What changed in VirnetX Holding Corp's 10-K — 2024 vs 2025

VirnetX’s software and technology solutions, including its Secure Domain Name Registry and Technology, VirnetX One™, War Room™, and VirnetX Matrix™ are designed to be device and location-independent, and enable a secure real-time communication environment for all types of enterprise applications, services, and critical infrastructures.

Our technology generates secure connections on a “single-click” basis, significantly simplifying the deployment of secure real-time communication solutions by eliminating the need for end-users to enter any encryption information. Our product portfolio includes sophisticated technologies, products and services that are available for sale worldwide.

Our next-generation, VirnetX One™ platform builds upon our patented Secure Domain Name Registry and Technology to further enhance the security and efficiency of our patented secure communication links. VirnetX One™ is a security-as-a-service platform that protects enterprise applications, services, and infrastructure from cyber-attacks.

Our platform allows government organizations, businesses, and other enterprises of all sizes to add a “security umbrella” as an added layer on top of their existing infrastructure to further reduce risk and bolster security against ever-growing cyberthreats to data, operating systems, other infrastructure products and gateway security controllers.

Our War Room™ software product provides safe and secure video conferencing meeting environment where sensitive communications and data is invisible to those not authorized to view it. War Room™ validates permissions of all the users, and devices requesting access to any secure meeting room prior to granting access.

We believe our War Room™ will be an attractive solution for government and law enforcement agencies as well as all professional sectors such as legal, financial, and medical where limiting access to confidential data is a critical requirement.

Our VirnetX Matrix™ product provides superior security for internet-enabled enterprise applications and their connected devices, and for control systems currently deployed by those enterprises (e.g., file servers, data back-up systems, VPN/firewalls).

VirnetX Matrix™ provides a true “zero-trust” access protection, “single-click” ease of use, and is a highly-effective added layer of protection that is deployed simply, without the need for changes to an enterprise’s existing, in-place infrastructure.

We believe VirnetX Matrix™ is an attractive solution for all businesses, cloud and on-premise application service providers, and original equipment manufacturers (“OEMs”), looking to improve visibility and management of their networks to mitigate morphing attacks on their networks and for real time access and control of their users.

We continue to augment our product strategy to provide secure AI to the marketplace.

This CRADA continues through 2030 and allows VirnetX to apply for security clearances for its employees. We are also beginning to integrate AI/ML capabilities into VirnetX Matrix™ to enhance its zero-trust security, threat detection, and network resilience by enabling autonomous threat response, adaptive access control, and self-healing network architectures.

We have undertaken activities to commercialize our products and intellectual property in and outside the United States including VirnetX One™, War Room™, VirnetX Matrix™ and our Secured Domain Name Registry and Technology.

We believe our product portfolio to secure devices and systems are suitable in areas such as national defense, local, state, Federal and foreign governments, critical infrastructure, law enforcement, healthcare, finance, legal, oil and gas, medical, and related support industries.

We continue to actively pursue new sales opportunities in and outside of the United States. 2 Index Our employees include the core development team behind our inventions, technology, and software.

The team has continued its research and development work to refine our unique network security technology and make it more secure and easy to deploy. Our portfolio of intellectual property is the foundation of our business model. We currently own U.S. and foreign patents/validations/pending applications.

Industry Overview & Trends We have seen an exponential increase in dynamic and persistent cyber threats to the U.S. national security operational framework, and critical infrastructure from state-sponsored adversaries, organized cybercriminal groups, and rogue actors employing advanced cyber capabilities. These threats include denial-of-service (DoS), signal jamming, data spoofing, malware injection, and direct attacks on ground and satellite-based communication networks infrastructure.

In the commercial sector, satellite networks that provide communication, navigation, and imagery services are vulnerable to exploitation, posing risks to critical infrastructure and civilian services. For government systems, adversaries have been targeting vulnerabilities in proliferated constellations, mission-critical data streams, and multi-domain integration efforts.

We believe that our proven proactive, integrated approach to cybersecurity ensures the resilience of defense architectures across the entire conflict continuum. The shift to remote work and expansion of the enterprise network perimeter has driven the growth of ZTNA solutions. The Zero Trust concept treats all networks like the Internet, where all users and devices are untrusted by default.

Their location within the network is not a factor for deciding trust. Each user and device on the network requires authentication and authorization, based on policy, prior to accessing any applications or resources on the network.

ZTNA facilitates security around remote work, because Zero Trust policies enable granular access control, end-to-end encryption of network communications and remove application visibility from the public Internet which reduces the potential attack surface. Cloud computing growth has rapidly expanded as enterprises continue to move applications and services to the cloud.

The cloud offers scalability, operations and development efficiency and remote access benefits for their workforce. The cloud technology adoption is expected to continue to increase quite significantly in industries where the work-from-home initiative is helping to sustain enterprise business functions.

