Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 06, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | FINJAN HOLDINGS, INC. | |
Entity Central Index Key | 1,366,340 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Trading Symbol | FNJN | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 27,707,329 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 33,395 | $ 13,678 |
Accounts receivable | 0 | 1,066 |
Prepaid expenses and other current assets | 543 | 292 |
Total current assets | 33,938 | 15,036 |
Property and equipment, net | 167 | 203 |
Investment | 2,618 | 2,745 |
Intangible assets, net | 8,279 | 0 |
Other long-term assets | 322 | 321 |
Total assets | 45,324 | 18,305 |
Current liabilities: | ||
Accounts payable | 2,831 | 1,858 |
Accounts payable - related parties | 13 | 88 |
Accrued expenses | 504 | 1,832 |
Accrued income taxes | 241 | 3 |
Warrant liability | 1,783 | 0 |
Other liabilities, current - patent purchase | 1,000 | 33 |
Total current liabilities | 6,372 | 3,814 |
Other liabilities, non-current | 91 | 119 |
Other liabilities, non-current - patent purchase | 5,500 | 0 |
Total liabilities | 11,963 | 3,933 |
Commitments and contingencies (Note 2) | ||
Stockholders' equity | ||
Preferred stock - $0.0001 par value; 10,000,000 shares authorized; 153,000 shares designated Series A-1 Redeemable Preferred Stock at September 30, 2017 | 0 | 0 |
Common stock - $0.0001 par value; 80,000,000 shares authorized; 27,483,994, and 23,102,728 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 3 | 2 |
Additional paid-in capital | 23,722 | 18,140 |
Accumulated deficit | (8,373) | (17,256) |
Total stockholders' equity | 15,352 | 886 |
Total liabilities and stockholders' equity | 45,324 | 18,305 |
Series A Preferred stock - $0.0001 par value, no shares and 83,502 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively (Liquidation preference of $13,777 at December 31, 2016) | ||
Redeemable Preferred Stock | ||
Redeemable Preferred Stock | 0 | 13,486 |
Series A-1 Preferred stock - $0.0001 par value, 153,000 shares and no shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively (Liquidation preference of $18,934 at September 30, 2017) | ||
Redeemable Preferred Stock | ||
Redeemable Preferred Stock | $ 18,009 | $ 0 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
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) | 27,483,994 | 23,102,728 |
Common stock, shares outstanding (in shares) | 27,483,994 | 23,102,728 |
Series A preferred shares | ||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable preferred stock, shares issued (in shares) | 83,502 | |
Redeemable preferred stock, shares outstanding (in shares) | 83,502 | |
Redeemable preferred stock, liquidation preference | $ 13,777 | |
Series A-1 preferred shares | ||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable preferred stock, shares issued (in shares) | 153,000 | |
Redeemable preferred stock, shares outstanding (in shares) | 153,000 | |
Redeemable preferred stock, liquidation preference | $ 18,934 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenues | $ 0 | $ 1,141,000 | $ 27,056,000 | $ 9,988,000 |
Cost of revenues | 0 | 0 | 4,008,000 | 2,237,000 |
Gross profit | 0 | 1,141,000 | 23,048,000 | 7,751,000 |
Research and development expense | 655,000 | 259,000 | 1,142,000 | 364,000 |
Selling, general and administrative expenses | 5,112,000 | 4,184,000 | 14,284,000 | 10,953,000 |
Total operating expenses | 5,767,000 | 4,443,000 | 15,426,000 | 11,317,000 |
Income (loss) from operations | (5,767,000) | (3,302,000) | 7,622,000 | (3,566,000) |
Other income | ||||
Change in fair value of warrant liability | 1,530,000 | 0 | 1,530,000 | 0 |
Income (loss) before income taxes | (4,237,000) | (3,302,000) | 9,152,000 | (3,566,000) |
Provision for income taxes | 0 | 0 | 269,000 | 0 |
Net income (loss) | (4,237,000) | (3,302,000) | 8,883,000 | (3,566,000) |
Accretion of Preferred stock | 0 | (1,309,000) | (3,925,000) | (6,789,000) |
Net income (loss) to common stockholders | $ (4,237,000) | $ (4,611,000) | $ 4,958,000 | $ (10,355,000) |
Net income (loss) per share, basic (in dollars per share) | $ (0.16) | $ (0.14) | $ 0.36 | $ (0.16) |
Net income (loss) per share, diluted (in dollars per share) | (0.16) | (0.14) | 0.34 | (0.16) |
Net income (loss) per share applicable to common stockholders, basic (in dollars per share) | (0.16) | (0.20) | 0.20 | (0.45) |
Net income (loss) per share applicable to common stockholders, diluted (in dollars share) | $ (0.16) | $ (0.20) | $ 0.19 | $ (0.45) |
Weighted-average common shares outstanding, basic (in shares) | 27,327,936 | 22,853,865 | 24,588,296 | 22,775,918 |
Weighted-average common shares outstanding, diluted (in shares) | 27,327,936 | 22,853,865 | 26,138,201 | 22,775,918 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 8,883 | $ (3,566) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 257 | 42 |
Change in fair value of warrant liability | (1,530) | 0 |
Stock-based compensation | 641 | 682 |
Accounts receivable | 1,066 | 0 |
Prepaid expenses and other current assets | (252) | 137 |
Accrued expenses | (1,328) | 1,848 |
Accounts payable | 973 | (88) |
Accounts payable - related parties | (75) | (4) |
Other current liabilities | (33) | (38) |
Other non-current liabilities | (28) | 0 |
Accrued income taxes | 238 | 0 |
Net cash provided by (used in) operating activities | 8,812 | (987) |
Cash flows from investing activities: | ||
Purchase of intangible assets | (2,000) | 0 |
Purchase of property and equipment | 0 | (9) |
Purchase of additional investment | 0 | (550) |
Proceeds from investments | 127 | 0 |
Net cash used in investing activities | (1,873) | (559) |
Cash flows from financing activities: | ||
Proceeds from Common share offering, net of issuance costs | 11,951 | 0 |
Redemption of Series A Preferred shares | (13,777) | (2,593) |
Proceeds from exercise of stock options | 229 | 111 |
Net cash provided by financing activities | 12,778 | 7,008 |
Net increase in cash and cash equivalents | 19,717 | 5,462 |
Cash and cash equivalents - beginning | 13,678 | 6,101 |
Cash and cash equivalents - ending | 33,395 | 11,563 |
Supplemental disclosures of cash flow information: | ||
Series A-1 warrant liability | 3,313 | 0 |
Patent purchase in exchange for payable | 6,500 | 0 |
Series A-1 preferred shares | ||
Cash flows from financing activities: | ||
Proceeds from sale of preferred shares, net of issuance costs | 14,375 | 0 |
Supplemental disclosures of cash flow information: | ||
Accretion of series A and series A-1 preferred stock to redemption value | 3,634 | 0 |
Series A preferred shares | ||
Cash flows from financing activities: | ||
Proceeds from sale of preferred shares, net of issuance costs | 0 | 9,490 |
Supplemental disclosures of cash flow information: | ||
Accretion of series A and series A-1 preferred stock to redemption value | $ 291 | $ 6,789 |
THE COMPANY AND SUMMARY OF SIGN
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Finjan Holdings, Inc., a Delaware corporation (the “Company” or “Finjan Holdings”), is a cybersecurity company focused on licensing and enforcement, developing mobile security applications, providing consulting services, and investing in cybersecurity technologies and intellectual property. Licensing and enforcement of its cybersecurity technology patent portfolio is operated by its wholly-owned subsidiary Finjan, Inc. (“Finjan”). Development and licensing of select former patents of International Business Machines Corporation, a New York corporation (“IBM”) (NYSE: IBM) in the security sector are operated by its wholly-owned subsidiary Finjan Blue, Inc. (“Finjan Blue”). The mobile security business is operated by its wholly owned subsidiary Finjan Mobile, Inc., ("Finjan Mobile") and the consulting services business is operated by its wholly-owned subsidiary, CybeRisk Security Solutions LLC ("CybeRisk"). Revenues and operations from the Company's Finjan Blue security business, Finjan Mobile security business and the Company's CybeRisk advisory services were deemed immaterial for the three and nine months ended September 30, 2017 and 2016. BASIS OF PRESENTATION These unaudited condensed consolidated financial statements have been prepared following the requirements of the Securities and Exchange Commission (“SEC”), for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) can be condensed or omitted. The December 31, 2016 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto of the Company for the year ended December 31, 2016 which were included in the annual report on Form 10-K filed by the Company on March 27, 2017. In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and notes thereto of the Company and include all adjustments, consisting only of normal recurring adjustments, considered necessary for the fair presentation of the Company’s financial position and operating results. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the operating results for the year ending December 31, 2017, or any other interim or future periods. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. 