ITEM 8.01. Other Events

On May 14, 2009, Clarient, Inc. ("Clarient"), then a majority-owned subsidiary of Safeguard Scientifics, Inc. (the "Company"), completed the second closing under that certain Stock Purchase Agreement between Clarient and Oak Investment Partners XII, Limited Partnership. Upon the second closing, the Company's ownership of Clarient's issued and outstanding voting securities, on an as-converted basis, decreased from 50.2% to 47.3%. As a result of such sale of securities by Clarient, the Company deconsolidated its holdings in Clarient as of that date since it no longer holds a controlling financial interest in Clarient. There is no cash flow impact as a result of such deconsolidation.

In the quarter ending June 30, 2009, the Company expects to recognize an unrealized gain in income from continuing operations as a result of the deconsolidation in the amount of approximately $120 million, resulting in a corresponding increase in the Company's shareholders' equity. The entire amount of the gain relates to the remeasurement to fair value of the Company's retained interest in Clarient as of May 14, 2009. The Company has elected to apply the fair-value option to account for its retained interest in Clarient; therefore, unrealized gains and losses on the mark-to-market of its holdings in Clarient will be recognized in income from continuing operations in subsequent periods.