conclusion of our prepared remarks, we will open the call for Q&A. With that, I’ll turn the call over to Manuel Henriquez, Hercules’ Chairman and Chief Executive Officer.

Thank you Michael, good afternoon everyone and welcome to the Hercules' Capital fourth quarter and full year 2015 earnings call. I want to first start off the call by saying that I'm very happy and proud of our accomplishments and achievements, again producing another strong fourth quarterly results and outstanding overall year for Hercules Capital. We had a very solid portfolio growth during the period. We finished with a strong balance sheet and a healthy supply of liquidity positioning us well as we roll into 2016 with plenty of dry power to make careful and accretive new investments on behalf of our shareholders as we continue to focus on growing our earnings and covering our dividend. We believe that 2016 is shaping out to be an even greater year than 2015, which too may seem it could be counterintuitive. But I will explain why 2016 is rolling into a very attractive year and it is counterintuitive especially with what's going in the venture capital community during my commentary on the venture capital investment activities that took place during the year and what we expect to take place in 2016. With the materially different and less competitive environment early in 2016 we are seeing many or other BDC venture lenders in particular continuing to struggle. Many of them are facing material challenges given they are trading significantly at discounts to net asset value, in some cases as much as 40%. Coupled with this absurd and unsubstantial level of activities is their unfunded commitments as a return to overall portfolio. Mainly these other venture lenders have not learned their lessons and have elevated unfunded commitments that are not sustainable and are causing problems for others in the industry. This level of unfunded commitments will cause them to have a growing problem on…

Thank you, Manuel. Good afternoon ladies and gentlemen. I will now briefly discuss the financial results for the fourth quarter of 2015, try to add some depth to the reported numbers and give you some forward guidance in terms of 2016. I am pleased to report that Hercules Capital had a record year for fundings of $712.7 million in 2015. This is a 15% increase from 2014 which was also a record year. In the fourth quarter our loan portfolio increased to $1.152 billion at cost compared to $1.109 billion in the third quarter of 2015 or an increase of approximately 4%. We had strong new fundings of a $180.7 million in the fourth quarter partially offset by $105.5 million of unscheduled payoffs and normal amortization of $23.8 million. Our effective yields were 14.2% in the fourth quarter from 15.4% in the third quarter, a decrease of approximately 220 basis points. The decrease is primarily related to the composition of early payoffs and the acceleration of interest and fees as Q3 had younger loans than that of Q4. Given the current market conditions and the age of our loan book we would expect in the first half of 2016 to see similar payoffs to what we saw in the first half of 2015. Core yields which exclude the effect of fee accelerations from early payoffs increased to 13.3% of fourth quarter compared to 12.6% in the third quarter or approximately 6%. And we would expect our normalized quarterly core yields to be between 12.5% and 13.5% on a going forward basis. In December we saw the United States Federal Reserve increase benchmark interest rates by 25 basis points. This led to an increase in the prime rate from 3.25% to 3.5% on December 17th, which impacts our investment income favorably.…

All right. Thank you operator and thank you all for joining us here today. I'd like to remind everybody that we intend to participate in the Jefferies Mid-Atlantic C-Level Conference in Baltimore on March 4th as well as continue to do some non-deal roadshow with our various partner investment banks with JMP Securities in Boston on March 7th and of course the RBC Capital Markets Financial and Institutional Conference in Manhattan on March 8th and 9th. If you have any interest in dealing with us please feel free to contact the respective investment bankers or of course our Investor Relations Department, Michael Hara. With that I will turn the call over to the operator to answer any questions.

Thank you. Ladies and gentlemen [Operator Instructions]. And our first question comes from the line of Jonathan Bock of Wells Fargo Securities. Your line is now open. Please go ahead.

Hi. Good afternoon and thank you for taking my questions and thank you for the remarks. Manuel, one question that I have, simply relates to comp expense. Only, because you made some significant investments as you have outlined and you saw the comp expense drop meaningfully quarter-over-quarter, perhaps more than our and maybe even others expectation. That line is always very tricky, but how do we look at that? Was there seasonality or could we also build into the fact that the venture markets in general kind of trade it off and perhaps allow you a little bit more leverage on the costs line in light of the route that other venture lenders are experiencing moving forward?

Sure, I’ll let Mark expand on this but I'd like to remind everybody that a lot of our comp expense is variable in nature. And it’s directly correlated with our portfolio activities. And you’re obviously right, we saw fairly frothier fourth quarter origination environment whereby we pulled back a little bit more than we probably were anticipating bur for the right reasons. And because of that pullback we actually funded and originated a bit less than we probably would have targeted, but certainly right within the range. And because of that we probably had an over accrual of rolling in that we pulled back -- pulled back on that. Maybe Mark will give you more color on that, but it is variable in nature.

Absolutely. Hi Jonathan. The answer is really kind of twofold, right. One is -- well threefold. One is our base which we always had in terms of core salaries and discretionary bonuses, et cetera. The second one is Manuel rightly pointed out, we have variable comp plan, that is, in some quarters certain individuals will unlock more value or accelerated value versus others and that's always a little bit difficult to predict, but is always in line with the shareholders interest that is in term we are making sure that we’re originating loans and if there is any fall back provisions they would happen. And then the third overall comment I would make is just kind of around the comp itself that is we have one-time expenses that obviously are a part of our compensation for hiring, et cetera that we had in different periods, which also makes a lot of noise. That’s why we try to give you a little bit of a normalized going forward plan, which would be pretty consistent for 2016.

Okay. And then my second question is Mark, you outlined that if you follow the bio-tech index in the fourth quarter of '15, you guys were right on the mark as it relates to how you chose to mark those assets and I think you used the Russell. Just in light of the route in bio-tech in specific, I think it’s actually down 20% year-to-date. Would we also expect downward pressure on the portfolio? And Manuel to your -- it’s a bit of a two part question. So downward pressure on bio-tech investments Mark. And then second Manuel just overall defaults and the view of defaults, you are senior secured, you have seen this before, we have seen the performance. But just in light of tech moves today, the default outlook on the portfolio in specific and how we should be thinking about that in terms of modeling?

A couple of factors there. Number one, we are not an equity shop. So the correlation directly to the equity capital markets performance is more of kind of a proxy leading indicator as opposed to a directly correlated indicator to the overall portfolio performance. I’d like to remind everybody that many of our life sciences companies often times, will have a lesser equity derivative component just as a warrant. In those deals we may choose to have a cash payment in a lieu of a warrant because we felt that some of the bio-tech companies may have been over valued or miss-valued or said differently we felt that the capital appreciation available onto these derivative securities, these warrants were probably less attractive than securing a cash payment. So I think that in the history that we’ve done here, I think that we pruned and groomed our portfolio that we unlike others have taken the medicine if you will on marking our venture portfolio down proactively in Q3 rolling into Q4, which means that I believe that we’re well positioned for less volatility related to mark-to-market issues on our equity derivative exposure. As to the outlook on life sciences, it’s well written and documented that life sciences companies are clearly experiencing a bit of a challenge. But as we are seeing now I believe that life sciences companies continue to raise capital. We have seen evidence in our own portfolio that notwithstanding the more challenging times those companies that have viable long-term solutions who made it the through the FDA process which is a critical indication of the vibrancy of these companies are able to secure additional growth capital and in fact we’re seeing that happening today. In fact we’ve seen some bio-tech companies moving towards IPOs or M&A events taking place right now. So our outlook in bio-tech actually remains pretty strong. We like it. I think that our issue right now is one to manage that exposure overall and if we’re sitting kind of in the mid-50s from a portfolio allocation I think it’s an area that we probably want to be at, not necessarily grow that. But we remain very confident in our bio-tech exposure. The third part of your question is default. At this point, we’re not seeing any precipitous increase in default rates right now. I think most of our companies continue to secure new rounds of capital. I think that what we are seeing is expectations of M&A events that were to take place in for example Q3 rolling into Q4, are probably spilling over for a longer duration maybe happening now in Q1 as opposed to Q4. So, but we're still seeing M&A activities in our portfolio and we still see a lot on our companies engaged in M&A discussions as we speak today. So, I'm not seeing any material rise with defaults right now on our portfolio.

Thank you. Thank you so much.

