Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
On November 10, 2026, Intelligent
Protection Management Corp. issued a press release announcing its financial results for the quarter ended September 30, 2026. The press
release is furnished as Exhibit 99.1.
The information in this Current
Report on Form 8-K (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise
be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation
language in such filing.
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Exhibit 99.1
Intelligent Protection
Management Corp.
Reports Third
Quarter 2026 Financial Results
Infrastructure Demand
Drives Revenue Growth of More Than 75%;
Generated $5.6 million
of Operating Cash Flow;
Company Positioned for Future Recurring Revenue
Expansion
JERICHO, NY / ACCESS Newswire / November 10,
2026 / Intelligent Protection Management Corp. (“IPM,” “we,” “us,” “our” or the “Company”)
(Nasdaq: IPM), a managed technology solutions provider focused on enterprise cybersecurity and cloud infrastructure, today announced its
financial results for the three months and nine months ended September 30, 2026.
Management Discussion
Jason Katz, Chairman and Chief Executive Officer,
said: “Financial results for the third quarter of 2026 reflected exceptional customer demand and continued execution of our growth
strategy, resulting in total revenue increasing more than 75% to approximately $11.0 million compared to the third quarter of 2025. For
the nine months ended September 30, 2026, total revenue increased 36% year-over-year to $23.8 million. Our performance during the quarter
was driven primarily by increased procurement revenue of approximately 271% compared to the prior year period. This core area represented
a larger portion of our overall revenue mix compared to prior periods, as customers accelerated infrastructure investments in cybersecurity,
cloud modernization, data center expansion and artificial intelligence. Additionally, we successfully fulfilled a significant customer
order during the third quarter, further demonstrating our ability to execute on large-scale opportunities and meet customer demand.”
Mr. Katz continued: “Standard
procurement gross margins trend lower than the rest of our business. At the same time, procurement services can provide an entry point
for broader customer relationships. Our professional services help customers plan their technology investments; our procurement services
source the infrastructure; and our managed IT security services, private cloud, and managed backup and disaster recovery services create
opportunities to support those environments over time. Our objective is to convert these opportunities into recurring engagements, recognizing
that conversion is not automatic and depends on customer needs and execution.”
Mr. Katz added: “While it can take time,
we are making progress in expanding our recurring business. Core managed services revenue from non-affiliated customers increased 33%
over the prior-year period. That result supports our focus on deepening customer relationships and diversifying our revenue base. We remain
focused on expanding higher-margin recurring engagements across our service portfolio, while continuing to execute on professional services
and procurement opportunities to deepen customer relationships and increase long-term customer value.”
Mr. Katz concluded: “Our balance sheet remains
strong, providing the financial flexibility necessary to support organic growth initiatives while pursuing strategic opportunities that
enhance our long-term growth profile. During the quarter, we incurred approximately $195,000 of acquisition-related expenses associated
with the recently announced AdTech acquisition. Once completed, we believe the transaction can expand our customer reach and create opportunities
to introduce IPM’s managed IT security services, private cloud, managed backup and disaster recovery, professional services, and
procurement offerings across a larger combined customer base. We remain committed to disciplined capital allocation and creating long-term
shareholder value. We are encouraged by the momentum we are seeing across the business and remain focused on executing our long-term strategy.”
