Good morning, ladies and gentlemen, and welcome to the KCAP Financial Inc. Conference Call. An earnings press release was distributed yesterday. If you did not receive a copy, the release is available on the Company’s website at www.kcapfinancial.com in the Investor Relations section. As a reminder, this conference call is being recorded today, Thursday, November 03, 2016. This call is also being hosted on a live webcast which can be accessed at our Company’s website at www.kcapfinancial.com, in the Investor Relations section under Events. Today’s conference call includes forward-looking statements and projections and we ask that you refer to KCAP Financial’s most recent filings with the SEC for important factors that would cause actual results to differ materially from those projections. KCAP Financial does not undertake to update its forward-looking statements unless required by law. I would now like to introduce your host for today’s conference, Mr. Dayl Pearson, President and Chief Executive Officer of KCAP Financial. Mr. Pearson, you may begin.

Thank you. Good morning and thank you for joining KCAP Financial for a review of our third quarter 2016 results. Today, I will review some of the important highlights and activities from the third quarter as well as provide some context for our direct lending business and the performance of our Asset Manager Affiliates. I will then turn the call over to our Chief Financial Officer, Ted Gilpin, who will provide a brief recap of our third quarter operating results and our financial condition at the end of the quarter. We will then open the line for your questions at the end of the call. A presentation outlining a few of our key accomplishments during the quarter can be found on the IR section of our website. To start let me provide a brief recap of some of the important highlights from the third quarter which are summarized on slide three of our earnings presentation. For the third quarter of 2016, our NII was $0.12 per share. Our third quarter shareholder distribution was $0.15 per share consistent with the $0.15 paid in the first and second quarter of 2016. This does not include approximately $0.02 per share in cash distributions from Asset Management Affiliates [Indiscernible]. I would now like to discuss the performance of our loan and securities business and Asset Management Affiliates in more detail. Turning to Slide 4, during the quarter we invested approximately $17 million in new originations. This is primarily funded by repayments and sales and placeholder assets. These new loans had a yield slightly less than the assets they replaced. We have also experienced an increase in repayments and repricings as a result in increased strength in the credit market, although the middle market [Indiscernible] Credit quality over the portfolio continues to be strong with…

Thank you, Dayl. Good morning, everyone. As of September 30, 2016, our net asset value stood at $5.38, which is down from $5.45 at the end of the second quarter of 2016 and down from $5.82 as of December 31, 2015. As Dayl mentioned, the company declared a $0.15 distribution in the third quarter of 2016 consistent with the second quarter as well as the fourth quarter of 2015. Net investment income was $4.5 million or $0.12 per basic share for the third quarter of 2016 down from $5.1 million or $0.14 per basic share for the second quarter of 2016 and down from $6.5 million or $0.18 per basic share for the third quarter of 2015. At this point, I’d like to discuss the details of our third quarter results. Interest income on our debt securities for the quarter ended September 30, 2016, was $5.2 million essentially flat compared to the second quarter of 2016 and down from $6.3 million for the third quarter of 2015. Our debt securities portfolio contribution to total investment income for the third quarter of 2016 was 58%. Debt securities portfolio contributed total investment income from the nine months ended September 30, 2016 57% compared to 52% for the corresponding period of 2015. Investment income from the CLO fund securities was $3.5 million in the third quarter 2016 compared with $3.4 million in the second quarter of 2016 and $3.9 million in the third quarter of 2015. The Asset Manager made a distribution of 750,000 or 40.02 per share compared to 850,000 or $0.02 per share in the second quarter of 2016. None of the third quarter 2016 distribution in the asset manager affiliates is estimated to be a taxable dividend. The company recorded net realized and unrealized appreciation of investments of approximately 1.7…

[Operator Instructions]. Our first question is from [Angelo Garena]. Your line is now open.

