What changed in this filing

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Item 1. Financial Statements

2025-08-12 compared with 2025-05-14 · 462 added, 333 removed, 721 unchanged (52% of the section changed)

FINANCIAL STATEMENTS

INTELLIGENT PROTECTION

MANAGEMENT CORP.

INTELLIGENT PROTECTION MANAGEMENT CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2024

Current assets:

Cash and cash equivalents

Restricted cash

Accounts receivable, net of $ 269,850 allowance

Accounts receivable – due from related party

Due from related party

Prepaid expense and other current assets

Operating lease right-of-use asset, current

Operating lease right-of-use assets, net

Employee retention tax credit receivable, net

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Intangible assets, net

Operating lease right of use assets, noncurrent

Operating lease right of use assets, net

Liabilities and stockholders’ equity

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Stockholders’ equity:

Series A Preferred Stock, $ 0.001 par value, 9,000,000 authorized, 4,000,000 and 0 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Common stock, $ 0.001 par value, 25,000,000 shares authorized, 9,878,950 shares issued and 9,236,987 shares outstanding as of March 31, 2025 and December 31, 2024

Treasury stock, 641,963 shares repurchased as of March 31, 2025 and December 31, 2024

Series A Preferred Stock, $ 0.001 par value, 9,000,000 authorized, 4,000,000 and 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Common stock, $ 0.001 par value, 25,000,000 shares authorized, 9,878,950 shares issued and 9,132,387 and 9,236,987 shares outstanding as of June 30, 2025 and December 31, 2024, respectively

Treasury stock, at cost, 746,563 and 641,963 shares repurchased as of June 30, 2025 and December 31, 2024, respectively

( 1,412,135 )

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of these condensed consolidated financial statements.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

INTELLIGENT PROTECTION MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Managed information technology, includes $ 1,688,583 of related party revenue

Procurement revenue, includes $ 54,520 of related party revenue

Professional services revenue, includes $51,850 of related party revenue

Six Months Ended

Managed information technology, includes $ 1,827,817 and $ 3,516,400 of related party revenue for the three and six months, respectively

Procurement revenue, includes $ 23,361 and $ 77,881 of related party revenue for the three and six months, respectively

Professional services revenue, includes $ 56,396 and $ 108,246 of related party revenue for the three and six months, respectively

Subscription revenue

Total revenue

Costs and expenses

Costs and expenses, exclusive of depreciation and amortization shown separately below

Costs of revenue

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Total costs and expenses

Loss from continuing operations

Operating loss from continuing operations

( 1,129,699 )

( 1,051,051 )

( 2,463,626 )

( 2,056,060 )

Interest income, net

Other income, net

Loss from continuing operations before income tax benefit

( 2,229,556 )

Income tax benefit

Net income (loss) from continuing operations

Loss from discontinued operations, net of income tax expense of $ 480,810 for the three months ended March 31, 2024

Net income (loss)

( 1,613,576 )

Income tax (expense) benefit

Net loss from continuing operations

( 1,050,028 )

( 1,293,053 )

( 1,547,368 )

Income from discontinued operations, net of income tax benefit of $ 481,911 and $ 1,101 for the three and six months ended June 30, 2024

$ ( 1,050,028 )

$ ( 934,151 )

$ ( 241,498 )

$ ( 1,426,458 )

Net income (loss) per share of common stock:

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Diluted – discontinued operations

Weighted average number of shares of Series A Preferred Stock used in calculating net loss per share of Series A Preferred Stock, basic and diluted

Weighted average number of shares of Common Stock used in calculating net loss per share of Common Stock, basic and diluted

Basic and diluted net loss per share of Series A Preferred Stock, basic and diluted

Basic and diluted net loss per share of Common Stock, basic and diluted

Weighted average number of shares of common stock used in calculating net loss per share of common stock:

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IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED

MARCH 31, 2025 AND 2024

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

2025 AND 2024

Preferred Stock

Series A Preferred Stock

Stockholders’

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$ ( 15,376,875 )

Stock-based compensation expense

Balance at June 30, 2024

$ ( 1,199,337 )

$ ( 16,311,026 )

Balance at December 31, 2024

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$ ( 22,502,247 )

Stock-based compensation expense

Repurchases of common stock

( 1,050,028 )

Balance at June 30, 2025

$ ( 1,412,135 )

$ ( 23,552,275 )

The accompanying notes are an integral part

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INTELLIGENT PROTECTION MANAGEMENT CORP.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Three Months Ended

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended

Cash flows from operating activities:

Net income (loss)

$ ( 241,498 )

Net loss from discontinued operations

Net income (loss) from continuing operations

$ ( 1,426,458 )

Adjustments to reconcile net income (loss) from continuing operations to net cash used in operating activities:

Amortization of intangible assets and depreciation

Net (income) from discontinued operations

Net loss from continuing operations

$ ( 241,498 )

$ ( 1,547,368 )

Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities:

Amortization of intangible assets

Amortization of operating lease right-of-use assets

Depreciation on property and equipment

Depreciation of property and equipment

Deferred tax liability

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Stock-based compensation

Credit loss expense

Allowance for credit losses

Changes in operating assets and liabilities, net of acquired assets and disposition:

Accounts receivable

Operating lease liability

Operating lease liabilities

Prepaid expense and other current assets

( 1,650,494 )

Accounts payable, accrued expenses and other current liabilities

1 unchanged sentence

Net cash provided by (used in) operating activities – continuing operations

Net cash (used in) provided by operating activities –discontinued operations

Net cash used in operating activities –discontinued operations

Net cash provided by (used in) operating activities

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( 4,000,000 )

Purchases of fixed assets

Net cash used in investing activities

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Proceeds from sale of Transferred Assets

Purchase of treasury stock

Net cash provided by financing activities

Net decrease in cash and cash equivalents

( 2,286,842 )

Balance of cash and cash equivalents at beginning of period

Balance of cash and cash equivalents at end of period

Balance of cash and cash equivalents at end of period, including restricted cash of $ 1,014,714 at June 30, 2025

Supplemental non-cash disclosure:

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INTELLIGENT PROTECTION MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Organization and Description of Business

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Company operated a network of consumer applications.

The Company’s product portfolio included Paltalk, Camfrog and Tinychat, which

together hosted a large collection of video-based communities.

The Company’s other products included Vumber.

Following the Transactions,

the Company continues to support its 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 Company’s product portfolio included “Paltalk”, “Camfrog”

and “Tinychat”, which together hosted a large collection of video-based communities.

The Company’s other products included

Following the Transactions, the Company continues to support its 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.

Acquisition of NTS

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For more information, see the Note 3, “ Acquisition ”

In connection with the Acquisition, the Company incurred professional fees of $ 0.3 million for the three months ended March 31,

In connection with the Acquisition, the Company incurred professional fees of $ 0.3 million for the six months ended June 30, 2025

and $ 1.8 million for the year ended December 31, 2024.

These amounts are included in general and administrative expenses.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

On the Closing Date and prior to the Acquisition

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31, 2024 and the results of operations are presented as discontinued operations on the consolidated statement of operations for the three

months ended March 31, 2024.

and six months ended June 30, 2024.

On January 2, 2025, the Company completed the Divestiture as described above.

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ERTC and recorded a receivable in the amount of $ 343,045 , net of related costs.

As of March 31, 2025 and December 31, 2024, the remaining

As of June 30, 2025 and December 31, 2024, the remaining

balance due to the Company was $ 114,212 , which was included on the condensed consolidated balance sheet as a receivable.

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ended December 31, 2024, filed with the SEC on March 24, 2025 (the “Form 10-K”).

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

In the opinion of management, the accompanying

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The Company’s historical results are not necessarily indicative of future operating results, and the

results for the three months ended March 31, 2025 are not necessarily indicative of results for the year ending December 31, 2025, or

for any other period.

results for the three and six months ended June 30, 2025 are not necessarily indicative of results for the year ending December 31, 2025,

or for any other period.

Summary of Significant Accounting Policies

During the three months ended March 31, 2025,

During the three and six months ended June 30,

2025, there were no significant changes made to the Company’s significant accounting policies.

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policies, see the Form 10-K.

Recently Accounting Standards

In November 2024, the Financial Accounting Standards

Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Disaggregation of Income Statement Expenses.

The new standard requires entities to disclose additional information about certain expenses, such as purchases of inventory, employee

compensation, depreciation, intangible asset amortization, as well as selling expenses included in commonly presented expense captions

on the income statement.

The FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement

- Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Recently Issued Accounting Standards

2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Improvements

to Income Tax Disclosures (“ASU 2023-09”), which requires more detailed income tax disclosures.

The guidance requires

entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income

taxes paid by jurisdiction.

The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively.

The standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating

the impact of ASU 2023-09 on our annual income tax disclosures.

We expect the standard will expand the disclosures provided in our annual

financial statements, particularly in the rate reconciliation and cash taxes paid sections, but do not anticipate that adoption will have

a material effect on our consolidated results of operations, financial position, or cash flows.

We plan to adopt ASU 2023-09 for the annual

period ending December 31, 2025.

In November 2024, the FASB issued ASU 2024-03,

Disaggregation of Income Statement Expenses .

The new standard requires entities to disclose additional information about certain

expenses, such as purchases of inventory, employee compensation, depreciation, intangible asset amortization, as well as selling expenses

included in commonly presented expense captions on the income statement.

The FASB further clarified the effective date in January 2025

with the issuance of ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic

Clarifying the Effective Date.

effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

Companies have the

option to apply this guidance either on a retrospective or prospective basis, and early adoption is permitted.

The Company is currently

evaluating this guidance to determine the impact it may have on its consolidated financial statements and related disclosures.

Cash and Cash Equivalents

The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods

beginning after December 15, 2027.

Companies have the option to apply this guidance either on a retrospective or prospective basis, and

early adoption is permitted.

The Company is currently evaluating this guidance to determine the impact it may have on its consolidated

financial statements and related disclosures.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments

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Cash and cash equivalents consist of

cash on deposit with banks and money market funds as well as certificate of deposits to satisfy the depository requirement in the Loan

Agreements (as defined and discussed in Note 13).

The Company maintains cash in bank accounts which, at times, may exceed federally insured

As part of its cash management process, the Company periodically reviews the relative credit standing of these banks.

has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has

determined the credit exposure to be negligible.

cash on deposit with banks and money market funds.

The Company maintains a certificate of deposit to satisfy the depository requirement

in the Loan Agreements (as defined and discussed in Note 13).

The Company maintains cash in bank accounts which, at times, may exceed

federally insured limits.

