What changed in this filing

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Item 1. Business

2019-03-01 compared with 2018-03-07 · 54 added, 84 removed, 140 unchanged (50% of the section changed)

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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.

Throughout this document, we use the term “partner company” to generally refer to those companies in which we have an equity interest and in which we are actively involved, influencing development through board representation and management support, in addition to the influence we exert through our equity ownership.

Throughout this document, we use the term “partner company” to generally refer to those companies in which we have a significant equity interest.

In many, but not all cases, we will also be actively involved, influencing development through board representation and management support, in addition to the influence we exert through our equity ownership.

From time to time, in addition to these partner companies, we also hold relatively small equity interests in other enterprises where we do not exert significant influence and do not participate in management activities.

In some cases, these interests relate to former partner companies.

In January 2018, Safeguard announced that, from that date forward, we will not deploy any capital into new partner company opportunities and will focus on supporting our existing partner companies and maximizing monetization opportunities for partner company interests to enable distributions of net proceeds to shareholders.

In that context, we will consider initiatives including, among others:

the sale of individual partner companies, the sale of certain partner company interests in secondary market transactions, or a combination thereof, as well as other opportunities to maximize shareholder value.

We anticipate distributing to shareholders net proceeds from the sale of partner companies or partner company interests, as applicable, after satisfying our debt obligations and working capital needs.

Safeguard's existing group of partner companies consist of technology-driven businesses in healthcare, financial services and digital media that are capitalizing on the next wave of enabling technologies with a particular focus on the Internet of Everything, enhanced security and predictive analytics.

In January 2018, Safeguard announced that we will not deploy any capital into new partner company opportunities and will focus on supporting our existing partner companies and maximizing monetization opportunities to return value to shareholders.

In that context, we have, are and will consider initiatives including, among others:

the sale of individual partner companies, the sale of certain or all partner company interests in secondary market transactions, or a combination thereof, as well as other opportunities to maximize shareholder value.

We anticipate returning value to shareholders after satisfying our debt obligations and working capital needs.

Safeguard's existing group of partner companies consist principally of technology-driven businesses in healthcare, financial services and digital media that are capitalizing on the next wave of enabling technologies, including enhanced security and predictive analytics.

We strive to create long-term value for our shareholders by helping our partner companies to increase their market penetration, grow revenue and improve cash flow.

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In 2018 , our management team focused on the following objectives:

Deploy follow-on capital to support our existing partner companies;

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

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

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

To meet our strategic objectives during 2018 , Safeguard will continue to focus on:

Deploying follow-on capital to support only our existing partner companies;

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

Maximizing monetization opportunities for our partner company interests.

Supporting our existing partner companies;

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

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

Right-sizing our operating structure in light of our new structure;

Addressing the liquidity needs of the Company.

To meet our strategic objectives during 2019 , Safeguard will focus on:

Supporting our existing partner companies;

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

Pursuing monetization opportunities for our partner company interests.

We incorporated in the Commonwealth of Pennsylvania in 1953.

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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.

Safeguard's existing group of partner companies consist of companies that are capitalizing on the next wave of enabling technologies with a particular focus on the Internet of Everything, enhanced security and predictive analytics.

Safeguard's existing group of partner companies consist of companies that are capitalizing on the next wave of enabling technologies with a particular focus enhanced security and predictive analytics.

Since January 2018, Safeguard began to implement a new business strategy designed to increase shareholder value.

Under the new strategy, Safeguard ceased deploying capital into new partner companies.

Safeguard remains focused on managing and financially supporting its existing partner companies, with the goal of pursuing monetization opportunities and maximizing the value returned to shareholders.

Helping Our Partner Companies Build Value

We offer operational and management support to each of our partner companies through our deep domain expertise from our management team's careers as entrepreneurs, board members, financiers and operators.

Our employees have expertise in business strategy, sales and marketing, operations, finance, legal and transactional support.

We offer operational and management support to each of our partner companies through our domain expertise from our management team's careers as entrepreneurs, board members, financiers and operators.

We provide hands-on assistance to the management teams of our partner companies to support their growth.

We believe our strengths include:

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

leveraging our market knowledge to generate additional growth opportunities;

leveraging our business contacts and relationships;

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

Strategic Support.

By helping our partner companies’ management teams remain focused on critical objectives through the provision of human, financial and strategic resources, we believe we are able to accelerate their development and success.

We play an active role in developing the strategic direction of our partner companies, which include:

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

providing capital to drive growth.

identifying sources of and providing capital to drive growth.

Management and Operational Support.

