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Edited Transcript of FNJN earnings conference call or presentation 4-Mar-20 9:30pm GMT

Q4 2019 Finjan Holdings Inc Earnings Call

BOSTON Apr 1, 2020 (Thomson StreetEvents) -- Edited Transcript of Finjan Holdings Inc earnings conference call or presentation Wednesday, March 4, 2020 at 9:30:00pm 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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* Brett Reiss

Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor

* 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

* Glenn Neff

- Private Investor

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Presentation

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Operator [1]

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Thank you for standing by. This is the conference operator. Welcome to the Finjan Holdings Inc. Shareholder Update Conference Call. (Operator Instructions) And the conference is being recorded. (Operator Instructions) I would now like to turn the conference over to Vanessa Winter, the Director of 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 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 the 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 for operating subsidiaries. These are forward-looking statements based on certain assumptions that 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.

With that, I'd like to turn the call over to Phil Hartstein, 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 us. Before I go into today's remarks, I would like to thank all of our shareholders for their loyalty and patience while we navigated through our strategic options process.

As you most likely read in our press release today, this process is now formally concluded. While we didn't consummate a transaction, we are confident in our path forward as an independent entity. I'm sure there will be a number of questions in the Q&A, and we will do our best to address them as directly and as openly as we can.

Turning to the broader agenda for today's call, I will start with an update on the fourth quarter, review our licensing and litigation programs, including some detail on our upcoming trials as well as status of other cases in the pipeline. I will then turn the call over to Jevan, who will review the key financial highlights of the quarter and offer a brief update on our operating subsidiaries before we turn the call over for questions.

First, an update on our business in the fourth quarter. As I mentioned on the last call, we have been and continue to monitor our investments to ensure they align with the current and future direction of the business. That being said, on December 31, we completed the sale of our limited partnership interest in JVP Fund VII by our strategic partners, which Jevan will discuss in more detail shortly. While we did not execute any licenses in the quarter, we did recently settle our Bitdefender litigation, negotiations for which straddled the close of 2019 and the start of 2020 and serves a number of purposes.

One, as I've mentioned in the past, going to trial is a last resort and arriving at a fair value for a license given the expense on predictability and elongated time lines. We continue to believe that settlement for fair value as a metric should be our focus. Historically, we have been successful in settling approximately half of our cases before trial.

Two, settling Bitdefender allows us to focus our energy and resources on the 2 larger cases against ESET and Cisco as having 3 nearly overlapping trials is never ideal from a logistics standpoint. And three, lastly, working to settle these cases aligns with our licensing best practices in which we make every effort to communicate and work through the issues outside the court, so we are not utilizing the court's valuable resources unnecessarily.

Sticking with licensing for the moment. Our current active pipeline stands at roughly 20 prospective licensees, and that number does include our litigation. Please keep in mind that we continue to evaluate new claims against unlicensed companies for both our Finjan Inc. and Finjan Blue portfolios.

As I mentioned last quarter, our Finjan Blue subsidiary has primarily served as incremental value to many of our Finjan Inc. licenses, but we are now entering into independent valuation discussions with the Blue patents as the underlying portfolio. As a reminder, these discussions can range anywhere from 9 to 18 months on the speedy side, so we will continue to offer updates on these as appropriate.

And now for a more detailed discussion on our litigation business. We are focused on working towards our upcoming catalyst cycle, which, as we sit here today, includes 2 trials calendared for the first half of 2020, ESET and Cisco; 2 trials for the first half of 2021, Rapid7 and SonicWall; and the expectation of another 3 trials in 2022, those are Qualys, Palo Alto Networks and Fortinet. This crowded litigation calendar represents years of work, both in researching and understanding how these defendants infringe, our technologies and defending our patents against a number of administrative challenges, notable costs, navigating the politics of the patent landscape and shifting court calendars which can lead to longer time line.

During this period, there is no question that Finjan has successfully defended its patent, licensed some of the largest players in the cybersecurity industry and continued to move unlicensed players into the litigation pipeline, all in an effort to protect our patented contributions in the sector. Given this, we remain confident as we approach this long-awaited catalyst cycle and stick to the merits of our cases to ultimately work to drive value for our shareholders.

Turning first to ESET in the Southern District of California Court in San Diego before Judge Bencivengo. Parties participated in a mandatory settlement conference that was held on February 10 that did not result in a resolution. I can share that CEOs of both companies participated in person. Our pretrial hearing took place on February 21, and the pretrial order was entered on February 25. The trial is set to begin next week on Monday, March 9 and is scheduled to run for 3 weeks.

As a reminder, we still have pending actions against ESET in Germany. For some of you that watch our litigation calendar closely, you may have noticed that I didn't mention Check Point in my update. That is due to the fact that this trial is no longer on calendar for 2021. During 2019, Check Point made a series of challenges to Finjan's original and amended infringement contentions that resulted in Judge Orrick's recent order issued in January of 2020, which struck a number of Finjan's infringement contentions.

Basically, that's the early stage where you lay out Finjan's patent claims versus accused Check Point product. Judge Orrick also took all dates off calendar and designated a special master, Judge Elizabeth Laporte, to resolve the issues on all remaining challenged contention. While the order from the court did not represent well for Finjan, we are not yet prepared to offer any insight until we fully review with counsel and gain a greater understanding of how the matter stands.

Our case against Cisco before Judge Freeman in the Northern District of California, the Daubert motion hearing is scheduled for March 26, a pretrial conference with a hearing on motions scheduled for April 30, and the trial remains set for June 1, 2020. As with our prior trial against Blue Coat in Judge Freeman's court, I would expect this case would run between 2 and 3 weeks with a strict time limit imposed on both sides.

In our case against Juniper, which was previously pending in the Northern District of California before Judge Alsup, parties filed a joint stipulation of dismissal with prejudice on August 2, 2019, allowing the court to enter a judgment in the case, and clearing the way for Finjan to seek appeal. We engaged Fish & Richardson on the appeal and on September 9, Finjan filed a notice of appeal to the Court of Appeals for the Federal Circuit, and our opening brief was filed on December 18. Juniper's response brief is due on March 27. And Finjan will have a chance to respond by April 17. We are awaiting a date for the oral argument, but as we sit here today, we expect an appeal decision some time in 2021.

The Rapid7, which is filed in the District Court of Delaware and is before Judge Noreika, 2 claim construction hearings were held in January 2020 and resulted in an order on February 5, which was largely favorable to Finjan. The deadline for dispositive and Daubert motion is August 7, 2020, and a pretrial conference is scheduled for February 8, 2021. The trial remains scheduled for February 22, 2021.

Our Northern District of California case against SonicWall with Judge Freeman presiding, claim construction rulings largely adopted Finjan's interpretations and other favorable interpretations by other Northern District Courts. The final pretrial conference is scheduled for March 18, 2021, with a jury trial to commence on May 3, 2021.

Regarding Trustwave, in April of 2018, we filed a brief contract case, alleging unpaid royalties as a result of its acquisition by Singapore Telecom, also known as Singtel. This matter is before Judge Carpenter in the Superior Court of the state of Delaware. Discovery is ongoing. In our Northern District of California Qualys case, which is before Judge Gonzalez Rogers, there's a claim construction hearing scheduled for May 1, 2020. Qualys has requested a stay and Finjan has opposed, court has not yet ruled on the stay and no trial has been set.

Palo Alto Networks is before Judge Hamilton in the Northern District of California. The case remains stayed, pending disposition of the final IPR filed by Palo Alto Networks on Finjan's '154 Patent. While the PTAB issued its final decision on remand, maintaining the validity of all challenge claims, Palo Alto Networks filed another appeal to the federal circuit, so we remain on hold in this case. In Fortinet before Judge Donato in the Northern District of California, parties filed a joint statement at the end of February 2019, identifying the patents and claims that are at issue in the case. We filed another update in September 2019 and Fortinet responded. The case remains stayed, pending a further order from the court.

While we have a few cases that are stayed, we remain confident in our litigation time line with 2 cases in 2020 and another 2 definitively scheduled in 2021. We believe the remaining will be scheduled over the next year or 2, leaving us with a healthy pipeline of cases and in line with our licensing best practices opportunities for settlement.

