Hello everyone, and thank you for joining us here at the 2025 Lytham Partners Fall Investor Conference. My name is Joe Diaz. I'm a Managing Partner at Lithium Partners. Today I'll be moderating a Q&A discussion with Jason Katz, CEO of Intelligent Protection Management Corporation, better known as IPM. The company trades on the NASDAQ, also under the ticker symbol IPM. Let's get started. Jason, thanks for joining us today. Happy to be here. Thanks for having me. For those in the audience that are not familiar with Intelligent Protection Management Corporation, please give us a brief introduction to the company, your technologies, and the markets in which you operate. Sure, I'd be happy to. We're a managed service provider and a managed security service provider, and we do that mostly in private cloud. Just things, small, medium business. We specialize in finance-related companies. Our largest customer is a bank called Newtek Bank, and we'll get into that more later. Because of that, we have special certifications from the OCC and other government organizations to be able to provide technology services to financial institutions. We're finding many, many clients these days don't really want to be in the public cloud as much. They're happy to have a private cloud and a private-hosted environment where we take care of everything. Is it more affordable for those companies to do it private as opposed to a public cloud? That's a good question. It really depends on exactly what we're doing for them. We'll do just their hosting in general, we'll do their security as well, and we'll do their backup and disaster recovery. They can do one or all of those things with us. I would say, having been a customer of Amazon once, you really have to have a lot of internal expertise to manage an Amazon instance. Our goal is to take that burden away from customers and to do that with 24/7 SOC and monitoring and response team, where somebody will answer the phone any time of the day, seven days a week, in English, in America. Got it. Now, you mentioned a number of these services. Who are generally your customers? You said small to mid-size. Give us a sense of who your customers are and what are you doing for them exactly. Right. Let me just take the example of Newtek Bank. That's a public company. It trades under the symbol NEWT. It's a $300 million market cap company. We will get into it. I know you're going to ask me about it, but for now, I'll just say that they do five or six different things, including banking. They do insurance, they do payment processing, they do payroll services, they do insurance. All of those operations and all 579 of their employees run through us. Every bit of that $300 million of business runs through us. We are the backbone for everything. When an employee needs a new computer, that goes through us. We host their entire server environment. We host all of their payment environment. Everything runs through us. We are sort of the lifeblood for them, and it's a great example. If we can do that for a $300 million public company, you know, we can do that certainly for lots of other companies. We specialize in, again, other financial, private equity, accounting firms, law firms, registered investment advisors. There's a lot of business around people working remotely. To do that in a secure way, you need a real technology provider to help you. IPM essentially became an independent publicly traded company on January 2nd of this year, by and large. So you're approximately two and a half quarters into this in terms of being a public company. What were you prior to becoming a public company? I know you were involved with Newtek. How did that work? Right. That's a bit of a discussion. I've been in the internet industry for over 25 years. I developed an app business. It did video conferencing, coincidentally, which is what we're doing here. I was a pioneer in that business. I alluded earlier to the fact that I was an Amazon customer. We used to have data centers, and then we eventually migrated to the cloud for our purposes. We were a technology company. That was easy for us to do. As I said earlier, I think that's harder for small-medium business to do because they just don't have the personnel to manage that kind of infrastructure. I think we're finding a better choice for them to outsource it to us. I had a long history in the app business. I was able to make that public in 2016 and uplist the company to the NASDAQ in 2021, which was a very proud moment. That company was called Paltalk. Paltalk was the actual app. I got the business in PalTalk, which had been declining for some years. We had a very substantial balance sheet, lots of cash, no debt on the balance sheet, and a NASDAQ listing. We were looking for a good acquisition, and I became aware that IPM was being sold by Newtek. It used to be called Newtek Technology Solutions. It was their own homegrown subsidiary that just supported them. They had to sell the subsidiary because they became a bank, and they were ordered to do so by the Federal Reserve. That became a great opportunity for us. It was a little bit outside of what I thought I was going to do, but we thought it was such a great business with such great growth potential. It had been around for 15 or 20 years, basically with the mission to serve its parent, which was NewtekOne. We were able to buy the company for what we thought was a great value. We paid 4 million shares of then Paltalk stock, $4 million as well on top of that, to buy a business that, you know, you can think of it around $6 million a quarter, about a $25 million annual revenue business. We did that for only 30% of our equity. We also had wonderful experience inside the data center, having hosted as many servers as we had for the old business. That was what you alluded to. We closed that transaction January 2nd. We bought this business. It was called Newtek Technology Solutions. We renamed it IPM. Symbol is IPM. Website is IPM. I thought that was great. Intelligent Protection Management is also, I think, a very relevant name. Also as part of that, we sold off the old app assets. We got a small amount of money up front with a three and a half year earnout. It's a pretty interesting company with substantial cash on the balance sheet, $8 or $9 million as of the last quarter, and no debt. The market cap, now it's up a bit. You'll ask me about that, because we recently announced an AI service introduction for our customers. Anyway, the market cap is, you know, rather reasonable, considering the NASDAQ listing, the cash, and the business. Interesting. Again, given that these are early days in terms of you being an independent public company, from an operational standpoint, how are things shaping up in these first two and a half quarters? What's your sense of how the business is beginning to come together? It's a great question. I mean, there are a bunch of businesses under our umbrella, as I said before. Those were businesses that were already there. We've really focused and honed in on the, you know, managed security business. We think that there's a gaping hole in small and medium business, even larger business. You read about breaches and ransomwares every day. We specialize in securing an organization. It's a pretty seamless transition for them. Some of them may have no security provider, or maybe they have a firewall, but that's grossly, grossly insufficient. We have layers and layers of protection in our solution. They don't have to do anything except give us access to their environment, essentially. Then we become, you know, the front end for them. We monitor what's going on. We have a 24/7 SOC. I'm really, really bullish on that. Job one, when we bought the company, was, okay, make sure we have an orderly transition. Make sure all of the customers understand we did rename the company. You know, you start sending checks all the time to one bank account or entity. You want to make sure that you don't lose anybody, and we didn't lose anybody, and that's a great thing. You want to focus on trying to grow the business. As a subsidiary of NewtekOne, this business really wasn't that interested in growing. We are, and we've done a number of things to help us grow going forward. Now, piggybacking off what you just said about security and things of that nature, you added a service called Aura to your suite of services. Aura is an AI-powered online safety solution for individuals and families. Why did you add them? What's the motivation for adding Aura to the IPM service suite? Yeah, so it was very apparent to us that, you know, if you're talking about a Fortune 500, an employee might have a company phone. When you're talking about small and medium business, most everybody just has their regular phone, their personal phone, but they use that for business, and that is a big, big security hazard. The point of Aura, and it works on the phone, is to secure that employee's phone because if they happen to click something and they get their phone stolen, essentially, there's instant access to the network for wherever they're working. That was what we launched with Aura. We've installed it through all of our personnel. Of course, Newtek being the largest customer here, we always go to them first, and they're looking at it. I believe they'll do it, but we think our whole base will do it over time. We have thousands and thousands of endpoints, you know, hundreds of customers. Going forward, we will start to release the exact number of customers so people can understand net new ads and that sort of thing, total endpoints under management. You can do a multiplication. If you have a customer, it may be 10, 20, 50, 100 employees. Lots and lots of endpoints we're securing, which may be a computer, it may be a phone. We think it's a great, great solution, and we think everybody should use it. Yeah, in that regard, some of the largest data breaches in recent years have actually gone through personal iPhones or Android phones that people are working with for the benefit of their companies from home. I think that's why Aura is important to you. Yeah, and the phishing and smishing, you know, even inside our company, we get all kinds of messages that could come from me or look like they come from me, but, you know, we're all terribly aware of this, you know, and we make sure we don't click on anything. We also do internal security training for employees, which I think is a good idea for every company to do. I guess when you circle back and you think about it, small medium business just doesn't have the cycles or the personnel to do any of this. This is what we do, and that's why that's our pitch. They should let us do it. We'll secure the business, and they should just take care of growing their business. That's resonated pretty well. I had also talked about the kinds of things we've done to start to grow the business. We have a number of different referral programs. That's important. Newtek refers business to us. We announced last quarter a company called IT Ally. They specialize in private equity consulting, essentially. They send us lots of business. We have an employee referral program. We have a customer referral program. Our point is everyone we touch should be referring business to us, and they'll get paid if they do. That's beginning to bear fruit. In addition, there'd been basically no outreach in marketing to anybody. We have significant databases with lots of messaging that we're testing that are generating real leads in real time, that we're excited about. Also, you know, I'm an internet guy for a long time, so this is a new domain, and when I say that, I mean IPM, so it has no domain history. From an SEO standpoint and a pay-per-click standpoint, you have to build all that up. Those are the kinds of things we're doing, and we're excited about it. You and your team have been working together for a decent period of time, and I think that connectivity and understanding of the game plan and the passion that goes into this, tell us about your management team and the history of your team in terms of you guys working together. Yeah, so I mean, first I would just say that Newtek Technology Solutions, which is now IPM, had 50, I think 51 employees when we bought it. They had been together for a long time as well. Our President's name is Jared Mills. He's a technologist for 30 years. He's a super expert, subject matter expert in the industry. He leads all the technology at the company, and we're fortunate to have him. He's also worked with most of his senior team for 10, 15, 20 years. When I looked at this business originally before I bought it, I met with all of them, and I have significant history in the industry too, and I was extremely impressed. We didn't get to it yet, but we have two data centers where we host our customers. Of course, we'll also host in the cloud if the customer wants us to host in the cloud. We're finding lots of companies would prefer to have their own private cloud environment. Maybe they feel it's more secure. They can also have a shared cloud environment. We do all of that in our data centers. We have a significant capacity to host more customers without buying any new equipment, both in terms of the space, the power, and the computing equipment, which is already in place. Those are great assets that we have. You add to that the fact that I've been in the industry a long time. My COO, whose name is Adam Zalko, has been working for me for 17 years, and he came over when we did the acquisition. My CFO has two other public company experience where she was the CFO. Really strong team. It was a merger between the old Paltalk team and the Newtek Technology Solutions team. In this case, probably one plus one equals three, a much better situation going forward. We only have, we have two quarters in the books. We're excited to report the third quarter. I've said on the record a number of times, we improved quarter over quarter. We grew the revenue, and we had a small EBITDA loss. Loss went down. Our goal is to continue to make that go down to get to EBITDA profitability by the end of the year and to continue growing the revenue. Earlier, you mentioned your philosophy of customer service, single point of contact, that sort of thing. It sounds like a real differentiator for the company. Tell us what the philosophy is and how does that work. It's super important. I'm not going to mention who with, but, you know, one of our legacy softwares that I did keep was hosted elsewhere. We're in the process of moving it to our own environment, but it was hosted elsewhere at one of the public cloud companies. They literally turned it off. You know, we called and we emailed and we got run around and they turned it off for no reason. The account was current. Nobody could figure it out. It took about eight hours to come back online. That is exactly the problem we're trying to solve. That will never happen if we have a customer hosted by us. You have a person to call 24/7 who will answer the phone and take care of the issue. Really, that's the biggest recommendation for what we're doing. Everybody's business is too important to get run around like we got run around. It was a clarion call to me. You know, we have the hosting environment. We only have limited cycles. We're busy. I said, we can't host in that provider anymore. It's just insane. We're finding that message resonates well. People want to talk to somebody who speaks English and can communicate well and can escalate the issue if it's a problem and fix it. That's why our retention is very, very high with our customers. Nobody wants to ever leave if everything's working. You recently announced a reseller agreement with MindsDB, which is a leading open-source AI platform. What does this mean for IPM? What are you looking to accomplish with your clients by offering the MindsDB AI platform? Right. It's a super, a super question and something we're really excited about. The issue for us was we have all these customers who host with us. Obviously, AI is blowing up and a major theme for customers, for the market. The question we had to answer was how do we offer relevant AI services to our customers? It so happens that one of our board members who joined the board in January when we closed the transaction is employed at MindsDB. We immediately started a conversation about that months ago so we could learn about it ourselves. If we liked it, you know, make a partnership with them and then roll it out to our customers. What it does that is really amazingly good, as a CEO, you know, I have all kinds of questions all the time. Who are my top 10 customers by revenue in 2024? Sounds easy, right? It should be easy to figure out. The truth is most companies have databases that are disparate, different databases, different kinds of databases. The data is everywhere. You're writing, you know, all kinds of reporting portals. It's painful. We have that too. Everybody has it. What this company did, MindsDB, was they solved that problem essentially by saying we don't care where the data is, we don't care what the database is. Our tool will look at all the data, wherever it is, and our tool will allow you in an English language query, sort of like all the other query tools out there, like a Google search essentially, to ask the question, and it'll interact with you, and it'll go get the data. It's a great solution. It does it at a very, very high success rate. Our theory was, let's try that ourselves. Let's see if it works for us. Let's see if it works for Newtek because Newtek is our biggest customer. Let's roll it out to every other customer we have. We're very excited about it because that was just an example. I said revenue by customer, you know, but you could ask any question that's databased, and it will come up with real answers. If you know, you can then interact with it and refine as you go. They're a private company. It's venture funded. It's been around a number of years. Very impressive technology. From a marketing standpoint, given that you're just operational two and a half quarters, what are the metrics that you're looking for on a quarterly or annual basis that says to you we're moving in the right direction in terms of executing the strategic business plan? Right. I think the revenue has to grow every quarter. I mean, if we're in this business and we're competing, and you've seen some of the public cloud hosters, you know, they grow at a pretty good clip. I think we have to prove that we can grow as well. Number one. Number two, we have to get to profitability. The underlying company, NTS, of course, is profitable. We bought it as a public company, and there are very significant public company expenses, both with accounting and with attorneys and with insurance and everything else, NASDAQ. There are fees, but once you overcome those, you really drop everything to the bottom line after that. I want the revenue to go up. I want profitability. I want margins to go up. Gross margin is actually pretty good in our business. It's around 50%, but the net margin has to improve. Those are, you know, that and probably customer retention and growth. Looking at the total number of devices under management, growing that every quarter as well. From our brief conversation here, IPM is a developing, differentiated company with some strong advantages in certain areas. What's your message to the investment community? What should they be looking at? I think we're sort of around a $30 million market cap, with $25 million of sales, so about one-time sales. We have $8 million-$9 million on the balance sheet, and no debt. We have a NASDAQ company. We also didn't mention we have a number of patents. Some of those patents have been licensed to large companies through the years, like Microsoft, Sony, and Activision Blizzard. We also recently, last summer, got a patent infringement judgment against Cisco WebEx for $65.7 million. We haven't even mentioned that. We've been talking for a half an hour. That's just out there. It just goes to the bottom line. Ultimately, of course, there's appeals, and it could take a long time, and we may never receive any money there. We've also said we'll get no more than a third of that money ultimately, but on a market cap of $30 million with all those assets, it's a nice bonus. We're a very solid company financially, lots of cash on the balance sheet in a burgeoning industry, and I think we know how to grow this business, and that's exciting. Fantastic. That's our allotted time for today. Thank you, Jason, and we thank you, send thanks to all of you that are watching. If you have any questions or would like to schedule a meeting with IPM, send a meeting request to IPM at lythampartners.com. If you'd like to learn more about Lytham Partners, you can visit our website at lythampartners.com or follow us on LinkedIn to stay connected about future events. We hope you all enjoy the rest of the conference and have a great day. Thanks again, Jason. Thank you so much.