Current Report Filing (8-k)
April 26 2021 - 4:06PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): April 26, 2021
PROFESSIONAL
DIVERSITY NETWORK, INC.
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(Exact
name of registrant as specified in its charter)
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Delaware
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001-35824
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80-0900177
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(State
or other jurisdiction
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(Commission
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(I.R.S.
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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55
E. Monroe Street, Suite 2120, Chicago, Illinois 60603
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (312) 614-0950
N/A
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(Former
name or former address, if changed since last report)
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
Stock, $.01 par value
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IPDN
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The
NASDAQ Stock Market LLC
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item
2.06. Material Impairments
The
Company previously disclosed in its Form 10-K for the year ending December 31, 2019 (the “2019 10-K”) and subsequently that
the assets of PDN China were frozen by Chinese local authorities in November 2019 in connection with the criminal investigation of alleged
illegal public fund raising by Gatewang Group (the “Gatewang Case”), a separate company organized under the laws of the People’s
Republic of China (“Gatewang”), with which Mr. Maoji (Michael) Wang, the former Chairman and CEO of the Company was affiliated.
A subsequent investigation led by a special committee of the Board concluded that it did not find any evidence that the Company or PDN
China has engaged in the criminal activity of illegal fund-raising as alleged against Gatewang. The Company subsequently discontinued
all of its operations in China.
The
Company also previously disclosed in the 2019 Form 10-K that although the seizure of PDN China’s assets had been lifted in
March 2020, PDN China’s bank account (the “PDN China Account”) with a balance of RMB 20,080,467 (approximately $3.1
million) continued to be frozen by the Chinese local authorities pending the outcome of the Gatewang Case. The Company has classified
this entire cash balance as a long-term asset (the “Frozen Cash Asset”) of discontinued operations in its financial statements.
On
April 22, 2021, the Company learned that RMB 18,841,064.15 (approximately $2.87mm) had been seized from the PDN China Account by Longxu
District Court of Wuzhou City in Guangxi Province to satisfy a judgment in favor of the plaintiffs in the Gatewang Case. On April 26,
2021, the Company concluded that the seizure of such cash assets is a material reduction of Company assets required to be reported by
this filing. The cash value at time of seizure is approximately $2.87 mm. The Company has asserted its claim to these funds as the genuine
owner to the Chinese officials and asked for their return. The Company plans to pursue all possible legal alternatives to have these
funds returned to the Company but such return is uncertain at this time.
The
seizure of these cash funds reduces the Company’s shareholders’ equity by an equal amount, which results in its stockholders’
equity being less than the $2.5 million required by The Nasdaq Stock Market LLC (“Nasdaq”) under its Listing Rule 5550(b)(1)
for continued listing of the Company’s common shares on the Nasdaq Capital Market. The Company plans to explore alternatives for
increasing its stockholders’ equity in order to meet Nasdaq’s listing requirements, including the possibility of issuing
additional equity. However, there can be no assurance that the Company will be successful in raising additional equity.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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Professional
Diversity Network, Inc.
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Date:
April 26, 2021
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/s/
Adam He
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Adam
He, Chief Executive Officer
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