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Edited Transcript of FNJN earnings conference call or presentation 8-Aug-19 8:30pm GMT

Q2 2019 Finjan Holdings Inc Earnings Call

BOSTON Sep 13, 2019 (Thomson StreetEvents) -- Edited Transcript of Finjan Holdings Inc earnings conference call or presentation Thursday, August 8, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jevan F. Anderson

Finjan Holdings, Inc. - CFO

* Philip Hartstein

Finjan Holdings, Inc. - President & CEO

* Vanessa Winter

Finjan Holdings, Inc. - Director of IR & Corporate Communications

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Conference Call Participants

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* Michael Roy Crawford

B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst

* Sam Rebotsky

SER Asset Management - Portfolio Manager

* Paul Cameron

Vilasa Holdings - Analyst

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Presentation

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Operator [1]

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Welcome to the Finjan Holdings, Inc. Shareholder Update Conference Call. (Operator Instructions) I would now like to turn the conference over to Vanessa Winter, Investor Relations. Please go ahead.

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Vanessa Winter, Finjan Holdings, Inc. - Director of IR & Corporate Communications [2]

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Hello, everyone, and thank you for joining us this afternoon for our shareholder update conference call. Joining me on today's call are Phil Hartstein, Finjan's President and Chief Executive Officer; and Jevan Anderson, Chief Financial Officer. As a reminder, this call is being webcast, and a replay of this webcast will be available on our website. Turning to our safe harbor. During the course of this call, we may make statements related to our overall business outlook, future financial operating results, outcomes of pending and future litigation, accounting matters and future prospects of our operating subsidiaries. These are forward-looking statements based on certain assumptions and are subject to a number of risks and uncertainties that could cause future results to differ materially from our expectations.

You can learn more about these risks in our most recent filings with the SEC. These documents are available on the Investor Relations page of our website at www.finjan.com. We assume no obligation to update any forward-looking statements. I'd also like to mention that Finjan management will be presenting at the LD Micro Summit in San Francisco on September 3, the 8th Annual Gateway Conference on September 4, also in San Francisco, and the Fall Investor Summit on September 17 in New York City, where we hope we get the opportunity to touch base with many of you in person.

With that, I'd like to turn the call over to Phil, Finjan's President and CEO. Phil?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [3]

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Good afternoon, and thank you for joining our call today. This completes the second month with Jevan on board as our CFO and his first shareholder call, so we're excited to introduce him today to those who have not already met him. He will be providing the financial and operating updates in the second half of the call.

I'm going to start by highlighting key themes of the quarter, which have been significantly adjusted based on some recent events, [2 of them] within the past week even. As standard course, we will move on to update our licensing initiatives and litigation efforts. Finally, I will provide an overview on some growth opportunities that we are rigorously evaluating as we move to position the company for the future and maximize shareholder value.

As a reminder, we are also still engaged in a process with our advisers at Atlas. Turning to our key themes from last quarter's call, you may recall that the variable of time is important, given we don't have complete control nor a perfect prediction in our licenses and litigations. We have been successful and thanks to our challengers, our patents are battle hardened after having survived dozens of invalidity attacks. The Finjan Inc. portfolio is now recognized as having real value. So while we are willing to grant licenses that offer time based discounts, meaning the earlier a prospect takes a license the greater discounted value they will enjoy, this is not to say that we are willing to accept a lower value for our well-established royalty rates. Rather, in these instances, we are simply factoring in the savings that would come from avoiding protracted licensing negotiations or litigation-related expenses.

When looking at our licensing program, the 2 themes of timing and value continue to be interconnected, and our focus on them remains imperative as we work to capture the long-term value in our portfolio for our current licensees and our shareholders.

As addressed on last quarter's call, we were able to resolve and customize a license and settlement with Zscaler. Moreover, we continue to be active in negotiations with numerous prospective licensees. Another recent example of case timing being reset came in our ESET matter, where we learned on July 31, that due to delays caused by ESET's own trial team moving to another law firm, they requested a postponement of the October 29 trial start date. The court on its own accord, removed all pending deadlines and hearing dates and stated that it would issue an amended scheduling order after it ruled on the party's pending summary judgment and other motions. I will go into this in a bit more detail later.

Another theme previously discussed was again amplified this quarter, and that is that we have to continue to defend and protect our IP. Now more than ever, as companies continue to disregard repeated court and patent office rulings that our patents are patentable and enforceable. Defending IP can often resemble a ride on a roller coaster, but at the end of the day, we've enjoyed receiving positive rulings. Take this past quarter for example, during which we had 3 notable wins at the PTAB against Juniper, one in which Juniper failed to establish that claim 1 of the '154 Patent was not patentable and 2 additional where the PTAB flat out denied institution of Juniper's IPR positions on our '633 and '926 patents, stating it would be "an inefficient use of board resources and would result in substantial overlap and duplication of issues, arguments and evidence."

This quarter, we did receive a couple of challenging pieces of news, most notably in our Juniper district court case. And while I may not be able to offer the level of detail desired during this update call, we have confidence and our history as credible licensor of patents, shows we have strategies in place to meaningfully address each of them individually.

The final theme is our renewed focus of our time and energy on what's next for Finjan. While we are not prepared today to announce anything definitive, we believe it is time to offer some high-level perspective on some ways this could play out for shareholders. With the help of Jevan and the rest of the team, we've been spending a considerable amount of time exploring possibilities for growth and expansion with numerous prospects and partners.

As a result, we feel confident there is a pipeline of sufficiently exciting opportunities ahead of us. Finjan has recognized expertise in monetizing patents, it is a core competency of our management team, and we intend to capitalize on that. This growth could take shape in a number of ways, mainly through acquisitions of IP-rich technology businesses, partnerships or joint ventures with larger players on a similar basis and so on.

We have proven that monetizing IP when done right, can be a profitable business model, as we have shown with our own Finjan Inc. portfolio. For any opportunity we consider, we do so through the lens of an experienced leadership team and a knowledgeable and well connected Board and how best to create long-term shareholder value.

Before I turn to our litigation update, I want to reiterate Finjan's commitment to our licensing best practices, where we focused on the merits of our claims while continuing to explore licensing opportunities with all defendants and prospective licensees.

Now I'd like to discuss our Northern District of California case against Juniper, which is before the Honorable Judge Alsup. We've talked a lot about this case, the nontraditional format of the shootouts, the jury's finding of no infringement on the remaining claim element of database during the December 2018 trial. On May 9, 2019, in connection with a second round shootout, the court denied Finjan's motion seeking summary judgment of infringement of claim 1 of our '154 patent and granted Juniper's motion seeking noninfringement of claim 9 of our '780 patent, and further ordered the parties to show cause why summary judgment should not be granted in favor of Juniper in regard to claim 1 of the '154 patent. Additionally, the court set a jury trial for October 21, 2019, on all remaining issues in the case. So far, this is the information that we have already reported on. Here are the recent events, and please keep in mind that the details are still unfolding.

A settlement conference was held before U.S. Magistrate Judge Nathanael Cousins on July 9, 2019. Those discussions continued for approximately 2 weeks. In the midst of reviewing a proposed settlement structure from the magistrate judge, the court issued a finding of noninfringement by Juniper on Finjan's '154 patent. We've talked a lot about this case and believe the issues already decided thus far to be inconsistent with other court findings, both historically and in parallel actions pending before various district courts.

As of this past Friday, Finjan and Juniper filed a Joint Stipulation of Dismissal with Prejudice of all claims and counterclaims not yet decided. On Tuesday, Judge Alsup issued an order that the court review this stipulation to dismiss pending claims, rendering all issues already decided up for appeal. Accordingly, the parties were ordered to file a proposed judgment by August 8. We await the court's entry of final judgment with respect to the '494, the '154 and the '780 patents, which will then be ripe for appeals to the Court of Appeals for the Federal Circuit.

In ESET, following the March 22, 2019, Federal German patent court decision with regard to our '094 European patent, we filed a notice of appeal with the Federal Court of Justice in Germany in April. We followed up with an appeal brief in late July. A date for oral argument is not expected until the conclusion of the parties' briefings.

Regarding the Southern District of California Court action before Judge Bencivengo, which was quickly advancing towards the October trial date, as previously mentioned, the court vacated all pending deadlines and hearing dates until it decides numerous motions for summary judgment and Daubert motions filed by both parties, the latter of which relates to damages.

To give you a sense of the issues before the court, I believe there are somewhere in the order of 30 motions currently pending.

Our district court case against Palo Alto Networks before Judge Hamilton, as most of you are aware, remains stayed, pending final disposition of all IPRs filed by PAN. On July 2, 2019, the federal circuit did affirm in Finjan's favor, the PTAB's finding of patentability of system claims '10, '11 and '15 and the unpatentability of method claims 1, 2 and 6 on the '494 patent. One other case still remains pending. Specifically, the federal circuit had previously vacated the PTAB's ruling considering the validity of the '154 patent and remanded back to the PTAB for consistency with the SAS Supreme Court case to include review of all challenged claims.

You may recall that the SAS case went before the Supreme Court with a question as to whether the PTAB could selectively institute on some claims of the patent or whether any decision to institute a review would require the PTAB to evaluate all challenged claims of a patent. The PTAB issued its final decision on remand maintaining the validity of all challenge claims of the '154 patent, but procedurally can have the option to and did file another appeal to the federal circuit, but we are still waiting for the dust to settle on that matter.

Turning to our case against Cisco, Judge Freeman has entered 2 claim construction orders in response to Cisco's request to have additional claim terms construed by the court, largely adopting Finjan's interpretations of the claims. A hearing on the parties' motions for summary judgment is now scheduled for January 9, 2020, with the trial set to begin on June 1, 2020.

In Bitdefender, Judge Gilliam issued a claim construction order in February, largely adopting Finjan's proposed interpretations, and citing Cisco and other Northern District court claim construction findings. The trial is set to commence on April 6, 2020.

Regarding Trustwave, in April of 2018, we filed a breach of contract case alleging unpaid royalties as a result of its acquisition by Singapore Telecom, also known as Singtel. Unlike our other cases, this matter is before Judge Carpenter in the superior court of the state of Delaware. While discovery is now underway, a schedule has not yet been set, but the court is considering January of 2021 as a proposal for a trial start date.

For SonicWall, with Judge Freeman presiding, a claim construction order entered in March also largely adopted Finjan's interpretations, very much in line with recent favorable claim constructions by other judges presiding over our various other litigations. There is a mediation set for September 18, 2019. The trial is scheduled to begin May 3, 2021. Our Check Point matter is before Judge Orrick and we have a trial start date currently set for January 25, 2021.

For Rapid7, which is filed in the district court of Delaware and before Judge Noreika, a mediation conference was scheduled for August 13, but the court canceled it upon reviewing the party's confidential mediation statements. We believe another mediation conference will be rescheduled at the appropriate time.

Judge Noreika has scheduled 2 dates of claim construction hearings, the first hearing on December 20, 2019, and the second hearing on January 15, 2020. Trial is set to commence on February 22, 2021.

And Fortinet before Judge Donato, a case calendar has not yet been set. Lastly, the Qualys case, which is before Judge Gonzalez-Rogers has a claim construction hearing scheduled for May 1, 2020. While case time lines are often out of our control, sometimes surprisingly so, our optimism in the ultimate outcomes for these cases has not changed. What is more, we view the shift in timing of the ESET and Juniper trial dates as opportunities to reduce short-term expenses and turn our efforts toward revenue-generating activities. As always, we are open to and engaged in settlement discussions with a number of defendants and prospective licensees, both as part of our licensing best practices and increasingly imposed by court orders in several of our cases.

Now I'd like to give a brief update on our Finjan Blue subsidiary. Now that we are well-versed in the technology of this portfolio, we are engaged actively in licensing negotiations with a few initial prospective licensees. As you know, these conversations can span anywhere from 3 to 8 quarters on average, and we will provide further updates as they become available. As a reminder, alongside our own internal growth initiatives, Finjan still remains engaged with Atlas Technology Group in exploring strategic options for our business. As of now, Finjan has not consummated the transaction. If things change and Finjan were to enter into a transaction then we would announce that promptly.

With that, I'd like to turn the call over to Jevan Anderson.

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Jevan F. Anderson, Finjan Holdings, Inc. - CFO [4]

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Thank you, Phil. I want to start off by saying how excited I am for my new role at Finjan. A key factor for my decision to join the company was the opportunity to be part of a Tier 1 management team and board as we optimize the business and continue to build the platform that will drive shareholder value now and into the future.

A little background on me for those who I have not met yet. I've spent the past 25 years in investment banking, corporate development and strategic consulting. I look forward to leveraging my collective business experience and professional network to assist Finjan in evaluating and executing on the opportunities in front of us.

I'll start today with a brief overview of our financials, followed by an update of our other businesses. Please note that all comparisons are on a year-over-year basis unless stated otherwise. Revenues for fiscal second quarter of 2019 ending June 30 were $7.2 million compared to $17.3 million for the same period in 2018. Net loss for the quarter was just under $2 million or a loss of $0.07 per share compared to a net income of $7 million or $0.24 per share for the same period last year.

Turning to expenses. SG&A for the second quarter of 2019 was $8.6 million, an increase of $2.7 million from $5.9 million a year ago. The increase in expenses is attributed to our ongoing litigation matters. Now that the ESET trial has been removed from the calendar and the stipulated dismissal by Finjan and Juniper, we are expecting our litigation costs to be substantially lower-than-forecasted for the remainder of 2019. We continue to successfully manage our cash position, ending the quarter with approximately $42.6 million in cash compared to $43.3 million at the end of fiscal 2018. Our cash balance for the previous 6 quarters has been stable, and we expect that to continue through the balance of the year.

In the second quarter, our cash was improved from the license of Zscaler and a tax refund from the 2018 prepayment to the IRS of $4 million. Please note that $15.7 million of the cash is in short-term investments. Further details can be found in Note 2 of our 10-Q.

Now I'd like to turn to Finjan Mobile and our mobile browser VPN offering, InvinciBull. We're seeing positive results from our consumer awareness campaign, and have surpassed 1.5 million downloads. Further, we are seeing an increase in paid subscribers due to improved user engagement within their app and e-mail marketing program to encourage conversions, additional promotions, the overall enhanced user experience. We continue to innovate and grow our patent portfolio to protect our investments and inventions.

With respect to our $5 million commitment to Jerusalem Venture Partners or JVP, we have an outstanding balance of approximately $1.3 million. [One] currently has 11 portfolio companies who have received investment financing through the fund, along with 2 exits. While not a liquid investment, current fair market value of our JVP investment is measurably higher than our cost basis.

In closing, I hope to have the opportunity to touch base with many of you over the coming months, and I appreciate your time and patience, as I get up to speed on the business.

I would like to turn the call over to Vanessa to help coordinate the Q&A.

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Vanessa Winter, Finjan Holdings, Inc. - Director of IR & Corporate Communications [5]

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Thank you, Jevan. Operator, can we poll for our first question, please?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Mike Crawford with B. Riley.

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Michael Roy Crawford, B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst [2]

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Jevan, just to clarify what you said at the end, you talked about the JVP portfolio being -- having a fair market value, measurably higher than the $4 million you're showing now after the $500,000 commitment you just put in, in the most recent period. But what is the fair market value of that investment?

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Jevan F. Anderson, Finjan Holdings, Inc. - CFO [3]

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Well, we've never publicly disclosed that. I would say, we look at what we've returned already about $800,000 of cash. We rolled forward some additional equity into that business, it's not a liquid position, so it's somewhat irrelevant. But I would say that it's nicely above our cost basis. And as of right now, yes, I think even without putting in any additional capital, we would at least return what we've invested to date and then some. I mean, I don't want to put an exact figure on it though because -- you never know with these venture portfolios and how these are marked-to-market.

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Michael Roy Crawford, B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst [4]

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Okay. And then Phil just -- you talk about it in the press release and then, again, on this call, but can you just go through, again, on the strategic alternatives process, why it seems to be that Finjan is really looking at finding new things to invest in and/or manage or help to monetize as opposed to just doing the job of monetizing what you have and simply returning all the wonderful cash you could create from that to shareholders and then moving on and doing the next thing.

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [5]

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Okay. Several questions in there. I think the first comment, the first response I would give you is that, yes, we're still focused on the assets that we have, no question. Our measure of success to that and on behalf of shareholders, is I would say, the long-term value of that portfolio. So sometimes we get questions, for example, of lots of expense and unpredictable revenues, but the long-term value of that portfolio, even if you were to just take, say, for example, as a measure of that, just the litigations that we have pending. But we are focused on that.

The reality is that there's lots of -- certainly lots of distractions in being a public company as it relates to this business. But one of the things that we think we've learned about this business is how to manage those expenses. The costs, the risks, some impact on the time as it relates to those things. And what we have now, even though we have a small team, we believe we have a unique understanding of how to navigate the challenges around intellectual property. And so if you were to go back 3 or 4 years, I would tell you that it was not uncommon to have people calling us, asking us to help them. And for several years, we didn't spend any time or effort looking at those opportunities. I think Finjan Blue represents one such of those opportunities that we did pursue. But frankly, I think what we're trying to communicate is that we see an opportunity to utilize excess capacity within the organization, while we stay focused on our initial programs in the Finjan Inc. portfolio and all of that really with an eye towards long-term shareholder value.

And of course, that also means managing costs along the way which we work diligently at as well.

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Michael Roy Crawford, B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst [6]

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And then just last question. Can you comment on how that squares with some recent, I believe, even Supreme Court decisions relating to IP that might make it more difficult for companies to give their IP to an NPE?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [7]

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Yes. So there was a decision, right. It was circulated around here. I'm actually not sure if it was Supreme Court, it may have been federal circuit, I just don't recall whether it was one or the other. But for the benefit of everyone on the call here, sometimes what happens when you run into a large company, take Xerox or any other substantial business with diversified operations, sometimes a smaller division of a larger business will say, hey, let's do this IP deal. And as you get into the structuring of that deal, the large company sort of reigns strong in that negotiation, and will want to have reserved rights. For example, what if I need to take someone off of your licensing list? I need the ability to do that. What if I want to grant a license to patents that you have because I need to do that to advance my business. So it's this concept of reserved rights. Those reserved rights exist, I would suggest, in a lot of IP-related contracts. So it's really a smart question, Mike.

Really, what I think you'll see in response to that is that just companies that are evaluating opportunities to partner with large players, frankly, even the smaller deals as well, are just going to be much more clear about who owns what rights and basically working diligently to remove reserved rights from those contracts. We don't believe that it affects us here in any of our operations, given how we've structured our arrangements. But it is a question that I think if you asked on earnings calls for any of the other IP companies, I think it's a reasonable question to -- and I would expect that some companies will tell you that they have to evaluate that before they can give you an answer. But we don't expect any issues as a result of that decision here.

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Operator [8]

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The next question comes from Sam Rebotsky with SER Asset Management.

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Sam Rebotsky, SER Asset Management - Portfolio Manager [9]

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Talking about the Juniper and the various other litigations, did -- not being a lawyer, initially, the case was, basically, they were ruling in favor of Juniper, and this latest regard, would you say it's, in other words, it's not ruling against anybody? Is there -- how do you look at the -- I'm trying to look at all your litigation, what you've said, whether one is against one or one is against the other or one is just nothing so far against or for.

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [10]

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Okay. Well, first, I share with you your frustration about the legal terms. I'm not a lawyer either, so I appreciate that. Let me see if I can recast some of the statements that were made in my script about Juniper. First, there are -- if you were to think about the case as a bunch of pieces, half of those pieces have already been decided by the court. Whether that's through a trial or just -- and the court making a determination as a matter of law. Our view at this point is that the primary value of the case that we brought against Juniper, lies within issues that have already been resolved by the court. Now we don't agree with how those have been resolved. We've made several efforts to try and take those issues and reserve those issues to the federal circuit, unsuccessfully. So now what we are doing is basically dropping or agreeing to drop the remaining claims, which will then put the court in a position to allow us to take these issues and go to the federal circuit to seek an appeal on them.

I guess, I would make 2 other statements. The first statement is this is not inconsistent with Finjan's operating history. There have been times in our past, if you were to go back and look at the Symantec case, if you were to look at, I think, Websense and Sophos as well, or even just in Blue Coat, you would note that over the last 6.5 years or so, Finjan has actually in some instances, had to file multiple lawsuits, pursue in different forums. The end result being that we do end up getting the license fees that are expected and on a fair value basis. So we believe that, that is the path that we're on. In other words, we're not walking away from any of our claims. In fact, I would argue that in the case with Juniper, it's likely that this will actually promote additional settlement discussions between now and even throughout the appeal process. So we kind of looked at it that way. This is just part of the process. And one of the things that we say around here is that, in times like this, Jevan and I will sit down, and with the finance team, and we'll look at ways to reduce the cost around these litigations. And we just refocus our attention on other revenue-generating opportunities for the company during those periods.

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Sam Rebotsky, SER Asset Management - Portfolio Manager [11]

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Okay. That's better. I can understand that better and to the extent that a case is awarded against you, that it's appealable dependent on your judgment. So let me just go to Symantec. The Symantec sale to Broadcom, which was just announced, $10.7 billion, does this company that sold -- is this the company that Finjan has the agreement with to get $45 million, if there were more acquisitions? Is this the company that's now -- will be owned by Broadcom? Or is it the agreement with what is left at Symantec?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [12]

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It's a good question, and again, not being a lawyer and not having concluded the legal analysis, this is all relatively new, I don't have a conclusive answer for you, but let me give you some pieces of information that might help you in understanding how this might work. When this deal was proposed, I believe, 4, 5 weeks ago, maybe 6 weeks ago where Broadcom was going to make an acquisition of the entirety of Symantec, the question is, how would that trigger any of those pricing protections that we have contractually obligated in our agreement. The answer in that scenario is, while Symantec would still stay Symantec, it would just have a new parent owner. So the license as it was struck with Symantec would carry and continue with Symantec. And the judgment based on whether the pricing protections would trigger would be based on what Symantec did. Now would they be in a better position with Broadcom money to make acquisitions, sure. But would there be an immediate payment based on a change in parental ownership? Not likely.

The deal, as you've proposed today, at least as I understand it, and I haven't looked at it since this morning. So I actually didn't know that it was concluded until just now, was that Broadcom had revised its bid to consider buying a portion of Symantec. If my understanding is correct, then that portion of that acquisition would have been really about the enterprise security business. So where I don't have a conclusion for you is whether or not that the enterprise security business comprises entirely Blue Coat or Blue Coat properties or whether it's in some parts Symantec properties. So I just don't know. It is likely, though, that as an initial construct that all of the pre-existing products that existed under those licenses would likely continue to be licensed. There is a term that we looked at in there, which really revolves around the change of control as to whether or not that would be an indicator to reevaluate the license. But again, just given the newness of this deal, I don't have an answer for you. And it will probably be some time before I would, partly because the deal would have to close first, in any respect, whether it's a deal with Broadcom or even a much smaller deal, but it will clearly take us some time to work through the analysis, so stay tuned for future calls.

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Sam Rebotsky, SER Asset Management - Portfolio Manager [13]

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Yes, this is very fair. And I guess, as you look through the transaction, and as this transaction takes place, this may increase the value of your patents and maybe somebody and your Atlas might work a little harder in finding some greater valuation or spur somebody to talk to Finjan, what to do with all your patents and litigation with the new Symantec, with Broadcom. Hopefully, this opens an opportunity for everybody. Okay. Good luck.

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [14]

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It certainly shines -- thank you, and I would say -- I would agree, it certainly shines a spotlight back on the cybersecurity sector, for sure.

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Operator [15]

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(Operator Instructions) Our next question comes from [Paul Cameron] with [Vilasa Holdings.

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Paul Cameron, Vilasa Holdings - Analyst [16]

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Just a quick question. (inaudible) contacted me recently that (technical difficulty) June 24 Bloomberg ran a story underneath your ticker about the adjustment on the Juniper case, I was just wondering (technical difficulty).

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [17]

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So I had a little bit of trouble understanding the question. I think there was some interference in the phone line. But is your question about how Finjan decides, what news is appropriate and at what time frame it's appropriate to release that news, is that what you're asking?

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Paul Cameron, Vilasa Holdings - Analyst [18]

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Yes. But (technical difficulty) if you don't know the background to the case, it's quite damaging, it sounds quite damaging and it might prejudice other cases that you have ongoing.

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [19]

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That's true. Let me make a couple of statements. So Finjan has made a commitment since the beginning to report good and bad news. We don't discriminate and just report good news, we don't try and stay away from reporting bad news. And I think, in fact, if you read some of the transcript today, you'll see that the transparency of which we disclosed, Juniper and ESET, literally as those cases are unfolding that we always offer for transparency. I actually have our General Counsel in the room, actually nodding his head at me because he keeps us clean on that. But I will tell you that we typically report some publicly available information, right. So in almost every instance, I, Phil Hartstein, CEO of Finjan, may actually know about a decision sometimes as much as a week, maybe 2 weeks. And certainly, if it's under a protective order, I might know as much as 5 or 6 weeks before I can even communicate it to the public. There sometimes is a gap out there in that information. And for years, this has led to an arbitrage play in the market, less so now, more so 5 or 6 years ago.

There are situations where in an open courtroom, a reporter or a market analyst can sit in on a hearing, can hear what the judge is saying, can be a part to all the arguments and what may otherwise only be available as a summary order, having that background is sometimes available to parties other than those involved in the litigation. So Bloomberg, for example, is one such organization. Sometimes you see this from Law360 as well. We've had others that have reported on it. Bloomberg actually runs a paywall website, and they actually sell a lot of their analysis on a case as it's progressing to try and do just that, to provide information in advance of it becoming public. What you may be seeing is that they're putting teasers out there about how they've reached a conclusion or have information that isn't publicly available yet. And as you try and move through that, some of it is behind the paywall, some of it isn't but those are generally efforts to try and entice people to come into their domain and to pay for their research.

So again, I would just tell you, our policy here is that we do report information as it comes in and as it's material, but you will see instances where it'll look like someone's a little bit ahead of the curve or maybe has information a few days or maybe a week in advance of others. There's just nothing that I can do to control that situation.

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Paul Cameron, Vilasa Holdings - Analyst [20]

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In that case, it sounds like the (technical difficulty)

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [21]

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On the release on the 23rd, I mean, no, the stipulation, there was -- you're talking about in the Juniper case?

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Paul Cameron, Vilasa Holdings - Analyst [22]

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Yes.

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [23]

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I thought the release was much closer towards the end of the month. I actually think that it didn't happen until last Friday. So I think somebody would have -- might have been incorrect in their reporting. And again, we see that, too. I mean, sometimes, I joke that the reports are so wildly off base that I can't believe anybody would believe it, recognizing, of course, that if you do read it you might be misled. Sometimes, though they actually get pretty good and maybe they just missed some of the little details, but those dates do not seem appropriate to me, that case -- that did -- none of that stuff in the Juniper case happened until July 23rd, right?

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Unidentified Company Representative [24]

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July 23rd.

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [25]

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So yes, I mean, the gap here, there really is no gap from when we knew, and from the disclosures we've been able to make. So for example, I think that it was made public in Docket Navigator on Monday or Tuesday of this week that the stipulation was granted, and the court gave us until the 8th which is today to file the actual order for them to submit. So I'm giving the actual facts, but again, I don't follow everything that's recorded in advance of our communication of the facts.

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Paul Cameron, Vilasa Holdings - Analyst [26]

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(inaudible) see if that corresponds to what you think is the [public] information?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [27]

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Are you asking -- I don't have access to that right now, I can't do that on the fly, are you asking me to, I mean, if you reach out to Vanessa afterwards, I'd be happy to work through that with you. I just -- I don't have a laptop in front of me.

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Operator [28]

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This concludes the question-and-answer session. I would like to turn the conference back over to Vanessa Winter for any closing remarks.

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Vanessa Winter, Finjan Holdings, Inc. - Director of IR & Corporate Communications [29]

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I just want to thank everyone for joining us this afternoon. We look forward to seeing you at upcoming events and hope you have a rest -- nice rest of your day.

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Operator [30]

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This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.