Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 1 of 11
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`Exhibit 4
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` Zacks Small-Cap Research scr.zacks.com
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`Lisa Thompson
`312-265-9154
`lthompson@zacks.com
`
`10 S. Riverside Plaza, Chicago, IL 60606
`
`
`
`Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 2 of 11
` July 2, 2018
`
`Sponsored
`
` Impartial - Comprehensive
`
` Finjan Holdings
`
`(FNJN-NASDAQ)
`
`FNJN: Finjan s Q2 Closes With $14.7
`Million in Revenues Due to Last Minute
`$13.4 Million License Deal
`
`Based on the average EV to Sales of comparable
`companies in the IP business of 2.0xs we believe
`FNJN common stock could be worth $8.55 per
`share.
`
`Current Price (06/29/18)
`Valuation
`
`SUMMARY DATA
`
`52-Week High
`52-Week Low
`One-Year Return (%)
`Beta
`Average Daily Volume (share)
`
`Shares Outstanding (mil)
`Market Capitalization ($mil)
`Short Interest Ratio (days)
`Institutional Ownership (%)
`Insider Ownership (%)
`
`Annual Cash Dividend
`Dividend Yield (%)
`
`5-Yr. Historical Growth Rates
` Sales (%)
` Earnings Per Share (%)
` Dividend (%)
`
`P/E using TTM EPS
`P/E using 2018 Estimate
`P/E using 2019 Estimate
`
`Zacks Rank
`
`$3.40
`$8.55
`
`$3.48
`$1.76
`3.7
`-0.9
`367,073
`
`28
`$94
`1
`44
`9
`
`$0.00
`0.00
`
`N/A
`N/A
`N/A
`
`2.1
`2.9
`4.3
`
`N/A
`
`OUTLOOK
`
`With over $70 million in cash and no debt, Finjan is
`positioned to grow not only by pursuing IP licensing,
`but also by penetrating cybersecurity consulting
`services, mobile services, and investing in new IP via
`purchase, R&D, and cybersecurity startups. The
`company just settled with Symantec and its
`subsidiary Blue Coat, and we now expect other
`companies to follow. This June quarter it booked a
`$13.4 million license fee with Trend Micro. Also
`Finjan recently purchase a group of cybersecurity
`patents from IBM that it has just begun to monetize.
`
`Risk Level
`Type of Stock
`Industry
`
`Above Average
`Small-Value
`Internet-Software
`
`ZACKS ESTIMATES
`Revenue
`(in millions of $)
`Q1
`(Mar)
`2.3 A
`24.7 A
`65.0 A
`
`
`2016
`2017
`2018
`2019
`
`Q2
`(Jun)
`6.5 A
`2.3 A
`14.7 E
`
`
`Q3
`(Sep)
`1.1 A
`0.0 A
`4.3 E
`
`
`Q4
`(Dec)
`8.4 A
`23.4 A
`9.0 E
`
`
`Year
`(Dec)
`18.4 A
`50.0 A
`93.5 E
`67.5 E
`
`EPS
`(GAAP)
`
`2016
`2017
`2018
`2019
`
`Q1
`(Mar)
`-$0.05 A
`$0.69 A
`$0.93 A
`
`
`Q2
`(Jun)
`-$0.20 A
`-$0.29 A
`$0.19 E
`
`
`Q3
`(Sep)
`-$0.20 A
`-$0.16 A
`-$0.04 E
`
`
`Year
`Q4
`(Dec)
`(Dec)
`-$0.28 A
`$0.17 A
`$0.68 A
`$1.14 A
`$1.16 E
`$0.07 E
` $0.80 E
`
`© Copyright 2018, Zacks Investment Research. All Rights Reserved.
`
`

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`Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 3 of 11
`
`
`
`WHAT S NEW
`
`On June 29, 2018 Trend Micro agreed to pay Finjan a $13.4 million license fee, which was paid and
`booked as revenue that day. The agreement further stipulated that upon acquisition by the Trend Micro of
`certain entities, Trend Micro will pay additional license fees to Finjan, unless otherwise mutually agreed.
`Further, the agreement has additional provisions relating to certain unlicensed products of any company
`that acquires a Trend Micro Party, in which case additional license fees may apply. The parties also
`entered into related agreements with respect to their respective patents, including the transfer of select
`security-related patent assets from the Trend Micro to Finjan.
`
`On May 15, 2018, Finjan Blue, Inc., a wholly-owned subsidiary of Finjan Holdings, Inc. was assigned by
`IBM: 30 U.S. patents, 11 related international patents and one European pending patent application, for
`an undisclosed amount in cash.
