Professional Diversity Network, Inc.
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 31, 2026
IPDN$1.35-1.5%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001437749-25-010108
ITEM 1A. - RISK FACTORSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-31.
0001437749-26-010515
ITEM 1A. - RISK FACTORSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 103 current paragraphs.
73 unchanged; 8 reworded; 22 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Our recent expansion into digital assets and intellectual property investments represents a shift from our historical business and may not be successful.
Current report
Beginning in 2025, we expanded beyond our historical professional networking, recruitment, and remote staffing operations to invest in musical works copyrights and digital assets and to explore certain Web3.0-related initiatives. These activities differ significantly from the businesses that have historically generated substantially all of our revenues.
Current report
This strategic expansion may not be successful. We have limited operating experience in these new areas, and these initiatives may not generate meaningful revenue or positive returns on investment. The markets for digital assets and intellectual property monetization are highly competitive, rapidly evolving, and subject to significant market volatility and regulatory uncertainty. If these new initiatives do not perform as expected, we may not recover our investments and could be required to recognize material impairment charges, which would adversely affect our financial condition and results of operations.
Current report
In addition, pursuing these initiatives requires significant management attention and financial resources that could otherwise be focused on our established operating segments. If the expansion of our business into these new areas is unsuccessful, our business, financial condition, and results of operations could be materially and adversely affected.
Current report
Investment in musical works copyrights may not generate expected returns and could result in impairment charges.
Current report
We have invested, and may continue to invest, significant capital in the acquisition of musical works copyrights. As of December 31, 2025, we had invested approximately $7.0 million in musical works copyrights and had committed to additional payments under certain copyright acquisition agreements.
Current report
On September 3, 2025, we entered into a copyright transfer agreement with High Wave Corp, a corporation incorporated in New York and a non-affiliated accredited investor, pursuant to which we agreed to acquire forty (40) original musical works for total consideration of $10,000,000, payable in four installments between October 15, 2025 and November 30, 2025, with ownership of each batch transferring upon payment. As of December 31, 2025, we had paid $3,700,000 under this agreement. On December 16, 2025, the Company entered into an amendment to the copyright transfer agreement (the “First Amendment to High Wave Copyright Transfer Agreement”), pursuant to which the Company retained the right, but not the obligation, to purchase the remaining twenty-five (25) musical works for total consideration of $6,300,000. If the Company elects to proceed with such purchase, the Company and High Wave will mutually agree on the delivery schedule and payment terms for the remaining works.
Current report
On September 12, 2025, we entered into the Copyright Agreement with Streams Ohio, a non-affiliated accredited investor. Pursuant to the Streams Ohio Copyright Agreement, the Company agreed to acquire eight (8) original musical works from the Streams Ohio. Under the terms of the Streams Ohio Copyright Agreement, consideration could be paid in cash, shares of the Company’s Common Stock, or a combination thereof. The Board approved payment of the consideration through the issuance of 556,000 shares of Common Stock (the “Copyright Shares”), with an aggregate value of approximately $1,629,080, based on the closing price of $2.93 per share on September 12, 2025, subject to the limitations of the Nasdaq Listing Rule 5635. The Copyright Shares were issued in reliance on the exemptions from registration provided by Section 4(a)(2) under the Securities Act, and/or Regulation D promulgated thereunder. The Streams Ohio Copyright Agreement contains customary representations, warranties, and covenants.
Current report
On November 24, 2025, we entered into a copyright transfer agreement with Shohan Event Organizers Co., L.L.C. , a non-affiliated accredited investor. Pursuant to the Copyright Agreement, the Company agreed to acquire five (5) original musical works from the Copyright Seller. Under the terms of the Copyright Agreement, consideration could be paid in cash, shares of the Company’s Common Stock, par value $0.01 per share, or a combination thereof. The board of directors of the Company approved payment of the consideration through the issuance of 927,600 shares of Common Stock, with an aggregate value of approximately $1,604,748, based on the closing price of $1.73 per share on November 24, 2025, subject to the limitations of Listing Rule 5635 of The Nasdaq Stock Market LLC. The Copyright Shares will be issued in reliance on the exemptions from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder.