As part of its cash management process, the Company periodically reviews the relative credit standing of these

The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions

and has determined the credit exposure to be negligible.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Accounts Receivable, net of allowance

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Use of 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

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

The most significant accounting estimates inherent in the preparation of the Company’s financial statements include

impairments and fair value estimates for assets acquired in business combinations and assessment of useful lives of acquired intangible

The Acquisition related fair values and estimates were based on a number of factors, including a valuation by an independent third

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.

The most significant accounting estimates inherent in the preparation of the Company’s

financial statements include impairments and fair value estimates for assets acquired in business combinations and assessment of useful

lives of acquired intangible assets.

The Acquisition related fair values and estimates were based on a number of factors, including a

valuation by an independent third party.

The Company also uses a Black Scholes model for estimates in calculating share-based

compensation.

Revisions to the Company’s estimates may

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Contract losses are the amount by

which the estimated costs of the contract exceed the estimated total revenue that will be generated by the contract and are included

in cost of revenues in the Company’s condensed consolidated statements of operations.

which the estimated costs of the contract exceed the estimated total revenue that will be generated by the contract and are included in

cost of revenues in the Company’s condensed consolidated statements of operations.

There were no contract losses for the periods

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Business Combinations

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other applicable factors.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

A contract asset is a right to consideration that

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are reported in a net position on a contract-by-contract basis at the end of each reporting period.

The difference between the opening

and closing balances of the contract assets and deferred revenue primarily results from the timing difference between performance obligations

and the customer’s payment.

The Company receives payments from customers based on the terms established in their contracts, which

may vary generally by contract type.

The Company sells hardware and software products

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and known and estimated credit card chargebacks.

During the three months ended March 31, 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.

During the three and six months ended June 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.

portion of subscription revenue is presented as “deferred revenue” in the accompanying condensed consolidated balance sheets.

Intangible Assets

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relationships/customer lists.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

The Company’s intangible assets represent

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would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying

The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined

based on discounted cash flows.

No impairments were recorded on intangible assets as no impairment indicators were noted for the periods

presented in these consolidated financial statements.

The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based

on discounted cash flows.

No impairments were recorded on intangible assets as no impairment indicators were noted for the periods presented

in these consolidated financial statements.

Goodwill is recorded when the purchase price paid

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The Company has one reporting unit.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

The Company determines if an arrangement is, or

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whenever events or changes in circumstances indicate that the carrying amounts of the assets might not be recoverable.

In evaluating

an asset for recoverability, the Company estimates the future cash flow expected to result from the use and eventual disposition of the

If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the

excess of the carrying amount over the fair value of the asset, is recognized.

No impairment losses were recorded on property and equipment

for the periods presented in these consolidated financial statements.

In evaluating an

asset for recoverability, the Company estimates the future cash flow expected to result from the use and eventual disposition of the asset.

If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the excess of

the carrying amount over the fair value of the asset, is recognized.

No impairment losses were recorded on property and equipment for

the periods presented in these consolidated financial statements.

Fair Value Measurements

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that includes:

Observable inputs,

such as quoted prices in active markets.

Inputs, other than

quoted prices in active markets, that are observable either directly or indirectly.

2 assets and liabilities include debt securities with quoted market prices that are traded

less frequently than exchange-traded instruments.

Observable inputs, such as quoted prices in active markets.

Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

Level 2 assets and liabilities include debt securities with quoted market prices that are traded less frequently than exchange-traded

This category includes U.S.

agency-backed debt securities and corporate-debt securities.

Unobservable inputs

in which there is little or no market data.

government agency-backed debt securities and corporate-debt securities.

Unobservable inputs in which there is little or no market data.

In connection with the Acquisition, the Company

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and administrative expenses until the liability is settled.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Concentration of Credit

As of March 31, 2025, three of the Company’s

customers had accounts receivable balances more than 10% of the total accounts receivable balance.

Newtek, a related party, represented

17 % of the accounts receivable balance and two other customers represented 15% and 14 %, respectively.

For the three months ended March

31, 2025, Newtek and its affiliates represented 33 % of total revenue.

As of June 30, 2025, two of the Company’s customers

had accounts receivable balances more than 10% of the total accounts receivable balance.

The two customers represented 28 % and 42 %, of

the June 30, 2025 total accounts receivable balance, respectively.

For the three and six months ended June 30, 2025, Newtek, a related

party, and its affiliates represented 33 % and 33 % of total revenue.

On the Closing Date, the Company acquired NTS

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The results of NTS have been included in the Company’s single-segment business.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

The fair value of all the acquired identifiable

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normal course of business, certain amounts were due to the Company by Newtek and its affiliates.

For the three months ended March 31,

2025, sales to Newtek and its affiliates totaled $ 1,794,953 .

For the three and six months ended June

30, 2025, sales to Newtek and its affiliates totaled $ 1,907,574 and $ 3,702,527 respectively.

Included in accounts receivable at June 30,

2025 was $ 28,145 due from Newtek and its affiliates.

In connection with the Acquisition,

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The referral arrangement with Newtek is terminable by either the Company or Newtek at any time.

The Company paid Newtek and its affiliates

$ 79,521 and $ 155,704 for the three and six months ended June 30, 2025, respectively, in connection with these agreements.

Supplemental Pro Forma Information

The following unaudited pro forma consolidated financial information

reflects the results of operations of the Company for the three months ended March 31, 2024 as if the Acquisition had occurred as of January

1, 2024 and gives effect to transactions that are directly attributable to the Acquisition.