Last quarter, we reviewed extensively the expenses related to our litigation program, both due to the fact that we are carrying a docket of 10 cases, double what our load was just a few years back, and the other fact that the current docket has some of the largest unlicensed market players using our patent.

Accordingly, we have positioned Finjan with a limited fixed overhead and a relatively flexible consultant model that we can scale up or down depending on what is happening in the business. You should be aware that we are continuously monitoring the expenses for each matter to ensure the ROI by pursuing litigation that makes sense for Finjan and our shareholders. Jevan will offer more detail on our expense analysis and reduction efforts in a few moments.

Before I close and hand it over to Jevan, I want to both acknowledge and thank our shareholders for being patient throughout our strategic options process. I know many of you have followed Finjan over the last several years and you know that management prides itself on being open and transparent with our shareholders. During this process, we were limited in what we could announce, say publicly or even how we could engage with direct questions. Given that we are in trial beginning next week, we will largely be focused on the issues at hand, but we look forward to offering updates as appropriate. And we, again, thank you for all standing by as we execute to deliver shareholder value.

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

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

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Thank you, Phil. I'll start today with a brief overview of our financials, offer some details on our overall expense monitoring and cost reduction efforts and then provide an update on our other businesses. Please note that all comparisons are on a year-over-year basis unless stated otherwise. We did not generate revenue in the fourth quarter ending December 31, 2019, which was consistent with the same period in 2018. And net loss for the quarter was $5.9 million or a loss of $0.22 per share compared to a net loss of $7.8 million or $0.28 per share for the fourth quarter of last year. The reduction in our loss for the year can be attributed to our expense controls, which I will cover next.

Our SG&A expenses for the fourth quarter of 2019 was $7.6 million. It was a 22% decrease from $9.8 million a year ago. As we introduced last quarter, we have taken a very hard look at our operational expenses.

Our legal expenses have historically been and will continue to be the largest expense for our business, especially as we enter a busy litigation cycle. Accordingly, we are continually evaluating alternatives and monitoring that spend to ensure that each case yields the best outcome for our shareholders.

Turning to our non-legal operating expenses, we have been able to reduce these by over 20% on an annualized basis from just over $10 million in 2019 to roughly $8 million in 2020. As mentioned previously, we have constructed the business model to be flexible with limited fixed overhead and ability to scale our outside consultants as needed, which helps keep our costs aligned with revenue-generating events. We continue to successfully manage our cash position.

We ended the quarter with $36.1 million in cash, helped by the collection of the cash for our license with Mimecast from late Q3, a tax refund and the sale of our minority position in JVP, all of which were received in the fourth quarter and will be covered next. Please note that $17.8 million of our cash is in short-term investments. Further details can be found in Note 2 of the 10-K filed this morning.

As indicated by our cash collections, we continue to pursue tax efficiencies, which over the years, has enabled us to seek meaningful tax refunds and benefits on our income statement. Accordingly, we received approximately $3 million in cash, $2.7 million in tax provision benefit in the fourth quarter. For the full year of fiscal 2019, we received approximately $5 million in tax refund in cash and recognized $6.2 million in tax provision.

With respect to our sale of a limited partnership investment in Jerusalem Venture Partners or JVP, we received $3.5 million in cash on December 31, 2019. In addition to the cash received, our remaining $1.1 million capital commitment obligation was assumed by the buyer. Our decision to sell our investment in JVP is opportunistic and led by several factors. Given the upcoming docket of trials, our focus has to be on generating and conserving cash in order to strengthen our resolve. JVP was a noncore investment that still had capital calls outstanding. While we chose to sell the position at a modest discount to net asset value, selling the position to a current investor in JVP allowed that discount to be much lower than if we were to have proactively sold it to a secondary fund or other buyer.

