0001140361-21-008678 | 10-K | XBRL Viewer

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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2020	Mar. 11, 2021	Jun. 30, 2020
Cover [Abstract]
Entity Registrant Name	VirnetX Holding Corp
Entity Central Index Key	0001082324
Current Fiscal Year End Date	--12-31
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Document Transition Report	false
Entity File Number	001-33852
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	77-0390628
Entity Address, Address Line One	308 Dorla Court
Entity Address, Address Line Two	Suite 206
Entity Address, City or Town	Zephyr Cove
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89448
City Area Code	775
Local Phone Number	548-1785
Title of 12(b) Security	Common Stock
Trading Symbol	VHC
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 412,305,224
Entity Common Stock, Shares Outstanding		71,058,570

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 192,908	$ 3,135
Investments available for sale	28,348	2,394
Accounts receivables	8	5
Prepaid income tax	2,905	0
Prepaid expenses and other current assets	263	237
Total current assets	224,432	5,771
Prepaid expenses and other assets	1,301	1,711
Property and equipment, net	11	16
Long term, deferred tax asset	9,049	0
Total assets	234,793	7,498
Current liabilities:
Accounts payable and accrued liabilities	654	1,346
Accrued payroll and related expenses	220	287
Accrued licensing costs	9,438	0
Other liabilities, current	44	193
Total current liabilities	10,356	1,826
Other liabilities	0	44
Total liabilities	10,356	1,870
Commitments and contingencies (Note 4)
Stockholders' equity:
Preferred stock, par value $0.0001 per share Authorized: 10,000,000 shares at December 31, 2020 and December 31, 2019, Issued and outstanding: 0 shares at December 31, 2020 and December 31, 2019	0	0
Common stock, par value $0.0001 per share Authorized: 100,000,000 shares at December 31, 2020 and December 31, 2019, Issued and outstanding: 71,058,570 shares and 69,586,764 shares, at December 31, 2020 and December 31, 2019, respectively	7	7
Additional paid-in capital	232,457	223,237
Accumulated deficit	(8,014)	(217,602)
Accumulated other comprehensive loss	(13)	(14)
Total stockholders' equity	224,437	5,628
Total liabilities and stockholders' equity	$ 234,793	$ 7,498

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
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)	71,058,570	69,586,764
Common stock, shares outstanding (in shares)	71,058,570	69,586,764

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Revenue	$ 302,636	$ 85
Operating expense:
Licensing costs	90,101	0
Research and development	8,830	3,845
Selling, general and administrative expenses	45,812	15,905
Total operating expense	144,743	19,750
Income (loss) from operations	157,893	(19,665)
Gain on settlement	41,271	0
Interest and other income, net	108,288	92
Income (loss) before taxes	307,452	(19,573)
Income tax (expense) benefit	(27,023)	393
Net income (loss)	$ 280,429	$ (19,180)
Basic earnings (loss) per share (in dollars per share)	$ 3.96	$ (0.28)
Diluted earnings (loss) per share (in dollars per share)	$ 3.92	$ (0.28)
Weighted average shares outstanding, basic (in shares)	70,850,311	68,564,321
Weighted average shares outstanding, diluted (in shares)	71,615,843	68,564,321

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net income (loss)	$ 280,429	$ (19,180)
Other comprehensive (loss), net of tax:
Change in unrealized gain (loss) on investments	0	3
Change in foreign currency translation	1	(3)
Total other comprehensive gain (loss), net of tax	1	0
Comprehensive income (loss)	$ 280,430	$ (19,180)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]	Total
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		10,539			10,539
Stock issued for cash, net (in shares)	1,860,483
Stock issued for options and RSUs, net		670			670
Stock issued for options and RSUs, net (in shares)	846,434
Stock-based compensation		3,711			3,711
Comprehensive income (loss):
Net income (loss)			(19,180)		(19,180)
Change in foreign currency translation, net of tax				(3)	(3)
Change in unrealized gains, net of tax				3	3
Comprehensive income (loss)					(19,180)
Balance at Dec. 31, 2019	$ 7	223,237	(217,602)	(14)	5,628
Balance (in shares) at Dec. 31, 2019	69,586,764
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock issued for cash, net		4,488			4,488
Stock issued for cash, net (in shares)	1,049,382
Warrant issued for services		104			104
Dividends declared and paid			(70,841)		(70,841)
Stock issued for options and RSUs, net		690			690
Stock issued for options and RSUs, net (in shares)	422,424
Stock-based compensation		3,938			3,938
Comprehensive income (loss):
Net income (loss)			280,429		280,429
Change in foreign currency translation, net of tax				1	1
Change in unrealized gains, net of tax					0
Comprehensive income (loss)					280,430
Balance at Dec. 31, 2020	$ 7	$ 232,457	$ (8,014)	$ (13)	$ 224,437
Balance (in shares) at Dec. 31, 2020	71,058,570

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Dividends declared and paid (in dollars per share)	$ 1.00
Minimum [Member]
Stock issued for cash, net (in dollars per share)	4.00	$ 4.00
Maximum [Member]
Stock issued for cash, net (in dollars per share)	$ 4.96	$ 6.49

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net income (loss)	$ 280,429	$ (19,180)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	5	7
Stock-based compensation	3,938	3,711
Amortization of warrant issuance costs	69	0
Deferred income taxes	(9,049)	0
Changes in assets and liabilities:
Prepaid expenses and other assets	419	374
Accounts payable and accrued liabilities	(692)	296
Other liabilities	(193)	97
Accrued payroll and related expenses	(67)	10
Accrued licensing costs	9,438	0
Accounts receivable	(3)	1
Prepaid income taxes	(2,905)	(396)
Net cash provided by (used in) operating activities	281,389	(15,080)
Cash flows from investing activities:
Purchase of property and equipment	0	(14)
Purchase of investments	(33,065)	(5,784)
Proceeds from sale or maturity of investments	7,112	5,192
Net cash used in investing activities	(25,953)	(606)
Cash flows from financing activities:
Proceeds from exercise of options	1,046	816
Proceeds from sale of common stock	4,488	10,539
Payment of dividends on common stock	(70,841)	0
Payments on payroll taxes on cashless vesting of RSUs	(356)	(145)
Net cash (used in) provided by financing activities	(65,663)	11,210
Net increase (decrease) in cash and cash equivalents	189,773	(4,476)
Cash and cash equivalents, beginning of period	3,135	7,611
Cash and cash equivalents, end of period	192,908	3,135
Cash paid for income taxes	$ 38,977	$ 4

Formation and Business of the Company	12 Months Ended
Formation and Business of the Company	Dec. 31, 2020
Formation and Business of the Company [Abstract]
Formation and Business of the Company	Note 1 − Formation and Business of the Company 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. During 2012, 2013 and 2020 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 (see “Revenue Recognition”). Our portfolio of intellectual property is the foundation of our business model. We currently own approximately 194 total patents and pending applications, including 70 U.S. patents/patent applications and 124 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, M2M communications in areas of Smart City, Connected Car and Connected Home. The subject matter of all our U.S and foreign patents and pending applications relates generally to securing communications over the Internet and such covers all our technology and other products. Our issued U.S. and foreign patents expire at various times during the period from 2020 to 2024. Some of our issued patents and pending patent applications were acquired by our principal operating subsidiary; VirnetX, Inc., from 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. 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 Accounting Policies

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 − Summary of Significant Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. The critical accounting policies we employ in the preparation of our consolidated financial statements are those which involve impairment of long-lived assets, income taxes, fair value of financial instruments and stock-based compensation.

Use of Estimates

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). In doing so, we have to 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 the accounting estimates are reasonably likely to occur from period to period. 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, 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. We have reviewed our critical accounting policies and estimates with the audit committee of our board of directors.

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 Accounting Standards Codification (“ASC”) Topic 842. Operating lease right-of-use (“ROU”) assets are included in Prepaid expense, and other assets on the 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 (see Note 13 – Leases).

Revenue Recognition

The Company derives revenue from licensing and royalty fees from contracts with customers which often span several years. We account for this revenue in accordance with Accounting Standards Codification 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 licensing of our patents, performance obligations are generally satisfied at a point in time as work is complete when our patent rights are transferred to our customers. We generally have no further obligation to our customers regarding our technology.

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.

