Company: VHC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001140361-25-018930
Chunk: 31

Company: VirnetX Holding Corp
Filing Date: 2025-05-14
Form: 10-Q
Item: Part II, Item 1L
Chunk 31
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 their investments.

Our dividend policy is within the discretion of our Board of Directors and will depend upon various factors, including our business, financial condition, results of operations, capital requirements,
        and investment opportunities. We therefore cannot make assurances that our Board of Directors will determine to pay regular or special dividends in the future. Accordingly, unless our Board of Directors determines to pay dividends, stockholders
        will be required to look to appreciation of our common stock to realize a gain on their investment, which may not occur.

The exercise of our outstanding stock options and warrants, and the issuance 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 warrants, and the vesting of RSUs and restricted stock dilutes the ownership interests of our existing stockholders. As of March 31, 2025, we
        had 263,790 outstanding options, warrants and RSUs to purchase shares of common stock representing approximately 6% of our total shares outstanding of which 245,586 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 March 31, 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.

        24

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