Thank you. Our next question comes from the line of Christopher Nolan of FBR and Company. Your line is now open. Please go ahead.

A quick question. The decline in the biotech valuations does that affect your outlook for spillover income generation for 2016 given that spillover income was partially a function of realized gains?

Well, just to be clear, I'm not a tax expert but typically what happens here is that spillovers are impacted by realized tax losses and so unrealized depreciation will have a little impact on spillover unless the conversion to realized. So, I don't see any correlation right now related to a up or down gyration in the biotech market on impacting the spillover. The spillover is only impeded by realized gains, by realized losses. Mark?

And follow up question would be on core yields. I think Mark mentioned, he is expecting -- I feel the effective yield is 12% to 13.5%. Manuel your comments were indicating that you're seeing more favorable environment for Hercules in terms of less competition thus potentially improved deal terms. Should we look at that improved deal terms will be offset by less prepayment income in 2016?

Great question, Chris. We at this point believe that we're going to see the same phenomenon that you'll see in our financial statements that we saw in the first half of 2015. So we actually do not expect early payment activity in the first half of '16 to be any different than we saw in the first half of 2015, which to kind of remind everybody back of the envelope, you have about $40 million a quarter in Q1 and Q2 of '15, we're expecting almost the same levels of activity in the first half of '16. So, yes that's affording us to have this portfolio growth without putting a lot of pressure on the portfolio by simply not having the pressure of early payoffs of giving us a headwind. So, we're rolling into the first half of '16 with not a lot of headwinds. And yes, to your point a lot of our competitors most of who you can read about is that we'd probably hear very shortly are faced with significant capital constraints and because we've maintained liquidity in a high flexible balance sheet we're able to underwrite better margins, better quality assets and better terms right now. And I'll say it again, we're not embarrassed to say no to deals that we think are less priced and we'll continue to do so.

Great. Thank you for taking my questions.

Thank you. Our next question comes from the line of John Hecht of Jefferies. Your line is now open. Please go ahead.

Manuel, you discussed distressed competition and obviously that gives you opportunity to be more selective in what you are choosing, but does it also give you any potential acquisition opportunities whether it would be portfolios or whole companies?

So we are asked -- I mean, enormous continues -- this question is constantly asked of us, and I'd give our investor confidence in this statement. We are interested in acquiring companies like we invest and what I mean by that is when we look at some of these portfolios, we think some of these portfolios are mismarked. And when you put the Hercules credit screen over these portfolios, we think that these companies are mismarked, materially in some cases, whereby conducting a transaction that we think is the right clearing price from the right net asset value to how they have been valued today of fair value are materially different, thereby causing a great crevasse of their bid and ask spread on getting a transaction done. So, we're going to wait to see how prudent a lot of these BDC managers probably mark their books, and at which point, I think they'll start to seeing hopefully, a more stable and realistic net asset value by which we can engage in a fruitful conversation., We prefer not to do hostiles. We prefer to be very friendly acquirers, i.e., the work partnership. And so we remain open in doing so but we're going to take our time. And we certainly are active and interested in that area on looking at some acquisitions. But we acquire like we invest. If it doesn't make sense, we're not going to do it just because the assets are out there. It's got to be properly marked and it has to be accretive to our shareholders.

Great and then on the flip side, how do you kind of -- how would you characterize the venture capitalists mindset right now, given the kind of that -- what we see out there is depressing equity values? Are they -- a, are they as interested in investing now; and b, to the extent they raise capital portfolio company, would they be more inclined to do it from a debt perspective as opposed to an equity perspective?