Financial Highlights:
| | |
Three Months Ended
September 30,
(unaudited) | | |
Change | |
| | |
2026 | | |
2025 | | |
$ | | |
% | |
| Total revenues | |
$ | 10,950,145 | | |
$ | 6,238,019 | | |
| 4,712,126 | | |
| 75.5 | % |
| Loss from operations | |
$ | (886,077 | ) | |
$ | (1,435,762 | ) | |
| 549,685 | | |
| 38.3 | % |
| Net loss | |
$ | (779,378 | ) | |
$ | (1,083,070 | ) | |
| 303,692 | | |
| 28.0 | % |
| Net cash provided by (used in) operating activities | |
$ | 5,644,041 | | |
$ | 133,037 | | |
| 5,511,004 | | |
| 4,142.5 | % |
| Adjusted EBITDA (a non-GAAP measure) 1 | |
$ | 159,201 | | |
$ | (260,121 | ) | |
| 419,322 | | |
| 161.2 | % |
| | |
Nine Months Ended
September 30,
(unaudited) | | |
Change | |
| | |
2026 | | |
2025 | | |
$ | | |
% | |
| Total revenues | |
$ | 23,767,438 | | |
$ | 17,478,656 | | |
| 6,288,782 | | |
| 36.0 | % |
| Loss from operations | |
$ | (3,166,630 | ) | |
$ | (3,899,388 | ) | |
| 732,758 | | |
| 18.8 | % |
| Net loss | |
$ | (2,791,090 | ) | |
$ | (1,324,568 | ) | |
| (1,466,522 | ) | |
| (110.7 | )% |
| Net cash provided by operating activities | |
$ | 4,857,311 | | |
$ | 989,142 | | |
| 3,868,169 | | |
| 391.1 | % |
| Adjusted EBITDA (a non-GAAP measure) 1 | |
$ | (535,753 | ) | |
$ | (1,120,667 | ) | |
| 584,914 | | |
| 52.2 | % |
| 1 | Adjusted EBITDA is a non-GAAP financial measure. Please
see the discussion below under the heading “Use of Non-GAAP Financial Measures” and the reconciliation at the end of this release
for additional information. |
Financial Results: Three and Nine Months ended September 30,
2026
For the three months ended September 30, 2026,
total revenue increased by approximately 76% to $11.0 million from $6.2 million for the three months ended September 30, 2025. This increase
was primarily driven by increased procurement revenue related to customer investments in infrastructure, as well as increased professional
services and managed information technology revenue, attributed to both new customers and the expansion of services sold to existing
customers, partially offset by a decrease in subscription revenue. Total revenue by revenue component for the third quarter ended September
30, 2026, was as follows:
| ● | Managed
information technology revenue, which consists of revenue from our managed IT security services,
managed backup and disaster recovery solutions and web hosting, was $3.9 million, an increase
of 1.8% from Q3 2025. |
| ● | Procurement
revenue was $6.3 million, an increase of 271% from Q3 2025. |
| ● | Professional
services revenue was $545,317, an increase of 14.5% from Q3 2025. |
| ● | Subscription
revenue was $243,886, a decrease of 10.4% from Q3 2025. |
Revenue
from NewtekOne, Inc., a related party, was impacted by its ongoing initiatives to reduce information technology spending. We partially
offset this decline in revenue through growth in recurring revenue from customers who are not related parties, including the addition
of new customer relationships and service contracts during the period. Revenue from our core managed information technology services,
which consists of revenue from our managed IT security services and managed backup and disaster recovery solutions, from non-affiliated
customers increased by 33% compared to the prior year period.
| ● | Net
loss for the three months ended September 30, 2026 totaled $0.8 million compared to net loss
of $1.1 million for the three months ended September 30, 2025; |
| ● | Adjusted
EBITDA for the three months ended September 30, 2026 totaled positive $0.2 million compared
to negative $0.3 million for the three months ended September 30, 2025; |
| ● | Cash
provided by operations totaled $5.6 million for the three months ended September 30, 2026
compared to cash provided by operations of $0.1 million for the three months ended September
30, 2025, primarily related to our sourcing of product in connection with the increased procurement
revenue; |
| ● | Deferred
revenue was $4.9 million as of September 30, 2026, which will be recognized as revenue in
future quarters as products and/or services are installed; and |
| ● | At
September 30, 2026, we had $12.5 million of cash and cash equivalents on our balance sheet
and no long-term debt. |
For
the nine months ended September 30, 2026, total revenue increased by 36.0% to $23.8 million from $17.5 million for the comparable nine-month
period in 2025. The increase was primarily driven by increased procurement revenue related to sale of AI-related equipment to customers,
as well as increased managed information technology revenue, attributed to both new customers as well as the expansion of services sold
to existing customers, partially offset by decreases in professional services revenue and subscription revenue. Revenue from our core
managed information technology services from non-affiliated customers increased by 34% compared to the prior year period.
| ● | Managed
information technology revenue, which consists of revenue from our managed IT security services,
managed backup and disaster recovery solutions and web hosting, was $11.6 million, an increase
of 6.7% from the prior year period. |
| ● | Procurement
revenue was $10.0 million, an increase of 157.8% from the prior year period. |
| ● | Professional
services revenue was $1.4 million, a decrease of 26.4% from the prior year period. |
| ● | Subscription
revenue was $747,432, a decrease of 10.2% from the prior year period. |
| ● | Net
loss for the nine months ended September 30, 2026 totaled $2.8 million, compared to net loss
of $1.3 million for the nine months ended September 30, 2025; |
| ● | Adjusted
EBITDA for the nine months ended September 30, 2026 totaled negative $0.5 million, compared
to negative $1.1 million for the nine months ended September 30, 2025; and |
| ● | Cash
provided by operations of $4.9 million for the nine months ended September 30, 2026 compared
to cash provided by operations of $1.0 million for the nine months ended September 30, 2025,
primarily related to payments received in connection with the increased procurement revenue. |
Operational
Highlights:
| ● | Subsequent
to quarter end, in October 2026, the Company entered into a unit purchase agreement with
Advanced Technology Distributors Inc. (“AdTech”), pursuant to which the Company
will acquire AdTech’s information technology, telecommunications, connectivity, managed
services and related infrastructure solutions business for a purchase price of up to $2.7
million, subject to customary adjustments. |
| ● | Launched
IPM GO, Your Always-Available AI Virtual Assistant that is hosted within IPM’s private cloud
infrastructure, enabling clients to deploy, manage and scale web-based engagement solutions
related to customer sales and support interactions. |
| ● | Expanded
our sales organization by adding a dedicated territory focused on the Phoenix metropolitan
area and broader West Coast market, which includes an established customer base and industry
expertise. Management believes this expansion positions us to pursue additional revenue opportunities
and support future growth. |
| ● | Executed
an extension of our existing Phoenix data center colocation license agreement with an industry-leading
data center provider through August 2032. |
| ● | Successfully
achieved SOC 2 Type 1 compliance, a key milestone in our ongoing commitment to safeguarding
customer data and delivering trusted cybersecurity and cloud infrastructure solutions. |
| ● | Repurchased
50,000 shares of common stock during the first quarter of 2026, under our stock repurchase
plan for an aggregate of $83,491. As of September 30, 2026, all shares of common stock available
for repurchase under the stock repurchase plan had been repurchased and such plan had expired. |
Conference
Call Access
The Company will conduct a conference call for
all interested parties on Tuesday, November 10, 2026, at 4:30 p.m. Eastern Time to discuss its financial results and address stockholder
questions submitted in advance of the conference call.
To participate in this call, please dial (888) 506-0062 or (973) 528-0011,
access code: 468469 or listen via a live webcast, which is available in the Investors section of the Company’s website at https://investors.ipm.com/
or https://www.webcaster5.com/Webcast/Page/2856/54663.
A replay of the call will be available by visiting
https://investors.ipm.com/ for the next 90 days or by calling (877) 481-4010 or (919) 882-2331,
replay access code 54663 through Tuesday, November 24, 2026.
If you would like to submit a question, please
send an email with your question to IPM@lythampartners.com prior to the call. IPM will do its best to answer all appropriate questions.
About IPM
Intelligent Protection Management Corp. (Nasdaq:
IPM) is a managed technology solutions provider focused on cybersecurity and cloud infrastructure. IPM provides dedicated server hosting,
cloud hosting, data storage, managed security, backup and disaster recovery, and other related services, including professional services
and implementing technology solutions for enterprise and commercial clients across the United States. IPM’s other products include ManyCam.
