8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

________________________

FORM 8‑K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):    January 16, 2018

Safeguard Scientifics, Inc.

(Exact Name of Registrant as Specified in Charter)

Pennsylvania	1-5620		23-1609753
(State or Other Jurisdiction of	(Commission File Number)		(I.R.S. Employer ID No.)
Incorporation)
170 North Radnor-Chester Road
Suite 200
Radnor, PA			19087
(Address of Principal Executive Offices) Offices)			(Zip Code)
Registrant's telephone number, including area code		610-293-0600
Not applicable
(Former Name of Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

ITEM 2.05.    Costs Associated With Exit or Disposal Activities.

On January 16, 2018, the Board of Directors (the “Board”) of Safeguard Scientifics, Inc. (the “Registrant” or the “Company”) approved a change in the Company’s strategy. Under the new strategy, the Company will not deploy capital into new partner companies and will focus on supporting its existing partner companies and maximizing monetization opportunities for partner company interests to enable distributions of net proceeds to shareholders.

This change in strategy will result in the termination of certain employees. The Company expects to recognize a charge of $1.3 million in the first quarter of 2018 in connection with these terminations. Such amounts are expected to be paid in cash within the next twelve months.

ITEM 7.01. Regulation FD Disclosure.

On January 17, 2018, the Registrant issued a press release announcing the change in strategy referred to in Item 2.05 above. A copy of such press release is attached as Exhibit 99.1 hereto.

ITEM 9.01.    Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Exhibit Title
99.1	Press Release of Registrant, dated January 17, 2018.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Safeguard Scientifics, Inc.

Date:    January 17, 2018        By:    BRIAN J. SISKO                

Name: Brian J. Sisko

Title: Chief Operating Officer, Executive Vice President

and Managing Director

EX-99.1

SAFEGUARD SCIENTIFICS ANNOUNCES CHANGE IN STRATEGY AND OPERATIONS

Radnor, PA, January 17, 2018— Safeguard Scientifics, Inc. (NYSE: SFE) (“Safeguard” or "the Company") today announced that Safeguard’s Board of Directors and management have determined to implement a change in the Company’s business strategy and operations. This decision follows an extensive review and assessment of options to increase shareholder value that was undertaken in consultation with financial and legal advisors. Under the new strategy, Safeguard will not deploy any capital into new Partner Company opportunities and will focus on supporting its existing Partner Companies and maximizing monetization opportunities for Partner Company interests to enable distributions of net proceeds to shareholders. The Company 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. Safeguard anticipates distributing to shareholders net proceeds from the sale of Partner Companies or Partner Company interests, as applicable, after satisfying the Company’s debt obligations and working capital needs.

Robert J. Rosenthal, Ph.D., Chairman of the Safeguard Board, said, “The Board and management team are focused on creating value for and returning capital to Safeguard shareholders. Safeguard’s Partner Companies continue to achieve strong growth and financial results. We believe that we are well positioned to realize the full potential of our interests in our Partner Companies, and will evaluate a variety of opportunities to monetize these interests in a timely manner while focusing on the most profitable outcomes. We are committed to maximizing shareholder value and will take actions that we believe are in the best interest of the Company and all shareholders.”

The Company also announced it is implementing an immediate initiative to generate annual cost savings of between $5 million and $6 million, which reflect changes in the Company’s personnel and operating cost requirements under the new strategy. Corporate expenses, excluding interest, depreciation and stock-based compensation were approximately $16 million in 2017.

Stephen T. Zarrilli, Safeguard’s President and CEO, said, “As we evaluated the best path forward for Safeguard, we concluded that a focused set of actions to maximize the realization of value from our assets is in the best interest of our shareholders. With this new strategy in place, we will immediately create a more streamlined organizational structure that will better position us to focus our resources on the highest-return opportunities while generating immediate cost savings. We also expect to realize additional savings over time as assets are monetized and resource needs are further decreased.”

The Company has not set a timetable for completion of the monetization and distribution process. However, the Board and management team recognize the value and benefit in achieving well-timed risk adjusted returns for the benefit of shareholders under an appropriate cost structure.

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About Safeguard Scientifics Historically, Safeguard Scientifics (NYSE:SFE) 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. For more information, please visit www.safeguard.com or follow us on Twitter @safeguard.

Forward-looking Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are subject to risks and uncertainties. The risks and uncertainties that could cause actual results to differ materially include, among others, our ability to make good decisions about the deployment of capital, the fact that our partner companies may vary from period to period, our substantial capital requirements and absence of liquidity from our partner company holdings, fluctuations in the market prices of our publicly traded partner company holdings, competition, our inability to obtain maximum value for our partner company holdings, our ability to attract and retain qualified employees, market valuations in sectors in which our partner companies operate, our inability to control our partner companies, our need to manage our assets to avoid registration under the Investment Company Act of 1940, and risks associated with our partner companies, including the fact that most of our partner companies have a limited history and a history of operating losses, face intense competition and may never be profitable, the effect of economic conditions in the business sectors in which Safeguard’s partner companies operate, and other uncertainties described in our filings with the Securities and Exchange Commission. Many of these factors are beyond the Company’s ability to predict or control. As a result of these and other factors, the Company’s past financial performance should not be relied on as an indication of future performance. The Company does not assume any obligation to update any forward-looking statements or other information contained in this press release.

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SAFEGUARD CONTACT:

John E. Shave III

Senior Vice President, Investor Relations and Corporate Communications

610.975.4952

jshave@safeguard.com

MEDIA CONTACT:

Ed Trissel / Aura Reinhard

Joele Frank Wilkinson Brimmer Katcher

212.355.4449

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