Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 23, 2017 | Jun. 30, 2016 | |
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 | Smaller Reporting Company | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 23,139,216 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 32,138,779 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 13,678 | $ 6,101 |
Accounts receivable, net | 1,066 | 0 |
Prepaid expenses and other current assets | 292 | 322 |
Total current assets | 15,036 | 6,423 |
Property and equipment, net | 203 | 257 |
Investments | 2,745 | 2,195 |
Non-current assets | 321 | 325 |
Total Assets | 18,305 | 9,200 |
Current Liabilities: | ||
Accounts payable | 1,858 | 2,220 |
Accounts payable - related parties | 88 | 17 |
Accrued expenses | 1,832 | 450 |
Accrued income taxes | 3 | 9 |
Other liabilities - current | 33 | 32 |
Total current liabilities | 3,814 | 2,728 |
Other liabilities - long-term | 119 | 130 |
Total Liabilities | 3,933 | 2,858 |
Commitments and contingencies (Note 7) | ||
Redeemable Preferred Stock | ||
Series A preferred stock - $0.0001 par value, 83,502 shares and nil issued and outstanding at December 2016 and 2015, respectively (Liquidation preference of $13,778 at December 31, 2016) | 13,486 | 0 |
Stockholders’ Equity | ||
Preferred stock - $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding (which excludes 83,502 shares and nil Series A Redeemable Preferred Stock at December 31, 2016 and 2015, respectively) at December 31, 2016 and 2015 | 0 | 0 |
Common stock - $0.0001 par value; 80,000,000 shares authorized; 23,102,728 and 22,640,611 shares issued and outstanding at December 31, 2016 and 2015 | 2 | 2 |
Additional paid-in capital | 18,140 | 23,946 |
Accumulated deficit | (17,256) | (17,606) |
Total Stockholders’ Equity | 886 | 6,342 |
Total Liabilities and Stockholders’ Equity | $ 18,305 | $ 9,200 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 |
Common stock, shares issued (in shares) | 23,102,728 | 22,640,611 |
Common stock, shares outstanding (in shares) | 23,102,728 | 22,640,611 |
Series A Preferred Stock | ||
Series A preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Series A preferred stock, shares issued (in shares) | 83,502 | 0 |
Series A preferred stock, shares outstanding (in shares) | 83,502 | 0 |
Series A preferred stock, liquidation preference | $ 13,778 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Revenues | $ 18,387 | $ 4,687 |
Cost of revenues | 3,037 | 814 |
Gross profit | 15,350 | 3,873 |
Operating Expenses: | ||
Selling, general and administrative | 14,430 | 17,367 |
Research and development | 570 | 391 |
Total operating expenses | 15,000 | 17,758 |
Income / (loss) from operations | 350 | (13,885) |
Other Income | ||
Return on Investment | 0 | 1,271 |
Interest income | 0 | 12 |
Total other income | 0 | 1,283 |
Net Income / (Loss) | 350 | (12,602) |
Accretion of Series A preferred stock | (6,789) | 0 |
Net loss attributable to common stockholders | $ (6,439) | $ (12,602) |
Net loss per share applicable to common stockholders, basic and diluted (in dollars per share) | $ (0.28) | $ (0.56) |
Weighted average common shares outstanding, basis and diluted (in shares) | 22,837,263 | 22,548,932 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accum. Deficit |
Balance, beginning amount at Dec. 31, 2014 | $ 18,124 | $ 2 | $ 23,126 | $ (5,004) |
Balance, beginning shares at Dec. 31, 2014 | 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 | |||
Accretion of Series A preferred stock | 0 | |||
Net Income (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 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock based compensation expense | 872 | 872 | ||
Proceeds from exercise of stock options | 111 | 111 | ||
Proceeds from exercise of stock options, shares | 462,117 | |||
Accretion of Series A preferred stock | (6,789) | (6,789) | ||
Net Income (Loss) | 350 | 350 | ||
Balance, ending amount at Dec. 31, 2016 | $ 886 | $ 2 | $ 18,140 | $ (17,256) |
Balance, ending shares at Dec. 31, 2016 | 23,102,728 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows From Operating Activities | ||
Net Income (Loss) | $ 350 | $ (12,602) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Return on investment | 0 | (1,271) |
Depreciation | 63 | 50 |
Loss on disposal of Assets | 0 | 34 |
Stock-based compensation expense | 872 | 766 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,066) | 2,016 |
Prepaid expenses and other current assets | 30 | (210) |
Other non-current assets | 4 | (325) |
Accrued expenses | 1,382 | (350) |
Accounts payable | (362) | 545 |
Accounts payable - related parties | 71 | (83) |
Accrued income taxes | (6) | 9 |
Other liabilities | (10) | 162 |
Net Cash Provided by (used in) Operating Activities | 1,328 | (11,259) |
Cash Flows From Investing Activities | ||
Purchases of additional investment | (550) | (750) |
Proceeds from investment | 0 | 826 |
Purchase of property and equipment | (9) | (275) |
Net Cash Used in Investing Activities | (559) | (199) |
Cash Flows From Financing Activities | ||
Proceeds from the sale of Series A Preferred shares, net of issuance costs | 9,490 | 0 |
Redemption Series A Preferred shares | (2,793) | 0 |
Proceeds from exercise of stock options | 111 | 54 |
Net Cash Provided by Financing Activities | 6,808 | 54 |
Net Increase (Decrease in) Cash and Cash Equivalents | 7,577 | (11,404) |
Cash and Cash Equivalents - Beginning | 6,101 | 17,505 |
Cash and Cash Equivalents - Ending | 13,678 | 6,101 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid during the year for income taxes | 0 | 7 |
Non-cash investing and financing activities: | ||
Distribution of investment held by investee | 0 | 445 |
Accretion of Series A Preferred Stock | $ 6,789 | $ 0 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | ORGANIZATION AND OPERATIONS ORGANIZATION Finjan Holdings, Inc. (the “Company” or “Finjan Holdings”), a Delaware corporation, 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 Finjan Mobile security business and the Company’s CybeRisk advisory services were deemed immaterial for the years ended December 31, 2016 and 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 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. |
Liquidity
Liquidity | 12 Months Ended |
Dec. 31, 2016 | |
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 $9.7 million received subsequent to year end, as described in Note 15 and $3.3 million of licensing revenue to be received by January 3, 2018 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, 2016 | |
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 subsidiaries. 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, 2016 and 2015 , substantially all of the Company’s cash and cash equivalents are uninsured. During 2016 , revenues generated by the Company were derived from three license agreements that the Company entered into with third parties and existing agreements from 2014 and 2015 that had agreed upon future payment terms. Revenue for the year ended December 31, 2015 was from three license agreements. See “Note 9 - 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, 2016 and 2015, respectfully. Bad debt expense for the years ended December 31, 2016 and 2015 was nil. 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, 2016 and 2015 are as follows : As of December 31, 2016 2015 (in thousands) Patents $ 18,052 $ 18,052 Less: accumulated amortization (18,052 ) (18,052 ) Total $ — $ — INVESTMENTS 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, 2016 and 2015 are accounted for under the cost method. IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets 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 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, 2016, 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, 2016 and 2015. 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, 2016 and 2015. Foreign currency transaction gains (losses) were immaterial for the years ended December 31, 2016 and 2015, and are included as general and administrative expense, in the accompanying consolidated statements of operations. SERIES A PREFERRED STOCK The Company accounts for the redemption premium and issuance costs on its Series A Preferred stock by recognizing changes in the redemption value immediately as they occur and adjusting the carrying value of the security to equal the redemption value at the end of each reporting period. This method views the end of the reporting period as if it were also the redemption date for the security. 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, 2016 2015 Stock options 1,607,346 1,510,832 Restricted stock units 185,260 408,710 Total 1,792,606 1,919,542 INCOME TAXES 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, 2016 and 2015 , 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, 2016 and 2015 . RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. Subsequently, FASB issued ASUs in 2016 containing implementation guidance related to ASU 2014-09, including: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations; ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which is intended to clarify two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance; and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which contains certain practical expedients in response to identified implementation issues. The Company expects to adopt this guidance in the first quarter of fiscal 2018 and apply the modified retrospective approach. The Company is evaluating the impact of adopting this new accounting standard on its consolidated financial statements. 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 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. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, which for the Company will commence with the year beginning January 1, 2018, with early adoption permitted commencing January 1, 2017. The Company is currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” ASU No. 2016-15 clarifies and provides specific guidance on eight cash flow classification issues that are not currently addressed by current GAAP and thereby reduce the current diversity in practice. ASU No. 2016-15 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. This guidance is applicable to the Company's fiscal year beginning January 1, 2018. The Company is currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements. 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 our consolidated financial statements upon adoption. |
