Greetings and welcome to the NeoGenomics' Third Quarter 2016 Financial Results Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Doug VanOort, Chairman and Chief Executive Officer. Thank you. You may begin.

Thank you, Valery. Good morning. I would like to welcome everyone to NeoGenomics' third quarter 2016 conference call and introduce you to the NeoGenomics team that's here with us today. Joining me in our Fort Myers headquarters is Steve Jones, our Executive Vice President, George Cardoza, our Chief Financial Officer, Fred Weidig, our Controller and Principal Accounting Officer; Jessica King, our Manager of SEC Reporting; Rob Shovlin; President of our Clinical Services Division; and Steve Ross, our Chief Information Officer. Dr. Maher Albitar, our Chief Medical Officer and Director of R&D is joining us from our Aliso Viejo Lab in California. Before we begin our prepared remarks, Steve Jones, will read the standard language about forward-looking statements.

This conference call may contain forward-looking statements which represent our current expectations and beliefs about our operations, performance, financial condition and growth opportunities. Any statements made on this call that are not statements of historical facts are forward-looking statements. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond our control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements. Any forward-looking statement speaks only as of today and we undertake no obligation to update any such statements to reflect events or circumstances after today.

Thanks Steve. In this morning's conference call, I'll comment on our third quarter performance, the status of the integration of Clarient, our current management focus and conclude with a look forward to growth and value creation opportunities for our company in 2017 and beyond. We're pleased with our third quarter performance. I referred to it as a solid quarter in our Board review last week but solid is actually outstanding when considering the amount of change our business has successfully navigated during this time. It's also outstanding when you consider the overall numbers. Revenue was up over 140% from last year. That was due largely to the Clarient acquisition but also to organic growth even during the integration process. In terms of clinical genetic test volume, we believe base NeoGenomics grew approximately 25% and Legacy Clarient started to grow again with a year-over-year increase of about 3%. Although measuring the relative contribution is getting harder as the businesses combined. Profitability was excellent as we generated $9.1 million of adjusted EBITDA. This was 3.2 times greater than last year's level. Even though we are still operating two different as in Orange County using two different lab systems, and are managing through a transition from two to one, we still drove reductions and cost per test. We increased productivity and maintained excellent service levels. In fact we actually recorded the lowest cost per test in our history. We're particularly pleased with the amount of cash flow generated from operations. Our billing and cash management processes are strong. The record 9.6 million cash flow from operations in quarter three, now brings our total year-to-date cash flow from operations up to $21.7 million. This cash flow strengthened our balance sheet and gives us financial flexibility to pursue strategic and recapitalization initiatives. Steve will cover…

Thanks, Doug. Before we open it up for questions, I would like briefly touch on a few financial highlights from the quarter. We are pleased to report $60.8 million of revenue in quarter 3, a 142% increase over the prior year driven primarily by the inclusion of - test results but also by strong growth in the base NeoGenomics clinical test volume. Approximately $53.9 million of this revenue was derived from the core clinical genetic testing business, $1.9 million from Path Logic, and $5 million from the Pharma Services Division. Consolidated gross margin was 45%, a 50 basis point increase from the 44.5% reported in Q3 2015. This increase in gross margin was driven by the 6.2% year-over-year decrease in average costs of goods sold for clinical genetic test to $204. As Doug mentioned, this is the lowest level we had ever reported for this metric and this is before we unlock the additional cost synergies from having all clients on one laboratory information system and all of our Orange County, California employees in the same facility. Consolidated SG&A cost increased by $14.9 million or 135% from Q3 2015. However, as we discussed in the press release, 2.5 million on this increase was due to non-cash variable stock-based compensation and non-cash amortization of intangibles directly related to the Clarient acquisition. SG&A as a percentage of total revenue fell to 42.7% from 44% in Q3 2015. Given the reductions in cost per test and the economies of scale we achieved on the cash portion of our SG&A expenses, consolidated adjusted EBITDA increased by 224% to $9.1 million as compared to the prior year and adjusted EBITDA margin grew by 380 basis points year-over-year to a record 15%. Importantly adjusted EBITDA in quarter three was just $59,000 below the level reported in…

[Operator Instructions] Our first question comes from the line of Bill Bonello with Craig-Hallum. Please state your question.

Good morning. Hi, couple of questions, so wondering if you can give us a sense of how much total cost saving has been realized from the acquisition synergies thus far? In other words reflected thus far in the numbers versus how much incremental savings we could see in future quarters?

Sure Bill. Thanks for the question. So I think at the beginning of the year we said that we expected about $6 million of cost synergies in 2016. I think we raised it to about $6 million to $8 million of cost synergies and we think that that's about the number for 2016. And we expect next year that -- we said that we should have $20 million to $30 million of total synergies as a result of the Clarient acquisition and we think we're right on track for that.

Okay. And do you think do you catch most of the remainder next year or how should we think about that?

Well I think that we're going to by the end of next year we will have a run where we have captured a significant portion of that yes. What will happen next year Bill is the productivity increases will start to kick in as a result of people being in a combined facility and our clients being on one laboratory information system. So you can lumpy the cost synergies if you will into two buckets. The hard cost synergies and we're good way part through that and then you have the productivity increases that come from having people on combined systems and all in one facility and the piece that we'll pick up are lot more on next year as the productivity and efficiency increases.

Okay. That's helpful and as you progress through the process, have you identified any new opportunities that weren’t part of that original $20 million to $30 million plan?

Well I think some of the opportunities are clearer than they were before. I'll just give you an example. We did an analysis the other day and there are over a 100 Clarient accounts that only use Clarient for immunohistochemistry and we as you know Bill, we've grown in the past a lot by being a one-stop shop for our clients and we think that we have a lot of opportunity to provide efficient flow cytometry and molecular testing to all of those clients. So I think that the general buckets of synergy that we identified early on are exactly where the synergy is, but they are much clearer to us now.

Okay. That's very helpful. And then just finally you mentioned in your list of growth drivers you mentioned the potential on liquid biopsy including prostate, any update that you can give us on prostate timing going forward?

Yeah, thanks for that questions Bill. I would say that the results of our work Dr. Albitar has done a fantastic job there, are very encouraged and the performance characteristics are very strong. The feedback from the urology community as we've gotten out there are talked with the community about our test are very positive and we've just submitted a paper and we expect to have that published and when it's published we'll talk a little bit more about the test and I think we like to report back to our investors when we have a little bit more feedback on our results when we get into the marketplace, but we're encouraged.

Great. Thank you.

Our next question comes from the line of Amanda Murphy with William Blair. Please state your question.

This is [Archo] in for Amanda. Just a couple of questions. We heard some weakness in the broader space for utilization trends and we're wondering if you've seen any of that and piggybacking on that question have you seen -- what percentage of growth -- organic growth is due to market share gains?

Well thank you for the question. We don't really see a reduction in utilization. So I would say that the market in general is very -- is very concerned about utilization and I would say that we've always been fairly good working with our pathology clients in providing testing that's very important to our clients and patients. And there has not been any overutilization at all. So I think in terms of our utilization that's about the same as it has been. It is an interesting statistic that we publish every quarter call it average number of test per case and if you look going back five years it's hovered between 1.5 and 1.6 tests per case and even after client, it's right smack at 1.55. So we really haven't seen any trends to suggest that in the oncology separately there is less utilization. In fact look at what's really driving oncology in American just pure demographics. There is 25% more people turning 65 in American than there was six years ago and that's something that we think will continue to drive a lot of utilization in coming years. I will just add one thing, I was talking with a client this week at a major oncology group and they said we need to do more testing not less, because we offer a lot of value when it comes to trying to provide better outcomes for patients at lower costs.

Got it. Thanks and I guess another follow-up question to that is, is there any risk you see towards utilization and reimbursement under Hillary Trump scenario perhaps in election question.

Gosh, the truthful answer is I don't know. I don't think we -- but we're not expecting any meaningful disruptions to 2017 reimbursement Medicare policy the preliminary rule in July. The only time the preliminary rule deviates from the final rules is when new codes are introduced in the intervening period that happen once two years ago. That's probably the only time I can remember in 10 or 15 years where that ever happened. There have been no new codes introduced since July and we expect the final rule to be in line with where was in July and if that's the case, we'll see a little bit further reduction in flow cytometry but the rest of our business is just roughly flat with a little bit up in digital pathology. So overall we are expecting a very stable year for reimbursement next year.

I think most people do know that today 16% of our revenue is reimbursement of Medicare, the bulk of our business us reimbursed under contract directly with hospitals. So that provides some level of protection for us.

And then if I can sneak one more in, you had said barring any acquisitions, what kind of assets would you consider and looking at timeframe in the longer term, have you been speaking about could you shed some color on that?

