Good morning, and welcome to the 180 Degree Capital Corp's First Quarter 2018 Financial Results Call. This is Daniel Wolfe, President, Chief Financial Officer and Portfolio Manager of 180 Degree Capital. Kevin Rendino, our Chairman, Chief Executive Officer and Portfolio Manager, and I, would like to welcome you to our call this morning. All participants are currently in a listen-only mode. Following our prepared remarks, we will open the line to questions. [Operator Instructions] I would like to remind participants that this call is being recorded and that we will be referring to a slide deck that we have posted on our Investor Relations website at ir.180degreecapital.com under Calendar of Events. Please turn to Slide 2 that contains our 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 filings with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the Company's business that could affect the Company's actual results. Except as otherwise required by federal securities laws, 180 Degree Capital Corp undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. I would now like to turn the call over to Kevin.

Thank you, Daniel, and good morning, everyone. Please turn to Slide 3, which is a quick summary of the quarter. Our NAV increase by $0.04, our share price declined by 5.6%. Given the opposite direction of the two, our stock price discounts to our NAV widened at quarter-end from the 25% discount to a 30% discount. Our cash and liquid securities increased to a total of over $28 million. This represented nearly half of our total market capitalization at quarter-end and now represents 35% of our portfolio assets. Please move to Slide 4. Our new strategy of investing in public companies continue to pay dividends in Q1. As you can see, we started the quarter with a $2.60 NAV. Led by TheStreet and Adesto, our public portfolio moved our NAV higher by $0.08. Our private portfolio led by a reduction in the essential health systems reduced our NAV by $0.02. Expenses at our newly reduced quarterly level were approximately $0.02, resulting in an end of quarter $2.64 NAV. All-in-all, given the heightened volatility in the markets in Q1, we're happy to be able to print a positive-NAV quarter. This is the fourth time we have now done that in the last five quarters. Next slide please. On Slide 5, we depict our performance over the last five quarters and the sources of that change. If it wasn't evident to everyone, why we needed to change our business model? I think this slide sums it up. We started with an NAV of $2.34 and then add $0.48 of investment gains. Out of the $0.48, 85% of that total was generated from our public company holdings. Subtracting $0.18 of expenses, which also included restructuring charges from last year, you end up with a $2.64 NAV at the end of Q1. Last year 180 Degree shareholders set our company on a far better path on the one we are on, unfortunately for too long. Clearly you can see the benefit of this decision on this slide. We're very happy with the direction our company has had. Next slide please. Here, we show the performance of our public companies in the first quarter. Following last year, when our public companies advanced almost 60%, we achieved a 10% return in Q1. A couple of thoughts on the significant movers. Number one, Adesto rose 14% following its third straight quarter of 30% revenue growth. Number two, TheStreet advanced almost 30% following its recent retirement of its preferred stock, a transaction we helped the company facilitate, and the continued turnaround of this business. Remember, as part of that transaction, we joined So I have to be limited in what I can say. TheStreet did report earnings this morning, and we will be jumping from this call to that call as soon as this call ends. What I will say is this, the B2B data asset that TheStreet has are growing as expected. And for the first time in three years, the B2C subscription deferred revenue increased. This is usually a leading indicator for earned revenues. We consciously walked away from paying for traffic on the free side and moved that hurt TheStreet's advertising revenue in the quarter, but it didn't affect the profitability. We simply stopped chasing $500,000 of bad revenue. Here's the bottom line. We had a view of this business when we joined the board in November that the assets were worth significantly more than the one times enterprise value of the revenue that the company was trading at. Today, I'm more bullish than I was when I first joined the board in November. The retirement of the preferred stock was done for a reason. It gave the company flexibility and options that it simply did not have before. This board will do what's in the best interest of shareholders and the turnaround as happened. Thirdly, on Synacor, it is the one disappointment we've had in our public portfolio. The company has overpromised and under delivered. Here's where we're at. The enterprise value is less than the combined deferred revenue of the entire company, meaning there was a $100 million of Synacor revenues that the market is valuing at zero, they aren't worth zero. If you look at the progression of revenues over the last three years, you will see $100 million in revenue in 2015, $127 million in 2016, $140 million in 2017, and $150 million expected revenues in 2018. Adjusted EBITDA as estimated to be between $7 million and $10 this year, a multiyear high. So what's the problem and why is the enterprise value of Synacor at a multiyear low of $55 million? It's an absurd valuation, and there are views the stock wouldn't be here had the management team never opened its mouth and suggested that the AT&T revenues can be a $100 million, or that in 2019, EBITDA could be $30 million revenues for the entire company could be $300 million. This was self-inflicted wounds that have completely ruined the credibility of management team has with shareholders. It is all fixable though. They just need to be more realistic about the business potential for 2018. We think they've set the company up for more conservative guidance in 2018, and we think they have set more reasonable expectations for how the business will play out. Next slide please. Slide 7 is the end result of our stock picking in the public markets. We wish more of our assets were in public companies. We are driving our strategy towards that end. Here's a look at our performance of our public companies with some comparable indices. It's self-explanatory. Our 10%, return tranced every single relevant index, a very good chart to be able to show people. Next slide please. Back to the scorecard. What's interesting to note is the progress we have made to all through our portfolio composition. We now have 30% of our assets in more liquid assets. While that number is flat from last quarter, the number was 25% a year ago. One other thing to note here, we did close on another SPV. We were prepared to share that name with everybody today, but we've been advised that we actually don't have the file until 45 days after our fiscal year-end despite the fact that we're now over 5% of the company. We are ready to disclose the name today, but when we are, we will send out a release and perhaps do a conference call to discuss it. Next slide please. Here's a chart of our NAV. We are in rarefied air in terms of our ability to execute on the quarterly basis, at least relative to the history of this company. It's been seven years since we posted four or five positive NAV quarters. We certainly have more work to do, but it's been a good five quarters since we started. Next slide. A quick look at a piechart illustrating the makeup of our investments that I have discussed already. As we have repeatedly said, we are driving towards increasing the green portion of this slide. A year ago, 75% of our assets were in private companies and just 25% in public companies. Today, we have 66% in private companies and 34% in public companies. So we certainly are making progress. Next slide please. Here we show what matters the most to you. Our stock price in blue over the bottom line and our stock price as a percentage of our NAV in orange were the top line. We have said it from day one, our first goal is to grow NAV, our second goal is to narrow the discount our stock trades at relative to NAV. We have moved our discount, our stock trade to NAV from 50% to 30% as a result of the remaking of our portfolio and having more liquid assets on our balance sheet. A strategy change is paying off. Next slide please. Finally, our regular sum-of-the-parts chart we show you every quarter. Well, I've said our stock was trading at 70% of NAV at quarter-end. If you give us full credit for the cash and liquid securities we own, the market is effectively paying us $0.55 on the $1 for our private assets. Now let me turn the call over to Daniel for comments on our private portfolio, the discussion of our expenses, and he'll tell you about our recent investment in Turtle Beach.

Thank you, Kevin. Please turn to Slide 13. As we have said in prior calls and letters, we continue to believe our private portfolio contains companies that will generate meaningful returns on invested capital. As of March 31, 2018, our most mature private portfolio companies, D-Wave Systems, AgBiome, HZO and Nanosys, were valued at $31.1 million in aggregate or over half of the total value of our private portfolio. Using this same analysis, as Kevin mentioned on the previous slide, our stock price at the end of the quarter equated to a value of our enter private portfolio of $30.8 million or less than the aggregate value of our four most mature privately held portfolio companies. There are other companies in the private portfolio that also hold promise. However, these companies are in early stages of development and the time lines and potential exit values for these companies are highly uncertain. Please turn to Slide 14. As we have discussed in prior calls, we have greatly reduced our operating expenses, which makes it far easier to grow NAV than in years passed. For the first quarter of 2018, our operating expenses were $740,000 versus $1.05 million in the same quarter of 2017, a 30% year-over-year reduction. Please note that the first quarter of 2017 was the last quarter of operations as our predecessor company, Harris & Harris Group. Going forward, the quarterly year-over-year comparisons will no longer show the drastic drop in expenses as those recorded over the last four quarters and in this comparison. Please turn to Slide 15. As we discussed on last quarter's call, we currently anticipate that our annual ongoing operating expenses in 2018 will increase slightly from last year, reflecting the potential for us to make investments in our business by adding to our investment staff. We will only pursue such a hire if we believe that the investment will help us launch new funds, either managed and/or co- managed by 180. Additionally, this slide also includes our annual expenses, including year-end compensation bonus in 2017, and accruals for the portion of this bonus that was deferred and will only be payable upon if our performance from 2017 is persistent in 2018 and 2019. We remain committed to treating every dollar of shareholder money with the utmost care and consideration. It is much easier for us to grow NAV when the expense hurdle rate is where it is today. We aim to decrease this expense ratio further. However, these decreases will likely come from an increase in that assets rather than from further reductions in operating expenses. Please turn to Slide 16. While we are pleased with how the quarter ended, we are now focused on the second quarter, and we believe that it has started out on strong footing with the new investment in the company called Turtle Beach Corporation, and as Kevin mentioned, the closing of our second special purpose vehicle or SPV. Please turn to Slide 17. On April 27, 2018, we announced the investment in Turtle Beach Corporation that trades on Nasdaq under the symbol HEAR, H-E-A-R. Turtle Beach is a leading provider of headsets in the gaming industry. The company had a similar problem as TheStreet, a complex balance sheet that included approximately $19.3 million of preferred stock, accruing interest at a relatively higher rate. 180 invested $1 million as part of a total takeout price to this preferred security of $7.45 million. We purchased shares of Turtle Beach as part of the transaction at $3.50a share. Please turn to Slide 18. We were excited about this investment opportunity because it presented another opportunity to remove a capital structure overhang at a substantial discount. Once this overhang was removed, the additional value should accrete the common shareholders. This slide shows what this accretion could look like if all other factors remain the same. On April 26, 2018, the day before the transaction was announced, Turtle Beach's common stock was trading at $4.89 per share. If all else remains the same, following the removal of the preferred stock under the terms discussed, Turtle Beach's common stock should have traded at $5.51. It currently trades above $7 a share. The environment for gaming is exploding due to the introduction of new multiplayer games such as Fortnite and PlayerUnknown's Battlegrounds. We believe Turtle Beach is well positioned to build value from this trend. As Kevin mentioned also during the second quarter, we closed on our second special purpose fund, or SPV, with $3.35 million in community capital. We are not ready to share the identity of this target investment, but we look forward to doing so in the future. And as Kevin mentioned, currently, we're not required to report the investment because we have not gone active in terms of required – being required to file 13B, and so we will be looking forward to discussing with this in the future. Please turn to Slide 19. We continue to make progress on our efforts to obtain a broker-dealer license and other investments in our business that we believe will result in value creation for shareholders in the future, and look forward to being able to share these efforts with you as well in upcoming calls. I will now turn the call back over to Kevin.

Thanks, Daniel. And hopefully, by now, shareholders have come to realize that every decision that we make is geared towards our common shareholders, and with a desire to create shareholder value. For too long, our business has disappointed you, both in terms of our NAV and its stock price. We think we're building a very fine track record for constructive activism in the small-cap ecosystem, and we're quite pleased with the start we have gotten off to in the last five quarters. We want 180 Degree known as a thought leader in our world and a firm that can help public companies in their desires to create value for their shareholders. Examples are Turtle Beach and TheStreet. Most importantly, we want 180 to be known as an investment shop that shows investment excellence, meaning we want to make money for our shareholders and we also want to make money for our investors in our SPVs or co-investment vehicles and some advised funds. That's why we show up every day. Thank you for your time, and now, Daniel, let's open it up for questions.

[Operator Instructions] Our first question comes from ACP. Please go ahead.

Hello?

Sorry, go ahead. Please go ahead.

Yes. Hey, good morning, guys. It’s Lenny. I got – my machine, I don't know whether anybody else had this problem, but I got hung on Page 11 of the presentation. So I just wanted to share that with you or maybe others did just fine, but just want to let you know.

You are on the website?

Yes.

Thanks, Lenny.

No worries.

Always thankful for your support, Lenny.

Yes, full speed ahead guys.

By the way, our shareholder letter is out and also on our website along with what you should have been the shareholder presentation for this conference call. I always take a little point out this morning, so it should be up on the site, the shareholder letter also.

Good morning, Kevin and good morning, Dan.

Good morning.

It’s Sam Robosky. You indicated your cash was $28 million as of March 31. It appears you sold some of that stuff subsequent and you made this investment. Could you sort of indicate what your cash is currently? And I guess, you'll have some profit from the Adesto. And what's your plan going forward?

So cash and liquid security, Sam, was $28 million. We don't really talk about what our cash and liquid securities do, but what you can do is you can follow them just like we. We told you – you know when all these stocks traded as of the end of the quarter and you can kind of mark-to-market them as the quarter unfolds, knowing that will probably end up spending $0.02 to $0.025 of expenses each and every quarter. What you don't know is when we're selling what the average prices during the quarter, and we're just – we don't have liberty to discuss that part as well. But you will see with Turtle Beach, you know the investment that we've made, $1 million with $3.5, you can see where the stock is today. You can try and calculate it. If you see where Mersana is this quarter or right now versus the end of the quarter, it's up. Adesto is up, TheStreet is a shake down, Synacor is up, and obviously, Turtle Beach is up 100%. So you can probably guess that our cash and liquid securities are higher today than they were at quarter-end.

Okay. Well, Kevin, I want you to know you and Dan have done a significantly good job in turning the company around relative to the name TURN, your symbol. Tell me what's the story with HALE.life? Are we doing anything there?

Yes, so happy to give you a little bit of update on HALE.life. So the company is, I think we talked about historically in last year is really focused on leveraging information that we can be gained from variables and other devices that are now on the market, combined with genetics and other metabolomic and biological information to give individuals a better idea of how to manage their health, but also – and our really focus right now is on performance athletics and the lead athletes. So really working with them to figure out how to make them be able to perform at peak levels during their – even the games or whatever in the ballet, for example, being able to continue to dance and at the highest levels throughout all the performances. So the company is moving forward well at some pilot tests. They are – and there is some initial responses that people are interested in. It is still very early stage company. It's still working to figure out its business model. But the initial indications are positive that it seems like what they have in the product offerings or putting together is something that at least a first set of customers are interested in.

Thank you, thank you. And as far as your matured companies, do we expect a transaction in the current year ending December 31?

So I'd love to give you an answer that would make you happy, Sam. We don't know. Here is what I'd say. I'd say if he didn't make the change that we made a year and a half ago to reorient our business towards something completely different, we would have been in a far different place. We would have been in the far worst place. We would have had, through the force, sold many of these private businesses because our operating expenses were too high, and we would have needed cash to fund our business. And there would have been a cycle, a vicious cycle down, and fortunately for us, we don't have to make any decisions on our private portfolio. We – as a board, our desire is to monetize our businesses as quickly as we can if we are getting fair value for those assets. So let's say, a company is going to a round of financing, if there's an opportunity for us to sell into that round, we will sell into that round if we can, and its fair value for that asset. If we want us to just take this whole portfolio and sell it in the secondary markets, neither our board or our shareholders would be happy and the price that we're getting for those assets. So we're not just going to sell anything for the sake of selling them. If we can convert that capital into cash at a decent valuation just like you analyze any public company. If our valuation of the private business, lends itself towards making a sale at a price we think is fair value, we'll do it. As you said, they are four or five companies that are very mature, whether it's Nanosys or HZO, AgBiome, to some extent, D-Wave, to some extent, we hope that over the next couple of years, 18 months, we'll be able to have some monetization events like the one we had last year with Mersana. So we can't force them to monetize, they're going to do it when they can, where we are trying to liquefy that portfolio when we can. But I don't want to sit here, Sam, and give you false promises and tell you we're going to be able to do something in the next six months, I simply don't know.

Thank you. You're doing a good job. Keep up the good work.

Thanks for the support, Sam.

Thanks Sam. Hi, please go ahead.

You may now ask your question.

Hi, please go ahead.

So Dan, I think – it's me, Al Shams [ph]. I think I'm up. Can you hear me?

Yes, we can. Hi, Al.

Okay, okay. So with respect to Turtle Beach, so we put – we bought approximately – about 330,000 shares of Turtle Beach and that's our commitment?

$1 million at $3.50.

Yes, so it's just slightly under 300,000.

Okay, okay. And that's our current position?

Correct. Well, that was our announcement of our week. I mean, I can't tell you what we're doing two quarters out. But that was our position in the pipe field that was done at the end of the last month.

Okay, okay. With respect to the special purpose vehicle, can you describe just in general terms how that might operate? And how value…

Very similar to the one that we did with TheStreet in that – look, at the end of the day, if the entire private portfolio is cash and we had – let's say, all of our assets were in cash and available for investments in public companies, we would do all these deals with the cash on the balance sheet because shareholders get a 100% of the return on that. The reason for having to do SPVs is because, and to Sam's point, we can't make the private companies monetize. And so instead of us twiddling our thumbs and moving some of the public portfolio around, we could at least still have the flexibility in our balance sheet to invest. So therefore, we find these what we think our tremendous ideas and we want to make people money in those ideas, and that's the reason for setting up the SPVs there. They – and the one that we did was because we felt this though – we just couldn't do it all from our own balance sheet. And so here's a great idea, let's raise the money, let's talk to people about that idea, and then let's go buy the stock, and then at some point, we'll file and everyone will know who it is and then we'll get busy trying to figure out how to make the thing go up from where it is today.

So we're bringing in joint venture partners, basically?

Family offices, private wealth shops, RIs, RIAs. We – I want folks invested alongside of us that understand what our time horizon is, which is not tomorrow. It's – I mean, I know we have gotten – look, USA Truck was up 100% last year in three months, Turtle Beach is up 100% in three weeks. Like, I understand that's not normal. So normally we have a two-year, kind of, time horizon. We want people that are like-minded to us in terms of their investment process and want to really, sort of, invest alongside of us.

Okay. And then, finally, when you're considering monetizing some of the private portfolio. While you might not get full fair value, if you can get pretty close to it and see a really compelling opportunity, like, what we did with Turtle Beach, maybe it might make sense to take a little bit less than fair value on the private side to get a tremendous value on the public side.

We totally agree – yes, we very much agree with you. I – we are not being piggish as it relates to – we know – look, I mean, this business got into this situation as it did for a reason. We understand the pluses and the minuses of the private world. A couple of the companies that we own probably go to zero, not the big ones. But we get it and so we're not looking to get the most value we can. We're just looking to get at acceptable value. And sometimes that could – that might even be below NAV of that position, who knows? But we're not – to reiterate my comment that I started answering with, we're not going to be piggish on, I promise.

Right, okay. Okay. Well, great work. I love it when we're able to take buyback debt and preferred at a deep discount, that's a real value creation process, so good work.

Thanks, Al.

Thanks, Al.

Seeing no more questions in the queue.

Okay. Well, thanks, everyone, for their time today. If you have any follow-up questions, feel free to e-mail myself or Daniel, feel free to pick up the phone and give us a ring. We're pleased with Q1, but we're on to Q2 and Q2 is off to an even better start than Q1. So I look forward to returning and talking about our Q2 results sometime in late July. Until then, I hope you're well, and we look forward to talking to you at your convenience. Thanks.

Thank you very much.

Good bye.