JERICHO, N.Y., Aug. 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.

FINANCIAL AND BUSINESS HIGHLIGHTS:

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

LIQUIDITY AND CAPITAL RESOURCES:

  • Achieved positive cash flow from operations of $0.6 million for the six months ended June 30, 2021, an improvement of $189 thousand compared to the six months ended June 30, 2020;

  • Cash and cash equivalents totaled $6.5 million at June 30, 2021, an increase of $0.9 million compared to December 31, 2020; and

  • Currently, the Company has no long-term debt on its balance sheet.

SUBSEQUENT EVENTS:

  • Completed an uplist of our common stock to The Nasdaq Capital Market on August 3, 2021, under the Company’s current ticker symbol “PALT”; and
     
  • Raised net proceeds of approximately $3.5 million in connection with our 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.

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.”

Key Financial and Operating Metrics from Operations (unaudited):
(in thousands, except for percentages)

     Change
 Q2 2021 Q2 2020 $%
Subscription revenue$3,122 $3,211 $(89)(2.8)%
Advertising revenue75 58 17 29.3%
Technology service revenue218 112 106 94.6%
Total revenues$3,415 $3,381 $34 1.0%
Income from operations$577 $531 $46 8.7%
Net income$822 $532 $290 54.5%
Net cash provided by operating activities$516 $406 $110 27.1%
Adjusted EBITDA (a non-GAAP measure)$669 $594 $75 12.6%


     Change
 YTD 2021 YTD 2020 $%
Subscription revenue$6,261 $5,861 $4006.8%
Advertising revenue152 114 3833.3%
Technology service revenue374 127 247194.5%
Total revenues$6,787 $6,102 $68511.2%
Income from operations$986 $167 $819490.4%
Net income$1,738 $93 $1,6451,768.8%
Net cash provided by operating activities$612 $423 $18944.7%
Adjusted EBITDA (a non-GAAP measure)$1,204 $472 $732155.1%

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 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/.

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


 
PALTALK, INC.
RECONCILIATION OF 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-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 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 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;
  • Adjusted EBITDA does not reflect our working capital requirements;
  • Adjusted EBITDA does not consider the potentially dilutive impact of stock-based compensation;
  • Adjusted EBITDA does not reflect the realized gain (loss) from sale of digital tokens;
  • Adjusted EBITDA does not reflect the impairment loss on digital tokens;
  • Adjusted EBITDA does not reflect the gain on the extinguishment of term debt, gain on office lease termination and the provision for income taxes; and
  • 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
       
  June 30,  December 31, 
  2021  2020 
  (unaudited)    
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 
         


 
PALTALK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
  Three Months Ended
June 30,		  Six Months Ended
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 
                 


 
PALTALK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
  Six Months Ended
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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Source: Paltalk, Inc.

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