IPM has an over 20-year history of technology innovation and holds 8 patents. For more information, please visit: www.ipm.com
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different
from any future results, performance or achievements anticipated in such statements. Forward-looking statements may be identified by words
such as “aim,” “anticipates,” “believes,” “building,” “continue,” “could,”
“drive,” “estimates,” “expects,” “extent,” “focus,” “forecasts,” “goal,”
“guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “position,”
“probable,” “progressing,” “projects,” “prudent,” “seeks,” “should,” “steady,”
“target,” “view,” “will” or “would” or the negative of these words and phrases or similar words
or phrases. Forward-looking statements in this press release may include, but are not limited to, the AdTech acquisition and its expected
terms, timing and closing; the Company’s ability to successfully integrate AdTech’s business and realize the anticipated benefits
of the AdTech acquisition; the anticipated benefits of the Company’s strategic collaboration with MASORI; the expected ability of the
Company’s customers to adopt, implement, and realize efficiencies from AI solutions offered through the relationship; the Company’s ability
to serve as a hosting partner for third-party AI platforms and to deliver such technology to its client base; the Company’s expectations
of future plans, priorities and focus; the Company’s expectations regarding its procurement, professional services and subscriptions businesses
contributing to the Company’s overall results; the Company’s potential growth opportunities; the Company’s plans, objectives, strategies,
expectations, and intentions; and other statements that are not statements of historical fact. The following factors, among others, could
cause actual results to differ materially from those set forth in the forward-looking statements: the Company’s ability to consummate
the AdTech acquisition in a timely manner or at all; the possibility of security vulnerabilities, cyber-attacks and network disruptions,
including breaches of data security and privacy leaks, data loss, and business interruptions; the Company’s ability to operate its
secure private cloud through its data centers; the intense competition in the industry in which the Company operates and its ability
to effectively compete with existing competitors and new market entrants; the impact of supply constraints, including those related
to components of the Company’s procurement services; the Company’s ability to consummate favorable acquisitions and effectively
integrate any companies or businesses that the Company acquires; the impact of adverse economic and market conditions, including
those related to fluctuations in inflation and geopolitical conflicts; the Company’s reliance on a limited number of customers for
its revenues and income; the Company’s ability to attract new customers, retain existing customers and sell additional services to
customers; the Company’s ability to protect its intellectual property rights; and other events outside of the Company’s control.
More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set
forth in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the Company’s most recent Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge
on the SEC’s website at www.sec.gov.
All forward-looking statements speak only as of
the date on which they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect
events or circumstances after the date on which such statement was made, except to the extent required by applicable securities laws.
Investor Contacts:
Joe Dorame, Roger Weiss
Lytham Partners, LLC
602-889-9680
E: ipm@lythampartners.com
INTELLIGENT PROTECTION MANAGEMENT CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
| | |
September 30,
2026 | | |
December 31,
2025 | |
| Assets | |
(unaudited) | | |
| |
| Current assets: | |
| | |
| |
| Cash and cash equivalents | |
$ | 10,514,870 | | |
$ | 5,597,014 | |
| Cash and cash equivalents (on deposit with a related party) | |
| 2,030,182 | | |
| 1,801,300 | |
| Cash and cash equivalents – restricted cash (on deposit with related party) | |
| -- | | |
| 1,035,747 | |
| Accounts receivable, net of allowance of $96,514 and $100,000 as of September 30, 2026 and December 31, 2025, respectively | |
| 1,137,495 | | |
| 1,599,725 | |
| Due from related party | |
| 356,862 | | |
| 75,601 | |
| Prepaid expense and other current assets | |
| 1,949,941 | | |
| 1,363,574 | |
| Total current assets | |
| 15,989,350 | | |
| 11,472,961 | |
| | |
| | | |
| | |
| Property and equipment, net | |
| 857,056 | | |
| 550,628 | |
| Intangible assets, net | |
| 6,631,666 | | |
| 7,718,836 | |
| Goodwill | |
| 4,555,208 | | |
| 4,555,208 | |
| Operating lease right of use assets, net | |
| 3,960,331 | | |
| 1,140,196 | |
| Other assets | |
| 402,071 | | |
| 602,688 | |
| Total assets | |
$ | 32,395,682 | | |
$ | 26,040,517 | |
| | |
| | | |
| | |
| Liabilities and stockholders’ equity | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable | |
$ | 7,071,214 | | |
$ | 1,604,898 | |
| Accrued expenses and other current liabilities | |
| 795,703 | | |
| 1,031,733 | |
| Operating lease liabilities, current portion | |
| 528,188 | | |
| 756,590 | |
| Deferred revenue | |
| 4,928,490 | | |
| 3,878,114 | |
| Due to related party | |
| 55,579 | | |
| 46,450 | |
| Total current liabilities | |
| 13,379,174 | | |
| 7,317,785 | |
| | |
| | | |
| | |
| Operating lease liabilities, non-current portion | |
| 3,527,647 | | |
| 387,906 | |
| Deferred tax liability | |
| 70,340 | | |
| 148,898 | |
| Total liabilities | |
| 16,977,161 | | |
| 7,854,589 | |
| Commitments and contingencies | |
| | | |
| | |
| Stockholders’ equity: | |
| | | |
| | |
| Series A Preferred Stock, $0.001 par value, 9,000,000 shares authorized, 4,000,000 shares issued and outstanding as of September 30, 2026 and December 31, 2025 | |
| 4,000 | | |
| 4,000 | |
| Common stock, $0.001 par value, 50,000,000 shares authorized, 9,878,950 shares issued and 9,035,729 and 9,085,729 shares outstanding as of September 30, 2026 and December 31, 2025, respectively | |
| 9,879 | | |
| 9,879 | |
| Treasury stock, 843,221 and 793,221 shares repurchased as of September 30, 2026 and December 31, 2025, respectively | |
| (1,583,876 | ) | |
| (1,500,385 | ) |
| Additional paid-in capital | |
| 45,046,921 | | |
| 44,939,747 | |
| Accumulated deficit | |
| (28,058,403 | ) | |
| (25,267,313 | ) |
| Total stockholders’ equity | |
| 15,418,521 | | |
| 18,185,928 | |
| Total liabilities and stockholders’ equity | |
$ | 32,395,682 | | |
$ | 26,040,517 | |
INTELLIGENT PROTECTION MANAGEMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | |
Three Months Ended
September 30, | | |
Nine Months Ended
September 30, | |
| | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| Revenue | |
| | |
| | |
| | |
| |
| Managed information technology, includes $1,690,947 and $1,910,957 of related party revenue for the three months ended September 30, 2026 and 2025, respectively, and $5,308,934 and $5,427,357, of related party revenue for the nine months ended September 30, 2026 and 2025, respectively | |
$ | 3,859,198 | | |
$ | 3,791,746 | | |
$ | 11,582,012 | | |
$ | 10,857,333 | |
| Procurement revenue, includes $30,820 and $28,598 of related party revenue for the three months ended September 30, 2026 and 2025, respectively, and $88,721 and $106,479 of related party revenue for the nine months ended September 30, 2026 and 2025, respectively | |
| 6,301,744 | | |
| 1,697,854 | | |
| 10,046,322 | | |
| 3,897,634 | |
| Professional services revenue, includes $38,381 and $38,706 of related party revenue for the three months ended September 30, 2026 and 2025, respectively, and $120,270 and $146,953 of related party revenue for the nine months ended September 30, 2026 and 2025, respectively | |
| 545,317 | | |
| 476,198 | | |
| 1,391,672 | | |
| 1,891,620 | |
| Subscription revenue | |
| 243,886 | | |
| 272,221 | | |
| 747,432 | | |
| 832,069 | |
| Total revenue | |
| 10,950,145 | | |
| 6,238,019 | | |
| 23,767,438 | | |
| 17,478,656 | |
| Costs and expenses | |
| | | |
| | | |
| | | |
| | |
| Costs of revenue | |
| 7,768,277 | | |
| 3,076,333 | | |
| 14,820,058 | | |
| 8,398,445 | |
| Sales, marketing and product development expense | |
| 757,107 | | |
| 844,463 | | |
| 2,302,804 | | |
| 2,449,224 | |
| General and administrative expense | |
| 2,502,631 | | |
| 2,621,260 | | |
| 7,565,347 | | |
| 8,040,958 | |
| Depreciation and amortization | |
| 490,389 | | |
| 624,544 | | |
| 1,443,571 | | |
| 1,982,236 | |
| Litigation expenses relating to the Cisco ManyCam Litigation | |
| 317,818 | | |
| 507,181 | | |
| 802,288 | | |
| 507,181 | |
| Total costs and expenses | |
| 11,836,222 | | |
| 7,673,781 | | |
| 26,934,068 | | |
| 21,378,044 | |
| Loss from operations | |
| (886,077 | ) | |
| (1,435,762 | ) | |
| (3,166,630 | ) | |
| (3,899,388 | ) |
| Interest income, net | |
| 61,869 | | |
| 102,856 | | |
| 181,095 | | |
| 273,176 | |
| Other income | |
| -- | | |
| -- | | |
| 22,000 | | |
| 63,750 | |
| Loss from operations before income tax benefit | |
| (824,208 | ) | |
| (1,332,906 | ) | |
| (2,963,535 | ) | |
| (3,562,462 | ) |
| Income tax benefit | |
| 44,830 | | |
| 249,836 | | |
| 172,445 | | |
| 2,237,894 | |
| Net loss | |
$ | (779,378 | ) | |
$ | (1,083,070 | ) | |
$ | (2,791,090 | ) | |
$ | (1,324,568 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss per share of common stock: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
$ | (0.06 | ) | |
$ | (0.08 | ) | |
$ | (0.21 | ) | |
$ | (0.10 | ) |
| Diluted | |
$ | (0.06 | ) | |
$ | (0.08 | ) | |
$ | (0.21 | ) | |
$ | (0.10 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares of Series A Preferred Stock used in calculating net loss per share of Series A Preferred Stock, basic and diluted | |
| 4,000,000 | | |
| 4,000,000 | | |
| 4,000,000 | | |
| 3,985,348 | |
| Weighted average number of shares of Common Stock used in calculating net loss per share of Common Stock, basic and diluted | |
| 9,035,729 | | |
| 9,108,805 | | |
| 9,047,487 | | |
| 9,182,014 | |
| Basic and diluted net loss per share of Series A Preferred Stock, basic and diluted | |
$ | (0.06 | ) | |
$ | (0.08 | ) | |
$ | (0.21 | ) | |
$ | (0.10 | ) |
| Basic and diluted net loss per share of Common Stock, basic and diluted | |
$ | (0.06 | ) | |
$ | (0.08 | ) | |
$ | (0.21 | ) | |
$ | (0.10 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares of common stock used in calculating net loss per share of common stock: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 13,035,729 | | |
| 13,108,805 | | |
| 13,047,487 | | |
| 13,167,362 | |
| Diluted | |
| 13,035,729 | | |
| 13,108,805 | | |
| 13,047,487 | | |
| 13,167,362 | |
INTELLIGENT PROTECTION MANAGEMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | |
Nine Months Ended
September 30, | |
| | |
2026 | | |
2025 | |
| Cash flows from operating activities: | |
| | |
| |
| Net loss | |
$ | (2,791,090 | ) | |
$ | (1,324,568 | ) |
| | |
| | | |
| | |
| Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities: | |
| | | |
| | |
| Amortization of intangible assets | |
| 1,087,170 | | |
| 1,602,053 | |
| Amortization of operating lease right-of-use assets | |
| 535,067 | | |
| 415,661 | |
| Depreciation on property and equipment | |
| 356,401 | | |
