VHC VirnetX Holding Corp

You are cordially invited to attend a special meeting of the stockholders (the “Special Meeting”) of VirnetX Holding Corporation (“VirnetX,” the “Company,” “we,” “us,” or similar term). The Special Meeting will be held in virtual format on Tuesday, October 24, 2023 at 10:00 a.m., Pacific Time. You may attend the Special Meeting by visiting https://agm.issuerdirect.com/vhc, where you will be able to listen to the meeting live, vote and submit questions limited to the proposal described in the proxy statement accompanying this letter (the “Proxy Statement”).

If you are an objecting or non-objecting beneficial owner (that is, if your shares are held at a brokerage), you must respond to this Special Meeting invitation by emailing info@virnetx.com for verification and to receive your control identification number and a company-issued password from us to attend the Special Meeting. To vote, visit https://central.proxyvote.com/pv/web, where you will be asked to enter the control identification number located on your Proxy Card, received from Broadridge Financial Solutions, Inc.

If you are a registered stockholder, you will only need to enter the control identification number, request identification number, and password located on your Notice of Internet Availability (Notice and Access) Card, received from Issuer Direct Corporation, to both attend the meeting by visiting https://agm.issuerdirect.com/vhc and vote by visiting https://www.iproxydirect.com/VHC.

If it is unclear whether you are an objecting or non-objecting beneficial owner or whether you are a registered stockholder, you may email info@virnetx.com to confirm.

At the Special Meeting, you will be asked to approve an amendment to VirnetX’s Amended and Restated Certificate of Incorporation (the “Charter”) to effect a reverse stock split of all of the shares of our common stock outstanding or held in treasury at a ratio of 1-for-20 (the “Charter Amendment”). Upon obtaining the requisite approval of our stockholders, the Board of Directors will have the discretion to amend the Charter to effect the reverse stock split. The Board of Directors recommends that you vote your shares “FOR” the proposal being considered at the Special Meeting.

As you know, our common stock is currently listed on the New York Stock Exchange (“NYSE”). In order to remain listed on NYSE, our common stock must meet certain listing standards, including an average closing price of at least $1.00 per share over a consecutive 30 trading-day period. On May 12, 2023, we received a notice of deficiency from NYSE stating that if we do not comply with the minimum closing price rules within six months following receipt of the notice, NYSE may delist our common stock. The Board of Directors has determined that, absent an increase in the price of our common stock, our common stock likely will be delisted from NYSE.

We believe that the delisting of our common stock would adversely affect VirnetX and its stockholders. Among other things, we believe that delisting may negatively impact the liquidity, marketability and trading price of our common stock. The Board of Directors has determined that a reverse stock split would help regain compliance with NYSE’s minimum price requirement and potentially provide a number of other benefits to VirnetX and its existing stockholders, including, but not limited to, increasing interest by brokers and institutional investors. For these reasons and as described in greater detail in the enclosed proxy statement, the Board of Directors is seeking your approval of the reverse stock split. You should carefully review the information contained in the proxy statement before making a decision whether to grant proxies to vote your shares in favor of the proposal set forth in the proxy statement.

On behalf of the Board of Directors, thank you for your continued interest in VirnetX.

NOTICE IS HEREBY GIVEN that a Special Meeting of the Stockholders (together with any amendments, postponements or adjournments thereof, the “Special Meeting”) of VirnetX Holding Corporation, a Delaware corporation (“VirnetX,” the “Company,” “we,” “us,” or similar term), will be held on October 24, 2023, at 10:00 a.m., Pacific Time. The Special Meeting will be held in virtual format for the following purposes, as more fully described in the proxy statement accompanying this notice:

The effectiveness or abandonment of the Charter Amendment will be determined by the Board of Directors as permitted under Section 242(c) of the General Corporation Law of the State of Delaware.

Only stockholders of record at the close of business on August 31, 2023 (the “Record Date”), are entitled to vote at the Special Meeting. A list of stockholders entitled to vote at the Special Meeting will be available for inspection at our principal executive offices in accordance with applicable law.

All stockholders as of the Record Date are cordially invited to attend the Special Meeting; your vote is important to us. Whether or not you plan to attend the meeting, please complete, sign, date and return the proxy card or voting instruction card as instructed or vote by telephone or using the internet as instructed on the proxy card or voting instruction card. Returning the proxy card, voting online or voting by telephone will ensure your representation at the meeting, but does not deprive you of your right to attend the meeting and vote your shares. The Proxy Statement explains more about the proxy voting process. Please read it carefully. We look forward to your attendance at the Special Meeting.

The enclosed proxy is solicited on behalf of the Board of Directors of VirnetX Holding Corporation, a Delaware corporation (“VirnetX,” the “Company,” “we,” “us,” or similar term), for use at the Special Meeting of the Stockholders to be held on October 24, 2023 (together with any amendments, postponements or adjournments thereof, the “Special Meeting”). The Special Meeting will be held virtually at 10:00 a.m., Pacific Time. These proxy solicitation materials are first being sent or made available on or about September 11, 2023, to all stockholders entitled to vote at our Special Meeting. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the Special Meeting. Please read it carefully.

