VirnetX Holding CorpVHC

VirnetX Holding Corp Leases Disclosure

10-KFiled Mar 24, 20262 min read
Note 13 − Leases

In October 2025, we renewed our lease for office space in Nevada with a third party recording an ROU asset and lease liability of $103. The lease requires monthly payments of $4.6 and expires in October 2027. At December 31, 2025 and 2024, our ROU asset and lease liability totaled $95 and $42, respectively. Lease expense totaled $56 in both 2025 and 2024.

In October 2023, we executed a facility lease in Utah to be used for technical integration and as a training facility recording an ROU asset and a lease liability of $3,587. This operating lease requires monthly payments starting at $72, includes periodic increases, provides six months of free rent, and expires in April 2029. At December 31, 2025, our ROU asset and lease liability totaled $2,385 and $2,791, respectively. At December 31, 2024, our ROU asset and lease liability totaled $2,963 and $3,430, respectively. Lease expense totaled $838 in both 2025 and 2024.
We also lease a facility for corporate promotional and marketing purposes in California which was prepaid at inception and expired in 2025. In March 2024, we renewed the lease recording an ROU asset and lease liability of $5,512. The renewal period began in 2025, continues for 10 years through 2035, required either a single payment of $6,000, or annual payments each March, beginning in 2025 starting at $600 and increasing annually for a total commitment of approximately $7,500. In January 2025, the Company elected the 10 annual payments option which resulted in an adjustment to the carrying amount of the ROU asset and lease liability of just over $600.  At December 31, 2025, our ROU asset totaled $4,761 and lease liability totaled $5,058.  At December 31, 2024, our ROU asset totaled $5,739 and lease liability totaled $5,917. Lease expense totaled $720 in 2025 and $527 in 2024.

The weighted average remaining life of the above leases is approximately 6 years, with required payments as follows:

Due in 2026
  
$
1,612
  
Due in 2027
  
$
1,662
  
Due in 2028
  
$
1,678
  
Due in 2029
  
$
1,065
  
Due in 2030
  
$
766
  
Thereafter
  
$
3,466
  
Total undiscounted lease liability
  
$
10,249
  
Less: imputed interest
  
$
(2,304
)
Total lease liability
  
$
7,945
  

Lastly, we have a service agreement for the use of an aircraft from a related party discussed in more detail in Note 4. We incurred approximately $1,737 and $1,556 in rental fees and reimbursements to the LLC in 2025 and 2024, respectively.

Historical Timeline

Fiscal YearFiled
2025Mar 24, 2026Showing above
2024Mar 17, 2025
2023Mar 15, 2024
2022Mar 31, 2023
2021Mar 16, 2022
2020Mar 16, 2021
2019Mar 16, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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