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| Statement |
|---|
| We are excited about this path as it reflects our commitment to maximizing value for shareholders and returning cash in a timely manner |
| And this quarter, both Clutch and Syapse also showed improved revenue growth for this trailing 12-month period |
| We continue to see consistent strong growth from Moxe and meQuilibrium |
| It closed 10 new logos in the quarter and it began beta-testing embedded AI tools with select customers, allowing the customers the ability to generate content and improve their product and engagement recommendations |
| It signed another -- with a top five electronic medical health record vendor, spanning its network coverage, and its bidirectional convergence product is gaining traction in the market with two leading health care providers using it |
| The company exceeded its budgeted revenue and EBITDA targets for the first half and it was operating cash flow positive in Q2 |
| Redefine Bucket 1 companies as those that are well-capitalized, executing on their business plans, while navigating their share of risks and opportunities, which is typical of VC-backed companies at this size and stage |
| meQuilibrium posted first half 2023 revenue growth of over 20% year-on-year |
| So, that’s good -- that we're planning for |
| Assuming it takes the next two years to exit the remaining portfolio of companies, this would amount to $3 million in total savings, which represents a sizable benefit to Safeguard shareholders |
| Moxe posted first half 2023 revenue growth of 20% year-on-year |
| Having said that, there are signs of stabilization as evidenced by the fact that median valuations for most VC stage companies ticked up in Q2, and anecdotally, we are seeing some improvement in the overall M&A market |
| In terms of revenue performance, we reported an 11.7% increase at this group of six companies for the trailing 12-month period ended March 31st, 2023 due to the one quarter lag |
| Over the past few years, we have worked diligently to reduce our corporate expenses |
| Clutch posted first half 2022 -- excuse me, first half 2023 revenue growth of 35% year-on-year |
| While other strategic transactions could still be considered, we are now working diligently on a plan to return excess cash to our shareholders, materially reduce our operating costs, and exit the assets over the next two years |
| Prognos exceeded its revenue and EBITDA plan for the first half of 2023 |
| By delisting from NASDAQ and becoming a nonreporting company, we expect we can reduce our annual cash corporate expenses by up to 50% or $1.5 million |
| Second, to substantially reduce our ongoing operating costs, safeguard is exploring delisting from NASDAQ in becoming a non-reporting [Technical Difficulty] company |
| The declines in corporate expenses were across a variety of expenses, but included lower employee costs, related taxes, and professional fees |
| Thanks and have a good evening. |
| Thanks |
| Eric Salzman Thank you |
| Statement |
|---|
| The expected outcomes for Bucket 2 companies are disappointing and results from any number of the following factors; an inability to attract additional equity capital due to business model, financial profile, or risk appetite in the current market; too high debt load and an inability to refinance the debt in the current market; the company's path to breakeven is too distant to attract capital in the current environment |
| This is driven by a weak IPO market, reduced risk appetite from VCs, higher debt costs, and a pullback in investing by non-traditional investors |
| On a macro level, the late-stage VC market continues to experience headwinds amid a challenging financing and public exit environment |
| Unfortunately, the outcomes of these processes have been disappointing and to-date, none of these M&A efforts have resulted in transactions |
| This quarter's activity was limited to the $3 million deployment to Prognos that increased our carrying value and the application of the equity method of accounting, which reduced our carrying value based on our share of the losses of our companies |
| After spending considerable time and effort, we could not reach an agreement on deal terms due in part to valuation, tax, and structural elements that were critical for us to do the -- we also explored alternative structures with this counterparty, but were unable to reach agreement on a deal |
| The year-over-year decline was 12.2% |
| So, this quarter's share of losses reflect the first quarter of 2023 |
| The year-to-date period ended June 30th, 2023, was a net loss of $6.3 million or $0.39 per share as compared to $6.2 million or $0.38 per share for 2022 |
| So, after considering their equity raise, there continue to be a decrease in the group's cash, primarily related to the quarterly burn at three companies |
| Safeguard's net loss for the quarter ended June 30th, 2023 was $2.9 million or $0.18 per share as compared to net income for the comparable 2022 second quarter at $0.5 million or $0.03 a share |
| However, at this time, we do not believe there is room to cut this much further |
| Reliance on forward-looking statements involve certain risks and uncertainties, including, but not limited to, the uncertainty of the outcomes of corporate strategic transactions, if any; the uncertainty of the future performance of our companies; our ability to make good decisions about the monetization of our companies; the ongoing support of our companies; our inability to adequately control our companies; fluctuations in the market prices of any of our companies that are publicly traded; and the effect of regulatory and economic conditions generally; and other uncertainties described in our filings with the SEC |
| We also recorded a $0.2 million impairment this quarter related to one of our remaining other ownership ventures |
| Many of these factors are beyond our ability to predict or control |
| I would also like to remind everyone that we report our share losses on the equity method company is on a one quarter lag |
| Our reported share of the losses of our equity method ownership interest for the 3 months ended June 30th, 2023, was $2.8 million as compared to $3.9 million for the comparable period in 2022 |
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