Subject: Possession; or, not.....

[Rog]

One out
R1
Batter hits grounder at 2nd base
SS takes the play and while he has his foot on the base uses his glove to scoop the ball up and flip it up and out of the glove at the same time to his throwing hand; but, does not catch the ball and it drops to the ground.
SS picks up the ball and throws to 1st for that out.

SS claims he dropped the ball during the transfer.
Umpire said that SS never had possession of the ball.

Would you call a "Safe"; or, "OUT" at 2nd on the first part of this possible double play???