VirnetX Holding (VHC) 10-Q 10 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 07, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	VirnetX Holding Corp
Entity Central Index Key	0001082324
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		68,104,001
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 5,227	$ 7,611
Investments available for sale	3,033	1,803
Accounts receivables	8	6
Prepaid expenses and other current assets	599	718
Total current assets	8,867	10,138
Other assets	1,924	1,604
Property and equipment, net	7	9
Total assets	10,798	11,751
Current liabilities:
Accounts payable and accrued liabilities	1,279	1,050
Accrued payroll and related expenses	223	277
Other liabilities, current	171	140
Income tax liability	395	396
Total current liabilities	2,068	1,863
Other liabilities	0	0
Total liabilities	2,068	1,863
Commitments and contingencies (Note 4)
Stockholders' equity:
Preferred stock, par value $0.0001 per share Authorized: 10,000,000 shares at March 31, 2019 and December 31, 2018, Issued and outstanding: 0 shares at March 31, 2019 and December 31, 2018	0	0
Common stock, par value $0.0001 per share Authorized: 100,000,000 shares at March 31, 2019 and December 31, 2018, Issued and outstanding: 68,104,001 shares and 66,879,847 shares, at March 31, 2019 and December 31, 2018, respectively	7	7
Additional paid-in capital	212,766	208,317
Accumulated deficit	(204,030)	(198,422)
Accumulated other comprehensive loss	(13)	(14)
Total stockholders' equity	8,730	9,888
Total liabilities and stockholders' equity	$ 10,798	$ 11,751

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
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)	68,104,001	66,879,847
Common stock, shares outstanding (in shares)	68,104,001	66,879,847

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) [Abstract]
Revenue	$ 8	$ 6
Operating expense:
Research and development	936	1,005
Selling, general and administrative	4,706	6,609
Total operating expense	5,642	7,614
Loss from operations	(5,634)	(7,608)
Interest income, net	28	8
Loss before taxes	(5,606)	(7,600)
Provision for income taxes	(2)	(5)
Net loss	$ (5,608)	$ (7,605)
Basic and diluted loss per share (in dollars per share)	$ (0.08)	$ (0.13)
Weighted average shares outstanding basic and diluted (in shares)	67,596	60,150

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) [Abstract]
Net loss	$ (5,608)	$ (7,605)
Other comprehensive gain (loss), net of tax:
Change in equity adjustment from foreign currency translation, net of tax	0	0
Change in unrealized gain (loss) on investments, net of tax	1	1
Total other comprehensive gain (loss) net of tax	1	1
Comprehensive loss	$ (5,607)	$ (7,604)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]	Total
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of accounting change | ASC 606 [Member]			$ 2,500		$ 2,500
Balance at Dec. 31, 2017	$ 6	$ 177,076	(175,516)	$ (13)	1,553
Balance (in shares) at Dec. 31, 2017	59,051,978
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock issued for cash, net		6,830			6,830
Stock issued for cash, net (in shares)	1,751,689
Stock-based compensation		887			887
Stock issued for vested RSUs (in shares)	20,000
Comprehensive income:
Net Loss			(7,605)		(7,605)
Other comprehensive income (loss), net of tax				1	1
Comprehensive loss					(7,604)
Balance at Mar. 31, 2018	$ 6	184,793	(180,621)	(12)	4,166
Balance (in shares) at Mar. 31, 2018	60,823,667
Balance at Dec. 31, 2018	$ 7	208,317	(198,422)	(14)	9,888
Balance (in shares) at Dec. 31, 2018	66,879,847
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock issued for cash, net		2,848			2,848
Stock issued for cash, net (in shares)	560,338
Stock-based compensation		785			785
Exercise of options		816			816
Exercise of options (in shares)	663,816
Comprehensive income:
Net Loss			(5,608)		(5,608)
Other comprehensive income (loss), net of tax				1	1
Comprehensive loss					(5,607)
Balance at Mar. 31, 2019	$ 7	$ 212,766	$ (204,030)	$ (13)	$ 8,730
Balance (in shares) at Mar. 31, 2019	68,104,001

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2019	Mar. 31, 2018
Minimum [Member]
Stock issued for cash, net (in dollars per share)	$ 5	$ 4
Maximum [Member]
Stock issued for cash, net (in dollars per share)	$ 5.42	$ 4.04

