Commits to Further Shareholder Distributions of Significant Portion of Any Net Proceeds from Ongoing Litigation Against Apple Inc.

Enters into Cooperation Agreement with Bradley L. Radoff and Michael Torok

ZEPHYR COVE, Nev., March 30, 2023 /PRNewswire/ -- VirnetX Holding Corporation (NYSE:VHC), an Internet security software and technology company with patented technology for secure communications, today announced that its Board of Directors has declared a special cash dividend of $1.00 per common share. The dividend will be paid on or about April 17, 2023 to shareholders of record on April 10, 2023. The aggregate amount of the cash payment to be made in connection with this special dividend will be approximately $71.4 million. Over the course of VirnetX's history as a public company, including this dividend, VirnetX will have distributed over $165 million in cash to shareholders.

In conjunction with the special cash dividend, VirnetX entered into a cooperation agreement with Bradley L. Radoff and Michael Torok and certain of their respective affiliates (the "Investor Group"), who collectively own approximately 6.6% of VirnetX's common stock.

As part of the agreement, VirnetX committed to promptly distribute to shareholders 80% of future proceeds, if any, and net of related legal costs, licensing costs and taxes, that it receives from its current litigation with Apple Inc. ("Apple"). During 2021, Apple appealed a 2020 U.S. Federal District Court jury verdict that awarded VirnetX over $500 million in damages. Oral arguments for this appeal were heard by the U.S. Court of Appeals for the Federal Circuit in September 2022.

VirnetX has also agreed to further strengthen its Board of Directors through the selection and addition of another independent director within the next 12 months who will help improve diversity in the boardroom.

Kendall Larsen, Chairman and CEO of VirnetX commented: "With increased clarity into the capital required to commercialize our technology, the Board is pleased to declare a $1.00 per share special dividend. This special dividend reflects our ongoing commitment to enhancing shareholder value. We are confident that we are close to a final outcome in our litigation with Apple, and the Board has committed to distribute to our shareholders a substantial portion of the net proceeds after the case concludes."

Messrs. Radoff and Torok commented: "We are pleased to have reached this constructive agreement with VirnetX that returns significant capital to the company's shareholders and look forward to the prospect of meaningful future distributions following the completion of the Apple litigation."

The agreement with the Investor Group includes a customary standstill and voting commitment. The agreement will be filed on a Form 8-K with the Securities and Exchange Commission.