Company: VHC
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001140361-25-030577
Chunk: 12

Company: VirnetX Holding Corp
Filing Date: 2025-08-12
Form: 10-Q
Item: Part I, Item 4
Chunk 12
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 of RSUs and restricted stock would result in a dilution of our current stockholders’ voting power and an increase
        in the number of shares eligible for future resale in the public market which may negatively impact the market price of our stock.

The exercise of our outstanding vested stock options and the vesting of RSUs and restricted stock dilutes the ownership interests of our existing stockholders. As of June 30, 2025, we had 248,488 outstanding options
        and RSUs to purchase shares of common stock representing approximately 6% of our total shares outstanding of which 238,785 were vested. To the extent outstanding stock options or warrants are exercised and RSUs vest, additional shares of common
        stock will be issued, existing stockholders’ percentage voting interests will decline and the number of shares eligible for resale in the public market will increase. Such increase may have a negative effect on the value or market trading price of
        our common stock.

Investors may have limited influence because ownership of our common stock is limited.

As of June 30, 2025, our executive officers and directors beneficially owned approximately 17% of our outstanding common stock. Because of their beneficial ownership interest, our officers and directors could
        significantly influence stockholder actions. This ability to exercise significant influence could prevent or significantly delay another company from acquiring or merging with us.

Our protective provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make it difficult for a third party to successfully
        acquire us even if you would like to sell your stock to them.

We have protective provisions in our amended and restated certificate of incorporation (Restated Charter) and amended and restated bylaws (Restated Bylaws) that could delay, discourage, or prevent a third party from
        acquiring control of us without the approval of our Board of Directors. These protective provisions include:

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              A staggered Board of Directors: Only one or two of five directors will be up for election at any given annual meeting, delaying 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.

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              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