What changed in this filing

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Item 1A. Risk Factors

2022-03-23 compared with 2021-03-23 · 887 added, 972 removed, 136 unchanged (93% of the section changed)

is a summary of our risk factors with a more detailed discussion following.

The risks below are those that we believe are the

material risks that we currently face, but are not the only risks facing us and our business.

If any of these risks actually occur,

our business, financial condition and results of operations could be materially adversely affected.

The risks below are those that we believe are the material

risks that we currently face, but are not the only risks facing us and our business.

If any of these risks actually occur, our business,

financial condition and results of operations could be materially adversely affected.

success of our consumer applications is principally dependent on our active users and our

engagement with our user base.

operate in an intensely competitive industry and any failure to attract new users could diminish

or suspend our development and possibly cease our operations.

online live video industry is characterized by rapid technological change and the development

of enhancements and new applications, and if we fail to keep pace with technological developments

or launch new applications, our business may be adversely affected.

may make or attempt to make acquisitions in the future, which could require significant management

attention, disrupt our business, dilute our stockholders and seriously harm our business.

COVID-19 pandemic may adversely affect our revenues, results of operations and financial

success of our consumer applications is principally dependent on our active subscribers

and our engagement with our user base.

operate in an intensely competitive industry and any failure to attract new users could

diminish or suspend our development and possibly cease our operations.

mobile applications are substantially dependent on interaction with mobile platforms

and operating systems that we do not control.

COVID-19 pandemic likely contributed to an increase in our subscription revenue in certain

geographic areas for the fiscal year ended December 31, 2021 as compared to the fiscal year

ended December 31, 2020.

However, we may not be able to sustain our subscription revenue

growth rate in such geographic areas or any other areas in the future.

mobile applications are substantially dependent on interaction with mobile platforms and

operating systems that we do not control.

business depends on developing, establishing and maintaining strong brands.

unable to maintain and enhance our brands, we may be unable to expand or retain our user

If we are unable

to maintain and enhance our brands, we may be unable to expand or retain our active user

and paying subscriber bases.

may conduct a portion of our operations through informal relationships, partnerships,

strategic alliances or joint ventures, and our failure to continue such relationships

or resolve any material disagreements with these third parties could have a material

adverse effect on the success of these operations, our financial condition and our results

of operations.

our goodwill or other intangible assets become impaired, we may be required to record

a significant charge to earnings, which could seriously harm our operating results.

the distribution of our products through application stores increases, we may incur additional

fees from the developers of application stores.

future success is dependent, in part, on the performance and continued service of our

executive officers.

Without their continued service, we may be forced to interrupt or

eventually cease our operations.

subscription metrics and other estimates are subject to inherent challenges in measurement,

and real or perceived inaccuracies in those metrics may seriously harm and negatively

affect our reputation and our business.

we recognize revenue from subscriptions over the term of the subscription, the full impact

of downturns or upturns in subscription sales may not be immediately reflected in our

results of operations or financial condition.

online live video industry is characterized by rapid technological change and the development

of enhancements and new applications, and if we fail to keep pace with technological

developments or launch new applications, our business may be adversely affected.

future success is dependent, in part, on the performance and continued service of our executive

Without their continued service, we may be forced to interrupt or eventually cease

our operations.

plan to continue expanding our operations internationally and may be subject to increased

business and economic risks that could seriously harm our business.

portion of our revenue is dependent on third-party resellers, the efforts of which we

do not control.

governments restricting access to our applications could materially adversely impact

our business.

there are a limited number of regulated trading markets for cryptocurrency tokens, and therefore

our ability to sell such tokens, if any, may be limited.

tokens and other cryptocurrencies that we may hold may be subject to loss, theft or restriction

governments restricting access to our applications could materially adversely impact our

our goodwill or other intangible assets become impaired, we may be required to record a significant

charge to earnings, which could seriously harm our operating results.

mobile applications rely on high-bandwidth data capabilities, which are subject to hardware,

networks, regulations and standards that we do not control.

breaches, computer viruses and cybersecurity incidents could harm our business, results of

operations or financial condition.

have faced, and we expect that we will continue to face, chargeback liability when our credit

card providers resolve chargebacks in favor of their customers.

We cannot accurately anticipate

the extent of these liabilities, and if not properly addressed, these liabilities could increase

our operating expenses or preclude us from accepting certain credit cards as a method of

payment, either of which would materially adversely affect our results of operations and

financial condition.

face certain risks related to the physical and emotional safety of users and third parties.

subscription metrics and other estimates are subject to inherent challenges in measurement,

and real or perceived inaccuracies in those metrics may seriously harm and negatively affect

our reputation and our business.

we recognize revenue from subscriptions over the term of the subscription, the full impact

of downturns or upturns in subscription sales may not be immediately reflected in our results

of operations or financial condition.

portion of our revenue is dependent on third-party resellers, the efforts of which we do

business depends in large part upon the availability of cost-effective advertising space

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● Interruption,

maintenance or failure of our programming code, servers or technological infrastructure

could hurt our ability to effectively provide our applications, which could damage our

reputation and harm our results of operations.

breaches, computer viruses and computer hacking attacks could harm our business, results

of operations or financial condition.

We have faced, and

we expect that we will continue to face, chargeback liability when our credit card providers resolve chargebacks in favor

of their customers.

We cannot accurately anticipate the extent of these liabilities, and if not properly addressed, these

liabilities could increase our operating expenses or preclude us from accepting certain credit cards as a method of payment,

either of which would materially adversely affect our results of operations and financial condition.

We may make or attempt

to make acquisitions in the future, which could require significant management attention, disrupt our business, dilute our

stockholders and seriously harm our business.

We face certain risks related to the physical

and emotional safety of users and third parties.

We may need additional

capital to execute our business plan.

If we do not obtain additional financing, it could have a material adverse effect on

our business, results of operations or financial condition.

We are subject to risks related to holding and

distributing cryptocurrencies.

Currently, there

are no regulated trading markets for cryptocurrency tokens, and therefore our ability to sell such tokens may be limited.

Our tokens and other

cryptocurrencies that we hold may be subject to loss, theft or restriction on access.

Because there has

been limited precedent set for financial accounting of cryptocurrencies and other digital assets, the determination that we

have made for how to account for our tokens and any other digital assets we may acquire may be subject to change.

We may be liable as a result of information

retrieved from or transmitted over the internet.

If there are changes

in laws or regulations regarding privacy and the protection of user data, or if we fail to comply with such laws or regulations,

we may face claims brought against us by regulators or users that could adversely affect our business, results of operations

or financial condition.

maintenance or failure of our programming code, servers or technological infrastructure could

hurt our ability to effectively provide our applications, which could damage our reputation

and harm our results of operations.

there has been limited precedent set for financial accounting of cryptocurrencies and other

digital assets, the determination that we have made for how to account for our tokens and

any other digital assets we may acquire may be subject to change.

may be liable as a result of information retrieved from or transmitted over the internet.

in laws or regulations, including laws and regulations that impact the use of the internet,

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financial condition.

We may not be effective in protecting our internet

domain names.

If we are unable

to protect our intellectual property rights, we may be unable to compete with competitors developing similar technologies.

If we are subject

to intellectual property infringement claims, it could cause us to incur significant expenses, pay substantial damages or

royalties and prevent us from offering our applications.

results of operations are volatile and difficult to predict, and our stock price may

decline if we fail to meet the expectations of stockholders.

common stock is usually thinly traded, stockholders may be unable to sell at or near ask prices

or at all and the price of our common stock may be volatile.

we are subject to intellectual property infringement claims, it could cause us to incur significant

expenses, pay substantial damages or royalties and prevent us from offering our applications.

we are unable to protect our intellectual property rights, we may be unable to compete with

competitors developing similar technologies.

we fail to maintain an effective system of internal controls over financial reporting, we

may not be able to accurately report our financial results or prevent fraud and our business

may be harmed and our stock price may be adversely impacted.

common stock is historically thinly traded, stockholders may be unable to sell at or near

ask prices or at all and the price of our common stock may be volatile.

ownership of our common stock is significantly concentrated in a small number of investors,

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or potential conflicts of interest.

issuance of shares upon the exercise of stock options and unvested shares of restricted

common stock may cause immediate and substantial dilution to our existing stockholders.

Certificate of Incorporation designates the Court of Chancery of the State of Delaware

as the sole and exclusive forum for certain types of actions and proceedings that may

be initiated by our stockholders, which could limit our stockholders’

obtain a favorable judicial forum for disputes with us or our directors, officers, employees,

or stockholders.

we fail to remain current on our reporting requirements, we could be removed from the

OTCQB, which would limit the ability of broker-dealers to sell our common stock and the

ability of stockholders to sell their common stock in the secondary market.

we have no current plans to pay cash dividends on our common stock

for the foreseeable future, a stockholder might not receive any return on investment unless the stockholder sold its shares of

common stock for a price greater than that for which the shares were purchased.

relations activities, nominal “float”

and supply and demand factors may affect

the price of our common stock.

we fail to maintain an effective system of internal controls over financial reporting,

we may not be able to accurately report our financial results or prevent fraud and our

business may be harmed and our stock price may be adversely impacted.

Related to Our Business

COVID-19 pandemic may adversely affect our revenues, results of operations and financial condition.

December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China, and has reached

multiple other countries, including the United States, resulting in government-imposed quarantines, travel restrictions and other

public health safety measures in the United States and other affected countries.

The various precautionary measures taken by many

governmental authorities around the world in order to limit the spread of COVID-19 have had, and could continue to have, an adverse

effect on the global markets and its economy, including on the availability and pricing of employees and resources, and other

aspects of the global economy.

Therefore, the impact of the COVID-19 pandemic could disrupt and cause delays in our software,

disrupt the marketplace in which we operate, slow down the overall economy, curtail consumer spending, make it hard to adequately

staff our operations or enter into agreements with independent contractors and have a material adverse effect on our operations.

In addition, disruptions in the operations of the third parties with whom we do business have caused and could in the future cause

such third parties to fail to perform under their respective contracts or commitments with us.

For instance, we were party to

a sublease agreement with Telecom for office space located at 122 East 42nd Street in New York, NY, pursuant to which Telecom

was required to pay us $11,164 per month.

Due to the COVID-19, Telecom was unable to make its monthly payments under the sublease

agreement, and as a result, on June 18, 2020, we entered into an agreement with Telecom to terminate the sublease agreement.

the terms of the agreement, Telecom vacated the offices on June 30, 2020.

In addition, on June 22, 2020, we entered into an agreement

to terminate our lease for this office space.

Pursuant to the terms of the agreement, we vacated the offices on June 30, 2020

and agreed to forfeit our security deposit of $133,968.

the extent that the COVID-19 pandemic causes a substantial reduction or change in timing of our cash provided by operating activities,

we may be required to seek additional capital through the incurrence of debt or the issuance equity securities.

For instance,

on April 13, 2020, to help ensure adequate liquidity in light of the uncertainties posed by the COVID-19 pandemic, we applied

for a loan under the Small Business Administration (“SBA”) Paycheck Protection Program under the Coronavirus Aid,

Relief, and Economic Security Act (the “CARES Act”), and on May 3, 2020, we entered into a promissory note with an

aggregate principal amount of $506,500 (the “Note”) in favor of Citibank, N.A., as lender (the “Lender”).

On January 13, 2021, the Note was fully forgiven by the SBA and the Lender in compliance with the provisions of the CARES Act.

While we do not currently expect to incur additional indebtedness under the CARES Act, any inability to obtain additional liquidity

as and when needed would have a material adverse effect on our business, results of operations and financial condition.

extent to which the COVID-19 pandemic continues to impact our results will depend on future developments, which are highly uncertain

and cannot be predicted, including the actions to contain COVID-19 or treat its impact and the availability of COVID-19 vaccines,

among others.

success of our consumer applications is principally dependent on our active subscribers and our engagement with our user base.

of March 12, 2021, our applications supported an active subscriber base of approximately 103,700 active subscribers worldwide.

compared to the total number of users in any given period, only a small portion of our users are active subscribers or purchasers

success of our consumer applications is principally dependent on our active users and our engagement with our user base.

On an annual basis the Company has millions of

users, however, compared to the total number of users in any given period, only a small portion of our users are active users or purchasers

of virtual currency.

We primarily generate revenue through the sale of subscriptions and virtual currency to this small portion

of users and secondarily generate revenue through paid advertisements.

Accordingly, the success of our consumer applications is

substantially dependent on our ability to convert our users into active subscribers and to sell our users virtual currency.

discontinue the use of our applications in the ordinary course of business, and to sustain our revenue levels, we must attract,

retain and increase the number of users or more effectively monetize our existing users.

Falling user retention, growth or engagement

could also make our applications less attractive to advertisers, which could harm our business.

We primarily generate revenue through the sale of subscriptions and virtual currency to this small portion of users

and secondarily generate revenue through paid advertisements.

Accordingly, the success of our consumer applications is substantially dependent

on our ability to convert our users into active users and to sell our users virtual currency.

discontinue the use of our applications in the ordinary course of business, and to sustain our revenue levels, we must attract, retain

and increase the number of users or more effectively monetize our existing users.

Falling user retention, growth or engagement could

also make our applications less attractive to advertisers, which could harm our business.

are a number of factors that could negatively impact user retention, growth and engagement, including, among other things:

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products may fail to operate effectively on mobile or other platforms;

may be unable to combat spam or other hostile or inappropriate usage on our products or free speech;

may be unable to combat spam or other hostile or inappropriate usage on our products or free

may be adverse changes in user sentiment about the quality or usefulness of our existing

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may fail to provide adequate service to our users;

or other companies in our industry may be the subject of adverse media reports or other

negative publicity;

or other companies in our industry may be the subject of adverse media reports or other negative

may not maintain our brand image or our reputation may be damaged;

may be subject to denial of service or other attacks from hackers that result in service

retain existing users, and particularly those users who are paying subscribers, we must devote significant resources so that our

applications retain their interest.

If we fail to grow or sustain the number of our users, or if the rates at which we attract

and retain existing users declines or the rate at which users become paying subscribers declines, it could have a material adverse

effect on our business, results of operations or financial condition.

operate in an intensely competitive industry and any failure to attract new users could diminish or suspend our development and

possibly cease our operations.

retain existing users, and particularly those users who are paying subscribers, we must devote significant resources so that our applications

retain their interest.

