Professional Diversity Network, Inc.

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.

Current wording

As of June 30, 2026, we operated 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. On July 3, 2026, the Company completed the sale of the NAPW Network and IAW, Inc. The divestiture aligns with the Company’s strategy to focus on its core business operations and reduce operating losses. Our third business segment consists of RemoteMore, which connects companies with reliable, cost-efficient software developers. Currently, we operates in two business segments, TalentAlly Network and RemoteMore (beginning in fiscal2021).

Previous wording

During the three months ended March 31, 2026, our TalentAlly Network generated approximately $637,000 in revenues compared to approximately $921,000 in revenues during the three months ended March 31, 2025, a decrease of approximately $284,000, or 30.8%. The decrease in the TalentAlly Network segment is due to reduced demand for online recruitment and hiring solutions, consistent with broader market conditions affecting the talent acquisition industry. In addition, certain employers moderated or deferred spending on diversity, equity, and inclusion focused initiatives, which contributed to the decrease in demand for certain of our offerings. The Company continues to monitor these trends and adjust its operating strategy accordingly.

Current wording

During the three months ended June 30, 2026, our TalentAlly Network generated approximately $587,000 in revenues compared to approximately $887,000 in revenues during the three months ended June 30, 2025, a decrease of approximately $300,000, or 33.8%. The decrease in the TalentAlly Network segment was due to reduced demand for online recruitment and hiring solutions, consistent with broader market conditions affecting the talent acquisition industry. In addition, certain employers moderated or deferred spending on diversity, equity, and inclusion focused initiatives, which contributed to the decrease in demand for certain of our offerings. The Company continues to monitor these trends and adjust its operating strategy accordingly.

Previous wording

During the three months ended March 31, 2026, NAPW Network revenues generated approximately $75,000, compared to revenues of approximately $96,000 during the same period in the prior year, a decrease of approximately $21,000, or 21.9%. The decrease in the NAPW Network segment was primarily driven by reduced demand for membership-based professional networking organizations, reflecting broader shifts in market preferences. In addition, reduced access to funding and capital for certain segments of entrepreneurs, including women entrepreneurs, has impacted their ability and willingness to participate in fee-based membership programs and related events, which contributed to lower membership acquisition and renewal activity during the period.

Current wording

During the three months ended June 30, 2026, NAPW Network generated approximately $68,000, compared to revenues of approximately $86,000 during the same period in the prior year, a decrease of approximately $18,000, or 20.9%. The decrease in the NAPW Network segment was primarily driven by reduced demand for membership-based professional networking organizations, reflecting broader shifts in market preferences. In addition, reduced access to funding and capital for certain segments of entrepreneurs, including women entrepreneurs, had impacted their ability and willingness to participate in fee-based membership programs and related events, which contributed to lower membership acquisition and renewal activity during the period.

Previous wording

The Company’s licensing service initiatives are in the early stages of development. Since September 2025, the Company has acquired the copyrights to 28 original musical works. As of March 31, 2026, the copyright assets have not generated revenue. The Company is in the process of developing and implementing commercialization strategies, including licensing and promotional activities, for these copyright assets. While management intends to pursue revenue-generating opportunities related to these assets, there can be no assurance as to the timing or extent of any revenue that may be generated.

Current wording

The Company’s licensing service initiatives are in the early stages of development. Since September 2025, the Company has acquired the copyrights to 28 original musical works. As of June 30, 2026, the copyright assets had not generated revenue. The Company is in the process of developing and implementing commercialization strategies, including licensing and promotional activities, for these copyright assets. While management intends to pursue revenue-generating opportunities related to these assets, there can be no assurance as to the timing or extent of any revenue that may be generated.

Previous wording

Cost of revenues: Cost of revenues during the three months ended March 31, 2026 was approximately $1,013,000, an increase of approximately $294,000, or 40.9%, from approximately $719,000 during the same period of the prior year. The increase was predominantly due to an approximate $345,000 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 $39,000 in payroll-related costs and approximately $12,000 in event-related and other costs due to labor restructuring and system automation.

Current wording

Cost of revenues: Cost of revenues during the six months ended June 30, 2026 was approximately $1,733,000, an increase of approximately $85,000, or 5.2%, from approximately $1,648,000 during the same period of the prior year. The decrease was predominantly due to an approximate $243,000 increase in RemoteMore’s contract costs, which were the fees paid to external developers and were directly correlated with the segment’s significant revenue growth. Partially offsetting the increases was a decrease of approximately $87,000 in payroll-related costs and approximately $71,000 in event-related and other costs due to labor restructuring and system automation.

