Acres Commercial Realty Corp (ACR) 2011 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the First Quarter 2011 Resource Capital Corp. Earnings Conference Call. My name is Towanda, and I will be your coordinator for today. At this time, all participants are in listen-only mode. Later, we will facilitate a question and answer session.

(Operator Instructions)

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to Mr. Jonathan Cohen, President and CEO of Resource Capital Corp. Please proceed, sir.

Thank you. Thank you for joining the Resource Capital Corp. conference call for the first quarter ended March 31, 2011. I am Jonathan Cohen, President and CEO of Resource Capital Corp. Before I begin, I would like to ask Purvi Kamdar, our Director of Investor Relations, to read the Safe Harbor statement.

Thank you, Jonathan. When used in this conference call, the words believe, anticipate, expect, and similar expressions are intended to identify forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from these contained in the forward-looking statements.

These risks and uncertainties are discussed in the Company's reports filed with the SEC, including its reports on the Forms 8-K, 10-Q, and 10-K and, in particular, item one on the Form 10-K report under the title, risk factors. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update any of these forward-looking statements. And with that, I'll turn it back to Jonathan.

Thank you, Purvi. First, for a few highlights. For the three months ended March 31, 2011, we had adjusted net income of $15.7 million, or $0.26 per share, diluted, as compared to $10.1 million, or $0.27 per share, diluted, for the three months ended March 31, 2010.

Estimated REIT taxable income for the three months ended March 31, 2011, was $8.6 million, or $0.14 per share, diluted, as compared to $9.3 million, or $0.24 per share, diluted, for the three months ended March 31, 2010.

We announced a dividend of $0.25 per common share for the quarter, or $17.6 million in aggregate, which was paid on April 28, 2011, to stockholders of record on March 31, 2011. Book value increased to $6.08 per common share as of March 31, 2011, an increase of almost 2% since December 31, 2010.

With those highlights out of the way, I will now introduce my colleagues. With me today are David Bloom, Senior Vice President in charge of real estate lending, David Bryant, our Chief Financial Officer, Christopher Allen, our Senior Vice President of our leveraged loan business, and Purvi Kamdar, our Director of Investor Relations.

In my opinion, the first quarter 2011 saw great improvement in the outlook for Resource Capital. We saw an increase in our net interest income of over 35%, and revenues grew by more than 50%, compared to last year at the same time. We made significant investments and restarted our commercial mortgage origination platform. We are truly a new Company.

Including those loans that we are committed to sell, we have shrunk -- real estate loans that we are committed to sell, we have shrunk our pre-2008 real estate B-note and mezzanine loan exposure to under $137 million from a peak of $312 million in December, 2007. We are extremely well capitalized to have access to all types of liquidity and are prepared to grow.

With these results and with these new investments, I reiterate, as I have many times before, that we are dedicated to a $1.00 cash dividend for 2011. We as managers and shareholders are working hard to build a Company that both pay a substantial dividend and increase shareholder value by building and growing businesses and business platforms.

During the quarter we took the opportunity to sell two more large legacy subordinate loan positions, over $40 million of real estate loan balance, continuing our reduction of exposure to the subordinate positions originated before the financial crisis. Although we believe that these loans will be collectible, they were subordinate to much larger loans and exposed us to potential binary risk, so we considered it prudent to pare back those positions and focus our capital on new investments. In doing so, we took a loss of $2 million, as recorded this quarter. We maintained our general reserve to real estate loans and have a $10.5 million balance at the end of the quarter.

The first quarter of 2011 was marked by many positive events, including earning $0.26 of adjusted net income, with over $200 million of cash on hand to invest and making new investments of over $60 million into commercial real estate loans, our syndicated bank loan business, and commercial finance. All areas were able to achieve projected pretax returns on those investments of 12% to 25% on new dollars invested.

Finally, and in some way, most importantly, we put into overdrive our newly restarted commercial real estate mortgage business and have begun to put out the massive cash balances we have been carrying over the last year or two. We expect to finalize new lines of credit for this business within the next few weeks. Included in this cash balance is the net proceeds of the offering we completed at the end of the first -- of last quarter.

We expect that these dollars will be deployed in the next three to six months into new investments, with a focus on directly originated whole loan and mezzanine loans, aiming to achieve mid teen returns or better. The balance of restricted cash should be used for whole loan origination in a four to six month time period.

