Item 1. Business
ITEM
1. BUSINESS
Company
Overview
We provide a comprehensive range of IT-related
services, including managed IT security services, secure private cloud hosting, managed backup and disaster recovery, professional services,
procurement services, web hosting, 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 also offer and 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. We have an over 20-year history of technology innovation and hold eight patents.
On January 2, 2025 (the “Closing Date”),
we completed (i) the acquisition of Newtek Technology Solutions, Inc., a New York corporation (“NTS”), and such acquisition,
the “Acquisition”), and (ii) the sale 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 (such sale,
the “Divestiture,” and, together with the Acquisition, the “Transactions”). Prior to the completion of the Transactions,
we operated a network of consumer applications. Our product portfolio included Paltalk, Camfrog and Tinychat, which together hosted a
large collection of video-based communities. Our other products included Vumber, a telecommunications service provider. Following 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. In addition, prior to the Closing Date, we ceased all operations of our Tinychat service and application.
We
were incorporated under the laws of the State of Delaware in 2005. Our principal executive office is located at 30 Jericho Executive
Plaza Suite 400E, Jericho, NY 11753.
Our
IT and Cloud-Based Solutions
We
sell and provide a range of services across six core areas, each as further described below: (i) managed IT security services, (ii) secure
private cloud hosting, (iii) managed backup and disaster recovery, (iv) professional services, (v) procurement services and (vi) web hosting.
1. 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. Managed IT security services are intended to
ensure that a client’s IT infrastructure and services remain operational, secure and optimized. Customers of our managed IT security
services typically pay a recurring fee, often based on service-level agreements that define the specific services and performance metrics.
2. 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 business-critical applications and client data.
1
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 certain license agreements. As of December
31, 2025, the terms of the license agreements for the Data Centers located in Arizona and New Jersey extended through 2027 and 2026,
respectively. Subsequent to year end, we amended our agreement with the Data Center in Phoenix, Arizona through August 31, 2032. 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. The Data Centers each conform to The Uptime
Institute’s Tier 3 Certification, which is a globally recognized standard for validating critical data center infrastructure. The
Tier 3 classification provides us with a degree of confidence that the Data Centers provide the necessary power, cooling, maintenance,
and fault tolerance required for secure and reliable operations. Our critical infrastructure, hosted within the Data Centers, is designed
to meet and exceed Tier 3 standards in all relevant categories. This allows us to deliver secure and compliant services to customers
within heavily regulated industries, including financial services and healthcare, and other industries. Additionally, we incorporate
a redundant, carrier-neutral network design for communications paths, along with multiple hosting locations for our services, which improve
the availability and resilience of our 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. We actively engage with third
parties to enhance our secure private cloud offerings with artificial intelligence (“AI”) features and benefits. Revenue
from such cloud services is recognized ratably over the period in which the cloud services are provided.
3. 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. Our disaster recovery solutions are designed to offer quick restoration of systems and data with minimal downtime, supported
by flexible recovery plans tailored to meet customers’ specific needs. With continuous monitoring, end-to-end encryption, and expert
support available 24/7, we aim to ensure that our customers’ data is secure, accessible and compliant with industry standards.
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.
4. 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, hybrid or cloud computing solutions, website development, developing or integrating systems and software, and IT cost
management. In addition, we are planning to launch an AI Data Readiness solution in the second quarter of 2026 that we believe will improve
the reliability, security, and outcome of adopting AI technologies by assessing, structuring, and securing business data in a safe and
effective manner.
5. 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 customers, or (ii) obtain hardware or software on behalf of our customers
and perform additional configuration and/or add additional inputs to the products before the products are shipped to our customers. 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. For each type of procurement service, our customers have their own negotiated contract
and payment terms. When we provide a combination of hardware and software products with the provision of services, we will separately
identify our performance obligations under the contract and the hardware and/or software products or services that will be provided.
The total transaction price for an arrangement with multiple performance obligations is typically allocated at contract inception to
each performance obligation in proportion to the stand-alone selling price of the hardware or software. The selling price is the price
at which we would sell a promised good or service separately to a customer. We estimate the price based on observable inputs, including
direct labor hours and allocable costs, or use observable stand-alone prices when they are available.
2
6. 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. Our web hosting services are designed to provide
customer websites with an additional layer of protection from cyber attacks and threats. Each of our customers has their own contract
and payment terms with respect to our web hosting services. The duration of such contracts is typically between one and four years, although
the term may vary based on the needs of each particular customer. Customers of our web hosting services are invoiced on a monthly basis
and pay a monthly fee, with revenue recognized on a monthly basis.
Our
ManyCam Software Product
In
addition to our IT and cloud-based solutions, we offer and 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 cross sell ManyCam as an offering for our customers and seek to optimize our cross-selling efforts of ManyCam with
our other technology solutions.
Customers
We
serve a diverse customer base across various industries including, among others, finance, legal, healthcare and manufacturing, providing
innovative solutions that enhance operational reliability and prevent cybersecurity risk.
Seasonality
Other
than our procurement services, our business generally does not experience significant seasonality, and demand for our solutions remains
steady throughout the year. Our procurement services experience a seasonal pattern, as revenues are typically lower as our customers
get closer to the end of their budgeted spending periods, which generally tend to be the fourth quarter of a given fiscal year.
Employees
and Human Capital
We
are committed to fostering a diverse and inclusive workplace, investing in employee development, and maintaining a strong culture of
innovation and collaboration. As of March 13, 2026, we had 53 full-time employees and one part-time employee. We believe that our future
success depends, in part, on our continued ability to hire, assimilate and retain qualified personnel. We attract and retain employees
by offering training, bonus opportunities, competitive salaries and a comprehensive benefits package.
Our
Business Strategies
Cloud
Infrastructure and Cybersecurity Solutions
Our
continued growth depends on attracting new customers through the introduction of new services and further penetration of the cloud infrastructure
and cybersecurity sectors. Our principal growth strategy is to invest in the development of proprietary solutions, expand our sales and
marketing efforts with respect to such solutions, and increase our customer base through potential platform partnerships and new and
existing advertising campaigns that we run through internet and mobile advertising networks, all while balancing the capital needs of
our business. With respect to our cloud infrastructure solutions, we intend to drive growth by leveraging strategic partnerships, expanding
our market reach by leveraging our high-performance, scalable solutions, and optimizing deployment speed to meet the evolving needs of
enterprises migrating to the cloud. Our strategy for cybersecurity solutions focuses on delivering cutting-edge, compliance-driven security
solutions through an integrated approach, prioritizing proactive threat mitigation, automation, and seamless implementation to enhance
customer trust and accelerate adoption.
3
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.
Acquiring
and Investing in Complementary Technologies and Businesses
Our strategy also includes acquiring or investing
in technologies, solutions or businesses that complement our business and cross-selling them to additional synergistic businesses. In
furtherance of this strategy, we have strategically added specialized employees and complementary products and technologies to our existing
business. In addition, we continue to explore strategic opportunities, including, but not limited to, potential mergers or acquisitions
of other assets or entities that are synergistic to our business.
Defend
our Intellectual Property
As
of the date of this report, we have a portfolio of eight issued patents. We have successfully defended certain of our intellectual property
in the past and have historically generated revenue through licensing fees for the use of our patents. We intend to continue defending
our intellectual property rights.
Marketing
Strategy
We invest in advertising and marketing primarily
for the purpose of acquiring clients for our products and solutions. By emphasizing our deep expertise in cloud infrastructure, cybersecurity
and managed services, we differentiate from commodity providers through a consultative approach that drives strategic value. We aim to
accelerate growth through targeted industry verticals, strategic partnerships, and direct client engagement, leveraging our proven ability
to streamline IT operations, enhance security postures, and enable businesses to focus on their core objectives. We believe our proactive,
high-touch service model ensures long-term client relationships and sustained competitive advantage in a rapidly evolving market.
We
sell our solutions exclusively through our sales force. Our sales force is comprised of senior account executives that concentrate
on named account territories, senior solution architects that provide dedicated support to our senior account executives and
affiliate sales efforts, as well as other sales personnel that manage inbound leads from our website and referrals from NewtekOne,
Inc. (“Newtek”) under our referral arrangement (as further described below). In addition to managing client
relationships, our sales force is focused on expanding the number of solutions our customers purchase from us by introducing them to
additional solutions. We also utilize search engine optimization, search engine marketing, generative engine optimization and
targeted marketing campaigns in furtherance of our goals.
Competition
and Our Industry
Competition
in our industry remains fierce. The market for cloud-managed IT and cybersecurity solutions is extremely dynamic and is undergoing constant
change. We believe this environment creates significant opportunities for us as well as our direct and indirect competitors. Our principal
competitors are managed IT service providers, such as Konica Minolta Business Solutions, Rackspace Technology, Inc., Cognizant Technology
Solutions Corporation, NTT Ltd., All Covered, Flexential, DXC Technology Company, Logicalis Group, Insight Enterprises, Inc. and CDW
Corporation.
Many
of our competitors have substantially greater financial, managerial, technological and other resources than we do and may be more effective
at developing, promoting and supporting their products. Additionally, our competitors may offer products and services that we do not
provide, which may have desirable features or may be offered at lower prices. In addition, many of our competitors have more extensive
customer bases and broader customer relationships than we have, including relationships with our potential customers. Additionally,
we have arrangements with several third-party partners that enable us to incorporate AI features into our secure private cloud offerings.
Developments in the AI sector are occurring at a rapid pace, and our competitors’ services may already include similar or superior
AI features.
4
In
order to compete effectively, we seek to offer solutions that are differentiated from existing services, superior in quality and more
appealing than those of our competitors. We believe that our solutions compete favorably against those offered by our competitors due
to our hands-on, white-glove consulting approach, which we believe goes beyond standard offerings to deliver personalized, expert driven
solutions. Unlike providers that take a one-size-fits-all-approach, we aim to strategically advise our customers, enabling businesses
to offload complex IT, cloud, and cybersecurity needs to a trusted advisor. This allows our customers to focus on higher-value initiatives,
while we provide execution, proactive problem solving, and a fully-optimized technology environment tailored to their specific goals.
Governmental
Regulations and Other Compliance Obligations
We are subject to a number of U.S. federal and
state laws, regulations and policies that affect companies conducting business on the internet, many of which are still evolving and being
litigated in the courts and could be interpreted in ways that could harm our business. These laws and regulations may involve, among other
things, AI, intellectual property, distribution of content, electronic contracts, competition, wiretapping, consumer protection and taxation.
The application and interpretation of these laws, regulations and policies are often uncertain and may have unpredictable consequences,
particularly in the new and rapidly evolving industry in which we operate.
We are subject to periodic examination by regulators
under the authority of the Federal Financial Institutions Examination Council (“FFIEC”) under its Guidance on the Supervision
of Technology Services Providers and the Gramm-Leach-Bliley Act of 1999, and federal, state and other laws that apply to technology service
providers for financial institutions, as a result of the services we provide to the institutions and entities they regulate. As a technology
service provider, we are examined by federal financial regulators on a rotating basis. These examinations are based on guidance from the
FFIEC, which is a formal interagency body empowered to prescribe uniform principles, standards and report forms for the examination of
financial institutions and to make recommendations to promote uniformity in the supervision of financial institutions. The examinations
cover a wide variety of subjects, including our management, acquisition and development activities, support and delivery, information
technology audits, cybersecurity, as well as our disaster preparedness and business recovery planning. The FFIEC has broad supervisory
authority to remedy any shortcomings identified in an examination. Following an examination, our financial institution customers may request
the open section of the report of examination through their lead examination agency.
In addition, the regulatory landscape related
to generative AI and machine learning is rapidly evolving and is likely to remain uncertain for the foreseeable future. As we develop
products or incorporate generative AI and machine learning technologies from third parties, we must comply with applicable laws and regulations.
Company
Internet Site and Availability of SEC Filings
Our
corporate website is located at www.ipm.com . We make available on that site, as soon as reasonably practicable, our Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, proxy statements, Current Reports on Form 8-K, other reports filed with or furnished to
the Securities and Exchange Commission (“SEC”), as well as any amendments to those filings. Our SEC filings, as well as our
Code of Conduct and other corporate governance documents, can be found in the Investor Relations section of our site and are available
free of charge. Amendments to our Code of Conduct and any grant of a waiver from a provision of the Code of Conduct requiring disclosure
under applicable SEC rules will be disclosed on our website. Information on our website is not part of this Annual Report on Form 10-K.
In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information
regarding us and other issuers that file electronically with the SEC.