Company: VHC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001140361-25-042294
Chunk: 20

Company: VirnetX Holding Corp
Filing Date: 2025-11-14
Form: 10-Q
Item: Part II, Item 1A
Chunk 20
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Risks Related to our Business and Our Financial Reporting

Our operating results may not be consistent and may be difficult to predict, and we may not be able to achieve or sustain profitability in the future.

We had a net loss of $11.6 million for the nine months ended September 30, 2025 and a net loss of $18.2 million for the year ended December 31, 2024. As of September 30, 2025, we had an accumulated
        deficit of $216.3 million. Our operating results have fluctuated in the past due to several factors and may fluctuate in the future due to the same or similar factors, which include but are not limited to the following:

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              Time and resources required to accelerate transition to new product development and sales strategies targeting large enterprises, government customers, service provider partnerships;

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              Customer acceptance of our DE, MBSE and Cyber Threat Assessment services;

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              Establishing and maintaining relationships with third parties to integrate our family of cybersecurity products and services into their operations and develop solutions key to the defense market, critical
                infrastructure and threat intelligence service;

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              Customer adoption of our VirnetX One™ platform and software products and services;

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              The number of product license sales of VirnetX War Room™, VirnetX Matrix™ and associated services;

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              Adoption of VirnetX OneTM platform by third party application providers of secure communications;

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              Intensely competitive market with established companies that have larger customer bases, and greater resources than we do;

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              Prolonged economic uncertainties or downturns, globally or in certain regions or industries, could materially adversely affect our business; and

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              Government export and import control regulations on selling products with encryption technology in certain international markets.

These fluctuations may make our business particularly difficult to manage, adversely affect our business and operating results, make our operating results difficult for investors to predict and,
        further, cause our results to fall below investor’s expectations and adversely affect the market price of our common stock. If we fail to increase our revenue, we may not achieve or sustain profitability in the future.

Our success depends in part on establishing and maintaining relationships with third parties to incorporate our products and services into their operations.

Our business strategy is to enter into partnerships, strategic investments, and other cooperative