Professional Diversity Network(IPDN) - 2022 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements The company reported increased revenue driven by a new segment but a wider net loss and a going concern issue Condensed Consolidated Balance Sheet (Unaudited) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Current Assets | $5,243,685 | $5,597,193 | | Total Assets | $8,146,925 | $8,984,773 | | Total Current Liabilities | $4,896,497 | $5,179,570 | | Total Liabilities | $5,561,433 | $5,876,868 | | Total Stockholders' Equity | $2,585,492 | $3,107,905 | Condensed Consolidated Statement of Operations (Unaudited) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Total Revenues | $2,052,880 | $1,484,852 | | Total Costs and Expenses | $2,969,093 | $2,308,329 | | Loss from Continuing Operations | ($916,213) | ($823,477) | | Net Loss | ($907,816) | ($770,689) | | Net Loss per Share (Basic & Diluted) | ($0.06) | ($0.06) | Condensed Consolidated Statement of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($288,583) | ($733,734) | | Net cash used in investing activities | ($1,791) | ($6,128) | | Net cash provided by financing activities | ($139,979) | $1,000,000 | | Net (decrease) increase in cash | ($429,111) | $224,774 | | Cash and cash equivalents, end of period | $2,973,586 | $2,342,343 | - The company's history of operating losses, an accumulated deficit of $96.5 million, and negative cash flow raise substantial doubt about its ability to continue as a going concern[26] Management's Discussion and Analysis of Financial Condition and Results of Operations Revenue grew 38.3% due to the RemoteMore acquisition, but rising costs widened the net loss from continuing operations Total Revenue by Source (Q1 2022 vs Q1 2021) | Revenue Source | Q1 2022 (in thousands) | Q1 2021 (in thousands) | Change (Dollars) | Change (Percent) | | :--- | :--- | :--- | :--- | :--- | | Membership fees and related services | $196 | $264 | ($68) | (25.8)% | | Recruitment services | $1,333 | $1,175 | $158 | 13.4% | | Contracted software development | $477 | $0 | $477 | 100.0% | | Consumer advertising and marketing | $47 | $45 | $2 | 4.4% | | Total Revenues | $2,053 | $1,484 | $569 | 38.3% | Total Costs and Expenses (Q1 2022 vs Q1 2021) | Expense Category | Q1 2022 (in thousands) | Q1 2021 (in thousands) | Change (Dollars) | Change (Percent) | | :--- | :--- | :--- | :--- | :--- | | Cost of revenues | $862 | $261 | $601 | 230.3% | | Sales and marketing | $719 | $700 | $19 | 2.7% | | General and administrative | $1,107 | $1,318 | ($211) | (16.0)% | | Depreciation and amortization | $281 | $29 | $252 | 869.0% | | Total Costs and Expenses | $2,969 | $2,308 | $661 | 28.6% | - The company's liquidity shows cash of $2.97 million and a working capital surplus, but recurring negative cash flows and an accumulated deficit raise substantial doubt about its ability to continue as a going concern[156][157] Reconciliation of Net Loss to Adjusted EBITDA (Non-GAAP) | Metric (in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Loss from Continuing Operations | ($890) | ($756) | | Stock-based compensation | $124 | $106 | | Litigation settlement reserve | $17 | $0 | | Loss attributable to noncontrolling interest | $205 | $0 | | Depreciation and amortization | $281 | $30 | | Interest and other income | ($3) | $1 | | Income tax expense (benefit) | ($26) | ($67) | | Adjusted EBITDA | ($292) | ($686) | Quantitative and Qualitative Disclosures About Market Risk This item is not applicable to the company for this reporting period - The company has indicated that there are no applicable quantitative and qualitative disclosures about market risk to report[186] Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - Based on an evaluation as of March 31, 2022, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[187] - There were no material changes to the company's internal control over financial reporting during the first quarter of fiscal 2022[188] PART II - OTHER INFORMATION Legal Proceedings The company is involved in two notable legal proceedings for which it has recorded financial reserves - Subsidiary NAPW is a defendant in a case with a judgment of $855,002, for which the company has reserved[190] - The company and NAPW are parties to a proceeding alleging violations of the Fair Labor Standards Act, with a $450,000 litigation settlement reserve recorded[191] Risk Factors The company refers to its 2021 Annual Report for a detailed discussion of risk factors - For a detailed discussion of risk factors, the company refers to Part I, Item 1A, "Risk Factors" in its 2021 Annual Report on Form 10-K[193] Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased approximately $140,000 of its common stock under its existing buyback program - The company has a share repurchase program authorizing the purchase of up to $2.0 million of its outstanding common shares[194] Share Repurchases in Q1 2022 | Period | Total Shares Purchased | Average Price Paid per Share | Total Cost (approx) | | :--- | :--- | :--- | :--- | | Jan 2022 | 0 | $0.00 | $0 | | Feb 2022 | 64,770 | $0.98 | $63,475 | | Mar 2022 | 77,217 | $0.98 | $75,673 | | Total Q1 2022 | 141,987 | $0.9789 | $140,000 | - As of March 31, 2022, the company had approximately $1,860,000 of repurchase authority remaining under the current Stock Buyback Plan[194] Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - None[195] Mine Safety Disclosures This item is not applicable to the company - Not applicable[196] Other Information The company reported no other information for this period - None[197] Exhibits The filing includes required CEO/CFO certifications and Inline XBRL financial data files - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1) and various Inline XBRL documents for interactive data[198]