Current report
The value of these assets and the returns we expect to generate from them depend on the continued commercial success, licensing demand, and audience engagement of the underlying musical compositions. Royalty income derived from musical works is inherently uncertain and may fluctuate significantly due to factors outside of our control, including changes in consumer preferences, streaming and distribution economics, pricing models adopted by digital service providers, competitive content, technological developments, changes in intellectual property laws or regulations, and general economic conditions.
Current report
Royalty collections depend on third-party publishers, administrators, performing rights organizations, digital platforms, and other intermediaries, over which we have limited control. Any failure by such parties to accurately track usage, collect royalties, or remit payments in a timely manner could adversely affect our revenues and cash flows. Musical works copyrights are intangible assets subject to periodic impairment testing under applicable accounting standards. If the actual or projected cash flows generated by these assets decline, if discount rates increase, or if market conditions deteriorate, we may be required to recognize impairment charges. Any such impairment could be material and would adversely affect our financial condition and results of operations.
Current report
Accordingly, our investments in musical works copyrights may not generate the anticipated returns, and we may not recover the full amount of our investment.
Current report
Our investment in DTT Tokens is speculative and may result in material losses and stockholder dilution.
Current report
On December 17, 2025, we acquired 25,937,800 native utility digital tokens issued by DeeptradeX.ai, an Australian-based digital asset trading platform, for aggregate consideration of $2,593,780. The board of directors of the Company approved payment of the consideration through the issuance of 1,358,000 shares of Common Stock, subject to the limitations of Listing Rule 5635 of The Nasdaq Stock Market LLC and the shares were issued on January 2, 2026. The DTT Tokens are intended solely for use on the issuer’s Web3.0 platform and do not provide equity ownership, debt, governance, dividend, or profit-sharing rights. The value of the tokens depends on market adoption of the issuer’s platform, overall digital asset market conditions, regulatory developments, and technological factors, all of which are highly uncertain and subject to significant volatility. We do not control the issuer’s operations, and any failure of the platform to achieve adoption or comply with evolving regulations could materially reduce the value of the tokens. In addition, digital assets are subject to limited liquidity, cybersecurity risks, and evolving accounting treatment, and we may be required to record impairment charges if the value of the tokens declines. The issuance of shares as consideration for this transaction resulted in dilution to existing stockholders and may adversely affect the market price of our Common Stock.
Current report
We use artificial intelligence (“AI”) technologies in our platform and the use of AI technologies presents unique risks and uncertainties to our business, results of operations and financial condition.
Current report
We have incorporated AI technologies into our platform since 2024 to enhance functionality and increase engagement among employers and job seekers. The use of AI presents significant risks and uncertainties.
Current report
AI technologies are inherently complex and may produce inaccurate, unreliable, biased, or otherwise inappropriate outputs. If the AI-enabled features of our platform generate incorrect feedback, discriminatory responses, or other flawed results, user trust and confidence in our services could be diminished, which could harm our reputation and adversely affect our business. Because our platform relates to employment and career development, the use of AI in this context may subject us to heightened scrutiny from users, regulators, and other third parties, including with respect to fairness, transparency, and compliance with applicable employment laws.
Current report
The legal and regulatory framework governing AI technologies is rapidly evolving and remains uncertain. Existing and emerging federal, state, and international laws and regulations—including those relating to automated decision-making, employment practices, data protection, algorithmic accountability, and consumer protection—may impose new or additional obligations on the use of AI. Such requirements may increase our compliance costs and administrative burdens and may require us or our third-party partners to modify, limit, delay, or discontinue certain AI-enabled features or services.
