Professional Diversity Network, Inc.

1. Description of Business

Professional Diversity Network, Inc. is both the operator of the TalentAlly Network (the “Company,” “we,” “our,” “us,” “PDN” or the “Professional Diversity Network”) and a holding company for NAPW, Inc., a wholly-owned subsidiary of the Company and the operator of the National Association of Professional Women (the “NAPW Network” or “NAPW”). The TalentAlly Network operates online professional networking communities with career resources specifically tailored to the needs of different diverse cultural groups including Women, Hispanic-Americans, African-Americans, Asian-Americans, persons with disabilities, Military Professionals, Lesbians, Gay, Bisexual, Transgender and Queer (LGBTQ+), and Students and Graduates seeking to transition from education to career. The networks’ purposes, among others, are to assist its registered users in their efforts to connect with like-minded individuals, identify career opportunities within the network and connect with prospective employers. The Company’s technology platform is integral to the operation of its business.

The NAPW Network is a networking organization for professional women, whereby its members can develop their professional networks, further their education and skills, and promote their business and career accomplishments. NAPW provides its members with opportunities to network and develop valuable business relationships with other professionals through its website, as well as at events hosted at its local chapters across the country.

RemoteMore USA is an innovative, global entity that provides remote-hiring marketplace services for developers and companies. Companies are connected with reliable, cost-efficient, vetted developers, and empower every developer to find a meaningful job regardless of their location.

2. Going Concern and Management’s Plans

At* December 31, 2024*, the Company’s principal sources of liquidity were its cash and cash equivalents and the net proceeds from the sale of common stock during thetwelve months ended* December 31, 2024*.

The Company had an accumulated deficit of $102,414,683 on* December 31, 2024*. During the year ended* December 31, 2024*, the Company generated a net loss from continuing operations of $2,405,145 and used cash in continuing operations during thetwelve months ended* December 31, 2024*, of $2,501,450. On* December 31, 2024*, the Company had a cash balance of $1,731,155. Total revenues during the year ended* December 31, 2024*, were $6,730,605 compared to total revenues of $7,699,037 during the year ended* December 31, 2023*. The Company had a working capital from continuing operations of $270,695 and a working capital deficit from continuing operations of $1,106,825 on* December 31, 2024,and2023*. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise capital through the issuance of common stock, and generate revenues. The consolidated financial information contained herein doesnot include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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Management believes that its available cash on hand and cash flow from operations* maybe sufficient to meet our working capital requirements through the fiscal period ending December 31,2025, however in order to accomplish our business plan objectives, the Company will need to continue its cost reduction efforts, increase revenues, raise capital through the issuance of common stock, or through a strategic merger or acquisition. There can beno assurances that our business plans and actions will be successful, that we will generate anticipated revenues, or that unforeseen circumstances willnot require additional funding sources in the future or require an acceleration of plans to conserve liquidity. Future efforts to improve liquidity through the issuance of our common stock maynot* be successful, or if available, they* maynot* be available on acceptable terms.

3. Summary of Significant Accounting Policies

******Basis of Presentation - The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates* – The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due toone* or more future intervening events. Accordingly, the actual results could differ significantly from estimates.

Significant estimates underlying the consolidated financial statements include the fair value of acquired assets and liabilities associated with acquisitions; assessment of goodwill impairment, other intangible assets and long-lived assets for impairment; allowances for credit losses and assumptions related to the valuation allowances on deferred taxes, impact of applying the revised federal tax rates on deferred taxes, the valuation of stock-based compensation and the valuation of stock warrants.

****Principles of Consolidation - The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and those subsidiaries where less than50% is owned but consolidation is required. All significant intercompany balances and transactions have been eliminated in consolidation.

****Cash Equivalents - The Company considers cash equivalents to include all short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities ofthree months or less.

Accounts Receivable and Allowance for Credit Losses - The Company’s accounts receivable consists principally of uncollateralized amounts billed to customers. These receivables are generally due within30 to90 days of the period in which the corresponding sales occur and donot bear interest. They are recorded at net realizable value less an allowance for credit losses and are classified as account receivable, net on the consolidated balance sheets.

The Company considers both current conditions and reasonable and supportable forecasts of future conditions when evaluating expected credit losses for uncollectible receivable balances. In our determination of the allowance for credit losses, we pool receivables by days outstanding and apply an expected credit loss percentage to each pool. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. Current conditions considered include predefined aging criteria, as well as specified events that indicate the balance due isnot collectible. Reasonable and supportable forecasts used in determining the probability of future collection consider publicly available macroeconomic data and whether future credit losses are expected to differ from historical losses.

The Company isnot party to any off-balance sheet arrangements that would require an allowance for credit losses in accordance with this accounting standard.

Allowance for Credit Losses

The following table summarizes the activity related to the Company’s allowance for credit losses:

The numbers presented above relate solely to our portfolio of trade accounts receivable asno allowance for credit losses was recognized on other receivables as presented on our consolidated balance sheets.

Other Receivables – Other receivables represent amounts that are owed to the Company that arenot considered trade receivables. The Company periodically reviews its other receivables for credit risk to determine whether an allowance is necessary and other factors that mayindicate that the realization of an account maybe in doubt. Account balances deemed to be uncollectible are charged to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of* December 31, 2024*, the balance in other receivables as reported on the consolidated balance sheet was deemed collectible.

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Property and Equipment - Property and equipment are stated at cost, including any cost to place the property into service, less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets, which currently range from three tofive years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the lease. Maintenance, repairs and minor replacements are charged to operations as incurred; major replacements and betterments are capitalized. The cost of any assets sold or retired and related accumulated depreciation are removed from the accounts at the time of disposition, and any resulting profit or loss is reflected in income or expense for the period. Depreciation expense for the years ended December 31, 2024,and2023 was $11,936 and $12,723, respectively, and is recorded in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated depreciation as of December 31, 2024, and2023, was $36,734 and $27,303, respectively.

***Lease Obligations -*The Company leases office space under a non-cancelable operating lease that expires through September 2027.The Company's facility lease provides for periodic rent increases and maycontain escalation clauses and renewal options. The Company's lease terms include options to extend the lease if they are reasonably certain of being exercised.

The Company recognizes operating lease expense on a straight-line basis over the lease term and variable lease payments are expensed as incurred. Lease costs are primarily recorded within SG&A expenses in the Company's consolidated statements of loss and comprehensive loss.

The Company determines if a contract contains a lease at lease inception. If the borrowing rate implicit in the lease isnot determinable, the Company uses its incremental borrowing rate ("IBR") based on information available at lease commencement including prevailing financial market conditions to determine the present value of future lease payments. The Company has elected the option to combine lease and non-lease components as a single component for the Company's entire population of lease assets.

Operating lease assets and lease liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease paymentsnot yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, and lease incentives. The Company has electednot to apply the recognition requirements to short-term leases of12 months or less and instead recognizes lease payments as expense on a straight-line basis over the lease term. The Company’s lease agreements donot contain any material residual value guarantees or material restrictive covenants. Leased assets are presented net of accumulated amortization. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as increases in lease payments based on changes in index rates or usage, arenot included in the ROU assets or liabilities; instead, these are expensed as incurred and recorded as variable lease expense.

**Capitalized Technology Costs - In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)350-40, Internal-Use Software, the Company capitalizes certain external and internal computer software costs incurred during the application development stage. The application development stage generally includes software design and configuration, coding, testing and installation activities. Training and maintenance costs are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized software costs are amortized over the estimated useful lives of the software assets on a straight-line basis, generallynot exceedingthree years.

Business Combinations - ASC805, Business Combinations (“ASC805”), applies the acquisition method of accounting for business combinations to all acquisitions where the acquirer gains a controlling interest, regardless of whether consideration was exchanged. ASC805 establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. Accounting for acquisitions requires the Company to recognize, separately from goodwill, the assets acquired, and the liabilities assumed at their acquisition-date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition-date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which* maybe up toone* year from the acquisition date, the Company* mayrecord adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the interim financial information. (See Note4* – Business Combinations.)

Goodwill and Intangible Assets - The Company accounts for goodwill and intangible assets in accordance with ASC350, Intangibles – Goodwill and Other (“ASC350”). ASC350 requires that goodwill and other intangibles with indefinite lives should be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. (See Note4 – Business Combinations and Note7 – Intangible Assets.)

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Goodwill is tested for impairment at the reporting unit level on an annual basis (* December 31)and between annual tests if an event occurs or circumstances change that would more likely thannot* reduce the fair value of a reporting unit below its carrying value. The Company considers its market capitalization and the carrying value of its assets and liabilities, including goodwill, when performing its goodwill impairment test.

When conducting its annual goodwill impairment assessment, the Company initially performs a qualitative evaluation of whether it is more likely thannot that goodwill is impaired. If it is determined by a qualitative evaluation that it is more likely thannot that goodwill is impaired, the Company then compares the fair value of the Company’s reporting unit to its carrying or book value. If the fair value of the reporting unit exceeds its carrying value, goodwill isnot impaired and the Company isnot required to perform further testing. If the carrying value of a reporting unit exceeds its fair value, the Company will measure any goodwill impairment losses as the amount by which the carrying amount of a reporting unit exceeds its fair value,not to exceed the total amount of goodwill allocated to that reporting unit.

**Contingent Liabilities– Our determination of the treatment of contingent liabilities in the consolidated financial statements is based on our view of the expected outcome of the applicable contingency. In the ordinary course of business, we consult with legal counsel on matters related to litigation and other experts both within and outside our Company. We accrue a liability if the likelihood of an adverse outcome is probable and the amount of loss is reasonably estimable. We disclose the matter, but donot accrue a liability if the likelihood of an adverse outcome is reasonably possible and an estimate of loss isnot determinable. Legal and other costs incurred in conjunction with loss contingencies are expensed as incurred.

******Treasury Stock – Treasury stock is recorded at cost as a reduction of stockholders’ equity in the accompanying consolidated balance sheets.

Revenue Recognition* – Revenue is recognized when all of the following conditions exist: (1) persuasive evidence of an arrangement exists, (2) services are performed, (3) the sales price is fixed or determinable, and (4) collectability is reasonably assured. (See Note5* – Revenue Recognition.)

Deferred revenue includes customer payments, which are received prior to performing services and revenues are recognized as benefits are provided to the customer. Annual membership fees collected at the time of enrollment are recognized as revenue ratably over the membership period, which are typically for a12-month membership period.

Advertising and Marketing Expenses – Advertising and marketing expenses are expensed as incurred or thefirst time the advertising takes place. The production costs of advertising are expensed thefirst time the advertising takes place. For the years ended December 31, 2024,and2023, the Company incurred advertising and marketing expenses of $746,490 and $1,130,262. These amounts are included in sales and marketing expenses in the accompanying consolidated statements of operations and comprehensive loss.

Concentrations of Credit Risk - Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents and accounts receivable. The Company places its cash with high credit quality institutions. At times, such amounts maybe in excess of the Federal Deposit Insurance Corporation insurance limits. The Company hasnot experienced any losses in such accounts and believes that it isnot exposed to any significant credit risk on the account.

Income Taxes - The Company accounts for income taxes in accordance with ASC740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement basis and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely thannot that the benefit of such deferred tax asset willnot be realized in future periods. If it becomes more likely thannot that a tax asset will be used, the related valuation allowance on such assets would be reduced.

ASC740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with ASC740-20 and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. There wereno unrecognized tax benefits as of* December 31, 2024*. The Company is currentlynot aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company* maybe subject to potential income tax examinations by Federal or state tax authorities. These potential examinations mayinclude questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. Management doesnot* expect that the total amount of unrecognized tax benefits will materially change over the nexttwelve months. Tax years that remain open for assessment for Federal and state tax purposes include the years ended* December 31, 2021through2023.*

The Company’s policy for recording interest and penalties associated with audits is to record such expenses as a component of income tax expense. There wereno amounts accrued for penalties or interest as of* December 31, 2024*.

******Fair Value of Financial Assets and Liabilities - Financial instruments, including cash and cash equivalents, short-term investments and accounts payable, are carried at cost. Management believes that the recorded amounts approximate fair value due to the short-term nature of these instruments.

Net Loss per Share - The Company computes basic net loss per share by dividing net loss available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic net loss per share for the years ended* December 31, 2024,and2023*, excludes the potentially dilutive securities summarized in the table below because their inclusion would be anti-dilutive.

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Reclassifications

Certain prior year amounts in the Consolidated Statements of Cash Flow have been reclassified to conform with the current year presentation.

Recent Accounting Pronouncements

In* November 2023,the FASB issued Accounting Standards Update (“ASU”)2023-07, Segment Reporting (Topic280*): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after* December 15, 2023,and for interim periods within fiscal years beginning after December 15, 2024.Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted this standard in fiscal year2024.* Refer to "Note15, Segment Information" for relevant disclosures.

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures, which enhances effective tax rate reconciliation disclosure requirements and provides clarity to the disclosures of income taxes paid, income before taxes and provision for income taxes. The amendments are effective for fiscal years beginning after* December 15, 2024.Early adoption is permitted for annual financial statements that havenot* yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

In* November 2024,the Financial Accounting Standards Board (“FASB”) issued ASU2024*-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures. The ASU requires a public business entity to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis including purchases of inventory, employee compensation, depreciation, and intangible asset amortization for each income statement line item that contains those expenses. This ASU is effective for annual reporting periods beginning after* December 15, 2026,and interim periods within annual reporting periods beginning after December 15, 2027,*with early adoption permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

4. Business Combinations

RemoteMore USA, Inc.

On* September 20, 2021,the Company acquired a 45.62% interest in RemoteMore, a software developer recruiting company, for an estimated total purchase price of $1,363,333, paying $863,333 in cash and $500,000 to be paid withinone* year of the acquisition date, or until certain factors of the agreement were met.

In* February 2022,in connection with the September 2021acquisition of the 45.62% interest in RemoteMore, and as a component of the aforementioned $500,000 remaining purchase price payment, the Company issued 13,986 shares of its common stock, with a value of $400,000, to the co-founders of RemoteMore. In January 2023,*the Company exercised its option to purchase an additional 20% interest in RemoteMore at a purchase price of $116,667.

In* May 2023,the Company acquired an additional 7% interest in RemoteMore for approximately $235,000. The acquisition interest and price were based on the original valuation of RemoteMore in September 2021.*This acquisition increased the Company’s interest in RemoteMore to 72.62%.

Expo Experts, LLC

In* January 2023,the Company purchased the assets and operations of Expo Experts, LLC (“Expo Experts”), an Ohio limited liability company, for a total consideration of $600,000 funded by the payment of $400,000 in cash and the issuance of restricted shares of PDN common stock valued at $200,000 based on the volume weighted-average price as oftwenty* (20) days prior to the closing date. Expo Experts specializes in producing premier face-to-face and virtual recruiting events for Engineering, Technology and Security Clearance positions, as well as being designed to attract diverse candidates who* may*also have STEM-based backgrounds.

The purchase price allocation as of the date of the acquisition was based on a detailed analysis of the fair value of assets acquired.No liabilities were assumed other than the deferred revenue amount listed below. The major classes of assets and liabilities to which we have allocated the purchase price were as follows:

The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future revenue growth through cross selling of PDN and Expo Experts products, and is expected to be deductible for tax purposes.

Intangible assets purchased in connection with the acquisition primarily represent specific events acquired which are expected to create revenue throughout fiscal2023 and are reflected in the Company’s consolidated balance sheets at gross amounts, net of accumulated amortization (see Note7 – Intangible Assets).

Expo Experts’ accounts and operations have been reflected in the TalentAlly Network for segment reporting purposes (see Note15 - Segment Information**).**

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5. Revenue Recognition

The Company recognizes revenue under the core principle of ASC606 – Revenue from Contracts with Customers (“ASC606”), to depict the transfer of control to its customers in an amount reflecting the consideration to which it expects to be entitled. In order to achieve that core principle, the Company has applied the followingfive-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.

The Company’s contracts with customers* mayprovide for multiple promised goods and services. The Company typically analyzes the contract and identifies the performance obligations by evaluating whether the promised goods and services are capable of being distinct within the context of the contract at contract inception. Promised goods and services that arenot* distinct at contract inception are combined. The next step after identifying the performance obligations is determining the transaction price, which includes the impact of variable consideration, based on contractually fixed amounts and an estimation of variable consideration. The Company allocates the transaction price to each performance obligation based on relative stand-alone selling price. Judgment is exercised to determine the stand-alone selling price of each distinct performance obligation. The Company estimates the standalone selling price by reference to the total transaction price less the sum of the observable stand-alone selling prices of other goods or services promised in the contract. In general, transaction price is determined by estimating the fixed amount of consideration to which we are entitled for transfer of goods and services and all relevant sources and components of variable consideration. Revenues are generally recognized when control of the promised goods or services is transferred to their customers either at a point in time or over time, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services.

Many of the Company’s contracts haveone performance obligation and all consideration is allocated to that performance obligation and recognized at a point in time contemporaneous when the service is performed or with the date of the event.

Payment is typically due in full, at net30, from the moment control of the goods or services have begun to transfer, unless both parties have negotiated an installment-based payment arrangement through the term of the contract. The Company* may*have contracts where there is an extended timing difference between payment and the time when control of the goods or services is transferred, or has begun transferring, to the customer.

Nature of Goods and Services

The following is a description of principal activities from which the Company generates its revenue:

Recruitment Services

The Company’s recruitment services revenue is derived from the Company’s agreements through single and multiple job postings, recruitment media, talent recruitment communities, basic and premier corporate memberships, hiring campaign marketing and advertising, e-newsletter marketing and research and outreach services. Recruitment revenue includes revenue recognized from direct sales to customers for recruitment services and events, as well as revenue from the Company’s direct e-commerce sales. Direct sales to customers are most typically atwelve-month contract for services and as such the revenue for each contract is recognized ratably over itstwelve-month term. Event revenue is recognized in the period that the event takes place and e-commerce sales are forsixty-to-ninety-day job postings and the revenue from those sales are recognized when the service is provided. The Company’s recruitment services mainly consist of the following products:

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Membership Fees and Related Services

Membership fees of longer thanone month are collected up-front and member benefits become available immediately; however, those benefits must remain available over the12-month membership period. At the time of enrollment, membership fees are recorded as deferred revenue and are recognized as revenue ratably over the12-month membership period. Members who are enrolled in this plan* may*cancel their membership in the program at any time and receive a partial refund (amount remaining in deferred revenue) or due to consumer protection legislation, a full refund based on the policies of the member’s credit card company.

Monthly membership revenues are recognized in the same month fees are collected.

Revenue from related membership services is derived from fees for development and set-up of a member’s personal on-line profile and/or press release announcements. Fees related to these services are recognized as revenue at the time the on-line profile is complete and press release is distributed.

Products offered to members relate to custom made plaques. Product sales are recognized as deferred revenue at the time the initial order is placed. Revenue is then recognized at the time these products are shipped. The Company’s shipping and handling costs are included in cost of sales in the accompanying consolidated statements of operations.

Contracted Software Development

Revenues for RemoteMore are generated from providing customized software solutions to customers and are recognized in the period work is performed.

Consumer Advertising and Marketing Solutions

The Company provides career opportunity services to its various partner organizations through advertising and job postings on their websites. The Company works with its partners to develop customized websites and job boards where the partners can generate advertising, job postings and career services to their members, students and alumni. Consumer advertising and marketing solutions revenue is recognized as jobs are posted to their hosted sites.

Revenue Concentration

We, in alliance with another company, partner to selltwo recruitment services products. This alliance member previously built, hosted, and managed our job boards and website in addition to billing customers, collecting fees, and providing customer services. For the year ended* December 31, 2024,and2023*, the Company recorded approximately 4.6% and 8.1% of its recruitment services revenue from this alliance sales relationship, respectively.

Disaggregation of revenue

Revenue is disaggregated by product line and timing of transfer of products and services (see Note15 - Segment Information).

Contract Balances

The Company’s rights to consideration for work completed, butnot billed at the reporting date, is classified as a receivable, as it has an unconditional right to payment or only conditional for the passage of time. The Company hasno recorded contract assets as of* December 31, 2024,and2023*.

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Consideration received in advance from customers is recorded as a contract liability, if a contract exists under ASC606, until services are delivered, or obligations are met and revenue is earned. Contract liability represents the excess of amounts invoiced over amounts recognized as revenues. Contract liabilities to be recognized in the succeedingtwelve-month period are classified as current contract liabilities and the remaining amounts, if any, are classified as non-current contract liabilities. Contract liabilities of $1,842,036 and $1,999,841 are included in current deferred revenues, on the consolidated balance sheets as of* December 31, 2024* and* December 31, 2023*.

For the years ended* December 31, 2024and2024,* we recognized revenue associated with contract liabilities that were included in the contract liabilities balance at the beginning of the period as follows:

Deferred revenue includes customer payments which are received prior to performing services and revenues are recognized upon the completion of these services. Annual membership fees collected at the time of enrollment are recognized as revenue ratably over the membership period, which are typically for a12-month membership period.

Transaction price allocated to the remaining performance obligations

The Company applies the optional exemptions and doesnot disclose: a) information about remaining performance obligations that have an original expected duration ofone year or less or b) transaction price allocated to unsatisfied performance obligations for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with the series guidance.

The typical duration of all event related and other contracts isone year or less and, as a result, the Company applies the optional exemptions and doesnot disclose information about remaining performance obligations that have an original expected duration ofone year or less.

6. Capitalized Technology

Capitalized Technology, net is as follows:

Amortization expense related to capitalized technology of $100,750 and $59,507 for the years ended* December 31, 2024,and2023*, respectively, is recorded in depreciation and amortization expense in the accompanying consolidated statements of operations.

7. Intangible Assets

Intangible assets, net is as follows:

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Future annual estimated amortization expense is summarized as follows:

Amortization expense related to intangible assets of $91,114 and $551,774 for the years ended* December 31, 2024,and2023*, respectively, is recorded in depreciation and amortization expense in the accompanying consolidated statements of operations.

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8. Long-term Investments

On* September 27, 2022,the Company entered into a Stock Purchase Agreement (the “SPA”) with Koala Malta Limited, a private limited liability company registered under the laws of Malta (the “Seller”). Upon the execution of the SPA, the Company purchased 65,700 issued ordinary shares of Koala Crypto Limited (now renamed as QBSG Limited) from Seller, representing 9% of the total issued share capital of QBSG, and in exchange, the Company issued 86,339 shares of its common stock to Seller in a private placement (the “Consideration Shares”) valued at $1,350,000. As allowed under ASC321*-10-35, the Company has elected to measure the equity investment in QBSG Limited at cost as QBSG Limited is a private company and doesnot have a readily determinable fair value. The Company evaluates the investment for any impairment annually. The shares of QBSG are recorded in the consolidated balance sheet as ‘other assets’.

Upon execution of the SPA, the Company, the Seller and QBSG also entered into a Shareholders’ Agreement. The Shareholders’ Agreement imposes certain transfer restrictions on the Seller and the Company as shareholders of QBSG, provides for certain governance and approval rights among the parties, and gives the Company a put option with respect to its investment in QBSG in the event of a change of control of the Seller. At the same time, Alan Tak Wai Yau, an individual and the majority shareholder of Koala Capital Limited, which is the parent company of the Seller (“Koala Capital”), provided the Company with a share charge over15 percent of the issued share capital of Koala Capital (the “Share Charge”) and Koala Capital provided the Company with a guaranty and indemnity (the “Guarantee”), which Share Charge and Guarantee were granted as security for a number of the Seller’s obligations as set forth therein including obtaining the lifting of the voluntary suspension of QBSG’s virtual financial assets license by the Malta Financial Services Authority (“MFSA”). Koala Capital had submitted and responded to all queries raised by the MFSA, and the authorization/supervision unit has approved its application. To enhance the governance of QBSG's profits and dividends, QBSG has agreed to assignone board seat to the Company's CEO.

On* December 5, 2024,the Company entered into a Profit Participation Agreement (the “PPA”) with Koala Malta Limited, a private limited liability company registered under the laws of Malta (the “Seller”). Upon the execution of the PPA, the Company purchased a 6% right in QBSG Limited (the “Target”, previously Koala Crypto Limited) to receive all distributions and dividends which maybe declared and/or distributed by the Target on an annual basis in terms of applicable law, along with all rights, title, and interest from the Seller. The consideration of the Profit Participation is $1,200,000, including $700,000 cash and $500,000 value of the Company’s common stocks, or a total of 113,636 shares at a price of $4.40 per share. In addition to the 9% share purchase from the Seller in September 2022,*the Company now owns the right to receive 15% of all distributions and dividends by the Target.

As the Profit Participation investment doesnot include the ownership of equity of QBSG Limited, only the right to future distributions, the Profit Participation investment doesnot meet the criteria to be recorded under ASC321-10-35 and is subject to fair value accounting standards. As of* December 31, 2024,the Company holds a Level3* investment recorded at a cost of $1,200,000, representing 6% of all distributions and dividends from QBSG Limited. As of* December 31,2024, Management believes that cost represents fair value as it relates to the Profit Participation valuation as there wereno material changes in the underlying company, QBSG Limited between December 5, 2024and December 31, 2024.*

The fair value of the investment is estimated using a combination of valuation methodologies, including Discounted Cash Flow (DCF) analysis, Relative Valuation, and Transaction Comparables. These approaches incorporate significant unobservable inputs, such as projected cash flows, discount rates, market data from publicly traded companies in the crypto infrastructure and digital asset services sectors, as well as data from recent merger and acquisition transactions within the industry.

There wasno activity in Level3 investments other than the acquisition of the Profit Participation investment.

9. Accrued Liabilities

As of* December 31, 2024,and2023*, accrued liabilities consisted of the following:

10. Commitments and Contingencies

Lease Obligations

The Company leases its corporate headquarters. The office lease is for 4,902 square feet of office space and the lease term is for 84 months, commencing on* October 1, 2020.The Company made approximately $106,000 and $104,000 of cash payments for lease expenses related to the office space for the years ended December 31, 2024,and2023*. The weighted average remaining lease term for the years ended* December 31, 2024,and2023*, are 2.75 years and 3.75 years. The weighted average discount rate for operating leases for the years ended* December 31, 2024,and2023*, is 6.0%

As of* December**31,* 2024, the aggregate future lease payments under all operating leases are as follows:

As of* December 31, 2024,and2023*, right of use assets were $226,704 and $298,485, and related lease obligations remaining, related to the Company's office lease, were $279,312 and $365,712, as recorded on the Company’s consolidated balance sheets.

F-16

Other

As of* December 31, 2023,PDN China's bank account held a balance of $184,055, which was reduced to $0 by December 31, 2024.In November 2024,these funds were seized by the Guangzhou City authority in connection with alleged illegal fundraising activities involving the Gatewang Group, a company associated with PDN’s former CEO, Michael Wang. Following Mr. Wang’s detention in December 2019,the Company ceased all operations in China. At present, there areno* outstanding matters with the Chinese authorities.

Legal Proceedings

The Company and its wholly owned subsidiary, NAPW, Inc., are parties to a proceeding captioned Deborah Bayne, et al. vs. NAPW, Inc. and Professional Diversity Network, Inc.,No. 18-cv-3591 (E.D.N.Y.), filed on* June 20, 2018,and alleging violations of the Fair Labor Standards Act and certain provisions of the New York Labor Law. The class is defined as “all individuals employed in New York from June 20, 2012through October 15, 2021by NAPW and PDN to sell memberships to the women’s networking organization known as the National Association of Professional Women and the International Association of Women,” excluding corporate officers, shareholders, directors and administrative employees. As it stands, the class currently consists of164* putative class members and60 opt-in plaintiffs.

The complaint alleges that NAPW (and PDN in its capacity as an alleged joint employer) violated similar provisions of the FLSA and the NYLL by (i) failing to pay overtime wages as required by both the FLSA and the NYLL, (ii) failing to provide accurate wage statements under the NYLL, and (iii) willfully violating both of those statutes. The Court, in an order issued on* March 25, 2024,granted summary judgment against NAPW on the claims related to willful failure to pay overtime wages. The Court dismissed, without prejudice, claims based on failure to provide accurate wage statements under the NYLL based on lack of subject matter jurisdiction. The Court found that questions of fact remain as to whether PDN was a joint employer with NAPW. Damages remain unsettled particularly in light of the Court’s dismissal of the Plaintiff’s claims related to failure to provide accurate wage statements. During thefirst* quarter of2020, the Company recorded a $450,000 litigation settlement reserve in the event of an unfavorable outcome in this proceeding. While the Plaintiff seeks damages substantially in excess of this reserve (including unpaid overtime, liquidated damages and penalties), NAPW and PDN continue to adamantly dispute the amount of damages claimed.

General Legal Matters

From time-to-time, the Company is involved in legal matters arising in the ordinary course of business. While the Company believes that such matters are currentlynot material, there can beno assurance that matters arising in the ordinary course of business for which the Company is, or could be, involved in litigation, willnot have a material adverse effect on its business, financial condition or results of operations.

11. CFL Transaction

On* August 12, 2016,*the Company entered into a stock purchase agreement (the “Purchase Agreement”), with CFL, a Republic of Seychelles company wholly-owned by a group of Chinese investors. Pursuant to the Purchase Agreement, the Company agreed to issue and sell to CFL, and CFL agreed to purchase, upon the terms and subject to the conditions set forth in the Purchase Agreement, a number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), such that CFL would hold shares of Common Stock equal to approximately 51% of the outstanding shares of Common Stock, determined on a fully-diluted basis, after giving effect to the consummation of the transactions contemplated by the Purchase Agreement.

At the closing of the CFL Transaction, the Company entered into a Stockholders’ Agreement, dated* November 7, 2016 (*the “Stockholders’ Agreement”) with CFL and each of its shareholders: Maoji (Michael) Wang, Jingbo Song, Yong Xiong Zheng and Nan Kou (the “CFL Shareholders”). The Stockholders’ Agreement sets forth the agreement of the Company, CFL and the CFL Shareholders relating to board representation rights, transfer restrictions, standstill provisions, voting, registration rights and other matters following the closing of the Share Issuance and Sale.

On* September 22, 2021,the Company entered into a stock purchase agreement with CFL, in which the Company sold 47,438 shares of its common stock at a price per share of $21.00 for gross proceeds of approximately $1,000,000. On October 30, 2021,*CFL entered into a transfer stock agreement with a former shareholder of the Company to purchase an additional 37,587 shares of its common stock.

In* December 2023,*we entered into a stock purchase agreement with CFL, in which we sold 12,267 shares of our common stock at a price per share of $16.30 for gross proceeds of approximately $200,000.

As of* December 31, 2024*, CFL beneficially held 269,227 shares of the Company’s outstanding Common Stock equal to approximately 14.8% of the outstanding class.

12. Stockholders’** Equity**

Effective* January 5, 2023,the Company filed a certificate of amendment to its Amended and Restated Certificate of Incorporation in order to implement a 2-for-1 reverse stock split, through which eachtwo shares of common stock issued and outstanding were combined and changed intoone* share of common stock. All share amounts and share prices in this annual report on Form10-K have been adjusted to give effect to the reverse stock split.

Effective* March 13, 2025,the Company filed a certificate of amendment to its Amended and Restated Certificate of Incorporation in order to implement a 10-for-1 reverse stock split, through which eachten shares of common stock issued and outstanding were combined and changed intoone* share of common stock. All share amounts and share prices in this annual report on Form10-K have been adjusted to give effect to the reverse stock split.

Preferred Stock – The Company hasno preferred stock issued. The Company’s amended and restated certificate of incorporation and amended and restated bylaws include provisions that allow the Company’s Board of Directors to issue, without further action by the stockholders, up to 1,000,000 shares of undesignated preferred stock.

Common Stock – The Company hasone class of common stock outstanding with a total number of shares authorized of 45,000,000. As of* December 31, 2024*, the Company had 1,823,275 shares of common stock outstanding.

F-17

In* January 2023,*in connection with the acquisition of Expo Experts, the Company issued 9,934 shares of its common stock, with a value of $200,000, to the co-founders of Expo Experts.

In* March 2023,*the Company entered into a stock purchase agreement with Yiran Gu, a former investor of the Company and a citizen of the People’s Republic of China, in connection with the purchase by Yiran Gu of 33,318 shares of our common stock at a price of approximately $21.00 per share for aggregate gross proceeds of $700,000.

In* June 2023,the Company entered into a stock purchase agreement with Tumim Stone Capital LLC (“Tumim Stone”). Under the terms and subject to the conditions of the stock purchase agreement, we have the right, butnot* the obligation, to sell to Tumim Stone, and Tumim Stone is obligated to purchase, up to$12,775,000‎ ‎worth of newly issued shares (the “Purchase Shares”) of our common ‎stock, subject to certain limitations and the satisfaction (or, where permissible, the waiver) of the conditions set forth in the stock purchase agreement. Pursuant to the stock purchase agreement, we issued and sold 46,993 Purchase Shares to Tumim Stone, at a price of $42.56 per share (representing the average official closing price of the common stock on The Nasdaq Capital Market for thefive consecutive trading days ending on the trading day immediately prior to the date of the stock purchase agreement), for aggregate gross proceeds to the Company of $2,000,000, in an initial purchase (the “Initial Purchase”). Pursuant to the terms of the stock purchase agreement, as consideration for Tumim Stone’s commitment to purchase shares of common stock at our direction from time to time, subject to the conditions and limitations set forth in the stock purchase agreement, upon execution of the stock purchase agreement on* September 30, 2023,we also issued to Tumim Stone 17,622 shares of common stock (the “Commitment Shares”), valued at $42.56 per share (the same per share value as each Initial Purchase Share sold in the Initial Purchase), or a total aggregate value equal to $750,000 for the Commitment Shares. Thereafter, the purchase price of shares that we sell to Tumim Stone under this agreement (other than initial sale under that agreement) is 97% of the lowest daily average of the daily volume weighted average prices of our common stock for thethree* day period prior to our election to sell shares.

In* December 2023,*the Company issued multiple purchase notices to Tumim Stone under the stock purchase agreement, through which we sold a combined 27,334 shares of our common stock at an average price of $17.00 for an aggregated gross proceeds of approximately $464,300.

In* December 2023,*the Company entered into a stock purchase agreement with CFL, in which we sold 12,267 shares of our common stock at a price per share of $16.30 for gross proceeds of approximately $200,000.

In thefirst quarter of2024, the Company issued 4,022 shares of its common stock to Tumim Stone Capital in connection with its committed equity line program, at a price of approximately $23.60 per share, resulting in aggregate gross proceeds of $95,104. In thesecond quarter of2024, the Company issued 18,467 shares of its common stock to Tumim Stone Capital in connection with its committed equity line program, at a price range of approximately $12.70 to $15.60 per share, resulting in aggregate gross proceeds of $239,885. In thethird quarter of2024, there wasno common stock issuance to Tumim Stone Capital. In thefourth quarter of2024, the Company issued 5,643 shares of its common stock to Tumim Stone Capital in connection with its committed equity line program, at a price range of approximately $8.30 per share, resulting in aggregate gross proceeds of $46,728.

In* June, 2024,the Company entered into a stock purchase agreement with Eighty-eight Investment LLC, a Delaware limited liability company wholly owned and controlled by Mr. Xin He, our Chief Executive Officer. This purchase of 100,000 shares of our common stock at a price of $4.95 per share provided aggregate proceeds of $495,000. The purchase price represented the last consolidated closing bid price on the Nasdaq Capital Market prior to the execution of the agreement, in accordance with the requirements of Nasdaq Listing Rule5635*(c) and applicable Nasdaq interpretations.

In* September, 2024,*the Company entered into a stock purchase agreement with Yu Tian, an individual and a resident of the People’s Republic of China, in connection with the purchase by Yu Tian of 39,867 shares of common stock at a price of approximately $3.01 per share for aggregate gross proceeds of $120,000.

In* November, 2024,*the Company entered into a stock purchase agreement with a single institutional investor (the “Investor”), in connection with the purchase by the Investor of 140,000 shares of common stock, and 110,000 pre-funded warrants to purchase Common Stock (the “Pre-Funded Warrants”) in a registered direct offering (the “Offering”) at a price of $8.00 per share (or $7.90 per Pre-Funded Warrant) for aggregate gross proceeds of $1,989,000.

In* December 2024,the Company entered into a Profit Participation Agreement with Koala Malta Limited, a private limited liability company registered under the laws of Malta to purchase a 6% right in QBSG Limited to receive all distributions and dividends which maybe declared and/or distributed by the QBSG Limited on an annual basis in terms of applicable law, along with all rights, title, and interest from the Koala Malta Limited. The consideration of the Profit Participation is $1,200,000, including $700,000 cash and $500,000 value of the Company’s common stocks, or a total of 113,636 shares at a price of $4.40 per share. In addition to the 9% share purchase from the Seller in September 2022,*the Company now owns the right to receive 15% of all distributions and dividends by QBSG Limited.

In* December, 2024,*the Company entered into a stock purchase agreement with Aurous Vertex Limited (the “Investor”), a British Virgin Islands company, in connection with the purchase by the Investor of 250,000 shares of common stock at a price of $6.00 per share for aggregate gross proceeds of $1.5 million. In the agreement, Aurous Vertex Limited has an option to purchase an additional 100,000 shares of Common Stock at a subsequent closing. The purchase price per share of the additional 100,000 shares of Common Stock will be the lesser of (a) $6.00 per share and (b) the closing price of the Common Stock on the date that Investor delivers its written notice to the Company of its election to purchase the Second Closing Shares as described above.

Total shares issued during fiscal year2024 were as follows:

13. Stock-Based Compensation

Equity Incentive Plans – The Company’s2013 Equity Compensation Plan (the*“2013* Plan”) was adopted for the purpose of providing equity incentives to employees, officers, directors and consultants including options, restricted stock, restricted stock units, stock appreciation rights, other equity awards, annual incentive awards and dividend equivalents. Through a series of amendments to the2013 Plan, the total number of authorized shares available for issuance of common stock under the Plan was 75,000 shares.

On* April 11, 2023,the Board of Directors adopted a new equity incentive plan, the Professional Diversity Network, Inc.2023 Equity Compensation Plan (the“2023* Equity Compensation Plan”). The2023 Equity Compensation Plan was approved by the Company’s stockholders on* June 15, 2023.The2023* Equity Compensation Plan supersedes and replaces the2013 Plan, andno new awards will be granted under the2013 Plan. Any awards outstanding under the2013 Plan remain subject to and will be paid under the2013 Plan. The2023 Equity Compensation Plan reserves 75,000 shares of common stock for issuance of awards to directors, officers, employees and qualifying consultants of the Company and its affiliates.

Stock Options

The fair value of options is estimated on the date of grant using the Black-Scholes option pricing model. The valuation determined by the Black-Scholes pricing model is affected by the Company’s stock price, as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but arenot limited to, expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The risk-free rate is based on the U.S. Treasury rate for the expected life at the time of grant, volatility is based on the average long-term implied volatilities of peer companies, the expected life is based on the estimated average of the life of options using the simplified method, and forfeitures are estimated on the date of grant based on certain historical data. The Company utilizes the simplified method to determine the expected life of its options due to insufficient exercise activity during recent years as a basis from which to estimate future exercise patterns. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts.

Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

F-18

The following table summarizes the Company’s stock option activity for the years ended* December 31, 2024,and2023*:

There wereno stock options granted in fiscal2024 or2023.

The Company recorded non-cash stock-based compensation expense of approximately $0 and $10,850 as a component of general and administrative expenses in the accompanying consolidated statements of operations for the years ended* December 31, 2024,and2023*, pertaining to stock options awards.

F-19

Warrants

As of* December 31, 2024,and2023*, there wereno warrants outstanding and exercisable.

Restricted Stock

A summary of restricted stock activity for the years ended* December 31, 2024,and2023* is as follows:

During the year ended* December 31, 2024* the Company granted 20,653 restricted stock units (“RSUs”) to non-employee directors as partial compensation for their service as a director. The aggregate grant date fair value of the combined awards amounted to approximately $121,849. The RSU award to the Board member fully vests on theone-year anniversary after the date of grant. The Company also granted 40,000 RSUs to certain officers and managers with immediate vesting. The aggregate grant date fair value of the combined awards amounted to approximately $23,600.

During the year ended* December 31, 2023* the Company granted 3,049 restricted stock units (“RSUs”) to non-employee directors as partial compensation for their service as a director. The aggregate grant date fair value of the combined awards amounted to approximately $125,000. The RSU award to the Board member fully vests on theone-year anniversary after the date of grant. The Company also granted 8,618 RSUs to certain officers and managers with immediate vesting. The aggregate grant date fair value of the combined awards amounted to approximately $193,000.

The Company recorded non-cash stock-based compensation expense of approximately $175,000 and $300,000 as a component of general and administrative expenses in the accompanying consolidated statements of operations for the years ended* December 31, 2024,and2023*, respectively, pertaining to restricted stock awards.

Total unrecognized stock-based compensation expense related to unvested restricted stock at* December 31, 2024* was approximately $20,000 and is expected to be recognized through thethird quarter of2025.

F-20

14. Income Taxes

The Company has the following net deferred tax assets and liabilities:

The benefit for income taxes for the years ended* December 31, 2024,and2023*, consists of the following:

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

F-21

The valuation allowance at* December 31, 2024* was $11,327,730. The net change in the valuation allowance during the year ended* December 31, 2024* was an increase of $570,323. In assessing the realizability of deferred tax assets, management considers whether it is more likely thannot that some portion or all of the deferred income tax assets willnot be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a valuation allowance as of* December 31, 2024*.

At* December 31, 2024*, the Company had U.S. federal, Illinois, and New York net operating loss carryforwards of approximately $39,550,000, $21,089,000, and $11,995,000 respectively. Of the federal amount, $19,304,000 expires between2034 and2038, and $20,246,000 has an indefinite carryforward period. The Illinois losses* maybe carried forward12* years and begin to expire in2026. The New York losses* maybe carried forward20* year and begin to expire in2035. Certain tax attributes are subject to an annual limitation as a result of changes in ownership as defined under Internal Revenue Code Section382. The Company files tax returns in multiple jurisdictions and is subject to examination in these jurisdictions. Significant jurisdictions in the U.S. include New York and Illinois.

The U.S. Tax Cuts and Jobs Act of2017 provided for aone-time deemed mandatory repatriation of post-1986 undistributed foreign earnings and profit (“E&P”) through the year ended* December 31, 2017.*Due to the seizure of cash, by Chinese local authorities, the Company’s undistributed foreign E&P has been reduced to $0.

15. Segment Information

The Company operates in the following segments: (i) TalentAlly Network, which maintains and operates job board software and hosts career fairs, (ii) NAPW Network, a professional networking organization that addresses personal and professional development opportunities for women, (iii) RemoteMore (beginning in fiscal2021) which provides companies with talented engineers to provide solutions to their software needs and (iv) Corporate Overhead.

The Company's CEO and CFO comprise the executive committee. The responsibility of the executive committee is to collectively assess performance and make resource allocation decisions related to the entity’s operating segments. The CEO operates more as a strategic decision maker for the organization as a whole. The executive committee is the CODM because the committee is the highest level of management that performs these functions.

The following tables present key financial information of the Company’s reportable segments as of and for the years ended* December 31, 2024,and2023*:

F-22

16. Employee benefit plans

The Company’s employee benefit plans currently consist of a defined contribution plan for all U.S. employees. The Company doesnot offer any other postretirement benefit plans, such as retiree medical and dental benefits or deferred compensation agreements to its employees or officers.

U.S. regular, full-time employees are eligible to participate in the Professional Diversity Network Inc.401(k) Plan (“PDN Plan”), which is a qualified defined contribution plan under section401(k) of the Internal Revenue Service Code. Under the PDN Plan, employees are eligible to participate after meeting eligibility requirements and employees are always fully vested in their own contributions. Effective* January 1, 2021,the Company has elected to match up to 5% of eligible employee contributions. The contribution expense for the PDN Plan was approximately $82,000 and $88,500 for the years ended December 31, 2024*, and2023, respectively.

17. Subsequent Events

On* January 26, 2025,the Company entered into a Stock Purchase Agreement (the “SPA”) with AI Geometric Ltd, a company organized under the laws of the United Kingdom of Great Britain and Northern Ireland (the “Seller”).Pursuant to the SPA, the Seller agreed to issue and sell 1,300 shares of the Seller to the Company, representing 13% of all issued and outstanding shares of the Seller, at a consideration of $1,300,000 (the “Transaction”). The board of directors of the Company approved the Transaction on January 17,2025.The closing of the Transaction took place on January 27, 2025.*

As previously disclosed, on* June 30, 2023,the Company entered into a Common Stock Purchase Agreement, dated as of June 30, 2023 (the “Purchase Agreement”) with Tumim Stone Capital LLC (the “Investor”). Under the terms and subject to the conditions of the Purchase Agreement, the Company had the right, butnot* the obligation, to sell to the Investor, and the Investor was obligated to purchase, up to$12,775,000‎ ‎ worth of newly issued shares (the “Purchase Shares”) of the Company’s common ‎stock, par value $0.01 per share (“Common Stock”), subject to certain limitations and the satisfaction (or, where permissible, the waiver) of the conditions set forth in the Purchase Agreement. As of the date of this Current Report on Form8-K, the Company had issued and sold$2,846, 017 worth of Purchase Shares under the Purchase Agreement, which were registered on the Company’s Registration Statement on Form S-3 (FileNo. 333-260316). On* February 25, 2025,the Company gave notice to the Investor of the Company’s decision to terminate the Purchase Agreement in accordance with Section7.1* thereof, effective on thefifth business day thereafter. Consequently,no further Purchase Shares will be sold under the Purchase Agreement.

On* February 25, 2025,*the Company entered into a stock purchase agreement (the “SPA”) with Boris Krastev Ventures UG (the “Seller”), pursuant to which the Company shall acquire 1,000,000 shares of common stock (the “Acquisition”) of RemoteMore USA, Inc.‎, a Delaware corporation (“RemoteMore” or the “Target Company”) for a purchase price of $300,000, which will be paid to the Seller at the closing of the Acquisition through the issuance of 50,000 newly issued restricted shares of the Company’s common stock, at a price of $6.00 per share (the “Shares”). The closing of the Acquisition is subject to satisfaction of certain closing conditions set forth in the SPA.‎ Prior to the Acquisition, the Company held 7,262,500 shares of the Target Company, representing a majority interest in the Target Company. Upon the closing of the Acquisition, the Company’s ownership will increase to approximately 82.625% of the Target Company’s outstanding shares.

On* March 7, 2025,the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware (the “Certificate of Amendment”), which effected the Reverse Stock Split at a ratio of 10-to-1, and such Certificate of Amendment became effective as of12:01* a.m. ET on* March 13, 2025 (the “Effective Time”). As a result of the Reverse Stock Split, everyten* shares of Common Stock were combined intoone share of Common Stock and the total number of shares of Common Stock outstanding reduced from 19,322,748 shares to 1,933,274 shares. Stockholders who otherwise were entitled to receive fractional shares because they held a number of sharesnot evenly divisible by the ratio of the Reverse Stock Split were automatically entitled to receive cash in lieu of such fractional shares.

On* February 25, 2025,the Aurous Vertex Limited delivered a Written Notice to the Company exercising its option to purchase an additional 100,000 shares of Common Stock at a purchase price per share of $3.385, the closing price of the Company’s Common Stock on February 25, 2025.On March 24, 2025,*upon the satisfaction or waiver of the closing conditions, the Company issued an additional 100,000 shares of Common Stock to Aurous Vertex Limited.

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