UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025.

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-33852

VirnetX Holding Corporation

(Exact name of registrant as specified in its charter)

Delaware		77-0390628
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

308 Dorla Court, Suite 206 Zephyr Cove, Nevada		89448
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (775) 548-1785

Former name, former address and former fiscal year, if changed since last report: N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	VHC	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒
Emerging growth company ☐	Smaller reporting company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

4,238,581 shares of the registrant’s Common Stock were outstanding as of May 9, 2025.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have included or incorporated by reference in this Quarterly Report on Form 10-Q (this “Report”), and from time to time we may make statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are based upon our current expectations, estimates, assumptions, and beliefs concerning future events and conditions and may discuss, among other things, anticipated future performance (including sales and earnings), products, expected growth, future business plans and costs (including investments, partnerships and collaborations, marketing and business development, staffing strategies and entering into another sector), the impact of potential litigation, the expectation of future stockholder distributions, statements regarding our efforts and ability to maintain compliance with the New York Stock Exchange (“NYSE”) continued listing standard, our beliefs and statements regarding general industry and market conditions and growth rates, as well as general domestic and international economic conditions. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result in,” and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are necessarily subject to risks, uncertainties, and other factors, many of which are outside our control, which could cause actual results to differ materially from such statements and from our historical results and experience. These risks, uncertainties and other factors include, but are not limited to those described in Item 1A – Risk Factors of this Report and elsewhere in this Report and those described from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”). Readers are cautioned that it is not possible to predict or identify all the risks, uncertainties and other factors that may affect future results and that the risks described herein should not be considered a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Among others, the forward-looking statements appearing in this Report that may not occur include statements that pertain to the activities we have undertaken to commercialize our products and patent portfolio in and outside of the United States including VirnetX One™, War Room™, VirnetX Matrix™ and our Secured Domain Name Registry and Technology. These statements may imply that the worldwide market for our commercialized products is large and will result in significant future revenue for us. However, commercialization of products such as ours is subject to significant obstacles and risks that may delay or prevent future revenues for us.

EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

VIRNETX HOLDING CORPORATION

INDEX

		Page

PART I — FINANCIAL INFORMATION		2
	Item 1 — Financial Statements	2
	Condensed Consolidated Balance Sheets at March 31, 2025 (unaudited) and December 31, 2024	2
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024 (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2025 and 2024 (unaudited)	4
	Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2025 and 2024 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements	7
	Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Item 3 — Quantitative and Qualitative Disclosures About Market Risk	17
	Item 4 — Controls and Procedures	17

PART II — OTHER INFORMATION		18
	Item 1 — Legal Proceedings	18
	Item 1A — Risk Factors	18
	Item 5 — Other Information	28
	Item 6 — Exhibits	29

SIGNATURES		30

	As of March 31, 2025			As of December 31, 2024
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	23,222		$	23,296
Investments available for sale		10,954			14,786
Prepaid expenses and other current assets		399			122
Total current assets		34,575			38,204
Prepaid expenses and other assets		7,974			8,838
Other investments at cost		2,500			2,500
Property and equipment, net		62			67
Total assets	$	45,111		$	49,609

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	329		$	336
Accrued payroll and related expenses		327			257
Other liabilities, current		1,295			6,602
Total current liabilities		1,951			7,195

Other liabilities		6,797			2,791
Total liabilities		8,748			9,986
Commitments and contingencies (Note 4)

Stockholders’ equity:
Preferred stock, par value $0.0001 per share Authorized: 10,000,000 shares at March 31, 2025 and December 31, 2024; Issued and outstanding: 0 shares at March 31, 2025 and December 31, 2024		—			—
Common stock, par value $0.0001 per share Authorized: 100,000,000 shares at March 31, 2025 and December 31, 2024; Issued and outstanding: 4,238,581 shares at March 31, 2025 and 4,238,581 at December 31, 2024		—			—
Additional paid-in capital		244,724			244,293
Accumulated deficit		(208,349	)		(204,670	)
Accumulated other comprehensive loss		(12	)		—
Total stockholders’ equity		36,363			39,623
Total liabilities and stockholders’ equity	$	45,111		$	49,609