If we fail to grow or sustain the number of our users, or if the rates at which we attract and retain existing

users declines or the rate at which users become paying subscribers declines, it could have a material adverse effect on our business,

results of operations or financial condition.

operate in an intensely competitive industry and any failure to attract new users could diminish or suspend our development and possibly

cease our operations.

industry in which we compete is highly competitive and has few barriers to entry.

If we are unable to efficiently and effectively

attract new users as a result of intense competition or a saturated market, we may not be able to continue the provision, development

and enhancement of our consumer applications or become profitable on a consistent basis in the future.

If we are unable to efficiently and effectively attract

new users as a result of intense competition or a saturated market, we may not be able to continue the provision, development and enhancement

of our consumer applications or become profitable on a consistent basis in the future.

factors affecting our ability to successfully compete include:

usefulness, novelty, performance and reliability of our consumer applications compared

to our competitors;

timing and market acceptance of our consumer applications, including developments and

enhancements of our competitors’

consumer applications;

ability to effectively monetize our consumer applications and the availability of free

or cheaper alternatives from our competitors;

usefulness, novelty, performance, ease of use, and reliability of our consumer applications compared to our competitors;

timing and market acceptance of our consumer applications, including developments and enhancements

of our competitors’ consumer applications;

ability to effectively monetize our consumer applications and the availability of free or

cheaper alternatives from our competitors;

ability to hire and retain talented employees, including technical employees, executives,

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upon the platforms through which our consumer applications are accessed and the platform

owner’s ability to control our activities on such platforms;

effectiveness of the marketing and advertisement of our consumer applications;

ability to maintain advertisers’

interest in advertising through our consumer applications;

owner’s ability to control our activities on such platforms;

effectiveness of the marketing and advertisement of our services and consumer applications;

ability to maintain advertisers’ interest in advertising through our consumer applications;

ability to innovate in the ever-changing consumer applications industry in which we operate;

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or consolidations within the consumer applications industry.

of our current and potential competitors offer similar services, have longer operating histories, significantly greater capital,

financial, technical, marketing and other resources and larger user or subscriber bases than we do.

These factors may allow our

competitors to more quickly respond to new or emerging technologies and changes in client or consumer preferences.

These competitors

may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more

aggressive pricing strategies that may allow them to build larger user bases consisting of greater numbers of clients or paying

Our competitors may develop applications and software that are equal or superior to our applications and software or that

achieve greater market or industry acceptance.

It is possible that a new application developed or offered by one of our competitors

could gain rapid scale at the expense of existing brands through harnessing a new technology or distribution channel, creating

a new approach to servicing clients or connecting people.

entities that we do not directly compete with but that have large or dominant positions in one or more markets could use those

positions to gain a competitive advantage against us by integrating competing video chat or social media platforms into products

they control, such as search engines, web browsers or mobile device operating systems.

for consumers to switch between products in the video chat industry are generally low, and consumers have a propensity to try

new products to connect with new people.

As a result, new entrants and business models are likely to continue to emerge in our

These activities could attract users and subscribers away from our applications and reduce our market share.

we are unable to effectively compete, we may fail to obtain new clients for our products or our users may discontinue the use

of our products and we may lose active subscribers, either of which would have a material adverse effect on our business, results

of operations and financial condition.

of our current and potential competitors offer similar services, have longer operating histories, significantly greater capital, financial,

technical, marketing and other resources and larger user or subscriber bases than we do.

These factors may allow our competitors to more

quickly respond to new or emerging technologies and changes in client or consumer preferences.

These competitors may engage in more extensive

research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing strategies that may

allow them to build larger user bases consisting of greater numbers of clients or paying users.

Our competitors may develop applications

and software that are equal or superior to our applications and software or that achieve greater market or industry acceptance.

possible that a new application developed or offered by one of our competitors could gain rapid scale at the expense of existing brands

through harnessing a new technology or distribution channel, creating a new approach to servicing clients or connecting people.

entities that we do not directly compete with but that have large or dominant positions in one or more markets could use those positions

to gain a competitive advantage against us by integrating competing video chat or social media platforms into products they control,

such as search engines, web browsers or mobile device operating systems.

for consumers to switch between products in the video chat industry are generally low, and consumers have a propensity to try new products

to connect with new people.

As a result, new entrants and business models are likely to continue to emerge in our industry.

These activities

could attract users and subscribers away from our applications and reduce our market share.

If we are unable to effectively compete, we may fail to obtain new

clients for our products or our users may discontinue the use of our products and we may lose active users, either of which would have

a material adverse effect on our business, results of operations and financial condition.

online live video industry is characterized by rapid technological change and the development of enhancements and new applications, and

if we fail to keep pace with technological developments or launch new applications, our business may be adversely affected.

online live video industry is characterized by rapid change, and our future success is dependent upon our ability to adopt and innovate.

To attract new users and increase revenues from existing users, we need to enhance, add new features to and improve our existing applications

and introduce new applications in the future.

The success of any enhancements or new features and applications depends on several factors,

including timely completion, introduction and market acceptance.

Building a new brand or product is generally an iterative process that

occurs over a meaningful period of time and involves considerable resources and expenditures, and we may expend significant time and

resources developing and launching an application that may not result in revenues in the anticipated timeframe or at all, or may not

result in revenue growth that is sufficient to offset increased expenses.

If we are unable to successfully develop enhancements, new

features or new applications to meet user trends and preferences, our business and operating results could be adversely affected.

addition, our applications are designed to operate on a variety of network, hardware and software platforms using internet tools and

protocols and we need to continuously modify and enhance our applications to keep pace with technological changes.

If we are unable to

respond in a timely and cost-effective manner, our current and future applications may become less marketable and less competitive or

even obsolete.

COVID-19 pandemic may adversely affect our revenues, results of operations and financial condition.

World Health Organization declared COVID-19 a pandemic on March 11, 2020.

The global spread of the COVID-19 pandemic and the various

attempts to contain it have created significant volatility, uncertainty and economic disruption.

The various precautionary as well as

on going measures taken by many governmental authorities around the world in order to limit the spread of COVID-19 have had, and could

continue to have, an adverse effect on the global markets and its economy, including on the availability and pricing of employees and

resources, and other aspects of the global economy.

Therefore, the impact of the COVID-19 pandemic could disrupt and cause delays in

our software, disrupt the marketplace in which we operate, slow down the overall economy, curtail consumer spending, make it hard to

adequately staff our operations or enter into agreements with independent contractors and have a material adverse effect on our operations.

In addition, disruptions in the operations of the third parties with whom we do business have caused and could in the future cause such

third parties to fail to perform under their respective contracts or commitments with us.

For instance, we were party to a sublease agreement

with Telecom for office space located at 122 East 42nd Street in New York, NY, pursuant to which Telecom was required to pay us $11,164

Due to the COVID-19, Telecom was unable to make its monthly payments under the sublease agreement, and as a result, on June

18, 2020, we entered into an agreement with Telecom to terminate the sublease agreement.

Under the terms of the agreement, Telecom vacated

the offices on June 30, 2020.

In addition, on June 22, 2020, we entered into an agreement to terminate our lease for this office space.

Pursuant to the terms of the agreement, we vacated the offices on June 30, 2020 and agreed to forfeit our security deposit of $133,968.

the extent that the COVID-19 pandemic and any subsequent outbreaks cause a substantial reduction or change in timing of our cash provided

by operating activities, we may be required to seek additional capital through the incurrence of debt or the issuance equity securities.

For instance, on April 13, 2020, to help ensure adequate liquidity in light of the uncertainties posed by the COVID-19 pandemic, we applied

for a loan under the Small Business Administration (“SBA”) Paycheck Protection Program under the Coronavirus Aid, Relief,

and Economic Security Act (the “CARES Act”), and on May 3, 2020, we entered into a promissory note with an aggregate principal

amount of $506,500 (the “Note”) in favor of Citibank, N.A., as lender (the “Lender”).

On January 13, 2021, the

Note was fully forgiven by the SBA and the Lender in compliance with the provisions of the CARES Act.

While we do not currently expect

to incur additional indebtedness under the CARES Act, any inability to obtain additional liquidity as and when needed would have a material

adverse effect on our business, results of operations and financial condition.

extent to which the COVID-19 pandemic and any subsequent outbreaks continue to impact our results will depend on future developments,

which are highly uncertain and cannot be predicted.

Despite recent progress in the administration of COVID-19 vaccines, the outbreak

of recent variants such as Delta and Omicron, the possible emergence of any new variants, and the related containment and mitigation

measures are likely to continue to have a serious adverse impact on the global economy, the severity and duration of which are uncertain.

The COVID-19 pandemic likely contributed

to an increase in our subscription revenue in certain geographic areas for the fiscal year ended December 31, 2021 as compared to the

fiscal year ended December 31, 2020.

However, we may not be able to sustain our subscription revenue growth rate in such geographic areas

or any other areas in the future.

COVID-19 pandemic likely led to an increase in our subscription revenue for the 2021 fiscal year relative to our 2020 subscription revenue

in certain geographic areas.

You should not rely on the subscription revenue growth of any prior quarterly or annual period as an indication

of our future performance.

Our subscription revenue may decline in certain geographic areas in future periods if the impact of the COVID-19

pandemic dissipates.

These results, as well as other metrics such as total revenues, net income, net cash provided by operating activities

and other financial and operating data, may not be indicative of results for future periods.

business is subscription based, and users are not obligated to, and may choose not to, renew their subscriptions after their existing

subscriptions expire.

Renewals of subscriptions to our applications may decline or fluctuate because of several factors, such as dissatisfaction

with our products and support, a user no longer having a need for our products, including any new users that have subscribed to our services

during the COVID-19 pandemic that may subsequently reduce or discontinue their use after the impact of the pandemic has tapered, or the

perception that competitive products provide better, more secure, or less expensive options.

If we are not able to continue to expand

our user base, our revenue may grow more slowly than expected or decline.

Similar to the uncertainty of users renewing their subscriptions,

the number of new subscribers may slow or decline once the impact of the COVID-19 pandemic subsides, particularly as a vaccine becomes

widely available, and users return to work or school or are otherwise no longer subject to COVID-related travel restrictions.

mobile applications are substantially dependent on interaction with mobile platforms and operating systems that we do not control.

portion of our revenue, primarily our revenue from mobile platforms, is derived from the Apple iOS platform and the Google Android

Although we believe that we have a good relationship with Apple and Google, any deterioration in our relationship with

either could materially harm our business, results of operations or financial condition.

are subject to each of Apple’s and Google’s standard terms and conditions for application developers, which govern

the promotion, distribution and operation of our applications on their respective storefronts.

Each of Apple and Google has broad

discretion to change its standard terms and conditions.

In addition, these standard terms and conditions can be vague and subject

to changing interpretations by Apple or Google.

In addition, each of Apple and Google has the right to prohibit a developer from

distributing applications on the storefront if the developer violates the standard terms and conditions.

In the event that either

Apple or Google ever determines that we are in violation of its standard terms and conditions and prohibits us from distributing

our applications on its storefront, it could materially harm our business, results of operations or financial condition.

number of people who access the internet through devices other than personal computers, including smart phones, cell phones and

handheld tablets, has increased dramatically in the past several years and is projected to continue to increase.

we are substantially dependent on interoperability with popular mobile platforms that we do not control, including the Apple App

Store and the Google Play Store, and a portion of our revenue is derived from these two digital storefronts.

There have been occasions

in the past when these digital storefronts were unavailable for short periods of time or where there have been issues with the

in-App purchasing functionality from the storefront.

In the event that either the Apple App Store or the Google Play Store is

unavailable or if in-App purchasing functionality from the storefront is non-operational for a prolonged period of time, it could

have a material adverse effect on our business, results of operations or financial condition.

portion of our revenue, primarily our revenue from mobile platforms, is derived from the Apple iOS platform and the Google Android platform.

Although we believe that we have a good relationship with Apple and Google, any deterioration in our relationship with either could materially

harm our business, results of operations or financial condition.

are subject to each of Apple’s and Google’s standard terms and conditions for application developers, which govern the promotion,

distribution and operation of our applications on their respective storefronts.

Each of Apple and Google has broad discretion to change

its standard terms and conditions.

In addition, these standard terms and conditions can be vague and subject to changing interpretations

by Apple or Google.

In addition, each of Apple and Google has the right to prohibit a developer from distributing applications on the

storefront if the developer violates the standard terms and conditions.

In the event that either Apple or Google ever determines that

we are in violation of its standard terms and conditions and prohibits us from distributing our applications on its storefront, it could

materially harm our business, results of operations or financial condition.

number of people who access the internet through devices other than personal computers, including smart phones, cell phones and handheld

tablets, has increased dramatically in the past several years and is projected to continue to increase.

Accordingly, we are substantially

dependent on interoperability with popular mobile platforms that we do not control, including the Apple App Store and the Google Play

Store, and a portion of our revenue is derived from these two digital storefronts.

There have been occasions in the past when these digital

storefronts were unavailable for short periods of time or where there have been issues with the in-App purchasing functionality from

the storefront.

In the event that either the Apple App Store or the Google Play Store is unavailable or if in-App purchasing functionality

from the storefront is non-operational for a prolonged period of time, it could have a material adverse effect on our business, results

of operations or financial condition.

addition, each of the Apple App Store and Google Play Store provides consumers with products that compete with ours.

of these platforms give preferential treatment to competitive products, it could seriously harm the usage of our products on mobile

If either of these

platforms give preferential treatment to competitive products, it could seriously harm the usage of our products on mobile devices.

business depends on developing, establishing and maintaining strong brands.

If we are unable to maintain and enhance our brands,

we may be unable to expand or retain our user and paying subscriber bases.

believe that developing, establishing and maintaining awareness of our application brands is critical to our efforts to achieve

widespread acceptance of our applications and is an important element to expanding our client and subscriber bases.

promotion of our application brands will depend largely on the effectiveness of our advertising and marketing efforts and on our

ability to provide reliable and useful applications at competitive prices.

If clients and users do not perceive our products to

be of high quality, or if our products are not favorably received by clients and users, the value of our brands could diminish,

thereby decreasing the attractiveness of our software, services and applications to clients and users.

