[PART I](index=4&type=section&id=PART%20I) [Business](index=4&type=section&id=ITEM%201%20-%20BUSINESS) The company operates two diversity-focused professional networks, PDN and NAPW, with a strategy to grow membership and recruitment services, discontinuing China operations in 2020 - The company's **core strategy** includes growing its member and client base, maximizing revenue through synergies, launching new services, streamlining infrastructure, and expanding its diversity recruitment offerings[20](index=20&type=chunk) - The PDN Network provides recruitment solutions, including advertising, job postings, and career fairs, to a client base of approximately **1,250 companies** as of December 31, 2020[25](index=25&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - The NAPW Network offers women networking opportunities through its website and local chapters, which shifted to a virtual format in March 2020 due to the COVID-19 pandemic[31](index=31&type=chunk)[32](index=32&type=chunk) - On March 4, 2020, the Board of Directors approved the **discontinuation of all China operations**, with historical financial results now reported as discontinued operations[62](index=62&type=chunk) 2020 Revenue by Business Segment | Segment | Revenue Contribution (%) | | :--- | :--- | | PDN Network | 70% | | NAPW Network | 30% | [Risk Factors](index=14&type=section&id=ITEM%201A%20-%20RISK%20FACTORS) The company faces risks from persistent losses, intense competition, operational vulnerabilities, concentrated ownership, and material weaknesses in internal controls - The company has a history of financial struggles, recording a net loss from continuing operations of approximately **$4.2 million** in 2020, an increase from the **$2.8 million** loss in 2019[66](index=66&type=chunk) - Competition is a **major risk**, with the company facing challenges from larger online professional networks such as LinkedIn and Monster Worldwide, as well as social networks like Facebook[67](index=67&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) - The COVID-19 pandemic has had, and is expected to continue to have, an **adverse effect** on the business and financial results, potentially impacting liquidity and the ability to execute business strategies[105](index=105&type=chunk) - As of March 31, 2021, Cosmic Forward Limited (CFL) beneficially owned approximately **25.5%** of the company's common stock, giving it significant influence over stockholder matters[108](index=108&type=chunk) - Management determined that as of December 31, 2020, the company's internal controls over financial reporting had **material weaknesses**, which could result in material misstatements in financial statements[115](index=115&type=chunk) [Properties](index=25&type=section&id=ITEM%202%20-%20PROPERTIES) The company leases its **4,902 sq. ft.** Chicago headquarters until 2027 and a smaller **300 sq. ft.** office in Minnetonka - The main corporate office is a leased space of **4,902 sq. ft.** in Chicago, IL, with the lease term extending to **September 2027**[125](index=125&type=chunk) - A smaller office of **300 sq. ft.** is leased in Minnetonka, MN, for the Events division under a flexible quarter-to-quarter lease[125](index=125&type=chunk) [Legal Proceedings](index=25&type=section&id=ITEM%203%20-%20LEGAL%20PROCEEDINGS) The company is involved in multiple legal matters, including a settled lawsuit, a **$746K** judgment against NAPW, and a **$450K** FLSA lawsuit - The lawsuit with White Winston was settled on October 28, 2020, including a **$250,000** cash payment, a subsequent **$350,000** payment, and the issuance of **150,000 shares** of common stock[128](index=128&type=chunk) - A judgment of **$746,142.41** was obtained against the company's subsidiary, NAPW, regarding a former lease, with a litigation settlement reserve of **$780,000** recorded[129](index=129&type=chunk) - The company is a defendant in a lawsuit alleging violations of the Fair Labor Standards Act, with a **$450,000** litigation settlement reserve recorded and trial expected in 2021[130](index=130&type=chunk) [PART II](index=26&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=ITEM%205%20-%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY,%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's NASDAQ-listed common stock experienced volatility in 2020, with no dividends paid, and capital was raised through private placements 2020 Common Stock Price Range | Quarter | High ($) | Low ($) | | :--- | :--- | :--- | | Q1 | 0.91 | 0.91 | | Q2 | 3.98 | 0.91 | | Q3 | 3.20 | 0.76 | | Q4 | 5.56 | 0.91 | - The company has **never declared or paid cash dividends** and intends to retain future earnings to finance business development and expansion[138](index=138&type=chunk) - In 2020, the company raised capital through private placements, including selling shares to Malven Group Limited for gross proceeds of **$1.5 million** in March and **$1.0 million** in June[140](index=140&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=ITEM%207%20-%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Total revenues declined **11.3%** in 2020 to **$4.46M**, driven by NAPW, while expenses rose **16%** to **$9.3M**, resulting in a **$4.16M** net loss and going concern doubt [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Total revenues decreased by **11.3%** to **$4.46 million** in 2020, while expenses increased by **16.0%**, leading to a **$4.16 million** net loss Consolidated Revenues (FY 2020 vs. FY 2019) | Revenue Category | 2020 (in thousands) | 2019 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Membership fees and related services | $1,346 | $2,428 | -44.6% | | Recruitment services | $2,962 | $2,451 | +20.8% | | **Total revenues** | **$4,457** | **$5,025** | **-11.3%** | Segment Revenues (FY 2020 vs. FY 2019) | Segment | 2020 (in thousands) | 2019 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | PDN Network | $3,106 | $2,592 | +19.8% | | NAPW Network | $1,351 | $2,433 | -44.5% | - Total costs and expenses increased by **16.0%** to **$9.3 million** in 2020, primarily due to a **50.4%** increase in general and administrative expenses related to litigation reserves, legal fees, and share-based compensation[160](index=160&type=chunk)[163](index=163&type=chunk)[166](index=166&type=chunk) - Net loss from continuing operations widened by **48.9%** to **$4.16 million** in 2020, compared to a loss of **$2.79 million** in 2019[175](index=175&type=chunk) - Other income was **$652,000** in 2020, a significant increase from **$26,000** in 2019, primarily due to the forgiveness of a **$651,077** Paycheck Protection Program (PPP) loan[168](index=168&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved with increased cash, but persistent net losses and negative operating cash flow raise substantial doubt about its going concern ability Liquidity Position | Metric (in thousands) | As of Dec 31, 2020 | As of Dec 31, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,118 | $634 | | Working capital (deficiency) | $(1,156) | $(2,114) | - The company's history of net losses and negative cash flows from operations (**$3.3 million** used in continuing operations in 2020) raises **substantial doubt** about its ability to continue as a going concern[177](index=177&type=chunk)[186](index=186&type=chunk) - Net cash provided by financing activities was approximately **$4.9 million** in 2020, primarily from the sale of common stock to Malven Group Limited and other institutional investors[178](index=178&type=chunk)[179](index=179&type=chunk)[189](index=189&type=chunk) [Discontinued Operations](index=33&type=section&id=Discontinued%20Operations) In March 2020, the company **suspended all China operations**, with their financial results now reported as discontinued operations - In March 2020, the Board of Directors decided to **suspend all operations in China**, with the results of these operations presented as discontinued operations[172](index=172&type=chunk) Results from Discontinued Operations (in thousands) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Revenues | $0 | $108 | | Net loss from discontinued operations | $(194) | $(1,052) | [Financial Statements and Supplementary Data](index=40&type=section&id=ITEM%208%20-%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) The FY2020 financial statements report a **$4.35 million** net loss on **$4.46 million** revenues, with the auditor highlighting going concern uncertainty and material weaknesses in controls Key Financial Metrics (FY 2020) | Metric | Amount (in millions) | | :--- | :--- | | Total Revenues | $4.46 | | Loss from Continuing Operations | $(4.16) | | Net Loss | $(4.35) | | Total Assets | $8.67 | | Total Liabilities | $5.33 | | Accumulated Deficit | $(93.02) | - The independent auditor's report expresses **substantial doubt** about the company's ability to continue as a **going concern**, citing significant working capital deficiency and recurring losses[250](index=250&type=chunk) - The auditor identified **Revenue Recognition** and **Allowance for Doubtful Accounts** as **critical audit matters**, noting challenges due to **material weaknesses** in internal controls related to these areas[256](index=256&type=chunk)[257](index=257&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - Subsequent to year-end, the company raised **$1.0 million** in a private placement in February 2021 and entered an agreement to acquire a **45.6% interest** in RemoteMore USA, Inc. in March 2021[366](index=366&type=chunk)[368](index=368&type=chunk) [Controls and Procedures](index=40&type=section&id=ITEM%209A%20-%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls were **ineffective** as of December 31, 2020, due to material weaknesses in revenue recognition, doubtful accounts, and formal accounting procedures - Management, including the CEO and Interim CFO, concluded that the company's disclosure controls and procedures were **not effective** as of December 31, 2020[217](index=217&type=chunk)[220](index=220&type=chunk) - **Material weaknesses** were identified in three key areas: (1) **revenue recognition** policies for partner sharing arrangements, (2) procedures for estimating **allowance for doubtful accounts**, and (3) **lack of formal accounting procedures**, especially for foreign subsidiary data[224](index=224&type=chunk) - Remediation efforts during 2020 included hiring experienced accounting personnel, engaging an outside consultant, and improving financial reporting processes, but these measures **did not fully remediate** the identified weaknesses[220](index=220&type=chunk)[225](index=225&type=chunk)[234](index=234&type=chunk) [PART III](index=42&type=section&id=PART%20III) [Directors, Executive Officers and Corporate Governance](index=42&type=section&id=ITEM%2010%20-%20DIRECTORS,%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information on directors and executive officers is **incorporated by reference** from the 2021 Proxy Statement, and the company has adopted a Code of Business Conduct and Ethics - Most information required by this item is **incorporated by reference** from the 2021 Proxy Statement[230](index=230&type=chunk) - The company has adopted a **Code of Business Conduct and Ethics** applicable to all employees, officers, and directors, which can be found on its website[231](index=231&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=42&type=section&id=ITEM%2012%20-%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Security ownership information is referenced from the 2021 Proxy Statement, with **272,901** securities issuable under equity plans and **514,780** remaining available as of December 31, 2020 Equity Compensation Plan Information (as of Dec 31, 2020) | Plan category | Securities to be issued upon exercise | Weighted-average exercise price | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Approved by shareholders | 272,901 | $5.24 | 514,780 | | **Total** | **272,901** | **$5.24** | **514,780** | [PART IV](index=44&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=44&type=section&id=ITEM%2015%20-%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all exhibits filed with the Annual Report, including corporate documents and certifications, and directs to financial statements starting on page **F-1** - This item lists the financial statements filed with the report, which can be found starting on page **F-1**[241](index=241&type=chunk) - An **index of all exhibits** filed as part of the Annual Report is provided, including agreements, corporate governance documents, and required certifications[243](index=243&type=chunk)[245](index=245&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or For the quarterly period ended September 30, 2020 For the transition period from ________ to________ Commission file number: 001-35824 Professional Diversity Network, Inc. (Exact name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) 55 E. Monroe Street, Suite 2120 Ch ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Form 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Professional Diversity Network, Inc. Washington, D.C. 20549 For the transition period from ________ to________ Commission file number: 001-35824 (Exact name of Registrant as Specified in Its Charter) (State or ...

Form 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or [ ] 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: 001-35824 Professional Diversity Network, Inc. (Exact name of Registrant as Specified in Its Charter) (State o ...

Business Segments and Operations - The Professional Diversity Network (PDN) operates two main segments: PDN Network, which contributed 54% of revenues, and NAPW Network, which contributed 46% in 2019[24]. - As of December 31, 2019, the NAPW Network had approximately 949,000 members, providing significant networking opportunities for women professionals[27]. - The company established subsidiaries in Hong Kong and China to facilitate business expansion, although operations in China were suspended in December 2019[15][17]. - The NAPW Network hosts virtual events that attract approximately 1,000 registrants, enhancing member engagement and networking opportunities[29]. - The company had approximately 1,000 companies utilizing its recruitment products and services as of December 31, 2019[40]. - The NAPW Network is the largest women-only networking organization in the United States, with approximately 949,000 members across all 50 states, Puerto Rico, and the U.S. Virgin Islands[50]. - The company is winding down its offices in the People's Republic of China, including locations in Guangzhou, Jiangxi, and Beijing[53]. - The company has suspended its operations in China since December 2019 and decided to discontinue all operations in the People's Republic of China on March 4, 2020[73]. Financial Performance - The company recorded a net loss from continuing operations of approximately $2.8 million for the year ended December 31, 2019, compared to a net loss of $13.2 million for the year ended December 31, 2018[79]. - Revenues declined from $7.6 million in 2018 to $5.0 million in 2019, while costs and expenses decreased significantly from $22.2 million to $8.0 million during the same period[79]. - The company used $3.3 million in cash flow from continuing operations for the year ended December 31, 2019[79]. - The company plans to increase revenues and implement aggressive cost management to achieve profitability and positive cash flow from operations[79]. - Total revenues decreased by $2,596,000, or 34.1%, from $7,621,000 in 2018 to $5,025,000 in 2019, primarily due to a focus on reducing sales and operational workforce[189]. - Recruitment services revenue constituted 48.8% of total revenue in 2019, up from 33.7% in 2018, while membership fees dropped to 48.3% from 62.6%[176]. - Adjusted EBITDA improved to a loss of $2,049,000 in 2019 from a loss of $2,749,000 in 2018[187]. - The effective income tax rate for 2019 was 6.0%, resulting in an income tax benefit of $177,000, down from $1,353,000 in 2018, a decrease of 86.9%[209]. Market Opportunities and Strategies - The diversity recruitment market is projected to grow significantly, with multicultural groups expected to make up 39.6% of the U.S. population by 2018, increasing to a numeric majority by 2044[23]. - The buying power of minority groups is projected to increase from $13.9 trillion in 2016 to $16.6 trillion by 2021, indicating a strong market opportunity[26]. - The company's strategy includes launching new products and services, maximizing revenue through synergies, and expanding diversity recruitment offerings[23]. - The diversity recruitment business has expanded to include executive placement services, focusing on securing diverse talent in management and executive roles[21]. - The company aims to leverage its assets to transform from historical losses to future profits by enhancing sales and refining operations[20]. - The company launched a diversity placement service in 2018, focusing on high-demand positions in digital transformation and finance, with employers paying a monthly license fee plus a percentage of the first year's salary for sourced candidates[44]. - The company is exploring partnerships with service providers to enhance offerings for job seekers and employers, including a partnership with Diverst for Diversity & Inclusion software[39]. Challenges and Risks - The company faces significant competition in the online professional networking market, particularly from larger firms like LinkedIn and Monster Worldwide, which may impact sales and operational results[81]. - The existing global economic environment has negatively affected the company's operations, with demand for services sensitive to economic activity levels[102]. - The company may not be able to successfully identify and complete acquisitions to meet its growth strategy, which could hinder service expansion[86]. - The company’s systems are vulnerable to cyber-attacks and other catastrophic occurrences, which could lead to significant service interruptions and loss of customer trust[94]. - The company's growth strategy may be jeopardized by changing social trends, including increased privacy concerns and shifting demographics, which could lead to a loss of members and adversely affect financial results[103]. - The regulatory environment promoting workplace diversity may change, potentially decreasing incentives for employers to seek diverse candidates, which could materially impact revenues[104]. - Ongoing litigation may result in substantial costs and disrupt normal business operations, potentially affecting financial results[115]. Corporate Governance and Compliance - The company plans to submit a compliance plan to Nasdaq to regain listing status after trading was suspended due to governance issues[18][19]. - The Nasdaq Stock Market suspended the trading of the company's common stock due to non-compliance with listing rules[75]. - The company received a letter from Nasdaq on January 2, 2020, indicating non-compliance due to not holding an annual meeting of shareholders within twelve months of the fiscal year end[125]. - The company submitted a plan to Nasdaq on March 6, 2020, to regain compliance, which could grant an exception of up to 180 days from the fiscal year end[126]. - As of April 24, 2019, the company reported stockholders' equity of $(1,110,788), which is below the minimum requirement of $2.5 million for continued listing on the Nasdaq[123]. - Following private placements, the company's shareholders' equity increased to $3,662,223 as of September 16, 2019, regaining compliance with Nasdaq Listing Rule 5550(b)[124]. User Engagement and Technology - The company has developed a secure, work-from-home technology for its sales force, aimed at reducing overhead costs and increasing profitability[45]. - The company utilizes a combination of direct mail and digital strategies for member acquisition, resulting in efficient lead generation and a recurring cash flow model[50]. - A substantial majority of visits to the company's websites are generated by a minority of users, indicating potential issues with user engagement and retention[101]. - The company must continually attract new members to the NAPW Network to achieve revenue projections; failure to do so could result in slower revenue growth or decline[84]. - If the company fails to effectively scale its technology and network infrastructure, it may face website performance issues that could deter users[92]. - The company relies heavily on its information systems, and any impairment or failure to develop technology could significantly harm its business[89]. - Outdated or inaccurate member profiles could hinder the company's ability to realize the full potential of its networks, negatively impacting future growth and customer confidence[105]. Cost Management and Operational Efficiency - The company plans to increase revenues and implement aggressive cost management to achieve profitability and positive cash flow from operations[79]. - Total costs and expenses for the year ended December 31, 2019 were $8,021,000, a decrease of $14,139,000, or 64.0%, from $22,160,000 in 2018[198]. - Sales and marketing expenses decreased by $1,496,000, or 40.9%, to $2,159,000, with a significant reduction of 71.7% in the NAPW segment[202]. - General and administrative expenses decreased by $2,241,000, or 34.4%, to $4,274,000, with a 42.1% decrease in the NAPW segment[204]. - Depreciation and amortization expenses decreased by $1,896,000, or 72.9%, to $704,000, primarily due to a prior impairment charge[207].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 or [ ] 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: 001-35824 Professional Diversity Network, Inc. (Exact name of registrant as specified in its Charter) Del ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 or [ ] 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: 001-35824 Professional Diversity Network, Inc. (Exact name of registrant as specified in its Charter) Delaware ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 or [ ] 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: 001-35824 Professional Diversity Network, Inc. (Exact name of registrant as specified in its Charter) (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 or [ ] 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: 001-35824 Professional Diversity Network, Inc. (Exact name of Registrant as Specified in Its Charter) Delaware 80-0 ...