IPM 8-K
Intelligent Protection Management Corp. (IPM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Section 2 — Financial Information
Item 2.02 Results of Operations and Financial Condition.
On March 23, 2022, Paltalk, Inc. (the “Company”) issued a press release announcing its financial results for the year and quarter ended December 31, 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 8 — Other Events
Item 8.01 Other Events.
On March 21, 2022, the board of directors of the Company approved a stock repurchase plan for up to $1,750,000 of the Company’s outstanding common stock (the “Stock Repurchase Plan”). The Stock Repurchase Plan is effective as of March 29, 2022 and expires on the one-year anniversary of such date. Shares may be repurchased from time-to-time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs, and the Stock Repurchase Plan may be suspended or discontinued at any time. The actual timing, number and value of shares repurchased will be determined by a committee of the board of directors at its discretion and will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, alternative investment opportunities and other corporate considerations.
Section 9 — Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press Release of Paltalk, Inc., dated March 23, 2022 (furnished pursuant to Item 2.02). | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
1
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: March 23, 2022 | |||
| PALTALK, INC. | |||
| By: | /s/ Jason Katz | ||
| Jason Katz | |||
| Chief Executive Officer | |||
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Exhibit 99.1
Paltalk, Inc. Reports Fourth Quarter and Full Year 2021 Financial Results
Annual Revenue Growth of 3% Led to Full Year Net Income of $1.3 Million
Cash Balance of $21.6 Million, Board of Directors Approves a Stock Repurchase Plan
Jericho, NY - March 23, 2022 (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 fourth quarter and year ended December 31, 2021.
Key Financial Highlights for Fourth Quarter Ended December 31, 2021 Compared to Prior Year Period
| ● | Revenue decreased 9% to $3.1 million, due to the decrease in technology service revenue in the fourth quarter of 2021 |
| ● | Subscription revenue remained flat at $3.0 million |
| ● | Advertising revenue increased 18% to $0.1 million |
| ● | Adjusted EBITDA loss of $0.2 million |
| ● | Net (loss) income decreased $0.5 million to ($5) thousand |
| ● | Cash flow from operations was $0.2 million |
Key Financial Highlights for Year Ended December 31, 2021 Compared to Prior Year Period
| ● | Revenue increased 3% to $13.3 million |
| ● | Subscription revenue increased 3% to $12.4 million |
| ● | Advertising revenue increased 39% to $0.5 million |
| ● | Adjusted EBITDA of $1.3 million |
| ● | Net income decreased 3% to $1.3 million |
| ● | Cash flow from operations was $1.3 million |
Business Highlights for the Year Ended December 31, 2021
| ● | Raised gross proceeds of approximately $11.6 million, before deducting underwriting discounts, commissions and other offering expenses, in connection with an underwritten public offering of 1,552,500 shares of common stock (which includes the full exercise of the underwriter’s over-allotment option) at a price to the public of $7.50 per share; |
| ● | Completed an uplist of common stock to The Nasdaq Capital Market; |
| ● | Raised net proceeds of approximately $3.5 million in connection with an underwritten public offering of 1,333,310 shares of common stock (which includes the full exercise of the underwriter’s over-allotment option) at a price to the public of $3.00 per share; |
| ● | Sold approximately 36.9 million Props tokens for total proceeds of $0.9 million; |
| ● | Launched Paltalk Feed message board functionality aimed at increasing user engagement; and |
| ● | Implemented a new rewards program, Paltalk Rewards Points, to grow user engagement with loyalty and retention benefits. |
Subsequent Events
| ● | Selected yellowHEAD, an AI-powered performance marketing company, to lead the Company’s increased marketing efforts for its Camfrog application; |
| ● | Partnered with NoGood, a growth marketing firm, to accelerate user acquisition for the Company’s Paltalk application; and |
| ● | Partnered with Hive Automated Content Moderation Solutions to roll out new content moderation software for increased user experience. |
Stock Repurchase Authorization
On March 21, 2022, the Company’s board of directors approved a stock repurchase plan for up to $1.75 million of the Company’s common stock. The plan is effective as of March 29, 2022 and expires on the one-year anniversary of such date. Shares may be repurchased from time-to-time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs. The timing and number of shares repurchased, if any, will depend on a variety of factors, including price, general market and economic conditions, alternative investment opportunities and other corporate considerations. The stock repurchase plan does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time.