Overall, the sale proceeds and distributions previously received made a modest cash-on-cash return on this investment. Our focus on cash collections has allowed us to maintain a stable balance sheet in the face of investing in our upcoming trial schedule. We feel confident that our licensing and litigation programs will yield additional cash-generating events for the company. We will be going through a process to evaluate alternatives on how to best use any excess cash to deliver value to our shareholders. This could take form in stock buybacks, special dividends or similar mechanisms. We will be limited as to what we can do while in the midst of upcoming trials, but we will work with our Board and advisers to establish a plan to communicate that to shareholders as soon as practicable.

Now I'd like to turn to Finjan Mobile and our Mobile Browser VPN offering, InvinciBull. With over 2 million downloads, we continue to innovate and grow our patent portfolio, protect our investment interventions at Finjan Mobile. In fact, we issued another related patent just last week.

In closing, I'd like to thank you all for joining us this afternoon, and we hope we have the opportunity to touch base with many of you in the coming weeks.

Now I'd like to turn the call back 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, operator, can we please poll for our first question?

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Questions and Answers

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Operator [1]

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Of course. (Operator Instructions). Our first question comes from Sam Rebotsky with SER Asset Management.

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Sam Rebotsky, SER Asset Management - Portfolio Manager [2]

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Yes. This is a change now that we're on our feet to try to do things. Could you tell me we've paid money for the IBM patents, has that produced any income so far?

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

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Sam, thanks for the question. Yes. So the way that we -- and I can leave this up to Jevan for the technical accounting parts of it. When we talk about the IBM portfolio being incremental in licenses that we've granted since bringing those patents into the Finjan portfolio of companies. For example, I think all the way back to our FireEye license, there was a purchase price allocation, I think, at that point, of at least $2 million of that license win and was allocated specifically for the IBM patent.

So as we go through these license events with new licensees, where the Finjan Blue patents are included, yes, there is some allocation for those. As you just heard in the remarks, though, we've also now moved from the Finjan Blue patents being purely incremental in value to what would normally be achievable under just a Finjan Inc. license. To now actually driving their own programs, their own licenses where the focus is first on the IBM patents, the Finjan Blue patent, instead of the Finjan Inc. patents leading the discussion. So this is a new transition for us.

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Sam Rebotsky, SER Asset Management - Portfolio Manager [4]

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Okay. Now we lost $6 million in the current quarter, and for the year, we lost $16.5 million. What is our plan as far as what we could afford to lose going forward?

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Jevan F. Anderson, Finjan Holdings, Inc. - CFO [5]

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So Sam, I guess, what you're asking -- what is our plan as to how much -- how low can we let the cash go? Let me make sure I understand...

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Sam Rebotsky, SER Asset Management - Portfolio Manager [6]

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Yes. What is your plan -- in other words, because right now, we don't know -- I mean, presumably, you have an idea of what you expect to do from quarter-to-quarter. But is there a plan that you would -- your burn rate, would it be $5 million a quarter, $3 million? Do you have a burn rate in planning? Because you don't want to get too low, based on the $36 million cash that you presently have.

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Jevan F. Anderson, Finjan Holdings, Inc. - CFO [7]

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Yes. Well, right now, our spend is going to be consistent with our prior year. It's going to be in the neighborhood of $7 million or $8 million a quarter. That's our actual OpEx, includes litigation, all of our legal expenses as well as our other operating expenses. But that's counterbalanced by any licensing revenue that comes in and/or any litigation settlement. So -- I'm not sure if I'm answering your question, but we've got enough cash that's going to survive depending on any delays along licensing or litigation revenue coming in. But we're not -- we don't see -- right now sitting on a ton of excess cash given the trials we have facing us.

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Sam Rebotsky, SER Asset Management - Portfolio Manager [8]

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And as far as the advisers that we had during the past 15 months or so, what did they produce for us? And what -- was there something that was attractive or unattractive? And I guess, do you plan to buy stock in the open market or do you have a plan, now that the offices and directors are allowed to do that? Could you sort of talk about that?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [9]

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Sure. So as far as the advisers, are you talking about our financial advisers that were running the process?

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Sam Rebotsky, SER Asset Management - Portfolio Manager [10]

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Yes, yes. What did they produce? What did they provide you with, what -- and what was -- you didn't do a transaction, but what did they show you? What was the -- this process, how did it go and presumably nothing happened? And why -- just an explanation of why nothing happened and whatever.

