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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| VirnetX Holding Corp | NYSE:VHC | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.105 | 1.93% | 5.535 | 5.63 | 5.2766 | 5.34 | 10,617 | 21:25:00 |
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Large accelerated filer ☐
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Accelerated filer ☐
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Emerging growth company
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Smaller reporting company
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Page
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| 18 |
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| 29 |
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| 30 |
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| 31 |
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As of
June 30,
2024
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As of
December 31,
2023
|
|||||||
|
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(unaudited)
|
|||||||
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ASSETS
|
||||||||
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Current assets:
|
||||||||
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Cash and cash equivalents
|
$
|
|
$
|
|
||||
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Investments available for sale
|
|
|
||||||
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Accounts receivables
|
|
|
||||||
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Prepaid expenses and other current assets
|
|
|
||||||
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Total current assets
|
|
|
||||||
| Other investments at cost |
||||||||
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Prepaid expenses and other assets
|
|
|
||||||
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Property and equipment, net
|
|
|
||||||
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Total assets
|
$
|
|
$
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable and accrued liabilities
|
$
|
|
$
|
|
||||
|
Accrued payroll and related expenses
|
|
|
||||||
|
Other liabilities, current
|
|
|
||||||
|
Total current liabilities
|
|
|
||||||
| Other liabilities |
||||||||
| Total liabilities |
||||||||
|
Commitments and contingencies (Note 4)
|
|
|||||||
|
Stockholders’ equity:
|
||||||||
|
Preferred stock, par value $
|
|
|
||||||
|
Common stock, par value $
|
|
|
||||||
|
Additional paid-in capital
|
|
|
||||||
|
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
|
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
|
Total stockholders’ equity
|
|
|
||||||
|
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
||||
|
Three Months Ended
June 30,
|
Six Months
Ended
June 30,
|
|||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||
|
Revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Operating expense:
|
||||||||||||||||
|
Research and development
|
|
|
|
|
||||||||||||
|
Selling, general and administrative
|
|
|
|
|
||||||||||||
|
Total operating expense
|
|
|
|
|
||||||||||||
|
(Loss) from operations
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Interest and other income, net
|
|
|
|
|
||||||||||||
|
(Loss) before taxes
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Income tax (expense) benefit
|
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Net (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Basic (loss) per share
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Diluted (loss) per share
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Weighted average shares outstanding - basic
|
|
|
|
|
||||||||||||
|
Weighted average shares outstanding - diluted
|
|
|
|
|
||||||||||||
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
|
2024
|
2023
|
2024
|
2023
|
||||||||||||
|
Net (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Other comprehensive income (loss):
|
||||||||||||||||
|
Change in unrealized gain (loss) on investments, net of tax
|
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Change in foreign currency translation, net of tax
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Total other comprehensive income (loss)
|
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Comprehensive (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Three Months Ended
June 30,
|
Six Months
Ended
June 30,
|
|||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||
|
Total shareholders’ equity, beginning balances
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Common stock and additional paid-in capital:
|
||||||||||||||||
|
Beginning balances
|
|
|
|
|
||||||||||||
|
Common stock issued for equity awards, net
|
( |
) | ( |
) | ( |
) | ||||||||||
|
Stock-based compensation
|
|
|
|
|
||||||||||||
|
Ending balances
|
|
|
|
|
||||||||||||
|
Accumulated deficit:
|
||||||||||||||||
|
Beginning balances
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Net (loss)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Dividends
|
( |
) | ||||||||||||||
|
Ending balances
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Accumulated other comprehensive loss:
|
||||||||||||||||
|
Beginning balances
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Change in unrealized investment gain/loss, net
|
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Change in foreign currency translation, net
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Ending balances
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Total shareholders’ equity, ending balances
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Dividends per share
|
$ | $ | $ | $ | ||||||||||||
|
Six Months Ended
June 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Adjustments to reconcile net loss to cash flows from operating activities:
|
||||||||
|
Depreciation
|
|
|
||||||
|
Bad debt
|
|
|
||||||
|
Stock-based compensation
|
|
|
||||||
|
Changes in assets and liabilities:
|
||||||||
|
Accounts receivables
|
|
(
|
)
|
|||||
|
Prepaid expenses and other assets
|
|
(
|
)
|
|||||
|
Accounts payable
|
(
|
)
|
|
|||||
|
Accrued payroll and related expenses
|
|
|
||||||
|
Other liabilities
|
( |
) | ||||||
|
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
|
Cash flows from investing activities:
|
||||||||
|
Purchase of property and equipment
|
( |
) | ||||||
|
Purchase of investments
|
(
|
)
|
(
|
)
|
||||
|
Proceeds from sale or maturity of investments
|
|
|
||||||
|
Net cash provided by investing activities
|
|
|
||||||
|
Cash flows from financing activities:
|
||||||||
|
Payment of dividends
|
( |
) | ||||||
|
Payment of payroll taxes on equity awards
|
( |
) | ( |
) | ||||
|
Net cash used in financing activities
|
( |
) | ( |
) | ||||
|
Net change in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
|
Cash and cash equivalents, beginning of period
|
|
|
||||||
|
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
| Non-cash transactions |
||||||||
|
ROU asset and lease liability at lease modification date (Note 8)
|
$ | $ | ||||||
|
June 30, 2024
|
||||||||||||||||||||||||
|
Adjusted Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair Value
|
Cash and Cash
Equivalents
|
Investments
Available for Sale
|
|||||||||||||||||||
|
Cash
|
$
|
|
$
|
—
|
$
|
—
|
$
|
|
$
|
|
$
|
—
|
||||||||||||
|
Level 1:
|
||||||||||||||||||||||||
|
Mutual funds
|
|
|
|
|
|
|
||||||||||||||||||
|
U.S. agency and
treasury securities
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
|
|
|
(
|
)
|
|
|
|
||||||||||||||||||
|
Total
|
$
|
|
$
|
—
|
$ | (12 | ) |
$
|
|
$
|
|
$
|
|
|||||||||||
|
December 31, 2023
|
||||||||||||||||||||||||
|
Adjusted Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair Value
|
Cash and Cash
Equivalents
|
Investments
Available for Sale
|
|||||||||||||||||||
|
Cash
|
$
|
|
$
|
—
|
$
|
—
|
$
|
|
$
|
|
$
|
—
|
||||||||||||
|
Level 1:
|
||||||||||||||||||||||||
|
Mutual funds
|
|
|
|
|
|
|
||||||||||||||||||
|
U.S. agency and treasury securities
|
( |
) | ||||||||||||||||||||||
|
|
|
(
|
)
|
|
|
|
||||||||||||||||||
|
Total
|
$
|
|
$
|
27
|
$
|
(18
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||||
|
Warrants
Issued
|
Exercise
Price
|
Outstanding
and
Exercisable
December 31,
2023
|
Issued
|
Exercised
|
Terminated /
Cancelled
|
Outstanding
and
Exercisable
June 30, 2024
|
Expiration
Date
|
||||||||||||||||||||
|
|
$
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Due in 2024
|
$
|
|
||
|
Due in 2025
|
|
|||
|
Due in 2026
|
|
|||
|
Due in 2027
|
|
|||
|
Due in 2028
|
|
|||
|
Thereafter
|
|
|||
|
|
||||
|
Less imputed interest
|
(
|
)
|
||
|
Total
|
$
|
|
| Three Months Ended | Six Months Ended | |||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||
|
Numerator:
|
||||||||||||||||
|
Net (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Denominator:
|
||||||||||||||||
|
Weighted-average
basic shares outstanding
|
|
|
|
|
||||||||||||
|
Effect of
dilutive securities
|
|
|
|
|
||||||||||||
|
Weighted-average
diluted shares
|
|
|
|
|
||||||||||||
|
Basic (loss) per
share
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Diluted (loss)
per share
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
| • |
Time and resources required to accelerate transition to new product development and sales strategies targeting large enterprises and government customers;
|
| • |
Our success depends in part on establishing and maintaining relationships with other companies to integrate our family of cybersecurity products and services into their solutions and to resell them to their
current and future customers;
|
| • |
Customer adoption of our VirnetX One™ platform and software products and services;
|
| • |
The number of product license sales of VirnetX War Room™, VirnetX Matrix™ and associated services;
|
| • |
Adoption of VirnetX OneTM platform by third party application providers of secure communications;
|
| • |
Intensely competitive market with established brands that have larger customer bases, and greater resources than we do;
|
| • |
Prolonged economic uncertainties or downturns, globally or in certain regions or industries, could materially adversely affect our business; and
|
| • |
Government export and import control regulations on selling products with encryption technology in certain international markets.
|
| • |
The need to educate potential customers about our product and service capabilities;
|
| • |
Our customers’ budgetary constraints and timing of their budget cycles;
|
| • |
Delays caused by time-consuming internal review processes customary with potential customers including large governments agencies and institutions in the defense industry; and
|
| • |
Long sales cycles may increase the risk that our financial resources are exhausted before we are able to generate significant revenue.
|
| • |
Implement an effective marketing strategy to promote awareness of our products;
|
| • |
Attract and retain customers for our products;
|
| • |
Generate revenues or profit from product sales;
|
| • |
Provide appropriate levels of customer training and technical support for our products;
|
| • |
Rapidly anticipate and adapt to changes in the market and evolving customer requirements;
|
| • |
Protect our products from any system failures or other breaches.
|
| • |
Power loss, transmission cable cuts and other telecommunications failures;
|
| • |
Damage or interruption caused by fire, earthquake, and other natural disasters;
|
| • |
Computer viruses, electronic break-ins, sabotage, vandalism or software defects; and
|
| • |
Physical or electronic break-ins, sabotage, intentional acts of vandalism, terrorist attacks and other events beyond our control.
|
| • |
A staggered Board of Directors: Only one or two directors (of our five-person Board of Directors) will be up for election at any given annual meeting. This delays the ability of stockholders to affect a change in
control of us because it would take two annual meetings to effectively replace a majority of the Board of Directors.
|
| • |
Blank check preferred stock: Our Board of Directors has the authority to establish the rights, preferences, and privileges of our 10,000,000 authorized, but unissued, shares of preferred stock. Therefore, this
stock may be issued at the discretion of our Board of Directors with preferences over your shares of our common stock in a manner that is materially dilutive to you. In addition, blank check preferred stock can be used to create a “poison
pill” which is designed to deter a hostile bidder from buying a controlling interest in our stock without the approval of our Board of Directors. We have not adopted such a “poison pill;” but our Board of Directors can do so in the future,
very rapidly and without stockholder approval.
|
| • |
Advance notice requirements for director nominations and for business to be brought before stockholder meetings: Stockholders wishing to submit director nominations or raise matters to a vote of the stockholders
must provide notice to us within very specific date windows and in very specific form to have the matter voted on at a stockholder meeting. This gives our Board of Directors and management more time to react to stockholder proposals
generally and could also permit us to disregard a stockholder proposal to the extent such proposal is not submitted in accordance with the Restated Bylaws.
|
| • |
No stockholder actions by written consent: No stockholder or group of stockholders may take action by written consent. Along with the advance notice requirements described above, this provision also gives our
Board of Directors and management more time to react to proposed stockholder actions.
|
| • |
Super majority requirement for stockholder amendments to the Restated Bylaws: Stockholder proposals to alter or amend our Restated Bylaws or to adopt new bylaws can only be approved by the affirmative vote of at
least 66 2/3% of the outstanding shares of our common stock.
|
| • |
No ability of stockholders to call a special meeting of the stockholders: A special meeting of the stockholders, other than as required by statute, may be called at any time by the Board of Directors, or by the
chairman of the board, or by the president, and any power of stockholders to call a special meeting of stockholders is specifically denied. Accordingly, stockholders, even those who represent a significant percentage of our shares of common
stock, may need to wait for the annual meeting before nominating directors or raising other business proposals to be voted on by the stockholders.
|
| • |
Annual variations, actual or anticipated, in our operating results;
|
| • |
Significant changes in our management;
|
| • |
Large purchases or sales of common stock or derivative transactions related to our stock;
|
| • |
Actual or anticipated announcements of new products or services by us or competitors;
|
| • |
General conditions in the markets in which we compete; and
|
| • |
General social, political, economic, and financial conditions, including the significant volatility in the global financial markets.
|
|
|
|
|
|
Incorporated by reference herein
|
|
|
||||||
|
Exhibit
Number
|
|
Description
|
|
Form
|
|
Exhibit
No.
|
|
Filing
Date
|
|
File No.
|
|
Filed
Herewith
|
|
10.1*
|
Amended and Restated 2013 Equity Incentive Plan, as amended.
|
8-K
|
10.1
|
06/18/2024
|
001-33852
|
|||||||
|
|
Certification of the President and Chief Executive Officer, pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
x
|
|
|
|
Certification of the Chief Financial Officer, pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
x
|
|
|
|
Certification of the President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
x
|
|
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
x
|
|
|
101.INS
|
|
Inline XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
x
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
|
x
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
x
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101.DEF
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Inline XBRL Taxonomy Extension Definition Linkbase Document.
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x
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101.LAB
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Inline XBRL Taxonomy Extension Label Linkbase Document.
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x
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101.PRE
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Inline XBRL Taxonomy Extension Presentation Linkbase Document.
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x
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104
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
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x
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| * |
Includes management contract or compensatory plan.
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| ** |
This exhibit is furnished herewith, but not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. Such certifications
will not be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, except to the extent that we explicitly incorporate them by reference.
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VIRNETX HOLDING CORPORATION
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By:
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/s/ Kendall Larsen
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Name:
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Kendall Larsen
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Chief Executive Officer (Principal Executive Officer)
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By:
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/s/ Katherine Allanson
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Name:
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Katherine Allanson
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Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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Date: August 14, 2024
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/s/ Kendall Larsen
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Kendall Larsen
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date: August 14, 2024
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/s/ Katherine Allanson
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Katherine Allanson
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Chief Financial Officer
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(Principal Financial Officer and Principal Accounting Officer)
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Date: August 14, 2024
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| (1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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| (2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Kendall Larsen
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Kendall Larsen
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date: August 14, 2024
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| (1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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| (2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Katherine Allanson
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Katherine Allanson
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Chief Financial Officer
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(Principal Financial Officer and Principal Accounting Officer)
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Date: August 14, 2024
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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Stockholders' equity: | ||
| Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
| Preferred stock, shares issued (in shares) | 0 | 0 |
| Preferred stock, shares outstanding (in shares) | 0 | 0 |
| Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
| Common stock, shares issued (in shares) | 3,735,270 | 3,618,431 |
| Common stock, shares outstanding (in shares) | 3,735,270 | 3,618,431 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||
| Revenue | $ 1 | $ 2 | $ 3 | $ 4 |
| Operating expense: | ||||
| Research and development | 1,223 | 4,755 | 2,491 | 6,123 |
| Selling, general and administrative | 3,193 | 7,366 | 6,854 | 11,913 |
| Total operating expense | 4,416 | 12,121 | 9,345 | 18,036 |
| (Loss) from operations | (4,415) | (12,119) | (9,342) | (18,032) |
| Interest and other income, net | 588 | 740 | 1,224 | 2,108 |
| (Loss) before taxes | (3,827) | (11,379) | (8,118) | (15,924) |
| Income tax (expense) benefit | (3) | 0 | (3) | 78 |
| Net (loss) | $ (3,830) | $ (11,379) | $ (8,121) | $ (15,846) |
| Basic (loss) per share (in dollars per share) | $ (1.07) | $ (3.18) | $ (2.26) | $ (4.44) |
| Diluted (loss) per share (in dollars per share) | $ (1.07) | $ (3.18) | $ (2.26) | $ (4.44) |
| Weighted average shares outstanding basic (in shares) | 3,593 | 3,573 | 3,593 | 3,572 |
| Weighted average shares outstanding diluted (in shares) | 3,593 | 3,573 | 3,593 | 3,572 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
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| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME LOSS [Abstract] | ||||
| Net (loss) | $ (3,830) | $ (11,379) | $ (8,121) | $ (15,846) |
| Other comprehensive income (loss): | ||||
| Change in unrealized gain (loss) on investments, net of tax | (1) | 3 | (22) | 110 |
| Change in foreign currency translation, net of tax | (4) | (3) | (6) | (4) |
| Total other comprehensive income (loss) | (5) | 0 | (28) | 106 |
| Comprehensive (loss) | $ (3,835) | $ (11,379) | $ (8,149) | $ (15,740) |
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
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| CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract] | ||||
| Dividends per share (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 20 |
Business Description and Basis of Presentation |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Business Description and Basis of Presentation [Abstract] | |
| Business Description and Basis of Presentation |
Note 1 — Business Description
and Basis of Presentation
VirnetX Holding Corporation (the “Company,” “we,” “us,” or “our”) is an Internet security software and technology company with patented technology for Zero Trust Network Access (“ZTNA”) based secure network communications. Our
software and technology solutions, including Secure Domain Name Registry and Technology, VirnetX One™, War Room™, and VirnetX Matrix™ are designed to be device and location-independent, and enable a secure real-time communication environment for
all types of enterprise applications, services, and critical infrastructures. Our platform allows government agencies, businesses and other enterprises of all sizes to add a “security umbrella” as an added layer on top of their existing
infrastructure to further reduce risk and bolster security against ever-growing cyberthreats to data, operating systems, other infrastructure products and gateway security controllers.
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Summary of Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies |
Note 2 — Summary of Significant Accounting Policies
Unaudited Interim Financial
Information
The accompanying Condensed Consolidated Balance Sheet as of June 30, 2024, the Condensed Consolidated Statements of Operations for the three and six
months ended June 30, 2024 and 2023, the Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2024 and 2023, the Condensed Consolidated Statements of Shareholders’ Equity for the three and six months
ended June 30, 2024 and 2023, and the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States (“U.S. GAAP”). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our
financial position as of June 30, 2024, our results of operations for the three and six months ended June 30, 2024 and 2023, and our cash flows for the six months ended June 30, 2024 and 2023. The results of operations for interim periods are not
necessarily indicative of the results to be expected for a full year.
These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes
included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 15, 2024.
Use of Estimates
We prepare our consolidated financial statements in accordance
with U.S. GAAP. In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, we could
reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the
extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable
under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates, which we discuss further below. We have reviewed our critical accounting
policies and estimates with the audit committee of our Board of Directors.
Basis of Consolidation
The consolidated financial statements include the accounts of
VirnetX Holding Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.
Revenue Recognition
We derive revenue from licensing and royalty fees from contracts with customers which often span several years. We account for this revenue in
accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price
is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Our revenue arrangements may consist of multiple-element arrangements, with revenue for each unit of accounting
recognized as the product or service is delivered to the customer. With the licensing of our patents, performance obligations are generally satisfied at a point in time as work is complete when our patent rights are transferred to our customers. We
generally have no further obligation to our customers regarding our technology.
Certain contracts may require our customers to enter into a
hosting arrangement with us and for these arrangements, revenue is recognized over time, generally over the life of the servicing contract.
Cash and Cash Equivalents
We consider all highly liquid investments purchased with
maturities of three months or less at the date of purchase to be cash equivalents. Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these investments.
Investments
Investments classified as available-for-sale are recorded at
fair market value. Unrealized gains and losses are reported as other comprehensive income. Realized gains and losses are recorded in income in the period they are realized using specific identification of each security’s cost basis. We invest our
excess cash primarily in highly liquid debt instruments including corporate, government and federal agency securities, with contractual maturities of less than two years. By policy, we limit the amount of credit exposure to any one issuer.
We have elected the investment measurement alternative for
other investments without readily determinable fair values. During 2023, we invested $2,000 in L2 Holdings, LLC (“Omniteq”) and $500 in OP Media, Inc. These investments are carried at our initial cost less any impairment because we do not have the ability to exercise significant
influence over operating and financial matters. For these investments, we adjust the carrying value for any purchases or sales of our ownership interests. Periodically, we evaluate these investments for impairment. If we identify an impairment, we
reduce the carrying value for the impairment loss with a charge to earnings. We have not identified any impairment as of June 30, 2024.
Property and Equipment
Property and equipment are stated at historical cost, less
accumulated depreciation and amortization. Depreciation and amortization are computed using the accelerated and straight-line methods over the estimated useful lives of the assets, which range from to seven years. Repair and maintenance costs are charged to
expense as incurred.
Leases
The Company determines if an arrangement is a lease at inception in accordance ASC Topic 842. Operating lease right-of-use (“ROU”) assets are
included in Prepaid expenses and other assets on the Condensed Consolidated Balance Sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make
lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, using the risk-free rate.
Concentration of Credit
Risk and Other Risks and Uncertainties
Our
cash and cash equivalents are primarily maintained at two major financial institutions in the United States. Deposits held with
these financial institutions may exceed the amount of insurance provided on such deposits. A portion of those balances are insured by the Federal Deposit Insurance Corporation. At times, we had funds that were uninsured. We do not believe that we are
subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships. We have not experienced any losses on our deposits of cash and cash equivalents.
Fair Value
The carrying amounts of our financial instruments, including
cash equivalents, accounts payable, and accrued liabilities, approximate fair value because of their generally short maturities.
Intangible Assets
We record intangible assets at cost, less accumulated
amortization. Amortization of intangible assets is provided over their estimated useful lives, which can range from to 15 years, on either a straight-line basis or as revenue is generated by the assets.
Impairment of Long-Lived Assets
We identify and record impairment losses on long-lived assets
used in operations when events and changes in circumstances indicate that the carrying amount of an asset might not be recoverable, but not less than annually. Recoverability is measured by comparison of the anticipated future net undiscounted cash
flows to the related assets’ carrying value. If such assets are deemed impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from
the asset.
Research and Development
Research and development costs include expenses paid to outside
development consultants and compensation related expenses for our engineering staff. Research and development costs are expensed as incurred.
Income Taxes
We account for income taxes using the asset and liability
method. The asset and liability method requires the recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between the tax basis and financial reporting basis of our
assets and liabilities. We calculate current and deferred tax provisions based on estimates and assumptions that could differ from actual results reflected on the income tax returns filed during the following years. Adjustments based on filed
returns are recorded when identified in the subsequent years. The effect on deferred taxes for a change in tax rates is recognized in income in the period that the tax rate change is enacted. In assessing our deferred tax assets, we consider
whether it is more likely than not that all or some portion of the deferred tax assets will not be realized.
The 2017 U.S. Tax Cuts and Jobs Act changes IRC Section 174, regarding capitalization of book research and development (“R&D”) expenses for income tax purposes. Effective for tax years beginning in 2022, IRC Section 174 requires the capitalization of book R&D expenses which are capitalized and amortized over 5 years for domestic R&D expenses and over 15 years for foreign R&D expenses. To date there has been limited guidance from the IRS on how to quantify the amount of book R&D expenses subject to capitalization, including the indirect expenses supporting the R&D function. Due to the limited guidance, some assumptions were made in our estimates. A valuation allowance is provided for deferred income tax
assets when, in our judgment, based upon currently available information and other factors, it is more likely than not that all or a portion of such deferred income tax assets will not be realized. The determination of the need for a valuation
allowance is based on an on-going evaluation of current information including, among other things, historical operating results, estimates of future earnings in different taxing jurisdictions and the expected timing of the reversals of temporary
differences. We believe the determination to record a valuation allowance to reduce a deferred income tax asset is a significant accounting estimate because it is based, among other things, on an estimate of future taxable income in the United
States and certain other jurisdictions, which is susceptible to change and may or may not occur, and because the impact of adjusting a valuation allowance may be material. In determining when to release the valuation allowance established against
our net deferred income tax assets, we consider all available evidence, both positive and negative. We continually assess our ability to generate sufficient taxable income during future periods in which our deferred tax assets may be realized. If
and when we believe it is more likely than not that we will recover our deferred tax assets, we will reverse the valuation allowance as an income tax benefit in our statements of operations.
We account for our uncertain tax positions in accordance with
U.S. GAAP, which utilizes a two-step approach to evaluate tax positions. Step one, recognition, requires evaluation of the tax position to determine if based solely on technical merits it is more likely than not to be sustained upon examination. Step
two, measurement, is addressed only if a position is more likely than not to be sustained. In step two, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, which is more likely than not to be
realized upon ultimate settlement with tax authorities. If a position does not meet the more likely than not threshold for recognition in step one, no benefit is recorded until the first subsequent period in which the more likely than not standard is
met, the issue is resolved with the taxing authority, or the statute of limitations expires. Positions previously recognized are reversed if and when we subsequently determine the position no longer is more likely than not to be sustained. Evaluation
of tax positions, their technical merits, and measurements using cumulative probability are highly subjective management estimates. Actual results could differ materially from these estimates.
Stock-Based Compensation
We account for stock-based compensation using the fair value
recognition method in accordance with U.S. GAAP. We recognize these compensation costs on a straight-line basis over the requisite service period of the award, which is generally a vesting term of four years. We recognize forfeitures, if any, when they occur. In addition, we record stock-based compensation expense for awards granted to non-employees at fair value of the
consideration received or the fair value of the equity instruments issued, as they vest, over the performance period (See Note 5 – Stock-Based Compensation).
Earnings per Share
Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the period increased to
include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Additionally, weighted average shares
outstanding for both basic and diluted earnings per share include all vested restricted shares issued and outstanding.
New Accounting Pronouncements
In December 2023, the FASB issued Accounting
Standards Updated (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about an entity’s effective tax rate reconciliation as well as information on income tax paid. The
guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2024. We plan to adopt the guidance for the fiscal year ending December 31, 2025. We are currently evaluating the effect adoption of this
ASU will have on our consolidated financial statements.
In March 2024, the FASB issued ASU No. 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest
and Similar Awards. The guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2024. We plan to adopt the guidance for the fiscal year ending December 31, 2025. We are currently evaluating the
effect adoption of this ASU will have on our consolidated financial statements.
Fair Value of Financial Instruments
Fair value is the price that would result from an orderly
transaction between market participants at the measurement date. A fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Level 2 measurements utilize either directly or indirectly observable inputs in markets other than quoted prices in active markets.
Our financial instruments are stated at amounts that equal, or
approximate, fair value. When we estimate fair value, we utilize market data or assumptions that we believe market participants would use in pricing the financial instrument, including assumptions about risk and inputs to the valuation technique. We
use valuation techniques, primarily the income and market approach, which maximizes the use of observable inputs and minimize the use of unobservable inputs for recurring fair value measurements.
Mutual
funds: Valued at the quoted net asset value of shares held.
U.S.
agency and treasury securities: Valued
at the closing price reported on the active market on which the individual securities are traded.
The
following tables show the adjusted cost, gross unrealized gains, gross unrealized losses, and fair value of our securities by significant investment category as of June 30, 2024 and December 31, 2023.
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Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Income Taxes [Abstract] | |
| Income Taxes |
Note 3 — Income Taxes
For the three and six months ended June 30, 2024, we recognized no income tax benefit which is an effective tax rate of 0%. For the three and six months ended June 30, 2023, we recognized an income tax benefit of $0 and $78, respectively, which is an effective tax rate of 0.0% and 0.49%. The effective tax
rate was lower than the statutory federal income tax rate during 2023 and 2024 primarily due to the change in valuation allowance.
Our tax years for 2005 and forward are
subject to examination by the U.S. tax authority and various state tax authorities because we utilized the NOLs and tax credits generated in those years in 2020. The statute of limitation for those years expires three years after October 2021,
the date we filed our 2020 income tax returns. The California Franchise Tax Board is currently conducting an audit on the Company's
California tax returns. The outcome of the audit is yet to be determined.
We are required to
recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. At June 30, 2024, we have no uncertain tax positions. Our policy is to recognize interest and penalties accrued on uncertain tax positions as a component of income tax expense. We had no accrued interest or penalties related to uncertain tax positions at June 30, 2024.
|
Commitments and Related Party Transactions |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Commitments and Related Party Transactions [Abstract] | |
| Commitments and Related Party Transactions |
Note 4 — Commitments and
Related Party Transactions
We have a non-exclusive service agreement for the use of an aircraft from K2 Investment Fund LLC (“LLC”) for business travel for employees of the
Company. We incurred approximately $315 and $686 compared to $112 and $399 in fees and reimbursements to the LLC during the three and six months ended June 30, 2024 and 2023, respectively. We pay for the Company’s usage of the aircraft and have
no rights to purchase. Our Chief Executive Officer and Chief Administrative Officer are the managing partners of the LLC and control the equity interests of the LLC. The agreement with the LLC provides for use of the plane at an initial rate of $8 per flight hour which increased to $9.8
per flight hour in April 2024. The agreement contains no minimum usage requirement and includes other terms and conditions. The agreement can be cancelled by either us or the LLC with 30 days’ notice and renews on an annual basis unless terminated by either party. Neither party has exercised their termination rights.
See Note 8
– Leases for further discussion of our lease commitments.
|
Stock Based Compensation |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Stock Based Compensation [Abstract] | |
| Stock Based Compensation |
Note 5 — Stock-Based
Compensation
Our stockholders approved an amendment to the Amended and
Restated 2013 Equity Incentive Plan (the “Plan”) at our annual shareholders’ meeting in June 2024, which among other things, added 1,000,000
shares to the plan. The Plan provides for the granting of equity awards including stock options, restricted stock units (“RSUs”) and restricted stock. Options granted under the Plan are granted with an exercise price equal to the fair value of
our stock on the date of grant. RSUs and restricted stock are granted at the fair value of our stock on the date of grant because they have no exercise price. The fair value of options, RSUs and restricted stock are expensed over the vesting
periods. All options, RSUs and restricted stock are subject to forfeiture if service terminates prior to the shares vesting. At June 30, 2024, there were 1,058,006 shares available for grant under the Plan.
Stock-based
compensation expense included in general and administrative expense was $264 and $393, and in research and development expense was $196 and $289, for the three months ended June 30, 2024 and 2023, respectively. Stock-based compensation expense included in general and administrative expense
was $494 and $764, and
in research and development expense was $454 and $600, for the six months ended June 30, 2024 and 2023, respectively.
During the three
months ended June 30, 2024, we granted 48,000 shares of restricted stock with a weighted average grant date fair value of $3.77. During the six months ended June 30, 2024, we granted 119,000 shares of restricted stock with a weighted average grant date fair value of $5.58. During the
six months ended June 30, 2024, we paid $3 in withholding taxes on shares of restricted stock; the grantees surrendered shares of equal
value and those surrendered shares were cancelled. The amounts are reflected as financing costs in the accompanying statement of cash flows. No
restricted stock was issued during the six months ended June 30, 2023.
No options were granted during the three and six months ended June 30, 2024. During the three and six months ended June 30, 2023, we granted 1,875 options with a weighted average grant date fair value of $7 per share. No options were exercised during the three and six months ended June 30, 2024
or 2023.
No RSUs were granted during the three and six months ended June 30, 2024. During the three and six months ended June 30, 2023, we granted 1,248 RSUs with a grant date fair value of $10
per share. We issued 7,168 shares of common stock as a result of vesting RSUs in the three and six months ended June 30, 2024. We
issued 10,763 shares of common stock as a result of vesting RSUs in the three and six months ended June 30, 2023, for which we
paid $5 in withholding taxes.
As of June 30, 2024
and 2023, the unrecognized stock-based compensation expense related to unvested stock options, RSUs, and restricted stock was $2,374
and $4,082, respectively, which will be amortized over an estimated weighted average period of approximately 2.37 years and 2.25 years,
respectively.
During the six months
ended June 30, 2024, we returned 32,750 options, 2,210 RSUs and 7,138 shares of restricted stock to the plan due to termination of employees and the
expiration of unexercised options.
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Equity |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity |
Note 6 — Equity
Common Stock
During the six months ended June 30, 2024, we issued 119,000
shares of restricted stock, as well as 7,168 shares of common stock as a result of vesting RSUs. During the six months ended June
30, 2023 we issued 10,763 shares of common stock as a result of vesting RSUs.
Warrants
In
2020, we issued warrants for the purchase of 1,250 shares of common stock at an exercise price of $115 per share, exercisable on the date of grant, expiring in . The weighted average fair value at the grant date was $83.20 per warrant. The fair value at
the grant date was estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions (i) dividend yield on our common stock of 0 percent (ii) expected stock price volatility of 97 percent (iii) a risk-free interest rate of 0.27 percent and (iv) and expected option term of 5
years.
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Litigation |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Litigation [Abstract] | |
| Litigation |
Note 7 — Litigation
VirnetX Inc. v. Apple Inc. (USCAFC Case
22-1997) (“Apple Reexam II”)
On July 6, 2022, we filed with the USCAFC an appeal of the invalidity findings by the PTAB in inter-partes re-examination proceeding
95/001,697 involving our U.S. Patent No. 7,490,151. On October 17, 2022, we filed a motion to remand the appeal in light of the PTAB’s refusal to permit Director rehearing. On January 23, 2023, the USCAFC denied that motion without prejudice to
the parties raising their arguments in the merits briefs. VirnetX opening brief was filed on May 8, 2023, and Apple and the USPTO each filed a response brief on July 24, 2023. VirnetX filed its reply brief on September 1, 2023. On April 10, 2024,
we filed a motion voluntarily dismissing the appeal, which USCAFC granted on April 11, 2024. This case is now closed.
VirnetX Inc. v. Cisco Systems, Inc. (USCAFC Case 23-1765)
On April 7, 2023, we filed with the USCAFC an appeal of the invalidity findings by the PTAB in inter-partes re-examination proceeding
95/001,714 involving our U.S. Patent No. 7,490,151. The certified list is due to be filed by the USPTO by May 30, 2023, and our opening brief will be due 60 days thereafter. In addition, on April 21, 2023, Cisco filed a cross-appeal. On September
29, 2023, VirnetX filed a motion to remand. That motion was denied without prejudice to VirnetX raising the same arguments in its opening appeal brief in an order dated December 27, 2023, which also set the deadline for VirnetX to file an opening
brief for February 5, 2024. VirnetX filed its opening brief on February 5, 2024. On April 3, 2024, VirnetX and Cisco filed a joint stipulation dismissing the appeal and cross-appeal. USCAFC issued an order dismissing the appeal and cross-appeal
on April 8, 2024. This case is now closed.
Other Legal Matters
From time to time, we are subject to various legal proceedings, the outcomes of which are inherently uncertain. We record any potential gains related to legal proceedings only after cash is collected. We record a
liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. As additional information becomes available, we reassess our potential liability and may
revise our estimates. Such resolutions could have a material impact on future quarterly or annual results of operations.
One or more potential intellectual property infringement claims may also be available to us against certain other companies who have
the resources to defend against any such claims. Although we believe these potential claims are likely valid, commencing a lawsuit can be expensive and time-consuming, and there is no assurance that we could prevail on such potential claims if we
made them.
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Leases |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Leases |
Note 8 — Leases
We lease office space in Nevada. The operating lease requires monthly payments of $4.6 and expires in October 2025. At
June 30, 2024, our ROU asset and lease liability totaled $68. Lease expense totaled $14 and $28 for the three and six months ended June 30, 2024.
Lease expense totaled $13 and $27
for the three and six months ended June 30, 2023.
We lease a facility in Utah to be used for technical integration and as a training facility. This operating lease requires monthly payments starting at $72, includes periodic increases, provides six months
of free rent, and expires in April 2029. At June 30, 2024, our ROU asset and lease liability totaled $3,233 and $3,719, respectively. Lease expense totaled $210
and $419 for the three and six months ended June 30, 2024.
We also lease a facility in California for corporate promotional and marketing purposes which was prepaid at inception and expires in 2025. In March 2024, we
renewed the lease recording an ROU asset and lease liability of $5,512. The renewal period begins in 2025, continues through
2035, and requires either a single payment of $6,000 or annual payments each March beginning at $600, increasing annually, for a total commitment of approximately $7,500. At June 30, 2024, our ROU asset totaled $5,778 and our lease
liability totaled $5,670. Lease expense totaled $143 and $241 for the three and six months ended June 30, 2024, and $75 and $150 for the three and six
months ended June 30, 2023.
Payments due under the above leases as of June 30, 2024 are as follows:
We have a service agreement for the use of an aircraft from a related party discussed in more detail in Note 4 – Commitments and Related Party Transactions. We incurred approximately $315 and $686 in rental fees and reimbursements to the entity during the three and six months ended June 30, 2024 compared to $112 and $399 incurred during the three
and six months ended June 30, 2023.
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Earnings Per Share |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share |
Note 9 — Earnings Per Share
Basic earnings per share are based on
the weighted average number of common shares outstanding for the period. Diluted earnings per share are based on the weighted average number of common shares and potentially dilutive common shares outstanding. Unvested restricted shares (138,633 in 2024 and zero in 2023) are
excluded from weighted average shares outstanding. Potential common shares outstanding principally include stock options, RSUs and warrants, excluding any potentially dilutive shares convertible at a price higher than the closing price of our
stock at the end of each reporting period.The following table shows the computation of basic and diluted earnings per share for the three and six months ended June 30, 2024 and 2023 (in thousands, except per share
amounts):
We incurred a net
loss for the three and six months ended June 30, 2024 and 2023; therefore, all potentially dilutive securities representing shares of common stock (305,781
at June 30, 2024 and 348,729 at June 30, 2023) were excluded from the computation of diluted earnings per share, because their effect
would have been antidilutive.
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Insider Trading Arrangements |
3 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Insider Trading Arrangements [Line Items] | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Rule 10b5-1 Arrangement Terminated | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unaudited Interim Financial Information |
Unaudited Interim Financial
Information
The accompanying Condensed Consolidated Balance Sheet as of June 30, 2024, the Condensed Consolidated Statements of Operations for the three and six
months ended June 30, 2024 and 2023, the Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2024 and 2023, the Condensed Consolidated Statements of Shareholders’ Equity for the three and six months
ended June 30, 2024 and 2023, and the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States (“U.S. GAAP”). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our
financial position as of June 30, 2024, our results of operations for the three and six months ended June 30, 2024 and 2023, and our cash flows for the six months ended June 30, 2024 and 2023. The results of operations for interim periods are not
necessarily indicative of the results to be expected for a full year.
These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes
included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 15, 2024.
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| Use of Estimates |
Use of Estimates
We prepare our consolidated financial statements in accordance
with U.S. GAAP. In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, we could
reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the
extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable
under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates, which we discuss further below. We have reviewed our critical accounting
policies and estimates with the audit committee of our Board of Directors.
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| Basis of Consolidation |
Basis of Consolidation
The consolidated financial statements include the accounts of
VirnetX Holding Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.
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| Revenue Recognition |
Revenue Recognition
We derive revenue from licensing and royalty fees from contracts with customers which often span several years. We account for this revenue in
accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price
is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Our revenue arrangements may consist of multiple-element arrangements, with revenue for each unit of accounting
recognized as the product or service is delivered to the customer. With the licensing of our patents, performance obligations are generally satisfied at a point in time as work is complete when our patent rights are transferred to our customers. We
generally have no further obligation to our customers regarding our technology.
Certain contracts may require our customers to enter into a
hosting arrangement with us and for these arrangements, revenue is recognized over time, generally over the life of the servicing contract.
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| Cash and Cash Equivalents |
Cash and Cash Equivalents
We consider all highly liquid investments purchased with
maturities of three months or less at the date of purchase to be cash equivalents. Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these investments.
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| Investments |
Investments
Investments classified as available-for-sale are recorded at
fair market value. Unrealized gains and losses are reported as other comprehensive income. Realized gains and losses are recorded in income in the period they are realized using specific identification of each security’s cost basis. We invest our
excess cash primarily in highly liquid debt instruments including corporate, government and federal agency securities, with contractual maturities of less than two years. By policy, we limit the amount of credit exposure to any one issuer.
We have elected the investment measurement alternative for
other investments without readily determinable fair values. During 2023, we invested $2,000 in L2 Holdings, LLC (“Omniteq”) and $500 in OP Media, Inc. These investments are carried at our initial cost less any impairment because we do not have the ability to exercise significant
influence over operating and financial matters. For these investments, we adjust the carrying value for any purchases or sales of our ownership interests. Periodically, we evaluate these investments for impairment. If we identify an impairment, we
reduce the carrying value for the impairment loss with a charge to earnings. We have not identified any impairment as of June 30, 2024.
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| Property and Equipment |
Property and Equipment
Property and equipment are stated at historical cost, less
accumulated depreciation and amortization. Depreciation and amortization are computed using the accelerated and straight-line methods over the estimated useful lives of the assets, which range from to seven years. Repair and maintenance costs are charged to
expense as incurred.
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| Leases |
Leases
The Company determines if an arrangement is a lease at inception in accordance ASC Topic 842. Operating lease right-of-use (“ROU”) assets are
included in Prepaid expenses and other assets on the Condensed Consolidated Balance Sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make
lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, using the risk-free rate.
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| Concentration of Credit Risk and Other Risks and Uncertainties |
Concentration of Credit
Risk and Other Risks and Uncertainties
Our
cash and cash equivalents are primarily maintained at two major financial institutions in the United States. Deposits held with
these financial institutions may exceed the amount of insurance provided on such deposits. A portion of those balances are insured by the Federal Deposit Insurance Corporation. At times, we had funds that were uninsured. We do not believe that we are
subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships. We have not experienced any losses on our deposits of cash and cash equivalents.
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| Fair Value |
Fair Value
The carrying amounts of our financial instruments, including
cash equivalents, accounts payable, and accrued liabilities, approximate fair value because of their generally short maturities.
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| Intangible Assets |
Intangible Assets
We record intangible assets at cost, less accumulated
amortization. Amortization of intangible assets is provided over their estimated useful lives, which can range from to 15 years, on either a straight-line basis or as revenue is generated by the assets.
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| Impairment of Long-Lived Assets |
Impairment of Long-Lived Assets
We identify and record impairment losses on long-lived assets
used in operations when events and changes in circumstances indicate that the carrying amount of an asset might not be recoverable, but not less than annually. Recoverability is measured by comparison of the anticipated future net undiscounted cash
flows to the related assets’ carrying value. If such assets are deemed impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from
the asset.
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| Research and Development |
Research and Development
Research and development costs include expenses paid to outside
development consultants and compensation related expenses for our engineering staff. Research and development costs are expensed as incurred.
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| Income Taxes |
Income Taxes
We account for income taxes using the asset and liability
method. The asset and liability method requires the recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between the tax basis and financial reporting basis of our
assets and liabilities. We calculate current and deferred tax provisions based on estimates and assumptions that could differ from actual results reflected on the income tax returns filed during the following years. Adjustments based on filed
returns are recorded when identified in the subsequent years. The effect on deferred taxes for a change in tax rates is recognized in income in the period that the tax rate change is enacted. In assessing our deferred tax assets, we consider
whether it is more likely than not that all or some portion of the deferred tax assets will not be realized.
The 2017 U.S. Tax Cuts and Jobs Act changes IRC Section 174, regarding capitalization of book research and development (“R&D”) expenses for income tax purposes. Effective for tax years beginning in 2022, IRC Section 174 requires the capitalization of book R&D expenses which are capitalized and amortized over 5 years for domestic R&D expenses and over 15 years for foreign R&D expenses. To date there has been limited guidance from the IRS on how to quantify the amount of book R&D expenses subject to capitalization, including the indirect expenses supporting the R&D function. Due to the limited guidance, some assumptions were made in our estimates. A valuation allowance is provided for deferred income tax
assets when, in our judgment, based upon currently available information and other factors, it is more likely than not that all or a portion of such deferred income tax assets will not be realized. The determination of the need for a valuation
allowance is based on an on-going evaluation of current information including, among other things, historical operating results, estimates of future earnings in different taxing jurisdictions and the expected timing of the reversals of temporary
differences. We believe the determination to record a valuation allowance to reduce a deferred income tax asset is a significant accounting estimate because it is based, among other things, on an estimate of future taxable income in the United
States and certain other jurisdictions, which is susceptible to change and may or may not occur, and because the impact of adjusting a valuation allowance may be material. In determining when to release the valuation allowance established against
our net deferred income tax assets, we consider all available evidence, both positive and negative. We continually assess our ability to generate sufficient taxable income during future periods in which our deferred tax assets may be realized. If
and when we believe it is more likely than not that we will recover our deferred tax assets, we will reverse the valuation allowance as an income tax benefit in our statements of operations.
We account for our uncertain tax positions in accordance with
U.S. GAAP, which utilizes a two-step approach to evaluate tax positions. Step one, recognition, requires evaluation of the tax position to determine if based solely on technical merits it is more likely than not to be sustained upon examination. Step
two, measurement, is addressed only if a position is more likely than not to be sustained. In step two, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, which is more likely than not to be
realized upon ultimate settlement with tax authorities. If a position does not meet the more likely than not threshold for recognition in step one, no benefit is recorded until the first subsequent period in which the more likely than not standard is
met, the issue is resolved with the taxing authority, or the statute of limitations expires. Positions previously recognized are reversed if and when we subsequently determine the position no longer is more likely than not to be sustained. Evaluation
of tax positions, their technical merits, and measurements using cumulative probability are highly subjective management estimates. Actual results could differ materially from these estimates.
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| Stock-Based Compensation |
Stock-Based Compensation
We account for stock-based compensation using the fair value
recognition method in accordance with U.S. GAAP. We recognize these compensation costs on a straight-line basis over the requisite service period of the award, which is generally a vesting term of four years. We recognize forfeitures, if any, when they occur. In addition, we record stock-based compensation expense for awards granted to non-employees at fair value of the
consideration received or the fair value of the equity instruments issued, as they vest, over the performance period (See Note 5 – Stock-Based Compensation).
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| Earnings per Share |
Earnings per Share
Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the period increased to
include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Additionally, weighted average shares
outstanding for both basic and diluted earnings per share include all vested restricted shares issued and outstanding.
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| New Accounting Pronouncements |
New Accounting Pronouncements
In December 2023, the FASB issued Accounting
Standards Updated (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about an entity’s effective tax rate reconciliation as well as information on income tax paid. The
guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2024. We plan to adopt the guidance for the fiscal year ending December 31, 2025. We are currently evaluating the effect adoption of this
ASU will have on our consolidated financial statements.
In March 2024, the FASB issued ASU No. 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest
and Similar Awards. The guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2024. We plan to adopt the guidance for the fiscal year ending December 31, 2025. We are currently evaluating the
effect adoption of this ASU will have on our consolidated financial statements.
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| Fair Value of Financial Instruments |
Fair Value of Financial Instruments
Fair value is the price that would result from an orderly
transaction between market participants at the measurement date. A fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Level 2 measurements utilize either directly or indirectly observable inputs in markets other than quoted prices in active markets.
Our financial instruments are stated at amounts that equal, or
approximate, fair value. When we estimate fair value, we utilize market data or assumptions that we believe market participants would use in pricing the financial instrument, including assumptions about risk and inputs to the valuation technique. We
use valuation techniques, primarily the income and market approach, which maximizes the use of observable inputs and minimize the use of unobservable inputs for recurring fair value measurements.
Mutual
funds: Valued at the quoted net asset value of shares held.
U.S.
agency and treasury securities: Valued
at the closing price reported on the active market on which the individual securities are traded.
The
following tables show the adjusted cost, gross unrealized gains, gross unrealized losses, and fair value of our securities by significant investment category as of June 30, 2024 and December 31, 2023.
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Summary of Significant Accounting Policies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets |
The
following tables show the adjusted cost, gross unrealized gains, gross unrealized losses, and fair value of our securities by significant investment category as of June 30, 2024 and December 31, 2023.
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Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Information about Warrants Outstanding |
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Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Payments Due under Operating Leases |
Payments due under the above leases as of June 30, 2024 are as follows:
|
Earnings Per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Computation of Basic and Diluted Earnings Per Share | The following table shows the computation of basic and diluted earnings per share for the three and six months ended June 30, 2024 and 2023 (in thousands, except per share
amounts):
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Summary of Significant Accounting Policies, Investments (Details) $ in Thousands |
6 Months Ended |
|---|---|
|
Jun. 30, 2024
USD ($)
| |
| Investments [Abstract] | |
| Impairment on investment in equity security without readily determinable fair value | $ 0 |
| L2 Holdings LLC [Member] | |
| Investments [Abstract] | |
| Investment in equity security without readily determinable fair value | 2,000 |
| OP Media [Member] | |
| Investments [Abstract] | |
| Investment in equity security without readily determinable fair value | $ 500 |
| Highly Liquid Debt Investments [Member] | Maximum [Member] | |
| Investments [Abstract] | |
| Contractual maturities of investment securities | 2 years |
Summary of Significant Accounting Policies, Property and Equipment (Details) |
Jun. 30, 2024 |
|---|---|
| Minimum [Member] | |
| Property and Equipment [Abstract] | |
| Useful lives | 5 years |
| Maximum [Member] | |
| Property and Equipment [Abstract] | |
| Useful lives | 7 years |
Summary of Significant Accounting Policies, Concentration of Credit Risk and Other Risks and Uncertainties (Details) |
6 Months Ended |
|---|---|
|
Jun. 30, 2024
Institution
| |
| Concentration of Credit Risk and Others Risks and Uncertainties [Abstract] | |
| Number of financial institutions holding company's cash | 2 |
Summary of Significant Accounting Policies, Intangible Assets (Details) |
Jun. 30, 2024 |
|---|---|
| Minimum [Member] | |
| Intangible Assets [Abstract] | |
| Estimated useful lives | 3 years |
| Maximum [Member] | |
| Intangible Assets [Abstract] | |
| Estimated useful lives | 15 years |
Summary of Significant Accounting Policies, Stock-Based Compensation (Details) |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Stock-Based Compensation [Abstract] | |
| Option vesting term | 4 years |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Income Taxes [Abstract] | ||||
| Income tax benefit | $ 3 | $ 0 | $ 3 | $ (78) |
| Effective tax rate | 0.00% | 0.00% | 0.00% | 0.49% |
| Uncertain tax positions | $ 0 | $ 0 | ||
| Accrued interest | 0 | 0 | ||
| Accrued penalties | $ 0 | $ 0 | ||
| State [Member] | California Franchise Tax Board [Member] | ||||
| Income Tax Examination [Abstract] | ||||
| Years under audit | 2019 2020 2021 | |||
Commitments and Related Party Transactions (Details) - K2 Investment Fund LLC [Member] - Aircraft [Member] - USD ($) |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Commitments, Contingencies and Related Party Transactions [Abstract] | |||||
| Rental fees incurred for use of aircraft | $ 315,000 | $ 112,000 | $ 686,000 | $ 399,000 | |
| Rate of aircraft lease (in dollars per flight hour) | $ 9,800 | $ 8,000 | |||
| Term of notice for cancellation of lease | 30 days | ||||
Equity, Common Stock (Details) - shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Restricted Stock [Member] | ||||
| Common Stock [Abstract] | ||||
| Common stock issued for Restricted Stock (in shares) | 119,000 | |||
| Restricted Stock Units (RSUs) [Member] | ||||
| Common Stock [Abstract] | ||||
| Common stock issued for Restricted Stock (in shares) | 7,168 | 10,763 | 7,168 | 10,763 |
| Common stock issued upon exercise of options (in shares) | 7,168 | 10,763 | ||
Equity, Warrants (Details) - Warrants [Member] - Warrants Issued in 2020 [Member] - $ / shares |
6 Months Ended | 12 Months Ended | |
|---|---|---|---|
Jun. 30, 2024 |
Dec. 31, 2020 |
Dec. 31, 2023 |
|
| Warrants [Abstract] | |||
| Weighted average fair value of warrants at grant date (in dollars per share) | $ 83.2 | ||
| Dividend yield | 0.00% | ||
| Volatility | 97.00% | ||
| Risk-free rate | 0.27% | ||
| Expected option term | 5 years | ||
| Warrants issued (in shares) | 1,250 | 1,250 | |
| Exercise price (in dollars per share) | $ 115 | $ 115 | |
| Outstanding and exercisable (in shares) | 1,250 | ||
| Issued (in shares) | 0 | ||
| Exercised (in shares) | 0 | ||
| Terminated/ cancelled (in shares) | 0 | ||
| Outstanding and exercisable (in shares) | 1,250 | ||
| Expiration date | Apr. 30, 2025 |
1 Year VirnetX Chart |
1 Month VirnetX Chart |
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