Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 14, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | FINJAN HOLDINGS, INC. | ||
Trading Symbol | FNJN | ||
Entity Central Index Key | 1,366,340 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 22,714,598 | ||
Entity Public Float | $ 51,545,041 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 6,101 | $ 17,505 |
Accounts receivable, net | 0 | 2,016 |
Prepaid expenses and other current assets | 322 | 112 |
Total current assets | 6,423 | 19,633 |
Property and equipment, net | 257 | 66 |
Investments | 2,195 | 1,000 |
Non-current assets | 325 | 0 |
Total Assets | 9,200 | 20,699 |
Current Liabilities: | ||
Accounts payable | 2,220 | 1,675 |
Accounts payable - related parties | 17 | 100 |
Accrued expenses | 450 | 800 |
Accrued income taxes | 9 | 0 |
Other liabilities - current | 32 | 0 |
Total current liabilities | 2,728 | 2,575 |
Other liabilities - long-term | 130 | 0 |
Total Liabilities | $ 2,858 | $ 2,575 |
Commitments and contingencies | ||
Stockholders’ Equity | ||
Preferred stock - $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2015 and 2014 | $ 0 | $ 0 |
Common stock - $0.0001 par value; 80,000,000 shares authorized; 22,640,611 and 22,448,098 shares issued and outstanding at December 31, 2015 and 2014 | 2 | 2 |
Additional paid-in capital | 23,946 | 23,126 |
Accumulated deficit | (17,606) | (5,004) |
Total Stockholders’ Equity | 6,342 | 18,124 |
Total Liabilities and Stockholders’ Equity | $ 9,200 | $ 20,699 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 22,640,611 | 22,448,098 |
Common stock, shares outstanding | 22,640,611 | 22,448,098 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
Revenues | $ 4,687 | $ 4,998 |
Cost of revenues | 814 | 800 |
Gross profit | 3,873 | 4,198 |
Operating Expenses: | ||
Selling, general and administrative | 17,362 | 13,813 |
Research and development | 391 | 0 |
Total operating expenses | 17,753 | 13,813 |
Loss from operations | (13,880) | (9,615) |
Other Income | ||
Gain on settlements, net of legal costs | 0 | 1,000 |
Return on Investment | 1,271 | 0 |
Interest income | 12 | 90 |
Total other income | 1,283 | 1,090 |
Loss from continuing operations before provision for income taxes | (12,597) | (8,525) |
Income tax provision | 5 | 5 |
Loss from continuing operations | (12,602) | (8,530) |
Discontinued Operations: | ||
Loss from discontinued operations net of tax | 0 | (323) |
Loss on disposal of Converted Organics net of tax | 0 | (1,626) |
Net Loss from discontinued operations | 0 | (1,949) |
Net Loss | $ (12,602) | $ (10,479) |
Net Loss per share from continuing operations (in dollars per share) | $ (0.56) | $ (0.38) |
Net Loss per share from Discontinued Operations: | ||
Net Loss per share from discontinued operations (in dollars per share) | 0 | (0.02) |
Net loss per share from disposal of Converted Organics (in dollars per share) | 0 | (0.07) |
Net Loss per share from discontinued operations - basic and diluted (in dollars per share) | 0 | (0.09) |
Net Loss Per Share: | ||
Basic and Diluted (in dollars per share) | $ (0.56) | $ (0.47) |
Weighted Average Number of Common Shares Outstanding: | ||
Basic and Diluted (in shares) | 22,548,932 | 22,403,601 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, beginning amount at Dec. 31, 2013 | $ 27,023 | $ 2 | $ 21,546 | $ 5,475 |
Balance, beginning shares at Dec. 31, 2013 | 22,368,453 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock based compensation expense | 1,448 | 1,448 | ||
Proceeds from Exercise of stock options | 132 | 132 | ||
Proceeds from Exercise of stock options, shares | 79,645 | |||
Net loss | (10,479) | (10,479) | ||
Balance, ending amount at Dec. 31, 2014 | $ 18,124 | $ 2 | 23,126 | (5,004) |
Balance, ending shares at Dec. 31, 2014 | 22,448,098 | 22,448,098 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock based compensation expense | $ 766 | 766 | ||
Proceeds from Exercise of stock options | 54 | 54 | ||
Proceeds from Exercise of stock options, shares | 192,513 | |||
Net loss | (12,602) | (12,602) | ||
Balance, ending amount at Dec. 31, 2015 | $ 6,342 | $ 2 | $ 23,946 | $ (17,606) |
Balance, ending shares at Dec. 31, 2015 | 22,640,611 | 22,640,611 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows From Operating Activities | ||
Net loss | $ (12,602) | $ (10,479) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Loss on sale of subsidiary | 0 | 1,626 |
Return on investment | (1,271) | 0 |
Depreciation | 50 | 14 |
Loss on disposal of assets | 34 | 0 |
Stock-based compensation expense | 766 | 1,448 |
Deferred tax liability related to discontinued operations | 0 | (39) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,016 | (2,003) |
Prepaid expenses and other current assets | (210) | (13) |
Other non-current assets | (325) | 0 |
Accrued expenses | (350) | 518 |
Accounts payable | 545 | 1,259 |
Accounts payable - related parties | (83) | 85 |
Accrued income taxes | 9 | (4) |
Other liabilities | 162 | 0 |
Net assets related to discontinued operations | 0 | 227 |
Net Cash Provided by discontinued operations | 0 | 1,814 |
Net Cash Provided by continuing activities | 0 | 1,304 |
Net Cash Used in Operating Activities | (11,259) | (7,361) |
Cash Flows From Investing Activities | ||
Purchases of additional investment | (750) | (500) |
Proceeds from investment | 826 | 0 |
Purchase of property and equipment | (275) | (21) |
Proceeds from sale of Converted Organics | 0 | 675 |
Net Cash (used in) Provided by Investing Activities | (199) | 154 |
Cash Flows From Financing Activities | ||
Proceeds from exercise of stock options | 54 | 132 |
Net Cash Provided by Financing Activities | 54 | 132 |
Net Decrease in Cash and Cash Equivalents | (11,404) | (7,075) |
Cash and Cash Equivalents - Beginning | 17,505 | 24,580 |
Cash and Cash Equivalents - Ending | 6,101 | 17,505 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid during the year for income taxes | 7 | 25,331 |
Non-cash investing and financing activities: | ||
Distribution of investment held by investee | $ 445 | $ 0 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization and Operations | ORGANIZATION AND OPERATIONS ORGANIZATION Finjan Holdings, Inc. (the “Company” or “Finjan Holdings”), a Delaware corporation (formerly Converted Organics, Inc.), operates a cybersecurity business focused in four business lines: intellectual property licensing and enforcement, advisory services, mobile security application development and investing in cybersecurity technologies and intellectual property. Revenues and operations from the Company’s CybeRisk advisory services and the Company’s Finjan Mobile security business were immaterial for the year ended December 31, 2015. Licensing and enforcement of the Company's cybersecurity patent portfolio is operated, through its wholly-owned subsidiary Finjan, Inc. ("Finjan"). Finjan became a wholly owned subsidiary of Finjan Holdings in June of 2013 after a merger transaction, following which the Company began trading on the OTC Markets. The Company’s common stock has been trading on the NASDAQ Capital Market ("NASDAQ") since May 2014. Finjan was founded in 1997 as a wholly-owned subsidiary of Finjan Software Ltd. (“FSL”). FSL, together with its subsidiaries, sold enterprise web security solutions, including real-time and behavior-based malware prevention. In October 2003, FSL transferred all of its shares in Finjan to Finjan Software, Inc. (“FSI”). As a result of this transfer, Finjan became a wholly-owned subsidiary of FSI (the “Former Parent”). On December 8, 2010, Finjan, Inc. changed its name to FI Delaware, Inc. On October 22, 2012, FI Delaware, Inc. changed its name back to Finjan, Inc. In October 2009, FSI transferred its portfolio of intellectual property to Finjan (its wholly-owned subsidiary at the time). Thereafter, in November 2009, FSI sold certain assets, including certain of its operating subsidiaries, not including Finjan, and its sales and marketing assets to M86 Security (“M86”). Finjan also granted a fully-paid, non-exclusive patent license to M86, in consideration for which M86 issued shares of its common stock to Finjan and FSI. In connection with that transaction, and subsequent to November 2009, FSI and its remaining subsidiaries (including Finjan) ceased the development, manufacture, marketing and sale of its products, as well as research conducted through its Malicious Code Research Center as part of a confidential non-compete provision. Finjan retained ownership of its patents and all related rights. In March 2012, M86 merged with Trustwave Holdings, Inc. (“Trustwave”) through which M86’s license from Finjan was renewed with Trustwave to include an expanded scope and an extension of the non-compete for the development of software and hardware security products. In September 2015, Trustwave was acquired by Singapore Telecom (“SingTel”). Finjan’s agreement with Trustwave includes extended royalty obligations upon achievement of certain sales milestones. To date, Finjan has have not received any additional payments under the license. In February 2013, Finjan distributed all securities it held in two unaffiliated entities to FSI, and made a payment of cash in an amount sufficient to repay and satisfy in full a pre-existing intercompany loan from FSI to Finjan. Following that distribution, the board of directors and stockholders of FSI approved the dissolution of, and a plan of liquidation for, FSI that resulted, among other things, in the distribution of Finjan's common stock to certain of FSI’s stockholders, whereby Finjan ceased to be a subsidiary of the Former Parent. DISCONTINUED OPERATIONS On December 4, 2014, the Company sold all its membership interest in Converted Organics, a wholly-owned subsidiary through which the Company operated its organic fertilizer business, to Converted Organics, LLC (the “CO Purchaser”). The sale was effected pursuant to a Membership Interest Purchase Agreement (the "Purchase Agreement"), dated December 4, 2014. In accordance with the Purchase Agreement, at the closing, the CO Purchaser paid the Company $675,000 in cash. As a result of the sale of Converted Organics, the Company no longer operates an organic fertilizer business. The Company continues to operate its cybersecurity business. The acting manager of Converted Organics prior to the sale owns a minority interest in the CO Purchaser. Except for the Company's previous relationship with the acting manager, none of the Company, its officers, directors or affiliates has any relationship with the CO Purchaser, and the amount of consideration paid to the Company in connection with the transaction was determined by arms-length negotiations between the Company and the CO Purchaser, and not pursuant to any specific formula or principle. The Company reclassified the operations applicable for Converted Organics to discontinued operations for all periods presented. The transaction resulted in a pre-tax and after tax loss of $1.6 million on the disposal of Converted Organics in the last quarter of 2014, which was included in loss from discontinued operations. The Company's board of directors approved the sale of, and the Company sold, its subsidiary Converted Organics on December 4, 2014. Results from the sale have been reported as discontinued operations because the Company has taken a strategic shift to move forward without Converted Organics and the Company no longer has any continuing involvement with, or cash flows from, this segment. Loss from the discontinued operations was as per the following table: 2014 Revenue $ 1,300 Expenses (1,623 ) Loss from discontinued operations (323 ) Loss on disposal (1,626 ) Net Loss from discontinued operations $ (1,949 ) |
Liquidity Liquidity
Liquidity Liquidity | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Liquidity | LIQUIDITY Based on current forecasts and assumptions, the Company believes that its cash and cash equivalents will be sufficient to meet anticipated cash needs for working capital and capital expenditures for at least the next 12 months from the date of filing this annual report. Such forecasts include approximately $3.7 million of licensing revenue to be received by January 13, 2017 under existing contracts. The Company may, however, encounter unforeseen difficulties that may deplete its capital resources more rapidly than anticipated. To insure against any such difficulties, the Company may raise additional capital to fund licensing and enforcement actions, planned research and development activities and to better solidify its financial position. Any efforts to seek additional funding could be made through issuances of equity or debt, or other external financing. However, additional funding may not be available on favorable terms, or at all. Further, if the Company is unable to obtain additional funding on a timely basis, the Company may be required to curtail or terminate some or all of its business plans. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. RECLASSIFICATIONS Where applicable, certain prior period amounts have been reclassified for comparative purposes to conform to the current presentation. These reclassifications have no impact on the previously reported loss. USE OF ESTIMATES The preparation of financial statements in conformity with US Generally Accepted Accounting Principles ("US GAAP"), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to stock-based compensation expense, impairment of long-lived assets, the determination of the economic useful life of property and equipment, income taxes and valuation allowances against net deferred tax assets. Management bases its estimates on historical experience or on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, the Company considers all highly liquid instruments with original maturities of three months or less when purchased to be cash equivalents. Included in cash and cash equivalents are demand deposits and money market accounts. CONCENTRATIONS OF CREDIT RISK The Company maintains its cash and cash equivalents in financial institutions located in the United States and Israel. At times, the Company’s cash and cash equivalent balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced any losses in such accounts. As of December 31, 2015 and 2014 , substantially all of the Company’s cash and cash equivalents are uninsured. During 2015 , revenues generated by the Company were derived from three license agreements that the Company entered into with third parties. Revenue for the year ended December 31, 2014 was from one license agreement, which resulted in an accounts receivable balance. See “Note 8 - License, Settlement and Release Agreement.” ALLOWANCE FOR DOUBTFUL ACCOUNTS The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company does not currently require any collateral for accounts receivable. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The Company did not record an allowance for doubtful accounts as of December 31, 2015 and 2014, respectfully. Bad debt expense for the years ended December 31, 2015 and 2014 was not material. PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the related assets, which range from 3 to 7 years. Leasehold improvements are amortized on the straight-line method over the shorter of the remaining lease term or the estimated useful economic lives of the related assets using the straight-line method. The costs of additions and betterments are capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. PATENTS The Company owns or possesses licenses to use its patents. The Company’s patent costs were fully amortized prior to January 1, 2014. The costs of maintaining patents are expensed as incurred. Patents as of December 31, 2015 and 2014 are as follows : As of December 31, (In thousands) 2015 2014 Patents $ 18,052 $ 18,052 Less: accumulated amortization (18,052 ) (18,052 ) Total $ — $ — INVESTMENTS Investments in common and preferred stock in which the Company has significant influence, but less than a controlling voting interest, are accounted for using the equity method and are classified as non-current assets. Significant influence is presumed to exist when the Company holds more than 20% of the investee’s voting instruments. Other investments that are not controlled, and over which the Company does not have the ability to exercise significant influence are accounted for under the cost method. All of the Company’s investments as of December 31, 2015 and 2014 are accounted for under the cost method. IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets, such as property and equipment are evaluated for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The carrying amount of a long lived asset is not recoverable if it exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset. The amount of impairment loss, if any, is measured as the difference between the carrying value of the asset and its estimated fair value. Fair value is estimated based on the best information available and by making necessary estimates, judgments and projections. For purposes of these tests, long-lived assets must be grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. As of December 31, 2015 , the Company has not identified any impairments. FAIR VALUE OF FINANCIAL INSTRUMENTS The reported amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate their fair value due to their short maturities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. These fair value measurements apply to all financial instruments that are measured and reported on a fair value basis. Where available, fair value is based on observable market prices or is derived from such prices. The Company uses the market approach valuation technique to value its investments. The market approach uses prices and other pertinent information generated from market transactions involving identical or comparable assets or liabilities. The types of factors that the Company may take into account in fair value pricing the investments include available current market data, including relevant and applicable market quotes. Based on the observability of the inputs used in the valuation techniques, financial instruments are categorized according to the fair value hierarchy, which ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 - Observable inputs such as quoted prices in active markets. Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the assignment of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. REVENUE RECOGNITION Revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product or service has occurred, all obligations have been performed pursuant to the terms of the agreement, the sales price is fixed or determinable, and collectability is reasonably assured. Revenue results from grants of licenses to its patented cyber-security technology and settlements reached from legal enforcement of the Company’s patent rights. The Company does not grant, at this time, technology or software end-user licenses. Revenue is recognized when the arrangement with the licensee has been signed and the license has been delivered and made effective, provided license fees are fixed or determinable and collectability is reasonably assured. The fair value of licenses achieved is recognized as revenue. The amount of consideration received upon any settlement or judgment is allocated to each element of the settlement based on the fair value of each element. Elements related to licensing agreements and royalty revenues, is recognized as revenue in the consolidated statement of operations. Elements that are not related to license agreements and royalty revenue in nature will be reflected as a separate line item within the Other Income section of the consolidated statements of operations. Elements provided in either settlement agreements or judgments include, the value of a license, legal release, and interest. When settlements or judgments are achieved at discounts to the fair value of a license, the Company allocates the full settlement or judgment, excluding specifically named elements as mentioned above, to the value of the license agreement or royalty revenue under the residual method relative to full license fair value prior to the discount. Legal release as part of a settlement agreement is recognized as a separate line item in the consolidated statements of operations when value can be allocated to the legal release. When the Company reaches a settlement with a defendant, no value is allocated to the legal release since the existence of a settlement removes legal standing to bring a claim of infringement, and without a legal claim, the legal release has no economic value. The element that is applicable to interest income will be recorded as a separate line item in Other Income. RESEARCH AND DEVELOPMENT EXPENSE The Company expenses the cost of research and development as incurred. Research and development expenses consist primarily of professional services costs associated with the development of mobile security application products. SOFTWARE DEVELOPMENT COSTS Software development costs are expensed as incurred. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Company’s products are released soon after technological feasibility has been established. Software development costs incurred subsequent to achievement of technological feasibility were not material, and were expensed as incurred during the years ended December 31, 2015 and 2014. FOREIGN CURRENCY Foreign currency denominated assets and liabilities of foreign subsidiaries, where the local currency is the functional currency, are translated into U.S. dollars using the exchange rates in effect at the balance sheet dates, and income and expenses are translated using average exchange rates during the period. Foreign currency translation gains (losses) were immaterial for the years ended December 31, 2015 and 2014. Foreign currency transaction gains (losses) were immaterial for the years ended December 31, 2015 and 2014, and are included as general and administrative expense, in the accompanying consolidated statements of operations. STOCK-BASED COMPENSATION The Company measures compensation cost for all employee stock-based awards at their fair values on the date of grant. Stock-based awards issued to non-employees are measured at their fair values on the date of grant, and are re-measured at each reporting period through their vesting dates. When a non-employee becomes an employee and continues to vest in the award, the fair value of the individual’s award is re-measured on the date that he becomes an employee, and then is not subsequently re-measured at future reporting dates. The fair value of stock based awards is recognized as expense over the service period, net of estimated forfeitures, using the straight-line method for stock options and restricted stock. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock-based awards. NET LOSS PER COMMON SHARE Basic net loss per common share is based upon the weighted-average number of common shares outstanding. Diluted net loss per common share is based on the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding. Potentially dilutive common shares from employee equity plans and warrants are determined by applying the treasury stock method to the assumed exercise of warrants and share options and were excluded from the computation of diluted net loss per share because their inclusion would be anti-dilutive and consist of the following: December 31, 2015 2014 Stock Options 1,510,832 1,430,559 Restricted Stock Units 408,710 374,504 Total 1,919,542 1,805,063 INCOME TAXES The Former Parent files its consolidated income tax returns in the U.S. federal jurisdiction and has filed consolidated income tax returns in the state of California through 2010. The Former Parent’s federal income tax returns for tax years after 2010 remain subject to examination by the federal tax authorities. The Former Parent did not file separate income returns for its wholly-owned subsidiary. The Former Parent’s state income tax returns for tax years after 2010 remain subject to examination by the state tax authorities. Since 2013, the Company files consolidated income tax returns in the U.S. federal jurisdiction and is headquartered in California, formerly in New York. The federal and state income tax returns for the tax years 2013 and after remain subject to examination for federal and state taxes. The Company will be filing state income tax returns for California and New York. The Company accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be computed annually for temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The income tax provision or benefit is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. The benefit of tax positions taken or expected to be taken in income tax returns are recognized in the financial statements if such positions are more likely than not of being sustained. As of December 31, 2015 and 2014 , an immaterial or no liability for unrecognized tax benefits was required to be reported. The Company does not expect its unrecognized tax benefit position to change during the next twelve months. The Company’s policy is to classify assessments, if any, for tax-related interest as interest expense and penalties as general and administrative expenses. There were no amounts accrued for penalties or interest as of, or during the years ended December 31, 2015 and 2014 . RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-9”) , which amends the existing accounting standards for revenue recognition. ASU 2014-9 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled to when products and services are transferred to customers. ASU 2014-9 will be effective for the Company beginning in its first quarter of 2018. Early adoption is permitted commencing January 1, 2017. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements. In February, 2015, FASB issued ASU No. 2015-02 “Consolidation (Topic 810): Amendments to the Consolidation Analysis” that amends the current consolidation guidance. The amendments affect both the variable interest entity and voting interest entity consolidation models. The new guidance is effective for the Company beginning January 1, 2016, with early adoption permitted. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements. In August 2015, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes to simplify the presentation of deferred income taxes. The amendments in this update require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. The Company has elected to early adopt ASU 2015-17 as of the beginning of our fourth quarter ended December 31, 2015 on a prospective basis. There is no impact to the balance sheet amounts as a result of early adoption. In February, 2016, FASB issued ASU No. 2016-02 “Leases” that requires a lessee to recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The new guidance is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect of the standard on its consolidated financial statements and related disclosures. Other recent accounting standards that have been issued or proposed by FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT The components of property and equipment were as follows (in thousands): For the Years Ended December 31, 2015 2014 (In thousands) Office equipment leasehold improvements and furniture $ 325 $ 84 Less accumulated depreciation (68 ) (18 ) Property and equipment $ 257 $ 66 Depreciation expense for the years ended December 31, 2015 and 2014 was approximately $50,000 and $15,000 , respectively. The Company incurred approximately $34,000 in expense for the disposal of assets held in its prior headquarters in New York. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Investments | INVESTMENTS On November 21, 2013, the Company made a $5 million commitment to invest in Jerusalem Venture Partners (“JVP Fund”). As of December 31, 2015 , $3.3 million remains outstanding on this commitment. If and when the Company funds the entire amount of the investment, the investment will be less than a 10% limited partnership interest in which the Company will not be able to exercise control over the fund. Accordingly, the Company has accounted for this investment under the cost method of accounting. On June 8, 2015, the Company received a cash distribution of $826,000 as a portion of a gross entitlement of approximately $1,271,000 from its investment in the JVP Fund. This distribution represents a portion of the gross proceeds allocated to the Company’s investment, with the remaining amount to be retained by the JVP Fund to fund future investment activities. The retained proceeds did not reduce the Company's future capital commitment to the venture capital fund. There were no identified events or changes in circumstances that are believed to have had a significant adverse effect on the fair value of the investments as of December 31, 2015 and 2014 . The following is a summary of the Company’s investments: Venture Capital Fund Balance - January 1, 2014 $ 500 Investment made during 2014 500 Balance - December 31, 2014 1,000 Proceeds retained and reinvested in fund 445 Investment made during 2015 750 Balance - December 31, 2015 $ 2,195 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES LEASES On September 9, 2013, the Company entered into a lease for its former corporate headquarters in New York for a period of five years beginning October 1, 2013. Under the terms of the lease, the Company owed an initial annual rent of approximately $139,000 , payable in monthly installments of approximately $12,000 , unless earlier terminated in accordance with the lease. As of December 31, 2015 the total future minimum lease payments to be paid under the agreement, which expires in September 2018, was $412,000 . The agreement also required an initial security deposit of $69,000 which is included in other long term assets. The annual rental rate, beginning after the first year, is subject to an increase, on a cumulative basis, at a rate of 2.5% per annum compounded annually. In May 2015, the Company entered into a sublease agreement for its former corporate headquarters in New York, NY. As of December 31, 2015 the total future minimum lease payments to be received under the sublease agreement, which expires in September 2018, was $452,000 . On March 20, 2014, the Company received the consent of the master landlord for a sublease agreement dated March 10, 2014, pursuant to which the Company subleased office space in Menlo Park, California through November 30, 2017. From the commencement date, the Company owed an initial annual rent of approximately $165,000 , payable in equal monthly installments, unless earlier terminated by either party in accordance with the lease. The annual rental rate is subject to an approximately 3.0% increase at each anniversary of the commencement date during the term. As of December 31, 2015 the total future minimum lease payments to be paid under the agreement, which expires in November 2017, was $330,000 . In August 2015, the Company entered into a sublease agreement for its office space in Menlo Park, CA. As of December 31, 2015, the total future minimum lease payments to be received under the sub-lease agreement, which expires in November 2017, was $366,000 . On January 7, 2015, the Company entered into a sublease agreement to sublease office space in East Palo Alto, California through September, 2018 to serve as its new Company headquarters. The annual rent is approximately $425,000 , payable in equal monthly installments, unless earlier terminated by either party in accordance with the lease. The annual rent is subject to an approximate 3.0% increase at each anniversary of the commencement date during the term of the sublease agreement. The agreement also required an initial security deposit of $231,000 which is included in other long-term assets. As of December 31, 2015, the total future minimum lease payments to be paid under the agreement, which expires in September 2018, was $1,223,000 . On October 12, 2015, the Company entered into a lease agreement in Tel Aviv, Israel, through October, 2017, where it is conducting operations in support of CybeRisk. The annual rent is approximately $30,000 , payable in equal monthly installments, unless earlier terminated by either party in accordance with the lease. As of December 31, 2015, the total future minimum lease payments to be paid under the agreement, which expires in October, 2017, was $62,000 . The Company vacated the space at Menlo Park on March 31, 2015 and New York on May 31, 2015. The Company accounted for its “Cease-Use Liability” in accordance with ASC 420 “Exit or Disposal Cost Obligations”. The following table sets forth the Company’s aggregate future minimum payments under its operating lease commitments as of December 31, 2015 (in thousands): Years ending December 31, 2016 $ 787 2017 782 2018 458 Total $ 2,027 For the years ended December 31, 2015 and 2014, the rent expense was approximately $667,000 and $261,000 , respectively . Rental income for the years ended December 31, 2015 and 2014 was $132,000 and $0 , respectively. Sublease income is recorded as a reduction in rental expense. Future minimum lease payments to be received under the sublease agreements as of December 31, 2015 are as follows (in thousands): Years ending December 31, New York Menlo Park Total 2016 $ 160 $ 188 $ 348 2017 165 178 343 2018 127 — 127 $ 452 $ 366 $ 818 |
Litigation, Claims, and Assessm
Litigation, Claims, and Assessments | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Claims, and Assessments | LITIGATION, CLAIMS AND ASSESSMENTS A. United States District Court Actions Finjan, Inc. v. FireEye, Inc., 4:13-cv-03133SBA, (N.D. Cal): Finjan filed a patent infringement lawsuit against FireEye, Inc. in the United States District Court for the Northern District of California on July 8, 2013, asserting that FireEye, Inc. is directly and indirectly infringing certain claims of Finjan’s U.S. Patent Nos. 6,804,780, 7,058,822, 7,647,633, 7,975,305, 8,079,086, and 8,225,408, through the manufacture, use, importation, sale, and/or offer for sale of its products and services, including but not limited to FireEye’s Threat Protection Platform, including the FireEye Malware Protection System, the FireEye Dynamic Threat Intelligence, and the FireEye Central Management System. Finjan amended its Complaint on August 16, 2013, to add U.S. Patent No. 6,154,844 to the list of asserted patents. The principal parties in this proceeding are Finjan, Inc. and FireEye, Inc. Finjan seeks entry of judgment that FireEye, Inc. has infringed, is infringing, and has induced infringement of the above-listed patents, a preliminary and permanent injunction from infringing, or inducing the infringement of the above-listed patents, an accounting of all infringing sales and revenues, damages of no less than a reasonable royalty and consistent with proof, enhanced damages, and enhanced damages for willful infringement, costs, interest, and reasonable attorneys’ fees under 35 U.S.C. §285. FireEye, Inc. answered Finjan's Amended Complaint on September 3, 2013, by denying Finjan's allegations of infringement and counterclaiming that the asserted patents are invalid under 35 U.S.C. §§ 101, 102, 103 and/or 112. Both parties have demanded a jury trial. On June 2, 2014, the Honorable Saundra Brown Armstrong entered an Order Granting Motion to Stay Pending Reexamination of U.S. Patent Nos. 7,058,822 (“the ‘822 Patent”) and 7,647,633 (“the ‘633 Patent”). Accordingly, this action is off calendar until the U.S. Patent and Trademark Office completes its administrative reexamination proceedings. On October 23, 2014, an Advisory Action was issued by the USPTO maintaining the rejections from the final Office Action and indicating that Finjan’s proposed claims amendments would not be entered. On December 8, 2014, Finjan: (1) filed a petition to the Director of the Central Reexamination Unit (CRU) under 37 CFR 1.181 challenging the Examiner’s failure to enter the amendments and requesting entry; and (2) a notice of appeal to the Patent Trial and Appeal Board. Finjan filed its appeal brief on February 8, 2015, and the Appeal was docketed at the PTAB and assigned Appeal No. 2015-006304. An oral hearing before the PTAB took place on November 3, 2015. On November 30, 2015, pursuant to the Court’s Order Granting Motion to Stay Pending Reexamination, the parties filed a joint status report regarding the status of reexamination proceedings of the ‘822 and ‘633 Patents. On December 30, 2015, the PTAB issued a decision reversing the Examiner’s rejection of claims 1-8 and 16-27 and the patent received an Ex Parte Reexamination Certificate numbered 10815 with no changes from the original patented claims. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Blue Coat Systems, Inc., Case 5:13-cv-03999-BLF, (N.D. Cal.): Finjan filed a patent infringement lawsuit against Blue Coat Systems, Inc., in the United States District Court for the Northern District of California on August 28, 2013, asserting that Blue Coat is directly and indirectly infringing certain claims of Finjan’s U.S. Patent Nos. 6,154,844, 6,804,780, 6,965,968, 7,058,822, 7,418,731, and 7,647,333 patents. The principal parties in this proceeding are Finjan and Blue Coat. This action is before the Honorable Judge Beth Labson Freeman. The Court held a claim construction, or Markman Hearing, for this matter on August 22, 2014. The Court entered its Markman Order entitled “Order Construing Claims in U.S. Patent Nos. 6,154,844, 7,058,822, 7,418,731, and 7,647,633, on October 20, 2014, which is available on PACER (www.pacer.gov), as Docket No. 118. Trial for this action took place from July 20, 2015 through August 4, 2015. On August 4, 2015, the jury returned a unanimous verdict that each of the Finjan asserted patents are valid and enforceable. Further, the jury returned a unanimous verdict that Finjan’s U.S. Patent Nos. 6,154,844, 6,804,780, 6,965,968, and 7,418,731 were literally infringed by Blue Coat, and that U.S. Patent No. 7,647,633 was infringed by Blue Coat under the Doctrine of Equivalents. Upon the findings of infringement, the jury also awarded Finjan approximately $39.5 million in damages as reasonable royalties for Blue Coat's infringement. On September 9, 2015, the Court held a bench trial on non-jury legal issues, and issued findings of fact and conclusions of law on November 20, 2015. On November 20, 2015, the Court entered Judgment in favor of Finjan. Finjan has not received any revenue from Blue Coat with respect to this lawsuit. There can be no assurance that Finjan will be successful in collecting the full amount of the jury award or otherwise in settling or litigating these claims . Finjan, Inc. v. Proofpoint, and Armorize Technologies, Inc., Case 3:13-cv-05808-HSG (N.D. Cal.): Finjan filed a patent infringement lawsuit against Proofpoint, Inc. and its wholly-owned subsidiary, Armorize Technologies, Inc., in the United States District Court for the Northern District of California on December 16, 2013, asserting that Proofpoint and Armorize collectively and separately are directly and indirectly infringing one or more claims of Finjan’s U.S. Patent Nos. 6,154,844, 7,058,822, 7,613,918, 7,647,633, 7,975,305, 8,079,086, 8,141,154, and 8,225,408, through the manufacture, use, importation, sale, and/or offer for sale of its products and services, including but not limited to Proofpoint Enterprise Protection, Proofpoint’s Malvertising Protection, Proofpoint’s Safelmpressions, Proofpoint’s Targeted Attack Protection, Proofpoint Essentials, Proofpoint Protection Server, Proofpoint Messaging Security Gateway, HackAlert Anti-Malware, Codesecure, SmartWAF, Safelmpressions, and Malvertising Protection. The principal parties in this proceeding are Finjan, Proofpoint, and Armorize. Finjan seeks entry of judgment that Proofpoint and Armorize have infringed and are infringing the above-listed patents, a judgment that they have induced infringement of U.S. Patent Nos. 6,154,844, 7,058,822, 7,613,918, 7,647,633, 7,975,305, 8,079,086, and 8,225,408, a preliminary and permanent injunction from infringing, or inducing the infringement of the same patents, an accounting of all infringing sales and revenues, damages of no less than a reasonable royalty and consistent with proof, enhanced damages, and costs, interest, and reasonable attorneys’ fees under 35 U.S.C. §285. This matter is assigned to the Honorable Haywood S. Gilliam, Jr., United States District Judge. A claim construction or Markman Hearing was heard on June 24, 2015, and the Court issued a Claim Construction Order on December 3, 2015. A pretrial conference is scheduled for May 10, 2016, and a trial date is scheduled for June 13, 2016. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Sophos Inc., Case 3:14-cv-01197-WHO (N.D. Cal.): Finjan filed a patent infringement lawsuit against Sophos Inc. in the United States District Court for the Northern District of California on March 14, 2014, asserting that Sophos is directly and indirectly infringing certain claims of Finjan’s U.S. Patent Nos. 6,154,844, 6,804,780, 7,613,918, 7,613,926, 7,757,289, and 8,141,154. Finjan amended the Complaint on April 8, 2014, to add U.S. Patent Nos. 8,677,494 and 8,566,580 to the list of asserted patents. Finjan asserts infringement against Sophos through the manufacture, use, importation, sale, and/or offer for sale of its products and services, including but not limited to End User Protection Suites, Endpoint Antivirus, Endpoint Antivirus - Cloud, Sophos Cloud, Unified Threat Management, Next-Gen Firewall, Secure Web Gateway, Secure Email Gateway, Web Application Firewall, Network Storage Antivirus, Virtualization Security, SharePoint Security, Secure VPN, Secure Wi-Fi and Server Security. The principal parties in this proceeding are Finjan and Sophos. This action is before the Honorable William H. Orrick. Finjan seeks entry of judgment that Sophos has infringed and is infringing the above-listed patents, a judgment that Sophos has induced infringement of U.S. Patent Nos. 6,804,780, 7,613,918, 7,613,926, 7,757,289, 6,154,844, and 8,667,494, a judgment that Sophos has contributorily infringed U.S. Patent No. 8,566,580, a preliminary and permanent injunction from infringing, inducing, or contributorily infringing the same patents, an accounting of all infringing sales and revenues, damages of no less than a reasonable royalty and consistent with proof, enhanced damages, costs, interest, and reasonable attorneys’ fees under 35 U.S.C. §285. Sophos filed its Answer to Finjan’s First Amended Complaint on May 9, 2014. Both parties demanded a jury trial. Sophos filed its Amended Answer to the Complaint on May 30, 2014. Mediation pursuant to the Court's ADR Program occurred on January 13, 2015 and it has not yet resulted in resolution between the parties. Further, a Technology Tutorial took place in this matter on February 9, 2015. A claim construction or Markman Hearing occurred on February 13, 2015. The Court entered its Markman Order entitled “Claim Construction Order” on March 2, 2015, which is available on PACER (www.pacer.gov), as Docket No. 73. On April 9, 2015, Finjan filed a Second Amended Complaint that included a certificate of correction for the ‘154 Patent. On November 17, 2015, Finjan filed a Third Amended Complaint to add claims of Sophos’s willful infringement. Sophos filed an Answer to Finjan’s Third Amended Complaint on December 4, 2015. Currently, a pretrial conference is scheduled for August 8, 2016, and a trial date is scheduled for September 6, 2016. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Symantec Corporation., Case 3:14-cv-02998-HSG (N.D. Cal.): Finjan filed a patent infringement lawsuit against Symantec Corporation in the United States District Court for the Northern District of California on June 30, 2014, asserting that Symantec is directly and indirectly infringing certain claims of Finjan’s U.S. Patent Nos. 7,756,996, 7,757,289, 7,930,299, 8,015,182, and 8,141,154, through the manufacture, use, importation, sale, and/or offer for sale of certain products and services. Finjan amended the Complaint on September 11, 2014 to add U.S. Patent Nos. 6,154,844, 7,613,926 and 8,677,494 (collectively the "asserted patents"). The accused products and services include Symantec Endpoint Protection, Symantec Endpoint Protection Small Business Edition, Network Access Control, Norton Internet Security, Norton Anti-Virus, Norton 360, Safe-Web Lite, Norton Safe Web, Messaging Gateway, Messaging Gateway for Service Providers, Messaging Gateway Small Business Edition Managed Security Services-Advance Threat Protection, Advanced Threat Protection Solution, Symantec Protection Engine for Cloud Services, Symantec Protection Engine for Network Attached Storage, Symantec Mail Security for Domino, Symantec Mail Security for Microsoft Exchange, Symantec Scan Engine for Windows, Web Security.cloud, Email Security.cloud, AntiVirus/Filtering for Domino, AntiVirus for Linux, Mail Security for SMTP, Scan Engine for Linux/Solaris, AntiVirus for Caching/Messaging/NAS for Linux/Solaris, Protection Engine for Linux/Solaris, AntiVirus for Caching/Messaging/NAS for Windows, Web Gateway and Norton Security. The principal parties in this proceeding are Finjan and Symantec. Finjan seeks entry of judgment that Symantec has infringed and is infringing the asserted patents, has contributorily infringed and is contributorily infringing U.S. Patent No. 8,015,182, and has induced infringement, and/or is inducing infringement of U.S. Patent Nos. 6,154,844, 7,613,926, 7,756,996, 7,757,289, 7,930,299, and 8,677,494, a preliminary and permanent injunction from infringing, contributorily infringing, or inducing the infringement of the same patents, an accounting of all infringing sales and revenues, damages of no less than a reasonable royalty and consistent with proof, enhanced damages, and enhanced damages for willful infringement, costs, interest, and reasonable attorneys’ fees under 35 U.S.C. §285. Symantec answered the Amended Complaint on September 25, 2014, by denying Finjan’s allegations of infringement and counterclaiming that the asserted patents are invalid under 35 U.S.C. §§ 101, 102, 103 and/or 112. Symantec filed an Amended Answer on October 31, 2014, removing its Fourteenth Affirmative Defense of unenforceability. Both parties have demanded a jury trial. This matter is assigned to the Honorable Haywood S. Gilliam, Jr., United States District Judge. A claim construction or Markman Hearing was heard on June 29, 2015. On July 3, 2015, Symantec filed petitions for Inter Partes Review (“IPR”) before the Patent Trial and Appeal Board (“PTAB”) for all asserted claims of U.S. Patent Nos. 8,015,182, 8,141,154, 7,757,289, 7,930,299, and 7,756,996. On September 10, 2015, Symantec filed a total of 11 IPR petitions for all asserted claims of asserted patents. On August 20, 2015, Symantec filed a motion to stay the case pending completion of these eight IPR petitions. The motion was heard on October 1, 2015 and on October 9, 2015, the Court stayed the case pending the PTAB’s decision on whether to institute IPR of the claims that are the subject of Symantec’s petitions. On January 14, 2016, the PTAB denied institution of six IPRs of five asserted patents. On January 21, 2016, the parties filed a joint status report giving the Court an update regarding the status of the IPR petitions. On February 26, 2016 the PTAB denied institution of an additional two IPRs filed on separate patents, denying a total of eight petitions as of February 26, 2016. On March 11, 2016 the PTAB denied two more IPR's on patents against Symantec, denying a total of 10 petitions to date. On March 18, 2016, the PTAB granted institution on the 11th Petition by Symantec, relating to the ‘494 Patent (IPR2015-01892). There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Palo Alto Networks, Inc., Case 3:14-cv-04908 EMC (N.D. Cal.): Finjan filed a patent infringement lawsuit against Palo Alto Networks, Inc., in the United States District Court for the Northern District of California on November 4, 2014, asserting that Palo Alto Networks is directly and indirectly infringing certain claims of Finjan’s U.S. Patent Nos. 6,804,780, 6,965,968, 7,058,822, 7,418,731, 7,613,918, 7,613,926, 7,647,633, 8,141,154, 8,225,408, and 8,677,494, through the manufacture, use, importation, sale, and/or offer for sale of its products and services, including but not limited to Next-Generation Security Platform, Next-Generation Firewall, Virtualized Firewall, WildFire Subscription, WildFire Platform, URL Filtering Subscription, Threat Prevention Subscription, and Advanced EndPoint Protection. Palo Alto Networks failed to timely respond to the Complaint and Finjan submitted an application for Entry of Default. On Palo Alto Networks’ request, Finjan stipulated to an extension of time for Palo Alto Networks to respond. The principal parties in this proceeding are Finjan and Palo Alto Networks. Finjan seeks entry of judgment that Palo Alto Networks has infringed and is infringing the above-listed patents, and has induced infringement and is inducing infringement of U.S. Patent Nos. 6,804,780, 6,965,968, 7,058,822, 7,418,731, 7613,918, 7,613,926, 7,647,633, 8,141,154, 8,225,408, and 8,677,494, a preliminary and permanent injunction from infringing, or inducing the infringement the same patents, an accounting of all infringing sales and revenues, damages of no less than a reasonable royalty consistent with proof, and enhanced damages for willful infringement, costs, interest, and reasonable attorneys’ fees under 35 U.S.C. §285. Palo Alto Networks filed its Answer and Counterclaims on December 31, 2015, by denying Finjan's allegations of infringement and counterclaiming that the asserted patents are invalid under 35 U.S.C. §§ 101, 102, 103 and/or 112. Both parties have demanded a jury trial. On October 8, 2015, the Honorable Edward M. Chen recused himself from the case and requested the case be reassigned to another judge. Also on October 8, 2015, the case was reassigned to the Honorable Phyllis J. Hamilton in the Oakland division of the District Court for the Northern District of California. On September 25, 2015, Palo Alto Networks filed a petition for IPR before the PTAB of U.S. Patent No. 8,141,154. On September 30, 2015, Palo Alto Networks filed petitions for IPR of U.S. Patent Nos. 7,058,822, 7,418,731, 7,647,633 and 8,225,408. On November 4, 2015, Palo Alto Networks filed a IPR petition of U.S. Patent Nos. 7,613,926. On November 5, 2015, Palo Alto Networks filed IPR petitions of U.S. Patent Nos. 6,965,968 and 8,141,154. On November 6, 2015, Palo Alto Networks filed IPR petitions of U.S. Patent Nos. 6,804,780, 7,613,918, 8,225,408 and 8,667,494. On December 10, 2015, the matter was stayed pending a decision by the PTAB on whether to institute IPR of Finjan's claims of its ten patents asserted against Palo Alto Networks. The parties will file a joint status report within seven (7) days of the USPTO’s decision concerning whether to continue or lift the stay. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Blue Coat Systems, Inc., Case 5:15-cv-03295-BLF (N.D. Cal.): Finjan filed a second patent infringement lawsuit against Blue Coat Systems, Inc. in the United States District Court for the Northern District of California on July 15, 2015, asserting that Blue Coat is directly infringing certain claims of Finjan’s U.S. Patent Nos. 6,154,844, 6,965,968, 7,418,731, 8,079,086, 8,225,408, 8,677,494, and 8,566,580, through the manufacture, use, importation, sale, and/or offer for sale of its products and services, including but not limited to the Web Security Service, WebPulse Cloud Service, ProxySG Appliances and Software, Blue Coat Systems SV2800 and SV3800, Malware Analysis Appliances and Software, Security Analytics Platform, Content Analysis System, and Mail Threat Defense, S400-10 and S400-20. Finjan seeks entry of judgment that Blue Coat has infringed and is infringing the above-listed patents, a preliminary and permanent injunction from the infringement of the same patents, an accounting of all infringing sales and revenues, damages of no less than a reasonable royalty consistent with proof, and enhanced damages for willful infringement, costs, interest, and reasonable attorneys’ fees under 35 U.S.C. §285. Blue Coat filed its Answer to the Complaint with Jury Demand and Counterclaim with Jury Demand against Finjan on September 8, 2015. On September 29, 2015, Finjan filed its Answer to Blue Coat’s Counterclaim. This second Blue Coat action is also assigned to the Honorable Beth Labson Freeman. A Case Management Conference (CMC) was held on December 17, 2015. Blue Coat filed a Motion to Stay the case pending final resolution of Case 5:13-cv-03999-BLF, and Motions for Joinder of several Petitions for IPR on five of seven asserted patents, and Ex Parte Reexamination requests for two asserted patents, filed previously by other defendants. A claim construction tutorial is scheduled for December 2, 2016, and a claim construction hearing is scheduled for December 9, 2016. A pretrial conference is scheduled for October 5, 2017, and trial is scheduled for October 30, 2017. On March 1, 2016 Finjan filed an amended Complaint to add existing Finjan patent 9,141,786 and two newly issued Finjan patents 9,189,621 (issued November 17, 2015) and 9,219,755 (issued December 22, 2015). There can be no assurance that Finjan will be successful in settling or litigating these claims. B. Proceedings before the United States Patent & Trademark Office (USPTO) Ex Parte Reexamination Proceedings: As defined by the USPTO, an Ex Parte Reexamination is a “proceeding in which any person may request reexamination of a U.S. Patent based on one or more prior patents or printed publications. A requester who is not the patent owner has limited participation rights in the proceedings.” U.S. Patent No. 8,079,086 (Assignee, Finjan, Inc.): A first third-party request for Ex Parte Reexamination of U.S. Patent No. 8,079,086 was filed on October 7, 2013, on behalf of FireEye, Inc. and assigned Reexamination Control Number 90/013,015. The USPTO denied FireEye’s request on November 19, 2013, and the reexamination proceedings terminated on January 14, 2014. A second third-party request by FireEye, Inc., for Ex Parte Reexamination of U.S. Patent No. 8,079,086 was filed on February 7, 2014, and assigned Reexamination Control Number 90/013,147. The USPTO denied FireEye’s second request on March 27, 2014, and the reexamination proceedings terminated on April 29, 2014. A third third-party request for Ex Parte Reexamination of Claims 17 and 24 of U.S. Patent No. 8,079,086 was filed on December 9, 2015 by Proofpoint, Inc. and assigned Reexamination Control Number 90/013,654. The reexamination request is currently awaiting USPTO action. U.S. Patent No. 7,975,305 (Assignee, Finjan, Inc.): A third-party request for Ex Parte Reexamination of Claims 1, 2, 5 and 13 of U.S. Patent No. 7,975,305 was filed on December 11, 2015 by Proofpoint, Inc. and assigned Reexamination Control Number 90/013,660. The request for reexamination was granted on January 19, 2016. U.S. Patent No. 7,647,633 (Assignee, Finjan, Inc.): A third-party request for Ex Parte Reexamination of Claims 1-7 and 28-33 of U.S. Patent No. 7,647,633 was filed on October 7, 2013, on behalf of FireEye, Inc. and assigned Reexamination Control Number 90/013,016. The request for reexamination was granted and a non-final Office Action was mailed November 19, 2013. The non-final Office Action included rejections of Claims 1-7 and 28-33 under various prior art (including previously considered and disclosed prior art) under 35 U.S.C. §§ 102 and/or 103. An in-person Examiner interview was conducted at the USPTO on February 4, 2014, and a timely response to non-final Office Action was filed on February 19, 2014. The response to non-final Office Action included arguments and a supporting declaration by Finjan showing commercial success, industry praise, and copying by others of products covered by pending claims; a declaration by a technology expert rebutting improper technical interpretations of the prior art and the invention; and additional new claims for consideration. Additionally, a renewed petition to accept an unintentionally delayed priority claim was also submitted and the petition was granted on January 23, 2015. An updated filing receipt reflecting the priority claim was issued. A final Office Action was issued May 22, 2015, and a Notice of Appeal was filed by Finjan on May 22, 2015. Finjan’s appeal brief was filed August 24, 2015, appealing the rejections of Claims 1-7, 28-33 and 42-52. An Examiner’s Answer was received on December 18, 2015. Finjan filed its Reply Brief requesting reversal of the rejections and a Request for Oral Hearing February 18, 2016. There can be no assurance that Finjan will be successful in rebutting the patentability challenge to Claims 1-7 and 28-33 (original claims) or added Claims 42-52 before the USPTO. A second third-party request for Ex Parte Reexamination of Claims 8 and 12 of U.S. Patent No. 7,647,633 was filed on December 9, 2015 by Proofpoint, Inc. and assigned Reexamination Control Number 90/013,652. The reexamination request is currently awaiting USPTO action. There can be no assurance that Finjan will be successful in rebutting the patentability challenge before the USPTO. U.S. Patent No. 7,058,822 (Assignee, Finjan, Inc.): A third-party request for Ex Parte Reexamination of Claims 1-8 and 16-27 of U.S. Patent No. 7,058,822 was filed on October 7, 2013, on behalf of FireEye, Inc. and assigned Reexamination Control Number 90/013,017. The request for reexamination was granted and a non-final Office Action was mailed December 6, 2013. The non-final Office Action included rejections of Claims 1-8 and 16-27 under various prior art (including previously considered and disclosed prior art) under 35 U.S.C. §§ 102 and/or 103. An in-person Examiner interview was conducted at the USPTO on February 4, 2014, and a timely response to non-final Office Action was filed on March 6, 2014. A final Office Action was mailed on September 8, 2014 and a response thereto was filed on October 8, 2014, which included proposed claims amendments and arguments rebutting the various prior rejections. On October 23, 2014, an Advisory Action was issued by the Patent Office maintaining the rejections from the final Office Action and indicating that Finjan’s proposed claims amendments would not be entered. On December 8, 2014, Finjan: (1) filed a petition to the Director of the Central Reexamination Unit (CRU) under 37 CFR 1.181 challenging the Examiner’s failure to enter the amendments and requesting entry; and (2) a notice of appeal to the Patent Trial and Appeal Board. Finjan filed an appeal brief on February 8, 2015. The Examiner filed a brief on March 30, 2015. Finjan filed a Reply Brief and a Request for Oral Hearing on June 1, 2015, and the Appeal was docketed at the PTAB and assigned Appeal No. 2015-006304. An oral hearing before the PTAB took place on November 3, 2015. On December 30, 2015, the PTAB issue a decision reversing the Examiner’s rejection of Claims 1-8 and 16-27. On February 16, 2016, an Ex Parte Reexamination Certificate (Certificate No. US 7,058,822 C1) was issued to Finjan by the USPTO. Finjan was granted U.S. Patent No. 9,141,786 containing additional claims on September 22, 2015. A Track 1 (accelerated examination) continuation application was filed on November 16, 2015, seeking yet additional claim coverage. There can be no assurance that Finjan will be successful in securing added claims 37 and 40 before the USPTO. Inter Partes Reexamination Proceedings: As defined by the USPTO, an Inter Partes Reexamination is a “proceeding in which any person who is not the patent owner and is not otherwise estopped may request examination of a U.S. Patent issued from an original application filed on or after November 29, 1999, based on one or more prior patents or printed publications. Both patent owner and third party requester have participation rights throughout the proceeding, including appeal rights.” Effective September 16, 2012, the American Invents Act (AIA) replaced Inter Partes Reexaminations with proceedings referred to as post-grant review and Inter Partes Review (IPR). Post-grant proceedings are generally available immediately after patent issuance. For patents filed under the pre-AIA first to invent rules ( i.e. , applications filed prior to March 16, 2013, IPRs can be initiated immediately following issuance of patent. For patents examined under the AIA first-to-file rules ( i.e. , applications filed on or after March 16, 2013), IPRs can be initiated after the nine-month window of eligibility for post-grant review. U.S. Patent No. 6,480,962 (Assignee, Finjan, Inc.): A third-party request for Inter Partes Reexamination of all Claims 1-55 of U.S. Patent No. 6,480,962 was filed on November 29, 2011, on behalf of Symantec Corporation, and assigned Reexamination Control Number 95/001,836. The request for reexamination was granted and a non-final Office Action was mailed January 25, 2012. The non-final Office Action included rejections of claims 1-55 under numerous prior art references and combinations of such references (including previously considered and disclosed prior art) under 35 U.S.C. §§ 102 and/or 103. Finjan filed a response to non-final Office Action and the USPTO mailed an Action Closing Prosecution (ACP) on October 2, 2013. Finjan responded to the ACP on December 2, 2013, which included proposed claim amendments for consideration. Symantec responded on January 2, 2014. On June 27, 2014, the USPTO stated that the proposed claim amendments would not be entered and issued a Right of Appeal Notice. On July 1, 2014, Finjan filed a Notice of Appeal of the rejection of Claims 1-55 followed by an Appeal Brief on September 2, 2014. The Requester Symantec filed a respondent brief on October 2, 2014. The Examiner filed a brief on March 25, 2015. Finjan filed a Rebuttal Brief on April 27, 2015 and a Request for Oral Hearing on May 26, 2015. The Rebuttal Brief maintained Finjan’s request to review the rejections of Claims 2-4, 7-11, 13-14, 16-20, 22-32, 34-36, 39-44, 46-51, 53 and 54. Claims 1, 5, 6, 12, 15, 21, 33, 37, 38, 45, 52 and 55 were withdrawn from appeal in view the final invalidity decision issued on September 15, 2014 by the Federal Circuit. The Appeal was forwarded to the PTAB in accordance with the Notice mailed June 2, 2015. Finjan also sought examination of additional claims through multiple Track I expedited continuation applications. Finjan was granted U.S. Patent Nos. 9,189,621 and 9,291,755 containing those additional claims on November 17, 2015 and December 22, 2015, respectively. Oral argument was heard on February 17, 1016 and a decision is pending. Oral argument was heard on February 17, 1016 and a decision is pending. There can be no assurance that Finjan will be successful in rebutting the patentability challenge to Claims 2-4, 7-11, 13-14, 16-20, 22-32, 34-36, 39-44, 46-51, 53 and 54 before the USPTO. Inter Partes Review Proceedings: As defined by the USPTO, Inter Partes Review (IPR) is a trial proceeding conducted at the Patent and Trial and Appeal Board (PTAB or Board) to review the patentability of one or more claims in a patent only on a ground that could be raised under §§ 102 or 103, and only on the basis of prior art consisting of patents or printed publications. For first-inventor-to-file patents IPR process begins with a third party (a person who is not the owner of the patent) filing a petition after the later of either: (1) nine months after the grant of the patent or issuance of a reissue patent; or (2) if a post grant review is instituted, the termination of the post grant review. These deadlines do not apply to first-to-invent patents. The patent owner may file a preliminary response to the petition. An IPR may be instituted upon a showing that there is a reasonable likelihood that the petitioner would prevail with respect to at least one claim challenged. If the proceeding is instituted and not dismissed, a final determination by the Board will be issued within one year (extendable for good cause by six months). The procedure for conducting IPR took effect on September 16, 2012, and applies to any patent issued before, on, or after September 16, 2012. U.S. Patent No. 7,613,926 (the “’926 Patent”) On March 19, 2015, Sophos, Inc. filed a petition for IPR of U.S. Patent No. 7,613,926 (IPR2015-00907). Finjan filed a Patent Owner’s Preliminary Response (POPR) to the petition on June 26, 2015. The PTAB denied Sophos’ petition to institute the IPR proceeding on the ‘926 Patent on September 24, 2015. On October 26, 2015, Sophos filed a Request for Rehearing, and on December 4, 2015, the PTAB denied Sophos’ Request for Rehearing. U.S. Patent No. 8,677,494 (the “’494 Patent”) On April 8, 2015, Sophos, Inc. filed a petition for IPR of U.S. Patent No. 8,677,494 (IPR2015-01022). Finjan filed a POPR to the petition on July 15, 2015. The PTAB denied Sophos’ petition to institute the IPR proceeding on the ‘494 Patent on September 24, 2015. On October 26, 2015, Sophos filed a Request for Rehearing, and on January 28, 2016, the PTAB denied Sophos’ Request for Rehearing. U.S. Patent No. 7,756,996 (the “’996 Patent”) On July 3, 2015, Symantec Corporation filed two (2) separate petitions for IPR of U.S. Patent No. 7,756,996 (IPR2015-01545/01546). Finjan filed POPRs to the petitions October 19, 2015. The PTAB denied both of Symantec’s petitions to institute IPR proceedings on the ‘996 Patent on January 14, 2016. U.S. Patent No. 7,757,289 (the “’289 Patent”) On July 3, 2015, Symantec Corporation filed a petition for IPR of |
License, Settlement and Release
License, Settlement and Release Agreement | 12 Months Ended |
Dec. 31, 2015 | |
License Settlement And Release Agreement [Abstract] | |
License, Settlement and Release Agreement | LICENSE, SETTLEMENT AND RELEASE AGREEMENT On December 30, 2015, Finjan entered into a Confidential Patent License, Settlement and Release Agreement (“December 30, 2015 License”), effective December 29, 2015, with a United States-based third party (“Licensee”). The December 30, 2015 License provides for Licensee to pay Finjan the sum of $3.65 million in cash, in which $1.0 million was received on December 30, 2015, $1.65 million is payable on or before July 1, 2016, and $1.0 million is payable on or before September 30, 2016. The Company recognized $1.0 million of the $3.65 million license as revenues as of December 31, 2015, as such amount was determined to be fixed and determinable, in accordance with the Company’s revenue recognition policy as described in Note 3. The remaining balance of $2.65 million under the terms of the December 30, 2015 License will be recognized as revenues when the payments are due. In exchange for the foregoing and other valuable consideration, Finjan agreed to, subject to certain restrictions, limits and other conditions, grant Licensee a non-exclusive, irrevocable (except in the case of non-payment by Licensee or other material breach), worldwide license under Finjan Patents during the Term as specified in the December 30, 2015 License. On November 15, 2015, Finjan entered into a Confidential Patent License, Settlement and Release Agreement (“November 15, 2015 License”), effective November 15, 2015, with a European-based third-party (“European Licensee”). The November 15, 2015 License provides for European Licensee to pay Finjan the sum of $2.975 million in cash on or before 14 days after the Effective date, which was received on November 27, 2015. Finjan recognized all of the $2.975 million license as revenues as of December 31, 2015, as such amount was determined to be fixed and determinable, in accordance with the Company’s revenue recognition policy as described in Note 3. In exchange for the foregoing and other valuable consideration, Finjan agreed to, subject to certain restrictions, limits and other conditions, grant European Licensee a non-exclusive, perpetual, worldwide, fully-paid up irrevocable (except in the case of non-payment by European Licensee or other material breach) license to Finjan Patent Rights as specified in the November 15, 2015 License. On April 7, 2015, Finjan entered into a Confidential Asset Purchase and Patent License Agreement (the “April 7, 2015 License”), effective as of April 7, 2015, with F-Secure Corporation, a company incorporated in Finland (“F-Secure”). The April 7, 2015 License provides for F-Secure to pay Finjan the sum of $1.0 million in cash, of which $700,000 was received on April 22, 2015 and $300,000 is payable on or before March 31, 2016. The Company recognized $700,000 of the $1.0 million license as revenues as of September 30, 2015, as such amount was determined to be fixed and determinable, in accordance with the Company’s revenue recognition policy as described in Note 3. The remaining balance of $300,000 under the terms of the April 7, 2015 License will be recognized as revenues when the payments are due. The April 7, 2015 License also provides for the assignment by F-Secure to Finjan of two patents, U.S. Patent Nos. 8,474,048 and 7,769,991, including among other things, all progeny applications or patents, foreign counterparts and reissues (the “F-Secure Patents”). The Company has not yet determined if these patents fit into its business model, therefore any value of these patents would be limited to their cost which would be their filing fees, an immaterial amount. As such, the Company has concluded that their value is de minimis. In exchange for the foregoing and other valuable consideration, Finjan agreed to, subject to certain restrictions, limits and other conditions, grant F-Secure a worldwide, fully-paid, non-exclusive field of use license to Finjan patents owned as of the effective date or acquired by Finjan or its affiliates within two years from the effective date, as well as to the F-Secure Patents. On September 24, 2014, Finjan entered into a Confidential Patent License, Settlement and Release Agreement (the “September 24, 2014 License”) with Websense, Inc. (“Websense”) against whom Finjan had filed a patent infringement lawsuit. Pursuant to this September 24, 2014 License, Websense and Finjan also agreed to dismiss the infringement litigation, and each party gave the other a general release for all claims that it might have against the other, known or unknown, based on the actions of either party on or before the date of the settlement. Under the September 24, 2014 License, Websense will pay Finjan a license fee of $8.0 million payable in four installments. The first installment of $3.0 million was paid upon execution of the agreement and filing of the dismissal with prejudice, the second installment of $2.0 million was received on January 16, 2015, the third installment of $2.0 million was payable on or before January 15, 2016, and received on January 14, 2016. The fourth and final installment of $1.0 million is payable on or before January 13, 2017. The Company recognized approximately $5.0 million of the $8.0 million license as revenues during 2014. The remaining balance of $3.0 million under the terms of the September 24, 2014 License will be recognized as revenues when the payments are due. Each party also agreed to bear its own legal fees and costs. The Company recognized $0.8 million of legal fees related to this settlement as cost of revenues. At December 31, 2014, the second installment of $2.0 million was recognized as revenue and accounts receivable, which was received on January 16, 2015. The January 2016 payment was recognized as revenue in 2016. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY AUTHORIZED CAPITALIZATION The Company’s capital structure is comprised of preferred stock and common stock. The Company’s authorized capitalization consists of (i) 80,000,000 shares of common stock, par value $0.0001 per share, and (ii) 10,000,000 shares of Preferred Stock, $0.0001 par value per share. The Company’s certificate of incorporation authorizes the Board of Directors to establish one or more classes or series of preferred stock. Unless required by law or by any stock exchange on which our common stock is listed in the future, the authorized shares of preferred stock will be available for issuance at the discretion of our Board of Directors without further action by our stockholders. The Board of Directors is able to determine, with respect to any class or series of preferred stock, the terms and rights of that series. COMMON STOCK Holders of the Company’s common stock are entitled to one vote on each matter submitted to a vote at a meeting of stockholders. The Company’s common stock does not have cumulative voting rights, which means that the holders of a majority of voting shares voting for the election of directors can elect all of the members of the Board of Directors. The Company’s common stock has no preemptive rights and no redemption or conversion privileges. The holders of the outstanding shares of the Company’s common stock are entitled to receive dividends out of assets legally available at such times and in such amounts as the Board of Directors may, from time to time, determine, and upon liquidation and dissolution are entitled to receive all assets available for distribution to the stockholders. A majority vote of shares represented at a meeting at which a quorum is present is sufficient for all actions that require the vote of stockholders. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION Upon shareholder approval of the 2014 Plan, the 2013 Global Share Option Plan and Israeli Sub-Plan were terminated, other than respect to the 1,489,532 shares of common stock underlying options outstanding under such plan. The Company shareholders approved the 2014 Plan at the annual meeting of stockholders held July 10, 2014, pursuant to which 2,196,836 shares of common stock are authorized for issuance. Upon shareholder approval of the 2014 Plan, during 2014, the Company issued a total of 374,504 RSU's and options to purchase an aggregate of 25,000 share of our common stock that had been previously approved by the Board and the Compensation Committee, subject to stockholder approval of the 2014 Plan, to certain employees and non-executive directors. During 2015 the Company granted an aggregate of 182,500 options to purchase shares of our common stock to certain employees in connection with their employment with the Company. In addition, the Company granted an aggregate of 240,000 shares of RSU's, of which 200,000 were granted to CEO Philip Hartstein and the remainder to certain employees in connection with their employment with the Company. As of December 31, 2015, the remaining number of shares available for issuance under the 2014 Plan is 1,536,670 . Total stock-based compensation for stock options and restricted stock awards, of $0.8 million and $1.4 million was recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2015 and 2014 , respectively. The stock-based compensation expense is for options and restricted stock awards granted to certain employees, consultants, and members of the Board of Directors. STOCK OPTIONS The following is a summary of stock option activity during the years ended December 31, 2015 and 2014 : Number of Options Outstanding Weighted Average Exercise Price Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (thousands) Outstanding – December 31, 2013 1,625,476 $ 1.76 Options granted 25,000 5.68 Options exercised 79,645 1.66 Options forfeited 140,272 — Options expired — — Outstanding – December 31, 2014 1,430,559 $ 1.84 Options granted 182,500 1.47 Options exercised 32,227 2.09 Options forfeited 70,000 2.61 Options expired — — Outstanding – December 31, 2015 1,510,832 $ 1.63 7.13 $ — Exercisable – December 31, 2015 1,198,204 $ 1.63 6.73 $ — Exercisable – December 31, 2014 945,012 $ 1.66 9.38 $ 974 The Company estimates the fair values of stock options using the Black-Scholes option-pricing model on the date of grant. For the years ended December 31, 2015 and 2014 , the assumptions used in the Black-Scholes option pricing model, which was used to estimate the grant date fair value per option, were as follows, 2015 2014 Employee Grants Non-Employee Grants Employee Grants Non-Employee Grants Weighted-average Black-Scholes option pricing model assumptions: Volatility 90.99 % 61.10 % 50.70 % 57.78 % Expected term (in years) 6 6 5 10 Risk-free rate 1.49 % 0.71 % 1.00 % 2.90 % Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 % Weighted average grant date fair value per share $ 1.47 $ 1.44 $ 0.82 $ 0.84 The risk-free interest rate is the United States Treasury rate for the day of the grant having a term equal to the life of the equity instrument. The volatility is a measure of the amount by which the Company’s share price has fluctuated or is expected to fluctuate. Since the Company’s common stock was not publicly traded, or was not publicly traded for an extended duration at the time of the grant, an average of the historic volatilities of comparative companies was used. The dividend yield is zero percent as the Company has not made any dividend payment and has no plans to pay dividends in the foreseeable future. Due to the lack of historical information, the Company determines the expected term of its stock option awards by using the simplified method, which assumes each vesting tranche of the award has a term equal to average of the contractual term and the vesting period. As of December 31, 2015 , total compensation cost not yet recognized related to unvested stock options was approximately $0.3 million , which is expected to be recognized over a weighted-average period of 8.7 years . RESTRICTED STOCK UNITS The following is a summary of non-vested RSUs award activity for the year ended December 31, 2015 and 2014 : 2015 2014 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Non-vested 374,504 $ 5.08 — $ — Shares granted 240,000 2.29 374,504 5.08 Shares vested 160,286 1.58 — — Shares forfeited 45,508 4.10 — — Non-vested 408,710 $ 2.66 374,504 $ 5.08 The Company estimates the fair value of the granted shares using the market price of the Company’s stock price at the grant date. For the years ended December 31, 2015 and 2014 , the Company recognized $509,000 and 229,000 , respectively of stock-based compensation expense related to the RSUs. |
Other Income
Other Income | 12 Months Ended |
Dec. 31, 2015 | |
Component of Operating Income [Abstract] | |
Other Income | OTHER INCOME GAIN ON SETTLEMENTS In July 2010, the Company filed a patent infringement lawsuit against five software technology companies (the “2010 Litigation”). The Company asserted that defendants had willfully infringed the Company’s U.S. patents and sought an injunction and damages for such infringement. In April 2012, a Memorandum of Understanding was signed between the Company and one of the parties in the 2010 Litigation granting such party a worldwide, perpetual, non-exclusive, non-sublicenseable license to the patents-in-suit and all other patents owned by, or exclusively licensed to, FI Delaware or its direct or indirect wholly-owned subsidiaries. The license is fully paid up unless the holder of the license has aggregate annual net sales to third party distributors or re-sellers in excess of $10.0 million (which has not been achieved to date). In exchange for such license, the third party issued 2,951,786 shares of its common stock (representing 3.765% of such party’s outstanding shares of common stock) (the “Settlement Investment”) with a fair value of $8.3 million on the date of the agreement and agreed to pay Finjan $3.0 million in cash, which was payable over an 18 month period in the form of three payments in the amount of $1.0 million each. On March 5, 2013, the Company issued a dividend to the Former Parent, which included its entire ownership of the Settlement Investment. The Company has received all the four installment payments, and recognized such amount as gain on settlements. The last installment payment of $1.0 million was received in January 2014. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS In the course of business, the Company obtains legal services from a firm in which an executive of Finjan and member of the Company’s board is a member. The Company incurred approximately $227,781 and $258,000 in legal fees to the firm during the years ended December 31, 2015 and 2014 , respectively. As of December 31, 2015 and 2014 the Company had balances due to this firm amounting to approximately $13,000 and $100,000 , respectively. The Company obtains social media and investor related services from a firm in which the Company’s Chief Financial Officer holds a 50% interest. The Company incurred approximately $80,000 in fees to the firm during the twelve months ended December 31, 2015 , and nil during the twelve months ended December 31, 2014 . As of December 31, 2015 and December 31, 2014 , the Company has balances due to this firm amounting to $4,000 and $0 , respectively. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax | INCOME TAX The domestic and foreign components of loss before income taxes from continuing operations for the years ended December 31, 2015 and 2014 are as follows For the Years Ended December 31, 2015 2014 (in thousands) Domestic $ (11,996 ) $ (8,525 ) Foreign (601 ) — $ (12,597 ) $ (8,525 ) The provisions for income tax for the years ended December 31, 2015 and 2014 , consist of the following: For the Years Ended December 31, 2015 2014 (in thousands) Federal: Current $ — $ — Deferred (3,868 ) (3,045 ) State: Current 5 5 Deferred 488 (738 ) Foreign: Current — — Deferred (159 ) — (3,534 ) (3,778 ) Change in valuation allowance 3,539 3,783 Income tax provision $ 5 $ 5 The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense (benefit) as follows: For the Years Ended December 31, 2015 2014 U.S. Federal statutory rate 34 % 34 % State rate, net of federal benefit 1.3 % 5.8 % Permanent differences: Benefit of NOL carry back 0 % 0 % Other (1.5 )% (0.1 )% Change in valuation allowance (33.9 )% (39.8 )% Income tax provision (0.1 )% (0.1 )% The approximate tax effects of temporary differences, which give rise to significant deferred tax assets and liabilities, are as follows: As of December 31, 2015 2014 Deferred tax assets Net operating losses $ 9,666 $ 5,050 Stock-based compensation 890 984 Intangible assets 3,752 4,718 Other 50 67 Total deferred tax assets 14,358 10,819 Valuation allowance (14,358 ) (10,819 ) Deferred tax asset, net of valuation allowance — — Net deferred tax liability $ — $ — As of December 31, 2015 and 2014 , the Company had NOL carryforwards of approximately $25.5 million and $12.7 million , respectively. The federal and state net operating loss carryforwards will begin to expire in 2026. The valuation allowance associated with discontinued operations which are not reflected in the above table are approximately $418,000 and $418,000 for the years ended December 31, 2015 and 2014 respectively. Utilization of the Company’s NOLs may be subject to substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of the NOLs before utilization. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary difference become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment. Based on this assessment, management has established a full valuation allowance against all of the deferred tax assets in excess of the deferred tax liabilities for each period, since it is more likely than not that the deferred tax assets will not be realized. The change in valuation allowance for the years ended December 31, 2015 and 2014 , is $3.5 million and $3.8 million , respectively. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. |
Reclassifications | RECLASSIFICATIONS Where applicable, certain prior period amounts have been reclassified for comparative purposes to conform to the current presentation. These reclassifications have no impact on the previously reported loss. |
Use of Estimates | USE OF ESTIMATES The preparation of financial statements in conformity with US Generally Accepted Accounting Principles ("US GAAP"), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to stock-based compensation expense, impairment of long-lived assets, the determination of the economic useful life of property and equipment, income taxes and valuation allowances against net deferred tax assets. Management bases its estimates on historical experience or on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates. |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, the Company considers all highly liquid instruments with original maturities of three months or less when purchased to be cash equivalents. Included in cash and cash equivalents are demand deposits and money market accounts. |
Concentration of Credit Risk | CONCENTRATIONS OF CREDIT RISK The Company maintains its cash and cash equivalents in financial institutions located in the United States and Israel. At times, the Company’s cash and cash equivalent balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced any losses in such accounts. As of December 31, 2015 and 2014 , substantially all of the Company’s cash and cash equivalents are uninsured. During 2015 , revenues generated by the Company were derived from three license agreements that the Company entered into with third parties. Revenue for the year ended December 31, 2014 was from one license agreement, which resulted in an accounts receivable balance. See “Note 8 - License, Settlement and Release Agreement.” |
Allowance for Doubtful Accounts | ALLOWANCE FOR DOUBTFUL ACCOUNTS The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company does not currently require any collateral for accounts receivable. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The Company did not record an allowance for doubtful accounts as of December 31, 2015 and 2014, respectfully. Bad debt expense for the years ended December 31, 2015 and 2014 was not material. |
Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the related assets, which range from 3 to 7 years. Leasehold improvements are amortized on the straight-line method over the shorter of the remaining lease term or the estimated useful economic lives of the related assets using the straight-line method. The costs of additions and betterments are capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. |
Patents | PATENTS The Company owns or possesses licenses to use its patents. The Company’s patent costs were fully amortized prior to January 1, 2014. The costs of maintaining patents are expensed as incurred. Patents as of December 31, 2015 and 2014 are as follows : As of December 31, (In thousands) 2015 2014 Patents $ 18,052 $ 18,052 Less: accumulated amortization (18,052 ) (18,052 ) Total $ — $ — |
Investments | INVESTMENTS Investments in common and preferred stock in which the Company has significant influence, but less than a controlling voting interest, are accounted for using the equity method and are classified as non-current assets. Significant influence is presumed to exist when the Company holds more than 20% of the investee’s voting instruments. Other investments that are not controlled, and over which the Company does not have the ability to exercise significant influence are accounted for under the cost method. All of the Company’s investments as of December 31, 2015 and 2014 are accounted for under the cost method. |
Impairment of Long-Lived Assets | IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets, such as property and equipment are evaluated for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The carrying amount of a long lived asset is not recoverable if it exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset. The amount of impairment loss, if any, is measured as the difference between the carrying value of the asset and its estimated fair value. Fair value is estimated based on the best information available and by making necessary estimates, judgments and projections. For purposes of these tests, long-lived assets must be grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. As of December 31, 2015 , the Company has not identified any impairments. |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS The reported amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate their fair value due to their short maturities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. These fair value measurements apply to all financial instruments that are measured and reported on a fair value basis. Where available, fair value is based on observable market prices or is derived from such prices. The Company uses the market approach valuation technique to value its investments. The market approach uses prices and other pertinent information generated from market transactions involving identical or comparable assets or liabilities. The types of factors that the Company may take into account in fair value pricing the investments include available current market data, including relevant and applicable market quotes. Based on the observability of the inputs used in the valuation techniques, financial instruments are categorized according to the fair value hierarchy, which ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 - Observable inputs such as quoted prices in active markets. Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the assignment of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. |
Revenue Recognition | REVENUE RECOGNITION Revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product or service has occurred, all obligations have been performed pursuant to the terms of the agreement, the sales price is fixed or determinable, and collectability is reasonably assured. Revenue results from grants of licenses to its patented cyber-security technology and settlements reached from legal enforcement of the Company’s patent rights. The Company does not grant, at this time, technology or software end-user licenses. Revenue is recognized when the arrangement with the licensee has been signed and the license has been delivered and made effective, provided license fees are fixed or determinable and collectability is reasonably assured. The fair value of licenses achieved is recognized as revenue. The amount of consideration received upon any settlement or judgment is allocated to each element of the settlement based on the fair value of each element. Elements related to licensing agreements and royalty revenues, is recognized as revenue in the consolidated statement of operations. Elements that are not related to license agreements and royalty revenue in nature will be reflected as a separate line item within the Other Income section of the consolidated statements of operations. Elements provided in either settlement agreements or judgments include, the value of a license, legal release, and interest. When settlements or judgments are achieved at discounts to the fair value of a license, the Company allocates the full settlement or judgment, excluding specifically named elements as mentioned above, to the value of the license agreement or royalty revenue under the residual method relative to full license fair value prior to the discount. Legal release as part of a settlement agreement is recognized as a separate line item in the consolidated statements of operations when value can be allocated to the legal release. When the Company reaches a settlement with a defendant, no value is allocated to the legal release since the existence of a settlement removes legal standing to bring a claim of infringement, and without a legal claim, the legal release has no economic value. The element that is applicable to interest income will be recorded as a separate line item in Other Income. |
Research and Development Expense | RESEARCH AND DEVELOPMENT EXPENSE The Company expenses the cost of research and development as incurred. Research and development expenses consist primarily of professional services costs associated with the development of mobile security application products. |
Software Development Costs | SOFTWARE DEVELOPMENT COSTS Software development costs are expensed as incurred. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Company’s products are released soon after technological feasibility has been established. Software development costs incurred subsequent to achievement of technological feasibility were not material, and were expensed as incurred during the years ended December 31, 2015 and 2014. |
Foreign Currency | FOREIGN CURRENCY Foreign currency denominated assets and liabilities of foreign subsidiaries, where the local currency is the functional currency, are translated into U.S. dollars using the exchange rates in effect at the balance sheet dates, and income and expenses are translated using average exchange rates during the period. Foreign currency translation gains (losses) were immaterial for the years ended December 31, 2015 and 2014. Foreign currency transaction gains (losses) were immaterial for the years ended December 31, 2015 and 2014, and are included as general and administrative expense, in the accompanying consolidated statements of operations. |
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company measures compensation cost for all employee stock-based awards at their fair values on the date of grant. Stock-based awards issued to non-employees are measured at their fair values on the date of grant, and are re-measured at each reporting period through their vesting dates. When a non-employee becomes an employee and continues to vest in the award, the fair value of the individual’s award is re-measured on the date that he becomes an employee, and then is not subsequently re-measured at future reporting dates. The fair value of stock based awards is recognized as expense over the service period, net of estimated forfeitures, using the straight-line method for stock options and restricted stock. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock-based awards. |
Net Loss Per Common Share | NET LOSS PER COMMON SHARE Basic net loss per common share is based upon the weighted-average number of common shares outstanding. Diluted net loss per common share is based on the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding. Potentially dilutive common shares from employee equity plans and warrants are determined by applying the treasury stock method to the assumed exercise of warrants and share options and were excluded from the computation of diluted net loss per share because their inclusion would be anti-dilutive and consist of the following: December 31, 2015 2014 Stock Options 1,510,832 1,430,559 Restricted Stock Units 408,710 374,504 Total 1,919,542 1,805,063 |
Income Taxes | INCOME TAXES The Former Parent files its consolidated income tax returns in the U.S. federal jurisdiction and has filed consolidated income tax returns in the state of California through 2010. The Former Parent’s federal income tax returns for tax years after 2010 remain subject to examination by the federal tax authorities. The Former Parent did not file separate income returns for its wholly-owned subsidiary. The Former Parent’s state income tax returns for tax years after 2010 remain subject to examination by the state tax authorities. Since 2013, the Company files consolidated income tax returns in the U.S. federal jurisdiction and is headquartered in California, formerly in New York. The federal and state income tax returns for the tax years 2013 and after remain subject to examination for federal and state taxes. The Company will be filing state income tax returns for California and New York. The Company accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be computed annually for temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The income tax provision or benefit is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. The benefit of tax positions taken or expected to be taken in income tax returns are recognized in the financial statements if such positions are more likely than not of being sustained. As of December 31, 2015 and 2014 , an immaterial or no liability for unrecognized tax benefits was required to be reported. The Company does not expect its unrecognized tax benefit position to change during the next twelve months. The Company’s policy is to classify assessments, if any, for tax-related interest as interest expense and penalties as general and administrative expenses. There were no amounts accrued for penalties or interest as of, or during the years ended December 31, 2015 and 2014 . |
Recently Issued Accounting Pronouncements | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-9”) , which amends the existing accounting standards for revenue recognition. ASU 2014-9 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled to when products and services are transferred to customers. ASU 2014-9 will be effective for the Company beginning in its first quarter of 2018. Early adoption is permitted commencing January 1, 2017. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements. In February, 2015, FASB issued ASU No. 2015-02 “Consolidation (Topic 810): Amendments to the Consolidation Analysis” that amends the current consolidation guidance. The amendments affect both the variable interest entity and voting interest entity consolidation models. The new guidance is effective for the Company beginning January 1, 2016, with early adoption permitted. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements. In August 2015, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes to simplify the presentation of deferred income taxes. The amendments in this update require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. The Company has elected to early adopt ASU 2015-17 as of the beginning of our fourth quarter ended December 31, 2015 on a prospective basis. There is no impact to the balance sheet amounts as a result of early adoption. In February, 2016, FASB issued ASU No. 2016-02 “Leases” that requires a lessee to recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The new guidance is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect of the standard on its consolidated financial statements and related disclosures. Other recent accounting standards that have been issued or proposed by FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Organization and Operations (Ta
Organization and Operations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Loss from discontinued operations | Loss from the discontinued operations was as per the following table: 2014 Revenue $ 1,300 Expenses (1,623 ) Loss from discontinued operations (323 ) Loss on disposal (1,626 ) Net Loss from discontinued operations $ (1,949 ) |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of patents | Patents as of December 31, 2015 and 2014 are as follows : As of December 31, (In thousands) 2015 2014 Patents $ 18,052 $ 18,052 Less: accumulated amortization (18,052 ) (18,052 ) Total $ — $ — |
Summary of Antidilutive Securities | Potentially dilutive common shares from employee equity plans and warrants are determined by applying the treasury stock method to the assumed exercise of warrants and share options and were excluded from the computation of diluted net loss per share because their inclusion would be anti-dilutive and consist of the following: December 31, 2015 2014 Stock Options 1,510,832 1,430,559 Restricted Stock Units 408,710 374,504 Total 1,919,542 1,805,063 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | The components of property and equipment were as follows (in thousands): For the Years Ended December 31, 2015 2014 (In thousands) Office equipment leasehold improvements and furniture $ 325 $ 84 Less accumulated depreciation (68 ) (18 ) Property and equipment $ 257 $ 66 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Schedule of Investments | The following is a summary of the Company’s investments: Venture Capital Fund Balance - January 1, 2014 $ 500 Investment made during 2014 500 Balance - December 31, 2014 1,000 Proceeds retained and reinvested in fund 445 Investment made during 2015 750 Balance - December 31, 2015 $ 2,195 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The following table sets forth the Company’s aggregate future minimum payments under its operating lease commitments as of December 31, 2015 (in thousands): Years ending December 31, 2016 $ 787 2017 782 2018 458 Total $ 2,027 Future minimum lease payments to be received under the sublease agreements as of December 31, 2015 are as follows (in thousands): Years ending December 31, New York Menlo Park Total 2016 $ 160 $ 188 $ 348 2017 165 178 343 2018 127 — 127 $ 452 $ 366 $ 818 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | The following is a summary of stock option activity during the years ended December 31, 2015 and 2014 : Number of Options Outstanding Weighted Average Exercise Price Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (thousands) Outstanding – December 31, 2013 1,625,476 $ 1.76 Options granted 25,000 5.68 Options exercised 79,645 1.66 Options forfeited 140,272 — Options expired — — Outstanding – December 31, 2014 1,430,559 $ 1.84 Options granted 182,500 1.47 Options exercised 32,227 2.09 Options forfeited 70,000 2.61 Options expired — — Outstanding – December 31, 2015 1,510,832 $ 1.63 7.13 $ — Exercisable – December 31, 2015 1,198,204 $ 1.63 6.73 $ — Exercisable – December 31, 2014 945,012 $ 1.66 9.38 $ 974 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The Company estimates the fair values of stock options using the Black-Scholes option-pricing model on the date of grant. For the years ended December 31, 2015 and 2014 , the assumptions used in the Black-Scholes option pricing model, which was used to estimate the grant date fair value per option, were as follows, 2015 2014 Employee Grants Non-Employee Grants Employee Grants Non-Employee Grants Weighted-average Black-Scholes option pricing model assumptions: Volatility 90.99 % 61.10 % 50.70 % 57.78 % Expected term (in years) 6 6 5 10 Risk-free rate 1.49 % 0.71 % 1.00 % 2.90 % Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 % Weighted average grant date fair value per share $ 1.47 $ 1.44 $ 0.82 $ 0.84 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | The following is a summary of non-vested RSUs award activity for the year ended December 31, 2015 and 2014 : 2015 2014 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Non-vested 374,504 $ 5.08 — $ — Shares granted 240,000 2.29 374,504 5.08 Shares vested 160,286 1.58 — — Shares forfeited 45,508 4.10 — — Non-vested 408,710 $ 2.66 374,504 $ 5.08 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of Income (Loss) Before Income Taxes From Continuing Operations | The domestic and foreign components of loss before income taxes from continuing operations for the years ended December 31, 2015 and 2014 are as follows For the Years Ended December 31, 2015 2014 (in thousands) Domestic $ (11,996 ) $ (8,525 ) Foreign (601 ) — $ (12,597 ) $ (8,525 ) |
Schedule of Components of Income Tax Expense (Benefit) | The provisions for income tax for the years ended December 31, 2015 and 2014 , consist of the following: For the Years Ended December 31, 2015 2014 (in thousands) Federal: Current $ — $ — Deferred (3,868 ) (3,045 ) State: Current 5 5 Deferred 488 (738 ) Foreign: Current — — Deferred (159 ) — (3,534 ) (3,778 ) Change in valuation allowance 3,539 3,783 Income tax provision $ 5 $ 5 |
Schedule of Effective Income Tax Rate Reconciliation | The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense (benefit) as follows: For the Years Ended December 31, 2015 2014 U.S. Federal statutory rate 34 % 34 % State rate, net of federal benefit 1.3 % 5.8 % Permanent differences: Benefit of NOL carry back 0 % 0 % Other (1.5 )% (0.1 )% Change in valuation allowance (33.9 )% (39.8 )% Income tax provision (0.1 )% (0.1 )% |
Schedule of Deferred Tax Assets and Liabilities | The approximate tax effects of temporary differences, which give rise to significant deferred tax assets and liabilities, are as follows: As of December 31, 2015 2014 Deferred tax assets Net operating losses $ 9,666 $ 5,050 Stock-based compensation 890 984 Intangible assets 3,752 4,718 Other 50 67 Total deferred tax assets 14,358 10,819 Valuation allowance (14,358 ) (10,819 ) Deferred tax asset, net of valuation allowance — — Net deferred tax liability $ — $ — |
Organization and Operations - A
Organization and Operations - Additional Information (Details) $ in Thousands | Dec. 04, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($)business_line | Dec. 31, 2014USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of business lines | business_line | 4 | |||
Proceeds from sale of membership interests | $ 0 | $ 675 | ||
Loss on disposal of Converted Organics net of tax | $ 0 | (1,626) | ||
Converted Organics, Inc | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of membership interests | $ 675 | |||
Loss on disposal of Converted Organics net of tax | $ 1,600 | $ (1,626) |
Organization and Operations - L
Organization and Operations - Loss on Disposal (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Loss from discontinued operations | $ 0 | $ (323) | |
Loss on disposal | 0 | (1,626) | |
Net Loss from discontinued operations | $ 0 | (1,949) | |
Converted Organics, Inc | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | 1,300 | ||
Expenses | (1,623) | ||
Loss from discontinued operations | (323) | ||
Loss on disposal | $ 1,600 | (1,626) | |
Net Loss from discontinued operations | $ (1,949) |
Liquidity - Additional Informat
Liquidity - Additional Information (Details) $ in Millions | Jan. 13, 2017USD ($) |
Forecast | |
Finite-Lived Intangible Assets [Line Items] | |
License revenue | $ 3.7 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Patents (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||
Patents | $ 18,052 | $ 18,052 |
Less: accumulated amortization | (18,052) | (18,052) |
Total | $ 0 | $ 0 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Antidilituve Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,919,542 | 1,805,063 |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,510,832 | 1,430,559 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 408,710 | 374,504 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 7 years |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Office equipment leasehold improvements and furniture | $ 325 | $ 84 |
Less accumulated depreciation | (68) | (18) |
Property and equipment | 257 | 66 |
Depreciation | 50 | 15,000 |
Expense for the disposal of assets | $ 34 | $ 0 |
Investments - Additional Inform
Investments - Additional Information (Details) - Venture Capital Funds - USD ($) $ in Thousands | Jun. 08, 2015 | Nov. 21, 2013 | Dec. 31, 2015 |
Investment [Line Items] | |||
Capital commitment | $ 5,000 | $ 3,300 | |
Percentage of limited partnership interest | 10.00% | ||
Cash distribution | $ 826 | ||
Gross entitlement | $ 1,271 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Investments [Roll Forward] | ||
Beginning Balance | $ 1,000 | |
Ending Balance | 2,195 | $ 1,000 |
Venture Capital Fund | ||
Investments [Roll Forward] | ||
Beginning Balance | 1,000 | 500 |
Investment made during period | 750 | 500 |
Proceeds retained and reinvested in fund | 445 | |
Ending Balance | $ 2,195 | $ 1,000 |
Commitments and Contingencies37
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 787 |
2,017 | 782 |
2,018 | 458 |
Total | $ 2,027 |
Commitments and Contingencies -
Commitments and Contingencies - Sublease Income (Details) | Dec. 31, 2015USD ($) |
Loss Contingencies [Line Items] | |
2,016 | $ 348 |
2,017 | 343 |
2,018 | 127 |
Total | 818 |
New York, New York | |
Loss Contingencies [Line Items] | |
2,016 | 160 |
2,017 | 165 |
2,018 | 127 |
Total | 452 |
Menlo Park, California | |
Loss Contingencies [Line Items] | |
2,016 | 188 |
2,017 | 178 |
2,018 | 0 |
Total | $ 366 |
Commitments and Contingencies39
Commitments and Contingencies - Additional Information (Details) - USD ($) | Oct. 12, 2015 | Jan. 07, 2015 | Mar. 20, 2014 | Oct. 01, 2013 | Dec. 31, 2015 | Dec. 31, 2014 |
Loss Contingencies [Line Items] | ||||||
Minimum lease payments | $ 2,027,000 | |||||
Future minimum sublease payments | 818 | |||||
Rent expense | 667,000 | $ 261,000 | ||||
Rental income | 132,000 | $ 0 | ||||
New York, New York | ||||||
Loss Contingencies [Line Items] | ||||||
Future minimum sublease payments | 452 | |||||
Menlo Park, California | ||||||
Loss Contingencies [Line Items] | ||||||
Future minimum sublease payments | 366 | |||||
Tel Aviv, Israel | ||||||
Loss Contingencies [Line Items] | ||||||
Initial annual rent | $ 30,000 | |||||
Minimum lease payments | 62,000 | |||||
Office space | New York, New York | ||||||
Loss Contingencies [Line Items] | ||||||
Term of lease (in years) | 5 years | |||||
Initial annual rent | 139,000 | |||||
Monthly rent installment | 12,000 | |||||
Minimum lease payments | 412,000 | |||||
Security deposit | $ 69,000 | |||||
Percentage of annual rent increase | 2.50% | |||||
Future minimum sublease payments | $ 452,000 | |||||
Office space | Menlo Park, California | ||||||
Loss Contingencies [Line Items] | ||||||
Initial annual rent | $ 165,000 | |||||
Minimum lease payments | $ 330,000 | |||||
Percentage of annual rent increase | 3.00% | |||||
Future minimum sublease payments | $ 366,000 | |||||
Office space | Palo Alto, California | ||||||
Loss Contingencies [Line Items] | ||||||
Initial annual rent | $ 425,000 | |||||
Minimum lease payments | 1,223,000 | |||||
Security deposit | $ 231,000 | |||||
Percentage of annual rent increase | 3.00% |
Litigation, Claims, and Asses40
Litigation, Claims, and Assessments - Additional Information (Details) - Patent Infringement $ in Millions | Mar. 23, 2016patent | Mar. 11, 2016inter_parts_review | Feb. 26, 2016patentinter_parts_review | Jan. 14, 2016patentinter_parts_review | Dec. 17, 2015patent | Dec. 10, 2015patent | Sep. 10, 2015inter_parts_review | Aug. 20, 2015inter_parts_review | Aug. 04, 2015USD ($) |
Blue Coat Systems, Inc. | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages awarded | $ | $ 39.5 | ||||||||
Number of patents asserted | 7 | ||||||||
Number of IPR's | 5 | ||||||||
Symantec Corp [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of IPR's | inter_parts_review | 11 | 8 | |||||||
Symantec Corp [Member] | Denied | Subsequent Event | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patents asserted | 10 | 8 | 5 | ||||||
Number of IPR's | inter_parts_review | 2 | 2 | 6 | ||||||
Palo Alto Networks, Inc. | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of patents asserted | 10 |
License, Settlement and Relea41
License, Settlement and Release Agreement - Additional Information (Details) $ in Thousands | Jan. 13, 2017USD ($) | Jan. 15, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 30, 2015USD ($) | Nov. 15, 2015USD ($) | Apr. 07, 2015USD ($)patent | Jan. 16, 2015USD ($) | Sep. 24, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Jan. 13, 2017USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2016USD ($) | Jul. 01, 2016USD ($) | Dec. 31, 2014USD ($) |
Patents | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
License revenue | $ 700 | ||||||||||||||
License fee receivable | $ 1,000 | $ 1,000 | |||||||||||||
Licensing Agreements | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Receivable related to license agreement | $ 2,000 | ||||||||||||||
License revenue | $ 5,000 | ||||||||||||||
License fee receivable | $ 8,000 | ||||||||||||||
License agreement installment | $ 2,000 | $ 3,000 | |||||||||||||
Legal fees | $ 800 | ||||||||||||||
United States-based third party | Licensing Agreements | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Sale of patent in license agreement | $ 3,650 | ||||||||||||||
Cash received from license agreement | 1,000 | ||||||||||||||
Receivable related to license agreement | 2,650 | ||||||||||||||
License revenue | $ 1,000 | ||||||||||||||
License fee receivable | $ 3,650 | ||||||||||||||
European-based third party | Patents | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Sale of patent in license agreement | $ 2,975 | ||||||||||||||
License revenue | $ 2,975 | ||||||||||||||
F-Secure Corporation | Patents | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Sale of patent in license agreement | $ 1,000 | ||||||||||||||
Cash received from license agreement | 700 | ||||||||||||||
Receivable related to license agreement | $ 300 | ||||||||||||||
Number of patents sold in license agreement | patent | 2 | ||||||||||||||
Forecast | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
License revenue | $ 3,700 | ||||||||||||||
Forecast | Licensing Agreements | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
License agreement installment | $ 1,000 | $ 2,000 | $ 3,000 | ||||||||||||
Forecast | United States-based third party | Licensing Agreements | |||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||
Receivable related to license agreement | $ 1,000 | $ 1,650 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Equity [Abstract] | ||
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Options Outstanding | ||
Options granted | 182,500 | |
Options exercised | 32,227 | |
Options forfeited | 70,000 | |
Options expired | 0 | |
Outstanding, Exercisable | 1,198,204 | 945,012 |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 1.84 | |
Options granted (in dollars per share) | 1.47 | |
Options exercised (in dollars per share) | 2.09 | |
Options forfeited (in dollars per share) | 2.61 | |
Options expired (in dollars per share) | 0 | |
Ending balance (in dollars per share) | 1.63 | $ 1.84 |
Weighted Average Exercise Price, Exercisable (in dollars per share) | $ 1.63 | $ 1.66 |
Average Remaining Contractual Life (in years) | 7 years 1 month 17 days | |
Average Remaining Contractual Life, Exercisable (in years) | 6 years 8 months 23 days | 9 years 4 months 17 days |
Aggregate Intrinsic Value, Outstanding | $ 0 | |
Aggregate Intrinsic Value, Exercisable | $ 0 | $ 974 |
Stock-Based Compensation - Valu
Stock-Based Compensation - Valuation Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | |
Employee Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 90.99% | 50.70% |
Expected term (in years) | 6 years | 5 years |
Risk-free rate | 1.49% | 1.00% |
Expected dividend yield | 0.00% | 0.00% |
Weighted average grant date fair value per share (in dollars per share) | $ 1.47 | $ 0.82 |
Non-Employee Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 61.10% | 57.78% |
Expected term (in years) | 6 years | 10 years |
Risk-free rate | 0.71% | 2.90% |
Expected dividend yield | 0.00% | 0.00% |
Weighted average grant date fair value per share (in dollars per share) | $ 1.44 | $ 0.84 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | ||
Non-vested, beginning balance | 374,504 | 0 |
Shares granted | 240,000 | 374,504 |
Shares vested | 160,286 | 0 |
Shares forfeited | 45,508 | 0 |
Non-vested, ending balance | 408,710 | 374,504 |
Weighted Average Grant Date Fair Value | ||
Weighted average grant date fair value, beginning balance (in dollars per share) | $ 5.08 | $ 0 |
Shares granted (in dollars per share) | 2.29 | 5.08 |
Shares vested (in dollars per share) | 1.58 | 0 |
Shares forfeited (in dollars per share) | 4.10 | 0 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ 2.66 | $ 5.08 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Jul. 10, 2014 | Dec. 31, 2013 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted (in shares) | 182,500 | 25,000 | ||
Compensation cost not yet recognized | $ 300 | |||
Compensation cost not yet recognized period (in years) | 8 years 8 months 12 days | |||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued under plan (in shares) | 408,710 | 374,504 | 0 | |
Stock-based compensation expense | $ 509 | $ 229 | ||
Shares granted (in shares) | 240,000 | 374,504 | ||
CEO | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares granted (in shares) | 200,000 | |||
Selling, General and Administrative Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 800 | $ 1,400 | ||
Global Share Option Plan and Israeli Sub-Plan | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock underlying options outstanding (in shares) | 1,489,532 | |||
2014 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized under plan (in shares) | 2,196,836 | |||
Shares available for issuance under plan (in shares) | 1,536,670 | |||
2014 Plan | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued under plan (in shares) | 374,504 |
Other Income - Additional Infor
Other Income - Additional Information (Details) - 2010 Litigation $ in Millions | 1 Months Ended | ||
Jan. 31, 2014USD ($) | Apr. 30, 2012USD ($)installment_paymentshares | Jun. 30, 2010defendent | |
Loss Contingencies [Line Items] | |||
Number of software technology companies filed against | defendent | 5 | ||
Sale of patent in license agreement | $ 3 | ||
Installment payment period (in years) | 18 months | ||
Number of installment payments related to license agreement | installment_payment | 3 | ||
Receivable related to license agreement | $ 1 | ||
Cash received from license agreement | $ 1 | ||
Third Party | |||
Loss Contingencies [Line Items] | |||
Contingency, net sales in excess of amount | $ 10 | ||
Number of shares issued in purchase of license (in shares) | shares | 2,951,786 | ||
Percentage of outstanding stock issued | 3.765% | ||
Value of shares issued in purchase of license | $ 8.3 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||
Ownership percentage | 50.00% | |
Chairman | Legal Services | ||
Related Party Transaction [Line Items] | ||
Legal fees | $ 227,781 | $ 258,000 |
Amounts due to firm | 13,000 | 100,000 |
Chief Financial Officer | Social Media and Investor Related Services | ||
Related Party Transaction [Line Items] | ||
Amounts due to firm | 4,000 | 0 |
Social media and investor related fees | $ 80,000 | $ 0 |
Income Tax - Components of Loss
Income Tax - Components of Loss Before Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (11,996) | $ (8,525) |
Foreign | (601) | 0 |
Loss from continuing operations before provision for income taxes | $ (12,597) | $ (8,525) |
Income Tax - Provision for Inco
Income Tax - Provision for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Federal: | ||
Current | $ 0 | $ 0 |
Deferred | (3,868) | (3,045) |
State: | ||
Current | 5 | 5 |
Deferred | 488 | (738) |
Foreign: | ||
Current | 0 | 0 |
Deferred | (159) | 0 |
Total Federal, State and Foreign | (3,534) | (3,778) |
Change in valuation allowance | 3,539 | 3,783 |
Income tax provision | $ 5 | $ 5 |
Income Tax - Effective Income T
Income Tax - Effective Income Tax Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
U.S. Federal statutory rate | 34.00% | 34.00% |
State rate, net of federal benefit | 1.30% | 5.80% |
Permanent differences: | ||
Benefit of NOL carry back | 0.00% | 0.00% |
Other | (1.50%) | (0.10%) |
Change in valuation allowance | (33.90%) | (39.80%) |
Income tax provision | (0.10%) | (0.10%) |
Income Tax - Deferred Tax Asset
Income Tax - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets | ||
Net operating losses | $ 9,666 | $ 5,050 |
Stock-based compensation | 890 | 984 |
Intangible assets | 3,752 | 4,718 |
Other | 50 | 67 |
Total deferred tax assets | 14,358 | 10,819 |
Valuation allowance | (14,358) | (10,819) |
Deferred tax asset, net of valuation allowance | 0 | 0 |
Net deferred tax liability | $ 0 | $ 0 |
Income Tax - Additional Informa
Income Tax - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards | $ 25,500 | $ 12,700 |
Valuation allowance | 14,358 | 10,819 |
Change in valuation allowance | 3,539 | 3,783 |
Discontinued Operations | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 418 | $ 418 |