10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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Form 10-K

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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2013

Commission File Number 1-5620

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Safeguard Scientifics, Inc.

(Exact name of Registrant as specified in its charter)

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Pennsylvania	23-1609753
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer ID No.)
435 Devon Park Drive Building 800 Wayne, PA	19087
(Address of principal executive offices)	(Zip Code)

(610) 293-0600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock ($.10 par value)	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  ý

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes  ¨    No  ý

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ý

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	ý
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

As of June 30, 2013, the aggregate market value of the Registrant’s common stock held by non-affiliates of the Registrant was $334,376,985 based on the closing sale price as reported on the New York Stock Exchange.

The number of shares outstanding of the Registrant’s common stock, as of March 6, 2014 was 21,556,610.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement (the “Definitive Proxy Statement”) to be filed with the Securities and Exchange Commission for the Company’s 2014 Annual Meeting of Shareholders are incorporated by reference into Part III of this report.

SAFEGUARD SCIENTIFICS, INC.

FORM 10-K

December 31, 2013

	Page
PART I
Item 1. Business	3
Item 1A. Risk Factors	11
Item 1B. Unresolved Staff Comments	18
Item 2. Properties	18
Item 3. Legal Proceedings	18
Item 4. Mine Safety Disclosures	18
PART II
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6. Selected Consolidated Financial Data	21
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	36
Item 8. Financial Statements and Supplementary Data	37
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	71
Item 9A. Controls and Procedures	71
Item 9B. Other Information	72
PART III
Item 10. Directors, Executive Officers and Corporate Governance	72
Item 11. Executive Compensation	72
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	72
Item 13. Certain Relationships and Related Transactions, and Director Independence	72
Item 14. Principal Accountant Fees and Services	72
PART IV
Item 15. Exhibits and Financial Statement Schedules	73

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PART I

Cautionary Note Concerning Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about Safeguard Scientifics, Inc. (“Safeguard” or “we”), the industries in which we operate and other matters, as well as management's beliefs and assumptions and other statements regarding matters that are not historical facts. These statements include, in particular, statements about our plans, strategies and prospects. For example, when we use words such as “projects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “should,” “would,” “could,” “will,” “opportunity,” “potential” or “may,” variations of such words or other words that convey uncertainty of future events or outcomes, we are making forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Our forward-looking statements are subject to risks and uncertainties. Factors that could cause actual results to differ materially include, among others, our ability to make good decisions about the deployment of capital, the fact that our partner companies may vary from period to period, our substantial capital requirements and absence of liquidity from our partner company holdings, fluctuations in the market prices of our publicly traded partner company holdings, competition, our inability to obtain maximum value for our partner company holdings, our ability to attract and retain qualified employees, our ability to execute our strategy, market valuations in sectors in which our partner companies operate, our inability to control our partner companies, our need to manage our assets to avoid registration under the Investment Company Act of 1940, and risks associated with our partner companies and their performance, including the fact that most of our partner companies have a limited history and a history of operating losses, face intense competition and may never be profitable, the effect of economic conditions in the business sectors in which our partner companies operate, compliance with government regulation and legal liabilities, all of which are discussed in Item 1A. “Risk Factors.” Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by this cautionary statement. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report might not occur.

Item 1. Business

Business Overview

Safeguard’s charter is to build value in growth-stage businesses by providing capital as well as strategic, operational and management resources. Safeguard participates principally in growth and expansion financings and early-stage financings. Our vision is to be the preferred capital source for entrepreneurs and management teams in well defined industry sectors. Throughout this document, we use the term “partner company” to generally refer to those companies in which we have an equity interest and in which we are actively involved, influencing development through board representation and management support, in addition to the influence we exert through our equity ownership. From time to time, in addition to these partner companies, we also hold relatively small equity interests in other enterprises where we do not exert significant influence and do not participate in management activities. In some cases, these interests relate to former partner companies and in some cases they relate to entities which may later become partner companies.

We strive to create long-term value for our shareholders by helping our partner companies increase their market penetration, grow revenue and improve cash flow. Safeguard focuses principally on companies with initial capital requirements of between $5 million and $15 million, and follow-on financing needs of between $5 million and $10 million, with a total anticipated deployment up to $25 million from Safeguard. We will occasionally provide certain early stage financing in amounts generally up to $1 million to promising young companies with the goal to provide more capital once certain development milestones are achieved. Safeguard principally targets companies that operate in two sectors:

Healthcare — companies focused on medical technology (“MedTech”), including diagnostics and devices; healthcare technology (“HealthTech”); and specialty pharmaceuticals. Within these areas, Safeguard targets companies that have lesser regulatory risk and have achieved or are near commercialization; and

Technology — companies focused on digital media; financial technology (“FinTech”); and Enterprise 3.0, which includes mobile technology, cloud, the “Internet of Things” and big data. Within these areas, Safeguard targets companies that have transaction-enabling applications with a recurring revenue stream.

In 2013, our management team continued to focus on the following objectives:

• Deploy capital in companies within our strategic focus;

• Build value in partner companies by developing strong management teams, growing the companies organically and through acquisitions, and positioning the companies for liquidity at premium valuations;

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• Realize the value of partner companies through selective, well-timed exits to maximize risk-adjusted value; and

• Provide the tools needed for investors to fully recognize the shareholder value that has been created by our efforts.

To meet our strategic objectives during 2014, Safeguard will continue to focus on:

• Finding opportunities to deploy our capital in additional partner companies within our target sectors;

• Helping partner companies to achieve additional market penetration, revenue growth, cash flow improvement and growth in long-term value; and

• Realizing value in our partner companies if and when we believe doing so will maximize value for our shareholders.

We incorporated in the Commonwealth of Pennsylvania in 1953. Our corporate headquarters are located at 435 Devon Park Drive, Building 800, Wayne, Pennsylvania 19087.

Significant 2013 Highlights

Here are our key developments from 2013:

• During 2013, we deployed an aggregate of $34.1 million of capital into six new partner companies and in other early stage enterprises. In addition, we deployed $15.3 million of additional capital to support the growth of the partner companies in which we already had an interest at December 31, 2012.

• In January 2013, Safeguard deployed $1.3 million as part of a $14.8 million financing for Sotera Wireless, Inc. (“Sotera”). In addition, Safeguard paid $1.2 million to acquire additional shares in Sotera from a previous investor. Sotera is a medical device company that has developed a new wireless patient monitoring platform called ViSi Mobile®.

• In February and August 2013, Safeguard deployed an aggregate of $5.5 million in Clutch Holdings, Inc., a mobile commerce platform that unifies gifting, loyalty programs and shopping by bringing the most relevant information to consumers and the most targeted customers to merchants.

• In February 2013, Safeguard deployed $5.0 million as part of a $6.0 million financing for Pneuron Corporation. Pneuron’s lightweight, cloud-ready enterprise-class platform provides a suite of high-performance “pneurons” that enables enterprises to build, deploy and manage distributed analytics, applications and operating models directly against source systems and centrally integrates insights.

• In August 2013, Safeguard deployed $7.5 million as part of a $10.0 million financing for Quantia, Inc. Quantia’s mobile and web-based physician relationship management platform, called QuantiaMD, enables principal participants throughout the healthcare spectrum including health systems, payers, pharmaceutical companies, and medical device companies to reach, engage and interact with their high-value physicians in a way that ultimately creates revenue opportunities, reduces costs, saves time, and improves quality of care.

• In November 2013, Safeguard deployed $12.1 million as part of a $16.0 million financing for Apprenda Inc., which powers the next generation of enterprise software development in public, private and hybrid clouds. As a foundational software layer and application run-time environment, Apprenda abstracts away the complexities of building and delivering modern software applications, enabling enterprises to turn ideas into innovations faster. With Apprenda, enterprises can securely deliver an entire ecosystem of data, services, applications and application programming interfaces to both internal and external customers across any infrastructure.

• In November 2013, Safeguard deployed $0.8 million as part of a $1.5 million financing for Dabo Health, Inc. Dabo Health provides the healthcare community with a platform to view and track improvement in key performance metrics, collaborate across hospitals and healthcare systems, and identify and share learnings to save lives providing a solution which enables providers and payers to improve patient care, reduce per capita cost and maximize reimbursements.

• In December 2013, Safeguard received $36.4 million in initial proceeds from the successful sale of Safeguard partner company ThingWorx, Inc. to PTC Inc. (NASDAQ:PTC). The $36.4 million excludes $4.1 million which will be held in escrow until December 30, 2015. Under the terms of the definitive agreement, PTC acquired ThingWorx for approximately $112.0 million, plus an earn-out of up to $18.0 million. Under the earn-out, Safeguard has the opportunity to receive up to an additional $6.5 million based on certain milestones that may be achieved over future periods. This would increase Safeguard’s total proceeds to approximately $47.0 million. It is difficult to assess the likelihood of receiving some or all of such amounts, or the timing thereof.

Our Strategy

Founded in 1953, Safeguard has a distinguished record of building market leaders by providing capital and operational support to entrepreneurs across an evolving and innovative spectrum of industries. Today, Safeguard targets healthcare companies focusing on medical technology, healthcare technology and specialty pharmaceuticals and technology companies focusing on financial technology, internet and digital media, and Enterprise 3.0.

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As a visionary for the development of growth-stage healthcare and technology companies, Safeguard is a proven partner for entrepreneurs looking to accelerate growth and build long-term value in their businesses. Leveraging Safeguard’s rich and colorful history of building market leaders, along with our team’s collective operational expertise and successful entrepreneurial endeavors, Safeguard has built a powerful-and actionable-platform of resources to support our partner companies with the strategies and relationships that are most vital for success. We provide value that extends beyond capital and work as a team to foster growth.

Our corporate staff of 30 employees is dedicated to creating long-term value for our shareholders by helping our partner companies build value and by finding additional capital deployment opportunities.

Identifying Partner Company Opportunities

Safeguard’s go-to-market strategy, marketing and sourcing activities within our sectors of focus (Healthcare and Technology) are designed to generate a large volume of high-quality opportunities to acquire significant shareholder positions in partner companies. Our principal focus is to acquire positions in emerging- and growth-stage companies with attractive growth prospects in the technology and healthcare sectors. Generally, we prefer to deploy capital into companies:

• operating in large and/or growing markets;

• with barriers to entry by competitors, such as proprietary technology and intellectual property, or other competitive advantages;

• with initial capital requirements between of $5 million and $15 million, and follow-on financing needs of between $5 million and $10 million, with the total anticipated deployment of up to $25 million from Safeguard; and

• with a compelling growth strategy.

Our sourcing efforts are targeted primarily in the eastern United States. However, in-bound deal leads generate opportunities throughout the United States, and we do not limit our sourcing to a particular geographic area within the United States. Leads come from a variety of sources, including investment bankers, syndication partners, existing partner companies and advisory board members.

In Healthcare, we currently target companies in MedTech, including diagnostics and devices, HealthTech and specialty pharmaceuticals that have lesser regulatory risk and have achieved or are near commercialization.

In Technology, we currently target companies in digital media, FinTech, and Enterprise 3.0, which includes mobile technology, cloud, “Internet of Things” and big data that have transaction-enabling applications with a recurring revenue stream.

We believe there are many opportunities within these business models and vertical markets, and our sourcing activities are focused on finding candidate companies and evaluating how well they align with our criteria. However, we recognize we may have difficulty identifying candidate companies and completing transactions on terms we believe appropriate. As a result, we cannot be certain how frequently we will enter into transactions with new or existing partner companies.

Competition. We face intense competition from other companies that acquire or provide capital to healthcare and technology businesses. Competitors include venture capital and, occasionally, private equity investors, as well as companies seeking to make strategic acquisitions. Many providers of growth capital also offer strategic guidance, networking access for recruiting and general advice. Nonetheless, we believe we are an attractive capital provider to potential partner companies because our strategy and capabilities offer:

• responsive operational assistance, including strategy design and execution, business development, corporate development, sales, marketing, finance, risk management, talent recruitment and legal support;

• the flexibility to structure transactions, with or without debt;

• occasional liquidity opportunities for founders and existing investors;

• a focus on maximizing risk-adjusted value growth, rather than absolute value growth within a narrow or predetermined time frame;

• interim C-level management support, as needed; and

• opportunities to leverage Safeguard’s balance sheet for borrowing and stability.

Helping Our Partner Companies Build Value

We offer operational and management support to each of our partner companies through our deep domain expertise from our management team's careers as entrepreneurs, board members, financiers and operators. Our employees have expertise in business strategy, sales and marketing, operations, finance, legal and transactional support. We provide hands-on assistance to the management teams of our partner companies to support their growth. We believe our strengths include:

• applying our expertise to support a partner company’s introduction of new products and services;

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• leveraging our market knowledge to generate additional growth opportunities;

• leveraging our business contacts and relationships; and

• identifying and evaluating potential acquisitions and providing capital to pursue potential acquisitions to accelerate growth.

Strategic Support. By helping our partner companies’ management teams remain focused on critical objectives through the provision of human, financial and strategic resources, we believe we are able to accelerate their development and success. We play an active role in developing the strategic direction of our partner companies, including:

• defining short and long-term strategic goals;

• identifying and planning for the critical success factors to reach these goals;

• identifying and addressing the challenges and operational improvements required to achieve the critical success factors and, ultimately, the strategic goals;

• identifying and implementing the business measurements that we and others will apply to measure a company’s success; and

• providing capital to drive growth.

Management and Operational Support. We provide management and operational support, as well as ongoing planning and development assessment. Our executives and advisory board members provide mentoring, advice and guidance to develop partner company management. Our executives serve on the boards of directors of partner companies, working with them to develop and implement strategic and operating plans. We measure and monitor achievement of these plans through regular review of operational and financial performance measurements. We believe these services provide partner companies with significant competitive advantages within their respective markets.

Realizing Value

In general, we will hold our position in a partner company as long as we believe the risk-adjusted value of that position is maximized by our continued ownership and effort. From time to time, we engage in discussions with other companies interested in our partner companies, either in response to inquiries or as part of a process we initiate. To the extent we believe that a partner company’s further growth and development can best be supported by a different ownership structure or if we otherwise believe it is in our shareholders’ best interests, we may sell some or all of our position in the partner company. These sales may take the form of privately negotiated sales of stock or assets, mergers and acquisitions, public offerings of the partner company’s securities and, in the case of publicly traded partner companies, sales of their securities in the open market. In the past, we have taken partner companies public through rights offerings and directed share subscription programs. We will continue to consider these (or similar) programs to maximize partner company value for our shareholders. We expect to use proceeds from these sales (and sales of other assets) primarily to pursue opportunities to deploy capital in new and existing partner companies, or for working capital purposes, either with existing partner companies or at Safeguard.

Our Partner Companies

An understanding of our partner companies is important to understanding Safeguard and its value-building strategy. Following are descriptions of our partner companies in which we owned interests at December 31, 2013. The indicated ownership percentage is presented as of December 31, 2013 and reflects the percentage of the vote we were entitled to cast at that date based on issued and outstanding voting securities (on a common stock equivalent basis), excluding the effect of options, warrants and convertible debt (primary ownership).

HEALTHCARE PARTNER COMPANIES

AdvantEdge Healthcare Solutions, Inc. (Safeguard Ownership: 40.1%)

AdvantEdge Healthcare Solutions (“AdvantEdge”), with offices in multiple locations in the Eastern and Mid-Western United States, is a technology-enabled provider of healthcare revenue cycle and business management solutions that improve decision-making, maximize financial performance, streamline operations and eliminate compliance risks for healthcare providers. AdvantEdge continues to gain meaningful scale through organic growth and strategic acquisitions, having completed eight acquisitions since 2007. AdvantEdge has more than 675 employees in eight regional offices in the U.S. and one office in Bangalore, India. www.ahsrcm.com

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Alverix, Inc. (Safeguard Ownership: 48.5%)

Alverix designs, develops and manufactures next-generation instrument and connectivity platforms for Point-of-Care diagnostic testing. Alverix’s systems enable laboratory class performance in a mobile, inexpensive format, extending testing beyond high volume sites to physician office labs, retail clinics, emerging markets and the home, where immediate results are critical to patient care. Becton, Dickinson and Company acquired Alverix in January 2014. For further details, see Note 18 to the Consolidated Financial Statements.www.alverix.com

Crescendo Bioscience, Inc. (Safeguard Ownership: 12.6%)

Crescendo Bioscience is a molecular diagnostics company that is currently focused on improving the treatment of rheumatoid arthritis (“RA”), a debilitating, chronic inflammatory disease characterized by bone erosions and cartilage degradation. Current tools for assessing the status of RA in individual cases are largely subjective, imprecise and cumbersome to administer in daily practice. Working with collaborators from academic medical institutions, Crescendo Bioscience is building a comprehensive understanding of the underlying biology of RA, including the characterization of protein, gene expression and genetic biomarkers, to provide molecular analysis of the disease to help guide the treatment of individual patients. Through its lead product, Vectra^™ DA, Crescendo Bioscience is establishing long-term relationships with clinicians to help improve outcomes throughout the continuum of care. All testing is performed at Crescendo Bioscience’s own specialized, CLIA-certified laboratory. Myriad Genetics acquired Crescendo in February 2014. For further details, see Note 18 to the Consolidated Financial Statements. www.crescendobio.com

Dabo Health, Inc. (Safeguard Ownership: 8.0%)

Headquartered in San Francisco, California, Dabo Health provides the healthcare community with a platform to view and track improvement in key performance metrics, collaborate across hospitals and healthcare systems, and identify and share learnings to save lives - providing a solution which enables providers and payers to improve patient care, reduce per capita cost and maximize reimbursements. www.dabohealth.com

Good Start Genetics, Inc. (Safeguard Ownership: 30.0%)

Headquartered in Cambridge, Massachusetts, Good Start Genetics is an innovative molecular genetic information company that has developed more accurate and comprehensive genetic carrier screening tests. Good Start Genetics’ sequencing-based carrier screening test, GoodStart Select™, screens for all 23 genetic disorders recommended for screening by leading medical societies and influential advocacy groups. Good Start Genetics’ next-generation DNA sequencing technology, combined with other proven genetic screening technologies, results in higher carrier detection rates regardless of ethnicity. www.goodstartgenetics.com

Medivo, Inc. (Safeguard Ownership: 34.5%)

Headquartered in New York, New York, Medivo is a health monitoring company that enables physicians and payers to better track and improve outcomes, while providing services for life science companies to more effectively target and measure impact. Medivo’s lab results search and lab analytics platform give healthcare providers access to more complete patient and practice-level profiles sourced from more than 150 labs, while the company’s suite of mobile apps increase patient engagement and lab testing compliance. Medivo’s services enable physicians and payers to better track and improve outcomes, while providing services for life science companies to more effectively target and measure impact. www.medivo.com

NovaSom, Inc. (Safeguard Ownership: 30.3%)

Headquartered in Glen Burnie, Maryland, NovaSom is a medical device company that has developed the first and only FDA-cleared wireless home sleep test for Obstructive Sleep Apnea (“OSA”), called AccuSom® Home Sleep Test. The NovaSom home sleep testing technology and MediTrack® portal have been shown to provide in-home, clinically equivalent diagnosis of OSA at a significantly reduced cost compared to in-facility testing for uncomplicated adult OSA. www.novasom.com

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NuPathe Inc. (NASDAQ: PATH) (Safeguard Ownership: 16.5%)

NuPathe is a specialty pharmaceutical company focused on the development and commercialization of branded therapeutics for diseases of the central nervous system. Teva Pharmaceuticals acquired NuPathe in February 2014. For further details, see Note 18 to the Consolidated Financial Statements. www.nupathe.com

Putney, Inc. (Safeguard Ownership: 27.6%)

Headquartered in Portland, Maine, Putney is a specialty pharmaceutical company developing high-quality, cost-effective generic medicines for pets. Putney’s mission is to partner with veterinary practices to provide high-quality medicines that meet pet medical needs and offer cost-effective alternatives for pet owners. www.putneyvet.com

Quantia, Inc. (Safeguard Ownership: 35.1%)

Headquartered in Waltham, Massachusetts, Quantia is a leader in physician engagement and alignment. Quantia's web-based and mobile platform, called QuantiaMD, enables principal participants in healthcare to reach and engage high-value physicians in ways that ultimately reduce costs, save time, and improve quality of care. The platform blends social media, game mechanics and engagement science to help its clients, organizations such as health systems, payers, pharmaceutical companies and medical device companies, collaborate with physicians. www.quantia-inc.com

Sotera Wireless, Inc. (Safeguard Ownership: 7.3%)

Headquartered in San Diego, California, Sotera is a medical device company that has developed a wireless patient monitoring platform called ViSi Mobile®. The FDA-approved ViSi Mobile System continuously monitors all core vital signs - heart rate or pulse rate, electrocardiogram, blood pressure, blood oxygenation level, respiration rate and skin temperature - all with a monitoring accuracy typically found in intensive care units while not restricting the patient’s mobility. www.soterawireless.com

TECHNOLOGY PARTNER COMPANIES

AppFirst, Inc. (Safeguard Ownership: 34.3%)

Headquartered in New York, New York, AppFirst delivers an application-aware operational intelligence platform that enables organizations to see key information across their entire IT ecosystem. AppFirst’s data collection and aggregation is a powerful big data solution, collecting data across every process within any application, across all servers in real time. Customers are using AppFirst to lower IT costs, enhance security and compliance, make better business decisions based on proactive intelligence, and drive toward a new quality of service. www.appfirst.com

Apprenda, Inc. (Safeguard Ownership: 22.0%)

Headquartered in Clifton Park, New York, Apprenda powers the next generation of enterprise software development in public, private and hybrid clouds. As a hybrid cloud software layer that aligns IT resources and public cloud with efficiency and innovation goals, Apprenda helps customers reinvent their business more profitably, enabling the emergence of the software-defined enterprises. www.apprenda.com

Beyond.com, Inc. (Safeguard Ownership: 38.2%)

Headquartered in King of Prussia, Pennsylvania, Beyond.com is a career network that is focused on helping people grow and succeed professionally. Beyond.com helps employers and more than 30 million job seekers pinpoint the most relevant opportunities based on location, industry and expertise. This is achieved through 75 unique career channels, 2,500 industry communities, and 500 professional communities which reach more than 100 countries in the Beyond.com global network. www.beyond.com

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Bridgevine, Inc. (Safeguard Ownership: 22.7%)

Headquartered in Vero Beach, Florida, Bridgevine is a performance-based digital marketing company that has consolidated the fragmented digital ecosystem through a proprietary up-sell and cross-sell optimization platform. Bridgevine utilizes its proprietary optimization platform, Acquisition and Merchandising Platform, to (a) provide insight and attribution across the digital marketing landscape of search engine optimization, search engine marketing, mobile, social and display media, and (b) perform superior up-sell and cross-sell for brands to better monetize their customers through complimentary offers delivered seamlessly into third party web and customer relationship management environments. www.bridgevine.com

Clutch Holdings, Inc. (Safeguard Ownership: 24.0%)

Headquartered in Ambler, Pennsylvania, Clutch is the first and only end-to-end platform that helps brands connect, manage, engage and measure success across all touch points with their customers via in-store, online, mobile and social media. Through its Consumer Lifecycle Success platform, Clutch enables retailers to maximize the value they get from their customers by providing a comprehensive set of modular solutions to drive loyalty, increase consumer spend and reward brand advocacy. www.clutch.com

DriveFactor, Inc. (Safeguard Ownership: 40.6%)

Headquartered in Richmond, Virginia, DriveFactor provides insurance companies with a turn-key software platform that enables usage based insurance (“UBI”) programs. DriveFactor has created a UBI platform that is statistically more predictive and financially more attractive for insurance companies to implement. It is also a more privacy-sensitive, financially equitable offering for consumers. DriveFactor’s smartphone telematics engine, which is fully integrated into the DriveFactor telematics platform, is available for iOS and Android, and can be embedded into existing or new smartphone apps for the purpose of gathering driving data and generating leads while supporting an engaging customer experience. DriveFactor is currently available in the United States, Canada and Europe. www.drivefactor.com

Hoopla Software, Inc. (Safeguard Ownership: 25.3%)

Headquartered in San Jose, California, Hoopla has developed a complete employee engagement system designed to increase motivation and steer employee actions and behaviors. Hoopla’s subscription-based software as a service ("SaaS") application leverages enterprise data, advanced game mechanics and sophisticated communication tools to cultivate a high performance culture and drive results. Hoopla’s SaaS applications are licensed for a subscription fee and are available on the Salesforce.com AppExchange. www.hoopla.net

Lumesis, Inc. (Safeguard Ownership: 44.2%)

Headquartered in Stamford, Connecticut, Lumesis is a SaaS, cloud-based financial technology company that is dedicated to delivering software solutions and comprehensive, timely data to the municipal bond marketplace. Through sophisticated analytical tools, real-time alerts, proprietary visualization technology and content-rich reporting, Lumesis’ DIVER solutions allow professionals across the municipal market to easily identify portfolio risks and opportunities, improve customer satisfaction, ensure compliance and enable growth. www.lumesis.com

MediaMath, Inc. (Safeguard Ownership: 22.5%)

Headquartered in New York, New York, MediaMath provides enterprise-class technology and services to advertisers and their agencies to make more efficient, effective and profitable marketing decisions. MediaMath’s TerminalOne Marketing Operating System^TM enables marketers to leverage data insights, media optimization and algorithmic decisioning to execute smarter marketing campaigns. MediaMath’s clients include top-tier agencies, holding companies and brands like Havas, Hill Holiday, 1-800-Flowers.com and Pitney Bowes, which use the platform to buy billions of highly targeted ads per month. MediaMath serves more than 3,500 clients with more than 300 employees in twelve locations worldwide. www.mediamath.com

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Pneuron Corporation (Safeguard Ownership: 27.6%)

Headquartered in Woburn, Massachusetts, Pneuron helps Fortune 5000 enterprise companies reduce the time and cost of application development by building solutions across heterogeneous databases, and applications. Pneuron’s lightweight, cloud-ready enterprise-class platform provides a suite of high-performance “pneurons” that enables enterprises to build, deploy and manage distributed analytics, applications and operating models directly against source systems and centrally integrate insights. Instead of bringing all the data, IP and assets into one place, then analyzing them, Pneuron takes the analytics to the data. This approach eliminates the need for large costly failure-prone systems and data integration projects. Pneuron is initially focused on some of the most pressing and complex areas of financial services, including global regulations, risk, conversion management and revenue generation. The company is also starting to gain traction in insurance and healthcare with emerging partnerships. www.pneuron.com

Spongecell, Inc. (Safeguard Ownership: 23.0%)

Headquartered in New York, New York, Spongecell builds online ads that are data-driven, responsive, customizable and scalable across the web. Spongecell’s dynamic creative technology helps advertisers and their agencies build interactive ads that can be personalized to the individual consumer automatically and in real time. Spongecell builds digital ads in as little as 72 hours, allowing creative agencies to quickly deploy interactive ad campaigns that boost engagement and result in higher conversions. www.spongecell.com

Other Initiatives To Expand Our Platform

In 2011, Safeguard acquired a 36% ownership interest in Penn Mezzanine, a mezzanine lending enterprise. As of December 31, 2013, Safeguard had an aggregate of $12.0 million in carrying value related to its ownership interest in Penn Mezzanine and in its lending activities in which Safeguard has participated. We have determined that we will not be making any further new capital deployments in connection with Penn Mezzanine lending activities. We will continue to collect principal and interest payments from our existing participating interests in Penn Mezzanine loans.

In 2014, we will continue to consider other opportunities to expand our platform and leverage our core capabilities.

FINANCIAL INFORMATION ABOUT OPERATING SEGMENTS

Information on operating income (loss), equity income (loss) and net income (loss) for each operating segment of Safeguard’s business for each of the three years in the period ended December 31, 2013 and assets as of December 31, 2013 and 2012 is contained in Note 16 to the Consolidated Financial Statements.

OTHER INFORMATION

The operations of Safeguard and its partner companies are subject to environmental laws and regulations. Safeguard does not believe that expenditures relating to those laws and regulations will have a material adverse effect on the business, financial condition or results of operations of Safeguard.

AVAILABLE INFORMATION

Safeguard is subject to the informational requirements of the Securities Exchange Act of 1934, as amended. Therefore, we file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information with, and furnish other reports to, the Securities and Exchange Commission (“SEC”). You can read and copy such documents at the SEC’s public reference facilities in Washington, D.C., New York, New York and Chicago, Illinois. You may obtain information on the operation of the SEC’s public reference facilities by calling the SEC at 1-800-SEC-0330. Such material may also be accessed electronically by means of the SEC’s home page on the Internet at www.sec.gov or through Safeguard’s website at www.safeguard.com. Such documents are available as soon as reasonably practicable after electronic filing of the material with the SEC. Copies of these reports (excluding exhibits) also may be obtained free of charge, upon written request to: Investor Relations, Safeguard Scientifics, Inc., 435 Devon Park Drive, Building 800, Wayne, Pennsylvania 19087.

The Internet website addresses for Safeguard and its partner companies are included in this report for identification purposes. The information contained therein or connected thereto is not intended to be incorporated into this Annual Report on Form 10-K.

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The following corporate governance documents are available free of charge on Safeguard’s website: the charters of our Audit, Compensation and Nominating & Corporate Governance Committees, our Corporate Governance Guidelines and our Code of Business Conduct and Ethics. We also will post on our website any amendments to or waivers of our Code of Business Conduct and Ethics that relate to our directors and executive officers.

Item 1A. Risk Factors

You should carefully consider the information set forth below. The following risk factors describe situations in which our business, financial condition and/or results of operations could be materially harmed, and the value of our securities may be adversely affected. You should also refer to other information included or incorporated by reference in this report.

Our principal business depends upon our ability to make good decisions regarding the deployment of capital into new or existing partner companies and, ultimately, the performance of our partner companies, which is uncertain.

If we make poor decisions regarding the deployment of capital into new or existing partner companies, our business model will not succeed. Our success as a company ultimately depends on our ability to choose the right partner companies. If our partner companies do not succeed, the value of our assets could be significantly reduced and require substantial impairments or write-offs and our results of operations and the price of our common stock would be adversely affected. The risks relating to our partner companies include:

• most of our partner companies have a history of operating losses and/or limited operating history;

• the intense competition affecting the products and services our partner companies offer could adversely affect their businesses, financial condition, results of operations and prospects for growth;

• the inability to adapt to changing marketplaces;

• the inability to manage growth;

• the need for additional capital to fund their operations, which we may not be able to fund or which may not be available from third parties on acceptable terms, if at all;

• the inability to protect their proprietary rights and/or infringing on the proprietary rights of others;

• that our partner companies could face legal liabilities from claims made against them based upon their operations, products or work;

• the impact of economic downturns on their operations, results and growth prospects;

• the inability to attract and retain qualified personnel;

• the existence of government regulations and legal uncertainties may place financial burdens on the businesses of our partner companies; and

• the inability to plan for and manage catastrophic events.

These and other risks are discussed in detail under the caption “Risks Related to Our Partner Companies” below.

Our partner companies (and the nature of our interests in them) could vary widely from period to period.

As part of our strategy, we continually assess the value to our shareholders of our interests in our partner companies. We also regularly evaluate alternative uses for our capital resources. As a result, depending on market conditions, growth prospects and other key factors, we may at any time:

• change the individual and/or types of partner companies on which we focus;

• sell some or all of our interests in any of our partner companies; or

• otherwise change the nature of our interests in our partner companies.

Therefore, the nature of our holdings could vary significantly from period to period.

Our consolidated financial results also may vary significantly based upon which, if any, of our partner companies are included in our Consolidated Financial Statements.

Our business model does not rely upon, or plan for, the receipt of operating cash flows from our partner companies. Our partner companies generally provide us with no cash flow from their operations. We rely on cash on hand, liquidity events and our ability to generate cash from capital raising activities to finance our operations.

We need capital to develop new partner company relationships and to fund the capital needs of our existing partner companies. We also need cash to service and repay our outstanding debt, finance our corporate overhead and meet our existing funding commitments. As a result, we have substantial cash requirements. Our partner companies generally provide us with no cash flow from their operations. To the extent our partner companies generate any cash from operations, they generally retain the funds to develop their own businesses. As a result, we must rely on cash on hand, partner company liquidity events and new capital raising activities to meet our cash needs. If we are unable to find ways of monetizing our holdings or raising additional

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capital on attractive terms, we may face liquidity issues that will require us to curtail our new business efforts, constrain our ability to execute our business strategy and limit our ability to provide financial support to our existing partner companies.

Fluctuations in the price of the common stock of our publicly traded holdings may affect the price of our common stock.

Fluctuations in the market prices of the common stock of our publicly traded holdings may affect the price of our common stock. The market prices of our publicly traded holdings have been highly volatile and subject to fluctuations unrelated or disproportionate to operating performance.

Intense competition from other capital providers for interests in companies could adversely affect our ability to deploy capital and result in higher valuations of partner company interests which could result in lower gains or possibly losses on our partner companies.

We face intense competition from other capital providers as we acquire and develop interests in our partner companies. Some of our competitors have more experience identifying, acquiring and selling companies and have greater financial and management resources, brand name recognition or industry contacts than we have. Competition from other capital providers could adversely affect our ability to deploy capital. In addition, despite making most of our acquisitions at a stage when our partner companies are not publicly traded, we may still pay higher prices for those equity interests because of higher valuations of similar public companies and competition from other acquirers and capital providers, which could result in lower gains or possibly losses.

We may be unable to obtain maximum value for our holdings or to sell our holdings on a timely basis.

We hold significant positions in our partner companies. Consequently, if we were to divest all or part of our holdings in a partner company, we may have to sell our interests at a relative discount to a price which may be received by a seller of a smaller portion. For partner companies with publicly traded stock, we may be unable to sell our holdings at then-quoted market prices. The trading volume and public float in the common stock of a publicly traded partner company may be small relative to our holdings. As a result, any significant open-market divestiture by us of our holdings in such a partner company, if possible at all, would likely have a material adverse effect on the market price of its common stock and on our proceeds from such a divestiture. Additionally, we may not be able to take our partner companies public as a means of monetizing our position or creating shareholder value.

Registration and other requirements under applicable securities laws and contractual restrictions also may adversely affect our ability to dispose of our holdings on a timely basis.

Our success is dependent on our senior management.

Our success is dependent on our senior management team’s ability to execute our strategy. A loss of one or more of the members of our senior management team without adequate replacement could have a material adverse effect on us.

Our business strategy may not be successful if valuations in the market sectors in which our partner companies participate decline.

Our strategy involves creating value for our shareholders by helping our partner companies build value and, if appropriate, accessing the public and private capital markets. Therefore, our success is dependent on the value of our partner companies as determined by the public and private capital markets. Many factors, including reduced market interest, may cause the market value of our partner companies to decline. If valuations in the market sectors in which our partner companies participate decline, their access to the public and private capital markets on terms acceptable to them may be limited.

Our partner companies could make business decisions that are not in our best interests or with which we do not agree, which could impair the value of our holdings.

Although we may seek a controlling or influential equity interest and participation in the management of our partner companies, we may not be able to control the significant business decisions of our partner companies. We may have shared control or no control over some of our partner companies. In addition, although we currently own a significant, influential interest in some of our partner companies, we do not maintain a controlling interest in any of our partner companies. Acquisitions of interests in partner companies in which we share or have no control, and the dilution of our interests in or loss of control of partner companies, will involve additional risks that could cause the performance of our interests and our operating results to suffer, including:

• the management of a partner company having economic or business interests or objectives that are different from ours; and

• the partner companies not taking our advice with respect to the financial or operating issues they may encounter.

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Our inability to control our partner companies also could prevent us from assisting them, financially or otherwise, or could prevent us from liquidating our interests in them at a time or at a price that is favorable to us. Additionally, our partner companies may not act in ways that are consistent with our business strategy. These factors could hamper our ability to maximize returns on our interests and cause us to incur losses on our interests in these partner companies.

We may have to buy, sell or retain assets when we would otherwise not wish to do so in order to avoid registration under the Investment Company Act.

The Investment Company Act of 1940 regulates companies which are engaged primarily in the business of investing, reinvesting, owning, holding or trading in securities. Under the Investment Company Act, a company may be deemed to be an investment company if it owns investment securities with a value exceeding 40% of the value of its total assets (excluding government securities and cash items) on an unconsolidated basis, unless an exemption or safe harbor applies. We refer to this test as the “40% Test.” Securities issued by companies other than consolidated partner companies are generally considered “investment securities” for purposes of the Investment Company Act, unless other circumstances exist which actively involve the company holding such interests in the management of the underlying company. We are a company that partners with growth-stage companies to build value; we are not engaged primarily in the business of investing, reinvesting or trading in securities. We are in compliance with the 40% Test. Consequently, we do not believe that we are an investment company under the Investment Company Act.

We monitor our compliance with the 40% Test and seek to conduct our business activities to comply with this test. It is not feasible for us to be regulated as an investment company because the Investment Company Act rules are inconsistent with our strategy of actively helping our partner companies in their efforts to build value. In order to continue to comply with the 40% Test, we may need to take various actions which we would otherwise not pursue. For example, we may need to retain a controlling interest in a partner company that we no longer consider strategic, we may not be able to acquire an interest in a company unless we are able to obtain a controlling ownership interest in the company, or we may be limited in the manner or timing in which we sell our interests in a partner company. Our ownership levels also may be affected if our partner companies are acquired by third parties or if our partner companies issue stock which dilutes our controlling ownership interest. The actions we may need to take to address these issues while maintaining compliance with the 40% Test could adversely affect our ability to create and realize value at our partner companies.

Economic disruptions and downturns may have negative repercussions for us.

Events in the United States and international capital markets, debt markets and economies may negatively impact our ability to pursue certain tactical and strategic initiatives, such as accessing additional public or private equity or debt financing for us or for our partner companies and selling our interests in partner companies on terms acceptable to us and in time frames consistent with our expectations.

We cannot provide assurance that material weaknesses in our internal control over financial reporting will not be identified in the future.

We cannot assure you that material weaknesses in our internal control over financial reporting will not be identified in the future. Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in a material weakness, or could result in material misstatements in our Consolidated Financial Statements. These misstatements could result in a restatement of our Consolidated Financial Statements, cause us to fail to meet our reporting obligations and/or cause investors to lose confidence in our reported financial information, leading to a decline in our stock price.

Risks Related to Our Partner Companies

Most of our partner companies have a history of operating losses and/or limited operating history and may never be profitable.

Most of our partner companies have a history of operating losses and/or limited operating history, have significant historical losses and may never be profitable. Many have incurred substantial costs to develop and market their products, have incurred net losses and cannot fund their cash needs from operations. We expect that the operating expenses of certain of our partner companies will increase substantially in the foreseeable future as they continue to develop products and services, increase sales and marketing efforts, and expand operations.

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Our partner companies face intense competition, which could adversely affect their business, financial condition, results of operations and prospects for growth.

There is intense competition in the technology and healthcare marketplaces, and we expect competition to intensify in the future. Our business, financial condition, results of operations and prospects for growth will be materially adversely affected if our partner companies are not able to compete successfully. Many of the present and potential competitors may have greater financial, technical, marketing and other resources than those of our partner companies. This may place our partner companies at a disadvantage in responding to the offerings of their competitors, technological changes or changes in client requirements. Also, our partner companies may be at a competitive disadvantage because many of their competitors have greater name recognition, more extensive client bases and a broader range of product offerings. In addition, our partner companies may compete against one another.

The success or failure of many of our partner companies is dependent upon the ultimate effectiveness of newly-created information technologies, medical devices, healthcare diagnostics, etc.

Our partner companies’ business strategies are often highly dependent upon the successful launch and commercialization of an innovative information technology, medical device, healthcare diagnostic, or similar device or technology. Despite all of our efforts to understand the research and development underlying the innovation or creation of such technologies before we deploy capital into a partner company, sometimes the performance of the technology or device does not match our expectations or those of our partner company. In those situations, it is likely that we will incur a partial or total loss of the capital which we deployed in such partner company.

Our partner companies may fail if they do not adapt to changing marketplaces.

If our partner companies fail to adapt to changes in technology and customer and supplier demands, they may not become or remain profitable. There is no assurance that the products and services of our partner companies will achieve or maintain market penetration or commercial success, or that the businesses of our partner companies will be successful.

The healthcare and technology marketplaces are characterized by:

• rapidly changing technology;

• evolving industry standards;

• frequently introducing new products and services;

• shifting distribution channels;

• evolving government regulation;

• frequently changing intellectual property landscapes; and

• changing customer demands.

Our future success will depend on our partner companies’ ability to adapt to these evolving marketplaces. They may not be able to adequately or economically adapt their products and services, develop new products and services or establish and maintain effective distribution channels for their products and services. If our partner companies are unable to offer competitive products and services or maintain effective distribution channels, they will sell fewer products and services and forego potential revenue, possibly causing them to lose money. In addition, we and our partner companies may not be able to respond to the marketplace changes in an economically efficient manner, and our partner companies may become or remain unprofitable.

Our partner companies may grow rapidly and may be unable to manage their growth.

We expect some of our partner companies to grow rapidly. Rapid growth often places considerable operational, managerial and financial strain on a business. To successfully manage rapid growth, our partner companies must, among other things:

• improve, upgrade and expand their business infrastructures;

• scale up production operations;

• develop appropriate financial reporting controls;

• attract and maintain qualified personnel; and

• maintain appropriate levels of liquidity.

If our partner companies are unable to manage their growth successfully, their ability to respond effectively to competition and to achieve or maintain profitability will be adversely affected.

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Based on our business model, some or all of our partner companies will need to raise additional capital to fund their operations at any given time. We may not be able to fund some or all of such amounts and such amounts may not be available from third parties on acceptable terms, if at all.

We cannot be certain that our partner companies will be able to obtain additional financing on favorable terms when needed, if at all. Because our resources and our ability to raise capital are not unlimited, we may not be able to provide partner companies with sufficient capital resources to enable them to reach a cash-flow positive position, even if we wish to do so. General economic disruptions and downturns may also negatively affect the ability of some of our partner companies to fund their operations from other stockholders and capital sources. We also may fail to accurately project the capital needs of partner companies. If partner companies need capital but are not able to raise capital from us or other outside sources, then they may need to cease or scale back operations. In such event, our interest in any such partner company will become less valuable.

Economic disruptions and downturns may negatively affect our partner companies’ plans and their results of operations.

Many of our partner companies are largely dependent upon outside sources of capital to fund their operations. Disruptions in the availability of capital from such sources will negatively affect the ability of such partner companies to pursue their business models and will force such companies to revise their growth and development plans accordingly. Any such changes will, in turn, negatively affect our ability to realize the value of our capital deployments in such partner companies.

In addition, downturns in the economy as well as possible governmental responses to such downturns and/or to specific situations in the economy could affect the business prospects of certain of our partner companies, including, but not limited to, in the following ways: weaknesses in the financial services industries; reduced business and/or consumer spending; and/or systemic changes in the ways the healthcare system operates in the United States.

Some of our partner companies may be unable to protect their proprietary rights and may infringe on the proprietary rights of others.

Our partner companies assert various forms of intellectual property protection. Intellectual property may constitute an important part of partner company assets and competitive strengths. Federal law, most typically copyright, patent, trademark and trade secret laws, generally protects intellectual property rights. Although we expect that our partner companies will take reasonable efforts to protect the rights to their intellectual property, third parties may develop similar intellectual property independently. Moreover, the complexity of international trade secret, copyright, trademark and patent law, coupled with the limited resources of our partner companies and the demands of quick delivery of products and services to market, create a risk that partner company efforts to prevent misappropriation of their technology will prove inadequate.

Some of our partner companies also license intellectual property from third parties and it is possible that they could become subject to infringement actions based upon their use of the intellectual property licensed from those third parties. Our partner companies generally obtain representations as to the origin and ownership of such licensed intellectual property. However, this may not adequately protect them. Any claims against our partner companies’ proprietary rights, with or without merit, could subject the companies to costly litigation and divert their technical and management personnel from other business concerns. If our partner companies incur costly litigation and their personnel are not effectively deployed, the expenses and losses incurred by our partner companies will increase and their profits, if any, will decrease.

Third parties have and may assert infringement or other intellectual property claims against our partner companies based on their patents or other intellectual property claims. Even though we believe our partner companies’ products do not infringe any third party’s patents, they may have to pay substantial damages, possibly including treble damages, if it is ultimately determined that they do. They may have to obtain a license to sell their products if it is determined that their products infringe on another person’s intellectual property. Our partner companies might be prohibited from selling their products before they obtain a license, which, if available at all, may require them to pay substantial royalties. Even if infringement claims against our partner companies are without merit, defending these types of lawsuits takes significant time, is expensive and may divert management attention from other business concerns.

Certain of our partner companies could face legal liabilities from claims made against their operations, products or work.

Because manufacture and sale of certain partner company products entail an inherent risk of product liability, certain partner companies maintain product liability insurance. Although none of our current partner companies have experienced any material losses in this regard, there can be no assurance that they will be able to maintain or acquire adequate product liability insurance in the future and any product liability claim could have a material adverse effect on a partner company’s financial stability, revenues and results of operations. In addition, many of the engagements of our partner companies involve projects that are critical to the operation of their clients’ businesses. If our partner companies fail to meet their contractual obligations, they could be subject to legal liability, which could adversely affect their business, operating results and financial condition.

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Partner company contracts typically include provisions designed to limit their exposure to legal claims relating to their services and products. However, these provisions may not protect our partner companies or may not be enforceable. Also, some of our partner companies depend on their relationships with their clients and their reputation for high-quality services and integrity to retain and attract clients. As a result, claims made against our partner companies’ work may damage their reputation, which in turn could impact their ability to compete for new work and negatively impact their revenue and profitability.

Our partner companies’ success depends on their ability to attract and retain qualified personnel.

Our partner companies depend upon their ability to attract and retain senior management and key personnel, including trained technical and marketing personnel. Our partner companies also will need to continue to hire additional personnel as they expand. Although our partner companies have not been the subject of a work stoppage, any future work stoppage could have a material adverse effect on their respective operations. A shortage in the availability of the requisite qualified personnel or work stoppage would limit the ability of our partner companies to grow, to increase sales of their existing products and services, and to launch new products and services.

Government regulations and legal uncertainties may place financial burdens on the businesses of our partner companies.

Failure to comply with applicable requirements of the FDA or comparable regulation in foreign countries can result in fines, recall or seizure of products, total or partial suspension of production, withdrawal of existing product approvals or clearances, refusal to approve or clear new applications or notices and criminal prosecution. Manufacturers of pharmaceuticals and medical diagnostic devices and operators of laboratory facilities are subject to strict federal and state regulation regarding validation and the quality of manufacturing and laboratory facilities. Failure to comply with these quality regulation systems requirements could result in civil or criminal penalties or enforcement proceedings, including the recall of a product or a “cease distribution” order. The enactment of any additional laws or regulations that affect healthcare insurance policy and reimbursement (including Medicare reimbursement) could negatively affect some of our partner companies. If Medicare or private payers change the rates at which our partner companies or their customers are reimbursed by insurance providers for their products, such changes could adversely impact our partner companies.

Some of our partner companies may be subject to significant environmental, health and safety regulation.

Some of our partner companies may be subject to licensing and regulation under federal, state and local laws and regulations relating to the protection of the environment and human health and safety, including laws and regulations relating to the handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive materials, as well as to the safety and health of manufacturing and laboratory employees. In addition, the federal Occupational Safety and Health Administration has established extensive requirements relating to workplace safety. Compliance with such regulations could increase operating costs at certain of our partner companies, and the failure to comply could negatively affect the operations and results of some of our partner companies.

Catastrophic events may disrupt our partner companies’ businesses.

Some of our partner companies are highly automated businesses and rely on their network infrastructure, various software applications and many internal technology systems and data networks for their customer support, development, sales and marketing and accounting and finance functions. Further, some of our partner companies provide services to their customers from data center facilities in multiple locations. Some of these data centers are operated by third parties, and the partner companies have limited control over those facilities. A disruption or failure of these systems or data centers in the event of a natural disaster, telecommunications failure, power outage, cyber-attack, war, terrorist attack or other catastrophic event could cause system interruptions, reputational harm, delays in product development, breaches of data security and loss of critical data. Such an event could also prevent the partner companies from fulfilling customer orders or maintaining certain service level requirements, particularly in respect of their SaaS offerings. While certain of our partner companies have developed certain disaster recovery plans and maintain backup systems to reduce the potentially adverse effect of such events, a catastrophic event that resulted in the destruction or disruption of any of their data centers or their critical business or information technology systems could severely affect their ability to conduct normal business operations and, as a result, their business, operating results and financial condition could be adversely affected.

We cannot provide assurance that our partner companies’ disaster recovery plans will address all of the issues they may encounter in the event of a disaster or other unanticipated issue, and their business interruption insurance may not adequately compensate them for losses that may occur from any of the foregoing. In the event that a natural disaster, terrorist attack or other catastrophic event were to destroy any part of their facilities or interrupt their operations for any extended period of time, or if harsh weather or health conditions prevent them from delivering products in a timely manner, their business, financial condition and operating results could be adversely affected.

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Risks Related to Initiatives Outside Our Core Business

Our involvement in the mezzanine lending industry through our relationship with Penn Mezzanine could expose us to risks that differ from, and may be in addition to, to the risks that otherwise relate to our other business initiatives.

Borrowers may default on their payments, which may have a negative effect on our financial performance.

Through our relationship with Penn Mezzanine, we participate in long-term loans and in equity securities primarily in private middle-market companies, which may involve a high degree of repayment risk. These borrowers may have limited financial resources, may be highly leveraged and may be unable to obtain financing from traditional sources. Numerous factors may affect a borrower’s ability to repay its loan, including the failure to meet its business plan, a downturn in its industry or negative economic conditions. A borrower’s failure to satisfy financial or operating covenants imposed by Penn Mezzanine or other lenders could lead to defaults and, potentially, termination of its loans or foreclosure on its secured assets, which could trigger cross defaults under other agreements and jeopardize such borrower’s ability to meet its obligations under the participations in loans or debt interests that we hold. In addition, such borrowers may have, or may be permitted to incur, other debt that ranks senior to or equally with our interests. This means that payments on such senior-ranking securities may have to be made before we receive any payments on our interests in subordinated loans or other debt securities. Deterioration in a borrower’s financial condition and prospects may be accompanied by deterioration in any related collateral and may have a negative effect on our financial results.

We may become subject to additional laws and regulations, including the laws and regulations of other countries, as we engage in platform expansion activities.

In connection with our platform expansion activities, we may manage the deployment of capital that originates other than on our balance sheet, which could include capital originating from international sources. If we were engaged in such activities, we could become subject to additional laws and regulations, including the laws and regulations of countries other than the United States, which could increase our expenses and the costs associated with legal and regulatory compliance as well as the risk of noncompliance.

Subordination

The loans and other vehicles in which we participate will typically be subordinated to the senior obligations of our borrowers (all or a significant portion of which may be secured), either contractually or structurally, in the case of debt securities, or because of the nature of the security, in the case of preferred stock, common stock, warrants or other equity securities. Such subordinated instruments may be characterized by greater credit risk than those associated with senior obligations of the same borrower. Adverse changes in the financial condition of a borrower, general economic conditions, or both may impair the ability of such borrower to make payments on the subordinated instruments and result in defaults on such instruments more quickly than in the case of the senior obligations of such borrower.

Debt securities

Our participation in debt instruments and obligations entails normal credit risks (i.e., the risk of non-payment of interest and principal), as well as other creditor risks, including (i) the possible invalidation of an investment transaction as a “fraudulent conveyance” under relevant creditors’ rights laws, (ii) so-called “lender liability” claims by the borrower, and (iii) environmental liabilities that may arise with respect to collateral securing the obligations. A debt instrument or obligation may also be subject to prepayment or redemption at the option of the borrower. Pursuant to rights granted to Penn Mezzanine by borrowers, Penn Mezzanine will often oversee or play a role in the management of its borrowers. If a court were to find that Penn Mezzanine’s influence on the management of a borrower caused the borrower to take actions that were in Penn Mezzanine’s interests and not in the best interests of the creditors and stockholders of the borrower as a whole, the court could cause Penn Mezzanine’s claims, which normally would be subordinated only to any senior debt of the borrower, to be subordinated to the claims of all creditors of the borrower and, in certain circumstances, the claims of the stockholders. Since we participate in the loans and other transactions entered into by Penn Mezzanine, we would be adversely affected by any such circumstance.

Leverage

Our Penn Mezzanine participations include borrowers with significant levels of debt. Such situations are inherently more sensitive than others to declines in revenues and to increases in expenses and interest rates. The leveraged capital structure of such borrowers will increase the exposure of those borrowers to bad business planning, adverse economic factors (or other factors) such as downturns in the economy or deterioration in the condition of the borrower or its industry. Because these

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participations involve subordinated obligations, among the most junior in a borrower’s capital structure, the inability of a borrower to service its debt obligations could result in a loss of our principal.

Minority positions

The loans in which we participate generally represent minority interests in borrowers. Penn Mezzanine will not likely be able to control or exercise substantial influence over such borrowers.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our corporate headquarters and administrative offices in Wayne, Pennsylvania contain approximately 20,000 square feet of office space in one building. We currently lease our corporate headquarters under a lease expiring in October 2015.

Item 3. Legal Proceedings

We, as well as our partner companies, are involved in various claims and legal actions arising in the ordinary course of business. While in the current opinion of management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position or results of operations, no assurance can be given as to the outcome of these lawsuits, and one or more adverse dispositions could have a material adverse effect on our consolidated financial position and results of operations, or that of our partner companies. See Note 14 to the Consolidated Financial Statements for a discussion of ongoing claims and legal actions.

Item 4. Mine Safety Disclosures

Not Applicable.

ANNEX TO PART I — EXECUTIVE OFFICERS OF THE REGISTRANT

Name	Age	Position	Executive Officer Since
Stephen T. Zarrilli	52	President, Chief Executive Officer and Director	2008
Jeffrey B. McGroarty	44	Senior Vice President and Chief Financial Officer	2012
Brian J. Sisko	53	Chief Operating Officer, Executive Vice President and Managing Director	2007

Mr. Zarrilli joined Safeguard as Senior Vice President and Chief Financial Officer in June 2008 and became President and Chief Executive Officer in November 2012. Prior to joining Safeguard, Mr. Zarrilli co-founded, in 2004, the Penn Valley Group, a middle-market management advisory and private equity firm, and served as a Managing Director there until June 2008. Mr. Zarrilli also served as Acting Senior Vice President, Acting Chief Administrative Officer and Acting Chief Financial Officer of Safeguard from December 2006 to June 2007. Mr. Zarrilli also served as the Chief Financial Officer, from 2001 to 2004, of Fiberlink Communications Corporation, a provider of mobile access solutions for large enterprises; as the Chief Executive Officer, from 2000 to 2001, of Concellera Software, Inc., a developer of content management software; as the Chief Executive Officer, from 1999 to 2000, and Chief Financial Officer, from 1994 to 1998, of US Interactive, Inc. (at the time a public company), a provider of Internet strategy consulting, marketing and technology services (US Interactive filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in January 2001); and, previously, with Deloitte & Touche from 1983 to 1994. Mr. Zarrilli is a director and Chairman of the Audit Committee of NutriSystem, Inc.

Mr. McGroarty joined Safeguard as Vice President and Corporate Controller in December 2005, subsequently became Vice President – Finance and Corporate Controller, and served as Senior Vice President – Finance from November 2012 until his promotion to Senior Vice President and Chief Financial Officer in April 2013. Prior to joining Safeguard, Mr. McGroarty served as Interim Controller of Cephalon, Inc. from October 2005 to December 2005; Vice President-Financial Planning & Analysis and previously Assistant Controller at Exide Technologies from March 2002 to September 2005; and, previously, with PricewaterhouseCoopers from 1991 to 2001.

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Mr. Sisko joined Safeguard as Senior Vice President and General Counsel in August 2007 and served as Executive Vice President and Managing Director from November 2012 until his promotion to Chief Operating Officer, Executive Vice President and Managing Director in January 2014. Prior to joining Safeguard, Mr. Sisko served as Chief Legal Officer, Senior Vice President and General Counsel of Traffic.com (at the time, a public company), a former partner company of Safeguard, from February 2006 until June 2007 (following its acquisition by NAVTEQ Corporation in March 2007); Chief Operating Officer from February 2005 to January 2006 of Halo Technology Holdings, Inc., a public holding company for enterprise software businesses (Halo Technology Holdings filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in August 2007); ran B/T Business and Technology, an advisor and strategic management consultant to a variety of public and private companies, from January 2002 to February 2005; and was a Managing Director from April 2000 to January 2002, of Katalyst, LLC, a venture capital and consulting firm. Mr. Sisko also previously served as Senior Vice President—Corporate Development and General Counsel of National Media Corporation, at the time a New York Stock Exchange-listed multi-media marketing company with operations in 70 countries, and as a partner in the corporate finance, mergers and acquisitions practice group of the Philadelphia-based law firm, Klehr, Harrison, Harvey, Branzburg & Ellers LLP.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Safeguard’s common stock is listed on the New York Stock Exchange (Symbol: SFE). The high and low sale prices reported within each quarter of 2013 and 2012 were as follows:

	High		Low
Fiscal year 2013:
First quarter	$	16.24	$	14.51
Second quarter	18.00		15.20
Third quarter	16.95		14.14
Fourth quarter	20.12		14.92
Fiscal year 2012:
First quarter	$	18.20	$	15.42
Second quarter	18.09		14.51
Third quarter	16.49		14.73
Fourth quarter	16.22		13.15

The high and low sale prices reported in the first quarter of 2014 through March 6, 2014 were $21.38 and $17.58 respectively, and the last sale price reported on March 6, 2014, was $20.31. No cash dividends have been declared in any of the years presented, and Safeguard has no present intention to declare cash dividends.

As of March 6, 2014, there were approximately 18,500 beneficial holders of Safeguard’s common stock.

The following graph compares the cumulative total return on $100 invested in our common stock for the period from December 31, 2008 through December 31, 2013 with the cumulative total return on $100 invested for the same period in the Russell 2000 Index and the Wilshire 4500 Index. In light of the diverse nature of Safeguard’s business and based on our assessment of available published industry or line-of-business indexes, we determined that no single industry or line-of-business index would provide a meaningful comparison to Safeguard. Further, we did not believe that we could readily identify an appropriate group of industry peer companies for this comparison. Accordingly, under SEC rules, we selected the Wilshire 4500 Index, a published market index in which the median market capitalization of the included companies is similar to our own. Safeguard’s common stock is included as a component of the Russell 2000 and Wilshire 4500 indexes.

• Assumes reinvestment of dividends. We have not distributed cash dividends during this period.

• Assumes an investment of $100 on December 31, 2008.

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Issuer Purchases of Equity Securities

The following table summarizes repurchases of our common stock: 

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan (a)
October 1 - 30, 2013	8,100	$	14.9874	8,100	$	25,000,000

(a) Our Board of Directors had authorized us, from time to time and depending on market conditions, to repurchase up to $10.0 million of our outstanding common stock. In February 2014, our Board of Directors increased the authorized amount of repurchases to $25.0 million. These repurchases may be made in open market or privately negotiated transactions, including under plans complying with Rule 10b5-1 of the Exchange Act, based on market conditions, stock price, and other factors. The share repurchase program does not obligate the Company to acquire any specific number of shares.

Item 6. Selected Consolidated Financial Data

The following table sets forth our selected consolidated financial data for the five-year period ended December 31, 2013. The selected consolidated financial data presented below should be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8. Financial Statements and Supplementary Data included in this report. The historical results presented herein may not be indicative of future results. The accounts of Clarient, Inc. are included in continuing operations through May 14, 2009, the date of its deconsolidation.

	December 31,
	2013		2012		2011		2010		2009
	(In thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	139,318	$	66,029	$	83,187	$	183,419	$	67,347
Short-term marketable securities	38,250		110,957		158,098		42,411		39,066
Long-term marketable securities	6,088		29,059		16,287		—		—
Restricted marketable securities	5		10		12,265		16,774		—
Cash held in escrow	—		6,434		6,433		6,434		6,910
Working capital	170,956		178,577		245,420		197,769		105,983
Total assets	345,996		374,144		406,636		336,545		282,099
Convertible senior debentures	49,948		48,991		45,694		75,919		78,225
Other long-term liabilities	3,683		3,921		4,146		5,311		5,461
Total equity	284,661		313,971		348,280		246,431		190,507

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	Year Ended December 31,
	2013			2012			2011			2010			2009
	(In thousands except per share amounts)
Consolidated Statements of Operations Data:
Revenue	$	—		$	—		$	—		$	—		$	34,839
Operating Expenses:
Cost of sales	—			—			—			—			13,811
Selling, general and administrative	21,644			19,473			21,168			20,847			37,214
Total operating expenses	21,644			19,473			21,168			20,847			51,025
Operating loss	(21,644		)	(19,473		)	(21,168		)	(20,847		)	(16,186		)
Other income (loss), net	383			9,338			(6,145		)	74,809			108,881
Interest income	2,646			2,926			1,424			718			480
Interest expense	(4,303		)	(5,636		)	(5,971		)	(5,737		)	(3,164		)
Equity income (loss)	(12,607		)	(26,517		)	142,457			(22,334		)	(23,227		)
Net income (loss) from continuing operations before income taxes	(35,525		)	(39,362		)	110,597			26,609			66,784
Income tax benefit (expense)	—			—			—			—			14
Net income (loss) from continuing operations	(35,525		)	(39,362		)	110,597			26,609			66,798
Income from discontinued operations, net of tax	—			—			—			—			1,975
Net income (loss)	(35,525		)	(39,362		)	110,597			26,609			68,773
Net income attributable to noncontrolling interest	—			—			—			—			(1,163		)
Net income (loss) attributable to Safeguard Scientifics, Inc.	$	(35,525	)	$	(39,362	)	$	110,597		$	26,609		$	67,610
Basic Income (Loss) Per Share:
Net income (loss) from continuing operations attributable to Safeguard Scientifics, Inc. common shareholders	$	(1.66	)	$	(1.88	)	$	5.33		$	1.30		$	3.26
Net income from discontinued operations attributable to Safeguard Scientifics, Inc. common shareholders	—			—			—			—			0.07
Net income (loss) attributable to Safeguard Scientifics, Inc. common shareholders	$	(1.66	)	$	(1.88	)	$	5.33		$	1.30		$	3.33
Shares used in computing basic income (loss) per share	21,362			20,974			20,764			20,535			20,308
Diluted Income (Loss) Per Share:
Net income (loss) from continuing operations attributable to Safeguard Scientifics, Inc. common shareholders	$	(1.66	)	$	(1.88	)	$	4.74		$	1.24		$	3.08
Net income from discontinued operations attributable to Safeguard Scientifics, Inc. common shareholders	—			—			—			—			0.06
Net income (loss) attributable to Safeguard Scientifics, Inc. common shareholders	$	(1.66	)	$	(1.88	)	$	4.74		$	1.24		$	3.14
Shares used in computing diluted income (loss) per share	21,362			20,974			24,522			21,507			22,383

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Concerning Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about Safeguard Scientifics, Inc. (“Safeguard” or “we”), the industries in which we operate and other matters, as well as management's beliefs and assumptions and other statements regarding matters that are not historical facts. These statements include, in particular, statements about our plans, strategies and prospects. For example, when we use words such as “projects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “should,” “would,” “could,” “will,” “opportunity,” “potential” or “may,” variations of such words or other words that convey uncertainty of future events or outcomes, we are making forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Our forward-looking statements are subject to risks and uncertainties. Factors that could cause actual results to differ materially include, among others, our ability to make good decisions about the deployment of capital, the fact that our partner companies may vary from period to period, our substantial capital requirements

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and absence of liquidity from our partner company holdings, fluctuations in the market prices of our publicly traded partner company holdings, competition, our inability to obtain maximum value for our partner company holdings, our ability to attract and retain qualified employees, our ability to execute our strategy, market valuations in sectors in which our partner companies operate, our inability to control our partner companies, our need to manage our assets to avoid registration under the Investment Company Act of 1940, and risks associated with our partner companies and their performance, including the fact that most of our partner companies have a limited history and a history of operating losses, face intense competition and may never be profitable, the effect of economic conditions in the business sectors in which our partner companies operate, compliance with government regulation and legal liabilities, all of which are discussed in Item 1A. “Risk Factors.” Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by this cautionary statement. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report might not occur.

Overview

Safeguard’s charter is to build value in growth-stage businesses by providing capital as well as strategic, operational and management resources. Safeguard participates principally in growth and expansion financings, and early-stage financings. Our vision is to be the preferred capital source for entrepreneurs and management teams in well-defined industry sectors.

We strive to create long-term value for our shareholders by helping our partner companies increase their market penetration, grow revenue and improve cash flow. Safeguard focuses principally on companies with initial capital requirements of between $5 million and $15 million, and follow-on financing needs of between $5 million and $10 million, with a total anticipated deployment of up to $25 million from Safeguard. Safeguard principally targets companies that operate in two sectors:

Healthcare — companies focused on medical technology (“MedTech”), including diagnostics and devices; healthcare technology (“HealthTech”); and specialty pharmaceuticals. Within these areas, Safeguard targets companies that have lesser regulatory risk and have achieved or are near commercialization; and

Technology — companies focused on digital media; financial technology (“FinTech”); and Enterprise 3.0, which includes mobile technology, cloud, the “Internet of Things” and big data. Within these areas, Safeguard targets companies that have transaction-enabling applications with a recurring revenue stream.

Principles of Accounting for Ownership Interests in Partner Companies

We account for our interests in our partner companies and private equity funds using one of the following methods: consolidation, fair value, equity, cost or available-for-sale. The accounting method applied is generally determined by the degree of our influence over the entity, primarily determined by our voting interest in the entity.

Consolidation Method. We account for partner companies in which we maintain a controlling financial interest, generally those in which we directly or indirectly own more than 50% of the outstanding voting securities, using the consolidation method of accounting. Upon consolidation of our partner companies, we reflect the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to the parent company as a non-controlling interest in the Consolidated Balance Sheet. The non-controlling interest is presented within equity, separately from the equity of the parent company. Losses attributable to the parent company and the non-controlling interest may exceed their interest in the subsidiary’s equity. As a result, the non-controlling interest shall continue to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance as of each balance sheet date. Revenue, expenses, gains, losses, net income or loss are reported in the Consolidated Statements of Operations at the consolidated amounts, which include the amounts attributable to the parent company’s common shareholders and the non-controlling interest. As of December 31, 2013 and for each of the three years in the period then ended, we did not hold a controlling interest in any of our partner companies.

Fair Value Method. We account for our holdings in NuPathe, a publicly traded partner company, under the fair value method of accounting. Unrealized gains and losses on the mark-to-market of our holdings in fair value method companies and realized gains and losses on the sale of any holdings in fair value method companies are recognized in Other income (loss), net in the Consolidated Statements of Operations.

Equity Method. We account for partner companies whose results are not consolidated, but over whom we exercise significant influence, using the equity method of accounting. We also account for our interests in some private equity funds under the equity method of accounting, based on our non-controlling general and limited partner interests. Under the equity

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method of accounting, our share of the income or loss of the partner company is reflected in Equity income (loss) in the Consolidated Statements of Operations. We report our share of the income or loss of the equity method partner companies on a one quarter lag. We include the carrying value of equity method partner companies in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

When the carrying value of our holdings in an equity method partner company is reduced to zero, no further losses are recorded in our Consolidated Statements of Operations unless we have outstanding guarantee obligations or have committed additional funding to the equity method partner company. When the equity method partner company subsequently reports income, we will not record our share of such income until it equals the amount of our share of losses not previously recognized.

Cost Method. We account for partner companies which are not consolidated or accounted for under the equity method or fair value method under the cost method of accounting. Under the cost method, our share of the income or losses of such partner companies is not included in our Consolidated Statements of Operations. We include the carrying value of cost method partner companies in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

Critical Accounting Policies and Estimates

Accounting policies, methods and estimates are an integral part of the Consolidated Financial Statements prepared by management and are based upon management’s current judgments. These judgments are normally based on knowledge and experience with regard to past and current events and assumptions about future events. Certain accounting policies, methods and estimates are particularly important because of their significance to the financial statements and because of the possibility that future events affecting them may differ from management’s current judgments. While there are a number of accounting policies, methods and estimates affecting our financial statements as described in Note 1 to our Consolidated Financial Statements, areas that are particularly significant include the following:

• Impairment of ownership interests in and advances to partner companies and funds;

• Accounting for participating interests in mezzanine loans receivable and related equity interests;

• Income taxes;

• Commitments and contingencies; and

• Stock-based compensation.

Impairment of Ownership Interests In and Advances to Partner Companies and Funds

On a periodic basis, but no less frequently than at the end of each quarter, we evaluate the carrying value of our equity and cost method partner companies and available-for-sale securities for possible impairment based on achievement of business plan objectives and milestones, the financial condition and prospects of the company, market conditions and other relevant factors. The business plan objectives and milestones we consider include, among others, those related to financial performance, such as achievement of planned financial results or completion of capital raising activities, and those that are not primarily financial in nature, such as hiring of key employees or the establishment of strategic relationships. We then determine whether there has been an other than temporary decline in the value of our ownership interest in the company. For our equity and cost method partner companies, impairment to be recognized is measured as the amount by which the carrying value of an asset exceeds its fair value. The adjusted carrying value of a partner company is not increased if circumstances suggest the value of the partner company has subsequently recovered.

The fair value of privately held partner companies is generally determined based on the value at which independent third parties have invested or have committed to invest in these companies, or based on other valuation methods including discounted cash flows, valuations of comparable public companies and valuations of acquisitions of comparable companies. The fair value of our ownership interests in private equity funds is generally determined based on the fair value of our pro rata portion of the funds’ net assets and estimated future proceeds from sales of investments provided by the funds’ managers. The fair value of our ownership interests in our publicly traded partner companies is determined by reference to quoted prices in an active market for the partner company’s publicly traded common stock.

Our partner companies operate in industries which are rapidly evolving and extremely competitive. It is reasonably possible that our accounting estimates with respect to the ultimate recoverability of the carrying value of ownership interests in and advances to partner companies and funds could change in the near term and that the effect of such changes on our Consolidated Financial Statements could be material. While we believe that the current recorded carrying values of our equity and cost method companies and available-for-sale securities are not impaired, there can be no assurance that our future results will confirm this assessment or that a significant write-down or write-off will not be required in the future.

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Total impairment charges related to ownership interests in and advances to our equity and cost method partner companies and funds and available-for-sale securities were as follows:

	Year Ended December 31,
Accounting Method	2013		2012		2011
	(In millions)
Equity	$	12.9	$	5.0	$	7.1
Cost	0.3		0.4		—
Available-for-sale	—		0.3		7.5
Total	$	13.2	$	5.7	$	14.6

Impairment charges related to equity method partner companies and funds are included in Equity income (loss) in the Consolidated Statements of Operations. Impairment charges related to cost method and available-for-sale partner companies and funds are included in Other income (loss), net in the Consolidated Statements of Operations.

Accounting for Participating Interests in Mezzanine Loans Receivable and Related Equity Interests

Through our relationship with Penn Mezzanine, we have acquired participating interests in mezzanine loans and related equity interests of the borrowers. In certain instances, these interests also included warrants to purchase common stock of the borrowers. Our accounting policies for these participating interests are as follows:

Loan Participations Receivable

Our participating interests in Penn Mezzanine loans are included in Loan participations receivable on the Consolidated Balance Sheets. On a periodic basis, but no less frequently than at the end of each quarter, we evaluate the carrying value of each loan participation receivable for impairment. A loan participation receivable is considered impaired when it is probable that we will be unable to collect all amounts (principal and interest) due according to the contractual terms of the participation agreement and related agreements with the borrowers. We maintain an allowance to provide for estimated loan losses based on evaluating known and inherent risks in the loans. The allowance is provided based upon our analysis of the pertinent factors underlying the quality of the loans. These factors include an analysis of the financial condition of the borrowers, delinquency levels, actual loan loss experience, current economic conditions and other relevant factors. Our analysis includes methods to estimate the fair value of loan collateral and the existence of potential alternative sources of repayment. We do not accrue interest when a loan is considered impaired. All cash receipts from impaired loans are applied to reduce the original principal amount of such loan, until the principal has been fully recovered and would be recognized as interest income thereafter. The allowance for loan losses at December 31, 2013 and 2012 was $2.3 million and $2.0 million, respectively.

Equity Participations

Our participations in equity interests acquired by Penn Mezzanine are accounted for under the cost method of accounting. On a periodic basis, but no less frequently than at the end of each quarter, we evaluate the carrying value of our participations in these equity interests for possible impairment based on achievement of business plan objectives and milestones, the fair value the equity interests relative to their carrying value, the financial condition and prospects of the underlying company and other relevant factors. Our participating interests in equity interests acquired by Penn Mezzanine are included in Other assets on the Consolidated Balance Sheets.

Warrant Participations

We recognize our participations in warrants acquired by Penn Mezzanine based on the fair value of the warrants at the balance sheet date. The fair values of warrant participations are bifurcated from the related loan participations receivables based on the relative fair value of the respective instruments at the acquisition date. Any gain or loss associated with changes in the fair value of the warrants at the balance sheet date is recorded in Other income (loss), net in the Consolidated Statements of Operations. The fair value of the warrants is included in Other assets on the Consolidated Balance Sheets.

Income Taxes

We are required to estimate income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our Consolidated Balance Sheets. We must assess the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent that we believe recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance in a period, we must include an expense within the tax provision in the Consolidated Statements of Operations. We have recorded a valuation allowance to reduce our deferred tax assets to an amount that is more

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likely than not to be realized in future years. If we determine in the future that it is more likely than not that the net deferred tax assets would be realized, then the previously provided valuation allowance would be reversed.

Commitments and Contingencies

From time to time, we are a defendant or plaintiff in various legal actions which arise in the normal course of business. Additionally, we have received distributions as both a general partner and a limited partner from private equity funds. In certain circumstances, we may be required to return a portion or all the distributions we received as a general partner of a fund for a further distribution to such fund’s limited partners (“clawback”). We are also a guarantor of various third-party obligations and commitments and are subject to the possibility of various loss contingencies arising in the ordinary course of business (see Note 14 to our Consolidated Financial Statements). We are required to assess the likelihood of any adverse outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of provision required for these commitments and contingencies, if any, which would be charged to earnings, is made after careful analysis of each matter. The provision may change in the future due to new developments or changes in circumstances. Changes in the provision could increase or decrease our earnings in the period the changes are made.

Stock-Based Compensation

We measure all employee stock-based compensation awards using a fair value method and record such expense in our Consolidated Statements of Operations.

We estimate the grant date fair value of stock options using the Black-Scholes option-pricing model which requires the input of various assumptions. These assumptions include estimating the expected term of the award and the estimated volatility of our stock price over the expected term. Changes in these assumptions and in the estimated forfeitures of stock option awards can materially affect the amount of stock-based compensation recognized in the Consolidated Statements of Operations. The requisite service periods for market-based stock option awards are based on our estimate of the dates on which the market conditions will be met as determined using a Monte Carlo simulation model. Changes in the derived requisite service period or achievement of market capitalization targets earlier than estimated can materially affect the amount of stock-based compensation recognized in the Consolidated Statements of Operations. The requisite service periods for performance-based awards are based on our best estimate of when the performance conditions will be met. Compensation expense is recognized for performance-based awards for which the performance condition is considered probable of achievement. Changes in the requisite service period or the estimated probability of achievement of performance conditions can materially affect the amount of stock-based compensation recognized in the Consolidated Statements of Operations in any one period.

Results of Operations

The results of operations of all of our partner companies are reported in our Healthcare and Technology segments. The Healthcare and Technology segments also include the gain or loss on the sale of interests in our respective partner companies.

Our management evaluates the Healthcare and Technology segments’ performance based on equity income (loss) which is based on the number of partner companies accounted for under the equity method, our voting ownership percentage in these partner companies and the net results of operations of these partner companies and Other income or loss associated with cost method partner companies.

Our management evaluates the Penn Mezzanine segment performance based in part on the performance of the debt and equity interests in which we participate. This includes an evaluation of the future cash flows associated with interest and dividend payments as well as estimated losses based on evaluating known and inherent risks in the debt and equity interests in which we participate.

Other items include certain expenses, which are not identifiable to the operations of our operating business segments. Other items primarily consist of general and administrative expenses related to corporate operations, including employee compensation, insurance and professional fees, interest income, interest expense, other income (loss) and equity income (loss) related to private equity holdings. Other items also include income taxes, which are reviewed by management independent of segment results.

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The following tables reflect our consolidated operating data by reportable segment. Segment results include our share of income or losses for entities accounted for under the equity method, when applicable. Segment results also include impairment charges and gains or losses related to the disposition of interests in partner companies. All significant inter-segment activity has been eliminated in consolidation. Our operating results, including net income (loss) before income taxes by segment, were as follows:

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Healthcare	$	(32,563	)	$	(6,660	)	$	114,063
Technology	20,899			(119		)	21,478
Penn Mezzanine	888			(1,136		)	139
Total segments	(10,776		)	(7,915		)	135,680
Other items:
Corporate operations	(24,749		)	(31,447		)	(25,083		)
Income tax benefit (expense)	—			—			—
Total other items	(24,749		)	(31,447		)	(25,083		)
Net income (loss)	$	(35,525	)	$	(39,362	)	$	110,597

There is intense competition in the markets in which our partner companies operate. Additionally, the markets in which these companies operate are characterized by rapidly changing technology, evolving industry standards, frequent introduction of new products and services, shifting distribution channels, evolving government regulation, frequently changing intellectual property landscapes and changing customer demands. Their future success depends on each company’s ability to execute its business plan and to adapt to its respective rapidly changing markets.

As previously stated, throughout this document, we use the term “partner company” to generally refer to those companies in which we have an economic interest and in which we are actively involved influencing development, usually through board representation in addition to our equity ownership.

The following listings of our Healthcare and Technology partner companies only include entities which were considered partner companies as of December 31, 2013. Certain entities which may have been partner companies in previous periods are omitted if, as of December 31, 2013, they had been sold or are no longer considered a partner company.

Healthcare

The following active partner companies as of December 31, 2013 were included in Healthcare:

	Safeguard Primary Ownership as of December 31,
Partner Company	2013	2012	2011	Accounting Method
AdvantEdge Healthcare Solutions, Inc.	40.1%	40.2%	40.2%	Equity
Alverix, Inc.	48.5%	49.2%	49.6%	Equity
Crescendo Bioscience, Inc.	12.6%	12.6%	NA	Cost
Dabo Health, Inc.	8.0%	NA	NA	Cost
Good Start Genetics, Inc.	30.0%	30.0%	26.3%	Equity
Medivo, Inc.	34.5%	30.0%	30.0%	Equity
NovaSom, Inc.	30.3%	30.3%	30.3%	Equity
NuPathe Inc.	16.5%	17.8%	17.8%	Fair value (1)
Putney, Inc.	27.6%	27.6%	27.6%	Equity
Quantia, Inc.	35.1%	NA	NA	Equity
Sotera Wireless, Inc.	7.3%	NA	NA	Cost

(1) Our ownership interest in NuPathe was accounted for as available-for-sale securities following NuPathe’ s completion of an initial public offering in August 2010. In October 2012, we participated in a private placement of NuPathe

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preferred stock units, and in conjunction with this financing we placed two persons on NuPathe’s board of directors. As a result, we determined that we exercised significant influence over NuPathe which made the equity method of accounting applicable to our ownership interests. Instead, we elected the fair value option beginning in October 2012.

Results for the Healthcare segment were as follows:

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Other income (loss), net	$	(857	)	$	19,884		$	(7,236	)
Equity income (loss)	(31,706		)	(26,544		)	121,299
Net income (loss)	$	(32,563	)	$	(6,660	)	$	114,063

Year ended December 31, 2013 versus year ended December 31, 2012

Other Income (Loss), Net. Other income (loss), net decreased $20.7 million for the year ended December 31, 2013, compared to the prior year. Other income (loss), net for the year ended December 31, 2013 reflected a $0.9 million unrealized loss on the mark-to-market of our holdings in NuPathe. Other income (loss), net for the year ended December 31, 2012 reflected an $11.0 million unrealized gain on the mark-to-market of our holdings in NuPathe, a $3.4 million gain recorded in connection with the expiration of the escrow period associated with the sale of former partner company Avid Radiopharmaceuticals, Inc. (“Avid”) to Eli Lilly and Company in December 2010, as well as a $5.6 million gain related to the achievement of the initial milestone associated with the Avid transaction. These gains were partially offset by an impairment charge of $0.3 million on our holdings in Tengion, Inc.

Equity Income (Loss). Equity income (loss) fluctuates with the number of Healthcare partner companies accounted for under the equity method, our voting ownership percentage in these partner companies and the net results of operations of these partner companies. We recognize our share of losses to the extent we have cost basis in the equity of the partner company or we have outstanding commitments or guarantees. Certain amounts recorded to reflect our share of the income or losses of our partner companies accounted for under the equity method are based on estimates and on unaudited results of operations of those partner companies and may require adjustments in the future when audits of these entities are made final. We report our share of the results of our equity method partner companies on a one quarter lag basis.

Equity loss for the Healthcare segment increased $5.2 million for the year ended December 31, 2013, compared to the prior year. We recognized an impairment charge of $11.2 million related to PixelOptics, Inc. in the year ended December 31, 2013. The impairment in 2013 was based on our decision to deploy no additional capital in PixelOptics and PixelOptics' inability to raise additional capital from sources to continue its operations. On November 4, 2013, PixelOptics filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. We recognized an impairment charge of $5.0 million related to PixelOptics in the year ended December 31, 2012. The impairment in 2012 was related to launch delays and related supply chain issues as well as the pricing of a transaction between other institutional shareholders in PixelOptics. The net increase in impairment charges was partially offset by smaller losses incurred by partner companies in the Healthcare segment in the year ended December 31, 2013 as compared to the year ended December 31, 2012.

Year ended December 31, 2012 versus year ended December 31, 2011

Other Income (Loss), Net. Other income (loss), net increased $27.1 million for the year ended December 31, 2012, compared to the prior year. Other income (loss), net for the year ended December 31, 2012 reflected an $11.0 million unrealized gain on the mark-to-market of our holdings in NuPathe accounted for under the fair value option, a $3.4 million gain recorded in connection with the expiration of the escrow period associated with the sale of Avid, as well as a $5.6 million gain related to the achievement of the initial milestone associated with the Avid transaction. These gains were partially offset by an impairment charge of $0.3 million on our holdings in former partner company Tengion. The loss in 2011 primarily related to impairment charges of $5.9 million and $1.5 million on our holdings in NuPathe and Tengion, respectively.

Equity Income (Loss). Equity income (loss) for the Healthcare segment decreased $147.8 million for the year ended December 31, 2012, compared to the prior year. The prior year period included a gain of $129.3 million on the sale of former partner company Advanced BioHealing, Inc. to Shire plc in June 2011.The year ended December 31, 2011 also included the equity income of Advanced BioHealing. The year ended December 31, 2012 included impairment charges totaling $5.0 million related to PixelOptics. The remaining decrease was primarily due to an increase in the number of partner companies included in the Healthcare segment, all of which incurred net losses as well as larger losses compared to the year ended December 31, 2011 for certain companies within the Healthcare segment.

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Technology

The following active partner companies as of December 31, 2013 were included in Technology:

	Safeguard Primary Ownership as of December 31,
Partner Company	2013	2012	2011	Accounting Method
AppFirst, Inc.	34.3%	35.0%	NA	Equity
Apprenda, Inc.	22.0%	NA	NA	Equity
Beyond.com, Inc.	38.2%	38.3%	38.3%	Equity
Bridgevine, Inc.	22.7%	21.7%	22.8%	Equity
Clutch Holdings, Inc.	24.0%	NA	NA	Equity
DriveFactor, Inc.	40.6%	35.4%	23.9%	Equity
Hoopla Software, Inc.	25.3%	25.3%	28.0%	Equity
Lumesis, Inc.	44.2%	31.6%	NA	Equity
MediaMath, Inc.	22.5%	22.2%	22.4%	Equity
Pneuron Corporation	27.6%	NA	NA	Equity
Spongecell, Inc.	23.0%	23.1%	NA	Equity

Results for the Technology segment were as follows:

	Year Ended December 31,
	2013		2012			2011
	(In thousands)
Other income, net	$	—	$	—		$	24
Equity income (loss)	20,899		(119		)	21,454
Net income (loss)	$	20,899	$	(119	)	$	21,478

Year ended December 31, 2013 versus year ended December 31, 2012

Equity Income (Loss). Equity income (loss) fluctuates with the number of Technology partner companies accounted for under the equity method, our voting ownership percentage in these partner companies and the net results of operations of these partner companies. We recognize our share of losses to the extent we have cost basis in the equity partner company or we have outstanding commitments or guarantees. Certain amounts recorded to reflect our share of the income or losses of our partner companies accounted for under the equity method are based on estimates and on unaudited results of operations of those partner companies and may require adjustments in the future when audits of these entities are made final. We report our share of the results of our equity method partner companies on a one quarter lag.

Equity income (loss) for the Technology segment increased $21.0 million for the year ended December 31, 2013, compared to the prior year. The increase primarily related to the recognition of a gain of $32.7 million on the sale of former partner company ThingWorx, Inc. to PTC, Inc. in December 2013. The year ended December 31, 2012 included gains of $3.4 million and $1.9 million associated with the receipt of the escrowed proceeds and the achievement of performance milestones related to the sale of former partner company, Portico Systems, Inc. ("Portico"), respectively. The year ended December 31, 2012 also included a gain of $0.6 million related to a payment received upon the liquidation of former partner company SafeCentral, Inc. The increase was partially offset by an increase in the number of partner companies included within the Technology segment, all of which incurred net losses.

Year ended December 31, 2012 versus year ended December 31, 2011

Equity Income (Loss). Equity income (loss) for the Technology segment decreased $21.6 million for the year ended December 31, 2012, compared to the prior year. The year ended December 31, 2012 included gains of $3.4 million and $1.9 million associated with the receipt of the escrowed proceeds and the achievement of performance milestones related to the sale of Portico, respectively. The year ended December 31, 2012 also included a gain of $0.6 million related to a payment received upon the liquidation of SafeCentral. During 2011, we recognized a gain of $35.4 million on the sale of our former partner company Portico. The gain was partially offset by impairment charges of $5.7 million related to Swap.com and $1.4 million related to SafeCentral, former partner companies. The decrease was partially offset by smaller losses incurred at partner companies within the Technology segment.

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Penn Mezzanine

Results for the Penn Mezzanine segment were as follows:

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
General and administrative expense	$	(15	)	$	(10	)	$	—
Interest income	1,506			1,505			210
Other income (loss), net	1,493			(2,314		)	—
Equity loss	(2,096		)	(317		)	(71		)
Net income (loss)	$	888		$	(1,136	)	$	139

Results of the Penn Mezzanine segment include interest, dividends, loan origination and other fees earned on the mezzanine interests in which we participate, any impairment on our debt and equity participation interests as well as equity income (loss) associated with our interest in the management company and general partner of Penn Mezzanine. As of December 31, 2013, we had a participation in eight loans and eight equity participation interests initiated by Penn Mezzanine. During the year ended December 31, 2013, we funded $2.3 million for participations in loan and equity interests initiated by Penn Mezzanine. Included in this funding were $2.2 million for participation in loans and $0.1 million for participation in equity of the borrower acquired by Penn Mezzanine.

Year ended December 31, 2013 versus year ended December 31, 2012

Other Income (Loss), Net. Other income (loss), net for Penn Mezzanine increased $3.8 million in the year ended December 31, 2013 compared to the prior year. During the year ended December 31, 2013, we recorded a gain on the sale of one of our Penn Mezzanine equity interest participations of $0.5 million and recorded a gain of $1.1 million on the mark-to-market of our warrant participations. The increase was partially offset by an impairment charge associated with our equity and loan participations of $0.3 million recognized in the year ended December 31, 2013. During the year ended December 31, 2012, we recorded impairment charges totaling $2.5 million associated with our equity, warrant and loan participations of $0.4 million, $0.1 million and $2.0 million, respectively. In addition, we recorded a gain of $0.2 million on the mark-to-market of our warrant participations.

Equity Loss. Equity loss increased $1.8 million in the year ended December 31, 2013 compared to the prior year. During the quarter ended December 31, 2013, we recorded an impairment charge of $1.8 million associated with our interest in the management company of Penn Mezzanine. We decided that we will not acquire participating interests in any new Penn Mezzanine lending activities.

General and administrative expense and interest income remained consistent in the current year compared to the prior year. We anticipate interest income will decrease in future periods as participating interests in existing mezzanine loans are repaid.

Year ended December 31, 2012 versus year ended December 31, 2011

Other Income (Loss), Net. During the year ended December 31, 2012, we recorded impairment charges totaling $2.5 million associated with our equity, warrant and loan participations of $0.4 million, $0.1 million and $2.0 million, respectively. In addition, we recorded a gain of $0.2 million on the market-to-market of our warrant participations.

Interest Income. Interest income increased $1.3 million due to the funding of $3.8 million for participation in loans during the year ended December 31, 2012. Additionally, from the acquisition of our ownership interest in Penn Mezzanine in August 2011 through the year ended December 31, 2011, we funded $8.1 million for participations in loans which earned interest throughout 2012.

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Corporate Operations

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
General and administrative expense	$	(19,716	)	$	(17,341	)	$	(17,992	)
Stock-based compensation	(1,821		)	(2,014		)	(3,052		)
Depreciation	(92		)	(108		)	(124		)
Interest income	1,140			1,421			1,214
Interest expense	(4,303		)	(5,636		)	(5,971		)
Other income (loss), net	(253		)	(8,232		)	1,067
Equity income (loss)	296			463			(225		)
	$	(24,749	)	$	(31,447	)	$	(25,083	)

Year ended December 31, 2013 versus year ended December 31, 2012

General and Administrative Expense. Our general and administrative expenses consist primarily of employee compensation, insurance, travel-related costs, office rent and professional services such as consulting, legal and accounting. General and administrative expenses increased $2.4 million for the year ended December 31, 2013 compared to the prior year primarily due to an increase of $1.6 million in costs associated with a transitional services agreement with our previous Chief Executive Officer and severance expense of $0.9 million related to another former executive.

Stock-Based Compensation. Stock-based compensation consists primarily of expense related to grants of stock options, restricted stock and deferred stock units to our employees and directors. Stock-based compensation decreased $0.2 million for the year ended December 31, 2013, compared to the prior year due to a $0.2 million decrease in expense related to market-based awards and a $0.2 million decrease in expense related to performance-based awards, which were partially offset by a $0.2 million increase in expense related to service-based awards.

Interest Income. Interest income includes all interest earned on cash and marketable securities balances as well as interest earned on note receivable balances from our partner companies. Interest income decreased $0.3 million for the year ended December 31, 2013, compared to the prior year. The decrease is primarily attributable to lower average cash and marketable securities balances as well as lower average note receivable balances with our partner companies as compared to the prior year.

Interest Expense. Interest expense is primarily related to our convertible senior debentures. The decrease in interest expense of $1.3 million in the year ended December 31, 2013 compared to the prior year is due to a lower coupon rate of 5.25% payable on our 2018 Debentures compared to a coupon rate of 10.125% payable on our 2014 Debentures, which were substantially repaid in November 2012.

Other Income (Loss), Net. Other income (loss), net for the year ended December 31, 2013 included impairment charges of $0.3 million related to our interest in a legacy private equity fund. Other income (loss), net, for the year ended December 31, 2012 reflected a $7.9 million loss on the repurchase of substantially all of our 2014 Debentures and an impairment charge of $0.4 million related to our interest in a legacy private equity fund.

Equity Income (Loss). Equity income (loss) consists of our private equity holdings accounted for under the equity method. Equity income (loss) for the year ended December 31, 2013 included a $0.3 million gain upon distribution from one of our private equity holdings. Equity income (loss) for the year ended December 31, 2012 included a $0.5 million gain upon distribution from one of our private equity holdings.

Year ended December 31, 2012 versus year ended December 31, 2011

General and Administrative Expense. General and administrative expenses decreased $0.7 million for the year ended December 31, 2012 compared to the prior year primarily due to a $1.0 million decrease in employee costs and a decrease in severance costs of $0.2 million, partially offset by an increase in professional fees expense of $0.6 million.

Stock-Based Compensation. Stock-based compensation decreased $1.0 million for the year ended December 31, 2012, compared to the prior year primarily due to a $0.8 million decrease in expense related to market-based awards, a $0.1 million decrease in expense related to performance-based awards and a $0.1 million decrease in expense related to service-based awards.

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Interest Income. Interest income increased $0.2 million for the year ended December 31, 2012, compared to the prior year. The increase was primarily due to higher average note receivable balances with our partner companies.

Interest Expense. The decrease in interest expense of $0.3 million for the year ended December 31, 2012, compared to the prior year is due to the lower coupon rate of 5.25% payable on our 2018 Debentures for part of the year in 2012 compared to a full year of the higher coupon rate of 10.125% payable on our 2014 Debentures during 2011.

Other Income (Loss), Net. Other income (loss), net for the year ended December 31, 2012 reflected a $7.9 million loss on the repurchase of substantially all of our 2014 Debentures and an impairment charge of $0.4 million related to our interest in a legacy private equity fund. Other income (loss), net for the year ended December 31, 2011 included the release of $1.0 million from accrued expenses due to the expiration of a contingency period associated with a clawback liability in one of our private equity funds, in accordance with the terms of the partnership agreement related to that fund.

Equity Income (Loss). Equity income (loss) for the year ended December 31, 2012 included a $0.5 million gain upon distribution from one of our private equity holdings. Equity income (loss) for the year ended December 31, 2011 included a $0.2 million equity loss associated with one of our private equity holdings.

Income Tax Benefit (Expense)

Our consolidated net income tax (expense) benefit for 2013, 2012 and 2011 was $0.0 million in each year. We have recorded a valuation allowance to reduce our net deferred tax asset to an amount that is more likely than not to be realized in future years. Accordingly, the income tax (expense) benefit that would have been recognized in each year was offset by changes in the valuation allowance.

Liquidity And Capital Resources

We fund our operations with cash on hand as well as proceeds from sales of and distributions from partner companies, private equity funds and marketable securities. In prior periods, we have also used sales of our equity and the issuance of debt as sources of liquidity and may do so in the future. Our ability to generate liquidity from sales of partner companies, sales of marketable securities and from equity and debt issuances has been adversely affected from time to time by adverse circumstances in the U.S. capital markets and other factors.

As of December 31, 2013, we had $139.3 million of cash and cash equivalents and $44.3 million of marketable securities for a total of $183.6 million.

In February 2014, Crescendo Bioscience was acquired by Myriad Genetics, Inc. We received $38.4 million in cash proceeds in connection with the transaction, excluding $3.2 million which will be held in escrow for 15 months.

In February 2014, NuPathe was acquired by Teva Pharmaceutical Industries Ltd. for $3.65 per share in cash. In addition to the upfront cash payment, NuPathe shareholders received rights to receive additional cash payments of up to $3.15 per share if specified milestones are achieved over time. We received initial net cash proceeds of $23.1 million as a result of the transaction. Depending on the achievement of the milestones, we may receive up to an additional $24.2 million.

In January 2014, Alverix was acquired by Becton, Dickinson and Company. We received cash proceeds of $15.7 million, excluding $1.7 million which will be held in escrow for approximately 18 months.

In December 2013, ThingWorx was acquired by PTC Inc. We received cash proceeds of $36.4 million, excluding $4.1 million which will be held in escrow until December 30, 2015. Depending on the achievement of certain milestones, we may receive up to an additional $6.5 million in connection with the transaction.

We have not recognized on our Consolidated Balance Sheets $7.6 million held in escrow related to the sale of Advanced BioHealing, Inc. to Shire plc in June 2011. Prior to the expiration of the escrow period in March 2012, Shire plc filed a claim against the escrowed funds. No further proceeds will be distributed to us or other former owners until the validity of such claims is determined. We presently view it as unlikely that we will receive any portion of such amount in the short or long-term.

In April 2012, we received $3.4 million in connection with the expiration of the escrow period associated with the sale of Avid in December 2010. Also in April 2012, a regulatory milestone associated with the Avid transaction was achieved which resulted in $5.6 million of additional proceeds being paid to us in the second quarter of 2012. In addition, depending on the achievement of certain difficult commercial and regulatory milestones, we could receive additional proceeds of up to $54.0 million by the end of 2018. We presently view it as unlikely that we will receive any significant portion of such amount in the short or long-term.

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In connection with the May 2008 sale of our equity and debt interests in our former partner company, Acsis, Inc., Alliance Consulting Group Associates, Inc., Laureate Biopharma, Inc., ProModel Corporation and Neuronyx, Inc. (the “Bundle Transaction”), an aggregate of $6.4 million of the gross proceeds of the sale were placed in escrow. The purchaser in the Bundle Transaction asserted claims against the entire escrowed amounts. In April 2013, the claim against the escrow was tried on the merits and the verdict in the case denied the purchaser’s claims against the escrowed funds.  The $6.4 million in escrow was subsequently released to us in June 2013.

We have outstanding $55.0 million in face amount of our 5.25% convertible senior debentures due 2018. Net proceeds from the issuance of the 2018 Debentures in November 2012 were used to repurchase substantially all of our 2014 Debentures. Interest on the 2018 Debentures is payable semi-annually. At the debentures holders’ option, the 2018 Debentures are convertible into our common stock prior to November 15, 2017 subject to certain conditions, and at any time after November 15, 2017. The conversion rate of the 2018 Debentures is $18.13 of principal amount per share. The closing price per share of our common stock at December 31, 2013 was $20.09. The 2018 Debentures holders have the right to require us to repurchase the 2018 Debentures if we undergo a fundamental change as defined in the debenture agreement, including the sale of all or substantially all of our common stock or assets, liquidation, or dissolution; a change in control, the delisting of our common stock from the New York Stock Exchange or the NASDAQ Global Market (or any of their respective successors); or a substantial change in the composition of our board of directors as defined in the agreement. On or after November 15, 2016, we may redeem for cash some or all of the debentures, subject to certain conditions. Upon any redemption of the 2018 Debentures, we will pay a redemption price of 100% of their principal amount, plus accrued and unpaid interest. Upon the conversion of the 2018 Debentures we have the right to settle the conversion in stock, cash or a combination thereof.

In addition to the 2018 Debentures discussed above, we had $0.4 million of 2024 Debentures and $29 thousand of 2014 Debentures outstanding at December 31, 2013. Interest on the 2024 and 2014 Debentures is payable semi-annually, and the remainder of the outstanding principal amount of the 2014 Debentures is due and payable in full on March 15, 2014.

Our Board of Directors had authorized us, from time to time and depending on market conditions, to repurchase up to $10.0 million of our outstanding common stock. Purchases in the amount of eight thousand shares had been made under the authorization through December 31, 2013. In February 2014, our Board of Directors increased the authorized amount of repurchases to $25.0 million.

We are party to a loan agreement with a commercial bank which provides us with a revolving credit facility in the maximum aggregate amount of $50 million in the form of borrowings, guarantees and issuances of letters of credit (subject to a $20 million sublimit). Actual availability under the credit facility is based on the amount of cash maintained at the bank as well as the value of our public and private partner company interests. This credit facility bears interest at the prime rate for outstanding borrowings, subject to an increase in certain circumstances. Other than for limited exceptions, we are required to maintain all of our depository and operating accounts and the lesser of $80 million or 75% of our investment and securities accounts at the bank. The credit facility, as amended, matures on December 31, 2014. Under the credit facility, we provided a $6.3 million letter of credit expiring on March 19, 2019 to the landlord of CompuCom Systems, Inc.’s Dallas headquarters which was required in connection with our sale of CompuCom Systems in 2004. Availability under our revolving credit facility at December 31, 2013 was $43.7 million.

At December 31, 2013, we had committed capital of approximately $0.1 million to a private equity fund. This commitment is expected to be funded in the next 12 months.

The transactions we enter into in pursuit of our strategy could increase or decrease our liquidity at any point in time. As we seek to acquire interests in new partner companies, provide additional funding to existing partner companies, or commit capital to other initiatives, we may be required to expend our cash or incur debt, which will decrease our liquidity. Conversely, as we dispose of our interests in partner companies from time to time, we may receive proceeds from such sales, which could increase our liquidity. From time to time, we are engaged in discussions concerning acquisitions and dispositions which, if consummated, could impact our liquidity, perhaps significantly.

In May 2001, we entered into a $26.5 million loan agreement with Warren V. Musser, a former Chairman and Chief Executive Officer of the Company. Since 2001 and through December 31, 2013, we have received a total of $16.9 million in payments on the loan. The carrying value of the loan at December 31, 2013 was zero. In December 2011, the loan documents were amended to take into account accumulated unpaid interest and to make certain other changes related to collateral, maturity dates and other terms. We did not receive any payments on this loan agreement in 2013, 2012, or 2011.

Under certain circumstances, we may be required to return a portion or all the distributions we received as a general partner of a private equity fund for further distribution to such fund’s limited partners (“clawback”). The maximum clawback we could be required to return related to our general partner interest is $1.3 million, of which $1.0 million was reflected in Accrued expenses and other current liabilities and $0.3 million was reflected in Other long-term liabilities on the Consolidated Balance Sheets at December 31, 2013. Our ownership in the fund is 19%. The clawback liability is joint and several, such that

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we may be required to fund the clawback for other general partners should they default. We believe our potential liability due to the possibility of default by other general partners is remote.

For the reasons we have presented above, we believe our cash and cash equivalents at December 31, 2013, availability under our revolving credit facility and other internal sources of cash flow will be sufficient to fund our cash requirements for at least the next 12 months, including debt repayments, commitments to our existing partner companies and funds, possible additional funding of existing partner companies and our general corporate requirements. Our acquisition of new partner company interests is always contingent upon our availability of cash to fund such deployments, and our timing of monetization events directly affects our availability of cash.

Consolidated Working Capital

Consolidated working capital decreased to $171.0 million at December 31, 2013 compared to $178.6 million at December 31, 2012. The decrease of $7.6 million was primarily due to cash and marketable securities used to fund acquisitions of ownership interests in partner companies and funds and operating expenses incurred during the year, partially offset by cash proceeds of $36.4 million received on the sale of ThingWorx.

Analysis of Consolidated Cash Flows

Cash flow activity was as follows:

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Net cash used in operating activities	$	(21,221	)	$	(16,525	)	$	(17,727	)
Net cash provided by (used in) investing activities	90,258			3,116			(52,575		)
Net cash provided by (used in) financing activities	4,252			(3,749		)	(29,930		)
	$	73,289		$	(17,158	)	$	(100,232	)

Net Cash Used In Operating Activities

Year ended December 31, 2013 versus year ended December 31, 2012. Net cash used in operating activities increased $4.7 million in 2013 compared to the prior year. The increase primarily related to $2.9 million in cash interest payments on our 2018 Debentures. In the prior year, interest payments related to the 2014 Debentures were funded from a restricted escrow account. Interest payments made out of the restricted escrow account on the 2014 Debentures were considered non-cash investing activities. The change also related to an increase in cash severance payments of $0.9 million and an increase of $0.6 million in cash used for professional fees. These increases were partially offset by a $0.7 million decrease in cash used for management incentive plan payments.

Year ended December 31, 2012 versus year ended December 31, 2011. Net cash used in operating activities decreased $1.2 million in 2012 compared to the prior year. The change primarily related to $1.1 million in cash received for interest and fees associated with our participation in mezzanine loans and a $1.2 million decrease in employee and severance costs, partially offset by a $0.6 million increase in professional fees and a $0.4 million increase in cash used for management incentive plan payments.

Net Cash Provided by (Used In) Investing Activities

Year ended December 31, 2013 versus year ended December 31, 2012. Net cash provided by investing activities increased $87.1 million in 2013 compared to the prior year. The increase primarily related to a $61.1 million increase in cash received from the net sale of marketable securities, an increase of $21.4 million in proceeds from sales of and distributions from companies and funds, primarily related to the 2013 sale of our interests in ThingWorx, the release of $6.4 million of escrowed funds related to the Bundle Transaction, a decrease in acquisitions of ownership interests in companies and funds of $4.3 million and a decrease in advances and loans to companies of $3.2 million. These increases were partially offset by a $7.7 million decrease from the release in 2012 of cash from escrow as a result of the repurchase of the 2014 Debentures and a decrease of $1.6 million related to repayments of advances to partner companies.

Year ended December 31, 2012 versus year ended December 31, 2011. Net cash provided by (used in) investing activities increased $55.7 million in 2012 compared to the prior year. The increase was primarily related to a $166.3 million net decrease in cash paid to acquire marketable securities, the receipt of $7.7 million from the release of cash from escrow as a result of the

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repurchase of the 2014 Debentures and a $39.2 million decrease in cash paid to acquire ownership interests in partner companies and funds, partially offset by a $153.7 million decrease in proceeds from sales of and distributions from partner companies and funds, a $1.8 million decrease in repayments of advances to partner companies and a $1.5 million increase in advances and loans to partner companies.

Net Cash Provided by (Used In) Financing Activities

Year ended December 31, 2013 versus year ended December 31, 2012. Net cash provided by (used in) financing activities increased $8.0 million in 2013 compared to the prior year. The increase primarily related to the cash outflow of $58.7 million associated with the repurchase of the 2014 Debentures in 2012 as well as $1.8 million in costs associated with the issuance of our 2018 Debentures in 2012 partially offset by the issuance of $55.0 million in the face amount of our 2018 Debentures. The increase also related to a $2.7 million increase in the proceeds received from the exercise of stock options.

Year ended December 31, 2012 versus year ended December 31, 2011. Net cash used in financing activities decreased $26.2 million in 2012 compared to the prior year. The decrease is related to the issuance of $55.0 million in face amount of our 2018 Debentures and a $0.8 million increase in the issuance of common stock offset by a $27.9 million increase in the repurchase of convertible senior debentures and the payment of $1.8 million in debt issuance costs.

Contractual Cash Obligations and Other Commercial Commitments

The following table summarizes our contractual obligations and other commercial commitments as of December 31, 2013, by period due or expiration of the commitment.

	Payments Due by Period
	Total		2014		2015 and 2016		2017 and 2018		After 2018
	(In millions)
Contractual Cash Obligations:
Convertible senior debentures (a)	$	55.5	$	0.5	$	—	$	55.0	$	—
Interest payments on long-term debt	12.7		2.9		5.8		4.0		—
Operating leases	0.9		0.5		0.4		—		—
Funding commitments (b)	0.1		0.1		—		—		—
Potential clawback liabilities (c)	1.3		1.0		—		0.3		—
Other long-term obligations (d)	3.4		0.8		1.6		1.0		—
Total Contractual Cash Obligations	$	73.9	$	5.8	$	7.8	$	60.3	$	—
	Amount of Commitment Expiration by Period
					2015 and 2016		2017 and 2018		After 2018
	Total		2014
	(In millions)
Other Commitments:
Letters of credit (e)	$	6.3	$	—	$	—	$	—	$	6.3

(a) We have outstanding $55.0 million of 2018 Debentures with a stated maturity of May 15, 2018, $0.4 million of 2024 Debentures with a stated maturity of March 15, 2024 and $29 thousand of 2014 Debentures with a stated maturity of March 15, 2014. The holders of the remaining 2024 Debentures have the right to require the Company to repurchase the remaining 2024 Debentures on March 20, 2014 or March 20, 2019 at a repurchase price equal to 100% of their respective face amount, plus accrued and unpaid interest.

(b) This represents a funding commitment to a private equity fund which has been included in 2013 based on estimated timing of capital calls provided to us by the fund’s management.

(c) Under certain circumstances, we may be required to return a portion or all the distributions we received as a general partner of a private equity fund for a further distribution to such fund’s limited partners (“clawback”). The maximum clawback we could be required to return is approximately $1.3 million, of which $1.0 million was reflected in Accrued expenses and other current liabilities and $0.3 million was reflected in Other long-term liabilities on the Consolidated Balance Sheets as of December 31, 2013.

35

(d) Reflects the estimated amount payable to a former Chairman and CEO under an ongoing agreement.

(e) A $6.3 million letter of credit is provided to the landlord of CompuCom’s Dallas headquarters lease as required in connection with our sale of CompuCom in 2004.

We have agreements with certain employees that provide for severance payments to the employee in the event the employee is terminated without cause or if the employee terminates his employment for “good reason.” The maximum aggregate cash exposure under the agreements was approximately $2.4 million at December 31, 2013.

In connection with the Bundle Transaction, we agreed to continue our guarantee of the Laureate Biopharma, Inc. Princeton, New Jersey facility lease, subject to certain conditions. During the year ended December 31, 2013, we obtained the release of our obligation at no expense to us.

As of December 31, 2013, we had federal net operating loss carryforwards totaling approximately $224.3 million. The net operating loss carryforwards expire in various amounts from 2021 to 2033.

We are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position or results of operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to equity price risks on the marketable portion of our ownership interests in our partner companies and other assets. At December 31, 2013, these interests included our equity positions in NuPathe, a publicly-traded entity, which has experienced significant volatility in its stock price. Historically, we have not attempted to reduce or eliminate our market exposure related to these types of interests. Based on closing market prices at December 31, 2013, the aggregate fair market value of our holdings in NuPathe was $20.1 million. A 20% decrease in NuPathe's stock price would result in an approximate $4.0 million decrease in the aggregate fair value of our holdings in this company.

We have $55.5 million outstanding in convertible senior debentures with stated maturities through March 15, 2024. The 2024 Debentures holders have the right to require the Company to repurchase the 2024 Debentures on March 20, 2014 or March 20, 2019 at a repurchase price equal to 100% of their face amount, plus accrued and unpaid interest. In November 2012, we issued $55.0 million in face amount of our 2018 Debentures and repurchased substantially all of our 2014 Debentures outstanding.

