Note 2 - Ownership Interests and Advances

12 Months Ended

Dec. 31, 2023

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, 2023		December 31, 2022
	(In thousands)
Equity Method:
Companies	$	8,400	$	8,749
Private equity funds		97		97
		8,497		8,846
Other Method:
Companies, fair value		—		860
Companies, fair value measurement alternative		2,555		1,067
Private equity funds, fair value measurement alternative		250		250
		2,805		2,177
Advances to companies		389		4,382
	$	11,691	$	15,405

During the year ended December 31, 2023, the Company recorded an impairment of $1.0 million related to the Moxe ownership interest, which is accounted for under the equity method.  The impairment was determined based on declines in the fair value of our ownership interest resulting from lower forward looking revenue expectations.  There were no impairments during the year ended December 31, 2022.  The measurement of fair value for the impairment was estimated based on evaluating several valuation inputs available, primarily including 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 2023, the Company has received $0.9 million from the collection of escrowed amounts related to the 2022 Lumesis transaction, $0.8 million from the sale of its ownership interest in BHG, $0.5 million from the resolution of escrow contingencies resulting from the 2021 Flashtalking transaction, $0.4 million from the secondary sale of a subordinated promissory note issued by Aktana and additional amounts from other earn-outs or contingencies.

In September 2022, Lumesis, Inc. was acquired by another entity for cash.  The Company received $5.5 million in cash proceeds in connection with this transaction, excluding holdbacks and escrows.  This transaction resulted in a gain of $4.9 million, including $0.8 million other receivable related to an indemnification escrow during the year ended December 31, 2022.    

During the year ended December 31, 2022, the Company recognized $0.5 million as gain on sale as the result of the 2021 WebLinc transaction from the collection of additional amounts and as contingencies were resolved, those amounts were recorded as gain on the sale and included within Equity income (loss). 

As of December 31, 2023, the Company held ownership interests accounted for using the equity method in 4 non-consolidated companies. 

Certain of the Company’s ownership interests as of December 31, 2023 and 2022 included the following:       

	Safeguard Primary Ownership as of December 31,
Company Name	2023			2022			Accounting Method as of December 31, 2023
Clutch Holdings, Inc.		41.7	%		41.7	%	Equity
InfoBionic, Inc.		*			25.2	%	Other
MedCrypt, Inc.		*			*		Other
meQuilibrium		30.2	%		31.3	%	Equity
Moxe Health Corporation		19.3	%		19.3	%	Equity
Prognos Health Inc.		19.0	%		28.4	%	Equity

*minimal ownership interest

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,
	2023			2022
	(In thousands)
Balance Sheets:
Current assets	$	49,546		$	126,042
Non-current assets		9,892			55,073
Total assets	$	59,438		$	181,115
Current liabilities	$	32,461		$	92,990
Non-current liabilities		42,370			220,681
Shareholders’ deficit		(15,393	)		(132,556	)
Total liabilities and shareholders’ deficit	$	59,438		$	181,115
Number of equity method ownership interests		4			8

	Year Ended December 31,
	2023			2022
	(In thousands)
Results of Operations:
Revenue	$	101,021		$	144,771
Gross profit	$	71,529		$	88,666
Net loss	$	(73,913	)	$	(152,936	)

As of December 31, 2023, 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 $1.1 million. Of this excess, $1.0 million was allocated to goodwill and $0.1 million was allocated to intangible assets.