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, investments, 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. PRINCIPLES OF CONSOLIDATION The condensed consolidated financial statements include the accounts of Finjan Holdings and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. LONG-LIVED ASSETS SUBJECT TO AMORTIZATION Amortization of intangible assets with finite lives are amortized over their estimated useful lives. The Company reviews them for impairment periodically or whenever impairment exists. The Company continually evaluates whether events or changes in circumstances might indicate that the remaining estimated useful life of long-lived assets may warrant revision, or that the remaining balance may not be recoverable. When factors indicate that long-lived assets should be evaluated for possible impairment, the estimate of fair value is based on the best information available as of the date of the assessment, is subjective and requires judgment, including management assumptions as deemed appropriate and would be based on generally accepted valuation methodologies. 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 from the Company’s cybersecurity business results from grants of licenses to its patented cybersecurity technology and settlements reached from legal enforcement of the Company’s patent rights. Revenue is recognized when the arrangement with the licensee has been signed and the license has been delivered and made effective, provided the license fees are fixed or determinable and collectability is reasonably assured. The total amount of the consideration received upon any settlement or judgment is allocated to each element based on the fair value of each element. Elements provided in either settlement agreements or judgments include, the value of a license, legal release and interest. Fair value of licensing agreements and royalty revenues, are recognized as revenues in the condensed consolidated statement of operations. Elements not related to license agreements and royalty revenue in nature will be reflected in other income (expense), net in the condensed consolidated statements of operations. Legal release as part of a settlement agreement is recognized as a separate line item in the condensed 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 in other income (expense), net. 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. 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. The resulting foreign currency translation adjustments were deemed immaterial for the periods presented. Gains and losses from foreign currency transactions are included in other income (expense), net in the accompanying condensed consolidated statements of operations. Foreign currency transaction gains (losses) were immaterial for the periods presented, and are included as general and administrative expense, in the accompanying condensed consolidated financial statements. CONCENTRATIONS OF CREDIT RISK The Company maintains substantially all of its cash and cash equivalents in financial institutions located in the United States. At times, the Company’s cash and cash equivalent balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in such accounts. As of September 30, 2017 , and December 31, 2016 , substantially all of the Company’s cash and cash equivalents are uninsured. PREFERRED STOCK The Company accounts for the redemption premium and issuance costs on its 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. ACCOUNTING FOR WARRANTS The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). DERIVATIVE LIABILITIES In connection with the issuance of Series A-1 Preferred Stock, the Company issued a warrant with variable consideration. The Company determined that this instrument is an embedded derivative pursuant to ASC 815, “Derivatives and Hedging.” The accounting treatment of derivative financial instruments requires that the Company record the warrant, at its fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as a change in the fair value of derivative liabilities for each reporting period at each balance sheet date. The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The Monte Carlo Valuation model is used to estimate the fair value of the warrant. The model was developed for use in estimating the fair value of traded options or warrants. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the instrument granted. The principal assumptions used in applying the model were as follows: For Three and Nine Months Ended September 30, 2017 Assumptions: Risk-free interest rate 1.5% - 1.6% Expected life 3 years Expected volatility 60% Dividends 0.0% 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 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. 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. A summary of the Company's Level 3 derivative liabilities for the nine months ended September 30, 2017 is as follow (in thousands): Balance, December 31, 2016 $ — Fair value of derivative liabilities at issuance 3,313 Fair value change of derivative liabilities (1,530 ) Balance, September 30, 2017 $ 1,783 NET INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per common share is based upon the weighted-average number of common shares outstanding. Diluted net income (loss) per common share is based on the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding and computed as follows: Three Months Ended Nine Months Ended 2017 2016 2017 2016 (In thousands, except share and per share data) Numerator: Net income (loss) to common stockholders $ (4,237 ) $ (4,611 ) $ 4,958 $ (10,355 ) Denominator: Weighted-average common shares, basic 27,327,936 22,853,865 24,588,296 22,775,918 Weighted-average common shares, diluted* 27,327,936 22,853,865 26,138,201 22,775,918 Net income (loss) per common share: Basic: $ (0.16 ) $ (0.20 ) $ 0.20 $ (0.45 ) Diluted: $ (0.16 ) $ (0.20 ) $ 0.19 $ (0.45 ) * The diluted earnings per common share included 462,046 unvested Restricted Stock Units and the weighted average effect of 1,087,859 stock options that are potentially dilutive to earnings per share for the nine months ended September 30, 2017, since the exercise price of such securities was less than the average market price during the period. For the three months ended September 30, 2017 and three and nine months ended September 30, 2016, these securities would be anti-dilutive and were excluded. Potentially dilutive common shares from employee equity plans 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 income (loss) per share because their inclusion would be anti-dilutive and consist of the following: September 30, 2017 2016 Stock options 1,620,507 1,718,832 Warrants 2,355,506 — Restricted Stock Units 462,046 431,747 Total 4,438,059 2,150,579 INCOME TAXES 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 tax provision for the nine months ended September 30, 2017 is solely comprised of federal alternative minimum tax. During the nine months ended September 30, 2017, the Company used approximately $7.7 million of its net operating loss carryforwards, resulting in a reduction to the deferred tax valuation allowance of approximately $2.6 million . No tax provision was recorded for the three and nine months ended September 30, 2016 due to the operating loss generated in the period. For the three months ended September 30, 2017, the income tax provision was deemed immaterial. 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 has established an implementation plan and believes the systems in place are adequate to support application of this guidance. The Company expects to adopt this guidance in the first quarter of fiscal 2018. The Company is evaluating the impact of adopting this new accounting standard on its condensed 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 condensed 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. The adoption of this standard did not have a material impact on the Company's condensed 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 Company's condensed consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, "Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception". Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the effect of the standard on its condensed consolidated financial statements and related disclosures. Other recent accounting standards that have been issued or proposed by FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's condensed consolidated financial statements upon adoption. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases The following table sets forth the Company’s aggregate future minimum payments under its operating lease commitments as of September 30, 2017 (in thousands): For the year ending December 31, 2017 (remaining three months) $ 172 2018 459 $ 631 The Company accounts for its leases under the straight-line method of accounting. Deferred rent payable was $41,000 and $69,000 as of September 30, 2017 and December 31, 2016, respectively, and is included in non current liabilities on the condensed consolidated balance sheets. Rent expense was $197,000 and $573,000 for the three and nine months ended September 30, 2017, respectively, and $188,000 and $586,000 for the three and nine months ended September 30, 2016, respectively. Rental income was $89,000 and $267,000 for the three and nine months ended September 30, 2017, respectively, and $88,000 and $ 260,000 for the three and nine months ended September 30, 2016, respectively. Sublease income is recorded as a reduction in rental expense. Future minimum lease payments to be received under the sublease agreements as of September 30, 2017 are as follows (in thousands): For the year ending December 31, New York Menlo Park Total 2017 (remaining three months) $ 42 $ 33 $ 75 2018 127 — 127 $ 169 $ 33 202 Capital Commitments On November 21, 2013, the Company made a $5.0 million commitment to invest in JVP VII Cyber Strategic Partners, L.P. (the “JVP Fund”), an Israel-based limited partnership venture capital fund seeking to invest in early-stage cyber technology companies. If and when the Company funds the entire amount of the investment, it 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 $0.8 million as a portion of a gross entitlement of $1.3 million from its investment in the JVP Fund, the remainder $0.5 million was reinvested in the fund. Along with its cash investments of $2.3 million , it represents a total investment of $2.6 million , net of $0.13 million distribution received from JVP Fund as of March 31, 2017, the distribution is a portion of the proceeds allocated to the Company's investment. As of September 30, 2017, the Company has a $2.7 million outstanding capital commitment to the venture capital fund, which can be called any time. Contractual Commitments Finjan Mobile On April 21, 2017, the Company and Finjan Mobile, a wholly-owned subsidiary of the Company, entered into a Confidential Avira VPN Platform Distribution Agreement (the “Distribution Agreement”) with Avira, Inc., a Delaware corporation (“Avira”). Pursuant to the Distribution Agreement, Avira will provide its Virtual Private Network (“VPN”) platform and technical support (“VPN Platform”) to Finjan Mobile, and Finjan Mobile will utilize the VPN Platform as part of its Vital Security™ suite of product offerings. Avira also granted Finjan Mobile related license rights in connection with the Distribution Agreement and starting July 1, 2017, Finjan Mobile will pay Avira $3.9 million in fees under the Distribution Agreement, payable in 12 quarterly installments of $325,000 over the next 3 years. The Company has analyzed the terms of the agreement and has accounted for the transaction as a service agreement, to be expensed over the service period. As of September 30, 2017, the Company has a $3.6 million contractual obligation due over the next 11 quarters. Finjan Blue The Company and Finjan Blue entered into a Patent Assignment and Support Agreement (the “Patent Assignment Agreement”) with IBM effective as of August 24, 2017. Pursuant to the Patent Assignment Agreement, Finjan Blue acquired select IBM patents in the security sector (the “IBM Security Patents”) in exchange for $8.5 million cash, payable as follows: (i) $2.0 million upon execution of the Patent Assignment Agreement and (ii) $6.5 million over the subsequent four years . The Company’s initial $2.0 million payment was made on August 24, 2017. For the three and nine months ended September 30, 2017, the Company recorded $0.2 million in amortization of these intangible assets. There were no similar expenses in 2016. In accordance with ASC 350-30-35-2 through 35-4, Intangibles-Goodwill and Other, the Company determined that the useful life of the patents acquired under the Patent Assignment and Support Agreement should be amortized is the four year term of the agreement. These costs are pre-revenue and charged to selling, general and administrative expenses accordingly. IBM will support Finjan Blue in its development and licensing of the IBM Security Patents and provide assistance for such efforts as needed for the term of the Agreement and Finjan Blue will reimburse IBM for reasonable time and out of pocket costs for such assistance, however IBM will no t receive further proceeds from such efforts. IBM does have reservation of rights with respect to the IBM Security Patents for its current licensees and open source initiatives. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES The components of accrued expenses are as below: September 30, 2017 December 31, 2016 (in thousands) Legal - Litigation / Licensing $ 100 $ 1,195 Compensation 194 560 Other 210 77 $ 504 $ 1,832 |
LICENSE, SETTLEMENT AND RELEASE
LICENSE, SETTLEMENT AND RELEASE AGREEMENT | 9 Months Ended |
Sep. 30, 2017 | |
License Settlement And Release Agreement [Abstract] | |
LICENSE, SETTLEMENT AND RELEASE AGREEMENT | LICENSE, SETTLEMENT AND RELEASE AGREEMENT On April 21, 2017, the Company entered into a Confidential Patent License Agreement (the “April 2017 Agreement”) with a European corporation (“EU Licensee”). Pursuant to the April 2017 Agreement, EU Licensee will obtain a license to our patent portfolio and will pay Finjan $4.9 million cash, in license fees, paid as follows, (i) $2.3 million to be paid within 10 days after the effective date of the April 2017 Agreement, (ii) $1.3 million on or before January 31, 2018, and (iii) $1.3 million on or before January 31, 2019. The Company recognized $2.3 million of the $4.9 million license as revenues as of June 30, 2017, in accordance with the Company’s revenue recognition policy as described in Note 1. Such license does not grant EU Licensee any right to transfer, sublicense or grant any rights under the April 2017 Agreement to a third party except as specifically provided under the April 2017 Agreement. Such license also has certain provisions relating to certain unlicensed products of any company that acquires EU Licensee, or is acquired by EU Licensee or its affiliates, in which case additional license fees may apply. The specific terms of the April 2017 Agreement are confidential. On March 30, 2017, Finjan entered into a Confidential Master Agreement (the “Sophos Agreement”) with Sophos Group plc, a public limited company organized and existing under the laws of England and Wales, Sophos Limited, a corporation organized and existing under the laws of England and Wales (“Sophos Limited”), and Sophos Inc. (“Sophos Inc.”), a Massachusetts corporation (collectively, “Sophos”). Pursuant to the Master Agreement, Finjan and Sophos Inc. agreed to dismiss the suit Finjan, Inc. v. Sophos, Inc. before the United States District Court of the Northern District of California (case no. 3:14cv1197-WHO) with prejudice. The Master Agreement also provides for full releases by the parties and covenants not to sue. Under the terms of the Sophos Agreement, on March 30, 2017, Sophos will obtain a fully paid up license to the Finjan patent portfolio and pay a license fee of $15.0 million in cash, which Finjan received on March 31, 2017. The Company recognized $15.0 million as revenues as of March 31, 2017, in accordance with the Company’s revenue recognition policy as described in Note 1. Finally, in connection with the Sophos Agreement, on March 30, 2017, Finjan Mobile entered into a Confidential Patent Cross License Agreement (the “Finjan Mobile Cross License Agreement”) with Sophos Limited. Pursuant to the terms of the Finjan Mobile Cross License Agreement, the parties will grant patent cross licenses in the Field of Use and Sophos Limited will pay Finjan Mobile $2.5 million cash, $1.25 million on or before March 31, 2018, and $1.25 million on or before March 31, 2019. On March 24, 2017, Finjan entered into a Patent License, Settlement and Release Agreement with Avast Software s.r.o., a company organized under the laws of the Czech Republic ("Avast"), reached an agreement (the "Avast Agreement") that upon Avast's satisfaction of certain terms, Finjan would 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 Avast Agreement, Avast agreed 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 1. As provided in the Avast Agreement, specific terms of the agreement are confidential. On March 2, 2017, Finjan entered into a Confidential Patent License Agreement (the “Veracode Agreement”) with Veracode, Inc., a Delaware corporation (“Veracode”). Pursuant to the Veracode Agreement, Veracode would obtain a license to the Finjan patent portfolio and agreed to pay a license fee of $2.0 million in cash, which Finjan received on March 2, 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 1. Such license does not grant Veracode any right to transfer, sublicense or grant any rights under the Veracode Agreement to a third party except as specifically provided under the Veracode 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 Veracode Agreement are confidential. On June 3, 2016, Finjan entered into a Patent License, Settlement and Release Agreement (the "Proofpoint Agreement") with Proofpoint, Inc. and Armorize Technologies (collectively, “Proofpoint”). The Proofpoint Agreement provides for the licensee 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 on December 28, 2016, and $3.3 million is payable on or before January 3, 2018. The Company recognized $4.3 million and $3.3 million of the $10.9 million license as revenues as of June 30, 2016 and December 28, 2016, respectively, in accordance with the Company’s revenue recognition policy as described in Note 1. The remaining balance of $3.3 million under the terms of the Proofpoint Agreement will be recognized as revenues when collectability is reasonably assured. In exchange for the foregoing and other valuable consideration, Finjan agreed to, subject to certain restrictions, limits and other conditions, grant Proofpoint a non-exclusive, irrevocable (except in the case of non-payment by Proofpoint or other material breach), worldwide license under Finjan Patents during the Term as specified in the Proofpoint Agreement. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Preferred Stock Series A During the nine months ended September 30, 2017, the Company redeemed $13.8 million or 83,502 shares of the Company's Series A Preferred stock; $8.4 million reduced the original recorded value of the Series A Preferred stock and $5.4 million reduced the accreted value. As a result, the Company has now retired all shares of Series A Preferred Stock issued in its $10.2 million Series A Preferred Stock financing. Series A-1 In June 2017, Finjan entered into a Series A-1 Preferred Stock Purchase Agreement with Soryn HLDR Vehicle II LLC, a Delaware limited liability company (“Soryn HLDR”), pursuant to which the Company agreed to issue to Soryn HLDR in a private placement an aggregate of 153,000 shares of the Company’s Series A-1 Preferred Stock at a purchase price of $100.00 per share, for aggregate proceeds of $15.3 million . The closing of the private placement occurred on June 19, 2017. The Company incurred issuance costs of $1.0 million which were recorded as an offset to the preferred stock. Such costs will be recognized as a deemed dividend upon the earlier of redemption or the date at which the Preferred Stock can be redeemed. The Series A-1 Preferred Stock was accounted for 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 under the specified terms and conditions of such preferred stock. Therefore, the Company classified the Series A-1 Preferred Stock as temporary equity in the condensed consolidated balance sheet. The Series A-1 Preferred Stock have redemption features at the option of the Company 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: • 1.2375 x the OPP if redeemed within 180 days of closing; or • 1.3 x the OPP if redeemed between 180 and 270 days of closing; or • 1.34 x the OPP if redeemed between 270 days and 360 days of closing; or • 1.575 x the OPP if redeemed between 360 days and 720 days of closing; or • Thereafter, 1.75 x the OPP plus 0.125 x the OPP for every 90 day period the preferred remains outstanding. The redemption feature is also at the option of the holder in accordance with the terms and conditions set forth in the Certificate of Designation and is redeemable 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. Such monetary awards are not solely within the control of Finjan, however, have not been triggered as of September 30, 2017. The Company accretes changes in redemption value over the period from the date of issuance to the earliest redemption dates of the security. The increase in the redemption value is a deemed dividend that increases the carrying value of the Series A-1 Preferred Stock to equal the redemption value at the end of each reporting period with an offsetting decrease to additional paid-in-capital. During the nine months ended September 30, 2017, the Company recorded a deemed dividend of $3.6 million , representing an increase to the Series A-1 Preferred Stock's redemption (liquidation) value, net of costs. The Company also agreed to issue to Soryn HLDR a fully vested common stock warrant (the “Warrant”), to purchase 2,355,506 shares of common stock, $0.0001 par value per share of the Company at an exercise price of $3.18 per share, the Warrant has a term of three years . The closing of 2,000,000 shares occurred on June 19, 2017, 309,136 occurred June 30, 2017 and 46,370 on July 25, 2017. The Warrant has the rights to acquire a variable amount of common stock at a fixed price for the first 15 months . Under ASC 815-40-15-8A, the Warrant is not considered indexed to the Company’s stock, and thus it has a derivative feature and has been classified as a liability. The Company has valued the Warrant at inception using a Monte Carlo valuation model, recording a $3.3 million Warrant liability at inception. The warrant was revalued at September 30, 2017, reducing the Warrant liability by $1.5 million to $1.8 million , the change in the fair value of the warrant was recorded in Other Income. As of September 30, 2017 the aggregate intrinsic value of the warrant was $0 , with a weighted average contracted term of 3 years . Common Stock On June 30, 2017, the Company completed an underwriting agreement (the “Underwriting Agreement”) with B. Riley & Co., LLC (the “Underwriter”) pursuant to which the Company agreed to issue and sell an aggregate of 3,600,000 shares of its common stock, par value $0.0001 per share (the “Common Stock”), at a public offering price of $3.15 per share gross proceeds, with net proceeds to the Company of $2.90 per share, for a total of $10.4 million . Under the terms of the Underwriting Agreement, the Company also granted the Underwriters a 30-day over-allotment option to purchase an additional 540,000 shares of Common Stock, which was exercised July 21, 2017. The Company received $1.6 million net proceeds from the exercise of the over-allotment, On June 30, 2017, as a result of the common stock offering, pursuant to the terms and conditions of the Warrant issued to Soryn HLDR, the number of shares of Common Stock exercisable under the Warrant increased from 2.0 million to 2.3 million . On July 21, 2017, upon the exercise of the over-allotment option the number of shares of Common Stock for which such Warrant is exercisable increased an additional 0.05 million shares. The Warrant is exercisable at $3.18 per common share for all such shares. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION On July 10, 2014, the Company’s stockholders approved the Finjan Holdings, Inc. 2014 Incentive Compensation Plan (the "2014 Plan") at the annual meeting of stockholders, pursuant to which 2,196,836 shares of common stock were authorized for issuance. Upon shareholder approval of the 2014 Plan, the 2013 Global Share Option Plan was terminated, other than with respect to options outstanding under such plan 1,620,507 options remain outstanding under the 2013 and 2014 plans as of September 30, 2017 . On June 24, 2015, the Company adopted the 2015 Israeli Sub-plan (the “2015 Israeli Sub-plan”) to the Company’s 2014 Plan, which enables the Company to grant options, and issue shares of common stock to employees and non-employees, who are employed by the Company or any of its affiliates, who are residents of the State of Israel. On June 21, 2017, at the annual meeting of stockholders, the Company's shareholders approved an increase of 1,000,000 shares to the Finjan Holdings, Inc. 2014 Plan. As of September 30, 2017, the Company has 1,670,276 shares available for issuance under the 2014 Plan. The Company has issued a total of 1,213,084 Restricted Stock Units ("RSUs") of which 462,046 remain outstanding as of September 30, 2017 . RSUs generally vest over three or four years, with one-third or one-fourth, respectively, vesting on the one-year anniversary followed by quarterly vesting thereafter. Stock-based compensation to employees and non-employees are recognized as expense in the condensed consolidated statement of operations. The compensation cost for all stock-based awards is measured at the grant date, based on the fair value of the award (determined using Black-Scholes option pricing model for stock options and fair value for RSUs), and is recognized as an expense over the requisite service period (generally the vesting of the equity awards). Determining the fair value of stock-based awards at the grant date requires significant estimates and judgments, including future employee stock option exercise behavior and requisite service periods. During the three and nine months ended September 30, 2017 , the Company expensed $221,000 and $641,000 , respectively, and $229,000 and $682,000 for the three and nine months ended September 30, 2016, respectively, of stock-based compensation in the condensed consolidated statements of operations. All stock-based compensation expenses were related to selling, general and administration. The aggregate intrinsic value of stock options and RSU's outstanding and exercisable as of September 30, 2017 was $2.4 million . During the three and nine months ended September 30, 2017, the Company granted options to purchase zero and 165,000 shares of common stock, respectively. During the three and nine months ended September 30, 2017, the Company granted 176,212 and 376,212 RSUs of common stock, respectively. During the three and nine months ended September 30, 2017, 21,840 and 141,840 stock options were exercised, resulting in cash proceeds of $0.2 million , respectively. Number of Options Outstanding and Exercisable Number of RSUs Outstanding Outstanding 2013 & 2014 Plans – December 31, 2016 1,607,347 Non vested - December 31, 2016 185,260 Options granted 165,000 Shares granted 376,212 Options exercised (141,840 ) Shares vested (99,426 ) Options forfeited (10,000 ) Shares forfeited — Options expired — Shares expired — Outstanding – September 30, 2017 1,620,507 Non Vested & Outstanding - September 30, 2017 462,046 Exercisable – September 30, 2017 1,255,822 The Company estimates the fair values of stock options using the Black-Scholes option-pricing model. The assumptions used in the Black-Scholes option-pricing model and the weighted-average grant date fair value of the option awards for the periods presented were as follows: Nine Months Ended September 30, 2017 2016 Volatility 132% - 141% 149% - 152% Expected term (in years) 6 7 Risk-free rate 1.82% - 2.19% 1.22% - 1.26% Expected dividend yield 0% 0% Weighted-average grant date fair value per option $ 1.45 - 3.32 $ 0.96 - 1.15 As of September 30, 2017, total compensation cost not yet recognized related to unvested stock options was approximately $1.1 million , which is expected to be recognized over a weighted-average period of 1.5 years. Options granted during the nine months ended September 30, 2017 had a weighted average exercise price of $1.61 per share, and a weighted average contractual term of 10 years. The risk-free interest rate is based on the U.S. Treasury rates with maturities similar to the expected term of the option. The volatility is a measure of the amount by which the Company’s share price has fluctuated or is expected to fluctuate and was based on historical volatility of comparative companies that are similar to the Company. For the nine months ended September 30, 2017, the Company updated its volatility assumptions to reflect the increased trading history in the Company’s stock. The expected term was estimated using the simplified method. The simplified method calculates the expected term as the average of the time to vesting and the contractual life of the option. The dividend yield is 0% as the Company has never declared or paid any cash dividends and does not anticipate paying dividends in the future. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2017 | |
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 the Company’s Chairman is a partner. The Company incurred approximately $38,000 and $114,000 in legal fees to the firm for both three and nine months ended September 30, 2017, and 2016, respectively. As of September 30, 2017, and December 31, 2016, the Company had balances due to this firm of $13,000 and $88,000 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 in fees to the firm during the nine months ended September 30, 2016. The Company canceled this agreement in June 2016. |
LITIGATION, CLAIMS AND ASSESSME
LITIGATION, CLAIMS AND ASSESSMENTS | 9 Months Ended |
Sep. 30, 2017 | |
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. On March 28, 2017, the Court denied FireEye’s Renewed Motion to Stay the case. On April 20, 2017, the Court conducted a case management conference. On May 1, 2017, the Court issued a Scheduling order setting a claim construction hearing for January 28, 2018. On May 31, 2017, FireEye filed an Amended Answer to Finjan’s First Amended Complaint, and Finjan filed a Second Amended Complaint to add claims of willful infringement and claims of infringement of U.S. Patent No. 8,141,154. On June 14, 2017, Finjan filed an answer and counterclaims to FireEye’s Amended Counterclaims and FireEye filed an answer to Finjan’s Second Amended Complaint. On June 29, 2017, Finjan filed an answer to FireEye's Amended Counterclaims. A claim construction/Markman hearing is scheduled for January 18, 2018. 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. The hearing before the Federal Circuit was held on September 8, 2017. No decision has been entered to date. 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-trial 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. On March 30, 2017, the parties entered into a settlement agreement, see Note 4 and on April 4, 2017, the Court ordered, pursuant to stipulation between the parties, that all claims in the case be dismissed with prejudice. 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 canceled 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. On April 18, 2017, Blue Coat filed a Motion to Strike Portions of Finjan’s Expert Reports. Finjan filed its opposition brief on May 2, 2017. On May 9, 2017, Blue Coat filed its reply brief in support of its Motion to Strike Portions of Finjan’s Expert Reports. The Court scheduled Blue Coat’s motion to strike to be heard on July 20, 2017. On May 17, 2017, Finjan filed a Motion for Summary Judgment of Infringement and Validity and Blue Coat filed a Motion for Summary Judgment of Noninfringement. The Parties filed their opposition briefs to the summary judgment motions on May 31, 2017, and their reply briefs on June 7, 2017. A summary judgment hearing was held on June 22, 2017.On July 28, 2017, the Court granted in part and denied in part Blue Coat’s motion to strike Finjan’s infringement expert reports. The Court also issued an order regarding the parties’ motions for summary judgment on July 28, 2017. In its Order, the Court granted Blue Coat’s motion for summary judgment of non-infringement of certain products for U.S. Patent Nos. 8,566,580 and certain products for U.S. Patent No. 9,141,786; denied the remainder of Blue Coat’s motion for summary judgment; granted Finjan’s motion for summary judgment of validity of U.S. Patent Nos. 7,418,731, 8,677,494, 8,566,580, 8,154,844, and 6,965,968; and denied the remainder of Finjan’s motion for summary judgment. A pretrial conference was held on October 5-6, 2017. On October 31, 2017, the Court granted the parties’ stipulation to narrow issues for trial. In the stipulation, the parties stipulated to withdraw Blue Coat’s affirmative defenses of invalidity and laches and counterclaims of invalidity, and Finjan’s affirmative defenses of waiver and collateral estoppel-issue preclusion as those defenses relate to invalidity. The parties also stipulated to withdraw Finjan’s claims of infringement regarding the ‘086 Patent, the ‘755 Patent, claims 1 and 7 of the ‘844 Patent, claim 2 of the ‘731 Patent, and claims 14 and 16 of the ‘494 Patent, and all accused product combinations containing the Security Analytics, ProxySG, and Content Analysis System products, and Blue Coat’s counterclaims and affirmative defenses of non-infringement regarding the ‘086 Patent, the ‘755 Patent, claims 1 and 7 of the ‘844 Patent, claim 2 of the ‘731 Patent, claims 14 and 16 of the ‘494 Patent, and all accused product combinations containing the Security Analytics, ProxySG, and Content Analysis System products. The parties also stipulated to withdraw the ‘086 Patent and jointly seek termination of the inter partes review concerning the ‘086 Patent with respect to Blue Coat (IPR2016-01444) as well as dates damages commence for the asserted patents for the purpose of the jury calculating damages. Trial began October 31, 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. On March 24, 2017 and May 26, 2017, the parties provided updates on settlement discussions to the Court. On July 28, 2017, Symantec filed a Motion to Strike Finjan’s Doctrine of Equivalents Infringement Contentions. Finjan’s opposition to Symantec’s Motion to Strike was filed on August 11, 2017, and Symantec’s Reply was filed on August 18, 2017. On September 13, 2017, the Court issued an order denying Symantec’s Motion to Strike Finjan’s Doctrine of Equivalents Infringement Contentions. On August 18, 2017, IAC Search & Media, Inc. (“IAC”) filed a Motion to Intervene and Sever with respect to claims related to the ‘182 Patent. Finjan and Symantec filed their respective Opposition to IAC’s Motion to Intervene on September 1, 2017, and IAC filed its Reply on September 8, 2017. On September 29, 2017, the Court granted IAC’s request to intervene and extend the case schedule, and declined to sever the claims related to the ‘182 Patent. On October 10, 2017, the Court issued an order scheduling summary judgment motions to be filed on January 11, 2018, the summary judgment hearing on February 15, 2018, and a pretrial conference on June 5, 2018. Trial is scheduled for July 9, 2018. On October 19, 2017, Finjan filed a motion to amend its answer to add collateral estoppel as an affirmative defense, and Symantec filed its opposition on November 2, 2017. Finjan will file its reply in support of its motion to amend its answer to add collateral estoppel as an affirmative defense on November 9, 2017. 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, 7,613,918, 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 i |
THE COMPANY AND SUMMARY OF SI14
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION These unaudited condensed consolidated financial statements have been prepared following the requirements of the Securities and Exchange Commission (“SEC”), for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) can be condensed or omitted. The December 31, 2016 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto of the Company for the year ended December 31, 2016 which were included in the annual report on Form 10-K filed by the Company on March 27, 2017. In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and notes thereto of the Company and include all adjustments, consisting only of normal recurring adjustments, considered necessary for the fair presentation of the Company’s financial position and operating results. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the operating results for the year ending December 31, 2017, or any other interim or future periods. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of financial statements in conformity with U.S. 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, investments, 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. |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION The condensed consolidated financial statements include the accounts of Finjan Holdings and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
LONG-LIVED ASSETS SUBJECT TO AMORTIZATION | LONG-LIVED ASSETS SUBJECT TO AMORTIZATION Amortization of intangible assets with finite lives are amortized over their estimated useful lives. The Company reviews them for impairment periodically or whenever impairment exists. The Company continually evaluates whether events or changes in circumstances might indicate that the remaining estimated useful life of long-lived assets may warrant revision, or that the remaining balance may not be recoverable. When factors indicate that long-lived assets should be evaluated for possible impairment, the estimate of fair value is based on the best information available as of the date of the assessment, is subjective and requires judgment, including management assumptions as deemed appropriate and would be based on generally accepted valuation methodologies. |
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 from the Company’s cybersecurity business results from grants of licenses to its patented cybersecurity technology and settlements reached from legal enforcement of the Company’s patent rights. Revenue is recognized when the arrangement with the licensee has been signed and the license has been delivered and made effective, provided the license fees are fixed or determinable and collectability is reasonably assured. The total amount of the consideration received upon any settlement or judgment is allocated to each element based on the fair value of each element. Elements provided in either settlement agreements or judgments include, the value of a license, legal release and interest. Fair value of licensing agreements and royalty revenues, are recognized as revenues in the condensed consolidated statement of operations. Elements not related to license agreements and royalty revenue in nature will be reflected in other income (expense), net in the condensed consolidated statements of operations. Legal release as part of a settlement agreement is recognized as a separate line item in the condensed 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 in other income (expense), net. 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. |
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. The resulting foreign currency translation adjustments were deemed immaterial for the periods presented. Gains and losses from foreign currency transactions are included in other income (expense), net in the accompanying condensed consolidated statements of operations. Foreign currency transaction gains (losses) were immaterial for the periods presented, and are included as general and administrative expense, in the accompanying condensed consolidated financial statements. |
CONCENTRATIONS OF CREDIT RISK | CONCENTRATIONS OF CREDIT RISK The Company maintains substantially all of its cash and cash equivalents in financial institutions located in the United States. At times, the Company’s cash and cash equivalent balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in such accounts. |
PREFERRED STOCK | PREFERRED STOCK The Company accounts for the redemption premium and issuance costs on its 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. |
ACCOUNTING FOR WARRANTS | ACCOUNTING FOR WARRANTS The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). |
DERIVATIVE LIABILITIES | DERIVATIVE LIABILITIES In connection with the issuance of Series A-1 Preferred Stock, the Company issued a warrant with variable consideration. The Company determined that this instrument is an embedded derivative pursuant to ASC 815, “Derivatives and Hedging.” The accounting treatment of derivative financial instruments requires that the Company record the warrant, at its fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as a change in the fair value of derivative liabilities for each reporting period at each balance sheet date. The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The Monte Carlo Valuation model is used to estimate the fair value of the warrant. The model was developed for use in estimating the fair value of traded options or warrants. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the instrument granted. The principal assumptions used in applying the model were as follows: For Three and Nine Months Ended September 30, 2017 Assumptions: Risk-free interest rate 1.5% - 1.6% Expected life 3 years Expected volatility 60% Dividends 0.0% |
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 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. 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. |
NET INCOME (LOSS) PER COMMON SHARE | NET INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per common share is based upon the weighted-average number of common shares outstanding. |
INCOME TAXES | INCOME TAXES 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. |
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 has established an implementation plan and believes the systems in place are adequate to support application of this guidance. The Company expects to adopt this guidance in the first quarter of fiscal 2018. The Company is evaluating the impact of adopting this new accounting standard on its condensed 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 condensed 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. The adoption of this standard did not have a material impact on the Company's condensed 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 Company's condensed consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, "Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception". Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the effect of the standard on its condensed consolidated financial statements and related disclosures. Other recent accounting standards that have been issued or proposed by FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's condensed consolidated financial statements upon adoption. |
THE COMPANY AND SUMMARY OF SI15
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Fair Value Assumptions | The principal assumptions used in applying the model were as follows: For Three and Nine Months Ended September 30, 2017 Assumptions: Risk-free interest rate 1.5% - 1.6% Expected life 3 years Expected volatility 60% Dividends 0.0% |
Summary of Level 3 Liabilities | A summary of the Company's Level 3 derivative liabilities for the nine months ended September 30, 2017 is as follow (in thousands): Balance, December 31, 2016 $ — Fair value of derivative liabilities at issuance 3,313 Fair value change of derivative liabilities (1,530 ) Balance, September 30, 2017 $ 1,783 |
Schedule of Earnings Per Share, Basic and Diluted | Diluted net income (loss) per common share is based on the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding and computed as follows: Three Months Ended Nine Months Ended 2017 2016 2017 2016 (In thousands, except share and per share data) Numerator: Net income (loss) to common stockholders $ (4,237 ) $ (4,611 ) $ 4,958 $ (10,355 ) Denominator: Weighted-average common shares, basic 27,327,936 22,853,865 24,588,296 22,775,918 Weighted-average common shares, diluted* 27,327,936 22,853,865 26,138,201 22,775,918 Net income (loss) per common share: Basic: $ (0.16 ) $ (0.20 ) $ 0.20 $ (0.45 ) Diluted: $ (0.16 ) $ (0.20 ) $ 0.19 $ (0.45 ) * The diluted earnings per common share included 462,046 unvested Restricted Stock Units and the weighted average effect of 1,087,859 stock options that are potentially dilutive to earnings per share for the nine months ended September 30, 2017, since the exercise price of such securities was less than the average market price during the period. For the three months ended September 30, 2017 and three and nine months ended September 30, 2016, these securities would be anti-dilutive and were excluded. |
Summary of Components Excluded from Computation of Diluted Net Loss Per Share | Potentially dilutive common shares from employee equity plans 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 income (loss) per share because their inclusion would be anti-dilutive and consist of the following: September 30, 2017 2016 Stock options 1,620,507 1,718,832 Warrants 2,355,506 — Restricted Stock Units 462,046 431,747 Total 4,438,059 2,150,579 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Leases | Sublease income is recorded as a reduction in rental expense. Future minimum lease payments to be received under the sublease agreements as of September 30, 2017 are as follows (in thousands): For the year ending December 31, New York Menlo Park Total 2017 (remaining three months) $ 42 $ 33 $ 75 2018 127 — 127 $ 169 $ 33 202 The following table sets forth the Company’s aggregate future minimum payments under its operating lease commitments as of September 30, 2017 (in thousands): For the year ending December 31, 2017 (remaining three months) $ 172 2018 459 $ 631 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | The components of accrued expenses are as below: September 30, 2017 December 31, 2016 (in thousands) Legal - Litigation / Licensing $ 100 $ 1,195 Compensation 194 560 Other 210 77 $ 504 $ 1,832 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Share-Based Compensation Activity | Number of Options Outstanding and Exercisable Number of RSUs Outstanding Outstanding 2013 & 2014 Plans – December 31, 2016 1,607,347 Non vested - December 31, 2016 185,260 Options granted 165,000 Shares granted 376,212 Options exercised (141,840 ) Shares vested (99,426 ) Options forfeited (10,000 ) Shares forfeited — Options expired — Shares expired — Outstanding – September 30, 2017 1,620,507 Non Vested & Outstanding - September 30, 2017 462,046 Exercisable – September 30, 2017 1,255,822 |
Schedule of Weighted-Average Black-Scholes Option Pricing Model Assumptions | The assumptions used in the Black-Scholes option-pricing model and the weighted-average grant date fair value of the option awards for the periods presented were as follows: Nine Months Ended September 30, 2017 2016 Volatility 132% - 141% 149% - 152% Expected term (in years) 6 7 Risk-free rate 1.82% - 2.19% 1.22% - 1.26% Expected dividend yield 0% 0% Weighted-average grant date fair value per option $ 1.45 - 3.32 $ 0.96 - 1.15 |
THE COMPANY AND SUMMARY OF SI19
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Fair Value Assumptions (Details) - Warrants | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Assumptions: | ||
Expected life | 3 years | 3 years |
Expected volatility | 60.00% | 60.00% |
Dividends | 0.00% | 0.00% |
Minimum | ||
Assumptions: | ||
Risk-free interest rate | 1.50% | 1.50% |
Maximum | ||
Assumptions: | ||
Risk-free interest rate | 1.60% | 1.60% |
THE COMPANY AND SUMMARY OF SI20
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary Of Level 3 Liabilities (Details) - Derivative liabilities $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the Beginning | $ 0 |
Fair value of derivative liabilities at issuance | 3,313 |
Fair value change of derivative liabilities | (1,530) |
Balance at the end | $ 1,783 |
THE COMPANY AND SUMMARY OF SI21
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net income (loss) to common stockholders | $ (4,237) | $ (4,611) | $ 4,958 | $ (10,355) |
Denominator: | ||||
Weighted-average common shares outstanding, basic (in shares) | 27,327,936 | 22,853,865 | 24,588,296 | 22,775,918 |
Weighted-average common shares outstanding, diluted (in shares) | 27,327,936 | 22,853,865 | 26,138,201 | 22,775,918 |
Basic (in dollars per share) | $ (0.16) | $ (0.20) | $ 0.20 | $ (0.45) |
Diluted (in dollars per share) | $ (0.16) | $ (0.20) | $ 0.19 | $ (0.45) |
Antidilutive securities (in shares) | 4,438,059 | 2,150,579 | ||
Restricted Stock Units | ||||
Denominator: | ||||
Antidilutive securities (in shares) | 462,046 | 462,046 | 462,046 | |
Securities that are potentially dilutive to earnings per share (in shares) | 462,046 | |||
Stock options | ||||
Denominator: | ||||
Antidilutive securities (in shares) | 1,087,859 | 1,087,859 | 1,087,859 | |
Securities that are potentially dilutive to earnings per share (in shares) | 1,087,859 |
THE COMPANY AND SUMMARY OF SI22
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Potentially Dilutive Shares (Details) - shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 4,438,059 | 2,150,579 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,620,507 | 1,718,832 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 2,355,506 | 0 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 462,046 | 431,747 |
THE COMPANY AND SUMMARY OF SI23
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Valuation Allowance [Line Items] | ||||
Net operating loss carryforwards utilized during period | $ 7,700,000 | |||
Provision for income taxes | $ 0 | $ 0 | 269,000 | $ 0 |
Net operating loss carryforwards | ||||
Valuation Allowance [Line Items] | ||||
Reduction to the deferred tax valuation allowance | $ 2,600,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Future Minimum Payments (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2017 (remaining three months) | $ 172 |
2,018 | 459 |
Total | $ 631 |
COMMITMENTS AND CONTINGENCIES25
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | Aug. 24, 2017USD ($) | Apr. 21, 2017USD ($)installment | Jun. 08, 2015USD ($) | Nov. 21, 2013USD ($) | Sep. 30, 2017USD ($)installment | Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Schedule of Investments [Line Items] | ||||||||||
Deferred rent payable | $ 41,000 | $ 41,000 | $ 69,000 | |||||||
Rent expense | 197,000 | $ 188,000 | 573,000 | $ 586,000 | ||||||
Rental income | 89,000 | 88,000 | 267,000 | 260,000 | ||||||
Cash investments | 0 | 550,000 | ||||||||
Initial payment made | 2,000,000 | 0 | ||||||||
Avira, Inc. | ||||||||||
Schedule of Investments [Line Items] | ||||||||||
Sale of patent in license agreement | $ 3,900,000 | $ 3,600,000 | ||||||||
Number of quarterly installments | installment | 12 | 11 | ||||||||
Installment amount payable | $ 325,000 | |||||||||
Payable period of agreement | 3 years | |||||||||
Venture Capital Funds | ||||||||||
Schedule of Investments [Line Items] | ||||||||||
Capital commitment | $ 5,000,000 | $ 2,700,000 | 2,700,000 | |||||||
Percentage of limited partnership interest | 10.00% | |||||||||
Cash distribution | $ 800,000 | |||||||||
Gross entitlement | 1,300,000 | |||||||||
Remainder of gross entitlement reinvested | 500,000 | |||||||||
Cash investments | 2,300,000 | |||||||||
Total investment | $ 2,600,000 | |||||||||
Distribution received from JVP | $ 130,000 | |||||||||
Patents | Finjan Blue | ||||||||||
Schedule of Investments [Line Items] | ||||||||||
Patents acquired | $ 8,500,000 | |||||||||
Initial payment made | 2,000,000 | |||||||||
Cash payable over subsequent four years | $ 6,500,000 | |||||||||
Amortization of intangible assets | $ 200,000 | $ 0 | $ 200,000 | $ 0 | ||||||
Useful life of intangible asset | 4 years |
COMMITMENTS AND CONTINGENCIES26
COMMITMENTS AND CONTINGENCIES - Sublease Income (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Operating Leased Assets [Line Items] | |
2017 (remaining three months) | $ 75 |
2,018 | 127 |
Total future minimum sublease payments | 202 |
New York | |
Operating Leased Assets [Line Items] | |
2017 (remaining three months) | 42 |
2,018 | 127 |
Total future minimum sublease payments | 169 |
Menlo Park | |
Operating Leased Assets [Line Items] | |
2017 (remaining three months) | 33 |
2,018 | 0 |
Total future minimum sublease payments | $ 33 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Legal - Litigation / Licensing | $ 100 | $ 1,195 |
Compensation | 194 | 560 |
Other | 210 | 77 |
Total | $ 504 | $ 1,832 |
LICENSE, SETTLEMENT AND RELEA28
LICENSE, SETTLEMENT AND RELEASE AGREEMENT (Details) - Licensing Agreements - USD ($) $ in Thousands | Apr. 21, 2017 | Mar. 31, 2017 | Mar. 24, 2017 | Mar. 02, 2017 | Dec. 28, 2016 | Jun. 30, 2016 | Jun. 06, 2016 | Jun. 03, 2016 | Sep. 30, 2017 | Mar. 31, 2019 | Jan. 31, 2019 | Mar. 31, 2018 | Jan. 31, 2018 | Jan. 03, 2018 |
EU Licensee | ||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Sale of patent in license agreement | $ 4,900 | |||||||||||||
Receivable related to license agreement | $ 2,300 | |||||||||||||
Cash received from license agreement | $ 2,300 | |||||||||||||
EU Licensee | Forecast | ||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Receivable related to license agreement | $ 1,300 | $ 1,300 | ||||||||||||
Sophos Group | ||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Receivable related to license agreement | 2,500 | |||||||||||||
Cash received from license agreement | $ 15,000 | |||||||||||||
License revenue | $ 15,000 | |||||||||||||
Sophos Group | Forecast | ||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Receivable related to license agreement | $ 1,250 | $ 1,250 | ||||||||||||
Avast Software | ||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Cash received from license agreement | $ 7,745 | |||||||||||||
Veracode | ||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Cash received from license agreement | $ 2,000 | |||||||||||||
Proofpoint and Armorize Technologies | ||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Sale of patent in license agreement | $ 10,900 | |||||||||||||
Receivable related to license agreement | $ 3,300 | |||||||||||||
Cash received from license agreement | $ 3,300 | $ 4,300 | ||||||||||||
License revenue | $ 3,300 | $ 4,300 | ||||||||||||
License fee receivable | $ 10,900 | |||||||||||||
Proofpoint and Armorize Technologies | Forecast | ||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Receivable related to license agreement | $ 3,300 |
STOCKHOLDERS' EQUITY - Redempti
STOCKHOLDERS' EQUITY - Redemption of Series A Preferred Stock (Details) - Series A preferred shares $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($)shares | |
Class of Stock [Line Items] | |
Value of shares redeemed | $ 13.8 |
Numbers of shares redeemed (in shares) | shares | 83,502 |
Reduction in the value of the preferred stock | $ 8.4 |
Reduction in the accretive value of the preferred stock | 5.4 |
Aggregate proceeds from private placement | $ 10.2 |
STOCKHOLDERS' EQUITY - Series A
STOCKHOLDERS' EQUITY - Series A-1 Preferred Stock (Details) - Series A-1 preferred shares $ / shares in Units, $ in Millions | Jun. 19, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($) |
Class of Stock [Line Items] | ||
Multiplier of the OPP | 2.8 | |
Multiplier of the OPP if redeemed within 180 days of closing | 1.2375 | |
Multiplier of the OPP if redeemed between 180 and 270 of closing | 1.3 | |
Multiplier of the OPP if redeemed between 270 and 360 days of closing | 1.34 | |
Multiplier of the OPP if redeemed between 360 days and 720 days of closing | 1.575 | |
Multiplier of the OPP if redeemed thereafter | 1.75 | |
Multiplier thereafter OPP for every 90 day period the preferred remains outstanding | 0.125 | |
Deemed dividend | $ 3.6 | |
Private Placement | ||
Class of Stock [Line Items] | ||
Shares issued | shares | 153,000 | |
Price per share (in dollars per share) | $ / shares | $ 100 | |
Aggregate proceeds from private placement | $ 15.3 | |
Issuance costs | $ 1 |
STOCKHOLDERS' EQUITY - Warrant
STOCKHOLDERS' EQUITY - Warrant (Details) - USD ($) | Jun. 19, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jul. 25, 2017 | Jun. 30, 2017 | Jun. 29, 2017 | Dec. 31, 2016 |
Class of Warrant or Right [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares issued (in shares) | 27,483,994 | 27,483,994 | 23,102,728 | ||||||
Series A-1 warrant liability | $ 3,300,000 | $ 3,313,000 | $ 0 | $ 3,313,000 | $ 0 | ||||
Change in fair value of warrant liability | (1,530,000) | $ 0 | (1,530,000) | $ 0 | |||||
Aggregate intrinsic value of the warrant | $ 0 | $ 0 | |||||||
Common Stock Warrant | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||
Right to acquire variable amount of common stock, term | 15 months | ||||||||
Common Stock Warrant | Soryn HLDR | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 3.18 | $ 3.18 | $ 3.18 | ||||||
Term of warrant | 3 years | 3 years | |||||||
Common stock | Common Stock Warrant | Soryn HLDR | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Common stock warrant purchased (in shares) | 2,355,506 | 2,300,000 | 2,000,000 | ||||||
Common stock, shares issued (in shares) | 2,000,000 | 46,370 | 309,136 | ||||||
Series A-1 warrant liability | $ 1,800,000 | $ 1,800,000 | |||||||
Change in fair value of warrant liability | $ 1,500,000 |
STOCKHOLDERS' EQUITY - Common S
STOCKHOLDERS' EQUITY - Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 21, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 29, 2017 | Jun. 19, 2017 | Dec. 31, 2016 |
Subsidiary, Sale of Stock [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Proceeds from common stock issuance | $ 11,951 | $ 0 | |||||
Underwriting Agreement | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Proceeds from common stock issuance | $ 10,400 | ||||||
Over-allotment option | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Proceeds from common stock issuance | $ 1,600 | ||||||
Common stock | Underwriting Agreement | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
New share issues (in shares) | 3,600,000 | ||||||
Price per share (in dollars per share) | $ 3.15 | ||||||
Price per share, net proceeds (in dollars per share) | $ 2.90 | ||||||
Common stock | Over-allotment option | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
New share issues (in shares) | 540,000 | ||||||
Common Stock Warrant | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | ||||||
Soryn HLDR | Common Stock Warrant | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Exercise price (in dollars per share) | $ 3.18 | $ 3.18 | |||||
Soryn HLDR | Common Stock Warrant | Common stock | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Common stock warrant purchased (in shares) | 2,300,000 | 2,000,000 | 2,355,506 | ||||
Soryn HLDR | Common Stock Warrant | Common stock | Over-allotment option | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of share called by warrant, increase | 50,000 |
STOCK BASED COMPENSATION - Narr
STOCK BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 21, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Jul. 10, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ 221 | $ 229 | $ 641 | $ 682 | |||
Aggregate intrinsic value, outstanding | 3,900 | 3,900 | |||||
Aggregate intrinsic value, exercisable | $ 2,400 | $ 2,400 | |||||
Options exercised during period (in shares) | 21,840 | 141,840 | |||||
Proceeds from exercise of stock options | $ 200 | $ 229 | $ 111 | ||||
Compensation cost not yet recognized | $ 1,100 | $ 1,100 | |||||
Weighted-average period to recognized compensation cost | 1 year 5 months 24 days | ||||||
Weighted-average exercise price (in dollars per share) | $ 1.61 | ||||||
Weighted-average contractual term, options granted | 10 years | ||||||
Expected dividend yield | 0.00% | 0.00% | |||||
Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted (in shares) | 0 | 165,000 | |||||
Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
RSUs granted (in shares) | 176,212 | 376,212 | |||||
2014 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock authorized for issuance (in shares) | 2,196,836 | ||||||
Increase in shares authorized (in shares) | 1,000,000 | ||||||
Number of shares available for issuance | 1,670,276 | 1,670,276 | |||||
2014 Plan | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
RSUs issued (in shares) | 1,213,084 | ||||||
RSUs outstanding (in shares) | 462,046 | 462,046 | |||||
2014 Plan | Restricted Stock Units | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period (in years) | 3 years | ||||||
2014 Plan | Restricted Stock Units | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period (in years) | 4 years | ||||||
2013 and 2014 Plans | Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options outstanding (in shares) | 1,620,507 | 1,620,507 | 1,607,347 | ||||
Options granted (in shares) | 165,000 | ||||||
Options exercised during period (in shares) | 141,840 | ||||||
One year anniversary | 2014 Plan | Restricted Stock Units | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 25.00% | ||||||
One year anniversary | 2014 Plan | Restricted Stock Units | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 33.00% |
STOCK BASED COMPENSATION - Awar
STOCK BASED COMPENSATION - Awards Outstanding (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017shares | Sep. 30, 2017shares | |
Number of Options Outstanding and Exercisable | ||
Options exercised (in shares) | (21,840) | (141,840) |
Stock options | ||
Number of Options Outstanding and Exercisable | ||
Options granted (in shares) | 0 | 165,000 |
Restricted Stock Units | ||
Number of RSUs Outstanding | ||
Beginning balance, non vested (in shares) | 185,260 | |
Shares granted (in shares) | 176,212 | 376,212 |
Shares vested (in shares) | (99,426) | |
Shares forfeited (in shares) | 0 | |
Shares expired (in shares) | 0 | |
Ending balance, non vested (in shares) | 462,046 | 462,046 |
2013 and 2014 Plans | Stock options | ||
Number of Options Outstanding and Exercisable | ||
Beginning balance, outstanding (in shares) | 1,607,347 | |
Options granted (in shares) | 165,000 | |
Options exercised (in shares) | (141,840) | |
Options forfeited (in shares) | (10,000) | |
Options expired (in shares) | 0 | |
Ending balance, outstanding (in shares) | 1,620,507 | 1,620,507 |
Exercisable (in shares) | 1,255,822 | 1,255,822 |
STOCK BASED COMPENSATION - Fai
STOCK BASED COMPENSATION - Fair Value Assumptions (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years | 7 years |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 132.00% | 149.00% |
Risk-free rate | 1.82% | 1.22% |
Weighted-average grant date fair value per option (in dollars per share) | $ 1.45 | $ 0.96 |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 141.00% | 152.00% |
Risk-free rate | 2.19% | 1.26% |
Weighted-average grant date fair value per option (in dollars per share) | $ 3.32 | $ 1.15 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Legal services | Chairman | |||||
Related Party Transaction [Line Items] | |||||
Legal fees | $ 38 | $ 38 | $ 114 | $ 114 | |
Amount due to firm | $ 13 | $ 13 | $ 88 | ||
Social media and investor related services | |||||
Related Party Transaction [Line Items] | |||||
Fees related to social media and investor related services | $ 22 | ||||
Social media and investor related services | Chief Financial Officer | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 50.00% | 50.00% |
LITIGATION, CLAIMS AND ASSESS37
LITIGATION, CLAIMS AND ASSESSMENTS (Details) | Sep. 21, 2016USD ($) | Jul. 26, 2016patent | Mar. 29, 2016inter_parts_review | Mar. 11, 2016patentinter_parts_review | Feb. 26, 2016patentinter_parts_review | Jan. 14, 2016patentinter_parts_review | Dec. 15, 2015patent | Dec. 10, 2015patent | Sep. 10, 2015inter_parts_review | Aug. 20, 2015inter_parts_review | Aug. 04, 2015USD ($) | Sep. 07, 2016USD ($) | Jun. 10, 2016petition | May 26, 2016petition | Apr. 29, 2016petition | Apr. 27, 2016petition | Mar. 01, 2016patent | Jan. 19, 2016petition | Nov. 06, 2015petition | Nov. 05, 2015petition | Sep. 11, 2015petition | Jul. 03, 2015petition |
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of asserted patents, Ex Parte Reexamination | 2 | |||||||||||||||||||||
Number of patents, newly issued | 2 | |||||||||||||||||||||
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 IPRs | 5 | |||||||||||||||||||||
Number of patents asserted | 7 | |||||||||||||||||||||
Finjan, Inc. v. Symantec Corp | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of IPRs | inter_parts_review | 11 | 8 | ||||||||||||||||||||
Finjan, Inc. v. Symantec Corp | Denied | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of IPRs | 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 | |||||||||||||||||||||
ESET, LLC v. Finjan, Inc. | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents asserted | 6 | |||||||||||||||||||||
Number of patents first-to-file | 5 | |||||||||||||||||||||
Blue Coat Systems, Inc. | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of petitions filed for IPR | petition | 2 | 2 | 2 | |||||||||||||||||||
Blue Coat Systems, Inc. | Finjan, Inc. v. Blue Coat Systems, Inc. | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Bond amount | $ | $ 40,086,172.78 | |||||||||||||||||||||
Symantec Corp | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of petitions filed for IPR | petition | 3 | 2 | 2 | |||||||||||||||||||
Palo Alto Networks, Inc | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of IPRs | inter_parts_review | 2 | |||||||||||||||||||||
Number of petitions filed for IPR | petition | 2 | 2 | ||||||||||||||||||||
Proofpoint and Armorize Technologies | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of petitions filed for IPR | petition | 2 |