The Company actively monitors and enforces its intellectual property (“IP”) rights, including seeking appropriate compensation from third parties that utilize the Company’s IP without a license. As a result, the Company may, from time to time, receive payments as part of a settlement or compensation for a patent infringement dispute. Proceeds received are allocated to each element identified in the settlement or compensation, based on the fair value of each element. Generally, settlements and compensation may include the following elements: the value of a license or royalty agreement, cost reimbursement, damages, and interest. Elements identified related to licensing and royalty are recognized as revenue. Elements identified as reimbursed costs are generally recorded as a reduction to the reported expenses. Elements identified as damages or interest are generally recorded in other income in the condensed consolidated statement of operations. During the year ended December 31, 2020, the Company collected a lump sum payment of $454,034 from Apple, Inc., because of a favorable court decision relating to a patent infringement case. The court decision identified the following as the basis of the award: $302,428 for past royalties, $41,271 in damages for willful infringement, $108,221 for interest, and $2,114 in reimbursement for court costs and attorney’s fees (see Note 12 - Litigation). Elements of the payment were recognized in the Company’s condensed consolidated statement of operations as follows:

Classification of Payment Received in the Company’s Condensed Consolidated Statement of Operations
Year Ended:
	December 31, 2020
Revenue (royalties)	$	302,428
Operating expenses: selling, general and administrative (reimbursed litigation costs)		2,114
Other income: gain (willful infringement)		41,271
Other income: interest income (pre- and post-judgment interest)		108,221
Total cash received	$	454,034

Licensing Costs

Included in operating expenses for the year ended December 31, 2020, is $90,101 in licensing costs we incurred in conjunction with the proceeds received from Apple Inc., pursuant to a favorable court decision relating to a patent infringement case.

Contingent Gains

We recognize gain contingencies in accordance with ASC 450-30-25 which prohibits recognition of contingent gains until realized. Accordingly, we do not record contingent gains ahead of such realization. Management generally considers any such gains as realized only upon the collection of cash.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with original maturities of three months or less at the date of purchase to be cash equivalents. Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these investments.

Investments

Investments are classified as available-for-sale and are recorded at fair market value. Unrealized gains and losses are reported as other comprehensive income. Realized gains and losses are recorded in income in the period they are realized using specific identification of each security’s cost basis. We invest our excess cash primarily in highly liquid debt instruments including corporate, government and federal agency securities, with contractual maturities less than two years. By policy, we limit the amount of credit exposure to any one issuer.

Property and Equipment

Property and equipment are stated at historical cost, less accumulated depreciation, and amortization. Depreciation and amortization are computed using the accelerated and straight-line methods over the estimated useful lives of the assets, which range from five to seven years. Repair and maintenance costs are charged to expense as incurred.

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. Deposits held with these financial institutions may exceed the amount of insurance provided on such deposits. A portion of those balances are insured by the Federal Deposit Insurance Corporation, or FDIC. During the year ended December 31, 2020 and 2019, we had, at times, funds that were uninsured. We do not believe that we are subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships. We have not experienced any losses on our deposits of cash and cash equivalents.

Fair Value

The carrying amounts of our financial instruments, including cash equivalents, accounts payable, and accrued liabilities, approximate fair value because of their generally short maturities.

Intangible Assets

We record intangible assets at cost, less accumulated amortization. Amortization of intangible assets is provided over their estimated useful lives, which can range from 3 to 15 years, on either a straight-line basis or as revenue is generated by the assets.

Impairment of Long-Lived Assets

We identify and record impairment losses on long-lived assets used in operations when events and changes in circumstances indicate that the carrying amount of an asset might not be recoverable, but not less than annually. 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.

Research and Development

Research and development costs include expenses paid to outside development consultants and compensation related expenses for our engineering staff. Research and development costs are expensed as incurred.

Income Taxes

We account for income taxes using the asset and liability method. The asset and liability method requires the recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between the tax basis and financial reporting basis of our assets and liabilities. We calculate current and deferred tax provisions based on estimates and assumptions that could differ from actual results reflected on the income tax returns filed during the following years. Adjustments based on filed returns are recorded when identified in the subsequent years. The effect on deferred taxes for a change in tax rates is recognized in income in the period that the tax rate change is enacted. In assessing our deferred tax assets, we consider whether it is more likely than not that all or some portion of the deferred tax assets will not be realized.

A valuation allowance is provided for deferred income tax assets when, in our judgment, based upon currently available information and other factors, it is more likely than not that all or a portion of such deferred income tax assets will not be realized. The determination of the need for a valuation allowance is based on an on-going evaluation of current information including, among other things, historical operating results, estimates of future earnings in different taxing jurisdictions and the expected timing of the reversals of temporary differences. We believe the determination to record a valuation allowance to reduce a deferred income tax asset is a significant accounting estimate because it is based, among other things, on an estimate of future taxable income in the United States and certain other jurisdictions, which is susceptible to change and may or may not occur, and because the impact of adjusting a valuation allowance may be material. In determining when to release the valuation allowance established against our net deferred income tax assets, we consider all available evidence, both positive and negative. Due to the 2020 income, we have released the valuation allowance against federal net deferred tax assets, and we maintain a partial valuation allowance against the state net operating loss and credit carryovers due to lack of income in California. We continually assess our ability to generate sufficient taxable income during future periods in which our deferred tax assets may be realized. If and when we believe it is more likely than not that we will recover our deferred tax assets, we will reverse the valuation allowance as an income tax benefit in our statements of operations.

We account for our uncertain tax positions in accordance with U.S. GAAP. The U.S. GAAP method of accounting for uncertain tax positions utilizes a two-step approach to evaluate tax positions. Step one, recognition, requires evaluation of the tax position to determine if based solely on technical merits it is more likely than not to be sustained upon examination. Step two, measurement, is addressed only if a position is more likely than not to be sustained. In step two, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, which is more likely than not to be realized upon ultimate settlement with tax authorities. If a position does not meet the more likely than not threshold for recognition in step one, no benefit is recorded until the first subsequent period in which the more likely than not standard is met, the issue is resolved with the taxing authority, or the statute of limitations expires. Positions previously recognized are derecognized when we subsequently determine the position no longer is more likely than not to be sustained. Evaluation of tax positions, their technical merits, and measurements using cumulative probability are highly subjective management estimates. Actual results could differ materially from these estimates.

Stock-Based Compensation

We account for stock-based compensation using the fair value recognition method in accordance with U.S. GAAP. We recognize these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of 4 years. We do not estimate the forfeiture rate and recognize forfeitures, if any, when they occur. See Note 6 - Stock-Based Compensation below for additional information concerning our share-based compensation awards.

In addition, as required we record stock-based compensation expense for awards granted to non-employees at fair value of the consideration received or the fair value of the equity instruments issued as they vest over the performance period.

Earnings per Share

Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share is 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. During 2019 we incurred losses; therefore, the effect of any common stock equivalent would be anti-dilutive during the year.

New Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12 Income Taxes (Topic 740). The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. We are currently evaluating the impact, if any this ASU will have on our consolidated financial statements and related disclosures.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments, and issued subsequent amendments to the initial guidance within ASU 2019-04 and ASU 2019-05 (collectively, “ASU 2016-13”). The amendments in ASU 2016-13 replace the incurred loss impairment methodology with the current expected credit loss model, which requires consideration of a broader range of reasonable and supportable information to estimate credit losses. The Company adopted this ASU effective January 1, 2020 and the adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

Property and Equipment

12 Months Ended

Dec. 31, 2020

Property and Equipment [Abstract]

Property and Equipment

Note 3 − Property and Equipment

Our major classes of property and equipment were as follows:

	December 31
	2020			2019
Office furniture	$	79		$	79
Computer equipment		81			81
Total		160			160
Less accumulated depreciation		(149	)		(144	)
Total property and equipment, net	$	11		$	16

Depreciation expense for the years ended December 31, 2020 and 2019 was $5, and $7, respectively.

Commitments, Contingencies and Related Party Transactions	12 Months Ended
	Dec. 31, 2020
Commitments, Contingencies and Related Party Transactions [Abstract]
Commitments, Contingencies and Related Party Transactions	Note 4 − Commitments, Contingencies and Related Party Transactions We lease our offices under an operating lease with a third party expiring in October 2021. We recognize rent expense on a straight-line basis over the term of the lease. Rent expense was $56, for each of the years ended December 31, 2020, and 2019. Future minimum rents due under the lease total $46 in 2021, when the lease expires. 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 $324 and $1,790 in rental fees and reimbursements to the LLC during the years ended December 31, 2020 and 2019, 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 Plan	12 Months Ended
Stock Plan	Dec. 31, 2020
Stock Plan [Abstract]
Stock Plan	Note 5 − Stock Plan We have a stock incentive plan for employees and others called the VirnetX Holding Corporation 2013 Equity Incentive Plan (the “2013 Plan”), which has been approved by our stockholders. To the extent that any award should expire, become un-exercisable or is otherwise forfeited, the shares subject to such award will again become available for issuance under the 2013 Plan. The 2013 Plan provides for the granting of stock options and restricted stock units purchase rights (“RSUs”) to our employees and consultants. Stock options granted under the 2013 Plan may be incentive stock options or nonqualified stock options. Incentive stock options (“ISOs”) may only be granted to our employees (including officers and directors). Nonqualified stock options (“NSOs”) and stock purchase rights may be granted to our employees and consultants. The 2013 Plan will expire in 2023. Options may be granted under the 2013 Plan with an exercise price determined by our Board of Directors, or a duly appointed committee thereof, provided, however, that the exercise price of an option granted to any employee shall be not less than 100% of the fair market value at the date of grant in the case of ISOs or 85% of the fair market value at the date of grant in the case of an NSO. The exercise price of an ISO or NSO granted to one of our Named Executive Officers shall not be less than 100% fair market value of the shares at the date of grant and the exercise price of an ISO granted to a 10% shareholder shall not be less than 110% of the fair market value of the shares on the date of grant. Stock options granted under the 2013 Plan typically vest over four years and have a 10-year term. All RSUs are considered to be granted at the fair value of our stock on the date of grant because they have no exercise price. RSUs typically vest over four years. At December 31, 2020, there were 545,210 shares available for grant under the 2013 Plan.

