Exhibit 99.1
 
 
Professional Diversity Network, Inc. Announces Third Quarter 2017 Financial Results
 
CHICAGO, November 13, 2017 (GLOBE NEWSWIRE) -- Professional Diversity Network, Inc. (NASDAQ: IPDN) (“PDN” or the “Company”), a global developer and operator of online and in-person networks that provides access to networking, training, educational and employment opportunities for diverse professionals, today announced financial results for its fiscal third quarter ended September 30, 2017.R
 
During the third quarter ended September 30, 2017, we continued to experience losses as we furthered our efforts to integrate new management and China operations, reduce costs and streamline our business. Total revenues in the third quarter decreased $1,939,000, or 30.5% for the three months ended September 30, 2017, compared to the same prior year period.

Total costs and expenses were $7,133,000 for the third quarter, compared to $7,640,000 for same period in the prior year, a decrease of $507,000 or 6.6%. The decrease is mainly attributable to a $788,000 or 25.7% decrease in sales and marketing expense mostly due to reduction in sales force, a decrease of $87,000 or 11.7% in cost of revenue, and a slight decrease of $13,000 or 1.6% in depreciation and amortization. The decrease in expenses was partially offset by an increase of $226,000 or 7.5% in general and administrative expense, and $155,000 litigation settlement expenses in the third quarter of 2017, of which $146,000 was accrued for the potential back pay related to what is expected to be non-recurring legal expenses.

For the three months ended September 30, 2017, we realized a net loss of approximately $2,489,000, a $1,216,000 increase from the comparable prior year period.  This increase in net loss was primarily driven by a decrease of $1,578,000 in NAPW segment revenues from membership fees, related services and product sales period-over-period (attributable to the restricting of NAPW and positioning for its global brand emergence as IAW in 2018), partially offset by a decrease of $788,000 in overall sales and marketing expenses.

During the nine months ended September 30, 2017, we incurred a net loss of $17,666,000, compared to net loss of $3,519,000 for the nine months ended September 30, 2016, an increase of $14,147,000. The increase in net loss was primarily attributable to a decrease of $6,036,000 in NAPW segment revenues from membership fees, related services and product sales period-over-period, along with NAPW segment goodwill impairment charge of $9,920,000, and an increase of $2,395,000 in overall general and administrative expenses, partially offset by a decrease of $2,199,000 in overall sales and marketing expenses.

As of September 30, 2017, we had $2.8 million in cash.
 
Michael Wang, PDN Chief Executive Officer, stated, "In the third quarter of 2017, we began to sell memberships in China, launched a new Entrepreneurs Club, planned for our premiere event of 2017 in China and took meaningful actions to address the profitability of our US operations.I believe that our third quarter of 2017 was a productive period. Our expansion to China has now taken a firm footing and our initiatives have now been launched in the market. Because of this progress we are closer to achieving our goals of profitability and growth.  We believe that the work that we have done since we took control of the company in November 2016 will be demonstrated in the fourth quarter of 2017 and in 2018, beginning with our event on December 2nd, in Beijing.
 
 
In China, year to date, the Company successfully launched its Education and Training segment, and held eleven paid events to-date. Those events have provided live marketing research, and the results have helped us to plan and seek to enhance future events. The Company also launched in China its Women’s Networking segment, holding its first marketing event near the end of the second quarter. The Company continues to build the framework for its third new China business, Secondary Education Services. The model involves working on partnerships with educational institutions, the first of which we announced during the second quarter.

Specific restructuring and new business development for the quarter included:
 
·
Commenced selling IAW memberships in China, ranging from RMB 20,000 to RMB 200,000 (Approximately $3,000 to $30,000 annual memberships). IAW China held first IAW VIP China event at the Women’s Forum Global Meeting, in Paris France
 
·
Commenced offering Global Elite Entrepreneurs Club memberships in China at annual memberships costs starting at RMB 19,800 to RMB 398,000 (Approximately $2900 to $58,000)
 
·
Finalized plans and secured commitments to hold largest education and training event of the year on December 2nd, 2017 in Beijing China, “The International Capital Leadership Summit.”  Mr. Bruce Aust, Vice Chairman of the Nasdaq Exchange will be featured at the event where the company hopes to have as many as 5,000 participants

During 2018, the company anticipates soon investing in increasing women’s networking membership sales and expanding from NAPW (National Association of Professional Women), a national organization to IAW (International Association of Women), an international women’s networking organization. The company believes that in a global market place, the IAW organization can offer all the value of today’s NAPW and add an international platform to enhance membership value.”
 
 
Professional Diversity Network, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
  
September 30,
    
December 31,
  
 
  
2017
    
2016
  
 
  
(Unaudited)
        
Current Assets:
            
Cash and cash equivalents
  
$
2,821,729
    
$
6,068,973
  
Accounts receivable, net
    
1,799,013
      
2,170,529
  
Incremental direct costs
    
241,235
      
423,023
  
Prepaid expenses and other current assets
    
490,581
      
957,140
  
Total current assets
    
5,352,558
      
9,619,665
  
 
                
Property and equipment, net
    
291,774
      
277,534
  
Capitalized technology, net
    
141,573
      
173,368
  
Goodwill
    
10,280,885
      
20,201,190
  
Intangible assets, net
    
7,035,139
      
9,183,439
  
Merchant reserve
    
780,849
      
1,426,927
  
Security deposits
    
239,059
      
220,754
  
Other assets
    
-
      
35,000
  
Total assets
  
$
24,121,837
    
$
41,137,877
  
 
                
Current Liabilities:
                
Accounts payable
  
$
1,232,510
    
$
2,172,332
  
Accrued expenses
    
1,172,435
      
962,172
  
Deferred revenue
    
4,422,715
      
5,485,599
  
Total current liabilities
    
6,827,660
      
8,620,103
  
 
                
Deferred tax liability
    
2,492,837
      
3,653,274
  
Deferred rent
    
60,959
      
55,718
  
Other liabilities
    
78,481
      
33,159
  
Total liabilities
    
9,459,937
      
12,362,254
  
 
                
Commitments and contingencies
                
 
                
Stockholders' Equity
                
Common stock, $0.01 par value; 45,000,000 shares authorized; 3,936,399 shares and
3,623,899
  shares issued as of September 30, 2017 and December 31, 2016, respectively; and
3,931,838 shares and 3,619,338 shares outstanding as of September 30, 2017 and
December 31, 2016, respectively
    
39,329
      
36,204
  
Additional paid in capital
    
79,783,969
      
76,234,772
  
Accumulated other comprehensive loss
    
(1,435
)
    
-
  
Accumulated deficit
    
(65,122,846
)
    
(47,458,236
)
Treasury stock, at cost; 1,048 shares at September 30, 2017 and December 31, 2016
    
(37,117
)
    
(37,117
)
Total stockholders' equity
    
14,661,900
      
28,775,623
  
 
                
Total liabilities and stockholders' equity
  
$
24,121,837
    
$
41,137,877
  
 
 
Professional Diversity Network, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)
 
 
  
Three Months Ended September 30,
    
Nine Months Ended
September 30,
  
 
  
2017
    
2016
    
2017
    
2016
  
 
                        
Revenues:
                        
Membership fees and related services
  
$
2,204,909
    
$
3,748,334
    
$
7,465,202
    
$
13,047,652
  
Lead generation
    
1,370,465
      
1,554,370
      
4,699,399
      
4,489,919
  
Recruitment services
    
694,454
      
954,887
      
1,977,101
      
2,295,556
  
Product sales and other
    
18,285
      
52,857
      
91,226
      
544,440
  
Education and training
    
68,890
      
-
      
898,584
      
-
  
Consumer advertising and marketing solutions
    
65,188
      
49,719
      
189,217
      
176,771
  
Total revenues
    
4,422,191
      
6,360,167
      
15,320,729
      
20,554,338
  
 
                                
Costs and expenses:
                                
Cost of revenues
    
658,297
      
745,159
      
2,193,224
      
2,433,550
  
Sales and marketing
    
2,275,585
      
3,064,454
      
8,114,908
      
10,314,145
  
General and administrative
    
3,236,848
      
3,010,862
      
11,322,513
      
8,928,493
  
Litigation settlement
    
155,216
      
-
      
155,216
      
500,000
  
Goodwill impairment charge
    
-
      
-
      
9,920,305
      
-
  
Depreciation and amortization
    
806,898
      
819,894
      
2,443,511
      
2,498,136
  
Total costs and expenses
    
7,132,844
      
7,640,369
      
34,149,677
      
24,674,324
  
 
                                
Loss from operations
    
(2,710,653
)
    
(1,280,202
)
    
(18,828,948
)
    
(4,119,986
)
 
                                
Other (expense) income
                                
Interest expense
    
-
      
(215,781
)
    
(12,399
)
    
(216,948
)
Interest and other income
    
4,117
      
150
      
9,218
      
801
  
Other finance income
    
5,318
      
-
      
7,082
      
-
  
Other (expense) income, net
    
9,435
      
(215,631
)
    
3,901
      
(216,147
)
 
                                
Change in fair value of warrant liability
    
-
      
(401,000
)
    
-
      
(401,000
)
                                 
Loss before income tax benefit
    
(2,701,218
)
    
(1,896,833
)
    
(18,825,047
)
    
(4,737,133
)
Income tax benefit
    
(213,133
)
    
(623,699
)
    
(1,160,437
)
    
(1,218,092
)
Net loss
    
(2,488,085
)
    
(1,273,134
)
    
(17,664,610
)
    
(3,519,041
)
 
                                
Other comprehensive loss:
                                
Foreign currency translation adjustment
    
(3,056
)
    
-
      
(1,435
)
    
-
  
Comprehensive loss
  
$
(2,491,141
)
  
$
(1,273,134
)
  
$
(17,666,045
)
  
$
(3,519,041
)
 
                                
Net loss per common share, basic and diluted
  
$
(0.63
)
  
$
(0.70
)
  
$
(4.52
)
  
$
(1.94
)
 
                                
Weighted average shares used in computing
net loss per common share:
                                
Basic and diluted
    
3,932,886
      
1,809,676
      
3,912,282
      
1,809,676
  
 
 
The following table provides a reconciliation of Adjusted EBITDA to Net Loss, the most directly comparable GAAP measure reported in our consolidated financial statements:
 
   
Three Months Ended
    
Nine Months Ended
  
 
  
September 30,
    
September 30,
  
 
  
2017
    
2016
    
2017
    
2016
  
   
(in thousands)
              
Net loss
  
$
(2,488
)
  
$
(1,273
)
  
$
(17,665
)
  
$
(3,519
)
Stock-based compensation expense
    
146
      
118
      
731
      
218
  
Goodwill impairment charge
    
-
      
-
      
9,920
      
-
  
Litigation Settlement
    
155
      
-
      
155
      
500
  
Gain on lease cancellation
    
-
      
-
      
-
      
(424
)
Depreciation and amortization
    
807
      
820
      
2,444
      
2,498
  
Change in fair value of Warrant Liability
    
-
      
401
      
-
      
401
  
Interest Expense
    
-
      
216
      
12
      
217
  
Interest and other income
    
(4
)
    
-
      
(9
)
    
(1
)
Income tax benefit
    
(213
)
    
(624
)
    
(1,160
)
    
(1,218
)
Adjusted EBITDA
  
$
(1,597
)
  
$
(342
)
  
$
(5,572
)
  
$
(1,328
)

About Professional Diversity Network (PDN)

Professional Diversity Network, Inc. (PDN) is a global developer and operator of online and in-person networks that provides access to networking, training, educational and employment opportunities for diverse professionals. We operate subsidiaries in the United States and China including Noble Voice, a career placement and career counseling call center and National Association of Professional Women (NAPW), which is one of the largest, most recognized networking organizations of professional women in the country, spanning more than 200 industries and professions. Through an online platform and our relationship recruitment affinity groups, we provide our employer clients a means to identify and acquire diverse talent and assist them with their efforts to comply with the Equal Employment Opportunity Office of Federal Contract Compliance Program. Our mission is to utilize the collective strength of our affiliate companies, members, partners and unique proprietary platform to be the standard in business diversity recruiting, networking and professional development for women, minorities, veterans, LGBT and disabled persons globally.
 
 
Forward-Looking Statements

This press release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. This release does not constitute an offer to sell or a solicitation of offers to buy any securities of any entity. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business, which include the risk factors disclosed in our most recently filed Annual Report on Form 10-K and in our subsequent filings with the Securities and Exchange Commission. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," “plan,” "should," and "would" or similar words. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise. Our most recently filed Annual Report on Form 10-K, together with this press release and the financial information contained herein, are available on our website, www.ipdnusa.com. Please click on "Investor Relations."
 
CONTACT: Professional Diversity Network, Inc.

Jason Assad – Investor Relations
jwassad@prodivnet.com
678-570-6791

Jim Kirsch – Co Executive Chairman
jkirsch@prodivnet.com
312-614-9021