Great question. There is no question that we anticipate venture capital dollars will taper off. So I'd like to remind everybody, during our 12 year history for six, seven years, venture capitalists were investing $25 billion to $35 billion of activities. Now I call your attention to our investor deck where we have on Page 13 and more importantly on Page 11 of our investor deck available on our website, you will see that for many years from 2002 to 2013 you had a normalized level of venture capital investing that $25 billion to $35 billion a year and we were doing just fine in that marketplace. And I think that the venture capitalists are clearly got ahead of their skis a little bit and 2015 I thought a lot of people will probably misinterpreting the liquidity window that was available to a lot of the companies giving birth to now 125 to 127 unicorns that are going to face challenging times. It doesn’t mean by the way that all these unicorns are bad companies. It means clearly they are overvalued and they need to readjust their valuations. But fundamentally a lot of these unicorns represent very attractive candidates to us but after they do their valuation adjustments. And yes there is no question that having a liquid balance sheet as we have and the ability to do transactions $50 million to $70 million on our own accord does afford us the ability to look at very attractively priced companies that are well structured. And in fact what that really means is that once these unicorns go through the valuation adjustments that they could be down 30% to 50%, you are looking at really quite attractive LTVs, loan to value on some of these companies. Today we think those LTVs are a little inflated so we want to see those get adjusted. So again we are being purposeful in waiting but we think the competitive landscape is quite attractive. Our competitors, are strapped for capital or have no access to capital and the pipeline of companies looking for capital is quite strong and quite robust. So we like this market opportunity allowing us to really continue to cherry pick some of the best companies out there. So this is why we maintain liquidity back and we think that 2016 is going to be a great year, a vintage year for growth and investment.

Well, thanks very much, Manuel.

Thank you. And our next question comes from the line of Ryan Lynch of KBW. Your line is now open. Please go ahead.

Good afternoon and thank you for taking my questions. I just wanted to talk about the commentary you made around your guys name change in a few -- better like you said a couple of weeks. You guys talk about change the name to potentially pursue new opportunities, product offerings and acquisitions. So from reading the commentary it was -- I was under the assumption from reading that the name change could potentially lead to you guys pursuing some different opportunities outside of the VC lending realm. And so number one, am I correct in that assumption? And number two why would you guys potentially shift away at all from the VC lending asset class when you guys have such great opportunities, such great experience and a really great track record in that arena?

So, Ryan first of all welcome to your new position. And to answer your question unequivocally there is absolutely no circumstance that I can actually imagine or think of that we are leaving or abandoning the venture lending landscape. We are the largest player. We intend to remain the largest player. We intend to defend our position as a venture lender and in fact we intend to grow our franchise and our platform within the venture lending marketplace. One of the reasons why we changed the name was very simply for the conversation earlier in the call that sometimes life sciences companies don’t want to have the company that has a technology in its name. They rather have a more broader platform name like Hercules Capital. So we felt that back to my original roots when I started the company which was Hercules Capital, we were back to the original roots of our name. But I'm can assure our investor community, we are not leaving at all or diluting our interest or focus on venture lending. So I want that unequivocal for the record. We intend to maximize our velocity in that area. The issue on acquisitions is that there are multiple different platforms that are focused on venture lending or venture equity that are also attractive but there are also segments of business that we think are complementary to our existing business such as ABL. A lot of our companies that being to mature are also looking to have some component of ABL financing and we simply believe for example that's a line extension of our core business. That having an ABL type platform or even leasing platform to help service the needs of our companies within the venture lending community is a prudent thing to do, as we look to grow. But no, do not think that we are leaving venture lending.

Okay, great. I appreciate the clarification and I'm glad to hear that. That's all from me.

Thank you. And our next question comes from the line of Aaron Deer of Sandler O’Neill. Your line is now open. Please go ahead.

You just commented on the unicorn valuations and you suggested that some of these are going to probably see just warranted valuation adjustments of 30% or something. But at the same time earlier in the conversation you said that, well some of your companies have become unicorns that's obviously not your focus niche. But so I guess, was it your suggestion, you say that to get, you want to see valuations come in to get you more involved or are you suggesting that some of the smaller valuation growth companies are also going to be subject to those sorts of reductions in their values and subsequent funding rounds?

We're not seeing evidence of that. We are still -- the term that we have coined and we use a quite a bit around here is that neutracorns, the neutering of unicorns and I think that's probably more appropriate to see. We are not seeing valuations compressions under the sub billion dollar level that you are seeing on the unicorns who got ahead of their skis on this issue. Again a lot of these unicorns are still attractive companies but we rather wait to see them adjust their valuations and there by representing a much more attractive and more realistic, honestly, loan to value at that point. Because today the last thing you want to do is trade off your derivative securities or warrants and a security that is going to be overvalued that's going to be facing a down round over the next 12 months. I'd rather go into those companies after they've done their valuation adjustments, reassess the likelihood of monetization of those warrants and determine what is the upside of those derivative securities, as you do the underwriting of these new loans. So we're going to be patient. We're not looking to bolster our position in unicorns and nor do we think and are not seeing the non unicorn companies seeing the same experience and valuation adjustments as you're seeing realized today with unicorns. So they're not directly correlated.

