8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August10, 2021

PALTALK, INC.
(Exact name of registrant as specified in its charter)
Delaware	001-38717	20-3191847
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(State or other jurisdiction of	(Commission File Number)	(IRS Employer
incorporation)		Identification No.)

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30 Jericho Executive Plaza, Suite 400E<br><br> <br>Jericho, NY	11753
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 967-5120

(Former name or former address, if changed since last report)

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Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17<br> CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17<br> CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange<br> Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br><br> <br>Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	PALT	The Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Section 2 — Financial Information

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Item 2.02	Results of Operations and Financial Condition.

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On August 10, 2021, Paltalk, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2021. The press release is furnished as Exhibit 99.1.

The information in this Current Report on Form 8-K (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filing.

Section 9 — Financial Statements and Exhibits

Item 9.01	Financial Statements and Exhibits.

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(d) Exhibits

Exhibit No.	Description
99.1	Press Release of Paltalk, Inc. dated August 10, 2021 (furnished pursuant to Item 2.02).
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	August 10, 2021
		PALTALK, INC.
		By:	/s/ Jason Katz
			Jason Katz<br><br>Chief Executive Officer

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Exhibit99.1

Paltalk,Inc. Reports Second Quarter 2021 Financial Results

Approximately50% Increase in Second Quarter Net Income Compared to Prior Year Period; Completed Uplisting to the Nasdaq Capital Market, Ticker Remains“PALT”

JERICHO, NY, August 10, 2021 (GLOBE NEWSWIRE) -- via NewMediaWire -- Paltalk, Inc., (“Paltalk,” “the Company,” “we,” “our” or “us”) (Nasdaq: PALT), a leading communications software innovator that powers multimedia social applications, today announced financial and operational results for the second quarter of 2021.

FINANCIALAND BUSINESS HIGHLIGHTS:

●	Revenue<br> for the three months ended June 30, 2021 increased by 1% to $3.4 million, compared to the<br> three months ended June 30, 2020. This growth was driven primarily by an increase in technology<br> service revenue of $0.1 million; revenue for the six months ended June 30, 2021 increased<br> by 11% to $6.8 million, compared to the six months ended June 30, 2020;
●	Income<br> from operations for the three months ended June 30, 2021 was $0.6 million which includes<br> a non-cash impairment of approximately $0.2 million, an increase of $46 thousand compared<br> to the three months ended June 30, 2020; while income from operations for the six months<br> ended June 30, 2021 increased by $0.8 million compared to the six months ended June 30, 2020;<br> and
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●	Net<br> income for the three months ended June 30, 2021, achieved $0.8 million, an increase of $0.3<br> million compared to the three months ended June 30, 2020; net income for the six months ended<br> June 30, 2021, totaled $1.7 million an increase of $1.6 million compared to the six months<br> ended June 30, 2020.
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LIQUIDTYAND CAPITAL RESOURCES:

●	Achieved<br> positive cash flow from operations of $0.6 million for the six months ended June 30, 2021,<br> an improvement of $189 thousand compared to the six months ended June 30, 2020;
●	Cash<br> and cash equivalents totaled $6.5 million at June 30, 2021, an increase of $0.9 million compared<br> to December 31, 2020; and
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●	Currently,<br> the Company has no long-term debt on its balance sheet.
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SUBSEQUENTEVENTS:

●	Completed<br> an uplist of our common stock to The Nasdaq Capital Market on August 3, 2021, under the Company’s<br> current ticker symbol “PALT”; and
●	Raised<br> net proceeds of approximately $3.5 million in connection with our underwritten public offering<br> of 1,333,310 shares of common stock (which includes the full exercise of the underwriter’s<br> over-allotment option) at a price to the public of $3.00 per share.
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Jason Katz, Chairman and CEO of Paltalk, commented, “The uplisting of our common stock to Nasdaq has been an important goal for us and we’re excited to have achieved this significant milestone in Paltalk’s evolution. Along with increasing our visibility in the marketplace, the uplisting has the potential to improve the liquidity of our stock, further broaden our institutional stockholder base and ultimately enhance long-term stockholder value. I would like to thank our investors, employees, and partners for their contribution towards the completion of the uplisting.”

“Our second quarter results were solid compared to the prior year period, during which the COVID-19 pandemic likely contributed to an increase in revenue and overall engagement as a result of the global shutdown. We sustained a revenue increase in the current second quarter and, coupled with continued tight expense control and the sale of some Props tokens, net income increased approximately 50% compared to the three months ended June 30, 2020. We have a strong balance sheet with good liquidity, no long-term debt and cash and cash equivalents of $6.5 million, an increase of approximately $1.0 million in the six months since year-end. With our successful capital raise, we now have a cash position of over $10.0 million which will be used for continued reinvestment in our business through further investment in marketing, development in applications and potential acquisitions. Paltalk has built good momentum over the last several quarters and we believe that we are well positioned for continued growth.”

KeyFinancial and Operating Metrics from Operations (unaudited):

(in thousands, except for percentages)

					Change
	Q2 2021		Q2 2020				%
Subscription revenue	$	3,122	$	3,211		)		(2.8	)%
Advertising revenue		75		58				29.3	%
Technology service revenue		218		112				94.6	%
Total revenues	$	3,415	$	3,381				1.0	%
Income from operations	$	577	$	531				8.7	%
Net income	$	822	$	532				54.5	%
Net cash provided by operating activities	$	516	$	406				27.1	%
Adjusted EBITDA (a non-GAAP measure)	$	669	$	594				12.6	%

All values are in US Dollars.

					Change
	YTD 2021		YTD 2020			%
Subscription revenue	$	6,261	$	5,861			6.8	%
Advertising revenue		152		114			33.3	%
Technology service revenue		374		127			194.5	%
Total revenues	$	6,787	$	6,102			11.2	%
Income from operations	$	986	$	167			490.4	%
Net income	$	1,738	$	93			1,768.8	%
Net cash provided by operating activities	$	612	$	423			44.7	%
Adjusted EBITDA (a non-GAAP measure)	$	1,204	$	472			155.1	%

All values are in US Dollars.

ABOUTPALTALK, INC. (Nasdaq: PALT)

Paltalk, Inc. is a communications software innovator that powers multimedia social applications. Our product portfolio includes Paltalk and Camfrog, which together host one of the world’s largest collections of video-based communities. Our other products include Tinychat and Vumber. The Company has an over 20-year history of technology innovation and holds 18 patents. For more information, please visit: http://www.paltalk.com.

To be added to our news distribution list, please visit: http://www.paltalk.com/investor-alerts/.

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FORWARD-LOOKING STATEMENTS:

This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential,” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, the Company’s ability to retain the listing of its common stock on The Nasdaq Capital Market; the impact of the COVID-19 pandemic on our results of operations and our business; our ability to effectively market and generate revenue from our applications; our ability to release new applications or improve upon or add features to existing applications on schedule or at all; risks and uncertainties related to our increasing focus on the use of new and novel technologies, such as Props tokens, to enhance our applications, and our ability to timely complete development of applications using new technologies; our ability to effectively integrate Props tokens into our existing applications; our ability to effectively secure new software development and licensing customers; our ability to protect our intellectual property rights; the use of the internet and privacy and protection of user data; risks related to our holdings of digital tokens, including risks related to the volatility of the trading price of digital tokens and our ability to convert digital tokens into fiat currency ;and our ability to manage our partnerships and strategic alliances. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at www.sec.gov.

All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement was made, except to the extent required by applicable securities laws.

CONTACTS:

IR@paltalk.com

Stephanie Prince

PCG Advisory

sprince@pcgadvisory.com

646-863-6341

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PALTALK,INC.

RECONCILIATIONOF GAAP TO NON-GAAP RESULTS

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Reconciliation of Net income to Adjusted EBITDA:
Net income	$	821,684		$	531,541		$	1,738,413		$	93,157
Interest expense (income), net		420			1,210			(2,047	)		(10,977	)
Other expense (income), net		-			(4,589	)		-			56,042
Gain on extinguishment of term debt		-			-			(506,500	)		-
Provision for income taxes		2,200			2,500			3,300			5,000
Gain on office lease termination		-			(141,001	)		-			(141,001	)
Impairment loss on digital tokens		184,737			-			184,737			-
Realized gain (loss) from sale of digital tokens		(247,293	)		-			(247,293	)		23,838
Depreciation and amortization expense		99,243			146,949			194,189			299,893
Stock-based compensation expense		(192,342	)		57,183			(160,974	)		146,389
Adjusted EBITDA	$	668,649		$	593,793		$	1,203,825		$	472,341

Non-GAAPFinancial Measures and Key Metrics

The Company has provided in this release certain non-GAAP financial measures, including Adjusted EBITDA, and other key metrics, including subscription bookings, to supplement the consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company defines Adjusted EBITDA as net income adjusted to exclude interest expense (income), net, other expense (income), net, gain on the extinguishment of term debt, provision for income taxes, realized gain (loss) from sale of digital tokens, gain on office lease termination, impairment loss on digital tokens, depreciation and amortization expense and stock-based compensation expense. The Company calculates subscription bookings as subscription revenue recognized during the period plus the change in deferred subscription revenue recognized during the period.

Management uses these financial metrics internally in analyzing the Company’s financial results to assess operational performance and to determine the Company’s future capital requirements. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. The Company believes that both management and investors benefit from referring to these financial metrics in assessing our performance and when planning, forecasting and analyzing future periods. The Company believes these financial metrics are useful to investors and others to understand and evaluate the Company’s operating results and it allows for a more meaningful comparison between the Company’s performance and that of competitors. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this performance measure in isolation from or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

●	Adjusted<br> EBITDA does not reflect cash capital expenditures for assets underlying depreciation and<br> amortization expense that may need to be replaced or for new capital expenditures;
●	Adjusted<br> EBITDA does not reflect our working capital requirements;
●	Adjusted<br> EBITDA does not consider the potentially dilutive impact of stock-based compensation;
●	Adjusted<br> EBITDA does not reflect the realized gain (loss) from sale of digital tokens;
●	Adjusted<br> EBITDA does not reflect the impairment loss on digital tokens;
●	Adjusted<br> EBITDA does not reflect the gain on the extinguishment of term debt, gain on office lease<br> termination and the provision for income taxes; and
●	other<br> companies, including companies in our industry, may calculate Adjusted EBITDA differently,<br> which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider these financial metrics along with other financial performance measures, including total revenues, subscription revenue, deferred revenue, net income (loss), cash and cash equivalents, restricted cash, net cash used in operating activities and our financial results presented in accordance with GAAP.

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PALTALK,INC.

CONDENSEDCONSOLIDATED BALANCE SHEETS

			December 31,
			2020
Assets
Current assets:
Cash and cash equivalents	6,501,712		$	5,585,420
Accounts receivable, net of allowances of 3,648 as of June 30, 2021 and December 31, 2020, respectively	52,261			71,410
Deferred Offering Costs	212,420			-
Prepaid expense and other current assets	208,084			236,704
Total current assets	6,974,477			5,893,534
Operating lease right-of-use asset	34,946			68,967
Property and equipment, net	153,921			255,777
Goodwill	6,326,250			6,326,250
Intangible assets, net	288,877			381,210
Digital tokens	931,232			439,145
Digital tokens receivable	-			210,000
Other assets	13,937			13,937
Total assets	14,723,640		$	13,588,820
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	889,623		$	742,141
Accrued expenses and other current liabilities	102,275			254,084
Operating lease liabilities, current portion	34,946			68,967
Digital tokens payable	272,984			123,397
Term debt, current portion	-			338,792
Deferred subscription revenue	2,011,363			2,058,721
Total current liabilities	3,311,191			3,586,102
Term debt, non-current portion	-			167,708
Total liabilities	3,311,191			3,753,810
Commitments and Contingencies
Stockholders’ equity:
Common stock, 0.001 par value, 25,000,000 shares authorized, and 6,916,404 shares issued and 6,906,454 shares outstanding as of June 30, 2021 and December 31, 2020, respectively	6,917			6,917
Treasury stock, 9,950 shares at par as of June 30, 2021 and December 31, 2020	(10,859	)		(10,859	)
Additional paid-in capital	21,407,067			21,568,041
Accumulated deficit	(9,990,676	)		(11,729,089	)
Total stockholders’ equity	11,412,449			9,835,010
Total liabilities and stockholders’ equity	14,723,640		$	13,588,820

All values are in US Dollars.

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PALTALK,INC.

CONDENSEDCONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended<br> June 30,						Six Months Ended<br> June 30,
	2021			2020			2021			2020
Revenues:
Subscription revenue	$	3,121,909		$	3,210,619		$	6,261,274		$	5,860,742
Advertising revenue		75,462			57,856			152,283			113,523
Technology service revenue		218,432			112,000			374,248			126,952
Total revenues		3,415,803			3,380,475			6,787,805			6,101,217
Costs and expenses:
Cost of revenue		630,582			685,430			1,277,297			1,308,154
Sales and marketing expense		255,204			221,416			512,655			413,086
Product development expense		1,298,767			1,255,884			2,596,031			2,506,580
General and administrative expense		469,502			687,083			1,231,212			1,706,337
Impairment loss on digital tokens		184,737			-			184,737			-
Total costs and expenses		2,838,792			2,849,813			5,801,932			5,934,157
Income from operations		577,011			530,662			985,873			167,060
Interest (expense) income, net		(420	)		(1,210	)		2,047			10,977
Gain on extinguishment of term debt		-			-			506,500			-
Realized gain (loss) from the sale of digital tokens		247,293			-			247,293			(23,838	)
Other income (expense), net		-			4,589			-			(56,042	)
Income from operations before provision for income taxes		823,884			534,041			1,741,713			98,157
Provision for income taxes		(2,200	)		(2,500	)		(3,300	)		(5,000	)
Net income	$	821,684		$	531,541		$	1,738,413		$	93,157
Net income per share of common stock:
Basic	$	0.12		$	0.08		$	0.25		$	0.01
Diluted	$	0.12		$	0.08		$	0.25		$	0.01
Weighted average number of shares of common stock used in calculating net income per share of common stock:
Basic		6,906,454			6,869,027			6,906,454			6,871,299
Diluted		6,930,041			6,869,027			6,918,248			6,871,299

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PALTALK,INC.

CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended<br> June 30,
	2021			2020
Cash flows from operating activities:
Net income	$	1,738,413		$	93,157
Adjustments to reconcile net income from operations to net cash provided by operating activities:
Depreciation of property and equipment		101,856			171,726
Amortization of intangible assets		92,333			128,167
Amortization of operating lease right-of-use assets		34,021			76,828
Gain on cancellation of office lease		-			(141,001	)
Impairment loss on digital tokens		184,737			-
Realized (gain) loss from the sale of digital tokens		(247,293	)		23,838
Write-off of note receivable		-			56,042
Gain on extinguishment of term debt		(506,500	)		-
Stock-based compensation		(160,974	)		146,389
Bad debt expense		(3,235	)		-
Changes in operating assets and liabilities:
Digital tokens		(733,835	)		-
Accounts receivables		22,384			117,900
Digital tokens receivable		210,000			(112,000	)
Operating lease liability		(34,021	)		(80,419	)
Digital tokens payable		149,587			-
Deferred offering costs		(212,420	)		-
Prepaid expenses and other current assets		28,620			(14,417	)
Other assets		-			16,897
Accounts payable, accrued expenses and other current liabilities		(4,327	)		(200,382	)
Deferred subscription revenue		(47,358	)		140,070
Net cash provided by operating activities		611,988			422,795
Cash flows from investing activities:
Proceeds from the sale of digital tokens		304,304			31,356
Net cash provided by investing activities		304,304			31,356
Cash flows from financing activities:
Borrowings of term debt		-			506,500
Purchase of treasury stock		-			(8,844	)
Net cash provided by financing activities		-			497,656
Net increase in cash and cash equivalents		916,292			951,807
Balance of cash and cash equivalents at beginning of period		5,585,420			3,427,058
Balance of cash and cash equivalents at end of period	$	6,501,712		$	4,378,865

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