UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025.

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-33852

VirnetX Holding Corporation

(Exact name of registrant as specified in its charter)

Delaware		77-0390628
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

308 Dorla Court, Suite 206 Zephyr Cove, Nevada		89448
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (775) 548-1785

Former name, former address and former fiscal year, if changed since last report: N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	VHC	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒
Emerging growth company ☐	Smaller reporting company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

4,270,840 shares of the registrant’s Common Stock were outstanding as of November 10, 2025.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have included or incorporated by reference in this Quarterly Report on Form 10-Q (this Report), and from time to time we may make statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These forward-looking statements are based upon our current expectations, estimates, assumptions, and beliefs concerning future events and conditions and may discuss, among other things, anticipated future performance (including sales and earnings), products and services, expected growth, future business plans and costs (including investments, partnerships and collaborations, marketing and business development, staffing strategies and entering into another sector), the impact of potential litigation, statements regarding our efforts and ability to maintain compliance with the Nasdaq Stock Market LLC (“Nasdaq”) continued listing standard, our beliefs and statements regarding general industry and market conditions and growth rates, as well as general domestic and international economic conditions. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result in,” and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are necessarily subject to risks, uncertainties, and other factors, many of which are outside our control, which could cause actual results to differ materially from such statements and from our historical results and experience. These risks, uncertainties and other factors include, but are not limited to those described in Item 1A – Risk Factors of this Report and elsewhere in this Report and those described from time to time in our reports filed with the Securities and Exchange Commission (SEC). Readers are cautioned that it is not possible to predict or identify all the risks, uncertainties and other factors that may affect future results and that the risks described herein should not be considered a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Among others, the forward-looking statements appearing in this Report that may not occur include statements that pertain to the activities we have undertaken to commercialize our products and patent portfolio in and outside of the United States including VirnetX One™, War Room™, VirnetX Matrix™, our Secured Domain Name Registry and Technology and our service offerings. These statements may imply that the worldwide market for our commercialized products is large and will result in significant future revenue for us. However, commercialization of products such as ours is subject to significant obstacles and risks that may delay or prevent future revenues for us.

EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

VIRNETX HOLDING CORPORATION

INDEX

		Page

PART I — FINANCIAL INFORMATION		1
	Item 1 — Financial Statements	1
	Condensed Consolidated Balance Sheets at September 30, 2025 (unaudited) and December 31, 2024	1
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (unaudited)	2
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2025 and 2024 (unaudited)	3
	Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2025 and 2024 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements	6
	Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Item 3 — Quantitative and Qualitative Disclosures About Market Risk	17
	Item 4 — Controls and Procedures	17

PART II — OTHER INFORMATION		18
	Item 1 — Legal Proceedings	18
	Item 1A — Risk Factors	18
	Item 5 — Other Information	28
	Item 6 — Exhibits	29

SIGNATURES		30

	As of September 30, 2025			As of December 31, 2024
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	17,129		$	23,296
Investments available for sale		11,064			14,786
Accounts receivable		19			—
Prepaid expenses and other current assets		223			122
Total current assets		28,435			38,204
Prepaid expenses and other assets		7,480			8,838
Other investments at cost		2,000			2,500
Property and equipment, net		68			67
Total assets	$	37,983		$	49,609

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	377		$	336
Accrued payroll and related expenses		384			257
Other liabilities, current		1,311			6,602
Total current liabilities		2,072			7,195

Other liabilities		6,620			2,791
Total liabilities		8,692			9,986
Commitments and contingencies (Note 4)

Stockholders’ equity:
Preferred stock, par value $0.0001 per share Authorized: 10,000,000 shares at September 30, 2025, and December 31, 2024; Issued and outstanding: 0 shares at September 30, 2025, and December 31, 2024		—			—
Common stock, par value $0.0001 per share Authorized: 100,000,000 shares at September 30, 2025 and December 31, 2024; Issued and outstanding: 4,270,840 shares at September 30, 2025 and 4,238,581 at December 31, 2024		—			—
Additional paid-in capital		245,626			244,293
Accumulated deficit		(216,318	)		(204,670	)
Accumulated other comprehensive loss		(17	)		—
Total stockholders’ equity		29,291			39,623
Total liabilities and stockholders’ equity	$	37,983		$	49,609

