Good day, and welcome to the earnings call for Paltalk's Second Quarter ended June 30, 2023. At this time, all participants have been placed on a listen-only mode. It is now my pleasure to turn the floor over to your host, Jason Katz, Chief Executive Officer of Paltalk; and Kara Jenny, Chief Financial Officer of Paltalk. Kara, the floor is yours..

Hello, everyone, and welcome to the Paltalk operating and financial results conference call for the second quarter June 30, 2023. By now, everyone should have access to the earnings results press release which was issued earlier today at the close of market at 4:00 p.m. Eastern Time. This call is being webcast and will be available for replay.

In our remarks today, we will include statements that are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements about future results of operations, business strategies and plans, our relationships with our customers as well as market and potential growth opportunities.

In addition, management may make additional forward-looking statements in response to your questions.

Forward-looking statements are based on management's current knowledge and expectations as of today and are subject to certain risks, uncertainties and assumptions related to factors that may cause actual results to differ materially from those anticipated in the forward-looking statements.

We offer no assurance that these expectations and beliefs will prove to be correct. A detailed discussion of such risks and uncertainties are contained in our filings with the SEC including our most recent annual report on Form 10-K for the year ended December 31, 2022.

You should refer to and consider these factors when relying on such forward-looking information. The company does not undertake and expressly disclaims any obligation to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

On this call, we will refer to adjusted EBITDA, a non-GAAP measure that when used in combination with GAAP results, provide us and our investors with additional analytic tools to understand our operations.

For adjusted EBITDA, we have provided a reconciliation to the most directly comparable GAAP financial measure in our earnings press release, which will be posted on the Investor Relations section of our website at paltalk.com. And with that, I would like to introduce Paltalk's Chief Executive Officer, Jason Katz..

leveraging our recently completed integration of the ManyCam product into Paltalk product through upselling initiatives; further optimizing marketing spend to effectively realize a positive return on investment; developing a new and easier-to-use version of ManyCam that will be optimized for both consumer and enterprise applications; continuing to explore strategic opportunities, including, but not limited to, potential mergers or acquisitions of other assets or entities that are synergistic to our businesses.

Continuing to develop our consumer application platform strategy by seeking potential partnerships with large third-party communities to whom we could promote a co-branded version of our video chat products and potentially share in the incremental revenues generated by these partner communities; continuing to defend our intellectual property.

I trust this gives you some insight into the company initiatives we have implemented in order to conserve cash as we look to increase our subscribers and user engagement and return to positive cash flow and profitability to build stockholder value. Now I'd like to pass it to Kara for a financial summary of our second quarter ended June 30, 2023..

revenue for the three months ended June 30, 2023, increased by nearly 12% to $3 million compared to $2.6 million for the three months ended June 30, 2022. This increase was attributed to an increase in virtual goods revenue as well as a full year of sales from ManyCam. These increases were partially offset by a decrease in advertising revenues of 15%.

Loss from operations for the three months ended June 30, 2023, decreased by 73% or $0.8 million to a loss of $0.3 million, compared to a loss of $1.1 million for the same period in 2022. The decrease in the loss was attributed to the increased revenue.

Net income for the three months ended June 30, 2023, was $0.1 million compared to a net loss of $1.1 million for the three months ended June 30, 2022.

The improvement is attributed to the increase in sales, reduced expenses and to the recording of $0.3 million net recognized in connection with the company's recording of a refundable employee retention tax credit.

Adjusted EBITDA loss for the three months ended June 30, 2023, decreased by over 98% or $0.9 million to an adjusted EBITDA loss of $15,000 compared to adjusted EBITDA loss of $0.9 million for the three months ended June 30, 2022. Currently, the company has no long-term debt on its balance sheet.

We'd now like to move on to questions that were previously submitted..

The first question, can you comment on why the Cisco Webex trial has been delayed twice and pushed out to December?.

Like any plaintiff in a lawsuit, we are subject to the scheduling of the court as they control the calendar. We're pleased that the court denied Cisco's motion for summary judgment and stated that the trial is expected to be reset for December..

Are you still actively looking at bolt-on acquisitions? Can we expect something by the end of 2023?.

We are still active and are looking for the right acquisition with our advisers at Roth Capital and although we'd like to complete something as soon as feasible, we will not rush the process. We are committed to finding a deal that will enhance shareholder value..

The last question; when will ManyCam be marketed to Paltalk and Camfrog subscribers?.

Well, we recently launched a version of Paltalk that has ManyCam functionality and we continue to message users about the numerous benefits of ManyCam..

Thank you. Jason, back to you to close out the presentation..

Thanks, everyone, for your support and for joining us today. We are very grateful for your interest in our business.

We look forward to updating the market and our stockholders with our progress on our business objectives, patent litigation against Cisco WebEx with the trial now expected to start in the latter part of the fourth quarter, and potential strategic accretive acquisitions, which we continue to identify and analyse. Have a great day..

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation..