What changed in this filing

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Item 1A. Risk Factors

2024-03-15 compared with 2023-03-23 · 401 added, 429 removed, 694 unchanged (54% of the section changed)

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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.

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

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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 business may

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

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.

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 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 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.

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 plan to continue

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

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

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

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 behavior.

Interruption, maintenance

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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.

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

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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

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 of interest.

Risks Related to Our Business

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On an annual basis the Company has millions of

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

of virtual currency.

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

and secondarily generate revenue through paid advertisements.

Accordingly, the success of our consumer applications is substantially

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

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

of virtual gifts.

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

secondarily generate revenue through paid advertisements.

Accordingly, the success of our consumer applications is substantially dependent

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

Users discontinue the use of our applications

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

users may adopt competing

products instead of ours;

users may adopt

competing products instead of ours;

we may fail to introduce

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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

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;

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 manner;

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.

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

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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;

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 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

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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.

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.

offer similar services and 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 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 connecting people.

Certain entities that we do not directly compete

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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.

fail to obtain new users 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

by rapid technological change, including 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.

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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.

from existing users, we need to enhance, add new features to and improve our existing applications, introduce new applications in the

future and where applicable, cross-market such applications.

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

In addition, our applications are designed to

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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.

by a change in the economy, including inflation and 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.

economy generally, including as a result of pandemics, terrorist attacks, natural disasters or other events outside our control, and

any resulting effect on spending by our customers.

Furthermore, prolonged periods of inflation have affected, and may continue to affect,

our ability to target new customers as well as keep existing customers engaged and may ultimately have a correlating effect on our users’

discretionary spending.

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.

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 highly inflationary environment, which makes products like ours more discretionary in nature.

In addition, increased inflation may result in

increased operating costs (including labor and consulting 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 liquidity.

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.

Our mobile applications are substantially

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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.

an important element to expanding our subscriber base.

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.

do not perceive our products to be of high quality, or if our products are not favorably received by users, the value of our brands could

diminish, thereby decreasing the attractiveness of our software, services and applications to 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

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.

attract enough new subscribers or retain our existing 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.

If our goodwill or other intangible assets

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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.

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

We plan to continue expanding our operations

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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.

revenue from users located outside of the United States.

In addition, we rely on outsourced development services from companies with

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 (“NATO”) member states, and Russia.

The United States, other NATO 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

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risks inherent in doing business internationally, including:

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

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;

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;

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.

complying with the

Foreign Corrupt Practices Act, the U.K.

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.

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,

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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.

balance as one-time subscriptions and virtual gifts are sold to end users.

We do not control the efforts of these resellers.

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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.

Foreign governments may seek to restrict access to our products

if they think we are violating their laws or for other reasons, 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, 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

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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.

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.

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.

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

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operational cost to us.

Furthermore, the adoption of certain technologies, such as cloud computing, artificial intelligence and machine

learning may increase the risks associated with cyber attacks.

Similarly, terror and other criminal groups may

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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.

We maintain a work-from-home policy for our employees.

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

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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 cannot control our users’ communications

with each other or physical actions towards one another.

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,

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

hire and retain talented

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

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.

market and advertise

our applications to attract more paying subscribers.

We may be unable to obtain future capital or

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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.

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

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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.

that repealed the “open internet rules,” often known as “net neutrality,” which prohibited 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

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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.

19, 2023, the FCC adopted a new proposal to reclassify broadband internet access service as common carrier services and reinstate net

neutrality rules.

We cannot predict the outcome of similar litigation

or whether the latest FCC proposal or state initiatives regulating providers will be adopted, 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.

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.

In addition, it is possible that a number of

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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.

Act (the “IRA”) was signed into law on August 16, 2022 and became effective on January 1, 2023.

We do not currently expect

that the IRA will have a material impact on our income tax liability.

We are 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

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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

Act, the Connecticut Act Concerning Personal Data Privacy and Online Monitoring, the Utah Consumer Privacy Act, the Delaware Personal

Data Privacy Act, the Indiana Consumer Data Protection Act, the Iowa Consumer Data Protection Act, the Montana Consumer Data Privacy

Act, the Oregon Consumer Privacy Act, the Tennessee Information Protection Act, the Texas Data Privacy and Security Act and the New York

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.

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

There 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

Many other jurisdictions, including the European

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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.

thinly traded on the OTCQB and have typically been thinly traded following our uplist to The Nasdaq Capital Market (“Nasdaq”)

in 2021, 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,

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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.

stock have in the past experienced, and may continue to experience in the future, extreme volatility, which could cause purchasers of

our common stock to incur substantial losses.

We believe that the historical volatility and our historical market prices during such

periods reflected market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not

know if these dynamics will continue in the future.

Although our common stock is listed for trading

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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.

rates, increased interest rates, bank-specific and broader financial institution liquidity challenges, the Russia-Ukraine conflict and

the Israel-Hamas conflict.

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

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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.

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 11, 2024,

Jason Katz, our Chairman of the Board of Directors, Chief Executive Officer, Chief Operating Officer and President, and our largest stockholder,

Crew Delaware Trust B, beneficially owned an aggregate of approximately 26.0% of

our outstanding common stock.

Crew Delaware Trust B is 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:

Katz is not a beneficiary of the trust and does not hold voting or dispositive power over the shares held by the trust.

Delaware Trust B and others that have significant beneficial ownership of our common stock 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.

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 stock.

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 stock they beneficially own in ways with which our other stockholders disagree.

If we fail to maintain an effective system

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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;

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;

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

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including market volatility and the impact of inflation;

● developments in connection with our current patent litigation

or future patent litigation.

developments in

connection with our current patent litigation or future patent litigation.

Given the rapidly evolving industry in which

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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.

As of December 31, 2023, we had

approximately 550,164 shares of common stock that were issuable upon the exercise of vested outstanding stock options.

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

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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.

authorizes us to issue up to 25,000,000 shares of common stock, of which 9,222,157 shares (excluding treasury shares) were outstanding

as of December 31, 2023, and 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, 2023.

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

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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.

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, our Amended and Restated Bylaws

provide that, unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United

States are, to the fullest extent permitted by law, the exclusive forum for the resolution of any complaint asserting a cause of action

arising under the Securities Act.

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 these provisions in our Certificate of Incorporation and Amended and Restated

These choice of forum provisions 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

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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.

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,

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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.

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, could artificially impact (or could 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

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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

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.

However, our common stock may not continue

to be listed on Nasdaq in the future.

In order to maintain our listing on Nasdaq, 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 common stock as a result.

If our common stock is delisted from Nasdaq,

we may be unable to list our common stock 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.

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