{"id":788634,"date":"2023-10-05T20:37:23","date_gmt":"2023-10-06T00:37:23","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/safeguard-scientifics-board-of-directors-approves-plan-to-voluntarily-terminate-registration-of-its-common-stock-with-the-sec-and-voluntarily-delist-from-nasdaq\/"},"modified":"2023-10-05T20:37:23","modified_gmt":"2023-10-06T00:37:23","slug":"safeguard-scientifics-board-of-directors-approves-plan-to-voluntarily-terminate-registration-of-its-common-stock-with-the-sec-and-voluntarily-delist-from-nasdaq","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/safeguard-scientifics-board-of-directors-approves-plan-to-voluntarily-terminate-registration-of-its-common-stock-with-the-sec-and-voluntarily-delist-from-nasdaq\/","title":{"rendered":"Safeguard Scientifics\u2019 Board of Directors Approves Plan to Voluntarily Terminate Registration of Its Common Stock with the SEC and Voluntarily Delist from Nasdaq"},"content":{"rendered":"
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\n RADNOR, Pa., Oct. 05, 2023 (GLOBE NEWSWIRE) — <\/strong>Safeguard Scientifics, Inc. (Nasdaq:SFE) (\u201cSafeguard\u201d or the \u201cCompany\u201d) today announced that its Board of Directors (the \u201cBoard\u201d) has approved a plan to cease the registration of the Company\u2019s common stock under the Securities Exchange Act of 1934, as amended (the \u201cExchange Act\u201d), following the completion of a proposed reverse stock split transaction, which will be followed immediately by a forward stock split, and to delist its shares of common stock from trading on The Nasdaq Stock Market LLC (\u201cNasdaq\u201d).<\/p>\n

In order to deregister its shares of common stock, the Company must reduce its number of shareholders of record to below 300. To accomplish this, the Board is proposing to amend the Company\u2019s articles of incorporation to effect a reverse stock split of the Company\u2019s common stock, followed immediately by a forward stock split of the Company\u2019s common stock, at a ratio (i) not less than 1-for-50 and not greater than 1-for-100, in the case of the reverse stock split, and (ii) not less than 50-for-1 and not greater than 100-for-1, in the case of the forward stock split, with the exact stock split ratios to be set within the foregoing ranges at the discretion of the Board (and, in all cases, with the forward stock split ratio being the inverse of the reverse stock split ratio), without further approval or authorization of shareholders and with the Board, in its sole discretion, able to effect the stock splits immediately following the public announcement of the stock split ratios or to elect not to effect the proposed stock splits (whether or not authorized by the shareholders) or to abandon the overall going private transaction at any time if the Board determines in its business judgment that the stock splits or the overall going private transaction is no longer in the best interests of the Company or its shareholders (\u201cStock Split Proposals\u201d).<\/p>\n

Stock Split Proposals are subject to obtaining the requisite approval of the Company\u2019s shareholders at a Special Meeting of Shareholders to be held for that purpose, which is currently expected to occur later this year.<\/p>\n

If the Stock Split Proposals are approved by shareholders at the Special Meeting and the Board decides to proceed with the stock splits, shareholders of record owning immediately prior to the effective time of the stock splits fewer than a minimum number of shares, which, depending on the stock split ratios chosen by the Board, would be between 50 and 100 (the \u201cMinimum Number\u201d), would be entitled to a fraction of a share of common stock upon the reverse stock split and will be paid cash in lieu of such fraction of a share of common stock, on the basis of $1.65, without interest (the \u201cCash Payment\u201d), for each share of common stock held by such holder (the \u201cCashed Out Shareholders\u201d) immediately prior to effective time and the Cashed Out Shareholders would no longer be shareholders of the Company. Shareholders of record owning at least the Minimum Number of shares immediately prior to the effective time (the \u201cContinuing Shareholders\u201d) would not be paid cash in lieu of any fraction of a share of common stock such Continuing Shareholders may be entitled to receive upon the reverse stock split. Upon the forward stock split, the shares of common stock (including any fraction of a share of common stock) held by such Continuing Shareholders after the reverse stock split will be reclassified into the same number of shares of common stock as such Continuing Shareholders held immediately prior to the effective time. As a result of the forward stock split, the total number of shares of common stock held by a Continuing Shareholder would not change due to the stock splits.<\/p>\n

If a shareholder holds fewer than the Minimum Number of shares of common stock through a broker, bank or other nominee, then such shareholder is considered the beneficial owner of those shares, and the broker, bank or other nominee is considered the shareholder of record with respect to those shares. The Cash Payment for fractional shares will be available only to record holders. Pursuant to the SEC rules and regulations, the Company intends to treat each bank, broker or other nominee as one shareholder of record. These banks, brokers and other nominees may have different procedures for processing the Stock Splits. It is possible that the bank, broker or other nominee also holds shares for other beneficial owners of common stock and that it may hold at least the Minimum Number, or more than the Minimum Number, of shares of common stock in the aggregate. Therefore, depending upon their procedures, such bank, broker or other nominee may not be obligated to treat the Reverse Stock Split or the Forward Stock Split as affecting beneficial owners\u2019 shares held through such broker, bank or other nominee. If a shareholder holds an account with fewer than the Minimum Number of shares of common stock through a broker, bank or other nominee and wants to ensure that shares are cashed out, the Company encourages such shareholder to promptly contact such holder\u2019s bank, broker or other nominee to change the manner in which the shares are held to a record holder account in the shareholder\u2019s own name so that such shareholder becomes a record owner of the shares and could receive the Cash Payment for fractional shares.<\/p>\n

Based on the current information, the Company estimates that (i) approximately 4,305 shares of the Company\u2019s common stock (or approximately 0.026% of the shares of common stock currently outstanding) would be cashed out in the Stock Splits (assuming that the Minimum Number is 75, which is the approximate midpoint within the proposed range of Stock Split Ratios) and (ii) the aggregate cost to the Company of the Stock Splits would be approximately $1.2 million, which includes approximately $10,000, if the Minimum Number is 75, needed to cash out fractional shares as a result of the stock splits, approximately $300,000 of transaction expenses, and approximately $900,000 of severance costs, all of which the Company intends to fund using cash-on-hand.<\/p>\n

The Board has determined that the costs of being a public reporting company outweigh the benefits, and, therefore, it is no longer in the best interests of the Company\u2019s shareholders for the Company to remain a public reporting company. In determining to approve the proposed transaction, the Board considered the following factors, among others:<\/p>\n