CONDENSED CONSOLIDATED STATEM_5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net loss	$ (5,608)	$ (7,605)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	2	6
Stock-based compensation	785	887
Changes in assets and liabilities:
Accounts receivables	(2)	(6)
Prepaid expenses and other assets	(201)	(197)
Other liabilities	31	0
Accounts payable	229	3,331
Related party payable	0	258
Accrued payroll and related expenses	(54)	(1,970)
Income tax liability	(1)	5
Deferred revenue	0	2
Net cash used in operating activities	(4,819)	(5,289)
Cash flows from investing activities:
Purchase of investments	(2,283)	(282)
Proceeds from sale or maturity of investments	1,054	1,154
Net cash (used in) provided by investing activities	(1,229)	872
Cash flows from financing activities:
Proceeds from exercise of options	816	0
Proceeds from sale of common stock	2,848	6,830
Payments of taxes on restricted stock units	0	(4)
Net cash provided by financing activities	3,664	6,826
Net (decrease) increase in cash and cash equivalents	(2,384)	2,409
Cash and cash equivalents, beginning of period	7,611	3,135
Cash and cash equivalents, end of period	5,227	5,544
Cash paid for income taxes	2	0
ASC 606 [Member]
Non-Cash Transactions:
Deferred revenue reclassified to retained earnings - ASC 606 adoption	$ 0	$ 2,500

Business Description and Basis

Business Description and Basis of Presentation	3 Months Ended
	Mar. 31, 2019
Business Description and Basis of Presentation [Abstract]
Business Description and Basis of Presentation	Note 1 — Business Description and Basis of Presentation VirnetX Holding Corporation, which we refer to as “we”, “us”, “our”, “the Company” or “VirnetX”, is engaged in the business of commercializing a portfolio of patents. We seek to license our technology, including GABRIEL Connection Technology™, to various original equipment manufacturers, or OEMs, that use our technologies in the development and manufacturing of their own products within the IP-telephony, mobility, fixed-mobile convergence and unified communications markets. Prior to 2012 our revenue was limited to an insignificant amount of software royalties pursuant to the terms of a single license agreement. Since 2012 we had revenues from settlements of patent infringement disputes whereby we received consideration for past sales of licensees that utilized our technology, where there was no prior patent license agreement, as well as license agreement revenues from settlements providing licensing for the continued use of our technology (see “Revenue Recognition”). Our portfolio of intellectual property is the foundation of our business model. We currently own approximately 185 total patents and pending applications, including 70 U.S. patents/patent applications and 115 foreign patents/validations/pending applications. Our patent portfolio is primarily focused on securing real-time communications over the Internet, as well as related services such as the establishment and maintenance of a secure domain name registry. Our patented methods also have additional applications in the key areas of device operating systems and network security for Cloud services, Machine-to-Machine (“M2M”), communications in areas including “Smart City,” “Connected Car” and “Connected Home.” All our U.S. and foreign patents and pending patent applications relate generally to securing communications over the internet and as such, cover all our technology and other products. Our issued U.S. and foreign patents expire at various times during the period from 2019 to 2024. Some of our issued patents and pending patent applications were acquired by our principal operating subsidiary, VirnetX, Inc., from Leidos, Inc. (“Leidos”) (f/k/a Science Applications International Corporation, or SAIC) in 2006 and we are required to make payments to Leidos based on cash or certain other values generated from those patents in certain circumstances. The amount of such payments depends upon the type of value generated and certain categories are subject to maximums and other limitations.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2019
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 March 31, 2019, the Condensed Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018, the Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2019 and 2018, the Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2019 and 2018,and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018 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 March 31, 2019, our results of operations for the three months ended March 31, 2019 and 2018, and our cash flows for the three months ended March 31, 2019 and 2018. 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, 2018, filed with the SEC on March 18, 2019. Use of Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP. In doing so, we must 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 our accounting estimates are reasonably likely to occur. 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, at the time they are made, 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. Reclassifications Certain prior period amounts were reclassified to conform to the current year’s presentation. None of these reclassifications had an impact on reported operating expenses, operating income or net income for any of the periods presented. 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. Leases The Company determines if an arrangement is a lease at inception in accordance with ASC Topic 842. Operating lease ROU assets are included in other assets on the Condensed Consolidated Balance Sheet. 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. Revenue Recognition Most of our revenue is derived from licensing and royalty fees from contracts with customers which often span several years. We account for revenue in accordance with 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 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. Earnings (Loss) Per Share Basic earnings (loss) per share are computed by dividing earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share are 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. 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. A portion of those balances are insured by the Federal Deposit Insurance Corporation. During the three months ended March 31, 2019 we had funds which were uninsured. We do not believe that we are subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships with major financial institutions. We have not experienced any losses on our deposits of cash and cash equivalents. Other Assets Other assets at March 31, 2019 includes a right-of-use asset (“ROU”) related to a facility lease for corporate promotional and marketing purposes. The facility lease was paid in full at inception and the ROU is being amortized over the 10-year term of the lease. Other assets also includes an ROU related to our office operating lease which expires in October 2019 (See Note 8). Impairment of Long-Lived Assets On an annual basis, we identify and record impairment losses on long-lived assets when events and changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Recoverability is measured by comparison of the anticipated future net undiscounted cash flows to the related assets’ carrying value. If such assets are considered to be 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. 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: U.S. agency securities 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 March 31, 2019 and December 31, 2018. March 31, 2019 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Investments Available for Sale Cash $ 3,867 $ — $ — $ 3,867 $ 3,867 $ — Level 1: Mutual funds 1,074 — — 1,074 1,074 — U.S. agency securities 3,318 1 — 3,319 286 3,033 4,392 1 — 4,393 1,360 3,033 Total $ 8,259 $ 1 $ — $ 8,260 $ 5,227 $ 3,033 December 31, 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Investments Available for Sale Cash $ 5,048 $ — $ — $ 5,048 $ 5,048 $ — Level 1: Mutual funds 1,107 — — 1,107 1,107 — U.S. agency securities 3,259 — — 3,259 1,456 1,803 4,366 — — 4,366 2,563 1,803 Total $ 9,414 $ — $ — $ 9,414 $ 7,611 $ 1,803 New Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326). The purpose of this ASU is to require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. We are evaluating the impact this guidance will have on our financial position and statement of operations. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) as amended and supplemented by subsequent ASU’s, (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize right-of-use (“ROU”) assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. We adopted this ASU on January 1, 2019 which had no impact on our consolidated statement of operations or cash flow (See Note 8 for impact on our Condensed Consolidated Balance Sheets).

