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, 2017, the Company has 749,443 shares available for issuance under the 2014 Plan.

During 2016, the Company issued 200,000 RSU's and granted an aggregate of 295,000 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 RSU's 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, 2017, the Company issued 141,840 shares of common stock and received proceeds of $0.2 million from the exercise of stock options.

During the year ended December 31, 2016, the Company issued 67,000 shares of common stock and received proceeds of $0.1 million from the exercise of stock options.

Total stock-based compensation for stock options and restricted stock awards, of $0.8 million, $0.9 million and $0.8 million was recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations for the years ended December 31, 2017, 2016 and 2015, 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, 2017 and 2016:



	Number of Options Outstanding	Weighted Average Exercise Price		Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (thousands)

Outstanding – December 31, 2015	1,510,832	1.63			$	—
Options granted	295,000	1.12
Options exercised	67,000	0.76
Options forfeited	131,486	0.97

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

Exercisable – December 31, 2017	1,280,979	$	1.60	5.78	$	815
Exercisable – December 31, 2016	1,229,704	$	0.77	6.48	$	—

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, 2017 and 2016, 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:



	2017			2016
	Employee Grants			Employee Grants
Weighted-average Black-Scholes option pricing model assumptions:
Volatility	138.90		%	148.68		%
Expected term (in years)	6			7
Risk-free rate	2.00		%	1.26		%
Expected dividend yield	0.0		%	0.0		%
Weighted average grant date fair value per share	$	2.05		$	1.15

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. Since the Company’s common stock was not publicly traded, or was not publicly traded for an extended duration at the time of the grant, an average of the historic volatilities of comparative companies was used. 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, 2017, 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 5.9 years.

RESTRICTED STOCK UNITS

The following is a summary of non-vested RSUs award activity for the years ended December 31, 2017 and 2016:



	2017			2016
	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Non-vested	185,260	$	2.67	408,710	$	2.66
Shares granted	576,212	1.95		200,000	1.20
Shares vested	322,760	1.92		395,117	1.99
Shares forfeited	—	—		28,333	1.74

Non-vested	438,712	$	2.28	185,260	$	2.67

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, 2017, 2016 and 2015, the Company recognized $0.6 million, $0.7 million and $0.5 million, respectively of stock-based compensation expense related to the RSUs.