Good afternoon, and welcome to the Paltalk Third Quarter 2022 Earnings Call. At this time all participants have been placed on a listen-only mode. It is now my pleasure to turn the floor over to your host, Jason Katz, Chief Executive Officer of Paltalk; and Kara Jenny, Chief Financial Officer of Paltalk. Kara, the floor is yours.

Hello, everyone, and welcome to the Paltalk third quarter 2022 operating and financial results conference call. By now, everyone should have access to the earnings results press release, which was issued earlier today after the market close at 4:00 p.m. Eastern Time. This call is being webcast and will be available for replay. In our remarks today, we will include statements that are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements about future results of operations, business strategies and plans, our relationships with our customers as well as market and potential growth opportunities. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current knowledge and expectations as of today and are subject to certain risks, uncertainties and assumptions related to factors that may cause actual results to differ materially from those anticipated in the forward-looking statements. We offer no assurance that these expectations and beliefs will prove to be correct. A detailed discussion of such risks and uncertainties are contained in our filings with the SEC included in our most recent annual report on Form 10-K for the year ended December 31, 2021. You should refer to and consider these factors when relying on such forward-looking information. The company does not undertake and expressly disclaims any obligation to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. On this call, we will refer to certain non-GAAP measures, including adjusted EBITDA, that when used in combination with GAAP results, provides us and our investors with additional analytical tools to understand our operation. For each non-GAAP measure, we have provided a reconciliation to the most directly comparable GAAP financial measure in our earnings press release, which will be posted on the Investor Relations section of our website at paltalk.com. And with that, I would like to introduce Paltalk's Chief Executive Officer, Jason Katz.

Thank you, Kara, and good afternoon, everyone. We greatly appreciate you taking the time to join us on today's call. We will discuss our operating highlights and financial results for the third quarter ended September 30, 2022. Additionally, we will provide an update on our business strategy, including initiatives to reinvigorate growth in subscribers, advertising and revenue and highlight our first few months of owning and operating the ManyCam software and our initiatives with our investment banking firm for strategic accretive acquisitions. After my opening statement, our CFO, Kara Jenny, will give a summary of our financial results for the third quarter ended September 30, 2022. Following our prepared remarks, we will move into the Q&A portion and answer any questions that were pre-submitted prior to this call. With that, I would now like to walk you through the recent highlights. While our revenue continues to be impacted by the macroeconomic environment, we are pleased with the early traction and results of ManyCam and its ongoing integration with our portfolio of products, Paltalk, Camfrog and Tinychat. ManyCam is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps, distance learning tools which greatly complements our large collection of video-based communities. During the past three months, we signed up corporate customers for ManyCam subscriptions, advancing the business-to-business channel. As ManyCam is sold primarily pursuant to annual subscriptions, its revenue is accounted for in a manner consistent with our other subscription models. And accordingly, we expect the cash received upfront to initially outpace the subscription revenue recognized. We anticipate that subscription revenue related to ManyCam will increase in future quarters as the deferred revenue generated from ManyCam subscriptions is recognized. We have several near-term objectives that we believe, when achieved, will…

Thank you, Jason. Our results of operations for the three months ended September 30, 2022, were as follows. Revenue for the three months ended September 30, 2022, decreased by $0.8 million, or 22%, to $2.6 million compared to $3.4 million for the three months ended September 30, 2021. This decline was primarily attributable to the decrease in subscription revenue of 19%, or $0.6 million, related to the macroeconomic environment as well as the decrease in technology service revenue as a result of the termination of our partnership with Open Props, Inc., formerly known as YouNow. Loss from operations for the three months ended September 30, 2022, totaled $1.1 million, an increase of $0.6 million, or 132%, compared to operating loss of $0.5 million for the three months ended September 30, 2021. The increase in operating loss is primarily due to a decrease in revenue of $0.8 million, coupled with increased product development expenses of $0.2 million or 11% in connection with implementation of newly purchased software tools for marketing as well as increased general and administrative expenses of $0.2 million or 22% in connection with non-cash amortization related to the ManyCam asset acquisition. Net loss for the three months ended September 30, 2022, totaled $1.1 million, an increase of $0.6 million, or 157%, compared to net loss of $0.4 million for the three months ended September 30, 2021. The resulting net loss per share of common stock for the three months ended September 30, 2022, was $0.11 per share as compared to a net loss per share of common stock of $0.05 for the three months ended September 30, 2021. Adjusted EBITDA for the three months ended September 30, 2022, totaled negative $0.8 million compared to adjusted EBITDA of $0.3 million for the three months ended September 30, 2021. Cash and cash equivalents totaled $15.5 million at September 30, 2022, a decrease of $6.1 million compared to the $21.6 million at December 31, 2021. Of note, $2.9 million of cash was used for the acquisition of the ManyCam asset and $0.6 million was utilized in repurchasing common stock pursuant to the stock repurchase plan. Currently, the company has no long-term debt on its balance sheet. We will now move on to questions that were previously submitted.

The first question. Are you still working with third-party companies in trying to market to new potential users and subscribers?

In response to the economic downturn and reduced sales, we reduced our overall marketing spending. However, we still continue to work strategically with partners wherever possible.

The next question. In mid-August, you previously reported that you had over 300,000 new installs of ManyCam since June. Has that pace or growth continued?

That pace is consistent with what we are seeing since. And although still early, we are encouraged.

Final question that we got, what percentage of ManyCam installs are from existing Paltalk customers?

Well, most of the installs are currently not Paltalk users. So we believe that bodes well once we are able to really effectively cross-market the products fully.

Great. Jason, I'll turn it back to you to close out the presentation.

Thanks, everyone, for your support and for joining us today. We are very grateful for your interest in our business. We look forward to updating the market and our stockholders with our progress on our organic growth initiatives and potential strategic accretive acquisitions, which we continue to identify and analyze. Have a good day.

Thank you, ladies and gentlemen. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.