These amounts are based on financial information

of NTS and are not necessarily indicative of what the Company’s operating results would have been had the Acquisition taken place

on the date presented, nor is it indicative of the Company’s future operating results.

As the Acquisition occurred on January 2,

2025, the Company’s results of operations for the three months ended March 31, 2025 include those results attributable to the acquired

operations of NTS

The following unaudited pro forma consolidated

financial information reflects the results of operations of the Company for the three and six months ended June 30, 2024 as if the Acquisition

had occurred as of January 1, 2024 and gives effect to transactions that are directly attributable to the Acquisition.

These amounts are

based on financial information of NTS and are not necessarily indicative of what the Company’s operating results would have been

had the Acquisition taken place on the date presented, nor is it indicative of the Company’s future operating results.

As the Acquisition

occurred on January 2, 2025, the Company’s results of operations for the three and six months ended June 30, 2025 include those

results attributable to the acquired operations of NTS.

June 30, 2024

Total Revenue

Net Income from Continuing Operations

The pro forma adjustments for the period presented

$ ( 195,031 )

$ ( 113,851 )

The pro forma adjustments for the periods presented

include additional amortization expense related to the fair value of the acquired intangible assets as if such assets were acquired on

January 1, 2024.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Property and Equipment, net

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Total property and equipment, net

Depreciation expense, for the three months ended

March 31, 2025 and 2024 was $ 105,976 and $0 , respectively.

Depreciation expense for the three and six months

ended June 30, 2025 was $ 121,539 and $ 227,515 , respectively.

The Company only holds property and equipment

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Intangible Assets, Net

Intangible assets, net consisted of the following at March 31, 2025

Intangible assets, net consisted of the following at June 30, 2025

and December 31, 2024:

March 31, 2025 (unaudited)*

June 30, 2025 (unaudited)*

December 31, 2024

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$ ( 6,922,751 )

* Amounts at March 31, 2025 reflect the Company’s intangible assets following the Acquisition and Divestiture.

Amortization expense for the three months ended

March 31, 2025 was $ 578,065 , as compared to $ 205,583 for the three months ended March 31, 2024.

The aggregate amortization expense for

each of the next five years and thereafter is estimated to be $ 1,495,892 in 2025, $ 1,449,562 in 2026, 2027 and 2028, $ 1,235,295 in 2029

and $ 2,134,843 thereafter.

* Amounts at June 30, 2025 reflect the Company’s intangible assets following the Acquisition and Divestiture.

Amortization expense for the three and six months

ended June 30, 2025 was $ 552,111 , and $ 1,130,176 , respectively, as compared to $ 205,583 and $ 411,166 , respectively, for the three and six

months ended June 30, 2024.

The aggregate amortization expense for each of the next five years and thereafter is estimated to be $ 943,781

in 2025, $ 1,449,562 in 2026, 2027 and 2028, $ 1,235,295 in 2029 and $ 2,134,843 thereafter.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Discontinued Operations

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received by Meteor Mobile that is attributable to the Business (such cash revenue, the “Legacy Business Revenue”), as follows:

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 ;

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”).

● 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 ;

● 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

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Accordingly, the assets and liabilities related to the Transferred Assets are presented as discontinued operations as of December 31,

2024 and for the three months ended March 31, 2024.

There were no remaining assets and liabilities related to the Divestiture as of March

31, 2025 and no results of operations for the three months ended March 31, 2025.

The $ 3.8 million impairment loss associated with the

Divestiture was recognized in the fourth quarter of 2024.

2024 and for the three and six months ended June 30, 2024.

There were no remaining assets and liabilities related to the Divestiture as

of June 30, 2025 and no results of operations for the three and six months ended June 30, 2025.

The $ 3.8 million impairment loss associated

with the Divestiture was recognized in the fourth quarter of 2024.

In the normal course of business, certain amounts

were due to Meteor Mobile by the Company.

These amounts are included in other accrued liabilities on the consolidated balance sheet in

the amount of $ 421,622 .

These amounts are included in “other accrued liabilities” on the consolidated balance

sheet at June 30, 2025 in the amount of $ 371,852 .

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

The following table summarizes the operating results

of the Transferred Assets for the period indicated:

of the Transferred Assets for the periods indicated:

Subscription revenue

3 unchanged sentences

Cost of revenue

Sales and marketing expense

Product development expense

Sales, marketing and product development expense

General and administrative expense

Total Costs and Expenses

Income from discontinued operations

Income tax provision

Net loss from discontinued operations

$ ( 237,992 )

INTELLIGENT PROTECTION MANAGEMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Loss) Income from discontinued operations

Income tax provision (expense)

Net income from discontinued operations

The following table summarizes the assets and

8 unchanged sentences

Total Liabilities - discontinued operations

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Accrued Expenses and Other Current Liabilities

10 unchanged sentences

tax rate and records cumulative adjustments as necessary.

For the three months ended March 31, 2025, the

Company recorded an income tax benefit of $ 2,060,065 , which included a discrete tax benefit of $ 1,665,189 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 due to the release of a portion of its valuation allowance.

The effective tax rate for the three months ended March

31, 2025 was 164.7 % which differs from the statutory rate of 21 % primarily related to changes in the Company’s valuation allowance

due to the business combination accounting.

The Company continues to conclude that its U.S.

deferred tax assets are not realizable on

a more-likely-than-not basis and maintains a full valuation allowance against such deferred tax assets.

For the three months ended March 31, 2024, the Company recorded an

income tax benefit of $ 598,710 .

The effective tax rate for the three months ended March 31, 2024 was 19.3 % which differs from the statutory

rate of 21 % primarily relate to changes in the Company’s valuation allowance, difference in foreign tax rates from the U.S.

rate of 21 % and state and local taxes.

For the three and six months ended June 30, 2025,

the Company recorded an income tax provision of $ 72,007 , and an income tax benefit of $ 1,988,058 , respectively which included a discrete

tax benefit of $ 1,665,189 recorded during the three month period ended March 31, 2025 which primarily related to a partial reversal of

its valuation allowance as the Acquisition created a source of future taxable income allowing for the recognition of certain deferred

The effective tax rate for the six months ended June 30, 2025 was 89.2 % which differs from the statutory rate of 21 % primarily

related to a reduction in the Company’s valuation allowance.

The Company continues to conclude that its U.S.

deferred tax assets are not realizable on a more-likely-than-not

basis and maintains a full valuation allowance against such deferred tax assets.

deferred tax assets

are not realizable on a more-likely-than-not basis and maintains a full valuation allowance against such deferred tax assets.

For the three and six months ended June 30, 2024,

the Company recorded an income tax benefit of $ 66,208 and income tax provision of $ 532,502 , respectively.

The effective tax rate for

the six months ended June 30, 2024 was ( 70.0 )%, which differs from the statutory rate of 21 % as a result in the changes in the U.S.

valuation allowance and a mix of earnings between the United States and Canada.

The Company concluded that its U.S.

deferred tax assets are

not realizable on a more-likely-than-not basis and maintains a full valuation allowance against such deferred tax assets.

Stockholders’ Equity

The Intelligent Protection Management Corp.

and Restated 2011 Long-Term Incentive Plan (the “2011 Plan”) was terminated as to future awards on May 16, 2016.

22,480 shares of the Company’s common stock may be issued pursuant to outstanding options awarded under the 2011 Plan;

no additional awards may be granted under such plan.

The Intelligent Protection Management Corp.

2016 Long-Term Incentive Plan (the “2016

Plan”) was adopted by the Company’s stockholders on May 16, 2016 and permits the Company to award stock options (both incentive

stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance awards,

dividend equivalent rights, and other stock-based awards and cash-based incentive awards to its employees (including an employee who is

also a director or officer under certain circumstances), non-employee directors and consultants.

The maximum number of shares of common

stock that may be issued pursuant to awards under the 2016 Plan is 1,300,000 shares, 100 % of which may be issued pursuant to incentive

stock options.

In addition, the maximum number of shares of common stock that may be issued under the 2016 Plan may be increased by an

indeterminate number of shares of common stock underlying outstanding awards issued under the 2011 Plan that are forfeited, expired, cancelled

or settled in cash.

As of March 31, 2025, there were 494,429 shares available for future issuance under the 2016 Plan.

Intelligent Protection Management Corp.

2025 Long-Term Incentive Plan

On May 8, 2025, at the Company’s 2025 annual

meeting of stockholders (the “Annual Meeting”), the Company’s stockholders approved the Intelligent Protection Management

2025 Long-Term Incentive Plan (the “2025 LTIP”).

As a result, the 2025 LTIP became effective on May 8, 2025.

with the adoption of the 2025 LTIP, the 2016 Plan (defined below) was terminated as to future awards.

The 2025 Plan provides for the granting

of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance

awards, dividend equivalent rights, and other awards which may be granted singly, in combination, or in tandem, and which may be paid

in cash, shares of common stock, other consideration, or any combination thereof.

Subject to certain adjustments, the maximum aggregate

number of shares of common stock that may be delivered pursuant to awards under the 2025 Plan is 1,200,000 shares, plus any Prior Plan

Awards (as defined in the 2025 LTIP).

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Intelligent Protection Management Corp.

Amended and Restated 2011 Long-Term Incentive Plan (the “2011 Plan”) was terminated

as to future awards on May 16, 2016.

As of June 30, 2025, a total of 22,480 shares of the Company’s common stock may be issued pursuant

to outstanding options awarded under the 2011 Plan;

however, no additional awards may be granted under such plan.

The Intelligent Protection

Management Corp.

2016 Long-Term Incentive Plan (the “2016 Plan”) was terminated as to future awards on May 8, 2025.

June 30, 2025, a total of 643,609 shares of the Company’s common stock may be issued pursuant to outstanding options awarded under

the 2016 Plan;

however, no additional awards may be granted under such plan.

Stock Options

The following table summarizes the assumptions

used in the Black-Scholes pricing model to estimate the fair value of the options granted during the nine months ended March 31, 2025:

used in the Black-Scholes pricing model to estimate the fair value of the options granted during the six months ended June 30, 2025:

Expected volatility

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historical volatilities beginning at the grant date and going back for a period of time equal to the expected life of the award.

Company estimates potential forfeitures of stock awards and adjusts recorded stock-based compensation expense accordingly.

estimates pre-vesting forfeitures primarily based on the Company’s historical experience and is adjusts to reflect actual forfeitures

as the stock-based awards vest.

estimates potential forfeitures of stock awards and adjusts recorded stock-based compensation expense accordingly.

The Company estimates

pre-vesting forfeitures primarily based on the Company’s historical experience and is adjusts to reflect actual forfeitures as the

stock-based awards vest.

The following table summarizes stock option activity

during the three months ended March 31, 2025:

during the six months ended June 30, 2025:

Stock Options:

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Expired, during the period

Outstanding at March 31, 2025

Exercisable at March 31, 2025

At March 31, 2025, there was $ 342,315 of total unrecognized compensation

expense related to stock options, which is expected to be recognized over a weighted average period of 1.4 years.

On March 31, 2025, the aggregate intrinsic value

Outstanding at June 30, 2025

Exercisable at June 30, 2025

At June 30, 2025, there was $ 252,991 of total

unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of 2.5 years.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

On June 30, 2025, the aggregate intrinsic value

of stock options that were outstanding and exercisable was $ 30,270 and $ 29,070 , respectively.

On March 31, 2024, the aggregate intrinsic

On June 30, 2024, the aggregate intrinsic

value of stock options that were outstanding and exercisable was $ 423,850 and $ 259,295 , respectively.

1 unchanged sentence

is calculated based on the exercise price of the underlying awards and the fair value of such awards as of the period-end date.

During the three months ended March 31, 2025,

the Company granted stock options to members of the Board of Directors (the “Board”) to purchase an aggregate of 100,000 shares

During the six months ended June 30, 2025, the

Company granted stock options to members of the Board of Directors (the “Board”) to purchase an aggregate of 100,000 shares

of common stock at a weighted average exercise price of $ 1.94 per share.

1 unchanged sentence

the last day of each calendar quarter in 2025 and have a term of ten years.

During the three months ended March 31, 2025, the Company

also granted options to employees to purchase an aggregate of 175,000 shares of common stock.

These options vest in various tranches,

ranging from equally over four years to fifty percent at grant date with the remaining balance vesting during the third quarter of fiscal

During the six months ended June 30, 2025, the Company also

granted options to employees to purchase an aggregate of 175,000 shares of common stock.

These options vest in various tranches, ranging

from equally over four years to fifty percent at grant date with the remaining balance vesting during the third quarter of fiscal 2025.

The options have a term of ten years and have an exercise price of $ 2.01 .

The aggregate fair value for the options granted during

the three months ended March 31, 2025 and 2024 was $ 545,550 and $ 72,240 , respectively.

The aggregate fair value for the options granted during the

six months ended June 30, 2025 and 2024 was $ 545,550 and $ 72,240 , respectively.

Stock-based compensation expense for the Company’s

stock options for the three months ended March 31, 2025 and 2024, totaled $ 167,629 and $ 59,311 , respectively and is included in general

and administrative expenses in the condensed consolidated statements of operations.

stock options for the three and six months ended June 30, 2025 totaled $ 77,760 and $ 245,389 , respectfully.

Stock-based compensation expense

for the Company’s stock options for the three and six months ended June 30, 2024, totaled $ 32,250 and $ 91,561 , respectively.

stock-based compensation expense is included in “general and administrative expenses” in the condensed consolidated statements

of operations.

Series A Preferred Stock

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the Acquisition, the Company issued 4,000,000 shares of Series A Preferred Stock.

Stock Repurchase Plan

On May 8, 2025, the Board approved a stock repurchase

plan for up to $ 400,000 of the Company’s 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 the

Company’s common stock, general market and economic conditions, alternative investment opportunities and other corporate considerations.

As of June 30, 2025 104,600 shares of common stock had been repurchased by the Company pursuant to the Stock Repurchase Plan at an average

price of $ 2.03 per share, or an aggregate of $ 212,798 .

Charter Amendment

On May 8, 2025, at the Annual Meeting, the Company’s

stockholders approved an amendment to the Company’s Certificate of Incorporation, as amended, to increase the Company’s shares

of authorized common stock from 25,000,000 to 50,000,000 .

The amendment was filed with the Secretary of State of the State of Delaware

on May 8, 2025.

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Treasury Shares

As of March 31, 2025 and December 31, 2024, the

Company had 641,963 shares of its common stock, respectively, classified as treasury shares on the Company’s consolidated

balance sheets.

As of June 30, 2025 and December 31, 2024, the

Company had 746,563 and 641,963 shares of its common stock, respectively, classified as treasury shares on the Company’s

consolidated balance sheets.

Net Income (Loss) Per Share

2 unchanged sentences

during the period as defined by ASC Topic 260, Earnings Per Share .

Diluted earnings per share is computed using the weighted average

number of common shares and, if dilutive, potential common shares outstanding during the period.

Potential common shares consist of the

incremental common shares issuable upon the exercise of stock options (using the treasury stock method).

To the extent stock options are

antidilutive, they are excluded from the calculation of diluted loss per share.

For the three months ended March 31, 2025 and 2024, 845,136

and 763,736 of shares issuable upon the exercise of outstanding stock options, respectively, were not included in the computation of diluted

net loss per share because their inclusion would be antidilutive.

The Company applies the multiple-class method in calculating

earnings per share.

Earnings and losses are shared pro-rata between the multiple classes of shares.

For 2025, the Company had two classes

of stock, Series A Preferred Stock and common stock, that the calculations for weighted-average number of shares and earnings per share

by class were based on.

Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential

common shares outstanding during the period.

Potential common shares consist of the incremental common shares issuable upon the exercise

of stock options (using the treasury stock method).

To the extent stock options are antidilutive, they are excluded from the calculation

of diluted loss per share.

For the three months ended June 30, 2025 and 2024, 845,136 and 763,736 of shares issuable upon the exercise

of outstanding stock options, respectively, were not included in the computation of diluted net loss per share because their inclusion

would be antidilutive.

The following table summarizes the net loss per

1 unchanged sentence

Three Months Ended

Six Months Ended

Net loss from continuing operations

$ ( 1,050,028 )

Net loss from discontinued operations

$ ( 1,293,053 )

Net income (loss) – basic and diluted

$ ( 241,498 )

Weighted average shares outstanding – basic

Weighted average shares outstanding – diluted

( 1,547,368 )

Net income from discontinued operations

Net loss – basic and diluted

$ ( 1,050,028 )

$ ( 934,151 )

$ ( 241,498 )

( 1,426,458 )

Weighted average shares outstanding – basic and diluted

Per share data:

Basic from continuing operations

Diluted from continuing operations

Basic from discontinued operations

Diluted from discontinued operations

Basic from operations

Diluted from operations

Basic and diluted from continuing operations

Basic and diluted from discontinued operations

Basic and diluted from operations

Three Months Ended

June 30, 2025

Series A Preferred Stock

Allocation of net loss

$ ( 318,150 )

$ ( 731,878 )

Weighted average shares outstanding – basic and diluted

Net loss per share – basic and diluted

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Six Months Ended

June 30, 2025

Series A Preferred Stock

Allocation of net loss

$ ( 168,705 )

Weighted average shares outstanding – basic and diluted

Net loss per share – basic and diluted

On April 9, 2021, the

6 unchanged sentences

The new extension gives the Company an option to terminate the second year in July 2025.

The Company’s monthly office rent payments under the lease are currently approximately $ 7,081 per month.

As of March 31, 2025,

the Company had no long-term leases that were classified as financing leases and did not have additional operating or financing leases

that had not yet commenced.

Company’s monthly office rent payments under the lease are currently approximately $ 7,081 per month.

As of June 30, 2025, the

Company had no long-term leases that were classified as financing leases and did not have additional operating or financing leases that

had not yet commenced.

In connection with the

6 unchanged sentences

have not been included in the Company’s operating lease right-of-use asset and liability, as the Company is not reasonably certain

to exercise such options as of January 2, 2025 or March 31, 2025.

The Company’s monthly rent payments under the lease are currently

$ 17,767 per month.

to exercise such options as of June 30, 2025.

The Company’s monthly rent payments under the lease are currently $ 17,767 per month.

In connection with the

15 unchanged sentences

from one year to two years, which has not been included in the Company’s operating lease right-of-use asset and liability, as the

Company is not reasonably certain exercise such options as of March 31, 2025.

Company is not reasonably certain exercise such options as of June 30, 2025.

The Company’s monthly rent payments under the lease

are currently $ 53,853 per month.

As of March 31, 2025,

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

As of June 30, 2025,

the Company had no long-term leases that were classified as financing leases and did not have additional operating or financing leases

that had not yet commenced.

As of March 31, 2025,

As of June 30, 2025,

the Company had operating lease liabilities of approximately $ 1,478,971 (of which $ 768,060 is classified as short-term liabilities and

$ 879,098 is classified as long term liabilities) and operating lease right-of-use assets of approximately $ 1,692,698 (of which $ 882,568

is classified as a short term asset and $ 810,130 is classified as a long term asset) and all of which are included in the accompanying

condensed consolidated balance sheets.

Total rent expense for the three months ended

March 31, 2025 was $ 185,628 , of which $ 1,500 was sublease income.

Total rent expense for the year ended March 31, 2024 was $ 20,841 , of

which $ 1,500 was sublease income.

Rent expense is recorded under general and administrative expense in the consolidated statements of

$ 710,911 is classified as long-term liabilities) and operating lease right-of-use assets of approximately $ 1,483,724 , all of which

are included in the accompanying condensed consolidated balance sheets.

Total rent expense for the three and six months

ended June 30, 2025 was $ 226,833 and $ 453,666 respectively, of which $ 8,350 and $ 9,850 , respectively, was sublease income.

expense for the three and six months ended June 30, 2024 was $ 21,432 , and $ 40,829 , respectively, of which $ 1,500 and $ 3,000 , respectively,

was sublease income.

Rent expense is recorded under general and administrative expense in the consolidated statements of operations.

The following table summarizes the Company’s

1 unchanged sentence

Three Months Ended

Cash paid for amounts included in the measurement of operating lease liabilities:

$ 20,550 $ 20,841

Weighted average assumptions:

Remaining lease term 0.7 0.9

Discount rate 2.3 % 2.3 %

Iron Mountain Lease:

Cash paid for amounts included in the measurement of operating lease liabilities:

$ 53,301 $ --

Weighted average assumptions:

Remaining lease term 1.1 --

Discount rate 4.8 % --

Six Months Ended

Total Leases:

Cash paid for amounts included in the measurement of operating lease liabilities

$ 160,042 $ --

2025 At December 31,

Weighted average assumptions:

1 unchanged sentence

Discount rate 4.7 % 2.3 %

As of March 31, 2025, future minimum payments under non-cancelable

operating leases were as follows:

For the years ending December 31,

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

As of June 30, 2025, future minimum payments under non-cancelable operating

leases were as follows:

For the year ended December 31,:

present value adjustment

Present value of minimum lease payments

INTELLIGENT PROTECTION MANAGEMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Current liability

Long term liability

Commitments and Contingencies

4 unchanged sentences

(collectively, “Cisco”), in the U.S.

