Britt Reynolds – President and Chief Executive Officer Michael Salter – Chief Financial Officer

Matt Bottomley – Canaccord Genuity Joel Hurren – RBC Capital Markets Russell Stanley – Mackie Research Capital Douglas Loe – Echelon Wealth Management

Good morning, ladies and gentlemen. Welcome to the Medical Facilities Corporation’s 2016 Second Quarter Results Conference Call. Before the call is turned over to management, listeners are cautioned that today’s presentation and responses to questions may contain forward-looking statements within the meaning of the Safe Harbor provisions of Canadian Provincial Securities Law. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the MD&A for this quarter, the Risk Factors section of the Annual Information Form, Medical Facilities and other filings with Canadian Securities Regulators. Medical Facilities does not undertake to update any forward-looking statements. Such statements speak only of the date made. Listeners are also reminded that today’s call is being recorded for the benefit of individual shareholders, the media and any other interested parties who may want to review the call at a later time. I would now like to turn the meeting over to Mr. Britt Reynolds, President and CEO of Medical Facilities. Please go ahead, Mr. Reynolds.

Thank you, operator, and good morning, everyone. Joining me today is Michael Salter, our Chief Financial Officer. Prior to the market opening today, we release our 2016 second quarter financial results. Our news release, financial statements and MD&A may be accessed through our corporate website at www.medicalfacilitiescorp.ca and these were also filed on SEDAR today. For today’s call, I’ll start by discussing the results of our second quarter and then Michael will review the more specific financial results. I will provide some outlook comments and thereafter we will open the call to questions. The second quarter of 2016 was my first full quarter as President and CEO of Medical Facilities, and during my first 100 days I have visited all of our facilities, met with our leadership and operational teams. I’m impressed with the highly qualified positions and staff at each of our facilities and their commitment for caring for our patients and for the recognized quality care that is provided. Prior to my arrival, collectively our physician partners and our operators had embarked on specific initiatives; focused on improving our operating efficiency. My focus has been on dedicating the global resources and also in participating and finding the best practices and synergies. As you are aware, the care delivered at our facilities has been recognized among the top nationally, and we will continue to place that at the forefront. Subsequent to the quarter end, we entered into a Letter of Intent to acquire an 83% indirect interest in the Unity Medical and Surgical Hospital, a physician owned medical and surgical hospital in Mishawaka, Indiana. This is a 29-bed Medicare certified facility with four surgical and two special procedure suites, focused on providing orthopedic surgery as well as ophthalmology, podiatry and pain management procedures. We’re very pleased to be finalizing this transaction and we see the tremendous value that Unity Hospital brings by increasing our geographic diversity. Further, this development complements the services offered at our other facilities. Once fully integrated, this acquisition will further increase our benchmarking efforts and improve our operational efficiencies. Unity has historical performance measures that are consistent with our existing facilities and has received many awards for service quality. At present, we have acquired the underlying hospital real-estate in the initial transaction for $27 million. We are in the final stages of completing the definitive agreement to acquire a majority interest in the hospital operations which is anticipated to be completed later this month. Under the terms of Letter of Intent, we will initially purchase an indirect ownership of 62% of the hospital and we’ll have the contractual right to increase our ownership over the next three years. I’m excited that we have been able to deliver on this attractive growth opportunity and I would like to thank the myriad folks both within MFC and at Unity who have worked so hard to bring this about. Now, I would like to turn from our growth agenda to speak to our financial results for the past quarter. We reported revenue of $76.7 million which represented a 4.2% interest (sic) from the $73.6 million in the second quarter of last year. This increase was primarily due to increased business or case volume in our facilities, specifically, Black Hills and Arkansas Surgical Hospital and our Surgery Center in Newport, California. We also had incremental revenue contribution from integrated medical delivery, our revenue cycle services unit which we acquired in January. With this increased case volume, we experienced an increase in our operating expenses, most notably in areas of salary wages and benefits, drugs and supplies. Our G&A expenses increased as expected with all of our acquisition activity. Operating expenses increased 9.2% year-over-year to $63 million from $57.7 million in Q2 of 2015. As a proportion of revenue, operating expenses were 82.1% compared to 78.3% in Q2 of 2015. This increase was not the result of a lack of focus on expense management, rather, on the decreased operating margin as a result of a higher proportion of the cases in the quarter resulting from care provided to Medicare and Medicaid patients, more so than those funded by private and commercial payers. Governmental payers increased approximately 16% overall from the second quarter of 2015. While we expect to experience variability in payer mix from time to time, we’re monitoring the case flow to continually assess how to deliver our care more efficiently. For the second quarter, consolidated income from operations was $13.8 million, which represented a 13.9% decline from $16 million in the second quarter of 2015. However, on a trailing 12 month basis, our consolidated income from operations is up slightly at $71.1 million compared to the $70.8 million for the 12 months ended June 30, 2015. I will now ask Michael to provide more detail and insight into our financial performance for the second quarter, and then I will close with our outlook for the remainder of 2016 and beyond. And then I will look forward to your questions. Michael?

Thanks, Britt and good morning everyone. Before I begin, please note that all of the dollar amounts expressed in today’s call are in US dollars unless otherwise stated. As Britt mentioned, in Q2 2016, we experienced revenue growth from $73.6 million a year ago to $76.7 million this year. We are pleased with the growth in business overall. On a consolidated basis, we experienced an increase of 4.7% for surgical cases with movement of some cases to the office or alternative settings, we did experience a decrease on the pain management side with pain management procedures being down 7.6%. This decrease however is embedded in our annual increase just shy of 5%. I will now provide results for each of our centers. Black Hills Surgical Hospital had a very solid 8% increase in revenue, driven by an increase in surgical cases. As was reported in our general trends, they also experienced the decline in Urgent Care and pain management revenue. Sioux Falls surgical hospital had revenue that was essentially flat year-over-year. The increase in surgical case volume and growth in ancillary revenue from its MRI and pain clinic was somewhat offset by the disproportionate case volume in the Medicare and government payer category, as previously commented upon. The previously disclosed expansion program at Sioux Falls is expected to be completed in approximately six months. This will enable us to care for a larger more complex surgeries going forward. Turning to Arkansas Surgical Hospital experienced strong growth with revenue increasing by 7.9% in the quarter. Here we saw improved case volume but also improved case mix. Oklahoma’s revenue declined by 2.9% in the quarter as it experienced a higher proportion of Medicare funded cases and fewer workers’ compensation and private payer cases. Our Surgery Center in Newport California had a solid quarter with a 5.1% increase in revenue from increased complexity in orthopedic cases. At this location, we actually had a better payer mix than we experienced globally. As we continue to integrate and improve on our IMD operations, we were pleased to see an incremental net revenue contribution of $700,000 from IMD. We are currently exploring ways to grow this business. During the second quarter, we recorded net income of $625,000 compared to $16.4 million for the same quarter last year. That change was primarily due to the non-cash charges for exchanges in value of the convertible debentures and the exchangeable interest liability. The change in recorded value of the debentures is driven by the change in their market price and changes in foreign exchange rate. In Q2 2016, convertible debentures decreased in value by $166,000 compared to $677,000 decrease in Q2, 2015. The larger non-cash impact came from the other derivative instrument that being the increase in value of the exchangeable interest liability. The exchangeable interest liability is driven by the change in our share price as well as the foreign currency exchange fluctuations. This liability increased by $15.6 million in the quarter compared to a decline of $4.9 million in Q2 2015. Turning to cash available for distribution decreased by 16.9% for the second quarter of 2016 compared to the same period last year. This decrease was due to lower cash flows from our respective centers as we’ve commented along and on a common share basis, our cash available for distributions was CAD$0.34 per common share compared to $0.386 in Q2 2015. This resulted in payout ratio for the second quarter of 2016 at 82.8% compared to 72.8% in Q2 2015. As of June 30, 2016, we had cash, cash equivalents and short-term investments of $69.4 million compared to $70.9 million on December 31, 2015. Despite some of these fluctuations discussed, we are confident that resources are in place to execute on our growth initiatives and we anticipate further positive contributions from our existing operations. Let me now call on Britt for his closing comments. Britt?

Thanks, Michael. As I stated last quarter, a major focus for me since joining the company is to build on Medical Facilities’ strong foundation of good business models locally and consistent dividend distribution. I’m challenging our teams to find ways to grow both through acquisition and organically. With the recent agreement to acquire Unity Hospital, our first hospital acquisition since 2012, we’ve taken an important early step in growing our portfolio. Unity will be an attractive addition. As another physician owned surgical hospital, located in a state that has limited opportunities for entry of new facilities, this gives us great potential to generate long-term value. There are other acquisition opportunities and we are committed to explore those especially those that offer the best bit with our existing portfolio. These opportunities can create alignment between physicians and management and provide a platform to continue to deliver efficiencies and high quality care. We are particularly focused on those opportunities that will be near-term accretive and enhance shareholder value. We’re comfortable with our cash and our credit availability to execute on these opportunities. As I mentioned last quarter, I’m excited to be given the opportunity to lead this organization. I’m confident that we are well positioned to take advantage of these opportunities as we did with Unity, and to improve our care in our operations. More specifically to our core existing operations, it’s important that we remain vigilant in driving down our operating cost as we return to increasing our operating margins who will generate additional income for future funding sources. This won’t merely happen. And to achieve this, we have initiatives in place to specifically address supply chain cost to further refine matching our labor cost to volume and continue to enhance our revenue collection. These initiatives were the focus of my interactions with our operating teams this past quarter and as we continue to work more closely together, I’ll be able to provide more specifics on the anticipated impact from these. With that, we would now like to open the line for questions. Operator?

Thank you. [Operator Instructions]. Your first question comes from the line of Matt Bottomley from Canaccord Genuity. Your line is now open.

Good morning.

Good morning.

Good morning.

Thanks for taking my call, I’m just on the line here for Neil Maruoka. So first off is congrats on Unity Hospital. I’m just wondering if you can provide a general timing of when you think the close might be and time to integration after that. If you’re not able to speak on a general may be purchase multiple as part of the deal, may be just little more details on how you expect it to contribute into the operations in a general magnitude?

Sure. Thank you, Matt. In terms of timing, while excited to announce this acquisition and to also know where we sit on the diligence process, I want to temper that with reality and not overpromise. We feel really comfortable. Our Letter of Intent has paralleled the definitive agreement process and all of our due diligence side-by-side which is not always the case; they often one lead and one follows. But in this particular circumstance, we had to get fortunate to be able to parallel those which is why you would see a fairly quick turn from a Letter of Intent to definitive agreement and in transition. Realistically, what we said today with the definitive agreement, the operating agreements and the discussions with the physicians and operators there, we’re feeling very good about an end of the month opportunity to transact and begin the transition. As you know, the transition will take by a period of time just in terms of fully interacting, but we’ve already -- it’s part of our due diligence we started that stage months ago. And so I think the integration will actually be fairly smooth and I know the folks there are extremely excited and positive about merging our management leadership with the fine quality they deliver. As far as the purchase pace, you’re right, I’m never going to sit here and give you specific multiple and I think that’s just prudent. But sufficed to say, our -- on a go forward basis is it’s very unlikely we’re going to see extremely low multiples or far side sale opportunities. And so, we’re not talking in that arena and likewise, they’re hiring multiples approximate 10 plus X on the deal. We’re not in either of those circumstances, I would say that we’re solidly in a middle of the road sweet spot on this and that lines up nicely with what we’re able to deliver almost out of the gate and instantly on a good integration and a good return.

Okay, thanks for that. I have one more quick question just may be on operating margins, just going through quickly the MD&A and from your comments this morning, it looks like some of the pressure might be coming from Sioux Falls and Oklahoma Spine. So, I’m just wondering how we can look at that going forward. Is the increased proportionate Medicare cases something that you think might be the new norm or is it more transient? And with Oklahoma Spine, I’m just wondering, you see volumes tracking and if we’re going to expect may be a slight bump up in margins going forward, may be if you can just give some commentary more directionally on that facility as well.

Sure. Let me give you the directional comment and then I’ll turn to Michael for any more specific if you’d like those. Let’s first take Sioux Falls. There is not a way I can tell you that I think that this trend is absolutely going to continue, absent any kind of market dynamics that would absolutely lend itself to that. We’re not really seeing a market dynamic shift that would put me in a position to say, yes I think this is the new norm or as you put it. More specifically, we have opportunities in this marketplace as we would pursue in every marketplace where we’re attracting new physicians incrementally, building upon relationships. These physicians won’t practice at high efficient hospitals, they want to practice in a recognized high quality facility and we’re making headway on attracting new physicians in the marketplace, and specifically in Sioux Falls. Often case when you have a new physician or physician group that is new to a facility, you’re going to see a mix of payer and a case type and it’s simply because they’re trying you as opposed to coming over and working rather exclusively with you. That’s going to cause a little choppiness in the short-term, but as we’re optimistic that these relationships are going to be firm and solidified going forward, I think you’ll see a leveling out of that. So my thoughts now are that this is a necessary part of the initial expansion of our provider base in that marketplace and I think you’re going to see improvement in that going forward. Particular to Oklahoma, we’ve had some unique circumstances there, we’ve discussed those I believe previously and they pertain to our service and care for patients in with specific case – there. And it’s much more specialized than some of our other assets and our portfolio and I think we’re experiencing some very specific payer and reimbursement changes there, unique to our other marketplace. So we’re getting some margin pressure there. I will tell you the operators there are focused as anybody along with our physician partners on developing actionable plans that would be consistent with what I’ve seen historically to match that. So Michael, if there’s any particular detail you want to provide to that, I would welcome that.

I would just say what we’ve probably said, I think you’ve seen it in action this quarter and also in the first quarter, you’ve seen the shifting that we do get and again, I come back to the three things and Britt’s alluded to couple of them, being case type mix, payer mix and the number of cases. Obviously, we were tracking pretty well on the number of cases but you are right, in terms of the margins, with the exception of Black Hills which I think was very encouraging for us but we saw case increases and also a margin increase. Sioux Falls saw some very particular issues, having new surgeons that haven’t been at our facility before coming onboard, they’re trying us out in that experimental period I think that explains part of what we’ve seen there. Again, there is always a concern that some of the things happening in the health insurance side like the cost of health insurance and the trend to companies either the primary payers or the majority of Americans with private healthcare in the employed sector, that that could in the shifting of cost to the patients could have some economic impact on the patients’ procurement of medical services. Again, to try and nail that down to a specific trend is really, really difficult but we’re obviously very, very focused on watching it and that leads to our cost containment efforts so that we can take those and stride as we move forward.

Matt, what I would tell you and final comment here would be on a global perspective, [indiscernible] encouraged is that we’re seeing volume and case growth in the vast majority of our facilities and in some cases, in the mid-single digits to the upper-single digits approximating double. I’ll take case growth and I’ll take volume in our facilities every day consistent than with the challenge of how to manage that more efficiently. I’ll take that opportunity every day over scrambling to deal with a declining volume scenario in our hospitals that we’re not experiencing and how do you manage the expenses therewith. So, not a perfect scenario but one I’ll take every day versus the alternative.

Okay. Appreciate all that commentary. Thanks a lot.

Thank you.

Your next question comes from the line of Joel Hurren with RBC Capital Markets. Your line is now open.

Good morning. Thanks for taking the question. Just to kind of follow up a little bit on Matt’s questions, so I know we chatted previously and you’ve kind of outlined how you want to increase flexibility at payer trends. And I’m wondering if you can comment on how do you plan to stay in the margins? Obviously you just discuss that in a little bit of detail, but specifically as it relates to your different lines items on the expense lines, what do you plan to do to mitigate the margin pressure going forward?

Yes I think you -- Joel thank you for the question but you almost have to take one step back in terms of what’s generating the revenue and what’s generating the business. And then that will decide several different ways I might answer your question and I won’t try to answer every one of them, but I’ll give you a global perspective. The first opportunity interestingly enough to address your margin pressure and cost initiatives is on what kind of business is coming through door. And we have ample opportunity in each of our markets to diversify the services that we’re provided, every facility is in the process of exploring, expanding and working with new physician groups in different provider types in order to enhance volume at the facility. Depending upon what kind of cases are done, gives us the opportunity we’ve already alluded so bringing in a particular specialty or enhancing and adding to an existing especially and have a naturally higher revenue and lower cost equation would be one way you fix the margins without doing anything for cost whatsoever. And not to be disingenuine[ph] but that should be where we focus and we are. Secondly, if we’re recruiting more business and physicians and services to our facilities that would naturally have a bit more of these payer mix dynamics towards the governmental payers and/or the case type being a little bit less on the revenue generation side. We have specific initiatives that were well in place before I got here and that I’m continuing to learn, understand and add a bit of my own perspective too, and very specifically those are in our supply management initiatives. Lot of our facilities are heavy in the orthopedics arena as you know and our implants and device cost there are a major driver, they have robust participation by our physicians, led by our physicians on how we continually reduce the opportunity that have too many suppliers for that supply particularly. On our labor cost, it’s just managing in real-time and then lastly back to the revenue we get better margin, we’re really just in the beginning stage of fully appreciating of IMD might be able to provide for us and the more we can collect on the business as we have gives us a greater opportunity. So I will always attack margins from both sides, always realizing the quickest way to impact is from the expense side.

Perfect. Thanks so much for the details. I appreciate it, Britt.

Yes.

[Operator Instructions]. Your next question comes from Russell Stanley with Mackie Research Capital. Your line is now open.

Good morning and thank you for taking my call.

Thank you.

You talked a little earlier about acquisition multiples, just wondering if the field’s becoming any more competitive and how are evaluation demands evolving there?

The environment especially that I’m accustomed to over the last many years, to me, actually it appears relatively stable as opposed to more demanding. I think you see fluctuations in multiples and not as a case of general industry trend, Russell but more as a specific and unique dynamic in each circumstance. And so, there are situations that were more on a higher multiple by the virtue of the fact of how many services are provided, what types of services are already provided and what the potential to reach out and attract more physicians to a potential new addition to our portfolio. And so that obviously has embedded in that an ability and comfortable be able to go higher on a multiple if we needed to. Conversely, there is a circumstance that we could go in and make some more heavy operating changes in initiatives and in those cases you would tend to see a lesser multiple. As I alluded in my previous remarks and bit in my earlier response to question, I think for the most part we’re going to be really comfortable and that middle of the road we see good opportunity for growth. We won’t feel compelled in any way to pay at the top-end or overpay and I think what we can begin to build upon in terms of way of benchmarking a network and with our other facilities, will be attractive to potential sellers. At the end of the day, economics matter and folks are interested in getting the best value for their assets, but I’ve experienced often times as the highest payer and bidder, the one that wins the deal, it’s the one who offers the greatest approach and value. So, I think there’s always competition, clearly, we want to be ahead of that in terms of sourcing opportunities, but when we’re in the midst of it, we’d be disciplined about whether we pay appropriately for the asset, allow ourselves to move up a bit if we see the rationale and if we don’t, we’ll have the discipline to walk away.

Great. Thank you for that and just as a follow up on that topic. Once you’ve reached a definitive agreement for Unity, how much integration effort will be required and I guess specifically does that put you on the sidelines from an acquisition perspective for sometime or can you continue to look at other opportunities?

Sure. So two part question be relatively sink in the first one, our – going forward will be to concurrently in any acquisition we’re evaluating from Letter of Intent to definitive agreement to integration. During our due diligence processes, we’re always going to employ the beginnings of integration simultaneously from what we would do, identify the opportunities and begin discussing those because we think that creates great transparency with our new partners and also gives our team time to prepare and actually -- we can’t affect changes as you well know before we actually own something, we can begin to get very prepared for that. There’s no difference in what I described you and what we’ve been able to do at Unity, so that puts us in a great out of the gate position with them specifically. So I think the transition period there is going to be relatively short and quite candidly our new partners there are asking for some operational management both discipline and new opportunities and so, I think that CS[ph] is being a great fit for that. That’s going to shorten the transition. Flipping to your second part of your equation, fairly early out of the gate we’ve been able to deliver on an acquisition proposition, presumably delivered but have all the optimism. And the direct answer is no, we have sufficient available funds, we have a very nice arrangement and have had for years in terms of our accessibility to revolver and additional funding. There’s some other sources in front of us should we choose to take advantage of that additionally as well as just other – cash to pursue acquisitions and we’ll always keep those on the table as options. And I believe we’re in a position to act on acquisition for the balance of this year if they -- go back to my previous comments, are they accretive? Do they complement our services? Are we able and confident that we can add meaningful impact to the operations afterwards? And are we buying in a spot that’s in a moderate zone as opposed to some kind of premium which I wouldn’t want to do that out of the gate, I want to add more available dry powder.

Okay. That’s very helpful color. Just one final question and I’ll get back in the queue, the press release it mentioned a number of initiatives you’ve undertaken. You talked about supply chain management, I just wanted to ask about revenue collection and what you might be doing differently there and how much of an improvement you think that might drive?

Yeah, one very same comment and then I’ll turn to Michael. As I mentioned earlier, we’re in the early stages of maturing our processes with IMD and we see opportunity in the short-term in terms of book of businesses that we generate and our ability to collect there from a partnership as well as potentially in the future some alternative sources of revenue. I think that’s our opportunity in our engine. It’s organized as plenty of folks in place – have procedures there and I think as I’m queuing up priorities and building my team, that’s one that I’m pleased to have in place already. So Michael would you have any other color?

The only other thing I’d add to that Russell is the comment I made earlier about changes in the economic surrounding health insurance, provision of healthcare and the shift that you are seeing – advent of high deductible plan, they’re becoming very prominent in the private sector that gives us a – typically covered by big employers. Of course one of the challenges that comes forward and we have certainly identified it and is good as to see some opportunities to really focus on it as you really now have to be really careful all providers because with that larger share obviously bad debts with respect to the insurance payments is not an issue given that insurance is a very regulated industry. But once you got to start getting money from the patient, that does become much more important and I think that’s clearly one that we are focused on and looking at the systems that are now coming into prominence to manage that upfront prior to rather than collecting after the individual as we - the services. So, that’s an initiative to really watching the industry. And I just Russell, just go back to one thing where you were asking about our -- powder I guess for future expansions, do just note that our lines of credit are CAD$100 million so around 80 cash balances in the 50-60 range. So we have easy access to 150 odd million and the purchase price on unity including the real-estate on an unlevered basis is 54 million, so barely a third of what we have in the chest.

Excellent. Thank you for the color.

You’re welcome.

Your next question comes from the line of Doug Loe with Echelon Wealth Partners. Your line is now open.

Yeah, thanks very much. And good morning gentlemen, thanks for all the commentary at this point.

Good morning.

Britt, early in your commentary about the Unity transaction, you mentioned the geographic diversity as being one of the core virtues of that transaction and just wondering you might be a little – flush out a little what do you mean about that beyond the obvious? It seemed to me that clustering your centers might be a more prudent strategy if you wanted to streamline costs but get compression from suppliers and so forth is a way to improve margins on the cost side. I assume the geographic distribution is a euphemism for diversifying your peer sources and reimbursement but don’t want to presume the answer to my own question by saying that out loud. So just wondered if you could just flush out what the core virtues of diversifying the geographic characterization of portfolio might actually be and what are the stage you might be looking at as a growth engine -- and I’ll leave it there. Thanks.

Sure, sure. Good morning, Doug and you’re very astute in answering my questions as well too, so thinking but I’ll deliver it to everyone give you my thoughts on that. Yes, I think it’s a balance at all times to look at the opportunities for the lack of better term doubling down within an existing market and adding to that in order to affect all of those things that you’ve already alluded payer relationships, the ability to create some more synergies among staff and process and protocol and augmenting complementary services and that is an excellent approach. And one thing I would tell you merits consideration and one that I would tell you that we have virtually opportunity in every one of our markets to do that and are in varying stages of assessing if that makes sense. And so, conceptually makes sense, operationally how we make that happen, we need to make sure that it makes sense and look at that. So, to that point, you wouldn’t necessarily run away from what you have, we’re running to it. To the alternative, you’re exactly right. Geographically, and I’m using geography as the proxy here but geographically diversifying what I’m specifically talking about is mitigating our risk on any one particular state’s payer program or any one particular dynamic in a either sub-geography or state geography. And as you well know with the adoption of ACA and the exchanges in market places and the expansion of Medicaid in certain states, it makes it more attractive in certain areas, makes it more challenging in certain areas and the beauty of MFC is as we begin on our growth initiatives, we are not having to retrofit ourselves to places that have challenges in those particular areas along the ACA lines. And so as we go eyes wide open into new opportunities, we’re going to be prudent to look at those and have the better of payer mix dynamics, the better areas that have funding expanded in a way of Medicaid or in the way of exchanges. And as in any case, we don’t want to be so heavily concentrated in one particular state that a regulatory pin – on a given day is materially impacted where we are. So it’s a risk spread play here and it doesn’t mean we’re running away, in fact, I want to reemphasize we’re running to in our existing markets. But as we look to new opportunities, we’re going to be looking at those that can give us a little bit more stable diversification from a risk standpoint and this met that entirely. And then on top of it , that I alluded earlier just the dynamics inside the working market once you got through that threshold are tremendous.

That’s great color. Thanks, Britt.

Thank you, Doug.

And there are no further audio questions at this time. I’d now like to turn the call back over to Britt Reynolds.

Yes, everyone we appreciate being with you on this second quarter call. My second opportunity to be in front of you and the first full opportunity to give you some more specific color on our initiatives and on our actions and to be able to interact with may be the questions today. And many of you that I have interacted with on our interactions along the way over the last several months in our meetings and opportunities to get introduced not only to MFC but the environment as a whole and I’m very appreciative for that. I’d like to thank each and everyone on the call today for participating. I’d especially like to thank you for your continued interest in MFC. It’s an exciting time for us and I look forward to not only meeting you further down the road but also on reporting some concrete progress next quarter on demonstrating our ability to delivering our initiatives. So with that, I thank you for your participation.

This concludes today’s conference call. You may now disconnect.