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Share-based compensation | 3 Months Ended
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Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Share-based compensation | Share-based compensation As of March 31, 2019, the Company maintains two share-based incentive plans: the Cogint, Inc. 2015 Stock Incentive Plan (the "2015 Plan") and the Fluent, Inc. 2018 Stock Incentive Plan (the "2018 Plan") which, combined, authorize the issuance of 21,104,836 shares of common stock. The primary purpose of the 2015 Plan and 2018 Plans, respectively, is to attract, retain, reward and motivate certain individuals by providing them with opportunities to acquire or increase their ownership interests in the Company. As of March 31, 2019, there were 78,601 and 3,865,586 shares of common stock reserved for issuance under the 2015 Plan and the 2018 Plan, respectively. Spin-off of Red Violet On March 8, 2018, the Company's Compensation Committee approved the acceleration (the "Acceleration") of stock options, RSUs and restricted stock held by certain employees, consultants, and directors, including only those employees who were to continue with Red Violet upon completion of the Spin-off, subject to such employees still being employed or providing services on March 12, 2018 (the "Acceleration Date"). An aggregate of 5,157,998 shares were accelerated, including 47,500 stock options, 4,960,498 RSUs (inclusive of 500,000 shares to Marlin Capital and 2,500,000 to Michael Brauser), and 150,000 shares of restricted stock. Share-based compensation expense of $14,667 resulting from the Acceleration was recognized in loss on disposal of discontinued operations during the first quarter of 2018. In connection with the Spin-off of Red Violet, common stock awards comprised of an aggregate of 304,000 shares were granted to certain employees of Red Violet ("Spin-off Grants") during the first quarter of 2018, and related share-based compensation expense of $881 was recognized in loss on disposal of discontinued operations. Additionally, an aggregate of 2,041,000 shares of common stock, subject to deferred delivery over a three-year period, were granted to certain Fluent employees as a result of the Spin-off ("Transaction Grants"), and related share-based compensation expense of $5,409 was recognized in costs and expenses as part of the Spin-off transaction costs during the first quarter of 2018. In total, share-based compensation expense of $15,548, which resulted from the Acceleration and Spin-off Grants in connection with the Spin-off, was recognized in loss on disposal of discontinued operations during the first quarter of 2018. See Note 3, "Discontinued operations". Stock options On January 31, 2019, the Compensation Committee of the Company's Board of Directors granted to certain officers stock options, which were issued under the 2018 Plan on February 1, 2019. Subject to continuing service, 50% of the shares subject to these stock options will vest if the Company's stock price remains above 125% of the share price at the grant date for 20 consecutive trading days, and the remaining 50% of the shares subject to these stock options will vest if the Company's stock price remains above 156.25% of the share price at the grant date for 20 consecutive trading days; provided, that no shares will vest prior to the first anniversary of the grant date. Any shares that remain unvested as of the fifth anniversary of the grant date will vest in full on such date. The fair value of the stock options granted was estimated at the date of grant using a Monte Carlo simulation model. The range of the fair value of the stock options that were awarded is $2.82 to $2.87 per share. The key assumptions utilized to calculate the grant-date fair values for these awards are summarized below:
Key Assumptions
Grant date share price |  | $ | 4.64 |
Expected term |  | 1.0 - 1.3 years |
Expected volatility |  | 65 | %
Dividend yield |  | — | %
Risk-free rate |  | 2.61 | %
For the three months ended March 31, 2019, details of stock option activity 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, 2018 |  | 112,000 |  |  | $ | 13.98 |  |  | 2.8 years |  | $ | — |
Granted |  | 2,030,000 |  |  | $ | 4.64 |  |  |  |  |
Outstanding as of March 31, 2019 |  | 2,142,000 |  |  | $ | 5.13 |  |  | 9.5 years |  | $ | 2,009 |
