Professional Diversity Network, Inc.

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the accompanying consolidated financial statements and the notes thereto, and the audited consolidated financial statements and notes thereto included in our 2024 Form 10-K.

Current wording

The objective of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide a narrative from the perspective of management that allows investors to view the company through our eyes. This discussion should be read in conjunction with the accompanying condensed consolidated financial statements and the notes thereto. Our aim is to provide a qualitative and quantitative analysis of our financial condition, results of operations, and cash flows, with a particular focus on material events, trends, and uncertainties known to management that are reasonably likely to have a material impact on our future performance.

Previous wording

We are an operator of professional networks with a focus on diversity, employment, education and training. We use the term “diversity” (or “diverse”) to describe communities, or “affinities,” that are distinct based on a wide array of criteria, which may change from time to time, including ethnic, national, cultural, racial, religious or gender classification. We serve a variety of such communities, including Women, Hispanic-Americans, African-Americans, Asian-Americans, persons with disabilities, Military Professionals, and Lesbian, Gay, Bisexual and Transgender (LGBTQ+) persons, and students and graduates seeking to transition from education to career. The Company’s technology platform is integral to the operation of its business.

Current wording

We are an operator of professional networks with a focus on diversity, employment, education and training. We use the term “diversity” (or “diverse”) to describe communities, or “affinities,” that are distinct based on a wide array of criteria, including ethnic, national, cultural, racial, religious or gender classification. We serve a variety of such communities, including Women, Hispanic-Americans, African-Americans, Asian-Americans, persons with disabilities, Military Professionals, and Lesbian, Gay, Bisexual and Transgender (LGBTQ+) persons, and students and graduates seeking to transition from education to career. The Company’s technology platform is integral to the operation of its business.

Previous wording

We currently operate in three business segments. TalentAlly Network, our primary business segment, includes online professional job seeking communities with career resources tailored to the needs of various diverse cultural groups and employers looking to hire members of such groups. Our second business segment consists of the NAPW Network, a women-only professional networking organization. Our third business segment consists of RemoteMore, which connects companies with reliable, cost-efficient software developers with less effort and friction, and empowers developers to find meaningful jobs regardless of their location.

Current wording

We currently operate in three business segments. TalentAlly Network, our primary business segment, includes online professional job seeking communities with career resources tailored to the needs of various diverse cultural groups and employers looking to hire members of such groups. Our second business segment consists of the NAPW Network, a women-only professional networking organization. Our third business segment consists of RemoteMore, which connects companies with reliable, cost-efficient software developers.

Previous wording

We generate revenue from (i) paid membership subscriptions and related services, (ii) recruitment services, (iii) contracted software development, and (iv) consumer advertising and consumer marketing solutions. The following table sets forth our revenues from each product as a percentage of total revenue for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results.

Current wording

We generate revenue from ((i) recruitment services, (ii) contracted software development, (iii) paid membership subscriptions and related services, and (iv) consumer advertising and consumer marketing solutions. The following table sets forth our revenues from each product as a percentage of total revenue for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results.

Previous wording

Membership Fees and Related Services. We offer paid membership subscriptions through our NAPW Network, a women-only professional networking organization, operated by our wholly-owned subsidiary. Members gain access to networking opportunities through a members-only website at www.iawomen.com and “virtual” events which occur in a webcast setting, as well as through in-person networking local chapters. NAPW members also receive ancillary (non-networking) benefits such as educational discounts, shopping, and other membership perks. The basic package is the Initiator level, which provides online benefits only. Upgrades to an Innovator membership include the Initiator benefits, as well as a mentorship match service and upgraded content. The most comprehensive level, the Influencer, provides all the aforementioned benefits plus expanded opportunities for marketing and promotion, including the creation and distribution of a press release, which is sent over major newswires. Additionally, all memberships offer educational programs with discounts or at no cost, based on the membership level. NAPW Membership is renewable and fees are payable on an annual or monthly basis, with the first fee payable at the commencement of the membership. We offer to new purchasers of our NAPW memberships the opportunity to purchase a commemorative wall plaque at the time of purchase.

Current wording

Membership Fees and Related Services. We offer paid membership subscriptions through our NAPW Network, a women-only professional networking organization, operated by our wholly-owned subsidiary. Members gain access to networking opportunities through a members-only website at www.iawomen.com and “virtual” events which occur in a webcast setting, as well as through in-person networking local chapters. NAPW members also receive ancillary (non-networking) benefits such as educational discounts, shopping, and other membership perks. The basic package is the Initiator level, which provides online benefits only. Upgrades to an Innovator membership include the Initiator benefits, as well as a mentorship match service and upgraded content. The most comprehensive level, the Influencer, provides all the aforementioned benefits plus expanded opportunities for marketing and promotion, including the creation and distribution of a press release, which is sent over major newswires. Additionally, all memberships offer educational programs with discounts or at no cost, based on the membership level. NAPW Membership is renewable and fees are payable on an annual or monthly basis, with the first fee payable at the commencement of the membership.

Previous wording

Total revenues for the three months ended June 30, 2025, decreased approximately $49,000, or 2.9%, to approximately $1,641,000 from approximately $1,690,000 during the same period in the prior year. The decrease was predominantly attributable to an approximate $264,000 decrease in recruitment services which was primarily driven by a slowdown in corporate spending on diversity, equity, and inclusion (“DEI”) initiatives. We believe this trend is influenced by a shifting political and legal landscape, including the Supreme Court's 2023 decision on affirmative action and various executive orders and state-level legislation targeting DEI programs, which has caused some companies in both the public and private sectors to pause or re-evaluate their diversity-focused recruitment budgets. Revenue from membership and related services also declined by approximately $23,000. These decreases were partially offset by a $239,000 increase in contracted software development revenue.

Current wording

Total revenues for the three months ended September 30, 2025, increased approximately $38,000, or 2.2%, to approximately $1,732,000 from approximately $1,694,000 during the same period in the prior year. The increase was predominantly attributable to a approximate $378,000 increase in contracted software development revenue. This increase was partially offset by an approximate $314,000 decrease in recruitment services which was primarily driven by a slowdown in corporate spending on diversity, equity, and inclusion (“DEI”) initiatives. We believe this trend is influenced by a shifting political and legal landscape, including the Supreme Court's 2023 decision on affirmative action and various executive orders and state-level legislation targeting DEI programs, which has caused some companies in both the public and private sectors to pause or re-evaluate their diversity-focused recruitment budgets. Revenue from membership and related services also declined by approximately $20,000.

Previous wording

Total revenues for the six months ended June 30, 2025, decreased approximately $271,000, or 7.9%, to approximately $3,146,000 from approximately $3,417,000 during the same period in the prior year. The decrease was predominantly attributable to an approximate $452,000 decrease in recruitment services which was primarily driven by a slowdown in corporate spending on DEI initiatives. We believe this trend is influenced by a shifting political and legal landscape, including the Supreme Court's 2023 decision on affirmative action and various executive orders and state-level legislation targeting DEI programs, which has caused some companies in both the public and private sectors to pause or re-evaluate their diversity-focused recruitment budgets. Revenue from membership and related services also declined by approximately $54,000. These decreases were partially offset by a $242,000 increase in contracted software development revenue.

Current wording

Total revenues for the nine months ended September 30, 2025, decreased approximately $233,000, or 4.6%, to approximately $4,878,000 from approximately $5,111,000 during the same period in the prior year. The decrease was predominantly attributable to an approximate $767,000 decrease in recruitment services which was primarily driven by a slowdown in corporate spending on DEI initiatives. We believe this trend is influenced by a shifting political and legal landscape, including the Supreme Court's 2023 decision on affirmative action and various executive orders and state-level legislation targeting DEI programs, which has caused some companies in both the public and private sectors to pause or re-evaluate their diversity-focused recruitment budgets. Revenue from membership and related services also declined by approximately $74,000. These decreases were partially offset by a $621,000 increase in contracted software development revenue.

Previous wording

During the three months ended June 30, 2025, our TalentAlly Network generated approximately $887,000 in revenues compared to approximately $1,152,000 in revenues during the three months ended June 30, 2024, a decrease of approximately $265,000, or 23.0%. This decrease is consistent with the broader trend of reduced corporate spending on DEI-focused recruitment services discussed previously.

Current wording

During the three months ended September 30, 2025, our TalentAlly Network generated approximately $883,000 in revenues compared to approximately $1,203,000 in revenues during the three months ended September 30, 2024, a decrease of approximately $320,000, or 26.6%. This decrease is consistent with the broader trend of reduced corporate spending on DEI-focused recruitment services discussed previously.

Previous wording

During the three months ended June 30, 2025, NAPW Network revenues generated approximately $86,000, compared to revenues of approximately $109,000 during the same period in the prior year, a decrease of approximately $23,000, or 21.1%. Management attributes this decline to lower renewal rates and reduced acquisition of new members in a competitive market for professional networking organizations.

Current wording

During the three months ended September 30, 2025, NAPW Network revenues generated approximately $81,000, compared to revenues of approximately $101,000 during the same period in the prior year, a decrease of approximately $20,000, or 19.8%. Management attributes this decline to lower renewal rates and reduced acquisition of new members in a competitive market for professional networking organizations.

Previous wording

During the three months ended June 30, 2025, RemoteMore revenue was approximately $668,000, compared to revenues of approximately $429,000 during the same period in the prior year, an increase of approximately $239,000, or 55.7%. This significant growth is primarily due to increased demand for qualified, remote software developers as companies continue to embrace flexible staffing models to manage costs and access a global talent pool. We have also focused our sales and marketing efforts on this segment, resulting in the acquisition of several new key client contracts during the period.

Current wording

During the three months ended September 30, 2025, RemoteMore revenue was approximately $768,000, compared to revenues of approximately $390,000 during the same period in the prior year, an increase of approximately $378,000, or 96.9%. This significant growth is primarily due to increased demand for qualified, remote software developers as companies continue to embrace flexible staffing models to manage costs and access a global talent pool. We have also focused our sales and marketing efforts on this segment, resulting in the acquisition of several new key client contracts during the period.

Previous wording

During the six months ended June 30, 2025, our TalentAlly Network generated approximately $1,808,000 in revenues compared to approximately $2,267,000 in revenues during the six months ended June 30, 2024, a decrease of approximately $459,000, or 20.2%.

Current wording

During the nine months ended September 30, 2025, our TalentAlly Network generated approximately $2,690,000 in revenues compared to approximately $3,470,000 in revenues during the nine months ended September 30, 2024, a decrease of approximately $780,000, or 22.5%.

Previous wording

During the six months ended June 30, 2025, NAPW Network revenues generated approximately $182,000, compared to revenues of approximately $236,000 during the same period in the prior year, a decrease of approximately $54,000 , or 22.9%.

Current wording

During the nine months ended September 30, 2025, NAPW Network revenues generated approximately $263,000, compared to revenues of approximately $337,000 during the same period in the prior year, a decrease of approximately $74,000 , or 22.0%.

Previous wording

During the six months ended June 30, 2025, RemoteMore revenue was approximately $1,156,000, compared to revenues of approximately $914,000 during the same period in the prior year, an increase of approximately $242,000, or 26.5%.

Current wording

During the nine months ended September 30, 2025, RemoteMore revenue was approximately $1,925,000, compared to revenues of approximately $1,304,000 during the same period in the prior year, an increase of approximately $621,000, or 47.6%.

Previous wording

Cost of revenues: Cost of revenues during the three months ended June 30, 2025 was approximately $929,000, an increase of approximately $303,000, or 48.4%, from approximately $626,000 during the same period of the prior year. The increase was predominantly due to an approximate $232,000 increase in RemoteMore's contract costs, which are the fees paid to external developers and are directly correlated with the segment's significant revenue growth. The remainder of the increase is due to a $46,000 increase in payroll related costs, mainly reflecting the cessation of labor-cost capitalization following the launch of the new website, and $25,000 other cost of revenue. This shift in our cost structure, with a higher proportion of costs attributable to payments to third-party developers, represents a structural change tied directly to our revenue mix. We expect this trend to continue as long as the RemoteMore segment continues to grow.

Current wording

Cost of revenues: Cost of revenues during the three months ended September 30, 2025 was approximately $969,000, an increase of approximately $272,000, or 39.0%, from approximately $697,000 during the same period of the prior year. The increase was predominantly due to an approximate $322,000 increase in RemoteMore's contract costs, which are the fees paid to external developers and are directly correlated with the segment's significant revenue growth. Partially offsetting the increases is a decrease of approximately $36,000 in payroll related costs, and approximately $14,000 in event related costs.

Previous wording

Cost of revenues: Cost of revenues during the six months ended June 30, 2025 was approximately $1,648,000, an increase of approximately $369,000, or 28.9%, from approximately $1,279,000 during the same period of the prior year. The increase was predominantly due to an approximate $229,000 increase in RemoteMore's contract costs, $96,000 increase in payroll related costs, mainly reflecting the cessation of labor-cost capitalization following the launch of the new website, and $44,000 other cost of revenue.

Current wording

Cost of revenues: Cost of revenues during the nine months ended September 30, 2025 was approximately $2,617,000, an increase of approximately $641,000, or 32.4%, from approximately $1,976,000 during the same period of the prior year. The increase was predominantly due to an approximate $550,000 increase in RemoteMore's contract costs, which are the fees paid to external developers and are directly correlated with the segment's significant revenue growth. and approximately $91,000 increase in labor capitalization expenses.

Previous wording

Sales and marketing expense: Sales and marketing expense during the three months ended June 30, 2025 was approximately $494,000, a decrease of approximately $278,000, or 36.0%, from $772,000 during the same period in the prior year. The decrease was predominantly attributed to approximately $233,000 of reduced payroll and commission related costs and $45,000 reduction in marketing and marketing related consulting and software costs.

Current wording

Sales and marketing expense: Sales and marketing expense during the three months ended September 30, 2025 was approximately $434,000, a decrease of approximately $200,000, or 31.5%, from $634,000 during the same period in the prior year. The decrease was predominantly attributed to approximately $150,000 of reduced payroll and commission related costs and $29,000 reduction in marketing and $21,000 related to consulting and software costs.

Previous wording

Sales and marketing expense: Sales and marketing expense during the six months ended June 30, 2025 was approximately $1,065,000 a decrease of approximately $537,000, or 33.5%, from $1,602,000 during the same period in the prior year. The decrease was predominantly attributed to approximately $397,000 of reduced payroll and commission related costs and $140,000 reduction in marketing and marketing related consulting and software costs.

Current wording

Sales and marketing expense: Sales and marketing expense during the nine months ended September 30, 2025 was approximately $1,499,000 a decrease of approximately $737,000, or 33.0%, from $2,236,000 during the same period in the prior year. The decrease was predominantly attributed to approximately $512,000 of reduced payroll and commission related costs and $151,000 reduction in marketing and $74,000 related to consulting and software costs.

Previous wording

General and administrative expense: General and administrative expenses decreased by approximately $145,000, or 17.7%, to approximately $674,000 during the three months ended June 30, 2025, as compared to approximately $819,000 during the same period in the prior year. The decrease in expenses was predominantly due to reductions of approximately $75,000 of salaries and related benefit charges, $60,000 of share based compensation expenses and $10,000 in other general and administrative expenses.

Current wording

General and administrative expense: General and administrative expenses increased by approximately $1,658,000, or 65.1%, to approximately $4,203,000 during the nine months ended September 30, 2025, as compared to approximately $2,545,000 during the same period in the prior year. The increase in expenses was predominantly due to approximately $1,650,000 consulting fee related to the RWA service and $8,000 in other general and administrative expenses.

Previous wording

Depreciation and amortization expense: Depreciation and amortization expense during the three months ended June 30, 2025 was approximately $41,000, a decrease of approximately $14,000 or 25.5%, compared to approximately $55,000 during the same period in the prior year. The decrease was primarily attributable to the amortization of trade name and other intangible assets.

Current wording

Depreciation and amortization expense: Depreciation and amortization expense during the three months ended September 30, 2025 was approximately $39,000, a decrease of approximately $17,000 or 30.4%, compared to approximately $56,000 during the same period in the prior year. The decrease was primarily attributable to the amortization of trade name and other intangible assets.

Previous wording

Depreciation and amortization expense: Depreciation and amortization expense during the six months ended June 30, 2025 was approximately $82,000, a decrease of approximately $25,000 or 23.4%, compared to approximately $107,000 during the same period in the prior year. The decrease was primarily attributable to the amortization of trade name and other intangible assets.

Current wording

Depreciation and amortization expense: Depreciation and amortization expense during the nine months ended September 30, 2025 was approximately $121,000, a decrease of approximately $42,000 or 25.8%, compared to approximately $163,000 during the same period in the prior year. The decrease was primarily attributable to the amortization of trade name and other intangible assets.

Previous wording

For the six months ended June 30, 2025, costs and expenses related to our TalentAlly Network segment decreased by approximately $604,000, or 24.1%, as compared to the same period in the prior year. The decrease is primarily a result of reductions of approximately $479,000 in sales and marketing costs, and approximately $182,000 in general and administrative costs. Partially offsetting the decreases is an increase of approximately $9,000 in depreciation and amortization costs, and approximately $48,000 in costs of sales.

Current wording

For the three months ended September 30, 2025, costs and expenses related to our TalentAlly Network segment decreased by approximately $222,000, or 20.0%, as compared to the same period in the prior year. The decrease is primarily a result of reductions of approximately $189,000 in payroll related costs, approximately $26,000 in sales and marketing costs, approximately $47,000 in revenue sharing costs, and approximately $25,000 in third party software related to sales. Partially offsetting the decreases is an increase of approximately $57,000 in bad debt expenses, and approximately $8,000 in general and administrative costs.

Previous wording

For the three months ended June 30, 2025, costs and expenses related to our TalentAlly Network segment decreased by approximately $272,000, or 22.9%, as compared to the same period in the prior year. The decrease is primarily a result of reductions of approximately $234,000 in sales and marketing costs, and approximately $60,000 in general and administrative costs. Partially offsetting the decreases is an increase of approximately $4,000 in depreciation and amortization costs, and approximately $18,000 in costs of sales.

Current wording

For the nine months ended September 30, 2025, costs and expenses related to our TalentAlly Network segment decreased by approximately $827,000, or 22.9%, as compared to the same period in the prior year. The decrease is primarily a result of reductions of approximately $630,000 in payroll related costs, approximately $135,000 in sales and marketing costs, approximately $64,000 in revenue sharing costs, and approximately $50,000 in third party software related to sales. Partially offsetting the decreases is an increase of approximately $48,000 in bad debt expenses, and approximately $4,000 in general and administrative costs.

Previous wording

For the six months ended June 30, 2025, costs and expenses related to the NAPW Network decreased by approximately $78,000, or 24.5%, as compared to the same period in the prior year. The decrease is predominantly due to a reduction in approximately $15,000 in sales and marketing costs, approximately $37,000 in depreciation and amortization costs, approximately $24,000 in general and administrative costs, and approximately $2,000 in costs of sales.

Current wording

For the three months ended September 30, 2025, costs and expenses related to the NAPW Network decreased by approximately $14,000, or 10.0%, as compared to the same period in the prior year. The decrease is predominantly due to a reduction in approximately $19,000 in depreciation. Partially offsetting the decreases is an increase of approximately $5,000 in general and administrative costs.

Previous wording

For the three months ended June 30, 2025, costs and expenses related to the NAPW Network decreased by approximately $21,000, or 14.9%, as compared to the same period in the prior year. The decrease is predominantly due to a reduction in approximately $19,000 in depreciation and amortization costs and approximately $2,000 in general and administrative costs.

Current wording

For the nine months ended September 30, 2025, costs and expenses related to the NAPW Network decreased by approximately $91,000, or 19.9%, as compared to the same period in the prior year. The decrease is predominantly due to a reduction in approximately $57,000 in depreciation and amortization costs, and approximately $34,000 in general and administrative costs.

Previous wording

For the three months ended June 30, 2025, cost and expenses related to RemoteMore increased by approximately $217,000, or 39.5%, as compared to the same period in the prior year, predominantly due to an increase in costs of sales approximately $217,000.

Current wording

For the three months ended September 30, 2025, cost and expenses related to RemoteMore increased by approximately $398,000, or 86.0%, as compared to the same period in the prior year, predominantly due to an increase approximately $322,000 in costs of sales, $50,000 in bad debt expense and approximately $26,000 in general and administrative costs.

Previous wording

For the six months ended June 30, 2025, cost and expenses related to RemoteMore increased by approximately $253,000, or 23.3%, as compared to the same period in the prior year, predominantly due to an increase in costs of sales approximately $253,000.

Current wording

For the nine months ended September 30, 2025, cost and expenses related to RemoteMore increased by approximately $651,000, or 42.0%, as compared to the same period in the prior year, predominantly due to an increase approximately $550,000 in costs of sales, $42,000 in bad debt expense and approximately $59,000 in general and administrative costs.

Previous wording

During the three months ended June 30, 2025 and 2024, we recorded an income tax expense of approximately $0 and an income tax expense of approximately $4,000, respectively.

Current wording

During the three months ended September 30, 2025 and 2024, we recorded an income tax expense of approximately $0 and an income tax expense of approximately $0, respectively.

Previous wording

During the six months ended June 30, 2025 and 2024, we recorded an income tax expense of approximately $0 and an income tax expense of approximately $6,000, respectively.

Current wording

During the nine months ended September 30, 2025 and 2024, we recorded an income tax expense of approximately $0 and an income tax expense of approximately $6,000, respectively.

Previous wording

Consolidated Net Loss from Continuing Operations, Net of Tax. As the result of the factors discussed above, during the three months ended June 30, 2025, we incurred a net loss from continuing operations of approximately $492,000, a decrease in the net loss of approximately $94,000, compared to a net loss of approximately $586,000 during the three months ended June 30, 2024. As the result of the factors discussed above, during the six months ended June 30, 2025, we incurred a net loss from continuing operations of approximately $1,233,000, a decrease in the net loss of approximately $160,000, compared to a net loss of approximately $1,393,000 during the six months ended June 30, 2024.

Current wording

Consolidated Net Loss from Continuing Operations, Net of Tax. As the result of the factors discussed above, during the three months ended September 30, 2025, we incurred a net loss from continuing operations of approximately $2,375,000, a increase in the net loss of approximately $1,953,000, compared to a net loss of approximately $422,000 during the three months ended September 30, 2024. As the result of the factors discussed above, during the nine months ended September 30, 2025, we incurred a net loss from continuing operations of approximately $3,608,000, a increase in the net loss of approximately $1,793,000, compared to a net loss of approximately $1,815,000 during the nine months ended September 30, 2024.

Previous wording

Our principal sources of liquidity are our cash and cash equivalents, including cash from operations and net proceeds from the issuances of common stock, if any. As of June 30, 2025, we had cash and cash equivalents of approximately $125,000 compared to cash and cash equivalents of approximately $1,731,000 at December 31, 2024. Our working capital has shifted from $271,000 at December 31, 2024 to a working deficiency of approximately $1,919,000 at June 30, 2025. We had an accumulated deficit of approximately $103,613,000 at June 30, 2025.

Current wording

Our principal sources of liquidity are our cash and cash equivalents, including cash from operations and net proceeds from the issuances of common stock, if any. As of September 30, 2025, we had cash and cash equivalents of approximately $265,000 compared to cash and cash equivalents of approximately $1,731,000 at December 31, 2024. Our working capital has shifted from $271,000 at December 31, 2024 to a working capital deficit of approximately $2,128,000 at September 30, 2025. We had an accumulated deficit of approximately $105,970,000 at September 30, 2025.

Previous wording

The significant decrease in our cash and cash equivalents and working capital during the first six months of 2025 was primarily due to cash used in operating activities of $780,000 and a strategic investment of approximately $1.3 million in AI Geometric Ltd. These factors, combined with our history of recurring losses from operations, raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to further implement our business plan, raise capital, and generate revenues. The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Current wording

The significant decrease in our cash and cash equivalents and working capital during the first nine months of 2025 was primarily due to cash used in operating activities of $3,496,000 and a strategic investment of approximately $1.3 million in AI Geometric Ltd. These factors, combined with our history of recurring losses from operations, raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to further implement our business plan, raise capital, and generate revenues. The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Previous wording

Our cash and cash equivalents at June 30, 2025 and cash flow from operations may not be sufficient to meet our working capital requirements for the fiscal year ending December 31, 2025, without the need to increase revenues, or raise capital by the issuance of common stock, including through our line of equity or private placements. There can be no assurances that our business plans and actions will be successful, that we will generate anticipated revenues, or that unforeseen circumstances will not require additional funding sources in the future or require an acceleration of plans to conserve liquidity. Future efforts to raise additional funds may not be successful or they may not be available on acceptable terms, if at all.

Current wording

Our cash and cash equivalents at September 30, 2025 and cash flow from operations may not be sufficient to meet our working capital requirements for the fiscal year ending December 31, 2025, without the need to increase revenues, or raise capital by the issuance of common stock, including through our line of equity or private placements. There can be no assurances that our business plans and actions will be successful, that we will generate anticipated revenues, or that unforeseen circumstances will not require additional funding sources in the future or require an acceleration of plans to conserve liquidity. Future efforts to raise additional funds may not be successful or they may not be available on acceptable terms, if at all. This requirement is significantly amplified by our commitment to complete the acquisition of musical compositions from High Wave Corp for a total consideration of $10,000,000, with payments due by November 30, 2025, as described in Note 16. Our ability to fulfill this and other obligations is entirely dependent on our success in raising substantial additional capital through the financing activities described herein or other alternatives. There is no assurance that such financing will be available on acceptable terms, or at all.

Previous wording

Net cash used in operating activities from continuing operations during the six months ended June 30, 2025, was approximately $780,000. We had a net loss from continuing operations of approximately $1,233,000 during the six months ended June 30, 2025, which included stock-based compensation expense of approximately $22,000, depreciation and amortization expense of approximately $82,000, provision for doubtful accounts of approximately $18,000, unrealized loss on investment of approximately $44,000, and noncash lease expense of $46,000. Changes in operating assets and liabilities provided approximately $242,000 of cash during the six months ended June 30, 2025.

Current wording

Net cash used in operating activities from continuing operations during the nine months ended September 30, 2025, was approximately $3,496,000. We had a net loss from continuing operations of approximately $3,608,000 during the nine months ended September 30, 2025, which included stock-based compensation expense of approximately $40,000, depreciation and amortization expense of approximately $121,000, provision for doubtful accounts of approximately $95,000, unrealized loss on investment of approximately $44,000, and noncash lease expense of $69,000. Changes in operating assets and liabilities used approximately $256,000 of cash during the nine months ended September 30, 2025.

Previous wording

Net cash used in operating activities from continuing operations during the six months ended June 30, 2024, was approximately $768,000. We had a net loss from continuing operations of approximately $1,393,000 during the six months ended June 30, 2024, which included stock-based compensation expense of approximately $110,000, depreciation and amortization expense of approximately $107,000, provision for doubtful accounts of approximately $36,000, and noncash lease expense of $46,000. Changes in operating assets and liabilities provided approximately $327,000 of cash during the six months ended June 30, 2024.

Current wording

Net cash used in operating activities from continuing operations during the nine months ended September 30, 2024, was approximately $1,324,000. We had a net loss from continuing operations of approximately $1,815,000 during the nine months ended September 30, 2024, which included stock-based compensation expense of approximately $138,000, depreciation and amortization expense of approximately $163,000, provision for doubtful accounts of approximately $4,000, and noncash lease expense of $69,000. Changes in operating assets and liabilities provided approximately $115,000 of cash during the nine months ended September 30, 2024.

Previous wording

Net cash used in investing activities during the six months ended June 30, 2025, was approximately $1,304,000 which is primary related to the investment in 13% of AI Geometric Ltd's outstanding shares.

Current wording

Net cash used in investing activities during the nine months ended September 30, 2025, was approximately $4,204,000 which is primary related to the investment in 13% of AI Geometric Ltd's outstanding shares and the purchase of intangible assets.

Previous wording

Net cash used in investing activities from continuing operations during the six months ended June 30, 2024, was approximately $153,000, which consisted of investments in developed technology and computer equipment purchases

Current wording

Net cash used in investing activities from continuing operations during the nine months ended September 30, 2024, was approximately $202,000, which consisted of investments in developed technology and computer equipment purchases.

Previous wording

Net cash provided in financing activities during the six months ended June 30, 2025, was approximately $478,000 representing the proceeds from the sale of common stock and proceeds from short-term debt.

Current wording

Net cash provided in financing activities during the nine months ended September 30, 2025, was approximately $6,234,000 representing the proceeds from the sale of common stock and proceeds from short-term debt.

Previous wording

Net cash provided in financing activities during the six months ended June 30, 2024 was approximately $912,000 representing the proceeds from the sale of common stock and proceeds from minority partners.

Current wording

Net cash provided in financing activities during the nine months ended September 30, 2024 was approximately $1,032,000 representing the proceeds from the sale of common stock and proceeds from minority partners.

Previous wording

The following table provides a reconciliation of net loss from continuing operations to Adjusted EBITDA, the most directly comparable GAAP measure reported in our consolidated financial statements, for the three and six months ended June 30, 2025 and 2024:

Current wording

The following table provides a reconciliation of net loss from continuing operations to Adjusted EBITDA, the most directly comparable GAAP measure reported in our consolidated financial statements, for the three and nine months ended September 30, 2025 and 2024:

Previous wording

We are in an alliance with another company to build, host, and manage some of our job boards and website. This alliance member also sells two of our recruitment services products and bills customers, collects fees, and provides customer services. For the six months ended June 30, 2025 and 2024, we recorded approximately 2% and 6% of our recruitment services revenue from this alliance sales relationship. In 2024, we transitioned the management of these job boards and website operations in-house.

Current wording

We are in an alliance with another company to build, host, and manage some of our job boards and website. This alliance member also sells two of our recruitment services products and bills customers, collects fees, and provides customer services. For the nine months ended September 30, 2025 and 2024, we recorded approximately 1% and 6% of our recruitment services revenue from this alliance sales relationship. In 2024, we transitioned the management of these job boards and website operations in-house.