Revenue Performance - Total revenue for Q4 2023 decreased by 4% to $2.7 million compared to $2.8 million in Q4 2022[7] - Subscription revenue for Q4 2023 decreased by 5% to $2.6 million, while advertising revenue increased by 40% to $0.1 million[7] - For the year ended December 31, 2023, total revenue remained relatively unchanged at $11.0 million[7] - Total revenue for 2023 was $10,979,844, a slight decrease from $10,989,545 in 2022[31] - Subscription revenue for 2023 was $10,646,700, compared to $10,662,691 in 2022, indicating a marginal decline[31] Net Loss and Financial Improvement - Net loss for Q4 2023 improved by 43% to $0.3 million compared to a net loss of $0.5 million in Q4 2022[7] - Net loss for the year ended December 31, 2023 improved by 68.7% to $1.1 million compared to a net loss of $3.4 million in 2022[16] - The net loss for 2023 was $1,067,335, significantly improved from a net loss of $3,412,250 in 2022[31] - The company reported a basic net loss per share of $0.12 for 2023, an improvement from $0.35 in 2022[31] Cost Management - Total costs and expenses decreased to $13,050,087 in 2023 from $14,648,355 in 2022, reflecting a reduction of approximately 10.9%[31] - Operating expenses as a percentage of revenue declined to 118% in Q4 2023 from 129% in Q4 2022[8] - Adjusted EBITDA loss for the year ended December 31, 2023 improved by 61.7% to $1.0 million compared to a loss of $2.6 million in 2022[16] - Adjusted EBITDA is used internally to assess operational performance, but it has limitations and should not be considered in isolation from GAAP results[25] - The company continues to focus on managing cash flow and reducing operational costs to improve financial performance[26] Cash and Assets - Cash balance as of December 31, 2023 was $13.6 million with no long-term debt[7] - Cash and cash equivalents at the end of 2023 were $13,568,049, down from $14,739,933 at the end of 2022[33] - Total assets decreased to $23,887,268 in 2023 from $25,431,608 in 2022, a decline of approximately 6.4%[29] - Total liabilities decreased to $3,752,581 in 2023 from $4,457,366 in 2022, a reduction of about 15.8%[29] Strategic Opportunities - The company is exploring strategic opportunities, including potential mergers or acquisitions[7] - The trial against Cisco is expected to begin in April 2024 regarding patent infringement[9]

Paltalk, Inc. (NASDAQ:PALT) Q3 2023 Earnings Conference Call November 7, 2023 4:30 PM ET Company Participants Kara Jenny - CFO Jason Katz - CEO Conference Call Participants Operator Good afternoon, and welcome to the earnings call for Paltalk's Third Quarter Ended September 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 Paltal ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=6&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Paltalk, Inc. as of September 30, 2023, and for the three and nine-month periods then ended [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of September 30, 2023, shows a decrease in total assets to **$24.1 million** from **$25.4 million** at year-end 2022, primarily driven by a reduction in cash and cash equivalents, with total liabilities and stockholders' equity also seeing declines Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $13,667,000 | $14,739,933 | | Total current assets | $14,747,081 | $15,405,429 | | Total assets | $24,095,056 | $25,431,608 | | Total current liabilities | $3,023,056 | $3,663,458 | | Total liabilities | $3,742,581 | $4,457,366 | | Total stockholders' equity | $20,352,475 | $20,974,242 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the third quarter of 2023, total revenues increased to **$2.77 million**, while the net loss significantly narrowed to **$181,576** from over **$1.05 million** year-over-year, with similar trends for the nine-month period Q3 2023 vs Q3 2022 Statement of Operations (Unaudited) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Total revenues | $2,767,939 | $2,623,467 | | Loss from operations | $(389,416) | $(1,060,403) | | Net loss | $(181,576) | $(1,050,365) | | Net loss per share (Basic & Diluted) | $(0.02) | $(0.11) | Nine Months 2023 vs 2022 Statement of Operations (Unaudited) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Total revenues | $8,287,958 | $8,194,636 | | Loss from operations | $(1,576,133) | $(2,857,155) | | Net loss | $(784,245) | $(2,918,016) | | Net loss per share (Basic & Diluted) | $(0.09) | $(0.30) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities for the nine months ended September 30, 2023, improved to **$980,720**, with overall cash and cash equivalents decreasing by **$1.07 million** during the period Cash Flow Summary for Nine Months Ended Sep 30 (Unaudited) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(980,720) | $(2,623,682) | | Net cash used in investing activities | $(85,000) | $(2,942,279) | | Net cash used in financing activities | $(7,213) | $(572,336) | | **Net decrease in cash** | **$(1,072,933)** | **$(6,138,297)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's multimedia social applications, accounting for the Employee Retention Tax Credit, revenue recognition, intangible assets, stock-based compensation, and an ongoing patent infringement lawsuit against Cisco - The company's product portfolio includes Paltalk, Camfrog, Tinychat, ManyCam (a live streaming software), and Vumber (a telecommunications service provider)[27](index=27&type=chunk) - The company applied for and recognized an Employee Retention Tax Credit (ERTC) of **$343,045**, net of costs, recorded as other income for the nine months ended September 30, 2023[34](index=34&type=chunk) - Virtual gift revenue, included in subscription revenue, was **$1.11 million** for Q3 2023, up from **$0.97 million** in Q3 2022[45](index=45&type=chunk) - The company is involved in a patent infringement lawsuit against Cisco, with a trial expected to be held in May 2024[70](index=70&type=chunk)[71](index=71&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a **5.5% increase in total revenue** and an **82.7% decrease in net loss** for Q3 2023, attributing improvement to increased virtual gift revenue, cost reductions, and higher interest income, while maintaining a strong liquidity position - Key operational highlights for Q3 2023 include a **5.5% increase in total revenue**, an **82.7% decrease in net loss**, and achieving positive cash flow from operations[85](index=85&type=chunk) - Near-term business objectives include leveraging the ManyCam integration, optimizing marketing spend, enhancing live video chat applications, and exploring strategic M&A opportunities[85](index=85&type=chunk)[90](index=90&type=chunk) Key Performance Metrics (Unaudited) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $16,058 | $(979,748) | | Net loss | $(181,576) | $(1,050,365) | | Adjusted EBITDA | $(126,453) | $(780,550) | [Results of Operations](index=24&type=section&id=Results%20of%20Operations) A detailed comparison of the three and nine months ended September 30, 2023, versus the same periods in 2022, shows Q3 revenue rose **5.5%** to **$2.77 million**, driven by subscription and virtual gift sales, while total costs and expenses decreased by **14.3%** Q3 2023 vs Q3 2022 Revenue Breakdown (Unaudited) | Revenue Type | Q3 2023 | Q3 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Subscription revenue | $2,673,333 | $2,538,764 | $134,569 | 5.3% | | Advertising revenue | $94,606 | $84,703 | $9,903 | 11.7% | | **Total revenues** | **$2,767,939** | **$2,623,467** | **$144,472** | **5.5%** | Q3 2023 vs Q3 2022 Expense Breakdown (Unaudited) | Expense Category | Q3 2023 | Q3 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Cost of revenue | $826,662 | $775,330 | $51,332 | 6.6% | | Sales and marketing | $210,573 | $370,772 | $(160,199) | (43.2)% | | Product development | $1,193,430 | $1,485,479 | $(292,049) | (19.7)% | | General and administrative | $926,690 | $1,052,289 | $(125,599) | (11.9)% | | **Total costs and expenses** | **$3,157,355** | **$3,683,870** | **$(526,515)** | **(14.3)%** | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity source is its **$13.7 million** cash on hand as of September 30, 2023, which management believes is sufficient for the next year, with net cash used in operating activities significantly improving - As of September 30, 2023, the company had **$13.7 million** in cash and cash equivalents[127](index=127&type=chunk) - Net cash used in operating activities for the nine months ended September 30, 2023, improved to **$(980,720)** from **$(2,623,682)** in the same period of 2022[127](index=127&type=chunk)[129](index=129&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is noted as not applicable for the company, indicating it is a smaller reporting company and not required to provide this information - The company has indicated that this disclosure is not applicable[135](index=135&type=chunk) [Controls and Procedures](index=31&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2023, with no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of September 30, 2023[137](index=137&type=chunk) - No material changes were identified in the company's internal control over financial reporting during the quarter[138](index=138&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=ITEM%201.%20Legal%20Proceedings) This section details the ongoing patent infringement lawsuit filed by a wholly-owned subsidiary of the company against Cisco Systems, Inc., with a trial expected in May 2024 after Cisco's motion for summary judgment was denied - The company's subsidiary, Paltalk Holdings, Inc., is pursuing a patent infringement lawsuit against Cisco[141](index=141&type=chunk) - The court denied Cisco's motion for summary judgment, and a trial is anticipated for May 2024[142](index=142&type=chunk) [Risk Factors](index=32&type=section&id=ITEM%201A.%20Risk%20Factors) The company states that there were no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 - There were no material changes to the Risk Factors disclosed in the company's Form 10-K[143](index=143&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no sales of unregistered securities or repurchases of common stock during the third quarter of 2023 - No unregistered securities were sold during the quarter ended September 30, 2023[144](index=144&type=chunk) - The company did not repurchase any shares of its common stock during the third quarter of 2023[145](index=145&type=chunk) [Defaults Upon Senior Securities](index=32&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The company reports that there were no defaults upon senior securities - None[146](index=146&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) The company reports that there are no mine safety disclosures - None[147](index=147&type=chunk) [Other Information](index=32&type=section&id=ITEM%205.%20Other%20Information) The company reports that there is no other information to disclose for this period - None[148](index=148&type=chunk) [Exhibits](index=33&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002 and Inline XBRL documents - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1) and Inline XBRL data files[150](index=150&type=chunk)

Paltalk, Inc. (NASDAQ:PALT) Q2 2023 Earnings Conference Call August 8, 2023 4:30 PM ET Company Participants Jason Katz - CEO Kara Jenny - CFO Conference Call Participants Operator 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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 001-38717 PALTALK, INC. (Exact name of registrant as specified in its charter) | Delaware | 20-3191847 | | --- | --- | | (Stat ...

Financial Data and Key Metrics Changes - Revenues for Q1 2023 decreased by 12.4% to $2.6 million compared to $2.9 million in Q1 2022, attributed to a 12% decrease in subscription revenue and a 27.4% decrease in advertising revenue [8] - Adjusted EBITDA loss increased by approximately 33.8% to $0.6 million in Q1 2023 from a loss of $0.5 million in Q1 2022 [9] - Loss from operations increased by 27.5% to $0.9 million in Q1 2023 compared to a loss of $0.7 million in Q1 2022 [20] - Cash and cash equivalents totaled $13.9 million at March 31, 2023, a decrease of $0.8 million from $14.7 million at December 31, 2022 [21] Business Line Data and Key Metrics Changes - The ManyCam product is expected to contribute to growth in subscription revenue, particularly in the second half of the year due to one-year annual auto-renewals of existing subscriptions [11][18] - The company is focusing on enhancing live video chat applications and integrating new features to increase user engagement and revenue opportunities [19] Market Data and Key Metrics Changes - The company is exploring strategic opportunities, including potential mergers or acquisitions that are synergistic to its business [7] - The company has no long-term debt on its balance sheet, positioning it well in the current market environment [21] Company Strategy and Development Direction - The company aims to return to cash flow positive and build shareholder value through conservative cash management and expense control [6][27] - Near-term objectives include promoting ManyCam in business-to-business markets, enhancing user engagement, and developing partnerships with third-party communities [7][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for ManyCam to positively impact subscription revenue in the latter half of the year [11] - The company is well-positioned to take advantage of weak capital markets, with a focus on enhancing shareholder value through strategic opportunities [27] Other Important Information - The company repurchased 5,192 shares of common stock at an average price of $1.39 during Q1 2023 [10] - The trial against Cisco is scheduled for mid-July in Waco, Texas, regarding alleged patent infringement [24] Q&A Session Summary Question: What was the ManyCam impact on the business? - Management expects ManyCam subscriptions to contribute to growth in subscription revenue, with a more significant impact anticipated in the second half of the year [11] Question: Can you provide any additional color on expense control? - The goal is to reach EBITDA positive by the end of the year [12] Question: Can you confirm the date and venue for the Cisco trial? What are you suing for? - The trial is scheduled for mid-July in Waco, Texas, regarding alleged patent infringement [24] Question: Any commentary on outlook and potential return to adjusted EBITDA positive? - The company is evaluating opportunities to enhance shareholder value and believes it is well-positioned given its cash position and IP [27]

PART I. FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=6&type=section&id=ITEM%201.%20Financial%20Statements) This section presents Paltalk, Inc.'s unaudited condensed consolidated financial statements for Q1 2023, including balance sheets, statements of operations, equity changes, cash flows, and detailed accounting notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202023%20(Unaudited)%20and%20December%2031%2C%202022) | Asset/Liability Category | March 31, 2023 | December 31, 2022 | | :----------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $13,929,729 | $14,739,933 | | Total current assets | $14,459,511 | $15,405,429 | | Goodwill | $6,326,250 | $6,326,250 | | Intangible assets, net | $3,321,227 | $3,526,811 | | Total assets | $24,259,739 | $25,431,608 | | Accounts payable | $802,399 | $1,013,637 | | Deferred subscription revenue | $2,162,841 | $2,257,452 | | Total current liabilities | $3,257,873 | $3,663,458 | | Total liabilities | $3,975,867 | $4,457,366 | | Total stockholders' equity | $20,283,872 | $20,974,242 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022%20(Unaudited)) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Subscription revenue | $2,505,670 | $2,846,339 | | Advertising revenue | $58,347 | $80,362 | | Total revenues | $2,564,017 | $2,926,701 | | Cost of revenue | $802,475 | $652,096 | | Sales and marketing expense | $254,868 | $411,482 | | Product development expense | $1,248,582 | $1,530,141 | | General and administrative expense | $1,167,111 | $1,046,148 | | Total costs and expenses | $3,473,036 | $3,639,867 | | Loss from operations | $(909,019) | $(713,166) | | Interest income (expense), net | $121,167 | $(1,862) | | Income tax benefit (expense) | $49,554 | $(16,031) | | Net loss | $(738,298) | $(738,945) | | Basic net loss per share | $(0.08) | $(0.08) | | Diluted net loss per share | $(0.08) | $(0.08) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022%20(Unaudited)) | Metric | Balance at Dec 31, 2022 | Stock-based compensation expense | Repurchases of common stock | Net loss | Balance at Mar 31, 2023 | | :---------------------- | :---------------------- | :------------------------------- | :-------------------------- | :------- | :---------------------- | | Common Stock Amount | $9,864 | $- | $- | $- | $9,864 | | Treasury Stock Amount | $(1,192,124) | $- | $(7,213) | $- | $(1,199,337) | | Additional Paid-in Capital | $35,973,735 | $55,141 | $- | $- | $36,028,876 | | Accumulated Deficit | $(13,817,233) | $- | $- | $(738,298) | $(14,555,531) | | Total Stockholders' Equity | $20,974,242 | $55,141 | $(7,213) | $(738,298) | $20,283,872 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022%20(Unaudited)) | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(802,991) | $(1,232,954) | | Net cash used in financing activities | $(7,213) | $- | | Net decrease in cash and cash equivalents | $(810,204) | $(1,232,954) | | Cash and cash equivalents at beginning of period | $14,739,933 | $21,636,860 | | Cash and cash equivalents at end of period | $13,929,729 | $20,403,906 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) [Note 1. Organization and Description of Business](index=10&type=section&id=1.%20Organization%20and%20Description%20of%20Business) Paltalk, Inc. is a communications software innovator operating multimedia social applications, facing macro-economic challenges after the ManyCam acquisition - Paltalk, Inc. is a communications software innovator with a 20-year history of technology innovation and **10 patents**, offering multimedia social applications including Paltalk, Camfrog, Tinychat, ManyCam, and Vumber[28](index=28&type=chunk) - The Company acquired ManyCam assets for a cash purchase price of **$2.7 million** in June 2022, with an additional earn-out payment of **$85,000** made in Q2 2023 based on sales performance[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - Macro-economic factors, such as inflation and financial institution liquidity challenges, may negatively impact the Company's operations by affecting customer engagement and discretionary spending[33](index=33&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) The Company adopted ASU 2016-13 without material impact, with financial statements relying on significant estimates for ManyCam asset valuation - The Company adopted ASU 2016-13, 'Financial Instruments - Credit Losses (Topic 326)', on January 1, 2023, which did not have a material impact on its financial position, results of operations, or cash flows[37](index=37&type=chunk) - Significant accounting estimates include