Company: VHC
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001140361-25-030577
Chunk: 63

Company: VirnetX Holding Corp
Filing Date: 2025-08-12
Form: 10-Q
Item: Part II, Item 1
Chunk 63
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 our products and services into their operations.

Part of our business strategy is to enter into partnerships, strategic investments, and other cooperative arrangements with other companies and government agencies. We have invested in and we continue to seek to
        invest in or acquire businesses, technologies, or other assets that we believe could complement or expand our business. In addition, we are regularly involved in cooperative efforts with respect to the incorporation of our products into products of
        others and vice versa, collaborative research and development efforts with government and university laboratories, distributor and reseller arrangements and service provider partnerships. These relationships are generally non-exclusive, and some of
        our partners also have cooperative relationships with certain of our competitors or offer some products and services that are competitive with ours. If we lose third-party relationships, if these relationships are not commercially successful, or if
        we are unable to enter into third-party relationships on commercially reasonable terms in the future, our business could be negatively impacted.

We expect that we will experience long and unpredictable sales cycles, which may impact our operating results.

The sales cycle between initial customer contact and the execution of a contract or license agreement with a customer or purchaser of our products can vary widely. We expect that our sales cycles will be long and
        unpredictable due to several factors, including but not limited to:

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              The need to educate potential customers about our product and service capabilities;

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              Our customers’ budgetary constraints and timing of their budget cycles;

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              Delays caused by time-consuming internal review processes customary with potential customers including large government agencies and institutions in the space and defense industries; and

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              Long sales cycles may increase the risk that our financial resources are exhausted before we are able to generate significant revenue. In addition, potential customers of our products include local, state, federal and foreign government
                agencies, as well as institutions in the space and defense industries. Sales processes to government authorities can be extensive and unpredictable. Government authorities generally have complex budgeting, purchasing, and regulatory
                processes that govern their capital spending, and their spending is likely to be adversely impacted by economic conditions. In addition, in many instances, sales to government authorities may require field trials and may be delayed by the
                time it takes for government officials to evaluate multiple competing bids, negotiate terms, and award contracts.

For these reasons, the sales cycle associated with our products is subject to a number of significant risks that are beyond our control. Consequently, if