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Share-based payments | 3 Months Ended
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Mar. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Share-based payments | 9. Share-based payments As of March 31, 2017, the Company maintains two share-based incentive plans: the 2008 Share Incentive Plan (the “2008 Plan”), which was carried forward as a result of the reverse acquisition between the Company and The Best One, Inc. (“TBO”) consummated on March 21, 2015, whereby TBO became a wholly-owned subsidiary of the Company (the “TBO Merger”), and the Cogint, Inc. 2015 Stock Incentive Plan (the “2015 Plan”), which was approved during the annual meeting of stockholders on June 2, 2015, which authorized the issuance of 2,500,000 shares of common stock. The 2015 Plan was amended on June 3, 2016 at the Company’s annual meeting of stockholders which approved an increase of the number of shares of common stock authorized for issuance under the 2015 Plan to 12,500,000. The primary purpose of the 2015 Plan is to attract, retain, reward and motivate certain individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such individuals and the stockholders of the Company. As of March 31, 2017, there were 180,568 and 5,632,992 shares of common stock reserved for issuance under the 2008 Plan and the 2015 Plan, respectively. Outside of the 2008 Plan and 2015 Plan, Marlin Capital Investments, LLC (“Marlin Capital”), a company which our Executive Chairman Michael Brauser owns 50% and is one of two managers, held RSUs representing the right to receive 2,000,000 shares of the Company’s common stock. These RSUs vest annually beginning from October 13, 2015 only if certain performance goals of the Company are met. The shares underlying such RSUs will not be delivered until October 13, 2018, unless there is a change of control of the Company. For the three months ended March 31, 2017 and 2016, share-based compensation expenses of $311 and $311, associated with shares under the Marlin Capital agreement, were recognized, respectively. Outside of the 2008 Plan and 2015 Plan, effective November 16, 2015, the Company entered into an employment agreement with Michael Brauser (the “Michael Brauser Employment Agreement”) relating to his service as Executive Chairman of the Board of Directors, pursuant to which, Michael Brauser will receive an annual base salary of $25 payable in accordance with the Company’s general payroll practices and RSUs representing the right to receive 5,000,000 shares of common stock. The issuance of shares of common stock underlying the RSUs was approved by the stockholders at the annual meeting in 2016. These RSUs vest ratably over a four year period; provided, however, that no portion of the RSUs shall vest unless and until the Company has gross revenue in excess of $100.0 million and positive EBITDA in any one fiscal year during the vesting period (the “Vesting Conditions”). In addition, such RSUs vest in full upon a Company change in control, termination of Michael Brauser without cause, termination by Michael Brauser for good reason, or Michael Brauser’s death or disability. The Company determined that the Vesting Conditions were met, effective March 14, 2017, and as a result, 1,250,000 shares were vested, but Michael Brauser has elected to defer delivery of any vested RSUs until his separation from service from the Company or death or disability. Outside of the 2008 Plan and 2015 Plan, on December 8, 2015, at the time of Dr. Phillip Frost’s joining the Board of Directors of the Company as Executive Vice Chairman, Frost Gamma received a grant of 3,000,000 RSUs, and the issuance of shares of common stock underlying such RSUs was approved by the stockholders at the annual meeting in 2016. These grants were fully vested on December 8, 2015, but Frost Gamma has elected to defer delivery of any vested RSUs until Dr. Phillip Frost’s separation from service from the Company or death or disability. Share options Details of share options activity during the three months ended March 31, 2017 were as follows:
|  | Number of options |  |  | Weighted average exercise price per share |  |  | Weighted average remaining contractual term |  | Aggregate intrinsic value |
Outstanding as of December 31, 2016 |  |  | 352,000 |  |  | $ | 10.25 |  |  | 4.4 years |  | $ | - |
Outstanding as of March 31, 2017 |  |  | 352,000 |  |  | $ | 10.25 |  |  | 4.1 years |  | $ | - |
Options vested and expected to vest as of March 31, 2017 |  |  | 352,000 |  |  | $ | 10.25 |  |  | 4.1 years |  | $ | - |
Options exercisable as of March 31, 2017 |  |  | 283,250 |  |  | $ | 10.56 |  |  | 3.0 years |  | $ | - |
The aggregate intrinsic value amounts in the table above represent the difference between the closing price of the Company’s common stock on March 31, 2017 of $4.65 and the exercise price, multiplied by the number of in-the-money stock options as of the same date. The unvested balance of options is shown below for the three months ended March 31, 2017:
|  | Number of options |  |  | Weighted average exercise price per share |  |  | Weighted average remaining contractual term
Unvested as of December 31, 2016 |  |  | 68,750 |  |  | $ | 8.91 |  |  | 8.9 years
Unvested as of March 31, 2017 |  |  | 68,750 |  |  | $ | 8.91 |  |  | 8.7 years
Compensation expenses recognized from employee stock options for the three months ended March 31, 2017 and 2016 of $110 and $16, respectively, were recognized in general and administrative expenses in the condensed consolidated statements of operations. As of March 31, 2017, unrecognized share-based compensation cost relating to granted share options amounted to $336, which are expected to be recognized over a weighted average period of 2.7 years. Restricted stock units Details of unvested RSUs activity during the three months ended March 31, 2017 were as follows:
|  | Number of units |  |  | Weighted average grant-date fair value |
Unvested as of December 31, 2016 |  |  | 12,407,029 |  |  | $ | 8.40 |
Vested and delivered |  |  | (677,545 | ) |  | $ | 7.93 |
Withheld as treasury stock (1) |  |  | (44,796 | ) |  | $ | 12.08 |
Vested not delivered (2) |  |  | (2,238,254 | ) |  | $ | 9.71 |
Forfeited |  |  | (77,250 | ) |  | $ | 5.39 |
Unvested as of March 31, 2017 |  |  | 9,369,184 |  |  | $ | 8.13 |
(1) | As discussed in Note 8, the increase in treasury stock was due to shares withheld to pay statutory withholding taxes upon the vesting of RSUs during the three months ended March 31, 2017.
(2) | Vested not delivered represent the vested RSUs with deferred delivery at a future time. As of March 31, 2017, the cumulative shares of RSUs included in “vested not delivered” above were 6,345,921.
The Company recognized compensation expenses (included in sales and marketing expenses, and general and administrative expenses in the condensed consolidated statements of operations, and intangible assets in the condensed consolidated balance sheets) for these RSUs of $7,448 and $7,511 for the three months ended March 31, 2017 and 2016, respectively. The fair value of the RSUs was estimated using the market value of the Company’s common stock on the date of grant, which was equivalent to the closing price of the common stock on the grant date. As of March 31, 2017, unrecognized share-based compensation expenses associated with the granted RSUs amounted to $65,920, which are expected to be recognized over a weighted average period of 2.3 years. Shares issued to third-party vendors The Company issues shares to certain third-party vendors from time to time in lieu of cash for services rendered. Stock compensation expenses for shares issued to third-party vendors of $0 and $129 for the three months ended March 31, 2017 and 2016, respectively, were recognized in general and administrative expenses. The share-based compensation expenses for the Company’s share options, RSUs and common stock were allocated to the following accounts in the condensed consolidated financial statements for the three months ended March 31, 2017 and 2016:
|  | Three Months Ended March 31, |
(In thousands) |  | 2017 |  |  | 2016 |
Sales and marketing expenses |  | $ | 698 |  |  | $ | 546 |
General and administrative expenses |  |  | 6,614 |  |  |  | 6,832 |
|  |  | 7,312 |  |  |  | 7,378 |
Capitalized in intangible assets |  |  | 246 |  |  |  | 278 |
Total |  | $ | 7,558 |  |  | $ | 7,656 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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