In addition, advertising

and marketing activities may not yield increased revenue, and even if they do, any increased revenue may not offset the expenses

we incurred in building our brands.

we fail to successfully promote and maintain our application brands, or incur substantial expenses in unsuccessfully attempting

to promote and maintain our brands, we may fail to attract enough new clients or subscribers or retain our existing clients and

subscribers to the extent necessary to realize a sufficient return on our advertising and marketing activities, and it could have

a material adverse effect on our business, results of operations or financial condition.

may conduct a portion of our operations through informal relationships, partnerships, strategic alliances or joint ventures, and

our failure to continue such relationships or resolve any material disagreements with these third parties could have a material

adverse effect on the success of these operations, our financial condition and our results of operations.

may conduct a portion of our operations through partnerships, strategic alliances or joint ventures.

For instance, at the end

of 2019, we launched our consumer application platform strategy, under which we plan to co-brand our video chat applications and

promote them in partnership with third-party communities, with the expectation of entering into revenue sharing arrangements with

potential partners.

may depend on third parties for elements of these arrangements that are important to the success of the relationship, such as

the development of features or technologies to be incorporated into our applications.

The performance of these third-party obligations

or the ability of third parties to meet their obligations under these arrangements would be outside of our control.

If these third

parties do not meet or satisfy their obligations under these arrangements, the performance and success of these arrangements,

and their value to us, would be adversely affected.

If our current or future partners are unable to meet their obligations, we

may be forced to undertake the obligations ourselves and/or incur additional expenses in order to have some other party perform

such obligations.

In such cases we may also be required to seek legal enforcement of our rights, the outcome of which would be

If any of these events occur, they may adversely impact us, our financial performance and results of operations, and/or

adversely impact our ability to enter into similar relationships in the future.

arrangements with third parties could involve risks not otherwise present when we directly manage our operations, including, for

parties may share certain approval rights over major decisions within the scope of the relationship;

possibility that these third parties might become insolvent or bankrupt;

possibility that we may incur liabilities as a result of an action taken by one of these third parties;

third parties may be in a position to take action contrary to our instructions or requests or contrary to our policies or

between us and these third parties may result in litigation or arbitration that would increase our expenses, delay or terminate

projects and prevent our officers and directors from focusing their time and effort on our business.

our goodwill or other intangible assets become impaired, we may be required to record a significant charge to earnings, which

could seriously harm our operating results.

are required to test goodwill for impairment at least annually or more frequently if there are indicators that the carrying amount

of the goodwill exceeds its carried value.

As of December 31, 2020, we had recorded a total of $6.3 million of goodwill and $0.4

million of other intangible assets.

An adverse change in domestic or global market conditions, particularly if such change has

the effect of changing one of our critical assumptions or estimates made in connection with the impairment testing of goodwill

or intangible assets, could result in a change to the estimation of fair value that could, in turn, result in an impairment charge

to our goodwill or other intangible assets.

If we divest or discontinue product categories or products that we previously acquired,

or if the value of those parts of our business become impaired, we also may need to evaluate the carrying value of our goodwill.

Any such material charges may have a negative impact on our operating results.

the distribution of our products through application stores increases, we may incur additional fees from the developers of application

the user base of our consumer applications continues to shift to mobile solutions, we increasingly rely on the Apple iOS and Google

Android platforms to distribute our products.

While our products are free to download from these stores, we offer our users the

opportunity to purchase paid memberships and certain premium features through our products.

We determine the prices at which these

memberships and features are sold and, in exchange for facilitating the purchase of these memberships and features through our

products to users who download our products from these stores, we pay Apple or Google, as applicable, a share, which is currently

30% of the revenue we receive from these transactions.

In the future, other distribution platforms that we utilize may charge

us fees for the distribution of our applications.

As the distribution of our products through application stores increases, the

amount of fees that we must pay to the developers of these application stores will also increase.

Unless we find a way to offset

these fees, our business, financial condition and results of operations could be adversely affected.

If we are unable to maintain and enhance our brands, we may

be unable to expand or retain our user and paying subscriber bases.

believe that developing, establishing and maintaining awareness of our application brands is critical to our efforts to achieve widespread

acceptance of our applications and is an important element to expanding our client and subscriber bases.

Successful promotion of our

application brands will depend largely on the effectiveness of our advertising and marketing efforts and on our ability to provide reliable

and useful applications at competitive prices.

If clients and users do not perceive our products to be of high quality, or if our products

are not favorably received by clients and users, the value of our brands could diminish, thereby decreasing the attractiveness of our

software, services and applications to clients and users.

In addition, advertising and marketing activities may not yield increased revenue,

and even if they do, any increased revenue may not offset the expenses we incurred in building our brands.

we fail to successfully promote and maintain our application brands, or incur substantial expenses in unsuccessfully attempting to promote

and maintain our brands, we may fail to attract enough new clients or subscribers or retain our existing clients and subscribers to the

extent necessary to realize a sufficient return on our advertising and marketing activities, and it could have a material adverse effect

on our business, results of operations or financial condition.

our goodwill or other intangible assets become impaired, we may be required to record a significant charge to earnings, which could seriously

harm our operating results.

are required to test goodwill for impairment at least annually or more frequently if there are indicators that the carrying amount of

the goodwill exceeds its carried value.

As of December 31, 2021, we had recorded a total of $6.3 million of goodwill and $0.2 million

of other intangible assets.

An adverse change in domestic or global market conditions, particularly if such change has the effect of

changing one of our critical assumptions or estimates made in connection with the impairment testing of goodwill or intangible assets,

could result in a change to the estimation of fair value that could, in turn, result in an impairment charge to our goodwill or other

intangible assets.

If we divest or discontinue product categories or products that we previously acquired, or if the value of those parts

of our business become impaired, we also may need to evaluate the carrying value of our goodwill.

Any such material charges may have

a negative impact on our operating results.

future success is dependent, in part, on the performance and continued service of our executive officers.

Without their continued

service, we may be forced to interrupt or eventually cease our operations.

are dependent to a great extent upon the experience, abilities and continued service of Jason Katz, our Chief Executive Officer

and Chairman of the Board of Directors, and Kara B.

Without their continued service,

we may be forced to interrupt or eventually cease our operations.

are dependent to a great extent upon the experience, abilities and continued service of Jason Katz, our Chief Executive Officer and Chairman

of the Board of Directors, and Kara B.

Jenny, our Chief Financial Officer and director.

The loss of the services

of these individuals would substantially affect our business or operations and could have a material adverse effect on our business,

results of operations or financial condition.

subscription metrics and other estimates are subject to inherent challenges in measurement,

and real or perceived inaccuracies in those metrics may seriously harm and negatively

affect our reputation and our business.

regularly review metrics, including our active subscribers, to evaluate growth trends, measure our performance, and make strategic

These metrics are calculated using internal Company data and have not been validated by an independent third party.

While these numbers are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement,

there are inherent challenges in measuring how our products are used across large populations globally.

The loss of the services of these individuals

would substantially affect our business or operations and could have a material adverse effect on our business, results of operations

or financial condition.

subscription metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those

metrics may seriously harm and negatively affect our reputation and our business.

regularly review metrics to evaluate growth trends, measure our performance, and make strategic decisions.

These metrics are calculated

using internal Company data and have not been validated by an independent third party.

While these numbers are based on what we believe

to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring how

our products are used across large populations globally.

of our demographic data may be incomplete or inaccurate.

For example, because users self-report their dates of birth, our age-demographic

data may differ from our users’

If our users provide us with incorrect or incomplete information regarding

their age or other attributes, our estimates may prove inaccurate.

addition, our business strategy is guided by data analytics that we compute internally based on data collection, data processing,

cloud-based platforms, statistical projections and forecasting, mobile computing, social media analytics and other applications

and technologies.

We use these internally derived data analytics to guide decisions concerning the development and modification

of features on our applications, monetization strategies for our applications and the development of new applications, among other

inability to accurately derive our metrics or data analytics could result in incorrect business decisions and inefficiencies.

For instance, if a significant understatement or overstatement of our active subscribers were to occur, we may expend resources

to implement unnecessary business measures or fail to take required actions to attract a sufficient number of subscribers to satisfy

our growth strategies.

If advertisers or investors do not perceive our subscription, geographic or other demographic metrics to

be accurate representations of our user base, or if we discover material inaccuracies in our subscription, geographic or other

demographic metrics, our reputation may be seriously harmed.

At the same time, advertisers may be less willing to allocate their

budgets or resources to our products, which could seriously harm our business, results of operation or financial condition.

we recognize revenue from subscriptions over the term of the subscription, the full impact of downturns or upturns in subscription

sales may not be immediately reflected in our results of operations or financial condition.

recognize subscription revenue from customers monthly over the term of the subscription, and subscriptions are generally offered

in one-, three-, six-, twelve-, and fifteen-month terms, depending on the particular product.

As a result, much of the subscription

revenue we report in each period is deferred revenue from subscription agreements entered into during previous periods.

Consequently,

a decline in new or renewed subscriptions in any one quarter will negatively affect our revenue in future quarters.

we might not be able to immediately adjust our costs and expenses to reflect these reduced revenues.

Accordingly, the effect of

significant downturns in user acceptance of our applications may not be fully reflected in our results of operations until future

Our subscription model also makes it difficult for us to quickly increase our revenue through additional sales in any

period, as revenue from new subscribers must be recognized over the term of the subscription.

As a result, you should not rely

on the amount of subscription revenue generated in prior quarters as an indication of future results.

online live video industry is characterized by rapid technological change and the development of enhancements and new applications,

and if we fail to keep pace with technological developments or launch new applications, our business may be adversely affected.

online live video industry is characterized by rapid change, and our future success is dependent upon our ability to adopt and

To attract new users and increase revenues from existing users, we need to enhance, add new features to and improve

our existing applications and introduce new applications in the future.

The success of any enhancements or new features and applications

depends on several factors, including timely completion, introduction and market acceptance.

Building a new brand or product is

generally an iterative process that occurs over a meaningful period of time and involves considerable resources and expenditures,

and we may expend significant time and resources developing and launching an application that may not result in revenues in the

anticipated timeframe or at all, or may not result in revenue growth that is sufficient to offset increased expenses.

unable to successfully develop enhancements, new features or new applications to meet user trends and preferences, our business

and operating results could be adversely affected.

addition, our applications are designed to operate on a variety of network, hardware and software platforms using internet tools

and protocols and we need to continuously modify and enhance our applications to keep pace with technological changes.

unable to respond in a timely and cost-effective manner, our current and future applications may become less marketable and less

competitive or even obsolete.

plan to continue expanding our operations internationally and may be subject to increased business and economic risks that could

seriously harm our business.

we derive a significant portion of revenue from international territories and we plan to continue expanding our business operations

In addition, we rely on outsourced services based in Russia, India and elsewhere.

We may enter new international markets

where we have limited or no experience in marketing, selling and deploying our products.

If we fail to deploy or manage our operations

in international markets successfully, our business may suffer.

As our international operations increase our operating results

may become more greatly affected by fluctuations in the exchange rates of the currencies in which we do business.

we are subject to a variety of risks inherent in doing business internationally, including:

data may differ from our users’ actual ages.

If our users provide us with incorrect or incomplete information regarding their age

or other attributes, our estimates may prove inaccurate.

addition, our business strategy is guided by data analytics that we compute internally based on data collection, data processing, cloud-based

platforms, statistical projections and forecasting, mobile computing, social media analytics and other applications and technologies.

We use these internally derived data analytics to guide decisions concerning the development and modification of features on our applications,

monetization strategies for our applications and the development of new applications, among other things.

The inability to accurately derive our metrics or data analytics could

result in incorrect business decisions and inefficiencies.

For instance, if a significant understatement or overstatement of our active

users were to occur, we may expend resources to implement unnecessary business measures or fail to take required actions to attract a

sufficient number of subscribers to satisfy our growth strategies.

If advertisers or investors do not perceive our subscription, geographic

or other demographic metrics to be accurate representations of our user base, or if we discover material inaccuracies in our subscription,

geographic or other demographic metrics, our reputation may be seriously harmed.

At the same time, advertisers may be less willing to

allocate their budgets or resources to our products, which could seriously harm our business, results of operation or financial condition.

we recognize revenue from subscriptions over the term of the subscription, the full impact of downturns or upturns in subscription sales

may not be immediately reflected in our results of operations or financial condition.

recognize subscription revenue from customers monthly over the term of the subscription, and subscriptions are generally offered in one-,

three-, six-, twelve-, and fifteen-month terms, depending on the particular product.

As a result, much of the subscription revenue we

report in each period is deferred revenue from subscription agreements entered into during previous periods.

Consequently, a decline

in new or renewed subscriptions in any one quarter will negatively affect our revenue in future quarters.

In addition, we might not be

able to immediately adjust our costs and expenses to reflect these reduced revenues.

Accordingly, the effect of significant downturns

in user acceptance of our applications may not be fully reflected in our results of operations until future periods.

Our subscription

model also makes it difficult for us to quickly increase our revenue through additional sales in any period, as revenue from new subscribers

must be recognized over the term of the subscription.

As a result, you should not rely on the amount of subscription revenue generated

in prior quarters as an indication of future results.

plan to continue expanding our operations internationally and may be subject to increased business and economic risks that could seriously

harm our business.

Presently, we derive a significant portion

of revenue from international territories and we plan to continue expanding our business operations abroad.

In addition, we rely on

outsourced development services from companies with employees and consultants based in Russia, India and elsewhere.

invasion of Ukraine by Russia has escalated tensions among the United States, the North Atlantic Treaty Organization member states, and Russia.

The United States, other North Atlantic Treaty Organization member states, as well as non-member states, have announced new

sanctions against Russia and certain Russian banks, enterprises and individuals.

These and any future additional sanctions and any

resulting conflict between Russia, the United States and other countries may, on a short term, disrupt, or in the future could

disrupt, the consulting services provided by our third-party developers residing in Russia.

This conflict may increase our costs

with respect to any current or future planned development services in Russia, or could result in negative publicity.

We may enter new international markets where we

have limited or no experience in marketing, selling and deploying our products.

If we fail to deploy or manage our operations in international

markets successfully, our business may suffer.

As our international operations increase our operating results may become more greatly

affected by fluctuations in the exchange rates of the currencies in which we do business.

In addition, we are subject to a variety of

risks inherent in doing business internationally, including:

social, and economic instability;

10 unchanged sentences

● difficulties

in staffing and managing global operations and the increased travel, infrastructure and

compliance costs associated with multiple international locations;

in staffing and managing global operations and the increased travel, infrastructure and compliance

costs associated with multiple international locations;

● regulations

that might add difficulties in repatriating cash earned outside the United States and

otherwise preventing us from freely moving cash;

that might add difficulties in repatriating cash earned outside the United States and otherwise

preventing us from freely moving cash;

and export restrictions and changes in trade regulation;

2 unchanged sentences

Foreign Corrupt Practices Act, the U.K.

Bribery Act and similar laws in

other jurisdictions;

impact of the United Kingdom’s exit from the European Union;

controls and economic sanctions administered by the Department of Commerce Bureau of

Industry and Security and the Treasury Department’s Office of Foreign Assets Control.

we are unable to expand internationally and manage the complexity of our global operations successfully, our business could be

seriously harmed.

Bribery Act and similar laws in other

jurisdictions;

impact of the United Kingdom’s exit from the European Union;

controls and economic sanctions administered by the Department of Commerce Bureau of Industry

and Security and the Treasury Department’s Office of Foreign Assets Control.

we are unable to expand internationally and manage the complexity of our global operations successfully, our business could be seriously

portion of our revenue is dependent on third-party resellers, the efforts of which we do not control.

are dependent on the efforts of third parties who resell our subscriptions for a portion of our revenue.

In particular, video

chat users in certain international territories have an option to purchase subscriptions through local resellers.

resellers prepay in bulk for services and debit the prepaid balance as one-time subscriptions and virtual currency are sold to

In particular, video chat users

in certain international territories have an option to purchase subscriptions through local resellers.

These local resellers prepay in

bulk for services and debit the prepaid balance as one-time subscriptions and virtual currency are sold to end users.

do not control the efforts of these resellers.

If they fail to market or sell our subscriptions successfully, merge or consolidate

with other businesses, declare bankruptcy or depart from their respective industries, our business could be harmed.

unable to maintain or replace our contractual relationships with resellers, efficiently manage our relationships with them or

establish new contractual relationships with other third parties, we may fail to retain subscribers or acquire potential new subscribers

and may experience delays and increased costs in adding or replacing subscribers that were lost, any of which could materially

affect our business, operating results and financial condition.

If they fail to market or sell our subscriptions successfully, merge or consolidate with

other businesses, declare bankruptcy or depart from their respective industries, our business could be harmed.

If we are unable to maintain

or replace our contractual relationships with resellers, efficiently manage our relationships with them or establish new contractual

relationships with other third parties, we may fail to retain subscribers or acquire potential new subscribers and may experience delays

and increased costs in adding or replacing subscribers that were lost, any of which could materially affect our business, operating results

and financial condition.

governments restricting access to our applications could materially adversely impact our business.

have continued to focus on increasing the international presence of our applications by expanding the localized and translated

versions for additional international countries that are culturally aligned with our products.

Foreign data protection, privacy,

consumer protection, content regulation, and other laws and regulations are often more restrictive than those in the United States.

Foreign governments may censor our products in their countries, restrict access to our products from their countries entirely,

or impose other restrictions that may affect their citizens’

ability to access our products for an extended period of time

or even indefinitely.

If foreign governments think we are violating their laws, or for other reasons, they may seek to restrict

access to our products, which would give our competitors an opportunity to penetrate geographic markets that we cannot access.

As a result, our ability to grow our international user base would be impaired, and we may not be able to maintain or grow our

revenue as anticipated and our business could be seriously harmed.

mobile applications rely on high-bandwidth data capabilities, which are subject to hardware, networks, regulations and standards

that we do not control.

have continued to focus on increasing the international presence of our applications by expanding the localized and translated versions

for additional international countries that are culturally aligned with our products.

Foreign data protection, privacy, consumer protection,

content regulation, and other laws and regulations are often more restrictive than those in the United States.

Foreign governments may

censor our products in their countries, restrict access to our products from their countries entirely, or impose other restrictions that

may affect their citizens’ ability to access our products for an extended period of time or even indefinitely.

If foreign governments

think we are violating their laws, or for other reasons, they may seek to restrict access to our products, which would give our competitors

an opportunity to penetrate geographic markets that we cannot access.

As a result, our ability to grow our international user base would

be impaired, and we may not be able to maintain or grow our revenue as anticipated and our business could be seriously harmed.

mobile applications rely on high-bandwidth data capabilities, which are subject to hardware, networks, regulations and standards that

we do not control.

mobile applications require high-bandwidth data capabilities.

If the costs of data usage increase or access to cellular networks

is limited, our user growth and retention on mobile platforms may be seriously harmed.

Additionally, to deliver high-quality video

and other content over mobile cellular networks, our products must work well with a range of mobile technologies, systems, networks,

regulations and standards that we do not control, and any changes to those mobile technologies, systems, networks, regulations

or standards could impact the usability of our mobile applications, which would materially adversely affect our business, results

of operations or financial condition.

business depends in large part upon the availability of cost-effective advertising space through a variety of media and keeping

pace with trends in consumer behavior.

depend upon the availability of advertising space through a variety of media, including third-party applications on platforms

such as Facebook, to recruit new users and subscribers, generate activity from existing users and subscribers and direct traffic

to our application.

Historically, we have had to increase our marketing expenditures in order to attract and retain users and

sustain our growth.

The availability of advertising space varies, and a shortage of advertising space in any particular media

or on any particular platform, or the elimination of a particular medium on which we advertise, could limit our ability to generate

new subscribers, generate activity from existing subscribers or direct traffic to our applications, any of which could have a

material adverse effect on our business, results of operations and financial condition.

If the costs of data usage increase or access to cellular networks is limited,

our user growth and retention on mobile platforms may be seriously harmed.

Additionally, to deliver high-quality video and other content

over mobile cellular networks, our products must work well with a range of mobile technologies, systems, networks, regulations and standards

that we do not control, and any changes to those mobile technologies, systems, networks, regulations or standards could impact the usability

of our mobile applications, which would materially adversely affect our business, results of operations or financial condition.

business depends in large part upon the availability of cost-effective advertising space through a variety of media and keeping pace

with trends in consumer behavior.

We depend upon the availability of advertising space through a variety

of media, including third-party applications on platforms such as Facebook, to recruit new users and subscribers, generate activity from

existing users and subscribers and direct traffic to our application.

Historically, we have had to increase our marketing expenditures

in order to attract and retain users and sustain our growth.

The availability of advertising space varies, and a shortage of advertising

space in any particular media or on any particular platform, or the elimination of a particular medium on which we advertise, could limit

our ability to generate new subscribers, generate activity from existing subscribers or direct traffic to our applications, any of which

could have a material adverse effect on our business, results of operations and financial condition.

In addition, evolving consumer behavior

can affect the availability of profitable marketing opportunities.

For example, as consumers communicate less via email and more

via text messaging and other virtual means, the reach of email campaigns designed to attract new and repeat users (and retain

current users) for our applications is adversely impacted.

To continue to reach potential users and grow our business, we must

devote more of our overall marketing expenditures to newer advertising channels, which may be unproven and undeveloped, and we

may not be able to continue to manage and fine-tune our marketing efforts in response to these trends.

For example, as consumers communicate less via email and more via text

messaging and other virtual means, the reach of email campaigns designed to attract new and repeat users (and retain current users) for

our applications is adversely impacted.

To continue to reach potential users and grow our business, we must devote more of our overall

marketing expenditures to newer advertising channels, which may be unproven and undeveloped, and we may not be able to continue to manage

and fine-tune our marketing efforts in response to these trends.

In addition, during the first quarter of 2022, we engaged two marketing

agencies to help us drive consumer engagement through the Paltalk and Camfrog applications.

However, these marketing efforts may be ineffective

or inadequate to attract potential users or retain existing users.

Interruption,

maintenance or failure of our programming code, servers or technological infrastructure could hurt our ability to effectively

provide our applications, which could damage our reputation and harm our results of operations.

availability of our applications depends on the continued operation of our programming code, databases, servers and technological

infrastructure.

Any damage to, or failure of, our systems could result in interruptions in service for our applications, which

could damage our brands and have a material adverse effect on our business, results of operations or financial condition.

systems are vulnerable to damage or interruption from terrorist attacks, floods, fires, power loss, telecommunications failures,

computer viruses, computer denial of service attacks or other attempts to harm our systems.

Some of our systems are not fully

redundant, and our disaster recovery planning cannot account for all eventualities.

maintenance or failure of our programming code, servers or technological infrastructure could hurt our ability to effectively provide

our applications, which could damage our reputation and harm our results of operations.

availability of our applications depends on the continued operation of our programming code, databases, servers and technological infrastructure.

Any damage to, or failure of, our systems could result in interruptions in service for our applications, which could damage our brands

and have a material adverse effect on our business, results of operations or financial condition.

Our systems are vulnerable to damage

or interruption from terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses, computer denial of

service attacks or other attempts to harm our systems.

Some of our systems are not fully redundant, and our disaster recovery planning

cannot account for all eventualities.

addition, from time to time we experience limited periods of server downtime due to maintenance or enhancements.

If our applications

are unavailable during these periods of downtime or if our users are unable to access our applications within a reasonable amount

of time, users may not return to our applications in the future, or at all.

As our user base and the volume and types of information

shared on our applications continues to grow, we will need an increasing amount of technology infrastructure, including network

capacity and computing power, to continue to satisfy our users’

It is possible that we may fail to effectively scale

and grow our technology infrastructure to accommodate these increased demands.

Any failure to support and scale our technology

infrastructure could adversely impact the reputation of our brands and harm our results of operations.

breaches, computer viruses and computer hacking attacks could harm our business, results of operations or financial condition.

receive, process, store and transmit a significant amount of personal user and other confidential information, including credit

card information, and enable our users to share their personal information with each other.

In some cases, we retain third party

vendors to store this information.

We continuously develop and maintain systems to protect the security, integrity and confidentiality

of this information, but cannot guarantee that inadvertent or unauthorized use or disclosure will not occur or that third parties

will not gain unauthorized access to this information despite our efforts.

If any such event were to occur, we may not be able

to remedy the event, and we may have to expend significant capital and resources to mitigate the impact of such an event, and

to develop and implement protections to prevent future events of this nature from occurring.

breaches, computer malware and computer hacking attacks have become more prevalent in our industry, have occurred on our systems

in the past, and may occur on our systems in the future.

Although it is difficult to determine what, if any, harm may directly

result from an interruption or attack, any security breach caused by hacking, including efforts to gain unauthorized access to

our applications, servers or websites, or to cause intentional malfunctions or loss or corruption of data, software, hardware

or other computer equipment, and the inadvertent transmission of computer viruses could harm our business, financial condition

and results of operations.

If a breach of our security (or the security of our vendors and partners) occurs, the perception of

the effectiveness of our security measures and our reputation may be harmed, we could lose current and potential users and the

recognition of our various brands and their competitive positions could be diminished, any or all of which could adversely affect

our business, financial condition and results of operations.

may attempt to use our products to send targeted and untargeted spam messages to users, which may embarrass or annoy users and

make our products less user friendly.

We cannot be certain that the technologies that we have developed to repel spamming attacks

will be able to eliminate all spam messages from our products.

Our actions to combat spam may also require diversion of significant

time and focus of our engineering team from improving our products.

As a result of spamming activities, our users may use our

products less or stop using them altogether, and result in continuing operational cost to us.

Similarly, terror and other criminal groups

may use our products to promote their goals and encourage users to engage in terror and other illegal activities.

We expect that

as more people use our products, these groups will increasingly seek to misuse our products.

Although we invest resources to combat

these activities, including by suspending or terminating accounts we believe are violating our Terms of Service, we expect these

groups will continue to seek ways to act inappropriately and illegally on our products.

Combating these groups requires our engineering

team to divert significant time and focus from improving our products.

In addition, we may not be able to control or stop our products

from becoming the preferred application of use by these groups, which may become public knowledge and seriously harm our reputation

or lead to lawsuits or attention from regulators.

are unavailable during these periods of downtime or if our users are unable to access our applications within a reasonable amount of

time, users may not return to our applications in the future, or at all.

As our user base and the volume and types of information shared

on our applications continues to grow, we will need an increasing amount of technology infrastructure, including network capacity and

computing power, to continue to satisfy our users’ needs.

It is possible that we may fail to effectively scale and grow our technology

infrastructure to accommodate these increased demands.

Any failure to support and scale our technology infrastructure could adversely

impact the reputation of our brands and harm our results of operations.

breaches, computer viruses and cybersecurity incidents could harm our business, results of operations or financial condition.

receive, process, store and transmit a significant amount of personal user and other confidential information, including credit card

information, and enable our users to share their personal information with each other.

In some cases, we retain third party vendors to

store this information.

We continuously develop and maintain systems to protect the security, integrity and confidentiality of this information,

but cannot guarantee that inadvertent or unauthorized use or disclosure will not occur or that third parties will not gain unauthorized

access to this information despite our efforts.

If any such event were to occur, we may not be able to remedy the event, and we may have

to expend significant capital and resources to mitigate the impact of such an event, and to develop and implement protections to prevent

future events of this nature from occurring.

breaches, computer malware and cybersecurity incidents have become more prevalent in our industry and may occur on our systems in the

Although it is difficult to determine what, if any, harm may directly result from an interruption or attack, any security breach

caused by hacking, including efforts to gain unauthorized access to our applications, servers or websites, or to cause intentional malfunctions

or loss or corruption of data, software, hardware or other computer equipment, and the inadvertent transmission of computer viruses could

harm our business, financial condition and results of operations.

If a breach of our security (or the security of our vendors and partners)

occurs, the perception of the effectiveness of our security measures and our reputation may be harmed, we could lose current and potential

users and the recognition of our various brands and their competitive positions could be diminished, any or all of which could adversely

affect our business, financial condition and results of operations.

may attempt to use our products to send targeted and untargeted spam messages to users, which may embarrass or annoy users and make our

products less user friendly.

We cannot be certain that the technologies that we have developed to repel spamming attacks will be able

to eliminate all spam messages from our products.

Our actions to combat spam may also require diversion of significant time and focus

of our engineering team from improving our products.

As a result of spamming activities, our users may use our products less or stop

using them altogether, and result in continuing operational cost to us.

terror and other criminal groups may use our products to promote their goals and encourage users to engage in terror and other illegal

We expect that as more people use our products, these groups will increasingly seek to misuse our products.

Although we invest

resources to combat these activities, including by suspending or terminating accounts we believe are violating our Terms of Service,

we expect these groups will continue to seek ways to act inappropriately and illegally on our products.

Combating these groups requires

our engineering team to divert significant time and focus from improving our products.