Accrued Expense
Accrued Expense | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expense | ACCRUED EXPENSE The components of accrued expenses are as below: For the Years Ended December 31, 2016 2015 (In thousands) Legal - licensing & litigation $ 1,195 $ 100 Legal - other — 146 Compensation 560 204 Other 77 — $ 1,832 $ 450 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT The components of property and equipment were as follows: For the Years Ended December 31, 2016 2015 (In thousands) Office equipment leasehold improvements and furniture $ 319 $ 325 Less accumulated depreciation (116 ) (68 ) Property and equipment $ 203 $ 257 Depreciation expense for the years ended December 31, 2016 and 2015 was approximately $63,000 and $50,000 , respectively. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 , $2.7 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, 2016 and 2015 . The following is a summary of the Company’s investments (in thousands): Venture Capital Fund Balance - January 1, 2015 $ 1,000 Investment made during 2015 750 Proceeds retained and reinvested in fund 445 Balance - December 31, 2015 2,195 Investment made during 2016 550 Balance - December 31, 2016 $ 2,745 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
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, NY 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, 2016 the total future minimum lease payments to be paid under the agreement, which expires in September 2018, was $266,000 . 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, 2016 the total future minimum lease payments to be received under the sublease agreement, which expires in September 2018, was $292,000 . 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, CA 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, 2016 the total future minimum lease payments to be paid under the agreement, which expires in November 2017, was $157,000 . In August 2015, the Company entered into a sublease agreement for its office space in Menlo Park, CA. As of December 31, 2016, the total future minimum lease payments to be received under the sub-lease agreement, which expires in November 2017, was $178,000 . On January 7, 2015, the Company entered into a sublease agreement to sublease office space in East Palo Alto, CA 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, 2016, the total future minimum lease payments to be paid under the agreement, which expires in September 2018 was $790,000 . On December 1, 2016, the Company entered into a monthly lease agreement in Tel Aviv, Israel, where it is conducting operations in support of CybeRisk. The annual rent is approximately $12,000 , payable in equal monthly installments, unless earlier terminated by either party in accordance with the lease. 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, 2016 (in thousands): Years ending December 31, 2017 $ 753 2018 458 Total $ 1,211 For the years ended December 31, 2016 and 2015, the rent expense was approximately $782,000 and $667,000 , respectively . Rental income for the years ended December 31, 2016 and 2015 was $349,000 and $132,000 , 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, 2016 are as follows (in thousands): Years ending December 31, New York Menlo Park Total 2017 $ 165 $ 178 $ 343 2018 127 — 127 $ 292 $ 178 $ 470 |
Litigation, Claims, and Assessm
Litigation, Claims, and Assessments | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Claims, and Assessments | LITIGATION, CLAIMS AND ASSESSMENTS A. United States District Court Actions Finjan, Inc. v. FireEye, Inc., Case No. 13-cv-03133SBA, (N.D. Cal) Finjan filed a patent infringement lawsuit against FireEye, Inc. (“FireEye”) 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, the action was placed off calendar until the U.S. Patent and Trademark Office ("USPTO") completed its administrative reexamination proceedings. On February 16, 2016, the USPTO issued an Ex Parte Reexamination Certificate confirming the validity of claims 1-8 and 16-27 of the ‘822 Patent. On May 31, 2016, 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 September 16, 2016, the USPTO issued an Ex Parte Reexamination Certificate confirming the validity of claims 1-7 and 28-33 of the ‘633 Patent. On October 4, 2016, the Court directed the parties that if FireEye intends to file a Renewed Motion to Stay, it must do so by November 4, 2016. On November 3, 2016, FireEye filed its Renewed Motion for Stay. Finjan's response to the motion was filed November 17, 2016, and FireEye filed a reply on November 23, 2016. The Court vacated the hearing on the Motion to stay scheduled for December 14, 2016 and stated that the Motion will be decided on the pleadings. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Blue Coat Systems, Inc., Case No. 13-cv-03999-BLF (N.D. Cal.) Finjan filed a patent infringement lawsuit against Blue Coat Systems, Inc., (“Blue Coat”) 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. 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 hearing, 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. On January 29, 2016, the Court taxed costs against Blue Coat. A hearing for the parties’ post-trial motions was held on April 28, 2016. On July 18, 2016, the Court issued an order upholding the jury’s verdict of infringement, validity, and damages, and denying Blue Coat’s motion to amend the Court’s findings of fact and conclusions of law, denying Blue Coat’s motion for judgment as a matter of law, granting Blue Coat’s motion to amend the judgment to show infringement under the doctrine of equivalents is moot for U.S. Patent Nos. 6,154,844, 6,804,780, and 6,965,968, denying Blue Coat’s motion for a new trial, denying Finjan’s motion for enhanced damages, granting Finjan’s motion for pre-and post-judgment interest, and denying Finjan’s motion for attorneys’ fees. Blue Coat filed a Notice of Appeal to the United States Court of Appeals for the Federal Circuit on August 17, 2016, and an Amended Notice of Appeal on August 22, 2016. On September 2, 2016, the parties submitted a joint stipulation for approval of a supersedeas bond and a stay of enforcement of the judgment pending the resolution of Blue Coat’s appeal. On September 7, 2016, the Court approved Blue Coat’s bond in the amount of $40,086,172.78 . Blue Coat filed its Opening Appellant Brief on December 20, 2016, and appealed the patent eligibility of U.S. Patent No. 6,154,844, infringement of U.S. Patent Nos. 6,154,844, 6,965,968, and 7,418,731, and the jury’s damages award. Finjan filed its Response Brief on January 30, 2017. Blue Coat filed its Reply Appeal Brief on February 13, 2017. 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. Finjan, Inc. v. Sophos Inc., Case No. 14-cv-01197-WHO (N.D. Cal.) Finjan filed a patent infringement lawsuit against Sophos Inc. (“Sophos”) 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. 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. On May 24, 2016, the Court issued an order on the parties’ motions to strike, motions for summary judgment, and discovery matters. In its Order, the Court granted Sophos’ motion for summary judgment of non-infringement for U.S. Patent Nos. 7,757,289 and 7,613,918, denied the remainder of Sophos’ motion for summary judgment, denied Finjan’s motion for summary judgment of infringement for U.S. Patent Nos. 7,613,926 and 8,677,494, granted Finjan’s motion for summary judgment that certain prior art references were not publicly accessible, granted Finjan’s motion to strike in part to exclude certain prior art, granted Sophos’s motion to strike in part to exclude portions of Finjan’s expert reports on infringement, and deferred ruling on Finjan’s motion for summary judgment of validity for U.S. Patent Nos. 8,141,154, 8,677,494, 6,804,780, 8,154,844 and 7,613,926 after reviewing supplemental filings to be submitted with the parties’ pre-trial filings. The Court also precluded Sophos from relying on documents that were produced after the close of fact discovery. A mandatory settlement conference was held on July 25, 2016 with no settlement. On August 26, 2016, the parties stipulated to withdrawing allegations in the case, including Finjan’s claim of infringement of U.S. Patent No. 8,566,580. Trial for this action took place from September 6, 2016 through September 21, 2016. On September 21, 2016, 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 Sophos