Our Board of Directors has set the close of business on August 31, 2023 (the “Record Date”), as the record date for the meeting. Stockholders who owned our common stock at the close of business on the Record Date are entitled to vote at and attend the Special Meeting, with each share entitled to one vote. On the Record Date, there were 71,639,905 shares of our common stock outstanding.

The proposal to be considered and acted upon at the Special Meeting is to approve an amendment to VirnetX’s Amended and Restated Certificate of Incorporation (the “Charter”) to effect, at the discretion of the Board of Directors, a reverse stock split of all of the shares of common stock outstanding or held in treasury, whereby each twenty shares would be combined into one share of common stock (the “Charter Amendment”).

The effectiveness or abandonment of the Charter Amendment will be determined by the Board of Directors as permitted under Section 242(c) of the General Corporation Law of the State of Delaware.

At the Special Meeting, stockholders will also be asked to consider and vote on any other matters that may properly come before the Special Meeting. At this time, our Board of Directors is unaware of any matters, other than those set forth above, that may properly come before the Special Meeting.

Each stockholder is entitled to one vote for each share of common stock held by such stockholder on the Record Date. The holders of a majority of the voting power of the capital stock issued and outstanding and entitled to vote at the Special Meeting, present virtually or represented by proxy, constitutes a quorum at the Special Meeting. The affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and cast for and against the reverse stock split proposal is required to approve the Charter Amendment to effect a reverse stock split. Abstentions, broker non-votes and failure to submit a proxy or vote virtually at the Special Meeting will have no effect on this proposal. However, because this proposal is considered a routine proposal, we do not expect any broker non-votes with respect to this proposal. Abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum for the transaction of business.

We have chosen to provide access to our proxy materials over the Internet. We are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders of record and our beneficial owners. All stockholders will have the option to access the proxy materials on a website referred to in the Notice, or to request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy of the proxy materials are included in the Notice. You may also request to receive the proxy materials in printed form by mail or electronically by e-mail on an ongoing basis.

Our proxy statement is available at https://www.iproxydirect.com/VHC.

If the form of proxy card is properly signed and returned or if you properly follow the instructions for telephone or Internet voting, the shares represented thereby will be voted at the Special Meeting in accordance with the instructions specified thereon. If you sign and return your proxy without specifying how the shares represented thereby are to be voted, the proxy will be voted as recommended by the Board of Directors.

If you are an objecting or non-objecting beneficial owner (that is, if your shares are held at a brokerage), you may revoke or change your proxy in any of the following ways:

If you are a registered stockholder, you may revoke or change your proxy at any time before the Special Meeting in any of the following ways:

We will pay the costs and expenses of soliciting proxies from stockholders. After the date of this Proxy Statement, but prior to the date of the Special Meeting, we may engage a proxy solicitation firm at a cost to be negotiated but paid for by us. If we do, our costs for such services will be within the range of what is customary for companies with similar operations and a similar number of stockholders and are not expected to be material. Certain of our directors, officers, employees and representatives may solicit proxies from our stockholders in person or by telephone, email or other means of communication. Our directors, officers, employees and representatives will not be additionally compensated for any such solicitation, but may be reimbursed for reasonable out-of-pocket expenses they incur. Arrangements will be made with brokerage houses, custodians and other nominees for forwarding of proxy materials to beneficial owners of shares of our common stock held of record by such nominees and for reimbursement of reasonable expenses they incur.

Although we encourage you to read the enclosed proxy statement in its entirety, we included this Question and Answer section to provide some background information and brief answers to questions that you might have about the Special Meeting.

Stockholders who hold shares of the Company through a broker, bank or other nominee receive proxy materials before each stockholder meeting. For your vote to be counted, you will need to communicate your voting decisions to your broker, bank or other nominee before the date of the Special Meeting.

Voting your shares is important to ensure that you have a say in the governance of the Company. Please review the proxy materials and follow the instructions on the proxy card to vote your shares. We hope you will exercise your rights and fully participate as a stockholder in the Company’s future.

The Board of Directors has unanimously adopted resolutions approving and recommending to the stockholders for their approval a proposed Charter Amendment that would, at the discretion of the Board of Directors, effect a reverse stock split of all of the shares of common stock outstanding or held in treasury, whereby each twenty shares would be combined into one share of common stock. VirnetX’s authorized number of shares of common stock would remain at 100,000,000.

The par value per share of common stock would remain unchanged at $0.0001 per share after the reverse stock split. Please see the table below under the heading “Principal Effects of the Reverse Stock Split” for an illustration of the effects of this proposed Charter Amendment (which is referred to in this proxy statement as the “reverse stock split”).

The text of the proposed form of certificate of amendment to the Charter to effect the reverse stock split is attached to this proxy statement as Appendix A. The effectiveness or abandonment of such Charter Amendment will be determined by the Board of Directors.

The Board of Directors has recommended that the proposed Charter Amendment be presented to stockholders for approval. Upon receiving stockholder approval of the proposed Charter Amendment, the Board of Directors will have the sole discretion to elect, as it determines to be in the best interests of VirnetX and its stockholders, whether to effect the reverse stock split. As described in greater detail below, the reverse stock split is proposed to be effected to increase the price of the common stock to, among other things, meet the $1.00 minimum closing price requirement for continued listing on NYSE.

If the Board of Directors determines to effect the reverse stock split by causing the certificate of amendment to the Charter to be filed with the Secretary of State of the State of Delaware, the Charter would be amended accordingly. Approval of the reverse stock split will authorize the Board of Directors in its discretion to effectuate the reverse stock split. As noted, the Board of Directors will have the discretion to abandon the reverse stock split if it no longer believes it to be in the best interests of VirnetX and its stockholders, including if the Board of Directors determines that the reverse stock split will not impact VirnetX’s ability to meet the continued listing requirements of NYSE, if such objective is no longer necessary or desirable, or for any other reason in the business judgment and discretion of the Board of Directors. VirnetX currently expects that the Board of Directors will cause VirnetX to effect the reverse stock split as soon as practicable after the receipt of the requisite stockholder approval.

If the Board of Directors elects to effect the reverse stock split following stockholder approval, the number of issued and outstanding shares of common stock would be reduced in accordance with the reverse stock split ratio. Except for adjustments that may result from the treatment of fractional shares, each stockholder will hold the same percentage of the outstanding common stock immediately following the reverse stock split as such stockholder held immediately prior to the reverse stock split. As described in greater detail below, as a result of the reverse stock split, stockholders who hold less than twenty shares of common stock will no longer be stockholders of VirnetX on a post-split basis.

The Board of Directors, with input from management, regularly reviews and evaluates VirnetX’s business, strategic plans and prospects, including the performance of the common stock, with the goal of maximizing stockholder value. The Board of Directors has reviewed various paths to maximizing stockholder value, including the review and evaluation of a reverse stock split. After review and discussion, the Board of Directors determined that the proposed reverse stock split is necessary for the continued listing of the common stock on NYSE. In addition, the Board of Directors believes the reverse stock split will provide a number of other benefits to VirnetX and its stockholders, including enhancing the desirability and marketability of the common stock to the financial community and the investing public.

The Board of Directors does not intend for this transaction to be the first step in a series of plans or proposals of a “going private transaction” within the meaning of Rule 13e-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

NYSE Listing. Our common stock is currently listed on NYSE under the symbol “VHC.” Among other requirements, the listing requirements established by NYSE require the common stock to have a minimum average closing price of at least $1.00 per share over a consecutive 30 trading-day period. Pursuant to the NYSE continued listing requirements, if the average closing price of the common stock is not equal to or greater than $1.00 for 30 consecutive trading days, NYSE will send a deficiency notice. We can regain compliance if, during the six-month period following receipt of the NYSE notice, on the last trading day of any calendar month, the Company’s common stock has (i) a closing price per share of at least $1.00 and (ii) a 30 trading-day average closing share price of at least $1.00. In the event that at the expiration of the six-month cure period, both a $1.00 closing share price on the last day of the cure period and a $1.00 average closing share price over the 30 trading-day period ending on the last trading day of the cure period are not attained, NYSE will commence suspension and delisting procedures.

On May 12, 2023, VirnetX received a notice of deficiency from NYSE indicating that if VirnetX does not comply with the minimum closing price rules within six months following receipt of the notice, NYSE may delist the common stock. Consequently, the Board of Directors has determined that, absent approval by stockholders of the reverse stock split, VirnetX will likely be unable to meet the $1.00 minimum closing price requirement for continued listing on NYSE.

In the event the common stock is no longer eligible for continued listing on NYSE, VirnetX would be forced to seek alternative options to remain listed on the NYSE, including to become traded on the OTC Bulletin Board or on the “pink sheets.” These alternative markets are generally considered to be less efficient than and not as broad as NYSE and therefore less desirable. Accordingly, the Board of Directors believes delisting of the common stock would likely have a negative impact on the liquidity and market price of the common stock and may increase the spread between the “bid” and “asked” prices quoted by market makers.

The Board of Directors has considered the potential harm to VirnetX of a delisting from NYSE and believes that delisting could, among other things, adversely affect (i) the trading price of the common stock and (ii) the liquidity and marketability of shares of the common stock. This could reduce the ability of holders of the common stock to purchase or sell shares of common stock as quickly and as inexpensively as they have done historically. Delisting could also adversely affect VirnetX’s relationships with partners and customers who may perceive VirnetX’s business less favorably, which would have a detrimental effect on VirnetX’s relationships with these entities.

