VirnetX (VHC) just reported it’s latest 10Q last night in after hours and we have summarized the key topics concerning investors today. As a special note: Firms in litigation like VirnetX will usually only release a 10Q like they did which is the only requirement per securities regulations. Also, no conference call is scheduled and they have never had one regarding their earnings releases.
First and foremost, we wanted to know what the balance sheet looked like and we can clearly see that they have adequate capital with $63.7 million in cash and equivalents vs. what they reported 6 months ago with $63.9 million in cash.
The expenses are another key area that we wanted to review. They are actually falling in line and there is nothing alarming there, so this is another good sign for shareholders to be aware of. Legal expenses are expected and have been budgeted for. There is nothing of concern there either. Legal expenses and hard costs are expected to wind down and decrease in the coming months. The peak of the litigation costs are behind them, especially if they experience more settlements.
The key element that we see here is that the working capital has been increased to 48 months vs. 36 months of working capital that they had reported in their previous filing. This is a positive increase. Also, the company seems to be in “great shape” because they alleviated any concerns that the working capital might have dropped. or depleted. This didn’t happen.
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