STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Stock-based Compensation

On July 10, 2014, the Company’s stockholders approved the Finjan Holdings, Inc. 2014 Incentive Compensation Plan (the "2014 Plan") at the annual meeting of stockholders, pursuant to which 2,196,836 shares of common stock were authorized for issuance.  On June 24, 2015, the Company adopted the 2015 Israeli Sub-plan (the “2015 Israeli Sub-plan”) to the Company’s 2014 Plan, which enables the Company to grant options, and issue shares of common stock to employees and non-employees, who are employed by the Company or any of its affiliates, who are residents of the State of Israel.

The Company has issued a total of 636,872 Restricted Stock Units ("RSUs") of which 308,057 remained outstanding as of March 31, 2016.  RSUs generally vest over three or four years, with one-third or one-fourth, respectively, vesting on the one-year anniversary followed by quarterly vesting thereafter.  

Upon shareholder approval of the 2014 Plan, the 2013 Global Share Option Plan and Israeli Sub-Plan were terminated, other than respect to options outstanding under such plans. 1,333,331 options remain outstanding under these plans as of March 31, 2016.

Stock-based compensation to employees and non-employees are recognized as expense in the condensed consolidated statement of operations. The compensation cost for all stock-based awards is measured at the grant date, based on the fair value of the award (determined using Black-Scholes option pricing model for stock options and intrinsic value for RSUs), and is recognized as an expense over the requisite service period (generally the vesting of the equity awards). Determining the fair value of stock-based awards at the grant date requires significant estimates and judgments, including future employee stock option exercise behavior and requisite service periods.

During the three months ended March 31, 2016 and March 31, 2015, the Company expensed $142,000 and $355,000, respectively, of stock-based compensation in the condensed consolidated statements of operations. The aggregate intrinsic value of stock options outstanding and exercisable as of March 31, 2016 was $0.

During the three months ended March 31, 2016, the Company granted options to purchase 7,500 shares of common stock. During the three months ended March 31, 2015, the Company granted 200,000 RSUs of common stock. During the three months ended March 31, 2016, 20,000 RSUs were forfeited and during the three months ended March 31, 2015, 25,000 options were forfeited.

The Company estimates the fair values of stock options using the Black-Scholes option-pricing model. The assumptions used in the Black-Scholes option-pricing model and the weighted-average grant date fair value of the option awards for the periods presented were as follows:

	Three Months Ended March 31,
	2016	2015
Volatility	151.70%	94.06%
Expected term (in years)	6.0	6.0
Risk-free rate	1.22%	1.64%
Expected dividend yield	—%	—%
Weighted-average grant date fair value	$0.96	$2.42

The risk-free interest rate is based on the U.S. Treasury rates with maturities similar to the expected term of the option. The volatility is a measure of the amount by which the Company’s share price has fluctuated or is expected to fluctuate and was based on historical volatility of comparative companies that are similar to the Company. For the three months ended March 31, 2016, the Company updated its volatility assumptions to reflect the increased trading history in the Company’s stock.The expected term was estimated using the simplified method. The simplified method calculates the expected term as the average of the time to vesting and the contractual life of the option. The dividend yield is 0% as the Company has never declared or paid any cash dividends and does not anticipate paying dividends in the future.