10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

______________________________________________________________________________________________

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2015

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From ____________ to ___________

Commission File Number 1-5620

______________________________________________________________________________________________

Safeguard Scientifics, Inc.

(Exact name of registrant as specified in its charter)

______________________________________________________________________________________________

Pennsylvania
(State or other jurisdiction of	23-1609753
incorporation or organization)	(I.R.S. Employer ID No.)
170 North Radnor-Chester Road
Suite 200
Radnor, PA	19087
(Address of principal executive offices)	(Zip Code)

(610) 293-0600

Registrant’s telephone number, including area code

______________________________________________________________________________________________

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  þ    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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes  þ    No  ¨

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 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  þ	Non-accelerated filer  ¨	Smaller reporting company  ¨
(Do not check if a 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  þ

Number of shares outstanding as of October 21, 2015

Common Stock 20,649,671

SAFEGUARD SCIENTIFICS, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
	Page
Item 1 – Financial Statements:
Consolidated Balance Sheets (unaudited) – September 30, 2015 and December 31, 2014	3
Consolidated Statements of Operations (unaudited) – Three and Nine Months Ended September 30, 2015 and 2014	4
Condensed Consolidated Statements of Cash Flows (unaudited) – Nine Months Ended September 30, 2015 and 2014	5
Consolidated Statement of Changes in Equity (unaudited) – Nine Months Ended September 30, 2015	6
Notes to Consolidated Financial Statements (unaudited)	7
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3 – Quantitative and Qualitative Disclosures About Market Risk	31
Item 4 – Controls and Procedures	31
PART II – OTHER INFORMATION
Item 1 – Legal Proceedings	32
Item 1A – Risk Factors	32
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3 – Defaults Upon Senior Securities	32
Item 4 – Mine Safety Disclosures	32
Item 5 – Other Information	32
Item 6 – Exhibits	33
Signatures	34

2

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited - In thousands, except per share data)

	September 30, 2015			December 31, 2014
ASSETS
Current Assets:
Cash and cash equivalents	$	63,708		$	111,897
Marketable securities	29,760			25,263
Prepaid expenses and other current assets	2,011			1,684
Total current assets	95,479			138,844
Property and equipment, net	1,438			123
Ownership interests in and advances to partner companies	162,988			154,192
Loan participations receivable	2,640			3,855
Long-term marketable securities	10,705			19,365
Other assets	1,903			2,075
Total Assets	$	275,153		$	318,454
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	253		$	226
Accrued compensation and benefits	3,137			3,997
Accrued expenses and other current liabilities	3,644			2,334
Total current liabilities	7,034			6,557
Other long-term liabilities	3,928			3,507
Convertible senior debentures	51,441			50,563
Total Liabilities	62,403			60,627
Commitments and contingencies
Equity:
Preferred stock, $0.10 par value; 1,000 shares authorized	—			—
Common stock, $0.10 par value; 83,333 shares authorized; 21,573 shares issued at September 30, 2015 and December 31, 2014	2,157			2,157
Additional paid-in capital	818,671			819,757
Treasury stock, at cost; 877 and 921 shares at September 30, 2015 and December 31, 2014, respectively	(18,079		)	(19,341		)
Accumulated deficit	(589,999		)	(544,746		)
Total Equity	212,750			257,827
Total Liabilities and Equity	$	275,153		$	318,454

See Notes to Consolidated Financial Statements.

3

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - In thousands, except per share data)

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
General and administrative expense	$	3,962		$	4,177		$	13,596		$	14,485
Operating loss	(3,962		)	(4,177		)	(13,596		)	(14,485		)
Other income (loss), net	704			(246		)	301			31,580
Interest income	398			482			1,487			1,494
Interest expense	(1,133		)	(1,103		)	(3,383		)	(3,295		)
Equity loss	(7,635		)	(8,962		)	(30,062		)	(5,329		)
Net income (loss) before income taxes	(11,628		)	(14,006		)	(45,253		)	9,965
Income tax benefit (expense)	—			—			—			—
Net income (loss)	$	(11,628	)	$	(14,006	)	$	(45,253	)	$	9,965
Net income (loss) per share:
Basic	$	(0.56	)	$	(0.68	)	$	(2.17	)	$	0.47
Diluted	$	(0.56	)	$	(0.68	)	$	(2.17	)	$	0.47
Weighted average shares used in computing income (loss) per share :
Basic	20,919			20,678			20,892			21,042
Diluted	20,919			20,678			20,892			21,418

See Notes to Consolidated Financial Statements.

4

SAFEGUARD SCIENTIFICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited – In thousands)

	Nine months ended September 30,
	2015			2014
Cash Flows from Operating Activities:
Net cash used in operating activities	$	(14,086	)	$	(15,475	)
Cash Flows from Investing Activities:
Proceeds from sales of and distributions from companies	25,029			81,626
Acquisitions of ownership interests in companies	(52,181		)	(54,956		)
Advances and loans to companies	(10,935		)	(9,868		)
Repayment of advances and loans to companies	1,290			5,509
Increase in marketable securities	(23,875		)	(44,578		)
Decrease in marketable securities	28,043			39,979
Capital expenditures	(402		)	(11		)
Other	—			5
Net cash provided by (used in) investing activities	(33,031		)	17,706
Cash Flows from Financing Activities:
Issuance of Company common stock, net	676			612
Repurchase of convertible senior debentures	—			(441		)
Repurchase of Company common stock	(1,748		)	(25,036		)
Net cash used in financing activities	(1,072		)	(24,865		)
Net change in cash and cash equivalents	(48,189		)	(22,634		)
Cash and cash equivalents at beginning of period	111,897			139,318
Cash and cash equivalents at end of period	$	63,708		$	116,684

See Notes to Consolidated Financial Statements.

5

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited – In thousands)

				Accumulated Deficit			Common Stock			Additional Paid-in Capital			Treasury Stock
	Total						Shares	Amount					Shares		Amount
Balance - December 31, 2014	$	257,827		$	(544,746	)	21,573	$	2,157	$	819,757		921		$	(19,341	)
Net loss	(45,253		)	(45,253		)	—	—		—			—		—
Stock options exercised, net	676			—			—	—		(1,051		)	(83	)	1,727
Repurchase of common stock	(1,748		)	—			—	—		—			99		(1,748		)
Issuance of restricted stock, net	108			—			—	—		(1,175		)	(60	)	1,283
Stock-based compensation expense	1,140			—			—	—		1,140			—		—
Balance - September 30, 2015	$	212,750		$	(589,999	)	21,573	$	2,157	$	818,671		877		$	(18,079	)

See Notes to Consolidated Financial Statements.

6

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. General

The accompanying unaudited interim Consolidated Financial Statements of Safeguard Scientifics, Inc. (“Safeguard” or the “Company”) were prepared in accordance with accounting principles generally accepted in the United States of America and the interim financial statement rules and regulations of the SEC. In the opinion of management, these statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the Consolidated Financial Statements. The interim operating results are not necessarily indicative of the results for a full year or for any interim period. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. The Consolidated Financial Statements included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Form 10-Q and with the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s 2014 Annual Report on Form 10-K.

2. Ownership Interests in and Advances to Partner Companies

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

	September 30, 2015		December 31, 2014
	(Unaudited - In thousands)
Equity Method:
Partner companies	$	143,906	$	134,861
Private equity funds	1,030		1,128
	144,936		135,989
Cost Method:
Partner companies	5,024		6,774
Private equity funds	2,050		2,364
	7,074		9,138
Advances to partner companies	10,978		9,065
	$	162,988	$	154,192

In January 2014, Alverix, Inc., formerly an equity method partner company, was acquired by Becton, Dickinson and Company. The Company received $15.7 million in initial cash proceeds in connection with the transaction. The Company recognized a gain of $15.7 million on the transaction, which is included in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2014. In July 2015, the Company received an additional $1.7 million in connection with the expiration of the escrow period, resulting in a gain of $1.7 million which is included in Equity income (loss), net in the Consolidated Statements of Operations for the three and nine months ended September 30 , 2015.

In December 2013, ThingWorx, Inc., formerly an equity method partner company, was acquired by PTC Inc. The Company received $36.4 million in initial cash proceeds in connection with the transaction excluding $4.1 million which will be held in escrow until December 2015. In July 2015, the Company received an additional $3.3 million associated with the achievement of performance milestones, resulting in a gain of $3.3 million which is included in Equity income (loss), net in the Consolidated Statements of Operations for the three and nine months ended September 30, 2015. Depending on the achievement of certain additional milestones, the Company may receive up to an additional $3.2 million in connection with the transaction.

In February 2014, Crescendo Bioscience, Inc., formerly a cost method partner company, was acquired by Myriad Genetics, Inc. The Company received $38.4 million in initial cash proceeds in connection with the transaction. The Company recognized a gain of $27.4 million on the transaction, which is included in Other income (loss), net in the Consolidated Statements of Operations for the nine months ended September 30, 2014. In March 2015, the Company received $2.0 million which was released from escrow resulting in a gain of $2.0 million which is included in Other income (loss), net in the Consolidated Statements of Operations for the nine months ended September 30, 2015. In July 2015, the Company received the remaining $0.9 million which was released from escrow resulting in a gain of $0.9 million which is included in Other income (loss), net in the Consolidated Statements of Operations for the three and nine months ended September 30, 2015.

7

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In July 2015, Quantia, Inc., formerly an equity method partner company, was acquired by Physicians Interactive. The Company received cash proceeds of $7.8 million in connection with the transaction, excluding $1.2 million which will be held in escrow until July 2016. The Company recognized an impairment charge of $2.9 million in the second quarter of 2015 which is reflected in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2015. The impairment was based on the difference between the Company's carrying value in Quantia and the initial net proceeds received.

In April 2015, DriveFactor, Inc., formerly an equity method partner company, was acquired by CCC Information Services Inc. The Company received cash proceeds of $9.1 million, excluding $1.1 million which will be held in escrow until approximately April 2016. The Company recognized a gain of $6.1 million on the transaction, which is included in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2015.

The Company recognized an impairment charge of $3.2 million in the second quarter of 2015 related to InfoBionic, Inc. which is reflected in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2015. The impairment was due to discontinuation of InfoBionic's first-generation product. The amount of the impairment was determined based on the value at which InfoBionic raised additional equity financing in July 2015 from the Company and other existing capital providers. Proceeds from the financing will be used for development and commercialization of the second-generation product.

The Company recognized an impairment charge of $2.3 million in the first quarter of 2015 related to Dabo Health, Inc. which is reflected in Other income (loss), net in the Consolidated Statements of Operations for the nine months ended September 30, 2015. The impairment was based on the decision of the Company and other shareholders not to continue to fund Dabo Health's operations. The Company believes it is unlikely it will recover any of its capital.

3. Acquisitions of Ownership Interests in Partner Companies

In July 2015, the Company deployed an additional $10.0 million into Apprenda, Inc. The Company had previously deployed $12.1 million in Apprenda. Apprenda is an enterprise platform-as-a-service company powering the next generation of enterprise software development in public, private and hybrid clouds. The Company accounts for its interest in Apprenda under the equity method.

In July 2015, the Company deployed an additional $1.5 million into InfoBionic. The Company had previously deployed an aggregate of $8.0 million in InfoBionic. InfoBionic is an emerging digital health company focused on creating patient monitoring solutions for chronic disease management with an initial market focus on cardiac arrhythmias. The Company accounts for its interest in InfoBionic under the equity method.

During the six months ended June 30, 2015, the Company funded an aggregate of $2.8 million of convertible bridge loans to Quantia, Inc. The Company had previously deployed an aggregate of $12.5 million in Quantia. The Company accounted for its interest in Quantia under the equity method. In July 2015, Quantia was acquired by Physicians Interactive.

During the six months ended June 30, 2015, the Company funded an aggregate of $2.0 million of convertible bridge loans to AppFirst, Inc. The Company had previously deployed an aggregate of $8.6 million in AppFirst. AppFirst's technology provides global organizations the ability to achieve unmatched visibility into the real-time relationships between distributed applications and the global assets which support their execution. The Company accounts for its interest in AppFirst under the equity method.

In June 2015, the Company acquired a 24.5% interest in QuanticMind, Inc., formerly InsideVault, Inc., for $7.0 million. QuanticMind is a software-as-a-service company that provides enterprise-level predictive advertising management software for paid search, social and mobile. The Company accounts for its interest in QuanticMind under the equity method.

In May 2015, the Company deployed an additional $3.5 million into Pneuron Corporation. The Company had previously deployed $5.0 million in Pneuron. Pneuron enables organizations to rapidly solve business problems through a distributed approach that cuts across data, applications and processes. The Company accounts for its interest in Pneuron under the equity method.

In May and February 2015, the Company deployed an aggregate of $4.8 million into Clutch Holdings, Inc. ("Clutch"). The Company had previously deployed an aggregate of $7.5 million in Clutch. Clutch provides consumer management technology that delivers customer intelligence and consumer engagement solutions to premium brands. The Company accounts for its interest in Clutch under the equity method.

In May 2015, the Company acquired a 22.6% interest in Sonobi, Inc. for $5.4 million. Sonobi is an advertising technology developer that creates data-driven tools and solutions to meet the evolving needs of demand- and sell-side organizations within the digital media marketplace. The Company accounts for its interest in Sonobi under the equity method.

8

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In April and March 2015, the Company funded an aggregate $1.0 million convertible bridge loan to AdvantEdge Healthcare Solutions, Inc. ("AdvantEdge"). The Company had previously deployed an aggregate of $15.3 million in AdvantEdge. AdvantEdge is a provider of physician billing and practice management services and software to hospital-based physician groups, large office-based physician practices, and ambulatory surgery centers. The Company accounts for its interest in AdvantEdge under the equity method.

In April 2015, the Company acquired a 31.5% interest in meQuilibrium for $6.5 million. meQuilibrium offers an individualized, online stress management program based on building resilience, defined as the capacity to rebound or bounce back from adversity, conflict, failure and also positive events, progress and increased responsibility. The Company accounts for its interest in meQuilibrium under the equity method.

In March 2015, the Company funded $4.0 million of a convertible bridge loan to Spongecell, Inc. The Company had previously deployed $10.0 million in Spongecell. Spongecell is a programmatic creative solution that leverages data-driven technology to automate the production and delivery of high-quality ads at scale across display, mobile and video. The Company accounts for its interest in Spongecell under the equity method.

In March 2015, the Company deployed an additional $0.3 million into Dabo Health. The Company had previously deployed $2.0 million in Dabo Health. The Company impaired all of the carrying value of Dabo Health in the first quarter of 2015. The Company accounted for its interest in Dabo Health under the cost method.

In February 2015, the Company acquired a 30.1% interest in CloudMine, Inc. for $2.9 million. CloudMine is an enterprise mobility company that provides a HIPAA-compliant managed mobility solution to accelerate development, eliminate maintenance and standardize cross-organizational mobile IT. The Company accounts for its interest in CloudMine under the equity method.

In January 2015, the Company acquired a 19.9% interest in Aventura, Inc. for $6.0 million. Aventura is a leader in healthcare workflow optimization software solutions. The Company accounts for its interest in Aventura under the equity method.

In January 2015, the Company acquired a 25.4% interest in Full Measure Education, Inc. ("Full Measure") for $4.0 million. Full Measure enables student success through a comprehensive technology-based communications platform. The Company accounts for its interest in Full Measure under the equity method.

In January 2015, the Company deployed an additional $1.1 million into Trice Medical, Inc. The Company had previously deployed an aggregate of $5.0 million in Trice Medical. Trice Medical is a diagnostics company focused on micro invasive technologies. The Company accounts for its interest in Trice Medical under the equity method.

9

SAFEGUARD SCIENTIFICS, INC.

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 instruments 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 September 30, 2015 and December 31, 2014:

	Carrying Value		Fair Value Measurement at September 30, 2015
			Level 1		Level 2		Level 3
	(Unaudited - In thousands)
Cash and cash equivalents	$	63,708	$	63,708	$	—	$	—
Marketable securities—held-to-maturity:
Certificates of deposit	$	40,465	$	40,465	$	—	$	—
Total marketable securities	$	40,465	$	40,465	$	—	$	—

	Carrying Value		Fair Value Measurement at December 31, 2014
			Level 1		Level 2		Level 3
	(Unaudited - In thousands)
Cash and cash equivalents	$	111,897	$	111,897	$	—	$	—
Marketable securities—held-to-maturity:
Commercial paper	$	6,596	$	6,596	$	—	$	—
U.S. treasury bills	1,503		1,503		—		—
Government agency bonds	503		503		—		—
Certificates of deposit	36,026		36,026		—		—
Total marketable securities	$	44,628	$	44,628	$	—	$	—

As of September 30, 2015, $29.8 million of marketable securities had contractual maturities which were less than one year and $10.7 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.

5. Convertible Debentures and Credit Arrangements

Convertible Senior Debentures

In November 2012, the Company issued $55.0 million principal amount of its 5.25% convertible senior debentures due 2018 (the "2018 Debentures"). The 2018 Debentures may be settled in cash or partially in cash upon conversion. Accordingly, 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 September 30, 2015, the fair value of the $55.0 million outstanding 2018 Debentures was approximately $62.6 million, based on the midpoint of the bid and ask prices as of such date. At September 30, 2015, the carrying amount of the equity component was $6.4 million, the principal amount of the liability component was $55.0 million, the unamortized

10

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

discount was $3.6 million and the net carrying value of the liability component was $51.4 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 $0.9 million and $0.8 million of such expense for the nine months ended September 30, 2015 and 2014, respectively. The effective interest rate on the 2018 Debentures is 8.7%.

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 $25.0 million in the form of borrowings, guarantees and issuances of letters of credit, subject to a $20.0 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 at the bank. The credit facility, as amended December 22, 2014, matures on December 21, 2015. 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 was required in connection with the sale of CompuCom Systems in 2004. Availability under the Company’s revolving credit facility at September 30, 2015 was $18.7 million.

6. Stock-Based Compensation

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

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(Unaudited - In thousands)
General and administrative expense	$	148	$	176	$	1,140	$	1,583
	$	148	$	176	$	1,140	$	1,583

The fair value of the Company’s option awards to employees was estimated at the date of grant using the Black-Scholes option-pricing model. The risk-free rate was 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.

At September 30, 2015, the Company had outstanding options that vest based on three different types of vesting schedules:

1)	performance-based;
2)	market-based; and
3)	service-based.

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 on 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 nine months ended September 30, 2015 and 2014, the Company did not issue any performance-based options to employees. During the nine months ended September 30, 2014, 7 thousand performance-based options vested. During the nine months ended September 30, 2015 and 2014, 8 thousand and 16 thousand performance-based options, respectively, were canceled or forfeited. The Company recorded compensation expense related to performance-based options of $0.0 million for both the three months ended September 30, 2015 and 2014, and $0.0 million and $0.1 million for the nine months ended September 30, 2015 and 2014, respectively. The maximum number of unvested shares at September 30, 2015 attainable under these option grants was 453 thousand shares.

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. During the nine months ended September 30, 2014, 22 thousand market-based options vested. During the nine months ended September 30, 2015 and 2014, 91 thousand and 107 thousand market-based

11

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

options, respectively, were canceled or forfeited. The Company recorded compensation expense related to market-based options of $0.0 million for both the three and nine months ended September 30, 2014. The Company recognized all remaining compensation cost related to market-based options in 2014. Depending on the Company’s stock performance, the maximum number of unvested shares at September 30, 2015 attainable under these option grants was 136 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 nine months ended September 30, 2015 and 2014, the Company issued 21 thousand and 5 thousand service-based options, respectively, to employees. The Company recorded compensation expense related to service-based options of $0.1 million for both the three months ended September 30, 2015 and 2014, and $0.2 million and $0.3 million for the nine months ended September 30, 2015 and 2014, respectively.

Performance-based stock units 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 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 nine months ended September 30, 2015 and 2014, the Company did not issue any performance-based stock units to employees. During the nine months ended September 30, 2015 and 2014, no performance-based stock units vested.

Under the 2014 performance-based award plan, once performance-based stock units are fully vested, participants are entitled to receive cash payments based on their initial performance grant values as target capital returns described above are exceeded. At September 30, 2015, the liability associated with such potential cash payments was $0.0 million.

During the nine months ended September 30, 2015 and 2014, the Company issued 41 thousand and 45 thousand deferred stock units, respectively, 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.

All other awards are restricted stock awards that generally vest over four years. During the nine months ended September 30, 2015 and 2014, the Company did not issue any restricted stock awards.

Total compensation expense for deferred stock units, performance-based stock units and restricted stock was approximately $0.1 million for the three months ended September 30, 2015 and 2014, and $1.0 million and $1.2 million for the nine months ended September 30, 2015 and 2014, respectively.

7. Income Taxes

The Company’s consolidated income tax benefit (expense) was $0.0 million for the three and nine months ended September 30, 2015 and 2014. The Company has recorded a valuation allowance to reduce its net deferred tax asset to an amount that is more likely than not to be realized in future years. Accordingly, the benefit of the net operating loss that would have been recognized in the three and nine months ended September 30, 2015 and the three months ended September 30, 2014 was offset by changes in the valuation allowance. The tax expense that would have been recognized in the nine months ended September 30, 2014 was also offset by changes in the valuation allowance. During the nine months ended September 30, 2015, the Company had no material changes in uncertain tax positions.

12

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Net Income (Loss) Per Share

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

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(Unaudited - In thousands, except per share data)
Basic:
Net income (loss)	$	(11,628	)	$	(14,006	)	$	(45,253	)	$	9,965
Weighted average common shares outstanding	20,919			20,678			20,892			21,042
Net income (loss) per share	$	(0.56	)	$	(0.68	)	$	(2.17	)	$	0.47
Diluted:
Net income (loss) for dilutive share computation	$	(11,628	)	$	(14,006	)	$	(45,253	)	$	9,965
Number of shares used in basic per share computation	20,919			20,678			20,892			21,042
Unvested restricted stock and DSUs	—			—			—			354
Employee stock options	—			—			—			22
Weighted average common shares outstanding	20,919			20,678			20,892			21,418
Net income (loss) per share	$	(0.56	)	$	(0.68	)	$	(2.17	)	$	0.47

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 the income attributable to the potential exercise of the dilutive securities of the partner company from net income (loss). Any impact is shown as an adjustment to net income (loss) for purposes of calculating diluted net income (loss) per share.

Diluted earnings per share for the three months ended September 30, 2015 and 2014 do not reflect the following potential shares of common stock that would have an anti-dilutive effect or have unsatisfied performance or market conditions:

• At September 30, 2015 and 2014, options to purchase 1.1 million and 1.7 million shares of common stock at prices ranging from $7.14 to $19.95 and $3.93 to $18.80, respectively, were excluded from the calculations.

• At September 30, 2015 and 2014, unvested restricted stock, performance-based stock units and DSUs convertible into 0.4 million and 0.3 million shares of stock, respectively, were excluded from the calculations.

• At September 30, 2015 and 2014, 3.0 million shares of common stock, representing the effect of the assumed conversion of the 2018 Debentures, were excluded from the calculation.

Diluted earnings per share for the nine months ended September 30, 2015 and 2014 do not reflect the following potential shares of common stock that would have an anti-dilutive effect or have unsatisfied performance or market conditions:

• At September 30, 2015 and 2014, options to purchase 1.1 million and 0.8 million shares of common stock at prices ranging from $7.14 to $19.95 and $7.41 to $18.78, respectively, were excluded from the calculations.

• At September 30, 2015 and 2014, unvested restricted stock, performance-based stock units and DSUs convertible into 0.4 million and 0.3 million shares of stock, respectively, were excluded from the calculations.

• At September 30, 2015 and 2014, 3.0 million shares of common stock, representing the effect of the assumed conversion of the 2018 Debentures, were excluded from the calculation.

13

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Operating Segments

As of September 30, 2015, the Company held interests in 27 non-consolidated partner companies which are included in the Healthcare and Technology segments. The Company’s active partner companies by segment were as follows as of September 30, 2015:

Healthcare
Partner Company	Safeguard Primary Ownership as of September 30, 2015	Accounting Method
AdvantEdge Healthcare Solutions, Inc.	40.1%	Equity
Aventura, Inc.	19.9%	Equity
Good Start Genetics, Inc.	29.8%	Equity
InfoBionic, Inc.	38.5%	Equity
Medivo, Inc.	34.5%	Equity
meQuilibrium, Inc.	31.5%	Equity
NovaSom, Inc.	31.7%	Equity
Propeller Health, Inc.	24.6%	Equity
Putney, Inc.	28.2%	Equity
Syapse, Inc.	24.4%	Equity
Trice Medical, Inc.	27.7%	Equity

Technology
Partner Company	Safeguard Primary Ownership as of September 30, 2015	Accounting Method
AppFirst, Inc.	34.2%	Equity
Apprenda, Inc.	29.5%	Equity
Beyond.com, Inc.	38.2%	Equity
Bridgevine, Inc.	17.2%	Cost
CloudMine, Inc.	30.1%	Equity
Clutch Holdings, Inc.	39.3%	Equity
Full Measure Education, Inc.	25.4%	Equity
Hoopla Software, Inc.	25.6%	Equity
QuanticMind, Inc. (formerly InsideVault, Inc.)	24.5%	Equity
Lumesis, Inc.	44.7%	Equity
MediaMath, Inc.	20.6%	Equity
Pneuron Corporation	35.4%	Equity
Sonobi, Inc.	22.6%	Equity
Spongecell, Inc.	23.0%	Equity
Transactis, Inc.	24.5%	Equity
WebLinc, Inc.	29.2%	Equity

Results of the Healthcare and Technology segments reflect the equity income (loss) of their respective equity method partner companies, other income (loss) associated with cost method partner companies and the gains or losses on the sale of the interests in their respective partner companies.