Management Commentary
Jason Katz, Chairman and CEO of Paltalk, commented, “Our quarterly results remain positive and consistent due to our recurring subscription revenue, which makes up the majority of our revenue and has historically provided excellent predictability and visibility for our business. During the fourth quarter of 2021, we raised $11.6 million at $7.50 per share. This capital infusion gives us added flexibility in growing our business organically and potentially through acquisitions, which we continue to explore.”
Katz, continued, “We believe we have entered the next growth phase of our business. During the fourth quarter of 2021, we invested in new marketing tools with a focus on increasing visibility, user engagement, subscribers and customer engagement. We forged new partnerships with marketing agencies in the first quarter of 2022 and they are just now commencing their efforts. We plan to continue this incremental marketing spend with a careful eye on our internal metrics of users, subscribers and engagement, as return on investment (“ROI”) is very important to us. We aim to increase marketing and customer engagement as we carefully manage our capital. We look forward to updating the market and our shareholders with our progress on both internal growth initiatives and potential strategic accretive acquisitions. Additionally, we expect that the new stock repurchase plan recently approved by our Board will enhance our capital allocation strategy by providing additional flexibility to opportunistically repurchase shares at attractive prices. This repurchase plan will help us to deploy corporate resources in a way that increases stockholder value while reinvesting in our business.”
Financial Results for Three Months Ended December 31, 2021
| ● | Revenue for the three months ended December 31, 2021 decreased by 9% to $3.1 million, compared to $3.4 million for the three months ended December 31, 2020. This decline was almost entirely attributable to the decrease in technology service revenue as a result of the termination of our partnership with Open Props, Inc. (formerly “YouNow”). Subscription revenue decreased 1% and advertising revenue increased 18%; |
| ● | Net income (loss) for the three months ended December 31, 2021 decreased by $0.5 million to a loss of $0.01 million, compared to income of $0.5 million for the three months ended December 31, 2020; |
| ● | Adjusted EBITDA for the three months ended December 31, 2021 decreased by approximately $1.0 million to a loss of $0.2 million, compared to positive EBITDA of $0.8 million for the three months ended December 31, 2020; |
| ● | Cash and cash equivalents totaled $21.6 million at December 31, 2021, an increase of $16.1 million compared to $5.6 million at December 31, 2020; and |
| ● | Currently, the Company has no long-term debt on its balance sheet. |
2
Financial Results for Year Ended December 31, 2021
| ● | Revenue for the year ended December 31, 2021 increased by 3% to $13.3 million, compared to $12.8 million for the year ended December 31, 2020. This growth was mainly driven by an increase in subscription revenue and advertising revenue; |
| ● | Income from operations for the year ended December 31, 2021 decreased by approximately $0.7 million to $0.5 million, compared to $1.2 million for the same period in 2020. The income from operations for the year ended December 31, 2021 included a non-cash impairment loss on digital tokens of approximately $0.8 million; |
| ● | Net income for the year ended December 31, 2021 remained relatively unchanged at $1.3 million, compared to the year ended December 31, 2020; and |
| ● | Adjusted EBITDA for the year ended December 31, 2021 decreased by $0.7 million to a $1.3 million, compared to $2.0 million the year ended December 31, 2020. |
Key Financial and Operating Metrics from Operations (unaudited):
(in thousands, except for percentages)
| Three Months Ended | ||||||||||||||||
| December 31, | Change | |||||||||||||||
| 2021 | 2020 | $ | % | |||||||||||||
| Subscription revenue | $ | 2,958 | $ | 2,981 | $ | (23 | ) | (1 | )% | |||||||
| Advertising revenue | 148 | 126 | 22 | 18 | % | |||||||||||
| Technology service revenue | 3 | 316 | (313 | ) | (99 | )% | ||||||||||
| Total revenues | $ | 3,108 | $ | 3,422 | $ | (314 | ) | (9 | )% | |||||||
| Income (loss) from operations | $ | (10 | ) | $ | 532 | $ | (542 | ) | (102 | )% | ||||||
| Net income (loss) | $ | (5 | ) | $ | 531 | $ | (536 | ) | (101 | )% | ||||||
| Net cash provided by operating activities | $ | 175 | $ | 523 | $ | (348 | ) | (67 | )% | |||||||
| Adjusted EBITDA (a non-GAAP measure) | $ | (223 | ) | $ | 750 | $ | (973 | ) | (130 | )% | ||||||
| Year Ended | ||||||||||||||||
| December 31, | Change | |||||||||||||||
| 2021 | 2020 | $ | % | |||||||||||||
| Subscription revenue | $ | 12,368 | $ | 11,966 | $ | 402 | 3 | % | ||||||||
| Advertising revenue | 451 | 325 | 126 | 39 | % | |||||||||||
| Technology service revenue | 455 | 541 | (86 | ) | (16 | )% | ||||||||||
| Total revenues | $ | 13,274 | $ | 12,832 | $ | 442 | 3 | % | ||||||||
| Income from operations | $ | 519 | $ | 1,243 | $ | (724 | ) | (58 | )% | |||||||
| Net income | $ | 1,324 | $ | 1,371 | $ | (47 | ) | (3 | )% | |||||||
| Net cash provided by operating activities | $ | 1,265 | $ | 1,435 | $ | (170 | ) | (12 | )% | |||||||
| Adjusted EBITDA (a non-GAAP measure) | $ | 1,281 | $ | 1,956 | $ | (675 | ) | (35 | )% | |||||||
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ABOUT PALTALK, 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 14 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/.
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 amount and timing of stock repurchases, if any, under the Company’s stock repurchase plan and our ability to enhance stockholder value through such plan; 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 to enhance our applications, and our ability to timely complete development of applications using new technologies; 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.
Investor Contacts:
Brian Loper
ClearThink
347-413-4234
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PALTALK, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Reconciliation of Net Income (Loss) to Adjusted EBITDA: | ||||||||||||||||
| Net income (loss) | $ | (5,271 | ) | $ | 531,257 | $ | 1,324,106 | $ | 1,371,262 | |||||||
| Stock compensation expense | 31,891 | 49,101 | (35,653 | ) | 243,197 | |||||||||||
| Depreciation and amortization expense | 84,398 | 129,861 | 370,845 | 571,725 | ||||||||||||
| Gain on office lease termination | - | - | - | (141,001 | ) | |||||||||||
| Impairment loss on digital tokens | 9,037 | - | 765,232 | - | ||||||||||||
| Interest expense (income), net | 1,719 | 1,899 | (133 | ) | (7,119 | ) | ||||||||||
| Gain from Sale of Secured Communications Assets | - | - | - | (250,000 | ) | |||||||||||
| Loss on disposal of property and equipment | - | 39,238 | - | 39,238 | ||||||||||||
| Gain on extinguishment of term debt | - | - | (506,500 | ) | - | |||||||||||
| Realized loss (gain) from sale of digital tokens | (6,774 | ) | - | (307,934 | ) | 72,123 | ||||||||||
| Gain on termination of digital tokens payable | (338,553 | ) | - | (338,553 | ) | - | ||||||||||
| Other expense | - | - | - | 56,042 | ||||||||||||
| Income tax expense (benefit) | 485 | (1,313 | ) | 9,951 | 387 | |||||||||||
| Reported Adjusted EBITDA | $ | (223,068 | ) | $ | 750,043 | $ | 1,281,361 | $ | 1,955,854 | |||||||
Non-GAAP Financial 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 Adjusted EBITDA is defined as net income (loss) adjusted to exclude stock-based compensation expense, depreciation and amortization expense, gain on office lease termination, impairment loss on digital tokens, interest expense (income), net, gain from sale of Secured Communications Assets, loss on disposal of property and equipment, gain on extinguishment of term debt, realized gain from sale of digital tokens, gain on termination of digital tokens payable, other expense, and provision for income taxes. 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 that Adjusted EBITDA does not reflect: cash capital expenditures for assets underlying depreciation and amortization expense that may need to be replaced or for new capital expenditures; net loss from discontinued operations; interest income, net; other expense, net; gain on sale of the Dating Services Business; income tax expense from continuing operations; gain on office lease termination; impairment loss on goodwill; gain from sale of Secured Communication Assets; loss on disposal of property and equipment; our working capital requirements; the impairment loss on digital tokens; realized gain (loss) from the sale of digital tokens; the potentially dilutive impact of stock-based compensation; gain on the extinguishment of term debt; and the provision for income taxes. Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, 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.
