INTELLIGENT PROTECTION MANAGEMENT CORP. Q4 FY2024 earnings call

• Completed acquisition of Newtek Technology Solutions (NTS) and divested Paltalk, Camfrog, and Vumber applications in January 2025, moving into cloud infrastructure and cybersecurity sectors.
• Bolstered value in 2024 by successfully defending intellectual property; eligible for earn-out payments from Meteor Mobile based on Paltalk, Camfrog, and Vumber revenue.
• Near-term business objectives include integrating IT-related solutions, offering more cameras to new customers, optimizing cross-selling, exploring M&A, and defending intellectual property.
• Jury awarded $65.7 million in patent infringement lawsuit against Cisco, but estimated to receive no more than one-third of gross proceeds after litigation expenses.

For the three months ended December 31, 2024: Revenue from continuing operations increased 9.1% to $0.3 million from nearly $0.3 million due to increased sales from ManyCam. Revenue from discontinued operations was $1.9 million, down 21% from $2.7 million. Net loss from continuing operations increased 142% to $1.4 million. Loss from discontinued operations increased 1,449% to $4.1 million. Net loss totaled $5.5 million, up 1,840%. Adjusted EBITDA loss was $1.5 million, up 594%. For the year ended December 31, 2024: Revenue from continuing operations increased 14% to $1.1 million from $1 million. Revenue from discontinued operations was $8 million, down 17% from $10 million. Net loss from continuing operations increased 59% to $4.3 million. Loss from discontinued operations increased 357% to $4.2 million. Net loss totaled $8.4 million, up 690%. Adjusted EBITDA loss was $4.4 million, up 338%.

• Enthusiastic about growth prospects in cloud infrastructure and cybersecurity sectors.
• Referral arrangement with NewtekOne has potential to help find new customers.
• Anticipate ample M&A opportunities to scale growth.
• Look forward to reporting first full quarter as IPM in early to mid-May.

• Uncertainty in receiving full proceeds from patent litigation award due to potential post-trial proceedings and appeals.
• Challenges in cybersecurity and cloud infrastructure business include remaining proactive and responsive to evolving cyber threats, especially with growth of AI and sophisticated cyber risks, and ensuring secure, compliant, and resilient technology for highly regulated industries like banking and finance.

Q: Should we expect to see additional patent infringement lawsuits filed by you?

A: Intellectual property is a very important asset for the company, and we continuously review our patent portfolio in order to protect our intellectual property.

Q: Since you've now owned cybersecurity and cloud infrastructure business for more than two months, are you more or less enthusiastic about its growth prospects.

A: I remain very enthusiastic about the managed hosted cloud and managed cybersecurity businesses and its prospects for growth. Cybersecurity is essential for all businesses, large and small, and truly a necessity in today's world.

Q: What are the biggest challenges with the cybersecurity and cloud infrastructure business?

A: Well, the cybersecurity and cloud infrastructure business, one of our main priorities is to deliver secure compliant and resilient technology to customers operating in highly regulated industries such as banking and finance. With the growth of AI and increased sophistication of cyber related threats, one of our greatest challenges is remaining proactive and responsive in fortifying our infrastructure against the spectrum of potential risks that are continuously evolving.

Q: Do you disclose any significant customers by name? And can you be more specific about what you do for your customers, narrowing it down within cybersecurity or cloud infrastructure?

A: As mentioned above, NewtekOne is currently our largest customer, we serve a diverse customer base across various industries, including, among others, finance, legal, health care and manufacturing. As far as our offered services, we provide managed IT security services, professional services, procurement services, secure private cloud hosting, managed backup and disaster recovery and web hosting, each of which is discussed in greater detail in our annual report.

Q: Are there opportunities to further expand and grow with existing customers?

A: We think there are numerous opportunities to expand and grow with both existing and new customers. In addition to managing client relationship, our sales force is focused on expanding the number of solutions our customers purchase from us by introducing them to additional solutions. We believe our proactive high touch service model ensures long-term client relationships and sustained competitive advantage in a rapidly evolving market. Additionally, in the future, we plan to make arrangements with third parties to incorporate AI features into our secure private cloud offerings, which we believe will have the potential to expand our service offerings with our existing customers.

Q: Can you discuss your product suite in a little more detail?

A: Well, sure. IPM provides managed hosting, managed cybersecurity, backup and disaster recovery, procurement and web hosting. The global managed services market is projected to grow to over $875 billion by 2032 according to Forbes Business Insights, which we believe creates an enormous opportunity. We differentiate ourselves with our expert IT, staff and technical capability, including our 24/7 NOK. There are myriad tools and software available for all of these functions, but they are only as good as the people running them. Our goal is to provide the most reliable secure environment possible for our customers.