Management evaluates the Healthcare and Technology segments’ performance based on net income (loss) which is impacted by 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, any impairment charges and gain (loss) on the sale of the interests in equity and cost method partner companies.

Other Items include certain expenses which are not identifiable to the operations of the Company’s operating 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 and other income (loss), equity income (loss) related to certain private equity fund ownership interests and income taxes. Other Items also include

14

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

interest earned on mezzanine loans, gain (loss) on the mark-to-market of our warrant participations, and impairment on debt and equity participation interests in which the Company participates with Penn Mezzanine as well as equity income (loss) associated with the Company's interest in the management company and general partner of Penn Mezzanine.

As of September 30, 2015 and December 31, 2014, all of the Company’s assets were located in the United States.

Segment assets in Other Items included primarily cash, cash equivalents, and marketable securities totaling $104.2 million and $156.5 million at September 30, 2015 and December 31, 2014, respectively.

	Three months ended September 30, 2015
	Healthcare			Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	—		$	(3,962	)	$	(3,962	)
Other income (loss), net	869			—			869			(165		)	704
Equity loss	(4,581		)	(2,966		)	(7,547		)	(88		)	(7,635		)
Net loss	(3,712		)	(2,966		)	(6,678		)	(4,950		)	(11,628		)
Segment Assets:
September 30, 2015	48,463			111,445			159,908			115,245			275,153
December 31, 2014	62,292			88,408			150,700			167,754			318,454

	Three months ended September 30, 2014
	Healthcare			Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	—		$	(4,177	)	$	(4,177	)
Other loss, net	(8		)	—			(8		)	(238		)	(246		)
Equity loss	(4,734		)	(4,109		)	(8,843		)	(119		)	(8,962		)
Net loss	(4,742		)	(4,109		)	(8,851		)	(5,155		)	(14,006		)

	Nine months ended September 30, 2015
	Healthcare			Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	—		$	(13,596	)	$	(13,596	)
Other income (loss), net	558			—			558			(257		)	301
Equity loss	(21,686		)	(8,344		)	(30,030		)	(32		)	(30,062		)
Net loss	(21,128		)	(8,344		)	(29,472		)	(15,781		)	(45,253		)

	Nine months ended September 30, 2014
	Healthcare		Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—	$	—		$	—		$	(14,485	)	$	(14,485	)
Other income (loss), net	31,823		—			31,823			(243		)	31,580
Equity income (loss)	1,341		(6,108		)	(4,767		)	(562		)	(5,329		)
Net income (loss)	33,164		(6,108		)	27,056			(17,091		)	9,965

15

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Commitments and Contingencies

The Company and its partner companies are involved in various claims and legal actions arising in the ordinary course of business. 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, however, 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 had outstanding guarantees of $3.8 million at September 30, 2015 which related to one of the Company's private equity holdings.

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 its 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 September 30, 2015. 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 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 $2.3 million was included in Other long-term liabilities on the Consolidated Balance Sheet at September 30, 2015.

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 $3.0 million at September 30, 2015.

In June 2011, the Company's former partner company, Advanced BioHealing, Inc. (“ABH”) was acquired by Shire plc. Prior to the expiration of the escrow period in March 2012, Shire plc filed a claim against all amounts held in escrow related to the sale based principally upon a United States Department of Justice (“DOJ”) false claims act investigation relating to ABH. No further proceeds will be distributed to the Company or other former owners until the validity of such claims is determined. The Company presently views it as unlikely that it will receive any portion of such amount in the short or long-term. In connection with the above-referenced investigation, in July 2015 the Company received a Civil Investigation Demand-Documentary Material from the DOJ regarding ABH and Safeguard’s relationship with ABH. Safeguard intends to cooperate with the investigation.

11. Equity

In July 2015, the Company's Board of Directors authorized the Company, from time to time and depending on market conditions, to repurchase up to $25.0 million of the Company's outstanding common stock. During the third quarter of 2015, the Company repurchased 0.1 million shares at an aggregate cost of $1.7 million.

16

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 Safeguard's partner companies operate, compliance with government regulation and legal liabilities, all of which are discussed in Item 1A. “Risk Factors” in Safeguard's Annual Report on Form 10-K and updated, as applicable, in “Factors that May Affect Future Results” and Item 1A. “Risk Factors” below. 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.

Business Overview

Safeguard’s charter is to build value in early- and 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 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. 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 principally on medical technology (“MedTech”), including diagnostics and devices; and healthcare technology (“HealthTech”). Within these areas, Safeguard targets companies that have lesser regulatory risk and have achieved or are near commercialization; and

Technology — companies focused principally 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.

17

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.

Other items include certain expenses which are not identifiable to the operations of our operating 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), equity income (loss) related to our private equity holdings and income taxes. Other items also include interest earned on mezzanine loans, gain (loss) on the mark-to-market of our warrant participations, and impairment on debt and equity interests in which we participate with Penn Mezzanine as well as equity income (loss) associated with our interest in the management company and general partner of Penn Mezzanine.

The following table reflects 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. Our operating results, including net income (loss) before income taxes by segment, were as follows:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(In thousands)
Healthcare	$	(3,712	)	$	(4,742	)	$	(21,128	)	$	33,164
Technology	(2,966		)	(4,109		)	(8,344		)	(6,108		)
Total segments	(6,678		)	(8,851		)	(29,472		)	27,056
Other items:
Corporate operations	(4,950		)	(5,155		)	(15,781		)	(17,091		)
Income tax benefit (expense)	—			—			—			—
Total other items	(4,950		)	(5,155		)	(15,781		)	(17,091		)
Net income (loss)	$	(11,628	)	$	(14,006	)	$	(45,253	)	$	9,965

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 market.

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 September 30, 2015. Certain entities which may have been partner companies in previous periods are omitted if, as of September 30, 2015, they had been sold or are no longer considered a partner company.

18

Healthcare

The following active partner companies as of September 30, 2015 were included in Healthcare:

	Safeguard Primary Ownership as of September 30,
Partner Company	2015	2014	Accounting Method
AdvantEdge Healthcare Solutions, Inc.	40.1%	40.1%	Equity
Aventura, Inc.	19.9%	NA	Equity
Good Start Genetics, Inc.	29.8%	29.9%	Equity
InfoBionic, Inc.	38.5%	18.0%	Equity
Medivo, Inc.	34.5%	34.5%	Equity
meQuilibrium, Inc.	31.5%	NA	Equity
NovaSom, Inc.	31.7%	30.3%	Equity
Propeller Health, Inc.	24.6%	24.4%	Equity
Putney, Inc.	28.2%	28.3%	Equity
Syapse, Inc.	24.4%	27.0%	Equity
Trice Medical, Inc.	27.7%	31.9%	Equity

Results of operations for the Healthcare segment were as follows:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(In thousands)
Other income (loss), net	$	869		$	(8	)	$	558		$	31,823
Equity income (loss)	(4,581		)	(4,734		)	(21,686		)	1,341
Net income (loss)	$	(3,712	)	$	(4,742	)	$	(21,128	)	$	33,164

Three months ended September 30, 2015 versus the three months ended September 30, 2014

Other Income (Loss), Net. Other income (loss), net increased $0.9 million for the three months ended September 30, 2015, compared to the prior year period. Other income (loss), net for the three months ended September 30, 2015 reflected a $0.9 million gain on the release of proceeds from escrow associated with the February 2014 sale of former cost method partner company Crescendo Bioscience.

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 partner company or 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 income (loss) for the Healthcare segment increased $0.2 million for the three months ended September 30, 2015 compared to the prior year period. Equity income (loss) for the three months ended September 30, 2015 reflected a $1.7 million gain on the release of proceeds from escrow associated with the January 2014 sale of former equity method partner company Alverix. and a $0.5 million unrealized loss on the decrease of our percentage ownership in Syapse. The remaining change in equity income (loss) for the three months ended September 30, 2015 compared to the prior year period was due to an increase in the number of equity method parter companies and losses associated with those partner companies included in the Healthcare segment.

Nine months ended September 30, 2015 versus the nine months ended September 30, 2014

Other Income (Loss), Net. Other income (loss), net decreased $31.3 million for the nine months ended September 30, 2015, compared to the prior year period. Other income (loss), net for the nine months ended September 30, 2015 reflected a $2.9 million gain on the release of proceeds from escrow associated with the February 2014 sale of Crescendo Bioscience and an impairment charge of $2.3 million related to Dabo Health. Other income (loss), net for the nine months ended September 30, 2014 reflected gains of $27.4 million and $3.0 million on the sales of Crescendo Bioscience. and former fair value method

19

partner company NuPathe, respectively, in February 2014. Other income (loss), net for the nine months ended September 30, 2014 also reflected a gain of $1.5 million on the sale of former cost method partner company Sotera Wireless in April 2014.

Equity Income (Loss). Equity income (loss) for the Healthcare segment decreased $23.0 million for the nine months ended September 30, 2015 compared to the prior year period. Equity income (loss) for the nine months ended September 30, 2015 reflected impairment charges of $3.2 million and $2.9 million related to InfoBionic and Quantia, respectively, a $0.5 million unrealized loss on the decrease of our percentage ownership in Syapse and a $1.7 million gain on the release of proceeds from escrow associated with the January 2014 sale of Alverix. Equity income (loss) for the nine months ended September 30, 2014 reflected a gain of $15.7 million on the sale of Alverix. The remaining change in equity income (loss) for the nine months ended September 30, 2015 compared to the prior year period was due to an increase in the number of equity method partner companies and losses associated with those partner companies included in the Healthcare segment.

Technology

The following active partner companies as of September 30, 2015 were included in Technology:

	Safeguard Primary Ownership as of September 30,
Partner Company	2015	2014	Accounting Method
AppFirst, Inc.	34.2%	34.3%	Equity
Apprenda, Inc.	29.5%	21.6%	Equity
Beyond.com, Inc.	38.2%	38.2%	Equity
Bridgevine, Inc.	17.2%	17.2%	Cost
CloudMine, Inc.	30.1%	NA	Equity
Clutch Holdings, Inc.	39.3%	29.6%	Equity
Full Measure Education, Inc.	25.4%	NA	Equity
Hoopla Software, Inc.	25.6%	25.6%	Equity
QuanticMind, Inc. (formerly InsideVault, Inc.)	24.5%	NA	Equity
Lumesis, Inc.	44.7%	48.5%	Equity
MediaMath, Inc.	20.6%	20.5%	Equity
Pneuron Corporation	35.4%	27.6%	Equity
Sonobi, Inc.	22.6%	NA	Equity
Spongecell, Inc.	23.0%	23.0%	Equity
Transactis, Inc.	24.5%	24.8%	Equity
WebLinc, Inc.	29.2%	29.2%	Equity

Results of operations for the Technology segment were as follows:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(In thousands)
Equity loss	$	(2,966	)	$	(4,109	)	$	(8,344	)	$	(6,108	)
Net loss	$	(2,966	)	$	(4,109	)	$	(8,344	)	$	(6,108	)

Three months ended September 30, 2015 versus the three months ended September 30, 2014

Equity Loss. Equity 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 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 loss for the Technology segment decreased $1.1 million for the three months ended September 30, 2015, compared to the prior year period. Equity loss for the three months ended September 30, 2015 reflected a gain of $3.3 million associated with additional proceeds received upon the achievement of performance milestones related to the sale of former

20

equity method partner company Thingworx in December 2013. The remaining change in equity income (loss) for the three months ended September 30, 2015 compared to the prior year period was due to an increase in the number of equity method partner companies and losses associated with those partner companies included in the Technology segment.