literally infringed U.S. Patent Nos. 6,154,844; 8,677,494; 6,804,780; 7,613,926 and 8,141,154 and awarded Finjan $15 million in damages. The jury found that Sophos did not willfully infringe Finjan’s patents. On October 31, 2016, the Court entered Judgment in favor of Finjan. Sophos filed post-trial motions on December 20, 2016, asking the Court to overturn jury’s determination and to find that there was no infringement, that U.S. Patent Nos. 6,154,844 and 8,677,494 are not patent eligible, the damages were improper, and that collateral estoppel should apply, or, in the alternative, grant a new trial. The Court held a hearing on the post-trials motions on January 18, 2017, and on March 14, 2017, the Court issued an order denying Sophos’ request to overturn the jury’s determination and to find that there was no infringement, held that U.S. Patent Nos. 6,154,844 and 8,677,494 are patent eligible, that damages were proper, that collateral estoppel was not applicable, and denied the request for a new trial. The Court also granted Finjan’s request for pre- and post-judgment interest. Finjan has not received any revenue from Sophos with respect to this lawsuit. There can be no assurance that Finjan will be successful in collecting the full amount of the jury award. Finjan, Inc. v. Blue Coat Systems LLC, Case No. 5:15-cv-03295-BLF (N.D. Cal.) Finjan filed a second patent infringement lawsuit against Blue Coat Systems LLC (“Blue Coat”) 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 (collectively, the “asserted patents”), 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. On December 15, 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 Inter Partes review (“IPR”) on five of seven asserted patents, and Ex Parte Reexamination requests for two asserted patents, filed previously by other defendants. A case management conference was held on December 17, 2015. On March 1, 2016 Finjan filed an amended Complaint to add existing Finjan U.S. Patent No. 9,141,786 and two newly issued Finjan U.S. Patent Nos. 9,189,621 (issued November 17, 2015) and 9,219,755 (issued December 22, 2015). On March 18, 2016, Blue Coat filed its Answer to the Amended Complaint and Counterclaims with Jury Demand. On April 8, 2016, Finjan filed its Answer to Blue Coat’s Counterclaims. On April 28, 2016, the Court held a hearing on Blue Coat’s motion to stay. On June 10, 2016, Finjan notified the Court on the status of the IPR and Ex Parte Reexamination proceedings for the asserted patents. On June 27, 2016, Finjan filed an Amended Answer to Blue Coat’s counterclaims, adding an affirmative defense of collateral estoppel. On June 27, 2016, Blue Coat filed an Amended Answer to Finjan’s Amended Complaint. On July 11, 2016, Finjan filed a motion to strike certain affirmative defenses in Blue Coat’s Amended Answer, and a reply to Blue Coat’s counterclaims. On July 26, 2016 the Court denied Blue Coat's motion to stay the second case pending proceedings before the USPTO and the United States Patent Trial and Appeal Board’s (“PTAB”). On July 28, 2016 Finjan filed a motion for preliminary injunction against Blue Coat. The preliminary injunction would prohibit Blue Coat from making, using, offering to sell or selling within the U.S. or import into the U.S. the Dynamic Real-Time Rating component of Blue Coat’s WebPulse product. On August 12, 2016, the parties filed a joint claim construction statement setting forth the parties’ undisputed and disputed claim terms. On August 19, 2016, the Court issued an Order setting a schedule for discovery relating to Finjan’s preliminary injunction motion. On August 23, 2016, Blue Coat filed a motion to strike Finjan’s infringement contentions on the grounds of collateral estoppel and res judicata, which Finjan opposed on September 27, 2016. On September 16, 2016, Blue Coat filed a motion for judgment on the pleadings under 35 U.S.C. § 101, claiming that the asserted claims of the ‘494 patent are ineligible for lack of patentable subject matter. The Court held a claim tutorial hearing on February 3, 2017, but cancelled the Markman hearing when Finjan and Blue Coat agreed to the meaning of all terms. The hearing on Finjan's Motion to Strike Blue Coat's Sixth, Ninth and Tenth Affirmative Defenses, Finjan's Motion for Preliminary Injunction and Blue Coat's Motion for Judgment on the Pleadings was heard on November 10, 2016. On November 14, 2016, the Court granted-in-part Finjan’s Motion to Strike Blue Coat’s Affirmative Defenses. On November 22, 2016, the Court denied Finjan’s Motion for a Preliminary Injunction. On December 13, 2016, the Court denied Blue Coat’s Motion for Judgment on the Pleadings. On January 31, 2017, the Court granted-in-part and denied-in-part Finjan’s motion to compel discovery from Blue Coat. On February 7, 2017, Finjan supplemented its infringement contentions. On February 2, 2017, the Court granted-in-part and denied-in-part Blue Coat’s Motion to Strike Finjan’s Infringement Contentions. Summary judgment motions are due to be filed with the Court by May 17, 2017, and a summary judgment hearing is scheduled for June 22, 2017. A pretrial conference is scheduled for October 5, 2017, and trial is scheduled for October 30, 2017. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Symantec Corporation., Case No. 14-cv-02998-HSG (N.D. Cal.) Finjan filed a patent infringement lawsuit against Symantec Corporation (“Symantec”) 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. 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 Markman Hearing was heard on June 29, 2015. On July 3, 2015, Symantec filed petitions for IPR before the 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 U.S. Patent No. 8,677,494 (IPR2015-01892). On March 29, 2016, the parties jointly requested the Court lift the stay, and on March 30, 2016, the Court lifted the stay. On April 15, 2016, the parties jointly submitted a proposed schedule to the Court for the remainder of the case. On August 1, 2016 the Court issued a Scheduling Order indicating a timeline to trial but without specifically identifying a trial date. On August 31, 2016, the parties filed a joint stipulation requesting that the Court set a date for a settlement conference. There was a settlement conference that took place on March 3, 2017, and the parties provided an update on settlement discussions on March 17, 2017. On August 25, 2016, Symantec filed an administrative motion requesting leave to submit supplemental authority regarding various claim construction issues and requesting the Court take judicial notice of statements made during and in connection with the IPR proceedings. Finjan opposed the motion on August 28, 2016. On August 24, 2016, Finjan filed a request that the Court take judicial notice of the PTAB’s construction of certain claim terms in connection with its denial to institute inter partes review with respect to U.S. Patent Nos. 7,613,926 and 8,677,494. On August 25, 2016, Finjan filed a request that the Court take judicial notice of the PTAB’s construction of certain claims in connection with its granting-in-part of inter partes review of U.S. Patent No. 8,677,494 and denial of inter partes review of U.S. Patent No. 7,613,926. Following a hearing on November 3, 2016, the Court granted the Motion and ordered the parties to file a joint statement by no later than November 11, 2016, proposing an expedited schedule for disclosures, briefs, and a Markman hearing if "deemed necessary by the Court". Finjan filed an opening supplemental claim construction brief on November 29, 2016, Symantec filed a responsive supplemental claim construction brief on December 13, 2016, and Finjan filed a reply brief on December 20, 2016. A supplemental Markman Hearing was held on January 20, 2017. The Court issued a Claim Construction Order on February 10, 2017. The Court issued an Order denying Symantec’s Motion to Strike Finjan’s Infringement Contention and Sanctions on February 15, 2017. A case management conference was held on February 21, 2017 to discuss the schedule of the case. On March 14, 2017, the Court issued an order scheduling summary judgment motions to be filed by September 22, 2017, the pretrial conference to be held on February 27, 2018, and a 10-day trial to commence on April 9, 2018. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Palo Alto Networks, Inc., Case No. 3:14-cv-04908 PJH (N.D. Cal.) Finjan filed a patent infringement lawsuit against Palo Alto Networks, Inc. (“Palo Alto Networks”) 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 an 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. On March 21, 2016, the PTAB instituted trial on claims 1-8, 10 and 11 of U.S. Patent No.8,141,154, and on April 20, 2016, the PTAB instituted trial on the same claims from a separate petition. On March 29, 2016, the PTAB instituted trial on U.S. Patent No. 8,225,408, claims 14 and 19 of U.S. Patent No. 7,647,633, and denied institution of inter partes review for U.S. Patent Nos. 7,058,822 and 7,418,731. On May 9, 2016, the PTAB denied institution of trial on U.S. Patent Nos. 7,613,926, 6,965,968, 6,804,780, and 7,613,918. On May 13, 2016, the PTAB instituted trial on U.S. Patent No. 8,677,494. On May 26, 2016, the Court ordered the stay to remain in effect until the PTAB’s final determination of the instituted IPRs. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v ESET, LLC et al., Case No. 3:16-cv-03731-JD (N.D. Cal.) Finjan filed a patent infringement lawsuit against ESET, LLC ("ESET, LLC") and ESET SPOL S.R.O. (“ESET SPOL”) (collectively "ESET") in the United States District Court for the Northern District of California on July 1, 2016, asserting that ESET infringes Finjan’s U.S. Patent Nos. 6,154,844, 6,804,780, 7,975,305, 8,079,086, 9,189,621, and 9,219,755, through the manufacture, use, importation, sale, and/or offer for sale of its products and services, including but not limited to, ESET ThreatSense, ESET Advanced Heuristic, ESET DNA Signature, Host-based Intrusion Prevention System (HIPS), and ESET LiveGrid technologies including ESET’S Home Protection, Small Office, and Business product lines and ESET Services. Finjan seeks entry of a judgment that ESET has infringed and is infringing the asserted 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. On July 14, 2016, this case was assigned to the Honorable James Donato in the San Francisco division. On July 27, 2016, ESET, LLC filed a motion to dismiss or stay this action on the grounds that ESET, LLC first filed a declaratory judgment action in the Southern District of California (ESET, LLC v. Finjan, Inc., Case No. 16-cv-01704 (S.D. Cal.)). A hearing was held on this motion on August 31, 2016, during which the Court stayed this matter pending the Southern District’s resolution of Finjan’s motion to dismiss ESET, LLC’s declaratory judgment action. On September 16, 2016, the Southern District dismissed ESET LLC’s declaratory judgment action without prejudice. On September 27, 2016, Finjan filed a notice of supplemental authority informing the Court that ESET’s declaratory judgment action in the Southern District of California was dismissed without prejudice and requesting that the Court lift the stay. A Case Management Conference was held on October 6, 2016, wherein the Court granted Finjan's request to lift the stay, referred the matter to a settlement conference, and ordered service of the Complaint on ESET's counsel on behalf of ESET SPOL under Federal Rules of Civil Procedure 4(f). On January 27, 2017, the Court ordered that this Case be transferred to the Southern District of California under 28 U.S.C. § 1404(a). This case was transferred to the Southern District of California on January 30, 2017 and was assigned to the Honorable Cathy Ann Bencivengo on February 8, 2017, Case No. 3-17-cv-00183 (S.D. Cal.). There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. ESET, LLC et al., Case No. 3:17-cv-00183 (S.D. Cal.) Finjan filed a patent infringement lawsuit against ESET, LLC (“ESET, LLC”) and ESET SPOL S.R.O. (“ESET SPOL”) (collectively, “ESET”) in the United States District Court for the Northern District of California on July 1, 2016 (Case No. 3:16-cv-03731-JD (N.D. Cal.)), which was transferred to the Southern District of California on January 31, 2017. This action is currently before the Honorable Cathy Ann Bencivengo. A Case Management Conference was held on March 20, 2017. On October 20, 2016, defendant ESET, LLC filed a motion to dismiss Finjan’s Complaint for failure to state a claim for patent infringement. On November 2, 2016, defendant ESET SPOL filed a motion to dismiss Finjan’s Complaint for lack of personal jurisdiction and for failure to state a claim for patent infringement. A hearing regarding ESET’s motions to dismiss was held on March 20, 2017. There can be no assurance that Finjan will be successful in settling or litigating these claims. ESET, LLC v. Finjan, Inc., Case No. 16-cv-01704 (S.D. Cal.) ESET, LLC (“ESET”) filed a Complaint for Declaratory Judgment against Finjan, Inc. (“Finjan”) in the United States District Court for the Southern District of California on July 1, 2016, asserting that there is an actual controversy between the parties to declare that ESET does not infringe any claim of U.S. Patent No. 7,975,305 (“the ‘305 Patent”). ESET sought an entry of judgment that it has not infringed any claim of the ’305 Patent, an injunction against Finjan from asserting any of the claims in the ‘305 Patent against ESET or any of its customers or suppliers, and a finding that the case is exceptional and an award of fees and costs under 35 U.S.C. § 285. On July 11, 2016, ESET filed an Amended Complaint for Declaratory Judgment, seeking entry of judgment that it does not inf |
License, Settlement and Release
License, Settlement and Release Agreement | 12 Months Ended |
Dec. 31, 2016 | |
License Settlement And Release Agreement [Abstract] | |
License, Settlement and Release Agreement | LICENSE, SETTLEMENT AND RELEASE AGREEMENT On December 28, 2016, Finjan entered into a Confidential Patent License Agreement (the “December 2016 License”) with F5 Networks, Inc. (“F5”). The December 2016 License provides for F5 to pay a license fee of $4.0 million in cash, which Finjan received on December 30, 2016. Finjan recognized all of the $4.0 million license as revenue as of December 31, 2016, 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 F5 a nonexclusive, irrevocable (except in the case of non-payment by F5), worldwide paid-up license under Finjan’s patents as specified in the December 2016 License. On September 21, 2016, following a two-week trial, a Jury in the Northern District of California returned a verdict that all five Finjan Patents were found literally infringed by Sophos, Inc. ("Sophos"). The jury verdict, deciding that Finjan was entitled to $15 million in damages for Sophos’ infringement. Finjan has not received any revenue from the lawsuit with Sophos. On June 30, 2016, Finjan entered into a Confidential Patent License Agreement (the “June 30, 2016 License”) with a European cloud-based network security firm (the “2016 European Licensee”). The June 30, 2016 License provides for the 2016 European Licensee to pay Finjan $565,000 in cash, which was paid on or about the time of execution of the June 30, 2016 License. Finjan recognized all of the $565,000 license as revenue as of December 31, 2016, 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 the 2016 European Licensee a nonexclusive, term license in the United States under Finjan’s U.S. patents as specified in the June 30, 2016 License. On June 3, 2016, Finjan entered into a Confidential Patent License, Settlement and Release Agreement (“June 3, 2016 License”) with Proofpoint, Inc. (“Proofpoint”). As part of the June 3, 2016 License, Case No. 3:15-cv-5808-HSG, entitled Finjan, Inc. v. Proofpoint, Inc. and Armorize Technologies, Inc., pending before the Honorable Haywood S. Gilliam, Jr. in the U.S. District Court for the Northern District of California, was dismissed with prejudice on June 7, 2016. The June 3, 2016 License provides for Proofpoint to pay Finjan the sum of $10.9 million in cash, in which $4.3 million was received on June 6, 2016, $3.3 million was received in December 28, 2016, and $3.3 million is payable on or before January 3, 2018. The Company recognized $7.6 million of the $10.9 million license as revenues as of December 31, 2016, 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 $3.3 million under the terms of the June 3, 2016 License will be recognized as revenue when the payment is due. In exchange for the foregoing and other valuable consideration, Finjan agreed to, subject to certain restrictions, limits and other conditions, grant Proofpoint a worldwide, non-royalty bearing, fully paid-up (as of the final payment), nonexclusive, perpetual, irrevocable (except in the case of non-payment by Proofpoint or other material breach) license under Finjan’s patents as specified in the June 3, 2016 License. Certain portions of the June 3, 2016 License are subject to Confidential Treatment pursuant to a Confidential Treatment request filed with the Securities and Exchange Commission (“SEC”) on August 8, 2016 and Confidential Treatment Order granted by the SEC on September 26, 2016. 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 was received on June 27, 2016, and $1.0 million was received on September 1, 2016. The Company recognized $1.0 million of the $3.65 million license as revenues as of December 31, 2015. The remaining balance of $2.65 million under the terms of the December 30, 2015 License was recognized as revenues as of December 31, 2016. 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 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 received on 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, recognized as revenues as of March 31, 2016. 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 received on January 14, 2016. The fourth and final installment of $1.0 million was received on 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, and was received on January 16, 2015. The January 2016 payment was recognized as revenue in 2016. At December 31, 2016, the fourth and final installment of $1.0 million was recognized as revenue and accounts receivable, and was received on January 13, 2017. |
Series A Preferred Stock
Series A Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
Temporary Equity Disclosure [Abstract] | |
