[8-K] Professional Diversity Network, Inc. Reports Material Event

Rhea-AI Filing Summary

Professional Diversity Network, Inc. (NASDAQ: IPDN) filed a Form 8-K announcing two unsecured Convertible Note Purchase Agreements executed on July 7 and July 9, 2025 with non-affiliated accredited investors. The company issued a $250,000 note ("First Note") and a $150,000 note ("Second Note"), generating $400,000 in gross proceeds.

Key terms:

• Maturity: 360 days from each purchase date.
• Interest: 12% per annum; increases to 18% upon default.
• Conversion price—First Note: greater of (i) a $0.47 floor or (ii) 80% of the lowest of (A) 15-day average close, (B) 10-day VWAP, or (C) lowest 3-day VWAP within the 45 trading days prior to conversion.
• Conversion price—Second Note: greater of (i) a $0.47 floor or (ii) 80% of the lowest 15-day average close before conversion.
• Default provisions: customary non-payment and insolvency triggers; upon default, holders may accelerate repayment and pursue remedies.
• Securities law: Notes and any conversion shares issued under Section 4(a)(2) and Regulation D exemptions.

The filing also cross-references the creation of a direct financial obligation (Item 2.03) and the unregistered sale of equity securities (Item 3.02). Forms of the Purchase Agreement and the Note are included as Exhibits 10.1 and 10.2.

This bridge financing supplies near-term liquidity but introduces potential equity dilution if holders convert at a discount to market. The 12% coupon and one-year tenor highlight the short-term nature and cost of capital.

Positive

• $400,000 in gross proceeds enhances short-term liquidity without pledging collateral.
• One-year maturity provides flexibility before repayment or conversion is required.

Negative

• 12% annual coupon represents expensive capital relative to typical bank financing.
• Conversion at up to 20% discount to market with a $0.47 floor poses dilution risk for existing shareholders.
• Interest jumps to 18% upon default, increasing financial strain in adverse scenarios.

Insights

Financial Analyst

TL;DR: $400k convertible notes add liquidity, but high 12% rate and 20% conversion discount create dilution risk; overall impact appears neutral.

The company secured $400,000 in unsecured funding, which should bolster working capital for the next twelve months. While the notes are relatively small, the 12% coupon implies higher borrowing costs, reflecting limited access to cheaper capital. The floor price of $0.47 and 20% discount mechanism could pressure the share price upon conversion, yet the dollar amount is modest. Because proceeds are limited and no operational metrics changed, I view the event as capital-structure neutral for current valuation—providing cash at the expense of potential dilution.

Risk Analyst

TL;DR: Dilution and 18% default rate elevate shareholder risk, outweighing modest cash benefit; impact leans negative.

The notes’ structure embeds multiple risk factors: (i) a generous 20% conversion discount plus a low $0.47 floor that could lead to substantial share issuance in a falling market, (ii) an interest step-up to 18% upon default, and (iii) unsecured status that leaves noteholders incentivised to convert rather than rely on recovery. Combined, these terms may exert downward pressure on the equity if liquidity remains tight, giving this filing a mildly adverse risk signal despite its small nominal size.

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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): July 7, 2025

PROFESSIONAL DIVERSITY NETWORK, INC.

(Exact name of registrant as specified in its charter)

Delaware		001-35824		80-0900177
(State or other jurisdiction		(Commission		(I.R.S. Employer
of incorporation)		File Number)		Identification No.)

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

(Former name or former address, if changed since last report)

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):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $.01 par value		IPDN		The NASDAQ Stock Market LLC

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 1.01. Entry into a Material Definitive Agreement

On July 7, 2025 and July 9, 2025, Professional Diversity Network, Inc. (the “Company”) entered into two separate Convertible Note Purchase Agreements (each, a “Purchase Agreement” and together, the “Purchase Agreements”) with two non-affiliated accredited investors (the “Purchasers”). Pursuant to the Purchase Agreements, the Company issued and sold to the Purchasers unsecured convertible promissory notes on July 7, 2025 and July 9, 2025, in the principal amounts of $250,000 (the “First Note”) and $150,000 (the “Second Note”, and together with the First Note, the “Notes”), respectively, for aggregate gross proceeds of $400,000.

The First Note is convertible, at the option of the Purchasers, into restricted shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), at a conversion price equal to the greater of (i) a floor price of $0.47 (subject to adjustment for stock splits and similar events), and (ii) 80% of the lowest of (A) the 15-day average closing price, (B) the 10-day volume-weighted average price (“VWAP”), or (C) the lowest 3-day VWAP during the 45 trading days immediately prior to the date of the applicable conversion notice.

The Second Note is convertible, at the option of the Purchasers, into restricted shares of the Company’s Common Stock, at a conversion price equal to the greater of (i) a floor price of $0.47 (subject to adjustment for stock splits and similar events), and (ii) 80% of the lowest of the 15-day average closing price preceding the date of the applicable conversion notice.

The Notes bear interest at a rate of 12% per annum and mature 360 days after the applicable purchase price payment date. The Notes contain customary events of default, including non-payment and insolvency-related events. Upon an event of default, the interest rate increases to 18% per annum, and the Purchasers may accelerate the Notes and pursue additional remedies.

The issuance of the Notes were, and the shares of Common Stock issuable upon the conversion thereof 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 Regulation D promulgated thereunder.

The foregoing descriptions of the Purchase Agreements and the Notes do not purport to be complete and are qualified in their entirety by reference to the full text of the form of Purchase Agreement and form of Note, which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated in this Item 2.03 by reference.

Item 3.02. Unregistered Sales of Equity Securities

The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated in this Item 3.02 by reference.

   Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.                   Description

10.1         Form of Purchase Agreement

10.2         Form of Note

104          Cover Page Interactive Data File (embedded within the Inline XBRL document)

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.

	Professional Diversity Network, Inc.
Date: July 11, 2025	/s/ Adam He
	Adam He, Chief Executive Officer

FAQ

How much capital did IPDN raise under the July 2025 convertible notes?

The company raised $400,000 in aggregate gross proceeds—$250,000 on July 7 and $150,000 on July 9, 2025.

What is the interest rate on IPDN's new convertible notes?

The notes bear 12% annual interest, increasing to 18% if a default occurs.

At what price can the new notes convert into IPDN common stock?

Conversion occurs at the greater of a $0.47 floor or 80% of specified market price averages immediately preceding conversion.

When do the convertible notes issued in July 2025 mature?

Each note matures 360 days after its respective purchase date.

Were the securities registered with the SEC?

No. The notes and any conversion shares rely on the Section 4(a)(2) and Regulation D exemptions from registration.