Intelligent Protection (Nasdaq: IPM) grows Q2 2026 revenue but widens loss
Rhea-AI Filing Summary
Intelligent Protection Management Corp. reported higher revenue but wider losses for the three and six months ended June 30, 2026. Q2 2026 total revenue was $6.46 million, up 12.9% from $5.72 million a year earlier, driven by managed IT services growth and a 64% increase in procurement revenues tied to AI-related equipment, partially offset by lower professional services and subscription revenue. For the first half of 2026, revenue rose 14.0% to $12.82 million.
Profitability remained weak. Q2 net loss expanded to $1.35 million from $1.05 million, and the six‑month net loss increased to $2.01 million from $0.24 million, reflecting higher cost of revenue, Cisco ManyCam litigation expenses and supply‑chain‑driven margin pressure, including a significant customer order that turned loss‑making when fulfilled at higher costs. Adjusted EBITDA remained negative in Q2 at $(610,254) and $(777,773) for the six months.
Operating cash flow for the first half was $(786,730) versus positive $856,105 a year earlier, while cash, cash equivalents and restricted cash totaled $7.49 million at June 30, 2026. The company highlights no long‑term debt, increased deferred revenue, SOC 2 Type 1 compliance, an extended Phoenix data center agreement through 2032, and ongoing exploration of strategic M&A.
Positive
- Q2 2026 revenue grew 12.9% to $6.46 million, with six‑month revenue up 14.0% to $12.82 million, indicating continued top‑line expansion.
- Procurement revenue rose sharply, contributing to a 64% increase in procurement activity as customers invested in AI‑related infrastructure.
- The company reports a strong balance sheet with no long‑term debt and total cash, cash equivalents and restricted cash of $7.49 million at June 30, 2026.
- Deferred revenue increased to $4.47 million from $3.88 million, supporting future revenue visibility.
- Operationally, the company achieved SOC 2 Type 1 compliance and extended its Phoenix data center agreement through 2032, strengthening its infrastructure positioning.
Negative
- Net loss widened to $1.35 million in Q2 2026 and to $2.01 million for the first half, compared with $1.05 million and $0.24 million, respectively.
- First‑half operating cash flow swung to an outflow of $786,730 from an inflow of $856,105 a year earlier.
- Supply chain constraints increased component and freight costs, causing a significant customer order to generate a loss and contributing to higher cost of revenue.
- Litigation expenses related to the Cisco ManyCam Litigation totaled $484,470 for the first half, adding to operating costs.
- Professional services and subscription revenues declined year over year, partially offsetting gains in managed IT and procurement revenue.
Filing Explained
At June 30, 2026, common shares outstanding were 9,035,729, while 843,221 shares were held as treasury stock.
This Form 8-K furnishes IPM’s second-quarter results under Item 2.02; the release is furnished rather than filed and is not incorporated by reference.
At
Compared with
Issuing additional shares would reduce an existing holder’s percentage ownership absent offsetting changes; this filing reports the company’s existing issued, outstanding, and treasury-share counts rather than an issuance event.
The release also states that booked orders remained unrecognized pending fulfillment and delivery, with recognition expected in future quarters.
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
SOC 2 Type 1 compliance technical
deferred revenue financial
supply chain constraints other
Cisco ManyCam Litigation regulatory
Earnings Snapshot
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Intelligent Protection Management Corp. (IPM) perform financially in Q2 2026?
What were IPM’s results for the six months ended June 30, 2026?
How did supply chain constraints affect IPM’s Q2 2026 results?
What is IPM’s cash and debt position as of June 30, 2026?
How did IPM’s Adjusted EBITDA trend in Q2 and first half 2026?
What operational milestones did IPM highlight in its Q2 2026 update?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
| of incorporation) | Identification No.) |
|
|
||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including
area code: (
(Former name or former address, if changed since last report)
Not Applicable
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):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
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).
Emerging growth company
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. ☐
Section 2 — Financial Information
Item 2.02 Results of Operations and Financial Condition.
On August 11, 2026, Intelligent Protection Management Corp. issued a press release announcing its financial results for the quarter ended June 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.
Section 9 — Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press Release of Intelligent Protection Management Corp., dated August 11, 2026 (furnished pursuant to Item 2.02). | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
1
SIGNATURES
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.
| Date: August 11, 2026 | ||
| INTELLIGENT PROTECTION MANAGEMENT CORP. | ||
| By: | /s/ Jason Katz | |
| Jason Katz | ||
| Chief Executive Officer | ||
2
Exhibit 99.1
Intelligent Protection Management Corp.
Reports Second Quarter 2026 Financial Results
Continued Momentum – Q2 total revenue UP 13%;
Sustained Growth - Six-month total revenue UP 14%
JERICHO, NY / ACCESS Newswire / August 11, 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 the six months ended June 30, 2026.
Management Discussion
Jason Katz, Chairman and Chief Executive Officer, said, “Financial results for the second quarter of 2026 were solid despite supply chain constraints, achieving a 13% increase in total revenue to $6.5 million compared to last year’s second quarter. For the six months ended June 30, 2026, total revenue increased 14% to $12.8 million. We achieved double-digit revenue growth by generating new customers, expanding sales to existing customers and investing strategically for future growth. Our performance underscores the strength and value of our “white glove” managed technology solutions in highly regulated industries. As customers increasingly recognize the security, reliability and scalability of our platform, we believe we remain well positioned to capitalize on growing market demands.
“In the second quarter”, Mr. Katz continued, “we had a strong increase of 64% in procurement revenues, as customers focused on building out their infrastructure as quickly as possible to execute on their AI initiatives. Customer procurement by its nature is uneven and dependent on many unpredictable factors. In that regard, we have invested in expanding our procurement and fulfillment infrastructure to better serve our clients.
“We experienced supply chain constraints during the quarter, which affected the availability of memory, CPU and GPU components throughout the quarter. These conditions extended product lead times, resulting in delays between customer bookings and product shipments. Consequently, a portion of booked orders remained unrecognized as of the end of June 30, 2026 as revenue pending fulfillment and delivery in future quarters. Going forward, we are better prepared to manage this part of our business in a more effective way and on a more timely basis, as we are adding additional distributors, vendors, partners and manufacturers to further diversify our sources.
“During the quarter we continued to add new customer relationships and service contracts, as we remain dedicated to building a diversified customer base to reduce concentration in a handful of customers. Additionally, during the first half of 2026, we further strengthened our competitive position by achieving SOC 2 Type 1 compliance, extending our Phoenix data center agreement through 2032 and accelerating AI integration through our partnership with MASORI Therapeutics. These advancements enhance our ability to deliver secure, enterprise-grade infrastructure and AI-driven automation, elevating our position as a trusted partner.”
Mr. Katz, concluded, “As I have indicated previously, we continue to explore and evaluate strategic opportunities, including, but not limited to, potential mergers or acquisitions of other entities or assets that are synergistic to our businesses and expand our market leadership. With a strong balance sheet, no long-term debt and a growing pipeline, we believe we are well positioned to move aggressively and integrate operations that are synergistic with our core operations and can be acquired at reasonable valuations to provide greater returns for our loyal stockholders. We are confident in our ability to build on our momentum and deliver strong results throughout the remainder of 2026 as well as deliver shareholder value.”
Financial Highlights: Q2 2026
| Three Months Ended June 30, (unaudited) | Change | |||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Total revenues | $ | 6,462,542 | $ | 5,722,599 | 739,943 | 12.9 | % | |||||||||
| Loss from operations | $ | (1,512,371 | ) | $ | (1,129,699 | ) | 382,672 | 33.8 | % | |||||||
| Net loss | $ | (1,351,498 | ) | $ | (1,050,028 | ) | 301,470 | 28.7 | % | |||||||
| Net cash (used in) operating activities | $ | (591,018 | ) | $ | (888,678 | ) | (297,660 | ) | (33.5 | )% | ||||||
| Adjusted EBITDA (a non-GAAP measure) 1 | $ | (610,254 | ) | $ | (378,289 | ) | 231,965 | 61.3 | % | |||||||
| Six Months Ended June 30, (unaudited) | Change | |||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Total revenues | $ | 12,817,293 | $ | 11,240,637 | 1,576,656 | 14.0 | % | |||||||||
| Loss from operations | $ | (2,280,553 | ) | $ | (2,463,626 | ) | (183,073 | ) | (74.3 | )% | ||||||
| Net (loss) income | $ | (2,011,712 | ) | $ | (241,498 | ) | 1,770,214 | (733.0 | )% | |||||||
| Net cash (used in) provided by operating activities | $ | (786,730 | ) | $ | 856,105 | (1,642,835 | ) | (191.9 | )% | |||||||
| Adjusted EBITDA (a non-GAAP measure) 1 | $ | (777,773 | ) | $ | (860,546 | ) | (82,773 | ) | (9.6 | )% | ||||||
| 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. |
2
Financial Results: Three and Six months ended June 30, 2026
For the three months ended June 30, 2026, total revenue increased by 13% to $6.5 million from $5.7 million for the three months ended June 30, 2025. This increase was driven by increased managed information technology revenue, attributed to both new customers, as well as the expansion of services sold to existing customers, and an increase in procurement revenue related to sales of AI-related equipment to customers, partially offset by decreases in professional services revenue and subscription revenue. Total revenue by revenue component for the second quarter ended June 30, 2026, was as follows:
| ● | Managed information technology revenue, which consists of revenue from our managed IT security services, managed backup and disaster solutions and web hosting, was $3.8 million, an increase of 8.4% from Q2 2025. |
| ● | Procurement revenue was $2.0 million, an increase of 64.0% from Q2 2025. |
| ● | Professional services revenue was $363,055, a decrease of 47.3% from Q2 2025. |
| ● | Subscription revenue was $249,490, a decrease of 10.5% from Q2 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.
| ● | Net loss for the three months ended June 30, 2026 totaled $1.4 million compared to net loss of $1.1 million for the three months ended June 30, 2025; |
| ● | Adjusted EBITDA for the three months ended June 30, 2026 totaled negative $0.6 million compared to negative $0.4 million for the three months ended June 30, 2025; |
| ● | Cash used in operations totaled $0.6 million for the three months ended June 30, 2026 compared to cash used in operations of $0.9 million for the three months ended June 30, 2025, primarily related to our sourcing of product in connection with the increased procurement revenue; |
| ● | Deferred revenue was $4.5 million as of June 30, 2026, which will be recognized as revenue in future quarters as products and/or services are installed; and |
| ● | At June 30, 2026 we had $7.5 million of cash and cash equivalents on our balance sheet and no long-term debt. |
3
For the six months ended June 30, 2026, total revenue increased by 14% to $12.8 million from $11.2 million for the comparable six-month period in 2025. The increase was driven by increased managed information technology revenue, attributed to both new customers as well as the expansion of services sold to existing customers, and an increase in procurement revenue related to sales of AI-related equipment to customers, partially offset by decreases in professional services revenue and subscription revenue.
| ● | For the six months ended June 30, 2026, revenue totaled $12.8 million compared to $11.2 million for the six months ended June 30, 2025, an increase of 14%, primarily attributed to an increase in our managed IT services of 9% compared to the prior year period, as well as an increase in procurement revenue of 70% compared to the prior year period; |
| ● | Net loss for the six months ended June 30, 2026 totaled $2.0 million, compared to net loss of $0.2 million for the six months ended June 30, 2025; |
| ● | Adjusted EBITDA for the six months ended June 30, 2026 totaled negative $0.8 million, compared to negative $0.9 million for the six months ended June 30, 2025; and |
| ● | Cash used by operations of $0.8 million for the six months ended June 30, 2026 compared to cash provided by operations of $0.9 million for the six months ended June 30, 2025, primarily related to our sourcing of inventory in connection with the increased procurement revenue. |
Items Affecting Our Results for the Second Quarter
During the three months ended June 30, 2026, we experienced supply chain constraints affecting the availability of memory, CPU and GPU components. These constraints extended product lead times compared to historical levels, resulting in delays between customer bookings and product shipments. As a result, a portion of booked orders during the quarter remained unrecognized as revenue pending fulfillment and delivery, which we expect to recognize in future quarters as the underlying products and services are shipped and installed.
During the six months ended June 30, 2026, a significant customer order was delayed and fulfilled across two reporting periods due to supply chain constraints affecting both our vendor and distribution channel. These constraints altered the cost structure associated with fulfilling the order. The initial shipment, completed in the first quarter, was recognized at expected margins, while the subsequent shipment, completed during the second quarter, incurred higher component and freight costs, resulting in a loss on that portion of the order. As a result, the combined order resulted in a loss, which contributed to the increase in cost of revenue for the period.
Operational Highlights: Three and Six months ended June 30, 2026:
| ● | 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. |
4
| ● | Entered into a strategic collaboration with MASORI Therapeutics (“MASORI”), an advanced artificial intelligence (“AI”) platform designed to accelerate results by reducing cost, complexity, and time for small and medium AI models, allowing organizations to save significantly by decreasing necessary code development and providing AI-related benefits. |
| ● | 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 June 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, August 11, 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: 127631 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/2856/54297.
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 54297 through Tuesday, August 25, 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
5
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 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 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
6
INTELLIGENT PROTECTION MANAGEMENT CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2026 | December 31, 2025 | |||||||
| Assets | (unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 5,228,082 | $ | 5,597,014 | ||||
| Cash and cash equivalents (on deposit with a related party) | 2,257,069 | 1,801,300 | ||||||
| Cash and cash equivalents – restricted cash (on deposit with related party) | -- | 1,035,747 | ||||||
| Accounts receivable, net of allowance of $98,104 and $100,000 as of June 30, 2026 and December 31, 2025, respectively | 1,920,708 | 1,599,725 | ||||||
| Due from related party | 26,283 | 75,601 | ||||||
| Prepaid expense and other current assets | 2,345,056 | 1,363,574 | ||||||
| Total current assets | 11,777,198 | 11,472,961 | ||||||
| Property and equipment, net | 400,915 | 550,628 | ||||||
| Intangible assets, net | 6,994,056 | 7,718,836 | ||||||
| Goodwill | 4,555,208 | 4,555,208 | ||||||
| Operating lease right of use assets, net | 4,149,953 | 1,140,196 | ||||||
| Other assets | 481,023 | 602,688 | ||||||
| Total assets | $ | 28,358,353 | $ | 26,040,517 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,752,648 | $ | 1,604,898 | ||||
| Accrued expenses and other current liabilities | 583,805 | 1,031,733 | ||||||
| Operating lease liabilities, current portion | 564,980 | 756,590 | ||||||
| Deferred revenue | 4,469,109 | 3,878,114 | ||||||
| Due to related party | 58,675 | 46,450 | ||||||
| Total current liabilities | 8,429,217 | 7,317,785 | ||||||
| Operating lease liabilities, non-current portion | 3,645,350 | 387,906 | ||||||
| Deferred tax liability | 127,933 | 148,898 | ||||||
| Total liabilities | 12,202,500 | 7,854,589 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Series A Preferred Stock, $0.001 par value, 9,000,000 authorized, 4,000,000 shares issued and outstanding as of June 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 June 30, 2026 and December 31, 2025, respectively | 9,879 | 9,879 | ||||||
| Treasury stock, 843,221 and 793,221 shares repurchased as of June 30, 2026 and December 31, 2025, respectively | (1,583,876 | ) | (1,500,385 | ) | ||||
| Additional paid-in capital | 45,004,875 | 44,939,747 | ||||||
| Accumulated deficit | (27,279,025 | ) | (25,267,313 | ) | ||||
| Total stockholders’ equity | 16,155,853 | 18,185,928 | ||||||
| Total liabilities and stockholders’ equity | $ | 28,358,353 | $ | 26,040,517 | ||||
7
INTELLIGENT PROTECTION MANAGEMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | ||||||||||||||||
| Managed information technology, includes $1,727,862 and $1,827,817 of related party revenue for the three months ended June 30, 2026 and 2025, respectively, and $3,617,987 and $3,516,400, of related party revenue for the six months ended June 30, 2026 and 2025, respectively | $ | 3,802,320 | $ | 3,506,754 | $ | 7,722,814 | $ | 7,065,587 | ||||||||
| Procurement revenue, includes $23,463 and $23,361 of related party revenue for the three months ended June 30, 2026 and 2025, respectively, and $57,901, and $77,881 of related party revenue for the six months ended June 30, 2026 and 2025, respectively | 2,047,677 | 1,248,401 | 3,744,578 | 2,199,780 | ||||||||||||
| Professional services revenue, includes $44,514 and $56,396 of related party revenue for the three months ended June 30, 2026 and 2025, respectively, and $81,889 and $108,246 of related party revenue for the six months ended June 30, 2026 and 2025, respectively | 363,055 | 688,815 | 846,355 | 1,415,422 | ||||||||||||
| Subscription revenue | 249,490 | 278,629 | 503,546 | 559,848 | ||||||||||||
| Total revenue | 6,462,542 | 5,722,599 | 12,817,293 | 11,240,637 | ||||||||||||
| Costs and expenses | ||||||||||||||||
| Costs of revenue | 3,791,615 | 2,857,449 | 7,051,781 | 5,322,112 | ||||||||||||
| Sales, marketing and product development expense | 767,668 | 839,397 | 1,545,697 | 1,604,761 | ||||||||||||
| General and administrative expense | 2,555,085 | 2,481,801 | 5,062,716 | 5,419,698 | ||||||||||||
| Depreciation and amortization | 477,684 | 673,651 | 953,182 | 1,357,692 | ||||||||||||
| Litigation expenses relating to the Cisco ManyCam Litigation | 382,861 | -- | 484,470 | -- | ||||||||||||
| Total costs and expenses | 7,974,913 | 6,852,298 | 15,097,846 | 13,704,263 | ||||||||||||
| Loss from operations | (1,512,371 | ) | (1,129,699 | ) | (2,280,553 | ) | (2,463,626 | ) | ||||||||
| Interest income, net | 57,848 | 87,928 | 119,226 | 170,320 | ||||||||||||
| Other income | -- | 63,750 | 22,000 | 63,750 | ||||||||||||
| Loss from operations before income tax benefit (expense) | (1,454,523 | ) | (978,021 | ) | (2,139,327 | ) | (2,229,556 | ) | ||||||||
| Income tax benefit (expense) | 103,025 | (72,007 | ) | 127,615 | 1,988,058 | |||||||||||
| Net loss | $ | (1,351,498 | ) | $ | (1,050,028 | ) | (2,011,712 | ) | $ | (241,498 | ) | |||||
| Net loss per share of common stock: | ||||||||||||||||
| Basic | $ | (0.10 | ) | $ | (0.08 | ) | $ | (0.15 | ) | $ | (0.02 | ) | ||||
| Diluted | $ | (0.10 | ) | $ | (0.08 | ) | $ | (0.15 | ) | $ | (0.02 | ) | ||||
| 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 | 3,977,901 | ||||||||||||
| Weighted average number of shares of Common Stock used in calculating net loss per share of Common Stock, basic and diluted | 9,035,729 | 9,201,658 | 9,053,463 | 9,219,225 | ||||||||||||
| Basic and diluted net loss per share of Series A Preferred Stock, basic and diluted | $ | (0.10 | ) | $ | (0.08 | ) | $ | (0.15 | ) | $ | (0.02 | ) | ||||
| Basic and diluted net loss per share of Common Stock, basic and diluted | $ | (0.10 | ) | $ | (0.08 | ) | $ | (0.15 | ) | $ | (0.02 | ) | ||||
| Weighted average number of shares of common stock used in calculating net loss per share of common stock: | ||||||||||||||||
| Basic | 13,035,729 | 13,201,658 | 13,053,463 | 13,197,125 | ||||||||||||
| Diluted | 13,035,729 | 13,201,658 | 13,053,463 | 13,197,125 | ||||||||||||
8
INTELLIGENT PROTECTION MANAGEMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (2,011,712 | ) | $ | (241,498 | ) | ||
| Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities: | ||||||||
| Amortization of intangible assets | 724,780 | 1,130,176 | ||||||
| Amortization of operating lease right-of-use assets | 345,445 | 415,661 | ||||||
| Depreciation on property and equipment | 228,402 | 227,515 | ||||||
| Deferred taxes | (20,965 | ) | (1,971,762 | ) | ||||
| Stock-based compensation | 65,128 | 245,389 | ||||||
| Chang in allowance for credit losses | (1,896 | ) | 3,436 | |||||
| Changes in operating assets and liabilities, net of acquired assets and disposition: | ||||||||
| Accounts receivable | (269,769 | ) | 1,199,060 | |||||
| Operating lease liability | (289,368 | ) | (420,414 | ) | ||||
| Prepaid expense and other current assets | (981,482 | ) | (1,650,494 | ) | ||||
| Other assets | 121,665 | -- | ||||||
| Accounts payable, accrued expenses and other current liabilities | 712,047 | 2,067,674 | ||||||
| Deferred revenue | 590,995 | (148,638 | ) | |||||
| Net cash (used in) provided by operating activities | (786,730 | ) | 856,105 | |||||
| Cash flows from investing activities: | ||||||||
| Purchase of fixed assets | (78,689 | ) | (280,149 | ) | ||||
| Cash paid for acquisition of NTS | -- | (4,000,000 | ) | |||||
| Net cash used in investing activities | (78,689 | ) | (4,280,149 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Purchase of treasury stock | (83,491 | ) | (212,798 | ) | ||||
| Proceeds from sale of Transferred Assets | -- | 1,350,000 | ||||||
| Net cash (used in) provided by financing activities | (83,491 | ) | 1,137,202 | |||||
| Net decrease in cash and cash equivalents | (948,910 | ) | (2,286,842 | ) | ||||
| 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 | 7,485,151 | 8,301,692 | ||||||
| Cash and cash equivalents | $ | 5,228,082 | $ | 6,624,860 | ||||
| Cash and cash equivalents (on deposit with related party) | $ | 2,257,069 | $ | 662,118 | ||||
| Cash and cash equivalents - restricted cash (on deposit with related party) | $ | -- | $ | 1,014,714 | ||||
| Balance of cash and cash equivalents at end of period | $ | 7,485,151 | $ | 8,301,692 | ||||
| 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 | ||||
9
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 EBITDA 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.
10
| Three Months Ended | ||||||||
| June 30 (unaudited) | ||||||||
| 2026 | 2025 | |||||||
| Reconciliation of net loss to Adjusted EBITDA: | ||||||||
| Net loss | $ | (1,351,498 | ) | $ | (1,050,028 | ) | ||
| Interest income, net | (57,848 | ) | (87,928 | ) | ||||
| Income tax expense (benefit) | (103,025 | ) | 72,007 | |||||
| Other income, net | -- | (63,750 | ) | |||||
| Litigation expenses relating to the Cisco ManyCam Litigation | 382,861 | -- | ||||||
| Depreciation and amortization expense | 477,684 | 673,650 | ||||||
| Stock-based compensation expense | 41,572 | 77,760 | ||||||
| Adjusted EBITDA | $ | (610,254 | ) | $ | (378,289 | ) | ||
| Six Months Ended | ||||||||
| June 30, (unaudited) | ||||||||
| 2026 | 2025 | |||||||
| Reconciliation of net loss to Adjusted EBITDA: | ||||||||
| Net loss | $ | (2,011,712 | ) | $ | (241,498 | ) | ||
| Interest income, net | (119,226 | ) | (170,320 | ) | ||||
| Income tax expense (benefit) | (127,615 | ) | (1,988,058 | ) | ||||
| Other income, net | (22,000 | ) | (63,750 | ) | ||||
| Litigation expenses relating to the Cisco ManyCam Litigation | 484,470 | -- | ||||||
| Depreciation and amortization expense | 953,182 | 1,357,691 | ||||||
| Stock-based compensation expense | 65,128 | 245,389 | ||||||
| Adjusted EBITDA | $ | (777,773 | ) | $ | (860,546 | ) | ||
11