Previous wording

Sales and marketing expense: Sales and marketing expense during the three months ended March 31, 2026 was approximately $421,000, a decrease of approximately $150,000, or 26.3%, from $571,000 during the same period in the prior year. The decrease was predominantly attributed to approximately $52,000 of reduced payroll and commission related costs and $49,000 reduction in marketing and $49,000 related to consulting and software costs. The overall reduction in sales and marketing expenses was driven by lower revenue levels and improved operational efficiency, which collectively resulted in decreased spending across payroll, marketing, consulting, and other related services.

Current wording

Sales and marketing expense: Sales and marketing expense during the three months ended June 30, 2026 was approximately $339,000, a decrease of approximately $155,000, or 31.4%, from $494,000 during the same period in the prior year. The decrease was predominantly attributed to approximately $33,000 of reduced payroll and commission related costs, $78,000 reduction in marketing and $44,000 related to consulting and software costs. The overall reduction in sales and marketing expenses was driven by lower revenue levels and improved operational efficiency, which collectively resulted in decreased spending across payroll, marketing, consulting, and other related services.

Previous wording

General and administrative expense: General and administrative expenses decreased by approximately $107,000, or 12.2%, to approximately $772,000 during the three months ended March 31, 2026, as compared to approximately $879,000 during the same period in the prior year. The decrease in expenses was predominantly due to reductions of approximately $54,000 in salaries and related benefit charges due to workforce reductions, and $53,000 in legal expenses due to lower litigation activity.

Current wording

General and administrative expense: General and administrative expenses decreased by approximately $3,000, or 0.4%, to approximately $671,000 during the three months ended June 30, 2026, as compared to approximately $674,000 during the same period in the prior year. The decrease in expenses was predominantly due to reductions of approximately $3,000 in miscellaneous expenses.

Previous wording

Depreciation and amortization expense: Depreciation and amortization expense during the three months ended March 31, 2026 was approximately $1,196,000, an increase of approximately $1,155,000 or 2817.1%, compared to approximately $41,000 during the same period in the prior year. The increase was primarily attributable to the amortization of musical works copyrights acquired by the Company, which are being amortized over an estimated 18-month useful life based on the expected peak streaming period.

Current wording

Depreciation and amortization expense: Depreciation and amortization expense during the three months ended June 30, 2026 was approximately $1,193,000, an increase of approximately $1,152,000 or 2,809.8%, compared to approximately $41,000 during the same period in the prior year. The increase was primarily attributable to the amortization of musical works copyrights acquired by the Company, which are being amortized over an estimated 18-month useful life based on the expected peak streaming period.

Previous wording

For the three months ended March 31, 2026, costs and expenses related to our TalentAlly Network segment decreased by approximately $147,000, or 15.0%, as compared to the same period in the prior year. The decrease is primarily a result of reductions of approximately $140,000 in payroll related costs, approximately $45,000 in sales and marketing costs, approximately $13,000 in revenue-sharing costs, approximately $34,000 in third-party software related to sales, and approximately $4,000 in bad debt expenses. These decreases were mainly attributable to workforce reductions and operational efficiencies implemented in response to decreased revenue. Partially offsetting the decreases is an increase of approximately $89,000 in franchise tax expenses, primarily due to an increase in outstanding shares.

Current wording

For the three months ended June 30, 2026, costs and expenses related to our TalentAlly Network segment decreased by approximately $247,000, or 26.9%, as compared to the same period in the prior year. The decrease was primarily a result of reductions of approximately $124,000 in payroll related costs, approximately $76,000 in sales and marketing costs, approximately $7,000 in revenue-sharing costs, approximately $28,000 in third-party software related to sales, approximately $10,000 in bad debt expenses, approximately $9,000 in legal expenses, and $7,000 in miscellaneous expenses. These decreases were mainly attributable to workforce reductions and operational efficiencies implemented in response to decreased revenue. Partially offsetting the decreases was an increase of approximately $14,000 in franchise tax expenses, primarily due to an increase in outstanding shares.

Previous wording

For the three months ended March 31, 2026, costs and expenses related to the NAPW Network increased by approximately $1,000, or 0.8%, as compared to the same period in the prior year. The increase is predominantly due to an increase of approximately $1,000 in general and administrative costs, primarily attributable to slightly higher operating and administrative support expenses.

