Paltalk, Inc.

Good morning, everyone, and welcome to the PALTALK First Quarter 2024 Results Conference 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, CFO Cara Genney. Ma'am, the floor is yours.

Hello, everyone, and welcome to the PALTALK Operating and Financial Results Conference Call for the First Quarter ended March 31, 2024. By now, everyone should have access to the earnings results press release, which was issued earlier today at approximately 8.30 a.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 quarterly reports on Form 10Q and annual report on Form 10K. You should refer to and consider these factors when relying on such forward-looking information. The company does not undertake and expressly disclaim 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 reused in combination with GAAP results, provides us and our investors with additional analytical 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 Kass.

Thank you, Cara, and good morning, everyone. We greatly appreciate you taking the time to join us on today's call. We will discuss our operating highlights and financial results for the first quarter ended March 31st, 2024. We will also provide an update on our business objectives and strategies. After my opening statement, our CFO, Cara Genney, will give a summary of our financial results for the first quarter ended March 31st, 2024. Following our prepared remarks, we'll move into the Q&A portion and answer any questions that were pre-submitted prior to this call. With that, I would now like to walk you through the recent financial and operating highlights and near-term business objectives. While we continue to look for additional revenue opportunities, we encourage by a slight increase in our revenue and a 33% reduction in net loss in Q1 as compared to the prior year period, as we continue to enhance ManyCam and expand its availability into our PalTalk products and enterprise applications. Although not representative of a large share of our revenue, we are also excited about the rapid growth in our advertising revenue compared to Q1 of last year, which we attribute to new advertising partners and the rollout of our new advertising units. Our technology and business teams are working on additional features for our live video chat products and partnerships with large third-party communities with the goal of increasing our number of customers, customer retention and monetization, and potentially revenue. We believe we remain in good position for both organic and acquisitive growth, as our expense infrastructure has been optimized to support additional revenue and our cash position of $13 million at the quarter end provides us flexibility for growth opportunities. Our trial against Cisco is now set to begin in August 2024, and we look forward to continuing to defend our intellectual property. Over the past year, our team has successfully executed on business objectives and strategies that have reduced our fixed operating expenses. streamlined our business to improve efficiencies, and laid the groundwork, both organically and potentially acquisitively, to grow the business leveraging our current platform. The following are identified areas that we have started to implement to achieve revenue growth. The integration of ManyCam product into our PalTalk product through upselling initiatives. Improve user experience with ManyCam software and optimize features for both consumer and enterprise applications. Several enhancements to our live video chat applications, as well as the integration of card and board games and other features focused on retention and monetization, which collectively are intended to increase user engagement and revenue opportunities. And lastly, develop our consumer application platform strategy by seeking potential partnerships with large third-party communities so we could promote a co-branded version of our video chat products and potentially share in the incremental revenues generated by these partner communities. Moving on to an update on our trial against Cisco. On July 23rd, 2021, the wholly owned subsidiary of the company, Paltalk Holdings Inc. filed a patent infringement lawsuit against Cisco Systems Inc. in the US District Court for the Western District of Texas. We allege that certain of Cisco's products have infringed U.S. Patent 6-683-858 and that we are entitled to damages. A Markman hearing took place on February 24th, 2022. On September 7th, 2022, the United States Patent Office issued a reexamination of U.S. Patent 6-683-858. And on January 19th, 2023, the examiner issued an ex parte reexamination certificate ending the reexamination and confirming the patentability of claims one through 10 of US patent number 6683858. On June 29th, 2023, the court held a pretrial conference with the parties and denied Cisco's motion for summary judgment. Trial is now expected to begin in August, 2024. Now I'd like to pass it to Kara for a financial summary of our first quarter ended March 31st, 2024.