Liabilities	2014			2015			2016			After 2016			Fair Value at December 31, 2013
2024 Debentures due by year (in millions)	$	0.4		$	—		$	—		$	—		$	0.4
Fixed interest rate	2.625		%	2.625		%	2.625		%	2.625		%
2018 Debentures due by year (in millions)	$	—		$	—		$	—		$	55.0		$	69.9
Fixed interest rate	5.25		%	5.25		%	5.25		%	5.25		%

36

Item 8. Financial Statements and Supplementary Data

The following Consolidated Financial Statements, and the related Notes thereto, of Safeguard Scientifics, Inc. and the Reports of Independent Registered Public Accounting Firm are filed as a part of this Form 10-K.

	Page
Report of Independent Registered Public Accounting Firm	38
Report of Independent Registered Public Accounting Firm	39
Consolidated Balance Sheets as of December 31, 2013 and 2012	40
Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011	41
Consolidated Statements of Comprehensive Income (Loss) for the years ended December  31, 2013, 2012 and 2011	42
Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012 and  2011	43
Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011	44
Notes to Consolidated Financial Statements	45

37

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Safeguard Scientifics, Inc.:

We have audited Safeguard Scientifics, Inc.’s (the Company) internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Safeguard Scientifics, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting (Item 9A.(b)). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Safeguard Scientifics, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Safeguard Scientifics, Inc. and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the years in the three-year period ended December 31, 2013, and our report dated March 7, 2014 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Philadelphia, Pennsylvania

March 7, 2014

38

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Safeguard Scientifics, Inc.:

We have audited the accompanying consolidated balance sheets of Safeguard Scientifics, Inc. (the Company) and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the years in the three-year period ended December 31, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Safeguard Scientifics, Inc. and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Safeguard Scientifics, Inc.’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 7, 2014 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Philadelphia, Pennsylvania

March 7, 2014

39

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	As of December 31,
	2013			2012
ASSETS
Current Assets:
Cash and cash equivalents	$	139,318		$	66,029
Cash held in escrow	—			6,434
Marketable securities	38,250			110,957
Restricted marketable securities	5			10
Prepaid expenses and other current assets	1,557			2,408
Total current assets	179,130			185,838
Property and equipment, net	138			193
Ownership interests in and advances to partner companies and funds (of which $20,057 and $20,972 are measured at fair value at December 31, 2013 and 2012, respectively)	148,579			148,639
Loan participations receivable	8,135			7,085
Available-for-sale securities	15			58
Long-term marketable securities	6,088			29,059
Other assets	3,911			3,272
Total Assets	$	345,996		$	374,144
LIABILITIES AND EQUITY
Current Liabilities:
Convertible senior debentures—current	$	470		$	—
Accounts payable	245			610
Accrued compensation and benefits	5,028			4,050
Accrued expenses and other current liabilities	2,431			2,601
Total current liabilities	8,174			7,261
Other long-term liabilities	3,683			3,921
Convertible senior debentures—non-current	49,478			48,991
Total Liabilities	61,335			60,173
Commitments and contingencies
Equity:
Preferred stock, $0.10 par value; 1,000 shares authorized	—			—
Common stock, $0.10 par value; 83,333 shares authorized; 21,553 and 20,968 shares issued and outstanding at December 31, 2013 and 2012, respectively	2,155			2,097
Additional paid-in capital	822,103			815,946
Accumulated deficit	(539,597		)	(504,072		)
Total Equity	284,661			313,971
Total Liabilities and Equity	$	345,996		$	374,144

See Notes to Consolidated Financial Statements.

40

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Year Ended December 31,
	2013			2012			2011
General and administrative expense	$	21,644		$	19,473		$	21,168
Operating loss	(21,644		)	(19,473		)	(21,168		)
Other income (loss), net	383			9,338			(6,145		)
Interest income	2,646			2,926			1,424
Interest expense	(4,303		)	(5,636		)	(5,971		)
Equity income (loss)	(12,607		)	(26,517		)	142,457
Net income (loss) before income taxes	(35,525		)	(39,362		)	110,597
Income tax benefit (expense)	—			—			—
Net income (loss)	$	(35,525	)	$	(39,362	)	$	110,597
Net income (loss) per share:
Basic	$	(1.66	)	$	(1.88	)	$	5.33
Diluted	$	(1.66	)	$	(1.88	)	$	4.74
Average shares used in computing net income (loss) per share:
Basic	21,362			20,974			20,764
Diluted	21,362			20,974			24,522

See Notes to Consolidated Financial Statements.

41

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

	Year Ended December 31,
	2013			2012			2011
Net income (loss)	$	(35,525	)	$	(39,362	)	$	110,597
Other comprehensive income (loss), before taxes:
Unrealized net gain (loss) on available-for-sale securities	(43		)	4,388			(20,308		)
Reclassification adjustment for gain from available-for-sale securities changed to fair value	—			(4,607		)	—
Reclassification adjustment for other than temporary impairment of available-for-sale securities included in net income (loss)	43			260			7,451
Total comprehensive income (loss)	$	(35,525	)	$	(39,321	)	$	97,740

See Notes to Consolidated Financial Statements.

42

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands)

							Accumulated Other Comprehensive  Income (Loss)
				Accumulated Deficit						Common Stock			Additional Paid-In Capital			Treasury Stock
	Total									Shares	Amount					Shares		Amount
Balance — December 31, 2010	246,431			(575,307		)	12,816			20,630	2,063		806,859			—		—
Net income	110,597			110,597			—			—	—		—			—		—
Stock options exercised, net	918			—			—			95	10		908			5		—
Issuance of restricted stock, net	139			—			—			27	2		137			(5	)	—
Stock-based compensation expense	3,052			—			—			—	—		3,052			—		—
Other comprehensive loss	(12,857		)	—			(12,857		)	—	—		—			—		—
Balance — December 31, 2011	348,280			(464,710		)	(41		)	20,752	2,075		810,956			—		—
Net loss	(39,362		)	(39,362		)	—			—	—		—			—		—
Stock options exercised, net	1,741			—			—			181	19		1,722			—		—
Issuance of restricted stock, net	94			—			—			35	3		91			—		—
Stock-based compensation expense	2,014			—			—			—	—		2,014			—		—
Repurchase of equity component of convertible senior debentures	(5,283		)	—			—			—	—		(5,283		)	—		—
Equity component of convertible senior debentures issued, net of issuance costs	6,446			—			—			—	—		6,446			—		—
Other comprehensive income	41			—			41			—	—		—			—		—
Balance — December 31, 2012	313,971			(504,072		)	—			20,968	2,097		815,946			—		—
Net loss	(35,525		)	(35,525		)	—			—	—		—			—		—
Stock options exercised, net	4,417			—			—			559	55		4,261			(7	)	101
Issuance of restricted stock, net	99			—			—			26	3		75			3		21
Stock-based compensation expense	1,821			—			—			—	—		1,821			—		—
Repurchase of common stock	(122		)	—			—			—	—		—			8		(122		)
Balance — December 31, 2013	$	284,661		$	(539,597	)	$	—		21,553	$	2,155	$	822,103		4		$	—

See Notes to Consolidated Financial Statements.

43

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year Ended December 31,
	2013			2012			2011
Cash Flows from Operating Activities:
Net income (loss)	$	(35,525	)	$	(39,362	)	$	110,597
Adjustments to reconcile to net cash used in operating activities:
Depreciation	92			108			124
Amortization of debt discount	995			726			623
Equity (income) loss	12,607			26,517			(142,457		)
Other (income) loss, net	(383		)	(9,338		)	6,145
Stock-based compensation expense	1,821			2,014			3,052
Changes in assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable, net	(1,194		)	(418		)	(429		)
Accounts payable, accrued expenses, and other	366			3,228			4,618
Net cash used in operating activities	(21,221		)	(16,525		)	(17,727		)
Cash Flows from Investing Activities:
Acquisitions of ownership interests in companies and funds	(41,838		)	(46,100		)	(85,329		)
Proceeds from sales of and distributions from companies and funds	38,974			17,596			171,268
Advances and loans to companies	(10,464		)	(13,665		)	(12,127		)
Repayment of advances to companies	1,651			3,214			5,000
Origination fees on mezzanine loans	42			74			537
Increase in marketable securities	(69,883		)	(242,023		)	(240,367		)
Decrease in marketable securities	165,379			276,392			108,393
Release of restricted cash equivalents for interest on convertible senior debentures	—			7,701			—
Capital expenditures	(37		)	(73		)	(58		)
Proceeds from sale of discontinued operations, net	6,434			—			1
Other, net	—			—			107
Net cash provided by (used in) investing activities	90,258			3,116			(52,575		)
Cash Flows from Financing Activities:
Proceeds from issuance of convertible senior debentures	—			55,000			—
Repurchase of convertible senior debentures	(43		)	(58,703		)	(30,848		)
Costs of issuance of convertible senior debentures	—			(1,790		)	—
Issuance of Company common stock, net	4,417			1,744			918
Repurchase of Company common stock	(122		)	—			—
Net cash provided by (used in) financing activities	4,252			(3,749		)	(29,930		)
Net Increase (Decrease) in Cash and Cash Equivalents	73,289			(17,158		)	(100,232		)
Cash and Cash Equivalents at beginning of period	66,029			83,187			183,419
Cash and Cash Equivalents at end of period	$	139,318		$	66,029		$	83,187

See Notes to Consolidated Financial Statements.

44

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Significant Accounting Policies

Description of the Company

Safeguard Scientifics, Inc. (“Safeguard” or the “Company”) seeks to build value in growth-stage businesses by providing capital and strategic, operational and management resources. Safeguard participates principally in growth and expansion financings and at times, early-stage financings. The Company’s vision is to be the preferred source of capital for entrepreneurs and management teams in targeted sectors.

The Company strives to create long-term value for its shareholders by helping its partner companies increase their market penetration, grow revenue and improve cash flow. The Company focuses principally on companies with initial capital requirements of between $5 million and $15 million, and follow-on financing needs of between $5 million and $10 million, with a total anticipated deployment of up to $25 million from Safeguard. The Company principally targets companies that operate in two sectors:

Healthcare — companies focused on medical technology (“MedTech”), including diagnostics and devices; and healthcare technology (“HealthTech”); and specialty pharmaceuticals. Within these areas, Safeguard targets companies that have lesser regulatory risk and have achieved or are near commercialization.

Technology — companies focused on digital media; financial technology (“FinTech”) and Enterprise 3.0, which includes mobile technology, cloud, the “Internet of Things” and big data. Within these areas, Safeguard targets companies that have transaction-enabling applications with a recurring revenue stream.

Principles of Consolidation

The consolidated financial statements include the accounts of Safeguard and all of its subsidiaries in which a controlling financial interest is maintained. All intercompany accounts and transactions are eliminated in consolidation.

Principles of Accounting for Ownership Interests in Companies

The Company’s ownership interests in its partner companies and private equity funds are accounted for using one of the following methods: consolidation, equity, cost, fair value and available-for-sale. The accounting method applied is generally determined by the degree of the Company’s influence over the entity, primarily determined by its voting interest in the entity.

In addition to holding voting and non-voting equity and debt securities, the Company also periodically makes advances to its partner companies in the form of promissory notes which are included in the Ownership interests in and advances to partner companies and funds line item in the Consolidated Balance Sheets.

Consolidation Method. The Company generally accounts for partner companies in which it directly or indirectly owns more than 50% of the outstanding voting securities under the consolidation method of accounting. Under this method, the Company includes the partner companies’ financial statements within the Company’s Consolidated Financial Statements, and all significant intercompany accounts and transactions are eliminated. The Company reflects participation of other stockholders in the net assets and in the income or losses of these consolidated partner companies in Equity in the Consolidated Balance Sheets and in Net (income) loss attributable to non-controlling interest in the Statements of Operations. Net (income) loss attributable to non-controlling interest adjusts the Company’s consolidated operating results to reflect only the Company’s share of the earnings or losses of the consolidated partner company. The Company accounts for results of operations and cash flows of a consolidated partner company through the latest date in which it holds a controlling interest. If the Company subsequently relinquishes control but retains an interest in the partner company, the accounting method is adjusted to the equity, cost or fair value method of accounting, as appropriate. As of December 31, 2013 and for each of the three years in the period then ended, the Company did not hold a controlling interest in any of its partner companies.

Fair Value Method. The Company accounts for its holdings in NuPathe, a publicly traded partner company, under the fair value method of accounting beginning in October 2012. Unrealized gains and losses on the mark-to-market of the Company’s holdings in fair value method companies and realized gains and losses on the sale of any holdings in fair value method companies are recognized in Other income (loss), net in the Consolidated Statements of Operations.

Equity Method. The Company accounts for partner companies whose results are not consolidated, but over which it exercises significant influence, under the equity method of accounting. Whether or not the Company exercises significant influence with respect to a partner company depends on an evaluation of several factors including, among others, representation

45

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

of the Company on the partner company’s board of directors and the Company’s ownership level, which is generally a 20% to 50% interest in the voting securities of a partner company, including voting rights associated with the Company’s holdings in common, preferred and other convertible instruments in the company. The Company also accounts for its interests in some private equity funds under the equity method of accounting based on its non-controlling general and limited partner interests in such funds. Under the equity method of accounting, the Company does not reflect a partner company’s financial statements within the Company’s Consolidated Financial Statements; however, the Company’s share of the income or loss of such partner company is reflected in Equity income (loss) in the Consolidated Statements of Operations. The Company includes the carrying value of equity method partner companies in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets. Any excess of the Company’s cost over its underlying interest in the net assets of equity method partner companies allocated to intangible assets is amortized over the estimated useful lives of the related intangible assets. The Company reflects its share of the income or loss of the equity method partner companies on a one quarter lag. This reporting lag could result in a delay in recognition of the impact of changes in the business or operations of these partner companies.

When the Company’s carrying value in an equity method partner company is reduced to zero, the Company records no further losses in its Consolidated Statements of Operations unless the Company has an outstanding guarantee obligation or has committed additional funding to such equity method partner company. When such equity method partner company subsequently reports income, the Company will not record its share of such income until it exceeds the amount of the Company’s share of losses not previously recognized.

Cost Method. The Company accounts for partner companies not consolidated or accounted for under the equity method or fair value method under the cost method of accounting. Under the cost method, the Company does not include its share of the income or losses of partner companies in the Company’s Consolidated Statements of Operations. The Company includes the carrying value of cost method partner companies in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

Available-for-Sale Securities. The Company accounts for its ownership interest in former partner company Tengion, Inc. as available-for-sale securities. In addition, for the period from its initial public offering in August 2010 through October 2012, the Company’s ownership interest in NuPathe was accounted for as available-for-sale securities. Available-for-sale securities are carried at fair value, based on quoted market prices, with the unrealized gains and losses, net of tax, reported as a separate component of equity. Unrealized losses are charged against net income (loss) when a decline in the fair value is determined to be other than temporary.

Accounting Estimates

The preparation of the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect amounts reported in the financial statements and accompanying notes. Actual results may differ from these estimates. These estimates include the evaluation of the recoverability of the Company’s ownership interests in and advances to partner companies and funds and investments in marketable securities, income taxes, stock-based compensation and commitments and contingencies. Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances.

Certain amounts recorded to reflect the Company’s share of income or losses of partner companies accounted for under the equity method are based on unaudited results of operations of those companies and may require adjustments in the future when audits of these entities’ financial statements are completed.

It is reasonably possible that the Company’s accounting estimates with respect to the ultimate recoverability of the carrying value of the Company’s ownership interests in and advances to partner companies and funds could change in the near term and that the effect of such changes on the financial statements could be material. At December 31, 2013, the Company believes the carrying value of the Company’s ownership interests in and advances to partner companies and funds is not impaired, although there can be no assurance that the Company’s future results will confirm this assessment, that a significant write-down or write-off will not be required in the future, or that a significant loss will not be recorded in the future upon the sale of a company.

Cash and Cash Equivalents and Marketable Securities

The Company considers all highly liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash and cash equivalents consist of deposits that are readily convertible into cash. The Company determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation as of

46

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

each balance sheet date. Held-to-maturity securities are carried at amortized cost, which approximates fair value. Marketable securities consist of held-to-maturity securities, primarily consisting of government agency bonds, commercial paper and certificates of deposits. Marketable securities with a maturity date greater than one year from the balance sheet date are considered long-term. The Company has not experienced any significant losses on cash equivalents and does not believe it is exposed to any significant credit risk on cash and cash equivalents.

Restricted Marketable Securities

Restricted marketable securities consist of certificates of deposit with various maturity dates.

Financial Instruments

The Company’s financial instruments (principally cash and cash equivalents, marketable securities, restricted cash equivalents, accounts receivable, notes receivable, accounts payable and accrued expenses) are carried at cost, which approximates fair value due to the short-term maturity of these instruments. The Company’s warrant participations are carried at fair value. The Company’s long-term debt is carried at cost. At December 31, 2013, the market value of the Company’s outstanding debentures was approximately $69.9 million based on the midpoint of bid and ask prices as of that date.

Accounting for Participating Interests in Mezzanine Loans Receivable and Related Equity Interests

In 2011, the Company acquired a 36% ownership interest in the management company and general partner of Penn Mezzanine L.P. Penn Mezzanine is a mezzanine lender focused on lower middle-market, Mid-Atlantic companies. From such acquisition through December 31, 2013, through its relationship with Penn Mezzanine, the Company acquired participating interests in mezzanine loans and related equity interests of the borrowers. In certain instances, these interests also included warrants to purchase common stock of the borrowers. The Company’s accounting policies for these participating interests are as follows:

Loan Participations Receivable

The Company’s participating interests in Penn Mezzanine loans are included in Loan participations receivable on the Consolidated Balance Sheets. On a periodic basis, but no less frequently than at the end of each quarter, the Company evaluates the carrying value of each loan participation receivable for impairment. A loan participation receivable is considered impaired when it is probable that the Company will be unable to collect all amounts (principal and interest) due according to the contractual terms of the participation agreement and related agreements with the borrowers. The Company maintains an allowance to provide for estimated loan losses based on evaluating known and inherent risks in the loans. The allowance is provided based upon management’s analysis of the pertinent factors underlying the quality of the loans. These factors include an analysis of the financial condition of the individual borrowers, delinquency levels, actual loan loss experience, current economic conditions and other relevant factors. The Company’s analysis includes methods to estimate the fair value of loan collateral and the existence of potential alternative sources of repayment. The Company does not accrue interest when a loan is considered impaired. All cash receipts from an impaired loan are applied to reduce the original principal amount of such loan until the principal has been fully recovered and would be recognized as interest income thereafter. The allowance for loan losses at December 31, 2013 and 2012 was $2.3 million and $2.0 million, respectively.

Penn Mezzanine charges fees to borrowers for originating loans. The Company’s participating interest in these fees, net of any loan origination costs, is deferred and amortized to income using the effective interest method, over the term of the loan. If the loan is repaid prior to maturity, the remaining unamortized deferred loan origination fee is recognized in income at the time of repayment. Unamortized deferred loan origination fees are recorded as a contra asset against Loan participations receivable on the Consolidated Balance Sheets.

Equity Participations

The Company’s participation in equity interests acquired by Penn Mezzanine is accounted for under the cost method of accounting. On a periodic basis, but no less frequently than at the end of each quarter, the Company evaluates the carrying value of its participation in these equity interests for possible impairment based on achievement of business plan objectives and milestones, the fair value of the equity interest relative to its carrying value, the financial condition and prospects of the underlying company and other relevant factors. The Company’s participating interests in equity interests acquired by Penn Mezzanine are included in Other assets on the Consolidated Balance Sheets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Warrant Participations

The Company recognizes its participation in warrants acquired by Penn Mezzanine based on the fair value of the warrants at the balance sheet date. The fair values of warrant participations are bifurcated from the related loan participations receivable based on the relative fair value of the respective instruments at the acquisition date. The resulting discount is amortized to interest income over the term of the loan using the effective interest method. Any gain or loss associated with changes in the fair value of the warrants at the balance sheet date is recorded in Other income (loss), net in the Consolidated Statements of Operations. The fair value of the warrants is determined based on Level 3 inputs and is included in Other assets on the Consolidated Balance Sheets.

Property and Equipment

Property and equipment are stated at cost. Provision for depreciation and amortization is based on the lesser of the estimated useful lives of the assets or the remaining lease term (buildings and leasehold improvements, 5 to 15 years; office equipment, 3 to 15 years) and is computed using the straight-line method.

Impairment of Ownership Interests In and Advances to Partner Companies and Funds

On a periodic basis, but no less frequently than quarterly, the Company evaluates the carrying value of its equity and cost method partner companies and available-for-sale securities for possible impairment based on achievement of business plan objectives and milestones, the fair value of each partner company relative to its carrying value, the financial condition and prospects of the partner company and other relevant factors. The business plan objectives and milestones the Company considers include, among others, those related to financial performance, such as achievement of planned financial results or completion of capital raising activities, and those that are not primarily financial in nature, such as hiring of key employees or the establishment of strategic relationships. Management then determines whether there has been an other than temporary decline in the value of its ownership interest in the company or value of available-for-sale securities. Impairment is measured as the amount by which the carrying value of an asset exceeds its fair value.

The fair value of privately held companies is generally determined based on the value at which independent third parties have invested or have committed to invest in these companies or based on other valuation methods, including discounted cash flows, valuation of comparable public companies and the valuation of acquisitions of similar companies. The fair value of the Company’s ownership interests in private equity funds generally is determined based on the fair value of its pro rata portion of the funds’ net assets.

Impairment charges related to equity method partner companies and funds are included in Equity income (loss) in the Consolidated Statements of Operations. Impairment charges related to cost method partner companies and funds and available-for-sale securities are included in Other income (loss), net in the Consolidated Statements of Operations.

The reduced cost basis of a previously impaired partner company is not written-up if circumstances suggest the value of the company has subsequently recovered.

Defined Contribution Plans

Defined contribution plans are contributory and cover eligible employees of the Company. The Company’s defined contribution plan allows eligible employees, as defined in the plan, to contribute to the plan up to 75% of their pre-tax compensation, subject to the maximum contributions allowed by the Internal Revenue Code. The Company makes matching contributions under the plan. Expense relating to defined contribution plans was $0.4 million for the year ended December 31, 2013 and $0.3 million in each of the years ended December 31, 2012 and 2011.

Income Taxes

The Company accounts for income taxes under the asset and liability method whereby deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company measures deferred tax assets and liabilities using enacted tax rates in effect for the year in which the temporary differences are expected to be recovered or settled. The Company recognizes the effect on deferred tax assets and liabilities of a change in tax rates in income in the period of the enactment date. The Company provides valuation allowances against the net deferred tax asset for amounts which are not considered more likely than not to be realized.

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Net Income (Loss) Per Share

The Company computes net income (loss) per share using the weighted average number of common shares outstanding during each year. The Company includes in diluted net income (loss) per share common stock equivalents (unless anti-dilutive) which would arise from the exercise of stock options and conversion of other convertible securities and adjusted, if applicable, for the effect on net income (loss) of such transactions. Diluted net income (loss) per share calculations adjust net income (loss) for the dilutive effect of common stock equivalents and convertible securities issued by the Company’s consolidated or equity method partner companies.

Comprehensive Income (Loss)

Comprehensive income (loss) is the change in equity of a business enterprise during a period from non-owner sources. Excluding net income (loss), the Company’s sources of other comprehensive income (loss) are from net unrealized appreciation (depreciation) on available-for-sale securities. Reclassification adjustments result from the recognition in net income (loss) of unrealized gains or losses that were included in comprehensive income (loss) in prior periods.

Segment Information

The Company reports segment data based on the management approach which designates the internal reporting used by management for making operating decisions and assessing performance as the source of the Company’s reportable operating segments.

2. Ownership Interests in and Advances to Partner Companies and Funds

The following summarizes the carrying value of the Company’s ownership interests in and advances to partner companies and private equity funds.

	December 31, 2013		December 31, 2012
	(In thousands)
Fair value	$	20,057	$	20,972
Equity Method:
Partner companies	108,872		102,931
Private equity funds	1,766		3,810
	110,638		106,741
Cost Method:
Partner companies	13,480		10,000
Private equity funds	2,418		2,634
	15,898		12,634
Advances to partner companies	1,986		8,292
	$	148,579	$	148,639
Loan participations receivable	$	8,135	$	7,085
Available-for-sale securities	$	15	$	58

Impairment charges related to equity method partner companies were $11.2 million, $5.0 million and $7.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. The impairment charge in 2013 was related to PixelOptics, Inc. and is reflected in Equity loss in the Consolidated Statements of Operations. The impairment was based on PixelOptics' inability to raise additional capital to continue its operations. The impairment charge in 2012 also related to PixelOptics. The adjusted carrying value of PixelOptics at December 31, 2013 was $0 and the Company believes it will not recover any of its capital. On November 4, 2013, PixelOptics filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The impairment charges in 2011 included $5.7 million related to Swap.com and $1.4 million related to SafeCentral, Inc., both former partner companies.

The Company recognized an impairment charge of $1.8 million for the year ended December 31, 2013 related to its interest in the management company of Penn Mezzanine which is reflected in Equity loss in the Consolidated Statements of Operations. During the quarter ended December 31, 2013, the Company decided that it will not acquire participating interests in any new Penn Mezzanine lending activities.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company recognized impairment charges of $0.3 million and $2.5 million related to its Penn Mezzanine debt and equity participations in the years ended December 31, 2013 and 2012, respectively, which is reflected in Other income (loss), net in the Consolidated Statements of Operations. The charge in 2013 included $0.2 million related to loan participations and $0.1 million representing an adjustment to the fair value of the Company's participation in warrants. The charge in 2012 included $2.0 million related to loan participations, $0.4 million related to equity participations and $0.1 million related to warrant participations.

The Company recognized impairment charges of $0.3 million and $0.4 million related to its cost method interest in a legacy private equity fund in 2013 and 2012, respectively, which are reflected in Other income (loss), net in the Consolidated Statement of Operations.

The Company recognized impairment charges of $0.3 million and $7.5 million for the years ended December 31, 2012 and 2011, respectively, related to available-for-sale securities. The impairment charges are reflected in Other income (loss), net, in the Consolidated Statements of Operations and represent the unrealized loss on the mark-to-market of its ownership interests in Tengion and NuPathe which were previously recorded as a separate component of equity. During the years ended December 2012 and 2011, the Company determined that the decline in the value of its public holdings in Tengion and NuPathe were other than temporary.

On October 23, 2012, the Company purchased preferred stock and warrants from NuPathe for $5.0 million. Each of the 2,500 shares of preferred stock was convertible into 1,000 shares of NuPathe’s common stock at a price of $2.00 per share, subject to antidilution protection. The preferred stock was converted in February 2013. The warrants were exercisable to purchase 2.5 million shares of NuPathe common stock at a price of $2.00 per share. Following the transaction, the Company’s interests in NuPathe’s common stock, preferred stock, warrants and options are accounted for under the fair value option. The Company recognized an unrealized gain of $4.6 million related to the mark-to-market of the Company’s ownership interests in NuPathe’s common stock, previously classified as a separate component of equity. In the period from October 23, 2012 through December 31, 2012, the Company recognized an unrealized gain of $6.4 million on the mark-to-market of its holdings in NuPathe. These gains were included in Other income (loss), net in the Consolidated Statements of Operations. For the year ended December 31, 2013, the Company recognized an unrealized loss of $0.9 million on the mark-to-market of its holdings in NuPathe, which is included in Other income (loss), net in the Consolidated Statements of Operations

In December 2013, ThingWorx, Inc., formerly an equity method partner company, was acquired by PTC, Inc. The Company received cash proceeds of $36.4 million, excluding $4.1 million which will be held in escrow until December 30, 2015. Depending on the achievement of certain milestones, the Company may receive up to an additional $6.5 million in connection with the transaction. The Company recognized a gain of $32.7 million on the transaction which is recorded in Equity income (loss) in the Consolidated Statement of Operations for the year ended December 31, 2013.

In July 2011, Portico Systems, Inc. was acquired by McKesson resulting in cash proceeds of approximately $32.8 million in exchange for the Company’s equity interests. In June 2012, the Company received an additional $1.9 million as a result of the achievement of milestones associated with the transaction. In August 2012, the Company received $3.4 million upon the expiration of the escrow period. These amounts were recorded in Equity income (loss) in the Consolidated Statement of Operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following unaudited summarized balance sheets for PixelOptics at June 30, 2013 and December 31, 2012 and the results of operations for the six months ended June 30, 2013 and 2012, have been compiled from the unaudited financial statements of PixelOptics.  The results of PixelOptics are reported on a one quarter lag.  

	As of June 30,			As of December 31,
	2013			2012
	(In thousands)
Balance Sheets:
Current assets	$	285		$	323
Non-current assets	4,588			5,259
Total assets	$	4,873		$	5,582
Current liabilities	$	56,721		$	34,184
Non-current liabilities	1,818			10,228
Shareholders’ equity	(53,666		)	(38,830		)
Total liabilities and shareholders’ equity	$	4,873		$	5,582

	Six Months Ended
	June 30, 2013			June 30, 2012
	(In thousands)
Results of Operations:
Revenue	$	800		$	569
Operating loss	$	(12,219	)	$	(16,172	)
Net loss	$	(14,838	)	$	(16,923	)

The following unaudited summarized financial information for partner companies and funds accounted for under the equity method at December 31, 2013 and 2012 and for each of the three years ended December 31, 2013, 2012 and 2011 has been compiled from the unaudited financial statements of our respective partner companies and funds and reflects certain historical adjustments. Results of operations of the partner companies and funds are excluded for periods prior to their acquisition and subsequent to their disposition. The unaudited financial information below does not include information pertaining to PixelOptics.

	As of December 31,
	2013		2012
	(In thousands)
Balance Sheets:
Current assets	$	221,001	$	168,246
Non-current assets	90,042		74,555
Total assets	$	311,043	$	242,801
Current liabilities	$	153,398	$	125,491
Non-current liabilities	75,324		37,384
Shareholders’ equity	82,321		79,926
Total liabilities and shareholders’ equity	$	311,043	$	242,801

As of December 31, 2013, the Company’s carrying value in equity method partner companies, in the aggregate, exceeded the Company’s share of the net assets of such companies by approximately $72.2 million. Of this excess, $53.7 million was allocated to goodwill and $18.5 million was allocated to intangible assets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Results of Operations:
Revenue	$	273,754		$	191,928		$	117,057
Gross profit	$	125,766		$	90,876		$	63,160
Net loss	$	(52,489	)	$	(79,662	)	$	(38,468	)

3. Acquisitions of Ownership Interests in Partner Companies and Funds

In November 2013, the Company acquired a 22.0% interest in Apprenda, Inc. for $12.1 million. Apprenda makes mobile phone application development software. The Company accounts for its ownership interest in Apprenda under the equity method. The difference between the Company's cost and its interest in the underlying net assets of Apprenda was preliminarily allocated to intangible assets and goodwill as reflected in the carrying value of Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In November 2013, the Company acquired a 8.0% interest in Dabo Health, Inc. ("Dabo") for $0.8 million. Dabo provides the healthcare community with a healthcare information platform that brings clarity to quality metrics, makes them actionable to hospitals and care providers, and facilitates collaboration for quality improvement. The Company accounts for its ownership interest in Dabo under the cost method.

In October and May 2013, the Company funded an aggregate of $0.5 million of a convertible bridge loan to Hoopla Software, Inc. (“Hoopla”). The Company had previously acquired an interest in Hoopla in December 2011 for $1.3 million. Hoopla helps organizations create high performance sales cultures through software-as-a-service solutions that integrate with customer relationship management systems. The Company accounts for its interest in Hoopla under the equity method. The difference between the Company's cost and its interest in the underlying net assets of Hoopla was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In September and June 2013, the Company funded an aggregate of $0.6 million of convertible bridge loans to Alverix, Inc. The Company had previously deployed an aggregate of $8.8 million in Alverix. The Company accounts for its ownership interest in Alverix under the equity method. Subsequent to year end, the Company sold its interest in Alverix. For further details, see Note 18 to the Consolidated Financial Statements.

In August 2013, the Company acquired a 35.1% primary ownership interest in Quantia, Inc. for $7.5 million. Quantia provides a mobile and web-based physician relationship management platform, QuantiaMD, which enables principal participants throughout the healthcare spectrum, including health systems, payers, pharmaceutical companies and medical device companies, to engage and interact with their physicians. The Company accounts for its interest in Quantia under the equity method. The difference between the Company's cost and its interest in the underlying net assets of Quantia was preliminarily allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In August 2013, the Company deployed an additional $1.1 million in DriveFactor, Inc. The Company previously deployed an aggregate of $3.5 million in DriveFactor in 2011 and 2012. DriveFactor is a provider of telematics technology and statistical analysis of driving data. The Company accounts for its interest in DriveFactor under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of DriveFactor was allocated to goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In August 2013, the Company deployed $5.0 million in Clutch Holdings, Inc. (“Clutch”). Clutch is a provider of loyalty and gift card programs to retailers through its proprietary platform, and offers a mobile wallet application to consumers to track and store gift and loyalty cards, coupons and other retail shopping tools. The Company previously had acquired an interest in Clutch in February 2013 for $0.5 million. In conjunction with the most recent funding, the Company’s primary ownership interest in Clutch increased from 6.5% to 24.0%, above the threshold at which the Company believes it exercises significant influence. Accordingly, the Company adopted the equity method of accounting for its holdings in Clutch. The difference between the Company's cost and its interest in the underlying net assets of Clutch was preliminarily allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

funds on the Consolidated Balance Sheets. The change in accounting treatment for the Company’s holdings in Clutch from the cost method to the equity method had no effect on the Consolidated Financial Statements of any prior period.

In July 2013, the Company funded $1.0 million of a convertible bridge loan to Crescendo Bioscience, Inc. The Company previously had acquired an interest in Crescendo Bioscience in December 2012 for $10.0 million. The Company accounts for its ownership interest in Crescendo Bioscience under the cost method. Subsequent to year end, the Company sold its interest in Crescendo Bioscience. For further details, see Note 18 to the Consolidated Financial Statements.

During the year ended December 31, 2013, the Company funded $2.3 million for participations in loan and equity interests initiated by Penn Mezzanine. Included in this funding were $2.2 million for participations in loans and $0.1 million for participations in equity of the borrower acquired by Penn Mezzanine. During the year ended December 31, 2012, the Company funded $4.2 million for participations in loan and equity interests initiated by Penn Mezzanine. Included in this funding was $3.8 million for participations in loans, $0.3 million for participations in equity of the borrowers, and $0.1 million for participations in warrants to acquire common stock of the borrowers. During the year ended December 31, 2011, the Company funded an aggregate of $9.7 million for participations in certain loans and equity interests. Included in this funding was $8.1 million for participations in loans, $1.3 million for participations in equity and $0.3 million for participations in warrants to acquire common stock of the borrowers. In August 2011, the Company acquired a 36% ownership interest in the management company and general partner of Penn Mezzanine for $3.9 million. Penn Mezzanine is a mezzanine lender focused on lower middle-market, Mid-Atlantic companies. The Company accounts for its interest in Penn Mezzanine under the equity method of accounting.

During the year ended December 31, 2013, the Company funded an aggregate of $5.3 million of a convertible bridge loan to PixelOptics. The Company previously deployed an aggregate of $31.6 million in PixelOptics. The adjusted carrying value of PixelOptics at December 31, 2013 was $0. The Company accounted for its interest in PixelOptics under the equity method.

In June 2013, the Company deployed an additional $5.3 million in Medivo, Inc. The Company had previously acquired an interest in Medivo in November 2011 for $6.3 million. Medivo is a cloud-based health monitoring platform that connects doctors, consumers and clinical labs. The Company accounts for its interest in Medivo under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of Medivo was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In March 2013, the Company deployed an additional $1.7 million in Lumesis, Inc. The Company had previously acquired an interest in Lumesis in February 2012 for $2.2 million. Lumesis is a financial technology company that is dedicated to delivering software solutions and comprehensive, timely data to the municipal bond marketplace. The Company accounts for its interest in Lumesis under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of Lumesis was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In February 2013, the Company acquired a 27.6% primary ownership interest in Pneuron Corporation for $5.0 million. Pneuron helps enterprise companies reduce the time and cost of application development by building solutions across heterogeneous databases and applications. The Company accounts for its ownership interest in Pneuron under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of Pneuron was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In January 2013, the Company acquired a 7.7% primary interest in Sotera Wireless, Inc. The Company deployed $1.3 million into Sotera Wireless and acquired additional shares from a previous investor for $1.2 million. Sotera Wireless is a medical device company that has developed a wireless patient monitoring platform that is designed to keep clinicians connected to their patients. The Company accounts for its interest in Sotera Wireless under the cost method.

In December 2012, the Company acquired a 35% interest in AppFirst, Inc. for $6.5 million. AppFirst delivers application monitoring systems for development operations professionals and technology executives with visibility into systems, applications and business metrics. The Company accounts for its ownership interest in AppFirst under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of AppFirst was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In October and March 2012, the Company deployed an additional $5.2 million in Good Start Genetics, Inc. (“Good Start”). The Company had previously acquired an interest in Good Start in 2010 for $6.8 million. Good Start performs pre-pregnancy genetic tests, which utilize an advanced DNA sequencing technology to screen for a panel of genetic disorders,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

including those recommended by the American Congress of Obstetricians and Gynecologists and the American College of Medical Genetics. The Company accounts for its interest in Good Start under the equity method. The difference between the Company’s cost and its ownership interest in the underlying net assets of Good Start was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In October 2012, the Company purchased 2,500 preferred stock units and warrants to purchase 2.5 million shares of common stock from NuPathe for $5.0 million. The preferred stock was converted into 2.5 million shares of common stock of NuPathe in February 2013. The Company previously deployed $18.3 million in NuPathe from August 2006 through August 2010. The Company accounts for its ownership interest in NuPathe under the fair value method. Subsequent to year end, the Company sold its interest in NuPathe. For further details, see Note 18 to the Consolidated Financial Statements.

In September 2012, the Company deployed an additional $5.0 million in ThingWorx. The Company previously deployed $5.0 million in ThingWorx in February 2011. In December 2013, ThingWorx was acquired by PTC Inc. resulting in net sale proceeds to the Company of $36.4 million, excluding cash held in escrow of $4.1 million. Depending on the achievement of certain milestones, the Company may receive up to an additional $6.5 million in connection with the transaction. The Company accounted for its interest in ThingWorx under the equity method.

In August 2012, the Company funded a $1.7 million convertible debt facility to MediaMath, Inc. The Company previously deployed an aggregate of $16.9 million in MediaMath. MediaMath is an online media trading company that enables advertising agencies and their advertisers to optimize their ad spending across various exchanges through its proprietary algorithmic bidding platform and data integration technology. The Company accounts for its interest in MediaMath under the equity method. The difference between the Company's cost and its interest in the underlying net assets of MediaMath was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In August 2012, the Company funded $0.4 million into New York Digital Health Accelerator in exchange for a 9.4% limited partnership interest in the fund which is run by the New York eHealth Collaborative and the New York City Investment Fund for early- and growth-stage digital health companies that are developing technology products in care coordination, patient engagement, analytics and message alerts for healthcare providers. The Company accounts for its interest in New York Digital Health Accelerator under the equity method.

In February 2012, the Company acquired a 23.1% ownership interest in Spongecell, Inc. for $10.0 million. Spongecell is a digital advertising technology company that enhances standard banner ads with rich interactive features. The Company accounts for its ownership interest in Spongecell under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of Spongecell was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In September 2011, the Company acquired a 30.1% ownership interest in Putney, Inc. for $10.0 million. Putney is a specialty pharmaceutical company focused on providing generic medicines for pets. The Company accounts for its interest in Putney under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of Putney was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In August 2011, the Company funded $2.4 million of a convertible bridge loan to Swap.com. The Company had previously deployed an aggregate of $8.1 million in Swap.com. The Company impaired all of the carrying value of Swap.com in 2011 and no longer holds an active interest in the company. The Company accounted for its interest in Swap.com under the equity method.

In June 2011, the Company acquired a 31.7% ownership interest in NovaSom, Inc. for $20.0 million. NovaSom provides diagnostic devices and services for home testing and evaluation of sleep-disordered breathing, including obstructive sleep apnea. The Company accounts for its interest in NovaSom under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of NovaSom was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

4. Fair Value Measurements

The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial assets recorded at fair value on the Company’s Consolidated Balance Sheets are categorized as follows:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Include other inputs that are directly or indirectly observable in the marketplace.

Level 3—Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The following table provides the carrying value and fair value of certain financial assets and liabilities of the Company measured at fair value on a recurring basis as of December 31, 2013 and 2012: 

	Carrying Value		Fair Value Measurement at December 31, 2013
			Level 1		Level 2		Level 3
	(in thousands)
Cash and cash equivalents	$	139,318	$	139,318	$	—	$	—
Restricted marketable securities	5		5		—		—
Ownership interest in common stock of NuPathe	16,874		16,874		—		—
Ownership interest in warrants and options of NuPathe	3,183		—		—		3,183
Available-for-sale securities	15		15		—		—
Warrant participations	1,563		—		—		1,563
Marketable securities—held-to-maturity:
Commercial paper	$	13,599	$	13,599	$	—	$	—
U.S. Treasury Bills	8,014		8,014		—		—
Government agency bonds	9,945		9,945		—		—
Certificates of deposit	12,780		12,780		—		—
Total marketable securities	$	44,338	$	44,338	$	—	$	—

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Carrying Value		Fair Value Measurement at December 31, 2012
			Level 1		Level 2		Level 3
	(In thousands)
Cash and cash equivalents	$	66,029	$	66,029	$	—	$	—
Cash held in escrow	6,434		6,434		—		—
Restricted marketable securities	10		10		—		—
Ownership interest in common stock of NuPathe	8,897		8,897		—		—
Ownership interest in preferred stock, warrants and options of NuPathe	12,075		—		—		12,075
Available-for-sale securities	58		58		—		—
Warrant participations	423		—		—		423
Marketable securities—held-to-maturity:
Commercial paper	$	50,932	$	50,932	$	—	$	—
U.S. Treasury Bills	21,352		21,352		—		—
Government agency bonds	45,909		45,909		—		—
Certificates of deposit	21,823		21,823		—		—
Total marketable securities	$	140,016	$	140,016	$	—	$	—

As of December 31, 2013, $38.3 million of marketable securities had contractual maturities which were less than one year and $6.1 million of marketable securities had contractual maturities greater than one year. Held-to-maturity securities are carried at amortized cost, which, due to the short-term maturity of these instruments, approximates fair value using quoted prices in active markets for identical assets or liabilities defined as Level 1 inputs under the fair value hierarchy.

The Company recognized impairment charges of $11.2 million and $5.0 million related to PixelOptics for the years ended December 31, 2013 and 2012, respectively. The fair market value of the Company’s equity ownership in PixelOptics was determined to be $0 at December 31, 2013 based on Level 3 inputs as defined above.  The inputs and valuation techniques used were primarily an evaluation of discounted cash flows for PixelOptics.

The Company’s Penn Mezzanine warrant participations are carried at fair value. The value of the Company’s holdings in warrant participations is measured by reference to Level 3 inputs. The inputs and valuation techniques used include discounted cash flows and valuation of comparable public companies. The Company recognized gains of $1.1 million and $0.2 million associated with mark-to-market adjustments related to its warrant participations with Penn Mezzanine in the years ended December 31, 2013 and 2012, respectively, which are reflected in Other income (loss), net in the Consolidated Statements of Operations.

The Company recognized an impairment charge of $1.8 million related to its ownership interest in the management company of Penn Mezzanine for the year ended December 31, 2013. The fair market value of the Company’s ownership interest in Penn Mezzanine was determined to be $1.3 million based on Level 3 inputs as described above. The inputs and valuation techniques used were primarily an evaluation of the future cash flows associated with the Company's interest in the management company of Penn Mezzanine.

The Company recognized impairment charges of $0.3 million and $2.5 million related to its Penn Mezzanine debt and equity participations in the years ended December 31, 2013 and 2012, respectively, measured as the amount by which the carrying value of the Company’s participation in the debt and equity interests acquired by Penn Mezzanine exceeded their estimated fair values. The fair market values of the Company's participating interests in debt and equity acquired by Penn Mezzanine were determined based on Level 3 inputs as defined above. The inputs and valuation techniques used included discounted cash flows and valuations of comparable public companies.

The Company’s ownership interests in NuPathe are accounted for at fair value. In February 2013, the Company converted its 2,500 shares of preferred stock units, acquired in October 2012, into 2.5 million shares of common stock in NuPathe. The preferred stock units had been valued using Level 3 inputs. The fair value of the Company’s ownership interest in NuPathe’s common stock was measured using quoted market prices for NuPathe’s common stock as traded on the NASDAQ Capital Market, which is considered a Level 1 input under the valuation hierarchy. The fair value of the Company’s ownership interest in NuPathe’s warrants and options was measured using a Black-Scholes option pricing model, which is based on Level 3 inputs as defined above.

The Company recognized impairment charges of $0.3 million and $0.4 million related to a legacy private equity fund for the years ended December 31, 2013 and 2012, respectively, measured as the amount by which the carrying value of the

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Company’s interest in the fund exceeded its estimated fair value. The fair market value of the Company’s interest in the fund was determined to be $1.7 million at December 31, 2013 based on the fair value of the Company’s pro rata portion of the fund’s net assets, which is a Level 3 input under the fair value hierarchy.

5. Property and Equipment

Property and equipment consisted of the following:

	As of December 31,
	2013			2012
	(In thousands)
Building and improvements	$	607		$	607
Office equipment	1,039			1,002
	1,646			1,609
Accumulated depreciation	(1,508		)	(1,416		)
	$	138		$	193

6. Convertible Debentures and Credit Arrangements

The carrying values of the Company’s convertible senior debentures were as follows:

	As of December 31,
	2013			2012
	(In thousands)
Convertible senior debentures due 2018	$	49,478		$	48,483
Convertible senior debentures due 2024	441			441
Convertible senior debentures due 2014	29			67
	49,948			48,991
Less: current portion	(470		)	—
Convertible senior debentures — non-current	$	49,478		$	48,991

Convertible Senior Debentures due 2018

In November 2012, Safeguard issued $55.0 million principal amount of its 5.25% convertible senior debentures due 2018 (the “2018 Debentures”). Proceeds from the offering were used to repurchase substantially all of the Company's then outstanding 10.125% convertible senior debentures due 2014 (the “2014 Debentures”). The repurchase of the 2014 Debentures resulted in a loss on repurchase of $7.9 million which is reflected in Other income (loss), net in the Consolidated Statement of Operations for the year ended December 31, 2012. Interest on the 2018 Debentures is payable semi-annually on May 15 and November 15.

Holders of the 2018 Debentures may convert their notes prior to November 15, 2017 at their option only under the following circumstances:

• during any calendar quarter commencing after the calendar quarter ending on December 31, 2012, if the last reported sale price of the common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

• during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on such trading day;

• if the notes have been called for redemption; or

• upon the occurrence of specified corporate events.

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On or after November 15, 2017 until the close of business on the second business day immediately preceding the maturity date, holders may convert their notes at any time, regardless of whether any of the foregoing conditions have been met. Upon conversion, the Company will satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company’s election.

The conversion rate of the 2018 Debentures is 55.17 shares of common stock per $1,000 principal amount of debentures, equivalent to a conversion price of approximately $18.13 per share of common stock. The closing price of the Company’s common stock at December 31, 2013 was $20.09.

On or after November 15, 2016, the Company may redeem for cash any of the 2018 Debentures if the last reported sale price of the Company’s common stock exceeds 140% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on the trading day before the date that notice of redemption is given, including the last trading day of such period. Upon any redemption of the 2018 Debentures, the Company will pay a redemption price of 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption, and additional interest, if any.

The 2018 Debentures holders have the right to require the Company to repurchase the 2018 Debentures if the Company undergoes a fundamental change, which includes the sale of all or substantially all of the Company’s common stock or assets; liquidation; dissolution; a greater than 50% change in control; the delisting of the Company’s common stock from the New York Stock Exchange or the NASDAQ Global Market (or any of their respective successors); or a substantial change in the composition of the Company’s board of directors as defined in the governing agreement. Holders may require that the Company repurchase for cash all or part of their debentures at a fundamental change repurchase price equal to 100% of the principal amount of the debentures to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

Because the 2018 Debentures may be settled in cash or partially in cash upon conversion, the Company separately accounts for the liability and equity components of the 2018 Debentures. The carrying amount of the liability component was determined at the transaction date by measuring the fair value of a similar liability that does not have an associated equity component. The carrying amount of the equity component represented by the embedded conversion option was determined by deducting the fair value of the liability component from the initial proceeds of the 2018 Debentures as a whole. At December 31, 2013, the fair value of the $55.0 million outstanding 2018 Debentures was approximately $69.9 million, based on the midpoint of the bid and ask prices as of such date. At December 31, 2013, the carrying amount of the equity component was $6.4 million, the principal amount of the liability component was $55.0 million, the unamortized discount was $5.5 million and the net carrying value of the liability component was $49.5 million. The Company is amortizing the excess of the face value of the 2018 Debentures over their carrying value over their term as additional interest expense using the effective interest method and recorded $1.0 million and $0.1 million of such expense for the years ended December 31, 2013 and 2012, respectively. The effective interest rate on the 2018 Debentures is 8.7%.

Convertible Senior Debentures due 2024

In 2004, the Company issued an aggregate of $150.0 million in face value of convertible senior debentures with a stated maturity date of March 15, 2024 (the “2024 Debentures”). At December 31, 2013, the fair value of the $0.4 million outstanding 2024 Debentures approximated their carrying value, based on the midpoint of bid and ask prices as of such date. Interest on the 2024 Debentures is payable semi-annually. At the debentures holders’ option, the 2024 Debentures are convertible into the Company’s common stock through March 14, 2024, subject to certain conditions. The adjusted conversion rate of the 2024 Debentures is $43.3044 of principal amount per share. The remaining 2024 Debentures holders have the right to require the Company to repurchase the 2024 Debentures on March 20, 2014 or March 20, 2019 at a repurchase price equal to 100% of their face amount, plus accrued and unpaid interest. In limited circumstances, the Company has the right to redeem all or some of the 2024 Debentures.

Convertible Senior Debentures due 2014

In March 2010, the Company issued an aggregate of $46.9 million of the 2014 Debentures. As noted above, in November 2012, the Company repurchased substantially all of the 2014 Debentures for $58.7 million plus accrued interest. The remaining $29 thousand outstanding principal amount of the 2014 Debentures is due and payable on March 15, 2014.

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Credit Arrangements

The Company is party to a loan agreement with a commercial bank which provides it with a revolving credit facility in the maximum aggregate amount of $50 million in the form of borrowings, guarantees and issuances of letters of credit (subject to a $20 million sublimit). Actual availability under the credit facility is based on the amount of cash maintained at the bank as well as the value of the Company’s public and private partner company interests. This credit facility bears interest at the prime rate for outstanding borrowings, subject to an increase in certain circumstances. Other than for limited exceptions, the Company is required to maintain all of its depository and operating accounts and the lesser of $80 million or 75% of its investment and securities accounts at the bank. The credit facility, as amended, matures on December 31, 2014. Under the credit facility, the Company provided a $6.3 million letter of credit expiring on March 19, 2019 to the landlord of CompuCom Systems, Inc.’s Dallas headquarters which has been required in connection with the sale of CompuCom Systems in 2004. Availability under the Company’s revolving credit facility at December 31, 2013 was $43.7 million.

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	As of December 31,
	2013		2012
	(In thousands)
Accrued interest	$	366	$	335
Other	2,065		2,266
	$	2,431	$	2,601

8. Equity

Preferred Stock

Shares of preferred stock, par value $0.10 per share, are voting and are issuable in one or more series with rights and preferences as to dividends, redemption, liquidation, sinking funds and conversion determined by the Board of Directors. At December 31, 2013 and 2012, there were one million shares authorized and none outstanding.

9. Stock-Based Compensation

Equity Compensation Plans

Under the amended and restated 2004 Equity Compensation Plan, employees, executive officers, directors and consultants are eligible for grants of stock options, restricted stock awards, stock appreciation rights, stock units, performance units and other stock-based awards. The 2004 Equity Compensation Plan has 2.2 million shares authorized for issuance. The 2001 Associates Equity Compensation Plan, with 0.9 million shares authorized for issuance, and the 1999 Equity Compensation Plan, with 1.5 million shares authorized for issuance, expired by their terms and no further grants may be made under those plans. During 2013 and 2011, the Company issued 70 thousand and 85 thousand options, respectively, outside of existing plans as inducement awards in accordance with New York Stock Exchange rules.

To the extent allowable, service-based options are incentive stock options. Options granted under the plans are at prices equal to or greater than the fair market value at the date of grant. Upon exercise of stock options, the Company issues shares first from treasury stock, if available, then from authorized but unissued shares. At December 31, 2013, the Company had reserved 2.9 million shares of common stock for possible future issuance under its equity compensation plans.

Classification of Stock-Based Compensation Expense

Stock-based compensation expense was recognized in the Consolidated Statements of Operations as follows:

	Year Ended December 31,
	2013		2012		2011
	(In thousands)
General and administrative expense	$	1,821	$	2,014	$	3,052
	$	1,821	$	2,014	$	3,052

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At December 31, 2013, the Company had outstanding options that vest based on three different types of vesting schedules:

1) market-based;

2) performance-based; and

3) service-based.

Market-based awards entitle participants to vest in a number of options determined by achievement by the Company of certain target market capitalization increases (measured by reference to stock price increases on a specified number of outstanding shares) over an eight-year period. The requisite service periods for the market-based awards are based on the Company’s estimate of the dates on which the market conditions will be met as determined using a Monte Carlo simulation model. Compensation expense is recognized over the requisite service periods using the straight-line method but is accelerated if market capitalization targets are achieved earlier than estimated. During the years ended December 31, 2013, 2012 and 2011, the Company did not issue any market-based option awards to employees. During the year ended December 31, 2011, 110 thousand market-based options vested based on achievement of market capitalization targets. No market-based options vested during 2013 or 2012. During the years ended December 31, 2013, 2012 and 2011, respectively, 554 thousand, 6 thousand and 125 thousand market-based options were canceled or forfeited. The Company recorded compensation expense related to these option awards of $0.2 million, $0.4 million and $1.2 million during the years ended December 31, 2013, 2012 and 2011, respectively. Depending on the Company’s stock performance, the maximum number of unvested shares at December 31, 2013 attainable under these grants was 402 thousand shares.

Performance-based awards entitle participants to vest in a number of awards determined by achievement by the Company of target capital returns based on net cash proceeds received by the Company upon the sale, merger or other exit transaction of certain identified partner companies. Vesting may occur, if at all, once per year. The requisite service periods for the performance-based awards are based on the Company’s estimate of when the performance conditions will be met. Compensation expense is recognized for performance-based awards for which the performance condition is considered probable of achievement. Compensation expense is recognized over the requisite service periods using the straight-line method but is accelerated if capital return targets are achieved earlier than estimated. During the years ended December 31, 2013, 2012 and 2011, respectively, the Company issued 41 thousand, 180 thousand and 193 thousand performance-based options to employees. During the years ended December 31, 2012 and 2011, 14 thousand and 56 thousand options vested based on the achievement of capital return targets. During the year ended December 31, 2013, no options vested based on the achievement of capital return targets. During the years ended December 31, 2013, 2012 and 2011, respectively, 398 thousand, 6 thousand and 108 thousand performance-based option awards were canceled or forfeited. The Company recorded compensation expense related to these option awards of $0.0 million, $0.2 million and $0.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. The maximum number of unvested shares at December 31, 2013 attainable under these grants was 452 thousand shares.

All other outstanding options are service-based awards that generally vest over four years after the date of grant and expire eight years after the date of grant. Compensation expense is recognized over the requisite service period using the straight-line method. The requisite service period for service-based awards is the period over which the award vests. During the years ended December 31, 2013, 2012 and 2011, respectively, the Company issued 43 thousand, 113 thousand and 121 thousand service-based option awards to employees. During the years ended December 31, 2013, 2012 and 2011, respectively, 14 thousand, one thousand and 60 thousand service-based options were canceled or forfeited. The Company recorded compensation expense related to these awards of $0.5 million, $0.7 million and $0.8 million during the years ended December 31, 2013, 2012 and 2011, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The fair value of the Company’s stock-based awards to employees was estimated at the date of grant using the Black-Scholes option-pricing model. The risk-free rate is based on the U.S. Treasury yield curve in effect at the end of the quarter in which the grant occurred. The expected term of stock options granted was estimated using the historical exercise behavior of employees. Expected volatility was based on historical volatility measured using weekly price observations of the Company’s common stock for a period equal to the stock option’s expected term. Assumptions used in the valuation of options granted in each period were as follows:

	Year Ended December 31,
	2013		2012		2011
Service-Based Awards
Dividend yield	0	%	0	%	0	%
Expected volatility	52	%	56	%	57	%
Average expected option life	5 years		5 years		5 years
Risk-free interest rate	1.3	%	0.8	%	1.4	%
	Year Ended December 31,
	2013		2012		2011
Performance-Based Awards
Dividend yield	0	%	0	%	0	%
Expected volatility	46	%	55	%	57	%
Average expected option life	4.7 years		5.5 years		5.8 years
Risk-free interest rate	1.8	%	0.8	%	0.9	%

The weighted-average grant date fair value of options issued by the Company during the years ended December 31, 2013, 2012 and 2011 was $6.83, $7.45 and $8.28 per share, respectively.

Option activity of the Company is summarized below:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(In thousands)				(In years)	(In thousands)
Outstanding at December 31, 2010	3,321		$	9.83
Options granted	314		16.55
Options exercised	(124	)	11.32
Options canceled/forfeited	(293	)	11.03
Outstanding at December 31, 2011	3,218		10.32
Options granted	293		14.91
Options exercised	(211	)	10.22
Options canceled/forfeited	(13	)	13.48
Outstanding at December 31, 2012	3,287		10.72
Options granted	120		15.61
Options exercised	(612	)	8.44
Options canceled/forfeited	(967	)	9.38
Outstanding at December 31, 2013	1,828		12.51		3.91	$	12,586
Options exercisable at December 31, 2013	822		11.67		2.52	6,334
Options vested and expected to vest at December 31, 2013	1,566		12.23		3.37	11,192
Shares available for future grant	598

The total intrinsic value of options exercised for the years ended December 31, 2013, 2012 and 2011 was $3.9 million, $1.2 million and $0.9 million, respectively.

At December 31, 2013, total unrecognized compensation cost related to non-vested stock options granted under the plans for service-based awards was $0.7 million. That cost is expected to be recognized over a weighted-average period of 2.7 years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At December 31, 2013, the Company had recognized substantially all compensation cost related to stock options granted under the plans for market-based awards.

At December 31, 2013, total unrecognized compensation cost related to non-vested stock options granted under the plans for performance-based awards was $2.3 million. That cost is expected to be recognized over a weighted-average period of 1.9 years but would be accelerated if stock price targets are achieved earlier than estimated.

During the years ended December 31, 2013, 2012 and 2011, respectively, the Company issued 83 thousand, 90 thousand and 61 thousand performance-based stock units to employees which vest based on achievement by the Company of target capital returns based on net cash proceeds received by the Company on the sale, merger or other exit transaction of certain identified partner companies, as described above related to performance-based option awards. Performance-based stock units represent the right to receive shares of the Company’s common stock, on a one-for-one basis. During the years ended December 31, 2013, 2012 and 2011, respectively, the Company issued 28 thousand, 30 thousand and 20 thousand restricted shares to employees. The restricted shares issued vest 25% on the first anniversary of grant and the remaining 75% thereafter in equal monthly installments over the next three years.

During the years ended December 31, 2013, 2012, and 2011, respectively, the Company issued 48 thousand, 25 thousand and 28 thousand deferred stock units to non-employee directors for annual service grants or fees earned during the preceding quarter. Deferred stock units issued to directors in lieu of directors fees are 100% vested at the grant date; matching deferred stock units equal to 25% of directors’ fees deferred vest one year following the grant date or, if earlier, upon reaching age 65. Deferred stock units are payable in stock on a one-for-one basis. Payments related to the deferred stock units are generally distributable following termination of employment or service, death or permanent disability.

During the years ended December 31, 2013 and 2012, the Company granted eight thousand and five thousand shares, respectively, to members of its advisory boards, and recorded compensation expense of $0.1 million in each year related to these awards. No such awards were granted in 2011.

Total compensation expense for deferred stock units, performance-based stock units and restricted stock was approximately $1.1 million, $0.7 million and $0.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. Unrecognized compensation expense related to deferred stock units, performance stock units and restricted stock at December 31, 2013 was $3.3 million. The total fair value of deferred stock units, performance stock units and restricted stock vested during the years ended December 31, 2013, 2012 and 2011 was $1.1 million, $0.9 million and $2.0 million, respectively.

Deferred stock unit, performance-based stock unit and restricted stock activity are summarized below:

	Shares		Weighted Average Grant Date Fair Value
	(In thousands)
Unvested at December 31, 2011	253		$	13.10
Granted	151		15.00
Vested	(53	)	13.58
Forfeited	(4	)	13.67
Unvested at December 31, 2012	347		13.85
Granted	167		17.45
Vested	(67	)	16.73
Forfeited	(130	)	13.35
Unvested at December 31, 2013	317		15.34

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

10. Other Income (Loss), Net

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Loss on repurchase of convertible debentures	$	—		$	(7,895	)	$	—
Gain on sale of companies and funds, net	—			9,004			—
Gain (loss) on mark-to-market of holdings in fair value method partner companies	(915		)	11,035			—
Impairment charges on cost method partner companies and private equity funds	(250		)	(350		)	—
Gain on mark-to-market of Penn Mezzanine warrants	1,146			264			—
Impairment charges on Penn Mezzanine loan and equity participations	(295		)	(2,489		)	—
Other than temporary impairment on available-for-sale securities	(43		)	(260		)	(7,451		)
Other	740			29			1,306
	$	383		$	9,338		$	(6,145	)

11. Income Taxes

The federal and state provision (benefit) for income taxes was $0.0 million for the years ended December 31, 2013, 2012 and 2011.

The total income tax provision (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 35% to net income (loss) before income taxes as a result of the following:

	Year Ended December 31,
	2013		2012		2011
Statutory tax (benefit) expense	(35.0	)%	(35.0	)%	35.0	%
Increase (decrease) in taxes resulting from:
Valuation allowance	34.7		34.7		(35.3	)
Other adjustments	0.3		0.3		0.3
	0.0	%	0.0	%	0.0	%

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets were as follows:

	As of December 31,
	2013			2012
	(In thousands)
Deferred tax asset:
Carrying values of partner companies and other holdings	$	59,045		$	52,602
Tax loss and credit carryforwards	82,403			75,369
Accrued expenses	2,043			1,860
Stock-based compensation	5,005			7,942
Other	1,560			1,557
	150,056			139,330
Valuation allowance	(150,056		)	(139,330		)
Net deferred tax liability	$	—		$	—

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of December 31, 2013, the Company and its subsidiaries consolidated for tax purposes had federal net operating loss carryforwards of approximately $224.3 million. These carryforwards expire as follows:

	Total
	(In thousands)
2014	$	—
2015	—
2016	—
2017	—
2018 and thereafter	224,307
	$	224,307

In assessing the recoverability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has determined that it is more likely than not that certain future tax benefits may not be realized as a result of current and future income. Accordingly, a valuation allowance has been recorded against substantially all of the Company’s deferred tax assets.

The Company recognizes in its Consolidated Financial Statements the impact of a tax position if that position is more likely than not to be sustained upon examination, based on the technical merits of the position. All uncertain tax positions relate to unrecognized tax benefits that would impact the effective tax rate when recognized.

The Company does not expect any material increase or decrease in its income tax expense, in the next twelve months, related to examinations or changes in uncertain tax positions.

There were no changes in the Company’s uncertain tax positions for the years ended December 31, 2013, 2012 and 2011.

The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. Tax years 2010 and forward remain open for examination for federal tax purposes and tax years 2008 and forward remain open for examination for the Company’s more significant state tax jurisdictions. To the extent utilized in future years’ tax returns, net operating loss carryforwards at December 31, 2013 will remain subject to examination until the respective tax year is closed. The Company recognizes penalties and interest accrued related to income tax liabilities in income tax benefit (expense) in the Consolidated Statements of Operations.

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12. Net Income (Loss) Per Share

The calculations of net income (loss) per share were:

	Year Ended December 31,
	2013			2012			2011
	(In thousands except per share data)
Basic:
Net income (loss)	$	(35,525	)	$	(39,362	)	$	110,597
Average common shares outstanding	21,362			20,974			20,764
Net income (loss) per share	$	(1.66	)	$	(1.88	)	$	5.33
Diluted:
Net income (loss)	$	(35,525	)	$	(39,362	)	$	110,597
Interest on convertible senior debentures	—			—			5,750
Net income (loss) for diluted per share calculation	$	(35,525	)	$	(39,362	)	$	116,347
Number of shares used in basic per share computation	21,362			20,974			20,764
Effect of dilutive securities:
Convertible senior debentures	—			—			3,009
Unvested restricted stock and DSUs	—			—			60
Employee stock options	—			—			689
Number of shares used in diluted per share computation	21,362			20,974			24,522
Net income (loss) per share	$	(1.66	)	$	(1.88	)	$	4.74

Basic and diluted average common shares outstanding for purposes of computing net income (loss) per share includes outstanding common shares and vested deferred stock units (DSUs).

If a consolidated or equity method partner company has dilutive stock options, unvested restricted stock, DSUs, or warrants, diluted net income (loss) per share is computed by first deducting from net income (loss) the income attributable to the potential exercise of the dilutive securities of the partner company from net loss. Any impact is shown as an adjustment to net income (loss) for purposes of calculating diluted net income (loss) per share.

The following potential shares of common stock and their effects on income were excluded from the diluted net loss per share calculation because their effect would be anti-dilutive:

• At December 31, 2013, 2012 and 2011, options to purchase 1.8 million, 3.3 million and 0.1 million shares of common stock, respectively, at prices ranging from $3.93 to $18.80 per share, $3.93 to $18.80 per share and $18.78 to $21.36 per share were excluded from the calculation.

• At December 31, 2013 and 2012, unvested restricted stock units, performance stock units and DSUs convertible into 0.3 million shares of stock were excluded from the calculations.

• For the years ended December 31, 2013 and 2012, 3.0 million shares of common stock representing the effect of assumed conversion of the 2018 Debentures were excluded from the calculations.

13. Related Party Transactions

In May 2001, the Company entered into a $26.5 million loan agreement with Warren V. Musser, a former Chairman and Chief Executive Officer of the Company. Through December 31, 2013, the Company recognized impairment charges against the loan of $15.7 million. The Company’s efforts to collect Mr. Musser’s outstanding loan obligation have included the sale of existing collateral, obtaining and selling additional collateral, litigation and negotiated resolution. Since 2001 and through December 31, 2013, the Company has received a total of $16.9 million in payments on the loan. In December 2011, the loan documents were amended to take into account accumulated unpaid interest and to make certain other changes related to collateral, maturity dates and other terms.

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The Company received cash from the sale of collateral in 2011 in the amount of $0.1 million and no payments in 2013 or 2012. The carrying value of the loan at December 31, 2013 was zero.

In the normal course of business, the Company’s directors, officers and employees hold board positions with partner and other companies in which the Company has a direct or indirect ownership interest.

14. Commitments and Contingencies

The Company and its partner companies are involved in various claims and legal actions arising in the ordinary course of business. While in the current opinion of the Company the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations, no assurance can be given as to the outcome of these actions, and one or more adverse rulings could have a material adverse effect on the Company’s consolidated financial position and results of operations or that of its partner companies. The Company records costs associated with legal fees as such services are rendered.

The Company leases its corporate headquarters and office equipment under leases expiring at various dates to 2017. Total rental expense under operating leases was $0.6 million, $0.6 million and $0.5 million in 2013, 2012 and 2011, respectively. At December 31, 2013, the Company has future minimum lease payments of $0.5 million for the year ending December 31, 2014 and $0.4 million for the year ending December 31, 2015 under non-cancelable operating leases with initial or remaining terms of one year or more.

The Company had outstanding guarantees of $3.8 million at December 31, 2013 which related to one of the Company's private equity holdings.

The Company also has committed capital of approximately $0.1 million to another private equity fund. This commitment is expected to be funded during the next 12 months.

Under certain circumstances, the Company may be required to return a portion or all the distributions it received as a general partner of a private equity fund (“clawback”). The maximum clawback the Company could be required to return due to our general partner interest is approximately $1.3 million, of which $1.0 million was reflected in Accrued expenses and other current liabilities and $0.3 million was reflected in Other long-term liabilities on the Consolidated Balance Sheets at December 31, 2013. The Company’s ownership in the fund is 19%. The clawback liability is joint and several; therefore the Company may be required to fund the clawback for other general partners should they default. The Company believes its potential liability due to the possibility of default by other general partners is remote.

In connection with the Company’s May 2008 sale of its equity and debt interests in Acsis, Inc., Alliance Consulting Group Associates, Inc., Laureate Biopharma, Inc., ProModel Corporation and Neuronyx, Inc. (the “Bundle Transaction”), an aggregate of $6.4 million of the gross proceeds of the sale were placed in escrow pending the expiration of a predetermined notification period, subject to possible extension in the event of a claim against the escrowed amounts. On April 25, 2009, the purchaser in the Bundle Transaction notified the Company of claims being asserted against the entire escrowed amounts. In April 2013, the claim was tried on the merits and the verdict in the case denied the purchaser's claims against the escrowed funds. The escrow funds were released to the Company in June 2013.

In connection with the Bundle Transaction, the Company agreed to continue its guarantee of the Laureate Biopharma, Inc. Princeton, New Jersey facility lease, subject to certain conditions. During the year ended December 31, 2013, the Company obtained the release of its obligation at no expense to the Company.

In October 2001, the Company entered into an agreement with a former Chairman and Chief Executive Officer of the Company, to provide for annual payments of $0.65 million per year and certain health care and other benefits for life. The related current liability of $0.8 million was included in Accrued expenses and other current liabilities and the long-term portion of $2.6 million was included in Other long-term liabilities on the Consolidated Balance Sheet at December 31, 2013.

The Company provided a $6.3 million letter of credit expiring on March 19, 2019 to the landlord of CompuCom Systems, Inc.’s Dallas headquarters as required in connection with the sale of CompuCom Systems in 2004.

The Company has agreements with certain employees that provide for severance payments to the employee in the event the employee is terminated without cause or an employee terminates his employment for “good reason.” The maximum aggregate exposure under the agreements was approximately $2.4 million at December 31, 2013. During the second quarter of 2013, a Company executive terminated his employment for "good reason." As a result of the termination, the Company

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

recognized a severance charge of $0.9 million. During the year ended December 31, 2013, all the payments required to be made by the Company related to the severance charge were paid.

15. Supplemental Cash Flow Information

During the years ended December 31, 2013 and 2012, the Company converted $1.8 million and $0.4 million, respectively, of advances to partner companies into ownership interests in partner companies. Cash payments for interest in the years ended December 31, 2013, 2012 and 2011 were $2.9 million, $0.8 million and $0.4 million, respectively. In addition, during each of the years ended December 31, 2012 and 2011, interest payments of $4.8 million on the 2014 Debentures were made using restricted cash equivalents. Cash paid for taxes in the years ended December 31, 2013, 2012 and 2011 was $0.0 million in each year.

16. Operating Segments

As of December 31, 2013, the Company held interests in 22 non-consolidated partner companies which are included in the Healthcare and Technology segments. Included in the Penn Mezzanine segment are the Company's interests in the Penn Mezzanine management company and the general partner and the Company's participations in mezzanine loans and equity interests initiated by Penn Mezzanine.

The Company’s active partner companies as of December 31, 2013 by segment were as follows for the years ended December 31, 2013, 2012 and 2011:

Healthcare

	Safeguard Primary Ownership as of December 31,
Partner Company	2013	2012	2011	Accounting Method
AdvantEdge Healthcare Solutions, Inc.	40.1%	40.2%	40.2%	Equity
Alverix, Inc.	48.5%	49.2%	49.6%	Equity
Crescendo Bioscience, Inc.	12.6%	12.6%	NA	Cost
Dabo Health, Inc.	8.0%	NA	NA	Cost
Good Start Genetics, Inc.	30.0%	30.0%	26.3%	Equity
Medivo, Inc.	34.5%	30.0%	30.0%	Equity
NovaSom, Inc.	30.3%	30.3%	30.3%	Equity
NuPathe Inc.	16.5%	17.8%	17.8%	Fair value (1)
Putney, Inc.	27.6%	27.6%	27.6%	Equity
Quantia, Inc.	35.1%	NA	NA	Equity
Sotera Wireless, Inc.	7.3%	NA	NA	Cost

(1) The Company’s ownership interest in NuPathe was accounted for as available-for-sale securities following NuPathe’ s completion of an initial public offering in August 2010. In October 2012, the Company participated in a private placement of NuPathe preferred stock units, and in conjunction with this financing the Company placed two persons on NuPathe’s board of directors. As a result, the Company determined that it exercised significant influence over NuPathe which made the equity method of accounting applicable to its ownership interests. Instead, the Company elected the fair value option beginning in October 2012.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Technology

	Safeguard Primary Ownership as of December 31,
Partner Company	2013	2012	2011	Accounting Method
AppFirst, Inc.	34.3%	35.0%	NA	Equity
Apprenda, Inc.	22.0%	NA	NA	Equity
Beyond.com, Inc.	38.2%	38.3%	38.3%	Equity
Bridgevine, Inc.	22.7%	21.7%	22.8%	Equity
Clutch Holdings, Inc.	24.0%	NA	NA	Equity
DriveFactor, Inc.	40.6%	35.4%	23.9%	Equity
Hoopla Software, Inc.	25.3%	25.3%	28.0%	Equity
Lumesis, Inc.	44.2%	31.6%	NA	Equity
MediaMath, Inc.	22.5%	22.2%	22.4%	Equity
Pneuron Corporation	27.6%	NA	NA	Equity
Spongecell, Inc.	23.0%	23.1%	NA	Equity

As of December 31, 2013, the Penn Mezzanine segment includes a 36% ownership interest in the management company and general partner of Penn Mezzanine L.P. The Company accounts for its interest under the equity method.

Results of the Healthcare and Technology segments reflect the equity income (loss) of their respective equity method partner companies, other income (loss) associated with fair value method and cost method partner companies and the gains or losses on the sale of their respective partner companies. Results of the Penn Mezzanine segment includes interest, dividend and participation fees earned on the mezzanine interests in which the Company participates as well as equity income (loss) associated with the Company’s management company and general partner interest in the Penn Mezzanine platform.

Management evaluates its Healthcare and Technology segments’ performance based on net loss which is based on the number of partner companies accounted for under the equity method, the Company’s voting ownership percentage in these partner companies and the net results of operations of these partner companies and any impairment charges or gain (loss) on the sale of, or mark-to-market, of partner companies.

Management evaluates the Penn Mezzanine segment performance based on the performance of the mezzanine interests in which the Company participates. This includes an evaluation of the current and future cash flows associated with interest and dividend payments as well as estimated losses based on evaluating known and inherent risks in the investments in which the Company participates.

Other Items include certain expenses which are not identifiable to the operations of the Company’s operating business segments. Other Items primarily consist of general and administrative expenses related to corporate operations, including employee compensation, insurance and professional fees, including legal and finance, interest income, interest expense, other income (loss) and equity income (loss) related to certain private equity fund ownership interests. Other Items also include income taxes, which are reviewed by management independent of segment results.

As of December 31, 2013 and 2012, all of the Company’s assets were located in the United States.

Segment assets in Other Items included primarily cash, cash equivalents, cash held in escrow and marketable securities of $183.7 million and $212.5 million at December 31, 2013 and 2012, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following represents segment data from operations:

							For the Year Ended December 31, 2013
	Healthcare			Technology				Penn Mezzanine			Total Segments			Other Items			Total
	(In thousands)
Operating loss	$	—		$	—			$	(15	)	$	(15	)	$	(21,629	)	$	(21,644	)
Interest income	—			—				1,506			1,506			1,140			2,646
Equity income (loss)	(31,706		)	20,899				(2,096		)	(12,903		)	296			(12,607		)
Net income (loss)	(32,563		)	20,899				888			(10,776		)	(24,749		)	(35,525		)
Segment Assets:
December 31, 2013	74,939			69,471				12,783			157,193			188,803			345,996
							For the Year Ended December 31, 2012
	Healthcare			Technology				Penn Mezzanine			Total Segments			Other Items			Total
	(In thousands)
Operating loss	$	—		$	—			$	(10	)	$	(10	)	$	(19,463	)	$	(19,473	)
Interest income	—			—				1,505			1,505			1,421			2,926
Equity income (loss)	(26,544		)	(119		)		(317		)	(26,980		)	463			(26,517		)
Net loss	(6,660		)	(119		)		(1,136		)	(7,915		)	(31,447		)	(39,362		)
Segment Assets:
December 31, 2012	83,500			58,753				12,153			154,406			219,738			374,144
							For the Year Ended December 31, 2011
								Penn Mezzanine			Total Segments			Other Items
	Healthcare			Technology													Total
	(In thousands)
Operating loss	$	—		$	—			$	—		$	—		$	(21,168	)	$	(21,168	)
Interest income	—			—				210			210			1,214			1,424
Equity income (loss)	121,299			21,454				(71		)	142,682			(225		)	142,457
Net income (loss)	114,063			21,478				139			135,680			(25,083		)	110,597

Net loss from Other Items was as follows:

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Corporate operations	$	(24,749	)	$	(31,447	)	$	(25,083	)
Income tax benefit (expense)	—			—			—
	$	(24,749	)	$	(31,447	)	$	(25,083	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

17. Selected Quarterly Financial Information (Unaudited)

	Three Months Ended
	March 31			June 30			September 30			December 31
	(In thousands except per share data)
2013:
General and administrative expense	$	5,374		$	6,715		$	4,835		$	4,720
Operating loss	(5,374		)	(6,715		)	(4,835		)	(4,720		)
Other income (loss), net	757			(2,724		)	(4,224		)	6,574
Interest income	734			790			572			550
Interest expense	(1,069		)	(1,074		)	(1,077		)	(1,083		)
Equity income (loss)	(6,987		)	(18,400		)	(9,866		)	22,646
Net income (loss) before income taxes	(11,939		)	(28,123		)	(19,430		)	23,967
Income tax benefit (expense)	—			—			—			—
Net income (loss)	$	(11,939	)	$	(28,123	)	$	(19,430	)	$	23,967
Net income (loss) per share (a)
Basic	$	(0.57	)	$	(1.33	)	$	(0.90	)	$	1.10
Diluted	$	(0.57	)	$	(1.33	)	$	(0.90	)	$	0.99
2012:
General and administrative expense	$	4,743		$	5,148		$	4,790		$	4,792
Operating loss	(4,743		)	(5,148		)	(4,790		)	(4,792		)
Other income, net	3,084			4,819			91			1,344
Interest income	899			595			696			736
Interest expense	(1,452		)	(1,456		)	(1,461		)	(1,267		)
Equity loss	(7,448		)	(8,947		)	(3,293		)	(6,829		)
Net loss before income taxes	(9,660		)	(10,137		)	(8,757		)	(10,808		)
Income tax benefit (expense)	—			—			—			—
Net loss	$	(9,660	)	$	(10,137	)	$	(8,757	)	$	(10,808	)
Net loss per share (a)
Basic	$	(0.46	)	$	(0.48	)	$	(0.42	)	$	(0.51	)
Diluted	$	(0.46	)	$	(0.48	)	$	(0.42	)	$	(0.51	)

(a) Per share amounts for the quarters have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period. Additionally, in regard to diluted per share amounts only, quarterly amounts may not add to the annual amounts because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive, and because of the adjustments to net income (loss) for the dilutive effect of partner company common stock equivalents and convertible securities.

18. Subsequent Events

In February 2014, Crescendo Bioscience was acquired by Myriad Genetics, Inc. The Company received approximately $38.4 million in cash proceeds in connection with the transaction, excluding $3.2 million which will be held in escrow for 15 months.

In February 2014, NuPathe was acquired by Teva Pharmaceutical Industries Ltd. for $3.65 per share in cash. In addition to the upfront cash payment, NuPathe shareholders received rights to receive additional cash payments of up to $3.15 per share if specified milestones are achieved over time. The Company received initial net cash proceeds of $23.1 million as a result of the transaction. Depending on the achievement of the milestones, the Company may receive up to an additional $24.2 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In January 2014, Alverix was acquired by Becton, Dickinson and Company. The Company received cash proceeds of $15.7 million, excluding $1.7 million which will be held in escrow for approximately 18 months.    

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2013. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of December 31, 2013 are functioning effectively.

Our business strategy involves the acquisition of new businesses on an ongoing basis, most of which are young, growing companies. Typically, these companies historically have not had all of the controls and procedures they would need to comply with the requirements of the Exchange Act and the rules promulgated thereunder. These companies also frequently develop new products and services. Following an acquisition, or the launch of a new product or service, we work with the company’s management to implement all necessary controls and procedures.

(b) Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013. In making this assessment, management used the framework established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As a result of this assessment and based on the criteria in the COSO framework, management has concluded that, as of December 31, 2013, the Company’s internal control over financial reporting was effective.

Our independent registered public accounting firm, KPMG LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2013. Their opinion on the effectiveness of our internal control over financial reporting and their opinion on our Consolidated Financial Statements are included in Item 8 in this Form 10-K.

(c) Change in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

71

Item 9B. Other Information

None

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Incorporated by reference to the portions of our Definitive Proxy Statement entitled “Election of Directors,” “Corporate Governance and Board Matters” and “Section 16(a) Beneficial Ownership Reporting Compliance.” Information about our Executive Officers is included in Annex to Part I above.

Item 11.Executive Compensation

Incorporated by reference to the portions of our Definitive Proxy Statement entitled “Compensation Discussion and Analysis,” “Compensation Committee Report” and “Executive Compensation.”

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Incorporated by reference to the portion of our Definitive Proxy Statement entitled “Stock Ownership of Certain Beneficial Owners, Directors and Officers” and "Securities Authorized for Issuance Under Equity Compensation Plans."

Item 13. Certain Relationships and Related Transactions, and Director Independence

Incorporated by reference to the portions of the Definitive Proxy Statement entitled “Corporate Governance Principles and Board Matters – ‘Board Independence’ and “Review and Approval of Transactions with Related Persons.”

Item 14. Principal Accountant Fees and Services

Incorporated by reference to the portion of the Definitive Proxy Statement entitled “Independent Public Accountant – Audit Fees.”

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Consolidated Financial Statements and Schedules

Incorporated by reference to Item 8 of this Report on Form 10-K.

(b) Exhibits

The exhibits required to be filed as part of this Report are listed in the exhibit index below.

(c) Financial Statement Schedules

The financial statements as of and for the years ended December 31, 2012 and 2011 and as of and for the six months ended June 30, 2013 of PixelOptics, Inc., a former equity method partner company, are included in this Form 10-K pursuant to Rule 3-09 of Regulation S-X.

The financial statements as of and for the years ended December 31, 2012 and 2011 and as of and for the nine months ended September 30, 2013 of NuPathe Inc., a former fair value method partner company, are incorporated by reference in this Form 10-K pursuant to Rule 3-09 of Regulation S-X.

The financial statements of PixelOptics for periods subsequent to June 30, 2013 are not being filed with this Form 10-K because they are not available.  PixelOptics filed for Chapter 7 bankruptcy on November 4, 2013 and released all employees. The financial statements of PixelOptics as of and for the year ended December 31, 2012 are unaudited because PixelOptics does not have any employees to provide necessary representations and respond to inquiries from PixelOptics' auditor.

The financial statements of NuPathe for periods subsequent to September 30, 2013 are not being filed with this Form 10-K because they are not available.  NuPathe was acquired by Teva Pharmaceuticals Industries Ltd. on February 21, 2014.

Exhibits

The following is a list of exhibits required by Item 601 of Regulation S-K filed as part of this Report. For exhibits that previously have been filed, the Registrant incorporates those exhibits herein by reference. The exhibit table below includes the Form Type and Filing Date of the previous filing and the location of the exhibit in the previous filing which is being incorporated by reference herein. Documents which are incorporated by reference to filings by parties other than the Registrant are identified in footnotes to this table.

		Incorporated Filing Reference
Exhibit Number	Description	Form Type & Filing Date	Original Exhibit Number
3.1.1	Seconded Amended and Restated Articles of Incorporation of Safeguard Scientifics, Inc.	Form 8-K 10/25/07	3.1
3.1.2	Amendment to Seconded Amended and Restated Articles of Incorporation of Safeguard Scientifics, Inc.	Form 8-K 8/27/09	3.1
3.1.3	Statement with Respect to Shares	Registration Statement on Form S-4 12/17/10	3.1.3
3.2	Amended and Restated By-laws of Safeguard Scientifics, Inc.	Form 8-K 10/25/07	3.2
4.1	Indenture, dated as of February 18, 2004, between Safeguard Scientifics, Inc. and Wachovia Bank, National Association, as trustee, including the form of 2.625% Convertible Senior Debentures due 2024	Form 10-K 3/15/04	4.10
4.2	Indenture, dated as of March 26, 2010, by and between Safeguard Scientifics, Inc. and U.S. Bank, National Association	Form 8-K 3/30/10	4.1
4.3	Global Note representing 10.125% Convertible Senior Debentures due March 15, 2014	Form 8-K 3/30/10	4.2
4.4	Escrow Agreement, dated as of March 26, 2010, by and among Safeguard Scientifics, Inc., U.S. Bank, National Association (as trustee) and U.S. Bank, National Association (in its capacity as escrow agent)	Form 8-K 3/30/10	4.3

73

4.5	Indenture, dated as of November 19, 2012, between Safeguard Scientifics, Inc. and U.S. Bank National Association, as trustee	Form 8-K 11/20/12	4.1
10.1*	Safeguard Scientifics, Inc. 1999 Equity Compensation Plan, as amended and restated on October 21, 2008	Form 10-Q 11/6/08	10.4
10.2	Safeguard Scientifics, Inc. 2001 Associates Equity Compensation Plan, as amended and restated on October 21, 2008	Form 10-Q 11/6/08	10.5
10.3*	Safeguard Scientifics, Inc. 2004 Equity Compensation Plan, as amended and restated on July 13, 2009 (attached to the Company’s Definitive Proxy Statement filed on July 23, 2009)	Form 10-K 3/16/10	10.3
10.4*	Safeguard Scientifics, Inc. Executive Deferred Compensation Plan (amended and restated as of January 1, 2009)	Form 10-K 3/19/09	10.4
10.5*	Management Incentive Plan	Form 8-K 4/25/08	10.1
10.6*†	Compensation Summary — Non-employee Directors	—	—
10.7.1*	Letter Agreement between Peter J. Boni and Safeguard Scientifics, Inc. dated as of November 12, 2012	Form 8-K 11/13/12	10.1
10.8.1*	Agreement by and between Safeguard Scientifics, Inc. and Stephen Zarrilli dated as of May 28, 2008	Form 8-K 5/29/08	10.1
10.8.2*	Letter Amendment dated December 9, 2008, to Agreement by and between Safeguard Scientifics, Inc. and Stephen Zarrilli dated as of May 28, 2008	Form 10-K 3/19/09	10.9.2
10.8.3*	Compensation Agreement by and between Safeguard Scientifics, Inc. and Stephen T. Zarrilli dated December 28, 2012	Form 10-K 3/11/13	10.9.3
10.9.1*	Amended and Restated Letter Agreement by and between Safeguard Scientifics, Inc. and Brian J. Sisko dated December 3, 2008	Form 10-K 3/19/09	10.12
10.9.2*	Compensation Agreement by and between Safeguard Scientifics, Inc. and Brian J. Sisko dated December 14, 2009	Form 10-K 3/16/10	10.11.2
10.9.3*	Compensation Agreement by and between Safeguard Scientifics, Inc. and Brian J. Sisko dated December 28, 2012	Form 10-K 3/11/13	10.10.3
10.10.1*	Compensation Agreement by and between Safeguard Scientifics, Inc. and Jeffrey B. McGroarty dated January 6, 2014	Form 8-K 1/7/14	10.1
10.11.1*	Key Employee Compensation Recoupment Policy	Form 10-Q 7/26/13	10.2
10.12.1	Amended and Restated Loan and Security Agreement dated as of May 27, 2009, by and among Silicon Valley Bank, Safeguard Scientifics, Inc., Safeguard Delaware, Inc. and Safeguard Scientifics (Delaware), Inc.	Form 8-K 5/28/09	10.1
10.12.2	Joinder and First Loan Modification Agreement dated as of December 31, 2010, by and among Silicon Valley Bank, Safeguard Scientifics, Inc., Safeguard Delaware, Inc., Safeguard Scientifics (Delaware), Inc. and Safeguard Delaware II, Inc.	Form 8-K 1/4/11	10.1
10.12.3	Second Loan Modification Agreement dated as of April 29, 2011, by and among Silicon Valley Bank, Safeguard Scientifics, Inc., Safeguard Delaware, Inc., Safeguard Scientifics (Delaware), Inc. and Safeguard Delaware II, Inc.	Form 10-Q 7/28/11	10.2
10.12.4	Third Loan Modification Agreement dated as of December 21, 2012, by and among Silicon Valley Bank, Safeguard Scientifics, Inc., Safeguard Delaware, Inc., Safeguard Delaware II, Inc. and Safeguard Scientifics (Delaware), Inc.	Form 8-K 12/27/12	10.1
10.13	Purchase and Sale Agreement dated as of December 9, 2005 by and among HarbourVest VII Venture Ltd., Dover Street VI L.P. and several subsidiaries and affiliated limited partnerships of Safeguard Scientifics, Inc.	Form 10-K 3/13/06	10.36
10.14	Consent Agreement, dated as of May 17, 2011, by and among Shire Pharmaceuticals, Inc. and certain stockholders of Advanced BioHealing, Inc.	Form 8-K 5/18/11	10.1
14.1 †	Code of Business Conduct and Ethics	—	—
21.1 †	List of Subsidiaries	—	—
23.1 †	Consent of Independent Registered Public Accounting Firm — KPMG LLP	—	—
23.2 †	Consent of Independent Registered Public Accounting Firm — KPMG LLP	—	—
31.1 †	Certification of Stephen T. Zarrilli pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934	—	—
31.2 †	Certification of Jeffrey B. McGroarty pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934	—	—
32.1 ‡	Certification of Stephen T. Zarrilli pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	—	—
32.2 ‡	Certification of Jeffrey B. McGroarty pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	—	—
99.1 †	Unaudited Financial Statements of PixelOptics	—	—

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99.2 †	Unaudited Condensed Financial Statements of PixelOptics	—	—
99.3 †	Financial Statements of NuPathe Inc.	(1)	—
99.4 †	Unaudited Financial Statements of NuPathe Inc.	(2)	—
101	The following materials from Safeguard Scientifics, Inc. Annual Report on Form 10-K for the year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language); (i) Consolidated Balance Sheets - December 31, 2013 and 2012; (ii) Consolidated Statements of Operations - Years ended December 31, 2013, 2012 and 2011; (iii) Consolidated Statements of Comprehensive Income (Loss) - Years ended December 31, 2013, 2012 and 2011; (iv) Consolidated Statements of Changes in Equity - Years ended December 31, 2013, 2012 and 2011; (v) Consolidated Statements of Cash Flows - Years ended December 31, 2013, 2012 and 2011; and (vi) Notes to Consolidated Financial Statements.	—	—

† Filed herewith

‡ Furnished herewith

* These exhibits relate to management contracts or compensatory plans, contracts or arrangements in which directors and/or executive officers of the Registrant may participate.

(1) Incorporated by reference to Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2012 filed by NuPathe Inc. (SEC file No. 001-34836).

(2) Incorporated by reference to Part I, Item 1 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 filed by NuPathe Inc. (SEC file No. 001-34836).

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SAFEGUARD SCIENTIFICS, INC.
By:	STEPHEN T. ZARRILLI
	STEPHEN T. ZARRILLI
	President and Chief Executive Officer

Dated: March 7, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature		Title	Date
STEPHEN T. ZARRILLI	President and Chief Executive Officer and Director (Principal Executive Officer)		March 7, 2014
Stephen T. Zarrilli
JEFFREY B. MCGROARTY	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)		March 7, 2014
Jeffrey B. McGroarty
JULIE A. DOBSON		Director	March 7, 2014
Julie A. Dobson
KEITH B. JARRETT		Director	March 7, 2014
Keith B. Jarrett
ANDREW E. LIETZ		Chairman of the Board of Directors	March 7, 2014
Andrew E. Lietz
GEORGE MACKENZIE		Director	March 7, 2014
George MacKenzie
GEORGE D. MCCLELLAND		Director	March 7, 2014
George D. McClelland
JACK L. MESSMAN		Director	March 7, 2014
Jack L. Messman
JOHN J. ROBERTS		Director	March 7, 2014
John J. Roberts
ROBERT J. ROSENTHAL		Director	March 7, 2014
Robert J. Rosenthal

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EX-10.6

EXHIBIT 10.6

SAFEGUARD SCIENTIFICS, INC.

COMPENSATION SUMMARY – NON-EMPLOYEE DIRECTORS

Effective January 1, 2014, non-employee directors are compensated for their service as a director as shown in the table below:

Compensation Item	Amount
Annual Cash Board Retainers:       Chairman of the Board       Other Directors Additional Annual Cash Chair Retainers:       Audit Committee Chair       Capital Management Committee Chair       Compensation Committee Chair       Nominating & Corporate Governance Committee Chair Cash Meeting Attendance Fees:       Committee Meetings	$ 80,000      50,000      15,000      15,000      10,000      10,000        1,500

We also reimburse non-employee directors for expenses they incur to attend Board and Committee meetings and for attendance at one director continuing education program during each calendar year or the reasonable cost of one year’s membership in an organization which is focused on director education.

Each non-employee director receives a stock option to purchase 8,333 shares of Safeguard common stock upon initial election to the Board. A director’s initial stock option has an eight-year term and vests 25% each year commencing on the first anniversary of the grant date. The stock option exercise price is equal to the average of the high and low trading prices of a share of our common stock, as reported on the NYSE composite tape, on the grant date. Each non-employee director also receives an annual service grant of 5,000 deferred stock units. The deferred stock units vest fully on the first anniversary of the grant date or once a director reaches age 65, if earlier. The deferred stock units represent the right to receive shares of Safeguard common stock, on a one-for-one basis, following the date upon which a director leaves the Safeguard Board.

Safeguard maintains a Group Deferred Stock Unit Program for Directors (“Directors’ DSU Program”) which allows each director, at his or her election, to receive deferred stock units in lieu of cash retainers and meeting fees paid to each director for service on the Board and its committees (“Directors’ Fees”). The deferral election applies to Directors’ Fees to be received for the following calendar year and remains in effect for each subsequent year unless the director elects otherwise by the end of the calendar year prior to the year in which the services are rendered. The number of deferred stock units awarded is determined by dividing the Directors’ Fees deferred by the fair market value of Safeguard’s stock on the date on which the director otherwise would have received the Directors’ Fees. Each director also receives a number of matching deferred stock units, based on the same fair market value calculation, equal to 25% of the Directors’ Fees deferred. A director is always fully vested in Directors’ Fees deferred; the matching deferred stock units vest fully on the first anniversary of the date the matching deferred stock units are credited to the director’s account or, if earlier, once a director reaches age 65. Each deferred stock unit entitles the director to receive one share of Safeguard common stock following the date upon which the director leaves the Safeguard Board. A director also may elect to receive the stock in annual installments over a period of up to five years after leaving the Board.

EX-14.1

EXHIBIT 14.1

SAFEGUARD SCIENTIFICS, INC.

CODE OF BUSINESS CONDUCT AND ETHICS

I. Background - Administration

The reputation and integrity of Safeguard Scientifics, Inc. (“Company”) is a valuable asset that is vital to our success.

Each Company employee, including each of the Company’s officers, and each Company director is responsible for conducting the Company’s business in a manner that demonstrates a commitment to the highest standards of integrity. This Code of Business Conduct and Ethics (“Code”), which applies to all directors, officers and employees of the Company (collectively referred to as “Company Personnel”), has been adopted to help Company Personnel meet these standards. Specifically, the purpose of this Code is to:

• encourage among Company Personnel a culture of honesty, accountability and mutual respect;

• provide guidance to help Company Personnel recognize and deal with ethical issues; and

• provide mechanisms for Company Personnel to report unethical conduct.

While this Code is designed to provide helpful guidelines, it is not intended to address every specific situation. Nevertheless, in every instance, we require that Company Personnel act honestly, fairly and with a view towards “doing the right thing.”

The Safeguard Scientifics, Inc. Board of Directors (“Safeguard Board”) is ultimately responsible for the implementation of the Code. The Safeguard Board has designated Brian J. Sisko, or his successor, to be the compliance officer (the “Compliance Officer”) for the implementation and administration of the Code. Company Personnel should feel free to direct questions concerning this Code to the Compliance Officer:

Safeguard Scientifics, Inc.

Attention: Compliance Officer

435 Devon Park Drive, Building 800

Wayne, PA 19087-1945

e-mail address: complianceofficer@safeguard.com

II. Overview

It is the policy of the Company to: (a) comply with all applicable governmental laws, rules and regulations; (b) expect that all Company Personnel at all times observe honest and ethical conduct in the performance of their responsibilities, including the avoidance of conflicts of interest; (c) expect all Company Personnel to treat others with dignity, including other employees, shareholders, customers and vendors; and (d) encourage and support internal disclosure of any violation of this Code for appropriate action.

The Code governs the business-related conduct of all Company Personnel, including, but not limited to, the chief executive officer, chief financial officer and all other officers of Safeguard. Directors of the Company who are not employees are subject to this Code only as it relates to their capacities as directors.

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III. Compliance With Law

A variety of laws apply to the Company and its operations. Company Personnel are expected to comply with all such laws, as well as rules and regulations adopted under such laws. Examples of criminal violations under these laws include:

• stealing, embezzling or misapplying corporate or bank funds;

• using threats, physical force or other unauthorized means to collect money;

• making false entries in the books and records of the Company, or engaging in any conduct that results in the making of such false entries;

• making a payment for an expressed purpose on the Company’s behalf to an individual who intends to use it for a different purpose;

• utilizing the Company’s funds or other assets or services to make a political contribution or expenditure; and

• making payments, whether corporate or personal, of cash or other items of value that are intended to influence the judgment or actions of political candidates, government officials or businesses in connection with any of the Company’s activities.

The Company must and will report all suspected criminal violations to the appropriate authorities for possible prosecution and will investigate, address and report to governmental or other authorities, as appropriate, non-criminal violations.

IV. Conflicts of Interest

Company Personnel are expected to make or participate in business decisions and actions in the course of their employment with the Company based on the best interests of the Company as a whole, and not based on personal relationships or personal benefits. A conflict of interest, which can occur or appear to occur in a wide variety of situations, can compromise the business ethics of Company Personnel. Generally speaking, a conflict of interest occurs when the personal interest of Company Personnel or members of their immediate family interferes with, or has the potential to interfere with, the interests or business of the Company. For example, a conflict of interest may occur where an employee or a family member receives a gift, a unique advantage, or an improper personal benefit as a result of the employee’s position at the Company. A conflict of interest could make it difficult for such person to perform corporate duties objectively and effectively because he or she is involved in a competing interest. The following is a discussion of certain common areas that raise conflict of interest issues. However, a conflict of interest can occur in a variety of situations. Company Personnel must be alert to recognize any situation that may raise conflict of interest issues and must disclose to the Compliance Officer any material transaction or relationship that reasonably could be expected to give rise to actual or apparent conflicts of interest with the Company.

Outside Activities/Employment – Any outside activity must not significantly encroach on the time and attention Company Personnel devote to their corporate duties and should not adversely affect the quality or quantity of their work. In addition, Company Personnel may not make use of corporate equipment, facilities or supplies, or imply (without the Company’s approval) the Company’s sponsorship or endorsement of any outside activity, and under no circumstances are Company Personnel permitted to take for themselves or their family members business opportunities that are discovered or made available by virtue of their positions at the Company. Moreover, unless the Audit Committee of the Company’s Board of Directors shall have approved or ratified a particular transaction or situation in accordance with the Company’s Statement of Policy with Respect to Related Party Transactions, Company Personnel may not (i) have any financial or economic interest in (a) any entity that is, or to such person’s knowledge may become, a vendor to, or customer or competitor of, the Company or any of its partner companies; or (b) any entity that otherwise has or may have a relationship with, or might expect financial or other support from, the Company (including, but not limited to, any of its partner companies) or a partner company; or (ii) provide services to or perform services for the benefit of any such entity, other than services

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performed at the request of or on behalf of the Company. For purposes of clarity and consistency, the preceding sentence shall be interpreted to include the purchase or other acquisition by any Company Personnel of any financial or economic interest in a partner company or proposed partner company of the Company, whether directly or through a public market transaction, or otherwise. Company employees are prohibited from taking part in any outside employment without Safeguard’s prior written approval.

Notwithstanding the foregoing, other than relating to a partner company of the Company, Company Personnel generally may have (i) a passive investment in up to five percent of the total outstanding shares of an entity that is listed on a national or international exchange, the OTC Bulletin Board or a similar quotation service or (ii) a limited partnership interest in a private equity, venture capital or similar fund constituting less than five percent of such fund’s committed capital, provided that the investment is not so large financially either in absolute dollars or as a percentage of the person’s total net worth that it creates the appearance of a conflict of interest.

Directors of the Company who are not employees of the Company must be sensitive to situations in which they may be associated with, or have business or financial interests in, corporations or other business entities that, from time to time, have business dealings with the Company or which may compete with the Company. While these relationships and interests are not prohibited, they should be avoided where reasonably practicable. Any Company director who becomes engaged in such a relationship or interest must promptly bring it to the attention of the Chairperson of the Safeguard Board. The Chairperson shall promptly refer such matter to the full Safeguard Board or an appropriately authorized committee of the Safeguard Board for consideration and appropriate disposition. If a conflict cannot be avoided, it must be managed in an ethical and responsible manner.

Civic/Political Activities– Company Personnel are encouraged to participate in civic, charitable or political activities so long as such participation does not encroach on the time and attention they are expected to devote to their Company-related duties. Such activities are to be conducted in a manner that does not involve the Company or its assets or facilities and does not create an appearance of the Company’s sponsorship or endorsement.

Inventions, Books and Publications– Company employees must receive written permission from the Compliance Officer before developing, outside of the Company, any products, software or intellectual property that may be related to the Company’s current or potential business.

Proper Payments – Company Personnel should pay for and receive only that which is proper. Company Personnel should not make or promise payments to influence another’s acts or decisions, and Company employees must not give gifts beyond those extended in normal business.

Gifts– Company Personnel and members of their families must not give or receive valuable gifts (including gifts of equipment or money, discounts, or favored personal treatment) to or from any person associated with Safeguard’s vendors or customers. Acceptance of a gift in the nature of a memento, such as a conference gift or other inconsequential gift valued at less than five hundred dollars ($500), is permitted. Engaging in normal, occasional business-related entertainment, such as meals or the use of sporting, theatrical or other public event tickets, is permissible with the understanding that it is expected that Company Personnel will exercise sound judgment in reliance on this exception so as to avoid any situation that may otherwise be subject to question.

Loans to Directors and Employees – The Company will not make loans or extend credit guarantees to or for the personal benefit of directors and executive officers except as permitted by law and the listing standards of any exchange or quotation system on which the Company’s common stock is listed. Loans or guarantees may be extended to other employees only with the Company’s approval.

Insider Trading – Company Personnel are prohibited from trading in securities while in possession of material, nonpublic information. Among other things, trading while in possession of material, nonpublic

3

information can subject the person to criminal or civil penalties. The Company has adopted a Statement of Company Policy for Insider Trading and Disclosure (the “Insider Trading Policy”) and requires all Company Personnel to sign a statement acknowledging that they have read, understand and will comply with the policies set forth therein.

V. Fair Dealing

Company Personnel should deal fairly and in good faith with each other and the Company’s customers, suppliers, regulators, business partners and others. Company Personnel may not take unfair advantage of anyone through manipulation, misrepresentation, inappropriate threats, fraud, abuse of confidential information or other related conduct.

VI. Proper Use of Company Assets

As a general rule, Company assets, including facilities, equipment, materials, supplies, time, information, intellectual property, software, and other assets owned or leased by the Company, or that are otherwise in the Company’s possession, may be used only for legitimate business purposes. However, the Company makes an exception for incidental personal use (e.g., telephone calls to a friend or family member, sending a personal e-mail message, accessing the Web, etc.) provided that such incidental personal use is legal, ethical, appropriate and does not interfere with the conscientious performance of an employee's duties.

VII. Delegation of Authority

Company Personnel, and particularly each of the Company’s officers and other managerial employees, must exercise due care to ensure that any delegation of authority is reasonable and appropriate in scope and includes appropriate and continuous monitoring.

VIII. Handling Confidential Information

Company Personnel have an obligation to protect and keep confidential all nonpublic information related to the Company (“Confidential Information”) unless and until its disclosure is approved by the Company and one full business day has passed following its disclosure by the Company in publicly filed SEC reports, press releases, external website, other institutionalized methods of electronic communication, or where disclosure is otherwise mandated by law or regulation. Confidential Information includes all nonpublic information entrusted to or obtained by Company Personnel by virtue of their affiliation with or employment by the Company or their service on the Company’s Board of Directors. Confidential Information includes but is not limited to information relating to:

• the Company’s strategy, business, finances, prospects, plans, and operations;

• proposed mergers, acquisitions, divestitures, new business ventures, opportunities, partnerships or agreements;

• news of a pending initial or secondary public offering of securities, other public or private sales of securities, stock splits or tender offers;

• products, orders, contracts, customers, vendors or competitors;

• employee records;

• the proceedings, discussions and deliberations of the Board and its committees;

• discussions relating to the Company by and among employees, officers and directors; and

4

• third party confidential and proprietary information that has been provided to the Company and which the Company is under an obligation to maintain as confidential.

In addition, Company Personnel must safeguard proprietary information, which includes information that is not generally known to the public and has commercial value in the Company’s business. Proprietary information includes, among other things, software programs, source and object codes, trade secrets, ideas, techniques, inventions (whether patentable or not) and other information relating to designs, algorithms and research. It also includes information relating to marketing, pricing, customers, and terms of compensation for Company Personnel. The obligation to safeguard proprietary information continues even after employment or service with the Company ends.

Please keep in mind the following guidelines in order to protect Confidential Information:

• Do not discuss Confidential Information in public places.

• Do not forward Confidential Information or proprietary information to non-Company email accounts.

• Beware of informal telephone or email requests from outsiders requesting information (including but not limited to requests for comments on expected financial performance, information about current or former employees, or requests from the media).

The Company’s Statement of Company Policy on Insider Trading and Disclosure contains additional information concerning confidentiality obligations for Company Personnel.

IX. Public Disclosures

As a public company, the Company must ensure that its filings and submissions with the SEC and other public communications provide full, fair, timely, accurate and understandable disclosure. Company Personnel engaged in the preparation of these filings, submissions and communications (“Public Disclosure Personnel”) must endeavor to ensure that the Company’s filings, submissions, and communications meet these objectives. Depending on their duties and responsibilities, other employees may be called upon to provide information to assure that the Company’s reports are complete, fair and understandable. To this end, all transactions affecting assets, liabilities, stockholders’ equity, revenues and expenses must be recorded on a timely basis in detailed journals and must be traceable through the general ledger and resulting financial statements. Accounting and financial reporting practices must be fair and proper, in accordance with generally accepted accounting principles.

Company Personnel are expected to take this responsibility very seriously. Company Personnel are prohibited from (i) directly or indirectly taking any action to influence, coerce, manipulate or mislead the Company’s independent public accounting firm in the performance of an audit of the Company’s financial statements for the purpose of rendering the Company’s financial statements materially misleading; (ii) altering, mutilating or concealing a record, document or other object, or attempting to do so with intent to impair the object’s integrity or availability for use in an official proceeding; and (iii) using Company funds for any purpose other than as described in the documents supporting the disbursement.

If requested by Public Disclosure Personnel to provide information for use in such filings, submissions or communications, Company Personnel will provide, as promptly as practicable, accurate, understandable and complete information on a timely basis.

Complaints or concerns regarding accounting, internal accounting controls or auditing matters should be reported either to the Compliance Officer or to the Audit Committee of the Safeguard Board as indicated in Article X of this Code. You may choose to submit such complaints or concerns anonymously.

5

Special Ethics Guidelines for Employees with Financial Reporting Responsibilities

The Finance Department bears a special responsibility for promoting integrity throughout the organization, with responsibilities to Company stockholders. The Chief Executive Officer and Finance Department personnel have a special role both to adhere to these principles themselves and also to ensure that a culture exists throughout the Company as a whole that ensures the fair and timely reporting of Company financial results and condition, as well as other information required by SEC regulations. Because of this special role, the Chief Executive Officer and all members of Company’s Finance Department are bound by the following Special Ethics Guidelines for Employees with Financial Reporting Responsibilities.

The Chief Executive Officer and each member of the Finance Department will:

• Act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships.

• Provide to the Company’s other employees, consultants and advisors who are engaged in filing reports and documents with the SEC (“SEC Reports”) or in disseminating other public communications such as press releases, information that is accurate, complete, relevant, timely and understandable.

• Endeavor to ensure full, fair, timely, accurate and understandable disclosure in SEC Reports.

• Comply with laws, rules and regulations of federal, state and local governments, and appropriate self-regulatory organizations.

• Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing one’s independent judgment to be subordinated.

• Respect the confidentiality of information acquired in the course of one’s work except when authorized or otherwise legally obligated to disclose.

• Refrain from using Confidential Information acquired in the course of employment for personal advantage.

• Proactively promote and be an example of ethical behavior as a responsible partner among peers in the work environment.

• Achieve responsible use of and control over all assets and resources employed or entrusted.

• Record or participate in the recording of entries in the Company’s books and records that are accurate to the best of his or her knowledge.

• Promptly report to the Compliance Officer and/or the Chair of the Audit Committee any conduct that he or she believes to be a violation of law or business ethics or of any provision of this Code, including any transaction or relationship that reasonably could be expected to give rise to such a conflict.

Violations of these Special Ethics Guidelines for Employees with Financial Reporting Responsibilities, including failures to report potential violations by others, will be viewed as a severe disciplinary matter that may result in personnel action, including termination of employment. If you believe that a violation of the Special Ethics Guidelines for Employees with Financial Reporting Responsibilities has occurred, please contact the Chair of the Audit Committee.

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X. Report of Violations

Administration – General Policy Regarding Report of Violations – Company Personnel who observe, learn of, or, in good faith, suspect a violation of the Code must immediately report the violation either to his or her immediate supervisor (who in turn is responsible for informing the Compliance Officer of such report) or to the Compliance Officer (or, in connection with complaints or concerns regarding accounting, internal accounting controls or audit matters, may report the violation to the Audit Committee of the Safeguard Board). You may be subject to disciplinary action, including termination of employment, for failure to do so.

Complaint Procedure

• Notification of Complaint

• To report a violation or a suspected violation to the Compliance Officer, provide the report to the following address or e-mail address:

Safeguard Scientifics, Inc.

Attention: Compliance Officer

435 Devon Park Drive, Building 800

Wayne, PA 19087-1945

e-mail: complianceofficer@safeguard.com

• Complaints or concerns regarding accounting, internal accounting controls or auditing matters may also be submitted anonymously to the Audit Committee of the Safeguard Board in writing at the following address:

Safeguard Scientifics, Inc.

Attention: Chair, Audit Committee - CONFIDENTIAL

c/o Corporate Secretary

435 Devon Park Drive, Building 800

Wayne, PA 19087-1945

• Whenever practical, the complaint should be made in writing. It is unacceptable to submit a complaint knowing it is false.

• Company Personnel who are not comfortable using the procedures and protocols outlined above can make an anonymous report via our third party provider, MySafeWorkplace. This anonymous and confidential reporting system is not affiliated with the Company and is accessible 24/7 through the Internet (www.mysafeworkplace.com) or by calling the toll free number (800-461-9330).

• Investigation and Corrective Action

Reports of violations will promptly be investigated under the supervision of the Compliance Officer or, if appropriate, the Audit Committee. Company Personnel are required to cooperate fully in the investigation of reported violations and to provide truthful, complete and accurate information. The investigation will be handled as discreetly as reasonably possible, allowing for a fair investigation and any necessary corrective action. Appropriate corrective action will be taken whenever a violation of this policy is determined to have occurred. Depending on the nature of the violation, the offending individual can be subject to disciplinary action which may include termination. In addition, anyone who interferes with an investigation, or provides information in an investigation that the individual knows to be untrue or inaccurate, will be

7

subject to disciplinary action, which may include termination of employment. Any employee who submits a complaint relating to the handling of accounting, internal accounting controls or audit matters in good faith should have no fear of dismissal or retaliation of any kind. Retaliation against employees who, for lawful purposes, file a complaint or participate in an investigation is strictly prohibited.

The Audit Committee will be responsible for the acceptance, investigation and management of reports of suspected violations of this Code by the Chief Executive Officer, the Compliance Officer and employees with financial reporting responsibilities and reports of questionable or improper accounting or audit matters.

The Company’s Compliance Officer will be responsible for the acceptance, investigation and management of reports by attorneys regarding material violations of securities laws, fiduciary duties or similar laws.

• Confidentiality

Except as may be required by law or by the requirements of the resulting investigation or the corrective action, all notices, reports and information received under this process will be treated in a confidential manner. Every reasonable effort will be made to handle the matter with discretion and to protect the identity of those who make reports as well as those who are being investigated. However, the Compliance Officer regularly will report to the Audit Committee any violations that have been reported. Further, if necessary to conduct a proper review or to comply with legal requirements, our Audit Committee, independent accountants or others may become involved in the review process. Also, as noted above, the Company must and will report all suspected criminal violations to the appropriate authorities for possible prosecution and will investigate, address and report to governmental or other authorities, as appropriate, non-criminal violations.

XI. Protection Against Retaliation

Policy - The Company prohibits any form of retaliation against employees who, for lawful purposes, report to the Company any conduct or activity that may violate this Code, any law or regulation applicable to the Company, or any other suspected improper, unethical or illegal conduct or activities by anyone at the Company. The Company also prohibits any form of retaliation against employees who provide information, cause information to be provided, or assist in an investigation conducted by the Company or any governmental body regarding a possible violation of any law or regulation relating to fraud, any labor law, or any rule or regulation of the SEC, or who file, cause to be filed, or assist, participate or give testimony in any proceeding relating to an alleged violation of any such law, rule or regulation.

Management Responsibility - All Company officers and other managerial employees are responsible for ensuring adherence to this policy. In addition, each Company officer and managerial employee is responsible for communicating this policy to employees under his or her supervision and for supporting programs and practices designed to develop understanding of, commitment to and compliance with this policy. In the event that any Company officer, other managerial employee or supervisor believes that a violation of this policy has occurred or receives a report of a violation, he or she must immediately contact the Compliance Officer.

Procedures for Reporting Policy Violations - If an employee believes that he or she has been retaliated against (including threatened or harassed) in violation of this policy, he or she should immediately report the retaliation either to his or her immediate supervisor (who in turn is responsible for informing the Compliance Officer of such report) or to the Compliance Officer in accordance with the contact procedures for the Compliance Officer set forth above (or, in connection with retaliation related to

8

complaints or concerns regarding accounting, internal accounting controls or audit matters, may report the violation to the Audit Committee of the Safeguard Board in accordance with the contact procedures for the Audit Committee set forth above). Any employee who is not comfortable using the procedures and protocols outlined above can make an anonymous report via our third party provider, MySafeWorkplace. This anonymous and confidential reporting system is not affiliated with the Company and is accessible 24/7 through the Internet (www.mysafeworkplace.com) or by calling the toll free number (800.461.9330). Once an employee reports retaliation prohibited by this policy, the Company will promptly investigate the matter in accordance with the procedures described in Article X of this Code.

XII. Waivers

Requests for a waiver of a provision of the Code must be submitted in writing to the Compliance Officer for appropriate review, and an executive officer of Safeguard Scientifics, Inc., the Safeguard Board or an appropriate Safeguard Board committee will decide the outcome. For conduct involving directors and executive officers, only the Audit Committee of the Safeguard Board has the authority to waive a provision of the Code. The Audit Committee of the Safeguard Board must review and approve any “related party” transaction as defined in Item 404 of Regulation S-K, promulgated by the SEC, before it is consummated. In the event of an approved waiver involving the conduct of a director or executive officer, appropriate and prompt disclosure must be made to the Company’s shareholders as required by the SEC or other regulation or by applicable listing standards of the principal exchange or interdealer quotation system on which the Company’s common stock is listed.

Statements in the Code to the effect that certain actions may be taken only with “the Company’s approval” or that certain items will be “designated by the Company” will be interpreted to mean that appropriate executive officers of Safeguard Scientifics, Inc. or members of the Safeguard Board must give prior written approval or make such designation before the proposed action may be undertaken or the proposed designation may be made.

Violations of the Special Ethics Guidelines for Employees with Financial Reporting Responsibilities contained in this Code that go unaddressed are treated by the SEC as implicit waivers of this Code. Accordingly, any violation that is discovered and not addressed will have to be disclosed in accordance with the rules and regulations of the SEC and applicable listing standards with respect to a waiver of this Code. In such cases, the applicable SEC rules will require disclosure of the nature of any violation, the date of the violation and the name of the person who committed the violation. Such disclosure would not only be harmful to the Company but also to you either as one who is responsible for monitoring the enforcing compliance with this Code or as one who has violated it. In either case, depending on the nature of the violation, you may be dismissed or your duties and responsibilities with the Company may be changed.

XIII. Compliance

Adherence to Code; Disciplinary Action – All Company Personnel have a responsibility to understand and follow this Code. In addition, all Company Personnel are expected to perform their work with honesty and integrity in all areas not specifically addressed in this Code. A violation of this policy or the Code may result in appropriate disciplinary action, including the possible termination from employment with the Company.

Communications; Training; Annual Certification – The Company strongly encourages dialogue among employees and their supervisors to make everyone aware of situations that give rise to ethical questions and to articulate acceptable ways of handling those situations. Company employees will receive periodic training on the contents and importance of the Code and related policies and the manner in which violations must be reported and waivers must be requested. All Company Personnel must certify that they have read this Code and to the best of their knowledge are in compliance with all its provisions. In addition, each director, officer and other managerial employee of the Company, as may be designated by

9

the Company from time to time, has an obligation to annually certify that he or she has read and reviewed this Code with his or her subordinates. Forms of these certifications are attached to this Code as Appendices I and II.

Responsibility of Senior Employees – All Company officers and other managerial employees will be responsible for the enforcement of, and compliance with, this Code, including necessary distribution to assure Company employee knowledge and compliance. Directors, officers and other managerial employees are expected to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. Managerial employees may be disciplined if they condone misconduct, do not report misconduct, do not take reasonable measures to detect misconduct, or do not demonstrate the appropriate leadership to insure compliance.

XIV. Related Policies; Enforceable by Company Only

This Code should be read in conjunction with Safeguard’s other policy statements, including but not limited to the Statement of Company Policy on Insider Trading and Disclosure. This Code is for the benefit of the Company, and no other person or entity is entitled to enforce this Code. This Code does not, and should not be interpreted to, create any private cause of action or remedy in any other person or entity for a violation of the Code. In addition, this Code should not be construed as a contract of employment and does not change any person's employment status.

Adopted:     April 8, 2004

Last Approved: October 22, 2013

10

APPENDIX I

INITIAL CODE OF BUSINESS CONDUCT AND ETHICS DISCLOSURE STATEMENT

As a director, officer or other employee of Safeguard Scientifics, Inc. (“Company”), I have read and understand the Company’s Code of Business Conduct and Ethics (“Code”), and I hereby affirm my agreement to comply with its terms. I hereby certify as follows:

1. I have received a copy of the Code.

2. I have read, understand and agree to comply with the Code.

3. I am currently in compliance and, as applicable, members of my family are in compliance, with the terms of the Code and all obligations imposed by it, except as disclosed to the Compliance Officer or as otherwise disclosed in accordance with the procedures contained in Article X of the Code.

4. I am not aware of any conduct on the part of any person associated with the Company that may constitute a violation of the Code, except with respect to any matters that I may have disclosed to the Compliance Officer or otherwise disclosed in accordance with the procedures contained in Article X of the Code.

5. I understand that none of the benefits, policies, programs, procedures or statements in the Code are intended to confer any rights or privileges upon me or entitle me to be or remain an employee of the Company. I am aware that the Code is not a contract and is subject to change at any time, without notice, at the sole discretion of the Company.

I understand that all Disclosure Statements may be available to the Compliance Officer, the Company’s Board of Directors, and internal and external legal counsel. Such information shall otherwise be held in confidence in accordance with Article X of the Code.

Each person signing a Disclosure Statement is responsible for keeping his/her Disclosure Statement current. These statements will be kept in Safeguard’s Legal Department.

____________________________

Signature

____________________________

Name

____________________________

Date

11

APPENDIX II

ANNUAL CODE OF BUSINESS CONDUCT AND ETHICS DISCLOSURE STATEMENT

As a director, officer or other employee of Safeguard Scientifics, Inc. (“Company”), I have read and understand the Company’s Code of Business Conduct and Ethics (“Code”), and I hereby reaffirm my agreement to comply with its terms. With respect to the last 12 months, I hereby certify as follows:

1. I have complied and, as applicable, members of my family have complied, with the terms of the Code and all obligations imposed by it, except as disclosed to the Compliance Officer or as otherwise disclosed in accordance with the procedures contained in Article X of the Code.

2. I have read and reviewed the Code with my subordinates and I am not aware of any conduct on the part of any person associated with the Company that may constitute a violation of the Code of Conduct, except with respect to any matters that I may have disclosed to the Compliance Officer or otherwise disclosed in accordance with the procedures contained in Article X of the Code.

3. I understand that none of the benefits, policies, programs, procedures or statements in the Code are intended to confer any rights or privileges upon me or entitle me to be or remain an employee of the Company. I am aware that the Code is not a contract and is subject to change at any time, without notice, at the sole discretion of the Company.

I understand that all Disclosure Statements may be available to the Compliance Officer, the Company’s Board of Directors, and internal and external legal counsel. Such information shall otherwise be held in confidence except in accordance with Article X of the Code.

Each person signing a Disclosure Statement is responsible for keeping his/her Disclosure Statement current. These statements will be kept in Safeguard’s Legal Department.

_____________________________

Signature

_____________________________

Name

_____________________________

Date

12

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF SAFEGUARD SCIENTIFICS, INC.

Exclusive of immaterial subsidiaries and companies in which the Registrant holds a minority interest, as of March 7, 2014, the Registrant had the following subsidiaries:

NAME	PLACE OF INCORPORATION
Bonfield VII, Ltd.	British Virgin Islands
Novitas Capital Management, L.P.	Delaware
Novitas Capital II Management, L.P.	Pennsylvania
Safeguard Capital Management, Inc.	Delaware
Safeguard Delaware, Inc.	Delaware
Safeguard Delaware II, Inc.	Delaware
Safeguard Fund Management, Inc.	Delaware
Safeguard PM SPV, Inc.	Delaware
Safeguard Scientifics (Delaware), Inc.	Delaware
Safeguard Technologies, Inc.	Delaware
SFE Properties, Inc.	Delaware
SSI Management Company, Inc.	Delaware
SSI Partnership Holdings (Pennsylvania), Inc.	Pennsylvania

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of DirectorsSafeguard Scientifics, Inc.:

We consent to the incorporation by reference in the registration statements (Nos.  333-65092, 333-73284, 333-86777, 333-103976, 333-118046, 333-147174, 333-171225, 333-171226, 333-175845 and 333-191911) on Form S-8, in the registration statements (Nos. 333-114794 and 333-171224) on Form S-3, and in the registration statement (No. 333-171223) on Form S-4 of Safeguard Scientifics, Inc. of our reports dated March 7, 2014, with respect to the consolidated balance sheets of Safeguard Scientifics, Inc. and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the years in the three-year period ended December 31, 2013, and the effectiveness of internal control over financial reporting as of December 31, 2013, which reports appear in the December 31, 2013 annual report on Form 10-K of Safeguard Scientifics, Inc.

/s/ KPMG LLP

Philadelphia, PennsylvaniaMarch 7, 2014

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the registration statements (Nos.  333-65092, 333-73284, 333-86777, 333-103976, 333-118046, 333-147174, 333-171225, 333-171226, 333-175845 and 333-191911) on Form S-8, in the registration statements (Nos. 333-114794 and 333-171224) on Form S-3, and in the registration statement (No. 333-171223) on Form S-4 of Safeguard Scientifics, Inc. of our report dated March 27, 2013 with respect to the balance sheets of NuPathe Inc. as of December 31, 2012 and 2011, and the related statements of operations, redeemable convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2012 and the period from January 7, 2005 (inception) through December 31, 2012, which report appears in the December 31, 2012 annual report on Form 10-K of NuPathe Inc.

Our report dated March 27, 2013 contains an explanatory paragraph that states that NuPathe Inc. has incurred recurring losses and negative cash flows from operations since its inception that raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of that uncertainty.

/s/ KPMG LLP

Philadelphia, PennsylvaniaMarch 7, 2014

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Stephen T. Zarrilli, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Safeguard Scientifics, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	SAFEGUARD SCIENTIFICS, INC.
Date: March 7, 2014	/s/ Stephen T. Zarrilli
	Stephen T. Zarrilli
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Jeffrey B. McGroarty, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Safeguard Scientifics, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	SAFEGUARD SCIENTIFICS, INC.
Date: March 7, 2014	/s/ Jeffrey B. McGroarty
	Jeffrey B. McGroarty
	Senior Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Safeguard Scientifics, Inc. (“Safeguard”) on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen T. Zarrilli, President and Chief Executive Officer of Safeguard, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, (15 U.S.C. 78m(a)); and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Safeguard.

	SAFEGUARD SCIENTIFICS, INC.
Date: March 7, 2014	/s/ Stephen T. Zarrilli
	Stephen T. Zarrilli
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Safeguard Scientifics, Inc. (“Safeguard”) on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey B. McGroarty, Senior Vice President and Chief Financial Officer of Safeguard, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, (15 U.S.C. 78m(a)); and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Safeguard.

	SAFEGUARD SCIENTIFICS, INC.
Date: March 7, 2014	/s/ Jeffrey B. McGroarty
	Jeffrey B. McGroarty
	Senior Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-99.1

Exhibit 99.1

PixelOptics, Inc.

(A Development Stage Company)

Unaudited Financial Statements

Years Ended December 31, 2012 and 2011 and

For the Period August 13, 2005 (date of inception) to December 31, 2012

Contents

Balance Sheets	2
Statements of Operations	3
Statements of Changes in Equity	4
Statements of Cash Flows	5
Notes to Financial Statements	6

1

PixelOptics, Inc.
(A Development Stage Company)
Unaudited Balance Sheets
(In Thousands, Except Share and per Share Data)
	December 31,
	2012	2011
Assets
Current assets:
Cash and cash equivalents	$ 211	$ 9,474
Accounts receivable – net	7	581
Inventory	–	1,702
Prepaid expenses	105	1,505
Total current assets	323	13,262
Property and equipment – net	3,042	2,562
Intangible assets	2,007	2,249
Other assets	210	255
Total assets	$ 5,582	$ 18,328
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$ 1,521	$ 1,827
Accrued expenses	3,528	1,909
Current portion of long-term debt and capital lease obligation	25,825	2,371
Warrant liability	1,971	–
Deferred revenue	1,339	1,090
Total current liabilities	34,184	7,197
Long-term debt – less current portion	3,944	7,519
Deferred revenue	6,284	7,461
Total long-term liabilities	10,228	14,980
Total liabilities	44,412	22,177
Stockholders’ equity:
8% noncumulative preferred stock:
Series D ($35,048 aggregate liquidation preference)	3	3
Series C ($30,000 aggregate liquidation preference)	2	2
Series B ($23,835 aggregate liquidation preference)	1	1
Series A-1 ($6,750 aggregate liquidation preference)	1	1
Series A ($8,951 aggregate liquidation preference)	1	1
Common stock ($0.0001 par value, 120,000,000 shares authorized,
7,731,719 and 7,673,803 shares issued and outstanding at
December 31, 2012 and 2011, respectively)	1	1
Additional paid-in capital	107,299	106,808
Accumulated deficit during the development stage	(146,138)	(110,666)
	(38,830)	(3,849)
Total liabilities and stockholders’ equity	$ 5,582	$ 18,328
See accompanying notes.

2

PixelOptics, Inc.
(A Development Stage Company)
Unaudited Statements of Operations
(In Thousands)
			August 13, 2005
			(Inception)
			Through
	Year Ended December 31,		December 31,
	2012	2011	2012
Revenue
Lenses	$ 45	$ 583	$ 2,789
License fee revenue	1,047	1,047	2,668
Government projects	–	–	2,977
Total revenue	1,092	1,630	8,434
Operating expenses
Cost of sales - lenses	3,614	4,963	10,477
Cost of sales - government projects	–	–	2,826
Quality assurance and warehouse	4,277	1,478	8,640
Research and development	6,813	9,484	58,162
Sales and marketing	6,947	11,151	31,887
General and administrative	7,865	5,856	31,943
Other operating expenses	3,801	1,664	6,160
Total operating expenses	33,317	34,596	150,095
Operating loss	(32,225)	(32,966)	(141,661)
Interest expense	(2,683)	(1,809)	(5,475)
Change in fair value of warrants	(566)	–	(566)
Other income	2	6	1,564
Provision for income taxes	–	–	–
Net loss	$ (35,472)	$ (34,769)	$ (146,138)
See accompanying notes.

3

PixelOptics, Inc.
(A Development Stage Company)
Unaudited Statements of Changes in Equity
(In Thousands)
		Additional		Additional	Accumulated
		Paid-In		Paid-In	Deficit During
		Capital		Capital	The
	Common	Common	Preferred	Preferred	Development
	Stock	Stock	Stock	Stock	Stage	Total
Balance (deficit) at August 13, 2005	$ –	$ –	$ –	$ –	$ –	$ –
Contributed capital	1	5	–	–	–	6
Stock option compensation	–	4	–	–	–	4
Net loss	–	–	–	–	(1,424)	(1,424)
Balance (deficit) at December 31, 2005	1	9	–	–	(1,424)	(1,414)
Contributed capital	–	985	2	15,610	–	16,597
Stock issuance costs	–	–	–	(665)	–	(665)
Stock option compensation	–	71	–	–	–	71
Net loss	–	–	–	–	(5,225)	(5,225)
Balance (deficit) at December 31, 2006	1	1,065	2	14,945	(6,649)	9,364
Contributed capital	–	–	1	23,834	–	23,835
Stock issuance costs	–	–	–	(37)	–	(37)
Stock option compensation	–	46	–	–	–	46
Net loss	–	–	–	–	(9,525)	(9,525)
Balance (deficit) at December 31, 2007	1	1,111	3	38,742	(16,174)	23,683
Contributed capital	–	–	2	29,998	–	30,000
Stock issuance costs	–	–	–	(106)	–	(106)
Stock option compensation	–	239	–	–	–	239
Net loss	–	–	–	–	(20,260)	(20,260)
Balance (deficit) at December 31, 2008	1	1,350	5	68,634	(36,434)	33,556
Stock options exercised	–	11	–	–	–	11
Stock issuance costs	–	–	–	(100)	–	(100)
Stock option compensation	–	464	–	–	–	464
Warrants issued	–	–	–	226	–	226
Net loss (as restated)	–	–	–	–	(20,071)	(20,071)
Balance (deficit) at December 31, 2009	1	1,825	5	68,760	(56,505)	14,086
Stock option compensation	–	374	–	–	–	374
Common stock repurchase	–	(190)	–	–	–	(190)
Warrants exercised	–	–	–	93	–	93
Net loss (as restated)	–	–	–	–	(19,392)	(19,392)
Balance (deficit) at December 31, 2010	1	2,009	5	68,853	(75,897)	(5,029)
Preferred stock issuance	–	–	3	35,045	–	35,048
Stock issuance costs	–	–	–	(221)	–	(221)
Stock option compensation	–	531	–	–	–	531
Warrants issued	–	–	–	591	–	591
Net loss	–	–	–	–	(34,769)	(34,769)
Balance (deficit) at December 31, 2011	1	2,540	8	104,268	(110,666)	(3,849)
Stock option compensation	–	491	–	–	–	491
Net loss	–	–	–	–	(35,472)	(35,472)
Balance (deficit) at December 31, 2012	$ 1	$ 3,031	$ 8	$ 104,268	$ (146,138)	$ (38,830)
See accompanying notes.

4

PixelOptics, Inc.
(A Development Stage Company)
Unaudited Statements of Cash Flows
(In Thousands)
							August 13, 2005
							(Inception)
							Through
	Year Ended December 31,						December 31,
	2012			2011			2012
Operating activities
Net loss	$	(35,472	)	$	(34,769	)	$	(146,138	)
Adjustments to reconcile to net cash from operating activities:
Change in fair value of warrants	566			–			$	566
Depreciation and amortization	1,213			$	1,090		$	4,209
Stock option compensation	491			$	531		$	2,219
Loss on sale of property and equipment	145			–			$	267
Bad debt (recovery) expense	4			–			$	8
Inventory valuation reserves	2,439			$	1,140		$	3,578
Amortization of debt discount	774			$	639		$	1,481
Changes in operating assets and liabilities:
Accounts receivable	570			$	(306	)	$	(14	)
Inventory	(736		)	(2,295		)	(3,578		)
Prepaid expenses and other assets	1,445			(449		)	(220		)
Rent deposit	–			–			(21		)
Accounts payable	(306		)	(108		)	1,521
Accrued expenses	1,618			921			3,527
Deferred revenue	(929		)	(875		)	7,625
Net cash used in operating activities	(28,178		)	(34,481		)	(124,970		)
Investing activities
Proceeds from sales of marketable securities	–			–			3,000
Investment in marketable securities	–			–			(3,000		)
Purchase of property and equipment	(1,595		)	(710		)	(6,830		)
Proceeds from sale of property and equipment	–			–			80
Purchase of intangibles	–			–			(2,775		)
Net cash used in investing activities	(1,595		)	(710		)	(9,525		)
Financing activities
Proceeds from debt	22,610			10,000			37,610
Proceeds from capital lease	–			–			17
Payments on capital lease	–			(5		)	(17		)
Payments on debt	(2,100		)	(4,290		)	(7,100		)
Debt issuance costs	–			(75		)	(75		)
Issuance of common stock	–			–			1,002
Repurchase of common stock	–			–			(190		)
Issuance of preferred stock	–			35,048			104,588
Stock issuance costs	–			(221		)	(1,129		)
Net cash provided by financing activities	20,510			40,457			134,706
Net (decrease) increase in cash and cash equivalents	(9,263		)	5,266			211
Cash and cash equivalents at beginning of period	9,474			4,208			–
Cash and cash equivalents at end of period	$	211		$	9,474		$	211
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,000		$	1,092		$	2,092
Supplemental disclosure of noncash financing activities:
Warrants issued	$	1,405		$	591		$	1,996
See accompanying notes.

5

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

December 31, 2012

1. Organization and Nature of Business

PixelOptics, Inc. (Company), a Delaware corporation, formed and began operations on August 13, 2005. The Company is engaged in the development stage of creating electronic dynamic spectacle lenses used to correct presbyopia, a condition which requires most people over the age of 45 to wear bifocals, trifocals or progressive addition lenses. The Company is headquartered in Roanoke, Virginia.

2. Going Concern

The financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s limited available capital, financial position and operating results as of and for the period ended December 31, 2012, and for the period from August 13, 2005 (date of inception) to December 31, 2012 raise substantial doubt about the Company’s ability to continue as a going concern. As of December 31, 2012, the Company’s stockholders’ deficit was $(38,830) and available cash and cash equivalents was $211. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon commencing operations, developing sales and obtaining additional capital and financing.

The Company is currently seeking additional capital to allow it to continue operations and achieve its financing and operating objectives. In the first quarter of 2013, the Company received approximately $8,000 of bridge loan financing from its current investors and anticipates receiving an additional $12,000 of funding in late March 2013. In February 2013, the Company signed a term sheet for an aggregate amount of $18,000 with Hercules Technology Growth Capital. The initial $12,000 of debt funding will be available upon the loan closing date and the remaining $6,000 will be available upon the Company completing a future capital funding round. The cash provided by this venture debt will be used to pay down the Horizon Loan and to fund ongoing operations. Finally, the Company is seeking additional capital of approximately $35,000 - $50,000 via a Series E financing round. This financing, once completed, is expected to allow the Company to continue to operate through the end of 2014 and provide for sufficient capital to sustain operations.

The Company has incurred significant losses in the past, and will continue to incur losses in the future. Management believes additional financing will be required to provide sufficient funds to enable the Company to reach profitability and sustain its operations. There can, however, be no assurance that the Company will be profitable in the future, nor that additional future financing can be obtained on terms acceptable to the Company.

3. Summary of Significant Accounting Policies

Basis of Presentation

The financial statements were prepared in conformity with U.S. generally accepted accounting principles applied on a basis consistent with that of the preceding periods. Certain prior year amounts have been reclassified to conform to 2012 presentation.

6

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

Cash and Cash Equivalents

The Company considers all highly liquid investments with a remaining maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents are stated at cost which approximates fair value.

Accounts Receivable

Accounts receivable are recorded net of the allowance for doubtful accounts. The Company regularly evaluates the collectibility of accounts receivable based on a variety of factors, including the length of time the receivables are past due, the financial health of the customer and historical experience. Based on this evaluation, the Company records reserves to reduce the related receivables to amounts reasonably believed to be collectible. The reserve for uncollectible accounts receivable was not significant as of December 31, 2012 and 2011. Actual write-offs have approximated management’s estimates.

Inventory

Inventory is stated at the lower of cost (first-in, first-out) or net realizable value. The Company periodically reviews its inventory for slow-moving or obsolete items and writes down the related products to estimated net realizable value.

During 2012 and 2011, the Company recorded reserves of $2,439 and $1,140, respectively related to certain product inventory that will not be sold due to obsolescence or quality issues.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Expenditures for repairs and maintenance are charged to expense as incurred, while expenditures for additions or improvements that extend the life of an asset are capitalized. Depreciation of property and equipment is calculated principally using the straight-line method over the estimated useful lives as follows:

Leasehold improvements	6 to 8 years
Furniture and fixtures	7 to 12 years
Machinery and equipment	2 to 5 years

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of interest-bearing transaction accounts and money market deposit accounts. The Company maintains its interest-bearing transaction accounts in high credit quality commercial bank and investment accounts. The Company has not experienced any losses in these accounts. At December 31, 2012 and 2011, the Company had on deposit $0 and $9,556, respectively, in excess of the amount insured by the Federal Deposit Insurance Corporation (FDIC).

7

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

Research and Development

Research and development costs, including new product development programs, regulatory compliance and clinical research are expensed as incurred.

Stock-Based Compensation

The Company recognizes share-based compensation at the grant date of the award based on the fair value, and is recognized on a straight-line basis as expense in the accompanying statements of operations over the vesting period of the award, net of estimated forfeitures. The Company estimates forfeitures based on historical experience with further consideration given to the class of employees to whom the equity awards were granted. As of December 31, 2012, the Company expects that all outstanding options will vest.

Intangible Assets

The Company records intangible assets at historical cost and amortizes them over their estimated useful life. Amortization is generally computed by the straight-line method over the estimated useful lives of the assets. The estimated useful life of the license intangible is approximately 12 years.

The Company reviews its intangible assets subject to amortization annually to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. As of December 31, 2012 and 2011, the Company determined that none of its intangible assets were impaired.

Revenue Recognition

The Company generates revenue primarily from the sale of lenses, modules, and chargers to its distribution partners. Revenue is considered realized or realizable and earned when all of the following criteria are met: persuasive evidence of a sales arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectibility is reasonably assured. Revenue is recognized upon passage of title and risk of loss to customers. The Company generally allows its customers to return defective or damaged products for credit or repair. Estimates for sales returns are based upon historical trends and are recorded as a reduction to revenue when the product is sold. The Company records all shipping and handling fees in revenue and records all of the related costs in Lenses - cost of sales.

During 2011, the Company began to sell emPower!, the world’s first and only electronic focusing eyewear, through its typical distribution channels. The Company is in the initial launch period of emPower!. During this period, customers may return previously purchased products for credit to satisfy consumer preference as well as to cover errors made in cutting the final prescription into the lens. The Company has determined that it is unable to make a reasonable estimate of product returns during this period due to the lack of sufficient history with sales of the emPower! product and the relatively wide range of reasons for accepted returns. In addition, the Company has established a one-year warranty to cover material defects in the operation of the

8

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

emPower! product. The Company has determined that the limited history of the new emPower! product precludes the Company from making a reasonable estimate of warranty claims against sales.

As a result of its inability to make a reasonable estimate of product returns, the Company recognizes revenue for emPower! on the “sell-through” method. Under the “sell-through” method, the Company does not recognize revenue upon sale to an optical lab, its primary customer, but defers recognition of revenue until the optical lab sells the product to an eye care professional. However, as the Company is unable to make a reasonable estimate of warranty claims related to the emPower! product, the Company further defers the recognition of revenue related to emPower! until the end of the product’s warranty period. The Company will reassess its ability to make estimates of product returns and warranty claims at each reporting period in accordance with applicable guidance. During the years ended December 31, 2012 and 2011, sales of emPower! totaling approximately $162 and $129, respectively, were deferred and have been recorded as Deferred revenue in the December 31, 2012 and 2011 balance sheets.

During the year ended December 31, 2010, the Company received approximately $10,000 related to its arrangement with Aspex Eyewear, Inc. (Aspex). The cash payment will be recognized into income over the term of the related license agreement. During each of the years ended December 31, 2012 and 2011, the Company recognized $1,047 of license fee revenue.

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are based on differences between the financial reporting and tax bases of the assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that the Company will not realize some portion or all of its deferred tax assets. The Company considers relevant evidence, both positive and negative, to determine the need for a valuation allowance. Information evaluated includes our financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as an evaluation of currently available information about future years.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the relevant taxing authorities, based on the technical merits of its position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company classifies interest and penalties related to income tax matters as a component of income tax expense.

Years ending on or after December 31, 2008 remain subject to examination by federal and state tax authorities.

9

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

Fair Value of Financial Instruments

The fair values of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses are not materially different than their carrying amounts, as reported, since they approximate the amount for which the assets could be sold or the liabilities could be settled.

The fair value of debt instruments are estimated to approximate carrying amounts since interest rates approximate rates at which the Company could obtain similar financing at December 31, 2012. Derivative financial instruments are recorded at fair value at December 31, 2012.

Fair value guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

• Level 1 - Quoted market prices in active markets for identical assets or liabilities.

• Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data.

• Level 3 - Unobservable inputs that are not corroborated by market data.

The following are the assets and liabilities measured at fair value as of December 31, 2012:

	Level 1		Level 2		Level 3		Total
Liabilities:
Warrant liability	$	—	$	—	$	1,971	$	1,971

The reconciliation of the warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:

	Warrant Liability
Balance at December 31, 2011	$	—
Issuance of new warrants with Bridge Loan	1,405
Change in fair value of warrants	566
Balance at December 31, 2012	$	1,971

The fair value of the warrants is determined using a scenario-based option pricing model. The valuation of warrants is subjective and is affected by significant inputs, including product launch timing, cost of product sales, and ultimate market penetration, as well as other changes in inputs to the valuation model including the price per share of the Company’s common stock, assumptions regarding the expected amounts and dates of future equity financing activities, the historical volatility of the stock prices of the Company’s peer group, and risk-free rates. Changes in these assumptions can materially affect the fair value estimate, and the warrant liability could at any future point in time, be significantly different that the carrying value at December 31, 2012.

10

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and may affect future periods.

4. Accounts Receivable

Accounts receivable consist of the following as of December 31:

	2012			2011
Trade receivables	$	13		$	250
Other receivables	—			333
Less - allowance for doubtful accounts	(6		)	(2		)
	$	7		$	581

5. Prepaid Expenses

Prepaid expenses consist of the following as of December 31:

	2012		2011
Manufacturing supplies	$	—	$	673
Prepayments to suppliers	—		730
Other prepaid expenses	105		102
	$	105	$	1,505

11

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

6. Property and Equipment

Property and equipment consist of the following as of December 31:

	2012			2011
Leasehold improvements	$	637		$	637
Machinery and equipment	4,190			4,146
Furniture and fixtures	78			77
Capital assets in process	1,175			33
	6,080			4,893
Less - accumulated depreciation	(3,038		)	(2,331		)
	$	3,042		$	2,562

Depreciation expense was $970 and $847 during 2012 and 2011, respectively.

7. Intangibles

The Company has capitalized its payments to Johnson & Johnson Vision Care, Inc., as co-obligator with E­Vision, LLC (see Notes 12 and 15), for the right to use certain intellectual property. The Company has also capitalized its payments to High Performance Optics, Inc. (see Note 12) for the right to manufacture certain products using intellectual property. The total cash paid for these intangibles was $2,775. The net balance of intangible assets at December 31, 2012 and 2011 was $2,007 and $2,249, respectively. Amortization expense for intangible assets was $243 during each of 2012 and 2011. As of December 31, 2012, the estimated amortization expense associated with our intangible assets for each of the next five fiscal years is expected to be $243.

8. Bridge Loans and Long-Term Debt

On April 12, 2012, July 5, 2012, and September 27, 2012, the Company entered into a note and warrant purchase agreement (“Bridge Loan”) with certain of its existing investors for the purchase of approximately $7,210, $6,800, and $8,600, respectively, of 8% convertible notes due June 30, 2013. The Bridge Loan is subordinated to the Company’s currently outstanding $10,000 loan with Horizon Technology entered into on April 6, 2011. Interest on the Bridge Loan is payable at maturity. The Bridge Loan will automatically convert into the Company’s preferred shares if a qualified equity financing, defined as the issuance of preferred stock of at least $20,000, occurs. At conversion, all outstanding principal and accrued interest will convert at a price determined in the subsequent equity financing.

The Bridge Loan provides for the issuance of 5,137,585 warrants (issued at the various funding dates) to purchase the Company’s preferred stock as determined in the next qualified equity financing. The warrants are exercisable for a period of 10 years. The number of warrants issued under this arrangement will be determined by dividing 25% of the value received in the bridge financing by the lowest price per share issued in the next qualified financing.

12

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

On April 6, 2011, the Company closed a $10,000 aggregate principal amount debt financing with Horizon Technology Finance (“Horizon Note”). The Horizon Note has an interest rate of 10.75% and is secured by substantially all of the Company’s assets, except for intellectual property. The Horizon note requires interest only payments for the first 12 months; the remaining balance will be paid over 30 monthly installments. In connection with the issuance of the Horizon Note, the Company issued 181,818 warrants to purchase Series D preferred shares. The warrants have an exercise price equal to the Series D preferred stock price of $1.10.

On February 25, 2011, the Company closed a $5,500 aggregate principal bridge financing from certain existing investors of the Company. The loan had an interest rate of 8% and was convertible into the Company’s preferred shares. In connection with the issuance of this bridge financing, the Company issued 582,565 warrants to purchase Series D preferred shares. The warrants have an exercise price equal to the Series D preferred stock price of $1.10. The notes were converted to Series D preferred stock on April 6, 2011.

Debt consists of the following as of December 31:

	2012			2011
Horizon Note	$	7,900		$	10,000
Bridge Loan	22,610			—
Less - unamortized debt discount	(741		)	(110		)
	29,769			9,890
Less - current portion	(25,825		)	(2,371		)
	$	3,944		$	7,519

Estimated principal repayments on long-term debt for future years ending December 31 are as follows:

2013	$	26,530
2014	3,980
2015	—
2016	—
2017	—
Thereafter	—
	$	30,510

9. Capital

As of December 31, 2012, the authorized capital stock of the Company consists of 120,000,000 shares of common stock and 86,707,758 shares of preferred stock, each having a par value of $0.0001 per share. Preferred stock is issued in series, subject to terms established by the Board of Directors. On April 6, 2011, the Company closed on a Series D preferred stock equity financing. The capital raised was approximately $35,048. The following table describes the key features of the Company’s outstanding preferred stock.

13

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

Issue Date/Shares outstanding/ Conversion Price	Series A - On September 5, 2006, the Company authorized and issued 13,841,791 shares (12,972,321 currently outstanding) of Series A preferred stock with a conversion price per share of $0.69. Series A-1 - On December 22, 2006, the Company authorized and issued 8,437,499 shares (8,437,499 currently outstanding) of Series A-1 preferred stock with a conversion price per share of $0.80. Series B - On June 29, 2007, the Company authorized and issued 14,103,524 shares (14,103,524 currently outstanding) of Series B preferred stock with a conversion price per share of $1.69. Series C - On September 26, 2008, the Company authorized and issued 17,324,944 shares (17,125,150 currently outstanding) of Series C preferred stock with a conversion price per share of $1.7518.
Issue Date/Shares outstanding/ Conversion Price	Series D - On April 6, 2011, the Company authorized and issued 33,000,000 shares (31,861,909 currently outstanding) of Series D preferred stock with a conversion price per share of $1.10.
Dividend and liquidation preferences	All the preferred stock is senior to the rights, benefits, obligations, and restrictions of all other equity securities of the Company. The holders of each outstanding series of preferred stock shall be entitled to a noncumulative 8% dividend per annum, if declared, payable in cash or in-kind at the option of the holder, in preference to any distribution on any other equity securities. The preferred stockholders are also entitled to certain liquidation preferences upon any liquidation, dissolution or winding up of the Company as further defined in the stock agreement. Each share of Series A and A-1, B, C and D preferred stock is initially convertible into one share of common stock, subject to adjustment as provided in the anti-dilution features.
Participation rights	Each share of Series A, A-1, B, C and D preferred stock participates fully with common once any liquidation preferences are satisfied.
Voting rights	All outstanding series of preferred stock have the right to vote together with common stock holders on an as-converted basis on all matters submitted for vote of the holders of common stock. Each share of preferred stock is initially convertible into one share of common stock, subject to adjustment as provided in the anti-dilution features more fully explained in the stock agreement.
Changes in preferred shares	There have been no other changes in the number of issued shares in any class of the Company’s outstanding preferred stock in the periods ended 2012.

14

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

10. Warrants

The Company accounts for preferred stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreement. Preferred stock warrants are accounted for as derivative liabilities if the warrants allow for cash settlement or provide for modification of the warrant exercise price in the event subsequent sales of preferred or common stock are at a lower price per share than the then-current warrant exercise price. Derivative warrant liabilities are classified on the balance sheet as a current liability, which is remeasured to fair value at each balance sheet date.

As of December 31, 2012, the following stock warrants were outstanding:

Equity-classified warrants

	Number	Issuance Date	Date Exercisable	Expiration Date	Underlying Security	Exercise Price Per Share
2006 Warrants	869,470	May 2006	Sept. 2006	May 2014	Series A Preferred	$0.69
2009 Warrants	199,794	Dec. 2009	Dec. 2009	Dec. 2019	Series C Preferred	$1.7518
Bridge Loan Warrants	582,565	April 2011	April 2011	April 2021	Series D Preferred	$1.10
2011 Warrants	181,818	April 2011	April 2011	April 2021	Series D Preferred	$1.10
	1,833,647

Equity-classified warrants: The Company has recorded the preferred stock warrant awards from 2006 through 2011 within stockholders’ equity on the balance sheet as the Company concluded that each issuance was determined to be indexed to the Company’s stock and the warrant provisions did not embody an obligation of the Company. The proceeds of the February 25, 2011 bridge loan and the Horizon Note were allocated between the debt issuances and the related preferred stock warrants based upon their relative fair values, which resulted in the recording of a discount on the debt upon issuance that reflects the value allocated to the warrants. The discounts are being accreted as additional interest expense over the term of the related debt instruments using the effective interest method. The assigned consideration received at the date of grant for each tranche of warrants issued in 2006 through 2011 was not significant.

15

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

Liability-classified warrants

	Number	Issuance Date	Date Exercisable	Expiration Date
Bridge Loan Warrants	1,637,585	April 2012	June 2013	April 2022
Bridge Loan Warrants	1,545,455	July 2012	June 2013	April 2022
Bridge Loan Warrants	1,954,545	Sept. 2012	June 2013	April 2022
	5,137,585

Liability-classified warrants: The Company has recorded the 2012 preferred stock warrants awards as a liability on the balance sheet as the Company concluded that the issuances were determined not to be indexed to the Company’s stock and therefore the warrant provisions embodied an obligation of the Company. Each warrant is exercisable in whole or in part at any time until June 30, 2013 at a per share exercise price of $1.10, subject to certain adjustments as specified in the warrant agreement. Additionally, the warrants contain provisions that require the modification of the exercise price and shares to be issued under certain circumstances, including in the event the Company completes subsequent equity financing at a price per share lower than the then-current warrant exercise price. The Company valued the warrants as derivative financial instruments as of the dates of issuance of $282, $503 and $620, respectively, and will continue to do so at each reporting date, with any changes in fair value being recorded on the Statement of Operations. During the year ended December 31, 2012, the Company recorded a loss of $566 due to an increase in the estimated fair value of these warrants. The warrant liability was $1,971 as of December 31, 2012. The Company will continue to classify the fair value of the warrants as a liability until the warrants are exercised, expire, or are amended in a way that would no longer require these warrants to be classified as a liability.

The proceeds of the 2012 bridge loans were allocated between the debt issuances and the related preferred stock warrants based upon their relative fair values, which resulted in the recording of a discount on the debt upon issuance of $1,405 that reflects the value allocated to the warrants. The discounts are being accreted as additional interest expense over the term of the related debt instruments using the effective interest method.

16

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

The following table details warrant activity during the periods ended December 31, 2012 and 2011.

	2012	2011
Outstanding at beginning of period	1,833,647	1,069,264
Granted	5,137,585	764,383
Exercised	0	0
Expired or forfeited	0	0
Outstanding at end of period	6,971,232	1,833,647
Exercisable at end of year	1,833,647	1,833,647
Range of exercise prices	$0.69 - $1.75	$0.69 - $1.75
Weighted-average remaining contractual life in years	8.2	4.9

11. Stock-Based Compensation

The Company has one stock-based compensation plan adopted in 2005, (the “2005 Plan”). The 2005 Plan is administered by the Company’s Board of Directors. Stock-based compensation is granted to officers and certain key employees in accordance with the provisions of the 2005 Plan. The 2005 Plan provides for grants of nonstatutory stock options, stock purchase rights and incentive stock options. These awards have ten-year contractual terms and vest based on the terms of the individual awards. The options are generally forfeitable upon termination of a holder’s service as an employee or director, unless the individual’s service is terminated due to retirement, death or permanent disability. The Company recognizes compensation cost on a straight-line basis over the vesting period for the award. The total aggregate number of shares of the Company’s common stock that may be issued under the 2005 Plan is 20,078,486 shares.

During 2012 and 2011, stock compensation expense related to awards under the 2005 Plan was $491 and $531, respectively. This expense is included in “other operating expenses” in the accompanying statements of operations.

As of December 31, 2012, there was $821of unrecognized compensation cost related to outstanding stock options expected to be recognized over a weighted-average period of approximately 2.7 years. The fair value of each stock option award is estimated on the date of grant using a Black-Scholes option-pricing model. Significant inputs in the option-pricing model are determined using publicly available information or with assistance from an external valuation firm. The external valuation firm also assists the Company in determining the fair value of its outstanding equity instruments. For stock options issued in the years ended December 31, 2012 and 2011, the assumptions shown in the following table were used:

17

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

	Year Ended December 31
	2012	2011
Dividend yield	0.0%	0.0%
Risk-free interest rate	1.8%	2.3%
Expected term (years)	7	7
Volatility	77.0%	77.0%

Expected Volatility. Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company has used the historical volatility of a group of guideline public companies over the average expected term of the options granted as the expected volatility.

Risk-Free Interest Rate. This is the U.S. Treasury rate having a term that most closely resembles the expected term of the option.

Expected Term. The expected term is the period of time that the stock option granted is expected to remain unexercised. Stock options granted during the years ended December 31, 2012 and 2011 had a maximum term of ten years. The Company does not have sufficient historical experience to provide a reasonable basis upon which to estimate the expected term of its awards. Accordingly, the Company estimates the expected term using the “simplified” method which represents the mid-point between the vesting date of its outstanding awards and the contractual term.

The weighted-average grant date fair value of stock options granted during 2012 and 2011 was $0.09 and $0.24 per share, respectively.

Stock option activity under the 2005 Plan is as follows:

	Options	Weighted-Average Exercise Price Per Share	Weighted-Average Remaining Contractual Life
Outstanding December 31, 2011	12,709,746	$0.20	7.2
Granted	5,358,512	$ 0.23
Exercised	(57,916)	$ 0.29
Expired or forfeited	(1,451,515)	$ 0.29
Outstanding December 31, 2012	16,558,827	$0.25	7.1
Exercisable at December 31, 2012	10,662,314	$0.25	6.2

18

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

12. Related-Party Transactions

On January 1, 2010, the Company paid High Performance Optics, Inc. (HPO) $25 pursuant to an agreement which allowed the Company to exclusively offer sublicenses of certain technology rights controlled by HPO for seven months. This has been expensed on the statement of operations in 2010. Additionally, on March 2, 2010, the Company entered into a new license agreement with HPO in which the Company licensed certain technology rights for use in some of the Company’s products. The Company paid HPO $25 for the license, which has been capitalized as an intangible asset on the balance sheet. There are no future royalties payable to HPO under this license. See Note 15 for a separate license agreement with HPO that was updated in 2010.

In November 2010, the Company received an offer from another corporation to provide services for products not related to the Company’s core business. A new entity, Opti-Cool LLC was created, with essentially the same ownership as the Company. A development contract with potential revenues of approximately $100, and estimated potential expenses of approximately $100 was entered into between the Company and the other corporation and then assigned to Opti-Cool, LLC. The development project did not move forward and Opti-Cool LLC will be dissolved.

E-Vision, LLC (E-Vision), a common stockholder of the Company, has a License and Development Agreement dated September 2, 2005 with Johnson & Johnson Vision Care, Inc. (Johnson & Johnson) for intellectual property. E-Vision has licensed this intellectual property to the Company. As disclosed in Note 7 and 15, the Company is a co-obligor with E-Vision for amounts due to Johnson & Johnson. The Company paid $275 and $158 in licensing agreement fees, which have been expensed on the statements of operations in 2012 and 2011, respectively. Payments in 2005 through 2012 were $2,750 for the right to use the intellectual property according to the License and Development Agreement, and have been capitalized as intangible assets on the balance sheet. The Company also paid royalties to E-Vision of $0 and $17 during 2012 and 2011, respectively.

On June 29, 2007, the Company entered into a license agreement with E-A Ophthalmics, LLC (E-A), in which the Company licensed certain rights related to the Company’s intellectual property, in exchange for 21,275,073 of the series A units of E-A. The Company concurrently declared a dividend of the E-A series A units, to the holders of the Company’s Series A preferred stock and series A-1 preferred stock. On June 13, 2008, E-A entered into a sublicense agreement with a newly formed entity, Ocular Optics, Inc. (d/b/a Elenza, Inc.), in which E-A sublicensed those rights, in exchange for 1,063,735 units of common stock of Elenza, Inc. The Company and Elenza, Inc. share some common management and stockholders. The parties entered into the Amendment No. 3 to License Agreement and Amendment No. 2 to the Clarifying Agreement on October 1, 2012, whereby the Company paid $100 and then is obligated to pay Elenza another $50 on October 1, 2013. Further, a Elenza will receive a $200 credit against royalties, and the credits shall be applied in increments of up to $50 per year until the entire $200 credit is satisfied, provided that during any period where royalties are due to E-Vision by the Company before any credit is applied, Elenza shall pay the Company the amount equal to the royalty payable to E-Vision by the Company.

19

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

13. Leases

The Company leases office space under two operating leases expiring on May 31, 2013 and July 31, 2014. Rental expense was $327 and $279 during 2012 and 2011, respectively.

Future minimum lease payments to be paid under existing noncancelable operating leases are as follows:

2013	$	304
2014	159
2015	—
2016	—
2017	—
Thereafter	—
	$	463

14. Income Tax

Significant components of the Company’s deferred tax assets and liabilities are as follows as of December 31:

	2012			2011
Deferred tax assets:
Net operating loss carryforward	$	51,053		$	38,717
General business credit carryforward	1,271			1,571
Deferred revenue	2,973			3,268
Inventory reserves	951			—
Other deferred tax assets	410			129
	56,658			43,685
Deferred tax liabilities:
Other deferred tax liabilities	(506		)	(493		)
Net deferred tax assets	56,152			43,192
Less - deferred tax asset valuation allowance	(55,961		)	(42,956		)
	$	191		$	236

Management makes an assessment to determine if its deferred tax assets are more likely than not to be realized. Valuation allowances are established in the event that management believes the related tax benefits will not be realized. The Company has determined that the deferred tax assets do not satisfy the realizability criteria and, accordingly, has recorded a full valuation allowance against the deferred tax assets at December 31, 2012 and 2011. During fiscal 2012, the valuation allowance increased by $13,005 resulting primarily from the additional net operating losses generated during the period.

20

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

The income tax provision for 2012 and 2011 differs from the income tax expense (benefit) that would result from applying federal statutory rates to loss before income tax (benefit) and extraordinary items mainly due to the change in the valuation allowance.

The Company has net operating loss carryforwards of approximately $130,904 at December 31, 2012, available to offset future federal and state taxable income to the extent allowable. These net operating losses will expire between the years 2025 and 2030. The Company has a general business credit carryforward of approximately $1,271 at December 31, 2012, resulting from credits for research and development costs incurred. These credits are available to offset future federal income taxes to the extent allowable. These general business credits will expire between the years 2025 and 2030.

As of December 31, 2012 and 2011, the Company’s accrual for uncertain tax positions was $191 and $236, respectively. There were no payments made against the accrual during 2012 and 2011.

15. Commitments and Contingencies

Commitments

As co-obligor with E-Vision on the License and Development Agreement with Johnson & Johnson (see Note 12), the Company may be obligated to pay Johnson & Johnson up to $10,000 based on a present value calculation in 2005 dollars. The annual discount rate per the agreement is 3%. The Company has already paid $2,750 of this obligation. After those payments, the remaining obligation payable to Johnson & Johnson will be in the form of a royalty fee of 3% of net sales of licensed ophthalmic products. The Company paid $1 and $17 in royalty fees during 2012 and 2011, respectively. These amounts have been expensed on the statement of operations. On December 8, 2010, the Company entered into a memorandum of understanding with E-Vision to secure E­Vision’s participation in a development agreement with an unrelated party for $250. The Company paid $50 and $200 during 2012 and 2011, respectively, which has been expensed on the statement of operations.

North American Frame Agreement

On March 13, 2012, the Company notified its North American frame licensee that it believed that the licensee was in default of the Manufacture, Supply, Marketing and Sales Agreement dated July 6, 2010 by and between the Company and the licesee (the “Agreement”) for, among other reasons, failure to pay approximately $15,000 due to the Company under the Agreement. At that time, the Company notified the licensee that it had until June 11, 2012 to cure the default by paying the amounts owed under the Agreement to the Company, and, if the breach remained uncured, the Company was terminating the Agreement according to its terms. In response, the licensee denied that it had breached its obligation to pay the $15,000 and also asserted that the Company is not entitled to the $9,000 it previously paid to the Company under the Agreement and demanded repayment of such amount plus accrued interest. The parties agreed that the cure period would be extended until June 30, 2012 to permit additional time for negotiations.

On June 26, 2012, the licensee notified the Company of its demand for mediation as to the matter. On June 28, 2012, the licensee obtained a temporary restraining order prohibiting the Company from terminating the Agreement and entering into a relationship with an alternative vendor that would conflict with the licensee’s

21

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

rights under the Agreement until at least August 7, 2012, at which time the parties were to argue a motion for preliminary injunction filed by the licensee. On July 20, 2012 the licensee filed a request for arbitration, to which the Company agreed. The court deferred ruling on the injunction pending a decision from the arbitration panel.

The parties participated in an arbitration hearing in November 2012 and submitted post-hearing closing briefs to the arbitration panel during the week of December 17, 2012. The parties received a partial final award from the panel on January 14, 2013 finding that (i) the Company was not entitled to payment of the $15,000 as additional license fees as of the date claimed by the Company and that the 10-year term commencing on the date of Second Commercial Availability (as defined in the Agreement) had not yet begun on the dates claimed by the Company, (ii) the Agreement remains in full force and effect. The panel deferred ruling on remaining claims and asked the parties to report back after 30 days as to any remaining disputes.

The parties reported back to the panel on February 13, 2013 that there were remaining unresolved disputes. The parties discussed those reports with the panel on February 22, 2013, at which time the panel requested a supplemental submission from the licensee as to the bases for its stated claims for relief, including whether each is properly before the panel, and from the Company the bases for any remaining claims and the requested relief. The parties submitted the requested submissions to the panel on February 27, 2013. In its submission, the licensee stated that its remaining claims consisted of a claim for injunctive relief, a claim for declaratory relief and a claim for award of attorneys’ fees. In its submission, the Company set forth the bases for counterclaims for anticipatory repudiation and breach of the duty to pay royalties. Each party submitted a response to the other’s submission on March 6, 2013. On March 12, 2013, the panel issued a Procedural Order stating (1) that the licensee’s remaining claims for relief were in the nature of additional remedy to be ruled on in the Final Award; and (2) that, in its discretion, the panel would permit the Company to assert its counterclaims for anticipatory repudiation and breach for failure to pay royalties. The panel directed the Company to submit by March 18, 2013, a Supplemental Statement setting forth its counterclaims, along with any exhibits, written testimony or memorandum of law deemed appropriate. The Company submitted is Supplemental Statement and accompanying materials on March 18, 2013. The licensee is to submit a response on March 25, 2013. The panel has requested that the parties submit dates in early April for a one-day oral hearing on the counterclaims or consent to waive such oral hearing.

The Company currently does not believe a loss is probable as of the date of this report. The Company intends to vigorously defend against its partner’s remaining claims and to aggressively pursue its own remaining claims with respect to the Agreement. Given the inherent uncertainty of the outcome for this claim, it is possible that the total costs incurred related to this claim could be material. The Company cannot reasonably estimate the maximum potential exposure or the range of possible loss for this contingency. The Company will continue to review the amount of any necessary accruals or other related expenses and record charges in the period in which the determination is made that an adjustment is required.

Sublicense Settlement

On January 12, 2012, the Company received a demand letter from Elenza, Inc. (a related party), alleging that PixelOptics wrongfully caused Elenza to pay $589 for intellectual property that should have been paid for by PixelOptics. In June 2012, the Company negotiated a settlement agreement related to this matter for

22

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

approximately $200 and paid $150 of the settlement during the year ended December 31, 2012. The remainder of this settlement has been accrued as of December 31, 2012.

Vendor Complaint

On June 22, 2012, the Company received a demand letter from a Canadian module assembly vendor, alleging that the Company, (1) has not met its obligations to fulfill material supply obligations, (2) has made misrepresentations that caused damages to the vendor, and (3) that the Company does not have rights to use certain intellectual property. The vendor further notified the Company that it was terminating the Purchase Order that both parties had entered into in 2011 for the supply of electronic modules. In December 2012, the Company negotiated a settlement agreement related to this matter for approximately $280 and has accrued this settlement at December 31, 2012.

16. Subsequent Events

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through March 25, 2013, the date the financial statements were available to be issued.

2013 Bridge Loan

On January 4, 2013, February 4, 2013, and March 13, 2013, the Company entered into a note and warrant agreement (“2013 Bridge Loan”) with certain of its existing investors for the purchase of approximately $3,500,$2,500, and $2,000 respectively of 14% convertible notes due June 30, 2013. The 2013 Bridge Loan will be subordinate to the Company’s currently outstanding $10,000 Horizon Note entered into on April 6, 2011. Interest on the 2013 Bridge Loan is payable at maturity. The 2013 Bridge Loan is immediately exercisable into Series D preferred shares or will automatically convert into the Company’s preferred shares if a qualified equity financing, defined as the issuance of preferred stock of at least $20,000 occurs. At conversion, all outstanding principle and accrued interest will convert at a price determined in the subsequent equity financing. The 2013 Bridge Loan also provides for the issuance of warrants that are immediately exercisable into the Company’s Series D preferred stock or will automatically convert into the Company’s preferred shares if a qualified equity financing, defined as the issuance of preferred stock of at least $20,000, occurs. The warrants are exercisable for a period of 10 years. The number of warrants issued under this arrangement is equal to 100% of the value received in the bridge financing.

The Company anticipates an incremental $12,000 of bridge loan funding to occur in late March 2013 under similar terms to those listed above. The final terms and conditions of this funding are currently being negotiated.

Venture Debt Term Sheet

On February 13, 2013, the Company signed a term sheet for an aggregate amount of $18,000 with Hercules Technology Growth Capital. The initial $12,000 of debt funding will be available upon the loan closing date and the remaining $6,000 will be available upon the Company completing a future capital funding round. The debt has an interest rate of 11.75% and is secured by a perfected first position lien on all of the Company’s

23

PixelOptics, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements (continued)

(All dollar amounts are in thousands, except per share amounts or as otherwise noted.)

assets including intellectual property. The loan will require interest only payments for the first six months; the remaining balance will be paid over 30 monthly installments. In connection with the issuance of these notes the Company will issue 11% of the aggregate loan amount in warrants to purchase Series D preferred shares or shares of a subsequent round of funding. The warrants have an exercise price of $1.10 to purchase Series D warrants or at the price per share of a subsequent round.

24

EX-99.2

Exhibit 99.2

PixelOptics, Inc.
(A Development Stage Company)
Unaudited Balance Sheet
(In Thousands)
	June 30,			December 31,
	2013			2012
Assets
Cash and cash equivalents	$	51		$	211
Accounts receivable	2			7
Prepaid expenses	231			105
Total current assets	285			323
Intangible assets	1,885			2,007
Property & equipment, net	2,493			3,042
Other assets	210			210
Total assets	$	4,873		$	5,582
Liabilities and stockholders' equity:
Accounts payable	1,950			1,521
Accrued expenses	4,514			3,528
Current portion of long term debt and capital lease obligation	41,478			25,825
Deferred revenue	6,808			1,339
Warrant liability	1,971			1,971
Total current liabilities	56,721			34,184
Long-term debt - less current portion	1,818			3,944
Deferred revenue	—			6,284
Total liabilities	58,539			44,412
Stockholders’ equity:
Preferred stock	9			9
Additional paid in capital	107,300			107,299
Accumulated deficit during the development stage	(160,975		)	(146,138		)
Total stockholders' equity	(53,666		)	(38,830		)
Total liabilities and stockholders' equity	$	4,873		$	5,582

PixelOptics, Inc.
(A Development Stage Company)
Unaudited Statements of Operations
(In Thousands)
	Six Months Ended
	June 30,			June 30,
	2013			2012
Revenue:
Revenue net	$	800		$	569
Cost of goods sold	812			3,628
Gross profit	(12		)	(3,059		)
Operating expenses:
Operations	2,309			1,788
Research and development	3,508			3,261
Sales & marketing	2,403			4,692
General and administrative	3,987			3,370
Royalties	—			2
Total operating expenses	12,207			13,113
Operating loss	(12,219		)	(16,172		)
Interest expense	(2,610		)	(737		)
Other expense	(9		)	(14		)
Net loss	$	(14,838	)	$	(16,923	)

PixelOptics, Inc.
(A Development Stage Company)
Unaudited Statements of Cash Flows
(In Thousands)
	Six Months Ended
	June 30,			June 30,
	2013			2012
Net loss	$	(14,838	)	$	(16,923	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation / amortization	666			692
(Increase) decrease in assets:
Accounts receivable	4			549
Inventory	–			(590		)
Prepaid expenses	(127		)	268
Increase (decrease) in liabilities:
Accounts payable	430			(173		)
Deferred revenue	(815		)	(370		)
Accrued expense	988			482
Net cash used in operating activities	(13,692		)	(16,067		)
Cash flows used investing activities
Purchase of fixed assets	5			(165		)
Net cash used in investing activities	5			(165		)
Cash flows from financing activities
Bridge loan	14,750			9,472
Venture debt	(1,907		)	(295		)
Discount on venture debt	20			20
Discount on warrant debt	664			–
Common stock	–			15
Preferred stock / financing cost	–			1
Net cash from financing activities	13,527			9,213
Net increase (decrease) in cash	(160		)	(7,019		)
Cash & cash equivalents, beginning of period	211			9,474
Cash & cash equivalents, end of period	$	51		$	2,455

XML

Significant Accounting Policies Financial Instruments (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013
Accounting Policies [Abstract]
Market value of outstanding debentures	$ 69.9

XML

Convertible Debentures and Credit Arrangements Convertible Senior Debentures due 2024 Narrative (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2004
Debt Instrument [Line Items]
Fair value of Debentures outstanding	$ 69,900,000
Convertible Senior Debentures due 2024 [Member]
Debt Instrument [Line Items]
Face amount		150,000,000.0
Maturity date	Mar. 15, 2024
Fair value of Debentures outstanding	$ 400,000
Frequency of periodic payment	semi-annually
Convertible senior debentures, convertible latest date	Mar. 14, 2024
Conversion price (in dollars per share)	$ 43.3044
Future redemption price as percentage of original principal in fifth year	100.00%
Scenario One [Member] | Convertible Senior Debentures due 2024 [Member]
Debt Instrument [Line Items]
Convertible optional repurchase dates	Mar. 20, 2014
Scenario Two [Member] | Convertible Senior Debentures due 2024 [Member]
Debt Instrument [Line Items]
Convertible optional repurchase dates	Mar. 20, 2019

XML

Acquisitions of Ownership Interests in Partner Companies and Funds Narrative (Detail) (USD $)	1 Months Ended	12 Months Ended			1 Months Ended						24 Months Ended	1 Months Ended			12 Months Ended				1 Months Ended								12 Months Ended	1 Months Ended				6 Months Ended	1 Months Ended										49 Months Ended
	May 31, 2008	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Nov. 30, 2013 Apprenda, Inc. [Member]	Oct. 31, 2013 Hoopla Software, Inc. [Member]	Dec. 31, 2011 Hoopla Software, Inc. [Member]	Sep. 30, 2013 Alverix [Member]	Aug. 31, 2013 Quantia [Member]	Aug. 31, 2013 DriveFactor Inc. [Member]	Dec. 31, 2012 DriveFactor Inc. [Member]	Aug. 31, 2013 Clutch [Member]	Feb. 28, 2013 Clutch [Member]	Aug. 31, 2011 Penn Mezzanine [Member]	Dec. 31, 2013 Penn Mezzanine [Member]	Dec. 31, 2012 Penn Mezzanine [Member]	Dec. 31, 2011 Penn Mezzanine [Member]	Dec. 31, 2013 PixelOptics, Inc. [Member]	Jun. 30, 2013 Medivo, Inc. [Member]	Nov. 30, 2011 Medivo, Inc. [Member]	Mar. 31, 2013 Lumesis [Member]	Feb. 29, 2012 Lumesis [Member]	Feb. 28, 2013 Pneuron [Member]	Jan. 31, 2013 Sotera [Member]	Dec. 31, 2012 Appfirst [Member]	Oct. 31, 2012 Good Start Genetics, Inc. [Member]	Dec. 31, 2010 Good Start Genetics, Inc. [Member]	Dec. 31, 2013 ThingWorx, Inc. [Member]	Sep. 30, 2012 ThingWorx, Inc. [Member]	Feb. 28, 2011 ThingWorx, Inc. [Member]	Aug. 31, 2012 MediaMath, Inc. [Member]	Jun. 30, 2012 MediaMath, Inc. [Member]	Aug. 31, 2012 New York Digital Health Accelerator [Member]	Feb. 29, 2012 Spongecell [Member]	Sep. 30, 2011 Putney, Inc. [Member]	Aug. 31, 2011 Swap.com [Member]	Jun. 30, 2011 NovaSom, Inc. [Member]	Jul. 31, 2013 Crescendo [Member]	Dec. 31, 2012 Crescendo [Member]	Nov. 30, 2013 Dabo Health, Inc. [Member]	Feb. 28, 2013 Nupathe [Member]	Oct. 23, 2012 Nupathe [Member]	Aug. 31, 2010 Nupathe [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage					22.00%				35.10%			24.00%		36.00%	36.00%								27.60%		35.00%								9.40%	23.10%	30.10%		31.70%
Acquisitions of ownership interests in companies and funds, net of cash acquired		$ 41,838,000	$ 46,100,000	$ 85,329,000	$ 12,100,000		$ 1,300,000	$ 8,800,000	$ 7,500,000	$ 1,100,000	$ 3,500,000	$ 5,000,000	$ 500,000	$ 3,900,000				$ 31,600,000	$ 5,300,000	$ 6,300,000	$ 1,700,000	$ 2,200,000	$ 5,000,000		$ 6,500,000	$ 5,200,000	$ 6,800,000		$ 5,000,000	$ 5,000,000		$ 16,900,000	$ 400,000	$ 10,000,000	$ 10,000,000	$ 8,100,000	$ 20,000,000
Convertible bridge loan						500,000		600,000										5,300,000													1,700,000					2,400,000		1,000,000
Proceeds from sale of business	6,400,000	38,974,000	17,596,000	171,268,000																								36,400,000
Amount held in escrow																												4,100,000
Additional escrow maximum																												6,500,000
Ownership interest under cost method, percentage													6.50%											7.70%																8.00%
Payments to Acquire Other Investments																								1,300,000															10,000,000	800,000
Fund amount for participations in loan and equity interests															2,300,000	4,200,000	9,700,000
Fund amount for participations in loan															2,200,000	3,800,000	8,100,000
Fund amount for participations in equity interests															100,000	300,000	1,300,000
Equity method investments		110,638,000	106,741,000															0
Acquisitions of ownership interests in companies as available-for-sale securities																																											18,300,000
Number of preferred stock units and warrants purchased																																										2,500
Warrants exercisable for common shares																																										2,500,000
Cost of shares acquired from previous investor																								1,200,000
Shares of common stock to be purchased with preferred stock units and warrants																																									2,500,000
Purchase price of preferred stock and warrants																																										5,000,000
Fund amount for participations in warrants																$ 100,000	$ 300,000

XML

Net Income (Loss) Per Share Calculations of Net Income (Loss) Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2013		Sep. 30, 2013		Jun. 30, 2013		Mar. 31, 2013		Dec. 31, 2012		Sep. 30, 2012		Jun. 30, 2012		Mar. 31, 2012		Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Basic:
Net income (loss)	$ 23,967		$ (19,430)		$ (28,123)		$ (11,939)		$ (10,808)		$ (8,757)		$ (10,137)		$ (9,660)		$ (35,525)	$ (39,362)	$ 110,597
Average common shares outstanding																	21,362	20,974	20,764
Net income (loss) per share (in dollars per share)	$ 1.10	[1]	$ (0.90)	[1]	$ (1.33)	[1]	$ (0.57)	[1]	$ (0.51)	[1]	$ (0.42)	[1]	$ (0.48)	[1]	$ (0.46)	[1]	$ (1.66)	$ (1.88)	$ 5.33
Diluted:
Net income (loss)	23,967		(19,430)		(28,123)		(11,939)		(10,808)		(8,757)		(10,137)		(9,660)		(35,525)	(39,362)	110,597
Interest on convertible senior debentures																	0	0	5,750
Net income (loss) for diluted per share calculation																	$ (35,525)	$ (39,362)	$ 116,347
Number of shares used in basic per share computation																	21,362	20,974	20,764
Number of shares used in diluted per share computation																	21,362	20,974	24,522
Net income (loss) per share (in dollars per share)	$ 0.99	[1]	$ (0.90)	[1]	$ (1.33)	[1]	$ (0.57)	[1]	$ (0.51)	[1]	$ (0.42)	[1]	$ (0.48)	[1]	$ (0.46)	[1]	$ (1.66)	$ (1.88)	$ 4.74
Convertible Senior Debentures [Member]
Diluted:
Convertible senior debentures (in shares)																	0	0	3,009
Unvested restricted stock and DSUs [Member]
Diluted:
Stock options (in shares)																	0	0	60
Employee stock options [Member]
Diluted:
Stock options (in shares)																	0	0	689

[1] Per share amounts for the quarters have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period. Additionally, in regard to diluted per share amounts only, quarterly amounts may not add to the annual amounts because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive, and because of the adjustments to net income (loss) for the dilutive effect of partner company common stock equivalents and convertible securities.

XML

Convertible Debentures and Credit Arrangements Convertible Senior Debentures due 2014 Narrative (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012	Nov. 30, 2012	Mar. 31, 2010
Debt Instrument [Line Items]
Convertible debt outstanding	$ 49,948,000	$ 48,991,000
Convertible Senior Debentures due 2014 [Member]
Debt Instrument [Line Items]
Face amount				46,900,000.0
Repurchase amount			58,700,000
Convertible debt outstanding	$ 29,000	$ 67,000

XML

Operating Segments Segment Data from Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Segment Reporting Information [Line Items]
Operating loss	$ (4,720)	$ (4,835)	$ (6,715)	$ (5,374)	$ (4,792)	$ (4,790)	$ (5,148)	$ (4,743)	$ (21,644)	$ (19,473)	$ (21,168)
Interest income	550	572	790	734	736	696	595	899	2,646	2,926	1,424
Equity income (loss)	22,646	(9,866)	(18,400)	(6,987)	(6,829)	(3,293)	(8,947)	(7,448)	(12,607)	(26,517)	142,457
Net income (loss)	23,967	(19,430)	(28,123)	(11,939)	(10,808)	(8,757)	(10,137)	(9,660)	(35,525)	(39,362)	110,597
Assets	345,996				374,144				345,996	374,144
Total Segments
Segment Reporting Information [Line Items]
Operating loss									(15)	(10)	0
Interest income									1,506	1,505	210
Equity income (loss)									(12,903)	(26,980)	142,682
Net income (loss)									(10,776)	(7,915)	135,680
Assets	157,193				154,406				157,193	154,406
Healthcare [Member]
Segment Reporting Information [Line Items]
Operating loss									0	0	0
Interest income									0	0	0
Equity income (loss)									(31,706)	(26,544)	121,299
Net income (loss)									(32,563)	(6,660)	114,063
Assets	74,939				83,500				74,939	83,500
Technology [Member]
Segment Reporting Information [Line Items]
Operating loss									0	0	0
Interest income									0	0	0
Equity income (loss)									20,899	(119)	21,454
Net income (loss)									20,899	(119)	21,478
Assets	69,471				58,753				69,471	58,753
Penn Mezzanine [Member]
Segment Reporting Information [Line Items]
Operating loss									(15)	(10)	0
Interest income									1,506	1,505	210
Equity income (loss)									(2,096)	(317)	(71)
Net income (loss)									888	(1,136)	139
Assets	12,783				12,153				12,783	12,153
Other Items
Segment Reporting Information [Line Items]
Operating loss									(21,629)	(19,463)	(21,168)
Interest income									1,140	1,421	1,214
Equity income (loss)									296	463	(225)
Net income (loss)									(24,749)	(31,447)	(25,083)
Assets	$ 188,803				$ 219,738				$ 188,803	$ 219,738

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Ownership Interests in and Advances to Partner Companies and Funds Unaudited Financial Information for Partner Companies and Funds (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Jun. 30, 2013 PixelOptics, Inc. [Member]	Dec. 31, 2012 PixelOptics, Inc. [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Current assets	$ 221,001	$ 168,246	$ 285	$ 323
Non-current assets	90,042	74,555	4,588	5,259
Total assets	311,043	242,801	4,873	5,582
Current liabilities	153,398	125,491	56,721	34,184
Non-current liabilities	75,324	37,384	1,818	10,228
Shareholders’ equity	82,321	79,926	(53,666)	(38,830)
Total liabilities and shareholders’ equity	$ 311,043	$ 242,801	$ 4,873	$ 5,582

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Other Income (Loss), Net (Tables)

12 Months Ended

Dec. 31, 2013

Other Income and Expenses [Abstract]

Other Income (Loss), Net

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Loss on repurchase of convertible debentures	$	—		$	(7,895	)	$	—
Gain on sale of companies and funds, net	—			9,004			—
Gain (loss) on mark-to-market of holdings in fair value method partner companies	(915		)	11,035			—
Impairment charges on cost method partner companies and private equity funds	(250		)	(350		)	—
Gain on mark-to-market of Penn Mezzanine warrants	1,146			264			—
Impairment charges on Penn Mezzanine loan and equity participations	(295		)	(2,489		)	—
Other than temporary impairment on available-for-sale securities	(43		)	(260		)	(7,451		)
Other	740			29			1,306
	$	383		$	9,338		$	(6,145	)

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Operating Segments Net Loss from Other Items (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Segment Reporting, Reconciliation of Net Income (Loss) Segment to Consolidated [Line Items]
Net income (loss) before income taxes	$ 23,967	$ (19,430)	$ (28,123)	$ (11,939)	$ (10,808)	$ (8,757)	$ (10,137)	$ (9,660)	$ (35,525)	$ (39,362)	$ 110,597
Income tax benefit (expense)	0	0	0	0	0	0	0	0	0	0	0
Net income (loss)	23,967	(19,430)	(28,123)	(11,939)	(10,808)	(8,757)	(10,137)	(9,660)	(35,525)	(39,362)	110,597
Corporate Operations [Member]
Segment Reporting, Reconciliation of Net Income (Loss) Segment to Consolidated [Line Items]
Net income (loss) before income taxes									(24,749)	(31,447)	(25,083)
Income tax benefit (expense)									0	0	0
Net income (loss)									$ (24,749)	$ (31,447)	$ (25,083)

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Commitments and Contingencies Narrative (Detail) (USD $)	1 Months Ended		12 Months Ended				3 Months Ended		12 Months Ended			12 Months Ended
	May 31, 2008	Oct. 31, 2001	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013 Clawback Liability [Member]	Jun. 30, 2013 Employee Severance [Member]	Dec. 31, 2013 Employee Severance [Member]	Dec. 31, 2013 Letter of credit [Member]	Dec. 31, 2013 Accrued expenses and other current liabilities [Member]	Dec. 31, 2013 Other long-term liabilities [Member]	Dec. 31, 2013 Private equity funds [Member]
Commitment Contingencies And Guarantees [Line Items]
Lease expiration year			2017
Total rental expense under operating leases			$ 600,000	$ 600,000	$ 500,000
Future minimum lease payments under non-cancelable operating leases 2014			500,000
Future minimum lease payments under non-cancelable operating leases 2015			400,000
Company outstanding guarantees			3,800,000					2,400,000
Committed capital of private equity funds												100,000
Funding period												12 months
Accrued expenses and other current liabilities						1,300,000
Accrued expenses			2,431,000	2,601,000		1,000,000
Other long-term liabilities			3,683,000	3,921,000		300,000
Company's ownership in the funds						19.00%
Proceeds from sale of business	6,400,000		38,974,000	17,596,000	171,268,000
Annual payments		650,000
Liability to former chairman and chief executive officer, current										800,000
Liability to former chairman and chief executive officer, non-current											2,600,000
Letters of credit outstanding									6,300,000
Letter of credit expiration date									Mar. 19, 2019
Severance charge							$ 900,000

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Accrued Expenses (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Payables and Accruals [Abstract]
Accrued interest	$ 366	$ 335
Other	2,065	2,266
Accrued expenses	$ 2,431	$ 2,601

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Operating Segments Active Partner Companies by Segment (Detail)	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Healthcare [Member] | AdvantEdge Healthcare Solutions, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	40.10%		40.20%		40.20%
Healthcare [Member] | Alverix, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	48.50%		49.20%		49.60%
Healthcare [Member] | Crescendo Bioscience, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under cost method, percentage	12.60%		12.60%
Healthcare [Member] | Dabo Health, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under cost method, percentage	8.00%
Healthcare [Member] | Good Start Genetics, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	30.00%		30.00%		26.30%
Healthcare [Member] | Medivo, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	34.50%		30.00%		30.00%
Healthcare [Member] | NovaSom, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	30.30%		30.30%		30.30%
Healthcare [Member] | Nu Pathe Inc [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under fair value method, percentage	16.50%	[1]	17.80%	[1]	17.80%	[1]
Healthcare [Member] | Putney, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	27.60%		27.60%		27.60%
Healthcare [Member] | Quantia, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	35.10%
Healthcare [Member] | Sotera Wireless, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under cost method, percentage	7.30%
Technology [Member] | Appfirst [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	34.30%		35.00%
Technology [Member] | Apprenda, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	22.00%
Technology [Member] | Beyond.com, Inc [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	38.20%		38.30%		38.30%
Technology [Member] | Bridgevine, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	22.70%		21.70%		22.80%
Technology [Member] | Clutch [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	24.00%
Technology [Member] | DriveFactor Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	40.60%		35.40%		23.90%
Technology [Member] | Hoopla Software, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	25.30%		25.30%		28.00%
Technology [Member] | Lumesis, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	44.20%		31.60%
Technology [Member] | MediaMath, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	22.50%		22.20%		22.40%
Technology [Member] | Pneuron [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	27.60%
Technology [Member] | Spongecell, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	23.00%		23.10%

[1] The Company’s ownership interest in NuPathe was accounted for as available-for-sale securities following NuPathe’ s completion of an initial public offering in August 2010. In October 2012, the Company participated in a private placement of NuPathe preferred stock units, and in conjunction with this financing the Company placed two persons on NuPathe’s board of directors. As a result, the Company determined that it exercised significant influence over NuPathe which made the equity method of accounting applicable to its ownership interests. Instead, the Company elected the fair value option beginning in October 2012.

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Subsequent Events Narrative (Details) (USD $)	1 Months Ended	12 Months Ended			1 Months Ended
	May 31, 2008	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Jan. 31, 2014 Subsequent Event [Member] Alverix, Inc. [Member]	Feb. 28, 2014 Subsequent Event [Member] Nupathe [Member]	Feb. 28, 2014 Subsequent Event [Member] Crescendo [Member]
Subsequent Event [Line Items]
Proceeds from sales of and distributions from companies and funds	$ 6,400,000	$ 38,974,000	$ 17,596,000	$ 171,268,000	$ 15,700,000	$ 23,100,000	$ 38,400,000
Amount held in escrow					1,700,000		3,200,000
Held in Escrow Period					18 months		15 months
Sale Price Per Share						$ 3.65
Per Share Proceeds From Milestone Payments						$ 3.15
Additional sale proceeds						$ 24,200,000

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Operating Segments Active Partner Companies by Segment (Parenthetical) (Detail) (Nu Pathe Inc [Member])	Oct. 23, 2012 Person
Nu Pathe Inc [Member]
Schedule of Equity Method Investments [Line Items]
Number of Board of directors	2

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Net Income (Loss) Per Share Narrative (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares of common stock at prices ranging, lower limit	$ 3.93	$ 3.93	$ 18.78
Shares of common stock at prices ranging, upper limit	$ 18.80	$ 18.80	$ 21.36
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share of common stock excluded from diluted net loss per share calculation	1.8	3.3	0.1
Deferred stock units, performance-based stock units and restricted stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share of common stock excluded from diluted net loss per share calculation	0.3	0.3
Convertible Senior Debentures due 2018 [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share of common stock excluded from diluted net loss per share calculation	3.0	3.0

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Subsequent Events

12 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

In February 2014, Crescendo Bioscience was acquired by Myriad Genetics, Inc. The Company received approximately $38.4 million in cash proceeds in connection with the transaction, excluding $3.2 million which will be held in escrow for 15 months.

In February 2014, NuPathe was acquired by Teva Pharmaceutical Industries Ltd. for $3.65 per share in cash. In addition to the upfront cash payment, NuPathe shareholders received rights to receive additional cash payments of up to $3.15 per share if specified milestones are achieved over time. The Company received initial net cash proceeds of $23.1 million as a result of the transaction. Depending on the achievement of the milestones, the Company may receive up to an additional $24.2 million.

In January 2014, Alverix was acquired by Becton, Dickinson and Company. The Company received cash proceeds of $15.7 million, excluding $1.7 million which will be held in escrow for approximately 18 months.

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Fair Value Measurements Narrative (Detail) (USD $)			12 Months Ended							12 Months Ended		1 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Private equity funds [Member]	Dec. 31, 2012 Private equity funds [Member]	Dec. 31, 2013 Penn Mezzanine [Member]	Dec. 31, 2012 Penn Mezzanine [Member]	Dec. 31, 2013 Penn Mezzanine [Member] Equity loss [Member]	Dec. 31, 2013 Level 3 [Member] Private equity funds [Member]	Dec. 31, 2013 Level 3 [Member] Penn Mezzanine [Member]	Dec. 31, 2013 PixelOptics, Inc. [Member]	Dec. 31, 2012 PixelOptics, Inc. [Member]	Feb. 28, 2013 Nupathe [Member]
Schedule of Available-for-sale Securities [Line Items]
Marketable securities, current	$ 38,250,000	$ 110,957,000
Marketable securities, non current	6,088,000	29,059,000
Impairment charges			300,000	400,000	300,000	2,500,000	1,800,000			11,200,000	5,000,000
Equity method investments	110,638,000	106,741,000	1,766,000	3,810,000						0
Amount of gain associated with mark-to-market adjustments					1,100,000	200,000
Shares converted												2,500
Shares issued												2,500,000
Fair market value of investment								$ 1,700,000	$ 1,300,000

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Significant Accounting Policies Defined Contribution Plans (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Accounting Policies [Abstract]
Defined contribution plan, maximum annual contribution of employees	75.00%
Employer contribution amount	$ 0.4	$ 0.3	$ 0.3

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Operating Segments Narrative (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013 Entity	Dec. 31, 2013 Other Items	Dec. 31, 2012 Other Items	Dec. 31, 2013 Penn Mezzanine [Member]	Aug. 31, 2011 Penn Mezzanine [Member]
Segment Reporting Information [Line Items]
Non-consolidated partner companies	22
Ownership interest under equity method, percentage				36.00%	36.00%
Total assets included cash, cash equivalents, cash held in escrow and marketable securities		$ 183.7	$ 212.5

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Selected Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Information

	Three Months Ended
	March 31			June 30			September 30			December 31
	(In thousands except per share data)
2013:
General and administrative expense	$	5,374		$	6,715		$	4,835		$	4,720
Operating loss	(5,374		)	(6,715		)	(4,835		)	(4,720		)
Other income (loss), net	757			(2,724		)	(4,224		)	6,574
Interest income	734			790			572			550
Interest expense	(1,069		)	(1,074		)	(1,077		)	(1,083		)
Equity income (loss)	(6,987		)	(18,400		)	(9,866		)	22,646
Net income (loss) before income taxes	(11,939		)	(28,123		)	(19,430		)	23,967
Income tax benefit (expense)	—			—			—			—
Net income (loss)	$	(11,939	)	$	(28,123	)	$	(19,430	)	$	23,967
Net income (loss) per share (a)
Basic	$	(0.57	)	$	(1.33	)	$	(0.90	)	$	1.10
Diluted	$	(0.57	)	$	(1.33	)	$	(0.90	)	$	0.99
2012:
General and administrative expense	$	4,743		$	5,148		$	4,790		$	4,792
Operating loss	(4,743		)	(5,148		)	(4,790		)	(4,792		)
Other income, net	3,084			4,819			91			1,344
Interest income	899			595			696			736
Interest expense	(1,452		)	(1,456		)	(1,461		)	(1,267		)
Equity loss	(7,448		)	(8,947		)	(3,293		)	(6,829		)
Net loss before income taxes	(9,660		)	(10,137		)	(8,757		)	(10,808		)
Income tax benefit (expense)	—			—			—			—
Net loss	$	(9,660	)	$	(10,137	)	$	(8,757	)	$	(10,808	)
Net loss per share (a)
Basic	$	(0.46	)	$	(0.48	)	$	(0.42	)	$	(0.51	)
Diluted	$	(0.46	)	$	(0.48	)	$	(0.42	)	$	(0.51	)

(a) Per share amounts for the quarters have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period. Additionally, in regard to diluted per share amounts only, quarterly amounts may not add to the annual amounts because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive, and because of the adjustments to net income (loss) for the dilutive effect of partner company common stock equivalents and convertible securities.

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Convertible Debentures and Credit Arrangements Schedule of Convertible Senior Debentures (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Convertible senior debentures	$ 49,948	$ 48,991
Less: current portion	(470)	0
Convertible senior debentures—non-current	49,478	48,991
Convertible Senior Debentures due 2018 [Member]
Debt Instrument [Line Items]
Convertible senior debentures	49,478	48,483
Convertible Senior Debentures due 2024 [Member]
Debt Instrument [Line Items]
Convertible senior debentures	441	441
Convertible Senior Debentures due 2014 [Member]
Debt Instrument [Line Items]
Convertible senior debentures	$ 29	$ 67

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Income Taxes Differences Between United States Federal Income Tax Rate and Effective Income Tax Rate (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Tax Disclosure [Abstract]
Statutory tax (benefit) expense	(35.00%)	(35.00%)	35.00%
Increase (decrease) in taxes resulting from:
Valuation allowance	34.70%	34.70%	(35.30%)
Other adjustments	0.30%	0.30%	0.30%
Effective Income Tax Rate, Continuing Operations, Total	0.00%	0.00%	0.00%

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Stock-Based Compensation Stock-Based Compensation Expense (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,821	$ 2,014	$ 3,052
General and Administrative Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,821	$ 2,014	$ 3,052

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Ownership Interests in and Advances to Partner Companies and Funds Results of Operations of Partner Companies and Funds (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Results of Operations:
Revenue	$ 273,754	$ 191,928	$ 117,057
Gross profit	125,766	90,876	63,160
Net loss	$ (52,489)	$ (79,662)	$ (38,468)

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Ownership Interests in and Advances to Partner Companies and Funds

12 Months Ended

Dec. 31, 2013

Ownership Interests in and Advances to Partner Companies and Funds [Abstract]

Ownership Interests in and Advances to Partner Companies and Funds

Ownership Interests in and Advances to Partner Companies and Funds

The following summarizes the carrying value of the Company’s ownership interests in and advances to partner companies and private equity funds.

	December 31, 2013		December 31, 2012
	(In thousands)
Fair value	$	20,057	$	20,972
Equity Method:
Partner companies	108,872		102,931
Private equity funds	1,766		3,810
	110,638		106,741
Cost Method:
Partner companies	13,480		10,000
Private equity funds	2,418		2,634
	15,898		12,634
Advances to partner companies	1,986		8,292
	$	148,579	$	148,639
Loan participations receivable	$	8,135	$	7,085
Available-for-sale securities	$	15	$	58

Impairment charges related to equity method partner companies were $11.2 million, $5.0 million and $7.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. The impairment charge in 2013 was related to PixelOptics, Inc. and is reflected in Equity loss in the Consolidated Statements of Operations. The impairment was based on PixelOptics' inability to raise additional capital to continue its operations. The impairment charge in 2012 also related to PixelOptics. The adjusted carrying value of PixelOptics at December 31, 2013 was $0 and the Company believes it will not recover any of its capital. On November 4, 2013, PixelOptics filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The impairment charges in 2011 included $5.7 million related to Swap.com and $1.4 million related to SafeCentral, Inc., both former partner companies.

The Company recognized an impairment charge of $1.8 million for the year ended December 31, 2013 related to its interest in the management company of Penn Mezzanine which is reflected in Equity loss in the Consolidated Statements of Operations. During the quarter ended December 31, 2013, the Company decided that it will not acquire participating interests in any new Penn Mezzanine lending activities.

The Company recognized impairment charges of $0.3 million and $2.5 million related to its Penn Mezzanine debt and equity participations in the years ended December 31, 2013 and 2012, respectively, which is reflected in Other income (loss), net in the Consolidated Statements of Operations. The charge in 2013 included $0.2 million related to loan participations and $0.1 million representing an adjustment to the fair value of the Company's participation in warrants. The charge in 2012 included $2.0 million related to loan participations, $0.4 million related to equity participations and $0.1 million related to warrant participations.

The Company recognized impairment charges of $0.3 million and $0.4 million related to its cost method interest in a legacy private equity fund in 2013 and 2012, respectively, which are reflected in Other income (loss), net in the Consolidated Statement of Operations.

The Company recognized impairment charges of $0.3 million and $7.5 million for the years ended December 31, 2012 and 2011, respectively, related to available-for-sale securities. The impairment charges are reflected in Other income (loss), net, in the Consolidated Statements of Operations and represent the unrealized loss on the mark-to-market of its ownership interests in Tengion and NuPathe which were previously recorded as a separate component of equity. During the years ended December 2012 and 2011, the Company determined that the decline in the value of its public holdings in Tengion and NuPathe were other than temporary.

On October 23, 2012, the Company purchased preferred stock and warrants from NuPathe for $5.0 million. Each of the 2,500 shares of preferred stock was convertible into 1,000 shares of NuPathe’s common stock at a price of $2.00 per share, subject to antidilution protection. The preferred stock was converted in February 2013. The warrants were exercisable to purchase 2.5 million shares of NuPathe common stock at a price of $2.00 per share. Following the transaction, the Company’s interests in NuPathe’s common stock, preferred stock, warrants and options are accounted for under the fair value option. The Company recognized an unrealized gain of $4.6 million related to the mark-to-market of the Company’s ownership interests in NuPathe’s common stock, previously classified as a separate component of equity. In the period from October 23, 2012 through December 31, 2012, the Company recognized an unrealized gain of $6.4 million on the mark-to-market of its holdings in NuPathe. These gains were included in Other income (loss), net in the Consolidated Statements of Operations. For the year ended December 31, 2013, the Company recognized an unrealized loss of $0.9 million on the mark-to-market of its holdings in NuPathe, which is included in Other income (loss), net in the Consolidated Statements of Operations

In December 2013, ThingWorx, Inc., formerly an equity method partner company, was acquired by PTC, Inc. The Company received cash proceeds of $36.4 million, excluding $4.1 million which will be held in escrow until December 30, 2015. Depending on the achievement of certain milestones, the Company may receive up to an additional $6.5 million in connection with the transaction. The Company recognized a gain of $32.7 million on the transaction which is recorded in Equity income (loss) in the Consolidated Statement of Operations for the year ended December 31, 2013.

In July 2011, Portico Systems, Inc. was acquired by McKesson resulting in cash proceeds of approximately $32.8 million in exchange for the Company’s equity interests. In June 2012, the Company received an additional $1.9 million as a result of the achievement of milestones associated with the transaction. In August 2012, the Company received $3.4 million upon the expiration of the escrow period. These amounts were recorded in Equity income (loss) in the Consolidated Statement of Operations.

The following unaudited summarized balance sheets for PixelOptics at June 30, 2013 and December 31, 2012 and the results of operations for the six months ended June 30, 2013 and 2012, have been compiled from the unaudited financial statements of PixelOptics.  The results of PixelOptics are reported on a one quarter lag.  

	As of June 30,			As of December 31,
	2013			2012
	(In thousands)
Balance Sheets:
Current assets	$	285		$	323
Non-current assets	4,588			5,259
Total assets	$	4,873		$	5,582
Current liabilities	$	56,721		$	34,184
Non-current liabilities	1,818			10,228
Shareholders’ equity	(53,666		)	(38,830		)
Total liabilities and shareholders’ equity	$	4,873		$	5,582

	Six Months Ended
	June 30, 2013			June 30, 2012
	(In thousands)
Results of Operations:
Revenue	$	800		$	569
Operating loss	$	(12,219	)	$	(16,172	)
Net loss	$	(14,838	)	$	(16,923	)

The following unaudited summarized financial information for partner companies and funds accounted for under the equity method at December 31, 2013 and 2012 and for each of the three years ended December 31, 2013, 2012 and 2011 has been compiled from the unaudited financial statements of our respective partner companies and funds and reflects certain historical adjustments. Results of operations of the partner companies and funds are excluded for periods prior to their acquisition and subsequent to their disposition. The unaudited financial information below does not include information pertaining to PixelOptics.

	As of December 31,
	2013		2012
	(In thousands)
Balance Sheets:
Current assets	$	221,001	$	168,246
Non-current assets	90,042		74,555
Total assets	$	311,043	$	242,801
Current liabilities	$	153,398	$	125,491
Non-current liabilities	75,324		37,384
Shareholders’ equity	82,321		79,926
Total liabilities and shareholders’ equity	$	311,043	$	242,801

As of December 31, 2013, the Company’s carrying value in equity method partner companies, in the aggregate, exceeded the Company’s share of the net assets of such companies by approximately $72.2 million. Of this excess, $53.7 million was allocated to goodwill and $18.5 million was allocated to intangible assets.

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Results of Operations:
Revenue	$	273,754		$	191,928		$	117,057
Gross profit	$	125,766		$	90,876		$	63,160
Net loss	$	(52,489	)	$	(79,662	)	$	(38,468	)

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Stock-Based Compensation Assumptions used in Valuation of Options Granted (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Service-based awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%	0.00%	0.00%
Expected volatility	52.00%	56.00%	57.00%
Average expected option life	5 years	5 years	5 years
Risk-free interest rate	1.30%	0.80%	1.40%
Performance-based awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%	0.00%	0.00%
Expected volatility	46.00%	55.00%	57.00%
Average expected option life	4 years 8 months 12 days	5 years 6 months	5 years 9 months 18 days
Risk-free interest rate	1.80%	0.80%	0.90%

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Ownership Interests in and Advances to Partner Companies and Funds Summary of the carrying value of the Company's ownership interests in and advances to partner companies and private equity funds (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Investments in and Advances to Affiliates [Line Items]
Fair value	$ 20,057	$ 20,972
Equity method investments	110,638	106,741
Cost method investments	15,898	12,634
Advances to Affiliate	1,986	8,292
Total	148,579	148,639
Loan participations receivable	8,135	7,085
Available-for-sale securities	15	58
Partner companies [Member]
Investments in and Advances to Affiliates [Line Items]
Equity method investments	108,872	102,931
Cost method investments	13,480	10,000
Private equity funds [Member]
Investments in and Advances to Affiliates [Line Items]
Equity method investments	1,766	3,810
Cost method investments	$ 2,418	$ 2,634

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consisted of the following:

	As of December 31,
	2013			2012
	(In thousands)
Building and improvements	$	607		$	607
Office equipment	1,039			1,002
	1,646			1,609
Accumulated depreciation	(1,508		)	(1,416		)
	$	138		$	193

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Carrying Value and Fair Value of Certain Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table provides the carrying value and fair value of certain financial assets and liabilities of the Company measured at fair value on a recurring basis as of December 31, 2013 and 2012: 

	Carrying Value		Fair Value Measurement at December 31, 2013
			Level 1		Level 2		Level 3
	(in thousands)
Cash and cash equivalents	$	139,318	$	139,318	$	—	$	—
Restricted marketable securities	5		5		—		—
Ownership interest in common stock of NuPathe	16,874		16,874		—		—
Ownership interest in warrants and options of NuPathe	3,183		—		—		3,183
Available-for-sale securities	15		15		—		—
Warrant participations	1,563		—		—		1,563
Marketable securities—held-to-maturity:
Commercial paper	$	13,599	$	13,599	$	—	$	—
U.S. Treasury Bills	8,014		8,014		—		—
Government agency bonds	9,945		9,945		—		—
Certificates of deposit	12,780		12,780		—		—
Total marketable securities	$	44,338	$	44,338	$	—	$	—

	Carrying Value		Fair Value Measurement at December 31, 2012
			Level 1		Level 2		Level 3
	(In thousands)
Cash and cash equivalents	$	66,029	$	66,029	$	—	$	—
Cash held in escrow	6,434		6,434		—		—
Restricted marketable securities	10		10		—		—
Ownership interest in common stock of NuPathe	8,897		8,897		—		—
Ownership interest in preferred stock, warrants and options of NuPathe	12,075		—		—		12,075
Available-for-sale securities	58		58		—		—
Warrant participations	423		—		—		423
Marketable securities—held-to-maturity:
Commercial paper	$	50,932	$	50,932	$	—	$	—
U.S. Treasury Bills	21,352		21,352		—		—
Government agency bonds	45,909		45,909		—		—
Certificates of deposit	21,823		21,823		—		—
Total marketable securities	$	140,016	$	140,016	$	—	$	—

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Convertible Debentures and Credit Arrangements Credit Arrangements Narrative (Details) (Credit Arrangements [Member], USD $)	12 Months Ended
	Dec. 31, 2013
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 50,000,000
Sublimit facility attached on revolving credit facility	20,000,000
Security deposit	80,000,000
Security deposit percentage of investment	75.00%
Remaining borrowing capacity	43,700,000
After Amendment [Member]
Line of Credit Facility [Line Items]
Maturity date	Dec. 31, 2014
Landlord Of Compu Com Systems Incs Dallas Headquarters [Member]
Line of Credit Facility [Line Items]
Letters of credit outstanding	$ 6,300,000
Letter of credit expiration date	Mar. 19, 2019

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Ownership Interests in and Advances to Partner Companies and Funds Narrative (Detail) (USD $)	1 Months Ended	12 Months Ended					12 Months Ended							0 Months Ended	1 Months Ended	2 Months Ended	12 Months Ended			1 Months Ended				12 Months Ended
	May 31, 2008	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013 Goodwill [Member]	Dec. 31, 2013 Intangible Assets [Member]	Dec. 31, 2013 Penn Mezzanine [Member]	Dec. 31, 2012 Penn Mezzanine [Member]	Dec. 31, 2013 Penn Mezzanine [Member] Equity loss [Member]	Dec. 31, 2013 Private equity funds [Member]	Dec. 31, 2012 Private equity funds [Member]	Dec. 31, 2012 Available-for-sale Securities [Member]	Dec. 31, 2011 Available-for-sale Securities [Member]	Oct. 23, 2012 Nupathe [Member]	Oct. 23, 2012 Nupathe [Member]	Dec. 31, 2012 Nupathe [Member]	Dec. 31, 2013 Nupathe [Member]	Dec. 31, 2013 PixelOptics, Inc. [Member]	Dec. 31, 2012 PixelOptics, Inc. [Member]	Dec. 31, 2013 ThingWorx, Inc. [Member]	Aug. 31, 2012 Portico Systems Inc [Member]	Jun. 30, 2012 Portico Systems Inc [Member]	Jul. 31, 2011 Portico Systems Inc [Member]	Dec. 31, 2013 Equity Method Investment [Member] PixelOptics, Inc. [Member]	Dec. 31, 2012 Equity Method Investment [Member] PixelOptics, Inc. [Member]	Dec. 31, 2011 Equity Method Investment [Member] PixelOptics, Inc. [Member]	Dec. 31, 2011 Equity Method Investment [Member] Swap.com [Member]	Dec. 31, 2011 Equity Method Investment [Member] Safe Central Inc [Member]	Dec. 31, 2013 Loan Participations and Assignments [Member] Penn Mezzanine [Member]	Dec. 31, 2012 Loan Participations and Assignments [Member] Penn Mezzanine [Member]	Dec. 31, 2012 Equity Participations [Member] Penn Mezzanine [Member]	Dec. 31, 2013 Warrant [Member] Penn Mezzanine [Member]	Dec. 31, 2012 Warrant [Member] Penn Mezzanine [Member]
Investment [Line Items]
Impairment charges							$ 300,000	$ 2,500,000	$ 1,800,000	$ 300,000	$ 400,000	$ 300,000	$ 7,500,000					$ 11,200,000	$ 5,000,000					$ 11,200,000	$ 5,000,000	$ 7,100,000	$ 5,700,000	$ 1,400,000	$ 200,000	$ 2,000,000	$ 400,000	$ 100,000	$ 100,000
Adjusted carrying value of capital		110,638,000	106,741,000							1,766,000	3,810,000							0						0
Purchase price of preferred stock and warrants														5,000,000	5,000,000
Shares converted															2,500
Common shares convertible from preferred shares															1,000
Common stock conversion price per share															$ 2.00
Warrants exercisable for common shares														2,500,000	2,500,000
Unrealized gain on securities														4,600,000		6,400,000
Unrealized Loss on Securities																	900,000
Proceeds from sale of business	6,400,000	38,974,000	17,596,000	171,268,000																36,400,000			32,800,000
Amount held in escrow																				4,100,000
Proceeds from milestone payments																				6,500,000	3,400,000	1,900,000
Gain on sale of business																				32,700,000
Equity method investment assets exceed carrying value of investment		72,200,000
Equity method investment allocation of excess fair value					$ 53,700,000	$ 18,500,000

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Convertible Debentures and Credit Arrangements (Tables)

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Convertible Senior Debentures

The carrying values of the Company’s convertible senior debentures were as follows:

	As of December 31,
	2013			2012
	(In thousands)
Convertible senior debentures due 2018	$	49,478		$	48,483
Convertible senior debentures due 2024	441			441
Convertible senior debentures due 2014	29			67
	49,948			48,991
Less: current portion	(470		)	—
Convertible senior debentures — non-current	$	49,478		$	48,991

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Accrued Expenses and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2013

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses and other current liabilities consisted of the following:

	As of December 31,
	2013		2012
	(In thousands)
Accrued interest	$	366	$	335
Other	2,065		2,266
	$	2,431	$	2,601

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Description of the Company

Safeguard Scientifics, Inc. (“Safeguard” or the “Company”) seeks to build value in growth-stage businesses by providing capital and strategic, operational and management resources. Safeguard participates principally in growth and expansion financings and at times, early-stage financings. The Company’s vision is to be the preferred source of capital for entrepreneurs and management teams in targeted sectors.

The Company strives to create long-term value for its shareholders by helping its partner companies increase their market penetration, grow revenue and improve cash flow. The Company focuses principally on companies with initial capital requirements of between $5 million and $15 million, and follow-on financing needs of between $5 million and $10 million, with a total anticipated deployment of up to $25 million from Safeguard. The Company principally targets companies that operate in two sectors:

Healthcare — companies focused on medical technology (“MedTech”), including diagnostics and devices; and healthcare technology (“HealthTech”); and specialty pharmaceuticals. Within these areas, Safeguard targets companies that have lesser regulatory risk and have achieved or are near commercialization.

Technology — companies focused on digital media; financial technology (“FinTech”) and Enterprise 3.0, which includes mobile technology, cloud, the “Internet of Things” and big data. Within these areas, Safeguard targets companies that have transaction-enabling applications with a recurring revenue stream.

Principles of Consolidation

The consolidated financial statements include the accounts of Safeguard and all of its subsidiaries in which a controlling financial interest is maintained. All intercompany accounts and transactions are eliminated in consolidation.

Principles of Accounting for Ownership Interests in Companies

The Company’s ownership interests in its partner companies and private equity funds are accounted for using one of the following methods: consolidation, equity, cost, fair value and available-for-sale. The accounting method applied is generally determined by the degree of the Company’s influence over the entity, primarily determined by its voting interest in the entity.

In addition to holding voting and non-voting equity and debt securities, the Company also periodically makes advances to its partner companies in the form of promissory notes which are included in the Ownership interests in and advances to partner companies and funds line item in the Consolidated Balance Sheets.

Consolidation Method. The Company generally accounts for partner companies in which it directly or indirectly owns more than 50% of the outstanding voting securities under the consolidation method of accounting. Under this method, the Company includes the partner companies’ financial statements within the Company’s Consolidated Financial Statements, and all significant intercompany accounts and transactions are eliminated. The Company reflects participation of other stockholders in the net assets and in the income or losses of these consolidated partner companies in Equity in the Consolidated Balance Sheets and in Net (income) loss attributable to non-controlling interest in the Statements of Operations. Net (income) loss attributable to non-controlling interest adjusts the Company’s consolidated operating results to reflect only the Company’s share of the earnings or losses of the consolidated partner company. The Company accounts for results of operations and cash flows of a consolidated partner company through the latest date in which it holds a controlling interest. If the Company subsequently relinquishes control but retains an interest in the partner company, the accounting method is adjusted to the equity, cost or fair value method of accounting, as appropriate. As of December 31, 2013 and for each of the three years in the period then ended, the Company did not hold a controlling interest in any of its partner companies.

Fair Value Method. The Company accounts for its holdings in NuPathe, a publicly traded partner company, under the fair value method of accounting beginning in October 2012. Unrealized gains and losses on the mark-to-market of the Company’s holdings in fair value method companies and realized gains and losses on the sale of any holdings in fair value method companies are recognized in Other income (loss), net in the Consolidated Statements of Operations.

Equity Method. The Company accounts for partner companies whose results are not consolidated, but over which it exercises significant influence, under the equity method of accounting. Whether or not the Company exercises significant influence with respect to a partner company depends on an evaluation of several factors including, among others, representation of the Company on the partner company’s board of directors and the Company’s ownership level, which is generally a 20% to 50% interest in the voting securities of a partner company, including voting rights associated with the Company’s holdings in common, preferred and other convertible instruments in the company. The Company also accounts for its interests in some private equity funds under the equity method of accounting based on its non-controlling general and limited partner interests in such funds. Under the equity method of accounting, the Company does not reflect a partner company’s financial statements within the Company’s Consolidated Financial Statements; however, the Company’s share of the income or loss of such partner company is reflected in Equity income (loss) in the Consolidated Statements of Operations. The Company includes the carrying value of equity method partner companies in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets. Any excess of the Company’s cost over its underlying interest in the net assets of equity method partner companies allocated to intangible assets is amortized over the estimated useful lives of the related intangible assets. The Company reflects its share of the income or loss of the equity method partner companies on a one quarter lag. This reporting lag could result in a delay in recognition of the impact of changes in the business or operations of these partner companies.

When the Company’s carrying value in an equity method partner company is reduced to zero, the Company records no further losses in its Consolidated Statements of Operations unless the Company has an outstanding guarantee obligation or has committed additional funding to such equity method partner company. When such equity method partner company subsequently reports income, the Company will not record its share of such income until it exceeds the amount of the Company’s share of losses not previously recognized.

Cost Method. The Company accounts for partner companies not consolidated or accounted for under the equity method or fair value method under the cost method of accounting. Under the cost method, the Company does not include its share of the income or losses of partner companies in the Company’s Consolidated Statements of Operations. The Company includes the carrying value of cost method partner companies in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

Available-for-Sale Securities. The Company accounts for its ownership interest in former partner company Tengion, Inc. as available-for-sale securities. In addition, for the period from its initial public offering in August 2010 through October 2012, the Company’s ownership interest in NuPathe was accounted for as available-for-sale securities. Available-for-sale securities are carried at fair value, based on quoted market prices, with the unrealized gains and losses, net of tax, reported as a separate component of equity. Unrealized losses are charged against net income (loss) when a decline in the fair value is determined to be other than temporary.

Accounting Estimates

The preparation of the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect amounts reported in the financial statements and accompanying notes. Actual results may differ from these estimates. These estimates include the evaluation of the recoverability of the Company’s ownership interests in and advances to partner companies and funds and investments in marketable securities, income taxes, stock-based compensation and commitments and contingencies. Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances.

Certain amounts recorded to reflect the Company’s share of income or losses of partner companies accounted for under the equity method are based on unaudited results of operations of those companies and may require adjustments in the future when audits of these entities’ financial statements are completed.

It is reasonably possible that the Company’s accounting estimates with respect to the ultimate recoverability of the carrying value of the Company’s ownership interests in and advances to partner companies and funds could change in the near term and that the effect of such changes on the financial statements could be material. At December 31, 2013, the Company believes the carrying value of the Company’s ownership interests in and advances to partner companies and funds is not impaired, although there can be no assurance that the Company’s future results will confirm this assessment, that a significant write-down or write-off will not be required in the future, or that a significant loss will not be recorded in the future upon the sale of a company.

