PEERSTREAM,PALTALK, INC.
122 East 4230 Jericho Executive Plaza, Suite 400E
ndJericho, NY
Street
New York, New York 10168
(212) 594-5050967-5120

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 16, 20196, 2021

NOTICE IS HEREBY GIVEN that the 20192021 Annual Meeting of Stockholders (the “Annual Meeting”) of PeerStream,Paltalk, Inc., a Delaware corporation (the “Company”), will be held on Thursday, May16, 2019May 6, 2021 at 9:00 a.m., Eastern Time, at the officesby means of Haynes and Boone, LLP located at 30 Rockefeller Plaza, 26th Floor, New York, New York 10112a live audio webcast for the following purposes:

(1)    to elect sevenfive directors to serve until the 20202022 Annual Meeting of Stockholders or until their successors are duly elected and qualified;

(2)    to ratify the appointment of Marcum LLP as the Company’s independent registered public accounting firm;

(3)    to approve on an advisory basis,amendment to the compensationCompany’s Certificate of Incorporation, as amended (the “Charter”), in substantially the form attached to the proxy statement as Annex A, to, at the discretion of the Board of Directors of the Company, effect a reverse stock split with respect to the Company’s named executive officers;issued and outstanding common stock, par value $0.001 per share (the “Common Stock”), including stock held by the Company as treasury shares, at any ratio up to 1-for-4 (the “Range”), with the ratio within such Range to be determined at the discretion of the Board of Directors of the Company (the “Reverse Stock Split”);

(4)    to approve, onif and only if the Reverse Stock Split is approved and implemented, an advisory basis,amendment to the frequencyCharter, in substantially the form attached to the proxy statement as Annex B, to, at the discretion of future advisory votes on named executive officer compensation;the Board of Directors of the Company, reduce the total number of authorized shares of Common Stock from 25,000,000 to 20,000,000; and

(5)    to transact any other business that may properly come before the Annual Meeting or any adjournments, postponements or recesses thereof.

Stockholders are referred to the proxy statement accompanying this notice for more detailed information with respect to the matters to be considered at the Annual Meeting. After careful consideration, the Company’s Board of Directors has determined that each proposal listed above is in the best interests of the Company and its stockholders and has approved each proposal.The Company’s Board of Directors recommends that at the Annual Meeting you vote “FOR” proposals1,2, and 3 and “3 YEARS” for proposal 4.

The Board of Directors has fixed 5:00 p.m., Eastern Time, on April1, 2019March 29, 2021 as the record date (the “Record Date”). Only holders of shares of common stockCommon Stock of record on the Record Date are entitled to receive notice of the Annual Meeting and to vote at the Annual Meeting or at any postponement(s), adjournment(s) or rescess(es) of the Annual Meeting. A complete list of registered stockholders entitled to vote at the Annual Meeting will be available for inspection at the headquarters of the Company during regular business hours for at least the ten calendar days prior to the Annual Meeting. The list will also be available during the Annual Meeting for inspection by stockholders. If you would like to review the list, please contact our Investor Relations department by emailing IR@paltalk.com.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE STOCKHOLDER MEETING TO BE HELD ON MAY16, 2019:6, 2021:

Our Proxy Statement and 20182020 Annual Report are available at:

investors.peerstream.com/www.investors.paltalk.com/annual-reports

What should I do if I receive more than one set of voting materials?

You may receive more than one set of voting materials, including multiple copies of this Proxy Statement and multiple proxy cards or voting instruction cards. For example, if you hold your common stockCommon Stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold stock. Similarly, if you are a stockholder of record and hold stock in a brokerage account, you will receive a proxy card

What is the difference between a stockholder of record and a “street name” holder?

If your stock is registered directly in your name with Corporate Stock Transfer, Inc.,EQ Shareowner Services, the Company’s transfer agent, you are considered the stockholder of record with respect to that stock. The Proxy Statement and proxy card have been sent directly to you by the Company’s transfer agent.

If your stock is held in a stock brokerage account or by a bank or other nominee, such nominee is considered the record holder of that stock. You are considered the beneficial owner of that stock, and your stock is held in “street name.” The Proxy Statement has been forwarded to you by your nominee. As the beneficial owner, you have the right to direct your nominee concerning how to vote your stock by using the voting instructions it included in the mailing or by following its instructions for voting.

What is a broker non-vote?

A broker non-vote occurs when a broker holding stock for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner. In the absence of specific instructions from you, your broker does not have discretionary authority to vote your stock with respect to the Director Election Proposal, the Say-on-Pay Proposal or the Say-on-FrequencyProposal. Your broker does have discretionary authority to vote your stock with respect to the Auditor Ratification Proposal, Reverse Stock Split Proposal and Authorized Share Reduction Proposal.

How do I vote my stock?

If you are a record holder, you may vote your common stockCommon Stock by following the instructions included on your proxy card. To vote at the Annual Meeting, in person or by proxy. To vote in person, you must attend the Annual Meeting and obtainonline and submit a ballot.ballot in accordance with the instructions provided at www.proxydocs.com/PALT. The ballot will be provided at the Annual Meeting. To vote by proxy, you must mark, sign, date and promptly return the proxy card in the enclosed postage-paid envelope.