Nine months ended September 30, 2015 versus the nine months ended September 30, 2014

Equity Loss. Equity loss for the Technology segment increased $2.2 million for the nine months ended September 30, 2015, compared to the prior year period. Equity loss for the nine months ended September 30, 2015 reflected a gain of $6.1 million on the sale of former equity method partner company DriveFactor in April 2015 and a gain of $3.3 million associated with the achievement of performance milestones related to the sale of Thingworx in December 2013. Equity loss for the nine months ended September 30, 2014 reflected a $7.0 million unrealized gain on the decrease of our percentage ownership in MediaMath, and a $0.3 million unrealized loss on the decrease of our percentage ownership in Bridgevine. The remaining change in equity loss for the nine months ended September 30, 2015 compared to the prior year period was due to an increase in the number of equity method partner companies and losses associated with those partner companies included in the Technology segment.

Corporate Operations

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(In thousands)
General and administrative expense	$	(3,798	)	$	(3,986	)	$	(12,406	)	$	(12,847	)
Stock-based compensation	(148		)	(176		)	(1,140		)	(1,583		)
Depreciation	(16		)	(15		)	(50		)	(55		)
Other loss, net	(165		)	(238		)	(257		)	(243		)
Interest income	398			482			1,487			1,494
Interest expense	(1,133		)	(1,103		)	(3,383		)	(3,295		)
Equity loss	(88		)	(119		)	(32		)	(562		)
	$	(4,950	)	$	(5,155	)	$	(15,781	)	$	(17,091	)

Corporate Operations includes interest earned on mezzanine loans, gain (loss) on the mark-to-market of our warrant participations, and impairment on debt and equity interests in which we participate with Penn Mezzanine as well as equity income (loss) associated with our interest in the management company and general partner of Penn Mezzanine. 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.

Three months ended September 30, 2015 versus the three months ended September 30, 2014

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 expense decreased $0.2 million for the three months ended September 30, 2015 compared to the prior year period due primarily to a decrease in professional service fees.

Stock-Based Compensation. Stock-based compensation consists primarily of expense related to stock option grants and grants of restricted stock and deferred stock units to our employees and directors. Stock-based compensation remained relatively consistent compared to the prior year period.

Interest Income. Interest income includes all interest earned on available cash and marketable security balances as well as interest earned on notes receivable from our partner companies. Interest income remained relatively consistent compared to the prior year period.

Interest Expense. Interest expense is primarily related to our convertible senior debentures.  Interest expense remained relatively consistent compared to the prior year period.

Equity Loss. Equity loss consists of our private equity holdings accounted for under the equity method. Equity loss remained relatively consistent compared to the prior year period.

21

Nine months ended September 30, 2015 versus the nine months ended September 30, 2014

General and Administrative Expense. General and administrative expense decreased $0.4 million for the nine months ended September 30, 2015 compared to the prior year period due primarily to a decrease in professional service fees.

Stock-Based Compensation. Stock-based compensation decreased $0.4 million when compared to the prior year period due to a decrease of $0.3 million and $0.1 million in expense related to performance-based awards and deferred stock units, respectively.

Interest Income. Interest income remained relatively consistent compared to the prior year period.

Interest Expense. Interest expense remained relatively consistent compared to the prior year period.

Equity Loss. Equity loss for the nine months ended September 30, 2015 included a $0.1 million gain on the receipt of a distribution from one of our private equity holdings and a loss of $0.1 million associated with our interest in the management company of Penn Mezzanine. Equity loss for the nine months ended September 30, 2014 included a loss of $0.6 million associated with our interest in the management company of Penn Mezzanine.

Income Tax Expense (Benefit)

Income tax benefit (expense) was $0.0 million for the three and nine months ended September 30, 2015 and 2014. 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 benefit of the net operating loss that would have been recognized in the three and nine months ended September 30, 2015 and the three months ended September 30, 2014 was offset by changes in the valuation allowance. The tax expense that would have been recognized in the nine months ended September 30, 2014 was also 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 September 30, 2015, we had $63.7 million of cash and cash equivalents and $40.5 million of marketable securities for a total of $104.2 million.

In July 2015, Quantia was acquired by Physicians Interactive. We received cash proceeds of $7.8 million, excluding $1.2 million which will be held in escrow until July 2016.

In April 2015, DriveFactor was acquired by CCC Information Services Inc. We received cash proceeds of $9.1 million, excluding $1.1 million which will be held in escrow until approximately April 2016.

In February 2014, Crescendo Bioscience was acquired by Myriad Genetics, Inc. We received $38.4 million in initial cash proceeds in connection with the transaction. In March 2015, we received $2.0 million which was initially released from escrow. In July 2015, we received the remaining $0.9 million which was released from escrow.

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 $15.7 million in initial cash proceeds in connection with the transaction. In July 2015, we received $1.7 million in connection with the expiration of the escrow period related to the sale.

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 2015. In July 2015, we received $3.3 million associated with the achievement of performance milestones related to the sale. Depending on the achievement of certain additional milestones, we may receive up to an additional $3.2 million in connection with the transaction.

We have outstanding $55.0 million in face amount of our 5.25% convertible senior debentures due 2018 (the "2018 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

22

after November 15, 2017. 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 per share of our common stock at September 30, 2015 was $15.54. 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.

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 $25.0 million in the form of borrowings, guarantees and issuances of letters of credit, subject to a $20.0 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 at the bank. The credit facility, as amended December 22, 2014, matures on December 21, 2015. We intend to renew or replace the existing credit facility prior to the maturity date. 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 September 30, 2015 was $18.7 million.

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 September 30, 2015. Our ownership in the fund is 19%. The clawback liability is joint and several, such that 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.

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.

For the reasons we have presented above, we believe our cash and cash equivalents at September 30, 2015, 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 interest payments, 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.

Analysis of Consolidated Cash Flows

Cash flow activity was as follows:

	Nine months ended September 30,
	2015			2014
	(In thousands)
Net cash used in operating activities	$	(14,086	)	$	(15,475	)
Net cash provided by (used in) investing activities	(33,031		)	17,706
Net cash used in financing activities	(1,072		)	(24,865		)
	$	(48,189	)	$	(22,634	)

Net Cash Used In Operating Activities

Net cash used in operating activities decreased by $1.4 million for the nine months ended September 30, 2015 compared to the prior year period. The decrease was related to $1.1 million of final payments associated with a transitional services agreement with our previous Chief Executive Officer in the prior year period and a decrease of $0.3 million in cash used for professional fees.

23

Net Cash Provided by (Used In) Investing Activities

Net cash provided by (used in) investing activities decreased by $50.7 million for the nine months ended September 30, 2015 compared to the prior year period. The decrease primarily related to a $56.6 million decrease in proceeds from the sales of and distributions from companies. Cash proceeds from the sales of and distributions from companies was $25.0 million for the nine months ended September 30, 2015 which related to the sale of our interests in DriveFactor and Quantia, cash received from escrow associated with the sale of our interests in Crescendo and Alverix, and cash received associated with the achievement of performance milestones related to the sale of our interest in Thingworx. Cash proceeds from the sales of and distributions from companies was $81.6 million for the nine months ended September 30, 2014 which related to the sales of our interests in Crescendo Bioscience, Alverix, NuPathe and Sotera Wireless. The decrease in cash provided by investing activities also related to a $4.2 million decrease in repayments of advances and loans to companies, an increase of $1.1 million in advances and loans to companies, and a $0.4 million increase in capital expenditures which were partially offset by a $8.8 million increase in cash proceeds from the net change in marketable securities and $2.8 million decrease in acquisitions of ownership interests in companies.

Net Cash Used In Financing Activities

Net cash used in financing activities decreased by $23.8 million for the nine months ended September 30, 2015 compared to the prior year period. The decrease primarily related to a decrease of $23.3 million in repurchases of our common stock and the repurchase of $0.4 million of our 2024 Debentures in the prior year period.

Contractual Cash Obligations and Other Commercial Commitments

The following table summarizes our contractual obligations and other commercial commitments as of September 30, 2015 by period due or expiration of the commitment.   

	Payments Due by Period
	Total		Remainder of 2015		2016 and 2017		2018 and 2019		Due after 2019
Contractual Cash Obligations:	(In millions)
Convertible senior debentures (a)	$	55.0	$	—	$	—	$	55.0	$	—
Interest payments on long-term debt	8.6		1.4		5.8		1.4		—
Operating leases (b)	6.0		—		1.0		1.2		3.8
Potential clawback liabilities (c)	1.3		—		1.0		0.3		—
Other long-term obligations (d)	3.1		0.2		1.6		1.3		—
Total Contractual Cash Obligations	$	74.0	$	1.6	$	9.4	$	59.2	$	3.8

	Amount of Commitment Expiration by  Period
	Total		Remainder of 2015		2016 and 2017		2018 and 2019		Due after 2019
Other Commitments:	(In millions)
Letters of credit (e)	$	6.3	$	—	$	—	$	6.3	$	—

(a) We have outstanding $55.0 million of our 5.25% convertible senior debentures due May 15, 2018.

(b) In February 2015, we entered into an agreement for the lease of our new principal executive offices beginning in November 2015 which will extend through April 2026.

(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 Sheet at September 30, 2015.

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

(e) A $6.3 million letter of credit expiring in March 2019 has been 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 $3.0 million at September 30, 2015.

24

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.

Factors That May Affect Future Results

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 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.

25

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

From time to time, we may hold equity interests in companies that are publicly traded. Fluctuations in the market prices of the common stock of publicly traded holdings may affect the price of our common stock. Historically, 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.

26

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 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.

27

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.

28

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.

29

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.

30

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 a limited number of loans and in equity securities in private middle-market companies, which involve a high degree of repayment risk. These borrowers have limited financial resources, are relatively highly leveraged and may be unable to obtain financing from other 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.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the risk factors we previously disclosed under Item 7A of Part II of our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 6, 2015.

Item 4.  Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of September 30, 2015 are functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 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 Chief Executive Officer and Chief 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.

(b) 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.

31

PART II

OTHER INFORMATION

Item  1.Legal Proceedings

None   

Item 1A.Risk Factors

There have been no material changes in our risk factors from the information set forth above under the heading “Factors That May Affect Future Results” and in our Annual Report on Form 10-K for the year ended December 31, 2014.

Item  2.Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about purchases of equity securities by the Company and affiliated purchasers of the Company, during the quarter ended September 30, 2015, which equity securities are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:

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)
July 1, 2015 - July 31, 2015 (b)	4,600	$	17.9742	1,000	$	24,982,205
August 1, 2015 - August 31, 2015 (c)	53,090	$	17.9001	51,200	$	24,066,831
September 1, 2015 - September 30, 2015	46,900	$	17.3196	46,900	$	23,254,544
Total	104,590	$	17.6434	99,100

(a) In July 2015, our Board of Directors authorized the Company to repurchase shares of its outstanding common stock with an aggregate value of up to $25 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.

(b) Included in this period are 3,600 shares that were open market purchases made at an average price per share of $18.0241 by an individual who may be considered an affiliated purchaser of the Company under Rule 10b-18 of the Exchange Act.

(c) Included in this period are 1,890 shares that were open market purchases made at an average price per share of $18.5111 by an individual who may be considered an affiliated purchaser of the Company under Rule 10b-18 of the Exchange Act.

Item  3.Defaults Upon Senior Securities

None

Item 4.Mine Safety Disclosures

Not applicable  

Item 5.Other Information

None

32

Item 6.  Exhibits

(a) Exhibits.

The following is a list of exhibits required by Item 601 of Regulation S-K to be filed as part of this Report. For exhibits that previously have been filed, the Registrant incorporates those exhibits herein by reference. Documents which are incorporated by reference to filings by parties other than the Registrant are identified in a footnote to this table.

Exhibit Number	Description
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.
101	The following materials from Safeguard Scientifics, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language); (i) Consolidated Balance Sheets (unaudited); (ii) Consolidated Statements of Operations (unaudited); (iii) Condensed Consolidated Statements of Cash Flows (unaudited); (iv) Consolidated Statement of Changes in Equity (unaudited); and (v) Notes to Consolidated Financial Statements (unaudited).

† Filed herewith

‡ Furnished herewith

33

SIGNATURES

Pursuant to the requirements 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.
Date:	October 23, 2015	/s/    Stephen T. Zarrilli
		Stephen T. Zarrilli
		President and Chief Executive Officer
Date:	October 23, 2015	/s/    Jeffrey B. McGroarty
		Jeffrey B. McGroarty
		Senior Vice President and Chief Financial Officer

34

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Stephen T. Zarrilli, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q 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:	October 23, 2015	/s/ Stephen T. Zarrilli
		Stephen T. Zarrilli
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Jeffrey B. McGroarty, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q 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:	October 23, 2015	/s/ Jeffrey B. McGroarty
		Jeffrey B. McGroarty
		Senior Vice President and Chief Financial 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 Quarterly Report of Safeguard Scientifics, Inc. (“Safeguard”) on Form 10-Q for the three and nine months endedSeptember 30, 2015 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:	October 23, 2015	/s/ Stephen T. Zarrilli
		Stephen T. Zarrilli
		President and Chief 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 Quarterly Report of Safeguard Scientifics, Inc. (“Safeguard”) on Form 10-Q for the three and nine months endedSeptember 30, 2015 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:	October 23, 2015	/s/ Jeffrey B. McGroarty
		Jeffrey B. McGroarty
		Senior Vice President and Chief Financial Officer

XML

Equity (Details) - USD ($) shares in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Jul. 01, 2015
Equity, Class of Treasury Stock [Line Items]
Stock repurchased during period, value		$ 1,748,000
Common Stock [Member]
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, authorized amount			$ 25,000,000.0
Repurchase of common stock (in shares)	0.1
Stock repurchased during period, value	$ 1,700,000

XML

Net Income (Loss) Per Share - Calculations of Net Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Basic:
Net income (loss)	$ (11,628)	$ (14,006)	$ (45,253)	$ 9,965
Weighted average common shares outstanding (in shares)	20,919	20,678	20,892	21,042
Net income (loss) per share (in dollars per share)	$ (0.56)	$ (0.68)	$ (2.17)	$ 0.47
Diluted:
Net income (loss) attributable to parent, diluted	$ (11,628)	$ (14,006)	$ (45,253)	$ 9,965
Number of shares used in basic per share computation (in shares)	20,919	20,678	20,892	21,042
Weighted average common shares outstanding (in shares)	20,919	20,678	20,892	21,418
Net income (loss) per share (in dollars per share)	$ (0.56)	$ (0.68)	$ (2.17)	$ 0.47
Restricted Stock Unit And Performance Stock Unit And Deferred Stock Unit [Member]
Diluted:
Stock options (in shares)	0	0	0	354
Employee stock options [Member]
Diluted:
Stock options (in shares)	0	0	0	22

XML

Acquisitions of Ownership Interests in Partner Companies and Funds (Detail) - USD ($) $ in Thousands	1 Months Ended							2 Months Ended		4 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Jul. 31, 2015	Jun. 30, 2015	May. 31, 2015	Apr. 30, 2015	Mar. 31, 2015	Feb. 28, 2015	Jan. 31, 2015	Apr. 30, 2015	Feb. 28, 2015	May. 31, 2015	Apr. 30, 2015	Jun. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments													$ 52,181	$ 54,956
Apprenda [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments	$ 10,000											$ 12,100
InfoBionic [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments	$ 1,500											8,000
Quantia [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments															$ 12,500
Convertible bridge loan												2,800
AppFirst, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments															8,600
Convertible bridge loan												$ 2,000
InsideVault [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments		$ 7,000
Ownership interest under equity method, percentage		24.50%										24.50%
Pneuron [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments			$ 3,500								$ 5,000
Clutch [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments							$ 7,500			$ 4,800
Sonobi [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments			$ 5,400
Ownership interest under equity method, percentage			22.60%							22.60%
Advantedge [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments									$ 15,300
Convertible bridge loan								$ 1,000
meQuilibrium [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments				$ 6,500
Ownership interest under equity method, percentage				31.50%				31.50%			31.50%
Spongecell [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments									10,000
Convertible bridge loan					$ 4,000
Dabo [Member]
Schedule of Equity Method Investments [Line Items]
Convertible bridge loan					$ 300
Payments to acquire cost method investments									$ 2,000
CloudMine [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments						$ 2,900
Ownership interest under equity method, percentage						30.10%			30.10%
Aventura [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments							$ 6,000
Ownership interest under equity method, percentage							19.90%
Full Measure [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments							$ 4,000
Ownership interest under equity method, percentage							25.40%
Trice [Member]
Schedule of Equity Method Investments [Line Items]
Payments to acquire equity method investments							$ 1,100								$ 5,000

XML

Operating Segments - Segment Data from Operations (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Segment Reporting Information [Line Items]
Operating loss	$ (3,962)	$ (4,177)	$ (13,596)	$ (14,485)
Other income (loss), net	704	(246)	301	31,580
Equity loss	(7,635)	(8,962)	(30,062)	(5,329)
Net income (loss)	(11,628)	(14,006)	(45,253)	9,965
Segment assets	275,153		275,153		$ 318,454
Total Segments
Segment Reporting Information [Line Items]
Operating loss	0	0	0	0
Other income (loss), net	869	(8)	558	31,823
Equity loss	(7,547)	(8,843)	(30,030)	(4,767)
Net income (loss)	(6,678)	(8,851)	(29,472)	27,056
Segment assets	159,908		159,908		150,700
Healthcare [Member]
Segment Reporting Information [Line Items]
Operating loss	0	0	0	0
Other income (loss), net	869	(8)	558	31,823
Equity loss	(4,581)	(4,734)	(21,686)	1,341
Net income (loss)	(3,712)	(4,742)	(21,128)	33,164
Segment assets	48,463		48,463		62,292
Technology [Member]
Segment Reporting Information [Line Items]
Operating loss	0	0	0	0
Other income (loss), net	0	0	0	0
Equity loss	(2,966)	(4,109)	(8,344)	(6,108)
Net income (loss)	(2,966)	(4,109)	(8,344)	(6,108)
Segment assets	111,445		111,445		88,408
Other Items [Member]
Segment Reporting Information [Line Items]
Operating loss	(3,962)	(4,177)	(13,596)	(14,485)
Other income (loss), net	(165)	(238)	(257)	(243)
Equity loss	(88)	(119)	(32)	(562)
Net income (loss)	(4,950)	$ (5,155)	(15,781)	$ (17,091)
Segment assets	$ 115,245		$ 115,245		$ 167,754

XML

Acquisitions of Ownership Interests in Partner Companies and Funds

9 Months Ended

Sep. 30, 2015

Equity Method Investments and Joint Ventures [Abstract]

Acquisitions of Ownership Interests in Partner Companies

Acquisitions of Ownership Interests in Partner Companies

In July 2015, the Company deployed an additional $10.0 million into Apprenda, Inc. The Company had previously deployed $12.1 million in Apprenda. Apprenda is an enterprise platform-as-a-service company powering the next generation of enterprise software development in public, private and hybrid clouds. The Company accounts for its interest in Apprenda under the equity method.

In July 2015, the Company deployed an additional $1.5 million into InfoBionic. The Company had previously deployed an aggregate of $8.0 million in InfoBionic. InfoBionic is an emerging digital health company focused on creating patient monitoring solutions for chronic disease management with an initial market focus on cardiac arrhythmias. The Company accounts for its interest in InfoBionic under the equity method.

During the six months ended June 30, 2015, the Company funded an aggregate of $2.8 million of convertible bridge loans to Quantia, Inc. The Company had previously deployed an aggregate of $12.5 million in Quantia. The Company accounted for its interest in Quantia under the equity method. In July 2015, Quantia was acquired by Physicians Interactive.

During the six months ended June 30, 2015, the Company funded an aggregate of $2.0 million of convertible bridge loans to AppFirst, Inc. The Company had previously deployed an aggregate of $8.6 million in AppFirst. AppFirst's technology provides global organizations the ability to achieve unmatched visibility into the real-time relationships between distributed applications and the global assets which support their execution. The Company accounts for its interest in AppFirst under the equity method.

In June 2015, the Company acquired a 24.5% interest in QuanticMind, Inc., formerly InsideVault, Inc., for $7.0 million. QuanticMind is a software-as-a-service company that provides enterprise-level predictive advertising management software for paid search, social and mobile. The Company accounts for its interest in QuanticMind under the equity method.

In May 2015, the Company deployed an additional $3.5 million into Pneuron Corporation. The Company had previously deployed $5.0 million in Pneuron. Pneuron enables organizations to rapidly solve business problems through a distributed approach that cuts across data, applications and processes. The Company accounts for its interest in Pneuron under the equity method.

In May and February 2015, the Company deployed an aggregate of $4.8 million into Clutch Holdings, Inc. ("Clutch"). The Company had previously deployed an aggregate of $7.5 million in Clutch. Clutch provides consumer management technology that delivers customer intelligence and consumer engagement solutions to premium brands. The Company accounts for its interest in Clutch under the equity method.

In May 2015, the Company acquired a 22.6% interest in Sonobi, Inc. for $5.4 million. Sonobi is an advertising technology developer that creates data-driven tools and solutions to meet the evolving needs of demand- and sell-side organizations within the digital media marketplace. The Company accounts for its interest in Sonobi under the equity method.

In April and March 2015, the Company funded an aggregate $1.0 million convertible bridge loan to AdvantEdge Healthcare Solutions, Inc. ("AdvantEdge"). The Company had previously deployed an aggregate of $15.3 million in AdvantEdge. AdvantEdge is a provider of physician billing and practice management services and software to hospital-based physician groups, large office-based physician practices, and ambulatory surgery centers. The Company accounts for its interest in AdvantEdge under the equity method.

In April 2015, the Company acquired a 31.5% interest in meQuilibrium for $6.5 million. meQuilibrium offers an individualized, online stress management program based on building resilience, defined as the capacity to rebound or bounce back from adversity, conflict, failure and also positive events, progress and increased responsibility. The Company accounts for its interest in meQuilibrium under the equity method.

In March 2015, the Company funded $4.0 million of a convertible bridge loan to Spongecell, Inc. The Company had previously deployed $10.0 million in Spongecell. Spongecell is a programmatic creative solution that leverages data-driven technology to automate the production and delivery of high-quality ads at scale across display, mobile and video. The Company accounts for its interest in Spongecell under the equity method.

In March 2015, the Company deployed an additional $0.3 million into Dabo Health. The Company had previously deployed $2.0 million in Dabo Health. The Company impaired all of the carrying value of Dabo Health in the first quarter of 2015. The Company accounted for its interest in Dabo Health under the cost method.

In February 2015, the Company acquired a 30.1% interest in CloudMine, Inc. for $2.9 million. CloudMine is an enterprise mobility company that provides a HIPAA-compliant managed mobility solution to accelerate development, eliminate maintenance and standardize cross-organizational mobile IT. The Company accounts for its interest in CloudMine under the equity method.

In January 2015, the Company acquired a 19.9% interest in Aventura, Inc. for $6.0 million. Aventura is a leader in healthcare workflow optimization software solutions. The Company accounts for its interest in Aventura under the equity method.

In January 2015, the Company acquired a 25.4% interest in Full Measure Education, Inc. ("Full Measure") for $4.0 million. Full Measure enables student success through a comprehensive technology-based communications platform. The Company accounts for its interest in Full Measure under the equity method.

In January 2015, the Company deployed an additional $1.1 million into Trice Medical, Inc. The Company had previously deployed an aggregate of $5.0 million in Trice Medical. Trice Medical is a diagnostics company focused on micro invasive technologies. The Company accounts for its interest in Trice Medical under the equity method.