| 380,182 | |
| Deferred taxes | |
| (78,558 | ) | |
| 99,881 | |
| Income tax liability | |
| -- | | |
| (2,321,316 | ) |
| Stock-based compensation | |
| 107,174 | | |
| 289,305 | |
| Change in allowance for credit losses | |
| (3,486 | ) | |
| 3,436 | |
| | |
| | | |
| | |
| Changes in operating assets and liabilities, net of acquired assets and disposition: | |
| | | |
| | |
| Accounts receivable | |
| 184,455 | | |
| 2,136,524 | |
| Operating lease liability | |
| (443,863 | ) | |
| (416,523 | ) |
| Prepaid expense and other current assets | |
| (385,750 | ) | |
| (1,164,283 | ) |
| Employee retention tax credit receivable, net | |
| -- | | |
| 114,212 | |
| Accounts payable, accrued expenses and other current liabilities | |
| 5,239,415 | | |
| 1,682,770 | |
| Deferred revenue | |
| 1,050,376 | | |
| (508,192 | ) |
| Net cash provided by operating activities | |
| 4,857,311 | | |
| 989,142 | |
| | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | |
| Purchase of fixed assets | |
| (662,829 | ) | |
| (280,149 | ) |
| Cash paid for acquisition of NTS | |
| -- | | |
| (4,000,000 | ) |
| Net cash used in investing activities | |
| (662,829 | ) | |
| (4,280,149 | ) |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Purchase of treasury stock | |
| (83,491 | ) | |
| (301,048 | ) |
| Proceeds from sale of Transferred Assets | |
| -- | | |
| 1,350,000 | |
| Net cash (used in) provided by financing activities | |
| (83,491 | ) | |
| 1,048,952 | |
| | |
| | | |
| | |
| Net increase (decrease) in cash and cash equivalents | |
| 4,110,991 | | |
| (2,242,055 | ) |
| Balance of cash, cash equivalents and restricted cash at beginning of period | |
| 8,434,061 | | |
| 10,588,534 | |
| Balance of cash, cash equivalents and restricted cash at end of period | |
| 12,545,052 | | |
| 8,346,479 | |
| Cash and cash equivalents | |
$ | 10,514,870 | | |
$ | 6,148,796 | |
| Cash and cash equivalents (on deposit with related party) | |
$ | 2,030,182 | | |
$ | 1,182,969 | |
| Cash and cash equivalents - restricted cash (on deposit with related party) | |
$ | -- | | |
$ | 1,014,714 | |
| Balance of cash and cash equivalents at end of period | |
$ | 12,545,052 | | |
$ | 8,346,479 | |
| Supplemental non-cash disclosure: | |
| | | |
| | |
| Operating lease extension, right of use asset | |
$ | 3,355,202 | | |
$ | -- | |
| Non-cash portion of consideration for acquisition of NTS (Series A Preferred Stock issuance) | |
$ | -- | | |
$ | 8,200,000 | |
Use of Non-GAAP Financial
Measures
The Company has provided in this release
Adjusted EBITDA, a non-GAAP financial measure, to supplement the consolidated financial statements, which are prepared in accordance
with generally accepted accounting principles in the United States (“GAAP”). 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, litigation expenses relating to the Cisco ManyCam Litigation (as defined below) and acquisition-related
expenses associated with the AdTech Acquisition (as defined below), as each are applicable to the periods presented. Prior to the fiscal quarter ended
September 30, 2026, we did not exclude acquisition-related expenses associated with the AdTech Acquisition in calculating Adjusted
EBITDA. For the nine months ended September 30, 2026, the acquisition-related expenses of $277,844 include $82,819 incurred in the
three months ended June 30, 2026, which amount was not adjusted in the prior quarter as it was not material. However, after
reevaluation, we have determined that presenting Adjusted EBITDA without excluding such costs provides less valuable information
about our core operations. As a result, beginning with the fiscal quarter ended September 30, 2026, acquisition-related expenses
associated with the AdTech Acquisition are excluded from the calculation of Adjusted EBITDA.
Management uses Adjusted
EBITDA internally in analyzing the Company’s financial results to assess operational performance and to determine the Company’s
future capital requirements. The presentation of this financial information is not intended to be considered in isolation or as a substitute
for the financial information prepared in accordance with GAAP. The Company believes that both management and investors benefit from referring
to Adjusted EBITDA in assessing its performance and when planning, forecasting and analyzing future periods. The Company believes Adjusted
EBITDA is useful to investors and others to understand and evaluate the Company’s operating results and it allows for a more meaningful
comparison between the Company’s performance and that of competitors. 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. Some of these limitations are that Adjusted EBITDA does not reflect, among other things: interest income, net; the benefit
or provision for income taxes; other income, net; litigation expenses incurred in connection with our patent defense against Cisco Systems,
Inc. and Cisco Technology, Inc. (the “Cisco ManyCam Litigation”); acquisition-related expenses associated with the Company’s
pending acquisition of the IT and infrastructure solutions business of Advanced Technology Distributors Inc. (the “AdTech Acquisition");
cash capital expenditures for assets underlying depreciation and amortization expense that may need to be replaced or for new capital
expenditures; and the potentially dilutive impact of stock-based compensation. 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 along with other financial performance measures, including total revenues, subscription revenue, deferred
revenue, net income (loss), cash and cash equivalents, restricted cash, net cash used in operating activities and our financial results
presented in accordance with GAAP.
| | |
Three Months Ended | |
| | |
September 30
(unaudited) | |
| | |
2026 | | |
2025 | |
| Reconciliation of net loss to Adjusted EBITDA: | |
| | |
| |
| Net loss | |
$ | (779,378 | ) | |
$ | (1,083,070 | ) |
| Interest income, net | |
| (61,869 | ) | |
| (102,856 | ) |
| Income tax expense (benefit) | |
| (44,830 | ) | |
| (249,836 | ) |
| Litigation expenses relating to the Cisco ManyCam Litigation | |
| 317,818 | | |
| 507,181 | |
| Acquisition-related expenses in connection with AdTech Acquisition(1) | |
| 195,025 | | |
| -- | |
| Depreciation and amortization expense | |
| 490,389 | | |
| 624,544 | |
| Stock-based compensation expense | |
| 42,046 | | |
| 43,916 | |
| Adjusted EBITDA | |
$ | 159,201 | | |
$ | (260,121 | ) |
| | |
Nine Months Ended | |
| | |
September 30,
(unaudited) | |
| | |
2026 | | |
2025 | |
| Reconciliation of net loss to Adjusted EBITDA: | |
| | |
| |
| Net loss | |
$ | (2,791,090 | ) | |
$ | (1,324,568 | ) |
| Interest income, net | |
| (181,095 | ) | |
| (273,176 | ) |
| Income tax expense (benefit) | |
| (172,445 | ) | |
| (2,237,894 | ) |
| Other income, net | |
| (22,000 | ) | |
| (63,750 | ) |
| Litigation expenses relating to the Cisco ManyCam Litigation | |
| 802,288 | | |
| 507,181 | |
| Acquisition-related expenses in connection with AdTech Acquisition(1) | |
| 277,844 | | |
| -- | |
| Depreciation and amortization expense | |
| 1,443,571 | | |
| 1,982,235 | |
| Stock-based compensation expense | |
| 107,174 | | |
| 289,305 | |
| Adjusted EBITDA | |
$ | (535,753 | ) | |
$ | (1,120,667 | ) |
| (1) | Acquisition-related expenses include legal, accounting and
other due diligence costs incurred in connection with the AdTech Acquisition. |
