Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. The following discussion and analysis should be read in conjunction with: (i) the accompanying unaudited condensed consolidated financial statements and notes thereto for the three and nine months ended September 30, 2025 and 2024, (ii) the consolidated financial statements and notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K (the "Form 10-K") filed with the Securities and Exchange Commission (the "SEC") on March 24, 2025 and (iii) the discussion under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Form 10-K. Aside from certain information as of December 31, 2024, all amounts herein are unaudited.

Forward-Looking Statements

In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See "Forward-Looking Statements." Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under "Item 1A. Risk Factors" in Part II of this report and "Item 1A. Risk Factors" in the Form 10-K.

Overview

We provide a comprehensive range of IT-related services, including dedicated server hosting, cloud hosting, data storage, managed security, backup and disaster recovery and other related services including consulting and implementing technology solutions for large enterprise and commercial clients across the United States as well as small-and-medium sized businesses. We continue to sell our ManyCam software, which is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools.

We have an over 20-year history of technology innovation and hold eight patents.

Our IT and Cloud-Based Solutions

We sell and provide a range of services across five core areas, each as further described below: managed IT security services, professional services, procurement services, secure private cloud hosting, managed backup and disaster recovery and web hosting.

Managed IT Security Services

Our managed IT security services provide clients with ongoing management and support of their IT systems and services under a subscription or contract-based model. Our managed IT security services include proactive monitoring, regular system maintenance, comprehensive cybersecurity management, data backup and disaster recovery, as well as help desk support for users.

Professional Services

Our professional services include the design and implementation of a wide range of IT products and services, such as cybersecurity, software planning, IT infrastructure, data center design and configuration, designing and implementing on-premise, hybrid or cloud computing solutions, website development, developing or integrating systems and software and IT cost management.

Procurement Services

We offer two types of procurement services to our customers. We can either: (i) obtain software and hardware products on behalf of our customers, in which case our vendors drop ship the products to our end customer, or (ii) obtain hardware or software on behalf of our end customers and perform additional configuration and/or add additional inputs to the products before the products are shipped to our customer. In the instance where we sell hardware and software products as a solution bundled with services, we typically obtain the products or software from our vendors, add the additional inputs/configuration as detailed in the customer contract and then ship the products to the end customer.

Secure Private Cloud Hosting

Our secure private cloud hosting offerings include a digital infrastructure which consists of dedicated and fully isolated cloud environments designed to deliver security, control and compliance for the business-critical applications and client data. We operate a secure private cloud from private suites in completely isolated areas that are leased within two Tier 3 data center facilities located in Phoenix, Arizona and Edison, New Jersey (the "Data Centers"), pursuant to license agreements that extend until 2027 and 2026, respectively. Although we do not own or operate the Data Centers, we aim to use the high-level operations and standards provided by the Data Centers through our license agreements to provide our customers with secure and flexible cloud services.

We leverage state-of-the-art security measures, including data encryption, network segmentation, advanced firewalls, multi-factor authentication and continuous monitoring to safeguard against unauthorized access and cyber threats. We believe our secure private cloud hosting provides our clients with strong availability, data integrity and reliable performance, while meeting stringent compliance requirements. Our secure private cloud hosting solutions are backed by 24/7 support from our expert team, with the goal of delivering secure, flexible and resilient infrastructure tailored to each client's unique business needs. In the future, we plan to make arrangements with third parties to incorporate AI features into our secure private cloud offerings.

Managed Backup and Disaster Recovery

Our managed backup and disaster recovery solutions provide comprehensive protection for customers' critical data and IT infrastructure, which is intended to ensure business continuity and rapid recovery in the event of data loss, cyberattacks or system failures. We utilize advanced backup technologies with automated, regular data backups, off-site replication and secure storage to prevent data corruption or loss.

Web Hosting

Our web hosting services consist of several advanced security measures, including Secure Sockets Layer and Transport Layer Security ("SSL/TLS") encryption, firewalls, distributed denial-of-service ("DDoS") protection, malware scanning and secure server configurations. Our web hosting services include features such as regular data backups, web application firewalls, strict access control policies and continuous monitoring and expert support, all of which are intended to ensure our customers' compliance with industry standards and provide a reliable and secure environment for our customers' online presence. Revenue from web hosting is included with managed information technology revenue in the statement of operations.

Our ManyCam Software Product

We also support our ManyCam software, which is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools. The ManyCam software provides multiple camera feeds, backgrounds and effects while also enabling users to share presentations, spreadsheets and documents. We are integrating ManyCam as an offering for our new customers and seek to optimize our cross-selling efforts of ManyCam with our other technology solutions.

Recent Developments

The Acquisition

On January 2, 2025 (the "Closing Date"), we completed the acquisition of Newtek Technology Solutions, Inc., a New York corporation ("NTS"), pursuant to that certain Agreement and Plan of Merger (the "Acquisition Agreement"), by and among us, PALT Merger Sub 1, Inc., a New York corporation and our direct and wholly owned subsidiary ("First Merger Sub"), PALT Merger Sub 2, LLC, a Delaware limited liability company and our direct and wholly owned subsidiary ("Second Merger Sub"), NTS and NewtekOne, Inc., a Maryland corporation and the sole stockholder of NTS ("Newtek"). Pursuant to the terms of the Acquisition Agreement, on the Closing Date: (i) NTS merged with and into First Merger Sub, with NTS continuing as the surviving entity (the "Interim Surviving Entity" and such merger, the "First Step Merger"), and (ii) immediately following the consummation of the First Step Merger, the Interim Surviving Entity merged with and into Second Merger Sub (the "Second Step Merger" and, together with the First Step Merger, the "Acquisition"), with the Second Merger Sub surviving as our wholly owned subsidiary (in such capacity, the "Surviving Entity"). Following the closing of the Acquisition (the "Acquisition Closing"), we changed our name from "Paltalk, Inc." to "Intelligent Protection Management Corp."

The aggregate consideration we delivered to Newtek at the Acquisition Closing consisted of (i) $4,000,000 in cash (as adjusted pursuant to the Acquisition Agreement, the "Acquisition Closing Cash Consideration") and (ii) 4,000,000 shares of our Series A Non-Voting Common Equivalent Stock (the "Series A Preferred Stock" and such shares issued at the Acquisition Closing, the "Acquisition Closing Stock Consideration" and together with the Acquisition Closing Cash Consideration, the "Acquisition Closing Consideration"). The Series A Preferred Stock will automatically convert into one share of our common stock, par value $0.001 per share (subject to certain customary anti-dilution adjustments), upon the occurrence of certain qualifying transfers by Newtek to third parties. In addition to the Acquisition Closing Consideration, Newtek is entitled to earn-out payments under certain circumstances. For more information, see the "Liquidity and Capital Resources" section below.

The Divestiture

On the Closing Date and prior to the Acquisition Closing, we completed the sale to Meteor Mobile Holdings, Inc., a Delaware corporation ("Meteor Mobile"), of our telecommunications services provider, "Vumber", as well as our "Paltalk" and "Camfrog" applications and certain assets and liabilities related to such services provider and applications (the "Transferred Assets" and such sale, the "Divestiture" and, together with the Acquisition, the "Transactions") pursuant to that certain Asset Purchase Agreement (the "Divestiture Agreement"), by and among the us, our wholly owned subsidiaries Paltalk Holdings, Inc. ("Paltalk Holdings"), Paltalk Software, Inc., Camshare, Inc., A.V.M. Software, Inc. and Vumber, LLC (collectively, the "Sellers"), and Meteor Mobile. As a result of the Divestiture, we are no longer engaged in the business of providing video-based, live streaming, virtual camera and telecommunications software to consumers, as and to the extent such businesses were previously conducted by us pursuant to the "Vumber," "Paltalk" and "Camfrog" applications (the "Business"). In addition, prior to the Acquisition Closing, we ceased all operations of our "Tinychat" service and application.

The consideration delivered by Meteor Mobile to us at the closing of the Divestiture consisted of (i) $1,350,000 in cash and (ii) the assumption of all of the liabilities of the Sellers arising out of, or relating to, the Business or the Transferred Assets, other than certain excluded liabilities (the "Divestiture Closing Consideration"). In connection with the Divestiture, we are entitled to earn-out payments under certain circumstances. For more information, see the "Liquidity and Capital Resources" section below.

Business Loan Agreement and Credit Agreement and Revolving Promissory Note

On April 10, 2025, we, Intelligent Protection LLC, our wholly owned subsidiary ("IPM LLC"), and Newtek Bank, National Association ("Newtek Bank"), a subsidiary of Newtek, entered into that certain business loan agreement and that certain credit agreement and revolving promissory note (together, the "Loan Agreements"), which provide for a secured revolving line of credit to us and IPM LLC in the maximum amount of $1,000,000 on the terms and conditions set forth in the Loan Agreements (the "Facility"). The Loan Agreements are secured by substantially all of our assets and the assets of IMP LLC. The Facility will mature on April 10, 2026. As of the date of this Quarterly Report on Form 10-Q, no amounts were outstanding under the Facility.

Stock Repurchase Plan

On May 8, 2025, our Board of Directors (the "Board") approved a stock repurchase plan for up to $400,000 of our outstanding common stock (the "Stock Repurchase Plan"), which expires on the one-year anniversary of such date. Shares may be repurchased from time-to-time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs, and the Stock Repurchase Plan may be suspended or discontinued at any time. The actual timing, number and value of shares repurchased will be determined by a committee of the Board at its discretion and will depend on a number of factors, including the market price of our common stock, general market and economic conditions, alternative investment opportunities and other corporate considerations.

Third Quarter 2025 Operational Highlights

Operational highlights during the three and nine months ended September 30, 2025:

●

selected by Hewlett Packard Enterprise to be an accredited partner for its HPE Private Cloud AI solution;

	●	announced the initiation of a collaboration with IT Ally, a trusted business and technology services provider focused on lower middle-market private equity firms and their portfolio companies;
	●	began offering Aura to our customers, a leading AI-powered online safety solution for individuals and families, to help minimize the impact of data breaches, scams and other online threats on consumers;
	●	entered into a reseller agreement with MindsDB, a leading open-source AI platform that delivers AI analytics capabilities for complex business questions, that can operate anywhere (on-prem, VPC, serverless). We intend to also become a Starter Minds customer and integrate MindsDB's technology into our own operations for greater workflow efficiency;
	●	rolled out our "Heroes Program" in October 2025 to provide a 10% discount for all of our products and services to all existing and future customers who qualify as Military, First Responder, Healthcare, Teachers or Veterinary business owners;
	●	for the three months ended September 30, 2025 revenue totaled $6.2 million compared to $0.3 million for the prior year period, as the prior year revenue represented subscriptions sales from ManyCam software, our continuing operations and did not include revenue from discontinued operations. Total revenue increased by approximately 9.0% from the prior quarter;
	●	for the nine months ended September 30, 2025 revenue totaled $17.5 million compared to $0.8 million for the prior year period;

●

operating loss from continuing operations for the three months ended September 30, 2025 was $1.4 million and included $0.7 million of non-cash expense, consisting of amortization and depreciation of $0.6 million ($0.5 million of which represented amortization on newly acquired intangible assets), as well as $0.1 million of non-cash share based compensation, compared to an operating loss from continuing operations of $1.5 million for the three months ended September 30, 2024, which included subscriptions sales from ManyCam software as well as all of our general and administrative expenses, which included all professional fees and public company expenses;

●

operating loss from continuing operations for the nine months ended September 30, 2025 was $3.9 million and included $2.3 million of non-cash expense, consisting of amortization and depreciation of $2.0 million ($1.6 million of which represented amortization on newly acquired intangible assets), as well as $0.3 million of non-cash share based compensation, compared to a net loss from continuing operations of $2.1 million for the three months ended September 30, 2024, which included subscriptions sales from ManyCam software as well as all of our general and administrative expenses, which included all professional fees and public company expenses;

●

net loss for the three months ended September 30, 2025 totaled $1.1 million compared to a net loss of $1.5 million for the three months ended September 30, 2024, a decrease of 3% over the prior quarter. Net loss for the nine months ended September 30, 2025 totaled $1.3 million compared to a net loss of $2.9 million for the nine months ended September 30, 2024; net loss for the three and nine months ended September 30, 2025 included approximately $0.5 million of litigation expenses incurred in connection with the Company's Cisco ManyCam Litigation (as described and defined below). During the nine months ended September 30, 2025, the increase in net loss was offset by us recording an income tax benefit during the first quarter of 2025 of approximately $2.1 million in connection with the Transactions;

	●	Adjusted EBITDA for the three months ended September 30, 2025 was negative $0.3 million compared to negative $1.5 million for the three months ended September 30, 2024, an improvement of 82% over the prior quarter. Adjusted EBITDA for the nine months ended September 30, 2025 was negative $1.1 million compared to negative $2.9 million for the nine months ended September 30, 2024;
	●	we had cash provided by operations of $0.1 million and $1.0 million for the three and nine months ended September 30, 2025; and
	●	at September 30, 2025 we had $8.3 million of cash and cash equivalents, including $1.0 million of restricted cash, on our balance sheet and no long-term debt.

Fourth Quarter 2025 Business Objectives

For the near term, our business objectives include:

●

continuing the integration of our comprehensive range of IT-related solutions as well as introducing new partners and optimizing expenses;

●

incorporating ManyCam as an offering for our new customers and seeking to optimize our cross-selling efforts with our other technology solutions;

●

continuing to explore strategic opportunities, including, but not limited to, potential mergers or acquisitions of other assets or entities that are synergistic to our businesses; and

●

continuing to defend our intellectual property.

Sources of Revenue

Our main sources of revenue are described below. As a result of the variability of contract and service type, some of the revenue we report in each period is deferred revenue from contracts we entered into during previous periods. This may make it difficult for us to quickly increase revenue through the entry into new contracts in any period, and a decline in new or renewed contracts in any one quarter will negatively affect our revenue in future quarters. As a result, revenue generated in prior quarters may not provide a reliable indication of future results.

Managed IT Security Services

Customers pay for our managed IT security services on a subscription or contract-based model. Customers typically pay a recurring fee, which is generally based on service level agreements that define the specific services and performance metrics. The unearned portion of managed IT security services revenue is presented as deferred revenue in our consolidated balance sheets.

Professional Services

Customers are invoiced for our professional services either based on a time and materials basis or on a straight-line basis for all fixed fee arrangements. The unearned portion of professional services revenue is presented as deferred revenue in our consolidated balance sheets. We are the principal in these transactions, as we control the specified good or service before it is transferred to the customer. Additionally, we are primarily responsible for fulfillment of the order and have pricing discretion. As a result, we recognize revenue from our professional services revenue on a gross basis.

Procurement Services

Our procurement services include either (i) obtaining software and hardware products on behalf of our customers, in which case our vendors drop ship the products to our end customer, or (ii) obtaining hardware or software on behalf of our customers and performing additional configuration and/or add additional inputs to the products before the products are shipped to our customer. For both types of procurement services, each customer has their own negotiated contract and payment terms. If a customer orders both hardware and additional configurations to those laptops, typically these will both be covered under separate contracts. The services provided are considered distinct, as the additional configurations are not required for the hardware purchased to operate effectively. Customers are invoiced, and revenue is recognized, when the purchased hardware is shipped, as control transfers to the customer free on board ("FOB") shipping point. We are an agent in these transactions because we (i) do not obtain control over the product as products are drop shipped from their vendors directly to the customer; (ii) have no inventory risk and (iii) have general pricing discretion in our transactions with customers. Our pricing discretion is limited by the going market rate of our services offered by other providers. Based on this assessment, we recognize revenue from procurement services on a net basis.

Additionally, certain procurement contracts with customers include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.

Secure Private Cloud Hosting

Our secure private cloud offerings include a digital infrastructure which consists of servers that are dedicated to a single customer. We offer secure private cloud offerings on-premise through our Data Centers as well as off-premise. Our secure private cloud offerings typically are one performance obligation where we are providing the cloud storage to the customer and customers pay a monthly fixed fee for the service.

When a cloud-based service includes both on-premise software licenses and cloud services, judgment is required to determine whether the software license is considered distinct and, therefore, accounted for separately, or not distinct and, therefore, accounted for together with the cloud service and recognized over time. Certain cloud services depend on a significant level of integration, interdependency and interrelation between the desktop applications and cloud services and are accounted for together as one performance obligation. Revenue from such cloud services is recognized ratably over the period in which the cloud services are provided. The unearned portion of revenue from cloud services is presented as deferred revenue in our consolidated balance sheets.

Managed Backup and Disaster Recovery

Pricing for our managed backup and disaster recovery solutions is based upon the customer contract and depends on the amount of backup storage needed. Customers are typically charged set rates per the contract and are charged monthly based on usage. There are typically no upfront fees for these contracts. Customers are invoiced and revenue is recognized on a monthly basis.

Web Hosting

Each customer of our web hosting solutions has their own contract and payment terms. Contract duration is typically between 1-4 years, although the term may vary based on the customer's needs. Web hosting services customers pay a monthly fee and there are typically no upfront costs associated with web hosting services. Customers are invoiced and revenue is recognized on a monthly basis.

Subscription Revenue

We also generate subscription revenue from monthly premium subscription services for our ManyCam software. Subscription revenues are presented net of refunds, credits and known and estimated credit card chargebacks. During the three and nine months ended September 30, 2025 and 2024, subscriptions were offered in durations of twelve-month and twenty-four-month terms. All subscription fees, however, are paid by credit card at the origination of the subscription regardless of the term of the subscription. Revenues from multi-month subscriptions are recognized on a straight-line basis over the period where the service is offered to the customer, indicated by length of the subscription term purchased. The unearned portion of subscription revenue is presented as deferred revenue in the accompanying condensed consolidated balance sheets.

Strategy

Our strategic vision is to be the premier provider of secure, reliable and customer-focused IT solutions. We are committed to delivering scalable and compliant infrastructure through advanced cloud hosting, managed services, cybersecurity and disaster recovery offerings. By prioritizing security at every layer of our technology stack, we safeguard our clients' data and operations against evolving threats. Our emphasis on reliability ensures consistent performance and uptime, enabling businesses to operate with confidence and continuity. Above all, we strive to exceed expectations through exceptional customer service, building lasting partnerships and delivering strategic value that empowers our clients to thrive in a dynamic digital landscape.

Customer acquisition remains a key focus to growth, and we are actively investing in sales and marketing to expand our footprint across strategic verticals. In addition, we are exploring targeted M&A opportunities that complement our core capabilities and accelerate our market reach. As part of our innovation roadmap, we are also evaluating ways to integrate artificial intelligence into our service offerings to help clients improve operational efficiency, enhance security and unlock new value from their data.

Our strategy is to approach these opportunities in a measured way, being mindful of our resources and evaluating factors such as potential revenue, time to market and amount of capital needed to invest in the opportunity.

Costs and Expenses

Cost of revenue

Cost of revenue consists primarily of compensation and other employee-related costs for personnel engaged in data center and customer care functions, credit card processing fees, hosting fees, data center rent, bandwidth costs and, in the case of procurement, revenue the cost of the hardware and/or subscriptions. Cost of revenue also includes compensation and other employee-related costs for technical personnel, consultants and subcontracting costs relating to technology service revenue.

Sales marketing and product development expense

Sales marketing and product development expense consists primarily of (i) advertising expenditures and compensation (including stock-based compensation) and other employee-related costs for personnel and consultants engaged in sales and sales support marketing and development functions and (ii) development of the technology of our applications, and consultant-related costs that are not capitalized for personnel engaged in the design, testing and enhancement of service offerings. Advertising and promotional spend includes online marketing, including fees paid to search engines and offline marketing, which primarily consists of partner-related payments to those who direct traffic to our brands.

General and administrative expense

General and administrative expense consists primarily of compensation (including non-cash stock-based compensation) and other employee-related costs for personnel engaged in executive management, finance, legal, tax and human resources and facilities costs and fees for other professional services and cost of insurance.

Depreciation and amortization expense

Depreciation and amortization expenses consists primarily of amortization of intangible assets as well as depreciation on property and equipment.

Litigation expenses

Litigation expenses relate to expenses incurred in defense of the Cisco ManyCam Litigation (as described and defined below).

Factors Affecting the Comparability of Our Financial Condition and Results of Operations

As described above in the "Recent Developments" section, we completed the Transactions in January 2025. As a result, our historical financial condition and results of operations for the periods presented may not be comparable, either from period to period or going forward. For more information on the Transactions, see Note 3, Acquisition and Note 7, Discontinued Operations, in Part I, Item 1, Financial Statements, of this Form 10-Q.

Key Metrics

Our management relies on certain non-GAAP financial measures to manage and evaluate our business. The non-GAAP financial measures set forth below help us evaluate growth trends, establish budgets, measure the effectiveness of our advertising and marketing efforts and assess operational efficiencies. Adjusted EBITDA is discussed below. We also discuss "Devices Under Management" and net cash provided by operating activities under the "Liquidity and Capital Resources" section below.

		Three Months Ended								Nine Months Ended
		September 30, (unaudited)								September 30, (unaudited)
		2025				2024				2025				2024
Net cash provided by (used in) operating activities - continuing operations		$	133,037			$	(821,418	)		$	989,142			$	(924,628	)
Operating loss from continuing operations		$	(1,435,762	)		$	(1,487,374	)		$	(3,899,388	)		$	(3,543,434	)
Loss from continuing operations as a percentage of total revenues			(22.9	)%			(540.0	)%			(22.3	)%			(432.9	)%
Net loss from continuing operations		$	(1,083,070	)		$	(1,307,899	)		$	(1,324,568	)		$	(2,855,857	)
Net loss from continuing operations as a percentage of total revenues			(17.4	)%			(474.9	)%			(7.6	)%			(348.9	)%
Net loss		$	(1,083,070	)			(1,509,250	)		$	(1,324,568	)			(2,935,708	)
Adjusted EBITDA		$	(260,121	)		$	(1,449,381	)		$	(1,120,667	)		$	(2,882,905	)

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is defined as net income (loss) adjusted to exclude interest (income) expense, net, other (income) expense, net, income tax (benefit) expense, depreciation and amortization expense, stock-based compensation expense, net loss from discontinued operations and litigation expenses relating to the Cisco ManyCam Litigation. Prior to the fiscal quarter ended September 30, 2025, the Company did not exclude litigation expenses related to the Cisco ManyCam Litigation in calculating Adjusted EBTIDA as they were not material. However, after reevaluation, the Company has determined that presenting Adjusted EBITDA without excluding such costs provides less valuable information about the Company's core operations. As a result, beginning with the fiscal quarter ended September 30, 2025, litigation expenses related to the Cisco ManyCam Litigation are now excluded from the calculation of Adjusted EBITDA.

We present Adjusted EBITDA because it is a key measure used by our management and Board to understand and evaluate our core operating performance and trends, to develop short- and long-term operational plans and to allocate resources to expand our business. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of the cash operating income generated by our business. We believe that Adjusted EBITDA is useful to investors and others to understand and evaluate our operating results, and it allows for a more meaningful comparison between our performance and that of competitors.

Limitations of Adjusted EBITDA

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this performance measure in isolation from or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA does not reflect, among other things: cash capital expenditures for assets underlying depreciation and amortization expense that may need to be replaced or for new capital expenditures; interest income, net; other expense, net; the potentially dilutive impact of stock-based compensation; the provision for income taxes; litigation expenses incurred in connection with our patent defense against Cisco Systems, Inc. and Cisco Technology, Inc. (the "Cisco ManyCam Litigation"); and net loss from discontinued operations. Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other GAAP results. The following table presents a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA for each of the periods indicated:

		Three Months Ended								Nine Months Ended
		September 30, (unaudited)								September 30, (unaudited)
		2025				2024				2025				2024
Reconciliation of net loss to Adjusted EBITDA:
Net loss		$	(1,083,070	)		$	(1,307,889	)		$	(1,324,568	)		$	(2,855,257	)
Net loss from discontinued operations			--				(201,361	)			--				(80,451	)
Interest income, net			(102,856	)			(157,517	)			(273,176	)			(453,732	)
Income tax expense, discontinued operations			--				1,201				--				100
Income tax benefit			(249,836	)			(21,968	)			(2,237,894	)			(88,176	)
Other income, net			--				--				(63,750	)			(146,269	)
Litigation expenses relating to the Cisco ManyCam Litigation			507,181				--				507,181				--
Depreciation and amortization expense			624,544				205,584				1,982,235				616,750
Stock-based compensation expense			43,916				32,569				289,305				124,130
Adjusted EBITDA		$	(260,121	)		$	(1,449,381	)		$	(1,120,667	)		$	(2,882,905	)

Devices Under Management

Devices under management represent the number of endpoints, servers, and network devices that are outsourced to us under managed services agreements. It is derived directly from our contract management system and adjusted monthly for additions and retirements (if any). Management uses this metric to measure growth and a measure of customer confidence in our ability to manage devices on their behalf. As of September 30, 2025, we had over 9,000 devices under management.

Results of Operations

The following table sets forth condensed consolidated statements of operations data for each of the periods indicated as a percentage of total revenues:

		Three Months Ended								Nine Months Ended
		September 30, (unaudited)								September 30, (unaudited)
		2025				2024				2025				2024
Total revenue			100.0	%			100.0	%			100.0	%			100.0	%
Costs and expenses:
Cost of revenue			49.3	%			20.5	%			48.1	%			23.3	%
Sales marketing and product development expense			13.5	%			90.6	%			14.0	%			94.4	%
General and administrative expense			42.0	%			454.4	%			46.0	%			339.9	%
Depreciation and amortization			10.0	%			74.6	%			11.3	%			75.4	%
Litigation expenses relating to the Cisco ManyCam Litigation			8.1	%			--				2.3	%			--
Total costs and expenses			123.0	%			640.0	%			122.3	%			533.0	%
Loss from continuing operations			(23.0	)%			(540.0	)%			(22.3	)%			(433.0	)%
Other income, net			1.6	%			57.2	%			1.9	%			73.3	%
Loss from continuing operations before income tax benefit			(21.4	)%			(482.8	)%			(20.4	)%			(359.7	)%
Income tax expense (benefit)			4.0	%			8.0	%			12.8	%			10.8	%
Net loss from continuing operations			(17.4	)%			(474.8	)%			(8.2	)%			(348.9	)%
Loss from discontinued operations, net of income tax expense			--				(73.1	)%			--				(9.8	)%
Net loss			(17.4	)%			(547.9	)%			(7.6	)%			(358.7	)%

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Revenue

Total revenue increased by 2,164.9% to $6,238,019 for the three months ended September 30, 2025 from $275,420 for the three months ended September 30, 2024. This increase was driven by new revenue streams acquired in connection with the Acquisition and the fact that revenue for the prior year period did not include revenue from discontinued operations.

The following table sets forth our total revenue for the three months ended September 30, 2025 and the three months ended September 30, 2024, the increase between those periods, the percentage change between those periods and the percentage of total revenue that each represented for those periods:

																		% Revenue
		Three Months Ended																Three Months Ended
		September 30, (unaudited)								$				%				September 30, (unaudited)
		2025				2024				Increase (Decrease)				Increase (Decrease)				2025				2024
Managed information technology		$	3,791,746				--				3,791,746				--				60.8	%			--
Procurement revenue			1,697,854				--				1,697,854				--				27.2	%			--
Professional services revenue			476,198				--				476,198				--				7.6	%			--
Subscription revenue			272,221				275,420				(3,199	)			(1.2	)%			4.4	%			100.0	%
Total revenues		$	6,238,019			$	275,420			$	5,962,599				2195.6	%			100.0	%			100.0	%

Our subscription revenue for the three months ended September 30, 2025 relates to the sales from our ManyCam software, which decreased by $3,199, or 1.2%, as compared to the three months ended September 30, 2024.

Costs and Expenses

Total costs and expenses for the three months ended September 30, 2025 increased by $5,910,987, or 447.0%, as compared to the three months ended September 30, 2024. The following table presents our costs and expenses for the three months ended September 30, 2025 and 2024, the increase between those periods and the percentage increase between those periods and the percentage of total revenue that each represented for those periods:

																		% Revenue
		Three Months Ended																Three Months Ended
		September 30, (unaudited)								$				%				September 30, (unaudited)
		2025				2024				Increase				Increase				2025				2024
Cost of revenue		$	3,076,333			$	56,339			$	3,019,994				4134.9	%			49.3	%			20.5	%
Sales marketing and product development expense			844,463				249,408				595,055				231.2	%			13.5	%			90.6	%
General and administrative expense			2,621,260				1,251,463				1,369,797				174.2	%			42.0	%			454.4	%
Depreciation and amortization			624,544				205,584				418,960				203.8	%			10.0	%			74.6	%
Litigation expenses relating to the Cisco ManyCam Litigation			507,181				--				507,181				--				8.1	%			--
Total costs and expenses		$	7,673,781			$	1,762,764			$	5,910,987				447.0	%			122.9	%			640.1	%

Cost of revenue

Our cost of revenue for the three months ended September 30, 2025 increased by $3,019,994, or 4,134.9%, as compared to the three months ended September 30, 2024. This increase was primarily due to an increase in the expenses related to the new revenue streams acquired in connection with the Acquisition, including but not limited to, costs associated with procurement equipment and related costs of $1,291,143, managed services expenses of $1,450,028, subscriptions and licensing of $647,974, professional and consulting costs of $252,112 web hosting expense of $135,188 and rent related to our Data Centers of $82,692.

Sales marketing and product development expense

Our sales marketing and product development expense for the three months ended September 30, 2025 increased by $595,055, or 231.2%, as compared to the three months ended September 30, 2024. The increase in sales marketing and product development expense for the three months ended September 30, 2025 was primarily due to an increase in salary-related expenses of approximately $492,208 and commissions of $148,102 earned by the Company's sales team to service and grow its customer base. In addition, consulting expenses totaled $78,914 related to marketing activities. As a result of the Transactions, headcount on our sales team increased from zero in the prior year period to approximately 15 people in the current period, and their associated salaries are included in sales marketing and product development expense for the three months ended September 30, 2025.

General and administrative expense

Our general and administrative expense for the three months ended September 30, 2025 increased by $1,369,797, or 174.2%, as compared to the three months ended September 30, 2024. The increase in general and administrative expenses for the three months ended September 30, 2025 was primarily due to legal and accounting expenses of $315,900 and $51,239, respectively. In addition, the Company incurred public company expenses of $209,157, rent expense of $91,762 in connection with our office and Data Centers and insurance costs of $205,411. Salary and salary related expenses totaled $1,515,582 for the three months ended September 30, 2025, plus $43,916 of non-cash share-based compensation. As a result of the Transactions, headcount increased from four individuals in the prior year period to approximately 41 individuals in the current period, and their associated salary and salary related costs are included in general and administrative expenses for the three months ended September 30, 2025.

Depreciation and amortization expenses

Depreciation and amortization expenses increased by $481,960 to $624,544 for the three months ended September 30, 2025. The increase relates to increased amortization and depreciation in connection with the intangible and fixed assets acquired in the Acquisition.

Litigation expenses

Litigation expense totaled $507,181 for the three months ended September 30, 2025 and related to the costs incurred in connection with the Cisco ManyCam Litigation.

Non-Operating Income

The following table presents the components of non-operating income for the three months ended September 30, 2025 and the three months ended September 30, 2024, the decrease between those periods and the percentage decrease between those periods and the percentage of total revenue that each represented for those periods:

																		% Revenue
		Three Months Ended																Three Months Ended
		September 30, (unaudited)								$				%				September 30, (unaudited)
		2025				2024				(Decrease)				(Decrease)				2025				2024
Interest income, net		$	102,856			$	157,517			$	(54,661	)			(37.9	)%			1.6	%			57.2	%
Total non-operating income		$	102,856			$	157,517			$	(54,661	)			(37.9	)%			1.6	%			57.2	%

Non-operating income for the three months ended September 30, 2025 was $102,856, a decrease of $54,661, or 37.9%, as compared to non-operating income of $157,517 for the three months ended September 30, 2024. The decrease in interest income was primarily a result of a decrease in the amount of principal the Company invested and at varying interest rates.

Income Taxes

Our provision for income taxes consists of federal, foreign and state taxes, as applicable, in amounts necessary to align the Company's year-to-date tax provision with the effective rate that it expects to achieve for the full year. For the three months ended September 30, 2025, the Company recorded an income tax benefit of $249,836 consisting primarily of federal, foreign, state and local taxes. For the three months ended September 30, 2024, the Company recorded an income tax benefit of $21,968, consisting primarily of federal, foreign, state and local taxes.

On July 4, 2025, President Trump signed H.R. 1, the "One Big Beautiful Bill Act", into law. In accordance with U.S. GAAP, we will account for the tax effects of changes in tax law in the period of enactment which is in the third quarter of 2025. We are currently in the process of analyzing the tax impacts of the law change but we do not expect a material impact on our effective tax rate.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Revenue

Total revenue increased by 2,035.7% to $17,478,656 for the nine months ended September 30, 2025 from $818,401 for the nine months ended September 30, 2024. This increase was driven by new revenue streams acquired in connection with the Acquisition and the fact that revenue for the prior year period did not include revenue from discontinued operations.

The following table sets forth our total revenue for the nine months ended September 30, 2025 and the nine months ended September 30, 2024, the increase between those periods, the percentage increase between those periods and the percentage of total revenue that each represented for those periods:

																		% Revenue
		Nine Months Ended																Nine Months Ended
		September 30, (unaudited)								$				%				September 30, (unaudited)
		2025				2024				Increase				Increase				2025				2024
Managed information technology		$	10,857,333				--				10,857,333				--				62.1	%			--
Procurement revenue			3,897,634				--				3,897,634				--				22.3	%			--
Professional services revenue			1,891,620				--				1,891,620				--				10.8	%			--
Subscription revenue			832,069				818,401				13,668				1.7	%			4.8	%			100.0	%
Total revenues		$	17,478,656			$	818,401			$	16,660,255				2,035.7	%			100.0	%			100.0	%

Our subscription revenue for the nine months ended September 30, 2025 relates to the sales from our ManyCam software, which increased by $13,668, or 1.7%, as compared to the nine months ended September 30, 2024. The increase in subscription revenue was primarily driven by an increase in new subscribers to our ManyCam software.

Costs and Expenses

Total costs and expenses for the nine months ended September 30, 2025 increased by $17,016,209, or 390.1%, as compared to the nine months ended September 30, 2024. The following table presents our costs and expenses for the nine months ended September 30, 2025 and 2024, the increase between those periods, the percentage increase between those periods and the percentage of total revenue that each represented for those periods:

																		% Revenue
		Nine Months Ended																Nine Months Ended
		September 30, (unaudited)								$				%				September 30, (unaudited)
		2025				2024				Increase				Increase				2025				2024
Cost of revenue		$	8,398,445			$	191,012			$	8,207,433				4296.8	%			48.0	%			23.3	%
Sales marketing and product development expense			2,449,224				772,595				1,676,629				217.0	%			14.0	%			94.4	%
General and administrative expense			8,040,958				2,781,478				5,259,480				189.1	%			46.0	%			339.9	%
Depreciation and amortization			1,982,236				616,750				1,365,499				221.4	%			11.3	%			75.4	%
Litigation expenses relating to the Cisco ManyCam Litigation			507,181				--				507,181				--				2.9	%			--
Total costs and expenses		$	21,378,044			$	4,361,835			$	17,016,209				390.1	%			122.2	%			533.0	%

Cost of revenue

Our cost of revenue for the nine months ended September 30, 2025 increased by $8,207,433, or 4,296.8%, as compared to the nine months ended September 30, 2024. This increase was primarily due to an increase in the expenses related to the new revenue streams acquired in connection with the Acquisition, including but not limited to, costs associated with procurement equipment and related costs of $3,013,042, managed services expenses of $1,535,181, subscriptions and licensing of $1,736,639, professional and consulting costs of $854,812, web hosting expense of $413,394 and rent related to our Data Centers of $248.076.

Sales marketing and product development expense

Our sales marketing and product development expense for the nine months ended September 30, 2025 increased by $1,676,629 or 217.0%, as compared to the nine months ended September 30, 2024. The increase in sales marketing and product development expense for the nine months ended September 30, 2025 was primarily due to an increase in salary-related expenses of approximately $1,480,167 and commissions of $415,861 earned by the Company's sales team to service and grow its customer base. In addition, consulting expenses totaled $148,731 related to marketing activities. As a result of the Transactions, headcount on our sales team increased from zero in the prior year period to approximately 15 people in the current period, and their associated salary costs are included in sales marketing and product development expense for the nine months ended September 30, 2025.

General and administrative expense

Our general and administrative expense for the nine months ended September 30, 2025 increased by $5,259,480, or 189.1%, as compared to the nine months ended September 30, 2024. The increase in general and administrative expenses for the three months ended September 30, 2025 was primarily due to legal and accounting expenses of $469,139 and $640,948, respectively. In addition, the Company incurred public company expenses of $507,163, rent expense of $290,409 in connection with our office and Data Centers and insurance costs of $611,007. Salary and salary related expenses totaled $4,580,716 for the nine months ended September 30, 2025, plus $289,308 of non-cash share-based compensation. As a result of the Transactions, headcount increased from four individuals in the prior year period to approximately 41 individuals in the current period, and their associated salary and salary related costs are included in general and administrative expenses for the nine months ended September 30, 2025. Of the total expenses described above, approximately $334,970 were one-time expenses related to the Transactions.

Depreciation and amortization expenses

Depreciation and amortization expenses increased by $1,365,486 to $1,982,236 for the nine months ended September 30, 2025. The increase relates to increased amortization and depreciation in connection with the intangible and fixed assets acquired in the Acquisition.

Litigation expenses

Litigation expense totaled $507,181 for the nine months ended September 30, 2025 and related to the costs incurred in connection with the Cisco ManyCam Litigation.

Non-Operating Income

The following table presents the components of non-operating income for the nine months ended September 30, 2025 and the nine months ended September 30, 2024, the decrease between those periods, the percentage decrease between those periods and the percentage of total revenue that each represented for those periods:

																		% Revenue
		Nine Months Ended																Nine Months Ended
		September 30, (unaudited)								$				%				September 30, (unaudited)
		2025				2024				(Decrease)				(Decrease)				2025				2024
Interest income, net		$	273,176			$	453,732			$	(180,556	)			(39.8	)%			1.6	%			55.4	%
Other income, net			63,750				146,269				(82,519	)			(56.4	)%			0.3	%			17.9	%
Total non-operating income		$	336,926			$	600,001			$	(263,075	)			(43.8	)%			1.9	%			73.3	%

Non-operating income for the nine months ended September 30, 2025 was $336,926, a decrease of $263,075, or 43.8%, as compared to non-operating income of $600,001 for the nine months ended September 30, 2024. The decrease was primarily a result of a decrease in the amount of principal the Company invested and at varying interest rates. Other income for the nine months ended September 30, 2025 related to the sale of a domain name that the Company is not using. During the nine months ended September 30, 2024 other income included proceeds from a class action lawsuit against a service provider.

Income Taxes

Our provision for income taxes consists of federal, foreign and state taxes, as applicable, in amounts necessary to align the Company's year-to-date tax provision with the effective rate that it expects to achieve for the full year. For the nine months ended September 30, 2025, the Company recorded an income tax benefit of $2,237,894 primarily related to a partial release of its valuation allowance as the Acquisition created a source of future taxable income allowing for the recognition of certain deferred tax assets. For the nine months ended September 30, 2024, the Company recorded an income tax benefit of $88,176, consisting primarily of federal, foreign, state and local taxes.

Liquidity and Capital Resources

		Nine Months Ended September 30, (unaudited)
		2025				2024
Condensed Consolidated Statements of Cash Flows Data:
Net cash provided by (used in) operating activities - continuing operations		$	989,142			$	(924,628	)
Net cash used in operating activities - discontinued operations			--				(627,108	)
Net cash used in investing activities			(4,280,149	)			--
Net cash provided by financing activities			1,048,952				39,772
Net decrease in cash, cash equivalents and restricted cash		$	(2,242,055	)		$	(1,511,964	)

Currently, our primary source of liquidity is cash on hand and cash available through the Facility. As of the date of this report, no amounts were outstanding under the Facility.

We believe that our cash and cash equivalents balance, our cash available through the Facility and our expected cash flows from operations will be sufficient to meet all of our financial obligations for one year from the date these financial statements are issued. As of September 30, 2025, we had $8,346,479 of cash and cash equivalents, which included $1,025,176 of restricted cash.

Additionally, we expect our long-term liquidity position will be sufficient to meet our long-term liquidity needs with cash flows from operations and financing arrangements. However, in the event of changes in business conditions or other developments, including a sustained market deterioration, unanticipated regulatory developments, significant acquisitions, competitive pressures, or to the extent our liquidity needs prove to be greater than expected or cash generated from operations is less than anticipated, we may need additional liquidity. To the extent we elect to finance our long-term liquidity needs, we believe that the potential financing capital available to us in the future will be sufficient.

Our primary use of working capital is related to investment in marketing initiatives to grow the business in order to maintain and create new services and features in applications for our clients and users. In the future, we may seek to grow our business by expending our capital resources to fund strategic acquisitions, investments and partnership opportunities.

Stock Repurchase Plan

On May 8, 2025, the Board approved the Stock Repurchase Plan for up to $400,000 of our outstanding common stock, which expires on the one-year anniversary of such date. We intend to utilize the Stock Repurchase Plan to minimize the dilutive impact of awards granted under our equity incentive plans and to repurchase shares opportunistically. Shares of common stock may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 plans. The Stock Repurchase Plan does not obligate us to repurchase any shares of common stock, and the Stock Repurchase Plan may be modified, suspended, extended or terminated at any time by our Board. The actual timing, number and value of shares repurchased will be determined by a committee of the Board at its discretion and will depend on a number of factors, including the market price of our common stock, general market and economic conditions, alternative investment opportunities and other corporate considerations. As of September 30, 2025, 151,258 shares of common stock had been repurchased pursuant to the Stock Repurchase Plan.

NTS Acquisition

On January 2, 2025, we closed the Acquisition, pursuant to which we acquired NTS through a two-step merger process. The aggregate consideration we delivered to Newtek at the Acquisition Closing consisted of (i) $4,000,000 in cash and (ii) 4,000,000 shares of our Series A Preferred Stock. In addition to the Acquisition Closing Consideration, the Acquisition Agreement provides that Newtek is entitled to receive an amount up to $5,000,000 (the "Acquisition Earn-Out Amount") based on our achievement of certain cumulative average adjusted EBITDA thresholds for the 2025 and 2026 fiscal years. The Acquisition Earn-Out Amount may be paid, in our sole discretion, in cash (the "Acquisition Earn-Out Cash Consideration"), in shares of Series A Preferred Stock (the "Acquisition Earn-Out Stock Consideration") or in a combination thereof. Pursuant to the Acquisition Agreement, to the extent that all or a portion of the Acquisition Earn-Out Amount is paid in shares of Series A Preferred Stock, the number of shares of Series A Preferred Stock to be issued to Newtek will be calculated based on the average of the daily volume weighted average prices of our common stock during each trading day during a 60 calendar-day period ending on December 31, 2026; provided, that in no event shall such price be less than $1.00.

Pursuant to the Acquisition Agreement, if the issuance of the Acquisition Earn-Out Stock Consideration would cause Newtek's "total equity" (as calculated under the Bank Holding Company Act of 1956, as amended, and as implemented and interpreted by the Board of Governors of the Federal Reserve System) in us to exceed one-third of our total equity (the "Total Equity Cap"), then the number of shares of Series A Preferred Stock issuable as Acquisition Earn-Out Stock Consideration will be adjusted so that we will issue to Newtek the maximum number of shares of Series A Preferred Stock that would not cause Newtek's total equity to exceed the Total Equity Cap, with a corresponding increase to the Acquisition Earn-Out Cash Consideration.

The Divestiture

On January 2, 2025, we completed the sale to Meteor Mobile of the Transferred Assets. The consideration delivered by Meteor Mobile to us at the closing of the Divestiture consisted of (i) $1,350,000 in cash and (ii) the assumption of all of the liabilities of the Sellers arising out of, or relating to, the Business or the Transferred Assets, other than certain excluded liabilities. In addition to the Divestiture Closing Consideration, we are entitled to receive, with respect to each Earn-Out Period, as defined and described below, certain payments in cash based on the cash revenue, net of any refunds, received by Meteor Mobile that is attributable to the Business (such cash revenue, the "Legacy Business Revenue"), as follows:

●

from the six-month period beginning on July 1, 2025 and ending on December 31, 2025 ("Earn-Out Period 1"), an amount equal to (i) for any Legacy Business Revenue greater than or equal to $3,500,000 and less than $4,250,000, the amount of such Legacy Business Revenue multiplied by 0.30 plus (ii) for any Legacy Business Revenue greater than or equal to $4,250,000, the amount of such Legacy Business Revenue in excess of $4,250,000 multiplied by 0.40; and

●

from each of the twelve-month period beginning on January 1, 2026 and ending on December 31, 2026 ("Earn-Out Period 2"), the twelve-month period beginning on January 1, 2027 and ending on December 31, 2027 ("Earn-Out Period 3") and the twelve-month period beginning on January 1, 2028 and ending on December 31, 2028 ("Earn-Out Period 4" and collectively with Earn-Out Period 1, Earn-Out Period 2 and Earn-Out Period 3, the "Earn-Out Periods"), an amount equal to (i) for any Legacy Business Revenue greater than or equal to $7,000,000 and less than $8,500,000, the amount of such Legacy Business Revenue multiplied by 0.30 plus (ii) for any Legacy Business Revenue greater than or equal to $8,500,000, the amount of such Legacy Business Revenue in excess of $8,500,000 multiplied by 0.40 (the aggregate amount, if any, earned during the Earn-Out Periods, the "Divestiture Earn-Out Amount").

In the event of a change of control (as defined in the Divestiture Agreement) of Meteor Mobile during any of the Earn-Out Periods, we are entitled to receive an acceleration payment in cash, net of any Divestiture Earn-Out Amounts previously paid to us (the "Acceleration Payment"). If any of the Transferred Assets are sold independently from the other assets of Meteor Mobile, we will be entitled to (i) 50% of the aggregate consideration paid to Meteor Mobile for the Transferred Assets minus (ii) the aggregate amount of any Divestiture Earn-Out Amounts received by the Sellers by the date of the change of control, minus (iii) the aggregate amount of any Acceleration Payments previously paid through such date. If any of the Transferred Assets are sold contemporaneously with other assets of Meteor Mobile, we are entitled to (x) the aggregate consideration paid to Meteor Mobile for the Transferred Assets multiplied by the ratio of the trailing 12-month EBITDA of the Transferred Assets sold and the EBITDA of all assets sold minus (y) the aggregate amount of any Divestiture Earn-Out Amounts received by the Sellers by the date of the change of control, minus (z) the aggregate amount of any Acceleration Payments previously paid through such date. The minimum Acceleration Payment for the sale of "Paltalk," "Camfrog" and "Vumber" is $1,650,000, $450,000 and $300,000, respectively, and the Acceleration Payments payable to us are capped at $5,000,000 in the aggregate.

Operating Activities

Net cash provided by operating activities was $989,142 for the nine months ended September 30, 2025, as compared to net cash used in operating activities of $1,551,736 for the nine months ended September 30, 2024. The increase in the amount of cash provided by operations for the nine months ended September 30, 2024 was primarily attributed to the change in the business activities of the Company following the Transactions compared to the nine months ended September 30, 2024, specifically, the collection of accounts receivable, and the timing of payment of payables, netted against amounts collected by the Company during the second quarter following the Divestiture due to Meteor Mobile and paid subsequent to quarter end of $0.4 million.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2025 was $4,280,149 and related to the cash consideration paid by the Company to Newtek in connection with the Acquisition as well as the acquisition of fixed assets. There was no cash used in or provided by investing activities for the nine months ended September 30, 2024.

Financing Activities

Net cash provided by financing activities was $1,048,952 for the nine months ended September 30, 2025, which was attributed to the $1,350,000 received in connection with the Divestiture netted against the $301,048 used in connection with the Stock Repurchase Plan. There was $39,772 cash provided by financing activities for the nine months ended September 30, 2024 related to the exercise of employee stock options.

Contractual Obligations and Commitments

There have been no other material changes to our contractual obligations and commitments disclosed in the contractual obligations and commitments section of Management's Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K.

Off-Balance Sheet Arrangements

As of September 30, 2025, we did not have any off-balance sheet arrangements.

Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Business Combinations

We apply the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity recognizes all of the identifiable assets acquired and liabilities assumed at their acquisition date fair values. We use our best estimates and assumptions to estimate the fair values of these tangible and intangible assets. Any excess of the purchase price over amounts allocated to the assets acquired is recorded as goodwill. The acquired intangible assets are amortized using the straight-line method over the estimated useful lives of the respective assets. Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired.