Q2 2020 Safeguard Scientifics Inc Earnings Call
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Good morning, and welcome to safeguard Scientifics second quarter 2020 financial results Conference call. Please note. This event is being recorded if you'd like to ask a question. Please press star one on your telephone keypad withdraw your question pressed upon key I would now like to turn the conference over to Matthew Bernard safeguard genuine Jeff.
Counsel. Please go ahead.
Good morning, and thank you for joining us for this update on paper scientific second quarter 2020 financial results joining me on today's call and webcast, our Robert Rosenthal safeguards executive Chairman of the board, Eric thousands safeguards Chief restructuring Officer, Mark Herman Safeguards Chief Financial Officer.
During today's call, Bob and Eric will provide some corporate strategic updates and Mark will discuss our results afterwards, we'll open the call to your questions.
Today's presentation includes forward looking statements and those 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 monetization of our ownership interest for maximum value or at all and return value to our shareholders. The ongoing support of our existing ownership interest the fact.
Better ownership interest may vary from period to period challenges to achieving liquidity from an ownership interest fluctuations in the market prices of any publicly traded ownership interest.
In addition, our ability to attract and retain qualified employees mark evaluations and sectors in which our ownership interest operate our inability to control our ownership interest our need to manage our assets to avoid registration under the investment company active 1940 and risks associated with ownership interest, including the fact that most of our ownership interest have limited history and history of operating.
Losses faced intense competition and may never be profitable the effective economic conditions in the business sectors in which state one ownership interest operate including the impact of Coven 19, and other uncertainties described in our filings with the SEC.
Many of these factors are beyond the company's ability to predict or control as result of these and other factors the company's past financial performance should not be relied on as an indication of future performance.
During the course of today's call words, such as expect anticipate believe and intend will be used in our discussion of goals or events in the future management cannot provide any assurance that future results will be as described in our forward looking statements.
We encourage you to restate what filings with the SEC, including our form 10-K was described in detail the risks and uncertainties associated with managing our business. The company does not assume any obligation to update any forward looking statements made today with that here's Bob.
Thank you, Matt Good morning, and thank you for joining us today.
The second quarter was a challenging period due to the coded 19, pandemics and the follow on impacts to our economy.
In a few cases, the pandemic has provided a tailwind and has accelerated certain trends, which were underway prior to the outbreak.
Overall, we continue to assess the value and timeframe for our exits.
With the management teams to drive value, regardless of the macro environment.
Safer holds a valuable portfolio of ownership interest in companies operating in exciting sectors of our economy, and we remain dedicated to maximizing ultimate value for our shareholders.
I continue to be encouraged by the direction and activities of many of our ownership interests, which we believe will eventually lead to valuable exit transactions.
Eric and Mark will now review, our recent activities and this quarter's results.
Thanks, Bob.
And thank you all for joining us this morning.
While the current operating environment has been heavily impacted by the pandemic.
We are happy to report that our companies are by and large tracking ahead of hair Cobot 19 plans and in some cases were seeing pockets of strength and even tailwinds. Overall, we are the early stages of recovery, but are substantially more encouraged today than we were when we spoke to you in April.
We'd like to start by reviewing with you five areas we've been focused on since the last earnings call.
The first is making sure our companies have sufficient liquidity to operate in current environment.
The second is working at the board level of our companies to drive operating and financial performance.
Three is helping in management teams position or companies for the most attractive exit opportunities.
Fourth is at the safeguard level driving down our cost to operate in taking steps to ensure we can support our companies.
Shift stays at the shareholder level, providing greater visibility engagement with safeguard investors.
On the company liquidity front, our companies have been able to weather the coated 19 storm reasonably well.
This was achieved through a combination of cost cutting improved working capital management business model alignment.
Access to PPP sponsors and security other sources of capital.
To provide greater detail the majority of our companies our operating cash flow breakeven or our funded with the expectations that they will get to cash flow breakeven.
