Greetings, and welcome to the Intelligent Protection Management Corporation's Second Quarter 2025 Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Joe Diaz of Lytham Partners. Sir, the floor is yours.

Good afternoon, and welcome to all participating on today's call to review the financial and operating results of IPM for the second quarter ended June 30, 2025. As the operator indicated, my name is Joe Diaz with Lytham Partners. We are the Investor Relations representative for IPM. By now, everyone should have access to the earnings press release, which was issued after the close of market today. This call is being webcast and will be available for replay. During the course of this call, management will include statements that are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements about future results of operations, business strategies and plans, our relationships with our customers as well as market and potential growth opportunities. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current knowledge and expectations as of today, and are subject to certain risks, uncertainties and assumptions related to factors that may cause actual results to differ materially from those anticipated in the forward-looking statements. These expectations and beliefs may not ultimately prove to be correct. A detailed discussion of such risks and uncertainties are contained in the company's filings with the SEC, including its annual report on Form 10-K for the year ended December 31, 2024. You should refer to and consider these factors when relying on such forward-looking information. The company does not undertake and expressly disclaims any obligation to update or alter the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. On this call, management will refer to adjusted EBITDA, a non-GAAP measure that when used in combination with GAAP results, provides IPM's investors with additional analytical tools to understand the company's operations. For adjusted EBITDA, management has provided a reconciliation to the most directly comparable GAAP financial measure in the earnings press release, which has been posted to the Investor Relations section of the company's website at www.ipm.com. At this time, I'd like to turn the call over to IPM's Chief Executive Officer, Jason Katz. After Jason's remarks, we will hear from IPM's CFO, Kara Jenny, and we'll conclude with investor questions that were e-mailed to the company in advance of this conference call. Jason, the floor is yours.

Thanks, Joe, and good afternoon, everyone. We greatly appreciate you taking the time to join us on today's call. As previously disclosed, on January 2, 2025, we completed our acquisition of Newtek Technology Solutions, Inc. or NTS from NewtekOne, Inc. and we divested our Paltalk, Camfrog and Vumber applications and certain assets and liabilities related to such applications to Meteor Mobile Holdings, Inc. This marks our second quarter following the acquisition of NTS and divestiture of our core video chat products. We are pleased with the sequential progress made during our first 2 operational quarters after these transactions and our successful rebranding to Intelligent Protection Management Corp. or what we refer to as IPM. During this period, we've laid the groundwork from sales, marketing, accounting and human capital to position IPM to be poised for growth for the benefit of our customers, employees and shareholders. Since the closing of the transactions in January, we have successfully integrated our operations and service our existing customers without interruption. Moving forward, we believe we are now well positioned to grow the company through the expansion of our services offerings to our existing legacy NTS customers while cross-selling our ManyCam software and varying new services to our historical web hosting customer base. We expect this strategy to lead to further growth and enhancement of our operational efficiencies all focused on driving stockholder value. Today, more than ever, cybersecurity and cloud infrastructure are critical to protecting sensitive data, ensuring business continuity and securing a digital economy in an era of growing cyber threats. We have an exciting opportunity to build out a company that can become one of the leading managed technology solutions providers with a focus on cybersecurity and cloud infrastructure. As we see it, our job is to protect the heart and soul…

Thank you, Jason. As Jason indicated, we acquired the operations of NTS on January 2, 2025, and rebranded our company to Intelligent Management Protection Corp., or IPM. The quarterly financial comparisons of IPM and the former NTS as a division of NewtekOne are not comparable from a GAAP perspective. IPM financials will become comparable on a GAAP basis as of the first quarter of 2026. For the 3 months ended June 30, 2025, revenue totaled $5.7 million compared to $0.3 million for the prior year period. On a sequential basis, revenue increased 4% from the first quarter of 2025. Revenue for the 6 months ended June 30, 2025, totaled $11.2 million compared to $0.5 million in the prior year period. Total revenue by revenue stream for the 3 and 6 months period ended June 30, 2025, were as follows: Managed Information Technology revenue was $3.5 million and $7.1 million, respectively. Procurement revenue was $1.2 million and $2.2 million, respectively. Professional services revenue was $0.7 million and $1.4 million, respectively, and subscription revenue was $0.3 million and $0.6 million, respectively. Net loss from continuing operations for the 3 months ended June 30, 2025, totaled $1.1 million compared to a net loss of $1.3 million for the 3 months ended June 30, 2024. Net loss from continuing operations for the 6 months ended June 30, 2025, totaled $0.2 million compared to a net loss from continuing operations of $1.6 million for the prior 6 months ended June 30, 2024. The reduction in net loss was attributed to IPM recording an income tax benefit during the first quarter of approximately $2.1 million in connection with the aforementioned transactions. Net loss for the 3 months ended June 30, 2025, totaled $1.1 million compared to a net loss of $0.8 million for the 3 months ended June 30, 2024. Net loss for the 6 months ended June 30, 2025, totaled $0.2 million compared to a net loss of $1.1 million for the 6 months ended June 30, 2024. Adjusted EBITDA for the 3 months ended June 30, 2025, was negative $0.4 million compared to negative $0.9 million for the 3 months ended June 30, 2024, while adjusted EBITDA for the 6 months ended June 30, 2025, was negative $0.9 million compared to negative $1.4 million for the 6 months ended June 30, 2024. As of June 30, 2025, we had no long-term debt and cash equivalents included $8.3 million, including $1 million of restricted cash. Cash provided by operations for the 6 months ended June 30, 2025, was $0.9 million compared to cash used in continuing operations for the 6 months ended June 30, 2024, of $0.1 million. IPM reported deferred revenue of $3.9 million to be recognized as revenue in future quarters as products and/or services are installed. We will now move on to questions.

Thanks, Kara. The first question submitted by investors has to do with restricted cash. Help us understand the $1.0 million in restricted cash. Are the funds prepayments by customers or tied to any specific obligations or covenants? Why is it classified as restricted cash?

It's a great question. As we discussed at the end of last quarter, we entered into a credit agreement with an affiliate of NewtekOne, Inc. that provides for a secured revolving line of credit. Line of credit is collateralized by a CD in the amount of $1 million. So we've classified it as restricted cash as of June 30, 2025. There were no amounts borrowed on the line of credit are due on the line.

Okay. You've spoken about various ways to increase revenues, including cross-selling existing clients, NewtekOne referrals, free security evaluations and potential M&A transaction. Can you discuss which activity you might expect to generate the most traction for the remainder of the year?

Sure. I'm excited about the referral program we have in place. And even in its infancy, we have started to see introduction start to cultivate. We stand by our products and services and believe that word of mouth is an easy, cost-effective way to promote them.

How should we think about growth and margin improvement over the next 6 to 12 months? What do you think provides the best way for an outsider to judge the company's progress?

Well, with the understanding that revenue can be lumpy due to revenue recognition, our aim is to continue to increase top line consecutive growth and to continue to improve adjusted EBITDA with the goal towards being adjusted EBITDA positive by early 2026. In addition, we're always looking for ways to reduce expenses as well as marketing initiatives to achieve that goal.

What effect, if any, could the current proposed tariff increases have on IPM's business?

Well, we've evaluated our customer base and the services we're providing to them and do not anticipate that an increase in tariffs would have a material impact on our business in fiscal 2025. We will continue to stay on top of the issue like others in the industry and reassess based on the changing landscape.

Okay. That concludes our Q&A session here for today. Let me turn the call back over to Jason for closing remarks. Jason?

Thanks, everyone, for your support and for joining us today. We are very grateful for your interest in our business. We look forward to updating the market on our progress as we continue to execute on our business plan. We expect to report our third quarter and 9 months 2025 results in early to mid-November. Have a great day.

Thank you, ladies and gentlemen. This does conclude today's conference. You may disconnect your lines at this time, and we thank you for your participation.