Paltalk, Inc.

and welcome to the Paltalk second quarter 2024 results conference call. At this time, all participants are on a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this call is being recorded. I will now turn the conference over to your host, Cara Jenny, CFO of Paltalk. Mom, the floor is yours.

Hello everyone and welcome to the PalTalk operating and financial results conference call for the second quarter ended June 30th, 2024. By now, everyone should have access to the earnings press release, which was issued earlier this afternoon at approximately 4 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 question. 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 10-Q and Annual Report on Form 10-K. You should refer to these 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, provides our investors and us with additional analytical tools to understand our operations. For adjusted EBITDA, we have provided a reconciliation to the most direct comparable gap financial measure in our earnings press release, which will be posted on the investor relations section of our website at www.PalTalk.com. And with that, I would like to introduce PalTalk's Chief Executive Officer, Jason Katz.

Thank you, Kara, and good afternoon, 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 second quarter ended June 30th, 2024. We will also provide an update on our business objectives and strategies. After my opening statement, our Chief Financial Officer, Cara Genney, will give a summary of our financial results for the second quarter ended June 30th, 2024. Following our prepared remarks, we'll move into the Q&A portion and answer any questions that were 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. We are very pleased to announce that we entered into an agreement to acquire NewTek Technology Solutions, Inc., a wholly owned subsidiary of NewTek One, Inc. NTS provides dedicated server hosting, cloud hosting, managed security, and other related services, including consulting and implementing technology solutions for enterprise and commercial clients across the United States. This is a transformational acquisition for PalTalk that we believe will provide excellent value for our stockholders. We expect that the acquisition, once completed, will have an immediate and meaningful impact on our revenue, since NTS's revenue in 2023 was approximately three times greater and Paltalk's 2023 revenue. We also expect the acquisition to provide enhanced opportunities for future growth and optimization. We are extremely excited to enter the cloud infrastructure and cybersecurity sectors with the acquisition of a business we deem right for growth, both organically and through potential accretive acquisitions in the future. Given our management team's extensive technology expertise that has been demonstrated throughout the years, We are confident in our ability to integrate, operate, and grow this business and enhance stockholder value. Now on to our second quarter results. We believe our second quarter results reflect the softness and discretionary spending by our subscribers due in part to the overall economic and inflationary environment. We believe these impacts are macroeconomic in nature and not long-term for our business. We expect to continue to make adjustments to our promotional spending until we see a pickup in our metrics. We are excited about the recent launch of version 9 of ManyCam, which features a revamped user interface and templates designed to assist with onboarding. During the second quarter, our cash position decreased by $200,000 from the first quarter of 2024, which resulted in a cash balance of $12.8 million at the end of the quarter. Our trial against Cisco is set to begin later this month, and we look forward to continuing to defend our intellectual property. While we experienced a decline in our revenue during the second quarter as compared to the prior year period, our team is working on several initiatives to return to growth. These include 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 and divestitures of certain assets. Continuing our efforts to leverage the integration of the ManyCam product into our PalTalk product through upselling initiatives. Continuing our efforts to improve user experience with ManyCam software and optimize features for both consumer and enterprise applications. Further optimizing marketing spend to effectively realize a positive return on our investment. Continuing to implement 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. Continuing to develop our consumer application platform strategy by seeking potential partnerships with large third-party communities, who we could promote a co-branded version of our video chat products and potentially share in the incremental revenues generated by these partner communities. Now moving on to an update on our trial against Cisco, which is expected to begin on August 26, 2024. On July 23, 2021, a wholly owned subsidiary of the company, Paltalk Holdings Inc., filed a patent infringement lawsuit against Webex Communications, Cisco, Webex, LLC, and Cisco Systems, collectively Cisco, and the U.S. District Court for the Western District of Texas. We allege that certain of Cisco's products have infringed U.S. patent number 683858, and that we are entitled to damages. A Markman hearing took place on February 24th, 2022, On September 7, 2022, the United States Patent Office issued a reexamination of U.S. patent number 6683858. And on January 19, 2023, the examiner issued an ex parte reexamination certificate ending the reexamination and confirming the patentability of claims 1 through 10 of U.S. patent number 6683858. On June the 29th, 2023, the court held a pretrial conference with the parties and denied Cisco's motion for summary judgment. On August 1st, 2024, the court held the final pretrial conference and the trial is now set to proceed on August 26th, 2024. Now I'd like to pass it to Kara for a financial summary of our second quarter ended June 30th, 2024. Thank you, Jason.