Paltalk, Inc. Reports first quarter 2023 financial results (2023)

$13.9 million in cash and cash equivalents at March 31, 2023;

JERICHO, NY -(NewMediaWire) - May 9, 2023 -Paltalk, Inc. ("Paltalk", the "Company", "we", "our" or "us") (Nasdaq: PALT), an innovative communications software company that powers social media applications, today announced financial and operating results for the first quarter ended March 31, 2023.

Key financial figures for the first quarter ended 31 March 2023 compared to the same period last year

· Sales fell 12.4% to $2.6 million

· Subscription revenue fell 12.0% to $2.5 million

· Advertising revenue fell 27.4% to $0.1 million

· Net loss was relatively flat at $0.7 million

· Adjusted EBITDA loss increased 33.8% to $0.6 million

· Deferred revenue increased 17% to $2.2 million

· We repurchased 5,192 shares of common stock during the quarter ended March 31, 2023 under our stock repurchase plan at an average price per share of $1.39. the share repurchase plan expired on March 29, 2023

· The company had $13.9 million in cash as of March 31, 2023 and no long-term debt on the balance sheet

Short-term business goals

· Drive expansion of ManyCam products into business-to-business markets and work to integrate ManyCam as an upsell to our Paltalk product

· Continue to make many improvements to our live video chat applications, as well as the integration of card and board games and other retention and monetization features, which collectively aim to increase user engagement and revenue opportunities

· Continue to explore strategic opportunities, including but not limited to potential mergers or acquisitions of other assets or entities that are synergistic with our business

· Continue to develop our consumer app platform strategy by considering potential partnerships with large third-party communities where we can promote a version of our video chat products and potentially share in the incremental revenue generated by these community partners

· To continue to defend our intellectual property

Patent litigation

On July 23, 2021, a wholly owned subsidiary of the company, Paltalk Holdings, Inc., filed a patent infringement lawsuit against WebEx Communications, Inc., Cisco WebEx LLC, and Cisco Systems, Inc. (collectively "Cisco"), in the US District Court for the Western District of Texas. The company claims that Cisco products infringe US patent #6,683,858 and that the company is entitled to damages.

A Markman hearing was held on February 24, 2022. On September 7, 2022, the US Patent Office issued a reexamination of the US patentability of claims 1-10 of US patent no. 6,683,858. A trial is scheduled for early Q3 2023.

Management comment

Jason Katz, President and CEO of Paltalk, commented, “Despite the decline in revenue, we reduced our operating expenses, reducing our cash used from operations by $0.4 million in the quarter ended March 31, 2023. decreased compared to the previous period of the year. We achieved this as a result of greater operational efficiencies created primarily as a result of streamlining our offshore development efforts, and we expect further cost reductions as a result of these actions. We continue to invest conservatively as we are very responsible for cash management, even though we ended the quarter with $13.9 million in cash.”

Katz concluded: “Our goals for 2023 are to return revenue growth and create shareholder value. As we approach the one year anniversary of its additionWith the addition of ManyCam to our product offering, we expect that the one-year auto-renewal of existing ManyCam subscriptions will help increase subscription revenue.We also strive to increase new user acquisition and engagement by improving our live video chat applications and other features. We will continue to defend our intellectual property and look forward to providing progress updates once our litigation against Cisco begins in early Q3 2023.”

Financial results for three months ended 31 March 2023

· Revenue for the quarter ended March 31, 2023 decreased 12.4% to $2.6 million compared to $2.9 million for the quarter ended March 31, 2022. This decrease was due to a 12% decrease in revenue from subscriptions and a 27.4% drop in advertising profit?

· Operating losses for the quarter ended March 31, 2023 increased 27.5%, or $0.2 million, to a loss of $0.9 million, compared to a loss of $0.7 million for the same period.

· Net loss for the quarter ended March 31, 2023 was relatively flat at $0.7 million compared to the quarter ended March 31, 2022.

· Adjusted EBITDA loss for the quarter ended March 31, 2023 increased 33.8%, or $0.2 million, to an adjusted EBITDA loss of $0.6 million, compared to an adjusted EBITDA loss of $0.6 million $. 0.5 million for the quarter ended March 31, 2022.

· 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. is

· The Company had no long-term debt on its balance sheet as of March 31, 2023.

Key financial and operational measures of operations:
(in thousands, excluding percentages)

OVER PALTALK, INC. (Nasdaq:PALT)

Paltalk, Inc. is a communications software innovator that powers social media applications. Our product portfolio includes Paltalk and Camfrog, which together host a large collection of video-based communities. Our other products includeManyCam, Tinychat and Vumber. The company has more than 20 years of history in technological innovation and holds 10 patents. For more information, go to:http://www.paltalk.com.

To be added to the news distribution list, go to:http://www.paltalk.com/investor-alerts/.

EXPECTED STATEMENTS:

This press release contains "problematic statements". Such statements may be preceded by the words "intends," "may," "will," "plans," "anticipates," "anticipates," "projects," "anticipates," "estimates," "intends," "believes ". ".", "expect", "potential" or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond the Company's control and cannot be predicted or quantified and, therefore, actual results may differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include, without limitation, any economic downturn and general inflation environment our results of operations and our activities, our ability to effectively market and monetize our applications, our ability to create and retain active users and to effectively monetize our user base, our ability to improve the ManyCam software, market and promote; the Company's ability to maintain the listing of its common stock on the Nasdaq Stock Market; our ability to release new applications or improve or add features to existing applications, on a timely basis or at all; risks and uncertainties related to our increased focus on using new technologies to improve our applications and our ability to timely complete application development using new technologies; our ability to compete effectively with existing competitors and new market entrants; our ability to effectively win new software licensing and development customers; our ability to protect our intellectual property rights; our use of the Internet and user privacy and data protection; our ability to make beneficial acquisitions and effectively integrate any businesses or properties we acquire; and our ability to manage our strategic partnerships and alliances. More detailed information about the Company and the risk factors that may affect the preparation of futures statements are set forth in the Company's filings with the Securities and Exchange Commission ("SEC"), including the Company's most recent annual report on Form 10-K and quarterly reports for the Form 10-Q. Investors and security holders are invited to view these documents free of charge on the SEC's website atwww.sec.gov.

All forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date of such statement, except as required by applicable securities laws.

Contacts with investors:

IR@paltalk.com

ClearThink

nyc@clearthink.capital

917-658-7878

PATALK,INC.
RECONCILIATIONVANGAAPFORNON-GAAPResults

Non-GAAP financial measures and key metrics

In this press release, the Company provided Adjusted EBITDA, a non-GAAP financial measure, as a supplement to its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP").Adjusted EBITDA is defined as net loss adjusted to exclude interest expense (income), net expenses, income taxes (income), depreciation and amortization expense, other expenses, net expense and stock-based compensation.

Management uses internally adjusted EBITDA when analyzing the company's financial results to evaluate operating performance and determine the company's future capital requirements. The presentation of this financial information should not be considered in isolation or as a substitute for financial information prepared in accordance with GAAP. The Company believes that both management and investors benefit from reporting on Adjusted EBITDA to evaluate its performance and plan, forecast and analyze future periods. The Company believes that Adjusted EBITDA helps investors and others understand and evaluate the Company's operating results and enable a more meaningful comparison between the Company's performance and that of its competitors. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not view this performance measure in isolation or as a substitute for analyzing our results as reported in accordance with GAAP. Some of these limitations are that Adjusted EBITDA does not reflect, among other things: interest expense (income), net, income tax provision, depreciation expense, other expense, net compensation and stock-based compensation. Other companies, including those in our industry, may calculate Adjusted EBITDA differently, making it less useful as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA along with other financial performance measures, including total revenue, insurance revenue, deferred income, net income (loss), cash and cash equivalents, restricted cash, of net cash used in operating activities and results presented in accordance with GAAP.

PATALK, INC.
CONDENSEDCONSOLIDATED BALANCE

PATALK, INC.
CONDENSEDCONSOLIDATED STATEMENTT OPERATIONsmall
(Not checked)

PATALK, INC.

CONDENSEDCONSOLIDATED STATEMENT OF CASH FLOWS
(Not checked)

See the original versionwww.newmediawire.com