Series A Preferred Stock | Series A Preferred Stock On May 6, 2016, Finjan entered into a Series A Preferred Stock Purchase Agreement with Halcyon LDRII, pursuant to which the Company agreed to issue to Halcyon LDRII in a private placement an aggregate of 102,000 shares of the Company’s Series A Preferred Stock Shares at a purchase price of $100.00 per share, for aggregate proceeds of $10.2 million . The closing of the Private Placement occurred on May 20, 2016. The Company incurred issuance costs of $0.7 million which are recorded as an offset to the redeemable preferred stock. The Series A Preferred Stock was accounted under Section 480-10-S99 - Distinguishing Liabilities from Equity (FASB Accounting Standards Codification 480) as amended by ASU 2009-04 - Accounting for Redeemable Equity Instruments (“ASU 2009-04”). Under ASU 2009-04, a redeemable equity security is to be classified as temporary equity if it is conditionally redeemable a) at a fixed or determinable price on a fixed or determinable date, b) at the option of the holder, or c) upon the occurrence of an event that is not solely within the control of the issuer. The Company’s financing is redeemable at the option of the holder. Therefore, the Company classified the Series A Preferred Stock as temporary equity in the consolidated balance sheet. The Series A Preferred Stock have redemption features that have a determinable price and determinable date based on the following liquidation preferences: The lesser of: • 2.8 x the original purchase price (OPP); or the following: • 1.5 x the OPP if redeemed within 90 days of closing; or • 1.65 x the OPP if redeemed between 90 and 360 days of closing; or • 1.75 x the OPP if redeemed between 360 days and 720 days of closing; or • Thereafter, 1.75 x the OPP plus 0.1 x the OPP for every 90 day period the preferred remains outstanding. The redemption feature is at the option of the holder and is defined in the Certificate of Designation as a percentage of certain revenues, which varies by type of revenue as well as date received. These revenues include monetary awards, damages, fees, recoveries, judgments in a suit, as well as monies received from gross licensing, royalty or similar revenue recovered from JVP related to Finjan’s investment in JVP. Such monetary awards are not solely within the control of Finjan. The increase in the redemption value is a deemed dividend that increases the carrying value of the Series A Preferred Stock to equal the redemption value at the end of each reporting period with an offsetting decrease to additional paid-in-capital. On July 1, 2016, the Company redeemed $2.6 million or 17,286 shares of the Series A Preferred stock; $1.7 million reduced the original recorded value of the Series A Preferred stock and $0.9 million reduced the accreted value. On October 3, 2016, the Company redeemed $0.2 million or 1,212 shares of the Series A Preferred stock; $0.1 million reduced the original recorded value of the Series A Preferred stock and $0.1 million reduced the accreted value. At December 31, 2016, the Series A Preferred stock was $13.5 million , net of redemptions and the Liquidation value was $13.8 million . Subsequent to year end, the Company redeemed $3.3 million or 20,303 shares of the Series A Preferred stock; $2 million reduced the original recorded value of the Series A Preferred stock and $1.3 million reduced the accreted value. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 | |
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. During 2015, the Company issued a total of 240,000 RSU's and options to purchase an aggregate of 182,500 share of our common stock. During 2016 the Company granted an aggregate of 295,001 options to purchase shares of our common stock to certain employees in connection with their employment with the Company. As of December 31, 2016, the remaining number of shares available for issuance under the 2014 Plan is 1,201,488 . Total stock-based compensation for stock options and restricted stock awards, of $0.9 million and $0.8 million was recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2016 and 2015 , 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, 2016 and 2015 : Number of Options Outstanding Weighted Average Exercise Price Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (thousands) 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 Outstanding – December 31, 2015 1,510,832 1.63 Options granted 295,001 1.12 Options exercised 67,000 0.76 Options forfeited 131,486 0.97 Outstanding – December 31, 2016 1,607,347 $ 0.83 7.07 $ — Exercisable – December 31, 2016 1,229,704 $ 0.77 6.48 $ — Exercisable – December 31, 2015 1,198,204 $ 1.63 6.73 $ — 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, 2016 and 2015 , 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: 2016 2015 Employee Grants Employee Grants Non-Employee Grants Weighted-average Black-Scholes option pricing model assumptions: Volatility 148.68 % 90.99 % 61.10 % Expected term (in years) 7 6 6 Risk-free rate 1.26 % 1.49 % 0.71 % Expected dividend yield 0.0 % 0.0 % 0.0 % Weighted average grant date fair value per share $ 1.15 $ 1.47 $ 1.44 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, 2016 , total compensation cost not yet recognized related to unvested stock options was approximately $0.7 million , which is expected to be recognized over a weighted-average period of 2.5 years. RESTRICTED STOCK UNITS The following is a summary of non-vested RSUs award activity for the year ended December 31, 2016 and 2015 : 2016 2015 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Non-vested 408,710 $ 2.66 374,504 $ 5.08 Shares granted 200,000 1.20 240,000 2.29 Shares vested 395,117 1.99 160,286 1.58 Shares forfeited 28,333 1.74 45,508 4.10 Non-vested 185,260 $ 2.67 408,710 $ 2.66 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, 2016 and 2015 , the Company recognized $0.7 million and $0.5 million , respectively of stock-based compensation expense related to the RSUs. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
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 $227,000 and $228,000 in legal fees to the firm during the years ended December 31, 2016 and 2015 , respectively. As of December 31, 2016 and 2015 the Company had balances due to this firm amounting to approximately $88,000 and $13,000 , respectively. The Company obtained 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 $22,000 and $80,000 in fees to the firm during the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016 and 2015, the Company has balances due to this firm amounting to $0 and $4,000 , respectively. The Company canceled this service agreement effective June 30, 2016. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax | INCOME TAX The domestic and foreign components of loss before income taxes from operations for the years ended December 31, 2016 and 2015 are as follows: For the Years Ended December 31, 2016 2015 (in thousands) Domestic $ 1,094 $ (12,001 ) Foreign (744 ) (601 ) $ 350 $ (12,602 ) The provisions for income tax for the years ended December 31, 2016 and 2015 , consist of the following and are included as general and administrative expense, in the accompanying consolidated statements of operations: For the Years Ended December 31, 2016 2015 (in thousands) Federal: Current $ — $ — Deferred 416 (3,868 ) State: Current 3 5 Deferred (380 ) 488 Foreign: Current — — Deferred (174 ) (159 ) (135 ) (3,534 ) Change in valuation allowance 138 3,539 Income tax provision $ 3 $ 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, 2016 2015 U.S. Federal statutory rate 34.0 % 34 % State rate, net of federal benefit 7.8 % 1.3 % Permanent differences: Change in tax rate (113.0 )% — % Deferred tax adjustment (19.1 )% — % Stock based compensation 28.9 % (1.1 )% Foreign tax rate difference 19.3 % (0.4 )% Other 3.0 % — % Change in valuation allowance 40.0 % (33.9 )% Income tax provision 0.9 % (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, 2016 2015 (in thousands) Deferred tax assets Net operating losses $ 10,032 $ 9,666 Stock-based compensation 949 890 Intangible assets 3,748 3,752 Other 77 50 Total deferred tax assets 14,806 14,358 Valuation allowance (14,497 ) (14,358 ) Deferred tax asset, net of valuation allowance 309 — Deferred tax liability (309 ) Net deferred tax liability $ — $ — As of December 31, 2016 and 2015 , the Company had NOL carryforwards of approximately $26.1 million and $25.5 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 for both years ended December 31, 2016 and 2015 . 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, 2016 and 2015 , is $0.1 million and $3.5 million , respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On March 2, 2017, Finjan, Inc., entered into a Confidential Patent License Agreement (the “March 2017 License Agreement”) with Veracode, Inc., a Delaware corporation (“Veracode”). Pursuant to the March 2017 License Agreement, Veracode will obtain a license to the Finjan patent portfolio and pay a license fee of $2.0 million in cash, which Finjan received on March 2, 2017. Such license does not grant Veracode any right to transfer, sublicense or grant any rights under the March 2017 License Agreement to a third party except as specifically provided under the March 2017 License Agreement. Such license also has certain provisions relating to certain unlicensed products of any company that acquires Veracode, or is acquired by Veracode or its affiliates, in which case additional license fees may apply. The specific terms of the March 2017 License Agreement are confidential. On March 24, 2017, Finjan Holdings, Inc., announced that Finjan, Inc., its wholly-owned subsidiary and Avast Software s.r.o., a company organized under the laws of the Czech Republic ("Avast"), have reached an agreement (the "March 2017 Agreement") that upon Avast's satisfaction of certain terms, Finjan will dismiss its breach of contract and patent infringement claims, filed in the U.S. District Court for the Northern District of California (Case No. 3:17-cv-00283-BLF), against Avast and its newly acquired subsidiary, AVG Technologies, with prejudice. Under the terms of the March 2017 Agreement, Avast is to pay Finjan $7.745 million in cash on or before March 24, 2017. Payment was received on March 24, 2017 and was recorded as revenue in the first quarter of 2017, in accordance with the Company's revenue recognition policy, as described in Note 3 of the Company's Financial Statements. As called for in the March 2017 Agreement, specific terms of the Agreement are confidential. The Company will redeem $3.9 million or 23,469 shares of the Series A Preferred stock in April 2017; $2.4 million reducing the original recorded value of the Series A Preferred stock and $1.5 million reducing the accreted value. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 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. |
