Related Party Transactions |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions | 13. Related Party Transactions
Relationship
As of June 30, 2026 and December 31, 2025, Newtek beneficially owned approximately 30.6% of the Company’s issued and outstanding common stock or common-equivalent equity (on an as-converted and fully-diluted basis). Newtek is also a significant customer of the Company, and its Chairman is a member of the Board.
Deposit Accounts at Newtek Bank
The Company has a commercial banking relationship with Newtek Bank. At June 30, 2026 the Company had $1,200,776 on deposit in commercial accounts with Newtek Bank, as well as a certificate of deposit in the amount of $1,056,293. At December 31, 2025, the certificate of deposit was classified as restricted cash as it was used to secure the credit agreement described below. The credit agreement matured on April 10, 2026, and therefore, at June 30, 2026, these amounts were no longer classified as restricted cash.
Revenue and Accounts Receivable
Revenue from Newtek and its subsidiaries and affiliates are presented below:
Accounts receivable from Newtek and its subsidiaries and affiliates are presented below:
These amounts are unsecured, non-interest bearing and due under normal trade terms. Management did not record an allowance for credit losses related to these balances as of any of the periods presented.
Accounts Payable, Accrued Expenses and other General and Administrative Expenses
The Company has a referral arrangement with Newtek whereby it pays commissions for referrals of customers services. Included in accounts payable and accrued expenses at June 30, 2026 and December 31, 2025 was $58,675 and $46,450, respectively, in connection with these payments. For the three months ended June 30, 2026 and 2025, the Company paid Newtek $100,365 and $79,521, respectively, in connection with these agreements. For the six months ended June 30, 2026 and 2025, the Company paid Newtek $225,717 and $155,704, respectively, in connection with these agreements. These amounts are unsecured, non-interest bearing, and due under normal trade terms.
As of June 30, 2026 and December 31, 2025, deferred revenue related to the Company’s arrangement with Newtek totaled approximately $55,000.
In addition, the Company subleased space to an affiliate of Newtek for the three and six months ended June 30, 2026 and received $10,275 and $20,550, respectively, which was offset against rent expense.
Concentration
Because Newtek is both a significant shareholder and a major customer, the Company has a concentration of revenue with this related party. The loss of this customer could have a material adverse effect on the Company’s operations.
Business Loan Agreement and Credit Agreement and Revolving Promissory Note
On April 10, 2025, the Company, Intelligent Protection LLC, a wholly owned subsidiary of the Company (“IPM LLC” and, together with the Company, the “Borrowers”), and Newtek Bank, National Association (“Newtek Bank”), a subsidiary of Newtek, entered into that certain business loan agreement and that certain credit agreement and revolving promissory note (together, the “Loan Agreements”), which provided for a secured revolving line of credit to the Borrowers in the maximum amount of $1,000,000 on the terms and conditions set forth in the Loan Agreements (the “Facility”). The obligations of the Borrowers under the Loan Agreements were secured by substantially all of the assets of the Borrowers.
The Facility matured on April 10, 2026. No amounts were drawn on the revolving line of credit during its term. |
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