Company: VHC
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001140361-25-030577
Chunk: 116

Company: VirnetX Holding Corp
Filing Date: 2025-08-12
Form: 10-Q
Item: Part I, Item 8
Chunk 116
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        8

          Index

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 three 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 deemed 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.
       
      On July 4, 2025, the United States enacted tax legislation, often referred to as the “One Big Beautiful Bill” Act (OB3). Due to the July 4, 2025, enactment date, the law is not effective until after June 30, 2025,
        quarter-end, accounting, it is a subsequent event for the Q2 2025 tax reporting. The Company is still evaluating the impact of OB3 to the Company in 2025. The Company cannot yet estimate what elections it will make related to accelerating pre