Stock-Based Compensation

12 Months Ended

Dec. 31, 2020

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 6 − Stock-Based Compensation

The following tables summarize information about stock options and RSUs outstanding at December 31, 2020:

Options Outstanding							Options Vested and Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$ 2.35 - 6.95		4,558,896		7.04	$	4.53		3,147,625		6.47	$	4.26
$ 14.52 - 35.25		1,253,625		1.71	$	23.16		1,253,625		1.71	$	23.16
		5,812,521		5.89	$	8.62		4,401,250		5.11	$	9.64

The following tables summarize activity under the Plan for the indicated periods:

	Options
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2018		5,998,837		$	7.72		—	$	—
Options granted		345,000			6.06		—		—
Options exercised		(663,816	)		1.23		—		—
Options cancelled		(50,000	)		4.95		—		—
Outstanding at December 31, 2019		5,630,021		$	8.49		6.11	$	516
Options granted		747,500			6.07		—		—
Options exercised		(262,031	)		3.99		—		—
Options cancelled		(302,969	)		5.30		—		—
Outstanding at December 31, 2020		5,812,521		$	8.55		5.89	$	3,650
Options exercisable at December 31, 2020		4,401,250		$	9.64		5.11	$	2,927

	RSUs
	Number of RSUs			Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at December 31, 2018		504,994		$	3.83	$	—
RSUs granted		229,996			6.06		—
RSUs vested		(207,334	)		4.07		—
RSUs cancelled		(29,167	)		4.65
Outstanding at December 31, 2019		498,489		$	4.71	$	86
RSUs granted		218,329			6.89		—
RSUs vested		(212,495	)		4.63		—
Outstanding at December 31, 2020		504,323		$	5.69	$	230

Intrinsic value is calculated as the difference between the per-share market price of our common stock on the last trading day of 2020, which was $5.04 and the exercise price of the options. For options exercised, the intrinsic value is the difference between market price and the exercise price on the date of exercise. We received cash proceeds of $1,046 and $816 from stock options exercised in 2020 and 2019, respectively. The total intrinsic value of options exercised was $151 and $2,473 during the years ended December 31, 2020 and 2019, respectively.

Stock-based compensation expense is included in operating expense for each period as follows:

Stock-Based Compensation by Type of Award	Year Ended December 31, 2020		Year Ended December 31, 2019
Stock options	$	2,872	$	2,756
RSUs		1,066		955
Total stock-based compensation expense	$	3,938	$	3,711

As of December 31, 2020, there was $5,249 of unrecognized stock-based compensation expense related to unvested employee stock options and $2,215 of unrecognized stock-based compensation expense related to unvested RSUs. These costs are expected to be recognized over a weighted-average period of 2.24 and 2.33 years, respectively.

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions:

	Year Ended December 31, 2020			Year Ended December 31, 2019
Expected stock price volatility		93.45	%		92.34	%
Risk-free interest rate		0.63	%		2.09	%
Expected life term	6.21 years			6.14 years
Expected dividends		0	%		0	%

Based on the Black-Scholes option pricing model, the weighted average estimated fair value of employee stock options granted was $4.62 and $4.63 per share during the years ended December 31, 2020 and 2019, respectively.

The expected life was determined using the simplified method outlined in ASC 718, “Compensation - Stock Compensation”. Expected volatility of the stock options was based upon historical data and other relevant factors. We have not provided an estimate for forfeitures because we have had nominal forfeited options and RSUs and believed that all outstanding options and RSUs at December 31, 2020, would vest.

Earnings Per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Note 7 − Earnings Per Share

Basic earnings per share are based on the weighted average number of shares outstanding for a period. Diluted earnings per share are based upon the weighted average number of shares and potentially dilutive common shares outstanding. Potential common shares outstanding principally include stock options and RSUs under our stock plan and warrants. During 2019, we incurred losses; therefore, the effect of any common stock equivalent would be anti-dilutive during the year.

The table below sets forth the basic and diluted loss per share calculations:

	2020		2019
Net income (loss)	$	280,429	$	(19,180	)

Basic weighted average number of shares outstanding		70,850		68,564
Effect of dilutive securities		766		—
Diluted weighted average number of shares outstanding		71,616		68,564

Basic earnings (loss) per share	$	3.96	$	(0.28	)
Diluted earnings (loss) per share	$	3.92	$	(0.28	)

Common Stock

12 Months Ended

Dec. 31, 2020

Common Stock [Abstract]

Common Stock

Note 8 − Common Stock

Each share of common stock has the right to one vote. The holders of common stock are entitled to receive dividends whenever funds are legally available and when declared by our Board of Directors, subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends. Our restated articles of incorporation authorize us to issue up to 100,000,000 shares of $0.0001 par value common stock.

On July 30, 2018 we filed a $100,000 universal shelf registration statement on SEC Form S-3. This replacement registration statement was declared effective by the SEC on August 16, 2018. We also entered a new ATM with Cowen on August 31, 2018, under which we could 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 and 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 December 31, 2020, common stock with an aggregate value of up to $21,964 remained available for offer and sale under the ATM agreement.

We sold 1,049,382 and 1,860,483 shares of common stock under the ATM program during the years ended December 31, 2020 and 2019, respectively. The average sales price per common share sold during the year ended December 31, 2020 was $4.41 and the aggregate proceeds from the sales totaled $4,627 during the period. Sales commissions, fees and other costs associated with the ATM transactions totaled $139 for 2020. The average sales price per common share sold during the year ended December 31, 2019 was $5.84 and the aggregate proceeds from the sales totaled $10,866 during the period. Sales commissions, fees and other costs associated with the ATM transactions totaled $326 for 2019.

Dividends

On May 8, 2020, we declared a one-time cash dividend to shareholders of record as of the close of business on May 18, 2020 of $1 per share of common stock, payable on May 26, 2020. The timing and amounts of future dividends, if any, will depend on market conditions, corporate business and financial considerations and regulatory requirements.

Warrants

In 2020, we issued warrants 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. The weighted average fair value at the grant date was $4.16 per warrant. The fair value at the grant date was estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions (i) dividend yield on our common stock of 0 percent (ii) expected stock price volatility of 97 percent (iii) a risk-free interest rate of 0.27 percent and (iv) and expected option term of 5 years.

Warrants Issued	Exercise Price	Outstanding and Exercisable December 31, 2019	Issued	Exercised	Terminated / Cancelled	Outstanding and Exercisable December 31, 2020	Expiration Date
25,000	$7.00	25,000	—	—	(25,000)	—	April 30, 2020
25,000	$5.75	—	25,000	—	—	25,000	April 30, 2025
	—	25,000	25,000	—	(25,000)	25,000	—

Employee Benefit Plan	12 Months Ended
Employee Benefit Plan	Dec. 31, 2020
Employee Benefit Plan [Abstract]
Employee Benefit Plan	Note 9 − Employee Benefit Plan We sponsor a defined contribution 401k plan covering substantially all our employees. Our matching contribution to the plan was approximately $112 and $101 in 2020 and 2019, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes [Abstract]

Income Taxes

Note 10 − Income Taxes

The income tax provision (benefit) is comprised of the following:

	Year Ended December 31, 2020			Year Ended December 31, 2019
Current:
Federal	$	35,122		$	—
State		950			(393	)
		36,072			(393	)
Deferred:
Federal		(8,816	)		—
State		(233	)		—
		(9,049	)		—
Total income tax provision (benefit)	$	27,023		$	(393	)

A reconciliation of the United States federal statutory income tax rate to our effective income tax rate is as follows:

	Year Ended December 31, 2020			Year Ended December 31, 2019
United States federal statutory rate		21.00	%		21.00	%
State taxes, net of federal benefit		0.17	%		1.99	%
Valuation allowance		(12.22	)%		(21.96	)%
Stock based compensation		(0.01	)%		—
R&D Credit		(0.21	)%		1.34	%
Other		0.06	%		(0.38	)%
Effective income tax rate		8.79	%		1.99	%

The Company’s effective tax rate for both 2020 and 2019 was lower than the statutory federal income tax rate primarily due to the change of valuation allowance. Due to the income in 2020, our valuation allowance against federal net deferred tax assets was fully released in 2020. We continue to provide partial valuation allowance against California net operating loss and research credit carryovers due to the fact that we have no income in California.

Deferred tax assets (liabilities) consist of the following:

	As of December 31, 2020			As of December 31, 2019
Deferred tax assets:
Reserves and accruals	$	48		$	62
Research and development credits and other credits		13			1,730
Net operating loss carry forward		598			27,907
Stock based compensation		8,998			8,402
Other		3			11
Total deferred tax assets	$	9,660		$	38,112

Valuation allowance		(611	)		(38,112	)
Deferred tax assets after valuation allowance		9,049			—

Total deferred tax liability		—			—

Net deferred tax assets	$	9,049		$	—

In 2020 and 2019, we had pre-tax income of $307,452 and pre-tax losses of $19,573, respectively. At December 31, 2020, we had federal and state net operating loss carryforwards of approximately $0 and $107,989, respectively. All of the federal net operating loss carryforwards has been utilized to offset taxable income in 2020. The state net operating loss carryforward will be expiring beginning in 2029.

A valuation allowance is provided for deferred tax assets when, in our judgment, based upon currently available information and other factors, it is more likely than not that all or a portion of such deferred income tax assets will not be realized. The determination of the need for a valuation allowance is based on an on-going evaluation of current information including, among other things, historical operating results, estimates of future earnings in different taxing jurisdictions and the expected timing of the reversals of temporary differences. We believe the determination to record, or reduce, a valuation allowance associated with a deferred income tax asset is a significant accounting estimate because it is based, among other things, on an estimate of future taxable income in the United States and certain other jurisdictions, which is susceptible to change and may or may not occur, and because the impact of adjusting a valuation allowance may be material. In determining when to release the valuation allowance established against our net deferred income tax assets, we consider all available evidence, both positive and negative.

Internal Revenue Code Section 382 places a limitation on the amount of net operating loss carryforwards that can be used to offset taxable income after a change in control (generally greater than 50% change in ownership) of a loss corporation. California, the state in which our headquarters was once located, has similar rules. Since the Company did not have a greater than 50% change of control as defined under the Internal Revenue Code, no limitation applies to the Company’s Net Operating Losses.

We are required to recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. In 2019, we released all ASC 740-10 uncertain tax positions due to the expiring of the statute of limitation. At December 31, 2020, we have no uncertain tax positions.

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 NOLs and tax credits generated in these years were utilized in 2020. The statute of limitation for these years shall expire three years after the date of filing 2020 income tax returns.

Our policy is to recognize interest and penalties, if any, accrued on any unrecognized tax benefits, as a component of income tax expense. We had no interest or penalties accrued for the year ended December 31, 2020 or 2019.

Reconciliation of provision for uncertain tax position discussed above:

	Year Ended December 31, 2020		Year Ended December 31, 2019
Balance at the beginning of the year	$	—	$	316
Additions based on tax positions related to the current year		—		—
Additions for tax positions of prior years		—		—
Settlements		—		—
Lapse of applicable statute of limitations		—		(316	)
Balance at the end of the year	$	—	$	—

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Fair Value Measurement

12 Months Ended

Dec. 31, 2020

Fair Value Measurement [Abstract]

Fair Value Measurement

Note 11 − Fair Value Measurement

We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The carrying amounts for cash and cash equivalents, investments in certificates of deposit, accounts payable and accrued expenses approximate their fair values due to the short period of time until maturity.

Mutual funds: Valued at the quoted net asset value (NAV) of shares held.

U.S. agency and treasury securities: Fair value measured at the closing price reported on the active market on which the individual securities are traded.

The following table shows the adjusted cost, gross unrealized gains, gross unrealized losses, and fair value of our financial assets as of December 31, 2020 and 2019 (in thousands):

	December 31, 2020
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Investments Available for Sale
Cash	$	121,785	$	—	$	—		$	121,785	$	121,785	$	—
Level 1:
Mutual funds		70,996		—		—			70,996		70,996		—
U.S. agency securities		13,767		2		—			13,769		127		13,642
U.S. treasury securities		14,707		—		(1	)		14,706		—		14,706
		99,470		2		(1	)		99,471		71,123		28,348
Total	$	221,255	$	2	$	(1	)	$	221,256	$	192,908	$	28,348

	December 31, 2019
	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Investments Available for Sale
Cash	$	2,076	$	—	$	—	$	2,076	$	2,076	$	—
Level 1:
Mutual funds		613		—		—		613		613		—
U.S. agency securities		2,837		3		—		2,840		446		2,394
		3,450		3		—		3,453		1,059		2,394
Total	$	5,526	$	3	$	—	$	5,529	$	3,135	$	2,394

The maturities of our marketable securities generally range from within one to two years. Actual maturities could differ from contractual maturities due to call or prepayment provisions.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Litigation	12 Months Ended
Litigation	Dec. 31, 2020
Litigation [Abstract]
Litigation	Note 12 – Litigation (all dollar amounts in this section are expressed in thousands except for rates per device) We have several 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”) and the Supreme Court of the United States (“SCOTUS”). 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 judgment, 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 judgment was $439,700, including $302,400 (jury verdict), $41,300 (enhanced damages) and $96,000 (costs, fees and interest). On October 27, 2017 Apple appealed the final judgment entered on September 29, 2017 to the USCAFC. 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’s final judgment. Apple filed a petition for panel rehearing and rehearing en-banc in this matter on February 21, 2019. On October 1, 2019, USCAFC issued an order denying Apple’s petition. Apple filed a petition for a writ of certiorari with the SCOTUS, which was denied on February 24, 2020. Prior to the SCOTUS decision denying Apple’s petition for a writ of certiorari, on February 20, 2020, Apple filed a Rule 60(b) motion for relief from judgment with the USDC, seeking relief from the district court’s September 29, 2017 final judgment. VirnetX filed a responsive brief in opposition on March 5, 2020. On March 13, 2020, the Company received payment of $454,034 from Apple, representing the previously announced final judgment with interest in this case. Apple sought payment relief by filing a motion under rule 60(b). On September 1, 2020 USDC issued an order denying Apple’s motion for relief of judgement. This case is now closed. 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 Generation, iPad mini, and the latest Macintosh computers; these products were not included in the Apple I case because they were released after the Apple I case was initiated. Post-trial motions hearing was held on July 18, 2018. On August 31, 2018, the USDC entered a Final Judgment and issued its Memorandum Opinion and Order regarding post-trial motions, affirming the jury’s verdict of $502,600 and granting VirnetX motions for supplemental damages, a sunset royalty and the royalty rate of $1.20 per infringing iPhone, iPad and Mac products, pre-judgment and post-judgment interest and costs. Apple filed a notice of appeal with the USCAFC in the Apple II case. On October 9, 2018, USCAFC docketed the appeal as Case No. 19-1050 - VirnetX Inc. v. Apple Inc . On January 24, 2019 Apple filed its opening brief. We filed our response brief on March 1, 2019. Apple filed its reply brief on April 5, 2019. The oral arguments were heard on October 4, 2019. On November 22, 2019, the USCAFC issued an opinion affirming the district court’s findings that Apple is precluded from making certain invalidity arguments and that Apple infringed the ’135 and ’151 patents; reversing the USDC’s finding that Apple infringed the ’504 and ’211 patents; and remanding the case for proceedings on damages. Apple sought panel and en banc rehearing, which the USCAFC denied on February 10, 2020. On February 22, 2020, the USDC issued a scheduling order for the parties to brief the court about the need for a new trial for recalculating the damages. We filed our motion for entry of judgment on February 28, 2020. The arguments on this matter were heard on April 14, 2020. In its order, unsealed on May 1, 2020, the USDC denied VirnetX’s motion for entry of a new judgment based on the prior jury verdict and ordered a new jury trial on damages. On August 10, 2020, the USDC granted Apple’s motion for continuance and reset the date to October 26, 2020. On October 30, 2020, a jury returned a $502,800 verdict in favor of VirnetX based on Apple’s infringement of two network security patents: VirnetX US Patents No. 6,502,135 and No. 7,490,151. The jury verdict called for damages of $0.84 per accused device since the 2013 launch of Apple’s iOS 7 operating system and represents 598,629,580 infringing units from US sales only. On January 15, 2021, the district court denied Apple’s motion for judgment as a matter of law, and on February 4, 2021, Apple filed a notice of appeal to the USCAFC. VirnetX Inc. v. Mangrove Partners Master Fund, Ltd., Apple Inc. (USCAFC Case 20-2271) and VirnetX Inc. v. Mangrove Partners Master Fund, Ltd., Apple Inc., and Black Swamp, LLC (USAFC Case 20-2272) On September 15, 2020, we filed with the USCAFC an appeal of the invalidity findings by the PTAB in inter-partes review proceedings IPR2015-01046 and IPR2016-00062 involving our U.S. Patent No. 6,502,135, and an appeal of the invalidity findings by the PTAB in inter partes review proceedings IPR2015-1047, IPR2016- 00063, and IPR2016-00167 involving our U.S. Patent No. 7,490,151. On September 25, 2020, the USCAFC issued an order consolidating the two appeals. On December 15, 2020, we filed a motion to vacate the PTAB decisions below and to remand these appeals to the PTAB, which remains pending. In view of our motion to remand, our deadline to file an initial brief is currently stayed. Iancu v. Luoma (SCOTUS Case 20-74) On July 23, 2020, the United States and the USPTO (collectively, “the United States”) filed a petition for a writ of certiorari from several decisions by the USAFC, including decisions in VirnetX Inc. v. Cisco Systems, Inc., Nos. 2019-1671, and VirnetX Inc. v. Iancu, Nos. 2017-2593, -2594. In those cases, the USAFC granted VirnetX’s motions to vacate the underlying decisions of the PTAB on the basis of Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019), and remanded for further proceedings. The United States requested that the SCOTUS hold its certiorari petition pending the disposition of the United States’ separate petition in United States v. Arthrex, Inc., No. 19-1434 (filed June 25, 2020). On August 26, 2020, VirnetX filed a response, agreeing that the United States’ certiorari petition should be held pending the disposition of the petition for a writ of certiorari in No. 19-1434 (and related petitions filed by private parties in Nos. 19-1452 and 19-1458), and any further SCOTUS proceedings. On October 13, 2020, SCOTUS granted the United States’ petition for a writ of certiorari in No. 19-1434 as to USAFC Case No. 2018-2140, and the petitions for writs of certiorari in Nos. 19-1452 and 19-1458, all limited to Questions 1 and 2 as set forth in the July 22, 2020 Memorandum for the United States filed in No. 19-1434. The consolidated petition is seeking review of decisions by the USCAFC holding that administrative patent judges (“APJ”) of the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office must be appointed by the President and confirmed by the Senate; and, whether the remedy imposed by USCAFC that federal laws that place restrictions on when officials can be removed from office cannot apply to APJ, was the appropriate one. SCOTUS heard oral argument in these consolidated cases on March 1, 2021. McKool Smith P.C. v. VirnetX, Inc., AAA Case No. 01-20-0003-7975 On March 23, 2020, the law firm of McKool Smith, P.C. (“McKool”) filed a Demand for Arbitration against VirnetX, Inc. with the American Arbitration Association (“AAA”). In its demand, McKool claims that a retention agreement it entered into in 2010 with VirnetX entitles it to a contingency fee arising from the recent 2020 payment made by Apple. McKool claims it is owed approximately $36,300 (or 8% of the Apple I payment). We have filed a general response with the AAA denying McKool’s claim and are contesting the matter vigorously. An evidentiary hearing was held on the matter during the week of February 22, 2021 and the parties will be submitting additional briefing. A ruling is expected sometime thereafter. Neal Hurwitz v. Kendall Larsen et al. (Case 2020-0425-JRS) On June 2, 2020, stockholder Neal Hurwitz filed a verified derivative complaint in the Delaware Court of Chancery against Kendall Larsen, Robert D. Short Ill, Gary Feiner, Michael F. Angelo, and Thomas M. O’Brien and naming the Company as nominal defendant. The lawsuit alleges breaches of fiduciary duty, corporate waste, and unjust enrichment arising out of a series of previously-disclosed transactions and compensation awards and seeks an award of monetary damages and equitable relief. On July 1, 2020, the defendants filed a motion to dismiss the complaint based on a failure to plead demand futility and a failure to state a claim on which relief can be granted and, on August 19, 2020, the defendants filed an opening brief in support of their motion to dismiss. On October 16, 2020, plaintiff amended his complaint rather than respond to the arguments in the defendants’ opening brief. On October 23, 2020, the defendants filed a renewed motion to dismiss plaintiff’s amended complaint based on a failure to plead demand futility and a failure to state a claim on which relief can be granted. On January 12, 2021, Hurwitz voluntarily dismissed his suit without prejudice. Other Legal Matters 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	12 Months Ended
Leases	Dec. 31, 2020
Leases [Abstract]
Leases	Note 13 – Leases We lease office space under an operating lease which expires on October 31, 2021. At December 31, 2020, the underlying ROU asset and lease liability totaled $44. At December 31, 2019, the underlying ROU asset and lease liability totaled $97. Lease expense totaled $56 in both 2020 and 2019. We also lease a facility for corporate promotional and marketing purposes which was prepaid at inception and originally expired in 2024. In September 2020, the lease was extended for one year to 2025, due to COVID use-restrictions in 2020. No other terms of the original agreement were affected and there was no impact on cash flow. At December 31, 2020 and 2019, the ROU asset totaled $1,248 and $1,604, respectively; lease expense totaled $356 and $385, during 2020 and 2019, respectively.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies [Abstract]

Use of Estimates

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

Revenue Recognition

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.

Classification of Payment Received in the Company’s Condensed Consolidated Statement of Operations
Year Ended:
	December 31, 2020
Revenue (royalties)	$	302,428
Operating expenses: selling, general and administrative (reimbursed litigation costs)		2,114
Other income: gain (willful infringement)		41,271
Other income: interest income (pre- and post-judgment interest)		108,221
Total cash received	$	454,034

Licensing Costs

Contingent Gains

Cash and Cash Equivalents

Investments

Property and Equipment

Concentration of Credit Risk and Other Risks and Uncertainties

Fair Value

The carrying amounts of our financial instruments, including cash equivalents, accounts payable, and accrued liabilities, approximate fair value because of their generally short maturities.

Intangible Assets

Impairment of Long-Lived Assets

Research and Development

Income Taxes

Stock-Based Compensation

Earnings per Share

New Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies [Abstract]

Classification of Payment Received in Condensed Consolidated Statement of Operations

Classification of Payment Received in the Company’s Condensed Consolidated Statement of Operations
Year Ended:
	December 31, 2020
Revenue (royalties)	$	302,428
Operating expenses: selling, general and administrative (reimbursed litigation costs)		2,114
Other income: gain (willful infringement)		41,271
Other income: interest income (pre- and post-judgment interest)		108,221
Total cash received	$	454,034

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2020

Property and Equipment [Abstract]

Property and Equipment

Our major classes of property and equipment were as follows:

	December 31
	2020			2019
Office furniture	$	79		$	79
Computer equipment		81			81
Total		160			160
Less accumulated depreciation		(149	)		(144	)
Total property and equipment, net	$	11		$	16

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Stock-Based Compensation [Abstract]

Information about Stock Options Outstanding

The following tables summarize information about stock options and RSUs outstanding at December 31, 2020:

Options Outstanding							Options Vested and Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$ 2.35 - 6.95		4,558,896		7.04	$	4.53		3,147,625		6.47	$	4.26
$ 14.52 - 35.25		1,253,625		1.71	$	23.16		1,253,625		1.71	$	23.16
		5,812,521		5.89	$	8.62		4,401,250		5.11	$	9.64

Stock Option Activity

The following tables summarize activity under the Plan for the indicated periods:

	Options
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2018		5,998,837		$	7.72		—	$	—
Options granted		345,000			6.06		—		—
Options exercised		(663,816	)		1.23		—		—
Options cancelled		(50,000	)		4.95		—		—
Outstanding at December 31, 2019		5,630,021		$	8.49		6.11	$	516
Options granted		747,500			6.07		—		—
Options exercised		(262,031	)		3.99		—		—
Options cancelled		(302,969	)		5.30		—		—
Outstanding at December 31, 2020		5,812,521		$	8.55		5.89	$	3,650
Options exercisable at December 31, 2020		4,401,250		$	9.64		5.11	$	2,927

	RSUs
	Number of RSUs			Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at December 31, 2018		504,994		$	3.83	$	—
RSUs granted		229,996			6.06		—
RSUs vested		(207,334	)		4.07		—
RSUs cancelled		(29,167	)		4.65
Outstanding at December 31, 2019		498,489		$	4.71	$	86
RSUs granted		218,329			6.89		—
RSUs vested		(212,495	)		4.63		—
Outstanding at December 31, 2020		504,323		$	5.69	$	230

Stock-Based Compensation by Type of Award

Stock-based compensation expense is included in operating expense for each period as follows:

Stock-Based Compensation by Type of Award	Year Ended December 31, 2020		Year Ended December 31, 2019
Stock options	$	2,872	$	2,756
RSUs		1,066		955
Total stock-based compensation expense	$	3,938	$	3,711

Fair Value Assumptions

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions:

	Year Ended December 31, 2020			Year Ended December 31, 2019
Expected stock price volatility		93.45	%		92.34	%
Risk-free interest rate		0.63	%		2.09	%
Expected life term	6.21 years			6.14 years
Expected dividends		0	%		0	%

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Basic and Diluted Loss Per Share Calculations

The table below sets forth the basic and diluted loss per share calculations:

	2020		2019
Net income (loss)	$	280,429	$	(19,180	)

Basic weighted average number of shares outstanding		70,850		68,564
Effect of dilutive securities		766		—
Diluted weighted average number of shares outstanding		71,616		68,564

Basic earnings (loss) per share	$	3.96	$	(0.28	)
Diluted earnings (loss) per share	$	3.92	$	(0.28	)

Common Stock (Tables)

12 Months Ended

Dec. 31, 2020

Common Stock [Abstract]

Information about Warrants Outstanding

Warrants Issued	Exercise Price	Outstanding and Exercisable December 31, 2019	Issued	Exercised	Terminated / Cancelled	Outstanding and Exercisable December 31, 2020	Expiration Date
25,000	$7.00	25,000	—	—	(25,000)	—	April 30, 2020
25,000	$5.75	—	25,000	—	—	25,000	April 30, 2025
	—	25,000	25,000	—	(25,000)	25,000	—

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes [Abstract]

Income Tax Provision (Benefit)

The income tax provision (benefit) is comprised of the following:

	Year Ended December 31, 2020			Year Ended December 31, 2019
Current:
Federal	$	35,122		$	—
State		950			(393	)
		36,072			(393	)
Deferred:
Federal		(8,816	)		—
State		(233	)		—
		(9,049	)		—
Total income tax provision (benefit)	$	27,023		$	(393	)

Effective Income Tax Rate Reconciliation

A reconciliation of the United States federal statutory income tax rate to our effective income tax rate is as follows:

	Year Ended December 31, 2020			Year Ended December 31, 2019
United States federal statutory rate		21.00	%		21.00	%
State taxes, net of federal benefit		0.17	%		1.99	%
Valuation allowance		(12.22	)%		(21.96	)%
Stock based compensation		(0.01	)%		—
R&D Credit		(0.21	)%		1.34	%
Other		0.06	%		(0.38	)%
Effective income tax rate		8.79	%		1.99	%

Deferred Tax Assets and Liabilities

Deferred tax assets (liabilities) consist of the following:

	As of December 31, 2020			As of December 31, 2019
Deferred tax assets:
Reserves and accruals	$	48		$	62
Research and development credits and other credits		13			1,730
Net operating loss carry forward		598			27,907
Stock based compensation		8,998			8,402
Other		3			11
Total deferred tax assets	$	9,660		$	38,112

Valuation allowance		(611	)		(38,112	)
Deferred tax assets after valuation allowance		9,049			—

Total deferred tax liability		—			—

Net deferred tax assets	$	9,049		$	—

Reconciliation of Provision for Uncertain Tax Position

Reconciliation of provision for uncertain tax position discussed above:

	Year Ended December 31, 2020		Year Ended December 31, 2019
Balance at the beginning of the year	$	—	$	316
Additions based on tax positions related to the current year		—		—
Additions for tax positions of prior years		—		—
Settlements		—		—
Lapse of applicable statute of limitations		—		(316	)
Balance at the end of the year	$	—	$	—

Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Measurement [Abstract]

Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets

The following table shows the adjusted cost, gross unrealized gains, gross unrealized losses, and fair value of our financial assets as of December 31, 2020 and 2019 (in thousands):

	December 31, 2020
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Investments Available for Sale
Cash	$	121,785	$	—	$	—		$	121,785	$	121,785	$	—
Level 1:
Mutual funds		70,996		—		—			70,996		70,996		—
U.S. agency securities		13,767		2		—			13,769		127		13,642
U.S. treasury securities		14,707		—		(1	)		14,706		—		14,706
		99,470		2		(1	)		99,471		71,123		28,348
Total	$	221,255	$	2	$	(1	)	$	221,256	$	192,908	$	28,348

	December 31, 2019
	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Investments Available for Sale
Cash	$	2,076	$	—	$	—	$	2,076	$	2,076	$	—
Level 1:
Mutual funds		613		—		—		613		613		—
U.S. agency securities		2,837		3		—		2,840		446		2,394
		3,450		3		—		3,453		1,059		2,394
Total	$	5,526	$	3	$	—	$	5,529	$	3,135	$	2,394

Formation and Business of the Company (Details) - Patents [Member]	Dec. 31, 2020 Patent
Formation and Business of the Company Disclosure [Abstract]
Number of patents and pending applications	194
U.S. [Member]
Formation and Business of the Company Disclosure [Abstract]
Number of patents and pending applications	70
Foreign [Member]
Formation and Business of the Company Disclosure [Abstract]
Number of patents and pending applications	124

Summary of Significant Accounting Policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) Institution	Dec. 31, 2019 USD ($)
Revenue Recognition [Abstract]
Revenue (royalties)	$ 302,636	$ 85
Other Income [Abstract]
Gain (willful infringement)	41,271	0
Licensing Costs [Abstract]
Costs accrued in conjunction with proceeds from litigation	$ 90,101	$ 0
Concentration of Credit Risk and Other Risks and Uncertainties [Abstract]
Number of financial institutions holding company's cash \| Institution	2
Stock-Based Compensation [Abstract]
Option vesting term	4 years
Minimum [Member]
Property and Equipment [Abstract]
Useful lives	5 years
Intangible Assets [Abstract]
Estimated useful lives	3 years
Maximum [Member]
Property and Equipment [Abstract]
Useful lives	7 years
Intangible Assets [Abstract]
Estimated useful lives	15 years
Positive Outcome of Litigation [Member]
Revenue Recognition [Abstract]
Revenue (royalties)	$ 302,428
Operating expense [Abstract]
Selling, general and administrative (reimbursed litigation costs)	2,114
Other Income [Abstract]
Gain (willful infringement)	41,271
Interest income (pre- and post-judgment interest)	108,221
Total cash received	$ 454,034
Highly Liquid Debt Investments [Member] \| Maximum [Member]
Investments [Abstract]
Contractual maturities of investment securities	2 years

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property and Equipment [Abstract]
Property and equipment, gross	$ 160	$ 160
Less accumulated depreciation	(149)	(144)
Property and equipment, net	11	16
Depreciation expense	5	7
Office Furniture [Member]
Property and Equipment [Abstract]
Property and equipment, gross	79	79
Computer Equipment [Member]
Property and Equipment [Abstract]
Property and equipment, gross	$ 81	$ 81

Commitments, Contingencies and Related Party Transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Commitments, Contingencies and Related Party Transactions [Abstract]
Rent expense	$ 56	$ 56
Future minimum rents due in 2021	$ 46
Offices [Member]
Commitments, Contingencies and Related Party Transactions [Abstract]
Operating lease, expiration date	Oct. 31, 2021
K2 Investment Fund LLC [Member] \| Aircraft [Member]
Commitments, Contingencies and Related Party Transactions [Abstract]
Rental fees incurred for use of aircraft	$ 324	$ 1,790
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 Plan (Details)	12 Months Ended
Stock Plan (Details)	Dec. 31, 2020 shares
Stock Plan [Abstract]
Vesting period	4 years
2013 Plan [Member]
Stock Plan [Abstract]
Shares available for grant (in shares)	545,210
2013 Plan [Member] \| Stock Options [Member]
Stock Plan [Abstract]
Vesting period	4 years
Term of award	10 years
2013 Plan [Member] \| Stock Options [Member] \| Named Executive Officers [Member] \| Minimum [Member]
Stock Plan [Abstract]
Exercise price of option granted as percentage of fair market value of shares at date of grant	100.00%
2013 Plan [Member] \| Stock Options [Member] \| 10% Shareholder [Member] \| Minimum [Member]
Stock Plan [Abstract]
Exercise price of option granted as percentage of fair market value of shares at date of grant	110.00%
2013 Plan [Member] \| Incentive Stock Options [Member] \| Minimum [Member]
Stock Plan [Abstract]
Exercise price of option granted as percentage of fair market value of shares at date of grant	100.00%
2013 Plan [Member] \| Nonqualified Stock Options [Member] \| Minimum [Member]
Stock Plan [Abstract]
Exercise price of option granted as percentage of fair market value of shares at date of grant	85.00%
2013 Plan [Member] \| Restricted Stock Purchase Rights ("RSU") [Member]
Stock Plan [Abstract]
Vesting period	4 years

Stock-Based Compensation, Information about Stock Options Outstanding (Details) - Stock Options [Member]	12 Months Ended
	Dec. 31, 2020 $ / shares shares
Information about Stock Options Outstanding [Abstract]
Options outstanding, number outstanding (in shares) \| shares	5,812,521
Options outstanding, weighted average remaining contractual life	5 years 10 months 20 days
Options outstanding, weighted average exercise price (in dollars per share)	$ 8.62
Options vested and exercisable, number exercisable (in shares) \| shares	4,401,250
Options vested and exercisable, weighted average remaining contractual life	5 years 1 month 9 days
Options vested and exercisable, weighted average exercise price (in dollars per share)	$ 9.64
$2.35 - 6.95 [Member]
Information about Stock Options Outstanding [Abstract]
Exercise price range, lower range limit (in dollars per share)	2.35
Exercise price range, upper range limit (in dollars per share)	$ 6.95
Options outstanding, number outstanding (in shares) \| shares	4,558,896
Options outstanding, weighted average remaining contractual life	7 years 14 days
Options outstanding, weighted average exercise price (in dollars per share)	$ 4.53
Options vested and exercisable, number exercisable (in shares) \| shares	3,147,625
Options vested and exercisable, weighted average remaining contractual life	6 years 5 months 19 days
Options vested and exercisable, weighted average exercise price (in dollars per share)	$ 4.26
$14.52 - 35.25 [Member]
Information about Stock Options Outstanding [Abstract]
Exercise price range, lower range limit (in dollars per share)	14.52
Exercise price range, upper range limit (in dollars per share)	$ 35.25
Options outstanding, number outstanding (in shares) \| shares	1,253,625
Options outstanding, weighted average remaining contractual life	1 year 8 months 15 days
Options outstanding, weighted average exercise price (in dollars per share)	$ 23.16
Options vested and exercisable, number exercisable (in shares) \| shares	1,253,625
Options vested and exercisable, weighted average remaining contractual life	1 year 8 months 15 days
Options vested and exercisable, weighted average exercise price (in dollars per share)	$ 23.16

Stock-Based Compensation, Summary of Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation [Abstract]
Per share market price of common stock on last trading day of year (in dollars per share)	$ 5.04
Proceeds from exercise of options	$ 1,046	$ 816
Stock Options [Member]
Options, number of shares [Roll Forward]
Outstanding, beginning of period (in shares)	5,630,021	5,998,837
Options granted (in shares)	747,500	345,000
Options exercised (in shares)	(262,031)	(663,816)
Options cancelled (in shares)	(302,969)	(50,000)
Outstanding, end of period (in shares)	5,812,521	5,630,021
Options exercisable, end of period (in shares)	4,401,250
Options, weighted average exercise price [Roll Forward]
Outstanding, beginning of period (in dollars per share)	$ 8.49	$ 7.72
Options granted (in dollars per share)	6.07	6.06
Options exercised (in dollars per share)	3.99	1.23
Options cancelled (in dollars per share)	5.30	4.95
Outstanding, end of period (in dollars per share)	8.55	$ 8.49
Options exercisable, end of period (in dollars per share)	$ 9.64
Options, additional disclosures [Abstract]
Options outstanding, weighted average remaining contractual life	5 years 10 months 20 days	6 years 1 month 9 days
Options exercisable, weighted average remaining contractual life	5 years 1 month 9 days
Options outstanding, aggregate intrinsic value	$ 3,650	$ 516
Options exercisable, aggregate intrinsic value	2,927
Share-based Compensation [Abstract]
Proceeds from exercise of options	1,046	816
Total intrinsic value of options exercised	$ 151	$ 2,473
Restricted Stock Units (RSUs) [Member]
RSUs, number of RSUs [Roll Forward]
Outstanding, beginning of period (in shares)	498,489	504,994
RSUs granted (in shares)	218,329	229,996
RSUs vested (in shares)	(212,495)	(207,334)
RSUs cancelled (in shares)		(29,167)
Outstanding, end of period (in shares)	504,323	498,489
RSUs, weighted average grant date fair value [Abstract]
Outstanding, beginning of period (in dollars per share)	$ 4.71	$ 3.83
RSUs granted (in dollars per share)	6.89	6.06
RSUs vested (in dollars per share)	4.63	4.07
RSUs cancelled (in dollars per share)		4.65
Outstanding, end of period (in dollars per share)	$ 5.69	$ 4.71
RSUs, aggregate intrinsic value [Abstract]
Outstanding, end of period	$ 230	$ 86	$ 0

Stock-Based Compensation, Stock-Based Compensation by Type of Award (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation [Abstract]
Stock-based compensation expense	$ 3,938	$ 3,711
Operating Expense [Member]
Share-based Compensation [Abstract]
Stock-based compensation expense	3,938	3,711
Stock Options [Member]
Compensation cost not yet recognized [Abstract]
Unrecognized stock-based compensation expense expected to be recognized related to non-vested stock options	$ 5,249
Weighted-average period for recognition of unrecognized stock-based compensation expense	2 years 2 months 26 days
Stock Options [Member] \| Operating Expense [Member]
Share-based Compensation [Abstract]
Stock-based compensation expense	$ 2,872	2,756
RSUs [Member]
Compensation cost not yet recognized [Abstract]
Unrecognized stock-based compensation expense expected to be recognized related to non-vested RSUs	$ 2,215
Weighted-average period for recognition of unrecognized stock-based compensation expense	2 years 3 months 29 days
RSUs [Member] \| Operating Expense [Member]
Share-based Compensation [Abstract]
Stock-based compensation expense	$ 1,066	$ 955

Stock-Based Compensation, Fair Value Assumptions Used (Details) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Fair value assumptions used in estimating fair value of each option grant [Abstract]
Expected stock price volatility	93.45%	92.34%
Risk-free interest rate	0.63%	2.09%
Expected life term	6 years 2 months 15 days	6 years 1 month 20 days
Expected dividends	0.00%	0.00%
Options granted, weighted average grant date fair value (in dollars per share)	$ 4.62	$ 4.63

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Calculation of basic and diluted loss per share [Abstract]
Net income (loss)	$ 280,429	$ (19,180)
Basic weighted average number of shares outstanding (in shares)	70,850,311	68,564,321
Effect of dilutive securities (in shares)	766,000	0
Diluted weighted average number of shares outstanding (in shares)	71,615,843	68,564,321
Basic earnings (loss) per share (in dollars per share)	$ 3.96	$ (0.28)
Diluted earnings (loss) per share (in dollars per share)	$ 3.92	$ (0.28)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Common Stock (Details) $ / shares in Units, $ in Thousands	12 Months Ended
Common Stock (Details) $ / shares in Units, $ in Thousands	Dec. 31, 2020 USD ($) Vote $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	May 08, 2020 $ / shares	Aug. 31, 2018 USD ($)	Jul. 30, 2018 USD ($)
Common Stock [Abstract]
Common stock, shares authorized (in shares) \| shares	100,000,000	100,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001	$ 0.0001
Dividend [Abstract]
Dividend declared date	May 08, 2020
Cash dividend (in dollars per share) \| $ / shares			$ 1
Dividend payable date	May 26, 2020
Dividend record date	May 18, 2020
Common Stock [Member]
Common Stock [Abstract]
Number of votes entitled to each share of common stock \| Vote	1
Common stock, shares authorized (in shares) \| shares	100,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001
Number of shares of common stock sold (in shares) \| shares	1,049,382	1,860,483
Universal Shelf Registration Statement [Member] \| Common Stock [Member] \| Maximum [Member]
Common Stock [Abstract]
Securities offered for sale, aggregate value					$ 100,000
ATM Agreement [Member] \| Common Stock [Member]
Common Stock [Abstract]
Number of shares of common stock sold (in shares) \| shares	1,049,382	1,860,483
Average sales price per common share (in dollars per share) \| $ / shares	$ 4.41	$ 5.84
Aggregate proceeds from sales of common stock	$ 4,627	$ 10,866
Sales commissions, fees and other costs associated with issuance of common stock	139	$ 326
ATM Agreement [Member] \| Common Stock [Member] \| Maximum [Member]
Common Stock [Abstract]
Securities offered for sale, aggregate value				$ 50,000
Aggregate value of common stock available for offer and sale	$ 21,964

Common Stock, Warrants (Details) - $ / shares	12 Months Ended
Common Stock, Warrants (Details) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Warrants [Abstract]
Dividend yield	0.00%	0.00%
Expected stock price volatility	93.45%	92.34%
Risk-free interest rate	0.63%	2.09%
Expected option term	6 years 2 months 15 days	6 years 1 month 20 days
Warrants [Member]
Warrants [Abstract]
Outstanding and Exercisable (in shares)	25,000
Issued (in shares)	25,000
Exercised (in shares)	0
Terminated/ cancelled (in shares)	(25,000)
Outstanding and Exercisable (in shares)	25,000	25,000
Warrants [Member] \| Warrants Issued in 2015 [Member]
Warrants [Abstract]
Warrants issued (in shares)	25,000
Exercise price (in dollars per share)	$ 7.00
Outstanding and Exercisable (in shares)	25,000
Issued (in shares)	0
Exercised (in shares)	0
Terminated/ cancelled (in shares)	(25,000)
Outstanding and Exercisable (in shares)	0	25,000
Expiration date	Apr. 30, 2020
Warrants [Member] \| Warrants Issued in 2020 [Member]
Warrants [Abstract]
Weighted average fair value of warrants at grant date (in dollars per share)	$ 4.16
Dividend yield	0.00%
Expected stock price volatility	97.00%
Risk-free interest rate	0.27%
Expected option term	5 years
Warrants issued (in shares)	25,000
Exercise price (in dollars per share)	$ 5.75
Outstanding and Exercisable (in shares)	0
Issued (in shares)	25,000
Exercised (in shares)	0
Terminated/ cancelled (in shares)	0
Outstanding and Exercisable (in shares)	25,000	0
Expiration date	Apr. 30, 2025

Employee Benefit Plan (Details) - USD ($) $ in Thousands	12 Months Ended
Employee Benefit Plan (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Employee Benefit Plan [Abstract]
Matching contribution to defined contribution plan	$ 112	$ 101

Income Taxes, Components of Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Current [Abstract]
Federal	$ 35,122	$ 0
State	950	(393)
Current income tax provision (benefit)	36,072	(393)
Deferred [Abstract]
Federal	(8,816)	0
State	(233)	0
Deferred income tax provision (benefit)	(9,049)	0
Total income tax provision (benefit)	$ 27,023	$ (393)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes, Reconciliation of Federal Statutory Income Tax Rate to Effective Income Tax Rate (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Effective Tax Rate Reconciliation [Abstract]
United States federal statutory rate	21.00%	21.00%
State taxes, net of federal benefit	0.17%	1.99%
Valuation allowance	(12.22%)	(21.96%)
Stock based compensation	(0.01%)	0.00%
R&D Credit	(0.21%)	1.34%
Other	0.06%	(0.38%)
Effective income tax rate	8.79%	1.99%

Income Taxes, Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets [Abstract]
Reserves and accruals	$ 48	$ 62
Research and development credits and other credits	13	1,730
Net operating loss carry forward	598	27,907
Stock based compensation	8,998	8,402
Other	3	11
Total deferred tax assets	9,660	38,112
Valuation allowance	(611)	(38,112)
Deferred tax assets after valuation allowance	9,049	0
Total deferred tax liability	0	0
Net deferred tax assets	$ 9,049	$ 0

Income Taxes, Pre-tax Income (Losses) and Operating Loss Carryforwards (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Taxes [Abstract]
Pre-tax Income (losses)	$ 307,452	$ (19,573)
Federal [Member]
Income Taxes [Abstract]
Net operating loss carryforwards	0
State [Member]
Income Taxes [Abstract]
Net operating loss carryforwards	$ 107,989
Operating loss carryforwards, expiration date	Dec. 31, 2029

Income Taxes, Income Tax Uncertainties (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Taxes [Abstract]
Accrued interest and penalties	$ 0	$ 0
Reconciliation of Provision for Uncertain Tax Position [Roll Forward]
Balance at the beginning of the year	0	316
Additions based on tax positions related to the current year	0	0
Additions for tax positions of prior years	0	0
Settlements	0	0
Lapse of applicable statute of limitations	0	(316)
Balance at the end of the year	$ 0	$ 0

Fair Value Measurement, Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value by Investment Category (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Adjusted Cost	$ 192,908	$ 3,135
Adjusted Cost	99,470	3,450
Unrealized Gains	2	3
Unrealized Losses	(1)	0
Fair Value	99,471	3,453
Adjusted Cost	221,255	5,526
Fair Value	$ 221,256	5,529
Minimum [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Maturities of available for sale securities	1 year
Maximum [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Maturities of available for sale securities	2 years
Cash [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Adjusted Cost	$ 121,785	2,076
Fair Value	121,785	2,076
Cash and Cash Equivalents	121,785	2,076
Mutual Funds [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Adjusted Cost	70,996	613
Unrealized Gains	0	0
Unrealized Losses	0	0
Fair Value	70,996	613
US Agency Securities [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Adjusted Cost	13,767	2,837
Unrealized Gains	2	3
Unrealized Losses	0	0
Fair Value	13,769	2,840
US Treasury Securities [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Adjusted Cost	14,707
Unrealized Gains	0
Unrealized Losses	(1)
Fair Value	14,706
Recurring [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Fair Value	192,908	3,135
Cash and Cash Equivalents	192,908	3,135
Investments Available for Sale	28,348	2,394
Recurring [Member] \| Cash [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Fair Value	121,785	2,076
Cash and Cash Equivalents	121,785	2,076
Recurring [Member] \| Level 1 [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Fair Value	71,123	1,059
Cash and Cash Equivalents	71,123	1,059
Investments Available for Sale	28,348	2,394
Recurring [Member] \| Level 1 [Member] \| Mutual Funds [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Fair Value	70,996	613
Cash and Cash Equivalents	70,996	613
Investments Available for Sale	0	0
Recurring [Member] \| Level 1 [Member] \| US Agency Securities [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Fair Value	127	446
Cash and Cash Equivalents	127	446
Investments Available for Sale	13,642	$ 2,394
Recurring [Member] \| Level 1 [Member] \| US Treasury Securities [Member]
Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value of Financial Assets [Abstract]
Fair Value	0
Cash and Cash Equivalents	0
Investments Available for Sale	$ 14,706

Litigation (Details) $ in Thousands								12 Months Ended
Litigation (Details) $ in Thousands	Oct. 30, 2020 USD ($) Patent Infringment $ / Device	Mar. 23, 2020 USD ($)	Mar. 13, 2020 USD ($)	Aug. 31, 2018 USD ($) $ / Device	Sep. 29, 2017 USD ($) $ / Device	Sep. 30, 2016 USD ($) Patent	Nov. 06, 2012 USD ($) Patent	Dec. 31, 2020 USD ($)
VirnetX Inc. v. Apple, Inc. (Case 6:12-CV-00855-LED) ("Apple II") [Member]
Litigation [Abstract]
Amount of damages awarded in patent infringement case				$ 502,600
Number of patents allegedly infringed upon by Apple, Inc. \| Patent	2
Royalty rate per device used in calculating infringement damages \| $ / Device				1.20
Litigation settlement amount	$ 502,800
Damages awarded per accused device \| $ / Device	0.84
Number of infringing units \| Infringment	598,629,580
McKool Smith P.C. v. VirnetX, Inc., AAA (Case No. 01-20-0003-7975) [Member]
Litigation [Abstract]
Contingency fee sought by plaintiff		$ 36,300
Contingency fee as percentage of payment		8.00%
Positive Outcome of Litigation [Member]
Litigation [Abstract]
Amount of final judgment with interest paid								$ 454,034
Positive Outcome of Litigation [Member] \| 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	$ 302,400
Number of patents allegedly infringed upon by Apple, Inc. \| Patent						4	4
Enhanced damages					41,300
Costs, fees and interest					$ 96,000
Amount of final judgment with interest paid			$ 454,034
Positive Outcome of Litigation [Member] \| 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
Royalty rate per device used in calculating infringement damages \| $ / Device					1.20
Positive Outcome of Litigation [Member] \| 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 \| $ / Device					1.80

Leases (Details) - USD ($) $ in Thousands	12 Months Ended
Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Office [Member]
Leases [Abstract]
Operating lease ROU assets	$ 44	$ 97
Lease liability	44	97
Lease expense	$ 56	56
Corporate Promotional and Marketing Facility [Member]
Leases [Abstract]
Lease extension period	1 year
Operating lease ROU assets	$ 1,248	1,604
Lease expense	$ 356	$ 385