Delaware
(State or Other Jurisdiction of Incorporation or Organization)
|
80-0900177
(I.R.S. Employer Identification No.)
|
801 W. Adams Street, Suite 600, Chicago, Illinois 60607
(Address of Principal Executive Offices) (Zip Code)
Telephone: (312) 614-0950
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Non-accelerated filer ☐
|
Smaller reporting company ☒
|
Page
|
|||
PART I
|
1
|
||
ITEM 1.
|
FINANCIAL STATEMENTS
|
1
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS |
24
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
37
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
37
|
|
PART II
|
38
|
||
ITEM 1.
|
LEGAL PROCEEDINGS
|
38
|
|
ITEM 1A.
|
RISK FACTORS
|
39
|
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
39
|
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
39
|
|
ITEM 4.
|
MINE SAFETY DISCLOSURE
|
39
|
|
ITEM 5.
|
OTHER INFORMATION
|
40
|
|
ITEM 6.
|
EXHIBITS
|
40
|
Professional Diversity Network, Inc.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
September 30,
|
December 31,
|
||||||
|
2016
|
2015
|
||||||
|
(Unaudited)
|
(Revised) | ||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
515,963
|
$
|
2,070,693
|
||||
Accounts receivable, net
|
1,839,474
|
2,510,530
|
||||||
Short-term investments
|
-
|
500,000
|
||||||
Incremental direct costs
|
547,616
|
1,023,916
|
||||||
Prepaid license fee
|
-
|
112,500
|
||||||
Prepaid expenses and other current assets
|
229,689
|
411,592
|
||||||
Total current assets
|
3,132,742
|
6,629,231
|
||||||
|
||||||||
Property and equipment, net
|
313,622
|
444,398
|
||||||
Capitalized technology, net
|
240,463
|
456,523
|
||||||
Goodwill
|
20,201,190
|
20,201,190
|
||||||
Intangible assets, net
|
9,900,539
|
12,051,839
|
||||||
Merchant reserve
|
1,426,927
|
1,260,849
|
||||||
Security deposits
|
189,375
|
383,786
|
||||||
Other assets
|
1,049,026
|
-
|
||||||
Total assets
|
$
|
36,453,884
|
$
|
41,427,816
|
||||
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
5,359,151
|
$
|
4,465,941
|
||||
Accrued expenses
|
1,519,491
|
837,712
|
||||||
Deferred revenue
|
6,406,542
|
9,966,893
|
||||||
Customer deposits
|
-
|
112,500
|
||||||
Promissory note
|
445,000
|
445,000
|
||||||
Total current liabilities
|
13,730,184
|
15,828,046
|
||||||
|
||||||||
Deferred tax liability
|
3,724,816
|
4,942,908
|
||||||
Line of credit – Master Credit Facility, net of unamortized debt issuance costs
|
827,679
|
-
|
||||||
Deferred rent
|
55,434
|
45,155
|
||||||
Other liabilities
|
47,367
|
426,267
|
||||||
Total liabilities
|
18,385,480
|
21,242,376
|
||||||
|
||||||||
Commitments and contingencies
|
||||||||
|
||||||||
Stockholders' Equity
|
||||||||
Common stock, $0.01 par value; 45,000,000 shares authorized; 1,815,232
shares issued as of September 30, 2016 and December 31, 2015; and 1,808,628 shares outstanding as of September 30, 2016 and December 31, 2015 |
18,097
|
18,097
|
||||||
Additional paid in capital
|
64,956,199
|
63,554,194
|
||||||
Accumulated deficit
|
(46,868,775
|
)
|
(43,349,734
|
)
|
||||
Treasury stock, at cost; 1,048 shares at September 30, 2016 and December 31, 2015
|
(37,117
|
)
|
(37,117
|
)
|
||||
Total stockholders' equity
|
18,068,404
|
20,185,440
|
||||||
|
||||||||
Total liabilities and stockholders' equity
|
$
|
36,453,884
|
$
|
41,427,816
|
Professional Diversity Network, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
|
(Revised) | (Revised) | ||||||||||||||
Revenues
|
||||||||||||||||
Membership fees and related services
|
$
|
3,748,334
|
$
|
5,652,873
|
$
|
13,047,652
|
$
|
18,885,308
|
||||||||
Lead generation
|
1,554,370
|
2,334,276
|
4,489,919
|
7,853,402
|
||||||||||||
Recruitment services
|
954,887
|
830,250
|
2,295,556
|
2,432,951
|
||||||||||||
Product sales and other
|
52,857
|
330,769
|
544,440
|
631,198
|
||||||||||||
Consumer advertising and marketing solutions
|
49,719
|
73,011
|
176,771
|
209,097
|
||||||||||||
Total revenues
|
6,360,167
|
9,221,179
|
20,554,338
|
30,011,956
|
||||||||||||
|
||||||||||||||||
Costs and expenses:
|
||||||||||||||||
Cost of revenues
|
745,159
|
1,464,214
|
2,433,550
|
4,647,520
|
||||||||||||
Sales and marketing
|
3,064,454
|
5,132,077
|
10,314,145
|
17,226,640
|
||||||||||||
General and administrative
|
3,010,862
|
3,748,138
|
9,428,493
|
11,593,955
|
||||||||||||
Impairment expense
|
-
|
26,744,249
|
-
|
26,744,249
|
||||||||||||
Depreciation and amortization
|
819,894
|
925,684
|
2,498,136
|
2,730,880
|
||||||||||||
Loss on sale of property and equipment
|
-
|
32,649
|
-
|
32,649
|
||||||||||||
Total costs and expenses
|
7,640,369
|
38,047,011
|
24,674,324
|
62,975,893
|
||||||||||||
|
||||||||||||||||
Loss from operations
|
(1,280,202
|
)
|
(28,825,832
|
)
|
(4,119,986
|
)
|
(32,963,937
|
)
|
||||||||
|
||||||||||||||||
Other (expense) income
|
||||||||||||||||
Interest expense
|
(215,781
|
)
|
(9,229
|
)
|
(216,948
|
)
|
(84,339
|
)
|
||||||||
Interest and other income
|
150
|
2,382
|
801
|
25,566
|
||||||||||||
Other income (expense), net
|
(215,631
|
)
|
(6,847
|
)
|
(216,147
|
)
|
(58,773
|
)
|
||||||||
|
||||||||||||||||
Change in fair value of warrant liability
|
(401,000
|
)
|
2,224
|
(401,000
|
)
|
93,784
|
||||||||||
|
||||||||||||||||
Loss before income tax benefit
|
(1,896,833
|
)
|
(28,830,455
|
)
|
(4,737,133
|
)
|
(32,928,926
|
)
|
||||||||
Income tax expense (benefit)
|
(623,699
|
)
|
2,976,217
|
(1,218,092
|
)
|
1,509,395
|
||||||||||
Net loss
|
$
|
(1,273,134
|
)
|
$
|
(31,806,672
|
)
|
$
|
(3,519,041
|
)
|
$
|
(34,438,321
|
)
|
||||
|
||||||||||||||||
Net loss per common share, basic and diluted
|
$
|
(0.70
|
)
|
$
|
(17.59
|
)
|
$
|
(1.94
|
)
|
$
|
(20.05
|
)
|
||||
|
||||||||||||||||
Weighted average shares used in computing net loss
per common share:
|
||||||||||||||||
Basic and diluted
|
1,809,676
|
1,808,099
|
1,809,676
|
1,717,816
|
Professional Diversity Network, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
December 31, 2015
|
||||||||||||
As previously
|
||||||||||||
reported
|
Adjustment
|
As revised
|
||||||||||
Deferred revenue
|
$
|
7,507,176
|
$
|
2,459,717
|
$
|
9,966,893
|
||||||
Total current liabilities
|
13,368,329
|
2,459,717
|
15,828,046
|
|||||||||
Total liabilities
|
18,782,659
|
2,459,717
|
21,242,376
|
|||||||||
Accumulated deficit
|
(40,890,017
|
)
|
(2,459,717
|
)
|
(43,349,734
|
)
|
||||||
Stockholders’ equity
|
$
|
22,645,157
|
$
|
(2,459,717
|
)
|
$
|
20,185,440
|
Three Months Ended
|
||||||||||||
September 30, 2015
|
||||||||||||
As previously
|
||||||||||||
reported
|
Adjustment
|
As revised
|
||||||||||
Revenues
|
$
|
9,343,312
|
$
|
(122,133
|
)
|
$
|
9,221,179
|
|||||
Impairment expense
|
24,717,157
|
2,027,092
|
26,744,249
|
|||||||||
Loss from operations
|
(26,676,607
|
)
|
(2,149,225
|
)
|
(28,825,832
|
)
|
||||||
Net loss
|
$
|
(29,657,447
|
)
|
$
|
(2,149,225
|
)
|
$
|
(31,806,672
|
)
|
|||
Net loss per share:
|
||||||||||||
Basic and Diluted (as adjusted for the Reverse Stock Split)
|
$
|
(16.40
|
)
|
$
|
(1.19
|
)
|
$
|
(17.59
|
)
|
Nine Months Ended
|
||||||||||||
September 30, 2015
|
||||||||||||
As previously
|
||||||||||||
reported
|
Adjustment
|
As revised
|
||||||||||
Revenues
|
$
|
30,444,581
|
$
|
(432,625
|
)
|
$
|
30,011,956
|
|||||
Impairment expense
|
24,717,157
|
2,027,092
|
26,744,249
|
|||||||||
Loss from operations
|
(30,504,220
|
)
|
(2,459,717
|
)
|
(32,963,937
|
)
|
||||||
Net loss
|
$
|
(31,978,604
|
)
|
$
|
(2,459,717
|
)
|
$
|
(34,438,321
|
)
|
|||
Net loss per share:
|
||||||||||||
Basic and Diluted (as adjusted for the Reverse Stock Split)
|
$
|
(18.62
|
)
|
$
|
(1.43
|
)
|
$
|
(20.05
|
)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
Nine Months Ended
|
||||||||||||
September 30, 2015
|
||||||||||||
As previously
|
||||||||||||
reported
|
Adjustment
|
As revised
|
||||||||||
Net loss
|
$
|
(31,978,604
|
)
|
$
|
(2,459,717
|
)
|
$
|
(34,438,321
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Impairment expense
|
24,717,157
|
2,027,092
|
26,744,249
|
|||||||||
Changes in operating assets and liabilities: deferred revenue
|
(1,522,427
|
)
|
432,625
|
(1,089,802
|
)
|
|||||||
Cash used in operating activities
|
$
|
(4,206,779
|
)
|
$
|
—
|
$
|
(4,206,779
|
)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
|
|
2016
|
|
|
2015
|
|
||
Warrants to purchase common stock
|
|
|
514,064
|
|
|
|
45,314
|
|
Stock options
|
|
|
72,886
|
|
|
|
19,732
|
|
Unvested restricted stock
|
|
|
5,556
|
|
|
|
25,002
|
|
|
|
|
592,506
|
|
|
|
90,048
|
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
|
September 30,
2016 |
December 31,
2015
|
||||||
Capitalized cost:
|
||||||||
Balance, beginning of period
|
$
|
1,888,791
|
$
|
1,469,432
|
||||
Additional capitalized cost
|
-
|
419,359
|
||||||
Balance, end of period
|
$
|
1,888,791
|
$
|
1,888,791
|
||||
|
||||||||
Accumulated amortization:
|
||||||||
Balance, beginning of period
|
$
|
1,432,268
|
$
|
943,362
|
||||
Provision for amortization
|
216,060
|
488,906
|
||||||
Balance, end of period
|
$
|
1,648,328
|
$
|
1,432,268
|
||||
Capitalized Technology, net
|
$
|
240,463
|
$
|
456,523
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
September 30, 2016
|
Useful Lives
(Years)
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net Carrying
Amount
|
||||||||||||
Long-lived intangible assets:
|
||||||||||||||||
Sales Process
|
10
|
$
|
3,970,000
|
$
|
(799,514
|
)
|
$
|
3,170,486
|
||||||||
Paid Member Relationships
|
5
|
890,000
|
(358,472
|
)
|
531,528
|
|||||||||||
Member Lists
|
5
|
8,957,000
|
(3,607,681
|
)
|
5,349,319
|
|||||||||||
Developed Technology
|
3
|
978,000
|
(636,666
|
)
|
341,334
|
|||||||||||
Trade Name/Trademarks
|
4
|
480,000
|
(239,861
|
)
|
240,139
|
|||||||||||
Customer Relationships
|
5
|
280,000
|
(102,667
|
)
|
177,333
|
|||||||||||
|
15,555,000
|
(5,744,861
|
)
|
9,810,139
|
||||||||||||
Indefinite-lived intangible assets:
|
||||||||||||||||
Trade Name
|
90,400
|
|||||||||||||||
|
||||||||||||||||
Intangible assets, net
|
$
|
9,900,539
|
December 31, 2015
|
Useful Lives
(Years)
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net Carrying
Amount
|
||||||||||||
Long-lived intangible assets:
|
||||||||||||||||
Sales Process
|
10
|
$
|
3,970,000
|
$
|
(501,764
|
)
|
$
|
3,468,236
|
||||||||
Paid Member Relationships
|
5
|
890,000
|
(224,972
|
)
|
665,028
|
|||||||||||
Member Lists
|
5
|
8,957,000
|
(2,264,131
|
)
|
6,692,869
|
|||||||||||
Developed Technology
|
3
|
978,000
|
(392,167
|
)
|
585,833
|
|||||||||||
Trade Name/Trademarks
|
4
|
480,000
|
(149,860
|
)
|
330,140
|
|||||||||||
Customer Relationships
|
5
|
280,000
|
(60,667
|
)
|
219,333
|
|||||||||||
|
15,555,000
|
(3,593,561
|
)
|
11,961,439
|
||||||||||||
Indefinite-lived intangible assets:
|
||||||||||||||||
Trade Name
|
90,400
|
|||||||||||||||
|
||||||||||||||||
Intangible assets, net
|
$
|
12,051,839
|
Years ending December 31,
|
||||
2016 (three months)
|
$
|
717,100
|
||
2017
|
2,802,233
|
|||
2018
|
2,563,872
|
|||
2019
|
1,846,697
|
|||
2020
|
397,000
|
|||
2021
|
397,000
|
|||
Thereafter
|
1,086,237
|
|||
|
$
|
9,810,139
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
Total Master Credit Facility
|
$
|
1,942,625
|
||
Less: Unamortized debt issuance costs
|
(1,114,946
|
)
|
||
Total Master Credit Facility, net of unamortized debt issuance costs
|
827,679
|
|||
Less: Current portion of Master Credit Facility
|
-
|
|||
Long-term portion
|
$
|
827,679
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
(in Years)
|
Aggregate
Intrinsic
Value
|
||||||||||||
Outstanding - December 31, 2015
|
19,653
|
$
|
30.00
|
8.0
|
$
|
-
|
||||||||||
Granted
|
57,500
|
8.19
|
||||||||||||||
Exercised
|
-
|
-
|
||||||||||||||
Forfeited/Canceled/Expired
|
(4,287
|
)
|
(31.81
|
)
|
||||||||||||
Outstanding – September 30, 2016
|
72,866
|
$
|
12.69
|
9.5
|
$
|
-
|
||||||||||
|
||||||||||||||||
Exercisable – September 30, 2016
|
30,264
|
$
|
16.29
|
9.2
|
$
|
-
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
|
Number of
Options
|
Weighted
Average
Grant
Date Fair
Value
|
||||||
Unvested - December 31, 2015
|
13,571
|
$
|
13.76
|
|||||
Granted
|
57,500
|
4.01
|
||||||
Vested
|
(27,552
|
)
|
(7.07
|
)
|
||||
Forfeited/Canceled/Expired
|
(917
|
)
|
(13.83
|
)
|
||||
Unvested – September 30, 2016
|
42,602
|
$
|
4.93
|
Risk-free interest rate
|
|
|
1.14
|
%
|
Expected dividend yield
|
|
|
0.00
|
%
|
Expected volatility
|
|
|
53.96
|
%
|
Expected term
|
|
5.5 years
|
|
Number of
Warrants
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
(in Years)
|
Aggregate
Intrinsic
Value
|
||||||||||||
Outstanding
–
December 31, 2015
|
45,314
|
$
|
66.72
|
3.5
|
$
|
-
|
||||||||||
Granted
|
468,750
|
6.80
|
||||||||||||||
Exercised
|
-
|
-
|
||||||||||||||
Forfeited/Canceled/Expired
|
-
|
-
|
||||||||||||||
Outstanding – September 30, 2016
|
514,064
|
$
|
12.09
|
4.7
|
$
|
2,127,813
|
||||||||||
|
||||||||||||||||
Exercisable – September 30, 2016
|
389,064
|
$
|
9.54
|
4.5
|
$
|
2,127,813
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
|
Number of
Warrants
|
Weighted
Average
Grant
Date Fair
Value
|
||||||
Unvested
–
December 31, 2015
|
-
|
$
|
-
|
|||||
Granted
|
468,750
|
1.67
|
||||||
Vested
|
(468,750
|
)
|
(1.67
|
)
|
||||
Forfeited/Canceled/Expired
|
-
|
-
|
||||||
Unvested – September 30, 2016
|
-
|
$
|
-
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
August 10,
|
June 30,
|
|||||||
|
2016
|
2016
|
||||||
Strike price
|
$
|
2.00
|
$
|
2.00
|
||||
Market price
|
$
|
6.08
|
$
|
3.20
|
||||
Expected life
|
5 years
|
5 years
|
||||||
Risk-free interest rate
|
1.07
|
%
|
1.01
|
%
|
||||
Dividend yield
|
0.00
|
%
|
0.00
|
%
|
||||
Volatility
|
100
|
%
|
100
|
%
|
Balance – January 1, 2016
|
$
|
-
|
||
Initial value of derivative liability
|
380,000
|
|||
Change in fair value of derivative liability
|
401,000
|
|||
Reclassification of derivative liability to additional paid in capital
|
(781,000
|
)
|
||
Balance – September 30, 2016
|
$
|
-
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
|
Three Months Ended September 30, 2016
|
|||||||||||||||
|
PDN
Network |
NAPW
Network
|
Noble Voice
|
Consolidated
|
||||||||||||
|
||||||||||||||||
Membership fees and related services
|
$
|
-
|
$
|
3,748,334
|
$
|
-
|
$
|
3,748,334
|
||||||||
Lead generation
|
-
|
-
|
1,554,370
|
1,554,370
|
||||||||||||
Recruitment services
|
954,887
|
-
|
-
|
954,887
|
||||||||||||
Products sales and other
|
-
|
52,857
|
-
|
52,857
|
||||||||||||
Consumer advertising and marketing solutions
|
49,719
|
-
|
-
|
49,719
|
||||||||||||
Total revenues
|
1,004,606
|
3,801,191
|
1,554,370
|
6,360,167
|
||||||||||||
Loss from operations
|
(118,948
|
)
|
(894,361
|
)
|
(266,893
|
)
|
(1,280,202
|
)
|
||||||||
Depreciation and amortization
|
33,471
|
738,473
|
47,950
|
819,894
|
||||||||||||
Income tax expense (benefit)
|
(222,808
|
)
|
(289,767
|
)
|
(111,124
|
)
|
(623,699
|
)
|
||||||||
Capital expenditures
|
-
|
-
|
-
|
-
|
||||||||||||
Net loss
|
(512,771
|
)
|
(604,594
|
)
|
(155,769
|
)
|
(1,273,134
|
)
|
|
Nine Months Ended September 30, 2016
|
|||||||||||||||
|
PDN
Network |
NAPW
Network
|
Noble Voice
|
Consolidated
|
||||||||||||
|
||||||||||||||||
Membership fees and related services
|
$
|
-
|
$
|
13,047,652
|
$
|
-
|
$
|
13,047,652
|
||||||||
Lead generation
|
-
|
-
|
4,489,919
|
4,489,919
|
||||||||||||
Recruitment services
|
2,295,556
|
-
|
-
|
2,295,556
|
||||||||||||
Products sales and other
|
-
|
544,440
|
-
|
544,440
|
||||||||||||
Consumer advertising and marketing solutions
|
176,771
|
-
|
-
|
176,771
|
||||||||||||
Total revenues
|
2,472,327
|
13,592,092
|
4,489,919
|
20,554,338
|
||||||||||||
Loss from operations
|
(839,840
|
)
|
(2,173,251
|
)
|
(1,106,895
|
)
|
(4,119,986
|
)
|
||||||||
Depreciation and amortization
|
130,121
|
2,207,703
|
160,312
|
2,498,136
|
||||||||||||
Income benefit
|
(373,717
|
)
|
(557,439
|
)
|
(286,936
|
)
|
(1,218,092
|
)
|
||||||||
Capital expenditures
|
-
|
-
|
-
|
-
|
||||||||||||
Net loss
|
(1,083,270
|
)
|
(1,615,812
|
)
|
(819,959
|
)
|
(3,519,041
|
)
|
|
At September 30, 2016
|
|||||||||||||||
Goodwill
|
$
|
339,451
|
$
|
19,861,739
|
$
|
-
|
$
|
20,201,190
|
||||||||
Intangible assets, net
|
90,400
|
9,482,806
|
327,333
|
9,900,539
|
||||||||||||
Total assets
|
2,151,870
|
32,410,397
|
1,891,617
|
36,453,884
|
|
Three Months Ended September 30, 2015 (Revised)
|
|||||||||||||||
|
PDN
Network
|
NAPW
Network
|
Noble Voice
|
Consolidated
|
||||||||||||
|
||||||||||||||||
Membership fees and related services
|
$
|
-
|
$
|
5,652,873
|
$
|
-
|
$
|
5,652,873
|
||||||||
Lead generation
|
-
|
-
|
2,334,276
|
2,334,276
|
||||||||||||
Recruitment services
|
830,250
|
-
|
-
|
830,250
|
||||||||||||
Products sales and other
|
-
|
330,769
|
-
|
330,769
|
||||||||||||
Consumer advertising and marketing solutions
|
73,011
|
-
|
-
|
73,011
|
||||||||||||
Total revenues
|
903,261
|
5,983,642
|
2,334,276
|
9,221,179
|
||||||||||||
Loss from operations
|
(491,126
|
)
|
(27,995,556
|
)
|
(339,150
|
)
|
(28,825,832
|
)
|
||||||||
Depreciation and amortization
|
93,922
|
786,148
|
45,614
|
925,684
|
||||||||||||
Income tax benefit
|
2,362,220
|
543,018
|
70,979
|
2,976,217
|
||||||||||||
Capital expenditures
|
-
|
-
|
-
|
-
|
||||||||||||
Net loss
|
(2,857,969
|
)
|
(28,538,574
|
)
|
(410,129
|
)
|
(31,806,672
|
)
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
|
Nine Months Ended September 30, 2015 (Revised)
|
|||||||||||||||
|
PDN
Network
|
NAPW
Network
|
Noble Voice
|
Consolidated
|
||||||||||||
|
||||||||||||||||
Membership fees and related services
|
$
|
-
|
$
|
18,885,308
|
$
|
-
|
$
|
18,885,308
|
||||||||
Lead generation
|
-
|
-
|
7,853,402
|
7,853,402
|
||||||||||||
Recruitment services
|
2,432,951
|
-
|
-
|
2,432,951
|
||||||||||||
Products sales and other
|
-
|
631,198
|
-
|
631,198
|
||||||||||||
Consumer advertising and marketing solutions
|
209,097
|
-
|
-
|
209,097
|
||||||||||||
Total revenues
|
2,642,048
|
19,516,506
|
7,853,402
|
30,011,956
|
||||||||||||
Loss from operations
|
(1,727,721
|
)
|
(30,417,806
|
)
|
(818,410
|
)
|
(32,963,937
|
)
|
||||||||
Depreciation and amortization
|
285,677
|
2,308,361
|
136,842
|
2,730,880
|
||||||||||||
Income tax expense (benefit)
|
1,895,588
|
(271,103
|
)
|
(115,090
|
)
|
1,509,395
|
||||||||||
Capital expenditures
|
-
|
50,216
|
13,938
|
64,154
|
||||||||||||
Net loss
|
(3,588,298
|
)
|
(30,146,703
|
)
|
(703,320
|
)
|
(34,438,321
|
)
|
|
At December 31, 2015
|
|||||||||||||||
Goodwill
|
$
|
339,451
|
$
|
19,861,739
|
$
|
-
|
$
|
20,201,190
|
||||||||
Intangible assets, net
|
90,400
|
11,502,106
|
459,333
|
12,051,839
|
||||||||||||
Total assets
|
4,167,229
|
34,985,831
|
2,274,756
|
41,427,816
|
Professional Diversity Network, Inc.
|
Condensed Consolidated Notes to Financial Statements (Unaudited)
|
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Percentage of revenue by product:
|
||||||||||||||||
Membership fees and related services
|
58.9
|
%
|
61.3
|
%
|
63.5
|
%
|
62.9
|
%
|
||||||||
Lead generation
|
24.4
|
%
|
25.3
|
%
|
21.8
|
%
|
26.2
|
%
|
||||||||
Recruitment services
|
15.0
|
%
|
9.0
|
%
|
11.2
|
%
|
8.1
|
%
|
||||||||
Products sales and other
|
0.8
|
%
|
3.6
|
%
|
2.6
|
%
|
2.1
|
%
|
||||||||
Consumer advertising and consumer marketing solutions
|
0.8
|
%
|
0.8
|
%
|
0.9
|
%
|
0.7
|
%
|
As of
September 30, |
Change
|
|||||||||||
2016
|
2015
|
(Percent)
|
||||||||||
(in thousands)
|
||||||||||||
PDN Network Registered Users (1)
|
8,951
|
6,837
|
30.9
|
%
|
||||||||
NAPW Network Total Membership (2)
|
880
|
831
|
5.9
|
%
|
(1) | The number of registered users may be higher than the number of actual users due to various factors. For more information, see “ Risk Factors—The reported number of our registered users is higher than the number of actual individual users, and a substantial majority of our visits are generated by a minority of our users ” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as amended on May 4, 2016 (the” 2015 Annual Report”). |
(2) | Includes both paid and unpaid members. |
Three Months Ended
September 30, |
Change
|
|||||||||||
2016
|
2015
|
(Percent)
|
||||||||||
(in thousands)
|
||||||||||||
NAPW Network bookings
|
$
|
2,904
|
$
|
5,224
|
(44.4
|
%)
|
||||||
PDN Network bookings
|
$
|
778
|
$
|
688
|
13.1
|
%
|
(Amount in thousands)
|
||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Net loss
|
$
|
(1,273
|
)
|
$
|
(31,807
|
)
|
$
|
(3,519
|
)
|
$
|
(34,438
|
)
|
||||
Impairment expense
|
-
|
26,744
|
-
|
26,744
|
||||||||||||
Stock-based compensation expense
|
118
|
114
|
218
|
351
|
||||||||||||
Depreciation and amortization
|
820
|
926
|
2,498
|
2,731
|
||||||||||||
Litigation settlement
|
-
|
-
|
500
|
-
|
||||||||||||
Gain on lease cancellation
|
-
|
-
|
(424
|
)
|
-
|
|||||||||||
Change in fair value of warrant
liability
|
401
|
(2
|
)
|
401
|
(94
|
)
|
||||||||||
Interest expense
|
216
|
9
|
217
|
84
|
||||||||||||
Interest and other income
|
-
|
(2
|
)
|
(1
|
)
|
(26
|
)
|
|||||||||
Income tax expense (benefit)
|
(624
|
)
|
2,976
|
(1,218
|
)
|
1,509
|
||||||||||
Adjusted EBITDA
|
$
|
(342
|
)
|
$
|
(1,042
|
)
|
$
|
(1,328
|
)
|
$
|
(3,139
|
)
|
Three Months Ended
|
||||||||||||||||
September 30,
|
Change
|
Change
|
||||||||||||||
2016
|
2015
|
(Dollars)
|
(Percent)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Revenues
|
||||||||||||||||
Membership fees and related services
|
$
|
3,748
|
$
|
5,653
|
$
|
(1,905
|
)
|
(33.7
|
%)
|
|||||||
Lead generation
|
1,554
|
2,334
|
(780
|
)
|
(33.4
|
%)
|
||||||||||
Recruitment services
|
955
|
830
|
125
|
15.1
|
%
|
|||||||||||
Products sales and other
|
53
|
331
|
(278
|
)
|
(84.0
|
%)
|
||||||||||
Consumer advertising and marketing solutions
|
50
|
73
|
(23
|
)
|
(31.5
|
%)
|
||||||||||
Total revenues
|
$
|
6,360
|
$
|
9,221
|
$
|
(2,861
|
)
|
(31.0
|
%)
|
Nine Months Ended
|
||||||||||||||||
September 30,
|
Change
|
Change
|
||||||||||||||
2016
|
2015
|
(Dollars)
|
(Percent)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Revenues
|
||||||||||||||||
Membership fees and related services
|
$
|
13,048
|
$
|
18,885
|
$
|
(5,837
|
)
|
(30.9
|
%)
|
|||||||
Lead generation
|
4,490
|
7,853
|
(3,363
|
)
|
(42.8
|
%)
|
||||||||||
Recruitment services
|
2,295
|
2,433
|
(138
|
)
|
(5.7
|
%)
|
||||||||||
Products sales and other
|
544
|
631
|
(87
|
)
|
(13.8
|
%)
|
||||||||||
Consumer advertising and marketing solutions
|
177
|
209
|
(32
|
)
|
(15.3
|
%)
|
||||||||||
Total revenues
|
$
|
20,554
|
$
|
30,011
|
$
|
(9,457
|
)
|
(31.5
|
%)
|
Three Months Ended
|
||||||||||||||||
September 30,
|
Change
|
Change
|
||||||||||||||
2016
|
2015
|
(Dollars)
|
(Percent)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
NAPW Network
|
$
|
3,801
|
$
|
5,984
|
$
|
(2,183
|
)
|
(36.5
|
%)
|
|||||||
PDN Network
|
1,005
|
903
|
102
|
11.3
|
%
|
|||||||||||
Noble Voice
|
1,554
|
2,334
|
(780
|
)
|
(33.4
|
%)
|
||||||||||
Total revenues
|
$
|
6,360
|
$
|
9,221
|
$
|
(2,861
|
)
|
(31.0
|
%)
|
Nine Months Ended
|
||||||||||||||||
September 30,
|
Change
|
Change
|
||||||||||||||
2016
|
2015
|
(Dollars)
|
(Percent)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
NAPW Network
|
$
|
13,592
|
$
|
19,516
|
$
|
(5,924
|
)
|
(30.4
|
%)
|
|||||||
PDN Network
|
2,472
|
2,642
|
(170
|
)
|
(6.4
|
%)
|
||||||||||
Noble Voice
|
4,490
|
7,853
|
(3,363
|
)
|
(42.8
|
%)
|
||||||||||
Total revenues
|
$
|
20,554
|
$
|
30,011
|
$
|
(9,457
|
)
|
(31.5
|
%)
|