What changed in INTELLIGENT PROTECTION MANAGEMENT CORP.'s 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of INTELLIGENT PROTECTION MANAGEMENT CORP.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+243 added−244 removedSource: 10-K (2026-03-17) vs 10-K (2025-03-24)
Top changes in INTELLIGENT PROTECTION MANAGEMENT CORP.'s 2025 10-K
243 paragraphs added · 244 removed · 140 edited across 7 sections
- Item 7. Management's Discussion & Analysis+135 / −118 · 53 edited
- Item 1A. Risk Factors+48 / −75 · 41 edited
- Item 1. Business+36 / −35 · 31 edited
- Item 3. Legal Proceedings+11 / −5 · 5 edited
- Item 1C. Cybersecurity+6 / −7 · 6 edited
Item 1. Business
Business — how the company describes what it does
31 edited+5 added−4 removed30 unchanged
Item 1. Business
Business — how the company describes what it does
31 edited+5 added−4 removed30 unchanged
2024 filing
2025 filing
Biggest changeCustomers of our web hosting services are invoiced on a monthly basis and pay a monthly fee, with revenue recognized on a monthly basis. 2 Our ManyCam Software Product Following the Transactions, we continue to support our ManyCam software, which is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools.
Biggest changeWe also offer and support our ManyCam software, which is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools. We have an over 20-year history of technology innovation and hold eight patents.
We are subject to periodic examination by regulators under the authority of the Federal Financial Institutions Examination Council (“FFIEC”) under its Guidance on the Supervision of Technology Services Providers and the Gramm-Leach-Bliley Act of 1999, and federal, state and other laws that apply to technology service providers as a result of the services we provide to the institutions and entities they regulate.
We are subject to periodic examination by regulators under the authority of the Federal Financial Institutions Examination Council (“FFIEC”) under its Guidance on the Supervision of Technology Services Providers and the Gramm-Leach-Bliley Act of 1999, and federal, state and other laws that apply to technology service providers for financial institutions, as a result of the services we provide to the institutions and entities they regulate.
These laws and regulations may involve, among other things, AI, intellectual property, distribution, electronic contracts, competition, wiretapping, consumer protection and taxation. The application and interpretation of these laws, regulations and policies are often uncertain and may have unpredictable consequences, particularly in the new and rapidly evolving industry in which we operate.
These laws and regulations may involve, among other things, AI, intellectual property, distribution of content, electronic contracts, competition, wiretapping, consumer protection and taxation. The application and interpretation of these laws, regulations and policies are often uncertain and may have unpredictable consequences, particularly in the new and rapidly evolving industry in which we operate.
Our critical infrastructure, hosted within the Data Centers, is designed to meet and exceed Tier 3 standards in all relevant categories. This allows us to deliver secure and compliant services to customers within heavily regulated industries, including financial services, healthcare, and other highly regulated industries.
Our critical infrastructure, hosted within the Data Centers, is designed to meet and exceed Tier 3 standards in all relevant categories. This allows us to deliver secure and compliant services to customers within heavily regulated industries, including financial services and healthcare, and other industries.
Managed IT security services are intended to ensure that a client’s IT infrastructure and services remain operational, secure and optimized. Customers of our managed IT security services typically pay a recurring fee, often based on service-level agreements that define the specific services and performance metrics.
Managed IT security services are intended to ensure that a client’s IT infrastructure and services remain operational, secure and optimized. Customers of our managed IT security services typically pay a recurring fee, often based on service-level agreements that define the specific services and performance metrics. 2.
Acquiring and Investing in Complementary Technologies and Businesses Our strategy also includes acquiring, or investing in technologies, solutions or businesses that complement our business and cross-selling them to additional synergistic businesses. In furtherance of this strategy, we have strategically added specialized employees and complementary companies, products and technologies to our existing business.
Acquiring and Investing in Complementary Technologies and Businesses Our strategy also includes acquiring or investing in technologies, solutions or businesses that complement our business and cross-selling them to additional synergistic businesses. In furtherance of this strategy, we have strategically added specialized employees and complementary products and technologies to our existing business.
Company Business Strategies Cloud Infrastructure and Cybersecurity Solutions Our continued growth depends on attracting new customers through the introduction of new services and further penetration of the cloud infrastructure and cybersecurity sectors.
Our Business Strategies Cloud Infrastructure and Cybersecurity Solutions Our continued growth depends on attracting new customers through the introduction of new services and further penetration of the cloud infrastructure and cybersecurity sectors.
Following an examination, our financial institution customers may request the open section of the report of examination through their lead examination agency. The regulatory landscape related to generative AI and machine learning is rapidly evolving and is likely to remain uncertain for the foreseeable future.
Following an examination, our financial institution customers may request the open section of the report of examination through their lead examination agency. In addition, the regulatory landscape related to generative AI and machine learning is rapidly evolving and is likely to remain uncertain for the foreseeable future.
Developments in the AI sector are occurring at a rapid pace, and our competitors’ services may already include AI features. In order to compete effectively, we seek to offer solutions that are differentiated from existing services, superior in quality and more appealing than those of our competitors.
Developments in the AI sector are occurring at a rapid pace, and our competitors’ services may already include similar or superior AI features. 4 In order to compete effectively, we seek to offer solutions that are differentiated from existing services, superior in quality and more appealing than those of our competitors.
We have successfully defended certain of our intellectual property in the past and have historically generated revenue through licensing fees for the use of our patents. We intend to continue defending our intellectual property rights. 3 Marketing Strategy We invest in advertising and marketing primarily for the purpose of acquiring customers for our products and solutions.
We have successfully defended certain of our intellectual property in the past and have historically generated revenue through licensing fees for the use of our patents. We intend to continue defending our intellectual property rights. Marketing Strategy We invest in advertising and marketing primarily for the purpose of acquiring clients for our products and solutions.
The ManyCam software provides multiple camera feeds, backgrounds and effects while also enabling users to share presentations, spreadsheets and documents. We anticipate integrating ManyCam as an offering for our new customers and seek to optimize our cross-selling efforts of ManyCam with our other technology solutions.
The ManyCam software provides multiple camera feeds, backgrounds and effects while also enabling users to share presentations, spreadsheets and documents. We cross sell ManyCam as an offering for our customers and seek to optimize our cross-selling efforts of ManyCam with our other technology solutions.
As we develop products or incorporate technologies from third parties, such as generative AI and machine learning, we must comply with applicable laws and regulation. 4 Company Internet Site and Availability of SEC Filings Our corporate website is located at www.ipm.com .
As we develop products or incorporate generative AI and machine learning technologies from third parties, we must comply with applicable laws and regulations. Company Internet Site and Availability of SEC Filings Our corporate website is located at www.ipm.com .
Professional Services Our professional services include the design and implementation of a wide range of IT products and services, such as cybersecurity, software planning, IT infrastructure, data center design and configuration, designing and implementing on-premises, hybrid or cloud computing solutions, website development, developing or integrating systems and software and IT cost management.
Professional Services Our professional services include the design and implementation of a wide range of IT products and services, such as cybersecurity, software planning, IT infrastructure, data center design and configuration, hybrid or cloud computing solutions, website development, developing or integrating systems and software, and IT cost management.
In addition, we continue to explore strategic opportunities, including, but not limited to, potential mergers or acquisitions of other assets or entities that are synergistic to our business. Defend our Intellectual Property We have a portfolio of eight issued patents.
In addition, we continue to explore strategic opportunities, including, but not limited to, potential mergers or acquisitions of other assets or entities that are synergistic to our business. Defend our Intellectual Property As of the date of this report, we have a portfolio of eight issued patents.
Competition and Our Industry Competition in our industry remains fierce. The market for cloud-managed IT and cybersecurity solutions is extremely dynamic and is undergoing constant change. We believe this environment creates significant opportunities for us as well as our direct and indirect competitors.
The market for cloud-managed IT and cybersecurity solutions is extremely dynamic and is undergoing constant change. We believe this environment creates significant opportunities for us as well as our direct and indirect competitors.
Our procurement services experience a seasonal pattern as revenues will typically be lower as our customers get closer to the end of their budgeted spending periods, which generally tend to be the fourth quarter.
Our procurement services experience a seasonal pattern, as revenues are typically lower as our customers get closer to the end of their budgeted spending periods, which generally tend to be the fourth quarter of a given fiscal year.
Our sales force is comprised of senior account executives that concentrate on named account territories, senior solution architects that provide dedicated support to our senior account executives and affiliate sales efforts, as well as other sales personnel that manage inbound leads from our website and referrals from Newtek under our referral arrangement.
Our sales force is comprised of senior account executives that concentrate on named account territories, senior solution architects that provide dedicated support to our senior account executives and affiliate sales efforts, as well as other sales personnel that manage inbound leads from our website and referrals from NewtekOne, Inc. (“Newtek”) under our referral arrangement (as further described below).
Employees and Human Capital We are committed to fostering a diverse and inclusive workplace, investing in employee development, and maintaining a strong culture of innovation and collaboration. As of March 14, 2025, we had 55 full-time employees and one part-time employee.
Employees and Human Capital We are committed to fostering a diverse and inclusive workplace, investing in employee development, and maintaining a strong culture of innovation and collaboration. As of March 13, 2026, we had 53 full-time employees and one part-time employee.
In addition to managing client relationships, our sales force is focused on expanding the number of solutions our customers purchase from us by introducing them to additional solutions. Going forward, we plan to utilize search engine optimization, search engine marketing, generative engine optimization and targeted marketing campaigns in furtherance of our goals.
In addition to managing client relationships, our sales force is focused on expanding the number of solutions our customers purchase from us by introducing them to additional solutions. We also utilize search engine optimization, search engine marketing, generative engine optimization and targeted marketing campaigns in furtherance of our goals. Competition and Our Industry Competition in our industry remains fierce.
Our IT and Cloud-Based Solutions We sell and provide a range of services across five core areas, each as further described below: managed IT security services, professional services, procurement services, secure private cloud hosting, managed backup and disaster recovery and web hosting.
Our IT and Cloud-Based Solutions We sell and provide a range of services across six core areas, each as further described below: (i) managed IT security services, (ii) secure private cloud hosting, (iii) managed backup and disaster recovery, (iv) professional services, (v) procurement services and (vi) web hosting. 1.
In addition, many of our competitors have more extensive customer bases and broader customer relationships than we have, including relationships with our potential customers. Additionally, in the future, we plan to make arrangements with third parties to incorporate AI features into our secure private cloud offerings.
In addition, many of our competitors have more extensive customer bases and broader customer relationships than we have, including relationships with our potential customers. Additionally, we have arrangements with several third-party partners that enable us to incorporate AI features into our secure private cloud offerings.
The terms of the license agreements for the Data Centers located in Arizona and New Jersey extend through 2027 and 2026, respectively. Although we do not own or operate the Data Centers, we aim to use the high-level operations and standards provided by the Data Centers through our license agreements to provide our customers with secure and flexible cloud services.
Although we do not own or operate the Data Centers, we aim to use the high-level operations and standards provided by the Data Centers through our license agreements to provide our customers with secure and flexible cloud services.
ITEM 1. BUSINESS Company Overview Prior to the completion of the Transactions, we operated a network of consumer applications. Our product portfolio included Paltalk, Camfrog and Tinychat, which together hosted a large collection of video-based communities.
Prior to the completion of the Transactions, we operated a network of consumer applications. Our product portfolio included Paltalk, Camfrog and Tinychat, which together hosted a large collection of video-based communities. Our other products included Vumber, a telecommunications service provider.
Following the Transactions, we provide a comprehensive range of IT-related services, including dedicated server hosting, cloud hosting, data storage, managed security, backup and disaster recovery, and other related services including consulting and implementing technology solutions for large enterprise and commercial clients across the United States as well as small-and-medium sized businesses.
ITEM 1. BUSINESS Company Overview We provide a comprehensive range of IT-related services, including managed IT security services, secure private cloud hosting, managed backup and disaster recovery, professional services, procurement services, web hosting, and other related services including consulting and implementing technology solutions for large enterprise and commercial clients across the United States as well as small-and-medium sized businesses.
In the future, we plan to make arrangements with third parties to incorporate artificial intelligence (“AI”) features into our secure private cloud offerings. Revenue from such cloud services is recognized ratably over the period in which the cloud services are provided.
We actively engage with third parties to enhance our secure private cloud offerings with artificial intelligence (“AI”) features and benefits. Revenue from such cloud services is recognized ratably over the period in which the cloud services are provided. 3.
We have an over 20-year history of technology innovation and hold eight patents. We were incorporated under the laws of the State of Delaware in 2005. Our principal executive office is located at 30 Jericho Executive Plaza Suite 400E, Jericho, NY 11753.
We were incorporated under the laws of the State of Delaware in 2005. Our principal executive office is located at 30 Jericho Executive Plaza Suite 400E, Jericho, NY 11753.
As discussed below, following the Transactions, we continue to support our ManyCam software, which is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools.
Our ManyCam Software Product In addition to our IT and cloud-based solutions, we offer and support our ManyCam software, which is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools.
We operate a secure private cloud from private suites in completely isolated areas that are leased within two Tier 3 data center facilities located in Phoenix, Arizona, and Edison, New Jersey (the “Data Centers”), pursuant to certain license agreements.
Secure Private Cloud Hosting Our secure private cloud hosting offerings include a digital infrastructure, which consists of dedicated and fully isolated cloud environments designed to deliver security, control and compliance for business-critical applications and client data. 1 We operate a secure private cloud from private suites in completely isolated areas that are leased within two Tier 3 data center facilities located in Phoenix, Arizona, and Edison, New Jersey (the “Data Centers”), pursuant to certain license agreements.
The duration of such contracts is typically between one and four years, although the term may vary based on the needs of each particular customer.
The duration of such contracts is typically between one and four years, although the term may vary based on the needs of each particular customer. Customers of our web hosting services are invoiced on a monthly basis and pay a monthly fee, with revenue recognized on a monthly basis.
Our strategy for cybersecurity solutions focuses on delivering cutting-edge, compliance-driven security solutions through an integrated approach, prioritizing proactive threat mitigation, automation, and seamless implementation to enhance customer trust and accelerate adoption.
Our strategy for cybersecurity solutions focuses on delivering cutting-edge, compliance-driven security solutions through an integrated approach, prioritizing proactive threat mitigation, automation, and seamless implementation to enhance customer trust and accelerate adoption. 3 Our strategy is to approach these opportunities in a measured way, being mindful of our resources and evaluating factors such as potential revenue, time to market and amount of capital needed to invest in the opportunity.
Customers are typically charged set rates per the contract and are charged monthly based on usage. Web Hosting Our web hosting services consist of several advanced security measures, including Secure Sockets Layer and Transport Layer Security (“SSL/TLS”) encryption, firewalls, distributed denial-of-service (“DDoS”) protection, malware scanning, and secure server configurations.
We estimate the price based on observable inputs, including direct labor hours and allocable costs, or use observable stand-alone prices when they are available. 2 6. Web Hosting Our web hosting services consist of several advanced security measures, including Secure Sockets Layer and Transport Layer Security (“SSL/TLS”) encryption, firewalls, distributed denial-of-service (“DDoS”) protection, malware scanning, and secure server configurations.
Removed
Our other products included Vumber, which is a telecommunications services provider that enables users to communicate privately by having multiple phone numbers with any area code through which calls can be forwarded to a user’s existing telephone number.
Added
On January 2, 2025 (the “Closing Date”), we completed (i) the acquisition of Newtek Technology Solutions, Inc., a New York corporation (“NTS”), and such acquisition, the “Acquisition”), and (ii) the sale of our telecommunications services provider, “Vumber”, as well as our “Paltalk” and “Camfrog” applications and certain assets and liabilities related to such services provider and applications (such sale, the “Divestiture,” and, together with the Acquisition, the “Transactions”).
Removed
Customers of our professional services are typically invoiced either based on a time and materials basis or on a straight-line basis for all fixed fee arrangements. Procurement Services We offer two types of procurement services to our customers.
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Following the Divestiture, we are no longer engaged in the business of providing video-based, live streaming, virtual camera and telecommunications software to consumers, as and to the extent such businesses were previously conducted by us pursuant to the Vumber, Paltalk and Camfrog applications. In addition, prior to the Closing Date, we ceased all operations of our Tinychat service and application.
Removed
We estimate the price based on observable inputs, including direct labor hours and allocable costs, or use observable stand-alone prices when they are available. 1 Secure Private Cloud Hosting Our secure private cloud hosting offerings include a digital infrastructure which consists of dedicated and fully isolated cloud environments designed to deliver security, control and compliance for business-critical applications and client data.
Added
As of December 31, 2025, the terms of the license agreements for the Data Centers located in Arizona and New Jersey extended through 2027 and 2026, respectively. Subsequent to year end, we amended our agreement with the Data Center in Phoenix, Arizona through August 31, 2032.
Removed
Our strategy is to approach these opportunities in a measured way, being mindful of our resources and evaluating factors such as potential revenue, time to market and amount of capital needed to invest in the opportunity.
Added
Customers are typically charged set rates per the contract and are charged monthly based on usage. 4.
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In addition, we are planning to launch an AI Data Readiness solution in the second quarter of 2026 that we believe will improve the reliability, security, and outcome of adopting AI technologies by assessing, structuring, and securing business data in a safe and effective manner. 5. Procurement Services We offer two types of procurement services to our customers.
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
41 edited+7 added−34 removed111 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
41 edited+7 added−34 removed111 unchanged
2024 filing
2025 filing
Biggest changeAs a result, much of the subscription revenue we report in each period is deferred revenue from subscription agreements entered into during previous periods. Consequently, a decline in new or renewed subscriptions in any one quarter will negatively affect our revenue in future quarters.
Biggest changeIn addition, we recognize subscription revenue from ManyCam customers monthly over the term of the subscription, which are offered in twelve- and twenty-four-month terms. As a result, much of the subscription revenue we report in each period is deferred revenue from subscription agreements or other contracts entered into during previous periods.
We are party to license agreements with Aligned Data Centers (Phoenix) PropCo, LLC and Iron Mountain Data Centers LLC with respect the Data Centers located in Phoenix, Arizona, and Edison, New Jersey, respectively, through which we offer our secure private cloud hosting services.
We are party to license agreements with Aligned Data Centers (Phoenix) PropCo, LLC and Iron Mountain Data Centers LLC with respect to the Data Centers located in Phoenix, Arizona, and Edison, New Jersey, respectively, through which we offer our secure private cloud hosting services.
These regulations and laws may cover taxation, privacy, data protection, pricing, content, intellectual property and proprietary rights, distribution, mobile communications, electronic device certification, electronic waste, electronic contracts and other communications, consumer protection, web services, the provision of online payment services, unencumbered Internet access to our services, the design and operation of websites and the characteristics and quality of services.
These regulations and laws may cover taxation, privacy, data protection, pricing, content, intellectual property and proprietary rights, distribution of content, mobile communications, electronic device certification, electronic waste, electronic contracts and other communications, consumer protection, web services, the provision of online payment services, unencumbered Internet access to our services, the design and operation of websites and the characteristics and quality of services.
Factors that may contribute to the variability of our results of operations include: ● changes in expectations as to our future financial performance; ● announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships or capital commitments; ● market acceptance of our new products and solutions; ● the amount of advertising and marketing that is available and spent on customer campaigns; ● disruptions in the availability of our applications on third party platforms; ● actual or perceived violations of privacy obligations and compromises of customer data; ● the entrance of new competitors in our market whether by established companies or the entrance of new companies; ● additions or departures of key personnel and the cost of attracting and retaining application developers and other software engineers; ● general market conditions, including market volatility and the impact of inflation; and ● developments in connection with our current patent litigation or future patent litigation.
Factors that may contribute to the variability of our results of operations include: ● changes in expectations as to our future financial performance; ● announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships or capital commitments; ● market acceptance of our new products and solutions; ● the amount of advertising and marketing that is available and spent on customer campaigns; ● disruptions in the availability of our applications on third party platforms; ● actual or perceived violations of privacy obligations and compromises of customer data; ● the entrance of new competitors in our market whether by established companies or the entrance of new companies; 13 ● additions or departures of key personnel and the cost of attracting and retaining application developers and other software engineers; ● general market conditions, including market volatility and the impact of inflation; and ● developments in connection with our current patent litigation or future patent litigation.
If our security measures are breached due to third-party action, employee error or otherwise, and as a result, our customers’ data becomes available to unauthorized parties, we could incur liability and our reputation would be damaged, which could lead to the loss of current and potential customers. Furthermore, we maintain a work-from-home policy for our employees.
If our security measures are breached due to third-party action, employee error or otherwise, and as a result, our customers’ data becomes available to unauthorized parties, we could incur liability and our reputation would be damaged, which could lead to the loss of current and potential customers. 5 Furthermore, we maintain a work-from-home policy for our employees.
Such restrictions could limit the ability of downstream customers and users worldwide to acquire, deploy, and use systems that include our products, software, and services, and negatively impact our business and financial results. 13 Risks Related to Our Intellectual Property If we are unable to protect our intellectual property rights, we may be unable to compete with competitors developing similar technologies.
Such restrictions could limit the ability of downstream customers and users worldwide to acquire, deploy, and use systems that include our products, software, and services, and negatively impact our business and financial results. Risks Related to Our Intellectual Property If we are unable to protect our intellectual property rights, we may be unable to compete with competitors developing similar technologies.
Federal Reserve and other central banks to continue to increase interest rates, which could have the effects of raising the cost of capital and depressing economic growth, either of which, or the combination thereof, could hurt the financial and operating results of our business and impact our ability to raise capital. 9 We may need additional capital to execute our business plan.
Federal Reserve and other central banks to increase interest rates, which could have the effects of raising the cost of capital and depressing economic growth, either of which, or the combination thereof, could hurt the financial and operating results of our business and impact our ability to raise capital. 9 We may need additional capital to execute our business plan.
Our ability to execute on our sales strategy is also dependent on our ability to identify, hire, train and retain a sufficient number of qualified sales personnel. There is a shortage of qualified personnel in these fields, and like many other companies we have recently encountered additional challenges in hiring and retaining qualified personnel.
Our ability to execute on our sales strategy is also dependent on our ability to identify, hire, train and retain a sufficient number of qualified sales personnel. There is a shortage of qualified personnel in these fields, and like many other companies, we have encountered additional challenges in hiring and retaining qualified personnel.
Such claim, and any future claims of infringement, could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages and prevent us from using licensed technology that may be fundamental to our products and solutions.
Such claims, and any future claims of infringement, could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages and prevent us from using licensed technology that may be fundamental to our products and solutions.
Katz for the benefit of certain of his family members. Mr. Katz is not a beneficiary of the trust and does not hold voting or dispositive power over the shares held by the trust. 15 Mr. Katz, The J.
Katz for the benefit of certain of his family members. Mr. Katz is not a beneficiary of the trust and does not hold voting or dispositive power over the shares held by the trust. Mr. Katz, The J.
The Data Centers host our critical infrastructure and are designed to conform to the global standards for such centers. Although the terms of the license agreements for the Data Centers located in Arizona and New Jersey currently extend through 2027 and 2026, respectively, such license agreements may not continue to be available on commercially reasonable terms, or at all.
The Data Centers host our critical infrastructure and are designed to conform to the global standards for such centers. Although the terms of the license agreements for the Data Centers located in Arizona and New Jersey currently extend through 2032 and 2026, respectively, such license agreements may not continue to be available on commercially reasonable terms, or at all.
Growth in the demand for our services may be inhibited, and we may be unable to profitably maintain or grow our customer base for a nu mber of reasons, such as: ● our inability to provide compelling services or effectively market them to new and existing customers; ● customer migration to platforms that we do not have expertise in managing; ● the inability of customers to differentiate our services from those of our competitors or our inability to effectively communicate such distinctions; ● the decision of customers to host internally, in third-party cloud infrastructure, or in third-party colocation facilities as an alternative to the use of our services; ● the decision of customers to use internal or other third-party resources to manage their platforms and applications; ● reductions in IT spending by customers or potential customers; ● a reduction in the demand for our services due to macroeconomic factors in the markets in which we operate; ● our inability to strengthen awareness of our brand; ● past or future cybersecurity-related incidents; and ● reliability, quali ty or compatibility problems with our services.
Growth in the demand for our services may be inhibited, and we may be unable to profitably maintain or grow our customer base for a number of reasons, such as: ● our inability to provide compelling services or effectively market them to new and existing customers; ● customer migration to platforms that we do not have expertise in managing; ● the inability of customers to differentiate our services from those of our competitors or our inability to effectively communicate such distinctions; ● the decision of customers to host internally, in third-party cloud infrastructure, or in third-party colocation facilities as an alternative to the use of our services; ● the decision of customers to use internal or other third-party resources to manage their platforms and applications; ● reductions in IT spending by customers or potential customers; ● a reduction in the demand for our services due to macroeconomic factors in the markets in which we operate; ● our inability to strengthen awareness of our brand; ● past or future cybersecurity-related incidents; and ● reliability, quality or compatibility problems with our services.
As partial consideration for the Acquisition, we issued Newtek 4,000,000 shares of the Company’s Series A Non-Voting Common Equivalent Stock, par value $0.001 per share (the “Series A Preferred Stock”).
As partial consideration for the Acquisition, we issued Newtek 4,000,000 shares of our Series A Non-Voting Common Equivalent Stock, par value $0.001 per share (the “Series A Preferred Stock”).
As a holder of our Series A Preferred Stock, Newtek does not have voting rights, except with respect to certain protective matters, such as amendments to the Charter or Series A Preferred Stock Certificate of Designations (the “Certificate of Designations”) that significantly and adversely affect the preferences, rights, privileges or powers of the Series A Preferred Stock.
As a holder of our Series A Preferred Stock, Newtek does not have voting rights, except with respect to certain protective matters, such as amendments to the Company’s Certificate of Incorporation or the Series A Preferred Stock Certificate of Designations (the “Certificate of Designations”) that significantly and adversely affect the preferences, rights, privileges or powers of the Series A Preferred Stock.
These broad market fluctuations may also adversely affect the trading price of our common stock, especially in light of the macro-economic factors including rising inflation rates, increased interest rates, bank-specific and broader financial institution liquidity challenges, the Russia-Ukraine conflict and the Israel-Hamas conflict.
These broad market fluctuations may also adversely affect the trading price of our common stock, especially in light of the macro-economic factors including rising inflation rates, increased interest rates, bank-specific and broader financial institution liquidity challenges, the Russia-Ukraine conflict, the Israel-Hamas conflict and the ongoing conflict in Iran and the Middle East.
In connection with the Acquisition, we entered into a referral arrangement with Newtek pursuant to which Newtek will continue to refer potential clients to us for a fee. Our referral arrangement with Newtek is terminable by either us or Newtek at any time.
In connection with the Acquisition, we entered into a referral arrangement with Newtek pursuant to which Newtek will continue to refer potential clients to us at the same level it provided NTS for a fee. Our referral arrangement with Newtek is terminable by either us or Newtek at any time.
Such pressure could adversely affect our gross margins if we are not able to reduce our costs commensurate with such price reductions. We rely on a limited number of customers for a material portion of our revenues and income.
Such pressure could adversely affect our gross margins if we are not able to reduce our costs commensurate with such price reductions. 6 We rely on a limited number of customers for a material portion of our revenues and income. A substantial portion of our revenue is derived from a limited number of customers.
As of March 14, 2025, Jason Katz, our Chairman of the Board, and our Chief Executive Officer, and our largest stockholder, The J. Crew Delaware Trust B, beneficially owned an aggregate of approximately 25.9% of our outstanding common stock. The J. Crew Delaware Trust B is a trust formed by Mr.
As of March 13, 2026, Jason Katz, our Chairman of the Board, and our Chief Executive Officer, and our largest stockholder, The J. Crew Delaware Trust B, beneficially owned an aggregate of approximately 26.5% of our outstanding common stock. The J. Crew Delaware Trust B is a trust formed by Mr.
As of March 14, 2025, Newtek owns approximately 30.2% of our issued and outstanding common stock or common-equivalent equity (on an as-converted and fully-diluted basis), calculated based on the number of shares of our common stock outstanding as of March 14, 2025.
As of March 13, 2026, Newtek owned approximately 30.6% of our issued and outstanding common stock or common-equivalent equity (on an as-converted and fully-diluted basis), calculated based on the number of shares of our common stock outstanding as of March 13, 2026.
We may not discover all such incidents or activity or be able to respond or otherwise address them promptly, in sufficient respects or at all. 5 In addition, we have in the past and may in the future be required to expend significant capital and other resources to detect, remedy, protect against or alleviate breaches of our network and security, and we may not be able to remedy these problems in a timely manner, or at all.
In addition, we have in the past and may in the future be required to expend significant capital and other resources to detect, remedy, protect against or alleviate breaches of our network and security, and we may not be able to remedy these problems in a timely manner, or at all.
In some instances, we and our customers can be unaware of an incident or its magnitude and effects. Additionally, the rapid evolution and increasing prevalence of AI technologies may also increase our cybersecurity risks. Moreover, globally there has been an increase in cybersecurity attacks since Russia invaded Ukraine.
In some instances, we and our customers can be unaware of an incident or its magnitude and effects. Additionally, the rapid evolution and increasing prevalence of AI technologies has increased our cybersecurity risks. Moreover, globally there has been an increase in cybersecurity attacks, particularly as a result of international conflicts.
Because we recognize revenue from subscriptions over the term of the subscription, the full impact of downturns or upturns in subscription sales may not be immediately reflected in our results of operations or financial condition. We recognize subscription revenue from ManyCam customers monthly over the term of the subscription, which are offered in twelve- and twenty-four-month terms.
Because we recognize revenue from subscriptions over the term of the subscription, the full impact of downturns or upturns in subscription sales may not be immediately reflected in our results of operations or financial condition.
Furthermore, as a result of an intellectual property challenge, we may be prevented from offering our products and solutions unless we enter into royalty, license or other agreements.
Furthermore, as a result of an intellectual property challenge, we may be prevented from offering our products and solutions unless we enter into royalty, license or other agreements. We may not be able to obtain such agreements at all or on terms acceptable to us, and as a result, we may be precluded from offering our products and solutions.
Any such sale (or the perception that any such a sale may occur), coupled with the increase in the outstanding number of shares of our common stock following the conversion of the Series A Preferred Stock upon transfer, could have a dilutive effect to our existing stockholders and may affect the market for, and the market price of, shares of common stock in an adverse manner. 10 We may not be able to effectively integrate the businesses of NTS or realize the anticipated benefits and synergies expected from the Acquisition .
Any sale by Newtek of its shares of Series A Preferred Stock (or the perception that any such a sale may occur), coupled with the increase in the outstanding number of shares of our common stock following the conversion of the Series A Preferred Stock upon transfer, could have a dilutive effect to our existing stockholders and may affect the market for, and the market price of, shares of common stock in an adverse manner.
Our business, financial condition and results of operations could be harmed by any damage or failure that interrupts or delays our operations. Our insurance may not cover all of the losses or compensate us for the possible loss of clients occurring during any period that we are unable to provide service.
Our insurance may not cover all of the losses or compensate us for the possible loss of clients occurring during any period that we are unable to provide service.
If our common stock is delisted by Nasdaq, our common stock would likely trade on the OTCQB where an investor may find it more difficult to sell our shares or obtain accurate quotations as to the market value of our common stock. 17 ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
If our common stock is delisted by Nasdaq, our common stock would likely trade on the OTCQB where an investor may find it more difficult to sell our shares or obtain accurate quotations as to the market value of our common stock. 14 Shares issuable upon conversion of the Series A Preferred Stock, could depress our stock price.
In any of these cases, we may be required to expend significant time and expense to prevent infringement or to enforce our rights. Although we have taken measures to protect our proprietary rights, others may offer products or concepts that are substantially similar to ours and compete with our business.
Although we have taken measures to protect our proprietary rights, others may offer products or concepts that are substantially similar to ours and compete with our business.
Because our services are critical to many of our customers’ businesses, any significant disruption in our services could result in lost profits or other indirect or consequential damages to our customers.
Legal and Regulatory Risks Customers could potentially expose us to lawsuits for their lost profits or damages, which could impair our results of operations. Because our services are critical to many of our customers’ businesses, any significant disruption in our services could result in lost profits or other indirect or consequential damages to our customers.
However, third parties may knowingly or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held by us, and pending and future trademark and patent applications may not be approved. In addition, effective intellectual property protection may not be available in every country in which we operate or intend to operate our business.
However, third parties may knowingly or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held by us, and pending and future trademark and patent applications may not be approved.
Given the rapidly evolving industry in which we operate, our historical results of operations may not be useful in predicting our future results of operations.
Given the rapidly evolving industry in which we operate, our historical results of operations may not be useful in predicting our future results of operations. In addition, metrics available from third parties regarding our industry and the performance of our products and solutions may not be indicative of our future financial performance.
Because of the limited trading market for our common stock, and because of the possible price volatility, stockholders may not be able to sell their shares of common stock when you desire to do so.
Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our profitability and reputation. 12 Because of the limited trading market for our common stock, and because of the possible price volatility, stockholders may not be able to sell their shares of common stock when you desire to do so.
We may not be able to obtain such agreements at all or on terms acceptable to us, and as a result, we may be precluded from offering our products and solutions. 14 Risks Related to Ownership of Our Common Stock Our common stock is historically thinly traded, stockholders may be unable to sell at or near ask prices or at all and the price of our common stock may be volatile.
Risks Related to Ownership of Our Common Stock Our common stock is historically thinly traded, stockholders may be unable to sell at or near ask prices or at all and the price of our common stock may be volatile.
In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our profitability and reputation.
In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies.
If Newtek does not provide customer referrals to us at the same level it provided NTS, or if Newtek terminates our referral arrangement, our ability to gain new customers would be materially adversely affected. Newtek historically accounted for a material portion of NTS’s revenue and income. Newtek historically was NTS’s largest customer in terms of revenue and income.
If Newtek does not provide customer referrals to us at the same level it provided NTS, or if Newtek terminates our referral arrangement, our ability to gain new customers would be materially adversely affected. We paid Newtek and its affiliates $0.3 million for the year ended December 31, 2025 in connection with the referral arrangement.
In such cases, we could be liable for substantial damage awards that may exceed our insurance coverage by unknown but significant amounts, which could materially and adversely impair our business, financial condition and results of operations.
In such cases, we could be liable for substantial damage awards that may exceed our insurance coverage by unknown but significant amounts, which could materially and adversely impair our business, financial condition and results of operations. 10 As a technology service provider to U.S. financial institutions, we are subject to regulation, supervision, and enforcement authority of numerous governmental and regulatory bodies in the jurisdictions in which we operate, which includes banking regulators.
Despite precautions we implement against possible failure of our systems, interruptions could result from natural disasters, power loss, the inability to acquire fuel for our backup generators, telecommunications failure, terrorist attacks and similar events. We also lease telecommunications lines from local, regional and national carriers whose service may be interrupted.
Our technology solutions business depends on the efficient and uninterrupted operation of our Data Centers and computer and communications hardware systems and infrastructure. Despite precautions we implement against possible failure of our systems, interruptions could result from natural disasters, power loss, the inability to acquire fuel for our backup generators, telecommunications failure, terrorist attacks and similar events.
For instance, on March 7, 2025, Cisco Systems, Inc. and Cisco Technology, Inc. filed a complaint against the Company in the U.S. District Court for the District of Delaware, alleging that the Company’s ManyCam software has infringed certain patents and seeking damages and injunctive relief.
For instance, on March 7, 2025, Cisco Systems, Inc. and Cisco Technology, Inc. filed a complaint against the Company in the U.S.
In addition, we might not be able to immediately adjust our costs and expenses to reflect these reduced revenues. Accordingly, the effect of significant downturns in user acceptance of ManyCam may not be fully reflected in our results of operations until future periods.
Accordingly, the effect of significant downturns in user demand for our products and services may not be fully reflected in our results of operations until future periods.
The risk of state-supported and geopolitical-related cyber-attacks may increase in connection with the war in Ukraine and any related political or economic responses and counter-responses.
The risk of state-supported and geopolitical-related cyber-attacks may increase in connection with the war, including the conflicts in Ukraine, Iran and the Middle East, and any related political or economic responses and counter-responses. We may not discover all such incidents or activity or be able to respond or otherwise address them promptly, in sufficient respects or at all.
These campaigns may include non-deal road shows and personal, video and telephone conferences with investors and prospective investors in which our business and business practices are described.
Investor relations activities, nominal “float” and supply and demand factors may affect the price of our common stock. We have engaged an investor relations firm to create investor awareness for our Company. These campaigns may include non-deal road shows and personal, video and telephone conferences with investors and prospective investors in which our business and business practices are described.
Incurring debt would increase our fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations. Risks Related to the Transactions Shares issuable upon conversion of the Series A Preferred Stock, could depress our stock price.
Incurring debt would increase our fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations. IPM currently benefits from Newtek’s referral network, and we expect to rely on Newtek’s referral network in the future .
Removed
For example, in early 2018, following an unauthorized third party misappropriating three of NTS’s domain names, NTS’s management and forensic investigators determined that attackers compromised a portion of its shared webhosting system, and may have acquired certain customer information limited to its shared webhosting customers and/or gained access to certain of its shared webhosting servers.
Added
For instance, Newtek is currently the largest customer of the Company, accounting for 32.5% of our revenue for the fiscal year ended December 31, 2025.
Removed
In response, NTS took a range of steps designed to further secure its systems, enhance its security protections, enhance access controls and prevent future unauthorized activity.
Added
The loss of, or a reduction in orders from, any one of our significant customers, adverse changes in their procurement strategies, or their decision to terminate or not renew contracts—many of which are terminable on short notice—could materially and adversely affect our business, financial condition, and results of operations.
Removed
Prior to the consummation of the Transactions, during the 2023 and 2024 fiscal years, NTS relied on a limited number of customers for a material portion of its revenues. Additionally, during 2024, NTS’s second largest customer informed NTS it would cease utilizing its services due to a consolidation of its vendors.
Added
We also lease telecommunications lines from local, regional and national carriers whose service may be interrupted. Our business, financial condition and results of operations could be harmed by any damage or failure that interrupts or delays our operations.
Removed
Following the completion to the Transactions, this customer has since resumed utilizing our services, but we cannot be certain at what level, or for what period, the customer relationship will continue.
Added
Based on the variability of contract and service type offered with our managed IT security services, professional services and secure private cloud hosting, we report deferred revenue for any unearned portion of revenue from contracts we entered into during previous periods.
Removed
A loss of one or more of our customers, if not replaced, could adversely impact our financial condition and prospects. 6 Our technology solutions business depends on the efficient and uninterrupted operation of our Data Centers and computer and communications hardware systems and infrastructure.
Added
Consequently, a decline in certain new or renewed agreements in any one quarter will negatively affect our revenue in future quarters. In addition, we might not be able to immediately adjust our costs and expenses to reflect these reduced revenues.
Removed
Pursuant to the Registration Rights Agreement, Newtek is subject to certain lockup and transfer restrictions with respect to the Series A Preferred Stock for one year following the closing of the Acquisition.
Added
In addition, effective intellectual property protection may not be available in every country in which we operate or intend to operate our business. 11 In any of these cases, we may be required to expend significant time and expense to prevent infringement or to enforce our rights.
Removed
Following this lockup period, Newtek may wish to dispose of some or all of its Series A Preferred Stock, and as a result, may seek to sell its shares of Series A Preferred Stock, which would automatically convert into shares of our common stock upon the occurrence of certain qualifying transfers.
Added
District Court for the District of Delaware, alleging that the Company’s ManyCam software has infringed certain patents and seeking damages and injunctive relief and, as of December 31, 2025, the Company had incurred approximately $0.7 million in expense for the year ended December 31, 2025 in defense of these claims.
Removed
The success of the Acquisition and the transactions contemplated thereby will depend, in part, on our ability to realize the anticipated benefits from acquiring NTS and its business.
Removed
The anticipated benefits and estimates of future growth, synergies and optimizations of the Acquisition may not be realized fully or at all, may take longer to realize than expected or could have other adverse effects that we do not currently foresee.
Removed
The failure to realize the anticipated benefits and synergies expected from the Acquisition could adversely affect our business, financial condition and operating results. In addition, we have devoted, and continue to devote, significant management attention and resources to integrate the respective business practices and operations of NTS.
Removed
Potential difficulties that we may encounter as part of the integration process incl ude the following: ● our inability to successfully combine our ManyCam product with the business of NTS in a manner that permits us to achieve, on a timely basis or at all, the enhanced revenue opportunities, cost savings and other benefits anticipated to result from the Acquisition; ● complexities associated with managing our existing business and NTS, including difficulty addressing possible differences in operational philosophies and the challenge of integrating complex systems, technology, networks and other assets of NTS in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies; ● the assumption of contractual obligations with less favorable or more restrictive terms; and ● potential unknown liabilities and unforeseen increased expenses or delays associated with the transactions.
Removed
Any of these issues could adversely affect our ability to maintain relationships with customers, suppliers, employees and other constituencies or achieve the anticipated benefits of the Acquisition or could negatively impact our earnings or otherwise adversely affect our business and financial results. Through the Acquisition, we are entering a new line of business which is highly competitive.
Removed
Through the Acquisition, we acquired NTS’s existing operations. Entering a new line of business has many risks, including the ability to generate sufficient revenue to fund operations in the future. While we believe we have sufficient capital to cover integration expenses, we may have to fund NTS’s operations from cash on hand until sales are sufficient to fund ongoing operations.
Removed
A new business line may never generate significant revenues or have enough sales to be profitable. These risks may be further exacerbated by the sale of the Transferred Assets, which have historically been our main source of revenue.
Removed
With respect to any new line of business, we may have competitors that are better established in the market, have greater experience with such line of business or have greater resources than we do.
Removed
Furthermore, certain of our current employees may have limited experience with dedicated server hosting, cloud hosting, data storage, managed security, backup and disaster recovery and other related services and may have limited experience with respect to any other line of business we may enter into as we seek to expand our operations.
Removed
Newtek previously identified material weaknesses in NTS’s internal controls over financial reporting. If the material weaknesses are not remediated, it may adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner or lower investor confidence in our Company and, as a result, negatively affect the value of our common stock.
Removed
As disclosed in Newtek’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024, Newtek’s management concluded that NTS did not maintain effective internal controls over financial reporting as of December 31, 2023, as a result of the material weaknesses related to deficiencies in the conversion of NTS’s system of record for webhosting revenue and ineffective control design and implementation over revenue recognition.
Removed
As we continue to integrate NTS’s operations into our business, we are evaluating our internal controls over financial reporting, including internal controls related to NTS, following the Acquisition. As a result of these integration activities, certain internal controls may be changed.
Removed
We are permitted to exclude NTS from our assessment of internal controls over financial reporting during the first year following the Acquisition.
Removed
If we fail to maintain adequate internal controls over financial reporting, we may be subject to litigation or regulatory scrutiny and investors could lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock. 11 We may record goodwill and other intangible assets that could become impaired and result in material non-cash charges to our results of operations in the future .
Removed
We accounted for the Acquisition using the acquisition method of accounting in accordance with the accounting principles generally accepted in the United States (“GAAP”). Under the acquisition method of accounting, the assets and liabilities of NTS were recorded, as of completion, at their respective fair values and added to those of the Company.
Removed
The reported financial condition and results of operations of the Company for periods after completion of the Acquisition will reflect NTS’s balances and results after completion of the Acquisition but will not be restated retroactively to reflect the historical financial position or results of operations of NTS for periods prior to the Acquisition.
Removed
Under the acquisition method of accounting, the total purchase price is allocated to NTS’s tangible assets and liabilities and identifiable intangible assets based on their fair values as of the Closing Date. The excess of the purchase price over those fair values is recorded as goodwill.
Removed
We expect that the Acquisition may result in the creation of goodwill based upon the application of the acquisition method of accounting. To the extent goodwill or intangibles are recorded and the values become impaired, we may be required to recognize material non-cash charges relating to such impairment.
Removed
Our operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the impairment. NTS historically relied on Newtek for managerial, financial and accounting support and benefitted from Newtek’s referral network, and we expect to rely on Newtek’s referral network in the future .
Removed
NTS historically relied on Newtek for managerial, financial and accounting support to manage NTS’s business.
Removed
We may not be able to effectively manage our operations without the managerial assistance of Newtek, and the Acquisition may result in the disruption of, or the loss of momentum in, our ongoing businesses or inconsistencies in standards, controls, procedures and policies, either of which could negatively impact our ability to generate revenue and income at the levels NTS historically performed.
Removed
In addition, NTS materially benefited from Newtek’s referral network, including Newtek’s patented NewTracker software, to assist NTS in generating new customers and revenues. For example, historically approximately 40% of new NTS webhosting customers have resulted from internal and external referrals from Newtek without material expenditures by NTS for marketing or advertising.
Removed
For example, during the fiscal year ended December 31, 2023 and the nine months ended September 30, 2024, Newtek accounted for 16% and 27% of NTS’s revenue, respectively.
Removed
In connection with the Acquisition, we entered into master services agreements with Newtek and Newtek Bank, National Association (“Newtek Bank”), pursuant to which we provide Newtek and Newtek Bank with the same level of managed IT services at the same or similar billing rates as NTS provided.
Removed
If we are unable to deliver the contracted services or a party terminates or breaches the agreements, or if Newtek or Newtek Bank fail to renew the agreements at the end their term, the loss of revenues would materially impact our financial condition. 12 Legal and Regulatory Risks Customers could potentially expose us to lawsuits for their lost profits or damages, which could impair our results of operations.
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Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
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Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
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2024 filing
2025 filing
Biggest changeRecognizing that human factors play a critical role in cybersecurity, our workforce and compliance training includes comprehensive security awareness program. All employees undergo quarterly security training, covering data protection, insider threat mitigation, phishing awareness, and compliance best practices.
Biggest changeAll employees undergo quarterly security training, covering data protection, insider threat mitigation, phishing awareness, and compliance best practices. Additionally, we implement strict enforcement of multi-factor authentication, just-in-time access controls, SOC 2 Type 1 controls, and continuous user behavior monitoring.
Following the Transactions, in order to support our comprehensive range of IT-related services and digital infrastructure, we have embraced a multi-layered defense approach, which helps us recognize and address the dynamic nature of cyber threats. By integrating diverse security measures, we aim to fortify our infrastructure against a spectrum of potential risks and adapt to the ever-evolving cybersecurity landscape.
In order to support our comprehensive range of IT-related services and digital infrastructure, we have embraced a multi-layered defense approach, which helps us recognize and address the dynamic nature of cyber threats. By integrating diverse security measures, we aim to fortify our infrastructure against a spectrum of potential risks and adapt to the ever-evolving cybersecurity landscape.
To date, we have not experienced any risks from cybersecurity threats that have materially affected, or are reasonably likely to materially affect, our business strategy, financial condition, results of operations, or cash flows. See “ Risk Factors – Risks Related to Our Business – We could be adversely affected by information security breaches or cyber security attacks .” 19
To date, we have not experienced any risks from cybersecurity threats that have materially affected, or are reasonably likely to materially affect, our business strategy, financial condition, results of operations or cash flows. See “ Risk Factors – Risks Related to Our Business – We could be adversely affected by information security breaches or cyber security attacks .” 16
Our core security practices include: ● continuous threat monitoring and response utilizing real-time security operations centers and next-generation endpoint detection and response to rapidly identify and neutralize threats; ● regular vulnerability assessments and penetration testing conducted through automated and manual assessments with prioritized remediation workflows to enhance security across infrastructure, applications, and client environments; ● zero trust security architecture, which implements strict identity verification, least privilege access and network segmentation to reduce attack surfaces and prevent lateral movement of threats; and ● partnerships with leading cybersecurity firms for independent security audits, risk assessments, and compliance rev iews as described below.
Our core security practices include: ● continuous threat monitoring and response utilizing real-time security operations centers and next-generation endpoint detection and response to rapidly identify and neutralize threats; ● regular vulnerability assessments and penetration testing conducted through automated and manual assessments with prioritized remediation workflows to enhance security across infrastructure, applications and client environments; ● zero trust security architecture, which implements strict identity verification, least privilege access and network segmentation to reduce attack surfaces and prevent lateral movement of threats; and ● partnerships with leading cybersecurity firms for independent security audits, risk assessments and compliance reviews as described below. 15 Recognizing that human factors play a critical role in cybersecurity, our workforce and compliance training includes comprehensive security awareness program.
ITEM 1C. CYBERSECURITY Overview At IPM, cybersecurity is at the core of our business operations and an integral part of our commitment to delivering secure, compliant, and resilient technology solutions to customers operating in highly regulated industries. Prior to the Transactions, the Company employed a comprehensive strategy with respect to cybersecurity, which was supported by both management and our Board.
ITEM 1C. CYBERSECURITY Overview At IPM, cybersecurity is at the core of our business operations and an integral part of our commitment to delivering secure, compliant, and resilient technology solutions to customers operating in highly regulated industries.
Additionally, we implement strict enforcement of multi-factor authentication, just-in-time access controls, and continuous user behavior monitoring. 18 Incident Response and Business Continuity Our incident response framework follows a structured escalation and notification process focused on rapid containment, mitigation, and recovery from cybersecurity incidents.
In January 2026, the Company received an unqualified opinion attesting to its compliance with SOC 2 Type 1 following an independent examination. Incident Response and Business Continuity Our incident response framework follows a structured escalation and notification process focused on rapid containment, mitigation, and recovery from cybersecurity incidents.
Removed
Historically, our Board was responsible for overseeing our risk management activities in general, and certain of our Board committees assisted the Board in the role of risk oversight. The operations team prior to the Transactions conducted manual and automated testing of our systems, with the goal of identifying vulnerabilities and proactively strengthening our defenses.
Item 2. Properties
Properties — owned and leased real estate
1 edited+2 added−0 removed1 unchanged
Item 2. Properties
Properties — owned and leased real estate
1 edited+2 added−0 removed1 unchanged
2024 filing
2025 filing
Biggest changeWe operate a secure private cloud from private suites in completely isolated areas that are leased within two Tier 3 data center facilities located in Phoenix, Arizona, and Edison, New Jersey pursuant to license agreements that extend until 2027 and 2026, respectively. We currently do not own any real property.
Biggest changeWe operate a secure private cloud from private suites in completely isolated areas that are leased within two Tier 3 data center facilities located in Phoenix, Arizona, and Edison, New Jersey. As of December 31, 2025, the license agreements extended until 2027 and 2026, respectively.
Added
Subsequent to year end, we amended our agreement with the data center in Phoenix through August 31, 2032. With respect to the data center facility in Edison, New Jersey, we expect to either enter into a lease extension by the end of the lease term or lease private suites at another Tier 3 data center facility.
Added
We currently do not own any real property.
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
5 edited+6 added−0 removed3 unchanged
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
5 edited+6 added−0 removed3 unchanged
2024 filing
2025 filing
Biggest changeTo our knowledge, other than as described above, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 20 PART II
Biggest changeAs of December 31, 2025, the Company had incurred approximately $0.7 million in expense for the year ended December 31, 2025 in defense of these claims. To our knowledge, other than as described above, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject. ITEM 4.
The Company alleged that certain of Cisco’s products have infringed U.S. Patent No. 6,683,858, and that the Company was entitled to damages. On August 29, 2024, the jury awarded the Company $65.7 million (the “ Award ”) in a jury verdict in connection with the Lawsuit.
The Company alleged that certain of Cisco’s products have infringed U.S. Patent No. 6,683,858, and that the Company was entitled to damages. On August 29, 2024, the jury awarded the Company $65.7 million (the “Award”) in a jury verdict in connection with the Lawsuit.
On October 8, 2024, an order granting a motion for final judgment was entered into in the Court in connection with the Lawsuit. The final judgment was entered in the Company’s favor in the amount of the Award and started the time for filing any post-trial motions or appeal.
On October 8, 2024, an order granting a motion for final judgment (the “Final Judgment”) was entered into in the Trial Court in connection with the Lawsuit in favor of the Company in the amount of the Award and started the time for filing any post-trial motions or appeal.
ITEM 3. LEGAL PROCEEDINGS Cisco WebEx Litigation On July 23, 2021, a wholly owned subsidiary of the Company, Paltalk Holdings, filed a patent infringement lawsuit (the “ Lawsuit ”) against WebEx Communications, Inc., Cisco WebEx LLC, and Cisco Systems, Inc. (collectively, “ Cisco ”), in the U.S. District Court for the Western District of Texas (the “ Court ”).
ITEM 3. LEGAL PROCEEDINGS Cisco WebEx Litigation On July 23, 2021, a wholly owned subsidiary of the Company, Paltalk Holdings, Inc., filed a patent infringement lawsuit (the “Lawsuit”) against WebEx Communications, Inc., Cisco WebEx LLC, and Cisco Systems, Inc. (collectively, “Cisco”), in the U.S. District Court for the Western District of Texas (the “Trial Court”).
District Court for the District of Delaware, alleging that the Company’s ManyCam software has infringed U.S. Patent Nos. 8,830,293 and 8,941,708 and seeking damages and injunctive relief. The Company intends to vigorously defend itself against these claims.
District Court for the District of Delaware, alleging that the Company’s ManyCam software has infringed U.S. Patent Nos. 8,830,293 and 8,941,708 and seeking damages and injunctive relief. The Company intends to vigorously defend itself against these claims. In October 2025, the Company filed an inter partes review (“IPR”) with the Patent Review Board to invalidate Cisco Patents 8,830,293 and 8,941,708.
Added
In response to the Final Judgment, Cisco filed a motion for Judgment as a Matter of Law (“JMOL”) with the Trial Court. On August 27, 2025, the Trial Court denied Cisco’s JMOL as to validity and infringement. However, the Trial Court granted Cisco’s motion for a new trial with respect to damages.
Added
On October 29, 2025, the Trial Court ordered a motions hearing set for November 12, 2025 to consider the Company’s motion for reconsideration; however, on November 11, 2025, the Trial Court denied the Company’s motion for reconsideration. Cisco also appealed the Trial Court judgment of validity and infringement (the “Appeal”) to the U.S.
Added
Court of Appeals for the Federal Circuit (the “Appeals Court”). Each party is expected to complete and submit its briefs with respect to the Appeal by March 31, 2026.
Added
Upon submission of such briefs, the Appeals Court will then decide whether the parties will appear to argue the Appeal or to render a decision on the appeal based on the briefs submitted by each party.
Added
On February 24, 2026, the Patent Review Board denied the IPR with respect to Cisco Patent 8,941,708. The Patent Review Board has not yet rendered a decision on the validity of Cisco Patent 8,830,293.
Added
MINE SAFETY DISCLOSURES Not applicable. 17 PART II
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
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Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
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2024 filing
2025 filing
Biggest changeIssuer Purchases of Equity Securities The were no repurchases of our common stock during the three months ended December 31, 2024.
Biggest changeIssuer Purchases of Equity Securities On May 8, 2025, we announced that our Board of Directors approved a stock repurchase plan for up to $400,000 of our outstanding common stock, which plan expires on the one-year anniversary of such date. There were no repurchases of common stock during the three months ended December 31, 2025. ITEM 6. [Reserved]
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on Nasdaq under the symbol “IPM.” Holders As of March 14, 2025, there were approximately 49 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Capital Market under the symbol “IPM.” Holders As of March 13, 2026, there were approximately 46 holders of record of our common stock.
This does not reflect the number of persons or entities who held stock in nominee or street name through various brokerage firms. Recent Sales of Unregistered Securities There were no sales of unregistered securities during the year ended December 31, 2024 that were not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
We currently expect to retain any future earnings to fund our operations and the expansion of our business. Recent Sales of Unregistered Securities There were no sales of unregistered securities during the year ended December 31, 2025 that were not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
Added
This does not reflect the number of persons or entities who held stock in nominee or street name through various brokerage firms. Dividends We have never declared or paid any cash dividends on our common stock, and we do not intend to pay cash dividends in the foreseeable future.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
53 edited+82 added−65 removed29 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
53 edited+82 added−65 removed29 unchanged
2024 filing
2025 filing
Biggest changePre-Transaction Operational Highlights Operational highlights during the year ended December 31, 2024: ● after over 18 months, we identified a business in a complimentary industry, signed definitive documents to acquire a business approximately three times our revenue size, divested from our video-based businesses and, subsequent to year end, closed on these transformative transactions; ● revenue from continuing operations increased by 14.2% to approximately $1.1 million compared to $1.0 million for the year ended December 31, 2023, as sales from ManyCam increased; ● net loss increased by 689.5% to $8.4 million for the year ended December 31, 2024, compared to net loss of $1.1 million for the year ended December 31, 2023, which increase included a one-time non-cash charge of $3.8 million of as a result of the impairment loss in connection with the Divestiture, as well as one time legal and accounting expenses of $1.8 million incurred in connection with the Acquisition; ● net loss from continuing operations increased by 58.9% to a net loss of $4.3 million for the year ended December 31, 2024, compared to net loss of $2.7 million for the year ended December 31, 2023; and ● compared to the prior year period, cash flows used in operations increased by $1.9 million to $3.0 million for the year ended December 31, 2024, as decreases in cost of revenue and marketing expense were offset by increased professional fees in connection with the Transactions. 2025 Business Objectives For the near term, our business objectives following the Transactions include: ● continuing the integration of our comprehensive range of IT-related solutions; ● incorporating ManyCam as an offering for our new customers and seek to optimize our cross-selling efforts with our other technology solutions; ● continuing to explore strategic opportunities, including, but not limited to, potential mergers or acquisitions of other assets or entities that are synergistic to our businesses; and ● continuing to defend our intellectual property. 25 Revenue Generation Following the Transactions Following the Transactions, we now generate revenue from our five core areas as described below: Managed IT Security Services Customers pay for our managed IT security services on a subscription or contract-based model.
Biggest changeAdjusted EBITDA for the year ended December 31, 2025 was negative $1.1 million compared to negative $4.4 million for the year ended December 31, 2024; ● cash provided by operations was $0.1 million for the three months ended December 31, 2025 compared to cash used in continuing operations of $1.5 million for the three months ended December 31, 2024; ● cash provided by operations was $1.1 million for the year ended December 31, 2025 compared to cash used in operations of $3.0 million for the year ended December 31, 2024; and ● at December 31, 2025, we had $8.4 million of cash and cash equivalents, including $1.0 million of restricted cash, on our balance sheet and no long-term debt. 2026 Business Objectives For the near term, our business objectives following the Transactions include: ● continuing the integration of our comprehensive range of IT-related solutions; ● incorporating ManyCam as an offering for our new customers and seek to optimize our cross-selling efforts with our other technology solutions; ● continuing to explore strategic opportunities, including, but not limited to, potential mergers or acquisitions of other assets or entities that are synergistic to our businesses; and ● continuing to defend our intellectual property. 23 Sources of Revenue Our main sources of revenue are described below.
When we provide a combination of hardware and software products with the provision of services, we separately identify our performance obligations under the contract and the hardware and/or software products or services that will be provided.
When we provide a combination of hardware and software products with the provision of services, we will separately identify our performance obligations under the contract and the hardware and/or software products or services that will be provided.
Following the closing of the Acquisition (the “Acquisition Closing”), we changed our name from “Paltalk, Inc.” to “Intelligent Protection Management Corp.” The aggregate consideration we delivered to Newtek at the Acquisition Closing consisted of (i) $4,000,000 in cash (as adjusted pursuant to the Acquisition Agreement, the “Acquisition Closing Cash Consideration”) and (ii) 4,000,000 shares of our Series A Non-Voting Common Equivalent Stock (the “Series A Preferred Stock” and such shares issued at the Acquisition Closing, the “Acquisition Closing Stock Consideration” and together with the Acquisition Closing Cash Consideration, the “Acquisition Closing Consideration”).
Following the closing of the Acquisition (the “Acquisition Closing”), we changed our name from “Paltalk, Inc.” to “Intelligent Protection Management Corp.” 20 The aggregate consideration we delivered to Newtek at the Acquisition Closing consisted of (i) $4,000,000 in cash (as adjusted pursuant to the Acquisition Agreement, the “Acquisition Closing Cash Consideration”) and (ii) 4,000,000 shares of our Series A Non-Voting Common Equivalent Stock (the “Series A Preferred Stock” and such shares issued at the Acquisition Closing, the “Acquisition Closing Stock Consideration” and together with the Acquisition Closing Cash Consideration, the “Acquisition Closing Consideration”).
On October 8, 2024, an order granting a motion for final judgment (the “Final Judgment”) was entered into in the Court in connection with the Lawsuit. The Final Judgment was entered in our favor in the amount of the Award and started the time for filing any post-trial motions or appeal.
On October 8, 2024, an order granting a motion for final judgment (the “Final Judgment”) was entered into in the Trial Court in connection with the Lawsuit in our favor of the Company in the amount of the Award and started the time for filing any post-trial motions or appeal.
The total transaction price for an arrangement with multiple performance obligations is allocated at contract inception to each performance obligation in proportion to the stand-alone selling price of the hardware or software. The selling price is the price at which we would sell a promised good or service separately to a customer.
The total transaction price for an arrangement with multiple performance obligations is typically allocated at contract inception to each performance obligation in proportion to the stand-alone selling price of the hardware or software. The selling price is the price at which we would sell a promised good or service separately to a customer.
We can either: (i) obtain software and hardware products on behalf of our customers, in which case our vendors drop ship the products to our end customer, or (ii) obtain hardware or software on behalf of our customers and perform additional configuration and/or add additional inputs to the products before the products are shipped to our customer.
We can either: (i) obtain software and hardware products on behalf of our customers, in which case our vendors drop ship the products to our end customers, or (ii) obtain hardware or software on behalf of our customers and perform additional configuration and/or add additional inputs to the products before the products are shipped to our customers.
Secure Private Cloud Hosting Our secure private cloud hosting offerings include a digital infrastructure which consists of dedicated and fully isolated cloud environments designed to deliver security, control and compliance for the business-critical applications and client data.
Secure Private Cloud Hosting Our secure private cloud hosting offerings include a digital infrastructure which consists of dedicated and fully isolated cloud environments designed to deliver security, control and compliance for business-critical applications and client data.
The ManyCam software provides multiple camera feeds, backgrounds and effects while also enabling users to share presentations, spreadsheets and documents. We anticipate integrating ManyCam as an offering for our new customers and seek to optimize our cross-selling efforts of ManyCam with our other technology solutions.
The ManyCam software provides multiple camera feeds, backgrounds and effects while also enabling users to share presentations, spreadsheets and documents. We cross sell ManyCam as an offering for our customers and seek to optimize our cross-selling efforts of ManyCam with our other technology solutions.
We operate a secure private cloud from private suites in completely isolated areas that are leased within two Tier 3 data center facilities located in Phoenix, Arizona, and Edison, New Jersey (the “Data Centers”), pursuant to license agreements that extend until 2027 and 2026, respectively.
We operate a secure private cloud from private suites in completely isolated areas that are leased within two Tier 3 data center facilities located in Phoenix, Arizona, and Edison, New Jersey (the “Data Centers”), pursuant to certain license agreements.
Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. 29 Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income and our other GAAP results.
(the “Cisco ManyCam Litigation”); and net loss from discontinued operations. Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other GAAP results.
Our ManyCam Software Product Following the Transactions, we continue to support our ManyCam software, which is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools.
We also offer and support our ManyCam software, which is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools.
Adjusted EBITDA is defined as net (loss) income adjusted to exclude stock-based compensation expense, depreciation and amortization expenses, impairment loss in connection with the Divestiture, interest income, net, other (income) expense, net, and income tax (benefit) expense.
Adjusted EBITDA is defined as net income (loss) adjusted to exclude interest (income) expense, net, other (income) expense, net, income tax (benefit) expense, depreciation and amortization expense, stock-based compensation expense, net loss from discontinued operations, impairment loss in connection with the Divestiture and litigation expenses relating to the Cisco ManyCam Litigation.
General and administrative expense General and administrative expense consists primarily of compensation (including non-cash stock-based compensation) and other employee-related costs for personnel engaged in executive management, finance, legal, tax and human resources and facilities costs and fees for other professional services and cost of insurance. General and administrative expense also includes amortization of intangible assets.
General and administrative expense General and administrative expense consists primarily of compensation (including non-cash stock-based compensation) and other employee-related costs for personnel engaged in executive management, finance, legal, tax and human resources and facilities costs and fees for other professional services and cost of insurance. 25 Depreciation and amortization expense Depreciation and amortization expenses consists primarily of amortization of intangible assets as well as depreciation on property and equipment.
We alleged that certain of Cisco’s products infringed U.S. Patent No. 6,683,858, and that we were entitled to damages. On August 29, 2024, the jury awarded us $65.7 million (the “Award”) in a jury verdict in connection with the Lawsuit.
Patent No. 6,683,858, and that we were entitled to damages. 21 On August 29, 2024, the jury awarded us $65.7 million (the “Award”) in a jury verdict in connection with the Lawsuit.
As of January 2, 2025, we provide a comprehensive range of IT-related services, including dedicated server hosting, cloud hosting, data storage, managed security, backup and disaster recovery, and other related services including consulting and implementing technology solutions for large enterprise and commercial clients across the United States as well as small-and-medium sized businesses.
Overview We provide a comprehensive range of IT-related services, including managed IT security services, secure private cloud hosting, managed backup and disaster recovery, professional services, procurement services, web hosting, and other related services including consulting and implementing technology solutions for large enterprise and commercial clients across the United States as well as small-and-medium sized businesses.
Professional Services Our professional services include the design and implementation of a wide range of IT products and services, such as cybersecurity, software planning, IT infrastructure, data center design and configuration, designing and implementing on-premises, hybrid or cloud computing solutions, website development, developing or integrating systems and software and IT cost management. 22 Procurement Services We offer two types of procurement services to our customers.
Professional Services Our professional services include the design and implementation of a wide range of IT products and services, such as cybersecurity, software planning, IT infrastructure, data center design and configuration, hybrid or cloud computing solutions, website development, developing or integrating systems and software, and IT cost management.
Costs and Expenses Cost of revenue Cost of revenue consists primarily of compensation (including stock-based compensation) and other employee-related costs, which prior to the Transactions, consisted of costs for personnel engaged in data center and customer care functions, credit card processing fees, hosting fees, and data center rent and bandwidth costs.
Costs and Expenses Cost of revenue Cost of revenue consists primarily of compensation and other employee-related costs for personnel engaged in data center and customer care functions, credit card processing fees, hosting fees, data center rent, bandwidth costs and, in the case of procurement, revenue the cost of the hardware and/or subscriptions.
As a result of the Transactions, we are no longer engaged in the business of providing video-based, live streaming, virtual camera and telecommunications software to consumers, as and to the extent such businesses were previously conducted by us and our subsidiaries. 23 Recent Developments The Acquisition On January 2, 2025 (the “Closing Date”), we completed the acquisition of Newtek Technology Solutions, Inc., a New York corporation (“NTS”), pursuant to that certain Agreement and Plan of Merger (the “Acquisition Agreement”), by and among us, PALT Merger Sub 1, Inc., a New York corporation and our direct and wholly owned subsidiary (“First Merger Sub”), PALT Merger Sub 2, LLC, a Delaware limited liability company and our direct and wholly owned subsidiary (“Second Merger Sub”), NTS and NewtekOne, Inc., a Maryland corporation and the sole stockholder of NTS (“Newtek”).
Recent Developments The Acquisition On January 2, 2025 (the “Closing Date”), we completed the acquisition of Newtek Technology Solutions, Inc., a New York corporation (“NTS”), pursuant to that certain Agreement and Plan of Merger (the “Acquisition Agreement”), by and among us, PALT Merger Sub 1, Inc., a New York corporation and our direct and wholly owned subsidiary (“First Merger Sub”), PALT Merger Sub 2, LLC, a Delaware limited liability company and our direct and wholly owned subsidiary (“Second Merger Sub”), NTS and NewtekOne, Inc., a Maryland corporation and the sole stockholder of NTS (“Newtek”).
As discussed below, following the Transactions, we continue to support our ManyCam software, which is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools.
Our ManyCam Software Product In addition to our IT and cloud-based solutions, we offer and support our ManyCam software, which is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools.
Pursuant to the Acquisition Agreement, if the issuance of the Acquisition Earn-Out Stock Consideration would cause Newtek’s “total equity” (as calculated under the Bank Holding Company Act of 1956, as amended, and as implemented and interpreted by the Board of Governors of the Federal Reserve System) in us to exceed one-third of our total equity (the “Total Equity Cap”), then the number of shares of Series A Preferred Stock issuable as Acquisition Earn-Out Stock Consideration will be adjusted so that we will issue to Newtek the maximum number of shares of Series A Preferred Stock that would not cause Newtek’s total equity to exceed the Total Equity Cap, with a corresponding increase to the Acquisition Earn-Out Cash Consideration.
Pursuant to the Acquisition Agreement, to the extent that all or a portion of the Acquisition Earn-Out Amount is paid in shares of Series A Preferred Stock, the number of shares of Series A Preferred Stock to be issued to Newtek will be calculated based on the average of the daily volume weighted average prices of our common stock during each trading day during a 60 calendar-day period ending on December 31, 2026; provided, that in no event shall such price be less than $1.00. 30 Pursuant to the Acquisition Agreement, if the issuance of the Acquisition Earn-Out Stock Consideration would cause Newtek’s “total equity” (as calculated under the Bank Holding Company Act of 1956, as amended, and as implemented and interpreted by the Board of Governors of the Federal Reserve System) in us to exceed one-third of our total equity (the “Total Equity Cap”), then the number of shares of Series A Preferred Stock issuable as Acquisition Earn-Out Stock Consideration will be adjusted so that we will issue to Newtek the maximum number of shares of Series A Preferred Stock that would not cause Newtek’s total equity to exceed the Total Equity Cap, with a corresponding increase to the Acquisition Earn-Out Cash Consideration.
Prior to the Transactions, cost of revenue also included compensation and other employee-related costs for technical personnel, consultants and subcontracting costs relating to technology service revenue.
Cost of revenue also includes compensation and other employee-related costs for technical personnel, consultants and subcontracting costs.
Limitations of Adjusted EBITDA Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this performance measure in isolation from or as a substitute for analysis of our results as reported under GAAP.
We believe that Adjusted EBITDA is useful to investors and others to understand and evaluate our operating results, and it allows for a more meaningful comparison between our performance and that of competitors. 26 Limitations of Adjusted EBITDA Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this performance measure in isolation from or as a substitute for analysis of our results as reported under GAAP.
We have an over 20-year history of technology innovation and hold eight patents. Our IT and Cloud-Based Solutions We sell and provide a range of services across five core areas, each as further described below: managed IT security services, professional services, procurement services, secure private cloud hosting, managed backup and disaster recovery and web hosting.
Our IT and Cloud-Based Solutions We sell and provide a range of services across six core areas, each as further described below: (i) managed IT security services, (ii) secure private cloud hosting, (iii) managed backup and disaster recovery, (iv) professional services, (v) procurement services and (vi) web hosting. 1.