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Realizing Value

In January 2018, Safeguard announced that we will focus on maximizing monetization opportunities for partner company interests to enable distributions of net proceeds to shareholders.

We will consider initiatives including, among others:

In general, we will hold our position in a partner company as long as we believe the risk-adjusted value of that position is maximized by our continued ownership and effort.

From time to time, we engage in discussions with other companies

interested in our partner companies, either in response to inquiries or as part of a process we initiate.

To the extent we believe that a partner company’s further growth and development can best be supported by a different ownership structure or if we otherwise believe it is in our shareholders’ best interests, we may seek to sell some or all of our position in the partner company.

In January 2018, Safeguard began to implement a new business strategy designed to increase shareholder value.

Under the new strategy, Safeguard ceased deploying capital into new partner companies.

We have, are and will consider initiatives including, among others:

We anticipate returning value to shareholders after satisfying our debt obligations and working capital needs.

From time to time, we engage in discussions with other companies interested in our partner companies, either in response to inquiries or as part of a process we initiate.

To the extent we believe that a partner company’s further growth and development can best be supported by a different ownership structure or if we otherwise believe it is in our shareholders’ best interests, we will seek to sell some or all of our position in the partner company.

These sales may take the form of privately negotiated sales of stock or assets, mergers and acquisitions, public offerings of the partner company’s securities and, in the case of publicly traded partner companies, sales of their securities in the open market.

In the past, we have taken partner companies public through rights offerings and directed share subscription programs.

We will continue to consider these (or similar) programs and the sale of certain partner company interests in secondary market transactions to maximize partner company value for our shareholders.

Given our recent change in strategy, the value of Safeguard is now virtually wholly dependent upon the value of our existing partner companies and our ability to translate that value into cash as efficiently as possible and to deliver that cash, net of our obligations and operating cash needs, to our shareholders.

We will continue to consider these (or

similar) programs and the sale of certain partner company interests in secondary market transactions to maximize value for our shareholders.

Given our recent change in strategy, the value of Safeguard is now virtually wholly dependent upon the value of our existing partner companies and our ability to translate that value into cash as efficiently as possible and to return that capital, net of our debt obligations and operating cash needs, to our shareholders in the form of stock repurchases and/or distributions to shareholders.

As we have in the past, we will utilize the service of professional advisers from time to time to explore the various alternatives for returning capital to our balance sheet and ultimately to our shareholders.

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An understanding of our partner companies is important to understanding Safeguard and its value-building strategy.

Following are descriptions of our partner companies in which we own interests at March 7, 2018.

We categorize our partner companies into four stages based upon revenue generation—Development Stage, Initial Revenue Stage, Expansion Stage, and High Traction Stage.

The Development Stage is made up of those companies that are pre-revenue businesses.

Following are descriptions of our partner companies in which we own interests at February 25, 2019.

We categorize our partner companies into four stages based upon revenue generation—Initial Revenue Stage, Expansion Stage, Traction Stage and High Traction Stage.

The Initial Revenue Stage is made up of businesses that have revenues of $1 million or less.

The Expansion Stage is made up of companies that have revenue in the range of $1 million to $5 million.

The Traction Stage is made up of companies that have revenue in the range of $5 million to $10 million.

The High Traction Stage is made up of companies that have revenue in excess of $10 million per year.

The ownership percentages indicated below are presented as of December 31, 2017 for partner companies in which we owned interests at March 7, 2018 and reflects the percentage of the vote we were entitled to cast at that date based on issued and outstanding voting securities (on a common stock equivalent basis), excluding the effect of options, warrants and convertible debt (primary ownership).

AdvantEdge Healthcare Solutions, Inc.

High Traction

(Safeguard Ownership:

Headquartered in Salem, New Hampshire, AdvantEdge Healthcare Solutions is a technology-enabled provider of healthcare revenue cycle and business management solutions that improve decision-making, maximize financial performance, streamline operations and mitigate compliance risks for healthcare providers.

www.ahsrcm.com

The ownership percentages indicated below are presented as of December 31, 2018 for partner companies in which we owned interests at February 25, 2019 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 Ownership:

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www.aktana.com

Apprenda, Inc.

(Safeguard Ownership:

Headquartered in Troy, New York, Apprenda powers the next generation of enterprise software development in public, private and hybrid clouds.

As a foundational software layer and application run-time environment, Apprenda abstracts away the complexities of building and delivering modern software applications, enabling enterprises to turn ideas into innovations more quickly.