XML

Convertible Debentures and Credit Arrangements - Credit Arrangements Narrative (Detail) - Credit Arrangements [Member]	9 Months Ended
	Sep. 30, 2015 USD ($)
Debt Instrument [Line Items]
Maximum aggregate amount of revolving credit facility in the form of borrowings, guarantees and issuances of letters of credit (subject to a $20 million sublimit)	$ 25,000,000.0
Sublimit facility attached on revolving credit facility	20,000,000
Amount available for borrowing under revolving credit facility	$ 18,700,000
After Amendment [Member]
Debt Instrument [Line Items]
Credit facility maturity date	Dec. 21, 2015
Landlord Of Compu Com Systems Incs Dallas Headquarters [Member]
Debt Instrument [Line Items]
Letter of credit under the credit facility	$ 6,300,000
Letter of credit expiration date	Mar. 19, 2019

XML

Convertible Debentures and Credit Arrangements - Convertible Senior Debentures Narrative (Detail) - Convertible Senior Debentures due 2018 [Member] - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Nov. 30, 2012
Debt Instrument [Line Items]
Aggregate face value of convertible senior debentures	$ 55,000,000		$ 55,000,000.0
Interest rate on debentures			5.25%
Fair value of debentures outstanding	62,600,000
Gross carrying amount of equity component	6,400,000
Unamortized discount	3,600,000
Carrying value of liability component	51,400,000
Amortization of debt discount (premium)	$ 900,000	$ 800,000
Debt instrument, interest rate, effective percentage	8.70%

XML

Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 148	$ 176	$ 1,140	$ 1,583
General And Administrative Expenses [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 148	$ 176	$ 1,140	$ 1,583

XML

Stock-Based Compensation - Narrative (Detail) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($) vesting_type	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) vesting_type yr shares	Sep. 30, 2014 USD ($) shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of award vesting types | vesting_type	3		3
Cash Liability for Performance-Based Units | $	$ 0.0		$ 0.0
Performance Shares [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense | $	0.0	$ 0.0	$ 0.0	$ 0.1
Stock-based compensation, maximum number of unvested shares			453,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares				7,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period			8,000	16,000
Market Based Awards [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense | $		0.0		$ 0.0
Stock-based compensation, maximum number of unvested shares			136,000
Vesting period			8 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares				22,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period			91,000	107,000
Service Based Award [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense | $	0.1	0.1	$ 0.2	$ 0.3
Vesting period			4 years
Expiration period			8 years
Options issued			21,000	5,000
Deferred Stock Units [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
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
Minimum age required for meeting directors fees deferred vest criteria | yr			65
Deferred Stock Units [Member] | Director [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued to non-employee individual			41,000	45,000
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 | $	$ 0.1	$ 0.1	$ 1.0	$ 1.2
Vesting period			4 years

XML

Ownership Interests in and Advances to Partner Companies and Funds

9 Months Ended

Sep. 30, 2015

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

Ownership Interests in and Advances to Partner Companies

Ownership Interests in and Advances to Partner Companies

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

	September 30, 2015		December 31, 2014
	(Unaudited - In thousands)
Equity Method:
Partner companies	$	143,906	$	134,861
Private equity funds	1,030		1,128
	144,936		135,989
Cost Method:
Partner companies	5,024		6,774
Private equity funds	2,050		2,364
	7,074		9,138
Advances to partner companies	10,978		9,065
	$	162,988	$	154,192

In January 2014, Alverix, Inc., formerly an equity method partner company, was acquired by Becton, Dickinson and Company. The Company received $15.7 million in initial cash proceeds in connection with the transaction. The Company recognized a gain of $15.7 million on the transaction, which is included in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2014. In July 2015, the Company received an additional $1.7 million in connection with the expiration of the escrow period, resulting in a gain of $1.7 million which is included in Equity income (loss), net in the Consolidated Statements of Operations for the three and nine months ended September 30 , 2015.

In December 2013, ThingWorx, Inc., formerly an equity method partner company, was acquired by PTC Inc. The Company received $36.4 million in initial cash proceeds in connection with the transaction excluding $4.1 million which will be held in escrow until December 2015. In July 2015, the Company received an additional $3.3 million associated with the achievement of performance milestones, resulting in a gain of $3.3 million which is included in Equity income (loss), net in the Consolidated Statements of Operations for the three and nine months ended September 30, 2015. Depending on the achievement of certain additional milestones, the Company may receive up to an additional $3.2 million in connection with the transaction.

In February 2014, Crescendo Bioscience, Inc., formerly a cost method partner company, was acquired by Myriad Genetics, Inc. The Company received $38.4 million in initial cash proceeds in connection with the transaction. The Company recognized a gain of $27.4 million on the transaction, which is included in Other income (loss), net in the Consolidated Statements of Operations for the nine months ended September 30, 2014. In March 2015, the Company received $2.0 million which was released from escrow resulting in a gain of $2.0 million which is included in Other income (loss), net in the Consolidated Statements of Operations for the nine months ended September 30, 2015. In July 2015, the Company received the remaining $0.9 million which was released from escrow resulting in a gain of $0.9 million which is included in Other income (loss), net in the Consolidated Statements of Operations for the three and nine months ended September 30, 2015.

In July 2015, Quantia, Inc., formerly an equity method partner company, was acquired by Physicians Interactive. The Company received cash proceeds of $7.8 million in connection with the transaction, excluding $1.2 million which will be held in escrow until July 2016. The Company recognized an impairment charge of $2.9 million in the second quarter of 2015 which is reflected in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2015. The impairment was based on the difference between the Company's carrying value in Quantia and the initial net proceeds received.

In April 2015, DriveFactor, Inc., formerly an equity method partner company, was acquired by CCC Information Services Inc. The Company received cash proceeds of $9.1 million, excluding $1.1 million which will be held in escrow until approximately April 2016. The Company recognized a gain of $6.1 million on the transaction, which is included in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2015.

The Company recognized an impairment charge of $3.2 million in the second quarter of 2015 related to InfoBionic, Inc. which is reflected in Equity income (loss) in the Consolidated Statements of Operations for the nine months ended September 30, 2015. The impairment was due to discontinuation of InfoBionic's first-generation product. The amount of the impairment was determined based on the value at which InfoBionic raised additional equity financing in July 2015 from the Company and other existing capital providers. Proceeds from the financing will be used for development and commercialization of the second-generation product.

The Company recognized an impairment charge of $2.3 million in the first quarter of 2015 related to Dabo Health, Inc. which is reflected in Other income (loss), net in the Consolidated Statements of Operations for the nine months ended September 30, 2015. The impairment was based on the decision of the Company and other shareholders not to continue to fund Dabo Health's operations. The Company believes it is unlikely it will recover any of its capital.

XML

Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Tax Disclosure [Abstract]
Income tax benefit (expense)	$ 0	$ 0	$ 0	$ 0

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 63,708	$ 111,897
Marketable securities	29,760	25,263
Prepaid expenses and other current assets	2,011	1,684
Total current assets	95,479	138,844
Property and equipment, net	1,438	123
Ownership interests in and advances to partner companies	162,988	154,192
Loan participations receivable	2,640	3,855
Long-term marketable securities	10,705	19,365
Other assets	1,903	2,075
Total Assets	275,153	318,454
Current Liabilities:
Accounts payable	253	226
Accrued compensation and benefits	3,137	3,997
Accrued expenses and other current liabilities	3,644	2,334
Total current liabilities	7,034	6,557
Other long-term liabilities	3,928	3,507
Convertible senior debentures	51,441	50,563
Total Liabilities	$ 62,403	$ 60,627
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; 21,573 shares issued at September 30, 2015 and December 31, 2014	2,157	2,157
Additional paid-in capital	818,671	819,757
Treasury stock, at cost; 877 and 921 shares at September 30, 2015 and December 31, 2014, respectively	(18,079)	(19,341)
Accumulated deficit	(589,999)	(544,746)
Total Equity	212,750	257,827
Total Liabilities and Equity	$ 275,153	$ 318,454

XML

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - 9 months ended Sep. 30, 2015 - USD ($) shares in Thousands, $ in Thousands	Total	Accumulated Deficit [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]
Balance at Dec. 31, 2014	$ 257,827	$ (544,746)	$ 2,157	$ 819,757	$ (19,341)
Balance (in shares) at Dec. 31, 2014			21,573
Balance (in shares) at Dec. 31, 2014					921
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(45,253)	(45,253)
Stock options exercised, net	676			(1,051)	$ 1,727
Stock options exercised, net (in shares)					(83)
Repurchase of common stock	(1,748)				$ (1,748)
Repurchase of common stock (in shares)					99
Issuance of restricted stock, net	108			(1,175)	$ 1,283
Issuance of restricted stock, net (in shares)					(60)
Stock-based compensation expense	1,140			1,140
Balance at Sep. 30, 2015	$ 212,750	$ (589,999)	$ 2,157	$ 818,671	$ (18,079)
Balance (in shares) at Sep. 30, 2015			21,573
Balance (in shares) at Sep. 30, 2015					877

XML

Operating Segments - Narrative (Detail) $ in Millions	Sep. 30, 2015 USD ($) nonconsolidated_partner_company	Dec. 31, 2014 USD ($)
Segment Reporting Information [Line Items]
Non-consolidated partner companies | nonconsolidated_partner_company	27
Other Items [Member]
Segment Reporting Information [Line Items]
Total assets included cash, cash equivalents, cash held in escrow, and marketable securities	$ 104.2	$ 156.5

XML

Operating Segments (Tables)

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Active Partner Companies by Segment

The Company’s active partner companies by segment were as follows as of September 30, 2015:

Healthcare
Partner Company	Safeguard Primary Ownership as of September 30, 2015	Accounting Method
AdvantEdge Healthcare Solutions, Inc.	40.1%	Equity
Aventura, Inc.	19.9%	Equity
Good Start Genetics, Inc.	29.8%	Equity
InfoBionic, Inc.	38.5%	Equity
Medivo, Inc.	34.5%	Equity
meQuilibrium, Inc.	31.5%	Equity
NovaSom, Inc.	31.7%	Equity
Propeller Health, Inc.	24.6%	Equity
Putney, Inc.	28.2%	Equity
Syapse, Inc.	24.4%	Equity
Trice Medical, Inc.	27.7%	Equity

Technology
Partner Company	Safeguard Primary Ownership as of September 30, 2015	Accounting Method
AppFirst, Inc.	34.2%	Equity
Apprenda, Inc.	29.5%	Equity
Beyond.com, Inc.	38.2%	Equity
Bridgevine, Inc.	17.2%	Cost
CloudMine, Inc.	30.1%	Equity
Clutch Holdings, Inc.	39.3%	Equity
Full Measure Education, Inc.	25.4%	Equity
Hoopla Software, Inc.	25.6%	Equity
QuanticMind, Inc. (formerly InsideVault, Inc.)	24.5%	Equity
Lumesis, Inc.	44.7%	Equity
MediaMath, Inc.	20.6%	Equity
Pneuron Corporation	35.4%	Equity
Sonobi, Inc.	22.6%	Equity
Spongecell, Inc.	23.0%	Equity
Transactis, Inc.	24.5%	Equity
WebLinc, Inc.	29.2%	Equity

Segment Data from Operations

	Three months ended September 30, 2015
	Healthcare			Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	—		$	(3,962	)	$	(3,962	)
Other income (loss), net	869			—			869			(165		)	704
Equity loss	(4,581		)	(2,966		)	(7,547		)	(88		)	(7,635		)
Net loss	(3,712		)	(2,966		)	(6,678		)	(4,950		)	(11,628		)
Segment Assets:
September 30, 2015	48,463			111,445			159,908			115,245			275,153
December 31, 2014	62,292			88,408			150,700			167,754			318,454

	Three months ended September 30, 2014
	Healthcare			Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	—		$	(4,177	)	$	(4,177	)
Other loss, net	(8		)	—			(8		)	(238		)	(246		)
Equity loss	(4,734		)	(4,109		)	(8,843		)	(119		)	(8,962		)
Net loss	(4,742		)	(4,109		)	(8,851		)	(5,155		)	(14,006		)

	Nine months ended September 30, 2015
	Healthcare			Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	—		$	(13,596	)	$	(13,596	)
Other income (loss), net	558			—			558			(257		)	301
Equity loss	(21,686		)	(8,344		)	(30,030		)	(32		)	(30,062		)
Net loss	(21,128		)	(8,344		)	(29,472		)	(15,781		)	(45,253		)

	Nine months ended September 30, 2014
	Healthcare		Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—	$	—		$	—		$	(14,485	)	$	(14,485	)
Other income (loss), net	31,823		—			31,823			(243		)	31,580
Equity income (loss)	1,341		(6,108		)	(4,767		)	(562		)	(5,329		)
Net income (loss)	33,164		(6,108		)	27,056			(17,091		)	9,965

XML

Operating Segments - Active Partner Companies by Segment (Detail)	Sep. 30, 2015	Jun. 30, 2015	May. 31, 2015	Apr. 30, 2015	Feb. 28, 2015	Jan. 31, 2015
Aventura [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage						19.90%
meQuilibrium [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage				31.50%
CloudMine [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage					30.10%
Full Measure [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage						25.40%
InsideVault [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage		24.50%
Sonobi [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage			22.60%
Healthcare [Member] | AdvantEdge Healthcare Solutions, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	40.10%
Healthcare [Member] | Aventura [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	19.90%
Healthcare [Member] | Good Start Genetics, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	29.80%
Healthcare [Member] | InfoBionic [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	38.50%
Healthcare [Member] | Medivo, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	34.50%
Healthcare [Member] | meQuilibrium [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	31.50%
Healthcare [Member] | Novasom, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	31.70%
Healthcare [Member] | Propeller [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	24.60%
Healthcare [Member] | Putney, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	28.20%
Healthcare [Member] | Syapse, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	24.40%
Healthcare [Member] | Trice [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	27.70%
Technology [Member] | AppFirst, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	34.20%
Technology [Member] | Apprenda [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	29.50%
Technology [Member] | Beyond.com, Inc [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	38.20%
Technology [Member] | Bridgevine, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under cost method, percentage	17.20%
Technology [Member] | CloudMine [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	30.10%
Technology [Member] | Clutch Holdings, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	39.30%
Technology [Member] | Full Measure [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	25.40%
Technology [Member] | Hoopla Software, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	25.60%
Technology [Member] | InsideVault [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	24.50%
Technology [Member] | Lumesis, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	44.70%
Technology [Member] | MediaMath, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	20.60%
Technology [Member] | Pneuron [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	35.40%
Technology [Member] | Sonobi [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	22.60%
Technology [Member] | Spongecell, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	23.00%
Technology [Member] | Transactis [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	24.50%
Technology [Member] | WebLinc [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest under equity method, percentage	29.20%

XML

Ownership Interests in and Advances to Partner Companies and Funds - Narrative (Detail) - USD ($) $ in Thousands	1 Months Ended						3 Months Ended			9 Months Ended
	Jul. 31, 2015	Apr. 30, 2015	Mar. 31, 2015	Feb. 28, 2014	Jan. 31, 2014	Dec. 31, 2013	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Sep. 30, 2015	Sep. 30, 2014
Investment [Line Items]
Proceeds from sale of business										$ 25,029	$ 81,626
Alverix, Inc. [Member]
Investment [Line Items]
Proceeds from sale of business					$ 15,700
Gain on sale of business	$ 1,700				$ 15,700
Alverix [Member]
Investment [Line Items]
Proceeds from sale of business	1,700
Thing Worx Inc [Member]
Investment [Line Items]
Proceeds from sale of business	3,300					$ 36,400
Gain on sale of business	3,300
Amount held in escrow							$ 4,100			4,100
Proceeds from milestone payments							3,200
Crescendo Bioscience, Inc. [Member]
Investment [Line Items]
Proceeds from sale of business	900		$ 2,000	$ 38,400
Gain on sale of business	900		$ 2,000
Realized gains on cost method investment				$ 27,400
Quantia [Member]
Investment [Line Items]
Proceeds from sale of business	$ 7,800
Amount held in escrow							1,200			1,200
Asset impairment charges								$ 2,900
Drive Factor [Member]
Investment [Line Items]
Proceeds from sale of business		$ 9,100
Gain on sale of business		$ 6,100
Amount held in escrow							$ 1,100			$ 1,100
InfoBionic [Member]
Investment [Line Items]
Asset impairment charges								$ 3,200
Dabo [Member]
Investment [Line Items]
Asset impairment charges									$ 2,300

XML

General

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

The accompanying unaudited interim Consolidated Financial Statements of Safeguard Scientifics, Inc. (“Safeguard” or the “Company”) were prepared in accordance with accounting principles generally accepted in the United States of America and the interim financial statement rules and regulations of the SEC. In the opinion of management, these statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the Consolidated Financial Statements. The interim operating results are not necessarily indicative of the results for a full year or for any interim period. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. The Consolidated Financial Statements included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Form 10-Q and with the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s 2014 Annual Report on Form 10-K.

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.10	$ 0.10
Preferred stock, shares authorized	1,000	1,000
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	83,333	83,333
Common stock, shares issued	21,573	21,573
Treasury stock	877	921

XML

Equity

9 Months Ended

Sep. 30, 2015

Equity [Abstract]

Equity

Equity

In July 2015, the Company's Board of Directors authorized the Company, from time to time and depending on market conditions, to repurchase up to $25.0 million of the Company's outstanding common stock. During the third quarter of 2015, the Company repurchased 0.1 million shares at an aggregate cost of $1.7 million.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 21, 2015
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-Q
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		20,649,671
Trading Symbol	SFE

XML

Ownership Interests in and Advances to Partner Companies and Funds (Tables)

9 Months Ended

Sep. 30, 2015

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

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.

	September 30, 2015		December 31, 2014
	(Unaudited - In thousands)
Equity Method:
Partner companies	$	143,906	$	134,861
Private equity funds	1,030		1,128
	144,936		135,989
Cost Method:
Partner companies	5,024		6,774
Private equity funds	2,050		2,364
	7,074		9,138
Advances to partner companies	10,978		9,065
	$	162,988	$	154,192

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
General and administrative expense	$ 3,962	$ 4,177	$ 13,596	$ 14,485
Operating loss	(3,962)	(4,177)	(13,596)	(14,485)
Other income (loss), net	704	(246)	301	31,580
Interest income	398	482	1,487	1,494
Interest expense	(1,133)	(1,103)	(3,383)	(3,295)
Equity loss	(7,635)	(8,962)	(30,062)	(5,329)
Net income (loss) before income taxes	(11,628)	(14,006)	(45,253)	9,965
Income tax benefit (expense)	0	0	0	0
Net loss	$ (11,628)	$ (14,006)	$ (45,253)	$ 9,965
Net income (loss) per share:
Basic (in dollars per share)	$ (0.56)	$ (0.68)	$ (2.17)	$ 0.47
Diluted (in dollars per share)	$ (0.56)	$ (0.68)	$ (2.17)	$ 0.47
Weighted average shares used in computing income (loss) per share :
Basic (in shares)	20,919	20,678	20,892	21,042
Diluted (in shares)	20,919	20,678	20,892	21,418

XML

Stock-Based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

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

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(Unaudited - In thousands)
General and administrative expense	$	148	$	176	$	1,140	$	1,583
	$	148	$	176	$	1,140	$	1,583

The fair value of the Company’s option awards to employees was estimated at the date of grant using the Black-Scholes option-pricing model. The risk-free rate was 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.

At September 30, 2015, the Company had outstanding options that vest based on three different types of vesting schedules:

1)	performance-based;
2)	market-based; and
3)	service-based.

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 on 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 nine months ended September 30, 2015 and 2014, the Company did not issue any performance-based options to employees. During the nine months ended September 30, 2014, 7 thousand performance-based options vested. During the nine months ended September 30, 2015 and 2014, 8 thousand and 16 thousand performance-based options, respectively, were canceled or forfeited. The Company recorded compensation expense related to performance-based options of $0.0 million for both the three months ended September 30, 2015 and 2014, and $0.0 million and $0.1 million for the nine months ended September 30, 2015 and 2014, respectively. The maximum number of unvested shares at September 30, 2015 attainable under these option grants was 453 thousand shares.

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. During the nine months ended September 30, 2014, 22 thousand market-based options vested. During the nine months ended September 30, 2015 and 2014, 91 thousand and 107 thousand market-based options, respectively, were canceled or forfeited. The Company recorded compensation expense related to market-based options of $0.0 million for both the three and nine months ended September 30, 2014. The Company recognized all remaining compensation cost related to market-based options in 2014. Depending on the Company’s stock performance, the maximum number of unvested shares at September 30, 2015 attainable under these option grants was 136 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 nine months ended September 30, 2015 and 2014, the Company issued 21 thousand and 5 thousand service-based options, respectively, to employees. The Company recorded compensation expense related to service-based options of $0.1 million for both the three months ended September 30, 2015 and 2014, and $0.2 million and $0.3 million for the nine months ended September 30, 2015 and 2014, respectively.

Performance-based stock units 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 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 nine months ended September 30, 2015 and 2014, the Company did not issue any performance-based stock units to employees. During the nine months ended September 30, 2015 and 2014, no performance-based stock units vested.

Under the 2014 performance-based award plan, once performance-based stock units are fully vested, participants are entitled to receive cash payments based on their initial performance grant values as target capital returns described above are exceeded. At September 30, 2015, the liability associated with such potential cash payments was $0.0 million.

During the nine months ended September 30, 2015 and 2014, the Company issued 41 thousand and 45 thousand deferred stock units, respectively, 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.

All other awards are restricted stock awards that generally vest over four years. During the nine months ended September 30, 2015 and 2014, the Company did not issue any restricted stock awards.

Total compensation expense for deferred stock units, performance-based stock units and restricted stock was approximately $0.1 million for the three months ended September 30, 2015 and 2014, and $1.0 million and $1.2 million for the nine months ended September 30, 2015 and 2014, respectively.

XML

Convertible Debentures and Credit Arrangements

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Convertible Debentures and Credit Arrangements

Convertible Debentures and Credit Arrangements

Convertible Senior Debentures

In November 2012, the Company issued $55.0 million principal amount of its 5.25% convertible senior debentures due 2018 (the "2018 Debentures"). The 2018 Debentures may be settled in cash or partially in cash upon conversion. Accordingly, 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 September 30, 2015, the fair value of the $55.0 million outstanding 2018 Debentures was approximately $62.6 million, based on the midpoint of the bid and ask prices as of such date. At September 30, 2015, 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 $3.6 million and the net carrying value of the liability component was $51.4 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 $0.9 million and $0.8 million of such expense for the nine months ended September 30, 2015 and 2014, respectively. The effective interest rate on the 2018 Debentures is 8.7%.

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 $25.0 million in the form of borrowings, guarantees and issuances of letters of credit, subject to a $20.0 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 at the bank. The credit facility, as amended December 22, 2014, matures on December 21, 2015. 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 was required in connection with the sale of CompuCom Systems in 2004. Availability under the Company’s revolving credit facility at September 30, 2015 was $18.7 million.

XML

Ownership Interests in and Advances to Partner Companies and Funds - Carrying Value (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Investments In And Advances To Affiliates [Line Items]
Equity method investments	$ 144,936	$ 135,989
Cost method investments	7,074	9,138
Advances to partner companies	10,978	9,065
Ownership interests in and advances to partner companies and funds ($19,363 and $20,972 at fair value at June 30,2013 and December 31,2012, respectively)	162,988	154,192
Partner companies [Member]
Investments In And Advances To Affiliates [Line Items]
Equity method investments	143,906	134,861
Cost method investments	5,024	6,774
Private equity funds [Member]
Investments In And Advances To Affiliates [Line Items]
Equity method investments	1,030	1,128
Cost method investments	$ 2,050	$ 2,364

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2015

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 September 30, 2015 and December 31, 2014:

	Carrying Value		Fair Value Measurement at September 30, 2015
			Level 1		Level 2		Level 3
	(Unaudited - In thousands)
Cash and cash equivalents	$	63,708	$	63,708	$	—	$	—
Marketable securities—held-to-maturity:
Certificates of deposit	$	40,465	$	40,465	$	—	$	—
Total marketable securities	$	40,465	$	40,465	$	—	$	—

	Carrying Value		Fair Value Measurement at December 31, 2014
			Level 1		Level 2		Level 3
	(Unaudited - In thousands)
Cash and cash equivalents	$	111,897	$	111,897	$	—	$	—
Marketable securities—held-to-maturity:
Commercial paper	$	6,596	$	6,596	$	—	$	—
U.S. treasury bills	1,503		1,503		—		—
Government agency bonds	503		503		—		—
Certificates of deposit	36,026		36,026		—		—
Total marketable securities	$	44,628	$	44,628	$	—	$	—

XML

Operating Segments

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Operating Segments

Operating Segments

As of September 30, 2015, the Company held interests in 27 non-consolidated partner companies which are included in the Healthcare and Technology segments. The Company’s active partner companies by segment were as follows as of September 30, 2015:

Healthcare
Partner Company	Safeguard Primary Ownership as of September 30, 2015	Accounting Method
AdvantEdge Healthcare Solutions, Inc.	40.1%	Equity
Aventura, Inc.	19.9%	Equity
Good Start Genetics, Inc.	29.8%	Equity
InfoBionic, Inc.	38.5%	Equity
Medivo, Inc.	34.5%	Equity
meQuilibrium, Inc.	31.5%	Equity
NovaSom, Inc.	31.7%	Equity
Propeller Health, Inc.	24.6%	Equity
Putney, Inc.	28.2%	Equity
Syapse, Inc.	24.4%	Equity
Trice Medical, Inc.	27.7%	Equity

Technology
Partner Company	Safeguard Primary Ownership as of September 30, 2015	Accounting Method
AppFirst, Inc.	34.2%	Equity
Apprenda, Inc.	29.5%	Equity
Beyond.com, Inc.	38.2%	Equity
Bridgevine, Inc.	17.2%	Cost
CloudMine, Inc.	30.1%	Equity
Clutch Holdings, Inc.	39.3%	Equity
Full Measure Education, Inc.	25.4%	Equity
Hoopla Software, Inc.	25.6%	Equity
QuanticMind, Inc. (formerly InsideVault, Inc.)	24.5%	Equity
Lumesis, Inc.	44.7%	Equity
MediaMath, Inc.	20.6%	Equity
Pneuron Corporation	35.4%	Equity
Sonobi, Inc.	22.6%	Equity
Spongecell, Inc.	23.0%	Equity
Transactis, Inc.	24.5%	Equity
WebLinc, Inc.	29.2%	Equity

Results of the Healthcare and Technology segments reflect the equity income (loss) of their respective equity method partner companies, other income (loss) associated with cost method partner companies and the gains or losses on the sale of the interests in their respective partner companies.

Management evaluates the Healthcare and Technology segments’ performance based on net income (loss) which is impacted by 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, any impairment charges and gain (loss) on the sale of the interests in equity and cost method partner companies.

Other Items include certain expenses which are not identifiable to the operations of the Company’s operating 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 and other income (loss), equity income (loss) related to certain private equity fund ownership interests and income taxes. Other Items also include interest earned on mezzanine loans, gain (loss) on the mark-to-market of our warrant participations, and impairment on debt and equity participation interests in which the Company participates with Penn Mezzanine as well as equity income (loss) associated with the Company's interest in the management company and general partner of Penn Mezzanine.

As of September 30, 2015 and December 31, 2014, all of the Company’s assets were located in the United States.

Segment assets in Other Items included primarily cash, cash equivalents, and marketable securities totaling $104.2 million and $156.5 million at September 30, 2015 and December 31, 2014, respectively.

	Three months ended September 30, 2015
	Healthcare			Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	—		$	(3,962	)	$	(3,962	)
Other income (loss), net	869			—			869			(165		)	704
Equity loss	(4,581		)	(2,966		)	(7,547		)	(88		)	(7,635		)
Net loss	(3,712		)	(2,966		)	(6,678		)	(4,950		)	(11,628		)
Segment Assets:
September 30, 2015	48,463			111,445			159,908			115,245			275,153
December 31, 2014	62,292			88,408			150,700			167,754			318,454

	Three months ended September 30, 2014
	Healthcare			Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	—		$	(4,177	)	$	(4,177	)
Other loss, net	(8		)	—			(8		)	(238		)	(246		)
Equity loss	(4,734		)	(4,109		)	(8,843		)	(119		)	(8,962		)
Net loss	(4,742		)	(4,109		)	(8,851		)	(5,155		)	(14,006		)

	Nine months ended September 30, 2015
	Healthcare			Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	—		$	(13,596	)	$	(13,596	)
Other income (loss), net	558			—			558			(257		)	301
Equity loss	(21,686		)	(8,344		)	(30,030		)	(32		)	(30,062		)
Net loss	(21,128		)	(8,344		)	(29,472		)	(15,781		)	(45,253		)

	Nine months ended September 30, 2014
	Healthcare		Technology			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—	$	—		$	—		$	(14,485	)	$	(14,485	)
Other income (loss), net	31,823		—			31,823			(243		)	31,580
Equity income (loss)	1,341		(6,108		)	(4,767		)	(562		)	(5,329		)
Net income (loss)	33,164		(6,108		)	27,056			(17,091		)	9,965

XML

Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s consolidated income tax benefit (expense) was $0.0 million for the three and nine months ended September 30, 2015 and 2014. The Company has recorded a valuation allowance to reduce its net deferred tax asset to an amount that is more likely than not to be realized in future years. Accordingly, the benefit of the net operating loss that would have been recognized in the three and nine months ended September 30, 2015 and the three months ended September 30, 2014 was offset by changes in the valuation allowance. The tax expense that would have been recognized in the nine months ended September 30, 2014 was also offset by changes in the valuation allowance. During the nine months ended September 30, 2015, the Company had no material changes in uncertain tax positions.

XML

Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

Net Income (Loss) Per Share

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

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(Unaudited - In thousands, except per share data)
Basic:
Net income (loss)	$	(11,628	)	$	(14,006	)	$	(45,253	)	$	9,965
Weighted average common shares outstanding	20,919			20,678			20,892			21,042
Net income (loss) per share	$	(0.56	)	$	(0.68	)	$	(2.17	)	$	0.47
Diluted:
Net income (loss) for dilutive share computation	$	(11,628	)	$	(14,006	)	$	(45,253	)	$	9,965
Number of shares used in basic per share computation	20,919			20,678			20,892			21,042
Unvested restricted stock and DSUs	—			—			—			354
Employee stock options	—			—			—			22
Weighted average common shares outstanding	20,919			20,678			20,892			21,418
Net income (loss) per share	$	(0.56	)	$	(0.68	)	$	(2.17	)	$	0.47

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 the income attributable to the potential exercise of the dilutive securities of the partner company from net income (loss). Any impact is shown as an adjustment to net income (loss) for purposes of calculating diluted net income (loss) per share.

Diluted earnings per share for the three months ended September 30, 2015 and 2014 do not reflect the following potential shares of common stock that would have an anti-dilutive effect or have unsatisfied performance or market conditions:

• At September 30, 2015 and 2014, options to purchase 1.1 million and 1.7 million shares of common stock at prices ranging from $7.14 to $19.95 and $3.93 to $18.80, respectively, were excluded from the calculations.

• At September 30, 2015 and 2014, unvested restricted stock, performance-based stock units and DSUs convertible into 0.4 million and 0.3 million shares of stock, respectively, were excluded from the calculations.

• At September 30, 2015 and 2014, 3.0 million shares of common stock, representing the effect of the assumed conversion of the 2018 Debentures, were excluded from the calculation.

Diluted earnings per share for the nine months ended September 30, 2015 and 2014 do not reflect the following potential shares of common stock that would have an anti-dilutive effect or have unsatisfied performance or market conditions:

• At September 30, 2015 and 2014, options to purchase 1.1 million and 0.8 million shares of common stock at prices ranging from $7.14 to $19.95 and $7.41 to $18.78, respectively, were excluded from the calculations.

• At September 30, 2015 and 2014, unvested restricted stock, performance-based stock units and DSUs convertible into 0.4 million and 0.3 million shares of stock, respectively, were excluded from the calculations.

• At September 30, 2015 and 2014, 3.0 million shares of common stock, representing the effect of the assumed conversion of the 2018 Debentures, were excluded from the calculation.

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

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. 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, however, 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 had outstanding guarantees of $3.8 million at September 30, 2015 which related to one of the Company's private equity holdings.

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 its 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 September 30, 2015. 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 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 $2.3 million was included in Other long-term liabilities on the Consolidated Balance Sheet at September 30, 2015.

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 $3.0 million at September 30, 2015.

In June 2011, the Company's former partner company, Advanced BioHealing, Inc. (“ABH”) was acquired by Shire plc. Prior to the expiration of the escrow period in March 2012, Shire plc filed a claim against all amounts held in escrow related to the sale based principally upon a United States Department of Justice (“DOJ”) false claims act investigation relating to ABH. No further proceeds will be distributed to the Company or other former owners until the validity of such claims is determined. The Company presently views it as unlikely that it will receive any portion of such amount in the short or long-term. In connection with the above-referenced investigation, in July 2015 the Company received a Civil Investigation Demand-Documentary Material from the DOJ regarding ABH and Safeguard’s relationship with ABH. Safeguard intends to cooperate with the investigation.

XML

Net Income (Loss) Per Share - Narrative (Detail) - $ / shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Share of common stock excluded from diluted net loss per share calculation	1.1	1.7	1.1	0.8
Shares of common stock at prices ranging, lower limit	$ 7.14	$ 3.93	$ 7.14	$ 7.41
Shares of common stock at prices ranging, upper limit	$ 19.95	$ 18.80	$ 19.95	$ 18.78
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	0.4		0.4	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	3.0	3.0

XML

Net Income (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Calculations of Net Loss Per Share

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

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(Unaudited - In thousands, except per share data)
Basic:
Net income (loss)	$	(11,628	)	$	(14,006	)	$	(45,253	)	$	9,965
Weighted average common shares outstanding	20,919			20,678			20,892			21,042
Net income (loss) per share	$	(0.56	)	$	(0.68	)	$	(2.17	)	$	0.47
Diluted:
Net income (loss) for dilutive share computation	$	(11,628	)	$	(14,006	)	$	(45,253	)	$	9,965
Number of shares used in basic per share computation	20,919			20,678			20,892			21,042
Unvested restricted stock and DSUs	—			—			—			354
Employee stock options	—			—			—			22
Weighted average common shares outstanding	20,919			20,678			20,892			21,418
Net income (loss) per share	$	(0.56	)	$	(0.68	)	$	(2.17	)	$	0.47

XML

Fair Value Measurements - Carrying Value and Fair Value of Certain Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 63,708	$ 111,897
Total marketable securities	40,465	44,628
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Total marketable securities	0	0
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Total marketable securities	0	0
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	63,708	111,897
Total marketable securities	40,465	44,628
Commercial paper [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		6,596
Commercial paper [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		0
Commercial paper [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		0
Commercial paper [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		6,596
U.S. Treasury Bills [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		1,503
U.S. Treasury Bills [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		0
U.S. Treasury Bills [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		0
U.S. Treasury Bills [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		1,503
Government agency bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		503
Government agency bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		0
Government agency bonds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		0
Government agency bonds [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities		503
Certificates of deposit [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities	40,465	36,026
Certificates of deposit [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities	0	0
Certificates of deposit [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities	0	0
Certificates of deposit [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total marketable securities	$ 40,465	$ 36,026

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash Flows from Operating Activities:
Net cash used in operating activities	$ (14,086)	$ (15,475)
Cash Flows from Investing Activities:
Proceeds from sales of and distributions from companies	25,029	81,626
Acquisitions of ownership interests in companies	(52,181)	(54,956)
Advances and loans to companies	(10,935)	(9,868)
Repayment of advances and loans to companies	1,290	5,509
Increase in marketable securities	(23,875)	(44,578)
Decrease in marketable securities	28,043	39,979
Capital expenditures	(402)	(11)
Other	0	5
Net cash provided by (used in) investing activities	(33,031)	17,706
Cash Flows from Financing Activities:
Issuance of Company common stock, net	676	612
Repurchase of convertible senior debentures	0	(441)
Repurchase of Company common stock	(1,748)	(25,036)
Net cash used in financing activities	(1,072)	(24,865)
Net change in cash and cash equivalents	(48,189)	(22,634)
Cash and cash equivalents at beginning of period	111,897	139,318
Cash and cash equivalents at end of period	$ 63,708	$ 116,684

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2015

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 instruments 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 September 30, 2015 and December 31, 2014:

	Carrying Value		Fair Value Measurement at September 30, 2015
			Level 1		Level 2		Level 3
	(Unaudited - In thousands)
Cash and cash equivalents	$	63,708	$	63,708	$	—	$	—
Marketable securities—held-to-maturity:
Certificates of deposit	$	40,465	$	40,465	$	—	$	—
Total marketable securities	$	40,465	$	40,465	$	—	$	—

	Carrying Value		Fair Value Measurement at December 31, 2014
			Level 1		Level 2		Level 3
	(Unaudited - In thousands)
Cash and cash equivalents	$	111,897	$	111,897	$	—	$	—
Marketable securities—held-to-maturity:
Commercial paper	$	6,596	$	6,596	$	—	$	—
U.S. treasury bills	1,503		1,503		—		—
Government agency bonds	503		503		—		—
Certificates of deposit	36,026		36,026		—		—
Total marketable securities	$	44,628	$	44,628	$	—	$	—

As of September 30, 2015, $29.8 million of marketable securities had contractual maturities which were less than one year and $10.7 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.

XML

Fair Value Measurements - Narrative (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair Value Disclosures [Abstract]
Marketable securities, current	$ 29,760	$ 25,263
Marketable securities, non current	$ 10,705	$ 19,365

XML

Commitments and Contingencies (Detail) - USD ($) $ in Thousands	1 Months Ended
	Oct. 31, 2001	Sep. 30, 2015	Dec. 31, 2014
Commitment Contingencies And Guarantees [Line Items]
Accrued expenses		$ 3,644	$ 2,334
Other long-term liabilities		3,928	$ 3,507
Annual payments	$ 650
Employee Severance
Commitment Contingencies And Guarantees [Line Items]
Maximum severance payments		3,000
Letter of credit
Commitment Contingencies And Guarantees [Line Items]
Letter of credit under the credit facility		6,300
Accrued expenses and other current liabilities
Commitment Contingencies And Guarantees [Line Items]
Liability to former chairman and chief executive officer, current		800
Other long-term liabilities
Commitment Contingencies And Guarantees [Line Items]
Liability to former chairman and chief executive officer, non-current		2,300
Clawback Liability
Commitment Contingencies And Guarantees [Line Items]
Accrued expenses and other current liabilities		1,300
Accrued expenses		1,000
Other long-term liabilities		$ 300
Company's ownership in the funds		19.00%
Private equity funds [Member]
Commitment Contingencies And Guarantees [Line Items]
Company outstanding guarantees		$ 3,800

XML

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

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:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(Unaudited - In thousands)
General and administrative expense	$	148	$	176	$	1,140	$	1,583
	$	148	$	176	$	1,140	$	1,583

Types of Vesting Schedules

At September 30, 2015, the Company had outstanding options that vest based on three different types of vesting schedules:

1)	performance-based;
2)	market-based; and
3)	service-based.