UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 WASHINGTON, D.C. 20549

 FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For The Fiscal Year Ended December 31, 2023

 TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 Commission File No. 001-38717

 (Exact name of registrant as specified in its
charter)

 Delaware

 20-3191847

 (State or other jurisdiction of

 (I.R.S. Employer

 incorporation or organization)

 Identification No.)

 30 Jericho Executive Plaza Suite 400E

 Jericho, NY

 11753

 (Address of principal executive offices)

 (Zip Code)

 Registrant's telephone number, including
area code: (212) 967-5120

 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 Common Stock, $0.001 par value

 PALT

 The Nasdaq Capital Market

 Securities registered pursuant to Section 12(g) of the Act: None

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
No

 Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

 Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
 No

 Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company"
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

 Indicate by check mark whether the registrant
has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes No

 The aggregate market value of the registrant's
common stock, par value $0.001 per share, held by non-affiliates of the registrant, based on the closing price of the common stock as
of the last business day of the registrant's most recently completed second fiscal quarter was approximately $ 14,682,997.

 As of March 11, 2024, the registrant had 9,222,157 * shares of common
stock outstanding.

 * Excludes 641,963 shares of common stock that are held as treasury
stock by Paltalk, Inc.

 DOCUMENTS INCORPORATED BY REFERENCE:

 None.

 ANNUAL REPORT ON FORM 10-K

 Page

 ITEM 1.

 Business

 ITEM 1A.

 Risk
 Factors

 ITEM 1B.

 Unresolved
 Staff Comments

 ITEM 1C.

 Cybersecurity

 ITEM 2.

 Properties

 ITEM 3.

 Legal
 Proceedings

 ITEM 4.

 Mine
 Safety Disclosures

 ITEM 5.

 Market
 for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 ITEM 6.

 Reserved

 ITEM 7.

 Management's
 Discussion and Analysis of Financial Condition and Results of Operations

 ITEM 7A.

 Quantitative
 and Qualitative Disclosures About Market Risk

 ITEM 8.

 Financial
 Statements and Supplementary Data

 ITEM 9.

 Changes
 in and Disagreements with Accountants on Accounting and Financial Disclosure

 ITEM 9A.

 Controls
 and Procedures

 ITEM 9B.

 Other
 Information

 ITEM 9C.

 Disclosure
 Regarding Foreign Jurisdictions that Prevent Inspections

 ITEM 10.

 Directors,
 Executive Officers and Corporate Governance

 ITEM 11.

 Executive

 ITEM 12.

 Security
 Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 ITEM 13.

 Certain
 Relationships and Related Transactions, and Director Independence

 ITEM 14.

 Principal
 Accounting Fees and Services

 ITEM 15.

 Exhibits
 and Financial Statement Schedules

 ITEM 16.

 Form
 10-K Summary

 Signatures

 Unless the context otherwise indicates, references
to "Paltalk," "we," "our," "us" and the "Company" refer to Paltalk, Inc.
and its subsidiaries on a consolidated basis.

 Paltalk, our logo and other trademarks or
service marks appearing in this report are the property of Paltalk, Inc. Trade names, trademarks and service marks of other companies
appearing in this report are the property of their respective owners. Solely for convenience, the trademarks, service marks and trade
names included in this report are without the, or other applicable symbols, but such references are not intended to indicate, in
any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to
these trademarks, service marks and trade names.

 Unless otherwise indicated, operational metrics
such as those related to active users are based on internally-derived metrics for users across all platforms through which our applications
are accessed.

 i

 FORWARD-LOOKING STATEMENTS

 Certain statements contained in this Annual Report
on Form 10-K constitute "forward-looking statements" as defined in Section 27A of the Securities Act of 1933, as amended
(the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
that are based on current expectations, estimates, forecasts and assumptions and are subject to risks and uncertainties. Words such as
"anticipate," "assume," "began," "believe," "budget," "continue,"
"could," "estimate," "expect," "forecast," "goal," "intend,"
"may," "plan," "potential," "predict," "project," "seek," "should,"
"target," "would" and variations of such words and similar expressions are intended to identify such forward-looking
statements. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject
to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated
in such statements, including, without limitation, the following:

 our
 ability to effectively market and generate revenue from our applications;

 our ability to generate and
 maintain active users and to effectively monetize our user base;

 our ability to update our applications
 to respond to rapid technological changes;

 the intense competition in the
 industry in which our business operates and our ability to effectively compete with existing competitors and new market entrants;

 our ability to consummate favorable
 acquisitions and effectively integrate any companies or properties that we acquire;

 the impact of any economic recession
 and the overall inflationary environment on our results of operations and our business;

 the dependence of our applications
 on mobile platforms and operating systems that we do not control, including our heavy reliance on the platforms of Apple, Facebook
 and Google and their ability to discontinue, limit or restrict access to their platforms by us or our applications, change their
 terms and conditions or other policies or features (including restricting methods of collecting payments, sending notifications or
 placing advertisements), establish more favorable relationships with one or more of our competitors or develop applications or features
 that compete with our applications;

 our ability to develop, establish
 and maintain strong brands;

 our reliance on our executive
 officers and consultants;

 our ability to adapt or modify
 our applications for the international market and derive revenue therefrom;

 the ability of foreign governments
 to restrict access to our applications or impose new regulations;

 the reliance of our mobile applications
 on having a mobile data plan and/or Wi-Fi access to gain internet connectivity;

 the effect of security breaches,
 computer viruses and cybersecurity incidents;

 our reliance upon credit card
 processors and related merchant account approvals and the impact of chargeback liabilities that we may face from credit card processors;

 the possibility that our users
 or third parties may be physically or emotionally harmed following interaction with other users;

 our ability to obtain additional
 capital or financing when and if necessary, to execute our business plan, including through offerings of debt or equity or sale of
 any of our assets;

 ii

 the risk that we may face litigation
 resulting from the transmission of information through our applications;

 the effects of current and future
 government regulation, including tax laws and laws and regulations regarding the use of the internet, privacy, cybersecurity and
 protection of user data;

 the impact of any claim that
 we have infringed on intellectual property rights of others;

 our ability to protect our intellectual
 property rights;

 our ability to maintain effective
 internal controls over financial reporting;

 our ability to offset fees associated
 with the distribution platforms that host our applications;

 our reliance on internally derived
 data to accurately report user metrics and other measures of our performance;

 our ability to release new applications
 or improve upon or add features to existing applications on schedule or at all;

 our reliance on third-party
 investor relations firms to help create awareness of our Company and compliance by such third parties with regulatory requirements
 related to promotional reports; and

 our ability to attract and retain
 qualified employees and consultants.

 For a more detailed discussion of these and other
factors that may affect our business, see the discussion in "Item 1A. Risk Factors" and "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations" in this report. We caution that the foregoing list of
factors is not exclusive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business.
We do not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed
in this report, except to the extent required by applicable securities laws.

 iii

 ITEM 1. BUSINESS

 Company Overview

 We are a communications software innovator that
powers multimedia social applications. Our product portfolio includes Paltalk, Camfrog and Tinychat, which together host a large collection
of video-based communities. Our other products include ManyCam and Vumber. ManyCam is a live streaming software and virtual camera that
allows users to deliver professional live videos on streaming platforms, video conferencing apps and distance learning tools. Vumber
is a telecommunications services provider that enables users to communicate privately by having multiple phone numbers with any area
code through which calls can be forwarded to a user's existing telephone number. We have an over 20-year history of technology
innovation and hold 8 patents.

 We were incorporated under the laws of the State
of Delaware in 2005. Our principal executive office is located at 30 Jericho Executive Plaza Suite 400E, Jericho, NY 11753.

 Our Consumer Application Products

 We operate a network of consumer applications
that we believe create a unique social media enterprise where users can meet, see, chat, broadcast, play online card games and board
games and message in real time in a secure environment with others in our network. The proprietary technology underlying our products
allows us to operate thousands of simultaneous streams, including on mobile platforms, which support interactions on a one-on-one, one-to-many
and many-to-many basis. Our consumer applications generate revenue principally from subscription fees, including virtual goods, and advertising
arrangements.

 We believe that the scale of our user base presents
a competitive advantage in the video social networking industry and provides growth opportunities to advance our existing products with
up-sell opportunities and build future brands with cross-sell offers. We also believe that our proprietary consumer app technology platform
can scalably support large communities of users in activities such as video, voice and text chat, online card games and board games and
provide robust user monetization tools.

 Live Video Chat

 We have three existing products in the video
chat space: Paltalk, Camfrog and Tinychat. Our major revenue-generating live video chat products are Paltalk and Camfrog. Each product
enables individuals to self-organize around topics and users with common affinities. Tinychat is web-based, enables adaptations of our
video technology and does not require a download. It is primarily targeted for use in alternative markets and is focused on a younger
demographic user base.

 Paltalk and Camfrog are both available on Windows,
Mac OS, iOS, Android and other tablet devices. Together, these products power a large collection of video-based communities, with proprietary
technology to host thousands of simultaneous live group conversations on topics such as politics, financial markets, music and dating,
among others. Our proprietary client server technology helps maintain high-quality video and audio, even as many users simultaneously
watch a particular broadcaster. Paltalk and Camfrog both attract a demographically and geographically diverse user base, with users in
over 180 different countries. Paltalk users are approximately one-third domestic and two-thirds international, and Camfrog users have
an even larger international presence, with a particular concentration in Southeast Asia.

 Live Streaming Software

 In 2022, we acquired ManyCam, a live streaming
software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and
distance learning tools. The ManyCam software provides multiple camera feeds, backgrounds and effects while also enabling users to share
presentations, spreadsheets and documents.

 Telecommunications

 We own and operate a small telecommunications
services provider called Vumber that enables users to have multiple phone numbers in any area code through which calls can be forwarded
to a user's existing cell phone or land line telephone number. Vumber serves both the retail and small business communities. Vumber
not only allows individuals to communicate while protecting privacy, but also gives business professionals the ability to add a new business
line with any chosen area code to their cell phones. Vumber also provides an in-depth data analytics platform that can track, record
and analyze calls to gain new insights into one's business.

 Product Payment Options

 Our users have a variety of methods by which
to purchase product subscriptions across all of our consumer applications. Users can pay by credit card, PayPal, Western Union, check,
local e-wallet providers, or complete an in-app purchase through the Apple App Store or Google Play Store for Android users.

 Apple generally retains up to 15% of the revenue
that is generated from sales on our iPhone applications through in-app purchases in the United States. Google also generally retains
up to 15% of the revenue that is generated from sales on Android applications via Google wallet through in-app purchases in the United
States.

 All of our credit card transactions are processed
through various payment providers. Video chat users in certain international territories also have an option to purchase through local
resellers. Local resellers prepay in bulk for services and debit the prepaid balance as one-time subscriptions and virtual gifts are
sold to end users. Regardless of which payment method is utilized, users may access our products through any of the gateways we offer.

 During fiscal year 2023, we engaged Cleverbridge,
a growth engine for global technology companies, to, among other things, facilitate and authenticate payments in international geographic
markets to reduce fraud and increase acceptance rates.

 Company Business Strategy

 Our continued growth depends on attracting new
consumer application users through the introduction of new applications, features and partnerships and further penetration of our existing
markets. Our principal growth strategy is to invest in the development of proprietary software, expand our sales and marketing efforts
with respect to such software, and increase our consumer application user base through potential platform partnerships and new and existing
advertising campaigns that we run through internet and mobile advertising networks, all while balancing the capital needs of the business.

 Our strategy is to approach these opportunities
in a measured way, being mindful of our resources and evaluating factors such as potential revenue, time to market and amount of capital
needed to invest in the opportunity.

 Acquiring and Investing in Complementary Technologies
and Businesses

 Our strategy also includes acquiring, or investing
in technologies, solutions or business that complement our business and cross-selling them to additional synergistic businesses. In furtherance
of this strategy, we have strategically added specialized employees and complementary companies, products and technologies to our existing
business. In addition, we continue to explore strategic opportunities, including, but not limited to, potential mergers or acquisitions
of other assets or entities that are synergistic to our business.

 Enhance Existing Live Video Chat Applications

 We continue to develop our existing live video
chat applications by implementing programs and features that enhance our users' experience on our platforms. For example, in the
fourth quarter of 2023, we launched the first version of our "Chat History," a feature that retains messages posted in chat
rooms. When fully implemented, we expect to offer our users a searchable database that users can refer to for content.

 In addition, we plan to continue leveraging our
integration of the ManyCam product into Paltalk products through upselling initiatives and are developing a user-friendly version of
ManyCam that will be optimized for both consumer and enterprise applications.

 Our Paltalk platform's rewards loyalty
program, "Paltalk Rewards Points", has 25 reward tiers such as specialty coins, subscriptions, stickers, flair, and other
popular buttons. Additionally, a real-time asynchronous message board called the "Paltalk Feed" is available on our Paltalk
platform, which grants users the ability to interact with the platform without a live video cam. The Paltalk Feed also allows our users
to comment, add photos or videos and contribute to conversations around shared interests on a digital message board.

 In 2022, we integrated Hive Automated Content
Moderation Solutions into our Paltalk and Camfrog platforms, which reduces spam and objectionable content on our applications. More recently
in 2023, we made certain updates to the ManyCam product, which now, and following the acquisition, we subsequently released software updates
to provide users with greater ease of use, dark and light modes and enhanced overall rendering performance for high resolution users,
as well as improved quality and performance with regard to virtual backgrounds.

 Implementation of Enhanced Processors

 As discussed above, during fiscal year 2023,
we engaged Cleverbridge, a growth engine for global technology companies. Cleverbridge's robust suite of global payment and eCommerce
capabilities has allowed us to optimize our international markets while minimizing risk and administrative work. We believe that this
is an important aspect of our business strategy given that Paltalk and Camfrog both attract a demographically and geographically diverse
user base, with users in over 180 different countries. Paltalk users are domestic and international, and Camfrog users have an even larger
international presence, with a particular concentration in Southeast Asia. Beyond facilitating and authenticating payments, we believe
Cleverbridge's chargeback prevention algorithms can help us with acceptance rates and reduce fraud.

 Defend our Intellectual Property

 We have a portfolio of 8 issued patents. We have
successfully defended certain of our intellectual property in the past and have generated tens of millions of dollars in licensing fees
for the use of our patents. We intend to continue defending our intellectual property rights.

 Marketing Strategy

 We invest in advertising and marketing primarily
for the purpose of acquiring users for our consumer applications. We adapt our marketing expenditures and channels as we gather the data
to analyze the success of our campaigns. We primarily advertise through internet and mobile advertising networks and run hundreds of
campaigns at any given time, targeting various audiences of users, and focusing on campaigns that we believe will produce a positive
return over the lifetime of new users. We also generate new sign-ups organically, as people find our sites and applications through brand
recognition and word of mouth, search engines and product review websites.

 During 2022, we engaged two marketing agencies
to help us drive consumer engagement through the Paltalk and Camfrog applications, but we subsequently scaled back the marketing agencies'
efforts during the fourth quarter of 2022 in response to the overall macro-economic environment. During 2023, we leveraged our in-house
resources in an effort to further define and refine our renewal strategy and optimize cost per new customer acquisition.

 Competition and Our Industry

 Competition in our industry remains fierce. The
market for consumer applications is extremely dynamic and is undergoing constant change. We believe this environment creates significant
opportunities for us as well as our direct and indirect competitors. Our principal competitors are BIGO Live, Cisco Webex, Facebook Live,
Google Meet, Discord, Instagram Live, Live.ly, Live.me, Microsoft Teams, Skype, Twitch, YouTube Live and Zoom.

 Many of our competitors have substantially greater
financial, managerial, technological and other resources than we do. In addition, there are relatively few barriers to entry into the
consumer applications industry, and, as a result, any organization that has adequate financial resources and access to technical expertise
and skilled personnel may become one of our competitors.

 In order to compete effectively, we seek to offer
software, services and applications that are differentiated from existing products, superior in quality and more appealing than those
of our competitors. We believe that our applications compete favorably against those offered by our competitors due to their ability
to scale, their cost-efficiency and their innovative technology. We also believe that we have the tools and expertise that may enable
us to attract new users through Facebook and other sources at a lower cost per subscriber than certain of our traditional competitors.

 Although we believe we have the capability to
compete effectively in the consumer applications industry, our competitors may offer products, services and applications that we do not
provide, and that may have more desirable features or may be offered at lower prices, and they may be able to devote greater resources
to the development, promotion, sale and support of their products. In addition, many of our competitors have more extensive customer
bases and broader customer relationships than we have, including relationships with our potential customers.

 Governmental Regulations

 We are subject to a number of U.S. federal and
state laws and regulations that affect companies conducting business on the internet, many of which are still evolving and being litigated
in the courts and could be interpreted in ways that could harm our business. These laws and regulations may involve user privacy, data
protection, content, intellectual property, distribution, electronic contracts, competition, wiretapping, biometrics, online tracking,
protection of minors, consumer protection, taxation and online payment services. In particular, we are subject to federal and state laws
regarding privacy and protection of user data, which are constantly evolving and can be subject to significant change. We are also subject
to diverse and evolving laws and regulations in other countries in which we operate. The application and interpretation of these laws
and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate. Because our applications
are accessible worldwide and used by residents of some foreign countries, foreign jurisdictions may claim that we must comply with foreign
laws, even in jurisdictions in which we have no local business entity, employees or infrastructure.

 We are also subject to federal laws and regulations
regarding online content, user privacy and electronic marketing, including The Communications Decency Act of 1996, as amended. The Children's
Online Privacy Protection Act of 1998, as amended, The Video Privacy Protection Act of 1998 ("VPPA"), The Digital Millennium
Copyright Act, The Electronic Communications Privacy Act of 1986, as amended, the USA PATRIOT Act of 2001, and the Controlling the Assault
of Non-Solicited Pornography And Marketing ("CAN-SPAM") Act of 2003, among others. The Digital Millennium Copyright Act limits
our liability as an online service provider for linking to or hosting third-party content that infringes copyrights. The Communications
Decency Act provides statutory protections to online service providers like us who distribute third-party content. The VPPA restricts
digital video providers from disclosing to third parties personally identifiable information that is tied to the titles of consumers'
viewed videos. The Children's Online Privacy Protection Act restricts the ability of online service providers to collect personal
information from children under 13. Congress, the Federal Trade Commission ("FTC") and many states have promulgated laws
and regulations regarding email advertising, including the CAN-SPAM Act. Any changes in these laws or judicial interpretations narrowing
the protections of these laws may subject us to increased risk, increased costs of compliance, and limits on the operation of certain
parts of our business.

 Growing public concern about privacy and the
use of personal information may subject us to increased regulatory scrutiny. Regulation related to treatment of user data by online services
is 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: the California Consumer Protection
Act ("CCPA"), the California Privacy Rights Act ("CPRA"), 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, 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 Stop Hacks and Improve Electronic Data Security ("SHIELD") Act.

 The European Union implemented a privacy regulation
called the Global Data Protection Regulation ("GDPR") that imposes additional regulatory scrutiny on our processing of personal
data from in the European Economic Area, with possible financial consequences for noncompliance of up to 4% of our worldwide revenues.

 In addition, virtually 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. 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 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.

 In addition, rising concern about the use of
social networking technologies for illegal conduct may in the future produce legislation or other governmental action that could require
changes to our applications or restrict or impose additional costs upon the conduct of our business. These regulatory and legislative
developments, including excessive taxation, may prevent or significantly limit our ability to expand our business.

 Furthermore, 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
intended to be for entertainment purposes only and do not offer an opportunity to win earnings outside of the platform.

 Employees

 As of March 11, 2024, we had no part-time employees
and 17 full-time employees. We believe that our future success depends, in part, on our continued ability to hire, assimilate and retain
qualified personnel. We attract and retain employees by offering training, bonus opportunities, competitive salaries and a comprehensive
benefits package.

 Company Internet Site and Availability of SEC Filings

 Our corporate website is located at www.paltalk.com.
We make available on that site, as soon as reasonably practicable, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, proxy
statements, Current Reports on Form 8-K, other reports filed with or furnished to the Securities and Exchange Commission ("SEC"),
as well as any amendments to those filings. Our SEC filings, as well as our Code of Conduct and other corporate governance documents,
can be found in the Investor Relations section of our site and are available free of charge. Amendments to our Code of Conduct and any
grant of a waiver from a provision of the Code of Conduct requiring disclosure under applicable SEC rules will be disclosed on our website.
Information on our website is not part of this Annual Report on Form 10-K. In addition, the SEC maintains a website at www.sec.gov
 that contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically
with the SEC.

 ITEM 1A. RISK FACTORS

 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.

 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 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 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.

 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 of interest.

 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
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 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
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;

 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; and

 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; and

 acquisitions or
 consolidations within the consumer applications industry.

 Many of our current and potential competitors
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
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. 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 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, 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.

 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, 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
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.

 Our business may be significantly affected
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 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
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. 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.

 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. 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

 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 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. If users
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
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 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
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. As of
December 31, 2023, we had recorded a total of $6.3 million of goodwill and $2.7 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. Jenny,
our Chief Financial Officer and director. The loss of the services of these individuals would substantially affect our business or operations
and could have a material adverse effect on our business, results of operations or financial condition.

 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
globally.

 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'
actual ages. 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-, 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
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 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
we have limited or no experience in marketing, selling and deploying our products. If we fail to deploy or manage our operations in international
markets successfully, our business may suffer. As our international operations increase our operating results may become more greatly
affected by fluctuations in the exchange rates of the currencies in which we do business. In addition, we are subject to a variety of
risks inherent in doing business internationally, including:

 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
 locations;

 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;

 the impact of the
 United Kingdom's exit from the European Union; and

 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 gifts 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. 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
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. 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. 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'
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.

 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. 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.

 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. 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. 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
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.

 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
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 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,
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.

 We may need additional capital to execute
our business plan. If we do not obtain additional financing, it could have a material adverse effect on our business, results of operations
or financial condition.

 We 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; and

 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 15% 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.

 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
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.

 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; and

 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 prohibited internet providers
in the United States from impeding access to most content, or otherwise unfairly discriminating against content providers like us. These
rules also prohibited mobile providers from entering into arrangements with specific content providers for faster or better access over
their data networks. The FCC order repealing the open internet rules went into effect in June 2018. In response to this decision, California
and a number of states implemented their own net neutrality rules which largely mirrored the repealed federal regulations. The U.S. Department
of Justice ("DOJ") has filed suit to bar implementation of these state laws and their application remains uncertain. On October
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. 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.

 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 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
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
privacy policy. 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, 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
SHIELD Act. 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. 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
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, any of which could have a material adverse effect on our business, financial condition
and results 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. Accordingly,
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,
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.

 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. If we
are unable to protect our proprietary rights or prevent unauthorized use or appropriation by third parties, the value of our brand and
other intangible assets may be diminished, and competitors may be able to more effectively mimic our service and methods of operations.
Any of these events could seriously harm our business.

 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 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,
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 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
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, 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
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 11, 2024,
Jason Katz, our Chairman of the Board of Directors, Chief Executive Officer, Chief Operating Officer and President, and our largest stockholder,
The J. Crew Delaware Trust B, beneficially owned an aggregate of approximately 26.0% of
our outstanding common stock. The J. Crew Delaware Trust B is a trust formed by Mr. Katz for the benefit of certain of his family members.
Mr. Katz is not a beneficiary of the trust and does not hold voting or dispositive power over the shares held by the trust.

 Mr. Katz, The J. Crew
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; and

 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
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
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.

 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. Factors that
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; and

 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
performance.

 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, 2023, we had
approximately 550,164 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 9,222,157 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
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
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.

 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. 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
Bylaws. 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
"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
decreases. We and our stockholders may be subjected to enhanced regulatory scrutiny due to the fact that our affiliates hold a majority
of our outstanding common stock and we have a limited number of shares of common stock that are publicly available for resale.

 The 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. 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
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. 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.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 ITEM 1C. CYBERSECURITY

 In support of our commitment to cybersecurity,
we employ a comprehensive strategy which is intended to protect our digital infrastructure, which strategy is supported by both management
and our Board of Directors. Our Board of Directors is responsible for overseeing our risk management activities in general, and certain
of our Board committees assists the Board of Directors in the role of risk oversight. The full Board of Directors receives an update on
the Company's risk management process and the risk trends related to cybersecurity at least annually.

 At the management level, leading our efforts is
a cybersecurity team that reports directly to our Senior Vice President. This team conducts manual and automated testing on our systems,
with the goal of identifying vulnerabilities and proactively strengthening our defenses. We believe that embracing a multi-layered defense
approach, will help us recognize and address the dynamic nature of cyber threats. By integrating diverse security measures, we aim to
fortify our infrastructure against a spectrum of potential risks, adapting to the ever-evolving cybersecurity landscape.

 Our cybersecurity team performs tests, encompassing
vulnerability assessments, penetration testing, and threat simulations. The results derived from these assessments are prioritized and
integrated into the workflow of our development and operations teams to ensure that identified vulnerabilities and insights gleaned from
the tests are promptly addressed. We also have an established process led by our Senior Vice President governing our assessment, response
and notifications internally and externally upon the occurrence of a cybersecurity incident. Depending on the nature and severity of
an incident, this process provides for escalating notification to our Chief Executive Officer and the Board of Directors.

 To enhance our defense mechanisms, we leverage
third-party edge security tools. These tools play a crucial role in actively monitoring and mitigating potential threats to our sites
and products, which we believe contributes to our security infrastructure. Our development teams also use proactive measures such as
"Security as Code" to make sure that vulnerabilities are protected against at a deeper level, in addition to cloud-based
security tools.

 Recognizing the pivotal role of our personnel
in cybersecurity, we also conduct proactive training sessions covering essential topics such as data handling practices and email phishing
awareness. These initiatives are designed to empower our workforce to serve as a human firewall, augmenting our overall security posture.
Additionally, we also think about data handling from a code and infrastructure level, incorporating encryption measures in transit and
at rest to safeguard both internal and customer data. We further employ a proactive backup strategy, ensuring rapid system restoration
in the event of disruptions. This measure minimizes downtime and underscores our commitment to business continuity and customer service
reliability.

 An integral part of our cybersecurity readiness
is an annual external IT audit that evaluates various aspects of our cybersecurity framework. This measure ensures that our defenses
align with industry best practices and facilitates continuous improvement. The results of this audit are reviewed by the audit committee
of the Board of Directors, allowing such committee to assist in and make recommendations on our management's cybersecurity controls.

 We face risks from cybersecurity threats that
could have a material adverse effect on its business, financial condition, results of operations, cash flows or reputation. To date,
we have not experienced any cyber incidents that have had an adverse material effect on our business, financial condition, results of
operations, or cash flows. See "Risk Factors – Risks Related to Our Business – Security breaches, computer viruses
and cybersecurity incidents could harm our business, results of operations or financial condition."

 ITEM 2. PROPERTIES

 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
30, 2024. We currently do not own any real property.

 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

 ITEM 5. MARKET FOR REGISTRANT'S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market Information

 Our common stock is traded on Nasdaq under the
symbol "PALT."

 Holders

 As of March 11, 2024, there were approximately
52 holders of record of our common stock. This does not reflect the number of persons or entities who held stock in nominee or street
name through various brokerage firms.

 Recent Sales of Unregistered Securities

 There were no sales of unregistered securities
during the year ended December 31, 2023 that were not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form
8-K.

 Issuer Purchases of Equity Securities

 The were no repurchases of our common stock during the three months
ended December 31, 2023.

 ITEM 6. [Reserved]

 ITEM 7. MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 This Management's Discussion and Analysis
of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the
perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect
our future results. The following discussion and analysis should be read in conjunction with our audited consolidated financial statements
and the accompanying notes thereto included in "Item 8. Financial Statements and Supplementary Data."

 Forward-Looking Statements

 In addition to historical financial information,
the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See "Forward-Looking
Statements." Our results and the timing of selected events may differ materially from those anticipated in these forward-looking
statements as a result of many factors, including those discussed under "Item 1A. Risk Factors" in this Annual Report on
Form 10-K.

 Overview

 We are a communications software innovator that
powers multimedia social applications. We operate a network of consumer applications that we believe create a unique social media enterprise
where users can meet, see, chat, broadcast, play online card games and board games and message in real time in a secure environment with
others in our network. Our consumer applications generate revenue principally from subscription fees and advertising arrangements.

 Our product portfolio includes Paltalk, Camfrog
and Tinychat, which together host a large collection of video-based communities. Our other products include ManyCam and Vumber. ManyCam
is a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing
apps and distance learning tools. Vumber is a telecommunications services provider that enables users to communicate privately by having
multiple phone numbers with any area code through which calls can be forwarded to a user's existing telephone number. We have an
over 20-year history of technology innovation and hold 8 patents.

 We believe that the scale of our user base presents
a competitive advantage in the video social networking industry and provides growth opportunities to advance our existing products with
up-sell opportunities and build future brands with cross-sell offers. We also believe that our proprietary consumer app technology platform
can scalably support large communities of users in activities such as video, voice and text chat, online card games and board games and
provide robust user monetization tools.

 Our continued growth depends on attracting new
consumer application users through the introduction of new applications, features and partnerships and further penetration of our existing
markets. Our principal growth strategy is to invest in the development of proprietary software, expand our sales and marketing efforts
with respect to such software, and increase our consumer application user base through potential platform partnerships and new and existing
advertising campaigns that we run through internet and mobile advertising networks, all while balancing the capital needs of the business.
Our strategy also includes the acquisition of, or investment in, technologies, solutions or businesses that complement our business and
cross-selling them to additional synergistic businesses.

 Our strategy is to approach these opportunities
in a measured way, being mindful of our resources and evaluating factors such as potential revenue, time to market and amount of capital
needed to invest in the opportunity.

 Recent Developments

 Director Appointment

 On October 9, 2023, our Board of Directors increased
the size of the Board of Directors from five (5) directors to six (6) directors and filled the newly created vacancy by appointing Geoffrey
Cook as a director of the Company, effective as of October 10, 2023. Mr. Cook was also appointed to serve as a member of the Nominating
and Corporate Governance Committee of the Board of Directors and the Strategic Transactions Committee of the Board of Directors. We believe
Mr. Cook is qualified to serve on our Board of Directors due to, among other things, his experience in the social media and consumer
internet industries as well as his insights regarding corporate strategy and brand growth.

 Impact of Macro-Economic Factors

 Our results of operations have been and may continue
to be negatively impacted by macro-economic factors, including the timing of economic recessions and/or recovery and the overall inflationary
environment. 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. Additionally,
the closures of certain banks in the first and second quarters of 2023 and their placement into receivership with the Federal Deposit
Insurance Corporation created bank-specific and broader financial institution liquidity challenges and concerns. Future adverse developments
with respect to specific financial institutions or the broader financial services industry may create additional market and economic
uncertainty, which could affect our industry.

 Under the provisions
of the extension of the Coronavirus Aid, Relief, and Economic Security Act, we were eligible for a refundable employee retention tax
credit (the "ERTC") subject to certain criteria. During the year ended December 31, 2023, we applied for the ERTC and recorded
a receivable in the amount of $343,045, net of related costs, which was recognized in our consolidated statement of operations as other
income. As of December 31, 2023, we received an aggregate of $294,833, which was recorded as a reduction of the receivable on our consolidated
balance sheet.

 Operational Highlights and Business Objectives

 During the year ended December 31, 2023 we executed
key components of our objectives:

 total revenue remained relatively unchanged at approximately
 $11 million for the years ended December 31, 2023 and 2022, primarily as a result of a decrease in revenue from Paltalk and Camfrog,
 offset by increased revenue from ManyCam and Vumber;

 net loss decreased by 68.7% to $1.1 million for the year
 ended December 31, 2023, compared to net loss of $3.4 million for the year ended December 31, 2022, as a result of reduced expenses
 and increased operating efficiencies;

 compared to the prior year period, cash flows used in operations
 decreased by $1.9 million to $1.1 million for the year ended December 31, 2023, mainly as result of a decrease in product development
 and marketing expense;

 we were cash flow positive for the third quarter ended
 September 30, 2023; and

 engaged Cleverbridge to facilitate our global payment processing
 capabilities in international geographic markets.

 For the near term, our business objectives include:

 leveraging our integration of the ManyCam product into
 Paltalk product through upselling initiatives;

 further optimizing marketing spend to effectively realize
 a positive return on our investment;

 developing a user-friendly version of ManyCam that will
 be optimized for both consumer and enterprise applications;

 continuing to implement several enhancements to our live
 video chat applications as well as the integration of card and board games and other features focused on retention and monetization,
 which collectively are intended to increase user engagement and revenue opportunities;

 continuing to explore strategic opportunities, including,
 but not limited to, potential mergers or acquisitions of other assets or entities that are synergistic to our businesses;

 continuing to develop our consumer application platform
 strategy by seeking potential partnerships with large third-party communities to whom we could promote a co-branded version of our
 video chat products and potentially share in the incremental revenues generated by these partner communities; and

 continuing to defend our intellectual property.

 Sources of Revenue

 Our main sources of revenue are subscription
revenue, which includes virtual gift revenue, and advertising revenue generated from users of our core video chat products, Paltalk and
Camfrog. We also generate revenue from subscriptions for our ManyCam software product. We expect that the majority of our revenue in
future periods will continue to be generated from our core video chat products.

 Subscription Revenue

 Our video chat platforms generate revenue primarily
through subscription fees. Our tiers of subscriptions provide users with unlimited video windows and levels of status within the community.
Multiple subscription tiers are offered in different durations depending on the product from one-, three-, six-, twelve-, and twenty-four-month
terms, which continue to vary as we continue to test and optimize length and pricing. Longer-term plans (those with durations longer
than one month) are generally available at discounted monthly rates. Levels of membership benefits are offered in tiers, with the least
membership benefits in the lowest paid tier and the most membership benefits in the highest paid tier. Our membership tiers are "Plus,"
"Extreme," "VIP" and "Prime" for Paltalk and "Pro," "Extreme" and "Gold"
for Camfrog. We also hold occasional promotions that offer discounted subscriptions and virtual gifts. Subscriptions for ManyCam are
generally offered in annual and two-year terms, with exceptions made for enterprise sales.

 We recognize revenue from monthly premium subscription
services beginning in the month in which the subscriptions are originated. Revenues from multi-month (or annual) subscriptions are recognized
on a gross and straight-line basis over the length of the subscription period. The unearned portion of subscription revenue is presented
as deferred revenue in the accompanying consolidated balance sheets.

 We also offer virtual gifts to our users through
our Paltalk, Camfrog and TinyChat applications. Users may purchase credits that can be redeemed for a host of virtual gifts such as a
rose, a beer, or a car, among other items. Virtual gift revenue is recognized upon the users' utilization of the virtual gift and
included in subscription revenue. The unearned portion of virtual gifts revenue is presented as deferred revenue in the accompanying
consolidated balance sheets.

 Advertising Revenue

 We generate a portion of our revenue through
advertisements on our video platforms. Advertising revenue is dependent upon the volume of advertising impressions viewed by active users
as well as the advertising inventory we place on our products. We recognize advertising revenue as earned on a click-through, impression,
registration or subscription basis. Measurements of impressions include when a user clicks on an advertisement (CPC basis), views an
advertisement impression (CPM basis), or registers for an external website via an advertisement by clicking on or through our application
(CPA basis).

 Costs and Expenses

 Cost of revenue consists primarily of compensation
(including stock-based compensation) and other employee-related costs for personnel engaged in data center and customer care functions,
credit card processing fees, hosting fees, and data center rent and bandwidth costs. Cost of revenue also includes compensation and other
employee-related costs for technical personnel, consultants and subcontracting costs relating to technology service revenue.

 Sales and marketing expense consist primarily
of advertising expenditures and compensation (including stock-based compensation) and other employee-related costs for personnel and
consultants engaged in sales and sales support functions. Advertising and promotional spend includes online marketing, including fees
paid to search engines, and offline marketing, which primarily consists of partner-related payments to those who direct traffic to our
brands.

 Product development expense, which relates to
the development of technology of our applications, consists primarily of compensation (including stock-based compensation) and other
employee-related and consultant-related costs that are not capitalized for personnel engaged in the design, testing and enhancement of
service offerings as well as amortization of capitalized website development costs.

 General and administrative expense consists primarily
of compensation (including non-cash stock-based compensation) and other employee-related costs for personnel engaged in executive management,
finance, legal, tax and human resources and facilities costs and fees for other professional services and cost of insurance. General and
administrative expense also includes amortization of intangible assets.

 Key Metrics

 Our management relies on certain non-GAAP and/or
unaudited performance indicators to manage and evaluate our business. The key performance indicators set forth below help us evaluate
growth trends, establish budgets, measure the effectiveness of our advertising and marketing efforts and assess operational efficiencies.
We also discuss net cash provided by operating activities under the "Liquidity and Capital Resources" section below. Adjusted
EBITDA is discussed below.

 Year Ended

 2023

 2022

 Net cash used in operating activities

 $
 (1,079,671
)

 $
 (2,956,724
)

 $
 (1,067,335
)

 $
 (3,412,250
)

 Adjusted EBITDA

 $
 (1,012,916
)

 $
 (2,646,860
)

 Adjusted EBITDA as percentage of total revenue

 (9.2
)%

 (24.1
)%

 Adjusted EBITDA

 Adjusted EBITDA is a non-GAAP financial measure.
Adjusted EBITDA is defined as net (loss) income adjusted to exclude stock-based compensation expense, depreciation and amortization expenses,
impairment loss on digital token, interest income, net, other (income) expense, net, and income tax (benefit) expense.

 We present Adjusted EBITDA because it is a key
measure used by our management and Board of Directors to understand and evaluate our core operating performance and trends, to develop
short- and long-term operational plans and to allocate resources to expand our business. In particular, the exclusion of certain expenses
in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of the cash operating income generated by
our business. We believe that Adjusted EBITDA is useful to investors and others to understand and evaluate our operating results, and
it allows for a more meaningful comparison between our performance and that of competitors.

 Limitations of Adjusted EBITDA

 Our use of Adjusted EBITDA has limitations as
an analytical tool, and you should not consider this performance measure in isolation from or as a substitute for analysis of our results
as reported under GAAP. Some of these limitations are that Adjusted EBITDA does not reflect: cash capital expenditures for assets underlying
depreciation and amortization expense that may need to be replaced or for new capital expenditures; net loss from discontinued operations;
interest income, net; other expense, net; income tax expense from continuing operations; our working capital requirements; the impairment
loss on digital tokens; the potentially dilutive impact of stock-based compensation; and the provision for income taxes. Other companies,
including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

 Because of these limitations, you should consider
Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income and our other GAAP results.
The following table presents a reconciliation of net income, the most directly comparable financial measure calculated and presented
in accordance with GAAP, to Adjusted EBITDA for each of the periods indicated:

 Year Ended

 2023

 2022

 Reconciliation of Net Loss to Adjusted EBITDA:

 $
 (1,067,335
)

 $
 (3,412,250
)

 Stock-based compensation expense

 Depreciation and amortization expense

 822,334

 670,863

 --

 7,262

 Interest income, net

 (639,611
)

 (74,895
)

 Other income, net

 (343,045
)

 --

 Income tax benefit

 (20,252
)

 (171,665
)

 Adjusted EBITDA

 $
 (1,012,916
)

 $
 (2,646,860
)

 Results of Operations

 The following table sets forth consolidated statements
of operations data for each of the periods indicated as a percentage of total revenue:

 2023

 2022

 Total revenue

 100.0
 %

 100.0
 %

 Costs and expenses:

 29.5
 %

 25.7
 %

 8.0
 %

 14.3
 %

 44.3
 %

 54.0
 %

 37.0
 %

 39.2
 %

 0.0
 %

 0.1
 %

 Total costs and expenses

 118.8
 %

 133.3
 %

 Loss from operations

 (18.8
)%

 (33.3
)%

 Interest income, net

 5.8
 %

 0.7
 %

 Other income, net

 3.1
 %

 0.0
 %

 Loss from operations before income tax benefit

 (9.9
)%

 (32.6
)%

 Income tax benefit

 0.2
 %

 1.6
 %

 (9.7
)%

 (31.0
)%

 Year Ended December 31, 2023 Compared to Year
Ended December 31, 2022

 Revenue

 Total revenue remained relatively unchanged at
$10,979,844 for the year ended December 31, 2023, compared to $10,989,545 for the year ended December 31, 2022. The change was primarily
driven by a decrease in subscription revenue and virtual gift revenue from the Paltalk and Camfrog applications and was partially offset
by revenue recognized from sales of the ManyCam product and Vumber.

 The following table sets forth our subscription
revenue, advertising revenue and total revenue for the year ended December 31, 2023, and the year ended December 31, 2022, the increase
or decrease between those periods, the percentage increase or decrease between those periods, and the percentage of total revenue that
each represented for those periods:

 $

 %

 % of Revenue Years
 Ended

 2023

 2022

 (Decrease)

 (Decrease)

 2023

 2022

 Subscription revenue

 $
 10,646,700

 $
 10,662,691

 $
 (15,991
)

 (0.1
)%

 97.0
 %

 97.0
 %

 Advertising revenue

 333,144

 326,854

 6,290

 1.9
 %

 3.0
 %

 3.0
 %

 Total revenues

 $
 10,979,844

 $
 10,989,545

 $
 (9,701
)

 (0.1
)%

 100.0
 %

 100.0
 %

 Subscription Revenue

 Our subscription revenue for the year ended December
31, 2023 decreased by $15,991, or 0.1%, as compared to the year ended December 31, 2022. The decrease in subscription revenue was primarily
driven by a decrease in new subscribers as well as a decrease in virtual gift revenue across the Paltalk and Camfrog applications. We
attribute this decrease to the overall macro-economic environment that may limit a customer's access to discretionary spending.
These decreases were partially offset by increased revenue from ManyCam as the revenue for the year ended December 31, 2023 represented
revenue for twelve months, whereas the revenue for the year ended December 31, 2022, represented only six months of subscription revenue.

 Advertising Revenue

 Our advertising revenue for the year ended December
31, 2023 increased by $6,290, or 1.9%, as compared to the year ended December 31, 2022. The increase in advertising revenue was primarily
due to an increase in the volume of advertising impressions related to changes in and the optimization of third-party advertising partners
and partnering with a new facilitator in the market.

 Costs and Expenses

 Total costs and expenses for the year ended December
31, 2023 decreased by $1,598,268 or 10.9%, as compared to the year ended December 31, 2022. The following table presents our costs and
expenses for the years ended December 31, 2023 and 2022, the increase or decrease between those periods and the percentage increase or
decrease between those periods and the percentage of total revenue that each represented for those periods:

 $

 %

 % of Revenue Years
 Ended

 2023

 2022

 (Decrease)

 (Decrease)

 2023

 2022

 $
 3,238,243

 $
 2,823,570

 $
 414,673

 14.7
 %

 29.5
 %

 25.7
 %

 878,657

 1,571,275

 (692,618
)

 (44.1
)%

 8.0
 %

 14.3
 %

 4,860,607

 5,934,433

 (1,073,826
)

 (18.1
)%

 44.3
 %

 54.0
 %

 4,072,580

 4,311,815

 (239,235
)

 (5.5
)%

 37.0
 %

 39.2
 %

 --

 7,262

 (7,262
)

 (100.0
)%

 0.0
 %

 0.1
 %

 Total costs and expenses

 $
 13,050,087

 $
 14,648,355

 $
 (1,598,268
)

 (10.9
)%

 118.8
 %

 133.3
 %

 Our cost of revenue for the year ended December
31, 2023 increased by $414,673, or 14.7%, as compared to the year ended December 31, 2022. The increase for the year ended December 31,
2023, was primarily driven by an increase in costs related to hosting expenses of approximately $364,000, as well as costs related to
the ManyCam product, which launched in June of 2022, of approximately $61,000.

 Our sales and marketing expense for the year
ended December 31, 2023 decreased by $692,618, or 44.1%, as compared to the year ended December 31, 2022. The decrease in sales and marketing
expense for the year ended December 31, 2023 was primarily due to a decrease of approximately $459,000 in marketing user acquisition
expenses, including agent fees compared to the prior year. During the year ended December 31, 2022, we focused on increasing user engagement
spend through the efforts of our third-party marketing agencies, which we have subsequently scaled back. This resulted in a decrease
of approximately $203,000 in other marketing and branding expenses, as well as a decrease in headcount costs of approximately $46,000
for the year ended December 31, 2023 compared to 2022.

 Our product development expense for the year
ended December 31, 2023 decreased by $1,073,826, or 18.1%, as compared to the year ended December 31, 2022. The decrease was primarily
due to a decrease of approximately $825,000 related to software expenses. We accomplished this reduction by streamlining our offshore
development efforts as well as reallocating in-house resources. In addition, headcount costs were reduced by approximately $83,000, dues
and subscriptions decreased by approximately $74,000 and a decrease of approximately $69,000 in capitalized amortization software related
to Paltalk.

 Our general and administrative expense for the
year ended December 31, 2023 decreased by $239,235, or 5.5%, as compared to the year ended December 31, 2022. The decrease in general
and administrative expense for the year ended December 31, 2023, was mainly due to a decrease of professional fees of $299,000, as well
as a decrease in headcount costs, including non-cash stock compensation expense, of approximately $206,000. This was offset by an increase
in non-cash amortization of approximately $221,000 related to the acquisition of the ManyCam assets.

 We recorded a non-cash impairment loss on digital
tokens of $7,262 for the year ended December 31, 2022 as a result of the decline in the quoted market prices of certain digital tokens
below the market price of their acquisition. There was no such impairment loss for year ended December 31, 2023.

 Non-Operating Income

 The following table presents the components of
non-operating income for the year ended December 31, 2023 and the year ended December 31, 2022, the increase between those periods and
the percentage increase between those periods and the percentage of total revenue that each represented for those periods:

 $

 %

 % of Revenue Years Ended

 2023

 2022

 2023

 2022

 Interest income, net

 $
 639,611

 $
 74,895

 $
 564,716

 754.0
 %

 5.8
 %

 0.7
 %

 Other income, net

 343,045

 --

 343,045

 100.0
 %

 3.1
 %

 0.0
 %

 Total non-operating income

 $
 982,656

 $
 74,895

 $
 907,761

 1,212.0
 %

 8.9
 %

 0.7
 %

 Non-operating income for the year ended December
31, 2023 was $982,656, an increase of $907,761, or 1,212.0%, as compared to non-operating income of $74,895 for the year ended December
31, 2022. The increase in interest income was the result of interest earned in a high-yield bank account. The increase in other income
was the result of recording the ERTC.

 Liquidity and Capital Resources

 2023

 2022

 Consolidated Statements of Cash Flows Data:

 Net cash used in operating activities

 $
 (1,079,671
)

 $
 (2,956,724
)

 Net cash used in investing activities

 (85,000
)

 (2,942,279
)

 Net cash used in financing activities

 (7,213
)

 (997,924
)

 Net change in cash and cash equivalents

 $
 (1,171,884
)

 $
 (6,896,927
)

 Currently, our primary source of liquidity is
cash on hand and cash flows from continuing operations, and we believe that our cash and cash equivalents balance and our expected cash
flow from operations will be sufficient to meet all of our financial obligations for one year from the date these financial statements
are issued. As of December 31, 2023, we had approximately $13.6 million of cash and cash equivalents.

 Our use of working capital is related to product
development resources and an investment in marketing activities in order to maintain and create new services and features in applications
for our users. In particular, a significant portion of our working capital has been allocated to the improvement of our products. In
addition, during the year ended December 31, 2023, we spent $7,213 in connection with our stock repurchase plan (the "Stock Repurchase
Plan") as we purchased a total of 5,192 shares at an average share price of $1.39 per share. The Stock Repurchase Plan expired
on March 29, 2023 pursuant to its terms and has not been renewed. In the future, we may continue to seek to grow our business by expending
our capital resources to fund strategic acquisitions, investments and partnership opportunities.

 Operating Activities

 Net cash used in operating activities was $1,079,671
for the year ended December 31, 2023, as compared to net cash used in operating activities of $2,956,724 for the year ended December
31, 2022. The decrease in cash used in the period was primarily the result of the improvement in the net loss, which was attributed to
a reduction in operating expenses as a result of streamlined operations.

 Investing Activities

 Net cash used in investing activities was $85,000
for the year ended December 31, 2023, as compared to net cash used in investing activities of $2,942,279 for the year ended December
31, 2022. The decrease in cash flows from investing activities resulted primarily from the ManyCam acquisition.

 Financing Activities

 Net cash used in financing activities was $7,213
for the year ended December 31, 2023, as compared to net cash used in financing activities of $997,924 for the year ended December 31,
2022. During fiscal 2022, the use of cash of $997,924 was attributed to the Company's repurchase of the Company's stock pursuant
to its Stock Repurchase Plan. The Stock Repurchase Plan expired on March 29, 2023 pursuant to its terms and has not been renewed.

 Contractual Obligations and Commitments

 On June 7, 2016, we entered into a lease agreement
with Jericho Executive Center LLC for office space at 30 Jericho Executive Plaza in Jericho, New York, which commenced on September 1,
2016 and ran through November 30, 2021. On April 9, 2021, we entered into a lease extension agreement with Jericho Executive Center LLC
for the office space at 30 Jericho Executive Plaza in Jericho, New York, which commenced on December 1, 2021 and runs through November
30, 2024. Our monthly office rent payments under the lease are currently approximately $7,081 per month.

 Critical Accounting Estimates

 The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial
statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination
of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may
be material to the financial statements. Estimates made in accordance with GAAP that involve a significant level of estimation uncertainty
and have had or are reasonably likely to have a material impact on our financial condition.

 During the year ended December 31, 2023, there
were no critical accounting estimates made by management that would involve a significant level of estimation uncertainty and have had
or are reasonably likely to have a material effect impact on the financial statements condition or results of operations of the Company.
During the year ended December 31, 2022, the most significant accounting estimate inherent in the preparation of the financial statements
included the discount rates and weighted average costs of capital used in the fair value of the ManyCam intangible assets and in assigning
their respective useful lives. These fair values and estimates were based on a number of factors, including a valuation from an independent
third party.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA

 Page

 Number

 Report of Independent Registered
 Public Accounting Firm (PCAOB No. 688)

 Consolidated Balance Sheets
 as of December 31, 2023 and 2022

 Consolidated Statements of
 Operations for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of
 Changes in Stockholders' Equity for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of
 Cash Flows for the Years Ended December 31, 2023 and 2022

 Notes to Consolidated Financial
 Statements

 F- 1

 REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

 To the Stockholders and Board of Directors of

 Paltalk, Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheets of Paltalk, Inc. and Subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated
statements of operations, changes in stockholders' equity and cash flows for each of the two years in the period ended December
31, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of
its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles
generally accepted in the United States of America.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to
assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matters

 Critical audit matters are matters arising from
the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and
that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. We determined that there are no critical audit matters.

 /s/ Marcum llp

 Marcum llp

 We have served as the Company's auditor since 2016.

 New York, NY

 F- 2

 CONSOLIDATED BALANCE SHEETS

 2023

 2022

 Assets

 Current assets:

 Cash and cash equivalents

 $
 13,568,049

 14,739,933

 Accounts receivable, net of allowances of $ 23,326 and $ 3,648 as of December 31, 2023 and 2022, respectively

 92,704

 122,297

 Employee retention tax credit receivable, net

 114,212

 --

 Prepaid expense and other current assets

 990,634

 543,199

 Total current assets

 14,765,599

 15,405,429

 Operating lease right-of-use asset

 77,005

 159,181

 Goodwill

 6,326,250

 6,326,250

 Intangible assets, net

 2,704,477

 3,526,811

 Other assets

 13,937

 13,937

 Total assets

 $
 23,887,268

 25,431,608

 Liabilities and stockholders' equity

 Current liabilities:

 Accounts payable

 $
 792,053

 1,013,637

 Accrued expenses and other current liabilities

 226,120

 225,193

 Contingent consideration

 --

 85,000

 Operating lease liabilities, current portion

 77,005

 82,176

 Deferred subscription revenue

 2,043,362

 2,257,452

 Total current liabilities

 3,138,540

 3,663,458

 Operating lease liabilities, non-current portion

 --

 77,005

 Deferred tax liability

 614,041

 716,903

 Total liabilities

 3,752,581

 4,457,366

 Commitments and contingencies (Note 9)

 Stockholders' equity:

 Common stock, $ 0.001 par value, 25,000,000 shares authorized, 9,864,120 shares issued and 9,222,157 and 9,227,349 shares outstanding as of December 31, 2023 and 2022, respectively

 9,864

 9,864

 Treasury stock, 641,963 and 636,771 shares repurchased as of December 31, 2023 and 2022, respectively

 ( 1,199,337
)

 ( 1,192,124
)

 Additional paid-in capital

 36,208,728

 35,973,735

 Accumulated deficit

 ( 14,884,568
)

 ( 13,817,233
)

 Total stockholders'
 equity

 20,134,687

 20,974,242

 Total liabilities and
 stockholders' equity

 $
 23,887,268

 25,431,608

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 3

 CONSOLIDATED STATEMENTS OF OPERATIONS

 2023

 2022

 Revenues

 Subscription revenue

 $
 10,646,700

 $
 10,662,691

 Advertising revenue

 333,144

 326,854

 Total revenue

 10,979,844

 10,989,545

 Costs and expenses

 Costs of revenue

 3,238,243

 2,823,570

 878,657

 1,571,275

 4,860,607

 5,934,433

 4,072,580

 4,311,815

 --

 7,262

 Total costs and expenses

 13,050,087

 14,648,355

 Loss from operations

 ( 2,070,243
)

 ( 3,658,810
)

 Interest income, net

 639,611

 74,895

 Other income, net

 343,045

 --

 Loss from operations before income tax benefit

 ( 1,087,587
)

 ( 3,583,915
)

 Income tax benefit

 20,252

 171,665

 $
)

)

 Net loss per share of common stock:

 Basic

 $
 ( 0.12
)

 $
 ( 0.35
)

 Diluted

 $
 ( 0.12
)

 $
 ( 0.35
)

 Weighted average number of shares of common stock used in calculating
 net loss per share of common stock:

 Basic

 9,222,206

 9,638,567

 Diluted

 9,222,206

 9,638,567

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 4

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY

 FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 Common

 Stock

 Treasury

 Stock

 Additional
 Paid-in

 Accumulated

 Total
 Stockholders'

 Shares

 Shares

 Capital

 Deficit

 Equity

 Balance at December 31, 2021

 9,864,120

 $
 9,864

 ( 31,963
)

 $
 ( 194,200
)

 $
 35,639,910

 $
 ( 10,404,983
)

 $
 25,050,591

 Stock-based compensation expense

 -

 -

 -

 -

 -

 Repurchases of common stock

 -

 -

 ( 604,808
)

 ( 997,924
)

 -

 -

 ( 997,924
)

 -

 -

 -

 -

 -

)

)

 Balance at December 31, 2022

 9,864,120

 $
 9,864

 ( 636,771
)

 $
 ( 1,192,124
)

 $
 35,973,735

 $
 ( 13,817,233
)

 $
 20,974,242

 Stock-based compensation expense

 -

 -

 -

 -

 -

 Repurchases of common stock

 -

 -

 ( 5,192
)

 ( 7,213
)

 -

 -

 ( 7,213
)

 -

 -

 -

 -

 -

)

)

 Balance at December 31, 2023

 9,864,120

 9,864

 ( 641,963
)

 ( 1,199,337
)

 36,208,728

 ( 14,884,568
)

 20,134,687

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 5

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2023

 2022

 Cash flows from operating activities:

 $
)

 $
)

 Adjustments to reconcile net loss from operations to net cash
 used in operating activities:

 Depreciation of property and equipment

 --

 69,599

 Amortization of intangible assets

 822,334

 601,264

 Amortization of operating lease right-of-use assets

 82,176

 80,310

 --

 7,262

 Income tax benefit

 20,252

 --

 Deferred tax liability

 ( 123,114
)

 ( 171,665
)

 Stock-based compensation

 Bad debt expense

 49,274

 --

 Changes in operating assets and liabilities:

 Accounts receivable, net

 ( 19,681
)

 31,151

 Operating lease liability

 ( 82,176
)

 ( 80,310
)

 Employee retention tax credit receivable, net

 ( 114,212
)

 --

 Prepaid expense and other current assets

 ( 447,435
)

 ( 303,941
)

 Accounts payable, accrued expenses and other current liabilities

 ( 220,657
)

 ( 453,928
)

 Deferred subscription revenue

 ( 214,090
)

 341,959

 Net cash used in operating activities

 ( 1,079,671
)

 ( 2,956,724
)

 Cash flows from investing activities:

 Acquisition of ManyCam assets

 --

 ( 2,700,000
)

 Acquisition related costs of ManyCam assets

 --

 ( 242,279
)

 Payment of contingent consideration

 ( 85,000
)

 --

 Net cash used in investing activities

 ( 85,000
)

 ( 2,942,279
)

 Cash flows from financing activities:

 Purchase of treasury stock

 ( 7,213
)

 ( 997,924
)

 Net cash used in financing activities

 ( 7,213
)

 ( 997,924
)

 Net decrease in cash and cash equivalents

 ( 1,171,884
)

 ( 6,896,927
)

 Balance of cash and cash equivalents at beginning of period

 14,739,933

 21,636,860

 Balance of cash and cash equivalents at end of period

 $
 13,568,049

 $
 14,739,933

 Supplemental disclosure of cash flow information:

 Non-cash investing and financing activities:

 Deferred tax liability associated with the acquisition of ManyCam
 assets

 $
 --

 $
 904,253

 Accrued contingent consideration

 $
 --

 85,000

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 6

 1. Organization
and Description of Business

 The accompanying consolidated financial statements
include Paltalk, Inc. and its wholly owned subsidiaries, A.V.M. Software, Inc., Paltalk Software Inc., Paltalk Holdings, Inc., Tiny Acquisition
Inc., Camshare, Inc., Fire Talk LLC, Vumber LLC and ManyCam ULC (collectively, the "Company").

 The Company is a communications software innovator
that powers multimedia social applications. The Company's product portfolio includes Paltalk, Camfrog and Tinychat, which together
host a large collection of video-based communities. The Company's other products are ManyCam and Vumber. ManyCam is a live streaming
software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing apps and
distance learning tools. Vumber is a telecommunications services provider that enables users to communicate privately by having multiple
phone numbers with any area code through which calls can be forwarded to a user's existing telephone number. The Company has an
over 20-year history of technology innovation and holds 8 patents.

 Impact of Macro-Economic Factors

 The Company's results of operations have
been and may continue to be negatively impacted by macro-economic factors, including the timing of economic recessions and/or recovery
and the overall inflationary environment. Prolonged periods of inflation have affected, and may continue to affect, the Company's
ability to target new customers as well as keep existing customers engaged and may ultimately have a correlating effect on its users'
discretionary spending. Additionally, the closures of certain banks in 2023 and their placement into receivership with the Federal Deposit
Insurance Corporation created bank-specific and broader financial institution liquidity challenges and concerns. Future adverse developments
with respect to specific financial institutions or the broader financial services industry may create additional market and economic
uncertainty, which could affect the Company's industry.

 Employee Retention
Tax Credit

 Under the provisions
of the extension of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Company was eligible for
a refundable employee retention tax credit (the "ERTC") subject to certain criteria. During the year ended December 31, 2023,
the Company applied for the ERTC and recorded a receivable in the amount of $ 343,045, net of related costs, which was recognized in the
Company's condensed consolidated statement of operations as other income. As of December 31, 2023, the Company received an aggregate
of $ 294,833, which was recorded as a reduction of the receivable on our condensed consolidated balance sheet.

 2. Summary
of Significant Accounting Policies

 Principles of Consolidation

 The accompanying consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries and were prepared in conformity with accounting principles generally
accepted in the United States of America ("GAAP") and with the requirements of the Security and Exchange Commission ("SEC").
All intercompany balances and transactions have been eliminated upon consolidation.

 Recent Accounting Standards

 In December 2023, the Financial Accounting Standards
Board issued Accounting Standards Update ("ASU") 2023-09, " Income Taxes (Topic 740): Improvements to Income Tax
Disclosures ". ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures for publicly
traded companies. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes
to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for the Company in the annual period beginning
January 1, 2025, though early adoption is permitted. The Company is currently in the process of determining the impact of adoption of
the provisions of ASU 2023-09 on its financial position, results of operations and cash flows.

 In June 2016, the Financial Accounting Standards
Board issued ASU No. 2016-13 "Financial Instruments - Credit Losses (Topic 326)" and also issued subsequent amendments to
the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, "Topic 326"). Topic 326 requires the measurement
and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model
with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. The Company adopted
ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on the Company's financial position,
results of operations or cash flows.

 F- 7

 Use of Estimates

 The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial
statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination
of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may
be material to the financial statements.

 During the year ended December 31, 2023, there
were no critical accounting estimates made by management that would have a material effect on the financial statements.

 During the year ended December 31, 2022, the
most significant accounting estimate inherent in the preparation of the financial statements included the discount rates and weighted
average costs of capital used in the fair value of the ManyCam intangible assets and in assigning their respective useful lives. These
fair values and estimates were based on a number of factors, including a valuation from an independent third party.

 Revenue Recognition

 In accordance with Accounting Standards and Codifications
("ASC") 606, Revenue from Contracts with Customers, revenue from contracts with customers is recognized when control
of the promised services is transferred to the customers in an amount that reflects the consideration the Company expects to receive
in exchange for those services. Sales tax is excluded from reported revenue. The Company has elected the practical expedient allowable
by the guidance to not disclose information about remaining performance obligations pertaining to contracts that have an original expected
duration of one year or less.

 Subscription Revenue

 The Company generates subscription revenue primarily
from monthly premium subscription services. Subscription revenues are presented net of refunds, credits, and known and estimated credit
card chargebacks. During the years ended December 31, 2023 and 2022, subscriptions were offered in durations of one-, six- twelve- and
twenty four-month terms. All subscription fees, however, are paid by credit card at the origination of the subscription regardless of
the term of the subscription. Revenues from multi-month subscriptions are recognized on a straight-line basis over the period where the
service is offered to the customer, indicated by length of the subscription term purchased. The unearned portion of subscription revenue
is presented as deferred revenue in the accompanying consolidated balance sheets. Deferred revenue at December 31, 2022 was $ 2,257,452,
which was subsequently recognized as subscription revenue during the year ended December 31, 2023. The ending balance of deferred revenue
at December 31, 2023 was $ 2,043,362.

 In addition, the Company offers virtual gifts
to its users. Users may purchase credits in $5, $10 or $20 increments that can be redeemed for a host of virtual gifts such as a rose,
a beer or a car, among other items. These gifts are given among users to enhance communication and are typically redeemed within 30 days
of purchase. Upon purchase, the virtual gifts are credited to the users' account and are under the users' control. Virtual
gift revenue is recognized upon the users' redemption of virtual gifts at the fixed transaction price and included in subscription
revenue in the accompanying consolidated statements of operations. Virtual gift revenue is presented as deferred revenue in the consolidated
balance sheets until virtual gifts are redeemed. Virtual gift revenue was $ 4,522,461 and $ 4,550,864 for the years ended December 31,
2023 and 2022, respectively. The ending balance of deferred revenue from virtual gifts at December 31, 2023 and 2022 was $ 374,696 and
$ 393,433, respectively.

 F- 8

 Net (Loss) Income Per Share

 Basic earnings and net (loss) income per share are computed by dividing
the net (loss) income available to common stockholders by the weighted average number of common shares outstanding during the period as
defined by ASC Topic 260, Earnings Per Share. Diluted earnings per share is computed using the weighted average number of common
shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common
shares issuable upon the exercise of stock options (using the treasury stock method). To the extent stock options are antidilutive, they
are excluded from the calculation of diluted income per share.

 Cash and Cash Equivalents

 The Company considers all highly liquid investments
with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of
cash on deposit with banks and money market funds. The Company maintains cash in bank accounts which, at times, may exceed federally
insured limits. As part of its cash management process, the Company periodically reviews the relative credit standing of these banks.
The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions
and has determined the credit exposure to be negligible.

 Goodwill

 Goodwill is recorded when the purchase price
paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. The Company evaluates
its goodwill for impairment in accordance with ASC 350, Intangibles – Goodwill and Other (as amended by ASU 2017-04), by
assessing qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the
fair value of a reporting unit is less than its carrying amount, including goodwill. The Company performs the quantitative goodwill impairment
test, if, after assessing the totality of events or circumstances such as those described in paragraph ASC 350-20-35-3C(a) through (g),
the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An impairment
charge is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value, limited to the total
amount of goodwill related to the reporting unit.

 The Company tests the recorded amount of goodwill
for impairment on an annual basis on December 31 of each fiscal year or more frequently if there are indicators that the fair value of
the goodwill exceeds its carrying amount. The Company has one reporting unit. The Company performed a qualitative assessment and concluded
that no impairment existed as of December 31, 2023 and 2022.

 Income Taxes

 The Company accounts for income taxes under the
asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences
of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities
on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in
effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and
liabilities is recognized in income in the period that includes the enactment date.

 The Company recognizes deferred tax assets to
the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company
considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected
future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to
realize deferred taxes in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax
asset valuation allowance, which would reduce the provision for income taxes.

 The Company records uncertain tax positions in
accordance with ASC No. 740, Accounting for Income Taxes ("ASC 740") on the basis of a two-step process in which (1)
the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits
of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the
largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

 The Company recognizes interest and penalties
related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of income. Accrued interest
and penalties would be included on the related tax liability line in the accompanying consolidated balance sheets.

 The Company's policy for global intangible
low-taxed income is to treat, as a period cost, when incurred.

 Inflation
Reduction Act of 2022

 On August 16,
2022, the Inflation Reduction Act of 2022 (the "IR Act") was signed into federal law. The IR Act provides for, among other
things, a new U.S. federal 1 % excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S.
domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on
the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally
 1 % of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax,
repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock
repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury
has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
 The IR Act was not applicable to the Company in the current year given that repurchases of
stock were below the threshold required to be subject to taxation.

 F- 9

 Intangible Assets

 The Company's acquired amortizable intangible
assets primarily consist of the ManyCam assets acquired in June 2022, which consist of internally developed software, intellectual property
(trade names, trademarks and URLs) and subscriber relationships/ customer lists.

 The Company's intangible assets represent
definite lived intangible assets, which are being amortized on a straight-line basis over their estimated useful lives as follows:

 Patents

 20 years

 Trade names, trademarks, product names, URLs

 5 - 10 years

 Internally developed software

 5 - 7 years

 Non-compete agreements

 3 years

 Subscriber/customer relationships

 3 - 12 years

 The Company reviews intangible assets for impairment
whenever events or changes in business circumstances indicate that the carrying amount of the assets might not be recoverable. Factors
that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation
to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets.
If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted
cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss
would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying
amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined
based on discounted cash flows. No impairments were recorded on intangible assets as no impairment indicators were noted for the periods
presented in these consolidated financial statements.

 3. Intangible
Assets, Net

 Intangible assets, net consisted of the following for the periods
presented:

 2023

 2022

 Gross
 Carrying

 Accumulated
 Amortization

 Net
 Carrying

 Gross
 Carrying

 Accumulated
 Amortization

 Net
 Carrying

 Patents

 $
 50,000

 $
 ( 36,250
)

 $
 13,750

 $
 50,000

 $
 ( 33,750
)

 $
 16,250

 Trade names, trademarks, product names, URLs

 1,022,425

 ( 644,390
)

 378,035

 1,022,425

 ( 562,114
)

 460,311

 Internally developed software

 4,180,005

 ( 2,478,408
)

 1,701,597

 4,180,005

 ( 2,165,550
)

 2,014,455

 Subscriber/customer relationships

 3,553,102

 ( 2,942,007
)

 611,095

 3,553,102

 ( 2,517,307
)

 1,035,795

 Total intangible assets

 $
 8,805,532

 $
 ( 6,101,055
)

 $
 2,704,477

 $
 8,805,532

 $
 ( 5,278,721
)

 $
 3,526,811

 During the year ended December 31, 2023, in connection
with the previously acquired ManyCam assets and pursuant to the securities purchase agreement related to such asset acquisition, the
Company made an earn-out payment of $ 85,000 because the sales of the ManyCam software, less chargebacks and refunds, in the six-month
period following the closing of the acquisition exceeded $ 600,000 but were less than $ 700,000.

 Amortization expense for the years ended December
31, 2023 and 2022 was $ 822,334 and $ 601,264, respectively. The aggregate amortization expense for each of the next five years and thereafter
is estimated to be $ 821,687 in 2024, $ 568,529 in 2025, $ 382,133 in 2026, $ 382,133 in 2027, $ 382,133 in 2028, and $ 167,862 thereafter.

 4. Income Taxes

 The Organization for Economic Co-operation and
Development (OECD) Pillar Two Model Rules are intended to apply for tax years beginning in 2024. The Pillar Two Model Rules establishes
a global minimum tax of 15 % for multinational companies with consolidated revenue above 750 million. Many foreign jurisdictions
have adopted the Pillar Two Model Rules and other foreign jurisdictions are in the process of enacting legislation to adopt it. The Company
does not expect to be impacted by the Pillar Two Model Rules as it will not meet the consolidated revenue threshold in the near term.

 F- 10

 The components of loss before income tax benefit
are as follows:

 2023

 2022

 Domestic Operations

 $
 ( 498,673
)

 $
 ( 2,683,143
)

 Foreign Operations

 ( 588,914
)

 ( 900,772
)

 $
 ( 1,087,587
)

 $
 ( 3,583,915
)

 The Company's benefit for income taxes
is comprised of the following:

 2023

 2022

 Current

 Federal

 $
 -

 $
 -

 State and local

 6,579

 15,685

 Foreign

 76,031

 -

 Total Current

 82,610

 15,685

 Deferred

 Federal

 -

 -

 State and local

 -

 -

 Foreign

 ( 102,862
)

 ( 187,350
)

 Change in Valuation Allowance

 -

 -

 Total Deferred

 ( 102,862
)

 ( 187,350
)

 Total Benefit

 $
 ( 20,252
)

 $
 ( 171,665
)

 The Company's effective tax rate differs
from the U.S. federal statutory income tax rate of 21 3 %
for 2023 and 2022 as follows:

 2023

 2022

 Income tax benefit at federal statutory rate

 21.0
 %

 21.0
 %

 Permanent Differences

 -

 %

 -

 %

 State and local taxes

 ( 1.8
)%

 ( 0.7
)%

 Valuation allowance

 ( 10.5
)%

 ( 7.6
)%

 Deferred tax adjustment

 ( 1.9
)%

 -

 %

 Share based compensation

 ( 6.4
)%

 ( 7.8
)%

 Foreign Income Tax Rate Differential

 1.1
 %

 0.5
 %

 Other

 0.5
 %

 ( 0.6
)%

 Effective tax rate

 2.0
 %

 4.8
 %

 F- 11

 Deferred income taxes reflect the net tax effects
of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used
for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

 2023

 2022

 Deferred Tax Assets:

 U.S. federal and state net operating losses

 $
 2,939,449

 $
 3,436,822

 Foreign net operating losses

 -

 103,375

 Share-based compensation

 480,773

 511,603

 Amortization of intangible assets

 429,651

 583,727

 Rent

 17,291

 36,413

 Capitalized IRC §174 costs

 1,972,960

 1,134,472

 Tax credits

 62,969

 62,969

 Other

 285,245

 257,473

 Subtotal

 6,188,338

 6,126,854

 Less Valuation Allowance:

 ( 6,099,163
)

 ( 5,984,591
)

 Total Deferred Tax Assets

 89,175

 142,263

 Deferred Tax Liabilities:

 Amortization of intangible assets

 ( 615,452
)

 ( 820,279
)

 Property and equipment

 ( 12,850
)

 ( 31,262
)

 Other

 ( 74,914
)

 ( 7,625
)

 Total Deferred Tax Liabilities

 ( 703,216
)

 ( 859,166
)

 Net Deferred Tax Liability

 $
 ( 614,041
)

 $
 ( 716,903
)

 In assessing the Company's ability to recover
its deferred tax assets, the Company evaluated whether it is more likely than not that some portion or the entire deferred tax asset
will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those
periods in which temporary differences become deductible and/or net operating losses can be utilized. The Company considered all positive
and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized. This evidence
includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and
projected future taxable income. A significant piece of objective negative evidence evaluated was cumulative loss incurred over the three-year
period ended December 31, 2023. Such objective evidence limits the ability to consider other subjective evidence, such as our projections
for future growth. Based on the weight of available evidence, the Company determined that its U.S. deferred tax assets are not realizable
on a more-likely-than-not basis and has recorded a valuation allowance against its net U.S. deferred tax assets. The Company's
valuation allowance increased by $ 114,572 during 2023. The Company will continue to evaluate its deferred tax assets to determine whether
any changes in circumstances could affect the realization of their future benefit. If it is determined in future periods that portions
of the Company's deferred income tax assets satisfy the realization standards, the valuation allowance will be reduced accordingly.

 As of December 31, 2023, the Company has U.S.
federal net operating loss carryforwards of approximately $12.8 million, of which $10.4 million continue to be subject to a severe annual
limitation under Section 382. Approximately $1.3 million of the $2.4 million not subject to limitation under Section 382 may be used
to offset 100% of future taxable income but expire in 2036-2037, if not utilized. The remaining $1.1 million not subject to limitation
under Section 382 may be used to offset 80% of future taxable income and can be carried forward indefinitely.

 The Company applies the applicable authoritative
guidance which prescribes a comprehensive model for the manner in which a company should recognize, measure, present and disclose in
its financial statements all material uncertain tax positions that the Company has taken or expects to take on a tax return. As of December 31,
2023, the Company has no uncertain tax positions. As such, there are no uncertain tax positions for which it is reasonably possible that
the total amounts of unrecognized tax benefits will significantly increase or decrease within twelve months from December 31, 2023.

 F- 12

 The open tax years for the federal income tax
return are 2020 through 2023. The state income tax returns have varying statutes of limitations. The open tax years relating to any of
the Company's federal and state net operating losses begin in 2020.

 5. Accrued
Expenses and Other Current Liabilities

 Accrued expenses and other current liabilities consisted of the following
for the periods presented:

 2023

 2022

 Compensation, benefits and payroll taxes

 $
 91,250

 $
 114,000

 Other accrued expenses

 134,870

 111,193

 Total accrued expenses and other current liabilities

 $
 226,120

 $
 225,193

 6. Stockholders'
Equity

 The Paltalk, Inc. Amended and Restated 2011 Long-Term
Incentive Plan (the "2011 Plan") was terminated as to future awards on May 16, 2016. A total of 121,930 shares of the Company's
common stock may be issued pursuant to outstanding options awarded under the 2011 Plan; however, no additional awards may be granted
under such plan. The Paltalk, Inc. 2016 Long-Term Incentive Plan (the "2016 Plan") was adopted by the Company's stockholders
on May 16, 2016 and permits the Company to award stock options (both incentive stock options and non-qualified stock options), stock
appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other stock-based
awards and cash-based incentive awards to its employees (including an employee who is also a director or officer under certain circumstances),
non-employee directors and consultants. The maximum number of shares of common stock that may be issued pursuant to awards under the
2016 Plan is 1,300,000 shares, 100 % of which may be issued pursuant to incentive stock options. In addition, the maximum number of shares
of common stock that may be issued under the 2016 Plan may be increased by an indeterminate number of shares of common stock underlying
outstanding awards issued under the 2011 Plan that are forfeited, expired, cancelled, or settled in cash. As of December 31, 2023, there
were 665,335 shares available for future issuance under the 2016 Plan.

 Stock Options

 The following table summarizes the assumptions
used in the Black-Scholes pricing model to estimate the fair value of the options granted during the years ended:

 2023

 2022

 Expected volatility

 155 – 161
 %

 173 – 182
 %

 Expected life of option

 5.2 – 6.2

 5.2 – 6.2

 Risk free interest rate

 4.26
 %

 2.53
 %

 Expected dividend yield

 0.0
 %

 0.0
 %

 The expected life of the options is the period
of time over which employees and non-employees are expected to hold their options prior to exercise. The expected life of options has
been determined using the "simplified" method as prescribed by Staff Accounting Bulletin 110, which uses the midpoint between
the vesting date and the end of the contractual term. The volatility of the Company's common stock is calculated using the Company's
historical volatilities beginning at the grant date and going back for a period of time equal to the expected life of the award. The
Company estimates potential forfeitures of stock awards and adjusts recorded stock-based compensation expense accordingly. The Company
estimates pre-vesting forfeitures primarily based on the Company's historical experience and is adjusted to reflect actual forfeitures
as the stock-based awards vest.

 F- 13

 The following tables summarize stock option activity during the year
ended December 31, 2023:

 Weighted

 Average

 Exercise

 Options

 Price

 Outstanding at January 1, 2023

 622,074

 $
 3.71

 Granted

 149,000

 $
 1.89

 Exercised during period

 -

 -

 Forfeited or canceled, during the period

 ( 26,270
)

 $
 1.77

 Expired, during the period

 ( 3,990
)

 $
 21.60

 Outstanding at December 31, 2023

 740,814

 $
 3.32

 Exercisable at December 31, 2023

 550,164

 $
 3.72

 At December 31, 2023, there was $ 338,194 of total
unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of 2.94
years.

 On December 31, 2023, the aggregate intrinsic
value of stock options that were outstanding and exercisable was $ 136,971 and $ 79,371, respectively. On December 31, 2022, the aggregate
intrinsic value of stock options that were outstanding and exercisable was $ 9,360. The intrinsic value for stock options is calculated
based on the exercise price of the underlying awards and the fair value of such awards as of the period-end date.

 During the year ended December 31, 2023, the
Company granted stock options to members of the Board of Directors (other than Mr. Cook) to purchase an aggregate of 24,000 shares of
common stock at an exercise price of $ 1.94 per share. The stock options vest in four equal quarterly installments on the last day of
each calendar quarter in 2023 and have a term of ten years. In addition to the foregoing, the Company granted a stock option to Mr. Cook
to purchase an aggregate of 100,000 shares of common stock at an exercise price of $ 1.86. The stock option vests in four equal annual
installments beginning on the first anniversary of the date of the grant and has a term of ten years. During the year ended December
31, 2023, the Company also granted options to employees to purchase an aggregate of 25,000 shares of common stock. These options have
a vesting date ranging between the grant date and up to four years, have a term of ten years and have an exercise price of $ 1.94.

 The aggregate fair value for the options granted
during the years ended December 31, 2023 and 2022 was $ 268,200 and $ 636,957, respectively.

 Stock-based compensation expense for the Company's
stock options included in the consolidated statements of operations was as follows:

 2023

 2022

 $
 11,750

 $
 19,500

 2,004

 2,056

 29,946

 24,748

 191,293

 287,521

 Total stock-based compensation expense

 $

 $

 Treasury Shares

 The Board of Directors approved a stock repurchase
plan for up to $ 1,750,000 of the Company's outstanding common stock (the "Stock Repurchase Plan"), effective as of
March 29, 2022 and expiring on the one-year anniversary of such date. Under the Stock Repurchase Plan, shares may be repurchased from
time-to-time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance
with federal securities laws, including Rule 10b5-1 programs, and the Stock Repurchase Plan may be suspended or discontinued at any time.
The actual timing, number and value of shares repurchased will be determined by a committee of the Board of Directors at its discretion
and will depend on a number of factors, including the market price of the Company's common stock, general market and economic conditions,
alternative investment opportunities and other corporate considerations. The Stock Repurchase Plan expired on March 29, 2023 pursuant
to its terms and has not been renewed.

 F- 14

 As of December 31, 2023, the Company had 641,963
shares of its common stock classified as treasury shares on the Company's consolidated balance sheets.

 7. Net (Loss)
Income Per Share

 Basic earnings and net (loss) income per share
are computed by dividing the net (loss) income available to common stockholders by the weighted average number of common shares outstanding
during the period as defined by ASC Topic 260, Earnings Per Share. Diluted earnings per share is computed using the weighted average
number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the
incremental common shares issuable upon the exercise of stock options (using the treasury stock method). To the extent stock options
are antidilutive, they are excluded from the calculation of diluted loss per share. For the year ended December 31, 2023, 740,814 of
shares issuable upon the exercise of outstanding stock options were not included in the computation of diluted net loss per share from
operations because their inclusion would be antidilutive. For the year ended December 31, 2023, no shares issuable upon the exercise
of outstanding stock options were included in the computation of diluted net income per share from operations because their inclusion
would be dilutive. For the year ended December 31, 2022, 622,074 of shares issuable upon the exercise of outstanding stock options were
not included in the computation of diluted net loss per share from operations because their inclusion would be antidilutive. For the
year ended December 31, 2022, no shares issuable upon the exercise of outstanding stock options were included in the computation of diluted
net income per share from operations because their inclusion would be dilutive.

 The following table summarizes the net loss per share calculation
for the periods presented:

 2023

 2022

 Net loss from operations – basic and diluted

 $
)

 $
)

 Weighted average shares outstanding – basic

 9,222,206

 9,638,567

 Weighted average shares outstanding – diluted

 9,222,206

 9,638,567

 Per share data:

 Basic from operations

 $
 ( 0.12
)

 $
 ( 0.35
)

 Diluted from operations

 $
 ( 0.12
)

 $
 ( 0.35
)

 8. Leases

 Operating Leases

 On June 7, 2016, the Company entered into a lease
agreement with Jericho Executive Center LLC for office space at 30 Jericho Executive Plaza in Jericho, New York, which commenced on September
1, 2016 and ran through November 30, 2021. The Company's monthly office rent payments under the lease are currently approximately
$ 7,081 per month. On April 9, 2021, the Company entered into a lease extension agreement with Jericho Executive Center LLC for the office
space at 30 Jericho Executive Plaza in Jericho, New York, which commenced on December 1, 2021 and runs through November 30, 2024. The
modification resulted in an increase its ROU assets and lease liabilities of $ 0.2 million, using a discount rate of 2.30 %.

 As of December 31, 2023, the Company had no long-term
leases that were classified as financing leases. As of December 31, 2023, the Company did not have additional operating and financing
leases that had not yet commenced.

 F- 15

 At December 31, 2023, the Company had operating
lease liabilities of approximately $ 77,005 and right-of-use assets of approximately $ 77,005, which are included in the consolidated balance
sheets.

 Total rent expense for the year ended December
31, 2023 was $ 82,447, of which $ 6,000 was sublease income. Total rent expense for the year ended December 31, 2022 was $ 83,084, of which
$ 6,000 was sublease income. Rent expense is recorded under general and administrative expense in the consolidated statements of operations.

 The following table summarizes the Company's
operating leases for the periods presented:

 2023

 2022

 Cash paid for amounts included in the measurement of operating lease
 liabilities:

 $
 82,176

 $
 80,310

 Weighted average assumptions:

 Remaining lease term

 0.9

 1.9

 Discount rate

 2.3
 %

 2.3
 %

 As of December 31, 2023, future minimum payments under non-cancelable
operating leases were as follows:

 For the years ending December 31,

 2024

 $
 77,894

 Total

 77,894

 Less: present value adjustment

 ( 889
)

 Present value of minimum lease payments

 $
 77,005

 9. Commitments
and Contingencies

 Patent Litigation

 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 and denied Cisco's motion for summary judgment.
The trial is expected to be held in April of 2024.

 Legal Proceedings

 The Company may be included in legal proceedings,
claims and assessments arising in the ordinary course of business. The Company evaluates the need for a reserve for specific legal matters
based on the probability of an unfavorable outcome and the reasonability of an estimable loss. No reserve was deemed necessary as of
December 31, 2023.

 10. Subsequent
Events

 Management has evaluated subsequent events or
transactions occurring through the date the consolidated financial statements were issued and determined that no other events or transactions
are required to be disclosed herein.

 F- 16

 ITEM 9. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM 9A. CONTROLS AND PROCEDURES

 Evaluation of Disclosure Controls and Procedures

 Disclosure controls are procedures that are designed
with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Annual
Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.
Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management,
including the Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. Internal controls are procedures which are designed with the objective of providing reasonable assurance that (1) our transactions
are properly authorized, recorded and reported; and (2) our assets are safeguarded against unauthorized or improper use, to permit the
preparation of our consolidated financial statements in conformity with GAAP.

 Our management, including our chief executive
officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e)
or 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. There are inherent limitations to the effectiveness
of any system of disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognized
that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired
control objectives.

 Based on the evaluation as of December 31, 2023,
for the reasons set forth below, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures
were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and
that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer,
as appropriate, to allow timely decisions regarding required disclosure.

 Management's Annual Report on Internal Control Over Financial
Reporting

 Our management is responsible for establishing
and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act).
Our internal control system was designed to, in general, provide reasonable assurance to our management and the Board of Directors regarding
the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.

 Our chief executive officer and chief financial
officer evaluated the effectiveness of our internal control over financial reporting as of December 31, 2023, and based on that evaluation,
management concluded that our internal control over financial reporting was effective. Therefore, our management, including our chief
executive officer and chief financial officer, have concluded that our disclosure controls and procedures were effective to provide reasonable
assurance that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act
of 1934, as amended, is accumulated and communicated to the Company's management to allow timely decisions regarding required disclosures.

 The framework used by management in making that
assessment was the criteria set forth in the document entitled "Internal Control – Integrated Framework" issued by
the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

 Changes in Internal Control over Financial Reporting

 There were no changes in our internal control
over financial reporting during the quarter ended December 31, 2023 (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act)
that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 ITEM 9B. OTHER INFORMATION

 On December 14, 2023, Jason Katz, our Chief Executive
Officer and a member of the Board of Directors, adopted a Rule 10b5-1 trading arrangement (the "10b5-1 Plan") that is intended
to satisfy the affirmative defense of Rule 10b5-1(c) of the Exchange Act. The 10b5-1 Plan provides for the sale of up to 80,000 shares
of our common stock at specified market prices, commencing on the later of (i) March 14, 2024 and (ii) the second trading day following
disclosure of our financial results on Form 10-K for the fiscal year and quarter ended December 31, 2023, and ending March 15, 2025.
The 10b5-1 Plan was subsequently terminated on February 7, 2024, and no sales were made pursuant to the 10b5-1 Plan.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE

 Board of Directors

 The following table sets forth the name, age
and position of the directors serving on our Board of Directors as of March 11, 2024:

 Name

 Age

 Positions

 Chief Financial Officer
 and Director

 Chief Executive Officer,
 President, Chief Operating Officer and Chairman of the Board of Directors

 The following sets forth biographical information
and the qualifications and skills for each director:

was appointed as a member of our Board of Directors in October 2016. Mr. Abada previously served as the President of Factory
Direct Enterprises, one of the largest licensees of Ashley Furniture Home stores from March 2015 until March 2016. Prior to
then, Mr. Abada served in a variety of roles at Jennifer Convertibles Inc., a specialist sofa bed chain headquartered in New York,
where he began his career in 1982 and worked until September 2014. Most recently, Mr. Abada served as Jennifer Convertibles,
Inc.'s President, Chief Financial Officer and Chief Operating Officer, as well as a member of its board of directors, from September 1999
until 2014. From 1997 until 2003, Mr. Abada served as a member of the board of directors of CCA Industries, Inc., a public
company engaged in the manufacture and distribution of health and beauty aid products, and Mr. Abada currently serves as a member
of the board of directors of 168 5 th Avenue Realty Corp., a privately held real estate corporation. Mr. Abada holds a
B.B.A. from the Bernard Baruch College of the City University of New York.

 Mr. Abada's background and experience
as a lead executive officer and board member of public and private companies provides him with extensive knowledge of, and insights into,
financial reporting and oversight, corporate strategy and board functions.

 Geoffrey Cook was appointed as
a member of our Board of Directors in October 2023. Mr. Cook currently serves as the Chief Executive Officer of Noom, Inc. and is a member
of its board of directors. Mr. Cook also serves as the Chairman of the Board of Mindful Media Group, Inc. In 2005, Mr. Cook co-founded
The Meet Group, Inc. ("Meet Group"), a formerly-listed Nasdaq company and pioneer in the social networking and live-streaming
video industries as well as the creator economy. Mr. Cook served as Meet Group's Chief Executive Officer from 2013 until Meet Group's
sale to ParshipMeet Group in 2020. From 2020 to 2023, Mr. Cook served as co-Chief Executive Officer of ParshipMeet Group, which includes
a portfolio of dating apps such as eharmony, MeetMe, Tagged, Lovoo, Skout, and Growlr. Previously, Mr. Cook served as both founder and
Chief Executive Officer of several companies, including myYearbook.com, which following a series of acquisitions, was rebranded into
MeetMe and remains a leading social network for meeting new people in the United States. Mr. Cook was named the Ernst & Young Entrepreneur
of the Year Award Winner for the Philadelphia Region in 2011 and holds a B.A. in Economics from Harvard University.

 Mr. Cook's background and experience provide
him with unique insights regarding investments in the consumer internet space, corporate strategy and brand growth, as well as background
analyzing the risks and strategies of companies in the social media industry.

 Kara Jenny was appointed as our
Chief Financial Officer in December 2019 and as a member of our Board of Directors in November 2020. Ms. Jenny has over
20 years of senior financial expertise. During her career, Ms. Jenny has created overall corporate strategy and managed financial
and accounting operations, including SEC and Sarbanes-Oxley compliance efforts. She has also overseen customer service, operations and
legal functions as well as led strategic and annual planning processes and has been a key contributor in facilitating several rounds
of equity financing, including preferred stock offerings, private investments in public equity, rights offerings and common stock offerings.
From 2014 to 2019, Ms. Jenny was Chief Financial Officer of Walker Innovation, a publicly traded intellectual property company.
Previously, she was the Chief Financial Officer of Bluefly, Inc., an online retailer of designer apparel and accessories at a value.
Ms. Jenny began her career at Arthur Andersen LLP and is a Certified Public Accountant and a member of the American Institute of
Certified Public Accountants. She was selected to join the SEC's Advisory Committee Member on Small and Emerging Companies and
served on the Committee from 2011 until 2013.

 Ms. Jenny's background as the Chief
Financial Officer of Bluefly, Inc. and Walker Innovation, as well as her decades of experience overseeing financial and accounting operations
provide her with valuable insight into financial strategy and management of compliance processes.

 Jason Katz has served as our Chairman
of the Board of Directors, President and Chief Operating Officer since October 2016 and as our Chief Executive Office since December 2019.
Mr. Katz is the founder of A.V.M. Software, Inc. (d/b/a Paltalk) ("AVM") and served as its Chief Executive
Officer and as a member of its Board of Directors from 1998 through the completion of PeerStream's merger with AVM, pursuant to
which SAVM Acquisition Corporation, PeerStream's wholly owned subsidiary, merged with and into AVM, with AVM surviving as a wholly
owned subsidiary of PeerStream (the "AVM Merger"), in October 2016. In his capacity as an executive officer and director
of AVM, Mr. Katz oversaw the strategic direction of AVM and its subsidiaries, and also managed its system infrastructure. Mr. Katz
is an authority on instant messaging as well as web-based voice and video. Mr. Katz has appeared at numerous industry forums as
well as on Bloomberg Radio and CNN Radio. Prior to AVM, Mr. Katz co-founded MJ Capital, a money management firm. Earlier in his
career, Mr. Katz was a corporate lawyer at the New York office of Fulbright & Jaworski. Mr. Katz earned a J.D.
from the New York University School of Law (1988) and a B.A. in Economics from the University of Pennsylvania (1985).

 Mr. Katz's background and expertise
as the Chief Executive Officer of AVM and decades of industry experience provides our Board of Directors with valuable industry insight
and management expertise.

 Lance Laifer was appointed as a
member of our Board of Directors in October 2016. Mr. Laifer served as a member of AVM's Board of Directors from 1999
through the completion of the AVM Merger in October 2016. Mr. Laifer has also served as the Chief Executive Officer of Blue
Frog Open Track Media Management since 2018 and each of Old Forge Media Management and Old Forge Asset Management (together, "Old
Forge"), a network of social media advertising and marketing companies, since 2013 and 2011, respectively, as well as the Chief
Executive Officer of Laifer Capital Management, Inc., an investment firm, since 1992. Prior to his service at Old Forge, Mr. Laifer
was the Chief Executive Officer of Wapiti Capital Management, LLC. Mr. Laifer also served on the board of directors of ValueVision
from 1992 to 1995.

 Mr. Laifer's decades of experience
provide him with unique investment and capital market insights, as well as background analyzing the risks and strategies of companies
in the social media industry.

 John Silberstein was appointed
as a member of our Board of Directors in October 2016. Mr. Silberstein was a member of AVM's Board of Directors from
1999 through the completion of the AVM Merger in October 2016 and was General Counsel of AVM from 2000 to 2003. He began his career
in October 1986 as a real estate attorney at Skadden, Arps, Slate, Meagher & Flom, and in April 1989 began working
for The Mendik Company, which with its partners, owned and managed a portfolio of twelve million square feet of Class A commercial
office buildings in New York City and its suburbs. After leaving The Mendik Company, from February 1999 to April 2005,
Mr. Silberstein served as co-managing member of Five Spruce GP LLC, the managing member of a real estate company that acquired and
subsequently sold eight residential apartment buildings in New York City. Most recently, Mr. Silberstein taught high school
English at The Rivers School in Weston, Massachusetts from September 2010 to June 2016. Mr. Silberstein earned a B.A.
from Brown University and a J.D. from New York University School of Law.

 Mr. Silberstein's experience representing
AVM and other companies in complex and sophisticated matters, as well as his expertise in real estate acquisition and management, provides
him with unique insights into business strategy and leadership.

 There are no agreements or understandings between
our directors or any other person pursuant to which they were selected as a director.

 Executive Officers

 Below is information regarding each of our current
executive officers. Executive officers are appointed by the Board of Directors to serve at the discretion of the Board of Directors until
their successor is duly elected and qualified or until their earlier death, resignation, or removal.

 Name

 Age

 Title

 Chief Executive Officer, President, Chief Operating
 Officer and Chairman of the Board of Directors

 Chief Financial Officer and Director

 Senior Vice President

 Jason Katz serves as our Chief
Executive Officer, President, Chief Operating Officer and Chairman of the Board of Directors. His business experience is discussed above
in "Board of Directors."

 Kara Jenny serves as our Chief
Financial Officer and as a member of the Board of Directors. Her business experience is discussed above in "Board of Directors."

 Adam Zalko was appointed as our
Senior Vice President in February of 2023. In his capacity as Senior Vice President, Mr. Zalko drives the software vision and architecture
to keep the Company modern and promotes new feature innovation. Mr. Zalko also helps oversee other Company functions, such as product
development, marketing, IT, operations and customer service. Mr. Zalko previously served as the Vice President of Engineering
from 2018 to February 2023, preceded by Manager of Development Operations of Snap Interactive, Inc. from 2016 to 2018. Prior to
that, Mr. Zalko was a Developer at AVM Software from 2007 to 2016, initially as a Developer and then as a Senior Developer. Mr. Zalko
received a B.S. in Software Engineering from the Florida Institute of Technology.

 There
are no agreements or understandings between our executive officers or any other person pursuant to which they were selected as
an executive officer.

 Family Relationships

 There are no family relationships between our
directors and any of our executive officers.

 Company Policies

 Code of Conduct

 We have a Code of Conduct, which is applicable
to all our officers, directors and employees. The Code of Conduct addresses, among other things, record retention, conflicts of interest,
business opportunities, gifts or favors, proprietary information and disciplinary measures.

 A copy of our Code of Conduct is available on
our website at www.investors.paltalk.com/corporate-governance. We intend to disclose any amendments to our Code of Conduct or
any waivers from a provision of our Code of Conduct on our website at the foregoing internet address.

 Insider Trading Policy; Prohibition on
Hedges and Pledges

 We have an insider trading policy that prohibits
our directors, executive officers, employees, independent contractors and consultants from the purchasing or selling our securities while
being aware of material, non-public information about the Company as well as disclosing such information to others who may trade in securities
of the Company. Our insider trading policy also prohibits our directors, executive officers, employees, independent contractors and consultants
from engaging in hedging activities or other short-term or speculative transactions in the Company's securities such as short sales,
options trading, holding the Company's securities in a margin account or pledging the Company's securities as collateral
for a loan, without the advance approval of our Chief Executive Officer and Chief Financial Officer. Our insider trading policy is filed
as Exhibit 19.1 to this Annual Report on Form 10-K.

 Compensation Recovery Policy

 We have a compensation recovery policy, which
provides, among other things, that in the event the Company is required to prepare an accounting restatement due to material noncompliance
with any financial reporting requirements under federal securities laws, the Company shall recover from current and former executive
officers a portion or all, as applicable, of any incentive-based compensation that is erroneously awarded to such individuals. Our compensation
recovery policy is filed as Exhibit 97.1 to this Annual Report on Form 10-K.

 Director Nominations by Security Holders

 There have been no material changes to the procedures
by which security holders may recommend nominees to our Board of Directors since those procedures were described in our
Definitive Proxy Statement on Schedule 14A filed with the SEC on April 14, 2023.

 Meetings of the Board of Directors and Committees

 The
Board of Directors held 7 meetings and acted 7 times by unanimous written consent during the 2023 fiscal year. During 2023, each director
attended 75 % or more of the aggregate number of meetings held by the
Board of Directors and the committees of the Board of Directors on which such director served, if any, during the period for which such
person served as a director. We have not adopted a formal policy regarding director attendance at our annual stockholder meetings; however,
we encourage members of the Board of Directors to attend such meetings. Messrs. Abada, Katz, Laifer and Silberstein and Ms. Jenny, representing
all of our directors at the time of our 2023 annual meeting of stockholders, attended the 2023 annual meeting.

 Audit Committee

 The audit committee consists of Messrs. Abada,
Laifer and Silberstein. Mr. Abada currently serves as the chairman of the audit committee. Our Board of Directors has determined
that each of Mr. Abada, Mr. Laifer and Mr. Silberstein is independent under Nasdaq listing standards and Rule 10A-3(b)(1) of
the Exchange Act. Our Board of Directors has also determined that each member of our audit committee can read and understand fundamental
financial statements in accordance with applicable requirements. In arriving at these determinations, the Board of Directors has examined
each audit committee member's scope of experience and the nature of each member's current and prior employment.

 The functions of the audit committee include:

 selecting
 a qualified firm to serve as the independent registered public accounting firm to audit our
 financial statements;

 helping
 to ensure the independence and performance of the independent registered public accounting
 firm;

 discussing
 the scope and results of the audit with the independent registered public accounting firm,
 and reviewing, with management and the independent accountants, our interim and year-end
 operating results;

 developing
 procedures for employees to submit concerns anonymously about questionable accounting or
 audit matters;

 our policies on risk assessment and risk management;

 and approving related party transactions and keeping the independent auditors informed of
 the audit committee's understanding of our relationships and transactions with related
 parties;

 obtaining
 and reviewing a report by the independent registered public accounting firm, as necessary,
 that describes our internal quality-control procedures, any material issues with such procedures,
 and any steps taken to deal with such issues when required by applicable law;

 approving
 (or, as permitted, pre-approving) all audit and all permissible non-audit services, other
 than de minimis non-audit services, to be performed by the independent registered public
 accounting firm; and

 monitoring
 compliance with our Code of Conduct and investigating all reported complaints and allegations
 concerning violations of such code.

 Pursuant to the audit committee charter, the
audit committee has the authority to delegate all or a portion of its duties and responsibilities to a subcommittee of the audit committee.
Our Board of Directors has designated Mr. Abada as an "audit committee financial expert" as defined under the applicable
SEC rules and determined that he has accounting or related financial management expertise as required under the applicable Nasdaq rules.
A copy of the audit committee charter is available on our website at www.investors.paltalk.com/corporate-governance. The audit
committee held 4 meetings during the 2023 fiscal year.

 Compensation Committee

 The compensation committee consists of Messrs.
Abada and Silberstein. Mr. Silberstein currently serves as the chairman of the compensation committee. Our Board of Directors has
determined that each of Mr. Abada and Mr. Silberstein is independent under Nasdaq listing standards and is a "non-employee
director" as defined in Rule 16b-3 promulgated under the Exchange Act. The compensation committee, with input from our
Chief Executive Officer, reviews and approves, or recommends that our Board of Directors approve, the compensation of our directors and
executive officers.

 The functions of the compensation committee include:

 and approving, or recommending that our Board of Directors approve, the compensation of our
 executive officers;

 and recommending that our Board of Directors approve the compensation of our directors;

 and approving, or recommending that our Board of Directors approve, the terms of compensatory
 arrangements with our executive officers;

 administering
 our stock and equity incentive plans;

 and approving, or recommending that our Board of Directors approve, incentive compensation
 and equity plans;

 and establishing general policies relating to compensation and benefits of our employees
 and reviewing our overall compensation philosophy; and

 engaging
 with stockholders and proxy advisory firms on executive compensation matters.

 Pursuant to the compensation committee charter,
the compensation committee has the authority to delegate all or a portion of its duties and responsibilities to a subcommittee of the
compensation committee. A copy of the compensation committee charter is available on our website at www.investors.paltalk.com/corporate-governance.
The compensation committee held no meetings and acted by unanimous written consent once during the 2023 fiscal year.

 Nominating and Corporate Governance Committee

 The nominating and corporate governance committee
consists of Messrs. Abada, Silberstein, Laifer and Cook. Mr. Silberstein currently serves as the chairman of the nominating and
corporate governance committee. The nominating and corporate governance committee is responsible for, among other things, (i) determining
the qualifications, qualities and skills required to be a director of the Company and evaluating, selecting and approving nominees to
serve as directors, (ii) periodically reviewing, assessing and making recommendations for changes to the Board of Directors and
its committees and (iii) overseeing the process for evaluation of the Board of Directors.

 Pursuant to the nominating and corporate governance
committee charter, the nominating and corporate governance committee has the authority to delegate all or a portion of its duties and
responsibilities to a subcommittee of the nominating and corporate governance committee. In addition, the nominating and corporate governance
committee has unrestricted access to assistance from our officers, employees and independent auditors and the authority to employ experts,
consultants and professionals to assist with performance of their duties. A copy of the nominating and corporate governance committee
charter is available on our website at www.investors.paltalk.com/corporate-governance. The nominating and corporate governance
committee held 1 meeting during the 2023 fiscal year.

 The nominating and corporate governance committee
also considers director nominees put forward by stockholders. Our Bylaws contain provisions that address the process by which a stockholder
may nominate an individual to stand for election to the Board of Directors at an annual meeting. To recommend a nominee for election
to the Board of Directors, a stockholder must submit his or her recommendation to the Corporate Secretary, Kara Jenny, at Paltalk, Inc.,
30 Jericho Executive Plaza, Suite 400E, Jericho, New York 11753. Such nomination must satisfy the notice, information and consent
requirements set forth in our Bylaws and must be received by us prior to the date set forth under " Submission of Future Stockholder
Proposals " included in the Company's Definitive Proxy Statement on Schedule 14A filed with the SEC on April 14, 2023.
A stockholder's recommendation must be accompanied by the information with respect to stockholder nominees that is specified in
our Bylaws, including among other things, the name, age, address and occupation of the recommended person, the proposing stockholder's
name and address, the ownership interests of the proposing stockholder and any beneficial owner on whose behalf the nomination is being
made and any material monetary or other relationships between the recommended person and the proposing stockholder and/or the beneficial
owners, if any, on whose behalf the nomination is being made. Stockholder recommendations provided to the Corporate Secretary and received
in accordance with the advance notice provisions in our Bylaws will be considered and evaluated by the nominating and corporate governance
committee in the same manner as candidates recommended from other sources.

 The nominating and corporate governance committee
does not have any specific minimum qualifications that director nominees must have in order to be considered to serve on the Board of
Directors. However, the nominating and corporate governance committee does take into consideration areas of expertise that director nominees
may be able to offer, including professional experience, knowledge, abilities and industry knowledge or expertise. The nominating and
corporate governance committee also considers the director nominees' potential contribution to the overall composition and diversity
of the Board of Directors.

 Strategic Transactions Committee

 In October 2023, the Board of Directors established
the strategic transactions committee. The committee consists of Messrs. Cook and Laifer. Mr. Cook currently serves as the chairman of
the strategic transactions committee. The strategic transactions committee is responsible for, among other things, identifying, evaluating
and negotiating (subject to approval from the Board of Directors) strategic opportunities, including, but not limited to, investments,
dispositions, potential mergers or accretive growth acquisitions of other assets or entities that are synergistic to the Company's
businesses.

 The functions of the strategic transactions committee
include:

 reviewing the
 Company's goals and strategy regarding strategic transactions with the Company's
 management and making recommendations with respect to the Company's near-term and long-term
 business objectives;

 overseeing the
 process through which the Company identifies strategic transactions;

 reviewing and
 evaluating proposed strategic transactions;

 assisting the
 Company's management with the negotiation and structuring of any proposed strategic
 transaction;

 providing the
 Board of Directors with information and materials as appropriate to assist the Board in its
 evaluation, understanding or oversight of any proposed strategic transaction;

 making recommendations
 to the Board of Directors concerning the authorization and approval of any proposed strategic
 transactions; and

 after the completion
 of any strategic transaction, evaluating the execution, financial performance and integration
 of such strategic transaction, as applicable, in connection with the Company's business
 objectives.

 The strategic transactions committee has the
authority to make decisions relating to identifying and evaluating any proposed strategic transaction and recommending that the Board
of Directors approve any proposed strategic transaction. The Board of Directors reserves the power and authority to authorize and approve
the consummation of any potential transaction recommended by the strategic transactions committee. The
strategic transactions committee did not meet during the 2023 fiscal year.

 ITEM 11. EXECUTIVE COMPENSATION

 The following discussion provides compensation
information pursuant to the scaled disclosure rules applicable to "smaller reporting companies" under SEC rules and may contain
statements regarding future individual and Company performance targets and goals. These targets and goals are disclosed in the limited
context of the Company's compensation programs and should not be understood to be statements of management's expectations
or estimates of results or other guidance. We specifically caution stockholders not to apply these statements to other contexts.

 Overview

 The compensation program for our executive officers,
as presented in the Summary Compensation Table below, is administered by our Board of Directors. The intent of our compensation program
is to align our executives' interests with those of our stockholders, while providing reasonable and competitive compensation.

 The purpose of this Executive Compensation discussion
is to provide information about the material elements of compensation that we pay or award to, or that is earned by: (i) the individuals
who served as our principal executive officer during fiscal 2023; (ii) our two most highly compensated executive officers, other
than the individuals who served as our principal executive officer, who were serving as executive officers, as determined in accordance
with the rules and regulations promulgated by the SEC, as of December 31, 2023, with compensation during fiscal year 2023 of $100,000
or more; and (iii) up to two additional individuals for whom disclosure would have been provided pursuant to clause (ii) but
for the fact that such individuals were not serving as executive officers on December 31, 2023. We refer to these individuals as
our "named executive officers." For 2023, our named executive officers and the positions in which they served were:

 Jason
 Katz, our Chief Executive Officer;

 Kara
 Jenny, our Chief Financial Officer; and

 Adam
 Zalko, our Senior Vice President.

 For 2023, the compensation of our named executive
officers consisted of a salary and an annual cash bonus, which are discussed in further detail below.

 Compensation of Named Executive Officers

 The following discussion summarizes in more detail
the executive compensation paid to or earned by our named executive officers in 2023.

 Base Salary

 The following table sets forth the annual base
salary of each of our named executive officers for 2023:

 Name

 Annual Base
 Salary

 $

 Chief Executive Officer

 Kara Jenny (1)

 $
 285,000

 Chief Financial Officer

 $

 Senior Vice President

 (1)
 On January 28, 2022, the Board of Directors
 determined to increase Ms. Jenny's annual base salary from $265,000 for fiscal year
 2022 to $285,000 for fiscal year 2023.

 Annual Bonuses

 The following table sets forth the cash bonus,
if any, each of our named executive officers received for their performance during 2023. The bonuses for Mr. Zalko and Ms. Jenny were
each paid on February 29, 2024.

 Name

 2023 Annual

 Cash Bonus

 $
 —

 Chief Executive Officer

 $
 15,000

 Chief Financial Officer

 $
 17,500

 Senior Vice President

 Pursuant to each of their employment agreements,
for 2023, Mr. Katz and Ms. Jenny were entitled to receive an annual cash bonus in an amount to be determined by the Board of Directors
based on the achievement of performance metrics to be established jointly by the Board of Directors and each of Mr. Katz and Ms.
Jenny.

 In February 2023, the compensation committee
recommended, and the Board of Directors approved, the 2023 Executive Bonus Plan (the "2023 Bonus Plan"). Pursuant to the
2023 Bonus Plan, Mr. Katz and Ms. Jenny were each eligible to receive the following: (i) a lump-sum cash payment equal
to the product of (x) 2.5% multiplied by (y) the Company's Adjusted EBITDA (calculated based on the Adjusted EBITDA reported
on the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023); provided however, that
each executive officer's cash payment shall not exceed $75,000; (ii) a lump-sum cash payment equal to $25,000 if (x) the
Company's Adjusted EBITDA exceeded $100,000 and (y) the Company's Revenue (as defined in the 2023 Bonus Plan) increased
by at least 10% from the Company's 2022 "Total revenue" as reported on the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2022; and (iii) a lump-sum cash payment equal to (a) $25,000 if the Board of Directors
approved the consummation by the Company of a Strategic Transaction (as defined in the 2023 Bonus Plan) during the 2023 fiscal year and
(b) $15,000 upon approval by the Board of Directors of a second Strategic Transaction thereafter entered into by the Company during
the 2023 fiscal year, but no payments would be awarded for approval of a third Strategic Transaction, if any. We believe the 2023 Bonus
Plan advanced our interests and the interests of our stockholders by providing our executive officers with incentive compensation that
was tied to the achievement of pre-established, objective performance goals.

 For fiscal year 2023, our Adjusted EBITDA for
purposes of the 2023 Bonus Plan was a loss of $1.0 million and our Revenue for the purposes of the 2023 Bonus Plan was $10.6 million.
Accordingly, the threshold requirements necessary for Mr. Katz and Ms. Jenny to achieve a bonus payout under clauses (i) and
(ii) of the 2023 Bonus Plan discussed above were not met. During fiscal year 2023, the Board of Directors did not approve the consummation
of a Strategic Transaction and therefore no bonuses were paid under clause (iii) of the 2023 Bonus Plan.

 During 2023, Mr. Zalko was not eligible
to receive a bonus under the 2023 Bonus Plan but was eligible for a bonus from the employee bonus pool recommended by the compensation
committee and approved by the Board of Directors (the "Employee Bonus Pool"). The Employee Bonus Pool is administered by
our Chief Executive Officer and Chief Financial Officer, who have the authority to determine the persons entitled to receive bonuses
and the amount of bonuses awarded. Our Chief Executive Officer and Chief Financial Officer considered a number of factors in determining
Mr. Zalko's annual bonus for 2023. These factors included, but were not limited to, the individual performance of Mr. Zalko,
the completion of strategic goals during 2023 and the operational and financial performance of the Company. As a result, for fiscal year
2023, our Chief Executive Officer and Chief Financial Officer approved a cash bonus of $17,500 to Mr. Zalko from the Employee Bonus
Pool.

 In February of 2024, the compensation committee
recommended, and the Board of Directors approved, the payment of a discretionary cash bonus of $15,000 to Ms. Jenny for her performance
during the 2023 fiscal year.

 Equity Awards

 We periodically grant equity awards consisting
of stock options to our named executive officers as a means for fostering retention and rewarding long-term value creation by our named
executive officers.

 On March 28, 2022, the Board of Directors awarded
Mr. Katz and Ms. Jenny stock options representing the right to purchase 75,000 and 60,000 shares of common stock, respectively, at an
exercise price of $2.66. One-third of the shares underlying the stock options vested on the date of grant, with the remaining two-thirds
vesting in twenty-four equal installments on each of the first twenty-four monthly anniversaries of the date of grant.

 On March 29, 2022, the Board of Directors also
awarded Mr. Zalko a stock option representing the right to purchase 15,000 shares of common stock at an exercise price of $2.66. On the
grant date, 5,000 shares underlying the stock option vested and became exercisable. The remaining unvested shares vest and become exercisable
in four equal annual installments beginning on the first anniversary of the date of grant.

 On March 28, 2023, the Board of Directors
awarded Mr. Zalko a stock option representing the right to purchase 10,000 shares of common stock at an exercise price of $1.94.
The shares underlying the option will vest and become exercisable in four equal annual installments beginning on the first anniversary
of the date of grant.

 Except as described above, our named executive
officers were not granted any equity awards in fiscal year 2023.

 Employment Agreements

 Each of Mr. Katz and Ms. Jenny is a
party to an employment agreement with the Company. Mr. Zalko is currently not a party to an employment agreement with the Company.
The purpose of our employment agreements is to incentivize these executives to continue providing services to the Company.

 Katz Employment Agreement. Effective
October 7, 2016, we entered into an employment agreement with Mr. Katz (the "Katz Prior Agreement"), which provided
for a one-year term with automatic successive one-year renewals unless earlier terminated in accordance with its terms. Under the Katz
Prior Agreement, Mr. Katz was entitled to receive a minimum base salary of $180,000 per year and an annual incentive bonuses to
be determined by the Board of Directors, based on criteria to be established jointly by the Board of Directors and Mr. Katz. The
payment of Mr. Katz's annual incentive bonus was contingent on him being employed by the Company on the date that such bonus
is paid.

 Pursuant to the Katz Prior Agreement, if Mr. Katz's
employment was terminated (i) by the failure of the Company to renew Mr. Katz's employment agreement for a renewal term,
(ii) by the Company without "cause" (as defined in the Katz Prior Agreement) or (iii) by Mr. Katz for "good
reason" (as defined in Katz Prior Agreement), then subject to certain limitations and Mr. Katz's compliance with certain
conditions, the Company was required to pay Mr. Katz severance equal to three months' base salary, payable in three equal
monthly installments. In addition, the Company was required to continue to pay the Company's portion of Mr. Katz's monthly
health insurance premiums, if Mr. Katz was eligible and elects to continue health insurance under COBRA, for the earlier of (i) three months
following Mr. Katz's termination of employment or (ii) the date Mr. Katz's coverage under such group health
plan terminated for any reason. Mr. Katz was entitled to the same severance benefits in the event that his employment was terminated
prior to, in connection with or following a Change in Control (as defined in the Katz Prior Agreement). In addition, Mr. Katz's
employment agreement contained customary provisions relating to confidentiality, non-solicitation and non-competition.

 On March 23, 2022, the Company entered into
an Amended and Restated Employment Agreement with Mr. Katz (the "Amended and Restated Katz Employment Agreement"), which
amended and restated the Katz Prior Agreement. Pursuant to the Amended and Restated Katz Employment Agreement, Mr. Katz is entitled
to receive a Base Salary (as defined in the Amended and Restated Katz Employment Agreement) of two hundred twenty-five thousand dollars
($225,000), effective retroactively as of February 1, 2021. Except as provided herein, all other terms and conditions of the Katz
Prior Agreement remain in full force and effect.

 For information regarding Mr. Katz's
base salary and annual incentive bonus, if any, for 2023, see " Compensation of Named Executive Officers — Base
Salary " and " Compensation of Named Executive Officers — Annual Bonuses."

 Jenny Employment Agreement. Effective
December 9, 2019, we entered into an executive employment agreement with Ms. Jenny, which provided for a one-year term with
automatic successive one-year renewals unless earlier terminated in accordance with its terms (the "Jenny Prior Agreement").
Under the Jenny Prior Agreement, Ms. Jenny was entitled to receive a minimum base salary of $200,000 per year and an annual incentive
bonus, which, for calendar years after 2020, was determined by the Board of Directors, based on criteria to be established
jointly by the Board of Directors and Ms. Jenny. The payment of Ms. Jenny's annual incentive bonus was contingent on
her being employed by the Company on the date that such bonus was paid.

 Pursuant to the Jenny Prior Agreement, if Ms. Jenny's
employment was terminated (i) by the failure of the Company to renew Ms. Jenny's employment agreement for a renewal term,
(ii) by the Company without "cause" (as defined in the Jenny Prior Agreement) or (iii) by Ms. Jenny for "good
reason" (as defined in the Jenny Prior Agreement), then subject to certain limitations and Ms. Jenny's compliance with
certain conditions, the Company was required to pay Ms. Jenny severance equal to three months' base salary, payable in
three equal monthly installments. In addition, the Company was required to continue to pay the Company's portion of Ms. Jenny's
monthly health insurance premiums, if Ms. Jenny was eligible and elected to continue health insurance under COBRA, for the earlier
of (i) three months following Ms. Jenny's termination of employment or (ii) the date Ms. Jenny's
coverage under such group health plan terminated for any reason. Ms. Jenny was entitled to the same severance benefits in the event
that her employment was terminated prior to, in connection with or following a Change in Control (as defined in the Jenny Prior Agreement).
In addition, Ms. Jenny's employment agreement contained customary provisions relating to confidentiality, non-solicitation
and non-competition.

 On March 23, 2022, the Company entered into
an Amended and Restated Employment Agreement with Ms. Jenny (the "Amended and Restated Jenny Employment Agreement"),
which amended and restated the Jenny Prior Agreement. Pursuant to the Amended and Restated Jenny Employment Agreement, for fiscal year
2023, Ms. Jenny was entitled to receive an annualized base salary of two hundred eighty-five thousand dollars ($285,000). In addition,
the Amended and Restated Jenny Employment Agreement provides that in the event of a Change in Control, if Ms. Jenny is terminated by
the Company other than for Cause, or if Ms. Jenny terminates her employment with the Company for Good Reason, then the Company shall
to pay Ms. Jenny severance equal to twelve (12) months of Ms. Jenny's then-current annualized Base Salary (as such terms are
defined in the Amended and Restated Jenny Employment Agreement). Except as provided herein, all other terms and conditions of the Jenny
Prior Agreement remain in full force and effect.

 For information regarding Ms. Jenny's
base salary and annual incentive bonus for 2023, see " Compensation of Named Executive Officers — Base Salary "
and " Compensation of Named Executive Officers — Annual Bonuses."

 Summary Compensation Table

 The following table sets forth information regarding
the total compensation received by, or earned by, our named executive officers during the years ended December 31, 2023 and
2022.

 Name and Principal Position

 Year

 Salary

 ($) (1)

 Bonus

 ($)

 Stock

 ($)

 ($) (2)

 Non-Equity

 Incentive Plan

 ($) (3)

 All
 Other

 ($) (5)

 Total

 ($)

 Jason
 Katz

 2023

 —

 —

 —

 —

 7,167

 232,167

 Chief
 Executive Officer

 2022

 —

 —

 191,524

 25,000

 (4)

 6,200

 447,723

 Kara
 Jenny

 2023

 285,000

 15,000

 —

 —

 —

 25,026

 325,026

 Chief
 Financial Officer

 2022

 259,583

 —

 —

 153,219

 25,000

 18,568

 456,369

 Adam
 Zalko

 2023

 17,500

 —

 19,400

 —

 26,634

 269,134

 Senior
 Vice President

 2022

 223,750

 17,500

 —

 39,900

 —

 24,850

 306,000

 (1)
 Represents the amount of base salary actually
 earned by the named executive officer. For additional information concerning our named executive
 officer base salaries, see "— Compensation of Named Executive Officers — Base
 Salary."

 (2)
 Represents the amount recognized for financial
 statement reporting purposes in accordance with ASC 718, with the exception that the
 amounts shown assume no forfeitures. A discussion of the assumptions used in the calculation
 of these amounts is included in Note 6, " Stockholders' Equity " in
 the annual consolidated financial statements included in this Annual Report on Form 10-K.

 (3)
 Represents payments made pursuant to the
 2022 Bonus Plan (as defined and described in the Company's Definitive Proxy Statement
 on Schedule 14A filed with the SEC on April 14, 2023) and the 2023 Bonus Plan.

 (4)
 Mr. Katz elected to voluntarily forgo
 his bonus of $25,000 that he was entitled to under the 2022 Bonus Plan.

 (5)
 Includes amounts paid during 2023 and 2022,
 as applicable, for group life insurance premiums and 401(k) plan contributions.

 Narrative Disclosure Regarding Summary Compensation Table

 Katz Compensation.

 For fiscal year 2023, Mr. Katz received
annual base compensation of $225,000. Mr. Katz did not receive stock awards or option awards during 2023.

 For fiscal year 2022, Mr. Katz received
annual base compensation of $225,000 and a cash bonus of $25,000, which cash bonus Mr. Katz elected to voluntarily forgo. For a
discussion of the equity awards received by Mr. Katz in 2022, see "— Compensation of Named Executive Officers —
Equity Awards ".

 Jenny Compensation.

 For fiscal year 2023, Ms. Jenny received
annual base compensation of $285,000 and a cash bonus of $15,000. Ms. Jenny did not receive stock awards or option awards during 2023.

 For fiscal year 2022, Ms. Jenny received
annual base compensation of $265,000 and a cash bonus of $25,000. For a discussion of the equity awards received by Ms. Jenny in 2022,
see "— Compensation of Named Executive Officers — Equity Awards ".

 Zalko Compensation.

 For fiscal years 2022 and 2023, Mr. Zalko
received annual base compensation of $225,000 and a cash bonus of $17,500. For a discussion of the equity awards received by Mr. Zalko
in 2022 and 2023, see "— Compensation of Named Executive Officers — Equity Awards ".

 Outstanding Equity Awards at Fiscal Year-End Table

 The following table summarizes the total outstanding
equity awards as of December 31, 2023 for each named executive officer.

 Name

 Grant

 Date

 Underlying

 Unexercised

 Options (#)

 Exercisable

 Underlying

 Unexercised

 Options (#)

 Unexercisable

 Equity

 Incentive

 Plan Awards:

 Underlying

 Unexercised

 Unearned

 Options (#)

 Exercise

 Price

 ($)

 Expiration

 Date

 03/28/2022 (1)

 68,750

 6,250

 —

 2.66

 03/27/2032

 12/09/2019 (2)

 75,000

 —

 —

 1.78

 12/08/2029

 03/28/2022 (3)

 55,000

 5,000

 —

 2.66

 03/27/2032

 02/01/2017 (4)

 2,000

 —

 —

 4.15

 01/31/2027

 03/29/2022 (5)

 7,500

 7,500

 —

 2.66

 03/28/2032

 03/28/2023 (6)

 —

 10,000

 —

 1.94

 03/27/2033

 (1)
 One-third of the shares underlying this stock
 option vested and became exercisable on the date of grant. The remaining unvested shares
 vest in twenty-four equal monthly installments on each of the first twenty-four monthly anniversaries
 of the grant date.

 (2)
 The shares of common stock underlying the
 stock option vested and became exercisable twenty-five percent (25%) on each of December 9,
 2020, 2021, 2022 and 2023, respectively.

 (3)
 One-third of the shares underlying this stock
 option vested and became exercisable on the date of grant. The remaining unvested shares
 vest in twenty-four equal monthly installments on each of the first twenty-four monthly anniversaries
 of the date of grant.

 (4)
 The shares of common stock underlying the
 stock option vested and became exercisable twenty-five percent (25%) on each of February 1,
 2018, 2019, 2020 and 2021, respectively.

 (5)
 One-third of the shares underlying this stock
 option vested and became exercisable on the date of grant. The remaining unvested shares
 vest and become exercisable twenty-five percent (25%) on each of March 28, 2023, 2024,
 2025 and 2026, respectively.

 (6)
 The shares of common stock underlying the
 stock option will vest and become exercisable twenty-five percent (25%) on each of March 29,
 2024, 2025, 2026 and 2027, respectively.

 Director Compensation

 The following table provides compensation information
for the year ended December 31, 2023 for each member of our Board of Directors during the fiscal year ended December 31, 2023,
except for (i) Mr. Katz, our current Chief Executive Officer and Chairman of the Board, and (ii) Ms. Jenny, our current Chief
Financial Officer, both of whom did not receive any compensation for their service as a director in 2023 and whose compensation is reported
in " Executive Compensation — Summary Compensation Table " above.

 Director Compensation Table

Fiscal Year 2023

 Name

 Fees
 Earned or
 Paid in
 Cash
 ($)

 Stock
 ($) (1)

 ($) (2)(3)

 Non-Equity
 Incentive Plan

 Change in
 Pension Value
 and
 Nonqualified
 Deferred
 Earnings
 ($)

 All Other
 ($)

 Total
 ($)

 39,000

 —

 15,520
 (4)

 —

 —

 —

 54,520

 33,000

 —

 15,520
 (4)

 —

 —

 —

 48,520

 41,000

 —

 15,520
 (4)

 —

 —

 —

 56,520

 —
 (6)

 —

 186,000
 (5)

 —

 —

 —

 186,000

 (1)
 As of December 31, 2023, none of our
 directors held any outstanding stock awards.

 (2)
 Represents the aggregate grant date value
 computed in accordance with Accounting Standards Codification 718, Compensation — Stock
 Compensation ("ASC 718"), with the exception that the amounts shown
 assume no forfeitures. A discussion of the assumptions used in the calculation of these
 amounts is included in Note 6, " Stockholders' Equity " in the
 annual consolidated financial statements included in this Annual Report on Form 10-K.

 (3)
 The aggregate amount of unexercised stock
 options held by each director listed in the table above as of December 31, 2023 was
 as follows:

 Name

 Shares Underlying Outstanding Stock Options

 48,000

 48,000

 42,000

 100,000

 (4)
 Represents the grant date fair value of a
 stock option granted on March 28, 2023 that represents the right to purchase 8,000 shares
 of common stock, all of which have vested and remain unexercised.

 (5)
 Represents the grant date fair value of a
 stock option granted on October 10, 2023 that represents the right to purchase 100,000 shares
 of common stock, none of which have vested (the "Cook Grant").

 (6)
 In lieu of the annual cash retainers paid
 to the other non-employee directors in fiscal year 2023, Mr. Cook received the Cook Grant.

 In 2023, the annual cash retainers for each non-employee
director (except for Mr. Cook) were as follows: (i) an annual cash retainer fee of $21,000 to each non-employee director; (ii) an
additional annual cash retainer fee of $4,000 for service on a committee; and (iii) an additional annual cash retainer fee for service
as the chair of a committee of the Board of Directors (to be paid in addition to the $4,000 cash fee for committee service) as follows:
(a) audit committee chair — $6,000 and (b) compensation committee, nominating and corporate governance committee
and strategic transaction committee chair — $4,000.

 In February of 2023, the Board of Directors authorized
the grant of a nonqualified stock option award to each of Messrs. Abada, Laifer and Silberstein to purchase 8,000 shares of common stock,
having a date of grant of March 28, 2023 with an exercise price of $1.94, and vesting in four equal installments on the last day
of each calendar quarter in 2023.

 In connection with Mr. Cook's appointment
to the Board of Directors and in lieu of the cash retainer fees and stock options earned by the other non-employee directors, on October
10, 2023, the Board of Directors authorized the grant of a nonqualified stock option award to Mr. Cook to purchase 100,000 shares of
common stock, with an exercise price of $1.86, and vesting in four equal annual installments on each anniversary of the grant date.

 There have not been any changes to our director
retainer policy for 2024. In February of 2024, the Board of Directors authorized the grant of a nonqualified stock option award to each
of Messrs. Abada, Laifer and Silberstein to purchase 8,000 shares of common stock, with such awards to be granted effective as of three
trading days following the date the Company releases its financial results for the fiscal year ended December 31, 2023, and vesting in
four equal installments on the last day of each calendar quarter in 2024 (such grants, the "2024 Director Grants"). As
a result of the Cook Grant, Mr. Cook did not receive a 2024 Director Grant.

 ITEM 12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 Equity Compensation Plan Information

 The following table provides information as of
December 31, 2023 about compensation plans under which shares of our common stock may be issued to employees, executive officers or members
of our Board of Directors upon the exercise of options, warrants or rights under all of our existing equity compensation plans.

 Plan Category

Securities to be

Issued Upon

Exercise of

Outstanding

Options,

Warrants,

and Rights

(a)

 Weighted-

Average

Exercise

Price of

Outstanding

Options,

Warrants

and Rights

(b)

Remaining

Available

for Future

Issuance

Under Equity

Plans

(Excluding

Reflected in

Column(a))

(c)

 Equity compensation plans approved by security holders

 740,814

 $

 3.32

 665,335

 (1)(2)

 Equity compensation plans not approved by security holders

 --

 $

 --

 --

 Total

 740,814

 $

 3.32

 665,335

 (1)
 Represents shares of common
 stock available for issuance under the 2016 Plan (as defined below), which permits the issuance
 of incentive stock options, nonqualified stock options, shares of restricted stock, stock
 appreciation rights, restricted stock units, performance awards, dividend equivalent rights
 and other awards. As described below, no additional awards may be issued under the 2011 Plan
 (as defined below).

 (2)
 As of March 11, 2024, there were (i) 740,814
 shares of common stock to be issued upon the exercise of outstanding stock options under
 the 2016 Plan and 637,777 shares of common stock remaining available for future issuances
 under the 2016 Plan and (ii) 27,558 shares of common stock to be issued upon the exercise
 of outstanding stock options under the 2011 Plan.

 In December 2008, our Board of Directors
approved the equity incentive compensation plan (the "Equity Incentive Compensation Plan") and, in December 2010, terminated
the plan as to all unallocated shares of common stock thereunder. The purpose of the Equity Incentive Compensation Plan was to provide
an incentive to attract, retain and motivate employees, officers, directors, consultants and advisors with the ability to participate
in our future performance. Under the Equity Incentive Compensation Plan, we were authorized to issue incentive stock options and nonqualified
stock options. The Equity Incentive Compensation Plan was administered by our Board of Directors. All options previously granted under
the Equity Incentive Compensation Plan remained in full force and effect following the plan's termination.

 In May 2011, our Board of Directors adopted
the Paltalk, Inc. 2011 Long-Term Incentive Plan (the "Original 2011 Plan"). In October 2011, our Board of Directors
amended and restated the Original 2011 Plan (the "2011 Plan") and adopted the 2011 Plan to allow for the issuance of incentive
stock option awards. The 2011 Plan was adopted to attract and retain the services of key employees, key contractors and outside directors.
The 2011 Plan provided for the granting of incentive stock options, nonqualified stock options, shares of restricted stock, stock appreciation
rights, restricted stock units, performance awards, dividend equivalent rights and other awards. The 2011 Plan was administered by our
Board of Directors and was replaced by the 2016 Plan (as defined below).

 In March 2016, our Board of Directors adopted
the Paltalk, Inc. 2016 Long-Term Incentive Plan (the "2016 Plan"), which was approved by our stockholders in May 2016.
The 2016 Plan was adopted to attract and retain the services of key employees, key contractors and outside directors. The 2016 Plan provides
for the granting of incentive stock options, nonqualified stock options, shares of restricted stock, stock appreciation rights, restricted
stock units, performance awards, dividend equivalent rights and other awards. The 2016 Plan is administered by the compensation committee
of our Board of Directors.

 Security Ownership of Certain Beneficial Owners and Management

 The following table and accompanying footnotes
set forth as of March 11, 2024 certain information regarding the beneficial ownership of shares of our common stock by: (i) each
person who is known by us to own beneficially more than 5% of such stock; (ii) each member of our Board of Directors and each of
our named executive officers with respect to the year ended December 31, 2023 and (iii) all of our directors and executive officers
as a group. Except as otherwise indicated, all common stock is owned directly, the beneficial owners listed in the table below possess
sole voting and investment power with respect to the stock indicated and the address for each beneficial owner is c/o Paltalk, Inc., 30
Jericho Executive Plaza, Suite 400E, Jericho, New York 11753. The applicable percentage ownership is based on 9,222,157 shares of
our common stock, excluding shares held by the Company as treasury stock, issued and outstanding as of March 11, 2024.

 Common Stock Beneficially Owned (1)

 Name of Beneficial Owner

 Number

 Percentage

 Directors and Named Executive Officers

 902,177

 (2)

 9.8

 %

 135,000

 (3)

 1.5

 %

 57,000

 (4)

 *

 416,595

 (5)

 4.5

 %

 207,515

 (6)

 2.3

 %

 —

 —

 %

 14,500

 (7)

 *

 Officers and Directors as a Group (7 persons)

 1,732,787

 18.8

 %

 5% Stockholders

 The J. Crew Delaware Trust B

 1,490,120

 (8)

 16.2

 %

 Adam Katz 2012 Revocable Trust

 785,377

 (9)

 8.5

 %

 * Less than 1%.

 (1)

 For purposes of this table, a person or group of persons is deemed to have beneficial ownership of any shares of common stock that such person has the right to acquire within 60 days of the date of March 11, 2024, including through the exercise of stock options. For purposes of computing the percentage of outstanding shares of the Company's common stock held by each person or group of persons named above, any common stock that such person or persons has the right to acquire within 60 days of the date of March 11, 2024 is deemed to be outstanding but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.

 (2)
 Includes 201,265 shares of common stock
 held by Mr. Katz's spouse that may be deemed to be beneficially owned by Mr. Katz.
 Mr. Katz disclaims beneficial ownership of these shares and nothing herein shall be
 deemed an admission that Mr. Katz is the beneficial owner of these shares for any purpose.
 Includes the vested or deemed vested portion of a stock option representing the right to
 purchase 75,000 shares of common stock granted on March 28, 2022, all of which have
 vested.

 (3)
 Includes the vested or deemed vested portion
 of (i) a stock option representing the right to purchase 75,000 shares of common stock
 granted on December 9, 2019, all of which have vested and (ii) a stock option representing
 the right to purchase 60,000 shares of common stock granted on March 28, 2022, all of
 which have vested.

 (4)

 Includes the vested or deemed vested portion of (i) a stock option representing the right to purchase 6,000 shares of common stock granted on February 2, 2017, all of which have vested, (ii) a stock option representing the right to purchase 6,000 shares of common stock granted on February 16, 2018, all of which have vested, (iii) a stock option representing the right to purchase 6,000 shares of common stock granted on January 11, 2019, all of which have vested, (iv) a stock option representing the right to purchase 6,000 shares of common stock granted on March 25, 2020, all of which have vested, (v) a stock option representing the right to purchase 8,000 shares of common stock granted on March 26, 2021, all of which have vested, (vi) a stock option representing the right to purchase 8,000 shares of common stock granted on March 28, 2022, all of which have vested and (vii) a stock option representing the right to purchase 8,000 shares of common stock granted on March 28, 2023, all of which have vested.

 (5)

 Includes the vested or deemed vested portion of (i) a stock option representing the right to purchase 6,000 shares of common stock granted on February 2, 2017, all of which have vested, (ii) a stock option representing the right to purchase 6,000 shares of common stock granted on February 16, 2018, all of which have vested, (iii) a stock option representing the right to purchase 6,000 shares of common stock granted on January 11, 2019, all of which have vested, (iv) a stock option representing the right to purchase 6,000 shares of common stock granted on March 25, 2020, all of which have vested, (v) a stock option representing the right to purchase 8,000 shares of common stock granted on March 26, 2021, all of which have vested, (vi) a stock option representing the right to purchase 8,000 shares of common stock granted on March 28, 2022, all of which have vested and (vii) a stock option representing the right to purchase 8,000 shares of common stock granted on March 28, 2023, all of which have vested. Also includes (i) 354,109 shares of common stock held by Hilltop Partners, L.P. and (ii) 14,486 shares of common stock held by Hilltop Offshore, Ltd. Mr. Laifer is the sole director and principal stockholder of Laifer Capital Management, Inc. ("LCM"), which has the sole power to vote and to direct the voting of, and to dispose and to direct the disposition of, the shares of the Company's common stock beneficially owned by Hilltop Partners, L.P. (of which LCM serves as general partner and investment adviser) and Hilltop Offshore, Ltd. (of which LCM serves as investment adviser).

 (6)

 Includes the vested or deemed vested portion of (i) a stock option representing the right to purchase 6,000 shares of common stock granted on February 16, 2018, all of which have vested, (ii) a stock option representing the right to purchase 6,000 shares of common stock granted on January 11, 2019, all of which have vested, (iii) a stock option representing the right to purchase 6,000 shares of common stock granted on March 25, 2020, all of which have vested, (iv) a stock option representing the right to purchase 8,000 shares of common stock granted on March 26, 2021, all of which have vested, (v) a stock option representing the right to purchase 8,000 shares of common stock granted on March 28, 2022, all of which have vested and (vi) a stock option representing the right to purchase 8,000 shares of common stock granted on March 28, 2023, all of which have vested. Also includes 10,202 shares of common stock held by MLS Family Investors LLC ("MLS"). Mr. Silberstein is the sole manager of MLS and owns approximately 15% of the interest in MLS, and he is co-trustee of JJS New Trust B utd 12/31/2001, a trust of which Mr. Silberstein is a beneficiary, which owns approximately 18% of the interest in MLS. As a result, Mr. Silberstein may be deemed to beneficially own the shares of common stock held by MLS. Mr. Silberstein disclaims beneficial ownership of the shares held by MLS except to the extent of his pecuniary interest therein and nothing herein shall be deemed an admission that Mr. Silberstein is the beneficial owner of these shares for any purpose. Also includes 44 shares of common stock held by Mr. Silberstein's spouse that may be deemed to be beneficially owned by Mr. Silberstein. Mr. Silberstein disclaims beneficial ownership of the shares held by his spouse and nothing herein shall be deemed an admission that Mr. Silberstein is the beneficial owner of these shares for any purpose.

 (7)

 Includes the vested or deemed vested portion of (i) a stock option representing the right to purchase 2,000 shares of common stock granted on February 1, 2017, all of which have vested, (ii) a stock option representing the right to purchase 15,000 shares of common stock granted on March 28, 2022, of which 7,500 shares have vested and 2,500 shares will vest within 60 days of March 11, 2024 and (iii) a stock option representing the right to purchase 10,000 shares of common stock granted on March 28, 2023, of which 2,500 shares will vest within 60 days of March 11, 2024.

 (8)
 Based on the information contained in the
 Schedule 13G filed with the SEC on June 14, 2023. The principal address of The
 J. Crew Delaware Trust B is c/o J.P. Morgan Trust Company of Delaware, Trustee,
 500 Stanton-Christiana Road, DE3-1600, Newark, Delaware 19713.

 (9)
 Based on the information contained in the
 Schedule 13G filed with the SEC on June 14, 2023. The principal address of Adam
 Katz 2012 Revocable Trust is c/o Roxann Management, 7110 Republic Airport, 2 nd
 Floor, Farmingdale, New York 11735.

 There are no arrangements currently known to
us, the operation of which may at a subsequent date result in a change of control of the Company.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 Certain Relationships and Related Party Transactions

 Indemnification Arrangements

 We have entered into indemnification agreements
and employment agreements with our directors and certain of our executive officers, respectively, pursuant to which we have agreed to
indemnify such persons against any liability, damage, cost or expense incurred in connection with the defense of any action, suit or
proceeding to which such persons are a party to the extent permitted by applicable law, subject to certain exceptions.

 Policies and Procedures for Approving Related
Party Transactions

 Our Board of Directors adopted a written Related
Party Transactions Policy on April 19, 2012. In accordance with the Related Party Transactions Policy, all Related Party Transactions
(as defined herein) must be reported to our Chief Executive Officer or Chief Financial Officer and must be reviewed and approved by our
audit committee. In determining whether to approve, recommend or ratify a Related Party Transaction, the reviewing party will take into
account, among other factors it deems appropriate, (i) whether the terms of the Related Party Transaction are fair to the Company,
(ii) whether there are business reasons for the Company to enter into the Related Party Transaction, (iii) whether the Related
Party Transaction would impair the independence of an outside director and (iv) whether the Related Party Transaction would present
an improper conflict of interest for any of our directors or executive officers.

 A "Related Party Transaction" means
a transaction (including any series of related transactions or a material amendment or modification to an existing Related Party Transaction)
directly or indirectly involving any Related Party that would need to be disclosed under Item 404(a) of Regulation S-K. Generally,
under Item 404 of Regulation S-K, we are required to disclose any transaction occurring since the beginning of the last two
fiscal years, or any currently proposed transaction, involving us or our subsidiary where the amount involved exceeds $120,000,
and in which any Related Party had or will have a direct or indirect material interest.

 A "Related Party" means any of the
following: (i) any of our directors; (ii) any of our executive officers; (iii) a person known by us to be the beneficial
owner of more than 5% of our common stock or (iv) an immediate family member of any of the foregoing.

 Director Independence

 Nasdaq rules require that a majority of the members
of our Board of Directors be independent directors. Our Board of Directors recently undertook its annual review of director independence
in accordance with the applicable Nasdaq rules. The independence rules include a series of objective tests, including that the director
is not employed by the Company and has not engaged in various types of business dealings with the Company. In addition, our Board of Directors
is required to make a subjective determination as to each independent director that no relationships exist that, in the opinion of our
Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Based
upon these standards and the consideration of the information and the transactions and relationships discussed below, our Board of Directors
determined that Yoram "Rami" Abada, Geoffrey Cook, Lance Laifer and John Silberstein are independent, and that Jason Katz
and Kara Jenny are not independent under such standards.

 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 Marcum LLP (PCAOB Firm ID Number: 688) has served
as the Company's independent registered public accounting for the periods presented in this report.

 Fees Paid to Independent Registered Public Accounting Firm

 The following table shows the aggregate fees
billed to us by Marcum LLP for professional services rendered in 2023 and 2022:

 2023

 2022

 Audit Fees

 $
 255,757

 $
 203,363

 Audit-Related Fees

 —

 19,055

 Tax Fees

 —

 —

 All Other Fees

 —

 —

 Total Fees

 $
 255,757

 $
 222,418

 Audit Fees. Audit fees for 2023 and 2022
consisted of fees related to the audit and review of our consolidated financial statements, review of our interim consolidated financial
statements, review of certain financial statements and services normally provided by the independent registered public accounting firm
in connection with statutory and regulatory filings or engagements. We incurred audit fees of $246,073 and $203,363 for 2023 and 2022,
respectively.

 Audit-Related Fees. There were no audit-related
fees for 2023. The audit-related fees for 2022 included fees paid to Marcum LLP in connection with our acquisition of the ManyCam software
from Visicom Media Inc. during the 2022 fiscal year.

 Tax Fees. There were no tax fees for 2023
or 2022.

 All Other Fees. There were no other service
fees for 2023 or 2022.

 Approval of Independent Registered Public Accounting Firm Services
and Fees

 The SEC requires that before our independent
registered public accounting firm is engaged by us to render any audit or permitted non-audit related service, the engagement be either:
(i) approved by our audit committee or (ii) entered into pursuant to pre-approval policies and procedures established by the
audit committee; provided that the policies and procedures are detailed as to the particular service, the audit committee is informed
of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.

 Our audit committee is responsible for pre-approving
all services provided by our independent registered public accounting firm. All of the above services and fees for 2023 and 2022 were
pre-approved by our audit committee.

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 The following are filed as part of this Annual Report:

 1.
 Financial
 Statements

 The financial statements filed as part of this
Annual Report are included in "Item 8. Financial Statements and Supplementary Data."

 2.
 Financial
 Statement Schedules

 All schedules have been omitted since the required
information is not present, or not present in amounts sufficient to require submission of the schedule, or because the information required
is included in the Consolidated Financial Statements or the Notes thereto.

 3.
 Exhibits

 The following exhibits are required by Item 601 of Regulation S-K.

 (a)
 Documents
 filed as part of this Annual Report.

 1.

 Report
 of Independent Registered Public Accounting Firm

 Consolidated
 Balance Sheets as of December 31, 2023 and 2022

 Consolidated
 Statements of Operations for the Years Ended December 31, 2023 and 2022

 Consolidated
 Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2023 and 2022

 Consolidated
 Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

 Notes
 to Consolidated Financial Statements

 2.

 Financial Statement Schedules

 3.
 Exhibits
 required to be filed by Item 601 of Regulation S-K

 The
following exhibits are included herein or incorporated herein by reference:

 2.1#

 Purchase Agreement, dated June 9, 2022, by and among ManyCam ULC, Visicom Media Inc., 2434936 Alberta ULC and Paltalk, Inc. (incorporated
 by reference to Exhibit 2.1 to the Current Report on Form 8-K of the Company filed June 10, 2022 by the Company with the SEC).

 3.1

 Certificate
 of Incorporation of Paltalk, Inc. (as amended through May 11, 2023) (incorporated by reference to Exhibit 3.1 to the Quarterly Report
 on Form 10-Q of the Company filed on August 8, 2023 by the Company with the SEC).

 3.2

 Amended
 and Restated Bylaws of Paltalk, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Company filed
 on March 17, 2023 by the Company with the SEC).

 4.1

 Specimen
 Stock Certificate of Paltalk, Inc. (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K of the Company filed
 on March 23, 2023 by the Company with the SEC).

 4.2*

 Description of Securities of Paltalk, Inc.

 10.1

 Statement
 of Rights and Responsibilities, by and between Paltalk, Inc. and Facebook Inc. (incorporated by reference to Exhibit 10.1 to the
 Annual Report on Form 10-K (File No. 000-52176) filed March 31, 2011 by the Company with the SEC).

 10.2

 Registered
 Apple Developer Agreement, by and between Paltalk, Inc. and Apple Inc. (incorporated by reference to Exhibit 10.2 to the Annual Report
 on Form 10-K (File No. 000-52176) filed March 31, 2011 by the Company with the SEC).

 10.3

 iOS
 Developer Program License Agreement, by and between Paltalk, Inc. and Apple Inc. (incorporated by reference to Exhibit 10.3 to the
 Annual Report on Form 10-K (File No. 000-52176) filed March 31, 2011 by the Company with the SEC).

 10.4

 Amended
 and Restated Paltalk, Inc. 2011 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form
 10-Q (File No. 000-52176) of the Company filed on November 14, 2011 by the Company with the SEC).

 10.5

 Form
 of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-8 (File
 No. 333-174456) of the Company filed on May 24, 2011 by the Company with the SEC).

 10.6

 Form
 of Restricted Stock Award Agreement (incorporated by reference to Exhibit 99.3 to the Registration Statement on Form S-8 (File No.
 333-174456) of the Company filed on May 24, 2011 by the Company with the SEC).

 10.7

 Form
 of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 99.4 to the Registration Statement on Form S-8 (File
 No. 333-174456) of the Company filed on May 24, 2011 by the Company with the SEC).

 10.8

 Form
 of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 000-52176)
 of the Company filed on November 14, 2011 by the Company with the SEC).

 10.9

 Paltalk,
 Inc. 2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed
 on May 20, 2016 by the Company with the SEC).

 10.10

 First
 Amendment to Paltalk, Inc. 2016 Long Term Incentive Plan, dated as of April 10, 2017 (incorporated by reference to Exhibit 10.1 to
 the Current Report on Form 8-K of the Company filed on May 30, 2017 by the Company with the SEC).

 10.11

 Form
 of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of the Company
 filed on August 11, 2016 by the Company with the SEC).

 10.12

 Form
 of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of the Company
 filed on August 11, 2016 by the Company with the SEC).

 10.13

 Form
 of Director and Officer Nonqualified Stock Option Agreement. (incorporated by reference to Exhibit 10.13 to the Annual Report on
 Form 10-K of the Company filed on March 23, 2022 by the Company with the SEC).

 10.14

 Form
 of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of the Company
 filed on August 11, 2016 by the Company with the SEC).

 10.15

 Amended
 and Restated Executive Employment Agreement, dated March 23, 2022, by and between Paltalk, Inc. and Jason Katz (incorporated by reference
 to Exhibit 10.15 to the Annual Report on Form 10-K of the Company filed on March 23, 2022 by the Company with the SEC).

 10.16

 Registration
 Rights Agreement, dated October 7, 2016, by and between Paltalk, Inc. and Clifford Lerner (incorporated by reference to Exhibit 10.2
 to the Current Report on Form 8-K of the Company filed on October 11, 2016 by the Company with the SEC).

 10.17

 Form
 of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed on
 February 15, 2017 by the Company with the SEC).

 10.18

 First
 Amendment to Registration Rights Agreement, dated June 15, 2018, by and between the Company and Clifford Lerner (incorporated by
 reference to Exhibit 10.2 to the Current Report on Form 8-K of the Company filed on June 19, 2018 by the Company with the SEC).

 10.19

 Amended
 and Restated Employment Agreement, dated March 23, 2022, by and between Paltalk, Inc. and Kara Jenny (incorporated by reference to
 Exhibit 10.19 to the Annual Report on Form 10-K of the Company filed on March 23, 2022 by the Company with the SEC).

 10.20

 Letter
 Agreement, dated February 24, 2023, by and between Visicom Media Inc., ManyCam ULC and Paltalk, Inc. (incorporated by reference to
 Exhibit 10.20 to the Annual Report on Form 10-K of the Company filed March 23, 2023 by the Company with the SEC).

 19.1*

 Paltalk, Inc. Insider Trading Policy.

 21.1*

 Subsidiaries of the Company.

 23.1*

 Consent of Marcum LLP.

 31.1*

 Certification of the Chief Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2*

 Certification of the Chief Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1**

 Certification of the Chief Executive Officer and Chief Financial Officer of the Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 97.1*

 Paltalk, Inc. Compensation Recovery Policy.

 101.INS

 101.SCH

 101.CAL

 Document.

 101.DEF

 Document.

 101.LAB

 101.PRE

 Document.

 Cover Page Interactive Data File (formatted as Inline

 #
 Schedules
 and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Paltalk, Inc.
 hereby undertakes to furnish supplementally copies of any of the omitted schedules and exhibits
 upon request by the Securities and Exchange Commission.

 Management
 contract or compensatory plan arrangement.

 *
 Filed
 herewith.

 **
 The
 certification attached as Exhibit 32.1 is not deemed filed with the Securities and Exchange
 Commission and is not to be incorporated by reference into any filing of Paltalk, Inc. under
 the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
 whether made before or after the date of the Annual Report on Form 10-K, irrespective of
 any general incorporation language contained in such filing.

 ITEM 16. FORM 10-K SUMMARY

 SIGNATURES

 Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

 Dated: March 15, 2024

 By:

 /s/ Jason Katz

 Chief Executive Officer

 (Principal Executive Officer)

 Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

 Signature

 Title

 Date

 /s/ Jason Katz

 Chief Executive Officer and Chairman of the Board

 (Principal Executive Officer)

 /s/ Kara Jenny

 Chief Financial Officer and Director

 (Principal Financial and Accounting Officer)

 /s/ Yoram "Rami"
 Abada

 /s/ Geoffrey Cook

 /s/ Lance Laifer

 /s/ John Silberstein

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