Rabsatt was also appointed to serve on the Strategic Transactions Committee of the Board. 24 Patent Litigation On July 23, 2021, Paltalk Holdings filed a patent infringement lawsuit (the “Lawsuit”) against WebEx Communications, Inc., Cisco WebEx LLC, and Cisco Systems, Inc. (collectively, “Cisco”), in the U.S. District Court for the Western District of Texas (the “Court”).
Patent Litigation On July 23, 2021, Paltalk Holdings filed a patent infringement lawsuit (the “Lawsuit”) against WebEx Communications, Inc., Cisco WebEx LLC, and Cisco Systems, Inc. (collectively, “Cisco”), in the U.S. District Court for the Western District of Texas (the “Trial Court”). We alleged that certain of Cisco’s products infringed U.S.
Contract duration is typically between 1-4 years, although the term may vary based on the customer’s needs. Web hosting services customers pay a monthly fee and there are typically no upfront costs associated with web hosting services. Customers are invoiced and revenue is recognized on a monthly basis.
The duration of such contracts is typically between one and four years, although the term may vary based on the needs of each particular customer. Customers of our web hosting services are invoiced on a monthly basis and pay a monthly fee, with revenue recognized on a monthly basis.
Some of these limitations are that Adjusted EBITDA does not reflect: cash capital expenditures for assets underlying depreciation and amortization expense that may need to be replaced or for new capital expenditures; net loss from discontinued operations; interest income, net; other expense, net; income tax expense from continuing operations; our working capital requirements; the impairment loss on digital tokens; the potentially dilutive impact of stock-based compensation; and the provision for income taxes.
Some of these limitations are that Adjusted EBITDA does not reflect, among other things: cash capital expenditures for assets underlying depreciation and amortization expense that may need to be replaced or for new capital expenditures; interest income, net; other expense, net; the potentially dilutive impact of stock-based compensation; the provision for income taxes; litigation expenses incurred in connection with our patent defense against Cisco Systems, Inc. and Cisco Technology, Inc.
The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the accompanying notes thereto included in “Item 8. Financial Statements and Supplementary Data.” Except where expressly provided, all information relates to the Company prior to the Transactions (defined below).
The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the accompanying notes thereto included in “Item 8.
Non-Operating Income The following table presents the components of non-operating income for the years ended December 31, 2024 and 2023, the decrease between those periods, the percentage decrease between those periods, and the percentage of total revenue that each represented for those periods: Years Ended December 31, $ % % of Revenue Years Ended December 31, 2024 2023 Decrease Decrease 2024 2023 Interest income, net $ 569,016 $ 639,611 $ (70,595 ) (11.0 )% 51.8 % 66.4 % Other income, net 146,269 343,045 (196,776 ) (57.4 )% 13.3 % 35.7 % Total non-operating income $ 715,285 $ 982,656 $ (267,371 ) (27.2 )% 65.1 % 102.1 % Non-operating income for the year ended December 31, 2024 was $715,285, a decrease of $267,371, or 27.2%, compared to non-operating income of $982,656 for the year ended December 31, 2023.
Non-Operating Income The following table presents the components of non-operating income for the year ended December 31, 2025 and the year ended December 31, 2024, the decrease between those periods, the percentage decrease between those periods and the percentage of total revenue that each represented for those periods: % of Revenue Year Ended Year Ended December 31, $ % December 31, 2025 2024 (Decrease) (Decrease) 2025 2024 Interest income, net $ 340,831 $ 569,016 $ (228,185 ) (40.1 )% 1.4 % 51.8 % Other income, net 95,013 146,269 (51,256 ) (35.0 )% 0.4 % 13.3 % Total non-operating income $ 435,844 $ 715,285 $ (279,441 ) (39.1 )% 1.8 % 65.1 % Non-operating income for the year ended December 31, 2025 was $435,844, a decrease of $279,441, or 39.1%, as compared to non-operating income of $715,285 for the year ended December 31, 2025.
Our secure private cloud hosting solutions are backed by 24/7 support from our expert team, with the goal of delivering secure, flexible and resilient infrastructure tailored to each client’s unique business needs. In the future, we plan to make arrangements with third parties to incorporate AI features into our secure private cloud offerings.
We believe our secure private cloud hosting provides our clients with strong availability, data integrity and reliable performance, while meeting stringent compliance requirements. Our secure private cloud hosting solutions are backed by 24/7 support from our expert team, with the goal of delivering secure, flexible and resilient infrastructure tailored to each client’s unique business needs.
Our secure private cloud offerings typically are one performance obligation where we are providing the cloud storage to the customer and customers pay a monthly fixed fee for the service. Managed Backup and Disaster Recovery Pricing for our managed backup and disaster recovery solutions is based upon the customer contract and depends on the amount of backup storage needed.
Managed Backup and Disaster Recovery Pricing for our managed backup and disaster recovery solutions is based upon the customer contract and depends on the amount of backup storage needed. Customers are typically charged set rates per the contract and are charged monthly based on usage.
Off-Balance Sheet Arrangements As of December 31, 2024, we did not have any off-balance sheet arrangements. Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes.
Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment.
Sales and marketing expense Prior to the Transactions, sales and marketing expense consisted primarily of advertising expenditures and compensation (including stock-based compensation) and other employee-related costs for personnel and consultants engaged in sales and sales support functions.
Sales marketing and product development expense Sales marketing and product development expense consists primarily of (i) advertising expenditures and compensation (including stock-based compensation) and other employee-related costs for personnel and consultants engaged in sales and sales support marketing and development functions and (ii) development of the technology of our applications, and consultant-related costs that are not capitalized for personnel engaged in the design, testing and enhancement of service offerings.
We estimate the price based on observable inputs, including direct labor hours and allocatable costs, or use observable stand-alone prices when they are available. Our professional services include the design and implementation of a wide range of IT products and services.
We estimate the price based on observable inputs, including direct labor hours and allocable costs, or use observable stand-alone prices when they are available. Web Hosting Each of our customers has their own contract and payment terms with respect to our web hosting services.
The minimum Acceleration Payment for the sale of “Paltalk,” “Camfrog” and “Vumber” is $1,650,000, $450,000 and $300,000, respectively, and the Acceleration Payments payable to us are capped at $5,000,000 in the aggregate. 33 Cash Flow Analysis The components of cash flows information related to discontinued operations have not been segregated in the table below.
The minimum Acceleration Payment for the sale of “Paltalk,” “Camfrog” and “Vumber” is $1,650,000, $450,000 and $300,000, respectively, and the Acceleration Payments payable to us are capped at $5,000,000 in the aggregate. The amount earned in Earn Out Period 1 was $31,263 and is included in other income in the consolidated statement of operations.
We leverage state-of-the-art security measures, including data encryption, network segmentation, advanced firewalls, multi-factor authentication and continuous monitoring to safeguard against unauthorized access and cyber threats. We believe our secure private cloud hosting provides our clients with strong availability, data integrity and reliable performance, while meeting stringent compliance requirements.
Additionally, we incorporate a redundant, carrier-neutral network design for communications paths, along with multiple hosting locations for our services, which improve the availability and resilience of our cloud services. We leverage state-of-the-art security measures, including data encryption, network segmentation, advanced firewalls, multi-factor authentication and continuous monitoring to safeguard against unauthorized access and cyber threats.
Sales and marketing expense Our sales and marketing expense for the year ended December 31, 2024 decreased by $30,233, or 32.9%, as compared to the year ended December 31, 2023.
Sales marketing and product development expense Our sales marketing and product development expense for the year ended December 31, 2025 increased by 2,976,646, or 1,073.7%, as compared to the year ended December 31, 2024.
The increase in subscription revenue was driven by increased revenue from ManyCam for the year ended December 31, 2024 compared to the year ended December 31, 2023. Costs and Expenses Total costs and expenses for the year ended December 31, 2024 increased by $1,560,186, or 33.5%, as compared to the year ended December 31, 2023.
Our subscription revenue for the year ended December 31, 2025 relates to the sales from our ManyCam software, which increased by $5,075, or 0.5%, as compared to the year ended December 31, 2024. The increase in subscription revenue was primarily driven by an increase in new subscribers to our ManyCam software.
Financing Activities Net cash provided by financing activities was $39,772 for the year ended December 31, 2024, compared to net cash used in financing activities of $7,213 for the year ended December 31, 2023.
Operating Activities Net cash provided by operating activities was $1,076,724 for the year ended December 31, 2025, as compared to net cash used in operating activities from continuing operations of $2,661,653 for the year ended December 31, 2024.
We utilize advanced backup technologies with automated, regular data backups, off-site replication and secure storage to prevent data corruption or loss. Web Hosting Our web hosting services consist of several advanced security measures, including Secure Sockets Layer and Transport Layer Security (“SSL/TLS”) encryption, firewalls, distributed denial-of-service (“DDoS”) protection, malware scanning, and secure server configurations.
For each type of procurement service, our customers have their own negotiated contract and payment terms. 6. Web Hosting Our web hosting services consist of several advanced security measures, including Secure Sockets Layer and Transport Layer Security (“SSL/TLS”) encryption, firewalls, distributed denial-of-service (“DDoS”) protection, malware scanning, and secure server configurations.
Customers typically pay a recurring fee, which is generally based on service level agreements that define the specific services and performance metrics. Professional Services Customers are invoiced for our professional services either based on a time and materials basis or on a straight-line basis for all fixed fee arrangements.
Managed IT Security Services Customers of our managed IT security services typically pay a recurring fee, often based on service-level agreements that define the specific services and performance metrics.
Risk Factors” in this Annual Report on Form 10-K (the “Annual Report on Form 10-K”). Overview Prior to the completion of the Transactions, we operated a network of consumer applications. Our product portfolio included Paltalk, Camfrog and Tinychat, which together hosted a large collection of video-based communities.
We have an over 20-year history of technology innovation and hold eight patents. 18 Prior to the completion of the Transactions, we operated a network of consumer applications. Our product portfolio included Paltalk, Camfrog and Tinychat, which together hosted a large collection of video-based communities. Our other products included Vumber, a telecommunications service provider.
Year Ended December 31, 2024 2023 Net cash used in operating activities $ (3,019,287 ) $ (1,079,671 ) Net loss $ (8,426,209 ) $ (1,067,335 ) Adjusted EBITDA $ (4,431,852 ) $ (1,012,916 ) Adjusted EBITDA as percentage of total revenue (48.8 )% (9.2 )% Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure, and includes results from continuing and discontinued operations.
Year Ended December 31, 2025 2024 Net cash provided by (used in) operating activities – continuing operations $ 1,076,724 $ (2,661,653 ) Operating loss from continuing operations $ (4,719,179 ) $ (5,121,549 ) Loss from continuing operations as a percentage of total revenues (20.0 )% (466.3 )% Net loss from continuing operations $ (1,956,536 ) $ (4,268,675 ) Net loss from continuing operations as a percentage of total revenues (8.3 )% (388.7 )% Net loss $ (1,956,536 ) $ (8,426,209 ) Adjusted EBITDA $ (1,116,037 ) $ (4,431,852 ) Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure.
Virtual gift revenue was recognized upon the users’ utilization of the virtual gift and included in subscription revenue. The unearned portion of virtual gifts revenue is presented as deferred revenue in the accompanying consolidated balance sheets. Advertising Revenue We generated a portion of our revenue through advertisements on our video platforms.
The unearned portion of subscription revenue is presented as deferred revenue in the accompanying consolidated balance sheets.
Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.
The Company makes significant estimates and uses judgement related to assessing the goodwill valuation and recoverability of intangible assets. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.
Advertising and promotional spend included online marketing, including fees paid to search engines, and offline marketing, which primarily consists of partner-related payments to those who direct traffic to our brands. 28 Product development expense Prior to the Transactions, product development expense, which related to the development of technology of our applications, consisted primarily of compensation (including stock-based compensation) and other employee-related and consultant-related costs that are not capitalized for personnel engaged in the design, testing and enhancement of service offerings as well as amortization of capitalized website development costs.
Advertising and promotional spend includes online marketing, including fees paid to search engines and offline marketing, which primarily consists of partner-related payments to those who direct traffic to our brands.
Liquidity and Capital Resources Currently, our primary source of liquidity is cash on hand and cash flows from continuing operations, and we believe that our cash and cash equivalents balance and our expected cash flow from operations will be sufficient to meet all of our financial obligations for the next 12 months.
As of the date of this report, no amounts were outstanding under the Facility. We believe that our cash and cash equivalents balance, our cash available through the Facility and our expected cash flows from operations will be sufficient to meet all of our financial obligations for one year from the date these financial statements are issued.
The decrease in sales and marketing expense for the year ended December 31, 2024 was primarily due to a decrease of approximately $32,982 in marketing user acquisition expenses compared to the prior year. 31 Product development expense Our product development expense for the year ended December 31, 2024 increased by $5,306, or 2.5%, as compared to the year ended December 31, 2023.
As a result of the Transactions, headcount on our sales team increased from zero in the prior year period to approximately 15 people in the current period, and their associated salary costs are included in sales marketing and product development expense for the year ended December 31, 2025. 28 General and administrative expense Our general and administrative expense for the year ended December 31, 2025 increased by $5,687,527, or 117.1%, as compared to the year ended December 31, 2024.
Key Metrics Our management relies on certain non-GAAP and/or unaudited performance indicators to manage and evaluate our business. The key performance indicators set forth below helped us evaluate growth trends, establish budgets, measure the effectiveness of our advertising and marketing efforts and assess operational efficiencies.
The non-GAAP financial measures set forth below help us evaluate growth trends, establish budgets, measure the effectiveness of our advertising and marketing efforts and assess operational efficiencies. Adjusted EBITDA is discussed below. We also discuss “Devices under Management ” and net cash provided by operating activities under the “ Liquidity and Capital Resources ” section below.
Because we are no longer engaged in the business of providing access to video-based live streaming, virtual camera and telecommunications software to consumers following the Transactions, we will not generate subscription revenue or advertising revenue related to the Transferred Assets in the future. We also generated revenue from subscriptions for our ManyCam software product, which is presented as continuing operations.
As a result of the Transactions, we are no longer engaged in the business of providing video-based, live streaming, virtual camera and telecommunications software to consumers, as and to the extent such businesses were previously conducted by us and our subsidiaries.
Net cash used in investing activities for the year ended December 31, 2023 was related to payment of contingent consideration in connection with our acquisition of ManyCam in 2022.
The increase in the amount of cash provided by operations for the year ended December 31, 2025 was primarily attributed to the change in the business activities of the Company following the Transactions compared to the year ended December 31, 2024. 31 Investing Activities Net cash used in investing activities for the year ended December 31, 2025 was $4,280,149 and related to the cash consideration paid by the Company to Newtek in connection with the Acquisition as well as the acquisition of fixed assets.
As of December 31, 2024, we had approximately $10.6 million of cash and cash equivalents. Historically, our use of working capital was related to product development resources and an investment in marketing activities in order to maintain and create new services and features in applications for our users.
Our primary use of working capital is related to investment in marketing initiatives to grow the business in order to maintain and create new services and features in applications for our clients and users. In the future, we may seek to grow our business by expending our capital resources to fund strategic acquisitions, investments and partnership opportunities.
The following table presents our costs and expenses for the years ended December 31, 2024 and 2023, the increase or decrease between those periods, the percentage increase or decrease between those periods, and the percentage of total revenue that each represented for those periods: Years Ended $ % % of Revenue Years Ended December 31, Increase Increase December 31, 2024 2023 (Decrease) (Decrease) 2024 2023 Cost of revenue $ 262,888 $ 284,892 $ (22,004 ) (7.7 )% 23.9 % 29.6 % Sales and marketing expense 61,706 91,939 (30,233 ) (32.9 )% 5.6 % 9.6 % Product development expense 215,538 210,232 5,306 2.5 % 19.6 % 21.9 % General and administrative expense 5,679,697 4,072,580 1,607,117 39.5 % 517.1 % 423.3 % Total costs and expenses $ 6,219,829 $ 4,659,643 $ 1,560,186 33.5 % 566.3 % 484.4 % Cost of revenue Our cost of revenue for the year ended December 31, 2024 decreased by $22,004, or 7.7%, as compared to the year ended December 31, 2023.
The following table presents our costs and expenses for the year ended December 31, 2025 and 2024, the increase between those periods, the percentage increase between those periods and the percentage of total revenue that each represented for those periods: % of Revenue Year Ended Year Ended December 31, $ % December 31, 2025 2024 Increase Increase 2025 2024 Cost of revenue $ 11,272,929 $ 262,888 $ 11,010,041 4,188.1 % 47.7 % 23.9 % Sales marketing and product development expense 3,253,890 277,244 2,976,646 1,073.7 % 13.8 % 25.2 % General and administrative expense 10,545,528 4,858,001 5,687,527 117.1 % 44.7 % 442.3 % Depreciation and amortization 2,541,511 821,696 1,719,815 209.3 % 10.8 % 74.8 % Litigation expenses relating to the Cisco ManyCam Litigation 717,780 -- 717,780 -- 3.0 % -- Total costs and expenses $ 28,331,638 $ 6,219,829 $ 22,111,809 355.5 % 119.9 % 566.3 % Cost of revenue Our cost of revenue for the year ended December 31, 2025 increased by $11,010,041, or 4,188.1%, as compared to the year ended December 31, 2024.
Accordingly, the net cash used in operating, investing and the cash provided by and used in financing activities include the results from continuing and discontinued operations: Years Ended December 31, 2024 2023 Consolidated Statements of Cash Flows Data: Net cash used in operating activities $ (3,019,287 ) $ (1,079,671 ) Net cash used in investing activities -- (85,000 ) Net cash provided by (used in) financing activities 39,772 (7,213 ) Net change in cash and cash equivalents $ (2,979,515 ) $ (1,171,884 ) Operating Activities Net cash used in operating activities was $3,019,287 for the year ended December 31, 2024, as compared to net cash used in operating activities of $1,079,671 for the year ended December 31, 2023.
During the year ended December 31, 2024 other income included proceeds from a class action lawsuit against a service provider. 29 Liquidity and Capital Resources Year Ended December 31, 2025 2024 Consolidated Statements of Cash Flows Data: Net cash provided by (used in) operating activities – continuing operations $ 1,076,724 $ (3,019,287 ) Net cash used in operating activities – discontinued operations -- (357,634 ) Net cash used in investing activities (4,280,149 ) -- Net cash provided by financing activities 1,048,952 39,772 Net decrease in cash, cash equivalents and restricted cash $ (2,154,473 ) $ (2,979,515 ) Currently, our primary source of liquidity is cash on hand and cash available through the Facility.
Removed
Our other products included Vumber, which is a telecommunications services provider that enables users to communicate privately by having multiple phone numbers with any area code through which calls can be forwarded to a user’s existing telephone number.
Added
Financial Statements and Supplementary Data.” Except where expressly provided, all information for the fiscal year ended December 31, 2024 relates to the Company prior to the Transactions (defined below) and all information for the fiscal year ended December 31, 2025 relates to the Company following the Transactions.
Removed
Board Appointments Pursuant to the Acquisition Agreement, we agreed to cause one representative nominated by Newtek (the “Newtek Representative”) to be appointed to our Board of Directors (the “Board”) promptly following the closing of the Acquisition. Newtek designated Barry Sloane, who is currently Newtek’s Chairman, Chief Executive Officer and President, as the Newtek Representative.
Added
Risk Factors” in this Annual Report on Form 10-K (the “Annual Report on Form 10-K”).
Removed
Effective as of January 7, 2025, the Board increased the size of the Board from five (5) directors to seven (7) directors and appointed Mr.
Added
Following the Divestiture, we are no longer engaged in the business of providing video-based, live streaming, virtual camera and telecommunications software to consumers, as and to the extent such businesses were previously conducted by us pursuant to the Vumber, Paltalk and Camfrog applications.
Removed
Sloane to the Board, to serve in such capacity until our 2025 annual meeting of stockholders (the “2025 Annual Meeting”) and until his successor is duly elected and qualified or until his earlier death, disqualification, resignation or removal. Mr. Sloane was not appointed to any committee of the Board.
Added
In addition, prior to the Closing Date (defined below), we ceased all operations of our Tinychat service and application.
Removed
In order for the majority of the Board to be comprised of independent directors in accordance with Rule 5605(b) of the listing rules of The Nasdaq Stock Market, LLC and as a result of his expertise in cloud infrastructure and applications and artificial intelligence, the Board also appointed Sidney Rabsatt to the Board, effective as of January 7, 2025. Mr.
Added
Managed IT security services are intended to ensure that a client’s IT infrastructure and services remain operational, secure and optimized. 2. Secure Private Cloud Hosting Our secure private cloud hosting offerings include a digital infrastructure which consists of dedicated and fully isolated cloud environments designed to deliver security, control and compliance for business-critical applications and client data.
Removed
Rabsatt will serve in such capacity until the 2025 Annual Meeting and until his successor is duly elected and qualified or until his earlier death, disqualification, resignation or removal. Mr.
Added
As of December 31, 2025, the terms of the license agreements for the Data Centers located in Arizona and New Jersey extended through 2027 and 2026, respectively. Subsequent to year end, we amended our agreement with the Data Center in Phoenix, Arizona through August 31, 2032.
Removed
We are the principal in these transactions as we control the specified good or service before it is transferred to the customer. Additionally, we are primarily responsible for fulfillment of the order and have pricing discretion. As a result, we recognize revenue from our professional services revenue on a gross basis.
Added
With respect to the Data Center in Edison, New Jersey, we expect to either enter into a lease extension by the end of the lease term or lease private suites at another Tier 3 data center facility.
Removed
Procurement Services Our procurement services include either (i) obtaining software and hardware products on behalf of our customers, in which case our vendors drop ship the products to our end customer, or (ii) obtaining hardware or software on behalf of our customers and performing additional configuration and/or add additional inputs to the products before the products are shipped to our customer.
Added
The Data Centers each conform to The Uptime Institute’s Tier 3 Certification, which is a globally recognized standard for validating critical data center infrastructure. The Tier 3 classification provides us with a degree of confidence that the Data Centers provide the necessary power, cooling, maintenance, and fault tolerance required for secure and reliable operations.
Removed
For both types of procurement services each customer has their own negotiated contract and payment terms. If a customer orders both hardware and additional configurations to those laptops, typically these will both be covered under separate contracts. The services provided are considered distinct as the additional configurations are not required for the hardware purchased to operate effectively.
Added
Our critical infrastructure, hosted within the Data Centers, is designed to meet and exceed Tier 3 standards in all relevant categories. This allows us to deliver secure and compliant services to customers within heavily regulated industries, including financial services and healthcare, and other industries.
Removed
Customers are invoiced, and revenue is recognized, when the hardware purchased is shipped, as control transfers to the customer free on board (“FOB”) shipping point.
Added
We actively engage with third parties to enhance our secure private cloud offerings with artificial intelligence (“AI”) features and benefits. 3.
Removed
We are an agent in these transactions because we (i) do not obtain control over the product as products are drop shipped from their vendors directly to the customer; (ii) have no inventory risk and (iii) have general pricing discretion in our transactions with customers.
Added
We utilize advanced backup technologies with automated, regular data backups, off-site replication and secure storage to prevent data corruption or loss. Our disaster recovery solutions are designed to offer quick restoration of systems and data with minimal downtime, supported by flexible recovery plans tailored to meet customers’ specific needs.
Removed
Our pricing discretion is limited by the going market rate of our services offered by other providers. Based on this assessment, we recognize revenue from procurement services on a net basis. Additionally, certain procurement contracts with customers include promises to transfer multiple products and services to a customer.
Added
With continuous monitoring, end-to-end encryption, and expert support available 24/7, we aim to ensure that our customers’ data is secure, accessible and compliant with industry standards. Pricing for our managed backup and disaster recovery solutions is based upon the customer contract and depends on the amount of backup storage needed.
Removed
Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.
Added
Customers are typically charged set rates per the contract and are charged monthly based on usage. 19 4.
Removed
Secure Private Cloud Hosting When a cloud-based service includes both on-premises software licenses and cloud services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time.
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