Okay, and then on the buybacks, can you just kind of give your kind of philosophical thinking in terms of, obviously we've got some tremendous growth opportunities in the year ahead. So you want to retain capital but at the same time you've been doing a little bit of buy back and with the stock down here around book value it can start to become tempting to do some more of that. Can you talk about how you're thinking about that going forward?

Sure, we unlike others, when we say we do things as we did with the unfunded commitments managing down by 70%. Just like we said we're going to have a stock buyback to look after the best interests of our shareholders. The fact that we're sitting on an abundance of liquidity we felt that it was the prudent thing to do, especially in the wake of looking at a lot of overvalue companies or companies that are seeing thin margins or frankly crappy underwriting, we chose to remain on the sidelines and not pursue that. And so as we sat here with an abundance of liquidity we felt that in allocating just under $10 million to protect our shareholders and allocate $10 million to buy 1.2% of our stock was absolutely the prudent thing to do, as we sat here with liquidity that has a negative spread. So we think that's a good investment, we did that. As to the other part of your question, we don’t necessarily indicate when we buy stock or what prices that we do, but you can definitely be rest assured that unlike others who have stock purchase programs we intend for the best interest of our shareholders to continue to pursue those programs if and when compared to our pipelines and available opportunities we go -- we'll balance between two options. Mark, anything you want to add to that.

The only comment I will make is on the bond question which you had, which is again as we talked about with the early prepayments in Q3 and in Q4, we were setting up plenty of liquidity. We looked at our capital stack and we basically decided to take $40 million off the baby bonds, that had a high effect of interest rate if you want to think about it that way. We believe strongly given our credit facilities and our liquidity, we did a lot of forward analysis and our understanding was it was a good move to protect it and to further weigh down our cost of that.

We're going to be rotating out in fiscal 2016 further on our more elongated higher cost debt. So I can assure you that our intent is to lower our -- overall lower our cost to capital which gives us a further competitive advantage in widening our NIMs on behalf of our shareholders. And so doing a controlled stock buyback, reducing our cost to capital and then making -- converting our liquidity into higher yielding assets that are better structured, all represent a very highly accretive investment opportunity for us in 2016.

Okay, that's great, thanks for taking my questions.

Thank you, and our next question comes from the line of Chris York of JMP Securities, your line is now open, please go ahead.

Good afternoon guys. So you stated competition has declined and I'd just kind of be curious to learn what type of investor or maybe lender have you seen the most at the proverbial table in the fourth quarter and then maybe in the current quarter?

Well, I'm not in the business of disparaging or calling down my competitors. I mean some of these guys are my friends as well. I think it's safe to assume that as you see your 10, your Q4 earnings release is coming out, it'll be self evident on who is actually matching the rhetoric with reality. And I think that that's going to be pretty self evident here as the next couple of venture lenders start reporting here on who's truly growing their loan book, who's truly managed down their unfunded commitments, who has liquidity and who's experiencing credit losses. And I think that'll be self evident on those who are actually adhering to what they say and matching the rhetoric with reality. We performed to what we say we're going to do. We delivered results as we said we had do and we executed on the items that we said we're going to do. I think managing down the unfunded commitments by 70%, that most people are skeptical that we're able to do it was an amazing achievement but we did do, dropping now down from $400 million plus down to a $100 million or so. So I think that a lot of this reality is going to get reconciled naturally here by the release of Q4 earnings and 10-Ks by everybody and I think you'll see that here pretty quickly.

Got it. And then switching gears a little bit. So you talked about the potential fall in LTVs and unicorns that could make the investment opportunities attractive. So is there a specific business model or a sector among what you guys are calling the neutracorns that you think present a good opportunity for investment via collateral, hard assets or attractive IP?