Current report
Any failure, or perceived failure, to comply with applicable laws, regulations, or industry standards, or any negative public perception regarding our use of AI, could result in legal liability, regulatory enforcement actions, reputational harm, and loss of customers.
Current report
Any of the foregoing risks could materially and adversely affect our business, financial condition, results of operations, and reputation.
Current report
In September 2025, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability company, pursuant to which the Company agreed to issue and sell to Streeterville shares of its Common Stock, inone or more pre-paid advance purchases (each, a “Pre-Paid Purchase” and collectively, the “Pre-Paid Purchases”) for an aggregate purchase price of up to $20,000,000. See the discussion in Part I, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources”, for more information about our shares sold to Streeterville Capital, LLC to date. To the extent we utilize this Securities Purchase Agreement in the future by selling additional shares of Common Stock, the market price of our Common Stock may be adversely affected.
Current report
In April 2023, the Board of Directors adopted the Professional Diversity Network, Inc. 2023 Equity Compensation Plan (the “2023 Equity Compensation Plan”), initially reserving 750,000 shares of Common Stock for issuance to directors, officers, employees, and eligible consultants of the Company and its affiliates. Following the Company’s 10-for-1 reverse stock split in March 2025, the reserved shares were adjusted to 75,000. In December 2025, the Board approved and adopted an amendment to the 2023 Equity Compensation Plan, increasing the number of shares reserved for issuance from 75,000 to 750,000.
Removed paragraphs (4)
Previous report
In June 2023, we entered into a stock purchase agreement with Tumim Stone Capital LLC (“Tumim Stone”), under which we have the right, but not the obligation, to sell to Tumim Stone, and Tumim Stone is obligated to purchase, up to $12,775,000 worth of newly issued shares of our common stock, subject to certain limitations and conditions and the satisfaction (or, where permissible, the waiver) of the conditions set forth in the stock purchase agreement. See the discussion in Part I, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources”, for more information about our committed equity line program with Tumim Stone and shares we have sold to date. The purchase price of shares that we sell to Tumim Stone under this agreement (other than the initial sale under that agreement) is 97% of the lowest daily average of the daily volume weighted average prices of our common stock for the three-day period prior to our election to sell shares. To the extent we utilize this equity line in the future by selling additional shares of common stock, the market price of our common stock may be adversely affected.
Previous report
The Company’s 2013 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. Following amendments approved by the Company’s stockholders in June 2017, November 2018 and June 2021, the Company was authorized to issue 75,000 shares under the amended 2013 Plan.
Previous report
In April 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”). The 2023 Equity Compensation Plan was approved by our stockholders on June 15, 2023. The 2023 Equity Compensation Plan supersedes and replaces the 2013 Plan, and no new awards will be granted under the 2013 Plan. Any awards outstanding under the 2013 Plan remain subject to and will be paid under the 2013 Plan. The 2023 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.
Reworded paragraphs (8)
Previous wording
We recorded a net loss from continuing operations of approximately $2.4 million for the year ended December 31, 2024, and $4.5 million for the year ended December 31, 2023. Our revenues decreased from $7.7 million during 2023 to $6.7 million during 2024, and our costs and expenses decreased from $12.2 million during 2023, to $9.1 million during 2024. In addition, we used approximately $2.5 million in cash flow from continuing operations during the year ended December 31, 2024. Our independent registered public accounting firm has included in its audit report for the year ended December 31, 2024, an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. We will need to continue to increase revenues, reduce our corporate operating expenses, raise capital through the issuance of common stock or enter into a strategic merger or acquisition, to achieve profitability and positive cash flow from operations. Despite our efforts, we may not achieve profitability or positive cash flow in the future, and even if we do, we may not be able to sustain being profitable.
Current wording
We recorded a net loss from continuing operations before interest and tax of approximately $6.4 million for the year ended December 31, 2025, and $2.4 million for the year ended December 31, 2024. Our revenues decreased from $6.7 million during 2024 to $6.5 million during 2025, and our costs and expenses increased from $9.1 million during 2024, to $13.0 million during 2025. In addition, we used approximately $2.1 million in cash flow from continuing operations during the year ended December 31, 2025. Our independent registered public accounting firm has included in its audit report for the year ended December 31, 2025, an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. We will need to continue to increase revenues, reduce our corporate operating expenses, raise capital through the issuance of shares of Common Stock or enter into a strategic merger or acquisition, to achieve profitability and positive cash flow from operations. Despite our efforts, we may not achieve profitability or positive cash flow in the future, and even if we do, we may not be able to sustain being profitable.
Previous wording
Our industry is rapidly evolving and becoming increasingly competitive. Larger and more established online professional networking companies, such as LinkedIn or Monster Worldwide, may focus on the online diversity professional networking market and could directly compete with us. Rival companies or smaller companies, including application developers, could also launch new products and services that could compete with us and gain market acceptance quickly. Individual employers have and may continue to create and maintain their own network of diverse candidates.
Current wording
Our industry is rapidly evolving and becoming increasingly competitive. Larger and more established online professional networking companies, such as LinkedIn, may focus on the online diversity professional networking market and could directly compete with us. Rival companies or smaller companies, including application developers, could also launch new products and services that could compete with us and gain market acceptance quickly. Individual employers have and may continue to create and maintain their own network of diverse candidates.
Previous wording
We are highly dependent on our management and other key employees. The skills, knowledge and experience of our management team, are critical to the growth of our business. In particular, Mr. Adam He, our Chief Executive Officer, provides significant leadership in every aspect of our business operations and strategic direction. Mr. He is supported by a talented group of knowledgeable executives in business operations, sales and marketing, and information technology including Megan Bozzuto, our Interim Chief Financial Officer, Russell Esquivel, Jr., our Chief Revenue Officer, and Chad Hoersten, our Chief Technology Officer. Our future performance will be dependent upon the continued successful service of members of our management and key employees. We do not maintain life insurance for any of the members of our management team or other key personnel. Competition for management in our industry is intense, and although we have entered into employment agreements with certain members of our management team, we may not be able to retain our management and key personnel or attract and retain new management and key personnel in the future, which could materially and adversely affect our business, results of operations and financial condition.
Current wording
We are highly dependent on our management and other key employees. The skills, knowledge and experience of our management team, are critical to the growth of our business. In particular, Mr. Xun Wu our Chief Executive Officer, provides significant leadership in every aspect of our business operations and strategic direction. Mr. Wu is supported by a talented group of knowledgeable executives in business operations, sales and marketing, and information technology including Bella Gu, our Chief Financial Officer, Russell Esquivel, Jr., our Chief Revenue Officer, and Chad Hoersten, our Chief Technology Officer. Our future performance will be dependent upon the continued successful service of members of our management and key employees. We do not maintain life insurance for any of the members of our management team or other key personnel. Competition for management in our industry is intense, and although we have entered into employment agreements with certain members of our management team, we may not be able to retain our management and key personnel or attract and retain new management and key personnel in the future, which could materially and adversely affect our business, results of operations and financial conditions.
Previous wording
Our significant stockholder and our directors and executive officers have substantial control over the Company and could limit your ability to influence the outcome of key transactions, including changes of control.
Current wording
Our significant stockholders have substantial control over the Company and could limit your ability to influence the outcome of key transactions, including changes of control.
Previous wording
Cosmic Forward Limited (“CFL”) beneficially owned approximately 14.8% of our common stock as of December 31, 2024. As a result of its ownership CFL is able to influence significantly all matters requiring approval by our stockholders, including the election of directors. In addition, our directors and executive officers and their affiliated entities, in the aggregate, beneficially own approximately 7.7% of our outstanding common stock as of December 31, 2024. Stockholders other than these principal stockholders may, therefore, have relatively little influence on decisions regarding such matters. These stockholders may have interests that differ from yours, and they may vote in a way with which you disagree and that may be averse to your interests. The concentration of ownership of our common stock may have the effect of delaying, preventing or deterring a change of control of our Company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our Company and may affect the market price of our common stock. This concentration of ownership also limits the number of shares of stock likely to be traded in public markets and, therefore, will adversely affect liquidity in the trading of our common stock. This concentration of ownership of our common stock may also have the effect of influencing the completion of a change in control that may not necessarily be in the best interests of all of our stockholders.
Current wording
Pursuant to a shareholders’ agreement, dated as of November 6, 2016, as amended, between the Company, Cosmic Forward Limited (“CFL”), a Republic of Seychelles company, and certain other parties named therein (collectively, the “Shareholders’ Agreement”), CFL, its shareholders and their respective controlled affiliates (collectively, the “CFL Group”), have a participation right with respect to any future issuances of Common Stock by the Company, such that the CFL Group may purchase an amount of shares necessary to maintain CFL’s then-current beneficial ownership interest, up to a maximum of 54.64% of our then-outstanding Common Stock, on a fully-diluted basis, subject to certain exceptions. Although CFL beneficially owned approximately 3.7% of our Common Stock as of December 31, 2025, its ability to increase ownership may significantly influence all matters requiring approval by our stockholders, including the election of directors. Stockholders other than these principal stockholders may, therefore, have relatively little influence on decisions regarding such matters. These stockholders may have interests that differ from yours, and they may vote in a way with which you disagree and that may be averse to your interests. The concentration of ownership of our Common Stock may have the effect of delaying, preventing or deterring a change of control of our Company, could deprive our stockholders of an opportunity to receive a premium for their Common Stock as part of a sale of our Company and may affect the market price of our Common Stock. This concentration of ownership also limits the number of shares of stock likely to be traded in public markets and, therefore, will adversely affect liquidity in the trading of our Common Stock. This concentration of ownership of our Common Stock may also have the effect of influencing the completion of a change in control that may not necessarily be in the best interests of all of our stockholders.
Previous wording
The trading price of our common stock has been, and is likely to continue to be, volatile. Our closing stock price has ranged from $4.00 to$30.10 during the fiscal year of 2024. In addition to the factors discussed in this Annual Report, the trading price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
Current wording
The trading price of our Common Stock has been, and is likely to continue to be, volatile. Our closing stock price has ranged from $1.02 to$9.01 during the fiscal year of 2025. In addition to the factors discussed in this Annual Report, the trading price of our Common Stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
Previous wording
These provisions may frustrate or prevent attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Finally, the substantial number of shares of common stock owned by CFL may make it more difficult for any third party to effect a change in control without CFL’s approval.
Current wording
These provisions may frustrate or prevent attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Finally, the potential substantial ownership of CFL may make it more difficult for any third party to effect a change in control without CFL’s approval.
Previous wording
Under our stockholders agreement with CFL and each of its shareholders (collectively, the “CFL Shareholders”), we granted to CFL and the CFL Shareholders a participation right with respect to any future issuances of common stock by the Company, such that CFL and the CFL Shareholders may purchase an amount of shares necessary to maintain CFL’s then-current beneficial ownership interest, up to a maximum of 54.64% of our then-outstanding common stock, on a fully-diluted basis, subject to certain exceptions. This participation right could limit our ability to enter into equity financing and to raise funds from third parties.
Current wording
Under the Shareholders’ Agreement, we granted to the CFL Group a participation right with respect to any future issuances of Common Stock by the Company, such that the CFL Group may purchase an amount of shares necessary to maintain CFL’s then-current beneficial ownership interest, up to a maximum of 54.64% of our then-outstanding Common Stock, on a fully-diluted basis, subject to certain exceptions. This participation right could limit our ability to enter into equity financing and to raise funds from third parties.