Even if you currently plan to attend the Annual Meeting online, we recommend that you also returnvote your proxy card or voting instructionsshares as described abovesoon as possible so that your votes will be counted if you later decide not to attend the Annual Meeting or are unable to attend.

What are my choices when voting?

With respect to the proposals to be acted upon at the Annual Meeting, you may vote as follows:

•        Director Election Proposal — “FOR” each of the Director Nominees (as defined below), “WITHHOLD” from each of the Director Nominees, or “WITHHOLD” from individual Director Nominees;

•        Auditor Ratification Proposal — “FOR,” “AGAINST” or “ABSTAIN;”;

•        SayReverse Stock-on-Pay-Split Proposal — “FOR,” “AGAINST” or “ABSTAIN;”; and

•        Say-on-FrequencyAuthorized Share Reduction Proposal — “1 YEARFOR,” “2YEARS,” “3YEARSAGAINST” or “ABSTAIN.”

What areHow does the Board of Directors’ recommendations on howDirectors recommend that I should vote my stock?

The Board of Directors recommends that you vote your stock as follows:

•        “FOR” the Director Election Proposal;

•        “FOR” the Auditor Ratification Proposal;

What percentage of the vote is required to approve each proposal?

Assuming the presence of a quorum, the Director Nominees that receive the most votes from the holders of the shares of our common stockCommon Stock for their election will be elected (i.e., the affirmative vote by the holders of a plurality of the shares of common stockCommon Stock voting at the Annual Meeting is required for the election of the Director Nominees). The Auditor Ratification Proposal the Say-on-Pay Proposal and the Say-on-Frequency Proposal requirerequires the affirmative vote, in person or by proxy, of the majority of votes cast for or against the proposalAuditor Ratification Proposal at the Annual Meeting. In accordance with the Delaware General Corporation Law, as amended (“DGCL”), and the Company’s organizational documents, the approval of the Reverse Stock Split Proposal and the Authorized Share Reduction Proposal require the affirmative vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote at the Annual Meeting.

If the Reverse Stock Split Proposal is approved by the Company’s stockholders, is the Company required to effect the Reverse Stock Split?

No. The Board of Directors has the sole authority to determine whether or not to effect the Reverse Stock Split, even if the Reverse Stock Split Proposal is approved by our stockholders. If the Reverse Stock Split Proposal is approved by our stockholders, the Board of Directors will make a determination as to whether effecting the Reverse Stock Split is in the best interests of the Company and our stockholders. In making its determination, the Board of Directors will consider, among other things:

•        whether effecting the Reverse Stock Split is necessary to obtain approval of the listing of the Common Stock on The Nasdaq Capital Market;

•        the per share price of our Common Stock immediately prior to the Reverse Stock Split;

•        the expected stability of the per share price of our Common Stock following the Reverse Stock Split;

•        the likelihood that the Reverse Stock Split will result in increased marketability and liquidity of our Common Stock;

•        prevailing market conditions;

•        general economic conditions in our industry; and

•        our market capitalization before and after the Reverse Stock Split.

If the stockholders approve the Reverse Stock Split Proposal and the Board of Directors decides to effect the Reverse Stock Split, the Board of Directors will have the sole authority to determine the timing of filing the amendment to our Charter to effect the Reverse Stock Split. The Board of Directors will also have the sole discretion to determine the ratio of the Reverse Stock Split, subject to such ratio being within the Range of up to 1-for-4.

When will the Reverse Stock Split become effective?

If the Reverse Stock Split Proposal is approved by our stockholders, the Reverse Stock Split will become effective upon the filing of the amendment to our Charter related to the Reverse Stock Split with the Secretary of State of the State of Delaware. However, notwithstanding approval of the Reverse Stock Split Proposal by our stockholders, the Board of Directors will have the sole authority to elect whether or not and when to amend our Charter to effect the Reverse Stock Split. The Board of Directors will also have the sole discretion to determine the ratio of the Reverse Stock Split, subject to such ratio being within the Range of up to 1-for-4.

How will fractional shares resulting from the Reverse Stock Split be treated?

We do not intend to issue fractional shares in connection with the Reverse Stock Split. If you are a direct holder of our Common Stock, to the extent the Reverse Stock Split would result in you owning a fractional share of Common Stock, such fractional share will be rounded up to the nearest whole share of Common Stock. If you are the holder of an outstanding equity award granted under one of our equity incentive plans (discussed below) that is exercisable, convertible or exchangeable for Common Stock, to the extent the Reverse Stock Split would result in your award entitling you to own a fractional share of Common Stock, your award will be rounded down to the nearest whole share

and the per share exercise price resulting from any such reductions or adjustments will be rounded up to the nearest whole cent to comply with the requirements of Sections 409A and 424 of the Internal Revenue Code of 1986, as amended (the “Code”).

How will the Reverse Stock Split impact the voting rights of stockholders?

The Reverse Stock Split will affect all of our stockholders uniformly and will not change any stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split would result in adjustments with respect to fractional shares.

Is the Authorized Share Reduction conditioned on the approval of the Reverse Stock Split Proposal and the implementation of the Reverse Stock Split?

Yes. If the Reverse Stock Split Proposal is approved and the Reverse Stock Split is implemented, the Board of Directors, subject to the approval of the Authorized Share Reduction Proposal, intends to implement the Authorized Share Reduction to reduce the total number of shares of Common Stock that we are authorized to issue from 25,000,000 to 20,000,000. If the Reverse Stock Split Proposal is not approved by our stockholders or the Reverse Stock Split is otherwise not implemented by the Board of Directors, the Board of Directors does not intend to implement the Authorized Share Reduction.

The implementation of the Reverse Stock Split, however, is not conditioned on the approval of the Authorized Share Reduction Proposal or the implementation of the Authorized Share Reduction. Even if the Authorized Share Reduction Proposal is not approved by our stockholders or if the Board of Directors determines not to implement the Authorized Share Reduction, the Board of Directors will retain the option to implement the Reverse Stock Split, subject to the approval of the Reverse Stock Split Proposal by our stockholders.

If the Authorized Share Reduction Proposal is approved by the Company’s stockholders, is the Company required to effect the Authorized Share Reduction?

No. The Board of Directors has the sole authority to determine whether or not to effect the Authorized Share Reduction, even if the Authorized Share Reduction Proposal is approved by our stockholders. If the Authorized Share Reduction Proposal is approved by our stockholders, the Board of Directors will make a determination as to whether effecting the Authorized Share Reduction is in the best interests of the Company and our stockholders. In addition, the implementation of the Authorized Share Reduction is subject to the approval of the Reverse Stock Split Proposal and the implementation of the Reverse Stock Split.

In making its determination, the Board of Directors will consider, among other things, whether the Authorized Share Reduction is in the best interests of the Company’s stockholders in light of the Company’s anticipated needs to reserve authorized shares of Common Stock for:

•        raising capital through the sale of equity securities;

•        entering into strategic business combinations;

•        providing equity incentives to officers, directors and employees; and

•        other corporate purposes.

In addition, whether the Board of Directors determines to implement the Authorized Share Reduction will depend on the ratio that the Board of Directors selects for the Reverse Stock Split and the number of shares of Common Stock that are issued and outstanding following the Reverse Stock Split.

If the stockholders approve the Authorized Share Reduction Proposal and the Board of Directors decides to effect the Authorized Share Reduction, the Board of Directors will have the sole authority to determine the timing of filing the amendment to our Charter to effect the Authorized Share Reduction; provided, however, that the implementation of the Authorized Share Reduction is conditioned on the approval of the Reverse Stock Split Proposal and the implementation of the Reverse Stock Split.

When will the Authorized Share Reduction become effective?

If the Reverse Stock Split Proposal and the Authorized Share Reduction Proposal are approved by our stockholders, and the Reverse Stock Split is implemented, the Authorized Share Reduction will become effective upon the filing of the amendment to our Charter related to the Authorized Share Reduction with the Secretary of State of the State of Delaware. However, notwithstanding approval of the Authorized Share Reduction Proposal and Reverse Stock Split Proposal by our stockholders and the implementation of the Reverse Stock Split, the Board of Directors will have the sole authority to elect whether or not and when to amend our Charter to effect the Authorized Share Reduction.

If I am a holder of Common Stock with shares represented by share certificates, should I send in my share certificates now?

NO, STOCKHOLDERS OF THE COMPANY SHOULD NOT SEND SHARE CERTIFICATE(S) WITH THEIR PROXY CARD(S). If the Reverse Stock Split is completed, our Transfer Agent will send our stockholders written instructions for sending in their share certificates or, in the case of shares held electronically in “book-entry” form, for surrendering their book-entry shares.

How are abstentions and broker non-votes treated?

Abstentions are included in the determination of the number of shares of common stockCommon Stock present at the Annual Meeting for determining a quorum at the meeting. Abstentions will have no effect upon any of the proposals to be voted upon atDirector Election Proposal or the Annual Meeting.Auditor Ratification Proposal, but will have the same effect as a vote cast against the Reverse Stock Split Proposal and the Authorized Share Reduction Proposal.

Broker non-votes will be included in the determination of the number of shares of common stockCommon Stock present at the Annual Meeting for determining a quorum at the meeting. Broker non-votes will have no effect on the Director Election Proposal, the Say-on-Pay Proposal or the Say-on-FrequencyProposal. Broker non-votes are not applicable to the Auditor Ratification Proposal, Reverse Stock Split Proposal and Authorized Share Reduction Proposal because your broker has discretionary authority to vote your shares of common stockCommon Stock with respect to such proposal.proposals.

Do I have any dissenters’ or appraisal rights with respect to any of the matters to be voted on at the Annual Meeting?

No. None of our stockholders have any dissenters’ or appraisal rights with respect to the matters to be voted on at the Annual Meeting.

Where can I find voting results?

The Company expects to publish the voting results of the Annual Meeting in a Current Report on Form 8-K, which it expects to file with the SEC within four business days following the date of the Annual Meeting.

Who can help answer my questions?

The information provided above in this “Question and Answer” format is for your convenience only and is merely a summary of the information contained in this Proxy Statement. We urge you to carefully read this entire Proxy Statement, including the documents we refer to in this Proxy Statement. If you have any questions, or need additional material, please feel free to contact Investor Relations atby emailing ir@peerstream.comIR@paltalk.com.

CORPORATE AND SOCIAL RESPONSIBILITY

Our mission at Paltalk, Inc. has always been to provide innovative products and services to help our users communicate virtually in a safe and secure way. We also believe that we have a responsibility to the communities and the environment in which we operate, and we believe that operating our company in an environmentally and socially responsible manner will help drive the long-term growth of our business. Our social and environmental initiatives are an integral part of how we operate and are intended to foster a culture where our employees are proud of the company for which they work. We attempt to fulfill our social and environmental responsibilities in many ways, including by adhering to the beliefs and taking the actions set forth below:

PROPOSAL 1: ELECTION OF DIRECTORS

The Board of Directors has nominated sevenfive directors, Jason Katz, Alexander Harrington,Kara Jenny, Yoram “Rami” Abada, Lance Laifer Michael Levit,and John Silberstein and Michael Jones, for election at the Annual Meeting by the stockholders (the(collectively, the “Director Nominees” and each, a “Director Nominee”).

The number of members of our Board of Directors may be fixed from time to time by the majority of the entire Board of Directors and currently consists of sevenfive directors.

Each director that is elected at a future annual meeting of stockholders, and each director that is elected to fill a vacancy or newly created directorship, shall hold a term of office that expires at the next annual meeting of stockholders and until his or her successor has been duly elected and qualified. The Board of Directors has nominated each Director Nominee for election as a director to serve for a term expiring at the annual meeting of stockholders to be held in 20202022 or until his or her respective successor is duly elected and qualified.

To be elected as a director, the Director Nominees must receive a plurality of the votes cast by the stockholders entitled to vote for the election of directors. Should the Director Nominees become unable or unwilling to accept nomination or election, the proxy holders may vote the proxies for the election, in his or her stead, of any other person the Board of Directors may nominate or designate. The Director Nominees have each expressed an intention to serve the entire term for which election is sought.

Directors and Director Nominees

The following table sets forth the name, age and position of ourthe directors currently serving on our Board of Directors and the Director Nominees:

When considering whether the Director Nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure, the Board of Directors focused primarily on the information discussed in the directors’ individual biographies set forth below.

Yoram “Rami” Abada was appointed as a member of our Board of Directors in October 2016. Mr.AbadaMr. 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.AbadaMr. 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.AbadaMr. 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. In July 2010, while Mr.Abada served as an executive officer and board member, Jennifer Convertibles, Inc. filed for Chapter 11 bankruptcy protection. From 1997 until 2003, Mr.AbadaMr. 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.AbadaMr. Abada currently serves as a member of the board of directors of 168 5th5th Avenue Realty Corp., a privately held real estate corporation. Mr.AbadaMr. Abada holds a B.B.A. from the Bernard Baruch College of the City University of New York.

Mr.Abada’sMr. 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.

of PeerStream (the “AVM Merger”), in October 2016. In his capacity as an executive officer and director of AVM, Mr.KatzMr. Katz oversaw the strategic direction of AVM and its subsidiaries, and also managed its system infrastructure. Mr.KatzMr. Katz is an authority on instant messaging as well as web-based voice and video. Mr.KatzMr. Katz has appeared at numerous industry forums as well as on Bloomberg Radio and CNN Radio. Prior to AVM, Mr.KatzMr. Katz co-founded MJ Capital, a money management firm. Earlier in his career, Mr.KatzMr. Katz was a corporate lawyer at the New York office of Fulbright & Jaworski. Mr.KatzMr. 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’sMr. 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.

Alexander Harrington is our Chief Executive Officer and a member of our Board of Directors. Mr.Harrington was appointed as our Chief Executive Officer in October 2015. Mr.Harrington also served as our Chief Operating Officer from February 2014 until his appointment as our Chief Executive Officer in October 2015, our Chief Financial Officer from March 2014 to October 2016 and our interim Chief Financial Officer from October 2016 to November 2016. Mr.Harrington was originally appointed to our Board of Directors in June 2014. Mr.Harrington previously served as Chief Executive Officer of MeetMoi, LLC from June 2009 to November 2013, a social dating mobile platform, prior to its sale to Match.com, LLC. Prior to that, Mr.Harrington served as the Senior Vice President of Strategy and Operations for Zagat Survey, LLC from 2004 to 2008, where he oversaw a transformation of the digital business which ultimately culminated in the company’s sale to Google Inc. In prior roles, Mr.Harrington served as the Senior Director of New Business Development at Sony BMG Entertainment and as an associate and analyst in investment banking at The Beacon Group and Smith Barney, respectively. Mr.Harrington holds a Master of Business Administration degree from the Wharton School at the University of Pennsylvania and a Bachelor’s degree in History from Williams College.

Through his service as our Chief Executive Officer, as well as his previous industry experience, Mr.Harrington provides our Board of Directors with valuable business and executive leadership experience.

Michael Jones was appointed as a member of our Board of Directors in November 2017 and serves as a member of our Blockchain Advisory Board. Since 2011, Mr.Jones has served as the co-founder and Chief Executive Officer of Science, Inc., a Los Angeles-based startup studio that develops, invests in, and acquires various businesses, including HelloSociety (acquired by New York Times), FameBit (acquired by Google) and Dollar Shave Club (acquired by Unilever), as well as companies focused on blockchain technology. Prior to that, Mr.Jones served as Chief Executive Officer of several other companies, including Userplane (acquired by AOL), Tsavo (acquired by Cybermedia), PBJ (acquired by JB), MySpace (acquired by Specific Media), Myspace Japan (acquired by Softbank) and FIM (acquired by Rubicon Project).

Mr.Jones brings significant experience in technology driven startups, both at the operating and investment level, and expertise in blockchain technology, to our Board of Directors.

Lance Laifer was appointed as a member of our Board of Directors in October 2016. Mr.LaiferMr. Laifer served as a member of AVM’s Board of Directors from 1999 through the completion of the AVM Merger in October 2016. Mr.LaiferMr. 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.LaiferMr. Laifer was the Chief Executive Officer of Wapiti Capital Management, LLC. Mr.LaiferMr. Laifer also served on the board of directors of ValueVision from 1992 to 1995.

Mr.Laifer’sMr. 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.

Each of our Director Nominees is currently serving on our Board of Directors. There are no agreements or understandings between our directors and executive officers or any other person pursuant to which they were selected as a director or executive officer. In addition, there are no family relationships between our directors and any of our executive officers.

Vote Required

To be elected as a director, the Director Nominees must receive a plurality of the votes cast by the stockholders entitled to vote for the election of directors.

Meetings of the Board of Directors and Committees

The Board of Directors held sixseven meetings in 2018.2020. During 2018,2020, 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. Alexander Harrington, Jason Katz John Silberstein and Yoram Abada, representing fourtwo of our eightfive directors at the time of our 20182020 annual meeting of stockholders, attended the 20182020 annual meeting.

Audit Committee

The audit committee consists of Mr.Abada, Mr.SilbersteinMr. Abada and Mr.Levit. Mr.AbadaMr. Silberstein. Mr. Abada currently serves as the chairman of the audit committee. Our Board of Directors has determined that each of Mr.Abada, Mr.SilbersteinMr. Abada and Mr.LevitMr. Silberstein is independent under The Nasdaq Stock Market LLC (“NASDAQ”) listing standards and Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended (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 their 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;

•        reviewing our policies on risk assessment and risk management;

•        reviewing and approving related party transactions;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, at least annually,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; and

•        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.firm; and

•        monitoring compliance with our Code of Business Conduct and Ethics 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.AbadaMr. 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 atwww.peerstream.com/www.investors.paltalk.com/corporate-governance. 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. The audit committee held fiveeight meetings during the 20182020 fiscal year.

Compensation Committee

The compensation committee consists of Mr.AbadaMr. Abada and Mr.Silberstein. Mr.SilbersteinMr. Silberstein. Mr. Silberstein currently serves as the chairman of the compensation committee. Our Board of Directors has determined that each of Mr.AbadaMr. Abada and Mr.SilbersteinMr. Silberstein is independent under NASDAQ listing standards and is a “non-employee directors”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. A copy of the compensation committee charter is available on our website atwww.peerstream.com/www.investors.paltalk.com/corporate-governance-governance. The compensation committee held one meetingfour meetings during the 20182020 fiscal year.

Stockholder Proposals” included herein. A stockholder’s recommendation must be accompanied by the information with respect to stockholder nominees that is specified in our By-Laws, 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 provision in our By-Laws will be considered and evaluated by the Nominating Directors in the same manner as candidates recommended from other sources.

The Nominating Directors do 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 Directors do 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 Directors also consider the director nominees’ potential contribution to the overall composition and diversity of the Board of Directors.

Report of the Audit Committee

Our audit committee reviewed the Company’s audited financial statements for the year ended December31, 2018.December 31, 2020. The following is the report of the audit committee with respect to the Company’s audited financial statements for the year ended December31, 2018,December 31, 2020, which includes the consolidated balance sheets of the Company as of December31, 2018December 31, 2020 and December31, 2017,December 31, 2019, and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for each of the years in the two-year period ended December31, 2018,December 31, 2020, and the notes thereto. The information contained in this report shall not be deemed to be “soliciting material” or to be “filed with the SEC” or subject to the liabilities of Section 18 of the Exchange Act, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that the Company specifically incorporates it by reference into such filing.

Reviews and Discussions with Management

The audit committee has reviewed and discussed the Company’s audited financial statements with management.

Review and Discussions with Independent Registered Public Accounting Firm

The audit committee has discussed with its independent auditor the matters required to be discussed by Auditing Standard No. 1301, “Communications with Audit Committees” issued by the Public Company Accounting Oversight Board (“PCAOB”).

The audit committee has also received written disclosures and the letter from the independent auditor required by applicable requirements of the PCAOB regarding the independent auditor’s communications with the audit committee concerning independence and has discussed with the independent auditor its independence from the Company. The audit committee has also reviewed and discussed the selection, application and disclosure of the critical accounting policies of the Company with the independent auditor.

Based on the review and discussions referred to above, the audit committee approved the inclusion of the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December31, 2018.December 31, 2020.

Involvement in Certain Legal Proceedings

Except as described in Mr.Abada’s biography above, thereThere have been no material legal proceedings that would require disclosure under the federal securities laws that are material to an evaluation of the ability or integrity of our directors or executive officers or in which any director, officer, nominee or principal stockholder, or any affiliate thereof, is a party adverse to us or has a material interest adverse to us.

Board Leadership Structure and Role in Risk Oversight

The positions of Chairman of the Board of Directors and Chief Executive Officer are currently fulfilled by two separate individuals,one individual, with Jason Katz serving as our Chairman of the Board of Directors and Alexander Harrington serving as our Chief Executive Officer. We believePursuant to our By-Laws, the Board of Directors is responsible for appointing the Chairman of the Board of Directors and the Chief Executive Officer. Our By-Laws permit the Chairman to also hold the position of Chief Executive Officer. The Board of Directors selects its Chairman and our Chief Executive Officer in the manner it considers to be in the best interests of the Company. In accordance with our By-laws, the Board considers from time to time whether it is in the best interests of the Company to have the same person occupy the offices of Chairman of the Board and Chief Executive Officer, using its business judgment after considering all relevant circumstances. Our Board has determined that it is in the best interests of the Company and its stockholders at this leadershiptime to have both (i) a combined Chairman and Chief Executive Officer role and (ii) a Board of Directors comprised of a majority of independent directors.

Jason Katz has served as our Chief Executive Officer since December 2019 and as our President, Chief Operating Officer and Chairman of the Board since October 2016. The Board believes, at this time, that this structure allows Mr.Harrington to focus primarily on our day-to-dayis appropriate and in the best interests of the Company and its stockholders. Specifically, the Board acknowledges that Mr. Katz has significant experience managing the Company’s business operations and the implementationBoard wants to preserve this continuity. Although the Board believes that this current leadership structure is appropriate at this time, the Board believes that there is no specific leadership structure that best applies to all companies, nor is there one specific leadership structure that would permanently suit our Company. As a result, the decision as to whether to combine or separate the positions of Chairman and Chief Executive Officer may vary from time to time, as conditions and circumstances warrant.

We do not currently have a lead independent director. We have elected not to have a lead independent director because we do not believe one has been necessary nor that it is cost efficient for a company of our strategic, financialsize and management policies while allowing Mr.Katzwe do not expect to establish a lead our Board of Directorsindependent director in identifying strategic priorities and leading the discussion and execution of strategy.foreseeable future.

Our Board of Directors is primarily responsible for overseeing the Company’s risk management processes. The Board of Directors receives periodic reports from management concerning the Company’s assessment of risks. The Board of Directors focuses on the most significant risks facing the Company, including risks related to cybersecurity, the Company’s general risk management strategy and whether any of our compensation policies and practices create risks to our risk management practices or provide incentives to our executives and other employees to take risks that are reasonably likely to have a material adverse effect on us. While the Board of Directors oversees the Company’s

Certain Relationships and Related Party Transactions

Certain Legal Fees

James Silberstein, the brother of John Silberstein, a current member of our Board of Directors, is employed as a Counsel at Fross Zelnick Lehrman & Zissu, P.C., which serves as our outside legal counsel for certain matters. During 2017 and 2018, we paid Fross Zelnick Lehrman & Zissu, P.C. approximately $150,000 and $100,000, respectively, for legal services.

Lerner Consulting Agreement and Restricted Stock Awards

For information regarding Clifford Lerner’s consulting agreement and restricted stock awards, see “Director Compensation — Director Compensation Table.”

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 April19,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 of the Company or Director Nominees; (ii) any of our executive officers; (iii) a person known by us to be the beneficial owner of more than 5% of our common stockCommon Stock or (iv) an immediate family member of any of the foregoing.

Communications with the Board of Directors

The Board of Directors welcomes communication from the Company’s stockholders. Stockholders and other interested parties who wish to communicate with a member or members of our Board of Directors or a committee thereof may do so by addressing correspondence to the board member, members or committee, c/o Chief Executive Officer, 122 East 42nd Street,30 Jericho Executive Plaza, Jericho, New York New York 10168.11753. Our Chief Executive Officer will review and forward correspondence to the appropriate person or persons. The Board of Directors has requested that certain items that are unrelated to its duties and responsibilities be excluded, such as spam, junk mail and mass mailings, resumes and other forms of job inquiries, surveys, and business solicitations or advertisements.

The Chief Executive Officer will not forward any communication determined in its good faith belief to be frivolous, unduly hostile, threatening, illegal, or similarly unsuitable. Each communication subject to this policy that was not forwarded because it was determined by the Chief Executive Officer to be frivolous is retained in our files and made available at the request of any member of the Board of Directors to whom such communication was addressed.

DIRECTOR COMPENSATION

The following table provides compensation information for the year ended December31, 2018December 31, 2020 for each member of our Board of Directors during the fiscal year ended December31, 2018,December 31, 2020, except for (i) Alexander Harrington, who doesJason Katz, our current Chief Executive Officer and Chairman of the Board, and (ii) Kara Jenny, our current Chief Financial Officer, both of whom did not receive any compensation for histheir service as a director in 2020 and whose compensation is reported in “Executive Compensation — Summary Compensation Table” below,below. Messrs. Jones and (ii) Jason Katz, who is an employeeLevit resigned from the Board of the Company but is not a named executive officer (as defined below)Directors effective May 14, 2020 and does not receive any compensation for his service as director:November 24, 2020, respectively.

Director Compensation Table
Fiscal Year 20182020

____________

(1)      As of December 31, 2018,2020, none of our directors held any outstanding stock awards.

(2)      Represents the amount recognized for financial statement reporting purposes in accordance with Accounting Standards Codification 718,Compensation — Stock Compensation (“ASC 718”).

(3)      The aggregate amount of unexercised stock options held by each director listed in the table above as of December 31, 20182020 was as follows:

(4)      Represents the fair market value of a stock option granted on February 16, 2018March 25, 2020 that represents the right to purchase 6,000 shares of common stock,Common Stock, all of which have vested and remain unexercised.

(5)      Represents fees paidthe fair market value of a stock option granted on March 25, 2020 that represents the right to Mr.Lerner pursuant to a consulting agreement betweenpurchase 6,000 shares of Common Stock. Effective November 24, 2020, Mr. Levit resigned from the Company and Mr.Lerner. Mr.Lerner did not stand for reelection at our 2018 annual meeting of stockholders, and as a result, no longer serves on our Board of Directors. On June 15, 2018, inIn connection with Mr. Lerner’sLevit’s resignation, from his positions as officer and employee of the Company and entry into the consulting agreement, the Company entered into amendments to (i) a restricted stock award agreement, by and between the Company and Mr. Lerner, dated March 3, 2016, as amended, related to the original award of 142,858 shares of restricted commonCommon Stock underlying the stock ofoption that were unvested were automatically forfeited, and the Company to Mr. Lerner and (ii) a restricted stock award agreement, by and between the Company and Mr. Lerner, dated December 14, 2011, as amended, related to the original award of 121,429 shares of restricted commonCommon Stock underlying the stock of the Company to Mr. Lerner (together, the “Restricted Stock Award Amendments”). On October 7, 2018, 79,285 shares of Mr. Lerner’s restricted stock vested. Pursuant to the Restricted Stock Award Amendments, the Company was required, in order to assist Mr. Lerner in satisfying his tax withholding obligations with respect to the vesting restricted shares, to withhold 20,000 shares of vesting restricted common stock. The remaining amount of the tax withholding obligation was paid by Mr. Lerner and Mr. Lerner’s unvested shares of restricted common stock will continue to vest as scheduled. Mr. Lerner was not paid any fees for his service asoption that had vested were forfeited following a director in 2018.90-day post-resignation exercise period.

We currently do not have a formal policy to provide compensation to members of our Board of Directors for services rendered in that capacity. However, our Board of Directors has the authority to fix the compensation of directors and directors are permitted to receive fixed fees and other compensation for their services as directors.

In January 2021, our Board of Directors has not made any changesauthorized and approved the following annual cash retainers for each non-employee director: (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 of our directors for 2019.committee chair — $4,000.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table and accompanying footnotes set forth as of the Record Date certain information regarding the beneficial ownership of shares of our common stockCommon 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, each Director Nominee and each of our named executive officers with respect to the year ended December31, 2018December 31, 2020 and (iii) all of our directors and executive officers as a group. Except as otherwise indicated, all common stockCommon Stock is owned directly, and 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 PeerStream,Paltalk, Inc., 122 East 42nd Street,30 Jericho Executive Plaza, Suite 400E, Jericho, New York New York 10168.11753. The applicable percentage ownership is based on 6,874,679shares6,906,454 shares of our commonCommon Stock, excluding shares held by the Company as treasury stock, issued and outstanding as of the Record Date. In computing the number of shares of common stockCommon Stock beneficially owned by a person and the percentage ownership of that person, we consider all shares of unvested restricted stock to be outstanding because the holders of unvested restricted stock have the right to vote such stock.

____________

*        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 stockCommon Stock that such person has the right to acquire within 60 days of the date of the Record Date, including through the exercise of stock options or warrants.options. For purposes of computing the percentage of outstanding shares of the Company’s common stockCommon Stock held by each person or group of persons named above, any common stockCommon Stock that such person or persons has the right to acquire within 60 days of the date of the Record Date 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 the vested or deemed vested portion of (i) a stock option representing the right to purchase 714shares of common stock granted on June 17, 2014, all of which have vested, (ii) a stock option representing the right to purchase 28,571201,265 shares of common stock granted on October 13, 2015, all of which have vested, (iii) a stock option representing the right to purchase 57,142 shares of common stock granted on October 13, 2015, all of which have vested, (iv) a stock option representing the right to purchase 1,428 shares of common stock granted on March 3, 2016, all of which have vested, (v) a stock option representing the right to purchase 80,000 shares of common stock granted on April 13, 2017, of which 40,000 shares have vested and 20,000 shares will vest on each of October 13, 2019 and 2020 and (vi) a stock option representing the right to purchase 28,571 shares of common stock granted on May 5, 2017, of which 14,285 shares have vested and 7,143 shares will vest on each of November 5, 2019 and 2020. Does not include unvested performance-based stock options because the satisfaction of the underlying performance criteria is deemed to be outside of the executive’s control.

(3)      Includes 201,265shares of common stockCommon Stock held by Mr.Katz’sMr. Katz’s spouse that may be deemed to be beneficially owned by Mr.Katz. Mr.KatzMr. Katz. Mr. Katz disclaims beneficial ownership of these shares and nothing herein shall be deemed an admission that Mr.KatzMr. Katz is the beneficial owner of these shares for any purpose. Does not include unvested performance-based stock options because the satisfaction of the underlying performance criteria is deemed to be outside of the executive’s control.

(6)      Includes the vested or deemed vested portion of a (i) stock option representing the right to purchase 6,000shares6,000 shares of common stockCommon 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 stockCommon Stock granted on February 16, 2018, all of which have vested, and (iii) a stock option representing the right to purchase 6,000 shares of common stockCommon Stock granted on January 11, 2019, all of which 1,500have 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 and (v) a stock option representing the right to purchase 8,000 shares of Common Stock granted on March 26, 2021, of which 2,000 shares have vested and 1,500 shares will vest on eachwithin 60 days of June 30, 2019, September 30, 3019 and December 31, 2019.the Record Date. Also includes (i) 387,869 shares of common stockCommon Stock held by Hilltop Partners, L.P. and (ii) 14,486 shares of common stockCommon 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 stockCommon 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).

(9)(7)      Includes the vested or deemed vested portion of a (i) stock option representing the right to purchase 6,000shares6,000 shares of common stockCommon Stock granted on February 2, 2017,16, 2018, all of which have vested, (ii) a stock option representing the right to purchase 6,000 shares of common stockCommon Stock granted on February 16, 2018,January 11, 2019, all of which have vested, and (iii) a stock option representing the right to purchase 6,000 shares of common stockCommon Stock granted on January 11, 2019,March 25, 2020, all of which 1,500 shares have vested and 1,500 shares will vest on each of June 30, 2019, September 30, 3019 and December 31, 2019.

(10)    Includes the vested or deemed vested portion of(iv) a stock option representing the right to purchase 6,000shares8,000 shares of common stockCommon Stock granted on February 16, 2018, allMarch 26, 2021, of which have vested, and (ii) a stock option representing the right to purchase 6,000 shares of common stock granted on January 11, 2019, of which 1,5002,000 shares have vested and 1,500 shares will vest on eachwithin 60 days of June 30, 2019, September 30, 3019 and December 31, 2019.the Record Date. Also includes 10,202 shares of common stockCommon Stock held by MLS Family Investors LLC (“MLS”). Mr. Silberstein is the sole manager of MLS, and New Trust B u/w/o Murray L. Silberstein, a trust of which Mr. Silberstein is a beneficiary, owns approximately 55% of the interest in MLS. As a result, Mr. Silberstein may be deemed to beneficially own the shares of common stockCommon 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 43 shares of common stockCommon 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.

(11)(8)      Includes the shares of common stockCommon Stock beneficially owned by each of the officers and directors listed immediately above as well as 128,671shares deemedbut excludes the shares of Common Stock beneficially owned by Judy Krandel,Mr. Vakil, as Mr. Vakil was not executive officer as of the Company’s Chief Financial Officer, which such shares include 108,571shares underlying vested or deemed vested stock options.date of this Proxy Statement.

(12)(9)      Based on the information contained in the Schedule 13D filed with the SEC on October 17, 2016 and updated to give effect to the 1-for-35 reverse stock split of the Company’s issued and outstanding common stock (the “ReverseCommon Stock Split”) effected by the Company on January 5, 3017,2017 (the “2017 Reverse Stock Split”), and the distribution of escrow shares from AVM Merger. The principal address of The J. Crew Delaware Trust A is c/o J.P. Morgan Trust Company of Delaware, Trustee, 500 Stanton-Christiana Road, DE3-1600, Newark, Delaware 19713.

(13)(10)    Based solely on the information contained in the Schedule 13G/A filed with the SEC on February 12, 2018. The principal address of Perry Scherer is 338 Jericho Turnpike, Suite 182, Syosset, New York 11791.

(14)(11)    Based on the information contained in the Schedule 13D filed with the SEC on October 17, 2016 and updated to give effect to the 2017 Reverse Stock Split and the distribution of escrow shares from the AVM Merger. Mr. Laifer is the sole director and principal stockholder of 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 stockCommon Stock beneficially owned by Hilltop Partners, L.P. (of which LCM serves as general partner and investment adviser). As a result, the shares of Common Stock held by Hilltop Partners, L.P. are also reported in this table as being beneficially owned by Mr. Laifer.