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2019
Income Taxes [Abstract]
Income Taxes	Note 3 — Income Taxes We had income tax expense of $2 and $5 for the three months ended March 31, 2019 and 2018, respectively, as a result of minimum tax payments. During the three-month period ended March 31, 2019 and 2018, we had net operating losses (“NOLs”) which generated deferred tax assets for NOL carry-forwards. We provided valuation allowances against the net deferred tax assets including the deferred tax assets for NOL carryforwards. Valuation allowances provided for our net deferred tax assets increased by approximately $1,821 and $4,796 for the three months ended March 31, 2019 and 2018, respectively. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets at March 31, 2019 will not be fully realizable. Accordingly, management has maintained a full valuation allowance against its net deferred tax assets at March 31, 2019. The valuation allowance carried against our net deferred tax assets was approximately $38,000 and $36,000 at March 31, 2019 and December 31, 2018, respectively. At March 31, 2019, we have federal and state net operating loss carry-forwards of approximately $120,000 and $110,000, respectively, expiring beginning in 2027 and 2028, respectively. Our tax years for 2005 and forward are subject to examination by the U.S. tax authority and various state tax authorities. These years are open due to net operating losses and tax credits remaining unutilized from such years. Our policy is to recognize interest and penalties accrued on uncertain tax positions as a component of income tax expense. As of March 31, 2019, we had accrued immaterial amounts of interest and penalties related to the uncertain tax positions.

Commitments and Related Party T

Commitments and Related Party Transactions	3 Months Ended
	Mar. 31, 2019
Commitments and Related Party Transactions [Abstract]
Commitments and Related Party Transactions	Note 4 — Commitments and Related Party Transactions We lease our offices under an operating lease with a third party which expires in October 2019 (see Note 8). We entered into a 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 $559, and $608 in rental fees and reimbursements to the LLC during the three months ended March 31, 2019 and 2018, 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. We entered into a 12-month non-exclusive agreement with the LLC for use of the plane at a rate of $8 per flight hour, with no minimum usage requirement. The agreement contains other terms and conditions normal in such transactions and can be cancelled by either us or the LLC with 30 days’ notice. The agreement renews on an annual basis unless terminated by either party. Neither party has exercised their termination rights.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2019
Stock-Based Compensation [Abstract]
Stock-Based Compensation	Note 5 — Stock Based Compensation We have a stock incentive plan for employees and others called the “VirnetX Holding Corporation 2013 Equity Incentive Plan”, or the Plan, which has been approved by our stockholders. The Plan provides for the granting of up to 16,624,469 shares of our common stock, including stock options and stock purchase rights (“RSUs”), and will expire in 2024. As of March 31, 2019, 1,703,899 shares remained available for grant under the Plan. During the three months ending March 31, 2019, we did not grant options or RSU’s. Stock-based compensation expense included in general and administrative expense was $374 and $388, and in research and development expense was $411 and $498, for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the unrecognized stock-based compensation expense related to non-vested stock options and RSUs was $5,347 and $1,270, respectively, which will be amortized over an estimated weighted average period of approximately 2.47 and 2.13 years, respectively.

