What changed in this filing

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Item 1A. Risk Factors

2023-03-23 compared with 2022-03-23 · 1094 added, 994 removed, 29 unchanged (99% 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.

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

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.

If we are unable

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

Below 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 success of our consumer

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

We operate in an intensely

competitive industry and any failure to attract new users could diminish or suspend our development and possibly cease our operations.

The 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.

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.

The COVID-19 pandemic may adversely affect our revenues,

results of operations and financial condition.

Our business may be significantly

affected by a change in the economy, including any resulting effect on consumer or business spending.

We may be adversely affected

by the effects of inflation.

Our mobile applications

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

Our 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 active user

and paying subscriber bases.

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

Our 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.

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

business and economic risks that could seriously harm 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

through a variety of media and keeping pace with trends in consumer behavior.

● 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.

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,

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.

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,

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.

Related to Our Business

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

We plan to continue expanding our operations internationally

and may be subject to increased business and economic risks that could seriously harm our business.

Foreign governments restricting access to our applications

could materially adversely impact our business.

If 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.

Our mobile applications

rely on high-bandwidth data capabilities, which are subject to hardware, networks, regulations and standards that we do not control.

Security breaches, computer

viruses and cybersecurity incidents 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 face certain risks related to the physical and emotional

safety of users and third parties.

Our 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.

Because 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.

A portion of our revenue is dependent on third-party

resellers, the efforts of which we do not control.

Our 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

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.

We may be liable as a result of information retrieved

from or transmitted over the internet.

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.

Changes in tax laws could

materially affect our financial condition, results of operations and cash flows.

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.

If we are unable to protect our intellectual property

rights, we may be unable to compete with competitors developing similar technologies.

If 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.

Our 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.

The 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

Risks Related to Our Business

The 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

3 unchanged sentences

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:

may adopt competing products instead of ours;

may fail to introduce new products and services or improve upon our existing applications,

or those new products and services or improvements we introduce may be poorly received;

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

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

may be concerns about the privacy implications, safety or security of our products;

or other problems may frustrate the experience of our users, particularly if those problems

prevent us from delivering our products in a fast and reliable manner;

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

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.

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.

factors affecting our ability to successfully compete include:

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,

and marketing experts;

success of our customer service and support efforts;

reputation and brand strength compared to our competitors;

● competition

for acquiring users that could result in increased user acquisition costs;

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 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;

as a result of new legislation or regulation within the consumer applications industry;

● acquisitions

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 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 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.

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.

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.

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

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.

Users 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.

There are a number of factors that could negatively

impact user retention, growth and engagement, including, among other things:

users may adopt competing

products instead of ours;

we may fail to introduce

new products and services or improve upon our existing applications, or those new products and services or improvements we introduce

may be poorly received;

our products may fail to

operate effectively on mobile or other platforms;

we may be unable to combat

spam or other hostile or inappropriate usage on our products or free speech;

there may be adverse changes

in user sentiment about the quality or usefulness of our existing products;

there may be concerns about

the privacy implications, safety or security of our products;

technical or other problems

may frustrate the experience of our users, particularly if those problems prevent us from delivering our products in a fast and reliable

we may fail to provide

adequate service to our users;

we or other companies in

our industry may be the subject of adverse media reports or other negative publicity;

we may not maintain our

brand image or our reputation may be damaged;

we may be subject to denial

of service or other attacks from hackers that result in service downtime.

To 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

We operate in an intensely competitive

industry and any failure to attract new users could diminish or suspend our development and possibly cease our operations.

The 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.

Important factors affecting our ability to successfully compete include:

the usefulness, novelty,

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

the timing and market acceptance

of our consumer applications, including developments and enhancements of our competitors’ consumer applications;

our ability to effectively

monetize our consumer applications and the availability of free or cheaper alternatives from our competitors;

our ability to hire and

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

the success of our customer

service and support efforts;

our reputation and brand

strength compared to our competitors;

competition for acquiring

users that could result in increased user acquisition costs;

reliance upon the platforms

through which our consumer applications are accessed and the platform owner’s ability to control our activities on such platforms;

the effectiveness of the

marketing and advertisement of our services and consumer applications;

our ability to maintain

advertisers’ interest in advertising through our consumer applications;

our ability to innovate

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

changes as a result of

new legislation or regulation within the consumer applications industry;

acquisitions or consolidations

within the consumer applications industry.

Many 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.

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.

Certain 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.

Costs 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.

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.

The 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.

The 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 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.

In 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.

The COVID-19 pandemic may adversely affect

our revenues, results of operations and financial condition.

The 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 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.

Despite recent progress in the administration

of COVID-19 vaccines and the relaxation of governmental response measures, the 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.

Our business may be significantly affected

by a change in the economy, including any resulting effect on consumer or business spending.

Our business may be affected by changes in the

economy generally, including as a result of the COVID-19 pandemic, any resulting effect on spending by our customers, and inflation.

While some of our customers may consider our applications to be a cost-saving purchase, others may view a subscription to our applications

as a discretionary purchase, and our customers may reduce their discretionary spending on our platform during an economic downturn.

current economic conditions, including inflation, we could experience a reduction in demand and loss of customers.

Moreover, while we

continue to add paid users to our customer base, our user growth may continue to slow or decline as the impact of the COVID-19 pandemic

continues to taper, particularly in light of a potential economic downturn.

Our mobile applications are substantially

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

A 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.

We 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.

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.

The 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.

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

In addition, each of the Apple App Store and

Google Play Store provides consumers with products that compete with ours.

If either of these platforms give preferential treatment to

competitive products, it could seriously harm the usage of our products on mobile devices.

Our 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.

We 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

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.

If 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.

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’ 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 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.

We 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.

December 31, 2022, we had recorded a total of $6.3 million of goodwill and $3.6 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.

Our 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.

We 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.

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.

Our 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 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

Some 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.

In 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

Because 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.

We recognize subscription revenue from customers

monthly over the term of the subscription, and subscriptions are generally offered in one-, six- and twelve-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.

you should not rely on the amount of subscription revenue generated in prior quarters as an indication of future results.

We 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.

The 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 imposed 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

4 unchanged sentences

risks inherent in doing business internationally, including:

social, and economic instability;

related to the legal and regulatory environment in foreign jurisdictions, including with

respect to privacy, free speech and unexpected changes in laws, regulatory requirements,

and enforcement;

damage to our brand and reputation due to compliance with local laws, including potential

censorship and requirements to provide user information to local authorities;

● fluctuations

in currency exchange rates;

levels of credit risk and payment fraud;

with multiple tax jurisdictions;

protection for intellectual-property rights in some countries;

● difficulties

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;

and export restrictions and changes in trade regulation;

with statutory equity requirements;

with the U.S.

political, social, and

economic instability;

risks related to the legal

and regulatory environment in foreign jurisdictions, including with respect to privacy, free speech and unexpected changes in laws,

regulatory requirements, and enforcement;

potential damage to our

brand and reputation due to compliance with local laws, including potential censorship and requirements to provide user information

to local authorities;

fluctuations in currency

exchange rates;

higher levels of credit

risk and payment fraud;

complying with multiple

tax jurisdictions;

reduced protection for

intellectual-property rights in some countries;

difficulties in staffing

and managing global operations and the increased travel, infrastructure and compliance costs associated with multiple international

regulations that might

add difficulties in repatriating cash earned outside the United States and otherwise preventing us from freely moving cash;

import and export restrictions

and changes in trade regulation;

complying with statutory

equity requirements;

complying with the U.S.

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

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.

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.

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.

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.

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.

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

Bribery Act and similar laws in other jurisdictions;

the impact of the United

Kingdom’s exit from the European Union;

export 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.

If we are unable to expand internationally and manage the complexity

of our global operations successfully, our business could be seriously harmed.

A portion of our revenue is dependent on third-party resellers,

the efforts of which we do not control.

We 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.

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.

We 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.

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.

Foreign governments restricting access to our applications could

materially adversely impact our business.

We 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.

Our mobile applications rely on high-bandwidth

data capabilities, which are subject to hardware, networks, regulations and standards that we do not control.

Our 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.

Our 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 applications.

Historically, we have had to increase our

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

For example, during 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.

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’ 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.

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.

may need additional capital to execute our business plan.

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

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.

Any future 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.

The 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.

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;

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

and advertise our applications to attract more paying subscribers.

may be unable to obtain future capital or financing on favorable terms or at all.

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

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.

In 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.

Security breaches, computer viruses and

cybersecurity incidents could harm our business, results of operations or financial condition.

We 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.

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.

Security breaches, computer malware and cybersecurity

incidents have become more prevalent in our industry 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.

Spammers 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.

be certain that the technologies that we have developed to repel spamming attacks will be able to eliminate all spam messages from our

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.

If these activities increase, our reputation, user growth and user engagement, and operational cost structure could

be seriously harmed.

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.

As 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

increase 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 effects.

Moreover, globally there has been an

increase in cybersecurity attacks since Russia invaded Ukraine.

The risk of state-supported and geopolitical-related cyber-attacks may

increase in connection with the war in Ukraine and any related political or economic responses and counter-responses.

We may not discover

all such incidents or activity or be able to respond or otherwise address them promptly, in sufficient respects or at all.

Our 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.

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 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.

We 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.

We face certain risks related to the physical and emotional

safety of users and third parties.

We 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

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.

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

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

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

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.

These types of claims have been brought, sometimes successfully, against online services in the past.

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

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.

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.

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.

We 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:

hire and retain talented

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

effectuate our long-term

growth strategy and expand our application development programs;

market and advertise our

applications to attract more paying subscribers.

We may be unable to obtain future capital or

financing on favorable terms or at all.

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

If the distribution of our products through

application stores increases, we may incur additional fees from the developers of application stores.

As 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.

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

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.

As 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

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.

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.

We 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.

We may conduct a portion of our operations through

partnerships, strategic alliances or joint ventures and therefore we 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 future.

Strategic arrangements with third parties could involve risks not

otherwise present when we directly manage our operations, including, for example:

third parties may share

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

the possibility that these

third parties might become insolvent or bankrupt;

the possibility that we

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

these third parties may

be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives;

disputes 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.

Legal and Regulatory Risks

We may be liable as a result of information retrieved from or

transmitted over the internet.

We 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.

These types of claims have been brought,

sometimes successfully, against online services in the past.

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.

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.

The 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.

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.

In response to this decision, California

and a number of states implemented their own net neutrality rules which largely mirrored the repealed federal regulations.

of Justice (“DOJ”) has filed suit to bar implementation of these state laws and their application remains uncertain.

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,

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

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.

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.

In 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.

Changes in tax laws could materially affect

our financial condition, results of operations and cash flows.

The tax regimes we are subject to or operate

under, including income and non-income taxes, are unsettled and may be subject to significant change.

For example, the Inflation Reduction

Act (the “IRA”) was signed into law on August 16, 2022 and will become effective beginning in fiscal 2023.

The IRA imposes

a 1% excise tax on certain share repurchases occurring after December 31, 2022 (including, potentially pursuant to our Stock Repurchase

Program (as defined herein)).

We do not currently expect that the IRA will have a material impact on our income tax liability.

unable to predict what changes to the tax laws of the U.S.

and other jurisdictions may be proposed or enacted in the future or what effect

such changes would have on our business.

Any significant increase in our future effective tax rate could have a material adverse impact

on our business, financial condition, results of operations, or cash flows.

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.

State, 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.

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.

The European Union has implemented a privacy

regulation called the GDPR that imposes a high level of regulatory scrutiny on our business’ processing of personal data from the

European Economic Area, with possible financial consequences for noncompliance of up to 4% of our worldwide revenues.

The FTC regularly investigates and brings enforcement

actions against companies that have used personally identifiable information in a deceptive or unfair manner or in violation of a posted

If we are accused of violating the terms of our privacy policy, implementing unfair privacy practices or otherwise breaching

data privacy laws, we may be forced to expend significant financial and managerial resources to defend against an action by the FTC,

European Data Protection Authorities, or other state or federal enforcement agencies.

Our user database holds the personal information

of our users and subscribers residing in the United States and other countries, and we could be sued by those users if any of the information

is misused or misappropriated.

Growing public concern about privacy and the

use of personal information may subject us to increased regulatory scrutiny.

Regulations related to treatment of user data by online

services are evolving as several U.S.

state governments have recently adopted new, or modified existing, laws and regulations addressing

data privacy and the collection, processing, storage, transfer and use of data.

These state laws include, for example:

CCPA, the CPRA,

which became effective on January 1, 2023, and expands upon the CCPA, the Virginia Consumer Data Protection Act, the Colorado Privacy

Act, the Connecticut Act Concerning Personal Data Privacy and Online Monitoring, the Utah Consumer Privacy Act, and the New York SHIELD

In addition, every U.S.

state has passed laws requiring notification to users when there is a security breach resulting in unauthorized

disclosure of certain types of personal information, many of which are modeled on California’s Information Practices Act.

are a number of legislative proposals pending before the U.S.

Congress and various state legislative bodies concerning data protection

that could, if adopted, have an adverse effect on our business.

We are unable to determine if and when such legislation may be adopted.

Many other jurisdictions, including the European

Union, have adopted breach notification and other data protection notification laws designed to inform users of unauthorized disclosure

of personally identifiable information.

The introduction of new privacy and data breach laws and the interpretation of existing privacy

and data breach laws in the United States, Europe and other foreign jurisdictions is constantly evolving.

There is a risk that new laws

may be introduced or that existing laws may be applied in a way that would conflict our current data protection practices or prevent

the transfer of data between countries in which we operate.

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

expense, adverse publicity or loss of revenue, 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

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.

aim to protect our confidential proprietary information, in part, by entering into confidentiality agreements and invention assignment

agreements with all our employees, consultants, advisors and any third parties who access or contribute to our proprietary know-how,

information, or technology.

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.

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 failure, or perceived failure, by us to comply

with such laws and regulations, including FTC 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

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.

Risks Related to Our Intellectual Property

If 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.

our success and ability to compete are often dependent upon the development of intellectual property for our applications.

We aim to protect our confidential proprietary

information, in part, by entering into confidentiality agreements and invention assignment agreements with all our employees, consultants,

advisors and any third parties who access or contribute to our proprietary know-how, information, or technology.

We also rely on trademark,

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.

In 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.

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.

time to time, third parties may claim that our applications infringe or violate their intellectual property rights.

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

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.

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.

From time to time, third parties may claim that

our applications infringe or violate their intellectual property rights.

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.

Risks Related to Ownership of Our Common Stock

Our 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, stockbrokers, 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.

However, 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.

The 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.

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.

Although our common stock is 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, stockholders may be unable to sell their common stock at or

near ask prices or at all if they desire to sell shares of common stock.

The stock markets in general have experienced

substantial volatility that has often been unrelated to the operating performance of individual companies.

These broad market fluctuations

may also adversely affect the trading price of our common stock, especially in light of the macro-economic factors including rising inflation

rates, the war in Ukraine and 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.

Because of the limited trading market for our

common stock, and because of the possible price volatility, stockholders may not be able to sell their shares of common stock when you

desire to do so.

The inability to sell shares in a rapidly declining market may substantially increase the risk of loss because of such

illiquidity and because the price for our common stock may suffer greater declines because of its price volatility.

The 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 15, 2023, Jason Katz, our Chairman

of the Board of Directors, Chief Executive Officer, Chief Operating Officer and President, beneficially owned approximately 38% 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:

in expectations as to our future financial performance;

● announcements

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;

amount of advertising and marketing that is available and spent on user acquisition campaigns;

● disruptions

in the availability of our applications on third party platforms;

or perceived violations of privacy obligations and compromises of subscriber data;

entrance of new competitors in our market whether by established companies or the entrance

of new companies;

or departures of key personnel and the cost of attracting and retaining application developers

and other software engineers;

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

dilution to our existing stockholders.

of December 31, 2021, we had approximately 394,075 shares of common stock that were issuable upon the exercise of vested outstanding

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

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.

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.

Consequently, stockholders

will only realize an economic gain on their investment in our common stock if the price appreciates.

Stockholders should not purchase

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.

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.

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

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.

Crew Delaware Trust A,

a trust formed by Mr.

Katz for the benefit of certain of his family members.

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:

any merger, consolidation

or sale of all or substantially all of our assets;

the election of members

of our Board of Directors;

any amendment to our Certificate

of Incorporation, as amended (the “Certificate of Incorporation”).

The 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.

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 disagree.

If 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.

Effective 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 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

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.

Our results of operations are volatile

and difficult to predict, and our stock price may decline if we fail to meet the expectations of stockholders.

Our 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.

may contribute to the variability of our results of operations include:

changes in expectations

as to our future financial performance;

announcements by us or

our competitors of significant contracts, acquisitions, strategic partnerships or capital commitments;

market acceptance of our

new applications and enhancements to our existing applications;

the amount of advertising

and marketing that is available and spent on user acquisition campaigns;

disruptions in the availability

of our applications on third party platforms;

actual or perceived violations

of privacy obligations and compromises of subscriber data;

the entrance of new competitors

in our market whether by established companies or the entrance of new companies;

additions or departures

of key personnel and the cost of attracting and retaining application developers and other software engineers;

general market conditions,

including market volatility and the impact of inflation;

● developments in connection with our current patent litigation

or future patent litigation.

Given 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

We may be adversely affected by the effects of inflation.

Increased inflation may result in decreased demand

for our products and services, increased operating costs (including our labor costs), reduced liquidity, and limitations on our ability

to access credit or otherwise raise debt and equity capital.

In addition, the United States Federal Reserve has raised, and may continue

to raise, interest rates in response to concerns about inflation.

Increases in interest rates, especially if coupled with reduced government

spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks.

In an inflationary environment, we may be unable to raise the prices of our subscriptions at or above the rate at which our costs increase,

which could/would reduce our profit margins and have a material adverse effect on our financial results and net income.

We also may experience

lower than expected sales and potential adverse impacts on our competitive position if there is a decrease in consumer spending or a

negative reaction to our pricing.

A reduction in our revenue would be detrimental to our profitability and financial condition and could

also have an adverse impact on our future growth.

The 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.

As of December 31, 2022, we had approximately

792,055 shares of common stock that were issuable upon the exercise of vested outstanding 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.

In 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 9,864,120 were outstanding as of December 31, 2022, 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, 2022.

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 stock.

This could also impair our ability to raise additional

capital through the sale of our securities.

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 do not anticipate that we will declare or

pay any dividends on our common stock in the foreseeable future.

Consequently, stockholders will only realize an economic gain on their

investment in our common stock if the price appreciates.

Stockholders should not purchase our common stock expecting to receive cash

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.

Our 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.

Our 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.

This 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

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.

Investor relations activities, nominal

“float” and supply and demand factors may affect the price of our common stock.

We 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 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.

The 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

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 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

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.

If we are not able to comply with the applicable

continued listing requirements or standards of Nasdaq, Nasdaq could delist our securities.

Our common stock was approved for listing on

Nasdaq under the symbol “PALT” and began trading on Nasdaq on August 3, 2021.

We cannot assure our stockholders 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.

We cannot assure our stockholders 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.

The lease for the 30 Jericho Executive

Plaza office space expires on November 30, 2024.

Not applicable.

Our principal executive office is located at

30 Jericho Executive Plaza in Jericho, New York 11753.

The lease for the 30 Jericho Executive Plaza office space expires on November

We currently do not own any real property.

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