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Jevan F. Anderson, Finjan Holdings, Inc. - CFO [11]

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Well, I can't get into all the details of the process. Obviously, a lot of that is covered under various NDAs, et cetera. But what I can say is, we ran a very fulsome process. We had a very experienced financial adviser. We had outside legal advisers. We have a very experienced Board, who've been through a number of these processes before, and obviously, I spent 15, almost 20 years as an M&A banker myself. So we turned over a lot of stones.

We spoke to all the various companies that -- financial and strategic that you would imagine. I think why something doesn't happen is sometimes its timing doesn't work out with buyers, sometimes the strategies don't sync up, sometimes its evaluation doesn't align. So it's a whole variety of reasons why something didn't get done. It wasn't for lack of effort. Certainly, it wasn't for lack of time, as we know it went on for well over a year. So -- but we're at the point where we had to sort of turn the process of those discussions off and our attention towards the real value generation to the company and for our shareholders, which is the incoming slate of trials that we're going to have going on this year and the next couple years.

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Sam Rebotsky, SER Asset Management - Portfolio Manager [12]

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Okay. One final question, and I'll get back in queue. Do you -- does the Board expect to buy stock in the open market, do you have an authorization? Or is any of the members of the Board of Directors, et cetera, plan that as the stock is trading rather low valuation and you weren't allowed to do that before?

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Jevan F. Anderson, Finjan Holdings, Inc. - CFO [13]

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Yes. I mean I think we're in a spot where we're in trial and there are other restrictions that are put upon us as individuals. As for the Board members, I can't speak for them, but as far as being out in the open market as a company, we do have an approved stock buyback plan. And to the extent we can reactivate that to be out there in the market and on the right side of securities regulations, then we'll probably be doing some of that.

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Sam Rebotsky, SER Asset Management - Portfolio Manager [14]

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So you're in litigation all the time. So are you allowed to buy stock? Or are you not allowed to buy stock?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [15]

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Not during a trial.

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Sam Rebotsky, SER Asset Management - Portfolio Manager [16]

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But you're always in a trial.

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Jevan F. Anderson, Finjan Holdings, Inc. - CFO [17]

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No, not actually. We're actually in -- there are -- we're in different stages of the litigation case. But actually, when we're in trial, we're actually in a trial in court. That's a very different case for the business. And we would be...

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Sam Rebotsky, SER Asset Management - Portfolio Manager [18]

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So is there a particular time that we expect not to be in trial that we can buy stock?

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

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Well, hopefully, on the other side of the ESET trial, we'll have to wait and see how long that trial actually lasts, but that will be the time. As I mentioned in my remarks, we're going to be looking at a number of different ways where we can have a plan in place to return value to shareholders. It could be through buybacks or dividends or others, depending on the cash that we generate through our operations as well as through these trials.

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Operator [20]

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Our next 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 [21]

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What's your confidence that these Finjan Blue license discussions will lead to deals in excess of the $4 million you have remaining to pay to IBM over the next 2 years?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [22]

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Well, to the specifics, I can tell you that we would never make an investment we didn't think we could recoup on the investment. And we don't file a lawsuit, that we don't think we can win a trial. I would say that we're probably in the neutral investment parameters now with how much we've made on an investment basis relative to that for which we received in licensing, maybe a little bit in plus -- in the plus territory. So I would tell you I have -- based on what I've seen in the licensing pipeline, I have an above-average to possibly even high expectations that, that portfolio will certainly yield more profit than it did expense.

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Michael Roy Crawford, B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst [23]

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All right. And then can you remind us what damages -- what amount -- amount of damages you're starting in the ESET case?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [24]

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So that's where I'm limited. So just for everyone on the phone, this is one of these rare nuances about patent litigation. Even though we are the company, we Finjan, the company, filed that lawsuit against ESET, and as that information becomes available through the course of discovery, management, including our inside legal counsel, doesn't actually get to see that information. It sounds a little strange. We have some indicators, but nothing that I could communicate here in terms of expected value on the one hand. And on the other hand, too, it really comes down to whatever the jury is going to decide. So just short of us sitting in that trial in the third week of March when the damages presentations are made, that will be the first time that information will be public, both for shareholders or anyone in the court room as well as management. And then, of course, that decision will go to the jury, before we know the answer.