In my opinion, while doing this reshuffling, we have ended up with a much improved Company, more stable and able to seize more upside. Going forward, we will focus on expanding our real estate lending operations, finding new investments in syndicated bank loans, and finally, building franchise value at our commercial finance business. Now I will ask Dave Bloom to review our real estate activities. Dave?

Thanks very much, Jonathan. Resource Capital Corp.'s commercial mortgage portfolio has a current committed balance of approximately $657 million in a granular pool of 41 individual loans. Our portfolio of commercial mortgage positions is in components as follows -- 78% whole loans, 15% mezzanine loans, and 7% B-notes.

Of note in our portfolio composition is the significant increase in the percentage of self originated whole loans and the corresponding decrease in our subordinate debt positions. Year over year, we have realized a 15% increase in our whole loan positions, from 63% in May of 2010 to the 78% we have today, and the corresponding decrease in our subordinate debt positions, from 26% mezzanine loans and 11% B-notes in May of 2010. That's compared to the 15% and 7%, respectively, today.

The collateral base underlying the portfolio continues to be spread across the major asset categories in geographically diverse markets, with a portfolio breakdown of 34% multifamily, 14% office, 30% hotel, 14% retail, and 8% other, such as light industrial and self storage. We continue to see both sale and financing transaction volumes increasing and liquidity returning to the market, and we continue to experience payoffs in our portfolio.

During the first quarter, through today, we closed three new loans, totaling approximately $26 million and have another three loans, totaling approximately $30 million, that are approved and in the closing process for a total of $65 million in aggregate new loan production. We currently have a full forward pipeline of approximately $200 million of new transactions, and we'll continue to convert select opportunities to loans for our portfolio.

We see increased liquidity in all segments of the market, and after the close of the quarter, we again took advantage of this increased liquidity by selling out of two subordinate debt positions, one B-note and one mezzanine loan, at extremely high dollar prices. We still see substantial activity in the subordinate debt market, as large funds and other market participants look for ways to deploy capital without the benefit of direct whole loan origination capabilities.

RSO's relatively small remaining portfolio sub-debt position was originated during a time when there was still good relative value in this space and while we were fully establishing our whole loan origination platform. These subordinate debt positions tend to be in complex, multiparty capital structures, and we view our ability to exit at high dollar prices as a way to eliminate binary risk from our portfolio, after having collected several years of high quality income from these positions.

The ability to sell and remove ourselves from these complicated subordinate debt positions provides additional equity that we will deploy in the new whole loans in situations where we are the sole lender.

We are impressed with the resilience of our existing portfolio and pleased to see that asset specific business plans are again progressing and borrowers' value creation plans being realized. Across the portfolio, leases are being signed in office buildings, rents are increasing at multifamily properties, occupancy and average daily rate numbers at hotels are rising, and so on. In addition, we are again hearing from borrowers about unsolicited offers on properties and other situations that will result in payoffs of loans in our portfolio.

From a credit perspective, we note improving metrics across the portfolio, with a majority of the properties securing our loans having improved cash flow on a year over year basis and continuing to trend in an upward direction. I am pleased to report that our commercial mortgage portfolio continues to be current, with no default.

The real estate debt markets have definitely returned, and we continue to observe a significant increase in financing activity from banks, insurance companies, and from reconstituted CMBS programs. We're again seeing situations where multiple lenders are competing for the same loans. The steadily increasing flow of real estate finance capital is obviously a positive sign for the market, in general, and for our portfolio, in specific, as we see a number of our portfolio properties readying for takeout financing.

RSO benefits from our focus and expertise in directly originating loans between approximately $10 million and $20 million, and even though there are a large number of capital sources in the market to make new loans, there are relatively few market participants focusing on these institutional, middle market size loans. Our full forward pipeline provides opportunities to directly originate whole loans at new market valuations, premiums spreads, and optimal structure.

There are hundreds of millions of dollars of loans coming due and not enough debt providers to address the total finance demand, as properties trade or as existing owners commit new capital to existing situations and seek refinancing at a new and much lower basis.

