Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
On July 23, 2021, a
wholly owned subsidiary of the Company, Paltalk Holdings, Inc., filed a patent infringement lawsuit against WebEx Communications, Inc.,
Cisco WebEx LLC, and Cisco Systems, Inc. (collectively, “Cisco”), in the U.S. District Court for the Western District of
Texas (the “Court”). The Company alleges that certain of Cisco’s products have infringed U.S. Patent No. 6,683,858,
and that the Company is entitled to damages.
A Markman hearing took
place on February 24, 2022. On September 7, 2022, the United States Patent Office issued a reexamination of U.S. Patent No. 6,683,858,
and on January 19, 2023, the Examiner issued an Ex Parte Reexamination Certificate, ending the reexamination and confirming the patentability
of claims 1-10 of U.S. Patent No. 6,683,858. On June 29, 2023, the Court held a pretrial conference with the parties and denied Cisco’s
motion for summary judgment. The trial is expected to be held in April of 2024.
If the Company receives a jury verdict in its favor or receives settlement
proceeds in connection with the foregoing litigation, the exact amount of such proceeds to be received by the Company will be determined
based on a number of factors and will reflect the deduction of significant litigation-related expenses, including legal fees. Consequently,
the Company will not receive the majority of any gross proceeds resulting from any potential verdict or settlement. For the foregoing
reasons, we are unable to predict the outcome of this litigation and its ultimate cost.
To our knowledge, other
than as described above, there are no material pending legal proceedings to which we are a party or of which any of our property is the
subject.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
26
PART II
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