Good morning, ladies and gentlemen, and welcome to the KCAP Financial Incorporated 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, August 3, 2017. 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 these 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 all for joining today's call. Today, I will discuss our recently announced joint venture with Freedom 3 Opportunities and the related redemption of $148 million of debt. I will also review some of the highlights from the quarter and provide 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 more thorough review of the quarter results and financial condition. We will then open the line to your questions. A presentation outlining a few of our key accomplishments during the quarter can be found on the IR section of our website. Let's start on Slide 3 of our presentation. For the second quarter of 2017, our NII was $0.07 per share. As a reminder, we also report a non-GAAP metric called Resources Available for Distribution, which is a good proxy for cash available to shareholders. Resources Available for Distribution was $0.09 per share in the quarter. All of these were affected by an unusual level of professional expenses. Our second quarter distribution was $0.12, consistent with the $0.12 paid in the first quarter. At the end of the quarter, KCAP had approximately $19 million in investable cash due to repayments over the past few months. We expect to invest this cash over the next few months, which will have a significant impact on income, going forward. Before providing details on our direct lending business and the performance of our asset manager affiliates, I'd like to discuss the recent actions we have taken to facilitate future growth. On July 20, 2017, we announced a joint venture with Freedom 3 Opportunities to create KCAP Freedom 3. We contributed approximately $35 million to the…

Thank you, Dayl. Good morning, everyone. As of June 30, 2017, net asset value stood at $5.10, which is down from $5.14 at the end of the first quarter of 2017 and down from $5.24 on December 31, 2016. The company declared a $0.12 distribution in the second quarter of 2017, consistent with the first quarter of 2017. Net investment income was $2.6 million, or $0.07 per basic share, for the second quarter of 2017, down from $3.2 million, or $0.09 per share, for the first quarter of 2017 and down from $5.8 million, or $0.16 per basic share, for the second quarter of 2016. Interest income on our debt securities for the quarter ended June 30, 2017, was $4.8 million, compared with $4.6 million for the first quarter of 2017. Interest income on our debt securities was $5.2 million in the second quarter of 2016. Our debt securities portfolio contribution to total investment income for the quarter was 62%, which compares to approximately 59% for the first quarter and 54% for the second quarter of 2016. Investment income from CLO fund securities decreased to $2.8 million in the second quarter of 2017, compared with $3.1 million in the first quarter of 2017 and $3.4 million in the second quarter of 2016. We received a distribution from our asset manager affiliates of $650,000 in the second quarter of 2017. Such distribution is in excess of the AMAs' estimated taxable earnings and profits and is, therefore, treated as return of capital. The AMAs distributed $850,000 in the second quarter of 2016, all of which was a dividend to KCAP. For the 3 months ended June 30, 2017, total expenses increased by approximately $580,000, as compared to the same period in 2016, primarily attributable to costs associated with non-recurring professional fee expenditures.…

[Operator Instructions] And our first question is from the line of Paul Johnson, with KBW. Your line is now open.

Good morning guys. Thanks for taking my question. I just had a question on you guys' CLO management business, I was wondering did you guys at any time this year have you been able to refinance or reset any of your CLOs?

We have been actively pursing several resets, I think as we spoke on the last call. None of those – again, these are all private placements, so we're limited in what we can say about those and the progress on those. But we are actively pursuing those opportunities, and we expect you'll be hearing some announcements between now and the end of the year on several fronts.

Okay. Thanks. And then my other question was actually for the professional expenses and just what drove the one-time sort of unusual amount of professional expenses, I'm just assuming that it had to do with the JV that you guys formed with Freedom 3, but - and I apologize in advance if this was stated in the Q. I just wanted to ask about that.

No, that's fine, Paul. Yes, it's various things. That is one of them. There was legal fees and other fees associated with the JV. We also had some one-time recruiting fees for positions that we now have, and we had other various legal expenses which are of a non-recurring nature.

Okay, great. And then my last question was just on that JV that you actually formed, what's typical the management fee for managing such assets in that JV structure, and I'm just assuming that you guys also have exclusive management rights to that contract, as well.

Yes, the collateral manager will be a wholly owned affiliate of KCAP, and the joint venture will have a certain amount of say in new assets. But generally, the fund is controlled by KCAP's investment committee. And we'll be earning a fee on the $300 million, or approximately $300 million, of 42.5 basis points. And we'll continue to own approximately 60% of the equity. So again we're now getting 100% of the income on $200 million; we'll be getting 60% of the income on $180 million – 60% of the income on $300 million, which is like 100% on $180 million. Sorry. But it will not – it will probably be the early fourth quarter before we get it up to $300 million.

Okay. Thanks for taking my questions. Those were very good answers.

Thanks.

Thanks.

[Operator Instructions] And I'm not showing any questions in the queue, sir.

Well, thank you very much, everyone, for the call, and we'll talk to you again in November. Thank you.