Good morning, thanks for taking my question. So I was going back through your CAD reconciliations just for the -- for this year. And I just want to make sure I understand, how your reporting this? If you go back to your Q1, you show that you had 17 available distributed 15, and then you show the difference as a minus 2. And now you're what you've distributed is greater than available and you're still showing as a negative quantity. Can you, can you let me know it was that just a typo or are you trying to say something in Q1 that was different than the current quarter?

So I guess, I can give you, is do you have an investor presentation of [Indiscernible].

I do, the slides.

Yes. So on page five is the is the nine-month ended for the third quarter, which is just the sum of the first three quarters.

Right. But if you look at Q1, if you – you have to take a moment to pull that up off your website. It shows we have 17 available and 15 out, and then it shows the difference is negative. And I'm assuming that that's just the type of that I'm not missing something that you're trying to say.

Yes, I mean if we have 70 available, it should have been 15, it should have been a—that would have been a positive to that we under distributed in the first quarter.

Okay, so that you just have a typo on that.

Well we are just double checking that while you ask us your next question.

Okay great. So the other question I had was now that you're over your leverage ratio, so you're tapped out your restricted from taking any more loans. Are there any other impacts on your current operations until you get back under the minimum world?

We're actually not over, we are 207, we have to be yet at 200.

Oh, I’m sorry, I misheard you then.

Yes, no we still have a little bit of room obviously we are not in a position where we want to add more debt at this point, but where we’re within the bounds of the asset coverage test.

And we do have, because of repayments we do have a know higher than usual amount of cash which we are looking to obviously reinvest in...

Right. In the CLO we are expecting that risk this year?

Well, CLOs are raised to a private placement process, which really restricts us from making any commentary. I just point to the fact that during the quarter, the warehouse provider did increase the amount they were allowed to warehouse without having us to increase our first loss, and so you can read into that whatever you want, but unfortunately we're in a in a quiet period on that moment.

Okay. Will that be something that you will since it is done through party, will that be a press release through KCAP or do we monitor its...

Now KCAP will issues a press release when we probably when we price the deal.

Okay.

So yes that will that will show up as it has in the past on our --sec announcements.

And just I guess one follow up question, why you're looking that up is has it -- over the last I have been a investor for a few years now, so from your perspective, have you -- are you thinking about where you are going, differently then you did two years ago. How do you see next year, and how would how does that compare to where you might have seen next year two years ago? As far as compared to what -- how you see your own company where it's going?

Yes, I think that's a great question. I think the board is constantly looking at different strategic alternatives for the company and we are working on a number of different potential projects to be able to enhance shareholder value. I can't really go into the details of that, but I people should take away from this is the board's just not sitting there waiting for something to happen. They have task management with looking for alternative ways of growing the company in the NNI, without issuing shares and there are some opportunities to do that.

But, but with that change, things that would change the nature and character of KCAP fundamentally I mean or just putting the focus on the things that you already doing.

Yes I think that's fundamentally in terms of our core competencies, our core competencies are not investment-grade corporate credit both on the probably syndicated side of the middle market side and the idea is how do you leverage that core competence -- core competencies and growing an environment where issuing new stock is really not a alternative at the moment, and we assume...

So you're not necessarily creating new businesses or new markets, but rather expanding your current businesses into...

Expanding our current business through alternative means to get leverage what we have is I think of when you look at the track record both the CLO manager and KCAP in terms of credit performance, I think you argue as we can leverage that in otherwise.

Okay, thank you.

Thank you for your questions. Do we have... A – Unidentified Company Representative: The first question I had at the back is around the $0.02 of deposit of $0.02.

So it’s just typo.

Yes.

Okay. Thank you for taking my questions.

Thank you.

[Operator Instructions] At this time I am showing no further questions.

Okay, well thank you very much for taking the time to listen. We know it's very busy with lots of people reporting over the last few and next few days. So thank you all for listening and we will be talking to you again soon. Thank you.

Ladies and gentlemen, thank you for your participation in today conference. This concludes the program. You may now disconnect. Everyone have a great day.