Professional Diversity Network(US:IPDN)2025-11-14 21:04Revenue Performance - Total revenues for the three months ended September 30, 2025, increased approximately $38,000, or 2.2%, to approximately $1,732,000 from approximately $1,694,000 during the same period in the prior year[154]. - Recruitment services revenue decreased by approximately $767,000, or 22.3%, for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to a slowdown in corporate spending on diversity, equity, and inclusion initiatives[155][163]. - Contracted software development revenue increased by approximately $621,000, or 47.6%, for the nine months ended September 30, 2025, compared to the same period in 2024[156][163]. - The TalentAlly Network generated approximately $883,000 in revenues for the three months ended September 30, 2025, a decrease of approximately $320,000, or 26.6%, from the same period in 2024[159]. - RemoteMore revenue was approximately $768,000 for the three months ended September 30, 2025, an increase of approximately $378,000, or 96.9%, compared to the same period in the prior year[161]. - Membership fees and related services revenue decreased by approximately $74,000, or 22.0%, for the nine months ended September 30, 2025, compared to the same period in 2024[156][163]. - The NAPW Network revenues decreased by approximately $20,000, or 19.8%, for the three months ended September 30, 2025, due to lower renewal rates and reduced acquisition of new members[160]. Cost and Expense Analysis - For the three months ended September 30, 2025, cost of revenues was approximately $969,000, an increase of $272,000 or 39.0% from $697,000 in the prior year, primarily due to a $322,000 increase in RemoteMore's contract costs[165]. - For the nine months ended September 30, 2025, cost of revenues was approximately $2,617,000, an increase of $641,000 or 32.4% from $1,976,000 in the prior year, mainly driven by a $550,000 increase in RemoteMore's contract costs[166]. - Sales and marketing expenses for the three months ended September 30, 2025 were approximately $434,000, a decrease of $200,000 or 31.5% from $634,000 in the prior year, attributed to reduced payroll and commission costs[167]. - General and administrative expenses increased by approximately $1,919,000 or 262.5% to $2,650,000 for the three months ended September 30, 2025, primarily due to a $1,650,000 consulting fee related to a new strategic initiative[169]. - For the nine months ended September 30, 2025, total costs and expenses were $8,440,000, an increase of $1,520,000 or 22.0% from $6,920,000 in the prior year[174]. - Costs and expenses related to RemoteMore increased by approximately $398,000 or 86.0% for the three months ended September 30, 2025, mainly due to a $322,000 increase in costs of sales[178]. - Corporate overhead costs increased by approximately $1,812,000 or 447.4% for the three months ended September 30, 2025, primarily due to a $1,650,000 consulting fee related to the RWA service[180]. - For the nine months ended September 30, 2025, costs and expenses related to Corporate Overhead increased by approximately $1,787,000 or 137.7%[181]. - The TalentAlly Network segment saw a decrease in costs and expenses of approximately $222,000 or 20.0% for the three months ended September 30, 2025, primarily due to reductions in payroll and sales-related costs[174]. Net Loss and Financial Position - For the three months ended September 30, 2025, the consolidated net loss from continuing operations was approximately $2,375,000, an increase of 462.8% compared to a net loss of approximately $422,000 for the same period in 2024[186]. - For the nine months ended September 30, 2025, the consolidated net loss from continuing operations was approximately $3,608,000, an increase of 98.8% compared to a net loss of approximately $1,815,000 for the same period in 2024[186]. - Cash and cash equivalents decreased from approximately $1,731,000 at December 31, 2024, to approximately $265,000 at September 30, 2025[189]. - Working capital shifted from a surplus of $271,000 at December 31, 2024, to a deficit of approximately $2,128,000 at September 30, 2025[189]. - Net cash used in operating activities for the nine months ended September 30, 2025, was approximately $3,496,000, compared to $1,324,000 for the same period in 2024[199]. - Net cash used in investing activities during the nine months ended September 30, 2025, was approximately $4,204,000, primarily related to an investment in AI Geometric Ltd[201]. - Net cash provided by financing activities during the nine months ended September 30, 2025, was approximately $6,234,000, representing proceeds from the sale of common stock and short-term debt[203]. - The company raised gross proceeds of $400,000 through the issuance of unsecured convertible promissory notes in July 2025 to address liquidity needs[192]. - The company has an accumulated deficit of approximately $105,970,000 as of September 30, 2025[189]. Strategic Initiatives and Risks - The company is aggressively expanding into new business areas, including the acquisition and monetization of entertainment assets and exploration of Web 3.0 technologies, which carries substantial execution risk[144]. - The decline in recruitment services revenue is attributed to a shifting political and legal landscape affecting corporate spending on DEI initiatives[155]. - The company is committed to completing the acquisition of musical compositions from High Wave Corp for a total consideration of $10,000,000, with payments due by November 30, 2025[194]. Accounting and Financial Reporting - Accounts receivable consists mainly of uncollateralized amounts billed to customers, generally due within 30 to 90 days[216]. - The company adopted ASU 2016-13 in Q1 fiscal 2023, requiring expected credit losses to be measured over the lifetime of financial instruments[217]. - Goodwill is tested for impairment annually, with the last assessment on December 31, and adjustments may be made during a one-year measurement period[221][222]. - Revenue sources include recruitment revenue, consumer marketing, event revenues, and membership subscription fees, with recruitment revenue recognized upon service performance[226]. - For the nine months ended September 30, 2025 and 2024, approximately 1% and 6% of recruitment services revenue came from an alliance relationship[231]. - The company leases office space under a non-cancelable operating lease expiring in September 2027, with periodic rent increases[232]. - Recent accounting pronouncements include ASU 2023-09, effective for fiscal years beginning after December 15, 2024, enhancing income tax disclosures[237]. - ASU 2024-03 requires disaggregated disclosures of certain expense categories, effective for annual reporting periods beginning after December 15, 2026[238].