Having kept our nationwide origination asset management and servicing platform intact during the pullback in lending over the last full years -- over the last few years provides a distinct advantage, as we are again very active on the new origination front. Our borrowers and the intermediary community are extremely familiar with RSO as a capital provider, and our key professionals have remained in the market, representing RSO's lending platform. This continuity is a unique and distinguishing feature and provides the market with a proven platform with the same team that has closed approximately $1.5 billion of loans.

As our deal flow continues to increase, we are poised to take advantage of opportunities for well structured transactions at premium spreads in today's market and to match our production levels with our existing financing facilities and capital availability. RSO will continue to benefit from loan repayments or select additional loan sales as we reinvest well structured, higher yielding assets into our long-term locked in financing vehicles.

With that, I'll turn the call back to Jonathan and then rejoin for Q&A at the end of the call.

Thanks, Dave. Now I would like to review the first part of our investments in commercial finance and then introduce Christopher Allen to discuss the second aspect, syndicated bank loans.

In January, we transformed our previous investment in leasing into a new one, and now we own our interest through a joint venture we formed with Lee Financial and Guggenheim Securities. This joint venture is going well and is building its balance sheet, its proprietary vendor finance programs, and its staff. Remember, we also have warrants to purchase 48% of the business at a nominal price. These warrants give us the upside we are looking for, while the coupon gives us the ability to generate a nice current return. Stay tuned to the progress of this venture. While we wait, we will simply [clip] the 10% cash and pick coupons.

As for syndicated bank loan business, I wanted to introduce Christopher Allen, our Senior Vice President of leveraged loans, who will walk us through our existing portfolio, our new purchase of the management fees of Churchill Pacific Asset Management, CPAM, now called RCAM. Chris has been a senior officer here since our inception in 2005, and I welcome him as a participant in these calls. Chris?

Thank you, Jonathan. I'm very pleased to take a few moments to discuss our accomplishments in the bank loan space. As Jonathan mentioned, I'm the Senior Vice President of Resource Capital and the Chief Operating Officer of Apidos Capital Management and one of the founding partners of that business, along with Gretchen Bergstresser.

The bank loan business has grown in importance at Resource Capital, and I'm glad to have the opportunity to discuss that today and in the future. Resource Capital has direct exposure to bank loans through three CLOs managed by Apidos, and it earns fees on additional bank loans through its ownership of Resource Capital Asset Management, formerly Churchill Pacific Asset Management.

Resource Capital's three bank loan portfolios have a carrying value of $905.3 million and approximately $930.9 million in par value. Resource Capital Asset Management has assets under management of approximately $1.8 billion. For the most recent quarter, the three CLOs that the Company owns produced interest income 33% higher than in the first quarter of 2010. Apidos CLOs have produced annualized equity returns greater than 23% since inception.

The current cash on cash returns, based upon our original investment of $79.5 million, is approximately 33%. The carrying value of our bank loan portfolio is approximately $49 million, representing approximately $0.69 of book value per share, such that, the return on equity of our bank loan investments is approximately 54%, with remaining upside accretion from discounted loans and securities purchased of nearly $26 million.

Overall, in my opinion, the portfolios are in excellent condition. They remain very diversified across industries. The average position size is about 40 basis points, or roughly, $1.2 million. The highest concentrations are in healthcare, business services, broadcasting and entertainment, and printing and publishing. Included in the top ten holdings are issuers such as Community Health Systems, SunGard Data Systems, Cablevision, and Flextronics.

The average rating is between a B2 from Moody's and a B-plus from S&P, strong ratings for loans suitable for CLOs. There is very little triple C exposure of less than 5% across the portfolios, about 2% of second liens, and no bonds.

We continue to forecast a very benign outlook in corporate credit for the next two years. Our belief seems consistent with that of other market participants. According to S&P's leverage commentary and data, published on April 1 of this year, there were no loan defaults in March. As a result, the lagging 12 month loan default rate fell to 1.11% by amount and 1.62% by number, both three year lows. Currently, the Apidos last 12 month default rate is .11%.

Our watch list declined by more than 10% for the quarter. All of our deals have increasing amounts of principal cushion versus last quarter and a year ago. According to Citigroup's global structured strategy report of December of last year, Apidos is six out of 48 US CLO managers for having the highest average cushion in its CLOs. During the downturn in March, 2009, Apidos had the highest cushion, according to the same research.

Stemming from Resource Capital's successful experience with bank loans, managed by Apidos, Resource Capital has sought to be a beneficiary of manager consolidation in the loan space. On February 24, Resource Capital completed its first loan manager consolidation with the purchase of Churchill Pacific Asset Management for $22.5 million. Now renamed Resource Capital Asset Management, it manages five CLOs totaling approximately $1.8 billion in assets under management.

By owning the manager, Resource Capital is entitled to the fees earned from managing bank loans, which tend to be very stable over time. Resource Capital Asset Management expects to receive management and incentive fees in excess of $33 million over the next several years, earning expected IRs of approximately 22%, pretax, with the possibility of additional upside.

Going forward, we believe that the trend of manager consolidation will continue and that Resource Capital will be a major beneficiary. We regularly review additional acquisition candidates.

The new issue CLO market is becoming much more attractive as well. Credit spreads have returned to more normalized levels, post crisis, and the risk appetite of investors has returned. In addition, the bank loan asset class has shown that it has performed very well fundamentally. With triple A lending at attractive levels, we should have the opportunity to continue to earn pretax returns in the high teens or low 20s.

We have deployed our efforts, on behalf of Resource Capital, with excellent results and look forward to continuing and expanding that success in the future. Please feel free to contact me if you would like more information on our bank loan activities.

Thank you, Chris. Now I will ask Dave Bryant, our Chief Financial Officer, to quickly walk us through the financials.

Thank you, Jonathan. Our estimated REIT taxable income for the first quarter 2011 was $8.6 million, or $0.14 per common share. I want to add a few thoughts about the REIT taxable income metric for Q1 2011.

There were two non-cash losses from GAAP earnings to arrive at the estimated REIT income number, namely, losses from a real estate joint venture of $4.4 million and net book to tax adjustments of $1.6 million from our foreign TRS subsidiaries for losses previously recognized on the books. These combined non-cash items of approximately $6.4 million, representing timing differences, reduced REIT income by nearly $0.11 per share, without affecting our ability to pay the dividend, which, of course, was $0.25 per share, as declared by RSO's Board.

At March 31, 2011, RCC's investment portfolio was financed with approximately $1.5 billion of total indebtedness. That included $1.4 billion of CDO senior notes, $51.5 million sourced from our unsecured junior subordinated debentures related to our two TruPS issuances in 2006, and approximately $15 million of repurchase agreement debt from our new Wells Fargo facility.

We ended the period with $427.2 million in book equity. RCC's borrowings of $1.5 billion had a weighted average rate of 1.07% at March 31, a sign of the ongoing low interest rate environment. We remain committed to our long stated philosophy of maximizing match funding, and our investment portfolio is almost completely match funded by long-term borrowings at quarter end.

We continue to pass all of the critical interest coverage and overcollateralization tests in our two real estate CDOs and three bank loan CLOs through April of 2011. Each of these structures performed and generated stable cash flow to RCC in the first quarter. The CRE CDOs produced over $5 million -- $5.1 million, and bank loan CLOs generated over $6.3 million of cash flows during the period ended March 31.

Of note, as of April 30, we had in excess of $167 million in investible cash in these deals, comprised of approximately $53 million in the bank loan CLOs and $114 million in the real estate deals, respectively. This cash is available for reinvestment in our CLOs and CDOs to generate attractive -- very attractive spreads over the cost of the associated debt and strengthen our overall position in each structure.

For example, during the period ended March 31, as Dave Bloom mentioned, we originated two new CRE loans for a total of $18.3 million, at stated rates before exit and origination fees of 6.75% and 6.25%, respectively. Also noted by Dave, we see numerous additional opportunities to originate new loans in the near term, as we sell some of our legacy positions and reinvest the accumulated cash in these financing structures.

Our provision for loan losses of $2.6 million is almost entirely from losses on CRE loans. As Jon indicated, $2 million of provisions came from the sale of a B-note, which closed after quarter end. $400,000 was added for a previously impaired whole loan, and $700,000 was added to our reserves for costs related to the sale of a mezzanine loan, which was sold at par.

On the bank loan portfolio, positive credit trends remain, and accordingly, reduced our reserves $5.5 million. Overall, our credit otherwise remains stable, and, notably, all of our commercial real estate loans, both legacy and newly underwritten loans, are performing.