Current wording

For the six months ended June 30, 2026, costs and expenses related to the NAPW Network decreased by approximately $26,000, or 10.8%, as compared to the same period in the prior year. The decrease was primarily attributable to an approximate $19,000 reduction in sales and marketing expenses due to reduced marketing and promotional activities and an approximate $8,000 reduction in costs of sales and services due to lower levels of membership-related service activities, partially offset by an approximate $1,000 increase in general and administrative expenses resulting from slightly higher operating and administrative support costs.

Previous wording

For the three months ended March 31, 2026, costs and expenses related to RemoteMore increased by approximately $273,000, or 47.5%, as compared to the same period in the prior year, predominantly due to an increase of approximately $345,000 in costs of sales. The increase was primarily attributable to higher contractor costs and consulting service expenses, driven by increased revenue activity and the need for additional technical and project support to meet client demand. Partially offsetting the increase are decreases of approximately $35,000 in general and administrative costs, approximately $20,000 in bad debt expense and approximately $17,000 in sales and marketing costs. These decreases were primarily attributable to workflow restructuring and operational efficiency initiatives implemented to improve cost management.

Current wording

For the six months ended June 30, 2026, costs and expenses related to RemoteMore increased by approximately $71,000, or 5.3%, as compared to the same period in the prior year, predominantly due to an increase of approximately $71,000 in costs of sales. The increase was primarily attributable to higher contractor costs and consulting service expenses incurred during the first quarter of 2026, driven by increased revenue-generating activities and the need for additional technical and project support to meet client demand.

Previous wording

For the three months ended March 31, 2026, costs and expenses related to Licensing Service increased by approximately $1,156,000, or 100.0%, as compared to the same period in the prior year. The increase is predominantly attributable to the amortization of musical works copyrights acquired by the Company, which are being amortized over an estimated 18-month useful life based on the expected peak streaming period.

Current wording

For the three months ended June 30, 2026, costs and expenses related to Licensing Service increased by approximately $1,156,000, or 100%, as compared to the same period in the prior year. The increase was predominantly attributable to the amortization of musical works copyrights acquired by the Company, which are being amortized over an estimated 18-month useful life based on the expected peak streaming period.

Previous wording

For the three months ended March 31, 2026, costs and expenses related to Corporate Overhead decreased by approximately $91,000, or 17.0%, as compared to the same period in the prior year. The decrease is predominantly due to approximately $51,000 in legal costs, approximately $38,000 in investor relations expenses, approximately $24,000 in filing fees, approximately $20,000 in payroll related costs, and approximately $10,000 in accounting expenses. These decreases were primarily attributable to reduced legal and financing activities, workforce reductions, and accounting software upgrades that improved operational efficiency. Partially offsetting the decreases is the increases of approximately $40,000 in share-based compensation expenses and approximately $12,000 in board of directors expenses.

Current wording

For the three months ended June 30, 2026, costs and expenses related to Corporate Overhead increased by approximately $104,000, or 31.1%, as compared to the same period in the prior year. The increase was predominantly due to approximately $113,000 share-based compensation expenses, and approximately $5,000 in financial expenses. Partially offsetting the increases was the decreases of approximately $14,000 in payroll related costs.

Previous wording

Consolidated Net Loss from Continuing Operations, Net of Tax. As the result of the factors discussed above, during the three months ended March 31, 2026, we incurred a net loss from continuing operations of approximately $1,856,000, an increase in the net loss of approximately $1,115,000, compared to a net loss of approximately $741,000 during the three months ended March 31, 2025.

Current 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, 2026, we incurred a net loss from continuing operations of approximately $1,716,000, an increase in the net loss of approximately $1,224,000, compared to a net loss of approximately $492,000 during the three months ended June 30, 2025. As the result of the factors discussed above, during the six months ended June 30, 2026, we incurred a net loss from continuing operations of approximately $3,572,000, an increase in the net loss of approximately $2,339,000, compared to a net loss of approximately $1,233,000 during the six months ended June 30, 2025.

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 March 31, 2026, we had cash and cash equivalents of approximately $35,000 compared to cash and cash equivalents of approximately $217,000 at December 31, 2025. Our working capital deficit has decreased from approximately $4,043,000 as of December 31, 2025 to approximately $788,000 as of March 31, 2026. We had an accumulated deficit of approximately $110,720,000 at March 31, 2026.

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 June 30, 2026, we had cash and cash equivalents of approximately $142,000 compared to cash and cash equivalents of approximately $217,000 at December 31, 2025. Our working capital deficit had decreased from approximately $4,043,000 as of December 31, 2025 to approximately $947,000 as of June 30, 2026. We had an accumulated deficit of approximately $112,431,000 at June 30, 2026.

Previous wording

The significant decrease in our cash and cash equivalents and working capital deficit during the first three months of 2026 was primarily due to cash used in operating activities of approximately $362,000 and the issuance of 1,358,000 shares of common stock in January 2026 to satisfy other current liabilities related to the purchase of DTT Tokens, which were valued at $2,593,780 in December 2025. 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

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 March 31, 2026 and cash flow from operations may not be sufficient to meet our working capital requirements for the fiscal year ending December 31, 2026. To address our liquidity needs, during the first quarter of 2026, the Company issued 1,388,902 shares of its Common Stock to Streeterville Capital, LLC at a price range of $0.79 to $1.06 per share, resulting in aggregate gross proceeds of $1,205,000, which is recorded as restricted cash. Management has implemented cost-reduction measures, including personnel reductions and vendor renegotiations, and is actively exploring additional financing opportunities. There can be no assurance 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 accelerate plans to conserve liquidity. Future efforts to raise additional funds may not be successful or may not be available on acceptable terms, if at all.

Current wording

Our cash and cash equivalents at June 30, 2026 and cash flow from operations may not be sufficient to meet our working capital requirements for the fiscal year ending December 31, 2026. To address our liquidity needs, management has implemented cost-reduction measures, including personnel reductions and vendor renegotiations, and is actively exploring additional financing opportunities. There can be no assurance 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 accelerate plans to conserve liquidity. Future efforts to raise additional funds may not be successful or may not be available on acceptable terms, if at all.

Previous wording

Net cash used in operating activities from continuing operations during the three months ended March 31, 2026, was approximately $362,000. We had a net loss from continuing operations of approximately $1,856,000 during the three months ended March 31, 2026, which included stock-based compensation expense of approximately $31,000, depreciation and amortization expense of approximately $1,196,000, reversal of provision for doubtful accounts of approximately $15,000, loss on disposal of property, plant and equipment of approximately $19,000, and noncash lease expense of $23,000. Changes in operating assets and liabilities provided approximately $241,000 of cash during the three months ended March 31, 2026.

Current wording

Net cash used in operating activities from continuing operations during the six months ended June 30, 2026, was approximately $955,000. We had a net loss from continuing operations of approximately $3,572,000 during the six months ended June 30, 2026, which included stock-based compensation expense of approximately $62,000, depreciation and amortization expense of approximately $2,388,000, reversal of provision for doubtful accounts of approximately $27,000, loss on disposal of property, plant and equipment of approximately $19,000, and noncash lease expense of $46,000. Changes in operating assets and liabilities provided approximately $129,000 of cash during the six months ended June 30, 2026.

Previous wording

Net cash used in operating activities from continuing operations during the three months ended March 31, 2025, was approximately $284,000. We had a net loss from continuing operations of approximately $741,000 during the three months ended March 31, 2025, which included stock-based compensation expense of approximately $37,000, depreciation and amortization expense of approximately $41,000, provision for doubtful accounts of approximately $10,000, unrealized loss on investment of $44,000 and noncash lease expense of $23,000. Changes in operating assets and liabilities provided approximately $303,000 of cash during the three months ended March 31, 2025.

Current 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 $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.

Previous wording

Net cash used in investing activities from continuing operations during the three months ended March 31, 2025, was $1,300,000, which is related to the investment in 13% of AI Geometric Ltd’s outstanding shares.

Current wording

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

Previous wording

Net cash provided by financing activities during the three months ended March 31, 2025 was approximately $349,000 representing the proceeds from the sale of Common Stock.

Current wording

Net cash provided by financing activities during the six months ended June 30, 2026, was approximately $2,140,000, consisting of $1,495,000 in proceeds from the sale of Common Stock and $645,000 in short-term debt, which is non-interest bearing in amount.

Previous wording

Net cash provided by financing activities during the three months ended March 31, 2026, was approximately $1,385,000, consisting of $1,205,000 in proceeds from the sale of Common Stock and $180,000 in short-term debt, which is non-interest bearing and immaterial in amount.

Current wording

Net cash provided by financing activities during the six months ended June 30, 2025 was approximately $478,000, consisting of $400,000 in proceeds from the sale of Common Stock and $78,000 in short-term debt, which is non-interest bearing and immaterial in amount.

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 months ended March 31, 2026 and 2025:

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 six months ended June 30, 2026 and 2025: