Safeguard Scientifics Announces Effective Date of Stock Splits to Effectuate the Going Dark Transaction and New Chief Executive Officer and Chief Financial Officer
05 Janeiro 2024 - 6:30PM
Safeguard Scientifics, Inc. (Nasdaq:SFE) (“Safeguard” or the
“Company”) today announced that, as authorized by its Board of
Directors (the “Board”), the Company will file amendments to its
articles of incorporation with the Pennsylvania Department of State
to effectuate a reverse stock split at a ratio of 1-for-100, to be
followed immediately by a forward stock split at a ratio of
100-for-1 (collectively referred to as “stock splits”), which are
expected to become effective on or about January 12, 2024, and the
Company’s common stock is expected to begin trading on The Nasdaq
Stock Market LLC (“Nasdaq”) on a post-forward stock split basis
upon the opening of trading on January 16, 2024.
These stock split ratios are within the ranges
approved by the Company’s shareholders at the special meeting of
shareholders held on December 15, 2023 in connection with the
Company’s previously announced plan to cease the registration of
the Company’s common stock under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and to delist the Company’s
common stock from trading on Nasdaq (referred to as the
“Transaction”).
As a result of the reverse stock split,
shareholders of record owning immediately prior to the effective
time of the reverse stock split fewer than 100 shares of common
stock, would be entitled to a fraction of a share of common stock
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 “Cash
Payment”), for each share of common stock held by such holder (the
“Cashed Out Shareholders”) immediately prior to effective time, and
the Cashed Out Shareholders would no longer be shareholders of the
Company. Shareholders of record owning at least 100 shares of
common stock immediately prior to the effective time of the reverse
stock split (the “Continuing Shareholders”) 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.
If a shareholder holds fewer than 100 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 100
shares, or more than 100 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’ shares
held through such broker, bank or other nominee. If a shareholder
holds an account with fewer than 100 shares of common stock through
a broker, bank or other nominee, the Company encourages such
shareholder to contact such holder’s bank, broker or other nominee
for information on how the stock splits may affect any shares of
the Company’s common stock held in such account.
Safeguard’s transfer agent, Computershare, which
is also acting as the exchange agent for the stock splits, will
provide instructions to shareholders regarding the process for
exchanging share certificates (if any).
The Company expects that the stock splits would
reduce the number of record holders of the Company’s common stock
below 300, which is the level at or above which the Company is
required to file reports with the SEC under the Exchange Act, and,
as previously announced, following the effectiveness of the stock
splits, the Company intends to file a Form 25 (Notification of
Removal From Listing and/or Registration under Section 12(b) of the
Exchange Act) with the Securities and Exchange Commission (the
“SEC”). The Company expects that the delisting will occur ten days
after the filing of Form 25, at which point, the Company intends to
file a Form 15 with the SEC certifying that it has less than 300
shareholders of record, which will terminate the registration of
the Company’s common stock under Section 12(g) of the Exchange Act.
Following the delisting of the Company’s common stock from trading
on Nasdaq, any trading in the Company’s common stock would only
occur in privately negotiated sales and potentially on an
over-the-counter market. The Company is seeking to have its common
stock quoted on a market operated by OTC Markets Group Inc. There
is no guarantee, however, that a broker will make a market in the
common stock.
The Company has also previously announced that,
in connection with the Transaction, Messrs. Salzman and Herndon
will no longer serve as the Company’s executive officers as of
December 31, 2023, and the Company entered into a letter agreement
(the “Services Agreement”) with Rock Creek Advisors, LLC (“Rock
Creek”), pursuant to which Rock Creek started to perform certain
consulting and advisory services related to the outsourcing of the
Company’s financial and operational functions effective as of
January 1, 2024. In addition, the Board appointed, Mark Dow of Rock
Creek as the Company’s Chief Executive Officer, Chief Financial
Officer and Secretary effective as of January 1, 2024. Mr. Dow’s
compensation for this position is included as part of the fees
payable by the Company to Rock Creek for overall services Rock
Creek provides to the Company.
About Safeguard Scientifics
Historically, Safeguard Scientifics has provided
capital and relevant expertise to fuel the growth of
technology-driven businesses. Safeguard has a distinguished track
record of fostering innovation and building market leaders that
spans more than six decades. Safeguard is currently pursuing a
focused strategy to value-maximize and monetize its ownership
interests over a multi-year time frame to drive shareholder value.
For more information, please visit www.safeguard.com.
Forward-Looking Statements
This press release may contain forward-looking
statements that are being made pursuant to the Private Securities
Litigation Reform Act of 1995, which provides a “safe harbor” for
forward-looking statements to encourage companies to provide
prospective information so long as those statements are accompanied
by meaningful cautionary statements identifying important factors
that could cause actual results to differ materially from those
discussed in the statement. Such forward-looking statements include
statements about the perceived benefits of the Transaction, trading
of the Company’s common stock following the voluntary delisting
from trading on Nasdaq, and the number of holders of record of the
Company’s common stock that the Company expects to have after the
stock splits. Such forward-looking statements are subject to a
number of known and unknown risks and uncertainties that could
cause actual results, performance or achievements to differ
materially from those described or implied in such forward-looking
statements. Accordingly, actual results may differ materially from
such forward-looking statements. The forward-looking statements
relating to the Transaction are based on the Company’s current
expectations, assumptions, estimates and projections about the
Company and involve significant risks and uncertainties, including
the many variables that may impact the Company’s projected cost
savings, variables and risks related to consummation of the stock
splits and the Transaction, and SEC regulatory review of the
Company’s filings related to the Transaction. The Company assumes
no obligation for updating any such forward-looking statements to
reflect actual results, changes in assumptions or changes in other
factors affecting such forward-looking statements.
SAFEGUARD CONTACT:
Mark Herndon
mherndon@safeguard.com
Safeguard Scientifics (NASDAQ:SFE)
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