Michael Pritchard - Investor Relations, Haynes and Boone Alex Harrington - Chief Executive Officer Judy Krandel - Chief Financial Officer

Good day, everyone. And welcome to the Snap Interactive Inc First Quarter 2017 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the conference over to Mr. Michael Pritchard, Company Counsel from Haynes and Boone. Please go ahead, sir.

Thank you. Good afternoon. And welcome to the Snap Interactive first quarter 2017 earnings and business update call. Again, my name is Michael Pritchard, and I am with Haynes and Boone outside counsel to Snap. Hosting the call today are Alex Harrington, Chief Executive Officer and Judy Krandel, Chief Financial Officer. Before I turn the call over to management, I would like to remind everyone that earlier today, we issued a presentation to accompany this call. The presentation can be accessed on the Company’s Web site, snap-interactive.com, under the Quarterly Earnings tab of the Investor Relations section or by following the link on Snap’s homepage. I'd like to inform everyone in attendance that certain statements made during today's conference call, that are not statements of historical fact including those concerning future plans, objectives, goals, strategies or performance, and those related to the Company’s integration efforts following the completion of its merger with AVM Software doing business as Paltalk, are forward-looking statements. These statements reflect the good faith beliefs and judgments of the Company and are based upon currently available information only as of the date of this conference call. These statements are subjects to risks, uncertainties and other factors that could cause actual results to differ materially from current expectations. These factors include those described in the Risks Factors section of the Company's periodic reports that are filed with the Securities and Exchange Commission. Forward-looking statements are not guarantees of future performance and the Company expressly disclaims any obligation to update earlier statements as a result of new information, except as required by law. Certain non-GAAP measures may be discussed during today’s presentation included adjusted EBITDA. Adjusted EBITDA has been calculated consistent with the manner in which it is defined in Snap’s periodic reports filed with the Securities and Exchange Commission. Adjusted EBITDA has been reconciled for the nearest applicable GAAP measure in this presentation and in Snap’s earnings release, which is also available under the Press Releases tab of the Investor Relations section of Snap’s Web site, snap-interactive.com. With that, I’ll turn the call over to Alex Harrington, Snap’s Chief Executive Officer. Alex, the call is yours.

Thank you, Michael. And thank you all for joining us on today's call. I encourage you all to access the Q1 2017 Earnings Call Presentation available on our Web site www.snap-interactive.com. As Michael mentioned, it's on the home page if you scroll down on the left hand side of the page. Those of you following along we'll start on slide four. Today we're going to review Snap's strategic mission and progress towards that mission and then turn to the financial performance for the quarter. Turning to slide five, as we previously shared, our mission over the next three years is to enhance the Company's position as a leader in social products, delivering live video experiences in a mobile world. We see live video as a high growth medium that is having a disruptive effect on social networking and other areas of the consumer Web. We believe it is one of the biggest areas of Internet innovation right now; unfortunately, we're approaching it from a history of having invested 15 years in a live video social networking platform. Page six outlines the growth properties of video streaming and live video, in particular. As many of you are aware, online video is becoming a dominant way of consuming Web content; with Cisco estimating that it will account for 80% of all Internet traffic by 2019. For this reason, Mark Zuckerberg and other influential experts have identified video as the next Internet megatrend on par with the growth and disruptive effect of mobile technology over the last decade. With the overall video streaming market, within the video streaming market is a large segment dedicated to live video, which is our particular focus. The growth in this market segment is astonishing. In China, we're seeing $2.9 billion live streaming market that started at zero…

Thank you, Alex and thanks to everyone, joining us today on the call. Before I begin, I'd like to remind everyone that on October 07, 2016 we completed our previously announced merger with AVM Software. The merger has been accounted for as a reverse merger under the acquisition method of accounting for business combinations with AVM being treated as the accounting acquirer of Snap. Accordingly, the financial results I will discuss reflect the operations of AVM for the first quarter of 2016 and the operations of the post merger company for the first quarter of 2017. I'd like to begin reviewing Snap's financial performance for the first quarter. Turning to slide 11, we outline our financial highlights that I will now get into in more detail. As shown on slide 12, total revenues for the first quarter of 2017 were $6.2 million, up 36.1% from the same period last year. The increase in revenues from the prior year, were predominantly due to the contribution of pre-merger Snap, which as we have just discussed, closed in October. Revenues for the quarter were comprised of $6.2 million from subscriptions and $495,000 from advertising. Subscription revenue grew 41.8% from the prior period, also due to the contribution of pre-merger Snap. This was offset somewhat by a decline in subscription revenue of approximately 6.3% from products attributable to pre-merger AVM. We believe that this decrease was driven in part by an anticipated decrease in new transactions in the Paltalk product as we shift management attention and resources to new higher growth opportunities in the live video market. Turning to slide 13, adjusted EBITDA in the first quarter was a loss of $214,000 as compared to a gain of $638,000 in the prior year. Our adjusted EBITDA during this quarter includes a one-time lease cancellation fee of $225,000 from the merger integration efforts. Cash flow from operations was $943,000 as compared to $408,000 last year. Moving on to slide 14, as of December 31st -- as of March 31st 2016, we had $5 million in cash and cash equivalents and zero debt; cash increased from December 31, 2016 by approximately $860,000. Snap continues to be in one of the strongest financial conditions that it has been in for many years. We're realizing revenue growth and cost efficiencies as a result of the merger. Our cash flow from operations is positive and we have approximately $4 million net operating loss carry forward, which should allow us to minimize tax expense for the foreseeable future. As Alex mentioned, we certainly plan to invest in additional people and resources to grow our business. But we will continue to focus on self sustainability, profitability and cash flow. With that, said I'd like to turn the call back over to Alex.

Thank you, Judy. In closing and before we open the call for questions, I'd like to reinforce our excitement. Our investment thesis is simple we're in a large market with explosive growth potential. We have a technological, commercial and financial platform that we believe gives us a competitive advantage in this exciting market. And we're in the process of expanding our existing businesses and building new businesses to capture this growth wave. Also have a successful track record of leveraging acquisitions for a strategic and financial springboard. And for investors who want to place a bet on Internet live video, to our knowledge, we're the only public company that has made it a core focus. And with that, I'd love to turn it over to questions.