VirnetX Holding Corp. (VHC, Financial) filed Quarterly Report for the period ended 2009-09-30.
VirnetX Holding Corporation is engaged in developing products for real-time communications such as Instant Messaging and Voice over Internet Protocol, commercializing its patent portfolio and providing contract research, prototyping, systems integration and technical services. Virnetx Holding Corp. has a market cap of $76.6 million; its shares were traded at around $2.05 with and P/S ratio of 589.3.
Our selling, general and administrative expenses decreased by $343,467 to $2,412,101 for the three months ended September 30, 2009 from $2,755,568 for the three months ended September 30, 2008. Our general and administrative expenses increased by $693,510 to $9,313,786 for the nine months ended September 30, 2009 from $8,620,276 for the nine month period ended September 30, 2008. The decrease in selling, general, and administrative expenses for the three months ended September 30, 2009 was due primarily to the amended calendar of events in connection with the Microsoft patent infringement litigation, as further reported in the Current Report on Form 8-K filed with the SEC on June 29, 2009.
Within selling, general and administrative expenses, legal fees decreased by $231,004 to $1,123,946 for the three months ended September 30, 2009 from $1,354,950 for the three months ended September 30, 2008. Legal fees increased by $727,887 to $5,346,143 for the nine months ended September 30, 2009 from $4,618,256 for the nine months ended September 30, 2008. The increase in legal fees incurred in each nine month period was due primarily to our patent infringement litigation against Microsoft.
In September 2009, we closed a private placement of 2,380,942 shares of our common stock at a purchase price of $3.17 per share. In addition to shares of common stock, we also issued (i) Series I warrants to purchase an additional 3,246,959 shares of our common stock with an exercise price of $3.93 per share (subject to adjustment and including (x) 627,923 shares of our common stock issuable pursuant to the anti-dilution protections in the Series I Warrants, and (y) 238,094 shares of our common stock issuable to the placement agent of the September 2009 transaction), (the “Series I Warrants”), (ii) Series II warrants to purchase up to an additional 2,419,045 shares of our common stock, subject to adjustment as described below, on an automatic cashless exercise basis with an exercise price of $0.01 per share (the “Series II Warrants”) and (iii) Series III warrants to purchase approximately an additional 2,380,942 shares of common stock with an exercise price of $2.52 per share (the “Series III Warrants” and together with the Series I Warrants and the Series II Warrants, the “Warrants”). The private placement raised gross proceeds of approximately $6,000,000 before deducting the placement agent s fees and other costs of the offering. The net cash raised was approximately $5,400,000.
In January 2009, we closed an underwritten public offering of 2,470,000 shares of our common stock, including 270,000 of which were issued pursuant to the underwriter s over-allotment option, plus warrants to purchase 1,235,000 shares of common stock at $2.00 per share, including 135,000 of which were issued pursuant to the underwriter s over-allotment option, warrants to purchase 1,235,000 shares of common stock at $3.00 per share, including 135,000 of which were issued pursuant to the underwriter s over-allotment option, and warrants to purchase 1,235,000 shares of common stock at $4.00 per share, including 135,000 of which were issued pursuant to the underwriter s over-allotment option. The offering at $1.50 per unit raised gross proceeds of approximately $3,700,000 before deducting the underwriter s fees and other costs of the offering. The net cash raised was approximately $3,300,000.
During fiscal year 2008, the cash flow for our operations was approximately $8,064,000 (an average of approximately $672,000 per month.) During the first three quarters of 2009, our cash used in operating activities averaged $559,601 per month. We anticipate that our average monthly cash requirement to fund our operations in the fourth quarter of 2009 is unlikely to change materially from the cash flow rate of our first three quarters of 2009. As a result, we anticipate that our cash balance at September 30, 2009 of $4,016,248 will be insufficient to fund our operations through April 2010. We anticipate that our monthly cash requirements for the fourth quarter of 2009 will include our expenditures for:
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VirnetX Holding Corporation is engaged in developing products for real-time communications such as Instant Messaging and Voice over Internet Protocol, commercializing its patent portfolio and providing contract research, prototyping, systems integration and technical services. Virnetx Holding Corp. has a market cap of $76.6 million; its shares were traded at around $2.05 with and P/S ratio of 589.3.
Highlight of Business Operations:
Our research and development expenses decreased by $270 to $215,243 for the three months ended September 30, 2009 from $215,513 for the three months ended September 30, 2008. Research and development increased by $24,164 to $657,499 for the nine months ended September 30, 2009, from $633,335 for the nine months ended September 30, 2008. This increase is primarily due to increased engineering activities for product development and the addition of one engineer. We expect research and development expenses to increase as employees are hired to provide in-house research and development. While we expect to use outside contractors for additional product development on a limited basis, we expect those costs to remain level or decline.Our selling, general and administrative expenses decreased by $343,467 to $2,412,101 for the three months ended September 30, 2009 from $2,755,568 for the three months ended September 30, 2008. Our general and administrative expenses increased by $693,510 to $9,313,786 for the nine months ended September 30, 2009 from $8,620,276 for the nine month period ended September 30, 2008. The decrease in selling, general, and administrative expenses for the three months ended September 30, 2009 was due primarily to the amended calendar of events in connection with the Microsoft patent infringement litigation, as further reported in the Current Report on Form 8-K filed with the SEC on June 29, 2009.
Within selling, general and administrative expenses, legal fees decreased by $231,004 to $1,123,946 for the three months ended September 30, 2009 from $1,354,950 for the three months ended September 30, 2008. Legal fees increased by $727,887 to $5,346,143 for the nine months ended September 30, 2009 from $4,618,256 for the nine months ended September 30, 2008. The increase in legal fees incurred in each nine month period was due primarily to our patent infringement litigation against Microsoft.
In September 2009, we closed a private placement of 2,380,942 shares of our common stock at a purchase price of $3.17 per share. In addition to shares of common stock, we also issued (i) Series I warrants to purchase an additional 3,246,959 shares of our common stock with an exercise price of $3.93 per share (subject to adjustment and including (x) 627,923 shares of our common stock issuable pursuant to the anti-dilution protections in the Series I Warrants, and (y) 238,094 shares of our common stock issuable to the placement agent of the September 2009 transaction), (the “Series I Warrants”), (ii) Series II warrants to purchase up to an additional 2,419,045 shares of our common stock, subject to adjustment as described below, on an automatic cashless exercise basis with an exercise price of $0.01 per share (the “Series II Warrants”) and (iii) Series III warrants to purchase approximately an additional 2,380,942 shares of common stock with an exercise price of $2.52 per share (the “Series III Warrants” and together with the Series I Warrants and the Series II Warrants, the “Warrants”). The private placement raised gross proceeds of approximately $6,000,000 before deducting the placement agent s fees and other costs of the offering. The net cash raised was approximately $5,400,000.
In January 2009, we closed an underwritten public offering of 2,470,000 shares of our common stock, including 270,000 of which were issued pursuant to the underwriter s over-allotment option, plus warrants to purchase 1,235,000 shares of common stock at $2.00 per share, including 135,000 of which were issued pursuant to the underwriter s over-allotment option, warrants to purchase 1,235,000 shares of common stock at $3.00 per share, including 135,000 of which were issued pursuant to the underwriter s over-allotment option, and warrants to purchase 1,235,000 shares of common stock at $4.00 per share, including 135,000 of which were issued pursuant to the underwriter s over-allotment option. The offering at $1.50 per unit raised gross proceeds of approximately $3,700,000 before deducting the underwriter s fees and other costs of the offering. The net cash raised was approximately $3,300,000.
During fiscal year 2008, the cash flow for our operations was approximately $8,064,000 (an average of approximately $672,000 per month.) During the first three quarters of 2009, our cash used in operating activities averaged $559,601 per month. We anticipate that our average monthly cash requirement to fund our operations in the fourth quarter of 2009 is unlikely to change materially from the cash flow rate of our first three quarters of 2009. As a result, we anticipate that our cash balance at September 30, 2009 of $4,016,248 will be insufficient to fund our operations through April 2010. We anticipate that our monthly cash requirements for the fourth quarter of 2009 will include our expenditures for:
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