8-K
INTELLIGENT PROTECTION MANAGEMENT CORP. (IPM)
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): August8, 2022
| PALTALK, INC. | ||
|---|---|---|
| (Exact name of registrant as specified in its charter) | ||
| Delaware | 001-38717 | 20-3191847 |
| --- | --- | --- |
| (State or other jurisdiction | (Commission File Number) | (IRS Employer |
| of incorporation) | Identification No.) |
| 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)
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
Item 2.02 Results of Operations and Financial Condition.
On August 8, 2022, Paltalk, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2022. 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.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release of Paltalk, Inc. dated August 8, 2022 (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 8, 2022 | ||
|---|---|---|---|
| PALTALK, INC. | |||
| By: | /s/ Jason Katz | ||
| Jason Katz | |||
| Chief Executive Officer |
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Exhibit99.1
Paltalk,Inc. Reports Second Quarter 2022 Financial Results
RefiningStrategy to Improve Performance and Optimize ManyCam Integration
CashBalance of $16.9 Million at Quarter End
Jericho,NY – August 8, 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 second quarter ended June 30, 2022.
KeyFinancial Highlights for:
ThreeMonths Ended June 30, 2022 Compared to Prior Year Period
| ● | Revenue<br> decreased 23% to $2.6 million, due to the decrease in subscription revenue and technology<br> service revenue in the second quarter of 2022; |
|---|---|
| ● | Subscription<br> revenue decreased 18% to $2.6 million; |
| --- | --- |
| ● | Advertising<br> revenue increased by over 11% to $0.1 million; |
| --- | --- |
| ● | Net<br> loss of $1.1 million compared to net income of $0.8 million; |
| --- | --- |
| ● | The<br> second quarter of 2022 includes non-recurring expenses of $0.2 million related to the asset<br> acquisition of ManyCam; and |
| --- | --- |
| ● | Adjusted<br> EBITDA loss of $0.9 million compared to Adjusted EBITDA income of $0.7 million; the decrease<br> in Adjusted EBITDA was primarily due to decreased revenue, increased marketing, product development<br> and general and administrative expenses. |
| --- | --- |
SixMonths Ended June 30, 2022 Compared to Prior Year Period
| ● | Revenue<br> decreased 18% to $5.6 million, due to the decrease in subscription revenue and technology<br> service revenue in the first two quarters of 2022; |
|---|---|
| ● | Subscription<br> revenue decreased 14% to $5.4 million; |
| --- | --- |
| ● | Advertising<br> revenue increased 8% to $0.2 million; |
| --- | --- |
| ● | Net<br> loss of $1.9 million compared to net income of $1.7 million; the second quarter of 2021 includes<br> a one-time charge of $0.5 million related to the forgiveness of the proceeds from the Small<br> Business Administration Payroll Protection Program loan the Company received in 2020; |
| --- | --- |
| ● | Adjusted<br> EBITDA loss of $1.4 million compared to Adjusted EBITDA income of $1.2 million; the decrease<br> in Adjusted EBITDA was primarily due to decreased revenue, increased marketing, product development<br> and general and administrative expenses; and |
| --- | --- |
| ● | Cash<br> balance at June 30, 2022 of $16.9 million. |
| --- | --- |
BusinessHighlights for the Second Quarter Ended June 30, 2022
| ● | Closed<br> an asset acquisition of ManyCam, a live streaming software<br> and virtual camera that allows users to deliver professional live videos on streaming platforms,<br> video conferencing app and distance learning tools; |
|---|---|
| ● | Released<br> ManyCam version 8.0, an update with vast improvements over prior versions; |
| --- | --- |
| ● | Engaged<br> Roth Capital Partners, LLC (“Roth Capital Partners”) to assist with strategic<br> initiative of mergers and acquisitions that focus on buy-side opportunities to accelerate<br> growth and profitability; |
| --- | --- |
| ● | Repurchased<br> 110,000 shares pursuant to the stock repurchase plan; and |
| --- | --- |
| ● | Launched a mobile backgammon game with interactive real-time<br>voice and video. |
| --- | --- |
PatentLitigation Update
On July 23, 2021, the Company filed a patent infringement lawsuit against WebEx Communications, Inc., Cisco WebEx LLC, and Cisco Systems, Inc. in the U.S. District Court for the Western District of Texas. The Company alleges that Cisco’s Webex products have infringed U.S. Patent No. 6,683,858, and that the Company is entitled to damages. A Markman hearing took place on February 24, 2022 and a trial is scheduled for February 2023.
ManagementCommentary
Jason Katz, Chairman and CEO of Paltalk, commented, “We have 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 $2.9 million, including $0.2 million of expenses, for the acquisition of the ManyCam assets. We plan to continue to invest in a measured way with responsible cash management.”
Katz, continued, “We look forward to working with Roth Capital Partners in exploring strategic opportunities as we build upon our recently closed acquisition of the ManyCam assets. 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 installs of the product and we believe, although early, this is a positive sign. We feel there are multiple ways to expand our communications software and multimedia social applications, which we believe have the potential to provide substantial value to Paltalk stockholders. Our Nasdaq listing status, strong cash position and current operating business strategy provide us a strong platform to execute our strategic plan to acquire additional complementary and synergistic businesses.”
Katz, concluded, “Although disappointed with the results, our goal is to get back to profitability. While a 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 has 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.”
FinancialResults for Three Months Ended June 30, 2022
| ● | Revenue<br> for the three months ended June 30, 2022 decreased by 23% to $2.6 million, compared to $3.4<br> million for the three months ended June 30, 2021. This decline was primarily attributable<br> to the decrease in subscription revenue of 18% or $0.6 million, related to the macro-economic<br> environment as well as a decrease in technology service revenue as a result of the termination<br> of our partnership with Open Props, Inc. (formerly “YouNow”) decrease. Advertising<br> revenue increased by over 11% to $0.1 million. |
|---|---|
| ● | Loss<br> from operations for the three months ended June 30, 2022, totaled $1.1 million, a decrease<br> in operating income of $1.7 million compared to operating income of $0.6 million for the<br> three months ended June 30, 2021. The decrease in operating income is primarily due to a<br> decrease in revenue of $0.8 million, coupled with increased marketing expenses of $0.2 million,<br> or 90%, in connection with our investment in marketing, increased product development expenses<br> of $0.2 million, or 17%, in connection with implementation of newly purchased software tools<br> for marketing, as well as increased general and administrative expenses of $0.6 million,<br> or 124%, in connection with non-cash stock compensation and increased professional fees. |
| --- | --- |
| ● | Net<br> loss for the three months ended June 30, 2022 totaled $1.1 million, a decrease of over $1.9<br> million compared to net income of $0.8 million for the three months ended June 30, 2021.<br> The resulting net loss per share of common stock for the three months ended June 30, 2022,<br> was $0.12, as compared to a net income per share of common stock of $0.12 for the three months<br> ended June 30, 2021. |
| --- | --- |
| ● | Adjusted<br> EBITDA for the three months ended June 30, 2022 decreased by $1.6 million to ($0.9) million,<br> compared to Adjusted EBITDA of $0.7 million for the three months ended June 30, 2021. |
| --- | --- |
2
FinancialResults for Six Months Ended June 30, 2022
| ● | Revenue<br> for the six months ended June 30, 2022 decreased by 18% to $5.6 million, compared to $6.8<br> million for the six months ended June 30, 2022. This decline was mainly driven by a decrease<br> in subscription revenue and technology service revenue. |
|---|---|
| ● | Loss<br> from operations for the six months ended June 30, 2022 increased by $2.8 million to $1.8<br> million, compared to net income of $1.0 million for the same period in 2021. The income from<br> operations for the six months ended June 30, 2021 included a non-cash impairment loss on<br> digital tokens of approximately $0.2 million. |
| --- | --- |
| ● | Net<br> loss for the six months ended June 30, 2022 increased by $3.6 million to $1.9 million, compared<br> to net income of $1.7 million for the six months ended June 30, 2021. |
| --- | --- |
| ● | Cash<br> and cash equivalents totaled $16.9 million at June 30, 2022, a decrease of over $4.7 million<br> compared to $21.6 million at December 31, 2021. |
| --- | --- |
| ● | Currently,<br> the Company has no long-term debt on its balance sheet. |
| --- | --- |
KeyFinancial and Operating Metrics from Operations (unaudited):
(in thousands, except for percentages)
| **** | Three Months Ended | **** | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| **** | June 30, | Change | **** | |||||||
| **** | 2022 | **** | 2021 | **** | % | **** | ||||
| Subscription<br> revenue | $ | 2,561 | $ | 3,122 | ) | -18 | % | |||
| Advertising<br> revenue | $ | 84 | $ | 75 | 11 | % | ||||
| Technology<br> service revenue | $ | -- | $ | 218 | ) | -100 | % | |||
| Total<br> revenues | $ | 2,645 | $ | 3,415 | ) | -23 | % | |||
| (Loss)<br> income from operations | $ | (1,084 | ) | $ | 577 | ) | -288 | % | ||
| Net<br> (loss) income | $ | (1,129 | ) | $ | 822 | ) | -237 | % | ||
| Net<br> cash (used in) provided by operating activities | $ | (411 | ) | $ | 516 | ) | -180 | % | ||
| Adjusted<br> EBITDA (a non-GAAP measure) | $ | (909 | ) | $ | 669 | ) | -236 | % |
All values are in US Dollars.
| **** | Six Months Ended | **** | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| **** | June 30, | Change | **** | |||||||
| **** | 2022 | **** | 2021 | **** | % | **** | ||||
| Subscription<br> revenue | $ | 5,407 | $ | 6,261 | ) | -14 | % | |||
| Advertising<br> revenue | $ | 164 | $ | 152 | 8 | % | ||||
| Technology<br> service revenue | $ | -- | $ | 374 | ) | -100 | % | |||
| Total<br> revenues | $ | 5,571 | $ | 6,787 | ) | -18 | % | |||
| (Loss)<br> income from operations | $ | (1,797 | ) | $ | 986 | ) | -282 | % | ||
| Net<br> (loss) income | $ | (1,868 | ) | $ | 1,738 | ) | -207 | % | ||
| Net<br> cash (used in) provided by operating activities | $ | (1,644 | ) | $ | 612 | ) | -369 | % | ||
| Adjusted<br> EBITDA (a non-GAAP measure) | $ | (1,393 | ) | $ | 1,204 | ) | -216 | % |
All values are in US Dollars.
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SecondQuarter 2022 Conference Call
The details for the conference call can be found below.
**Date:**Monday, August 8, 2022
**Time:**4:30 PM ET
| Dial-In Phone<br> Numbers: | Toll<br>Free: 877-545-0523<br><br>International: 973-528-0016 <br><br>Participant Access Code: 275986 |
|---|
**Link:**https://www.webcaster4.com/Webcast/Page/2856/45492
| Replay: | Toll<br> Free: 877-481-4010<br><br> International: 919-882-2331<br><br> Replay Passcode: 45492 |
|---|
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 ManyCam, Tinychat and Vumber. The Company has an over 20-year history of technology innovation and holds 14 patents. For more information, please visit: www.paltalk.com.
To be added to our news distribution list, please visit: http://www.paltalk.com/investor-alerts/.
FORWARD-LOOKINGSTATEMENTS:
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 anticipated impact of the ManyCam acquisition on our business and future financial and operating results; the Company’s ability to improve, market and promote the ManyCam software; the willingness of new and existing users to pay for the ManyCam software; our availability to consummate favorable acquisitions and integrate any companies or properties we acquire; 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.
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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.
InvestorContacts:
IR@paltalk.com
Brian Loper
ClearThink
bloper@clearthink.capital
347-413-4234
PALTALK,INC.
RECONCILIATIONOF GAAP TO NON-GAAP RESULTS
(Unaudited)
| Three<br> Months Ended | Six<br> Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June<br> 30, | June<br> 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Reconciliation<br> of net (loss) income to Adjusted EBITDA: | ||||||||||||
| Net<br> (loss) income | $ | (1,128,706 | ) | $ | 821,684 | $ | (1,867,651 | ) | $ | 1,738,413 | ||
| Interest<br> expense (income), net | 1,595 | 420 | 3,457 | (2,047 | ) | |||||||
| Other<br> expense, net | 38,772 | - | 46,658 | - | ||||||||
| Gain<br> on extinguishment of term debt | - | - | - | (506,500 | ) | |||||||
| Provision<br> for income taxes | 4,753 | 2,200 | 20,784 | 3,300 | ||||||||
| Realized<br> loss from sale of digital tokens | - | (247,293 | ) | - | (247,293 | ) | ||||||
| Impairment<br> loss on digital tokens | 7,262 | 184,737 | 7,262 | 184,737 | ||||||||
| Depreciation<br> and amortization expense | 108,176 | 99,243 | 184,440 | 194,189 | ||||||||
| Stock-based<br> compensation expense | 59,149 | (192,342 | ) | 211,620 | (160,974 | ) | ||||||
| Adjusted<br> EBITDA | $ | (908,999 | ) | $ | 668,649 | $ | (1,393,430 | ) | $ | 1,203,825 |
Non-GAAPFinancial Measures
The Company has provided in this release certain non-GAAP financial measures, including Adjusted EBITDA, 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 interest expense (income), net, provision for income taxes, gain on extinguishment of term debt, depreciation and amortization expense, other expense, net, stock-based compensation expense, gain on the termination of an lease, realized loss from sale of digital tokens and impairment loss on digital tokens.
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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; interest income (expense), net; other income, net; 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.
PALTALK,INC.
CONDENSEDCONSOLIDATED BALANCE SHEETS
| December 31, | |||||
|---|---|---|---|---|---|
| 2021 | |||||
| Assets | |||||
| Current<br> assets: | |||||
| Cash<br> and cash equivalents | 16,850,818 | $ | 21,636,860 | ||
| Accounts<br> receivable, net of allowances of 3,648 as of June 30, 2022 and December 31, 2021 | 106,791 | 153,448 | |||
| Prepaid<br> expense and other current assets | 359,944 | 239,258 | |||
| Total<br> current assets | 17,317,553 | 22,029,566 | |||
| Operating<br> lease right-of-use asset | 199,567 | 239,491 | |||
| Property<br> and equipment, net | 17,681 | 69,599 | |||
| Goodwill | 6,326,250 | 6,326,250 | |||
| Intangible<br> assets, net | 3,799,442 | 196,543 | |||
| Digital<br> tokens | - | 7,262 | |||
| Other<br> assets | 13,937 | 13,937 | |||
| Total<br> assets | 27,674,430 | $ | 28,882,648 | ||
| Liabilities<br> and stockholders’ equity | |||||
| Current<br> liabilities: | |||||
| Accounts<br> payable | 1,464,732 | $ | 1,332,632 | ||
| Accrued<br> expenses and other current liabilities | 182,409 | 344,441 | |||
| Operating<br> lease liabilities, current portion | 81,237 | 80,309 | |||
| Deferred<br> subscription revenue | 1,839,849 | 1,915,493 | |||
| Total<br> current liabilities | 3,568,227 | 3,672,875 | |||
| Operating<br> lease liabilities, non-current portion | 118,330 | 159,182 | |||
| Deferred<br> tax liability | 806,493 | - | |||
| Total<br> liabilities | 4,493,050 | 3,832,057 | |||
| Commitments<br> and contingencies | |||||
| Stockholders’<br> equity: | |||||
| Common<br> stock, 0.001 par value, 25,000,000 shares authorized, 9,864,120 shares issued as of June 30, 2022 and December 31, 2021<br> and 9,722,157 and 9,832,157 shares outstanding as of June 30, 2022 and December 31, 2021, respectively | 9,864 | 9,864 | |||
| Treasury<br> stock, 141,963 and 31,963 shares as of June 30, 2022 and December 31, 2021, respectively | (407,380 | ) | (194,200 | ) | |
| Additional<br> paid-in capital | 35,851,530 | 35,639,910 | |||
| Accumulated<br> deficit | (12,272,634 | ) | (10,404,983 | ) | |
| Total<br> stockholders’ equity | 23,181,380 | 25,050,591 | |||
| Total<br> liabilities and stockholders’ equity | 27,674,430 | $ | 28,882,648 |
All values are in US Dollars.
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PALTALK,INC.
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three<br> Months Ended<br> June 30, | Six<br> Months Ended<br> June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Revenues: | ||||||||||||
| Subscription<br> revenue | $ | 2,560,706 | $ | 3,121,909 | $ | 5,407,045 | $ | 6,261,274 | ||||
| Advertising<br> revenue | 83,762 | 75,462 | 164,124 | 152,283 | ||||||||
| Technology<br> service revenue | - | 218,432 | - | 374,248 | ||||||||
| Total<br> revenues | 2,644,468 | 3,415,803 | 5,571,169 | 6,787,805 | ||||||||
| Costs<br> and expenses: | ||||||||||||
| Cost<br> of revenue | 661,548 | 630,582 | 1,313,644 | 1,277,297 | ||||||||
| Sales<br> and marketing expense | 484,133 | 255,204 | 895,615 | 512,655 | ||||||||
| Product<br> development expense | 1,521,764 | 1,298,767 | 3,051,905 | 2,596,031 | ||||||||
| General<br> and administrative expense | 1,053,347 | 469,502 | 2,099,495 | 1,231,212 | ||||||||
| Impairment<br> loss on digital tokens | 7,262 | 184,737 | 7,262 | 184,737 | ||||||||
| Total<br> costs and expenses | 3,728,054 | 2,838,792 | 7,367,921 | 5,801,932 | ||||||||
| (Loss)<br> income from operations | (1,083,586 | ) | 577,011 | (1,796,752 | ) | 985,873 | ||||||
| Interest<br> (expense) income, net | (1,595 | ) | (420 | ) | (3,457 | ) | 2,047 | |||||
| Gain<br> on extinguishment of term debt | - | - | - | 506,500 | ||||||||
| Realized<br> gain from the sale of digital tokens | - | 247,293 | - | 247,293 | ||||||||
| Other<br> expense, net | (38,772 | ) | - | (46,658 | ) | - | ||||||
| (Loss)<br> income from operations before provision for income taxes | (1,123,953 | ) | 823,884 | (1,846,867 | ) | 1,741,713 | ||||||
| Provision<br> for income taxes | (4,753 | ) | (2,200 | ) | (20,784 | ) | (3,300 | ) | ||||
| Net<br> (loss) income | $ | (1,128,706 | ) | $ | 821,684 | $ | (1,867,651 | ) | $ | 1,738,413 | ||
| Net<br> (loss) income per share of common stock: | ||||||||||||
| Basic | $ | (0.12 | ) | $ | 0.12 | $ | (0.19 | ) | $ | 0.25 | ||
| Diluted | $ | (0.12 | ) | $ | 0.12 | $ | (0.19 | ) | $ | 0.25 | ||
| Weighted<br> average number of shares of common stock used in calculating net (loss) income per share of common stock: | ||||||||||||
| Basic | 9,771,608 | 6,906,454 | 9,801,715 | 6,906,454 | ||||||||
| Diluted | 9,771,608 | 6,930,041 | 9,801,715 | 6,918,248 |
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PALTALK,INC.
CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six<br> Months Ended<br> June 30, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| Cash<br> flows from operating activities: | ||||||
| Net<br> (loss) income | $ | (1,867,651 | ) | $ | 1,738,413 | |
| Adjustments<br> to reconcile net (loss) income from operations to net cash (used in) provided by operating activities: | ||||||
| Depreciation<br> of property and equipment | 51,918 | 101,856 | ||||
| Amortization<br> of intangible assets | 132,522 | 92,333 | ||||
| Amortization<br> of operating lease right-of-use assets | 39,924 | 34,021 | ||||
| Impairment<br> loss on digital tokens | 7,262 | 184,737 | ||||
| Realized<br> gain from the sale of digital tokens | - | (247,293 | ) | |||
| Gain<br> on extinguishment of term debt | - | (506,500 | ) | |||
| Stock-based<br> compensation | 211,620 | (160,974 | ) | |||
| Bad<br> debt expense | - | (3,235 | ) | |||
| Changes<br> in operating assets and liabilities: | ||||||
| Digital<br> tokens | - | (733,835 | ) | |||
| Accounts<br> receivable | 46,657 | 22,384 | ||||
| Digital<br> tokens receivable | - | 210,000 | ||||
| Operating<br> lease liability | (39,924 | ) | (34,021 | ) | ||
| Digital<br> tokens payable | - | 149,587 | ||||
| Deferred<br> offering costs | - | (212,420 | ) | |||
| Prepaid<br> expense and other current assets | (120,686 | ) | 28,620 | |||
| Accounts<br> payable, accrued expenses and other current liabilities | (29,932 | ) | (4,327 | ) | ||
| Deferred<br> subscription revenue | (75,644 | ) | (47,358 | ) | ||
| Net<br> cash (used in) provided by operating activities | (1,643,934 | ) | 611,988 | |||
| Cash<br> flows from investing activities: | ||||||
| Acquisition<br> of ManyCam assets | (2,700,000 | ) | - | |||
| Acquisition<br> related costs of ManyCam assets | (228,928 | ) | - | |||
| Proceeds<br> from the sale of digital tokens | - | 304,304 | ||||
| Net<br> cash (used in) provided by investing activities | (2,928,928 | ) | 304,304 | |||
| Cash<br> flows from financing activities: | ||||||
| Purchase<br> of treasury stock | (213,180 | ) | - | |||
| Net<br> cash used in financing activities | (213,180 | ) | - | |||
| Net<br> (decrease) increase in cash and cash equivalents | (4,786,042 | ) | 916,292 | |||
| Balance<br> of cash and cash equivalents at beginning of period | 21,636,860 | 5,585,420 | ||||
| Balance<br> of cash and cash equivalents at end of period | $ | 16,850,818 | $ | 6,501,712 | ||
| Supplemental<br> disclosure of cash flow information: | ||||||
| Cash<br> paid during the periods: | ||||||
| Interest | $ | - | $ | - | ||
| Taxes | $ | - | $ | - | ||
| Non-cash<br> investing and financing activities: | ||||||
| Write-off<br> of property and equipment | $ | 1,475,649 | $ | - | ||
| Deferred<br> tax liability associated with the acquisition of ManyCam assets | $ | 806,493 | $ | - |
8