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Michael Roy Crawford, B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst [25]

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Okay. One final question. You mentioned about half of your cases settled before, I guess, judgment or -- of those...

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [26]

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I think that's probably before trial. Yes, in many instances...

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Michael Roy Crawford, B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst [27]

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Before trial.

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [28]

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Yes. In most instances it's before trial. So for example, if we were sitting here in the fourth quarter and having this discussion -- I believe my comments were, "We have 3 cases coming up in the first half of 2020. However, in Finjan's operating history, we expect that at least 1 of those cases will settle between the March and April cases". And as we now know Bitdefender settled, and then that would then leave the 2 cases to go to trial.

I think the anomaly here now is that, I would suggest, wildly unlikely, that Cisco would settle before trial. Just as I would sit here and just looking at how they tend to litigate, not just against Finjan but other companies. And given the fact that we're all getting on airplanes and basically moving into San Diego for the ESET trial, that, that one may or may not, although, I would say, less likely, to settle before it goes to trial either. So I think you're looking at 2 trials, 1 that starts next week and 1 that starts in June with Cisco.

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Operator [29]

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Our next question comes from Brett Reiss with Janney Montgomery Scott.

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Brett Reiss, Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor [30]

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How much is the NOL going forward?

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Jevan F. Anderson, Finjan Holdings, Inc. - CFO [31]

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I don't believe we have any NOLs remaining. From our previous settlements, we took most of that when we brought in the Symantec revenue. We sort of maxed out as well we could. From our current, we have about -- hold on a second, $20.7 million? $20.7 million of NOL that's current. How much of that we can actually use depends upon a variety of factors worth of tax experts per year or per quarter.

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Brett Reiss, Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor [32]

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Right. Now the 3 patent portfolios that are coming to trial in 2020, have most of the legal costs been laid out and that you only owe the billable hours for the trial attorney that's actually handling the trial?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [33]

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I would say, yes, plus or minus $1 million or $2 million. But yes, for the most part, our cases have the expenses and fees paid as the trial is ongoing. And then you reach a certain amount at which then, yes, the trial just sort of happens. Generally with our agreements, all of the appeals are also included in all those previous expenses as it related to taking any of those individual cases to the District Court trial.

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Vanessa Winter, Finjan Holdings, Inc. - Director of IR & Corporate Communications [34]

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But I just want to jump in, it's actually 2 trials in 2020, not 3, just to clarify.

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Brett Reiss, Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor [35]

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Okay. And if we prevail, does the law firm that represents us, do they get a piece of the -- of our fruits of victory? Or is it just the billable hours and retainer that you've given them?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [36]

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So they do. And I believe, I'd have to go back and confirm all of this, but I believe that ESET and Cisco are under different legal agreements with our outside counsel. But generally, the answer to your question is, yes, in exchange for a discount or reduced fees, legal fees, because we all know it's expensive. You hire a lawyer at $1,000 an hour, and you've got a whole team of 20 of them as you get ready to go to trial. Those bill up -- those bills add up. So in exchange for having to pay less of those fees along the way, you generally do, and we do here at Finjan, share in some of the upside. Generally, that upside is, I think, the highest it's ever been. In some of our cases, it's 25%. And in some of the lowest instances, it's been about 10%. I just don't recall what it is. I think Cisco is on the higher side, and I think, ESET is on the lower side, if I had to give you an answer as I sit here.

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Brett Reiss, Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor [37]

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Right, right. And if during 2020, we really score big on 1 or both of these trials or settlements. Will you be open to sharing some of that with the shareholders who have been suffering for the last couple of years.

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Jevan F. Anderson, Finjan Holdings, Inc. - CFO [38]

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Yes. So as we mentioned in our opening remarks, we're going to be looking at a variety of alternatives with our advisers and our Board about what's the best mechanism -- and what maybe -- what threshold we would -- above what threshold we would look at, either a special dividend or buybacks or what have you. So we'll be undergoing that evaluation. Now that we've put the external strategic options process on hold, and we're heading into these trials, we need to be prepared on (inaudible). What -- now we would manage the -- any incoming cash from those trials and settlements.

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Operator [39]

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(Operator Instructions) Our next question comes from [Glenn Neff], a private investor.

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Glenn Neff, - Private Investor [40]

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I just wanted to say that -- thank you for doing all that you can for your stockholders. We have quite a few friends and relatives who's been investing for quite a few years now, and we were looking for something for income. Most of us are above retirement age, and we purchased something -- I guess, 25 of us in the investment club, purchased a little bit less than 0.5 million shares in the last 5 years. And we'd just like to congratulate you doing all you can, but we know the stock is cheap, and we'd like to have something done about that. It was very depressing when you all announced the $10 million buyback and then only did a couple million. So we'd like to find out if you would continue doing that, but if it's going to break the company, we don't want that to happen, but it looks like what's working in the company are the lawyers. Is that the way you look at it?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [41]

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Well, there's an old adage in patent litigation that the only people that win are the lawyers. So I certainly understand that it is an expensive business to operate. There is no question about that either. I think we have a good history of actually delivering on collection as it relates to our licensing and enforcement program. But just at a macro level, it's been a tough policy environment. It's been a tough, I'd say, 5, 6 years with just rulings out of the District Courts. All of these things are just external influences that compound an already complicated business.

So I appreciate you being shareholders. I think what we're trying to communicate today is that we are focused on returning value to shareholders. I think we were locked up for quite some time while we were in the strategic options process. But we do have a renewed focus on finding ways, and you're not the only one on the phone. I'm sure everybody who had a question in the queue as well as those that listen want to understand what the opportunity and prospect is to receive some distribution of the company's proceeds based on income events, whether those be from licensing or from a litigation settlement. So we are turning our attention to that.

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Glenn Neff, - Private Investor [42]

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Okay. Just -- most of my questions were answered by the previous questioners. But we thank you for your time and just keep up the good work.

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Operator [43]

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Our next question comes from Sam Rebotsky...

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Vanessa Winter, Finjan Holdings, Inc. - Director of IR & Corporate Communications [44]

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Operator...

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Operator [45]

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Sorry, go ahead. Vanessa Winter, please go ahead.

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Jevan F. Anderson, Finjan Holdings, Inc. - CFO [46]

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Sorry. I just -- I was just polling for the next question. That's all.

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Operator [47]

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Okay, great. Our next question comes from Sam Rebotsky with SER Asset Management.

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Sam Rebotsky, SER Asset Management - Portfolio Manager [48]

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Yes. So the Symantec, Broadcom, Norton -- the Norton -- Symantec is now Norton and they sold the operation to Broadcom. Is there any -- that $45 million, is anything going on for the possibility to get something out of this? I think you've had some time to look at the transactions, there has been -- everybody has been very busy selling and buying and everything. Is there any possibility that there is any income to come out of this?

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Philip Hartstein, Finjan Holdings, Inc. - President & CEO [49]

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Sure. Just for a little bit of background for other callers that may still be on the line. When we signed our license agreement with Symantec, there was an upfront cash payment as well as up to an additional $45 million to be paid based on acquisitions that might be made by Symantec. Complicating that is that Symantec entered into a transaction with Broadcom, where it sold its enterprise [business].

When that transaction happened with Broadcom and that enterprise business went, challenge is that the license stays with Symantec. So Symantec has to be the company that makes those acquisitions. And so certainly, we would expect that Symantec now being more consumer-focused, they have their LifeLock division, they have their Norton products and all of the other consumer-focused security products that within the window of opportunity, I still think, given their history of being acquisitive, that, yes, there's still opportunities in several years for which those opportunities might materialize as follow-on income events due to Finjan as a result of those acquisitions by Symantec. So yes, we're still very much watching and waiting.

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Operator [50]

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This concludes the time allocated for 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 [51]

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I just want to thank you all for joining us today. We look forward to speaking to you in the coming weeks. And if you have any follow-ups, feel free to reach out. Thank you.

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Operator [52]

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