The remaining companies are exploring capital raises at different stages.
Three of our companies are currently in the term sheet phase that may involve participation by safeguard.
We are evaluating these opportunities and if we do participate in these financings. We expect total investments in 2020 to fall within the guidance range. We previously provided.
Our second area of focus has been supporting our companies.
As you know we take an active role with our companies and we have spent considerable time over the past few months with our management teams in co investors.
We in day has had to make hard decisions decisions that test and leadership and capabilities with management at all levels head count reductions furloughs product and market alignment capital allocation decisions on credit extension to customers pushing to collect accounts receivables early personnel issues and others.
These are required thoughtful consideration and deliberation at the board level.
As mentioned at the outset, we're pleased with how the teams have performed and are looking forward to shifting our attention from managing crisis to focusing on growth.
The third area I'd like to touch on his exits.
We are working to exit our company's at share values, which we will just which will drive shareholder returns and will allow us to return value to safeguard shareholders.
There are two basic ways to exit one is what we call a natural exit in the second in secondary exit and natural exit is when the company has sold through a banker process. When you sell along in the deal a secondary exit is when we sell our minority stake to a third party, but theres no control premium and there's usually an embedded discount.
In the transaction.
While natural exits generally provide greater values and secondary sales. We are open to exploring secondary deals as long as we can get reasonable value as compared to what we believe we can achieve in our natural exit factoring in time and risk.
We had conversations with a couple of secondary buyers in Q2, but you don't find their indicative interest levels attractive versus what we expect to get in a natural sale over a reasonable timeframe.
We had no exits in Q2, but we currently have one company under LOI with a PE buyer and another company about to launch a process after a robust banker selection.
We cannot provide further info on todays call about these two situations, but we'll look to update you next quarter on progress.
We are cautiously optimistic on both of these processes, but deal risks obviously remain in these risks are magnified in the current M&A environment.
The fourth area is safe guards costs in our capital that we have to support our companies.
We continue to focus on bringing our cost to operate down and we've made a lot of progress on this front.
We're currently running at mid $5 million year to operate with corporate expenses down 36% year on year.
We're not done and continue to look at both internal and third party costs Mark will provide more detail in his section.
On the capital front, we believe we currently have sufficient funds to operate and support the expected needs of our companies over the next 12 months.
We expect sales of our companies will fund needs beyond that period.
Given the uncertainty of exit timing, we will prudently explore contingency plans to ensure we have sufficient liquidity to meet our needs as necessary.
On our shareholder engagement, we remain committed to improve the level of engagement and transparency with our investors as well as providing better exposure in insight into our companies.
We held our first fireside chat with Gen. Bruce's equilibrium in July Thirtyth and the replay is on our website. If you haven't listen to it we would get a highly recommend you do so.
This was the first in a series of Fireside chats that we're launching where you can meet the CEO and you can ask questions via the.
Soon within our.
Beyond that please feel free to reach out to Bob Mark coordinate with question your suggestions.
I'd like to provide some detail on our companies and provide some company highlights.
We've selected five companies that are among the top 10 and expected exit values to be clear. These are not necessarily the top five positions in exit value, but they are a mine.
The top 10, so they're meaningful for us and we thought they'd be meaningful for you to learn more about them.
To walk you through them briefly.
We looked at these in four different categories will provide a very quick business subscription what we like about the opportunity.
The impact of Cobot 19 on the business and some Q2 highlights that we can that we can cite publicly.
And just to run through these companies will talk about equilibrium prognosis hypnosis clutch and flash talking.
You heard about me equilibrium on our radar so I won't go into too much detail, but re mequilibrium salt halston, our revenue bucket of $5 million to $10 million SaaS talent development solution.
Using predictive analytics to support.
Resilient engaging agile workforce.
There are customers a fortune 500 seen smbs.
When we like the opportunity because they are well positioned in the growing HR tech in human capital management space.