District Court for the Western District of

Texas (the “Court”).

District Court for the Western District of Texas

(the “Court”).

The Company alleged that certain of Cisco’s products have infringed U.S.

and that the Company was entitled to damages.

6,683,858, and that

the Company was entitled to damages.

On August 29, 2024, the jury awarded the Company

$ 65.7 million (the “Award”) in a jury verdict in connection with the Lawsuit.

On October 8, 2024, an order granting

a motion for final judgment was entered into in the Court in connection with Lawsuit in favor of the Company in the amount of the Award

On October 8, 2024, an order granting a

motion for final judgment was entered into in the Court in connection with Lawsuit in favor of the Company in the amount of the Award

and started the time for filing any post-trial motions or appeal.

The exact amount of the Award proceeds to be

received by the Company (including any interest related thereto) will be determined based on a number of factors and will reflect the

deduction of significant litigation-related expenses, including legal fees.

Consequently, the Company estimates that it would receive

no more than one third of the gross proceeds in connection with the Award, subject to post-trial proceedings (including any potential

appellate proceedings by Cisco).

Cisco ManyCam

The exact amount of the Award proceeds to be received

by the Company (including any interest related thereto) will be determined based on a number of factors and will reflect the deduction

of significant litigation-related expenses, including legal fees.

Consequently, the Company estimates that it would receive no more than

one third of the gross proceeds in connection with the Award, subject to post-trial proceedings (including any potential appellate proceedings

Cisco ManyCam Litigation

On March 7, 2025, Cisco Systems, Inc.

9 unchanged sentences

Legal Proceedings

The Company may be included in legal proceedings, claims and assessments

arising in the ordinary course of business.

The Company evaluates the need for a reserve for specific legal matters based on the probability

of an unfavorable outcome and the reasonability of an estimable loss.

No reserve was deemed necessary as of March 31, 2025.

Subsequent Events

Business Loan Agreement and Credit Agreement

and Revolving Promissory Note

The Company may be included in legal proceedings,

claims and assessments arising in the ordinary course of business.

The Company evaluates the need for a reserve for specific legal matters

based on the probability of an unfavorable outcome and the reasonability of an estimable loss.

No reserve was deemed necessary as of June

INTELLIGENT PROTECTION

MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Credit Agreement and Revolving Promissory

On April 10, 2025, the Company, Intelligent Protection

6 unchanged sentences

of the Borrowers.

The Company has included in restricted cash a certificate of deposit in the amount of $ 1,014,714 to collateralize this

line of credit.

The Facility will mature on April 10, 2026 (the

“Maturity Date”), and all outstanding principal amounts and accrued and unpaid interest thereon shall be due and payable

on such date unless the Facility is renewed or extended pursuant to the terms of the Loan Agreements.

The Facility may be drawn from

April 10, 2025 to the Maturity Date.

“Maturity Date”), and all outstanding principal amounts and accrued and unpaid interest thereon shall be due and payable on

such date unless the Facility is renewed or extended pursuant to the terms of the Loan Agreements.

The Facility may be drawn from April

10, 2025 to the Maturity Date.

As of the date of this Quarterly Report on Form 10-Q, no amounts were outstanding under the Facility.

9 unchanged sentences

applicable law (the “Annual Percentage Rate”).

Stock Repurchase Plan

On May 8, 2025, the Board approved a stock repurchase

plan for up to $ 400,000 of the Company’s 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 the

Company’s common stock, general market and economic conditions, alternative investment opportunities and other corporate considerations.

As of the date of this report, no shares of common stock had been repurchased by the Company pursuant to the Stock Repurchase Plan.

Charter Amendment

On May 8, 2025, at the Company’s 2025 annual

meeting of stockholders (the “Annual Meeting”), the Company’s stockholders approved an amendment to the Company’s

Certificate of Incorporation, as amended, to increase the Company’s shares of authorized common stock from 25,000,000 to 50,000,000 .

The amendment was filed with the Secretary of State of the State of Delaware on May 8, 2025.

Intelligent Protection Management Corp.

2025 Long-Term Incentive Plan

On May 8, 2025, at Annual Meeting, the Company’s

stockholders approved the Intelligent Protection Management Corp.

2025 Long-Term Incentive Plan (the “2025 LTIP”).

the 2025 LTIP became effective on May 8, 2025.

Concurrently with the adoption of the 2025 LTIP, the 2016 Plan was terminated.

Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted

stock units, performance awards, dividend equivalent rights, and other awards which may be granted singly, in combination, or in tandem,

and which may be paid in cash, shares of common stock, other consideration, or any combination thereof.

Subject to certain adjustments,

the maximum aggregate number of shares of common stock that may be delivered pursuant to awards under the 2025 Plan is 1,200,000 shares,

plus any Prior Plan Awards (as defined in the 2025 LTIP).

Management has evaluated subsequent events or

transactions occurring through the date the condensed consolidated financial statements were issued and determined that no other events

or transactions are required to be disclosed herein.

Subsequent Events

Management has evaluated subsequent events or transactions occurring through the date the condensed consolidated financial statements

were issued and determined that no events or transactions are required to be disclosed herein.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements