Finjan Holdings, Inc. (FNJN) CEO Phil Hartstein on Q4 2019 Results - Earnings Call Transcript

Finjan Holdings, Inc. (NASDAQ:FNJN) Q4 2019 Results Conference Call March 4, 2020 4:30 PM ET

Company Participants

Vanessa Winter - Director, IR

Phil Hartstein - President and CEO

Jevan Anderson - CFO

Conference Call Participants

Sam Rebotsky - SER Asset Management

Mike Crawford - B. Riley

Brett Reiss - Janney Montgomery Scott

Operator

Thank you for standing by. This is the conference operator. Welcome to the Finjan Holdings, Inc. Shareholder Update Conference Call. As a reminder, all participants are in a listen-only mode and the conference in being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]

I would now like to turn the conference over to Vanessa Winter, the Director of Investor Relations. Please go ahead.

Vanessa Winter

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 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 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, President and CEO. Phil?

Phil Hartstein

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 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 the 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, Cyber 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 in arriving at a fair value or license, given the expense, unpredictability and elongated timelines. We continue to believe that settlement for fair value as a metric should be our focus. Historically, we've been successful in settling approximately half of our cases before trial.

Two, settling BitDefender allows us to focus our energy and resources on the two larger cases against the ESET and Cisco, but having three 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 subsidiaries 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 patent of the underlying portfolio. As a reminder, these discussions can range anywhere from 9 to 18 months on the speedy side, we will continue to offer updates on these as appropriate.

Now, for a more detailed discussion on our litigation business. We're focused on working towards our upcoming catalyst cycle, which as we sit here today, includes two trials calendared for the first half of 2020, ESET and Cisco; two trials for the first half of 2021, Rapid7 and Sonicwall, and the expectation of another three 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 timelines.

During this period, there is no question that Finjan has successfully defended its patent, licensed some of the largest players in the cyber security industry and continues 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 the long-awaited catalyst cycle and stick to the merits of our cases, but 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 but 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 it's scheduled for run for three weeks. As a reminder, we still have pending actions against ESET in Germany. 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 contention. Basically, that's the early stage where you layout Finjan’s patent claims versus accuse 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 challenge 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 get 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 26th. A pretrial conference with the hearing on motion 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 the strict time limits 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 17th. We are awaiting a date for the oral argument, but as we sit here today, we expect an appeal decision sometime in place 2021.

The Rapid7, which is filed in the District Court of Delaware and is before Judge Noreika, two 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 motions is August 7, 2020. And a pre-trial conference is scheduled for February 8, 2021. 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 the Northern District Court. A final pre-trail 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 state and no trial has been set.

Palo Alto Networks before Judge Hamilton in the Northern District of California, the case remains stay 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 challenged claim, 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, the 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 timeline with two cases in 2020, and another two definitively scheduled in 2021. We believe the remaining will be scheduled over the next year or two, 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 and 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 patents. 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 of pursuing litigation 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 Javen, 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 we're 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, Javen Anderson. Javen?

Jevan Anderson

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 of 2018. 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 were $7.6 million, which 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've 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, 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, 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.

Importantly, we received approximately $3 million in cash, $2.7 million in tax provision benefits in the fourth quarter. Full year of fiscal 2019 received approximately $5 million in tax refunds in cash and recognized $6.2 million tax provisions. With respect to our sale of the limited partnership investment in Jerusalem Venture Partners or JVP, we received $3.5 million in cash on December 31,019.

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 non-core investment that still has capital calls outstanding.

While we chose to sell the position at a modest discount to net asset value, selling this position to a current investor in JVP allowed that discount to be much lower than if we were proactively sold it to a secondary fund or other buyer. Overall, the sale proceeds and distributions previously received, we made a modest cash on cash return on this investment.

Our focus on cash collection 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 advisors to establish a plan and communicate that with shareholders as soon as practicable.

Now, I'd like to turn to Finjan Mobile and our mobile browser of VPN offering InvinciBull. With over 2 million download, we continue to innovate and grow our patent portfolio, protect our investment, and inventions in 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 would like to turn the call back over to Vanessa to help coordinate the Q&A.

Vanessa Winter

Thank you, operator, can we please poll for our first question?

Question-and-Answer Session

Operator

Of course. We will now begin the question-and-answer session. [Operator Instructions] First question comes from Sam Rebotsky with SER Asset Management. Please go ahead.

Sam Rebotsky

Good afternoon, Phil. And this is changed, 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?

Phil Hartstein

Hi, Sam. Thanks for the question. Yes. So, the way that we -- and I can leave it up to Javen for the technical accounting parts of it. When we talk about the IBM portfolio being incremental in licenses that we've granted and bringing those patents into the Finjan portfolio of companies, for example, I think all the way back to our FireEye license which there was a purchase price allocation, I think at that point at least $2 million of that license went and was allocated specifically for the IBM patent. So, as we go through these license events with new licensees where their 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 the 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 patents instead of Finjan, Inc. patent leaving the discussion. So, this is a new transition for us.

Sam Rebotsky

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?

Jevan Anderson

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

Sam Rebotsky

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

Jevan Anderson

Yes. 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 counter out by any licensing revenue that comes in, and/or a litigation settlement. So, I'm not sure, if I am 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 don’t see right now us being sitting on a ton of excess cash, given the trials we have facing us.

Sam Rebotsky

And as far as the advisors 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, you plan to buy stock in the open market or do you have a plan now that the officers and directors are allowed to do that? Could you sort of talk about that?

Phil Hartstein

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

Sam Rebotsky

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 this process, how would it go? And presumably nothing happened, and just an explanation of why nothing happened and whatever?

Phil Hartstein

I can't get into all the details of the process. Obviously, a lot of that’s covered in various NDAs et cetera. But, what I can say is, we ran a very fulsome process. We had a very experienced financial advisor, we had outside legal advisors, 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 M&A banker myself. So, we turned over a lot of stones. We spoke to all the various companies, the financial and strategic that you would imagine. I think, why something doesn't happen is sometimes timing doesn't work out with buyers, sometimes there is -- the strategies don't take up, sometimes the evaluation doesn't align. So, it's a whole variety of reasons why something didn't get done. It wasn't for lack of efforts. Certainly it wasn’t for lack of time, as you know it went on well over a year. But, we are at the point where we had to turn the process of those discussions off, and our attention toward the real value generation of the Company of our shareholders, which is incoming slate of trials that we're going to have going on this year and the next couple of years.

Sam Rebotsky

Okay. One final question and I'll get back in queue. Did 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 saying that as the stock is trading rather low valuation and you weren't allowed to do that before?

Phil Hartstein

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

Sam Rebotsky

So, you are in litigation all the time? So, are you allowed to buy stock or you not allowed to buy stock?

Phil Hartstein

Not during a trial.

Sam Rebotsky

But you're always in a trial?

Phil Hartstein

No, not actually. We're actually -- there are -- we're at different stages of a litigation case, but actually, when we're in trial, when we're actually in a trial in court, it's a very different case for this business…

Sam Rebotsky

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

Phil Hartstein

Hopefully on the other side of the ESET trial, we'll have to wait and see how long that trial actually lasts. But that would 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 to shareholders, it could be through buybacks or dividends or others, depending on the cash that we generate through our operations as well as these trials.

Sam Rebotsky

Okay. Thank you, Phil. I'll get back in the queue.

Operator

Our next question comes from Mike Crawford with B. Riley. Please go ahead.

Mike Crawford

Thanks. 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 two years?

Phil Hartstein

To be specific, I’d tell you that we would never make an investment we didn't think we could recoup on 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 the 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 above an average to possibly even high expectations that that portfolio will certainly yield more profit than it did expense.

Mike Crawford

Can you remind us what damages, what amount of damages starting in the ESET case?

Phil Hartstein

So, that's where I'm limited. So, just for everyone on the phone is one of these rare nuances about patent litigation, even though we are the company -- we Finjan, the company filed out 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. 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's going to decide. So, just short of sitting in that trial in the third week of March when the damages presentations are made. And that'll be the first time that information will be public, both for shareholders or anyone in the courtroom as well as management. And then, of course, that decision was those at the jury before we know the answer.

Mike Crawford

Okay. One final question. You mentioned about half of your cases settle before, I guess, judgment or…

Phil Hartstein

I think that’s probably before trial.

Mike Crawford

Before trial?

Phil Hartstein

Yes. In most instances, it’s before trial. So, for example, if we were sitting here in the in 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 expected at least one 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 was settled before trial. Just as I would sit here and just looking at how they plan 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'd say less likely to settle before it goes to trial, either. So, I think you're looking at 2 trials, one that starts next week and one that starts in June with Cisco.

Operator

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

Brett Reiss

How much is the NOL going forward?

Jevan Anderson

Yes. I don't believe we have any NOLs remaining in our -- from our previous NOLs, we took most of that when we brought in Symantec revenue. We sort of maxed out as what we could. From our current, we have about -- hold on a second 20.7 million of NOLs that’s current. How much that we can actually use, it depends on a variety of factors for the cash experts, per year, per quarter.

Brett Reiss

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 to the trial attorney that's actually handling the trial?

Phil Hartstein

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 agreement, 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.

Brett Reiss

Right.

Vanessa Winter

But I just want to jump in. It's actually a two trials -- two trials in 2020, not three, just to clarify.

Brett Reiss

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

Phil Hartstein

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 $1,000 an hour, and you've had a whole team, 20 of them, as you get ready to go to trial that those fill 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, sharing some of the upside. Generally, that upside, I think the highest it’s ever been in some of our cases is 25%. 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.

Brett Reiss

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

Phil Hartstein

Yes. So, as we mentioned in our opening remarks, we're going to be looking at a variety of alternatives with our advisors and our Board about what's the best mechanism and what may be threat -- 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 facing -- we're heading into these trials, we need to be prepared on what now we would manage any incoming cash from those trials or settlements.

Brett Reiss

Great. Thank you. I'm going to drop back in queue. Thank you for taking my questions.

Phil Hartstein

Thank you.

Operator

[Operator Instructions] Next question comes from Glenn Neff, [ph] a private investor. Please go ahead.

Unidentified Analyst

Hello, gentlemen, ladies. I just wanted to say that thank you for doing all you can for your stockholders. We have quite a few friends and relatives that's been investing for quite a few years now and we was looking for something for income. Most of us are above retirement age. And we put just something, I guess 25 was in the investment club versus little bit less than 0.5 million shares in the last five years. And we just like to congratulate you for 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’d continue doing that. But it's going to work the company. We don't want that to happen, but it looks like what’s working in the company all [ph] years. Is that where you look at it?

Phil Hartstein

Well, there is 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's 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 on a macro level, it's been a tough policy environment. It's been a tough, I'd say 5, 6 years with just ruling that as a district court. 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 who 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 there.

Operator

Our next question comes from…

Vanessa Winter

Operator…

Operator

Vanessa Winter, please go ahead.

Vanessa Winter

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

Operator

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

Sam Rebotsky

So, the Symantec Broadcom, Norton, the Norton -- Symantec is now Norton and they sold the operations 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 into transaction. Everybody has been very busy selling and buying and everything. Is there any possibility that there is any income to come out of this?

Phil Hartstein

Sure. Just sort 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 as 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 the license stays with Symantec. Symantec has to be the company that makes those acquisitions.

And so, certainly, we would expect that Symantec now beings more consumer focus, 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 event due to Finjan, as a result of those acquisitions by Symantec. So, yes, we're still very much watching and waiting.

Operator

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.

Vanessa Winter

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-up, feel free to reach out. Thank you.

Operator

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