Cash and Cash Equivalents and Marketable Securities

The Company considers all highly liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash and cash equivalents consist of deposits that are readily convertible into cash. The Company determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Held-to-maturity securities are carried at amortized cost, which approximates fair value. Marketable securities consist of held-to-maturity securities, primarily consisting of government agency bonds, commercial paper and certificates of deposits. Marketable securities with a maturity date greater than one year from the balance sheet date are considered long-term. The Company has not experienced any significant losses on cash equivalents and does not believe it is exposed to any significant credit risk on cash and cash equivalents.

Restricted Marketable Securities

Restricted marketable securities consist of certificates of deposit with various maturity dates.

Financial Instruments

The Company’s financial instruments (principally cash and cash equivalents, marketable securities, restricted cash equivalents, accounts receivable, notes receivable, accounts payable and accrued expenses) are carried at cost, which approximates fair value due to the short-term maturity of these instruments. The Company’s warrant participations are carried at fair value. The Company’s long-term debt is carried at cost. At December 31, 2013, the market value of the Company’s outstanding debentures was approximately $69.9 million based on the midpoint of bid and ask prices as of that date.

Accounting for Participating Interests in Mezzanine Loans Receivable and Related Equity Interests

In 2011, the Company acquired a 36% ownership interest in the management company and general partner of Penn Mezzanine L.P. Penn Mezzanine is a mezzanine lender focused on lower middle-market, Mid-Atlantic companies. From such acquisition through December 31, 2013, through its relationship with Penn Mezzanine, the Company acquired participating interests in mezzanine loans and related equity interests of the borrowers. In certain instances, these interests also included warrants to purchase common stock of the borrowers. The Company’s accounting policies for these participating interests are as follows:

Loan Participations Receivable

The Company’s participating interests in Penn Mezzanine loans are included in Loan participations receivable on the Consolidated Balance Sheets. On a periodic basis, but no less frequently than at the end of each quarter, the Company evaluates the carrying value of each loan participation receivable for impairment. A loan participation receivable is considered impaired when it is probable that the Company will be unable to collect all amounts (principal and interest) due according to the contractual terms of the participation agreement and related agreements with the borrowers. The Company maintains an allowance to provide for estimated loan losses based on evaluating known and inherent risks in the loans. The allowance is provided based upon management’s analysis of the pertinent factors underlying the quality of the loans. These factors include an analysis of the financial condition of the individual borrowers, delinquency levels, actual loan loss experience, current economic conditions and other relevant factors. The Company’s analysis includes methods to estimate the fair value of loan collateral and the existence of potential alternative sources of repayment. The Company does not accrue interest when a loan is considered impaired. All cash receipts from an impaired loan are applied to reduce the original principal amount of such loan until the principal has been fully recovered and would be recognized as interest income thereafter. The allowance for loan losses at December 31, 2013 and 2012 was $2.3 million and $2.0 million, respectively.

Penn Mezzanine charges fees to borrowers for originating loans. The Company’s participating interest in these fees, net of any loan origination costs, is deferred and amortized to income using the effective interest method, over the term of the loan. If the loan is repaid prior to maturity, the remaining unamortized deferred loan origination fee is recognized in income at the time of repayment. Unamortized deferred loan origination fees are recorded as a contra asset against Loan participations receivable on the Consolidated Balance Sheets.

Equity Participations

The Company’s participation in equity interests acquired by Penn Mezzanine is accounted for under the cost method of accounting. On a periodic basis, but no less frequently than at the end of each quarter, the Company evaluates the carrying value of its participation in these equity interests for possible impairment based on achievement of business plan objectives and milestones, the fair value of the equity interest relative to its carrying value, the financial condition and prospects of the underlying company and other relevant factors. The Company’s participating interests in equity interests acquired by Penn Mezzanine are included in Other assets on the Consolidated Balance Sheets.

Warrant Participations

The Company recognizes its participation in warrants acquired by Penn Mezzanine based on the fair value of the warrants at the balance sheet date. The fair values of warrant participations are bifurcated from the related loan participations receivable based on the relative fair value of the respective instruments at the acquisition date. The resulting discount is amortized to interest income over the term of the loan using the effective interest method. Any gain or loss associated with changes in the fair value of the warrants at the balance sheet date is recorded in Other income (loss), net in the Consolidated Statements of Operations. The fair value of the warrants is determined based on Level 3 inputs and is included in Other assets on the Consolidated Balance Sheets.

Property and Equipment

Property and equipment are stated at cost. Provision for depreciation and amortization is based on the lesser of the estimated useful lives of the assets or the remaining lease term (buildings and leasehold improvements, 5 to 15 years; office equipment, 3 to 15 years) and is computed using the straight-line method.

Impairment of Ownership Interests In and Advances to Partner Companies and Funds

On a periodic basis, but no less frequently than quarterly, the Company evaluates the carrying value of its equity and cost method partner companies and available-for-sale securities for possible impairment based on achievement of business plan objectives and milestones, the fair value of each partner company relative to its carrying value, the financial condition and prospects of the partner company and other relevant factors. The business plan objectives and milestones the Company considers include, among others, those related to financial performance, such as achievement of planned financial results or completion of capital raising activities, and those that are not primarily financial in nature, such as hiring of key employees or the establishment of strategic relationships. Management then determines whether there has been an other than temporary decline in the value of its ownership interest in the company or value of available-for-sale securities. Impairment is measured as the amount by which the carrying value of an asset exceeds its fair value.

The fair value of privately held companies is generally determined based on the value at which independent third parties have invested or have committed to invest in these companies or based on other valuation methods, including discounted cash flows, valuation of comparable public companies and the valuation of acquisitions of similar companies. The fair value of the Company’s ownership interests in private equity funds generally is determined based on the fair value of its pro rata portion of the funds’ net assets.

Impairment charges related to equity method partner companies and funds are included in Equity income (loss) in the Consolidated Statements of Operations. Impairment charges related to cost method partner companies and funds and available-for-sale securities are included in Other income (loss), net in the Consolidated Statements of Operations.

The reduced cost basis of a previously impaired partner company is not written-up if circumstances suggest the value of the company has subsequently recovered.

Defined Contribution Plans

Defined contribution plans are contributory and cover eligible employees of the Company. The Company’s defined contribution plan allows eligible employees, as defined in the plan, to contribute to the plan up to 75% of their pre-tax compensation, subject to the maximum contributions allowed by the Internal Revenue Code. The Company makes matching contributions under the plan. Expense relating to defined contribution plans was $0.4 million for the year ended December 31, 2013 and $0.3 million in each of the years ended December 31, 2012 and 2011.

Income Taxes

The Company accounts for income taxes under the asset and liability method whereby deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company measures deferred tax assets and liabilities using enacted tax rates in effect for the year in which the temporary differences are expected to be recovered or settled. The Company recognizes the effect on deferred tax assets and liabilities of a change in tax rates in income in the period of the enactment date. The Company provides valuation allowances against the net deferred tax asset for amounts which are not considered more likely than not to be realized.

Net Income (Loss) Per Share

The Company computes net income (loss) per share using the weighted average number of common shares outstanding during each year. The Company includes in diluted net income (loss) per share common stock equivalents (unless anti-dilutive) which would arise from the exercise of stock options and conversion of other convertible securities and adjusted, if applicable, for the effect on net income (loss) of such transactions. Diluted net income (loss) per share calculations adjust net income (loss) for the dilutive effect of common stock equivalents and convertible securities issued by the Company’s consolidated or equity method partner companies.

Comprehensive Income (Loss)

Comprehensive income (loss) is the change in equity of a business enterprise during a period from non-owner sources. Excluding net income (loss), the Company’s sources of other comprehensive income (loss) are from net unrealized appreciation (depreciation) on available-for-sale securities. Reclassification adjustments result from the recognition in net income (loss) of unrealized gains or losses that were included in comprehensive income (loss) in prior periods.

Segment Information

The Company reports segment data based on the management approach which designates the internal reporting used by management for making operating decisions and assessing performance as the source of the Company’s reportable operating segments.

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Expense

Stock-based compensation expense was recognized in the Consolidated Statements of Operations as follows:

	Year Ended December 31,
	2013		2012		2011
	(In thousands)
General and administrative expense	$	1,821	$	2,014	$	3,052
	$	1,821	$	2,014	$	3,052

Assumptions Used in Valuation of Option Granted

Assumptions used in the valuation of options granted in each period were as follows:

	Year Ended December 31,
	2013		2012		2011
Service-Based Awards
Dividend yield	0	%	0	%	0	%
Expected volatility	52	%	56	%	57	%
Average expected option life	5 years		5 years		5 years
Risk-free interest rate	1.3	%	0.8	%	1.4	%
	Year Ended December 31,
	2013		2012		2011
Performance-Based Awards
Dividend yield	0	%	0	%	0	%
Expected volatility	46	%	55	%	57	%
Average expected option life	4.7 years		5.5 years		5.8 years
Risk-free interest rate	1.8	%	0.8	%	0.9	%

Option Activity

Option activity of the Company is summarized below:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(In thousands)				(In years)	(In thousands)
Outstanding at December 31, 2010	3,321		$	9.83
Options granted	314		16.55
Options exercised	(124	)	11.32
Options canceled/forfeited	(293	)	11.03
Outstanding at December 31, 2011	3,218		10.32
Options granted	293		14.91
Options exercised	(211	)	10.22
Options canceled/forfeited	(13	)	13.48
Outstanding at December 31, 2012	3,287		10.72
Options granted	120		15.61
Options exercised	(612	)	8.44
Options canceled/forfeited	(967	)	9.38
Outstanding at December 31, 2013	1,828		12.51		3.91	$	12,586
Options exercisable at December 31, 2013	822		11.67		2.52	6,334
Options vested and expected to vest at December 31, 2013	1,566		12.23		3.37	11,192
Shares available for future grant	598

Deferred Stock Unit, Performance-Based Stock Unit and Restricted Stock Activity

Deferred stock unit, performance-based stock unit and restricted stock activity are summarized below:

	Shares		Weighted Average Grant Date Fair Value
	(In thousands)
Unvested at December 31, 2011	253		$	13.10
Granted	151		15.00
Vested	(53	)	13.58
Forfeited	(4	)	13.67
Unvested at December 31, 2012	347		13.85
Granted	167		17.45
Vested	(67	)	16.73
Forfeited	(130	)	13.35
Unvested at December 31, 2013	317		15.34

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Significant Accounting Policies Accounting for Participating Interests in Mezzanine Loans Receivable and Related Equity Interests (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Penn Mezzanine [Member]	Aug. 31, 2011 Penn Mezzanine [Member]
Description Of Company And Significant Accounting Policies [Line Items]
Percentage of ownership interest acquired			36.00%	36.00%
Loans and Leases Receivable, Allowance	$ 2.3	$ 2.0

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Convertible Debentures and Credit Arrangements Convertible Senior Debentures due 2018 Narrative (Detail) (USD $)	12 Months Ended						1 Months Ended		12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013 Convertible Senior Debentures due 2018 [Member]	Dec. 31, 2012 Convertible Senior Debentures due 2018 [Member]	Nov. 30, 2012 Convertible Senior Debentures due 2018 [Member]	Nov. 30, 2012 Convertible Senior Debentures due 2014 [Member]	Mar. 31, 2010 Convertible Senior Debentures due 2014 [Member]	Dec. 31, 2013 Minimum [Member] Convertible Senior Debentures due 2018 [Member]
Debt Instrument [Line Items]
Aggregate principal amount of convertible senior debentures						$ 55,000,000.0		$ 46,900,000.0
Interest rate on debentures						5.25%	10.125%
Loss on retirement of debt							7,900,000
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock exceeded the conversion price giving the holders of the debentures an option (in days)				20 days
Number of consecutive trading days during which the closing price of the entity's common stock exceeded the conversion price for at least 20 days giving the holders of the debentures an option (in days)				30 days
Percentage of the closing sales price of the entity's common stock that the conversion price exceeded giving the holders of the debentures an option (as a percent)									130.00%
Number of days after five consecutive trading days in which the trading price per $1,000 principal amount was less than 98% of the product of the closing sale price per share of Company common stock multiplied by the conversion rate on each such trading day (in days)				5 days
Number of consecutive trading days during which the trading price per $1,000 principal amount for at least five days was less than 98% of the product of the closing sale price per share of Company common stock multiplied by the conversion rate on each such trading day (in days)				5 days
Principal amount of convertible debentures				1,000
Closing price is percentage of conversion price				98.00%
Conversion rate of common stock				55.17
Conversion price (in dollars per share)				$ 18.13
Closing price for common stock				$ 20.09
Sales price of common stock to conversion price				140.00%
Debentures redemption price				100.00%
Change in control due to debentures redemption				50.00%
Percentage of principal amount and accrued and unpaid interest for repurchase of debt				100.00%
Outstanding debentures				55,000,000
Fair value of Debentures outstanding	69,900,000			69,900,000
Gross carrying amount of equity component				6,400,000
Principal amount of liability component				55,000,000
Unamortized discount				5,500,000
Carrying value of liability component				49,500,000
Amortization of debt discount	$ 995,000	$ 726,000	$ 623,000	$ 1,000,000	$ 100,000
Debt Instrument, Interest Rate, Effective Percentage				8.70%

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Related Party Transactions Narrative (Detail) (USD $)	1 Months Ended	12 Months Ended			156 Months Ended
	May 31, 2001	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Related Party Transactions [Abstract]
Loan agreement	$ 26,500,000
Impairment charges against loan		15,700,000
Receipt in payments on loan		0	0	100,000	16,900,000
Loan, carrying value		$ 0			$ 0

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Current Assets:
Cash and cash equivalents	$ 139,318	$ 66,029
Cash held in escrow	0	6,434
Marketable securities	38,250	110,957
Restricted marketable securities	5	10
Prepaid expenses and other current assets	1,557	2,408
Total current assets	179,130	185,838
Property and equipment, net	138	193
Ownership interests in and advances to partner companies and funds (of which $20,057 and $20,972 are measured at fair value at December 31, 2013 and 2012, respectively)	148,579	148,639
Loan participations receivable	8,135	7,085
Available-for-sale securities	15	58
Long-term marketable securities	6,088	29,059
Other assets	3,911	3,272
Total Assets	345,996	374,144
Current Liabilities:
Convertible senior debentures—current	470	0
Accounts payable	245	610
Accrued compensation and benefits	5,028	4,050
Accrued expenses and other current liabilities	2,431	2,601
Total current liabilities	8,174	7,261
Other long-term liabilities	3,683	3,921
Convertible senior debentures—non-current	49,478	48,991
Total Liabilities	61,335	60,173
Commitments and contingencies
Equity:
Preferred stock, $0.10 par value; 1,000 shares authorized	0	0
Common stock, $0.10 par value; 83,333 shares authorized; 21,553 and 20,968 shares issued and outstanding at December 31, 2013 and 2012, respectively	2,155	2,097
Additional paid-in capital	822,103	815,946
Accumulated deficit	(539,597)	(504,072)
Total Equity	284,661	313,971
Total Liabilities and Equity	$ 345,996	$ 374,144

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Ownership Interests in and Advances to Partner Companies and Funds Results of Operations for PixelOptics (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended			6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Jun. 30, 2013 PixelOptics, Inc. [Member]	Jun. 30, 2012 PixelOptics, Inc. [Member]
Results of Operations:
Revenue	$ 273,754	$ 191,928	$ 117,057	$ 800	$ 569
Operating loss				(12,219)	(16,172)
Net loss	$ (52,489)	$ (79,662)	$ (38,468)	$ (14,838)	$ (16,923)

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) In Thousands	Total	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]
Beginning Balance at Dec. 31, 2010	$ 246,431	$ (575,307)	$ 12,816	$ 2,063	$ 806,859	$ 0
Beginning Balance (in shares) at Dec. 31, 2010				20,630		0
Net income (loss)	110,597	110,597
Stock options exercised, net	918			10	908
Stock options exercised, net (in shares)				95		5
Issuance of restricted stock, net	139			2	137
Issuance of restricted stock, net (in shares)				27		5
Stock-based compensation expense	3,052				3,052
Other comprehensive income (loss)	(12,857)		(12,857)
Ending Balance at Dec. 31, 2011	348,280	(464,710)	(41)	2,075	810,956	0
Ending Balance (in shares) at Dec. 31, 2011				20,752		0
Net income (loss)	(39,362)	(39,362)
Stock options exercised, net	1,741			19	1,722
Stock options exercised, net (in shares)				181
Issuance of restricted stock, net	94			3	91
Issuance of restricted stock, net (in shares)				35
Stock-based compensation expense	2,014				2,014
Repurchase of equity component of convertible senior debentures	(5,283)				(5,283)
Equity component of convertible senior debentures issued, net of issuance costs	6,446				6,446
Other comprehensive income (loss)	41		41
Ending Balance at Dec. 31, 2012	313,971	(504,072)	0	2,097	815,946	0
Ending Balance (in shares) at Dec. 31, 2012				20,968		0
Net income (loss)	(35,525)	(35,525)
Stock options exercised, net	4,417			55	4,261	101
Stock options exercised, net (in shares)				559		7
Issuance of restricted stock, net	99			3	75	21
Issuance of restricted stock, net (in shares)				26		3
Stock-based compensation expense	1,821				1,821
Repurchase of common stock	(122)					(122)
Repurchase of common stock (in shares)						8
Ending Balance at Dec. 31, 2013	$ 284,661	$ (539,597)	$ 0	$ 2,155	$ 822,103	$ 0
Ending Balance (in shares) at Dec. 31, 2013				21,553		4

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Stock-Based Compensation Equity Compensation Plans Narrative (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reserved shares of common stock for possible future issuance	2,900,000
Employee stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options issued	70,000	85,000
2004 Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for issuance	2,200,000
2001 Associates Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for issuance	900,000
1999 Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for issuance	1,500,000

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Net Income (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Calculations of Net Income (Loss) Per Share

The calculations of net income (loss) per share were:

	Year Ended December 31,
	2013			2012			2011
	(In thousands except per share data)
Basic:
Net income (loss)	$	(35,525	)	$	(39,362	)	$	110,597
Average common shares outstanding	21,362			20,974			20,764
Net income (loss) per share	$	(1.66	)	$	(1.88	)	$	5.33
Diluted:
Net income (loss)	$	(35,525	)	$	(39,362	)	$	110,597
Interest on convertible senior debentures	—			—			5,750
Net income (loss) for diluted per share calculation	$	(35,525	)	$	(39,362	)	$	116,347
Number of shares used in basic per share computation	21,362			20,974			20,764
Effect of dilutive securities:
Convertible senior debentures	—			—			3,009
Unvested restricted stock and DSUs	—			—			60
Employee stock options	—			—			689
Number of shares used in diluted per share computation	21,362			20,974			24,522
Net income (loss) per share	$	(1.66	)	$	(1.88	)	$	4.74

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Other Income (Loss), Net (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Component of Operating Other Cost and Expense [Line Items]
Gain on sale of companies and funds, net									$ 0	$ 9,004	$ 0
Other than temporary impairment on available-for-sale securities	(43)				(260)				(43)	(260)	(7,451)
Other									740	29	1,306
Other income (loss), net	6,574	(4,224)	(2,724)	757	1,344	91	4,819	3,084	383	9,338	(6,145)
Nupathe [Member]
Component of Operating Other Cost and Expense [Line Items]
Gain (loss) on mark-to-market of holdings in fair value method partner companies/Penn Mezzanine warrants									(915)	11,035	0
Cost-method Investments [Member]
Component of Operating Other Cost and Expense [Line Items]
Impairment charges									(250)	(350)	0
Penn Mezzanine [Member]
Component of Operating Other Cost and Expense [Line Items]
Gain (loss) on mark-to-market of holdings in fair value method partner companies/Penn Mezzanine warrants									1,146	264	0
Impairment charges									(295)	(2,489)	0
Debt Repurchase [Member]
Component of Operating Other Cost and Expense [Line Items]
Loss on repurchase of convertible debentures									$ 0	$ (7,895)	$ 0

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2013

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

During the years ended December 31, 2013 and 2012, the Company converted $1.8 million and $0.4 million, respectively, of advances to partner companies into ownership interests in partner companies. Cash payments for interest in the years ended December 31, 2013, 2012 and 2011 were $2.9 million, $0.8 million and $0.4 million, respectively. In addition, during each of the years ended December 31, 2012 and 2011, interest payments of $4.8 million on the 2014 Debentures were made using restricted cash equivalents. Cash paid for taxes in the years ended December 31, 2013, 2012 and 2011 was $0.0 million in each year.

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Operating Segments (Tables)

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Active Partner Companies by Segment

The Company’s active partner companies as of December 31, 2013 by segment were as follows for the years ended December 31, 2013, 2012 and 2011:

Healthcare

	Safeguard Primary Ownership as of December 31,
Partner Company	2013	2012	2011	Accounting Method
AdvantEdge Healthcare Solutions, Inc.	40.1%	40.2%	40.2%	Equity
Alverix, Inc.	48.5%	49.2%	49.6%	Equity
Crescendo Bioscience, Inc.	12.6%	12.6%	NA	Cost
Dabo Health, Inc.	8.0%	NA	NA	Cost
Good Start Genetics, Inc.	30.0%	30.0%	26.3%	Equity
Medivo, Inc.	34.5%	30.0%	30.0%	Equity
NovaSom, Inc.	30.3%	30.3%	30.3%	Equity
NuPathe Inc.	16.5%	17.8%	17.8%	Fair value (1)
Putney, Inc.	27.6%	27.6%	27.6%	Equity
Quantia, Inc.	35.1%	NA	NA	Equity
Sotera Wireless, Inc.	7.3%	NA	NA	Cost

(1) The Company’s ownership interest in NuPathe was accounted for as available-for-sale securities following NuPathe’ s completion of an initial public offering in August 2010. In October 2012, the Company participated in a private placement of NuPathe preferred stock units, and in conjunction with this financing the Company placed two persons on NuPathe’s board of directors. As a result, the Company determined that it exercised significant influence over NuPathe which made the equity method of accounting applicable to its ownership interests. Instead, the Company elected the fair value option beginning in October 2012.

Technology

	Safeguard Primary Ownership as of December 31,
Partner Company	2013	2012	2011	Accounting Method
AppFirst, Inc.	34.3%	35.0%	NA	Equity
Apprenda, Inc.	22.0%	NA	NA	Equity
Beyond.com, Inc.	38.2%	38.3%	38.3%	Equity
Bridgevine, Inc.	22.7%	21.7%	22.8%	Equity
Clutch Holdings, Inc.	24.0%	NA	NA	Equity
DriveFactor, Inc.	40.6%	35.4%	23.9%	Equity
Hoopla Software, Inc.	25.3%	25.3%	28.0%	Equity
Lumesis, Inc.	44.2%	31.6%	NA	Equity
MediaMath, Inc.	22.5%	22.2%	22.4%	Equity
Pneuron Corporation	27.6%	NA	NA	Equity
Spongecell, Inc.	23.0%	23.1%	NA	Equity

Segment Data from Operations

The following represents segment data from operations:

							For the Year Ended December 31, 2013
	Healthcare			Technology				Penn Mezzanine			Total Segments			Other Items			Total
	(In thousands)
Operating loss	$	—		$	—			$	(15	)	$	(15	)	$	(21,629	)	$	(21,644	)
Interest income	—			—				1,506			1,506			1,140			2,646
Equity income (loss)	(31,706		)	20,899				(2,096		)	(12,903		)	296			(12,607		)
Net income (loss)	(32,563		)	20,899				888			(10,776		)	(24,749		)	(35,525		)
Segment Assets:
December 31, 2013	74,939			69,471				12,783			157,193			188,803			345,996
							For the Year Ended December 31, 2012
	Healthcare			Technology				Penn Mezzanine			Total Segments			Other Items			Total
	(In thousands)
Operating loss	$	—		$	—			$	(10	)	$	(10	)	$	(19,463	)	$	(19,473	)
Interest income	—			—				1,505			1,505			1,421			2,926
Equity income (loss)	(26,544		)	(119		)		(317		)	(26,980		)	463			(26,517		)
Net loss	(6,660		)	(119		)		(1,136		)	(7,915		)	(31,447		)	(39,362		)
Segment Assets:
December 31, 2012	83,500			58,753				12,153			154,406			219,738			374,144
							For the Year Ended December 31, 2011
								Penn Mezzanine			Total Segments			Other Items
	Healthcare			Technology													Total
	(In thousands)
Operating loss	$	—		$	—			$	—		$	—		$	(21,168	)	$	(21,168	)
Interest income	—			—				210			210			1,214			1,424
Equity income (loss)	121,299			21,454				(71		)	142,682			(225		)	142,457
Net income (loss)	114,063			21,478				139			135,680			(25,083		)	110,597

Net Loss from Other Items

Net loss from Other Items was as follows:

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Corporate operations	$	(24,749	)	$	(31,447	)	$	(25,083	)
Income tax benefit (expense)	—			—			—
	$	(24,749	)	$	(31,447	)	$	(25,083	)

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Selected Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Information (Unaudited)

Selected Quarterly Financial Information (Unaudited)

	Three Months Ended
	March 31			June 30			September 30			December 31
	(In thousands except per share data)
2013:
General and administrative expense	$	5,374		$	6,715		$	4,835		$	4,720
Operating loss	(5,374		)	(6,715		)	(4,835		)	(4,720		)
Other income (loss), net	757			(2,724		)	(4,224		)	6,574
Interest income	734			790			572			550
Interest expense	(1,069		)	(1,074		)	(1,077		)	(1,083		)
Equity income (loss)	(6,987		)	(18,400		)	(9,866		)	22,646
Net income (loss) before income taxes	(11,939		)	(28,123		)	(19,430		)	23,967
Income tax benefit (expense)	—			—			—			—
Net income (loss)	$	(11,939	)	$	(28,123	)	$	(19,430	)	$	23,967
Net income (loss) per share (a)
Basic	$	(0.57	)	$	(1.33	)	$	(0.90	)	$	1.10
Diluted	$	(0.57	)	$	(1.33	)	$	(0.90	)	$	0.99
2012:
General and administrative expense	$	4,743		$	5,148		$	4,790		$	4,792
Operating loss	(4,743		)	(5,148		)	(4,790		)	(4,792		)
Other income, net	3,084			4,819			91			1,344
Interest income	899			595			696			736
Interest expense	(1,452		)	(1,456		)	(1,461		)	(1,267		)
Equity loss	(7,448		)	(8,947		)	(3,293		)	(6,829		)
Net loss before income taxes	(9,660		)	(10,137		)	(8,757		)	(10,808		)
Income tax benefit (expense)	—			—			—			—
Net loss	$	(9,660	)	$	(10,137	)	$	(8,757	)	$	(10,808	)
Net loss per share (a)
Basic	$	(0.46	)	$	(0.48	)	$	(0.42	)	$	(0.51	)
Diluted	$	(0.46	)	$	(0.48	)	$	(0.42	)	$	(0.51	)

(a) Per share amounts for the quarters have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period. Additionally, in regard to diluted per share amounts only, quarterly amounts may not add to the annual amounts because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive, and because of the adjustments to net income (loss) for the dilutive effect of partner company common stock equivalents and convertible securities.

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Income Taxes Deferred Tax Assets and Deferred Tax Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Deferred tax asset:
Carrying values of partner companies and other holdings	$ 59,045	$ 52,602
Tax loss and credit carryforwards	82,403	75,369
Accrued expenses	2,043	1,860
Stock-based compensation	5,005	7,942
Other	1,560	1,557
Deferred tax assets, gross	150,056	139,330
Valuation allowance	(150,056)	(139,330)
Net deferred tax liability	$ 0	$ 0

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash Flows from Operating Activities:
Net income (loss)	$ (35,525)	$ (39,362)	$ 110,597
Adjustments to reconcile to net cash used in operating activities:
Depreciation	92	108	124
Amortization of debt discount	995	726	623
Equity (income) loss	12,607	26,517	(142,457)
Other (income) loss, net	(383)	(9,338)	6,145
Stock-based compensation expense	1,821	2,014	3,052
Changes in assets and liabilities, net of effect of acquisitions and dispositions:
Accounts receivable, net	(1,194)	(418)	(429)
Accounts payable, accrued expenses, and other	366	3,228	4,618
Net cash used in operating activities	(21,221)	(16,525)	(17,727)
Cash Flows from Investing Activities:
Acquisitions of ownership interests in companies and funds	(41,838)	(46,100)	(85,329)
Proceeds from sales of and distributions from companies and funds	38,974	17,596	171,268
Advances and loans to companies	(10,464)	(13,665)	(12,127)
Repayment of advances to companies	1,651	3,214	5,000
Origination fees on mezzanine loans	42	74	537
Increase in marketable securities	(69,883)	(242,023)	(240,367)
Decrease in marketable securities	165,379	276,392	108,393
Release of restricted cash equivalents for interest on convertible senior debentures	0	7,701	0
Capital expenditures	(37)	(73)	(58)
Proceeds from sale of discontinued operations, net	6,434	0	1
Other, net	0	0	107
Net cash provided by (used in) investing activities	90,258	3,116	(52,575)
Cash Flows from Financing Activities:
Proceeds from issuance of convertible senior debentures	0	55,000	0
Repurchase of convertible senior debentures	(43)	(58,703)	(30,848)
Costs of issuance of convertible senior debentures	0	(1,790)	0
Issuance of Company common stock, net	4,417	1,744	918
Repurchase of Company common stock	(122)	0	0
Net cash provided by (used in) financing activities	4,252	(3,749)	(29,930)
Net Increase (Decrease) in Cash and Cash Equivalents	73,289	(17,158)	(100,232)
Cash and Cash Equivalents at beginning of period	66,029	83,187	183,419
Cash and Cash Equivalents at end of period	$ 139,318	$ 66,029	$ 83,187

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Ownership interests in and advances, to partner companies and funds, fair value	$ 20,057	$ 20,972
Preferred stock, par value	$ 0.10	$ 0.10
Preferred stock, shares authorized	1,000,000	1,000,000
Common stock, par value	$ 0.1	$ 0.1
Common stock, shares authorized	83,333,000	83,333,000
Common stock, shares issued	21,553,000	20,968,000
Common stock, shares outstanding	21,553,000	20,968,000

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Other Income (Loss), Net

12 Months Ended

Dec. 31, 2013

Other Income and Expenses [Abstract]

Other Income (Loss), Net

Other Income (Loss), Net

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Loss on repurchase of convertible debentures	$	—		$	(7,895	)	$	—
Gain on sale of companies and funds, net	—			9,004			—
Gain (loss) on mark-to-market of holdings in fair value method partner companies	(915		)	11,035			—
Impairment charges on cost method partner companies and private equity funds	(250		)	(350		)	—
Gain on mark-to-market of Penn Mezzanine warrants	1,146			264			—
Impairment charges on Penn Mezzanine loan and equity participations	(295		)	(2,489		)	—
Other than temporary impairment on available-for-sale securities	(43		)	(260		)	(7,451		)
Other	740			29			1,306
	$	383		$	9,338		$	(6,145	)

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 06, 2014	Jun. 30, 2013
Document Documentand Entity Information [Abstract]
Entity Registrant Name	SAFEGUARD SCIENTIFICS INC
Entity Central Index Key	0000086115
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		21,556,610
Trading Symbol	SFE
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 334,376,985

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Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The federal and state provision (benefit) for income taxes was $0.0 million for the years ended December 31, 2013, 2012 and 2011.

The total income tax provision (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 35% to net income (loss) before income taxes as a result of the following:

	Year Ended December 31,
	2013		2012		2011
Statutory tax (benefit) expense	(35.0	)%	(35.0	)%	35.0	%
Increase (decrease) in taxes resulting from:
Valuation allowance	34.7		34.7		(35.3	)
Other adjustments	0.3		0.3		0.3
	0.0	%	0.0	%	0.0	%

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets were as follows:

	As of December 31,
	2013			2012
	(In thousands)
Deferred tax asset:
Carrying values of partner companies and other holdings	$	59,045		$	52,602
Tax loss and credit carryforwards	82,403			75,369
Accrued expenses	2,043			1,860
Stock-based compensation	5,005			7,942
Other	1,560			1,557
	150,056			139,330
Valuation allowance	(150,056		)	(139,330		)
Net deferred tax liability	$	—		$	—

As of December 31, 2013, the Company and its subsidiaries consolidated for tax purposes had federal net operating loss carryforwards of approximately $224.3 million. These carryforwards expire as follows:

	Total
	(In thousands)
2014	$	—
2015	—
2016	—
2017	—
2018 and thereafter	224,307
	$	224,307

In assessing the recoverability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has determined that it is more likely than not that certain future tax benefits may not be realized as a result of current and future income. Accordingly, a valuation allowance has been recorded against substantially all of the Company’s deferred tax assets.

The Company recognizes in its Consolidated Financial Statements the impact of a tax position if that position is more likely than not to be sustained upon examination, based on the technical merits of the position. All uncertain tax positions relate to unrecognized tax benefits that would impact the effective tax rate when recognized.

The Company does not expect any material increase or decrease in its income tax expense, in the next twelve months, related to examinations or changes in uncertain tax positions.

There were no changes in the Company’s uncertain tax positions for the years ended December 31, 2013, 2012 and 2011.

The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. Tax years 2010 and forward remain open for examination for federal tax purposes and tax years 2008 and forward remain open for examination for the Company’s more significant state tax jurisdictions. To the extent utilized in future years’ tax returns, net operating loss carryforwards at December 31, 2013 will remain subject to examination until the respective tax year is closed. The Company recognizes penalties and interest accrued related to income tax liabilities in income tax benefit (expense) in the Consolidated Statements of Operations.

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Selected Quarterly Financial Information (Unaudited) (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2013		Sep. 30, 2013		Jun. 30, 2013		Mar. 31, 2013		Dec. 31, 2012		Sep. 30, 2012		Jun. 30, 2012		Mar. 31, 2012		Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Quarterly Financial Information Disclosure [Abstract]
General and administrative expense	$ 4,720		$ 4,835		$ 6,715		$ 5,374		$ 4,792		$ 4,790		$ 5,148		$ 4,743		$ 21,644	$ 19,473	$ 21,168
Operating loss	(4,720)		(4,835)		(6,715)		(5,374)		(4,792)		(4,790)		(5,148)		(4,743)		(21,644)	(19,473)	(21,168)
Other income (loss), net	6,574		(4,224)		(2,724)		757		1,344		91		4,819		3,084		383	9,338	(6,145)
Interest income	550		572		790		734		736		696		595		899		2,646	2,926	1,424
Interest expense	(1,083)		(1,077)		(1,074)		(1,069)		(1,267)		(1,461)		(1,456)		(1,452)		(4,303)	(5,636)	(5,971)
Equity income (loss)	22,646		(9,866)		(18,400)		(6,987)		(6,829)		(3,293)		(8,947)		(7,448)		(12,607)	(26,517)	142,457
Net income (loss) before income taxes	23,967		(19,430)		(28,123)		(11,939)		(10,808)		(8,757)		(10,137)		(9,660)		(35,525)	(39,362)	110,597
Income tax benefit (expense)	0		0		0		0		0		0		0		0		0	0	0
Net income (loss)	$ 23,967		$ (19,430)		$ (28,123)		$ (11,939)		$ (10,808)		$ (8,757)		$ (10,137)		$ (9,660)		$ (35,525)	$ (39,362)	$ 110,597
Net loss per share
Basic (in dollars per share)	$ 1.10	[1]	$ (0.90)	[1]	$ (1.33)	[1]	$ (0.57)	[1]	$ (0.51)	[1]	$ (0.42)	[1]	$ (0.48)	[1]	$ (0.46)	[1]	$ (1.66)	$ (1.88)	$ 5.33
Diluted (in dollars per share)	$ 0.99	[1]	$ (0.90)	[1]	$ (1.33)	[1]	$ (0.57)	[1]	$ (0.51)	[1]	$ (0.42)	[1]	$ (0.48)	[1]	$ (0.46)	[1]	$ (1.66)	$ (1.88)	$ 4.74

[1] Per share amounts for the quarters have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period. Additionally, in regard to diluted per share amounts only, quarterly amounts may not add to the annual amounts because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive, and because of the adjustments to net income (loss) for the dilutive effect of partner company common stock equivalents and convertible securities.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2013		Sep. 30, 2013		Jun. 30, 2013		Mar. 31, 2013		Dec. 31, 2012		Sep. 30, 2012		Jun. 30, 2012		Mar. 31, 2012		Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Statement [Abstract]
General and administrative expense	$ 4,720		$ 4,835		$ 6,715		$ 5,374		$ 4,792		$ 4,790		$ 5,148		$ 4,743		$ 21,644	$ 19,473	$ 21,168
Operating loss	(4,720)		(4,835)		(6,715)		(5,374)		(4,792)		(4,790)		(5,148)		(4,743)		(21,644)	(19,473)	(21,168)
Other income (loss), net	6,574		(4,224)		(2,724)		757		1,344		91		4,819		3,084		383	9,338	(6,145)
Interest income	550		572		790		734		736		696		595		899		2,646	2,926	1,424
Interest expense	(1,083)		(1,077)		(1,074)		(1,069)		(1,267)		(1,461)		(1,456)		(1,452)		(4,303)	(5,636)	(5,971)
Equity income (loss)	22,646		(9,866)		(18,400)		(6,987)		(6,829)		(3,293)		(8,947)		(7,448)		(12,607)	(26,517)	142,457
Net income (loss) before income taxes	23,967		(19,430)		(28,123)		(11,939)		(10,808)		(8,757)		(10,137)		(9,660)		(35,525)	(39,362)	110,597
Income tax benefit (expense)	0		0		0		0		0		0		0		0		0	0	0
Net income (loss)	$ 23,967		$ (19,430)		$ (28,123)		$ (11,939)		$ (10,808)		$ (8,757)		$ (10,137)		$ (9,660)		$ (35,525)	$ (39,362)	$ 110,597
Net income (loss) per share:
Basic (in dollars per share)	$ 1.10	[1]	$ (0.90)	[1]	$ (1.33)	[1]	$ (0.57)	[1]	$ (0.51)	[1]	$ (0.42)	[1]	$ (0.48)	[1]	$ (0.46)	[1]	$ (1.66)	$ (1.88)	$ 5.33
Diluted (in dollars per share)	$ 0.99	[1]	$ (0.90)	[1]	$ (1.33)	[1]	$ (0.57)	[1]	$ (0.51)	[1]	$ (0.42)	[1]	$ (0.48)	[1]	$ (0.46)	[1]	$ (1.66)	$ (1.88)	$ 4.74
Average shares used in computing net income (loss) per share:
Basic (in shares)																	21,362	20,974	20,764
Diluted (in shares)																	21,362	20,974	24,522

[1] Per share amounts for the quarters have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period. Additionally, in regard to diluted per share amounts only, quarterly amounts may not add to the annual amounts because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive, and because of the adjustments to net income (loss) for the dilutive effect of partner company common stock equivalents and convertible securities.

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Property and Equipment

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment consisted of the following:

	As of December 31,
	2013			2012
	(In thousands)
Building and improvements	$	607		$	607
Office equipment	1,039			1,002
	1,646			1,609
Accumulated depreciation	(1,508		)	(1,416		)
	$	138		$	193

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Fair Value Measurements

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial assets recorded at fair value on the Company’s Consolidated Balance Sheets are categorized as follows:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Include other inputs that are directly or indirectly observable in the marketplace.

Level 3—Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The following table provides the carrying value and fair value of certain financial assets and liabilities of the Company measured at fair value on a recurring basis as of December 31, 2013 and 2012: 

	Carrying Value		Fair Value Measurement at December 31, 2013
			Level 1		Level 2		Level 3
	(in thousands)
Cash and cash equivalents	$	139,318	$	139,318	$	—	$	—
Restricted marketable securities	5		5		—		—
Ownership interest in common stock of NuPathe	16,874		16,874		—		—
Ownership interest in warrants and options of NuPathe	3,183		—		—		3,183
Available-for-sale securities	15		15		—		—
Warrant participations	1,563		—		—		1,563
Marketable securities—held-to-maturity:
Commercial paper	$	13,599	$	13,599	$	—	$	—
U.S. Treasury Bills	8,014		8,014		—		—
Government agency bonds	9,945		9,945		—		—
Certificates of deposit	12,780		12,780		—		—
Total marketable securities	$	44,338	$	44,338	$	—	$	—

	Carrying Value		Fair Value Measurement at December 31, 2012
			Level 1		Level 2		Level 3
	(In thousands)
Cash and cash equivalents	$	66,029	$	66,029	$	—	$	—
Cash held in escrow	6,434		6,434		—		—
Restricted marketable securities	10		10		—		—
Ownership interest in common stock of NuPathe	8,897		8,897		—		—
Ownership interest in preferred stock, warrants and options of NuPathe	12,075		—		—		12,075
Available-for-sale securities	58		58		—		—
Warrant participations	423		—		—		423
Marketable securities—held-to-maturity:
Commercial paper	$	50,932	$	50,932	$	—	$	—
U.S. Treasury Bills	21,352		21,352		—		—
Government agency bonds	45,909		45,909		—		—
Certificates of deposit	21,823		21,823		—		—
Total marketable securities	$	140,016	$	140,016	$	—	$	—

As of December 31, 2013, $38.3 million of marketable securities had contractual maturities which were less than one year and $6.1 million of marketable securities had contractual maturities greater than one year. Held-to-maturity securities are carried at amortized cost, which, due to the short-term maturity of these instruments, approximates fair value using quoted prices in active markets for identical assets or liabilities defined as Level 1 inputs under the fair value hierarchy.

The Company recognized impairment charges of $11.2 million and $5.0 million related to PixelOptics for the years ended December 31, 2013 and 2012, respectively. The fair market value of the Company’s equity ownership in PixelOptics was determined to be $0 at December 31, 2013 based on Level 3 inputs as defined above.  The inputs and valuation techniques used were primarily an evaluation of discounted cash flows for PixelOptics.

The Company’s Penn Mezzanine warrant participations are carried at fair value. The value of the Company’s holdings in warrant participations is measured by reference to Level 3 inputs. The inputs and valuation techniques used include discounted cash flows and valuation of comparable public companies. The Company recognized gains of $1.1 million and $0.2 million associated with mark-to-market adjustments related to its warrant participations with Penn Mezzanine in the years ended December 31, 2013 and 2012, respectively, which are reflected in Other income (loss), net in the Consolidated Statements of Operations.

The Company recognized an impairment charge of $1.8 million related to its ownership interest in the management company of Penn Mezzanine for the year ended December 31, 2013. The fair market value of the Company’s ownership interest in Penn Mezzanine was determined to be $1.3 million based on Level 3 inputs as described above. The inputs and valuation techniques used were primarily an evaluation of the future cash flows associated with the Company's interest in the management company of Penn Mezzanine.

The Company recognized impairment charges of $0.3 million and $2.5 million related to its Penn Mezzanine debt and equity participations in the years ended December 31, 2013 and 2012, respectively, measured as the amount by which the carrying value of the Company’s participation in the debt and equity interests acquired by Penn Mezzanine exceeded their estimated fair values. The fair market values of the Company's participating interests in debt and equity acquired by Penn Mezzanine were determined based on Level 3 inputs as defined above. The inputs and valuation techniques used included discounted cash flows and valuations of comparable public companies.

The Company’s ownership interests in NuPathe are accounted for at fair value. In February 2013, the Company converted its 2,500 shares of preferred stock units, acquired in October 2012, into 2.5 million shares of common stock in NuPathe. The preferred stock units had been valued using Level 3 inputs. The fair value of the Company’s ownership interest in NuPathe’s common stock was measured using quoted market prices for NuPathe’s common stock as traded on the NASDAQ Capital Market, which is considered a Level 1 input under the valuation hierarchy. The fair value of the Company’s ownership interest in NuPathe’s warrants and options was measured using a Black-Scholes option pricing model, which is based on Level 3 inputs as defined above.

The Company recognized impairment charges of $0.3 million and $0.4 million related to a legacy private equity fund for the years ended December 31, 2013 and 2012, respectively, measured as the amount by which the carrying value of the Company’s interest in the fund exceeded its estimated fair value. The fair market value of the Company’s interest in the fund was determined to be $1.7 million at December 31, 2013 based on the fair value of the Company’s pro rata portion of the fund’s net assets, which is a Level 3 input under the fair value hierarchy.

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Operating Segments

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Operating Segments

Operating Segments

As of December 31, 2013, the Company held interests in 22 non-consolidated partner companies which are included in the Healthcare and Technology segments. Included in the Penn Mezzanine segment are the Company's interests in the Penn Mezzanine management company and the general partner and the Company's participations in mezzanine loans and equity interests initiated by Penn Mezzanine.

The Company’s active partner companies as of December 31, 2013 by segment were as follows for the years ended December 31, 2013, 2012 and 2011:

Healthcare

	Safeguard Primary Ownership as of December 31,
Partner Company	2013	2012	2011	Accounting Method
AdvantEdge Healthcare Solutions, Inc.	40.1%	40.2%	40.2%	Equity
Alverix, Inc.	48.5%	49.2%	49.6%	Equity
Crescendo Bioscience, Inc.	12.6%	12.6%	NA	Cost
Dabo Health, Inc.	8.0%	NA	NA	Cost
Good Start Genetics, Inc.	30.0%	30.0%	26.3%	Equity
Medivo, Inc.	34.5%	30.0%	30.0%	Equity
NovaSom, Inc.	30.3%	30.3%	30.3%	Equity
NuPathe Inc.	16.5%	17.8%	17.8%	Fair value (1)
Putney, Inc.	27.6%	27.6%	27.6%	Equity
Quantia, Inc.	35.1%	NA	NA	Equity
Sotera Wireless, Inc.	7.3%	NA	NA	Cost

(1) The Company’s ownership interest in NuPathe was accounted for as available-for-sale securities following NuPathe’ s completion of an initial public offering in August 2010. In October 2012, the Company participated in a private placement of NuPathe preferred stock units, and in conjunction with this financing the Company placed two persons on NuPathe’s board of directors. As a result, the Company determined that it exercised significant influence over NuPathe which made the equity method of accounting applicable to its ownership interests. Instead, the Company elected the fair value option beginning in October 2012.

Technology

	Safeguard Primary Ownership as of December 31,
Partner Company	2013	2012	2011	Accounting Method
AppFirst, Inc.	34.3%	35.0%	NA	Equity
Apprenda, Inc.	22.0%	NA	NA	Equity
Beyond.com, Inc.	38.2%	38.3%	38.3%	Equity
Bridgevine, Inc.	22.7%	21.7%	22.8%	Equity
Clutch Holdings, Inc.	24.0%	NA	NA	Equity
DriveFactor, Inc.	40.6%	35.4%	23.9%	Equity
Hoopla Software, Inc.	25.3%	25.3%	28.0%	Equity
Lumesis, Inc.	44.2%	31.6%	NA	Equity
MediaMath, Inc.	22.5%	22.2%	22.4%	Equity
Pneuron Corporation	27.6%	NA	NA	Equity
Spongecell, Inc.	23.0%	23.1%	NA	Equity

As of December 31, 2013, the Penn Mezzanine segment includes a 36% ownership interest in the management company and general partner of Penn Mezzanine L.P. The Company accounts for its interest under the equity method.

Results of the Healthcare and Technology segments reflect the equity income (loss) of their respective equity method partner companies, other income (loss) associated with fair value method and cost method partner companies and the gains or losses on the sale of their respective partner companies. Results of the Penn Mezzanine segment includes interest, dividend and participation fees earned on the mezzanine interests in which the Company participates as well as equity income (loss) associated with the Company’s management company and general partner interest in the Penn Mezzanine platform.

Management evaluates its Healthcare and Technology segments’ performance based on net loss which is based on the number of partner companies accounted for under the equity method, the Company’s voting ownership percentage in these partner companies and the net results of operations of these partner companies and any impairment charges or gain (loss) on the sale of, or mark-to-market, of partner companies.

Management evaluates the Penn Mezzanine segment performance based on the performance of the mezzanine interests in which the Company participates. This includes an evaluation of the current and future cash flows associated with interest and dividend payments as well as estimated losses based on evaluating known and inherent risks in the investments in which the Company participates.

Other Items include certain expenses which are not identifiable to the operations of the Company’s operating business segments. Other Items primarily consist of general and administrative expenses related to corporate operations, including employee compensation, insurance and professional fees, including legal and finance, interest income, interest expense, other income (loss) and equity income (loss) related to certain private equity fund ownership interests. Other Items also include income taxes, which are reviewed by management independent of segment results.

As of December 31, 2013 and 2012, all of the Company’s assets were located in the United States.

Segment assets in Other Items included primarily cash, cash equivalents, cash held in escrow and marketable securities of $183.7 million and $212.5 million at December 31, 2013 and 2012, respectively.

The following represents segment data from operations:

							For the Year Ended December 31, 2013
	Healthcare			Technology				Penn Mezzanine			Total Segments			Other Items			Total
	(In thousands)
Operating loss	$	—		$	—			$	(15	)	$	(15	)	$	(21,629	)	$	(21,644	)
Interest income	—			—				1,506			1,506			1,140			2,646
Equity income (loss)	(31,706		)	20,899				(2,096		)	(12,903		)	296			(12,607		)
Net income (loss)	(32,563		)	20,899				888			(10,776		)	(24,749		)	(35,525		)
Segment Assets:
December 31, 2013	74,939			69,471				12,783			157,193			188,803			345,996
							For the Year Ended December 31, 2012
	Healthcare			Technology				Penn Mezzanine			Total Segments			Other Items			Total
	(In thousands)
Operating loss	$	—		$	—			$	(10	)	$	(10	)	$	(19,463	)	$	(19,473	)
Interest income	—			—				1,505			1,505			1,421			2,926
Equity income (loss)	(26,544		)	(119		)		(317		)	(26,980		)	463			(26,517		)
Net loss	(6,660		)	(119		)		(1,136		)	(7,915		)	(31,447		)	(39,362		)
Segment Assets:
December 31, 2012	83,500			58,753				12,153			154,406			219,738			374,144
							For the Year Ended December 31, 2011
								Penn Mezzanine			Total Segments			Other Items
	Healthcare			Technology													Total
	(In thousands)
Operating loss	$	—		$	—			$	—		$	—		$	(21,168	)	$	(21,168	)
Interest income	—			—				210			210			1,214			1,424
Equity income (loss)	121,299			21,454				(71		)	142,682			(225		)	142,457
Net income (loss)	114,063			21,478				139			135,680			(25,083		)	110,597

Net loss from Other Items was as follows:

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Corporate operations	$	(24,749	)	$	(31,447	)	$	(25,083	)
Income tax benefit (expense)	—			—			—
	$	(24,749	)	$	(31,447	)	$	(25,083	)

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Net Income (Loss) Per Share

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

Net Income (Loss) Per Share

The calculations of net income (loss) per share were:

	Year Ended December 31,
	2013			2012			2011
	(In thousands except per share data)
Basic:
Net income (loss)	$	(35,525	)	$	(39,362	)	$	110,597
Average common shares outstanding	21,362			20,974			20,764
Net income (loss) per share	$	(1.66	)	$	(1.88	)	$	5.33
Diluted:
Net income (loss)	$	(35,525	)	$	(39,362	)	$	110,597
Interest on convertible senior debentures	—			—			5,750
Net income (loss) for diluted per share calculation	$	(35,525	)	$	(39,362	)	$	116,347
Number of shares used in basic per share computation	21,362			20,974			20,764
Effect of dilutive securities:
Convertible senior debentures	—			—			3,009
Unvested restricted stock and DSUs	—			—			60
Employee stock options	—			—			689
Number of shares used in diluted per share computation	21,362			20,974			24,522
Net income (loss) per share	$	(1.66	)	$	(1.88	)	$	4.74

Basic and diluted average common shares outstanding for purposes of computing net income (loss) per share includes outstanding common shares and vested deferred stock units (DSUs).

If a consolidated or equity method partner company has dilutive stock options, unvested restricted stock, DSUs, or warrants, diluted net income (loss) per share is computed by first deducting from net income (loss) the income attributable to the potential exercise of the dilutive securities of the partner company from net loss. Any impact is shown as an adjustment to net income (loss) for purposes of calculating diluted net income (loss) per share.

The following potential shares of common stock and their effects on income were excluded from the diluted net loss per share calculation because their effect would be anti-dilutive:

• At December 31, 2013, 2012 and 2011, options to purchase 1.8 million, 3.3 million and 0.1 million shares of common stock, respectively, at prices ranging from $3.93 to $18.80 per share, $3.93 to $18.80 per share and $18.78 to $21.36 per share were excluded from the calculation.

• At December 31, 2013 and 2012, unvested restricted stock units, performance stock units and DSUs convertible into 0.3 million shares of stock were excluded from the calculations.

• For the years ended December 31, 2013 and 2012, 3.0 million shares of common stock representing the effect of assumed conversion of the 2018 Debentures were excluded from the calculations.

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Equity

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

Equity

Equity

Preferred Stock

Shares of preferred stock, par value $0.10 per share, are voting and are issuable in one or more series with rights and preferences as to dividends, redemption, liquidation, sinking funds and conversion determined by the Board of Directors. At December 31, 2013 and 2012, there were one million shares authorized and none outstanding.

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Stock-Based Compensation Classification of Stock-Based Compensation Expense Narrative (Detail) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 vesting_type	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of award vesting types	3
Weighted-average grant date fair value of options issued	$ 6.83	$ 7.45	$ 8.28
Total intrinsic value of options exercised	$ 3.9	$ 1.2	$ 0.9
Market-based awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period	8 years
Options vested	0	0	110,000
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures and Expirations	554,000	6,000	125,000
Stock-based compensation expense	0.2	0.4	1.2
Stock-based compensation, maximum number of unvested shares	402,000
Performance-based awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures and Expirations	398,000	6,000	108,000
Stock-based compensation expense	0	0.2	0.3
Options issued	41,000	180,000	193,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	0	14,000	56,000
Performance based maximum number of unvested shares	452,000
Total unrecognized compensation cost related to non-vested stock options granted	2.3
Total unrecognized compensation cost, weighted-average period for recognition	1 year 10 months 24 days
Service-based awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options canceled or forfeited	14,000	1,000	60,000
Stock-based compensation expense	0.5	0.7	0.8
Options issued	43,000	113,000	121,000
Vesting period	4 years
Expiration term	8 years
Service Based Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost related to non-vested stock options granted	0.7
Total unrecognized compensation cost, weighted-average period for recognition	2 years 8 months 12 days
Performance-based stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options issued	83,000	90,000	61,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options issued	28,000	30,000	20,000
Vesting period	3 years
Percentage of shares vesting on the first anniversary of grant	25.00%
Percentage of shares vesting after the first anniversary of grant	75.00%
Restricted Stock [Member] | Non-employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		0.1
Granted to restricted shares to members of its advisory boards	8,000	5,000	0
Deferred stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred stock units issued to directors	48,000	25,000	28,000
Percentage of shares vested in lieu of directors fees at the grant date	100.00%
Portion of Director fees matched to deferred stock units	25.00%
Vesting period of deferred stock	1 year
Deferred stock units, performance-based stock units and restricted stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	1.1	0.7	0.7
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	67,000	53,000
Granted to restricted shares to members of its advisory boards	167,000	151,000
Share based compensation arrangement by share based payment award equity instruments other than options issued in period	3.3
Total fair value of stock-based compensation vested	$ 1.1	$ 0.9	$ 2.0

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Convertible Debentures and Credit Arrangements

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Convertible Debentures and Credit Arrangements

Convertible Debentures and Credit Arrangements

The carrying values of the Company’s convertible senior debentures were as follows:

	As of December 31,
	2013			2012
	(In thousands)
Convertible senior debentures due 2018	$	49,478		$	48,483
Convertible senior debentures due 2024	441			441
Convertible senior debentures due 2014	29			67
	49,948			48,991
Less: current portion	(470		)	—
Convertible senior debentures — non-current	$	49,478		$	48,991

Convertible Senior Debentures due 2018

In November 2012, Safeguard issued $55.0 million principal amount of its 5.25% convertible senior debentures due 2018 (the “2018 Debentures”). Proceeds from the offering were used to repurchase substantially all of the Company's then outstanding 10.125% convertible senior debentures due 2014 (the “2014 Debentures”). The repurchase of the 2014 Debentures resulted in a loss on repurchase of $7.9 million which is reflected in Other income (loss), net in the Consolidated Statement of Operations for the year ended December 31, 2012. Interest on the 2018 Debentures is payable semi-annually on May 15 and November 15.

Holders of the 2018 Debentures may convert their notes prior to November 15, 2017 at their option only under the following circumstances:

• during any calendar quarter commencing after the calendar quarter ending on December 31, 2012, if the last reported sale price of the common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

• during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on such trading day;

• if the notes have been called for redemption; or

• upon the occurrence of specified corporate events.

On or after November 15, 2017 until the close of business on the second business day immediately preceding the maturity date, holders may convert their notes at any time, regardless of whether any of the foregoing conditions have been met. Upon conversion, the Company will satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company’s election.

The conversion rate of the 2018 Debentures is 55.17 shares of common stock per $1,000 principal amount of debentures, equivalent to a conversion price of approximately $18.13 per share of common stock. The closing price of the Company’s common stock at December 31, 2013 was $20.09.

On or after November 15, 2016, the Company may redeem for cash any of the 2018 Debentures if the last reported sale price of the Company’s common stock exceeds 140% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on the trading day before the date that notice of redemption is given, including the last trading day of such period. Upon any redemption of the 2018 Debentures, the Company will pay a redemption price of 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption, and additional interest, if any.

The 2018 Debentures holders have the right to require the Company to repurchase the 2018 Debentures if the Company undergoes a fundamental change, which includes the sale of all or substantially all of the Company’s common stock or assets; liquidation; dissolution; a greater than 50% change in control; the delisting of the Company’s common stock from the New York Stock Exchange or the NASDAQ Global Market (or any of their respective successors); or a substantial change in the composition of the Company’s board of directors as defined in the governing agreement. Holders may require that the Company repurchase for cash all or part of their debentures at a fundamental change repurchase price equal to 100% of the principal amount of the debentures to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

Because the 2018 Debentures may be settled in cash or partially in cash upon conversion, the Company separately accounts for the liability and equity components of the 2018 Debentures. The carrying amount of the liability component was determined at the transaction date by measuring the fair value of a similar liability that does not have an associated equity component. The carrying amount of the equity component represented by the embedded conversion option was determined by deducting the fair value of the liability component from the initial proceeds of the 2018 Debentures as a whole. At December 31, 2013, the fair value of the $55.0 million outstanding 2018 Debentures was approximately $69.9 million, based on the midpoint of the bid and ask prices as of such date. At December 31, 2013, the carrying amount of the equity component was $6.4 million, the principal amount of the liability component was $55.0 million, the unamortized discount was $5.5 million and the net carrying value of the liability component was $49.5 million. The Company is amortizing the excess of the face value of the 2018 Debentures over their carrying value over their term as additional interest expense using the effective interest method and recorded $1.0 million and $0.1 million of such expense for the years ended December 31, 2013 and 2012, respectively. The effective interest rate on the 2018 Debentures is 8.7%.

Convertible Senior Debentures due 2024

In 2004, the Company issued an aggregate of $150.0 million in face value of convertible senior debentures with a stated maturity date of March 15, 2024 (the “2024 Debentures”). At December 31, 2013, the fair value of the $0.4 million outstanding 2024 Debentures approximated their carrying value, based on the midpoint of bid and ask prices as of such date. Interest on the 2024 Debentures is payable semi-annually. At the debentures holders’ option, the 2024 Debentures are convertible into the Company’s common stock through March 14, 2024, subject to certain conditions. The adjusted conversion rate of the 2024 Debentures is $43.3044 of principal amount per share. The remaining 2024 Debentures holders have the right to require the Company to repurchase the 2024 Debentures on March 20, 2014 or March 20, 2019 at a repurchase price equal to 100% of their face amount, plus accrued and unpaid interest. In limited circumstances, the Company has the right to redeem all or some of the 2024 Debentures.

Convertible Senior Debentures due 2014

In March 2010, the Company issued an aggregate of $46.9 million of the 2014 Debentures. As noted above, in November 2012, the Company repurchased substantially all of the 2014 Debentures for $58.7 million plus accrued interest. The remaining $29 thousand outstanding principal amount of the 2014 Debentures is due and payable on March 15, 2014.

Credit Arrangements

The Company is party to a loan agreement with a commercial bank which provides it with a revolving credit facility in the maximum aggregate amount of $50 million in the form of borrowings, guarantees and issuances of letters of credit (subject to a $20 million sublimit). Actual availability under the credit facility is based on the amount of cash maintained at the bank as well as the value of the Company’s public and private partner company interests. This credit facility bears interest at the prime rate for outstanding borrowings, subject to an increase in certain circumstances. Other than for limited exceptions, the Company is required to maintain all of its depository and operating accounts and the lesser of $80 million or 75% of its investment and securities accounts at the bank. The credit facility, as amended, matures on December 31, 2014. Under the credit facility, the Company provided a $6.3 million letter of credit expiring on March 19, 2019 to the landlord of CompuCom Systems, Inc.’s Dallas headquarters which has been required in connection with the sale of CompuCom Systems in 2004. Availability under the Company’s revolving credit facility at December 31, 2013 was $43.7 million.

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Accrued Expenses and Other Current Liabilities

12 Months Ended

Dec. 31, 2013

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	As of December 31,
	2013		2012
	(In thousands)
Accrued interest	$	366	$	335
Other	2,065		2,266
	$	2,431	$	2,601

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Equity Compensation Plans

Under the amended and restated 2004 Equity Compensation Plan, employees, executive officers, directors and consultants are eligible for grants of stock options, restricted stock awards, stock appreciation rights, stock units, performance units and other stock-based awards. The 2004 Equity Compensation Plan has 2.2 million shares authorized for issuance. The 2001 Associates Equity Compensation Plan, with 0.9 million shares authorized for issuance, and the 1999 Equity Compensation Plan, with 1.5 million shares authorized for issuance, expired by their terms and no further grants may be made under those plans. During 2013 and 2011, the Company issued 70 thousand and 85 thousand options, respectively, outside of existing plans as inducement awards in accordance with New York Stock Exchange rules.

To the extent allowable, service-based options are incentive stock options. Options granted under the plans are at prices equal to or greater than the fair market value at the date of grant. Upon exercise of stock options, the Company issues shares first from treasury stock, if available, then from authorized but unissued shares. At December 31, 2013, the Company had reserved 2.9 million shares of common stock for possible future issuance under its equity compensation plans.

Classification of Stock-Based Compensation Expense

Stock-based compensation expense was recognized in the Consolidated Statements of Operations as follows:

	Year Ended December 31,
	2013		2012		2011
	(In thousands)
General and administrative expense	$	1,821	$	2,014	$	3,052
	$	1,821	$	2,014	$	3,052

At December 31, 2013, the Company had outstanding options that vest based on three different types of vesting schedules:

1) market-based;

2) performance-based; and

3) service-based.

Market-based awards entitle participants to vest in a number of options determined by achievement by the Company of certain target market capitalization increases (measured by reference to stock price increases on a specified number of outstanding shares) over an eight-year period. The requisite service periods for the market-based awards are based on the Company’s estimate of the dates on which the market conditions will be met as determined using a Monte Carlo simulation model. Compensation expense is recognized over the requisite service periods using the straight-line method but is accelerated if market capitalization targets are achieved earlier than estimated. During the years ended December 31, 2013, 2012 and 2011, the Company did not issue any market-based option awards to employees. During the year ended December 31, 2011, 110 thousand market-based options vested based on achievement of market capitalization targets. No market-based options vested during 2013 or 2012. During the years ended December 31, 2013, 2012 and 2011, respectively, 554 thousand, 6 thousand and 125 thousand market-based options were canceled or forfeited. The Company recorded compensation expense related to these option awards of $0.2 million, $0.4 million and $1.2 million during the years ended December 31, 2013, 2012 and 2011, respectively. Depending on the Company’s stock performance, the maximum number of unvested shares at December 31, 2013 attainable under these grants was 402 thousand shares.

Performance-based awards entitle participants to vest in a number of awards determined by achievement by the Company of target capital returns based on net cash proceeds received by the Company upon the sale, merger or other exit transaction of certain identified partner companies. Vesting may occur, if at all, once per year. The requisite service periods for the performance-based awards are based on the Company’s estimate of when the performance conditions will be met. Compensation expense is recognized for performance-based awards for which the performance condition is considered probable of achievement. Compensation expense is recognized over the requisite service periods using the straight-line method but is accelerated if capital return targets are achieved earlier than estimated. During the years ended December 31, 2013, 2012 and 2011, respectively, the Company issued 41 thousand, 180 thousand and 193 thousand performance-based options to employees. During the years ended December 31, 2012 and 2011, 14 thousand and 56 thousand options vested based on the achievement of capital return targets. During the year ended December 31, 2013, no options vested based on the achievement of capital return targets. During the years ended December 31, 2013, 2012 and 2011, respectively, 398 thousand, 6 thousand and 108 thousand performance-based option awards were canceled or forfeited. The Company recorded compensation expense related to these option awards of $0.0 million, $0.2 million and $0.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. The maximum number of unvested shares at December 31, 2013 attainable under these grants was 452 thousand shares.

All other outstanding options are service-based awards that generally vest over four years after the date of grant and expire eight years after the date of grant. Compensation expense is recognized over the requisite service period using the straight-line method. The requisite service period for service-based awards is the period over which the award vests. During the years ended December 31, 2013, 2012 and 2011, respectively, the Company issued 43 thousand, 113 thousand and 121 thousand service-based option awards to employees. During the years ended December 31, 2013, 2012 and 2011, respectively, 14 thousand, one thousand and 60 thousand service-based options were canceled or forfeited. The Company recorded compensation expense related to these awards of $0.5 million, $0.7 million and $0.8 million during the years ended December 31, 2013, 2012 and 2011, respectively.

The fair value of the Company’s stock-based awards to employees was estimated at the date of grant using the Black-Scholes option-pricing model. The risk-free rate is based on the U.S. Treasury yield curve in effect at the end of the quarter in which the grant occurred. The expected term of stock options granted was estimated using the historical exercise behavior of employees. Expected volatility was based on historical volatility measured using weekly price observations of the Company’s common stock for a period equal to the stock option’s expected term. Assumptions used in the valuation of options granted in each period were as follows:

	Year Ended December 31,
	2013		2012		2011
Service-Based Awards
Dividend yield	0	%	0	%	0	%
Expected volatility	52	%	56	%	57	%
Average expected option life	5 years		5 years		5 years
Risk-free interest rate	1.3	%	0.8	%	1.4	%
	Year Ended December 31,
	2013		2012		2011
Performance-Based Awards
Dividend yield	0	%	0	%	0	%
Expected volatility	46	%	55	%	57	%
Average expected option life	4.7 years		5.5 years		5.8 years
Risk-free interest rate	1.8	%	0.8	%	0.9	%

The weighted-average grant date fair value of options issued by the Company during the years ended December 31, 2013, 2012 and 2011 was $6.83, $7.45 and $8.28 per share, respectively.

Option activity of the Company is summarized below:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(In thousands)				(In years)	(In thousands)
Outstanding at December 31, 2010	3,321		$	9.83
Options granted	314		16.55
Options exercised	(124	)	11.32
Options canceled/forfeited	(293	)	11.03
Outstanding at December 31, 2011	3,218		10.32
Options granted	293		14.91
Options exercised	(211	)	10.22
Options canceled/forfeited	(13	)	13.48
Outstanding at December 31, 2012	3,287		10.72
Options granted	120		15.61
Options exercised	(612	)	8.44
Options canceled/forfeited	(967	)	9.38
Outstanding at December 31, 2013	1,828		12.51		3.91	$	12,586
Options exercisable at December 31, 2013	822		11.67		2.52	6,334
Options vested and expected to vest at December 31, 2013	1,566		12.23		3.37	11,192
Shares available for future grant	598

The total intrinsic value of options exercised for the years ended December 31, 2013, 2012 and 2011 was $3.9 million, $1.2 million and $0.9 million, respectively.

At December 31, 2013, total unrecognized compensation cost related to non-vested stock options granted under the plans for service-based awards was $0.7 million. That cost is expected to be recognized over a weighted-average period of 2.7 years.

At December 31, 2013, the Company had recognized substantially all compensation cost related to stock options granted under the plans for market-based awards.

At December 31, 2013, total unrecognized compensation cost related to non-vested stock options granted under the plans for performance-based awards was $2.3 million. That cost is expected to be recognized over a weighted-average period of 1.9 years but would be accelerated if stock price targets are achieved earlier than estimated.

During the years ended December 31, 2013, 2012 and 2011, respectively, the Company issued 83 thousand, 90 thousand and 61 thousand performance-based stock units to employees which vest based on achievement by the Company of target capital returns based on net cash proceeds received by the Company on the sale, merger or other exit transaction of certain identified partner companies, as described above related to performance-based option awards. Performance-based stock units represent the right to receive shares of the Company’s common stock, on a one-for-one basis. During the years ended December 31, 2013, 2012 and 2011, respectively, the Company issued 28 thousand, 30 thousand and 20 thousand restricted shares to employees. The restricted shares issued vest 25% on the first anniversary of grant and the remaining 75% thereafter in equal monthly installments over the next three years.

During the years ended December 31, 2013, 2012, and 2011, respectively, the Company issued 48 thousand, 25 thousand and 28 thousand deferred stock units to non-employee directors for annual service grants or fees earned during the preceding quarter. Deferred stock units issued to directors in lieu of directors fees are 100% vested at the grant date; matching deferred stock units equal to 25% of directors’ fees deferred vest one year following the grant date or, if earlier, upon reaching age 65. Deferred stock units are payable in stock on a one-for-one basis. Payments related to the deferred stock units are generally distributable following termination of employment or service, death or permanent disability.

During the years ended December 31, 2013 and 2012, the Company granted eight thousand and five thousand shares, respectively, to members of its advisory boards, and recorded compensation expense of $0.1 million in each year related to these awards. No such awards were granted in 2011.

Total compensation expense for deferred stock units, performance-based stock units and restricted stock was approximately $1.1 million, $0.7 million and $0.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. Unrecognized compensation expense related to deferred stock units, performance stock units and restricted stock at December 31, 2013 was $3.3 million. The total fair value of deferred stock units, performance stock units and restricted stock vested during the years ended December 31, 2013, 2012 and 2011 was $1.1 million, $0.9 million and $2.0 million, respectively.

Deferred stock unit, performance-based stock unit and restricted stock activity are summarized below:

	Shares		Weighted Average Grant Date Fair Value
	(In thousands)
Unvested at December 31, 2011	253		$	13.10
Granted	151		15.00
Vested	(53	)	13.58
Forfeited	(4	)	13.67
Unvested at December 31, 2012	347		13.85
Granted	167		17.45
Vested	(67	)	16.73
Forfeited	(130	)	13.35
Unvested at December 31, 2013	317		15.34

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Stock-Based Compensation Deferred Stock Unit, Performance-Based Stock Unit and Restricted Stock Activity (Detail) (Deferred stock units, performance-based stock units and restricted stock [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Deferred stock units, performance-based stock units and restricted stock [Member]
Unvested, shares
Unvested, Beginning Balance	347	253
Granted	167	151
Vested	(67)	(53)
Forfeited	(130)	(4)
Unvested, Ending Balance	317	347
Weighted Average Grant Date Fair Value
Unvested, Beginning Balance	$ 13.85	$ 13.10
Granted	$ 17.45	$ 15.00
Vested	$ 16.73	$ 13.58
Forfeited	$ 13.35	$ 13.67
Unvested ,Ending Balance	$ 15.34	$ 13.85

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Income Taxes Narrative (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Tax Disclosure [Abstract]
Federal income tax expense (benefit)	$ 0	$ 0	$ 0
State income tax expense (benefit)	0	0	0
Net operating loss carryforwards	$ 224,307,000

XML

Stock-Based Compensation Option Activity (Detail) (Stock Option [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Stock Option [Member]
Shares
Outstanding, Beginning Balance	3,287	3,218	3,321
Options granted	120	293	314
Options exercised	(612)	(211)	(124)
Options canceled/forfeited	(967)	(13)	(293)
Outstanding, Ending Balance	1,828	3,287	3,218
Options exercisable	822
Options vested and expected to vest	1,566
Shares available for future grant	598
Weighted Average Exercise Price
Outstanding, Beginning Balance	$ 10.72	$ 10.32	$ 9.83
Options granted	$ 15.61	$ 14.91	$ 16.55
Options exercised	$ 8.44	$ 10.22	$ 11.32
Options canceled/forfeited	$ 9.38	$ 13.48	$ 11.03
Outstanding, Ending Balance	$ 12.51	$ 10.72	$ 10.32
Options exercisable	$ 11.67
Options vested and expected to vest	$ 12.23
Weighted Average Remaining Contractual Life (In Years)
Outstanding, Contractual life	3 years 10 months 28 days
Options exercisable	2 years 6 months 7 days
Options vested and expected to vest	3 years 4 months 13 days
Aggregate Intrinsic Value
Outstanding intrinsic value	$ 12,586
Options exercisable	6,334
Options vested and expected to vest	$ 11,192

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Differences Between United States Federal Income Tax Rate and Effective Income Tax Rate

The total income tax provision (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 35% to net income (loss) before income taxes as a result of the following:

	Year Ended December 31,
	2013		2012		2011
Statutory tax (benefit) expense	(35.0	)%	(35.0	)%	35.0	%
Increase (decrease) in taxes resulting from:
Valuation allowance	34.7		34.7		(35.3	)
Other adjustments	0.3		0.3		0.3
	0.0	%	0.0	%	0.0	%

Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets were as follows:

	As of December 31,
	2013			2012
	(In thousands)
Deferred tax asset:
Carrying values of partner companies and other holdings	$	59,045		$	52,602
Tax loss and credit carryforwards	82,403			75,369
Accrued expenses	2,043			1,860
Stock-based compensation	5,005			7,942
Other	1,560			1,557
	150,056			139,330
Valuation allowance	(150,056		)	(139,330		)
Net deferred tax liability	$	—		$	—

Carryforwards Expiration

As of December 31, 2013, the Company and its subsidiaries consolidated for tax purposes had federal net operating loss carryforwards of approximately $224.3 million. These carryforwards expire as follows:

	Total
	(In thousands)
2014	$	—
2015	—
2016	—
2017	—
2018 and thereafter	224,307
	$	224,307

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Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,646	$ 1,609
Accumulated depreciation	(1,508)	(1,416)
Property and equipment, net	138	193
Building and improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	607	607
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,039	$ 1,002

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company and its partner companies are involved in various claims and legal actions arising in the ordinary course of business. While in the current opinion of the Company the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations, no assurance can be given as to the outcome of these actions, and one or more adverse rulings could have a material adverse effect on the Company’s consolidated financial position and results of operations or that of its partner companies. The Company records costs associated with legal fees as such services are rendered.

The Company leases its corporate headquarters and office equipment under leases expiring at various dates to 2017. Total rental expense under operating leases was $0.6 million, $0.6 million and $0.5 million in 2013, 2012 and 2011, respectively. At December 31, 2013, the Company has future minimum lease payments of $0.5 million for the year ending December 31, 2014 and $0.4 million for the year ending December 31, 2015 under non-cancelable operating leases with initial or remaining terms of one year or more.

The Company had outstanding guarantees of $3.8 million at December 31, 2013 which related to one of the Company's private equity holdings.

The Company also has committed capital of approximately $0.1 million to another private equity fund. This commitment is expected to be funded during the next 12 months.

Under certain circumstances, the Company may be required to return a portion or all the distributions it received as a general partner of a private equity fund (“clawback”). The maximum clawback the Company could be required to return due to our general partner interest is approximately $1.3 million, of which $1.0 million was reflected in Accrued expenses and other current liabilities and $0.3 million was reflected in Other long-term liabilities on the Consolidated Balance Sheets at December 31, 2013. The Company’s ownership in the fund is 19%. The clawback liability is joint and several; therefore the Company may be required to fund the clawback for other general partners should they default. The Company believes its potential liability due to the possibility of default by other general partners is remote.

In connection with the Company’s May 2008 sale of its equity and debt interests in Acsis, Inc., Alliance Consulting Group Associates, Inc., Laureate Biopharma, Inc., ProModel Corporation and Neuronyx, Inc. (the “Bundle Transaction”), an aggregate of $6.4 million of the gross proceeds of the sale were placed in escrow pending the expiration of a predetermined notification period, subject to possible extension in the event of a claim against the escrowed amounts. On April 25, 2009, the purchaser in the Bundle Transaction notified the Company of claims being asserted against the entire escrowed amounts. In April 2013, the claim was tried on the merits and the verdict in the case denied the purchaser's claims against the escrowed funds. The escrow funds were released to the Company in June 2013.

In connection with the Bundle Transaction, the Company agreed to continue its guarantee of the Laureate Biopharma, Inc. Princeton, New Jersey facility lease, subject to certain conditions. During the year ended December 31, 2013, the Company obtained the release of its obligation at no expense to the Company.

In October 2001, the Company entered into an agreement with a former Chairman and Chief Executive Officer of the Company, to provide for annual payments of $0.65 million per year and certain health care and other benefits for life. The related current liability of $0.8 million was included in Accrued expenses and other current liabilities and the long-term portion of $2.6 million was included in Other long-term liabilities on the Consolidated Balance Sheet at December 31, 2013.

The Company provided a $6.3 million letter of credit expiring on March 19, 2019 to the landlord of CompuCom Systems, Inc.’s Dallas headquarters as required in connection with the sale of CompuCom Systems in 2004.

The Company has agreements with certain employees that provide for severance payments to the employee in the event the employee is terminated without cause or an employee terminates his employment for “good reason.” The maximum aggregate exposure under the agreements was approximately $2.4 million at December 31, 2013. During the second quarter of 2013, a Company executive terminated his employment for "good reason." As a result of the termination, the Company recognized a severance charge of $0.9 million. During the year ended December 31, 2013, all the payments required to be made by the Company related to the severance charge were paid.

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of Safeguard and all of its subsidiaries in which a controlling financial interest is maintained. All intercompany accounts and transactions are eliminated in consolidation.

Principles of Accounting for Ownership Interests in Companies

Principles of Accounting for Ownership Interests in Companies

The Company’s ownership interests in its partner companies and private equity funds are accounted for using one of the following methods: consolidation, equity, cost, fair value and available-for-sale. The accounting method applied is generally determined by the degree of the Company’s influence over the entity, primarily determined by its voting interest in the entity.

In addition to holding voting and non-voting equity and debt securities, the Company also periodically makes advances to its partner companies in the form of promissory notes which are included in the Ownership interests in and advances to partner companies and funds line item in the Consolidated Balance Sheets.

Consolidation Method. The Company generally accounts for partner companies in which it directly or indirectly owns more than 50% of the outstanding voting securities under the consolidation method of accounting. Under this method, the Company includes the partner companies’ financial statements within the Company’s Consolidated Financial Statements, and all significant intercompany accounts and transactions are eliminated. The Company reflects participation of other stockholders in the net assets and in the income or losses of these consolidated partner companies in Equity in the Consolidated Balance Sheets and in Net (income) loss attributable to non-controlling interest in the Statements of Operations. Net (income) loss attributable to non-controlling interest adjusts the Company’s consolidated operating results to reflect only the Company’s share of the earnings or losses of the consolidated partner company. The Company accounts for results of operations and cash flows of a consolidated partner company through the latest date in which it holds a controlling interest. If the Company subsequently relinquishes control but retains an interest in the partner company, the accounting method is adjusted to the equity, cost or fair value method of accounting, as appropriate. As of December 31, 2013 and for each of the three years in the period then ended, the Company did not hold a controlling interest in any of its partner companies.

Fair Value Method. The Company accounts for its holdings in NuPathe, a publicly traded partner company, under the fair value method of accounting beginning in October 2012. Unrealized gains and losses on the mark-to-market of the Company’s holdings in fair value method companies and realized gains and losses on the sale of any holdings in fair value method companies are recognized in Other income (loss), net in the Consolidated Statements of Operations.

Equity Method. The Company accounts for partner companies whose results are not consolidated, but over which it exercises significant influence, under the equity method of accounting. Whether or not the Company exercises significant influence with respect to a partner company depends on an evaluation of several factors including, among others, representation of the Company on the partner company’s board of directors and the Company’s ownership level, which is generally a 20% to 50% interest in the voting securities of a partner company, including voting rights associated with the Company’s holdings in common, preferred and other convertible instruments in the company. The Company also accounts for its interests in some private equity funds under the equity method of accounting based on its non-controlling general and limited partner interests in such funds. Under the equity method of accounting, the Company does not reflect a partner company’s financial statements within the Company’s Consolidated Financial Statements; however, the Company’s share of the income or loss of such partner company is reflected in Equity income (loss) in the Consolidated Statements of Operations. The Company includes the carrying value of equity method partner companies in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets. Any excess of the Company’s cost over its underlying interest in the net assets of equity method partner companies allocated to intangible assets is amortized over the estimated useful lives of the related intangible assets. The Company reflects its share of the income or loss of the equity method partner companies on a one quarter lag. This reporting lag could result in a delay in recognition of the impact of changes in the business or operations of these partner companies.

When the Company’s carrying value in an equity method partner company is reduced to zero, the Company records no further losses in its Consolidated Statements of Operations unless the Company has an outstanding guarantee obligation or has committed additional funding to such equity method partner company. When such equity method partner company subsequently reports income, the Company will not record its share of such income until it exceeds the amount of the Company’s share of losses not previously recognized.

Cost Method. The Company accounts for partner companies not consolidated or accounted for under the equity method or fair value method under the cost method of accounting. Under the cost method, the Company does not include its share of the income or losses of partner companies in the Company’s Consolidated Statements of Operations. The Company includes the carrying value of cost method partner companies in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

Available-for-Sale Securities. The Company accounts for its ownership interest in former partner company Tengion, Inc. as available-for-sale securities. In addition, for the period from its initial public offering in August 2010 through October 2012, the Company’s ownership interest in NuPathe was accounted for as available-for-sale securities. Available-for-sale securities are carried at fair value, based on quoted market prices, with the unrealized gains and losses, net of tax, reported as a separate component of equity. Unrealized losses are charged against net income (loss) when a decline in the fair value is determined to be other than temporary.

Accounting Estimates

Accounting Estimates

The preparation of the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect amounts reported in the financial statements and accompanying notes. Actual results may differ from these estimates. These estimates include the evaluation of the recoverability of the Company’s ownership interests in and advances to partner companies and funds and investments in marketable securities, income taxes, stock-based compensation and commitments and contingencies. Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances.

Certain amounts recorded to reflect the Company’s share of income or losses of partner companies accounted for under the equity method are based on unaudited results of operations of those companies and may require adjustments in the future when audits of these entities’ financial statements are completed.

It is reasonably possible that the Company’s accounting estimates with respect to the ultimate recoverability of the carrying value of the Company’s ownership interests in and advances to partner companies and funds could change in the near term and that the effect of such changes on the financial statements could be material. At December 31, 2013, the Company believes the carrying value of the Company’s ownership interests in and advances to partner companies and funds is not impaired, although there can be no assurance that the Company’s future results will confirm this assessment, that a significant write-down or write-off will not be required in the future, or that a significant loss will not be recorded in the future upon the sale of a company.

Cash and Cash Equivalents and Marketable Securities

Cash and Cash Equivalents and Marketable Securities

The Company considers all highly liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash and cash equivalents consist of deposits that are readily convertible into cash. The Company determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Held-to-maturity securities are carried at amortized cost, which approximates fair value. Marketable securities consist of held-to-maturity securities, primarily consisting of government agency bonds, commercial paper and certificates of deposits. Marketable securities with a maturity date greater than one year from the balance sheet date are considered long-term. The Company has not experienced any significant losses on cash equivalents and does not believe it is exposed to any significant credit risk on cash and cash equivalents.

Restricted Cash Equivalents

Restricted Marketable Securities

Restricted marketable securities consist of certificates of deposit with various maturity dates.

Financial Instruments

Financial Instruments

The Company’s financial instruments (principally cash and cash equivalents, marketable securities, restricted cash equivalents, accounts receivable, notes receivable, accounts payable and accrued expenses) are carried at cost, which approximates fair value due to the short-term maturity of these instruments. The Company’s warrant participations are carried at fair value. The Company’s long-term debt is carried at cost. At December 31, 2013, the market value of the Company’s outstanding debentures was approximately $69.9 million based on the midpoint of bid and ask prices as of that date.

Accounting for Participating Interests in Mezzanine Loans Receivable and Related Equity Interests

Accounting for Participating Interests in Mezzanine Loans Receivable and Related Equity Interests

In 2011, the Company acquired a 36% ownership interest in the management company and general partner of Penn Mezzanine L.P. Penn Mezzanine is a mezzanine lender focused on lower middle-market, Mid-Atlantic companies. From such acquisition through December 31, 2013, through its relationship with Penn Mezzanine, the Company acquired participating interests in mezzanine loans and related equity interests of the borrowers. In certain instances, these interests also included warrants to purchase common stock of the borrowers. The Company’s accounting policies for these participating interests are as follows:

Loan Participations Receivable

The Company’s participating interests in Penn Mezzanine loans are included in Loan participations receivable on the Consolidated Balance Sheets. On a periodic basis, but no less frequently than at the end of each quarter, the Company evaluates the carrying value of each loan participation receivable for impairment. A loan participation receivable is considered impaired when it is probable that the Company will be unable to collect all amounts (principal and interest) due according to the contractual terms of the participation agreement and related agreements with the borrowers. The Company maintains an allowance to provide for estimated loan losses based on evaluating known and inherent risks in the loans. The allowance is provided based upon management’s analysis of the pertinent factors underlying the quality of the loans. These factors include an analysis of the financial condition of the individual borrowers, delinquency levels, actual loan loss experience, current economic conditions and other relevant factors. The Company’s analysis includes methods to estimate the fair value of loan collateral and the existence of potential alternative sources of repayment. The Company does not accrue interest when a loan is considered impaired. All cash receipts from an impaired loan are applied to reduce the original principal amount of such loan until the principal has been fully recovered and would be recognized as interest income thereafter. The allowance for loan losses at December 31, 2013 and 2012 was $2.3 million and $2.0 million, respectively.

Penn Mezzanine charges fees to borrowers for originating loans. The Company’s participating interest in these fees, net of any loan origination costs, is deferred and amortized to income using the effective interest method, over the term of the loan. If the loan is repaid prior to maturity, the remaining unamortized deferred loan origination fee is recognized in income at the time of repayment. Unamortized deferred loan origination fees are recorded as a contra asset against Loan participations receivable on the Consolidated Balance Sheets.

Equity Participations

The Company’s participation in equity interests acquired by Penn Mezzanine is accounted for under the cost method of accounting. On a periodic basis, but no less frequently than at the end of each quarter, the Company evaluates the carrying value of its participation in these equity interests for possible impairment based on achievement of business plan objectives and milestones, the fair value of the equity interest relative to its carrying value, the financial condition and prospects of the underlying company and other relevant factors. The Company’s participating interests in equity interests acquired by Penn Mezzanine are included in Other assets on the Consolidated Balance Sheets.

Warrant Participations

The Company recognizes its participation in warrants acquired by Penn Mezzanine based on the fair value of the warrants at the balance sheet date. The fair values of warrant participations are bifurcated from the related loan participations receivable based on the relative fair value of the respective instruments at the acquisition date. The resulting discount is amortized to interest income over the term of the loan using the effective interest method. Any gain or loss associated with changes in the fair value of the warrants at the balance sheet date is recorded in Other income (loss), net in the Consolidated Statements of Operations. The fair value of the warrants is determined based on Level 3 inputs and is included in Other assets on the Consolidated Balance Sheets.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost. Provision for depreciation and amortization is based on the lesser of the estimated useful lives of the assets or the remaining lease term (buildings and leasehold improvements, 5 to 15 years; office equipment, 3 to 15 years) and is computed using the straight-line method.

Impairment of Ownership Interests In and Advances to Partner Companies and Funds

Impairment of Ownership Interests In and Advances to Partner Companies and Funds

On a periodic basis, but no less frequently than quarterly, the Company evaluates the carrying value of its equity and cost method partner companies and available-for-sale securities for possible impairment based on achievement of business plan objectives and milestones, the fair value of each partner company relative to its carrying value, the financial condition and prospects of the partner company and other relevant factors. The business plan objectives and milestones the Company considers include, among others, those related to financial performance, such as achievement of planned financial results or completion of capital raising activities, and those that are not primarily financial in nature, such as hiring of key employees or the establishment of strategic relationships. Management then determines whether there has been an other than temporary decline in the value of its ownership interest in the company or value of available-for-sale securities. Impairment is measured as the amount by which the carrying value of an asset exceeds its fair value.

The fair value of privately held companies is generally determined based on the value at which independent third parties have invested or have committed to invest in these companies or based on other valuation methods, including discounted cash flows, valuation of comparable public companies and the valuation of acquisitions of similar companies. The fair value of the Company’s ownership interests in private equity funds generally is determined based on the fair value of its pro rata portion of the funds’ net assets.

Impairment charges related to equity method partner companies and funds are included in Equity income (loss) in the Consolidated Statements of Operations. Impairment charges related to cost method partner companies and funds and available-for-sale securities are included in Other income (loss), net in the Consolidated Statements of Operations.

The reduced cost basis of a previously impaired partner company is not written-up if circumstances suggest the value of the company has subsequently recovered.

Defined Contribution Plans

Defined Contribution Plans

Defined contribution plans are contributory and cover eligible employees of the Company. The Company’s defined contribution plan allows eligible employees, as defined in the plan, to contribute to the plan up to 75% of their pre-tax compensation, subject to the maximum contributions allowed by the Internal Revenue Code. The Company makes matching contributions under the plan.

Income Taxes

Income Taxes

The Company accounts for income taxes under the asset and liability method whereby deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company measures deferred tax assets and liabilities using enacted tax rates in effect for the year in which the temporary differences are expected to be recovered or settled. The Company recognizes the effect on deferred tax assets and liabilities of a change in tax rates in income in the period of the enactment date. The Company provides valuation allowances against the net deferred tax asset for amounts which are not considered more likely than not to be realized.

Net Income (Loss) Per Share

Net Income (Loss) Per Share

The Company computes net income (loss) per share using the weighted average number of common shares outstanding during each year. The Company includes in diluted net income (loss) per share common stock equivalents (unless anti-dilutive) which would arise from the exercise of stock options and conversion of other convertible securities and adjusted, if applicable, for the effect on net income (loss) of such transactions. Diluted net income (loss) per share calculations adjust net income (loss) for the dilutive effect of common stock equivalents and convertible securities issued by the Company’s consolidated or equity method partner companies.

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Comprehensive income (loss) is the change in equity of a business enterprise during a period from non-owner sources. Excluding net income (loss), the Company’s sources of other comprehensive income (loss) are from net unrealized appreciation (depreciation) on available-for-sale securities. Reclassification adjustments result from the recognition in net income (loss) of unrealized gains or losses that were included in comprehensive income (loss) in prior periods.

Segment Information

Segment Information

The Company reports segment data based on the management approach which designates the internal reporting used by management for making operating decisions and assessing performance as the source of the Company’s reportable operating segments.

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Fair Value Measurements Carrying Value and Fair Value of Certain Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash held in escrow	$ 0	$ 6,434
Fair Value, Measurements, Recurring [Member] | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	139,318	66,029
Cash held in escrow		6,434
Restricted marketable securities	5	10
Available-for-sale securities	15	58
Warrant participations	1,563	423
Marketable securities - held-to-maturity	44,338	140,016
Fair Value, Measurements, Recurring [Member] | Carrying Value [Member] | Nupathe [Member] | Common Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest	16,874	8,897
Fair Value, Measurements, Recurring [Member] | Carrying Value [Member] | Nupathe [Member] | Preferred stock, warrants and options [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest	3,183	12,075
Fair Value, Measurements, Recurring [Member] | Carrying Value [Member] | Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	13,599	50,932
Fair Value, Measurements, Recurring [Member] | Carrying Value [Member] | U.S. Treasury Bills [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	8,014	21,352
Fair Value, Measurements, Recurring [Member] | Carrying Value [Member] | Government agency bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	9,945	45,909
Fair Value, Measurements, Recurring [Member] | Carrying Value [Member] | Certificates of deposit [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	12,780	21,823
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	139,318	66,029
Cash held in escrow		6,434
Restricted marketable securities	5	10
Available-for-sale securities	15	58
Warrant participations	0	0
Marketable securities - held-to-maturity	44,338	140,016
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Cash held in escrow		0
Restricted marketable securities	0	0
Available-for-sale securities	0	0
Warrant participations	0	0
Marketable securities - held-to-maturity	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Cash held in escrow		0
Restricted marketable securities	0	0
Available-for-sale securities	0	0
Warrant participations	1,563	423
Marketable securities - held-to-maturity	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Nupathe [Member] | Common Stock [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest	16,874	8,897
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Nupathe [Member] | Common Stock [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Nupathe [Member] | Common Stock [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Nupathe [Member] | Preferred stock, warrants and options [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Nupathe [Member] | Preferred stock, warrants and options [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Nupathe [Member] | Preferred stock, warrants and options [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest	3,183	12,075
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Commercial Paper [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	13,599	50,932
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Commercial Paper [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Commercial Paper [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | U.S. Treasury Bills [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	8,014	21,352
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | U.S. Treasury Bills [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | U.S. Treasury Bills [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Government agency bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	9,945	45,909
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Government agency bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Government agency bonds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Certificates of deposit [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	12,780	21,823
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Certificates of deposit [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value Measurement [Member] | Certificates of deposit [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - held-to-maturity	$ 0	$ 0

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Significant Accounting Policies Property and Equipment (Detail)	12 Months Ended
	Dec. 31, 2013
Building and improvements [Member] | Minimum [Member]
Description Of Company And Significant Accounting Policies [Line Items]
Property and equipment, useful lives	5 years
Building and improvements [Member] | Maximum [Member]
Description Of Company And Significant Accounting Policies [Line Items]
Property and equipment, useful lives	15 years
Office Equipment [Member] | Minimum [Member]
Description Of Company And Significant Accounting Policies [Line Items]
Property and equipment, useful lives	3 years
Office Equipment [Member] | Maximum [Member]
Description Of Company And Significant Accounting Policies [Line Items]
Property and equipment, useful lives	15 years

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Statement of Other Comprehensive Income [Abstract]
Net income (loss)	$ (35,525)	$ (39,362)	$ 110,597
Other comprehensive income (loss), before taxes:
Unrealized net gain (loss) on available-for-sale securities	(43)	4,388	(20,308)
Reclassification adjustment for gain from available-for-sale securities changed to fair value	0	(4,607)	0
Reclassification adjustment for other than temporary impairment of available-for-sale securities included in net income (loss)	43	260	7,451
Total comprehensive income (loss)	$ (35,525)	$ (39,321)	$ 97,740

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Acquisitions of Ownership Interests in Partner Companies and Funds

12 Months Ended

Dec. 31, 2013

Equity Method Investments and Joint Ventures [Abstract]

Acquisitions of Ownership Interests in Partner Companies and Funds

Acquisitions of Ownership Interests in Partner Companies and Funds

In November 2013, the Company acquired a 22.0% interest in Apprenda, Inc. for $12.1 million. Apprenda makes mobile phone application development software. The Company accounts for its ownership interest in Apprenda under the equity method. The difference between the Company's cost and its interest in the underlying net assets of Apprenda was preliminarily allocated to intangible assets and goodwill as reflected in the carrying value of Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In November 2013, the Company acquired a 8.0% interest in Dabo Health, Inc. ("Dabo") for $0.8 million. Dabo provides the healthcare community with a healthcare information platform that brings clarity to quality metrics, makes them actionable to hospitals and care providers, and facilitates collaboration for quality improvement. The Company accounts for its ownership interest in Dabo under the cost method.

In October and May 2013, the Company funded an aggregate of $0.5 million of a convertible bridge loan to Hoopla Software, Inc. (“Hoopla”). The Company had previously acquired an interest in Hoopla in December 2011 for $1.3 million. Hoopla helps organizations create high performance sales cultures through software-as-a-service solutions that integrate with customer relationship management systems. The Company accounts for its interest in Hoopla under the equity method. The difference between the Company's cost and its interest in the underlying net assets of Hoopla was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In September and June 2013, the Company funded an aggregate of $0.6 million of convertible bridge loans to Alverix, Inc. The Company had previously deployed an aggregate of $8.8 million in Alverix. The Company accounts for its ownership interest in Alverix under the equity method. Subsequent to year end, the Company sold its interest in Alverix. For further details, see Note 18 to the Consolidated Financial Statements.

In August 2013, the Company acquired a 35.1% primary ownership interest in Quantia, Inc. for $7.5 million. Quantia provides a mobile and web-based physician relationship management platform, QuantiaMD, which enables principal participants throughout the healthcare spectrum, including health systems, payers, pharmaceutical companies and medical device companies, to engage and interact with their physicians. The Company accounts for its interest in Quantia under the equity method. The difference between the Company's cost and its interest in the underlying net assets of Quantia was preliminarily allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In August 2013, the Company deployed an additional $1.1 million in DriveFactor, Inc. The Company previously deployed an aggregate of $3.5 million in DriveFactor in 2011 and 2012. DriveFactor is a provider of telematics technology and statistical analysis of driving data. The Company accounts for its interest in DriveFactor under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of DriveFactor was allocated to goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In August 2013, the Company deployed $5.0 million in Clutch Holdings, Inc. (“Clutch”). Clutch is a provider of loyalty and gift card programs to retailers through its proprietary platform, and offers a mobile wallet application to consumers to track and store gift and loyalty cards, coupons and other retail shopping tools. The Company previously had acquired an interest in Clutch in February 2013 for $0.5 million. In conjunction with the most recent funding, the Company’s primary ownership interest in Clutch increased from 6.5% to 24.0%, above the threshold at which the Company believes it exercises significant influence. Accordingly, the Company adopted the equity method of accounting for its holdings in Clutch. The difference between the Company's cost and its interest in the underlying net assets of Clutch was preliminarily allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets. The change in accounting treatment for the Company’s holdings in Clutch from the cost method to the equity method had no effect on the Consolidated Financial Statements of any prior period.

In July 2013, the Company funded $1.0 million of a convertible bridge loan to Crescendo Bioscience, Inc. The Company previously had acquired an interest in Crescendo Bioscience in December 2012 for $10.0 million. The Company accounts for its ownership interest in Crescendo Bioscience under the cost method. Subsequent to year end, the Company sold its interest in Crescendo Bioscience. For further details, see Note 18 to the Consolidated Financial Statements.

During the year ended December 31, 2013, the Company funded $2.3 million for participations in loan and equity interests initiated by Penn Mezzanine. Included in this funding were $2.2 million for participations in loans and $0.1 million for participations in equity of the borrower acquired by Penn Mezzanine. During the year ended December 31, 2012, the Company funded $4.2 million for participations in loan and equity interests initiated by Penn Mezzanine. Included in this funding was $3.8 million for participations in loans, $0.3 million for participations in equity of the borrowers, and $0.1 million for participations in warrants to acquire common stock of the borrowers. During the year ended December 31, 2011, the Company funded an aggregate of $9.7 million for participations in certain loans and equity interests. Included in this funding was $8.1 million for participations in loans, $1.3 million for participations in equity and $0.3 million for participations in warrants to acquire common stock of the borrowers. In August 2011, the Company acquired a 36% ownership interest in the management company and general partner of Penn Mezzanine for $3.9 million. Penn Mezzanine is a mezzanine lender focused on lower middle-market, Mid-Atlantic companies. The Company accounts for its interest in Penn Mezzanine under the equity method of accounting.

During the year ended December 31, 2013, the Company funded an aggregate of $5.3 million of a convertible bridge loan to PixelOptics. The Company previously deployed an aggregate of $31.6 million in PixelOptics. The adjusted carrying value of PixelOptics at December 31, 2013 was $0. The Company accounted for its interest in PixelOptics under the equity method.

In June 2013, the Company deployed an additional $5.3 million in Medivo, Inc. The Company had previously acquired an interest in Medivo in November 2011 for $6.3 million. Medivo is a cloud-based health monitoring platform that connects doctors, consumers and clinical labs. The Company accounts for its interest in Medivo under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of Medivo was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In March 2013, the Company deployed an additional $1.7 million in Lumesis, Inc. The Company had previously acquired an interest in Lumesis in February 2012 for $2.2 million. Lumesis is a financial technology company that is dedicated to delivering software solutions and comprehensive, timely data to the municipal bond marketplace. The Company accounts for its interest in Lumesis under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of Lumesis was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In February 2013, the Company acquired a 27.6% primary ownership interest in Pneuron Corporation for $5.0 million. Pneuron helps enterprise companies reduce the time and cost of application development by building solutions across heterogeneous databases and applications. The Company accounts for its ownership interest in Pneuron under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of Pneuron was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In January 2013, the Company acquired a 7.7% primary interest in Sotera Wireless, Inc. The Company deployed $1.3 million into Sotera Wireless and acquired additional shares from a previous investor for $1.2 million. Sotera Wireless is a medical device company that has developed a wireless patient monitoring platform that is designed to keep clinicians connected to their patients. The Company accounts for its interest in Sotera Wireless under the cost method.

In December 2012, the Company acquired a 35% interest in AppFirst, Inc. for $6.5 million. AppFirst delivers application monitoring systems for development operations professionals and technology executives with visibility into systems, applications and business metrics. The Company accounts for its ownership interest in AppFirst under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of AppFirst was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In October and March 2012, the Company deployed an additional $5.2 million in Good Start Genetics, Inc. (“Good Start”). The Company had previously acquired an interest in Good Start in 2010 for $6.8 million. Good Start performs pre-pregnancy genetic tests, which utilize an advanced DNA sequencing technology to screen for a panel of genetic disorders, including those recommended by the American Congress of Obstetricians and Gynecologists and the American College of Medical Genetics. The Company accounts for its interest in Good Start under the equity method. The difference between the Company’s cost and its ownership interest in the underlying net assets of Good Start was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In October 2012, the Company purchased 2,500 preferred stock units and warrants to purchase 2.5 million shares of common stock from NuPathe for $5.0 million. The preferred stock was converted into 2.5 million shares of common stock of NuPathe in February 2013. The Company previously deployed $18.3 million in NuPathe from August 2006 through August 2010. The Company accounts for its ownership interest in NuPathe under the fair value method. Subsequent to year end, the Company sold its interest in NuPathe. For further details, see Note 18 to the Consolidated Financial Statements.

In September 2012, the Company deployed an additional $5.0 million in ThingWorx. The Company previously deployed $5.0 million in ThingWorx in February 2011. In December 2013, ThingWorx was acquired by PTC Inc. resulting in net sale proceeds to the Company of $36.4 million, excluding cash held in escrow of $4.1 million. Depending on the achievement of certain milestones, the Company may receive up to an additional $6.5 million in connection with the transaction. The Company accounted for its interest in ThingWorx under the equity method.

In August 2012, the Company funded a $1.7 million convertible debt facility to MediaMath, Inc. The Company previously deployed an aggregate of $16.9 million in MediaMath. MediaMath is an online media trading company that enables advertising agencies and their advertisers to optimize their ad spending across various exchanges through its proprietary algorithmic bidding platform and data integration technology. The Company accounts for its interest in MediaMath under the equity method. The difference between the Company's cost and its interest in the underlying net assets of MediaMath was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In August 2012, the Company funded $0.4 million into New York Digital Health Accelerator in exchange for a 9.4% limited partnership interest in the fund which is run by the New York eHealth Collaborative and the New York City Investment Fund for early- and growth-stage digital health companies that are developing technology products in care coordination, patient engagement, analytics and message alerts for healthcare providers. The Company accounts for its interest in New York Digital Health Accelerator under the equity method.

In February 2012, the Company acquired a 23.1% ownership interest in Spongecell, Inc. for $10.0 million. Spongecell is a digital advertising technology company that enhances standard banner ads with rich interactive features. The Company accounts for its ownership interest in Spongecell under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of Spongecell was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In September 2011, the Company acquired a 30.1% ownership interest in Putney, Inc. for $10.0 million. Putney is a specialty pharmaceutical company focused on providing generic medicines for pets. The Company accounts for its interest in Putney under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of Putney was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

In August 2011, the Company funded $2.4 million of a convertible bridge loan to Swap.com. The Company had previously deployed an aggregate of $8.1 million in Swap.com. The Company impaired all of the carrying value of Swap.com in 2011 and no longer holds an active interest in the company. The Company accounted for its interest in Swap.com under the equity method.

In June 2011, the Company acquired a 31.7% ownership interest in NovaSom, Inc. for $20.0 million. NovaSom provides diagnostic devices and services for home testing and evaluation of sleep-disordered breathing, including obstructive sleep apnea. The Company accounts for its interest in NovaSom under the equity method. The difference between the Company’s cost and its interest in the underlying net assets of NovaSom was allocated to intangible assets and goodwill and is reflected in the carrying value in Ownership interests in and advances to partner companies and funds on the Consolidated Balance Sheets.

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Equity Narrative (Detail) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Equity [Abstract]
Preferred stock, par value	$ 0.10	$ 0.10
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares outstanding	0	0

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Income Taxes Carryforwards Expiration (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Income Tax Disclosure [Abstract]
2014	$ 0
2015	0
2016	0
2017	0
2018 and thereafter	224,307
Total	$ 224,307

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Ownership Interests in and Advances to Partner Companies and Funds (Tables)

12 Months Ended

Dec. 31, 2013

Ownership Interests in and Advances to Partner Companies and Funds [Abstract]

Summary of the carrying value of the Company's ownership interests in and advances to partner companies and private equity funds

The following summarizes the carrying value of the Company’s ownership interests in and advances to partner companies and private equity funds.

	December 31, 2013		December 31, 2012
	(In thousands)
Fair value	$	20,057	$	20,972
Equity Method:
Partner companies	108,872		102,931
Private equity funds	1,766		3,810
	110,638		106,741
Cost Method:
Partner companies	13,480		10,000
Private equity funds	2,418		2,634
	15,898		12,634
Advances to partner companies	1,986		8,292
	$	148,579	$	148,639
Loan participations receivable	$	8,135	$	7,085
Available-for-sale securities	$	15	$	58

Results of Operation

	Year Ended December 31,
	2013			2012			2011
	(In thousands)
Results of Operations:
Revenue	$	273,754		$	191,928		$	117,057
Gross profit	$	125,766		$	90,876		$	63,160
Net loss	$	(52,489	)	$	(79,662	)	$	(38,468	)

	Six Months Ended
	June 30, 2013			June 30, 2012
	(In thousands)
Results of Operations:
Revenue	$	800		$	569
Operating loss	$	(12,219	)	$	(16,172	)
Net loss	$	(14,838	)	$	(16,923	)

Unaudited Financial Information

	As of December 31,
	2013		2012
	(In thousands)
Balance Sheets:
Current assets	$	221,001	$	168,246
Non-current assets	90,042		74,555
Total assets	$	311,043	$	242,801
Current liabilities	$	153,398	$	125,491
Non-current liabilities	75,324		37,384
Shareholders’ equity	82,321		79,926
Total liabilities and shareholders’ equity	$	311,043	$	242,801

The following unaudited summarized balance sheets for PixelOptics at June 30, 2013 and December 31, 2012 and the results of operations for the six months ended June 30, 2013 and 2012, have been compiled from the unaudited financial statements of PixelOptics.  The results of PixelOptics are reported on a one quarter lag.  

	As of June 30,			As of December 31,
	2013			2012
	(In thousands)
Balance Sheets:
Current assets	$	285		$	323
Non-current assets	4,588			5,259
Total assets	$	4,873		$	5,582
Current liabilities	$	56,721		$	34,184
Non-current liabilities	1,818			10,228
Shareholders’ equity	(53,666		)	(38,830		)
Total liabilities and shareholders’ equity	$	4,873		$	5,582

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Supplemental Cash Flow Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash Flow Supplemental Disclosures [Line Items]
Converted instrument amount	$ 1.8	$ 0.4
Interest payments	2.9	0.8	0.4
Cash paid for taxes	0	0	0
Convertible Senior Debentures due 2014 [Member]
Cash Flow Supplemental Disclosures [Line Items]
Interest payments		$ 4.8	$ 4.8

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Significant Accounting Policies Description of the Company Narrative (Details) (USD $)	12 Months Ended
	Dec. 31, 2013 segment
Description Of Company And Significant Accounting Policies [Line Items]
Number of reportable segments	2
Initial And Ongoing Capital Requirement [Member] | Minimum [Member]
Description Of Company And Significant Accounting Policies [Line Items]
Initial capital contribution	$ 5,000,000
Follow-on financings	5,000,000
Initial And Ongoing Capital Requirement [Member] | Maximum [Member]
Description Of Company And Significant Accounting Policies [Line Items]
Initial capital contribution	15,000,000
Follow-on financings	10,000,000
Anticipated contribution to partner companies	$ 25,000,000

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Related Party Transactions

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

In May 2001, the Company entered into a $26.5 million loan agreement with Warren V. Musser, a former Chairman and Chief Executive Officer of the Company. Through December 31, 2013, the Company recognized impairment charges against the loan of $15.7 million. The Company’s efforts to collect Mr. Musser’s outstanding loan obligation have included the sale of existing collateral, obtaining and selling additional collateral, litigation and negotiated resolution. Since 2001 and through December 31, 2013, the Company has received a total of $16.9 million in payments on the loan. In December 2011, the loan documents were amended to take into account accumulated unpaid interest and to make certain other changes related to collateral, maturity dates and other terms.

The Company received cash from the sale of collateral in 2011 in the amount of $0.1 million and no payments in 2013 or 2012. The carrying value of the loan at December 31, 2013 was zero.

In the normal course of business, the Company’s directors, officers and employees hold board positions with partner and other companies in which the Company has a direct or indirect ownership interest.