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 March 17, 2026, Intelligent
Protection Management Corp. (the “Company”) issued a press release announcing its financial results for the
quarter and year ended December 31, 2025. The press release is furnished as Exhibit 99.1.
The information included under
Item 2.02 (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
Fourth Quarter and Full Year 2025 Financial Results
Net Loss improved by 89% in
Q4 compared to prior year period, reports Positive Adjusted EBITDA1 for Q4;
Cash flow positive from operations for the full
year and fourth quarter of 2025
JERICHO, NY / ACCESS Newswire / March
17, 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 year ended December 31, 2025.
Management Discussion
Jason Katz, Chairman and Chief Executive Officer
of IPM, said, ” We completed our first year of operations following the acquisition of Newtek Technology Solutions. During 2025,
we made significant progress in a number of key areas, including revenue growth, expense optimization and risk management. In the fourth
quarter, revenue in our core business, Managed information technology revenue (excluding web hosting), increased sequentially by 7%, net
loss declined by 42%, and Adjusted EBITDA1 was positive. Cash flow from operations was positive for both the quarter and the
full year, and as of December 31, 2025, we had cash and cash equivalents totaling $8.4 million and no long-term debt.”
Mr. Katz concluded, “We are pleased with
the results of our first full year operating as a managed technology solutions provider. We believe we have important differentiators
that set us apart from our industry competitors and have significant competitive advantages over our peers in highly regulated vertical
markets, including legal, healthcare, finance and banking markets. We provide our customers with a high-touch experience with dedicated
technology managers as a single point of contact, as opposed to the majority of competitors in our industry. We do not utilize voice response,
telephonic menus or transferal of off service calls to agents in call centers in foreign countries. Our clients speak directly to their
IPM account team members who understand our clients’ needs and goals. This is an important IPM customer service advantage that fuels our
superior customer retention. We look forward to the opportunities ahead in 2026 as we execute on our plan to grow revenue both organically
and through potential acquisitions, while optimizing expenses.”
Financial Highlights: Q4 2025 and the Year Ended December 31,
2025
| | |
Three Months Ended
December, 31
(unaudited) | | |
Change | |
| | |
2025 | | |
2024 | | |
$ | | |
% | |
| Total revenues | |
$ | 6,133,803 | | |
$ | 279,879 | | |
| 5,853,924 | | |
| 2091.6 | % |
| Operating loss from continuing operations | |
| (819,791 | ) | |
| (1,578,115 | ) | |
| 758,324 | | |
| 48.1 | % |
| Net loss from continuing operations | |
| (631,968 | ) | |
| (1,422,089 | ) | |
| 790,121 | | |
| 55.6 | % |
| Net loss | |
$ | (631,968 | ) | |
$ | (5,490,501 | ) | |
| 4,858,533 | | |
| 88.5 | % |
| Net cash provided by (used in) operating activities – continuing operations | |
$ | 87,582 | | |
$ | (251,251 | ) | |
| 338,833 | | |
| 134.9 | % |
| Adjusted EBITDA (a non-GAAP measure) 1 | |
$ | 4,630 | | |
$ | (1,548,947 | ) | |
| 1,553,577 | | |
| 100.3 | % |
| | |
Year Ended December 31, | | |
Change | |
| | |
2025 | | |
2024 | | |
$ | | |
% | |
| Total revenues | |
$ | 23,612,459 | | |
$ | 1,098,280 | | |
| 22,514,179 | | |
| 2049.9 | % |
| Operating loss from continuing operations | |
| (4,719,179 | ) | |
| (5,121,549 | ) | |
| 402,370 | | |
| 7.9 | % |
| Net loss from continuing operations | |
| (1,956,536 | ) | |
| (4,268,675 | ) | |
| 2,312,139 | | |
| 54.2 | % |
| Net loss | |
$ | (1,956,536 | ) | |
$ | (8,426,209 | ) | |
| 6,469,673 | | |
| 76.8 | % |
| Net cash provided by (used in) operating activities – continuing operations | |
$ | 1,076,724 | | |
$ | (2,661,653 | ) | |
| 3,738,377 | | |
| 140.5 | % |
| Adjusted EBITDA (a non-GAAP measure) 1 | |
$ | (1,116,037 | ) | |
$ | (4,431,852 | ) | |
| 3,315,815 | | |
| 74.8 | % |
| 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. |
As previously disclosed, on January 2, 2025, the
Company completed its acquisition of Newtek Technology Solutions, Inc. (“NTS”) from NewtekOne, Inc. and the sale of its “Paltalk”,
“Camfrog” and “Vumber” applications and certain assets and liabilities related to such applications (the “Transferred
Assets”) to Meteor Mobile Holdings, Inc. (together, the “Transactions”). Following the Transactions, the Company’s business
is focused on cybersecurity and cloud infrastructure.
For the purposes of this earnings release and
the financial information provided herein, revenue and income from operations for the three months and year ended December 31, 2025 primarily
reflect the operations acquired from NTS, while assets and liabilities related to the Transferred Assets are presented as held for sale/discontinued
operations, and the results of operations related to the Transferred Assets are presented as discontinued operations.
For the three months ended December 31, 2025, revenue totaled $6.1
million. On a sequential basis, total revenue decreased 1.7% from the third quarter of 2025. Revenue for the full year ended December
31, 2025 totaled $23.6 million. Total revenue by revenue component for the fourth quarter and year ended December 31, 2025 were as follows:
| |
o |
Managed information technology revenue was $3.9 million and $14.8 million, respectively. |
| |
o |
Procurement revenue was $1.5 million and $5.4 million, respectively. |
| |
o |
Professional services revenue was $0.4 million and $2.3 million, respectively. |
| |
o |
Subscription revenue was $0.3 million and $1.1 million, respectively. |
| ● | Operating loss from continuing operations for the three months
ended December 31, 2025 totaled $0.8 million. Operating loss from continuing operations for the full year ended December 31, 2025 totaled
$4.7 million. |
| ● | Net loss for the three months ended December 31, 2025 totaled
$0.6 million. Net loss for the full year ended December 31, 2025 totaled $2.0 million. We recorded an income tax benefit during the first
quarter of 2025 of approximately $2.1 million in connection with our acquisition of NTS and the divestiture of our “Paltalk”,
“Camfrog” and “Vumber” applications. |
| ● | Adjusted EBITDA1 for the three months ended
December 31, 2025 was positive $5.0 thousand. Adjusted EBITDA for the full year ended December 31, 2025 was negative $1.1 million. |
| ● | As of December 31, 2025, we had no long-term debt, and cash
and cash equivalents totaled $8.4 million (including $1.0 million of restricted cash). |
| ● | Cash provided by continuing operations for the full year
ended December 31, 2025 was $1.1 million. |
| ● | We reported deferred revenue of $3.9 million for full year
2025, which will be recognized as revenue in future quarters as products and/or services are installed. |
| ● | We had more than 10,000 devices under management at December
31, 2025, representing the number of endpoints, servers and network devices that are outsourced to us under managed services agreements. |
Recent developments include:
| ● | Executed an extension of our existing Phoenix data center
license agreement with an industry-leading provider through August 31, 2032. The extension reinforces a long-standing strategic relationship
and supports our continued focus on scalable, secure, and highly reliable digital infrastructure. |
| ● | Achieved SOC Type 1 Compliance, a key milestone in our ongoing
commitment to safeguarding customer data and delivering trusted cybersecurity and cloud infrastructure solutions. |
| ● | Engaged with partners to enhance our Managed IT Security Services,
Secure Private Cloud Hosting, and Professional Services with artificial intelligence features and data readiness benefits that we believe
help customers achieve faster operational results, smarter strategic decisions and better business outcomes. |
Conference Call Access
The Company will conduct a conference call for
all interested parties on Tuesday, March 17, 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: 670919 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/2856/53606.
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 53606 through Tuesday,
March 31, 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 consulting 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 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 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 center licenses; 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 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.
CONSOLIDATED BALANCE SHEETS
| | |
December 31, | |
| | |
2025 | | |
2024 | |
| Assets | |
| | |
| |
| Current assets: | |
| | |
| |
| Cash and cash equivalents | |
$ | 5,597,014 | | |
$ | 10,588,534 | |
| Cash and cash equivalent (on deposit with related party) | |
| 1,801,300 | | |
| -- | |
| Cash and cash equivalents – restricted cash (on deposit with related party) | |
| 1,035,747 | | |
| -- | |
| Accounts receivable, net of allowance of $100,000 | |
| 1,599,725 | | |
| -- | |
| Due from related party | |
| 75,601 | | |
| -- | |
| Prepaid expense and other current assets | |
| 1,363,574 | | |
| 462,422 | |
| Employee retention tax credit receivable, net | |
| -- | | |
| 114,212 | |
| Assets held for sale - current | |
| -- | | |
| 72,925 | |
| Total current assets | |
| 11,472,961 | | |
| 11,238,093 | |
| Property and equipment, net | |
| 550,628 | | |
| -- | |
| Intangible assets, net | |
| 7,718,836 | | |
| 1,882,781 | |
| Goodwill | |
| 4,555,208 | | |
| -- | |
| Assets held for sale - noncurrent | |
| -- | | |
| 2,663,229 | |
| Operating lease right-of-use assets, net | |
| 1,140,196 | | |
| 74,490 | |
| Other assets | |
| 602,688 | | |
| 13,937 | |
| Total assets | |
$ | 26,040,517 | | |
$ | 15,872,530 | |
| | |
| | | |
| | |
| Liabilities and stockholders’ equity | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable | |
$ | 1,604,898 | | |
| 380,298 | |
| Accrued expenses and other current liabilities | |
| 1,031,733 | | |
| 509,759 | |
| Due to related party | |
| 46,450 | | |
| -- | |
| Operating lease liabilities, current portion | |
| 756,590 | | |
| 74,490 | |
| Deferred subscription revenue | |
| 3,878,114 | | |
| 555,039 | |
| Liabilities held for sale - current | |
| -- | | |
| 2,024,237 | |
| Total current liabilities | |
| 7,317,785 | | |
| 3,543,823 | |
| Operating lease liabilities, non-current portion | |
| 387,906 | | |
| -- | |
| Deferred tax liability | |
| 148,898 | | |
| 429,045 | |
| Total liabilities | |
| 7,854,589 | | |
| 3,972,868 | |
| | |
| | | |
| | |
| Commitments and contingencies | |
| | | |
| | |
| Stockholders’ equity: | |
| | | |
| | |
| Series A Preferred Stock, $0.001 par value, 9,000,000 authorized, 4,000,000 and 0 shares outstanding as of December 31, 2025 and 2024, respectively | |
| 4,000 | | |
| -- | |
| Common stock, $0.001 par value, 50,000,000 shares authorized, 9,878,950 shares issued and 9,085,729 and 9,236,987 shares outstanding as of December 31, 2025 and 2024, respectively | |
| 9,879 | | |
| 9,879 | |
| Treasury stock, 793,221 and 641,963 shares repurchased as of December 31, 2025 and 2024, respectively | |
| (1,500,385 | ) | |
| (1,199,337 | ) |
| Additional paid-in capital | |
| 44,939,747 | | |
| 36,399,897 | |
| Accumulated deficit | |
| (25,267,313 | ) | |
| (23,310,777 | ) |
| Total stockholders’ equity | |
| 18,185,928 | | |
| 11,899,662 | |
| Total liabilities and stockholders’ equity | |
$ | 26,040,517 | | |
| 15,872,530 | |
INTELLIGENT PROTECTION MANAGEMENT CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
| | |
Years Ended
December 31, | |
| | |
2025 | | |
2024 | |
| Revenue | |
| | |
| |
Managed information technology revenue, includes $7,309,250 and $0 of related
party revenue for the year ended December 31, 2025 and 2024, respectively | |
| 14,813,411 | | |
| -- | |
Procurement revenue, includes $117,787 and $0 of related party revenue
for the year ended December 31, 2025 and 2024, respectively | |
| 5,389,906 | | |
| -- | |
Professional services revenue, includes $182,513 and $0 of related party
revenue for the year ended December 31, 2025 and 2024, respectively | |
| 2,305,787 | | |
| -- | |
| Subscription revenue | |
| 1,103,355 | | |
| 1,098,280 | |
| Total revenue | |
| 23,612,459 | | |
| 1,098,280 | |
| Costs and expenses, exclusive of depreciation and amortization shown separately below | |
| | | |
| | |
| Costs of revenue | |
| 11,272,929 | | |
| 262,888 | |
| Sales, marketing and product development expense (includes $344,365 in 2025 of related party expense) | |
| 3,253,890 | | |
| 277,244 | |
| General and administrative expense | |
| 10,545,528 | | |
| 4,858,001 | |
| Depreciation and amortization | |
| 2,541,511 | | |
| 821,696 | |
| Litigation expenses relating to the Cisco ManyCam Litigation | |
| 717,780 | | |
| -- | |
| Total costs and expenses | |
| 28,331,638 | | |
| 6,219,829 | |
| Operating loss from continuing operations | |
| (4,719,179 | ) | |
| (5,121,549 | ) |
| Interest income, net | |
| 340,831 | | |
| 569,016 | |
| Other income, net | |
| 95,013 | | |
| 146,269 | |
| Loss from continuing operations before income tax benefit | |
| (4,283,335 | ) | |
| (4,406,264 | ) |
| Income tax benefit | |
| 2,326,799 | | |
| 137,589 | |
| Net loss from continuing operations | |
| (1,956,536 | ) | |
| (4,268,675 | ) |
| Loss from discontinued operations, net of income tax expense of $24,357 | |
| -- | | |
| (4,157,534 | ) |
| Net loss | |
$ | (1,956,536 | ) | |
$ | (8,426,209 | ) |
| | |
| | | |
| | |
| Net loss per share of common stock: | |
| | | |
| | |
| Basic – continuing operations | |
$ | (0.15 | ) | |
$ | (0.48 | ) |
| Diluted – continuing operations | |
$ | (0.15 | ) | |
$ | (0.48 | ) |
| | |
| | | |
| | |
| Basic – discontinued operations | |
$ | -- | | |
$ | (0.43 | ) |
| Diluted – discontinued operations | |
$ | -- | | |
$ | (0.43 | ) |
| | |
| | | |
| | |
| Basic and diluted | |
$ | (0.15 | ) | |
$ | (0.91 | ) |
| 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 | |
| 3,989,041 | | |
| -- | |
| Weighted average number of shares of Common Stock used in calculating net loss per share of Common Stock, basic and diluted | |
| 9,157,745 | | |
| 9,227,197 | |
| Basic and diluted net loss per share of Series A Preferred Stock, basic and diluted | |
| (0.15 | ) | |
| -- | |
| Basic and diluted net loss per share of Common Stock, basic and diluted | |
| (0.15 | ) | |
| (0.48 | ) |
| | |
| | | |
| | |
| Weighted average number of shares of Common Stock used in calculating net loss per share of Common Stock: | |
| | | |
| | |
| Basic and diluted | |
| 13,146,786 | | |
| 9,227,197 | |
INTELLIGENT PROTECTION MANAGEMENT CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | |
Years Ended
December 31, | |
| | |
2025 | | |
2024 | |
| Cash flows from operating activities: | |
| | |
| |
| Net loss | |
$ | (1,956,536 | ) | |
$ | (8,426,209 | ) |
| Net loss from discontinued operations | |
| -- | | |
| 4,157,534 | |
| Net loss from continuing operations | |
$ | (1,956,536 | ) | |
$ | (4,268,675 | ) |
| | |
| | | |
| | |
| Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities: | |
| | | |
| | |
| Amortization of intangible assets | |
| 2,073,945 | | |
| 821,696 | |
| Amortization of operating lease right-of-use assets | |
| 415,661 | | |
| 83,700 | |
| Depreciation of property and equipment | |
| 467,567 | | |
| -- | |
| Income tax liability | |
| (2,329,547 | ) | |
| (71,764 | ) |
| Deferred tax liability | |
| -- | | |
| (137,589 | ) |
| Stock-based compensation | |
| 343,850 | | |
| 151,412 | |
| Allowance for credit losses | |
| 3,436 | | |
| -- | |
| Changes in operating assets and liabilities, net of acquisition: | |
| | | |
| | |
| Accounts receivable | |
| 2,186,799 | | |
| -- | |
| Operating lease liability | |
| (411,361 | ) | |
| (83,700 | ) |
| Employee retention tax credit receivable, net | |
| 114,212 | | |
| -- | |
| Prepaid expense and other current assets | |
| (466,344 | ) | |
| 95,343 | |
| Other assets | |
| (588,751 | ) | |
| | |
| Accounts payable, accrued expenses and other current liabilities, related party | |
| 1,350,718 | | |
| 737,327 | |
| Deferred subscription revenue | |
| (126,925 | ) | |
| 10,597 | |
| Net cash provided by (used in) operating activities – continuing operations | |
| 1,076,724 | | |
| (2,661,653 | ) |
| | |
| | | |
| | |
| Net cash used in operating activities –discontinued operations | |
| -- | | |
| (357,634 | ) |
| | |
| | | |
| | |
| Net cash provided by (used in) operating activities | |
| 1,076,724 | | |
| (3,019,287 | ) |
| | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | |
| Cash paid for acquisition of NTS | |
| (4,000,000 | ) | |
| -- | |
| Purchases of fixed assets | |
| (280,149 | ) | |
| -- | |
| Net cash used in investing activities | |
| (4,280,149 | ) | |
| -- | |
| Cash flows from financing activities: | |
| | | |
| | |
| Proceeds from sale of Transferred Assets | |
| 1,350,000 | | |
| -- | |
| Purchase of treasury stock | |
| (301,048 | ) | |
| -- | |
| Proceeds from exercise of employee stock options | |
| -- | | |
| 39,772 | |
| Net cash provided by financing activities | |
| 1,048,952 | | |
| 39,772 | |
| Net decrease in cash and cash equivalents | |
| (2,154,473 | ) | |
| (2,979,515 | ) |
| Balance of cash and cash equivalents at beginning of year | |
| 10,588,534 | | |
| 13,568,049 | |
| Balance of cash and cash equivalents and restricted cash and cash equivalents at end of year | |
$ | 8,434,061 | | |
$ | 10,588,534 | |
| Cash and cash equivalents | |
$ | 5,597,014 | | |
$ | 10,588,534 | |
| Cash and cash equivalents (on deposit with related party) | |
$ | 1,801,300 | | |
| -- | |
| Cash and cash equivalents - restricted cash (on deposit with related party) | |
$ | 1,035,747 | | |
| -- | |
| Balance of cash and cash equivalents at end of year | |
$ | 8,434,061 | | |
$ | 10,588,534 | |
| Supplemental non-cash disclosure: | |
| | | |
| | |
| 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 and litigation expenses relating to the Cisco ManyCam Litigation (as defined below). Prior to the fiscal quarter ended
September 30, 2025, the Company did not exclude litigation expenses related to the Cisco ManyCam Litigation in calculating Adjusted EBTIDA
as they were not material. However, after reevaluation, the Company has determined that presenting Adjusted EBITDA without excluding such
costs provides less valuable information about the Company’s core operations. As a result, beginning with the fiscal quarter ended
September 30, 2025, litigation expenses related to the Cisco ManyCam Litigation are now 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:
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 “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 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
December 31,
(unaudited)
| | |
Year Ended
December 31, | |
| | |
2025 | | |
2024 | | |
2025 | | |
2024 | |
| Reconciliation of net loss to Adjusted EBITDA: | |
| | |
| | |
| | |
| |
| Net loss | |
$ | (631,968 | ) | |
$ | (1,422,089 | ) | |
$ | (1,956,536 | ) | |
$ | (4,268,675 | ) |
| Net loss from discontinued operations | |
| -- | | |
| (4,068,412 | ) | |
| -- | | |
| (4,157,534 | ) |
| Interest income, net | |
| (67,655 | ) | |
| (115,284 | ) | |
| (340,831 | ) | |
| (569,016 | ) |
| Income tax expense, discontinued operations | |
| -- | | |
| 15,586 | | |
| -- | | |
| 24,357 | |
| Income tax benefit | |
| (88,905 | ) | |
| (40,742 | ) | |
| (2,326,799 | ) | |
| (137,589 | ) |
| Other income, net | |
| (31,263 | ) | |
| - | | |
| (95,013 | ) | |
| (146,269 | ) |
| Litigation expenses relating to the Cisco ManyCam Litigation | |
| 210,599 | | |
| - | | |
| 717,780 | | |
| -- | |
| Depreciation and amortization expense | |
| 559,277 | | |
| 204,946 | | |
| 2,541,512 | | |
| 821,696 | |
| Impairment loss in connection with Divestiture | |
| -- | | |
| 3,849,766 | | |
| -- | | |
| 3,849,766 | |
| Stock-based compensation expense | |
| 54,545 | | |
| 27,282 | | |
| 343,850 | | |
| 151,412 | |
| Adjusted EBITDA | |
$ | 4,630 | | |
$ | (1,548,947 | ) | |
$ | (1,116,037 | ) | |
$ | (4,431,852 | ) |
8