Equity

Equity	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Equity	Note 6 — Equity Common Stock On July 30, 2018 we filed a $100,000 universal shelf registration statement on SEC Form S-3 which was declared effective by the SEC on August 16, 2018. We also entered an at-the-market equity offering sales agreement (“ATM”) with Cowen & Company, LLC on August 31, 2018, under which we can offer and sell shares of our common stock having an aggregate value of up to $50,000. We use the ATM proceeds for GABRIEL product development, marketing and general corporate purposes, which may include working capital, capital expenditures, other corporate expenses and acquisitions of complementary products, technologies or businesses. As of March 31, 2019, common stock with an aggregate value of up to $34,521 remained available for offer and sale under the ATM agreement. During the three months ended March 31, 2019, we sold 560,338 shares under the ATM. The average sales price per common share was $5.24 and the aggregate proceeds from the sales totaled $2,936 during the period. Sales commissions, fees and other costs associated with the ATM totaled $88. Warrants In 2015 we issued warrants for the purchase of 25,000 shares of common stock at an exercise price of $7 per share, which expire in April 2020. Information about warrants outstanding as of March 31, 2019 is as follows: Original Number of Warrants Issued Exercise Price per Common Share Exercisable at December 31, 2018 Became Exercisable Exercised Terminated / Cancelled / Expired Exercisable at March 31, 2019 Expiration Date 25,000 $ 7.00 25,000 — — — 25,000 April 2020 25,000 — — — 25,000

Litigation

Litigation	3 Months Ended
	Mar. 31, 2019
Litigation [Abstract]
Litigation	Note 7 — Litigation We have multiple intellectual property infringement lawsuits pending in the United States District Court for the Eastern District of Texas, Tyler Division (“USDC”), and United States Court of Appeals for the Federal Circuit (“USCAFC”). VirnetX Inc. v. Cisco Systems, Inc. et al. (Case 6:10-CV-00417-LED) (“Apple I”) On August 11, 2010, we filed a complaint against Aastra USA. Inc. (“Aastra”), Apple Inc. (“Apple”), Cisco Systems, Inc. (“Cisco”), and NEC Corporation (“NEC”) the USDC in which we alleged that these parties infringe on certain of our patents (U.S. Patent Nos. 6,502,135, 7,418,504, 7,921,211 and 7,490,151). We sought damages and injunctive relief. The cases against each defendant were separated by the judge. Aastra and NEC agreed to sign license agreements with us and we dropped all accusations of infringement against them. A jury in USDC decided that our patents were not invalid and rendered a verdict of non-infringement by Cisco on March 4, 2013. Our motion for a new Cisco trial was denied and the case against Cisco was closed. On November 6, 2012, a jury in the USDC awarded us over $368,000 for Apple’s infringement of four of our patents, plus daily interest up to the final judgment. Apple filed an appeal of the judgment to the USCAFC. On September 16, 2014, USCAFC affirmed the USDC jury’s finding that all four of our patents at issue are valid and confirmed the USDC jury’s finding of infringement of VPN on Demand under many of the asserted claims of our ‘135 and ‘151 patents, and the USDC’s decision to allow evidence about our license and royalty rates regarding the determination of damages. However, the USCAFC vacated the USDC jury’s damages award and some of the USDC’s claim construction with respect to parts of our ‘504 and ‘211 patents and remanded the damages award and determination of infringement with respect to FaceTime back to the USDC for further proceedings. On September 30, 2016, pursuant to the 2014 remand from the USCAFC, a jury in the USDC awarded us $302,400 for Apple’s infringement of four of our patents. On September 29, 2017, the USDC entered its final judgement, denied all of Apple’s post-trial motions, granted all our post-trial motions, including our motion for willful infringement and enhanced the royalty rate during the willfulness period from $1.20 to $1.80 per device, and awarded us costs, certain attorneys’ fees, and prejudgment interest. The total amount in the final judgement was $439,700, including $302,400 (jury verdict), $41,300 (enhanced damages) and $96,000 (costs, fees and interest). On October 27, 2017 Apple filed its notice of appeal of this final judgement to the USCAFC. Apple filed its opening brief on March 19, 2018. We filed our response on April 4, 2018. On April 11, 2018, USCAFC designated Cases 18-1197-CB, Case 17-1368 and Case 17-1591 VirnetX Inc. v. The Mangrove Partners (USCAFC Case 17-1368) (“Consolidated Appeal”) VirnetX Inc. v. Apple, Inc. (Case 6:12-CV-00855-LED) (“Apple II”) This case began on November 6, 2012, when we had filed a complaint against Apple in USDC in which we alleged that Apple infringed on certain of our patents, (U.S. Patent Nos. 6,502,135, 7,418,504, 7,921,211 and 7,490,151). We sought damages and injunctive relief. The accused products include the iPhone 5, iPod Touch 5th Generation, iPad 4 th Case No. 19-1050 - VirnetX Inc. v. Apple Inc VirnetX Inc. v. Apple Inc (USCAFC Case 19-1050) (“Apple II Appeal”). VirnetX Inc. v. The Mangrove Partners (USCAFC Case 17-1368) (“Consolidated Appeal”) On April 11, 2018, the USCAFC in an order designated the following appeals as companion cases and assigned to the same merits panel; • VirnetX Inc. v. The Mangrove Partners (USCAFC Case 17-1368) On December 16, 2016, we filed appeals with the USCAFC, appealing the invalidity findings by the Patent Trial and Appeal Board (“PTAB”) in IPR2015-01046, and on December 20, 2016 for IPR2015-1047, involving our U.S. Patent Nos. 6,502,135, and 7,490,151. These appeals also involve Apple, Inc. and one of them involves Black Swamp IP, LLC. Oral arguments in this case were argued on January 8, 2019. We are awaiting the Court’s decision in this matter. • VirnetX Inc. v. Cisco Systems, Inc. (USCAFC Case 18-1197-CB) (Appeal of Apple I Case) On October 27, 2017 Apple filed its notice of appeal of the Final Judgment entered on September 29, 2017 to the United States Court of Appeals for the Federal Circuit. Oral arguments in this case were held on January 8, 2019. On January 15, 2019 the Court issued a Rule 36 order affirming the District Court Judgement. Apple filed a request for panel rehearing and rehearing en-banc in this matter on February 21, 2019. On March 12, 2019, the Court invited us to respond to Apple's petition on or before March 26, 2019. We filed our response on March 22, 2019. We are awaiting the Court’s decision in this matter. • VirnetX Inc. v. Apple Inc., Cisco Systems, Inc. (USCAFC Case 17-1591) On February 7, 2017, we filed appeals with the USCAFC, appealing the invalidity findings by the PTAB in inter-parties’ reexamination nos. 95/001,788, 95/001,789, and 95/001,856 related to our U.S. Patent Nos. 7,921,211 and 7,418,504 . VirnetX Inc. v. Apple Inc (USCAFC Case 19-1050) (“Apple II Appeal”) On January 24, 2019 Apple filed opening brief. We filed our response on March 1, 2019. Apple filed it s response on April 5, 2019. The oral arguments have not yet been scheduled. VirnetX Inc. v. Apple Inc. (Case 17-2490) On August 23, 2017, we filed with the USCAFC appeals of the invalidity findings by the PTAB in IPR2016-00331 and IPR2016-00332 involving our U.S. Patent No. 8,504,696. On December 10, 2018, the USCAFC issued an opinion affirming the PTAB’s invalidity findings. VirnetX Inc. (Case 17-2593) On September 22, 2017, we filed with the USCAFC, appeals of the invalidity findings by the PTAB in IPR2016-00693 and IPR2016-00957 involving our U.S. Patent Nos. 7,418,504 and 7,921,211. The briefing in these appeals has not taken place. The entity that initiated the IPRs, Black Swamp IP, LLC, indicated on October 18, 2017, that it would not participate in the appeals. On November 27, 2017, the USPTO indicated that it would intervene in the appeals. On January 19, 2018, the USCAFC stayed these appeals pending the USCAFC’s decision in Case 17-1591. VirnetX Inc. (Case 18-1751) On March 30, 2018, we filed with the USCAFC an appeal of the invalidity findings by the PTAB in inter-partes reexamination no. 95/001,851 involving our U.S. Patent No. 7,418,504. The briefing in this appeal has been concluded; the oral arguments have been scheduled for June 4, 2019. VirnetX Inc. (Case 18-1872) On April 23, 2018, we filed with the USCAFC an appeal of the invalidity findings by the PTAB in IPR2016-01585 involving our U.S. Patent No. 8,904,516. On November 30, 2018, the USCAFC granted an unopposed motion to dismiss this appeal. VirnetX Inc. (Case 18-2211) On July 31, 2018, we filed with the USCAFC an appeal of the invalidity findings by the PTAB in IPR2017-00337 involving our U.S. Patent No. 9,038,163. On November 30, 2018, the USCAFC granted an unopposed motion to dismiss this appeal. VirnetX Inc. (Case 19-1043) On October 1, 2018, we filed with the USCAFC an appeal of the invalidity findings by the PTAB in inter-partes reexamination no. 95/001,746 involving our U.S. Patent No. 6,839,759. We filed our opening brief on March 15, 2019. Cisco ’ 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. In addition, bringing a lawsuit may lead to potential counterclaims which may distract our management and our other resources, including capital resources, from efforts to successfully commercialize our products. Currently, we are not a party to any other pending legal proceedings and are not aware of any proceeding threatened or contemplated against us.

