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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

         D e c e m b e r  2 1 ,  2 0 1 0   William Sliney Chief Financial Officer VirnetX Holding Corporation 5615 Scotts Valley Drive, Suite 100 Scotts Valley, CA 95066
Also via facsimile at
: (831) 438-3078

Re:  VirnetX Holding Company
Form 10-K for Fiscal Year Ended December 31, 2009
Filed March 31, 2010 Form 10-Q for Fiscal Quarter Ended June 30, 2009 Filed August 9, 2010 File No. 001-33852
Dear Mr. Sliney:
 We have reviewed your letter dated December 3,  2010 in connection with the above-referenced
filings and have the following comments.  In ou r comments, we may ask you to provide us with
information so we may better understand your disclosure.
 Please respond to this letter within ten busin ess days by amending your filing, by providing the
requested information, or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circ umstances or do not believe an amendment is
appropriate, please tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in response to
this comment, we may have additional comments.  Unless otherwise noted, where prior comments are
referred to, they refer to our  letter dated October 26, 2010.

Form 10-K for the Fiscal Year ending December 31, 2009

Notes to Financial Statements

Note 8.  Warrants, page 55
 1. We note your response to prior comment 1.  As indicated in our December 10, 2010 phone
conversation with your independent auditors, the Staff continues to believe that the Series I
warrants are not indexed to the company’s ow n stock pursuant to the guidance in ASC 815-40-

William Sliney
VirnetX Holding Company December 21, 2010 Page 2
15 and accordingly, it appears that such warrants should be classified as liabilities.  Please
update us as to the company’s c onsideration of th is issue.
 Form 10-Q for the Fiscal Quarter ending June 30, 2010

 Notes to the Financial Statements

 Note 11 – Litigation, page 10

 2. We note from your response to prior comment 2 th at you consider the litigation settlements to
be multiple element arrangements.  You further indi cate that your analysis of the estimated fair
value of the technology license element incl uded estimated revenue from publicly filed
financial statements, research reports, consultants and other s ources.  However, you do not note
the specific results of your analysis other than you state no residual amount of the total
settlement amount remained to al locate to the litigation settlement.  Please provide us with
specific information about your analysis includi ng: the amounts of estimated revenue, discount
rates, and other assumptions used as well as the specific sources from which the information
was derived; tell us why you believe such sour ces were appropriate; describe the valuation
techniques used; tell us who performed the analysis and tell us the fair value of the technology license element as determ ined in your analysis.

3. We note the proposed revenue recognition policy disclosures that you intend to include in
future filings where you refer to SOP 97-2, SOP 98-4, SOP 98-9 and EITF 00-21. Please revise
such disclosures to instead refer to the a pplicable ASC topics in the FASB Accounting
Standards Codification.

You may contact Melissa Kindela n, Staff Accountant, at (202) 551-3564 or the undersigned at
(202) 551-3499 if you have any questions regarding these comments.
       S i n c e r e l y ,           Kathleen Collins
Accounting Branch Chief