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 floor is yours.

Hello, everyone, and welcome to the Paltalk operating and financial results conference call for the second quarter June 30, 2023. By now, everyone should have access to the earnings results press release which was issued earlier today at the close of market at 4:00 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 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 annual report on Form 10-K for the year ended December 31, 2022. You should refer to 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, provide us and our investors with additional analytic 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 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 30, 2023. Additionally, we will provide an update on our business and near-term business objectives. After my opening statement, our CFO, Kara Jenny, will give a summary of our financial results for the second quarter ended June 30, 2023. Following our prepared remarks, we will 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 highlights and near-term business objectives. We are very pleased with our return to revenue growth and profitability during the second quarter. All of our attention and effort to optimize our platforms and streamline our costs have paid off and improved our foundation. Our infrastructure is capable of supporting additional business. So if we continue to expand revenue, we are confident that it would result in increased profitability. We believe that this business scalability, along with $13.7 million in cash on our balance sheet at quarter's end puts us in excellent position. We have already met one of our key objectives for 2023 with our return to increased revenue. Additionally, as we surpass the one-year anniversary of our asset acquisition of ManyCam and with the successful integration of ManyCam into Paltalk, and our team's effort in developing a new and easier-to-use version, we expect the one-year annual auto renewals of existing ManyCam subscriptions to help contribute to growth in subscription revenue in future periods. While our trial against Cisco was pushed back to an expected trial date in the fourth quarter of 2023, the court recently denied Cisco's motion for summary judgment and…

Thank you, Jason. Our results of operations for the three months ended June 30, 2023, were as follows: revenue for the three months ended June 30, 2023, increased by nearly 12% to $3 million compared to $2.6 million for the three months ended June 30, 2022. This increase was attributed to an increase in virtual goods revenue as well as a full year of sales from ManyCam. These increases were partially offset by a decrease in advertising revenues of 15%. Loss from operations for the three months ended June 30, 2023, decreased by 73% or $0.8 million to a loss of $0.3 million, compared to a loss of $1.1 million for the same period in 2022. The decrease in the loss was attributed to the increased revenue. Net income for the three months ended June 30, 2023, was $0.1 million compared to a net loss of $1.1 million for the three months ended June 30, 2022. The improvement is attributed to the increase in sales, reduced expenses and to the recording of $0.3 million net recognized in connection with the company's recording of a refundable employee retention tax credit. Adjusted EBITDA loss for the three months ended June 30, 2023, decreased by over 98% or $0.9 million to an adjusted EBITDA loss of $15,000 compared to adjusted EBITDA loss of $0.9 million for the three months ended June 30, 2022. Currently, the company has no long-term debt on its balance sheet. We'd now like to move on to questions that were previously submitted.

The first question, can you comment on why the Cisco Webex trial has been delayed twice and pushed out to December?

Like any plaintiff in a lawsuit, we are subject to the scheduling of the court as they control the calendar. We're pleased that the court denied Cisco's motion for summary judgment and stated that the trial is expected to be reset for December.

Are you still actively looking at bolt-on acquisitions? Can we expect something by the end of 2023?

We are still active and are looking for the right acquisition with our advisers at Roth Capital and although we'd like to complete something as soon as feasible, we will not rush the process. We are committed to finding a deal that will enhance shareholder value.

The last question; when will ManyCam be marketed to Paltalk and Camfrog subscribers?

Well, we recently launched a version of Paltalk that has ManyCam functionality and we continue to message users about the numerous benefits of ManyCam.

Thank you. Jason, back to you to close out the presentation.

Thanks, everyone, for your support and for joining us today. We are very grateful for your interest in our business. We look forward to updating the market and our stockholders with our progress on our business objectives, patent litigation against Cisco WebEx with the trial now expected to start in the latter part of the fourth quarter, and potential strategic accretive acquisitions, which we continue to identify and analyse. Have a great day.

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.