Our leverage is 3.4 times. When we consider our TruPS issuances, which have a remaining term of 25 years, as equity, we see our leverage drop to 3.0 times.

Focusing on real estate, we began 2010 approximately 2.3 times levered on our CRE CDOs. After giving effect to the debt repurchases throughout 2010, an effect to year-to-date 2011 activity, we ended the March quarter a mere 1.5 times levered on our real estate portfolio.

Our GAAP book value per share was [$0.06008] at March 31, up $0.09 from [$0.0599] at December 31. The change, quarter over quarter, resulted primarily from earnings of $0.19 per share, improved marks on our CMBS portfolio of $0.07 per share, a reflection of the rally in that market, $0.06 per share from our common stock sales, and improvement in the marks on our cash flow hedges of $0.02, all of this offset by the dividend of $0.25 per share. And all these per share amounts are based on our new share count post offering at the end of the March quarter.

At March 31, our equity is allocated as follows -- commercial real estate and CMBS, 71%, commercial finance, 24%, which breaks down as 17% in bank loans and bank loan management combined and 7% in the small ticket [reaching] enterprise. We also have 5% of our equity in structured notes.

With that, my formal remarks are completed, and I turn the call back to Jonathan Cohen.

Thanks, Dave. We are excited to reap the benefits in new opportunities we have already seized and to take advantage of even more opportunities. We have started to do so already, and we look forward to sharing the results with you in the future periods. Now we will open up this call to any questions, if there are any.

Thank you. (Operator Instructions). Your first question comes from the line of Steve Delaney with JMP Securities. Please proceed.

Thank you. Good morning, everyone, and congratulations on a very solid first quarter and start to 2011.

Thanks, Steve.

I guess this is for Dave Bloom. I just wanted to -- I was trying to take as many notes as I could, but I'll make sure I understand the origination activity, year-to-date and pending. Was it two loans for $18.3 million that actually closed in the first quarter?

Since the first quarter, through today --

Yes.

Because we had some other loans closing, it was a total of $26 million, and it was three.

And, Steve, that includes future funding components to those loans.

Yes.

Whereas, the $18.3 million was the amount funded, physically, during the first quarter.

So, year-to-date, we're at three -- through today, three new loans at, roughly, $26 million?

Exactly. We're -- no -- yes, but with another $39 million that are in the closing process.

And that's what I wanted to, like, go to as part two of my question. So, as far as pending, that you would expect to close, maybe, before June 30, how many loans and for what dollar amount would you be expecting? Roughly.

Well, Steve, this is Jon. I think that we're going to close the $39 million in the next month, and we probably expect another kind of $15 million to $20 million after that, and you should see -- basically, the way it works, as you know, as you start up this process, every quarter will be more.

Yes.

So you'll see exponential growth into the next quarter, into closing, so we have apps that are going out now that -- in a pipeline of close to $200 million. And so, when we talk about putting out the money into this -- into our restricted cash and our CRD CDOs, we expect that to be three to six months before we get that all invested.

Sure.

Now I keep doing Dave Bloom a disservice, because I keep selling legacy loans, granted at par, or close to it, so I keep replenishing his coffers a little bit, making his job a little bit harder.

Well, it sounds like he's got a lot on the desk.

Yes.

Would it be reasonable to think that once -- because you are building this momentum, that somewhere around, like, at least $50 million or maybe $75 million a quarter -- does that seem like a reasonable closing volume?

Yes. At close.

Looking out to the second half? Okay. And then, Jonathan --

No, I just want to retract that. As we get -- Steve, just -- that's probably right for the next few quarters, but after that, we'll probably see a little bit of a hockey stick.

Okay.

You guys just -- the work that is going on in the front end now is massive.

And my last question -- you touched on it in your answer. You've sold -- I believe it's four loans now, between what you did in the first quarter and what you have planned to sell here in the second quarter, of these subordinate loans. Do you feel -- I mean, have you about called out what you needed to, or could we see some additional selling out of the portfolio from the legacy stuff?

I mean -- to be honest, like, we're not actively selling, but people are actively buying.

Okay.

So, if we get a call tomorrow that says, hey, we'll take a loan off your hands that -- at par, after we've made 9% through the financial crisis on a loan that is not really that important to us and has binary risk, we always look at it. So there are a lot of private equity firms -- a lot of private equity real estate firms that are looking at the legacy loans as a good way to position themselves in these buildings, and they want to control the buildings.

A lot of times we own the first loss or the controlling piece, so they're very valuable to these players. So if we got a call tomorrow, we could sell something, but it's not as though any of these loans were that we pick up the phone and that we wanted to sell it to somebody specifically.

Got it. So it's really a matter somebody who is strategically involved in that particular property, as far -- or -- and that's how they actually know about your role in the first place?

Right. Or it may be somebody who is just calling the universe to see -- like, we like Manhattan, we like LA, we like some area, and we want to be involved. We like these buildings. They look up the cap structures and come talk to us about it. Or, it's the owner of it, and he's trying to reposition it in a partnership. There's lots of different scenarios that can happen here. But, no, there's nothing on the horizon that we're actively marketing. As of this point, we're happy with what we have.

Okay. Sounds good. Appreciate the color. Thanks.

Thanks.

Thanks, Steve.

Your next question comes from the line of Gabe Poggi with FBR Capital Markets. Please proceed.

Hey. Good morning, guys, and thanks for all the -- the color was great on the conference call.

Sorry. It might have been a little too long, but we're --

It was deep, but that's okay.

Transparency is our middle name, so -- okay.

Quick question -- first question is you guys mentioned that you've reduced your balance of pre-2008 mezz and B-note exposure to $137 million. Can you remind me what the pre-2008 balance is in the first mortgages, and what those first mortgages, LTV, is, give or take, right now? Just -- I know you have a bigger balance of firsts. I kind of want to get a -- what I'm trying to get to is --

I would say we have --

(inaudible) legacies and then, the new stuff you've done.

Well, it's actually -- I mean, we haven't really done any new mezzanines since then, so -- and I may be wrong in this calculation, and we'll get back to you if I am, but my gut is that we have about $660 million of loans, so we have $137 million of pre-2008 mezz loans. We haven't really -- we've originally, maybe, a small bit, not much. So you'd be talking about $500 million of first loans -- first mortgages.

Right. But how much of that $520 million is before it was originated (inaudible)?

The bulk of it, probably, $440 million or so, because we've just started putting on new mortgages.

Okay. That's helpful. Then, in terms of --

And then, you asked about LTV. They were underwritten to 75%. Probably, at some point, they had bumped to 95%. They're probably -- certainly, on the multis, back to 75%. It just depends, but it's probably -- I would say slightly north of 80%, probably, on kind of an underwritten today.

Okay.

On the whole loan, I'm talking about.

Got you. That's helpful. When you guys talk about, kind of, your capital recycling -- Jonathan, you just mentioned you're selling loans, so there's active bidders for loans, and Dave is getting new capital to recycle. What is the general spread pickup you guys are getting, inside the CDOs, as you recycle? Between --?

Well, I would say that if it's an old mezzanine loan, it's probably breakeven to plus -- like if you sell some -- 8%. We're probably getting 8% on a new whole loan, though, so it's a much better asset than we owned before.

Yes.

Plus some fees here and there and the other place. But if we have a whole loan that prepays, which is also happening, we're probably picking up 400 basis points.

Got you.

But all the stuff we've been selling has been mezz and subordinate risk.

Right, right. And then, one last question. Can you just provide a little more color on what you think, kind of, the go forward opportunity set is for [LEEF]? I know you guys have a 10%. You clip your coupons, but, kind of, the bigger picture, down the line, for LEEF.

Basically, they're rebuilding their balance sheet with our capital, very successfully, and so, as the quarters go by, according to the -- our position there, we get more and more of a cash coupon out of them, as well as we own 48% in nominal price and warrants. And eventually, we believe the banks are starved for leasing companies and other types of really high quality lending opportunities that are done on an actuarial basis and through a systematic approach, and I think that these kind of companies will trade at big multiples within the next 36 months. So we're fairly bullish on the prospects there.

Thank you, guys. Good quarter.

Thank you.

Thanks.

(Operator Instructions). And with no further questions in queue, I would now like to hand the conference over to Mr. Jonathan Cohen for closing remarks.

Again, we appreciate your support during the quarter and the past few quarters, and we look forward to performing for you in the future. Thank you.

Thank you for joining today's conference. That concludes the presentation. You may now disconnect, and have a wonderful day.