Furthermore, if the common stock was no longer listed on NYSE, it may reduce VirnetX’s access to capital and cause VirnetX to have less flexibility in responding to VirnetX’s capital requirements. Certain institutional investors may also be less interested or prohibited from investing in the common stock, which may cause the market price of the common stock to decline.

In addition, VirnetX would no longer be deemed a “covered security” under Section 18 of the Securities Act of 1933, as amended, and therefore would lose its exemption from state securities regulations. As a result, VirnetX would need to comply with various state securities laws with respect to issuances of its securities, including equity award grants to employees. As a public company, VirnetX would not have the benefit of certain exemptions applicable to privately-held entities, which would make granting equity awards to VirnetX’s employees more difficult.

Potential Increased Investor Interest. The Board of Directors believes that the reverse stock split will provide a number of benefits to VirnetX and its existing stockholders, which may lead to an increase in investor interest, including:

Other Potential Benefits. The Board of Directors believes that a higher stock price would help VirnetX attract and retain employees and other service providers. It is the view of the Board of Directors that some potential employees and service providers are less likely to work for a company with a low stock price, regardless of the size of the company’s market capitalization. Accordingly, if the reverse stock split successfully increases the per share price of the common stock, the Board of Directors believes this increase will enhance VirnetX’s ability to attract and retain employees and service providers.

There are certain risks associated with a reverse stock split, including those described below, and we cannot accurately predict or assure you that the reverse stock split will produce or maintain the desired results. However, our Board of Directors believes that the benefits to us and our stockholders outweigh the risks and recommends that you vote in favor of the reverse stock split proposal.

The Board of Directors expects that a reverse stock split of the common stock outstanding or held in treasury will increase the market price of the common stock. However, VirnetX cannot be certain whether the reverse stock split would lead to a sustained increase in the trading price or the trading market for the common stock. The history of similar stock split combinations for companies in like circumstances is varied. There is no assurance that:

The market price of the common stock will also be based on VirnetX’s performance and other factors, some of which are unrelated to the number of shares outstanding. If the reverse stock split is consummated and the trading price of the common stock declines, the percentage decline as an absolute number and as a percentage of VirnetX’s overall market capitalization may be greater than would occur in the absence of the reverse stock split. Furthermore, the liquidity of the common stock could be adversely affected by the reduced number of shares that would be outstanding after the reverse stock split and this could have an adverse effect on the market price of the common stock. If the market price of the common stock declines subsequent to the effectiveness of the reverse stock split, this will detrimentally impact VirnetX’s market capitalization and the market value of VirnetX’s public float.

The reverse stock split may result in some stockholders owning “odd lots” of less than 100 shares of common stock on a post-split basis. These odd lots may be more difficult to sell, or require greater transaction costs per share to sell, than shares in “round lots” of even multiples of 100 shares.

Based on the reverse stock split ratio of 1-for-20, certain stockholders might be fully cashed out in the reverse stock split and thus, after the reverse stock split takes effect, such stockholders would no longer have any equity interest in VirnetX and therefore would not participate in our future earnings or growth, if any.

There can be no assurance that the reverse stock split will result in a per share price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our common stock may not necessarily improve.

Assuming the Board of Directors exercises its discretion to effect the reverse stock split, the reverse stock split will become effective as of the date and time (the “Effective Date”) indicated in the certificate of amendment to the Charter filed with the Secretary of State of the State of Delaware in accordance with the General Corporation Law of Delaware, without any further action on the part of stockholders and without regard to the date that any stockholder physically surrenders the stockholder’s certificates representing pre-split shares of common stock for certificates representing post-split shares, and the common stock will begin trading on a post-split basis as soon as the market opens on the next day. The Board of Directors, in its discretion, may delay or decide against effecting the reverse stock split and the filing of the certificate of amendment to the Charter to effect the reverse stock split without resoliciting stockholder approval. It is currently anticipated that if stockholder approval is obtained for the reverse stock split described in this proposal, the Board of Directors would cause VirnetX to effect the foregoing as soon as practicable after obtaining such stockholder approval.

After the Effective Date, each stockholder will own a reduced number of shares of the common stock. However, VirnetX expects that the market price of the common stock immediately after the reverse stock split will increase substantially above the market price of the common stock immediately prior to the reverse stock split. The proposed reverse stock split will be effected simultaneously for all of the common stock, and the ratio for the reverse stock split will be the same for all of the common stock. The reverse stock split will affect all stockholders uniformly and will not affect any stockholder’s percentage ownership interest in VirnetX (except to the extent that the reverse stock split would result in any of the stockholders owning a fractional share as described below). Likewise, the reverse stock split will affect all holders of outstanding equity awards under the Equity Plan substantially the same (except to the extent that the reverse stock split would result in a fractional interest as described below). Proportionate voting rights and other rights and preferences of the holders of common stock will not be affected by the proposed reverse stock split (except to the extent that the reverse stock split would result in any stockholders owning a fractional share as described below). For example, a holder of 2% of the voting power of the outstanding shares of common stock immediately prior to the reverse stock split would continue to hold approximately 2% of the voting power of the outstanding shares of common stock immediately after the reverse stock split. The number of stockholders of record also will not be affected by the proposed reverse stock split (except to the extent that the reverse stock split would result in any stockholders owning only a fractional share as described below).

The par value per share of the common stock will remain unchanged at $0.0001 per share after the reverse stock split. Based on the number of shares of the common stock issued or reserved for issuance under the Equity Plan as of August 11, 2023, 610,823 shares of common stock will be issued or reserved for issuance following the reverse stock split, leaving 95,807,182 shares unissued and unreserved for issuance.

The proposed reverse stock split will reduce the number of shares of common stock available for issuance under the Equity Plan. All shares of common stock subject to outstanding equity awards (including restricted stock units, stock options and restricted stock) under the Equity Plan and the number of shares of common stock which have been authorized for issuance under the Equity Plan but as to which no equity awards have yet been granted or which have been returned to the Equity Plan upon cancellation or expiration of such equity awards will be combined on the Effective Date into one-twentieth of the number of such shares immediately preceding the reverse stock split (rounded down to avoid fractional interests). In addition, the exercise price of outstanding stock options will be adjusted to twenty times the exercise price specified before the reverse stock split, rounded up to the nearest whole cent. This will result in approximately the same aggregate price being required to be paid as immediately preceding the reverse stock split. No fractional shares will be issued pursuant to the Equity Plan following the reverse stock split. Therefore, if the number of shares subject to an outstanding equity award immediately before the reverse stock split is not evenly divisible so that the reverse stock split would otherwise result in a fractional interest, the number of shares of common stock issuable pursuant to such equity award will be rounded down to the nearest whole share.

The table below sets forth, as of August 11, 2023 and for illustrative purposes only, certain effects of the Charter Amendment, including (without giving effect to the treatment of fractional shares) (1) the approximate percentage

reduction in the outstanding number of shares of common stock, (2) the approximate number of shares of common stock that would be (i) authorized, (ii) issued and outstanding, (iii) authorized but reserved for issuance upon exercise of an outstanding warrant, (iv) authorized but reserved for issuance upon exercise/release of outstanding equity awards pursuant to the Equity Plan, (v) authorized but reserved for issuance under the Equity Plan (but not subject to exercise/release of outstanding equity awards), and (vi) authorized but not issued or outstanding, or reserved for issuance under the Equity Plan, and (3) the approximate percentage of authorized shares not issued or outstanding, or reserved for issuance under the Equity Plan:

As illustrated in the above table, the reverse stock split will reduce the number of outstanding shares of our common stock without a proportionate reduction in the number of shares of authorized but unissued common stock pursuant to the Charter. This provides a larger number of authorized shares available to be issued in the future without further stockholder action, except as may be required by applicable laws or the rules of any stock exchange on which our common stock is listed. The issuance of additional shares of our common stock may have a dilutive effect on the ownership of existing stockholders.

The proposed reduction in the total number of shares of the common stock for the 1-for-20 reverse stock split is designed to maintain approximately the same proportion of the total number of authorized shares reserved for issuance under the Equity Plan, following the reverse stock split.

If the proposed reverse stock split is implemented, it may increase the number of stockholders who own “odd lots” of less than 100 shares of common stock. Brokerage commissions and other costs of transactions in odd lots may be higher than the costs of transactions of more than 100 shares of common stock.

The common stock is currently registered under Section 12(b) of the Exchange Act, and VirnetX is subject to the periodic reporting and other requirements of the Exchange Act. The proposed reverse stock split will not affect the registration of the common stock under the Exchange Act. If the proposed reverse stock split is implemented, the common stock will continue to be reported on NYSE under the symbol “VHC.”

The proposed Charter Amendment will not change the terms of the common stock. After the reverse stock split, the shares of the common stock will have the same voting rights and rights to dividends and distributions and will be identical in all other respects to the common stock now authorized. Each stockholder’s percentage ownership of the new common stock will not be altered except for the effect of eliminating fractional shares (which is discussed in more detail below). The common stock issued pursuant to the reverse stock split will remain fully paid and non-assessable. Following the reverse stock split, VirnetX will continue to be subject to the periodic reporting requirements of the Exchange Act.

No scrip or fractional shares would be issued if, as a result of the reverse stock split, a registered stockholder would otherwise become entitled to a fractional share. Instead, VirnetX would pay to the registered stockholder, in cash, the value of any fractional share interest arising from the reverse stock split (without interest). The cash

payment would equal the fraction to which the stockholder would otherwise be entitled multiplied by the closing price of the common stock as reported on NYSE as of the Effective Date. Exact procedures for the cash payment will be determined by the officers of the Company. No transaction costs would be assessed to stockholders for the cash payment. Stockholders would not be entitled to receive interest for the period of time between the Effective Date and the date payment is made for their fractional shares. The ownership of a fractional interest will not give the holder thereof any voting, dividend or other rights except to receive payment as described herein. This cash payment merely represents a mechanical rounding off of the fractions in the exchange. For a discussion of the treatment of any fractional interest that may arise as a result of the reverse stock split relating to equity awards under the Equity Plan, please see the section below under the heading “Effect of the Reverse Stock Split on Equity Awards.”

As a result of the reverse stock split, stockholders who hold less than twenty shares of common stock will no longer be stockholders of VirnetX on a post-split basis. In other words, any holder of nineteen or fewer shares of common stock prior to the effectiveness of the reverse stock split would only be entitled to receive cash for the fractional share of common stock such stockholder would hold on a post-split basis. The actual number of stockholders that will be eliminated will depend on the actual number of stockholders holding less than twenty shares of common stock on the Effective Date. Reducing the number of post-split stockholders, however, is not the purpose of the reverse stock split.

If you do not hold sufficient shares of pre-split common stock to receive at least one post-split share of common stock and you want to hold common stock after the reverse stock split, you may do so by taking either of the following actions far enough in advance so that it is completed before the reverse stock split is effected:

Stockholders should be aware that, under the escheat laws of the various jurisdictions where stockholders reside, where VirnetX is domiciled and where the funds for fractional shares would be deposited, sums due to stockholders in payment for fractional shares that are not timely claimed after the effective time may be required to be paid to the designated agent for each such jurisdiction. Thereafter, stockholders otherwise entitled to receive such funds may have to seek to obtain them directly from the state to which they were paid.

On the Effective Date, the proposed reverse stock split will reduce the number of shares of common stock available for issuance under the Equity Plan. All shares of common stock subject to outstanding equity awards (including restricted stock units, stock options, and restricted stock) under the Equity Plan and the number of shares of common stock which have been authorized for issuance under the Equity Plan but as to which no equity awards have yet been granted or which have been returned to the Equity Plan upon cancellation or expiration of such equity awards will be combined on the Effective Date into one-twentieth of the number of such shares immediately preceding the reverse stock split (rounded down to avoid fractional interests). In addition, the exercise price of outstanding stock options will be adjusted to twenty times the exercise price specified before the reverse stock split, rounded up to the nearest whole cent. This will result in approximately the same aggregate price being required to be paid as immediately preceding the reverse stock split. No fractional shares will be issued pursuant to the Equity Plan following the reverse stock split. Therefore, if the number of shares subject to an outstanding equity award immediately before the reverse stock split is not evenly divisible so that the reverse stock split would otherwise result in a fractional interest, the number of shares of common stock issuable pursuant to such equity award will be rounded down to the nearest whole share.

In 2020, we issued a warrant for the purchase of 25,000 shares of common stock at an exercise price of $5.75 per share, exercisable on the date of grant, expiring in April 2025. Shares issuable upon exercise of this warrant are also adjustable in a reverse stock split. Where outstanding shares are combined into a lesser number of shares, the number of shares issuable upon exercise of the warrant prior to the combination will be proportionately decreased, and the exercise price will be proportionately increased. No fractional shares shall be issued upon the exercise of the rights under the warrant. In lieu of such fractional share to which the holder of the warrant would otherwise be entitled due to any partial exercise, the holder will receive a cash payment equal to the exercise price of the warrant multiplied by such fraction.

Even after the reverse stock split is approved by stockholders at the Special Meeting, the Board of Directors will have the discretion to abandon the reverse stock split if it does not believe it to be in the best interests of VirnetX and the stockholders. Such determination will be based upon certain factors, including existing and expected marketability and liquidity of the common stock, prevailing market conditions, the likely effect on the market price of the common stock and the ability and desirability of VirnetX to satisfy the continued listing requirements for NYSE and such other considerations as the Board of Directors, in its discretion, determines. Notwithstanding approval of the reverse stock split by the stockholders, the Board of Directors may, in its sole discretion, abandon the proposed Charter Amendment and determine prior to the effectiveness of any filing with the Secretary of State of the State of Delaware not to effect the reverse stock split, as permitted under Section 242(c) of the General Corporation Law of Delaware.

As soon as practicable after the Effective Date, stockholders will be notified that the reverse stock split has been effected. VirnetX’s transfer agent will act as “exchange agent” for purposes of implementing the exchange of stock certificates. If any of your shares are held in certificated form (that is, you do not hold all of your shares electronically in book-entry form), you will receive a letter of transmittal from VirnetX’s exchange agent as soon as practicable after the Effective Date, which will contain instructions on how to obtain post-split shares. You must complete, execute and submit to the exchange agent the letter of transmittal in accordance with its instructions and surrender your stock certificate(s) formerly representing shares of stock prior to the reverse stock split (or an affidavit of lost stock certificate containing an indemnification of VirnetX for claims related to such lost stock certificate). Upon receipt of your properly completed and executed letter of transmittal and your stock certificate(s), you will be issued the appropriate number of shares of common stock (including legends, if appropriate) electronically in book-entry form, as determined by VirnetX. This means that, instead of receiving a new stock certificate, you may receive a direct registration statement that indicates the number of post-split shares you own in book-entry form. If you are entitled to payment in lieu of any fractional share interest, payment will be made as described above under the heading “Treatment of Fractional Shares.” No direct registration statements or payments in lieu of fractional shares will be issued to a stockholder until such stockholder has properly completed and executed a letter of transmittal and surrendered such stockholder’s outstanding certificate(s) to the exchange agent. If you hold any or all of your shares electronically in book-entry form, please see the section below under the heading “Effect on Registered Stockholders.”

STOCKHOLDERS SHOULD NOT DESTROY ANY PRE-SPLIT STOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL THEY ARE REQUESTED TO DO SO.

In connection with the reverse stock split, the common stock will change its current CUSIP number.

Stockholders holding common stock through a bank, broker or other nominee should note that such banks, brokers or other nominees may have different procedures for processing the reverse stock split than those that would be put in place by VirnetX for registered stockholders that hold such shares directly, and their procedures may result, for example, in differences in the precise cash amounts being paid by such nominees in lieu of a fractional share. If you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact your bank, broker or nominee.

VirnetX’s registered stockholders may hold some or all of their shares electronically in book-entry form under the direct registration system for securities. These stockholders will not have stock certificates evidencing their ownership of the common stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts.

The par value per share of the common stock would remain unchanged at $0.0001 per share after the reverse stock split. As a result, on the Effective Date, the par value per share on VirnetX’s balance sheet attributable to the common stock will be reduced proportionally from its present amount, and the additional paid in capital account shall be credited with the amount by which the par value per share is reduced. The per share common stock net income or loss and net book value will be increased because there will be fewer shares of common stock outstanding. VirnetX does not anticipate that any other accounting consequences would arise as a result of the reverse stock split.

Stockholders are not entitled to appraisal rights under Delaware law with respect to the proposed Charter Amendment to effect the reverse stock split.

The following discussion is a summary of certain material U.S. federal income tax consequences of the reverse stock split. This discussion is included for general information purposes only and does not purport to address all aspects of U.S. federal income tax law that may be relevant to stockholders in light of their particular circumstances. Further, this discussion does not address any state, local or non-U.S. tax consequences of the reverse stock split. This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), and current Treasury Regulations, court decisions and published rulings and administrative pronouncements of the Internal Revenue Service (the “IRS”) in effect as of the date of this proxy statement, all of which are subject to change, possibly on a retroactive basis, and any such change could affect the continuing validity of this discussion. We have not sought, and will not seek, any ruling from the IRS or an opinion of tax counsel with respect to the matters discussed herein. The discussion below regarding the U.S. federal income tax consequences of the reverse stock split is not binding on the IRS or the courts.

All stockholders are urged to consult with their own tax advisors with respect to the tax consequences of the reverse stock split. This summary assumes that the pre-reverse stock split shares were, and the post-reverse stock split shares will be, held as a “capital asset,” as defined in Section 1221 of the Code. This discussion does not address all U.S. federal income tax consequences relevant to the particular circumstances of a stockholder. In addition, it does not address the tax consequences to stockholders who are subject to special tax rules, including:

As used herein, the term “U.S. holder” means a holder that is, for U.S. federal income tax purposes:

If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

In addition, the following discussion does not address the tax consequences of transactions effectuated before, after or at the same time as the reverse stock split, whether or not they are in connection with the reverse stock split.

STOCKHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAX JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

U.S. Federal Income Tax Consequences of the Reverse Stock Split. The reverse stock split is intended to constitute a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code for U.S. federal income tax purposes. If so treated, in general, other than the cash payments for fractional shares of common stock discussed above, no gain or loss should be recognized by a stockholder upon the exchange of pre-reverse stock split shares for post-reverse stock split shares. The aggregate tax basis of the post-reverse stock split shares will be the same as the aggregate tax basis of the pre-reverse stock split shares exchanged in the reverse stock split, reduced by any amount allocable to a fractional share for which cash is received. A stockholder’s holding period in the post-reverse stock split shares will include the period during which the stockholder held the pre-reverse stock split shares exchanged in the reverse stock split. Special tax basis and holding period rules may apply to holders that acquired different blocks of stock at different prices or at different times. Stockholders should consult their own tax advisors as to the applicability of these special rules to their particular circumstances.

Cash in Lieu of Fractional Shares. In general, the receipt of cash by a U.S. holder instead of a fractional share will be treated as if the U.S. holder received the fractional share pursuant to the reverse stock split and then sold such

fractional share for cash, which will result in a taxable gain or loss to such holder for U.S. federal income tax purposes. The amount of the taxable gain or loss to the U.S. holder will be determined based upon the difference between the amount of cash received by such holder and the portion of the basis of the pre-reverse stock split shares allocable to such fractional interest. The gain or loss recognized will constitute capital gain or loss and will constitute long-term capital gain or loss if the holder’s holding period is greater than one year as of the Effective Date. The deductibility of net capital losses by individuals and corporations is subject to limitations. U.S. holders are advised to consult their tax advisors regarding the tax treatment of their receipt of cash in lieu of a fractional share of common stock pursuant to the reverse stock split.

Information Reporting and Backup Withholding. A U.S. holder may be subject to information reporting with respect to any cash received in exchange for a fractional share interest in a new share in the reverse stock split. U.S. holders who are subject to information reporting and who do not provide a correct taxpayer identification number and other required information (e.g., by submitting a properly completed IRS Form W-9) may also be subject to backup withholding, at the current applicable rate of 24%. Any amount withheld under such rules is not an additional tax and may be refunded or credited against the U.S. holder’s U.S. federal income tax liability, provided that the required information is properly furnished in a timely manner to the Internal Revenue Service.

The tax treatment of a stockholder may vary depending upon the particular facts and circumstances of such stockholder. Each stockholder is urged to consult with such stockholder’s own tax advisor with respect to the tax consequences of the reverse stock split.

The affirmative vote of a majority of the shares of our common stock present or represented by proxy and entitled to vote at the Special Meeting on this matter, is required for approval of the reverse stock split. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on this proposal. Broker non-votes and abstentions have no effect on the proposal. However, because this proposal is a considered a routine proposal, we do not expect any broker non-votes with respect to this proposal.

The Board of Directors recommends that the stockholders vote “FOR” this proposal.

The following table sets forth the beneficial ownership of our Common Stock as of August 11, 2023 by:

This table lists applicable percentage ownership based on 71,639,905 shares of Common Stock outstanding as of August 11, 2023. Securities that a person has a right to acquire pursuant to SEC rules within 60 days of August 11, 2023 are deemed to be beneficially owned by the persons holding these securities for the purpose of computing the number of shares owned by, and percentage ownership of, that person, but are not treated as outstanding for the purpose of computing any other person’s number of shares owned or ownership percentage.

Except as indicated by footnote, and subject to applicable community property laws, each person identified in the table possesses, to the best of our knowledge, sole voting and investment power with respect to all capital stock shown to be held by that person. The address of each executive officer and director, unless indicated otherwise, is c/o VirnetX Holding Corporation, P.O. Box 439, Zephyr Cove, NV 89448.

You may read and copy any reports, statements or other information that we file with the SEC at their public reference room at the following location: 100 F Street, N.E., Room 1580, Washington, DC 20549. You may also obtain copies of those documents at prescribed rates by writing to the Public Reference Section of the SEC at that address. Please call the SEC at (800) SEC-0330 for further information on the public reference room. These SEC filings are also available to the public from commercial document retrieval services and at www.sec.gov.

You may obtain any of the documents we file with the SEC, without charge, by requesting them in writing or by telephone from us at the following address:

If you would like to request documents from us, please do so as soon as possible to receive them before the Special Meeting. If you request any documents from us, we will mail them to you by first class mail, or another equally prompt method. Please note that all of our documents that we file with the SEC are also promptly available through the Investor Relations section of our website, https://ir.virnetx.com/.

The reports, statements or other information that we file with the SEC and the information included on our website do not contain information that is material for the exercise of prudent judgment in regard to the proposal to be acted upon and thus are not incorporated by reference into this proxy statement.

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROXY STATEMENT TO VOTE ON THE PROPOSAL. VIRNETX HAS NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT.

THIS PROXY STATEMENT IS DATED SEPTEMBER 11, 2023. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN SUCH DATE, AND THE SENDING OR MAKING AVAILABLE OF THIS PROXY STATEMENT TO STOCKHOLDERS SHALL NOT CREATE ANY IMPLICATION TO THE CONTRARY.

Representatives of Farber Hass Hurley LLP, our principal accountants for the current year and for the most recently completed fiscal year, are expected to be present at the Special Meeting, will have the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.

VirnetX knows of no other matters to be submitted at the Special Meeting. If any other matters properly come before the Special Meeting, it is the intention of the proxyholders named in the enclosed form of proxy to vote the shares they represent according to their best judgment.

VirnetX Holding Corporation, a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies that:

IN WITNESS WHEREOF, VirnetX Holding Corporation has caused this Certificate of Amendment to the Amended and Restated Certificate of Incorporation to be signed this [•] day of [•], 2023.