However, shifting critical data to the cloud has resulted in security concerns and the need for enterprises to control access and gain visibility into how information is being used, who is accessing it and where it is going. We believe our scalable technology allows enterprises to secure applications and services regardless of whether hosting is on-premise or in the cloud.

As billions of connected Internet of Things (“IoT”) devices come online in support of enterprise operations, products, and industrial controls they will need to be secured and integrated into the enterprise.

Facilitated by advancements in 4G/Advanced LTE and high-speed 5G networks, IoT devices will be able to operate from any network, transmit higher volumes of data including video streaming and sensor data collection and require real-time decisions based on that data. Without next generation security, these IoT devices represent a large attack surface that manages and controls critical enterprise infrastructure.

These IoT devices can operate from anywhere and will need to be secured with the same level of network security and ZTNA solutions enterprises are already deploying for their remote workforce.

We believe that the market opportunity for our software and technology solutions is large and expanding as secure domain names are now an integral part of securing the next generation 5G and 4G/LTE Advanced wireless networks and IoT communications. 3 Index Our Approach & Strategy We believe that VirnetX One™ software products are positioned to help enterprises adapt to the rapidly evolving threat landscape in work environments and the growing need to secure communications regardless of a user’s location, network, or device.

VirnetX One™ products deliver ZTNA, allowing enterprises to secure their information, control access and gain visibility into how information is being used, who is accessing it and where it is going.

Our patented technology allows enterprises to license our technology for integration into their products and services, easily deploy our technology through our VirnetX One™ family of products for endpoint security or securing their communications with our mobile and desktop applications.

Our strategy is to become the market leader in securing real-time communications over the Internet and to establish our VirnetX One™ as the industry standard security platforms.

Key elements of our strategy are to: • Direct sales efforts with larger users, particularly those engaged in defense and other governmental or national initiatives. • Actively recruit partners in various vertical markets, including critical infrastructure, intelligence, defense, healthcare, finance, legal, government to help us expand our enterprise customer base. • Promote our next-generation VirnetX One™ platform as a solution for delivering ZTNA, and securing enterprise applications, services, and infrastructure. • Combine with VirnetX One™ platform with technologies from the companies we have invested in, namely OmniTeq and OPMedia, to enhance their offerings and provide supplemental sales channels for VirnetX One™ • Continue to grow our technology licensing program to commercialize our intellectual property. • Grow registration of VirnetX Secure Domain Names as the network segmentation component of our ZTNA solution.

Establish VirnetX as the exclusive, universal registry of secure domain names and enable our customers to act as registrars for their users and broker secure communication between devices. • Promote War Room TM video conferencing product in the general market for sale to end-user enterprises, directly and with partners, with targeted promotions and other marketing programs to assist remote workers and offer an industry leading secure meeting solution. • Promote VirnetX Matrix TM applications, services, and infrastructure. • Integrate advanced AI/ML algorithms and models into the VirnetX One TM platform for enhancements. • Explore quantum cryptographic solutions and blockchain applications to improve zero-trust security, to future-proof our software.

Competitive Strengths We believe the following competitive strengths will enable our success in the marketplace: • Unique patented technology. We are focused on developing innovative technology for securing real-time communications over the Internet and establishing the exclusive secure domain name registry in the United States and other key markets around the world.

Our unique solutions combine industry standard encryption methods and communication protocols with our patented techniques for automated DNS lookup mechanisms. Our technology and patented approach enable users to create a secure communication link by generating secure domain names. We currently own U.S. and foreign patents/validations/pending applications.

Our portfolio includes patents and pending patent applications in the United States and other key markets that support our secure domain name registry service for the Internet. • Scalable licensing business model.

We are actively engaged in pursuing additional licensing agreements with industry participants OEMs, service providers and system integrators within the IP-telephony, mobility, mobile-to-mobile communications, fixed-mobile convergence, and unified communications end-markets. 4 Index • Highly experienced research and development team.

Our research and development team is comprised of nationally recognized network security and encryption technology scientists and experts that have worked together as a team for over ten years. During their careers, this team has developed several cutting-edge technologies for U.S. national defense, intelligence, and civilian agencies, many of which remain critical to our national security today.

Prior to joining VirnetX, our team worked for Leidos, during which time they invented the core technology that is the foundation of our current technology and software.

Based on the collective knowledge and experience of our development team, we believe that we have one of the most experienced and sophisticated groups of security experts researching vulnerability and threats to real-time communication over the Internet and developing solutions to mitigate these problems.

License and Service Offerings We offer a diversified portfolio of licenses, software and service offerings focused on securing real-time communications over the Internet. We believe software products will allow enterprises to seamlessly integrate ZTNA protection into their networks to secure their applications, services, virtualized resources, and data as it moves into the cloud.

Enterprises can quickly deploy VirnetX One software products to protect legacy applications, secure new cloud-based services and remove application visibility from the public Internet. Enterprises can move towards more granular network access control to protect their network at the edge and away from legacy VPN technologies.

VirnetX One family of software products enables remote employees to securely interact with on-premise and cloud-based applications, regardless of their location. Enterprises can use VirnetX One platform to secure open-source applications powering communications, data and analytics, infrastructure, and business services with a focus on making those applications easier to secure, access and manage.

We believe our software products and technologies provide the foundation for securing real-time communications and collaboration applications for the enterprise remote workforce. We are exploring creating a marketplace of applications secured by our VirnetX One platform.

This approach will allow us to offer a portfolio of certified applications that can be deployed by the enterprise customers in their business networks with confidence in keeping their confidential data and communications secure.

This marketplace strategy will allow us to offer more flexible licensing options to solve specific customer use-cases, align with partner product offerings and create upsell opportunities for our products.

Customers and Market Development We have undertaken activities to commercialize our products and intellectual property in and outside the United States including VirnetX One TM , War Room TM , VirnetX Matrix TM , and our Secured Domain Name Registry and Technology.

We believe our product portfolio to secure devices and systems are stable in areas such as City, County and State Governments, Healthcare, Finance, Legal, Oil and Gas, Medical, Law Enforcement, National Defense and related support industries. We continue to actively pursue new opportunities in and one of United States.

During 2024, due to exponential increase in dynamic and persistent cyber threats to the U.S. national security operational framework, we decided to increase our focus on offering our VirnetX One TM platform and its family of products and solutions to the Department of Defense for addressing these challenges using our proven proactive, integrated approach to cybersecurity that ensures the resilience of defense architectures across the entire conflict continuum.

As a part of this effort, we engaged in several significant actions: • We established an advisory board comprised of four retired senior U.S.

Air Force leaders to assist and advise on business development and operational direction of VirnetX’s Zero Trust Network Access security technology as a necessary layer of security for defense communications and data management to Department of Defense government officials and commercial contractors. • We participated in the U.S.

Navy Expeditionary Combat Command (NECC) sponsored technology demonstrations during the Rim of the Pacific (RIMPAC) 2024, a large-scale international maritime exercise at Ford Island, Oahu, Hawaii, and successfully demonstrated our VirnetX One Matrix and VirnetX’s War Room secure video conferencing from ship to shore environments.

We believe our technology and solutions can fill defense needs for security, stealth, and flexibility in myriad day-to-day static situations to the most challenging operations in conflict or humanitarian assistance. • We participated in a Cooperative Research and Development Agreement (CRADA) with the Air Force (AF) Research Laboratory Intelligence Systems Directorate (AFRL/RI) to facilitate collaboration on cybersecurity and Zero Trust technologies to support integrated surveillance and reconnaissance operations as well as AF and joint targeting processes.

The work conducted under this CRADA is expected to provide the avenue to secure and obfuscate AF targeting, processing, dissemination, and intelligence technology, enabling AF to take advantage of the latest research and developments in commercially available cybersecurity technology and reduce its IT attack surface in a joint, all-domain environment. • We hired Dr.

John Anthony Jamison as new VirnetX Chief Technical Officer (CTO). Dr.

Jamison brings a wealth of technology experience in the intelligence community and will be instrumental as expand our participation in national defense projects and initiatives. • We successfully conducted a rigorous functional and penetration testing of our VirnetX One Matrix solution by Pacific Northwest National Laboratory (PNNL) with support from Johns Hopkins University Applied Physics Laboratory (JHU-APL) at the request of The United States Space Force (USSF).

Throughout 2024, we continued to actively engage in discussions with certain third-parties to pitch the capabilities of VirnetX One TM . We have continued our engagement with Solution Synergy, WeSecure, Samsung, Every Data Corporation, and Object Security and are working on a number of projects to deploy our VirnetX Matrix TM product.

Although there can be no assurance in this regard, we believe that there are opportunities for Company products' sales directly to, resale arrangements with and/or adoption as vendor standards by, one or more of these third parties. We have Patent License Agreements with Aastra USA, Inc.

Avaya, Inc., Microsoft Corporation, Mitel Networks Corporation, NEC Corporation and NEC Corporation of America, Siemens Enterprise Communications GmbH & Co.

KG, and Siemens Enterprise Communications Inc. to license certain of our patents, for a one-time payment and an ongoing royalty for all future sales through the expiration of the licensed patents with respect to certain current and future IP-encrypted products. 5 Index We are seeking further licensing of our technology, to developers and original equipment manufacturers, or OEMs, of chips, servers, Desktop, mobile devices such as smart phones, tablets, laptops, net books, and other devices, within the IP-telephony, mobility, fixed- mobile convergence, and unified communications markets including 5G and 4G/LTE.