Leases

Leases	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Leases	Note 8 — Leases We determine if an arrangement is a lease at inception. Operating lease ROU assets are included in other assets on the Condensed Consolidated Balance Sheet as of March 31, 2019. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our 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. We lease office space under an operating lease which expires in October 2019. We also entered into an operating lease for a facility used for corporate promotional and marketing purposes which was prepaid in full in a prior year and expires in 2024. As described under New Accounting Pronouncements above, we adopted ASU 2016-02 effective January 1, 2019. As a result of the adoption, on January 1, 2019 we reclassified $385 of prepaid lease payments for the promotional and marketing facility from current assets to non-current assets. At January 1, 2019 we recorded a ROU asset and lease liability of $45 for the office lease with a balance of $31 at March 31, 2019. For the three months ended March 31, 2019, we recorded lease expense of $110. Adoption of the ASU had no impact on the Condensed Consolidated Statement of Operations.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2019
Summary of Significant Accounting Policies [Abstract]
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying Condensed Consolidated Balance Sheet as of March 31, 2019, the Condensed Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018, the Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2019 and 2018, the Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2019 and 2018,and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018 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 March 31, 2019, our results of operations for the three months ended March 31, 2019 and 2018, and our cash flows for the three months ended March 31, 2019 and 2018. 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, 2018, filed with the SEC on March 18, 2019.
Use of Estimates	Use of Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP. In doing so, we must 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 our accounting estimates are reasonably likely to occur. 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, at the time they are made, 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.
Reclassifications	Reclassifications Certain prior period amounts were reclassified to conform to the current year’s presentation. None of these reclassifications had an impact on reported operating expenses, operating income or net income for any of the periods presented.
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.
Leases	Leases The Company determines if an arrangement is a lease at inception in accordance with ASC Topic 842. Operating lease ROU assets are included in other assets on the Condensed Consolidated Balance Sheet. 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.
Revenue Recognition	Revenue Recognition Most of our revenue is derived from licensing and royalty fees from contracts with customers which often span several years. We account for revenue in accordance with 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 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.
Earnings (Loss) Per Share	Earnings (Loss) Per Share Basic earnings (loss) per share are computed by dividing earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share are 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.
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. A portion of those balances are insured by the Federal Deposit Insurance Corporation. During the three months ended March 31, 2019 we had funds which were uninsured. We do not believe that we are subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships with major financial institutions. We have not experienced any losses on our deposits of cash and cash equivalents.
Other Assets	Other Assets Other assets at March 31, 2019 includes a right-of-use asset (“ROU”) related to a facility lease for corporate promotional and marketing purposes. The facility lease was paid in full at inception and the ROU is being amortized over the 10-year term of the lease. Other assets also includes an ROU related to our office operating lease which expires in October 2019 (See Note 8).
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets On an annual basis, we identify and record impairment losses on long-lived assets when events and changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Recoverability is measured by comparison of the anticipated future net undiscounted cash flows to the related assets’ carrying value. If such assets are considered to be 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.
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: U.S. agency securities 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 March 31, 2019 and December 31, 2018. March 31, 2019 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Investments Available for Sale Cash $ 3,867 $ — $ — $ 3,867 $ 3,867 $ — Level 1: Mutual funds 1,074 — — 1,074 1,074 — U.S. agency securities 3,318 1 — 3,319 286 3,033 4,392 1 — 4,393 1,360 3,033 Total $ 8,259 $ 1 $ — $ 8,260 $ 5,227 $ 3,033 December 31, 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Investments Available for Sale Cash $ 5,048 $ — $ — $ 5,048 $ 5,048 $ — Level 1: Mutual funds 1,107 — — 1,107 1,107 — U.S. agency securities 3,259 — — 3,259 1,456 1,803 4,366 — — 4,366 2,563 1,803 Total $ 9,414 $ — $ — $ 9,414 $ 7,611 $ 1,803
New Accounting Pronouncements	New Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326). The purpose of this ASU is to require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. We are evaluating the impact this guidance will have on our financial position and statement of operations. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) as amended and supplemented by subsequent ASU’s, (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize right-of-use (“ROU”) assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. We adopted this ASU on January 1, 2019 which had no impact on our consolidated statement of operations or cash flow (See Note 8 for impact on our Condensed Consolidated Balance Sheets).

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2019
Summary of Significant Accounting Policies [Abstract]
Cash and Available-for-Sale Securities Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value by Significant Investment Category	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 March 31, 2019 and December 31, 2018. March 31, 2019 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Investments Available for Sale Cash $ 3,867 $ — $ — $ 3,867 $ 3,867 $ — Level 1: Mutual funds 1,074 — — 1,074 1,074 — U.S. agency securities 3,318 1 — 3,319 286 3,033 4,392 1 — 4,393 1,360 3,033 Total $ 8,259 $ 1 $ — $ 8,260 $ 5,227 $ 3,033 December 31, 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Investments Available for Sale Cash $ 5,048 $ — $ — $ 5,048 $ 5,048 $ — Level 1: Mutual funds 1,107 — — 1,107 1,107 — U.S. agency securities 3,259 — — 3,259 1,456 1,803 4,366 — — 4,366 2,563 1,803 Total $ 9,414 $ — $ — $ 9,414 $ 7,611 $ 1,803

Equity (Tables)

Equity (Tables)	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Information about Warrants Outstanding	Information about warrants outstanding as of March 31, 2019 is as follows: Original Number of Warrants Issued Exercise Price per Common Share Exercisable at December 31, 2018 Became Exercisable Exercised Terminated / Cancelled / Expired Exercisable at March 31, 2019 Expiration Date 25,000 $ 7.00 25,000 — — — 25,000 April 2020 25,000 — — — 25,000

Business Description and Basi_2

Business Description and Basis of Presentation (Details) - Patents [Member]	Mar. 31, 2019Patent
Business Description [Abstract]
Number of patents and pending applications	185
U.S. [Member]
Business Description [Abstract]
Number of patents and pending applications	70
Foreign [Member]
Business Description [Abstract]
Number of patents and pending applications	115

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)Institution	Dec. 31, 2018USD ($)
Concentration of Credit Risk and Others Risks and Uncertainties [Abstract]
Number of financial institutions holding company's cash | Institution	2
Other Assets [Abstract]
Lease term	10 years
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract]
Adjusted Cost	$ 5,227	$ 7,611
Adjusted Cost	4,392	4,366
Unrealized Gains	1	0
Unrealized Losses	0	0
Fair Value	4,393	4,366
Adjusted Cost	8,259	9,414
Fair Value	8,260	9,414
Investments Available for Sale	4,393	4,366
Cash [Member]
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract]
Adjusted Cost	3,867	5,048
Fair Value	3,867	5,048
Cash and Cash Equivalents	3,867	5,048
Mutual Funds [Member]
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract]
Adjusted Cost	1,074	1,107
Unrealized Gains	0	0
Unrealized Losses	0	0
Fair Value	1,074	1,107
Investments Available for Sale	1,074	1,107
U.S. Agency Securities [Member]
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract]
Adjusted Cost	3,318	3,259
Unrealized Gains	1	0
Unrealized Losses	0	0
Fair Value	3,319	3,259
Investments Available for Sale	3,319	3,259
Recurring [Member]
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract]
Fair Value	5,227	7,611
Fair Value	3,033	1,803
Cash and Cash Equivalents	5,227	7,611
Investments Available for Sale	3,033	1,803
Recurring [Member] | Cash [Member]
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract]
Fair Value	3,867	5,048
Cash and Cash Equivalents	3,867	5,048
Recurring [Member] | Level 1 [Member]
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract]
Fair Value	1,360	2,563
Fair Value	3,033	1,803
Cash and Cash Equivalents	1,360	2,563
Investments Available for Sale	3,033	1,803
Recurring [Member] | Level 1 [Member] | Mutual Funds [Member]
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract]
Fair Value	1,074	1,107
Fair Value	0	0
Cash and Cash Equivalents	1,074	1,107
Investments Available for Sale	0	0
Recurring [Member] | Level 1 [Member] | U.S. Agency Securities [Member]
Cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category [Abstract]
Fair Value	286	1,456
Fair Value	3,033	1,803
Cash and Cash Equivalents	286	1,456
Investments Available for Sale	$ 3,033	$ 1,803

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Income Taxes [Abstract]
Income tax expense	$ 2	$ 5
Net change in valuation allowance	1,821	$ 4,796
Valuation allowance carried against net deferred tax assets	38,000		$ 36,000
Federal [Member]
Income Taxes [Abstract]
Net operating loss carryforwards	$ 120,000
Federal [Member] | Earliest Tax Year [Member]
Income Taxes [Abstract]
Operating loss carryforwards, expiration dates	Dec. 31, 2027
State [Member]
Income Taxes [Abstract]
Net operating loss carryforwards	$ 110,000
State [Member] | Earliest Tax Year [Member]
Income Taxes [Abstract]
Operating loss carryforwards, expiration dates	Dec. 31, 2028

Commitments and Related Party_2

Commitments and Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Office and Aircraft Leases [Abstract]
Term of lease	10 years
Offices [Member]
Office and Aircraft Leases [Abstract]
Operating lease expiration date	Oct. 31, 2019
K2 Investment Fund LLC [Member] | Aircraft [Member]
Office and Aircraft Leases [Abstract]
Rental fees incurred for use of aircraft	$ 559	$ 608
Term of lease	12 months
Rate of aircraft lease (in dollars per flight hour)	$ 8
Term of notice for cancellation of lease	30 days

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation [Abstract]
Stock-based compensation expense	$ 785	$ 887
Selling, General and Administrative Expense [Member]
Share-based Compensation [Abstract]
Stock-based compensation expense	374	388
Research and Development Expense [Member]
Share-based Compensation [Abstract]
Stock-based compensation expense	$ 411	$ 498
Stock Options [Member]
Share-based Compensation [Abstract]
Options granted (in shares)	0
Unrecognized stock-based compensation expense expected to be recognized related to non-vested stock options	$ 5,347
Weighted average amortization period	2 years 5 months 19 days
Restricted Stock Units (RSUs) [Member]
Share-based Compensation [Abstract]
RSUs granted (in shares)	0
Unrecognized stock-based compensation expense expected to be recognized related to non-vested RSUs	$ 1,270
Weighted average amortization period	2 years 1 month 17 days
2013 Plan [Member]
Share-based Compensation [Abstract]
Shares authorized for issuance (in shares)	16,624,469
Shares available for grant (in shares)	1,703,899

Equity, Common Stock (Details)

Equity, Common Stock (Details) - Common Stock [Member] - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Aug. 31, 2018	Jul. 30, 2018
Common Stock [Abstract]
Number of shares of common stock sold (in shares)	560,338	1,751,689
Universal Shelf Registration Statement [Member] | Maximum [Member]
Common Stock [Abstract]
Securities offered for sale, aggregate value				$ 100,000
ATM Agreement [Member]
Common Stock [Abstract]
Number of shares of common stock sold (in shares)	560,338	1,751,689
Average sales price per common share (in dollars per share)	$ 5.24	$ 4.02
Aggregate proceeds from sales of common stock	$ 2,936	$ 7,042
Sales commissions, fees and other costs associated with issuance of common stock	88	$ 212
ATM Agreement [Member] | Maximum [Member]
Common Stock [Abstract]
Securities offered for sale, aggregate value	$ 34,521		$ 50,000

Equity, Warrants (Details)

Equity, Warrants (Details) - Warrants [Member]	3 Months Ended
	Mar. 31, 2019$ / sharesshares
Information about warrants outstanding [Abstract]
Exercisable, beginning of period (in shares)	25,000
Became exercisable (in shares)	0
Exercised (in shares)	0
Terminated/cancelled/expired (in shares)	0
Exercisable, end of period (in shares)	25,000
Advisor Warrants [Member]
Information about warrants outstanding [Abstract]
Original number of warrants issued (in shares)	25,000
Exercise price per common share (in dollars per share) | $ / shares	$ 7
Exercisable, beginning of period (in shares)	25,000
Became exercisable (in shares)	0
Exercised (in shares)	0
Terminated/cancelled/expired (in shares)	0
Exercisable, end of period (in shares)	25,000
Expiration date	Apr. 30, 2020

Litigation (Details)

Litigation (Details) - Positive Outcome of Litigation [Member]	Sep. 20, 2018USD ($)	Aug. 31, 2018USD ($)	Sep. 29, 2017USD ($)	Sep. 30, 2016USD ($)Patent	Nov. 06, 2012USD ($)Patent
VirnetX Inc. v. Cisco Systems, Inc. et al. (Case 6:10-CV-00417-LED) ("Apple I") [Member]
Litigation [Abstract]
Amount of damages awarded in patent infringement case			$ 439,700,000	$ 302,400,000
Number of patents allegedly infringed upon by Apple, Inc. | Patent				4	4
Enhanced damages			41,300,000
Costs, fees and interest			96,000,000
VirnetX Inc. v. Cisco Systems, Inc. et al. (Case 6:10-CV-00417-LED) ("Apple I") [Member] | Minimum [Member]
Litigation [Abstract]
Amount of damages awarded in patent infringement case					$ 368,000,000
Royalty rate per device used in calculating infringement damages			1.20
VirnetX Inc. v. Cisco Systems, Inc. et al. (Case 6:10-CV-00417-LED) ("Apple I") [Member] | Maximum [Member]
Litigation [Abstract]
Royalty rate per device used in calculating infringement damages			$ 1.80
VirnetX Inc. v. Apple, Inc. (Case 6:12-CV-00855-LED) ("Apple II") [Member]
Litigation [Abstract]
Amount of damages awarded in patent infringement case	$ 595,900,000	$ 502,600,000
Royalty rate per device used in calculating infringement damages		$ 1.20
Additional amount granted in agreed bill of costs, attorney fees, and prejudgment interest	$ 93,300,000

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Current Assets [Member]
Lessee Description [Abstract]
Prepaid lease payments for promotional and marketing facility		$ 385
ASU 2016-02 [Member]
Lessee Description [Abstract]
ROU asset	$ 31	45
Lease liability	31	45
Lease expense	$ 110
ASU 2016-02 [Member] | Noncurrent Assets [Member]
Lessee Description [Abstract]
Prepaid lease payments for promotional and marketing facility		$ 385