5
PALTALK, INC.
CONSOLIDATED BALANCE SHEETS
| As of December 31, | ||||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 21,636,860 | $ | 5,585,420 | ||||
| Accounts receivable, net of allowances of $3,648 as of December 31, 2021 and 2020, respectively | 153,448 | 71,410 | ||||||
| Prepaid expense and other current assets | 239,258 | 236,704 | ||||||
| Total current assets | 22,029,566 | 5,893,534 | ||||||
| Operating lease right-of-use asset | 239,491 | 68,967 | ||||||
| Property and equipment, net | 69,599 | 255,777 | ||||||
| Goodwill | 6,326,250 | 6,326,250 | ||||||
| Intangible assets, net | 196,543 | 381,210 | ||||||
| Digital tokens | 7,262 | 439,145 | ||||||
| Digital tokens receivable | - | 210,000 | ||||||
| Other assets | 13,937 | 13,937 | ||||||
| Total assets | $ | 28,882,648 | $ | 13,588,820 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,332,632 | $ | 742,141 | ||||
| Accrued expenses and other current liabilities | 344,441 | 254,084 | ||||||
| Operating lease liabilities, current portion | 80,309 | 68,967 | ||||||
| Digital tokens payable | - | 123,397 | ||||||
| Term debt, current portion | - | 338,792 | ||||||
| Deferred subscription revenue | 1,915,493 | 2,058,721 | ||||||
| Total current liabilities | 3,672,875 | 3,586,102 | ||||||
| Operating lease liabilities, non-current portion | 159,182 | - | ||||||
| Term debt, non-current portion | - | 167,708 | ||||||
| Total liabilities | 3,832,057 | 3,753,810 | ||||||
| Commitments and contingencies (Note 12) | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, $0.001 par value, 25,000,000 shares authorized, 9,864,120 and 6,916,404 shares issued and 9,832,157 and 6,906,454 shares outstanding as of December 31, 2021 and 2020, respectively | 9,864 | 6,917 | ||||||
| Treasury stock, 31,963 and 9,950 shares as of December 31, 2021 and 2020, respectively | (194,200 | ) | (10,859 | ) | ||||
| Additional paid-in capital | 35,639,910 | 21,568,041 | ||||||
| Accumulated deficit | (10,404,983 | ) | (11,729,089 | ) | ||||
| Total stockholders’ equity | 25,050,591 | 9,835,010 | ||||||
| Total liabilities and stockholders’ equity | $ | 28,882,648 | $ | 13,588,820 | ||||
6
PALTALK, INC.
CONSOLIDATED STATEMENTS OF INCOME
| Years Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Revenues | ||||||||
| Subscription revenue | $ | 12,368,008 | $ | 11,966,497 | ||||
| Advertising revenue | 451,337 | 325,475 | ||||||
| Technology service revenue | 454,504 | 540,700 | ||||||
| Total revenue | 13,273,849 | 12,832,672 | ||||||
| Costs and expenses | ||||||||
| Costs of revenue | 2,720,189 | 2,573,083 | ||||||
| Sales and marketing expense | 1,170,386 | 825,069 | ||||||
| Product development expense | 5,391,819 | 5,025,482 | ||||||
| General and administrative expense | 2,706,733 | 3,166,343 | ||||||
| Impairment loss on digital tokens | 765,232 | - | ||||||
| Total costs and expenses | 12,754,359 | 11,589,977 | ||||||
| Income from operations | 519,490 | 1,242,695 | ||||||
| Interest income, net | 133 | 7,119 | ||||||
| Gain from sale of Secured Communications Assets | - | 250,000 | ||||||
| Gain on extinguishment of term debt | 506,500 | - | ||||||
| Realized gain (loss) from the sale of digital tokens | 307,934 | (72,123 | ) | |||||
| Other expense | - | (56,042 | ) | |||||
| Income from operations before provision for income taxes | 1,334,057 | 1,371,649 | ||||||
| Expense for income taxes | (9,951 | ) | (387 | ) | ||||
| Net income | 1,324,106 | 1,371,262 | ||||||
| Net income per share of common stock: | ||||||||
| Basic | $ | 0.17 | $ | 0.20 | ||||
| Diluted | $ | 0.17 | $ | 0.20 | ||||
| Weighted average number of shares of common stock used in calculating net income per share of common stock: | ||||||||
| Basic | 7,766,111 | 6,884,690 | ||||||
| Diluted | 7,809,132 | 6,887,808 | ||||||
7
PALTALK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Years Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 1,324,106 | $ | 1,371,262 | ||||
| Adjustments to reconcile net income from operations to net cash provided by operating activities: | ||||||||
| Depreciation of property and equipment | 186,178 | 325,044 | ||||||
| Amortization of intangible assets | 184,667 | 246,681 | ||||||
| Amortization of operating lease right-of-use assets | 74,416 | 104,083 | ||||||
| Gain on cancellation of office lease | - | (141,001 | ) | |||||
| Loss on disposal of property and equipment | - | 39,238 | ||||||
| Gain on extinguishment of digital token liability | (338,553 | ) | - | |||||
| Impairment loss on digital tokens | 765,232 | - | ||||||
| Realized (gain) loss from the sale of digital tokens | (307,934 | ) | 72,823 | |||||
| Write-off of note receivable | - | 56,042 | ||||||
| Gain on extinguishment of term debt | (506,500 | ) | - | |||||
| Stock-based compensation | (35,653 | ) | 243,197 | |||||
| Bad debt expense | (3,235 | ) | 4,015 | |||||
| Common stock issued for consulting services | - | 43,500 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Digital tokens | (884,263 | ) | (439,145 | ) | ||||
| Accounts receivable | (78,803 | ) | 55,261 | |||||
| Digital tokens receivable | 210,000 | (210,000 | ) | |||||
| Operating lease liability | (74,416 | ) | (107,674 | ) | ||||
| Digital tokens payable | 215,156 | 123,397 | ||||||
| Prepaid expense and other current assets | (2,554 | ) | (219,263 | ) | ||||
| Other assets | - | 16,897 | ||||||
| Accounts payable, accrued expenses and other current liabilities | 680,848 | (378,285 | ) | |||||
| Deferred subscription revenue | (143,228 | ) | 229,228 | |||||
| Net cash provided by operating activities | 1,265,464 | 1,435,300 | ||||||
| Cash flows from investing activities: | ||||||||
| Proceeds from Secured Communications Assets | - | 150,000 | ||||||
| Proceeds from the sale of digital tokens | 858,848 | 75,406 | ||||||
| Net cash provided by investing activities | 858,848 | 225,406 | ||||||
| Cash flows from financing activities: | ||||||||
| Borrowings of term debt | - | 506,500 | ||||||
| Proceeds from issuance of common stock, net of issuance costs | 13,919,126 | - | ||||||
| Proceeds from Issuance of common stock pursuant to option exercise | 8,002 | - | ||||||
| Purchase of treasury stock | - | (8,844 | ) | |||||
| Net cash provided by financing activities | 13,927,128 | 497,656 | ||||||
| Net increase in cash and cash equivalents | 16,051,440 | 2,158,362 | ||||||
| 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 | $ | 21,636,860 | $ | 5,585,420 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Non-cash investing and financing activities: | ||||||||
| Modification of operating lease right-of-use asset and liability | $ | 244,940 | $ | - | ||||
| Issuance of common stock pursuant to cashless option exercises | $ | 38 | $ | - | ||||
| Treasury stock received from cashless option exercises | $ | 183,341 | $ | - | ||||
8