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Snap Interactive Reports Positive Net Income and Operating Cash Flow on Lower Revenue for the Quarter Ended September 30, 2015

NEW YORK, NY — (Marketwired) — 11/10/15 — Snap Interactive, Inc. (“SNAP,” the “Company,” “we,” “our” or “us”) (OTCQB: STVI), a leading online dating provider, today announced financial and operational results for the quarter ended September 30, 2015.

Highlights:

Income from operations for the three months ended September 30, 2015 totaled approximately $102.7 thousand, reflecting an improvement of $285.4 thousand compared to a loss of $182.7 thousand for the same period in 2014;

Net income for the three months ended September 30, 2015 totaled approximately $0.5 million, the highest net income ever recorded by the Company, reflecting an improvement of $0.7 million compared to a net loss of $0.2 million for the same period in 2014;

Total revenues decreased 16.0% and subscription revenue decreased 13.8% for the third quarter of 2015 relative to the comparable period in 2014;

Adjusted EBITDA for the three months ended September 30, 2015 increased to approximately $382 thousand, representing an improvement of approximately $227 thousand compared to the same period last year, and approximately $309 thousand compared to the prior quarter;

Cash and cash equivalents totaled approximately $2.2 million as of September 30, 2015, representing an increase of approximately $1.0 million from December 31, 2014, and an increase of $0.2 million from the quarter ended June 30, 2015; and

The Grade, the Company–s new mobile dating application, reached a cumulative usage threshold of more than 30 million swipes.

Growth and New Initiatives

In the third quarter of 2015, SNAP accomplished several important milestones to support its long-term growth and strategic direction, including:

Appointment of CEO – On October 13, 2015, as part of the Company–s focus to realign its management team, a management transition was completed in which Alex Harrington was promoted to CEO;

New Strategic Direction – SNAP commenced a strategic review process to identify ways to unlock shareholder value, and, as a result, developed a new company strategy centered around the proactive commercialization of our 30 million user database via a portfolio of products; and

The Grade User Activity – As of September 30, 2015, usage of The Grade mobile application exceeded 30 million swipes.

“During the third quarter, we took a number of steps at the corporate and product level that we believe lay the groundwork for us to realign the Company to deliver growth and value to our shareholders,” said SNAP–s CEO, Alex Harrington. “At the corporate level, we initiated an intensive strategic review to examine opportunities to accelerate organic growth and to shift our management team and corporate governance to support those opportunities. As part of that process, effective October 13, 2015, I became CEO and Clifford Lerner was appointed to the newly-created position of President of The Grade, our popular app that focuses on providing a high quality, female-friendly dating experience. This management change capitalizes on each of our strengths: Cliff–s proven track record of developing and growing early-stage digital properties, and my experience in entrepreneurial management in interactive and mobile businesses. Looking ahead, we intend to continue to make additions to our management team and board of directors consisting of individuals who can provide us with the strategic and operational guidance to succeed.”

Another important outcome of the strategic review was a newly developed multi-year growth and turnaround strategy for SNAP. Mr. Harrington continued, “We have a tremendous asset in our 30 million user database. This asset has been underutilized at SNAP, and we believe it represents a big opportunity for growth. A portfolio strategy, through which we cross-sell multiple brands and applications to the user database, is a proven industry approach. We have already begun working towards a relaunched version of AYI, and are exploring new product opportunities to seize this opportunity. We expect to see an impact from these growth initiatives in the first half of 2016.”

“In the short-term, we have been reserving cash and diverting resources to long-term portfolio growth opportunities, and this has resulted in a reduced marketing investment in AYI. Though we believe AYI can continue to grow, we believe increasing investment following the anticipated relaunch of AYI in the first quarter of 2016, when we anticipate our cost per new user acquisition will be lower, will result in a more efficient use of Company resources. We believe that the number of active subscribers is directly correlated to our spending on advertising and marketing. We believe that as a result of the diminished investment in advertising and marketing expense in the quarter ended September 30, 2015, which is down 23.0% compared to the prior year and 26.0% compared to the second quarter of 2015, the count of active subscribers and revenue decreased. We expect the lower advertising and marketing investment to continue into the fourth quarter, and the revenue weakness to continue for the next two quarters, at which point we anticipate the revenue from new initiatives will offset the lower investment in AYI.”

In the quarter ended September 30, 2015, the Company continued its tight control of costs, and succeeded in producing its highest operating income since the third quarter of 2010 and achieving its highest net income in its history of operations. During the third quarter of 2015, the Company reduced overall costs by 23.0% compared to the third quarter of 2014 and 17.6% compared to the prior quarter, principally through reductions in advertising and marketing expenses, headcount related expenses, and the capitalization of the equipment leased. The Company produced Adjusted EBITDA of $382 thousand in the quarter ended September 30, 2015, an increase of $227 thousand over the comparable period in 2014 and an increase of $309 thousand compared to the prior quarter.

Mr. Harrington continued, “At the product level, The Grade hit a new milestone in cumulative swipes, exceeding a threshold of 30 million by September 30, 2015. The Grade is also continuing to receive recognition from top-tier media outlets, including, in October, a front-page feature in The Wall Street Journal and a Men–s Fitness piece on prominent competitors to Tinder. We continue to innovate to improve the user experience, as the first dating app to unveil a “Peer Review” grade to incorporate feedback on user-to-user interactions outside the app, such as an in-person date or a text message. We–ve also created an advisory board that will help improve the product and gain additional visibility. As announced on October 22, 2015, our first appointment to the advisory board was Lauren Urasek, who was named the most sought-after woman in New York City by New York magazine due to her popularity on dating sites.”

Liquidity and Cash Flow

Cash Balance: We ended the third quarter of 2015 with approximately $2.2 million of cash and cash equivalents on our balance sheet; and

Cash Provided by (Used) in Operating Activities: We generated approximately $0.3 million in cash from operations during the third quarter of 2015, as opposed to consuming approximately $0.4 million in the second quarter of 2015.

Mr. Harrington concluded, “During the quarter, we continued to manage down expenses in order to accumulate cash. We were pleased to generate approximately $0.3 million of cash flow from operations in the quarter ended September 30, 2015, and increase cash by approximately $0.2 million overall compared to the balance on June 30, 2015. We anticipate having sufficient resources to launch our growth initiatives in the near future.”

Snap Interactive, Inc. develops, owns and operates dating applications for social networking websites and mobile platforms. The Grade is a patent-pending mobile dating application catering to high-quality singles. SNAP–s flagship brand, AYI.com, is a multi-platform online dating site with a large user database of approximately 30 million users.

For more information, please visit .

The contents of our websites are not part of this press release, and you should not consider the contents of these websites in making an investment decision with respect to our common stock.

Facebook is a registered trademark of Facebook Inc. Apple and iPhone are registered trademarks of Apple Inc. and App Store is a registered service mark of Apple Inc. Android is a registered trademark of Google Inc. The Grade is a trademark and AYI.com is a registered trademark of Snap Interactive, Inc.

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, risks and uncertainties associated with general economic, industry and market sector conditions; the Company–s ability to institute corporate governance standards or achieve compliance with national exchange listing requirements; the Company–s future growth and the ability to obtain additional financing to implement the Company–s growth strategy; the ability to increase or recognize revenue, decrease expenses and increase the number of active subscribers, new subscription transactions or monthly active users; the ability to enter into new advertising agreements; the ability to diversify new user acquisition channels or improve the conversion of users to paid subscribers; the ability to anticipate and respond to changing user and industry trends and preferences; the intense competition in the online dating marketplace; the ability to release new applications or derive revenue from new applications; and circumstances that could disrupt the functioning of the Company–s applications. 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 web site at .

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.

The Company defines Adjusted EBITDA as earnings before interest, taxes depreciation and amortization, plus non-cash stock-based compensation and the change in fair value of derivative liabilities. The Company has provided in this release certain non-GAAP financial information including bookings and Adjusted EBITDA to supplement the condensed consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Management uses these non-GAAP financial measures 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 non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. The Company believes these non-GAAP financial measures 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.
Some limitations of bookings and Adjusted EBITDA as financial measures include that:

Bookings does not reflect that we recognize subscription revenue from subscription fees over the length of the subscription term and subscription revenue from micro-transactions over a two-month period;

Adjusted EBITDA does not (i) reflect cash capital expenditure requirements for assets underlying depreciation and amortization expense that may need to be replaced or for new capital expenditures; (ii) the Company–s working capital requirements; (iii) consider the potentially dilutive impact of stock-based compensation; (iv) reflect interest expense or interest payments on our outstanding indebtedness; and (v) reflect the change in fair value of warrants; and

Other companies, including companies in our industry, may calculate bookings or Adjusted EBITDA differently or choose not to calculate bookings or Adjusted EBITDA at all, which reduces their usefulness as comparative measures.

Because of these limitations, you should consider this non-GAAP financial information 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.

Todd Fromer/Brad Nelson
KCSA Strategic Communications

212-896-1215/212-896-1217

Adam Handelsman

212-518-7721

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