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. |
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. |
Investments | INVESTMENTS 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, 2016 and 2015 are accounted for under the cost method. |
Impairment of Long-Lived Assets | IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets 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 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. |
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, 2016 and 2015. |
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, 2016 and 2015. Foreign currency transaction gains (losses) were immaterial for the years ended December 31, 2016 and 2015, and are included as general and administrative expense, in the accompanying consolidated statements of operations. |
Series A Preferred Stock | SERIES A PREFERRED STOCK The Company accounts for the redemption premium and issuance costs on its Series A Preferred stock by recognizing changes in the redemption value immediately as they occur and adjusting the carrying value of the security to equal the redemption value at the end of each reporting period. This method views the end of the reporting period as if it were also the redemption date for the security. |
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. |
Income Taxes | INCOME TAXES 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, 2016 and 2015 , 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. |
Recently Issued Accounting Pronouncements | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. Subsequently, FASB issued ASUs in 2016 containing implementation guidance related to ASU 2014-09, including: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations; ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which is intended to clarify two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance; and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which contains certain practical expedients in response to identified implementation issues. The Company expects to adopt this guidance in the first quarter of fiscal 2018 and apply the modified retrospective approach. The Company is evaluating the impact of adopting this new accounting standard on its consolidated financial statements. 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 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. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, which for the Company will commence with the year beginning January 1, 2018, with early adoption permitted commencing January 1, 2017. The Company is currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” ASU No. 2016-15 clarifies and provides specific guidance on eight cash flow classification issues that are not currently addressed by current GAAP and thereby reduce the current diversity in practice. ASU No. 2016-15 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. This guidance is applicable to the Company's fiscal year beginning January 1, 2018. The Company is currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements. 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 our consolidated financial statements upon adoption. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of patents | Patents as of December 31, 2016 and 2015 are as follows : As of December 31, 2016 2015 (in thousands) 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, 2016 2015 Stock options 1,607,346 1,510,832 Restricted stock units 185,260 408,710 Total 1,792,606 1,919,542 |
Accrued Expense (Tables)
Accrued Expense (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Components of Accrued Expense | The components of accrued expenses are as below: For the Years Ended December 31, 2016 2015 (In thousands) Legal - licensing & litigation $ 1,195 $ 100 Legal - other — 146 Compensation 560 204 Other 77 — $ 1,832 $ 450 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | The components of property and equipment were as follows: For the Years Ended December 31, 2016 2015 (In thousands) Office equipment leasehold improvements and furniture $ 319 $ 325 Less accumulated depreciation (116 ) (68 ) Property and equipment $ 203 $ 257 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments [Abstract] | |
Schedule of Investments | The following is a summary of the Company’s investments (in thousands): Venture Capital Fund Balance - January 1, 2015 $ 1,000 Investment made during 2015 750 Proceeds retained and reinvested in fund 445 Balance - December 31, 2015 2,195 Investment made during 2016 550 Balance - December 31, 2016 $ 2,745 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table sets forth the Company’s aggregate future minimum payments under its operating lease commitments as of December 31, 2016 (in thousands): Years ending December 31, 2017 $ 753 2018 458 Total $ 1,211 Future minimum lease payments to be received under the sublease agreements as of December 31, 2016 are as follows (in thousands): Years ending December 31, New York Menlo Park Total 2017 $ 165 $ 178 $ 343 2018 127 — 127 $ 292 $ 178 $ 470 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following is a summary of stock option activity during the years ended December 31, 2016 and 2015 : Number of Options Outstanding Weighted Average Exercise Price Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (thousands) 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 Outstanding – December 31, 2015 1,510,832 1.63 Options granted 295,001 1.12 Options exercised 67,000 0.76 Options forfeited 131,486 0.97 Outstanding – December 31, 2016 1,607,347 $ 0.83 7.07 $ — Exercisable – December 31, 2016 1,229,704 $ 0.77 6.48 $ — Exercisable – December 31, 2015 1,198,204 $ 1.63 6.73 $ — |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | For the years ended December 31, 2016 and 2015 , 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: 2016 2015 Employee Grants Employee Grants Non-Employee Grants Weighted-average Black-Scholes option pricing model assumptions: Volatility 148.68 % 90.99 % 61.10 % Expected term (in years) 7 6 6 Risk-free rate 1.26 % 1.49 % 0.71 % Expected dividend yield 0.0 % 0.0 % 0.0 % Weighted average grant date fair value per share $ 1.15 $ 1.47 $ 1.44 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The following is a summary of non-vested RSUs award activity for the year ended December 31, 2016 and 2015 : 2016 2015 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Non-vested 408,710 $ 2.66 374,504 $ 5.08 Shares granted 200,000 1.20 240,000 2.29 Shares vested 395,117 1.99 160,286 1.58 Shares forfeited 28,333 1.74 45,508 4.10 Non-vested 185,260 $ 2.67 408,710 $ 2.66 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 operations for the years ended December 31, 2016 and 2015 are as follows: For the Years Ended December 31, 2016 2015 (in thousands) Domestic $ 1,094 $ (12,001 ) Foreign (744 ) (601 ) $ 350 $ (12,602 ) |
Schedule of Components of Income Tax Expense (Benefit) | The provisions for income tax for the years ended December 31, 2016 and 2015 , consist of the following and are included as general and administrative expense, in the accompanying consolidated statements of operations: For the Years Ended December 31, 2016 2015 (in thousands) Federal: Current $ — $ — Deferred 416 (3,868 ) State: Current 3 5 Deferred (380 ) 488 Foreign: Current — — Deferred (174 ) (159 ) (135 ) (3,534 ) Change in valuation allowance 138 3,539 Income tax provision $ 3 $ 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, 2016 2015 U.S. Federal statutory rate 34.0 % 34 % State rate, net of federal benefit 7.8 % 1.3 % Permanent differences: Change in tax rate (113.0 )% — % Deferred tax adjustment (19.1 )% — % Stock based compensation 28.9 % (1.1 )% Foreign tax rate difference 19.3 % (0.4 )% Other 3.0 % — % Change in valuation allowance 40.0 % (33.9 )% Income tax provision 0.9 % (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, 2016 2015 (in thousands) Deferred tax assets Net operating losses $ 10,032 $ 9,666 Stock-based compensation 949 890 Intangible assets 3,748 3,752 Other 77 50 Total deferred tax assets 14,806 14,358 Valuation allowance (14,497 ) (14,358 ) Deferred tax asset, net of valuation allowance 309 — Deferred tax liability (309 ) Net deferred tax liability $ — $ — |
Organization and Operations - A
Organization and Operations - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2016business_line | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business lines | 4 |
Liquidity - Additional Informat
Liquidity - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 27, 2017 | Jan. 03, 2018 | |
Forecast | ||
Finite-Lived Intangible Assets [Line Items] | ||
License revenue | $ 3.3 | |
Subsequent Event | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cash received subsequent to year end | $ 9.7 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Patents (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Patents | $ 18,052 | $ 18,052 |
Less: accumulated amortization | (18,052) | (18,052) |
Total | $ 0 | $ 0 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Antidilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded form computation of earnings per share amount | 1,792,606 | 1,919,542 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded form computation of earnings per share amount | 1,607,346 | 1,510,832 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded form computation of earnings per share amount | 185,260 | 408,710 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)license_agreement | Dec. 31, 2015USD ($)license_agreement | |
Property, Plant and Equipment [Line Items] | ||
Number of license agreements generating revenue | license_agreement | 3 | 3 |
Bad debt expense | $ | $ 0 | $ 0 |
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 |
Accrued Expense (Details)
Accrued Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Legal - licensing & litigation | $ 1,195 | $ 100 |
Legal - other | 0 | 146 |
Compensation | 560 | 204 |
Other | 77 | 0 |
Total | $ 1,832 | $ 450 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Office equipment leasehold improvements and furniture | $ 319 | $ 325 |
Less accumulated depreciation | (116) | (68) |
Property and equipment | 203 | 257 |
Depreciation | $ 63 | $ 50 |
Investments - Additional Inform
Investments - Additional Information (Details) - Venture Capital Funds - USD ($) $ in Thousands | Jun. 08, 2015 | Nov. 21, 2013 | Dec. 31, 2016 |
Investment [Line Items] | |||
Capital commitment | $ 5,000 | $ 2,700 | |
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, 2016 | Dec. 31, 2015 | |
Investments [Roll Forward] | ||
Beginning Balance | $ 2,195 | |
Ending Balance | 2,745 | $ 2,195 |
Venture Capital Fund | ||
Investments [Roll Forward] | ||
Beginning Balance | 2,195 | 1,000 |
Investment made during period | 550 | 750 |
Proceeds retained and reinvested in fund | 445 | |
Ending Balance | $ 2,745 | $ 2,195 |
Commitments and Contingencies39
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 753 |
2,018 | 458 |
Total | $ 1,211 |
Commitments and Contingencies -
Commitments and Contingencies - Sublease Income (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Loss Contingencies [Line Items] | |
2,017 | $ 343 |
2,018 | 127 |
Total | 470 |
New York | |
Loss Contingencies [Line Items] | |
2,017 | 165 |
2,018 | 127 |
Total | 292 |
Menlo Park | |
Loss Contingencies [Line Items] | |
2,017 | 178 |
2,018 | 0 |
Total | $ 178 |
Commitments and Contingencies41
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | Dec. 01, 2016 | Jan. 07, 2015 | Mar. 10, 2014 | Sep. 09, 2013 | Dec. 31, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | ||||||
Minimum lease payments | $ 1,211 | |||||
Future minimum sublease payments | 470 | |||||
Rent expense | 782 | $ 667 | ||||
Rental income | 349 | $ 132 | ||||
New York, New York | ||||||
Loss Contingencies [Line Items] | ||||||
Future minimum sublease payments | 292 | |||||
Menlo Park, California | ||||||
Loss Contingencies [Line Items] | ||||||
Future minimum sublease payments | 178 | |||||
Tel Aviv, Israel | ||||||
Loss Contingencies [Line Items] | ||||||
Initial annual rent | $ 12 | |||||
Office space | New York, New York | ||||||
Loss Contingencies [Line Items] | ||||||
Term of lease (in years) | 5 years | |||||
Initial annual rent | $ 139 | |||||
Monthly rent installment | $ 12 | |||||
Minimum lease payments | 266 | |||||
Security deposit | $ 69 | |||||
Percentage of annual rent increase | 2.50% | |||||
Future minimum sublease payments | $ 292 | |||||
Office space | Menlo Park, California | ||||||
Loss Contingencies [Line Items] | ||||||
Initial annual rent | $ 165 | |||||
Minimum lease payments | 157 | |||||
Percentage of annual rent increase | 3.00% | |||||
Future minimum sublease payments | 178 | |||||
Office space | East Palo Alto, California | ||||||
Loss Contingencies [Line Items] | ||||||
Initial annual rent | $ 425 | |||||
Minimum lease payments | $ 790 | |||||
Security deposit | $ 231 | |||||
Percentage of annual rent increase | 3.00% |
Litigation, Claims, and Asses42
Litigation, Claims, and Assessments - Additional Information (Details) | Sep. 21, 2016USD ($) | Jul. 26, 2016patent | Mar. 11, 2016inter_parts_reviewpatent | Feb. 26, 2016inter_parts_reviewpatent | Jan. 14, 2016inter_parts_reviewpatent | Dec. 15, 2015inter_parts_reviewpatent | Dec. 10, 2015patent | Sep. 10, 2015inter_parts_review | Aug. 20, 2015inter_parts_review | Aug. 04, 2015USD ($) | Sep. 07, 2016USD ($) |
Finjan, Inc. v. Blue Coat Systems, Inc | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Damages awarded | $ | $ 39,500,000 | ||||||||||
Finjan, Inc. v. Sophos Inc | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Damages awarded | $ | $ 15,000,000 | ||||||||||
Finjan, Inc. v. Blue Coat Systems LLC | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of Inter Parts Review | inter_parts_review | 5 | ||||||||||
Number of patents asserted | 7 | ||||||||||
Finjan, Inc. v. Symantec Corp | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of Inter Parts Review | inter_parts_review | 11 | 8 | |||||||||
Finjan, Inc. v. Symantec Corp | Denied | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of Inter Parts Review | inter_parts_review | 2 | 2 | 6 | ||||||||
Number of patents asserted | 10 | 8 | 5 | ||||||||
Finjan, Inc. v. Palo Alto Networks, Inc | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of patents asserted | 10 | ||||||||||
Finjan, Inc. v. ESET, LLC | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of patents asserted | 6 | ||||||||||
Number of patents first-to-file | 5 | ||||||||||
Blue Coat Systems, Inc | Finjan, Inc. v. Blue Coat Systems, Inc | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Bond amount | $ | $ 40,086,172.78 |
License, Settlement and Relea43
License, Settlement and Release Agreement - Additional Information (Details) $ in Thousands | Jan. 13, 2017USD ($) | Dec. 28, 2016USD ($) | Sep. 21, 2016USD ($)patent | Sep. 01, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 27, 2016USD ($) | Jun. 06, 2016USD ($) | Jun. 03, 2016USD ($) | Mar. 31, 2016USD ($) | Jan. 14, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Apr. 22, 2015USD ($) | Apr. 07, 2015USD ($) | Jan. 16, 2015USD ($) | Sep. 24, 2014USD ($)installment_payment | Dec. 31, 2014USD ($) | Jan. 03, 2018USD ($) | Jan. 13, 2017USD ($) | Dec. 31, 2016USD ($) |
Licensing Agreements | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
License revenue | $ 5,000 | ||||||||||||||||||||
Receivable related to license agreement | $ 2,000 | ||||||||||||||||||||
License fee receivable | $ 8,000 | ||||||||||||||||||||
Number of installment payments | installment_payment | 4 | ||||||||||||||||||||
License agreement installment | $ 2,000 | $ 2,000 | $ 3,000 | ||||||||||||||||||
Legal fees | $ 800 | ||||||||||||||||||||
F5 Networks, Inc. | Licensing Agreements | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Sale of patent in license agreement | 4,000 | ||||||||||||||||||||
License revenue | 4,000 | ||||||||||||||||||||
European Cloud-Based Network Security Firm | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Sale of patent in license agreement | $ 565 | ||||||||||||||||||||
Proofpoint and Amorize Technologies | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Sale of patent in license agreement | $ 10,900 | ||||||||||||||||||||
License revenue | 7,600 | ||||||||||||||||||||
Cash received from license agreement | $ 3,300 | $ 4,300 | |||||||||||||||||||
Receivable related to license agreement | 3,300 | ||||||||||||||||||||
License fee receivable | 10,900 | ||||||||||||||||||||
United States-based third party | Licensing Agreements | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Sale of patent in license agreement | $ 3,650 | ||||||||||||||||||||
License revenue | $ 1,000 | $ 2,650 | |||||||||||||||||||
Cash received from license agreement | $ 1,000 | $ 1,650 | $ 1,000 | ||||||||||||||||||
License fee receivable | $ 3,650 | ||||||||||||||||||||
F-Secure Corporation | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Fully-paid, non-exclusive field of use license term (in years) | 2 years | ||||||||||||||||||||
F-Secure Corporation | Patents | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Sale of patent in license agreement | $ 1,000 | ||||||||||||||||||||
License revenue | $ 300 | $ 700 | |||||||||||||||||||
Cash received from license agreement | $ 300 | $ 700 | |||||||||||||||||||
License fee receivable | $ 1,000 | ||||||||||||||||||||
Forecast | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
License revenue | $ 3,300 | ||||||||||||||||||||
Forecast | Licensing Agreements | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
License agreement installment | $ 3,000 | ||||||||||||||||||||
Sophos Inc | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Number of patents asserted | patent | 5 | ||||||||||||||||||||
Damages awarded | $ 15,000 | ||||||||||||||||||||
