Business Context and Reporting Period
Company: Intelligent Protection Management Corp. (IPM)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Three and six months ended June 30, 2026
Business Overview: IPM provides managed IT security, secure private cloud hosting, backup and disaster recovery, professional services, procurement services, and web hosting. The company also offers ManyCam software for live streaming. Following the acquisition of Newtek Technology Solutions, Inc. (NTS) in January 2025, the company rebranded from Paltalk, Inc. to Intelligent Protection Management Corp.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 |
Six Months Ended June 30, 2026 |
|---|---|---|
| Total Revenue | $6,462,542 | $12,817,293 |
| Net Loss | $(1,351,498) | $(2,011,712) |
| Loss Per Share (Basic & Diluted) | $(0.10) | $(0.15) |
| Adjusted EBITDA | $(610,254) | $(777,773) |
| Cash and Cash Equivalents | $7,485,151 (as of June 30, 2026) | |
| Long-Term Debt | ||
| Deferred Revenue | $4,469,109 (as of June 30, 2026) |
Revenue Composition (Six Months 2026): Managed IT ($7.7M), Procurement ($3.7M), Professional Services ($0.8M), Subscription ($0.5M).
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 13% year-over-year (Q2) and 14% year-over-year (YTD). This was driven by an 8% increase in Managed IT services and a 64% increase in Procurement revenue (Q2), partially offset by declines in Professional Services (-47%) and Subscription revenue (-10%).
- Profitability: Net loss widened to $1.35M for Q2 2026 from $1.05M in Q2 2025. Operating loss increased to $1.51M from $1.13M.
- Cost Structure: Cost of revenue increased 33% (Q2) primarily due to higher procurement equipment costs and supply chain disruptions. General and Administrative expenses increased 3% (Q2) due to higher legal and professional fees, offset by lower insurance costs.
- Cash Flow: Net cash used in operating activities was $0.79M for the six months ended June 30, 2026, compared to cash provided by operations of $0.86M in the prior year period. The shift was primarily due to cash used for procuring inventory to support revenue growth.
Guidance, Outlook, Risks, and Unusual Items
Management Commentary and Outlook
- Strategic Initiatives: The company is expanding its sales organization in the Phoenix/West Coast market and has extended its Phoenix data center lease through 2032. It has entered a strategic collaboration with MASORI Therapeutics to integrate AI capabilities.
- Compliance: Successfully achieved SOC 2 Type 1 compliance.
- Capital Markets: A shelf registration statement (Form S-3) was declared effective on June 18, 2026, allowing the company to offer up to $50 million in securities.
Risks and Contingencies
- Supply Chain Constraints: Shortages of memory, CPU, and GPU components have extended lead times, delaying revenue recognition and increasing costs. A significant customer order incurred a loss in Q2 due to higher component and freight costs.
- Related Party Concentration: Newtek (a significant shareholder) accounted for 28% of Q2 revenue and 29% of YTD revenue. The loss of this customer could materially impact operations.
- Litigation:
- Cisco WebEx Litigation: IPM was awarded $65.7M in August 2024. However, the court granted Cisco a new trial regarding damages. IPM estimates receiving no more than one-third of the gross proceeds after legal fees, subject to appeal.
- Cisco ManyCam Litigation: Cisco alleges IPM's ManyCam software infringes two patents. IPM incurred $0.5M in defense costs YTD 2026. No liability has been recorded as a loss is not deemed probable.
Unusual Items
- Stock Repurchase: The company completed its $400,000 stock repurchase plan in Q1 2026, buying 50,000 shares for $83,491. The plan expired on May 8, 2026.
- Divestiture Earn-Out: IPM is entitled to earn-out payments from the sale of its legacy "Vumber," "Paltalk," and "Camfrog" assets to Meteor Mobile based on future revenue performance.
Investor Verification Checklist
- Supply Chain Impact: Verify the duration of component shortages and the specific impact on gross margins for procurement services.
- Related Party Dependence: Assess the stability of the relationship with Newtek, which represents nearly 30% of revenue and is a major shareholder.
- Litigation Resolution: Monitor the status of the Cisco WebEx damages retrial and the ManyCam infringement defense, as outcomes could significantly alter cash flows or require injunctions.
- Cash Burn Rate: Review the trend in operating cash flow usage, particularly as the company invests in AI integration and sales expansion while managing litigation costs.
- Deferred Revenue: Confirm the timing of revenue recognition for the $4.5M in deferred revenue, given the supply chain delays mentioned in the filing.