	Three Months Ended March 31,
	2025			2024
Revenue	$	—		$	2
Operating expense:
Research and development		1,259			1,268
Selling, general and administrative		2,788			3,660
Total operating expense		4,047			4,928
(Loss) from operations		(4,047	)		(4,926	)
Interest and other income, net		370			635
(Loss) before taxes		(3,677	)		(4,291	)
Income tax (expense) benefit		(2	)		—
Net (loss)	$	(3,679	)	$	(4,291	)
Basic (loss) per share	$	(1.01	)	$	(1.19	)
Diluted (loss) per share	$	(1.01	)	$	(1.19	)
Weighted average shares outstanding - basic		3,627			3,616
Weighted average shares outstanding - diluted		3,627			3,616

	March 31, 2025
	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Investments Available for Sale
Cash	$	1,020	$	—	$	—	$	1,020	$	1,020	$	—
Level 1:
Mutual funds		20,057		—		—		20,057		20,057		—
U.S. agency and treasury securities		13,087		12		—		13,099		2,145		10,954
		33,144		12		—		33,156		22,202		10,954
Total	$	34,164	$	12	$	—	$	34,176	$	23,222	$	10,954

	December 31, 2024
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Investments Available for Sale
Cash	$	1,777	$	—	$	—		$	1,777	$	1,777	$	—
Level 1:
Mutual funds		20,077		—		—			20,077		20,077		—
U.S. agency and treasury securities		16,204		25		(1	)		16,228		1,442		14,786
		36,281		25		(1	)		36,305		21,519		14,786
Total	$	38,058	$	25	$	(1	)	$	38,082	$	23,296	$	14,786

Warrants Issued				Exercise Price				Outstanding and Exercisable December 31, 2024				Issued				Exercised				Terminated / Cancelled				Outstanding and Exercisable March 31, 2025			Expiration Date
	1,250			$	115				1,250				—				—				—				1,250		April 30, 2025

Due in 2024	$	708
Due in 2025		1,557
Due in 2026		1,616
Due in 2027		1,678
Due in 2028		1,065
Thereafter		4,231
		10,855
Less imputed interest		(2,768	)
Total	$	8,087

	Three Months Ended
	March 31,
	2025			2024
Numerator:
Net (loss)	$	(3,679	)	$	(4,291	)

Denominator:
Weighted-average basic shares outstanding		3,627			3,616
Effect of dilutive securities		—			—
Weighted-average diluted shares		3,627			3,616

Basic (loss) per share	$	(1.01	)	$	(1.19	)
Diluted (loss) per share	$	(1.01	)	$	(1.19	)

		Incorporated by reference herein
Exhibit Number	Description	Form	Exhibit No.	Filing Date	File No.	Filed Herewith
31.1	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
31.2	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
32.1**	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
32.2**	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
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.					x
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.					x
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.					x
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).					x

	VIRNETX HOLDING CORPORATION

	By:	/s/ Kendall Larsen
		Name:	Kendall Larsen
			Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Katherine Allanson
		Name:	Katherine Allanson
			Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Date: May 14, 2025

	Three Months Ended March 31,
	2025			2024
Total shareholders’ equity, beginning balances	$	39,623		$	56,013

Common stock and additional paid-in capital:
Beginning balances		244,293			242,520
Common stock issued for equity awards, net		—			(3	)
Stock-based compensation		431			488
Ending balances		244,724			243,005

Accumulated deficit:
Beginning balances		(204,670	)		(186,495	)
Net (loss)		(3,679	)		(4,291	)
Ending balances		(208,349	)		(190,786	)

Accumulated other comprehensive loss:
Beginning balances		—			(12	)
Change in unrealized investment gain/loss, net		(12	)		(21	)
Change in foreign currency translation, net		—			(2	)
Ending balances		(12	)		(35	)

Total shareholders’ equity, ending balances	$	36,363		$	52,184