Company: VHC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001140361-25-018930
Chunk: 46

Company: VirnetX Holding Corp
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 2M
Chunk 46
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ays caused by time-consuming internal review processes customary with potential customers including large governments 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 customer orders are delayed or not realized,
        our revenues and results of operations could be materially and adversely affected.

      We have limited technical resources and are at an early stage in commercialization of our VirnetX One™ platform and software products.

      Part of our business includes the internal development of commercial products we seek to monetize. This aspect of our business may require significant capital, time and resources and we cannot
        guarantee that it will be successful or meet our expectations. Based on the scale of our technical resources, our limited historical financial data upon which to base our projected revenue or planned operating expenses related to our software
        products and services, we may not be able to effectively:

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              Implement an effective marketing strategy to promote awareness of our products;

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              Attract and retain customers for our products;

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              Generate revenues or profit from product sales;

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              Provide appropriate levels of customer training and technical support for our products;

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              Rapidly anticipate and adapt to changes in the market and evolving customer requirements;

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              Protect our products from any system failures or other breaches.

      In addition, a high percentage of our expenses are and will continue to be fixed. Accordingly, if we do not generate revenue as and when anticipated, our losses may be greater than expected and our
        operating results will suffer.

      The market in which we participate is intensely competitive, and if we do not compete effectively, our operating results could