discount rates and weighted average costs of capital used in determining the fair value and useful lives of ManyCam assets, based on independent third-party valuations[38](index=38&type=chunk) [Revenue Recognition](index=12&type=section&id=Revenue%20Recognition) Revenue is recognized upon service transfer, with subscription revenue over time or gift redemption, and advertising based on impressions or clicks - Subscription revenue, primarily from monthly premium services and virtual gifts, is recognized on a straight-line basis over the subscription term or upon redemption of virtual gifts[41](index=41&type=chunk)[42](index=42&type=chunk) - Advertising revenue is generated from displaying advertisements on products through third-party agreements, recognized on a CPC, CPM, or CPA basis[43](index=43&type=chunk) Deferred Revenue and Virtual Gift Metrics | Metric | March 31, 2023 | March 31, 2022 | | :-------------------------------- | :------------- | :------------- | | Deferred subscription revenue (ending balance) | $2,162,841 | $1,845,853 | | Virtual gift revenue (3 months ended) | $1,010,200 | $1,269,537 | | Deferred revenue from virtual gifts (ending balance) | $334,629 | $331,804 | [Note 3. Intangible Assets, Net](index=12&type=section&id=3.%20Intangible%20Assets%2C%20Net) Net intangible assets decreased to **$3.32 million** as of March 31, 2023, due to significantly increased amortization Intangible Assets Net Carrying Amount | Intangible Asset Category | March 31, 2023 (Net Carrying Amount) | December 31, 2022 (Net Carrying Amount) | | :-------------------------------- | :----------------------------------- | :------------------------------------ | | Patents | $15,625 | $16,250 | | Trade names, trademarks, product names, URLs | $439,741 | $460,311 | | Internally developed software | $1,936,241 | $2,014,455 | | Subscriber/customer relationships | $929,620 | $1,035,794 | | Total intangible assets, net | $3,321,227 | $3,526,811 | - Amortization expense for the three months ended March 31, 2023, was **$205,584**, a significant increase from **$46,166** for the same period in 2022[44](index=44&type=chunk) [Note 4. Accrued Expenses and Other Current Liabilities](index=13&type=section&id=4.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses and other current liabilities decreased to **$124,864** as of March 31, 2023, mainly due to reduced compensation and payroll taxes Accrued Expenses and Other Current Liabilities | Category | March 31, 2023 | December 31, 2022 | | :---------------------------------- | :------------- | :---------------- | | Compensation, benefits and payroll taxes | $- | $114,000 | | Other accrued expenses | $124,864 | $111,193 | | Total accrued expenses and other current liabilities | $124,864 | $225,193 | [Note 5. Income Taxes](index=13&type=section&id=5.%20Income%20Taxes) The Company recorded a **$49,554** income tax benefit in Q1 2023, with the effective tax rate differing from statutory due to a full valuation allowance Income Tax Metrics | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Income tax benefit (expense) | $49,554 | $(16,031) | | Effective tax rate | 6.64% | (2.22)% | | Statutory rate | 21% | 21% | - The Company maintains a full valuation allowance against its U.S. deferred tax assets, as their realizability is not considered more-likely-than-not[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) [Note 6. Stockholders' Equity](index=13&type=section&id=6.%20Stockholders%27%20Equity) Stockholders' equity changes include stock option activity and treasury share repurchases, with **762,336** shares available under the 2016 Incentive Plan - As of March 31, 2023, there were **762,336** shares available for future issuance under the 2016 Long-Term Incentive Plan[49](index=49&type=chunk) Stock Option Activity | Stock Option Activity | Number of Options | Weighted Average Exercise Price | | :-------------------------- | :---------------- | :------------------------------ | | Outstanding at January 1, 2023 | 622,074 | $3.71 | | Granted during the period | 49,000 | $1.94 | | Cancelled/Forfeited | (20,100) | $1.51 | | Expired | (819) | $25.48 | | Outstanding at March 31, 2023 | 650,155 | $3.62 | | Exercisable at March 31, 2023 | 484,295 | $4.05 | - The Company repurchased **5,192** shares of common stock for an aggregate purchase price of **$7,213** during the three months ended March 31, 2023, under a stock repurchase plan that expired on March 29, 2023[58](index=58&type=chunk) [Note 7. Net Loss Share](index=15&type=section&id=7.%20Net%20Loss%20Share) Basic and diluted net loss per share remained at **$(0.08)** for Q1 2023 and 2022, with antidilutive stock options excluded from diluted EPS Net Loss Per Share Data | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss from operations – basic and diluted | $(738,298) | $(738,945) | | Weighted average shares outstanding – basic | 9,222,356 | 9,832,157 | | Weighted average shares outstanding – diluted | 9,222,356 | 9,832,157 | | Per share data: Basic from operations | $(0.08) | $(0.08) | | Per share data: Diluted from operations | $(0.08) | $(0.08) | - **650,155** and **679,515** outstanding stock options for the three months ended March 31, 2023 and 2022, respectively, were excluded from diluted net loss per share calculation due to their antidilutive effect[59](index=59&type=chunk) [Note 8. Leases](index=15&type=section&id=8.%20Leases) The Company holds an operating lease for office space until November 2024, with monthly payments of **$7,081** and lease liabilities of approximately **$139,000** - The Company's office lease runs through November 30, 2024, with current monthly payments of approximately **$7,081**[61](index=61&type=chunk) Lease Metrics | Lease Metric | March 31, 2023 | | :-------------------------- | :------------- | | Operating lease liabilities | ~$139,000 | | ROU assets | ~$139,000 | | Remaining lease term | 1.7 years | | Discount rate | 2.3% | | Future minimum payments (2023) | $63,731 | | Future minimum payments (2024) | $77,894 | | Total future minimum payments | $141,625 | [Note 9. Commitments and Contingencies](index=16&type=section&id=9.%20Commitments%20and%20Contingencies) Commitments include **$490,000** in CEO/CFO salaries for 2023, alongside a patent infringement lawsuit against Cisco with a Q3 2023 trial - Aggregate base salary commitments for the CEO and CFO employment agreements total **$490,000** for 2023, increasing to **$510,000** per year if renewed for 2024 and beyond[66](index=66&type=chunk) - Paltalk Holdings, Inc. filed a patent infringement lawsuit against Cisco in July 2021, alleging infringement of U.S. Patent No. 6,683,858. The patentability of claims 1-10 was confirmed in January 2023, and a trial is scheduled for early Q3 2023[67](index=67&type=chunk)[68](index=68&type=chunk) [Note 10. Subsequent Events](index=16&type=section&id=10.%20Subsequent%20Events) Management evaluated subsequent events through the issuance date, finding no transactions requiring disclosure [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Paltalk's Q1 2023 financial condition, operations, and liquidity, including business overview, objectives, revenue, costs, and key metrics - Paltalk is a communications software innovator operating multimedia social applications, generating revenue primarily from subscription fees and advertising[74](index=74&type=chunk) - The company's growth strategy focuses on investing in proprietary software development, expanding sales and marketing, increasing user base through partnerships and advertising, and pursuing strategic acquisitions[77](index=77&type=chunk) - Net loss remained relatively unchanged at **$0.7 million** for Q1 2023 compared to Q1 2022, while cash used in operations decreased by **$0.4 million**[82](index=82&type=chunk) [Overview](index=18&type=section&id=Overview) Paltalk, Inc. is a communications software innovator operating multimedia social applications, aiming for user and revenue growth through strategic development and acquisitions - Paltalk operates a network of consumer applications including Paltalk, Camfrog, Tinychat, ManyCam, and Vumber, generating revenue primarily from subscription fees and advertising[74](index=74&type=chunk)[75](index=75&type=chunk) - The company's growth strategy involves investing in proprietary software, expanding sales and marketing, increasing its user base through partnerships and advertising, and pursuing synergistic acquisitions or investments[77](index=77&type=chunk) [Recent Developments](index=19&type=section&id=Recent%20Developments) Paltalk's **$1.75 million** stock repurchase plan expired in March 2023, with **5,192** shares repurchased, while macro-economic factors continue to pose risks - The stock repurchase plan for up to **$1,750,000** of common stock expired on March 29, 2023. During Q1 2023, **5,192** shares were repurchased at an average price of **$1.39**[80](index=80&type=chunk) - Macro-economic factors, including economic recessions, inflation, and financial institution liquidity challenges, continue to pose potential negative impacts on the Company's operations and user discretionary spending[81](index=81&type=chunk) [Operational Highlights and Business Objectives](index=19&type=section&id=Operational%20Highlights%20and%20Business%20Objectives) Q1 2023 saw a stable net loss of **$0.7 million** and reduced operational cash use, with objectives focused on ManyCam B2B expansion, app enhancement, and M&A - Net loss for Q1 2023 remained relatively unchanged at **$0.7 million**, and cash used in operations decreased by **$0.4 million** compared to Q1 2022[82](index=82&type=chunk) - Business objectives include expanding ManyCam into B2B markets and integrating it with Paltalk, enhancing live video chat applications with new features for retention and monetization, exploring strategic M&A, seeking platform partnerships, and defending intellectual property[82](index=82&type=chunk) [Sources of Revenue](index=20&type=section&id=Sources%20of%20Revenue) Paltalk's revenue primarily stems from subscription fees for video chat products and ManyCam, alongside advertising revenue based on user engagement - Main revenue sources are subscription fees from core video chat products (Paltalk, Camfrog) and ManyCam software, and advertising revenue[83](index=83&type=chunk) - Subscription revenue is generated from premium services and virtual gifts, recognized over the subscription period or upon gift utilization[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - Advertising revenue is earned from displaying advertisements on video platforms, recognized on a click-through (CPC), impression (CPM), or registration (CPA) basis[87](index=87&type=chunk) [Costs and Expenses](index=20&type=section&id=Costs%20and%20Expenses) Costs include compensation, credit card fees, hosting, and data center expenses, with sales, marketing, product development, and G&A covering personnel and professional services - Cost of revenue primarily includes compensation for data center and customer care, credit card processing fees, hosting fees, and data center rent and bandwidth costs[88](index=88&type=chunk) - Sales and marketing expense consists of advertising expenditures (online and offline marketing) and compensation for sales and support personnel[90](index=90&type=chunk) - Product development expense covers compensation for design, testing, and enhancement personnel, consultant costs, and amortization of capitalized website development costs[91](index=91&type=chunk) - General and administrative expense includes compensation for executive, finance, legal, HR, and facilities personnel, professional service fees, insurance costs, and depreciation/amortization[92](index=92&type=chunk) [Key Metrics](index=21&type=section&id=Key%20Metrics) Adjusted EBITDA, a non-GAAP metric, was **$(648,294)** in Q1 2023, decreasing from Q1 2022 and representing **(25.3)%** of total revenues Key Financial Metrics | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(802,991) | $(1,232,954) | | Net loss | $(738,298) | $(738,945) | | Adjusted EBITDA | $(648,294) | $(484,431) | | Adjusted EBITDA as percentage of total revenues | (25.3)% | (16.6)% | - Adjusted EBITDA is a non-GAAP measure used by management to evaluate core operating performance, excluding interest, taxes, depreciation, amortization, and stock-based compensation[95](index=95&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Total revenue decreased by **12.4%** to **$2.56 million** in Q1 2023, while total costs decreased by **4.6%**, and non-operating income significantly rose due to interest Revenue Performance | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($) | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Total revenue | $2,564,017 | $2,926,701 | $(362,684) | (12.4)% | | Subscription revenue | $2,505,670 | $2,846,339 | $(340,669) | (12.0)% | | Advertising revenue | $58,347 | $80,362 | $(22,015) | (27.4)% | Expense Performance | Expense Category | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($) | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Cost of revenue | $802,475 | $652,096 | $150,379 | 23.1% | | Sales and marketing expense | $254,868 | $411,482 | $(156,614) | (38.1)% | | Product development expense | $1,248,582 | $1,530,141 | $(281,559) | (18.4)% | | General and administrative expense | $1,167,111 | $1,046,148 | $120,963 | 11.6% | | Total costs and expenses | $3,473,036 | $3,639,867 | $(166,831) | (4.6)% | Non-Operating Income (Loss) | Non-Operating Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($) | Change (%) | | :------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Interest income (expense), net | $121,167 | $(1,862) | $123,029 | 6,607.4% | | Other expense | $- | $(7,886) | $7,886 | 100% | | Total non-operating income (loss) | $121,167 | $(9,748) | $130,915 | 1,343.0% | [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Paltalk's cash and cash equivalents were **$13.93 million** as of March 31, 2023, with net cash used in operations decreasing to **$802,991** in Q1 2023 Cash Flow Summary | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(802,991) | $(1,232,954) | | Net cash provided by (used in) investing activities | $- | $- | | Net cash used in financing activities | $(7,213) | $- | | Net decrease in cash and cash equivalents | $(810,204) | $(1,232,954) | | Cash and cash equivalents at March 31, 2023 | $13,929,729 | $20,403,906 | - The Company believes its cash and cash equivalents balance and expected cash flows from operations are sufficient to meet financial obligations for one year[112](index=112&type=chunk) - The primary use of working capital is for product development and marketing activities, with potential future allocation for strategic acquisitions and investments[113](index=113&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No quantitative or qualitative disclosures about market risk are applicable for the reported period [ITEM 4. Controls and Procedures](index=25&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of March 31, 2023, providing reasonable assurance for timely and accurate information disclosure[121](index=121&type=chunk) - There were no material changes in internal control over financial reporting during the quarterly period covered by this report[122](index=122&type=chunk) PART II. OTHER INFORMATION [ITEM 1. Legal Proceedings](index=27&type=section&id=ITEM%201.%20Legal%20Proceedings) Paltalk Holdings, Inc. is pursuing a patent infringement lawsuit against Cisco, with claims confirmed patentable and a trial scheduled for early Q3 2023 - Paltalk Holdings, Inc. filed a patent infringement lawsuit against Cisco in July 2021, alleging infringement of U.S. Patent No. 6,683,858[124](index=124&type=chunk) - The United States Patent Office confirmed the patentability of claims 1-10 of U.S. Patent No. 6,683,858 on January 19, 2023, and a trial is scheduled for early Q3 2023[125](index=125&type=chunk) [ITEM 1A. Risk Factors](index=27&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to the previously disclosed risk factors occurred during the three months ended March 31, 2023 - No material changes to the Risk Factors disclosed in the Form 10-K occurred during the three months ended March 31, 2023[126](index=126&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales occurred, but **5,192** common shares were repurchased for **$7,213** in Q1 2023 under an expired plan - There were no unregistered sales of equity securities during the quarter ended March 31, 2023[127](index=127&type=chunk) Common Stock Repurchases | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--------------------------------- | :----------------------------- | :--------------------------- | | January 1, 2023 – January 31, 2023 | 5,192 | $1.39 | | Total | 5,192 | $1.39 | - The Stock Repurchase Plan, approved for up to **$1,750,000**, expired on March 29, 2023, and has not been renewed[128](index=128&type=chunk)[129](index=129&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=27&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities during the period [ITEM 4. Mine Safety Disclosures](index=27&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) The Company reported no mine safety disclosures for the period [ITEM 5. Other Information](index=27&type=section&id=ITEM%205.%20Other%20Information) The Company reported no other information requiring disclosure for the period [ITEM 6. Exhibits](index=29&type=section&id=ITEM%206.%20Exhibits) Exhibits filed with Form 10-Q include the ManyCam acquisition agreement, corporate documents, and Sarbanes-Oxley certifications - Exhibits include the Securities Purchase Agreement (ManyCam acquisition), Certificate of Incorporation, Amended and Restated Bylaws, Specimen Stock Certificate, and certifications (302 and 906) under the Sarbanes-Oxley Act[134](index=134&type=chunk) [SIGNATURES](index=30&type=section&id=SIGNATURES) The report was signed on May 9, 2023, by CEO Jason Katz and CFO Kara Jenny - The report was signed on May 9, 2023, by Jason Katz, Chief Executive Officer, and Kara Jenny, Chief Financial Officer[139](index=139&type=chunk)

Paltalk, Inc. (NASDAQ:PALT) Q4 2022 Earnings Conference Call March 23, 2023 4:30 PM ET Company Participants Kara Jenny - Chief Financial Officer Jason Katz - Chief Executive Officer Conference Call Participants Operator Good afternoon, and welcome to the earnings call for Paltalk's Fourth Quarter and Full Year ended December 31, 2022. 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 Paltal ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Fiscal Year Ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 001-38717 PALTALK, INC. (Exact name of registrant as specified in its charter) | Delaware | 20-3191847 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporatio ...

Paltalk, Inc. (NASDAQ:PALT) Q3 2022 Earnings Conference Call November 7, 2022 4:30 PM ET Company Participants Jason Katz – Chief Executive Officer Kara Jenny – Chief Financial Officer Conference Call Participants Operator Good afternoon, and welcome to the Paltalk Third Quarter 2022 Earnings Call. 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 Off ...