Welcome to the Lytham Partners Spring 2025 Conference. Today we welcome Intelligent Protection Management to our conference. The company trades under the NASDAQ ticker IPM. For today's Q&A discussion, I'm joined by Jason Katz, who is the founder, chairman, and CEO of the company. Jason, welcome to the Lytham Spring Conference. Thanks for having me. Very happy to be here today. Now, let's get some updates on what's going on at IPM. For those folks out there watching who may not be as familiar with IPM, can you provide a brief introduction to both yourself and to the company? Sure. Happy to. Yes, we recently did a transaction at the beginning of 2025 and just closed on it, renamed the company IPM, Intelligent Protection Management. That's also the ticker, and it's also the website. Very easy to remember. I've been the CEO of a public company since 2016. I've been the CEO of a company I founded since the late 1990s. We had an amazing opportunity to acquire the assets of IPM last year, and we closed on those assets just January the 2nd. As I said, we were already a Nasdaq company, but this is a completely new area for us, which is cybersecurity and managed cloud hosting. Got it. You obviously talked about doing the acquisition. You bought the asset from NewtekOne. Can you talk a little bit about why a solid business that NewtekOne had, which was called NTS, was for sale in the first place? What does the transaction bring to the table for you? Sure. You need a little bit of background for all this. Our prior business, we were app developers, and that's what I did on the internet for 25 years. The company was called Paltalk. Software had been downloaded over 300 million times. It was video conferencing software. I managed to get that uplisted to the Nasdaq in 2021. Very positive balance sheet, no debt. The actual core business was shrinking. I was on the hunt for a big acquisition for a couple of years. I came across the fact that NewtekOne, as you said, was divesting what was then called NTS, Newtek Technology Solutions, which we've now renamed IPM. It was a great opportunity for us. It was two and a half times the revenue of our existing business. I could keep the existing Nasdaq business. I could keep all of our cash on board. I could keep our patent portfolio. We, in fact, kept one small software title called ManyCam. We thought there were great synergies. We thought that the acquisition was extremely well priced. By the way, the price was 4 million shares of IPM and $4 million, which is what we paid to NewtekOne. The reason it was for sale was because NewtekOne, which has been in business for 20 plus years as well, was a business lender for its history. They became a bank. They acquired a bank, and they thought that that was the right direction to go for them. As part of that acquisition, the Federal Reserve, which regulates banks, said, "You have to divest your technology arm," which is what this was, Newtek Technology Solutions slash IPM. It powered all of the $300 million-plus of revenue that runs through NewtekOne. Since they had to divest the asset, they were very concerned about who they divested it to, since it is the lifeblood of their organization. If it does not work, then nothing works at NewtekOne. I have known the CEO of NewtekOne for more than 25 years. His name is Barry Sloane. He was comfortable with me. I was comfortable with him. He remains not only the largest customer of IPM, but also the largest shareholder. As I said, he got 4 million shares of preferred stock in the transaction, which don't t trade and are convertible into common at their option, but they like the investment. That is one of the reasons they wanted to just hold the shares. Got it. While we're on this topic, maybe we could dive into it a little bit more because, as I understand it, Newtek, besides being a major customer and a major shareholder slash board member, is also a lender to you and also is referring business to you for business development purposes. Can you talk a little bit more about the other facets of the relationship? Sure. I mean, that was honestly a great part of this transaction as well. Because NewtekOne owns 4 million shares of stock, they're very, very concerned with where this business goes. That is a great partnership to have. As you alluded to, they also have a referral agreement with us. In fact, the referral arrangement works both ways. We refer customers to them. They refer customers to us. Of course, we get paid some revenue share or profit share, depending on what kind of customer it is. It is great to have a large business like NewtekOne as not only a shareholder, but a partner referring business to us. Also, we have, and I do not think I mentioned it, as of the end of the first quarter, which just came out, $9.7 million of cash on our balance sheet and no debt. We were not in need of any money. On the other hand, since we have a good partner in NewtekOne, we decided to just create a credit line, money on deposit, essentially, and we pay 2% over what the borrowing cost is. The idea was there, if we ever need the money, it is just there secured by money that we already have in the bank and we are earning interest on. Yeah, the relationship is a good one. We anticipate that they will continue to refer customers into us and help us grow. That's great. I guess let's move on to the actual company, which was NTS, now IPM. They provide managed technology services and solutions. In, I guess, layman's terms, can you discuss what exactly providing managed technology solutions means? Sure. Yeah. It's largely just for everybody's very familiar with Amazon Web Services or Google Hosting or Microsoft's version is Azure. Oracle's now in the business, also OCI, they call themselves. Those web hosting businesses are growing very rapidly. Lots of competition there. In fact, my old app business, Paltalk, we hosted first at AWS, and then we later hosted at Oracle because there was such a dogfight in the industry. They were offering a very good deal to move over. We were a technology company. We were able to run our own technology in the cloud. I would say just about every small or medium business can't really do that. They don't have the internal resources to do it. That's why we're a managed service provider. Our value proposition is we'll take care of all the technology. We'll take care of all the connectivity. We'll make sure you don't get hacked, you don't get phished, you don't get malwared, and you just run your business. That is the value add for us. We have our own cloud environment and two different data centers. We also do some hosting in the public cloud, depending on what the customer wants. That's our big focus. We also have a big, there are several verticals that are important, but banks particularly are an important one, financial institutions. You might ask why that is. The reason is because it's regulated. It's regulated by something called the FFIEC, which is the Federal Financial Institutions Examination Council. We are certified as a technology service provider by that entity. That's important because if you're a bank, if you're a financial institution, and you decide to enlist the help of a technology provider that's not FFIEC approved, you're going to have a lot more liability if there's a problem. We think that's a real advantage for us, particularly in the financial services vertical. We also have other verticals that are important, like healthcare, law firms, accounting firms. The idea is with where the world has gone, you have to secure everybody's connectivity wherever they are. People work from all kinds of places now. By the way, that includes phone endpoints too, which are important portals into everybody's business. If you don't secure them, you're opening up your business to potential issues. When you say phones, you mean the actual handsets that every employee carries around with them and does business on? I do. I think that's a huge push here. I think it's very underappreciated in the world. Again, this may seem a bit far out of our area of expertise, but as I explained, it's actually a perfect fit. We ran data centers for 20 years. The people who came over in this transaction with me are very familiar. We ended up moving everything to the cloud, I think, in 2016 or 2017. It's an area we were familiar with for our own purposes and our own app business. There are some thousands of customers at IPM, and their safety and security is paramount to us. I think that market is only going to grow. Got it. So just expounding on that, you've talked about targeting folks in the financial services industry and healthcare, legal services, et c. Can you talk about what size companies would be your particular focus? And how do you think about your value add for those kind of companies? Again, it's small, medium business, I would say. You could have larger businesses, I would say, tend to have larger IT staffs in-house. They are able to take care of their own IT for the most part. If you're not a very large business, let's just say a public company, for example, then you need help. You need help with every aspect of what you do, from connectivity to backup and restore, because the data is incredibly important, to the cybersecurity, to the availability of all the programs the employees use. It runs the gamut. That is our value add. We have a 24/7 network operations center, and people are staffed there all the time. We want to make sure that we're proactive, not reactive. You don't want to react to a breach. You don't want to have a breach. That is the value add that we would add. If you go to an Amazon, there is no one there to help. I analogize it to walking into a Home Depot. I could die before anyone ever helped me in a Home Depot. That is what it is like. You provide not only all the bells and whistles, but the handholding and for the folks who really don't have the wherewithal to provide these kinds of services for themselves. Wherewithal and/or expertise. Even if they do have some wherewithal, they do not have the people. Again, this is not me. It is a technology company that has been around for 20-plus years. There are many people at this company that have been here a very long time, and they are super expert in what they do. Got it. You've talked a little about growing the business, about referrals coming in from Newtek. Besides organic growth, do you think a little bit about acquisitions, or is there a place for acquisitions here? If so, what might they look like in terms of size, geography, valuation, et c.? Yeah. I mean, there are a bunch of different ways to grow the business. As you said, this was a subsidiary of a larger business. I do not think it was particularly focused on growing before. Now we are. Therefore, there was no marketing at all before we acquired the business. That is a huge focus for us. Now, we rebranded the company from NTS to IPM. I was particularly attracted to the IPM name because Intelligent Protection Management, I think, is a great name. The fact that we have a three-letter symbol and also the website is IPM, it is just very easy to understand. It is brand new. Even for the customers who we have, there was a little bit of a transition. We focused a lot on making sure that every customer understood what the transition was, that the people were not changing, that the technology was not changing, and we just changed the name. The first thing is to evangelize the company. The second thing is there was no marketing of any kind. As an internet app developer, we were very good at internet marketing, PPC via Google, Facebook, anybody else. In this business, it is a different audience. It is not a regular consumer that is your target. We are experimenting with different ways to market, also email marketing in a regimented way, using a good CRM system. We have a large database of current and prior customers as well. The last thing is acquiring other businesses, as you said. That is not even the last thing. The last thing is actually the referral agreements and partnerships. We can partner with lots of different companies that have different technologies that might be additive to us. We have a lot of customers. In a lot of these cases, the solutions may be out there, but they do not have the customers. There is a natural fit. The last part, and I know I am long-winded on this answer, is the service provider, managed service provider businesses tended to be very local. The reason for that, if you are in Westchester, you might hire somebody in Westchester. Why is that? Because you want people to be able to be in your office to help you do whatever you need to do. We can put people on the ground in two hours anywhere in the country. That is a huge, huge advantage. By having a public company, by having a large established infrastructure, by having significant capacity, excess capacity, both in space, bandwidth, and power in those facilities, we think that we can acquire and roll up some of those smaller businesses at attractive sort of multiples and then leverage that on top of the public company. We've started looking at that. We will do it. We have a public company. The power of having a public equity is huge if you can get a reasonable multiple on your business. Got it. Thank you. That's very helpful. Obviously, given the acquisition of NTS and the divestiture of the legacy products, there are a lot of moving parts here. For any interested investor, what's the best place to start to look to understand your business? I think the best place is to look at the first quarter, which just came out just a couple of weeks ago. You have fresh numbers. As I said, we closed on January the 2nd. The first numbers that this company has ever produced as a public company were the ones that we just released. There were some financials for IPM that were in our proxy, which was we were called Paltalk previously, PALT. If somebody really wanted to dive in, they could go look at some of that proxy material. I think it's difficult to really decipher. Much better to look at the numbers now. We reported a small EBITDA loss and, exed some one-time expenses that were still deal-related, close to break-even. We also had a large amount of cash flow, about $1.7 million in the First Q uarter positive. It was, I think, established really a baseline for what we were doing. I think that's probably the best place to look. Got it. You mentioned at the top of our discussion some of your intellectual property. And you have a patent portfolio, or as I understand it, you both license out and defend those patents. Can you talk about the approximate $65 million judgment that IPM has won against Cisco and its current status and how long the legal process might take to resolve here? I've had a long history of IP. At one point, we had, I think, as many as 28 issued patents. I grew that from four patents that I acquired back in 2001. At that time, we also acquired eight pending patents, so applications. Then we filed many on our own. We filed some continuations. We acquired other businesses. The important aspects of that really are that I have licensed two of those patents to Microsoft, Sony, and Activision Blizzard in the past. Those patents have since expired anyway, so they're not relevant here. You mentioned the patent that was involved with the Cisco case. Cisco, we alleged, was infringing a patent, actually, for video conferencing via Webex. Cisco bought Webex in 2007. Very interesting case. In fact, in this very video conference, we're all on the internet, and we're using our computers to participate in the video conference. Our patent covered this case where you add a plain old telephone, where somebody dials in via a phone number. And that's obviously a pretty pervasive feature that is used and was used even more, probably a little less than it used to be. Anyway, we alleged that Webex was infringing that. We brought that case in 2021. Last summer, August 2024, we went to trial in the Western District of Texas, and the jury unanimously awarded us $65.7 million for the infringement of that patent. That jury verdict was then affirmed by the judge. Then he issues a judgment in that amount, which he did. Then post that, there were some post-trial motions which were filed, which mostly have been decided. The judge decided all of them, but one. They're still waiting on one. Notwithstanding that Cisco has appealed, and that goes to the Court of Appeals in Washington, DC, I believe. It will take some time, but we had a unanimous jury award us $65.7 million, and the judge affirmed it. I think it's a pretty great validation of our IP. Again, if you look at the market cap of the company, it's not reflected really anywhere that we have $9.7 million in cash. We have that jury verdict. We have a business that's posted a quarter of, I think, $5.6 million in the First Quarter as well. By the way, I didn't even mention, we have an earnout on the assets we sold that runs for three and a half years. It's a cash sales-based earnout. Over certain thresholds, we get a percentage, 30% over $7 million a year of revenue and 40% over $8.5 million a year for three and a half years. There is a whole bunch of potential revenue streams here that really the public needs to be educated about. That is my job. Got it. I should just clarify. I think publicly you've stated that you don't expect if that $65 million should stand, that you're not going to be getting all of that $65 million by any means. That's correct. Yes. Yeah, you're right. We're on record. These litigations are expensive, so very expensive, in fact. We've said that ultimately, whatever we get, we expect to get no more than one-third of that, but that still would be $20-something million. We haven't mentioned the fact that there's potential interest, both pre-judgment and post-judgment interest on these numbers too, which the judge hasn't ruled on yet. It could be significantly more than the $65.7 million too. You know what? At the end of the day, it's just an asset. We do have other patents as well. We have a great business that produces a lot of cash flow. We're a Nasdaq company, and we have $9.7 million of cash. I kind of like the scenario. You didn't ask me this, but I always volunteer it. I own a significant piece of the business as well. I've never sold a share in it. The way I make money is if the stock does well, which is the same as the stockholders. It's always good when that's aligned. 100%. I should just ask at this point in time, I know we've covered a lot of stuff, and we're getting close to the end. Are there any other topics that we should talk about before we start to wrap up? I think that's really it. It's an interesting environment for us with what's going on. I've always been relatively conservative in what I do. I think I would challenge anybody to come up with many companies that started in the late 1990s in the internet and are still here. The ones that are are the household names. Everybody else has long since gone. We were able, I was able to take an idea and turn it into a business over 25 years. I was able to get it to a public company state and then to uplist that to the Nasdaq with a significant cash balance on hand. I'm in this for the long haul. I love the area. It wasn't really where I thought we would go. I thought we would stay really in internet app development, ad tech, something like that. This opportunity was so great for us. We had great expertise in it as well. I thought the necessity of cybersecurity, particularly, is one that is only growing. Everyone knows that. You see a breach or a hack every day. I think we can offer that capability and comfort. I think it is a very large market that has enormous opportunity to grow. That is why we were so all in on making the acquisition. Certainly, congratulations on that acquisition. Jason, thank you again for joining us at the Lytham Spring 2025 Conference. I'm so happy to be here. My job's only just begun. I'm going to continue to be out there. I appreciate everybody listening in today. Our pleasure. I should also thank all the folks who are watching the Lytham conference. If, by the way, you have any questions or would like to schedule a meeting with IPM, please send me an email at weiss@ Lytham partners.com. partners.com. If you'd like to learn more about Lytham Partners, you can visit our website at l ytham partners.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. Jason, thank you. Thank you.