EX-99.2
4
tv497995_ex99-2.htm
EXHIBIT 99.2
Exhibit 99.2
Pro Forma Financial Information
On July 2, 2018, Safeguard Delaware, Inc.,
a subsidiary of Safeguard Scientifics, Inc. ("the Company"), entered into a stock repurchase agreement with MediaMath
Holdings, Inc. ("MediaMath"), pursuant to which the Company agreed to sell to MediaMath, and MediaMath agreed to repurchase
from the Company, 39.13% of the Company's ownership position in MediaMath for a purchase price of $45.0 million. The Company
also granted MediaMath an option to repurchase an additional 10.87% of the Company's ownership position in MediaMath for
$12.5 million within 180 days after the close of the initial transaction.
The
following unaudited pro forma consolidated statements of operations of the Company give effect to the transaction as if it had
been consummated on January 1, 2017. The unaudited pro forma consolidated balance sheet of the Company gives effect to the transaction
as if it had been consummated on March 31, 2018. The unaudited pro forma consolidated financial statements of the Company do not
reflect the exercise of MediaMath's option to repurchase an additional 10.87% of the Company's ownership position
for
$12.5 million within 180 days after the close of the initial transaction since such exercise is at MediaMath's discretion.
The
Company historically accounted for its ownership interest in MediaMath using the equity method of accounting. The Company's
historical consolidated statements of operations included equity income (loss) related to its ownership position in MediaMath.
The unaudited pro forma consolidated statements of operations of the Company eliminate the equity income (loss) related to MediaMath
from January 1, 2017 through March 31, 2108.
The
unaudited pro forma financial information of the Company described above should be read in conjunction with the historical consolidated
financial statements of the Company and the related notes thereto. The unaudited pro forma financial statements of the Company
are not necessarily indicative of the financial position or results of operations of the Company that may have actually occurred
had the transaction taken place on the dates noted, or the future financial position or operating results of the Company.
Safeguard Scientifics, Inc.
Unaudited Pro Forma Condensed
Consolidated Balance Sheet
March 31, 2018
(In thousands, except per value)
As Reported
Adjustments for
Partial Disposition
of MediaMath (1)
Pro Forma
Assets
Cash, cash equivalents and marketable securities
$
34,338
$
45,000
(1)
$
79,338
Other current assets
2,856
-
2,856
Total current assets
37,194
45,000
82,194
Ownership interest in and advances to partner companies
132,277
(1,381
)(2)
130,896
Other assets
1,751
-
1,751
Total Assets
$
171,222
$
43,619
$
214,841
Liabilities and Equity
Liabilities:
Other current liabilities
$
5,481
$
-
$
5,481
Convertible senior debentures -current
40,829
-
40,829
Total current liabilities
46,310
-
46,310
Other long-term liabilities
3,341
-
3,341
Credit facility
45,736
-
45,736
Total liabilities
95,387
-
95,387
Equity:
Preferred stck, $0.10 par value; 1,000 shares authorized
-
-
-
Common stock, $0.10 par value; 83,333 shares authorized; 21,573 shares issued at March 31, 2018
2,157
2,157
Additional paid-in capital
812,796
812,796
Treasury stock, at cost, 1,012 shares at March 31, 2018
(17,441
)
(17,441
)
Accumulated deficit
(721,646
)
43,600
(3)
(678,046
)
Accumulated other comprehensive loss
(31
)
19
(12
)
Total equity
75,835
43,619
119,454
Total Liabilities and Equity
$
171,222
$
43,619
$
214,841
(1) The unaudited pro forma consolidated balance sheet gives
effect to the transaction assuming the partial disposition of MediaMath occurred on March 31, 2018.
(2) Reflects the carrying value for the disposed portion
of the Company's ownership interest in MediaMath.
(3) Reflects the non-recurring net gain on sale, calculated
as the excess of the estimated net proceeds of $45,000 over the carrying value for the disposed portion of the Company's ownership
interest in MediaMath as of March 31, 2018.
Safeguard Scientifics, Inc.
Unaudited Pro Forma Consolidated
Statement of Operations
For the Year Ended December
31, 2017
(In thousands, except per share data)
As Reported
Adjustments
for Partial
Disposition of
MediaMath (1)
Pro Forma
General and administrative expense
$
17,131
$
-
$
17,131
Operating loss
(17,131
)
-
(17,131
)
Other income (loss), net
(339
)
-
(339
)
Interest income
3,876
-
3,876
Interest expense
(8,620
)
-
(8,620
)
Equity income (loss)
(66,358
)
2,539
(2)
(63,819
)
Net loss before income taxes
(88,572
)
2,539
(86,033
)
Income tax benefit (expense)
-
-
-
Net loss
$
(88,572
)
$
2,539
$
(86,033
)
Net loss per share:
Basic
$
(4.34
)
$
(4.21
)
Diluted
$
(4.34
)
$
(4.21
)
Weighted average shares used in computing net loss per share:
Basic
20,430
20,430
Diluted
20,430
20,430
(1) The unaudited pro forma consolidated statements of operations
give effect to the transaction assuming the partial disposition of MediaMath occurred on January 1, 2017 and exclude the $43,600
non-recurring net gain on sale.
(2) Reflects the elimination of equity income (loss) related
to the Company's ownership interest in MediaMath under the equity method of accounting.
Safeguard Scientifics, Inc.
Unaudited Pro Forma Consolidated Statement
of Operations
For the Three Months Ended March 31,
2018
(In thousands, except per share data)
As Reported
Adjustments
for Partial
Disposition of
MediaMath (1)
Pro Forma
General and administrative expense
$
5,589
$
-
$
5,589
Operating loss
(5,589
)
-
(5,589
)
Other income (loss), net
(1,435
)
-
(1,435
)
Interest income
798
-
798
Interest expense
(2,690
)
-
(2,690
)
Equity income (loss)
2,746
(583
)(2)
2,163
Net loss before income taxes
(6,170
)
(583
)
(6,753
)
Income tax benefit (expense)
-
-
-
Net loss
$
(6,170
)
$
(583
)
$
(6,753
)
Net loss per share:
Basic
$
(0.30
)
$
(0.33
)
Diluted
$
(0.30
)
$
(0.33
)
Weighted average shares used in computing net loss per share:
Basic
20,506
20,506
Diluted
20,506
20,506
(1) The unaudited pro forma consolidated statements of operations
give effect to the transaction assuming the partial disposition of MediaMath occurred on January 1, 2017.
(2) Reflects the elimination of equity income (loss) related
to the Company's ownership interest in MediaMath under the equity method of accounting.

EX - 99 . 2 4 tv497995 _ ex99 - 2 . htm EXHIBIT 99 . 2 Exhibit 99 . 2 Pro Forma Financial Information On July 2 , 2018 , Safeguard Delaware , Inc . , a subsidiary of Safeguard Scientifics , Inc . ( " the Company " ) , entered into a stock repurchase agreement with MediaMath Holdings , Inc . ( " MediaMath " ) , pursuant to which the Company agreed to sell to MediaMath , and MediaMath agreed to repurchase from the Company , 39 . 13 % of the Company 's ownership position in MediaMath for a purchase price of $ 45.0 million . The Company also granted MediaMath an option to repurchase an additional 10 . 87 % of the Company 's ownership position in MediaMath for $ 12.5 million within 180 days after the close of the initial transaction . The following unaudited pro forma consolidated statements of operations of the Company give effect to the transaction as if it had been consummated on January 1 , 2017 . The unaudited pro forma consolidated balance sheet of the Company gives effect to the transaction as if it had been consummated on March 31 , 2018 . The unaudited pro forma consolidated financial statements of the Company do not reflect the exercise of MediaMath 's option to repurchase an additional 10 . 87 % of the Company 's ownership position for $ 12.5 million within 180 days after the close of the initial transaction since such exercise is at MediaMath 's discretion . The Company historically accounted for its ownership interest in MediaMath using the equity method of accounting . The Company 's historical consolidated statements of operations included equity income ( loss ) related to its ownership position in MediaMath . The unaudited pro forma consolidated statements of operations of the Company eliminate the equity income ( loss ) related to MediaMath from January 1 , 2017 through March 31 , 2108 . The unaudited pro forma financial information of the Company described above should be read in conjunction with the historical consolidated financial statements of the Company and the related notes thereto . The unaudited pro forma financial statements of the Company are not necessarily indicative of the financial position or results of operations of the Company that may have actually occurred had the transaction taken place on the dates noted , or the future financial position or operating results of the Company . Safeguard Scientifics , Inc . Unaudited Pro Forma Condensed Consolidated Balance Sheet March 31 , 2018 ( In thousands , except per value ) As Reported Adjustments for Partial Disposition of MediaMath ( 1 ) Pro Forma Assets Cash , cash equivalents and marketable securities $ 34,338 $ 45,000 ( 1 ) $ 79,338 Other current assets 2,856 - 2,856 Total current assets 37,194 45,000 82,194 Ownership interest in and advances to partner companies 132,277 ( 1,381 ) ( 2 ) 130,896 Other assets 1,751 - 1,751 Total Assets $ 171,222 $ 43,619 $ 214,841 Liabilities and Equity Liabilities : Other current liabilities $ 5,481 $ - $ 5,481 Convertible senior debentures - current 40,829 - 40,829 Total current liabilities 46,310 - 46,310 Other long - term liabilities 3,341 - 3,341 Credit facility 45,736 - 45,736 Total liabilities 95,387 - 95,387 Equity : Preferred stck , $ 0.10 par value ; 1,000 shares authorized - - - Common stock , $ 0.10 par value ; 83,333 shares authorized ; 21,573 shares issued at March 31 , 2018 2,157 2,157 Additional paid - in capital 812,796 812,796 Treasury stock , at cost , 1,012 shares at March 31 , 2018 ( 17,441 ) ( 17,441 ) Accumulated deficit ( 721,646 ) 43,600 ( 3 ) ( 678,046 ) Accumulated other comprehensive loss ( 31 ) 19 ( 12 ) Total equity 75,835 43,619 119,454 Total Liabilities and Equity $ 171,222 $ 43,619 $ 214,841 ( 1 ) The unaudited pro forma consolidated balance sheet gives effect to the transaction assuming the partial disposition of MediaMath occurred on March 31 , 2018 . ( 2 ) Reflects the carrying value for the disposed portion of the Company 's ownership interest in MediaMath . ( 3 ) Reflects the non - recurring net gain on sale , calculated as the excess of the estimated net proceeds of $ 45,000 over the carrying value for the disposed portion of the Company 's ownership interest in MediaMath as of March 31 , 2018 . Safeguard Scientifics , Inc . Unaudited Pro Forma Consolidated Statement of Operations For the Year Ended December 31 , 2017 ( In thousands , except per share data ) As Reported Adjustments for Partial Disposition of MediaMath ( 1 ) Pro Forma General and administrative expense $ 17,131 $ - $ 17,131 Operating loss ( 17,131 ) - ( 17,131 ) Other income ( loss ) , net ( 339 ) - ( 339 ) Interest income 3,876 - 3,876 Interest expense ( 8,620 ) - ( 8,620 ) Equity income ( loss ) ( 66,358 ) 2,539 ( 2 ) ( 63,819 ) Net loss before income taxes ( 88,572 ) 2,539 ( 86,033 ) Income tax benefit ( expense ) - - - Net loss $ ( 88,572 ) $ 2,539 $ ( 86,033 ) Net loss per share : Basic $ ( 4 . 34 ) $ ( 4 . 21 ) Diluted $ ( 4 . 34 ) $ ( 4 . 21 ) Weighted average shares used in computing net loss per share : Basic 20,430 20,430 Diluted 20,430 20,430 ( 1 ) The unaudited pro forma consolidated statements of operations give effect to the transaction assuming the partial disposition of MediaMath occurred on January 1 , 2017 and exclude the $ 43,600 non - recurring net gain on sale . ( 2 ) Reflects the elimination of equity income ( loss ) related to the Company 's ownership interest in MediaMath under the equity method of accounting . Safeguard Scientifics , Inc . Unaudited Pro Forma Consolidated Statement of Operations For the Three Months Ended March 31 , 2018 ( In thousands , except per share data ) As Reported Adjustments for Partial Disposition of MediaMath ( 1 ) Pro Forma General and administrative expense $ 5,589 $ - $ 5,589 Operating loss ( 5,589 ) - ( 5,589 ) Other income ( loss ) , net ( 1,435 ) - ( 1,435 ) Interest income 798 - 798 Interest expense ( 2,690 ) - ( 2,690 ) Equity income ( loss ) 2,746 ( 583 ) ( 2 ) 2,163 Net loss before income taxes ( 6,170 ) ( 583 ) ( 6,753 ) Income tax benefit ( expense ) - - - Net loss $ ( 6,170 ) $ ( 583 ) $ ( 6,753 ) Net loss per share : Basic $ ( 0 . 30 ) $ ( 0 . 33 ) Diluted $ ( 0 . 30 ) $ ( 0 . 33 ) Weighted average shares used in computing net loss per share : Basic 20,506 20,506 Diluted 20,506 20,506 ( 1 ) The unaudited pro forma consolidated statements of operations give effect to the transaction assuming the partial disposition of MediaMath occurred on January 1 , 2017 . ( 2 ) Reflects the elimination of equity income ( loss ) related to the Company 's ownership interest in MediaMath under the equity method of accounting .
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