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Note 13 - Share-based Compensation | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Share-based Payment Arrangement [Text Block] | 13. Share-based compensation As of December 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 21,087,368 shares of common stock. As of December 31, 2019 , there were 3,623,502 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 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, 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 5, Discontinued operations . Stock options On 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 from the shares available for issuance 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 twenty 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 twenty consecutive trading days; provided, that no shares will vest prior to the first anniversary of the grant date. As of December 31, 2019 , the first condition had 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 to $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 years ended December 31, 2019 and 2018 , the activity related to stock options consisted of the following:
|  | Number of options |  |  | Weighted average exercise price per share |  |  | Weighted average remaining contractual term (years) |  |  | Aggregate intrinsic value |
Outstanding as of December 31, 2017 |  |  | 222,000 |  |  | $ | 12.59 |  |  |  | 5.4 |  |  |  | — |
Expired |  |  | (110,000 | ) |  |  | 11.17 |  |  |  |  |  |  |  |  |
Outstanding as of December 31, 2018 |  |  | 112,000 |  |  |  | 13.98 |  |  |  | 2.8 |  |  |  | — |
Granted |  |  | 2,064,000 |  |  |  | 4.72 |  |  |  | 9.1 |  |  |  |  |
Forfeited |  |  | (56,000 | ) |  |  | 4.72 |  |  |  |  |  |  |  |  |
Outstanding as of December 31, 2019 |  |  | 2,120,000 |  |  |  | 5.21 |  |  |  | 8.7 |  |  |  | — |
Options exercisable as of December 31, 2019 |  |  | 112,000 |  |  | $ | 13.98 |  |  |  | 1.8 |  |  |  | — |
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 year ended December 31, 2019, compensation expense recognized for stock options of $4,611 was recognized in sales and marketing, product development and general and administrative expenses in the consolidated statement of operations. For the year ended December 31, 2018, compensation expense recognized for stock options of $243 was recognized in discontinued operations in the consolidated statements of operations. As of December 31, 2019 , there was $1,082 of unrecognized share-based compensation with respect to outstanding stock options. Restricted stock units and restricted stock For the years ended December 31, 2019 and 2018 , details of unvested restricted stock units ("RSUs") and restricted stock activity were as follows:
|  |  |  |  |  | Weighted average |
|  | Number of units |  |  | grant date fair value |
Unvested as of December 31, 2017 |  |  | 8,150,905 |  |  | $ | 9.27 |
Granted (1) |  |  | 4,598,125 |  |  |  | 2.63 |
Vested and delivered |  |  | (11,468,333 | ) |  |  | 7.63 |
Withheld as treasury stock (2) |  |  | (875,675 | ) |  |  | 6.05 |
Vested not delivered (3) |  |  | 3,766,068 |  |  |  | 9.85 |
Forfeited |  |  | (339,125 | ) |  |  | 4.68 |
Unvested as of December 31, 2018 |  |  | 3,831,965 |  |  |  | 7.95 |
Granted |  |  | 2,275,094 |  |  |  | 4.82 |
Vested and delivered |  |  | (1,549,050 | ) |  |  | 3.97 |
Withheld as treasury stock (2) |  |  | (567,447 | ) |  |  | 4.13 |
Vested not delivered (3) |  |  | 122,582 |  |  |  | 4.76 |
Forfeited |  |  | (718,774 | ) |  |  | 4.13 |
Unvested as of December 31, 2019 |  |  | 3,394,370 |  |  | $ | 8.03 |
( 1 ) | As discussed in "Spin-off of Red Violet" above, included in the RSUs granted during the year ended December 31, 2018 were an aggregate of 304,000 shares of Spin-off Grants that vested and were delivered in the first quarter of 2018, and an aggregate of 2,041,000 shares of Transaction Grants that vested but were subject to deferred delivery over a three -year period.
( 2 ) | As discussed in Note 12, Common stock, treasury stock and warrants , the increase in treasury stock was primarily attributable to shares withheld to cover statutory withholding taxes upon the vesting of RSUs. As of December 31, 2019 and 2018 , there were 2,768,399 and 1,233,198 outstanding shares of treasury stock, respectively.
( 3 ) | Vested not delivered represents vested RSUs with delivery deferred to a future time. During the year ended December 31, 2019 , there was a net decrease of 122,582 shares included in vested not delivered balance as a result of the delivery of 740,334 shares of Transaction Grants, partially offset by the vesting of 617,752 shares with deferred delivery election. During the year ended December 31, 2018, there was a net decrease of 3,766,068 shares included in vested not delivere d balance, as a result of the delivery of 5,807,068 RSUs, partially offset by the vesting of the 2,041,000 shares of Transaction Grants subject to deferred delivery. As of December 31, 2019 and 2018 , there were 2,787,335 and 2,909,917 outstanding RSUs included in vested not delivered, respectively.
For the years ended December 31, 2019 and 2018 , 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 R SUs and restricted stock of $5,819 and $15,104, respectively. As of December 31, 2019 , there was $9,583 of unrecognized share-based compensation with respect to outstanding RSUs and restricted stock. 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 December 31, 2019 , unrecognized share-based compensation expense associated with the granted RSUs, restricted stock and stock options is $10,665 , which is expected to be recognized over a weighted average period of 2.6 years. For the years ended December 31, 2019 and 2018 , share-based compensation for the Company’s equity awards were allocated to the following lines in the consolidated financial statements:
|  | Year Ended December 31, |
(In thousands) |  | 2019 |  |  | 2018 |
Sales and marketing |  | $ | 971 |  |  | $ | 2,856 |
Product development |  |  | 889 |  |  |  | 676 |
General and administrative |  |  | 8,481 |  |  |  | 5,740 |
Spin-off transaction costs |  |  | — |  |  |  | 5,409 |
Discontinued operations |  |  | — |  |  |  | 15,712 |
|  |  | 10,341 |  |  |  | 30,393 |
Capitalized in intangible assets of continuing operations |  |  | 89 |  |  |  | 423 |
Capitalized in intangible assets of discontinued operations |  |  | — |  |  |  | 181 |
Total |  | $ | 10,430 |  |  | $ | 30,997 |

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