`
`Updating Forecasts
`
`In Q2 Finjan booked $14.7 million in revenues according to filings, we are adjusting estimates
`accordingly. This should result in EPS of $0.19 per share using gross margins of 90%, expenses of $5.5
`million, a 28% tax rate and fully diluted shares of 30.3 million.
`
`For Q3 we have $1.3 million being received from Carbon Black, and are assuming another $3 million in
`licensing fees generated before the end of the quarter giving us a total of $4.3 million in revenues for the
`quarter. This could result in an EPS loss of $0.04 per share.
`
`For the full year of 2018 we are now at $93.5 million in revenues, of which $82.4 million have already
`been paid or are due to paid by year-end. EPS for the year is raised to $1.16 per share from a previous
`estimate of $0.93 per share.
`
` KEY POINTS
`
`Finjan holds a number of pioneering patents for cybersecurity hardware and software that is relevant
`to dozens of companies in this space. It recently bought more cybersecurity patents from IBM it just
`started to monetize.
`
`It just settled its extensive litigation with Symantec and Blue Coat and we expect other companies to
`now follow.
`
`The company is continuing to file new patents and create new cybersecurity products.
`
`While its patents have already generated $360M in licensing, the company has the potential to
`continue to reap large licensing revenues from the $21 billion market for cybersecurity software,
`services and appliance market.
`
`The technology licensing market in the U.S., once an afterthought, has grown from $33 billion in
`1994 to $68 billion in 2002
`and is likely over $100 billion today.
`
`The company s has a market cap of $94 million and we estimate it has a current enterprise value of
`approximately $23 million. Estimating revenues of $93.5 million in 2018 and an industry multiple of
`2.0 times sales, the company could be worth as much as $187 million in enterprise value or $257
`million market cap. This equates to $8.55 per share.
`
`Zacks Investment Research Page 2 scr.zacks.com
`
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` OVERVIEW
`
`Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 4 of 11
`
`Finjan Holdings is a patent licensing and enforcement firm based in East Palo Alto, California that owns
`the patents of its predecessor company Finjan Inc., a cybersecurity company that was founded in Israel
`in 1997. It invented several technologies that are used in current cybersecurity products today. Its three
`main patent areas:
`Behavior-based methods to detect and prevent threats from the Internet, including email and Web
`malware
`Sandboxing or stripping applications and running potentially malicious code in a safe
`environment
`Mobile code replacement where the malicious code is stripped and replaced by safe code
`
`In addition the company recently bought the rights to a number of cybersecurity patents from IBM. It has
`not yet begun to monetize these patents.
`
`THE PRESENT COMPANY ENFORCEMENT
`
`Company
`
`Date and Location
`
`Status
`
`Patent numbers
`
`Palo Alto Networks
`($1.4 billion)
`
`United States District Court for
`the Northern District of California
`on November 4, 2014.
`
`Awaiting review by PTAB.
`Waiting for stay to be lifted.
`
`6,804,780; 6,965,968; 7,058,822;
`7,418,731; 7,613,918; 7,613,926;
`7,647,633; 8,141,154; 8,225,408;
`and 8,677,494
`
`ESET
`
`Cisco
`($49 billion)
`
`SonicWall
`($1.4 billion)
`
`Bitdefender
`
`Juniper Networks
`($5 billion)
`
`Zscaler
`($250 million est.)
`
`United States District Court for
`the Northern District of California
`on July 1, 2016
`
`Suing for minimum of $44 million.
`Markman Sept. 24, 2017
`Trial no later than Dec 2018.
`
`6,154,844; 6,804,780; 7,975,305;
`8,079,086; 9,189,621; and
`9,219,755.
`
`German District Court in
`Dusseldorf
`
`Nullity Action with Blue Coat Nov
`21, 2018.
`
`European Patent No. EP
`0965094
`
`United States District Court for
`the Northern District of California
`on January 6, 2017
`
`United States District Court for
`the Northern District of California
`on August 4, 2017
`
`United States District Court for
`the Northern District of California
`on August 16, 2017
`
`United States District Court for
`the Northern District of California
`on September 29, 2017
`
`United States District Court for
`the Northern District of California
`on December 5, 2017
`
`Initiated January 6, 2017.
`
`Markman scheduled June 15,
`2018.
`
`Trial date June 1, 2020
`
`Initiated August 4, 2017.
`
`Markman scheduled Oct 12,
`2018
`
`6,154,844; 6,804,780; 7,647,633;
`8,141,154; and 8,677,494.
`
`6,154,844; 6,804,780; 6,965,968;
`7,058,822; 7,613,926; 7,647,633;
`7,975,305; 8,141,154; 8,225,408;
`8,677,494.
`
`Initiated August 16, 2017.
`
`6,804,780; 7,930,299; 8,141,154;
`and 8,677,494
`
`Initiated September 29, 2017.
`
`Mini-trial June 26, 2018
`
`6,154,844; 6,804,780; 7,613,926;
`7,647,633; 7,975,305; 8,141,154;
`8,225,408; 8,677,494.
`
`Initiated December 5, 2017.
`
`6,804,780; 7,647,633; 7,975,305;
`8,677,494
`
`Check Point Software
`($1.9 billion)
`
`United States District Court for
`the Northern District of California
`on May 3, 2018
`
`Initiated May 3, 2018.
`
`6,154,844, 6,965,968, 7,418,731,
`7,647,633, 8,079,086, 8,141,154,
`8,677,494
`
`Highlighted patent numbers have been successfully defended in court.
`
`Zacks Investment Research Page 3 scr.zacks.com
`
`

`

` All of the revenues booked to date are one-time and not recurring. It will be more difficult to book Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 5 of 11
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`RISKS
`
`revenues as more and more companies are no longer targets.
`
`There is no way to predict the timing of lawsuit settlements or licensing agreements, or even the
`length or cost of a lawsuit.
`
`The stock is high risk and is expected to have wide swings in stock price depending on
`unpredictable events.
`
`The US government could to legislate new laws on patent enforcement that could affect the
`company s ability to monetize its patents as it currently expects.
`
` VALUATION
`
`Finjan currently has a cash hoard we estimate to be over $70 million, no debt, and no preferred stock
`outstanding. A market value of $94 million then equates to a current enterprise value of $23 million. At
`the end of March, the company had $2.90 per share in cash and it should be higher than that now.
`
`Valuing an IP company, even with a track record, is very difficult. We look at other IP companies to see
`how the market values them to make some comparisons. There seems to be two different types of
`companies in this space, the older stable revenue generating companies like Rambus (RMBS), and the
`upstarts that trade on events and potential. We can see from the table below, this ranges from Pendrill
`(PCO) with -$28 million enterprise value, to Interdigital (IDCC) with an enterprise value of $2.1 billion and
`$287 million in sales expected this year. On average, the companies with revenues trade at an average
`of 2.0X 2018 estimated calendar revenues.
`
`Using a valuation based on enterprise value to sales is easier for unprofitable companies. Based on an
`estimate of $93.5 million in sales in 2018, and the 2.0 times industry average sales multiple, the stock
`should be worth $257 million or $8.55 per share if we add $70 million in cash to the enterprise value to
`get market value.
`
`Company
`Acacia Research
`Interdigital
`Inventergy Global
`Marathon
`Neonode
`Network-1
`Parkervision
`Pendrell
`Rambus
`RPX*
`VirnetX
`Quarterhill
`
`Ticker
`
`ACTG
`IDCC
`INVT
`MARA
`NEON
`NTIP
`PRKR
`PCOA
`RMBS
`RPXC
`VHC
`QTRH
`
`Revenue
`2018E
`$77
`$287
`NA
`$33
`$11
`NA
`$43
`NA
`$399
`$278
`NA
`$106
`
`EV/
`LTM EBITDA
`$119
`1.6x
`$526
`5.9x
`$1
`-0.4x
`$1
`-1.7x
`$10
`-3.9x
`$30
`0.4x
`$0
`-1.0x
`$43
`-1.1x
`$342
`25.8x
`$330
`2.0x
`$1
`-9.7x
`$135
`1.7x
`
`Average
`*
`to
`be
`acquired
`
`for $555
`
`million
`
`3.8x
`
`EBIDTA
`Margin
`16%
`67%
`-191%
`-1341%
`-43%
`63%
`-9096%
`71%
`4%
`61%
`-1780%
`45%
`
`-1286%
`
`Enterprise
`2018E
`0.4x
`7.3x
`NA
`0.5x
`1.6x
`NA
`0.4x
`NA
`3.6x
`1.4x
`NA
`1.0x
`
`Value
`
`/
`Sales
`LTM
`0.3x
`4.0x
`0.8x
`22.2x
`1.7x
`0.3x
`93.7x
`-0.6x
`4.1x
`1.2x
`171.9x
`0.8x
`
`in
`
`Included
`Average?
`y
`y
`n
`y
`y
`n
`y
`n
`y
`y
`n
`y
`
`2.0x
`
`16.0x
`
`Enterprise
`Value
`$31
`$2,090
`$1
`$15
`$17
`$8
`$17
`-$28
`$1,420
`$400
`$203
`$104
`
`$512
`
`Zacks Investment Research Page 4 scr.zacks.com
`
`

`

`
`
`
`
`Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 6 of 11
`
`The company believes that although the percent of the market left to be captured declines, the market
`continues to grow at a rapid pace and potential revenues may not be shrinking. In other words, its TAM
`as a percent may be smaller, but the dollars involved are the same or increasing as the cybersecurity
`market grows.
`
`Currently Finjan s biggest revenue potential comes from Cisco and Palo Alto Networks due to their size.
`In addition, since Cisco was a shareholder and an insider, the company is confident that the court would
`apply willfulness on any judgment increasing the pay out significantly.
`
` OWNERSHIP
`
`HarbourVest(cid:9) Partners(cid:9)
`
`Halcyon(cid:9) Capital(cid:9)
`
`Southpaw(cid:9) Asset(cid:9) Management
`
`B.(cid:9) Riley(cid:9) &(cid:9) Co.(cid:9)
`
`Star(cid:9) Bird(cid:9) Holdings,(cid:9) Ltd.(cid:9)
`
`Eric(cid:9) Benhamou(cid:9)
`
`Phil(cid:9) Hartstein(cid:9)
`
`Renaissance(cid:9)
`
`Dimension(cid:9) Fund(cid:9)
`
`Gary(cid:9) Moore(cid:9)
`
`Vanguard(cid:9)
`
`Michael(cid:9) Noonan(cid:9)
`
`Other(cid:9)
`
`Zacks Investment Research Page 5 scr.zacks.com
`
`

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`In Thousands Websense
`
`
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`
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`
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`
`
`
`
`
`
`
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`Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 7 of 11
`
` INCOME STATEMENT
`
`Q1
`
`Q2
`
`Q3
`
`Q4
`
`Q1
`
`Q2E
`
`Q3E
`
`Q4E
`
`2016
`
`2017
`
`2018E
`
`2019E
`
`2017
`
`2018E
`
`Other licenses
`Carbon
`Black
`CybeRisk Security Solutions
`FireEye
`SYMC/Blue
`Proofpoint
`Sophos
`Total
`Revenues
`
`Coat
`
`$0
`9,745
`0
` 2
`0
`0
`0
` 15,000
`24,747
`
`$0
`2,300
`0
`9
`0
`0
`0
`0
`2,309
`
`$0
`0
`0
`0
`0
`0
`0
`0
`0
`
`$0
`1,328
`0
`50
`17,500
`0
`3,300
`1,250
`23,428
`
`$0
`0
`0
`0
`0
`65,000
`0
`0
`65,000
`
`$0
`13,400
`1,300
`0
`0
`0
`0
`0
`14,700
`
`$0
`3,000
`1,300
`0
`0
`0
`0
`0
`4,300
`
`$0
`7,700
`1,300
`0
`0
`0
`0
`0
`9,000
`
`$3,000
`7,478
`0
`309
`0
`0
`7,600
`0
`18,387
`
`$0
`$13,373
`0
`$61
`17,500
`0
`0
`15,000
`50,484
`
`$0
`24,100
`3,900
`500
`0
`65,000
`0
`0
`93,500
`
`$0
`20,000
`0
`0
`0
`45,000
`0
`2,500
`67,500
`
`revenues
`of
`Cost
`Gross profit
`Gross Margin
`
`Expenses:
`
`Operating
`SG&A
`R&D
`Avira
`Total
`
`fee
`license
`operating
`expenses
`
`3,783
`20,964
`85%
`
`4,537
`153
`
`4,690
`
`225
`2,084
`90%
`
`4,635
`334
`0
`4,969
`
`0
`0
`100%
`
`5,112
`330
`325
`5,767
`
`
`
`2,000
`21,428
`91%
`
`13,662
`656
`325
`14,643
`
`13,000
`52,000
`80%
`
`1,470
`13,230
`90%
`
`7,982
`462
`325
`8,769
`
`4,800
`350
`325
`5,475
`
`300
`4,000
`93%
`
`4,800
`400
`325
`5,525
`
`
`
`770
`8,230
`91%
`
`3,037
` 15,350
`83%
`
`6,008
` 44,476
`88%
`
`15,540
` 77,960
`83%
`
`11,250
` 56,250
`83%
`
`4,800
`500
`325
`5,625
`
`14,430
`570
`
`15,000
`
`27,946
`1,473
`650
`30,069
`
`22,382
`1,712
`1,300
`25,394
`
`19,200
`2,000
`1,300
`22,500
`
`(1,525)
`
` 2,930
`
`warrant
`
`liab
`
`Income
`Operating
`Other
`Income
`of
`Change
`in
`fair val
`Gain
`on
`settlements
`Other income
`Interest
`income
`Total
`other income
`Pretax profit
`Income
`taxes
`Tax rate
`Net Income
`
` 16,274
`
`
`0
`0
`0
`0
`0
` 16,274
` 324
`2%
` 15,950
`
`(2,885)
`
`(5,767)
`
` 26,128
`
`0 1,530
`0
`0
`0
`0
`0
`0
`0
`1,530
`(2,885)
`(4,237)
`(56)
`0
`2%
`0%
`(2,829)
`(4,237)
`
`687
`0
`0
`27
`714
` 26,155
`(6,428)
`-25%
` 32,583
`
` 43,231
`
`
`(2,106)
`0
`0
`(384)
`(2,490)
` 40,741
` 11,523
`28.3%
` 29,218
`
` 7,755
`
`0
`0
`0
`100
`100
` 7,855
` 2,221.39
`28%
` 5,634
`
`0
`0
`0
`100
`100
`(1,425)
`(403)
`28%
`(1,022)
`
`0
`0
`0
`100
`100
` 3,030
` 915
`28%
` 2,115
`
` 14,407
` 350
`
`
`0
`2,217
`0
`0
`0
`0
`1
`27
`1
`2,244
` 351
` 16,651
`0
`(6,160)
`0%
`-37%
` 351
` 22,811
`
` 52,566
`
`
`(2,106)
`0
`0
`(84)
`(2,190)
` 50,376
`14,256
`28%
` 36,120
`
` 33,750
`
`0
`0
`0
`0
`0
` 33,750
`9,450
`28%
` 24,300
`
`Stock
`Preferred
`of
`Accretion
`Net
`inc.
`to
`common
`shareholders
`
`-
` 15,950
`
`(3,925)
`(6,754)
`
`-
`(4,237)
`
`(957)
` 31,626
`
`(925)
` 28,293
`
`-
` 5,634
`
`-
`(1,022)
`
`-
` 2,115
`
`(6,789)
`(6,438)
`
`(4,882)
` 17,929
`
`(925)
` 35,195
`
`-
` 24,300
`
`Per
`
`Share:
`
`Net Income
`EPS
`EPS
`Diluted
`Avg
`Shares
`Outstanding
`Diluted Shares
`
`
`
`$0.69
`$0.69
`23,133
`23,217
`
`($0.29)
`($0.29)
`23,257
`23,257
`
`($0.16)
`($0.16)
`27,328
`27,328
`
`$1.14
`$1.14
`27,707
`27,707
`
`$1.02
`$0.93
`27,715
`30,284
`
`$0.20
`$0.19
`27,732
`30,284
`
`($0.04)
`($0.04)
`27,832
`30,284
`
`$0.07
`$0.07
`27,932
`30,284
`
`($0.28)
`($0.28)
`22,837
`22,920
`
`$0.71
`$0.68
`25,354
`26,270
`
`$1.27
`$1.16
`27,803
`30,300
`
`$0.80
`$0.80
`28,000
`30,284
`
`Stock-based Comp
`Adj
`Non-GAAP
`Income
`Non-GAAP EPS
`
`209
`
`$0.70
`
`16,159
`
`210
`(6,544)
`
`($0.28)
`
`222
`(5,545)
`
`($0.20)
`
`202
`6,284
`$0.23
`
`318
`28,611
`
`0.94
`
`
`200
`
`5,834
`$0.21
`
`200
`
`(822)
`($0.03)
`
`200
`
`2,315
`$0.08
`
`872
`(5,566)
`
`($0.24)
`
`843
`
`10,354
`$0.39
`
`918
`
`36,113
`$1.19
`
`918
`
`25,218
`$0.83
`
`Zacks Investment Research Page 6 scr.zacks.com
`
`

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`
`
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`
`
`
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`
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
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`Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 8 of 11
`
` BALANCE SHEET
`
`Since the March quarter ended, Finjan paid $13 million due to lawyers on the Symantec litigation team
`and received $13.4 million from Trend Micro and $2.6 million from Carbon Black, putting cash at $83.4
`million or $3.05 per share before paying cash taxes.
`
`$ in Thousands
`
`Current assets:
`Cash
`and
`cash
`equivalents
`Accounts receivable,
`net
`Prepaid
`expenses and
`other current
`Total
`current assets
`
`assets
`
`equipment,
`
`Property and
`Investments
`net
`Intangible
`assets,
`Other long
`term assets
`Deferred
`income
`taxes,
`
`net
`
`non-current
`
`Total
`
`Assets
`
`Current Liabilities:
`Accounts payable
`- related
`Accounts payable
`Accrued
`expenses
`Accrued
`income
`taxes
`Warrant
`liability
`Other current
`liabilities
`Total
`current liabilities
`
`parties
`
`liabilities
`Other non-current
`Other liabilities,
`non-current
`Total
`Liabilities
`
`- patent
`
`Series
`Series
`
`Stock
`Preferred
`A
`A-1
`Preferred
`Stock
`
`Equity
`
`Stockholders'
`Common
`stock
`capital
`Additional
`paid-in
`Retained
`earnings
`Equity
`Total
`Stockholders'
`Total
`Liabilities & Stockholders'
`
`Equity
`
`Cash per share
`Working Capital
`Quick ratio
`Debt/TA
`
`31,
`Mar
`2018
`
`Dec 31,
`2017
`
`Qtr-Qtr
`% Change
`
`31,
`Mar.
`2017
`
`Yr-Yr
`% Change
`
`$80,440
`2,550
`681
`83,671
`
`$41,169
` 2,606
`765
`44,540
`
`128
`3,168
`5,950
`3,619
`0
`
`140
`2,618
`7,748
`0
`6,201
`
`95%
`-2%
`-11%
`88%
`
`-9%
`21%
`-23%
`NM
`-100%
`
`$26,434
` 2
`283
`26,719
`
`204%
`127400%
`141%
`213%
`
`191
`2,618
`0
`322
`0
`
`-33%
`21%
`NM
`1024%
`0%
`
`96,536
`
`61,247
`
`58%
`
`29,850
`
`223%
`
`16,107
`25
`3,102
`8,953
`3,202
`1,021
`32,410
`
`0
`4,438
`36,848
`
`0
`0
`
`4,646
`112
`1,303
`13
`1,096
`1,086
`8,256
`
`0
`5,500
`13,756
`
`0
`18,965
`
`247%
`-78%
`138%
`68769%
`192%
`-6%
`293%
`
` 5,003
`23
` 1,049
`327
`0
`20
`6,422
`
`0%
`-19%
`168%
`
`0%
`-100%
`
`119
`0
`6,541
`
`6,264
`0
`
`222%
`9%
`196%
`2638%
`NM
`5005%
`405%
`
`-100%
`NM
`463%
`
`-100%
`0%
`
`3
`22,361
` 37,324
`59,688
`$96,536
`
`3
`22,968
` 5,555
`28,526
`$61,247
`
`0%
`-3%
`572%
`109%
`58%
`
`2
`18,349
`(1,306)
` 17,045
`$29,850
`
`50%
`22%
`-2958%
`250%
`223%
`
`$2.66
`$51,261
`2.6
`0%
`
`$1.49
`$36,284
`5.4
`31%
`
`79%
`41%
`-52%
`-100%
`
`$1.16
`$20,297
`4.2
`21%
`
`128%
`153%
`-38%
`-100%
`
`Zacks Investment Research Page 7 scr.zacks.com
`
`

`

`Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 9 of 11
`
`
`
`
`
`
`
` CASH FLOW
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` Net income Cash flows from operating activities:
`
`net loss
`
`to
`
`net cash
`
`used
`
`in
`
`reconcile
`to
`Adjustments
`operating activities:
`Gain
`on
`Investment
`Depreciation
`and
`amortization
`Change
`in
`fair value
`of
`warrant
`Deferred
`income
`taxes
`Loss on
`disposal
`of
`assets
`Stock-based
`compensation
`
`liability
`
`assets
`
`and
`
`liabilities:
`
`assets
`
`- related
`
`parties
`
`activities
`
`31,
`Mar.
`2018
`
`2017 Year
`
`Dec. 31,
`2017
`
`30,
`Sept.
`2017
`
`June 30,
`2017
`
`31,
`Mar.
`2017
`
`2016 Year
`
`Dec. 31,
`2016
`
`30,
`Sept.
`2016
`
`Jun. 30,
`2016
`
`31,
`Mar.
