Paltalk, Inc.
Q2 2022 Earnings Call Transcript

Published: 8 Aug 2022

[Company Representatives:]

Jason Katz - Chief Executive Officer Kara Jenny - Chief Financial Officer

[Operator:]

Good afternoon, and welcome to the Paltalk Second Quarter 2022 Earnings 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, Jason Katz, Chief Executive Officer of Paltalk and Kara Jenny, Chief Financial Officer of Paltalk. Kara, the floor is yours.

[Kara Jenny:]

Hello everyone and welcome to the Paltalk second quarter 2022 operating and financial results conference call for the three months ended June 30, 2022. By now everyone should have had access to the earnings results press release, which was issued earlier today after the market closed at 4

[Jason Katz:]

Thank you, Kara, and good afternoon to 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, 2022. Additionally, we will provide an update on our strategy to target subscribers and advertising growth, discuss our recent acquisition of ManyCam assets and our engagement of Roth Capital Partners for strategic accretive acquisitions. After my opening statement, our CFO, Kara Jenny, will give a summary of our financial results for the second quarter ended June 30, 2022. With that, I would now like to walk you through the recent highlights. We’ve continued to fine-tune our strategy to focus on adjusted-EBITDA, optimization, the integration of the newly acquired ManyCam assets, and adjusting our spending to align with current macro-economic conditions. Our cash position as of June 30, 2022 remains solid at $16.9 million after utilizing $2.7 million for the acquisition of the ManyCam assets. We plan to continue to invest in a measured way with responsible cash management. Now I'd like to provide an update on ManyCam, our recently closed asset acquisition that I am very excited about and our engagement with Roth Capital Partners. During the second quarter we closed an asset acquisition involving ManyCam Software. ManyCam is a live streaming software and virtual camera that allows users to global professional live videos on streaming platforms; video and conferencing apps and distance learning tools. We were pleased that within days of acquiring the ManyCam assets we were able to launch ManyCam version 8.0, a software update with vast improvements over prior versions. ManyCam Version 8.0 offers quicker access, dark and light modes, and overall rendering performance improvement for high resolution users, as well as improve quality and performance with regard to virtual backgrounds. Users can now access a library of virtual backgrounds and play list. We expect these features will help make the product more desirable and a better compliment for Paltalk and Camfrog, which is a priority on our road map. Our team now plans to actively promoting and cross market ManyCam Version 8.0 to our Paltalk and Camfrog communities. Our team is optimizing the ManyCam assets to maximize subscription revenue, integrate and cross sell with existing customers, and explore business-to-business sales opportunities. Since our launch of ManyCam there have been over 300,000 new install for the software, and we believe although early, this is a positive sign. Also during the second quarter we announced our engagement Roth Capital Partners as our financial adviser and investment bankers to explore strategic initiatives focused on by-side acquisitions. We look forward to working with Roth and explore strategic opportunities as we build upon our acquisition of ManyCam assets. We feel there are multiple ways to expand our communication software in multimedia, social applications, which we believe have the potential to provide substantial value to Paltalk stockholders. Our NASDAQ listing status, cash position and current operating business strategy provide us a strong platform to execute our strategic plan to acquire additional complementary and synergistic businesses. Our goal is to get back to profitability. The whole portion of our strategy will come from the streamlining of expenses. We believe enhancements to our live video chat applications, ManyCam sales and cross-sales, integration of games and our focus on retention and monetization have the potential to increase revenue opportunities. We plan to continue to develop our consumer application platform and defend our intellectual property as we seek to build stockholder value. In addition, as previously disclosed our Board of Directors approved a stock repurchase plan for up to $1.75 million of the company's common stock, pursuant to which the company purchased 110,000 shares during the quarter. Also, some stockholders have been asking for an update on a patent litigation. As you already know, on July the 23, 2021 we filed a patent infringement lawsuit against WebEx Communications, Cisco WebEx LLC and Cisco Systems in the U.S. District Court for the Western District for Texas. We allege that Cisco’s Webex products have infringed our U.S. Patent No. 6,683,858, and that we are entitled to damages. A Markman hearing took place in February 2022 and the trial is scheduled for February2023. I trust this gives you a sense of some of the company initiatives we have implemented in order to spend prudently to conserve cash as we look to increase our subscribers and user engagement. We’ll return to positive cash flow and profitability and to build stockholder value. Now, I’d like to pass it to Kara for a financial summary of our second quarter ended June 30, 2022.

[Kara Jenny:]

Thank you, Jason. Our local operations for the three months ended June 30, 2022 are as follows

[Jason Katz:]

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 and our growth initiatives organically, and the potential strategic accretive acquisitions which we continue to identify and analyze. We plan on having our next quarterly results call in early to mid-November. Have a great day!

[Operator:]

Thank you ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day! Thank you for your participation.

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