Safeguard Scientifics, Inc. (NYSE:SFE), a holding company that builds value in growth-stage life sciences and technology companies, is hosting its 6th annual Investor Day 2012 on Tuesday, October 10, 2012 at The Yale Club of New York City. Safeguard is a catalyst for business growth and value creation. We provide capital and operational support to emerging and growth-stage life sciences and technology companies. Representatives from Safeguard will include: Peter J. Boni, President and CEO; Stephen T. Zarrilli, SVP and CFO; and James A. Datin, EVP and Managing Director. Partner company presentations include, in alphabetical order, AdvantEdge Healthcare Solutions, Bridgevine, Good Start Genetics, Lumesis, MediaMath, NuPathe (NASDAQ:PATH), PixelOptics and Putney. For the complete agenda, please visit www.safeguard.com/InvestorDay.com. Why Own Safeguard? - Full Value Yet to be Realized - Ownership Stakes in Exciting Partner Companies - Top Performance of Proven Team - Financial Strength, Flexibility and Liquidity - Strong Alignment of Interests Forward-Looking Statements Statements contained in this presentation that are not historical facts are forward looking statements which involve certain risks and uncertainties including, but not limited to, risks associated with the uncertainty of managing rapidly changing technologies, limited access to capital, competition, the ability to attract and retain qualified employees, our ability to execute our strategy, the uncertainty of the future performance of our partner companies, acquisitions and dispositions of additional partner companies, the inability to manage growth, government regulation and legal liabilities and the effect of economic conditions in the business sectors in which our partner companies operate, negative media coverage and other uncertainties as described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K. Safeguard does not assume any obligation to update any forward looking statements or other information contained in this presentation.
<ul><li> 1. Investor Day 2012 WELCOME</li></ul><p> 2. Forward Looking StatementsStatements contained in this presentation that are not historical facts areforward looking statements which involve certain risks and uncertaintiesincluding, but not limited to, risks associated with the uncertainty ofmanaging rapidly changing technologies, limited access to capital,competition, the ability to attract and retain qualified employees, our abilityto execute our strategy, the uncertainty of the future performance of ourpartner companies, acquisitions and dispositions of additional partnercompanies, the inability to manage growth, government regulation and legalliabilities and the effect of economic conditions in the business sectors inwhich our partner companies operate, negative media coverage and otheruncertainties as described in our filings with the Securities and ExchangeCommission, including our Annual Report on Form 10-K.Safeguard does not assume any obligation to update any forward lookingstatements or other information contained in this presentation.NYSE:SFE 3. Investor Day 2012NYSE:SFE 4. Survey Expect to be Contacted Shortly Your Participation is Critical Findings will Assist Management in: Understanding any Misperceptions within the Investment Community Developing Strategies to Maximize Value and Communicate EffectivelyNYSE:SFE 5. Peter J. BoniInvestor Day 2012 President and CEO 6. The Safeguard Difference (NYSE:SFE) SIGNIFICANTLYUNDERVALUEDNYSE:SFE 7. Why Own Safeguard? Full Value Yet to be Realized Ownership Stakes in Exciting Partner Companies Top Performance of Proven Team Financial Strength, Flexibility and Liquidity Strong Alignment of Interests NYSE:SFE 8. Experienced Team NYSE:SFE 9. The Company We KeepNYSE:SFE 10. Safeguard TodayNYSE:SFE 11. Safeguard PositioningNYSE:SFE 12. Go To Market Strategy> Growth Financing> Typically Deploy Up to $25M> Generally Primary Shareholder> Realize ValueGROWTH DRIVERS CRITERIA Maturity Management Migration Market Convergence Model Compliance Momentum Cost Containment MoatNYSE:SFE 13. Attractive SectorsRepresents % of Capital Deployed in Current Partner Companies as of June 30, 2012. NYSE:SFE 14. Recent Success Stories Cash-on-Cash Acquired ByProceeds*Return $38M4x $138M13x $41M3xReturn Potential Could Approach 8x***$208M**3x Market Cap Increased 5x* Includes amounts held in escrow as of June 30, 2012 which are deemed likely to be realized during 2012, if any, but not unearned milestones / earnouts, where applicable.** Proceeds include $61M from sale of CLRT shares during Q309.*** Based on achievement of difficult earnout provisions.NYSE:SFE 15. Revenue Stages NYSE:SFE 16. Safeguard Partner Companies RANGE: $185M to $190M 16 Partner Companies Today 26 Board Seats Across 16 Companies 15 Companies Generating Revenue Deployed $176.7M in Current PartnerCompanies as of June 30, 2012 Realized $643M Since January 2006 * Aggregate revenue guidance for 2012 and prior years, presented above, reflects revenue on a net basis. Revenue figures utilized for certain companies pertain to periods prior to Safeguards involvement with said companies and based solely on information provided to Safeguard by such companies. Safeguard reports the revenue of its equity method and cost method partner companies on a one-quarter lag basis.NYSE:SFE 17. Strategy for Growth Build Value in Current Holdings Realize Some Valuable Exits Replenish The Holdings with Winners Expand the PlatformNYSE:SFE 18. Stephen T. ZarrilliInvestor Day 2012 SVP and CEO 19. Key Financial Fundamentals Strength, Flexibility and Liquidity Cash and Equivalents and Marketable Securities: ~$241M* Realized $643M in Proceeds (Excluding Amounts held in Escrow)** Deployed $327M in Safeguard Capital** Tax Loss Carryforwards in Excess of $150M* Strict Management of Operating Expenses $0.85 Per Share on Annual Basis Continued Expansion of Capital Under Management Income * At 6/30/12 ** At/Since 1/1/06NYSE:SFE 20. Cash Use6/30/12 YTD(in millions)New Capital Deployments $ 12Follow-On Funding for Existing Holdings7Operating Expenses10Penn Mezzanine 2$ 31NYSE:SFE 21. Current HoldingsAcquisitionOwnershipCarrying Year %Value*CostLife Sciences Partner Companies: ($ in millions)Alverix2007 50% -8.4Good Start Genetics2010 29% 6.2 10.5Medivo 2011 30% 5.86.3NovaSom2011 30%15.7 20.0PixelOptics2011 25%13.4 27.1Putney 2011 28% 9.0 10.0NuPathe (Nasdaq:PATH)2006 18%10.9 18.3 TOTAL:61.0100.6Technology Partner Companies:AdvantEdge Healthcare Solutions2006 40% 8.115.3Beyond.com 2007 38%10.613.5Bridgevine 2007 23% 6.510.0DriveFactor2011 24% 1.6 1.7Hoopla Software2011 25% 1.2 1.3Lumesis2012 32% 2.2 2.2MediaMath2009 22%11.716.9Spongecell 2012 23%10.010.0ThingWorx2011 30% 3.1 5.0 TOTAL:55.075.9Total: Life Sciences + Technology $ 116.0** $ 176.5 ***As of 6/30/12** Figures above do not include amounts deployed relating to Penn Mezzanine since inception or amounts previously deployed in private equity funds. NYSE:SFE 22. Purpose/Objective Asset Diversification Expansion of Capital Platform Revenue/Fee Income Generation Economic Attributes 36% Ownership Income 8% Preferred Return $30M to be Deployed Rollover of Capital into Future Pools NYSE:SFE 23. Equity Incentive Compensation Aligned with Shareholder Interests Primarily Performance Based Vesting Target Returns on Deployed Capital and Market Cap ThresholdsNYSE:SFE 24. Investor Day 2012 Questions & Answers 25. James A. DatinInvestor Day 2012 EVP and Managing Director 26. Bridgevine, Inc. Bridgevine is a leading performance based digital marketing company that has consolidated the fragmented digital media ecosystem through a proprietary up-sell and cross-sell optimization platform.$10.0M 23% AUG07CAPITALSFE STAKE INITIAL CAPITAL Migration from offline to online advertisingDEPLOYED DEPLOYED Acquires Customers for Internet, Phone, TV, Wireless and Entertainment 75+ Marquee Advertisers Fully Integrated Into Bridgevine Platform Partners include AT&T, Comcast, DirecTV, Amex, Dell, Intel and more! Named to INC. 500|5000 Six Years in a Row Highly Scalable Business Model New CEO J. Patrick (JP) BewleyNYSE:SFE 27. Investor Day 2012 Questions & Answers 28. Cloud Based Research & AnalysisPlatform for the Municipal Fixed Income MarketSafeguard Scientifics Investor Day Presentation October 9, 2012 Yale Club 29. Company Age: Founded 2010 Youngest company in the Safeguard portfolio Location: Stamford, CT Team: Founders: Gregg Bienstock, Ambac, Tim Stevens, Ambac Board: Jim Ashton, Ex-CEO Sungard; Robin Wiessmann, MSRB Board & Ex-Treasurer State of PA; Philip Moyer, Ex CEO EDGAR Online, MD Safeguard Funding: $850,000 Invested by Co-Founders $250,000 Seed Financing from Friends and Family $2.2mm Series A from Safeguard + $300k others 30. Market US Muni Market $4.0 Trillion Market, 1.5mm CUSIPS, 54,000+ Issuers 30% Institutional: Portfolio & Risk Managers, Credit Analysts: estimate 6,000 as target 70% Retail: 275,000 Financial Advisors; estimate 63,000 as target Opaque Market Facing Increasing Scrutiny and Regulation State and Local Government Fiscal Reality Unfunded Liabilities: $2 to $3 Trillion of Unfunded Pension and OPEB Liabilities Stale Financials: 190 days from Fiscal Year Close and Financial Reporting Insurance and Ratings: Decreased Reliance Increased Regulatory Framework: Dodd Frank, MSRB and FINRA Alternatives to Ratings Required to Disclose to Investors Information Reasonably Available Report Material Events Timely Investors Chasing Yield Limited Analytical Tools 31. Lumesis DIVER Platform Parsed 1.5 million Muni Bonds by CUSIP and Geo-Locate to State,County, City and School District Level Built Massive Cloud-Based Data Store Integrated Nearly 200 Private and Public Data Sets Housing, Employment, Education, Commerce, Disasters, Healthcare, Income,Pension, Population, Taxes and More Users Securely Import Portfolios of Any Size Sophisticated Analytical and Visualization Tools that Scale Deep IP: Patents Pending 32. Two Products DIVER AnalyticsDIVER AdvisorTarget Users: Target Users: Credit Analysts Financial Advisors Portfolio and Risk Managers Legal/Compliance Credit Analysts Target Market: Global Banks Regional & Bankers Banks Target Market: Mutual Funds Global Banks Investment Advisory Regional Banks & Broker/Dealers Asset Managers Investment Advisory Insurance Companies (P&C, Life) Insurance (w/ Advisory Networks) Bond Insurers Hedge Funds 33. DIVER Analytics Released: Sept 2010 Scalable Analytical and Visualization Tools for Risk/Portfolio Management Analyze an Entire Portfolio or a Single CUSIP Highlight and Manage Risks/Opportunities Enhance Credit Research Capabilities Compare to Benchmarks Easily Upload Portfolios Save Time and Money Eliminates Time-Consuming Data-Mining and Preparation Track Drivers of Municipal Revenues and Expenditures Alerts and Monitoring Pinpoint Issuers/Positions of Concern and Shape Portfolios Integration with Leading Portfolio Management Tool Business Model: Over $15,000/User/Annum 34. DIVER Analytics 35. DIVER Advisor Released: October 2012 Compliance and Information Delivery Solution Addresses Regulatory Requirements: FINRA, MSRB, SEC and Internal Reporting Adherence Dodd Frank/OCC Guideline Support Generates Client Ready Report Identifying Risks and Characteristics of Every CUSIP From 30 Minutes to 3 Seconds Offers Communication Efficiencies Dissemination of Research from Credit Analyst to FA Serving: Financial Advisor and PWM Networks Simple to Generate and Easy to Deliver to Client Protects from Reputational Risk Improves Client Service with Real-Time InformationBusiness Model: Between $1,000-$2,500/User/Annum 36. DIVER Advisor 37. Product Pipeline DIVER MBR: Easy Button CUSIP/Sector Based Bond Report DIVER API: Programmatically deliver DIVER Data to 3rd Parties DIVER Issuer: Assist Issuers in Analysis and Reporting 38. Growth Strategies (Use of Funds) Building Sales & Marketing Team Hired MD of Sales Hired Part Time CMO Adding Dedicated Customer Service Undertaking Significant Branding Effort & New Web Presence Expanding Development Team Expanding Data Team Expanding Strategic Alliances with Established MuniMarket Tools Vendors 39. Financials/Metrics Revenue Growth at >75% Over 2011 Client CAGR 75%+ Renewal Rate: 88% Financial Data Company M&A Multiples - 3-5X Revenues Goal: $15mm++ for 2014 40. Summary Municipal Fixed Income Market Underserved Changed Dynamics Increased Regulation Lumesis Early Stage Company Providing Patent Pending, Cloud-Based Platform Analytics and Visualization Serving the Portfolio & Risk Managers, Analysts, Financial Advisors and Issuers 41. Cloud Based Research & Analytical Platform for the Municipal Fixed Income Market 42. Investor Day 2012 Questions & Answers 43. AdvantEdge Healthcare Solutions October 2012 44. Enabling Healthcare Providers to ThriveAHS is a technology enabled provider of Revenue Cycle Management Services,Informatics, and Expertise that enables healthcare providers to maximize financial performance and eliminate compliance risks. AHS CONFIDENTIAL INFORMATION Do Not Distribute 45. About AdvantEdge AdvantEdge Healthcare Solutions Top 10 medical billing, coding and practice management company Over 675 employees in 8 regional offices in the US and 1 office in Bangalore, India Collecting over $1.25B for its physician clients Recognized industry leader - uniquely positioned Clients are typically large medical group practices with a high propensity to outsource due topractice characteristics Since 1966, AdvantEdge (and/or its acquired entities) has served some of the nations mostrespected healthcare institutions Hospital for Special Surgery North Shore-LIJ Health System Advocate Healthcare System Wellspan St. Barnabas Health System SUNY Downstate Med Center Erlanger Health CentersPartners Healthcare The Company continues to enjoy outstanding growth opportunities Thoughtful acquirer yielding 5 year CAGR of 41% in a consolidating market Organic growth rate (annualized revenue of new sales closed) average of 19.8% annually over past 5 years AdvantEdge has been recognized as one of the fastest growing companies by regional andnational publications, such as INC magazine (4 years running) and NJBusiness (top 10 growthcompany in 2010) AHS CONFIDENTIAL INFORMATION Do Not Distribute 46. Business Characteristics Highly predictable recurring revenues and strong cashflow Superior client retention Significant Operating Leverage: Scalable platformbased on proprietary technology and workflow Effective buy-and-build strategy: Integrate, Migrate,Operate Sales & marketing focus with aggressive organicgrowth strategy Management Team has extensive industry, acquisitionand integration experienceAHS CONFIDENTIAL INFORMATION Do Not Distribute 47. Market Leading StrategyCreating Value for Clients, Employees, and Stakeholders through:ZERO CLIENT GROWTH EFFICIENCY TECHNOLOGY INTEGRATIONATTRITION AHS CONFIDENTIAL INFORMATION Do Not Distribute 48. Geographic PresenceAHS has a broad footprint across the US and Bangalore, IndiaAHS OfficeAHS ClientAHS Clients (Multiple/many clients) AHS CONFIDENTIAL INFORMATION Do Not Distribute 49. AdvantEdge Value Proposition The ProblemConstant threatAttract & retainof reduced high-qualityreimbursement staffratesIncreasingcomplexity &Technology andregulatory staff investmentsrequirementsare expensiveThe AHS Solution More Money, Faster Compliance, Built-in Business Intelligence and Reporting Anytime/Anywhere Client First ServiceAHS CONFIDENTIAL INFORMATION Do Not Distribute 50. Market Opportunity The market for the Companys services isLarge and growing market: estimated at $4B - $8B Physician expenditures increasing by 8% + / yr. Office-based RCM Increasing shift to outsourcing (RCM); currently less than 20% of total$0.70 Largest competitor has under 5% of total market $3.30 $4.00 In-House: $4.00 Practice Management Hospital Based MD RCM AHS Target MarketTarget marketsBilling and Practice Management Service Market (Falcon Capital): $8.0BTotal RCM Market (Wallingford Capital/HBMA, 2007): $4.7 B; top 10 billing cos.: $1.0BAHS CONFIDENTIAL INFORMATION Do Not Distribute 51. Financial Performance**EBITDA reflected throughout this report is adjusted to add back capital andacquisition related costs and Investor Group management fees 2009 Revenue and EBITDA growth of 116% and 125% respectively 2010 Revenue and EBITDA growth of 85% and 280% respectively 2011 Revenue and EBITDA growth of 41% and 67% respectivelyAHS CONFIDENTIAL INFORMATION Do Not Distribute 52. Investor Day 2012 Questions & Answers 53. Company OverviewOctober 2012 54. MediaMath: The New Marketing OS Strategy,TechnologyResults Support andTeamVision MediaMath provides the technology to plan, execute, optimizeand analyze marketing programs across all digital channels.Empowering the new marketing professional 55. Industry L...</p>