With Apprenda, enterprises can securely deliver an entire ecosystem of data, services, applications and application programming interfaces to both internal and external customers across any infrastructure.

www.apprenda.com

Initial Revenue

(Safeguard Ownership:

Headquartered in New York, New York, Brickwork helps retailers inform, target, convert and prepare for store shoppers online as the first scalable software-as-a-service platform powering a seamless customer path between online and in-store shopping.

www.brickworksoftware.com

Cask Data, Inc.

Initial Revenue

(Safeguard Ownership:

Headquartered in Palo Alto, California, Cask Data is an open source software company that helps developers deliver enterprise-class Apache Hadoop™ solutions more quickly and effectively.

Cask’s flagship offering, the Cask Data Application Platform, provides an open source layer on top of the Hadoop ecosystem that adds enterprise-class governance, portability, security, scalability and transactional consistency.

CloudMine, Inc.

Initial Revenue

(Safeguard Ownership:

Headquartered in Philadelphia, Pennsylvania, CloudMine is a leading HIPAA-compliance Enterprise Health Cloud platform.

CloudMine empowers healthcare organizations to rapidly and confidently develop connected digital health experiences by reducing complexity, enabling data mobility, and ensuring compliance.

www.cloudmineinc.com

Clutch Holdings, Inc.

High Traction

(Safeguard Ownership:

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www.clutch.com

Flashtalking, Inc.

High Traction

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Hoopla Software, Inc.

Initial Revenue

(Safeguard Ownership:

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InfoBionic, Inc.

Initial Revenue

(Safeguard Ownership:

Headquartered in Lowell, Massachusetts, InfoBionic is an emerging digital health company focused on creating patient monitoring solutions for chronic disease management with an initial market focus on cardiac arrhythmias.

Headquartered in Massachusetts, InfoBionic is an emerging digital health company focused on creating patient monitoring solutions for chronic disease management with an initial market focus on cardiac arrhythmias.

InfoBionic’s MoMe ® Kardia cloud-based, remote patient monitoring platform delivers on-demand, actionable monitoring data and analytics directly to the physicians themselves.

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www.mediamath.com

Initial Revenue

(Safeguard Ownership:

Headquartered in Boston, Massachusetts, meQuilibrium is a digital coaching platform that delivers clinically validated and highly personalized resilience solutions to employers, health plans, wellness providers and consumers increasing engagement, productivity and performance, as well as improving outcomes in managing stress, health and well-being.

www.mequilibrium.com

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Headquartered in Glen Burnie, Maryland, NovaSom is a medical device company that markets an FDA-cleared wireless home sleep test for Obstructive Sleep Apnea (“OSA”) called AccuSom ® Home Sleep Test.

The NovaSom home sleep test provides in-home, clinically equivalent diagnosis of OSA at a significantly reduced cost compared to in-facility testing for uncomplicated adult OSA.

The NovaSom home sleep test provides an in-home, clinically equivalent diagnosis of OSA at a significantly reduced cost compared to in-facility testing for uncomplicated adult OSA.

www.novasom.com

Prognos Health Inc.

High Traction

(Safeguard Ownership:

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www.prognos.ai

Propeller Health, Inc.

Initial Revenue

(Safeguard Ownership:

Headquartered in Madison, Wisconsin, Propeller Health provides digital solutions to measurably improve respiratory health by combining sensors, mobile apps and predictive analytics to monitor and engage patients, increase adherence and encourage effective self-management.

www.propellerhealth.com

QuanticMind, Inc.

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www.sonobi.com

High Traction

(Safeguard Ownership:

Headquartered in Palo Alto, California, Syapse is on a mission to deliver the best care for every cancer patient through precision medicine.

Syapse’s software platform, data sharing network, and industry partnerships enable healthcare providers to bring precision cancer care to every patient who needs it.

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

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(Safeguard Ownership:

Headquartered in New York, New York, T-REX is a software solutions provider for the complex financing of esoteric asset backed securities (“ABS”) and energy project finance.

Headquartered in New York, New York, T-REX is an enterprise solutions provider for the complex financing of esoteric asset backed securities (“ABS”) and energy project finance.

T-REX’s SaaS platform supplants manually-generated financial models, driving transparency, standardization, collaboration, efficiency and access in energy project finance and asset backed securitization.

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Transactis, Inc.

High Traction

(Safeguard Ownership:

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Trice Medical, Inc.

Initial Revenue

(Safeguard Ownership:

Headquartered in King of Prussia, Pennsylvania, Trice Medical was founded to fundamentally improve orthopedic diagnostics for the patient, physician and payor by providing instant, eyes-on, answers.

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.

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WebLinc, Inc.

High Traction

(Safeguard Ownership:

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Zipnosis, Inc.

Initial Revenue

(Safeguard Ownership:

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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”).

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 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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business