Shareholders' Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

SHAREHOLDERS' EQUITY

NOTE 9: SHAREHOLDERS' EQUITY

a. General:

Ordinary shares confer upon their holders the right to receive notice to participate and vote in general shareholder meetings of the Company and to receive dividends, if declared.

b. Issuance of convertible notes:

On December 5, 2018 the Company issued $10,000 aggregate principal amount of convertible notes in a private offering. The notes are unsecured, unsubordinated obligations of Cyren and carry a 5.75% interest rate, payable semi-annually in (i) 50% cash and (ii) 50% cash or ordinary shares at Cyren's election. The notes have a 3-year term and are expected to mature in December 2021, unless converted in accordance with their terms prior to maturity. The notes were issued with a conversion price of $3.90 per share which was subject to adjustment using a weighted average ratchet mechanism based on the size and price of future equity offerings and the total shares outstanding. On November 7, 2019 Cyren announced the closing of a rights offering that raised gross proceeds of $8,019. As a result of this offering, the conversion price of the convertible notes was adjusted to $3.73. In addition, the notes would be subject to immediate conversion upon any change in control in the Company (or subject to repayment if the price in the change in control transaction is less than the conversion price). The Company incurred interest expense $568 and $40 for the years ended December 31, 2019, and 2018, respectively. In June 2019, the Company paid the first of the semi-annual interest payments totaling, $287, of which $215 was paid in cash and the remaining portion through the issuance of 35,950 shares. In December 2019, the Company paid the second of the semi-annual interest payments totaling, $288, of which $216 was paid in cash and the remaining portion through the issuance of 46,532 shares. The Company has accrued interest of $32 and $40 as of December 31, 2019, and 2018 respectively.

c. Equity Incentive Plan:

In 1996, the Company adopted the 1996 CSI Stock Option Plan for granting options to its U.S. employees and consultants to purchase ordinary shares of the Company, which was replaced in 2006 by the 2006 U.S. Stock Option Plan. Until 1999, the Company issued options to purchase ordinary shares to its Israeli employees pursuant to individual agreements. In 1999, the Company approved the 1999 Section 3(i) share option plan for its Israeli employees and consultants, (which was amended in 2003 and renamed the "Amended and Restated Israeli Share Option Plan"). On December 22, 2016, the Company's shareholders approved a new stock option plan - the 2016 Equity Incentive Plan (the "Equity Incentive Plan"). This plan, along with its respective Israeli appendix, has replaced all existing employee and consultants stock option plans which have terminated.

The Equity Incentive Plan allows for the issuance of Restricted Stock Units ("RSUs"), as well as options. The options and RSUs generally vest over a period of four years. Options granted under the Equity Incentive Plan generally expire after six years from the date of grant. Options and RSUs cease vesting upon termination of the optionee's employment or other relationship with the Company. The per share exercise price for options shall be no less than 100% of the fair market value per ordinary share on the date of grant. Any options and RSUs that are canceled or not exercised within the option term become available for future grant.

On July 30, 2019, the shareholders of the Company approved an increase in the number of Ordinary Shares reserved for issuance under the 2016 Equity Incentive Plan and its respective Israeli Appendix to a total of 11,200,000.

As of December 31, 2019, an aggregate of 8,515,306 ordinary shares of the Company are still available for future grant under the Equity Incentive Plan.

d. Non-Employee Directors stock option plan:

In 1999, the Company adopted the 1999 Directors Stock Option Plan, and in 2008 shareholders approved an extension of the term of this plan through July 13, 2019. On December 15, 2006, the plan was extended through 2016. On December 22, 2016, the Company's shareholders approved a new stock option plan - the 2016 Non-Employee Director Equity Incentive Plan (the "Non-Employee Director Plan"). This plan, along with its respective Israeli appendix, has replaced all existing Directors stock option plans which have terminated.

The Non-Employee Director Plan allows for the issuance of Restricted Stock Units ("RSUs"), as well as options. Each option and RSU granted under the Non-Employee Plan generally vests over a period of four years. Each option has an exercise price equal to the fair market value of the ordinary shares on the grant date of such option. Options granted under the Non-Employee Director Plan generally expire after six years from the date of grant. Options and RSUs cease vesting upon termination of the relationship with the Company.

On July 30, 2019 the shareholders of the Company approved an increase in the number of Ordinary Shares reserved for issuance under the Non-Employee Director Plan and its respective Israeli Appendix to a total of 1,150,000 Ordinary Shares.

As of December 31, 2019, an aggregate of 1,396,882 ordinary shares of the Company are still available for future grant to non-employee directors.

e. A summary of the Company's employees and directors' stock option activity under the plans is as follows:

	Number of options			Weighted average exercise price		Weighted average remaining contractual term (years)		Aggregate intrinsic value
Outstanding at January 1, 2019		6,474,982		$	2.28		3.39	$	4,475
Granted		2,760,500			1.90
Exercised		(470,899	)		1.58
Expired and forfeited		(1,464,916	)		2.59
Outstanding at December 31, 2019		7,299,667		$	2.12		3.81	$	-
Options vested and expected to vest at December 31, 2019		6,989,631		$	2.17		3.74	$	-
Exercisable options at December 31, 2019		3,797,668		$	2.27		2.48	$	-
Weighted average fair value of options granted during the year				$	0.72

As of December 31, 2019, the Company had $2,595 of unrecognized compensation expense related to non-vested stock options, expected to be recognized over a remaining weighted average period of 3.0 years.

f. The employee and directors' options outstanding as of December 31, 2019, have been separated into ranges of exercise prices, as follows:

Outstanding							Exercisable
Exercise			Weighted average remaining		Weighted average exercise				Weighted average exercise
price per	Options		contractual		price per		Options		price per
share	outstanding		life in years		share		exercisable		share
$1.44 - $1.93		2,376,531		4.38	$	1.62		951,031	$	1.57
$2.00 - $2.13		2,349,571		4.07	$	2.06		1,269,571	$	2.59
$2.14 - $2.75		1,106,701		4.25	$	2.37		426,543	$	2.34
$2.90 - $3.07		1,146,364		2.56	$	2.97		838,703	$	2.99
$3.20 - $3.32		320,500		.54	$	3.32		311,820	$	3.32
		7,299,667		3.81	$	2.16		3,797,668	$	2.45

g. Options to non-employees and non-directors:

Issuance date	Options outstanding		Exercise price per share		Options exercisable		Exercisable through
May 14, 2014		3,000	$	3.32		3,000	May-20
February 18, 2015		3,000	$	3.00		3,000	Feb-21
February 10, 2016		40,000	$	1.44		40,000	Feb-22
January 24, 2017		25,000	$	2.00		25,000	Jan-23
		71,000				71,000

The options vest and become exercisable at a rate of 1/16 of the options every three months.

As of December 31, 2019, the Company did not have any unrecognized compensation expense related to non-employee non-vested stock options.

h. A summary of the Company's RSUs activity for employees, directors and non-employees under the plans is as follows:

	Number of RSUs			Weighted Average Grant Date Fair Value
Awarded and unvested at December 31, 2018		479,000		2.47
Granted		1,421,382		2.00
Vested		(126,000	)	2.42
Forfeited		(41,250	)	2.30
Awarded and unvested at December 31, 2019		1,733,132		2.09

As of December 31, 2019, the Company had approximately $2,150 of unrecognized compensation expense related to RSUs, expected to be recognized over a weighted average period of 3.12 years.

i. The total stock-based compensation expense related to all of the Company's equity-based awards, recognized for the years ended December 31, 2019 and 2018, was as follows:

	Year ended December 31,
	2019		2018
Cost of revenues	$	241	$	174
Research and development		467		407
Sales and marketing		356		387
General and administrative		1,296		472
	$	2,360	$	1,440