INTELLIGENT PROTECTION MANAGEMENT CORP. (IPM) stock intrinsic value fair value estimate & owner earnings analysis

What the business is. Intelligent Protection Management (formerly Paltalk) became a different company on January 2, 2025. That day it bought Newtek Technology Solutions from NewtekOne for $4.0 million in cash and 4.0 million non-voting shares that convert one-for-one into common stock. It also sold its old Paltalk, Camfrog and Vumber consumer apps to Meteor Mobile for $1.35 million. Today it is a small US managed-IT provider. It sells managed security, secure private cloud hosting from leased suites in Phoenix, Arizona and Edison, New Jersey, backup and disaster recovery, professional services and hardware and software procurement. It also keeps the ManyCam streaming software. Revenue was $23.6 million in 2025 and $12.8 million in the first half of 2026, up 14% on the first half of 2025. Only 2025 and the first half of 2026 describe the current business, so earlier years are not used to set the level. We count 13.0 million shares: the roughly 9.0 million common shares plus NewtekOne's 4.0 million common-equivalent shares. What it earns. The business has not yet produced cash for owners. We measure owner earnings as operating cash flow, less swings in working capital, stock compensation and capital spending. On that basis 2025 came to about -$2.0 million (-$0.15 per share). Reported operating cash flow was +$1.1 million, but that was flattered by $2.5 million of one-time working-capital inflows, mostly collecting receivables taken over with the acquisition. The first half of 2026 came to about -$1.1 million, almost the same as the first half of 2025. Two items sit inside those losses. First, defense costs in a patent suit Cisco filed against ManyCam: $0.7 million in 2025 and $0.48 million in the first half of 2026. Second, interest on the cash balance: $0.34 million in 2025. Without both, the business loses roughly $1.5 to $1.7 million a year. We add back about $1.45 million a year of amortization on acquired customer relationships because it is not a cash cost. We do not treat those relationships as a growing asset. None of our cases assumes the business goes beyond modest profitability. We value the $7.49 million of cash at June 30, 2026 (including $2.26 million on deposit at Newtek Bank and money held as collateral) separately, so interest income is left out of the forecast. The company has no debt. It has a $4.2 million lease obligation, mainly from extending the Phoenix data center license to August 2032, which we treat as ongoing rent. Why we do not assume a quick turnaround. Revenue is growing, but mostly in low-margin procurement: up 70% in the first half of 2026, while technology services grew 9%. Professional liability insurance revenue fell from $1.42 million to $0.85 million. As a result, gross profit actually fell about 3% year on year, to $5.8 million, even though revenue rose 14%. The acquisition earn-out, worth up to $5 million if the acquired business hit profit targets for 2025 and 2026, was written down to zero at the end of 2025. NewtekOne and its affiliates, which also own about 30% of the company, provided 28% to 29% of revenue in 2026. That is a real concentration. The Cisco WebEx lawsuit. In August 2024 a jury awarded the company's Paltalk Holdings subsidiary $65.7 million against Cisco over WebEx. In August 2025 the trial court upheld the jury's findings on validity and infringement but ordered a new trial on damages. Cisco has also appealed the liability ruling to the Federal Circuit. The company says it expects to keep no more than one third of any gross recovery after legal fees. With the award set aside and liability still on appeal, there is no dollar amount we can support for the middle case, so that case counts nothing for the lawsuit. The upside appears only in the bull case. Base case, about $0.15 per share. Losses continue near the recent rate: about -$1.15 million in the second half of 2026 and -$2.1 million in 2027, including ManyCam defense costs. They then narrow steadily to breakeven by 2032 as technology services keep growing about 9% a year on a mostly fixed cost base and the insurance revenue runoff ends. After that, the business earns roughly nothing for owners. Value is the cash left after the losses, discounted at 6%: about $2.0 million. Bear case, about -$0.03 per share. Cash burn stays at about $2 million a year through 2030, with ManyCam defense costs of about $1 million in 2027. The patent office has already refused to review one of Cisco's two ManyCam patents, which makes a long fight likely. Cisco also wins its appeal, so the WebEx case is worth nothing. On this path the losses use up all of today's cash by about 2030 and still leave a small shortfall, with the Phoenix lease running to 2032. In other words, the company would owe slightly more than it is worth, before any damages in the ManyCam case, which we cannot estimate. Bull case, about $1.62 per share. Technology services growth lifts results to breakeven in 2028. Owner earnings reach about $1 million a year from 2030 through 2035, then fade by 2040 as the Phoenix license and current contracts run out. That adds about $3.3 million on top of the cash. The Federal Circuit also upholds liability, and a damages retrial around 2028 produces about $35 million, roughly half the original verdict. The company's one-third share, about $11.7 million, is worth about $10.4 million today. Most of the bull value is the lawsuit. What the shares appear to be worth. Most of today's value is the $0.57 per share of cash, less what the business is likely to lose before it breaks even, plus a lawsuit that could be worth over $0.80 per share or nothing. The margin-of-safety price is $0.30, and it applies only once the operating business shows two straight quarters of positive owner earnings without help from the lawsuit. At that point most of the cash would no longer be at risk of being spent on losses. At that price, the remaining cash, a self-funding business and the lawsuit option imply a reasonable chance of a 20% annual return. Two things would make this analysis wrong. On the upside, gross profit could start growing with revenue. On the downside, NewtekOne could reduce its business with the company. Notes. Owner earnings rebuilt from the cash-flow statement matched net income plus non-cash charges exactly. In 2025 we treated all capital spending as maintenance, because the jump in revenue came from the acquisition and not from investment.