Safeguard Scientifics Inc.'s board unanimously adopted a tax benefits preservation plan to preserve its use of net operating loss carryforwards.

Safeguard intends to submit the plan for shareholder approval at its 2018 annual meeting. As of Dec. 31, 2016, Safeguard and its taxable entities had roughly $230 million of pretax federal loss carryforwards that may be used to offset its future taxable income and reduce its federal income tax liability.

The plan aims to preserve Safeguard's ability to use its loss carryforwards if an ownership change limits it. Under the plan, Safeguard declared a dividend of one preferred stock purchase right for each common share. The dividend is distributable to shareholders of record on March 2.

Any investor acquiring beneficial ownership of 4.99% or more of the company's outstanding common stock without the board's approval will be subject to significant dilution in his economic interest in the company.

Morgan Lewis & Bockius LLP served as Safeguard's legal adviser. Raymond James & Co. Associates Inc. served as financial adviser.