SecProbe.io

Division of Corporation
Finance UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Mail Stop 4561
October 23, 2009
 Kendall Larsen, Chief Executive Officer VirnetX Holding Corporation 5615 Scotts Valley Drive, Suite 10 Scotts Valley, California 95066
Re: VirnetX Holding Corporation
  Registration Statement on Form S-3
Filed September 25, 2009
  File No. 333-162145

Dear Mr. Larsen:

We have limited our review of your filing to those issues we have addressed in
our comments.  Where indicated, we think you should revise your document in response
to these comments.  If you disagree, we w ill consider your explanation as to why our
comment is inapplicable or a revision is unneces sary.  Please be as detailed as necessary
in your explanation.  In some of our comme nts, we may ask you to provide us with
information so we may better understand your  disclosure.  After reviewing this
information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form S-3

General

1. We refer to our comment letter da ted October 13, 2009 relating to your
application requesting confid ential treatment of certain portions of Exhibit 10.1 to
your Form 10-Q for fiscal quarter en ded June 30, 2009, and note that we have
received your written response dated October 22, 2009.  Please be advised that your registration statement will not be declar ed effective until all issues relating to
your confidential treatment re quest have been resolved.

Kendall Larsen
VirnetX Holding Corporation
October 23, 2009 Page 2    2. We note that you identify yourself as a smaller reporting company on the cover
page of your Form 10-K for the fiscal year ended on December 31, 2008, which you filed on March 31, 2009.  We note furthe r that the aggregate market value of
the voting and non-voting common equity held by your non-affiliates as of the
last date of your second fiscal quarter in 2008 exceeded $123 million.  Please provide us with your analysis as to whether your company qualified as an
accelerated filer at the end of your last fis cal year.  Further, please address in your
analysis whether your Form 10-K was file d timely.  Refer to Rule 12b-2 under the
Exchange Act., Section III.E.1.d of  SEC Release No. 33-8876 and Question
130.04 under our Exchange Act Rules Complia nce and Disclosure  Interpretations,
available on our web site.
 Use of Proceeds, page 21

 3. We note your statement in this section th at you intend to use all the net proceeds
obtained from the private placement transact ion to fund working capital purposes.
Please expand your use of proceeds disc ussion to provide more specific
information as to how you intend to allo cate the proceeds of the transaction
amongst your different business endeavors.   For example, please disclose what
portions of the proceeds you expect to de dicate to the Micr osoft litigation, the
development of GABRIEL technology or to  other purposes.  In your discussion,
address how this allocation of proceeds might change if you re ceive less than the
full amount of proceeds.  Also, as the total proceeds that you may acquire through the private placement transaction substa ntially exceed your current assets and
accumulated revenue, please address in the prospectus how you intend to manage this material increase in your assets.  Consider including risk  factor disclosure
regarding the company’s lack of experi ence in managing substantial amounts of
cash.  Finally, please revise your prospect us to address the dilutive effects on
existing shareholders of the issuance  of the common stock underlying the
warrants.  Please provide tabular disclosu re showing the number of shares that
might be issued upon the exercise of each series of warrants, the time frame during which each series of warrants can be exercised, and the effects of the
issuance of the shares on existing sh areholders’ economic and percentage
ownership.  Please include appropria te risk factor disclosure.
 Selling Security Holders, page 21

 4. We note the following selling shareholders , which are non-reporti ng legal entities:

• Capital Ventures International;
• Ramius Enterprise Master Fund Ltd;

Kendall Larsen
VirnetX Holding Corporation
October 23, 2009 Page 3
• RCG PB Ltd.; and
• Vestal Venture Capital.

Please confirm, if true, that these sel ling shareholders are neither registered
broker-dealers nor affiliates of  registered broker-dealers.

5. We refer to your selling security hol ders table on page 22 and note your
disclosure that Ramius A dvisors has voting control a nd investment discretion over
the securities held by both Ramius Enterprise Master Fund Ltd. and RCG PB, Ltd.  Given this fact, please advise why Ramius Advisors is not identified as the selling
shareholder in the table.
 Description of Warrants Issued in the Private Placement Transaction, page 28

 6. Your use of the term “Effec tive Date” in this section to refer to something other
than the effective date of the registration statement may be confusing to investors.
Please revise.
 7. Please add disclosure describing how you accounted for the various series of
warrants.

Item 17. Undertakings, page 32

8. We note that you have included the undert aking related to Securities Act Rule
430B, although it appears that your document does not omit any of the information described in Rule 430B(a) or  (b).  Please confirm your understanding
that this registration stat ement will rely on Rule 430B and not Rule 430C.  If not,
please revise to include the appropriate undertaking.
 Item 16.  Exhibits

Exhibit 5.1  Opinion of Orri ck, Herrington & Sutcliffe LLP

9. We note the statement on page 1 of  the opinion that counsel has not
“independently established or verified a ny facts relevant to the opinion expressed
herein, but [has] relied upon statements and representations of the Selling Stockholders and officers and other represen tatives of the Company and others.”
It is inappropriate for counsel to assume, or to disclaim any duty to investigate,
the material facts underlying its opinion or facts that are readil y ascertainable.
Please have counsel revise its opinion to address the material facts that underlie
the opinion or explain why the disclaimer  in the opinion is not inappropriate
under state law.  We also note that the final paragraph on page 2 of the opinion
limits reliance upon the opinion to Virnet X Holding Corporation.  Please have

Kendall Larsen
VirnetX Holding Corporation
October 23, 2009 Page 4
counsel revise its opinion to omit any langua ge limiting the ability of investors to
rely upon the opinion.

*     *     *     *     *

As appropriate, please amend your regist ration statement in response to these
comments.  You may wish to provide us with marked copies of the amendment to expedite our review.  Please furnish a cove r letter with your amendment that keys your
responses to our comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we may have additional comments after reviewing your amendmen t and responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Act of 1933 and that they have  provided all information investors require
for an informed investment decision.  Since the company and its management are in possession of all facts relating to a company’ s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
Notwithstanding our comments, in the even t the company requests acceleration of
the effective date of the pending registration statement, it should furnish a letter, at the time of such request, acknowledging that:   ‚ should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose th e Commission from taking any action with
respect to the filing;
 ‚ the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective,  does not relieve the company from its full responsibility
for the adequacy and accuracy of the disclosure in the filing; and
 ‚ the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
  In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Di vision of Corporation Finance in connection
with our review of your filing or in response to our comments on your filing.
We will consider a written request for acceleration of the effective date of the
registration statement as conf irmation of the fact that t hose requesting acceleration are
aware of their respective re sponsibilities under the S ecurities Act of 1933 and the
Securities Exchange Act of 1934 as they rela te to the proposed public offering of the

Kendall Larsen
VirnetX Holding Corporation October 23, 2009 Page 5   securities specified in the above registration statement.  We will act  on the request and,
pursuant to delegated authority, grant acce leration of the effective date.
We direct your attention to Rules 46 0 and 461 regarding requesting acceleration
of a registration statement.  Please allow ad equate time after the filing of any amendment
for further review before submitting a request for acceleration.  Please provide this request at least two business days in a dvance of the requested effective date.
 Please direct any questions to Ryan Houseal, Attorney-Advisor, at (202) 551-
3105 or, in his absence, to me at (202) 551- 3456.  If you require furt her assistance, you
may contact Barbara C. Jacobs, A ssistant Director, at (202) 551-3735.

     S i n c e r e l y ,          Matthew Crispino
Staff Attorney

cc: Via Facsimile (650) 614-7401

 Lowell D. Ness, Esq.  Orrick, Herrington & Sutcliffe LLP