In addition, we may not be able to control or

stop our products from becoming the preferred application of use by these groups, which may become public knowledge and seriously harm

our reputation or lead to lawsuits or attention from regulators.

If these activities increase, our reputation, user growth and user engagement,

and operational cost structure could be seriously harmed.

have faced, and we expect that we will continue to face, chargeback liability when our credit card providers resolve chargebacks

in favor of their customers.

We cannot accurately anticipate the extent of these liabilities, and if not properly addressed, these

liabilities could increase our operating expenses or preclude us from accepting certain credit cards as a method of payment, either

of which would materially adversely affect our results of operations and financial condition.

We depend on the ability to accept credit and

debit card payments from our subscribers and our ability to maintain the good standing of our merchant account with our credit

card providers to process subscription payments.

In the event that one of our customers initiates a billing dispute and one of

our credit card providers resolves the dispute in the customer’s favor, the transaction is normally charged back to us and

the purchase price is credited or otherwise refunded to the customer.

In addition, under current credit card practices, a merchant

is liable for fraudulent credit card transactions when, as is the case with the transactions we process, that merchant does not

obtain a cardholder’s signature.

have suffered losses and we expect that we will continue to suffer losses as a result of subscriptions placed with fraudulent

credit card data, as well as users who chargeback their purchases.

Any failure to adequately control fraudulent credit card transactions

or keep our chargebacks under an acceptable threshold would result in significantly higher credit card-related costs and, therefore,

materially increase our operating expenses.

may make or attempt to make acquisitions in the future, which could require significant management attention, disrupt our business,

dilute our stockholders and seriously harm our business.

part of our business strategy, we have made and intend to make acquisitions to add specialized employees and complementary companies,

products and technologies.

In the future, we may not be able to find other suitable acquisition candidates, and we may not be

able to complete acquisitions on favorable terms, if at all.

Our previous and future acquisitions may not achieve our goals, and

any future acquisitions we complete could be viewed negatively by users, advertisers or investors.

In addition, if we fail to

successfully close transactions or integrate new teams, or integrate the products and technologies associated with these acquisitions

into our company, our business could be seriously harmed.

Any integration process may require significant time and resources,

and we may not be able to manage the process successfully.

We may not successfully evaluate or use the acquired products, technology

and personnel, or accurately forecast the financial impact of an acquisition transaction, including accounting charges.

also incur unanticipated liabilities that we assume as a result of acquiring companies.

We may have to pay cash, incur debt or

issue equity securities to pay for any acquisition, any of which could negatively impact our business and financial condition.

Issuing equity to finance any such acquisitions would also dilute our existing stockholders.

Incurring debt would increase our

fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.

Furthermore, many governments have enacted laws requiring companies to provide

notice of data security incidents involving certain types of personal data.

Such laws are inconsistent, and compliance in the event of

a widespread data breach is costly.

a result of the COVID-19 pandemic, we adopted a work-from-home policy in March 2020, and we expect this practice to continue for the

foreseeable future.

Remote work and remote access increases our vulnerability to cybersecurity attacks.

We may see an increase in cyberattack

volume, frequency and sophistication driven by the global enablement of remote workforces.

We seek to detect and investigate unauthorized

attempts and attacks against our network, products and services and to prevent their recurrence where practicable through changes to

our internal processes and tools and changes or updates to our products and services;

however, we remain potentially vulnerable to additional

known or unknown threats.

In some instances, we and the users of our applications can be unaware of an incident or its magnitude and

existing general liability insurance coverage and the coverage we carry for cyber-related liabilities may not continue to be available

on acceptable terms or be available in sufficient amounts to cover one or more large claims or that the insurer will not deny coverage

as to any future claim.

The successful assertion of one or more large claims against us that are not covered or exceed available insurance

coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or

co-insurance requirements, could harm our business.

have faced, and we expect that we will continue to face, chargeback liability when our credit card providers resolve chargebacks in favor

of their customers.

We cannot accurately anticipate the extent of these liabilities, and if not properly addressed, these liabilities

could increase our operating expenses or preclude us from accepting certain credit cards as a method of payment, either of which would

materially adversely affect our results of operations and financial condition.

depend on the ability to accept credit and debit card payments from our subscribers and our ability to maintain the good standing of

our merchant account with our credit card providers to process subscription payments.

In the event that one of our customers initiates

a billing dispute and one of our credit card providers resolves the dispute in the customer’s favor, the transaction is normally

charged back to us and the purchase price is credited or otherwise refunded to the customer.

In addition, under current credit card practices,

a merchant is liable for fraudulent credit card transactions when, as is the case with the transactions we process, that merchant does

not obtain a cardholder’s signature.

have suffered losses and we expect that we will continue to suffer losses as a result of subscriptions placed with fraudulent credit

card data, as well as users who chargeback their purchases.

Any failure to adequately control fraudulent credit card transactions or

keep our chargebacks under an acceptable threshold would result in significantly higher credit card-related costs and, therefore, materially

increase our operating expenses.

face certain risks related to the physical and emotional safety of users and third parties.

cannot control the actions of our users in their communications or physical actions.

There is a possibility that users or third

parties could be physically or emotionally harmed following interaction with another user.

We warn our users that we do not screen

other users and, given our lack of physical presence, we do not take any action to ensure personal safety on a meeting between

users or subscribers arranged following contact initiated via our applications or ensure personal safety of our users against

self-harming following contact with other users initiated via our applications.

If an unfortunate incident of this nature occurred

in a meeting of two people following contact initiated on our applications or that of one of our competitors, any resulting negative

publicity could materially and adversely affect us or the online video chat industry in general.

Any such incident involving our

applications could damage our reputation and our brand, which could have a material adverse effect on our business, results of

operations or financial condition.

In addition, the affected users or third parties could initiate legal action against us, which

could divert management attention from operations, cause us to incur significant expenses, whether we are successful or not, and

damage our reputation.

There is a possibility that users or third parties

could be physically or emotionally harmed following interaction with another user.

We warn our users that we do not screen other users

and, given our lack of physical presence, we do not take any action to ensure personal safety on a meeting between users or subscribers

arranged following contact initiated via our applications or ensure personal safety of our users against self-harming following contact

with other users initiated via our applications.

If an unfortunate incident of this nature occurred in a meeting of two people following

contact initiated on our applications or that of one of our competitors, any resulting negative publicity could materially and adversely

affect us or the online video chat industry in general.

Any such incident involving our applications could damage our reputation and

our brand, which could have a material adverse effect on our business, results of operations or financial condition.

In addition, the

affected users or third parties could initiate legal action against us, which could divert management attention from operations, cause

us to incur significant expenses, whether we are successful or not, and damage our reputation.

may need additional capital to execute our business plan.

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effect on our business, results of operations or financial condition.

might need to raise additional capital or financing through debt or equity offerings to support our expansion, marketing efforts

and application development programs in the future.

might need to raise additional capital or financing through debt or equity offerings to support our expansion, marketing efforts and

application development programs in the future.

For instance, we might require additional capital or financing to:

and retain talented employees, including technical employees, executives, and marketing experts;

effectuate our long-term

growth strategy and expand our application development programs;

our long-term growth strategy and expand our application development programs;

and advertise our applications to attract more paying subscribers.

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If we cannot obtain additional capital or financing,

we may need to reduce, defer or cancel application development programs, planned initiatives, marketing or advertising expenses

or costs and expenses.

The failure to obtain necessary additional capital or financing on favorable terms, if at all, could have

a material adverse effect on our business, results of operations or financial condition.

we may need to reduce, defer or cancel application development programs, planned initiatives, marketing or advertising expenses or costs

and expenses.

The failure to obtain necessary additional capital or financing on favorable terms, if at all, could have a material adverse

effect on our business, results of operations or financial condition.

the distribution of our products through application stores increases, we may incur additional fees from the developers of application

the user base of our consumer applications continues to shift to mobile solutions, we increasingly rely on the Apple iOS and Google Android

platforms to distribute our products.

While our products are free to download from these stores, we offer our users the opportunity to

purchase paid memberships and certain premium features through our products.

We determine the prices at which these memberships and features

are sold and, in exchange for facilitating the purchase of these memberships and features through our products to users who download

our products from these stores, we pay Apple or Google, as applicable, a share, which is currently up to 30% of the revenue we receive

from these transactions.

In the future, other distribution platforms that we utilize may charge us fees for the distribution of our applications.

If the distribution of our products through application stores increases, the amount of fees that we must pay to the developers of these

application stores will also increase.

Unless we find a way to offset these fees, our business, financial condition and results of operations

could be adversely affected.

may make or attempt to make acquisitions in the future, which could require significant management attention, disrupt our business, dilute

our stockholders and seriously harm our business.

part of our business strategy, we have made and intend to make acquisitions to add specialized employees and complementary companies,

products and technologies.

In the future, we may not be able to find other suitable acquisition candidates, and we may not be able to

complete acquisitions on favorable terms, if at all.

Our previous and future acquisitions may not achieve our goals, and any future acquisitions

we complete could be viewed negatively by users, advertisers or investors.

In addition, if we fail to successfully close transactions

or integrate new teams, or integrate the products and technologies associated with these acquisitions into our company, our business

could be seriously harmed.

Any integration process may require significant time and resources, and we may not be able to manage the process

successfully.

We may not successfully evaluate or use the acquired products, technology and personnel, or accurately forecast the financial

impact of an acquisition transaction, including accounting charges.

We may also incur unanticipated liabilities that we assume as a result

of acquiring companies.

We may have to pay cash, incur debt or issue equity securities to pay for any acquisition, any of which could

negatively impact our business and financial condition.

Issuing equity to finance any such acquisitions would also dilute our existing

stockholders.

Incurring debt would increase our fixed obligations and could also include covenants or other restrictions that would impede

our ability to manage our operations.

may conduct a portion of our operations through informal relationships, partnerships, strategic alliances or joint ventures, and our

failure to continue such relationships or resolve any material disagreements with these third parties could have a material adverse effect

on the success of these operations, our financial condition and our results of operations.

may conduct a portion of our operations through partnerships, strategic alliances or joint ventures.

For instance, at the end of 2019,

we launched our consumer application platform strategy, under which we plan to co-brand our video chat applications and promote them

in partnership with third-party communities, with the expectation of entering into revenue sharing arrangements with potential partners.

may depend on third parties for elements of these arrangements that are important to the success of the relationship, such as the development

of features or technologies to be incorporated into our applications.

The performance of these third-party obligations or the ability

of third parties to meet their obligations under these arrangements would be outside of our control.

If these third parties do not meet

or satisfy their obligations under these arrangements, the performance and success of these arrangements, and their value to us, would

be adversely affected.

If our current or future partners are unable to meet their obligations, we may be forced to undertake the obligations

ourselves and/or incur additional expenses in order to have some other party perform such obligations.

In such cases we may also be required

to seek legal enforcement of our rights, the outcome of which would be uncertain.

If any of these events occur, they may adversely impact

us, our financial performance and results of operations, and/or adversely impact our ability to enter into similar relationships in the

arrangements with third parties could involve risks not otherwise present when we directly manage our operations, including, for example:

parties may share certain approval rights over major decisions within the scope of the relationship;

possibility that these third parties might become insolvent or bankrupt;

possibility that we may incur liabilities as a result of an action taken by one of these

third parties;

third parties may be in a position to take action contrary to our instructions or requests

or contrary to our policies or objectives;

between us and these third parties may result in litigation or arbitration that would increase

our expenses, delay or terminate projects and prevent our officers and directors from focusing

their time and effort on our business.

Related to Our Ownership of Cryptocurrencies

are subject to risks related to holding and distributing cryptocurrencies.

the past, we have accepted cryptocurrencies as compensation for our services.

Cryptocurrencies are not considered legal tender

or backed by any government and have experienced price volatility, technological glitches and various law enforcement and regulatory

interventions.

The use of cryptocurrency, such as bitcoin, has been prohibited or effectively prohibited in some countries.

we fail to comply with prohibitions applicable to us, we could face regulatory or other enforcement actions and potential fines

and other consequences.

part of our strategy of forming strategic alliances with cryptocurrencies companies, we may make limited investments in initial

digital coin or token offerings and have received cryptocurrency tokens as compensation for services.

For instance, in 2020, we

launched our partnership with YouNow in the Props Developer Network, which, now that regulatory approval has been obtained, enables

us to distribute YouNow’s cryptographic props tokens (“Props tokens”) to our application end users for anticipated

loyalty and retention benefits.

Because we receive Props tokens from YouNow to be distributed to users, we are deemed to be a

statutory underwriter under Section 2(a)(11) of the Securities Act.

A statutory underwriter is subject to the prospectus delivery

and liability provisions of the Securities Act, Regulation M, and may be deemed to be conducting broker-dealer like activities

that could in certain circumstances subject us to regulatory obligations.

is possible that the SEC or another regulator could conclude that our distribution of Props tokens could constitute broker-dealer

If so, we could be forced to register as a broker-dealer and comply with laws and regulations applicable to broker-dealers,

which would disrupt our business substantially and make it prohibitive to operate and participate on the Props Developer Network.

In such circumstance, we may also become the target of regulatory enforcement for conducting unlicensed broker-dealer activities,

which could lead to costly litigation and otherwise materially adversely impact our business.

is substantial uncertainty regarding the future legal and regulatory requirements relating to cryptocurrency or transactions utilizing

cryptocurrency.

For instance, governments may in the near future curtail or outlaw the acquisition, use or redemption of cryptocurrencies.

Ownership of, holding or trading in cryptocurrencies may then be considered illegal and subject to sanction.

These uncertainties,

as well as future accounting and tax developments, or other requirements relating to cryptocurrency, could have a material adverse

effect on our business.

addition, the prices of cryptocurrency tokens are typically highly volatile and subject to exchange rate risks, as well as the

risk that regulatory or other developments may adversely affect their value.

Fluctuations in the market value of digital tokens

could cause us to record an impairment charge on the value of our digital tokens, which would directly impact our balance sheet

and statements of operations.

particular, tokens may experience periods of extreme volatility due to (i) having a very limited trading history, (ii) limited

public supply, (iii) a lack of adoption by cryptocurrency holders, including a lack of adoption of cryptocurrencies generally

due to the expense of mining cryptocurrencies and (iv) tokens trading on a limited number of cryptocurrency exchanges, all of

which have limited operating histories.

Speculators and investors who seek to profit from trading and holding tokens currently

account for a significant portion of token demand.

Such speculation regarding the potential future appreciation in the value of

tokens may artificially inflate their price.

Fluctuations in the value of our tokens or any other cryptocurrencies that we hold

may also lead to fluctuations in the value of our common stock.

In addition, because of the limited trading volumes in tokens

on cryptocurrency exchanges, converting our holdings to fiat currency would likely take an extended period of time.

there are no regulated trading markets for cryptocurrency tokens, and therefore our ability to sell such tokens may be limited.

of the date of this report, the online trading platforms on which cryptocurrency tokens trade do not qualify as registered exchanges

within the meaning of federal securities laws or regulated alternative trading systems.

To the extent the tokens trading on these

platforms meet the definition of a security under federal securities laws, the platform is generally required to register with

the SEC as a national securities exchange or be exempt from such registration requirements.

The failure of these platforms to

register as national securities exchanges or properly comply with registration exemptions could result in the SEC bringing an

enforcement action seeking to prohibit, suspend or limit their operations.

In such event, the tokens we hold may be tradable on

a very limited range of venues, or not at all, and there may be periods where trading activity in tokens that we hold is minimal

or non-existent.

These potential consequences could have a material adverse impact on the trading price of the tokens that we

hold and could render the exchange of our tokens for other digital assets or fiat currency difficult or impossible.

tokens and other cryptocurrencies that we hold may be subject to loss, theft or restriction on access.

is a risk that some or all of our cryptocurrencies could be lost or stolen.

Access to our coins could also be restricted by cybercrime.

We currently hold all of our cryptocurrencies in cold storage.

Cold storage refers to any cryptocurrency wallet that is not connected

to the internet.

Cold storage is generally more secure but is not ideal for quick or regular transactions.

We expect to continue

to hold the majority of our cryptocurrencies in cold storage to reduce the risk of malfeasance, but this risk cannot be eliminated.

or malicious actors may launch attacks to steal, compromise or secure cryptocurrencies, such as by attacking the cryptocurrency

network source code, exchange servers, third party platforms, cold and hot storage locations or software, or by other means.

we increase in size, we may become a more appealing target of hackers, malware, cyber-attacks or other security threats.

these events may adversely affect our operations and, consequently, our investments and profitability.

The loss or destruction

of a private key required to access our digital wallets may be irreversible and we may be denied access for all time to our cryptocurrency

holdings or the holdings of others.

Our loss of access to our private keys or our experience of a data loss relating to our digital

wallets could adversely affect our investments and assets.

Cryptocurrencies

are controllable only by the possessor of both the unique public and private keys relating to the local or online digital wallet

in which they are held, which wallet’s public key or address is reflected in the network’s public blockchain.

publish the public key relating to digital wallets in use when we verify the receipt of transfers and disseminate such information

into the network, but we will need to safeguard the private keys relating to such digital wallets.

To the extent such private

keys are lost, destroyed or otherwise compromised, we will be unable to access our cryptocurrency coins and such private keys

may not be capable of being restored by any network.

Any loss of private keys relating to digital wallets used to store our cryptocurrencies

could have a material adverse effect on our business, prospects or operations and the value of any cryptocurrencies we hold for

our own account.

there has been limited precedent set for financial accounting of cryptocurrencies and other digital assets, the determination

that we have made for how to account for our tokens and any other digital assets we may acquire may be subject to change.

there has been limited precedent set for the accounting classification and measurement of cryptocurrency and other digital tokens

and related revenue recognition, it is unclear how companies may in the future be required to account for digital asset transactions

and assets and related revenue recognition.

We are currently accounting for our tokens as indefinite-lived intangible assets in

accordance with Accounting Standard Codification No.

Intangibles—Goodwill and Other .

Indefinite-lived intangible

assets are recorded at cost and are not subject to amortization, but shall be tested for impairment annually and more frequently

if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

Our management has

exercised significant judgment in determining the appropriate accounting treatment, and in the event that authoritative guidance

is enacted by the Financial Accounting Standards Board, we may be required to change our policies or restate our financial statements,

which could have an effect on our consolidated financial position and results from operations.

Such a restatement or change in

policies could adversely affect the accounting for our tokens or other cryptocurrencies that we may acquire and may more generally

negatively impact our business, prospects, financial condition and results of operation.

there has been limited precedent set for financial accounting of cryptocurrencies and other digital assets, the determination that we

have made for how to account for our tokens and any other digital assets we may acquire may be subject to change.

there has been limited precedent set for the accounting classification and measurement of cryptocurrency and other digital tokens and

related revenue recognition, it is unclear how companies may in the future be required to account for digital asset transactions and

assets and related revenue recognition.

We are currently accounting for our tokens as indefinite-lived intangible assets in accordance

with Accounting Standard Codification No.

Intangibles—Goodwill and Other .

Indefinite-lived intangible assets are recorded

at cost and are not subject to amortization, but shall be tested for impairment annually and more frequently if events or changes in

circumstances indicate that it is more likely than not that the asset is impaired.

Our management has exercised significant judgment

in determining the appropriate accounting treatment, and in the event that authoritative guidance is enacted by the Financial Accounting

Standards Board, we may be required to change our policies or restate our financial statements, which could have an effect on our consolidated

financial position and results from operations.

Such a restatement or change in policies could adversely affect the accounting for our

tokens or other cryptocurrencies that we may acquire and may more generally negatively impact our business, prospects, financial condition

and results of operation.

and Regulatory Risks

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may be sued for defamation, civil rights infringement, negligence, copyright or trademark infringement, invasion of privacy, personal

injury, product liability or under other legal theories relating to information that is published or made available on our websites

or applications.

injury, product liability or under other legal theories relating to information that is published or made available on our websites or

applications.

These types of claims have been brought, sometimes successfully, against online services in the past.

offer messaging services on our applications and we send emails directly and through third parties to our users, which may subject

us to potential risks, such as liabilities or claims resulting from unsolicited email or spamming, lost or misdirected messages,

security breaches, illegal or fraudulent use of email or personal information or interruptions or delays in email service.

insurance does not specifically provide for coverage of these types of claims and, therefore, may be inadequate to protect us

against them.

In addition, we could incur significant costs in investigating and defending such claims, even if we ultimately

are not held liable.

If any of these events occur, our revenue could be materially adversely affected or we could incur significant

additional expense, and the market price of our securities may decline.

there are changes in laws or regulations regarding privacy and the protection of user data, or if we fail to comply with such

laws or regulations, we may face claims brought against us by regulators or users that could adversely affect our business, results

of operations or financial condition.

federal and international laws and regulations govern the collection, use, retention, sharing and security of data that we receive

from and about our users.

These laws can be particularly restrictive in certain states and in countries outside of the United

In addition, the application and interpretation of these laws and regulations are often uncertain, particularly in the

new and rapidly evolving industries in which we operate.

failure, or perceived failure, by us to comply with such laws and regulations, including Federal Trade Commission requirements

or industry self-regulatory principles, could result in proceedings or actions against us by governmental entities or others,

which could potentially have an adverse effect on our business.

As a result of such a failure, or perceived failure, we may be

subject to a claim or class-action lawsuit regarding our online services.

The successful assertion of a claim against us, or a

regulatory action against us, could result in significant monetary damages, diversion of management resources and require us to

make significant payments and incur substantial legal expenses.

Any claims with respect to violation of privacy or misappropriation

of user data brought against us may have a material adverse effect on our business, results of operations and financial condition.

proposals are pending before federal, state, and foreign legislative and regulatory bodies or have recently been enacted that

could significantly affect our business.

For example, the California legislature enacted the CCPA, which became effective on January

1, 2020, and the CPRA, which expands upon the CCPA and was passed in the recent California election in November 2020.

the New York legislature enacted the New York Stop Hacks and Improve Electronic Data Security (SHIELD) Act, which went into effect

on March 21, 2020.

Further, the GDPR, which applies to the European Economic Area and went into effect on May 25, 2018, required

us to change our policies and procedures regarding the handling of personal and sensitive data in the European Economic Area.

The failure to comply with the GDPR could, in certain instances, result in penalties of up to 4% of our worldwide revenues.

failure, or perceived failure to comply with the GDPR or other state, federal or international laws could seriously harm our business.

privacy concerns may result in new or amended laws and regulations.

Future laws and regulations with respect to the collection,

compilation, use and publication of information and consumer privacy could result in limitations on our operations, increased

compliance or litigation expense, adverse publicity or loss of revenue, which any of which could have a material adverse effect

on our business, financial condition and results of operations.

It is also possible that we could be prohibited from collecting

or disseminating certain types of data, which could affect our ability to meet our users’

Changes in laws or regulations, including

laws and regulations that impact the use of the internet, such as internet neutrality laws, or laws that relate to content provided

over the internet or monitoring such content, could adversely affect our business, results of operations or financial condition.

adoption of any laws or regulations that adversely affect the growth or use of the internet, including laws governing internet

neutrality, could decrease the demand for our products and increase our cost of doing business.

In January 2018, the Federal Communications

Commission (the “FCC”) released an order that repealed the “open internet rules,”

often known as “net

neutrality,”

which prohibit internet providers in the United States from impeding access to most content, or otherwise unfairly

discriminating against content providers like us.

These rules also prohibited mobile providers from entering into arrangements

with specific content providers for faster or better access over their data networks.

The FCC order repealing the open internet

rules went into effect in June 2018.

In response to this decision, California and a number of states implemented their own net

neutrality rules which largely mirrored the repealed federal regulations.

Department of Justice (“DOJ”) has

filed suit to bar implementation of these state laws and their application remains uncertain.

For instance, on February 8, 2021,

the DOJ voluntarily dismissed its suit against California’s net neutrality bill.

We cannot predict the outcome of similar

litigation or whether the FCC order or state initiatives regulating providers will be modified, overturned, or vacated by other

legal action, federal legislation, or the FCC, or the degree to which this repeal would adversely affect our business, if at all.

We also offer messaging

services on our applications and we send emails directly and through third parties to our users, which may subject us to potential risks,

such as liabilities or claims resulting from unsolicited email or spamming, lost or misdirected messages, security breaches, illegal

or fraudulent use of email or personal information or interruptions or delays in email service.

Our insurance does not specifically provide

for coverage of these types of claims and, therefore, may be inadequate to protect us against them.

In addition, we could incur significant

costs in investigating and defending such claims, even if we ultimately are not held liable.

If any of these events occur, our revenue

could be materially adversely affected or we could incur significant additional expense, and the market price of our securities may decline.

in laws or regulations, including laws and regulations that impact the use of the internet, such as internet neutrality laws, or laws

that relate to content provided over the internet or monitoring such content, could adversely affect our business, results of operations

or financial condition.

adoption of any laws or regulations that adversely affect the growth or use of the internet, including laws governing internet neutrality,

could decrease the demand for our products and increase our cost of doing business.

In January 2018, the Federal Communications Commission

(the “FCC”) released an order that repealed the “open internet rules,” often known as “net neutrality,”

which prohibit internet providers in the United States from impeding access to most content, or otherwise unfairly discriminating against

content providers like us.

These rules also prohibited mobile providers from entering into arrangements with specific content providers

for faster or better access over their data networks.

The FCC order repealing the open internet rules went into effect in June 2018.

In response to this decision, California and a number of states implemented their own net neutrality rules which largely mirrored the

repealed federal regulations.

Department of Justice (“DOJ”) has filed suit to bar implementation of these state

laws and their application remains uncertain.

For instance, on February 8, 2021, the DOJ voluntarily dismissed its suit against California’s

net neutrality bill.

We cannot predict the outcome of similar litigation or whether the FCC order or state initiatives regulating providers

will be modified, overturned, or vacated by other legal action, federal legislation, or the FCC, or the degree to which this repeal would

adversely affect our business, if at all.

The European Union similarly requires equal access to internet content.

If the FCC, Congress, the European Union or courts modify

these open internet rules, mobile providers may be able to limit our users’

ability to access our applications or make our

applications a less attractive alternative to our competitors’

applications, which could materially adversely affect our

business, results of operations and financial condition.

addition, it is possible that a number of additional laws and regulations may be adopted or construed to apply to us, including

gambling laws.

Some of the video card games that we offer on our Paltalk application are based upon traditional casino games,

such as poker and blackjack.

We have structured and operate these games and features with gambling laws in mind and believe that

these games and features do not constitute gambling.

Our games are offered for entertainment purposes only and do not offer an

opportunity to win real money.

However, our video card games could in the future become subject to gambling-related laws and regulations

and expose us to civil and criminal penalties.

If were to become subject to such laws and regulations, we might be required to

seek licenses, authorizations or approvals from relevant regulators, the granting of which may be dependent on us meeting certain

capital and other requirements, and we may be subject to additional regulation and oversight, such as reporting to regulators,

all of which could significantly increase our operating costs.

Changes in current laws or regulations or the imposition of new

laws and regulations in the United States, Europe or elsewhere regarding these activities may lessen the growth of video card

game services and impair our business.

If the FCC, Congress,

the European Union or courts modify these open internet rules, mobile providers may be able to limit our users’ ability to access

our applications or make our applications a less attractive alternative to our competitors’ applications, which could materially

adversely affect our business, results of operations and financial condition.

addition, it is possible that a number of additional laws and regulations may be adopted or construed to apply to us, including gambling

Some of the video card games that we offer on our Paltalk application are based upon traditional casino games, such as poker and

We have structured and operate these games and features with gambling laws in mind and believe that these games and features

do not constitute gambling.

Our games are offered for entertainment purposes only and do not offer an opportunity to win real money.

However, our video card games could in the future become subject to gambling-related laws and regulations and expose us to civil and

criminal penalties.

If were to become subject to such laws and regulations, we might be required to seek licenses, authorizations or

approvals from relevant regulators, the granting of which may be dependent on us meeting certain capital and other requirements, and

we may be subject to additional regulation and oversight, such as reporting to regulators, all of which could significantly increase

our operating costs.

Changes in current laws or regulations or the imposition of new laws and regulations in the United States, Europe

or elsewhere regarding these activities may lessen the growth of video card game services and impair our business.

there are changes in laws or regulations regarding privacy and the protection of user data, or if we fail to comply with such laws or

regulations, we may face claims brought against us by regulators or users that could adversely affect our business, results of operations

or financial condition.

federal and international laws and regulations govern the collection, use, retention, sharing and security of data that we receive from

and about our users.

