Finjan Holdings, Inc.

We, Andy DSilva and Mike Crawford , certify that this report reflects our personal beliefs about this company and that no portion of our compensation was, is or will be directly or indirectly related to the specific recommendations or views discussed in this report.


  • B. Riley & Co., LLC, or any of its affiliates, does and seeks to do business with companies covered in its research reports.
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  • B. Riley & Co., LLC makes a market in the securities of the company covered in this report.
  • B. Riley & Co., LLC, or its affiliates, beneficially own 1% or more of any class of common equity securities of the company covered in this report.
  • This analyst, or a member of this analyst's household who is financially dependent on this analyst or vice versa, holds a long stock position in the security covered in this report.
  • This company currently is, or within the past 12 months was, a client of B. Riley & Co., LLC., or any of its affiliates. The services provided were Investment Banking Services.
  • B. Riley & Co., LLC, or any of its affiliates, has received compensation for investment banking services from this company in the past 12 months.
  • B. Riley & Co., LLC, or any of its affiliates, has managed or co-managed a public offering of securities for this company in the past 12 months.
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Disclosure Chart

Ratings Distribution as of August 21, 2017
Rating Number of Companies Percent of Total
Buy 145 74.4%
Neutral 49 25.1%
Sell 1 0.5%
Total 195 100%
% with Investment Banking Relationships
Rating Number of Companies Percent of Total
Buy 23 88.5%
Neutral 3 11.5%
Sell 0 0.0%
Total 26 100%

Explanation of B. Riley & Co. LLC's Rating System

  • Buy: We generally expect “Buy” rated stocks to have an above-average risk-adjusted total return over the next 12 months. We recommend that investors buy the securities at the current valuation.
  • Neutral: We generally believe “Neutral” rated stocks will have an average risk-adjusted total return over the next 12 months.
  • Sell: We generally expect “Sell” rated stocks to have a below-average risk-adjusted total return over the next 12 months. We recommend that investors reduce their positions until the valuation or fundamentals become more compelling.

Risks and Considerations

  • Financial Results - Due to the Company's relatively small revenue base and fixed operating cost structure, the loss or delay of one large license deal or services contract could significantly impact the bottom line.
  • Financial Results - The Company has a history of operating losses. Although the Company is focused on achieving profitability, there are no assurances that the Company will meet its goals or be able to sustain profitability in future periods.
  • Growth Plan - There are many factors that may impact the company's ability to achieve its stated growth objectives.
  • Industry Change - The industry is subject to rapid technological change.
  • Intellectual Property - The Company's business is dependent upon the licensing of its intellectual property (IP) to customers. Should the Company fail to maintain its IP or should the Company infringe upon another vendor's IP, financial results could be negatively impacted.
  • Licensee Risk - There is always a risk that a licensee could execute poorly and temporarily hurt the brand for its respective category/classification. Licenses also are subject to renewal.
  • Loss of Key Personnel - In our opinion, the current management team will be instrumental in executing the Company's growth strategy. The resignation of a key member of management would have a negative impact on the Company.
  • General Industry - The Company could miss our estimates and/or their financial guidance.
  • Further Potential Risks - See the Company's SEC filings, particularly its 10-K filing, for a discussion of further potential risks.

Additional Risks and Considerations

    • Any failure to protect or enforce the company's patents or other intellectual property rights could materially impair its business.
    • The company's licensing cycle is lengthy and costly, and its licensing efforts may be unsuccessful.
    • The company's cash flows are unpredictable, and this may harm its financial condition or the market price for its common stock.
    • If the company is unable to successfully commercialize its new business or identify additional sources of revenue, its financial condition and operations may be materially adversely impacted.
    • Competition for patent rights and patent portfolios is intense.
    • New legislation, regulations, executive orders, or rules related to obtaining patents or enforcing patents could significantly increase the company's operating costs and decrease its income.
    • The company relies on a limited number of patented technologies.
    • The success of the company's web and network cybersecurity technology business depends in part upon its ability to retain competent legal counsel to represent them in patent enforcement litigation and its ability to manage the costs of such services.
    • Federal courts are crowded and patent enforcement litigation can be a lengthy process, particularly if carried all the way through appeal.
    • Liquidity and Solvency - The Company has a Series A preferred obligation which may hamper its ability to invest in the business. Also, the Company may need to raise additional capital in the future, and access to such capital is difficult to predict.
    • Litigation - The Company's intellectual property is comprised primarily within its patent portfolio, where claims are at risk of invalidation when asserted in litigation or challenged in USPTO or PTAB proceedings.
    • Litigation - In many instances the Company must assert its patented claims in lawsuits, whether future or current. Negative results in these cases could result in loss of intellectual property and leverage with other companies that the Company may be engaged in license discussions.
    • Financial Results - The Company has raised money in the past and may need to do so again if it can not sustain positive cash flow. 
    • Financial Results - Unpredictable timing of customer orders, licenses, settlements, and judgments.