10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

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

For the fiscal year ended December 31, 2021

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

(610) 293-0600

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($.10 par value)	SFE	New York Stock Exchange

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

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒

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  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  ☒    No  ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐	Accelerated filer  ☐	Smaller reporting company ☑
Non-accelerated filer   ☑		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ☒

As of June 30, 2021, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $154,839,292 based on the closing sale price as reported on the New York Stock Exchange.

The number of shares outstanding of the registrant’s common stock as of March 7, 2022 was 16,629,844.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement (the “Definitive Proxy Statement”) to be filed with the Securities and Exchange Commission for the Company’s 2022 Annual Meeting of Shareholders are incorporated by reference into Part III of this report.

SAFEGUARD SCIENTIFICS, INC.

FORM 10-K

December 31, 2021

	Page
PART I
Item 1. Business	3
Item 1A. Risk Factors	8
Item 1B. Unresolved Staff Comments	13
Item 2. Properties	13
Item 3. Legal Proceedings	13
Item 4. Mine Safety Disclosures	13
PART II
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6. Selected Consolidated Financial Data	15
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	20
Item 8. Financial Statements and Supplementary Data	21
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	44
Item 9A. Controls and Procedures	44
Item 9B. Other Information	44
PART III
Item 10. Directors, Executive Officers and Corporate Governance	45
Item 11. Executive Compensation	45
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	45
Item 13. Certain Relationships and Related Transactions, and Director Independence	46
Item 14. Principal Accountant Fees and Services	46
PART IV
Item 15. Exhibits and Financial Statement Schedules	47

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PART I

Cautionary Note Concerning Forward-Looking Statements

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

Item 1. Business

Business Overview

Over the recent past, Safeguard has provided capital and relevant expertise to fuel the growth of technology-driven businesses. Typically, we are actively involved in strategic and operational decisions through our board representation and management support, in addition to the influence we exert through our equity ownership. We also continue to 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, those ownership interests relate to residual interests from prior larger interests or from companies that acquired companies in which we had ownership interests.

In January 2018, Safeguard ceased deploying capital into new opportunities in order to focus on supporting the existing ownership interests and maximizing monetization opportunities to enable returning value to shareholders.  We have considered and taken action on various initiatives including the sale of our ownership interests, the sale of certain or all of our ownership interests in secondary market transactions as well as other opportunities to maximize shareholder value.  In December 2019, we paid a $1.00 per share special dividend. In 2021, we repurchased 4.5 million shares through a combination of open market purchases and a tender offer for an aggregate of $40.7 million resulting in an average price of $8.95 per share.  We will continue to actively work with our ownership interests to seek monetization opportunties while we also evaluate additional strategic alternatives.  These strategic alternatives could include the sale of all of our ownership interests in a single transaction or a series of transactions, as well as merger, business combinations or other strategic transactions. 

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We incorporated in the Commonwealth of Pennsylvania in 1953. Our corporate headquarters are located at 150 N. Radnor Chester Road, Suite F-200, Radnor, Pennsylvania 19087.

Our Strategy

Founded in 1953, Safeguard has a distinguished track record of building market leading companies through providing capital and operational support to entrepreneurs across an evolving and innovative spectrum of industries. Over the recent past, Safeguard has provided capital and relevant expertise to fuel the growth of technology-driven businesses in healthcare, financial services and digital media. Since January 2018, Safeguard ceased deploying capital into new opportunities in order to focus on supporting the existing ownership interests with the goal of pursuing monetization opportunities and maximizing the value returned to shareholders.

Helping Our Companies Build Value

We offer strategic, operational and management support to certain of our ownership interests.

Strategic Support. We play an active role in developing the strategic direction to certain of our ownership interests, which include:

• defining short and long-term strategic goals;

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

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

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

• identifying sources of and providing capital to drive growth.

Management and Operational Support. Our executives serve on the boards of directors of certain of our companies, working with them to develop and implement strategic and operating plans. We measure and monitor achievement of these plans through regular review of operational and financial performance measurements.

Realizing Value

The primary way we realize value from our ownership interests is when the underlying company enters into a sale or merger transaction and we receive cash consideration for our ownership stake. From time to time, we engage in discussions with other companies interested in our ownership interests, either in response to inquiries or as part of a process we initiate. To the extent we believe that a company’s further growth and development can best be supported by a different ownership structure or if we otherwise believe it is in our shareholders’ best interests, we will seek to sell some or all of our position in the company. These sales may take the form of privately negotiated sales of stock or assets, mergers and acquisitions, public offerings of the company’s securities and, in the case of publicly traded companies, sales of their securities in the open market. In the past, we have taken companies public through rights offerings and directed share subscription programs. We will continue to consider these (or similar) programs and the sale of certain company interests in secondary market transactions to maximize value for our shareholders.

Given our strategy, the value of Safeguard is primarily dependent upon the value of our existing ownership interests.  We have returned capital to our shareholders in the form of stock repurchases and a special dividends to shareholders.

Our Ownership Interests

An understanding of our ownership interests is important to understanding Safeguard. We categorize our ownership interests into stages based upon revenue generation.  This includes those positions which are accounted for under the equity method as well as certain companies where we do not have significant influence but whose value is a substantial portion of our portfolio.  The Company reflects revenue categories based on a one quarter lag, i.e. the categories below reflect the trailing year ended September 30, 2021.

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The ownership percentages indicated below are presented as of December 31, 2021 for certain companies in which we held ownership interests and reflect the percentage of the vote we were entitled to cast at that date based on issued and outstanding voting securities (on a common stock equivalent basis), excluding the effect of options, warrants and convertible debt (primary ownership).

Initial Revenue Stage: Up to $1 million

There are no companies in which we have an ownership interest and account for under the equity method that are within this stage of growth. However, see section below regarding Other Ownership Interests.

Revenue of $1 million to $5 million

Moxe Health Corporation (Safeguard Ownership: 27.6%)

Headquartered in Madison, Wisconsin, Moxe Health provides a clinical data clearinghouse that connects health systems with their network of health plans.  Moxe’s key products, Substrate and Convergence, allow for bi-directional data flow between payors and providers to complete various risk adjustment, quality, and prior authorization use cases. www.moxehealth.com

Revenue of $5 million to $10 million

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Lumesis, Inc. (Safeguard Ownership: 43.2%)

Headquartered in Stamford, Connecticut, Lumesis is a financial technology company focused on providing business efficiency, data and regulatory solutions to the municipal bond marketplace. Lumesis’ DIVER platform helps more than 500 firms with more than 43,000 users efficiently meet credit, regulatory and risk needs. www.lumesis.com

Revenue of $10 million to $20 million

Clutch Holdings, Inc. (Safeguard Ownership: 41.7%)

Headquartered in Ambler, Pennsylvania, Clutch has revolutionized how marketing teams for premier brands develop and foster relationships with their customers. Clutch’s advanced marketing platform serves as a customer hub, delivering deep intelligence derived from real-time behaviors and transactions across in-store, online, mobile and social channels. www.clutch.com

InfoBionic, Inc. (Safeguard Ownership: 25.2%)

Headquartered in Waltham, Massachusetts, InfoBionic is an emerging digital health company focused on creating patient monitoring solutions for cardiac arrhythmias. InfoBionic’s MoMe^® Kardia cloud-based, remote patient monitoring platform delivers on-demand, actionable monitoring data and analytics directly to the physicians themselves. www.infobionic.com

meQuilibrium (Safeguard Ownership: 31.9%)

Headquartered in Boston, Massachusetts, meQuilibrium is an engagement and performance platform that leverages behavioral psychology and data science to improve workforce resilience, agility, and adaptive capacity.  The Company offers solutions for managers, teams, and individual employees. www.mequilibrium.com

Syapse, Inc. (Safeguard Ownership: 11.1%)

Headquartered in Palo Alto, California, Syapse is on a mission to deliver the best care for every cancer patient through precision medicine. Syapse’s platform, data sharing network, and industry partnerships enable healthcare providers to bring precision cancer care to every patient who needs it. www.syapse.com

Trice Medical, Inc. (Safeguard Ownership: 12.6%)

Headquartered in Malvern, Pennsylvania, Trice Medical was founded to fundamentally improve orthopedic diagnostics for the patient, physician and payor by providing instant, eyes-on, answers. Trice has pioneered fully integrated camera-enabled technologies that provide a clinical solution that is optimized for the physician's office. Trice's mission is to provide more immediate and definitive patient care, eliminating the false reads associated with current indirect modalities and significantly reduce the overall cost to the healthcare system. www.tricemedical.com

Revenue of $20 million to $50 million

Aktana, Inc. (Safeguard Ownership: 13.4%)

Headquartered in San Francisco, California, Aktana is a pioneer in decision support for global life science sales teams. Aktana helps its customers improve their commercial effectiveness by delivering data-driven insights and suggestions directly to sales reps, coordinating multi-channel actions and providing insight regarding which strategies work best for which customers under which conditions. www.aktana.com

Prognos Health Inc. (Safeguard Ownership: 28.5%)

Headquartered in New York, New York, Prognos is a healthcare platform company transforming the ability to access, manage and analyze healthcare data in partnership with Life Sciences brands, payers, and clinical diagnostics organizations. Prognos’ innovations enhance the value of laboratory results and clinical diagnostic data through advanced analytics and artificial intelligence techniques. www.prognos.ai

Greater than $50 million

MediaMath, Inc. (Safeguard Ownership: 13.2%)

Headquartered in New York, New York, MediaMath is a global technology company that is leading the movement to revolutionize traditional marketing and drive transformative results for marketers through its TerminalOne Marketing Operating System^®. MediaMath empowers marketers with an extensible, open platform that activates data, automates execution and optimizes interactions across all addressable media, delivering superior performance, transparency and control to all marketers and better, more individualized experiences for consumers. www.mediamath.com

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Other ownership interests

In addition to the above companies, we also have smaller ownership interests in a variety of other companies where we do not exert significant influence and do not participate in any management activities. In some cases, these ownership interests generally are the result of previous positions that have been diluted or residual interests resulting from the acquisition of companies where we had an ownership interest.

 Bright Health Group:  A technology-enabled, fully aligned sytem of care built for healthcare's consumer retail market.  Bright HealthCare offers commercial and Medicare health plan products to over 1 million consumers across the  nation.  www.brighthealthgroup.com 

BigToken:  A consumer-managed data marketplace providing consumers, advertisers and media companies access to transparent, verified consumer data.  BigToken merged with Britepool in December 2021.  BigToken became a public company earlier in 2021 as a result of a reverse merger with Fire Protection Video Equipment Corp.  www.bigtoken.com

MedCrypt: Developer of a data security platform designed to protect medical devices. The company's platform enables functions such as authenticating users, encrypting data and cryptographically sign settings and patient prescriptions, as well as has the ability to monitor transactions between clinicians and devices for malicious behavior, enabling hospitals and health systems to prevent unauthorized access and misuse of their medical devices. www.medcrypt.co

WellTrackONE: Provider of wellness program services. The company's services include scheduling, screening and documentation that provide data for outcomes and clinical measurements, enabling healthcare professionals to offer wellness visits to their patients. www.welltrackone.co

We also have residual interests in a variety of private funds that are in the process of winding down and other companies.  

FINANCIAL INFORMATION ABOUT OPERATING SEGMENTS

We operate as one operating segment based upon the similar nature of our technology-driven companies, the functional alignment of the organizational structure and the reports that are regularly reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources.

OTHER INFORMATION

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

AVAILABLE INFORMATION

Safeguard is subject to the informational requirements of the Securities Exchange Act of 1934, as amended. Therefore, we file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements and other information with, and furnish other reports to, the Securities and Exchange Commission (“SEC”). You can read and copy such documents at the SEC’s public reference facilities in Washington, D.C., New York, New York and Chicago, Illinois. You may obtain information on the operation of the SEC’s public reference facilities by calling the SEC at 1-800-SEC-0330. Such material may also be accessed electronically by means of the SEC’s home page on the Internet at www.sec.gov or through Safeguard’s website at www.safeguard.com. Such documents are available as soon as reasonably practicable after electronic filing of the material with the SEC. Copies of these reports (excluding exhibits) also may be obtained free of charge, upon written request to: Investor Relations, Safeguard Scientifics, Inc., 150 N. Radnor Chester Road, Suite F-200, Radnor, Pennsylvania 19087.

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

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

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Item 1A. Risk Factors

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

Our ability to obtain value from our companies and the return of such value to our shareholders are subject to factors beyond our control.

In January 2018, we announced that we will not deploy any capital into new companies.  We will instead focus on supporting, and maximizing monetization opportunities for, our existing company interests to return value to shareholders.  In that context, we have, are and will consider monetization initiatives including, among others: the sale of our ownership interests, the sale of certain or all ownership interests in secondary market transactions, or a combination thereof, the sale of all of our ownership interests in a single transaction or a series of transactions, business combinations and other strategic transactions as well as other opportunities to maximize shareholder value.  However, this strategic plan may require providing additional capital and operational support to such existing companies and we may not be able to complete any such transaction during any specific time frame or otherwise on desirable terms, if at all, and there can be no assurance as to how long this process will take or the results that this process will yield.  In addition, there can be no assurance that any exploration of a strategic transaction will result in any strategic change or outcome and disclosure of any developments related to such exploration may not be disclosed until required.  Further, if one or more transactions are completed, there can be no assurance as to whether we will realize the value of escrowed proceeds, holdbacks or other contingent consideration, if any, associated with such transaction.  Additionally, there can be no assurance that we will be able to satisfy our liabilities during this process.  The method, timing and amount of any return of value resulting from such a transaction will also be at the discretion of our Board of Directors and may depend on market and business conditions and our overall liabilities, capital structure and liquidity position.

A disposition of one or more of our company interests may occur at a time that will yield less value than if we held such interests for a longer period of time.

Our companies are at various stages in their lifecycles. The value of our interests in our companies at any point in time is highly dependent on the progress and success such companies have made at such time with respect to the development and marketing of their products and services and that value may fluctuate significantly. In order to effect our strategy of monetizing our interests in our companies, we may dispose of such interests at a time prior to the applicable company reaching its maximum value. Doing so will result in a return of value to shareholders that is less than that which may have been returned if we retained our interests in such company for a longer period of time.

The effects of the COVID-19 pandemic may adversely affect the businesses, financial conditions and operating results of the companies in which we have an ownership interest, as well as our ability to monetize such interests, and it may also cause us to increase the amount of additional capital we will need to provide to such companies.

To varying degrees, the economic and market conditions caused by the COVID-19 pandemic have, and continue to, negatively impact the companies in which we have ownership interests, including, without limitation, their operations, supply chains, sales infrastructures and the demand for their products and services.  This is negatively affecting their businesses, financial conditions and operating results.  As a result, we may be required to provide additional capital to certain companies, which may cause us to face liquidity issues that will constrain our ability to execute our business strategy and limit our ability to provide financial support to all of our existing companies in the amounts that we desire.  The COVID-19 pandemic is also impacting the mergers and acquisitions market for certain companies, which in some cases has resulted in lower valuation expectations and extended exit timelines for such companies. This, in turn, could negatively affect the amount and timing of the monetization opportunities for such companies and our ability to return value to shareholders.  

Our principal business strategy depends upon our ability to make good decisions regarding the deployment of capital into, and subsequent disposition of, our existing company interests and, ultimately, the performance of such companies, which is uncertain.

If we make poor decisions regarding the deployment of capital into, and subsequent disposition of, our existing companies, our business strategy will not succeed. If such 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 companies include:

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

• the intense competition affecting the products and services our 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 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 companies; and

• the inability to plan for and manage catastrophic events.

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

As we execute against our strategy, a significant amount of our deployed capital may be concentrated in fewer companies.  These remaining companies may also operate in the same or similar industries.  This will limit our diversification and make us more susceptible to a single negative event. 

As we execute against our strategy, our capital deployments will be deployed in a decreasing number of companies.  Further, our remaining companies could be concentrated in the same or similar industries. Fewer companies, as well as potential industry concentration, may cause us to be more susceptible to any single economic, regulatory or other occurrence affecting a single company or a particular industry than we would have otherwise been if we had a larger number of companies and our companies operated in more diversified industries.

Our business model does not rely upon, or plan for, the receipt of operating cash flows from our companies. Our companies do not provide us with 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 fund the capital needs of our existing companies. We also need cash to finance our corporate overhead and meet our existing funding commitments. As a result, we have substantial cash requirements. Our companies do not provide us with cash flow from their operations. To the extent our 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, company liquidity events and new capital raising activities to meet our cash needs. If we are unable to find ways of monetizing our holdings of company interests or raising additional capital on attractive terms, we may face liquidity issues that will require us to constrain our ability to execute our business strategy and limit our ability to provide financial support to our existing companies.

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 companies. If we were to divest all or part of our holdings in a company, we may have to sell our interests at a relative discount to intrinsic value. For 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 company in which we have an interest may be small relative to our holdings. As a result, any significant open-market divestiture by us of our holdings in such a 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 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 company 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. In connection with our strategy announced in 2018, we made a series of management changes intended to streamline our organizational structure and reduce our operating costs and since then we have made, and may make, further management changes from time to time.  A loss of one or more of the remaining 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 companies participate decline.

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

Our 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 currently own a significant, influential interest in some of our companies, we do not maintain a controlling interest in any of our companies. Acquisitions of interests in companies in which we share or have no control, and the dilution of our interests in or a further reduction of our control of companies, will involve additional risks that could cause the performance of our interests and our operating results to suffer, including:

• the management teams or other equity or debt holders of our companies having economic or business interests or objectives that are different from ours; and

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

Our inability to control our 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 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 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 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 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 be limited in the manner or timing in which we sell our interests in a company. Our ownership levels also may be affected if our companies are acquired by third parties or if our 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 companies.

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The COVID-19 pandemic may adversely affect parties with obligations to us, including the subtenant of our previous office space.

In March 2019, we entered into a sublease of our prior corporate headquarters office space beginning in June 2019. The term of the sublease is through April 2026, the same as our underlying lease. Fixed sublease payments to us are escalating over the term of the sublease.  We remain obligated under the original lease for such office space and, in the event the subtenant of such office space fails to satisfy its obligations under the sublease, we would be required to satisfy our obligations directly to the landlord under such original lease.

Risks Related to Our Companies

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

Most of our 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 companies will increase substantially in the foreseeable future as they continue to develop products and services, increase sales and marketing efforts, and expand operations.

Our 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 marketplaces, and we expect competition to intensify in the future. Our business, financial condition, and results of operations will be materially adversely affected if our 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 companies. This may place our companies at a disadvantage in responding to the offerings of their competitors, technological changes or changes in client requirements. Also, our 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 companies may compete against one another.

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

Our companies’ business strategies are often highly dependent upon the successful launch and commercialization of an innovative technology or device, including, without limitation, technologies or devices used in healthcare, financial services or digital media.  Despite all of our efforts to understand the research and development underlying the innovation or creation of such technologies and devices before we deploy capital into a company, sometimes the performance of the technology or device does not match our expectations or those of such company. In those situations, it is likely that we will incur a partial or total loss of the capital which we deployed in such company.

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

If our 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 companies will achieve or maintain market penetration or commercial success, or that the businesses of our companies will be successful.

The technology marketplaces 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.

Our future success will depend on our 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 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 companies may not be able to respond to the marketplace changes in an economically efficient manner, and our companies may become or remain unprofitable.

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Our companies may grow rapidly, including through acquisitions of other businesses, and may be unable to manage their growth.

We expect some of our companies to grow rapidly, including through acquisitions of other businesses. Such growth often places considerable operational, managerial, integration and financial strain on a business. To successfully manage such growth, our companies must, among other things:

• improve, upgrade and expand their business infrastructures;

• successfully integrate and operate any newly acquired businesses;

• scale up production operations;

• develop appropriate financial reporting controls;

• attract and retain qualified personnel; and

• maintain appropriate levels of liquidity.

If our 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. Further, a material weakness in any of our companies’ internal controls over their financial reporting 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.

Based on our business model, some or all of our companies will need to raise additional capital to fund their operations at any given time. We may not be able to, or decline to, fund some or all of such amounts and such amounts may not be available from third parties on acceptable terms, if at all. Further, if our companies do raise additional capital from third parties, either debt or equity, such capital may rank senior to, or dilute, our interests in such companies.

We cannot be certain that our companies will be able to obtain additional financing on favorable terms when needed, if at all. We may not be able to, or decline to, provide our companies with sufficient capital resources to enable them to reach a cash-flow positive position or a sale of the company. General economic disruptions and downturns may also negatively affect the ability of some of our companies to fund their operations from other stockholders and capital sources. We also may fail to accurately project the capital needs of companies. If our companies need capital, but are not able to raise capital from us or other outside sources, or our companies are unable to service their debt obligations, they may need to, or be forced to, cease or scale back operations. In such event, our interest in any such company will become less valuable. If our companies raise additional capital from third parties, either debt or equity, such capital may be dilutive, making our interests less valuable or if such capital ranks senior to the capital we have deployed, such capital may entitle its holders to receive returns of capital before we are entitled to receive any return of our deployed capital. Also, in the event of any insolvency, liquidation, dissolution, reorganization or bankruptcy of one or more our companies, holders of such company’s instruments that rank senior to our deployed capital will typically be entitled to receive payment in full before we receive any return of our deployed capital. After returning such senior capital, such company may not have any remaining assets to use for returning capital to us, causing us to lose some or all of our deployed capital in such company.

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

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

Our companies assert various forms of intellectual property protection. Intellectual property may constitute an important part of our companies’ 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 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 companies and the demands of quick delivery of products and services to market, create a risk that our companies’ efforts to prevent misappropriation of their technology will prove inadequate.

Some of our 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 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 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 companies incur costly litigation and their personnel are not effectively deployed, the expenses and losses incurred by our companies will increase and their profits, if any, will decrease.

Third parties have and may assert infringement or other intellectual property claims against our companies based on their patents or other intellectual property claims. Even though we believe our 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 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 companies are without merit, defending these types of lawsuits takes significant time, is expensive and may divert management attention from other business concerns.

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

Because the manufacture and sale of certain company products entail an inherent risk of product liability, certain of our companies maintain product liability insurance. Although none of our current 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 company’s financial stability, revenues and results of operations. In addition, many of the engagements of our companies involve projects that are critical to the operation of their clients’ businesses. If our 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. Our companies’ 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 companies or may not be enforceable. Also, some of our 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 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 companies’ success depends on their ability to attract and retain qualified personnel.

Our companies depend upon their ability to attract and retain senior management and key personnel, including trained technical and marketing personnel. Our companies also will need to continue to hire additional personnel as they expand. Although our current 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 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 companies.

Manufacturers of 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 companies. If Medicare or private payers change the rates at which our companies or their customers are reimbursed by insurance providers for their products, such changes could adversely impact our companies.

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

Some of our 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, some of our companies are subject to federal, state and local financial securities and data security regulations, including, without limitation, the Health Insurance Portability and Accountability Act of 1996, as amended, the California Consumer Privacy Act and the European General Data Protection Regulation, which impose varying degrees of additional obligations, costs and risks upon such companies, including the imposition of significant penalties in the event of any non-compliance. Further, 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 companies, and the failure to comply could negatively affect the operations and results of some of our companies.

