Company: VHC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001140361-25-018930
Chunk: 90

Company: VirnetX Holding Corp
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 4C
Chunk 90
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 that we will use to deploy our offerings. We
        have no control over the operation, quality, or maintenance of a significant portion of that infrastructure or whether those third parties will upgrade or improve their equipment. We depend on these companies to maintain the operational integrity
        of our connections. If one or more of these companies is unable or unwilling to supply or expand their levels of service to us in the future, our operations could be severely interrupted. Also, to the extent that the number of users of networks
        utilizing our current or future products suddenly increases, the technology platform and secure hosting services which will be required to accommodate a higher volume of traffic may result in slower response times or service interruptions. System
        interruptions or increases 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. In addition, users depend on real-time communications; outages caused
        by increased traffic could result in delays and system failures. 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.

        20

System failure or interruption or our failure to meet increasing demands on our systems could harm our business.

The success of our license and service offerings will depend on the uninterrupted operation of various systems, secure data centers and other computer and communication networks that we establish. To
        the extent, the number of users of networks utilizing our future products suddenly increases, 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:

    •

              Power loss, transmission cable cuts and other telecommunications failures;

    •

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

    •

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

    •

              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