Company: VHC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001140361-25-018930
Chunk: 25

Company: VirnetX Holding Corp
Filing Date: 2025-05-14
Form: 10-Q
Item: Part II, Item 1L
Chunk 25
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 the technology platform and hosting services which will be required to accommodate a higher volume of traffic may result in slower response times, service
        interruptions or delays or system failures. Our systems and operations will also be vulnerable to damage or interruption from, among other things:

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              Power loss, transmission cable cuts and other telecommunications failures;

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              Damage or interruption caused by fire, earthquake, and other natural disasters;

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              Computer viruses, electronic break-ins, sabotage, vandalism or software defects; and

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              Physical or electronic break-ins, sabotage, intentional acts of vandalism, terrorist attacks and other events beyond our control.

System interruptions or failures and increases or delays in response time could result in a loss of potential or existing users and, if sustained or repeated, could reduce the appeal of the networks
        to users. These types of occurrences could cause users to perceive that our solution does not function properly and could therefore adversely affect our ability to attract and retain licensees, strategic partners, and customers, and result in lost
        revenue, customer dissatisfaction, or lawsuits against us.

If we are not able to adequately protect our patent rights and trade secrets, our business would be negatively impacted.

We believe our patents are valid, enforceable, and valuable. Notwithstanding this belief, third parties may make claims of infringement with respect to our products or services or invalidity claims
        with respect to our patents or become aware of our trade secrets by way of leaks from bad actors within or outside of our employee base or otherwise, and such claims could give rise to material cost for defense or settlement or both, and such
        claims or leaks could jeopardize or substantially delay a successful outcome of litigation we are or may become involved in, divert resources away from our other activities, limit or cease our related revenues, or otherwise materially and adversely
        affect our business. Even if we are successful in protecting our intellectual property rights, they may not ultimately provide us with any competitive advantages and may be less valuable than we currently expect. These risks may be heightened in
        countries other than the United States where laws regarding patent protection are less developed and may be negatively affected by the fact that legal standards in the United States and elsewhere for protection of intellectual property rights in
        Internet-related businesses are uncertain and still evolving. In addition, there are a significant number of United States and foreign patents and patent applications in our areas of interest, and we expect that significant litigation in these
        areas will continue and will