Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 07, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | FINJAN HOLDINGS, INC. | ||
Trading Symbol | FNJN | ||
Entity Central Index Key | 0001366340 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Common Stock, Shares Outstanding | 27,595,840 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 71,238,731 | ||
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 32,011 | $ 41,169 |
Short term investments | 11,303 | 0 |
Accounts receivable | 2,550 | 2,606 |
Prepaid expenses and other current assets | 6,580 | 765 |
Total current assets | 52,444 | 44,540 |
Property and equipment, net | 99 | 140 |
Investments | 3,518 | 2,618 |
Intangible assets, net | 5,507 | 7,748 |
Deferred income taxes | 2,811 | 6,201 |
Other assets, non-current | 214 | 0 |
Total Assets | 64,593 | 61,247 |
Current Liabilities: | ||
Accounts payable | 4,394 | 4,646 |
Accounts payable, related parties | 163 | 112 |
Accrued expenses | 394 | 1,303 |
Accrued income taxes | 0 | 13 |
Warrant liability | 0 | 1,096 |
Other liabilities, current | 1,500 | 1,086 |
Total current liabilities | 6,451 | 8,256 |
Other liabilities, non-current | 3,463 | 5,500 |
Total Liabilities | 9,914 | 13,756 |
Commitments and contingencies (Note 7) | ||
Stockholders’ Equity | ||
Preferred stock - $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding (which excludes 0 and 153,000 shares of Redeemable Preferred Stock at December 31, 2018 and 2017, respectively) at December 31, 2018 and 2017 | 0 | 0 |
Common stock - $0.0001 par value; 80,000,000 shares authorized; 27,568,656 and 27,707,328 shares issued and outstanding at December 31, 2018 and 2017 | 3 | 3 |
Additional paid-in capital | 28,534 | 22,968 |
Retained earnings | 26,142 | 5,555 |
Total Stockholders’ Equity | 54,679 | 28,526 |
Total Liabilities and Stockholders’ Equity | 64,593 | 61,247 |
Series A-1 Preferred Stock | ||
Redeemable Preferred Stock | ||
Redeemable Preferred Stock | $ 0 | $ 18,965 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (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 (shares) | 80,000,000 | 80,000,000 |
Common stock, shares issued (in shares) | 27,568,656 | 27,707,328 |
Common stock, shares outstanding (in shares) | 27,568,656 | 27,707,328 |
Series A-1 Preferred Stock | ||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable preferred stock, shares issued (in shares) | 0 | 153,000 |
Redeemable preferred stock, shares outstanding (in shares) | 0 | 153,000 |
Redeemable preferred stock, liquidation preference | $ 0 | $ 19,890 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Revenues | $ 82,300 | $ 50,484 | $ 18,387 |
Cost of revenues | 15,271 | 6,008 | 3,037 |
Gross profit | 67,029 | 44,476 | 15,350 |
Operating Expenses: | |||
Selling, general and administrative | 32,190 | 28,596 | 14,427 |
Research and development | 2,094 | 1,473 | 570 |
Total operating expenses | 34,284 | 30,069 | 14,997 |
Income from operations | 32,745 | 14,407 | 353 |
Other Income / (Expense) | |||
Interest and other income | 319 | 27 | 0 |
Interest expense | (829) | 0 | 0 |
Change in fair value of warrant liability | (3,445) | 2,217 | 0 |
Total other income (loss) | (3,955) | 2,244 | 0 |
Income before provision for income taxes | 28,790 | 16,651 | 353 |
Income tax provision (benefit) | 8,052 | (6,160) | 3 |
Net Income | 20,738 | 22,811 | 350 |
Accretion of preferred stock | (925) | (4,882) | (6,789) |
Net income (loss) attributable to common stockholders | $ 19,813 | $ 17,929 | $ (6,439) |
Income (Loss) from Continuing Operations, Per Basic Share | $ 0.75 | $ 0.90 | $ 0.02 |
Income (Loss) from Continuing Operations, Per Diluted Share | 0.73 | 0.87 | 0.02 |
Net income (loss) per share applicable to common stockholders, basic (in dollars per share) | 0.72 | 0.71 | (0.28) |
Net income (loss) per share applicable to common stockholders, diluted (in dollars per share) | $ 0.70 | $ 0.68 | $ (0.28) |
Weighted average common shares outstanding, basic (in shares) | 27,484,655 | 25,353,966 | 22,837,263 |
Weighted average common shares outstanding, diluted (in shares) | 28,416,512 | 26,269,727 | 22,837,263 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Series A Preferred Stock | Series A-1 Preferred Stock | Common Stock | Additional Paid-In Capital | Additional Paid-In CapitalSeries A Preferred Stock | Additional Paid-In CapitalSeries A-1 Preferred Stock | Retained Earnings / (Accumulated Deficit) |
Balance, beginning amount at Dec. 31, 2015 | $ 6,342 | $ 2 | $ 23,946 | $ (17,606) | ||||
Balance, beginning shares (shares) at Dec. 31, 2015 | 22,640,611 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | 872 | 872 | ||||||
Issuance of common stock from exercise of stock options (shares) | 462,117 | |||||||
Issuance of common stock from exercise of stock options | 111 | 111 | ||||||
Accretion of preferred stock | $ (6,789) | $ 0 | $ (6,789) | |||||
Net Income | 350 | 350 | ||||||
Balance, ending amount at Dec. 31, 2016 | 886 | $ 2 | 18,140 | (17,256) | ||||
Balance, ending shares (shares) at Dec. 31, 2016 | 23,102,728 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | $ 843 | 843 | ||||||
Issuance of common stock from exercise of stock options (shares) | 464,600 | 464,600 | ||||||
Issuance of common stock from exercise of stock options | $ 229 | 229 | ||||||
Accretion of preferred stock | (292) | (4,590) | $ (292) | $ (4,590) | ||||
Net Income | 22,811 | 22,811 | ||||||
Issuance of warrants classified as a liability | (3,313) | (3,313) | ||||||
Sale of Common Stock (shares) | 4,140,000 | |||||||
Sale of Common Stock | 11,952 | $ 1 | 11,951 | |||||
Balance, ending amount at Dec. 31, 2017 | 28,526 | $ 3 | 22,968 | 5,555 | ||||
Balance, ending shares (shares) at Dec. 31, 2017 | 27,707,328 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | $ 1,593 | 1,593 | ||||||
Issuance of common stock from exercise of stock options (shares) | 547,820 | 547,820 | ||||||
Issuance of common stock from exercise of stock options | $ 357 | 357 | ||||||
Accretion of preferred stock | $ 0 | $ (925) | $ (925) | |||||
Net Income | 20,738 | 20,738 | ||||||
Warrant liability reclassifications | 4,541 | 4,541 | ||||||
Shares repurchased (shares) | (686,492) | |||||||
Shares repurchase | (2,023) | (2,023) | ||||||
Balance, ending amount at Dec. 31, 2018 | $ 54,679 | $ 3 | $ 28,534 | $ 26,142 | ||||
Balance, ending shares (shares) at Dec. 31, 2018 | 27,568,656 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows From Operating Activities | |||
Net Income | $ 20,738 | $ 22,811 | $ 350 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Depreciation and amortization | 1,800 | 815 | 63 |
Accretion of intangible assets | 1,483 | 0 | 0 |
Change in fair value of warrant liability | 3,445 | (2,217) | 0 |
Deferred income taxes | 2,712 | (6,201) | 0 |
Stock-based compensation expense | 1,593 | 843 | 872 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 2,606 | (1,540) | (1,066) |
Prepaid expenses and other assets | (6,029) | (152) | 34 |
Accrued expenses | (909) | (529) | 1,382 |
Accounts payable | (252) | 2,788 | (362) |
Accounts payable - related parties | 51 | 24 | 71 |
Accrued income taxes | (13) | 10 | (6) |
Other liabilities | (1,624) | (66) | (10) |
Net Cash Provided by Operating Activities | 25,601 | 16,586 | 1,328 |
Cash Flows From Investing Activities | |||
Purchase of intangible assets | (1,000) | (2,000) | 0 |
Purchases of additional investment | (900) | 0 | (550) |
Purchases of marketable securities | (11,303) | 0 | 0 |
Proceeds from investments | 0 | 127 | 0 |
Purchase of property and equipment | 0 | 0 | (9) |
Net Cash Used in Investing Activities | (13,203) | (1,873) | (559) |
Cash Flows From Financing Activities | |||
Redemption of Preferred shares | (19,890) | (13,778) | (2,793) |
Proceeds from Common share offering, net of issuance costs | 0 | 11,952 | 0 |
Repurchase of Finjan Holdings shares | (2,023) | 0 | 0 |
Proceeds from exercise of stock options | 357 | 229 | 111 |
Net Cash (Used in) Provided by Financing Activities | (21,556) | 12,778 | 6,808 |
Net Increase Cash and Cash Equivalents | (9,158) | 27,491 | 7,577 |
Cash and Cash Equivalents - Beginning | 41,169 | 13,678 | 6,101 |
Cash and Cash Equivalents - Ending | 32,011 | 41,169 | 13,678 |
Supplemental Disclosures of Cash Flow Information: | |||
Cash paid for income taxes | 10,700 | 30 | 0 |
Non-cash investing and financing activities: | |||
Series A-1 warrant liability | 0 | 3,313 | 0 |
Patent purchase in exchange for payable | 0 | 6,500 | 0 |
Changes in accounts receivable, adoption of ASC606 | (2,606) | 1,540 | 1,066 |
Reclassification of warrant liability to equity | 4,541 | 0 | 0 |
Series A Preferred Stock | |||
Cash Flows From Financing Activities | |||
Proceeds from the sale of Series Preferred shares, net of issuance costs | 0 | 0 | 9,490 |
Non-cash investing and financing activities: | |||
Accretion of Preferred Stock | 0 | 292 | 6,789 |
Series A-1 Preferred Stock | |||
Cash Flows From Financing Activities | |||
Proceeds from the sale of Series Preferred shares, net of issuance costs | 0 | 14,375 | 0 |
Non-cash investing and financing activities: | |||
Accretion of Preferred Stock | 925 | 4,590 | 0 |
Accounting Standards Update 2014-09 | |||
Changes in operating assets and liabilities: | |||
Accounts receivable | (2,550) | 0 | 0 |
Non-cash investing and financing activities: | |||
Changes in accounts receivable, adoption of ASC606 | 2,550 | 0 | 0 |
Changes in deferred tax, adoption of ASC606 | $ 678 | $ 0 | $ 0 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | ORGANIZATION AND OPERATIONS ORGANIZATION Finjan Holdings, Inc. (the “Company” or “Finjan Holdings”), a Delaware corporation, and its wholly owned subsidiaries, Finjan, Inc. (“Finjan”), Finjan Blue, Inc. ("Finjan Blue") and Finjan Mobile, Inc. ("Finjan Mobile") operates a cybersecurity business focused in three business lines: intellectual property licensing and enforcement, mobile security application development and investing in cybersecurity technologies and intellectual property. Licensing and enforcement of the Company's cybersecurity patent portfolio is operated, through its wholly-owned subsidiaries Finjan and Finjan Blue. Revenues and operations are concentrated in Finjan; other subsidiaries were immaterial to the consolidated financial statements for the years ended December 31, 2018, 2017 and 2016. Our subsidiary CybeRisk was formed in 2015 to deliver cyber security advisory services, however in 2018, the Company exited this business. Revenues and operations from CybeRisk were immaterial to the consolidated financial statements for the years ended December 31, 2018, 2017 and 2016. The Company’s common stock has been trading on the NASDAQ Capital Market ("NASDAQ") since May 2014. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. USE OF ESTIMATES The preparation of financial statements in conformity with US Generally Accepted Accounting Principles ("US GAAP"), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to derivative liabilities, stock-based compensation expense, impairment of long-lived assets, the determination of the economic useful life of property and equipment, income taxes and valuation allowances against net deferred tax assets. Management bases its estimates on historical experience or on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid instruments with original maturities of three months or less when purchased to be cash equivalents. Included in cash and cash equivalents are demand deposits and money market accounts. SHORT TERM INVESTMENTS Investments consist of U.S. Treasury Bills, which are classified as held-to-maturity, Certificates of Deposit and other Corporate Debt Securities. The Company determines the appropriate balance sheet classification of its investments at the time of purchase and evaluates the classification at each balance sheet date. All of the Company’s investments mature within the next twelve months. Unrealized gains and losses are de minimis . As of December 31, 2018, the carrying value of the Company’s U.S. Treasury Bills approximates their fair value due to their short-term maturities. CONCENTRATIONS OF CREDIT RISK The Company maintains substantially all of its cash and cash equivalents in financial institutions located in the United States. The Company also has certain bank accounts with minimal balances in Israel. At times, the Company’s cash and cash equivalent balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced any losses in such accounts. As of December 31, 2018 , and 2017 , substantially all of the Company’s cash and cash equivalents and short term investments are uninsured. During 2018 , revenues generated by the Company were derived from three license agreements that the Company entered into with third parties in 2018. Two licenses comprised 95% of the Company's revenue for 2018. During 2017, revenues generated by the Company were derived from six license agreements that the Company entered into with third parties in 2017. Two licenses comprised 67% of the Company's revenue for 2017. During 2016, revenues generated by the Company were derived from 3 license agreements that the Company entered into with third parties in 2016. One license comprised 59% of the Company's revenue for 2016. See “Note 9 - License, Settlement and Release Agreement.” ALLOWANCE FOR DOUBTFUL ACCOUNTS The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company does not currently require any collateral for accounts receivable. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The Company did not record an allowance for doubtful accounts as of December 31, 2018 and 2017, respectfully. Bad debt expense for the years ended December 31, 2018 , 2017 and 2016 was nil . PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the related assets, which range from 3 to 7 years. Leasehold improvements are amortized on the straight-line method over the shorter of the remaining lease term or the estimated useful economic lives of the related assets using the straight-line method. The costs of additions and betterments are capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. INVESTMENTS Investments that are not controlled, and over which the Company does not have the ability to exercise significant influence are accounted for under the cost method. All of the Company’s investments as of December 31, 2018 and 2017 and are accounted for under the cost method. IMPAIRMENT OF LONG-LIVED ASSETS Intangible assets with finite lives are amortized over their estimated useful lives. The Company reviews these assets for impairment periodically or whenever potential indicators of impairment exist. 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 Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") Under Accounting Standards Codification ("ASC") 605, revenues were 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. This guidance was followed prior to January 1, 2018, Under ASU 2014-09 revenue is recognized when a customer obtains control of promised goods and services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services. In addition, ASU 2014-09 requires disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The core principle of the standard is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company should apply the following five step model: l Identify the contract with the customer; l Identify the performance obligations in the contract; l Determine the transaction price; l Allocate the transaction price to the performance obligations in the contract; and l Recognize revenue when (or as) each performance obligation is satisfied. 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. The Company adopted ASU 2014-09 using the modified retrospective method effective January 1, 2018. For further details, see "Recently Issued Accounting Pronouncements adopted January 1, 2018" below. RESEARCH AND DEVELOPMENT EXPENSE The Company expenses the cost of research and development as incurred. Research and development expenses consist primarily of professional services costs associated with the development of mobile security application products. SOFTWARE DEVELOPMENT COSTS Software development costs are expensed as incurred. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Company’s products are released soon after technological feasibility has been established. Software development costs incurred subsequent to achievement of technological feasibility were not material and were expensed as incurred during the years ended December 31, 2018, 2017 and 2016. FOREIGN CURRENCY Foreign currency denominated assets and liabilities of foreign subsidiaries, where the local currency is the functional currency, are translated into U.S. dollars using the exchange rates in effect at the balance sheet dates, and income and expenses are translated using average exchange rates during the period. Foreign currency translation gains (losses) were immaterial for the years ended December 31, 2018, 2017 and 2016. 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 in June 2017, the Company issued a warrant with variable consideration through September 2018. 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 through the expiration of the variable consideration. 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. Upon expiration of the variable consideration the warrant liability at that time of $4.5 million was reclassified to equity. 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 risk-free interest rate used is the United States Treasury rate for the day of the grant having a term equal to the life of the equity instrument. The volatility is a measure of the amount by which the Company’s share price has fluctuated or is expected to fluctuate. The dividend yield is zero percent as the Company has not made any dividend payment and has no plans to pay dividends in the foreseeable future. The Company determines the expected term of its warrant awards by using the contractual term. The principal assumptions used in applying the model were as follows: Upon 2018 Expiration December 31, 2017 Assumptions: Risk-free interest rate 2.3% - 2.5% 1.5% - 2.0% Expected life 1.8 - 2.2 Years 2.5 - 3 Years Expected volatility 65% - 70% 50% - 60% Dividends 0% 0% FAIR VALUE OF FINANCIAL INSTRUMENTS The reported amounts of the Company’s financial instruments, including cash and cash equivalents, short term investments, accounts receivable, accounts payable and accrued liabilities, approximate their fair value due to their short maturities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. These fair value measurements apply to all financial instruments that are measured and reported on a fair value basis. Where available, fair value is based on observable market prices or is derived from such prices. The Company uses the market approach valuation technique to value its investments. The market approach uses prices and other pertinent information generated from market transactions involving identical or comparable assets or liabilities. The types of factors that the Company may take into account in fair value pricing the investments include available current market data, including relevant and applicable market quotes. Based on the observability of the inputs used in the valuation techniques, financial instruments are categorized according to the fair value hierarchy, which ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 - Observable inputs such as quoted prices in active markets. Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the assignment of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company classifies short term investments as available-for-sale investments within Level 2 in the fair value hierarchy as it uses alternative pricing sources and models using market observable inputs to determine their fair value. These include financial and industrial securities of $10.2 million and asset backed securities of $1.1 million at December 31, 2018. Unrealized gains were immaterial as of December 31, 2018. The Company had no short term investments at December 31, 2017. The fair value measurement of the warrant issued in conjunction with the Series A-1 Preferred Stock is a derivative liability based on significant inputs not observed in the market and thus represents a Level 3 measurement. Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s Controller who reports to the Chief Financial Officer, determines valuation policies and procedures, which are reflected in the Company's assumptions in measuring fair value. 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: Years Ended 2018 2017 2016 (In thousands, except share and per share data) Numerator: Net income (loss) attributable to common stockholders $ 19,813 $ 17,929 $ (6,439 ) Denominator: Weighted-average common shares, basic 27,484,655 25,353,966 22,837,263 Weighted-average common shares, diluted* 28,416,512 26,269,727 22,837,263 Net income (loss) per common share: Basic: $ 0.72 $ 0.71 $ (0.28 ) Diluted: $ 0.70 $ 0.68 $ (0.28 ) * The diluted earnings per common share included the weighted average effect of 215,196 unvested Restricted Stock Units and 716,661 stock options that are potentially dilutive to earnings per share for the twelve months ended December 31, 2018, since the exercise price of such securities was less than the average market price during the period. Potentially dilutive common shares from employee equity plans and warrants are determined by applying the treasury stock method to the assumed exercise of warrants and share options and were excluded from the computation of diluted net income (loss) per share because their inclusion would be anti-dilutive and consist of the following: December 31, 2018 2017 2016 Stock options 822,269 1,864,292 1,607,347 Restricted stock units 13,333 — 185,260 Warrants 2,355,506 2,355,506 — Total 3,191,108 4,219,798 1,792,607 STOCK-BASED COMPENSATION The Company measures compensation cost for all employee stock-based awards at their fair values on the date of grant. Stock-based awards issued to non-employees are measured at their fair values on the date of grant and are re-measured at each reporting period through their vesting dates. When a non-employee becomes an employee and continues to vest in the award, the fair value of the individual’s award is re-measured on the date that he becomes an employee, and then is not subsequently re-measured at future reporting dates. The fair value of stock based awards is recognized as expense over the service period, net of estimated forfeitures, using the straight-line method for stock options and restricted stock. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock-based awards. INCOME TAXES The Company files consolidated income tax returns in the U.S. federal jurisdiction and is headquartered in California, formerly in New York. The federal and state income tax returns for the tax years 2013 and after remain subject to examination for federal and state taxes. The Company files state income tax returns for California and New York. The Company accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be computed annually for temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The income tax provision or benefit is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. The benefit of tax positions taken or expected to be taken in income tax returns are recognized in the financial statements if such positions are more likely than not of being sustained. As of December 31, 2018 , 2017 and 2016, an immaterial liability for unrecognized tax benefits was required to be reported. The Company does not expect its unrecognized tax benefit position to change during the next twelve months. The Company’s policy is to classify assessments, if any, for tax-related interest as interest expense and penalties as general and administrative expenses. There were no amounts accrued for penalties or interest as of, or during the years ended December 31, 2018 , 2017 and 2016. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Adopted 2018: In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09. 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 completed its analysis of the new revenue standards and has established an implementation plan and believes the systems in place are adequate to support application of this guidance. The Company adopted ASU 2014-09 January 1, 2018 using the modified retrospective method. This method required retrospective application of the new accounting standard to those contracts which were not completed as of January 1, 2018. Results for the reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The change to the current revenue policy is the timing of revenue recognition. Under the guidance ASC 605, the Company recognized revenue upon receipt of funds related to an executed agreement or funds which were received within 90 days of receipt. Under the guidance ASU 2014-09, all revenue is recognized upon execution of the agreement, including any future dated payments, which often spread over several quarters or years. The Company recorded $2.6 million to opening retained earnings of $5.6 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact primarily related to existing contracts that had 2019 payment dates. The cumulative effect of the changes made to the condensed consolidated balance sheet as of January 1, 2018 under current assets for the adoption ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows (in thousands): Balance Sheet Balance at December 31, 2017 Adjustments due to ASU 2014-09 Balance at January 1, 2018 Current Assets Accounts Receivable $ 2,606 $ 2,550 $ 5,156 Liabilities and Stockholders' Equity Retained Earnings $ 5,555 $ 2,550 $ 8,105 In accordance with the new revenue recognition standards, the impact of adoption of ASC-606 to the consolidated statement of operations and balance sheet for the period ended December 31, 2018 was as follows (in thousands): Income Statement Year ended December 31, 2018 As reported Balance without adoption - ASC606 Effect of change Revenue $ 82,300 $ 82,300 $ — Provision for income taxes 8,052 8,052 — Net income (loss) 20,738 20,738 — Balance Sheet December 31, 2018 As reported Balance without ASC-606 Effect of Change Current Assets Accounts Receivable $ 2,550 $ — $ (2,550 ) Other long-term assets (1) 678 — $ (678 ) Prepaid tax 5,429 5,429 $ — Liabilities and Stockholders' Equity Retained Earnings $ 26,142 $ 22,914 $ 3,228 (1) Deferred tax assets related to the adoption of ASC606 The Company also adopted the following standards during 2018, none of which had a material impact on the Company's consolidated financial statements: STANDARD DESCRIPTION EFFECTIVE DATE 2016-09 Compensation - Stock Compensation (Topic 718): Improvements to Employee Share- Based Payment Accounting January 1, 2018 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments January 1, 2018 2018-07 Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting June 1, 2018 Not Yet Adopted as of December 31, 2018 ASU No. 2016-02 “Leases” ("ASU 2016-02") In February 2016, the FASB issued ASU 2016-02 which requires lessees to recognize almost all leases on their balance sheet as a leased asset and a lease liability. Lessees are allowed to account for short-term leases (i.e., leases with a term of 12 months or less) off- balance sheet, consistent with current operating lease accounting. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The Company has decided to adopt ASU 2016-02 using the modified retrospective approach with a cumulative-effect adjustment recorded at the beginning of the period of adoption (January 1, 2019). Therefore, the Company will recognize and measure operating leases on the consolidated balance sheet without revising comparative period information or disclosure. The Company elected the package of practical expedients permitted under the transition guidance within the standard, which eliminates the reassessment of past leases, classification and initial direct costs. The Company elected the available practical expedients and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The new standard is expected to result in the recording of leased assets and lease liabilities for the Company’s operating leases of approximately $2.7 - $2.9 million and approximately $2.8 - $2.9 million , respectively, as of January 1, 2019. The difference between the leased assets and lease liabilities primarily represents the existing deferred rent liabilities balance, resulting from historical straight-lining of operating leases, which was effectively reclassified upon adoption to reduce the measurement of the leased assets. The adoption of ASU 2016-02 is not anticipated to have an impact on Company’s results from operations and cash flows. The adoption of new standard will result in additional disclosures around amount, timing and uncertainty of cash flows arising from leases including quantitative and qualitative information including significant judgments in applying the new standard. ASU 2017-11, "Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815) ("ASU 2017-11") In July 2017, the FASB issued ASU 2017-11, 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. The adoption of this standard is not expected to have a material impact on the consolidated financial statements and related disclosures. ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements (“ASU 2018-13”) In August 2018, the FASB issued ASU 2018-13, which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project. Adoption of this guidance is required for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating this guidance and the impact of this update on its condensed consolidated financial statements. Other recent accounting standards that have been issued or proposed by FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's consolidated financial statements upon adoption. |
Prepaid Expenses And Other Curr
Prepaid Expenses And Other Current Assets & Patents And Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Prepaid Expenses And Other Current Assets & Patents And Intangible Assets | PREPAID EXPENSES AND OTHER CURRENT ASSETS & PATENTS AND INTANGIBLE ASSETS Prepaid Expenses and Other Current Assets The components of prepaid expenses and other current assets are as presented below: As of December 31, 2018 2017 (in thousands) Prepaid income taxes $ 5,429 $ — Other prepaid expenses and other current assets 1,151 765 $ 6,580 $ 765 Patents and Intangible Assets The Company owns or possesses licenses to use its patents. The costs of maintaining the patents are expensed as incurred. 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 (see "Note 7 - Commitments and Contingencies"). Pursuant to the Patent Assignment Agreement, Finjan Blue acquired select IBM patents in the security sector. 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 over the four -year term of the agreement. On May 15, 2018, Finjan Blue, entered into a second agreement with IBM (the “May 2018 Patent Assignment Agreement”). Pursuant to the May 2018 Patent Assignment Agreement, Finjan Blue acquired 56 select issued and pending IBM patents in the security sector. The terms of the May 2018 Patent Assignment Agreement are confidential. 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 May 2018 Patent Assignment Agreement should be amortized over five years as the covenants between the parties are effective for that period. Management did not identify any triggering events which would have necessitated an impairment change. The components of these intangible assets are as follows: As of December 31, 2018 2017 (in thousands) Patents $ 26,069 $ 26,552 Less accumulated amortization (20,562 ) (18,804 ) Intangible assets, net $ 5,507 $ 7,748 Amortization expense for the years ended December 31, 2018 and 2017 was approximately $1.8 million and $0.8 million, respectively, and nil for the year ended December 31, 2016. Future amortization costs of $5.5 million will be recognized ratably over the next 4.5 years. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET The components of property and equipment were as follows: As of December 31, 2018 2017 (In thousands) Office equipment, leasehold improvements and furniture $ 308 $ 319 Less accumulated depreciation (209 ) (179 ) Property and equipment, net $ 99 $ 140 Depreciation expense for the year ended December 31, 2018 was approximately $30,000 and approximately $63,000 for both years ended December 31, 2017 and 2016. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments [Abstract] | |
Investments | INVESTMENTS On November 21, 2013, the Company made a $5 million commitment to invest in Jerusalem Venture Partners (“JVP Fund”). If and when the Company funds the entire amount of the investment, the investment will be less than a 10% limited partnership interest in which the Company will not be able to exercise control or significant influence over the fund. Accordingly, the Company has accounted for this investment under the cost method of accounting. As of December 31, 2018, $1.8 million remains outstanding on this commitment. The December 31, 2018 balance includes $0.3 million from net distribution by the JVP fund that was retained to fund future investment activities. The retained proceeds did not reduce the Company's future capital commitments to the fund. There were no identified events or changes in circumstances that are believed to have had a significant adverse effect on the fair value of the investments as of December 31, 2018 , 2017 and 2016. The following is a summary of the Company’s investments (in thousands): JVP Fund Balance - January 1, 2016 $ 2,195 Investment made during 2016 550 Balance - December 31, 2016 2,745 Cash distribution during 2017 (127 ) Balance - December 31, 2017 $ 2,618 Investment made during 2018 900 Balance - December 31, 2018 $ 3,518 |
Accrued Expenses and Warrant Li
Accrued Expenses and Warrant Liability | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Warrant Liability | ACCRUED EXPENSES AND WARRANT LIABILITY Accrued expenses The components of accrued expenses are as below: As of December 31, 2018 2017 (In thousands) Compensation $ 336 $ 1,233 Other 58 70 $ 394 $ 1,303 Warrant Liability A roll forward of the Company’s Level 3 derivative liabilities is as follows (in thousands): Balance, December 31, 2016 $ — Fair value of derivative liabilities at issuance 3,313 Change in the fair value of derivative liabilities (2,217 ) Balance, December 31, 2017 1,096 Change in fair value of warrant liability 3,445 Reclassification to additional paid-in capital (4,541 ) Balance, December 31, 2018 $ — |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES OPERATING LEASES On July 19, 2018, the Company entered into an office lease agreement for its headquarters commencing October 1, 2018 through June 2023. The annual rent is approximately $0.7 million , payable in equal monthly installments, unless earlier terminated by either party in accordance with the lease. The annual rent is subject to an approximate 3.5% increase at each anniversary of the commencement date during the term of the agreement. The agreement also required a security deposit of $214,000 , which is included in other non-current assets in the accompanying condensed consolidated balance sheets. The following table sets forth the Company’s aggregate future minimum payments under its operating lease commitments as of December 31, 2018 (in thousands): Year ending December 31, 2019 $ 747 2020 $ 773 2021 $ 801 2022 $ 829 2023 $ 425 Total $ 3,575 The Company was also party to certain office lease agreements in New York, NY and Menlo Park CA, which expired during 2018 and 2017, respectively. For the years ended December 31, 2018, 2017 and 2016, aggregate rent expense was approximately $632,000 , $754,000 and $782,000 , respectively . The Company accounts for its leases under the straight-line method of accounting. Deferred rent payable was $74,000 and $36,000 as of December 31, 2018 and 2017, respectively, and is included in other current liabilities on the consolidated balance sheets. Rental income for the years ended December 31, 2018, 2017 and 2016 was $244,000 , $350,000 and $394,000 , respectively. Sublease income is recorded as a reduction in rental expense. Future minimum lease payments to be received under existing sublease agreements as of December 31, 2018 is immaterial. CONTRACTUAL OBLIGATIONS 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 use 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 December 31, 2018, the Company has a $2.0 million contractual obligation due over the next 6 quarters. Finjan Blue As described in Note 3, 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 and a second payment on August 24, 2018. As of December 31, 2018, the Company has a $5.5 million obligation due over the next 3 years, which has been recorded at its present value as a component of other liabilities on the accompanying consolidated balance sheets. 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 not 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. |
Litigation, Claims and Assessme
Litigation, Claims and Assessments | 12 Months Ended |
Dec. 31, 2018 | |
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. 4:13-cv-03133-SBA (N.D. C al) 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 was 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; 8,225,408; and 6,154,844 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. On January 12, 2018, the parties stipulated that all claims in the case be dismissed with prejudice pursuant to a confidential patent license and settlement agreement executed December 29, 2017. Finjan, Inc. v. Blue Coat Systems, Inc., Case No. 5:13-cv-03999-BLF (N.D. Cal.) ("Blue Coat I") Finjan filed a patent infringement lawsuit against Blue Coat Systems, Inc., (“Blue Coat I”) in the United States District Court for the Northern District of California on August 28, 2013, asserting that Blue Coat was 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 7,647,633 (the “Asserted Patents”) through the manufacture, use, importation, sale, and/or offer for sale of its products and services. This action was before the Honorable Judge Beth Labson Freeman. Trial commenced July 20, 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. The jury also awarded Finjan approximately $39.5 million in damages as reasonable royalties for Blue Coat's infringement, and such finding was appealed by Blue Coat to the Court of Appeals for the Federal Circuit ("Federal Circuit"). On March 5, 2018, the Court ordered, pursuant to stipulation between the parties following entry into a confidential patent license and settlement agreement, 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 II”) in the United States District Court for the Northern District of California on July 15, 2015, asserting that Blue Coat was 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; 8,566,580; 9,141,786; 9,189,621; and 9,219,755 through the manufacture, use, importation, sale, and/or offer for sale of its products and services. This action was before the Honorable Judge Beth Labson Freeman. A trial was held on October 31, 2017, that resulted in a partial verdict, followed by a retrial on certain issues on January 8, 2018. The Court declared a mistrial following the Federal Circuit’s January 10, 2018 issuance of its decision related to Blue Coat I. The Court ordered, among other things, a second retrial for February 12, 2018, which it later vacated on February 9, 2018. On March 5, 2018, the Court ordered, pursuant to stipulation between the parties following entry into a confidential patent license and settlement agreement, dismissal of all claims with prejudice. Finjan, Inc. v. Symantec Corporation, Case No. 4:14-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 was 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; 8,141,154; 6,154,844; 7,613,926; and 8,677,494 through the manufacture, use, importation, sale, and/or offer for sale of certain products and services. This action was before the Honorable Haywood S. Gilliam, Jr. On March 5, 2018, the Court ordered, pursuant to stipulation between the parties following entry into a confidential patent license and settlement agreement dated February 28, 2018, that all claims in the case be dismissed with prejudice. Finjan, Inc. v. Palo Alto Networks, Inc., Case No. 4:14-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 (the "Asserted Patents") 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. Finjan seeks entry of judgment that Palo Alto Networks has infringed, is infringing, has induced infringement and is inducing infringement of the Asserted Patents, a preliminary and permanent injunction from infringing, or inducing the infringement the Asserted 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. This action is before the Honorable Phyllis J. Hamilton. Palo Alto Networks filed several petitions for IPR's before the PTAB. The PTAB instituted review of certain patents and denied institution on other challenged patents. In particular, the PTAB instituted and subsequently determined that the challenged claims of U.S. Patent Nos. 8,141,154 and 8,225,408 were not unpatentable; upon which Palo Alto Networks appealed to the Federal Circuit. Oral argument before the Federal Circuit regarding the ‘154 and ‘408 Patents was heard June 6, 2018. On September 19, 2018, the Federal Circuit affirmed the PTAB’s holding that Palo Alto Networks failed to demonstrate that the instituted claims of the ‘408 Patent are unpatentable. On November 19, 2018, the Federal Circuit affirmed the PTAB’s holding that Palo Alto Networks failed to demonstrate that the instituted claims of the ‘154 Patent are unpatentable for IPR2015-01979, and vacated the PTAB’s decision in IPR2016-00151 and remanded the proceeding to be consistent with the Supreme Court’s decision in SAS Institute. The PTAB also instituted and subsequently determined that certain of the challenged claims of U.S. Patent No. 8,677,494 were not unpatentable, which is pending before the Federal Circuit. On May 26, 2016, the Court ordered a stay to remain in effect until the PTAB’s final determination of the instituted IPRs and the matter remains stayed pending appeal. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. ESET, LLC et al., Case No. 3:17-cv-00183-CAB (S.D. Cal.) Finjan filed a patent infringement lawsuit against ESET, LLC and ESET SPOL S.R.O. (collectively "ESET") in the United States District Court for the Northern District of California (Case No. 3:16-cv-03731-JD (N.D. Cal.)) on July 1, 2016, asserting that ESET infringes Finjan’s U.S. Patent Nos. 6,154,844; 6,804,780; 7,975,305; 8,079,086; 9189,621; and 9,219,755 (the "Asserted Patents") through the manufacture, use, importation, sale, and/or offer for sale of its products and services, including but not limited to, ESET ThreatSense, ESET Advanced Heuristic, ESET DNA Signature, Host-based Intrusion Prevention System (HIPS), and ESET LiveGrid technologies including ESET’S Home Protection, Small Office, and Business product lines and ESET Services. Finjan seeks entry of judgment that ESET has infringed and is infringing the Asserted Patents, a preliminary and permanent injunction from the infringement of the same patents, an accounting of all infringing sales and revenues, damages of no less than a reasonable royalty consistent with proof, and enhanced damages for willful infringement, costs, interest, and reasonable attorneys’ fees under 35 U.S.C. § 285. The case was transferred to the Southern District of California on January 30, 2017. ESET filed a Complaint for Declaratory Judgment against Finjan in the United States District Court for the Southern District of California on July 1, 2016, asserting that there is an actual controversy between the parties to declare that ESET does not infringe any claim of U.S. Patent No. 7,975,305 (“the ‘305 Patent”). ESET sought an entry of judgment that it has not infringed any claim of the ‘305 Patent, an injunction against Finjan from asserting any of the claims in the ‘305 Patent against ESET or any of its customers or suppliers, and a finding that the case is exceptional and an award of fees and costs under 35 U.S.C. § 285. This action is before the Honorable Cathy Ann Bencivengo. Details on procedures prior to February 2018 are disclosed in Note 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. On February 20, 2018, ESET filed a Motion to Stay Pending I nter Partes Review, which Finjan opposed. On May 7, 2018, the Court granted ESET’s Motion to Stay with regard to the ‘305 Patent only. The Court’s Scheduling Order was amended on October 4, 2018, January 4, 2019 and February 25, 2019, such that the following dates are now in effect: close of expert discovery is March 15, 2019; opening dispositive and Daubert motions are due April 23, 2019, with oppositions due on May 14, 2019, replies due on May 28, 2019, and hearings on dispositive and Daubert motions are to be determined; the final pretrial conference is scheduled for September 13, 2019; and the trial is to commence October 29, 2019. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Cisco Systems, Inc., Case No. 5:17-cv-00072-BLF (N.D. Cal.) Finjan filed a patent infringement lawsuit against Cisco Systems, Inc. (“Cisco”) in the United States District Court for the Northern District of California on January 6, 2017, asserting that Cisco infringes certain claims of Finjan’s U.S. Patent Nos. 6,154,844; 6,804,780; 7,647,633; 8,141,154; and 8,677,494 (the "Asserted Patents") through the manufacture, use, importation, sale, and/or offer for sale of its products and services, including but not limited to, Cisco’s Advanced Malware Protection, Cisco Collective Security Intelligence, Cisco Outbreak Filters, Talos Security Intelligence and Research Group, and AMP Threat Grid technologies, including Cisco AMP for Endpoints, Cisco AMP for Networks (also referred to by Cisco as “NGIPS”), Cisco AMP for ASA with FirePOWER Services, Cisco AMP Private Cloud Virtual Appliance, Cisco AMP for CWS, ESA, or WSA, Cisco AMP for Meraki MX, Cisco AMP Threat Grid. Finjan seeks entry of judgment that Cisco has infringed and is infringing the Asserted Patents, a preliminary and permanent injunction from infringing the Asserted 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. This action is before the Honorable Beth Labson Freeman. Details on procedures prior to March 2018 are disclosed in Note 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. On August 16, 2017, the Court issued a scheduling order that set opening summary judgment briefs for September 12, 2019, with oppositions due on October 3, 2019, replies due on October 17, 2019, and a hearing for the motions for summary judgment on October 31, 2019, a final pretrial conference for April 23, 2020, and trial to commence on June 1, 2020. On April 2, 2018, Finjan filed a Motion to Strike Cisco’s Affirmative Defenses of prosecution laches, ensnarement doctrine, and inequitable conduct, to which a hearing was held on August 30, 2018. On June 7, 2018, the Court held a claim construction tutorial, and on June 15, 2018, the Court held a claim construction hearing. An Order Construing Claims in U.S. Patent No's 6,154,844; 6,804,780; 7,647,633; 8,141,154; and 8,677,494 was issued on July 23, 2018. The Court held a case management conference on August 30, 2018 and confirmed the jury trial to commence on June 1, 2020. On September 13, 2018, the Court granted Finjan’s Motion to Strike Cisco’s Affirmative Defenses of prosecution laches and ensnarement doctrine, and a portion of Cisco’s inequitable conduct defense, with leave to amend. On October 4, 2018, Cisco filed its Second Amended Answer and Affirmative Defenses. On February 5, 2019, the Court issued an Order Construing Additional Claims in U.S. Patent Nos. 6,154,844; 6,804,780; and 7,647,633. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. ESET SPOL S.R.O. et al., Docket Nos. 2 Ni 53/16 (EP). 4c O 33/16 (Düsseldorf District Court and Munich Court) Finjan filed a patent infringement lawsuit against ESET SPOL. S.R.O., a Slovak Republic Corporation, and ESET Deutschland GmbH (collectively “ESET”) in the Düsseldorf District Court of Germany on July 1, 2016, asserting that ESET infringes Finjan’s European Patent No. 0 965 094 B1 (“the ‘094 Patent”), through the offering and/or delivering to customers in the Federal Republic of Germany software covered by the ‘094 Patent, including but not limited to ESET’s ThreatSense, ESET Advanced Heuristic, ESET DNA Signature, ESET LiveGrid technologies, including ESET’s Home Users, Small Office, and Business product lines and ESET services. Finjan seeks a judgment sentencing ESET to a fine for each violation of patent infringement or, alternatively imprisonment of ESET directors, cease and desist orders for offering or delivering infringing software, providing Finjan with profit information for offering or delivering infringing software, and damages, which Finjan has suffered or shall suffer as a result of ESET offering or delivering infringing software since November 1, 2008. The infringement hearing was held on October 5, 2017. On November 24, 2016, ESET filed a nullity action. Finjan responded to the nullity action contesting the nullity action completely and requesting the Court to reject the action and impose the cost of the proceedings to the claimant. The nullity order is pending. Finjan, Inc. v. Blue Coat Systems, Inc., and Blue Coat Systems GmbH., Docket Nos. 2 Ni 22/17 (EP), 4c O 57/16 (Dusseldorf District Court and Munich Court) Finjan filed a third patent infringement lawsuit against Blue Coat Systems, Inc., which was its first patent infringement suit against Blue Coat’s subsidiary Blue Coat Systems GmbH (collectively "Blue Coat"), located in Munich Germany in the Dusseldorf District Court of Germany on October 14, 2016. Finjan asserted that Blue Coat infringed Finjan’s European Patent No. 0 965 094 B1 (“the ‘094 Patent”) through the offering and/or delivering to customers in the Federal Republic of Germany software covered by the ‘094 Patent. Blue Coat filed a nullity (invalidity) action in Munich, Germany. On March 2, 2018, the parties entered into a confidential settlement agreement. On March 6, 2018, Blue Coat withdrew their nullity action in Germany. Finjan, Inc. v. SonicWall, Inc., Case No. 5:17-cv-04467-BLF (N.D. Cal.) Finjan filed a patent infringement lawsuit against SonicWall, Inc. (“SonicWall”) in the United States District Court for the Northern District of California on August 4, 2017, asserting that SonicWall is directly and indirectly infringing certain claims of Finjan’s U.S. Patent Nos. 6,154,844; 7,058,822; 6,804,780; 7,613,926; 7,647,633; 8,141,154; 8,677,494; 7,975,305; 8,225,408; and 6,965,968 (the "Asserted Patents") through the manufacture, use, sale, importation, and/or offer for sale of its products and services, including but not limited to, Appliance Products utilizing Capture ATP and/or Gateway Security Services and Email Security Products utilizing Capture ATP and/or Gateway Security Services. Finjan seeks entry of judgment that SonicWall has infringed and is infringing the Asserted Patents, a preliminary and permanent injunction from infringing the Asserted 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. This action is before the Honorable Beth Labson Freeman. On October 13, 2017, SonicWall filed a Motion to Dismiss Finjan’s Complaint for Failure to State a Claim for Willful Infringement. On May 16, 2018, the Court denied Sonicwall’s Motion to Dismiss. On May 30, 2018, SonicWall filed its Answer to Complaint. On June 20, 2018, Finjan filed a Motion to Strike SonicWall’s Seventh Affirmative Defense of inequitable conduct. Defendant’s opposition was filed on July 5, 2018, and Finjan’s reply was filed on July 12, 2018. Finjan’s Motion to Strike was heard on December 6, 2018. On September 11, 2018, the Court amended its scheduling order pursuant to the parties’ stipulation such that the claim construction hearing was held on March 1, 2019. Pursuant to the Court’s December 14, 2017 Case Management Order, a final pretrial conference is set for March 18, 2021, and a jury trial to commence on May 3, 2021. On November 2, 2018, the Court granted the parties’ stipulation to withdraw Finjan’s Motion to Strike and grant SonicWall leave to amend its answer. On November 9, 2018, SonicWall filed its Amended Answer and Affirmative Defenses. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Bitdefender Inc., et al., Case No. 4:17-cv-04790-HSG (N.D. Cal.) Finjan filed a patent infringement lawsuit against Bitdefender Inc. and Bitdefender S.R.L. (“Bitdefender”) in the United States District Court for the Northern District of California on August 16, 2017, asserting that Bitdefender is directly and indirectly infringing certain claims of Finjan’s U.S. Patent Nos. 6,804,780; 7,930,299; 8,141,154; and 8,677,494 (the "Asserted Patents") through the manufacture, use, sale, importation, and/or offer for sale of its products and services, including but not limited to, Total Security, Family Pack, Internet Security, Antivirus Plus, Security for XP and Vista, Antivirus for Mac, Mobile Security, GravityZone Enterprise Security, GravityZone Elite Security, GravityZone Advanced Business Security, GravityZone Business Security, Hypervisor Introspection, Security for AWS, Cloud Security for MSP, GravityZone for xSP, and BOX. Finjan seeks entry of judgment that Bitdefender has infringed and is infringing the Asserted Patents, a preliminary and permanent injunction from infringing the Asserted 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. This action is before the Honorable Haywood S. Gilliam, Jr. On December 13, 2017, Finjan filed a Motion to Strike Bitdefender’s Answer, Counterclaims, and Affirmative Defenses, for which a hearing was held on March 8, 2018. On December 21, 2017, Bitdefender filed a Motion to Dismiss, Or In the Alternative, to Quash the Return of Summons. Finjan filed its opposition on January 4, 2018. On January 11, 2018, the parties submitted a proposed order stipulating to Bitdefender withdrawing its Motion to Dismiss as moot, which the Court entered into on January 12, 2018. On April 17, 2018, the Court granted in part and denied in part Finjan’s Motion to Strike affirmative defenses. Specifically, the Court granted Finjan’s motion to strike defenses of prosecution laches, waiver, estoppel, unclean hands, and denied the motion to strike the affirmative defenses of inequitable conduct and prosecution history estoppel. On February 5, 2018, Bitdefender filed a Motion to Stay, which it withdrew by stipulation with Finjan on May 8, 2018. On April 5, 2018, the parties filed a Joint Claim Construction statement. Bitdefender filed its First Amended Answer and Counterclaims on May 8, 2018, and Finjan filed its Answer to Counterclaim on May 22, 2018. A claim construction hearing was held on June 6, 2018. A Claim Construction Order issued on February 14, 2019 and a further case management conference is currently set for March 12, 2019. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Juniper Networks, Inc., Case No. 3:17-cv-05659-WHA (N.D. Cal.) Finjan filed a patent infringement lawsuit against Juniper Networks, Inc. (“Juniper”) in the United States District Court for the Northern District of California on September 29, 2017, asserting that Juniper is directly and indirectly infringing certain claims of Finjan’s U.S. Patent Nos. 6,154,844; 6,804,780; 7,647,633; 7,613,926; 8,141,154; 8,677,494; 7,975,305; and 8,225,408 (the “Asserted Patents”) through the manufacture, use, sale, importation, and/or offer for sale of its products and services, including but not limited to, SRX Gateways, SRX Gateways using Sky ATP, and Contrail. Finjan seeks entry of judgment that Juniper has infringed and is infringing the Asserted Patents, has and is inducing infringement, a preliminary and permanent injunction from infringing the Asserted 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. This action is before the Honorable William H. Alsup. On February 23, 2018, the Court set the following dates: (1) on June 7, 2018, the parties to file early motions for summary judgment, for the one asserted claim each have selected as its compelling case for noninfringement or invalidity, with oppositions due June 28, 2018, and replies due July 12, 2018; and on July 26, 2018, a hearing for the summary judgment motions; (2) the last day for dispositive motions (other than the early motions for summary judgment) is April 11, 2019; (3) a pretrial conference on June 5, 2019; and (4) jury trial on July 8, 2019. On February 28, 2018, Juniper filed its Answer and Counterclaims against Finjan. On March 21, 2018, Finjan filed its Answer to Juniper’s Counterclaim. On May 31, 2018, Finjan filed a Motion for Leave to File a Second Amended Complaint to assert U.S. Patent No. 7,418,731 (“the ‘731 Patent”); after considering the parties’ briefs and oral argument, the Court granted Finjan’s Motion to File a Second Amended Complaint on July 19, 2018. The parties filed their respective opening summary judgment briefs for one asserted claim on June 7, 2018, their oppositions on June 28, 2018, and replies on July 12, 2018. Finjan moved for summary judgment of infringement on the ‘494 Patent, and Juniper moved on summary judgment of invalidity, non-infringement, and limited damages of the ‘780 Patent. A hearing on the parties’ summary judgment motions was held on July 26, 2018. Finjan also moved to dismiss Juniper’s counterclaims and strike its affirmative defenses on June 15, 2018. On July 27, 2018, Finjan filed its Second Amended Complaint to assert the ‘731 Patent. On August 9, 2018, the Court granted Juniper’s Motion for Summary Judgment of Non-infringement of the ‘780 Patent. On August 21, 2018, the parties filed a response to the Court’s August 20, 2018, order requesting supplemental briefing for summary judgment of the ‘494 Patent. On August 24, 2018, the Court granted in part Finjan’s Motion for Summary Judgment of the ‘494 Patent. On August 31, 2018, the Court converted Finjan’s motion to dismiss to a judgment on the pleadings and dismissed Juniper’s claims of prosecution laches, inequitable conduct for the ‘154 and ‘494 Patents, and ensnarement doctrine, and ordered that Juniper may seek leave to amend, and denied Finjan’s motion to dismiss unclean hands. On September 21, 2018, Juniper filed a Motion for Leave to File an Amended Answer (“Motion for Leave”). Finjan filed its Opposition to the Motion for Leave on October 5, 2018, and Juniper’s Reply re the Motion for Leave was filed on October 12, 2018. On October 29, 2018, the Court granted Juniper leave to amend its complaint with regard to inequitable conduct of the ‘494 and ‘154 Patents and denied leave to amend with regard to Juniper’s claims of prosecution laches. Juniper filed its First Amended Answer on November 5, 2018. On November 6, 2018, the Court ordered a second round of early motions for summary judgment on one asserted claim for each party, with opening motions for summary judgment filed on February 14, 2019, oppositions to be filed by March 14, 2019, and replies by April 4, 2019, with a hearing on May 2, 2019. The Court also vacated the pretrial and trial dates set for June 5, 2019, and July 8, 2019, in light of the briefing schedule for the second round of early summary judgment. A final pretrial conference for trial on the ‘494 Patent was held on December 4, 2018, and a jury trial commenced on December 10, 2018. On December 14, 2018, the jury found no infringement of Claim 10 of the ‘494 Patent. On January 10, 2019, the parties filed Motions for Judgment as a Matter of Law, Oppositions on January 24, 2019, and Replies on January 31, 2019. A trial for Juniper’s equitable defenses, counterclaims, and Section 101 defense is set for July 29, 2019. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. ZScaler, Inc., Case No. 3:17-cv-06946-JST (N.D. Cal.) Finjan filed a patent infringement lawsuit against ZScaler, Inc. (“ZScaler”) in the United States District Court for the Northern District of California on December 5, 2017, asserting that ZScaler is directly and indirectly infringing certain claims of Finjan’s U.S. Patent Nos. 6,804,780; 7,647,633; 8,677,494 and 7,975,305 (the "Asserted Patents") through the manufacture, use, sale, importation, and/or offer for sale of its products and services, including, but not limited to, ZScaler’s Internet Access Bundles (including Professional, Business, and Transformation), Private Access Bundle (including Professional Business, and Enterprise), ZScaler Enforcement Node (“ZEN”), Secure Web Gateway, Cloud Firewall, Cloud Sandbox, and Cloud Architecture products and services. Finjan seeks entry of judgment that ZScaler has and continues to infringe the Asserted Patents, has and continues to induce infringement, a preliminary and permanent injunction from infringing the Asserted Patents, an accounting of all infringing sales and revenues, damages of no less than a reasonable royalty, enhanced damages for willful infringement, costs, interest, and reasonable attorneys’ fees under 35 U.S.C. § 285. This action is before the Honorable Jon S. Tigar. On March 5, 2018, Finjan moved to strike ZScaler’s affirmative defense. ZScaler filed an Amended Answer and Counterclaims on March 29, 2018, and Finjan’s Motion to Strike was terminated as moot. On April 2, 2018, Finjan filed an Answer to ZScaler’s Counterclaim. The Court set a claim construction tutorial for May 14, 2019, and a claim construction hearing for May 28, 2019. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Trustwave Holdings, Inc., C.A. No. N18C-04-006 WCC-CCLD (Del. Super. Ct.) Finjan filed a breach of contract lawsuit against Trustwave Holdings, Inc. (“Trustwave”) in the Superior Court of Delaware on April 4, 2018, asserting that Trustwave breached a patent licensing agreement with Finjan by failing to pay owed royalties, failing to comply with audit procedures as provided by that licensing agreement, and for failing to pay for that audit. Finjan seeks entry of judgment that Trustwave be ordered to pay damages due to the breach of the agreement and the cost of the audit, including interest, and that Finjan be awarded attorneys’ fees. This action is before the Honorable William C. Carpenter, Jr. Trustwave moved to dismiss the Complaint on June 8, 2018, and filed its opening brief on June 29, 2018. Finjan opposed the Motion to Dismiss on July 30, 2018, and Trustwave filed its Reply on August 13, 2018. A hearing on the Motion to Dismiss was heard on November 19, 2018. On February 11, 2019, Judge Carpenter issued an Order denying Trustwave’s Motion to Dismiss and permitting Finjan’s Breach of Contract suit to proceed. A schedule has not yet been set in the case. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Check Point et al., Case No. 3:18-cv-02621-WHO (N.D. Cal.) Finjan filed a patent infringement lawsuit against Check Point Software Technologies Inc. and Check Point Software Technologies Ltd. (“Check Point”) in the United States District Court for the Northern District of California on May 3, 2018, asserting that Check Point is directly and indirectly infringing certain claims of Finjan’s U.S. Patent Nos. 6,154,844; 6,965,968; 7,418,731; 7,647,633; 8,079,086; 8,141,154; and 8,677,494 (the “Asserted Patents”) through the manufacture, use, sale, importation, and/or offer for sale of its products and services, including, but not limited to, Check Point’s Next Generation Firewall and Security Gateway products, Blade products, CloudGuard products, Endpoint Protection products, Advanced Threat Prevention products, Mobile Security products, ZoneAlarm products, Threat Intelligence products, Security Management and Policy Management products, ThreatCloud Managed Security Service products, Smart-1 Appliance products, products using SandBlast technology, and products utilizing the Gaia Operating System. Finjan seeks entry of judgment that Check Point has infringed, is infringing, has induced infringement and is inducing infringement of the Asserted Patents, a preliminary and permanent injunction from infringing, or inducing the infringement of the Asserted 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. This action is before the Honorable William H. Orrick. On July 16, 2018, Check Point filed its Answer. A case management conference was held on August 14, 2018. On August 15, 2018, the Court issued its Civil Pretrial Order setting a hearing for summary judgment motions on September 30, 2020, a pretrial conference on December 14, 2020, and a jury trial to commence on January 25, 2021. On November 21, 2018, Check Point filed its Amended Answer. On December 5, 2018, Finjan filed a Motion to Strike Check Point’s Affirmative Defenses of lack of standing for the ‘154 Patent, prosecution laches, and inequitable conduct for the ‘154 and ‘494 Patents. On January 25, 2019, the Court granted Finjan’s Motion to Strike Check Point’s Affirmative Defenses of lack of standing and prosecution laches with leave to amend its prosecution laches defense, and denied the Motion to Strike with respect to inequitable conduct. On February 12, 2019, Check Point filed a Motion for Leave to Amend its Answer and Affirmative Defenses to include inequitable conduct defenses for the ‘086, ‘633, and ‘844 Patent, and unenforceability defense based on a terminal disclaimer filed for the ‘086 Patent. Finjan’s Opposition was filed on February 26, 2019, and Check Point’s Reply was filed on March 5, 2019. On February 27, 2019, the Court scheduled a claim construction tutorial for June 14, 2019 and a claim construction hearing for June 21, 2019. There can be no assurance that Finjan will be successful in settling or litigating these claims. Finjan, Inc. v. Rapid7, Inc. et al. , Case No. 1:18-cv-01519-MN (D. Del) Finjan filed a patent infringement lawsuit agains |
License, Settlement and Release
License, Settlement and Release Agreements | 12 Months Ended |
Dec. 31, 2018 | |
License Settlement And Release Agreement [Abstract] | |
License, Settlement and Release Agreements | LICENSE, SETTLEMENT AND RELEASE AGREEMENTS On June 29, 2018, the Company including its wholly-owned subsidiaries, entered into a Confidential Patent License Agreement (the “June 2018 License Agreement”) with Trend Micro Incorporated (K.K.), a Japanese corporation (“Trend Micro Japan”) and Trend Micro, Inc., a California corporation (“Trend Micro U.S. and collectively with Trend Micro Japan, the “Trend Micro Parties”). The June 2018 License Agreement provides that the Trend Micro Parties will obtain a license to, among others, the Finjan patents and pay the Finjan parties $13.4 million in cash which Finjan received June 29, 2018. The Company recognized $13.4 million as revenues in 2018. Further, upon acquisition by the Trend Micro Parties of certain entities, the Trend Micro Parties will pay additional license fees to Finjan, unless otherwise mutually agreed to by the Company and the Trend Micro Parties. Further, the June 18 License Agreement has additional provisions relating to certain unlicensed products of any company that acquires a Trend Micro Party, in which case additional license fees may apply. The parties also entered into related agreements with respect to their respective patents, including the transfer of 18 select issued security-related patent assets from the Trend Micro Parties to the Finjan Parties. In accordance with ASC-845-10-30, the Company determined that the acquired assets are non-monetary with no defined future benefit, resulting in the conclusion that they are not assets. The remaining terms of the June 2018 License Agreement are confidential. On April 6, 2018, the Company and its wholly-owned subsidiary Finjan, entered into a Confidential Patent License and Settlement Agreement (the “Finjan 2018 License”) with Carbon Black, Inc., a Delaware corporation (“Carbon Black”), whereby the companies resolved all pending litigation matters. In addition, Finjan Mobile, a wholly-owned subsidiary of the Company and Carbon Black entered into a separate Confidential Patent Cross License Agreement (the “Cross License”), which serves to ensure the parties’ freedom to operate under the other’s patent portfolio. The terms of each agreement are confidential. Under the terms of the Finjan 2018 License, Carbon Black agreed to pay Finjan $3.9 million in license fees, as follows: (i) $1.3 million within five ( 5 ) business days of the Effective Date of the Finjan 2018 License, which was received on April 9, 2018, (ii) $1.3 million on or before September 30, 2018, which was received on September 26, 2018, and (iii) $1.3 million on or before December 31, 2018, which was received on December 28, 2018. The Company recognized $3.9 million as revenues in 2018. Further, upon acquisition of Carbon Black or acquisitions by Carbon Black, additional one-time license fees will be due to Finjan equal to eight percent ( 8% ) of the gross revenues of certain qualifying products and services for the four ( 4 ) concluded quarters immediately preceding the acquisition. On February 28, 2018, Finjan Holdings, Inc. and its subsidiaries, including its wholly-owned subsidiary, Finjan (collectively, the “Finjan Parties”), entered into a Confidential Patent License and Settlement Agreement (the “Symantec License and Settlement Agreement”) with Symantec and its subsidiary, Blue Coat Systems, LLC (collectively, the “Symantec Parties”). Pursuant to the Symantec License and Settlement Agreement, the parties resolved and settled all claims between them. As part of the settlement, the Symantec Parties obtained a license to, among others, the Finjan patents and agreed to pay the Finjan Parties $65.0 million in cash within twenty ( 20 ) days of the Effective Date of the Symantec License and Settlement Agreement, which Finjan received on March 19, 2018. The Company recognized $65.0 million as revenues in 2018. Further, if Symantec acquires certain entities within four years from the Effective Date, the Symantec Parties will pay additional license fees of up to $45.0 million to the Finjan Parties, unless otherwise mutually agreed to by the Company and Symantec. The remaining terms of the Symantec License and Settlement Agreement are confidential. On December 29, 2017, Finjan entered into a Confidential Patent License and Settlement Agreement (the “Finjan License”) with FireEye, Inc. whereby the companies resolved all pending litigation matters and together with a contemporaneous license agreement from FireEye to Finjan and its affiliates (the “FireEye License” and collectively with the Finjan License, the “Agreements”), the parties granted each other cross-licenses going forward. Under the terms of the Finjan License, FireEye agreed to pay Finjan $17.5 million in license fees, as follows: (a) $12.5 million on the Effective Date of the Finjan License, which amount was paid on December 29, 2017 and recognized as revenues as of December 31, 2017 and (b) $5.0 million which was offset by $5 million in license fees from Finjan to FireEye under the FireEye License, granting a perpetual license for the use of FireEye's patents. The FireEye License was determined not to be an intangible asset since it had no defined future benefit. Therefore, the FireEye License was expensed under SG&A. On April 21, 2017, the Company entered into a Confidential Patent License Agreement (the “EU Agreement”) with a European corporation (“EU Licensee”). Pursuant to the EU Agreement, EU Licensee obtained a license to our patent portfolio and agreed to 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 in 2017. The second installment of $1.3 million was received on February 1, 2018 and recognized as revenues as of December 31, 2017. The third installment of $1.3 million was received January 28, 2019 and recognized as revenues on January 1, 2018 upon adoption of ASU 2014-09 (topic 606). Such license does not grant EU Licensee any right to transfer, sublicense or grant any rights under the EU Agreement to a third party except as specifically provided under the EU 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 EU Agreement are confidential. On March 30, 2017, Finjan entered into a Confidential Master Agreement (the “Master 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 obtained a fully paid up license to the Finjan patent portfolio and agreed to 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 in 2017. 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 granted patent cross licenses in the Field of Use and Sophos Limited agreed to pay Finjan Mobile $2.5 million cash, $1.25 million on or before March 31, 2018, which was recognized as revenues as of December 31, 2017 and $1.25 million due on or before March 31, 2019, which was recognized as revenues on January 1, 2018 upon adoption of ASU 2014-09 (topic 606). On March 24, 2017, Finjan entered into a Patent License, Settlement and Release Agreement (the "Avast Agreement") with Avast Software s.r.o., a company organized under the laws of the Czech Republic ("Avast"), which provided 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. 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 obtained 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. 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 December 28, 2016, Finjan entered into a Confidential Patent License Agreement (the “December 2016 License”) with F5 Networks, Inc. (“F5”). The December 2016 License provides for F5 to pay a license fee of $4.0 million in cash, which Finjan received on December 30, 2016. Finjan recognized all of the $4.0 million license as revenue as of December 31, 2016, as such amount was determined to be fixed and determinable. In exchange for the foregoing and other valuable consideration, Finjan agreed to, subject to certain restrictions, limits and other conditions, grant F5 a nonexclusive, irrevocable (except in the case of non-payment by F5), worldwide paid-up license under Finjan’s patents as specified in the December 2016 License. On June 30, 2016, Finjan entered into a Confidential Patent License Agreement (the “June 30, 2016 License”) with a European cloud-based network security firm (the “2016 European Licensee”). The June 30, 2016 License provides for the 2016 European Licensee to pay Finjan $565,000 in cash, which was paid on or about the time of execution of the June 30, 2016 License. Finjan recognized all of the $565,000 license as revenue as of December 31, 2016, as such amount was determined to be fixed and determinable. In exchange for the foregoing and other valuable consideration, Finjan agreed to, subject to certain restrictions, limits and other conditions, grant the 2016 European Licensee a nonexclusive, term license in the United States under Finjan’s U.S. patents as specified in the June 30, 2016 License. On June 3, 2016, Finjan entered into a Confidential Patent License, Settlement and Release Agreement (“June 3, 2016 License”) with Proofpoint, Inc. (“Proofpoint”). As part of the June 3, 2016 License, Case No. 3:15-cv-5808-HSG, entitled Finjan, Inc. v. Proofpoint, Inc. and Armorize Technologies, Inc., pending before the Honorable Haywood S. Gilliam, Jr. in the U.S. District Court for the Northern District of California, was dismissed with prejudice on June 7, 2016. The June 3, 2016 License provides for Proofpoint to pay Finjan the sum of $10.9 million in cash, in which $4.3 million was received on June 6, 2016, $3.3 million was received in December 28, 2016, and $3.3 million was received on December 29, 2017. The Company recognized $7.6 million of the $10.9 million license as revenues as of December 31, 2016, as such amount was determined to be fixed and determinable. The Company recognized $3.3 million under the terms of the June 3, 2016 License as revenues as of December 31, 2017. In exchange for the foregoing and other valuable consideration, Finjan agreed to, subject to certain restrictions, limits and other conditions, grant Proofpoint a worldwide, non-royalty bearing, fully paid-up (as of the final payment), nonexclusive, perpetual, irrevocable (except in the case of non-payment by Proofpoint or other material breach) license under Finjan’s patents as specified in the June 3, 2016 License. Certain portions of the June 3, 2016 License are subject to Confidential Treatment pursuant to a Confidential Treatment request filed with the Securities and Exchange Commission (“SEC”) on August 8, 2016 and Confidential Treatment Order granted by the SEC on September 26, 2016. On December 30, 2015, Finjan entered into a Confidential Patent License, Settlement and Release Agreement (“December 30, 2015 License”), effective December 29, 2015, with a United States-based third party (“Licensee”). The December 30, 2015 License provides for Licensee to pay Finjan the sum of $3.65 million in cash, in which $1.0 million was received on December 30, 2015, $1.65 million was received on June 27, 2016, and $1.0 million was received on September 1, 2016. The Company recognized $1.0 million of the $3.65 million license as revenues as of December 31, 2015. The remaining balance of $2.65 million under the terms of the December 30, 2015 License was recognized as revenues as of December 31, 2016. In exchange for the foregoing and other valuable consideration, Finjan agreed to, subject to certain restrictions, limits and other conditions, grant Licensee a non-exclusive, irrevocable (except in the case of non-payment by Licensee or other material breach), worldwide license under Finjan Patents during the Term as specified in the December 30, 2015 License. On April 7, 2015, Finjan entered into a Confidential Asset Purchase and Patent License Agreement (the “April 7, 2015 License”), effective as of April 7, 2015, with F-Secure Corporation, a company incorporated in Finland (“F-Secure”). The April 7, 2015 License provides for F-Secure to pay Finjan the sum of $1.0 million in cash, of which $700,000 was received on April 22, 2015 and $300,000 received on March 31, 2016. The Company recognized $700,000 of the $1.0 million license as revenues in 2015, as such amount was determined to be fixed and determinable. The remaining balance of $300,000 under the terms of the April 7, 2015 License, was recognized as revenues in 2016. Finjan agreed to, subject to certain restrictions, limits and other conditions, grant F-Secure a worldwide, fully-paid, non-exclusive field of use license to Finjan patents owned as of the effective date or acquired by Finjan or its affiliates within two years from the effective date, as well as to the F-Secure Patents. On September 24, 2014, Finjan entered into a Confidential Patent License, Settlement and Release Agreement (the “September 24, 2014 License”) with Websense, Inc. (“Websense”) against whom Finjan had filed a patent infringement lawsuit. Pursuant to this September 24, 2014 License, Websense and Finjan agreed to dismiss the infringement litigation, and each party gave the other a general release for all claims that it might have against the other, known or unknown, based on the actions of either party on or before the date of the settlement. Under the September 24, 2014 License, Websense paid Finjan a license fee of $8.0 million payable in four installments. $3.0 million was received on execution of the agreement, $2.0 million was received on January 16, 2015, $2.0 million was received on January 14, 2016 and $1.0 million was received on January 13, 2017 and recognized as revenues. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY AUTHORIZED CAPITALIZATION The Company’s capital structure is comprised of preferred stock and common stock. The Company’s authorized capitalization consists of (i) 80,000,000 shares of common stock, par value $0.0001 per share, and (ii) 10,000,000 shares of Preferred Stock, $0.0001 par value per share. The Company’s certificate of incorporation authorizes the Board of Directors to establish one or more classes or series of preferred stock. Unless required by law or by any stock exchange on which our common stock is listed in the future, the authorized shares of preferred stock will be available for issuance at the discretion of our Board of Directors without further action by our stockholders. The Board of Directors is able to determine, with respect to any class or series of preferred stock, the terms and rights of that series. STOCK REPURCHASE PROGRAM On May 2, 2018, the Company’s board of directors authorized the repurchase of issued and outstanding shares of the Company’s common stock having an aggregate value of up to $10.0 million pursuant to a share repurchase program. The authorization did not specify an expiration date. The repurchases under the share repurchase program were made in the open market or in privately negotiated transactions and were funded from the Company’s working capital. All shares of common stock repurchased under the Company’s share repurchase program were retired and restored to authorized but unissued shares of common stock at December 31, 2018. During 2018, the Company repurchased 686,492 shares of its common stock under the share repurchase program, for an aggregate purchase price of approximately $2.0 million , or a weighted average cost of $2.93 per share. In accordance with ASC 505-30-30-8, we charged the excess over the par value entirely to retained earnings in recognition of the fact that a corporation can capitalize or allocate retained earnings for such purposes. As of December 31, 2018, the Company had a remaining authorization of $8.0 million for future share repurchases. PREFERRED STOCK During 2017, the Company retired all shares of the Series A Preferred stock with a final redemption of $13.8 million or 83,502 shares; $8.4 million reduced the original recorded value of the Series A Preferred stock and $5.4 million reduced the accreted value. 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 accounting for the Series A-1 Preferred Stock was accounted under Section 480-10-S99 - Distinguishing Liabilities from Equity (FASB Accounting Standards Codification 480) as amended by ASU 2009-04 - Accounting for Redeemable Equity Instruments (“ASU 2009-04”). Under ASU 2009-04, a redeemable equity security is to be classified as temporary equity if it is conditionally redeemable: a) at a fixed or determinable price on a fixed or determinable date, b) at the option of the holder, or c) upon the occurrence of an event that is not solely within the control of the issuer. The Company’s Series A-1 Preferred stock financing is redeemable at the option of the holder. Therefore, the Company classified the Series A-1 Preferred Stock as temporary equity in the consolidated balance sheet. During the quarter ended March 31, 2018, the Company retired all shares of the Series A-1 Preferred stock, $19.9 million or 153,000 shares; $15.3 million reduced the original recorded value of the Series A-1 Preferred stock and $4.6 million reduced the accreted value. The Company incurred issuance costs of $1.0 million which were recorded as an offset to the preferred stock. Such costs have been recognized as a deemed dividend upon the redemption and retirement of the Preferred stock. 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. The Company recorded a deemed dividend of $4.6 million during the second half of 2017, representing an increase to the Series A-1 Preferred Stock's redemption (liquidation) value. WARRANTS On issuance of the Series A-1 Preferred stock, the Company agreed to issue to Soryn HLDR Vehicle II LLC, a Delaware limited liability company, a fully vested common stock warrant (the “Warrant”), to initially purchase 2.0 million shares of common stock, $0.0001 par value per share of the Company at an exercise price of $3.18 per share, which increased to 2.4 million shares in accordance with its terms. The Warrant has a term of three years . Upon the closing of the sale and issuance of the Series A-1 Preferred Stock on June 19, 2017, the Warrant was issuable for 2.0 million shares, increased by an additional 0.3 million shares on June 30, 2017 and an additional 0.05 million shares on July 21, 2017. The holder of the Warrant has the right 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 had a derivative feature and was classified as a liability for the first 15 months. The Company valued the Warrant at inception using a Monte Carlo valuation model, recording a $3.3 million warrant liability at inception, which was then marked-to-market at each reporting period with the change in fair value recorded in the consolidated statements of operations. The change in fair value of the warrant liability during 2018 was a loss of $3.4 million and recorded in the consolidated statements of operations. On September 19, 2018, upon expiration of the 15 month period, the Warrant was marked-to-market and its value increased to $4.5 million and reclassified such amounts to equity. As of December 31, 2018 the aggregate intrinsic value of the warrant was $0 , with a weighted average contracted term of 1.5 years. COMMON STOCK Holders of the Company’s common stock are entitled to one vote on each matter submitted to a vote at a meeting of stockholders. The Company’s common stock does not have cumulative voting rights, which means that the holders of a majority of voting shares voting for the election of directors can elect all of the members of the Board of Directors. The Company’s common stock has no preemptive rights and no redemption or conversion privileges. The holders of the outstanding shares of the Company’s common stock are entitled to receive dividends out of assets legally available at such times and in such amounts as the Board of Directors may, from time to time, determine, and upon liquidation and dissolution are entitled to receive all assets available for distribution to the stockholders. A majority vote of shares represented at a meeting at which a quorum is present is sufficient for all actions that require the vote of stockholders. 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 3.6 million 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 0.5 million 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. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [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"), upon shareholder approval of the 2014 Plan, the Finjan Holdings, Inc. 2013 Global Share Option Plan and Israeli Sub-Plan (the "2013 Option Plan") were terminated, other than respect to the 1,489,532 shares of common stock underlying options outstanding under such plan. The Company shareholders approved the 2014 Plan at the annual meeting of stockholders held July 10, 2014, pursuant to which 2,196,836 shares of common stock are authorized for issuance. 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 December 31, 2018, the Company has 1,565,103 shares available for issuance under the 2014 Plan. During 2018, the Company issued 200,000 RSUs and granted an aggregate of 376,667 options to purchase shares of our common stock to certain employees in connection with their employment with the Company. During 2017, the Company issued 576,212 RSUs and granted an aggregate of 898,334 options to purchase shares of our common stock to certain employees in connection with their employment with the Company. During the year ended December 31, 2018, the Company issued 547,820 shares of common stock, comprising of 323,420 shares from the exercise of RSUs and 224,400 from the exercise of stock options for which the Company received proceeds of $0.3 million . During the year ended December 31, 2017, the Company issued 464,600 shares of common stock comprising of 322,760 shares from the exercise of RSUs and 141,840 from the exercise of stock options for the which the Company received proceeds of $0.2 million . Total stock-based compensation for stock options and restricted stock awards, of $1.6 million , $0.8 million and $0.9 million was recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations for the years ended December 31, 2018 , 2017 and 2016, respectively. The stock-based compensation expense is for options and restricted stock awards granted to certain employees, consultants, and members of the Board of Directors. STOCK OPTIONS The following is a summary of stock option activity during the years ended December 31, 2018 and 2017: Number of Options Outstanding Weighted Average Exercise Price Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (thousands) Outstanding – December 31, 2016 1,607,346 $ 0.83 7.07 $ — Options granted 898,334 2.13 Options exercised 141,840 1.60 Options forfeited 22,500 1.78 Outstanding – December 31, 2017 2,341,340 $ 1.77 5.78 $ 1,087 Options granted 376,667 2.41 Options exercised 224,400 1.59 Options forfeited 6,961 1.42 Outstanding – December 31, 2018 2,486,646 $ 1.89 7.01 $ 1,550 Exercisable – December 31, 2018 1,450,458 $ 1.66 5.70 $ 1,235 The Company estimates the fair values of stock options using the Black-Scholes option-pricing model on the date of grant. For the years ended December 31, 2018 and 2017 , the assumptions used in the Black-Scholes option pricing model, which was used to estimate the grant date fair value per option, were as follows: 2018 2017 Employee Grants Employee Grants Weighted-average Black-Scholes option pricing model assumptions: Volatility 82.00 % 138.90 % Expected term (in years) 6 6 Risk-free rate 2.24 % 2.00 % Expected dividend yield 0.0 % 0.0 % Weighted average grant date fair value per share $ 2.22 $ 2.05 The risk-free interest rate is the United States Treasury rate for the day of the grant having a term equal to the life of the equity instrument. The volatility is a measure of the amount by which the Company’s share price has fluctuated or is expected to fluctuate; the Company used its common stock volatility along with the average of historic volatilities of comparative companies. The dividend yield is zero percent as the Company has not made any dividend payment and has no plans to pay dividends in the foreseeable future. Due to the limited historical information, the Company determines the expected term of its stock option awards by using the simplified method, which assumes each vesting tranche of the award has a term equal to average of the contractual term and the vesting period. As of December 31, 2018 , total compensation cost not yet recognized related to unvested stock options was approximately $1.7 million , which is expected to be recognized over a weighted-average period of 2.3 years. RESTRICTED STOCK UNITS The following is a summary of non-vested RSUs award activity for the years ended December 31, 2018 and 2017 : 2018 2017 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Non-vested 438,712 $ 2.28 185,260 $ 2.67 Shares granted 200,000 3.16 576,212 1.95 Shares vested 323,420 2.84 322,760 1.92 Non-vested 315,292 $ 2.26 438,712 $ 2.28 The Company estimates the fair value of the granted shares using the market price of the Company’s stock price at the grant date. For the years ended December 31, 2018 , 2017 and 2016, the Company recognized $0.9 million , $0.6 million and $0.7 million , respectively of stock-based compensation expense related to the RSUs. As of December 31, 2018 , total compensation cost not yet recognized related to unvested RSUs was approximately $0.6 million , which is expected to be recognized over a weighted-average period of 2.3 years. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS In the course of business, the Company obtains legal services from firms in which a member of the Company’s board is a member. The Company incurred approximately $302,000 , $240,000 and $227,000 in legal fees to these firms during the years ended December 31, 2018 , 2017 and 2016 respectively. As of December 31, 2018 and 2017 the Company had balances due to these firms amounting to approximately $163,000 and $112,000 , respectively. The Company obtained social media and investor related services from a firm in which the Company’s Chief Financial Officer holds a 50% interest. The Company incurred approximately $22,000 and $80,000 in fees to the firm during the years ended December 31, 2016 and 2015, respectively. The Company canceled this service agreement effective June 30, 2016. The Company entered into a sublease agreement at its headquarters, effective July 1, 2018 with Benhamou Global Ventures, a company in which one of the Company's Directors serves as Chairman and CEO. Rental income from the sublease is approximately $15,000 quarterly for an undefined term. The Company entered into a second sublease agreement at its headquarters, effective July 1, 2018 with a portfolio company in which one of the Company's Directors is an investor. Rental income from the sublease is approximately $45,000 quarterly for an undefined term. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax | INCOME TAX The domestic and foreign components of loss before income taxes from operations for the years ended December 31, 2018, 2017 and 2016 are as follows: For the Years Ended December 31, 2018 2017 2016 (in thousands) Domestic $ 29,110 $ 17,120 $ 1,097 Foreign (320 ) (469 ) (744 ) $ 28,790 $ 16,651 $ 353 The provision (benefit) for income tax for the years ended December 31, 2018 , 2017 and 2016, consist of the following: For the Years Ended December 31, 2018 2017 2016 (in thousands) Federal: Current $ 4,010 $ — $ — Deferred 2,231 7,694 416 State: Current 1,329 43 3 Deferred 482 269 (380 ) Foreign: Current — — — Deferred 73 (129 ) (174 ) 8,125 7,877 (135 ) Change in valuation allowance (73 ) (14,037 ) 138 Income tax provision (benefit) $ 8,052 $ (6,160 ) $ 3 The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense (benefit) as follows: For the Years Ended December 31, 2018 2017 2016 U.S. Federal statutory rate 21.0 % 34.0 % 34.0 % State rate, net of federal benefit 5.0 % 2.8 % 7.8 % Permanent differences: Change in tax rate — % 16.4 % (113.0 )% Impact of tax reform — % (16.4 )% — % Deferred tax adjustment 0.5 % (0.3 )% (19.1 )% Stock based compensation (0.4 )% 0.1 % 28.9 % §162(m) limited compensation 1.1 % — % — % Foreign tax rate difference — % 0.3 % 19.3 % Fair value measurement of warrants 2.5 % (4.5 )% — % Other (2.0 )% (1.6 )% 3.0 % Change in valuation allowance 0.3 % (67.9 )% 40.0 % Income tax provision (benefit) 28.0 % (37.1 )% 0.9 % The approximate tax effects of temporary differences, which give rise to significant deferred tax assets and liabilities, are as follows: As of December 31, 2018 2017 2016 (in thousands) Deferred tax assets Net operating losses $ 535 $ 3,912 $ 10,032 Stock-based compensation 736 572 949 Intangible assets 2,412 2,190 3,748 Other 340 115 77 Total deferred tax assets 4,023 6,789 14,806 Valuation allowance (535 ) (462 ) (14,497 ) Deferred tax asset, net of valuation allowance 3,488 6,327 309 Deferred tax liability (677 ) (126 ) (309 ) Net deferred tax assets $ 2,811 $ 6,201 $ — As of December 31, 2018 , the Company had nil federal and state net operating losses ("NOL"). As of December 31, 2017 and 2016, the Company had carryforwards NOL of approximately $12.7 million and $26.1 million , respectively. As of December 31, 2018 and 2017, the Company had foreign NOL carryforwards of approximately $2.3 million and $2.0 million , respectively. The use of NOL and tax credit carryfowards may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 and 383 of the U.S. Internal Revenue Code (“IRC”), and similar state provisions. The annual limitation may result in the expiration of NOL and tax credit carryforwards before they are used. The Company rolled forward its IRC Section 382 analysis from the prior year and identified a potential ownership change during 2018, however, the Company believes there is no material limitation on its ability to utilize its net operating losses and tax credits, all of which are expected to be utilized during 2018 and therefore no tax attributes are expected to carry into future years. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, carryback potential, projected future taxable income and tax planning strategies in making this assessment. Management has considered both positive and negative evidence in evaluating the need for a valuation allowance and has given more weight to the objective evidence available. At the end of 2018, the Company has three-year cumulative profit. At the end of 2018, management’s assessment is that no valuation allowance against its domestic deferred tax assets is deemed necessary. The Company’s foreign subsidiary had generated book and tax losses since its inception. Management has determined that it is not more likely than not that the foreign deferred tax assets will be realized. As such, the Company has maintained the valuation allowance against its foreign deferred tax assets. The change in valuation allowance for the years ended December 31, 2018, 2017 and 2016, is $0.1 million , $14.0 million and $0.1 million , respectively. On December 22, 2017, the 2017 Tax Cut and Jobs Act (the Act) was enacted into law and the new legislation contains several key tax provisions, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the estimated transition tax, re-measuring our U.S. deferred tax assets and liabilities at a 21% rate as well as reassessing the net realizability of our deferred tax assets and liabilities. The provisional amount related to the re-measurement of our deferred tax balance was estimated to be a reduction of approximately $2.8 million at December 31, 2017. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118) which allows companies to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since the Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation was yet to be issued, our accounting of the transition tax and deferred tax re-measurements were incomplete as of December 31, 2017. The 2017 Federal corporate income tax return was filed in Q4 2018. The final analysis and impact of the Act is reflected in the tax provision and related tax disclosures for the year ended December 31, 2018. There were no material differences to the originally estimated $2.8 million remeasurement of deferred tax assets or transition tax liability. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | USE OF ESTIMATES The preparation of financial statements in conformity with US Generally Accepted Accounting Principles ("US GAAP"), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to derivative liabilities, stock-based compensation expense, impairment of long-lived assets, the determination of the economic useful life of property and equipment, income taxes and valuation allowances against net deferred tax assets. Management bases its estimates on historical experience or on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates. |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid instruments with original maturities of three months or less when purchased to be cash equivalents. Included in cash and cash equivalents are demand deposits and money market accounts. |
Concentrations of Credit Risk | CONCENTRATIONS OF CREDIT RISK The Company maintains substantially all of its cash and cash equivalents in financial institutions located in the United States. The Company also has certain bank accounts with minimal balances in Israel. At times, the Company’s cash and cash equivalent balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. |
Allowance for Doubtful Accounts | ALLOWANCE FOR DOUBTFUL ACCOUNTS The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company does not currently require any collateral for accounts receivable. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. |
Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the related assets, which range from 3 to 7 years. Leasehold improvements are amortized on the straight-line method over the shorter of the remaining lease term or the estimated useful economic lives of the related assets using the straight-line method. The costs of additions and betterments are capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. |
Short-Term Investment and Investments | SHORT TERM INVESTMENTS INVESTMENTS Investments that are not controlled, and over which the Company does not have the ability to exercise significant influence are accounted for under the cost method. All of the Company’s investments as of December 31, 2018 and 2017 and are accounted for under the cost method. |
Impairment of Long-Lived Assets | IMPAIRMENT OF LONG-LIVED ASSETS Intangible assets with finite lives are amortized over their estimated useful lives. The Company reviews these assets for impairment periodically or whenever potential indicators of impairment exist. 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 Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") Under Accounting Standards Codification ("ASC") 605, revenues were 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. This guidance was followed prior to January 1, 2018, Under ASU 2014-09 revenue is recognized when a customer obtains control of promised goods and services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services. In addition, ASU 2014-09 requires disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The core principle of the standard is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company should apply the following five step model: l Identify the contract with the customer; l Identify the performance obligations in the contract; l Determine the transaction price; l Allocate the transaction price to the performance obligations in the contract; and l Recognize revenue when (or as) each performance obligation is satisfied. 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. The Company adopted ASU 2014-09 using the modified retrospective method effective January 1, 2018. For further details, see "Recently Issued Accounting Pronouncements adopted January 1, 2018" below. |
Research and Development Expense | RESEARCH AND DEVELOPMENT EXPENSE The Company expenses the cost of research and development as incurred. Research and development expenses consist primarily of professional services costs associated with the development of mobile security application products. |
Software Development Costs | SOFTWARE DEVELOPMENT COSTS Software development costs are expensed as incurred. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Company’s products are released soon after technological feasibility has been established. Software development costs incurred subsequent to achievement of technological feasibility were not material and were expensed as incurred during the years ended December 31, 2018, 2017 and 2016. |
Foreign Currency | FOREIGN CURRENCY Foreign currency denominated assets and liabilities of foreign subsidiaries, where the local currency is the functional currency, are translated into U.S. dollars using the exchange rates in effect at the balance sheet dates, and income and expenses are translated using average exchange rates during the period. Foreign currency translation gains (losses) were immaterial for the years ended December 31, 2018, 2017 and 2016. |
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 in June 2017, the Company issued a warrant with variable consideration through September 2018. 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 through the expiration of the variable consideration. 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. Upon expiration of the variable consideration the warrant liability at that time of $4.5 million was reclassified to equity. 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 risk-free interest rate used is the United States Treasury rate for the day of the grant having a term equal to the life of the equity instrument. The volatility is a measure of the amount by which the Company’s share price has fluctuated or is expected to fluctuate. The dividend yield is zero percent as the Company has not made any dividend payment and has no plans to pay dividends in the foreseeable future. The Company determines the expected term of its warrant awards by using the contractual term. |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS The reported amounts of the Company’s financial instruments, including cash and cash equivalents, short term investments, accounts receivable, accounts payable and accrued liabilities, approximate their fair value due to their short maturities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. These fair value measurements apply to all financial instruments that are measured and reported on a fair value basis. Where available, fair value is based on observable market prices or is derived from such prices. The Company uses the market approach valuation technique to value its investments. The market approach uses prices and other pertinent information generated from market transactions involving identical or comparable assets or liabilities. The types of factors that the Company may take into account in fair value pricing the investments include available current market data, including relevant and applicable market quotes. Based on the observability of the inputs used in the valuation techniques, financial instruments are categorized according to the fair value hierarchy, which ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 - Observable inputs such as quoted prices in active markets. Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the assignment of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company classifies short term investments as available-for-sale investments within Level 2 in the fair value hierarchy as it uses alternative pricing sources and models using market observable inputs to determine their fair value. These include financial and industrial securities of $10.2 million and asset backed securities of $1.1 million at December 31, 2018. Unrealized gains were immaterial as of December 31, 2018. The Company had no short term investments at December 31, 2017. The fair value measurement of the warrant issued in conjunction with the Series A-1 Preferred Stock is a derivative liability based on significant inputs not observed in the market and thus represents a Level 3 measurement. Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s Controller who reports to the Chief Financial Officer, determines valuation policies and procedures, which are reflected in the Company's assumptions in measuring fair value. |
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. 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: |
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company measures compensation cost for all employee stock-based awards at their fair values on the date of grant. Stock-based awards issued to non-employees are measured at their fair values on the date of grant and are re-measured at each reporting period through their vesting dates. When a non-employee becomes an employee and continues to vest in the award, the fair value of the individual’s award is re-measured on the date that he becomes an employee, and then is not subsequently re-measured at future reporting dates. The fair value of stock based awards is recognized as expense over the service period, net of estimated forfeitures, using the straight-line method for stock options and restricted stock. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock-based awards. |
Income Taxes | INCOME TAXES The Company files consolidated income tax returns in the U.S. federal jurisdiction and is headquartered in California, formerly in New York. The federal and state income tax returns for the tax years 2013 and after remain subject to examination for federal and state taxes. The Company files state income tax returns for California and New York. The Company accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be computed annually for temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The income tax provision or benefit is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. The benefit of tax positions taken or expected to be taken in income tax returns are recognized in the financial statements if such positions are more likely than not of being sustained. As of December 31, 2018 , 2017 and 2016, an immaterial liability for unrecognized tax benefits was required to be reported. The Company does not expect its unrecognized tax benefit position to change during the next twelve months. The Company’s policy is to classify assessments, if any, for tax-related interest as interest expense and penalties as general and administrative expenses. |
Recently Issued Accounting Pronouncements | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Adopted 2018: In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09. 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 completed its analysis of the new revenue standards and has established an implementation plan and believes the systems in place are adequate to support application of this guidance. The Company adopted ASU 2014-09 January 1, 2018 using the modified retrospective method. This method required retrospective application of the new accounting standard to those contracts which were not completed as of January 1, 2018. Results for the reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The change to the current revenue policy is the timing of revenue recognition. Under the guidance ASC 605, the Company recognized revenue upon receipt of funds related to an executed agreement or funds which were received within 90 days of receipt. Under the guidance ASU 2014-09, all revenue is recognized upon execution of the agreement, including any future dated payments, which often spread over several quarters or years. The Company recorded $2.6 million to opening retained earnings of $5.6 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact primarily related to existing contracts that had 2019 payment dates. The cumulative effect of the changes made to the condensed consolidated balance sheet as of January 1, 2018 under current assets for the adoption ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows (in thousands): Balance Sheet Balance at December 31, 2017 Adjustments due to ASU 2014-09 Balance at January 1, 2018 Current Assets Accounts Receivable $ 2,606 $ 2,550 $ 5,156 Liabilities and Stockholders' Equity Retained Earnings $ 5,555 $ 2,550 $ 8,105 In accordance with the new revenue recognition standards, the impact of adoption of ASC-606 to the consolidated statement of operations and balance sheet for the period ended December 31, 2018 was as follows (in thousands): Income Statement Year ended December 31, 2018 As reported Balance without adoption - ASC606 Effect of change Revenue $ 82,300 $ 82,300 $ — Provision for income taxes 8,052 8,052 — Net income (loss) 20,738 20,738 — Balance Sheet December 31, 2018 As reported Balance without ASC-606 Effect of Change Current Assets Accounts Receivable $ 2,550 $ — $ (2,550 ) Other long-term assets (1) 678 — $ (678 ) Prepaid tax 5,429 5,429 $ — Liabilities and Stockholders' Equity Retained Earnings $ 26,142 $ 22,914 $ 3,228 (1) Deferred tax assets related to the adoption of ASC606 The Company also adopted the following standards during 2018, none of which had a material impact on the Company's consolidated financial statements: STANDARD DESCRIPTION EFFECTIVE DATE 2016-09 Compensation - Stock Compensation (Topic 718): Improvements to Employee Share- Based Payment Accounting January 1, 2018 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments January 1, 2018 2018-07 Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting June 1, 2018 Not Yet Adopted as of December 31, 2018 ASU No. 2016-02 “Leases” ("ASU 2016-02") In February 2016, the FASB issued ASU 2016-02 which requires lessees to recognize almost all leases on their balance sheet as a leased asset and a lease liability. Lessees are allowed to account for short-term leases (i.e., leases with a term of 12 months or less) off- balance sheet, consistent with current operating lease accounting. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The Company has decided to adopt ASU 2016-02 using the modified retrospective approach with a cumulative-effect adjustment recorded at the beginning of the period of adoption (January 1, 2019). Therefore, the Company will recognize and measure operating leases on the consolidated balance sheet without revising comparative period information or disclosure. The Company elected the package of practical expedients permitted under the transition guidance within the standard, which eliminates the reassessment of past leases, classification and initial direct costs. The Company elected the available practical expedients and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The new standard is expected to result in the recording of leased assets and lease liabilities for the Company’s operating leases of approximately $2.7 - $2.9 million and approximately $2.8 - $2.9 million , respectively, as of January 1, 2019. The difference between the leased assets and lease liabilities primarily represents the existing deferred rent liabilities balance, resulting from historical straight-lining of operating leases, which was effectively reclassified upon adoption to reduce the measurement of the leased assets. The adoption of ASU 2016-02 is not anticipated to have an impact on Company’s results from operations and cash flows. The adoption of new standard will result in additional disclosures around amount, timing and uncertainty of cash flows arising from leases including quantitative and qualitative information including significant judgments in applying the new standard. ASU 2017-11, "Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815) ("ASU 2017-11") In July 2017, the FASB issued ASU 2017-11, 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. The adoption of this standard is not expected to have a material impact on the consolidated financial statements and related disclosures. ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements (“ASU 2018-13”) In August 2018, the FASB issued ASU 2018-13, which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project. Adoption of this guidance is required for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating this guidance and the impact of this update on its condensed consolidated financial statements. Other recent accounting standards that have been issued or proposed by FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's consolidated financial statements upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Fair Value Assumptions | The principal assumptions used in applying the model were as follows: Upon 2018 Expiration December 31, 2017 Assumptions: Risk-free interest rate 2.3% - 2.5% 1.5% - 2.0% Expected life 1.8 - 2.2 Years 2.5 - 3 Years Expected volatility 65% - 70% 50% - 60% Dividends 0% 0% |
Schedule of Earnings Per Share, Basic and Diluted | Years Ended 2018 2017 2016 (In thousands, except share and per share data) Numerator: Net income (loss) attributable to common stockholders $ 19,813 $ 17,929 $ (6,439 ) Denominator: Weighted-average common shares, basic 27,484,655 25,353,966 22,837,263 Weighted-average common shares, diluted* 28,416,512 26,269,727 22,837,263 Net income (loss) per common share: Basic: $ 0.72 $ 0.71 $ (0.28 ) Diluted: $ 0.70 $ 0.68 $ (0.28 ) * The diluted earnings per common share included the weighted average effect of 215,196 unvested Restricted Stock Units and 716,661 stock options that are potentially dilutive to earnings per share for the twelve months ended December 31, 2018, since the exercise price of such securities was less than the average market price during the period. |
Summary of Components Excluded from Computation of Diluted Net Loss Per Share | Potentially dilutive common shares from employee equity plans and warrants are determined by applying the treasury stock method to the assumed exercise of warrants and share options and were excluded from the computation of diluted net income (loss) per share because their inclusion would be anti-dilutive and consist of the following: December 31, 2018 2017 2016 Stock options 822,269 1,864,292 1,607,347 Restricted stock units 13,333 — 185,260 Warrants 2,355,506 2,355,506 — Total 3,191,108 4,219,798 1,792,607 |
Schedule of Cumulative Effect of ASU 2014-09 | The cumulative effect of the changes made to the condensed consolidated balance sheet as of January 1, 2018 under current assets for the adoption ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows (in thousands): Balance Sheet Balance at December 31, 2017 Adjustments due to ASU 2014-09 Balance at January 1, 2018 Current Assets Accounts Receivable $ 2,606 $ 2,550 $ 5,156 Liabilities and Stockholders' Equity Retained Earnings $ 5,555 $ 2,550 $ 8,105 In accordance with the new revenue recognition standards, the impact of adoption of ASC-606 to the consolidated statement of operations and balance sheet for the period ended December 31, 2018 was as follows (in thousands): Income Statement Year ended December 31, 2018 As reported Balance without adoption - ASC606 Effect of change Revenue $ 82,300 $ 82,300 $ — Provision for income taxes 8,052 8,052 — Net income (loss) 20,738 20,738 — Balance Sheet December 31, 2018 As reported Balance without ASC-606 Effect of Change Current Assets Accounts Receivable $ 2,550 $ — $ (2,550 ) Other long-term assets (1) 678 — $ (678 ) Prepaid tax 5,429 5,429 $ — Liabilities and Stockholders' Equity Retained Earnings $ 26,142 $ 22,914 $ 3,228 (1) Deferred tax assets related to the adoption of ASC606 The Company also adopted the following standards during 2018, none of which had a material impact on the Company's consolidated financial statements: STANDARD DESCRIPTION EFFECTIVE DATE 2016-09 Compensation - Stock Compensation (Topic 718): Improvements to Employee Share- Based Payment Accounting January 1, 2018 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments January 1, 2018 2018-07 Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting June 1, 2018 |
Prepaid Expenses And Other Cu_2
Prepaid Expenses And Other Current Assets & Patents And Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses | The components of prepaid expenses and other current assets are as presented below: As of December 31, 2018 2017 (in thousands) Prepaid income taxes $ 5,429 $ — Other prepaid expenses and other current assets 1,151 765 $ 6,580 $ 765 |
Schedule of Patents and Intangible Assets | The components of these intangible assets are as follows: As of December 31, 2018 2017 (in thousands) Patents $ 26,069 $ 26,552 Less accumulated amortization (20,562 ) (18,804 ) Intangible assets, net $ 5,507 $ 7,748 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | The components of property and equipment were as follows: As of December 31, 2018 2017 (In thousands) Office equipment, leasehold improvements and furniture $ 308 $ 319 Less accumulated depreciation (209 ) (179 ) Property and equipment, net $ 99 $ 140 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments [Abstract] | |
Schedule of Investments | The following is a summary of the Company’s investments (in thousands): JVP Fund Balance - January 1, 2016 $ 2,195 Investment made during 2016 550 Balance - December 31, 2016 2,745 Cash distribution during 2017 (127 ) Balance - December 31, 2017 $ 2,618 Investment made during 2018 900 Balance - December 31, 2018 $ 3,518 |
Accrued Expenses and Warrant _2
Accrued Expenses and Warrant Liability (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Components of Accrued Expense | The components of accrued expenses are as below: As of December 31, 2018 2017 (In thousands) Compensation $ 336 $ 1,233 Other 58 70 $ 394 $ 1,303 |
Components of Warrant Liability | A roll forward of the Company’s Level 3 derivative liabilities is as follows (in thousands): Balance, December 31, 2016 $ — Fair value of derivative liabilities at issuance 3,313 Change in the fair value of derivative liabilities (2,217 ) Balance, December 31, 2017 1,096 Change in fair value of warrant liability 3,445 Reclassification to additional paid-in capital (4,541 ) Balance, December 31, 2018 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table sets forth the Company’s aggregate future minimum payments under its operating lease commitments as of December 31, 2018 (in thousands): Year ending December 31, 2019 $ 747 2020 $ 773 2021 $ 801 2022 $ 829 2023 $ 425 Total $ 3,575 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following is a summary of stock option activity during the years ended December 31, 2018 and 2017: Number of Options Outstanding Weighted Average Exercise Price Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (thousands) Outstanding – December 31, 2016 1,607,346 $ 0.83 7.07 $ — Options granted 898,334 2.13 Options exercised 141,840 1.60 Options forfeited 22,500 1.78 Outstanding – December 31, 2017 2,341,340 $ 1.77 5.78 $ 1,087 Options granted 376,667 2.41 Options exercised 224,400 1.59 Options forfeited 6,961 1.42 Outstanding – December 31, 2018 2,486,646 $ 1.89 7.01 $ 1,550 Exercisable – December 31, 2018 1,450,458 $ 1.66 5.70 $ 1,235 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | For the years ended December 31, 2018 and 2017 , the assumptions used in the Black-Scholes option pricing model, which was used to estimate the grant date fair value per option, were as follows: 2018 2017 Employee Grants Employee Grants Weighted-average Black-Scholes option pricing model assumptions: Volatility 82.00 % 138.90 % Expected term (in years) 6 6 Risk-free rate 2.24 % 2.00 % Expected dividend yield 0.0 % 0.0 % Weighted average grant date fair value per share $ 2.22 $ 2.05 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The following is a summary of non-vested RSUs award activity for the years ended December 31, 2018 and 2017 : 2018 2017 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Non-vested 438,712 $ 2.28 185,260 $ 2.67 Shares granted 200,000 3.16 576,212 1.95 Shares vested 323,420 2.84 322,760 1.92 Non-vested 315,292 $ 2.26 438,712 $ 2.28 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Income (Loss) Before Income Taxes From Continuing Operations | The domestic and foreign components of loss before income taxes from operations for the years ended December 31, 2018, 2017 and 2016 are as follows: For the Years Ended December 31, 2018 2017 2016 (in thousands) Domestic $ 29,110 $ 17,120 $ 1,097 Foreign (320 ) (469 ) (744 ) $ 28,790 $ 16,651 $ 353 |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income tax for the years ended December 31, 2018 , 2017 and 2016, consist of the following: For the Years Ended December 31, 2018 2017 2016 (in thousands) Federal: Current $ 4,010 $ — $ — Deferred 2,231 7,694 416 State: Current 1,329 43 3 Deferred 482 269 (380 ) Foreign: Current — — — Deferred 73 (129 ) (174 ) 8,125 7,877 (135 ) Change in valuation allowance (73 ) (14,037 ) 138 Income tax provision (benefit) $ 8,052 $ (6,160 ) $ 3 |
Schedule of Effective Income Tax Rate Reconciliation | The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense (benefit) as follows: For the Years Ended December 31, 2018 2017 2016 U.S. Federal statutory rate 21.0 % 34.0 % 34.0 % State rate, net of federal benefit 5.0 % 2.8 % 7.8 % Permanent differences: Change in tax rate — % 16.4 % (113.0 )% Impact of tax reform — % (16.4 )% — % Deferred tax adjustment 0.5 % (0.3 )% (19.1 )% Stock based compensation (0.4 )% 0.1 % 28.9 % §162(m) limited compensation 1.1 % — % — % Foreign tax rate difference — % 0.3 % 19.3 % Fair value measurement of warrants 2.5 % (4.5 )% — % Other (2.0 )% (1.6 )% 3.0 % Change in valuation allowance 0.3 % (67.9 )% 40.0 % Income tax provision (benefit) 28.0 % (37.1 )% 0.9 % |
Schedule of Deferred Tax Assets and Liabilities | The approximate tax effects of temporary differences, which give rise to significant deferred tax assets and liabilities, are as follows: As of December 31, 2018 2017 2016 (in thousands) Deferred tax assets Net operating losses $ 535 $ 3,912 $ 10,032 Stock-based compensation 736 572 949 Intangible assets 2,412 2,190 3,748 Other 340 115 77 Total deferred tax assets 4,023 6,789 14,806 Valuation allowance (535 ) (462 ) (14,497 ) Deferred tax asset, net of valuation allowance 3,488 6,327 309 Deferred tax liability (677 ) (126 ) (309 ) Net deferred tax assets $ 2,811 $ 6,201 $ — |
Organization and Operations - A
Organization and Operations - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018business_line | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business lines | 3 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($)license_agreement | Dec. 31, 2017USD ($)license_agreement | Dec. 31, 2016USD ($)license_agreement | Jan. 01, 2019USD ($) | Jan. 01, 2018USD ($) | |
CONCENTRATIONS OF CREDIT RISK | |||||
Number of license agreements generating revenue | license_agreement | 3 | 6 | 3 | ||
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |||||
Bad debt expense | $ 0 | $ 0 | $ 0 | ||
DERIVATIVE LIABILITIES | |||||
Reclassification of warrant liability to equity | 4,541,000 | 0 | $ 0 | ||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |||||
Retained earnings | $ 26,142,000 | $ 5,555,000 | |||
Minimum | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Useful life (in years) | 3 years | ||||
Maximum | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Useful life (in years) | 7 years | ||||
Accounting Standards Update 2014-09 | |||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |||||
Retained earnings | $ 26,142,000 | $ 8,105,000 | |||
Accounting Standards Update 2014-09 | Effect of change | |||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |||||
Cumulative effect on retained earnings | 2,600,000 | ||||
Retained earnings | $ 3,228,000 | $ 2,550,000 | |||
Revenue | Product Concentration Risk | |||||
CONCENTRATIONS OF CREDIT RISK | |||||
Number of license agreements generating revenue | license_agreement | 2 | 1 | |||
Concentration risk, percentage | 95.00% | 67.00% | 59.00% | ||
Dividend yield | |||||
DERIVATIVE LIABILITIES | |||||
Measurement input | 0 | ||||
Fair Value, Inputs, Level 2 | |||||
DERIVATIVE LIABILITIES | |||||
Available-for-sale investments | $ 0 | ||||
Fair Value, Inputs, Level 2 | Financial and industrial securities | |||||
DERIVATIVE LIABILITIES | |||||
Available-for-sale investments | $ 10,200,000 | ||||
Fair Value, Inputs, Level 2 | Asset-backed Securities | |||||
DERIVATIVE LIABILITIES | |||||
Available-for-sale investments | $ 1,100,000 | ||||
Forecast | Subsequent Event | Accounting Standards Update 2016-02 | Minimum | |||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |||||
Leased assets | $ 2,700,000 | ||||
Lease liability | 2,800,000 | ||||
Forecast | Subsequent Event | Accounting Standards Update 2016-02 | Maximum | |||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |||||
Leased assets | 2,900,000 | ||||
Lease liability | $ 2,900,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Fair Value Assumptions (Details) | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Risk-free interest rate | Minimum | Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | 0.023 | 0.015 | |
Risk-free interest rate | Maximum | Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | 0.025 | 0.020 | |
Expected life | Minimum | Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input (years) | 1 year 9 months 18 days | 2 years 6 months | |
Expected life | Maximum | Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input (years) | 2 years 2 months 12 days | 3 years | |
Expected volatility | Minimum | Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | 0.65 | 0.50 | |
Expected volatility | Maximum | Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | 0.70 | 0.60 | |
Dividends | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | 0 | ||
Dividends | Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input | 0 | 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||
Net income (loss) attributable to common stockholders | $ 19,813 | $ 17,929 | $ (6,439) |
Denominator: | |||
Weighted average common shares, basic (in shares) | 27,484,655 | 25,353,966 | 22,837,263 |
Weighted average common shares, diluted (in shares) | 28,416,512 | 26,269,727 | 22,837,263 |
Basic (in dollars per share) | $ 0.72 | $ 0.71 | $ (0.28) |
Diluted (in dollars per share) | $ 0.70 | $ 0.68 | $ (0.28) |
Antidilutive securities (shares) | 3,191,108 | 4,219,798 | 1,792,607 |
Restricted stock units | |||
Denominator: | |||
Antidilutive securities (shares) | 215,196 | ||
Stock Options | |||
Denominator: | |||
Antidilutive securities (shares) | 716,661 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (shares) | 3,191,108 | 4,219,798 | 1,792,607 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (shares) | 822,269 | 1,864,292 | 1,607,347 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (shares) | 13,333 | 0 | 185,260 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (shares) | 2,355,506 | 2,355,506 | 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Cumulative Effect of ASU 2014-09 (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Balance Sheet | ||||
Accounts receivable | $ 2,550 | $ 2,606 | ||
Retained earnings | 26,142 | 5,555 | ||
Prepaid income taxes | 5,429 | 0 | ||
Income Statement | ||||
Income tax provision (benefit) | 8,052 | (6,160) | $ 3 | |
Net income (loss) | 20,738 | 22,811 | $ 350 | |
Accounting Standards Update 2014-09 | ||||
Balance Sheet | ||||
Accounts receivable | 2,550 | $ 5,156 | ||
Retained earnings | 26,142 | 8,105 | ||
Other assets, non-current | 678 | |||
Prepaid income taxes | 5,429 | |||
Income Statement | ||||
Revenue | 82,300 | |||
Income tax provision (benefit) | 8,052 | |||
Net income (loss) | 20,738 | |||
Balance without adoption - ASC606 | Accounting Standards Update 2014-09 | ||||
Balance Sheet | ||||
Accounts receivable | 0 | 2,606 | ||
Retained earnings | 22,914 | $ 5,555 | ||
Other assets, non-current | 0 | |||
Prepaid income taxes | 5,429 | |||
Income Statement | ||||
Revenue | 82,300 | |||
Income tax provision (benefit) | 8,052 | |||
Net income (loss) | 20,738 | |||
Effect of change | Accounting Standards Update 2014-09 | ||||
Balance Sheet | ||||
Accounts receivable | (2,550) | 2,550 | ||
Retained earnings | 3,228 | $ 2,550 | ||
Other assets, non-current | (678) | |||
Prepaid income taxes | 0 | |||
Income Statement | ||||
Revenue | 0 | |||
Income tax provision (benefit) | 0 | |||
Net income (loss) | $ 0 |
Prepaid Expenses And Other Cu_3
Prepaid Expenses And Other Current Assets & Patents And Intangible Assets - Schedule of Prepaid Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Prepaid income taxes | $ 5,429 | $ 0 |
Other prepaid expenses and other current assets | 1,151 | 765 |
Total | $ 6,580 | $ 765 |
Prepaid Expenses And Other Cu_4
Prepaid Expenses And Other Current Assets & Patents And Intangible Assets - Narrative (Details) | May 15, 2018patent | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1,800,000 | $ 800,000 | $ 0 | |
Future amortization costs | $ 5,500,000 | |||
Amortization period | 4 years 6 months | |||
Patents | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Patents, useful life | 4 years | |||
Patent Assignment Agreement | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Patents, useful life | 5 years | |||
Number of assets transferred | patent | 56 |
Prepaid Expenses And Other Cu_5
Prepaid Expenses And Other Current Assets & Patents And Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents | $ 26,069 | $ 26,552 |
Less: accumulated amortization | (20,562) | (18,804) |
Intangible assets, net | $ 5,507 | $ 7,748 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Less accumulated depreciation | $ (209) | $ (179) | |
Property and equipment, net | 99 | 140 | |
Depreciation | 30 | 63 | $ 63 |
Office equipment, leasehold improvements and furniture | |||
Property, Plant and Equipment [Line Items] | |||
Office equipment, leasehold improvements and furniture | $ 308 | $ 319 |
Investments - Narrative (Detai
Investments - Narrative (Details) - Venture Capital Funds - USD ($) $ in Millions | Nov. 21, 2013 | Dec. 31, 2018 |
Investment [Line Items] | ||
Capital commitment | $ 5 | $ 1.8 |
Cash distribution | $ 0.3 | |
Finjan Holdings | ||
Investment [Line Items] | ||
Percentage of limited partnership interest | 10.00% |
Investments - Summary of Inves
Investments - Summary of Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments [Roll Forward] | |||
Beginning Balance | $ 2,618 | ||
Ending Balance | 3,518 | $ 2,618 | |
Venture Capital Fund | |||
Investments [Roll Forward] | |||
Beginning Balance | 2,618 | 2,745 | $ 2,195 |
Investment made during period | 900 | 550 | |
Cash distribution during 2017 | (127) | ||
Ending Balance | $ 3,518 | $ 2,618 | $ 2,745 |
Accrued Expenses and Warrant _3
Accrued Expenses and Warrant Liability - Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Compensation | $ 336 | $ 1,233 |
Other | 58 | 70 |
Total | $ 394 | $ 1,303 |
Accrued Expenses and Warrant _4
Accrued Expenses and Warrant Liability - Warrant Liability (Details) - Derivative Liabilities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, December 31, 2017 | $ 1,096 | $ 0 |
Fair value of derivative liabilities at issuance | 3,313 | |
Change in the fair value of derivative liabilities | 3,445 | (2,217) |
Reclassification to additional paid-in capital | (4,541) | |
Balance, December 31, 2018 | $ 0 | $ 1,096 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 19, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Annual rent expense | $ 700 | |||
Percent increase in annual rent expense | 3.50% | |||
Security deposit | 214 | |||
2019 | 747 | |||
2020 | 773 | |||
2021 | 801 | |||
2022 | 829 | |||
2023 | 425 | |||
Total | 3,575 | |||
Rent expense | 632 | $ 754 | $ 782 | |
Deferred rent payable | 74 | 36 | ||
Rental income | $ 244 | $ 350 | $ 394 |
Commitments and Contingencies_2
Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands | Aug. 24, 2017USD ($) | Apr. 21, 2017USD ($)installment | Dec. 31, 2018USD ($)installment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Schedule of Investments [Line Items] | |||||
Purchase of intangible assets | $ 1,000 | $ 2,000 | $ 0 | ||
Avira, Inc. | |||||
Schedule of Investments [Line Items] | |||||
Sale of patent in license agreement | $ 3,900 | $ 2,000 | |||
Number of quarterly installment payments | installment | 12 | 6 | |||
Installment amount payable | $ 325 | ||||
Fee receivable period | 3 years | ||||
IBM | Patents | |||||
Schedule of Investments [Line Items] | |||||
Fee receivable period | 3 years | ||||
Intangible assets acquired | $ 8,500 | ||||
Purchase of intangible assets | 2,000 | ||||
Cash payable | $ 6,500 | $ 5,500 | |||
Weighted average useful life | 4 years |
Litigation, Claims and Assess_2
Litigation, Claims and Assessments - (Details) $ in Millions | Mar. 29, 2016inter_parts_review | Aug. 04, 2015USD ($) | Jun. 10, 2016petition | May 26, 2016petition | Apr. 27, 2016petition | Nov. 06, 2015petition | Nov. 05, 2015petition |
Finjan, Inc. v. Blue Coat Systems, Inc | |||||||
Loss Contingencies [Line Items] | |||||||
Damages awarded | $ | $ 39.5 | ||||||
Symantec Corp | |||||||
Loss Contingencies [Line Items] | |||||||
Number of petitions filed for inter partes review | 3 | ||||||
Palo Alto Networks, Inc | |||||||
Loss Contingencies [Line Items] | |||||||
Number of petitions filed for inter partes review | 2 | 2 | |||||
Number of inter parts review | inter_parts_review | 2 | ||||||
Blue Coat Systems, Inc | |||||||
Loss Contingencies [Line Items] | |||||||
Number of petitions filed for inter partes review | 2 | 2 |
License, Settlement and Relea_2
License, Settlement and Release Agreements (Details) $ in Thousands | Jan. 28, 2019USD ($) | Jun. 29, 2018USD ($)patent | Apr. 09, 2018USD ($) | Apr. 06, 2018USD ($)installment_payment | Mar. 19, 2018USD ($) | Feb. 28, 2018USD ($) | Feb. 01, 2018USD ($) | Dec. 29, 2017USD ($) | Apr. 21, 2017USD ($) | Mar. 31, 2017USD ($) | Mar. 24, 2017USD ($) | Mar. 02, 2017USD ($) | Jan. 13, 2017USD ($) | Dec. 28, 2016USD ($) | Sep. 01, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 27, 2016USD ($) | Jun. 06, 2016USD ($) | Jun. 03, 2016USD ($) | Mar. 31, 2016USD ($) | Jan. 14, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 30, 2015USD ($) | Apr. 22, 2015USD ($) | Apr. 07, 2015USD ($) | Jan. 16, 2015USD ($) | Sep. 24, 2014USD ($)installment_payment | Mar. 31, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Mar. 31, 2019USD ($) | Jan. 31, 2019USD ($) | Dec. 28, 2018USD ($) | Sep. 26, 2018USD ($) | Mar. 31, 2018USD ($) | Jan. 31, 2018USD ($) | Mar. 30, 2017USD ($) | Sep. 30, 2015USD ($) |
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | $ 82,300 | $ 50,484 | $ 18,387 | |||||||||||||||||||||||||||||||||||||
Trend Micro Parties | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Litigation settlement, amount awarded from other party | $ 13,400 | |||||||||||||||||||||||||||||||||||||||
Cash received from license agreement | 13,400 | |||||||||||||||||||||||||||||||||||||||
Number of assets transferred | patent | 18 | |||||||||||||||||||||||||||||||||||||||
Carbon Black, Inc | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Cash received from license agreement | $ 1,300 | $ 3,900 | ||||||||||||||||||||||||||||||||||||||
Payment period | 5 days | |||||||||||||||||||||||||||||||||||||||
Receivable related to license agreement | $ 1,300 | $ 1,300 | ||||||||||||||||||||||||||||||||||||||
Percentage of gross revenues | 8.00% | |||||||||||||||||||||||||||||||||||||||
Number of quarterly installment payments | installment_payment | 4 | |||||||||||||||||||||||||||||||||||||||
Symantec Corp | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Litigation settlement, amount awarded from other party | $ 65,000 | |||||||||||||||||||||||||||||||||||||||
Payment period | 20 years | |||||||||||||||||||||||||||||||||||||||
Fee receivable period | 4 years | |||||||||||||||||||||||||||||||||||||||
FireEye License | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Receivable related to license agreement | $ 5,000 | |||||||||||||||||||||||||||||||||||||||
Sale of patent in license agreement | 17,500 | |||||||||||||||||||||||||||||||||||||||
License fee receivable | 5,000 | |||||||||||||||||||||||||||||||||||||||
EU Licensee | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Litigation settlement, amount awarded from other party | $ 4,900 | |||||||||||||||||||||||||||||||||||||||
Payment period | 10 days | |||||||||||||||||||||||||||||||||||||||
Receivable related to license agreement | $ 2,300 | $ 1,300 | ||||||||||||||||||||||||||||||||||||||
EU Licensee | Licensing Agreements | Subsequent Event | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Receivable related to license agreement | $ 1,300 | |||||||||||||||||||||||||||||||||||||||
Sophos Inc | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Cash received from license agreement | $ 15,000 | |||||||||||||||||||||||||||||||||||||||
Receivable related to license agreement | $ 1,250 | $ 2,500 | ||||||||||||||||||||||||||||||||||||||
Sophos Inc | Licensing Agreements | Forecast | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Receivable related to license agreement | $ 1,250 | |||||||||||||||||||||||||||||||||||||||
Avast Software s.r.o. | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Cash received from license agreement | $ 7,745 | |||||||||||||||||||||||||||||||||||||||
Veracode, Inc, | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Cash received from license agreement | $ 2,000 | |||||||||||||||||||||||||||||||||||||||
F5 Networks, Inc. | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Sale of patent in license agreement | 4,000 | |||||||||||||||||||||||||||||||||||||||
European Cloud-Based Network Security Firm | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Sale of patent in license agreement | $ 565 | |||||||||||||||||||||||||||||||||||||||
Proofpoint and Amorize Technologies | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Cash received from license agreement | $ 3,300 | $ 4,300 | ||||||||||||||||||||||||||||||||||||||
Receivable related to license agreement | $ 3,300 | |||||||||||||||||||||||||||||||||||||||
Sale of patent in license agreement | $ 10,900 | |||||||||||||||||||||||||||||||||||||||
License fee receivable | $ 10,900 | |||||||||||||||||||||||||||||||||||||||
United States-based third party | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Cash received from license agreement | $ 1,000 | $ 1,650 | $ 1,000 | |||||||||||||||||||||||||||||||||||||
Revenues | 2,650 | |||||||||||||||||||||||||||||||||||||||
Sale of patent in license agreement | $ 3,650 | |||||||||||||||||||||||||||||||||||||||
License fee receivable | 3,650 | |||||||||||||||||||||||||||||||||||||||
F-Secure Corporation | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Fully-paid, non-exclusive field of use license term (in years) | 2 years | |||||||||||||||||||||||||||||||||||||||
F-Secure Corporation | Patents | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Cash received from license agreement | $ 300 | $ 700 | ||||||||||||||||||||||||||||||||||||||
Revenues | 300 | |||||||||||||||||||||||||||||||||||||||
Sale of patent in license agreement | $ 1,000 | |||||||||||||||||||||||||||||||||||||||
License fee receivable | $ 1,000 | |||||||||||||||||||||||||||||||||||||||
Websense | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
License fee receivable | $ 8,000 | |||||||||||||||||||||||||||||||||||||||
Number of installment payments | installment_payment | 4 | |||||||||||||||||||||||||||||||||||||||
License agreement installment | $ 1,000 | $ 2,000 | $ 2,000 | $ 3,000 | ||||||||||||||||||||||||||||||||||||
License | Carbon Black, Inc | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | 3,900 | |||||||||||||||||||||||||||||||||||||||
License | Symantec Corp | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | $ 65,000 | |||||||||||||||||||||||||||||||||||||||
License | FireEye License | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | 12,500 | |||||||||||||||||||||||||||||||||||||||
License | EU Licensee | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | $ 1,300 | 2,300 | ||||||||||||||||||||||||||||||||||||||
License | EU Licensee | Licensing Agreements | Subsequent Event | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | $ 1,300 | |||||||||||||||||||||||||||||||||||||||
License | Sophos Inc | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | 15,000 | |||||||||||||||||||||||||||||||||||||||
License | F5 Networks, Inc. | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | 4,000 | |||||||||||||||||||||||||||||||||||||||
License | European Cloud-Based Network Security Firm | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | $ 565 | |||||||||||||||||||||||||||||||||||||||
License | Proofpoint and Amorize Technologies | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | $ 3,300 | $ 7,600 | ||||||||||||||||||||||||||||||||||||||
License | United States-based third party | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | $ 1,000 | |||||||||||||||||||||||||||||||||||||||
License | F-Secure Corporation | Patents | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Revenues | $ 700 | |||||||||||||||||||||||||||||||||||||||
Maximum | Symantec Corp | Licensing Agreements | ||||||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Additional license fees | $ 45,000 |
Stockholders' Equity - Authoriz
Stockholders' Equity - Authorized Capitalization (Details) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Equity [Abstract] | |||
Common stock, shares authorized (shares) | 80,000,000 | 80,000,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (shares) | 10,000,000 | 10,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Program (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | May 02, 2018 | |
Equity [Abstract] | ||
Authorized repurchase amount | $ 10,000,000 | |
Repurchased shares (shares) | 686,492 | |
Repurchased shares, value | $ 2,000,000 | |
Repurchased price per share (in dollars per share) | $ 2.93 | |
Remaining authorized repurchase amount | $ 8,000,000 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2017 | Jun. 30, 2018 | |
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Value of shares redeemed | $ 13.8 | ||||
Number of shares redeemed (in shares) | 83,502 | ||||
Reduction in the original recorded value of preferred stock | $ 8.4 | ||||
Reduction in the accretive value of the preferred stock | $ 5.4 | ||||
Series A-1 Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Value of shares redeemed | $ 19.9 | ||||
Number of shares redeemed (in shares) | 153,000 | ||||
Reduction in the original recorded value of preferred stock | $ 15.3 | ||||
Reduction in the accretive value of the preferred stock | 4.6 | ||||
Issuance costs | $ 1 | ||||
Deemed dividend | $ 4.6 | ||||
Private Placement | Soryn HLDR | Series A-1 Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Shares issued (in shares) | 153,000 | ||||
Price per share (in dollars per share) | $ 100 | ||||
Proceeds from private placement | $ 15.3 |
Stockholders' Equity - Warrant
Stockholders' Equity - Warrant (Details) - USD ($) | Jun. 19, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 19, 2018 | Jul. 21, 2017 | Jun. 30, 2017 |
Class of Warrant or Right [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares issued (in shares) | 27,568,656 | 27,707,328 | |||||
Series A-1 warrant liability | $ 0 | $ 3,313,000 | $ 0 | ||||
Change in fair value of warrant liability | 3,445,000 | $ (2,217,000) | $ 0 | ||||
Aggregate intrinsic value of the warrant | $ 0 | ||||||
Common Stock Warrant | |||||||
Class of Warrant or Right [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 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 | ||||||
Term of warrant | 3 years | 1 year 6 months | |||||
Series A-1 warrant liability | $ 3,300,000 | ||||||
Common Stock | Common Stock Warrant | Soryn HLDR | |||||||
Class of Warrant or Right [Line Items] | |||||||
Common stock warrant purchased (shares) | 2,000,000 | 2,355,506 | |||||
Common stock, shares issued (in shares) | 2,000,000 | 50,000 | 300,000 | ||||
Series A-1 warrant liability | $ 4,500,000 | ||||||
Change in fair value of warrant liability | $ (3,400,000) |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 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 | $ 0 | $ 11,952 | $ 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 | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
New share issues (shares) | 4,140,000 | |||
Common Stock | Underwriting Agreement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
New share issues (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 (shares) | 500,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | Jun. 21, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 10, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of common stock from exercise of stock options (shares) | 547,820 | 464,600 | |||
Proceeds from exercise of stock options | $ 357 | $ 229 | $ 111 | ||
Expected dividend yield | 0.00% | ||||
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued under plan (shares) | 315,292 | 438,712 | 185,260 | ||
Restricted stock units exercised (in shares) | 323,420 | 322,760 | |||
Stock-based compensation expense | $ 900 | $ 600 | $ 700 | ||
Compensation cost not yet recognized | $ 600 | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of common stock from exercise of stock options (shares) | 224,400 | 141,840 | |||
Proceeds from exercise of stock options | $ 300 | $ 200 | |||
Compensation cost not yet recognized | $ 1,700 | ||||
Compensation cost not yet recognized, period for recognition | 2 years 3 months 18 days | ||||
Selling, General and Administrative Expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 1,600 | $ 800 | $ 900 | ||
Global Share Option Plan and Israeli Sub-Plan | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock underlying options outstanding (shares) | 1,489,532 | ||||
2014 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized under plan (shares) | 2,196,836 | ||||
Shares available for issuance under plan (shares) | 1,565,103 | ||||
2014 Plan | Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued under plan (shares) | 200,000 | 576,212 | |||
2014 Plan | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted (shares) | 376,667 | 898,334 | |||
Finjan Holdings, Inc. 2014 Incentive Compensation Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of additional shares authorized (shares) | 1,000,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Options Outstanding | |||
Options exercised (shares) | 547,820 | 464,600 | |
Stock options | |||
Number of Options Outstanding | |||
Outstanding, beginning (shares) | 2,341,340 | 1,607,346 | |
Options granted (shares) | 376,667 | 898,334 | |
Options exercised (shares) | 224,400 | 141,840 | |
Options forfeited (shares) | 6,961 | 22,500 | |
Outstanding, ending (shares) | 2,486,646 | 2,341,340 | 1,607,346 |
Outstanding, Exercisable (shares) | 1,450,458 | ||
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 1.77 | $ 0.83 | |
Options granted (in dollars per share) | 2.41 | 2.13 | |
Options exercised (in dollars per share) | 1.59 | 1.60 | |
Options forfeited (in dollars per share) | 1.42 | 1.78 | |
Ending balance (in dollars per share) | 1.89 | $ 1.77 | $ 0.83 |
Exercisable (in dollars per share) | $ 1.66 | ||
Average Remaining Contractual Life (in years) | 7 years 4 days | 5 years 9 months 10 days | 7 years 25 days |
Average Remaining Contractual Life, Exercisable (in years) | 5 years 8 months 12 days | ||
Aggregate Intrinsic Value, Outstanding | $ 1,550 | $ 1,087 | $ 0 |
Aggregate Intrinsic Value, Exercisable | $ 1,235 |
Stock-Based Compensation - Valu
Stock-Based Compensation - Valuation Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | |
Employee Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 82.00% | 138.90% |
Expected term (in years) | 6 years | 6 years |
Risk-free rate | 2.24% | 2.00% |
Expected dividend yield | 0.00% | 0.00% |
Weighted average grant date fair value per share (in dollars per share) | $ 2.22 | $ 2.05 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | ||
Non-vested, beginning balance (shares) | 438,712 | 185,260 |
Shares granted (shares) | 200,000 | 576,212 |
Shares vested (shares) | 323,420 | 322,760 |
Non-vested, ending balance (shares) | 315,292 | 438,712 |
Weighted Average Grant Date Fair Value | ||
Weighted average grant date fair value, beginning balance (in dollars per share) | $ 2.28 | $ 2.67 |
Shares granted (in dollars per share) | 3.16 | 1.95 |
Shares vested (in dollars per share) | 2.84 | 1.92 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ 2.26 | $ 2.28 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Jul. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Chairman | Legal Services | |||||
Related Party Transaction [Line Items] | |||||
Legal fees | $ 302 | $ 240 | $ 227 | ||
Amounts due to firm | $ 163 | $ 112 | |||
Chief Financial Officer | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 50.00% | ||||
Chief Financial Officer | Social Media and Investor Related Services | |||||
Related Party Transaction [Line Items] | |||||
Social media and investor related fees | $ 22 | $ 80 | |||
Director | |||||
Related Party Transaction [Line Items] | |||||
Rental income | $ 45 | ||||
Benhamou Global Ventures | Director | |||||
Related Party Transaction [Line Items] | |||||
Rental income | $ 15 |
Income Tax - Components of Loss
Income Tax - Components of Loss Before Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 29,110 | $ 17,120 | $ 1,097 |
Foreign | (320) | (469) | (744) |
Income / (loss) before provision for income taxes | $ 28,790 | $ 16,651 | $ 353 |
Income Tax - Provision (Benefit
Income Tax - Provision (Benefit) for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Federal: | |||
Current | $ 4,010 | $ 0 | $ 0 |
Deferred | 2,231 | 7,694 | 416 |
State: | |||
Current | 1,329 | 43 | 3 |
Deferred | 482 | 269 | (380) |
Foreign: | |||
Current | 0 | 0 | 0 |
Deferred | 73 | (129) | (174) |
Total Federal, State and Foreign | 8,125 | 7,877 | (135) |
Change in valuation allowance | (73) | (14,037) | 138 |
Income tax provision (benefit) | $ 8,052 | $ (6,160) | $ 3 |
Income Tax - Effective Income T
Income Tax - Effective Income Tax Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. Federal statutory rate | 21.00% | 34.00% | 34.00% |
State rate, net of federal benefit | 5.00% | 2.80% | 7.80% |
Permanent differences: | |||
Change in tax rate | 0.00% | 16.40% | (113.00%) |
Impact of tax reform | (0.00%) | (16.40%) | (0.00%) |
Deferred tax adjustment | 0.50% | (0.30%) | (19.10%) |
Stock based compensation | (0.40%) | 0.10% | 28.90% |
§162(m) limited compensation | 1.10% | 0.00% | 0.00% |
Foreign tax rate difference | 0.00% | 0.30% | 19.30% |
Fair value measurement of warrants | 2.50% | (4.50%) | 0.00% |
Other | (2.00%) | (1.60%) | 3.00% |
Change in valuation allowance | 0.30% | (67.90%) | 40.00% |
Income tax provision (benefit) | 28.00% | (37.10%) | 0.90% |
Income Tax - Deferred Tax Asset
Income Tax - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets | |||
Net operating losses | $ 535 | $ 3,912 | $ 10,032 |
Stock-based compensation | 736 | 572 | 949 |
Intangible assets | 2,412 | 2,190 | 3,748 |
Other | 340 | 115 | 77 |
Total deferred tax assets | 4,023 | 6,789 | 14,806 |
Valuation allowance | (535) | (462) | (14,497) |
Deferred tax asset, net of valuation allowance | 3,488 | 6,327 | 309 |
Deferred tax liability | (677) | (126) | (309) |
Net deferred tax assets | $ 2,811 | $ 6,201 | $ 0 |
Income Tax - Additional Informa
Income Tax - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
NOL carryforwards | $ 0 | $ 12,700,000 | $ 26,100,000 |
Change in valuation allowance | (73,000) | (14,037,000) | $ 138,000 |
Provisional income tax expense | 2,800,000 | 2,800,000 | |
Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
NOL carryforwards | $ 2,300,000 | $ 2,000,000 |
Uncategorized Items - fnjn-2018
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 1,872,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 1,872,000 |