There are many lines of businesses that we find attractive, obviously there's many SaaS companies that have seen inflated valuations get adjusted by just public comps for example like Workday. But you're seeing a lot of SaaS models that are quite attractive. Cyber security is a area that publically has gotten beat up pretty bad, but there are interesting cyber security private companies that are out there. You're seeing big data mining as another interesting area that have seen pretty inflated valuations, but there is also a very large unicorn in this area, Palantir for example that I think the valuation is quite sustainable and has a very strong business model. So, really the unicornization and the neutracorn that you refer to I think it's going to come down to those companies valued just under $10 billion to the $3 billion level. I think that's where you're going to see probably the greatest pressure on that $2 billion to $10 billion level. These companies I still think have good strong fundamentals, but I think that they've been overvalued. It doesn't make them bad, but I'd rather wait to have those valuations be more realistic and then to determine what's the probability of doing an eventual liquidity event will be the multiple on that, because a lot of these companies and unicorns facing an IPO would actually be a down round. And so that's not an option for them. And then if they're overvalued as unicorn, the attractiveness from an M&A event also becomes fairly unappealing. So their own faith and their own destiny is going to be contingent upon swallowing hard and getting the proper valuation to kind of master exit expectations over the next two to three years. And that's a hard thing to determine and boards and venture capitalists are actively engaged in those discussions as we speak right now. So, we're going to wait it out a little bit and let that kind of fall on happen and then we evaluate what those opportunities will look like, they may so not be attractive for us.

That's great, thanks for sharing all that on the environment. That's it for me. Thanks.

Thank you. And our next question comes from the line of Leslie Vandegrift of Raymond James. Your line is now open. Please go ahead.

Good afternoon, guys. Most of my questions are already have been answered. But one thing I have left, at the beginning of the call we're talking about the unfunded commitments and you guys have done a lot this year. You talked about really having the liquidity position improved just in that aspect by decreasing those unfunded commitments out there. Have you seen any push back from borrowers or anything you have to give in when it comes to the table for borrowing, possibly in pricing terms or covenant terms because you no longer are offering any or as much as those unfunded commitments?

We think that a lot of other lenders are miss -- I think a lot of other lenders are abusing unfunded commitments, because our relations with our companies is quite strong and given my teams' openness and candor with our companies, I don't see any evidence whatsoever on push back or animosity that may have been created by managing down our unfunded commitments. We are partners with our companies. We're partner to our venture capital firms. And the process of managing down unfunded commitments, it's a collaborative process. It's not done in this draconian or Machiavellian way. And so our team has done an outstanding job of working through that process, clearly took us two quarters to do that, but as we said, we performed to what we expected and we do not see any impact whatsoever in our pipeline or deal flow related to that.

And then on just a little bit of modeling side here, you talked about SG&A run rate between $3.5 million to $4.5 million per quarter going forward but then talked about the expected taper off. Can we expect it to be kind of at the higher end of that range early on and taper down from that or kind of average out over the whole year and to remain consistent in 2016?

Sure, Leslie, I'll let Mark our CFO, kind of give you more color on that. Mark?

Yes, absolutely. The answer is Leslie that, typically you would see some fluctuations quarter to quarter, that's why I gave the range between $3.5 million and $4.5 million on a quarterly basis. My comment would be is to take the mid-point and just kind of view that as a good place if you will to out it through the quarters and if there's a little bit up and a little bit down during the different periods, it's still going to average out to be about the same thing.

Okay. So you do expect that average to maintain and not taper off through the year?

Correct.

Okay, all right, perfect. That's all for me. Thanks.

Thank you. And I'm showing no further questions at this time. I'd now like to turn the call over to management for any closing remarks.

As I said previously, thank you, everyone for joining us on the call today. Again, we'll be at the Jefferies Mid-Atlantic Conference in Baltimore, on March 4th. We're participating in JMP in our roadshow in Boston on March 7th and of course we will be at the RBC Capital Markets Financials Conference in Manhattan on March 8th and 9th. With that, thank you everybody and look forward to seeing everybody in the next couple of weeks. Thank you, operator.

Ladies and gentlemen, thank you for participating in today’s conference. This does concludes today's program. You may all disconnect. Everyone have a great day.