Subsequent Event | Licensing Agreements | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
License agreement installment | $ 1,000 |
Series A Preferred Stock (Detai
Series A Preferred Stock (Details) - Series A Preferred Stock $ / shares in Units, $ in Millions | May 20, 2016USD ($) | May 06, 2016USD ($)$ / sharesshares | Dec. 31, 2016 |
Temporary Equity [Line Items] | |||
Multiplier of the OPP | 2.8 | ||
Multiplier of the OPP if redeemed within 90 days of closing | 1.5 | ||
Multiplier of the OPP if redeemed between 90 and 360 days of closing | 1.65 | ||
Multiplier of the OPP if redeemed between 360 and 720 days of closing | 1.75 | ||
Multiplier thereafter OPP for every 90 day period the preferred shares remain outstanding | 0.1 | ||
Private Placement | |||
Temporary Equity [Line Items] | |||
Shares issued (in shares) | shares | 102,000 | ||
Price per share (in dollars per share) | $ / shares | $ 100 | ||
Aggregate proceeds from private placement | $ 10.2 | ||
Issuance costs | $ 0.7 |
Series A Preferred Stock - Rede
Series A Preferred Stock - Redemption of Preferred Stock (Details) - USD ($) $ in Thousands | Oct. 03, 2016 | Jul. 01, 2016 | Mar. 27, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Temporary Equity [Line Items] | |||||
Temporary equity balance | $ 13,486 | $ 0 | |||
Series A Preferred Stock | |||||
Temporary Equity [Line Items] | |||||
Value of shares redeemed | $ 200 | $ 2,600 | |||
Number of shares redeemed (in shares) | 1,212 | 17,286 | |||
Reduction in the original recorded value of preferred stock | $ 100 | $ 1,700 | |||
Reduction in the accretive value of the preferred stock | $ 100 | $ 900 | |||
Temporary equity balance | 13,500 | ||||
Liquidation preference | $ 13,778 | ||||
Series A Preferred Stock | Subsequent Event | |||||
Temporary Equity [Line Items] | |||||
Value of shares redeemed | $ 3,300 | ||||
Number of shares redeemed (in shares) | 20,303 | ||||
Reduction in the original recorded value of preferred stock | $ 2,000 | ||||
Reduction in the accretive value of the preferred stock | $ 1,300 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2016vote$ / sharesshares | Dec. 31, 2015$ / sharesshares | |
Equity [Abstract] | ||
Common stock, shares authorized | shares | 80,000,000 | 80,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | shares | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Number of votes per common share | vote | 1 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Options Outstanding | ||
Outstanding, beginning (in shares) | 1,510,832 | 1,430,559 |
Options granted (in shares) | 295,001 | 182,500 |
Options exercised (in shares) | 67,000 | 32,227 |
Options forfeited (in shares) | 131,486 | 70,000 |
Outstanding, ending (in shares) | 1,607,347 | 1,510,832 |
Outstanding, Exercisable (in shares) | 1,229,704 | 1,198,204 |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 1.63 | $ 1.84 |
Options granted (in dollars per share) | 1.12 | 1.47 |
Options exercised (in dollars per share) | 0.76 | 2.09 |
Options forfeited (in dollars per share) | 0.97 | 2.61 |
Ending balance (in dollars per share) | 0.83 | 1.63 |
Exercisable (in dollars per share) | $ 0.77 | $ 1.63 |
Average Remaining Contractual Life (in years) | 7 years 25 days | |
Average Remaining Contractual Life, Exercisable (in years) | 6 years 5 months 23 days | 6 years 8 months 23 days |
Aggregate Intrinsic Value, Outstanding | $ 0 | |
Aggregate Intrinsic Value, Exercisable | $ 0 | $ 0 |
Stock-Based Compensation - Valu
Stock-Based Compensation - Valuation Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
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 | 148.68% | 90.99% |
Expected term (in years) | 7 years | 6 years |
Risk-free rate | 1.26% | 1.49% |
Expected dividend yield | 0.00% | 0.00% |
Weighted average grant date fair value per share (in dollars per share) | $ 1.15 | $ 1.47 |
Non-Employee Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 61.10% | |
Expected term (in years) | 6 years | |
Risk-free rate | 0.71% | |
Expected dividend yield | 0.00% | |
Weighted average grant date fair value per share (in dollars per share) | $ 1.44 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | ||
Non-vested, beginning balance (in shares) | 408,710 | 374,504 |
Shares granted (in shares) | 200,000 | 240,000 |
Shares vested (in shares) | 395,117 | 160,286 |
Shares forfeited (in shares) | 28,333 | 45,508 |
Non-vested, ending balance (in shares) | 185,260 | 408,710 |
Weighted Average Grant Date Fair Value | ||
Weighted average grant date fair value, beginning balance (in dollars per share) | $ 2.66 | $ 5.08 |
Shares granted (in dollars per share) | 1.20 | 2.29 |
Shares vested (in dollars per share) | 1.99 | 1.58 |
Shares forfeited (in dollars per share) | 1.74 | 4.10 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ 2.67 | $ 2.66 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 10, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend yield | 0.00% | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted (in shares) | 295,001 | 182,500 | ||
Compensation cost not yet recognized | $ 0.7 | |||
Compensation cost not yet recognized, period for recognition | 2 years 6 months | |||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued under plan (in shares) | 185,260 | 408,710 | 374,504 | |
Stock-based compensation expense | $ 0.7 | $ 0.5 | ||
Selling, General and Administrative Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 0.9 | $ 0.8 | ||
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) | 1,201,488 | |||
2014 Plan | Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued under plan (in shares) | 240,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Ownership percentage | 50.00% | |
Chairman | Legal Services | ||
Related Party Transaction [Line Items] | ||
Legal fees | $ 227,000 | $ 228,000 |
Amounts due to firm | 88,000 | 13,000 |
Chief Financial Officer | Social Media and Investor Related Services | ||
Related Party Transaction [Line Items] | ||
Amounts due to firm | 0 | 4,000 |
Social media and investor related fees | $ 22,000 | $ 80,000 |
Income Tax - Components of Loss
Income Tax - Components of Loss Before Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ 1,094 | $ (12,001) |
Foreign | (744) | (601) |
Income / (loss) before provision for income taxes | $ 350 | $ (12,602) |
Income Tax - Provision for Inco
Income Tax - Provision for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Federal: | ||
Current | $ 0 | $ 0 |
Deferred | 416 | (3,868) |
State: | ||
Current | 3 | 5 |
Deferred | (380) | 488 |
Foreign: | ||
Current | 0 | 0 |
Deferred | (174) | (159) |
Total Federal, State and Foreign | (135) | (3,534) |
Change in valuation allowance | 138 | 3,539 |
Income tax provision | $ 3 | $ 5 |
Income Tax - Effective Income T
Income Tax - Effective Income Tax Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
U.S. Federal statutory rate | 34.00% | 34.00% |
State rate, net of federal benefit | 7.80% | 1.30% |
Permanent differences: | ||
Change in tax rate | (113.00%) | 0.00% |
Deferred tax adjustment | (19.10%) | 0.00% |
Stock based compensation | 28.90% | (1.10%) |
Foreign tax rate difference | 19.30% | (0.40%) |
Other | 3.00% | 0.00% |
Change in valuation allowance | 40.00% | (33.90%) |
Income tax provision | 0.90% | (0.10%) |
Income Tax - Deferred Tax Asset
Income Tax - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets | ||
Net operating losses | $ 10,032 | $ 9,666 |
Stock-based compensation | 949 | 890 |
Intangible assets | 3,748 | 3,752 |
Other | 77 | 50 |
Total deferred tax assets | 14,806 | 14,358 |
Valuation allowance | (14,497) | (14,358) |
Deferred tax asset, net of valuation allowance | 309 | 0 |
Deferred tax liability | (309) | |
Net deferred tax liability | $ 0 | $ 0 |
Income Tax - Additional Informa
Income Tax - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards | $ 26,100 | $ 25,500 |
Valuation allowance | 14,497 | 14,358 |
Change in valuation allowance | 138 | 3,539 |
Discontinued Operations | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 418 | $ 418 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Mar. 24, 2017 | Mar. 02, 2017 | Oct. 03, 2016 | Jul. 01, 2016 | Apr. 30, 2017 | Mar. 27, 2017 |
Series A Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Value of shares redeemed | $ 200 | $ 2,600 | ||||
Number of shares redeemed (in shares) | 1,212 | 17,286 | ||||
Reduction in the original recorded value of preferred stock | $ 100 | $ 1,700 | ||||
Reduction in the accretive value of the preferred stock | $ 100 | $ 900 | ||||
Series A Preferred Stock | Forecast | ||||||
Subsequent Event [Line Items] | ||||||
Value of shares redeemed | $ 3,900 | |||||
Number of shares redeemed (in shares) | 23,469 | |||||
Reduction in the original recorded value of preferred stock | $ 2,400 | |||||
Reduction in the accretive value of the preferred stock | $ 1,500 | |||||
Subsequent Event | Series A Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Value of shares redeemed | $ 3,300 | |||||
Number of shares redeemed (in shares) | 20,303 | |||||
Reduction in the original recorded value of preferred stock | $ 2,000 | |||||
Reduction in the accretive value of the preferred stock | $ 1,300 | |||||
Veracode, Inc, | Licensing Agreements | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Sale of patent in license agreement | $ 2,000 | |||||
Avast Software s.r.o. | Subsequent Event | Finjan, Inc. v. Avast Software s.r.o. | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from Legal Settlements | $ 7,745 |