Safeguard Scientifics, Inc.

Investor FAQs

When was the reverse stock split approved?

At Safeguard's annual meeting of shareholders held on July 23, 2008, our shareholders authorized Safeguard's Board of Directors, in its discretion, to effect a reverse stock split of the Safeguard Common Stock.

On July 29, 2009, Safeguard's Board of Directors determined that it was in the best interests of Safeguard and our shareholders to effect a reverse split of the Safeguard Common Stock.

The primary purpose of Safeguard's reverse stock split was to increase the per-share market price of SFE common stock, making the shares more attractive to institutional investors who oftentimes are constrained from buying stocks with a price less than $5/share.

What was the exchange ratio for the reverse stock split?

The reverse stock split exchange ratio was 1-for-6.

When did Safeguard's reverse stock split become effective?

The reverse stock split became effective upon the filing of an amendment to Safeguard's Second Amended and Restated Articles of Incorporation with the Pennsylvania Secretary of State. For trading purposes, the reverse stock split became effective on Thursday, August 27, 2009.

Did the CUSIP number for Safeguard's Common Stock change?

Yes. The new CUSIP number for Safeguard's Common Stock is 786449 20 7, effective Thursday, August 27, 2009.

What happened to my Safeguard Common Stock following the effective date of the reverse stock split?

Safeguard Common Stock continues to be listed on the NYSE under the symbol "SFE," although it is considered to be a "new" listing with a new CUSIP number. Under NYSE rules, stock certificates representing shares of Safeguard common stock prior to the effectiveness of the reverse stock split cannot be used by shareholders for either transfers or deliveries made on the NYSE. Thus, a shareholder who holds pre-split stock certificates must first exchange the old stock certificates in order to make transfers or deliveries on the NYSE.

What is a reverse stock split?

A reverse stock split reduces the total number of a company's issued and outstanding common shares. With a reverse stock split, a shareholder has fewer but higher priced shares.

Why did Safeguard effect the reverse stock split of its Common Stock?

The primary purpose of the reverse stock split was to increase the per share market price of Safeguard Common Stock and enhance the acceptability and marketability of Safeguard Common Stock to the financial community and the investment public and potentially mitigate reluctance on the part of certain brokers and investors to trade in Safeguard Common Stock, at pre-reverse split prices.

How would a reverse split be expected to reduce transaction costs for investors?

By implementing the reverse stock split, shareholders who pay commissions based on the number of shares bought or sold may pay lower total commissions following the effectiveness of the reverse stock split. Lower commissions may also make our stock an attractive investment to additional investors.

What was the impact of Safeguard's reverse stock split on its outstanding shares of Common Stock?

The reverse stock split reduced the number of outstanding shares of Safeguard Common Stock from approximately 122.3 million to approximately 20.4 million and increased the trading price of Safeguard Common Stock.

What was the impact of Safeguard's reverse stock split on its authorized shares of Common Stock?

The number of authorized shares of Common Stock was reduced from 500 million to approximately 83.3 million.

What was the impact of Safeguard's reverse stock split on convertible debentures, options, deferred stock units and other securities?

Proportional 1:6 adjustments were made to Safeguard's convertible debentures, stock options, deferred stock units, equity compensation plans and other equity incentive awards. The reverse stock split did not negatively affect any of the rights that accrue to holders of Safeguard Common Stock, convertible debentures, options, deferred stock units or other securities convertible into Safeguard Common Stock.

How were fractional shares of Safeguard Common Stock treated in the reverse stock split?

No fractional shares were issued. Shareholders who would have otherwise been due a fractional share received a cash payment instead based on a post-split per share price of $10.818. The cash payment for a fractional share was determined on the basis of the average closing price of Safeguard Common Stock for the period August 13 to August 26, 2009, as adjusted for the reverse stock split.

If you held your Safeguard Common Stock in a brokerage account, any payment due to you for fractional shares was deposited directly into your account with the organization that holds your shares. Each broker has its own processes for handling the cash received in exchange for fractional shares. You should contact your broker for more information.

If you held your Safeguard Common Stock directly (in other words, you held stock certificates or a book entry position at our transfer agent), payment for the fractional shares will be made by check, sent to you by our transfer agent, BNY Mellon Shareowner Services, following receipt by them of your properly completed and executed Letter of Transmittal and original stock certificate(s).

What were the tax consequences of the reverse stock split to Safeguard's shareholders?

Generally, the reverse stock split itself did not have any tax consequences, other than for consequences attributable to any cash received in lieu of any fractional shares. The tax treatment of a shareholder may vary depending upon the particular facts and circumstances of such shareholder. Accordingly, each shareholder should consult his or her tax advisor to determine the particular tax consequences to him or her of a reverse stock split, including the application and effect of federal, state, local and/or foreign income tax and other laws.

Who should I call if I have questions regarding how the reverse stock split will impact my shares of Safeguard Common Stock?

If you are a registered Safeguard shareholder (in other words, you hold the stock certificate(s) yourself or have your shares registered in a book entry account with our transfer agent), you should contact Safeguard's transfer agent:

By Mail:
BNY Mellon Shareowner Services
PO Box 358300
Pittsburgh, PA 15252

By Overnight Courier or By Hand:
BNY Mellon Shareowner Services
Attn: Corporate Action Dept., 27th Floor
480 Washington Blvd.
Jersey City, NJ 07310

From within the U.S. Canada or Puerto Rico: (877) 868-8016 From outside the U.S.: (201) 680-6579

If BNY Mellon Shareowner Services does not answer your questions to your satisfaction, or if you want to speak with someone at Safeguard, you can also contact Safeguard's Investor Relations Department at (610) 293-0600 or IR@safeguard.com .

If you are a beneficial shareholder (in other words, if you hold your shares through a broker, bank or other nominee), you should contact your broker, bank or other nominee directly.

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NYSE:SFE

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