Options vested and expected to vest as of March 31, 2019 |  | 2,142,000 |  |  | $ | 5.13 |  |  | 9.5 years |  | $ | 2,009 |
Options exercisable as of March 31, 2019 |  | 112,000 |  |  | $ | 13.98 |  |  | 2.6 years |  | $ | 19 |
The aggregate intrinsic value amounts in the table above represent the difference between the closing price of the Company's common stock on March 29, 2019 of $5.62 and the corresponding exercise prices, 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, 2019:
|  | Number of options |  | Weighted average exercise price per share |  | Weighted average remaining contractual term
Unvested as of December 31, 2018 |  | — |  |  | $ | — |  |  | — |
Granted |  | 2,030,000 |  |  | $ | 4.64 |  |  |
Unvested as of March 31, 2019 |  | 2,030,000 |  |  | $ | 4.64 |  |  | 9.8 years |
For the three months ended March 31, 2019, compensation expense recognized for these stock options of $851 was recorded in sales and marketing and general and administrative expenses in the condensed consolidated statements of operations. For the three months ended March 31, 2018, compensation expense recognized for these stock options of $243 was recorded in discontinued operations in the condensed consolidated statements of operations. As of March 31, 2019, there was $4,925 of unrecognized share-based compensation with respect to outstanding stock options. Restricted stock units, common stock grants and restricted stock For the three months ended March 31, 2019, details of unvested RSU, common stock and restricted stock activity were as follows:
|  | Number of units |  | Weighted average grant-date fair value
Unvested as of December 31, 2018 |  | 3,831,965 |  |  | $ | 7.95 |
Granted |  | 1,725,930 |  |  | $ | 4.78 |
Vested and delivered |  | (755,977 | ) |  | $ | 5.02 |
Withheld as treasury stock (1) |  | (321,631 | ) |  | $ | 5.25 |
Vested not delivered (2) |  | (673,338 | ) |  | $ | 7.25 |
Forfeited |  | (48,791 | ) |  | $ | 3.39 |
Unvested as of March 31, 2019 |  | 3,758,158 |  |  | $ | 7.50 |
(1) | As discussed in Note 9, the increase in treasury stock was due to shares withheld to cover statutory withholding taxes upon the vesting of RSUs. As of March 31, 2019, there were 1,554,829 outstanding shares of treasury stock.
(2) | Vested not delivered represent vested RSUs or common stock grants with delivery deferred to a future time. For the three months ended March 31, 2019, there was a net increase of 673,338 shares included in vested not delivered, as a result of the vesting of RSUs with deferred delivery elections. As of March 31, 2019, there were 3,583,255 outstanding RSUs or shares of common stock grants included in vested not delivered.
For the three months ended March 31, 2019 and 2018, the Company recognized compensation (included in sales and marketing , product development, general and administrative and discontinued operations in the condensed consolidated statements of operations, and intangible assets in the condensed consolidated balance sheets) for RSUs, common stock and restricted stock of $1,439 and $22,701, respectively. The fair value of the RSUs and restricted stock was estimated using the closing prices of the Company's common stock on the dates of grant. As of March 31, 2019, unrecognized share-based compensation expense associated with the granted RSUs and stock options amounted to $18,985, which is expected to be recognized over a weighted average period of 2.5 years. For the three months ended March 31, 2019 and 2018, share-based compensation for the Company's stock option, RSU, common stock and restricted stock awards were allocated to the following accounts in the condensed consolidated financial statements:
|  | Three Months Ended March 31,
(In thousands) |  | 2019 |  | 2018
Sales and marketing |  | $ | 369 |  |  | $ | 666 |
Product development |  | 245 |  |  | 158 |
General and administrative |  | 1,661 |  |  | 415 |
Spin-off transaction costs |  | — |  |  | 5,409 |
Discontinued operations |  | — |  |  | 15,713 |
Total share-based compensation expense |  | 2,275 |  |  | 22,361 |
Capitalized in intangible assets of continuing operations |  | 15 |  |  | 159 |
Capitalized in intangible assets of discontinued operations |  | — |  |  | 181 |
Total share-based compensation |  | $ | 2,290 |  |  | $ | 22,701 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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