The impact of Tobin 19 on their business has been mixed the positives theres been some accelerated demand for talent development and employee engagement solutions, particularly among disrupted workforces.
In terms of highlights had very strong Q2 bookings.
With activity across renewals and new logos.
Company also closed a $4 million series C Fund extension funding.
The next comes companies Prognosed Prognosed falls in our 15 to 20 million dollar revenue bucket.
The company takes clinical and diagnostic data and analyze this information for pharma companies and payers to better tracking predict disease activity.
We like the company because there are a leader in this emerging area of drawing insights from clinical and diagnostic test data.
Covance had a mixed the positive impact on prognosis.
The sales process has been disrupted in terms of their ability to meet with and pharma sales teams.
There has been increased interest in their digital marketing offerings.
Some highlights over the quarter is a launch day prognosis factor platform, a new analytics platform for pharma customers and the announced a partnership with will have on growth to leverage prognosis lab data capabilities.
The next companies if notices Sip knows this falls in the $5 million to $10 million revenue bucket.
It's a doses of white is a white labeled virtual care platform offerings patients convenient access to care, while improving clinical clinician efficiency.
We like the opportunity because there are obviously in a growing tele health space and they enable health systems to improve the patient experience in decreased decreased time to treatment decisions.
The impact of carbon 19 has been a positive is greatly expanded interest in tele medicine in the use of virtual care solutions.
Some Q2 highlights or that they recorded their highest number of virtual visits in company history.
And if not just launched as it checked product, which is an end to end returned to work solution for employees could test Tobin 19.
The next company that will highlight is plush clutch falls in the $10 million to $15 million revenue bucket and clutches a data driven marketing customer relationship management platform, focusing on loyalty gifts and channel marketing to marketers.
The point, where we like about is the platform provides deep insights into customer behaviors and they have a industry leading products.
Cobot 19 has had a negative impact on crotch because many of their customers are in the retail travel in hospital hospitality sector, which is obviously in.
Different levels of disruption.
The company is doing good job to pivot to other sectors and they are seeing growth and development with our channel partners.
In Q2 the method covered.
19 plan that one two new strategic accounts and they have achieved Soc to compliance and completed a new release of the platform.
The last company I'll touch on his flash talking last stocking is the above 20 million dollar revenue bucket.
They are an independent AD serving identity management analytics platform, but they do is a drive add relevance in campaign performance for major brands.
We'd like the opportunity because it's a large and growing addressable market. It has strong ROI and they've been growing market share.
October 19 has had a mixed impact on your business. They have some exposure to retail travel and hospitality, but they have other they also have exposure to other sectors, which are.
More resilient through the pandemic.
They successfully rolled out the first or 14 countries for Procter and Gamble large new customer and as part of that rollout a success successfully launch and based trafficking integration with the trade desk and.
In a division of Oracle.
After curve a dip in April and May the company has returned to year on year over year revenue growth in June.
So we hope this helps frame our thinking on on some of the company's what we plan to do is next quarter. We will review the other five companies, which sit within the top 10 and estimated exit values to provide you some greater insight into how we're thinking about the companies and.
And what.
What we like about these opportunities as well as how they're performing in the current quarter or in this case will be chips in Q3 highlights.
With that I'd like to turn the call over to Mark.
Okay. Thank here.
For the quarter in mid June Thirtyth 2000, turning safeguards net loss was 9.9 million or 48 cents per share.
Paired with a net income of 36.1 million or $1.75 per share for the same period of 2019.
Safeguards cash cash equivalents restricted cash at June Thirtyth totaled 13.6 million and we have no debt obligations.
Our funding to existing orders of interest continued this quarter, including $3.8 million, because Diana which resulted in 404 million during the year to date period. So we decided after considering bridge or.
During the first quarter.
We made two other small performance during the quarter and we continue to expect that the permits for the full year of 2020, we will be between $8 million to $12 million.
However, we expect evaluate deployment activity for only three to four company for the remainder of the year due to the circumstances Eric described earlier.
The quarter's results also included impairment there five for $7 million related to the lowering of our estimate of fair value for our ownership interest in Sonobi T. Rex beta and other ownership interest.
These declines in fair value were impacted by our outlook for transaction values as well as other company specific factors.
Our general and administrative expenses were $2 million for the three months ended June Thirtyth 2020, as compared to 2.6 million in the second quarter of 2019.
Our junaid expenses benefited from lower employee compensation lower professional fees lower office rental costs, lower depreciation and other costs.
Corporate expenses for the second quarter, which represent general and administrative expenses, excluding depreciation stock based compensation severance and retirement costs and other nonrecurring or other items were 1.2 million as compared to 1.9 million in 2019.
In addition to the DNA reductions mentioned above.
Corporate expenses benefited from the reflection on our director fees as a stock based compensation item as well as Expiries that will result in a portion of managements estimated incentive bonus compensation.
I'm going to be paid invested equity instead of cash.
Note that we made this change in the second quarter, but it will be applicable for the year to date period, so approximately $41 million over the decline is attributable to this catch up for the first quarters portion.
As we've mentioned before we will continue to look for ways to reduce our cost structure.
I'm of the steps that we are making now or plan to make a relatively small but we understand every step counts. So as an example, we are continuing to speak.
To minimize our office related costs as we've been able to effectively work remotely over the last year.
As a result, we expect that our corporate expenses for the full year 2020 will be at the low end or below our previously disclosed range of 5.6 to 6 million.
Million dollars as compared to $7.1 million reported for the full year 2019.
With respect to ownership interest that Thirtyth 2014.
We have an aggregate carrying value of $61.4 million.
As we've discussed before this is a GAAP carrying value.
Which results from the application of equity method accounting that typically reduces the fair value for our share of the losses of the underlying company is generally does not represent the fair value or expected negative value of those same ownership interest.
Earlier in the fair value declines.
Below our carrying value when we consider making a downward adjustment to the carrying value or equity method investments.
We also have a few ownership interest that are accounted for under the other method, which can have an upward or downward adjustments, resulting from observable price changes if there are transactions in their securities.
Our share of the losses of our equity method ownership interest for the three months ended June Thirtyth 2020 was $3.1 million as compared to 8.3 million for the comparable period in 2017.
The decrease as a result or fewer companies being accounted for under the equity method due to exit changes in the basis of accounting and companies that new for the equity method to the other methods as well as lower losses on that basis from our equity method ownership interest.
There's also a benefit recorded resulting from a technical accounting change the new revenue recognition standard at one of our ownership interest.
It's been a bit essentially offset in the cumulative effect of that same accounting change.
I would also required to be recorded directly to one of our initial purchase cylinders accounting change resulted in an income statement benefit for the quarter. There was not a sense significant accumulative impact Kurdish debentures balance as of the ended the quarter.
I would also like to remind everyone that that we report our share of the losses from the equity record companies for anyone quarter lag.
For this quarter share the losses reflect the calendar.
First quarter for those companies.
For many companies.
Some impact recovered nicely in the first quarter their results in the second quarter War rooms will reflect the full quarter of operating in this environment.
Which we will report to you as part of our third quarter results due to the one quarter lag.
So now it is the current first turn to the cure day segment of the car or operator. Please open the floor is up.
I know you've already done.
We're going after a few questions.
It seems like ask a question. Please press Star then the number one key on your telephone keypad, if you'd like to which are your question press. The pound key. Please ensure you were not on speaker phone. When you are coming up for questions. We will pause for just a moment take us how the culinary roster.
First question comes from Michael Potter with monarch capital.
Hey, guys.
Congratulations on a continuing to move this company forward.
Just quick question the meat Colibri Hum presentation that we have the fireside chat Eric what are the plans for.
Additional presentations do you have the next company lined up already and it was something that we can.
Perhaps.
Get scheduled for this month or early next month.
Yes, Hey, Michael.
It is definitely a priority of ours, we're talking to management teams to see which companies. Both are at the right stage to talk to the public and which Ceos or.
We'll build it and so we'll we'll get back to I would say within the next week.
Okay, we will endeavor to make an announcement on on who that company will be and you look to do this on our on a regular basis.
Obviously respecting the time.
Challenges at the management team South.
And just a follow up on that.
Prior to your joining the company one of the questions that I propose was.
A lot of our portfolio companies have news flow of their own, especially with no service.
During this time period is there any way that this can.
But we can make releases or is that our portfolio companies are issuing news and that have events on on their own.
So weve tied in the press releases for our portfolio companies to both auto most cases auto populate.
On our Investor Relations section in some cases, we have to do it manually.
So thats a process that we started a couple months ago, we obviously can't control the timing of the press release of the of our portfolio companies, but it should be the case that if theres a press release at the.
Partner company level.
Then it should show up at our I'm on our Investor site that is not happening as something we'll make sure is happening we implemented in the last four weeks or so I definitely have seen it in a few cases, if you go to the our Investor relations side, but we think thats helpful.
We do think Thats helpful. There's probably a step beyond that.
Which could be webinars in white papers that are.
Partner companies post having those pulled into our our website would be maybe a next stage for us to to explore put on the press release side, where we've been working on that and that should be.
Operating if not at 100% pretty close to it.
Okay.
Thanks, I'll get back in Q.
Once again, if you would like to ask a question. Please press Star then the number one on your telephone keypad. Once again that is star one to ask a question.
No question from Brian towns. Please state your company your line is open.
Hi, My name is Bruce Count secure partners from.
Hey doing today.
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No.
Yeah.
Yes.
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Okay.
Thanks, Bruce for how we're now that we're having some trouble hearing.
And our.
Thank you just got a little muscle there.
And he has disconnected once again, if you would like to ask a question. Please press star one on your telephone keypad. Once again I don't start wanted to ask a question and then the question from these moment. Please go ahead.
Could you give us a little color.
Media came out with the statement.
They're looking to reorganize or possibly so.
Could you give us a little color on that value and what's going on there.
Thanks, just short yes so.
It wasn't a press release from media math it was picked up I think by an industry.
By the industry.
News.
Excuse outlet, but regardless I'll give you an medium alpha update obviously.
So what's happening on the outstanding the beyond your question to just that would be helpful.
So.
Obviously at the AD spend market asset markets are for certain major step down.
In the March April timeframe.
Media Matthijs experience or recovery in the ad spend.
Actually we were pleased to see that their daily spend has returned.
To pre cobot 19 levels.
And they're seeing particular strengths in certain geographies outside the U.S.
Also there.
The connected TV product that their launch which is doing very well ahead of plan.
So thats on the positive side they've also.
Took some steps in the middle of the.
Pandemic around cost alignment.
And in really.
Setting their company after achieved better operating leverage as the company comes out of when the entire sector comes out of the pandemic, what we've been working with the company on is ensuring that it has the right capital structure.
To.
To leverage the opportunity that has that number two second largest demand side platform out there.
So we're working on the hospital so to put it in finance World. The left side of the balance sheet companies doing quite well as I said.
Recovering AD spend products are working.
Seeing strength as the overall AD tech market is is improving bright side of the balance sheet. We're working on making sure that have the right capital structure in place to be able to take.
Take advantage of that obviously when you look at.
All options on capital structure, sometimes.
News outlets pick that up and report other things, but the main focus is ensuring that their capital structure is stable and sufficient to support the growth of the company as it emerges from.
From Ian.
Q2 and into whats appears to be we're starting to be a strong Q3.
Thank you.
Once again, if you would like to ask a question. Please press star one on your telephone keypad once again out of star one to ask a question.
Yes in front of participants please state your name and company. Your line is open.
President Please state your name your line is now open.
Bruce Challenge.
Tony.
Hello.
Second that a little better.
Typically.
Softened dedicate the we have power.
So I guess a couple of questions.
First regarding the cash balance it failed thirteensix.
And if we estimate.
Moving of expenses than before me, if I want that leads us a little.
As far as having enough cash.
So with that the letter of intent Benson.
Yes.
And the expectation it went back.
Yes.
While overcoming that if other sources or are we do have if it pull through.
Also on food in the past.
Okay, I think I got the just a question Bruce I Hope you can hear us so as we indicated.
We have two companies that are under under LOI.
And.
While there is obviously deal risk.
We have 13 plus million dollars at the end of the quarter.
And our expectation is that the exits.
But our planned plus other.
Cost containment measures that were taking at the safer front.
I will fund the company for the next 12 months.
We don't know specific.
Obviously, estimating when deals close or difficult, but we are optimistic we're cautiously optimistic of both of these processes.
But.
We of course need to take contingency plans in the explore other alternatives to make sure that we're not in a position where we can't support.
Our our or companies as appropriate.
So the or if that's helpful.
That's helpful.
I think we.
With more money into finance.
And one thing, though that we.
No we increased our investor by three that portfolio.
Okay.
Alan permitting 19.6 from the prior quarter.
Hello.
Im assuming that we're not having the company in Europe.
You know manifesting, we're participating as much as possible.
African that have over how can you explain that.
Yes, I can address that for Britain and for those of you. The amaze Adenhart term here in the question. Your question was around high App and the fact that we have made.
An additional investment.
This quarter in Syapse and about how that investment performance relates to the change in our ownership percentage.
And I'd say the round was essentially an insider led round.
So the big proportions of orders have been tourism, particularly ours did not change substantially I know from time to time there also.
Yeah option grants at the lower at the employee level, which may think change slightly the ownership percentages.
But there, but yes, I would I wouldn't I guess I would characterize the ownership percentage changes as not substantial in that case.
Yeah.
And.
It was just.
And again.
They're sort of step forward for the company right.
Okay, and I guess my last question.
No. We look at remember these ticket revenue figures when they are part of the company I believe it somewhere around $50 million.
And.
As we on an average order of about 25 to 10 of our company or something like that.
Both the bull are.
Where are these current trading usually young companies Villa companies.
And for parts are firming up that impact revenue from situation.
Great and off our valuation.
Based on multiple of revenues based on our CFO will be able to market.
Is there anything any comment on walk away from.
Hi.
Yes, let me, let me and air delivered exceptional, especially as well, but they're going to just start for disease, who may have had a hard time hearing group grew for the connection is not great but.
But the your question is around.
Transaction multiples for companies within our portfolio.
Thank you referenced that revenue multiples can be.
6789 10 times.
Revenue.
Is that if I'd characterize it correctly.
Thats correct.
Okay.
And I would say and then there we have a much wider variety of revenue multiples that are there that are possible. So and then some in each one of our company has their own specific.
Next is that later.
I am particularly there.
In some of them are just not as high as let's use just described I think the digital media space in particular has had.
Yes, the multiples in that area have come down and that's something that we state.
So they are there a lot of company specific factors that ability to how we would.
Think about the value of anyone of those individual company.
Yes, let me try to provide a a perspective on this.
A couple of different levels I think what you might be getting at is.
If the underlying companies are in.
Attractive sectors growing and the public comps have high multiples bought wire.
How does that what's the read through to two safeguard stock what's the read through to two our value and maybe I can give you just to kind of a perspective from an investment standpoint. So.
Okay.
One of the reasons why I think.
I find safeguard attractive in just to.
Try to address it from that standpoint is that as we talked about.
Through safeguard you have exposure to a basket of late stage venture companies in two sectors, primarily of tech enabled healthcare and you have AD tech.
So.
You're playing on the tech enabled healthcare side between Syapse prognosis, Tom Oxys hypnosis in equilibrium, that's $86 million invested capital so thats over $4 per share.
The tech enabled healthcare as a space.
As we've spoken about.
In prior conversations Theres a secular tailwind.
As the healthcare industry is being transformed using technology, reducing costs. These companies are well positioned in a post totaled 19 worlds.
And they're experiencing strong revenue growth in healthy strategic and financial M&A activity.
You know.
Obviously, you can take a look at the.
The.
The announcements this past week, we have the Teladoc avago deal everyone wants to cite that that was in the high teens, maybe were 17 to 18 times 2021 revenue type multiple in the stock for stop deal deal made a lot of strategic sense between those two companies, but if you just macro up at another level.
Tech enabled health care at the peer set that we look at trades at eight times 2020 revenues.
So that sectors of call it they have outliers.
Teladoc might be an outlier the transaction, but call. It eight times revenue multiple so for US we look at safeguard stocking, we're saying Theres four bucks a share of cost of check enabled health care that the public markets appears in the public markets.
Our trading at eight eight times Thats kind of on one side.
On the other side is obviously we have.
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AD Tech Martech bucket, which if you take flash talking Mediamath clutch just those three it's two and a half dollars per share of cost.
Now the AD Tech space.
Has a cyclical element to this cyclical recovery in top of the secular tailwinds secular tailwind is obviously moving to digital.
Digital spend digital programmatic linear TV adoption et cetera.
And the AD tech market is going through a recovery process.
There's no cobot 19 tailwind per se and AD Tech Theres, a secular transition to digital programmatic linear TV et cetera.
That bucket, if you will have our investments they don't trade in the public markets that Mark said as at high multiples.
Yes, there is.
Trade desk, which is trades at 31 times revenues or 24 times forward revenues.
But there's also the by by and large that sector. The median.
It is roughly call it.
Two times for clutch comps in four times for Flash stockings comps so you're in a much different revenue multiple it's still an interesting sector. It's still something we're quite excited about so when you look at two together, there's six and a half box of past.
And two sectors of which are both interesting both have different dynamics and through owning through at least why im taking over half of my pump things safeguard stock. So on the and why I bought stock safeguard is a way to have exposure to that now is every one of our partner companies every.
One of our portfolio companies.
As good as.
Teladoc or trade desk or something is trading at 15 or 20 times, we're not going that far in saying.
But we do think it provides access and exposure through an interesting portfolio of companies.
You know growth companies that were working and we are providing as much insight as we can to you and we believe that if we can execute and we can help driving that drive value at the partner company level and the and the in these companies can achieve exits and the reasonable timeframe and at reasonable multiples for not saying.
That these companies has to be along though or trade desk for this to be interesting for us.
The stock and everything else will take care of itself and value will be created for for the safeguard shareholders. So I know versus a little long winded, but I think I just wanted to frame at least how.
We're thinking about the opportunity it safeguard and how when you double click on safeguard stock you get two buckets and each bucket. One is tech enabled healthcare the other is pretty much AD tech and they and within that.
Those companies each out there.
They are dynamics, so I'll stop there and see if that's helpful.
Alright, thank you.
Once again, if you'd like to ask a question. Please press star and the number one on your telephone keypad, ladies and share your on on Speakerphone, when Youre coming up for questions. Once again I'd start wanted to ask a question.
And we do not have any telephone questions at this time.
Okay. Thank you operator.
I'd like to express my appreciation for all those who joined US today and those who will eventually listen on the recording.
In summary, while the second quarter was challenging for us in our companies and resulted in delayed delaying expected transactions within our portfolio.
Sure you that we remain committed to encouraging our ownership interest towards monetization and return value.
We realize that it's frustrating to see no exit activity this quarter, but we assure you that we're pressing to accelerate these events.
Thanks for joining us today and thank you for your continued interest and confidence as well as your support.
This concludes today's conference call you may now disconnect.
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