NEW YORK, Feb. 21, 2018 /PRNewswire/ -- Sierra Capital
Investments, L.P. ("Sierra"), one of the largest shareholders of
Safeguard Scientifics, Inc. ("Safeguard," or the "Company") (NYSE:
SFE), with ownership of approximately 5.1% of the Company's
outstanding shares, issued a statement today condemning Safeguard's
adoption of a new so-called "tax benefits preservation plan," which
effectively handcuffs its largest shareholders from acquiring
additional shares and negatively impacts trading liquidity
ahead of an upcoming election contest. This comes at a time when,
according to Sierra's calculations, Safeguard's tax assets appear
to be at very little risk.
"Less than one week after adopting a series of onerous
nomination Bylaw requirements, and despite our request not to
engage in any further activities that could be viewed as
entrenching the Board and management, the Safeguard Board has now
brazenly adopted a 4.99% poison pill, under the guise of protecting
the Company's valuable tax assets. It is nothing new that the
Company has valuable tax assets. We therefore cannot understand the
Board's justification for adopting such a restrictive and chilling
poison pill at this time just days ahead of the nomination deadline
for the 2018 Annual Meeting. The Board should immediately
disclose its computation for how vulnerable the Company is to an
'ownership change', as defined under Section 382 of the Internal
Revenue Code, so shareholders can determine for themselves whether
the Company is justified in taking this extreme step, or whether
the poison pill is simply a pretext to further entrench the Board
and management. While we applaud any genuine action by the Company
to protect the diminution of shareholder value, our estimates
indicate Safeguard is nowhere near reaching the 50 percentage point
threshold, with movement of less than 20 percentage points by 5%
holders in aggregate over the past three years. Without more, this
begs the question about the Board's true motivation and timing of
this initiative.
We are now even more convinced of the need for change at
Safeguard and are preparing to nominate a slate of director
candidates to the Board by this Friday's deadline. While we are
still in the process of evaluating the degree of change that we
believe is necessary at Safeguard, the Board's recent actions
signify that substantial change may be in order. We look forward to
giving shareholders a voice at the 2018 Annual Meeting.
However, as always, we remain open to any constructive dialogue
with the Board that could lead to an amicable resolution."
About Sierra Capital Investments, L.P.
Sierra Capital Investments, L.P. is an entity owned by Maplewood
Partners, LLC ("Maplewood") and Horton Capital Partners, LLC
("Horton"). Maplewood is an alternative asset management firm that
employs an opportunistic, value driven approach that capitalizes on
complex, misunderstood, or off-the-run opportunities in both public
and private equities. Horton is an investment firm making
concentrated investments in undervalued and under-appreciated small
and micro-capitalization public companies.
Investor contacts:
Darren C.
Wallis
(610) 816-6660
www.maplewoodllc.com
Joseph M. Manko, Jr.
(215) 399-5402
www.thehortonfund.com
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
If an amicable resolution cannot be reached, Sierra Capital
Investments, L.P., together with the other participants named
herein (collectively, "Sierra Capital"), intends to file a
preliminary proxy statement and accompanying proxy card with the
Securities and Exchange Commission ("SEC") to be used to solicit
votes for the election of a slate of director nominees at the 2018
annual meeting of shareholders of Safeguard Scientifics, Inc. (the
"Company").
SIERRA CAPITAL STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY
TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S
WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN
THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT
WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES
SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.
The participants in the proxy solicitation are anticipated to be
Sierra Capital Investments, LP ("Sierra"), Horton Capital Partners
Fund, LP ("HCPF"), AVI Capital Partners, LP ("AVI"), Horton Capital
Partners LLC ("HCP"), Horton Capital Management, LLC ("HCM"),
Maplewood Advisors GP, LLC ("MAGP"), Maplewood Advisors IM, LLC
("MAIM"), Maplewood Global Partners, LLC ("MGP"), Maplewood
Partners, LLC ("MP"), Darren C.
Wallis ("Mr. Wallis"), Joseph M.
Manko, Jr. ("Mr. Manko") and Sierra Capital's director
nominees, which have not yet been identified.
As of the date hereof, Sierra owns directly 707,845 shares of
Common Stock of the Company (the "Common Stock"). Pursuant to
investment management agreements, HCM and MAIM maintain investment
and voting power with respect to the securities held by Sierra.
However, despite the delegation of investment and voting power to
HCM and MAIM, HCP and MGP may be deemed to be the beneficial owners
of such securities under Rule 13d-3 of the Securities Exchange Act
of 1934, as amended ("Rule 13d-3") because HCP and MGP have the
right to acquire investment and voting power through termination of
investment management agreements with HCM and MAIM. As of the date
hereof, HCPF owns directly 33,303 shares of Common Stock. Pursuant
to investment management agreements, HCM maintains investment and
voting power with respect to the securities held by HCPF. However,
despite the delegation of investment and voting power to HCM, HCP
may be deemed to be the beneficial owner of such securities under
Rule 13d-3 because HCP has the right to acquire investment and
voting power through termination of investment management
agreements with HCM. As of the date hereof, AVI owns directly
10,098 shares of Common Stock. Pursuant to investment management
agreements, MAIM maintains investment and voting power with respect
to the securities held by AVI. However, despite the delegation of
investment and voting power to MAIM, MAGP may be deemed to be the
beneficial owner of such securities under Rule 13d-3 because MAGP
has the right to acquire investment and voting power through
termination of investment management agreements with MAIM. HCM and
MAIM also act as investment advisers to certain jointly managed
accounts. Under investment management agreements with these jointly
managed accounts, HCM and MAIM have investment and voting power
with respect to 304,722 shares of Common Stock held in such
managed accounts. HCP and MGP are the general partners for Sierra.
MAGP is the general partner of AVI. HCP is the general partner of
HCPF. Mr. Manko is the managing member of HCM and HCP. MP is the
parent company of MGP, MAIM and MAGP. Mr. Wallis is the managing
member of MP, MGP, MAGP, and MAIM. By reason of the provisions of
Rule 13d-3, (i) each of MP, Mr. Wallis and MAIM may be deemed to
beneficially own the 1,022,665 shares of Common Stock held by AVI,
Sierra and the managed accounts, (ii) each of HCM and Mr. Manko may
be deemed to beneficially own the 1,045,870 shares of Common Stock
held by HCP, Sierra and the managed accounts, (iii) HCP may be
deemed to beneficially own the 741,148 shares of Common Stock held
by HCPF and Sierra, (iv) MGP may be deemed to beneficially own the
707,845 shares of Common Stock held by Sierra, and (v) MAGP may be
deemed to beneficially own the 10,098 shares of Common Stock held
by AVI.
View original
content:http://www.prnewswire.com/news-releases/sierra-capital-comments-on-safeguards-adoption-of-shareholder-chilling-nol-poison-pill-300601887.html
SOURCE Sierra Capital Investments, L.P.