Catastrophic events may disrupt our companies’ businesses.

Some of our 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 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 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 companies from fulfilling customer orders or maintaining certain service level requirements, particularly in respect of their SaaS offerings. While certain of our 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 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.

Risks Related to an Investment in our Securities

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.

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The continuing costs and burdens associated with being a public company will constitute a much larger percentage of our expenses and we may in the future delist our common stock with the New York Stock Exchange and seek to deregister our common stock with the SEC.

We will remain a public company and will continue to be subject to the listing standards of the New York Stock Exchange and SEC rules and regulations, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Sarbanes-Oxley Act of 2002.  The costs and burdens of being a public company will be a significant and continually increasing portion of our expenses if we are able to monetize our company interests.  As part of such monetization efforts, we will likely in the future, once the majority of our company interests have been monetized, delist our common stock from the New York Stock Exchange and seek to deregister our common stock with the SEC.  However, there can be no assurance as to the timing of such transactions, or whether such transactions will be completed at all, and we will continue to face the costs and burdens of being a public company until such time as our common stock is delisted with the New York Stock Exchange and deregistered with the SEC.

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 stock price and 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 companies and selling our interests in 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.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our current corporate headquarters and administrative offices in Radnor, Pennsylvania is approximately 100 square feet of office space in one building.  The lease term expires in November 2022.  The sublease for our previous corporate headquarters and administrative offices for approximately 4,000 square feet of office space in Radnor, Pennsylvania expired in November 2020 (from a company in which we have an equity interest).

 Additionally, we have additional administrative offices located in Radnor, Pennsylvania comprising approximately 15,600 square feet, that have been sublet to an unaffiliated party through April, 2026, the remainder of the lease term.

Item 3. Legal Proceedings

We, as well as our companies in which we hold ownership interests, are from time to time involved in various claims and legal actions arising in the ordinary course of business. While in the current opinion of management, the ultimate disposition of any of these matters which are currently pending will not have a material adverse effect on our consolidated financial position or results of operations, no assurance can be given as to the outcome of these situations, and one or more adverse dispositions could have a material adverse effect on our consolidated financial position and results of operations, or that of our companies. See Note 11 to the Consolidated Financial Statements for a discussion of ongoing claims and legal actions.

Item 4. Mine Safety Disclosures

Not applicable.

ANNEX TO PART I — EXECUTIVE OFFICERS OF THE REGISTRANT

Name	Age	Position	Executive Officer Since
Eric C. Salzman	54	Chief Executive Officer	2020
Mark A. Herndon	52	Senior Vice President and Chief Financial Officer	2018

Mr. Salzman joined Safeguard as Chief Restructuring Officer in April 2020.  Mr. Salzman began serving as the Chief Executive Officer in December 2020.  Mr. Salzman has a 25-year track record partnering with growth companies as an investor, board member and strategic advisor.  He has worked in M&A, restructuring, growth and special situations investing at a number of investment banks and private equity funds, including Credit Suisse and Lehman Brothers.  Mr. Salzman helped oversee the monetization of a $2 billion portfolio of illiquid assets in the Lehman Brothers Bankruptcy Estate and subsequently advised several investment funds on value-maximization strategies for their respective portfolios.  He currently serves as a director on a number of Safeguard portfolio companies as well as an independent director at publicly traded 8x8, Inc.  Mr. Salzman earned a B.A. Honors from the University of Michigan and an MBA from Harvard University.

Mr. Herndon joined Safeguard as Senior Vice President and Chief Financial Officer in September 2018. Prior to joining Safeguard, Mr. Herndon served in a variety of client service and national office roles at PricewaterhouseCoopers from 1991 to 2018, including his position as Assurance Partner from 2006 until 2018.

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PART II

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

Our common stock is listed on the New York Stock Exchange (Symbol: SFE). The high and low sale prices reported within each quarter of 2021 and 2020 were as follows: 

	High		Low
Fiscal year 2021:
First quarter	$	8.59	$	6.35
Second quarter		7.90		5.95
Third quarter		8.93		7.38
Fourth quarter		8.98		6.23
Fiscal year 2020:
First quarter	$	11.11	$	4.43
Second quarter		7.87		4.92
Third quarter		7.12		5.15
Fourth quarter		7.25		5.33

The high and low sale prices reported in the first quarter of 2022 through March 11, 2022 were $7.53 and $5.32 respectively, and the last sale price reported on March 11, 2022, was $5.35.  As of March 11, 2022, there were approximately 8,570 beneficial holders of our common stock.

Special Dividend

On November 7, 2019, the Board of Directors declared a special cash dividend of $1.00 per share, payable on December 30, 2019 to shareholders of record as of the close of business on December 23, 2019.

Issuer Purchases of Equity Securities

The following table provides information about our purchases of equity securities during the quarter ended December 31, 2021 registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"):

Period	Total Number of Shares Purchased (a)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan (b)		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan (b)
October 1, 2021 - October 31, 2021		4,306,847	$	9.00		4,304,826	$	18,996,988
November 1, 2021 - November 30, 2021		92	$	8.37		—	$	18,996,988
December 1, 2021 - December 31, 2021		509	$	7.04		—	$	18,996,988
Total		4,307,448	$	9.00		4,304,826

(a) During the fourth quarter of 2021, we repurchased an aggregate of approximately 3 thousand shares of our common stock initially issued as restricted stock awards to employees and subsequently withheld from employees to satisfy the statutory withholding tax liability upon the vesting of such restricted stock awards.

(b) In October 2021, the Company completed a modified Dutch auction self-tender that resulted in the repurchase of 4.3 million common shares for an aggregated price of $39.0 million, or $9.06 per share, including $0.3 million of transaction costs. In July 2015, our Board of Directors authorized us to repurchase shares of our outstanding common stock with an aggregate value of up to $25.0 million.  These repurchases may be made in open market or privately negotiated transactions, including under plans complying with Rule 10b5-1 of the Exchange Act, based on market conditions, stock price, and other factors.  In May 2021, our Board of Directors authorized a new $6.0 million share repurchase program using existing funds in accordance with the requirements of Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934, as amended.  The share repurchase programs do not obligate us to acquire any specific number of shares.

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Item 6. Selected Consolidated Financial Data

Not applicable for a smaller reporting company.

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

Cautionary Note Concerning Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about Safeguard Scientifics, Inc. (“Safeguard” or “we”), the industries in which we operate and other matters, as well as management's beliefs and assumptions and other statements regarding matters that are not historical facts.  These statements include, in particular, statements about our plans, strategies and prospects.  For example, when we use words such as “projects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “should,” “would,” “could,” “will,” “opportunity,” “potential” or “may,” variations of such words or other words that convey uncertainty of future events or outcomes, we are making forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Our forward-looking statements are subject to risks and uncertainties.  Factors that could cause actual results to differ materially include, among others, our ability to make good decisions about the deployment of capital, the fact that our ownership interests may vary from period to period, our substantial capital requirements and absence of liquidity from our holdings, competition, our inability to obtain maximum value for our ownership interests, our ability to attract and retain qualified employees, our ability to execute our strategy, market valuations in sectors in which our ownership interests operate, our inability to control our ownership interests companies, our need to manage our assets to avoid registration under the Investment Company Act of 1940, and risks associated with our ownership interests and their performance, including the fact that most of the companies in which we have an ownership interest 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 they operate, compliance with government regulation and legal liabilities, all of which are discussed in Item 1A. “Risk Factors.” Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by this cautionary statement. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report might not occur.

Overview

Over the recent past, Safeguard has provided capital and relevant expertise to fuel the growth of technology-driven businesses. Typically, we are actively involved in strategic and operational decisions through our board representation, in addition to the influence we exert through our equity ownership. We also continue to 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, those ownership interests relate to residual interests from prior larger interests or from companies that acquired companies in which we had ownership interests.

In January 2018, Safeguard ceased deploying capital into new opportunities in order to focus on supporting the existing ownership interests and maximizing monetization opportunities to enable returning value to shareholders.  We have considered and taken action on various initiatives including the sale of our ownership interests, the sale of certain or all of our ownership interests in secondary market transactions as well as other opportunities to maximize shareholder value.  In December 2019, we declared and paid a $1.00 per share special dividend. In 2021, we repurchased 4.5 million shares through a combination of open market purchases and a tender offer for an aggregate of $40.7 million resulting in an average price of $8.95 per share.  We will continue to actively work with our ownership interests to seek monetization opportunties while we also evaluate additional strategic alternatives. These strategic alternatives could include the sale of all of our ownership interests in a single transaction or a series of transactions, merger, business combinations or other strategic transactions. 

Principles of Accounting for Ownership Interests

We account for our ownership interests using one of the following methods: Equity or Other. The accounting method applied is generally determined by the degree of our influence over the entity, primarily determined by our voting interest in the entity.

Equity Method. The Company accounts for ownership interests whose results are not consolidated, but over which it exercises significant influence, under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an ownership interest depends on an evaluation of several factors including, among others, representation on the board of directors and our ownership level, which is generally a 20% to 50% interest in the voting securities of a company, including voting rights associated with the Company’s holdings in common, preferred and other convertible instruments in the company. The Company records the initial ownership interest at cost.  Under the equity method of accounting, the Company does not reflect a company’s financial statements within our Consolidated Financial Statements; however, our share of the income or loss of such company is reflected in Equity income (loss), net in the Consolidated Statements of Operations.  The Company also adjusts the carrying value to reflect third party investments in the ownership interests, which typically result in a dilution gain. The Company includes the carrying value of equity method companies in Ownership interests and advances on the Consolidated Balance Sheets. Any excess of the Company’s cost over its underlying interest in the net assets of equity method companies that is allocated to intangible assets is amortized over the estimated useful lives of the related intangible assets. The Company reflects its share of the income or loss of the equity method companies on a one quarter lag. This reporting lag could result in a delay in recognition of the impact of changes in the business or operations of these companies.

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

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Other Method. We account for ownership interests in companies that are not accounted for under the equity method that do not have a readily determinable fair value under the fair value measurement alternative.  Under the fair value measurement alternative, these ownership interests are based on our original cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar interests of the same issuer.  Under this method, our share of the income or losses of such companies is not included in our Consolidated Statements of Operations, however, the result of observable price changes, if any, are reflected in Other income (loss), net. We include the carrying value of these interests in Ownership interests and advances on the Consolidated Balance Sheets. 

The Company accounts for ownership interests that are not accounted for under the equity method and have a readily determinable fair value at fair value based on the closing stock price on the last trading day of the reporting period.  

Critical Accounting Policies and Estimates

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

Impairment of Ownership Interests and Advances

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

The fair value of privately held companies is generally determined based on the value at which independent third parties have invested or have committed to invest in these companies, or based on other valuation methods including discounted cash flows, valuations of comparable public companies and valuations of acquisitions of comparable companies.

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

Total impairment charges related to our Ownership interests and advances were as follows: 

	Year Ended December 31,
Accounting Method	2021		2020
	(In thousands)
Equity	$	—	$	11,282
Other		2,521		8,757
Total	$	2,521	$	20,039

Impairment charges related to equity method companies are included in Equity income (loss), net in the Consolidated Statements of Operations. Impairment charges related to other ownership interests are included in Other income (loss), net in the Consolidated Statements of Operations.

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Results of Operations

We operate as one operating segment based upon the similar nature of our technology-driven companies, the functional alignment of the organizational structure, and the reports that are regularly reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources.

There is intense competition in the markets in which our 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.

The following is a listing of certain of our ownership interests as of December 31, 2021 and 2020. The ownership percentages indicated below are presented as of December 31, 2021 for certain companies in which we held ownership interests and reflect the percentage of the vote we were entitled to cast at that date based on issued and outstanding voting securities (on a common stock equivalent basis), excluding the effect of options, warrants and convertible debt (primary ownership).

	Safeguard Primary Ownership as of December 31,
Company Name	2021			2020			Accounting Method
Aktana, Inc.		13.4	%		15.1	%	Equity
Clutch Holdings, Inc.		41.7	%		42.3	%	Equity
InfoBionic, Inc.		25.2	%		25.2	%	Equity
Lumesis, Inc.		43.2	%		43.4	%	Equity
MediaMath, Inc.		13.2	%		13.3	%	Other
meQuilibrium		31.9	%		32.0	%	Equity
Moxe Health Corporation		27.6	%		27.6	%	Equity
Prognos Health Inc.		28.5	%		28.5	%	Equity
Syapse, Inc.		11.1	%		18.9	%	Equity
Trice Medical, Inc.		12.6	%		16.6	%	Equity

Year ended December 31, 2021 versus year ended December 31, 2020

	Year Ended December 31,
	2021			2020			Variance
	(In thousands)
General and administrative expense	$	(7,153	)	$	(9,466	)	$	2,313
Other income (loss), net		22,035			(7,708	)		29,743
Interest income		276			261			15
Equity income (loss), net		11,846			(20,702	)		32,548
Net income (loss)	$	27,004		$	(37,615	)	$	64,619

General and Administrative Expense. Our general and administrative expenses consist primarily of employee compensation, insurance, office rent and professional services such as consulting, legal, and accounting. General and administrative expense also includes stock-based compensation expense which consists primarily of expense related to grants of restricted stock and deferred stock units to our employees and directors. General and administrative expense decreased $2.3 million for the year ended December 31, 2021 compared to the prior year primarily due to decreases in severance of $1.2 million, employee compensation of $1.5 million, lower professional fees of $0.1 million, and other various costs, which were partially offset by $0.8 million of higher stock based compensation compensation.  General and administrative expenses also include amounts estimated for the Transaction Bonus Plan (the "LTIP"), which is a component of employee compensation.  As described in Note 11 in the accompany consolidated financial statements, the LTIP provides a cash bonus pool to employees based upon meeting certain thresholds of sales of the Company's ownership interests.  Expense recognized pursuant to the LTIP was $0.7 million and $1.3 million during the years ended December 31, 2021 and 2020, respectively.  The Company paid $2.5 million pursuant to the LTIP plan during 2021.  No further amounts have been accrued with respect to the LTIP.  General and administrative expense also includes stock based compensation expense of $1.8 million and $1.0 million years ended December 31, 2021 and 2020, respectively.   The increase of stock based compensation for the year ended December 31, 2021 is primarily attributable to amounts associated with management compensation of $0.4 million and shares granted to a consultant for services of $0.2 million. Stock based compensation for the year ended December 31, 2020 also reflected reductions, that did not recur to the same extent in 2021, in compensation related to certain performance based awards that had a reduction in expected vesting, expired or were forfeited. Stock based compensation continues to include a significant proportion of management's overall compensation, including the settlement of amounts due pursuant to the annual management incentive plan, and Director compensation, which aggregated to $0.6 million for the year ended December 31, 2021.

17

Other income (loss), net. Other income (loss), net increased by $29.7 million for the year ended December 31, 2021, compared to the prior year.  During the year ended December 31, 2021, the Company recorded a gain from the sale of Flashtalking of $32.5 million and gains aggregating to $2.8 million from the sales of Velano Vascular and T-REX Group.  The Company recorded unrealized losses from an observable price change and subsequent changes in the fair value of BHG common stock of $10.8 million, net, and a $2.5 million impairment related to certain other ownership interests.  During the year ended December 31, 2020, the Company recorded impairments of $8.8 million related to the ownership interests of T-REX, b8ta and others accounted for under the Other method. The impairments were determined based on declines in the fair value of our ownership interests resulting from reduced valuation expectations and extended exit timelines resulting from the more challenging mergers and acquisitions environment related to COVID-19 and the related uncertain economic impact.  The Company also recorded a $0.3 million reduction in the carrying value of an other equity security based on an observable price change. Partially offsetting these impairments, was a $1.5 million non-cash gain for the increase in the fair value of our ownership interest in Flashtalking based upon an observable price change. 

Interest Income. There was no significant change in interest income for the year ended December 31, 2021 compared to the prior year.

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

Equity income (loss), net increased $32.5 million for the year ended December 31, 2021 compared to the prior year. The components of equity income (loss), net for the years ended December 31, 2021 and 2020 were as follows:

	Year Ended December 31,
	2021			2020			Variance
	(In thousands)
Gains on sales of ownership interests	$	19,146		$	183		$	18,963
Unrealized dilution gains		9,252			4,246			5,006
Loss on impairments		—			(11,282	)		11,282
Share of losses of our equity method companies, net		(16,552	)		(13,849	)		(2,703	)
	$	11,846		$	(20,702	)	$	32,548

During the year ended December 31, 2021, the gains on sales of ownership interests are comprised primarily of gains related to Zipnosis for $17.3 million and AHS for $2.0 million. There were no material gains or losses on sales of ownership interests for the year ended December 31, 2020, however Sonobi was sold resulting in $6.6 million of cash proceeds.  

The unrealized dilution gains for the year ended December 31, 2021 were the result of Syapse and Trice, who each raised additional equity capital that diluted the Company's interest in those entities. The unrealized dilution gains for the year ended December 31, 2020 were related to Aktana, meQuilibrium, Moxe and Syapse.

18

During the year ended December 31, 2020 the Company recorded impairments of $11.3 million related to the ownership interests of WebLinc, Inc., QuanticMind, Inc. and Sonobi accounted for under the equity method. The impairments were determined based on declines in the fair value of our ownership interests resulting from reduced valuation expectations and extended exit timelines resulting from the more challenging mergers and acquisitions environment related to COVID-19 and the related uncertain economic impact.  

The increase in our share of losses of our equity method companies for the 2021 year compared to the prior year period was due to increased losses at principally two healthcare companies one of which did not experience their planned revenue growth and the other incurred a variety of financing and acquisition expenses during 2021.  These factors were partially offset by the impact due to the decrease in the number of ownership interests accounted for under the equity method and a decrease in losses associated with the remaining ownership interests.

Income Tax Benefit (Expense)

There was no income tax benefit (expense) for the years ended December 31, 2021 and 2020. 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 each year was offset by changes in the valuation allowance.

Liquidity And Capital Resources

As of December 31, 2021, the Company had $24.7 million of cash and cash equivalents.

In 2015, the Company's Board of Directors authorized us, 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 years ended December 31, 2021 and 2020, we did not repurchase any shares under this authorization.  In May 2021, the Company's Board of Directors authorized a new $6.0 million share repurchase program using existing funds in accordance with the requirements of Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934, as amended.  During the year ended December 31, 2021, the Company purchased 236,159 shares under this program at an aggregate cost of $1.6 million, or $6.94 per share.  During October 2021, the Company completed a modified Dutch auction self-tender that resulted in the repurchase of 4.3 million common shares for an aggregate price of $38.7 million, or $9.00 per share.

We may consider additional stock repurchases or dividends in the future based on prevailing market conditions and other factors when and if additional liquidity becomes available.

Our ability to generate liquidity from transactions involving our ownership interests has been adversely affected from time to time by adverse circumstances in the U.S. capital markets and other factors, including the impact of COVID-19.  We may be requested to provide additional capital to our companies, which may cause us to face liquidity issues that will constrain our ability to execute our business strategy and limit our ability to provide financial support to all of our existing companies in the amounts that we desire. 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 provide additional funding to existing companies where we have an ownership interest 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 our ownership interests, 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. Accordingly, the Company could also pursue other sources of capital in order to maintain its liquidity.  The Company believes that its cash and cash equivalents at December 31, 2021 will be sufficient to fund operations past one year from the issuance of these financial statements.

Analysis of Consolidated Cash Flows

Cash flow activity was as follows: 

	Year Ended December 31,
	2021			2020			Variance
	(In thousands)
Net cash used in operating activities	$	(8,152	)	$	(8,143	)	$	(9	)
Net cash provided by (used in) investing activities		58,114			(1,269	)		59,383
Net cash used in financing activities		(40,799	)		(40	)		(40,759	)
	$	9,163		$	(9,452	)	$	18,615

19

Net Cash Used In Operating Activities

Year ended December 31, 2021 versus year ended December 31, 2020. Net cash used in operating activities remained consistent for the year ended December 31, 2021 compared to the prior year. The activity during the year ended December 31, 2021 was primarily the result of various non-cash adjustments to net income, including $11.8 million of equity income, non-cash gains, net, of $8.5 million for observable prices changes and $35.3 million for gain on sales of ownership interests which were partially offset by $19.3 million change in the fair value of ownership interests and $2.5 million impairment losses at certain Other ownership interests.  The activity during the year ended December 31, 2020 was primarily the result of various non-cash adjustments to net loss, including the $20.0 million impairment losses and $9.4 million of equity loss, which were partially offset by non-cash gains, net, of $1.2 million for observable price changes.

Net Cash (Used in) provided by Investing Activities

Year ended December 31, 2021 versus year ended December 31, 2020. Net cash (used in) provided by investing activities increased by $59.4 million for the year ended December 31, 2021 compared to the prior year.  The increase primarily related to $60.8 million of proceeds from the sale of ownership interests, primarily Flashtalking, Zipnosis, WebLinc Velano and T-Rex, as compared to the $6.6 million of proceeds from the sale of Sonobi in the third quarter of 2020.  In addition, the Company's investing outflows resulting from acquisitions of ownership interests and advances to ownership interests during the year ended December 31, 2021 were $7.5 million less than the prior year. 

Net Cash Used In Financing Activities

Year ended December 31, 2021 versus year ended December 31, 2020. Net cash used in financing activities increased by $40.8 million for the year ended December 31, 2021 compared to the prior year. The increase was primarily the result of $40.7 million in repurchases of our common stock.  There were no other significant financing activities for the years ended December 31, 2021. 

Contractual Cash Obligations and Other Commercial Commitments

	Payments Due by Period
	Total		2022		2023 and 2024		2025 and 2026		After 2026
	(In millions)
Contractual Cash Obligations:
Operating leases (a)	$	2.6	$	0.6	$	1.2	$	0.8	$	—
Total Contractual Cash Obligations (b)	$	2.6	$	0.6	$	1.2	$	0.8	$	—

(a)  In 2015, we entered into an agreement for the lease of our former principal executive offices which expires in April 2026.  Payments pursuant to this lease are approximately $2.6 million through expiration, however, in March 2019 we entered into a sublease for this office space which is also expected to result in future aggregate sublease receipts of $2.5 million through April 2026. 

(b)  The  maximum aggregate exposure under employment and severance agreements for remaining employees was approximately $1.0 million at December 31, 2021.  We are involved from time to time in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of any of these matters which are currently pending will not have a material adverse effect on our consolidated financial position or results of operation.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Not applicable for a smaller reporting company.

20

Item 8. Financial Statements and Supplementary Data

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

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248)	22
Report of Independent Registered Public Accounting Firm (KPMG LLP, Philadelphia, PA, Auditor Firm ID: 185)	23
Consolidated Balance Sheets as of December 31, 2021 and 2020	25
Consolidated Statements of Operations for the years ended December 31, 2021 and 2020	26
Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2021 and 2020	27
Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020	28
Notes to Consolidated Financial Statements	29

21

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders
Safeguard Scientifics, Inc

Opinion on the financial statements

We have audited the accompanying consolidated balance sheet of Safeguard Scientifics, Inc. (a Pennsylvania corporation) and subsidiaries (the “Company”) as of December 31, 2021, the related consolidated statements of operations, changes in shareholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

Critical audit matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

As discussed in Note 1 and Note 2 to the consolidated financial statements, the Company’s ownership interests balance as of December 31, 2021 was $22.0 million, of which $21.1 million is accounted for under the equity method and $0.9 million is accounted for under the fair value measurement alternative. On a periodic basis, but not less frequently than quarterly, the Company evaluates the carrying value of its ownership interests for impairment based on achievement of business plan objectives and milestones, the financial condition and prospects of the company, market conditions and other relevant factors. The business plan objectives and milestones the company considers include, among others, those related to financial performance, such as achievement of planned financial results or completion of capital raising activities, and those that are not primarily financial in nature, such as hiring of key employees or the establishment of strategic relationships. Based on the above, management then determines whether there has been an other than temporary decline in the value of its ownership interest in the portfolio company. If it is determined that there has been an other than temporary decline in the value of its ownership interests in the portfolio company, impairment is measured as the amount by which the carrying value of an asset exceeds its estimated fair value.

The principal consideration for our determination that the identification of other than temporary impairment of ownership interests is a critical audit matter is due to it being an area of the financial statements requiring significant auditor judgment and subjectivity in assessing the results of management’s qualitative impairment analysis. Ownership interests held by the Company are primarily comprised of early-stage companies in industries that are rapidly evolving, where evaluation of other than temporary declines in value requires significant judgment by management.

Our audit procedures related to identification of other than temporary impairment of ownership interests included the following, among others:

● We evaluated the design of certain internal controls related to the Company’s impairment assessment. This included controls over the identification of other than temporary declines in value and the impairment analysis, including financial condition, prospects and other factors present at the company.

● We held discussions with those outside of accounting with intimate knowledge of the portfolio companies, including those with board positions and those employed by the portfolio companies, to gain an understanding of operational performance, milestones achieved, and potential indicators of other than temporary declines in value.  

● We reviewed the financial performance of the underlying portfolio companies, relevant third-party information with indications of company values, board materials, press releases and other public information relating to the portfolio companies for potential indicators of other than temporary declines in value.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2021.

Philadelphia, Pennsylvania

March 11, 2022

22

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors
Safeguard Scientifics, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Safeguard Scientifics, Inc. and subsidiaries (the Company) as of December 31, 2020, the related consolidated statements of operations, shareholders’ equity, and cash flows for the year ended December 31, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/KPMG LLP

We served as the Company’s auditor from 1986 to 2021.

Philadelphia, Pennsylvania
March 5, 2021

23

24

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

	As of December 31,
	2021			2020
ASSETS
Current Assets:
Cash and cash equivalents	$	24,739		$	15,601
Restricted cash		25			—
Ownership interests		4,549			—
Prepaid expenses and other current assets		965			462
Total current assets		30,278			16,063
Right-of-use asset, net		1,561			1,790
Ownership interests and advances		21,972			50,398
Other assets		217			784
Total Assets	$	54,028		$	69,035
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	41		$	56
Accrued compensation and benefits		794			2,677
Accrued expenses and other current liabilities		524			410
Lease liability - current		375			327
Total current liabilities		1,734			3,470
Other long-term liabilities		50			637
Lease liability - non-current		1,678			2,053
Total Liabilities		3,462			6,160
Commitments and contingencies (Note 11)
Equity:
Preferred stock, $0.10 par value; 1,000 shares authorized		—			—
Common stock, $0.10 par value; 83,333 shares authorized; 21,573 issued at December 31, 2021 and 2020, respectively		2,157			2,157
Additional paid-in capital		806,638			807,582
Treasury stock, at cost; 5,068 and 688 shares at December 31, 2021 and 2020, respectively		(48,569	)		(10,200	)
Accumulated deficit		(709,635	)		(736,639	)
Accumulated other comprehensive loss		(25	)		(25	)
Total Equity		50,566			62,875
Total Liabilities and Equity	$	54,028		$	69,035

See Notes to Consolidated Financial Statements.

25

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Year Ended December 31,
	2021			2020
General and administrative expense	$	7,153		$	9,466
Operating loss		(7,153	)		(9,466	)
Other income (loss), net		22,035			(7,708	)
Interest income		276			261
Equity income (loss), net		11,846			(20,702	)
Net income (loss) before income taxes		27,004			(37,615	)
Income tax benefit (expense)		—			—
Net income (loss)	$	27,004		$	(37,615	)
Net income (loss) per share:
Basic	$	1.36		$	(1.81	)
Diluted	$	1.36		$	(1.81	)
Weighted average shares used in computing net income (loss) per share:
Basic		19,827			20,751
Diluted		19,827			20,751

See Notes to Consolidated Financial Statements.

26

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(In thousands)

				Accumulated			Accumulated Other Comprehensive			Common Stock				Additional Paid-In			Treasury Stock
	Total			Deficit			Loss			Shares		Amount		Capital			Shares			Amount
Balance — December 31, 2019	$	101,741		$	(697,223	)	$	(25	)		21,573	$	2,157	$	810,856			930		$	(14,024	)
Net loss		(37,615	)		(37,615	)		—			—		—		—			—			—
Restricted stock awards, forfeitures and shares repurchased for tax withholdings, net		(40	)		—			—			—		—		(3,864	)		(242	)		3,824
Stock-based compensation		590			—			—			—		—		590			—			—
Change in accounting at ownership interests		(1,801	)		(1,801	)		—			—		—		—			—			—
Balance — December 31, 2020	$	62,875		$	(736,639	)	$	(25	)		21,573	$	2,157	$	807,582			688		$	(10,200	)
Net income		27,004			27,004			—			—		—		—			—			—
Restricted stock awards, forfeitures and shares repurchased for tax withholdings, net		736			—			—			—		—		(1,550	)		(161	)		2,286
Stock-based compensation		606			—			—			—		—		606			—			—
Repurchases of common stock		(40,655	)		—			—			—		—		—			4,541			(40,655	)
Balance — December 31, 2021	$	50,566		$	(709,635	)	$	(25	)		21,573	$	2,157	$	806,638			5,068		$	(48,569	)

See Notes to Consolidated Financial Statements.

27

SAFEGUARD SCIENTIFICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year Ended December 31,
	2021			2020
Cash Flows from Operating Activities:
Net income (loss)	$	27,004		$	(37,615	)
Adjustments to reconcile to net cash used in operating activities:
Amortization of right of use asset		229			311
Equity (income) loss, net		(11,846	)		9,420
Impairments of ownership interests and advances		2,521			20,039
Gain from observable price changes		(8,505	)		(1,224	)
Gain from sales of ownership interests		(35,284	)		—
Change in fair value of ownership interests		19,255			—
Other, net		(22	)		175
Stock-based compensation, including liability classified awards		1,779			965
Changes in assets and liabilities:
Prepaid expenses and other current assets		(238	)		(137	)
Accounts payable, accrued expenses, and other current liabilities		(3,045	)		(77	)
Net cash used in operating activities		(8,152	)		(8,143	)
Cash Flows from Investing Activities:
Acquisitions of ownership interests		—			(7,534	)
Proceeds from sales and distributions from ownership interests		60,832			7,903
Advances and loans to ownership interests		(2,718	)		(1,638	)
Net cash provided by (used in) investing activities		58,114			(1,269	)
Cash Flows from Financing Activities:
Repurchases of common stock		(40,655	)		—
Tax withholdings related to equity-based awards		(144	)		(40	)
Net cash used in financing activities		(40,799	)		(40	)
Net change in cash, cash equivalents and restricted cash		9,163			(9,452	)
Cash, cash equivalents and restricted cash equivalents at beginning of period		15,601			25,053
Cash, cash equivalents and restricted cash at end of period	$	24,764		$	15,601

See Notes to Consolidated Financial Statements.

28

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. General

Liquidity And Capital Resources

As of December 31, 2021, Safeguard Scientifics, Inc. ("the Company") had $24.7 million of cash and cash equivalents.

In January 2018, Safeguard ceased deploying capital into new opportunities in order to focus on supporting the existing ownership interests and maximizing monetization opportunities to enable returning value to shareholders.   We have considered and taken action on various initiatives including the sale of our ownership interests, the sale of certain or all of our ownership interests in secondary market transactions as well as other opportunities to maximize shareholder value. As we seek to provide additional funding to existing companies where we have an ownership interest, we may be required to expend our cash or incur debt, which will decrease our liquidity.  From time to time, we are engaged in discussions concerning acquisitions and dispositions which, if consummated, could impact our liquidity, perhaps significantly.  Accordingly, the Company could also pursue other sources of capital in order to maintain its liquidity.    

The Company believes that its cash and cash equivalents at December 31, 2021 will be sufficient to fund operations past one year from the issuance of these consolidated financial statements. 

Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Safeguard and all of its wholly-owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

Principles of Accounting for Ownership Interests in Companies

The Company accounts for its ownership interests using one of the following methods: Equity or Other. The accounting method applied is generally determined by the degree of the Company's influence over the entity, primarily determined by our voting interest in the entity.

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

Equity Method. The Company accounts for ownership interests whose results are not consolidated, but over which it exercises significant influence, under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an ownership interest depends on an evaluation of several factors including, among others, representation on the board of directors and our ownership level, which is generally a 20% to 50% interest in the voting securities of a company, including voting rights associated with the Company’s holdings in common, preferred and other convertible instruments in the company. The Company records the initial ownership interest at cost.  Under the equity method of accounting, the Company does not reflect a company’s financial statements within our Consolidated Financial Statements; however, our share of the income or loss of such company is reflected in Equity income (loss), net in the Consolidated Statements of Operations.  The Company also adjust the carrying value to reflect third party investments in the ownership interests, which typically result in a dilution gain. The Company includes the carrying value of equity method companies in Ownership interests and advances on the Consolidated Balance Sheets. Any excess of the Company’s cost over its underlying interest in the net assets of equity method companies that is allocated to intangible assets is amortized over the estimated useful lives of the related intangible assets. The Company reflects its share of the income or loss of the equity method companies on a one quarter lag. This reporting lag could result in a delay in recognition of the impact of changes in the business or operations of these companies.

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

Other Method. We account for ownership interests in companies that are not accounted for under the equity method that do not have a readily determinable fair value under the fair value measurement alternative.  Under the fair value measurement alternative, these ownership interests are based on our original cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar interests of the same issuer.  Under this method, our share of the income or losses of such companies is not included in our Consolidated Statements of Operations, however, the result of observable price changes, if any, are reflected in Other income (loss), net. We include the carrying value of these interests in Ownership interests and advances on the Consolidated Balance Sheets.

The Company accounts for ownership interests that are not accounted for under the equity method and have a readily determinable fair value at fair value based on the closing stock price on the last trading day of the reporting period.  As of December 31, 2021 those ownership interests consist of approximately 1.3 million common shares of Bright Health Group ("Bright Health") valued at $4.5 million.  

Comprehensive Income (loss) 

During the years ended December 31, 2021 or 2020, there were no items of comprehensive income (loss).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Accounting Estimates

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

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

It is reasonably possible that the Company’s accounting estimates with respect to the ultimate recoverability of the carrying value of the Company’s ownership interests and advances could change in the near term and that the effect of such changes on the consolidated financial statements could be material. At December 31, 2021, the Company believes the carrying value of the Company’s ownership interests and advances is not impaired, although there can be no assurance that the Company’s future results will confirm this assessment, that a significant write-down or write-off will not be required in the future or that a significant loss will not be recorded in the future upon the sale of a company.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash and cash equivalents consist of deposits that are readily convertible into cash.  The Company has not experienced any significant losses on cash equivalents and does not believe it is exposed to any significant credit risk on cash and cash equivalents.

Restricted Cash

Restricted cash equivalents represents cash required to be set aside by a contractual agreement as a shareholder representative. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statements of Cash Flows:

	December 31, 2021		December 31, 2020
	(In thousands)
Cash and cash equivalents	$	24,739	$	15,601
Restricted cash		25		—
Total cash, cash equivalents and restricted cash	$	24,764	$	15,601

Financial Instruments

The Company’s financial instruments (principally cash and cash equivalents, accounts receivable, notes receivable, accounts payable and accrued expenses) are carried at cost, which approximates fair value due to the short-term maturity of these instruments. 

Right-of-use asset

Right-of-use assets represent an operating lease for office facilities.  The right-of-use assets are reduced over the remaining term of the applicable lease (principally April 2026) in a manner that results in a straight-line lease expense, when combined with the interest factor on the lease liability.     

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Lease liability

The initial lease liability represents the present value of the fixed escalating lease payments through April 2026 associated with the Company's prior corporate headquarters operating office lease. The discount rate used to calculate the lease liability was based on the Company's incremental borrowing rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease, which was approximately 12%, at the transition to the guidance of ASU No. 2016-02, Leases. Subsequent values of the lease liability reflect the reduction in the lease liability for operating lease payments less an amount representing interest, which is included in the straight-line lease expense. There is no residual value guarantee associated with this operating lease arrangement. The Company has incurred operating lease expenses and operating cash outflows of $0.5 million for each of the years ended December 31, 2021 and 2020, respectively, and $0.6 million for each of the years ended December 31, 2021 and 2020.

In March 2019, the Company entered into a sublease of its prior corporate headquarters office space. The term of the sublease is through April 2026, the same as the Company's underlying lease. Fixed sublease payments to the Company are escalating over the term of the sublease and are reported as a component of general and administrative expenses.

In April 2019, the Company entered into a sublease for replacement office space with a related party, an equity method ownership interest, beginning in June 2019. The 18 month term of this sublease expired in 2020. The aggregate payments under this sublease were not material.

A summary of the Company's operating lease cash flows at December 31, 2021 follows:

	Operating lease payments			Expected sublease receipts
	(In thousands)
2022	$	601		$	540
2023		607			556
2024		613			573
2025		619			590
2026		207			199
2027		—			—
Thereafter		—			—
Total future minimum lease payments		2,647			2,458
Less imputed interest		(595	)
Total operating lease liabilities	$	2,052

Impairment of Ownership Interests and Advances

On a periodic basis, but no less frequently than quarterly, the Company evaluates the carrying value of its ownership interests and advances for possible impairment based on achievement of business plan objectives and milestones, the estimated value of each company relative to its carrying value, the financial condition and prospects of the company and other relevant factors. The business plan objectives and milestones the Company considers include, among others, those related to financial performance, such as achievement of planned financial results or completion of capital raising activities, and those that are not primarily financial in nature, such as hiring of key employees or the establishment of strategic relationships.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Management then determines whether there has been an other than temporary decline in the value of its ownership interest in the company. Impairment is measured as the amount by which the carrying value of an asset exceeds its estimated fair value.

The estimated fair value of privately held companies is generally determined based on the value at which independent third parties have invested or have committed to invest in these companies or based on other valuation methods, including discounted cash flows, valuation of comparable public companies and the valuation of acquisitions of similar companies.

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

The reduced cost basis of a previously impaired company accounted for using the Equity method are not written-up if circumstances suggest the value of the company has subsequently recovered.

Income Taxes

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

Net Income (Loss) Per Share

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

Segment Information

The Company operates as one operating segment based upon the similar nature of its technology-driven companies, the functional alignment of the organizational structure, and the reports that are regularly reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

2. Ownership Interests and Advances

The following summarizes the carrying value of the Company’s ownership interests and advances.

	December 31, 2021		December 31, 2020
	(In thousands)
Equity Method:
Companies	$	21,091	$	27,550
Private equity funds		117		271
		21,208		27,821
Other Method:
Companies, fair value		4,549		—
Companies, fair value measurement alternative		514		19,683
Private equity funds, fair value measurement alternative		250		268
		5,313		19,951
Advances to companies		—		2,626
	$	26,521	$	50,398

In March 2021, Zipnosis, Inc. was acquired by another entity, Bright Health.  The Company received $3.5 million in cash proceeds, including escrows, and $15.3 million in preferred equity in the acquiror in connection with this transaction.  This ownership interest represented a security that did not have a readily determinable fair value.  Due to the inherent uncertainty of determining the fair value of ownership interests that do not have a readily determinable fair value, this estimated value  may differ significantly from the value that would have been reported had a ready market for the security existed, and it is reasonably possible that the difference could be material.  The Company recognized a $17.3 million gain on the sale, which is included in Equity income (loss), net in the Consolidated Statements of Operations.  The fair value of the ownership interest received as a result of the acquisition was estimated based on evaluating several valuation methods available, including the value at which independent third parties have recently invested, the valuation of comparable public companies, and the present value of our expected outcomes.  Assumptions considered within these methods include determining which public companies are comparable, projecting forward revenues, selecting an appropriate valuation multiple, discounts to apply for the lack of marketability or lack of comparability, other factors and the relative weight to apply to each valuation method available.  Due to the unobservable nature of some of these inputs, we have determined this initial estimate to be a Level 3 fair value measurement.  During the three months ended June 30, 2021, Bright Health completed an initial public offering that resulted in our ownership interest converting into approximately 1.3 million common shares.  Accordingly, the Bright Health common shares represent an ownership interest with a readily determinable fair value (Level 1), which will subsequently be measured at fair value with unrealized gains (losses) being reported as a component of Other income (loss), net.  As a result, the Company recognized a $10.8 million unrealized loss, net, on Bright Health subsequent to the initial public offering during the year-ended December 31, 2021. Subsequent to December 31, 2021, the fair value of our Bright Health ownership interest declined to approximately $2.3 million as of March 7, 2022.

In August 2021, Flashtalking was acquired by another entity.  The Company has received $45.0 million in cash proceeds, including escrows, and included a $32.5 million gain in Other income (loss), net, during the year ended December 31, 2021.  The Company may receive additional amounts of up to approximately $0.5 million over the next 24 months from the resolution of escrow contingencies.  

In January 2021, WebLinc, Inc. was acquired by another entity.  The Company has received $3.6 million in cash proceeds to-date and may receive additional amounts over the next 12 months based on certain transactional performance activities, which could be partially offset by indemnifiable claims.  The Company has recognized a $0.1 million loss on the sale during the year ended December 31, 2021, which is included in Equity income (loss), as certain contingencies were resolved.  To the extent additional amounts are collected as contingencies are resolved, those amounts will be recorded as gain on the sale and included within Equity income (loss). 

QuanticMind and Hoopla were acquired in separate transactions during the first quarter of 2021 by other entities, however there were no resultant proceeds to the Company.  There was no resulting gain or loss due to this equity method ownership interest being impaired during the prior year.

In March 2021, the Company's ownership interest in T-REX Group, Inc., which was accounted for using the fair value measurement alternative, was acquired for $3.0 million in cash.  The Company recognized a $0.9 million gain, which is included in Other income (loss), net.  

In April 2021, Velano Vascular was acquired by another entity.  The Company has received $3.5 million in cash proceeds, including escrows, and included a $1.9 million gain in Other income (loss), net, for the year ended December 31, 2021.  The Company  may receive additional amounts over the next 12 months from the resolution of escrow contingencies.

In December 2021, the Company received $2 million of contingent proceeds resulting from resolution of certain valuation thresholds remaining from the 2018 sale of AdvantEdge Healthcare Solutions.

During the year ended December 31, 2021, the Company recorded an impairment of $2.5 million related to reduced expectations for certain Other ownership interests, which is included in Other income (loss), net. 

In September 2020, Sonobi, Inc. was acquired by another entity for cash. The Company received $6.6 million in cash proceeds in connection with this transaction, excluding holdbacks and escrows. The Company recognized an insignificant gain on the sale, which is included in Equity income (loss), net in the Consolidated Statements of Operations.

During the year ended December 31, 2020, the Company recorded impairments of $11.3 million related to the ownership interests of WebLinc, Inc., QuanticMind, Inc. and Sonobi, Inc. accounted for under the equity method, which are reflected in Equity income (loss), net in the Consolidated Statement of Operations.  During the year ended December 31, 2020, the Company also recorded impairments of $8.8 million related to the ownership interests of T-REX Group, Inc., b8ta and others accounted for under the Other method, which are reflected in Other income (loss), net in the Consolidated Statement of Operations. The impairments were determined based on declines in the fair value of our ownership interests resulting from reduced valuation expectations and extended exit timelines resulting from the more challenging mergers and acquisitions environment related to COVID-19 and the related uncertain economic impact. The measurement of fair value for these impairments was estimated based on evaluating several valuation inputs available for each of the applicable ownership interests, primarily including the value at which independent third parties have invested, the valuation of comparable public companies, the valuation of acquisitions of similar companies and the present value of our expected outcomes. Assumptions considered within these methods include determining which public companies are comparable, projecting forward revenues for the measured ownership interest, discounts to apply for the lack of marketability or lack of comparability, other factors and the relative weight to apply to each valuation input available. Due to the unobservable nature of some of these inputs, we have determined these fair value estimates to be non-recurring Level 3 fair value measurements.

During the year ended December 31, 2020, the Company recorded a $1.5 million non-cash gain based upon an observable price change related to our ownership interest in Flashtalking Inc. accounted for under the Other method, which is reflected in Other income (loss), net in the Consolidated Statement of Operations. During the year ended December 31, 2020, the Company also recorded a $0.3 million non-cash Other loss based on an observable price change for another ownership interest accounted for under the Other method.

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SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of December 31, 2021, the Company held ownership interests accounted for using the equity method in 9 non-consolidated companies. 

Certain of the Company’s ownership interests as of December 31, 2021 and 2020 included the following:

	Safeguard Primary Ownership as of December 31,
Company Name	2021	2020	Accounting Method
Aktana, Inc.	13.4%	15.1%	Equity
Clutch Holdings, Inc.	41.7%	42.3%	Equity
InfoBionic, Inc.	25.2%	25.2%	Equity
Lumesis, Inc.	43.2%	43.4%	Equity
MediaMath, Inc.	13.2%	13.3%	Other
meQuilibrium	31.9%	32.0%	Equity
Moxe Health Corporation	27.6%	27.6%	Equity
Prognos Health Inc.	28.5%	28.5%	Equity
Syapse, Inc.	11.1%	18.9%	Equity
Trice Medical, Inc.	12.6%	16.6%	Equity

Summarized Financial Information

The following table provides summarized financial information for ownership interests accounted for under the equity method for the periods presented and has been compiled from respective company financial statements, reflect certain historical adjustments, and are reported on a one quarter lag. Results of operations are excluded for periods prior to their acquisition and subsequent to their disposition. Historical results are not adjusted when the Company exits or writes-off a company. 

	As of December 31,
	2021			2020
	(In thousands)
Balance Sheets:
Current assets	$	127,651		$	104,024
Non-current assets		53,220			26,352
Total assets	$	180,871		$	130,376
Current liabilities	$	62,538		$	72,972
Non-current liabilities		158,975			105,506
Shareholders’ deficit		(40,642	)		(48,102	)
Total liabilities and shareholders’ deficit	$	180,871		$	130,376
Number of equity method ownership interests		9			12

	Year Ended December 31,
	2021			2020
	(In thousands)
Results of Operations:
Revenue	$	140,670		$	153,875
Gross profit	$	90,388		$	92,039
Net loss	$	(106,363	)	$	(82,216	)

As of December 31, 2021, the Company’s carrying value in equity method companies, in the aggregate, exceeded the Company’s share of the net assets of such companies by approximately $11.4 million. Of this excess, $10.4 million was allocated to goodwill and $1.0 million was allocated to intangible assets.

3. Acquisitions of Ownership Interests

2021 Transactions

The Company funded $1.7 million to Aktana, Inc. during the three months ended September 30, 2021. The Company had previously deployed an aggregate of $14.2 million. Aktana helps its customers improve their commercial effectiveness by delivering data-driven insights and suggestions directly to sales reps, coordinating multi-channel actions and providing insight regarding which strategies work best for which customers under which conditions.

Syapse raised $68 million of preferred equity during the three months ended March 31, 2021, which reduced the Company's ownership interest to approximately 11.1%.  The Company recorded a $7.3 million dilution gain as a result of this transaction, which is included in Equity income (loss), net in the Consolidated Statements of Operation.  Syapse drives healthcare transformation through precision medicine, enabling provider systems to improve clinical outcomes, streamline operations, and shift to new payment models.

The Company funded $1 million of convertible loans to Trice Medical, Inc. during the three months ended June 30, 2021.  The Company had previously deployed an aggregate of $10.8 million.  Trice Medical is foucsed on orthopedic diagnostics using fully integrated camera-enabled technologies to provide clinical solutions to physicians.  During the three months ended September 30, 2021, Trice Medical raised additional preferred equity which reduced the Company's ownership interest to 12.6%.  The Company's existing convertible loans and related interst in Trice Medical were also converted into this new class of preferred equity.  As a result of this transaction, the Company recorded a $2.0 million dilution gain for the year ended December 31, 2021.

2020 Transactions

The Company deployed an additional $2.5 million to Aktana, Inc.

       The Company deployed an additional $4.4 million to Syapse, Inc.

The Company deployed an additional $1.0 million to meQuilibrium.

34

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company funded an additional $0.7 million of convertible loans to Trice Medical, Inc.

The Company deployed an aggregate of $0.2 million to Clutch Holdings.

The Company funded an additional $0.2 million of convertible loans to QuanticMind.  See Note 2 for impairment recorded in 2020 and the sale of this ownership interest in 2021.

The Company funded an aggregate of $0.1 million of convertible loans to WebLinc, Inc. See Note 2 for impairment recorded in 2020 and the sale of this ownership interest in 2021.

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 (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.

Cash, cash equivalents and restricted cash approximate fair value due to their short term nature.  The Company did not have any Level 2 or Level 3 financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020.

	Carrying		Fair Value Measurement at December 31, 2021
	Value		Level 1		Level 2		Level 3
	(in thousands)
Cash and cash equivalents	$	24,739	$	24,739	$	—	$	—
Restricted cash	$	25	$	25	$	—	$	—
Ownership interests	$	4,549	$	4,549	$	—	$	—

	Carrying		Fair Value Measurement at December 31, 2020
	Value		Level 1		Level 2		Level 3
	(In thousands)
Cash and cash equivalents	$	15,601	$	15,601	$	—	$	—

Ownership interests accounted for at fair value as of December 31, 2021 consist of approximately 1.3 million common shares of Bright Health. The securities are carried at fair value based on the closing stock price on the last trading day of the reporting period. The Company was restricted from trading these securities until December 2021 as a result of a six-month lock-up agreement from the Bright Health Group initial public offering.

5. 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 years ended December 31, 2021 and 2020, the Company did not repurchase any shares under the existing authorization. 

In May 2021, the Company's Board of Directors authorized a new $6.0 million share repurchase program using existing funds in accordance with the requirements of Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934, as amended.  During the year ended December 31, 2021, the Company repurchased 236,159 shares for an aggregate price of $1.6 million at an average cost of $6.94 per share.  

During October 2021, the Company completed a modified Dutch auction self-tender that resulted in the repurchase of 4.3 million common shares for an aggregated price of $39.0 million, or $9.06 per share, including $0.3 million of transaction costs.

35

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

6. Stock-Based Compensation

Equity Compensation Plans

The 2014 Equity Compensation Plan has 4.1 million shares authorized for issuance. During 2021 and 2020, the Company issued no stock-based awards outside of existing plans. To the extent allowable, service-based options are incentive stock options. Options granted under the plans are at prices equal to or greater than the fair market value at the date of grant. Upon exercise of stock options, the Company issues shares first from treasury stock, if available, then from authorized but unissued shares. At December 31, 2021, the Company had reserved 2.6 million shares of common stock for possible future issuance under its 2014 Equity Compensation Plan and other previously expired equity compensation plans.

Classification of Stock-Based Compensation Expense

Stock-based compensation consists of time based awards to employees, financial liability based awards to employees and non-employees to be settled in stock, performance based awards to employees, and financial liability based awards to Directors for quarterly and annual services. Stock-based compensation expense was recognized in the Consolidated Statements of Operations as follows: 

	Year Ended December 31,
	2021		2020
	(In thousands)
General and administrative expense	$	1,779	$	965
	$	1,779	$	965

Stock-based compensation expense of $1.2 million and $1.0 million was recognized during the years ended December 31, 2021 and 2020, respectively, related to annual and quarterly Board fees, time based management awards and management bonuses earned during the year that were subsequently settled in stock.  For the years ended December 31, 2021 and 2020, respectively, the Company issued 83 thousand and 93 thousand of restricted shares to Directors for their annual and quarterly services.  The annual grants vest over a one year period, or are vested at issuance for directors 65 or older, while quarterly amounts are paid in arrears.  The Company vested 95 thousand and 78 thousand during the years ended December 31, 2021 and 2020.  The Company vested 67 thousand and 96 thousand  shares during the years ended December 31, 2021 and 2020, respectively, for time based management compensation.  The Company settled in stock other management bonuses resulting in the issuance of 60 thousand and 0 thousand vested shares for the years ended December 31, 2021 and 2020, respectively.  The Company issued 20 thousand vested shares to a non-employee for services during 2021. The Company had liabilities of $0.8 million and $0.5 million as of December 31, 2021 and 2020, respectively, that were settled through the issuance of common stock in the subsequent period. 

The Company has previously granted certain performance-based stock units that vest based on the achievement of targeted capital returns based on net cash proceeds received by the Company on the sale, merger or other exit transaction of certain identified companies. The requisite service periods for these performance-based awards were based on the Company’s estimate of when the performance conditions will be met. Compensation expense was recognized for performance-based awards for which the performance condition is considered probable of achievement. During the years ended December 31, 2021 and 2020, respectively, 6 thousand and 129 thousand performance-based stock units pursuant to these targeted capital return pools were canceled or forfeited. The Company recorded a reduction of compensation expense related to these performance-based awards of $0.1 million and $0.7 million for the years ended December 31, 2021 and 2020  respectively. During 2020 and in January 2022, the Company also granted a CEO bonus award that will be settled in the vesting of performance-based units based on criteria determined by the Board of Directors.  The performance-based stock units represent the right to receive shares of the Company’s common stock, on a one-for-one basis at target, or up to 120% with respect to the 2020 grant, for certain specified thresholds. The 2020 award resulted in $0.5 million of compensation cost in 2021 based upon the vesting of 85 thousand performance based units. The January 2022 award could result in the vesting of up to 80 thousand performance-based stock units.

Unrecognized compensation expense related to performance stock units and restricted stock at December 31, 2021 was immaterial.

While there were no stock options granted during 2021 and 2020, the Company had outstanding options that vest based on two different types of vesting schedules:

1) performance-based; and

2) service-based.

Performance-based option awards also entitled participants to vest in a number of awards determined by achievement by the Company of target capital returns based on net cash proceeds received by the Company upon the sale, merger or other exit transaction of certain identified companies. 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.  The Company did not issue any performance-based units during the years ended December 31, 2021 and 2020.  During the years ended December 31, 2021 and 2020, respectively, 1 thousand and 0 performance-based options vested and an immaterial amount of compensation cost was recognized.  During the years ended December 31, 2021 and 2020, respectively, 11 thousand and 72 thousand performance-based options were canceled or forfeited. The maximum number of unvested options at December 31, 2021 attainable under these grants was 10 thousand shares.

Service-based awards generally vest over four years after the date of grant and expire eight years after the date of grant. Compensation expense is recognized over the requisite service period using the straight-line method. The requisite service period for service-based awards is the period over which the award vests. During the years ended December 31, 2021 and 2020, respectively, the Company issued no service-based options to employees and recorded $0.0 million of compensation expense from the vesting of previously issued awards. During the years ended December 31, 2021 and 2020, respectively, 5 thousand and 62 thousand service-based options were canceled or forfeited.  

36

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Option activity of the Company is summarized below: 

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Outstanding at January 1, 2020		179			15.27
Options granted		—			—
Options exercised		—			—
Options canceled/forfeited		(134	)		14.36
Outstanding at December 31, 2020		45			14.20
Options granted		—			—
Options exercised		—			—
Options canceled/forfeited		(16	)		14.20
Outstanding at December 31, 2021		29			14.20		1.85	$	—
Options exercisable at December 31, 2021		19			14.06		2.43		—
Shares available for future grant		2,374

At December 31, 2021, total unrecognized compensation cost related to non-vested service-based options was immaterial. At December 31, 2021, total unrecognized compensation cost related to non-vested performance-based options was immaterial.

37

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

	Shares			Weighted Average Grant Date Fair Value
	(In thousands)
Unvested at January 1, 2020		287		$	14.44
Granted		313			5.89
Vested		(174	)		7.77
Forfeited		(139	)		15.24
Unvested at December 31, 2020		287			8.78
Granted		163			7.21
Vested		(242	)		6.82
Forfeited		(6	)		14.99
Unvested at December 31, 2021		202			9.70

7. Employee Benefit Plan

The Company maintains a qualified 401(k) retirement plan for eligible employees. The Plan’s matching formula is 100% of the first 5% of participants’ qualified compensation. Compensation expense related to our matching contributions to the Plan for the years ended December 31, 2021 and 2020, were $0.1 million and $0.2 million, respectively.

8. Income Taxes

The federal and state provision (benefit) for income taxes was $0.0 million for the years ended December 31, 2021 and 2020.

The total income tax provision (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 21.0% for the years ended December 31, 2021 and 2020 to net income (loss) before income taxes as a result of the following:

	Year Ended December 31,
	2021			2020
Statutory tax expense (benefit)		21.0	%		(21.0	)%
Increase (decrease) in taxes resulting from:
Nondeductible expenses		3.3			4.1
Valuation allowance		(24.3	)		16.9
		0.0	%		0.0	%

38

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

	As of December 31,
	2021			2020
	(In thousands)
Deferred tax asset:
Carrying values of ownership interests and other holdings	$	31,985		$	38,361
Tax loss and credit carryforwards		77,045			76,023
Disallowed interest carryforwards		7,120			7,292
Accrued expenses		24			497
Stock-based compensation		268			302
Other		136			482
		116,578			122,957
Valuation allowance		(116,578	)		(122,957	)
Net deferred tax asset	$	—		$	—

As of December 31, 2021, the Company and its subsidiaries had federal net operating and capital loss carryforwards for tax purposes of approximately $367 million, of which approximately $52 million have an indefinite life. These carryforwards expire as follows: 

	Total
	(In thousands)
2022	$	47,137
2023		47,150
2024		50,140
2025		17,266
2026 and thereafter		152,923
	$	314,616

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

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

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

There were no changes in the Company’s uncertain tax positions for the years ended December 31, 2021 and 2020.

The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. Tax years 2015 and forward remain open for examination for federal tax purposes and the Company’s more significant state tax jurisdictions. To the extent utilized in future years’ tax returns, net operating loss carryforwards at December 31, 2021 will remain subject to examination until the respective tax year is closed. The Company recognizes penalties and interest accrued related to income tax liabilities in income tax benefit (expense) in the Consolidated Statements of Operations.

39

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

9. Net Income (Loss) Per Share

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

	Year Ended December 31,
	2021		2020
	(In thousands, except per share data)
Basic:
Net income (loss)	$	27,004	$	(37,615	)
Weighted average common shares outstanding		19,827		20,751
Net income (loss) per share	$	1.36	$	(1.81	)
Diluted:
Net income (loss)	$	27,004	$	(37,615	)
Weighted average common shares outstanding		19,827		20,751
Net income (loss) per share	$	1.36	$	(1.81	)

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 an equity method company has dilutive stock options, unvested restricted stock, DSUs, or warrants, diluted net income (loss) per share is computed by first deducting from net income (loss) the income attributable to the potential exercise of the dilutive securities of the 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 income (loss) per share for the years ended December 31, 2021 and 2020 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 December 31, 2021 and 2020, options to purchase 29 thousand and 45 thousand shares of common stock, respectively, at prices ranging from $10.37 to $17.11 per share, and $10.37 to $17.11 per share per share, respectively, were excluded from the calculation.

• At December 31, 2021 and 2020, unvested restricted stock, performance-based stock units and DSUs convertible into 0.2 million and 0.3 million shares of stock, respectively, were excluded from the calculations.

10. Related Party Transactions

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

11. Commitments and Contingencies

The Company and the companies in which it holds ownership interests 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 companies. The Company records costs associated with legal fees as such services are rendered.

40

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company has provided a guarantee, which is fully funded by escrowed funds held by a third party, of $3.8 million at December 31, 2021 which related to one of the Company's private equity holdings.

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 severance agreements for remaining employees is approximately $1.0 million at December 31, 2021.

In 2018, the Board of Directors (the “Board”) of the Company adopted a long-term incentive plan, which was amended in February 2019 and June 2020, known as the Amended and Restated Safeguard Scientifics Transaction Bonus Plan (the “LTIP”). The purpose of the LTIP is to promote the interests of the Company and its shareholders by providing an additional incentive to employees to maximize the value of the Company in connection with the execution of the business strategy that the Company adopted and announced in January 2018. The June 2020 amendment lowered the level of the first threshold and the resulting bonus pool percentage as an incentive to employees to accelerate actions consistent with the business strategy.  Under the LTIP, participants, which include certain current and former employees, have received awards that may result in cash payments in connection with sales of the Company’s ownership interests (“Sale Transaction(s)”). The LTIP provides for a bonus pool corresponding to: (i) specified vesting thresholds or (ii) specified events. In the first case, the bonus pool will range from an amount equal to 0.2% (previously 1.0%) of received proceeds at the first threshold to 1.3% at higher thresholds and no bonus pool will be created if the transaction consideration is less than certain minimum thresholds. In the second case, a minimum pool will be created and paid under specified circumstances. The bonus pool will be allocated and paid to participants in the LTIP based on the product of (i) the participant’s applicable bonus pool percentage and (ii) the bonus pool calculated as of the vesting date, minus any previously paid portion of the bonus pool. Any portion of the bonus pool available as of the applicable vesting date that is reserved will be allocated in connection with each vesting date so that the entire bonus pool available as of such vesting date is allocated and payable to participants. Subject to the terms of the LTIP, payments under the LTIP will be paid in cash within 60 days of the applicable vesting date. All current officers and employees of the Company are eligible to participate in the LTIP. The Board, in its sole discretion, will determine the participants to whom awards are granted under the LTIP. The Company recorded compensation expense of $0.7 million and $1.3 million during the years ended December 31, 2021 and 2020, respectively.  The Company paid $2.5 million during the year ended December 31, 2021 and has no amounts accrued under the LTIP as of   December 31, 2021.

In June 2011, Advanced BioHealing, Inc. (“ABH”) was acquired by Shire plc (“Shire”).  Prior to the expiration of the escrow period in March 2012, Shire 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 (the “Investigation”). In connection with the Investigation, in July 2015 the Company received a Civil Investigation Demand-Documentary Material (“CID”) from the DOJ regarding ABH and Safeguard’s relationship with ABH. Pursuant to the CID, the Company provided the requested materials and information.  To the Company’s knowledge, the CID was related to multiple qui tam (“whistleblower”) actions, one of which was filed in 2014 by an ex-employee of ABH that named the Company and one of the Company’s employees along with other entities and individuals as defendants.  At this time, the DOJ has declined to pursue the qui tam action as it relates to the Company and such Company employee. In addition, in connection with the above matters, the Company and other former equity holders in ABH entered into a settlement and release with Shire, which resulted in the release to Shire of all amounts held in escrow related to the sale of ABH.

12. Supplemental Cash Flow Information

During the years ended December 31, 2021 and 2020, the Company converted $1.0 million and $6.8 million, respectively, of advances into ownership interests. 

41

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

13. Segment Reporting

The Company operates as one operating segment based upon the similar nature of its technology-driven companies, the functional alignment of the organizational structure, and the reports that are regularly reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources.

As of December 31, 2021 and 2020, all of the Company’s assets were located in the United States.

42

SAFEGUARD SCIENTIFICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

14. Selected Quarterly Financial Information (Unaudited)  

	Three Months Ended
	March 31			June 30			September 30			December 31
	(In thousands, except per share data)
2021:
General and administrative expense	$	2,463		$	1,991		$	1,564		$	1,135
Operating loss		(2,463	)		(1,991	)		(1,564	)		(1,135	)
Other income (loss), net		706			6,733			20,588			(5,992	)
Interest income		53			74			70			79
Equity income (loss), net		19,329			(5,136	)		(761	)		(1,586	)
Net loss before income taxes		17,625			(320	)		18,333			(8,634	)
Income tax benefit (expense)		—			—			—			—
Net loss	$	17,625		$	(320	)	$	18,333		$	(8,634	)
Net loss per share (a)
Basic	$	0.84		$	(0.02	)	$	0.88		$	(0.51	)
Diluted	$	0.84		$	(0.02	)	$	0.88		$	(0.51	)
2020:
General and administrative expense	$	3,532		$	2,028		$	2,275		$	1,631
Operating loss		(3,532	)		(2,028	)		(2,275	)		(1,631	)
Other income (loss), net		(3,567	)		(2,658	)		(820	)		(663	)
Interest income		105			52			52			52
Equity income (loss), net		(9,014	)		(5,277	)		(1,300	)		(5,111	)
Net income (loss) before income taxes		(16,008	)		(9,911	)		(4,343	)		(7,353	)
Income tax benefit (expense)		—			—			—			—
Net income (loss)	$	(16,008	)	$	(9,911	)	$	(4,343	)	$	(7,353	)
Net income (loss) per share (a)
Basic	$	(0.77	)	$	(0.48	)	$	(0.21	)	$	(0.35	)
Diluted	$	(0.77	)	$	(0.48	)	$	(0.21	)	$	(0.35	)

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

15. Subsequent Events

During February 2022, the Company funded an additional $2.0 million of convertible loans to Prognos Health, Inc.  The Company has previously deployed an aggregate of $12.6 million.  Prognos is a healthcare platform company transforming the ability to access, manage and analyze healthcare data in partnership with Life Sciences brands, payers, and clinical diagnostics organizations. Prognos’ innovations enhance the value of laboratory results and clinical diagnostic data through advanced analytics and artificial intelligence technique.

43

  

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

None.

Item 9A. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2021. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of December 31, 2021 are functioning effectively.

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

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

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

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. In making this assessment, management used the framework established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As a result of this assessment and based on the criteria in the COSO framework, management has concluded that, as of December 31, 2021, the Company’s internal control over financial reporting was effective.

(c) Change in Internal Control over Financial Reporting

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

Item 9B. Other Information

None.

44

PART III

Item 10. Directors, Executive Officers and Corporate Governance

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

Item 11. Executive Compensation

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

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

The material features of our equity compensation plans are described in Note 7 to the Consolidated Financial Statements filed as part of our Annual Report on Form 10-K for the year ended December 31, 2021.

45

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

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

Item 14. Principal Accountant Fees and Services

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

46

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Consolidated Financial Statements and Schedules

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

(b) Exhibits

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

(c) Financial Statement Schedules

None.

Exhibits

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

		Incorporated Filing Reference
Exhibit Number	Description	Form Type & Filing Date	Original Exhibit Number
1.a	Description
3.1.1	Seconded Amended and Restated Articles of Incorporation of Safeguard Scientifics, Inc.	Form 8-K 10/25/07	3.1
3.1.2	Amendment to Seconded Amended and Restated Articles of Incorporation of Safeguard Scientifics, Inc.	Form 8-K 8/27/09	3.1
3.1.3	Statement with Respect to Shares	Form 10-Q 4/25/14	3.1
3.1.4	Statement of Designation of Series B Junior Participating Preferred Stock	Form 8-K 2/20/18	3.1
3.2	Third Amended and Restated By-laws of Safeguard Scientifics, Inc.	Form 8-K 2/13/18	3.1
10.1*	Safeguard Scientifics, Inc. 1999 Equity Compensation Plan, as amended and restated on October 21, 2008	Form 10-Q 11/6/08	10.4
10.2	Safeguard Scientifics, Inc. 2001 Associates Equity Compensation Plan, as amended and restated on October 21, 2008	Form 10-Q 11/6/08	10.5
10.3*	Safeguard Scientifics, Inc. 2014 Equity Compensation Plan, as amended and restated on March 5, 2014	Form 10-Q 7/25/14	10.1
10.4*	Safeguard Scientifics, Inc. Executive Deferred Compensation Plan (amended and restated as of January 1, 2009)	Form 10-K 3/19/09	10.4
10.5*	Management Incentive Plan	Form 8-K 4/25/08	10.1
10.6*	Amended and Restated Safeguard Scientifics, Inc. Transaction bonus plan	Form 10-Q 8/12/20	10.6
10.7	Compensation Summary — Non-employee Directors	—	—
10.9.2*	Letter Agreement between Safeguard Scientifics, Inc. and Eric Salzman dated December 21, 2021	Form 8-K 12/21/21	10.1

47

10.12*	Compensation Agreement by and between Safeguard Scientifics, Inc. and Mark Herndon dated September 17, 2018	Form 8-K 9/18/18	99.1
10.13*	Key Employee Compensation Recoupment Policy	Form 10-Q 7/26/13	10.2
10.14	Purchase and Sale Agreement dated as of December 9, 2005 by and among HarbourVest VII Venture Ltd., Dover Street VI L.P. and several subsidiaries and affiliated limited partnerships of Safeguard Scientifics, Inc.	Form 10-K 3/13/06	10.36
10.15	Consent Agreement, dated as of May 17, 2011, by and among Shire Pharmaceuticals, Inc. and certain stockholders of Advanced BioHealing, Inc.	Form 8-K 5/18/11	10.1
10.16	Lease Agreement, effective February 2, 2015, between Safeguard Scientifics, Inc., a Pennsylvania corporation, and Radnor Properties-SDC, L.P., a Delaware limited partnership	Form 10-Q 4/24/15	10.1
10.17	Sublease Agreement, effective March 15, 2019, by and between Safeguard Scientifics, Inc., a Pennsylvania corporation and the subtenant named therein	Form 8-K 3/20/19	10.1
14.1	Code of Business Conduct and Ethics	—	—
21.1 †	List of Subsidiaries	—	—
23.1 †	Consent of Independent Registered Public Accounting Firm — Grant Thornton LLP	—	—
23.2 †	Consent of Independent Registered Public Accounting Firm — KPMG LLP	—	—
31.1 †	Certification of Eric C. Salzman pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934	—	—
31.2 †	Certification of Mark A. Herndon pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934	—	—
32.1 ‡	Certification of Eric C. Salzman 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 Mark A. Herndon 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. Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL (eXtensible Business Reporting Language); (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income (Loss); (iv) Consolidated Statements of Changes in Shareholders' Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements.	—	—
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	—	—

†	Filed herewith
‡	Furnished herewith

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

48

SIGNATURES

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

SAFEGUARD SCIENTIFICS, INC.
By:	ERIC C. SALZMAN
	Eric C. Salzman
	Chief Executive Officer

Dated: March 11, 2022

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

Signature	Title	Date
ERIC C. SALZMAN	Chief Executive Officer (Principal Executive Officer)	March 11, 2022
Eric C. Salzman
MARK A. HERNDON	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	March 11, 2022
Mark A. Herndon
RUSSELL D. GLASS	Director	March 11, 2022
Russell D. Glass
JOSEPH M. MANKO, JR.	Director	March 11, 2022
Joseph M. Manko, Jr.
MAUREEN F. MORRISON	Director	March 11, 2022
Maureen F. Morrison
ROBERT J. ROSENTHAL	Chairman of the Board of Directors	March 11, 2022
Robert J. Rosenthal

49

EX-10.7

Exhibit 10.7

SAFEGUARD SCIENTIFICS, INC.