These laws can be particularly restrictive in certain states and in countries outside of the United States.

the application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industries

in which we operate.

failure, or perceived failure, by us to comply with such laws and regulations, including Federal Trade Commission requirements or industry

self-regulatory principles, could result in proceedings or actions against us by governmental entities or others, which could potentially

have an adverse effect on our business.

As a result of such a failure, or perceived failure, we may be subject to a claim or class-action

lawsuit regarding our online services.

The successful assertion of a claim against us, or a regulatory action against us, could result

in significant monetary damages, diversion of management resources and require us to make significant payments and incur substantial

legal expenses.

Any claims with respect to violation of privacy or misappropriation of user data brought against us may have a material

adverse effect on our business, results of operations and financial condition.

proposals are pending before federal, state, and foreign legislative and regulatory bodies or have recently been enacted that could significantly

affect our business.

For example, the California legislature enacted the CCPA, which became effective on January 1, 2020, and the CPRA,

which expands upon the CCPA and was passed in the recent California election in November 2020.

Likewise, the New York legislature enacted

the New York Stop Hacks and Improve Electronic Data Security (SHIELD) Act, which went into effect on March 21, 2020.

Further, the GDPR,

which applies to the European Economic Area and went into effect on May 25, 2018, required us to change our policies and procedures regarding

the handling of personal and sensitive data in the European Economic Area.

The failure to comply with the GDPR could, in certain instances,

result in penalties of up to 4% of our worldwide revenues.

Any failure, or perceived failure to comply with the GDPR or other state,

federal or international laws could seriously harm our business.

privacy concerns may result in new or amended laws and regulations.

Future laws and regulations with respect to the collection, compilation,

use and publication of information and consumer privacy could result in limitations on our operations, increased compliance or litigation

expense, adverse publicity or loss of revenue, which any of which could have a material adverse effect on our business, financial condition

and results of operations.

It is also possible that we could be prohibited from collecting or disseminating certain types of data, which

could affect our ability to meet our users’ needs.

Related to Our Intellectual Property

may not be effective in protecting our internet domain names.

currently hold various internet domain names related to our brands and in the future may acquire new internet domain names.

regulation of domain names in the United States and in foreign countries is subject to change.

Governing bodies may establish

additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names.

a result, we may be unable to acquire or maintain relevant domain names in all countries in which we conduct business.

the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear.

We may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease

the value of our existing trademarks and other proprietary rights or those we may seek to acquire.

Any such inability to protect

ourselves could cause us to lose a significant portion of our members and paying subscribers to our competitors.

we are unable to protect our intellectual property rights, we may be unable to compete with competitors developing similar technologies.

Historically,

our defense of our intellectual property rights has been a significant aspect of our business and has meaningfully contributed

to our results of operations.

Accordingly, our success and ability to compete are often dependent upon the development of intellectual

property for our applications.

our defense of our intellectual property rights has been a significant aspect of our business and has meaningfully contributed to our

results of operations.

Accordingly, our success and ability to compete are often dependent upon the development of intellectual property

for our applications.

aim to protect our confidential proprietary information, in part, by entering into confidentiality agreements and invention assignment

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information, or technology.

We also rely on trademark, copyright, patent, trade secret, and domain-name-protection laws to protect

our proprietary rights.

In the United States and internationally, we have filed various applications to protect aspects of our

intellectual property, and we currently hold a number of issued patents in multiple jurisdictions.

In the future we may acquire

additional patents or patent portfolios, which could require significant cash expenditures.

However, third parties may knowingly

or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held by us, and pending and future

trademark and patent applications may not be approved.

In addition, effective intellectual property protection may not be available

in every country in which we operate or intend to operate our business.

We also rely on trademark, copyright, patent, trade secret, and domain-name-protection laws to protect our

proprietary rights.

We have filed various applications to protect aspects of our intellectual property, and we currently hold a number

of issued patents.

In the future we may acquire additional patents or patent portfolios, which could require significant cash expenditures.

However, third parties may knowingly or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held

by us, and pending and future trademark and patent applications may not be approved.

In addition, effective intellectual property protection

may not be available in every country in which we operate or intend to operate our business.

any of these cases, we may be required to expend significant time and expense to prevent infringement or to enforce our rights.

Although we have taken measures to protect our proprietary rights, others may offer products or concepts that are substantially

similar to ours and compete with our business.

If we are unable to protect our proprietary rights or prevent unauthorized use

or appropriation by third parties, the value of our brand and other intangible assets may be diminished, and competitors may be

able to more effectively mimic our service and methods of operations.

we have taken measures to protect our proprietary rights, others may offer products or concepts that are substantially similar to ours

and compete with our business.

If we are unable to protect our proprietary rights or prevent unauthorized use or appropriation by third

parties, the value of our brand and other intangible assets may be diminished, and competitors may be able to more effectively mimic

our service and methods of operations.

Any of these events could seriously harm our business.

we are subject to intellectual property infringement claims, it could cause us to incur significant expenses, pay substantial

damages or royalties and prevent us from offering our applications.

we are subject to intellectual property infringement claims, it could cause us to incur significant expenses, pay substantial damages

or royalties and prevent us from offering our applications.

time to time, third parties may claim that our applications infringe or violate their intellectual property rights.

of infringement could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay

substantial damages and prevent us from using licensed technology that may be fundamental to our applications.

Even if we were

to prevail, any litigation regarding intellectual property could be costly and time-consuming and divert the attention of our

management and key personnel from our business operations.

We maintain insurance to protect against intellectual property infringement

claims and resulting litigation, but such insurance may not cover or may not be sufficient to cover all potential claims, liability

We may also be obligated to indemnify our business partners in any such litigation, which could further exhaust our

Furthermore, as a result of an intellectual property challenge, we may be prevented from offering our applications

unless we enter into royalty, license or other agreements.

We may not be able to obtain such agreements at all or on terms acceptable

to us, and as a result, we may be precluded from offering our applications and services.

Any claims of infringement

could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages

and prevent us from using licensed technology that may be fundamental to our applications.

Even if we were to prevail, any litigation

regarding intellectual property could be costly and time-consuming and divert the attention of our management and key personnel from

our business operations.

We maintain insurance to protect against intellectual property infringement claims and resulting litigation,

but such insurance may not cover or may not be sufficient to cover all potential claims, liability or expenses.

We may also be obligated

to indemnify our business partners in any such litigation, which could further exhaust our resources.

Furthermore, as a result of an

intellectual property challenge, we may be prevented from offering our applications unless we enter into royalty, license or other agreements.

We may not be able to obtain such agreements at all or on terms acceptable to us, and as a result, we may be precluded from offering

our applications and services.

Related to Ownership of Our Common Stock

results of operations are volatile and difficult to predict, and our stock price may decline if we fail to meet the expectations

of stockholders.

revenue and results of operations could vary significantly from period-to-period and year-to-year and may fail to match our past

performance because of a variety of factors, many of which are outside of our control.

Any of these events could cause the market

price of our common stock to fluctuate.

common stock is historically thinly traded, stockholders may be unable to sell at or near ask prices or at all and the price of our common

stock may be volatile.

Historically,

shares of our common stock were thinly-traded on the OTCQB and have usually been thinly-traded following our uplist to The Nasdaq Capital

Market (“Nasdaq”), meaning that the number of persons interested in purchasing our common stock at or near ask prices at

any given time may be relatively small or non-existent.

This situation is attributable to a number of factors, including the fact that

we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment

community that generate or influence sales volume.

As a consequence, there may be periods of several days or more when trading activity

in our shares is minimal or non-existent, as compared to a seasoned issuer that has a large and steady volume of trading activity that

will generally support continuous sales without an adverse effect on stock price.

during certain periods we have received, and may continue to receive, a high degree of media coverage that is published or otherwise

disseminated by third parties, including blogs, articles, message boards and social and other media.

This may include coverage that is

not attributable to statements made by the Company or our Board of Directors.

Information provided by third parties may not be reliable

or accurate and could materially impact the trading price of our common stock which could cause stockholders to lose their investments.

market prices and trading volume of our common stock have recently experienced, and may continue to experience, extreme volatility, which

could cause purchasers of our common stock to incur substantial losses.

For example, during 2021, the market price of our common stock

fluctuated from an intra-day low of $1.48 per share on January 4, 2021 to an intra-day high on Nasdaq of $15.20 on September 29, 2021.

The last reported sale price of our common stock on Nasdaq on December 31, 2021 was $2.84 per share.

From June 2021 to September 2021,

daily trading volume ranged from approximately 100 to 133,244,100 shares.

We believe that the recent volatility and our current market

prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know

if these dynamics will continue.

our common stock is now listed for trading on Nasdaq, a broader or more active public trading market for our common stock may not develop

or be sustained, and the current trading level of our common stock may not be sustained.

Due to these conditions, you may be unable to

sell your common stock at or near ask prices or at all if you desire to sell shares of common stock.

stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual

These broad market fluctuations may also adversely affect the trading price of our common stock, especially in light of the

COVID-19 pandemic.

In the past, following periods of volatility in the market price of a company’s securities, stockholders have

often instituted class action securities litigation against those companies.

Such litigation, if instituted, could result in substantial

costs and diversion of management attention and resources, which could significantly harm our profitability and reputation.

of the limited trading market for our common stock, and because of the possible price volatility, you may not be able to sell your shares

of common stock when you desire to do so.

The inability to sell your shares in a rapidly declining market may substantially increase

your risk of loss because of such illiquidity and because the price for our common stock may suffer greater declines because of its price

ownership of our common stock is significantly concentrated in a small number of investors, some of whom are affiliated with our Board

of Directors and management, which could prevent stockholders from having input on the course of our operations or otherwise lead to

actual or potential conflicts of interest.

As of March 21, 2022, Jason Katz, our Chairman of the Board of Directors,

Chief Executive Officer, Chief Operating Officer and President, beneficially owned approximately 7.1% of our outstanding common stock,

including shares of common stock held directly by Mr.

Katz’s spouse, and The J.

Crew Delaware Trust A, a trust formed by Mr.

for the benefit of certain of his family members, also beneficially owned approximately 24.0% of our outstanding common stock as of March

Katz is not a beneficiary of the trust and does not hold voting or dispositive power over the shares held by the trust.

Crew Delaware Trust A and others that have significant beneficial ownership of our common shares have substantial influence

regarding matters submitted for stockholder approval, including proposals regarding:

merger, consolidation or sale of all or substantially all of our assets;

election of members of our Board of Directors;

amendment to our Certificate of Incorporation, as amended (the “Certificate of Incorporation”).

current or increased ownership position of any of these stockholders and/or their respective affiliates could delay, deter or prevent

a change of control or adversely affect the price that investors might be willing to pay in the future for our common shares.

the interests of these stockholders and/or their respective affiliates may significantly differ from the interests of our other stockholders

and they may vote the common shares they beneficially own in ways with which our other stockholders disagree.

we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial

results or prevent fraud and our business may be harmed and our stock price may be adversely impacted.

internal controls over financial reporting are necessary for us to provide reliable financial reports and to effectively prevent fraud.

Any inability to provide reliable financial reports or to prevent fraud could harm our business.

The Sarbanes-Oxley Act of 2002 (the

“Sarbanes-Oxley Act”) requires management to evaluate and assess the effectiveness of our internal control over financial

In order to continue to comply with the requirements of the Sarbanes-Oxley Act, we are required to continuously evaluate and,

where appropriate, enhance our policies, procedures and internal controls.

We have in the past failed, and may in the future fail, to

maintain the adequacy of our internal controls over financial reporting.

Such failure could subject us to litigation or regulatory scrutiny

and investors could lose confidence in the accuracy and completeness of our financial reports.

We cannot provide any assurance that in

the future we will be able to fully comply with the requirements of the Sarbanes-Oxley Act or that management will conclude that our

internal control over financial reporting is effective.

If we fail to fully comply with the requirements of the Sarbanes-Oxley Act, our

business may be harmed and our stock price may decline.

results of operations are volatile and difficult to predict, and our stock price may decline if we fail to meet the expectations of stockholders.

revenue and results of operations could vary significantly from period-to-period and year-to-year and may fail to match our past performance

because of a variety of factors, many of which are outside of our control.

Any of these events could cause the market price of our common

stock to fluctuate.

Factors that may contribute to the variability of our results of operations include:

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● announcements

by us or our competitors of significant contracts, acquisitions, strategic partnerships

or capital commitments;

by us or our competitors of significant contracts, acquisitions, strategic partnerships or

capital commitments;

acceptance of our new applications and enhancements to our existing applications;

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and other software engineers;

market conditions, including market volatility.

the rapidly evolving industry in which we operate, our historical results of operations may not be useful in predicting our future

results of operations.

In addition, metrics available from third parties regarding our industry and the performance of our applications

may not be indicative of our future financial performance.

Our common stock is usually thinly traded,

stockholders may be unable to sell at or near ask prices or at all and the price of our common stock may be volatile.

shares of our common stock have usually been thinly-traded on the OTCQB Marketplace (the “OTCQB”), meaning that the

number of persons interested in purchasing our common stock at or near ask prices at any given time may be relatively small or

non-existent.

This situation is attributable to a number of factors, including the fact that we are a small company that is relatively

unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence

sales volume.

As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or

non-existent, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally support

continuous sales without an adverse effect on stock price.

In addition, we may experience unusual or infrequent trading events

that cause the price of our common stock to fluctuate wildly.

For example, the closing price of our common stock ranged from $0.63

per share to $1.75 per share for the period from January 1, 2020 to December 31, 2020.

broader or more active public trading market for our common stock may not develop or be sustained, and the current trading level

of our common stock may not be sustained.

Due to these conditions, you may be unable to sell your common stock at or near ask

prices or at all if you desire to sell shares of common stock.

of the limited trading market for our common stock, and because of the possible price volatility, you may not be able to sell

your shares of common stock when you desire to do so.

The inability to sell your shares in a rapidly declining market may substantially

increase your risk of loss because of such illiquidity and because the price for our common stock may suffer greater declines

because of its price volatility.

ownership of our common stock is significantly concentrated in a small number of investors, some of whom are affiliated with our

Board of Directors and management, which could prevent stockholders from having input on the course of our operations or otherwise

lead to actual or potential conflicts of interest.

of March 12, 2021, Jason Katz, our Chairman of the Board of Directors, Chief Operating Officer and President, beneficially owned

approximately 10.8% of our outstanding common stock, including shares of common stock held directly by Mr.

Katz’s spouse,

Crew Delaware Trust A, a trust formed by Mr.