`2016
`
`$ 29,218
`
`$ 22,811
`
`$ 13,928
`
`$
`
`(4,237)
`
`$ (2,830)
`
`$ 15,950
`
`$ 350
`
`$ 3,916
`
`$ (3,302)
`
`$ 899
`
`$ (1,163)
`
`0
`329
`2,106
`0
`0
`318
`
`0
`815
`(2,217)
`(6,201)
`0
`843
`
`(1,540)
`(152)
`
`0
`558
`(687)
`(6,201)
`0
`202
`
`(2,606)
`100
`
`0
`232
`(1,530)
`0
`0
`222
`
`9
`(132)
`
`0
`13
`0
`0
`0
`210
`
`(7)
`(128)
`
`(1)
`(682)
`(1,445)
`2
`0
`(2)
`(86)
`(2,349)
`(4,956)
`
`0
`12
`0
`0
`0
`209
`
`1,064
`8
`
`0
`(783)
`3,145
`(65)
`0
`(13)
`324
`3,680
`19,851
`
`0
`63
`0
`0
`0
`872
`
`(1,066)
`30
`
`4
`1,382
`(362)
`71
`0
`(10)
`(6)
`43
`1,328
`
`0
`(40)
`0
`0
`0
`(764)
`
`0
`(228)
`
`(2)
`(5,030)
`2,009
`2
`0
`25
`0
`(3,224)
`(112)
`
`0
`15
`0
`0
`0
`229
`
`0
`4
`
`(1)
`(665)
`936
`(5)
`0
`(10)
`0
`259
`(2,799)
`
`0
`13
`0
`0
`0
`311
`
`0
`95
`
`1
`2,517
`(985)
`(3)
`0
`3
`0
`1,628
`2,851
`
`0
`14
`0
`0
`0
`142
`
`0
`38
`
`0
`(4)
`(39)
`4
`0
`(31)
`0
`(32)
`(1,039)
`
`operating
`in
`Changes
`Accounts receivable
`other current
`Prepaid
`expenses and
`Deferred
`tax asset,
`non-current
`Other long-term assets
`Accrued
`expenses
`Accounts payable
`Accounts payable
`Other assets
`Other liabilities
`taxes
`Accrued
`income
`Total
`Adjustments
`Net
`cash
`used
`in
`operating
`
`activities:
`investing
`from
`flows
`Cash
`intangible
`assets
`Purchase
`of
`Purchases of
`property and
`equipment
`Proceeds from investment
`Purchase
`of
`additional
`investment
`Net
`cash
`provided
`by (used
`in) investing
`
`activities
`
`activities
`financing
`from
`flows
`Cash
`Proceeds from common
`share
`offering
`Proceeds for sale
`of
`Preferred
`A-1,
`net
`Proceeds for sale
`of
`Preferred
`A,
`net
`Redemption
`Series A
`Preferred
`shares
`Proceeds from exercise
`of
`stock options
`Net
`cash
`provided
`by financing
`activities
`Net
`decrease
`in
`cash
`and
`cash
`equivalents
`Cash
`and
`cash
`equivalents - beginning
`Cash
`and
`cash
`equivalents - ending
`
`2,606
`84
`2,582
`0
`1,799
`11,461
`(87)
`0
`355
`8,940
`27,740
`59,711
`
`0
`0
`0
`(550)
`(550)
`
`0
`0
`0
`(19,890)
`0
`(19,890)
`39,271
`41,169
`80,440
`
`0
`(529)
`2,788
`24
`0
`(66)
`10
`535
`16,586
`
`(2,000)
`0
`127
`0
`(1,873)
`
`11,952
`14,375
`0
`(13,778)
`229
`12,778
`27,491
`13,678
`41,169
`
`0
`799
`1,815
`99
`0
`(5)
`(228)
`(26)
`7,774
`
`0
`0
`0
`0
`0
`
`1
`0
`0
`(1)
`0
`0
`7,774
`33,395
`41,169
`
`1
`137
`(727)
`(12)
`0
`(46)
`0
`(770)
`(6,083)
`
`(2,000)
`0
`0
`0
`(2,000)
`
`1,566
`0
`0
`0
`28
`1,594
`(6,489)
`39,884
`33,395
`
`Cash
`
`paid
`
`for income
`
`taxes
`
`0
`
`30
`
`30
`
`0
`
`activities
`financing
`and
`investing
`Non-cash
`held
`by investee
`investment
`Additional
`stock to
`redemption
`of
`preferred
`Accretion
`Series A-1
`warrant
`liability
`Changes in
`A/R,
`adoption
`Purchase
`of
`property and
`finance agreement
`
`ASC-606
`of
`equipment
`in
`
`exchange
`
`value
`
`0
`925
`0
`2,550
`0
`
`0
`4,882
`3,313
`0
`6,500
`
`0
`957
`0
`0
`6,500
`
`0
`3,925
`3,313
`0
`0
`
`for
`
`0
`0
`0
`0
`0
`
`10,385
`14,375
`0
`(6,555)
`201
`18,406
`13,450
`17,229
`39,884
`
`0
`
`0
`0
`0
`0
`0
`
`0
`0
`127
`0
`127
`
`0
`0
`0
`(7,222)
`0
`(7,222)
`12,756
`(13,678)
`17,229
`
`0
`
`0
`0
`0
`0
`0
`
`0
`(9)
`0
`(550)
`(559)
`
`0
`0
`9,490
`(2,793)
`111
`6,808
`7,577
`6,101
`13,678
`
`0
`0
`0
`500
`500
`
`0
`0
`(18,980)
`0
`(152)
`(19,132)
`(18,744)
`11,563
`13,678
`
`0
`(9)
`0
`(300)
`(309)
`
`0
`0
`0
`(250)
`(250)
`
`0
`0
`0
`(2,593)
`35
`(2,558)
`(5,666)
`17,229
`11,563
`
`0
`0
`9,490
`0
`76
`9,566
`12,167
`5,062
`17,229
`
`0
`
`7
`
`0
`
`0
`
`0
`6,789
`0
`0
`0
`
`1,285
`744
`
`0
`(10,960)
`0
`0
`0
`
`0
`1,309
`0
`0
`0
`
`3,112
`3,612
`
`(3,058)
`(3,349)
`
`0
`5,480
`0
`0
`0
`
`1,223
`973
`
`0
`0
`0
`0
`0
`
`0
`0
`0
`0
`0
`0
`(1,039)
`6,101
`5,062
`
`0
`
`0
`0
`0
`0
`0
`
`(1,007)
`(1,007)
`
`Operating cash Flow
`Free cash flow
`
`31,971
`31,421
`
`24,469
`24,596
`
`14,688
`14,688
`
`(3,783)
`(3,783)
`
`(2,607)
`(2,607)
`
`16,171
`16,298
`
`Zacks Investment Research Page 8 scr.zacks.com
`
`

`

`Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 10 of 11
`
`
`
`
` HISTORICAL STOCK PRICE
`
`Zacks Investment Research Page 9 scr.zacks.com
`
`

`

`
`
`Case 4:18-cv-07229-YGR Document 50-5 Filed 03/13/20 Page 11 of 11
`
` DISCLOSURES
`
`The following disclosures relate to relationships between Zacks Small-Cap Research ( Zacks SCR ), a division of Zacks Investment Research
`( ZIR ), and the issuers covered by the Zacks SCR Analysts in the Small-Cap Universe.
`
`ANALYST DISCLOSURES
`
`I, Lisa Thompson, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities
`and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views
`expressed in this research report. I believe the information used for the creation of this report has been obtained from sources I considered
`reliable, but I can neither guarantee nor represent the completeness or accuracy of the information herewith. Such information and the opinions
`expressed are subject to change without notice.
`
`INVESTMENT BANKING AND FEES FOR SERVICES
`
`Zacks SCR does not provide investment banking services nor has it received compensation for investment banking services from the issuers of
`the securities covered in this report or article.
`
`Zacks SCR has received compensation from the issuer directly or from an investor relations consulting firm engaged by the issuer for providing
`non-investment banking services to this issuer and expects to receive additional compensation for such non-investment banking services
`provided to this issuer. The non-investment banking services provided to the issuer includes the preparation of this report, investor relations
`services, investment software, financial database analysis, organization of non-deal road shows, and attendance fees for conferences sponsored
`or co-sponsored by Zacks SCR. The fees for these services vary on a per-client basis and are subject to the number and types of services
`contracted. Fees typically range between ten thousand and fifty thousand dollars per annum. Details of fees paid by this issuer are available
`upon request.
`
`POLICY DISCLOSURES
`
`This report provides an objective valuation of the issuer today and expected valuations of the issuer at various future dates based on applying
`standard investment valuation methodologies to the revenue and EPS forecasts made by the SCR Analyst of the issuer s business.
`SCR Analysts are restricted from holding or trading securities in the issuers that they cover. ZIR and Zacks SCR do not make a market in any
`security followed by SCR nor do they act as dealers in these securities. Each Zacks SCR Analyst has full discretion over the valuation of the
`issuer included in this report based on his or her own due diligence. SCR Analysts are paid based on the number of companies they cover.
`SCR Analyst compensation is not, was not, nor will be, directly or indirectly, related to the specific valuations or views expressed in any report or
`article.
`
`ADDITIONAL INFORMATION
`
`Additional information is available upon request. Zacks SCR reports and articles are based on data obtained from sources that it believes to be
`reliable, but are not guaranteed to be accurate nor do they purport to be complete. Because of individual financial or investment objectives
`and/or financial circumstances, this report or article should not be construed as advice designed to meet the particular investment needs of any
`investor. Investing involves risk. Any opinions expressed by Zacks SCR Analysts are subject to change without notice. Reports or articles or
`tweets are not to be construed as an offer or solicitation of an offer to buy or sell the securities herein mentioned.
`
`Zacks Investment Research Page 10 scr.zacks.com
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