COMPENSATION SUMMARY - NON-EMPLOYEE DIRECTORS

Each of our non-employee directors is compensated for his or her service as a director through payments as shown in the table below:

Annual Board Retainers (for a full year of Board service):
	Chairman of the Board	$110,000
	Other Directors	$50,000
Additional Annual Chairperson Retainers (for a full year of committee service):
	Audit Committee	$15,000
	Compensation Committee	$10,000
	Nominating & Corporate Governance Committee	$10,000

The foregoing amounts are paid in the form of our common stock based upon the average closing price of a share of our common stock on the New York Stock Exchange composite tape for the 20 consecutive trading days immediately preceding the grant date.

Directors’ fees are paid quarterly, in arrears, and retainers are prorated based on actual days of service relative to a full year of Board service or the service period during which the fees were in effect. We also reimburse our directors for expenses they incur to attend our Board and committee meetings and for attendance at one director continuing education program during each calendar year or the reasonable cost of one year’s membership in an organization that is focused on director education.

Each non-employee director also receives an annual service grant of shares of restricted stock having a value of $75,000, based upon the average closing price of a share of our common stock on the New York Stock Exchange composite tape for the 20 consecutive trading days immediately preceding the grant date. The shares of restricted stock are fully vested at grant for those directors who have reached age 65 and otherwise shall vest 100% on the earlier of the first anniversary of the grant date or the director’s attainment of age 65.

EX-14.1

Exhibit 14.1

SAFEGUARD SCIENTIFICS, INC.

CODE OF BUSINESS CONDUCT AND ETHICS

I. Background - Administration

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

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

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

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

● provide mechanisms for Company Personnel to report unethical conduct.

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

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

Safeguard Scientifics, Inc.

Attention: Compliance Officer

150 N. Radnor Chester Rd., STE F-200

Radnor, PA 19087

e-mail address: complianceofficer@safeguard.com

II. Overview

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

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

www.safeguard.com © 2021 Safeguard Scientifics, Inc. All rights reserved. 1

III. Compliance With Law

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

● stealing, embezzling or misapplying corporate or bank funds;

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

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

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

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

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

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

IV. Conflicts of Interest

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

Outside Activities/Employment – Any outside activity must not significantly encroach on the time and attention Company Personnel devote to their corporate duties and must not adversely affect the quality or quantity of their work. In addition, Company Personnel may not make use of corporate equipment, facilities or supplies for, or imply (without the Company’s approval) the Company’s sponsorship or endorsement of, any outside activity, and under no circumstances are Company Personnel permitted to take for themselves or their family members business opportunities that are discovered or made available by virtue of their positions at the Company. Moreover, unless the Audit Committee of the Company’s Board of Directors shall have approved or ratified a particular transaction or situation in accordance with the Company’s Statement of Policy with Respect to Related Party Transactions, Company Personnel may not (i) have any financial or economic interest in (a) any entity that is, or to such person’s knowledge may become, a vendor to, or a customer or competitor of, the Company or any of the companies in which the Company has an interest; or (b) any entity that otherwise has or may have a relationship with, or might expect financial or other support from, the Company or any of the companies in which the Company has an interest; or (ii) provide services to or perform services for the benefit of any such entity, other than services performed at the request of or on behalf of the Company. For purposes of clarity and consistency, the preceding sentence shall be interpreted to include the purchase or other acquisition by any Company Personnel of any financial or economic interest in the companies in which the Company has, or is proposed to have, an interest, whether directly or through a public market transaction, or otherwise. Company employees are prohibited from taking part in any outside employment without Safeguard’s prior written approval.

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

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

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

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

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

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

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

Insider Trading – Company Personnel are prohibited from trading in securities while in possession of material, nonpublic information. Among other things, trading while in possession of material, nonpublic information can subject the person to criminal or civil penalties. The Company has adopted a Statement of Company Policy for Insider Trading and Disclosure and requires all Company Personnel to sign a statement acknowledging that they have read, understand and will comply with the policies set forth therein.

V. Fair Dealing

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

VI. Proper Use of Company Assets

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

VII. Delegation of Authority

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

VIII. Handling Confidential Information

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

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

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

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

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

● employee records;

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

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

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

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

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

● Do not discuss Confidential Information in public places.

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

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

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

IX. Public Disclosures

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

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

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

Complaints or concerns regarding accounting, internal accounting controls or audit matters must be reported to the Compliance Officer, to the Audit Committee of the Safeguard Board or through our external reporting system, MySafeWorkplace, as indicated in Article X of this Code. Company Personnel may choose to submit such complaints or concerns anonymously. However, we encourage Company Personnel to supply contact information with their submission to facilitate follow-up, clarification and assistance with any investigation, if necessary.

Special Ethics Guidelines for the Chief Executive Officer and Employees with Financial Reporting Responsibilities

The Chief Executive Officer and employees with financial reporting responsibilities bear a special responsibility for promoting integrity throughout the organization and have a special role both to adhere to these principles themselves and also to ensure that a culture exists throughout the Company as a whole that ensures the fair and timely reporting of Company financial results and condition, as well as other information required by SEC regulations. Because of this special role, the Chief Executive Officer and employees with financial reporting responsibilities are bound by the following additional specific policies.

The Chief Executive Officer and employees with financial reporting responsibilities shall:

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

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

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

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

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

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

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

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

● Endeavor to ensure responsible use of and control over all assets and resources employed or entrusted.

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

Promptly report to the Compliance Officer, the Audit Committee of the Safeguard Board, or through our external reporting system, MySafeWorkplace, any conduct that he or she believes to be a violation of law or business ethics or of any provision of this Code, including any transaction or relationship that reasonably could be expected to give rise to such a violation.

Violations of these Special Ethics Guidelines for the Chief Executive Officer and employees with financial reporting responsibilities, including failures to report violations or suspected violations by others, will be viewed as a severe disciplinary matter that may result in personnel action, including termination of employment.

X. Report of Violations

Administration – General Policy Regarding Report of Violations – Company Personnel who observe, learn of, or, in good faith, suspect a violation of the Code must immediately report the violation or suspected violation either to his or her immediate supervisor (who in turn is responsible for informing the Compliance Officer of such report) or to the Compliance Officer. Complaints or concerns regarding accounting, internal accounting controls or audit matters, must be reported to the Compliance Officer, to the Audit Committee of the Safeguard Board or through our external reporting system, MySafeWorkplace, as indicated in this Article X. You may be subject to disciplinary action, including termination of employment, for failure to do so.

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Complaint Procedure

● Notification of Complaint

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

Safeguard Scientifics, Inc.

Attention: Compliance Officer

150 N. Radnor Chester Rd., STE F-200

Radnor, PA 19087

e-mail address: complianceofficer@safeguard.com

● To report a violation, suspected violation, complaint or concern to the Audit Committee of the Safeguard Board, provide the report to the following address:

Safeguard Scientifics, Inc.

Attention: Audit Committee - CONFIDENTIAL

c/o Corporate Secretary

150 N. Radnor Chester Rd., STE F-200

Radnor, PA 19087

● If Company Personnel are not comfortable using the procedures and protocols outlined above, they can report a violation, suspected violation, complaint or concern by providing a report via our external, anonymous and confidential reporting system, MySafeWorkplace. Such report should be provided using the following internet address or telephone number:

Via Internet:         www.MySafeWorkplace.com

Via telephone:         800-461-9330

● Whenever practical, the complaint should be made in writing.

● You may choose to submit violations, suspected violations, complaints or concerns anonymously. However, we encourage Company Personnel to supply contact information with their submission to facilitate follow-up, clarification and assistance with any investigation, if necessary. Confidentiality is respected and an individual’s identity will only be shared on a “need-to-know” basis.

● Nothing in this Code prevents Company Personnel from reporting violations or suspected violations of law to relevant government authorities.

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● Investigation and Corrective Action

Reports of violations, suspected violations, complaints or concerns will promptly be investigated under the supervision of the Compliance Officer or, where appropriate, the Audit Committee of the Safeguard Board. Company Personnel are required to cooperate fully in such investigations and to provide truthful, complete and accurate information. The investigation will be handled as discreetly as reasonably possible, allowing for a fair investigation and any necessary corrective action. Appropriate corrective action will be taken whenever a violation of this Code is determined to have occurred. Depending on the nature of the violation, the offending individual can be subject to disciplinary action, which may include termination of employment. In addition, anyone who interferes with an investigation, or provides information in an investigation that the individual knows to be untrue or inaccurate, will be subject to disciplinary action, which may include termination of employment. Any employee who submits a complaint or concern relating to the handling of accounting, internal accounting controls or audit matters in good faith should have no fear of dismissal or retaliation of any kind. Retaliation against employees who, for lawful purposes, file a complaint or participate in an investigation is strictly prohibited.

The Audit Committee of the Safeguard Board will be responsible for the acceptance, investigation and management of reports of suspected violations of this Code by the Chief Executive Officer, the Compliance Officer and employees with financial reporting responsibilities and complaints or concerns regarding accounting, internal accounting controls or audit matters.

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

● Confidentiality 

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

XI. Protection Against Retaliation

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

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

Procedures for Reporting Policy Violations - If an employee believes that he or she has been retaliated against (including threatened or harassed) in violation of this Code, he or she should immediately report the retaliation either to his or her immediate supervisor (who in turn is responsible for informing the Compliance Officer of such report) or to the Compliance Officer in accordance with the contact procedures for the Compliance Officer set forth above. In connection with retaliation related to complaints or concerns regarding accounting, internal accounting controls or audit matters, any retaliation in violation of this Code must be reported to the Compliance Officer, the Audit Committee of the Safeguard Board or through our external reporting system, MySafeWorkplace, in accordance with the contact procedures set forth above. Once an employee reports retaliation prohibited by this Code, the Company will promptly investigate the matter in accordance with the procedures described in Article X of this Code.

XII. Waivers

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

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

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

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XIII. Compliance

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

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

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

XIV. Related Policies; Enforceable by Company Only

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

Adopted:           April 8, 2004

Last Approved: November 2, 2021

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APPENDIX I

INITIAL CODE OF BUSINESS CONDUCT AND ETHICS DISCLOSURE STATEMENT

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

1. I have received a copy of the Code.

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

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

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

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

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

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

____________________________

Signature

____________________________

Name

____________________________

Date

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APPENDIX II

ANNUAL CODE OF BUSINESS CONDUCT AND ETHICS DISCLOSURE STATEMENT

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

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

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

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

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

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

____________________________

Signature

____________________________

Name

____________________________

Date

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EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF SAFEGUARD SCIENTIFICS, INC.

Exclusive of immaterial subsidiaries and companies in which the Registrant holds a minority interest, as of March 11, 2022, the Registrant had the following subsidiaries:

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

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated March 11, 2022, with respect to the consolidated financial statements included in the Annual Report of Safeguard Scientifics, Inc. on Form 10-K for the year ended December 31, 2021. We consent to the incorporation by reference of said report in the Registration Statements of Safeguard Scientifics, Inc. on Forms S-8 (File Nos. 333-86777, 333-118046, 333-171226 and 333-198783).

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania
March 11, 2022

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the registration statements (No. 333-86777, 333-118046, 333-171226, and 333-198783) on Form S-8 of our report dated March 5, 2021, with respect to the consolidated financial statements of Safeguard Scientifics, Inc.

/s/ KPMG LLP

Philadelphia, Pennsylvania

March 11, 2022

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Eric C. Salzman, certify that:

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

		SAFEGUARD SCIENTIFICS, INC.
Date:	March 11, 2022	/s/ Eric C. Salzman
		Eric C. Salzman
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Mark A. Herndon, certify that:

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

		SAFEGUARD SCIENTIFICS, INC.
Date	March 11, 2022	/s/ Mark A. Herndon
		Mark A. Herndon
		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

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

of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Safeguard Scientifics, Inc. (“Safeguard”) on Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eric C. Salzman, Chief Executive Officer of Safeguard, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

		SAFEGUARD SCIENTIFICS, INC.
Date:	March 11, 2022	/s/ Eric C. Salzman
		Eric C. Salzman
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

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

of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Safeguard Scientifics, Inc. (“Safeguard”) on Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark A. Herndon, Senior Vice President and Chief Financial Officer of Safeguard, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

		SAFEGUARD SCIENTIFICS, INC.
Date:	March 11, 2022	/s/ Mark A. Herndon
		Mark A. Herndon
		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

XML

Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2021	Mar. 07, 2022	Jun. 30, 2021
Document Information [Line Items]
Entity Central Index Key	0000086115
Entity Registrant Name	SAFEGUARD SCIENTIFICS INC
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2021
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2021
Document Transition Report	false
Entity File Number	1-5620
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	23-1609753
Entity Address, Address Line One	150 N. Radnor Chester Road Suite F-200
Entity Address, City or Town	Radnor
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19087
City Area Code	610
Local Phone Number	293-0600
Title of 12(b) Security	Common Stock ($.10 par value)
Trading Symbol	SFE
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	true
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 154,839,292
Entity Common Stock, Shares Outstanding		16,629,844
Auditor Name	GRANT THORNTON LLP
Auditor Location	Philadelphia, Pennsylvania
Auditor Firm ID	248
ICFR Auditor Attestation Flag	false
KPMG LLP [Member]
Document Information [Line Items]
Auditor Name	KPMG LLP
Auditor Location	Philadelphia, Pennsylvania
Auditor Firm ID	185

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current Assets:
Cash and cash equivalents	$ 24,739	$ 15,601
Restricted cash	25	0
Ownership interests	4,549	0
Prepaid expenses and other current assets	965	462
Total current assets	30,278	16,063
Right-of-use asset, net	1,561	1,790
Ownership interests and advances	21,972	50,398
Other assets	217	784
Total Assets	54,028	69,035
Current Liabilities:
Accounts payable	41	56
Accrued compensation and benefits	794	2,677
Accrued expenses and other current liabilities	524	410
Lease liability - current	375	327
Total current liabilities	1,734	3,470
Other long-term liabilities	50	637
Lease liability - non-current	1,678	2,053
Total Liabilities	3,462	6,160
Commitments and contingencies (Note 11)
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 issued at December 31, 2021 and 2020, respectively	2,157	2,157
Additional paid-in capital	806,638	807,582
Treasury stock, at cost; 5,068 and 688 shares at December 31, 2021 and 2020, respectively	(48,569)	(10,200)
Accumulated deficit	(709,635)	(736,639)
Accumulated other comprehensive loss	(25)	(25)
Total Equity	50,566	62,875
Total Liabilities and Equity	$ 54,028	$ 69,035

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Consolidated Balance Sheets (Parentheticals) - $ / shares shares in Thousands	Dec. 31, 2021	Dec. 31, 2020
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, shares authorized (in shares)	1,000	1,000
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	83,333	83,333
Common stock, shares issued (in shares)	21,573	21,573
Common stock, shares outstanding (in shares)	21,573	21,573
Treasury stock, shares (in shares)	5,068	688

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Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended																12 Months Ended
	Dec. 31, 2021	[1]	Sep. 30, 2021	[1]	Jun. 30, 2021		Mar. 31, 2021		Dec. 31, 2020	[1]	Sep. 30, 2020	[1]	Jun. 30, 2020		Mar. 31, 2020		Dec. 31, 2021	Dec. 31, 2020
General and administrative expense	$ 1,135		$ 1,564		$ 1,991		$ 2,463		$ 1,631		$ 2,275		$ 2,028		$ 3,532		$ 7,153	$ 9,466
Operating loss	(1,135)		(1,564)		(1,991)		(2,463)		(1,631)		(2,275)		(2,028)		(3,532)		(7,153)	(9,466)
Other income (loss), net	(5,992)		20,588		6,733		706		(663)		(820)		(2,658)		(3,567)		22,035	(7,708)
Interest income	79		70		74		53		52		52		52		105		276	261
Equity income (loss), net	(1,586)		(761)		(5,136)		19,329		(5,111)		(1,300)		(5,277)		(9,014)		11,846	(20,702)
Net income (loss) before income taxes	(8,634)		18,333		(320)		17,625		(7,353)		(4,343)		(9,911)		(16,008)		27,004	(37,615)
Net income (loss)	$ (8,634)		$ 18,333		$ (320)		$ 17,625		$ (7,353)		$ (4,343)		$ (9,911)		$ (16,008)		$ 27,004	$ (37,615)
Net income (loss) per share:
Basic (in dollars per share)	$ (0.51)	[2]	$ 0.88	[2]	$ (0.02)	[2]	$ 0.84	[2]	$ (0.35)	[2]	$ (0.21)	[2]	$ (0.48)	[2]	$ (0.77)	[2]	$ 1.36	$ (1.81)
Diluted (in dollars per share)	$ (0.51)	[2]	$ 0.88	[2]	$ (0.02)	[2]	$ 0.84	[2]	$ (0.35)	[2]	$ (0.21)	[2]	$ (0.48)	[2]	$ (0.77)	[2]	$ 1.36	$ (1.81)
Weighted average shares used in computing net income (loss) per share:
Basic (in shares)																	19,827	20,751
Diluted (in shares)																	19,827	20,751

[1] The three months ended December 31, 2019 includes equity income of $1.4 million related to an equity method investment that should have been recorded during the three months ended September 30, 2019. There was no impact on the full year results.

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

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Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2019	$ (697,223)	$ (25)	$ 2,157	$ 810,856	$ (14,024)	$ 101,741
Balance (in shares) at Dec. 31, 2019			21,573		930
Net income (loss)	(37,615)					(37,615)
Restricted stock awards, forfeitures and shares repurchased for tax withholdings, net				(3,864)	$ 3,824	(40)
Restricted stock awards, forfeitures and shares repurchased for tax withholdings, net (in shares)					(242)
Stock-based compensation				590		590
Change in accounting at ownership interests	(1,801)					(1,801)
Balance at Dec. 31, 2020	(736,639)	(25)	$ 2,157	807,582	$ (10,200)	62,875
Balance (in shares) at Dec. 31, 2020			21,573		688
Net income (loss)	27,004					27,004
Restricted stock awards, forfeitures and shares repurchased for tax withholdings, net				(1,550)	$ 2,286	736
Restricted stock awards, forfeitures and shares repurchased for tax withholdings, net (in shares)					(161)
Stock-based compensation				606		606
Repurchases of common stock					$ (40,655)	(40,655)
Repurchases of common stock (in shares)					4,541
Balance at Dec. 31, 2021	$ (709,635)	$ (25)	$ 2,157	$ 806,638	$ (48,569)	$ 50,566
Balance (in shares) at Dec. 31, 2021			21,573		5,068

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Cash Flows from Operating Activities:
Net income (loss)	$ 27,004	$ (37,615)
Adjustments to reconcile to net cash used in operating activities:
Amortization of right of use asset	229	311
Equity (income) loss, net	(11,846)	9,420
Impairments of ownership interests and advances	2,521	20,039
Gain from observable price changes	(8,505)	(1,224)
Gain from sales of ownership interests	(35,284)	0
Change in fair value of ownership interests	19,255	0
Other, net	(22)	175
Stock-based compensation, including liability classified awards	1,779	965
Changes in assets and liabilities:
Prepaid expenses and other current assets	(238)	(137)
Accounts payable, accrued expenses, and other current liabilities	(3,045)	(77)
Net cash used in operating activities	(8,152)	(8,143)
Cash Flows from Investing Activities:
Acquisitions of ownership interests	0	(7,534)
Proceeds from sales and distributions from ownership interests	60,832	7,903
Advances and loans to ownership interests	(2,718)	(1,638)
Net cash provided by (used in) investing activities	58,114	(1,269)
Cash Flows from Financing Activities:
Repurchases of common stock	(40,655)	0
Tax withholdings related to equity-based awards	(144)	(40)
Net cash used in financing activities	(40,799)	(40)
Net change in cash, cash equivalents and restricted cash	9,163	(9,452)
Cash, cash equivalents and restricted cash equivalents at beginning of period	15,601	25,053
Cash, cash equivalents and restricted cash at end of period	$ 24,764	$ 15,601

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Note 1 - General

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. General

Liquidity And Capital Resources

As of December 31, 2021, Safeguard Scientifics, Inc. ("the Company") had $24.7 million of cash and cash equivalents.

In January 2018, Safeguard ceased deploying capital into new opportunities in order to focus on supporting the existing ownership interests and maximizing monetization opportunities to enable returning value to shareholders.   We have considered and taken action on various initiatives including the sale of our ownership interests, the sale of certain or all of our ownership interests in secondary market transactions as well as other opportunities to maximize shareholder value. As we seek to provide additional funding to existing companies where we have an ownership interest, we may be required to expend our cash or incur debt, which will decrease our liquidity.  From time to time, we are engaged in discussions concerning acquisitions and dispositions which, if consummated, could impact our liquidity, perhaps significantly.  Accordingly, the Company could also pursue other sources of capital in order to maintain its liquidity.    

The Company believes that its cash and cash equivalents at December 31, 2021 will be sufficient to fund operations past one year from the issuance of these consolidated financial statements. 

Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Safeguard and all of its wholly-owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

Principles of Accounting for Ownership Interests in Companies

The Company accounts for its ownership interests using one of the following methods: Equity or Other. The accounting method applied is generally determined by the degree of the Company's influence over the entity, primarily determined by our voting interest in the entity.

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

Equity Method. The Company accounts for ownership interests whose results are not consolidated, but over which it exercises significant influence, under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an ownership interest depends on an evaluation of several factors including, among others, representation on the board of directors and our ownership level, which is generally a 20% to 50% interest in the voting securities of a company, including voting rights associated with the Company’s holdings in common, preferred and other convertible instruments in the company. The Company records the initial ownership interest at cost.  Under the equity method of accounting, the Company does not reflect a company’s financial statements within our Consolidated Financial Statements; however, our share of the income or loss of such company is reflected in Equity income (loss), net in the Consolidated Statements of Operations.  The Company also adjust the carrying value to reflect third party investments in the ownership interests, which typically result in a dilution gain. The Company includes the carrying value of equity method companies in Ownership interests and advances on the Consolidated Balance Sheets. Any excess of the Company’s cost over its underlying interest in the net assets of equity method companies that is allocated to intangible assets is amortized over the estimated useful lives of the related intangible assets. The Company reflects its share of the income or loss of the equity method companies on a one quarter lag. This reporting lag could result in a delay in recognition of the impact of changes in the business or operations of these companies.

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

Other Method. We account for ownership interests in companies that are not accounted for under the equity method that do not have a readily determinable fair value under the fair value measurement alternative.  Under the fair value measurement alternative, these ownership interests are based on our original cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar interests of the same issuer.  Under this method, our share of the income or losses of such companies is not included in our Consolidated Statements of Operations, however, the result of observable price changes, if any, are reflected in Other income (loss), net. We include the carrying value of these interests in Ownership interests and advances on the Consolidated Balance Sheets.

The Company accounts for ownership interests that are not accounted for under the equity method and have a readily determinable fair value at fair value based on the closing stock price on the last trading day of the reporting period.  As of December 31, 2021 those ownership interests consist of approximately 1.3 million common shares of Bright Health Group ("Bright Health") valued at $4.5 million.  

Comprehensive Income (loss) 

During the years ended December 31, 2021 or 2020, there were no items of comprehensive income (loss).

Accounting Estimates

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

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

It is reasonably possible that the Company’s accounting estimates with respect to the ultimate recoverability of the carrying value of the Company’s ownership interests and advances could change in the near term and that the effect of such changes on the consolidated financial statements could be material. At December 31, 2021, the Company believes the carrying value of the Company’s ownership interests and advances is not impaired, although there can be no assurance that the Company’s future results will confirm this assessment, that a significant write-down or write-off will not be required in the future or that a significant loss will not be recorded in the future upon the sale of a company.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash and cash equivalents consist of deposits that are readily convertible into cash.  The Company has not experienced any significant losses on cash equivalents and does not believe it is exposed to any significant credit risk on cash and cash equivalents.

Restricted Cash

Restricted cash equivalents represents cash required to be set aside by a contractual agreement as a shareholder representative. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statements of Cash Flows:

	December 31, 2021		December 31, 2020
	(In thousands)
Cash and cash equivalents	$	24,739	$	15,601
Restricted cash		25		—
Total cash, cash equivalents and restricted cash	$	24,764	$	15,601

Financial Instruments

The Company’s financial instruments (principally cash and cash equivalents, accounts receivable, notes receivable, accounts payable and accrued expenses) are carried at cost, which approximates fair value due to the short-term maturity of these instruments. 

Right-of-use asset

Right-of-use assets represent an operating lease for office facilities.  The right-of-use assets are reduced over the remaining term of the applicable lease (principally April 2026) in a manner that results in a straight-line lease expense, when combined with the interest factor on the lease liability.     

Lease liability

The initial lease liability represents the present value of the fixed escalating lease payments through April 2026 associated with the Company's prior corporate headquarters operating office lease. The discount rate used to calculate the lease liability was based on the Company's incremental borrowing rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease, which was approximately 12%, at the transition to the guidance of ASU No. 2016-02, Leases. Subsequent values of the lease liability reflect the reduction in the lease liability for operating lease payments less an amount representing interest, which is included in the straight-line lease expense. There is no residual value guarantee associated with this operating lease arrangement. The Company has incurred operating lease expenses and operating cash outflows of $0.5 million for each of the years ended December 31, 2021 and 2020, respectively, and $0.6 million for each of the years ended December 31, 2021 and 2020.

In March 2019, the Company entered into a sublease of its prior corporate headquarters office space. The term of the sublease is through April 2026, the same as the Company's underlying lease. Fixed sublease payments to the Company are escalating over the term of the sublease and are reported as a component of general and administrative expenses.

In April 2019, the Company entered into a sublease for replacement office space with a related party, an equity method ownership interest, beginning in June 2019. The 18 month term of this sublease expired in 2020. The aggregate payments under this sublease were not material.

A summary of the Company's operating lease cash flows at December 31, 2021 follows:

	Operating lease payments			Expected sublease receipts
	(In thousands)
2022	$	601		$	540
2023		607			556
2024		613			573
2025		619			590
2026		207			199
2027		—			—
Thereafter		—			—
Total future minimum lease payments		2,647			2,458
Less imputed interest		(595	)
Total operating lease liabilities	$	2,052

Impairment of Ownership Interests and Advances

On a periodic basis, but no less frequently than quarterly, the Company evaluates the carrying value of its ownership interests and advances for possible impairment based on achievement of business plan objectives and milestones, the estimated value of each company relative to its carrying value, the financial condition and prospects of the company and other relevant factors. The business plan objectives and milestones the Company considers include, among others, those related to financial performance, such as achievement of planned financial results or completion of capital raising activities, and those that are not primarily financial in nature, such as hiring of key employees or the establishment of strategic relationships.

Management then determines whether there has been an other than temporary decline in the value of its ownership interest in the company. Impairment is measured as the amount by which the carrying value of an asset exceeds its estimated fair value.

The estimated fair value of privately held companies is generally determined based on the value at which independent third parties have invested or have committed to invest in these companies or based on other valuation methods, including discounted cash flows, valuation of comparable public companies and the valuation of acquisitions of similar companies.

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

The reduced cost basis of a previously impaired company accounted for using the Equity method are not written-up if circumstances suggest the value of the company has subsequently recovered.

Income Taxes

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

Net Income (Loss) Per Share

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

Segment Information

The Company operates as one operating segment based upon the similar nature of its technology-driven companies, the functional alignment of the organizational structure, and the reports that are regularly reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources.

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Note 2 - Ownership Interests and Advances

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Investments in and Advances to Affiliates, Schedule of Investments [Text Block]

2. Ownership Interests and Advances

The following summarizes the carrying value of the Company’s ownership interests and advances.

	December 31, 2021		December 31, 2020
	(In thousands)
Equity Method:
Companies	$	21,091	$	27,550
Private equity funds		117		271
		21,208		27,821
Other Method:
Companies, fair value		4,549		—
Companies, fair value measurement alternative		514		19,683
Private equity funds, fair value measurement alternative		250		268
		5,313		19,951
Advances to companies		—		2,626
	$	26,521	$	50,398

In March 2021, Zipnosis, Inc. was acquired by another entity, Bright Health.  The Company received $3.5 million in cash proceeds, including escrows, and $15.3 million in preferred equity in the acquiror in connection with this transaction.  This ownership interest represented a security that did not have a readily determinable fair value.  Due to the inherent uncertainty of determining the fair value of ownership interests that do not have a readily determinable fair value, this estimated value  may differ significantly from the value that would have been reported had a ready market for the security existed, and it is reasonably possible that the difference could be material.  The Company recognized a $17.3 million gain on the sale, which is included in Equity income (loss), net in the Consolidated Statements of Operations.  The fair value of the ownership interest received as a result of the acquisition was estimated based on evaluating several valuation methods available, including the value at which independent third parties have recently invested, the valuation of comparable public companies, and the present value of our expected outcomes.  Assumptions considered within these methods include determining which public companies are comparable, projecting forward revenues, selecting an appropriate valuation multiple, discounts to apply for the lack of marketability or lack of comparability, other factors and the relative weight to apply to each valuation method available.  Due to the unobservable nature of some of these inputs, we have determined this initial estimate to be a Level 3 fair value measurement.  During the three months ended June 30, 2021, Bright Health completed an initial public offering that resulted in our ownership interest converting into approximately 1.3 million common shares.  Accordingly, the Bright Health common shares represent an ownership interest with a readily determinable fair value (Level 1), which will subsequently be measured at fair value with unrealized gains (losses) being reported as a component of Other income (loss), net.  As a result, the Company recognized a $10.8 million unrealized loss, net, on Bright Health subsequent to the initial public offering during the year-ended December 31, 2021. Subsequent to December 31, 2021, the fair value of our Bright Health ownership interest declined to approximately $2.3 million as of March 7, 2022.

In August 2021, Flashtalking was acquired by another entity.  The Company has received $45.0 million in cash proceeds, including escrows, and included a $32.5 million gain in Other income (loss), net, during the year ended December 31, 2021.  The Company may receive additional amounts of up to approximately $0.5 million over the next 24 months from the resolution of escrow contingencies.  

In January 2021, WebLinc, Inc. was acquired by another entity.  The Company has received $3.6 million in cash proceeds to-date and may receive additional amounts over the next 12 months based on certain transactional performance activities, which could be partially offset by indemnifiable claims.  The Company has recognized a $0.1 million loss on the sale during the year ended December 31, 2021, which is included in Equity income (loss), as certain contingencies were resolved.  To the extent additional amounts are collected as contingencies are resolved, those amounts will be recorded as gain on the sale and included within Equity income (loss). 

QuanticMind and Hoopla were acquired in separate transactions during the first quarter of 2021 by other entities, however there were no resultant proceeds to the Company.  There was no resulting gain or loss due to this equity method ownership interest being impaired during the prior year.

In March 2021, the Company's ownership interest in T-REX Group, Inc., which was accounted for using the fair value measurement alternative, was acquired for $3.0 million in cash.  The Company recognized a $0.9 million gain, which is included in Other income (loss), net.  

In April 2021, Velano Vascular was acquired by another entity.  The Company has received $3.5 million in cash proceeds, including escrows, and included a $1.9 million gain in Other income (loss), net, for the year ended December 31, 2021.  The Company  may receive additional amounts over the next 12 months from the resolution of escrow contingencies.

In December 2021, the Company received $2 million of contingent proceeds resulting from resolution of certain valuation thresholds remaining from the 2018 sale of AdvantEdge Healthcare Solutions.

During the year ended December 31, 2021, the Company recorded an impairment of $2.5 million related to reduced expectations for certain Other ownership interests, which is included in Other income (loss), net. 

In September 2020, Sonobi, Inc. was acquired by another entity for cash. The Company received $6.6 million in cash proceeds in connection with this transaction, excluding holdbacks and escrows. The Company recognized an insignificant gain on the sale, which is included in Equity income (loss), net in the Consolidated Statements of Operations.

During the year ended December 31, 2020, the Company recorded impairments of $11.3 million related to the ownership interests of WebLinc, Inc., QuanticMind, Inc. and Sonobi, Inc. accounted for under the equity method, which are reflected in Equity income (loss), net in the Consolidated Statement of Operations.  During the year ended December 31, 2020, the Company also recorded impairments of $8.8 million related to the ownership interests of T-REX Group, Inc., b8ta and others accounted for under the Other method, which are reflected in Other income (loss), net in the Consolidated Statement of Operations. The impairments were determined based on declines in the fair value of our ownership interests resulting from reduced valuation expectations and extended exit timelines resulting from the more challenging mergers and acquisitions environment related to COVID-19 and the related uncertain economic impact. The measurement of fair value for these impairments was estimated based on evaluating several valuation inputs available for each of the applicable ownership interests, primarily including the value at which independent third parties have invested, the valuation of comparable public companies, the valuation of acquisitions of similar companies and the present value of our expected outcomes. Assumptions considered within these methods include determining which public companies are comparable, projecting forward revenues for the measured ownership interest, discounts to apply for the lack of marketability or lack of comparability, other factors and the relative weight to apply to each valuation input available. Due to the unobservable nature of some of these inputs, we have determined these fair value estimates to be non-recurring Level 3 fair value measurements.

During the year ended December 31, 2020, the Company recorded a $1.5 million non-cash gain based upon an observable price change related to our ownership interest in Flashtalking Inc. accounted for under the Other method, which is reflected in Other income (loss), net in the Consolidated Statement of Operations. During the year ended December 31, 2020, the Company also recorded a $0.3 million non-cash Other loss based on an observable price change for another ownership interest accounted for under the Other method.

As of December 31, 2021, the Company held ownership interests accounted for using the equity method in 9 non-consolidated companies. 

Certain of the Company’s ownership interests as of December 31, 2021 and 2020 included the following:

	Safeguard Primary Ownership as of December 31,
Company Name	2021	2020	Accounting Method
Aktana, Inc.	13.4%	15.1%	Equity
Clutch Holdings, Inc.	41.7%	42.3%	Equity
InfoBionic, Inc.	25.2%	25.2%	Equity
Lumesis, Inc.	43.2%	43.4%	Equity
MediaMath, Inc.	13.2%	13.3%	Other
meQuilibrium	31.9%	32.0%	Equity
Moxe Health Corporation	27.6%	27.6%	Equity
Prognos Health Inc.	28.5%	28.5%	Equity
Syapse, Inc.	11.1%	18.9%	Equity
Trice Medical, Inc.	12.6%	16.6%	Equity

Summarized Financial Information

The following table provides summarized financial information for ownership interests accounted for under the equity method for the periods presented and has been compiled from respective company financial statements, reflect certain historical adjustments, and are reported on a one quarter lag. Results of operations are excluded for periods prior to their acquisition and subsequent to their disposition. Historical results are not adjusted when the Company exits or writes-off a company. 

	As of December 31,
	2021			2020
	(In thousands)
Balance Sheets:
Current assets	$	127,651		$	104,024
Non-current assets		53,220			26,352
Total assets	$	180,871		$	130,376
Current liabilities	$	62,538		$	72,972
Non-current liabilities		158,975			105,506
Shareholders’ deficit		(40,642	)		(48,102	)
Total liabilities and shareholders’ deficit	$	180,871		$	130,376
Number of equity method ownership interests		9			12

	Year Ended December 31,
	2021			2020
	(In thousands)
Results of Operations:
Revenue	$	140,670		$	153,875
Gross profit	$	90,388		$	92,039
Net loss	$	(106,363	)	$	(82,216	)

As of December 31, 2021, the Company’s carrying value in equity method companies, in the aggregate, exceeded the Company’s share of the net assets of such companies by approximately $11.4 million. Of this excess, $10.4 million was allocated to goodwill and $1.0 million was allocated to intangible assets.

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Note 3 - Acquisitions of Ownership Interests

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Equity Method and Other Investments Disclosure [Text Block]

3. Acquisitions of Ownership Interests

2021 Transactions

The Company funded $1.7 million to Aktana, Inc. during the three months ended September 30, 2021. The Company had previously deployed an aggregate of $14.2 million. Aktana helps its customers improve their commercial effectiveness by delivering data-driven insights and suggestions directly to sales reps, coordinating multi-channel actions and providing insight regarding which strategies work best for which customers under which conditions.

Syapse raised $68 million of preferred equity during the three months ended March 31, 2021, which reduced the Company's ownership interest to approximately 11.1%.  The Company recorded a $7.3 million dilution gain as a result of this transaction, which is included in Equity income (loss), net in the Consolidated Statements of Operation.  Syapse drives healthcare transformation through precision medicine, enabling provider systems to improve clinical outcomes, streamline operations, and shift to new payment models.

The Company funded $1 million of convertible loans to Trice Medical, Inc. during the three months ended June 30, 2021.  The Company had previously deployed an aggregate of $10.8 million.  Trice Medical is foucsed on orthopedic diagnostics using fully integrated camera-enabled technologies to provide clinical solutions to physicians.  During the three months ended September 30, 2021, Trice Medical raised additional preferred equity which reduced the Company's ownership interest to 12.6%.  The Company's existing convertible loans and related interst in Trice Medical were also converted into this new class of preferred equity.  As a result of this transaction, the Company recorded a $2.0 million dilution gain for the year ended December 31, 2021.

2020 Transactions

The Company deployed an additional $2.5 million to Aktana, Inc.

       The Company deployed an additional $4.4 million to Syapse, Inc.

The Company deployed an additional $1.0 million to meQuilibrium.

The Company funded an additional $0.7 million of convertible loans to Trice Medical, Inc.

The Company deployed an aggregate of $0.2 million to Clutch Holdings.

The Company funded an additional $0.2 million of convertible loans to QuanticMind.  See Note 2 for impairment recorded in 2020 and the sale of this ownership interest in 2021.

The Company funded an aggregate of $0.1 million of convertible loans to WebLinc, Inc. See Note 2 for impairment recorded in 2020 and the sale of this ownership interest in 2021.

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Note 4 - Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Fair Value Disclosures [Text Block]

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 (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.

Cash, cash equivalents and restricted cash approximate fair value due to their short term nature.  The Company did not have any Level 2 or Level 3 financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020.

	Carrying		Fair Value Measurement at December 31, 2021
	Value		Level 1		Level 2		Level 3
	(in thousands)
Cash and cash equivalents	$	24,739	$	24,739	$	—	$	—
Restricted cash	$	25	$	25	$	—	$	—
Ownership interests	$	4,549	$	4,549	$	—	$	—

	Carrying		Fair Value Measurement at December 31, 2020
	Value		Level 1		Level 2		Level 3
	(In thousands)
Cash and cash equivalents	$	15,601	$	15,601	$	—	$	—

Ownership interests accounted for at fair value as of December 31, 2021 consist of approximately 1.3 million common shares of Bright Health. The securities are carried at fair value based on the closing stock price on the last trading day of the reporting period. The Company was restricted from trading these securities until December 2021 as a result of a six-month lock-up agreement from the Bright Health Group initial public offering.

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Note 5 - Equity

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

5. 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 years ended December 31, 2021 and 2020, the Company did not repurchase any shares under the existing authorization. 

In May 2021, the Company's Board of Directors authorized a new $6.0 million share repurchase program using existing funds in accordance with the requirements of Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934, as amended.  During the year ended December 31, 2021, the Company repurchased 236,159 shares for an aggregate price of $1.6 million at an average cost of $6.94 per share.  

During October 2021, the Company completed a modified Dutch auction self-tender that resulted in the repurchase of 4.3 million common shares for an aggregated price of $39.0 million, or $9.06 per share, including $0.3 million of transaction costs.

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Note 6 - Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

6. Stock-Based Compensation

Equity Compensation Plans

The 2014 Equity Compensation Plan has 4.1 million shares authorized for issuance. During 2021 and 2020, the Company issued no stock-based awards outside of existing plans. To the extent allowable, service-based options are incentive stock options. Options granted under the plans are at prices equal to or greater than the fair market value at the date of grant. Upon exercise of stock options, the Company issues shares first from treasury stock, if available, then from authorized but unissued shares. At December 31, 2021, the Company had reserved 2.6 million shares of common stock for possible future issuance under its 2014 Equity Compensation Plan and other previously expired equity compensation plans.

Classification of Stock-Based Compensation Expense

Stock-based compensation consists of time based awards to employees, financial liability based awards to employees and non-employees to be settled in stock, performance based awards to employees, and financial liability based awards to Directors for quarterly and annual services. Stock-based compensation expense was recognized in the Consolidated Statements of Operations as follows: 

	Year Ended December 31,
	2021		2020
	(In thousands)
General and administrative expense	$	1,779	$	965
	$	1,779	$	965

Stock-based compensation expense of $1.2 million and $1.0 million was recognized during the years ended December 31, 2021 and 2020, respectively, related to annual and quarterly Board fees, time based management awards and management bonuses earned during the year that were subsequently settled in stock.  For the years ended December 31, 2021 and 2020, respectively, the Company issued 83 thousand and 93 thousand of restricted shares to Directors for their annual and quarterly services.  The annual grants vest over a one year period, or are vested at issuance for directors 65 or older, while quarterly amounts are paid in arrears.  The Company vested 95 thousand and 78 thousand during the years ended December 31, 2021 and 2020.  The Company vested 67 thousand and 96 thousand  shares during the years ended December 31, 2021 and 2020, respectively, for time based management compensation.  The Company settled in stock other management bonuses resulting in the issuance of 60 thousand and 0 thousand vested shares for the years ended December 31, 2021 and 2020, respectively.  The Company issued 20 thousand vested shares to a non-employee for services during 2021. The Company had liabilities of $0.8 million and $0.5 million as of December 31, 2021 and 2020, respectively, that were settled through the issuance of common stock in the subsequent period. 

The Company has previously granted certain performance-based stock units that vest based on the achievement of targeted capital returns based on net cash proceeds received by the Company on the sale, merger or other exit transaction of certain identified companies. The requisite service periods for these performance-based awards were based on the Company’s estimate of when the performance conditions will be met. Compensation expense was recognized for performance-based awards for which the performance condition is considered probable of achievement. During the years ended December 31, 2021 and 2020, respectively, 6 thousand and 129 thousand performance-based stock units pursuant to these targeted capital return pools were canceled or forfeited. The Company recorded a reduction of compensation expense related to these performance-based awards of $0.1 million and $0.7 million for the years ended December 31, 2021 and 2020  respectively. During 2020 and in January 2022, the Company also granted a CEO bonus award that will be settled in the vesting of performance-based units based on criteria determined by the Board of Directors.  The performance-based stock units represent the right to receive shares of the Company’s common stock, on a one-for-one basis at target, or up to 120% with respect to the 2020 grant, for certain specified thresholds. The 2020 award resulted in $0.5 million of compensation cost in 2021 based upon the vesting of 85 thousand performance based units. The January 2022 award could result in the vesting of up to 80 thousand performance-based stock units.

Unrecognized compensation expense related to performance stock units and restricted stock at December 31, 2021 was immaterial.

While there were no stock options granted during 2021 and 2020, the Company had outstanding options that vest based on two different types of vesting schedules:

1) performance-based; and

2) service-based.

Performance-based option awards also entitled participants to vest in a number of awards determined by achievement by the Company of target capital returns based on net cash proceeds received by the Company upon the sale, merger or other exit transaction of certain identified companies. 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.  The Company did not issue any performance-based units during the years ended December 31, 2021 and 2020.  During the years ended December 31, 2021 and 2020, respectively, 1 thousand and 0 performance-based options vested and an immaterial amount of compensation cost was recognized.  During the years ended December 31, 2021 and 2020, respectively, 11 thousand and 72 thousand performance-based options were canceled or forfeited. The maximum number of unvested options at December 31, 2021 attainable under these grants was 10 thousand shares.

Service-based awards generally vest over four years after the date of grant and expire eight years after the date of grant. Compensation expense is recognized over the requisite service period using the straight-line method. The requisite service period for service-based awards is the period over which the award vests. During the years ended December 31, 2021 and 2020, respectively, the Company issued no service-based options to employees and recorded $0.0 million of compensation expense from the vesting of previously issued awards. During the years ended December 31, 2021 and 2020, respectively, 5 thousand and 62 thousand service-based options were canceled or forfeited.  

Option activity of the Company is summarized below: 

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Outstanding at January 1, 2020		179			15.27
Options granted		—			—
Options exercised		—			—
Options canceled/forfeited		(134	)		14.36
Outstanding at December 31, 2020		45			14.20
Options granted		—			—
Options exercised		—			—
Options canceled/forfeited		(16	)		14.20
Outstanding at December 31, 2021		29			14.20		1.85	$	—
Options exercisable at December 31, 2021		19			14.06		2.43		—
Shares available for future grant		2,374

At December 31, 2021, total unrecognized compensation cost related to non-vested service-based options was immaterial. At December 31, 2021, total unrecognized compensation cost related to non-vested performance-based options was immaterial.

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

	Shares			Weighted Average Grant Date Fair Value
	(In thousands)
Unvested at January 1, 2020		287		$	14.44
Granted		313			5.89
Vested		(174	)		7.77
Forfeited		(139	)		15.24
Unvested at December 31, 2020		287			8.78
Granted		163			7.21
Vested		(242	)		6.82
Forfeited		(6	)		14.99
Unvested at December 31, 2021		202			9.70

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Note 7 - Employee Benefit Plan

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

7. Employee Benefit Plan

The Company maintains a qualified 401(k) retirement plan for eligible employees. The Plan’s matching formula is 100% of the first 5% of participants’ qualified compensation. Compensation expense related to our matching contributions to the Plan for the years ended December 31, 2021 and 2020, were $0.1 million and $0.2 million, respectively.

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Note 8 - Income Taxes

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8. Income Taxes

The federal and state provision (benefit) for income taxes was $0.0 million for the years ended December 31, 2021 and 2020.

The total income tax provision (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 21.0% for the years ended December 31, 2021 and 2020 to net income (loss) before income taxes as a result of the following:

	Year Ended December 31,
	2021			2020
Statutory tax expense (benefit)		21.0	%		(21.0	)%
Increase (decrease) in taxes resulting from:
Nondeductible expenses		3.3			4.1
Valuation allowance		(24.3	)		16.9
		0.0	%		0.0	%

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

	As of December 31,
	2021			2020
	(In thousands)
Deferred tax asset:
Carrying values of ownership interests and other holdings	$	31,985		$	38,361
Tax loss and credit carryforwards		77,045			76,023
Disallowed interest carryforwards		7,120			7,292
Accrued expenses		24			497
Stock-based compensation		268			302
Other		136			482
		116,578			122,957
Valuation allowance		(116,578	)		(122,957	)
Net deferred tax asset	$	—		$	—

As of December 31, 2021, the Company and its subsidiaries had federal net operating and capital loss carryforwards for tax purposes of approximately $367 million, of which approximately $52 million have an indefinite life. These carryforwards expire as follows: 

	Total
	(In thousands)
2022	$	47,137
2023		47,150
2024		50,140
2025		17,266
2026 and thereafter		152,923
	$	314,616

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

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

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

There were no changes in the Company’s uncertain tax positions for the years ended December 31, 2021 and 2020.

The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. Tax years 2015 and forward remain open for examination for federal tax purposes and the Company’s more significant state tax jurisdictions. To the extent utilized in future years’ tax returns, net operating loss carryforwards at December 31, 2021 will remain subject to examination until the respective tax year is closed. The Company recognizes penalties and interest accrued related to income tax liabilities in income tax benefit (expense) in the Consolidated Statements of Operations.

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Note 9 - Net Income (Loss) Per Share

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Earnings Per Share [Text Block]

9. Net Income (Loss) Per Share

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

	Year Ended December 31,
	2021		2020
	(In thousands, except per share data)
Basic:
Net income (loss)	$	27,004	$	(37,615	)
Weighted average common shares outstanding		19,827		20,751
Net income (loss) per share	$	1.36	$	(1.81	)
Diluted:
Net income (loss)	$	27,004	$	(37,615	)
Weighted average common shares outstanding		19,827		20,751
Net income (loss) per share	$	1.36	$	(1.81	)

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 an equity method company has dilutive stock options, unvested restricted stock, DSUs, or warrants, diluted net income (loss) per share is computed by first deducting from net income (loss) the income attributable to the potential exercise of the dilutive securities of the 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 income (loss) per share for the years ended December 31, 2021 and 2020 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 December 31, 2021 and 2020, options to purchase 29 thousand and 45 thousand shares of common stock, respectively, at prices ranging from $10.37 to $17.11 per share, and $10.37 to $17.11 per share per share, respectively, were excluded from the calculation.

• At December 31, 2021 and 2020, unvested restricted stock, performance-based stock units and DSUs convertible into 0.2 million and 0.3 million shares of stock, respectively, were excluded from the calculations.

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Note 10 - Related Party Transactions

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

10. Related Party Transactions

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

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Note 11 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

11. Commitments and Contingencies

The Company and the companies in which it holds ownership interests 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 companies. The Company records costs associated with legal fees as such services are rendered.

The Company has provided a guarantee, which is fully funded by escrowed funds held by a third party, of $3.8 million at December 31, 2021 which related to one of the Company's private equity holdings.

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 severance agreements for remaining employees is approximately $1.0 million at December 31, 2021.

In 2018, the Board of Directors (the “Board”) of the Company adopted a long-term incentive plan, which was amended in February 2019 and June 2020, known as the Amended and Restated Safeguard Scientifics Transaction Bonus Plan (the “LTIP”). The purpose of the LTIP is to promote the interests of the Company and its shareholders by providing an additional incentive to employees to maximize the value of the Company in connection with the execution of the business strategy that the Company adopted and announced in January 2018. The June 2020 amendment lowered the level of the first threshold and the resulting bonus pool percentage as an incentive to employees to accelerate actions consistent with the business strategy.  Under the LTIP, participants, which include certain current and former employees, have received awards that may result in cash payments in connection with sales of the Company’s ownership interests (“Sale Transaction(s)”). The LTIP provides for a bonus pool corresponding to: (i) specified vesting thresholds or (ii) specified events. In the first case, the bonus pool will range from an amount equal to 0.2% (previously 1.0%) of received proceeds at the first threshold to 1.3% at higher thresholds and no bonus pool will be created if the transaction consideration is less than certain minimum thresholds. In the second case, a minimum pool will be created and paid under specified circumstances. The bonus pool will be allocated and paid to participants in the LTIP based on the product of (i) the participant’s applicable bonus pool percentage and (ii) the bonus pool calculated as of the vesting date, minus any previously paid portion of the bonus pool. Any portion of the bonus pool available as of the applicable vesting date that is reserved will be allocated in connection with each vesting date so that the entire bonus pool available as of such vesting date is allocated and payable to participants. Subject to the terms of the LTIP, payments under the LTIP will be paid in cash within 60 days of the applicable vesting date. All current officers and employees of the Company are eligible to participate in the LTIP. The Board, in its sole discretion, will determine the participants to whom awards are granted under the LTIP. The Company recorded compensation expense of $0.7 million and $1.3 million during the years ended December 31, 2021 and 2020, respectively.  The Company paid $2.5 million during the year ended December 31, 2021 and has no amounts accrued under the LTIP as of   December 31, 2021.

In June 2011, Advanced BioHealing, Inc. (“ABH”) was acquired by Shire plc (“Shire”).  Prior to the expiration of the escrow period in March 2012, Shire 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 (the “Investigation”). In connection with the Investigation, in July 2015 the Company received a Civil Investigation Demand-Documentary Material (“CID”) from the DOJ regarding ABH and Safeguard’s relationship with ABH. Pursuant to the CID, the Company provided the requested materials and information.  To the Company’s knowledge, the CID was related to multiple qui tam (“whistleblower”) actions, one of which was filed in 2014 by an ex-employee of ABH that named the Company and one of the Company’s employees along with other entities and individuals as defendants.  At this time, the DOJ has declined to pursue the qui tam action as it relates to the Company and such Company employee. In addition, in connection with the above matters, the Company and other former equity holders in ABH entered into a settlement and release with Shire, which resulted in the release to Shire of all amounts held in escrow related to the sale of ABH.

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Note 12 - Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

12. Supplemental Cash Flow Information

During the years ended December 31, 2021 and 2020, the Company converted $1.0 million and $6.8 million, respectively, of advances into ownership interests. 

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Note 13 - Segment Reporting

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

13. Segment Reporting

The Company operates as one operating segment based upon the similar nature of its technology-driven companies, the functional alignment of the organizational structure, and the reports that are regularly reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources.

As of December 31, 2021 and 2020, all of the Company’s assets were located in the United States.

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Note 14 - Selected Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Quarterly Financial Information [Text Block]

14. Selected Quarterly Financial Information (Unaudited)  

	Three Months Ended
	March 31			June 30			September 30			December 31
	(In thousands, except per share data)
2021:
General and administrative expense	$	2,463		$	1,991		$	1,564		$	1,135
Operating loss		(2,463	)		(1,991	)		(1,564	)		(1,135	)
Other income (loss), net		706			6,733			20,588			(5,992	)
Interest income		53			74			70			79
Equity income (loss), net		19,329			(5,136	)		(761	)		(1,586	)
Net loss before income taxes		17,625			(320	)		18,333			(8,634	)
Income tax benefit (expense)		—			—			—			—
Net loss	$	17,625		$	(320	)	$	18,333		$	(8,634	)
Net loss per share (a)
Basic	$	0.84		$	(0.02	)	$	0.88		$	(0.51	)
Diluted	$	0.84		$	(0.02	)	$	0.88		$	(0.51	)
2020:
General and administrative expense	$	3,532		$	2,028		$	2,275		$	1,631
Operating loss		(3,532	)		(2,028	)		(2,275	)		(1,631	)
Other income (loss), net		(3,567	)		(2,658	)		(820	)		(663	)
Interest income		105			52			52			52
Equity income (loss), net		(9,014	)		(5,277	)		(1,300	)		(5,111	)
Net income (loss) before income taxes		(16,008	)		(9,911	)		(4,343	)		(7,353	)
Income tax benefit (expense)		—			—			—			—
Net income (loss)	$	(16,008	)	$	(9,911	)	$	(4,343	)	$	(7,353	)
Net income (loss) per share (a)
Basic	$	(0.77	)	$	(0.48	)	$	(0.21	)	$	(0.35	)
Diluted	$	(0.77	)	$	(0.48	)	$	(0.21	)	$	(0.35	)

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

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Note 15 - Subsequent Event

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Subsequent Events [Text Block]

15. Subsequent Events

During February 2022, the Company funded an additional $2.0 million of convertible loans to Prognos Health, Inc.  The Company has previously deployed an aggregate of $12.6 million.  Prognos is a healthcare platform company transforming the ability to access, manage and analyze healthcare data in partnership with Life Sciences brands, payers, and clinical diagnostics organizations. Prognos’ innovations enhance the value of laboratory results and clinical diagnostic data through advanced analytics and artificial intelligence technique.

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial statements include the accounts of Safeguard and all of its wholly-owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

Investment, Policy [Policy Text Block]

Principles of Accounting for Ownership Interests in Companies

The Company accounts for its ownership interests using one of the following methods: Equity or Other. The accounting method applied is generally determined by the degree of the Company's influence over the entity, primarily determined by our voting interest in the entity.

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

Equity Method. The Company accounts for ownership interests whose results are not consolidated, but over which it exercises significant influence, under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an ownership interest depends on an evaluation of several factors including, among others, representation on the board of directors and our ownership level, which is generally a 20% to 50% interest in the voting securities of a company, including voting rights associated with the Company’s holdings in common, preferred and other convertible instruments in the company. The Company records the initial ownership interest at cost.  Under the equity method of accounting, the Company does not reflect a company’s financial statements within our Consolidated Financial Statements; however, our share of the income or loss of such company is reflected in Equity income (loss), net in the Consolidated Statements of Operations.  The Company also adjust the carrying value to reflect third party investments in the ownership interests, which typically result in a dilution gain. The Company includes the carrying value of equity method companies in Ownership interests and advances on the Consolidated Balance Sheets. Any excess of the Company’s cost over its underlying interest in the net assets of equity method companies that is allocated to intangible assets is amortized over the estimated useful lives of the related intangible assets. The Company reflects its share of the income or loss of the equity method companies on a one quarter lag. This reporting lag could result in a delay in recognition of the impact of changes in the business or operations of these companies.

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

Other Method. We account for ownership interests in companies that are not accounted for under the equity method that do not have a readily determinable fair value under the fair value measurement alternative.  Under the fair value measurement alternative, these ownership interests are based on our original cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar interests of the same issuer.  Under this method, our share of the income or losses of such companies is not included in our Consolidated Statements of Operations, however, the result of observable price changes, if any, are reflected in Other income (loss), net. We include the carrying value of these interests in Ownership interests and advances on the Consolidated Balance Sheets.

The Company accounts for ownership interests that are not accounted for under the equity method and have a readily determinable fair value at fair value based on the closing stock price on the last trading day of the reporting period.  As of December 31, 2021 those ownership interests consist of approximately 1.3 million common shares of Bright Health Group ("Bright Health") valued at $4.5 million.  

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income (loss) 

During the years ended December 31, 2021 or 2020, there were no items of comprehensive income (loss).

Use of Estimates, Policy [Policy Text Block]

Accounting Estimates

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

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

It is reasonably possible that the Company’s accounting estimates with respect to the ultimate recoverability of the carrying value of the Company’s ownership interests and advances could change in the near term and that the effect of such changes on the consolidated financial statements could be material. At December 31, 2021, the Company believes the carrying value of the Company’s ownership interests and advances is not impaired, although there can be no assurance that the Company’s future results will confirm this assessment, that a significant write-down or write-off will not be required in the future or that a significant loss will not be recorded in the future upon the sale of a company.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

The Company considers all highly liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash and cash equivalents consist of deposits that are readily convertible into cash.  The Company has not experienced any significant losses on cash equivalents and does not believe it is exposed to any significant credit risk on cash and cash equivalents.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash

Restricted cash equivalents represents cash required to be set aside by a contractual agreement as a shareholder representative. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statements of Cash Flows:

	December 31, 2021		December 31, 2020
	(In thousands)
Cash and cash equivalents	$	24,739	$	15,601
Restricted cash		25		—
Total cash, cash equivalents and restricted cash	$	24,764	$	15,601

Fair Value of Financial Instruments, Policy [Policy Text Block]

Financial Instruments

The Company’s financial instruments (principally cash and cash equivalents, accounts receivable, notes receivable, accounts payable and accrued expenses) are carried at cost, which approximates fair value due to the short-term maturity of these instruments. 

Right-of-use Assets [Policy Text Block]

Right-of-use asset

Right-of-use assets represent an operating lease for office facilities.  The right-of-use assets are reduced over the remaining term of the applicable lease (principally April 2026) in a manner that results in a straight-line lease expense, when combined with the interest factor on the lease liability.     

Lessee, Leases [Policy Text Block]

Lease liability

The initial lease liability represents the present value of the fixed escalating lease payments through April 2026 associated with the Company's prior corporate headquarters operating office lease. The discount rate used to calculate the lease liability was based on the Company's incremental borrowing rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease, which was approximately 12%, at the transition to the guidance of ASU No. 2016-02, Leases. Subsequent values of the lease liability reflect the reduction in the lease liability for operating lease payments less an amount representing interest, which is included in the straight-line lease expense. There is no residual value guarantee associated with this operating lease arrangement. The Company has incurred operating lease expenses and operating cash outflows of $0.5 million for each of the years ended December 31, 2021 and 2020, respectively, and $0.6 million for each of the years ended December 31, 2021 and 2020.

In March 2019, the Company entered into a sublease of its prior corporate headquarters office space. The term of the sublease is through April 2026, the same as the Company's underlying lease. Fixed sublease payments to the Company are escalating over the term of the sublease and are reported as a component of general and administrative expenses.

In April 2019, the Company entered into a sublease for replacement office space with a related party, an equity method ownership interest, beginning in June 2019. The 18 month term of this sublease expired in 2020. The aggregate payments under this sublease were not material.

A summary of the Company's operating lease cash flows at December 31, 2021 follows:

	Operating lease payments			Expected sublease receipts
	(In thousands)
2022	$	601		$	540
2023		607			556
2024		613			573
2025		619			590
2026		207			199
2027		—			—
Thereafter		—			—
Total future minimum lease payments		2,647			2,458
Less imputed interest		(595	)
Total operating lease liabilities	$	2,052

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Ownership Interests and Advances

On a periodic basis, but no less frequently than quarterly, the Company evaluates the carrying value of its ownership interests and advances for possible impairment based on achievement of business plan objectives and milestones, the estimated value of each company relative to its carrying value, the financial condition and prospects of the company and other relevant factors. The business plan objectives and milestones the Company considers include, among others, those related to financial performance, such as achievement of planned financial results or completion of capital raising activities, and those that are not primarily financial in nature, such as hiring of key employees or the establishment of strategic relationships.

Management then determines whether there has been an other than temporary decline in the value of its ownership interest in the company. Impairment is measured as the amount by which the carrying value of an asset exceeds its estimated fair value.

The estimated fair value of privately held companies is generally determined based on the value at which independent third parties have invested or have committed to invest in these companies or based on other valuation methods, including discounted cash flows, valuation of comparable public companies and the valuation of acquisitions of similar companies.

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

The reduced cost basis of a previously impaired company accounted for using the Equity method are not written-up if circumstances suggest the value of the company has subsequently recovered.

Income Tax, Policy [Policy Text Block]

Income Taxes

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

Earnings Per Share, Policy [Policy Text Block]

Net Income (Loss) Per Share

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

Segment Reporting, Policy [Policy Text Block]

Segment Information

The Company operates as one operating segment based upon the similar nature of its technology-driven companies, the functional alignment of the organizational structure, and the reports that are regularly reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources.

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Note 1 - General (Tables)

12 Months Ended

Dec. 31, 2021

Notes Tables

Restrictions on Cash and Cash Equivalents [Table Text Block]

	December 31, 2021		December 31, 2020
	(In thousands)
Cash and cash equivalents	$	24,739	$	15,601
Restricted cash		25		—
Total cash, cash equivalents and restricted cash	$	24,764	$	15,601

Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity [Table Text Block]

	Operating lease payments			Expected sublease receipts
	(In thousands)
2022	$	601		$	540
2023		607			556
2024		613			573
2025		619			590
2026		207			199
2027		—			—
Thereafter		—			—
Total future minimum lease payments		2,647			2,458
Less imputed interest		(595	)
Total operating lease liabilities	$	2,052

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Note 2 - Ownership Interests and Advances (Tables)

12 Months Ended

Dec. 31, 2021

Notes Tables

Schedule of Investments in and Advances to Affiliates, Schedule of Investments [Table Text Block]

	December 31, 2021		December 31, 2020
	(In thousands)
Equity Method:
Companies	$	21,091	$	27,550
Private equity funds		117		271
		21,208		27,821
Other Method:
Companies, fair value		4,549		—
Companies, fair value measurement alternative		514		19,683
Private equity funds, fair value measurement alternative		250		268
		5,313		19,951
Advances to companies		—		2,626
	$	26,521	$	50,398

Schedule of Other Ownership Interests [Table Text Block]

	Safeguard Primary Ownership as of December 31,
Company Name	2021	2020	Accounting Method
Aktana, Inc.	13.4%	15.1%	Equity
Clutch Holdings, Inc.	41.7%	42.3%	Equity
InfoBionic, Inc.	25.2%	25.2%	Equity
Lumesis, Inc.	43.2%	43.4%	Equity
MediaMath, Inc.	13.2%	13.3%	Other
meQuilibrium	31.9%	32.0%	Equity
Moxe Health Corporation	27.6%	27.6%	Equity
Prognos Health Inc.	28.5%	28.5%	Equity
Syapse, Inc.	11.1%	18.9%	Equity
Trice Medical, Inc.	12.6%	16.6%	Equity

Equity Method Investment Partner Company Results Of Operation [Table Text Block]

	As of December 31,
	2021			2020
	(In thousands)
Balance Sheets:
Current assets	$	127,651		$	104,024
Non-current assets		53,220			26,352
Total assets	$	180,871		$	130,376
Current liabilities	$	62,538		$	72,972
Non-current liabilities		158,975			105,506
Shareholders’ deficit		(40,642	)		(48,102	)
Total liabilities and shareholders’ deficit	$	180,871		$	130,376
Number of equity method ownership interests		9			12

Equity Method Investments [Table Text Block]

	Year Ended December 31,
	2021			2020
	(In thousands)
Results of Operations:
Revenue	$	140,670		$	153,875
Gross profit	$	90,388		$	92,039
Net loss	$	(106,363	)	$	(82,216	)

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Note 4 - Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Carrying		Fair Value Measurement at December 31, 2021
	Value		Level 1		Level 2		Level 3
	(in thousands)
Cash and cash equivalents	$	24,739	$	24,739	$	—	$	—
Restricted cash	$	25	$	25	$	—	$	—
Ownership interests	$	4,549	$	4,549	$	—	$	—

	Carrying		Fair Value Measurement at December 31, 2020
	Value		Level 1		Level 2		Level 3
	(In thousands)
Cash and cash equivalents	$	15,601	$	15,601	$	—	$	—

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Note 6 - Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Notes Tables

Share-based Payment Arrangement, Activity [Table Text Block]

	Year Ended December 31,
	2021		2020
	(In thousands)
General and administrative expense	$	1,779	$	965
	$	1,779	$	965

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Outstanding at January 1, 2020		179			15.27
Options granted		—			—
Options exercised		—			—
Options canceled/forfeited		(134	)		14.36
Outstanding at December 31, 2020		45			14.20
Options granted		—			—
Options exercised		—			—
Options canceled/forfeited		(16	)		14.20
Outstanding at December 31, 2021		29			14.20		1.85	$	—
Options exercisable at December 31, 2021		19			14.06		2.43		—
Shares available for future grant		2,374

Schedule Of Activity For Restricted Stock Units Deferred Stock Units And Performance Units [Table Text Block]

	Shares			Weighted Average Grant Date Fair Value
	(In thousands)
Unvested at January 1, 2020		287		$	14.44
Granted		313			5.89
Vested		(174	)		7.77
Forfeited		(139	)		15.24
Unvested at December 31, 2020		287			8.78
Granted		163			7.21
Vested		(242	)		6.82
Forfeited		(6	)		14.99
Unvested at December 31, 2021		202			9.70

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Note 8 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Notes Tables

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Year Ended December 31,
	2021			2020
Statutory tax expense (benefit)		21.0	%		(21.0	)%
Increase (decrease) in taxes resulting from:
Nondeductible expenses		3.3			4.1
Valuation allowance		(24.3	)		16.9
		0.0	%		0.0	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	As of December 31,
	2021			2020
	(In thousands)
Deferred tax asset:
Carrying values of ownership interests and other holdings	$	31,985		$	38,361
Tax loss and credit carryforwards		77,045			76,023
Disallowed interest carryforwards		7,120			7,292
Accrued expenses		24			497
Stock-based compensation		268			302
Other		136			482
		116,578			122,957
Valuation allowance		(116,578	)		(122,957	)
Net deferred tax asset	$	—		$	—

Summary of Operating Loss Carryforwards [Table Text Block]

	Total
	(In thousands)
2022	$	47,137
2023		47,150
2024		50,140
2025		17,266
2026 and thereafter		152,923
	$	314,616

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Note 9 - Net Income (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Year Ended December 31,
	2021		2020
	(In thousands, except per share data)
Basic:
Net income (loss)	$	27,004	$	(37,615	)
Weighted average common shares outstanding		19,827		20,751
Net income (loss) per share	$	1.36	$	(1.81	)
Diluted:
Net income (loss)	$	27,004	$	(37,615	)
Weighted average common shares outstanding		19,827		20,751
Net income (loss) per share	$	1.36	$	(1.81	)

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Note 14 - Selected Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2021

Notes Tables

Quarterly Financial Information [Table Text Block]

	Three Months Ended
	March 31			June 30			September 30			December 31
	(In thousands, except per share data)
2021:
General and administrative expense	$	2,463		$	1,991		$	1,564		$	1,135
Operating loss		(2,463	)		(1,991	)		(1,564	)		(1,135	)
Other income (loss), net		706			6,733			20,588			(5,992	)
Interest income		53			74			70			79
Equity income (loss), net		19,329			(5,136	)		(761	)		(1,586	)
Net loss before income taxes		17,625			(320	)		18,333			(8,634	)
Income tax benefit (expense)		—			—			—			—
Net loss	$	17,625		$	(320	)	$	18,333		$	(8,634	)
Net loss per share (a)
Basic	$	0.84		$	(0.02	)	$	0.88		$	(0.51	)
Diluted	$	0.84		$	(0.02	)	$	0.88		$	(0.51	)
2020:
General and administrative expense	$	3,532		$	2,028		$	2,275		$	1,631
Operating loss		(3,532	)		(2,028	)		(2,275	)		(1,631	)
Other income (loss), net		(3,567	)		(2,658	)		(820	)		(663	)
Interest income		105			52			52			52
Equity income (loss), net		(9,014	)		(5,277	)		(1,300	)		(5,111	)
Net income (loss) before income taxes		(16,008	)		(9,911	)		(4,343	)		(7,353	)
Income tax benefit (expense)		—			—			—			—
Net income (loss)	$	(16,008	)	$	(9,911	)	$	(4,343	)	$	(7,353	)
Net income (loss) per share (a)
Basic	$	(0.77	)	$	(0.48	)	$	(0.21	)	$	(0.35	)
Diluted	$	(0.77	)	$	(0.48	)	$	(0.21	)	$	(0.35	)

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Note 1 - General (Details Textual) - USD ($) $ in Thousands, shares in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Apr. 30, 2019
Cash and Cash Equivalents, at Carrying Value, Ending Balance	$ 24,739	$ 15,601
Debt Securities, Trading, and Equity Securities, FV-NI, Total	4,549	$ 0
Lessee, Operating Lease, Discount Rate		12.00%
Operating Lease, Cost	500	$ 500
Operating Lease, Payments	$ 600	$ 600
Lessor, Operating Lease, Term of Contract (Month)			18 months
Bright Health [Member]
Investment Owned, Balance, Shares (in shares)	1.3
Debt Securities, Trading, and Equity Securities, FV-NI, Total	$ 4,500

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Note 1 - General - Schedule of Restrictions on Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash and Cash Equivalents, at Carrying Value, Ending Balance	$ 24,739	$ 15,601
Restricted cash	25	0
Total cash, cash equivalents and restricted cash	$ 24,764	$ 15,601	$ 25,053

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Note 1 - General - Schedule of Leases (Details) $ in Thousands	Dec. 31, 2021 USD ($)
2022, operating lease payments	$ 601
2022	540
2023, operating lease payments	607
2023, expected sublease receipts	556
2024, operating lease payments	613
2024, expected sublease receipts	573
2025, operating lease payments	619
2025, expected sublease receipts	590
2026, operating lease payments	207
2026, expected sublease receipts	199
2027, operating lease payments	0
2027, expected sublease receipts	0
Thereafter, operating lease payments	0
Thereafter, expected sublease receipts	0
Total future minimum lease payments, operating lease payments	2,647
Total future minimum lease payments, expected sublease receipts	2,458
Less imputed interest	(595)
Total operating lease liabilities	$ 2,052

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Note 2 - Ownership Interests and Advances (Details Textual) - USD ($) $ in Thousands, shares in Millions		1 Months Ended	12 Months Ended
	Mar. 07, 2022	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Equity Securities without Readily Determinable Fair Value, Amount		$ 5,313	$ 5,313	$ 19,951
Impairment of Other Method Securities			2,500
Equity Securities, FV-NI, Unrealized Gain (Loss), Total				(300)
Equity Method Investment Assets Exceed Carrying Value Of Investment		11,400	11,400
Intangible Assets [Member]
Equity Method Investment Allocation of Excess Fair Value		10,400	10,400
Goodwill [Member]
Equity Method Investment Allocation of Excess Fair Value		1,000	1,000
Preferred Equity in Acquiror in Connection with Sale of Zipnosis, Inc [Member]
Equity Securities without Readily Determinable Fair Value, Amount		$ 15,300	15,300
Zipnosis [Member]
Proceeds from Sale of Equity Method Investments			3,500
Equity Method Investment, Realized Gain (Loss) on Disposal, Total			$ 17,300
Investment Owned, Balance, Shares (in shares)		1.3	1.3
Bright Health [Member]
Investment Owned, Balance, Shares (in shares)		1.3	1.3
Trading Security, Unrealized Gain (Loss)			$ (10,800)
Bright Health [Member] | Subsequent Event [Member]
Investment Owned, at Fair Value	$ 2,300
Flashtalking [Member]
Proceeds From Sale of Other Method Investment			45,000
Other Method Investment, Realized Gain (Loss)			32,500
Flashtalking [Member] | Forecast [Member]
Contingent Proceeds from Other Method Investment	$ 500
WebLinc, Inc. [Member]
Proceeds from Sale of Equity Method Investments			3,600
Equity Method Investment, Realized Gain (Loss) on Disposal, Total			100
Equity Method Investment, Other than Temporary Impairment				11,300
T-Rex Group, Inc [Member]
Equity Method Investment, Realized Gain (Loss) on Disposal, Total			900
Proceeds From Sale of Other Method Investment			3,000
Equity Method Investment, Other than Temporary Impairment				8,800
Velano Vascular [Member]
Proceeds from Sale of Equity Method Investments			3,500
Equity Method Investment, Realized Gain (Loss) on Disposal, Total			$ 1,900
Disposal Group, Including Discontinued Operation, Period of Contingent Proceeds (Month)			12 months
AdvantEdge Healthcare Solutions, Inc. [Member]
Contingent Proceeds from Sale of Equity Method Investments		$ 2,000
Sonobi [Member]
Proceeds from Sale of Equity Method Investments				6,600
Flashtalking, Inc. [Member]
Equity Securities, FV-NI, Unrealized Gain (Loss), Total				$ 1,500

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Note 2 - Ownership Interests and Advances - Schedule of Carrying Value of Ownership Interests (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Equity Method Companies	$ 21,208	$ 27,821
Ownership interests	4,549	0
Other Method, fair value measurement alternative	5,313	19,951
Advances to companies	0	2,626
Investments and Advances to Affiliates, Current and Noncurrent	26,521	50,398
Partnership Interest [Member]
Equity Method Companies	21,091	27,550
Ownership interests	4,549	0
Other Method, fair value measurement alternative	514	19,683
Private Equity Funds [Member]
Equity Method Companies	117	271
Other Method, fair value measurement alternative	$ 250	$ 268

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Note 2 - Ownership Interests and Advances - Schedule of Ownership Interests (Details)	Dec. 31, 2021	Dec. 31, 2020
Aktana, Inc. [Member]
Ownership Interest	13.40%	15.10%
Clutch Holdings [Member]
Ownership Interest	41.70%	42.30%
InfoBionic, Inc. [Member]
Ownership Interest	25.20%	25.20%
Lumesis, Inc. [Member]
Ownership Interest	43.20%	43.40%
MediaMath, Inc. [Member]
Ownership Interest	13.20%	13.30%
meQuilibrium [Member]
Ownership Interest	31.90%	32.00%
Moxe Health Corporation [Member]
Ownership Interest	27.60%	27.60%
Prognos Health, Inc. [Member]
Ownership Interest	28.50%	28.50%
Syapse, Inc. [Member]
Ownership Interest	11.10%	18.90%
Trice Medical, Inc. [Member]
Ownership Interest	12.60%	16.60%

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Note 2 - Ownership Interests and Advances - Schedule of Equity Method Investment Partner Company Results Of Operation (Details) $ in Thousands	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Current assets	$ 30,278	$ 16,063
Total Assets	54,028	69,035
Current liabilities	1,734	3,470
Total Liabilities and Equity	54,028	69,035
High Traction Stage [Member]
Current assets	127,651	104,024
Non-current assets	53,220	26,352
Total Assets	180,871	130,376
Current liabilities	62,538	72,972
Non-current liabilities	158,975	105,506
Shareholders’ deficit	(40,642)	(48,102)
Total Liabilities and Equity	$ 180,871	$ 130,376
Number of equity method ownership interests	9	12

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Note 2 - Ownership Interests and Advances - Schedule of Results of Operations (Details) - Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Revenue	$ 140,670	$ 153,875
Gross profit	90,388	92,039
Net loss	$ (106,363)	$ (82,216)

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Note 3 - Acquisitions of Ownership Interests (Details Textual) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended	12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Equity Method Investments					$ 21,208	$ 27,821
Payments to Acquire Equity Method Investments					$ (0)	$ 7,534
Syapse, Inc. [Member]
Proceeds from Issuance of Preferred Stock and Preference Stock			$ 68,000
Equity Method Investment, Ownership Percentage			11.10%
Aktana, Inc. [Member]
Convertible Bridge Loan	$ 1,700
Equity Method Investments	14,200			$ 14,200
Equity Method Investment, Ownership Percentage					13.40%	15.10%
Payments to Acquire Equity Method Investments						$ 2,500
Syapse, Inc. [Member]
Equity Method Investment, Ownership Percentage					11.10%	18.90%
Equity Method Investment, Dilution Gain				7,300
Payments to Acquire Equity Method Investments						$ 4,400
Trice Medical, Inc. [Member]
Convertible Bridge Loan		$ 1,000				$ 700
Equity Method Investment, Ownership Percentage					12.60%	16.60%
Trice Medical [Member]
Equity Method Investments	$ 10,800			$ 10,800
Equity Method Investment, Ownership Percentage	12.60%			12.60%
Equity Method Investment, Dilution Gain						$ 2,000
meQuilibrium [Member]
Equity Method Investment, Ownership Percentage					31.90%	32.00%
Payments to Acquire Equity Method Investments						$ 1,000
Clutch Holdings [Member]
Equity Method Investment, Ownership Percentage					41.70%	42.30%
Payments to Acquire Equity Method Investments						$ 200
QuanticMind [Member]
Convertible Bridge Loan						200
WebLinc, Inc. [Member]
Convertible Bridge Loan						$ 100

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Note 4 - Fair Value Measurements (Details Textual) shares in Millions	Dec. 31, 2021 shares
Bright Health [Member]
Investment Owned, Balance, Shares (in shares)	1.3

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Note 4 - Fair Value Measurements - Fair Value of Assets and Liabilities Measured On Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Reported Value Measurement [Member]
Cash and cash equivalents	$ 24,739	$ 15,601
Restricted cash	25
Ownership interests	4,549
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	24,739	15,601
Restricted cash	25
Ownership interests	4,549
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents	0	0
Restricted cash	0
Ownership interests	0
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents	0	$ 0
Restricted cash	0
Ownership interests	$ 0

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Note 5 - Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Oct. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	May 31, 2021	Jul. 31, 2015
Treasury Stock, Value, Acquired, Cost Method		$ 40,655
Share Repurchase Program Authorized in July 2015 [Member]
Stock Repurchase Program, Authorized Amount					$ 25,000
Treasury Stock, Shares, Acquired (in shares)		0	0
Share Repurchase Program Authorized in May 2021 [Member]
Stock Repurchase Program, Authorized Amount				$ 6,000
Treasury Stock, Shares, Acquired (in shares)		236,159
Treasury Stock, Value, Acquired, Cost Method		$ 1,600
Treasury Stock Acquired, Average Cost Per Share (in dollars per share)		$ 6.94
Dutch Auction Self-tender [Member]
Treasury Stock, Shares, Acquired (in shares)	4,300,000
Treasury Stock, Value, Acquired, Cost Method	$ 39,000
Treasury Stock Acquired, Average Cost Per Share (in dollars per share)	$ 9.06
Treasury Stock, Transaction Costs	$ 300

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Note 6 - Stock-Based Compensation (Details Textual) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) shares
Share-based Payment Arrangement, Expense | $	$ 1,779	$ 965
Share-based Compensation Arrangement by Share-based Payment Award, Number of Award Vesting Types	2
Director [Member]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $	$ 800	500
Performance Shares [Member]
Share-based Payment Arrangement, Expense | $	1,200	1,000
Share-based Payment Arrangement, Expense, after Tax | $	$ 100	$ 700
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)	67	96
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period (in shares)		10
Restricted Stock [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in shares)	83	93
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)	95	78
Restricted Stock [Member] | Other Management [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Issued and Vested in Period (in shares)	60	0
Restricted Stock [Member] | Non-Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Issued and Vested in Period (in shares)	20
Performance Stock Unit [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in shares)	0	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)	1	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period (in shares)	6	129
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Maximum Target Percentage		120.00%
Performance Based Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares (in shares)	11	72
Service Based Award [Member]
Share-based Payment Arrangement, Expense | $	$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	4 years
Share Based Compensation Arrangement, By Share Based Payment Award, Expiration Term (Year)	8 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period (in shares)	5	62
Deferred Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in shares)	0	0
2014 Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)	4,100
Common Stock, Capital Shares Reserved for Future Issuance (in shares)	2,600
The 2020 Award [Member]
Share-based Payment Arrangement, Expense | $	$ 500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)	85

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Note 6 - Stock-based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
General and administrative expense	$ 1,779	$ 965
General and Administrative Expense [Member]
General and administrative expense	$ 1,779	$ 965

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Note 6 - Stock-Based Compensation - Schedule of Stock Options Activity (Details) - Share-based Payment Arrangement, Option [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Balance, shares (in shares)	45	179
Balance, weighted average exercise price (in dollars per share)	$ 14.20	$ 15.27
Options granted, shares (in shares)	0	0
Options granted, weighted average exercise price (in dollars per share)	$ 0	$ 0
Options exercised, shares (in shares)	0	0
Options exercised, weighted average exercise price (in dollars per share)	$ 0	$ 0
Options canceled/forfeited, shares (in shares)	(16)	(134)
Options canceled/forfeited, weighted average exercise price (in dollars per share)	$ 14.20	$ 14.36
Options exercised, shares (in shares)	0	(0)
Balance, shares (in shares)	29	45
Balance, weighted average exercise price (in dollars per share)	$ 14.20	$ 14.20
Balance, weighted average remaining contractual life (Year)	1 year 10 months 6 days
Balance, aggregative intrinsic value	$ 0
Options exercisable, shares (in shares)	19
Options exercisable , weighted average exercise price (in dollars per share)	$ 14.06
Options exercisable, weighted average remaining contractual life (Year)	2 years 5 months 4 days
Options exercisable, aggregative intrinsic value	$ 0
Shares available for future grant, shares (in shares)	2,374

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Note 6 - Stock-Based Compensation - Schedule of Restricted Stock Units Deferred Stock Units and Performance Units (Details) - Restricted Stock, Performance-based Stock Units, and Deferred Stock Units [Member] - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Balance (in shares)	287	287
Balance (in dollars per share)	$ 8.78	$ 14.44
Granted (in shares)	163	313
Granted (in dollars per share)	$ 7.21	$ 5.89
Vested (in shares)	(242)	(174)
Vested (in dollars per share)	$ 6.82	$ 7.77
Forfeited (in shares)	(6)	(139)
Forfeited (in dollars per share)	$ 14.99	$ 15.24
Balance (in shares)	202	287
Balance (in dollars per share)	$ 9.70	$ 8.78

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Note 7 - Employee Benefit Plan (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Defined Contribution Plan, Employer Matching Contribution, Percent of Match	100.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	5.00%
Defined Contribution Plan, Cost	$ 0.1	$ 0.2

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Note 8 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Federal Income Tax Expense (Benefit), Continuing Operations, Total	$ 0	$ 0
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate (Negative Rate), Percent		21.00%	(21.00%)
Deferred Tax Assets, Operating Loss Carryforwards, Total		$ 367,000
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration		52,000
State and Local Income Tax Expense (Benefit), Continuing Operations, Total		$ 0	$ 0

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Note 8 - Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Statutory tax expense (benefit)	21.00%	(21.00%)
Nondeductible expenses	3.30%	4.10%
Valuation allowance	(24.30%)	16.90%
Effective Income Tax Rate Reconciliation, Percent, Total	0.00%	0.00%

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Note 8 - Income Taxes -Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Carrying values of ownership interests and other holdings	$ 31,985	$ 38,361
Tax loss and credit carryforwards	77,045	76,023
Disallowed interest carryforwards	7,120	7,292
Accrued expenses	24	497
Stock-based compensation	268	302
Other	136	482
Deferred Tax Assets, Gross, Total	116,578	122,957
Valuation allowance	(116,578)	(122,957)
Net deferred tax asset	$ 0	$ 0

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Note 8 - Income Taxes - Schedule of Summary of Operating Loss Carryforwards (Details) $ in Thousands	Dec. 31, 2021 USD ($)
2022	$ 47,137
2023	47,150
2024	50,140
2025	17,266
2026 and thereafter	152,923
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	$ 314,616

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Note 9 - Net Income (Loss) Per Share (Details Textual) - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	29	45
Share-based Payment Arrangement, Option [Member] | Minimum [Member]
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit (in dollars per share)	$ 10.37	$ 10.37
Share-based Payment Arrangement, Option [Member] | Maximum [Member]
Share-based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit (in dollars per share)	$ 17.11	$ 17.11
Restricted Stock, Performance-based Stock Units, and Deferred Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	200	300

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Note 9 - Net Income (Loss) Per Share - Calculations of Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended																12 Months Ended
	Dec. 31, 2021	[1]	Sep. 30, 2021	[1]	Jun. 30, 2021		Mar. 31, 2021		Dec. 31, 2020	[1]	Sep. 30, 2020	[1]	Jun. 30, 2020		Mar. 31, 2020		Dec. 31, 2021	Dec. 31, 2020
Basic:
Net income (loss)	$ (8,634)		$ 18,333		$ (320)		$ 17,625		$ (7,353)		$ (4,343)		$ (9,911)		$ (16,008)		$ 27,004	$ (37,615)
Basic (in shares)																	19,827	20,751
Basic (in dollars per share)	$ (0.51)	[2]	$ 0.88	[2]	$ (0.02)	[2]	$ 0.84	[2]	$ (0.35)	[2]	$ (0.21)	[2]	$ (0.48)	[2]	$ (0.77)	[2]	$ 1.36	$ (1.81)
Diluted:
Net income (loss)	$ (8,634)		$ 18,333		$ (320)		$ 17,625		$ (7,353)		$ (4,343)		$ (9,911)		$ (16,008)		$ 27,004	$ (37,615)
Diluted (in shares)																	19,827	20,751
Diluted (in dollars per share)	$ (0.51)	[2]	$ 0.88	[2]	$ (0.02)	[2]	$ 0.84	[2]	$ (0.35)	[2]	$ (0.21)	[2]	$ (0.48)	[2]	$ (0.77)	[2]	$ 1.36	$ (1.81)

[1] The three months ended December 31, 2019 includes equity income of $1.4 million related to an equity method investment that should have been recorded during the three months ended September 30, 2019. There was no impact on the full year results.

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

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Note 11 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Long-term Incentive Plan, Payments	$ 2,500
Deferred Compensation Liability, Current and Noncurrent, Total	0
Amended and Restated Safeguard Scientifics Transaction Bonus Plan [Member]
Compensation, Cash Award	$ 700	$ 1,300
Minimum [Member]
Long-term Incentive Plan, Bonus Pool Percent	0.20%	1.00%
Maximum [Member]
Long-term Incentive Plan, Bonus Pool Percent	1.30%
Employee Severance [Member]
Restructuring and Related Cost, Expected Cost, Total	$ 1,000
Private Equity Funds [Member]
Guarantor Obligations, Current Carrying Value	$ 3,800

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Note 12 - Supplemental Cash Flow Information (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Debt Conversion, Converted Instrument, Amount	$ 1.0	$ 6.8

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Note 13 - Segment Reporting (Details Textual)	12 Months Ended
	Dec. 31, 2021
Number of Operating Segments	1

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Note 14 - Selected Quarterly Financial Information (Unaudited) - Schedule of Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended																12 Months Ended
	Dec. 31, 2021	[1]	Sep. 30, 2021	[1]	Jun. 30, 2021		Mar. 31, 2021		Dec. 31, 2020	[1]	Sep. 30, 2020	[1]	Jun. 30, 2020		Mar. 31, 2020		Dec. 31, 2021	Dec. 31, 2020
General and administrative expense	$ 1,135		$ 1,564		$ 1,991		$ 2,463		$ 1,631		$ 2,275		$ 2,028		$ 3,532		$ 7,153	$ 9,466
Operating loss	(1,135)		(1,564)		(1,991)		(2,463)		(1,631)		(2,275)		(2,028)		(3,532)		(7,153)	(9,466)
Other income (loss), net	(5,992)		20,588		6,733		706		(663)		(820)		(2,658)		(3,567)		22,035	(7,708)
Interest income	79		70		74		53		52		52		52		105		276	261
Equity income (loss), net	(1,586)		(761)		(5,136)		19,329		(5,111)		(1,300)		(5,277)		(9,014)		11,846	(20,702)
Net loss before income taxes	(8,634)		18,333		(320)		17,625		(7,353)		(4,343)		(9,911)		(16,008)		27,004	(37,615)
Net income (loss)	$ (8,634)		$ 18,333		$ (320)		$ 17,625		$ (7,353)		$ (4,343)		$ (9,911)		$ (16,008)		$ 27,004	$ (37,615)
Basic (in dollars per share)	$ (0.51)	[2]	$ 0.88	[2]	$ (0.02)	[2]	$ 0.84	[2]	$ (0.35)	[2]	$ (0.21)	[2]	$ (0.48)	[2]	$ (0.77)	[2]	$ 1.36	$ (1.81)
Diluted (in dollars per share)	$ (0.51)	[2]	$ 0.88	[2]	$ (0.02)	[2]	$ 0.84	[2]	$ (0.35)	[2]	$ (0.21)	[2]	$ (0.48)	[2]	$ (0.77)	[2]	$ 1.36	$ (1.81)

[1] The three months ended December 31, 2019 includes equity income of $1.4 million related to an equity method investment that should have been recorded during the three months ended September 30, 2019. There was no impact on the full year results.

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

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Note 15 - Subsequent Event (Details Textual) - Prognos Health, Inc. [Member] - Subsequent Event [Member] - USD ($) $ in Millions	Feb. 28, 2022	Jan. 31, 2022
Convertible Debt, Additional	$ 2.0
Convertible Debt, Total		$ 12.6