Company: VHC
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001140361-25-009024
Chunk: 2

Company: VirnetX Holding Corp
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1
Chunk 2
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 subsidiary, VirnetX, Inc., from Leidos in 2006.

Industry Overview & Trends

We have seen an exponential increase in dynamic and persistent cyber threats to the U.S. national security operational framework, and
            critical infrastructure from state-sponsored adversaries, organized cybercriminal groups, and rogue actors employing advanced cyber capabilities. These threats include denial-of-service (DoS), signal jamming, data spoofing, malware injection,
            and direct attacks on ground and satellite-based communication networks infrastructure. In the commercial sector, satellite networks that provide communication, navigation, and imagery services are vulnerable to exploitation, posing risks to
            critical infrastructure and civilian services. For government systems, adversaries have been targeting vulnerabilities in proliferated constellations, mission-critical data streams, and multi-domain integration efforts. We believe that our
            proven proactive, integrated approach to cybersecurity ensures the resilience of defense architectures across the entire conflict continuum.

The shift to remote work and expansion of the enterprise network perimeter has driven the growth of ZTNA solutions. The Zero Trust
            concept treats all networks like the Internet, where all users and devices are untrusted by default. Their location within the network is not a factor for deciding trust. Each user and device on the network requires authentication and
            authorization, based on policy, prior to accessing any applications or resources on the network. ZTNA facilitates security around remote work, because Zero Trust policies enable granular access control, end-to-end encryption of network
            communications and remove application visibility from the public Internet which reduces the potential attack surface.

Cloud computing growth has rapidly expanded as enterprises continue to move applications and services to the cloud. The cloud offers
            scalability, operations and development efficiency and remote access benefits for their workforce. The cloud technology adoption is expected to continue to increase quite significantly in industries where the work-from-home initiative is
            helping to sustain enterprise business functions. However, shifting critical data to the cloud has resulted in security concerns and the need for enterprises to control access and gain visibility into how information is being used, who is
            accessing it and where it is going. We believe our scalable technology allows enterprises to secure applications and services regardless of whether hosting is on-premise or in the cloud.

As billions of connected Internet of Things (“IoT”) devices come online in support of enterprise operations, products, and industrial
            controls they will need to be secured and integrated into the enterprise. Facilitated by advancements in 4G/Advanced LTE and high-speed 5G networks, IoT devices