10.

Share-based compensation

As of

September 30, 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

21,178,330

shares of common stock. As of

September 30, 2019

, there were

3,614,784

shares of common stock reserved for issuance under the

2018

Plan. The primary purpose of the plans is to attract, retain, reward and motivate certain individuals by providing them with opportunities to acquire or increase their ownership interests in the Company.

Spin-off of Red Violet

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,

resulting 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

Discontinued operations

Stock options

January 31, 2019,

the Compensation Committee of the Company's Board of Directors approved the grant of stock options to certain Company officers, which were issued on

February 1, 2019

under the

2018

Plan. 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 exercise price for

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 exercise price for

consecutive trading days; provided, that

shares will vest prior to the

first

anniversary of the grant date. As of

September 30, 2019

, the

first

condition has been met; therefore, subject to continuing service,

50%

of the shares subject to these stock options will vest on

February 1, 2020.

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 trading day before the date of grant using a Monte Carlo simulation model. The range of the fair value of the stock options that were awarded is

$2.81

$2.86

per share. The key assumptions utilized to calculate the grant-date fair values for these awards are summarized below:

Key Assumptions
Exercise price	$	4.72
Expected term (in years)		1.0 - 1.3
Expected volatility		65	%
Dividend yield		—	%
Risk-free rate		2.61	%

For the

nine

months ended

September 30, 2019

, details of stock option activity were as follows:

	Number of options			Weighted average exercise price per share		Weighted average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding as of December 31, 2018		112,000		$	13.98		2.8	$	—
Granted		2,064,000		$	4.72		9.3
Forfeited		(56,000	)	$	4.72
Outstanding as of September 30, 2019		2,120,000		$	5.21		9.0	$	—
Options exercisable as of September 30, 2019		112,000		$	13.98		2.1	$	—

The aggregate intrinsic value amounts in the table above represent the difference between the closing price of the Company's common stock at the end of the reporting period and the corresponding exercise prices, multiplied by the number of in-the-money stock options as of the same date.

For the

three

and

nine

months ended

September 30, 2019

, compensation expense recognized for stock options of

$1,250

and

$3,353

, respectively, was recorded in sales and marketing and general and administrative expenses in the consolidated statements of operations. For the

three

and

nine

months ended

September 30, 2018

, compensation expense recognized for stock options of

and

$243

, respectively, was recorded in discontinued operations in the consolidated statements of operations. As of

September 30, 2019

, there was

$2,339

of unrecognized share-based compensation with respect to outstanding stock options.

Restricted stock units and restricted stock

For the

nine

months ended

September 30, 2019

, details of unvested RSU 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		2,119,628		$	4.93
Vested and delivered		(1,490,913	)	$	4.00
Withheld as treasury stock (1)		(557,988	)	$	4.16
Vested not delivered (2)		112,582		$	4.75
Forfeited		(221,047	)	$	3.59
Unvested as of September 30, 2019		3,794,227		$	7.66

(

)

As discussed in Note

, the increase in treasury stock was due to shares withheld to cover statutory withholding taxes upon the delivery of shares following vesting of RSUs and issuance of restricted stock. As of

September 30, 2019

, there were

1,791,186

outstanding shares of treasury stock.

(

)

Vested

not

delivered represents vested RSUs with delivery deferred to a future time. For the

nine

months ended

September 30, 2019

, there was a net decrease of

112,582

shares included in vested

not

delivered as a result of the delivery of Spin-off Grants of

740,334

shares, partially offset by the net activity from vesting of RSUs with deferred delivery of

627,752

shares. As of

September 30, 2019

, there were

2,797,335

outstanding RSUs included in vested

not

delivered.

The Company recognized compensation (included in sales and marketing, product development, general and administrative and discontinued operations in the consolidated statements of operations, and intangible assets in the consolidated balance sheets) for RSUs and restricted stock of

$1,562

and

$2,675

for the

three

months ended and

$4,733

and

$27,871

for the

nine

months ended

September 30, 2019

and

2018

, 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

September 30, 2019

, unrecognized share-based compensation expense associated with the granted RSUs and stock options amounted to

$14,668

, which is expected to be recognized over a weighted average period of

2.5

years.

For the

three

and

nine

months ended

September 30, 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 consolidated financial statements:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Sales and marketing	$	292	$	717	$	821	$	2,125
Product development		278		136		800		487
General and administrative		2,220		1,741		6,398		3,835
Spin-off transaction costs		—		—		—		5,409
Discontinued operations		—		—		—		15,713
Total share-based compensation expense		2,790		2,594		8,019		27,569
Capitalized in intangible assets of continuing operations		22		81		67		364
Capitalized in intangible assets of discontinued operations		—		—		—		181
Total share-based compensation	$	2,812	$	2,675	$	8,086	$	28,114