Katz for the benefit of certain of his family members, also beneficially

owned approximately 34.3% of our outstanding common stock as of March 19, 2021.

Katz is not a beneficiary of the trust and

does not hold voting or dispositive power over the shares held by the trust.

Crew Delaware Trust A

and others that have significant beneficial ownership of our common shares have substantial influence regarding matters

submitted for stockholder approval, including proposals regarding:

merger, consolidation or sale of all or substantially all of our assets;

election of members of our Board of Directors;

amendment to our Certificate of Incorporation, as amended (the “Certificate of

Incorporation”).

current or increased ownership position of any of these stockholders and/or their respective affiliates could delay, deter or

prevent a change of control or adversely affect the price that investors might be willing to pay in the future for our common

In addition, the interests of these stockholders and/or their respective affiliates may significantly differ from the

interests of our other stockholders and they may vote the common shares they beneficially own in ways with which our other stockholders

market conditions, including market volatility and the impact of inflation.

the rapidly evolving industry in which we operate, our historical results of operations may not be useful in predicting our future results

of operations.

In addition, metrics available from third parties regarding our industry and the performance of our applications may not

be indicative of our future financial performance.

issuance of shares upon the exercise of stock options and unvested shares of restricted common stock may cause immediate and substantial

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stock options.

The issuance of shares upon the exercise of these options may result in substantial dilution to the equity interest

and voting power of holders of our common stock.

the future, we may also issue additional shares of common stock or other securities convertible into or exchangeable for shares

of common stock.

Our Certificate of Incorporation currently authorizes us to issue up to 25,000,000 shares of common stock, of

which 6,906,454 were outstanding as of December 31, 2020, which includes 10,000,000 shares of preferred stock with such designations,

preferences and rights as determined by our Board of Directors, of which none were outstanding as of December 31, 2020.

of additional shares of our common stock may substantially dilute the ownership interests of our existing stockholders.

sales of a substantial amount of our common stock in the public market, or the perception that these sales may occur, could reduce

the market price of our common stock.

The issuance of shares upon the exercise of these options may result in substantial dilution to the equity interest and

voting power of holders of our common stock.

the future, we may also issue additional shares of common stock or other securities convertible into or exchangeable for shares of common

Our Certificate of Incorporation currently authorizes us to issue up to 25,000,000 shares of common stock, of which 9,832,157

were outstanding as of December 31, 2021, which includes 10,000,000 shares of preferred stock with such designations, preferences and

rights as determined by our Board of Directors, of which none were outstanding as of December 31, 2021.

The issuance of additional shares

of our common stock may substantially dilute the ownership interests of our existing stockholders.

Furthermore, sales of a substantial

amount of our common stock in the public market, or the perception that these sales may occur, could reduce the market price of our common

This could also impair our ability to raise additional capital through the sale of our securities.

Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain

types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’

to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or stockholders.

Certificate of Incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will

be the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of our Company, (ii) action asserting

a claim of breach of a fiduciary duty owed by any director, officer, employee, agent, or stockholder of our Company to the Company

or the Company’s stockholders, (iii) action asserting a claim against the Company or any director, officer, employee, agent,

or stockholder of the Company arising pursuant to any provision of the Delaware General Corporation Law or our Certificate of

Incorporation or our Amended and Restated By-Laws, as amended, or (iv) action asserting a claim against the Company or any director,

officer, employee, agent, or stockholder of the Company governed by the internal affairs doctrine.

Any person or entity purchasing

or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to

the provisions of our amended and restated certificate of incorporation described above.

exclusive forum provision applies to state and federal law claims, although our stockholders will not be deemed to have waived

our compliance with the federal securities laws and the rules and regulations thereunder.

In addition, this exclusive forum selection

provision will not apply to claims under the Exchange Act.

Moreover, Section 22 of the Securities Act creates concurrent jurisdiction

for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules

and regulations thereunder.

Accordingly, there is uncertainty as to whether a court would enforce our forum selection provision

as written in connection with claims arising under the Securities Act.

This choice of forum provision may limit a stockholder’s

ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other

employees, which may discourage such lawsuits against us and our directors, officers and employees.

we fail to remain current on our reporting requirements, we could be removed from the OTCQB, which would limit the ability of

broker-dealers to sell our common stock and the ability of stockholders to sell their common stock in the secondary market.

trading on the OTCQB must be reporting issuers under Section 12 of the Exchange Act and must be current in their filings under

the Exchange Act to maintain price quotation privileges on the OTCQB.

If we fail to remain current on our reporting requirements,

we could be removed from the OTCQB.

As a result, the liquidity for our common stock could be adversely affected by limiting the

ability of broker-dealers to sell our common stock and the ability of stockholders to sell their common stock in the secondary

Because we have no current plans to pay

cash dividends on our common stock for the foreseeable future, a stockholder might not receive any return on investment unless

the stockholder sold its shares of common stock for a price greater than that for which the shares were purchased.

we have no current plans to pay cash dividends on our common stock for the foreseeable future, a stockholder might not receive any return

on investment unless the stockholder sold its shares of common stock for a price greater than that for which the shares were purchased.

do not anticipate that we will declare or pay any dividends on our common stock in the foreseeable future.

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our common stock expecting to receive cash dividends.

Because we currently do not pay dividends, and there may be limited trading

in our common stock, stockholders may not have any manner to liquidate or receive any payment on their common stock.

our failure to pay dividends may cause stockholders to not see any return on their common stock even if we are successful in our

Because we currently do not pay dividends, and there may be limited trading in

our common stock, stockholders may not have any manner to liquidate or receive any payment on their common stock.

Therefore, our failure

to pay dividends may cause stockholders to not see any return on their common stock even if we are successful in our business operations.

In addition, because we do not pay dividends we may have trouble raising additional funds which could affect our ability to expand our

business operations.

In addition, because we do not pay dividends we may have trouble raising additional funds which could affect

our ability to expand our business operations.

relations activities, nominal “float”

and supply and demand factors may affect the price of our common stock.

Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types

of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable

judicial forum for disputes with us or our directors, officers, employees, or stockholders.

Certificate of Incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the

sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of our Company, (ii) action asserting a claim

of breach of a fiduciary duty owed by any director, officer, employee, agent, or stockholder of our Company to the Company or the Company’s

stockholders, (iii) action asserting a claim against the Company or any director, officer, employee, agent, or stockholder of the Company

arising pursuant to any provision of the Delaware General Corporation Law or our Certificate of Incorporation or our Amended and Restated

By-Laws, as amended, or (iv) action asserting a claim against the Company or any director, officer, employee, agent, or stockholder of

the Company governed by the internal affairs doctrine.

Any person or entity purchasing or otherwise acquiring any interest in shares

of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate

of incorporation described above.

exclusive forum provision applies to state and federal law claims, although our stockholders will not be deemed to have waived our compliance

with the federal securities laws and the rules and regulations thereunder.

In addition, this exclusive forum selection provision will

not apply to claims under the Exchange Act.

Moreover, Section 22 of the Securities Act creates concurrent jurisdiction for federal and

state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

Accordingly, there is uncertainty as to whether a court would enforce our forum selection provision as written in connection with claims

arising under the Securities Act.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial

forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits

against us and our directors, officers and employees.

relations activities, nominal “float” and supply and demand factors may affect the price of our common stock.

have engaged an investor relations firm to create investor awareness for our Company.

These campaigns may include non-deal road

shows and personal, video and telephone conferences with investors and prospective investors in which our business and business

practices are described.

We provide compensation to our investor relations firm, and may in the future provide compensation to

additional investor relations firms or financial advisory firms, for these services, and pay for newsletters, websites, mailings

and email campaigns that are produced by third parties based upon publicly available information concerning us.

We do not intend

to review or approve of the content of such analyst reports or other writings and communications that are based upon analysts’

own research or methods.

Investor relations firms are generally required to disclose when they are compensated for their efforts

and the source of such compensation, but whether such disclosure is made or in compliance with applicable laws is not under our

In addition, our investors may, from time to time, take steps to encourage investor awareness through similar activities

that may be undertaken at the expense of such investors.

Investor awareness activities may also be suspended or discontinued,

which may impact the trading market of our common stock.

SEC and the Financial Industry Regulatory Authority enforce various statutes and regulations intended to prevent manipulative

or deceptive devices in connection with the purchase or sale of any security and carefully scrutinize trading patterns and company

news and other communications for false or misleading information, particularly in cases where the hallmarks of “pump and

activities may exist, such as rapid share price increases or decreases.

We and our stockholders may be subjected to

enhanced regulatory scrutiny due to the fact that our affiliates hold a majority of our outstanding common stock and we have a

limited number of shares of common stock that are publicly available for resale.

The limited trading markets in which our shares

of common stock may be offered or sold have often been associated with improper activities concerning penny-stocks, such as the

OTCQB or the pink sheets.

Supreme Court of the United States has stated that manipulative action is a term of art connoting intentional or willful conduct

designed to deceive or defraud investors by controlling or artificially affecting the price of securities.

Often times, manipulation

is associated by regulators with forces that upset the supply and demand factors that would normally determine trading prices.

Securities regulators have often cited thinly-traded markets, small numbers of holders and awareness campaigns as components of

their claims of price manipulation and other violations of law when combined with manipulative trading, such as wash sales, matched

orders or other manipulative trading timed to coincide with false or touting press releases.

There can be no assurance that our

activities or the activities of third parties, or the small number of potential sellers or small percentage of stock in our public

float, or determinations by purchasers or holders as to when or under what circumstances or at what prices they may be willing

to buy or sell stock, will not artificially impact (or would be claimed by regulators to have affected) the normal supply and

demand factors that determine the price of our common stock.

we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report

our financial results or prevent fraud and our business may be harmed and our stock price may be adversely impacted.

internal controls over financial reporting are necessary for us to provide reliable financial reports and to effectively prevent

Any inability to provide reliable financial reports or to prevent fraud could harm our business.

The Sarbanes-Oxley Act

of 2002 (the “Sarbanes-Oxley Act”) requires management to evaluate and assess the effectiveness of our internal control

over financial reporting.

In order to continue to comply with the requirements of the Sarbanes-Oxley Act, we are required to continuously

evaluate and, where appropriate, enhance our policies, procedures and internal controls.

We have in the past failed, and may in

the future fail, to maintain the adequacy of our internal controls over financial reporting.

Such failure could subject us to

litigation or regulatory scrutiny and investors could lose confidence in the accuracy and completeness of our financial reports.

We cannot provide any assurance that in the future we will be able to fully comply with the requirements of the Sarbanes-Oxley

Act or that management will conclude that our internal control over financial reporting is effective.

If we fail to fully comply

with the requirements of the Sarbanes-Oxley Act, our business may be harmed and our stock price may decline.

example, our assessment, testing and evaluation of the design and operating effectiveness of our internal control over financial

reporting resulted in our conclusion that as of December 31, 2020 our internal control over financial reporting was not effective,

due to the Company not having adequate controls related to changes in management within the technology that support the Company’s

financial reporting function.

While we have implemented changes and made improvements to our internal control over financial reporting

during the year ended December 31, 2020, related to general information technology controls in the area of change management in

order to remediate the material weakness identified above, our internal control over financial reporting may continue to be ineffective.

UNRESOLVED STAFF

These campaigns may include non-deal road shows

and personal, video and telephone conferences with investors and prospective investors in which our business and business practices are

We provide compensation to our investor relations firm, and may in the future provide compensation to additional investor

relations firms or financial advisory firms, for these services, and pay for newsletters, websites, mailings and email campaigns that

are produced by third parties based upon publicly available information concerning us.

We do not intend to review or approve of the content

of such analyst reports or other writings and communications that are based upon analysts’ own research or methods.

Investor relations

firms are generally required to disclose when they are compensated for their efforts and the source of such compensation, but whether

such disclosure is made or in compliance with applicable laws is not under our control.

In addition, our investors may, from time to

time, take steps to encourage investor awareness through similar activities that may be undertaken at the expense of such investors.

Investor awareness activities may also be suspended or discontinued, which may impact the trading market of our common stock.

SEC and the Financial Industry Regulatory Authority enforce various statutes and regulations intended to prevent manipulative or deceptive

devices in connection with the purchase or sale of any security and carefully scrutinize trading patterns and company news and other

communications for false or misleading information, particularly in cases where the hallmarks of “pump and dump” activities

may exist, such as rapid share price increases or decreases.

We and our stockholders may be subjected to enhanced regulatory scrutiny

due to the fact that our affiliates hold a majority of our outstanding common stock and we have a limited number of shares of common

stock that are publicly available for resale.

Supreme Court of the United States has stated that manipulative action is a term of art connoting intentional or willful conduct designed

to deceive or defraud investors by controlling or artificially affecting the price of securities.

Often times, manipulation is associated

by regulators with forces that upset the supply and demand factors that would normally determine trading prices.

Securities regulators

have often cited thinly-traded markets, small numbers of holders and awareness campaigns as components of their claims of price manipulation

and other violations of law when combined with manipulative trading, such as wash sales, matched orders or other manipulative trading

timed to coincide with false or touting press releases.

There can be no assurance that our activities or the activities of third parties,

or the small number of potential sellers or small percentage of stock in our public float, or determinations by purchasers or holders

as to when or under what circumstances or at what prices they may be willing to buy or sell stock, will not artificially impact (or would

be claimed by regulators to have affected) the normal supply and demand factors that determine the price of our common stock.

we are not able to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our securities.

common stock was approved for listing on Nasdaq under the symbol “PALT” and began trading on Nasdaq on August 3, 2021.

cannot assure you that our securities will continue to be listed on Nasdaq in the future.

In order to maintain that listing, we must

satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and

independent committee requirements, minimum stockholders’ equity, minimum share price, and certain corporate governance requirements.

We may not be able to comply with the applicable listing standards and Nasdaq could delist our securities as a result.

cannot assure you that our common stock, if delisted from Nasdaq, will be listed on another national securities exchange.

If our common

stock is delisted by Nasdaq, our common stock would likely trade on the OTCQB where an investor may find it more difficult to sell our

shares or obtain accurate quotations as to the market value of our common stock.

UNRESOLVED STAFF COMMENTS

principal executive office is located at 30 Jericho Executive Plaza in Jericho, New York 11753.

2 unchanged sentences

We currently do not own any real property.

LEGAL PROCEEDINGS

our knowledge, there are no material pending legal proceedings to which we are a party or of which any of our property is the

MINE SAFETY DISCLOSURES

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors