Snap Interactive, Inc (Form: 10-Q, Received: 08/11/2016 13:36:32)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

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

For the transition period from to

Commission File Number 000-52176

SNAP INTERACTIVE, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-3191847
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

320 W 37th Street, 13th Floor

New York, NY 10018

(Address of principal executive offices)

(Zip Code)

(212) 594-5050

(Registrant’s telephone number, including area code)

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at August 11, 2016
Common Stock, par value $0.001 per share		41,692,826*

*Excludes 10,325,000 shares of unvested restricted stock.

SNAP INTERACTIVE, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2016

Table of Contents

		Page Number

PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2016 (Unaudited) and December 31, 2015	1

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2016 and 2015 (Unaudited)	2

	Condensed Consolidated Statement of Changes in Stockholders’ Deficit for the Six Months Ended June 30, 2016 (Unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015 (Unaudited)	4

	Notes to Condensed Consolidated Financial Statements (Unaudited)	5

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	28

ITEM 4.	Controls and Procedures	28

PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings	29

ITEM 1A.	Risk Factors	29

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

ITEM 3.	Defaults Upon Senior Securities	29

ITEM 4.	Mine Safety Disclosures	29

ITEM 5.	Other Information	29

ITEM 6.	Exhibits	30

Unless the context otherwise indicates, references to “Snap,” “we,” “our,” “us” and the “Company” refer to Snap Interactive, Inc. and its subsidiary on a consolidated basis.

FirstMet, Snap, the Snap logo and other trademarks or service marks appearing in this report are the property of Snap Interactive, Inc. Trade names, trademarks and service marks of other companies appearing in this report are the property of their respective owners.

Unless otherwise indicated, metrics for users are based on information that is reported by Facebook and internally-derived metrics for users across all platforms through which our applications are accessed. References in this report to users means those persons who have created a user name and password, and active subscribers means users that have prepaid a subscription fee for current unrestricted communication on the FirstMet application and whose subscription period has not yet expired. The metrics for active subscribers are based on internally-derived metrics across all platforms through which FirstMet is accessed.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q 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 continue as a going concern;
●	our ability to consummate our proposed merger with A.V.M. Software, Inc. (d/b/a Paltalk);
●	our ability to maintain compliance with the covenants in the agreements governing our indebtedness, including maintaining minimum cash balances;
●	our ability to generate and sustain increased revenue levels and achieve profitability in the future;
●	our ability to meet our current and future debt service obligations;
●	our ability to maintain good relationships with Apple Inc., Facebook, Inc. and Google Inc., our heavy reliance on their platforms 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 obtain additional capital or financing to execute our business plan and limitations in the agreements governing our indebtedness related to the incurrence of additional indebtedness;
●	our reliance on our executive officers;
●	the intense competition in the online dating industry;
●	our ability to release new applications or improve upon existing applications and derive revenue therefrom;
●	our ability to offset fees associated with the distribution platforms that host our applications;
●	our reliance on a small percentage of our total users for substantially all of our revenue;
●	our ability to develop, establish and maintain strong brands;
●	our ability to update our applications to respond to the trends and preferences of online dating consumers;
●	our ability to adapt or modify our applications for the international market and derive revenue therefrom;
●	our ability to develop and market new technologies to respond to rapid technological changes;
●	our ability to effectively manage our headcount, including attracting and retaining qualified employees;
●	our ability to generate subscribers through advertising and marketing agreements with third party advertising and marketing providers;
●	our reliance on third party email service providers for delivery of email campaigns to convert users to subscribers and to retain subscribers;
●	our ability to manage our affiliate marketers’ compliance with internal brand standards or state and federal marketing laws and regulations;
●	our reliance in internal systems to maintain and control marketing expenditures and corresponding return on investments;
●	the effects of interruptions, maintenance or failures of our data center, programming code, servers or technological infrastructure;
●	the effect of security breaches, computer viruses and computer hacking attacks;
●	our ability to comply with laws and regulations regarding privacy and protection of user data;
●	our reliance upon credit card processors and related merchant account approvals;
●	governmental regulation or taxation of the online dating or the Internet industries;
●	the impact of any claim that we have infringed on intellectual property rights of others;
●	our ability to protect our intellectual property rights;
●	the risk that we might be deemed a “dating service” or an “Internet dating service” under various state regulations;
●	the possibility that our users or third parties may be physically or emotionally harmed following interaction with other users; and
●	our ability to manage or mitigate adverse changes in foreign currency exchange rates relating to international bookings.

For a more detailed discussion of these and other factors that may affect our business, see the discussion in “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.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SNAP INTERACTIVE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2016			December 31, 2015
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,561,917		$	2,131,262
Credit card holdback receivable		162,819			165,853
Accounts receivable, net of allowances and reserves of $64,853 and $55,468, respectively		188,475			206,547
Prepaid expense and other current assets		63,341			108,871
Total current assets		1,976,552			2,612,533
Fixed assets and intangible assets, net		328,035			387,617
Notes receivable		82,452			81,123
Long term security deposits		279,410			279,410
Investments		200,000			200,000
Total assets	$	2,866,449		$	3,560,683

Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable	$	1,287,037		$	1,065,662
Accrued expenses and other current liabilities		169,282			367,018
Deferred subscription revenue		1,408,426			1,505,862
Senior Note payable, net of discount		2,240,144			-
Total current liabilities		5,104,889			2,938,542
Deferred rent, net of current portion		111,193			99,595
Senior Note payable, net of discount		-			1,636,585
Derivative liabilities		1,330,000			473,425
Capital lease obligations, net of current portion		34,495			75,560
Total liabilities		6,580,577			5,223,707
Commitments and Contingencies
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding		-			-
Common stock, $0.001 par value, 500,000,000 shares authorized, 50,017,826 and 50,017,826 shares issued, respectively, and 39,692,826 and 39,692,826 shares outstanding, respectively		39,693			39,693
Additional paid-in capital		13,265,441			12,974,409
Accumulated deficit		(17,019,262	)		(14,677,126	)
Total stockholders' deficit		(3,714,128	)		(1,663,024	)
Total liabilities and stockholders' deficit	$	2,866,449		$	3,560,683

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

SNAP INTERACTIVE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenues:
Subscription revenue		2,459,633		$	3,075,868		$	4,966,781		$	6,205,178
Advertising revenue		154,329			112,671			324,448			169,444
Total revenues		2,613,962			3,188,539			5,291,229			6,374,622
Costs and expenses:
Cost of revenue		405,965			430,913			841,623			881,259
Sales and marketing expense		1,210,103			1,399,117			2,502,268			3,180,623
Product development expense		440,451			541,026			885,999			1,170,801
General and administrative expense		861,270			1,055,858			1,693,923			2,363,089
Total costs and expenses		2,917,789			3,426,914			5,923,813			7,595,772
Loss from operations		(303,827	)		(238,375	)		(632,584	)		(1,221,150	)
Interest expense, net		(427,306	)		(430,611	)		(852,977	)		(667,015	)
Change in fair value of derivative liabilities		(110,000	)		410,000			(856,575	)		410,000
Loss before provision for income taxes		(841,133	)		(258,986	)		(2,342,136	)		(1,478,165	)
Provision for income taxes		-			-			-			-
Net loss		(841,133	)	$	(258,986	)	$	(2,342,136	)	$	(1,478,165	)

Net loss per share of common stock:
Basic and diluted	$	(0.02	)	$	(0.01	)	$	(0.06	)	$	(0.04	)
Weighted average number of shares of common stock used in calculating net loss per share of common stock:
Basic and diluted		39,692,826			39,682,826			39,692,826			39,550,411

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

SNAP INTERACTIVE, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

	Common Stock				Additional Paid-		Accumulated			Stockholders’
	Shares		Amount		in Capital		Deficit			Deficit
Balance at January 1, 2016		39,692,826	$	39,693	$	12,974,409	$	(14,677,126	)	$	(1,663,024	)
Stock-based compensation expense for restricted stock awards		-		-		209,774		-			209,774
Stock-based compensation expense for stock options		-		-		81,258		-			81,258
Net loss		-		-		-		(2,342,136	)		(2,342,136	)
Balance at June 30, 2016		39,692,826	$	39,693	$	13,265,441	$	(17,019,262	)	$	(3,714,128	)

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

SNAP INTERACTIVE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(2,342,136	)	$	(1,478,165	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		71,784			96,007
Stock-based compensation expense		291,032			506,455
Loss on disposal of fixed assets		-			79,628
Amortization of debt issuance cost		77,917			60,198
Amortization of debt discount		525,644			397,863
Change in fair value of derivative liabilities		856,575			(410,000	)
Changes in operating assets and liabilities:
Credit card holdback receivable		3,034			419,599
Accounts receivable		18,072			(43,213	)
Security deposits		-			(85,555	)
Prepaid expenses and other current assets		45,530			(22,210	)
Accounts payable, accrued expenses and other current liabilities		17,951			(873,646	)
Deferred rent		11,598			49,027
Deferred subscription revenue		(97,436	)		(129,203	)
Deferred advertising revenue		-			(13,427	)
Net cash used in operating activities		(520,435	)		(1,446,642	)
Cash flows from investing activities:
Purchase of property and equipment		(12,204	)		(37,007	)
Proceeds from sale of fixed assets		-			6,000
Issuance to employees of note receivable and accrued interest		(1,329	)		(1,280	)
Notes receivable		-			-
Net cash used in investing activities		(13,533	)		(32,287	)
Cash flows from financing activities:
Payments of capital lease obligations		(35,377	)		(30,479	)
(Repayment of) proceeds from promissory notes		-			(400,000	)
Payment of financing costs		-			(314,249	)
Proceeds from issuance of promissory notes		-			3,000,000
Net cash (used in) provided by financing activities		(35,377	)		2,255,272
Net (decrease) increase in cash and cash equivalents		(569,345	)		776,343
Balance of cash and cash equivalents at beginning of period		2,131,262			1,138,385
Balance of cash and cash equivalents at end of period		1,561,917		$	1,914,728
Supplemental disclosure of cash flow information:
Cash paid in interest and taxes	$	180,000		$	90,000

Non-cash investing and financing activities:
Compound embedded derivative under the Senior Note and Securities Purchase Agreement recorded as derivative liabilities (See Note 5)	$	-		$	1,748,000
Warrants issued under the Advisory Services Agreement as additional consideration for the Senior Note and recorded as derivative liabilities (See Note 5)	$	-		$	342,000
Common stock issued under the Advisory Services Agreement as additional consideration for the Senior Note	$	-		$	30,000

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

SNAP INTERACTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include Snap Interactive, Inc. and its wholly owned subsidiary, Snap Mobile Limited (collectively, the “Company”). The Company operates a portfolio of two dating applications, FirstMet, which is available through desktop and mobile platforms, and The Grade, which is available through iOS and Android platforms. The condensed consolidated financial statements included in this report have been prepared on a going concern basis in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. The Company has not included certain information normally included in annual financial statements pursuant to those rules and regulations, although it believes that the disclosure included herein is adequate to make the information presented not misleading.

The financial statements contained herein should be read in conjunction with the Company’s audited consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “Form 10-K”), filed with the SEC on March 14, 2016.

In the opinion of management, the accompanying unaudited condensed consolidated financial information contains all normal and recurring adjustments necessary to fairly present the condensed consolidated balance sheet, results of operations, cash flows and changes in the stockholders’ deficit of the Company for the interim periods presented. The Company’s historical results are not necessarily indicative of future operating results and the results for the three and six months ended June 30, 2016 are not necessarily indicative of results for the year ending December 31, 2016, or for any other period.

2. Going Concern and Management’s Plans

The Company reported a loss of $2.3 million for the six months ended June 30, 2016. On June 30, 2016, the Company’s accumulated deficit amounted to $17.0 million. The Company’s convertible note payable with a principal amount outstanding of $3.0 million matures on February 13, 2017 (the “Senior Note”). These matters raise substantial doubt about the Company’s ability to continue as a going concern.

The Company needs to raise additional capital through public or private financings or strategic business combinations in order to sustain its operations while continuing the longer term efforts contemplated under its business plan (see Note 17—Non-Binding Letter of Intent). The Company cannot provide any assurance that it will raise additional capital. If the Company is unable to secure additional capital, it may be required to take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. The accompanying financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.

3. Summary of Significant Accounting Policies

During the three and six months ended June 30, 2016, there were no material changes to the Company’s significant accounting policies from those disclosed in the Form 10-K. Certain significant accountant policies relied on in the preparation of the accompanying unaudited condensed consolidated financial statements are as follows:

Significant Estimates and Judgments

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these financial statements include the provision for future credit card chargebacks and subscription revenue refunds, estimates used to determine the fair value of the Company’s common stock, stock options, non-cash capital stock issuances, stock-based compensation, derivative instruments, debt discounts, conversion features and common stock warrants, collectability of accounts receivable and the valuation allowance on deferred tax assets. Management evaluates these estimates on an ongoing basis. Changes in estimates are recorded in the period in which they become known. The Company bases estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from the Company’s estimates.

Reclassification

Certain prior period amounts have been reclassified for comparative purposes to conform to the fiscal 2016 presentation. These reclassifications have no impact on the previously reported net loss.

SNAP INTERACTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-02, Leases (“ASU 2016-02”), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting ASU 2016-02 on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718)” (“ASU 2016-09”). ASU 2016-09 requires an entity to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, either early adoption permitted. The Company is currently evaluating ASU 2016-09 and its impact on its consolidated financial statements or disclosures.

4. Accounts Receivable, Net

Accounts receivable, net consisted of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016			December 31, 2015
	(Unaudited)
Accounts receivable		253,328		$	262,015
Less: Reserve for future chargebacks		(64,853	)		(55,468	)
Total accounts receivable, net		188,475		$	206,547

Credit card payments for subscriptions and micro-transactions typically settle several days after the date of purchase. The amount of unsettled transactions due from credit card payment processors was $74,134 as of June 30, 2016, as compared to $147,582 at December 31, 2015. The amount of accounts receivable due from Apple Inc. was $86,795, or 46.1% of the Company’s accounts receivable, as of June 30, 2016, compared to $76,074, or 36.8% of the Company’s accounts receivable, at December 31, 2015.

5. Security Deposits

In October 2014, the Company issued a $135,000 security deposit which replaced the previous letter of credit as part of the new capital lease obligations for equipment with Hewlett Packard Financial Services Company (“HP”). In November 2015, HP returned $60,000 of the security deposit. The Company recorded $75,000 under long-term security deposits on its Condensed Consolidated Balance Sheet as of June 30, 2016 and December 31, 2015, respectively.

In February 2015, the Company issued $200,659 as a security deposit as part of a new office rent lease (see Note 15). The Company recorded the $200,659 under long-term security deposits on its Condensed Consolidated Balance Sheet as of June 30, 2016 and December 31, 2015.

In November 2015, the Company issued $3,751 as a security deposit as part of the Company’s new data center. The Company recorded the $3,751 under long- term security deposits on its Condensed Consolidated Balance Sheet as of June 30, 2016 and December 31, 2015.

6. Fair Value Measurements

The fair value framework under the Financial Accounting Standards Board’s guidance requires the categorization of assets and liabilities into three levels based upon the assumptions used to measure the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, would generally require significant management judgment. The three levels for categorizing assets and liabilities under the fair value measurement requirements are as follows:

	●	Level 1: Fair value measurement of the asset or liability using observable inputs such as quoted prices in active markets for identical assets or liabilities;
	●	Level 2: Fair value measurement of the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
	●	Level 3: Fair value measurement of the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability.

SNAP INTERACTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table summarizes the liabilities measured at fair value on a recurring basis as of June 30, 2016:

	Level 1		Level 2		Level 3		Total
LIABILITIES:
Warrant liabilities	$	-	$	-	$	870,000	$	870,000
Compound embedded derivative		-		-		460,000		460,000
Total derivative liabilities	$	-	$	-	$	1,330,000	$	1,330,000

The following table summarizes the liabilities measured at fair value on a recurring basis as of December 31, 2015:

	Level 1		Level 2		Level 3		Total
LIABILITIES:
Warrant liabilities	$	-	$	-	$	273,425	$	273,425
Compound embedded derivative		-		-		200,000		200,000
Total derivative liabilities	$	-	$	-	$	473,425	$	473,425

Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting and finance department, who report to the Chief Financial Officer, determine its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department and are approved by the Chief Financial Officer.

Level 3 Valuation Techniques:

Level 3 financial liabilities consist of the derivative liabilities for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.

The Company deems financial instruments which do not have fixed settlement provisions to be derivative instruments. The common stock purchase warrants issued in connection with the Senior Note and the Senior Note’s embedded conversion feature do not have fixed settlement provisions because their exercise prices may be lowered if the Company issues securities at a lower price in the future. In accordance with Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity , the fair value of these warrants is classified as a liability on the Company’s Condensed Consolidated Balance Sheets because, according to the terms of the warrants, a fundamental transaction could give rise to an obligation of the Company to pay cash to its warrant holders. In addition, the Company entered into an Advisory Services Agreement (the “Advisory Agreement”), dated as of February 13, 2015, by and between the Company and Sigma Capital Advisors, LLC (“Sigma”) that contains certain provisions whereby the Company will be required to make certain make-whole cash payments to the holder of the Senior Note upon the occurrence of certain future events, as more fully described in Note 11. Such instruments do not have fixed settlement provisions and have also been recorded as derivative liabilities. Corresponding changes in the fair value of the derivative liabilities are recognized in earnings on the Company’s Condensed Consolidated Statement of Operations in each subsequent period.

The Company’s derivative liabilities are carried at fair value and were classified as Level 3 in the fair value hierarchy due to the use of significant unobservable inputs. In order to calculate fair value, the Company uses a custom model developed with the assistance of an independent third-party valuation expert. This model calculates the fair value of the warrant derivative liabilities at each measurement date using a Monte-Carlo style simulation, as the value of certain features of the warrant derivative liabilities would not be captured by the standard Black-Scholes model.

The following table summarizes the values of certain assumptions used by the Company’s custom model to estimate the fair value of the warrant liabilities as of June 30, 2016 and December 31, 2015:

	June 30, 2016			December 31, 2015
	(Unaudited)
Stock price	$	0.14		$	0.08
Weighted average strike price	$	0.35		$	0.64
Remaining contractual term (years)		3.62			4.12
Volatility		110.0	%		95.0	%
Risk-free rate		0.86	%		1.54	%
Dividend yield		0.0	%		0.0	%

As described in Note 18, the Company recently entered into an Exchange Agreement, dated July 13, 2016 (the “Exchange Agreement”), with the holders of the warrants issued in connection with the Senior Note, pursuant to which the warrants were exchanged for an aggregate of 2,000,000 shares of the Company’s common stock. As a result, such warrants were automatically terminated and cancelled in full.

SNAP INTERACTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table summarizes the values of certain assumptions used by the Company’s custom model to estimate the fair value of the conversion feature liability as of June 30, 2016 and December 31, 2015:

	June 30, 2016			December 31 2015
	(Unaudited)
Stock price	$	0.14		$	0.08
Strike price	$	0.20		$	0.20
Remaining contractual term (years)		0.62			1.12
Volatility		110.0	%		95.0	%
Risk-free rate		0.36	%		0.65	%
Dividend yield		0.0	%		0.0	%

The following table sets forth a summary of the changes in the fair value of our Level 3 financial liabilities that are measured at fair value on a recurring basis:

	Three Months Ended June 30,					Six Months Ended June 30,
	2016		2015			2016		2015
Beginning balance	$	1,220,000	$	2,113,426		$	473,425	$	23,425
Fair value of derivatives issued		-		-			-		2,090,000
Change in fair value of derivative liabilities		110,000		(410,000	)		856,575		(410,000	)
Ending balance	$	1,330,000	$	1,703,426		$	1,330,000	$	1,703,425

7. Fixed Assets and Intangible Assets, Net

Fixed assets and intangible assets, net consisted of the following at June 30, 2016 and December 31, 2015:

	June 30, 2016			December 31, 2015
	(Unaudited)
Computer equipment	$	268,427		$	260,355
Furniture and fixtures		98,160			98,160
Leasehold improvements		21,026			21,026
Software		10,968			10,968
Website domain names		143,155			139,025
Website costs		40,500			40,500
Equipment under capital leases		218,605			218,605
Total fixed assets		800,841			788,639
Less: Accumulated depreciation and amortization		(472,806	)		(401,022	)
Total fixed assets and intangible assets, net	$	328,035		$	387,617

SNAP INTERACTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Depreciation and amortization expense for the three and six months ended June 30, 2016 was $35,269 and $71,784, respectively, as compared to $35,188 and $96,007, respectively for the three and six months ended June 30, 2015. The Company only holds fixed assets in the United States.

8. Notes Receivable

At June 30, 2016, the Company had notes receivable due in the aggregate amount of $82,452 from two former employees. The employees issued the notes to the Company since the Company paid taxes for stock-based compensation on these employees’ behalf in 2011 and 2012. The outstanding amounts under the notes are secured by pledged stock certificates and are due at various times during 2021-2023. Interest accrues on these notes at rates ranging from 2.80% to 3.57% per annum.

9. Income Taxes

The Company had no income tax benefit or provision for the six months ended June 30, 2016 and 2015. Since the Company incurred a net loss for the six months ended June 30, 2016 and 2015, there was no income tax expense for either period. Increases in deferred tax balances have been offset by a valuation allowance and have no impact on the Company’s deferred income tax provision.

In calculating the provision for income taxes on an interim basis, the Company estimates the annual effective income tax rate based upon the facts and circumstances known for the period and applies that rate to the earnings or losses for the most recent interim period. The Company’s effective income tax rate is based on expected income and statutory tax rates and takes into consideration permanent differences between financial statement income and tax return income applicable to the Company in the various jurisdictions in which the Company operates. The effect of a discrete item, such as changes in estimates, changes in enacted tax laws or rates or tax status, and unusual or infrequently occurring events, is recognized in the interim period in which the discrete item occurs. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or changes in tax laws or regulations.

10. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following at June 30, 2016 and December 31, 2015:

	June 30, 2016		December 31, 2015
	(Unaudited)
Compensation and benefits	$	90,100	$	176,410
Professional fees		-		102,200
Capital lease obligations		79,182		73,494
Other accrued expenses		-		14,914
Total accrued expenses and other current liabilities	$	169,282	$	367,018

SNAP INTERACTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

11. Convertible Note Payable

Securities Purchase Agreement

On February 13, 2015, the Company closed a private placement of debt and equity securities for aggregate gross proceeds of $3,000,000 pursuant to a securities purchase agreement (the “Securities Purchase Agreement”). In connection with the Securities Purchase Agreement, the Company issued Sigma Opportunity Fund II, LLC (“Sigma II”) (i) 350,000 shares of the Company’s common stock, (ii) the Senior Note in the aggregate principal amount of $3,000,000 and (iii) a warrant to purchase up to 10,500,000 shares of the Company’s common stock. The Company incurred financing costs of $314,249 in connection with the Securities Purchase Agreement that will be amortized over the term of the Senior Note. Amortization expense for the three and six months ended June 30, 2016 was $39,174 and $77,917, respectively; and $39,174 and $60,198 for the three and six months ended June 30, 2015, respectively. The amortization expense was included as interest expense on the accompanying Condensed Consolidated Statement of Operations.

The Senior Note bears interest at a rate of 12% per annum and matures on the earlier of February 13, 2017 or a change in control. During any time while the Senior Note is outstanding, the outstanding principal balance of the Senior Note, together with all accrued and unpaid interest, is convertible into shares of the Company’s common stock at the option of Sigma II at a conversion price of $0.20 per share, subject to certain adjustments, including reset adjustments to the conversion price if the Company issues securities at lower prices in the future, as disclosed in Note 6. The Company’s obligations under the Senior Note are secured by a first priority lien on all of its assets and property. The Senior Note is also secured by up to 65% of the outstanding capital stock and other equity interests of Snap Mobile Limited, the Company’s wholly owned subsidiary. Snap Mobile Limited is also a guarantor of the Senior Note. An event of default under the Senior Note includes, among other things, (i) the Company’s failure to pay any amounts due and payable when and as required, (ii) failure of a representation or warranty made by the Company to be correct and accurate when made, (iii) the institution of bankruptcy or similar proceedings against the Company and (iv) the Company’s inability to pay debts as they become due. The Senior Note also requires the Company to maintain an aggregate cash balance of $1,350,000 in its bank accounts or it will be required to make partial prepayments on the Senior Note. If the Company fails to maintain this aggregate cash balance in its bank accounts for a thirty day period, it is required to make a $125,000 prepayment on the Senior Note. For each subsequent calendar month that the aggregate cash balance in the Company’s bank accounts does not equal or exceed $1,500,000, the Company must make an additional $125,000 prepayment on the Senior Note.

The Senior Note contains a compound embedded derivative consisting of an embedded conversion feature and interest make-whole provisions and was accounted for as a derivative liability with an aggregate fair value of $950,000. In addition, the fair value of the warrants was $798,000 and was also required to be accounted for as a derivative liability. Both instruments were also recorded as debt discounts on the date the Senior Note was issued. The Company is amortizing the debt discount using the effective interest method over the life of the Senior Note, which is two years. Contractual interest expense under the Senior Note incurred for the three and six months ended June 30, 2016 was $90,000 and $180,000 respectively. Contractual interest expense under the Senior Note incurred for the three and six months ended June 30, 2015 was $90,000 and $136,000, respectively.

Simultaneously with the closing of the private placement, the Company entered into the Advisory Agreement with Sigma pursuant to which Sigma agreed to provide the Company with certain advisory and consulting services. In connection with the Advisory Agreement, the Company issued Sigma 150,000 shares of the Company’s common stock and a warrant to purchase up to 4,500,000 shares of the Company’s common stock. Both the common shares and the warrant issued were fully vested and non-forfeitable on the date the Advisory Agreement was entered into. Based on the terms of the Advisory Agreement and the criteria outlined in ASC 505-50, Equity-Based Payments to Non-Employees , the Company determined that the common stock and warrants issued were additional consideration provided to Sigma in connection with the issuance of the Senior Note. As a result, the Company recorded the grant date fair value of the common stock and warrants of $30,000 and $342,000, respectively, as debt discounts on the accompanying Condensed Consolidated Balance Sheet.

In addition to the issuance of common stock and warrants under the Advisory Agreement, the Company also agreed to pay Sigma a monthly advisory fee of $10,000, up to an aggregate limit of $240,000, subject to certain exceptions, over the life of the Senior Note (the “Cash Payment”). If the Company were to prepay the Senior Note or the repayment of the Senior Note was accelerated for certain reasons, the Company would still be required to remit either a portion or the full amount of the Cash Payment. The Company also agreed to pay Sigma a cash payment of $150,000 if the Company effectuates a dilutive issuance (as defined in the Senior Note) while the Senior Note is outstanding (the “Dilutive Cash Payment”). The Company determined that based on the make-whole features associated with the Cash Payment and the contingent make-whole features associated with the Dilutive Cash Payment, that these payments are required to be treated as derivative instruments in accordance with ASC 815. The fair value of these instruments was included in the value of the compound embedded derivative discussed above.

Amortization expense related to the debt discount for the three and six months ended June 30, 2016 was $264,274 and $525,644, respectively; and $264,274 and $397,863 for the three and six months ended June 30, 2015, respectively. Amortization expense related to the debt discount was included as interest expense on the accompanying Condensed Consolidated Statements of Operations.

As described in Note 18, the Company recently entered into the Exchange Agreement with Sigma II and Sigma, pursuant to which the warrants held by Sigma II and Sigma were exchanged for an aggregate of 2,000,000 shares of the Company’s common stock. As a result, such warrants were automatically terminated and cancelled in full.

SNAP INTERACTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

12. Stock-Based Compensation

The Snap Interactive, 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 6,356,128 shares of the Company’s common stock may be delivered pursuant to outstanding options awarded under the 2011 Plan, however no additional awards may be granted under such plan. The Snap Interactive, 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 15,000,000 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 June 30, 2016, there were 14,900,000 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 six months ended June 30, 2016 and 2015:

	June 30, 2016			June 30, 2015
Expected volatility		162.9	%		182.8	%
Expected life of option		6.12			6.17
Risk free interest rate		1.48	%		1.76	%
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 following table summarizes stock option activity for the six months ended June 30, 2016:

	Number of Options			Weighted Average Exercise Price
Stock Options:
Outstanding at January 1, 2016		6,177,203		$	0.33
Granted		437,000			0.15
Expired or canceled, during the period		-			-
Forfeited, during the period		(133,075	)		0.17
Outstanding at June 30, 2016		6,481,128			0.32
Exercisable at June 30, 2016		2,794,321		$	0.60

At June 30, 2016, the aggregate intrinsic value of stock options that were outstanding and exercisable was $201,098 and $24,984, respectively. At June 30, 2015, the aggregate intrinsic value of stock options that were outstanding and exercisable was $0 and $0, respectively. 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. The aggregate fair value for the options granted during the six months ended June 30, 2016 and 2015 was $61,405 and $89,158, respectively.

SNAP INTERACTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Stock-based compensation expense relating to stock options was $39,309 and $81,258 during the three and six months ended June 30, 2016, as compared to $46,313 and $70,406, for the three and six months ended June 30, 2015, respectively. The Company estimates potential forfeitures of stock awards and adjusts recorded stock-based compensation expense accordingly. The estimate of forfeitures is adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock-based compensation expense that is recognized in future periods.

At June 30, 2016, there was $381,564 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of 2.95 years.

Restricted Stock Awards

The following table summarizes restricted stock award activity for the six months ended June 30, 2016:

	Number of RSAs			Weighted Average Grant Date Fair Value
Restricted Stock Awards:
Outstanding at January 1, 2016		10,325,000		$	0.56
Granted		5,000,000			0.11
Expired or canceled, during the period		(5,000,000	)		0.52
Forfeited, during the period		-			-
Outstanding at June 30, 2016		10,325,000		$	0.37

On March 3, 2016, the Company entered into a restricted stock cancellation and release agreement with Clifford Lerner, the Company’s Chairman of the Board of Directors, pursuant to which the Company cancelled a grant of 5,000,000 restricted shares of common stock awarded to Mr. Lerner on April 10, 2013 that would have vested 50% on the third anniversary of the date of grant and 50% on the fourth anniversary of the date of grant. Subsequently, on March 3, 2016, the Board of Directors awarded Mr. Lerner a replacement award of 5,000,000 restricted shares that vest 100% on the (10th) tenth anniversary of the date of grant, provided Mr. Lerner is providing services to the Company on such date.

At June 30, 2016, there was $2,420,880 of total unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted average period of 7.53 years.

Stock-based compensation expense relating to restricted stock awards for the three and six months ended June 30, 2016 was $97,949 and $209,774, respectively, as compared to $230,279 and $436,049 for the three and six months ended June 30, 2015, respectively.

13. Common Stock Warrants

On February 13, 2015, the Company issued a warrant to each of Sigma II and Sigma to purchase up to 10,500,000 shares and 4,500,000 shares, respectively, of the Company’s common stock in connection with the issuance of the Senior Note and the execution of the Advisory Agreement as previously disclosed in Note 11. The warrants were immediately exercisable on February 13, 2015 and expire on the earlier of (a) February 13, 2020 or (b) a change in control. The warrants have an exercise price of $0.35 per share, subject to certain adjustments, including reset adjustments to the exercise price if the Company issues securities at lower prices in the future, as disclosed in Note 6.

The Company has recorded a derivative liability on its Condensed Consolidated Balance Sheet at the end of each reporting period based on the estimated fair value of the warrants. The warrants are valued at the end of each reporting period with changes recorded as mark-to-market adjustment on derivative liability on the Company’s Condensed Consolidated Statement of Operations. The fair value of these warrants was $870,000 at June 30, 2016, based on a model developed with the assistance of an independent third-party valuation expert.

14. Net Loss Per Share of Common Stock

Basic net loss per share of common stock is computed based upon the number of weighted average shares of common stock outstanding as defined by ASC Topic 260, Earnings Per Share. Diluted net loss per share of common stock includes the dilutive effects of stock options, warrants and stock equivalents. To the extent stock options, stock equivalents, shares underlying the Senior Note and warrants are antidilutive, they are excluded from the calculation of diluted net loss per share of common stock. For the three and six months ended June 30, 2016, 49,173,628 shares issuable upon the conversion of the Senior Note, the exercise of stock options and warrants, and unvested restricted stock awards were not included in the computation of diluted net loss per share because their inclusion would be antidilutive. For the three and six months ended June 30, 2015, 46,722,228 shares issuable upon the conversion of the Senior Note, the exercise of stock options and warrants, and unvested restricted stock awards were not included in the computation of diluted net loss per share.

SNAP INTERACTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

15. Commitments

Operating Lease Agreements

During 2013, the Company entered into a two-year service agreement with Equinix Operating Co., Inc. (“Equinix”) whereby Equinix agreed to provide certain products and services to the Company from January 2013 to January 2015. Pursuant to the service agreement, the Company agreed to pay monthly recurring fees in the amount of $8,450 and certain nonrecurring fees in the amount of $9,700. The agreement automatically renews for additional twelve month terms unless earlier terminated by either party. Hosting expense under this lease totaled $15,531 and $93,248 for the six months ended June 30, 2016 and 2015, respectively. On January 31, 2016, we cancelled the service agreement with Equinix.

On February 4, 2015, the Company entered into a lease for office space located at 320 West 37th Street, 13th Floor, New York, NY 10018 and paid a security deposit in the amount of $200,659. The term of the lease runs until March 4, 2022. The Company’s monthly office rent payments under the lease are currently approximately $26,000 per month and escalate on an annual basis for each year of the term of the lease. Rent expense under this lease was $82,551 and $165,103 for the three and six months ended June 30, 2016 and 2015, respectively.

Capital Lease Agreements

In October 2014, two HP lease agreements were canceled due to price negotiations and we entered into two new three-year lease agreements with HP for equipment and certain financed items. In December 2014, we cancelled our remaining operating lease agreements and entered into two additional three-year capital lease agreements with notes. The Company recognized these leases on its Condensed Consolidated Balance Sheets under capitalized lease obligations. Amortization for equipment under capital leases was $18,217 and $36,434 for the three and six months ended June 30, 2016 and 2015, respectively. Rent payments for equipment under capital leases were $22,734 and $45,468 for the three and six months ended June 30, 2016 and 2015, respectively.

16. Related Party Transactions

On January 31, 2013, the Company entered into a consulting agreement with Darrell Lerner, pursuant to which Mr. Lerner agreed to serve as a consultant to the Company for an initial term of three years, beginning on February 1, 2013 (the “Effective Date”). Pursuant to the agreement, Mr. Lerner agreed to assist and advise the Company on legal, financial and other matters for which he has knowledge that pertains to the Company, as the Company reasonably requests. As compensation for his services, the Company agreed to pay Mr. Lerner a monthly fee of $25,000 for the initial two year period of the agreement and a monthly fee of $5,000 for every month thereafter. On January 31, 2016, the Company amended the consulting agreement with Darrell Lerner, pursuant to which the monthly fee owed to Mr. Lerner was reduced to $3,000 and the term of the agreement was set to automatically renew for successive one-year periods beginning on February 1, 2016 unless either party provides written notice of nonrenewal. Consulting expense under this agreement for the three and six months ended June 30, 2016 was $9,000 and $20,000, respectively, as compared to $15,000 and $50,000, respectively, for the three and six months ended June 30, 2015, respectively.

The Company or Mr. Lerner may terminate the agreement at any time without notice prior to or at the expiration of the term. If the Company terminates the agreement without “cause” (as defined in the agreement), the Company has agreed to (i) pay Mr. Lerner the amount of the unpaid monthly fees owed to Mr. Lerner for the period from the Effective Date to the two year anniversary of the Effective Date and (ii) take all commercially reasonably actions to cause (A) 325,000 shares of restricted common stock of the Company previously granted to Mr. Lerner, (B) 600,000 shares of restricted common stock of the Company previously granted to Mr. Lerner and (iii) 150,000 shares of restricted common stock of the Company granted to Mr. Lerner pursuant to the agreement, to be vested as of the date of such termination. Stock-based compensation expense relating to non-employee restricted stock awards for the three and six months ended June 30, 2016 was $8,433 and $30,742, respectively, as compared to $(352) and $(22,678), respectively, for the three and six months ended June 30, 2015.

17. Non-Binding Letter of Intent

On June 17, 2016, the Company entered into a non-binding letter of intent (the “Letter of Intent”) with A.V.M. Software, Inc. (d/b/a Paltalk) (“Paltalk”), which describes the general terms and conditions of a proposed merger between Paltalk and the Company. Pursuant to the letter of intent, Paltalk would merge into a newly formed wholly owned subsidiary of the Company, with Paltalk surviving as the Company’s wholly owned subsidiary. As consideration for the merger, the Company would issue Paltalk’s stockholders a number of shares of the Company’s common stock such that, following the completion of the transaction, Paltalk’s stockholders would own a majority of the Company’s outstanding common stock on a fully-diluted basis.

SNAP INTERACTIVE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The consummation of the proposed merger is subject to, among other things, due diligence, the execution of a definitive agreement, necessary Board of Directors and stockholder approvals and other customary conditions. There can be no assurance that the Company and Paltalk will consummate, or fulfill the necessary conditions to consummate, the proposed merger.

If the proposed merger is consummated, the issuance of the shares of the Company’s common stock would be made in accordance with an exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof and Regulation D thereunder. Such shares of common stock would not be registered under the Securities Act and could not be offered or sold without registration unless an exemption from such registration is available.

The information related to the Letter of Intent disclosed in this Quarterly Report on Form 10-Q is being issued pursuant to and limited by Rule 135c promulgated under the Securities Act and does not constitute an offer to sell, or a solicitation of an offer to buy, any shares of the Company’s common stock.

18. Subsequent Events

Term Note and Security Agreement

In connection with the entry into the Letter of Intent, on July 18, 2016, the Company entered into a subordinated multiple advance term note (the “Term Note”) with Paltalk, pursuant to which Paltalk agreed to advance to the Company, upon the Company’s request and subject to the terms and conditions set forth in the Term Note, up to $250,000. The Term Note matures on July 18, 2017, subject to certain exceptions, and advances under the Term Note shall bear interest at a rate of 8.0% per annum. The Company may prepay amounts due under the Term Note without penalty, but the Company may not reborrow any principal amount that has been repaid. As of August 8, 2016, the Company had borrowed $200,000 available under the Term Note.

The Term Note also contains customary events of default, including, among other things, payment defaults, breaches of covenants, cross-defaults and bankruptcy and insolvency events, subject to grace periods in certain instances. Upon an event of default, Paltalk may declare all of the outstanding obligations of the Company under the Term Note to be immediately due and payable, and exercise any other rights provided for under the Term Note.

In connection with the entry into the Term Note, on July 18, 2016, the Company entered into a security agreement (the “Security Agreement”) with Paltalk, which such Security Agreement will not become effective until, among other things, the Company’s Senior Note with Sigma II is paid in full. Upon the effectiveness of the Security Agreement, the Company’s obligations under the Term Note will be secured by a first priority security interest in all of the assets and property of the Company, including 65% of the capital stock and other equity interests of SNAP Mobile Limited.

Exchange Agreement

On July 13, 2016, the Company entered into the Exchange Agreement with Sigma II and Sigma, pursuant to which (i) Sigma II exchanged its warrant to purchase up to 10,500,000 shares of the Company’s common stock at an exercise price of approximately $0.35 per share for 1,400,000 newly issued shares of the Company’s common stock and (ii) Sigma exchanged its warrant to purchase up to 4,500,000 shares of the Company’s common stock at an exercise price of approximately $0.35 per share for 600,000 newly issued shares of the Company’s common stock, in each case effective as of July 13, 2016. Pursuant to the Exchange Agreement, the warrants were automatically terminated and cancelled in full and rendered null and void as a result of the exchange offer.

Patent Litigation

On August 2, 2016, the Company became aware of a complaint filed against it in the United States District Court for the Eastern District of Texas, Marshall Division (Case No. 2:16-cv-00836). In the complaint, the plaintiff alleges, among other things, that the Company infringed upon one of the plaintiff’s patents.

The Company operates in a technology environment and is subject to claims of infringement of patents in the ordinary course of business. We dispute the allegations made by the plaintiff and intend to vigorously defend ourselves in this litigation. At this time, management does not believe this matter will have a material adverse effect on the Company’s results of operations or financial condition. However, no assurance can be given that this matter will be resolved in our favor.

ITEM 2. 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: (i) the accompanying unaudited condensed consolidated financial statements and notes thereto for the three and six months ended June 30, 2016, (ii) the consolidated financial statements and notes thereto for the year ended December 31, 2015 included in our Annual Report on Form 10-K (the “Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on March 14, 2016 and (iii) the discussion under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K. Aside from certain information as of December 31, 2015, all amounts herein are unaudited. Unless the context otherwise indicates, references to “Snap,” “we,” “our,” “us” and the “Company” refer to Snap Interactive, Inc. and its subsidiary on a consolidated basis.

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 the Form 10-K.

Overview

The Company operates a portfolio of two dating applications, FirstMet, which is available through desktop and mobile platforms, and The Grade, which is available through iOS and Android ^TM platforms. We also intend to expand our portfolio through the development of new applications, including a new application based on our existing product platform that targets users over 50 years of age. We expect that this new product will launch in the fourth quarter of 2016.

Our dating applications and the revenues generated therefrom are supported by a large user database of approximately 30 million users. Our management believes that the scale of our user database presents a competitive advantage in the dating industry and can present growth opportunities to build future dating application brands or to commercialize by presenting third party advertising.

FirstMet

We provide a leading online dating application under the FirstMet brand that is native on Facebook, iOS and Android platforms and is also accessible on mobile devices and desktops at FirstMet.com. Our FirstMet application is available to users and active subscribers. FirstMet is extremely scalable and requires limited incremental operational cost to add users, active subscribers or new features catering to additional discrete audiences. FirstMet was derived from a prior iteration of our application, “Are You Interested?” (“AYI”), which was rebranded as FirstMet in March 2016. We believe the rebranding has had positive effects in reactivating inactive users from our database, including the reengagement of approximately 647 thousand inactive users in the three months ended June 30, 2016, and we expect it to reduce user acquisition costs in the longer term. FirstMet was the #23 grossing application in the U.S. Lifestyle Category on Apple® App Store ^SM in the United States as of August 8, 2016.

Although the rebranding has had positive effects on reengaging inactive users, we believe that the number of active subscribers is strongly correlated to our spending on sales and marketing. For the six months ended June 30, 2016, our spending on sales and marketing was 21.3% lower than the six months ended June 30, 2015, which we believe resulted in a decrease in the number of active subscribers during 2016, as seen in the chart below:

As of June 30, 2016, FirstMet had approximately 78,700 active subscribers, which constituted a 6.4% decrease in active subscribers since December 31, 2015. New subscription transactions for FirstMet for the six months ended June 30, 2016 decreased 31.4% as compared to the same period in 2015.

The Grade

We also provide an online dating application under The Grade brand that is native on iOS and Android. The Grade is a mobile application that we launched in November 2014 to pursue our strategy of providing a portfolio of dating and social applications. The Grade is a mobile dating application that holds users accountable to a high standard of behavior by using a proprietary algorithm that assigns letter grades to users ranging from “A+” to “F” based on profile quality, messaging quality and reviews from other users of the application. Users with a grade of “D” receive a warning and instructions on how to improve their grade, while users who fail to improve an “F” grade are at risk of expulsion. By providing user grades and expelling low-quality users who receive an “F” grade, The Grade aims to create a community of high-quality users who are desirable, articulate and responsive.

The application is offered free to users and, apart from testing monetization approaches, there are no immediate plans to monetize The Grade.

We currently expect that we will continue to allocate the significant majority of our resources to FirstMet in an effort to increase our operating cash flow by focusing on our revenue-generating application. As we sustain this lower level of spending on sales and marketing for The Grade, we expect that we may experience a decrease in the number of The Grade’s users.

Recent Developments

Non-Binding Letter of Intent

On June 17, 2016, we entered into a non-binding letter of intent (the “Letter of Intent”) with A.V.M. Software, Inc. (d/b/a Paltalk) (“Paltalk”), which describes the general terms and conditions of a proposed merger between Paltalk and Snap. Pursuant to the letter of intent, Paltalk would merge into a newly formed wholly owned subsidiary of Snap, with Paltalk surviving as our wholly owned subsidiary. As consideration for the merger, we would issue Paltalk’s stockholders a number of shares of our common stock such that, following the completion of the transaction, Paltalk’s stockholders would own a majority of our outstanding common stock on a fully-diluted basis.

The consummation of the proposed merger is subject to, among other things, due diligence, the execution of a definitive agreement, necessary Board of Directors and stockholder approvals and other customary conditions. There can be no assurance that Snap and Paltalk will consummate, or fulfill the necessary conditions to consummate, the proposed merger.

If the proposed merger is consummated, the issuance of the shares of our common stock would be made in accordance with an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof and Regulation D thereunder. Such shares of common stock would not be registered under the Securities Act and could not be offered or sold without registration unless an exemption from such registration is available.

Term Note and Security Agreement

In connection with the entry into the Letter of Intent, on July 18, 2016, we entered into a subordinated multiple advance term note (the “Term Note”) with Paltalk, pursuant to which Paltalk agreed to advance to us, upon our request and subject to the terms and conditions set forth in the Term Note, up to $250,000. The Term Note matures on July 18, 2017, subject to certain exceptions, and advances under the Term Note shall bear interest at a rate of 8.0% per annum. We may prepay amounts due under the Term Note without penalty, but we may not reborrow any principal amount that has been repaid. As of August 8, 2016, we had borrowed $200,000 available under the Term Note.

The Term Note also contains customary events of default, including, among other things, payment defaults, breaches of covenants, cross-defaults and bankruptcy and insolvency events, subject to grace periods in certain instances. Upon an event of default, Paltalk may declare all of our outstanding obligations under the Term Note to be immediately due and payable, and exercise any other rights provided for under the Term Note.

In connection with the entry into the Term Note, on July 18, 2016, we entered into a security agreement with Paltalk (the “Security Agreement”), which such Security Agreement will not become effective until, among other things, our 12% Senior Secured Convertible Note due February 13, 2017 in the original aggregate principal amount of $3,000,000 (the “Senior Note”) issued to Sigma II is paid in full. Upon the effectiveness of the Security Agreement, our obligations under the Term Note will be secured by a first priority security interest in all of our assets and property, including 65% of the capital stock and other equity interests of SNAP Mobile Limited, our wholly owned subsidiary.

Exchange Agreement

On July 13, 2016, we entered into an Exchange Agreement, dated July 13, 2016 (the “Exchange Agreement”), with Sigma Opportunity Fund II, LLC (“Sigma II”) and Sigma Capital Advisors, LLC (“Sigma”), pursuant to which (i) Sigma II exchanged its warrant to purchase up to 10,500,000 shares of our common stock at an exercise price of approximately $0.35 per share for 1,400,000 newly issued shares of our common stock and (ii) Sigma exchanged its warrant to purchase up to 4,500,000 shares of our common stock at an exercise price of approximately $0.35 per share for 600,000 newly issued shares of our common stock, in each case effective as of July 13, 2016. Pursuant to the Exchange Agreement, the warrants were automatically terminated and cancelled in full and rendered null and void as a result of the exchange offer.

Operational Highlights and Objectives

During the six months ended June 30, 2016, we executed key components of our objectives:

	●	appointed a third independent director to our Board of Directors;
	●	relaunched our foundational product AYI under the new brand FirstMet;
	●	initiated development of a new product targeting users over 50 years of age;
	●	rebuilt and re-introduced our iPhone and Android mobile apps, with the goal of reducing the cost of innovation on mobile platforms;
	●	translated portions of FirstMet into nine additional languages to test market opportunities in foreign markets; and
	●	reactivated approximately 647 thousand users from our user database via targeted email campaigns.

For the near term, our business objectives include:

	●	launching new dating products leveraging our existing product platform and the strength of our user database;
	●	continuing to grow and improve our mobile platforms;
	●	reengaging more inactive users in our large user database; and
	●	seeking financing or strategic alternatives to refinance or retire our outstanding debt.

Sources of Revenue

FirstMet operates on a “freemium” model, whereby certain application features are free to all users and other features are only available to paid subscribers. We generate revenue primarily when users purchase a subscription to obtain unlimited messaging and certain other premium features. We also generate a small portion of our revenue through advertisements and micro-transactions that allow users to access other premium features on our FirstMet application.

Currently, while The Grade is building its user community, it is offered for free to users. Apart from testing monetization approaches, we have no immediate plans to introduce a means of generating revenue from The Grade.

Subscription . We provide FirstMet users with the opportunity to purchase a subscription that provides for unlimited messaging and other premium features for the length of the subscription term. We believe that FirstMet users choose to become paid subscribers to communicate freely with potential matches and to enhance the online dating experience.

The majority of our revenue is generated from FirstMet subscriptions originating through the Facebook platform, and a significant amount of our revenue is generated from subscriptions through mobile platforms.

Our users have a variety of methods by which to purchase subscriptions to FirstMet. Users can pay by credit card, Google Play, PayPal, Fortumo or as an in-App purchase through Apple Inc.’s App Store. Pursuant to Apple Inc.’s terms of service, Apple Inc. retains up to 30% of the revenue that is generated from sales on our iPhone application through in-App purchases.

We recognize revenue from monthly FirstMet premium subscription fees in the month in which the services are provided during the subscription term.

Micro-transactions . Micro-transactions allow users to increase the visibility of their profile and messages on FirstMet by paying for such services. In addition, micro-transactions include activation fees for new subscriptions. While micro-transactions are not currently a significant driver of revenue, we believe that such micro-transactions increase user engagement with the application and the likelihood that users will become a paid subscriber. Revenue from micro-transactions is recognized over a two-month period.

Advertising . Our advertising revenue derived from FirstMet primarily consists of revenue from display ads. We generally report our advertising revenue net of amounts due to agencies, brokers and counterparties. We recognize advertising revenue as earned on a click-through, impression, registration or subscription basis. When a user clicks an advertisement (CPC basis), views an advertisement impression (CPM basis), registers for an external website via an advertisement clicks on or through our application (CPA basis), or clicks on an offer to subscribe to premium features on our application, the contract amount is recognized as revenue.

Costs and Expenses

Cost of revenue. 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.

Sales and marketing expense. Sales and marketing expense consists primarily of advertising expenditures and compensation (including stock-based compensation) and other employee-related costs for personnel engaged in marketing and sales support functions. Advertising and promotional spend includes online marketing, including fees paid to search engines, and offline marketing, which is primarily partner-related payments to those who direct traffic to our brands. Our sales and marketing efforts are intended to attract new users, retain existing users and increase sales to both new and existing users.

Product development expense. Product development expense consists primarily of compensation (including stock-based compensation) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology.

General and administrative. General and administrative expense consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources, facilities costs, office expenses and fees for other professional services.

Non-Operating Expenses

Change in fair value of derivative securities. The conversion feature in our outstanding Senior Note, our outstanding warrants, and certain interest make-whole instruments are considered derivative instruments that require liability classification and mark-to-market accounting. Our derivative liability is marked-to-market at the end of each reporting period on our Condensed Consolidated Balance Sheets, with the changes in fair value reported in earnings on our Condensed Consolidated Statements of Operations. We have included the mark-to-market adjustment on derivative liability as a non-operating expense as we do not believe that it is indicative of our core operating results.

We use a custom model that, at each measurement date, calculates the fair value of the derivative liability using a Monte-Carlo style simulation that uses the following assumptions at each valuation date: (i) closing common stock price, (ii) contractual exercise price, (iii) remaining contractual term, (iv) historical volatility of the common stock price, (v) an adjusted volatility that incorporates a 10% incremental discount rate premium (a reduction of the volatility estimate) to reflect the lack of marketability of the conversion feature in the Senior Note and the warrants, (vi) risk-free interest rates that are commensurate with the term of the conversion feature in the Senior Note and the warrants and (vii) management assessment of the probability of a change of control at various price points.

An increase or decrease in the fair value of the derivative liability will decrease or increase the amount of our earnings, respectively, separate from income or loss from operations. The primary cause of the change in the fair value of the derivative liability is the value of our common stock. If our common stock price goes up, the value of these derivatives will generally increase and if our common stock price goes down, the value of these derivatives will generally decrease.

Key Metrics

Our management relies on certain financial measures and/or unaudited performance indicators to manage and evaluate our business that are not calculated and presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”). 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 used in operating activities under the ‟Results of Operations” and ‟Liquidity and Capital Resources” sections below. Active subscribers, bookings and Adjusted EBITDA are discussed below.

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Active subscribers (at period end)		78,700			98,000			78,700			98,000
Bookings	$	2,368,594		$	2,918,409		$	4,869,345		$	6,075,975
Net cash used in operating activities	$	(239,247	)	$	(393,872	)	$	(520,435	)	$	(1,446,642	)
Net loss	$	(841,133	)	$	(258,986	)	$	(2,342,136	)	$	(1,478,165	)
Adjusted EBITDA	$	(131,300	)	$	73,405		$	(269,768	)	$	(539,060	)
Adjusted EBITDA as percentage of total revenues		(5.0	)%		2.3	%		(5.1	)%		(8.5	)%

Active Subscribers

We believe that the number of active subscribers is a key operating metric to assess the potential of the recurring revenue stream of the FirstMet application. "Active subscribers" means current users that have prepaid a subscription fee for current access to the FirstMet application and whose subscription period has not yet expired. We plan to increase this metric by targeted user acquisition campaigns, building a recognizable brand and increasing user engagement on FirstMet through the development of a superior feature set.

Bookings

Bookings is a financial measure representing the aggregate dollar value of subscription fees and micro-transactions received during the period. We calculate bookings as subscription revenue recognized during the period plus the change in deferred subscription revenue recognized during the period. We record subscription revenue from subscription fees and micro-transactions as deferred subscription revenue and then recognize that revenue ratably over the length of the subscription term. Our management uses bookings internally in analyzing our financial results to assess operational performance and to assess the effectiveness of, and plan future, user acquisition campaigns. We believe that this financial measure is useful in evaluating our business because we believe, as compared to subscription revenue, it is a better indicator of the subscription activity in a given period. We believe that both management and investors benefit from referring to bookings in assessing our performance and when planning, forecasting and analyzing future periods.

While the factors that affect bookings and subscription revenue are generally the same, certain factors may affect subscription revenue more or less than such factors affect bookings in any period. While we believe that bookings is useful in evaluating our business, it should be considered as supplemental in nature and it is not meant to be a substitute for subscription revenue recognized in accordance with GAAP.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is defined as net loss adjusted to exclude interest income (expense), net, depreciation and amortization expense, gain (loss) on change in fair value of derivative liabilities, loss on disposal of fixed assets and stock-based compensation 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:

	●	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;
	●	Adjusted EBITDA does not reflect our working capital requirements;
	●	Adjusted EBITDA does not consider the potentially dilutive impact of stock-based compensation;
	●	Adjusted EBITDA does not reflect interest expense or interest payments on our outstanding indebtedness;
	●	Adjusted EBITDA does not reflect the change in fair value of warrants; and
	●	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 loss and our other GAAP results. The following unaudited table presents a reconciliation of net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA for each of the periods indicated:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Reconciliation of Net loss to Adjusted EBITDA:
Net loss	$	(841,133	)	$	(258,986	)	$	(2,342,136	)	$	(1,478,165	)
Interest expense, net		427,306			430,611			852,977			667,015
Depreciation and amortization expense		35,269			35,188			71,784			96,007
Change in fair value of derivative liabilities		110,000			(410,000	)		856,575			(410,000	)
Loss on disposal of fixed assets		-			-			-			79,628
Stock-based compensation expense		137,258			276,592			291,032			506,455
Adjusted EBITDA	$	(131,300	)	$	73,405		$	(269,768	)	$	(539,060	)

Results of Operations

The following table sets forth Condensed Consolidated Statements of Operations data for each of the periods indicated as a percentage of total revenues:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Revenues		100.0	%		100.0	%		100.0	%		100.0	%
Costs and expenses:
Costs of revenue		15.5	%		13.5	%		15.9	%		13.8	%
Sales and marketing expense		46.3	%		43.9	%		47.3	%		49.9	%
Product and administrative expense		16.8	%		17.0	%		16.7	%		18.4	%
General and administrative expense		32.9	%		33.1	%		32.0	%		37.1	%
Total costs and expenses		111.6	%		107.5	%		112.0	%		119.2	%
Loss from operations		(11.6	)%		(7.5	)%		(12.0	)%		(19.2	)%
Interest expense, net		(16.3	)%		(13.5	)%		(16.1	)%		(10.5	)%
Change in fair value of derivative liabilities		4.2	%		12.9	%		(16.2	)%		6.4	%
Loss before provision for income taxes		(32.2	)%		(8.1	)%		(44.3	)%		(23.2	)%
Provision for income taxes		0.0	%		0.0	%		0.0	%		0.0	%
Net loss		(32.2	)%		(8.1	)%		(44.3	)%		(23.2	)%

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015

Revenues

Revenues decreased to $2,613,962 for the three months ended June 30, 2016, from $3,188,539 for the three months ended June 30, 2015. The decrease is mainly driven by a decrease in subscription revenue primarily as a result of a decreased number of new subscription transactions and a decrease in the number of active subscribers, partially offset by an increase in advertising revenue.

The following table sets forth our subscription revenue, advertising revenue and total revenues for the three months ended June 30, 2016 and the three months ended June 30, 2015, the decrease between those periods, the percentage decrease between those periods, and the percentage of total revenues that each represented for those periods:

	Three Months Ended										% Revenue Three Months Ended
	June 30,				Increase			% Increase			June 30,
	2016		2015		(Decrease)			(Decrease)			2016			2015
Subscription revenue	$	2,459,633	$	3,075,868	$	(616,235	)		(20.0	)%		94.1	%		96.5	%
Advertising revenue		154,329		112,671		41,658			37.0	%		5.9	%		3.5	%
Total revenues	$	2,613,962	$	3,188,539	$	(574,577	)		(18.0	)%		100.0	%		100.0	%

Subscription – Our subscription revenue for the three months ended June 30, 2016 decreased by $616,235, or 20.0%, as compared to the three months ended June 30, 2015. This decrease in subscription revenue for the three months ended June 30, 2016 was primarily due to a decrease in the scale of user acquisition campaigns as a result of a decrease in FirstMet advertising expense of 15.4% as compared to the three months ended June 30, 2015. In addition, subscription revenue was impacted by lower subscription prices for new transactions in the three months ended June 30, 2016 when compared to the same period in 2015.

Advertising – Our advertising revenue for the three months ended June 30, 2016 increased by $41,658, or 37.0%, as compared to the three months ended June 30, 2015. The increase in advertising revenue resulted from new advertising partnerships and more advertisement placements.

Costs and Expenses

Total costs and expenses for the three months ended June 30, 2016 reflect a decrease in costs and expenses of $509,125, or 14.9%, as compared to the three months ended June 30, 2015. The following table presents our costs and expenses for the three months ended June 30, 2016 and 2015, the increase or decrease between those periods and the percentage increase or decrease between those periods:

	Three Months Ended June 30,							%
	2016		2015		(Decrease)			(Decrease)
Cost of revenue	$	405,965	$	430,913	$	(24,948	)		(5.8	)%
Sales and marketing expense		1,210,103		1,399,117		(189,014	)		(13.5	)%
Product development expense		440,451		541,026		(100,575	)		(18.6	)%
General and administrative expense		861,270		1,055,858		(194,588	)		(18.4	)%
Total costs and expenses	$	2,917,789	$	3,426,914	$	(509,125	)		(14.9	)%

Cost of revenue - Our cost of revenue for the three months ended June 30, 2016 decreased by $24,948, or 5.8%, as compared to the three months ended June 30, 2015. This slight decrease for the three months ended June 30, 2016 was primarily driven by lower hosting expense. Cost of revenue as a percentage of total revenues was 15.5% for the three months ended June 30, 2016, as compared to 13.5% for the three months ended June 30, 2015.

Sales and marketing expense - Our sales and marketing expense for the three months ended June 30, 2016 decreased by $189,014, or 13.5%, as compared to the three months ended June 30, 2015. The decrease in sales and marketing expense was primarily driven by a decrease in the scale of user acquisition campaigns. Sales and marketing expense as a percentage of total revenues was 46.3% for the three months ended June 30, 2016, as compared to 43.9% for the three months ended June 30, 2015. For the three months ended June 30, 2016 and 2015, advertising expense, which consists of advertising expenditures without taking into account employee-related costs for personnel engaged in sales and sales support functions, was $1,111,285 and $1,313,836, respectively.

Product development expense - Our product development expense for the three months ended June 30, 2016, decreased by $100,575, or 18.6%, as compared to the three months ended June 30, 2015. The decrease in product development expense was primarily due to reduced headcount in the product development and engineering teams. Product development expense as a percentage of total revenues was 16.8% for the three months ended June 30, 2016, as compared to 17.0% for the three months ended June 30, 2015.

General and administrative expense - Our general and administrative expense for the three months ended June 30, 2016 decreased by $194,588, or 18.4%, as compared to the three months ended June 30, 2015. The decrease in general and administrative expense was primarily driven by a decrease in consulting fees and reduced headcount related expenses, offset by an increase in legal fees. General and administrative expense as a percentage of total revenues was 32.9% for the three months ended June 30, 2016, as compared to 33.1% for the three months ended June 30, 2015.

Non-Operating Expense

The following table presents the components of non-operating expense for the three months ended June 30, 2016 and the three months ended June 30, 2015, the increase or decrease between those periods and the percentage increase or decrease between those periods:

	Three Months Ended June 30,						Increase			% Increase
	2016			2015			(Decrease)			(Decrease)
Interest expense, net	$	(427,306	)	$	(430,611	)	$	3,305			(0.8	)%
Change in fair value of derivative liabilities		(110,000	)		410,000			(520,000	)		(126.8	)%
Total non-operating expense	$	(537,306	)	$	(20,611	)	$	(516,695	)		2,506.9	%

Interest expense, net

Interest expense, net for the three months ended June 30, 2016 was $427,306, a net decrease of $3,305, or 0.8%, as compared to $430,611 for the three months ended June 30, 2015. The slight decrease of interest expense was mainly driven by the interest incurred on and the debt discount amortization related to the Senior Note. Interest expense, net represented 16.3% and 13.5% of total revenues for the three months ended June 30, 2016 and 2015, respectively.

Change in fair value of derivative liabilities

Our derivative liability is marked-to-market in each reporting period, with changes in fair value reported in earnings. The mark-to-market loss of $110,000 for the three months ended June 30, 2016 and gain of $410,000 for the three months ended June 30, 2015 represented the changes in fair value of the derivative liability during those periods.

Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015

Revenues

Revenues decreased to $5,291,229 for the six months ended June 30, 2016, from $6,374,622 for the six months ended June 30, 2015. The decrease is mainly driven by a decrease in subscription revenue primarily as a result of a decreased number of new subscription transactions and a decrease in the number of active subscribers, partially offset by an increase in advertising revenue.

The following table sets forth our subscription revenue, advertising revenue and total revenues for the six months ended June 30, 2016 and the six months ended June 30, 2015, the decrease between those periods, the percentage decrease between those periods, and the percentage of total revenues that each represented for those periods:

	Six Months Ended										% Revenue Six Months Ended
	June 30,				Increase			% Increase			June 30,
	2016		2015		(Decrease)			(Decrease)			2016			2015
Subscription revenue	$	4,966,781	$	6,205,178	$	(1,238,397	)		(20.0	)%		93.9	%		97.3	%
Advertising revenue		324,448		169,444		155,004			91.5	%		6.1	%		2.7	%
Total revenues	$	5,291,229	$	6,374,622	$	(1,083,393	)		(17.0	)%		100.0	%		100.0	%

Subscription – Our subscription revenue for the six months ended June 30, 2016 decreased by $1,238,397, or 20.0%, as compared to the six months ended June 30, 2015. This decrease in subscription revenue for the six months ended June 30, 2016 was primarily due to a decrease in the scale of user acquisition campaigns as a result of a decrease in FirstMet advertising expense of 24.7% as compared to the six months ended June 30, 2015. In addition, the year-over-year comparison of our subscription revenue was negatively impacted by unfavorable changes in foreign exchange rates. Subscription revenue as a percentage of total revenues was 93.9% for the six months ended June 30, 2016, as compared to 97.3% for the six months ended June 30, 2015.

Advertising – Our advertising revenue for the six months ended June 30, 2016 increased by $155,004, or 91.5%, as compared to the six months ended June 30, 2015. The increase in advertising revenue resulted from new advertising partnerships and more advertisement placements. Advertising revenue as a percentage of total revenues was 6.1% for the six months ended June 30, 2016, as compared to 2.7% for the six months ended June 30, 2015.

Costs and Expenses

Total costs and expenses for the six months ended June 30, 2016 reflect a decrease in costs and expenses of $1,671,959, or 22.0%, as compared to the six months ended June 30, 2015. The following table presents our costs and expenses for the six months ended June 30, 2016 and 2015, the increase or decrease between those periods and the percentage increase or decrease between those periods:

	Six Months Ended June 30,							%
	2016		2015		(Decrease)			(Decrease)
Cost of revenue	$	841,623	$	881,259	$	(39,636	)		(4.5	)%
Sales and marketing expense		2,502,268		3,180,623		(678,355	)		(21.3	)%
Product development expense		885,999		1,170,801		(284,802	)		(24.3	)%
General and administrative expense		1,693,923		2,363,089		(669,166	)		(28.3	)%
Total costs and expenses	$	5,923,813	$	7,595,772	$	(1,671,959	)		(22.0	)%

Cost of revenue - Our cost of revenue for the six months ended June 30, 2016 decreased by $39,636, or 4.5%, as compared to the six months ended June 30, 2015. This slight decrease for the six months ended June 30, 2016 was primarily driven by lower hosting expense and reduced credit card processing fees driven by fewer revenue transactions. Cost of revenue as a percentage of total revenues was 15.9% for the six months ended June 30, 2016, as compared to 13.8% for the six months ended June 30, 2015.

Sales and marketing expense - Our sales and marketing expense for the six months ended June 30, 2016 decreased by $678,355, or 21.3%, as compared to the six months ended June 30, 2015. The decrease in sales and marketing expense was primarily driven by a decrease in the scale of user acquisition campaigns. Sales and marketing expense as a percentage of total revenues was 47.3% for the six months ended June 30, 2016, as compared to 49.9% for the six months ended June 30, 2015. For the six months ended June 30, 2016 and 2015, advertising expense, which consists of advertising expenditures without taking into account employee-related costs for personnel engaged in sales and sales support functions, was $2,275,423 and $3,020,457, respectively.

Product development expense - Our product development expense for the six months ended June 30, 2016, decreased by $284,802, or 24.3%, as compared to the six months ended June 30, 2015. The decrease in product development expense was primarily due to reduced headcount in the product development and engineering teams. Product development expense as a percentage of total revenues was 16.7% for the six months ended June 30, 2016, as compared to 18.4% for the six months ended June 30, 2015.

General and administrative expense - Our general and administrative expense for the six months ended June 30, 2016 decreased by $669,166, or 28.3%, as compared to the six months ended June 30, 2015. The decrease in general and administrative expense was primarily driven by reduced consulting fees and reduced headcount related expenses, offset by an increase in legal fees. General and administrative expense as a percentage of total revenues was 32.0% for the six months ended June 30, 2016, as compared to 37.1% for the six months ended June 30, 2015.

Non-Operating Expense

The following table presents the components of non-operating expense for the six months ended June 30, 2016 and the six months ended June 30, 2015, the increase or decrease between those periods and the percentage increase or decrease between those periods:

	Six Months Ended June 30,						Increase			% Increase
	2016			2015			(Decrease)			(Decrease)
Interest expense, net	$	(852,977	)	$	(667,015	)	$	(185,962	)		27.9	%
Change in fair value of derivative liabilities		(856,575	)		410,000			(1,266,575	)		(308.9	)%
Total non-operating expense	$	(1,709,552	)	$	(257,015	)	$	(1,452,537	)		565.2	%

Interest expense, net

Interest expense, net for the six months ended June 30, 2016 was $852,977, a net increase of $185,962, or 27.9%, as compared to $667,015 for the six months ended June 30, 2015. The increase of interest expense was mainly driven by the interest incurred on and the debt discount amortization related to the Senior Note, which was entered into on February 13, 2015 and therefore was only amortized for part of the first quarter in 2015 as compared to the full half of the year in 2016. Interest expense, net represented 16.1% and 10.5% of total revenues for the six months ended June 30, 2016 and 2015, respectively.

Change in fair value of derivative liabilities

Our derivative liability is marked-to-market in each reporting period, with changes in fair value reported in earnings. The mark-to-market loss of $856,575 for the six months ended June 30, 2016 and a gain of $410,000 for the six months ended June 30, 2015 represented the changes in fair value of the derivative liability during those periods.

Liquidity and Capital Resources

	Six Months Ended June 30,
	2016			2015
Condensed Consolidated Statements of Cash Flows Data:
Net cash used in operating activities	$	(520,435	)	$	(1,446,642	)
Net cash used in investing activities		(13,533	)		(32,287	)
Net cash (used in) provided by financing activities		(35,377	)		2,255,272
Net (decrease) increase in cash and cash equivalents	$	(569,345	)	$	776,343

We have historically financed our operations through cash generated from debt and equity offerings, cash provided from operations and promissory notes from investors.

A significant portion of our expenses are related to user acquisition costs, and we believe that the number of our active subscribers is strongly correlated to our spending on sales and marketing. Our sales and marketing expenses are primarily spent on channels where we can estimate the return on investment without long-term commitments. Accordingly, we can adjust our sales and marketing expenditures quickly based on the expected return on investment, which provides flexibility and enables us to manage our sales and marketing expense. For the six months ended June 30, 2016, our spending on sales and marketing was 21.3% lower than the six months ended June 30, 2015, which we believe resulted in a decrease in the number of active subscribers during 2016. As described above in “Results of Operations,” we believe that the decrease in the number of active subscribers for the six months ended June 30, 2016 has negatively impacted our revenues as compared to the same period in 2015.

As of June 30, 2016, we had $1,561,917 in cash and cash equivalents, as compared to cash and cash equivalents of $2,131,262 as of December 31, 2015. Historically, our working capital has been generated through operations and equity offerings. If we grow and expand our operations, our need for working capital will increase. We intend to finance our business and growth with cash on hand, cash provided from operations, borrowings, debt or equity offerings, or some combination thereof.

We have also incurred debt as a means of generating liquidity. As of June 30, 2016, the outstanding principal amount of our debt was $3,000,000, which consisted entirely of the Senior Note. In addition, we recently entered into the Term Note with Paltalk and, as of August 8, 2016, had borrowed $200,000 available under the Term Note.

Debt

On February 13, 2015, we issued the Senior Note in the aggregate principal amount of $3,000,000 to Sigma II in a private placement. The Senior Note bears interest at a rate of 12% per annum and matures on the earlier of February 13, 2017 or a change in control. During any time while the Senior Note is outstanding, the outstanding principal balance of the Senior Note, together with all accrued and unpaid interest, is convertible into shares of our common stock at the option of Sigma II at a conversion price of $0.20 per share, subject to certain adjustments. The Senior Note requires us to maintain an aggregate cash balance of $1,350,000 million in our bank accounts or we will be required to make partial prepayments on the Senior Note. If we fail to maintain this aggregate cash balance in our bank accounts for a thirty day period, we are required to make a $125,000 prepayment on the Senior Note. For each subsequent calendar month that the aggregate cash balance in our bank accounts does not equal or exceed $1,500,000 million, we must make an additional $125,000 prepayment on the Senior Note. Our obligations under the Senior Note are secured by a first priority lien on all of our assets and property. The Senior Note is secured by up to 65% of the outstanding capital stock and other equity interests of Snap Mobile Limited, our wholly owned subsidiary. Snap Mobile Limited is also a guarantor of the Senior Note. We have and will continue to use the proceeds from the private placement for general corporate purposes, including working capital.

In order to help fund our operations and comply with the obligations of the Senior Note, on July 18, 2016, we entered into the Term Note with Paltalk, pursuant to which Paltalk agreed to advance to us, upon our request and subject to the terms and conditions set forth in the Term Note, up to $250,000. As of August 8, 2016, we had borrowed $200,000 available under the Term Note. The Term Note matures on July 18, 2017, subject to certain exceptions, and advances under the Term Note shall bear interest at a rate of 8.0% per annum. We may prepay amounts due under the Term Note without penalty, but we may not reborrow any principal amount that has been repaid.

In connection with the entry into the Term Note, on July 18, 2016, we entered into the Security Agreement with Paltalk. The Security Agreement will not become effective until, among other things, the Senior Note is paid in full. Upon the effectiveness of the Security Agreement, our obligations under the Term Note will be secured by a first priority security interest in all of our assets and property, including 65% of the capital stock and other equity interests of SNAP Mobile Limited.

Our ability to grow our business, continue to meet our obligations and make payments on the Senior Note is dependent upon establishing consistently profitable operations, which may be supplemented by raising additional funds through public or private financings or strategic business combinations. See “Recent Developments—Non-Binding Letter of Intent.” Although we currently believe that we have sufficient resources to make our required payments on the Senior Note throughout 2016, we believe that we will need to raise additional capital in the future to fund our operations, repay the Senior Note when it becomes due on February 13, 2017 and maintain compliance with the minimum cash balance covenant in the Senior Note.

If we are unable to raise additional capital, we may breach the minimum cash balance requirement under the Senior Note and we may be unable to make payments on the Senior Note. As a result, we may need to restructure or refinance the Senior Note, and we may not be able to complete such restructuring or refinancing on terms that are acceptable to us or at all. As described above, if we breach the minimum cash balance requirement we will be required to make prepayments on the Senior Note, which would materially adversely affect our ability to conduct our operations.

If we cannot make scheduled payments on the Senior Note or repay the Senior Note when it becomes due, we will be in default and Sigma II could declare all outstanding principal and interest on the Senior Note to be immediately due and payable and could foreclose against the assets securing the Senior Note, which could force us into bankruptcy or liquidation.

Going Concern

Our financial statements for the six months ended June 30, 2016 indicate there is substantial doubt about our ability to continue as a going concern as we require additional equity and/or debt financing to continue our operations. We must ultimately generate sufficient cash flow to meet our obligations on a timely basis, repay the Senior Note which is due on February 13, 2017, attain profitability in our business operations and be able to fund our long term business development and growth plans. Our business will require significant amounts of capital to sustain operations and make the investments we need to execute our longer-term business plan. Management believes that we have access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations, strategic business combinations or other means; however, we have not secured any commitment for new financing at this time nor can we provide any assurance that new financing will be available on commercially acceptable terms, if at all. See “Recent Developments—Non-Binding Letter of Intent.” Our liquidity and capital resources have decreased as a result of the net operating loss of $632,584 that we incurred during the six months ended June 30, 2016. On June 30, 2016, our accumulated deficit amounted to $17,019,262.

Operating Activities

Net cash used in operating activities was $520,435 for the six months ended June 30, 2016, as compared to net cash used in operating activities of $1,446,642 for the six months ended June 30, 2015. This decrease in net cash used in operating activities was a result of a decrease in our accrued expenses mainly driven by the one-time repayment of the advance under the Acquisition Agreement with Zoosk and security deposit made in connection with the relocation of our corporate office.

Significant items impacting cash flow in the six months ended June 30, 2016 included significant cash outlays relating to sales and marketing expense, professional fees and related benefits. These uses of cash were offset in part by collections in subscription revenue received during the period.

Significant items impacting cash flow in the six months ended June 30, 2015 included significant cash outlays relating to sales and marketing expense, increases in programming, hosting and technology expense, professional fees and related benefits. These uses of cash were offset in part by collections in subscription revenue received during the period.

Investing Activities

Cash used in investing activities for the six months ended June 30, 2016 and 2015 was $13,533 and $32,287, respectively. Cash used in investing activities included purchases of property and equipment totaling $12,204 and $37,007 during the six months ended June 30, 2016 and 2015, respectively. These purchases consisted primarily of computers and office furniture during the periods. Purchases of property and equipment may vary from period to period due to the timing of the expansion of our operations and software development.

Financing Activities

Cash (used in) provided by financing activities for the six months ended June 30, 2016 and 2015 was $(35,377) and $2,255,272, respectively.

The decrease relates to the issuance of the Senior Note in the aggregate principal amount of $3,000,000 to Sigma II during the six months ended June 30, 2015, which was partially offset by the repayment of two promissory notes in the aggregate principal amount of $400,000 and payments for our capital lease obligations in 2015.

Off-Balance Sheet Arrangements

As of June 30, 2016, we did not have any off-balance sheet arrangements.

Contractual Obligations and Commitments

Recently Issued Accounting Pronouncements

Significant Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements that have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these financial statements include the provision for future credit card chargebacks and refunds on subscription revenue, estimates used to determine the fair value of our common stock, stock options, non-cash capital stock issuances, stock-based compensation and common stock warrants, collectability of our accounts receivable and the valuation allowance on deferred tax assets. Management evaluates these estimates on an ongoing basis. Changes in estimates are recorded in the period in which they become known. We base estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates.

During the six months ended June 30, 2016, there were no material changes to our significant accounting policies from those contained in the Form 10-K. Certain critical accounting policies are included here as follows:

Reclassification

Certain prior period amounts have been reclassified for comparative purposes to conform to the fiscal 2015 presentation. These reclassifications have no impact on the previously reported net loss.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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 June 30, 2016, for the reasons set forth below, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not 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.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control our financial reporting as of June 30, 2016, the Company determined that the following item constituted a material weakness:

●

the Company did not have an independent audit committee in place, which would provide oversight of the Company’s officers, operations and financial reporting function.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

To our knowledge there were no material pending legal proceedings to which we were a party or of which any of our property was the subject that were pending or initiated in the second quarter of 2016.

ITEM 1A. RISK FACTORS

There were no material changes to the Risk Factors disclosed in “Item 1A. Risk Factors” in the Form 10-K. For more information concerning our risk factors, please see “Item 1A. Risk Factors” in the Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Dividend Policy

We have never declared or paid dividends on our common stock. We do not anticipate paying any dividends on our common stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. Any future determination to declare dividends will be subject to the discretion of our Board of Directors and will depend on various factors, including applicable Delaware law, future earnings, capital requirements, results of operations and any other relevant factors. In general, as a Delaware corporation, we may pay dividends out of surplus capital or, if there is no surplus capital, out of net profits for the fiscal year in which a dividend is declared and/or the preceding fiscal year. Pursuant to the terms of the Senior Note that we issued to Sigma II on February 13, 2015, we are restricted from paying cash dividends on our common stock without first obtaining Sigma II’s prior written consent.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

On August 8, 2016, our Board of Directors approved and adopted (i) a form of agreement for nonqualified stock option awards (the “NQSO Agreement”) to be granted pursuant to Snap Interactive, Inc. 2016 Long-Term Incentive Plan (the “2016 Plan”), (ii) a form of agreement for incentive stock option awards (the “ISO Agreement,” and together with the NQSO Agreement, the “Option Agreements”) to be granted pursuant to the 2016 Plan and (iii) a form of agreement for restricted stock awards (the “RS Agreement”) to be granted pursuant to the 2016 Plan.

Stock options granted pursuant to the Option Agreements (“Awarded Options”) generally must have an exercise price equal to the fair market value of our common stock on the date of grant, as determined in accordance with the terms of the 2016 Incentive Plan (except with respect to grants under the ISO Agreement to a ten percent (10%) or more stockholder, as provided in Section 422 of the Internal Revenue Code of 1986, as amended, in which case the exercise price must be at least one hundred and ten percent (110%) of the fair market value of our common stock on the date of grant). Awarded Options will be subject to either time - based or performance - based vesting conditions, as determined by our Board of Directors, in its discretion, and as set forth in the recipient’s Option Agreement at the time of grant. The Option Agreements provide that upon the occurrence of a “change in control,” fifty percent (50%) of the then unvested Awarded Options will vest immediately on the date of such change in control, and the remaining fifty percent (50%) will vest on the earlier of the original date such Awarded Options would have vested, or equally on the first and second anniversary of the effective date of such change in control. The Option Agreements provide that the Awarded Options will expire on the date immediately preceding the tenth anniversary of the date of grant (except with respect to grants under the ISO Agreement to a ten percent (10%) or more stockholder, in which case the Awarded Options will expire on the date immediately preceding the fifth anniversary of the date of grant), unless sooner terminated in accordance with the terms of the Option Agreement. The Option Agreements also provide that (i) unvested Awarded Options terminate on the date of the recipient’s termination of service for any reason, and (ii) vested but unexercised Awarded Options will terminate upon the first to occur of (A) the expiration date of the Awarded Options, (B) immediately upon the recipient’s termination of service by Snap for cause, (C) immediately upon the recipient’s violation of any non-compete or non-solicitation agreement entered with Snap, or (D) the date the Awarded Options are forfeited by a recipient for failing to pay the exercise price for, or accept delivery of the shares underlying the Awarded Options. Our Board of Directors may, in its sole discretion and in accordance with the terms of the 2016 Incentive Plan, grant stock option awards with terms that are different from those contained in the Option Agreements.

Shares of restricted stock granted pursuant to the RS Agreement (“Awarded Shares”) are generally subject to a substantial risk of forfeiture and to restrictions on their sale or other transfer by the recipient until such Awarded Shares are vested in accordance with the terms of the RS Agreement. Awarded Shares will be subject to either time - based or performance - based vesting conditions, as determined by our Board of Directors, in its discretion, and as set forth in the recipient’s RS Agreement at the time of grant. The RS Agreement provides that upon the occurrence of a “change in control,” fifty percent (50%) of the then unvested Awarded Shares will vest immediately on the date of such change in control, and the remaining fifty percent (50%) will vest on the earlier of the original date such Awarded Shares would have vested, or equally on the first and second anniversary of the effective date of such change in control. The RS Agreement provides that Awarded Shares that are not vested in accordance with the terms of the RS Agreement will be forfeited on the date of the recipient’s termination of service from Snap for any reason. Our Board of Directors may, in its sole discretion and in accordance with the terms of the 2016 Incentive Plan, grant restricted stock awards with terms that are different from those contained in the RS Agreement.

The foregoing description of the NQSO Agreement, the ISO Agreement and the RS Agreement is qualified in its entirety to the full text of such forms, which are filed herewith as Exhibits 10.2, 10.3 and 10.4, respectively.

ITEM 6. EXHIBITS

(a) Exhibits required by Item 601 of Regulation S-K.

Exhibit Number		Description

3.1		Certificate of Incorporation, dated July 19, 2005 (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 333- 172202) of the Company filed on February 11, 2011 by the Company with the SEC).
3.2		Certificate of Amendment of Certificate of Incorporation, dated November 20, 2007 (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (File No. 333-172202) of the Company filed on February 11, 2011 by the Company with the SEC).
3.3		Certificate of Amendment to Certificate of Incorporation, dated March 8, 2016 (incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-K filed on March 14, 2016 by the Company with the SEC).
3.4*		Certificate of Amendment to Certificate of Incorporation, dated May 19, 2016.
3.5		Amended and Restated By-Laws of Snap Interactive, Inc., as amended April 19, 2012 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Company filed on April 25, 2012 by the Company with the SEC).
10.1		Snap Interactive, 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 16, 2016 by the Company with the SEC).
10.2*		Form of Nonqualified Stock Option Agreement.
10.3*		Form of Incentive Stock Option Agreement.
10.4*		Form of Restricted Stock Award Agreement.
10.5*		Exchange Agreement, dated July 13, 2016, by and among Snap Interactive, Inc., Sigma Opportunity Fund II, LLC and Sigma Capital Advisors, LLC.
10.6*		Subordinated Multiple Advance Term Note, dated July 18, 2016, by and between Snap Interactive, Inc. and A.V.M. Software, Inc.
10.7*		Security Agreement, dated July 18, 2016, by and between Snap Interactive, Inc. and A.V.M. Software, Inc.
31.1*		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 *		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL (eXtensible Business Reporting Language), (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statement of Changes in Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements.

*	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 Snap Interactive, 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 Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

SIGNATURES

Pursuant to the requirements 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.

	SNAP INTERACTIVE, INC.

Date: August 11, 2016	By:	/s/ Alexander Harrington
		Alexander Harrington
		Chief Executive Officer and Chief Financial Officer
		(Principal Executive, Financial and Accounting Officer)

Exhibit 3.4

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

SNAP INTERACTIVE, INC.

Adopted in accordance with the provisions

of Section 242 of the General Corporation

Law of the State of Delaware

Snap Interactive, Inc. (the “ Corporation ”), a corporation duly organized and existing under the laws of the State of Delaware, by its duly authorized officer, does hereby certify that:

1. The Board of Directors of the Corporation has duly adopted resolutions (i) authorizing the Corporation to execute and file with the Secretary of State of the State of Delaware an amendment of the Corporation’s Certificate of Incorporation, as amended, to increase the total number of shares of common stock authorized for issuance to 500,000,000 and clarify the rights of the Board of Directors with respect to the issuance of preferred stock, (ii) declaring such amendment to be advisable and (iii) directing that the appropriate officers of the Corporation solicit the approval of the Corporation’s stockholders for such amendments at an annual meeting of stockholders.

2. Upon this Certificate of Amendment becoming effective, Article FOURTH of the Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety as follows:

FOURTH: The total number of shares of stock which the Corporation is authorized to issue is five hundred million (500,000,000) shares of common stock, par value $0.001, and ten million (10,000,000) shares of preferred stock, par value $0.001.

The powers, preferences and rights of the common stock and the qualifications, limitations or restrictions thereof shall be determined by the Board of Directors.

Shares of preferred stock may be issued from time to time in one or more series. The Board of Directors is authorized to provide by resolution or resolutions from time to time for the issuance, out of the authorized but unissued shares of preferred stock, of all or any of the shares of preferred stock in one or more series, and to establish the number of shares to be included in each such series, and to fix the voting powers (full, limited or no voting powers), designations, powers, preferences, and relative, participating, optional or other rights, if any, and any qualifications, limitations or restrictions thereof, of such series, including, without limitation, that any such series may be (i) subject to redemption at such time or times and at such price or prices, (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or series of capital stock, (iii) entitled to such rights upon the liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation or (iv) convertible into, or exchangeable for, shares of any other class or classes of capital stock, or of any other series of the same class of capital stock, of the Corporation at such price or prices or at such rates and with such adjustments; all as may be stated in such resolution or resolutions, which resolution or resolutions shall be set forth on a certificate of designations filed with the Secretary of State of the State of Delaware in accordance with Delaware Law.

3. This Certificate of Amendment has been duly approved by the Board of Directors of the Corporation in accordance with Section 242 of the General Corporation Law of the State of Delaware.

4. This Certificate of Amendment has been duly approved by the holders of the requisite number of shares of capital stock of the Corporation, in accordance with the applicable provisions of Sections 216 and 242 of the General Corporation Law of the State of Delaware and the applicable provisions of the Certificate of Incorporation.

5. This Certificate of Amendment shall become effective when it is filed with the Secretary of State of the State of Delaware.

[ Remainder of Page Intentionally Left Blank ]

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by its duly authorized officer this 19th day of May 2016.

	SNAP INTERACTIVE, INC.,
	a Delaware corporation

	By:	/s/ Alexander Harrington
		Alexander Harrington Chief Executive Officer and Chief Financial Officer

Exhibit 10.2

FORM OF NONQUALIFIED STOCK OPTION AGREEMENT

SNAP INTERACTIVE, INC.

2016 LONG-TERM INCENTIVE PLAN

1. Grant of Option . Pursuant to the Snap Interactive, Inc. 2016 Long-Term Incentive Plan (the “ Plan ”) for Employees, Contractors, and Outside Directors of Snap Interactive, Inc., a Delaware corporation (the “ Company ”), the Company grants to

_________________________

(the “ Participant ”),

an option (the “ Option ” or “ Stock Option ”) to purchase a total of ___________________ (__________) full shares of Common Stock of the Company (the “ Optioned Shares ”) at an “ Option Price ” equal to $________ per share (which is equal to the Fair Market Value per share of Common Stock on the Date of Grant).

The “ Date of Grant ” of this Stock Option is _________________, 20__. The “ Option Period ” shall commence on the Date of Grant and shall expire on the date immediately preceding the tenth (10 ^th ) anniversary of the Date of Grant, unless terminated earlier in accordance with Section 4 below. The Stock Option is a Nonqualified Stock Option. This Stock Option is intended to comply with the provisions governing nonqualified stock options under the final Treasury Regulations issued on April 17, 2007, in order to exempt this Stock Option from application of Section 409A of the Code.

2. Subject to Plan . The Stock Option and its exercise are subject to the terms and conditions of the Plan, and the terms of the Plan shall control to the extent not otherwise inconsistent with the provisions of this Nonqualified Stock Option Agreement (the “ Agreement ”). The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. The Stock Option is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

3. Vesting; Time of Exercise . Except as specifically provided in this Agreement and subject to certain restrictions and conditions set forth in the Plan, the Optioned Shares shall be vested and the Stock Option shall be exercisable as follows:

a. _______________________ of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable on __________________, provided the Participant is employed by (or, if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

b. _______________________ of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable on __________________, provided the Participant is employed by (or, if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

c. _______________________ of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable on __________________, provided the Participant is employed by (or, if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

d. _______________________ of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable on __________________, provided the Participant is employed by (or, if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

Notwithstanding the foregoing, upon a Change in Control, (i) fifty percent (50%) of the then-unvested Optioned Shares immediately shall vest on the date of the Change in Control; and (ii) the remaining fifty percent (50%) of the unvested Optioned Shares shall vest on the earlier of (A) the original date such Optioned Shares would have vested under Sections 3.a.-[d.] above, or (B) equally on the first and second anniversary of the effective date of the Change in Control.

4. Term; Forfeiture .

a. Except as otherwise provided in this Agreement, to the extent the unexercised portion of the Stock Option relates to Optioned Shares which are not vested on the date of the Participant’s Termination of Service, the Stock Option will be terminated on that date. The unexercised portion of the Stock Option that relates to Optioned Shares which are vested will terminate at the first of the following to occur:

i. 5 p.m. on the date the Option Period terminates;

ii. immediately upon the Participant’s Termination of Service by the Company for Cause (as defined herein);

iii. 5 p.m. on the date the Company causes any portion of the Stock Option to be forfeited pursuant to Section 7 hereof; or

iv. immediately upon the Participant’s violation of any non-compete or non-solicitation agreement entered into between the Company and the Participant.

b. For purposes hereof, “ Cause ” shall have the meaning set forth in the employment agreement or other service agreement by and between the Company and the Participant; provided, that, if no such agreement is in effect or such agreement does not define such term, then “Cause” shall mean (i) acts of fraud or dishonesty in the course of employment or service, (ii) violations of law causing material harm to the Company, (iii) substance abuse causing harm to the Company or impairing performance, (iv) conviction of a felony involving moral turpitude, or (v) insubordination, dereliction of duties, habitual absenteeism, or material failure to follow reasonable Company instructions after (solely in the case of this clause (v)) notice to the Participant and the Participant’s failure to correct same within the time period specified in the notice, which time period shall be not less than ten (10) business days.

5. Who May Exercise . Subject to the terms and conditions set forth in Sections 3 and 4 above, during the lifetime of the Participant, the Stock Option may be exercised only by the Participant, or by the Participant’s guardian or personal or legal representative. If the Participant’s Termination of Service is due to his or her death prior to the dates specified in Section 4.a. hereof, and the Participant has not exercised the Stock Option as to the maximum number of vested Optioned Shares as set forth in Section 3 hereof as of the date of death, the following persons may exercise the exercisable portion of the Stock Option on behalf of the Participant at any time prior to the earliest of the dates specified in Section 4.a. hereof: the personal representative of his or her estate, or the person who acquired the right to exercise the Stock Option by bequest or inheritance or by reason of the death of the Participant; provided that the Stock Option shall remain subject to the other terms of this Agreement, the Plan, and Applicable Laws, rules, and regulations.

6. No Fractional Shares . The Stock Option may be exercised only with respect to full shares, and no fractional share of stock shall be issued.

7. Manner of Exercise . Subject to such administrative regulations as the Committee may from time to time adopt, the Stock Option may be exercised by the delivery of written notice to the Committee setting forth the number of shares of Common Stock with respect to which the Stock Option is to be exercised (the “ Exercise Notice ”) and the date of exercise thereof (the “ Exercise Date ”) which shall be the date that the Participant has delivered both the Exercise Notice and consideration to the Company with a value equal to the total Option Price of the shares to be purchased (plus any employment tax withholding or other tax payment due with respect to the exercise of the Stock Option). On the Exercise Date, the Participant shall deliver to the Company consideration with a value equal to the total Option Price of the shares to be purchased, payable as follows: (a) cash, check, bank draft, or money order payable to the order of the Company, (b) if the Company, in its sole discretion, so consents in writing, Common Stock (including Restricted Stock) owned by the Participant on the Exercise Date, valued at its Fair Market Value on the Exercise Date, and which the Participant has not acquired from the Company within six (6) months prior to the Exercise Date, (c) if the Company, in its sole discretion, so consents in writing, by delivery (including by FAX or electronic transmission) to the Company or its designated agent of an executed irrevocable option exercise form (or, to the extent permitted by the Company, exercise instructions, which may be communicated in writing, telephonically, or electronically) together with irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common Stock purchased upon exercise of the Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company the amount of sale or loan proceeds necessary to pay such purchase price, and/or (d) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. In the event that shares of Restricted Stock are tendered as consideration for the exercise of a Stock Option, a number of shares of Common Stock issued upon the exercise of the Stock Option equal to the number of shares of Restricted Stock used as consideration therefor shall be subject to the same restrictions and provisions as the Restricted Stock so tendered. If the Participant fails to deliver the consideration described above within three (3) business days of the date of the Exercise Notice, then the Exercise Notice shall be null and void and the Company will have no obligation to deliver any shares of Common Stock to the Participant in connection with such Exercise Notice.

Upon payment of all amounts due from the Participant, the Company shall cause certificates for the Common Stock then being purchased to be delivered as directed by the Participant (or the person exercising the Participant’s Stock Option in the event of his or her death) at its principal business office promptly after the Exercise Date. The obligation of the Company to deliver shares of Common Stock shall, however, be subject to the condition that, if at any time the Committee shall determine in its discretion that the listing, registration, or qualification of the Stock Option or the Common Stock upon any securities exchange or inter-dealer quotation system or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the Stock Option or the issuance or purchase of shares of Common Stock thereunder, the Stock Option may not be exercised in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not reasonably acceptable to the Committee.

If the Participant fails to pay for any of the Common Stock specified in such notice or fails to accept delivery thereof, that portion of the Participant’s Stock Option and right to purchase such Common Stock may be forfeited by the Participant.

8. Nonassignability . The Stock Option is not assignable or transferable by the Participant except by will or by the laws of descent and distribution.

9. Rights as Stockholder . The Participant will have no rights as a stockholder with respect to any of the Optioned Shares until the issuance of a certificate or certificates to the Participant for the shares of Common Stock. The Optioned Shares shall be subject to the terms and conditions of this Agreement. Except as otherwise provided in Section 10 hereof, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such certificate or certificates. The Participant, by his or her execution of this Agreement, agrees to execute any documents requested by the Company in connection with the issuance of a certificate or certificates for the shares of Common Stock.

10. Adjustment of Number of Optioned Shares and Related Matters . The number of shares of Common Stock covered by the Stock Option, and the Option Prices thereof, shall be subject to adjustment in accordance with Articles 11 - 13 of the Plan.

11. Nonqualified Stock Option . The Stock Option shall not be treated as an Incentive Stock Option.

12. Voting . The Participant, as record holder of some or all of the Optioned Shares following exercise of this Stock Option, has the exclusive right to vote, or consent with respect to, such Optioned Shares until such time as the Optioned Shares are transferred in accordance with this Agreement; provided , however , that this Section shall not create any voting right where the holders of such Optioned Shares otherwise have no such right.

13. Specific Performance . The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

14. Participant’s Representations . Notwithstanding any of the provisions hereof, the Participant hereby agrees that he or she will not exercise the Stock Option granted hereby, and that the Company will not be obligated to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. Any determination in this connection by the Company shall be final, binding, and conclusive. The obligations of the Company and the rights of the Participant are subject to all Applicable Laws, rules, and regulations.

15. Investment Representation . Unless the shares of Common Stock are issued to the Participant in a transaction registered under applicable federal and state securities laws, by his or her execution hereof, the Participant represents and warrants to the Company that all Common Stock which may be purchased hereunder will be acquired by the Participant for investment purposes for his or her own account and not with any intent for resale or distribution in violation of federal or state securities laws. Unless the Common Stock is issued to him or her in a transaction registered under the applicable federal and state securities laws, all certificates issued with respect to the Common Stock shall bear an appropriate restrictive investment legend and shall be held indefinitely, unless they are subsequently registered under the applicable federal and state securities laws or the Participant obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel, that such registration is not required.

16. Participant’s Acknowledgments . The Participant acknowledges that a copy of the Plan has been made available for his or her review by the Company, and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Stock Option subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement.

17. Law Governing . This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware (excluding any conflict of laws rule or principle of Delaware law that might refer the governance, construction, or interpretation of this Agreement to the laws of another state).

18. No Right to Continue Service or Employment . Nothing herein shall be construed to confer upon the Participant the right to continue in the employ or to provide services to the Company or any Subsidiary, whether as an Employee or as a Contractor or as an Outside Director, or interfere with or restrict in any way the right of the Company or any Subsidiary to discharge the Participant as an Employee, Contractor or Outside Director at any time.

19. Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

20. Covenants and Agreements as Independent Agreements . Each of the covenants and agreements that is set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

21. Entire Agreement . This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.

22. Parties Bound . The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein.

23. Modification . No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties; provided, however, that the Company may change or modify this Agreement without the Participant’s consent or signature if the Company determines, in its sole discretion, that such change or modification is necessary for purposes of compliance with or exemption from the requirements of Section 409A of the Code or any regulations or other guidance issued thereunder. Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by the Plan.

24. Headings . The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

25. Gender and Number . Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

26. Notice . Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

a. Notice to the Company shall be addressed and delivered as follows:

Snap Interactive, Inc.

320 W 37 ^th Street, 13 ^th Floor

New York, NY 10018

Attn:

Facsimile:

b. Notice to the Participant shall be addressed and delivered as set forth on the signature page.

27. Tax Requirements . The Participant is hereby advised to consult immediately with his or her own tax advisor regarding the tax consequences of this Agreement. The Company or, if applicable, any Subsidiary (for purposes of this Section 27 , the term “ Company ” shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any Federal, state, local, or other taxes required by law to be withheld in connection with this Award. The Company may, in its sole discretion, also require the Participant receiving shares of Common Stock issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to this Award. Such payments shall be required to be made when requested by the Company and may be required to be made prior to the delivery of any certificate representing shares of Common Stock. Such payment may be made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the exercising Participant to the Company of shares of Common Stock that the Participant has not acquired from the Company within six (6) months prior to the date of exercise, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares to be delivered upon the exercise of the Stock Option, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; (iv) if the Company, in its sole discretion, so consents in writing, arrange for the sale of a number of shares to be delivered upon the exercise of the Stock Option (on the Participant’s behalf and at his or her direction pursuant to a written authorization) with an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (v) any combination of (i), (ii), (iii), or (iv). The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.

* * * * * * * *

[ Remainder of Page Intentionally Left Blank

Signature Page Follows. ]

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his or her consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.

	COMPANY:

	SNAP INTERACTIVE, INC.

	By:
	Name:
	Title:

	PARTICIPANT:


	Signature

	Name:
	Address:

Signature Page to Nonqualified Stock Option Agreement

Exhibit 10.3

FORM OF INCENTIVE STOCK OPTION AGREEMENT

SNAP INTERACTIVE, INC.

2016 LONG-TERM INCENTIVE PLAN

(the “ Participant ”),

who is an Employee of the Company, an option (the “ Option ” or “ Stock Option ”) to purchase a total of _____________________ (_________) full shares of Common Stock of the Company (the “ Optioned Shares ”) at an “ Option Price ” equal to $________ per share (which is equal to the Fair Market Value per share of Common Stock on the Date of Grant or 110% of such Fair Market Value, in the case of a ten percent (10%) or more stockholder as provided in Section 422 of the Code), in the amounts, during the periods and upon the terms and conditions set forth in this Incentive Stock Option Agreement (the “ Agreement ”).

The “ Date of Grant ” of this Stock Option is _________________, 20___. The “ Option Period ” shall commence on the Date of Grant and shall expire on the date immediately preceding the tenth (10 ^th ) anniversary of the Date of Grant (or the date immediately preceding the fifth (5 ^th ) anniversary of the Date of Grant, in the case of a ten percent (10%) or more stockholder as provided in Section 422 of the Code) unless terminated earlier in accordance with Section 4 below. The Stock Option is intended to be an Incentive Stock Option.

2. Subject to Plan . The Stock Option and its exercise are subject to the terms and conditions of the Plan, and the terms of the Plan shall control to the extent not otherwise inconsistent with the provisions of this Agreement. The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. The Stock Option is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

a. _____________________ of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable on _________________________, provided the Participant is employed by the Company or a Subsidiary on that date.

b. _____________________ of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable on ________________________, provided the Participant is employed by the Company or a Subsidiary on that date.

c. _____________________ of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable on ________________________, provided the Participant is employed by the Company or a Subsidiary on that date.

d. _____________________ of the total Optioned Shares shall vest and that portion of the Stock Option shall become exercisable on ________________________, provided the Participant is employed by the Company or a Subsidiary on that date.

4. Term; Forfeiture .

i. 5 p.m. on the date the Option Period terminates;

ii. immediately upon the Participant’s Termination of Service by the Company for Cause (as defined herein);

iii. 5 p.m. on the date which is twelve (12) months following the date of the Participant’s Termination of Service due to death or Total and Permanent Disability;

iv. 5 p.m. on the date which is three (3) months following the date of the Participant’s Termination of Service for any reason not otherwise specified in this Section 4.a. ;

v. 5 p.m. on the date the Company causes any portion of the Stock Option to be forfeited pursuant to Section 7 hereof; or

vi. immediately upon the Participant’s violation of any non-compete or non-solicitation agreement entered into between the Company and the Participant.

b. For purposes hereof, “ Cause ” shall have the meaning set forth in the employment agreement by and between the Company and the Participant; provided, that, if no such agreement is in effect or such agreement does not define such term, then “Cause” shall mean (i) acts of fraud or dishonesty in the course of employment, (ii) violations of law causing material harm to the Company, (iii) substance abuse causing harm to the Company or impairing performance, (iv) conviction of a felony involving moral turpitude, or (v) insubordination, dereliction of duties, habitual absenteeism, or material failure to follow reasonable Company instructions after (solely in the case of this clause (v)) notice to the Participant and the Participant’s failure to correct same within the time period specified in the notice, which time period shall be not less than ten (10) business days.

6. No Fractional Shares . The Stock Option may be exercised only with respect to full shares, and no fractional share of stock shall be issued.

7. Manner of Exercise . Subject to such administrative regulations as the Committee may from time to time adopt, the Stock Option may be exercised by the delivery of written notice to the Committee setting forth the number of shares of Common Stock with respect to which the Stock Option is to be exercised (the “ Exercise Notice ”), whether the Optioned Shares to be exercised will be considered as deemed granted under an Incentive Stock Option as provided in Section 11 , and the date of exercise thereof (the “ Exercise Date ”) which shall be the date that the Participant has delivered both the Exercise Notice and consideration to the Company with a value equal to the total Option Price of the shares to be purchased (plus any employment tax withholding or other tax payment due with respect to the exercise of the Stock Option). On the Exercise Date, the Participant shall deliver to the Company consideration with a value equal to the total Option Price of the shares to be purchased, payable as follows: (a) cash, check, bank draft, or money order payable to the order of the Company, (b) if the Company, in its sole discretion, so consents in writing, Common Stock (including Restricted Stock) owned by the Participant on the Exercise Date, valued at its Fair Market Value on the Exercise Date, and which the Participant has not acquired from the Company within six (6) months prior to the Exercise Date, (c) if the Company, in its sole discretion, so consents in writing, by delivery (including by FAX or electronic transmission) to the Company or its designated agent of an executed irrevocable option exercise form (or, to the extent permitted by the Company, exercise instructions, which may be communicated in writing, telephonically, or electronically) together with irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common Stock purchased upon exercise of the Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company the amount of sale or loan proceeds necessary to pay such purchase price, and/or (d) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. In the event that shares of Restricted Stock are tendered as consideration for the exercise of a Stock Option, a number of shares of Common Stock issued upon the exercise of the Stock Option equal to the number of shares of Restricted Stock used as consideration therefor shall be subject to the same restrictions and provisions as the Restricted Stock so tendered. If the Participant fails to deliver the consideration described above within three (3) business days of the date of the Exercise Notice, then the Exercise Notice shall be null and void and the Company will have no obligation to deliver any shares of Common Stock to the Participant in connection with such Exercise Notice.

Upon payment of all amounts due from the Participant, the Company shall cause certificates for the Common Stock then being purchased to be delivered as directed by the Participant (or the person exercising the Participant’s Stock Option in the event of his or her death) at its principal business office promptly after the Exercise Date; provided that if the Participant has exercised an Incentive Stock Option, the Company may at its option retain physical possession of the certificate evidencing the shares acquired upon exercise until the expiration of the holding periods described in Section 422(a)(1) of the Code. The obligation of the Company to deliver shares of Common Stock shall, however, be subject to the condition that, if at any time the Committee shall determine in its discretion that the listing, registration, or qualification of the Stock Option or the Common Stock upon any securities exchange or inter-dealer quotation system or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the Stock Option or the issuance or purchase of shares of Common Stock thereunder, the Stock Option may not be exercised in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not reasonably acceptable to the Committee.

8. Nonassignability . The Stock Option is not assignable or transferable by the Participant except by will or by the laws of descent and distribution.

11. Incentive Stock Option . Subject to the provisions of the Plan, the Stock Option is intended to be an Incentive Stock Option. To the extent the number of Optioned Shares exceeds the limit set forth in Section 6.3 of the Plan, such Optioned Shares shall be deemed granted pursuant to a Nonqualified Stock Option. Unless otherwise indicated by the Participant in the notice of exercise pursuant to Section 7 , upon any exercise of this Stock Option, the number of exercised Optioned Shares that shall be deemed to be exercised pursuant to an Incentive Stock Option shall equal the total number of Optioned Shares so exercised multiplied by a fraction, (i) the numerator of which is the number of unexercised Optioned Shares that could then be exercised pursuant to an Incentive Stock Option, and (ii) the denominator of which is the then total number of unexercised Optioned Shares.

12. Disqualifying Disposition . In the event that Common Stock acquired upon exercise of this Stock Option is disposed of by the Participant in a “Disqualifying Disposition,” such Participant shall notify the Company in writing within thirty (30) days after such disposition of the date and terms of such disposition. For purposes hereof, “ Disqualifying Disposition ” shall mean a disposition of Common Stock that is acquired upon the exercise of this Stock Option (and that is not deemed granted pursuant to a Nonqualified Stock Option under Section 11 ) prior to the expiration of either two (2) years from the Date of Grant of this Stock Option or one (1) year from the transfer of shares to the Participant pursuant to the exercise of the Stock Option.

13. Voting . The Participant, as record holder of some or all of the Optioned Shares following exercise of this Stock Option, has the exclusive right to vote, or consent with respect to, such Optioned Shares until such time as the Optioned Shares are transferred in accordance with this Agreement; provided , however , that this Section shall not create any voting right where the holders of such Optioned Shares otherwise have no such right.

14. Specific Performance . The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

15. Participant’s Representations . Notwithstanding any of the provisions hereof, the Participant hereby agrees that he or she will not exercise the Stock Option granted hereby, and that the Company will not be obligated to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. Any determination in this connection by the Company shall be final, binding, and conclusive. The obligations of the Company and the rights of the Participant are subject to all Applicable Laws, rules, and regulations.

16. Investment Representation . Unless the shares of Common Stock are issued to the Participant in a transaction registered under applicable federal and state securities laws, by his or her execution hereof, the Participant represents and warrants to the Company that all Common Stock which may be purchased hereunder will be acquired by the Participant for investment purposes for his or her own account and not with any intent for resale or distribution in violation of federal or state securities laws. Unless the Common Stock is issued to him or her in a transaction registered under the applicable federal and state securities laws, all certificates issued with respect to the Common Stock shall bear an appropriate restrictive investment legend and shall be held indefinitely, unless they are subsequently registered under the applicable federal and state securities laws or the Participant obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel, that such registration is not required.

17. Participant’s Acknowledgments . The Participant acknowledges that a copy of the Plan has been made available for his or her review by the Company, and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Stock Option subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement.

18. Law Governing . This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware (excluding any conflict of laws rule or principle of Delaware law that might refer the governance, construction, or interpretation of this Agreement to the laws of another state).

19. No Right to Continue Employment . Nothing herein shall be construed to confer upon the Participant the right to continue in the employment of the Company or interfere with or restrict in any way the right of the Company to discharge the Participant at any time.

20. Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

21. Covenants and Agreements as Independent Agreements . Each of the covenants and agreements that is set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

22. Entire Agreement . This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.

23. Parties Bound . The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein.

24. Modification . No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties. Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by the Plan.

25. Headings . The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

26. Gender and Number . Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

27. Notice . Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

a. Notice to the Company shall be addressed and delivered as follows:

Snap Interactive, Inc.

320 W 37 ^th Street, 13 ^th Floor

New York, NY 10018

Attn:

Facsimile:

b. Notice to the Participant shall be addressed and delivered as set forth on the signature page.

28. Tax Requirements . The Participant is hereby advised to consult immediately with his or her own tax advisor regarding the tax consequences of this Agreement. The Company or, if applicable, any Subsidiary (for purposes of this Section 28 , the term “ Company ” shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any Federal, state, local, or other taxes required by law to be withheld in connection with this Award. The Company may, in its sole discretion, also require the Participant receiving shares of Common Stock issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to this Award. Such payments shall be required to be made when requested by the Company and may be required to be made prior to the delivery of any certificate representing shares of Common Stock. Such payment may be made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the exercising Participant to the Company of shares of Common Stock that the Participant has not acquired from the Company within six (6) months prior to the date of exercise, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares to be delivered upon the exercise of the Stock Option, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; (iv) if the Company, in its sole discretion, so consents in writing, arrange for the sale of a number of shares to be delivered upon the exercise of the Stock Option (on the Participant’s behalf and at his or her direction pursuant to a written authorization) with an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (v) any combination of (i), (ii), (iii), or (iv). The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.

* * * * * * *

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Signature Page Follows. ]

	COMPANY:

	SNAP INTERACTIVE, INC.

	By:
	Name:
	Title:

	PARTICIPANT:


	Signature

	Name:
	Address:

Signature Page to Incentive Stock Option Agreement

Exhibit 10.4

FORM OF RESTRICTED STOCK AWARD AGREEMENT

SNAP INTERACTIVE, INC.

2016 LONG-TERM INCENTIVE PLAN

1. Grant of Award . Pursuant to the Snap Interactive, Inc. 2016 Long-Term Incentive Plan (the “ Plan ”) for Employees, Contractors, and Outside Directors of Snap Interactive, Inc., a Delaware corporation (the “ Company ”), the Company grants to

_________________________________

(the “ Participant ”)

an Award of Restricted Stock in accordance with Section 6.4 of the Plan. The number of shares of Common Stock awarded under this Restricted Stock Award Agreement (this “ Agreement ”) is _________ shares (the “ Awarded Shares ”). The “ Date of Grant ” of this Award is ______________, 20___.

2. Subject to Plan . This Agreement is subject to the terms and conditions of the Plan, and the terms of the Plan shall control to the extent not otherwise inconsistent with the provisions of this Agreement. The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. This Agreement is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

3. Vesting . Except as specifically provided in this Agreement and subject to certain restrictions and conditions set forth in the Plan, the Awarded Shares shall vest as follows:

a. ____________________ of the total Awarded Shares shall vest on _________________________, provided the Participant is employed by (or if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

b. ____________________ of the total Awarded Shares shall vest on _________________________, provided the Participant is employed by (or if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

c. ____________________ of the total Awarded Shares shall vest on _________________________, provided the Participant is employed by (or if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

d. ____________________ of the total Awarded Shares shall vest on _________________________, provided the Participant is employed by (or if the Participant is a Contractor or an Outside Director, is providing services to) the Company or a Subsidiary on that date.

Notwithstanding the foregoing, upon a Change in Control, (i) fifty percent (50%) of the then unvested Awarded Shares immediately shall vest on the date of the Change in Control; and (ii) the remaining fifty percent (50%) of the unvested Awarded Shares shall vest on the earlier of (A) the original date such Awarded Shares would have vested under Sections 3.a.-[d.] above, or (B) equally on the first and second anniversary of the effective date of the Change in Control.

4. Forfeiture of Awarded Shares . Awarded Shares that are not vested in accordance with Section 3 shall be forfeited on the date of the Participant’s Termination of Service. Upon forfeiture, all of the Participant’s rights with respect to the forfeited Awarded Shares shall cease and terminate, without any further obligations on the part of the Company. Certificates for Awarded Shares forfeited under the provisions of the Plan and this Agreement shall be promptly returned to the Company by the forfeiting Participant.

5. Restrictions on Awarded Shares . Subject to the provisions of the Plan and the terms of this Agreement, from the Date of Grant until the date the Awarded Shares are vested in accordance with Section 3 and are no longer subject to forfeiture in accordance with Section 4 (the “ Restriction Period ”), the Participant shall not be permitted to sell, transfer, pledge, hypothecate, margin, assign or otherwise encumber any of the Awarded Shares. Except for these limitations, the Committee may in its sole discretion, remove any or all of the restrictions on such Awarded Shares whenever it may determine that, by reason of changes in applicable laws or changes in circumstances after the date of this Agreement, such action is appropriate.

6. Legend . The following legend shall be placed on all certificates issued representing Awarded Shares:

On the face of the certificate:

“Transfer of this stock is restricted in accordance with conditions printed on the reverse of this certificate.”

On the reverse:

“The shares of stock evidenced by this certificate are subject to and transferable only in accordance with that certain Snap Interactive, Inc. 2016 Long-Term Incentive Plan, a copy of which is on file at the principal office of the Company in New York, New York. No transfer or pledge of the shares evidenced hereby may be made except in accordance with and subject to the provisions of said Plan. By acceptance of this certificate, any holder, transferee or pledgee hereof agrees to be bound by all of the provisions of said Plan.”

The following legend shall be inserted on a certificate evidencing Common Stock issued under the Plan if the shares were not issued in a transaction registered under the applicable federal and state securities laws:

“Shares of stock represented by this certificate have been acquired by the holder for investment and not for resale, transfer or distribution, have been issued pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered for sale, sold or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon an opinion of counsel satisfactory to the Company.”

All Awarded Shares owned by the Participant shall be subject to the terms of this Agreement and shall be represented by a certificate or certificates bearing the foregoing legend.

7. Delivery of Certificates . Certificates for Awarded Shares free of restriction under this Agreement shall be delivered to the Participant promptly after, and only after, the Restriction Period has expired without forfeiture pursuant to Section 4 . In connection with the issuance of a certificate for Restricted Stock, the Participant shall endorse such certificate in blank or execute a stock power in a form satisfactory to the Company in blank and deliver such certificate and executed stock power to the Company.

8. Rights of a Stockholder . Except as provided in Section 4 and Section 5 above, the Participant shall have, with respect to his or her Awarded Shares, all of the rights of a stockholder of the Company, including the right to vote the shares, and the right to receive any dividends thereon, subject to the provisions of this Section 8 . Any stock dividends paid with respect to Awarded Shares shall at all times be treated as Awarded Shares and shall be subject to all restrictions placed on such Awarded Shares; any such stock dividends paid with respect to such Awarded Shares shall vest as the related Awarded Shares become vested. Any cash dividends paid with respect to unvested Awarded Shares shall at all times be subject to the provisions of this Agreement (including the vesting and forfeiture provisions set forth above); any such cash dividends paid with respect to such unvested Awarded Shares shall vest as such Awarded Shares become vested, and shall be paid to the Participant on the date the Awarded Shares to which such cash dividends relate become vested.

9. Voting . The Participant, as record holder of the Awarded Shares, has the exclusive right to vote, or consent with respect to, such Awarded Shares until such time as the Awarded Shares are transferred in accordance with this Agreement; provided , however , that this Section 9 shall not create any voting right where the holders of such Awarded Shares otherwise have no such right.

10. Adjustment to Number of Awarded Shares . The number of Awarded Shares shall be subject to adjustment in accordance with Articles 11-13 of the Plan.

11. Specific Performance . The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

12. Participant’s Representations . Notwithstanding any of the provisions hereof, the Participant hereby agrees that he or she will not acquire any Awarded Shares, and that the Company will not be obligated to issue any Awarded Shares to the Participant hereunder, if the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. Any determination in this connection by the Company shall be final, binding, and conclusive. The rights and obligations of the Company and the rights and obligations of the Participant are subject to all Applicable Laws, rules, and regulations.

13. Investment Representation . Unless the Awarded Shares are issued in a transaction registered under applicable federal and state securities laws, by his or her execution hereof, the Participant represents and warrants to the Company that all Common Stock which may be purchased and/or received hereunder will be acquired by the Participant for investment purposes for his or her own account and not with any intent for resale or distribution in violation of federal, or state securities laws. Unless the Common Stock is issued to him or her in a transaction registered under the applicable federal and state securities laws, all certificates issued with respect to the Common Stock shall bear an appropriate restrictive investment legend and shall be held indefinitely, unless they are subsequently registered under the applicable federal, and state securities laws or the Participant obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel, that such registration is not required.

14. Participant’s Acknowledgments . The Participant acknowledges that a copy of the Plan has been made available for his or her review by the Company, and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement.

15. Law Governing . This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware (excluding any conflict of laws rule or principle of Delaware law that might refer the governance, construction, or interpretation of this Agreement to the laws of another state).

16. No Right to Continue Service or Employment . Nothing herein shall be construed to confer upon the Participant the right to continue in the employ or to provide services to the Company or any Subsidiary, whether as an Employee or as a Contractor or as an Outside Director, or interfere with or restrict in any way the right of the Company or any Subsidiary to discharge the Participant as an Employee, Contractor, or Outside Director at any time.

17. Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

18. Covenants and Agreements as Independent Agreements . Each of the covenants and agreements that is set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

19. Entire Agreement . This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.

20. Parties Bound . The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein. No person shall be permitted to acquire any Awarded Shares without first executing and delivering an agreement in the form satisfactory to the Company making such person or entity subject to the restrictions on transfer contained herein.

21. Modification . No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties. Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by the Plan.

22. Headings . The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

23. Gender and Number . Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

24. Notice . Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

a. Notice to the Company shall be addressed and delivered as follows:

Snap Interactive, Inc.

320 W 37 ^th Street, 13 ^th Floor

New York, NY 10018

Attn:

Fax:

b. Notice to the Participant shall be addressed and delivered as set forth on the signature page.

25. Tax Requirements . The Participant is hereby advised to consult immediately with his or her own tax advisor regarding the tax consequences of this Agreement, the method and timing for filing an election to include this Agreement in income under Section 83(b) of the Code, and the tax consequences of such election. By execution of this Agreement, the Participant agrees that if the Participant makes such an election, the Participant shall provide the Company with written notice of such election in accordance with the regulations promulgated under Section 83(b) of the Code. The Company or, if applicable, any Subsidiary (for purposes of this Section 25 , the term “ Company ” shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any Federal, state, local, or other taxes required by law to be withheld in connection with this Award. The Company may, in its sole discretion, also require the Participant receiving shares of Common Stock issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to this Award. Such payments shall be required to be made when requested by the Company and may be required to be made prior to the delivery of any certificate representing shares of Common Stock. Such payment may be made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the Participant to the Company of shares of Common Stock that the Participant has not acquired from the Company within six (6) months prior thereto, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares to be delivered upon the vesting of this Award, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; (iv) if the Company, in its sole discretion, so consents in writing, arrange for the sale of a number of shares to be delivered upon the vesting of this Award (on the Participant’s behalf and at his or her direction pursuant to a written authorization) with an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (v) any combination of (i), (ii), (iii), or (iv). The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.

* * * * * * * * * *

[ Remainder of Page Intentionally Left Blank.

Signature Page Follows ]

	COMPANY:

	SNAP INTERACTIVE, INC.

	By:
	Name:
	Title:

	PARTICIPANT:


	Signature

	Name:
	Address:

Signature Page to Restricted Stock Option Agreement

Exhibit 10.5

Execution Version

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (the “Agreement”) is made as of the 13th day of July, 2016, by and among Sigma Opportunity Fund II, LLC, a Delaware limited liability company (the “Fund”), Sigma Capital Advisors, LLC, a Delaware limited liability company (“Advisors” and together with the Fund, the “Holders”), and SNAP Interactive, Inc., a Delaware corporation (the “Company”).

WHEREAS , the Fund is the record owner of warrants (the “Fund Warrants”) to purchase 10,500,000 shares of common stock, par value $.001 per share, of the Company (“Common Stock”);

WHEREAS , Advisors is the record owner of warrants (the “Advisors Warrants” and together with the Fund Warrants, the “Warrants”) to purchase 4,500,000 shares of Common Stock;

WHEREAS , the Holders desire to exchange the Warrants for an aggregate of 2,000,000 shares of Common Stock, and the Company has agreed to issue such shares of Common Stock to the Holders in exchange for the Warrants, upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE , in consideration of the mutual promises, covenants and agreements herein, and intending to be legally bound hereby, the parties agree as follows:

1.	Exchange of Shares.

Exchange . On the terms and subject to the conditions set forth in this Agreement, on the date hereof (i) the Holders will surrender for cancellation the Warrants and (ii) the Company will issue to the Holders an aggregate of 2,000,000 shares of Common Stock (the “Shares”), 1,400,000 of which shall be issued to the Fund and 600,000 of which shall be issued to Advisors (the “Exchange”). The Holders acknowledge and agree that upon completion of the Exchange, the Warrants shall be terminated and cancelled in full and rendered null and void without any additional action on the part of the Company or the Holders, and the Holders shall have no surviving right, title or interest in or to the Warrants or any Common Stock purchasable thereunder.

Piggy-Back Registrations . If at any time the Company shall determine to prepare and file with the commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of 1933, as amended (the “Securities Act”), of any of its equity securities, other than on Form S-4 or Form S-8 or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, the Company shall send to the Holders written notice of such determination and, if within ten (10) days after receipt of such notice, such Holder shall so request in writing, the Company shall include in such registration statement all or any part of the Shares such Holder requests to be registered, except that if, in connection with any underwritten public offering for the account of the Company the managing underwriter(s) thereof shall impose a limitation on the number of Shares which may be included in the registration statement because, in such underwriter(s)’ reasonable judgment, such limitation is necessary for marketing purposes or to effect an orderly public distribution, then the Company shall be obligated to include in such registration statement only such limited portion of the Shares, if any, with respect to which such Holder has requested inclusion hereunder and the managing underwriter(s) has approved. Any exclusion of Shares shall be made pro rata among the Holders seeking to include Shares and any other holders including securities in the registration statement, in proportion to the number of Shares sought to be included by such persons. Notwithstanding anything in this Agreement to the contrary, the registration rights contemplated by this section shall expire automatically 180 days following the consummation of an M&A Event (as defined in the Lockup Agreement between the Fund and the Company, dated as of the date hereof).

Removal of Legend . Not later than three (3) trading days after request from the Holders (the “Share Delivery Date”) on or after the date that the Shares have been sold by the Holders pursuant to Rule 144 (“Rule 144”) promulgated under the Securities Act, or a currently effective registration statement, the Company shall issue to the Holders Shares that are free of restrictive legends and trading restrictions (other than those which may then be required by law or separate agreement between the Company and the Holders). Such Shares will be delivered electronically through the Depository Trust Company or another established clearing corporation performing similar functions.

If the Company fails for any reason to deliver to the Holders the Shares as described above, the Company shall pay to the Holders, in cash, as liquidated damages and not as a penalty, for each $1,000 of Share value (calculated based upon closing price of the Common Stock on the date of notice from the Holders and the number of Shares for which the legend is requested to be removed), $10 per trading day (increasing to $20 per trading day on the fifth (5th) trading day after such liquidated damages begin to accrue) for each trading day following such Share Delivery Date until such Shares are delivered. Nothing herein shall limit the Holders’ right to pursue actual damages for the Company’s failure to deliver Shares without restrictive legends and trading restrictions (other than those which may then be required by law or separate agreement between the Company and the Holders) within the period specified herein, and the Holders shall have the right to pursue all remedies available to them hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holders from seeking to enforce damages under applicable law.

Buy-in Obligation . In addition to such Holders’ other available remedies, if the Company fails to issue and deliver (or cause to be delivered) to a Holder by the Share Delivery Date a certificate representing the Shares so delivered to the Company by such Holder that is free from all restrictive and other legends and if after the Share Delivery Date such Holder is required by such Holder’s brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of all or any portion of the number of shares of Common Stock that such Holder anticipated receiving from the Company without any restrictive legend, then the Company shall pay in cash to the Holder an amount equal to the excess of such Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number of Shares that the Company was required to deliver to such Holder by the Share Delivery Date multiplied by (B) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions).

Consent . The Holders acknowledge that the Company is party to (i) the Warrants, (ii) the 12% Senior Secured Convertible Note in the principal amount of $3,000,000 issued to the Fund on February 13, 2015 (the “Note”), (iii) the Securities Purchase Agreement, dated as of February 13, 2015, between the Fund and the Company (the “SPA”) and (iv) the Advisory Services Agreement, dated February 13, 2015, by and between the Company and Advisors (the “Advisory Agreement” and collectively with the Warrants, the Note and the SPA, the “Private Placement Documents”). Notwithstanding anything else in the Private Placement Documents to the contrary, each of the Holders consents to the Company’s entry into this agreement and the fulfillment of the Company’s obligations hereunder and waives any claim of breach, violation or default or right to adjustment under the Private Placement Documents as a result of the Company’s entry into this agreement and the fulfillment of the Company’s obligations hereunder.

2.	Representations and Warranties.

(a)

Representations and Warranties of the Holders . Each of the Holders hereby represent and warrant to the Company, as follows:

	(i)	Organization and Qualification . Each of the Holders is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation.
	(ii)	Authorization; No Restrictions, Consents or Approvals. Each of the Holders has full power and authority to enter into and perform its obligations under this Agreement. This Agreement has been duly executed by each of the Holders and constitutes the legal, valid, binding and enforceable obligation of each of the Holders, enforceable against each of the Holders in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general principles of equity.

	(iii)	Title to Warrants . All of the Warrants are owned free and clear of all liens, pledges, encumbrances, changes, restrictions or known claims of any kind, nature or description. No Holder has, in whole or in part, (i) assigned, transferred, hypothecated, pledged or otherwise disposed of the Warrants or its rights in such Warrants or (ii) given any person or entity any transfer order, power of attorney or other authority of any nature whatsoever with respect to such Warrants which would limit the Holder’s power to transfer its Warrants hereunder.

(iv)

Investment Representations .

(A)

Each of the Holders understands that the Shares have not been registered under the Securities Act or any other applicable securities laws. Each of the Holders also understands that the Shares are being offered and issued pursuant to an exemption from the registration requirements of the Securities Act under Section 3(a)(9) thereof. Each of the Holders acknowledges that the Company will rely on such Holder’s representations, warranties and certifications set forth below for purposes of determining such Holder’s suitability as an investor in the Shares and for purposes of confirming the availability of the Section 3(a)(9) exemption from the registration requirements of the Securities Act.

(B)

Each of the Holders has received all the information Holder considers necessary or appropriate for deciding whether to acquire the Shares. Each of the Holders understands the risks involved in an investment in the Shares. Each of the Holders further represents that such Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Shares and the business, properties, prospects and financial condition of the Company and to obtain such additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to such Holder or to which such Holder had access.

(C)

Each of the Holders further represents that it is an “accredited investor” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act.

(D)

Each of the Holders is acquiring the Shares for its own account for investment purposes only and not with a view towards resale or “distribution” (within the meaning of the Securities Act) of any part of the Shares.

(E)

Each of the Holders understands that the Shares may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities laws or pursuant to an exemption therefrom, and in each case in compliance with the conditions set forth in this Agreement. Each of the Holders acknowledges and is aware that the Shares may not be sold pursuant to Rule 144 unless certain conditions are met and until such Holder has held the Shares for the applicable holding period under Rule 144.

(F)

Each of the Holders acknowledges and agrees that each certificate representing the Shares shall bear a legend substantially in the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.”

(G)

No Holder has been solicited by anyone on behalf of the Company to enter into this transaction.

(v)

No Reliance . No Holder has relied on, and no Holder is relying on, any representations, warranties or other assurances regarding the Company or the Shares other than the representations and warranties expressly set forth in this Agreement.

(b)

Representations and Warranties of the Company. The Company hereby represents and warrants to each of the Holders as follows:

(i)

Organization and Qualification . The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation.

(ii)

Authorization; No Restrictions, Consents or Approvals . The Company has full power and authority to enter into and perform its obligations under this Agreement. This Agreement has been duly executed by the Company and constitutes the legal, valid, binding and enforceable obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general principles of equity.

		Except as would not be reasonably expected to materially adversely affect the Company’s ability to perform its obligations to complete the transactions contemplated herein or otherwise have a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, the execution and delivery of this Agreement and the consummation by the Company of the transactions contemplated herein do not (A) conflict with or violate any of the terms of the articles of incorporation and bylaws of the Company or any applicable law relating to the Company, (B) conflict with, or result in a breach of any of the terms of, or result in the acceleration of any indebtedness or obligations under, any material agreement, obligation or instrument by which the Company is bound or to which any property of the Company is subject, or constitute a default thereunder, other than those material agreements, obligations or instruments for which the Company has obtained consent for the transactions contemplated under this Agreement (including, without limitation, the consent given by the Holders with respect to the Private Placement Documents in Section 1 herein), (C) result in the creation or imposition of any lien on any of the assets of the Company, (D) constitute an event permitting termination of any material agreement or instrument to which the Company is a party or by which any property or asset of the Company is bound or affected, pursuant to the terms of such agreement or instrument, other than those material agreements or instruments for which the Company has obtained consent for the transactions contemplated under this Agreement (including, without limitation, the consent given by the Holders with respect to the Private Placement Documents in Section 1 herein) or (E) conflict with, or result in or constitute a default under or breach or violation of or grounds for termination of, any license, permit or other governmental authorization to which the Company is a party or by which the Company may be bound, or result in the violation by the Company of any laws to which the Company may be subject.

		No authorization, consent or approval of, notice to, or filing with, any public body or governmental authority or any other person is necessary or required in connection with the execution and delivery by the Company of this Agreement or the performance by the Company of its obligations hereunder.

(iii)

Issuance of Shares . The issuance of the Shares has been duly authorized and, upon issuance in accordance with the terms hereof, shall be validly issued and free from all taxes, liens and charges with respect to the issue thereof, and the Shares shall be fully paid and non-assessable with each of the Holders being entitled to all rights accorded to a holder of Common Stock.

3.	General Provisions.

(a)

Governing Law . This Agreement is to be construed in accordance with and governed by the internal laws of the State of New York without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of New York to the rights and duties of the parties.

(b)

Severability . If any provision of this Agreement is held by a court or other tribunal of competent jurisdiction to be invalid or unenforceable for any reason, the remaining provisions shall continue in full force and effect without being impaired or invalidated in any way, and the parties agree to replace any invalid provision with a valid provision which most closely approximates the intent and economic effect of the invalid provision.

(c)

Waiver . The waiver by either party of a breach of or default under any provision of this Agreement shall not be effective unless in writing and shall not be construed as a waiver of any subsequent breach of or default under the same or any other provision of this Agreement. Further, any failure or delay on the part of either party to exercise or avail itself of any right or remedy that it has or may have hereunder shall not operate as a waiver of any such right or remedy or preclude other or further exercise thereof or of any other right or remedy.

(d)

Notices . Any notices required or permitted hereunder shall be given to the appropriate party at the address specified below or at such other address as the party may specify in writing. Such notice shall be deemed given: (i) if delivered personally, upon delivery as evidenced by delivery records; (ii) if sent by email or facsimile, upon confirmation of receipt; (iii) if sent by certified or registered mail, postage prepaid, five (5) days after the date of mailing; or (iv) if sent by nationally recognized express courier, two (2) business days after date of placement with such courier.

If to the Holders:

c/o Sigma Capital Advisors, LLC

800 Third Avenue

17 ^th Floor

New York, NY 10022

Facsimile: ________________

If to the Company:

SNAP Interactive, Inc.

320 W. 37 ^th Street

New York, NY 10018

Attn: Alexander Harrington

Facsimile: _________________

(e)

No Third Party Beneficiaries . Nothing in this Agreement shall be construed to confer any rights or benefits upon any person other than the parties hereto, and no other person shall have any rights or remedies hereunder.

(f)

Public Announcements . The Holders and the Company will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to this Agreement and the transaction contemplated hereby and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law.

	(g)	Counterparts . This Agreement may be executed in one or more counterparts (including electronic (PDF) or fax counterparts) each of which shall be deemed an original and all of which shall be taken together and deemed to be one instrument.

	(h)	Fees and Expenses . The Company shall pay all reasonable fees and expenses of the Holders incurred in connection with the negotiation, preparation, execution, delivery and enforcement of this Agreement.

	(i)	Further Assurances . The Holders and the Company hereby agree to execute and deliver, or cause to be executed and delivered, such other documents, instruments and agreements, and take such other actions, as either party may reasonably request in connection with the transactions contemplated by this Agreement.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

	HOLDER: Sigma Opportunity Fund II, LLC

	/s/ Thom Waye
	(Signature of Signatory)

	Thom Waye
	(Print Name of Signatory)

	Manager
	(Title of Signatory)

	HOLDER: Sigma Capital Advisors, LLC

	/s/ Thom Waye
	(Signature of Signatory)

	Thom Waye
	(Print Name of Signatory)

	Manager
	(Title of Signatory)

	COMPANY:

	SNAP INTERACTIVE, INC.

	By:	/s/ Alexander Harrington
		Name: Alex Harrington
		Title: CEO

Exhibit 10.6

THIS SUBORDINATED MULTIPLE ADVANCE TERM NOTE IS SUBJECT TO THE SUBORDINATION PROVISIONS SET FORTH IN SECTION 7 HEREOF UNDER WHICH THIS SUBORDINATED MULTIPLE ADVANCE TERM NOTE AND BORROWER’S OBLIGATIONS HEREUNDER ARE SUBORDINATED IN THE MANNER SET FORTH THEREIN TO THE PRIOR PAYMENT OF THE SENIOR DEBT TO THE HOLDERS OF SENIOR DEBT AND IS SUBJECT IN ALL RESPECTS TO THE TERMS AND PROVISIONS SET FORTH THEREIN .

July 18, 2016 (“ Closing Date ”)

$250,000.00

SUBORDINATED MULTIPLE ADVANCE TERM NOTE

THIS SUBORDINATED MULTIPLE ADVANCE TERM NOTE is a duly authorized and validly issued Note of Snap Interactive, Inc., a Delaware corporation (the “ Borrower ”), having its principal place of business at 462 Seventh Avenue, 4th Floor, New York, New York 10018 (this “ Note ”).

FOR VALUE RECEIVED, the Borrower promises to pay to A.V.M. Software, Inc., a New York corporation (the “ Lender ”), or shall have paid pursuant to the terms hereunder, the principal sum of $250,000.00 (or such lesser amount as may be outstanding) on July 18, 2017 or such earlier date as this Note is required or permitted to be repaid as provided hereunder (the “ Maturity Date ”), and to pay interest to the Lender on the then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

Section 1 . Definitions . For the purposes hereof, in addition to the terms defined elsewhere in this Note, the following terms shall have the following meanings:

“ Advance Request ” shall have the meaning set forth in Section 2(a).

“ Affiliate ” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

“ Bankruptcy Event ” means any of the following events: (a) the Borrower or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Borrower or any Significant Subsidiary thereof, (b) there is commenced against the Borrower or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within seventy-five (75) calendar days after commencement, (c) the Borrower or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Borrower or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within sixty (60) calendar days after such appointment, (e) the Borrower or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Borrower or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Borrower or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

“ Business Day ” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“ Cash Balance Requirement Minimum ” means (a) the amount by which the aggregate cash balance in the Borrower’s bank accounts on a rolling ten-Business Day average basis is below the Cash Balance Requirement (as such term is defined in the Senior Notes) or (b) the amount by which Borrower determines in its reasonable discretion (and provides reasonably detailed backup calculations thereof) that the aggregate cash balance in the Borrower’s bank accounts on a rolling ten-Business Day average basis would reasonably be expected to be below the Cash Balance Requirement (as such term is defined in the Senior Notes) at the conclusion of the applicable period of determination.

“ Change of Control Transaction ” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Borrower, by contract or otherwise) of in excess of 50% of the voting securities of the Borrower (other than by means of conversion or exercise of the Senior Notes and the securities issued together with the Senior Notes), (b) the Borrower merges into or consolidates with any other Person, or any Person merges into or consolidates with the Borrower and, after giving effect to such transaction, the stockholders of the Borrower immediately prior to such transaction own less than 50% of the aggregate voting power of the Borrower or the successor entity of such transaction, (c) the Borrower sells or transfers all or substantially all of its assets to another Person and the stockholders of the Borrower immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a three year period of all of the individuals who are members of the board of directors of Borrower (the “ Board of Directors ”) on the Closing Date which is not approved by the individuals who are members of the Board of Directors on the Closing Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by the members of the Board of Directors who are members on the Closing Date), or (e) the Borrower, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination); provided , however , that neither the Merger nor any of the transactions contemplated by the Merger Agreement shall be deemed a Change of Control Transaction.

“ Common Stock ” means the common stock of the Borrower, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

“ Common Stock Equivalents ” means any securities of the Borrower or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“ Default Rate ” means as of any date of determination, a rate per annum equal to the sum of (i) the Note Rate plus (ii) 2.00%.

“ Event of Default ” shall have the meaning set forth in Section 5(a).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ GAAP ” means United States generally accepted accounting principles applied on a consistent basis during the periods involved.

“ Insider Loans ” means one or more loans to the Borrower or a Subsidiary by an executive officer or director or relative of an executive officer or director, provided that such loans (i) do not exceed $300,000 in the aggregate, (ii) mature on a date that is later than ninety (90) days following the Maturity Date, as the same may be amended or extended from time to time, (ii) are not convertible into Common Stock or Common Stock Equivalents, (iii) no shares of Common Stock or Common Stock Equivalents are issued in connection with such Insider Loans, (iv) are unsecured and (v) do not require cash or other payment of principal or interest for at least ninety (90) days after the Maturity Date, as the same may be amended or extended from time to time.

“ Junior Indebtedness ” means any and all indebtedness, obligations and liabilities of Borrower to Lender under this Note.

“ Liens ” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

“ Merger ” shall have the meaning set forth in the Merger Agreement.

“ Merger Agreement ” means that certain Agreement and Plan of Merger to be entered into between Borrower and Lender.

“ New York Courts ” shall have the meaning set forth in Section 6(d).

“ Note Rate ” shall have the meaning set forth in Section 2(b).

“ Note Register ” shall have the meaning set forth in Section 2(c).

“ Paid in Full ” and “ Payment in Full ” means, with respect to any and all of the Senior Debt, the payment in full thereof in cash all in accordance with the terms of the Senior Debt documents.

“ Permitted Indebtedness ” means (a) the indebtedness of the Borrower that is outstanding on the Closing Date and set forth on Schedule 4(a) hereof and, upon the prior written approval of Lender, any refinancing, renewal, extension, replacement, restructuring or modification of such indebtedness, (b) the indebtedness evidenced by this Note, (c) the indebtedness evidenced by then Senior Notes, (d) lease obligations and purchase money indebtedness of up to $200,000, in the aggregate, incurred in connection with the acquisition of capital assets and lease obligations with respect to newly acquired or leased assets, (e) indebtedness of up to an aggregate of $100,000 that (i) matures on a date that is later than 90 days following the Maturity Date, as the same may be amended or extended from time to time, (ii) is unsecured and (iii) is not convertible into Common Stock or Common Stock Equivalents and (f) subject to Section 4(h), Insider Loans.

“ Permitted Lien ” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Borrower) have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Borrower’s business, such as carriers’, warehousemens’ and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Borrower’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Borrower and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien, (c) Liens incurred in connection with Permitted Indebtedness under clause (c) thereunder, (d) Liens incurred in connection with Permitted Indebtedness under clause (d) thereunder, provided that such Liens are not secured by assets of the Borrower or its Subsidiaries other than the assets so acquired or leased.

“ Person ” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“ Refinancing ” means, in respect of the Senior Debt, to refinance, defer, extend, renew, refund, repay or to issue other debt in exchange or replacement for such indebtedness; provided , however , that such Refinancing shall not incorporate any provisions that would not be permitted pursuant to Section 7(g) in connection with an amendment to the Senior Notes.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ Security Agreement ” has the meaning set forth in Section 7(j).

“ Security Agreement Conditions ” means the following conditions: (a) the Senior Debt is Paid in Full or is converted in full, (b) the Merger has not occurred, and (c) there are outstanding advances under the Junior Indebtedness.

“ Senior Debt ” means (a) all principal, premium (if any), interest, fees, charges, expenses (including but not limited to expenses in connection with claims and litigation), damages, indemnities, reimbursement obligations, guarantees and all other amounts payable under or in respect of the Senior Notes and (b) any modifications, amendments, refunding, Refinancing, renewals, or extensions of any indebtedness, liability, or obligation described in clause (a) above.

“ Senior Lender ” means” Sigma Opportunity Fund II, LLC or its registered assigns in its capacity as Holder under the Senior Notes and their respective successors and/or assigns and each of the other financial institutions from time to time party to the Senior Notes.

“ Senior Notes ” means Borrower’s 12% Senior Secured Convertible Notes due February 13, 2017, in the original aggregate principal amount of $3,000,000, as such Notes may be modified, amended, renewed, extended, restated, or replaced from time to time in accordance with the terms hereof.

“ Subsidiary ” means any subsidiary of the Borrower and shall, where applicable, also include any direct or indirect subsidiary of the Borrower formed or acquired after the date hereof.

“ Transaction Documents ” means this Note and all exhibits and schedules hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

Section 2 . Borrowing Procedure; Payment Terms .

(a) Borrowing Procedure. Subject to the terms and conditions of this Note, at any time and from time to time on and the date hereof and prior to the Maturity Date, Lender shall, pursuant to the terms hereof, make one or more credit advances to the Borrower in an aggregate principal amount at any time outstanding up to but not exceeding $250,000.00; provided that as of the date of any advance, (x) no event shall have occurred and be continuing that would constitute an Event of Default, (y) the Borrower shall not be in breach of Section 2.1 or Section 2.2 under the heading titled “Exclusivity” in that certain Letter of Intent dated as of June 17, 2016 between Borrower and Lender, and (z) no material breach of the covenants under the Merger Agreement shall have occurred and be continuing (subject to any grace or cure period provided in the Merger Agreement). No principal amount repaid may be reborrowed. The Borrower shall give Lender notice of each advance in writing in substantially the same form as Exhibit A attached hereto (each an “ Advance Request ”) containing the information specified therein and delivered (by mail, fax or electronic mail) to Lender no later than 1:00 p.m. (New York City time) at least two (2) Business Days prior to on the date on which the advance is desired to be funded and Lender shall fund such advance on the date set forth in such Advance Request. Lender at its option may accept telephonic requests for such advances. Any telephonic request for an advance by the Borrower shall be promptly confirmed by submission of a properly completed Advance Request to Lender. Each Advance Request shall include the following: (i) aggregate amount of the requested advance (which amount shall not exceed the applicable Cash Balance Requirement Minimum) and (ii) the date for the requested advance.

(b) Payment of Interest .

(i) Interest Generally . The Borrower shall pay interest to the Lender on the then outstanding principal balance of this Note at the rate of 8.0% per annum (the “ Note Rate ”), payable on the Maturity Date, in cash.

(ii) Default Rate . Upon the occurrence and during the continuance of an Event of Default, the principal amount of this Note shall bear interest at the Default Rate.

(c) Interest Calculations . Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Closing Date until payment in full of the outstanding principal, together with all accrued and unpaid interest and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Borrower regarding registration and transfers of this Note (the “ Note Register ”).

(d) Prepayments.

(i) Optional Prepayment at Election of Borrower . To the extent permitted by Section 7 hereof, the Borrower shall have the right to prepay, at any time and from time to time upon at least one (1) Business Day prior written notice to Lender, without fee, premium or penalty, all or any portion of the outstanding principal balance hereof; provided , however , that such prepayment shall also include any and all accrued but unpaid interest on the amount of principal being so prepaid through and including the date of prepayment, plus any other sums which have become due to Lender under the other Transaction Documents on or before the date of prepayment, but which have not been fully paid.

(ii) Mandatory Prepayment . To the extent permitted by Section 7 hereof, on the date of receipt by Borrower of any cash proceeds from (A) a capital contribution to, or the issuance of any capital stock of, Borrower (other than with respect to the Merger), or (B) from the incurrence of any indebtedness, Borrower shall prepay the outstanding principal balance hereof in an aggregate amount up to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, in each case, paid to non-Affiliates, including reasonable legal fees and expenses.

Section 3 . Reliance on Note Register.

(a) Reliance on Note Register . Prior to due presentment for transfer to the Borrower of this Note, the Borrower and any agent of the Borrower may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Borrower nor any such agent shall be affected by notice to the contrary.

Section 4 . Negative Covenants . As long as any portion of this Note remains outstanding, unless the Lender shall have otherwise given prior written consent, the Borrower shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

(a) other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

(b) other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

(c) other than with respect to the Merger, amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially and adversely affects any rights of the Lender; it being understood and agreed provided that the Merger shall not be deemed to be materially and adversely affect any rights of the Lender;

(d) repay, repurchase or offer to repay, repurchase or otherwise acquire any shares of its Common Stock or Common Stock Equivalents other than as permitted or required under the Senior Notes or the Merger;

(e) to the extent permitted by Section 7 hereof, repay, repurchase or offer to repay, repurchase or otherwise acquire any indebtedness, other than this Note or the Senior Note, other than (i) regularly scheduled principal and interest payments as such terms are in effect as of the Closing Date and (ii) regularly scheduled principal and interest payments in respect of Permitted Indebtedness;

(f) pay cash dividends or distributions on any equity securities of the Borrower;

(g) other than with respect to the Merger, issue any Common Stock or Common Stock Equivalents pursuant to Section 3(a)(9) of the Securities Act (except such transaction exclusively with the original purchasers of the securities being exchanged) or Section 3(a)(10) of the Securities Act;

(h) enter into any transaction with any Affiliate of the Borrower, unless such transaction is made on an arm’s-length basis and expressly approved in writing by the Lender and a majority of the disinterested directors of the Borrower (even if less than a quorum otherwise required for board approval); provided , however , that (i) any extension or renewal of any currently existing arrangements with Affiliates listed on Schedule 4(h) hereof on substantially the same terms as in effect on the date hereof shall not require the Lender’s prior consent, and (ii) the Lender’s written consent to any Insider Loan shall not be unreasonably withheld, delayed or conditioned;

(i) transfer any assets of the Borrower or any domestic Subsidiary to SNAP Mobile Limited (or any successor thereto); or

(j) enter into any agreement with respect to any of the foregoing.

Section 5 . Events of Default.

(a) “ Event of Default ” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

(i) unless any such payment is prohibited pursuant to Section 7 hereof, any default in the payment of (A) the principal amount of any Note or (B) interest and other amounts owing to a Lender or an Affiliate of Lender on the Note or pursuant to any other Transaction Document, as and when the same shall become due and payable (whether on the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within three (3) Business Days;

(ii) the Borrower shall fail to observe or perform any other covenant or agreement contained in this Note or any other Transaction Document which failure is not cured, if possible to cure, within the earlier to occur of (A) 10 Business Days after notice of such failure sent by the Lender to the Borrower and (B) 10 Business Days after the Borrower has become or should have become aware of such failure;

(iii) a material default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Borrower or any Subsidiary is obligated (and not covered by clause (vi) below);

(iv) any representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Lender or any other Lender shall be untrue or incorrect in any material respect as of the date when made or deemed made;

(v) the Borrower or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

(vi) the Borrower or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $150,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

(vii) any monetary judgment, writ or similar final process shall be entered or filed against the Borrower, any Subsidiary or any of their respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of forty-five (45) calendar days; or

(viii) a Change of Control Transaction shall occur without the consent of Lender.

(b) Remedies Upon Event of Default . Subject to the provisions of Section 7 hereof, if any Event of Default has occurred and is continuing, then Lender may without notice terminate this Note or declare the Junior Indebtedness or any part thereof to be immediately due and payable, or both, and the same shall thereupon become immediately due and payable, without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by Borrower; provided , however , that upon the occurrence of an Event of Default under Section 5(a)(v), this Note shall automatically terminate, and the Junior Indebtedness shall become immediately due and payable, in each case without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by Borrower. In addition to the foregoing, if any Event of Default shall occur and be continuing, Lender may exercise all rights and remedies available to it in law or in equity, under the Transaction Documents, or otherwise.

Section 6 . Miscellaneous.

(a) Notices . Any and all notices or other communications or deliveries to be provided by the Lender hereunder, shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Borrower, at the address set forth above, or such other facsimile number, email address, or address as the Borrower may specify for such purposes by notice to the Lender delivered in accordance with this Section 6(a). Any and all notices or other communications or deliveries to be provided by the Borrower hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service addressed to each Lender at the following facsimile number or email address or address of the Lender at 122 East 42 ^nd Street, New York, New York 10017. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, (iii) the next Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.

(b) Absolute Obligation . Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Borrower, which is absolute and unconditional, to pay the principal of and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Borrower.

(c) Lost or Mutilated Note . If this Note shall be mutilated, lost, stolen or destroyed, the Borrower shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Borrower.

(d) Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “ New York Courts ”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

(e) Waiver; Amendment . Any waiver by the Borrower or the Lender of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Borrower or the Lender to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Borrower or the Lender must be in writing. Any provision of this Note may be waived by the Lender in writing, which waiver shall be binding on all of the Lender’s successors and assigns. Subject to Section 7, any provision of this Note may be amended by a written instrument executed by the Borrower and the Lender, which amendment shall be binding on all of the Lender’s successors and assigns.

(f) Severability . If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Borrower covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Borrower from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Borrower (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Lender, but will suffer and permit the execution of every such law as though no such law has been enacted.

(g) Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief . The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit either party’s right to pursue actual and consequential damages for any failure by the other party to comply with the terms of this Note. The Borrower covenants to the Lender that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Lender and shall not, except as expressly provided herein, be subject to any other obligation of the Borrower (or the performance thereof). Each party hereto acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the other party and that the remedy at law for any such breach may be inadequate. Each party hereto therefore agrees that, in the event of any such breach or threatened breach, the other party shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Borrower shall provide all information and documentation to the Lender that is requested by the Lender to enable the Lender to confirm the Borrower’s compliance with the terms and conditions of this Note.

(h) Next Business Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

(i) Headings . The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

(j) Notices . Promptly upon any officer of Borrower obtaining knowledge of any condition or event that constitutes an Event of Default, Borrower shall notify Lender of such Event of Default.

Section 7 . Subordination.

(a) Borrower covenants and agrees and Lender by its acceptance hereof likewise covenants and agrees that the Junior Indebtedness and the payment of the principal and interest in respect of the Junior Indebtedness each are hereby expressly made subordinate and subject in right of payment to the prior Payment in Full of the Senior Debt on the terms set forth herein. So long as the Payment in Full of the Senior Debt has not occurred, the Lender will not ask for, demand, sue for, take or receive (by way of voluntary prepayment, acceleration, set-off or counterclaim, foreclosure or other realization on security, dividends in bankruptcy or otherwise) any payment with respect to the Junior Indebtedness, and the Lender waives any such rights with respect to the Junior Indebtedness nor shall the Lender (i) commence any collection or enforcement action or exercise any remedy with respect to the Junior Indebtedness or (ii) exercise any rights of subrogation or other similar rights with respect to the Senior Debt. The foregoing notwithstanding, nothing contained herein shall impair, as between Borrower and Lender, the obligation of Borrower to pay to the Lender all amounts payable in respect of the Junior Indebtedness as and when the same shall become due and payable, provided such obligation remains subject to the terms and conditions set forth herein.

(b) In any insolvency or receivership proceeding or any other proceeding under any laws relating to the relief of debtors, readjustment of indebtedness, reorganizations, compositions or extensions which may be brought by or against Borrower and at any meeting of creditors of Borrower whether or not such meeting is held in a proceeding under any insolvency, bankruptcy or similar laws, the Lender shall retain the right to vote and otherwise act with respect to the Junior Indebtedness (including, without limitation, the right to vote to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, composition or extension); provided that the Lender shall not vote with respect to any such plan or take any other action in any way so as to contest or challenge (i) the validity, enforceability, perfection, or priority of the Senior Debt, any liens or security interests securing payment thereof, or any collateral therefore or guaranties thereof, (ii) the relative rights and duties of Senior Lender established in any instruments or agreements creating or evidencing any of the Senior Debt with respect to any of such collateral or guaranties, or (iii) the Lender’s obligations and agreements set forth in Section 7 of this Note. In any of the foregoing proceedings, (w) Senior Lender shall first receive Payment in Full in cash of all Senior Debt (or have such payments duly provided for in a manner satisfactory to Senior Lender) before Lender is entitled to receive any payment on account of or accrued or incurred in connection with any Junior Indebtedness, (x) any payment or distribution of assets of Borrower of any kind or character, whether in cash, property or securities to which any Lender would be entitled except for the provisions of this Note shall be paid by Borrower, the liquidating trustee or agent or other person making such a payment or distribution, directly to Senior Lender, for application to the payment of all Senior Debt until such Senior Debt shall have been Paid in Full in cash, (y) in the event that, notwithstanding the foregoing, any payment or distribution of assets of Borrower of any kind or character, whether in cash, property or securities, shall be received by any Lender on account of, or accrued or incurred in connection with, any Junior Indebtedness before all Senior Debt is Paid in Full in cash, or effective provision (in a manner satisfactory to the Senior Lender) made for its payment, then such payment or distribution shall be segregated and received and held in trust for the benefit of and shall be promptly paid over to Senior Lender, for application to the payment of all Senior Debt until such Senior Debt shall have been Paid in Full in cash, and (z) Senior Lender shall be entitled to receive and collect any distributions, dividends or other payments upon the Junior Indebtedness by filing such claim, proof of debt or proof of claim as appropriate in the proceeding, in Senior Lender’s name, as applicable, or the Lender’s name and apply such distribution, dividends or other payments to the Senior Debt until all of the Senior Debt shall have been Paid in Full in cash, rendering to the Lender any surplus to which the Lender is then entitled. Senior Lender and its officers or employees designated by them for such purpose is hereby constituted and appointed attorney-in-fact for the Lender with full power (which power, being coupled with an interest, shall be irrevocable so long as this Note is in effect) to file any claim, proof of debt or proof of claim in any such proceeding.

(c) The provisions of this Section 7 shall continue in full force and effect notwithstanding (i) the commencement by Borrower of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) Borrower’s consent to the entry of an order for relief in an insolvency case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Borrower or for any substantial part of its property, (iii) the making by Borrower of a general assignment for the benefit of creditors, (iv) Borrower’s failure generally to pay its debts as they become due, or (v) the institution of a proceeding having jurisdiction in the premises seeking a decree or order for relief in respect of Borrower in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of Borrower or for any substantial part of its property, or for the winding-up or liquidation of its affairs.

(d) Should any payment, distribution or security or proceeds be received by the Lender upon or with respect to the Junior Indebtedness prior to the Payment in Full of the Senior Debt, the Lender shall immediately deliver same to Senior Lender in the form received or, with the agreement of Senior Lender, in good funds (except for endorsement or assignment by the Lender where required by Senior Lender), for application on the Senior Debt (whether or not then due and in such order of maturity as Senior Lender elects) and, until so delivered, the same shall be held in trust by the Lender as the property of Senior Lender.

(e) Subject to the Payment In Full of the Senior Debt, the Lender shall be subrogated to the extent of the payments or distributions made to Senior Lender pursuant to the provisions of this Section 7 to the rights of Senior Lender to receive payments or distributions of cash, property or securities applicable to the Senior Debt until the principal, and all accrued unpaid interest hereon shall be Paid In Full.

(f) The provisions of this Section 7 are and are intended solely for the purpose of defining the relative rights of the Lender, on the one hand, and Senior Lender, on the other hand. All payments due under this Note, subject to the rights under this Section 7 of Senior Lender, are intended to rank equally with all other general obligations of Borrower and nothing hereunder is intended to or shall affect the relative rights against Borrower of the Lender and creditors of Borrower other than Senior Lender.

(g) No right of Senior Lender to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of Borrower or by any act or failure to act, in good faith, by Senior Lender, or by any noncompliance by Borrower with the terms, provisions and covenants of this Note, regardless of any knowledge thereof any Senior Lender may have or be otherwise charged with. Without in any way limiting the generality of the foregoing paragraph, Senior Lender may, at any time and from time to time, without the consent of or notice to the Lender, without incurring responsibility to the Lender and without impairing or releasing the subordination provided in this Section 7 or the obligations hereunder of the Lender to Senior Lender, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or alter the Senior Debt, or otherwise amend or supplement in any manner the Senior Debt or any instrument evidencing the same or any agreement under which the Senior Debt is outstanding; (ii) release any person liable in any manner for the collection of the Senior Debt; and (iii) exercise or refrain from exercising any rights against Borrower and any other person; provided , however , that Borrower shall not agree to or enter into any amendment or other modification of the Senior Notes or Transaction Documents (as defined therein) which expressly impose any additional or more restrictive conditions on the ability of the Borrower to pay any and all required principal and interest payments when due under this Note other than the restrictions set forth herein (it being agreed that Borrower and Senior Lender shall not be prohibited from agreeing to additions or changes to the covenants and events of defaults in the Senior Notes or Transaction Documents that may cause the covenants or events of default therein to otherwise be more restrictive to Borrower). The Lender waives any and all notices (except notices specifically provided for herein) of the creation or modification of the Senior Debt and notice of or proof of reliance by Senior Lender, upon the subordination provided for herein. The Senior Debt shall conclusively be deemed to have been created, contracted or incurred in reliance upon the provisions of this Note. Until the Senior Debt shall have been Paid in Full, the Note And Security Agreement shall not be amended without Senior Lender’s prior written consent.

(h) All rights, interests, agreements and obligations of Senior Lender and the Lender hereunder shall remain in full force and effect irrespective of:

(i) any lack of validity or enforceability in part, or in whole, of any document or agreement executed in connection with the Senior Debt or this Note;

(ii) any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Debt, or any amendment or waiver or other modification, including, without limitation, any increase in the amount thereof, whether by course of conduct or otherwise, of the Senior Debt;

(iii) the commencement of any proceeding; or

(iv) any other circumstances which otherwise might constitute a defense available to, or a discharge of, Borrower or any other obligor in respect of the Senior Debt, or of the Lender in respect of this Note.

(i) Third Party Beneficiary . It is specifically understood and agreed that Senior Lender is a third party beneficiary of Section 7 of this Note, and the provisions of this Section 7 are also for the benefit of and enforceable by Senior Lender.

(j) Security Agreement . This Note is unsecured prior to the satisfaction of the Security Agreement Conditions. Upon satisfaction of the Security Agreement Conditions, then that certain Security Agreement, dated as of the date hereof (but not effective until the Effective Date (as defined therein)) (the “ Security Agreement ”), shall become effective and Borrower shall execute such other documents as are necessary to secure the outstanding advances under this Note with substantially all of Borrower’s assets.

*********************

(Signature Page Follows)

IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

SNAP INTERACTIVE, INC.

By:	/s/ Alexander Harrington
	Name:	Alexander Harrington
	Title:	Chief Executive Officer and
		Chief Financial Officer

	Email for delivery of Notices: alex@snap-interactive.com

ACKNOWLEDGED AND AGREED TO (SOLELY WITH RESPECT TO SECTION 7):

SIGMA OPPORTUNITY FUND II, LLC

By:	/s/ Thom Waye
Name:	Thom Waye
Title:	Manager

SIGNATURE PAGE TO SUBORDINATED MULTIPLE ADVANCE TERM NOTE

EXHIBIT A

ADVANCE REQUEST

Date: [________], 201[__]

To:

A.V.M. Software, Inc., a New York corporation (“ Lender ”)

This Advance Request is furnished pursuant to Section 2(a) of that certain SUBORDINATED MULTIPLE ADVANCE TERM NOTE, dated as of July 18, 2016 (as may be amended, restated, renewed, extended or otherwise modified from time to time, the “ Note ”) between Snap Interactive, Inc., a Delaware corporation (the “ Borrower ”) and Lender. Unless otherwise defined herein, capitalized terms used in this Advance Request have the meanings ascribed thereto in the Note.

Borrower hereby notifies Lender of its request of an advance pursuant to Section 2(a) of the Note. Borrower hereby requests that:

(1)

The aggregate amount of the requested advance is $[_________] (which amount does not exceed the applicable Cash Balance Requirement Minimum).

(2)

The date of the requested advance is [_______] (which date is a Business Day and is no less than two (2) Business Days following the date hereof).

(3)

Borrower hereby represents that, as of the date referenced in Section 2 above, and after giving effect to the advance requested hereby:

(a) no Event of Default has occurred and is continuing or would result from the consummation of the borrowing contemplated hereby; and

(b) the person signing this Advance Request is duly authorized to execute and deliver it to Lender on behalf of Borrower.

(4)

The location and number of the Borrower’s account to which funds are to be disbursed, are as follows:

[___________]

[ Signature Page Follows ]

SNAP INTERACTIVE, INC.

By:
	Name:	Alexander Harrington
	Title:	Chief Executive Officer and
		Chief Financial Officer

Exhibit 10.7

SECURITY AGREEMENT

This SECURITY AGREEMENT (this “ Agreement ”), dated as of July 18, 2016 (the “ Closing Date ”) and effective as of the Effective Date (as defined below) as by and among Snap Interactive, Inc., a Delaware corporation (the “ Company ” or “ Debtor ”) and the Lender under that certain Subordinated Multiple Advance Term Note (the “ Note ”) that is a signatory hereto, its endorsees, transferees and assigns (the “ Secured Party ”).

W I T N E S S E T H:

WHEREAS, pursuant to the Note, the Secured Party is extending loans to the Company evidenced by the Note;

WHEREAS, in order to induce the Secured Party to continue to extend the loans evidenced by the Note, Debtor has agreed to execute and deliver to the Secured Party this Agreement on the Closing Date, which Agreement shall be effective as of the Effective Date, and to grant (as of the Effective Date) the Secured Party (as defined in Section 18 hereof), a security interest in certain property of Debtor to secure the prompt payment, performance and discharge in full of all of the Debtor’s obligations under the Note;

WHEREAS, this Agreement is being executed as of the Closing Date and this Agreement shall become effective upon the satisfaction of the Security Agreement Conditions (such date is the “ Effective Date ”).

NOW, THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms used but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel paper”, “commercial tort claim”, “deposit account”, “document”, “equipment”, “fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”, “investment property”, “letter-of-credit rights”, “proceeds” and “supporting obligations”) shall have the respective meanings given such terms in Article 9 of the UCC.

(a) “ CFC ” means a Person that is a controlled foreign corporation under Section 957 of the Code.

(b) “ Collateral ” means the collateral in which the Secured Party is granted a security interest by this Agreement, being all assets of the Company, and which shall include the following personal property of the Debtor, whether presently owned or existing or hereafter acquired or coming into existence, wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance covering the same and of any tort claims in connection therewith, and all dividends, interest, notes, securities, equity interest or other property at any time and from time to time acquired, receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Securities (as defined below):

(i) All goods, including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and wherever situated, together with all documents of title and documents representing the same, all additions and accessions thereto, replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in connection with Debtor’s businesses and all improvements thereto; and (B) all inventory;

(ii) All contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests, stock or other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, licenses, distribution and other agreements, computer software (whether “off-the-shelf”, licensed from any third party or developed by Debtor), computer software development rights, leases, franchises, customer lists, quality control procedures, grants and rights, goodwill, Intellectual Property and income tax refunds, other than the Excluded Contracts;

(iii) All accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising, goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect to each account, including any right of stoppage in transit;

(iv) All documents, letter-of-credit rights, instruments and chattel paper;

(v) All commercial tort claims;

(vi) [Reserved];

(vii) All investment property (other than any securities account);

(viii) All supporting obligations;

(ix) All files, records, books of account, business papers, and computer programs; and

(x) the products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(ix) above.

Without limiting the generality of the foregoing, the “ Collateral ” shall include the shares of capital stock and the other equity interests listed on Schedule H hereto (as such Schedule shall be delivered on the Effective Date and as the same may be modified from time to time pursuant to the terms hereof), and any other shares of capital stock and/or other equity interests of any other direct or indirect subsidiary of Debtor obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and, in each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable or distributed in respect of, or exchanged for, any of the foregoing and all rights arising under or in connection with the Pledged Securities, including, but not limited to, all dividends and interest.

Notwithstanding any other term or provision of this Agreement or any Transaction Document, the “ Collateral ” shall not include any cash, deposit account or securities account.

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Notwithstanding the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided , however , that to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset.

(c) “ Excluded Contracts ” means any contract or contractual obligation that prohibits, or requires the consent of any person other than Debtor which has not been obtained as a condition to, the creation by Debtor of a lien on any right, title or interest in such contract or contractual obligation and which is set forth on Annex B hereto.

(d) “ Intellectual Property ” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, (iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all trade secrets arising under the laws of the United States, any other country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals or extensions of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes of action for infringement of the foregoing.

(e) “ Majority in Interest ” means, at any time of determination, the majority in interest (based on then-outstanding principal amount of Note at the time of such determination) of the Secured Party.

(f) “ Necessary Endorsement ” means undated stock powers endorsed in blank or other proper instruments of assignment duly executed and such other instruments or documents as the Secured Party may reasonably request.

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(g) “ Obligations ” means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become due, or that are now or may be hereafter contracted or acquired, or owing to, of Debtor to the Secured Party and its Affiliates, including, without limitation, all obligations under this Agreement, the Note and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from any of the Secured Party as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing, the term “Obligations” shall include, without limitation: (i) principal of, and interest on the Note and the loans extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Debtor from time to time under or in connection with this Agreement, the Note and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving Debtor.

(h) “ Organizational Documents ” means with respect to Debtor, the documents by which Debtor was organized (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of Debtor (such as bylaws, a partnership agreement or an operating, limited liability or members agreement).

(i) “ Pledged Interests ” shall have the meaning ascribed to such term in Section 4(j).

(j) “ Pledged Securities ” shall have the meaning ascribed to such term in Section 4(i).

(k) “ Security Agreement Conditions ” shall have the meaning ascribed to such term in the Note.

(l) “ UCC ” means the Uniform Commercial Code of the State of New York and or any other applicable law of any state or states which has jurisdiction with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent of the parties that defined terms in the UCC should be construed in their broadest sense so that the term “Collateral” will be construed in its broadest sense. Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions, they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones shall be controlling.

2. Grant of Security Interest in Collateral. As an inducement for the Secured Party to continue to extend the loans as evidenced by the Note and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations, Debtor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Secured Party, effective as of the Effective Date, a security interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever kind and nature in and to, the Collateral (a “ Security Interest ” and, collectively, the “ Security Interests ”).

3. Delivery of Certain Collateral. Contemporaneously or prior to the Effective Date, Debtor shall deliver or cause to be delivered to the Secured Party (a) any and all certificates and other instruments representing or evidencing the Pledged Securities, and (b) any and all certificates and other instruments or documents representing any of the other Collateral, in each case, together with all Necessary Endorsements. The Debtor is, contemporaneously with the execution hereof, delivering to Secured Party, or have previously delivered to Secured Party, a true and correct copy of each Organizational Document governing any of the Pledged Securities.

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4. Representations, Warranties, Covenants and Agreements of the Debtor. Except as set forth under the corresponding section of the disclosure schedules delivered to the Secured Party on the Effective Date (the “ Disclosure Schedules ”), which Disclosure Schedules shall be deemed a part hereof, Debtor represents and warrants on the Effective Date, and covenants and agrees with, the Secured Party as follows. The Disclosure Schedules delivered to Secured Party by Debtor on the Closing Date are for informational purposes only and shall be updated by Debtor as of the Effective Date:

(a) Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by Debtor of this Agreement and the filings contemplated therein have been duly authorized by all necessary corporate action on the part of Debtor and no further action is required by Debtor. This Agreement has been duly executed by Debtor. This Agreement constitutes the legal, valid and binding obligation of Debtor, enforceable against Debtor in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors and by general principles of equity.

(b) The Debtor has no place of business or offices where its books of account and records are kept (other than temporarily at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A attached hereto, as such Schedule shall be delivered on the Effective Date (other than Collateral in transit between locations, out for repair or which consists of laptops or other equipment used by an employee of Debtor in the ordinary course of business). Except as specifically set forth on Schedule A (as such Schedule shall be delivered on the Effective Date), Debtor is the record owner of the real property where such Collateral is located, and there exist no mortgages or other liens on any such real property except for Permitted Liens (as defined in the Note). Except as disclosed on Schedule A (as such Schedule shall be delivered on the Effective Date), none of such Collateral (other than Collateral in transit between locations, out for repair or which consists of laptops or other equipment used by an employee of Debtor in the ordinary course of business) is in the possession of any consignee, bailee, warehouseman, agent or processor.

(c) Except for Permitted Liens (as defined in the Note) and except as set forth on Schedule B attached hereto (as such Schedule shall be delivered on the Effective Date and as may be updated from time to time), the Debtor is the sole owner of the Collateral (except for non-exclusive licenses granted by Debtor in the ordinary course of business), free and clear of any liens, security interests, encumbrances, rights or claims, and is fully authorized to grant the Security Interests (other than those liens that (x) prior to the Effective Date, will be in favor of Senior Lender and (y) on and after the Effective Date, will be in favor of the Secured Party pursuant to this Agreement). Except as set forth on Schedule C attached hereto (as such Schedule shall be delivered on the Effective Date and as may be updated from time to time), there is not on file in any governmental or regulatory authority, agency or recording office an effective financing statement, security agreement, license or transfer or any notice of any of the foregoing (other than those that (x) prior to the Effective Date, will be filed in favor of Senior Lender and (y) on and after the Effective Date, will be filed in favor of the Secured Party pursuant to this Agreement) covering or affecting any of the Collateral. Except as set forth on Schedule C attached hereto (as such Schedule shall be delivered on the Effective Date) and except pursuant to this Agreement, as long as this Agreement shall be in effect, the Debtor shall not knowingly permit to be on file in any such office or agency any other financing statement or other document or instrument (except (i) in connection with Permitted Liens or (ii) to the extent filed or recorded in favor of (x) prior to the Effective Date, Senior Lender and (y) on and after the Effective Date, the Secured Party pursuant to the terms of this Agreement).

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(d) No written claim has been received that any Collateral or Debtor’s use of any Collateral violates the rights of any third party. To the knowledge of the Debtor, there has been no adverse decision to Debtor’s claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction or to Debtor’s right to keep and maintain such Collateral in full force and effect, and there is no proceeding involving said rights pending or, to the best knowledge of Debtor, threatened before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority.

(e) Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business and its Collateral at the locations set forth on Schedule A attached hereto (as such Schedule shall be delivered on the Effective Date) and may not relocate such books of account and records or tangible Collateral unless it delivers to the Secured Party at least 30 days prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements under the UCC and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interests to create in favor of the Secured Party, a valid, perfected and continuing perfected first priority lien in the Collateral, subject to Permitted Liens.

(f) Upon the Effective Date, this Agreement creates in favor of the Secured Party a valid security interest in the Collateral, subject only to Permitted Liens (as defined in the Note) securing the payment and performance of the Obligations. Upon making the filings described in the immediately following paragraph, all security interests created hereunder in any Collateral which may be perfected by filing Uniform Commercial Code financing statements shall have been duly perfected. Except for the filing of the Uniform Commercial Code financing statements referred to in the immediately following paragraph, the recordation of the Intellectual Property Security Agreement (as defined in Section 4(p) hereof) with respect to copyrights and copyright applications in the United States Copyright Office referred to in paragraph (mm), and the delivery of the certificates and other instruments provided in Section 3, no action is necessary on the Effective Date to create, perfect or protect the security interests created hereunder. Without limiting the generality of the foregoing, except for the filing of said financing statements, and the recordation of said Intellectual Property Security Agreement, no consent of any third parties (other than the Senior Lender) and no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for (i) the execution, delivery and performance of this Agreement, (ii) on and after the Effective Date, the creation or perfection of the Security Interests created hereunder in the Collateral or (iii) on and after the Effective Date, the enforcement of the rights of the Secured Party hereunder, except for those consents and approvals which have already been obtained.

(g) Upon the Effective Date, Debtor authorizes the Secured Party to file one or more financing statements under the UCC, with respect to the Security Interests, with the proper filing and recording agencies in any jurisdiction deemed proper by it.

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(h) The execution, delivery and performance of this Agreement by the Debtor does not (i) violate any of the provisions of any Organizational Documents of Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable law, rule or regulation applicable to Debtor or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other instrument (evidencing Debtor’s debt or otherwise) or other understanding to which Debtor is a party or by which property or asset of Debtor is bound or affected. If any, all required consents (including, without limitation, from stockholders or creditors of Debtor) necessary for Debtor to enter into and perform its obligations hereunder have been obtained.

(i) The capital stock and other equity interests listed on Schedule H hereto as such Schedule shall be delivered on the Effective Date (the “ Pledged Securities ”) represent all capital stock and other equity interests owned, directly or indirectly, by the Company, provided that Pledged Securities shall not include any voting stock of any CFC in excess of sixty five percent (65%) of such voting stock. All of the Pledged Securities are validly issued, fully paid and non-assessable, and the Company is the legal and beneficial owner of the Pledged Securities, free and clear of any lien, security interest or other encumbrance except for the security interests created by this Agreement and other Permitted Liens (as defined in the Note).

(j) The ownership and other equity interests in partnerships and limited liability companies (if any) included in the Collateral (the “ Pledged Interests ”) by their express terms do not provide that they are securities governed by Article 8 of the UCC and are not held in a securities account or by any financial intermediary.

(k) Except for Permitted Liens (as defined in the Note), Debtor shall at all times maintain the liens and Security Interests provided for hereunder as valid and perfected first priority liens and security interests in the Collateral in favor of the Secured Party, until this Agreement and the Security Interest hereunder shall be terminated pursuant to Section 14 hereof. Debtor agrees to defend the same against the claims of any and all persons and entities. Debtor shall safeguard and protect all Collateral for the account of the Secured Party. At the request of the Secured Party on and after the Effective Date, Debtor will pay the cost of filing one or more financing statements pursuant to the UCC in form reasonably satisfactory to the Secured Party in all public offices wherever filing is, or is deemed by the Secured Party to be, necessary or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing, Debtor shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interests hereunder (other than those fees and taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP), and Debtor shall obtain and furnish to the Secured Party from time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the priority of the Security Interests hereunder.

(l) On and after the Effective Date, Debtor will not transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except for non-exclusive licenses granted by Debtor in its ordinary course of business and sales of inventory or obsolete or worn-out items by Debtor in its ordinary course of business) without the prior written consent of the Secured Party.

(m) Debtor shall keep and preserve its equipment, inventory and other tangible Collateral (other than obsolete or worn-out items) in good condition, repair and order and shall not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.

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(n) Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral hereafter acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established reputation having similar properties similarly situated and in such amounts as are customarily carried under similar circumstances by other such entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover the full replacement cost thereof. On and after the Effective Date, Debtor shall cause each insurance policy issued in connection herewith to provide, and the insurer issuing such policy to certify to the Secured Party, that (i) the Secured Party will be named as lender loss payee and additional insured under each such insurance policy; (ii) if such insurance be proposed to be cancelled or materially changed for any reason whatsoever, such insurer will promptly notify the Secured Party and such cancellation or change shall not be effective as to the Secured Party for at least thirty (30) days after receipt by the Secured Party of such notice, unless the effect of such change is to extend or increase coverage under the policy; and (iii) the Secured Party will have the right (but no obligation) at its election to remedy any default in the payment of premiums within thirty (30) days of notice from the insurer of such default. On and after the Effective Date, if no Event of Default (as defined in the Note) exists and if the proceeds arising out of any claim or series of related claims do not exceed $100,000, loss payments in each instance will be applied by the Debtor to the repair and/or replacement of property with respect to which the loss was incurred to the extent reasonably feasible, and any loss payments or the balance thereof remaining, to the extent not so applied, shall be payable to the Debtor; provided , however , that payments received by Debtor after an Event of Default occurs and is continuing or in excess of $100,000 for any occurrence or series of related occurrences shall be paid to the Secured Party on behalf of the Secured Party and, if received by Debtor, shall be held in trust for the Secured Party and immediately paid over to the Secured Party unless otherwise directed in writing by the Secured Party. Copies of such policies or the related certificates, in each case, naming the Secured Party as lender loss payee and additional insured shall be delivered to the Secured Party at least annually and at the time any new policy of insurance is issued.

(o) Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Party promptly, in sufficient detail, of any material adverse change in the Collateral, and of the occurrence of any event which would have a material adverse effect on the value of the Collateral or on the Secured Party’s security interest therein.

(p) Debtor shall promptly execute and deliver to the Secured Party such further deeds, mortgages, assignments, security agreements, financing statements or other instruments, documents, certificates and assurances and take such further action as the Secured Party may from time to time request and may in its sole discretion deem necessary to perfect, protect or enforce the Secured Party’s security interest in the Collateral including, without limitation, if applicable, the execution and delivery of a separate security agreement with respect to Debtor’s Intellectual Property (“ Intellectual Property Security Agreement ”) in which the Secured Party has been granted a security interest hereunder, substantially in a form reasonably acceptable to the Secured Party, which Intellectual Property Security Agreement, other than as stated therein, shall be subject to all of the terms and conditions hereof.

(q) Debtor shall permit the Secured Party and its representatives and agents to inspect the Collateral during normal business hours and upon reasonable prior notice, and to make copies of records pertaining to the Collateral as may be reasonably requested by the Secured Party from time to time.

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(r) Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes of action (to the extent that Debtor determines in its commercially reasonable discretion that the pursuit of such right, claim or cause of action is beneficial to Debtor) and accounts receivable in respect of the Collateral.

(s) Debtor shall promptly notify the Secured Party in sufficient detail upon becoming aware of any attachment, garnishment, execution or other legal process levied against a material portion of the Collateral and of any other information received by Debtor that may materially affect the value of the Collateral, the Security Interest or the rights and remedies of the Secured Party hereunder.

(t) All information heretofore, herein or hereafter supplied to the Secured Party by or on behalf of Debtor with respect to the Collateral is accurate and complete in all material respects as of the date furnished.

(u) The Debtor shall at all times preserve and keep in full force and effect their respective valid existence and good standing and any rights and franchises material to its business.

(v) Other than with respect to the Merger (as defined in the Note), Debtor will not change its name, type of organization, jurisdiction of organization, organizational identification number (if it has one), legal or corporate structure, or identity, or add any new fictitious name or D/B/A unless it provides at least 30 days prior written notice to the Secured Party of such change.

(w) Except in the ordinary course of business, Debtor may not consign any of its inventory or sell any of its inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale without the consent of the Secured Party which shall not be unreasonably withheld.

(x) Debtor may not relocate its chief executive office to a new location without providing 30 days prior written notification thereof to the Secured Party and so long as, at the time of such written notification, Debtor provides any financing statements or fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.

(y) Debtor was organized and remains organized solely under the laws of the state set forth next to such Debtor’s name in Schedule D (as such Schedule shall be delivered on the Effective Date), which Schedule D sets forth Debtor’s organizational identification number or, if Debtor does not have one, states that one does not exist.

(z) (i) The actual name of Debtor is the name set forth in Schedule D as such Schedule shall be delivered on the Effective Date; (ii) Debtor has no trade names except as set forth on Schedule E as such Schedule shall be delivered on the Effective Date; (iii) Debtor has not used any name other than that stated in the preamble hereto or as set forth on Schedule E (as such Schedule shall be delivered on the Effective Date) for the preceding five years; and (iv) no entity has merged into Debtor or been acquired by Debtor within the past five years except as set forth on Schedule E (as such Schedule shall be delivered on the Effective Date).

(aa) At any time and from time to time that any Collateral consists of instruments, certificated securities or other items that require or permit possession by the secured party to perfect the security interest created hereby, the Debtor shall deliver such Collateral to the Secured Party.

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(bb) Debtor, in its capacity as issuer, hereby agrees to comply with any and all orders and instructions of Secured Party regarding the Pledged Interests consistent with the terms of this Agreement without the further consent of Debtor as contemplated by Section 8-106 (or any successor section) of the UCC. Further, Debtor agrees that it shall not enter into a similar agreement regarding the Pledged Interests (or one that would confer “control” within the meaning of Article 8 of the UCC) with any other person or entity.

(cc) Debtor shall cause all tangible chattel paper constituting Collateral to be delivered to the Secured Party, or, if such delivery is not possible, then to cause such tangible chattel paper to contain a legend noting that it is subject to the security interest created by this Agreement. To the extent that any Collateral consists of electronic chattel paper, the Debtor shall cause the underlying chattel paper to be “marked” within the meaning of Section 9-105 of the UCC (or successor section thereto).

(dd) [Reserved].

(ee) To the extent that any Collateral consists of letter-of-credit rights, the Debtor shall cause the issuer of each underlying letter of credit to consent to an assignment of the proceeds thereof to the Secured Party.

(ff) To the extent that any Collateral is in the possession of any third party, the Debtor shall join with the Secured Party in notifying such third party of the Secured Party’s security interest in such Collateral and shall use its best efforts to obtain an acknowledgement and agreement from such third party with respect to the Collateral, in form and substance reasonably satisfactory to the Secured Party.

(gg) If Debtor shall at any time hold or acquire a commercial tort claim in an amount in excess of $20,000, Debtor shall promptly notify the Secured Party in a writing signed by Debtor of the particulars thereof and grant to the Secured Party in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Secured Party.

(hh) Debtor shall immediately provide written notice to the Secured Party of any and all accounts which arise out of contracts with any governmental authority and, to the extent necessary to perfect or continue the perfected status of the Security Interests in such accounts and proceeds thereof, shall execute and deliver to the Secured Party an assignment of claims for such accounts and cooperate with the Secured Party in taking any other steps required, in its judgment, under the Federal Assignment of Claims Act or any similar federal, state or local statute or rule to perfect or continue the perfected status of the Security Interests in such accounts and proceeds thereof.

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(ii) Following the Effective Date, Debtor shall cause each new subsidiary of Debtor to become a party hereto (an “ Additional Debtor ”) within three (3) Business Days of the acquisition or formation of such new subsidiary by executing and delivering an Additional Debtor Joinder in substantially the form of Annex A attached hereto and comply with the provisions hereof applicable to the Debtor. Concurrent therewith, the Additional Debtor shall deliver replacement schedules for, or supplements to all other Schedules to (or referred to in) this Agreement, as applicable, which replacement schedules shall supersede, or supplements shall modify, the Schedules then in effect. The Additional Debtor shall also deliver such opinions of counsel, authorizing resolutions, good standing certificates, incumbency certificates, organizational documents and other information and documentation as the Secured Party may reasonably request. Upon delivery of the foregoing to the Secured Party, the Additional Debtor shall be and become a party to this Agreement with the same rights and obligations as the Debtor, for all purposes hereof as fully and to the same extent as if it were an original signatory hereto and shall be deemed to have made the representations, warranties and covenants set forth herein as of the date of execution and delivery of such Additional Debtor Joinder, and all references herein to the “Debtor” shall be deemed to include each Additional Debtor.

(jj) Debtor shall vote the Pledged Securities to comply with the covenants and agreements set forth herein and in the Note.

(kk) Debtor shall register the pledge of the applicable Pledged Securities on the books of Debtor. Debtor shall notify each issuer of Pledged Securities to register the pledge of the applicable Pledged Securities in the name of the Secured Party on the books of such issuer. Further, except with respect to certificated securities delivered to the Secured Party, the Debtor shall deliver to Secured Party an acknowledgement of pledge (which, where appropriate, shall comply with the requirements of the relevant UCC with respect to perfection by registration) signed by the issuer of the applicable Pledged Securities, which acknowledgement shall confirm that: (a) it has registered the pledge on its books and records; and (b) at any time directed by Secured Party during the continuation of an Event of Default, such issuer will transfer the record ownership of such Pledged Securities into the name of any designee of Secured Party, will take such steps as may be necessary to effect the transfer, and will comply with all other instructions of Secured Party regarding such Pledged Securities without the further consent of the Debtor.

(ll) In the event that, upon an occurrence of an Event of Default, Secured Party shall sell all or any of the Pledged Securities to another party or parties (herein called the “ Transferee ”) or shall purchase or retain all or any of the Pledged Securities, Debtor shall, to the extent applicable: (i) deliver to Secured Party or the Transferee, as the case may be, the articles of incorporation, bylaws, minute books, stock certificate books, corporate seals, deeds, leases, indentures, agreements, evidences of indebtedness, books of account, financial records and all other Organizational Documents and records of the Debtor and their direct and indirect subsidiaries; (ii) use its best efforts to obtain resignations of the persons then serving as officers and directors of the Debtor and their direct and indirect subsidiaries, if so requested; and (iii) use its best efforts to obtain any approvals that are required by any governmental or regulatory body in order to permit the sale of the Pledged Securities to the Transferee or the purchase or retention of the Pledged Securities by Secured Party and allow the Transferee or Secured Party to continue the business of the Debtor and their direct and indirect subsidiaries.

(mm) Without limiting the generality of the other obligations of the Debtor hereunder, Debtor shall promptly (i) cause to be registered at the United States Copyright Office all of its material copyrights, (ii) provide any requested documents and information and carry out any actions in connection with recording of the security interest contemplated hereby with respect to all Intellectual Property at the United States Copyright Office or United States Patent and Trademark Office, and (iii) give the Secured Party notice whenever it acquires (whether absolutely or by license) or creates any additional material Intellectual Property.

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(nn) Debtor will from time to time promptly execute and deliver all such further instruments and documents, and take all such further action as may be necessary or desirable, or as the Secured Party may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce the rights and remedies hereunder and with respect to any Collateral or to otherwise carry out the purposes of this Agreement.

(oo) Schedule F as such Schedule shall be delivered on the Effective Date lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights, and domain names owned by any of the Debtor as of the Effective Date. As of the Effective Date, Schedule F (as such Schedule shall be delivered on the Effective Date) lists all material licenses in favor of Debtor for the use of any patents, trademarks, copyrights and domain names as of the Effective Date. All material patents and trademarks of the Debtor have been duly recorded at the United States Patent and Trademark Office and all material copyrights of the Debtor have been duly recorded at the United States Copyright Office.

(pp) As of the Effective Date, except as set forth on Schedule G as such Schedule shall be delivered on the Effective Date, none of the account debtors or other persons or entities obligated on any of the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or any similar federal, state or local statute or rule in respect of such Collateral.

5. Effect of Pledge on Certain Rights. If any of the Collateral subject to this Agreement consists of nonvoting equity or ownership interests (regardless of class, designation, preference or rights) that may be converted into voting equity or ownership interests upon the occurrence of certain events (including, without limitation, upon the transfer of all or any of the other stock or assets of the issuer), it is agreed that the pledge of such equity or ownership interests pursuant to this Agreement or the enforcement of any of Secured Party’s rights hereunder shall not be deemed to be the type of event which would trigger such conversion rights notwithstanding any provisions in the Organizational Documents or agreements to which Debtor is subject or to which Debtor is party.

6. Defaults. The following events shall be “ Events of Default ”:

(a) The occurrence of an Event of Default (as defined in the Note) under the Note;

(b) Any representation or warranty of Debtor in this Agreement shall prove to have been incorrect in any material respect when made;

(d) If any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by Debtor, or a proceeding shall be commenced by Debtor, or by any governmental authority having jurisdiction over Debtor, seeking to establish the invalidity or unenforceability thereof, or Debtor shall deny that Debtor has any liability or obligation purported to be created under this Agreement.

7. Duty To Hold In Trust.

(a) Upon the occurrence of any Event of Default and at any time during the continuation thereof, Debtor shall, upon receipt of any revenue, income, dividend, interest or other sums subject to the Security Interests, whether payable pursuant to the Note or otherwise, or of any check, draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the benefit of the Secured Party and shall forthwith endorse and transfer any such sums or instruments, or both, to the Secured Party pro-rata in proportion to their respective then-currently outstanding principal amount of Note for application to the satisfaction of the Obligations (and if any Note is not outstanding, pro-rata in proportion to the initial purchases of the remaining Note).

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(b) If Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation, shares of Pledged Securities or instruments representing Pledged Securities acquired after the Effective Date, or any options, warrants, rights or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization, reclassification or increase or reduction of capital, or issued in connection with any reorganization of Debtor or any of its direct or indirect subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in exchange for, such Pledged Securities or otherwise), Debtor agrees to (i) accept the same as the agent of the Secured Party; (ii) hold the same in trust for the benefit of the Secured Party; and (iii) to deliver any and all certificates or instruments evidencing the same to Secured Party on or before the close of business on the third business day following the receipt thereof by Debtor, in the exact form received together with the Necessary Endorsements, to be held by Secured Party subject to the terms of this Agreement as Collateral.

8. Rights and Remedies Upon Default.

(a) On and after the Effective Date, upon the occurrence of any Event of Default and at any time during the continuation thereof, the Secured Party shall have the right to exercise all of the remedies conferred hereunder and under the Note, and the Secured Party shall have all the rights and remedies of a secured party under the UCC. Without limitation, the Secured Party shall have the following rights and powers:

(i) The Secured Party shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of any person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and Debtor shall assemble the Collateral and make it available to the Secured Party at places which the Secured Party shall reasonably select, whether at Debtor’s premises or elsewhere, and make available to the Secured Party, without rent, all of Debtor’s respective premises and facilities for the purpose of the Secured Party taking possession of, removing or putting the Collateral in saleable or disposable form.

(ii) Upon notice to the Debtor by Secured Party, all rights of Debtor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise and all rights of Debtor to receive the dividends and interest which it would otherwise be authorized to receive and retain, shall cease. Upon such notice, Secured Party shall have the right to receive any interest, cash dividends or other payments on the Collateral and, at the option of Secured Party, to exercise in such Secured Party’s discretion all voting rights pertaining thereto. Without limiting the generality of the foregoing, Secured Party shall have the right (but not the obligation) to exercise all rights with respect to the Collateral as it were the sole and absolute owner thereof, including, without limitation, to vote and/or to exchange, at its sole discretion, any or all of the Collateral in connection with a merger, reorganization, consolidation, recapitalization or other readjustment concerning or involving the Collateral or Debtor or any of its direct or indirect subsidiaries.

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(iii) The Secured Party shall have the right to operate the business of Debtor using the Collateral and shall have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places, and upon such terms and conditions as the Secured Party may deem commercially reasonable, all without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to Debtor or right of redemption of Debtor, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral, the Secured Party may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption and equities of Debtor, which are hereby waived and released.

(iv) The Secured Party shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts to make payments directly to the Secured Party and to enforce the Debtor’s rights against such account debtors and obligors.

(v) [Reserved.]

(vi) The Secured Party may (but is not obligated to) transfer any or all Intellectual Property registered in the name of Debtor at the United States Patent and Trademark Office and/or Copyright Office into the name of the Secured Party or any designee or any purchaser of any Collateral.

(b) The Secured Party shall comply with any applicable law in connection with a disposition of Collateral and such compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. The Secured Party may sell the Collateral without giving any warranties and may specifically disclaim such warranties. If the Secured Party sells any of the Collateral on credit, the Debtor will only be credited with payments actually made by the purchaser. In addition, Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of the Secured Party’s rights and remedies hereunder, including, without limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect thereto.

(c) For the purpose of enabling the Secured Party to further exercise rights and remedies under this Section 8 or elsewhere provided by agreement or applicable law, Debtor hereby grants to the Secured Party an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to Debtor) to use, license or sublicense following an Event of Default, any Intellectual Property now owned or hereafter acquired by Debtor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof.

9. Applications of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from payments made on account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Secured Party in enforcing the Secured Party’s rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to satisfaction of the Obligations to Secured Party, and to the payment of any other amounts required by applicable law, after which the Secured Party shall pay to the Debtor any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Party is legally entitled, the Debtor will be liable for the deficiency, together with interest thereon, at the rate of 18% per annum or the lesser amount permitted by applicable law (the “ Default Rate ”), and the reasonable fees of any attorneys employed by the Secured Party to collect such deficiency. To the extent permitted by applicable law, Debtor waives all claims, damages and demands against the Secured Party arising out of the repossession, removal, retention or sale of the Collateral, unless due solely to the gross negligence or willful misconduct of the Secured Party as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction.

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10. Securities Law Provision. Debtor recognizes that Secured Party may be limited in its ability to effect a sale to the public of all or part of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal or state securities laws (collectively, the “ Securities Laws ”), and may be compelled to resort to one or more sales to a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their own account, for investment and not with a view to the distribution or resale thereof. Debtor agrees that sales so made may be at prices and on terms less favorable than if the Pledged Securities were sold to the public, and that Secured Party has no obligation to delay the sale of any Pledged Securities for the period of time necessary to register the Pledged Securities for sale to the public under the Securities Laws. Debtor shall cooperate with Secured Party in its attempt to satisfy any requirements under the Securities Laws (including, without limitation, registration thereunder if requested by Secured Party) applicable to the sale of the Pledged Securities by Secured Party.

11. Costs and Expenses. The Debtor shall pay all other claims and charges which in the reasonable opinion of the Secured Party is reasonably likely to prejudice, imperil or otherwise affect the Collateral or the Security Interests therein. The Debtor will also, upon demand, pay to the Secured Party the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Secured Party may incur in connection with the protection, satisfaction, foreclosure, collection or enforcement of the Security Interest and the administration, continuance, amendment or enforcement of this Agreement and pay to the Secured Party the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Secured Party may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement of any of the rights of the Secured Party under the Note. Until so paid, any fees payable hereunder shall be added to the principal amount of the Note and shall bear interest at the Default Rate.

12. Responsibility for Collateral. The Debtor assume all liabilities and responsibility in connection with all Collateral, and the Obligations shall in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability for any reason. Without limiting the generality of the foregoing, (a) the Secured Party does not (i) have any duty (either before or after an Event of Default) to collect any amounts in respect of the Collateral or to preserve any rights relating to the Collateral, or (ii) have any obligation to clean-up or otherwise prepare the Collateral for sale, and (b) Debtor shall remain obligated and liable under each contract or agreement included in the Collateral to be observed or performed by Debtor thereunder. The Secured Party shall not have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt by the Secured Party of any payment relating to any of the Collateral, nor shall the Secured Party be obligated in any manner to perform any of the obligations of Debtor under or pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received by the Secured Party in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to the Secured Party or to which the Secured Party may be entitled at any time or times.

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13. Security Interests Absolute. All rights of the Secured Party and all obligations of the Debtor hereunder, shall be absolute and unconditional, irrespective of: (a) any lack of validity or enforceability of this Agreement, the Note or any agreement entered into in connection with the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Note or any other agreement entered into in connection with the foregoing; (c) any exchange, release or non-perfection of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guarantee, or any other security, for all or any of the Obligations; (d) any action by the Secured Party to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to Debtor, or a discharge of all or any part of the Security Interests granted hereby. Until the Obligations shall have been paid and performed in full, the rights of the Secured Party shall continue even if the Obligations are barred for any reason, including, without limitation, the running of the statute of limitations or bankruptcy. Debtor expressly waives presentment, protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer of any Collateral or any payment received by the Secured Party hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to any party other than the Secured Party, then, in any such event, Debtor’s obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof. Debtor waives all right to require the Secured Party to proceed against any other person or entity or to apply any Collateral which the Secured Party may hold at any time, or to marshal assets, or to pursue any other remedy. Debtor waives any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.

14. Term of Agreement. This Agreement and the Security Interests shall terminate on the date on which all payments under the Note have been indefeasibly paid in full and all other Obligations have been paid or discharged; provided , however , that all indemnities of the Debtor contained in this Agreement shall survive and remain operative and in full force and effect regardless of the termination of this Agreement.

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15. Power of Attorney; Further Assurances.

(a) Debtor authorizes the Secured Party, and does hereby make, constitute and appoint the Secured Party and its officers, agents, successors or assigns with full power of substitution, as Debtor’s true and lawful attorney-in-fact, with power, in the name of the Secured Party or Debtor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts, money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of the Secured Party; (ii) to sign and endorse any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv) to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (v) to transfer any Intellectual Property or provide licenses respecting any Intellectual Property; and (vi) generally, at the option of the Secured Party, and at the expense of the Debtor, at any time, or from time to time, to execute and deliver any and all documents and instruments and to do all acts and things which the Secured Party deems necessary to protect, preserve and realize upon the Collateral and the Security Interests granted therein in order to effect the intent of this Agreement and the Note all as fully and effectually as the Debtor might or could do, including, without limitation, the filing, in its sole discretion, of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral, which financing statements may (but need not) describe the Collateral as “all assets” or “all personal property” or words of like import; and Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding. The designation set forth herein shall be deemed to amend and supersede any inconsistent provision in the Organizational Documents or other documents or agreements to which Debtor is subject or to which Debtor is a party. Without limiting the generality of the foregoing, after the occurrence and during the continuance of an Event of Default, each Secured Party is specifically authorized to execute and file any applications for or instruments of transfer and assignment of any patents, trademarks, copyrights or other Intellectual Property with the United States Patent and Trademark Office and the United States Copyright Office.

(b) On a continuing basis, Debtor will take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested by the Secured Party, to perfect the Security Interests granted hereunder and otherwise to carry out the intent and purposes of this Agreement, or for assuring and confirming to the Secured Party the grant or perfection of a perfected security interest in all the Collateral under the UCC.

16. Notices. All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Note.

17. Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other person, firm, corporation or other entity, then the Secured Party shall have the right, in its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Party’s rights and remedies hereunder.

18. [Reserved].

19. Miscellaneous.

(a) No course of dealing between the Debtor and the Secured Party, nor any failure to exercise, nor any delay in exercising, on the part of the Secured Party, any right, power or privilege hereunder or under the Note shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

(b) All of the rights and remedies of the Secured Party with respect to the Collateral, whether established hereby or by the Note or by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.

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(c) This Agreement, together with the exhibits and schedules hereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into this Agreement and the exhibits and schedules hereto. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Debtor and the Secured Party (or, in the event that the Secured Party no longer holds any Note, in a written instrument signed by the Debtor and the Majority in Interest), or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. Notwithstanding the foregoing, until the Senior Debt (as defined in the Note) shall have been Paid in Full (as defined in the Note), this Agreement shall not be amended without Senior Lender’s prior written consent.

(d) If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(e) No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

(f) This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Secured Party (other than by merger). Any Secured Party may assign any or all of its rights under this Agreement to any Person to whom such Secured Party assigns or transfers any Obligations, provided such transferee agrees in writing to be bound, with respect to the transferred Obligations, by the provisions of this Agreement that apply to the “Secured Party.”

(g) Each party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order to carry out the provisions and purposes of this Agreement.

(h) Except to the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, all questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Except to the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, each party hereto agrees that all proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and the Note (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or Secured agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan. Except to the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

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(i) This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

(j) [Reserved.]

(k) Debtor shall indemnify, reimburse and hold harmless the Secured Party and their respective partners, members, shareholders, officers, directors, employees and Secured agents (and any other persons with other titles that have similar functions) (collectively, “ Indemnitees ”) from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses, of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from this Agreement or the Collateral, except any such losses, claims, liabilities, damages, penalties, suits, costs and expenses which result solely from the gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable decision of a court of competent jurisdiction. This indemnification provision is in addition to, and not in limitation of, any other indemnification provision in the Note or any other agreement, instrument or other document executed or delivered in connection herewith or therewith.

(l) Nothing in this Agreement shall be construed to subject Secured Party to liability as a partner in Debtor or any if its direct or indirect subsidiaries that is a partnership or as a member in Debtor or any of its direct or indirect subsidiaries that is a limited liability company, nor shall Secured Party be deemed to have assumed any obligations under any partnership agreement or limited liability company agreement, as applicable, of Debtor or any of its direct or indirect subsidiaries or otherwise, unless and until any such Secured Party exercises its right to be substituted for Debtor as a partner or member, as applicable, pursuant hereto.

(m) To the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the consent, approval or action of any partner or member, as applicable, of Debtor or any direct or indirect subsidiary of Debtor or compliance with any provisions of any of the Organizational Documents, the Debtor hereby grants such consent and approval and waive any such noncompliance with the terms of said documents.

(n) The parties hereto recognize that the Effective Date is subject to the satisfaction of the Security Agreement Conditions.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written and this Agreement shall be effective as of the Effective Date.

SNAP INTERACTIVE, INC.

By:	/s/ Alexander Harrington
	Name:	Alexander Harrington
	Title:	Chief Executive Officer and
		Chief Financial Officer

A.V.M. SOFTWARE, INC.

By:	/s/ Jason Katz
	Name:	Jason Katz
	Title:	CEO

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alexander Harrington, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Snap Interactive, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2016	By:	/s/ Alexander Harrington
		Alexander Harrington
		Chief Executive Officer and Chief Financial Officer (Principal Executive, Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Snap Interactive, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.

Date: August 11, 2016	By:	/s/ Alexander Harrington
		Alexander Harrington
		Chief Executive Officer and Chief Financial Officer (Principal Executive, Financial and Accounting Officer)

The foregoing certification is being furnished as an exhibit to the Form 10-Q pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-Q for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.