Patty Egan - CFO Doug Jamison - CEO Daniel Wolfe - COO

Ed Woo - Ascendiant Capital

Good day, ladies and gentlemen, and welcome to the Harris & Harris Group Fourth Quarter Shareholder Update. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to hand the conference over to Patty Egan, Chief Financial Officer. Please go ahead.

Thank you. I'll begin by reading the Safe Harbor statement. This presentation may contain statements of a forward-looking nature relating to future events. Statements contained in this presentation that are forward-looking statements are intended to be made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the company's current beliefs, and a number of important factors could cause actual results to differ materially from those expressed herein. Please see the company's annual report on Form 10-K as well as subsequent filings filed with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the company's business, including, but not limited to, the risks and uncertainties associated with venture capital investing and other significant factors that could affect the company's actual results. Except as otherwise required by federal securities laws, Harris & Harris Group, Inc. undertakes no obligation to update or revise these forward-looking statements to reflect news, events or uncertainties. I'll now turn the call over to our Doug Jamison, our CEO.

Thank you. I'll begin by reading the Safe Harbor statement. This presentation may contain statements of a forward-looking nature relating to future events. Statements contained in this presentation that are forward-looking statements are intended to be made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the company's current beliefs, and a number of important factors could cause actual results to differ materially from those expressed herein. Please see the company's annual report on Form 10-K as well as subsequent filings filed with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the company's business, including, but not limited to, the risks and uncertainties associated with venture capital investing and other significant factors that could affect the company's actual results. Except as otherwise required by federal securities laws, Harris & Harris Group, Inc. undertakes no obligation to update or revise these forward-looking statements to reflect news, events or uncertainties. I'll now turn the call over to our Doug Jamison, our CEO.

Thank you, Patty. Good morning, this is Doug Jamison. Welcome to our call reporting on year-end 2013. Daniel Wolfe and I will begin by walking you through some slides on events from 2013 and the start of 2014. Patty Egan, our Chief Financial Officer will then provide a brief summary of December 31, 2013 financials. Patty will be referencing our recently filed annual report on form 10-K. We will then answer any questions and we expect the call to last approximately 45 minutes. Harris & Harris Group builds transformative companies from disruptive science. On February 24, there was an article written titled, “Why Facebook is Killing Silicon Valley.” The author, a teacher of entrepreneurship at Stanford noted “The irony is that as good as some of these nascent startups are in material science, medical devices, and life sciences; more and more frequently VCs whose firms would have looked at and invested in these sectors, are now only interested in whether it runs on a smart phone or tablet.” He goes on to lament “the end of the era of venture capital-backed big ideas in science and technology. We can hope that some VC’s remain contrarian and non-myopic and avoid the herd. But if not, the long-term consequences for our national interests will be less than optimum.” He finishes by rewarding a quote from JFK from 1962, related to landing a man on the moon. “We choose to invest in ideas, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win.” We welcome this type of thinking. Realize, invest, partner, return; remain laser-focused on this execution plan. We believe 2014 will be an important year in our execution on this plan. What do we accomplish in 2013 and early 2014. In 2013, investment from our portfolio returned over $30 million in cash to Harris & Harris Group. In July 2013, our portfolio company Xradia was purchased by Carl Zeiss. We will receive $15.2 million in proceeds from the sale including amounts held in escrow. Our investment cost in Xradia was $4 million. On January 23, we received the first escrow payment of $1.2 million bringing the cash we received to date in Xradia to $14 million. In 2013, we also sold certain aspects of SynGlyco, previously Ancora Pharmaceuticals to Corden Pharma. We retained the vaccine business. In January 2014, Kovio was acquired by Thin Film Electronics, but we received no proceeds from this sale. On February 14, 2014, we announced the signing of definitive documents for the sale of Molecular Imprints' Semiconductor Business to Canon. We expect to receive $7 million in proceeds from the sale including amounts to be held in escrow. We could receive an additional $1.7 million upon the achievement of certain milestone payments. Our investing cost in Molecular Imprints was $4.6 million. Interestingly, because of a strategic investment we are able to make in April 2011, primarily owing to our evergreen status, we will be the only financial investor to realize the return on our investment at the initial closing. Additionally, we will hold ownership in a new financed company established to utilize Molecular Imprints technology for applications in the biomedical and consumer electronics fields without making additional new investments. 2013 revenues and especially commercial revenues of our portfolio companies are continuing to increase each year. We aggregate the revenues of our equity focused portfolio companies on an annual basis and report these aggregated amounts for the prior three calendar years in our management’s discussion and analysis section of our annual report on form 10-K on pages 49 and 50. These revenues include contributions solely from those equity focused portfolio companies that has yet to complete liquidity events such as initial public offerings, up listings, or merger and acquisition transactions; and are not in the process of being shut down as of December 31, 2013. We had 20 of our 24 companies in our equity focused venture capital portfolio, as of December 31, 2012 and December 31, 2013 that generated revenues. For these 20 companies, the aggregate revenue increased 44% from $186.6 million in 2012 to $268.9 million in 2013. In our Letter to Shareholders dated October 8, 2013, we noted our new investment focus on BIOLOGY+, which we define as investments in interdisciplinary life science companies where biology innovation is intersecting with innovations in areas such as electronics, physics, materials science, chemistry, information technology, engineering and mathematics. We focus on this intersection because we believe interdisciplinary innovation will be required in order to address many of the life science challenges of the future. To date, all of our BIOLOGY+ companies have also been commercializing or integrating products enabled by nanotechnology. At this time, we are expanding our investment focus within the area of BIOLOGY+ and may make investments that are not enabled at the nanoscale or microscale. We will not make BIOLOGY+ investments that are not also nanotechnology or microsystems investments for 60 days from the receipt of this Annual Report. Our focus on BIOLOGY+ is not a fundamental policy, and we will not be required to give notice to shareholders prior to making a change from this focus In 2013, we made two new investments Echopixel and ProMuc. Echopixel is a data visualization company, striving to provide better analytic tools for data analysis and life-science and healthcare applications by amplifying human expertise with machine learning. This feed-stage California-based company has been developing a set of algorithms and software tools to visualize and analyze data generated by MRI and computational tomography scanners, x-ray microscopes and other analytical tools. The company currently has working prototypes of visualization station. It is in the process of developing data analysis protocols with several leading hospitals including Stanford, the Cleveland Clinic, University of California San Francisco and Charles River Labs. The approach is broadly applicable to high hospital diagnostic surgery production work flow as well as training and education. During the fourth quarter of 2013, Harris and Harris Group established and invested in a new portfolio company, ProMuc Inc, to focus on the research and development of synthetic mucins. Mucins are special class of glycoprotein which provides many critical functions during gestation and in the maintenance of general health such as providing lubrication and acting as a protecting barrier to external harmful microorganisms. We believe that the development of synthetic mucins could potentially permit us to fabricate better biomimetic materials for a variety of commercial applications in the health and nutrition industry including food additives, antimicrobial coatings and anticancer vaccines. We partnered with Katharina Ribbeck at MIT and with Corden Pharma to begin building this company, which currently is 100% owned by Harris and Harris Group. We are aware that our net asset value per share has not yet begun to respond to the progress in our portfolio. We believe it will over the coming quarters and years. Our private portfolio is valued at 93.9 million as of December 31, 2013, a 19% discount from our cost basis in this portfolio as of that same date. From September 30, 2013 to December 31, 2013, the value of our equity-focused central capital portfolio include our rights to potential future milestone from the sales of BioVex Group and Nextreme Thermal Solution decreased by $13.7 million from a $106 million to $92.3 million. This decrease was primarily owing to a net decrease in the value owing to a net increase in discounts for non-performance risk of approximately 13.3 million. We define non-performance risk as the risk that the price per share or the implied valuation of a portfolio company does not appropriately represent the risk that a portfolio company that requires or seeks to raise additional capital will be not able to raise capital will be need to shut down or not return our invested capital or that it will be able to raise additional capital but at a valuation significantly lower than the implied post-money valuation of the most recent round of financing. In the future, as these companies receive terms for additional financings or if they are unable to receive additional financing and, therefore, proceed with sales or shutdowns of the business, we expect the contribution of the discount for non-performance risk to vary in importance in determining the fair values of our securities of these companies. Changes in discounts for non-performance risk could positively or negatively affect the value of our portfolio companies in future quarters. A further discussion of the changes in value of our equity-focused venture capital portfolio can be found in the Management’s Discussion and Analysis section of our Annual Report on Form 10-K on pages 66 and 67. We also note that while the valuations of our privately held, venture capital-backed companies may decrease and sometimes substantially, such decreases may facilitate an increase in our overall ownership of the company in conjunction with a follow-on investment in such company. In these cases, the ultimate return on our overall invested capital could be greater than it would have been without such interim decrease in valuation. For example, Ultora received a $1.1 million financing during the fourth quarter of 2013 at a discount to its previous round of financing. However, for Harris & Harris Group, for the same investment amount that we had previously earmarked for this financing, we increased our ownership from 10% to 15% of the voting ownership of Ultora to greater than 20% of the voting ownership. Our cost basis in Ultora was $1.1 million at December 31, 2013. Our value was approximately $240,000 as of the same date. We believe this will be beneficial as Ultora continues to progress with its unique ultracapacitor technology. With regards to ownership of our portfolio companies, we have historically categorized our ownership into our financial statements in this following three ways; by less than 5%, between 5% and 25%, and greater than 25% on a voting basis. In response to a number of enquiries from shareholders and prospective shareholders, we included new table on page 50 of the management’s discussion and analysis section of our annual report on Form 10-K that provides our current voting ownership of our portfolio companies in tighter ranges than we have historically disclosed. We are beginning to be recognized for our leadership role in early stage innovation. In February of 2014, we’re recognized by Forbes as one of the few venture capital investors investing in meaningful technology companies. Additionally, we received recognition by the data from Grand IQ as a number one investor in innovation. As an investor in transformative companies enabled by disruptive science Harris & Harris Group is proud to be on the cutting edge of science and business. More importantly, a national dialog is finally emerging that is focusing on the need for deeper scientific innovation if America is to retain its business leadership position. Over the coming months, we will issue and publicize a series of blogs highlighting what we term as H&H on the cutting edge. Each of these papers will focus on maturing company in our portfolio while also noting that Harris & Harris Group offers a unique way of participating in these companies’ growth while they are still private. We will briefly highlight two examples D-Wave and Metabolon below. We suggest our shareholders follow both companies closely over the next 12 months. Quantum computers unlike conventional digital machines used since the onset of the computer edge have the potential to crunch through the data and overcome levels of complexity insurmountable for existing computers. Results that currently require existing digital computations longer than the age of the universe to sort out digitally might be found in minutes or even seconds using future quantum computers. In the last eight years, D-Wave has progressed from theoretical models and unproven approaches to having Lockheed Martin, Google and U.S. government as customers for its groundbreaking 512 cubic adiabatic quantum computing machines. The computational power of D-Wave’s future generation processors is forecast by yet to surpass that of all computers combined on the face of the earth within one decade. As one would expect for this new paradigm in computing there is much scientific debate surrounding D-Wave’s approach. The cover story in Time Magazine on February 17, 2014 capture both sides of debate well. As with many investments there is little opportunity if there is not diversity of opinion. This is especially true when you are commercializing the world’s first quantum computer. Many more studies are ongoing and we will wait their conclusions. But after reading the story in time and seeing the progress D-Wave is making, it is difficult not to believe the company has real opportunity to transform the nature of computing. We believe Metabolon is another company that demonstrates Harris & Harris Group is on the cutting edge of science and business. Metabolon completed a 15 million mezzanine round of financing in December 2013 and an increase in value from the previous series de-financing. We believe this financing demonstrates the leadership position Metabolon has staked in metabolomics. Metabolomics is a rapidly expanding field of biochemical research and discovery focused on the measurement of small molecules involved in metabolism. It enables the mapping of these small molecule’s pathways in order to identify diseases, discover biomarkers and better understand complex biological processes. Metabolon has performed more than 3,000 studies with more than 550 companies including all the top 10 global pharmaceutical companies. It has established its leadership in metabolomics over the past 12 years by publishing over 300 peer-reviewed articles by obtaining over 60 issued patents and by generating over $96 million in cumulative revenue. In 2013, Metabolon launched three commercial diagnostic tests targeting both obesity related diseases such as type 2 diabetes and cancer. Metabolon’s first obesity related diagnostic tests Quantose IR detects insulin resistance in the earliest stages of type 2 diabetes. Metabolon’s cancer diagnostic test target urological cancers such as prostate cancer for which it launched non-invasive urine based diagnostic test in September 2013. Its first test Prostarix helps determine the likelihood of prostate cancer in patients who are considering whether to have a biopsy. Its second test Prostarix Plus helps validate the often incorrect results in men who’ve had a negative prostate biopsy. Shareholders will note that two recent announcements further support Metabolon’s recent progress. On February 25, 2014, Metabolon announced partnerships with the Carlos Slim Institute, Patia and Clinica Ruiz for Quantose prediabetes testing in Mexico. Under the terms of these agreements, Patia and its affiliates will use Metabolon's Quantose IR technology in unprecedented large scale studies in Mexico to test for prediabetes in up to three million overweight or obese adults and secondary school students who are obese and/or have a family history of diabetes. The goal of these studies is to detect prediabetes early and prescribe treatment to prevent progression to type 2 diabetes. Testing will be performed over four years, beginning with pilot studies in 2014. On March 5, Metabolon entered in new collaboration agreement with Human Longevity Inc, Craig Venter’s new company. Metabolon will provide biochemical profiling services to assist Human Longevity and its mission to tackle diseases of aging by building the world’s largest and most complete human genotype, microbiome and phenotype database. In the initial terms of the agreement Metabolon will perform small molecule analysis of 10,000 subjects and collaborate with Human Longevity to map changes in the small molecules to end points of disease and gene mutations. Craig Venter is on the Scientific Advisory Board of Metabolon which is how he was aware of Metabolon’s leadership position. Metabolon retains the rights to commercialize small molecule diagnostic test discovered in this collaboration. To conclude, we’re excited to share some of these companies with the investment public at our April 30, 2014, Meet the Portfolio Day. This event will be hosted at the Harvard Club in New York City from 8 a.m. until 1 p.m.; presenting companies include D-Wave Systems, Metabolon, Champions Oncology, HzO, Adesto, Echopixel and AgBiome. Revenue for these seven companies increased over 100% in 2013. It will give our shareholders and the institutional investor universe the opportunity to better understand the future of these companies and to begin to see what is impact that may have on Harris and Harris Group. We will now turn it over to Patty again our CFO.

Thank you, Patty. Good morning, this is Doug Jamison. Welcome to our call reporting on year-end 2013. Daniel Wolfe and I will begin by walking you through some slides on events from 2013 and the start of 2014. Patty Egan, our Chief Financial Officer will then provide a brief summary of December 31, 2013 financials. Patty will be referencing our recently filed annual report on form 10-K. We will then answer any questions and we expect the call to last approximately 45 minutes. Harris & Harris Group builds transformative companies from disruptive science. On February 24, there was an article written titled, “Why Facebook is Killing Silicon Valley.” The author, a teacher of entrepreneurship at Stanford noted “The irony is that as good as some of these nascent startups are in material science, medical devices, and life sciences; more and more frequently VCs whose firms would have looked at and invested in these sectors, are now only interested in whether it runs on a smart phone or tablet.” He goes on to lament “the end of the era of venture capital-backed big ideas in science and technology. We can hope that some VC’s remain contrarian and non-myopic and avoid the herd. But if not, the long-term consequences for our national interests will be less than optimum.” He finishes by rewarding a quote from JFK from 1962, related to landing a man on the moon. “We choose to invest in ideas, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win.” We welcome this type of thinking. Realize, invest, partner, return; remain laser-focused on this execution plan. We believe 2014 will be an important year in our execution on this plan. What do we accomplish in 2013 and early 2014. In 2013, investment from our portfolio returned over $30 million in cash to Harris & Harris Group. In July 2013, our portfolio company Xradia was purchased by Carl Zeiss. We will receive $15.2 million in proceeds from the sale including amounts held in escrow. Our investment cost in Xradia was $4 million. On January 23, we received the first escrow payment of $1.2 million bringing the cash we received to date in Xradia to $14 million. In 2013, we also sold certain aspects of SynGlyco, previously Ancora Pharmaceuticals to Corden Pharma. We retained the vaccine business. In January 2014, Kovio was acquired by Thin Film Electronics, but we received no proceeds from this sale. On February 14, 2014, we announced the signing of definitive documents for the sale of Molecular Imprints' Semiconductor Business to Canon. We expect to receive $7 million in proceeds from the sale including amounts to be held in escrow. We could receive an additional $1.7 million upon the achievement of certain milestone payments. Our investing cost in Molecular Imprints was $4.6 million. Interestingly, because of a strategic investment we are able to make in April 2011, primarily owing to our evergreen status, we will be the only financial investor to realize the return on our investment at the initial closing. Additionally, we will hold ownership in a new financed company established to utilize Molecular Imprints technology for applications in the biomedical and consumer electronics fields without making additional new investments. 2013 revenues and especially commercial revenues of our portfolio companies are continuing to increase each year. We aggregate the revenues of our equity focused portfolio companies on an annual basis and report these aggregated amounts for the prior three calendar years in our management’s discussion and analysis section of our annual report on form 10-K on pages 49 and 50. These revenues include contributions solely from those equity focused portfolio companies that has yet to complete liquidity events such as initial public offerings, up listings, or merger and acquisition transactions; and are not in the process of being shut down as of December 31, 2013. We had 20 of our 24 companies in our equity focused venture capital portfolio, as of December 31, 2012 and December 31, 2013 that generated revenues. For these 20 companies, the aggregate revenue increased 44% from $186.6 million in 2012 to $268.9 million in 2013. In our Letter to Shareholders dated October 8, 2013, we noted our new investment focus on BIOLOGY+, which we define as investments in interdisciplinary life science companies where biology innovation is intersecting with innovations in areas such as electronics, physics, materials science, chemistry, information technology, engineering and mathematics. We focus on this intersection because we believe interdisciplinary innovation will be required in order to address many of the life science challenges of the future. To date, all of our BIOLOGY+ companies have also been commercializing or integrating products enabled by nanotechnology. At this time, we are expanding our investment focus within the area of BIOLOGY+ and may make investments that are not enabled at the nanoscale or microscale. We will not make BIOLOGY+ investments that are not also nanotechnology or microsystems investments for 60 days from the receipt of this Annual Report. Our focus on BIOLOGY+ is not a fundamental policy, and we will not be required to give notice to shareholders prior to making a change from this focus In 2013, we made two new investments Echopixel and ProMuc. Echopixel is a data visualization company, striving to provide better analytic tools for data analysis and life-science and healthcare applications by amplifying human expertise with machine learning. This feed-stage California-based company has been developing a set of algorithms and software tools to visualize and analyze data generated by MRI and computational tomography scanners, x-ray microscopes and other analytical tools. The company currently has working prototypes of visualization station. It is in the process of developing data analysis protocols with several leading hospitals including Stanford, the Cleveland Clinic, University of California San Francisco and Charles River Labs. The approach is broadly applicable to high hospital diagnostic surgery production work flow as well as training and education. During the fourth quarter of 2013, Harris and Harris Group established and invested in a new portfolio company, ProMuc Inc, to focus on the research and development of synthetic mucins. Mucins are special class of glycoprotein which provides many critical functions during gestation and in the maintenance of general health such as providing lubrication and acting as a protecting barrier to external harmful microorganisms. We believe that the development of synthetic mucins could potentially permit us to fabricate better biomimetic materials for a variety of commercial applications in the health and nutrition industry including food additives, antimicrobial coatings and anticancer vaccines. We partnered with Katharina Ribbeck at MIT and with Corden Pharma to begin building this company, which currently is 100% owned by Harris and Harris Group. We are aware that our net asset value per share has not yet begun to respond to the progress in our portfolio. We believe it will over the coming quarters and years. Our private portfolio is valued at 93.9 million as of December 31, 2013, a 19% discount from our cost basis in this portfolio as of that same date. From September 30, 2013 to December 31, 2013, the value of our equity-focused central capital portfolio include our rights to potential future milestone from the sales of BioVex Group and Nextreme Thermal Solution decreased by $13.7 million from a $106 million to $92.3 million. This decrease was primarily owing to a net decrease in the value owing to a net increase in discounts for non-performance risk of approximately 13.3 million. We define non-performance risk as the risk that the price per share or the implied valuation of a portfolio company does not appropriately represent the risk that a portfolio company that requires or seeks to raise additional capital will be not able to raise capital will be need to shut down or not return our invested capital or that it will be able to raise additional capital but at a valuation significantly lower than the implied post-money valuation of the most recent round of financing. In the future, as these companies receive terms for additional financings or if they are unable to receive additional financing and, therefore, proceed with sales or shutdowns of the business, we expect the contribution of the discount for non-performance risk to vary in importance in determining the fair values of our securities of these companies. Changes in discounts for non-performance risk could positively or negatively affect the value of our portfolio companies in future quarters. A further discussion of the changes in value of our equity-focused venture capital portfolio can be found in the Management’s Discussion and Analysis section of our Annual Report on Form 10-K on pages 66 and 67. We also note that while the valuations of our privately held, venture capital-backed companies may decrease and sometimes substantially, such decreases may facilitate an increase in our overall ownership of the company in conjunction with a follow-on investment in such company. In these cases, the ultimate return on our overall invested capital could be greater than it would have been without such interim decrease in valuation. For example, Ultora received a $1.1 million financing during the fourth quarter of 2013 at a discount to its previous round of financing. However, for Harris & Harris Group, for the same investment amount that we had previously earmarked for this financing, we increased our ownership from 10% to 15% of the voting ownership of Ultora to greater than 20% of the voting ownership. Our cost basis in Ultora was $1.1 million at December 31, 2013. Our value was approximately $240,000 as of the same date. We believe this will be beneficial as Ultora continues to progress with its unique ultracapacitor technology. With regards to ownership of our portfolio companies, we have historically categorized our ownership into our financial statements in this following three ways; by less than 5%, between 5% and 25%, and greater than 25% on a voting basis. In response to a number of enquiries from shareholders and prospective shareholders, we included new table on page 50 of the management’s discussion and analysis section of our annual report on Form 10-K that provides our current voting ownership of our portfolio companies in tighter ranges than we have historically disclosed. We are beginning to be recognized for our leadership role in early stage innovation. In February of 2014, we’re recognized by Forbes as one of the few venture capital investors investing in meaningful technology companies. Additionally, we received recognition by the data from Grand IQ as a number one investor in innovation. As an investor in transformative companies enabled by disruptive science Harris & Harris Group is proud to be on the cutting edge of science and business. More importantly, a national dialog is finally emerging that is focusing on the need for deeper scientific innovation if America is to retain its business leadership position. Over the coming months, we will issue and publicize a series of blogs highlighting what we term as H&H on the cutting edge. Each of these papers will focus on maturing company in our portfolio while also noting that Harris & Harris Group offers a unique way of participating in these companies’ growth while they are still private. We will briefly highlight two examples D-Wave and Metabolon below. We suggest our shareholders follow both companies closely over the next 12 months. Quantum computers unlike conventional digital machines used since the onset of the computer edge have the potential to crunch through the data and overcome levels of complexity insurmountable for existing computers. Results that currently require existing digital computations longer than the age of the universe to sort out digitally might be found in minutes or even seconds using future quantum computers. In the last eight years, D-Wave has progressed from theoretical models and unproven approaches to having Lockheed Martin, Google and U.S. government as customers for its groundbreaking 512 cubic adiabatic quantum computing machines. The computational power of D-Wave’s future generation processors is forecast by yet to surpass that of all computers combined on the face of the earth within one decade. As one would expect for this new paradigm in computing there is much scientific debate surrounding D-Wave’s approach. The cover story in Time Magazine on February 17, 2014 capture both sides of debate well. As with many investments there is little opportunity if there is not diversity of opinion. This is especially true when you are commercializing the world’s first quantum computer. Many more studies are ongoing and we will wait their conclusions. But after reading the story in time and seeing the progress D-Wave is making, it is difficult not to believe the company has real opportunity to transform the nature of computing. We believe Metabolon is another company that demonstrates Harris & Harris Group is on the cutting edge of science and business. Metabolon completed a 15 million mezzanine round of financing in December 2013 and an increase in value from the previous series de-financing. We believe this financing demonstrates the leadership position Metabolon has staked in metabolomics. Metabolomics is a rapidly expanding field of biochemical research and discovery focused on the measurement of small molecules involved in metabolism. It enables the mapping of these small molecule’s pathways in order to identify diseases, discover biomarkers and better understand complex biological processes. Metabolon has performed more than 3,000 studies with more than 550 companies including all the top 10 global pharmaceutical companies. It has established its leadership in metabolomics over the past 12 years by publishing over 300 peer-reviewed articles by obtaining over 60 issued patents and by generating over $96 million in cumulative revenue. In 2013, Metabolon launched three commercial diagnostic tests targeting both obesity related diseases such as type 2 diabetes and cancer. Metabolon’s first obesity related diagnostic tests Quantose IR detects insulin resistance in the earliest stages of type 2 diabetes. Metabolon’s cancer diagnostic test target urological cancers such as prostate cancer for which it launched non-invasive urine based diagnostic test in September 2013. Its first test Prostarix helps determine the likelihood of prostate cancer in patients who are considering whether to have a biopsy. Its second test Prostarix Plus helps validate the often incorrect results in men who’ve had a negative prostate biopsy. Shareholders will note that two recent announcements further support Metabolon’s recent progress. On February 25, 2014, Metabolon announced partnerships with the Carlos Slim Institute, Patia and Clinica Ruiz for Quantose prediabetes testing in Mexico. Under the terms of these agreements, Patia and its affiliates will use Metabolon's Quantose IR technology in unprecedented large scale studies in Mexico to test for prediabetes in up to three million overweight or obese adults and secondary school students who are obese and/or have a family history of diabetes. The goal of these studies is to detect prediabetes early and prescribe treatment to prevent progression to type 2 diabetes. Testing will be performed over four years, beginning with pilot studies in 2014. On March 5, Metabolon entered in new collaboration agreement with Human Longevity Inc, Craig Venter’s new company. Metabolon will provide biochemical profiling services to assist Human Longevity and its mission to tackle diseases of aging by building the world’s largest and most complete human genotype, microbiome and phenotype database. In the initial terms of the agreement Metabolon will perform small molecule analysis of 10,000 subjects and collaborate with Human Longevity to map changes in the small molecules to end points of disease and gene mutations. Craig Venter is on the Scientific Advisory Board of Metabolon which is how he was aware of Metabolon’s leadership position. Metabolon retains the rights to commercialize small molecule diagnostic test discovered in this collaboration. To conclude, we’re excited to share some of these companies with the investment public at our April 30, 2014, Meet the Portfolio Day. This event will be hosted at the Harvard Club in New York City from 8 a.m. until 1 p.m.; presenting companies include D-Wave Systems, Metabolon, Champions Oncology, HzO, Adesto, Echopixel and AgBiome. Revenue for these seven companies increased over 100% in 2013. It will give our shareholders and the institutional investor universe the opportunity to better understand the future of these companies and to begin to see what is impact that may have on Harris and Harris Group. We will now turn it over to Patty again our CFO.

At December 31, 2013, we had total assets of approximately $125 million on our balance sheet. Included in our total assets is our venture capital portfolio which was valued at approximately $94 million versus its cost basis of $116 million at December 31, 2013. Therefore at yearend, our venture capital portfolio was in depreciated state of $22 million. We also held $27.5 million in cash in U.S. Treasuries, and had no debt outstanding as of December 31, 2013. Our primary and secondary liquidity was $33.6 million. These announced do include an additional $1.2 million in escrow fund related to the sale of Xradia which were released in January 2014. Our net assets at December 31, 2013, were approximately $122.7 million, and our net asset value per share was $3.93. This is a decrease from our net asset value per share of $4.13 at December 31, 2012. Turning to our income statement. For the year ended December 31, 2013, we had investment income of approximately $471,000, compared to approximately $722,000 in investment income in 2012. Our total expenses were approximately $8.5 million for the year compared with approximately $9.5 million during 2012. These total expense figures include both cash and noncash-based operating expenses, such as stock-based compensation. Stock-based compensation expense has no impact to NAV. Our total cash base and accrued operating expenses for the year ended December 31, 2013, were approximately $7.3 million as compared with $6.3 million during the comparable period in 2012. This yielded a net operating loss of $8 million for 2013, which is less than our net operating loss of $8.8 million for 2012. I'll now turn the call back over to Doug for his closing remark.

Thank you, Patty. As we entered 2014, the initial public offering market is robust. We do not know how long it will remain this way. As noted in our annual report on Form 10-K companies that are planning for and/or beginning the process of pursuing potential sales and our IPOs by hiring bankers and advisors to attempt to pursue such liquidity events. We look forward to providing more information to shareholders as the year progresses and as it becomes public. In closing, we’re acutely conscious of the steps we need to take to make Harris and Harris Group competitive in 2014 and beyond, realize, invest, partner, return. We remain laser focused on this execution plan. We believe 2014 will be an important year in our execution on this plan. Thank you. We’ll now take questions.

Thank you. (Operator Instructions) Our first question comes from the line of Ed Woo from Ascendiant Capital. Ed Woo - Ascendiant Capital: I wanted to know a little bit further about what you see as the outlook for the possibly -- about market valuations, either in IPOs or M&A for this year.

This is Doug, can you just repeat that again what we’re looking for as far as market outlook. Ed Woo - Ascendiant Capital: Yes. Right now it seems like the stock market valuations seems pretty strong. The IPO market was strong in 2013 and it seems so far in 2014. Just curious what your outlook is for both of those, which I assume would affect some of your potential valuations for companies that you would potentially have IPOs or to sell them.

Certainly, certainly so as we said, I mean 2013 IPO market there is especially in biotech, I mean I’ll life sciences generally but really in the biotech sector was very strong. I think that institutional investors in the public markets have been seeking growth. We believe that continues into 2014, I think is starting to be a national debate on whether things are getting expensive where there everyone expects to see that continue. Our take is, I mean we’re going to watch the market, the market turns on a dime and you want to make sure that you access the public markets when they’re available but when we see some other quality of the companies I mean clearly there are more and more going out which means there is going to be some lower quality but we still see some great quality companies that are potentially going to look to access are the public market in 2014 and personally we believe that economic growth minus geopolitical events or something like that is going to continue. What we see in our own portfolio company is they’re executing, Metabolon had a fantastic 2013, you heard Daniel talk about our revenue numbers. So, is not that these companies aren’t executing in open market, these companies are really executing they are growing their revenues as well. So, we’re optimistic about for the big growth perspective, but not only our portfolio companies but the U.S. economy. From the valuation standpoint, I just want to be clear, I mean, yes, I mean the public market now when you see all our values and you see what some of these companies are doing in the public market there is great disparity, we don’t to get ahead of ourselves. When these companies are privately look at all the things they’re going to do receive money are still disarray so financings are difficult, he saw us take a large amount of non-performance risk discounts this year so this is just looking and saying in the private room companies are venture capital backed will still they require support from their syndicated fader in that still in disarray whereas the public markets of course are very vibrant. So, I think one expect to see us look to access that market this year, I think that’s a prudent thing to do for venture capital firm especially with companies that are where they are in the development, I mean Harris & Harris Group and it get our hope, I mean we can’t forecast this but our hope would be that the public markets aimed our companies was exciting as they found some other companies that have gone out to date as well. So, we think there is going to be some vibrancy in the market moving forward. Again, subject to geopolitical events or subject to market getting too frothy. Does that answer your question? Ed Woo - Ascendiant Capital: Yes. I guess just a little bit more detailed as you can. Obviously, you're not going to be able to provide guidance on specifically how many companies are going to realize liquidity events, but do you think directionally it should be more than it was in 2013?

2013 all you saw was, you saw some M&A events, I think that again many of our portfolio companies are at the stage where they become exciting M&A candidates. I think that hopefully as we look forward we are going to see both IPO as well as M&A events and as we said historically if you look at what we’ve said that we expected over than that 12 to 24 months. Yes, once you start to look for liquidity events in Harris & Harris Groups portfolio and I mean to be blindly honestly with you if one doesn’t see them one needs to question why but I think one should look to see and one should look to see those accelerate as more and more companies in our portfolio mature again. I think of the Metabolon, I mean Metabolon if you following the events, it’s done everyone, its set itself up, it did a mezzanine round the financing this previous year. Clearly D-Wave is you see the progress D-Wave. I’ve seen people who have seen some other progress Nanosys has made with its adoption into the Kindle Fire HDX so again this company is our all progressive in seeing what one would expect to see ahead of one being successful companies and two potentially future liquidity events as well.

Thank you. And I have no further questions in the queue at this time.

Okay. This is Doug Jamison we thank you all for being on the call, I hope you realize, I mean we try to as much as we can to communicate our stories to investors as always I’ve point to the MBNA section of our annual report on Form 10-K I think we provide a tremendous amount of information about the portfolio and there we try to do this statement our shareholder letters and in our shareholder calls. So, again, we look forward to 2014, we think it’s going to be a very exciting year for Harris & Harris Group and as always if shareholders have question we welcome them. Thank you all very much. Have a great day.

Ladies and gentlemen thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone have a good day.