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenue	$	58		$	2		$	106		$	5
Operating expense:
Research and development		1,143			1,176			3,617			3,667
Selling, general and administrative		3,059			3,213			8,624			10,066
Impairment loss on investment		500			-			500			-
Total operating expense		4,702			4,389			12,741			13,733
(Loss) from operations		(4,644	)		(4,387	)		(12,635	)		(13,728	)
Interest and other income, net		296			548			989			1,771
(Loss) before taxes		(4,348	)		(3,839	)		(11,646	)		(11,957	)
Income tax (expense) benefit		—			—			(2	)		(3	)
Net (loss)	$	(4,348	)	$	(3,839	)	$	(11,648	)	$	(11,960	)
Basic (loss) per share	$	(1.18	)	$	(1.07	)	$	(3.17	)	$	(3.32	)
Diluted (loss) per share	$	(1.18	)	$	(1.07	)	$	(3.17	)	$	(3.32	)
Weighted average shares outstanding - basic		3,673			3,603			3,672			3,600
Weighted average shares outstanding - diluted		3,673			3,603			3,672			3,600

	Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities:
Net (loss)	$	(11,648	)	$	(11,960	)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation		16			16
Stock-based compensation		1,352			1,405
Impairment loss on investment		500			-
Changes in assets and liabilities:
Accounts receivables		(19	)		2
Prepaid expenses and other assets		657			537
Accounts payable		41			(160	)
Accrued payroll and related expenses		127			68
Other liabilities		(862	)		275
Net cash used in operating activities		(9,836	)		(9,817	)
Cash flows from investing activities:
Purchase of property and equipment		(17	)		(11	)
Purchase of investments		(16,180	)		(26,469	)
Proceeds from sale or maturity of investments		19,885			35,147
Net cash provided by investing activities		3,688			8,667
Cash flows from financing activities:
Payment of payroll taxes on equity awards		(19	)		(9	)
Net cash used in financing activities		(19	)		(9	)
Net change in cash and cash equivalents		(6,167	)		(1,159	)
Cash and cash equivalents, beginning of period		23,296			26,289
Cash and cash equivalents, end of period	$	17,129		$	25,130
Non-cash transactions
ROU asset and lease liability at lease modification date (Note 8)	$	600		$	5,512

	September 30, 2025
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Investments Available for Sale
Cash	$	1,185	$	—	$	—		$	1,185	$	1,185	$	—
Level 1:
Mutual funds		14,747		—		—			14,747		14,747		—
U.S. agency and treasury securities		12,256		6		(1	)		12,261		1,197		11,064
		27,003		6		(1	)		27,008		15,944		11,064
Total	$	28,188	$	6	$	(1	)	$	28,193	$	17,129	$	11,064

	December 31, 2024
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Investments Available for Sale
Cash	$	1,777	$	—	$	—		$	1,777	$	1,777	$	—
Level 1:
Mutual funds		20,077		—		—			20,077		20,077		—
U.S. agency and treasury securities		16,204		25		(1	)		16,228		1,442		14,786
		36,281		25		(1	)		36,305		21,519		14,786
Total	$	38,058	$	25	$	(1	)	$	38,082	$	23,296	$	14,786

Due in 2025	$	233
Due in 2026		1,557
Due in 2027		1,616
Due in 2028		1,678
Due in 2029		1,065
Thereafter		4,231
		10,380
Less imputed interest		(2,453	)
Total	$	7,927

		Incorporated by reference herein
Exhibit Number	Description	Form	Exhibit No.	Filing Date	File No.	Filed Herewith
31.1	Certification of the President and Chief Executive Officer, pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer, pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document.					x
101.SCH	Inline XBRL Taxonomy Extension Schema Document.					x
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.					x
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.					x
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.					x
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.					x
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).					x

	VIRNETX HOLDING CORPORATION

	By:	/s/ Kendall Larsen
		Name:	Kendall Larsen
			Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Katherine Allanson
		Name:	Katherine Allanson
			Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Date: November 14, 2025

SEC Form 10-Q filed by VirnetX Holding Corp