Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation

v3.19.1
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.