Company: VHC
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001140361-25-030577
Chunk: 87

Company: VirnetX Holding Corp
Filing Date: 2025-08-12
Form: 10-Q
Item: Part I, Item 2
Chunk 87
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 patents which was finalized in 2024.

Liquidity and Capital Resources

As of June 30, 2025, our cash and cash equivalents totaled approximately $17,293 and our short-term investments totaled approximately $13,933, compared to cash and cash equivalents of approximately
        $23,296 and short-term investments of approximately $14,786 at December 31, 2024, respectively. Working capital was $29,595 at June 30, 2025, and $31,009 at December 31, 2024.

We expect that our cash and cash equivalents and short-term investments as of June 30, 2025, will be sufficient to fund our current level of operating expenses and provide related working capital for the foreseeable
        future. Over the longer term, we expect to derive our future revenue from collaborating with others to integrate our family of cybersecurity products and services into their solutions and to resell them to their current and future customers as well
        as from license fees and royalties associated with our patent portfolio, technology, software and secure domain name registry.

Income Taxes

Our effective tax rate is 0% for income tax for the three and six months ended June 30, 2025, and 2024, and we expect our effective tax rate for the full year will be 0%. Our effective tax rate is less than the 21%
        statutory tax rate primarily due to our valuation allowance. Based on the weight of available evidence, including net cumulative losses and expected future losses, we have determined it is more likely than not that our U.S. federal and state
        deferred tax assets will not be realized and therefore we have provided a full valuation allowance on the U.S. federal and state net deferred tax assets.

Contractual Obligations

We have leases in Nevada, Utah and California, the last of which expires in 2035. See Note 8 – Leases in the accompanying consolidated financial statements for details.

Off-Balance Sheet Arrangements

None.

ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

We invest our excess cash primarily in highly liquid instruments including time deposits, money market funds, and U.S. agency and treasury securities. We seek to limit the amount of our credit exposure to any one
        issuer.

Investments in fixed rate instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in