We've said for quite some time that we would like to be a consolidator in this industry. We think there are opportunities for acquisition. You've seen how we behaved on that front. We like to acquire where we have an acquisition opportunity to acquire technology, which is more advanced where markets are going a little bit faster. We're very interested in pursuing data management and informatics kinds of initiatives. We've got a lot of experience now with Clarient and as I said it's a process now by which we're integrating and migrating customers. So we think that we got a process under management and we think we can do some more of it.

Thank you. I'll hop back in queue.

Our next question comes from the line of Drew Jones with Stephens Inc. Please state your question.

Thank. Good morning, guys. On the clinical services side it seems like we've been talking a little bit more over the past couple of quarters about larger customers, helping to qualify that a little bit can you talk about how you're getting these guys off the ground? Is it just a matter of getting your foot in the door with one certain test and then working your way towards one-stop shop? And then secondly, how much is left in the pipeline. I think Doug you said you pulled one over the - one over the wall so far. What's stack behind that?

Yes Drew so our customers are getting bigger and this consolidation is occurring not only in the Lab business but also with hospitals and cancer centers and pathology groups. So this is a trend which is occurring in the marketplace. We are increasingly penetrating the managed care markets so that offers opportunities, opens up opportunities for us. We're contracting with big hospital systems like premier last year, that opens opportunities for us. And as a result you know we are gaining larger clients around the country. So I think in terms of getting these accounts, it's all the stuff that we've talked about. It's having the managed-care plans, it's having the one-stop shop, it's having a comprehensive menu, it's adding service and coverage geographically. All these things are very important to gaining these accounts in and I would say that one thing but it's a combination of capability that’s allowing us to gain market share.

Okay. And then on the Pharma Service side, you guys have kind of mentioned last quarter that it is a lumpy business. Is there a normal seasonality to expect and then maybe a little more color on the multiomics platform that you guys have exclusivity with from GE. What kind of opportunities does that present longer-term?

Yes, I don’t think there is one seasonality in the business through - this is a long sales cycle business and the lumpiness has come partly because we haven’t had a consistently strong sales. There's been some change in our sales team and now we think we’ve got a very good sales team and a good service. So hopefully it will be a little less lumpy going forward. The multiomics technology is very interesting technology that GE invested heavily and Clarient invested heavily in over the last three years. Rather than me trying to explain technology, Dr. Albitar, do you want to just give us quick summary of what the technology allows for the pharmaceutical clients?

Yes, the closure now is multi-barometers, of one sections of picture. So you practically you can analyze a pathway, entire pathway at using one sections of tumors as you know tumor material becoming extremely precious specially in that context of clinical trials. So you can really apply multiple antibodies on the same sections and see the interaction between these antibodies of this [indiscernible] section provide a lot of information wrongs and mechanisms of oncologists and how drugs can work on these pathways. I hope I didn't confuse you more.

I guess it again is going to hit with that consistent theme of the tissue samples limited, is that a fair point.

Exactly. That helps in pharmaceutical company, very excited about the concept of using only the limited samples and getting as much information as possible.

Just one other key component of this is worth mentioning which is, many people think next generation sequencing is beyond and off for molecular testing. The issue with that is, you don’t get the relationships in terms of where the concentration of markers are in the tumor and in the multiomics platform gives you the special relationships to where the markers are. So really cool technology allows you to do multiple stains on a slice of tumor and then compare them and subtract one or more and look at space for it, 8 and 10 together alone isolated in taking out the others in doing all kinds of permutation of that. So it’s a very important technology, it's very interesting to lot of pharma companies.

And nothing to kind of change the view that that Pharma Service revenue longer term still is going to be the higher-margin revenue stream is that right?

We think it’s both higher growth and potentially higher-margin but we think that it will be higher-margin as we get to scale group. Right now we are investing heavily in the business and we need to get it at scale. At the level we think it's going to grow very fast and should be higher-margin than our clinical services business.

Great, appreciate it guys.

Our next question comes from the line of Chris Lewis with ROTH Capital Partners. Please state your question.

Hi, good morning guys. Thanks for taking the questions. Wanted to start just a question on the Neo based business growth of the 25% in the quarter continues to be strong, perhaps even more impressive given the migration requirements in the quarter. Can you just elaborate on what continues to drive that – the underlying strong growth there and the continued market share gains?

Sure Chris, I think it’s a lot of sense. So it's having a very robust managed-care contract base, it’s having consistent service, it's being able to be partners with pathology practices around the country. It’s having a one-stop shop menu that is the most comprehensive around. It's having a sales team that's pretty experienced in the marketplace that can go in and talk about new tests almost every couple of weeks. It's all those things. It’s the total franchise that allows us to capture the imagination of our clients and help to convince them that we can offer them a lot of value. I think unlike other companies in our industry, we are very, very focused on what we do and I think we do it pretty well.

And on that LIS migration process, you know I understand it certainly, but for those customers that have been successfully migrated. Any early commentary you can share in terms of what you're seeing, in terms of satisfaction levels, general feedback you proceed from them, and potentially any kind of changes or is it consistency in ordering trends with those customers?

The customers that we’ve migrated so far, we think are very happy. So we try to get feedback from them both through surveys and obviously from our own people from our sales team and from many of us that call on these clients. They like the Clarient capabilities that we've added to the NeoGenomics test offering particularly in the area of digital pathology. We are starting to see the older Clarient - legacy Clarient clients begin to order molecular testing and so they like the service, they like the combination of capabilities and they like the LIS system that is - then we program to provide the best of the best. So I think there is going to be a lot more growth opportunity as they begin to explore the full capability of our LIS system because quite often they are using the system just for one aspect of our testing menu and not for all aspects and there is real power there.

And then on the Clarient clinical services business, I think you said in your prepared remarks that it returned to growth this quarter around 2% to 3%, which is a nice trend to see and rebound from what that business has been doing. What steps and kind of processes have you put in place to turn that business to underlying growth and how should we think about the sustainability of organic growth in that Clarient legacy clinical business going forward. Thanks.

Yes, thanks. So one of the things that we did was got back to basics. So I’ll give you an example of that, and that’s the billing process. So we heard early on from Clarient clients that they were not happy with the billing process. And so as you saw from our results we invested in the Clarient billing process. We changed the team. We invested in the system. We got some terrific people and we don't hear any complaints anymore from Clarient clients. That was a real value detractor for Clarient clients and that's fixed now. The other thing is that service in this business is very important and we've been able to maintain our service levels. So we really haven't watched anyone. Through their migration process, I think we lost one pathologist in one pathology practice and I'm not happy about that. We're trying to get it back. So the retention rates have been very, very strong and that's the first thing that needs to happen in order for you to grow. You've to retain all your clients and so with that base now we've got a very sales team and the sales team is starting to make inroads and I think they're really hungry and can't wait to have this integration process behind them because they've got a number of clients on the radar screen and we think that growth in this business is sustainable and with auto approach the levels that we had at NEO are the best.

Okay. Thanks guys.

Our next question comes from the line of Raymond Myers with Benchmark. Please state your question.

Thank you. First Steve, I wanted to clarify your discussion regarding the convertible debt that NeoGenomics is considering retiring. Can you just clarify for us whether the company is considering any form of equity raise to retire that debt versus all cash and bad debt?

Thanks Ray. First for the clarification, we do not actually have any convertible debt cap structure. It's a Series A redeemable preferred stock although it's accounted for similar to that, there is no obligation to ever repay if choose not to. At this time, we have no plans to issue any equity to redeem the DE preferred. It's far more accretive to our shareholders to redeem the shares with internally generated funds in incremental bank debt and to raise equity solely for this purpose. One of the things we're considering doing and in discussions about now is putting in a large revolving credit facility that can be used this year and perhaps even again next year to do something similar next year. Of course that will depend on what are the strategic opportunities we may pursue, but at this point in time, we don't actually think we're going to need to issue any equity to redeem all the GE preferred shares over the next year.

Very good. I just wanted to clarify that and also it sounds like the customer conversion process will be concluding fairly soon. Can you help us understand the cadence of organic growth in the business once that process is concluded?

Sure, so the customer migration process I mentioned is about half way through. We're now in the final throws of that and we should wrap it up clearly by the year on the yeah. I mentioned to you that the list of large opportunities that we have on our radar screen has got us pretty excited and so we expect that -- we're going to be able to move pretty quickly to pursue those and to close those. I would say that just so people understand, this integration process has been quite a distraction really for our sales reps. Some of our sales reps have spent 50% of their time migrating accounts because migrating an account is just not calling them up and saying hey, you're going to be migrated next week. It's talking with them explaining the capabilities of our LIS system, it's talking with them about pricing changes. It's training them on our new systems. It's all of that stuff and it takes a while. So in areas, geographic areas where a rep has a lot of clients that are migrating, they're spending a lot of time on this and not spending time hunting. So beginning of next year we're back to hunting.

So that's a good explanation. Help us understand how quickly you go -- a rep will go back from completing the conversion process to actually growing revenue again because they can start hunting but then there is a sales cycle there. So how fast do you expect revenue growth rates to return to the historic norm?

Well, I would say you're right. There is a sales cycle but these accounts have been in the pipeline for some time. It's not like we're walking in fresh and saying hi I am NeoGenomics and they don't know us. So these things, some of them will take some time, but I think that we have the list of accounts on our radar screen and we think we can get to them pretty quickly.

Excellent good. And then touching finally on the pharmaceutical services business you expressed a lot of optimism of that growing. The $6.8 million in Q2 was a really nice high watermark in that business. How long do you think of it take before you might exceed that high watermark account?

We don't want it to be a high watermark for long.

Okay. Well that sounds very optimistic. Thank you.

Your next question comes from Nicholas Jansen with Raymond James. Please state your question.

Hi guys, I just wanted to touch a little bit on the incremental that you're seeing in the business clearly continuing to be quite strong. So maybe Steve just remind us how you think about the drop-down as the synergies play out in '17 and '18 and the continued reduction in cost per test on a standalone basis, how we should be thinking about that the margin and effectively the cash flow generation of this business as we move forward to '17 and beyond?

A great question, thanks Nick. We haven't really given any guidance for '17 or '18 yet except we have said we expect to be at 20% to 25% EBITDA margin when we get north of $300 million in revenue, which currently you guys have us achieving that goal in 2018. So just to 22.5% of $300 million would imply EBITDA of $67.5 million. If you take the midpoint of our range for this year $35 million $36 million to $38 million, so we go from $37 million to $67.5 million over the next few years. Those are some pretty strong incremental. We'll be adding $30 million plus of EBITDA on something on the order of $53 million of incremental revenue. You just assume we hit the midpoint of our guidance for this year. So those are you 50% plus incremental EBITDA margins on the incremental revenue. We have no reason to believe that that won't come through. I think we have been fairly conservative in our guidance so far on when we're going to realize synergies. We have an opportunity to really accelerate that synergy realization process next year to not only continued hard synergies from combining facilities and combining people on one system, but also unlocking a lot more productivity and efficiency. So next year is going to be something that we think will continue to be a stellar year for gaining on or improve -- further improving our cost per test metric. I think we're going to leave it at that.

Okay. That's helpful and then my second question regarding the facility consolidation, the lab consolidation that's expected in the first quarter of '17, I wasn’t sure how much risk there is tied to that from an operational perspective? I understand fully the LIS integration was very handholding all your customers, but are your customers going to notice anything regarding that lab consolidation or was that more of an easier thing to consider from a risk perspective?

Well if you ask our internal people it's not easy because we're choreographing a lot of movement of people back and forth, but I don't think our customers will know the difference. We said all along that the facility will be consolidated around year-end. We've had maybe a few week slippage after that. I think the air conditioning systems that we loaded on the roof were a little too heavy and so we had structurally support those so that the latest maybe two or three weeks, but it's being managed very, very well, very disciplined process. We don't think there's really much risk, but there are moving parts but we've moved laboratories before and we don't think there is a significant risk there. There is an important distinction that I think we have a lot more clarity on this quarter. In previous quarters on our calls we were still in the middle of the integration project and there were unknown risks to what might happen after we get into the project. I would say we feel highly confident that there is really not much in the way of unknown risks that could pop up and we have processes around everything that we know about. It's now managing through processes. As Doug mentioned one of our key leaders said instead of defining and executing on our brand new project, which requires figuring everything out we've got a pretty good handle what needs to happens, and we’re well underway in terms of managing that process.

Okay. That’s helpful. And then last one from me in terms of the - about halfway through the LIS integration thus far. Is there any difference in the customers converting in 4Q relative to 3Q or is there any sizable difference, just trying to get a sense of have you done the easier customers versus the larger or vice versa. Thanks.

We started off the way we've won was customers that use both NeoGenomics and Clarient. So they were a little bit friendlier but we're now in way six. So we are moving along very nicely and we expect this process to wrap up uneventfully in the next 6 to 8 weeks.

Nice job in the question guys. Great progress.

Our next question comes from Joe Munda with First Analysis. Please state your question.

Good morning. Few quick questions here Doug, I think in your prepared remarks you talked about sales force rationalizing, keeping the best people from both companies. Can you give us a sense of the numbers where the rep count is and then follow up to that, you talked about building out possibly a separate sales force pro forma. I mean could you give us some sense of what that would look like as far ties and timings?

Sure Joe. So right now we have about 33 representatives, plus six sales managers on our clinical sales team, plus we have three or four people in the managed care side who really are working very hard to gain us access to these big contracts, plus we have couple of specialty representatives. So that's the clinical team. On the biopharma team, we have added I think four people recently and I think we're to about six now. And these are very experienced people by the way.

Okay. In regards to Pharma I mean are they selling specifically the multiomics platform or the entire suite of NeoGenomics testing. And the question is multiomics the centre piece of biopharma, how should we look at it, is it a component or is it the actual center piece of sale?

Yes, these sales representatives in the biopharma area are selling their whole product portfolio. And multiomics is very interested technology but it's one of a variety of technology. As you now we offer and we haven’t really sold a heck of a lot of flow cytometry to Pharma industry but we flow cytometry some very interesting aspects of that as well, like the molecular and our next generation sequencing capabilities. We have FISH testing, we have multiomics, we have a huge and probably one of the broadest immunohistochemistry menus around and digital pathology. So we’re selling the whole offering.

Okay. And then I guess on the acquisitions front, what would interest you more a platform like similar to multiomics or an established business generating revenue that you could pulled on – does there need to be technology involved let's say, if you’re going to do an acquisition on the Pharma side.

There does not need to be technology involved. So in terms of acquisitions we are quite interested in acquisitions where we have synergy and we said that all on where there's revenue and cost synergy, we'd be quite interested. But as our strategy is evolving we are also quite interested in providing capabilities to our clients that's going to allow them to – allow us to add life. We were going to an era of value-based reimbursement and informatics and data and powerful analytics and algorithms are very important to that. And so we would be quite interested in leveraging the data that we have in oncology with clinical data and using tools applying tools to allow for us to improve the lives of patients who are suffering from cancer and not only drawing better outcomes but at a lower cost. And so we would be very interested in data type products and informatics type products and I think those things would be higher or less.

And it would probably still be in cancer correct or what would it…

Yes.

Okay.

Our next question comes from the line of Carolina Ibanez-Ventoso with Janney Montgomery Scott. Please state your question.

Hello, good afternoon. I’m on for [indiscernible]. You’ve covered part of ground already so just one question from me. On your prostate cancer test said you’re now the permission of the special committee that – committee with your partner is Health Discovery Corporation. Could you provide some commentary on the involvement, on their involvement on the settlement of the test? Thank you.

So we are aware that Health Discovery issued a press release in late September. We are in discussions with Health Discovery to clarify certain aspects of our relationship but it's important to note that our prostate cancer test does not use to support vector machine technology, it's something that we've used the different approach for. And so we expect to have conclude, we have very excellent relationship with Health Discovery Corporation. We expect to conclude clarifications on our agreement here in the next few months.

Okay. Thank you.

We have a couple of questions that have come in via email that have not actually come up yet. Why the big bad debt reserves, I like 74 days, George you want to comment on that, I think it’s too different from where it used to be.

Yes, our idea was - actually we calculated 76 days, so that was actually down slightly from the start of the year but Clarient did come in with higher bad debt historically. So you will see a little bit more bad debt this year than in prior years with different NeoGenomics. We do expect over time that bad debt rate will come down and then migrate more in the Neo's billing processes and system.

Great. And here is one on the Delta and other current assets and this one is actually fairly easy. We reversed out $16 million of deferred tax assets in earlier part of this year and as a result and is reversed out against the deferred tax liabilities. And so you'll see here deferred tax assets or other current assets are down considerably from year-end. We see we got one more on what sort of interest rate do you think you will be able to achieve on the bank debt? We’re currently in conversations with a range of players that will depend on whether we use the traditional money center bank or more of the alternative financing source. We currently pay as we work out all the different fees and amortization of costs on it, somewhere north of 8% we believe there is an opportunity to cut that approximately in half if we can get the right kind of money center bank involved in our relationship. And so we are optimistic that we can make substantial reductions in the interest rate. I think we have no further comment via email. So Doug if you could wrap this up.